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2021 National Lawyers Convention

Public and Private Power: Preserving Freedom or Preventing Harm?

November 11 — 13, 2021

The 2021 National Lawyers Convention took place Thursday, November 11 through Saturday, November 13 at the Mayflower Hotel in Washington, DC. Over three days, the Convention featured four Showcase Sessions discussing the Convention Theme of "Public and Private Power: Preserving Freedom or Preventing Harm?", sixteen breakout sessions sponsored by the Practice Groups, the Thirteenth Annual Rosenkranz Debate, the Twentieth Annual Barbara K. Olson Memorial Lecture, and the 2021 Antonin Scalia Memorial Dinner.

Watch the Convention livestreams on our website, YouTube or in the Guidebook app!
Edited videos and podcasts will be available soon!

LodgingFeesCLE


2021 Antonin Scalia Memorial Dinner

With:

Collection of the Supreme Court of the United States
Hon. Tom Cotton
United States Senate,
Arkansas

 Union Station
50 Massachusetts Avenue NE
Washington, DC 20002
Thursday, November 11, 2021
Reception - 6:00 p.m.
Dinner - 7:00 p.m.
(ticketed event) BLACK TIE OPTIONAL
SOLD OUT


Twentieth Annual Barbara K. Olson Memorial Lecture

Featuring:


Hon. Theodore B. Olson
Partner,
Gibson Dunn

The Mayflower Hotel
1127 Connecticut Avenue NW
Friday, November 12, 2021
5:00 p.m.
(ticketed event)
SOLD OUT


Thirteenth Annual Rosenkranz Debate

RESOLVED: Concentrated corporate power is a greater threat to individual freedom than government power

Featuring:


Mr. John Allison
Executive in Residence,
Wake Forest University
School of Business

        and  

 

 

 

 

 


Mr. Ashley Keller
Partner,
Keller Lenkner LLC 
 

The Mayflower Hotel
1127 Connecticut Avenue NW
Saturday, November 13, 2021
12:30 p.m.
SOLD OUT


Hon. Robert H. Bork Memorial Lecture

Featuring:


Hon. Laurence H. Silberman
United States Court of Appeals,
District of Columbia Circuit

Discussing:
The Job of Attorney General—A Historical Perspective

The Mayflower Hotel
1127 Connecticut Avenue NW
Saturday, November 13, 2021
4:30 p.m.
SOLD OUT


Addresses by


Mr. Vivek Ramaswamy
Entrepreneur and Author,
Woke Inc.: Inside Corporate
America's Social Justice Scam

The Mayflower Hotel
1127 Connecticut Avenue NW
Friday, November 12, 2021
1:45 p.m.
SOLD OUT

        

 

 

 

 

 


Hon. Amul Thapar
United States Court of Appeals,
Sixth Circuit

The Mayflower Hotel
1127 Connecticut Avenue NW
Thursday, November 11, 2021
9:00 a.m.
SOLD OUT

 


Showcase Sessions Discussing the Convention Theme:

"Public and Private Power: Preserving Freedom or Preventing Harm?"

  • Social Activism and Corporate Leadership
  • Private Control Over Public Discussion
  • Corporate and Academic Management Today
  • Law, Science, and Public Policy

Practice Group Breakout Sessions

  • The Separation of Powers and Political Polarization
  • Federal Consent Decrees: Good Governance, an Expansion of Federal Power, or Both?
  • Special Session: A View From In-House
  • IP Law and Culture
  • The Antitrust Revolution?
  • "Progressive" HR in 2021: The Solution or the Problem?
  • Criminal Justice 2021 and The Rule of Law
  • Religious Liberty after Fulton v. City of Philadelphia
  • Administrative Inquisitions? How Agencies Initiate, Conduct, and Conclude Investigations
  • Classrooms, Curricula, and the Law
  • Federalism and Broadband Spending: Finding the Right Approach
  • "Cancel Culture" Comes to Financial Services
  • Is Anyone Still Committed to Free Speech?
  • China, Global Companies, and Human Rights
  • Special Session: Originalism: Perspectives from the Bench
  • ABA Law School Accreditation Standards
  • Private Power and Eminent Domain
  • Second Amendment -- Next Steps in the Unfolding Litigation Battle

Up to 20 hours of Continuing Legal Education (CLE) credits available. Direct all CLE inquiries to the Federalist Society's national office - (202) 822-8138 or email cle@fedsoc.org.


Lodging

Reserve early! Washington, DC hotels are becoming booked very quickly for the fall convention season. To reserve overnight accommodations for the Convention, please contact The Mayflower directly:

The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

Reservations Toll Free: 877-212-5752
Reservations Local Phone: 202-347-3000

Reservation Link: https://book.passkey.com/event/50205953/owner/1261/home

Cut off Date: October 18, unless rooms sell out sooner.

Inquire about the special rate of $279 per night offered to Federalist Society Convention registrants. Specify "Federalist Society" when contacting the Mayflower.


Please note that we are subject to local and federal government restrictions, which could include capacity limitations; therefore, register early to secure your spot.

All events are now sold out. You may add yourself to the waitlists for the Antonin Scalia Memorial Dinner and the Barbara K. Olson Memorial Lecture & Reception by selecting the Waitlist ticket options. If a spot opens up, you will be contacted and confirmed before any payment is processed.

Convention Fees

Individual Day** 
Non-MemberSOLD OUT $250 per day
Active MemberSOLD OUT $200 per day
Student Non-MemberSOLD OUT $60 per day
Student Active Member                                                SOLD OUT $50 per day


**Individual day purchase includes that day’s sessions, CLE, and lunch.  It does not include social events. CLE materials will be available electronically. A hardcopy of materials can be provided upon request after the Convention, make sure to request CLE Materials in hardcopy form on the CLE sign-in form during the Convention.

Social Events*** 
Antonin Scalia Memorial Dinner
Non-Member
SOLD OUT $250
Antonin Scalia Memorial Dinner
Active Member
SOLD OUT $200
Barbara K. Olson Memorial Lecture & Reception
Non-Member
    SOLD OUT $150
Barbara K. Olson Memorial Lecture & Reception         
Active Member
    SOLD OUT $100

 ***The Antonin Scalia Memorial Dinner and the Barbara K. Olson Memorial Lecture & Reception are now sold out. You may add yourself to the waitlist for either event. If a spot opens up, you will be contacted and confirmed before any payment is processed.

CANCELLATION FEE OF $100 AFTER MONDAY, NOVEMBER 1.
NO REFUNDS WILL BE GIVEN AFTER MONDAY, NOVEMBER 8.


Media Inquiries

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9:00 a.m. - 9:45 a.m.
Opening Address by Amul Thapar

2021 National Lawyers Convention

Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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Description

The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". The opening address was given by Judge Amul Thapar.

Featuring:

  • Hon. Amul R. Thapar, U.S. Court of Appeals, Sixth Circuit

Speakers

Event Transcript

Dean Reuter:  Good morning. You can applaud the good morning. Thank you. I was worried that no one would come.

 

Amul Thapar:  That’s because it was me.

 

Dean Reuter:  Yeah, because it was Amul. I’m Dean Reuter, Senior Vice President and General Counsel of The Federalist Society, and it’s my job to welcome you here this morning. It is so good to see so many of you here at last. Elena Kagan, then the dean of Harvard Law School in 2005, welcomed The Federalist Society to Harvard Law School, warmly, and then she said, good naturedly, “But you are not my people.”

 

      [Laughter]

 

      Well, I welcome you back to the Mayflower and proclaim that you are my people, and decidedly so. So welcome back. Today, November 11th, is of course, Veteran’s Day, so now that I’ve woken you up, I ask you to join me in a moment of silence in observance of the veterans, all of those who are serving now and who have served before.

 

      [Moment of silence]

 

      Thank you. One special observation that I’m really happy to make, actually honored to make, is just a note to mark Justice Clarence Thomas’s 30 years on the Supreme Court. He’s a true intellect and welcome leader on the Court. He’s often described as the Court’s most unwavering originalist, and that’s so important at a moment when we seem to need true originalists the most.

 

      He said, this is at least anecdotal, that the confirmation process was so difficult it fairly ruined the first 43 years of his life, so he swore or promised to serve 43 years, so he owes us 13 years. I don't know if that’s an enforceable promise, but if you see him, you should remind him of that.

 

      Turning now to our convention program, we’ve set an ambitious task, a discussion of the accumulation and the exercise of public and private power defined by our four showcase panels, addresses, and touched on by many of our breakout sessions throughout the convention. Today alone, after a brief opening address by Judge Thapar, we’ll have a showcase panel on “Social Activism and Corporate Leadership” and breakout sessions ranging from life in-house to antitrust to separation of powers and political polarization, criminal justice, religious liberties, and on and on.

 

      Then of course, this evening we’ll celebrate at the annual dinner. Now, I want to mention, this is not just an annual dinner, it’s the Justice Antonin Scalia Memorial Dinner, which of course reminds me of a story.

 

 

This story features Justice Scalia. It took place at what we used to call the Scalia Separation of Powers CLE that many of you might have been able to attend. That was a multi-day course taught by the Justice and John Baker, if John Baker’s in the room here. I used to say people should attend this. It’s a once in a lifetime opportunity to go to this event, it’s so special. Then I realized I had been several times, so it’s technically not a once in a lifetime event.

 

The attendees, the students at the class, are all FedSoc members. They’re all FedSoc lawyers. On the first morning of one of these, the first break, the Justice and I were on the balcony. He said, “Dean,”—that’s what he called me, Dean—“I can’t get these people to participate. I can’t get them to answer my questions.” I said, “Justice Scalia,”—because that’s what I called him, Justice Scalia—I said, “That’s because you’re intimidating.” Justice Scalia gave me a friendly but disbelieving scowl. You’ve all seen that look. I can’t duplicate it, but it was his way of saying, “Phooey,” or maybe “Applesauce.”

 

I said, “Try this. Ask the next question and just wait. Someone will be uncomfortable with the silence, and eventually they’ll answer. You’re intimidating, but they’ll answer under that circumstance.” So he gave me a slightly different friendly but disbelieving scowl. This one I interpreted as “You’re wrong, but whatever.”

 

We go back in. The coursework resumes. Justice Scalia covers some ground, then asks a question. Silence. More silence. Still more silence. Justice Scalia glances my way, gives me a friendly but “I told you so” scowl. Then finally, finally someone raises their hand and begins to answer the question. The guys spins out his answer in 20 or 30 seconds, Scalia nodding, following along, indicating he’s tracking. The guy finishes his answer. Justice Scalia leans into the podium and says into the microphone, “Wrong.”

 

[Laughter]

 

I can hear it now. You’ve got to love the man.

 

It’s now my honor to introduce Judge Amul Thapar, a man who very rarely gets it wrong, himself a great intellect. He’s known to many of you as the highly good-natured jurist seen for years in the Mayflower promenade, now before you as a featured speaker. He’s brilliant. His opinions and dissents have become must-reads, not just for their writing, but for their reasoning. He unfailingly goes where the law takes him, even jailing nuns if necessary. You can look that up if you don’t know the reference.

 

He’s a first-generation American. His parents were small business owners, both of them. His father owned a heating and air conditioning business in Michigan, and I’m betting in Michigan it was more heating than air conditioning. It was the classic small business. The Wikipedia page says that as a young man, Amul Thapar worked in the business and drove the truck, not one of the trucks, the truck. His mother sold her own successful business after 9/11 to help veterans. Not just talk, and even not just the right attitude, but action.

 

To my mind, Judge Thapar represents so much of what is right in America, the realization of the American dream; humble beginnings, hard work, and then ending up on everyone’s U. S. Supreme Court short list. Well, maybe not everyone’s.

 

Perhaps most importantly, so often Judge Thapar goes out of his way to help others, colleagues certainly, but also younger lawyers and students. I’ve seen it. When it comes to lifting up others, he’s tireless. I admire him greatly for that and for many other things. I’m excited to learn what he has to say this morning. It’s a very fitting start to our convention, Judge Thapar.

 

Hon. Amul Thapar:  Dean had one requirement when I give this speech, and that was that I mention his name often, so I’ve now done it. If you hear me say Dean in the middle of a sentence, it’s just achieving the quota. He said, “I’ll give you one quota. Just mention my name a lot.”

 

      I also want to thank all the veterans. We couldn't do this without them. It was amazing after 911 when my mom went to work with the Army. She was a social worker by trade, and she got the opportunity to work with the Army. Every time I talked to her, she was just amazed by the resilience, the wherewithal, and the leadership that the military shows every day. Less than one percent of our citizens now serve, and yet, those are the most important people in this country, so God bless them and thank you for all they do.

 

      Well, it’s wonderful to be back here today and see so many friends, old and new. I’m grateful to The Federalist Society for putting on this year’s event. Every year the convention takes an extraordinary amount of effort, but this year surely was the most challenging in so many ways. I want to start by giving thanks to the staff and the student volunteers who have helped to make this convention possible.

 

      [Applause]

 

      Don’t clap after this one, but Dean, too.

 

      [Laughter]

 

      This promises to be an extraordinary convention, so I’m sure we will appreciate the planners’ efforts more and more over the coming days, especially when I’m done and you can hear from speakers that know what they’re talking about.

 

The theme of this convention is great, “Public and Private Power: Preserving Freedom or Preventing Harm?” This topic touches on perennial questions about the role of government and the scope of liberty. In my brief remarks today, and Dean told me to keep them brief, I want to talk about a third factor that preserves a healthy balance between the state and the individual. That’s the role of civil society in public life.

 

As the late, great Father Richard John Neuhaus noted, “Civil society is made up of those institutions standing between the individual in his private life and the government.” The relationships between the individual, the state, and civil society are always interesting questions. They’re especially timely questions to ask in 2021. They tie right into the theme for this year’s convention.

 

So much has happened since we were last together in the flesh, and frankly, much of it can seem dispiriting. The pandemic has upended our lives in so many ways. Ten of thousands of families have lost loved ones.  So many small businesses have shuttered, and those still open struggle to find workers. I talk to my dad about it often, who’s still a small business owner.

 

Less visible, but no less damaging, have been the invisible scars that the pandemic has inflicted upon so many people. Indeed, it is these costs which very well may be the most lasting and the most drastic. Think of the students who have missed half of their college experience or two-thirds of their law school time because of the pandemic. As many schools moved to online education, we unsurprisingly found that this amplified achievement gaps. For millions of American students, the last two years were one large write off. Many of them will have fallen so far behind that it will be daunting for them to catch up.

 

Young adults haven’t had it easy, either. So many young Americans have deferred marriage or having children in this time of uncertainty. According to the data from the CDC, births in January of 2021 dropped almost 10 percent from the previous January, the largest drop in decades. These consequences could reverberate for decades.

 

The pandemic has also put more strain on our shared national fabric. In so many cities across America, crime, homelessness, and drug addiction rates are skyrocketing. In 2020, the United States saw an almost 30 percent rise in the murder rate, the highest year-to-year increase since the FBI began keeping statistics. In too many communities across this country, opioids continue to exact a devastating toll. Ninety-three thousand Americans died of drug overdoses in 2020, nearly 30 percent more than in the previous year. For these reasons and many others, many Americans are now despondent about our future.

 

According to one poll, 71 percent of Americans said they’re pessimistic about the country’s direction. Think about that. Those are sobering numbers. In a country known for its perennial optimism, close to three-quarters of us now think our children will inherit a country worse off than we did. In large chunks of the country, such as rural America and the Rust Belt, which I love dearly, life expectancy has actually been going down. The Princeton economists Anne Case and Angus Deaton have attributed this to a historically unprecedented trend and what they label deaths of despair: drug abuse, alcoholism, and suicide.

 

In prior times of crisis, we could at least be confident that whatever we faced, we faced it together as Americans. From our world wars and the Great Depression to the Cold War and 9/11, we bonded as Americans when we were worst hit. Leading businessmen, politicians, and other community leaders would work hand in hand.

Now, however, social division and polarization seem at all-time highs, and the pandemic has coincided with an uptick in intolerance. Popularly dubbed the cancel culture, its simple name should not obscure its force. What began on a college courtyard has moved into the newsroom and the corporate boardroom with alarming speed. From Hollywood to professional sports and everything in between, it now seems you can lose your job and be shunned if you voice the slightest disagreement with today’s fashionable views. Unsurprisingly, social distrust in our public and private institutions is at all time high. We have, in short, been far too focused on the pluribus and not enough on the unum.

 

What can be done? Where should we look? At times like this, when every day’s newspaper carries another round of bleak headlines, it’s easy to resign ourselves to fatalism. I certainly feel that temptation. But when I come here to the National Lawyers Convention and I think about what the next few days will bring, I cannot help but feel rejuvenated and optimistic.

 

After everything I just said, you must be wondering why. It’s because The Federalist Society represents, in its small way, the genius of America. Of course no institution will single-handedly save America, not even The Federalist Society. I am not naïve about the limits of law and judging. As our founders understood, a society is only as good as its people, and our system was designed, as John Adams put it, “for a virtuous and religious people.” Still, a good legal culture can sustain and safeguard it. That requires judges who don’t make things up, judges who begin with the text rather than their preferred policy outcomes, and it’s important that judges respect the Constitution as ratified.

 

On these fronts, The Federalist Society has done extraordinary and important work. Long may it continue. Yet, The Federalist Society is an antidote for our problems today in a different sense, and that’s because of what this organization represents. On one level, yes, it’s a group of lawyers who like to nerd out about whether we should incorporate the Bill of Rights through the Due Process Clause or the Privileges or Immunities Clause. But on another level, FedSoc represents a uniquely successful, yet also entirely representative example of how grassroots civil society can solve important public policy problems.

 

What do I mean by civil society? It’s hard to give it a definition, so I looked to Alexis de Tocqueville, one of the great analysists of American life to shed some light. In his magisterial Democracy in America, Tocqueville observed that in Europe the first person you turn to when you see a problem, for example, is the government in France or a great lord in England. “But in America” he said, “we first turn to our neighbors.” Here we find a friend to raise money with for a small cause or an ally to build a church, a school, or a hospital with.

 

In other words, what stood out to this French nobleman was our small-d democratic approach to problem solving. When faced with problems, we don’t wait for an English duke or Paris bureaucrat to show up.  We the people acted, not just in how we picked the government—that too was radical—but also in what we solved without government. And Yuval Levin, one of the great successors to Tocqueville, points out that this civil society remains the backbone of our great country.

 

As you might have noted, I still have not given a definition of civil society, but we all know it when we see it. It’s the local school board that shapes our values and heritage. It’s our churches, synagogues, temples, and mosques that tend to our soul, and it’s the Salvation Army, which feeds the hungry and houses the homeless. That spirit is all around us. It’s what makes our country rich. It’s what makes our lives rich. It gives us meaning and it connects us to our neighbors. It teaches us how to practice democratic politics.

 

If we learn by doing, then mass democracy requires a civil society. The day-to-day work of identifying problems, offering diagnoses, and then treatments gives us a stake in our society, and it teaches us how to find common ground with those who may vote for a different party, worship at a different temple, or, God forbid, root for someone other than the Kentucky Wildcats, worse yet root for Duke.

 

Trust, cooperation, a willingness to hear different perspectives, and civic duty, these are the ingredients of a successful republic. Civil society has long been where Americans cultivated these traits. Edmund Burke understood this when he urged us to cherish our “little platoons,” the basic units of society. For him, it meant kin and kith, friends, the neighborhood, the town church, and the debate clubs where voters discuss public affairs. As he wrote in Reflections on the Revolution in France, “to love the little platoon we belong to in society, is the first principle, the germ, as it were, of public affection. It is the first link in the series by which we proceed towards a love to our country and to mankind.”

 

But just as importantly, we need civil society because civil society works. The economist Friedrich Hayek famously noted that central planning goes awry when planners lack information about what’s happening on the ground. Civil society doesn’t have that problem. It forms organically to tackle a local problem, and the people who invest in it have skin in the game. They have the incentives and knowledge and usually the skills to understand the problem in its full scope and then solve it. And compared to individuals, civil society’s a force multiplier. One voice can be drowned out by the status quo. A chorus in unison is a different matter.

 

Whenever someone’s skeptical about what civil society can do, I tell them about a little initiative back in Ohio and Kentucky. I learned about it when I was looking to donate my old car. Two churches, one in northern Kentucky, one in Cincinnati, formed a program known as Wheels. They would take old cars like mine that people were willing to donate.

 

When I was ready to donate it, I took it to the garage where I found a bunch of wonderful, retired mechanics from those churches. First, they prayed with me over my car. Then they promised to put it to good use. They had built a beautiful garage where they turned these old cars, sometimes lemons, into amazing used cars, and they provided those cars to people down on their luck, perhaps someone recovering from drug addiction or a single mother trying to get on her feet.

 

The most amazing part, though, was witnessing how one gesture of kindness can generate a self-sustaining cycle of positive change. These cars weren’t a one-time cash transfer. Instead, for many of these people, this program was life altering. For them, the car didn’t just represent a stranger’s act of generosity at a time when life looked bleak. It was also, I am sure, a ticket to a new life. Many of them likely used their cars to drive to a better paying job or to attend night classes to get an education.

 

Why do I know this? Because so many people would then come back to the program, not to trade up, but to donate their own cars and complete the circle of giving back. The very people who got the cars would later donate their old cars to the program.

 

Clear away the brush and the academic jargon, that’s what we mean by civil society. Here was a simple solution to a difficult problem. Retired mechanics, check. A spare garage, check. Parishioners who needed to get rid of their aging vehicles, check. And people who just needed a little help to kick start their lives again, check again.

 

No one needed to fill out reams of paperwork. The Department of Transportation didn’t need to create a new and improved Churches and Clunkers program. This was just ordinary folks helping their neighbors who were down on their luck. The most incredible part of it all? In America, the story I told you is entirely ordinary. From Ohio to Oregon, volunteer initiatives like this transform lives every day through extraordinary acts of civic duty.

 

And if you’re still not convinced, look around you. That’s right, look at The Federalist Society. This right here, this convention, shows us the power of civil society. Think back to The Federalist Society’s roots. In the late 1970s and ’80s, Yale Law School was a crazy place.

 

[Laughter]

 

Okay, like death and taxes, some things will never change. But the legal landscape was just as bleak across the nation. And so many veterans of this organization know firsthand it was the Wild West in federal courthouses. Though the Warren Court had technically passed, its mode of jurisprudence was very much still alive. The judiciary would routinely find implied causes of action or make rights up out of whole cloth.

 

Consider the field of statutory interpretation for a minute. When The Federalist Society began, people would give you vacant stares if you told them you were an originalist or textualist. Justice Scalia fondly tells a story of him saying it and everyone running from the room.

 

My clerks and the younger students in this crowd may not believe it, but it’s true. There was a time, not so long ago, when people would look at you funny if you thought judges were bound by the text of the law. If you cited a dictionary in statutory interpretation class, your classmates would look at you with disbelief and perhaps some concern.

 

In those days statutory interpretation was all about legislative intent. If you don’t believe me, look at Train v. Colorado Public Interest Research Group. There, the Supreme Court noted that it did not even need to consult the plain meaning of the text and used scare quotes around plain meaning because the legislative history was clear enough and answered the question. The decision was 8-0. It’s safe to say things have now changed. As one justice put it, “We are all now originalists and textualists.”

 

So what prompted this sea change? Well, of course, in part it was the greatness of Justices Scalia and Thomas, but it was also in no small part because of the efforts of a handful of students in the early 1980s. When the first convention took place in 1982, almost 40 years ago, it gathered students from just a handful of schools.

 

At the time, The Federalist Society’s founding fathers did not know that they were starting a national movement. Instead, for them, the convention was simply their way of tackling a problem that they saw in their communities, an overwhelming, intellectual homogeneity on their campuses. They didn’t seek to solve the problems by looking to the government to pass a law. No one sought for the state to impose an intellectual diversity quota on their schools. Instead, they focused on what civil society does best, creating homegrown solutions to local problems.

 

In this case, that meant the cut and thrust of intellectual debate. Don’t take my word for it. As Steven Calabresi put it at the time, “FedSoc’s original objective was to have some good debates and to force faculty members to confront the ideas by inviting speakers to Yale who brought different views.” Imagine that.

 

In an event celebrating The Federalist Society’s 25th anniversary, Justice Scalia spoke in characteristically memorable terms. “We thought we were just planting a wildflower among the weeds of academic liberalism. It turned out to be an oak.” As the next few days will show us, the spirit of robust debate and intellectual vigor remains the beating heart of The Federalist Society’s mission.

 

Now, admittedly, the Mayflower Hotel is not quite what you might think of when someone mentions civil society, but all of us know that The Federalist Society is so much more than this convention. The organizers of the convention will be the first to tell you this. Don’t get me wrong. I’m as excited for the Scalia dinner tonight as everyone else, but the real success of The Federalist Society can’t be measured solely by the number of judges or justices who are members. It can’t be measured by the number of well-heeled lawyers in this room or in some of D.C.’s leading firms. It can’t even be measured by the public-interest lawyering that furthers the goals many of us share.

 

All of this is important and good, and we are grateful to each of you, but the real work of The Federalist Society happens out there. It’s where lawyers take time from their busy lives to meet in northern Kentucky or Miami to discuss the ideas about the rule of law, how to interpret statutes, and yes, what the appropriate division of power between private and public actors should look like.

 

It’s the local chapter that puts on events challenging the prevailing orthodoxy of a law school or a legal profession that is still to homogenous and still too sheltered. It’s the minds that have been changed one way or another and the friendships that have been deepened through this relentless pursuit for truth.

 

You can draw a direct line between their daily efforts and the annual convention we host this week. That’s why when you meet another Federalist Society member, you know what you’re getting. You know you’re meeting an intellectual brother or sister who has been sharpened through the same formative training. You know you are meeting someone who takes ideas seriously, who wants to get the law right, and who knows the judge’s place is not as a legislator. And you know you’re meeting someone who had courage, real courage, to stand apart from the crowd at law school.

 

This week’s conference exemplifies all of this. We begin by interrogating the scope of corporate power and what role corporations do and should play in our democratic process. We end by asking how public policy should incorporate scientific research, when, as the Noble prize-winning physicist Richard Feynman remarked, “Science begins with a distrust of experts.” Luckily for you and me, I’m not an expert on anything. That’s why Dean had me do this versus putting me on one of the panels.

 

But I marvel at the breadth of perspectives we’ll see across the four days. From antitrust to religious liberty law, The Federalist Society has marshalled experts and amateurs, liberals and conservatives, government officials and regulators, to bring us an intellectual feast, just like it always does every day across our country.

 

And the nation’s better off for it. The legal culture is certainly better off for The Federalist Society’s efforts. Now, there’s still much work to be done. Don’t get me wrong. If you don’t believe me, just read my dissents.

 

[Applause]

 

Thank you. But the legal culture has certainly changed in seismic ways thanks to the dedication of many of the people found in the local chapters.

 

So if there’s one thing you should take away from this conference—well, maybe two—first, enjoy each other’s company. Face-to-face conversation is how we make republican government work. It’s how we solve problems and find the common good. No idea is a sacred cow. Nothing should be off limits. True civility is not mere kindness, though that’s important. It’s when interlocutors who are deeply divided on something still respect one another by pressing their best arguments.

 

And second, we should take The Federalist Society as an inspiration. At a time when there is still much to be pessimistic about, The Federalist Society reminds us what is great about America. As Tocqueville put it, “Above all, not what public administration executes, but what is executed without it and outside of it.”

 

So I urge you to ask three questions when thinking about public power and private rights in the coming days. One, what problems do you see in your community? Two, how can you solve it? And three, who do you need to help you solve it? In some cases, that does require government. I’m not naïve. As I mentioned before, we really need our armed forces to win wars. In fact, we won two world wars with them. And the federal government has played a critical role in setting up highways that connect our great country.

 

But I submit that many problems, more than you might think, are solved through what we Catholics called subsidiarity, a fancy word for the idea that problems should be solved by local groups and associations that are best equipped to tackle them. This is not a new idea, of course, but it is one that should guide us and inspire us.

 

In bleak times like now, we should remember Ronald Reagan’s statement, “Freedom is never more than one generation away.” That’s right, and it’s worth noting that Reagan knew to deliver this line at the annual convention of the Kiwanis International, one of the great pillars of American civil society.

 

And at this convention, when I think what The Federalist Society has achieved over the past four decades and what American civil society has solved since before Tocqueville even arrived on our beautiful shores, I cannot help but think of another quote by the great President Reagan. “There is nothing wrong about America that cannot be solved by what is right about America.” I hope this convention inspires us to prove him right once more.

 

May God continue to bless you all, and may God continue to bless the greatest country in the world, the United States of America. Thank you.

9:45 a.m. - 11:30 a.m.
Showcase Panel I: Social Activism and Corporate Leadership

2021 National Lawyers Convention

Topics: Corporations, Securities & Antitrust • Culture • Politics
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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What role should publicly traded corporations play in democratic politics?

The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?" The first showcase panel discussed "Social Activism and Corporate Leadership."

Corporate resources are increasingly being used to advance social justice policy goals.  This corporate engagement includes advocacy for what’s presented as the “corporate perspective” on divisive social questions. It also includes the use of economic leverage to influence public opinion, affect government policy, and induce private agreements to policy choices that have not been adopted through the political process.

To some, this is a positive development: it is all to the good for corporations to advance a just cause. Their public leadership and their market power can help bring the country and the world along. To others, this is an abuse and confusion of power. The goals of the “social justice” and “woke” movements are among the most hotly contested questions of American politics and culture, and they should be resolved through democratic processes without corporations putting a thumb on the scale.

We will explore these questions both as matters of principle and matters of law.

As a matter of principle, should corporations have unfettered discretion to influence any sphere of American life? Is such discretion good for the democratic process, and is it good for individual liberty? Is the libertarian perspective -- that private actors should be largely able to do what they want, and if they overstep, market competition will fill the gap – adequate to this dynamic? Is there any limiting principle to corporations using economic power to influence politics?  

As a matter of law, are corporations permitted to use whatever levers are available to them to influence matters of politics? Is corporate leadership permitted to do so in publicly traded companies? Should corporate endorsement or support of a policy position or candidate be considered a reportable lobbying expense or campaign contribution and, if so, how should it be valued? What existing legal frameworks might apply to these questions? How does Citizens United fit into this picture?

Featuring:

  • Prof. Margaret Blair, Professor of Law Emerita & Milton R. Underwood Chair in Free Enterprise Emerita, Vanderbilt University Law School; Senior Fellow, Brookings Institution
  • Prof. Jonathan Macey, Sam Harris Professor of Corporate Law, Corporate Finance, and Securities Law, Yale Law School
  • Prof. Julia Mahoney, John S. Battle Professor of Law, University of Virginia School of Law
  • Prof. Luigi Zingales, Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance and George G. Rinder Faculty Fellow, University of Chicago Booth School of Business
  • Moderator: Hon. Jeffrey S. Sutton, Chief Judge, U.S. Court of Appeals, Sixth Circuit

Speakers

Event Transcript

Hon. Jeffrey Sutton:  My name is Jeff Sutton. I’m a judge on the Sixth Circuit, and I’m really honored to start our first showcase panel. It’s labeled “Social Activism and Corporate Leadership.”

 

      I’ll take us back about 107 years to 1914. Louis Brandeis wrote a book called Other People’s Money and How the Bankers Use It. This book became the blueprint for the future Wilson administration’s antitrust regulatory efforts, probably earned Brandeis a seat on the U.S. Supreme Court. And if there’d been a Federalist Society in 1914, we would have had a showcase panel on the book, I can almost assure you. I suspect Brandeis would have shown up. There would have been a few people disagreeing with him, but we would have allowed a fair debate. Borrowing from Brandeis, today’s panel could be entitled “Other People’s Money and Power and How Corporations Use It.”

 

      This being D.C., there’s an acronym for everything. One you’re going to hear today is ESG investing in corporate leadership. The E is for environmental. The S is for social. The G is for governance. And the question is whether ESG investing in corporate leadership is a sound development. On the one hand, one could argue that it helps to leverage power and money to valuable ends. Nothing wrong with corporations having values; see Hobby Lobby. On the other hand, you might wonder if ESG investing is a creative takeover of government functions. So the stakes are quite high, and it’s remarkable that we continue to debate how exactly corporations ought to work and be governed in this country.

 

      I feel really fortunate to have a front row seat to our debate and presentations. We’ve got four terrific speakers. In conventional format, they’ll each speak for roughly 12 minutes or so. We’ll have a little discussion among ourselves, and then we’ll open it to the audience.

 

      In the order in which they’re going to speak, we have Margaret Blair from Vanderbilt’s Law School who once was with the Brookings Institution. Following her will be Jonathan Macey from Yale Law School, author of Macey on Corporation Laws. Then we’ll have Luigi Zingales from the Booth School of Business at Chicago; by the way, the producer of a podcast called Capitalisn’t, which is really terrific, has an episode on this exact topic. And last but hardly least will be Julia Mahoney from the University of Virginia Law School who has a piece co-authored by her husband in Columbia Business Law Review actually on this exact topic.

 

      Margaret, if you could get us started, that would be terrific.

 

Prof. Margaret Blair:  Good morning and thank you for that introduction. And thank you to The Federalist Society for having me here today to talk about this.

 

      I haven’t followed The Federalist Society very closely, but it may be a bit unusual to start with a discussion of corporations instead of with various aspects of government. But corporations have become and have been in some ways for a long time incredibly important institutions in our society. They’re part of civil society, but they are bigger and more powerful than governments with respect to many kinds of activities, and so they’re really an important part of the landscape of what you need to be thinking about when you’re thinking about government and civil society.

 

      I’m going to begin today by building on some ideas that our colleague on the panel here, Professor Macey, has written about and developed. And that is that there are a number of myths that have emerged and become important and become dominant stories in corporate law. Professor Macey identifies four such myths in his recent paper that he’s written on this subject. And I’m only going to talk about two of them which I think are most relevant to the topic for today.

 

      The first is that corporations are owned by their shareholders. This myth is derived from the belief that the shares of stock in a corporation represent “ownership” interests, and I put ownership in quotes. So this is Professor Macey’s argument. I agree with him, but I think for different reasons, and I’ll say some more about that.

 

      The second myth is that corporate officers and directors are legally required to carry out their duties in a manner that they believe will maximize the value of the shares of the corporation. He calls this the shareholder value myth. And so he uses that phrase -- that phrase is the title of a book by a co-author of mine that I’ve written with a number of years ago who died four years ago now, 2018, so three and a half years ago, and who was a mutual friend of Jonathan Macey. He acknowledges her in his paper. Where he uses this phrase, he acknowledges the book.

 

      Professor Macey argues that these myths serve the “social function”—and I’m using air quotes here for a reason I’ll come back to—the social function of, quote, “legitimizing the current practice of giving corporations the same right as actual flesh and blood people.” Now, the reason for the air quotes is that I don’t agree that this is a social function. I think it’s more of an antisocial function. But I think he meant it more -- I think he meant the term social a little bit differently from what I mean when I talk about it being an antisocial function.

 

      I want to make the point here today that these myths also serve another function, which is to try to legitimize actions and choices of corporate executives that cause their corporations to externalize as much as possible the of costs associated with their businesses and their business activity while trying to capture as much as possible of the benefits. For these reasons, I do not believe these myths are benign, nor are the function that they serve properly thought of as a social function in the sense of a socially beneficial function. Instead, they represent a major problem with capitalism in its current manifestation.

 

      A corporation is a legal structure. It was organized to facilitate the organization and deploying of property, contracts, and certain social arrangements in order to carry out a business activity. If the business activity is a needed business activity, we sometimes encourage corporations to do that, as we did early in the life of this country when we encouraged private individuals to build bridges.

 

      And our previous guest speaker this morning talked about how one of the important functions of government is to create roads and bridges. Well, actually, that was done privately. It was done by private sector organizations, but they were given special tools to use to do that in the form of making corporate law available to them. Actually, there was no separate law called corporate law. They were issued specific charters in order to be able to build a bridge or a road or whatever that was needed by society.

 

      It’s a legal structure. It’s not a person. It’s a rights-bearing institution in the sense that it was created to make possible a separate entity that could own the property, enter into contracts, and that that entity would be distinct from the individual persons behind the corporation, in the same way that a trust is a legal entity separate from the grantor, the beneficiary, or the trustee and can exist in perpetuity, or a corporation can exist in perpetuity.

 

      It is certainly not a person and should not be granted constitutional rights in its own name or any rights beyond those necessary to carry out these functions. Recent Supreme Court decisions that seemingly grant or protect a constitutional right in the name of a corporation are troubling to me because I think it’s important that the Court actually did not rely on the argument that corporations are persons.

 

      That’s not what the Court said in either Citizens United or Hobby Lobby. Instead, the Court made an argument that corporations are associations of persons and that it was necessary in their view that the corporation have the right in order to protect the rights of the persons behind the corporation.

 

      This is a derivative argument. It’s not a direct argument, as Professor Elizabeth Pollman and I have argued in some works that we have done. I think it’s a problematic way to protect the rights of the actual flesh and blood persons behind corporations, but at least we should recognize this is what the Supreme Court did in those decisions. It didn’t ever argue that corporations are persons, therefore, they get rights.

 

      Are corporations themselves the property of their shareholders? I agree with Professor Macey that no, they are not. Corporations are devices for holding property but are not themselves property. Shareholders are one class of investor in the business. They have certain rights and obligations. Some are delineated in their issuing documents. Some are default rules that are in the statutes. These provisions make it clear that the corporation is different from the individuals who own its shares.

 

      One of the most important factors that makes it clear that shareholders are not owners it that they have limited liability, meaning that shareholders cannot be held personally liable for debts incurred by the corporation, whether those debts were incurred contractually or as a result of a tort claim, or settlement of some sort, or some sort of regulatory action by the government.

 

      The effect of limited liability for shareholders, especially when combined with a share value maximization norm, is that corporations often pursue a goal of maximizing value for shareholders and will do so by pursuing risky activities that have very high upside potential for the shareholders without taking into full account the downside risks which often get imposed on other parties. Such activities are especially attractive from a shareholder perspective if they can externalize downside costs to parties outside the corporation. So this is clearly a situation in which maximizing value for shareholders is not the same as maximizing the total social value being created by the corporation.

 

      In recent years, we’ve seen automobile companies pawn off their underfunded pension funds in a federal bailout. Pensioner claims were slashed as part of that. We’ve seen federal government bail out financial firms when the bets that they made on credit default slots failed. We routinely see natural resource extraction companies dump their waste into local rivers. That’s done less in the United States now, but it’s done a lot in developing countries. Huge oil companies cut their maintenance costs on their offshore oil drilling platforms, and the result is massive oil spills.

 

      And just a few weeks ago—actually, there was news about this this morning, so I’m not certain I’m 100 percent up to date here—Johnson & Johnson announced that it had formed a subsidiary that would take all of the talcum powder business along with all of its potential liabilities, which we now know are going to be fairly substantial. And these are liabilities associated with the argument that the talcum powder caused harm because it had traces of asbestos in it. Of course, Johnson & Johnson would underfund this subsidiary, and then immediately cause it to file for bankruptcy protection. This is called a, I think, Texas two-step maneuver, which is it protects the parent corporation because they’ve claimed that all the liabilities are associated with, guess what, an underfunded subsidiary.

 

      Corporations have perhaps always pushed the boundaries of socially accepted behavior, but just 40 years ago, that same company, Johnson & Johnson, became an important example for businesses school professors when it spent more than $100 million to withdraw its highly successful new product, Tylenol, from the market after 7 people in the Chicago area died from taking tainted Tylenol capsules. And the company continued to invest huge amounts of money, at least by the standards of 40 years ago, in tamper-proof packaging. This was considered a model behavior by the corporation.

 

      Today, their answer is just put the Tylenol into a subsidiary, and then cause the subsidiary to declare bankruptcy, and then protect the shareholders of any of the bad effects of this problem.

 

      Over the 40 years since the Tylenol incident, corporations and corporate managers have been told repeatedly and by authoritative sources like business school professors and law professors, including, probably, all four of us up on this panel, that their responsibility is to maximize share value, moreover, that they should do whatever they can get away with as long as they can get away with it to get cash out to their shareholders by dividends, buyouts, and stock buybacks, thereby imposing huge risks that are predictably associated with their businesses on the other stakeholders when, surprise, the corporation does not have enough assets to make good on all of its liabilities.

 

      So I agree completely with John Macey’s assertion that it is a myth that the law requires shareholders to do this, but I do not agree with him that this is a benign myth and that it serves a socially beneficial corporation. As I said initially, corporations are not people. They are legal instruments created by or authorized by government. They’re supposed to have special powers. They do have special powers.

 

      So as a political question, since corporations are created by government, it is appropriate to ask whether we should allow corporations to accumulate vast sums, vast resources way beyond any other kind of institution we’ve ever seen in our society, and yet, not demand certain standards of behavior in exchange for the privilege of being able to do so.

 

      I’ll stop there. Thank you.

 

Hon. Jeffrey Sutton:  All right, Professor Macey?

 

Prof. Jonathan Macey:  Coming down from New Haven, you have no idea how wonderful it is to breathe the air of freedom at a Federalist Society meeting. Thank you for having me.

 

      I do want to say that out of chaos sometimes comes order. The Federalist Society, after all, was founded at Yale Law School, so if you push lovers of liberty too far, I suppose they will organize into an effective political coalition and create a framework for coming together in civil society, as we were told this morning.

 

      It’s great to be here on this panel. I want to talk a little bit about the role of corporations and society, and to try and place the whole wokeness debate inside of some kind of hopefully rational framework. It’s an extremely interesting and difficult topic. The basic idea is that, like so much of the rest of America, corporations have become woke. The idea is that CEOs and corporate directors are extremely afraid of being criticized and have taken up very left mantles of social activism. And I just want to talk a little bit about where that comes from and how someone like me, who takes a decidedly libertarian bent to social issues, should respond to this. And as I say, it is complicated.

 

      The first thing that I want to talk about a little bit in response to the previous comments is to state what I think are some just ineluctable facts about the corporation, not just in the United States but abroad as well. First of all, as a matter of being a social invention, which they are, corporations are the most powerful engine for economic growth and development in the history of mankind. We would not have had the industrial revolution. We would not have anything remotely approaching the levels of societal wealth that we observe and enjoy in developed countries without this social construct called the corporation.

 

      What is the genius of the American corporation? It’s pretty simple. It’s the only legal vehicle, the only mechanism that allows for the accumulation of the massive amounts of capital needed for an industrial enterprise without that source of capital being the government. So the corporation, in a sense, is the only thing really standing between us and socialism.

 

      In addition, as something of kind of icing on the cake with respect to the corporation is the idea that corporations can fund themselves by taking small amounts of capital from millions and millions of people and their pension funds, their 401K funds, etc., etc. And these shareholders, while I’ve argued, as Margaret Blair mentions, that these people are not the owners of the corporation in any way that we think about from a sort of property law perspective, the fact of the matter is that these people profit, we, the investors, profit when the corporations flourish. And in that sense, we have that attribute of ownership, of being what economists would call the residual claimants on the cash flows of the enterprise.

 

      So the question is really, in a way, what is the role of the corporation in society? What are corporations supposed to do? And the default rule, the basic paradigm, although this can be altered, as it should be, by contract, is that corporations maximize profits within the confines or within the constraints established by law. That is what corporations do, and that is why they are created, and that is why people invest in corporations.

 

      Now, in addition, or as a second point in terms of what corporations are supposed to do, is to maximize profits within the confines of the law. Corporations are plagued by what are known as agency costs. That is, we have hundreds and thousands and often millions and millions of shareholders, and these shareholders are unable to coalesce into an effective coalition to monitor what their directors and officers are doing or to exercise any meaningful control. So we rely on market forces to do that.

 

      So while it is true that corporate officers and directors have massive amounts of discretion, and they’re not required to maximize profits in any operational sense, I want to talk about a few characteristics of the corporation that cause corporations to be decidedly profit maximization in their orientation. These are market forces, by and large, not legal forces. And they’re contractual forces.

 

      First and foremost is the idea that when we’re thinking about the woke corporation, when we’re thinking about the idea that corporations should not, as the Business Roundtable, a group of CEOs in the U.S. have said, when people talk about the idea that the corporations should not maximize profits for shareholders but rather should try to advance broad societal ends, we need to keep three institutional facts, I think, three or four institutional facts at the foremost of our minds.

 

      The first is that shareholders and only shareholders elect directors. So to the extent that people are talking about reframing the basic role of the corporation in society, that’s an ineluctable reality that people have to contend with.

 

      A second ineluctable reality is that compensation packages, the way in which officers and directors are compensated, is overwhelmingly oriented as an empirical matter toward stock price performance and profits. So that is the way that the compensation scheme, that’s where officers’ and directors’ bread is buttered, if you will.

 

      In addition, there’s a hierarchical and Darwinian process for getting into the C suite, for becoming the CEO of a company. And corporate culture overwhelmingly advances people who are competent at their jobs where competence is defined as being able to maximize profits by producing the best quality products at the lowest possible price.

 

      And finally, there’s the market for corporate control. The idea that there are activist investors, there are hedge fund investors who are overwhelmingly profit maximizers so that when you have corporations, and there’s a ton of evidence for this, who veer too far from the profit maximization paradigm, as Danone Yogurt did several years ago, active investors buy shares, replace management with people who are going to work to maximize value in the corporation.

 

      So I wanted to start with that by way of background and then quickly pivot to talking with you and thinking with you a little bit about this phenomenon that Judge Sutton mentioned in his introduction about ESG investing. What is ESG investing all about, this idea of investing for environmental and social and governmental issues, and how should we think about this?

 

      Well, the first thing I want to say is my bottom line on this is that this is much sound and fury signifying nothing. But having said that, I think it’s very important to pay assiduous attention to the amount of sound and fury that there really is. In this year alone, if we count up the amount of investment in woke, ESG oriented investment, it comes up to $17.1 trillion. That is a significant increase over just 2020 when there were $12 trillion.

 

      Now, these people may not -- and as I’ll argue in just a minute, these people may not know what they’re getting when they make these ESG investments. But we have to recognize, or I have to recognize, anyway, as a libertarian, these are people allocating their own capital in ways that they think will make them feel better or make the world better.

 

      I want to specifically talk about what is it that people who are engaged in ESG investing think that they’re accomplishing? And I don’t want to be too cynical about this, but I think people are -- and I’m not going to be too cynical, just cynical enough, I suppose, but people think, well, we have these massive problems in this country with environmental issues, global warming and the like, that many believe pose an existential threat to the survival of the planet. And we also have the idea of a perception of, as Professor Thomas Piketty and others have observed, increasing gaps in wealth and income distribution.

 

      And if one thinks about it for a second, what ESG investing does is to take the two problems that from a political theory standpoint are problems for which government intervention is required, where there are massive free rider and collective action problems associated with these kinds of investments, and they’re saying, well -- and this is why, as a libertarian, I have a fond place in my heart for ESG investing. It is a massive libertarian turn where people are essentially saying we can’t imagine any longer realistically that government can solve the problems of society, and so we’re turning to a much more reliable and efficacious source for solving these problems, which is the modern American public corporation.

 

      I want to mention that from an interest group perspective, there are a few issues that coalesce very, very nicely here. First of all, ESG investing is coming up as a counter that incumbent management has to activist shareholding in investments. CEOs can say, and they do on a daily basis, “Well, my share price performance was very good. I didn’t do a great job of generating profits for the shareholders in the last quarter, but I’m woke. I’m doing a good job in terms of ESG investing, and, therefore, you should not throw me out on the street, Mr. Activist Investor.”

 

      But the fact of the matter is, there’s no -- while it’s extremely easy to quantify corporate share price performance and to look at accounting results and see how well a company is doing in profits, there is no way to tell how a company is doing from an ESG perspective.

 

      Studies have shown that if you look at the major institutions that rate ESG investing, there’s no correlation. You look at the Carbon Disclosure Project, the Sustainability Accounting Standards Board, Climate Disclosure Standards Board, several at ISS, there’s several of these large institutions that purport to rate ESG performance, but there’s tremendous heterogeneity.

 

      You don’t have tremendous heterogeneity when you look at standard reports or Moody’s or other credit rating agencies looking at creditworthiness, but everybody can pick some vector on which they are successful. They may not be successful in doing good things for the environment, but maybe they are good in pay parity, or maybe they have the chairman’s office split from that of the CEO, so they do well in terms of the G, the governance aspect in corporate governance. So we have a tremendous amount of cheap talk associated with ESG investors.

 

      And we have a very discreet, finite group of people who benefit from ESG investing. Modern financial economists, Luigi’s colleagues at the University of Chicago primarily among them, have done tremendous work in corporate finance on portfolio theory and the efficient capital of markets hypothesis. And boiling down a ton of great work and several Nobel prizes into a single takeaway is the idea that for the average investor who does not have superior information to that which is in the market, the best form of investment is an index fund.

 

      Index fund investing, though, is no fun for Wall Street because the fees generated by ESG -- sorry, by index fund investing are extremely low, rapidly approaching zero. But by raising up ESG investing as a high order of priority, we can move investors from unprofitable investments in Wall Street to extremely high cost, high fee investing. So this entire ESG movement, I think, fits very well into a public choice model. It fits very well in terms of the private interest of Wall Street, and the private interest of incumbent management. And so I’m very cynical about it.

 

      But on the other hand, and I’ll end with this, we have to remember that these are people who are spending their own money, and the facts on the ground leave me confident that profit maximization will remain the paradigm as long as directors are elected by shareholders, we have a vibrant market for corporate control, and a compensation of managers as oriented towards stock price performance and profits. Thank you so much.

 

Prof. Luigi Zingales:  First of all, thank you very much for this great opportunity. I think that we live very much in an upside down world where liberal icons like former U.S. Attorney for the Southern District of New York, Preet Bharara, wishes that a billionaire would buy out Twitter to shut up Trump before he was shut up by Jack Dorsey himself.

 

      Well, fervent opponents of Citizens United actually cheer at corporations that blackmail states over their electoral laws. While it takes a conservative like Senator Josh Hawley paraphrasing Theodore Roosevelt to say, “I am for business, but I am for democracy first.” And I am for business as an adjunct to democracy. Who would expect a Democrat to say that? But in fact, Democrats seem to prefer business to democracy.

 

      This is the reasons why it’s important in my view to go back in this debate to first principle. One of the advantages of economics -- it has a lot of disadvantages, but one of the advantages is that we have a strong theoretical framework that can help us answer this question not based on whether we like a particular outcome but whether an outcome is good for society overall and whether, and this is what I want to emphasize today in particular, it preserves our freedom.

 

      So on this issue of social activism, I want to start distinguishing, and this is the most important distinction, whether we are talking about a competitive industry or a noncompetitive one. So in a competitive industry, firms are price and rule takers. In a competitive industry, firms should have the right to choose the level of wokeness their customers, their employees, and their investors want.

 

      A Jewish publisher might not want to publish Nazi sympathizing books. A black owned movie theater might not want to show Gone with the Wind. A Hindu owned restaurant may not want to serve beef. If these decisions are value maximizing because made in response of customers’ or workers’ demand for certain products, they can be made by managers who are incentivized to maximize value.

 

      If consumers are willing to pay a sufficiently large premium for sustainable tuna fish, some companies will find it profitable to sell tuna fish in a sustainable way. If workers are willing to work at lower wages for environmentally friendly companies, many companies will find it profitable to become environmentally friendly. So when consumers or workers demand something, I think management can supply it in a perfectly competitive and profit maximizing way.

 

      Now, what happens if these decisions are not value maximizing? I’m not saying that they shouldn’t be made, but they should be made by who pays for these costs, which are the shareholders. So assume that a small pharmaceutical firm has discovered a formula for a very effective day after pill. If the vast majority of its shareholders are devout Catholics and passionate pro-life advocates, they can choose not to pursue the commercialization of this drug, even if it maximizes profits.

 

      Now, the decision should not be made by a manager. It should be made by the shareholders. Why? Because managers are chosen on the basis of their business acumen, not of their moral values. And so eventually, the moral value decisions should be made by who pays the ultimate costs, which are the shareholders.

 

      The beauty of this competitive world is twofold. First of all, each stakeholder pays a cost for choice, which is related to the cost of offering this choice. Thus, the consumer pays a higher price for the tuna, the worker receives a lower wage for the pleasure to work in an environmentally friendly company, and shareholders give some of the profits’ opportunity away to follow their conscience.

 

      The second and even more important benefit is that the competitive nature of the market ensures the freedom of choice for the people who have different belief systems. If now people love to eat beef, some restaurant will specialize in serving beef. If abortion is legal, other firms will produce the day after pill.

 

      Now, the situation is very different when firms have market power. If I am the only restaurant in town and I don’t serve beef, no customers can eat beef. Furthermore, the nearby farmer cannot afford to raise cows because there’s not enough demand for that. And so even the people who want to eat beef at home might not be able to have the beef because the beef is not supplied.

 

      Furthermore, in a monopoly situation, the patrons expressing a preference do not necessarily have to pay for the cost of their choices. If the majority of consumers is environmentally friendly, they can force the monopoly tuna supplier to offer sustainable tuna without having to pay for the additional cost since the monopolist can pay for this cost with the monopoly profits.

 

      When any product or service is offered at a zero price, it will be overconsumed. So the first consequence is, in a monopolist world, work is overconsumed. More importantly, it does compress the freedom of the rest of the population. With the monopolies, the majority imposes its will on the minority, compressing its freedom. This is one of the many reasons why monopolies are bad.

 

      And by the way, for the future panel, this has nothing to do with the important point of the consumer welfare standard. Monopolies are bad beyond the consumer welfare standard. So far, I’ve just assumed that firms or monopolies, or more generally, their market power, in knowing why they have it.

 

      More often than not, the existence of a monopoly is the direct consequence of an action or lack thereof by the government. The NFL is a legally sanctioned cartel. Facebook is a monopoly generated by the lack of regulation to force interoperability among social networks. After all, we would have a monopoly in phones if there wasn’t interoperability in our cell phones. And we don’t have that interoperability.

 

      So the problem is that the first concern of every monopoly is to preserve itself. The most effective way to preserve itself is to cozy up to a political power and offer a Faustian pact. I, monopolies, give you, party in power, what you want and cannot legally obtain in Congress. And you, party in power, guarantee me that my monopoly power remains intact for the years to come.

 

      So think about the following Faustian pact. I, Facebook, give you, Democratic party, the right to censor free speech that you cannot obtain in Congress. And you, Democratic party, ensure that I, Facebook, can maintain my monopoly for the foreseeable future. This formal quid pro quo is the most pernicious form of corruption because it ends up hurting the majority of the citizens for the benefit of a few. Even when the quid pro quo is not so explicit, monopoly firms like to ingratiate the political power by performing actions that are liked by the party in power.

 

      So you remember that Carrier air conditioner slowed down the move of jobs to Mexico just to please the then President Trump. Again, this is a dangerous form of profitable social activism. In these cases, attacking the social activists rather than the monopoly is not only misguided but also counterproductive. It does exactly what the social activist CEOs want you to do, talk about activists rather than monopoly.

 

      I will not fall in this trap, so I will end my speech by talking not about activism but talking about monopolies and how to fight them. By far, the most powerful and dangerous are digital monopolies in particular because they can span the world of the media. I don’t have the time to describe how all the monopolies can be fought, but let me give you some indication how the monopoly by Facebook can be fought.

 

      In many countries, the electric power grid, a natural monopoly, is separated from electricity production. In the same way, we should separate social media networking infrastructure from the editorial role. Today, the two things are done in the same company, but they can easily be separated.

 

      Now, notice that the natural externality, the know competitive part that creates a natural monopoly is the grid component, while the editorial function would benefit from competition. And so if we can separate the two, we can have a regulated public monopoly that does simply the posting, and then you can have on the most important part, that is how you edit the content, you can have free competition there. Now, of course, you need to break up the two things because otherwise, the one part will subsidize the other, killing the possibility for competition.

 

      Now, if you are concerned about somebody talking about breaking up a big business, I want to end with a statement written by George Stigler, Nobel Prize winner for the University of Chicago, that in 1952, said, “The obvious and economical solution is to break up the giant companies. This, I would emphasize,” this is Stigler talking, “is the minimum program and is essentially a conservative program.” And people say, “What is conservative about that?” It is because he guarantees no continuous interference in the private operation of business that is required or desired. Thank you.

 

Prof. Julia Mahoney:  Thank you, and thanks very much to The Federalist Society. It is wonderful to be here in person.

 

      Now, concerns about private power and its potentially malign effects on a good government and civil society are not new. The founders of the United States of America were highly alert to, one might even say obsessed with, the possibility of corruption and what they saw as its profound dangers.

 

      In the run up to the American Revolution, colonists had repeatedly accused King George and his ministers of usurping power by bestowing special economic privileges on actual and potential political supporters. Claims that this conduct threatened the colonists’ liberties found a wide and receptive audience, due in no small measure to the low cost of printing press technologies, and helped convince Americans they needed to break away from the British Empire to form a new nation.

 

      Once independent, as economic historian John Joseph Wallis observes, Americans worried constantly about their governments and how to design their political institutions to limit the capacity of politicians to deliberately create rents by limiting entry into valuable economic activities through grants of monopoly, restrictive corporate charters—we’ve heard already quite a bit about monopoly from Professor Zingales and about restrictive corporate charters from Professor Blair—and, of course, government regulations that favored the powerful and well connected.

 

      The influence of these principles is discernable in our Constitution. As Renée Lerner writes in her article “Enlightenment Economics and the Framing of the U.S. Constitution,” it would have been very difficult to enact directly prohibitions on the sorts of practices that we today often refer to as rent seeking. And this, I think is a perennial problem for people like those of us in The Federalist Society who would like to figure out ways to constrain crony capitalism and other practices that appear to be eroding a great bit of the social fabric of the United States these days.

 

      But even though these prohibitions are hard to enact directly, nevertheless, as Professor Renée Lerner has pointed out, the framers crafted numerous parts of the Constitution to further these principles indirectly, including the Commerce Clause and procedures of bicameralism and presentment for enacting bills. Also in the Constitution, of course, are explicit commitments to protections of property rights and contract rights. These provisions are, in significant part, the result of perceived excesses of tax and debtor relief laws enacted by many state legislatures in the 1770s and early 1780s.

 

      Now, our new Constitution, as you all know, succeeded brilliantly, providing a framework for the extraordinary economic growth, technological breakthroughs, and increasing political participation that characterized the United States in the late 18th and early to mid-19th centuries. As Professor Macey was discussing, we have seen an incredible explosion of economic growth made possible in significant part by our understanding of the corporate form. General corporation laws became the norm; no more need to go to the legislature to get some kind of special charter.

 

      And those, together with well-developed doctrines of commercial law and fiduciary duty, what one can do and not do with other people’s money, made the United States a more open access society, one where most people—not everyone, we’ll get to that—but most people had -- most men, anyway, had a real shot at being able to achieve great success. And their success did not hinge on government favors or the patronage of the rich or powerful. They did not have to have a patron. They didn’t have to have British lord. They did not have to have any sort of special government benefit, no special granted government monopoly.

 

      Now, the United States, of course, was not perfect. When I say the United States became a more open access society, I mean exactly that, a more open access society. We are today a more open access society than we were back then, and it is my fervent hope that the United States will continue to become, albeit not without some fits and starts, will continue to become a more open access society.

 

      Now, for all the genius of our original constitutional design, that original design proved unequal to the task of ending slavery without bloodshed. And after the Civil War came the so-called second founding with the Civil Rights Act of 1866 and the Reconstruction amendments. At the core of the Reconstruction project was ensuring opportunities for the formerly enslaved to participate effectively in American society. And to participate effectively in American society, it was understood by all that it was essentially that the formerly enslaved have the ability to enter into contracts and to own property. And that in turn, of course, enabled them to make, save, and invest money.

 

      Now, fast-forward to the early 21st century. The United States is, in the early 21 century, a vastly richer and far more equal society than it was at the founding, than it was at the first founding and, of course, at the second founding.

 

      By any measure, our rule of law is an extraordinary success story, for trust in the rule of law, enforced by an impartial judiciary, is so strong that tens of millions of workers can entrust their retirement and other savings to financial firms, which in turn invest that money in, among other things, publicly traded companies. And these investors, these tens of millions of workers who have worked so hard and saved so much money, can turn their money over without fear that their savings will be siphoned off or squandered on ill-advised utopian schemes. At least, that is, roughly speaking, our present system.

 

      In part, that trust is due to confidence that government in the form of the judiciary is going to enforce fiduciary duties. Now, of course, I’m not suggesting that fiduciary duties are perfectly enforced. Of course not. It’s a difficult thing, but we do think that the courts are honest, and that they take fiduciary duties seriously, and that they will try to discipline bad actors when it comes to corporate managers and rogue investment counselors.

 

      And the public also has trust in the government in the form of the Securities and Exchange Commission, the Federal Reserve, and other entities who we believe have expertise and to which we have accorded power to oversee the financial industry, that these entities will serve as the protector of ordinary investors, that they will be committed, that they are committed to ensuring that the financial markets are a level playing field, or at least something close to a level playing field, and that these markets are not rigged to favor the powerful, politically well-connected sophisticates at the expense of regular, mainstream investors, either through government failure to detect, prevent, and punish fraud and other bad acts. It’s a very bad thing if prosecutors are asleep at the switch or if courts are not serious about punishing unfaithful fiduciaries.

 

      And there is also the worry that government will use its vast regulatory powers -- and the financial industry is extremely heavily regulated, so those regulatory powers really are quite extraordinary. And the government, the public trusts, will not use these vast regulatory powers to favor the economically and politically powerful, even though in the United States today, there are a lot of people with a lot of economic and political power. And we understand that agencies can be captured, and this worries us.

 

      This system has worked so well for so long, albeit with occasional glitches, as we saw in the financial crisis of 2007 to 2009, that it’s very easy to take for granted. But if history teaches anything, I believe it is that we should not take for granted a system where so many can with so much confidence entrust so much money to intermediaries.

 

      There was nothing inevitable about our present world, a world in which BlackRock, Vanguard, and State Street, to name three of the most enthusiastic proponents of activist, what we’ll simply refer to as ESG investing, they hold trillions of dollars for investors who to date can trust these firms to serve as faithful fiduciaries. But the rise of activist investing, in particular the recent rapid surge of ESG, or environmental, social, and governance investing, threatens to undermine this system.

 

      Now, the system that we have now is frequently misunderstood and frequently misdescribed as one that allows, encourages, and perhaps even sometimes requires corporate managers and investment professionals to aggressively inflict societal harms as they do their jobs, to aggressively externalize costs onto society so that their shareholders can make money.

 

      When Milton Friedman published an article in The New York Times in 1970 on corporate social responsibility, expanding and modifying arguments he had advanced in his book, Capitalism and Freedom, he was accused of, and for half a century now has continued to be accused of, producing a simple-minded “greed is good” narrative. But he didn’t do this. Friedman’s reasoning was subtle and ought to command our attention.

 

      Yes, Milton Friedman argued that the social responsibility of business is to increase its profits as much as possible, as Professor Macey was just noting. But Friedman was careful to add that business must do so while staying within the rules of the game. Understood property, Milton Friedman’s main point is that in a market-oriented democracy, there are clear, distinct divisions of labor and responsibility. Laws and regulations impose constraints on business. Corporate managers then act within these constraints to be faithful agents for their principles, making them maximum profits within the societal constraints.

 

      These constraints are important to respect, and we come down hard on corporate fiduciaries, corporate managers who don’t respect them. They reflect the collective decisions of the voters who act through the political process to make decisions about public policy, including hard calls on how much pollution are oil companies going to be allowed to emit, where, when.

 

      By respecting these restraints, by following the rules of the game, corporate fiduciaries can be confident that they are not in conflict, or at least not in serious conflict with society’s interests. For how are we to know society’s interests except by understanding that in our system, those interests are, in large measure, constructed and revealed through the political process? It is the political process that is responsible for ensuring that the externalities that Professor Blair described, which are serious problems, and we should not dismiss them out of hand, but it is that process that is designed to make sure that the externalities do not get out of hand. It is that process that sets these rules of the game.

 

      When those who are trusted to serve as agent decide to pursue social goals, which are often quite amorphous, often represent particular hobby horses of the agent who’s deciding to peel off of it, they are, in effect, imposing a kind of tax on those whose interests they are supposed to protect. That’s another kind of externality on the part of these agents. And as Milton Friedman noted, they are in a sense acting simultaneously as legislator, executive, and jurist, deciding who to tax, by how much, and for what purpose, and how to spend the proceeds, all of this guided only by general exhortations to improve the environment, fight poverty, and so forth.

 

      Right now, the SEC, and some other organizations too, are subject to very strong pressures to adopt some form of ESG disclosure mandates. And these mandates, I believe, if instituted are likely to put pressure on companies to adopt practices that are popular with one chunk of society, often a chunk of society that has values, that has projects, has aspirations that are not necessarily those of their mainstream investors, and to adopt policies that have yet to be enacted through normal channels, generally because there isn’t the political support for these policies to be put in place through the normal channels.

 

      It is Congress, the EPA, and other entities with particular expertise in the area who we have entrusted to look at the issues connected with climate change and make hard decisions, not organizations like the SEC. And there is a real danger, I believe, that the SEC and other regulators can end up being backdoor regulators for areas outside their purview. They are obviously some formidable constitutional issues here that I think will attract a great deal of attention. But even putting those aside, it’s simply not a good idea.

 

      One final observation. A central feature that distinguishes poorly functioning financial markets from well functioning ones is the association between firm valuation and political risk. When governments play favorites, political risk increases. What I see is a political climate in which the SEC, the Federal Reserve, and other government entities are faced with pressures that may lead to raised costs for firms that are out of step with the governing party’s priorities. Should things go in that direction, the cost of capital for a given company could rise and fall with each change of administration. That would be a bad system, I believe, and a seismic change from the system we have now.

 

      Now, Jon Macey has offered persuasive comments about why this is, quote, “sound and fury, signifying nothing.” Jon is often right. Jon, I hope you are right here. But the speed and magnitude of the enthusiasm for ESG investing does give me pause. And I hope at the very least, we will figure out that it is important to draw a very, very, very bright line between people spending their own money to further causes that are near and dear to their hearts and people spending other people’s money to do so. Thank you.

 

Hon. Jeffrey Sutton:  Thanks to all four of you. That was terrific. Professor Zingales, I saw you wanted to respond or offer a thought.

 

Prof. Luigi Zingales:  Yes. I agree mostly with the position that Milton Friedman took in the 1970 piece, but there are two important caveats. Number one is Julia said Milton Friedman said firms should maximize profits staying within the rule of the game. Now, what is funny is that his next door office mate, George Stigler, the same time as he was writing the 1970 piece was writing the 1971 piece on regulatory capture.

 

      And so we know that corporations don’t stay just within the rule of the games. They make the rule of the games. And so I think the question that we have to be careful is does this maximize profits include that you subvert the law to the advantage of a corporation? Of course the answer is no. Of course Milton Friedman would say no. But we have to be very careful that this rule of the game are not, unfortunately, exogenous. They are endogenous. And if you push too much that argument, you endogenize them in the wrong direction.

 

      The second point is more subtle. Milton Friedman said that corporations should do whatever they, its owners—and here he is wrong—but whatever the shareholders wish, which is most of the time, make as much money as possible. So Milton Friedman recognized that sometimes owners have other objectives other than money.

 

      So the example I made is not a hypothetical. I think that there are choices that shareholders might want to make that are not profit maximizing. If I am the sole owner of a pharmaceutical company and I don’t believe in abortion, I don’t want to develop the day after pill even if that’s profitable. And if I am alone, I don’t want to do it; if there are three of us, and all of us are Catholic, we don’t want to do it; if there are a million of us and the million of us are all Catholic and we don’t want to do it, we should have the right not to do it.

 

      Now, this is important because what he’s saying is there is a good way to do ESG, which is to ask the shareholders what they want. And being fair with the fact that ESG costs money, because if it doesn’t cost money, it’s not real ESG. It’s simply what Friedman said. You maximize profits. If this is good in the long term, then you don’t need a special dispensation to do it. It is profit maximizing. If it’s not profit maximizing, I’m not saying you shouldn’t do it. There are more values that I’m willing to sacrifice money for. However, I should be asked.

 

      And so I think that the way we want to confront this movement is not by saying you shouldn’t do any because eventually people will say we’re going to do some. We should say -- we should actually ask the people who pay for it. And so they’re not the managers that are the ultimate shareholders.

 

Prof. Jeffrey Sutton:  Professor Mahoney, I want to follow up on that and maybe put the point this way. So it’s one thing if the FCC or government agencies to require it. Let’s put that on the side because I get those are pretty easy to think through that problem. So it’s not mandated, so you have either ESG funds or ESG leadership of a company. Who cares?

 

      These ESG funds, they’re 50, 100 basis points extra. You’re losing a percent a year that you wouldn’t spend on an index fund. As far as I’m concerned, that’s a voluntary tax. And then over the years, let’s say you return -- recently they’ve had good returns. Maybe that’s just all the money piling in. But over ten years, you’re losing money, and you either decide I kind of like losing money because I feel so good about the values of this company, or you buy another -- you find someone else. You get an index fund. That seems libertarian.

 

Prof. Julia Mahoney:  Exactly. I agree with you completely on that. So if you wish to go and buy fair trade coffee, I say that’s fantastic. If you say to me, I’ve been researching how hard it is to engage in effective philanthropy, this is absolutely true, and I think I would be better off purchasing items from corporations that tell me plausibly that they engage in certain kinds of labor practices, etc., etc., etc., and I’m willing to pay more for products, I say that’s fantastic.

 

      Now, there are, of course, difficulties in monitoring those who you trust to be philanthropic intermediaries. That’s not a problem, however, that’s unique to ESG. That’s a huge problem with the whole nonprofit sector. I’m a big fan of civil society and so forth. I very much enjoyed and appreciated Judge Thapar comments about the importance of civil society and how it is a backbone of the United States. I agree with all that. But when it comes to charity, we all know that it can be very, very difficult to figure out -- to find trustworthy intermediaries for one’s generous projects.

 

      And to the extent that I think ESG has a future or should have a future, it is in this area of, in effect, allowing for effective charity, effective philanthropic-style projects. When I say that there are some complications, there’s a lot of misleading of people, I think, in terms of the good that’s actually being done, and we need to think about that. But the basic idea, I’m with you completely.

 

Prof. Jeffrey Sutton:  I’ve got a few more questions, but people that want to ask questions, feel free to come up to the mike and I’ll give you a shot.

 

      Professor Blair, one trick of ESG investing, whether it’s leadership of a company or a fund, is measuring success. So one of the easy things to think about with profit maximizing, it’s pretty easy to measure shareholder return. And what’s the social return on investment? How do you measure that? How do you say the manager did a good job of a company or the investment stock picker did a good job at picking stocks?

 

Prof. Margaret Blair:  Yeah, this is a huge issue. I started writing about these issues about 30 years ago, and one of the first things I ran into was the difficulty of measurement. In the late 1990s, there was a big interest in these kinds of issues among accounting firms because if you recall what else was going on in the late 1990s, there was a big run up in the stock prices of any firm that had a dot com at the end of its name.

 

      And there were a lot of people out there who said, “Wait a minute. We’ve been creating value all the time, and not all of the value is picked up by -- is measured in the conventional accounting ways. If these people can just put a dot com at the end of their name and get people to invest in them, why don’t we -- we should -- running other kinds of businesses, we should learn how to explain to our investors where we think the value is coming from that may not be measurable in the form of conventional assets.”

 

      And there was a big interest in this, and there was a lot of accounting push, and I ran a big project at the Brookings Institution back then to look at this and see if there -- and it was one of the most discouraging projects I ever undertook because there is no simple answer about measuring a lot of the things that we all know have value that go on inside corporations, the intangible assets where there’s not a market, the human capital, the ideas, the camaraderie you build, the whatever it is, the reputational capital.

 

      These things, we can’t measure them, except we can look at the total at the end of the day and we can ask by what amount does the share price of the corporation exceed its property, plant, and equipment, and all the rest of it must be intangibles. That’s about the best we came up with. And here we are, 25 years later, and we still have made very little progress.

 

      It isn’t the same world, however. So one of the things that is different now is that there’s enough people out there that have been trying, and putting out metrics, and measuring things, and posting them that there’s beginning to be some coalescence around certain ideas. So measuring your -- there are standards for measuring your carbon footprint. And there’s not just one way to do it. And the SEC and the accounting industry hasn’t adopted a particular way to do it. But there are -- there’s a narrowing of the choices. We are closing in on better ways to measure certain kinds of things. And that’s happened because people cared about it, and people have worked at it for a long time now, trying to figure these things out.

 

      The other thing that’s happening, and I guess these are all tributes to civil society because these are happening outside of government, that is helping in this regard is another thing that I’ve written about, which is what I call third-party certification. So this is turning up in a lot of -- as a way to let your investors know here’s what we’re doing. And in fact, there’s this third party out here that certifies we, in fact, are doing that. And again, they’re all over the map, and some of them are bogus, but there is a gradual coalescence toward some standards in these kinds of areas.

 

Hon. Jeffrey Sutton:  Professor Macey, I want to give you one shot at either responding to some of these comments or to this question. There are a lot of libertarians here. Why shouldn’t libertarians say, “We love this. Government gets in the way. Put ESG funds to the side. We’re talking ESG leadership of corporations. You can have a Hobby Lobby here. You can have a climate sensitive company there. What’s not to like about this? Let these companies run the world.”

 

Prof. Jonathan Macey:  I’m going to be very succinct because I want to hear questions, but the basic answer is, I think, was supplied by Luigi, which is it’s fine if I’m the CEO of a company and I want to devote my life to volunteering for Greenpeace. It’s quite another thing to do it with other people’s money, and that’s my concern.

 

Hon. Jeffrey Sutton:  All right, first question. Say where you’re from and name. And if you want to direct it to somebody, that would be great.

 

Daniel Ortner:  Hi. I’m Daniel Ortner from the Pacific Legal Foundation. The question, I think this is to anyone, is if anyone would like to comment on the recent trend from both regulators like the State of California and also organizations like the Nasdaq to be imposing social policies on corporations such as diversity quotas requiring a certain number of women or racial minorities or LGBT individuals to be on corporate boards, and those kind of -- the shift towards those policies and what that says about social activism and corporate policy.

 

Hon. Jeffrey Sutton:  Professor Mahoney, do you want to try that one, or Professor Blair?

 

Prof. Margaret Blair:  I didn’t understand the question. Maybe my hearing’s bad, but there’s a lot of noise back there.

 

Daniel Ortner:  I’m sorry. So I was asking about the trend of states and also organizations like the Nasdaq to impose policies on corporate boards and corporations such as the requirement from the State of California and the Nasdaq that corporations have a certain number of women or minorities on their corporate boards, and what implications the new direction toward states or government entities imposing those kinds of policies on corporations, what that has to say for the policies.

 

Prof. Margaret Blair:  I’m torn about whether the law should require this. I guess I don’t really think it’s the appropriate role of government to say this. But increasingly, investors want it. And I think inside corporations, the conversation that’s being had is around -- I think inside corporations, they really are asking questions like, “Wait a minute. We have not worried about these things in the past because it was a -- it didn’t seem like it made much difference. But we’re not going to be a profitable company in the long run if society falls apart. So we do need to think about whether there are things that we should be doing in order to in general improve the overall fairness and the overall functioning of society at large.”

 

      So is putting minorities and women on boards helps that? I think it’s likely to give corporations new perspectives on things that can be helpful to them. So I’m not opposed to them doing that, certainly. I’m not sure I think it should be mandated by law.

 

Hon. Jeffrey Sutton:  Okay. Over here?

 

Robert Barker:  Can you hear me?

 

Hon. Jeffrey Sutton:  Speak up, if you could.

 

Robert Barker:  Yeah, okay. I’m Robert Barker from Atlanta. I’ve represented public companies. Right now, I represent a lot of private companies and private investors. And so I’ve followed the debate for a long time from various sources. And I think there’s all sorts of people putting mandates in place. Norway requires 40 percent of the boards to be comprised of women, I think. And those have been around for a long time.

 

      And I was intrigued by the idea of rules of the game that Professor Mahoney put forward and Professor Zingales picked up on. So I would like to ask Professors Blair and Mahoney this question because it seems to me that there are two different kinds of rules of the game. There are the larger rules of the game like tax policy and how much you can take out, and there’s some other things. And then there’s some smaller rules of the game which, according to the Delaware courts post-Revlon, for example, would not necessarily say that the rules should be imposed as long as they don’t accept shareholder value. So they leave a great deal of discretion to the managers under the business judgement rule.

 

      I’m looking back in history, and you look at it in Genesis. I guess the Book of Genesis is when you first look at this where Joseph tells Pharoah, “Well, you can let the owners, the entrepreneurs keep 80 percent of their wealth as long as you only take 20 percent during the years of fat.” Okay, that’s fine. Then you roll forward to modern times where what Professor Blair was calling this consensus develops. So in the ’30s, there was this consensus in Germany --

 

Hon. Jeffrey Sutton:  -- Let’s roll forward to the present and the question.

 

Robert Barker:  I’m going very quickly. This will be my last historical example and move from Genesis to the ’30s. But in the ’30s, you have a situation where you say in Germany there’s a consensus, we shouldn’t have Jews on the board, so that becomes the law. There’s a consensus that corporations make too much money, and so Hitler says, “Okay, well, if it’s above 6.5 percent, you have to use all your profits to buy German war bonds.”

 

      So what are the rules of the game, and how do you distinguish between these two rules? And how do you develop a consensus that is good for all times, not just for Genesis or the ’30s?

 

Hon. Jeffrey Sutton:  Yeah, that’s a good follow up. So you’ve got business judgement rule, which gives a lot of flexibility to the board and management, and then you have mandates, which narrow that. So maybe Professor Mahoney -- and let’s try to keep the answers fairly short and the questions short as well so everyone gets a shot. Professor Mahoney, go ahead.

 

Prof. Julia Mahoney:  I will keep the answer very short. The answer is yes, we have rules of the game, and an enormous amount of what we do at The Federalist Society concerns making sure that those rules of the game are in accordance with our Constitution, its text, and its principles.

 

Hon. Jeffrey Sutton:  Here we go.

 

Sam Wright:  Yes. I’m Sam Wright from Marlin, Texas. For Professor Macey, you seem to express a reluctant admiration for ESG because people are playing with their own money. But is it not true that a lot of the clout for ESG comes from state and local government pension funds that are massively overpromised and underfunded, and when they focus on something other than maximizing return on investment, they make their own fiduciary problems that much worse?

 

Prof. Jonathan Macey:  I couldn’t agree with you more. And I should have drawn a distinction between a situation where John Smith is putting his money in his own 401K, and he can do whatever he wants with it, versus public pension funds, which are using other people’s money. I’m right 100 percent in agreement with you. Great point.

 

Prof. Margaret Blair:  Can I just talk?

 

Hon. Jeffrey Sutton:  Go ahead, Professor Blair.

 

Prof. Margaret Blair:  I just want to address that question. This was -- 20 years ago, it would have been an accurate description that all of the pressures for ESG and that sort -- they didn’t use the term back then, but all the pressures, or a substantial portion of them, were coming from public pension funds, the pension funds of teachers and civil servants and that sort of thing. That’s not true anymore. That’s not what’s going on. You don’t get up to, what is it, $17 trillion worth of assets being invested if you’re just looking at that. So it’s coming from a very, very broad basis.

 

      And I think it goes to the question of -- people always say, well, Milton Friedman didn’t really say they should do everything. He said they should do everything within the rules of the game. Well, where do the rules of the game come from? Well, there are the written rules, the law, and the court decisions, but there’s also norms. And Professor Macey agrees that maximizing shareholder value is a norm. It’s not a legal requirement. So the norms are changing. And I personally think that that’s probably a good thing.

 

Hon. Jeffrey Sutton:  Over here?

 

Michelle Roberts:  Good morning. Michelle Roberts of BlackRock. Larry Fink recently wrote an op-ed in The Wall Street Journal in these last weeks where he argued that rich countries must put more taxpayer dollars to work driving the net zero transition abroad and that $1 trillion a year in public and private investment is required to drive down emissions. I’m wondering if any of the panelists read the op-ed and how they would analyze it from the perspective of rule of law, separation of powers, and first principles. Thank you.

 

Hon. Jeffrey Sutton:  Anyone want to take a shot at this? Professor Zingales?

 

Prof. Luigi Zingales:  Yeah. I think that the ultimate decision should be in the hands of the investor in BlackRock and the one who put the money in the funds. I think that the fact that Larry Fink advocates for himself the right to decide over all the pensioners, he is managing, what, $8 trillion in assets. He has a power that’s disproportionate. So that’s the reason why I strongly believe we need to create systems so that people can transfer their preferences and direct the votes of all this money in the direction they want, not in the direction Larry Fink wants. I think that Larry Fink is too powerful for today’s society.

 

Hon. Jeffrey Sutton:  Professor Macey, did you want to respond to that?

 

Prof. Jonathan Macey:  I think that we should probably go to the next one.

 

Hon. Jeffrey Sutton:  Okay, next one.

 

Anthony Bruno:  Thank you. Anthony Bruno. I’m from California. I’m in-house counsel out of Apollo Global Management. Real quick question. I kind of want to drill down the idea of shareholder ratification for some of these investment’s fiduciary duties. What are the proposed remedies to situations where companies may be going in a direction that is not maximizing shareholder value? Are you suggesting shareholder derivative suits? How does that square with business judgement rule? What are some concrete remedies people who may dissent can avail themselves to?

 

Prof. Jonathan Macey:  Well, I think pass-through voting is a very good idea. I think ex ante approval is probably superior to ex post ratification.

 

Prof. Julia Mahoney:  Yes, I agree. I think we should look very carefully at more pass-through voting.

 

Hon. Jeffrey Sutton:  Over here.

 

Randall Johnson:  Hi. Randall Johnson, various jobs. Is it possible to contrast the rules of the road with regard to corporations with ESG funding as distinguished from corporations, and then the rules of the road applicable to fiduciaries running the 401K plans? And of course, it’s a little different with multi-employer plans where the trustees are both union and employer.

 

      But a repeated argument, to put it simply, is, for example, pension plans, 401K plans be invested in union housing to create jobs for union members. And residually, there’s a payoff down the road, perhaps. That was really before the ESG investing, but it strikes me that fiduciaries ought to be under tighter obligations with investing 401K plans and corporations in general. But I don't know if there’s separate rules of the road there or not. And that might be a question for you, Julia.

 

Prof. Julia Mahoney:  That’s a great question. To say that someone is a fiduciary, of course, only begins the inquiry. We need to know much more. Trustees of trusts are held, of course, to stricter duties, stricter standards, in a way, than are corporate fiduciaries.

 

      When it comes to retirement money, I would endorse a very, very strong fiduciary standard, full stop, regardless of whether it is a public pension fund, private 401K, or whatever. I think it is just way too easy for there to be schemes that sound good but which are actually either complete wastes of money, wishful thinking, or worse yet, feathering the nests of the politically well connected.

 

Hon. Jeffrey Sutton:  Okay, yeah. Go ahead.

 

Brian Bishop:  Brian Bishop from the Stephen Hopkins Center in Rhode Island. I just wanted to briefly ask -- we’ve been talking a bit about the kind of concealed carry version of ESG investing, but at least people using their money to forward ideas, even ideas about the market. I think of the GameStop as the open carry kind of version where people are expressing a concern about what’s happening in the market. And then, we came to the conundrum of should they be regulated not to be able to do that for their own protection, that it created more problems of regulation in a sense when people did take that individual prerogative.

 

Hon. Jeffrey Sutton:  Professor Zingales, I’m not sure you followed the GameStop reference, but you might be a good person to talk about this because you do seem to believe in government regulation when it comes to antitrust law. And maybe there’s --

 

Prof. Luigi Zingales:  -- Yeah. No, no, I do know the GameStop story. I think that I don’t see if people are consenting adults and they’re not gambling with their pension money—because if they’re gambling with their pension money, eventually all of us are on the hook—but if they are consenting adults and gambling with their money, I think that you should let them gamble. And I think that the risk of intervening in a situation like this is to favor somebody else. So there were a lot of hedge funds that were asking for the first time for regulation because they lost money. And you don’t want to cave into those demands. Those are terrible.

 

Hon. Jeffrey Sutton:  Okay, next.

 

Brad Russell:  I’m Brad Russell. I’m from Jacksonville, Florida. Professor Macey, if you like breathing free air, you should come down to Florida.

 

      But I’d like to hear the panelists thoughts on the proliferation of ESG practice groups at all of the leading law firms. It seems to me that Professor Macey’s three fundamental facts of the corporation would ordinarily prevent too much harm from this new ESG movement. But if all of the law firms are recommending that corporations follow ESG, it seems like that might be a way of imposing social pressure that is not law but essentially has the effect of law.

 

Prof. Jonathan Macey:  That’s a fascinating point. I want to be clear that I guess the only issue I have with the way you framed the question, and it’s a great question, is the extent to which law firms are faithful agents of their clients. The ESG groups at law firms are not themselves philanthropies or eleemosynary arms of the law firm. They’re billing their clients for providing this advice.

 

      So law firms have a huge interest in the kind of SEC mandated ESG disclosure that Professor Mahoney was talking about because it provides a demand for the services of law firms and the creation of ESG practice groups in order to allow their clients to comply with these rules. And so I think that the law firms’ push for ESG is really leaving their clients interest at the door when they go in to lobby, frankly.

 

Prof. Julia Mahoney:  Yes, thanks for raising that. If I had had more time, I would have said a few words about this development in the law firm practices, the ESG practices, and how that’s part of a greater network of social pressure.

 

Hon. Jeffrey Sutton:  Yeah?

 

Prof. Margaret Blair:  If we think about these things as changing norms, and I think we do need to think about them that way, the share value maximization norm emerged out of the takeover activity of the 1980s and late ’70s, ’80s. And it came out of finance, and it began to infiltrate into broad-based thinking that this is what should be done.

 

      Well, what kind of effect did that have? In the 1980s, you may remember interest rates were extraordinarily high. We had a period of time in which the interest rates on Treasury securities was as high as 12 and 14 percent. And so if you have companies introducing finance concepts into the way they’re running their companies, and they’re starting to do present value calculations, and the underlying interest rate is 10 percent, 11 percent, 12 percent, their internal hurdle rate that they have to meet may be 15, 16, 18 percent. You can’t think about the long term if you’ve got a discount rate of 20 percent or 15 percent. You cannot think about the long term. You have to disinvest now.

 

      So we had a whole set of practices that gradually worked their way into the way corporations operate, the way their managers -- the way B schools taught things. And you had this tension because the managers of the corporations in the 1980s were saying, “Don’t pay attention to those Wall Street guys. They just have a very short-term mentality.” Well, yeah, your mentality is really short term when you’re facing an environment of 15 and 20 percent discount rates.

 

      Now, what’s going on? Discount rate is practically zero. We all better be thinking long term with the discount rates as low as they are in this time. So it’s become socially acceptable again to think long term and to pay attention to social factors and other kinds of issues that will affect the business and affect the ability of the whole planet to survive over the next few centuries. Thank you.

 

Hon. Jeffrey Sutton:  All right, this is perfect. Our last questioner will be the former Secretary of Labor who, I think, has thought about this a little bit.

 

Eugene Scalia:  Yeah, thanks. Gene Scalia. This has been a great panel. I just want to touch on two things that I think are extremely important as we talk about this area. One is the different rules applicable to pension plans, which Jon touched on, Professor Mahoney. There is a different legal standard there, and not just for defined benefit plans for 401Ks too. When I was at Labor Department, we did a rule on that. There’s now been a proposal to withdraw that. People interested in this area should regard that as one area where the standards governing ESG investing are particularly high.

 

      The second thing I want to say is that a lot of the discussion today has been in the context of people free to do what they’d like with their money, or corporations responsibly doing so. But there’s a very important SEC rulemaking that I think we’ll see early next year which will force ESG disclosures as to certain things that the SEC thinks should be promoted, climate change and the social values that some people hold.

 

      And so that really radically changes the context in which a lot of this discussion has occurred where suddenly companies are forced to disclose the things that they’re doing in certain areas. If they’re doing good things, or say they’re doing good things, good for them, unless the SEC decides that they’re not doing good enough things and there’s an enforcement action. If they’re falling short and say, “Hey, we’re kind of falling short,” then they’re subject to public opprobrium. So I think that’s a very important rulemaking coming down the road that alters some of the terrain we’ve been talking about where it’s free people, free markets, free decisions.

 

Hon. Jeffrey Sutton:  You became our fifth panelist. Anyone want to respond to our fifth panelist who has several terrific observations?

 

Prof. Jonathan Macey:  I agree, Gene. You’re absolutely right.

 

Prof. Julia Mahoney:  Yes, I agree.

 

Hon. Jeffrey Sutton:  Well, a lot of agreement with an excellent way to end.

 

Prof. Margaret Blair:  We better quit while we’re ahead.

.

Hon. Jeffrey Sutton:  It’s 11:30, so if you have a breakout session with a lunch, find it. Otherwise, there’ll be lunch out there. And thank you so much to our four panelists.

11:45 a.m. - 1:30 p.m.
Federal Consent Decrees: Good Governance, an Expansion of Federal Power, or Both?

2021 National Lawyers Convention

Topics: Federalism • Litigation
District Room (Lower Level)
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". This panel discussed "Federal Consent Decrees: Good Governance, an Expansion of Federal Power, or Both?"

In a 1987 article entitled Why Hold Elections?, Professor Michael McConnell noted a trend that had been emerging since the 1970s: the use of consent decrees to settle federal lawsuits against state and local governments. These decrees are entered as judgements enforceable by contempt, but without full litigation. Nonetheless, these decrees often contain hundreds of requirements that dictate the policies, budgets, and personnel of local government agencies for years or even decades. Professor McConnell thus warned: "To the extent that consent decrees insulate today's policy decisions from review and modification by tomorrow's political processes, they violate the democratic structure of government. They should be repudiated before they become a common part of the legal landscape."  

In 2018, then-Attorney General Jeff Sessions issued a memo noting that consent decrees "raise sensitive federalism concerns" and announcing a new set of policies governing (and limiting) DOJ’s use of consent decrees.  

In April 2021, Attorney General Garland repudiated the Sessions memo, stating that the "Department will return to the traditional process that allows the heads of litigating components to approve most settlement agreements, consent decrees, and the use of monitors in cases involving state and local governmental entities."

This panel will explore the important topic of federal court consent decrees to settle claims against state and local governments. Panelists will explore the history of such decrees and the arguments for and against their use. Panelists will also discuss the dueling approaches to DOJ’s use of such decrees, as outlined in the Sessions and Garland memos.

Featuring:

  • Mr. Andrew McCarthy, Senior Fellow, National Review Institute; Contributing Editor, National Review
  • Mr. Jesse Panuccio, Partner, Boies Schiller Flexner LLP; Former Acting Associate Attorney General, U.S. Department of Justice
  • Prof. Robert Percival, Robert F. Stanton Professor of Law; Director of the Environmental Law Program, University of Maryland Francis King Carey School of Law
  • Mr. Benjamin S. Wolf, Former Legal Director and Institutional Reform Project Director, ACLU of Illinois
  • Moderator: Hon. Elizabeth “Lisa” Branch, U.S. Court of Appeals, Eleventh Circuit

Speakers

Event Transcript

Allyson Ho:  Welcome. We’re going to get started. I’m Allyson Ho. I serve on the executive committee of the litigation group of The Federalist Society, and it is my great pleasure to welcome you to today’s panel discussion on federal consent decrees. 

 

I’ve been asked to announce that per D.C. regulations please wear a mask unless eating or drinking, so I suspect I will be putting on more weight during the annual convention than I normally do given that rule.

 

And now I have the great pleasure of introducing our moderator, Judge Lisa Branch of the U.S. Court of Appeals for the Eleventh Circuit. This is a point of real personal privilege for me.

 

I first met Judge Branch 20 years ago in 2001 when both of us attended our very first Federalist Society National Lawyers Convention, the first of many. From private practice as a commercial litigator in Georgia to high level stints at the Department of Homeland Security in the Office of Management and Budget to the Georgia Court of Appeals and now to the U.S. Court of Appeals for the Eleventh Circuit, Judge Branch truly exemplifies the ideals of the Society, and it’s my great honor to introduce her as our moderator today. Judge Branch.

 

Hon. Elizabeth “Lisa” Branch:  I have to say it’s also a point of privilege to have Allyson do that introduction. That was a surprise to me, and Allyson is -- as she indicated, she is a dear friend of mine. We go so far back when I was up here serving in the Bush administration -- both Allyson and her husband, Jim, who’s also now a federal judge. So this kind of makes my day, my week, my month to have you a part of this. So thank you.

 

I’m always honored to serve as moderator for a panel at The Federalist Society’s annual Lawyers Convention, and I’m particularly honored to do so this year as we work toward returning to normal, being back in person. I know that that is a point of privilege and pleasure for all of us to be back resuming everything as normal as much as possible. And it’s also particularly meaningful for me to serve on this panel today on Veteran’s Day when we can honor all those who served our country.

 

Welcome to the lunch panel for the first day of the conference. The only concern I had about this lunch panel and I did express to Dean is he pitted all the Eleventh Circuit judges up against each other. We’re all moderating lunch panels today, and he seemed puzzled when I pointed that out. I don’t think he had noticed that. So I cannot do my normal support of my colleagues by attending their panels.

 

But our panel today -- I’m very pleased to be serving on this, titled “Federal Consent Decrees: Good Governance, an Expansion of Federal Power, or Both?” Consent decrees are used by the federal government to settle lawsuits in various contexts, those brought by the federal government and those brought against the federal government. They are entered as judgments enforceable by contempt without full litigation. And they’ve been so used for decades.

 

Not surprisingly, different presidential administrations have taken different approaches to consent decrees to address the concerns they raise and the benefits they provide. In 1986, in fact, during the Reagan administration, Attorney General Meese instructed Department of Justice lawyers not to enter into consent decrees that significantly constrained the discretion of executive agencies. And jumping to a more modern time, the more current tension between administrations is shown by the fact that in 2018 in the Trump administration Attorney General Sessions implemented policies on consent decrees with state and local entities that were designed to reduce the circumstances when they would be used and to limit the scope when they were negotiated.

 

He said the DOJ, quote “Must ensure that its practices in such cases are in the interest of justice, transparent, and consistent with the impartial rule of law and fundamental constitutional principles, including federalism and democratic control and accountability.” More recently -- in 2021 in fact, in August in the Biden administration Attorney General Garland rescinded the Sessions memo and said the Department of Justice would, quote “return to the traditional process that allows the heads of litigating components to approve most settlement agreements, consent decrees, and the use of monitors in cases involving state and local entities.” Our distinguished panel today will address those issues during its discussion.

 

I will briefly introduce our four panelists in the order in which they will speak. Please note these are very brief introductions and that you will find their more detailed biographies on The Federalist Society website. Each panelist will then deliver brief remarks. I will ask a few questions of the panel before we turn to the audience for questions. Jesse Panuccio, a dear friend of mine, is going to be our first speaker. He is a partner at Boies Schiller, and he has offices in D.C. and Florida. Before he joined the firm, Jesse was the acting associate attorney general at the Department of Justice, the third ranking official.

 

He served for three years as the Secretary of the Florida Department of Economic Opportunity. And before that, he served as Governor, now Senator, Rick Scott’s general counsel. He’s going to discuss how consent decrees are a form of legislation outside of the democratic process or serious judicial testing, which raise separation of powers, federalism, and good government issues.

 

Next up will be Ben Wolf. Ben was the legal director of the ACLU of Illinois from 2015 to 2020. Before he took that position, he was the director of the ACLU of Illinois’ institutional reform project since 1984. Before he joined the ACLU legal staff, he was an associate at Jenner & Block in Chicago. Ben’s going to share his positive experiences with consent decrees which he considers to be an important tool for addressing serious problems he has encountered in his years as a civil rights lawyer representing vulnerable people.

 

Andrew McCarthy is a contributing editor at National Review, a senior fellow at National Review Institute and a Fox News contributor. He is also a best selling author. He is a former chief assistant U.S. attorney in the southern district of New York who notably led the terrorism prosecution against the Blind Sheikh after the 1993 World Trade Center bombing. He will argue that consent decrees are non-democratic vehicles that undermine federalism principles when the federal government seeks to implement transformation change as to state and local government entities.

 

And last but certainly not least Robert Percival is the Robert Stanton Professor of Law and director of the Environmental Law Program at the University of Maryland School of Law. Before he joined the faculty he was a senior attorney for the Environmental Defense Fund. He wrote one of the first articles on the propriety of consent decrees to effectuate and enforce federal law in 1987. He will discuss how consent decrees have proven to be a useful and efficient means for ratifying and enforcing settlement agreements entered between plaintiff and government entities. I will now turn the microphone over to Jesse.

 

Jesse Panuccio:  Well, thank you, Judge Branch, for that kind introduction. It is great to be with you and this distinguished panel and this crowd back in person in the Mayflower. So thanks. I’m really happy to be here. So our topic this morning is as you’ve heard the modern day use of federal consent decrees, but I’d like to start briefly with first principles which I think should help orient our thinking on this issue.

 

Madison famously lamented in Federalist 51 that men are not angels, and thus they need a government. He explained in framing a government which is to be administered by men over men, the great difficulty lies in this. You must first enable the government to control the governed, and in the next place you must oblige it to control itself.

 

Now, the Framers accomplished this through the structural Constitution. That is how the government was to control itself. But the administrative state has long since eviscerated most of those controls, and federal agencies, especially the Department of Justice, often wield the very unchecked and uncontrolled power the Framers knew was destructive of liberty. Consent decrees are a powerful but I think underappreciated and under-analyzed example of this phenomenon.

 

A consent decree as Judge Branch mentioned is a settlement by parties reduced to a binding court judgement, meaning that unlike a violation of an out of court settlement which can lead to a breach of contract claim, a violation of a consent decree can lead to contempt, including criminal contempt. In other words, consent decrees have the force and effective of law and are very serious business. Consent decrees can and do serve an important function in the range of cases in enforcement areas, but many consent decrees are in effect a set of regulations for a single party or government agency overseen by the Department of Justice, a federal judge and quite often a private party monitor appointed by the court.

 

In practice consent decrees can result in one or all of these entities directing the day to day operations of a business or local government agency for years on end. As should be obvious from the description, such a regime can be as intrusive as, if not more intrusive than, a set of regulations. Take for example the consent degree that now governs the city of Chicago police department, a decree that DOJ objected to in 2018 under Attorney General Sessions but one that is similar in substance to many that DOJ required in years past and will surely require again during the Biden administration.

 

Regarding the Chicago decree DOJ noted this. The decree is a 226-page document governing virtually every facet of Chicago police department operations in excruciating detail. The decree’s 799 paragraphs and hundreds more subparagraphs cover community policing, impartial policing, crisis intervention, use of force, recruitment, hiring, promotion, training, supervision, officer wellness and support, accountability, transparency, and data collection. Indeed, if you were to go to the Chicago police department website right now, you could find on their page what they call a compliance consent decree dashboard. It has 797 requirements governing nearly every aspect of the department’s operations.

 

The consent decree is in effect the city agency’s governing charter at this point. There are many potential problems with such wide ranging consent decrees, and I’ll highlight just some of them. First consent decrees turn DOJ litigators, private plaintiffs, federal judges, and private monitors into regulators, even if they lack the time or expertise to properly regulate. 30 years ago the assistant attorney general for the antitrust -- the then assistant attorney general for the antitrust division, Rick Rule, noted in a speech that the Reagan administration’s best known accomplishment in antitrust law was the breakup of AT&T.

 

The ongoing monitoring required under the AT&T consent decree, however, created in his words a mixed legacy for that accomplishment because of the institutional harms flowing from requiring the division and the federal court to be in effect telecom regulators. Federal courts in the antitrust division rule said -- inherently lack many of the resources crucial to successful regulation such as technical expertise, regulatory experience, and administrative processes. So that’s one problem.

 

A second problem with consent decrees and perhaps the most egregious is that many of them stray not only beyond the practical resources and expertise of the enforcers but also beyond the legal authority of what the government could to by any other means. Imposing conditions that could not be obtained through litigation to judgement is similar to creating regulations beyond the bounds authorized by statute. It creates serious due process and separation of powers questions, and just because a court imposes such a decree does not make it appropriate, legal, or wise. Courts like Executive Branch agencies—I’m sorry, judge—can exceed their powers and distort constitutional norms in certain circumstances.

 

A third issue for consent decrees is that they often empower private party monitors as independent agents of the court. Courts regularly defer to monitors as the decrees are complex and voluminous. Without a monitor’s assent it is very rare -- exceedingly rare that a federal judge will terminate a decree, even, I’ve seen, in circumstances where both the government and the defendant agree that the decree should be terminated. The problem is that monitors are not government officials clothed with official power.

 

They are not elected, and they are not appointed. They are not accountable once appointed to the DOJ or to the defendants. And they are paid often very handsomely for their work. For example, let’s look again at the Chicago consent decree. Here’s what DOJ said about it in its objection at the time. “The monitor costs alone will be staggering. The monitor can be paid $2.85 million per year, more than ten times both the police superintendent salary and the mayor’s salary and 59 times the starting salary for a beginning Chicago police department officer. These taxpayer funds, thus, will not be available to hire and train more officers and purchase equipment to protect Chicago residents.”

 

Now, many monitors are honest brokers and do good work, but that doesn’t change the fact that they wield tremendous, unaccountable power over the local governments and businesses they monitor. They are very costly, and for better or worse they face obvious financial incentives to keep the monitorship going, especially when the fees represent a substantial income stream for their law firms or their consultancies.

 

A fourth problem with consent decrees is that in practice consent decrees have virtually perpetual life, regardless of factual changes, scientific advancements, elections, economic shifts, deaths, wars, or just about anything else. One consent decree I can think of in governing a state environmental agency has been in place since 1991 -- yes, 1991. That’s 30 years. By my count, we have had six presidents, 10 Senate confirmed U.S. Attorneys General, 11 Senate confirmed EPA Administrators, and hundreds of new state and federal legislatures elected. We’ve had significant advances in scientific understanding, major shifts in the economy and population trends, and changes in the environment.

 

And through all of that time despite all of these changes, a loan federal district judge has been in charge of a critical issue of environmental policy and restoration. The question from a first principles perspective is this. Do the people through their elected representatives get a chance to reconsider critical environmental policy and funding priorities after 30 years? Do our democratic norms not require that someone other than a loan federal judge gets to revisit this vitally important issue from time to time?

 

Fifth and finally for consent, for today anyway, I think perhaps the most significant potential problem for federal consent decrees relates uniquely to those entered into with state and local governments. Such decrees are everywhere. In an important but underappreciated book published 30 years ago by the title of Democracy by Decree, law professors Ross Sandler and David Schoenbrod outlined just how pervasive these decrees were at the time. They have been, quote, “applied to the full range of government programs, including to name just a few examples, special education, mental hospitals, environmental protection, and prisons.”

 

The decrees cover not only an enormous range of programs but also an enormous range of states and cities. Decrees have ruled prisons in 41 states and local jails in 50 states, and this was in 2003, long before the Obama administration imposed many, many more consent decrees on state and local governments.

 

Now, you might wonder why local officials would enter such decrees, which often diminish their powers and divert limited local financial resources. Sandler and Schoenbrod explain why in their excellent book. “State and local officials wishing to avoid embarrassment for faults in the government program are glad to consent to a detailed plan.” In other words, it is often just politically expedient. It is also a way to cement one official’s preferred policy long after the official is gone. Indeed, it is a way to make it criminal for a future official to deviate from past policy choices.

 

And finally, local officials may agree to a consent decree because it is a way to force the elected appropriators, their managers, their overseers, the legislature, to fund programs that would otherwise lose out in the necessary compromises of assembling an entire state or city budget. Federal consent decrees thus raise both vertical and horizontal separation of powers concerns. From a federalism perspective, they constitute a federal takeover of local government. From a horizontal perspective, these decrees represent the Executive, rather than Congress, making policy that governs state and local governments. And at the local level, they represent local executive officials agreeing to a governing framework that the state legislature or city council has not enacted into law.

 

So I’ll close with this. All of these concerns are what animated the Department of Justice when it was led by then Attorney General Sessions to put in place a policy establishing some guardrails around the use of consent decrees. We aimed, in the words of Madison, to oblige the Department of Justice to control itself. The memo required -- the memo did no prohibit consent decrees, but it meant to cabin them and put serious process around it.

 

So the memo required the DOJ afford entities an adequate opportunity to respond to any allegations of wrongdoing. It required special caution before using a consent decree to resolve disputes with state or local government agencies. It provided guidance on the limited circumstances on which a consent decree might be appropriate, such as repeated violations that other enforcement mechanisms are not able to address. It required consent decrees usually have limited terms and clear objectives for exiting out of and terminating the consent decree, something that is often missing in most of the modern day consent decrees.

 

It required critically rotation of monitors -- mandatory rotation of monitors to get rid of the financial incentives to keep the decree going for nonlegal reasons. And it stated importantly -- perhaps most importantly that the consent decree must not be used to achieve general policy goals or to extract greater or different relief from the defendant than could be obtained through agency enforcement authority or by litigating the matter to judgement. In other words, a consent decree had to be about law, not about the policy preferences of DOJ lawyers or enforcement agencies. And it required high level approval by the associate attorney general or the deputy attorney general for final entry of a consent decree so that somebody with high level responsibility was signing off on the federal takeover of a local state government agency.

 

To my mind, our work on consent decree reform was one of the most important projects we tackled in the Sessions DOJ. Delegation, regulation, guidance, and deference got all the attention from administrative law scholars. But consent decrees are just as pervasive and probably more powerful. And the work to reign them in had never really before been done.

 

Alas, as you heard with a stroke of Attorney General Garland’s pen all that work has been undone and without, in my respectful view, any real explanation as to why. For example, his rescission memo recognizes that monitors can have conflicts of interest, a position DOJ has long held in other areas. But instead of leaving the carefully crafted policy in place, he establishes 120-day review period for further study and recommendations from the associate attorney general. As far as I know, it’s been well more than 120 days, and we have not seen any public disclosure of those recommendations.

 

So we are back to the wild west of consent decrees, and we will see where they go. And with that, I’ll now turn it over to Ben who will surely rebut everything I just said. Thank you very much.

 

Benjamin S. Wolf:  Thank you, Jesse, and thank you, Judge Branch. And happy Veterans’ Day. As the son and nephew and son-in-law of people who fought bravely in World War II and the Korean War, I always spend some time on this day reflecting on our gratitude and our freedom. And Jesse’s right, I will disagree with a few things he says.

 

I’ve represented ACLU clients in class actions against public officials for more than 35 years. My clients in most of these cases were people in the custody of the government or government funded entities such as prisons, foster homes, nursing homes, and facilities for children. These kinds of cases are often called institutional reform litigation, and many of them involved consent decrees. And I do want to insert one note of caution. I no longer work for the ACLU, so whatever I say today are the views of me and nobody else. Although, they reflect my 36 years working for the ACLU.

 

The problem my cases confronted were profound -- the problems. Foster care systems that brought children into the state’s custody in the name of protecting them, were sent to foster homes and institutions that neglected their basic needs and sometimes abused them. A large juvenile detention center housed young people in filthy conditions, repeatedly denying them essential health and educational services and exposing them to abuse by staff -- a lot of it. Prisons that denied decent healthcare to inmates, causing unnecessary pain, sickness, and death. Hard problems causing a lot of human suffering.

 

Elected and appointed officials for years had completed failed to address these broken public systems, often misleading the public -- I would say usually misleading the public about the suffering of my clients. These were in my view classic examples of entrenched, unlawful practices that required federal court intervention. I’ll just summarize the results in a few of these cases to give you the sense of how consent decrees can make a real difference.

 

These consent decrees often helped to bring about measurable improvements in the broken government systems. Two quick examples, the changes in the foster care system in one case where I was lead counsel were described by the congressional quarterly researcher as the gold standard of reform, resulting among other things in tens of thousands of children placed in safe, stable adoptive homes or guardianships, improvements in the safety of children by every measure, and a reduction of the number of children lingering in temporary foster care, from over 50,000 to about 16,000, consistent with safety.

 

The litigation I mentioned involving the juvenile detention center that was so filthy and overcrowded and violent was described by one expert in a book published a couple of years ago as the most effective and best documented transformation of egregious conditions of confinement at any juvenile corrections facility in the country. I’d be happy to provide relevant cites and even cites to books and studies for anyone who’s interested. In my experience, consent decrees and other structural injunctions can be very effective in imposing a structure for accountability and reform of profoundly broken government systems serving prisoners, foster children, and others with little political power.

 

They can force public officials to acknowledge the depth of the problem, produce accurate independent data about whether the reforms are working—sometimes they don’t— and require stakeholders to go back to the drawing board when their favored prescriptions don’t work. Critics often question how long these cases can last. Jesse mentioned some cases that lasted a long time. And I would say that’s a fair point.

 

The two cases I’ve described involving foster care and juvenile detention both lasted well over a decade, and one of them is still pending. It’s certainly true that consent decrees don’t magically transform hard problems into easy ones. Large broken government systems can take many years to fix, even under the pressure of a court injunction, whether a consent decree or the result of an adversarial trial. Changing the organizational culture of a large chaotic bureaucracy and creating sometimes almost from scratch the infrastructure required to measure what’s happening to change incentives, to impose some accountability on unionized civil service systems, takes time.

 

The case involving the police in Chicago that Jesse mentioned is one I didn’t work on directly, but I did supervise some of the people in my office who were involved in that case. And I think it’s fair to say we’re still in the early stages. The consent decree probably is longer than one I would have negotiated. Very often the defendants want that.

 

The police departments and other defendants often prefer a proscriptive, detailed consent decrees to consent decrees -- the kind that I prefer, more focused on broad outcomes and expressing some flexibility about how you get there. I suspect we’ll get to more creative strategies achieving better outcomes. And I’m confident over time that the consent decree enforced by the attorney general and by some private parties, including some represented by the ACLU, will produce real changes. But it’s going to take a while.

 

The process is still in its infancy right now. And whether the current monitoring structure or some other such structure of oversight is the best one, I’m open to talking about that. I don’t know the answer to that, and I think neither do the people who work on that case. But the thing to remember throughout that case is the problems are hard, and big broken police systems in major cities are complex. And particularly in this era now for the first time in a while of slightly rising violent crime rates in a lot of cities, there are a lot of challenges about how to do that right.

 

The process of consent decrees can also be slowed down by legitimate concerns about state and local autonomy and federalism. I think we live in a very different world than the one described in the book 30 years ago that Jesse described. The law about modifying decrees, about deferring to the judgement about new public officials is quite clear now and does create more deference to the opportunities of new state and local officials to propose changes. But the consequence of that is that the process gets dragged out, and if you impose less intrusive remedies and you have a learning curve for the new public officials who maybe haven’t learned what the people in the process have learned for a few years going through things that worked and things that didn’t, you end up prolonging the remedial process.

 

And I think there are legitimate reasons for that, but the remedial process also then will prolong the human suffering that it’s trying to address, at least in the kinds of cases I worked on. I would submit that the alternative to court oversight is to consign huge numbers of people to needless suffering when elected officials fail to address the problems that afflict these systems. Protecting the constitutional and statutory rights of powerless citizens through court injunctions, whether after a trial or via consent decree, in the end I think makes our federal system stronger. We can’t consign our federal citizens with little political power to endless abuse and neglect when the elected branches won’t act. Consent decrees can be and often are slow and messy, as Jesse pointed out. But the alternatives usually are worse. Thank you.

 

Andrew McCarthy:  Thank you, judge. It’s an honor to be on this panel, and it’s a pleasure to be asked to come back to The Federalist Society convention, especially in person. As you can imagine most of the things I get asked to participate in these days are more journalist than lawyerly related, and in my legal career the worst thing I’ve had to worry about in the legal system is jihadist mass murder. So to me its much preferable to what I usually do day to day.

 

On the theme of trying to stick with what you know I’m going to talk about consent decrees and crime. There were in New York City in 1990 2,600 homicides, about seven a day. In 2017, that number had plummeted by almost 90 percent, down to 290. Crime was at record highs from the '70s to the '90s, and it was driven down to record lows by state policing innovations. Things like broken windows philosophy, the idea that you project the notion that the rule of law obtains and that the laws are going to be enforced, it can bring about cultural change. The idea of improving policing by being able to interview suspects and learning and making a more robust police database, that led to innovations like Compstat -- the idea of not having just static police assignments but actual deploying police to the places where crime was beginning to surge so that you could tamp down on it before it became a problem.

 

All of these innovations were not driven by the Justice Department or the federal government. They were driven by experimentation at the state and municipal level. The drastic improvement for civil rights cannot be overstated. African Americans suffer from disproportionately in terms of their percentage of the population -- from murder and violent crime. A near 90 percent drop in murder saved tens of thousands of lives. The plummeting of other violent crimes saved hundreds of thousands of criminal incidents where people were victimized.

 

It allowed neighborhoods to thrive in safety. It allowed them to thrive economically and culturally. The record plummeting of crime in the generation beginning in the 1990s is simply the most significant social evolution in modern American history. I’m almost tempted to call it social justice. It’s critical to recognize that this was not just a revolution in crime reduction; it was a revolution in policing. And it was also driven by state and local policy, not by the federal government. And that’s because a system of democratic federalism -- in such a system local government must be responsive to citizens whose lives are affected, particularly affected by their policing.

 

Because of the developments that we saw in this record reduction of crime, modern American police departments -- and this the point of it being a revolution in policing as well as crime reduction. Modern American police departments are more reflective of the communities that they protect and serve then they have ever been in American history. And that’s not just at the rank and file level. In cities like Atlanta for example where the population is 50 percent African American and the police department is 55 percent African American, there’s also been an evolution in the command level so that in modern police departments you have commanders, commissioners, deputy commissioners all reflective, again, of the communities that they protect and serve.

 

Society is making great progress through federalism and through democratic accountability. It does not need the Justice Department and its consent decrees to thrive and to safeguard civil rights. The Justice Department’s return to its Obama era proliferation of civil rights investigations and heavy handed consent decrees is about advancing a racial divisive, progressive political agenda, not advancing civil rights and not advancing quality of life. Don’t take my word for it.

 

In her August 13th memorandum revamping consent decrees, Associate Attorney General Vanita Gupta proclaimed the Justice Department’s vision that consent decrees and the monitorships they impose—and this is a quote—“promote transformational change in the state and local governmental entities where they are used.” I’d respectfully counter that the American people and their local communities do not want transformational change.

 

They want record low crime. They want safe streets. They want prosperous communities. They want a political class and legal elites who worry more about neighborhoods that are victimized by crime than about criminals and political narratives about systemic racism. That is the foundational canard behind the crusade to remake policing through federal consent decrees. And we must know that that political narrative is specious. The criminal justice system is dominated by graduates of elite American law schools who overwhelmingly identify as political progressives.

 

No small thanks to The Federalist Society, constitutional conservatives who care deeply about civil rights and equal protection under the law are also well represented. The notion that this profession would abide a system that is racist to its core should insult every one of our intelligence. Yet, that is the premise for the push for transformational change.

 

And the political nature of this crusade is blatant. It falls into a familiar pattern. Some tragic loss of life occurs in a racially charged incident involving police and a suspect. It is often not apparent that any civil rights violation occurred. We are inspected to infer one from nothing more than the race of the suspect, even if, as if often the case, the police are the same race as the suspect. It quickly becomes clear that there is no constitutional violation, but the Justice Department slips streams in behind the heated political rhetoric and the controversy and announces a pattern or practice investigation, suggesting that there are structural departures from constitutional norms, even if they can’t -- they’re not able to prove by prosecution a particular constitutional violation of law.

 

States and municipalities cannot afford to go toe to toe with the Justice Department’s bottomless budget. Plus, there are often collusive negotiations between DOJ progressives and progressive politicians who calculate that a consent decree will require so called reforms that they wouldn’t dare try to campaign on if they had to sell them at the ballot box. One way or another the states cave.

 

A great example is the George Floyd case in Minnesota, the trial of Derek Chauvin. Minnesota has a very progressive police department. It’s led by an African American commissioner with a reform background. They have extensive training in use of force, in conflict de-escalation. We heard endlessly at the trial that it’s drummed into the police this idea of “In my custody, in my care.” If you have a suspect in your custody, you are responsible for the suspect’s wellbeing -- drummed into every officer by hours and hours of training.

 

Every police official who testified at the trial of Derek Chauvin said that the tactics that were used on the street by the police officer violated basic tenants of Minnesota police training, even against suspects who were resisting arrest. And obviously, Minnesota prosecuted the rogue cop, and the jury believed the police witnesses who said that the behavior on the streets ran afoul of what their training was in the Minnesota police department. Yet, the Department of Justice could not wait to announce that it was opening a pattern and practice investigation as if those of us who watched a month of the trial had witnessed rampant constitutional violations day after day.

 

The response of the Justice Department is a response to situational politics, not a response to courtroom evidence. In our system the states are sovereign and should be trusted to govern their own internal affairs. Policing is the most central and consequential of those affairs. If state and local enforcement officials really do violate federal law and the Constitution, it is always available to the Justice Department to prosecute civil rights cases by criminal indictment. But the idea that the federal government -- that it’s the federal government’s job to transform the nation’s police departments should be offensive.

 

The idea that the feds always know best what to do should be offensive. It was not the Justice Department and consent decrees and monitors that gave us those record low crime rates. It was state and local police, and it was a historic boon for civil rights. Thank you.

 

Prof. Robert Percival:  I like going last because it gives me a chance to respond to things that have been said before. As Judge Branch indicated, way back in 1987 I wrote an article on consent decrees in the same symposium issue on consent decrees at the University of Chicago legal forum that Mike McConnell published his article “Why Hold Elections?” arguing that consent decrees fundamentally undermine democracy.

 

In that article I said that the longstanding public policy favoring settlements -- that consent decrees simply made those more enforceable. They’re not a form of legislation as Jesse said. They’re a means of enforcing existing law. I noted in that article that the Meese memo, which was actually kept in place by the Justice Department, had made minor changes that made it so that they weren’t doing things that infringed on democratic principles.

 

Now, Jesse indicated that when Merrick Garland in April withdrew the Session guidance on consent decree he promised that there would be 120-day review and that he had heard nothing since then. Well, let me tell you what they did do. In fact, exactly 120 days later on August 13th, 2021, the Associate Attorney General issued the report that Attorney General Garland had asked for. And in preparing this report they conducted more than 50 listening sessions with stakeholders, including current and former monitors, state and local officials, police chiefs and national law enforcement organizations, civil rights advocates, community leaders and academics.

 

These listening sessions—I’m quoting from the memo—“revealed a remarkably consistent story. Most felt strongly the consent decrees had acted as the primary catalyst in transforming the state and local agencies in which they were used. Many recognized that consent decrees provide state and local governments with a stable long-term plan to reform agencies and departments and, in the law enforcement context, to rebuild trust between law enforcement agencies and communities they serve.”

 

They looked at a number of studies of police consent decrees that showed that they had not only reduced the incidents of illegal activities by the police but also improved community relations. The memo stressed that the Justice Department wanted to learn and evolve from past practice, and it recommended some very specific changes that I think respond directly to the criticisms Jesse was making. Here are the principles for dealing with monitorships of state and local government entities.

 

First, monitorships should be designed to minimize the cost to jurisdictions and to avoid any appearance of conflict of interest. How? Cap monitor’s fees. Decrees should include an annual cap on monitor’s fees. Second, encourage use of pro bono time, reduced rates of nonprofit organization and academic institutions. Third, explore alternative fee arrangements. Fourth, restrict lead monitor participation in multiple monitorships. Second principle, monitors must be accountable to the court, the parties, and the public. How do you do that? First, collect public input during monitor selection.

 

Second, impose term limits subject to judicial reevaluation and reappointment. After the first two or three years, consent decrees should build in a procedure for assessing the monitor before any reappointment can occur. Fourth, make monitoring documents publicly accessible. Another principle, monitors should assess compliance consistently across jurisdiction. A fourth principle, sustained, meaningful engagement with the community is critical to the success of a monitorship. You should first select monitors who will prioritize stakeholder input. Second, require consistent local feedback. Third, modernize monitor communication strategies by encouraging among other things the use of social media so the community can follow what the monitor is doing.

 

Final principle, monitoring must be structured to efficiently move jurisdictions into compliance. Monitorships must be designed to incentives the monitor and the jurisdiction to move towards compliance as efficiently as possible. How do you do that? Require a hearing to assess termination after no more than five years. Jesse talked about how some of these decrees have been in existence for many, many years. Unfortunately, that’s because some of the problems, like environmental cleanups and the mess EPA had with the initial implementation of the Clean Water Act that generated the Flannery decree that ultimately was actually embodied into legislation when Congress amended the Clean Air Act -- they’re really difficult to deal with. And it takes a lot of time. Encourage use of partial termination provisions, prioritize project management skills in monitor selection.

 

So the conclusion of this memo was monitorships have proven to be vital tools in upholding the rule of law and promoting transformational change in the state and local government entities where they are used. Andrew may not like the word “transformational,” but some of the police abuses in these departments are so great -- in Baltimore where I teach, the cops -- some of the cops were actually totally corrupt, arresting people so they could rob them. And it was only when the federal government came in and indicted them and ended up several of the cops went to prison that the rot that was in that police department started to be cleaned up. And a consent decree, it’s not perfect. It hasn’t completely solved all the problems, but it has at least provided hope for improvement.

 

Exactly a month later on September 13th, 2021, the attorney general Merrick Garland said in a memo “The Associate Attorney General has now provided and I approve a set of principles for the use of monitors in civil settlement agreements and consent decrees involving state and local governmental entities.” So the Biden administration is trying to learn from history, responding to some of the criticisms that have been made about what’s  happened in the past and is working to ensure that we develop a more efficient system of enforcing the law, enforcing constitutional norms, and particularly increasing community confidence in the agencies of state and local government that they deal with. Thank you.

 

Hon. Elizabeth “Lisa” Branch:  I know Robert said he loves going last because he gets to respond to everybody, and not to take that position away from him, but I would like to open it up to the panel. If there’s anybody that would like to respond to another panelist, please feel free to do so, and I know Jesse has something to say.

 

Jesse Panuccio:  Yeah. So I’ll respond to that. So I did realize actually before it got to you -- I’ll note that -- that I had missed Associate Attorney General Gupta’s memo. In fairness I see the date that it was made public I was on my honeymoon in Hawaii with my lovely wife who’s here. So I think I’ll be excused for missing it, but I do have some responses to that.

 

So one, you have to look carefully at what’s said there. I am sure -- I would be curious to know who the interested stakeholders were that DOJ invited because I guarantee you I could find some who would not have been overwhelmingly effusive about the process of consent decrees in their agencies. I worked with many of those state officials as a state official for many years. But if you look carefully at what the memo says, it doesn’t actually include any term limits.

 

It says, well, there should be a process for thinking about maybe having the judge impose a term limit if the judge finds the monitor’s not doing a good job. Well, guess what? That’s what judges are supposed to be doing right now. That’s what they are supposed to have been doing for the last 40 years of monitorships. But in practice, it never happens. It never happens because these consent decrees are overwhelmingly long, and judges don’t want to deal with them. So they hand it off to the monitor.

 

The other main issue is it doesn’t deal with the root cause problem of monitors which is who the heck is a monitor to exercise essentially government power? They haven’t been elected by anyone in the local community. They haven’t been appointed by any responsible government official in the local community. And so the Sessions memo said this. “Just as it would be extraordinary for a federal agency to consent to the use of a monitor to oversee it’s operations or policies, in most cases there is little reason to expect or require a state or local government equally a democratically accountable entity to do so.”

 

And so the Sessions memo said, look, if you DOJ lawyers can’t oversee this consent decree yourself, then maybe you shouldn’t be having this consent decree. And that principle is gone and not in the new principles announced in the Gupta memo.

 

Benjamin S. Wolf:  So, Judge, I’d like to respond to that just briefly. I’ve had mixed experience with monitors. In one case the judge fired a monitor and actually the parties under the supervision of the judge negotiated a structure where we created the Children and Family Research Center at the University of Illinois and funded it to produce data on child welfare outcomes and how our clients were doing. We learned enormously from them over several years. And they were extremely helpful, and their work still goes on even though most of it isn’t anymore about the consent decree and those issues.

 

In other cases, monitors have been terrific in my cases. The key is you need a way not to just have lawyers in the room making decisions about how to fix a government system. So if monitors can bring in law enforcement expertise, if they can bring in medical expertise in the case of issues involving healthcare in prisons and in foster care systems, if they can bring in expertise in organizational change, which is something lawyers think they know about and they think if they change a rule everybody’s going to do better -- you know, pass a rule saying, oh, the case workers in the foster care system should do a better job -- oh, that’s great. That’ll make a big difference.

 

You know, the real problem is much subtler and more complex, and you have to try different things and measure the outcomes. When it’s done right, bringing expertise and measuring outcomes but not creating a command system where the monitor’s word is law -- which is not typical in my experience -- it can be very important and well worth the investment. Sometimes it’s not. I want to respond to one thing about crime rates too that Andrew said. Crime rates plummeted all over the country in the late '80s, '90s and early 2000s. Some of those places had broken windows policing. A lot of those places didn’t.

 

Correlation is not cause, and it’s very important to think analytically about these issues and what really produces change. I looked somewhat closely at that in the Chicago police context. And I’ll just tell you it’s hard. You know, there’s literature that suggests that changes in the amount of lead in pipes, reproductive choice for women who don’t want to have a pregnancy, real estate values -- San Francisco had a huge drop in crime rates because people couldn’t afford to live there if they were poor. And that happened in New York too to some degree.

 

It’s important to look at these issues in a nuanced way and particularly now with all the attention to crime rates happening again because there has been -- we’re nowhere near where we were in the '60s and '70s. But there has been an increase. It’s really important in the context of judicial relief and consent decrees on all of these issues not to accept simple answers that look to correlation and not more subtly at cause. Thanks.

 

Andrew McCarthy:  Yeah. I’d just respond to that that I’m all for nuance. I think the best way to do nuance is not to have a one size fits all solution that’s imposed by a justice department model. It doesn’t surprise me in the slightest that the decline in crime -- generational decline in crime featured different approaches to crime and that there were some things like Compstat which caught on especially in the places that were able to do it.

 

But there were other municipalities that were able to experiment with other solutions and also saw success. I think that’s exactly what we want. We want solutions to these problems driven by the people who were making the decisions close to home who answer politically to the people who’s lives are at stake and whose lives are affected by the policing. So I’m all for nuance. Let’s have as much nuance as we can. If you have 50 different laboratories of democracy, you’re going to have a lot more nuance then you’re going to get out of the Department of Justice.

 

Hon. Elizabeth “Lisa” Branch:  And now, Robert, I will give you the last word.

 

Prof. Robert Percival:  I would like to congratulate Jesse on his marriage. He picked a great place to honeymoon. The point I’d make is I think the approach the Biden administration is taking is that you have to tailor what is done in consent decrees and what level of authority approves them to the individual facts and circumstances. You can’t just have a broad bunch of policy that says, we don’t like consent decrees, so if we have any, it’s got to be approved by the Attorney General or the top officials at the Justice Department. So decrees are much different than others. And in fact in virtually every environmental enforcement action against a corporation, it’s settled by consent decrees.

 

Some of those are enormously complex like the consent decree that settled the BP Horizon oil spill or the consent decree that settled the criminal litigation against the Volkswagen company for intentionally violating our environmental laws by cheating on the testing. And so even during the Trump administration you had consent decrees in environmental enforcement cases. Why? Because they’ve proven to be a very effective tool for enforcement. And when you’re dealing with an entity like a corporation, you can’t just rely on the promise that changes are going to be made and this isn’t going to happen again. In similar fashion, some state and local government entities needed substantial change.

 

And I think the approach of the Biden administration is a good one, and the fact that they’ve signaled that they’re responding very specifically to some of the criticisms that Jesse and others have made of consent decrees indicates that they’re on the right track. And certainly their emphasis on trying to get better community support for the police -- I would just say that the fundamental point I made in that 1987 Law Review article that consent decrees don’t undermine democracy -- Mike McConnell said why hold elections? I would suggest that today there are far more fundamental threats to democracy. And I don’t see a lot of panels at this conference that are addressing those. I wish there were.

 

Hon. Elizabeth “Lisa” Branch:  Thank you. I’ve got just a couple of questions before I’m going to open it up to the audience in about 10, 12 minutes just to let you know. But I’ve got a couple of questions I’m going to exercise my privilege as moderator to ask. Let me start with Andy. Andy, you started by talking about the policing techniques of the '90s. And then you had pivoted to the Department of Justice’s concern about police departments, the pattern or practice of unconstitutional policing. Could the policing techniques of the '90s exist today?

 

Andrew McCarthy:  I don’t believe -- with the assumptions that are informing transformational change I do not believe that the techniques that began to be developed under the broken windows ideas of the 1990s would be possible today. And in part -- I think this is in largest part the models that -- the remedies that were used in the 1990s really were driven by data. And I think they were driven unapologetically by data. And what I fear is that today they are driven not by data but by a political narrative. And to the extent that reality crashes into the political narrative, the political narrative wins. And as a result I think the things that we know would work would have a very hard time being used.

 

Let me just take one concrete example. Stop and frisk which has gotten a lot of attention and a lot of negative attention, and some of it is merited because there are obviously some episodes involved in that where people’s rights were in fact violated. But there’s a lot of people who analyze that from a standpoint of, if you stop and frisk X percentage of people who are a particular race and it turns out that that is over-representative population-wise of other groups that get stopped and frisked, then there’s implicitly a problem when in point of fact the most important thing in crime is offence pattern and offence behavior, not a person’s particular race.

 

And if it happens that there are neighborhoods or even racial groups where offense patterns are higher than others, that is simply a fact of why the crime takes place. And I don’t think that that is -- that’s something that you could recognize in the 1990s. I don’t think you’d be allowed to recognize it today.

 

Benjamin S. Wolf:  May I briefly respond to that?

 

Hon. Elizabeth “Lisa” Branch:  Yes.

 

Benjamin S. Wolf:  There certainly is high crime in some black neighborhoods. But the enforcement of the law has a huge racial component in a lot of big cities that is not just because of crime. I’ll give you one example. In Illinois I could give you 30. Marijuana until recently was illegal to possess and to use, and me and my friend nevertheless broke those laws in high school and college. And that’s one reason I was passionate about representing kids in the juvenile detention center. Black kids were arrested for marijuana possession at seven or more times the rate of white kids in Illinois.

 

And everybody who studies the question agrees that the usage rates were not higher, in fact, because white kids on the average have more money. It’s quite likely that they used a bit more. Same thing with stop and frisk. I mean, treating black people as second class citizens isn’t good law enforcement. We have a consent decree settlement agreement actually involving the stop and frisk practices in Chicago. When we looked closely at it, I mean, people were just being stopped for no good reason.

 

It wasn’t that there was a principled offense pattern. There was nothing except prejudice and sloppiness on the part of many of the Chicago police, not all. There were good stops -- but many. So let’s not ignore the racial aspect of the problem, too. It’s not the only problem. Sometimes my compatriots and allies may overstate it as the answer to everything, and I recognize there are more things involved. But treating a category of people as second class citizens isn’t good policing.

 

Hon. Elizabeth “Lisa” Branch:  Jesse, I have a question for you. When you were at the Department of Justice -- and the consent decree process did exist, but perhaps on a much more limited basis -- but how were cases selected at the Department of Justice? Who approves that selection? How does that work?

 

Jesse Panuccio:  Thanks for that question. I think the answer is who knows? Things are reported. Things come to light. But there is a cadre of lawyers at DOJ whose job it is to go out and find these cases. And so they will I think as Andy said sort of follow a political controversy into a community and say, okay, we’ve got to put out a report to show we’re doing something, and then we’ve got to go in and have a wide ranging consent decree and cut off any local solutions.

 

So when I was there, I think I heard that they’ll get reports from the public or they’ll find things on social media, et cetera. And that’s not -- I’m not sure that’s how local government should be taken over or processed in this country. I think there are deep issues. And we don’t see any process around that. There is no DOJ policy or standard for which cases merit a consent decree and which don’t.

 

And that gets to a fundamental problem, and I think it responds to some of what Ben was saying which is, look, there are real tough societal problems out there -- children in the foster care system, prisoners, racial justice in policing. It turns out that in society everywhere since the beginning of time everybody’s got problems, and they all think they’re serious. And there’s only limited resources of the government to spend on those problems. And some people win, and some people lose. It’s a zero sum game.

 

Now, we in America and our Framers came up with something ingenious so that we could all have a say in how that problem gets resolved. It’s called legislatures elected by the people. And you go to a legislature, and you plead your case. And sometimes you win, and sometimes you lose. And most often you get half a loaf. And everybody feels a little pain, and we disperse it throughout the society.

 

But what happens in these consent decree cases is one group that gets represented by a powerful public interest firm like, say, the ACLU or some other gets a stranglehold on those resources and gets to say, we get 100 percent of the resources that we need to solve our problem. And if anybody else isn’t politically powerful enough to get one of those groups behind them, too bad, so sad, go to the legislature and see what you can get. But you’re not getting a federal court to demand the resources for you. And to me, that is just undemocratic, and it goes against the fundamental way we solve problems in American democratic society.

 

Hon. Elizabeth “Lisa” Branch:  Robert, I mentioned and you also mentioned your 1987 article about federal consent decrees. How have your views changed over time, and do you have any concerns now that you didn’t have then?

 

Prof. Robert Percival:  Well, I know a lot more about consent decrees than I did then. I think it was actually the first academic article I ever wrote. I was just in the process of joining the University of Maryland to start their environmental law program. And one thing that sort of stung me was I was sort of personally attacked by Mike McConnell who suggested that I had been involved in the Flannery decree that he was attacking in his article and just trying to feather my own nest. I had no involvement at all. My group had signed on as one of the many groups that supported the litigation, but it was NRTC who brought that. And I was working for the Environmental Defense Fund.

 

And there’s been sort of a steady evolution that the concern back then was undermining democracy. And I think that’s almost laughable compared to the current concerns about very real things that are undermining democracy. Then back in 2012 I testified before a house committee on sue and settle. The concern there was that the Obama administration would enter into collusive settlements with environmentalists in order to do things that wouldn’t otherwise have been able to do under the statute. And I pointed out all the safeguards against that, and it just didn’t happen.

 

This morning’s Wall Street Journal has an op ed from Peter Wallison saying  maybe sue and settle is coming back because of the controversy over whether or not the Justice Department will agree to damages awards to parents who were separated from their children. I would say the most important piece of evidence that sue and settle is not back in the environmental context is the Juliana litigation where a group of children actually at the end of the Obama administration sued the Justice Department with a very novel complaint. They said our substantive due process rights have been denied because the federal government’s done nothing about climate change while promoting use of fossil fuels and that we have a constitutional right now and in the future to have an environment free of the dangers of climate change.

 

The Justice Department in the Obama administration fought that tooth and nail, as did the Trump administration. Now that their lawsuit was rejected by a panel of the Ninth Circuit on standing groups on the redressability prong of standing, the plaintiffs have filed a motion to amend their complaint to say they no longer want the court to direct reductions in greenhouse gas emissions; they just want a declaration that we have this substantive due process right. And they were ordered to enter into settlement negotiations with the Biden administration.

 

The Biden administration refused to settle with them. And just this week the plaintiff’s issued a press releasing saying that negotiations have broken down. So I think that -- it’s almost like the war on Christmas coming back that people get all exercised about these things and it later proves just simply not to be true.

 

Hon. Elizabeth “Lisa” Branch:  Robert, I think Jesse again has something to say.

 

Jesse Panuccio:  I’ll just respond on that. Yeah, it’s not a panel necessarily on sue and settle, although consent decrees are essentially sue and settle often for the other side. I mentioned those political incentives at the local level. But I’ll just say this because I can’t resist. To use the Juliana litigation as an example of sue and settle not coming back, the underlying legal theory is so patently absurd that no lawyer could bring themselves to say I would settle a case like that. I think the fact that the children of the world have a substantive due process right to have a federal judge oversee omissions is probably a step too far even for the Obama or Biden Justice Departments. But I promise you sue and settle is on its way back because all of the other memos we put in place to stop that have also been withdrawn, which is a panel for another day.

 

Hon. Elizabeth “Lisa” Branch:  All right. We’re going to turn this over to audience questions, and I can already see my friend Mike is on his way up there. Just as a quick reminder, if you’re addressing it to a specific panel member, please let us know. If you would say your name and if you could ask the question and not do the speaking question, that would be helpful too.

 

Michael Buschbacher:  Michael Buschbacher from Boyden Gray Associates. My question I think is primarily for Professor Percival. You mentioned that consent decrees are about enforcing the law. But going back to 1986 the Supreme Court said in the Firefighters case that in fact consent decrees can have things that not only are beyond what the law would allow if you litigate a judgement but can even go against what you could get there.

 

And so what I’m curious about is with that level of flexibility -- and that’s how it works out in the environmental context, for instance, with supplemental environmental projects which everyone agrees are things you cannot get if you litigate to judgement. With that flexibility built into the law it seems to undermine that point, and I’m curious for your thoughts on what limits exist and why they exist and whether the Supreme Court is right in the Firefighters case and why.

 

Prof. Robert Percival:  Okay. With respect to supplemental environmental projects, when I was first asked to be on this panel, the first thing I said is, is it in person? And I was so pleased they said yes. The last time I was on such a panel I was speaking in Adelaide, Australia in March 2020 at a conference of the International Network of Environmental Compliance and Enforcement. And it was just as the Jeff Clark memo on supplemental environmental projects was about to be issued.

 

And the various experts on environmental enforcement from all over the world were puzzled. Why is the U.S. wanting to eliminate supplemental environmental projects? In Australia they’re called EUs, for environmental undertakings, because they essentially are designed to mitigate the harm that’s been done by an environmental violation by doing something that’s going to help correct the harm that had been caused by the violation. So I thought Clarke was kind of out there -- well, I won’t talk about his subsequent activities, but in that memo and that it’s a good thing that they are being restored.

 

Now, as you say, the courts have held that you don’t necessarily -- that details that are in the consent decrees could go beyond what you might be able to get in litigation. I submit that consent decrees -- we’ve evolved a lot from the initial effort to desegregate the schools that confronted judges in almost a weekly basis with what is this agency supposed to do? Do we have busing? Do we have all these other measures to try to desegregate the schools?

 

Now, consent decrees are a tool that can help judges in an enforcing things such remedy and constitutional and statutory violations. And I believe the Department has been pretty careful in both Democratic and Republican administrations in not trying to use consent decrees as a vehicle to feather their own nest but trying to tailor them to how do we remedy specific violations. And that may require things that you wouldn’t necessarily get if you just left it to the judge to make all these decrees.

 

Hon. Elizabeth “Lisa” Branch:  All right. My friend Mike is up next.

 

Mike:  And so as a friendship request I will personally just ask a question. All right. So could each of you talk a little bit about backdoor examples of packing consent decrees? Because it cuts both way. My experience with the FTC -- I’m not a lawyer. I negotiate against them. I just walked away because they wanted a gag order and cookie cutter -- 20 years -- everyone was 20 years. There was no negotiation. It was take it or leave it. And so what have you seen that you’ve tried to backdoor in this race or seen that’s been trying to backdoor to defend the defendant or to help the government’s position? Because I don’t think they’re really cookie cutter.

 

Jesse Panuccio:  Maybe I don’t quite understand. You’re asking whether the defendants in these cases sometimes get provisions that they want into the decrees?

 

Mike:  Well, in my personal opinion that’s kind of rare. But I was trying to be fair. My opinion is it gets jammed down our throat, and it’s a gun to your head to take it or leave it because it’s cheaper to leave. But I’m trying to be more objective than that.

 

Jesse Panuccio:  I think it depends what you’re talking about. If you’re talking about a consent decree with a private party, as with any federal prosecution the choice for a defendant is often this or something worse if we go to trial. Now, I will say for consent decrees the worst is usually going to be major fines or prison time, not necessarily -- because the DOJ, in my view, could not get most of these structural things that they want in litigation to judgement because the law doesn’t authorize it. And that’s the big problem.

 

Now, with state and local governments it actual does work both ways. It might have been Ben or Bob who said this, but a lot of times these governments want very prescriptive things now in there. I mentioned this in my comments. One of the reasons the local enter these decrees is the controversy is political, and once they say, we have a decree; problem solved, they can just say, it’s off my plate, and now I’m running for my next thing; and that won’t hurt my election anymore. So you do get defendants assenting to these probably when they shouldn’t.

 

And it’s a huge problem. I mean, as a former state official who came in and had to deal with legacy decrees, you’re basically handcuffed. I remember quite clearly when I went to work for the governor of the third largest state in the country and we had all these ideas on the environment or this and that. And I said, sorry, we can’t do that because 35 years ago one of your predecessors who’s no longer alive entered a consent decree. What is that? It just doesn’t make any sense in terms of government.

 

Benjamin S. Wolf:  I don’t know much about the FTC problem that you alluded to. I apologize --

 

Jesse Panuccio:  How fortunate for you.

 

Benjamin S. Wolf:  But there’s something I want to say broadly responding to the next -- the first two questions. The right and the problem of violating a foster kid’s right to minimally adequate care and not to be in dangerous conditions or a prisoner’s right to healthcare doesn’t tell you how to fix it. And actually some of the conservative literature makes this point effectively, I think. And I agree with it.

 

So very often remedies have to reach into things that are not necessarily the direct application of the right. I mean, if all you did was remedy the right, you’d just have a declaration saying they’re violating somebody’s rights; figure out how to fix it and submit a plan. And there are some decrees that are more like that. And I actually don’t think that’s so bad. The defendant gets the first opportunity to try to fix it. They usually fail, and then you work with experts and try to figure out how to fix it more subtly. Those things inevitably involve something a judge after a trial wouldn’t order in the first place, but the process would emerge that way.

 

For the critics of consent decrees, I would ask -- I mean, I think the Prison Litigation Reform Act pretty much gave you everything you want in terms of restrictions on the scope and duration of consent decrees and judgement. In prison litigation -- and I do prison litigation along with other things. And the statute has had a significant effect on pro se prison filings, and we can debate the merits of that. I think they lost some good ones, but they also lost a lot of frivolous ones I admit. I don’t think it’s had as much effect on class action litigation of the kind that I do. A defendant can move to terminate the whole process after two years if you have a consent decree and make the plaintiff reprove liability.

 

But the problems are hard. And my cases at least, yeah, we can reprove liability. We have court appointed experts or our own consulting experts if the problem is still there. And defendants don’t even file that motion because the constitutional problem and the human suffering is still there. They don’t want a court to have to hear all that and the public to have to hear all that. So in some ways, the notion that these things last forever or that they’re inappropriate restrictions on state and local discretion is disproven by the experience of the Prison Litigation Reform Act. I don’t mind the Prison Litigation Reform Act most of the time, except the low attorneys fees and a few things, because I can prove liability 10 years into a case. If it’s not still bad, what am I doing? So that’s a total digression from what you were trying to find out about.

 

Mike: That’s all right. I wish the FTC was outside of that.

 

Andrew McCarthy: To go back to the Minnesota example -- and my point is the one that Jesse’s made much better, which is that you’re going to have a sweeping resolution or a sweeping prescription on the basis of a very finite, narrow problem. If what is the trigger for having a consent decree ultimately -- or some kind of a resolution in Minnesota is an incident involving use of force where on a fairly interesting, dynamic criminal law episode a police detention that starts out legal evolves into criminal assault because excessive force is used and despite all of the testimony in the trial where the one police officer -- one police expert after another says, what happened out on the street as it evolved is a departure from our procedures, that we train day after day after day and log -- and every single cop has a schedule that he or she has received this training day after day after day. 

 

If that’s going to be the trigger for a pattern or practice investigation -- and I do think -- we haven’t talked too much about this, but I think part of the problem with the pattern of practice investigation is that when Congress put it into the law in 1994 there’s no objective metrics for what triggers it. They can just decide, you know, we think we need a pattern of practice investigation. If you’re ultimately promulgating settlements that are 300 pages long and 799 paragraphs long, then you’re not dealing with a narrow issue of excessive use of force even assuming the proof that came out at the trial suggested that it was necessary to deal with that issue in some kind of a supervisory, systemic way.

 

So I can’t speak to environmental litigation because I don’t know enough about it or the FTC or even your prison experience. But what I see happening time after time after time with police and law enforcement is that a single incident is used pretextually to draft what turns out to be a charter of how policing is to be done. And that is just wrong.

 

Prof. Robert Percival:  I would just point out that consent decrees can be modified. The Flannery decree the court modified it six different times. So if it’s not working the way it’s supposed to -- and in order to be entered, the parties have to agree to it. So if they’re willing to do things that go beyond what a court might order as a violation of law because it would make it less likely that the violation would happen in the future, they can agree to that. And that does happen.

 

Hon. Elizabeth “Lisa” Branch:  Thanks, Mike. Yes?

 

Unidentified Speaker 3:  A conman is still a conman, even if he doesn’t rip off every one of his business associates. And a serial killer is still a serial killer even if he lets one of his kidnap victims go free. As a matter of logic pointing out an exception does not defeat the rule. I’m somebody who does fear that sue and settle is coming back. And my worry is accentuated by the fact that Joe Biden after saying that the reports were garbage -- he then changed his mind I guess after being propped up, given his drugs and being told that Bernie’s back in town.

 

So what I’m wondering fearing that sue and settle’s coming back, is there an argument that’s better than pointing out one solitary example? Because, again, the example does not defeat the rule. And second question is in my view my fear is that the ACLU is joined at the hip with the DOJ. Are there ways to stop that from happening?

 

Benjamin S. Wolf:  We aren’t. We fight with DOJ all the time irrespective of the administration. In my career I’ve sued more Democrats than Republicans. Rob Blagojevich was the worse governor Illinois ever had, not just because he was a crook, although that was a factor. I think the dynamic of DOJ cases is very different than of the kind of cases we do where we represent the actual people who are suffering. And I don’t want to say too much about that.

 

But the one instance of sue and settle that I saw in Illinois where we were looking at possible litigation was the Cook County Jail healthcare case, which, by the way, caused huge positive changes. And the reason the defendants settled right after the suit is because there had been a long DOJ investigation with expert reports that were public. And this stuff should be transparent. References to gag orders always scare me as an ACLU lawyer. And it was obvious the problem was horrible.

 

And so when DOJ sued, they had already negotiated a consent decree. That didn’t strike me as a big problem. I haven’t seen the kind of collusive stuff that it sounds like you fear. I just haven’t seen it. In our cases, we sue and have years of discovery and fights. We don’t settle right away almost ever.

 

Unidentified Speaker 3:  Can you speak to the immigration litigation and giving each illegal alien $450,000?

 

Benjamin S. Wolf:  Well, I think that was just a -- I mean, everybody acknowledged that something horrible had been done. It was just a question of what to do about it. I didn’t work on it. That’s a national ACLU case. Money settlements in cases where something horrible has been done happen all the time. Was that particularly unusual? I don’t think so.

 

Andrew McCarthy:  May I say one thing about that? This will cut against my diatribes against settlement decrees, but I do think that you’re hitting on a different and related problem, which is what to do -- what do the people who are saddled with a problem do when Congress is AWOL on something Congress needs to address? So you have in the immigration context a literal application of federal law that says that people who come in under the circumstances that the migrants we’re talking about come in shall be detained. That’s that federal law says.

 

And then there’s a whole different channel of law that deals with children. And it starts to deal with unaccompanied minors, but because it’s a much more complex problem, those principles end up being extended by courts because they’re not getting any guidance from Congress to accompanied minors or people who present as a family unit. Now, if you -- I think what bothers me and what bothers people who are annoyed by the exorbitant amounts that have been reported in connection with these settlement talks is it’s counterintuitive to think that you can literally apply federal law and have caused tortious emotional harm to people such that should be rewarded under circumstances where they came to the country illegally.

 

And even though there’s a harm, if somebody has to be responsible for the harm, it’s the people who shouldn’t have come here in the first place. But the fact of the matter is the reason we have the problem we have is if you literally apply the law, then you are separating children from their parents. And that’s a fact. That’s what the federal statutes say.

 

Now, whether people should get a payday out of that -- and I don’t mean to minimize. I know that there were terrible damages that was done and emotional harm that was done by virtue of what happened. I saw it myself for 20 years as a prosecutor. Every time we prosecuted somebody for a serious crime, the family was effected, and they were emotionally distraught over it. It’s part of what happens in law enforcement. But I do think a big part of the problem that we’re dealing with here I don’t like all the experimentation that the courts do. I don’t like it when the Justice Department sees a statute that says shall be detained and they decide that they’re allowed to parole people into the country because they’ve let more in than they have housing for.

 

But the fact is if Congress doesn’t step up to the plate and provide guidance in these places in the law where you need guidance from Congress, it’s tough to blame the people who the problem falls in the lap of for groping for a solution, which is, I think, a lot of people in good faith are trying to grope for a solution. That doesn’t mean everyone should get a $450,000 settlement. But a big part of the problem here is political paralysis more than anything else.

 

Jesse Panuccio:  Let me just add one thing here without wading into the necessary controversy, but I think I can tie this question back to consent decrees.

 

Andrew McCarthy:  Oh, yeah. Right.

 

Jesse Panuccio:  The issue that federal agencies were dealing with— the Obama administration, the Trump administration and now the Biden administration— is that in the 1990s the Clinton administration agreed to a consent decree in California called the Flores consent decree. And it now controls this policy. And no federal officer has been able to figure out a way to get out from under that consent decree and have proactive policy change or implement any new policies because every time they try to do something they have to go to a federal judge in California, and they have to go to this plaintiffs group that sued 30 years ago and got what they wanted. And that has led in part to a very difficult policy situation.

 

There’s a lot of other things that feed into it, but at the root of that issue is a consent decree that has not gone away and will never go away. And nobody knows a way out of that box because there’s a federal judge behind it who doesn’t have to answer to anyone and can say, this is what we’re going to do even if the agency officials involved want to come up with a different policy solution.

 

Benjamin S. Wolf:  So there are very conservative principles now post-Rufo in the 90s about modifying consent decrees. And the defendants failed to meet that standard in their effort to modify or get rid of the Flores decree repeatedly. It turned out when you unpacked it they weren’t saying something principled enough to persuade the judge on the Ninth Circuit. I mean, I don’t know enough about it to know who’s right. But there was a real discussion of it, and they lost.

 

Hon. Elizabeth “Lisa” Branch:  All right. And I’m going to introduce the next audience member who is going to ask a question. This is my current law clerk, Seth Cohen. And I’m also pleased as I look around the room I see former law clerks of mine, current law clerks of mine, and future law clerks of mine.

 

Jesse Panuccio:  I was wondering how we got such a full audience.

 

Seth Cohen:  Well, after that, I’m going to hope this isn’t a sophomoric question. So the Constitution permits Congress to abrogate state sovereign immunity to enforce the Fourteenth and Fifteenth Amendment. But as the Supreme Court has told us, even that has limits. And separate sovereignty and equal dignity afford to separate sovereigns does eventually weigh out when factual circumstances change. So I guess in light of Shelby County v. Holder, might there be a constitutional problem with these perpetual consent decrees, both the one that we’re talking about in California and, for instance, the one in Chicago?

 

Benjamin S. Wolf: A problem based on the autonomy of states? Is that what you’re --

 

Seth Cohen:  Yeah. And the fact that the factual circumstances in many of these cases do change over time, even if it doesn’t necessarily produce the remedy that the parties -- to which the parties initially consented.

 

Benjamin S. Wolf:  You want to start, Jesse?

 

Jesse Panuccio:  It’s not sophomoric. It’s a very law clerk question. It’s deep in constitutional theory. Look, I think there are constitutional problems with these. Whether it’s tied into that specifically is interesting to think about. But I think I want to say something related that is related to something Ben said as well, which is you have these federal rights -- so let’s say it was a permissible federal statute that is addressing some constitutional violation.

 

But there’s another dynamic going on, which is -- and it’s the same thing like you have a political dynamic of why local officials will enter these decrees. But the statutes that get sued under are often these environmental or civil rights statues that really don’t solve a problem because that’s not really the business Congress is in. Congress is in the business of solving its political problems. So society gets loud about some issue, and they say Congress must act.

 

So Congress passes some vague statute with standards in it that states need to meet. They don’t fund the mandate, and then they say, go meet it. And then plaintiffs can go out and sue and say you’re not meeting this vague statute that was passed. And then you have to come up with the remedies in court.

 

So there’s a dynamic going on at Congress as well. And I think part of your question would be are those vague statutes that become the basis for the underlying lawsuits themselves constitutional. And maybe the question is, well, you can’t look at the statute itself. You have to look at how they’re applied and practice. And if they’re applied and practiced with a 30 year consent decree that changes over time, maybe the Fourteenth and Fifteenth Amendment do have something to say about that.

 

Hon. Elizabeth “Lisa” Branch:  Anyone else?

 

Andrew McCarthy:  I would just say it would seem to me that the way these litigations go and as Jesse’s pointing out the way the question was teed up, pretty standard cannons of interpretation would sort of push the constitutional problems to the back. So if you can resolve these disputes without having to reach these fundamental questions, that’s what you do. I don’t know that if we were Congress instead of a litigation process dealing with a problem you would like to see them go right to the fundamental problem. But I think the way litigation works it just doesn’t work that way most of the time.

 

Hon. Elizabeth “Lisa” Branch:  Thanks, Seth. And we have time for one more. You’ve been waiting at the back for the longest.

 

Richard Benenson (sp):  Richard Benenson of the Chicago Lawyers Chapter. Thank you for sharing your wisdom with us. I’m curious from a criminal justice perspective -- we talked about the Chicago consent decree. And then shortly thereafter in spring the legislature passed a significant criminal justice reform bill, including standardized police behaviors in the statute. And then in Texas you have the Houston consent decree or Harris County about cash bail abolition for misdemeanor crimes or charges. And then the Texas legislature in special session just passed a significant bail reform.

 

So I’m curious do you see perhaps a positive interplay of consent decrees forcing states to actually address some of these concerns from a legislative perspective, or if the administrative cost of compliance are actually too high to justify what’s occurred in those two specific jurisdictions? Thank you.

 

Benjamin S. Wolf:  Legislatures certainly have the ability to push back. In my experience when they talk about doing that -- and I don’t know the specifics of some of the things you mentioned -- the state authorities who settled the case -- or the local authorities end up telling the facts, and they back off. One example. The director of the Department of Children and Family Services in Illinois who was the defendant in our case -- and there was one director in particular who was very gifted and won national awards and worked with us constructively to fix a lot of the problems and help kids get out of the system safely.

 

Some of the people in the state senate thought that the consent decree was getting in the way of the legislative process, much in the way that everybody talked about up here. So they proposed legislation that any new consent decree that would cost over a certain amount or involve certain kinds of restrictions on state authority would have to be approved by the legislature. The attorney general, who was, I think, a Republican then, the director of the Department of Children and Family Services, and the governor’s office all opposed it and said, we don’t want to have to come to you and have to explain how bad it is and why we’re doing this.

 

I actually didn’t think it was a big deal. Look, if they want to have a trial, we’ll have a trial. But it’s the very people running state government that I think for legitimate reasons don’t want to prolong the process of trying to address these problems with a consent decree.

 

Hon. Elizabeth “Lisa” Branch:  Anyone else? All right. Well, that is going to conclude our panel. I’d like to thank the panelists and the audience for joining us today. And just a reminder that the next convention event you’ll have three panels to choose from. Those events will start at 1:45. And thank you all for being here today.

 

     

 

11:45 a.m. - 1:30 p.m.
Thursday General Luncheon

2021 National Lawyers Convention

East Room, Senate Room, State Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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11:45 a.m. - 1:30 p.m.
The Separation of Powers and Political Polarization

2021 National Lawyers Convention

Topics: Culture • Politics • Separation of Powers
State Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?" The panel discussed "The Separation of Powers and Political Polarization."

Political polarization is a great problem of our time. This panel would consider the separation of powers deformation that is a factor in polarization. Executive branch administrative decisions tend to be more extreme than legislative solutions, particularly when, as is usually the case, the houses of Congress and the President are divided among the parties. Thus, Congress’s delegation of policy decisions to the executive branch results in extreme regulations that can shift radically between administrations, creating government by whiplash. The panel would consider whether institutional restorations, like the curbing of delegation and Chevron, might help in restoring a constitution of compromise.

Featuring:

  • Prof. Neal E. Devins, Sandra Day O’Connor Professor of Law & Professor of Government, William & Mary Law School
  • Prof. Victoria Nourse, Ralph V. Whitworth Professor in Law, Georgetown University Law Center
  • Hon. Ajit Pai, Nonresident Fellow, American Enterprise Institute; Former Chairman, Federal Communications Commission
  • Prof. Michael Rappaport, Hugh and Hazel Darling Foundation Professor of Law & Director for the Center for the Study of Constitutional Originalism, University of San Diego School of Law
  • Moderator: Hon. William H. Pryor Jr., Chief Judge, U.S. Court of Appeals, Eleventh Circuit

Speakers

11:45 a.m. - 1:30 p.m.
A View From In-House

2021 National Lawyers Convention

Topics: Corporations, Securities & Antitrust
East Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?" The panel explored "A View From In-House."

The Federalist Society’s In-House Counsel Working Group presents a panel discussion featuring top in-house attorneys at publicly-traded and privately-owned companies, who will shed light on the current state of corporate law and governance, reflect on challenges they face in day-to-day practice, and present an overview of the in-house legal world to newcomers and experienced lawyers alike.

Featuring:

  • Ms. Katie Biber, Chief Legal Officer, Brex
  • Hon. Mary Beth Buchanan, President, Americas and Global Chief Legal Officer, Merkle Science
  • Ms. Jenny Kim, Vice President of Operations and General Counsel, Philanthropy Roundtable
  • Ms. Carrie Ryerson, General Counsel, Shamrock Foods
  • Moderator: Hon. Britt C. Grant, U.S. Court of Appeals, Eleventh Circuit

Speakers

1:45 p.m. - 3:15 p.m.
IP Law and Culture

2021 National Lawyers Convention

Topics: Culture • Intellectual Property
East Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?" The panel covered "IP Law and Culture."

A perennial debate about intellectual property and culture is how intellectual property laws enhance or restrict the ability of people to contribute to and build a culture. The Supreme Court has described copyright as "the engine of free expression," but criticisms frequently arise when intellectual property law prevents people from using the work of others to express themselves. In the trademark context, recent Supreme Court decisions struck down the prohibition of federal trademark registration for immoral, scandalous, and disparaging marks as a violation of First Amendment speech rights. Some argue that the Court’s reasoning should further be applied to strike down most federal Trademark Dilution claims, which allow brand owners to sue those who use their trademarks in ways that blur or tarnish the trademark. The debate regarding copyright fair use also continues to rage on, pitting the rights of original creators against the ability of appropriation artists and others to use those original works.

This panel will consider these longstanding controversies in light of recent developments.

Featuring:

  • Prof. Lisa Ramsey, Professor of Law & Founding Member, Center for Intellectual Property Law and Markets, University of San Diego School of Law
  • Prof. Robert Spoo, Associate Dean for Faculty Development & Chapman Distinguished Professor of Law, University of Tulsa College of Law
  • Hon. Karyn Temple, Senior Executive Vice President and Global General Counsel, Motion Picture Association; Former Register of Copyrights and Director, U.S. Copyright Office.
  • Prof. Sandra Aistars, Senior Fellow for Copyright Research and Policy, Senior Scholar at the Center for Intellectual Property x Innovation Policy, Antonin Scalia Law School, George Mason University
  • Moderator: Hon. Ryan T. Holte, U.S. Court of Federal Claims 

Speakers

1:45 p.m. - 3:15 p.m.
The Antitrust Revolution?

2021 National Lawyers Convention

Topics: Corporations, Securities & Antitrust
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?" This panel discussed "The Antitrust Revolution?"

The past year has seen an unprecedented number of political and legislative suggestions for altering nearly every aspect of U.S. antitrust law. If adopted, these proposals may redefine the American economy and consumer marketplace. Hear from leading legislators, antitrust luminaries and policy makers about the potential upcoming antitrust revolution.

Featuring:

  • Hon. William Baer, Visiting Fellow in Governance Studies, Brookings Institution; Former Assistant Attorney General, U.S. Department of Justice, Antitrust Division
  • Mr. François-Henri Briard, Supreme Court Attorney, Cabinet Briard LLP
  • Hon. Makan Delrahim, Adjunct Lecturer in Law, University of Pennsylvania; Former Assistant Attorney General, U.S. Department of Justice, Antitrust Division
  • Hon. Douglas Ginsburg, Senior Circuit Judge, U.S. Court of Appeals, D.C. Circuit; Former Assistant Attorney General, U.S. Department of Justice, Antitrust Division 
  • Ms. Diana Moss, President, American Antitrust Institute
  • Moderator: Hon. Chad Readler, U.S. Court of Appeals, Sixth Circuit

Speakers

1:45 p.m. - 3:15 p.m.
"Progressive" HR in 2021: The Solution or the Problem?

2021 National Lawyers Convention

Topics: Culture • Labor & Employment Law
State Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?" This panel explored "Progressive HR in 2021: The Solution of the Problem?"

The average United States workplace has changed in many ways over the past twenty years. The development of modern internet, computers, and smartphones shifted corporate America fully into the 21st century. The changes, however, have not been only technological in nature. New HR practices can now be found in more and more companies, both large and small. In the same way the iPhone modernized how U.S. workers communicate, new progressive HR policies seek to modify several aspects of workplace interaction. Our panel of experts will discuss the school of thought and fundamental reasoning behind these policies, as well whether these changes are helpful or harmful, or something in between.

Featuring:

  • Hon. Sharon Fast Gustafson, Former General Counsel, U.S. Equal Employment Opportunity Commission
  • Mr. Larry H. James, Managing Partner, Crabbe Brown & James LLP; Life Member, Sixth Circuit Judicial Conference
  • Hon. Peter Kirsanow, Partner, Benesch, Friedlander, Coplan & Aronoff LLP; Former Member, National Labor Relations Board
  • Mr. Daniel Villao, Chief Executive Officer, Intelligent Partnerships
  • Moderator: Hon. Paul B. Matey, U.S. Court of Appeals, Third Circuit

Speakers

Event Transcript

Pepper Crutcher:  So a new customer walks into a tailor shop, announces he wants a $10 sport coat. And the tailor says, "You want this sport coat to be made out of what sort of material?" And the new customer says, "Oh, you know." And the tailor says, "Very well then. Unicorn hair it is."

 

      Welcome to a discussion of today's hottest trend in personnel management. I'm sure our panelists will have other things to say about it as well. Before I get further, let me tell you who I am. I am Pepper Crutcher. I'm the Chairman of the Labor and Employment Practice Group, and I am directed to give you two pieces of preliminary information. One, if you're not eating, you're not drinking and you're not speaking, you should be wearing one of these lovely masks. They're available over there on the other side of the hall by the sack full. Thank you very much.

 

      I have the honor to introduce our moderator today, Judge Paul B. Matey of the U.S. Court of Appeals for the Third Circuit. Judge Matey was appointed by President Trump on March 18, 2019. Before his judicial service, he was a partner at Lowenstein Sandler, New Jersey where he practiced complex commercial litigation and criminal defense. Earlier Judge Matey was the Senior Vice President, General Counsel and Secretary at the University Hospital in Newark, an academic medical center and teaching hospital. He also served as the Deputy General Counsel to Governor Chris Christie and as an Assistant United States Attorney in the district of New Jersey, where he was awarded the Justice Department's Directors Award for superior performance. Judge Matey.

 

[Applause]

 

Hon. Paul B. Matey:  Well, good afternoon everyone, Pepper. On behalf of the entire panel, thanks for that kind introduction. Pepper set himself up for the toughest of challenges by opening with a joke. I thought it succeeded, but I'm a poor judge of humor being a judge, so there you go. There you go.

 

      And thanks to everyone at The Federalist Society, including Dean Reuter, of course, for this extraordinary set of conversations. It's such a delight to be back with everyone, friends new and old, in person at this convention. It's always a pleasure to moderate one of these discussions, and I was particularly delighted to join this particular conversation as it touches upon an issue of personal interest to me, an area at the intersection of policy and precedent, social norms and statues, cases, controversies, and careers. I speak, of course, of the age old struggle between corporate HR and in house counsel. Anyone who has ever worked inside a business or advised a corporation know well what I mean. In my time as a general counsel and in my work as a lawyer, it was always a safe bet that the employment matters meant extra hours on the time sheet and extra Advil on the way home, as I think it should be.

 

      As the introduction to this session notes, the American workplace, well, it scarcely resembles the one that I joined some 25 years back. Nearly every expectation once fundamental to work has given way to new thinking, opening up opportunity but assuring well founded concern, concern about how to create working environments, the nature of the firm itself, and who should be at the charge for change.

 

      Law, in my opinion, is the predictable standard that allows for a steady and sure organization. Policy, well, it's the engine of innovation, the catalyst for tomorrow. It's HR versus legal all over the country in a fight that can only have one winner, say some. Or perhaps new solutions or even old solutions can chart a course that balances our commitment to the rule of law with our commitment to betterment of America's economy.

 

      We are fortunate to have three experienced voices on today's panel to help us explore these issues, beginning with Sharon Gustafson, the immediate past General Counsel of the United States Equal Opportunity Commission, where she helped lead the enforcement of Title VII of the Civil Rights Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act. A graduate of the Georgetown Law Center, Sharon is an experienced litigator and councilor representing employers and employees in federal and state workplace matters. We'll begin to today with Sharon's remarks and then continue through the panel.

 

      Sharon.

 

Hon. Sharon Fast Gustafson:  Thank you. I'm happy to be here today. For 30 years, I have been an employment lawyer, representing both employers and employees in the workplace. I have been watching employers operating under Civil Rights laws for a long time. I've been asked to talk about the diversity, equity, and inclusion agenda that is currently taking HR departments by storm.

 

      Reading up on DEI in the workplace, one would get the impression that the DEI agenda is fueled by employer desire to comply with a legal obligation. I can summarize very briefly what the federal employment Civil Rights statutes say about diversity, equity, and inclusion. Nothing.

 

      When I was at the EEOC, I saw eyes widen and jaws drop just a bit when I noted that none of these words appeared in the statutes that the EEOC enforces. Instead, Title VII and related employment statutes forbid discrimination based on race, sex, religion, color, national origin, age, and disability. Far from commanding diversity, equity, or inclusion, Title VII expressly states that it does not require affirmative action where employees of a protected group are underrepresented in the workplace. In fact, Title VII expressly forbids an employer from being motivated even in part by any of these protected characteristics in any employment decision. The Supreme Court has held that even any voluntary affirmative action program is permissible only temporarily and in narrow circumstances.

 

      Whether we should enact statutes that command diversity, equity, and inclusion, is another question. My answer is no, we should not enact such statutes. My opinion does not arise from a denial that diversity, equity, and inclusion can be good. Racial and ethnic diversity are beautiful and beautifully American, whether in the neighborhood, in the house of worship, or the workplace and everywhere else. Nor does my opinion arise from a denial that illegal discrimination still happens.

 

      When I was at the EEOC, we had the case with evidence that black oil rig workers were forced to work outside in the heat, while white oil rig workers worked inside in the air conditioning. In another case, I saw a video tape of an employer defending himself to the police by saying, "I'm a good employer. I mean, I'm not going to hire Mexicans or blacks or homosexuals, but I'm a good employer." The problems persist.

 

      But nonetheless, for two reasons, the law requires and should require only non-discrimination. First, favoring people by identity groups in order to achieve diversity is by definition discrimination. DEI encourages and rewards illegal discrimination. An employer cannot discriminate in favor of applicants or employees in one protected group without discriminating against applicants and employees in other protected groups. An employer giving favored treatment to Hispanics is giving less favored treatment to African Americans, Asians, and everybody else. Such a hiring practice may be well intentioned discrimination, but it is nonetheless discrimination. And when you are on the negative end of it, it hurts.

 

      As Chief Justice Roberts stated in his Parents Involved opinion, "The way to stop discrimination on the basis of race is to stop discriminating on the basis of race."

 

[Applause 00:17:06]

 

Sharon Fast Gustafson:  We can't stop it if we keep doing it. Recently some prominent corporations announced they would achieve a certain percentage of increase in black executives and employees over the next five years. These sorts of quotas mean that employees outside the categories given preferential treatment will be given inferior treatment. Employers should be on notice. Two week ago, on October 28, a federal jury in North Carolina awarded $10 million to David Duvall, a former executive of Novant Health, after he put on evidence that he was fired because he's a white man and his employer was trying to diversify.

 

      Americans believe that we have all been created equal and we must be treated as equals under the law. To be sure, we achieve this aspiration most imperfectly. And individuals, aware of the unfairness of life that is visited some in disproportion to others, should serve those most in need. Contribute to causes designed to level the playing field. Volunteer time mentoring, serving, foster parenting, helping in any way possible. Do it early and do it often. Follow a few disadvantaged children all the way through school helping wherever you can because when those children reach the doors of the workplace as applicants and employees, the law requires that they must be treated as equals with all other applicants and employees without discrimination in their favor. To do otherwise would not only be illegal, it would be misguided.

 

      Consider the Coca-Cola former general counsel who directed the company's lawyers to staff Coca-Cola's cases with a quota of minority lawyers. It is easy to see how such a requirement is not only illegal, but counterproductive. The minority lawyers who were supposed to be helped by such a requirement are suddenly under pressure to put in large numbers of hours working on Coca-Cola matters when they may prefer doing other work.

 

      The second reason the law should require only non-discrimination and not DEI is that law and litigation by their nature are exceedingly blunt instruments. Ultimately the evils and wrongs of the workplace are failures of love. They are at bottom spiritual problems that the civil law can imperfectly manage but cannot cure. The best we can do to remedy discrimination is to pass laws making it illegal and then to diligently enforce those laws.

 

      A third problem with the current DEI agenda is what it omits. DEI discussions make almost no mention of religion, one of the great protections of our legal system, explicitly protected in Title VII. I don't wish that employers were inquiring into the religion of applicants and employees. However, the omission of religious diversity in the discussion of DEI has troubling congruity with the same omission now being made in employer policies about discrimination. Twice very recently I have seen employer discrimination policies that simply excise religion from the list of protected bases. It seems that the current mood, so intent on protecting racial and sexual equity, overlooks the constitutional and statutory protections for religion.

 

      Earlier this year, the same administration pushing DEI on the public shut down the religious non-discrimination work group at the EEOC and put its work product down the memory hole. It is not as if religious discrimination is not happening. Employees who are weekend pastors have been terminated from their day jobs because of sermons preached on the weekend. Alaska Airlines invited its employees to comment on the airline's support of the proposed equality act and then fired to flight attendants who took their offer and raised religious concerns about the proposed law.

 

      Kroger grocery stores fired two long-time religious employees, a cashier and a deli worker, who requested to substitute their own navy blue aprons for store aprons bearing LGBTQ pride emblems. The list of these cases is very long.

 

      When it comes to religious diversity, DEI champions fall silent. Much of what is called diversity, equity, or inclusion appears to be an effort to make everyone conform to thinking the way that those in power think. It appears less tolerant and less diverse than old fashioned non-discrimination.

 

      We live in the best country in the world, but even it is populated by and governed by fallen human beings. Some of hope that when Jesus returns to set up his kingdom, we will see perfect justice and perfect love in the workplace and everywhere else, but in the meantime, we do not live in utopia. Rather, we enact laws that help us approach proximate justice. Non-discrimination and equal opportunity is the best we've got. Even if we could somehow irradicate all discrimination made illegal by our employment statutes and we could achieve perfectly proportioned diversity, equity, and inclusion without violating any of those laws, we would find that we had still not addressed rampant discrimination based on class, education, intelligence, philosophical beliefs, beauty, body size. And that list stretches on, practically speaking, to infinity.

 

      I'm stressing today the inevitable limits of the law, the EEOC, the courts, and the HR departments. If this seems defeatist or despairing, I insist otherwise. Instead, I believe that a futile perfectionism, a demand for perfect equity would distract us from the great good that we have accomplished and must continue to accomplish by opposing unfair discrimination on the basis of race, color, religion, sex, national origin, and disability. Illegal discrimination still exists. I've heard years of employees' stories and I've read the hate speech on the public restroom walls. Nonetheless, Americans have in large part embraced Martin Luther King Junior's dream that all people will be judged by the content of their character and not by the color of their skin.

 

      The Civil Rights laws have been successful, not perfectly successful, but enormously successful in resisting and suppressing such discrimination. Let's not start now discriminating in the name of diversity, equity, and inclusion.

 

[Applause]

 

Hon. Paul B. Matey:  Sharon, thank you for those remarks. It's my pleasure next to introduce Daniel Villao, the Chief Executive Officer at Intelligent Partnerships. Dan brings decades of policy experience, specializing in innovative and accessible workforce design, transforming businesses while adding value. He is the immediate past chair of the National Board of Directors for the Association of Latino Professionals for America, the former Deputy Administrator in the Office of Apprenticeship for the U.S. Department of Labor, and the author of Beyond Green Jobs, addressing diversity and climate change solutions. Dan, it's a pleasure to have you today.

 

Daniel Villao:  Well, first of all, I'm grateful for the opportunity to appear here and chat about DEI and access issues. HR is evolving and, as was just pointed out so eloquently, there's a challenge between the law and what is protected against what the public is demanding because the people of America have embraced diversity in a very real way, but corporate environments have not. So the tension then is how do we evolve into a space that makes sense.

 

      The reality is that what you should probably know about me first is that I'm not a lawyer, so you can use your filter on my words based on that. I am also -- don't come from the pedigree that's represented in this room, education-wise. I'm just a kid from a neighborhood in LA who worked his way up through the ranks. And I have had the privilege of serving both our government and private corporate environments in evolving the opportunities that they generate, both for businesses and their employees, in a way that's significantly meaningful. And so our lens at Intelligent Partnerships is not one of advocacy. We're not trying to create reparations or get our pound of flesh. Our purview is from what makes business sense.

 

      As I shared with the panelists on a previous call, if it don't make money, it don't make sense. And corporate environments are not going to adopt these policies if there's not an interest in the bottom line return on investment and there's not genuine value. And so diversity, equity, and inclusion does make financial sense.

 

      Case and point, a couple of years ago, a few years ago now, State Street Financial spent a lot of money marketing a golden statue that they placed in front of a bull out there on Wall Street. They didn't overnight decide that women needed to be empowered in the marketplace. They didn't overnight discover that the women in their organization were smarter than the men in their organization. What they discovered was that fund performance had a bottom-line level that was managed by women were outperforming other funds. That was recently validated by new data that demonstrates that not only are funds managed by women outperforming traditionally managed funds, but they're doing it in double digits. And so the realities of the math in the business space lend themselves to ensure that you have diversity of thought and diversity of experience in your ecosystem in order to remain competitive.

 

      Those organizations that decide that they want to hold on to their traditional models will experience the pain because the demographic realities also demonstrate significant shifts sooner rather than later. BL's data shows that Hispanic working age adults between the ages of 18 and 45 make up over 60 percent of today's U.S. workforce, and when connected to blended marriages, that number shoots up above 80 percent. And so you have the youngest working demographic, the actual workforce that's available to you, extremely diversified from the historical workforce that has been available in the U.S. and accessible in the normal pools that you fish in.

 

      In addition all indicators point to this same demographic the Latinos' purchasing power topping 1.3 trillion in the next 24 monthsI'm going to let that sink in for a momentnot in the next decade. But by 2023 all indicators point that the purchasing power of the U.S. Latino will be at 1.3 trillion. That is the most powerful statement in terms of earning power and collective market availability that the U.S. has seen in decades, and yet less than six percent of American marketing dollars by corporate America are being spent in attracting that population.

 

      And so if your clients and companies that you represent don't reflect the realities of this evolving market space, you're already in trouble. The opportunity is exponential as, through a reimagined HR model, organizations can also move HR from a fixed cost center to a ROI. As the C-suite and stockholders call for inclusive practices, there's a glaring opportunity to reposition HR in order to make it more productive. The ability to lower cost factors by casting a wider net is real. And yes, everybody wants the Yale or Harvard grad depending on which side of the room you're on, but that pedigree is giving way to technological advances and access to information that doesn't necessarily make it necessary to for employees to a) invest $120,000 in their education for a $40,000 a year job, and b) doesn't require companies to own the employment relationship wholeheartedly.

 

      The other part of the problem, the other side of that coin, is that workers, especially on the lower end of the economic spectrum, workers have figured out that they don't need to give you 30 hours of work to generate the $600 or $800 a week that they would generate in that part time, no benefit employment environment. They could earn poverty wages on their own without you. They could drive a car for a couple of days or go online and work in those environments.

 

      And so the business model of corporate America that has driven wages down collectively for an exponential amount of time is now in jeopardy because "the workforce is not available." No, the workforce is not available at the value that you place on that workforce. So the reason organizations can't find diverse talent is because they're fishing in the same pond that they've always fished in, and you won't catch different fish in that same space. So if your organization is truly interested in diversifying your workforce, you have to expand the spaces that you're looking in.

 

      And the public and the C-suite and stockholders are calling for this diversification because it represents them, not because there's a legal obligation or because there's a need that hasn't been met by corporate America to ensure that there's a level playing field. It's because it reflects our actual society and what it looks like and what is emerging in terms of demographics around the country. And so organizations that ignore that will feel that pain exponentially.

 

      DEI when it's deployed on purpose can be a powerful business advantage. Diversity of thought and experience translates into fresh approaches and new market exposures immediately, making new markets available. Having people on your team that look and have similar experiences to your paying clients that you're trying to attract makes all the difference in the world. And if you don't believe that, just ask Reebok and their experience with Beyonce. It's a genuine, genuine issue that companies are going to continue to face if they don't reflect the dollar that they're trying to pursue.

 

      This is not about only doing the right thing. Yes, it's the right thing to do, but it's not just about that. It's a business imperative. Whatever your organization's position is on DEI, if you're going to engage, you have to do it on purpose. Don't just check the box because that will also cause you to be crucified in the public space. So ensure that engagement is genuine and can be quantified as stakeholders will hold you accountable.

 

      Internal and external expectations are real and have to be taken seriously or the company culture and the reputation will be exposed to risk. These adjustments or combinations to do not mean that the organization has to lower the bar. It simply should look beyond its historical net casting when seeking talent and creating meaningful bodies of work that deliberately deliver on their client promise.

 

      Title VII may codify all the needed language and regulatory protection, or maybe it doesn't codify it according to what I just heard, but the reality is that the real world practices of employers who generate multiple ways to design workforces that mirror their historical demographics has led to measurable wage gaps, separation of professional employment trajectories, false ceilings, and a workforce that today counts the highest number of workplace strikes in the last 50 years, today.

 

      And so workers have figured out that they don't need your part-time, no-benefit job to earn poverty level wages. They can do that without your clients. And that reality needs to be considered before one of your clients closes the door on creating work environments that are inclusive, empowering, and generate real income, or they will go the way of Sears Roebuck and so many other industry icons that cannot read the writing on the wall. That's all I have to say about that.

 

[Applause]

 

Hon. Paul B. Matey:  Dan, thanks for those comments. Finally, Larry James. Larry is the managing partner of the law firm of Crabbe Brown & James in Ohio, a leader in the business, legal, and civic life of Columbus for more than three decades. Larry's practice has included work on behalf of student athletes at Ohio State and since 2001, serving as the General Counsel of the National Fraternal Order of Police. He's also the co-founder of the African American Leadership Academy and a member of the board of trustees at Kenyon College. Larry, welcome.

 

Larry H. James:  Thank you. Good afternoon. It's a pleasure to be here. Thank you on behalf of The Federalist Society. Let me give you the street corner how I see the world and how I got to where I am. My background is I've prosecuted police officers. I've defended police officers. I've administrated for police officers. And now I've been general counsel to the National Fraternal Order of Police since '01. I was also at one time the general counsel of the local NAACP and have been the general counsel of the Columbus Urban League now for 15 years. So I am that perfect mutt, and I've seen the world from 360 time and time again.

 

      I also -- the smartest thing I ever did -- last week my wife and I celebrated 32 years of marriage [applause] and people in central Ohio and somewhere around the country will say that I hit the jackpot. My wife Donna James is the new chair of the board of Victoria's Secret as reconstituted. It's an all woman's board. So Donna had served on the prior board for 17 years, and when the issue came to this, as a black woman, she was trying to figure out was this the right thing to do. And I said, "Number one, are you crazy? And if you love the bacon, don't hate the pig. So embrace it." But so she's been on that, chairing that board since August 1. She's also on Boston Scientific and Hartford Insurance, and she's served on a number of boards. So this issue of diversity, equity, and inclusion, I have pillow talk for 32 years in addition to representing the clients that I represent.

      And the way that I come at this issue, I think we have a failure of leadership. This division we see in American is a failure of leadership. And the idea, I think, about inclusion and whether it makes business sense without hurting someone but helping everyone is the focus I usually approach with my client. And that is number one, let's talk about what we're trying to address. If you got to a physician and you have to articulate what it is that you want that's hurting you and how do we fix it without adding to that pain, that's the same thing in this field. It's educating leadership. It's educating the workforce. It's training the workforce and including the workforce to participate so this is not so foreign or so painful.

 

      Donna and I, dinner conversations are fantastic because we both realize that the older we get, the more successful we get, the more isolated we become, and the more segregated we become. So we have to work very hard at this inclusion thing. And we're both from a family of seven, and we have mixed results in those family of sevens.

 

      But what we both have done, 17 years ago, we started the African American Leadership Initiative in Columbus, Ohio. Now we have over 250 graduates of that program. It's become the feeder system of education, not-for-profit, and the private sector. It is incredible. The Columbus partnership this past year just put in 150,000. And they asked us would we increase it and double it. Why? Because it was filtering and committing to that issue of diversity and inclusion, both women and men. I think that's the type of success we're talking about. That's the type of thing we embrace without the controversy.

 

      You know, when I -- one of the things we talked about this wokeness thing and particularly being a black man in general counsel for the National FOP, I catch hell. And I've caught hell for a long time, including in my household. And what I say to people is when you're looking at the problem to diagnose, the diagnostic issue of the problem is, I say to the world, the union does not hire. It does not fire. It does not train. It does not set the budget. It does not set the policy. But everybody is looking at us as the boogie man. I catch it from The Federalist Society. I catch it from the Cato Institute. I catch it from Ben and Jerry. And obviously, I catch it from the black community.

 

      And I say look folks, we are in this together. And if we don't come together to try to figure it out, and diversify, we are going to create a lot of harm, and down the road it's going to be very painful to cure our ills. I was giving a talk a couple weeks ago, and I said think about this if you're thinking about diversity in the police department. You're dealing with a zip code with a high crime area that's 98 percent black. Your seniority program has only white males to try to address the issue of crime in that zip code. How smart is that? You're not going to -- you're just not going to be successful.

 

      The other thing I didn't tell you, I was also safety director in Columbus over police and fire. And I had the obligation and responsibility of setting that budget, setting those policies, and trying to address those issues. So what I did is I brought in our command staff, and I said look, folks, this is what I'm after. This is what I need. Can you work with me, understanding that you have the union contract? And as a result of being safety director is the reason I became general counsel for the National FOP. Do good. Do not do harm.

 

      The one thing that always puzzles me is this issue of affirmative action and how it became a hot button issue. And I'm finishing my 11th year on the board of trustees of Kenyon College. I chaired the admission committee. I think if you look around the country and you look at the gender gap on GPAs in test scores, women are outperforming men like night and day. If we had a meritocracy, our colleges would being to go 40, 50, 60, 70 percent women.

 

      So I remember being chairman of the board, and particularly where you're doing -- where you have colleges and universities that you need the full pay student. You need the full pay student to generate that money for academic aid. So you were limited, no matter how talented those students were of color or poverty. If you met that goal that you hit your percent of revenue, it could only be spread so far. And I remember saying -- I said my god, the affirmative action baby is the white male, and we need boy toys in order to be competitive so that we keep diversity on the gender side of it.

 

      Then we look at the legacy. I can tell you unequivocally at that college, we did not accept any student who was not qualified to perform. We passed over a lot of students of color because we didn't have the money to give them to compete. And I remember, because as I came in and I did this example of admissions, and people were shocked and said, "Oh my god, I had no idea."

 

      Ladies and gentlemen, what I challenge you to do is really diversify your association because I think again, as I said, as we grow and we are limited at to our exposure and our conversation, it's going to be so much more difficult to get it and set policy. One of the things I do with a lot of our clients is I sit down. We put those programs together, and we say here's our policy. Here's how we're going to diversify. We're going to help, and we're not going to harm. And that becomes your skillset and your test. Because in litigation, at the end of the day, the damage is already done. You're just trying to figure out who's going to get the greatest degree of pain. But if you're building that house, if you're building that policy, you will understand.

 

      I remember when I came home and I told my wife I was going to become the general counsel of the National FOP, she said, "Have you lost your mind?" I said, "We've got to have someone in the room. We've got to participate." And it's not going to be easy. It's going to be painful. But I think the people that we interact with and our law firm interacts with understand what that means.

 

      One of the other things as managing partner I do on the firm on our charitable giving, we demand everybody to participate, to have skin in the game. You do not come to me and say I want to make a 10,000 contribution here if you don't participate. You've got to participate, and you got to stay involved.

 

      The last thing I'll say and the perfect example of inclusion, think about our music industry. Think about our film industry, our entertainment industry. Wil Haygood just came out of a book, just produced a book called Colorization, and we did the national roll out of that book in Columbus, Ohio. And we say everyone goes to the movies. Think about when they came out with Gone with the Wind, Birth of a Nation.

 

      Now, I understand that the law may say, well, you can't give preference. You're damn sure you can't, and you do give preference. We all do. And it's based on our personal preference. The question is, have we expanded our recipe, our taste bud, our vision to be inclusive. I think what you'll find and challenge you will become so much more enriched. It has enriched my wife's life, my life, and my family life. Thank you very much.

 

[Applause]

 

Hon. Paul B. Matey:  I want to thank all the participants for those opening remarks and continue on with some discussion. One of the things that, Larry, you sort of raised powerfully, is a call to action is that we have to figure this out. And I wonder if we could start by talking about what the "it" is in that challenge. Do we have a consistent standard for what is normally referred to as DEI? What is it? Where does it come from? And then, if we want, we can talk about where it might be codified. I know this is something that both Sharon and Dan had thoughts on as well, so I'll open it up to anyone who has a thought.

 

Larry H. James:  Well, I think, again when you're establishing policy, I'll tell you [inaudible 00:48:30] is public private insurance company, and at one point in time we were looking at redlining. And the administration came to me and said, "How are we going to structure these policies? How are we going to train the agents that sell our product to understand that these folks need coverage?" So we sat down, and we looked at the financial portfolio, if you will, and by portfolio I mean that what you qualified for, what your financial scores were, and we retooled that. And we've seen that historically where folks have looked at where there's been disparate impact on a certain constituency whether that's redlining or overcharging in loans and things of that sort. We just need to do an audit and say, "Is it real that these policies are adversely discriminating against a certain group of people?" And if it is, like medicine, you find the solution. You find the solution without having harm.

 

      I was safety director when we had the dual list of women and blacks on fire and police because it has been so bad for so many years. And then it ran its course, and those dual lists were terminated. But I can tell you, if you live in the space, if you associate with people whose job it is to try to figure out what these policies are, they won't be so repugnant.

 

Hon. Paul B. Matey:  Sharon, how would you respond? Do you see this as something that remedies past harms, or do you see a broader mission in modern DEI?

 

Sharon Fast Gustafson:  What Mr. James just discussed in terms of the dual lists for women and for minorities at some point for the police is a good example of how affirmative action can sometimes be done legally. The Court has allowed for temporary measures when you are addressing past discrimination that you can prove. It's apparent. It's kind of obvious that people just haven't been hiring women or haven't been hiring minorities for a long period of time. If an employer is able to show these things and draw and explain the past discrimination that's happened, they may be able to temporarily come up with some affirmative action that passes muster.

 

      But that's not what's being talked about in DEI now in the workplace. I'm sure it's a big world. I'm sure somebody's doing something everywhere, but the situation's I hear about are not situations where anybody is going out and trying to show that we had past discriminatory policies, at least not in the recent past, that women or minorities were forbidden to work in these organizations. And they're not trying to do it temporarily. They're saying let's come up with a way to promote women and minorities at the expense of other people in the workplace. And that's the thing that the law simply doesn't allow.

 

      I think that there are some good suggestions. I did a lot of reading getting ready for this panel just on diversity, equity, and inclusion, online, just seeing what people said about it. And I found that the comments fell in three categories. the first category was good comments people made, but they were nothing new. They were best practices that we've heard forever. Diversify where you advertise, where you seek applications from. Go to historically black colleges. Go to places that you might not have advertised in the past and advertise there too. That's a good thing to expand the breadth of your advertisement. Have blind review of applications. That's a good idea too. Don't do the touch people on the shoulder promotions, but make people apply so you make sure you're considering everybody. All these things are good suggestions.

 

      And then there was what I jokingly was referring to as the word salad things that talk about DEI where I just read it and couldn't figure out what in the world they were saying. And there was a whole bunch of that that I read.

 

      And then there were just the bad suggestions, just the illegal suggestions. Employers need to come up with particular programs and particular benefits for their minority candidates. The law just doesn't allow this. It doesn't work. And if you go back and try to do that, you're going to have to undo -- you're going to have to have changes to the Constitution which provides for equality. You're certainly going to have to have a change to Title VII which doesn't permit race discrimination. So I think people have got to think about ways to do this that are not illegal.

 

      I do think one thing to think about is the BFOQ, the Bona Fide Occupational Qualification. One thing that Mr. Villao was saying is that you're going to miss the boat if you don't try to direct some of your employees to figuring out what the Latino community wants or what the black community wants. That's fine. You can hire people for the purpose of looking at these different marketplaces and figuring out what these different marketplaces want. But you're going to have to be specific in the way you define the job, what the purpose of the job is, and I think you could pass a BFOQ test to say, we want the minorities in these positions because that's what their purpose is here.

 

Daniel Villao:  So I agree with you, Sharon, that the law doesn't allow for the establishment of protocols the way that some people are asking them for. But the interpretation of the law has allowed corporations to do it silently, to create disparate mechanisms and structures that limit the ability to access to work, that limit the supply chain to those that they're comfortable with. And so there's a very -- and the fact that they have resource -- there's a -- and I think this is what you were getting to earlier, Paul. The law assumes a level playing field, that everybody  is starting at the same starting line, that everybody has a genuine access to the playing field and is equipped the same way to maneuver that space.

 

      Let me tell you that I do not come from a poor family. I come from a middle class, working family. I did attend, in my junior and senior years, some private schools, but they were not private academies that led me to spaces where I could get letters of endorsements from senators and move me into the type of academic environments that would have been a much more powerful place. Had that been accessible for me, I would have been a terrible monster and would be significantly more better positioned than I am today. Why? Because that arsenal of tools that comes from that space and from that access at the early stages of the race makes all the difference.

 

      The fact that education is funded through homeownership taxes and that populations are coupled together, the east side looking one way and the west side looking another way, and the value that's generated from those property taxes funds education at different levels, immediately creates a disparate model. And so, yeah, I'm smart. I'm real smart. But I would a lot smarter had I been in an environment or environments that really empowered me and really supported me in a way that was meaningful.

 

      Now, this is not a personal whining session. It's just a reality. It's a reality. The leading generator of new small businesses are Latinas in the U.S. That's the demographic. The math isn't going to lie. Eighty percent of American marriages are blended, whether it's African American, Asian American, or Latino American. The majority of U.S. Latinos are born here in the United States. They're not foreigners that are coming to take your jobs. They're U.S. citizens that are working here and have lived here for generations. My wife is eight generations in as a Latina here. So we've been around for a long, long time, but we didn't start at the same place.

 

      Now, advocates get mad at me too because I say things like hey, it's not about creating a new disparate system. It's about leveling the playing field and making sure that everybody has access. In this moment in this time on this project in this company, everybody plays at the same level, can compete at the same level because white people have to work too. So the fear that is being stirred up in white America, that America has changed and is changing, is real. It has changed, and it will continue to change. And so that economic separation that already exists, that is genuine, has begun to brew discontent.

 

      And for those folks that are -- I've heard all day long about originalists and the original language. We forget that for the first hundred years that original language was not influenced by people of color at all. We didn't have any opportunity to give any input to that established language that has formulated the prison system, the education system, and all other systems, including corporate environments and corporate law in the U.S. So the fact that we didn't get to create any of the rules but have to play by them, and folks are 150, 100 years ahead of us in terms of interpreting them, and now they're getting their feelings hurt because we're figuring it out and the global competitive landscape has emerged in the technical environment in the technology space that allows us to compete for real, makes you nervous. And you should be.

 

Larry H. James:  A couple things. Nationwide Insurance Company, I think most of you are very familiar with, and when I talked about my experience in working with some of the companies, if you look at Nationwide todayI'm going to brag on my wife againthey give the Donna A. James award at Nationwide, and after Donnaand you look at corporate Nationwide today, it's like night and day. I don't know if you want to call it affirmative action, whatever you want to call it, they figured it out. And when they decided to reconstitute that board of Victoria's Secret to go with seven women and no men, that was a discretion.

      The last example was the Ohio Water Development Authority in Ohio. And before Warren Tyler, real good friend of mine, because chairman of that organization, there were no black investment bankers. There were not black lawyers. It had been around for 35 years. It went from zero black folks participating to about thirty percent, and the performance improved. There are absolute discretionary positions that companies have that have nothing to do with affirmative action, diversity, inclusion. They just make up their mind this is what we want our workforce to look at, and we're going to get the best, and we're going to get the brightest.

 

      And so I want to say to you, look at the policies that are working that never see the courthouse, that never see the challenge. Folks, it's going on. Don't get caught up in the technical, legal jargon. I understand that, but again, I'm going to go back to where I started. This is about leadership.

 

Sharon Fast Gustafson:  May I?

 

Hon. Paul B. Matey:   Please.

 

Sharon Fast Gustafson:  It's interesting to me. I know my perspective is just my own. It's small, but in my experience, the employers that I have represented, they are embracing diversity. People are so happy to have diverse people. And the boards that I've been on, on the employers that I'm representing, I just haven't seen anybody trying to keep minorities out of the workplace, trying to suppress women in the workplace. I'm not saying it doesn't happen. Of course, I've admitted it still happens, but I don't think that is the norm.

      And I want to address, in response to Mr. Villao was saying that he grew up in a middle class family, so did I. I grew up in a middle class family in and town of 2,000 people, New Buffalo, Michigan, just an hour from Chicago. I didn't know race discrimination. I can't pretend like I know what life felt like for the black people in my town. But we did have -- we had quite a few black families, many of whom had moved from Chicago to New Buffalo. I said quite a few, but that's not accurate. There weren't very many, but I mean, the basketball team was all black starters on the basketball team, so there were at least that many.

 

      The teachers, the families, everybody taught us we are one. We are unified. The color of our skin doesn't matter. And I just believed them. And I thought everybody thought that. And I never saw -- it was all about unity as Americans and unity as Michiganders and unity as New Buffalo people. Of course, I was just a child, I was only six years old when the Civil Rights Act was passed, but I saw that, and I still look back on that as -- the lunchrooms were integrated. When my kids were going to high school in Arlington, Virginia, and I was over there in the lunchrooms, I noticed more segregation. But when I was a kid, I didn't see segregation. And I think this spirit of unity is important. And I am seeing now with some of this DEI agenda, a spirit of division, and it is not good. It is not a good spirit. We need to reject the spirit of division and embrace the spirit of unity. We are on the same team. We need to be all trying to help to pull each other up. I think that's what most people are doing. We need to give each other credit for that. I agree, we're in this together, and we need to look for ways to solve problems, but we need to it is a way that doesn't violate the law.

 

[Applause]

 

Daniel Villao:  Absolutely. I couldn't agree with you more. And I do -- I have worked with clients that are very -- corporate clients, large corporations that you would recognize their names. I agree with you that there doesn't seem to be an intent of separating by race or of keeping people down. But when you look at the numbers, the reality of the numbers is that people of color, others, make up middle management and below versus executive level positions. The number of board seats for Latina women in the U.S. is less than two percent. It's a reality. I think the figure for African American's is somewhere around three and a half percent. And so states have tried to intervene and regulate this, like California. I'm not sure that that's the right practice. I don't necessarily agree that we need to force people to do this. I think business will figure out that it makes sense, financial sense, to diversity the way your organizations operate.

 

      And so from my perspective, I agree with you. We're all in this together. It's just that some of us don't get to ride on the same bus that others do. And that's the real issue, and until everybody recognizes it and beings to work collaboratively to change that dynamic, I think that there's quite a bit of opportunity to move.

 

Hon. Paul B. Matey:  This idea of collaboration and working together has come up a couple of times now, and so I'm curious whether -- do you see this as something appropriate for state action, government involvement? Or is it something that would more from a local non-governmental solution? In other words, do you see this as a project that is largely something about changing the law or rather changing the way people act with one another so that the law may ultimately be less of a concern?

 

Larry H. James:  I can tell from thewe call it the Columbus Way. And I talked about the African American Leadership Academy and investing in your future. The corporate community has indicated without hesitancy this is where we want to be. We want to be the leading city in the country that embraces everyone and welcomes everyone. This world that people seem to suggest that we're forcing these issues down the -- I don't see it. And believe you me, I'm a Republican. I represent the cops. You know, I catch hell.

       So we've got to produce, and we've got to produce long term, sustainable things. I've earned those stripesI think my wife and bothin this space. We say, unapologetically, "If you want us to be in that black space, we'll embrace it." We write checks, challenge everyone. We participate. We include everyone without exception. When the gay initiative came for benefits, Donna was the HR person, my wife was the HR person at Nationwide. It was one of the first in the country.

       Collaboration. Inclusion. If your team believes in this, I guarantee you, you'll have one of those dinners like we just had with our law firm for the end of the year, where I'm passing out checks, and people going, "Why didn't we do this sooner?"

Sharon Fast Gustafson:  On the LGBTQ issue, if you want to know what it feels like to feel like an outsider who is not embraced, be a religious person who doesn't want to cause any harm to any LGBTQ person, who does not want that LGBTQ person to be discriminated against in the secular workplace, but simply cannot say, "I celebrate this" because that person's religion does not permit them to celebrate it. Even if they don't ever come out and actively say that. They're going to be in training programs where they are forced to say these things. They're going to take training exercises where you have to complete the entire exercise to keep your job, but if you won't say something that violates your religious believes on question three, you can't get to question four. I know of situations where people have had pay docked, where people have been fired from their jobs. You cannot imagine. The new discrimination that is going on that is rampant is against religious people. And I don't want to be whining on behalf of religious people, but anybody who doesn't know this needs to wake up to it. People are losing their jobs. I am getting calls about this and hearing about it right and left.

 

      So the idea that everybody wants to embrace everybody, and we don't know anybody who is not embraced, then you just need to meet a few more people because I'm telling you, this is going on.

 

[Applause]

 

Larry H. James:  Let me respond to that. I want to respond to that because I can tell you every movement without exception has had its conflicts and its cross in the roads, and I agree with you. Two of the most difficult discussions we have today is the vaccination and abortion. Clearly on abortion, that cuts on the religious thing. But that doesn't mean we don't try, and we don't work through it. It's not going be easy. I've said to you, this challenge is painful. This is about leadership.

 

      The head of Nationwide, when we started making the moves and we made -- when my wife made the thing on inclusion on the gay issue, the head of Nationwide was a Mormon, Dimon McFerson, love him dearly. I remember sitting down talking about this issue, and he says, "How do we bridge this gap? I know people in the religious community are going fight it, but we need your help." And it's going take time. And if that discrimination occurs, we don't have all the answers as we sit. But if you don't embrace it, you don't get into the storm. You're not going to find smooth sailing.

 

Daniel Villao:  Yeah. I think the religious exemption is a legitimate beef, and it needs to be explored, and it needs to be evaluated. And every organization is going to review whatever their practices are. But in terms of the original question that Paul asked, should it be legislated or regulated, there's plenty of rules and laws and regulations in place all over the country to do this.

 

      What we don't have is compliance at every level. The compliance structures in this country are designed to be reactive, to be responsive to complaints instead of being proactive and ensuring the organizations are doing what they law requires them to do. You don't hear about the judgments that you described until somebody actually raises the complaint. And there is no design structure and there's no investment by government in actually ensuring that organizations are performing and delivering on the criteria that the law has laid out. And until we address compliance in a real way, the actors are going to do what they do.

 

Sharon Last Gustafson:  If I may just respond briefly to that, you said that we don't hear about this until someone raises the complaint. But I want to note that we don't hear about it even after people raise the complaint. You don't hear about it in the media. You don't hear about it from the EEOC. The Equal Employment Opportunity Commission, which has done such a great job working to defeat all sort of discrimination, a great bunch of attorneys doing a great job on a lot of things, they have completely dropped the ball on this. They are willing to bring religious discrimination claims for a few very narrow categories of cases, if you need a Sabbath day off or if you need to pray at a certain time of day or if you need to wear a headdress or certain kinds of things like that. But the employees who are discriminated against because of their religious beliefs related to abortion or human sexuality, the EEOC has never brought those cases ever.

 

      I ask people, bring me anything. Show me an example. Contradict what I'm saying here. And nobody brought it to me and showed me. The first case that I know is this Kroger case that was brought was when I was at the EEOC, and I got a lot of flak for that. And I'm pointing this out because this is our government. If we really want to protect everybody, then we have to protect everybody. And right now, for reasons I don't completely understand, we have decided certain people are worthy of protection and other people aren't worthy of protection. It's a kind of puritanism that says you people are wearing letter A over here, and you people are the good people. This is not the way it should be done.

 

      We are a pluralistic society. We all know this. We have to be able to put up with it and tolerate people who disagree with us. And I know it's a big world. Like I said in note, there's a lot of people who would do different things, but the religious people that I know have no intention of discriminating against LGBTQ people in the secular workplace. They will work shoulder to shoulder with people. They will embrace them. They will be friends with them. They simply cannot violate their religious beliefs in what they say. As I see it, this is the big discrimination that’s happening right now that's going not talked about.

 

[Applause]

 

Hon. Paul B. Matey:  As we continue the conversation, we want to get everyone involved. There are microphones for questions, and we would be happy to direct those to the panel. In the meantime, while we're sort of getting set up for that, just one last question real quick. Where do you see other practices changing as a result of these kinds of initiatives? We talked a little bit about legacy preferences, the idea the corporations and institutions have typically looked to the same narrow set of criteria, consistent with the law, but perhaps not consistent with best practices. Is that one easy avenue for improvement that you think is getting underaddressed in the workspace?

 

Larry H. James:  So are you talking about legacy in colleges, or...?

 

Hon. Paul B. Matey:  Yeah.

 

Larry H. James:  Well, I think there's -- I think Smith orI can't rememberone of the colleges just announced a week ago that they were terminated the legacy preference. I just think -- first of all, thank you for being here. Thank you for inviting me. I really appreciate it, and I say it time and time again. If we can't sit on these panels, if we can't have this dialogue, whatever the pain of our discussions, we can work through and find a solution. And I agree with you. The religious one is tough. My wife said the other day, "If I'd known that preacher that married us had these ideas, he wouldn't have been marrying us." But those are the type of convictions, I think they have to be pretty closed to principle and absolute. 

 

Hon. Paul B. Matey:  We'll take your questions. Next panel we'll definitely bring in Larry's wife. Does everyone agree with me? There's no question. No question.

 

[Laughter]

 

Pepper Crutcher:  All right. Pepper Crutcher. I'm the chairman of the Practice Group. First of all, I want to say, I promise you that that light back there that went out that put Daniel and Larry in the dark, leaving Sharon and Judge Matey in the light was totally accidental. They tried to fix is the best they can. That, I promise you, was not programmed.

 

[Laughter]

 

Pepper Crutcher:  I got down on my hands and knees back there and tried to find the plug myself. So a response to Sharon and a question for Daniel and Larry. Unlike you Sharon, I grew up in the very segregated south. I was actually there for the James Meredith thing at Ole Miss. And my first memory of this whole issue was I hung out in the kitchen with Georgia, Isaiah, and Willie B. Tankersley and all the rest and the people I loved. My first notice of something was very wrong was when I noticed that they talked to each other in one tone of voice, one mannerism. And when they talked to white adults, they talked in a totally different tone of voice, different mannerism, chose their words carefully. I didn't understand what was wrong, but I knew something was very wrong with that situation. I'm now seeing young white men in the workplace do the very same thing. They speak to each other in one pattern, and when they talk to anybody in supervision, they're acting like they're somebody else. I think there's something very wrong there, and it can't lead to a good place. Daniel, Larry, does that worry you at all?

 

Larry H. James:  Well, you know, when I wasif I could digress a minute, when we were going out to Kansas city for the FOP to get them recognized, and I told our FOP leadership that happened to be all white, I said, "Look, there's a conversation that black folks have when white folks are in the room. There's another one we would have when you ain't in the room. And so there maybe come that time that I ask you to leave." Why are all the black kids eating in the cafeteria sitting together?

 

      So yes, but again, I think this is about our leadership. We have becomeand I agree that we've become somewhat of canceling out certain cultures, and we've become politically correct that if you say thing wrong thing, I'm going to take your head off. Or I'm worried about if I say something, I'm going to be fired. But again, that leadership thing about the supervisors, the executives, we've got to push them to be better and address that issue.

 

Daniel Villao:  I will just emphasize it's not about creating another disparate system. And the American Latino has an opportunity, as the power shifts and they come into leadership roles. They have a tremendous honor and responsibility on how they will lead once the numbers are there. Are we going to learn from the history and the practices our of predecessors and make it equitable for everyone and treat everybody in a way that's meaningful? Or are we going to continue this legacy that exists in this nation of creating opportunity for those that look and reflect our own principles. So it's a very, it's a very interesting time for this country. I know there's more questions, so I'll stop.

 

Andrea Lucas:  Hi. I'm Andrea Lucas, and I'm a commissioner on the EEOC. Like you said, not all of the EEOC is against religious discrimination.

 

Sharon Fast Gustafson:  Oh, good point. Good point.

 

Andrea Lucas:  I will speak up on that point. But on race discrimination issues and DEI, I did want to say that to some degree,  we're talking past each other on the panel about exactly what kind of DEI initiative we're talking about. There's a variety, as Sharon mentioned. I'm particularly interested in DEI related trainings, though. I wanted to get the panel's thought on that.

 

      There's a lot of research that indicates the many DEI trainings actually create racial polarization and don't actually produce the business results that people want. So when we're talking about inclusion practices, perhaps there is a lot of business data that supports a diverse workforce might produce better results.

 

      But in terms of a lot of, I think, what you have some people who have put a lot of money on the DEI industrial complex. And it's not actually the leadership that Larry's been talking about. I think sometimes people do too little. They satisfy thoughts about corporate compliance by passing this or that DEI training, and then they do nothing. Or they engage in over racial discrimination in hiring, and they don't care about retention of workers.

 

      So I do wonder that some of this is really less about DEI training and more fixed by leadership, as Larry mentioned, and actually looking at the workplace culture that you have. Do you have a healthy workforce? And that cuts across race and cuts into class. It cuts into working conditions of employees. You're right, Daniel, that if you aren't paying people a living wage, maybe they don't want to work for you.

 

      So I'd like -- I think people should think about that, and I'm interested in your thoughts. Are some of these corporations doing too little if they're checking the box to do some training or they're engaging in some hiring discrimination on the front end, and then they're leaving their diverse employees to the wolves along with everyone else to an unhealthy workplace and the wondering why they find themselves not retaining women, not retaining others? Well, maybe it's the culture of your workplace.

 

Daniel Villao:  Yeah. I have very clear and direct thinking on DEI training. A lot of it is designed to expose old wounds and not solution based. And I have a problem with that. The fact that I'm rubbing your face in 200 years of bad treatment is not helpful. Again I would say, corporate leadership, government leadership needs to focus on where we go from there. Have there been wrongs in the past, and should somebody address that? I'll let other people debate that. Where is this country going from this space forward? Because we're in a global competitive marketplace where your mom and pop shop in rural Ohio or in Arkansaswhere I just left a bunch of business leaderswherever they are, they're competing with businesses around the world. It's no longer just competing in their own communities. And so your ability to interact in a much broader marketplace now is saturated. And adding this layer of garbage about trying to fix something that you had no control over to me doesn't make sense.

 

      To me, if you're a business leader today, I would not focusI would encourage you, I should say, not to focus on the wrongs that have occurred in the past. If you need to address issues in your organization, you should address them. But the real game is on what happens on a going forward basis. How do you make it fair for everybody, everybody? And I married a preacher's kid, so I do understand the religious issue very clearly as well.

 

      But the opportunity around training is really about helping people learn about each other. I'm going to digress for just a moment, if you'll allow me. My family's from Ecuador, South America. My parents came here in 1963. My mother was a chief of staff for a university professor who was about to launch a campaign to become the president of Ecuador and did eventually win that presidency. She was well educated, came here, because of her accent, even though she spoke English, because of her accent was given a back office job and told not to speak with clients at a very well-known national American banking institution that all of you would recognize. In 1963, she was told that that was a firing offense if she interacted with their clients. And so that's where my parents started.

 

      My father came here as an electrician and was fired on the first day because he didn't know the names of the material and the tools in English. And so from that early beginning, they built a legacy that allowed me to work from a middle class on ramp. And so I've always been the odd man out because in LA in the '70s when I was growing up as a kid, there was black people; there was white people; and there were Mexicans. There was not a big, thriving Ecuadorian community that you could rely on. Ad so my role as a kid, I learned to speak English in the streets of my neighborhood helping other kid splay with each other, convincing other kids that the other person of different background was cool, and they could have fun with them. And I've done that all my life.

 

      And I find myself, ironically, in a business that does the same thing, helping facilitate conversations. And that's what training should do, facilitate a discussion so that people from diverse backgrounds can get some insight on other people's histories, other people's beliefs, other people's knowledge base, other people's experience, and then coordinate how to move forward together so that there's value for everyone. If everyone doesn't win, no one wins.

 

[Applause]

 

Hon. Paul B. Matey:  Let's go to the back of the room.

 

Will Trachman:  Yes. Thank you. Will Trachman with Mountain States Legal Foundation out in Colorado. This question is for Mr. Villao and Mr. James. Do either of your organizations or the organizations you work with use race as a factor when hiring or promoting employees?

 

Daniel Villao:  We do not exclude Anglos if that's what you're asking. But what we focus on is giving people an opportunity that normally would not be looked at, get a second look. So I'll give you a prime example. Early on, yeah, a few years ago, early on in our growth, we were introduced to a young lady who was involved in a training program for disadvantaged young people, had had experience with various government systems, and was very bright when I spoke to her.

 

      What I look for when I'm hiring people, I'm looking for people that are teachable, people that will actually show up to work, that won't embarrass me when I bring them into a client room. I don't need them to be technically capable becauseand we can have a whole other discussion about how you're paying top dollar for candidates that you're going to teach for the first 18 months of their employment on your own internal systems, anywayI don't need them to have the technical capacity. I need them to have the ability to learn and to deliver the outcomes that my company needs them to deliver.

 

      And so we invested in this young person, gave her an opportunity, and today she leads a team and leads teams on some of our highest dollar value projects. She would have never gotten that opportunity had her application been screenedI would challenge to sayin 90 percent of other corporate environments.

 

Larry H. James:  The answer is yes in two very specific situations. I'm a lawyer. I represent clients, corporations, obviously, cops. So one of the areas, as I started out talking about, in those areas where it is a large percentage if not completely black and we have to do an investigation, we're going to need some black folks in order to address that issue. The other area that I suggest to clients and work with them about race is at the college level where they've had no black hirees for ever and ever and ever. And so they're trying to say to parents, to students, "Why should you come to our college or university when you have no one that looks like us and you're losing all those top minority students?" Those are the two areas, and we have been very successful in that, and they haven't been challenged.

 

Tammy McCutchen:  Tammy McCutchen, retired. I guess this is for all of you, but, Sharon, I really identified with what your comments was. We have the old stuff that everybody's still doing forwe didn't used to call it DEIbut the recruitment, the job fairs, the advertising. And then we have the case you mentioned Novant Health which I think is a very telling case, where you have a white executive being fired so he could be replaced by minorities and women in order to meet corporate goals.

 

      By the way, I once told a client like 15 years ago that they shouldn't be basing their bonus calculations on hiring quotas. They told me, "Oh, yeah. We know, but we don't care because we'd rather have the story be $10 million verdict because of reverse discrimination," Right, so they're like -- so my question for all of you, there's got to be something in between what we've been doing for 30 years versus these hiring quotas, these you're going to be fired or you're not going to get your bonus because you have failed to meet quotas for hiring women and minorities. And then of course we have states like California that are actually mandating proportions on boards of females. Where is the leadership, and what's -- where is the solution? There's got to be an in between between the same old same old and these illegal practices that corporations are increasingly under pressure to do despite the fact that they're blatantly illegal.

 

Larry H. James:  Well, let me tell you this -- Go ahead.

Sharon Fast Gustafson:  I think it's partly -- and I don't know the answer, of course. I don't know the answer to all of it. But I do think when you have individuals on an individual basis picking out some talent, just saying a minority person for instance or if women are underrepresented, a woman, and saying I see something there. I'm going to develop that in that person, doing that. I think everybody should be looking for people to help develop. I think that's great.  But I think it has to be done in a way that doesn't violate the law, and it can't be done by the employer saying we're going to give special training to certain people, to minorities, but we're not going to allow the other people to get it. We're going to permit the women to get this training, but we're not going to permit them men to get this training. That's just not going to work.

      I think the solution -- I also think that part of the solution is supposed to be things like Head Start, helping disadvantaged children from the very beginning. We have those program. Maybe we need more programs. I'm not against those. In fact, I'm in favor of those programs. Somebody should think them up and do them. But we've got to get those programs in place and be helping people as their growing up so that by the time they get to the workplace, they can make it without discrimination.

Larry H. James:  I would say look at a company like Nationwide. I think they figured it out, and as a result of what they've done, it has become the magnet for black folks and women to want to work at that company. It's amazing.

 

      I am an affirmative action baby, okay, from college on, and I think it was a good investment by everyone. But the most huge affirmative action baby that I am is the General Counsel of the National FOP because the president came -- and I have some skills, so it wasn't a big risk. But I think he felt -- the way it happened, I had a Supreme Court justice said, "There's this individual running for president of the National FOP, will you support him?" I wrote a check for $1,000, and he gave it to him. And so the president wanted to come over and have a conversation, say thank you.

 

      That five minute thank you turned into a two-hour battle about black folks and cops. And so two-weeks later he calls me, and he says, "Can I stop by and see you?" I said, "Sure." He says, "Listen, I'm unopposed. I want you to be my general counsel, and I am so happy you're black on top of it." And the rest is history.

 

Daniel Villao:  I would just add that HR creates false barriers for itself and part of the reason that this challenge exists in corporate America is because of every company says we'll only hire the highest quality people, and therefore -- why does a customer service clerk have to have an MBA? Right? Because we only hire the best, the most overqualified people, right and then their trajectory only gets them to middle management. These expecta-,-- and I just said that to SHRM leadership in a big conference. So human resource managers don't respond well to you telling them that there's other alternatives. There's other pathways on how to move people into employment systems that don't violate the law and that actually create opportunity and value in a way that's significant and meaningful.

 

      And so you have to be creative. You don't have to exclude white people. We hire white people on our staff. There's Anglos and men and women and LGBT and everybody else. We're a unicorn, I think. But we are a Latina-owned, wholly Latino-owned business. And so we do have that sensitivity, that creating opportunities in our DNA, as a company. And until you embrace that in your leadership circles, the idea that everyone can contribute, you won't see the kind of results that are really productive to your bottom line.

 

Sharon Fast Gustafson: You make a very good point. One thing employers can do is really take a close look at job descriptions and make sure there aren't requirements on there, job qualifications, that aren't really needed for the job. I've seen so many job descriptions that require a college degree where not college degree should be necessary for that job. And that's one of the things that we can do right away is say we're going to be willing to hire people without college degrees because this job doesn't need a college degree. We're forcing everybody through this college system, and we shouldn't be doing that. So maybe that could make a difference for minorities.

Daniel Villao:  Best kept secret -- [applause]. Yes, please. The best kept secret in the federal government is the registered apprenticeship system, the utilization of apprenticeship modeling to help equip employees as they enter new career trajectories. It's powerful, and you can get tax credits depending upon the state that you're working in, lots of ways to bring people into your system.

 

Hon. Paul B. Matey:  We're right up against the clock, but I think we can squeeze in one last question.

Changa (sp):  Thank you very much for sharing all these practical ideas. My name is Changa, and I come from Hungary. I study HR management, and I'm here since the end of August to learn about policy making in the U.S. So I just faced this problem back home in Hungary that oftentimes the big firms actually positively discriminate the people that they are about to hire because they are visibly different than average white person. So they can easily marketing themselves as an inclusive or a diverse company. And there's been conversation about that among my folks back home. So I just wanted to if you could give you point on how the U.S. professionals deal with this problem or if you have this at all?

 

Larry H. James:  Maybe I can conclude. In 1981 I was working for the city attorney's office, and I wanted to apply to Crabbe Brown James. It was Crab Brown Jones Potts and Schmidt at that time. And they were strongly vacillating over whether they were going to hire their first black guy. So one of the associates and I staged this thing where I got a job interview and an offer within 10 days from the highest blue blood law from in the city and went back to them. At that point, I was making $31,500 with the city, the blue blood law firm offered me $39,500. I took the job with Crabbe Brown for $22,500. They were not ready, willing to hire the black guy, but for that price they said you know, whatever. I say that because those are the realities. And if you look at the law field and the change over the last 20 years on the gender women, it's like night and day.

 

Daniel Villao:  There's nothing more powerful than the image of a politician standing next to an African American woman, a Chinese American woman, a Latina that's holding a hard hat and the keys to her first home because of a policy piece that they effectuated and allowed them to move into a high dollar value career. The storytelling is part of the journey. And it's part of the price of admission. It's a fair trade. It's a fair trade.

 

Hon. Paul B. Matey:  As always, the best conversations are the ones that conclude too early, so please do continue this conversation going all week. I want to thank Larry, Dan, Sharon for your exceptional remarks and participation and for all of you for joining us today. We look forward to seeing you during the rest of the convention this week. Thank you again for spending time with us.

3:30 p.m. - 5:00 p.m.
Administrative Inquisitions? How Agencies Initiate, Conduct, and Conclude Investigations

2021 National Lawyers Convention

Topics: Administrative Law & Regulation
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?" This panel covered "Administrative Inquisitions? How Agencies Initiate, Conduct, and Conclude Investigations."

In addition to formal rulemaking and case-by-case adjudication and enforcement, federal agencies have long employed a myriad of mechanisms to influence and punish private behavior. Their civil administrative investigations are unbounded by the procedural constraints of the Administrative Procedure Act, traditional transparency protections, or the redress afforded by timely judicial review. Civil administrative investigations can be not only onerous but also financially catastrophic, especially when the targets are small businesses and individuals. The abuse of agency investigative authority raises significant constitutional and statutory questions. Agencies have compelled information from investigative targets without the warrant the Fourth Amendment would require, and then converted the investigation from civil to criminal. Federal agencies have been imposing draconian conditions to end administrative investigations, like imposing "gag" orders that prohibit the target from disclosing the terms of the settlement, and requiring the target to make payments to agency-designated third parties in lieu of paying the statutorily prescribed fine into the Federal Treasury. These conditions are imposed without affording the investigative target the opportunity to meaningfully challenge the agency’s underlying authority to act or the tactics by which it acts.

This panel will explore the under-researched civil investigative and related activities of federal agencies and engage on their underlying legal authority to so act.

Featuring:

  • Mr. Tyler S. Clarkson, Associate General Counsel, Synthetic Biology Company; Former Acting General Counsel, U.S. Department of Agriculture 
  • Prof. Aram Gavoor, Professorial Lecturer in Law, George Washington University Law School
  • Prof. Richard J. Pierce, Lyle T. Alverson Professor of Law, George Washington University Law School
  • Ms. Susan C. Rodriguez, Partner, McGuireWoods LLP
  • Moderator: Hon. James C. Ho, U.S. Court of Appeals, Fifth Circuit

Speakers

Event Transcript

Hon. Eileen J. O’Connor:  Good afternoon, everyone. Welcome to our next panel discussion. I’m Eileen O’Connor, Chairman of the Executive Committee of the Administrative Law and Regulation Practice Group, which brings you this panel. Before I say a word about that, however, I am moved to acknowledge that today is Veteran’s Day, a day when we remember and honor the service of our armed forces.

 

      Today, November 11, is the day we do this because it was on this day in 1918 that an armistice was reached, bringing to an end the hostilities in what was then known as the war to end all wars and what we now call World War I. And I take this opportunity to read to you a few words from a citation for one bronze medal earned during World War I -- excuse me, World War II.

 

      On one occasion, he led his platoon at the head of a task force into Pressburg, Germany, and despite heavy cannon and machine gunfire, killed 40 enemy and routed the remainder. On another occasion, although wounded while seizing an objective north of Tangeda, he evacuated several of the platoon’s casualties under direct machinegun fire, and then continued to lead his unit in the capture of three villages against severe opposition. Still another time, without support, he led his platoon across the Sal River and fought eastward 18 miles to obtain important knowledge of enemy strengthened positions.

 

      The citation goes on, but those items get the point across. The three-and-a-half-week period during which these activities occurred included the medal recipient’s no doubt unacknowledged 25th birthday. That recipient was Lieutenant Joseph B. O’Connor. Thanks, Dad. God bless you. And God bless all United States military veterans past and present who have defended and continue to defend our great nation.

 

      I have a housekeeping matter to mention. District of Columbia regulations require that each of us wear a mask except when we are eating or drinking. I’m reminded of an observation a bunch of tax lawyers made years ago, and it just made so much sense to me at the time. It said in Germany, everything is forbidden unless it’s specifically permitted. In the United States, everything is permitted unless it’s specifically forbidden. In Italy, everything is prohibited, and everybody does it anyway.

 

      [Laughter]

 

      So I’ve noticed that most people are managing to drink, most of the time having something in their hand that they’re about to drink if somebody notices they’re not wearing a mask at the moment.

 

      Now, back to the matter at hand, this panel is brought to you by the Executive Committee of the Administrative Regulation and Practice Group. Putting together interesting and informative programs on important topics like this one is one of the things practice groups do. If you’re not now a member of one of The Federalist Society’s 15 practice groups but would like a role in putting together interesting projects like this, I encourage you to join one.

 

      The topic of today’s panel is administrative inquisitions: how agencies initiate, conduct, and conclude investigations. And I’m not sure which agency it is that’s inquisitive right now, but that’s all right, I can see. In addition to formal rulemaking and case-by-case adjudication and enforcement, federal agencies have long employed a myriad of mechanisms to influence and publish private behavior. Civil administrative investigations can be not only onerous but also financially catastrophic, especially when the targets are small businesses and individuals.

 

      To what extent are these investigations bounded by the procedural constraints of the Administrative Procedure Act, traditional transparency protections, or the redress afforded by timely judicial review? Our distinguished panel will address these and related questions.

 

      We are delighted that our moderator for today’s panel is the Honorable James Ho of the United States Court of Appeals for the Fifth Circuit. It’s hard for me to believe that this coming January, we’ll see the fourth anniversary of Judge Ho’s ascendance to the bench. Immediately before joining the court, Judge Ho was co-chair of the national appellate and constitutional law practice group of Gibson Dunn & Crutcher. Early in his career, among other demanding posts, Judge Ho served in the Justice Department’s Office of Legal Counsel. This is where I first encountered him, and it has been a great pleasure to watch the progress of his career and continued service to the nation since then. Judge Ho.

 

Hon. James C. Ho:  Thank you so much, Lee, and to The Federalist Society. And good afternoon, everyone. I am grateful for the kind introduction, but I’m specifically grateful that Lee explained that everyone in the audience is supposed to wear a mask because I’m from Texas. And where I’m from, if I saw everyone in a room wearing a mask, I’d be worried that we were being robbed.

 

      [Laughter]

 

      Now, as the moderator today, I am not going to say too much both because we already have a great group, a panel of experts here, and also because my voice is a bit hoarse, so I do apologize for that. But don’t worry, I’ve talked to my doctor. He said it’s not COVID. I’m just allergic to Washington, D.C.

 

      [Laughter]

 

      We’re all familiar with the structural constitutional issues presented when administrative agencies promulgate rules, rules not written pursuant to Article I, by officials not fully accountable to the president under Article II, and subject to only deferential review under Article III. But less attention has been paid to investigations conducted by administrative agencies, investigations not regulated by any law enacted by Congress, not subject to accountability to the president or his cabinet, and not subject to judicial review. Fortunately, the Society has assembled for us today an exceptional panel to explore these particular issues. And after their remarks, we will be welcoming questions from the audience.

 

      Our first speaker today will be Professor Aram Gavoor from the George Washington University Law School, and as I understand—hot off the presses—now the Associate Dean at the law school. He is a nationally recognized scholar in administrative law and federal courts. As a Justice Department litigator, he has appeared in federal district and appellate courts nationwide, and he recently co-authored an article on administrative investigations with Steven Platt, an article that has largely prompted much of our discussion today.

 

      Next, we’ll hear from Professor Richard Pierce, also from the George Washington University Law School. He has written over 20 books and 130 articles about administrative law, and in particular about the effects of government intervention on the performance of markets, and his books and articles have been cited in hundreds of court opinions, including over a dozen Supreme Court opinions.

 

      Next will be Tyler Clarkson, who serves as Associate General Counsel at a synthetic biology company where he handles all manner of regulatory and compliance issues. And he previously served as Deputy General Counsel, Principal Deputy General Counsel, and Acting General Counsel at the U.S. Department of Agriculture.

 

      And then, we will hear from Susan Rodriguez, a Partner at McGuire Woods, where she is co-lead of the firm’s financial institutions industry team. She focuses primarily on government investigations and complex civil litigation. She previously served as a policy advisor at the Department of Homeland Security, and also clerked for Judge Frank Whitney on the United States District Court for the Western District of North Carolina.

 

      Professor, would you like to get us started?

 

Prof. Aram A. Gavoor:  Yes. Thank you to The Federalist Society and Dean Reuter for hosting this event, and to the Administrative Law and Regulation Practice Group, and our Chair, Lee O’Conner, for selecting this panel. And also, I want to personally thank Steven Platt, who’s sitting right over there, if you could raise your hand. He’s the other half of this little outfit in terms of the scholarship that we’re discussing today and for which the panel is based.

 

      So when I wrote my remarks for this, because we hadn’t had one of these in a while, I didn’t realize I’d recognize about 40 people in this room, all very heavy hitters. But for those of you who don’t know the fundamental rudiments of administrative investigations, I kind of view it as the dark matter of administrative law. This happens. It exists. It’s mostly necessary for the parts of administrative law that we are aware of, the stuff that’s subject to positive legal constraints contained in the Administrative Procedure Act of 1946.

 

      And those of us who are experts in the subject matter are actually experts in silos of the subject matter, the financial services experts in investigations, experts for Inspector General’s investigations from the Department of Health and Human Services, experts for the Wage and Hour division for Fail Labor Standards Act violations.

 

      But there hasn’t been a single trans-substantive constitutional account for administrative investigative behavior, and that’s where the questions that I and my co-author are looking to explore in an article titled “Administrative Investigations” that’ll be published in the Indiana Law Journal later this year. So when I say, “Me” or “I,” I mean, “We.”

 

      So imagine that you’re running a small business that facilitates, say, the sale of gently worn children’s clothing on a consignment basis by renting space and using volunteer staff of your consignors as assistants in exchange for early marketplace access. That is among the most benign businesses I can think of.

 

      Nonetheless, also imagine that you don’t live near Washington, D.C. You live in someplace, perhaps, rural, and your interactions with the federal government are usually in the mail -- paper. And then imagine that an investigator from the Wage and Hour Division of the Department of Labor comes knocking on your business’s door, smiling, of course, asking about whether it’s possible to inspect the books for employees just to check and make sure that the FLSA of 1938 is being complied with. Not a big deal.

 

      Just a quick polling of the audience. Good idea to let that person in? No. Well, of course, we know better, but the American regulated public mostly does not. Well, the rubber meets the road, of course, where first, the Hobson’s choice where the investigator’s let in, inspects documents, maybe takes them away to make copies and brings them back.

 

      And then, all of a sudden, a few days or weeks later, you get an enforcement letter for a violation of the FLSA of 1938 with some sort of calculated amount of back wages, which would have a tax consequence that flows from it. You don’t really have many opportunities to challenge it, and heavens, you wouldn’t want to because you’re a small business. You don’t have the resources to handle that kind of asymmetric power relationship.

 

      Or you could choose option B and not let the person in. Then they’ll start potentially insinuating or implying that they have the power of compulsion upon you and that they might come back with some more heavily enforcement-minded demeanor with an express authority to do so. So it’s not a really easy body of options.

 

      Well, this conduct, this behavior happens all the time in the United States, and I’m talking just at the federal level, across many agencies, across with, perhaps, many of your clients. And many of us who have been in federal government understand the sheer power that federal investigative authority lends, not just to engage in what I’d style as statutorily linear investigation of potential violations, audits that are required by the law, but sometimes, and especially when there are few constraints to regulate that conduct of government, it can be punitive. It can be crushing to businesses, to individuals, and it can also cause behavioral change as a function of regulation that did not find its way into the federal register.

 

      So my co-author and I, we hypothesized just this and tried to write the first law review article that covers all of this material. We had to cut about 20,000 words. But the whole and the goal that at least I bring to bear for this interaction is that first, we can all agree upon the fact that this indeed exists. Second, that it is largely unregulated. By the way, it is unregulated by the Administrative Procedure Act of 1946. There are no positive procedures for agency investigative conduct. Third, this presents a problem. And fourth, maybe the areas upon which we can have the rich disagreement that is germane to these panels might be upon the solutions for it.

 

      And hopefully, those of you who are scholarly inclined might do some further research on it. And for those of you who are litigation inclined might find that there could be an appropriate basis to perhaps stand up a little more and engage in something otherwise than capitulation when government comes knocking in semi-legitimate ways.

 

      Our research, the big key of all of this, is that in the mid-20th century in two cases, Oklahoma Press and Publishing Company v. Walling from 1946, the year of the APA’s enactment, and the United States v. Morton Salt, which many of us are familiar with from 1950, laid out a framework that was starkly distinct from the judiciary’s prior engagement with agency investigative conduct and took a very hospitable and deferential approach. And also, did so using, I think, distinctly different factual predicates then than what exists now with a substantially larger federal government with a substantially larger federal bureaucracy and substantially more, perhaps, politicized and policy-oriented investigative conduct.

 

      Well, in so ceding or at least recalibrating the separation of powers from a constitutional law structural perspective, agencies were granted enormous bodies of deference to engage in all kinds of investigative conduct using relatively minimalistic statutory grants, using tactics that many would style as coercive, and having a wide body of discretion that perhaps they really shouldn’t have. Because as we know, government works more effectively when there are limiting principles put into place, when there are guideposts by which the government must comport when it engages in its conduct, and there are opportunities for those who have a grievance with the government to seek redress before the Article III courts.

 

      We lack many of those features in the context of the administrative investigations. So the example I gave, Rhea Lana v. Department of Labor, was a case that I personally was involved with in the litigation on the business owner’s side. And that, I think, is striking because the first case that I mentioned, Oklahoma Press and Publishing Company, was a Wage and Hour case. The other case, Morton Salt, was a Federal Trade Commission case.

 

      And the example that I immediately think of is LabMD, that mid-2010s enforcement action where the Federal Trade Commission, reading quite expansively its own Section 5 authority for data security purposes, investigated a cancer laboratory testing company, a small business, essentially into oblivion. The investigation killed the company, not even in the enforcement action that followed. So this type of conduct undoubtedly strikes me as not sound for a free and liberal society and certainly feels, to my read of the APA, using whatever methodology you prefer, textualism or even purposivism, well off-piste.

 

      So the question then is, what do we do about it? We know that agencies uniformly investigate. And also, I think, from a maximalist perspective — and I think we have some maximalists in the audience — if you just completely shut down agency investigative authority, well, the federal government stops.

 

      I’m approaching it from a more pragmatic perspective as drawn from Supreme Court behavior. If the Court is hesitant to even write off Auer deference by Chevron-izing it into Kisor v. Wilkie, which is almost impossible to meet, it is highly improbable that a significant litigation or two is going to solve this problem. What I think this calls for is principled and strategic incrementalism, especially because I’m living in a reality where Congress is in significant torpor; obviously, the first place we would go to for some sort of a solution to the problem.

 

      So in the context of using the tools that are practically available to us, really, it’s the courts, and there’s a number of different solutions that can be brought to bear. The first would be really pressing back on the Fourth Amendment and the Fifth Amendment predicates from Morton Salt and Oklahoma Press. I think — and of course, I’m constrained by time — there is a variety of opportunities that well-situated litigators and companies that are willing to take the risk, of course, where capitulation takes with it a very high cost, can use to press back. The APA itself, like I said, has very little affirmative regulation positive procedures for agency action of this regard.

 

      Well, first, it’s not technically agency action. It’s sort of pre-action. My definition of it with my co-author is that it is information gathering using any number of tools, CIDs, subpoenas, inspections, and the like, that are in a pre-enforcement, pre-adjudicative context, thus the investigation. Once you’re in the adjudication, you fall within the domain of the APA.

 

      But also, the APAs we have seen with Supreme Court’s 2010’s behavior in the context of 704 reviewability has expanded Bennett v. Spear, and Sackett, and also with Hawkes. So the more that this conduct can turn into something that can be styled as final agency action, that can be a basis for Article III review because ultimately, the goal is, can we get this court to review it? And then to what degree are there limiting principles that the court can deploy to protect the individual liberties?

 

      I suppose the last that within the time constraints I have time to articulate is it’s possible that the Court could also read agency investigative authority more narrowly at a maximalist perspective, apply a clear statement rule with regard to agency positive investigative authorities. But undoubtedly, perhaps, to offer more opportunities for motions to quash or for underlying challenges of the legitimacy of agency conduct based on the stated reason upfront. Thank you very much, and I very much look forward to the rest of the panelists.

 

Hon. James C. Ho:  Professor Pierce?

 

Prof. Richard J. Pierce: Thank you, Your Honor. I really appreciate the invitation from The Federalist Society to talk to you folks today about this important subject.

 

      I’m going to use Dean Gavoor’s article, the article that he wrote with Steven Platt, as my frame of reference in discussing this topic. For those of you who haven’t yet read it, I commend it to everyone’s attention. It’s divided into five parts, and the first four parts are extraordinarily -- well, encyclopedic. They’re comprehensive and persuasive accounts of four different points that I think he makes quite effectively.

 

      First, agency investigative powers are important, and they’re understudied. I cannot remember reading any prior systematic study of agency investigations. Then he makes the point that agencies have very broad powers that are subject to only a few relatively weak limits. I think that’s absolutely right, though I would -- I agree completely that Sackett and Hawkes, two of the cases he mentioned, are really quite important in this respect where the Court showed great empathy for, particularly in these cases, it was farmers whose land had been classified as waters of the United States and, of course, showed a lot of empathy for them and said, yeah, they could get immediate judicial review of the jurisdictional determination.

 

      And those two Supreme Court opinions have rippled all through the Circuit Courts and caused Circuit Courts to be more willing to intervene at earlier stages in agency decision-making processes. So those can be helpful.

 

      I certainly also agree with another point that Dean Gavoor documents well. There is the potential for abuse of these very broad powers and the potential for abusive use of them to cause a lot of damage. In section five, Dean Gavoor gives us a very rich menu of options of ways we might try to address this phenomenon. He uses appropriately cautious language, and I would urge caution in thinking about how best to address them.

 

      I’ve always believed that by far the most powerful law is the law of unintended consequences, and I think it’s important to remember that there are a lot of individuals and a lot of companies that engage in violation of laws that produce a tremendous amount of harm to society and that agencies have a very important function of investigation to determine and identify such violations of law and do something about them. And any additional procedural hurdle or opportunity for judicial intervention in the investigation process won’t necessarily force the agency to divert resources from its other tasks, and that, in turn, will reduce their ability to perform those important tasks.

 

      Now, with that in mind, what I did is I looked at the rich menu of options that Dean Gavoor has in section five, and I have neither the time nor the expertise, frankly, to give you an evaluation of all of them. But I have identified two that I think are particularly promising and then two that I don’t think are promising. So I’ll just describe each.

 

      The two that I find promising are internal separation of functions where the agency enforcement personnel are not allowed to talk with the decision-making personnel, and the investigators are not allowed to communicate with the decision-making personnel. That is a very important principle. Congress included it in the Administrative Procedures Act applicable to any circumstance in which an agency is engaged in formal adjudication, and the Supreme Court in Withrow v. Larkin went out of its way to commend that congressional decision. I think it’s a very important principle and a very important way of protecting interests of regulated firms.

 

      Unfortunately, Congress then created the option of using informal adjudication where there are no such requirements, and so a lot of agencies have that discretion, and they use the less formal, informal adjudication approach with none of the safeguards that apply to formal adjudication, including no requirement of separation of functions.

 

      There is an easy fix for that, and it really relates to the second suggestion in Dean Gavoor’s article that I find promising. That is to get agencies to develop and to issue their own rules that circumscribe their powers, that state very clearly what they can and cannot do -- their personnel can and cannot do in the course of investigations.

 

      There’s a very good recent article in Duke Law Journal by Kent Barnett in which he goes through the process through which an agency can add safeguards that Congress neglected to include in the statute through the rulemaking process, and then those rules bind the agency as well as everybody else. And the fact that the agency makes those rules when it’s thinking about the concerns that are raised by broad investigative powers assures that the agency is going to be looking at them with much greater care in a very different way than when the folks on the ground who are conducting a particular investigation are just potentially carried away by the facts of that case and have a tendency to engage in abusive behavior.

 

      Well, they can’t do that if and to the extent that the agency has previously issued rules that say that they can’t. And you can force an agency to look at that prospect quite seriously by filing a petition for rulemaking asking them to issue such a rule. And if the agency refuses to do it, that’s judicially reviewable. So I think that’s a very promising approach.

 

      Let me just mention two that he suggests that I think are not at all promising. One is that -- he puts it this way, agencies should have rules of evidence. Well, they all have rules of evidence, but most of them are just very, very broad and permissive. I’m guessing he’s talking about what a number of people have urged, that they adopt the federal rules of evidence.

 

      I’ve been teaching that subject for 40 years now, and they’re just totally inappropriate for use in agency proceedings. They’re designed for a jury trial and have no application at all to agency proceedings. I studied that topic in 1986 for the Administrative Conference, and the Conference voted 100 to nothing in favor of a recommendation that agencies never use the federal rules of evidence.

 

      The second one is he suggests that perhaps agencies could be told that they cannot have access to privileged matters. And that, I think, is also not a promising idea. People have been burying incriminating evidence in alleged privileged documents forever. It is a standard technique.

 

      Just to mention a recent illustration of it, Michigan State, when it assembled all of the documents that made it absolutely clear that Larry Nassar was systematically engaging in sexual abuse of the athletes at Michigan State, the response by one of the senior administrators in the meeting when they looked at those documents was, let’s send them all to the lawyers and tell them to claim an attorney-client privilege. Now, of course, attorney-client privilege doesn’t apply, but you don’t know that without going through the documents themselves. So I think that’s also a nonstarter.

 

      But I certainly agree that this is a good time to look with great care at the broad powers that agencies have to try to identify some ways of confining, limiting those powers that will not cause too much problems for the agencies in their ability to carry out their missions. Thank you.

 

Tyler S. Clarkson:  Is this on? Great. I think we got the coach side of the table, so I’m not going to climb in and out near first-class over there.

 

      Thank you, Judge Ho, for moderating today’s panel. Thank you to The Federalist Society for addressing this topic and my fellow panelists for participating. By way of a quick disclaimer, I am speaking strictly in my personal capacity, not on behalf of my employer, the prior administration, or the like.

 

      Aram has laid out the landscape as it presently exists, the academic literature, the case law, and some of the larger problems that administrative enforcement entails. I’ll focus on what I’d suggest are historic administrative law reforms that took place in the previous administration, and when taken together, earlier Republican presidents did not undertake. Part of the appetite for such reform is a testament to the maturation of The Federalist Society and its influence on the debate related to the rule of law, and credit goes to the prior administration and President Trump for pursuing an agenda that didn’t yield to beltway resistance.

 

      Much of the reforms that I’ll recount today are of lower political salience, though of fundamental importance, to the rule of law. Put another way, the political capital required to push these reforms through here in Washington doesn’t necessarily redound to the President’s benefit across the rest of the country. Nonetheless, President Trump issued three separate executive orders that fundamentally changed, at least while they remained in force, the relationship between U.S. citizens and the administrative state.

 

      I will mention the first two briefly, but I will focus more of my remarks on the third EO of importance, the so-called Regulatory Bill of Rights. In October of 2019, President Trump signed Executive Order 13891, which I will refer to as the Guidance EO. The Guidance EO brought sanity to agency guidance practices. As a matter of course, agencies often clarify existing obligations through non-binding guidance documents, which the APA exempts from notice and comment requirements. However, agencies sometimes use this authority inappropriately to try to regulate the public without following the rulemaking procedures of the APA.

 

      Even when accompanied by a disclaimer that is non-binding, a guidance document issued by an agency may carry the implicit threat of an enforcement action if the regulated public does not comply. Moreover, the public frequently has insufficient notice of guidance documents which are only sometimes published in the Federal Register and rarely, if ever, distributed to all regulated parties.

 

      Under the Guidance EO, it was policy of the Executive Branch, to the extent consistent with applicable law, to require that agencies treat guidance documents as non-binding both in law and importantly also in practice. Agencies were to take public input into account when appropriate in formulating guidance documents and to make guidance documents readily available to the public.

 

      Agencies were permitted to impose legally binding requirements on the public only through regulations, that is, through notice and comments rulemaking, and on parties on a case-by-case basis through adjudications and only after appropriate process. Such an approach to guidance has the practical effect of limiting an agency’s potential administrative enforcement authority.

 

      Ensuring an agency sticks to its enabling statute or statutes and notice and comment rules for enforcement purposes has the effect of limiting its jurisdiction. An agency cannot issue a guidance document to expand its enforcement authority and/or apply its authority to an entirely unforeseen circumstance, absent an intervening notice and comment rule. That kind of limitation, though perhaps not the direct aim of a rule of law approach to guidance documents, is nonetheless a desirable externality.

 

      Turning to Executive Order 13892, which President Trump also signed in October of 2019, and I’ll refer to as the Administrative Enforcement EO. In much the same way that the Guidance EO served as a necessary predicate to the Regulatory Bill of Rights, in EO 13924, so too did the Administrative Enforcement EO.

 

      Under the Administrative Enforcement EO, the prior administration set a policy whereby parties must know in advance the rules by which the federal government will judge their actions. No person should be subjected to a civil administrative enforcement action or adjudication absent prior public notice of both the enforcing agency’s jurisdiction over particular conduct and the legal standards applicable to that conduct.

 

      Further, the Administrative Enforcement EO required agencies to publish a rule and procedure that governed administrative inspections. Both of these EOs serve as the necessary foundation for the big step the prior administration took to bring due process and consistency to administrative enforcement.

 

      On May 19, 2020, the President signed Executive Order 13924. The EO aimed to provide regulatory relief to businesses and support economic recovery after the first COVID wave. The so-called Regulatory Bill of Rights appeared in Section 6 of that EO. And at this point, what I’d like to do is just walk you through those protections because I do think they’re responsive to some of what’s been discussed already, and some of it’s been endorsed, others not.

 

      Executive Order 13924, Section 6, the Regulatory Bill of Rights in the first instance, the first protection was that government should bear the burden of proving an alleged violation of law. The subject of enforcement should not bear the burden of proving compliance. After that EO was issued in May, OIRA, on August 31st, I believe it was, issued an implementing memorandum in which, at least with respect to this protection, they suggested that members of the regulated public should not be required to prove a negative to avoid liability and enforcement consequences. Only if a statute requires otherwise should the regulated public face such a burden.

 

      The second protection stated that administrative enforcement should be prompt and fair. And here, in its implementing memorandum, OIRA instructed that agencies should seek approval from an officer of the United States, that is, in most cases, if not all, someone who’s politically responsible, before entering into a tolling agreement, for instance, that would have the effect of extending the statute of limitations for an infraction. In addition, OIRA encouraged agencies to consider a regulation for applying limiting principles to the duration of an investigation.

 

      The third protection, articulated in the Regulatory Bill of Rights, said that administrative adjudicators should be independent of enforcement staff, something we can agree on. And this particular protection in the implementing memorandum suggested that the protection aimed to apply more broadly the ex parte protections contained in the APA for formal adjudications.

 

      The fourth protection stated, consistent with any executive branch confidentiality interests, the government should provide favorable relevant evidence in possession of the agency to the subject of an administrative enforcement action. This, in short, applied the Brady protection from the criminal context to the administrative enforcement context. And here, in its implementing memorandum, OIRA instructed that agencies consider Brady, Giglio, and Kyles, and that agency officials should timely disclose exculpatory evidence to the target of an enforcement. Likewise, agencies should automatically disclose evidence material to the mitigation of damages or penalties.

 

      The fifth protection, which has not been as warmly received on this panel, is that all rules of evidence and procedure should be public, clear, and effective. And here, OIRA strongly implored agencies to seek to reduce the use of hearsay evidence in administrative enforcement adjudications, and that agencies should generally require the application of the Daubert framework to determine the veracity of scientific evidence. Agencies should make their rules of evidence and procedure easily accessible on their websites.

 

      The sixth protection was that penalties should be proportionate, transparent, and imposed in adherence to consistent standards and only as authorized by law. Agencies were instructed here in the implementing memorandum to establish policies of enforcement discretion that decline enforcement or the imposition of a penalty when the agency determined that the regulated party attempted in good faith to comply with the law. The OIRA implementing memorandum here also directed agencies to make the public aware of conditions in which investigations and enforcement actions will be brought and to provide the public with information on the penalties sought for common infractions.

 

      The seventh protection was that administrative enforcement should be free of improper government coercion. And here, OIRA encouraged agencies to consider protections that would guard against retaliatory or punitive motives or the desire to compel capitulation. Such things should not form the basis for an agency’s selection of targets for investigations or enforcement actions, or other investigations, enforcement decisions, or the like.

 

      The eighth protection in the Regulatory Bill of Rights stated that liabilities should be imposed only for violations of statutes or duly issued regulations after notice and an opportunity to respond. Here, OIRA encouraged agencies to consider that in any document initiating an investigation or enforcement action, an agency should include a citation to the statute and regulation asserted to be violated and an explanation as to how the asserted conduct is prohibited by that statute or regulation.

 

      The ninth protection was that administrative enforcement should be free of unfair surprise. And the tenth protection was that agencies must be accountable for their administrative enforcement decisions. And here the implementing memorandum stated that in addition to the substantive mandates of the APA, the initiation of investigations and enforcement actions should carry the structural protection of requiring approval of an agency official who is an officer of the United States, again trying to introduce some measure of political accountability.

 

      And so I know this was not -- to provide a little context here too, this was not something that in the EO that was issued bound agencies to initiate rulemaking on. It strongly encouraged department heads to consider whether these principles of fairness ought to be applied in their administrative enforcement contexts, and OIRA sort of doubled down on that, albeit still not in a fashion that bound agencies. And so, between the summer of 2020 and the fall of 2020, we found ourselves largely in a position where we didn’t have adequate time, I think, to do this in the way that it should be done. I’m happy to talk about that some as we get into Q&A, but with that, happy to yield the floor, too.

 

Susan C. Rodriguez:  Well, I’m very grateful to Tyler for setting the precedent that we could sit down and speak to you all because I was wondering how I’m going to get over there gracefully without falling off the stage here. So thank you.

 

      I’d first just like to say just what an honor it is to be here with an esteemed panel on this important topic. Just before we stood up, I told now Dean Gavoor that when I read his article, I felt like I was reading a novel that I was actually living. I see this every day in my practice. And I’ll say, just as Tyler said, these views are my own views and not that of my employer or my clients. But as we were preparing for today, I promised the panel that I would bring the practitioner’s view with several examples or case studies, if you will, that I’ve seen over the years.

 

      As Judge Ho mentioned earlier, I practice in the area of government investigations, and I often see when there is a civil investigative demand or administrative government subpoena that seems very innocuous at first, and then suddenly we are faced with a criminal investigation.

 

      So here’s a few things I’d like to go through. First, I’m going to talk about the Consumer Financial Protection Bureau, the CFPB. There’s two things that I would like to talk about here, first, the civil investigative demand, CIDs, and then using enforcement actions to create rules outside and circumventing the rulemaking process.

 

      So it’s been really interesting. I don’t know if anyone else in the audience has sort of followed this CID process with the CFPB. Obviously, the CFPB has only been around for a few years, so it’s really easy to study that evolution. Most of you know a CID can be issued by the CFPB to companies, or a witness compelling them to produce information, or to submit to an interview with the CFPB.

 

      Now, there is the Consumer Financial Protection Act of 2010, of course, authorizes the bureau to issue these investigative subpoenas when it’s looking at violations of law. And the CID, as we all know, usually is the signal of a start of an investigation. Perhaps you’re the target, and sometimes if you’re lucky, maybe you’re just a third-party witness. We’ve seen both. But these CIDs are incredibly burdensome. Sometimes I’ve seen requirements to provide whole databases of information within just a two or three-week timeframe. There’s little room to negotiate with the CFPB enforcement attorneys.

 

      In the early years of the CFPB, companies and banks wanted to challenge the scope of these CIDs but were disincentivized to do so for numerous reasons. One, it’s very costly to challenge these CIDs, and, as someone I was talking to earlier thought this was the most important point, you risk upsetting your regulators.

 

      So if you’re a bank or a fintech company, some of your clients are fearful that if you push back on a regulator, there’s a taint that will follow the company or the bank for years that money and litigation cannot repair. For some companies, there are also shareholder considerations. Sometimes your hands are tied, and there’s no appetite to fight back if a matter can be quickly and quietly resolved with a reasonable civil monetary penalty.

 

      Now, I wrote about this back in 2013 when an entity was one of the first to challenge a CID over a privilege issue, and Professor, I’m glad you brought up privilege issues. This was in the U.S. District Court for the District of Columbia. Although this was not the main issue in the case, the court reiterated in a response to a civil investigative demand a recipient may withhold responsive material based on a claim of privilege. And this is the important part. The court noted that the CIDs issued by the bureau are not self-enforcing, and therefore the bureau could not have compelled information without a court proceeding in which a claim of privilege could be asserted.

 

      Now, for us in the room, this may not sound very far-fetched. Now, this sounds like common sense, but at the time, this was a groundbreaking thought on CIDs. When you compare that also, some of you may be aware of 12 U.S.C. 1828(x). In the supervisory capacity of the CFPB, they actually can review privileged materials.

 

      So let me just say that again. The CFPB can actually review your privileged materials. It’s very similar to the privilege that the OCC has, where they can also review a bank’s privileged materials. It does not waive the privilege and future litigation, but imagine that. And even though that’s in a supervisory context, I have seen personally enforcement attorneys get together with the supervisory attorneys, and they share information. So this is a very concerning thing to look at and to see how that could play out.

 

      Now, to go, Tyler, to what you were saying, this was just before some of the October 2019 EOs that came out, but in April of 2019, the CFPB announced policy changes regarding these CIDs. It announced that the CIDs will provide more information about the applicable provisions of law that may have been violated. So the CFPB promised to provide recipients of these CIDs more information because before, they had been very secretive. Often times when you get a CID, they might not even tell you exactly what they’re investigating, and that’s really troublesome for companies who don’t know why the information is being requested or how to properly defend itself.

 

      Now, I’d also like to talk about RESPA. RESPA is a very interesting case study here, I would submit, because if you look prior to the Trump Administration, there was a trend going on at the CFPB of using RESPA enforcement actions to make rules but not using the rulemaking process. It was very interesting. So before the Trump Administration, about a third of all enforcement actions at the CFPB were RESPA-related. As you may recall — the Real Estate Settlement Procedures Act, by the way — RESPA carries both civil and criminal penalties.

 

      So I vividly remember an interview with the CFPB where I had an individual, and he had accepted some Super Bowl tickets, and we had to make a judgment call. Do we reveal this to the CFPB because, technically, that would be a violation of RESPA? But RESPA just doesn’t have civil penalties. It has criminal penalties. And as all good CFPB attorneys at the very beginning of those investigative interviews, it’s very intimidating because they will recite the 1001 rule to you and remind you that if you give a false statement to the government, there will be consequences.

 

      Now, thankfully we made the right call in that case. We did not get referred over to Department of Justice for criminal prosecution, but that is just some of the things that you’re facing with RESPA.

 

      Now, another interesting thing is some of you all might remember back in 2015 there was not a proposed rule, there was no commenting, there was no final rule. Instead, in 2015 the CFPB issued a bulletin on marketing service agreements and RESPA.

 

      Now, what was interesting about this is this came about on the heels of several enforcement actions, so you might remember Lighthouse, NewDay, and others. And it basically warned the industry that was using marketing service agreements -- that is, if I want to advertise or jointly market and I am a provider of a settlement service, for example, a lender, I have to be very careful about partnering with title companies, home warranty companies, and others. If I have an agreement with them to provide advertising services, I need to make sure that I’m not paying them improperly for referrals.

 

      Now, some of you all might remember this ended up at the Supreme Court, but I would like to not even go to the Supreme Court so far but actually talk about the D.C. Circuit and the PHH case. I’m sure some of you all closely followed that action. Ted Olson argued that case, and it was really interesting because there was -- in the D.C. Circuit when they heard this, it was then Judge Kavanaugh, now Justice Kavanaugh, was talking during oral argument and questioned whether the CFPB gave fair notice of its interpretation of RESPA and alluded to the widespread understanding in the industry that the MSAs were legal under prior HUD guidance if you followed certain rules.

 

      And then this was my favorite part, in a colorful comment Judge Kavanaugh, now Justice Kavanaugh, analogized the CFPBs sanction of PHH to a police officer saying, “You can cross the street here,” but then gives you a $1,000 ticket when you get to the other side.

 

      After all of this happened, some of you who follow the CFPB might remember last fall at the end of the Trump Administration, they came out with some new RESPA guidance which were just questions and answers. Again, no rulemaking or anything like that, but they were questions and answers, and they finally did rescind that 2015 bulletin that most of the industry had been following.

 

      So I’ll conclude with the CFPB, and I’ll move on to another example which I think is really interesting. It comes from my time when I was at Homeland Security, and I still do a few of these now, but ICE subpoenas. So everyone probably knows if you have ever worked for a company, you have to go in and on the first day of work you complete your Form I-9. Does everybody remember doing that? So you submit your passport or your driver’s license, social security card, your birth certificate.

 

      And for those of you who follow that, there’s about an 80-page handbook that the government issues on compliance with Form I-9s. And if you fail to comply, the government can come in, they can do a Notice of Inspection, and they can fine you for every single paperwork violation. So if you’re completing the form and the company inadvertently leaves off the driver’s license number, you can be fined about $240 to about $2,400 per Form I-9. Kind of interesting to think about.

 

      But here’s where the interesting part comes in. ICE can issue a Notice of Inspection, and that is part of an administrative summons that they issue to the company. They can actually come into the company without prior notice, provide this administrative summons, and here’s what they’ll get in return. They can request your Form I-9s, and if you keep copies of every one of your employee’s driver’s license and security cards, they will get copies of all of that too. They can ask for your tax records. They can ask for your payroll records. They can ask to interview you, and they do so.

 

      And so you can see how this can start out as a civil investigation. But if you have maybe a landscaping company where you’re down in Florida, and you happen to have maybe some workers who aren’t work authorized but submitted fake documents, well, maybe the company didn’t know about it, but you are now being looked at in a criminal capacity. Did you know or did you not know that you may have been employing unauthorized workers?

 

      So you can see how a so-called innocent administrative subpoena and summons can quickly turn into a criminal investigation, and nowhere at the beginning of this inspection did you have any Fourth Amendment rights. And we’ll talk about some of this. That’s at least ICE’s position when that happens.

 

      Now, the reason I said that when I read your article, Dean Gavoor, I loved that he had a footnote on the Department of Justice Immigrant and Employee Rights Section. This used to be the Office of Special Counsel. Some of you all may know it by that. But now it is called Immigrant and Employee Rights Section, IER, part of the Civil Division.

 

      Now, they have the power to investigate, and I wanted to tell -- this is public. It’s in a published decision. It’s an administrative decision. But I once had a company where they came to me, and they had received an investigation, a subpoena where they needed to provide a lot of information. They had to provide all of their I-9s and submit to numerous rounds of interviews, and it was all because an individual had complained that the company had asked for a copy of a social security card and followed up outside of the Form I-9 process.

 

      So this little section at DOJ has the right to investigate potential discrimination, but they are bound by a statute that includes who are protected individuals, and that should contain their jurisdiction. That’s under 8 U.S.C. 1324(b). However, in this particular instance, DOJ kept investigating, and ultimately, they ended up fining the company for a conduct that was totally unrelated to what they were originally looking for.

 

      Ultimately, the individual ended up suing, in an administrative complaint, the company. And I got to argue that the DOJ investigation should have never happened because this particular complainant, this individual who complained, was not protected under the statute. They did not fall into the statutory definition of a protected individual. And you query whether or not the Department of Justice should have ever been investigating in the first place because it was easy to find whether or not he met the definition of a protected person or not. He did not. We successfully argued that through an administrative panel.

 

      But I will say, unlike the example that I used with ICE and the summonses, the Department of Justice Immigrant and Employee Rights Section has a more robust administrative process that you can follow to sort of challenge these things. They have an administrative law body that I went to, and that’s where this published decision, which is buried somewhere on OCAHO’s website, that you can find that talks all about this.

 

      And interestingly, if I had lost at that level, I could have went straight to a U.S. Court of Appeals. I would skip the District Court altogether. So I wanted to say that because I thought to juxtapose the ICE administrative subpoena, where you don’t really have a lot of rights to challenge it, versus the Department of Justice Immigrant and Employee Rights Section, where you do have a more robust opportunity to challenge it, might be interesting as we study this area.

 

      I’ll conclude with just some thoughts on -- I do agree with you that this is an area that needs to be studied. It is very complex and challenging to study, however. FOIA limits really prohibit -- even though sometimes you might be able to get certain information, a lot of agencies will do everything they can to avoid any release of investigative issues under FOIA. It’s often unknown what agencies and bureaus are doing in this area, and you only know about it from practitioners or professors. There’s little by way of statistics out there on this topic.

 

      I’ve also considered the judicial option, and we’ve talked -- somehow, those have been successful today, but I do struggle with this option. There are challenges. It’s a catch-22. I think most of us in this room probably agree that judges ought to be bound by judicial restraint. There’s a precedent for deference to agencies, and so how do you address it with that backdrop? Maybe when we talked about the civil to criminal investigations, perhaps the Fourth Amendment is a way to do that.

 

      I’ve also thought about the congressional solution, and that might work, but I think that really needs to be studied more, and we need to consider what might happen. I guess be careful what you wish for because if you did go the congressional solution, it might not turn out so well.

 

      So with that, thank you so much for allowing me to be here. And we’ll look forward to the Q&A portion.

 

Hon. James C. Ho:  So while we wait for any members of the audience to approach -- I think we have some microphones around the room. While we wait for that, I do want to invite members of the panel to respond to one another to the extent that there are any. Professor?

 

Prof. Richard J. Pierce:  Thank you, Your Honor. Just briefly, in response to Susan, as I recall, the third example -- the last of the examples was a pre-Sackett and Hawkes situation. And Sackett and Hawkes would give you the tools necessary to keep that from happening today, so that’s an illustration of how those recent opinions can be valuable in this context.

 

      The other thing I want to say about Tyler’s remarks, I was just -- just to put this into perspective, I was harshly critical of a lot of the regulatory actions that were taken during the Trump Administration. So when those three executive orders came out, I read them with an entering attitude of skepticism and concern, but after reading over them a couple of times, I said, "No, these are just fine."

 

      They’re actually -- I think they’re quite carefully drafted. I’d say 90 percent, at least, is just codification of existing laws. I read them. I was jotting down quickly names of cases or references to cases that supported the principle. The few that were not or are not clearly supported by precedent are just kind of common sense riffs on what courts had said.

 

      And I actually urge somebody to think about it. If you know somebody, a professor who’s looking for an article topic or a student who wants to write a good note, you could take, say, a third of those executive orders and annotate it. Do an article or essay or note in which you say, okay, here’s what this says, here’s the case law that supports it, and go through the whole thing. So I thought it was a useful codification, and I was not generally a fan of the Trump Administration, so…

 

Tyler S. Clarkson:  Appreciate the exception.

 

      [Laughter]

 

Hon. James C. Ho:  Professor Gavoor, I think Professor Pierce did have some criticisms of some of your suggestions. Now that you’re Dean, do you want to comment on your colleague?

 

Prof. Aram A. Gavoor:  I’m not his Dean. I’m just the Associate Dean for Academic Affairs, so I help with the curriculum and part-time faculty.

 

      I think they’re well-stated viewpoints. When my co-author and I laid out the menu of options, obviously, we weren’t going to mention anything that we couldn’t get behind. And I think it’s just a difference of opinion. My view is I’m very dubious of hearsay exceptions. The Court allows for reliable hearsay in administrative behavior in the context of formal adjudication, but generally speaking, I think it’s just a policy preference. Perhaps not all of the federal rules of evidence, but maybe just some of them might be suitable, and I also think administrative behavior from 1986 undoubtedly is very different in 2021, so maybe some of the factual predicates are different.

 

      And then also with regard to access to privileged materials, it’s a hard one because he makes a good point with regard to Larry Nasser. But also, at the same time, Susan makes an equally good point that even if there are rules to allow privileged information, agencies don’t necessarily follow them. So my solution with Steve is why not have a separation of functions, and also have the classic diffusion of discretion that the administrative state has in spades for all kinds of other conduct, and apply that in administrative investigations?

 

Hon. James C. Ho:  Any other comments? All right. We do have time for a question or two, if there are any. The gentleman here.

 

Mike Daugherty:  Hello. I’m Mike Daugherty. I’m not a lawyer. I’m the President of LabMD, who spent 12 years being shredded by the fine Federal Trade Commission. So I’d like to ask Professor Pierce about what’s wrong with having administrative procedures under the rules of evidence and civil procedure, because my experience is that tons of hearsay came in. My lawyers had no experience in those courtrooms with that. The media ran with it. You can’t say, “It’s not true and no one believes you,” and six years later, “Oops, we were wrong.”

 

      And it’s because the whole legal system, when you try to get a lawyer to come into this, you’re like, “I’m in kangaroo court. I don’t know the rules there.” And then you end up in an Article III court anyway. So why do we have to have this circle and confused rule book that only benefits the agency and leaves the poor citizen defendants who have lost a medical facility out in the swamp, so to speak? I tried to ask that gently.

 

Prof. Richard J. Pierce:  So the rules of evidence -- you go through provision by provision. And there are many, many provisions that say what the judge needs to do here is look at the evidence and decide whether the jury should be allowed to consider it because that’s the only point at which you can assure that decision is not made based on extremely weak evidence at the point of admission because once the jury sees it, you have no way in the world of knowing why the jury decided it.

 

      In any administrative case, there is a decision that tells you what they relied on and what they didn’t rely on. That is a much, much better opportunity to sit down and figure out, is this evidence sufficiently reliable and probative to be the basis for this decision? And that’s what courts do routinely.

 

      It makes no sense at all to instead engage in the very, very crude practices that aren’t necessary in the context of a jury trial to make sure that jurors have no access to any evidence that they might abuse in the processes of their decision making. We know that they operate primarily based on emotion. Everybody knows you start a case with the sobbing parents holding the baby who’s been injured on one side and the doctor, well known to be insured, on the other side. The case is over. You don’t even need more evidence than that.

 

Mike Daugherty:  So we should have jury trials.

 

Prof. Richard J. Pierce:  That’s not the case with agencies.

 

Mike Daugherty:  All right. Can I follow up?

 

Hon. James C. Ho:  Please.

 

Mike Daugherty:  So how do you propose, then, you reign in the abusive agencies, because with all due respect, I’ve got tons of transcripts that will show outrageous lying, especially from the Eleventh Circuit Court of Appeals to the FTC saying, “You participated in shakedowns.” Now, the problem is there’s nothing to protect the people that are getting abused by this weaponization of this process until you get to that point. And most people don’t climb justice mountain that far because they’re not crazy like me.

 

      But I can tell you, with all due respect, it is being abused like crazy by the SEC and the FTC, for starters, because they all share the game with each other. So the credibility of the courts has been compromised, and the integrity has. That’s why we have, evidently, annoying things like a jury  because that’s supposed to be by the people. And what happened by not having that protection is we lost a medical facility with 700,000 patients. And now they’re saying, “Sorry, we were wrong. Here’s $800,000.” And see, that’s the type of thing -- that story has to stop. So is there a way to protect from that if we’re not going to allow those rules?

 

Prof. Richard J. Pierce:  Yeah, I don’t know the facts of those cases.

 

Mike Daugherty:  Well, we didn’t have any babies crying.

 

Prof. Richard J. Pierce:  But that’s why judicial review exists. That’s the opportunity to say, okay, this agency did the wrong thing, and so we’re hereby reversing it and vacating it. I know of no better remedy than that.

 

Hon. James C. Ho:  Aram?

 

Prof. Aram A. Gavoor:  If I might add a point, there are two other residual values to having at least some federal rules of evidence grafted upon agency administrative adjudication because they are familiar and consistent standards. So to the extent we can agree upon whether or if some of them are appropriate to graft on, they would then first benefit from the case law and great familiarity among the Article III jurists who are reviewing agency action, which, by the way, the agency findings of fact are deeply deferential under 7062(a) through (e).

 

      And second, I think it would allow greater access to justice, and perhaps more willingness for litigators with general civil litigation background to delve into administrative law issues because it’s not going to be some sort of arcane mysticism that is associated just with one agency or a particular administrative law judge, and it’s going to be more generally applicable.

 

Susan C. Rodriguez:  And I would like to add too. So first of all, thanks for being here. Having many clients similarly situated to you, I sympathize with your position. Hopefully -- it sounds like you did this. You ultimately triumphed in the end. But hire really good lawyers and see if you can clamp down on it at the beginning.

 

      Sometimes I’ve found the most effective thing is lobbying efforts through the agency. Hire folks who know everyone in the enforcement division, and that is the best way to negotiate in the beginning. But when you talk about the federal rules of evidence, I’ve even found I’ve been in even interviews, or really, they’re depositions of sorts, where the attorneys don’t even know the federal rules of evidence --

 

Mike Daugherty:  -- They don’t.

 

Susan C. Rodriguez:  -- because they’re not practitioners, they’re government attorneys. And I was once a government attorney, so no offense there, it’s just sometimes they don’t necessarily know that. And oftentimes, investigations actually start out based on hearsay, and I don’t think that’s ever going to change. You get a tip from a complainant. You even get tips from competitors who might purposely try to get an investigation going to gain a competitive advantage.

 

Mike Daugherty:  Well, I would say FedSoc is what led us to great lawyers, I must say. I came here seven years ago and got pro bono defense, so that’s also great too.

 

Susan C. Rodriguez:  There you go. Good.

 

Hon. James C. Ho:  We have a gentleman in the back.

 

Questioner 2: So traditionally, administrative law judges have been very independent, both in their selection and in their removal. But this has recently been ended by the Supreme Court recognizing that there are offices of the United States as part of the Executive Branch, and therefore appointed by and removal by heads of agencies.

 

      As that happens, do you see that there is a substantial problem with due process where the government is selecting the judge in their own cause, able to remove that judge if they don’t like how they’re ruling, and perhaps moving administrative law judges into being closer to federal magistrates may be a good option for reigning in the agencies?

 

Prof. Richard J. Pierce:  In short, yes. I’m very concerned about that. I’ve written on it extensively. I’ve been looking for the right case to argue on a due process basis, but the problem is in a sense worse even than the way you frame it because in addition to the administrative law judges — there’s what 2,000 of them — there’s 11,400 other judicial officers employed by agencies to perform analogous functions that have no safeguards whatsoever, and that is of great concern.

 

      The article I referred to by Kent Barnett in the recent issue of Duke Law Journal was actually an article written in that context that if we cannot get safeguards through statute or through application of the due process laws, well, at least every agency should come up with rules that provide safeguards for those adjudicative officers so that they know that they’re not going to be fired or demoted or sent to Siberia if they make a decision that offends the government.

 

Hon. James C. Ho:  Last question.

 

Questioner 3:  Yeah, Dean, I was just curious, and I’ll tell you why I’m asking this question. In all your research, did you find an example of where a career person who was perhaps overly aggressive, going beyond whatever boundaries they may have established, was punished in some way for being aggressive in that way?

 

      And the reason I’m bringing that up is we can have all the Trump executive orders or whatever, but it’s all paper in the end because when you’re down at that lower base, very few people have the wherewithal to go up to the courts and challenge whatever that career person’s doing. And the political people are all busy on big stuff. This is not sexy things. Unless you have some kind of penalty that’s associated with violating whatever these norms might be at the career level, it’s all paper, I think.

 

      And the other part is, is there a way to penalize agencies for bringing frivolous cases such as strengthening the Equal Access to Justice Act, which we did on the Hill one time and got a bill through the House, by removing the requirement that a company has to show that the agency’s position was not substantially justified such that the attorney’s fees would be automatically awarded upon the business showing that its position was vindicated.

 

      So you’ve got to penalize the agency for bringing frivolous cases, and you’ve got to have some deterrence, I think, on career people who go beyond the boundaries and are just abusive to the employer community or whoever it is. Otherwise, it’s sort of a lot of paper, and it’s subject to people being able to hire good lawyers to go up to the courts of appeals, and that’s going to be one out of a hundred cases at best. Otherwise, it’s just a lot of talk, and it’s not going to be helping that small guy, I think.

 

Prof. Aram A. Gavoor:  Great series of questions. So the first one is I am not aware of a government bureaucrat in an agency that is not the Justice Department that has gotten in trouble for that kind of conduct. And that’s different from just general ethics violations or stealing money and the like. DOJ attorneys will sometimes get in trouble in defending agency action as they interact with the Article III courts, sometimes unfairly because they just have the case and they have to defend it, and there’s a legal basis to defend it. But nothing of the class that you’re describing.

 

      And I think you’re right in the sense that the term “penalties for agencies” does not have the same effect as a penalty would in a private-sector corporation. It’s not that agencies have a sense of shame or something like that. They just continue to exist. And it’s not like the employee is going to have an adverse consequence for engaging within the boundaries of the employment so long as it’s not outrageous one way or the other.

 

      So I think in terms of providing resources to bring to bear to control Executive Branch behavior, it requires political power oversight in the context of the power of the purse, committees of oversight engaging in hearings. So in the LabMD context, House OGR had a hearing, if I recall, over Tiversa, a data security firm in Pennsylvania that may or may not have referred the LabMD data breach for a LimeWire misuse after they initially tried to get business from LabMD and LabMD said no. So the solutions are not easy ones.

 

Tyler S. Clarkson:  And I’d like to add on that, having been at an agency, I think to the extent that you have -- you need paper. You need rules. You need rules of agency procedure or regulations in place because absent that, there’s no mechanism for holding a career employee accountable. If you have rules of agency procedure or regulations in place, and you have a political appointee, you’ve equipped that political appointee with a cause to discipline that employee. Absent that kind of rule of agency procedure, any sorts of internal procedures of a kind that I think a lot of us in this room would like, it is very difficult to discipline a career employee.

 

      So you need actual rules of agency procedure, you need hand -- not handbooks in the pejorative sense, but some sort of procedure --

 

Questioner 3:  -- It’s a start.

 

Tyler S. Clarkson:  Yeah, there you go -- some sort of procedure internally whereby a political appointee with fortitude can fire or discipline that career employee absent the paper, as you pejoratively characterized it, you’re not in a position to bring down the hammer on a career employee.

 

Prof. Aram A. Gavoor:  And I would also add, I think many career employees of the federal government genuinely attempt to uphold their oath to the Constitution as they engage in their work, but there’s enough of them who don’t, which gives rise to the problems.

 

Prof. Richard J. Pierce:  I just wanted to chime in and agree completely with both your suggestion and Tyler’s important qualification of it, that there have to be rules that you can show were violated. But I’m with you. I think any employee who violates rules in this or other contexts should be punished. And I’ll tell you there is a movement, an interesting movement to extend that way of thinking into criminal law.

 

      We had, for instance, a rather notorious case lately in which a famous actor had his conviction for multiple counts of rape reversed based on prosecutorial misconduct. And I was just looking at a draft of an article the other day where the author is arguing that instead of that punishment — which is not a punishment of the prosecutor; it is a punishment of the public and the victims of the crime — instead of that punishment, there should be a punishment for prosecutorial misconduct. And she looked at a lot of cases involving prosecutorial misconduct and didn’t find a single one where the prosecutor suffered any consequence. In some cases, they actually were praised.

 

Hon. James C. Ho:  Well, that is perhaps a depressing way of closing this panel, but c’est la vie.

 

      [Laughter]

 

      Before I adjourn this session, I’ve been asked to announce that the Scalia reception and dinner begins at 6 p.m., so if you’re planning to attend, you should start to make your way over to Union Station shortly. And with that, please join me in thanking our wonderful panel today.

 

      [Applause]

3:30 p.m. - 5:00 p.m.
Criminal Justice 2021 and The Rule of Law

2021 National Lawyers Convention

Topics: Criminal Law & Procedure
East Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". This panel explored "Criminal Justice 2021 and The Rule of Law."

For many who align themselves with fundamental principles of our constitutional system, the progressive agenda seems to be driven not only by an unreasonable cry to defund police, but a broader assault on the fundamental American precept "ordered liberty" through the rule of law. Meanwhile, those who align themselves with another agenda see these principles as a shield for abuses of police authority, particularly abuses aimed at certain communities, driven by perceived lack of accountability on the part of beat cops and administrators alike.  

This panel will review the Constitutional underpinnings of "ordered liberty" at the state and federal level. It will discuss and consider the criminal justice system's role in both securing liberty and protecting civil rights, including as carried out by police, prosecutors, defense counsel and judges.

Featuring:

  • Mr. Lawrence S. Krasner, District Attorney, City of Philadelphia
  • Prof. Tracey L. Meares, Walton Hale Hamilton Professor of Law; Founding Director, The Justice Collaboratory, Yale Law School 
  • Mr. McGregor W. Scott, Partner, King & Spalding LLP; Former U.S. Attorney, Eastern District of California
  • Mr. Richard Stanek, Sheriff, Hennepin County, Retired
  • Moderator: Hon. Stephanos Bibas, U.S. Court of Appeals, Third Circuit

Speakers

Event Transcript

John Richter:  So let me get this panel started. I'm John Richter. I serve as the chair of The Federalist Society's Criminal Law and Procedure Executive Committee, which is responsible for pulling this panel together. And I'm privileged to introduce our moderator, Judge Stephanos Bibas.

 

      He's a graduate of Columbia, Oxford, and Yale Law. And before assuming the bench, clerked on the Fifth Circuit, the Supreme Court, practiced privately, and served as an Assistant United States Attorney in the Southern District of New York. And then he turned to academia, where he served as a law professor at Iowa, Chicago, and Penn. He's earned a reputation since assuming the bench in 2017 for the quality and clarity of his legal writing. And his statements about who and what leads him as a judge are particularly pertinent to the theme of our panel today, which involves the rule of law.

 

      Speaking at William & Mary Law School in 2019, Judge Bibas stated, "My boss is not my chief judge. My boss is not my appointing president. My boss is the Constitution and the laws." Please welcome Judge Bibas.

 

Hon. Stephanos Bibas:  Thank you for the kind introduction. Since I am sworn to uphold the law, I will, in fact, ask to enforce D.C's law. We are all required to be wearing masks inside.

 

      "Criminal Justice 2021 and the Rule of Law." Very important topic. For a long time, many people assume that the job of police was to make as many arrests as they can. And police often had been measured on that. And the job of prosecutors was long assumed to be to make as many charges and convictions as they could. And prosecutors have often been measured and campaigned on that. And in recent years, we've seen something very interesting going on in the different states, the cities, the laboratories of experimentation and democracy. We've seen what used to be sky-high incumbency advantages for prosecutors turn into contested races, sometimes a long issues with some so-called progressive prosecutors coming in, saying they want to explore alternatives to prioritizing maximum arrests and charges and convictions.

 

      And there've been a number of cities across the country that have elected prosecutors campaigning on some version of this. Sometimes it bears on the war on drugs. Sometimes it bears on what to do about innocence claims. Sometimes it bears on what to do about police excessive force and abuse. And in this most recent election just a few days ago, there were a number of elections in which both mayor election and DA elections this was an issue.

 

      Now, there are many perspectives you might have on this. One traditional perspective, as I said, might be well, doesn't the rule of law and ordered liberty mean enforcing the law -- enforcing the law within the bounds allowed by the law. Is this a subversion of the law? Does it send a message that might undercut deterrents?

 

      But there are other perspectives that might say no as a matter of federalism and experimentation. Some people choosing to take different approaches; different approaches to the wrong drugs; maybe lesser or no enforcement. Is that fidelity to the prosecutors' role or is that a subversion of the role? Is that, in fact, what our federal system's supposed to embrace or does it involved, in fact, undercutting fidelity to the law?

 

      To discuss these important and timely questions, we have a very distinguished panel, and I'm thrilled to be able to introduce them. I'll give -- their bios could go on a great length. I'm going to give just very brief, two-sentence introductions. The meat of this program will have opening statements that are short, three to five minutes, in the hopes that we can have a lot of discussion back and forth, and then open it up to questions from the floor for the last portion of our panel.

 

      So first, we're going to have Mr. McGregor, or Greg Scott, who's a partner at King & Spalding, where he specializes in assisting companies facing government investigations and litigation. He previously served as the U.S. Attorney for the Eastern District of California.

 

      To his left, is Mr. Larry Krasner, who's currently the Philadelphia District Attorney. He started his career as a public defender before serving in the Philadelphia Public Defenders Office. He then transitioned to private practice where his work focused on criminal defense and police misconduct.

 

      Then to his left, we'll have Mr. Rich Stanek, who's a founding member of the Public Safety Strategy's Group, where he works with local and national public safety organizations. And before that, he was for three terms sheriff of Hennepin County, Minnesota, which, I believe, is where Minneapolis is, and a captain in the Minnesota police department.

 

      And then finally to his left is my dear friend Prof. Tracey Meares, who's the Walton Hale Hamilton Professor and a founding director of the Justice Collaboratory at Yale Law School. She's a nationally recognized expert on policing in urban communities. And her research focuses on how members of the public think about their relationship with the police, prosecutors, and judges.

 

      So without any further ado, Mr. Scott, please.

 

Mr. McGregor W. Scott:  Thank you, Your Honor. And if I could, very briefly, say to my fellow veterans in the room, Happy Veteran's Day and thank you for your service.

 

      Judge mentioned the rule of law, but also in the description of today's panel is the term "ordered liberty," which by definition means that individual freedom is limited by the need for order in society, a reconciliation of the conflicting demands of public order and personal freedom. And that's what our criminal justice system tries to do every day is to strike that balance, to achieve ordered liberty for our citizens.

 

      The rule of law, I submit, is the cornerstone of the concept of ordered liberty. But the rule of law only works when each of the branches of our government, tasked with a role in it, stays in that branch's lane.

 

      Public prosecutors have a central role in striking that proper balance. I will submit today, and with due respect to my new friend, Mr. Krasner, I have a couple of criticisms of the progressive prosecutors' movement. Or, as my friends at the Heritage Foundation call it, the "rogue prosecutors' movement."

 

      In two fundamental ways, progressive prosecutors fail in their traditional roles as public prosecutors, and in turn, thus fail in enforcing the rule of law and, in turn, ordered liberty. The cornerstone of our government is the separation of powers and without, we cannot have ordered liberty. This concept of the legislature legislates, the executive enforces, and the courts interpret is fundamental. Goes back to kindergarten we learn these things. And I think it's best captured perhaps by Article III Section 3 of the California State Constitution, which reads, "The powers of the state government are legislative, executive, and judicial. Persons charged with the exercise of one power may not exercise either of the others, except as permitted by this Constitution." When progressive prosecutors unilaterally choose not to enforce whole categories of crimes or use statutory sentencing enhancements, which are available to them, they usurp the proper role of the legislature in our system.

 

      Now some will say it's prosecutorial discretion. But that's simply not accurate. Prosecutorial discretion is something that is undertaken on a case-by-case analysis, looking at the specific facts and law of a particular case, not the wholesale failure to enforce the laws in a particular category. Simply put, if you want to change the law, run for the legislature, not DA.

 

      The second foundational piece these prosecutors have abandoned is the proper role of the district attorney in our system of criminal justice. Let me be clear. The ultimate responsibility of a prosecutor is, in the famous words of Justice Jackson, to see that justice is done. The best thing many times a criminal defendant can have is a smart, ethical prosecutor on the other side who understands and completely embraces that responsibility.

 

      However, ours is an adversarial system. That is why criminal cases in the state of California are captioned The People of California v. John Smith. In Pennsylvania they're captioned, The Commonwealth of Pennsylvania v. William Jones. I think this description of the role of the elected district attorney on the website of the California District Attorneys Association captures this point that I'm trying to make. "The primary role of the District Attorney is to protect the community he or she is elected to serve. District Attorneys represent the public and endeavor to improve public safety by prosecuting those who threaten the well-being of the community and its citizens by breaking the law."

 

      A few weeks ago, two senior prosecutors in the office of San Francisco district attorney, Chesa Boudin, resigned. One of them, a self-described "progressive prosecutor," has now joined the recall effort against Mr. Boudin because she was very disturbed by what she saw going on in the office. And this is one quote from The San Francisco Chronicle from her, "His goal appears to be what is best for the individual who has been arrested for a crime or who has been charged with a crime but not what is best for San Francisco."

 

      Recently, in the LA Times, the chief of police in southern California was quoted saying, "What we are seeing from our officers on the street is that criminals don’t feel like they have to face any consequences."

 

      Now, this is not academic or theoretical, this deviation from the traditional role of the public prosecutor in the rule of law and, in turn, ordered liberty. There are consequences. In jurisdictions which have elected progressive prosecutors, the homicide rates have been exceeding. Long before anybody had heard of COVID, Baltimore, Philadelphia, Chicago, St. Louis, Los Angeles, all experiencing homicide rates which have not been seen in decades. Last year, Baltimore had its highest per capita homicide rate ever. It is a fact that when the violent crime rate in general and homicides in particular rise, we see a commensurate increase in the number on minority victims. How ironic it is that those who suffer most from violent crime on a daily from this deviation from the assigned role in the rule of law are minority communities, who progressive prosecutors claim to care about most.

 

      I look forward to your questions. Thank you very much.

 

Lawrence S. Krasner:  Hello. First of all, I want to thank you for inviting me. Certain people told me, "Do not walk into the lion's den," but I like lions. So I'm down here. Perhaps I'll make it out of here. But I really did want to come down here, and I really did want to speak to you for a couple of reasons. Reason one is if I were not here then progressive prosecutors, in general, could be made into these two-dimensional cartoon characters. Something I've seen many, many times. Same reason I went to speak to the police union in Philadelphia during my campaign, even after I said I would not accept the endorsement of its leadership. You have to talk to people. You have to let them know what you stand for. And sometimes it turns out that there's a lot of common ground. I actually think there probably is a lot of common ground.

     

      Let me get one thing out of the way, though, before it sets in cement because one aspect of progressive prosecutors is that we believe in data. We believe in transparency. We believe in the facts. It is not at all factual that there's a higher rate of violent crime or gun crime in progressive prosecutors' jurisdictions. That is completely false. If you look at the top 50 cities in the United States in the year 2020, the average increase in gun violence was 42 percent. The average increase in the United States was 20 percent. People were killing people in rural areas as well. And if you went to Philadelphia—my jurisdiction—we were at 40 percent. We were at average, or a little bit less than average.

 

      John Pfaff, the rather impressive professor of law at Fordham and also a professor of economics, did an in-depth analysis of the top 50 cities. And he discovered that there is absolutely no correlation whatsoever between the increase in violent crime and whether you are a traditional prosecutor or a progressive prosecutor.

 

      So I say that just because I think we should get that out of the way.

 

      Now moving on, I believe that there are a lot of people in this room who sincerely believe that government should be limited, that government should act with restraint, and that there should be more freedom, not less, consistent with public safety. That is also something that I believe. When we talk about the rule of law, it can mean a lot of things. But I'll tell you one thing it definitely does not mean: it does not mean all of you snapped to attention and put on your masks because I'm looking out and half of you should turn yourself in, if that's what it really means. If what it really means that any violation of any law anywhere should be enforced, that is an impossible task, and it is not what any traditional prosecutor has ever done in history.

 

      The reality of our situation is that we must grasp the context. The United States is the most incarcerated country in the world. And yet, we claim to be the land of freedom. That is not right. There is something fundamentally wrong with that.

 

      If you look at a state like Pennsylvania, while we have seen a 500 percent increase in incarceration in the last 30 to 40 years nationally, Pennsylvania has seen a 750 percent increase in incarceration over that same period of time. And if you start to talk about what that actually means in economic terms, because it really does matter how we steward society's resources, it really does matter what return on investment we get from the money we spend, then this is what it looks like. One year of incarceration for one person is going to cost you, depending on where you are, 50 grand. In Philly, it's actually more, but it's going to cost you something like that. A year of incarceration for a juvenile in a juvenile facility in Pennsylvania costs about $200,000. So I would like to think that we would be getting something back for that money.

 

      My belief—and I don’t share it with every progressive; some of them disagree—but my belief is we do need some jails. We do need some prisons. We do need police forces. I believe all of that, and I believe they should be used for the people who need to be in them. But I also believe a couple other things. I believe we should look at modern Germany where they have 1/9th the level of incarceration and they have 1/9th the level of homicide. Well, if we're doing everything right, then please explain to me how it is that far less incarceration there and far more investment in rehabilitation—a completely different type of corrections—has led to so much more public safety. And you know the answer. You know where I'm going with this. The answer is when you burn up all your money on incarceration where it's necessary—and it is necessary some of the time—but more importantly where it's unnecessary, when you burn up all of that money on those extra judges and extra courthouses and extra probation officers and extra parole officers, when you do that, when you burn it up on certain types of police enforcement that don't make sense, then you don't have it to invest in things that work better.

 

      Let me just give you a very quick example, and then I'll quit because I'm at my five minutes. There is research out there—we embrace research. We actually have a criminologist in the Philadelphia's DA's office for the first time in the history of that office. And we do a ton of data. But there is research out there that indicates, by comparison, if you were to invest a dollar into policing, the benefit you get from that, in terms of safety, is more than dollar. It's about a $1.10. That's pretty good, right? That's some return on your investment. But if you take the same dollar and you invest it in drug treatment, the return you get is four dollars.

 

      So when we look at safety, we have to not only look at cost, we have to look at the opportunity cost. As we put resources over here, what could they have done over there? I'm going to submit to you, and I hope to argue as we proceed, that no American business, no American business that's intelligently run, would run the way our criminal justice system runs, in terms of being an engine of mass incarceration. Thank you very much.

 

Richard Stanek:  Well, good afternoon. It's a pleasure to be here with you at The Federalist Society. You know, over the last couple of weeks, from the panel members, we send some emails back and forth trying to decide -- and I was trying to decide "Well, how am I going to fit into this panel?" I mean, these guys are very scholarly. They're really good at what they do. And I thought, well, maybe just an honest, commonsense perspective. The perspective of a 37-year police officer. Twenty-five years with Minneapolis Police, the last 12 years as Sherriff of Hennepin County. I had a chance to serve in the state legislature for five terms. I worked for my governor as commissioner of public safety. So I had experience both in the legislative and executive branch. And I thought about -- we were supposed to submit a thesis about what our comments would revolve around this afternoon.

 

      So I thought about it and went to work. And I decided that law enforcement is quintessentially an executive branch function. It should always be separate from legislative and law making functions. This separation of powers is fundamental for law enforcement. And I think that kind of fits right in with what the other two gentlemen said from maybe different perspectives but fits right in.

 

      You know, I think about the concepts of rule of law and ordered liberty. They look very different from the distance and safety of a courtroom with weapons screening and bailiffs, security cameras and panic buttons. They take on a whole different perspective than the theoretical underpinnings of a flowing black robe. And that's from a former sheriff who sat in the courtrooms, who had deputies who did this day in and day out. These concepts take on all new meaning when you are at a First Amendment protest in any major U.S. city across this country – Philadelphia, Minneapolis, Chicago, New York, you name it. With thousands of people exercising their protected rights, it is our role—law enforcement's role—to keep them safe and protect these civil rights and constitutional rights.

 

      But then people in the group start launching Molotov cocktails. They break windows, they start fires. They empty out the property in dozens of stores on the block. Or when the area is fogged with tear gas and rioters are no longer are rioters -- no, protestors turn into rioters and they refuse your dispersal orders for the third time. Or when these rioters throw cement blocks and rocks at police officers. They start shooting into a police station or start calling your mother names and start questioning her heritage. Those are the front lines. That's the real commonsense approach from law enforcement.

 

      And I know that you're all going to agree that law enforcement serves best when it is accountable for the proper and the constitutional enforcement of laws protecting civil rights and civil liberties of all residents. Did you hear me? Accountable for the proper and constitutional enforcement of laws protecting civil rights and civil liberties of all residents.

 

      But as law enforcement officers, we need clarity: what is legal and what is not? Without proper enforcement, we have, what? Lawlessness. We have to draw very clear lines when all you lawyers, no offense intended, tend to want to talk about the grey areas. And we have to draw very clear lines when we're training the young men and women in our agencies, some of whom aren't even 21 years of age. In Minnesota, they have to have a two-year degree; they have to go to a licensing school. They get about six months of on-the-job training before they're put out on the road to enforce those very laws.

 

      I had a young man that worked for me named Sam. He was a very young guy. I mentored him for a number of years. But when I swore him in at age 20 in Minnesota, he wasn't even legally able to carry a firearm as yet. But nonetheless, he's doing well today.

 

      There's nothing grey about a law enforcement officer's oath to uphold and enforce the law. Police officers are the keepers of the peace and we must keep everyone safe. In these instances, that is our mission. And yes, we certainly have discretion when it comes to making an arrest. But we also need the law to be applied equally and fairly to everyone. This concept of rule of law, ordered liberty, or if you're a police officer, law and order, depends on police enforcing our laws as they've been adopted.

     

      Discretion in this process undermines this concept of the rule of law. For example, foreclosures on a home or evictions. Those are judicial orders. And just because mom has several kids and she's going to be evicted or foreclosed out of her home doesn't mean that law enforcement can't help her out. Maybe pay for a hotel, give her some money for food, help her kids move on to something else. But nonetheless, we've got a job to do. We've enforce those judicial orders.

 

      The same thing with criminal laws and county/city ordinances from the legislative branch. Law enforcement officers—chiefs, sheriffs, others—we do not make laws. But as experts, we can advise and confer regarding the development of policy and laws. This rule of law is undermined when it depends upon you elect as to whether or not the laws are meaningful. And some example are immigration laws, for example. Federal enforcement responsibility but often not supported at the local level. Should local law enforcement support federal law enforcement mission? Many sheriffs' races across this country have come down to this very issue when it comes time every four years for their reelection.

 

      Trespass and violent riots—the tragic George Floyd death in Minneapolis, arrests and [inaudible 0:31:12] ignored violence, property damage, and looting. Cite and release. There were hundreds and hundreds of individuals who were cited for looting, theft, refusal to obey dispersal orders—all of those charges were dismissed at the end of the day before they got to court. They weren't even booked in the jail because the mayor, or activist city council, decided through their city attorney, who's appointed by them, that that wasn't to be the case. And look at the consequences. Residents and businesses in Minneapolis, the owners watched as the city burned. And now they don't trust and they will not be safe there. They're closing their businesses and moving out en masse.

 

      If we do not support the intent and effect of our criminal laws, the solution is to change the laws, not simply ignore them. I think I heard that about five minutes ago, if I'm not mistaken. More and more local legislative bodies, those city councils, those county boards are invading the progress of executive powers by usurping the management of the police department and the sheriff's offices.

 

      Just two weeks ago, on November 2, this year's elections, Minneapolis had a referendum to abolish and defund their local police department. You know, that city charter was put in place to guarantee the number of police officers and the funding per resident in their city. It would've eliminated the guaranteed funding and it would've left it to policymakers to determine whether police or public safety or social workers were needed.

 

      Recently, Loudoun County, Virginia's board of supervisors wants to remove all of the law enforcement authority from the sheriff's office—and by the way, the sheriff in Loudoun County, the commonwealth of Virginia, is a constitutional officer. And they want to place it in the hands of a police chief that they would directly supervise. They want to exercise both the legislative and the executive authority.

 

      The independent office of the sheriff dates back to before our nation's founding. And you'll see it included in many state constitutions to protect against its encroachment of the legislative branches of local government. So as I said when I started, law enforcement is quintessentially an executive branch function. It should always be separate from legislative and law-making functions. This separation of powers is fundamental to law enforcement. Thank you.

 

Prof. Tracey L. Meares:  Okay. Well, I had some thoughts about what I was going to say. Judge Bibas kindly put me at the end of the roster so that I could respond to some of the comments of the speakers. I think where I'm going to begin is as an academic, and I'm going to make three points. One, a point about the constitutional law of ordered liberty. Second, a point about the science of individual compliance with the law. And a third point about how to integrate those two things, given the fact that the rule of law is often a response to the ways in which legal authorities, over time, have abused the notion of law and order.

 

      But before I make those three points, I want to make sure that everybody in the room knows that in addition to being an academic, I also do work on the ground. I've worked with police agencies all across the country. I currently serve on the monitoring team for the Baltimore Police Department. And I run a research center that actually puts out lots of different strategies and policies for legal institutions that are policing the prosecutors, and so on.

 

      So the first point about ordered liberty. That term actually comes from constitutional law decisions in which the Court was grappling with an interpretation of due process and trying to figure out whether one could interpret due process guarantees as against interpretations of the Bill of Rights. The strongest proponents of that idea of ordered liberty were Justices Harlan and Frankfurter. And what they tried to do was to talk about the importance, actually, of the legitimacy of law and what it meant to encourage people to try to voluntarily abide by the law as government agents tried to balance the goal of enforcing the law, yes, but protecting individual liberties.

 

      There's a science to this. And the social psychology of procedural justice helps us to understand exactly why people do voluntarily obey the law. Now, it is true that threats and consequences can motivate people to abide by the law. But decades of research show that that is not the most effective way, actually, to motivate people to abide the law. And moreover, an overinvestment in those strategies can actually cause people to turn away from obeying the law.

 

      What is the most effective way? The most effective way is to encourage legitimacy in the law through four points. One, giving people voice, and individual interactions with authorities, you give people an opportunity to tell their side of the story. And in enacting policy, you give people an opportunity to participate in the development of that.

 

      Second, you treat people with dignity and respect and concern for their rights. So with respect to policing, again, you can see and understand why in the many videos that we've seen of people in their interactions with legal authorities being treated disrespectfully, you can understand why they might actually not be motivated to respect the authorities who do that.

 

      Third, people care about fair decision making. They care about transparency. They care about a connection between facts and the decision making that a legal authority is making. They care about neutrality. They care that their decision makers are free from bias.

 

      And fourth, people care about being able to trust the authorities that they're dealing with. They want to believe that they're going to be treated benevolently in the future. And the way they make that assessment is by checking against how they are actually being treated by those authorities. The how that they're being treated is much more important than the actual outcome of the decisions that those authorities make.

 

      In short, in their interactions with authorities, people want to believe that that authority that they're dealing with believes that they count. And they make that decision based on how they're treated.

 

      Now what does this have to do with the connection between the ideas of some of the things that you've heard? Well, it turns out that because so many of the people who have less trust in authorities are people who are racial minorities, groups that McGregor Scott just brought up. It's actually really important in thinking about what legal authorities ought to be doing with respect to their pursuit of ordered liberty, that they're treating groups with dignity and respect, giving them voice, treating them fairly, and making fair decisions. And when that does not happen, those folks don't have a perception that the authorities are legitimate, and they're less likely, actually, to voluntarily obey the law.

 

      This is, I think, the crux of the issue when we're talking about ordered liberty and how different groups -- different types of authorities, whether you're Larry Krasner or a traditional prosecutor, are carrying out their tasks. And those are the metrics that I would use, at least as a first cut, in assessing whether they are doing it the right way.

 

      Last point. Once we get into a discussion of data, which I'm sure we will, I can guarantee you that there is a great deal of data and research that backs up what I'm saying, and I'm happy to give anybody cite and verse.

 

      Thank you.

 

Hon. Stephanos Bibas:  Thank you all for those remarks. Let me start by asking for some discussion at the broad theoretical level of separation of powers. So one complication here is state constitutional law varies a lot. Many states do not have a federal tri parte separation of powers. But more generally -- I think this is a question, I'll start with Mr. Scott and then I'll give a version to Mr. Krasner. There are many laws on the books. Many of these laws are overbroad, and I believe you said, Mr. Scott, that if there's a law that's been -- a crime that's been put on the book, or a sentence that has been put on the books, it's legislature that's made that choice. And prosecutors shouldn't make that choice.

 

      But what does that mean for the routine use of sentence enhancements as plea bargaining chips? There are many state courts that have blessed that, that have said, "The legislature put it on the books. The prosecutor can use it or not use it." Are you suggesting that there's something improper in prosecutors not charging and proving the maximum crime and maximum offense in each case? Or is there something improper in dropping things as part of a plea bargain?

 

Mr. McGregor W. Scott:  There's, I think, a line to be drawn there between the legislature saying something is mandatory and something is discretionary. And many times, that's what the legislatures have done. And my point was that all too often what we're seeing now, specifically in Los Angeles County with Mr. Gascón, is the wholesale rejection of the enhancement scheme that's been set up by the state legislature, which is resulting in amazingly lenient sentences for vary violent criminals who need to spend a lot of time in prison because of what they have done to individuals in our society.

 

      So, again, I come back to the fundamental point, which is the legislature creates the measurement. Is it discretionary? Is it mandatory?

 

Hon. Stephanos Bibas:  All right. Let me take a version of that question to Mr. Krasner. I believe you campaigned and won office on a platform that was, in part, that you were not going to enforce marijuana crimes—correct me if I'm wrong—under any circumstances. And, correct me if I'm wrong, I believe you have not, in fact, been doing so under those laws. Is that defensible given that the state legislature has criminalized marijuana use and possession?

 

Lawrence S. Krasner:  So I would never call a judge wrong. But that is a little imprecise, even though it's not entirely wrong. At the time I took office, the city council had already passed what was essentially a ticket for the possession of marijuana. We prosecute marijuana sales. Always have. But they passed what was essentially a ticket – instead of being charged with a misdemeanor offense and going through a court process, a ticket was written; you pay 25 bucks. That's that. And in that process, which all happened before I got into office, 80 percent of those marijuana cases came out of the docket of the DA's office. That was about 5,000 cases used to be for possession of marijuana.

 

      When I came in, what I did was I looked at this 20 percent, this thousand or so cases remaining, figured out they were being prosecuted for, frankly, no good reason, which was simply they were cases in which people had bought marijuana on the street for their own personal use. I saw no distinction there. And so we have declined to prosecute them, with the rare exception. If we do, in fact, catch Pablo Escobar with a little bit of weed, we're going to prosecute Pablo Escobar because we're going to take whatever handle we have to get a hold of him.

 

      We've done that. We have also done that with the crime of prostitution in Philadelphia. We do not prosecute, mostly women, who engage in sex work because, frankly, we consider them to be victims of a system, not the ones who need to be put in a jail cell. It does nothing to help them get out of that life or address the issues that they often have. So we have made decisions in a couple of areas not to do that.

 

      But I understand the context. We are at a context where both Republicans and Democrats want to legalize recreational marijuana for adults. They both want to do it. They're having a tug-of-war over whether it goes for tax breaks—I'll let you guess which party that is—or it goes for public education; I'll let you guess which party that is too. That's what's going on. So what we're talking about here is should I prosecute the possession of a beer at the end of prohibition?

 

      And I remember the oath I took. The oath was very clearly to seek justice. That was it. It wasn't all of these other things that are being layered on there. Uphold the Constitution, and seek justice. I think it is 100 percent just not to go after people vigorously at the end of the criminalization of possession of marijuana shortly before it is legalized and becomes very profitable for a whole lot of people who might actually be in this room.

     

Hon. Stephanos Bibas:  Would anyone else like to speak to these points?

 

      Let me go on now to the -- maybe I can focus on Mr. Krasner and Mr. Stanek on this about police-prosecutor relations. So historically police and prosecutors have worked, somewhat hand-in-glove, and you could call that cooperative or you could call it too cozy. With progressive prosecutors, sometimes, you've had a more adversarial relationship. I think there've been some billboards in the Philadelphia area that have expressed such a relationship. I'm kind of curious is it a good or a bad thing to have more distance or space or a different relationship with police? Mr. Krasner.

 

      Lawrence S. Krasner:  For me? Okay, first of all, I'm extremely grateful for those billboards because they got me a lot of votes. And I'm not kidding. They got me a lot of votes because the way the people feel in Philadelphia is not that they don't like police—a lot of them do like police; I like police. In fact, I have an officer here who defended my life against some of you today.

 

      But the point is that Philadelphians have a very divided relationship in particular with the police union. And there's a reason for that, and it's a reason that happens all over the country. The primary reason is that police unions include all of the retired membership. And in Philadelphia what that's going to mean is that the leadership of the FOP doesn't need a single vote from a single current active Philadelphia police officer. What they need to do is keep a prior generation with a prior demographic with a prior politics happy. And so there is a huge difference between what the average current Philadelphia police office may think. And they all think different things because stereotypes do, in fact, fail us, even when we're talking about police officers. They fail us. And what is coming out of the mouths of the leadership of the FOP.

 

      You should know that I have twice been endorsed by the Black Officers Association in Philadelphia, which constitutes a very large part of the Fraternal Order of Police. A mandatory membership is what -- I mean, it's a bargaining unit. So every police officer, whether they like the politics of the FOP, which are, in fact, endorsing Donald Trump twice, the leader of the FOP referred to Black Lives Matter as a "pack of rabid animals." He has defended the visible wearing of Nazi tattoos by officers on duty and in uniform. I could go on. The proud boys were invited into FOP hall where they drank with the officers in an officers-only section.

 

      In my opinion, this does not reflect at all, in a good way, on law enforcement. But that's what he has done. And I don't think his actions in any way describe how the average rank-and-file police officer thinks.

 

      Now, having said that, is it a perfect relationship? No. It's not perfect. It's not perfect because we do hold police officers accountable, something my predecessors never did because they didn't keep their oath, which was to seek justice. Seeking justice means equal treatment under the law.

 

Hon. Stephanos Bibas:  Mr. Stanek.

 

Richard Stanek:  Well, I would say that the relationship between law enforcement and prosecutors is always kind of a push-pull relationship, right? Sometimes we work with them; sometimes we find ourselves on opposite ends. I think he just said it. Look, if I get an opportunity for a low-level misdemeanor arrest for marijuana that I wouldn't normally prosecute someone else in the room for, but it's Pablo Escobar, hey, I'm going to take the shot.

 

      And then on the other hand, he also has the responsibility of prosecuting those police officers themselves, who find themselves in violation of the law. And so this relationship has been going on a long time. Activists, prosecutors, whether on the county or the local level has always been something that law enforcement wishes did not happen but rather you enforce the laws before you, that you don’t interpret the laws according to how you want. You were elected just like sheriffs were elected. And we both have responsibilities back out to the residents of those counties. I don't think our responsibilities are any different. But push-pull. That's how I would describe it.

 

Lawrence S. Krasner:  Can I just say one word on that?

 

Hon. Stephanos Bibas:  Sure and then Professor Meares.

 

Lawrence S. Krasner:  Yeah, I'll just be real fast.

 

Richard Stanek:  It's like a rebuttal.

 

Lawrence S. Krasner:  Well, not exactly.

 

Prof. Tracey L. Meares:  I was trying to go first, for what it's worth.

 

Lawrence S. Krasner:  But here's the truth, in Pennsylvania in the last 30 years, we went from a thousand criminal offenses to almost 5,000 criminal offenses. If what you're saying is you have to prosecute everything all the time, including all those of you who have your mask off, if that's what you're saying, then it is an unsustainable burden, and no one has ever said that to a traditional prosecutor. This is how we get a 500-percent increase in incarceration in the United States during a 30-year period when crime declined for 30 years. This is how we get there because there's the good politics and fear; there's the good politics and anecdotes without facts, and there's the good politics in constantly saying, "Punish, punish, punish, punish."

 

Prof. Tracey L. Meares:  I just wanted to make a small point about this separation, which is it is not necessary, of course, that the DA be the prosecuting agency that deals with police misconduct. And in fact, when I served on the president's task force in 21st century policing, one of their recommendations that we made was that there would be independent prosecutors or that these prosecutions would take place at the state level. Actually, it's very easy to solve this problem. You don’t actually have to have the kind of push-pull, which would also be consistent with the rule of law.

 

Hon. Stephanos Bibas:  Mr. Scott, did you have something?

 

Mr. McGregor W. Scott:  So I think much of this discussion touches on when there's an officer use of deadly force and that relationship between the prosecutor's office and the police department. In California, that authority has been given to the state attorney general in just the last legislative term, where the person against whom the deadly force was used did not have a deadly weapon or a firearm.

 

      But in that context, there's a general misunderstanding in the public about what is the legal standard that's been established by the United States Supreme Court for a police officer to use deadly force. And we had an interesting situation in Sacramento shortly after I became U.S. Attorney the second time. A young African American male by the name of Stephon Clark was shot and killed by the Sacramento Police Department. And it was highly controversial. He was not armed. He had a cell phone. It was at night. So that's where we were. The state attorney general was asked by the DA to come in and help her with that review and that investigation. And as you can imagine in California, we don’t elect traditional prosecutors as the attorney general anymore. We just don’t do that. And so Mr. Becerra, who's now the Secretary of, I think, HHS, his team came in and looked at it as well.

 

      And when they were all done, we the feds looked at it for potential civil rights violation. And I just got to tell you, it was a very eye-opening experience for Mr. Becerra to have to learn exactly what the standard is as set forth by the United States Supreme Court. And so it's easy to criticize that relationship, but we also have to remember that the DA has to go by the legal standard that has been established and apply it to the facts. And all too often, I think there's a great conflating of those two things in the public. 

 

Hon. Stephanos Bibas:  Let's talk a little bit about federalism and sub-federalism. We're used to these -- we have federal laws but then we've got state criminal laws. There are some municipal ones. Then we elect DAs at the county level, but police chiefs are often picked by the mayor at the local level. What about the -- we have these many places in which there's a more progressive city against -- in a more conservative state. Is the variation in there good? Maybe we could start with Mr. Scott because California has this famous experiment going on called "realignment," in which different counties have decided to adopt different approaches, some of them -- for non-serious, non-violent, non-sex crimes. Some of them taking a more traditional arrest-and-punish approach, some of them deciding to take a more treatment or decarc           erative approach. Is it good? Is it valuable for cities to have flexibility this way? Or is it a source of problems or disrespect for state law?

 

Mr. McGregor W. Scott:  Well, again, as Mr. Krasner said, I never like to disagree with a judge, but that discretion really does not rest at the local level. It's a product of in recent years we've had a number of statewide propositions and pieces of legislation which have done the things you've just said, not at the local level. So that really is not what we're dealing with there.

 

      And realignment, the concept was that felons and non-violent crimes would be housed for the duration of their terms in the county jail, not sent to state prison. And I think there are -- there's a wide range of opinions whether that has succeeded or not. We've had the follow-on Prop. 57, which reduced many felonies to misdemeanors, and that was the now-infamous provision which makes it a misdemeanor to steal up to $949.99 worth of goods every day with no consequences. So the famous videos that you've seen coming out of San Francisco of the man on the bicycle with a big grocery bag full of stuff riding out; the people who went into Neiman Marcus and stole all the purses and ran out and jumped in the getaway cars. So there's a huge level of discourse and debate about whether these reforms have worked and what they have done.

 

      But the point I would make is it's not so much the police departments or the sheriff's departments -- the rubber meets the road at the DA's office because that's where the decisions to charge the crime are going to be made. The cops see a crime, they're going to arrest. But then it gets sent to the DA's office. So that's where the decisions are going to be made to do these things.

 

      The point I wanted to make, too, on -- you asked about sentencing enhancements earlier, and I'll make this very brief. I think it's very fascinating, very interesting that the Assistant District Attorney's Association of Los Angeles County actually brought a lawsuit against the elected DA about his policies in terms of using enhancements in serious felony cases. And at the trial level, the judge ruled in favor of the deputy DAs. And that's now up on appeal. But that shows the battle that's going on within the state.

 

Hon. Stephanos Bibas:  Mr. Krasner.

 

Lawrence S. Krasner:  So I'm very tempted to say a couple words about my friend, George Gascón who is, in fact, the district attorney in LA, previously the district attorney in San Francisco. A lot of people lose sight of the fact that George Gascón was a beat cop in Los Angeles, and then he was a chief of police in Mesa, Arizona and San Francisco. And the way he became DA is that he got a law degree many years into his career. And when Kamala Harris became the AG, he was appointed. We are talking about a career police chief, a career cop, who is being described as some kind of bomb-throwing -- not described by you (places hand on Mr. Scott), but described by others as some kind of bomb-throwing radical. That is nonsense.

 

      What actually is going on here is that based on a very long experience in criminal justice dealing with police as their chief, he knows the problems. He's trying to change the problems. And he is up against, as we all are who are progressive prosecutors, he's up against institutions that are not aligned with people.

 

      Now why do I say people? I say people because 10, 12 years ago there were zero progressive prosecutors in the United States who were identifiable. Two years ago, 10 percent of the United States lived in a jurisdiction with a progressive prosecutor. Today, 20.1. It's been two years. You've seen an increase. If we were to form a political party, progressive prosecutors would be the most successful political party in the United States. That's the truth. This is not coming from us. We're are not extraordinary people. This is coming from people who are disgusted with mass incarceration, the incredible damage that it has done throughout our society, the violations of our liberty. There is no bigger government than a government that locks up people all over the country unnecessarily. So that is where all of this stuff is coming from.

 

      Now I'm sure you had another question that I forgot.

 

Hon. Stephanos Bibas:  Oh, I was just asking about relations between states and cities and counties. So, obviously, you know, there are issues in Philadelphia. Philadelphia doesn't get to set its own gun policy and other things. What's your attitude about Philadelphia striking off in a different direction from the way in which some of the statewide laws are written, or other DAs in Pennsylvania are doing things?

 

Lawrence S. Krasner:  Well, I think you raise a very, very important point, which is that there is an argument that what's happening in places like Chicago and Brooklyn and now Manhattan where we have progressive prosecutors is a kind of micro-federalism. Hopefully, it's accompanied by science and not just anecdotes and not just what bleeds leads because that is the history of criminal justice. It has been completely unscientific, never moored to the truth. And that's kind of how we got here.

 

      But I think to the extent that you do real research and you do these things that are considered by some experimental, frankly, they look a lot like what we used to do in the United States 50 years ago when we didn't have a 500-percent increase in incarceration. To the extent you can do those experiments, and then you can test them independently, and then you can see if they work or not, when they work, there now becomes a basis for legislation that would take it in. I mean, just to be very quick about it, there is a jurisdiction where there has been a no-cash-bail system for 30-plus years. It's here. It's the District of Columbia. There's a lot of science in that that says a lot of good things about a system where you are either held pre-trial, which 12 percent of defendants are in D.C. or you are released and money's got nothing to do with it, right? But the only way that you can do that experiment is by doing that experiment.

 

      So I think that there is a lot of good to be had in the micro-federalism of progressive prosecution.

 

Hon. Stephanos Bibas:  Prof. Meares, could you pick up on the laboratories of democracy or the data proving to be useful? What can we learn from it?

 

Prof. Tracey L. Meares:  Sure, but I wanted to say something about the relationship between city government, county government, and state government. And to do that, I want to invoke a book by our good friend, William Stuntz, called The Collapse of [American] Criminal Justice. If you haven't read it, I recommend it to you. But Bill noted that one of the problems that we have in administering our system is that laws, criminal laws, are primarily made at the state level; that prisons, or at least prosecutors, sometimes prisons, are ministered at jails at the county level, prisons at the state level. Police are organized at the city level and the disjuncture between all of these things is incredibly difficult. I don't think it's actually true, Greg, that a police officer who sees someone breaking a state law is automatically going to arrest them. In fact, I'm confident that that's not true, given all of the research that I've done. It's possible that it's true.

 

      But then there are situations in which, to ameliorate that problem, then the police department is required to come up with its own, essentially, administrative law policy to address the issues of potential over-enforcement, at least from the police officers' perspective.

 

      And I know George Gascón. He and I served on a Harvard executive session, Public Safety, about 15 years ago. I know I don't look that old but really I am. And he cared very deeply about the kinds of issues that you are worried about with respect to public safety and concerned for racialized communities in particular. But also a concern about doing fairly. And the ways in which our government operates at different levels makes this incredibly difficult.

 

      At the same time, I don't think anybody thinks that we want to have a national police force or even a state police force, right? That's France, actually. That's not the United States. And so, I think that the best answer to this is actually allowing executives of these offices to use their discretion, but they should do it at the direction and in consultation with relevant communities who are impacted, both by the problems that the enforcement of law seeks to address; that is interpersonal violence—but also the costs of the very policy instruments that are used to address those issues.

 

Hon. Stephanos Bibas:  So continue on this issue of data and what we know. Professor Meares, you make very important points about legitimacy. But you can run legitimacy arguments multiple ways. We ultimately have to know more about the data. I mean, one thing is if criminal laws are multiplying and overbroad, if we went in and arrested everybody in this room who's not wearing a mask, I think there would be a sense of "What?! You're doing that?"

 

      On the other hand, when people see that laws are widely being flouted - people are walking out of stores in San Francisco or there's just tents springing up everywhere, there's also a sense among a number of people, like, what has happened to public order or ordered liberty. So you want a sense that people are, in fact, safe and they perceive themselves to be safe. What do we know and what can we generalize about how to strike a sweet spot that's not viewed as excessively punitive but also doesn’t just undercut that sense that, "Hey, everybody else is following the law; I should follow the law, too."

 

Prof. Tracey L. Meares:  Well, the research isn't really about this sweet spot, Judge. That's so weird to call you judge because I don't really. That's . . . [Laughter] when we see each other elsewhere. But anyway. It's not about a sweet spot, right? It's really about processes, actually. And so I would say the sweet spot itself is produced when the relevant institutions are committed to the principles that actually support their own legitimacy. And the principles that support their own legitimacy are not having an orientation that the best way to ensure that people obey the law is to threaten them with severe consequences for their failure to obey it. That research is quite clear. The commitment to the four principles that I mentioned at the outset of the panel is truly the best way. And it's a commitment that almost -- that should be adopted by every relevant institution because, again, the research is quite clear that these are general principles, whether we're talking about police, whether we're talking about judges, whether we're talking about prosecutors, whether we're talking about public school teachers, by the way.

 

      My colleague Tom Tyler and I who run together the Justice Collaboratory, Tom has written a book called Why Children [Follow Rules]. And again, I know I keep picking on you, Greg, but you mentioned something about kindergarten earlier today. The first authority that a child encounters other than her parents is a schoolteacher. And so it's incredibly important that these kinds of authorities abide by these four principles so that kids, then adults, will be properly socialized into voluntary adherence of the law. And if you do that, then people will internalize that obligation.

 

      Now presumably, there's a number of you who actually don’t believe that that law is legitimate and you haven't internalized it. And I don't know if it's because you don't believe the substantive law is legitimate or if you don't believe that the person who is dictating to you the law is legitimate. But the research shows that when those authorities do follow these precepts, on average, folks are likely to internalize.

 

      Last point, if they don't, then authorities have to resort to deterrence, and that's not a great state of affairs. And it's incredibly expensive.

 

Hon. Stephanos Bibas:  Can you give some more concrete examples, what makes it more legitimate? I mean, are you talking about community policing? Are you talking about training police and prosecutors to talk to people respectfully and solicit their views? --

 

Prof. Tracey L. Meares:  Yes.

 

Hon. Stephanos Bibas:  -- What kinds of things do you suggest implementing?

 

Prof. Tracey L. Meares:  Well, that's a first. Transparency is incredibly important. Giving people reasons for what you do; not simply saying, "Do it because I said so." In the research we call this being authoritative rather than authoritarian. Authoritarian will backfire every single time.

 

Hon. Stephanos Bibas:  All right. Did anyone want to respond?

 

Mr. McGregor W. Scott:  I just want to go to that last point that you made about transparency because I completely agree with that. And I should mention I was an elected DA once upon a time before I was U.S. attorney, and a deputy DA before that. So I come from the state perspective as well as the federal. And while the elected DA, I thought it was incumbent when appropriate to publicly speak out on decisions that we were making in the office and why we were doing things to try to spur that sense of transparency within the community so that the taxpayers, the citizens, everyone understood this is the decision that's been made by the DA's office and this is why they made it, in that spirit. To promote that sense of transparency.

 

Hon. Stephanos Bibas:  Anything else on this? All right. Let's talk about the recent news. Now, this past week, on the one hand, Mr. Krasner won reelection by a very large margin. There were also a number of other cities across the country where both mayoral and DA races seemed, or at least have been read as, rejecting various progressive prosecutors. There was a Republican who defeated the progressive candidate in Seattle City attorney race. I gather that this is a misdemeanor DA. There's Minneapolis rejecting a proposal to overhaul the police department. There was -- in Buffalo this was one of the issues. I gather there's a recall effort in San Francisco for the DA there. Some people are calling this a repudiation of progressive policies. What does the panel make of this? Can we tell anything more generally from this series of local races?

 

Lawrence S. Krasner:  Well, I'm happy to mouth of as usual. [Laughter] Two years ago, the spotlighted progressive prosecutor race, the one that the institutional media and opposing party built up to be the Waterloo for progressive prosecution was Kim Foxx in Chicago running for reelection. Easily reelected by more than 10 points with her opponent spending a ton of money, a ton of money more than she had. The year after, the race was, "Will Gascón takeover in Los Angeles?"—which is the largest criminal justice jurisdiction in the United States—against an incumbent. He won; he actually won fairly easily at that time. Uh oh. No Waterloo. And then my race was considered the spotlighted race. And I won the primary with two out of every three votes and the general with almost three out of every four. And more important than that—and this is not about me—but it is about how people feel about criminal justice and how they will vote—more important than that, when you went to the neighborhoods most affected by gun violence during a terrible, national spike but also a spike in Philly in gun violence, I got 80 to 85 percent of the vote in those areas.

 

      People do not buy that stamping your foot and saying, "I'm going to hang you high," solves anything. And they don’t buy it because they've lived in those neighborhoods and they've experienced it and they know that it doesn't solve anything. That we have to do a different direction in terms of prevention.

 

      So I think what is probably much more telling than that momentary blip is the reality of what I just said. We're going from 10 percent of the U.S. population to 20.1 – almost 75 million Americans are living in a jurisdiction where they have selected and reselected a progressive prosecutor. They didn't just select the ideas; that was first. But then they selected the actions, and this includes Baltimore and so many other cities that I could name.

 

Richard Stanek:  Well, I look at it from -- again, just coming at it from a commonsense approach. Laws are made at the state level by the legislature. I'm not understanding how because an elected office of a district or a county attorney not at the state level can decide not to prosecutor, or what to prosecute, depending on what they told the residents they would do during the election themselves. If they don't want or like the policies or the laws that are in place, I'm not sure why we don't go back and change them at the state level.

 

      Law enforcement operates within the bounds that the citizens set for them, and those bounds are set through their elected officials and that process, the legislative process.

 

      And third, you talked about Minneapolis for a minute. And I'll just tell you about Minneapolis. I just lived through it. Again, I was a police officer there for 25 years and the sheriff for 12 years. The abolish and defund movement over the last 18 months across this country came to a screeching halt in terms of a vote by the residents of Minneapolis, all 375,000 of them, where they defeated that measure 60 to 40 – 60 percent to 40 percent. They said, look, law enforcement needs reform. Law enforcement needs some help. But in no way, shape, or form did they say they don't want the police.

 

      In fact, in some of the neighborhoods like north Minneapolis, one of the four police precincts, 75-plus percent of the African Americans who live in that precinct, and citywide, said we don’t want less police officers; we want more. It wasn't just a couple weeks ago where they sent the letter to the governor of Minnesota asking for National Guard troops and state troopers. Their neighborhood is under siege. We've had 84 murders already this year, the same amount that we had last year at this time. It's about 150 percent increase year-to-date, whereas the national average tells you it's about a 30 percent increase in homicides across the country in major U.S. cities. We've had over 650 people wounded by gun fire. Over 200,000 rounds have been fired, counted by what they call a "shot spotter," which is the gunshot detection systems.

 

      These neighborhoods are under siege, and they wanted help. They want more police, not less. They want reasonableness, not activism, not progressive. Four, if not five, of the city councilmembers of their reelection bids as a result of this, which was a good thing for most of those residents in Minneapolis.

 

Mr. McGregor W. Scott:  Yes.

 

Prof. Tracey L. Meares:  Unless you want to go.

 

Mr. McGregor W. Scott:  No, please. Go ahead.

 

Prof. Tracey L. Meares:  Okay. First, just a factoid. DA Krasner is referring to the numbers of people who now live in jurisdictions with prosecutors deemed progressive. Here's something that I wasn't aware of. Los Angeles County has more people in it than the state of Georgia. Just to give you perspective. That's where that big jump, I think, is probably coming, which is pretty stunning endorsement of this kind of approach.

 

      Now, you know, when you asked me, Judge, how do I make sense of what's happening, the way I make sense of it is, in a sense, yeah, repudiation of an idea that people don't want police at all. I think that actually doesn't make sense, but you can also understand why people organized under this slogan. It's much more attractive than, "Chapter 11 for Police," right? that's boring. And incomprehensible to people.

 

      But I do think, though, I'm only half joking but chapter 11 is about reorganization. And I do think what people are looking for is reorganization of the state's approach to delivery of public safety. And the reason why I think people are calling for more police because it's the only thing that many people in communities that experience what I call "safety depravation" violence is simply one symptom of safety deprivation. It's the only thing that they've been typically given from the state as a response to their problem when there could be many other solutions that the state could support.

 

      So with respect to violence and addressing interpersonal violence in these communities, we know there are many, many strategies, some of which have been tried in places like Philadelphia and Chicago and elsewhere. Community based solutions that haven't been funded to scale. We could do that, right? We also know that a really fulsome definition of safety would account for better housing, better education, health care, so on. But most people actually don't associate those kinds of goods with provisions of public safety. And they could and they should. That's what's going on here.

 

Mr. McGregor W. Scott:  So I want to make two points. You talked about the election returns and those kinds of things. And I think the simple point is we all know the pendulum, it never stops. The pendulum moves constantly. In the '90s, in the early 2000s, I agree in a large measure it went too far in one direction. But now it has swung way too far back in the other direction. So I think the election results in a way are the -- at least not necessarily swinging back, but at least maybe has paused at the extreme swing to the left.

 

      There will be a recall in San Francisco. The number of signatures turned in overwhelmingly exceeds the number required to put it on the ballot. And if I was a betting man today, he will be recalled because there's just a genuine pushback across the board in San Francisco.

 

      Now, the second point I want to make is Mr. Krasner's cited repeatedly this afternoon that the number of the people in the country represented, or who have elected progressive prosecutors has grown. That is a fact; I don't dispute that. But the DA typically is an elected official, and what does it take to run for office? It takes money. And I think a big part of this that needs to be brought out is that Mr. Soros made a brilliant, tactical, strategic, political decision some years ago to fund people like Mr. Krasner and Mr. Gascón to run for DA. And he has been overwhelmingly successful in that.

 

      We talked about George Gascón. He received millions and millions and millions of dollars from Soros and his associates, which made all the difference. You could not turn on the television in LA and not see a George Gascón TV ad in the run-up to the election. So that has to be said because that is a huge piece of this. And it's an arms race to raise money that traditional prosecutors can't keep up with. So I just wanted to make that point.

 

Lawrence S. Krasner:  All right, now I do have to jump in. I mean, it is true that George Soros and his foundation, in states where he's not permitted to coordinate, did that. In my state, there's no coordination permitted. All those of you who thought Citizens United was a good idea, thank you very much.

 

[Laughter and applause]

 

      This is the world you made. I don't particularly like this world. But if it's going to be an infinite river of money going somewhere, guess what? I can't stop a rich guy from liking me. [Laughter] And as it turns out, he did. You want to ask one of your members, Josh Hawley, how he got elected the first time? About half of all of his funds came from one person. So let's not pretend that only one side has money here.

 

      I was outspent, for the most part, in this last election. I had very, very little support coming from the outside. Of the couple million dollars that came in, only about $200,000 were coming from an outside source like that. My average donation of the thousands and thousands of donations was 50 bucks. My opponent's average donation was about 300 bucks. And those donations overwhelmingly came from Philadelphia.

 

      So while it is true that money plays a role, it plays a role for federalists running for U.S. Senate; it plays a role for progressives running for district attorney. That's true, and frankly, there's nothing that I can do about it until we can get rid of Citizens United, which I would do tomorrow.

 

Hon. Stephanos Bibas:  Let me throw out one more question and then we'll take some from the audience, so please think about them and feel free to line up. We've seen a massive spike in gun violence and homicides in the past year. And it's so large and so sweeping that the national effects swamp whatever the local effects are. What would a traditional, what would a progressive, what would a data-driven, or a legitimacy approach tell us about how to bring those numbers down? If you had any suggestions about how to integrate this with an approach of the police and prosecutors, what would it be?

 

Lawrence S. Krasner:  Well, I'm happy to keep talking. Let me just say this. I just heard Mr. Stanek say that the average increase in gun violence is 31 percent this year. It's 11 percent in Philly, so if you want me to fix your town, just give me a call, okay? [Laughter] I say that in jest because obviously district attorneys don't actually fix crime. We are one of many factors, probably one of the smaller factors. But pretty much every criminologist I've spoken to or read agrees that what happened here is called the pandemic. And when the pandemic happened, all organized sports ended in and out of school; high school classrooms closed; summer camp, summer job programs, job programs for teenagers and poor people; houses of faith closed, their programming closed; normal employment in a low-dollar economy got smashed because people making less than 40-grand got scorched in the pandemic and people making a lot of money profited during the pandemic profited. That's the truth.

     

      What actually happened here is we saw the striping away of prevention that we have taken for granted in which we have underinvested. And the minute Philadelphia reopened their classrooms and we had recreation centers that were open, public swimming pools that were open, the minute that happened, the level of shootings started to fall. It has been falling ever since. A few months ago we were at a 38-percent increase over last year. We're now at 11 percent.

 

      So I think there is no question that a very big factor here is prevention, and what we should be taking from this not "let's lock up more people." What we should be taking from this is let's triple the amount of money that we put into those things that obviously were so effective in making things better.

 

      But there's also an enforcement piece, and it is true that there is a terrible underinvestment in forensics in a lot of cities, especially Philly. There's a terrible underinvestment, and it really wouldn't take that much. It would be about 5 percent of the Philadelphia police budget to have a state-of-the-art lab, three times as big as what we have, that does some absolutely amazing forensics and could solve a lot of these cases before the first shooting turns into the fifth shooting. That is another aspect of it.

 

      I mean, there's another factor a lot of people talk about, which is the massive gun buy after the pandemic started, and also occurred, to some extent, during the unrest after the murder of George Floyd—and it was a murder. That is another factor that is named. But we're not going to get guns under control anytime soon. Let's be honest. Even if we did, there's more guns than people in a country of guns, which is what we have. We don't actually have a country of Americans; we have a country of American guns. So that we're not going to be able to fix. But what we certainly can do is we can invest heavily in enforcement in the right kinds of ways. We can invest heavily in things that interrupt violence and we can invest heavily in prevention.

 

Hon. Stephanos Bibas:  Who'd like to go next?

 

Mr. McGregor W. Scott:  Well, I'll just comment briefly. There's no question that COVID is a big part of this. But in places like Philadelphia and Baltimore, these homicide rates were increasing dramatically year by year long before 2020 arrived. So it's not one or the other. It can be both.

 

      Secondly, we need to recognize and our legislators need to recognize that there has been this dramatic increase in violent crime. In California we had a bill -- if you use a firearm in the commission of crime, if you brandish it, that can be a 10-year enhancement; if you fire it at someone, it can be a 25-year enhancement. And if you kill someone with it, it can be a life enhancement. Well, there was a bill to reduce that from a 10, 25 -- 10, 20—not 25—10, 20 life to a 1, 2, 3 enhancement. I mean, what sense does that make in the dynamic that we're facing right now in terms of violent crime, certainly in California.

 

      So we need to recognize, as I said a few moments ago, the pendulum has swung way too far. We need to get back to the middle and find the right balance between --

 

Lawrence S. Krasner:  -- I totally agree.

 

Mr. McGregor W. Scott:  -- prevent-a-programs, community -- I mean, that has to be a huge part of this, but we also have to hold people who commit violent crimes and murder other people, assault other people, rob other people accountable for what they have chosen to do.

 

Lawrence S. Krasner:  I don't understand where the idea comes that we're not doing that. Every prosecutor I know has been very clear that they want to clear the decks on the nonsense so they can focus on the most serious crimes. Where is the study, where is the data, where is anything to show me that George Gascón or Rachael Rollins or someone like me is anything less than very serious?

 

Mr. McGregor W. Scott:  Well, I'll give you an example. We are, right now, on a pro bono matter representing an elderly Asian American who was brutally assaulted in San Francisco by a young African American as an Asian hate crime. No question about it. He got one year diversion. So that's the kind of thing that we're seeing --

 

Lawrence S. Krasner:  -- That's an anecdote. That's not a study. That's not data. That's a single case. I got 40,000 cases year --

 

[CROSSTALK}

 

Mr. McGregor W. Scott:  -- representative of a broader pattern of what's going on.

 

Lawrence S. Krasner:  Yes, you're going to find some cases where there's a bad outcome. Well, how do I know that? How do I know you didn't just pull an anecdote out of somewhere? This is what has happened in criminal justice forever. We don't actually use data. We don't actually look at trends. We just pick a single case, even though it's a true story, and I'm sure it's true. And we say, obviously, that's what's happening all over.

 

      The truth is that over 30 years we had a decline in crime in these United States, and 65 percent of the public every single year believed crime was going up. You want some bad policy? How about this? Brainwash the electorate to believe something that's untrue for 30 consecutive years and you will have something that I consider a radical experiment, which is mass incarceration. You will have a turning away from what the past was. I would argue that what we're doing is conservative. We're trying to go back to the 1930s, '40s, '50s, '60s, the levels of incarceration we had at that time, which were 20 percent of what we have now.

 

Hon. Stephanos Bibas:  Would either of our other panelists like to chime in?

 

Prof. Tracey L. Meares:  Two points. One, if you want to know what to do, I would read Thomas Abt's book called Bleeding Out, which actually describes very specific strategies to address violence. And, actually, I'm not going to make the second point.

 

[Laughter]

 

Hon. Stephanos Bibas:  Mr. Stanek.

 

Richard Stanek:  I want to hear the questions from the real people in the audience.

 

Prof. Tracey L. Meares:  Yeah, me too.

 

Richard Stanek:  I mean, they've been listening to us about rule of law.

 

Hon. Stephanos Bibas:  So here are Judge Bibas's ground rules:  state your name briefly, three sentences, must, in fact, be a question, must end with a question mark or I'll cut you off.

 

[Applause]

 

Michael Isaak:  Michael Isaak. I'm from Tampa, Florida. I'm a criminal defense attorney, and I come from a jurisdiction where we have, what I would characterize a hyper-progressive state attorney, who by the way was funded by George Soros as well. As a licensed attorney, I took an oath to uphold the Constitution, as did everyone in this room, which includes the Sixth Amendment. So my concern about progressive ideology in prosecution is that everything from a third-degree felony down to a second-degree misdemeanor is divertible. And I think that diversion programs undermine the Sixth Amendment. Why should an individual spend money for a criminal defense attorney when they can walk into court and get a good result? Now, I agree with my colleague that a nol. pros. or a dismissal is a good result. But you can achieve that same outcome through fair prosecutors.

 

      The criminal defense attorneys police the police, so when you take away the incentive to hire private counsel, no one is pointing out violations of the Fourth Amendment or the Fifth Amendment.

 

Hon. Stephanos Bibas:  Is diversion being overused or abused?

 

Lawrence S. Krasner:  It's being underused. Mr. Isaak, first of all, I appreciate your question, and I thank you for it. As an ex-criminal defense attorney, I understand we're always looking for business [Laughter], but I also think it's fair to say, and I say this to you respectfully and in a friendly kind of way, the system isn't here for us all to make money. It's not here for police to make money on overtime; it's not here for a whole bunch more judges to get hired and get big, fat pensions at the taxpayer's expense. I don't see why there's any problem.

 

      In my jurisdiction, a third-degree felony is libel to be something like a car theft or it would be a purse snatching with no injury whatsoever and nobody getting knocked down. These are not the most serious offenses in the world. The most serious offenses in the world are shootings, killings, rapes, gun-point robberies, vicious assaults with knives and fractured skulls and all that sort of thing. I don’t see why that's a problem.

 

      I do know Mr. Warren, who is your prosecutor. He's an ex-federal prosecutors. I think you might surprise some of my colleagues by saying he's hyper-progressive because a lot us think he's sort of in that moderate middle. Member of the club, to be sure, but he's in that moderate middle.

 

      Now, I say all of that respectfully because I know you're more familiar with what's going on in Tampa.

 

Hon. Stephanos Bibas:  Anyone else on diversion? Thank you, at the back microphone.

 

Jay Schweikert:  Thank you. Jay Schweikert at the Cato Institute's Project on Criminal Justice. Mr. Scott and Mr. Stanek, both of you have spoken extensively about how you view it as inappropriate to the prosecutor's role to, essentially, exclude certain categories of crimes from actual prosecution. But you've also spoken extensively about your concerns with rising crime rates. And I guess I was hoping you could address what seems to me like the obvious tension between those two points, namely if a prosecutor wanted to come in to address public safety and rising crime, wouldn't one sensible way to doing that be to focus exclusively on crimes of property and crimes of violence rather than, say, non-violent drug possession or consensual sex work?

 

Richard Stanek:  Well, I think we've said for years from a law enforcement perspective that focusing on lower-level property crimes—some describe them as lower level—but focusing on property crimes help us from getting to the violent crimes, right? When we look at some of the violent offenses that happen, you'll see a rap sheet like this: two, three, four pages long of minor offenses. That's one.

 

      And then two, I just wanted to go back to one quick thing, and that was about if you want to reduce incarceration and rates, give law enforcement, give the public mental health resources they need. Right? You've all heard this over, and over, and over again, but I'll say it again. You look at the jails around the country run by the counties or the state department of corrections and you will see them filled to the brim with those that suffer from treated or untreated mental illness. And in some cases, they spend more time going through the criminal justice system because of the mental health issues than the underlying crime by which they were sent there to begin with.

 

Lawrence S. Krasner:  That's true.

 

Richard Stanek:  And if you don't give local law enforcement the resources to be able to deal with it and not close state mental health beds, then they have no option. They have no choice. They will bring back public order, but that means that someone will end up going to jail which is woefully inadequate to deal with those that suffer from mental illness.

 

[Applause]

 

Hon. Stephanos Bibas:  We've got time for one more question. The front microphone.

 

Marissa Cohen:  Hi. My name's Marissa Cohen. I'm a 5'9'' lesbian from New Jersey, so you probably would guess that I would know DA Krasner's work. From that end, I like you, so that's cool. So I get the gist that everybody's unhappy with law enforcement from some angle. There's something that needs to be done to some degree. But we haven't made any real decisions together here. We've all kind of smirked at each other. So the idea that when we're looking at force, right, the idea of force -- we're not just stuck with that you said, Mr. Scott, on deadly force because if you look, we have things like Whren v. United States, right? We have California v. Acevedo. You could be pulled over on the side of the road, like JZ said, going 55 in the 54 and be "license, registration, get out of the car," handcuffed and brought to jail for going one mile per hour over the speed limit and it didn't matter --

 

Hon. Stephanos Bibas:  All right that's two sentences. One more sentence, a question.

 

Marissa Cohen:  Okay, sorry. So qualified immunity. Question mark. What are we going to do about it? Should we let -- is there some other way that we can enforce policing on police officers? Some sort of reform that isn't defund the police but is something else because if people are talking about defunding the police, there's an issue there that doesn’t lie within the extremes.

 

Hon. Stephanos Bibas:  All right. Qualified immunity. Pro and con.

 

Prof. Tracey L. Meares:  I'll just jump in and say regardless of your position on qualified immunity, let's say that you're actually in favor of it, it really won't do much in a world in which the Supreme Court's decision in Monell still stands because having individual officers be liable in a world in which there is not money to pay those judgments is not going to incentivize to change their behavior. So, essentially, if you're going to get rid of qualified immunity, you also have to create respondeat superior liability for cities, which means we have to get rid of Monell.

 

Lawrence S. Krasner:  And I'd say dump it, and dump it for prosecutors, too. There are prosecutors in this country who have been serial kidnappers who have time and time again hid evidence to which the other side was entitled, and we find 25 years later an innocent person in jail based on DNA and a guilty person who got away and will never ever be accountable because they've passed away or they've disappeared or whatever it is. We need to take all of these special protections in a system that's supposed to be equal away from government even if it turns out that it doesn't have a practical effect. It has an important, symbolic effect because it says we are not a caste system.

 

Hon. Stephanos Bibas:  All right. Any last words? Well, I want to thank you all, but before you go or applaud, I want to remind you that there's going to be the Antonin Scalia Memorial Dinner. There will be a reception at 6 o' clock and dinner at 7 o' clock at Union Station. And with that, please thank our panelists for an exceptionally stimulating discussion.

                     

 

3:30 p.m. - 5:00 p.m.
Religious Liberty after Fulton v. City of Philadelphia

2021 National Lawyers Convention

Topics: Religious Liberty
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". This panel discussed "Religious Liberty after Fulton v. City of Philadelphia."

Fulton v. City of Philadelphia was a victory for religious liberty, but it is unclear how broad its implications will be for other cases and what the opinions in Fulton portend for the future of Employment Division v. Smith. The Court’s majority opinion relied on provisions of Philadelphia’s foster care agency contracting process, but the majority also potentially reworked Smith’s understanding of when government regulation is "generally applicable." Meanwhile, several justices indicated a willingness to revisit Smith altogether, though what a post-Smith free exercise jurisprudence would look like remains unclear. This panel will explore these and other questions raised by Fulton and the future of religious free exercise.

Featuring:

  • Prof. Akhil Reed Amar, Sterling Professor of Law, Yale Law School
  • Prof. Thomas C. Berg, James L. Oberstar Professor of Law and Public Policy, University of St. Thomas School of Law
  • Prof. William Marshall, William Rand Kenan, Jr. Distinguished Professor of Law, University of North Carolina School of Law
  • Ms. Lori Windham, Senior Counsel, The Becket Fund for Religious Liberty
  • Moderator: Hon. Lawrence VanDyke, U.S. Court of Appeals, Ninth Circuit

Speakers

Event Transcript

Bill Saunders:  Let's get started in just one minute. It's a great week to all see each other, and a lot of people are taking the opportunity to say hello to old friends, and I don't want to interrupt that, but we got a great panel and a great topic. So again, welcome.

 

This panel is put on by the Religious Liberties Practice Group. My name's Bill Saunders with Catholic University. I'm the Chairman of that Practice Group. I invite any of you that are interested in these issues, if you haven't joined the Practice Group, please do. You can see me or you can see Dean Reuter or someone and join it. Yes, so I welcome all of you to do that. And I welcome you to this panel.

 

The other announcement is, as you all know, D.C. regulations require wearing a face mask unless you are eating or drinking or speaking on this panel. So let me just hand it over to our Moderator who is Judge Lawrence VanDyke of the Ninth Circuit. And perhaps the -- I was going to say, the greatest thing to recommend him, but the dearest thing is before he ascended to the bench, he was a member of the Executive Committee of the Religious Liberty Practice Group so, Judge VanDyke.

 

Hon. Lawrence VanDyke:  Well, thank you, Bill, and welcome to this year's panel sponsored by the Religious Liberties Practice Group which is titled, "Religious Liberty After Fulton v. City of Philadelphia." And it's my honor to moderate what I think we've assembled as an amazing panel to discuss one of the Supreme Court's most recent religious liberty cases, Fulton v. City of Philadelphia.

 

And you'll notice, I say recent instead of blockbuster or landmark because I don't want to taint the well here. And I hope our distinguished panelists will discuss this issue this afternoon, but there's some dispute about whether and what exactly this case did, the Fulton case. It was widely anticipated, I think, to do a lot and we're not sure exactly what it did. So that's one of the things that I'm hoping to hear about from our panelists today.

 

But while Fulton will be the center of gravity of their comments, I think, I'm hopeful that our panel will address some broader topics including what the future of Employment Division v. Smith is. Is there a better theory for the Free Exercise Clause? And why does the Supreme Court seem so enamored with deciding religious liberty cases so narrowly, perhaps maybe is something we can talk about.

 

Let me give a brief introduction of each our panelists in the order that they're going to speak, and then I'm just going to let them go without an introduction in between. Each of the panelists is going to give us about eight minutes of opening remarks, plus or minus, and then I'm going to -- once they've all finished, obviously, I'm going to let them respond to any of the other panelists, remarks if they'd like. And I might exercise the Moderator's privilege to ask a question or two, but then I really want to open it up and let all of you ask questions to our panelists.

 

I'm only going to give a brief biography of each of the panelists because I think you have the materials somewhere. I don't actually know where but they're available somewhere online. And if you want to -- and you want to hear from them, not me. And we're going to start with Lori Windham. She's Senior Counsel at Becket Fund for Religious Liberty, and I've actually known Lori since we went to law school together. And I think she may have started at Becket right after law school, Lori, I can't remem --

 

Lori Windham:  I did.

 

Hon. Lawrence VanDyke:  And she's been there defending religious liberty both in a courtroom and also by testifying in front of governmental bodies and other entities ever since. But most recently, and perhaps most relevant to our discussion today, she was the one who argued the Fulton case on behalf of the petitioners at the Supreme Court, winning that victory for her clients.

 

So we're going to start with Lori, and then she's going to be followed by Akhil Amar, who's a Sterling Professor of Law and Political Science at Yale University where he teaches both in the college and at law school. He's authored over 100 articles and multiple books and is widely acknowledged for his originalism research. He's been cited by the Supreme Court in over 40 cases and perhaps Professor Sunstein said it best in a review of one of Akhil's books where he said Justice Scalia is the most famous originalist, but in the law schools, the most influential originalist may be Akhil Reed Amar. So we're very delighted to have him talk about this topic today.

 

And then after Akhil, we'll hear from Tom Berg, Professor Tom Berg, who's the James L. Oberstar Professor of Law and Public Policy at the University of Thomas School of Law. At St. Thomas, Professor Berg teaches on religious liberty, con-law, and runs their religious liberty clinic. And he and Professor McConnell have one of the leading textbooks on religion and law. And Professor Berg has authored around 70 briefs in Supreme Court and in other courts on religious freedom issues.

 

And last but not least, we'll end with Professor Bill Marshall, the William Rand Kenan Jr. Distinguished Professor of Law at the University of North Carolina School of Law, where he teaches, among other things, on the Free Exercise Clause. And Bill -- when I was reading Bill's bio, I was happy to see that it looks like he spent time in multiple states' Attorney's General's office which has a soft spot in my heart because I spent time in multiple states' Attorney Generals' office. He was a deputy counsel and a deputy assistant to the President during the Clinton administration and also served, I think, as assistant general of Ohio and the special assistant attorney general for the State of Minnesota. So I won't ask him how he got between those two states because then he'll ask me how I moved around so much, but having worked in those, that's a soft spot in my heart.

 

So, Lori, why don't you start us off?

 

Lori Windham:  Thank you, Judge VanDyke. And thank you all for being here this afternoon. I want to start off, of course, talking about Fulton. And I want to talk about Sharonell Fulton who's a single black foster mom, over -- more than 20 years of service, she's cared for more than 40 children in her home, giving them a home, loving them, caring for them, what she says, and she said it again and again, is there's room in my heart, there's room in my home, I want to care for these kids.

 

      In March of 2018, the City of Philadelphia decided it would no longer allow any foster children to be placed in Sharonell's home because Sharonell works with Catholic Social Services of Philadelphia, an agency that shares and affirms her faith and has supported her on her foster care journey. The City of Philadelphia learned that Catholic Social Services did not provide written home study endorsements for unmarried or same-sex couples. Even though no same-sex couple had ever approached them asking for that kind of endorsement, they decided that they would no longer place any children with the agency or with any parents who worked with the agency.

 

      I'm going to fast forward now to the end and skip over the part you all actually want to hear about to tell you what's happening now, which is that today, Catholic Social Services and its families are placing children once again. They're welcoming children into homes, uniting them with loving parents, and helping them through this very difficult phase of life. They're doing that because we have a consent decree with the City of Philadelphia. The City of Philadelphia is permanently enjoined to continue working with Catholic Social Services, not excluding them or excluding families like Sharonell's because of their religious beliefs and practices.

 

      As Judge VanDyke alluded to, that might come as surprise to some of you in the room because you're thinking but wait, I'm not sure how consequential this decision was. I'm not sure why it would end up this way. I actually have a theory about why it ended up this way. Only the City's lawyers know for sure why this is where we ended up, but I think the reason it ended up this way is that we don't have the same Free Exercise Clause that we had in 1990.

 

      If you remember one thing that I say today with this very distinguished panel, I don't know you're remember anything I say today, but if you remember one thing I say today, remember this. It's not the 1990s anymore and not every '90s trend comes back.

 

[Laughter]

 

      What we have is a Free Exercise Clause that has developed and evolved. And as it stands today, Employment Division v. Smith actually only governs a minority of cases, and I would say a rapidly shrinking minority of cases.

 

      Now, I want to speak for a few minutes as a litigator, talking about when these cases come before you, how do you think about it? I know we're going to have a lot of discussion on the history and the theory today, and I’m really excited to hear it, but I want to set the table a little bit to talk about how we got here.

 

      After Smith, Congress came together with overwhelmingly bipartisan majority -- this is a thing that happened in our lifetimes. They came together and they passed the Religious Freedom Restoration Act, and it was signed by President Clinton, also known as RFRA, a four-letter word now in many jurisdictions. But Congress said we don't want the Smith standard; we want a standard that is more protective of religious exercise. If the government burdens religious exercise, it needs to pass strict scrutiny. RFRA applies to all federal law and the implementation of that law. And that's how it applies today.

 

      Congress later passed RLUIPA, applying that same standard to even state and local actions in the land use context and in prisons. And you have about half the states that have also said either by legislation, by constitutional amendment, or by state Supreme Court decisions that you know, we think we can do better than Smith too. We want to provide our citizens with more protection than is currently available under the Free Exercise Clause, and so we want a standard that looks like RFRA. And that is the standard they have.

 

      And so when you're looking at a free exercise case, RFRA, RLUIPA, or state law, rather than Smith, is going to apply in many, many cases. Ask the Little Sisters of the Poor. And so the Supreme Court then continue to develop the doctrine, independent of what was going on in the legislative arena. And they, of course, passed -- they handed down the Lukumi decision where they started to explain this whole neutrality and general applicability thing that was in the Smith decision.

 

      Lukumi's really helpful, but the circumstances there are pretty extreme. And so in the lower courts, my experience has been that lower courts often distinguish cases from Lukumi because they're like that's pretty bad. What happened here wasn't nearly as bad, and so we don't think Lukumi applies. But what has happened, especially in the last few years, is that the Supreme Court has really put some teeth into the neutrality and general applicability standards. They did that in Trinity Lutheran, where they applied it even in the context of government funding and said look, if you're going to exclude a religious organization because it is a religious organization, even absent any kind of proof of animus, that is not a neutral law. And so that is something that is not governed by Smith. It's going to be governed, arguably, by strict scrutiny and others can debate about that.

 

      They did the same thing in Espinoza, where they said even in the school-funding context, you're not going to be able to exclude religious schools. They also looked at the negative and dark history of the Blaine Amendments and said this is not a neutral policy. You're not going to be able to treat religion in this way. It's going to go to strict scrutiny. They took on the Masterpiece case, and they said if the decision-makers, the government officials who are in charge, do not remember their own high duty to the Constitution when they're making these decisions, that's not neutral either and that's not governed by Smith.

 

Then, we had a fascinating series of decisions that came up in the context of Covid where you had states across the country that had shutdowns. They restricted religious gatherings, and they restricted other gatherings as well. So these questions come to the Supreme Court, and the Court is asked again and again how far is too far? Are these laws neutral and generally applicable because there's a lot of people who are restricted from gathering in a lot of different ways.

 

And yet, the Court, in a series of decisions starting with Diocese of Brooklyn and ending with the Tandon decision, said no, if you're going to say that you can have 20 people together in a factory but not 20 people together in a synagogue, that's not a generally applicable law. Even if you are restricting other kinds of gatherings as well where you're going to treat certain secular activities that pose similar risks better than gathering for religious worship, that's not a generally applicable law. That's not covered by Smith. We're going to go to strict scrutiny.

 

And then we come to Fulton where the Court looked at individualized exemptions. What we had in Fulton was a contract provision that said that there's certain rules that apply but the commissioner in her sole discretion could choose to waive those rules in certain circumstances. And the Supreme Court said look, when you have a government decision-maker who can unilaterally decide in a discretionary way where the rules apply and where they don't, this is not the kind of neutral generally applicable law that Smith envisioned. The Chief Justice said this is a case that falls outside Smith. It's an individualized assessment.

 

This was interesting because Smith had distinguished Sherbert in a prior line of cases on the basis that those were individualized assessments. This was something that had previously been used in the unemployment context, and the Court applied it in Fulton and showed that the individualized assessments piece of it actually does have some teeth.

 

This is a line of cases, following Smith and Lukumi, but there are other lines as well. There's the Hosanna-Tabor decisions, Our Lady of Guadalupe decision, where the Supreme Court said that there's a line of cases where we're not even going to look at Smith at all. Justice Scalia was quite clear in the oral argument of Hosanna-Tabor that this wasn't a Smith case. This is a case about a church's ability, a religious body's ability, to select its leaders, to engage in its own internal decision-making, and to run its own affairs. These are cases that are not governed by Smith.

So I know my time is running short. This is the problem with litigators. I will say very briefly, what we have now is a Free Exercise Clause that starts to look a lot more like a free speech clause. This is great news for law professors. Those exam questions are going to be so much easier to write because it's not one standard that you apply anymore. Like a free speech case, you say what kind of case do I have? What kind of circumstance? What kind of restriction on religious exercise? Is this a ministerial exception case? A church autonomy case? Is this a case of individualized exemptions? Is this a case of non-neutrality? Is this a case of different kinds of rules for different sets of people?

 

And that's where the starting point is. Smith is still wrong. It still ought to be overruled, and I'm sure we'll have a long discussion about that today but what I want to leave you with is the idea that Smith no longer controls most cases. And I'm happy to turn it over to Professor Amar.

 

Prof. Akhil Reed Amar:  Thank you. It's such an honor --

 

[Applause]

 

      -- such an honor to be with my dear friends in The Federalist Society. So let's move from the recent case to originalist first principles. We'll start with the First Amendment. We'll start with its first word, "Congress." The addressee of the First Amendment is Congress. It's about Congress making a law, and I've already told you enough to explain that Smith from a textualist and originalist point of view, before we get to the Fourteenth Amendment which may change things here as it changes things in so many other areas, that Smith is rightly decided.

 

      You see, it's about the making of a law and telling Congress that it can't make law of a certain sort. That's the addressee and at the time Congress is making -- imagine it makes a law saying it's a federal crime to kill or maim postal workers. It's necessary and proper. But now there's some religion that believes in killing postal workers. Now, that religion -- Congress might not know that that religion exists. That religion might not even exist at the time the law is made. Even if the religion does, the religious practice might not exist. Doctrines within religions change just as within the Court.

 

      Congress has made a perfectly valid law, you see, and it's the addressee of the First Amendment: Congress, make no law of a certain sort. So that just -- almost the first word or the first three words. Now, let's think about it more in a more fulsome way. Intertextually, where is that phrase coming from, "Congress shall make no law." Well, it's coming -- it's a riff on the Necessary and Proper Clause. Congress shall have power to dot dot dot, make all laws necessary and proper for certain purposes.

 

      And once again, you see that it's got to be about laws regulating religion as such, either formally or with the intent or the purpose of harming or benefitting perhaps this religion or that religion. And that's not a proper purpose for Congress. And so once again, the original First Amendment is about laws targeting religion as such.

 

      Let's think about it more broadly. Why are the speech and press clauses in the same amendment as the religion clauses, because they're not in any state constitution at the time of the 1780s and '90s. Those provisions in state constitutions for religion and speech are separate, but why are they put together in the First Amendment? Because this is also an amendment about federalism. There are domains over which Congress has no enumerated power. These are domains reserved to states.

 

      States can have established churches, Congress can't. But states can and in fact, Congress can't mess with established churches, can't try to dis-establish a state's church. It's not just that the First Amendment doesn't apply against the states. It's a state choice to have established churches, and half of them did are protected from federal dis-establishment because that would be a law on the topic of, in regards to. Respecting is the key word of the First Amendment and establishment of religion.

     

      So the First Amendment is a Tenth Amendment like idea of local option. It's an American equivalent of the Peace of Augsburg of 1555 and the Peace of Westphalia of 1648. Cuius regio, eius religio: there will be no imperial policy on religion, but it will be left to local option. The religion of the prince is the religion of the principality. It's a federalism idea of sorts so once again, if that's so, it can't be about accommodation as such. It has to be basically about laws regulating religion as such, both because it's about Congress and about the making of a law and this isn't a necessary and proper purpose and this is a domain beyond federal power.

 

      And finally, note the absolutism of the phrase, "can make no law." There's no room for any override of any sort, any compelling state interest of any size or shape. So textually, you see -- and it could never be the case that just because the religious practice is sincere, it has to trump. The Aztec religion demands the sacrifice of non-believing postal workers who aren't members of -- who aren't co-religious. They have to be thrown into the volcano.

 

      Well, that can't be right. There has to be some sort of override and -- but "shall make no law" doesn't admit of any of that. Now, so I've just shown you in about three minutes why my dear friend Michael McConnell has to be wrong in his article in the Harvard Law Review on the Free Exercise Clause. And I love Michael, but no.

 

      And Justice Amy Coney Barrett says, hmm, Justice Alito who, another one of my dear friends, who's channeling Michael McConnell doesn't really seem to have very much history and support, that's true. This is a very big thing. If there really were an exemption from ordinary neutral secular laws, then we'd expect there to be a lot of discussion about this and what's the nature and shape of the override and all the rest. This is a big elephant. And proverbially, elephants don't hide in mouse holes, and there's just not a lot of actually history.

 

      So she says that. She acknowledges that in Fulton, but she actually says but textually, it actually seemed that there is an argument for exemption. No, there isn't. I just gave you a bunch of clear textual arguments. Professor McConnell says well, the Framers believed in the logical priority of God. One's duties to the Almighty are prior to everything else, and so they have to actually override other things. That can't be right because once you say that, there's no override -- there's no compelling interest trump to that. And again, that can't be right. We need some compelling interest trump to that. And that's ultimately going to be judged by a secular standard, not a religious standard. So we're no longer in -- no matter how strict the scrutiny is, it's still a secular standard so we don't have the logical priority of God. So once again, with due respect, Michael, no.

 

      Now, does that mean that there's no strong argument for religious accommodation? No, it does not because I know it's going to surprise you, but Fulton is not a First Amendment case. And most of the religious free exercise cases that pop into your head, most of the "Bill of Rights cases" that you would think about if I just played a free association game, think of ten important Bill of Rights cases, almost none of them actually would be First Amendment cases.

 

And strictly speaking, almost none of them would be Bill of Rights cases because the cases that you're thinking about involve state and local governments, which from strict point of view are not First Amendment cases or Second Amendment cases, apart from Heller, or Fourth or Fifth or Sixth. They're Fourteenth Amendment cases. They're incorporation cases as was Fulton. Of course, the Fourteenth Amendment is about not just states but there are arms and instrumentalities, cities and counties. And note how it's tracking the language of the First Amendment but inverting it.

 

      No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States. Shall make no law abridge. That's the language of the First Amendment but it's inverting it, you see. Now, it's about states and not just Congress. Oh, but it's also not just about the legislature or the state legislature or Congress making the law, it's make or enforce a law. And now, we're focusing on the moment of enforcement when the religious practice does indeed exist and not the moment of making.

 

      So hmm, maybe actually everything that I just said is inapplicable given that we're talking about the Fourteenth Amendment and not the First Amendment. We still have to figure out well, what -- and maybe it's actually a privilege of citizenship for there to be an effect substantive and not merely formal entitlements of a free exercise that actually have weight even against a general neutral secular law. It's possible to imagine that's a privilege.

 

      We're still going to need to figure out what the boundary of that privilege is and what would count as a kind of override, a compelling interest. This was the thing that bothered Justice Scalia most of all in Smith in Footnote 5 of Smith, and there are several possibilities, and here, Ill end. So there are at least two ideas -- and by the way, I'm summarizing to some extent the work of my brilliant Yale student, now professor, Kurt Lash in an article in 1994 in the Northwestern Law Review, which I commend to you all. He writes about the second adoption of the Free Exercise Clause, religious exemptions under the Fourteenth Amendment, 88 Northwestern Law Review at page 11 -- excuse me, 1106, 1994.

 

      Okay, finally. So what's the override? Well, one idea is equality. Just if there are exceptions made for factories, why not for churches? And then the question is how strictly are you going to apply that? If there's any exemption anywhere for a secular, does the religion benefit, kind of strong most favored nation status? Or on the other side, do you actually have to have lots and lots of other exemptions before we say gee, churches should benefit as well? So how strictly you're going to enforce that equality, especially because churches may be different in certain respects. People aren't maybe breathing heavily and singing in factories next to each other the way they are in church.

 

      So but second, and my colleague alluded to this with the Hosanna Tabor case, but might I think about another idea which is an island of Lochner, a kind of Libertarian idea, an idea of privilege as in privacy about the religious organization regulating itself, its own internal operations, picking its leaders, regulating its members with no external spillover on non-believers. So on this view, jumping into the volcano enthusiastically if you're a co-religionist is maybe protected but throwing non-believers into the volcano, you see, would be a very different thing indeed.

 

      And with that, I think I'm done. So thank you very much. And I'd like to turn it over to my dear friend Professor Berg who happens actually to be a co-author of Professor McConnell's, for whom, once again, I have the highest regard in every way.

 

[Laughter]

 

      Truly. Truly.

 

Prof. Thomas C. Berg:  He doesn't say he had the highest regard for me but --

 

[Laughter]

 

Prof. Akhil Reed Amar:  I didn't trash you.

 

[Laughter]

 

Prof. Thomas C. Berg:  Well, it's wonderful to be here. Thank you very much for having me. And I just had my screen go away here and let me get it back.

 

      Okay. So Fulton left open the question whether the Court will revisit the Smith case and subject burdens on religious exercise to vigorous scrutiny even if the law in question is neutral and generally applicable. I think it does matter whether the Court overrules Smith. And we can talk a little more on the discussion about why it does but let me just talk about what the Court could do if it decides to overrule Smith.

 

      So Justice Alito argued at length in Fulton for overriding Smith, had two other votes joining him. Justice Barrett joined by Justice Kavanaugh agreed that as a matter of text and structure, it's difficult to see why the Free Exercise Clause offers nothing more than protection from discrimination. So five justices indicated that Smith was mistaken, and there may be more than five. But Justice Barrett was not ready to reconsider Smith when the case didn't require it, and she had questions about what would replace Smith. So I want to use my short time here, opening remarks, to address some of her questions.

 

      So first, Justice Barrett is right I think that the textual and structural arguments against Smith are convincing. I say this with some trepidation having just followed Akhil Amar, but the First Amendment says Congress shall make no law prohibiting the free exercise of religion. A law that prohibits religious exercise in a particular application still prohibits religious exercise even if it applies to other behavior as well.

 

      Congress has made that law and in a particular application, it may burden religious freedom. If you say that the mere application of a law can't violate the Free Exercise Clause, then you are saying there also should be no as applied challenges under the Free Speech Clause, which likewise begins "Congress shall make no law."

 

      To the extent, for example, that there were a federal disturbing the peace law, that doesn't any more than the kind of laws that might affect religion, that law doesn't immediately anticipate that someone is going to speak and disturb the peace in the exercise of their speech. There are other ways to disturb the peace, right? So there wouldn't be a basis for challenging that law in application if we focused only at the moment of the adoption of the law by Congress or by the legislature. So I think there's a lot to be said textually against Smith.

 

What should replace Smith if the Court does decide to overrule it? Justice Barrett was skeptical about going back to a categorical strict scrutiny approach. Particularly, she said, "When the standard for conflicts between generally applicable laws and other First Amendment rights like speech and assembly has been much more nuanced." That's a quote from her concurrence.

 

      She doesn't say what those cases are, the more nuanced ones, but I think she's referring to two sets of cases which both apply pretty weak intermediate review. The first is United States v. O'Brian upholding the conviction of a war protestor for destroying a draft card. And the second set, I assume, are the cases that uphold content neutral time, place, and manner restrictions on speech.

 

      But in both of those situations, the Court has emphasized either in the case itself or in later explanations of it, that the speaker had alternative means of communication. A prohibition on symbolic conduct like burning a draft card leaves many other ways to express the same view. And the court allows time, place, and manner restrictions on speech if but only if they leave adequate alternative channels of communication. Prohibitions on religious practice are usually quite different. They leave no other way to follow the practice in question. If you face a substantial penalty for acting according to the tenants of your faith, it's no answer to say that you can follow other tenants of the faith.

 

      So in Holt v. Hobbs, the Court unanimously rejected the State of Arkansas's argument that barring a Muslim prisoner from wearing a beard did not substantially burden his exercise of Islam because he could still do many other Islamic practices, right. Wearing the beard was the religious exercise. Religious practices are not fungible with each other. And assessing whether other things can be -- all other practices can be an alternative to the one that's prohibited involves courts in difficult religious judgments that are based on a false premise. Each of these practices is itself the exercise of religion.

 

      So religious exercises are usually more like the multiple situations in which the court has applied strict or at least rigorous scrutiny to generally applicable laws affecting speech or association. First, there are the cases about compelling organizations to disclose members or donors, dating back to the NAACP v. Alabama. Disclosure requirements mostly regulate conduct, not speech, and disclosure serve in anti-corruption purpose, unrelated to suppressing expression. But the Court is nevertheless requiring exemptions under rigorous scrutiny when the law significantly deters political association.

 

      Now, the Americans for Prosperity decision last term muddles or muddies the approach with the governing approaches but six justices still take the position that serious burdens on association through compelled disclosure laws require compelling justification. Then there are the cases about expressive association and non-discrimination laws, Boy Scouts v. Dale applied strict scrutiny to invalidate application of a generally applicable non-discrimination law.

 

      The Hurley decision invalidated application of a general public accommodation law that forced parage organizers to admit a group inconsistent with their message. The JCs and Rotary cases held that strict scrutiny would apply if the compelled admission of women to those organizations would conflict with the organization's ideological positions. It just simply didn't conflict with their positions.

 

      So for all of these reasons, in a recent article for the Cato Supreme Court review, Professor Doug Laycock and I have argued that the compelling interest test or at least some form of rigorous strict scrutiny should apply to substantial burdens on religious exercise by analogy to these other speech cases. So the review -- the better analogy from the speech cases is to the ones that apply rigorous scrutiny rather than low-level scrutiny.

 

      The compelling interest test is rigorous but in cases about religious conduct exemptions, it has not led to limited -- I'm sorry, less protection, the kind of anarchy that Justice Scalia feared in Smith. Government has greater interest in regulating conduct and in regulating speech and generally applicable laws have more credibility and are easier to justify than laws that make significant exceptions for other interests while restricting religion. If the Court thinks that strict scrutiny should really be reserved for those cases where the government action is virtually certain to be invalid, then it can adopt some form of rigorous review that's short of that virtual absolute presumption.

 

      There are plenty of models from the vigorous intermediate scrutiny in sex discrimination cases to the exacting scrutiny that the plurality adopted in American Prosperity Foundation -- Americans for Prosperity. The danger is that intermediate scrutiny devolves into that weak version that was used in the draft card cases and others. And so if the Court decides that strict scrutiny is to be reserved for just a few categories, it should expressly instruct that any kind of intermediate review in free exercise cases should still be rigorous.

 

      Under a general approach of rigorous scrutiny, more specific categorical rules can develop over time, much as they've developed in speech cases. And those rules can rest both in history and in categorical balancing of interests. The ministerial exception that Lori Windham referred to, which is absolute within its scope, is grounded in the history of protecting decisions about religious leadership against government interference. But it also reflects an assessment that suits by ministers against their religious employers severely burden religious exercise and that society has a weakened interest in protecting ministers who after all have chosen to associate with that faith.

 

      So other categorical rules like this can develop and I'd be glad to discuss some of those kinds of situations in the back and forth. Thanks.

 

Prof. William Marshall:  I want to thank my fellow panelists. I want to thank The Federalist Society for inviting me here today, and I really want to thank The Federalist Society for continuing to have conventions that welcome dissenting views or ones that people disagree with. I think it's so important. We live in a world where people don't seem to ever want to listen to anybody who disagrees with them anymore, and that's coming from both sides. And I think it's time that we continue to have this kind of tradition of talking against each other. And I come from a family like that. My dad was a Conservative Republican. My mom was a Liberal Democrat. And even though my mother was so much smarter --

 

[Laughter]

 

      -- no matter what, we were able to defend whichever positions that we wanted to politically. You know, having said that, there's a little irony of having a former board member of the American Constitution Society here today to defend Justice Scalia.

 

[Laughter]

 

      But somebody is going to do that, and I guess it's going to be me.

 

      When Sherbert v. Verner, the case that Smith overruled, was decided, it was an iconic liberal case. It was decided by Justice Brennan over the dissent of the leading conservative theorists on the Court at that time, Justice Harlan. I was one of only a handful of academics who supported the decision at that time. Yes, I'm that old. I know I don't look it but yeah. And I was criticized constantly and mocked even by my liberal friends for my support of the Smith decision.

 

And I did so under the -- because I found Justice Scalia's reasoning persuasive as he pointed out, virtually, religious belief can apply to anything. So virtually, any law can be subject to a free exercise challenge. In order to evaluate the challenge, you have to look at very sensitive issues like is the claim really religious? Is the believer sincere? Is there a burden on the believer? Those inquiries themselves create constitutional kinds of problems.

 

So Justice Scalia was concerned that either using that, the compelling interest test, which is used in other areas, would be watered down or the compelling interest test would make virtually every law presumptively unconstitutional and, as Justice Scalia said, make every person a law unto himself. I also added another reason which was based on a case called Thomas v. Indiana Review Board, in which a religious claim—this is under the Sherbert regime­—was able to get an exemption from a requirement that he needed to work in an armament factory based upon his religious belief.

 

And the Court made it clear that if it was just based on a philosophical belief, no exemption. And my question at the time, is that an appropriate distinction? And it's also intentioned with free speech jurisprudence which says that various views should be treated equally. I think those are particularly good reasons then and I still do.

 

The question that Fulton raised was should Smith be overturned? And I just want to briefly go through the criteria of when you overturn a case stare decisis, that was announced in the Janus case from a couple years ago, you may remember. There are five criteria that the Court listed: the quality of the reasoning, the workability of the earlier decision, inconsistency with related decisions, reliance, and whether there have been some changed facts.

 

There's been a lot of discussion about the quality of the reasoning, whether it's originalist or not, so in the interest of time, I'm going to jump over that. I don't think there is a serious claim by Smith defenders such as myself that there was a reliance issue there. There is a reliance issue there, so I'm going to seed that one. But with respect to the other three points, the first is on workability. And that was one of the focuses of Justice Scalia's decision in Smith, as I just talked about.

 

The idea that laws should be presumptively unconstitutional is not a workable standard, and it didn't turn out to be. The Court found that -- the Court did not uphold challenges against tax laws. It did not uphold challenges against a fair labor standards act case even though exempting a small religious organization from having to pay minimum wage would certainly not depress the wage market around that. The thing is that the compelling interest test, if applied stringently, would allow the religious claimant to win virtually every time. That is why it was never stringently applied under Sherbert.

 

With respect to the inconsistency with related decisions, the decisions that are raised most often are Hosanna-Tabor. But as Lori pointed out, those weren't decided under the Free Exercise Clause. Those were decided under a principle of church autonomy which predated the Smith decision which Justice Scalia didn't suggest was in doubt by the Smith decision. And finally, there's the changed understanding of relevant facts. I think this may be in large part the main consideration that is motivating some to overturn Smith.

 

We can see that in Justice Alito's speech here last year: the belief that religion is under attack. I think Justice Alito is referring primarily to mainstream religion. And it is true now, for example, that a majority of white Evangelicals believe they are discriminated against, even though 70 percent of the population is Christian. But even if we accept the fact that some majority of religions now feel they are being marginalized, the fact is minority religions have consistently been under attack in American history: anti-Semitism, anti-Mormonism, anti-Catholicism, and more recently anti-Muslim.

 

Certainly, Justice Alito is correct that religious discrimination in any form should be condemned. I completely agree. I'm just not sure that there has been a change in the relevant facts. Unfortunately, the fact that religious discrimination exists in the United States is not a changed fact. So if at least we are applying the Janus factors, the arguments for overturning Smith are not particularly compelling.

 

But let me turn to another way of looking at Smith. Justice Scalia's opinion in Smith was not an outlier. Rather, it reflected two broader jurisprudential projects that he advocated. The first is that Smith avoided the need for judicial balancing, a task that Justice Scalia found problematic to say the least. As he wrote in Barnes v. Glen Theatre, a free speech case, we should avoid wherever possible analysis that requires judicial assessment of the importance of government interest. Sherbert's compelling interest test requires exactly that form of assessment.

 

Second, Justice Scalia's jurisprudence reflected a commitment to neutral laws. Thus in free speech cases, he supported the rule that generally applicable laws such as anti-trust laws or contract laws should not be subject to the compelling interest test even if they had an adverse effect on the press. And in the race context, he was defender of neutral law strictly adhering to Washington v. Davis, holding that desperate impact from a neutral law should not invalidate that law unless discriminatory impact could be shown.

 

And in fact, in Smith, Scalia cites both the speech cases and Washington v. Davis as authority for the Smith decisions. Overturning Smith would place a serious dent in this project, which leads me to a related point. If we are going to abandon Justice Scalia's commitment to neutral laws, why stop at Smith? If we are going to -- neutral laws can have a disparate effect on press freedom, and they certainly can and do have a major disparate impact on race. If we are to adopt a jurisprudence that would overrule Smith and allow religious claimants to prevail against neutral laws without showing discriminatory intent, shouldn't we allow racial claimants to prevail by showing disparate impact without showing discriminatory intent?

 

Some argue that Smith should be overturned because it is often too difficult whether a law targets religious exercise. But it has proved to be virtually impossible to determine whether a law targets racial discrimination, we could get rid of that problem. Indeed, if the goal is to protect marginalized groups, that rationale should probably apply more to racial minorities than religious majorities. There's a pretty good argument to be made in short that overruling Smith while retaining Washington v. Davis has the policy interest exactly backwards.

 

One final point. All my liberal friends who have criticized my position in Smith have now become much more enamored with the case when it is applied to laws that they like. But the path does not go in one direction. The archdiocese opposed RFRA because they were concerned that if Roe was overturned, there would be religious exemptions sought to anti-abortion requirements. We can think of cases that exist or could exist, challenging voter id photo requirements on the basis of religious beliefs, drug laws, or laws restricting which persons are entitled to welfare benefits, or laws potentially sanctioning people who shelter illegal immigrants.

 

As Justice Scalia indicated, virtually every law - every law could be subject to a free exercise challenge. There is a message in all this. So let me conclude by citing one of the legal philosophers -- one of the preeminent legal philosophers of our time, Justin Timberlake.

 

[Laughter]

 

      "What goes around comes around." Thank you.

 

Hon. Lawrence VanDyke:  Well, thank you to my panelists. I think what I'll do first is just open the floor. I'm sure somebody said something controversial that pricked somebody to want to say something in response. So does anybody have anything? If not, I'll do my best to try to make it more controversial and ask something. Akhil, go ahead.

 

Prof. Akhil Reed Amar:  I think Professor Berg asks a very good question which is if one thinks that you're only looking at facial in effect and not as-applied challenges under the original text in history of the Free Exercise Clause, what about free speech? I think in general, there's an insufficient holism in constitutional analysis. I think, actually, you have to think not just about all the clauses in the First Amendment and how they fit together or don't but how it fits with the Second and the Fourth and the Fifth and the Sixth and the Seventh and the Eighth and the Ninth. So a fair question.

 

      So here's what my con law teacher taught me, that there would be broad protection of political speech and political press even if there were no First Amendment because these things are central to how a self-governing republic governs itself. It's a structural principle. Even before the First Amendment came along -- his name was Robert Bork. You may have heard of him. He's one of the founders -- intellectual leaders of The Federalist Society.

 

      One of my other teachers on the left, Charles Black, said the same thing. They both channeled Professor, a very eminent professor, Alexander Meiklejohn who explained that political speech is how we govern ourselves, how we have fair elections. And so that would be true and we need to protect that even without the First Amendment. Courts didn't for a long time. They didn't take the free speech and free press clauses seriously.

 

      Justice Scalia at his best understood this as well in his book, "A Matter of Interpretation," whose new forward is written by Akhil Amar and his new afterword is written by Steve Calabresi. Justice Scalia asks the question well, what about -- is there protection for a handwritten letter? And he says yes, there is, and I applaud that. But that's actually not the literalistic Scalia that many of you know and love. He actually bent his ordinary rules of interpretation because a handwritten letter is not oral speech, nor is it the product of a printing press. And he didn't love unenumerated rights. I actually think that there are unenumerated rights and we identify them in part by looking at the enumerated ones and interpolating and creating a rational continuum in all the rest. But that wasn't Justice Scalia's style. So why did he actually say that there is constitutional protection for a handwritten letter?

 

      And I think partly it's because he was persuaded by his brilliant law clerk that year whose name is Steve Calabresi, you may have heard of him too, Co-Founder and Co-Chair of The Federalist Society. But Steve's intuition as, I think with mine, as with Bork's, as with Charles Black's, as with Alexander Meiklejohn's is free speech and free press has structural roots independent of actually the text of the First Amendment in a way that isn't exactly isomorphic, exactly the same with religion even though religion is very, very important. It's not quite connected to how we govern in the way that political speech and political press and political handwritten letters for that matter are.

 

Hon. Lawrence VanDyke:  Thank you, Akhil. Any responses? Thoughts?

 

      Well, why don't we go ahead and line up if you want to. I think we've got -- I don't see a microphone there, so I think we've got a microphone in the middle and one over on the far left, right? I don't think we have one on the far right in this auditorium.

 

So but I'm going to start by asking a question. I think first question is law unto themselves. I guess this would be more of a question, Tom and maybe Lori, to you guys, but this concern about if we have a standard, the Sherbert v. standard, we bring it back. It doesn't just create the opportunity to make everything into a law unto yourself, and that puts a lot of pressure on other things like religious sincerity, etc. And I think it also arguably puts a lot of pressure on judges perhaps having a temptation to water things down in order -- because of the potential extreme implications if you think it has extreme implications. So those kinds of concerns I think that were raised by Bill, do you have any thoughts about why that isn't as big of a problem as some might say it is?

 

Prof. Thomas C. Berg:  Well, I mean, we've had the compelling interest standard now in RFRA for 27 years and in state RFRAs for just about as long, and it hasn't led to the kind of disastrous results that I think that Justice Scalia predicted and the kind that you're raising. It's going to be more likely that government can show a really strong reason for regulating conduct when it regulates that conduct across the board, when it doesn't make exceptions for something else. That's the situation that we're talking about.

 

      And whether that means it satisfies a compelling interest or just satisfies some kind of rigorous review, I don't think that matters. Either way, I don't think we've seen the kind of horrendous results that were predicted. There are lots of -- a lot of nuance in this doctrine and in the RFRA doctrine, right? The Court looks not at the consequence of overturning this law in question altogether, but it looks at the consequence of granting an exemption in this case and in other cases fairly determined to be like it.

 

      So that's a much more focused kind of inquiry and it allows for the Court to make distinctions and proceed narrowly. So I just think the concerns have been overstated. It seems to me that Smith has been more unworkable than the compelling interest standard has. The Court not following it really, and so it's back in -- the Court is back into making determinations about compelling interest and you know the world isn't ending on that either, but more religious practices are protected now than they used to be, as Lori said, and that's a really good thing.

 

Prof. Akhil Reed Amar:  Justice Scalia, the key to Smith is Footnote 5. And he's aware that there actually weren't that many under the Sherbert formulation. There weren't that many ridiculous exemptions that courts insisted upon, so his parade of horribles was not actually a practical consequential one. His parade of horribles was jurisprudential. He actually thought this, an ad hoc balancing was theoretically under a rule of law idea, just horrible.

 

      He didn't want the O'Conner-ization of a court because he was a kind of rule of law as a law of rules kind of fellow. That's the key to Footnote 5 of Smith where he talks about the parade of horribles and his response to Justice O'Conner. And Michael McConnell, has, I think, a strong answer to that in his article in response, "Free Exercise Revisionism After Smith." And because what I was trying to say is you have to take that seriously and here are two approaches.

 

      The equality approach comparing other exemptions that the law has for factories or for situations other than religion and trying to analogize it to the religious situation, it's going to be tricky because it won't always be identical and you're going to have to decide how many teeth you're going to put into the equality analysis whether any exemption anywhere mandates exemption for all religions everywhere, the most favored nation status or something a little bit softer than that. But equality actually creates some rules that Justice Scalia could accept. And the other is a John Stewart Mill "no harm to others" idea which I try to link to the idea of a privilege, an idea of the internal governance among -- within a church, with Justice Scalia understood.

 

      Hosanna-Tabor was different because you're not imposing costs on outsiders. I call that the islands of Lochner approach because we do actually in other areas sometimes try to protect people against themselves paternalistically or have all sorts of anti-discrimination rules within an entity but maybe churches are different. But that would answer, it seems to me, the jurisprudential parade of horribles that was really driving Justice Scalia in Smith. See Footnote 5.

 

Lori Windham:  If I can just respond briefly. I think that I certainly agree with Professor Berg. This is the rare circumstance where you've actually run the experiment. We've been running the experiment for 30 years now. We've had federal RFRA. We've had state RFRAs. We've been able to see what happened, and what happened is we actually don't have that many cases as a proportion of the federal docket. It's not that large. It's been manageable.

 

      But what's really interesting, and this is where I'm going to agree with Professor Marshall, is that RFRA in the anti-Smith rules are about unpopular religious exercise. Unpopular religious exercise might be a Muslim prison inmate wearing a beard. It might also be the Catholic church in Philadelphia and its views on marriage.

 

      If it's a popular religious exercise, and this is where I agree with Justice Scalia, if it's a popular religious exercise, that's where legislators are likely to be solicitous of religious exercise. And so what we're left with is what are you going to do with the unpopular religious exercises?

 

      One other thing that I think is incomplete when we talk about Smith is this presumption that we're talking about legislators. And they're going to legislate, and they're going to get together and pass a law and the Executive is going to execute it. What is happening in the real world and what is happening in my clients' cases is that it's not usually that the Legislature got together and passed something. It's that an administrative official somewhere said hey, I got a pen. And then they're able to add something that doesn't have the kind of legislative support, and they're able to create additional restrictions on religious exercise.

 

      And so I think when we're talking about Smith, that's exactly right. We have to be talking about the structure and the separation of powers. But it's really troubling to back off on free exercise protection at the same time that these other government powers are growing.

 

Hon. Lawrence VanDyke:  Bill?

 

Prof. William Marshall:  I know there are a lot of people left to ask questions in a short period of time. So I have some response to some of this, and they're brilliant, but I'll let it go to the questions instead.

 

[Laughter]

 

Hon. Lawrence VanDyke:  Sounds good. I think -- I believe that the person standing over here was up first, and it'll just go back and forth. So go ahead and ask your question.

 

Maggie Beecher:  Thanks. My name 's Maggie Beecher. I'm from Napa Legal. My question is for Professor Amar. At the beginning of your remarks, the way that you spoke about the First Amendment, you really strongly distinguished between Congress and what state constitutions said at the time about religious liberty. And I was wondering, are you advocating that there should be more distinction between the limits on the federal government with respect to religious liberty than state and local governments? Or I don’t know if I was picking up more than you were laying down there.

 

Prof. Akhil Reed Amar:  Oh, that's a brilliant question. Thank you. So the First Amendment is the only amendment that actually talks about Congress making a law as such, and the question's why its language is different than the other amendments? And the answer originally is these were two different amendments initially in the first Congress, the first House. They got mushed together by the Senate, and I think for reasons of federalism, because these were domains over which there were perceived to be no proper enumerated power.

 

      And we today read it differently. We think it's because they were trying to protect religious expression as well as political expression but that's because, actually, we read everything through the prism of the Fourteenth Amendment, and we look backwards. And religious speakers were very important at the time of abolition, people like Harriet Beecher Stowe, but not at the founding because in state constitutions pre-1789, religion clauses and speech clauses are never actually back-to-back or in the same provision.

 

      But now you're saying okay, so are you saying then that there's more protection against states because of the Fourteenth Amendment make or enforce and it doesn't say legislature then against the federal government? No, not necessarily because here's what you need to understand. You need to understand that almost everything that you believe about the Bill of Rights including calling it the Bill of Rights comes from the Fourteenth Amendment. It doesn't call itself the Bill of Rights. The Framers of the Fourteenth Amendment called it the Bill of Rights.

 

      All the Bill of Rights cases that come to your mind are actually Fourteenth Amendment cases and the Fourteenth Amendment actually has a feedback effect, call it reverse incorporation upon the First Amendment. We read, and properly so, the First Amendment in light of the Fourteenth, just as if, for example, you're a Christian. I happen to be, you're going to read the Old Testament through the prism of the New Testament. You're going to read the Book of Isaiah through the prism of the life, death, ministry, teachings, and gospel of Jesus Christ.

 

      So just as -- so we call that the Ninth Amendment. They're unenumerated rights against the federal government, and where do you look to find them? Partly the Fourteenth Amendment itself. In doctrine, that's called reverse incorporation of equal protection clause. That's an ugly doctrinal formulation in Bolling v. Sharpe, A better way of talking about it is the first sentence of the Fourteenth Amendment says everyone's born a citizen; everyone's born an equal citizen. What it means to be a citizen is to have rights, and the Fourteenth Amendment actually has a more robust sense of rights, and those rights apply against the federal government under the first sentence of the First Amendment.

 

      Without having to say more, St. Paul says I have rights because I am a Roman citizen. To be a citizen is to have rights against the federal government, and the Fourteenth Amendment arguably, if Kurt Lash is right, is expanding the domain of those rights. You needed to say no state shall because of Barron v. Baltimore if you want to limit states but that broader understanding of rights maybe sensibly applies against the federal government as well by getting into the citizenship clause of the Fourteenth Amendment, which doesn't say that no state shall, and the Ninth Amendment among other places.

 

Maggie Beecher:  Thank you.

 

Hon. Lawrence VanDyke:  All right, thank you. Next question, here in the center.

 

Owen Smitherman:  Hi. Owen Smitherman, Harvard Law. I have a question about the race analogy in Fulton. So in its concurrence, Justice Alito distinguishes between opposition -- religious motivated opposition to same-sex marriage and opposition to different racial groups or inter-marriage. And the reliance he uses for this is some dicta in Obergefell, and for me, at least personally, that's not a very strong source to base any kind of constitutional claim on. Is there a better source for distinguishing between those two things, between saying that religiously motivated opposition to same-sex marriage is honorable, quote on quote, versus opposition to racial groups is not honorable? Or is it just a normative evaluation that he made? Thanks.

 

Lori Windham:  Happy to speak on this. I think when we're talking about these questions, you're right. The Court has rejected this analogy between religious opposition to racial issues and religious opposition to same-sex marriage. And I think part of the reasoning for that is if you're going to equate these two things in law, are you willing to go all the way? Are you willing to start stripping tax exemptions from religious organizations? Are you willing to crack down on them and make certain beliefs and practices impermissible in polite society, as we have done with race?

 

      Or are we going to recognize that we are a nation of different and diverse beliefs and that we can allow groups that have different beliefs to able to—sorry—to be able to co-exist and to carry out their beliefs and to be able to live according to that? And so the Court has treated that very differently than it has treated race.

 

And I think it's especially important looking at the history, dismantling an entire system of racial segregation and separation in the south and the project that was going on there as opposed to what we're talking about here which is allowing a Catholic foster agency that serves primarily children of color and serves all children regardless of their race, their sex, their sexual orientation and saying no, you guys are just as bad as Piggie Park, as a lot of the amici wanted to argue.

 

Prof. Thomas C. Berg:  Can I follow up? So I think there's simply an argument for a historical distinction between the two, just the fundamental way in which racial discrimination has been at the core of our worst problems in our constitutional history so that you could say the government has an interest in that that exceeds any other case.

 

      But I'd also say the -- I view the clash between same-sex marriage rights and religious liberty rights as a clash between two interests that share a lot of features in common. In both cases, you have people who have an identity that is fundamental to all aspects of their lives, and they want to express that in action, not just in private belief or just merely having that identity. And the religious believer and the same-sex couple I think are in the same position on that score.

 

      And that suggests -- that's different from racial discrimination as racial discrimination against someone's feature that doesn't involve that kind of complex mixture of conduct and belief and relationships that both religion and same-sex activity, sexual activity, sexual relationships do. So if those two groups are on the same footing in many ways, that suggests we ought to try to find ways to protect both of them and not completely subordinate the religious interests to the anti-discrimination interests the way that we've done with racial discrimination.

 

Prof. William Marshall:  Yeah, I agree with that. One of the fascinating parts about when we think about religion and discrimination against religion is what exactly are we talking about when we talk about religion? Are we talking about religion as a set of ideas, in which case it's a speech kind of analogy? Or are we talking about religion as a form of individual identity, in which case it's more like a racial kind of a classification?

 

      And I don't think the law's particularly clear on that. And we come up with different ramifications and thoughts of how we're going to treat religion depending on how we think about it. When somebody says, for example, I'm a Christian, are they saying I ascribe to a certain set of beliefs or are they saying something else about who they are fundamentally? And I think that leads to some of the contradictions and inherit ambiguities in how we treat religion.

 

Hon. Lawrence VanDyke:  All right. Next question, over here on the left.

 

Michael Rossman:  Thank you. Michael Rossman, Center for Individual Rights. I have a question for Akhil. Let's say a D.C. agency prohibits the sale of kosher meat in the district.

 

Prof. Akhil Reed Amar:  Of what?

 

Michael Rossman:  Prohibits the sale of kosher meat.

 

Prof. Akhil Reed Amar:  Oh, kosher meat.

 

Michael Rossman:  So no Fourteenth Amendment, no Congress. Is there a free exercise problem?

 

Prof. Akhil Reed Amar:  Oh, sure. The governor of D.C. has no powers greater than the powers of Congress. It's just a delegatee of Congress and this is a regulation of religion as such because it's not meat but kosher meat, so that's an easy one.

 

Hon. Lawrence VanDyke:  All right. Does anybody disagree with Akhil? All right, moving on then.

 

[Laughter]

 

Daniel Ortner:  Hi. Daniel Ortner with the Pacific Legal Foundation. Over the past year and a half with Covid-19, I think we saw something unusual which is that religious claims by churches were successful largely at the Supreme Court and elsewhere, but free speech claims by non-religious organizations like theaters or political associations were not as successful. And I worry that we see religious freedom almost being used as a sword by governments to justify restrictions on speech like theater speech or other speech that's not religious speech. I wonder if anyone -- I would like to get whoever has thoughts on this, but the danger of maybe religious freedom being weaponized against other First Amendment freedoms, if there's a first-among-equals idea for religion, it can justify not treating other kinds of speech as well. And I wonder what thoughts the panel has on that.

 

Prof. Akhil Reed Amar:  Free speech idea originally, the phrase "the freedom of speech" comes from the freedom of speech in debate parliament, English Bill of Rights of 1680 and precursors. Parliament from the French "parlez" is to speak and they actually are imagining political discourse as the core. And one sees actually in early state constitutions freedom speech and debate in legislatures. One sees in Article I Section 6, freedom of speech and debate in Congress or in the Articles Confederation, certain freedom of speech in Congress and it's at its core political discourse.

 

      This is connected to the Meiklejohn-Bork-Black idea of the centrality of political expression. In our tradition, of course, we broaden that out. The First Amendment doesn't say just political but at the Founding, they were focused particularly on that but especially after the Fourteenth Amendment. There are additional foci -- focuses of special speech concerned against. Textually, it applies everywhere, but of course, they're thinking about religious speech because the abolitionists were religious as well as political, and their religion infused their political views and they're thinking about literary speech as well. The single most important actually book that was written in the generation before the Civil War was Harriet Beecher Stowe's, "Uncle Tom's Cabin." She comes from a preaching family. Lincoln, when he meets her, says you're the little woman that wrote the big book that made this great war. That's literary and artistic and expressive and religious and political. What else?

 

      We could talk about scientific speech as a particular core. I personally think that commercial speech should be treated with less judicial solicitude than other forms. None whatsoever, it says speech, I think, 44 Liquormart is a problematic case. Government's greater power to prohibit gambling or tobacco subsumes here. It's not always true that the greater power subsumes the lesser, but the greater power to prohibit certain transactions subsumes the power to discourage them.

 

      We're going to allow gambling or tobacco, but we're going to discourage them because we could prohibit gambling and tobacco altogether. We can't prohibit elections. We can't prohibit political discourse or religious assemblies generally. And even today, it's really 9-0 on the Supreme Court that the Federal Trade Commission and the Consumer Protection Bureaus are allowed to regulate in the Securities and Exchange Commission all sorts of financial puffery, when you basically make false claims about your Tesla cars or how much your profitability next semester or that cigarettes won't kill you.

 

      We allow government to regulate all sorts of false, fraudulent commercial claims, and we don't trust governments and rightly so to regulate false political claims. This tax cut will pay for itself, or this infrastructure bill will pay for itself. Politicians all the time are engaging a certain kind of, from their critic's point of view, fraud. But the FEC does not regulate that kind of political fraud the way the SEC regulates puffery when it comes to 10Qs and 10Ks and financial statements.

 

      So we actually do, even today, have differential standards for, let's say, commercial speech on the one hand than political, religious, artistic, and scientific speech.

 

Prof. Thomas C. Berg:  So I think that in many domains, religious and political speech stand on the same footing for the reasons that Akhil has said. But I don't think worship services should just be treated as simply matters of speech, right? Many other things that go on there besides expression. Unless you go into a Protestant service where all it is is about the sermon, but that's not true for many kinds of worship, right? It's communal activity, it's receiving the sacraments, and so on. Those go beyond expression.

 

      And even the sermon aspect, this is at the core of a separate right to exercise religion. And so what you've got here is the fundamental problem in the First Amendment of putting together a speech clause that has a strong neutrality component across different beliefs including religious beliefs with these distinctive rules about religion that protect religious exercise and that also prohibit the establishment of religion. They don't prohibit the establishment of all sorts of other ideas.

 

      Religious folks don't like that when the Establishment Clause is used as a means to restrict religion in the public schools and so on. But it's consistent to say that there are special limits on what the government can say religiously and also special limits on restricting worship. So I don't see any problem with saying a church or a synagogue can make a claim about worship under a RFRA or under the Free Exercise Clause that a theater can't make.

 

Daniel Ortner:  Thank you very much.

 

Prof. William Marshall:  Well, I do think underlying the speech clause is this idea of equality of ideas. And one of the reasons, again, that I supported Smith was why should we distinguish somebody who doesn't want to work in an armaments factory for religious reasons as opposed to secular reasons or a deep moral objection to it? And I think we have to be careful, and the Court has been careful, of not creating a speech system in which religious speech or religious kinds of speech are preferred over other kinds of speech.

 

      On the first question, when I didn't respond earlier to allow other questions and things, Tom made the argument that the compelling interest test against religion would probably be less powerful than it is against speech. And I don't think that's right. And the reason why that's not right is because, let me give an example form Tom's state of the Minnesota State Fair in a case called ISKCON v. Heffron.

 

      And in that case, the state fair had a role, by the way, it was precipitated by two of the most vile cults in American history: the Democratic Party and the Republican Party --

 

[Laughter]

 

      -- that people had to confine the distribution of literature to a booth. The Hare Krishnas challenged that under both the Free Exercise Clause and the speech clause because they claimed that they had a religious compulsion to go out there into the community and approach people. In front of the Minnesota Supreme Court, it only dealt with the Free Exercise Clause. And it looked at that and said look, there are only 13 Hare Krishnas here. The state interest in preventing congestion and preventing some other things isn't very powerful when you're only dealing with 13 Krishnas because they looked at the test to say you don't weigh the state's interest against everybody, you weigh it only against the people who are advocating their religious belief.

 

      In front of the Supreme Court, the Supreme Court said no, we can't favor religious speech over secular speech. And so if the Krishnas are going to have the right to go into the marketplace, then everybody is. And when everybody has the right to go into the state fair and go everywhere, the problems with congestion become so much greater. So by expanding the amount of people who are entitled to claim the freedom, you've expanded the power of the state's interest. When you have just a narrow group of people claiming the right, the state's interest is less compelling.

 

      One of the cases in pre-Sherbert was one I referenced before, Tony and Susan Alamo challenging the legality of minimum wage requirements because they claimed they had a religious objection to it. That's not a really strong argument that you have the compelling interest against a small religious store because that's not going to depress wages. But if you talk about the state's interest or the government interest as a whole to try to prevent a depressed wage market, it does become compelling.

 

      So the fact is the compelling interest applied only to religious observers is going to much more powerful than when applied to a broader category of individuals.

 

Prof. Thomas C. Berg:  Well, but Bill, you've picked cases in which they're self-interested reasons to pursue the conduct, right? But the fact that a Jehovah's Witness can refuse a blood transfusion doesn’t mean that people are suddenly going to start lining up to refuse blood transfusions. And because Amish can ride a buggy in Minnesota without displaying an orange triangle doesn't mean that a lot of people are going to want to do that.

 

      So I agree that when the exemption is of the kind that is likely to trigger a lot of other claims -- and the Court has said this too. This is one of the categories that make the compelling interest test manageable or the categorical kinds of distinctions. If you've got a self-interested exemption, then you can expect lots of claims, maybe insincere claims, and that can create the compelling interest. But that's not a reason to get rid of the test in the very large number of cases in which there's not a particular self-interest in asserting the exemption.

 

Prof. William Marshall:  But I think that plays right into Justice Scalia's theory that you're going to water down the compelling interest test. If you start taking into consideration that other people may claim this thing and that's your compelling interest for preventing something from happening, the exercise, that's watering down the test. The compelling interest test is much more powerful and administrative efficiency is not usually a reason to -- not usually justification to satisfy that application.

 

      So you need a theory, Tom, that deals with both the kinds of cases, blood transfusions where people are not lining up to get the exemption, and one that does in which exemptions to taxes or exemptions to fair labor standards acts or exemptions from insurance requirements you don't like does attract people to adopt or claim a religious objection.

 

Lori Windham:  If I could just respond to that, I do think that there are several features that are present in the law now and especially are present in RFRA that do help to account for that. One is the compelling interest. If it's something where there's a real incentive like taxes, the Court has treated the government's interest as particularly strong in those cases because it's easy to see why somebody would want to bend the rules.

 

      The other thing is, of course, sincerity, as we've talked about. Again, this is somewhere where if there's a real incentive to bend the rules, the Court's may want to look more closely. This comes up a lot in the prison context because prisoners make a lot of claims and so prison systems have actually developed processes to look at sincerity. The other place it comes up is in the draft context where they look very carefully at sincerity because there's an incentive there.

 

      The third thing I would mention that hasn't come up today is burden, and this is something that is in RFRA, it's in some of the state statutes, it was derived from Sherbert. I'm sure we could have a long discussion about how it operates in the constitutional context, but this idea that you do need to show something, something more than just that cognizable interest that gets you into Article III court. But there does need to be some kind of burden.

 

I do think that that requirement does some work in cases like a leafleting case. Is it really a burden on your religion to stand here versus stand there? It's easy to see if we said you can't go and meet in your synagogue at all because of Covid, it's more difficult and perhaps starts to look more like some of these speech cases and time, place, and manner restrictions when your religious exercise is not being prohibited outright but maybe just channeled a little.

 

Prof. William Marshall:  Sherbert itself was one of these kinds of cases. Somebody didn't want -- claimed a religious exemption not to work on Saturdays. A lot of people don't want to work on Saturdays for a lot of reasons. That created an incentive for people to claim a religious belief, and yet, the Court didn't find there was a compelling interest there. If we're going to return to the pre-Smith regime and bring back Sherbert, I would assume that would mean bringing back the results in Sherbert.

 

Hon. Lawrence VanDyke:  Right. Well, I think I'm going to step in here. The only hard part of the job they give us moderators is that we have to end on time. And so unfortunately, I mean, this is -- first of all, I want to thank the audience for very stimulating questions, obviously, as we just saw here. And I want to thank the panelists for very stimulating discussions. So thank you very much. Why don't you join me in giving a final hand?

 

[Applause]

6:00 p.m. - 7:00 p.m.
Lawyers Convention Reception

2021 National Lawyers Convention

East Hall
Union Station
50 Massachusetts Avenue, NE
Washington, DC 20002

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(Ticketed event) Black Tie Optional

6:00 p.m. - 7:00 p.m.
Madison Club Reception

2021 National Lawyers Convention

Columbus Club
Union Station
50 Massachusetts Avenue, NE
Washington, DC 20002

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(Invitation only) BLACK TIE OPTIONAL

7:00 p.m. - 10:00 p.m.
2021 Antonin Scalia Memorial Dinner

2021 National Lawyers Convention

Great Hall
Union Station
50 Massachusetts Avenue, NE
Washington, DC 20002

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On November 11, 2021, The Federalist Society hosted its annual Antonin Scalia Memorial Dinner. This year featured an address by Senator Tom Cotton. 

Featuring: 

  • Introduction by Jennifer C. Braceras, Director, Independent Women's Law Center, Independent Women's Forum; Member, Federalist Society Board of Visitors; Former Member, U.S. Commission on Civil Rights
  • Hon. Tom Cotton, U.S. Senate, Arkansas 

* * * * * 

As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.

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10:00 p.m. - 11:00 p.m.
Closing Reception

2021 National Lawyers Convention

East Hall
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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Co-Sponsored by the Harvard Student Chapter

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9:00 a.m. - 11:00 a.m.
Showcase Panel II: Private Control Over Public Discussion

2021 National Lawyers Convention

Topics: Corporations, Securities & Antitrust • Free Speech & Election Law
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?" The second day of the conference commenced with a showcase panel on "Private Control Over Public Discussion."

Online platforms host a growing share of public discussion and debate. As private businesses, they have been free to develop and implement their own content moderation policies, free of First Amendment constraints. But as the amount of speech hosted on a few platforms has grown, the resulting concentration of control over that speech has sparked questions about the power of private companies to stifle lawful expression.

As Justice Clarence Thomas recently noted, the Court soon will need to consider how existing legal doctrines apply to these highly concentrated, privately owned, digital platforms. Part of the solution, he suggests, might lie with common law doctrines like common carrier or public accommodation – doctrines that might permit regulation that limits the right of private platforms to exclude.

But what of the First Amendment interests of the platforms themselves? Do these corporations have a protected expressive interest in declining to carry speech which is lawful but which they find objectionable? How should we think about the digital platform model – are they more like a communications network distributing information, more like publishers that actively curate content and associate themselves with hosted expression, or do they toggle back and forth?

Finally, should the concentration of private power over speech change how we think about public and private threats to free expression? Private businesses are presumptively free to set terms and conditions for the use of their own property. Have digital platforms assumed a degree of control over public discourse, sufficient to alter that presumption? Is some form of regulation appropriate to protect against private threats to liberty? Or is government intrusion into private decision-making still the greater threat?

Featuring:

  • Prof. Jane Bambauer, Professor of Law, University of Arizona James E. Rogers College of Law
  • Prof. Randy E. Barnett, Patrick Hotung Professor of Constitutional Law, Georgetown University Law Center
  • Prof. Adam Candeub, Professor of Law & Director, Intellectual Property, Information and Communications Law Program, Michigan State University College of Law
  • Prof. Eugene Volokh, Gary T. Schwartz Distinguished Professor of Law, UCLA School of Law
  • Moderator: Hon. Barbara Lagoa, U.S. Court of Appeals, Eleventh Circuit

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Event Transcript

Dean Reuter:  Good morning, everyone. Let’s get started if we could. Welcome back. Thank you. I’m Dean Reuter, still the Senior Vice President and General Counsel of The Federalist Society. Welcome back. It’s great to see you again. I said to somebody last night, or yesterday, this Federalist Society thing, it’s like a great, big family reunion. Everywhere you turn, somebody you know, but these people you actually like.

 

In terms of housekeeping -- I always have the housekeeping duties, so I apologize for that. But I’m reminding folks about the D.C. protocols. I’ve heard some grumblings about wearing the masks. It might be too late for a pro tip on making mask wearing a little less unbearable, but I soaked my mask last night in some pretty high end scotch. And I’m rather enjoying wearing it this morning. Of course that’s not true. That’s just a ridiculous joke. I’ve been soaking my mask in scotch since April. Really, though, please don’t soak your mask in anything, especially if you’re watching from home and you’re not an adult.

 

So welcome back. It was a great evening -- great day yesterday, great evening yesterday. I have to say I asked Senator Cotton for a nerdy law and policy speech, and he delivered a barn burning roast where nearly everybody got their moment on the spit. So I thought it was highly entertaining, but we’ve got a great day lined up today as well. And much later today, we’ll close with the 20th Anniversary Olson Lecture with Ted Olson himself. And I remember, very powerfully, a very poignant inaugural lecture very clearly, mere weeks after the 9/11 terrorist attacks 20 years ago. So I do look forward to hearing what Ted has to say today.

 

Before that, though, we have a full day of programming, much of it on public versus private power, classroom, curricula and the law, cancel culture in financial services, but also broadband, free speech, global human rights and a special panel of judges talking about originalism. That’s a panel that in-house, as we built it, we referred to as “A Bunch of Judges,” no disrespect to the judges -- and a fireside chat with the Vivek Ramaswamy. But we begin this morning with a showcase panel on “Private Control over Public Discussion,” which of course reminds me of a story.

 

Now, many of you I think know that I wrote a nonfiction World War II book, and at this point my publisher contractually requires me to say the title of the book, which is The Hidden Nazi, which is now available in paperback. And as I like to say people don’t buy as many books as they used to, but even if you only buy five or six books all year long it should probably be five or six copies of The Hidden Nazi. Anyhow, it is a page-turning thriller that describes our hunt for a particularly despicable Nazi that nobody’s ever heard about. And I wrote it in first person, which is an odd presentation for a nonfiction book.

 

So I talk about in the book our research, our hunt for this evil man who had escaped justice and any historical reckoning -- had done a deal, faked his own suicide and done a deal with the Americans and survived the war. So I’m in the book. My wife Lou Anne is in the book. My kids, my father, my whole family is in the book as I spin out the tale. And when I was previewing this narrative for friends and colleagues as I’m writing the book, long before it was published, everyone would say, Dean, that’s an adventure tale that ought to be a movie or an HBO series or a Netflix series, which I never tried to dispute.

 

So later when I’m having dinner with my wife and our friends, I’d tease my wife. I’d say, you know, if we make a movie out of The Hidden Nazi, I’ll probably get Ryan Reynolds to play me because we look about the same and we’re the same age and the same build. And my wife heard me tell that joke one too many times, so at our next group of friends when we’re meeting I say, "I’ll have Ryan Reynolds play me." And my wife said, "If you have Ryan Reynolds play you, I’ll play myself." So admittedly the story’s not directly on point, but it does say a little bit about who has a control in a discussion at any given moment.

 

So I’m now very pleased to introduce Judge Barbara Lagoa, who will moderate our showcase panel on “Private Control Over Public Discussion.” She is and has been since late 2019 a judge on the Eleventh Circuit Court of Appeals. Before that she served with distinction on the Florida Supreme Court, having spent several years on Florida’s other lesser courts. She brings a unique perspective of a state trial court judge, a state appellate court judge, a state supreme court justice, and now a federal appellate court judge. Judge Lagoa, the floor is yours.

 

Hon. Barbara Lagoa:  Thank you so much, Dean. Thank you for the introduction. It is truly a pleasure to be here today, in person, not wearing a mask to moderate this panel where we’re going to be discussing “Private Control Over Public Discourse” with a distinguished panel of experts.

 

      The Supreme Court has called the internet the modern public square. And that’s certainly true. But unlike public squares in the countries past, this modern public square in the form of digital platforms, whether social media platforms like Twitter or Facebook or search engines like Google, provide avenues for and access to historically unprecedented amounts of speech and information. And unlike public squares in this country’s past, access to this modern public square is concentrated in the hands of few parties. For example, while Google controls 90 percent of the market share for search engines, it can suppress content by down listing a search result or by steering users away from certain content by manually altering autocomplete results. And Facebook and Twitter can also narrow a user’s access to information and content through similar means.

 

Indeed, Twitter under the terms of its own service agreement can remove any person from its platform, including the president of the United States, at any time for any or for no reason while allowing other public actors, such as Nicolas Maduro, Daniel Ortega, or Miguel Diaz-Canel, unlimited access. Is that an exercise of individual liberty by the digital platform which is a private party, or do these digital platforms wield an enormous amount of power that needs to be regulated? And if they do require regulation, what kind of regulation? And what existing legal doctrine should be applied to these privately owned digital platforms that constitute the modern public square?

 

You’ll hear from some of our panelists today that the answer might lie with common law doctrines, like common carrier or public accommodation – doctrines that permit regulation that limit the private platform’s right to exclude. I’m looking forward to a robust debate from these speakers on these issues. Each speaker will have 10 minutes for an opening remark, and I’m going to hold you to it. And then we’re going to follow it with a moderated discussion, and then I promise that we will open up the floor for 15 or 20 minutes for questions from the audience.

 

Before we hear from the speakers, let me introduce them. I know that they don’t need any introduction, but I’m going to introduce them in the order that they will be speaking. I’m going to start first with Professor Eugene Volokh. He is the Gary T. Schwartz Distinguished Professor of Law at UCLA School of Law. He is an expert in First Amendment law. He is the founder and co-author of the Volokh Conspiracy—I’m sure many of you read that—the Libertarian and conservative blog. He is widely published, and he recently published an article titled “Treating Social Media Platforms like Common Carriers,” which is relevant to our discussion today and which I highly recommend.

 

Our next speaker will be Professor Randy Barnett. He is the Patrick Hotung Professor of Constitutional Law at Georgetown University Law Center. Notably among his many accomplishments, he is also the director of the Georgetown Center for Constitution. He has published 12 books, countless journal articles and has a forthcoming -- he has a book that he co-authored with Evan Bernick titled The Original Meaning of the Fourth Amendment: It’s Letter and Spirit. And I believe he has a book signing afterwards.

 

The next presenter we have is Professor Adam Candeub. He is a professor of law and Director of the Intellectual Property, Information, and Communications Law Program at Michigan State University. Prior to this position he served as Deputy Assistant Secretary of Commerce for Telecommunications and Information at the Commerce Department, as well as Deputy Associate Attorney General at the Department of Justice during the Trump administration. He is also the writer of an article published last year in the Yale Journal of Law and Technology which is entitled, “Bargaining for Free Speech: Common Carriage Network Neutrality and Section 230,” which is a seminal piece of authorship that he wrote, and I highly recommend reading that as well.

 

And our last speaker today is Professor Jane Bambauer. She is a professor of law at the University of Arizona College of Law. She specializes in the emerging and highly important area of technology law. She’s written numerous journal articles, has testified before Congress, and her research assesses the social cost and benefits of big data and questions the wisdoms of many well-intentioned privacy laws. Her articles have appeared in the Stanford Law Review, the Michigan Law Review, the California Law Review, and the Journal of Empirical Legal Studies.

 

Please let’s welcome the speakers and give them a round of applause. So without further ado, Eugene.

 

Prof. Eugene Volokh:  All right.

 

Hon. Barbara Lagoa:  10 minutes.

 

Prof. Eugene Volokh:  You got it. Is there going to be a red light?

 

Hon. Barbara Lagoa:  Oh, yes.

 

Prof. Eugene Volokh: Okay. So I think I need to be speaking here because I’ve got the PowerPoints.

 

Hon. Barbara Lagoa: 10 to 12:00.

 

Prof. Eugene Volokh: 10 to 12:00. You’ve got it. So it’s a great pleasure to be at this conference as always and talking about this subject. I want to stress there’s a question mark at the end of my title, and it’s an important piece of punctuation here, I think, because I don’t know what the right answer is here. I think it’s an important question. I spent 80-plus pages talking about it. I’m still not sure what the right answer is, but I want to kind of air one possible approach to these social media debates just to see whether it might make sense.

 

This is one of those areas where I think there’s been a lot of assumption that, of course, the platforms have the right -- not just a right under current law but the constitutional right to choose what to include and what to exclude. I think that assumption is in some measure and in some measure perhaps not, and I’d love to see what people have to say about it, both my colleagues and the academy, people in this room -- lawyers, legislatures and such. So I want to start with Justice Stevens' Citizens United dissent

 

Now, I’m with the majority on Citizens United. I imagine most people in the audience are. My sense is most people in the legal academy and newspaper commenters, and such are with the dissent. But I think what everyone might say about the majority and the dissent in Citizens United is I think they both had very good points. They both made some very good arguments. The question is how those arguments fit within the doctrine and how you weight the value of each. So I thought that Justice Stevens’ dissenting argument is worth bringing up a bit because what it was all about is the concern with economic power being translated into political power.

 

Now, in any free market economy some element of that is going to be present. And I don’t think Justice Stevens was sort of radically opposed to that, nor do I think the campaign reformers are categorically opposed to it. Nonetheless, there is, I think, real reason to worry in a democracy, even if you are a free-market sympathizer like I am -- reason to worry about entities that are powerful—immensely economically powerful—to the level that their yearly revenue exceeds the GNP of many nations, that that power may be unduly leveraged into political influence. And that’s what Justice Stevens was talking about.

 

A legislature might conclude that unregulated spending by corporations about candidates will give them unfair influence and distort public debate. The opinions of real people may be marginalized, and if we want to have competition among actors in the political arena be truly competition among ideas, there needs to be some regulation to prevent that marginalization. Corporate domination of electioneering can also generate the impression that corporations dominate our democracy. And politicians who fear a corporation’s power here may be cowed into silence about that corporation or perhaps about those things the corporation just doesn’t want them to talk about.

 

Now, again, I think the majority got this right because I think none of this justifies restricting the speech of corporations. Among other things, it turns out that the speech of corporations is actually a very small portion, even post-Citizens United, of discourse about candidates, maybe 5, 10 percent. We don’t know for sure. So I think that Justice Stevens’ argument rightly didn’t carry the day there. But he was talking about this is an argument for restricting corporations’ speech.

 

But I think it applies even more to questions about regulating corporate restricting in individual speech. That on one side is this concern about excessive economic power, and on the other side are the free speech rights of corporations and of the people who own and run those corporations. I do think the free speech rights prevail. But when on one side is this interest in -- or this concern about excess economic -- or use of economic power to influence politics and the other side is the corporation’s ability to restrict speech, not to engage in their own speech but to restrict speech, the balance it seems to me may well be different.

 

So here’s one way of thinking about it. Let’s think of platforms as places where people can speak using other’s property. So let’s imagine a spectrum. On one end of the spectrum may be newspapers and magazines. Newspapers and magazines often carry the speech of outsiders, letters to the editor, ads, op eds, syndicated columns, and such. And they have not just the right to include materials; they have the right to exclude materials. That’s been recognized, as we’ll see shortly, under the First Amendment that that’s part of their editorial discretion. And I think quite rightly so in part because newspapers and magazines solve the problem of information overload.

 

The newspaper and magazine is valuable at least as much for what it excludes as for what it includes. There are all of these stories out there and all of these topics important or not. The stories may be well written or not. The stories may be accurate or not. They may be intelligent or not. And we rely on newspapers and magazines to filter that for us. And I think it would be a real mistake to try to regulate newspapers and magazines for fairness or evenhandedness.

 

Bookstores are another item that historically has been seen on that side of the spectrum. They don’t actually create new works. They don’t edit particular works, but they do select works, which is why there are such things as free market book stores or feminist book stores or Christian book stores, which is also, I think, pretty useful as a means of dealing with information overload – that if you have a bookstore you trust you might go there and expect that the books that they’ll display for you for you to browse will be interesting books, well written books, books worth reading.

 

And I think, actually -- and actually I wrote a white paper on this wearing my lawyer hat for Google, but I would also endorse this as an academic. Google as provider of search also serves that function. Whatever you may want search to be, you don’t want it to be content neutral. Imagine a content neutral search engine. I don’t think you even want it viewpoint neutral. If you ask it how old the earth is, let’s say, you probably want the viewpoint that is sort of shared by the scientific community rather than whatever somebody may have search engine optimized to try to put up top.

 

Likewise, I think with regard to platforms recommending pages you might like -- that is actually very close, I think, to what newspapers or bookstores in particular do.

 

And the interesting question is where you put Facebook, YouTube, and Twitter managing conversations, so comments, say, by somebody on my page or on my tweet. But then when you get down to the bottom of that, you see situations where we don’t expect entities to select and edit. In fact, we forbid them from doing that. The Postal Service is an example. The Postal Service, at least since the 1940s, it’s been understood isn’t supposed to say oh, this is good speech; this is bad speech -- perhaps setting aside some examples of actually outright unprotected speech.  No, the Post Office is a government-run entity, but we take the same view with regard to a phone company.

 

Imagine a phone company says, we happen to know, not from listening in but from public information, that this phone number is being used as a recruiting number by the Klan or by Antifa or by the communists or by whoever else; and we’re just appalled, and our other subscribers are appalled by our property being used for these conversations. So we’re just going to cancel their phone number. That’s not something they can do. They are common carriers. They’re not supposed to leverage their power, whether it’s monopoly or monopoly-ish power as with landlines, or non-monopoly power as with a famously competitive cellphone companies. They’re not supposed to leverage that economic power into political power, power over the discourse. Likewise UPS and FedEx, if they say, we don’t want to deliver from your bookstore, that’s not something they’re entitled to do.

 

So one question is where -- should we assimilate Facebook, YouTube, and Twitter as providers of hosting for users to reach willing viewers. So somebody sets up a Twitter account, and people go there because they want to see it. Somebody sets up a Facebook page or puts up a YouTube video and people go there because they want to see it. Should we treat them more like newspapers and magazines that have editorial discretion which we value? Or should we treat them more like phone companies or UPS or FedEx that are supposed to provide common carriage to all?

 

So that’s the policy thing. I want to just quickly, because I have just a couple of minutes left, talk briefly about the constitutional question, although one can talk a lot more about it. So I want to also start with another quote. This is also from a dissent by Justice Breyer, but on this point I think the majority would have agreed. It’s from the A.I.D v. AOSI, the follow-up case. “Requiring someone to hose another person’s speech is often a perfectly legitimate thing for the Government to do.”

 

So I’ve often heard the argument, well, obviously, it would be an unconstitutional speech compulsion to require a property owner to host other speech. I don’t think that’s right. I mean, the phone companies aren’t like that. That is to say the phone companies are required to host speech, but are not seen as having a First Amendment right to say no, we’re going to cancel someone’s phone line. So again here you can see a spectrum. Newspapers can’t be required to publish replies to criticism of candidates because, again, they have constitutionally protected editorial discretion. A parade organizer can’t be required to include floats it dislikes in its parade because when people go to see a parade, the parade is seen as the aggregate of all the messages. People often watch it beginning to end or at least some point to another point.

 

On the other hand a shopping mall may be required to allow leafleteers and signature gatherers, including leafleteers who distribute offensive material or material that urges a boycott of stores in that very shopping mall. That’s an interesting question whether that’s a good rule. Remember that question mark at the end of my title. Maybe shopping malls shouldn’t be regulated this way, but the Supreme Court has said that if a state wants to impose this rule, that’s constitutional.

 

Cable system may be required broadcast channels, and, of course, in Rumsfeld v. FAIR, a university may be required to allow military recruiters. And by the way, not just as a condition of funding, which is what happened in Rumsfeld v. FAIR, but just as a categorical rule, which is something that the Court told us in Rumsfeld v. FAIR would be permissible. And the distinction that is offered in some of these cases is why, for example, is a cable system different from a parade? “The programming offered on various channels by a cable network consists of individual unrelated segments that happen to be transmitted together for individual selection by members of the audience.” I think that’s very much descriptive of what Facebook or Twitter or YouTube is like with respect to the millions or billions of items available there.

 

So I’m going to close with just kind of one point. So I think as a constitutional matter at least requiring common carriage just as a hosting function is consistent with the First Amendment. The big question mark for me is as to the policy matter. It's hard to imagine regulation that doesn’t have the opportunity to make things worse. And this is an area where in fact regulating things might make things worse. I’m far from certain that trying to impose this common carriage obligation is a good policy idea. But I do think it’s probably constitutional if done right, and it’s something that we ought to be thinking about.

 

Hon. Barbara Lagoa:  Thank you. I am very impressed. You had 15 seconds left.

 

Prof. Eugene Volokh:  I’m going to save that for rebuttal, Your Honor.

 

Hon. Barbara Lagoa:  Randy, you want to take his 15 seconds?

 

Prof. Randy E. Barnett:  I’ll take his 15 seconds. I’ll need it. Until the 1950s, when African Americans traveled in the South, they were so restricted in the hotels and restaurants that would serve them that they bought “The Green Book,” a guide to hotels and other services who would do business with them. This was, at best, an imperfect, private solution to a serious public problem.

 

Through a combination of state laws, private prejudice, and private violence, combined with a lack of government protection, a vital national privilege of African American citizens was being abridged. It was the privilege known as the right to travel. Tragically, this abridgement had been made possible by decisions of the U.S. Supreme Court. To combat the organized white supremacy that arose in the wake of slavery’s abolition, Republicans in the 39th Congress enacted the Fourteenth Amendment. Then, in 1875 they used the enforcement power of Section 5 to prohibit just this type of discrimination in nongovernment owned places of public accommodation.

 

But eight years later in the Civil Rights cases, the Supreme Court held that the Civil Rights law to be unconstitutional on the grounds that it barred discrimination by nongovernmental actors. The regime of organized white supremacy lasted for 90 years until the Civil Rights Act of 1964 in which Congress once again barred discrimination in places of public accommodations. It was this law and the subsequent regime of federal enforcement that finally broke the back of Jim Crow. Because of its precedent in the civil rights cases, however, the Court upheld the 1964 Act based on Congress’ commerce power, rather than on its Section 5 power, to ensure the equal protection of the privileges or immunities of citizenship.

 

The Civil Rights Act of 1964 passed with a higher percentage of Republican support in both the Senate and House than Democrat. Without that support, the Act would have died. Yet some Republicans, most prominently Senator Barry Goldwater, objected to its constitutionality because it barred discrimination by privately owned business. Republicans have been tarred by this association ever since. In 1875, of course, it was Democrats, not Republicans, who raised this constitutional objection. Understanding why Republicans thought such a measure was constitutional is useful today.

 

In our new book, The Original Meaning of the Fourteenth Amendment: Its Letter and Spirit, on sale after this program and to be a in a signing ceremony, Evan Bernick and I spent two chapters explaining the concept of Republican citizenship embodied in Section 1 of the Fourteenth Amendment. To understand the privileges of Republican citizenship, we must distinguish between two binaries: the public-private binary and the government-nongovernment binary. It is commonly assumed that these two binaries are identical. By this I mean there exists just two categories: public-governmental on the one hand and private-nongovernmental on the other.

 

But once we distinguish them as two distinct binaries, however, we can see how the concept of national citizenship that was adopted and reshaped by the newly formed Republican Party could see not just two but three categories. In between the categories of public-governmental and private-nongovernmental is the category of public-nongovernmental. Such a category can be located in the common law governing inns and common carriers.

 

After the Fourteenth Amendment, it sometimes went by the label “businesses affected with a public interest.” Unlike purely private, nongovernmental actors, such businesses could be subject to price controls and to a nondiscrimination norm.

 

The boundaries of this middle category, whatever it be called, were not always easy to discern, and there are different ways to conceptualize and justify it. Sometimes these privately owned companies receive public charters. Sometimes they exercise the power of eminent domain. Sometimes they could be viewed as a monopoly. Sometimes, while not individually a monopoly, through a mixture of common prejudice reinforced by private violence, they would have the practical power of a single monopoly.

 

This is what African Americans confronted with they traveled through the South before 1964, a phalanx of nongovernmental public service providers refusing to sell them the essential means to travel within a whole swath of the United States. Many of these providers were motivated by bigotry. Some were just obeying the law, and still others were coerced by the threat of violence by private actors who were given free reign by local law enforcement officials.

 

Whatever their motivations, this regime of public governmental and nongovernmental actors was able to restrict the means by which African Americans could exercise a fundamental privilege of national citizenship, which is the right to travel.

 

In describing this history, I do not mean to be equating the current situation of today’s political dissenters from progressive orthodoxy with that of African Americans during Jim Crow. Still, the conceptual categories that explain why the Republicans believed that their 1875 civil rights bill was constitutional may be useful to appreciate the challenge posed today by privately owned social media companies.

 

Let us begin with the nature of the right that is at issue. As we explained in our book, the privileges or immunities of citizens -- or citizens of the United States are the civil rights that every person receives from the government to secure the pre-existing natural rights they enjoyed in the state of nature. In the words of the Declaration, it is to secure these rights that one leaves the state of nature to enter a civil society. In return for their allegiance, the government owes every citizen a duty to protect these fundamental rights.

 

This duty is expressly enshrined in the Equal Protection Clause or what we call the "equal protection of the laws clause." In sum, civil rights are the government guarantees of our natural rights, along with any other rights that are necessary to protect these rights, such as, for example, the right of trial by jury, which Madison said was, “as essential to secure the liberty of the people as any one of the pre-existing rights of nature.” The right to travel was considered to be a privilege or immunity of national citizenship in 1868 and is so still considered today.

 

The freedom of speech is another well-recognized privilege of U.S. citizenship that was protected by the Privileges or Immunities Clause from being abridged by state laws. The freedom of speech expressed in the First Amendment protects the very same natural right we possess against our fellow citizens. Contrary to the civil rights cases, the equal protection of the laws clause imposes a duty on state governments to protect this fundamental right from being infringed not only by states but also by non-state actors. When states failed to provide this protection, Congress can exercise its Section 5 powers to fill that gap, which brings us to privately owned social media platforms.

 

Just as privately owned restaurants and hotels are public accommodations reached via government owned highways, privately owned social media platforms might be considered public accommodations -- and I say might be considered public accommodations -- that are accessed through the internet. Just as no one is compelled to open a restaurant or hotel to the public, no one is compelled to create a public forum for the expression of speech. It is to their credit that privately owned companies like Facebook and Twitter have successfully created a communications platform that because it is so user friendly has come to be as essential to exercising the fundamental privileges of freedom of speech as privately owned restaurants and hotels are to the privilege of traveling.

 

By virtue of their marked success, they might be viewed as businesses affected with a public interest or public accommodations akin to restaurants and hotels. They might be seen as being in that middle category of nongovernmental public institutions. Such institutions are typically regulated by the states. For example, the District of Columbia’s public accommodations law makes it unlawful “to deny directly or indirectly any person the full and equal enjoyment of the goods, services, facilities, privileges, advantages and accommodations of any place of public accommodation wholly or partially for the discriminatory reason based on the actual or perceived political affiliation of any individual.”

 

All it would take for a state to extend this nondiscrimination prohibition to social media platforms would be to define a social media platform that is open to the general public as a place of public accommodation and then add political viewpoint to the list of improper bases for exclusion. Recognizing the right to express oneself on political issues as a privilege of national citizenship protected by the First and Fourteenth Amendment is easy. More challenging is whether to define social media platforms as places of public accommodation.

 

For example, the Civil Rights Act of 1875 distinguished between public inns and private boarding houses, which were owner-occupied. Like boardinghouses, truly private networks -- for example the Georgetown listserv or The Federalist Society listservs -- are not places of public accommodation. But the universal nature of social media companies seems to place them on the public accommodation side of the line.

 

Now, instead of thinking of them as nongovernmental public accommodations, however, perhaps it would be clarifying to label them nongovernmental public forums. These are forums that unlike newspapers or radio programs are open to members of the general public to express their views. How may such nongovernmental public fora properly be regulated? The label suggests that First Amendment doctrine now governing public forums provided by government might provide doctrinal guideposts. An online, public, nongovernmental forum can certainly limit the subject matter of discussion. Subject matter regulations is a form of content regulation, but a permissible one. A forum devoted to rock climbing can exclude posts on rock music. Such a forum would in short be considered a limited public, nongovernmental forum.

 

What about other forms of speech, say, speech that harasses another member of the forum? I suggest that to the extent a private company has created a forum for the public to communicate their ideas, such a company is limited to barring speech that the Supreme Court has found to be unprotected from government restriction. If a governmentally provided public forum cannot restrict such speech, than neither can a nongovernmentally provided public forum. Categories of unprotected speech include fraud, incitement to imminent lawlessness, personal threats of violence, or other unlawful harassment, obscenity, and child pornography. Just as government can ban these forms of speech, so to can nongovernment public forums.

 

In this sense, we can say that the First Amendment does sometimes apply to private parties. We often hear the First Amendment doesn’t apply to private parties. In this sense perhaps First Amendment doctrine should apply to private parties. Via the Equal Protection Clause of the Fourteenth Amendment, it applies to those private parties who have created a public forum. A power to protect the freedom to speak in nongovernmental public forums does not entail a power to compel people to speak. Facebook is free to express its own corporate opinions and cannot be compelled to endorse any particular idea.

 

But unlike other companies, Facebook provides members of the public with a space or forum in which to express their views, which is exactly what draws the public in to view the advertising from which Facebook derives much of its income. If this qualifies Facebook as a common carrier, a place of public accommodation or a nongovernmental public forum, then it may not discriminate against speakers on the basis of their political identity or viewpoint. It may only prohibit unprotected expression, provided it does so evenhandedly. Conservatives and Libertarians rightly oppose much governmental restrictions on how private companies do business.

 

They also rightly oppose governments regulating the speech that can be conveyed on social media platforms, which the left is now pushing for in Congress. But conservatives and Libertarians also rightly love the First Amendment that protects the natural right of freedom of speech. Viewing nongovernmental social media platforms as places of public accommodation or as public forums does not justify the government suppressing constitutionally protected speech on those platforms. It is Orwellian to equate protecting the freedom of speech of individuals who wish to speak on social media platforms with the suppression of speech on the grounds that both are regulations of speech.

 

To conclude—I’m going to conclude—I have not reached any final opinion. Like Eugene, I have not reached any final opinion on whether to regulate social media companies as public accommodations or public forums. But I do think we need to stop thinking in terms of the binaries of the public-private and government-nongovernmental. The antislavery constitutionalists and the Republicans who wrote the Fourteenth Amendment recognized the existence in civil society of three categories, not two. So too do our current civil rights laws that are deemed to be sacrosanct and so too should Libertarians and conservatives. Thank you.

 

Hon. Barbara Lagoa:  Thank you, Randy. Next we have Adam.

 

Prof. Adam Candeub:  Professor Barnett’s perceptive and I’m sure to be highly influential analysis of Republican citizenship as well as his discussion of the Supreme Court’s opinion in the civil rights cases moved me to recall the opinions only dissent, which I’m sure most of you in the audience will remember. It’s Justice Harlan’s, one of the great dissents in American legal history.

 

In it, Harlan argued that the federal government in fact did have the power under the Civil Rights Act of 1875 to mandate nondiscriminatory treatment, to quote the opinion, “in accommodations and facilities of inns, public conveyances, and places of public amusement.” As I understand Professor Barnett, he argues that equality merely within the governmental sphere is not enough for full citizenship in society and full participation in liberal democracy. Rather, citizens must have the chance to engage fully in the public sphere as well. I think Harlan’s dissent has clear parallels to Professor Barnett’s position.

 

To quote Harlan, “The one underlying purpose of congressional legislation has been to enable the black race to take the rank of mere citizen and to secure the enjoyment of privileges belonging under law to them as component part of the people for whose welfare and happiness government is ordained. Today it is the colored race which is denied by corporations and individuals wielding public authority rights fundamental to their freedom and citizenship. At some future time it may be some other race.” And the Harlan dissent offers important insights to the panel’s topic, private control over public discussion.

 

First, the dissent recognizes the corporations and individuals wielding public authority can interfere with citizens and rights fundamental in their freedom and citizenship, and that’s precisely our question. Whether Facebook, Googles and Twitters -- Facebook is one of the supporters of today’s event? Is that correct? Okay. Let’s just focus on Google and Twitter.

 

So that’s precisely our question, whether Google and Twitter’s censoring of the Hunter Biden tapes, the bizarre de-platforming and censoring of information critical to public health authorities, their targeting of competitive firms with different ideological outlook, such as Parlor, constitutes, to use Harlan’s phrase, corporations and individuals wielding public authority to interfere with rights fundamental to freedom and citizenship.

 

Second, the dissent has direct application to the regulation of communications technology. One of Harlan’s dissent’s main arguments for the Civil Rights Act of 1875’s constitutionality is that the federal government has the power to regulate common carriers in other industries affected with the public interest. He concludes, I think rightly, that this common carrier power extends to the areas of the civil -- extends to the areas of the Civil Rights Act of 1875 covers, namely accommodations and facilities, inns, public conveyances, and places of public amusement. And it is not surprising that the 19th century courts classified the new technologies, such as telegraphy and telephony, as common carriers.

 

These courts recognized that nondiscriminatory access to communications technology was just like railroads, ferries and inns: a vital part of citizenship. The logic of Harlan’s dissent supports the position that some types of social media regulation, therefore—social media is simply the telephone of the 21st century—is appropriate to maintain and strengthen our democracy.

 

Well, then what are we talking about when it comes to social media and big tech regulation? I realize that speaking in favor of government regulation at the FedSoc national convention is not the wisest course. Libertarian lightening may come strike me down.

 

So let’s begin with a basic principle of regulatory economics, at least as I learned it. Government should only interfere when there’s a marked failure. With that principle, with which I think even the most ardent laissez-faireist would agree, can we justify social media regulation? Well, as a first response, I’m going to evade the question because with regard to social media and Google this question may not be apt. The question assumes that regulated parties are market actors that are concerned with market failure. I think it’s fair to say that the large social media firms are not simply market actors, but also political actors.

 

Indeed, no one can look at the election of 2020, the suppression of the Hunter Biden tapes, the I would say conspiracy against Parlor, the de-platforming of our duly elected president on Twitter are 'Karen' platform behavior: de-platforming people who disagree with public health authorities or the newest one, disagreeing with the so-called climate change consensus, and not see political ideology and preference playing a driving role. When our county’s major communications networks discriminate against the views of one half of America, this is a political failure, not simply an economic failure. And let’s be honest. That one half of America against whom they’re discriminating includes a lot of people in this room. I know you. I recognize you, and I would think if trends continue, you know, you’ll be de-platformed. I suspect I will.

 

But beyond these more partisan interests, I think there’s a reason why people should be interested in this political failure. Why? Because markets depend upon the rule of law, and without democratic and functioning governmental institutions the rule of law will erode.

 

Second, directly responding to the question of market failure, I think there is indeed a market failure here. Now, given the number of antitrust specialists in this room, I’m a little bit hesitant to make too broad claims, but I think few would doubt that big tech platforms exercise some type of market power. And many would claim that this market power is sufficient to be in violation of the antitrust laws.

 

Third, we must be honest and recognize that we do not understand online behavior perfectly or even well, and that it may not obey the predictions that classical economic assumptions would make. Much research suggests the platforms use techniques to encourage addiction and to keep our eyeballs on their screens looking at their advertisements. We know that social media is highly correlated with depression and mental illness, particularly for teenage girls. The rate of mental illness of depression is the highest we’ve ever seen in our history, and it correlates very strongly with social media use.

 

So the choice to use social media could be like drug use, an example of hyperbolic discounting were users value a media pleasure too highly compared to subsequent disutility. And just as Odysseus asked his men to regulate him by tying him to the mast while sailing through the singing sirens, so we must regulate ourselves when using social media. So if I got the true Libertarians out there in the audience to the position of maybe perhaps possibly some type of regulation is appropriate, what would this regulation look like? Conservative advocates favor the most mild type of social media regulation, and I think this is found in the social media law -- I think the best one that’s passed -- that of the state of Texas.

 

These regulations include antidiscrimination requirements of the sort which local phone, airplanes, and other common carriers function to this day without much comment or concern. Under these regulations, firms cannot refuse service on the basis of race, religion, or political affiliation but must serve any customer who will accept their offered services. A state could impose this type of mandate under this common carriage or public accommodation jurisdictions. There are legal issues social media -- laws regulating social media present. They’ve already been examined to some degree quite well by Professor Volokh and by Professor Barnett, and I’m sure we’ll continue that discussion in the Q&A that follows.

 

But as a prelude to the discussion, I will bring up a largely forgotten case but one of my personal favorites. As a communications lawyer, I guess we’re entitled to somewhat idiosyncratic preferences -- and that’s an 1896 United States Supreme Court case, Western Union v. James, certainly not as famous as the civil rights case. This case reviewed a claim that a Georgia law regarding telegraph delivery of telegraphs that could emanate from outside of Georgia but delivered within the state was unconstitutional.

 

Western Union argued that the law interfered with the federal government’s power under the Commerce Clause. The Georgia law read in relevant part “it is hereby enacted by authority of the same that every electric telegraph company shall transmit and deliver its telegraphs with impartiality and good faith.” The U.S. Supreme Court upheld Georgia’s law, and of course the First Amendment was not even considered. It was a different time in First Amendment jurisprudence. The case led to widespread state regulation to ensure timely, impartial, and nondiscriminatory delivery of telegraphs.

 

The conservative social media laws ask no more than the Georgia statue at issue in Western Union v. James. We seek to have messages impartially delivered. It seems to me what made sense in 1896 still makes sense today. Thank you.

 

Hon. Barbara Lagoa:  Thank you, Adam. Thank you. And last we have Jane who’s going to be the contrarian.

 

Prof. Jane Bambauer:  Yes, I am here to defend the status quo. It’s a dirty job. I’ll do my best. I also reserve the right to change my mind. It sounds like we’re all sort of saying some version of this, that none of us are totally sure what is best in this. We’re in a real pickle. But still, I don’t see sufficient reason for lawmakers to interfere with Facebook or Twitter or any other social media company when they remove content or even users for their platforms.

 

I am quite sympathetic to the positions that each of my colleagues has staked out so far. I’m also kind of an unlikely defender of these companies because I actually don’t even use Twitter or Facebook that much. They don’t give a lot of value to me in my life, and I agree they’ve been too deferential to the sort of elite establishment, more liberal point of view. And it also really bothers me -- there is some moral failing.

 

It bothers me that a lot of time content is removed not because the people who saw the content on the platforms found it objectionable but because others who never received it on the platform find it objectionable that it was on the platform being enjoyed and consumed by somebody. That dynamic is -- removing content for that reason is repugnant in most circumstances, I think, to me.

 

Nevertheless, I think something like a public accommodation or must carry rule for these platforms would be unconstitutional but also bad policy. So first of all, I think content moderation is clearly an expressive activity, so on Eugene’s chart it somewhere pretty high in the pecking order. And that’s because users of social media in their role as listeners are selecting social media platforms in part based on the curation and house rules of the platform.

 

Now, I want to be really clear. I’m not saying that users -- you know, that content moderation is a main factor or even a very important factor that attracts people to the platform. I know that other users and the sort of content that they’re likely to see are the most important factors. I also don’t mean that users want social media to have a really heavy handed approach to content moderation. To the contrary, I think we understand that one of the more unique and valuable qualities of social media is that the users themselves have a lot of power over the type of information that they wind up seeing. They control the content by picking who they’re going to follow, who their friends are, and then also sort of passively by engaging and commenting on or liking certain content that winds up feeding into an algorithm that give them more of that sort of content.

 

Nevertheless, we do outsource some of the preliminary editing work that has to be done to maintain some minimum standard of decency on any platform. And these minimum standards are important. They’re the reasons that all of us -- or at least most of us aren’t on 8chan, right? So to give a sense of how important these are, keep in mind that even small changes in the newsfeed algorithm on Facebook or Twitter winds up causing big difference in how long and how much people engage with the platform.

 

Now, I know the term engagement has come to have a pretty negative connotation in the sort of anti-tech media portrayal as if engagement is something that’s sort of extracted involuntarily from people. Adam alluded to this a little bit. It may be true to some extent, but on the other hand, every expressive media is trying to engage listeners and will go to some lengths of manipulation, somewhere in the scale of manipulation, to do so. So to me the fact that Facebook users are quite sensitive to the curation choices and content moderation choices of a platform suggests that users really are in control -- listeners are in control here and that if Facebook weren’t able to clean up some of the really offensive and objectionable content and people’s news feeds were if not inundated or even occasionally interrupted by that content that they find obnoxious or indecent, they would leave. Or they would at least spend much less time on Facebook.

 

So that means that Facebook is giving a curated speech experience. Their house rules are -- they are inconsistently enforced. They’re enforced probably with bias. I agree with the panelists here. But they are still closely linked to the user’s taste for speech, taste for some minimum quality standard for speech. And so that makes it more like a parade organizer or a bookstore, I think, than some of the other analogies. By the way, I also do think that Facebook and Twitter do a lot of curation and censorship based on concerns related to safety, to societal harm rather than their users’ taste. This too might be expressive. I think I take quite a different read of Pruneyard -- and maybe I’ll put a pin in that. And we can talk about it a little bit. But I think that can help explain why public accommodations law does not -- would not forbid Facebook or any other platform from removing speakers who are engaged in speech on their platform that they find harmful.

 

Okay. So second, if you agree with me that platforms curation decisions are at least to some extent expressive, then it means that a legal mandate to carry messages that they don’t otherwise want to carry could only be justified if listeners or users are basically locked into one speech platform to the exclusion of other either existing or potentially future platforms.

 

Courts are comfortable occasionally requiring speech platforms to host disfavored speakers, but that only happens when the court is convinced that listeners are only going to encounter a particular type of media in one place. So it explains why a company town, for example, has to be a venue for disfavored speakers or a licensed radiobroadcaster -- why they would have to come under some sort of legal obligation to provide access to speakers. So it might seem like Facebook and Twitter have locked in their users sufficiently, especially because the Court seems willing to acknowledge that lock-in effects can be kind of behavioral or even sort of irrational.

 

So Turner Broadcasting was a case where the Supreme Court decided that cable has to carry local broadcasting, and the reason was that they thought that it would unlikely that people would physically change a plug in the back of their TV to switch from cable to local broadcast and then switch it back. So if that was enough for the Turner Court, it seems like, okay, well, having all of your family and friends in one place on Facebook and having a profile that you’ve already invested a lot of time in with pictures and content and what not, that probably will feel like you’re pretty locked into Facebook. I don’t think that’s enough though.

 

So in part I have to admit that I’m just not totally convinced that Turner and Redline hang together with other better reasoned cases like Tornillo, so you can take this with some grain of salt. But there are all sorts of inertia and sunk costs that affect speakers and listeners. So those who subscribe to the New York Times are just not likely to ever bother checking out other newspapers, especially if they haven’t seen content that they object to on the New York Times. And yet, no court would sort of intervene on the basis that they’re locked in.

 

So that is enough in my mind to already raise doubts, that even if Facebook locks in its users, that still might not be enough on its own to justify a mandate. But in any case, Facebook doesn’t lock in its users. Here I disagree with Adam. It’s not in a position where it can rest on its dominance. The users discipline Facebook all the time, and Twitter too, not by leaving all together in a sort of noisy protest, but rather just by reducing the amount of time that they spend there and choosing other online platforms or even going to do something else altogether.

 

So if Facebook didn’t reflect the values and minimum taste requirements of its users, it would lose their attention. And looking at Facebook and Twitter’s behavior over the last few years, I see desperate media companies not that different from the traditional media companies who are desperately trying to figure out what their median user wants and what their edge users will tolerate or even demand in terms of censorship and promotion. So those aren’t the behaviors of a monopolist. Okay.

 

So finally—and I know I’m close to the end of my time—also even if I were convinced that a must carry rule is good policy, I don’t see how it can be administrable, so first of all, as Randy mentioned, a platform would be able to proactively purge illegal content. But the edges of -- the boundaries of what some of the categories of illegal content are really quite murky, what it means to be incitement, what harassment means, what material support means even. These are hard to identify with certainty, and so we’re likely to get a lot of litigation.

 

But also I just wonder about things like troll farms, the Russian internet research agency, that creates overtly political content that listeners seem to want and engage with and yet are inauthentic speakers. So is that something that would have to be tolerated on a platform? Spamming is another concern. So I think by the time we’re done with this we’d have such Byzantine kind of time, place, and manner rules on these platforms that we’d see a constant stream of litigation.

 

And more importantly, though, I think that they just might break the companies that we claim are the public square. If there’s too much content that users don’t want to see, they and the advertisers are going to move to smaller forums that are not under this regulation. And so there goes the public forum. All right. Thank you very much.

 

Hon. Barbara Lagoa:  Thank you, Jane. Well, I think we have a lot to talk about. I think everyone has sort of the same consensus, which is no one really knows what we should do.

 

Prof. Jane Bambauer:  That’s the one thing we agree on.

 

Hon. Barbara Lagoa:  Now, it’s interesting to me, Jane, you talked about people can go to other social platforms, but the reality is what are the other social platforms? Because Twitter is the platform for most people to communicate. Then you have Google which controls 90 percent of the market share. So it does become an issue, which is where does someone else go if you are de-platformed or you’re canceled on Twitter?

 

Prof. Jane Bambauer:  So I personally have followed de-platformed people to Substack, so I think that there are -- it’s a different -- I get that it’s not really social media. It’s not social in the way these other --

 

Hon. Barbara Lagoa:  I mean, it wouldn’t be the modern public square. It would be sort of like a little sort of, you know, off-Broadway.

 

Prof. Jane Bambauer:  Right. But I think the Parlor experience is a really good one to focus on for a second. So many people -- there are many ways and angles to view what happened in the aftermath of the great de-platforming, but the fact is 15 million people joined Parlor in a very short amount of time. And right at the height of that momentum, Parlor was stopped, but not by Facebook and not by Twitter. They were stopped by Apple and Google who control the smartphones, and they were stopped by the cloud service firms of Amazon and other cloud servers.

 

So there may be an antitrust problem there, but I think the fact that users who are upset about content moderation show such willingness to move so quickly is a sign that there is an appetite for competition here. And I know 15 million is many fewer than the number of people who subscribed to President Trump’s Twitter account. I understand that. But I guess that takes me to the ultimate conclusion that part of the reason that some people won’t switch to Parlor is because Parlor has promoted itself as a place with no or very minimal house rules. That matters. I think some people will just be reluctant to go to a platform -- many people will be reluctant to join a platform with no house rules.

 

Hon. Barbara Lagoa:  I’m going to bring this to Adam. I’d like to talk to you about an amicus brief that you filed in a state court case called Ohio v. Google. Can you discuss a little bit the facts of that case and what your amicus position is? Because to me it’s sort of interesting that when I read the amicus and I read the complaint in that case how I think of Google just as what it does, but it really is involved and it owns part of the infrastructure. It owns a lot of different things, and it’s tangled up in a lot of what we consider to be the components or how you put together the modern public square. And it’s not just Google, the search engine.

 

Prof. Adam Candeub:  Right. I think Google is the central directory for the modern economy and really our culture. That’s where people go to find information and direct themselves, so I think that’s a very natural and correct intuition. And the suit flows from that intuition. Once again, we’re back to obscure 19th century common carrier law. And in many states, courts retain the power to declare firms common carriers and subject them to common carrier regulations, just the judge doing it him or herself, which you might like, Judge.

 

So using these old cases, Attorney General Yost of Ohio brought such an action against Google, and I think he has a very good claim because Google does play that central role that the telephone, that the telegraph and that the railroad played in earlier generations. And that’s pretty straightforward suit.

 

Hon. Barbara Lagoa:  Do you think other states are going to follow suit as Ohio did?

 

Prof. Adam Candeub:  Well, a lot depends upon the peculiarities of state law. Ohio just happened to have this common law continuance of judicial authority. But there are plenty of other states -- and if there are any state AGs out there who want to talk, I’m available after the panel.

 

Hon. Barbara Lagoa:  I’m going to stay with you, Adam, for a second because I want to talk about the article that you wrote “Bargaining for Free Speech: Common Carriage, Network Neutrality, and Section 230.” It was cited by Justice Thomas in his concurrence in Biden v. Knight First Amendment. And in that concurrence he raised a possibility of treating online tech platforms as common carriers or public utilities from a constitutional regulatory perspective. Can you sort of talk to the audience for those who are not familiar with either your article or Justice Thomas’ concurrence about sort of where the First Amendment fault lines come into play with regard to private companies regulating user content?

 

Prof. Adam Candeub:  Sure. So the statement -- and it was a statement concerning a denial of certiorari. It wasn’t part of an opinion. But it actually tracks very well the discussion that we’re having right now. The case involved an issue concerning whether or not President Trump’s personal Twitter account was a public forum. And as you remember from the First Amendment law, if it’s a public forum, there are limited powers of the government to censor -- to limit speakers. The Court dismissed the certiorari petition as moot because of course we have a different person in the White House now.

 

But Justice Thomas took this opportunity in a -- and I should say -- not because my article was cited because it was a truly scholarly discussion. I mean, I learned a lot. There was references to cases that I haven’t even heard of -- to rehash some of the issues that were brought up here, which is what are the roles of private entities when they assume essentially a public role in democratic discourse.

 

Hon. Barbara Lagoa:  Eugene, you mentioned and so did Randy that neither of you have reached a final opinion as to whether social media companies should be regulated as public accommodations. Personally as the child of people who fled Cuba, regulation by the government makes me a little nervous. So if there were to be regulations of digital platforms, how do you envision the enforcement regime working?

 

Prof. Eugene Volokh:  Sure. So it’s a very good question. I don’t really fully know the answer. I do want to suggest there are two separate questions here. Just to remind people, I mean, it’s obvious there are, but it’s worth remembering. One is what First Amendment constraints are there on this. So for example, the First Amendment allows people -- allows states and Congress to impose rights of access to other’s property even in the absence of any monopoly or quasi-monopoly. Turner Broadcasting involved something that did talk a little bit about monopoly. But Pruneyard -- you know, shopping centers, there are lots of shopping centers out there. Rumsfeld v. FAIR involved access to universities which are not monopolies.

 

So as a First Amendment matter, it may be perfectly permissible to impose restrictions even on entities that don’t have a lot of market power compared to the market as a whole. On the other hand as a policy matter I think the more we can leave to competition, the better. So one possibility that people have been talking about that’s an interesting possibility, though in some respects much more radical in the change that it would create to the structure of these things, is a requirement of interoperability.

 

So with phone companies, they’re partly non-monopolies because I can call anybody using my phone company regardless of what phone company they’re on. If phone companies only provided access within their network, then it would be pretty likely because of network effects that one company would end up dominating everything because nobody would want to join the competitor because they wouldn’t be able to call their friends on the competitor.

 

So you can imagine a regime where Facebook and Twitter for example had to provide interoperability, which is to say that if MeWe, a competitor to Facebook, or Parlor, competitor to Twitter, comes up, then they could deliver things to people who are on other networks and can receive things from people who are on other networks. And that would make it easier for upstarts to be created, and somebody could -- in part because somebody could move to an upstart without losing access to all of their friends on the other platform.

 

So you could imagine that as a sort of content neutral rule that might better harness the power of our marketplace rather than purely the power of regulation. This having been said, I’m sure there are lots of both technical issues and economic issues having to do with that. And certainly Facebook and Twitter might say, we invested billions of dollars in creating our networks in a way that was not open to third parties, and we are entitled to preserve that investment without this kind of very massive structural regulation.

 

But that’s one possible alternative that some people have been talking about. Try to make sure that there are going to be many more competitors. And the way to do that has to be through some sort of interoperability requirement.

 

Hon. Barbara Lagoa:  Randy, do you have a response?

 

Prof. Randy E. Barnett:  Yeah. Here’s one way to think about it. Eugene works for UCLA, a government run school -- state-owned school. I work for Georgetown, a private university. This means that Eugene has certain First Amendment protections at UCLA. At Georgetown, I don’t have First Amendment protections because it’s a private university. The idea that Georgetown would be subjected to the same kind of free speech requirements -- I’m not proposing this by the way. But the idea that Georgetown would be subjected to the same kind of free speech protections that UCLA is doesn’t strike me as that radical a proposal.

 

I mean, I don’t think it would be a radical result. I don’t think it’s necessary or proper to do that with universities, frankly, because they’re not common carriers. They’re not public forum. They don’t fit the criteria. So I’m just using it as an analogy.

 

Our conditions of employment are not that different. Georgetown actually does honor free speech. We have a free speech policy. It’s voluntary in the sense that it’s not mandated by the government. But I think what we’re -- actually, we’re not proposing, but what we’re open to -- or what I’m open to the suggestion is that a private entity like Facebook, Twitter, and UCLA would be subject to constraints provided by the First Amendment that UCLA is already subject to but Facebook and Twitter are not. So it doesn’t seem like it’s that onerous.

 

And at the same time, as Eugene has pointed out and as I tried to also point out, UCLA is free to regulated unprotected speech and to exclude unprotected speech. That would not violate the First Amendment. And UCLA cannot be made to speak by the government and say something that they don’t believe in. And I think the same kind of constraints -- and the same sort of constraints should be imposed on regulations of these social media platforms if we’re open to them.

 

Hon. Barbara Lagoa:  Well, let me -- I’m sorry, Jane. Go ahead.

 

Prof. Jane Bambauer:  So even if we take that analogy, it’s not clear whether Facebook is like a room within the university where there might be some programming that the university should be able to control what other speakers say or whether it’s more like the open mall on the campus where almost anything goes. And so I think even in that analogy leaves some that open issues.

 

And I say this as concern -- I guess the other concern is that online behavior really is different from in-person behavior, and I think we should just sort of put that on the table here that when there’s a loud and obnoxious ranter on the public lawn of a university -- I know this from personal experience because it was my grandfather. He was the guy that was like the looney yelling at people, and I was so -- you know, all of the other family members were ashamed. But you could watch people politely just route around him. On the internet, you know, speech is just -- toxic trolling speech is much more common, and there’s less of social signaling and embarrassment and less reason not to do it.

 

The other thing I want to say, though, about this analogy to public places of accommodation is that I think two things are going on. The public accommodations law prevents businesses from controlling access based on the status of the person who wants something. And there I would agree with Randy that if Facebook were to say -- I would be comfortable with a law that says that Facebook could not deny someone access to a Facebook profile because they are -- because they subscribe to some sort of ideology. What’s going on here, though -- in fact what’s happening is that the speech and behavior that is actually taking place on these fora are the reason that the platforms are or are not taking action.

 

And so this is quite different. Even public accommodations can kick people out for being obnoxious and rude or for disturbing their other patrons. And even the shopping center in Pruneyard -- the entire case was premised on the idea, first of all, that it was a handful of orderly persons soliciting signatures. So that word “orderly” is important, I think -- and then also that Pruneyard actually had no direct First Amendment interest. They actually did not object to the content of the leafleteers. They objected as property owners rather than as a speech forum. And that, I think, really limits how widely we should be interpreting that case to prevent a company that’s trying to actually manage the speech that’s being done on their platform.

 

Prof. Eugene Volokh:  Can I just briefly respond? So I think there’s a lot to be said about all this and in support of what Jane is saying, but I want to just suggest one important distinction here. And I mentioned this when I was talking about the hosting function versus the comment management function. If I have a Facebook page, which I do but I never monitor -- but imagine that I had a Facebook page where I actually had people commenting, it would be really bad for our conversations if people could freely go up there, post vulgarities, post spam, post various other things. I could certainly imagine myself shutting down the Facebook page if people were intruding in those conversations this way.

 

So I think there’s a lot of value and possibly First Amendment protected value in this kind of moderation of comments on other people’s pages. On the other hand, it means nothing to me that some Nazi who thinks that people like me should have been exterminated happens to have a Facebook page. I’m upset that he’s out there in some sense, but it’s not something that interferes with my enjoyment of Facebook simply knowing that the Nazi’s out there. And if it did, then I don’t think that that’s sort of the kind of reasonable concern that needs to be accommodated.

 

To give an example. Twitter allows pornography. There are porn Twitter feeds out there. I don’t think I’ve ever accidentally stumbled across one or had --

 

Prof. Randy E. Barnett:  -- This is new information. I’ve 36,000 followers, but now I’ve learned something about Twitter.

 

Prof. Eugene Volokh:  Well, there you go. So again, that kind of mere presence of something on the network doesn’t really make it unusable except in the sense that some people may militantly say, I refuse to do it, have anything to do with any property that has anything like that on it. And again, we don’t view that as a reason to allow phone companies to block lines. So that’s why I think it’s important for us to distinguish attempts to moderate that are aimed at just removing things all together, even when they’re seen by willing viewers versus blocking things, and especially spam which needs to be blocked for things to be viable, that appear on the pages of people who didn’t volunteer for that.

 

Hon. Barbara Lagoa:  Well, this is sort of going with that idea, and this goes to Randy and Jane. And then everyone else can join in. But I can’t remember who it was. I think it was Randy who did -- in defining social media companies, you talked about that these forums should be limited to barring speech that the Supreme Court has found to be unprotected from government restriction. And I’d like to focus on one of them in particular which is the fraud category.

 

Fraud is unprotected speech, but would social media companies be able to ban misinformation? Because my idea of misinformation may be your idea of information, and who gets to decide what is misinformation and what is information? Because you have people who -- I mean, now we’re living in a society where it’s Orwellian, and I’m not sure I can call myself a woman anymore.

 

Prof. Randy E. Barnett:  Don’t distract me, Judge. As my Con Law 2 students will affirm, I make a very big point of observing to them that fraud is not the same thing as dishonest or false. Fraud is a tort. Fraud has elements, and you have to make out those elements in order to make a case of fraud. You can’t go into court and sue somebody for saying something that’s false. So the fraud that is unprotected is actual tort of fraud. Same thing with commercial speech.

 

Commercial speech is regulated by its own test, the Central Hudson test, in that commercial speech must not be misleading. But remember, that’s misleading with respect to commercial transaction, with respect to a commercial product. And so I could imagine that also could be something that Facebook or Twitter could ban, misleading -- that would not be protected commercial speech. But I think it’s very important when you make exceptions to liberty -- make exceptions to a presumption of liberty, to coin a phrase, that these exceptions have to be identifiable and definable and then very limited.

 

Otherwise, the exceptions will swallow the rule. That is the problem -- that’s the danger of making any exceptions. On the other hand, we have always made exceptions, and so we cannot fail to make exceptions. The exception to freedom of contract is fraud, duress, unconscionability, incapacity. We have exceptions to freedom of contract. They just have to be limited.

 

Hon. Barbara Lagoa:  Jane, do you want to respond?

 

Prof. Jane Bambauer:  Yeah. I agree with the description that fraud is quite narrow, that there are elements that -- there are intent elements. There are harm elements, which actually a lot of the misinformation -- you know, debates about misinformation sort of ignore whether there’s actually evidence of harm. That said, though, I’m more reluctant than Randy, again, to want to prevent a private company from experimenting with intervening with misinformation or potential misinformation that might have harmful effects.

 

Now, one reason I say this is that my thinking about what has happened in the wake of social media has sort of evolved over time. And I’m convinced that when people are engaged on social media, their interest in pursuing accuracy is sometimes intention or conflict -- direct conflict with their interest in a sense of belonging and with socializing and with the reasons we sort of -- the principle reason many people go on to social media in the first place. And so I am concerned about conspiracy theories, about false claims of various sorts that do not constitute fraud but that nevertheless cause harm, either internalities or externalities to other people. At the same time right now -- we’re not in the equilibrium yet.

 

Right now, Facebook and Twitter are over-moderating. I think I’d agree with that. They’re not -- they are making mistakes. They’re taking a sort of authoritative position where they should not -- where we should have much more humility.  And a good example is the lab theory of COVID, which was treated as misinformation and was removed everywhere on social media and then later now it seems like it’s much more credible. But still, I’m glad that we’re in this very early phase of --

 

Hon. Barbara Lagoa:  Can I interrupt you for a second --

 

Prof. Jane Bambauer:  Yeah.

 

Hon. Barbara Lagoa:  -- because I’d like to address that point which is a lot of people -- I’m not sure people in this room -- but a lot of people, particularly young people, teens, millennials, literally get their information and their news from this [holds up her phone] and mainly from Twitter. So when Twitter takes down any and all information on anything, even a news source, that you then have to track down in order to see what someone actually said, that is really very problematic for a country that’s a democratic country that believes in free speech and has a constitutional right to freedom of speech. How do we address that because that is a problem? It’s not just misinformation --

 

Prof. Jane Bambauer:  That’s the error from over --

 

Hon. Barbara Lagoa:  -- but literally taking down information and access to information.

 

Prof. Jane Bambauer:  Yeah. I mean, so that’s the error on one side. On the other side, leaving things up given that teenagers get all their news from Twitter, that may have its own perverse effects.  My preferred solution here ironically is to expand opportunity to go after speakers for -- you know, basically take the model of fraud and create some sort of negligence information sort of category so that those -- you know, speech that can be proven to have caused harm where the speaker knew or should have known that it was both wrong and likely to cause harm could be held liable. And then that way there’s much less pressure on the platforms to try to have to manage these things.

 

Hon. Barbara Lagoa:  Adam, I know you want to respond, but I think we -- can you respond briefly?

 

Prof. Adam Candeub:  I’ll be very brief.

 

Hon. Barbara Lagoa:  Okay.

 

Prof. Adam Candeub:  There’s a long line. I’ll defer to you.

 

Hon. Barbara Lagoa:   Okay. I think we should start taking questions from the audience.

 

Allison Hayward:  Good morning. My name’s Allison Hayward. I am the case screening manager at the Facebook Oversight Board. A lot of people are talking about content moderation here this morning. I actual do it. And I just want to say first of all this has been an excellent panel. There’s not a lot of mature, grown up analysis being done in this space in my opinion right now. And this is just emblematic of how we should be talking about these questions and questions that I live with every day.

 

My question, though, is this. We’ve been talking about American users on an American platform. I think U.S. users make up maybe 12 percent of the users on Facebook. The vast majority of our appeals, however, come from the U.S. But that’s another issue. I think that’s because Americans are confident and litigious, but anyway. So you’ve got a situation where you can’t really bound Facebook geographically. Facebook can bound itself in a negative way but geocaching particular regions if they’re being told they have to.

 

But as regulators, how do you deal with the fact that we’re talking about these wonderful First Amendment values that don’t apply legally to most of the people using Facebook? I think there’s something missing in this conversation, and I would really like to hear some proposal for how you would propose to manage this. Would you say that there’s one standard for users in the U.S. and one standard for the rest of the world?

 

Would you say that the rest of the world gets these wonderful First Amendment benefits that Americans have, which I treasure? Or is there some other way of coping with the fact that what we’re talking about is an international body of people that really cannot be geographically bound? Thank you.

 

Prof. Eugene Volokh:  So I’ve thought a little bit about this, and I’m a big believer in geolocation and geofencing in the following sense: when a company does business in many countries, it needs to abide by the laws of those countries. Some of those laws may be ones I don’t like, and those countries may dislike some of the laws that we have here in the U.S. But it’s not a serious imposition, it seems to me, in a company like Facebook or company like Twitter to say that if you’re operating in multiple countries you have to have different rules for different countries. Fortunately these days, there is good technology that with to a high degree of accuracy determines which country someone’s coming from.

 

And yes, there could be then a solution saying, look, cartoons of Muhammad may be illegal in Saudi Arabia or in some other country. I don’t know if they are, but let’s say they are. Understandable that’s the way things are there, and criticism of the Thai king is illegal in Thailand. I think that’s very bad, but they’re a sovereign country. And there should be -- therefore, if Facebook wants to operate in those countries, there should be blocking like that there.

 

But we should insist in America that they not enforce these rules here because the danger otherwise is that the most restrictive regimes, could be China -- not all the companies operate there, but to the extent that some do -- China says, you have to block criticism of Xi Jinping throughout the whole country or throughout the whole world, excuse me. So I think it’s perfectly sensible to have different rules.

 

And just as I think Americans are entitled to speak subject to American law on Facebook I wouldn’t begrudge the French to insist that the Frenchmen be allowed to speak subject to French law on Facebook. And to the extent that that is somewhat burdensome on a company—and I can see why it would be—that’s just a burden that comes from operating in multiple countries.

 

Prof. Randy E. Barnett:  I have something I think really quick to add, and that is that if a privilege immunity of citizens of the United States have been violated, that person is entitled to a remedy, either in state court or by state law. Or if states don’t do it, then federal government can do it. And so if somebody is barred from Twitter or Facebook who’s an American citizen, they would exercise this cause of action that they would have either by statute or some other means. And Facebook or Twitter would have violated their rights as an American.

 

I don’t think that this would give Congress the power under its Section 5 powers to have an extraterritorial law which would protect the rights of citizens of other countries. This would be a protection that would be afforded to Americans under the Constitution and asserted by them as individuals when their individual right has been violated.

 

Hon. Barbara Lagoa:  Does anyone else want to respond? Okay. Next question.

 

Anthony Bruno (sp):  Hi, my name’s Anthony Bruno. So questions for the regulations curious panelists, it seems like there’s two different things going on here. And I just want to drill down on it. It seems like you may all be open to the idea of some affirmative legislation passed by Congress to restrict or provide protection for the users on these platforms. That might give some protection, but I also think that’s quite unrealistic that we would actually see some legislation coming out of Congress. Maybe you’d get something at the state level.

 

But I think there’s a second question. I think Professor Barnett’s touching on it a little bit more in the context of the individual right of the user. Is the panel open to the idea that the user, absent some statute giving them some protection, can actually go into court to vindicate their First Amendment rights as it would be if it was government controlled and they were de-platformed. Do we need a statutory protection here, or are we saying there’s a constitutional right that an individual could go into court to vindicate?

 

Prof. Jane Bambauer:  Yeah. So right now doing nothing, I think -- if no other statute is introduced, I think using a public accommodations law to make that sort of claim is almost -- is bound to be a sure loser, especially because we do have a federal statute, Section 230, that protects or gives -- that, yeah, protects a platform’s interest in doing its own content moderation. And so I think something at the state level at least --

 

Hon. Barbara Lagoa:  Jane, can we talk a little bit about 230 because we haven’t really talked about that?

 

Prof. Jane Bambauer:  Yeah.

 

Hon. Barbara Lagoa:  Because 230 -- when that came into being, it was at the beginning or the advent of this technology, and it was AOL and CompuServe which obviously was a long time ago. And they don’t exist anymore. So the question is the government gave these companies that immunity without anything in return.

 

Prof. Jane Bambauer:  Well, I wouldn’t quite put it that way, but so the platforms in the early ages of the worldwide web -- the concern was that if platforms did anything active to remove bad content, maybe illegal, maybe not illegal content, that that active engagement with the content would make it susceptible to liability as a publisher for any content that was left up that was also illegal -- defamatory, say.

 

So you can see how something like Facebook wouldn’t exist if any person who’s ever been defamed could sue Facebook for failing to remove the post, right? So Section 230 was designed to encourage companies like Facebook or the early progenitors from going ahead and actively removing bad or illegal content without having to worry about becoming effectively a publisher. Now, today I think there’s a big discussion about whether that’s the right policy now that the World Wide Web is well established and these platforms are clearly doing fine in terms of their revenue.

 

Hon. Barbara Lagoa:  And I can’t remember now, but I think Adam wrote about this or maybe it was Randy. But the dichotomy where the New York Times will have to pull a letter if it was in print that’s defamatory. But if the same letter is put on the New York Times’ Twitter account, it does not, which is strange.

 

Prof. Adam Candeub:  It’s very strange, and I also think it goes to our content moderation discussion because the platforms I think incongruously claim that they have protection under Section 230(c)(1) which involved third party speech when they’re moderating content. So they claim that they have complete immunity to violate antidiscrimination laws, fraud laws when they’re moderating content because it’s third party speech. At the same time on the other side of their mouth they’ll say well, we have a First Amendment right to content moderate because it's our speech. So I think that’s an inconsistency that the courts have allowed the platforms to continue with and I think something that will have to be examined more closely.

 

     

Hon. Barbara Lagoa:  Thank you.

 

Prof. Eugene Volokh:  If I could just quickly respond to a somewhat different facet of the question. As I understood the question is under existing law -- without any new statutes can there be a claim brought, an exclusion decision by Facebook or Twitter or Google is illegal or unconstitutional. And I think the answer is no. I don’t read Section 230(c)(2) as broadly as Jane does. I used to, and then Adam persuaded me otherwise.

 

Prof. Adam Candeub:  That was the biggest success of my academic career.

 

Prof. Eugene Volokh:  But there’s got to be a cause of action. Before we get to the question of whether it’s preempted by 230, there’s got to be a cause of action. Generally speaking, state public accommodation law does not apply to platforms, and I think correctly. And the First Amendment doesn’t apply to platforms because they are private actors. There could be good reason for Congress to try to treat them as public and publicly regulated, but under existing law they are private actors and, I think, quite correctly treated that way. There are a few possible asterisks in a few possible situations. But generally speaking, it would require legislation whether federal or state for any of these restrictions to operate, as it should be, I think.

 

Hon. Barbara Lagoa:  Let’s go to the next question in the front.

 

Tyler Herman (sp):  Good morning. My name is Tyler Herman. I want to highlight a specific type of content moderation and see if it impacts your analysis at all or specifically the answer to the previous question in fact. Over the last two years a big focus of the mis- and disinformation has been election related mis- and disinformation and at the federal level, I believe -- and certainly secretaries of state have created programs where they are monitoring posts to social media. And they, the government entity, are going to Facebook or Twitter and saying, you should take a look at this post; this post is false; this post is problematic. And then it’s the social media company that’s removing it, but they’re doing it at the direction of or after being highlighted by a government entity.

 

Prof. Eugene Volokh:  So that’s the asterisk that I mentioned. There’s an interesting question. What happens when private entities are -- kind of get messages from the government saying, take stuff down? I did some research recently, and here’s the shape of the First Amendment law in the circuits on this. If the government says, you better take it down or else, that’s government coercion. That’s state action and that is in fact -- state or federal. It doesn’t matter. That is in fact a possible First Amendment violation. But the cases say -- they’re pre-internet cases, but they’re very structurally analogous -- if the government merely urges entities to take things down, writes a letter some company saying -- or some bookstore, you shouldn’t carry this game that people find offensive for ideological reasons that we find offensive -- that’s just government speech. And that’s just kind of government encouragement that they’re entitled to engage in.

 

Here’s the curious thing. When it comes to the Fourth Amendment, the rule is somewhat different. At least a lot of lower courts say if the government calls up me as a landlord and says, look, we can’t search your tenant’s apartment because we don’t have probable cause and a warrant, but we know you can; and we know you have the right under your contract to go and kind of inspect it for various things; next time you’re there, you want to check and see if there are any marijuana plants or something like that, then that is state action. So government persuasion and encouragement and requests in the Fourth Amendment are state action, in the First Amendment are not. And I don’t know what the right answer is.

 

Hon. Barbara Lagoa:  But you’re asking that person to become a state actor for you. That’s why.

 

Prof. Eugene Volokh:  Right. But the thing is if the government is calling me up and telling me to remove something from my site just because -- I mean, the classic example is a police department calls up a newspaper and says, look, we know you’re about to run this story; we can’t stop you, but it’s going to interfere with a police investigation; don’t you want to catch criminals; don’t you want criminals to be caught; if you do, can you just accommodate us on this? I think that happens not infrequently. CIA sometimes does this with regard to national security things. And I think that’s generally thought not to be enough to be state action. Maybe it should be. I don’t know.

 

Prof. Adam Candeub:  Well, first, we’ll talk about the cases maybe afterwards. I think that there is some case law suggesting that a coordination of parallel action, even in the First Amendment, can constitute state action. But I want to get this back to common carriage and one of the benefits of a common carriage type regime. As the questioner correctly pointed out, one of the big problems of having large, concentrated media entities is that they can collude and cooperate with government and take away our rights and do bad things to democracy.

 

Common carriage law is very -- it has a nice effect because it allows the media companies to say, look, I’m sorry, Mr. Government; I cannot bias my reporting or my algorithms to make you happy; it’s against the law. And it places a nice barrier between the government and media and First Amendment actors. I think that’s one of the reasons why we have a free press and we have not worried about things like constant telephone surveillance.

 

Hon. Barbara Lagoa:  Let’s go to the microphone in the back first.

 

Duane Horning:  Good morning. My name is Duane Horning. I’m from San Diego, California, the home of Pruneyard. And Pruneyard is notable because it requires shopping centers to function essentially as the public square -- literally the public square, and it requires the private owners of those shopping centers to accommodate public speakers as the government would in a public square. Pruneyard is limited to California. It was a California Supreme Court case. The U.S. Supreme Court case affirmed it but only for California.

 

Now, I’m not a big fan of Pruneyard, but it does seem to me that it’s a very easy step to go from physical shopping centers governed by Pruneyard to internet platforms, where shopping centers are physically the public square, and now the internet, essentially, and the companies we’ve been talking about are the electronic version of that public square. It seems to me that that would be almost an automatic extension. Now, it is limited to California, but it just so happens Facebook and Twitter and Alphabet and Amazon -- all these companies are in California. And California has 11 percent of the population.

 

And if 12 percent of Facebook customers are in the U.S., I think probably the other 88 percent are in California. So if Pruneyard was extended to apply to these companies only in California, the effect would be truly worldwide. Why wouldn’t Pruneyard be an easy place for someone who wanted to regulate the internet actors as the public square -- to be a basis to do so?

 

Prof. Adam Candeub:  Just quickly, the sad reality is, from my perspective, that the state courts in California have been not very pro Pruneyard, and they have not expanded, as far as I know, the doctrine in a lot of different places. But I’ll leave it to Jane.

 

Prof. Randy E. Barnett:  I see a difference between shopping centers which provide a public accommodation for shopping in which a nondiscrimination norm should be applicable under public accommodation law and is applicable under public accommodation laws -- you can’t stop people -- you cannot discriminate against people on the basis of race and religion and others from shopping at that shopping center. I don’t see public shopping centers as creating an expressive forum -- a forum for expression.

 

And therefore, I question whether a First Amendment type protection is applicable to a private arrangement, which is not about expression at all. What we’re talking about today is the creation of expressive forums and whether a public accommodation of an expressive forum people can be excluded because of their speech. And that would be the regulation of an expressive forum that would be bound by a First Amendment regime, but I think private shopping centers don’t fit that description.

 

Duane Horning:  Can I just follow up on that? Because actually under Pruneyard, that’s exactly what’s required. It has nothing to do with excluding people because of their color not to shop there. It requires the shopping center owners to allow public expressive speech.

 

Prof. Randy E. Barnett:  I know. I’m dissenting from Pruneyard is what I’m doing. And the fact that it’s a California case makes it all the worse.

 

Prof. Jane Bambauer:  The shopping center, though, in Pruneyard never actually argued -- this is why Randy’s point about expressive forum isn’t so important. They never argued they are an expressive forum. They argued that as a private property owner merely because of their property interest they should have a First Amendment right to exclude speakers because the speakers are -- it would become sort of compelled hosting of that speech. And the case, I think, is limited to -- it’s quite limited to its facts.

 

So first of all, like I said earlier, the majority emphasized that these were orderly persons, so they weren’t sort of getting in the way of the shopping mall’s attractiveness to its other customers. But more importantly Powell’s concurrence -- if you read that, I think it has a lot of fodder for explaining why a social media platform could not be put in the same category as a shopping center. So first of all, Powell said that he’s worried that if there’s substantial annoyance to other customers for having to pass through or even be associated with the disfavored speech, then it would require these really elaborate time, place, and manner restrictions. And he thought that Pruneyard should not impose -- that even California state constitution could not impose that kind of Byzantine rule creation requirement on a private property owner.

 

But he also said that—and this I think is important—that the strong emotions that would be evoked by speech by others who are seeing it in a public place might cause a shopping center like Pruneyard to have to respond. And that, I think, is what’s happening with Facebook and Twitter, that they -- you know, Facebook really didn’t want to be in the content moderation business. But the reaction to what is posted there publicly and publicly viewable is so repugnant to people that Facebook, in order to keep credibility and the happiness of many of their users, had to respond.

 

And then finally, Powell explained that in this case there was no evidence about the sort of number and type of interest groups that are going to seek access to the center and that this shopping center, Pruneyard, did not object to the ideas that were contained in the particular pamphleteers. So all of those pretty narrowly conscribe Pruneyard. Eugene, I’m wondering what you think.

 

Hon. Barbara Lagoa:  Eugene, can we go to the next person? Because we have a lot of people still left. Let’s go to the front microphone. Thank you.

 

Connor Mighell:  Connor Mighell, Center for the American Future. This question actually goes to Section 230’s text, which probably should matter if regulation is on the table. 230(c)(1) says platforms should not be treated as providers of third party content that they host. But (c)(2) is the liability shield for platforms, and it seems to require platforms to only censor or edit in good faith a limited list of objectionable content, not just everything they don’t like, in order to fall under this shield. And circuit courts have interpreted (c)(2) broadly to shield a great deal of decisions by platforms or have kind of ignored it altogether in favor of (c)(1). What do you think SCOTUS will do when they reach (c)(2)? And how would you advise providers to read the entirety of Section 230 in the meantime?

 

Prof. Eugene Volokh:  So 230(c)(2) to be fair provides that platforms are immune for in good faith restricting content that is lewd, filthy, harassing, violent, or otherwise objectionable. So it doesn’t just have a list. It says “or otherwise objectionable.” And one controversy among lower courts, which are somewhat split on this, is whether that means anything the platforms -- and good faith simply means sincerely find objectionable -- so for example, they find certain ideologies objectionable.

 

Certainly people find ideologies objectionable. They can just block it because that’s otherwise objectionable. Or whether you follow the interpretive cannon of ejusdem generis which says that terms such as “otherwise objectionable” should be read in light of the terms that proceed it. And Adam in my article just out a few months ago in the Journal of Free Speech Law argues that in fact the ejusdem generis approach is the better approach.

 

And the thing that the earlier things all have in common is these are terms that have historically been used to regulate material on telecommunications media: harassing phone calls, violent television programing, lewd and etc. indecent material on the internet. And in fact every single one of those terms before the otherwise objectionable appears in one -- in at least one other portion of the Communications Decency Act, the very act that included Section 230, so that in context it shouldn’t authorize platforms to remove material because it’s objectionable based on its ideology but only because it’s objectionable based on criteria that historically have been used as a basis for telecommunications regulation.

 

Whether the Supreme Court will buy that or not, I have no idea. But I think Adam and I can confidently say think that’s the better approach. Once there’s an underlying cause of action that the plaintiff can bring -- again, the main problem for most of these plaintiffs is not Section 230(c)(2). The main problem is there’s generally no underlying cause of action that restricts the platform’s ability to remove things, even in the absence of (c)(2).

 

Hon. Barbara Lagoa:  Question in the back, please.

 

Anthony Pericolo:  Thank you. Anthony Pericolo, student at Harvard Law. So one of the biggest issues I’ve noticed with tech is that they’re supporting what I call demand side discrimination, which is effectively this woke fiction that the hamburger or the service that I’m using is more valuable based on the race of the owner of the business or the service. And so we’ve seen that by Facebook and Google putting out free advertising for businesses owned by specific races. So I’m wondering can there be and should there be a class action lawsuit against these platform for such content. And if not, does this weaken their Section 230 immunity?

 

Hon. Barbara Lagoa:  Who would like to address that?

 

Pro. Randy E. Barnett:  IDK.

 

Prof. Eugene Volokh:  It’s an interesting question. It’s kind of tangential I think to what we’ve been talking about. But it’s an interesting question. It all depends on whether there’s underlying cause of action.

 

Hon. Barbara Lagoa:  Let’s go to the front.

 

Questioner 7:  Sure. Professor Barnett earlier referenced sort of the idea that it would be acceptable to have -- or at least philosophically to have the same sort of rules apply to public universities and private universities in the free speech context. So I think I’ve sued about 35 public universities. I’ve never sued a private school. I did send a nasty letter that was successful to Georgetown.

 

Prof. Randy E. Barnett:  I’m sure it wasn’t nasty enough.

 

Questioner 7:  But I think the problem -- the reason I’ve never sued them is because if -- I think the problem is if you imagine instead of Georgetown imagine a religious college, like a Catholic University.

 

[Laughter]

 

Prof. Randy E. Barnett:  You’re talking to a nice Jewish boy up here who teaches at Georgetown.

 

Questioner 7:  So there are schools like Catholic University like Liberty for whom it feels different. The reason I think that’s relevant in this context is all this conversation has basically been about, you know, Facebook and Twitter and these major platforms. But things like GodTube also exist, websites that are -- that clearly do have their own values that they’re bringing to the conversation.

 

I’m wondering how the public accommodations arguments, even the common carrier arguments -- how would you limit an attempt to apply those kinds of policies to them without stepping into a situation where you really do have an obvious imposition on someone else’s free exercise rights, free speech rights? How do you sort of cabin it so it’s just Mark Zuckerberg who’s put out and not GodTube and all the others?

 

Prof. Randy E. Barnett:  Well, in case I was misunderstood, I was not at all proposing that universities -- private universities should be considered common carriers or public accommodations. I was not proposing that regime at all. All I was using it as is an analogy between one regime in which the First Amendment is being applied legally and another regime next to it in which it’s not being applied legally. And it doesn’t look that different and it wouldn’t be the onerous for that regime to be applied over here. It would look just like UCLA does. And so that was the only purpose of the analogy, not to suggest that Georgetown or any private university qualifies in that middle category I’m talking about.

 

Prof. Eugene Volokh:  So just two datapoints that directly relate to this point including really just universities. California has a state statute that bans private universities from imposing speech codes. And as best I can tell the skies have not fallen, and it is a restriction on private property and private entities, probably not very heavily enforced. It’s there. There is an exception for religious universities and likewise for private high schools -- an exception for religious high schools.

 

So one possibility is to say it’s not unconstitutional to impose such mandates, but maybe we do want to maintain a different space for religious entities. One other example is Rumsfeld v. FAIR. Rumsfeld v. FAIR involved -- I think this is why it’s such an important addition to Pruneyard. It involved entities that are all in the speech business: universities. It involved universities, many of which were bitterly opposed to the speech they were required to host. They were required to host military recruiters, and they were opposed to military recruiting because at the time it was discriminatory based on sexual orientation.

 

They were getting huge push back from their students -- from many of their students, at least the activist students, demanding that they expel the recruiters. They were finding themselves having to respond in some situations and say, well, now that you’re making us talk about this and you’re making us host them, let’s explain what our position is and such. And yet, the Court unanimously said that it’s permissible to impose that burden.

 

This having been said, Solomon Amendment is another example. It actually had an exception for religious universities, although specifically focused on religious pacifist universities that might object to military recruiters because it’s the military rather than because of don’t ask, don’t tell. So again, occasionally when Congress or state legislatures enact this, they recognized that religious entities ought to be treated differently, ought to be given an extra sphere of latitude. I’m not sure it’s constitutionally compelled to do so, though.

 

Hon. Barbara Lagoa:  Let’s do the last two speakers -- the last two audience members. In the back first.

 

Alden Abbott:  Yes, thank you. Alden Abbott, McLean, Virginia. Last July, White House Press Secretary Jen Psaki stated regarding the potential de-platforming of certain stated views on COVID “We’re flagging problematic posts for Facebook that spread disinformation. We’re working with doctors and medical experts who are popular with their audience with accurate information. So we’re helping get trusted content out there.” Does that involve sufficient government entanglement and coercion on a platform to suggest state action?

 

Hon. Barbara Lagoa: Who would like to address that?

 

Prof. Adam Candeub:  Well, I don’t want to in anyway disagree with Eugene. It’s not a good position to be in, but I think the law is a little bit less clear that there is a room for sort of parallel action and collusion with a wink. You know, when Henry II asked his barons “Will anyone rid me of this troublesome priest?” and they -- hypothetically of course, and they marched down to Canterbury and killed Thomas Becket, was that state action? I would say yes.

 

Under current president, I’m not so sure, but I think the courts could move in that direction, especially given we all know what’s going on. Is there a clear threat? Is Jen Psaki saying I’m going to come over and beat Zuckerberg up if he doesn’t do this? Well, maybe she is. I don’t know.

 

Prof. Randy E. Barnett:  I think she could take him.

 

Prof. Adam Candeub:  Right. But the test may require a more clear quid pro quo.

 

Hon. Barbara Lagoa:  Jane or Eugene, you want to address it? Jane, you do?

 

Prof. Jane Bambauer:  Yeah. I’m in surprising agreement with Adam on this one. This is a surface where I think we should be taking a hard look. Well, I’ll just leave it at that.

 

Hon. Barbara Lagoa:  Okay. And then the last question from the audience.

 

Diana Furchtgott-Roth:  Hi, I’m Diana Furchtgott-Roth from George Washington University. I just have a quick follow up on the question before about Section 230 and blocking content. Nowhere it says that under Section 230 that these companies are allowed to block speakers, only offensive content. Can you all comment on why these platforms were allowed to block President Trump? Thank you.

 

Hon. Barbara Lagoa:  Adam, you want to take it?

 

Prof. Adam Candeub:  Yeah. I just don’t think the courts have been that sensitive to that textual difference. I mean, they’ve largely elided speakers and content as I read the cases.

 

Prof. Eugene Volokh:  Well, I think that’s part of it, but also there’s no underlying cause of action that would keep Twitter from removing Trump’s account. If there were a statute that said, you can’t discriminate against speakers based on the content of their speech or the content of their past speech or whatever else, then there’d be a question of whether it’s pre-empted by 230(c)(2). But I know of no public accommodation law, for example, that had been interpreted as applying to social media platforms as opposed to, say, brick and mortar outfits and the like. 230(c)(2), it’s very important how it’s going to be interpreted.

 

But the very first question is is there something that the defendants are doing that is said to be tortious or said to be violation of some statute? And I just don’t think that under current law removing someone from a platform, saying you can’t use our property anymore, is illegal. Maybe it should be. I just don’t think it is.

 

Hon. Barbara Lagoa:  Right. And that’s why Justice Thomas’ concurrence is so interesting to read because he does go through the history of public accommodation and common carriers. And maybe we should be thinking about this in a different way because these companies are very, very different from previous companies that we’ve had who have all this access to information. And they’re the ones that wield the power in terms of that access.

 

I want to thank the panelists. Thank you and thank you to the audience members. I would be remiss if I did not say that Professor Randy Barnett will be signing his book, The Original Meaning of the Fourteenth Amendment, in the mezzanine starting now.

 

Prof. Randy E. Barnett:  And I’m going to be running off right away to get there.

 

Hon. Barbara Lagoa: So I hope that you will go there and get a booked signed.

 

11:30 a.m. - 1:45 p.m.
Friday General Luncheon

2021 National Lawyers Convention

Cabinet Room, Chinese Room, East Room, State Room, and second floor lunch rooms
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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11:30 a.m. - 1:45 p.m.
Classrooms, Curricula, and the Law

2021 National Lawyers Convention

Topics: Civil Rights • Culture • Education Policy
State Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". This panel explored "Classrooms, Curricula, and the Law."

Competing legal and cultural interests are at play in the push to implement critical race theory and diversity, equity, and inclusion-based curricula at all levels from elementary school through higher education. Some argue that state bans are necessary to combat a divisive, stigmatizing, and arguably unlawful set of educational practices. Others take a libertarian approach, casting classrooms as marketplaces of ideas and criticizing proponents of CRT-bans as opponents of free speech. Still others praise these educational practices for raising greater awareness of American’s historical injustices, arguing that this is a necessary step towards a more equitable and inclusive society. In the tradition of the First Amendment, this convergence of issues leaves much room for a lively debate.

Featuring:

  • Prof. Akhil Reed Amar, Sterling Professor of Law, Yale Law School
  • Mr. Josh Hammer, Opinion Editor, Newsweek; Research Fellow, Edmund Burke Foundation
  • Ms. Kimberly Hermann, General Counsel, Southeastern Legal Foundation
  • Ms. Letitia Todd Kim, Managing Director, Foundation Against Intolerance & Racism
  • Mr. Greg Lukianoff, President and CEO, Foundation for Individual Rights in Education
  • Moderator: Hon. Kyle Duncan, U.S. Court of Appeals, Fifth Circuit

Speakers

Event Transcript

Kenneth Marcus:  Hello, everyone. Welcome to The Civil Rights Practice Groups Panel. I’m Kenneth Marcus. I chaired the Executive Committee of this practice group, and on behalf of the committee, I want to welcome you. Whether you have been here before or not, by virtue of being here today, you are all now members of the Civil Rights Practice Group and disqualified for confirmation to any position that you might otherwise have been appointed to.

 

      This is, I might point out, a blessing in disguise. Believe me. For those of you who’ve been here before, we do offer annual panels of this sort, as well as webinars, on a fairly regular basis on civil rights issues. As members of the Civil Rights Practice Group, I would say this, if you simply come to these events, that’s great, but we would hope that you might consider being more actively engaged in the work of the Civil Rights Practice Group over the course of the year, although we are somewhat baffled about how we will keep you busy if you all choose to do so. I would say that there are opportunities for our blog, for the various publications of The Federalist Society, and in helping the Executive Committee to come up with ideas for future events. So for all of you, we welcome you not only to this event and to the practice group, but we suggest that if you are interested in getting more involved, you speak with me or anyone in The Federalist Society staff.

 

      I’ve been asked to say the following: for the attendees seeking CLE credit, you are required to sign in each day to receive credit. If you have not already done so, use the QR code on the CLE card provided. If you don’t have that card, there are volunteers with extra cards in the room. The QR code is also posted outside the room and on the easel. Be advised, some states require signing out as well.

 

      Now I’ve also been asked to do something else. Apparently, there was some discussion at The Federalist Society about what kind of fool would wade into this group of freedom-loving conservatives and libertarians and tell them they need to wear a mask. And apparently, the decision was made that any such person might also be willing to be the chairman of the practice group.

 

[Laughter]

 

Well played, Federalist Society, well played. And I would point out that the lunch and coffee stations, while always enjoyable, are now also a legal loophole.

 

[Laughter]

 

      I have not been charged with the responsibility to introduce the panel, and probably for good reason. If I were to introduce the panel, I might say something inappropriate like the following: this panel features a prior president, the founding president, of the University of Chicago Chapter of the Louis D. Brandeis Center for Human Rights, Josh Hammer, and other people who I’m sure have done interesting things as well.

 

[Laughter]

 

      It is to avoid that embarrassment to The Federalist Society that I have been asked not to introduce the panel and, instead, we have gotten a proper moderator, Judge Kyle Duncan. Judge Duncan was appointed to the United States Court of Appeals for Fifth Circuit on May 1, 2018, by President Donald Trump. Previously, Judge Duncan was the founding partner of Schaerr Duncan, LLP, General Counsel at the Becket Fund for Religious Liberty, and he taught at the University of Mississippi School of Law. This honorable court is now in session, Your Honor.

 

Hon. Kyle Duncan:  Thank you, Ken. Wonderful to be here with all of you and to moderate this august panel. Let me give you a quick rundown of the general subject matter we’re going to talk about. I’ll introduce the panel members and then turn it over to them.

 

      Competing legal and cultural interests are at play in the push to implement critical race theory and diversity, equity, and inclusion-based curricula at all levels, from elementary school through higher education. Some argue that state bans are necessary to combat a divisive, stigmatizing, and arguably, unlawful set of educational practices. Others take a libertarian approach, casting classrooms as marketplaces of ideas and criticizing proponents of CRT bans as opponents of free speech. Still, others praise these educational practices for raising greater awareness of America’s historical injustices, arguing that this is a necessary step towards a more equitable and inclusive society.

 

And I have to add that this is, obviously, a timely topic. When we were planning this panel, the Virginia elections had not happened, and some think that issues of this nature were important in that election. Others I’ve seen have suggested that issues like this are phony issues, and even the existence of CRT-based curricula are being debated. So I think this is a very timely topic, and I know our panelists will have lots to say about them and about how the First Amendment rights of teachers and students interact on these issues.

 

      So let me introduce the panel which is well equipped to discuss these issues. First, to my immediate left, Josh Hammer is an opinion editor of Newsweek, a research fellow with the Edmund Burke Foundation, counsel and policy advisor for the Internet Accountability Project, a syndicated columnist through Creators, and a contributing editor for Anchoring Truths. Josh is a constitutional attorney by training and the co-host of two podcasts: Newsweek’s “The Debate” and the Edmund Burke Foundation’s “NatCon Squad,” and I first got to know Josh when he clerked for my colleague, Jim Ho, on the Fifth Circuit.

 

      Next, Letitia Todd Kim is the managing director of the Legal Network at the Foundation Against Intolerance and Racism, a non-profit civil rights organization which advocates for the rights of parents, students, and employees by creating model legislation and litigating under Title VI, Title VII, the Equal Protection Clause, and the First Amendment. Letitia was formerly an Assistant United States Attorney in the Civil Division of the Northern District of California, and previously practiced at Sonnenschein, Nath and Rosenthal, now Dentons.

 

      Next, Professor Akhil Amar is Sterling Professor of Law and Political Science at Yale University. Amar joined the Yale teaching faculty at age 26. He has been cited by Supreme Court justices across the spectrum in more than 40 cases, top in his generation, and indeed among all active scholars. He is Yale’s only currently active professor to have won the university’s unofficial triple crown, the Sterling Chair for Scholarship, the DeVane Medal for Teaching, and Lamar Award for Alumni Service. I’ve read many of Professor Amar’s books, and they’re always illuminating and enlightening to me.

 

      Next, Kimberly Hermann serves as General Counsel for Southeastern Legal Foundation, is an active member of The Federalist Society, where she serves as an expert on The Federalist Society’s Regulatory Transparency Project State and Local Working Group.

 

      And finally, Greg Lukianoff is the president and CEO of the Foundation for Individual Rights in Education or FIRE. He is a widely published author. Most recently, he co-authored The Coddling of The American Mind: How Good Intentions and Bad Ideas Are Setting Up a Generation for Failure, with Jonathan Haidt, and I can personally recommend that book to you. I’ve been reading it as I contemplate sending my 17-year-old off to college. And after having read only two-thirds of the book, I’ve decided that he’s not going to college.

 

[Laughter]

 

      He’s going to be a farmer.

 

[Laughter]

 

Greg is also an Executive Producer of Mighty IRA, a civil liberties story, a recent feature-length film about the career of former ACLU Executive Director Ira Glasser. And having said all that, I look forward to our panel’s discussion of this timely and important topic, and I hand it over to Josh.

 

Josh Hammer:  Okay. Well, thank you so much, Judge Duncan. Thank you to The Federalist Society for having me here. I think there’s a perception out there that I can be a little critical of the conservative establishment, in general––by some token, perhaps, this organization at times as well––but let the record reflect that I turned down being on Dave Rubin’s show at this very hour to be here with you all right now; love this organization. I’m a card-carrying member and just delighted. It’s my first time being on a panel here at NLC, so very, very happy to be here.

 

      It’s particularly cool to be on a panel with Judge Duncan who, as he just said, I got to know when he became a Fifth Circuit judge. And, to this day, actually, the number one piece of writing -- and I have a pretty voluminous public written record at this point -- the number one piece of writing, to this day, that I get most pushback on was a National Review piece that I wrote entitled, “The Fifth Circuit Rejects the Lie of Transgender Pronouns.” That was a piece from January 2020. I was protested at Northwestern Law School into giving a FedSoc talk there last month, in part, due to this article. The author of the underlying opinion, of course, was the esteemed gentlemen sitting to my right.

 

Hon. Kyle Duncan:  Thanks for bringing that up, Josh.

 

[Laughter]

 

Josh Hammer:  I do not apologize for any words in that article. It was 100 percent true, and it was an admirable thing to put into the F. 3d.Hon. Kyle Duncan:  You and three out of five of my children are the only people in America who like that opinion.

 

[Laughter]

 

Josh Hammer:  Well, hopefully, that counts for something.

 

Questioner 1:  Three-fifths is a compromise.

 

[Laughter]

 

Josh Hammer: All right. So getting on to the actual topic of the day here, we’re talking about critical race theory, the First Amendment, what do we do about this, what do we not do about this? So look, my basic take on this is not very difficult. Okay? And my take on this can probably be, I guess, encapsulated by the fact that last Tuesday, when the aforementioned Virginia gubernatorial results started to trickle in, I was celebrating at the bar, getting drinks with Chris Rufo. We were down together at the National Conservative Conference in Orlando. Chris is a buddy of mine. He’s done yeoman’s work on this issue, obviously, across the country, as have many others, by the way.

 

A lot of people who are also doing great work on this—my pal Max Eden at America Enterprise Institute—don’t get quite the credit that Chris gets, but there’s a whole network of activists, now, across the country who are shining a spotlight on the just horrific racialist, abhorrent, indoctrination of our children into hating themselves and hating their nation. But Chris really has done amazing work on this.

 

So look, the arguments against bans on critical race theory amount to – really, they can fall into one of two buckets. The first is that you can––to borrow from a law school of jargon––you can fight the hypo. Okay? You can say, “Critical race theory doesn’t exist.” To quote Hillary Clinton, “It’s the vast right-wing conspiracy. It’s a figment of their imagination.” Total and complete garbage. And again, like Chris, if no one else, has singlehandedly demonstrated how garbage this talking point is. Literally, just go and read his articles. Okay? For the past two years now, his byline at City Journal––that’s a journal of the Manhattan Institute––is absolutely prolific on this, whether it’s boardroom to boardroom; AT&T, Google, CBS, basically, almost every single fortune 500 company it seems; school district to school district, whether it’s Seattle, San Diego, Buffalo, and New York, even small towns across the American heartland.

 

This crap––and it is crap, it is anti-American crap––is proliferating all over. And the argument that critical race theory is not real, it’s a fundamentally unserious argument. We can quibble as to what we mean, exactly, by critical race theory, of course, and I guess we can probably get into that in Q and A, I suppose, if we want to, here. I’m not going to spend too much time trying to properly define it, but it’s -- broadly speaking, it is the idea that America was founded as a systemically racist country, that generations of white people carry on guilt from generation to generation, that they have to atone and expiate for the sins of the forefathers, and all of that, and that white people, to this day, have to apologize for being white. And not just white people, by the way. Okay? At Newsweek, where I run the op-ed page, this wonderful Chinese immigrant—my friend Helen Raleigh, who lives in Denver, Colorado -- Helen talks all the time about how critical race theory is not just anti-white, it’s anti-Asian.

 

Critical race theory is just one way of understanding the left’s intersectional hierarchy of victimhood, of course, where, obviously, heterosexual, white, Christian males are at the very top. Those are your king oppressors these days, but there’s all sorts of other people there as well. My people, the Jews, have, for some reason, ended up in the oppressor class. It baffles me how you could possibly read Jewish history and come to this conclusion.

 

So let’s just stipulate, for now, that critical race theory does exist. So let’s go move on to the second argument here. The second argument here is that this is a “free speech issue.” To make this argument, you have to -- in my particular remarks here, I’m going to stick to the K-12 classroom setting. To make this argument, you have to fundamentally believe that the public-school classroom is a Voltaire, classical liberal, enlightenment liberal, marketplace of ideas. You can tell by the mocking, sardonic tone that I’m saying this -- this doesn’t pass the laugh test.

 

Public school education is a government-run monopoly. Okay? My mother is a third-grade public school teacher. My grandmother, actually, was a special-ed teacher. My great-grandmother, who I never met, was also a special-ed teacher. I come from a long pedigree of public-school teachers. Their classrooms are not a marketplace of ideas. I have literally seen the communication between my mother and her school district and, by extension, the union and the education bureaucracy. She does not, actually, have a whole lot of say in what she’s teaching there.

 

She had some unit, during the George Floyd 1619 riots, that New York––she’s in New York State––that they compelled her to teach on “social justice poetry.” I asked her if I could take a look––put on my editor’s hat for a second there, and I made many editorial suggestions. The point is, I’m not entirely sure how much leeway she had to implement those suggestions because, again, this is, fundamentally, not a marketplace of ideas.

 

The traditional understanding of education that conservatives have, I think, long intuited––and it should be, I would argue, quite obvious to us––that states have near plenary power to dictate the contents of state-level curricula. This seems to me so obvious, to go without saying here, that people that are saying that bans – so look, to take one example here, I’m just going to read, real briefly, off of an op-ed that my friend, Max Eden, from AEI wrote for me. Some of the model language of these state-level CRT bans basically say along the lines of the following: they ban teaching students that “one race or sex is inherently superior to another race or sex,” or “that an individual, by virtue of the individual’s race or sex, is inherently privileged, racist, sexist, or oppressive, whether consciously or subconsciously.” So holding aside the fact that these statutes, when they are properly written, are written in overtly and expressly into liberally race-neutral language here, we would immediately and intuitively understand that does not pose any particular First Amendment barrier.

 

If we were to just reverse the nature of the races here, if everything that was going on across the country was a throwback to the horrors of the Jim Crow era––to, obviously, say nothing of the antebellum era––and it was anti-black racism that was getting thrown down our innocent children’s throats in K-12 teachers, we wouldn’t be having this debate. We are literally only having this debate because what the left considers the intersectional oppressors have been told to bow at the knees of the people who are trying to tell us that we have to atone for our whiteness, our Jewishness, our Asian-ness, whatever, and this would just be so obvious if the races were reversed here.

 

I mean, the people who say that you have a free-speech right to say that if you are white, you are inherently an oppressor and have to apologize for the sins of your great-great-great-great-great-grandfather, that’s the same argument, basically, that’s saying you have a free-speech right to deny the holocaust. Okay? And that’s kind of like the First Amendment’s absolutist free speech to say-anything right of a public-school teacher taken to its logical conclusion. And we should, obviously, recognize that to be nonsense. In fact, these same people are deeply hypocritical to boot because the same people that are telling us, obviously, that bans on critical race theory pose some sort of First Amendment problem are the exact same people, obviously, that want to ban teaching creation, teaching the Bible, anything like that, at our schools in the first place. Well, you can’t have it both ways, guys. You really got to pick one here.

 

I read some model language there. We can talk a little bit more about that. The point here, and the broader conceptual point -- and I can maybe just wind up my brief, introductory remarks at that. The point here is that the enemy, right now––and I do call it the enemy—in the year 2021 is, broadly speaking, the woke ideology. Ronald Reagan famously said the nine most terrifying words in the English language are, “I’m from the government, and I’m here to help.” Those are no longer, necessarily, the nine most terrifying words. They can be. But what’s happening here is a broader, ruling-class-inspired woke ideology that is seeping across all sorts of institutions across this country, whether it’s the government, whether it’s the deep state, whether it’s the fortune 500 corporate boardroom, whether its public-school education bureaucracies or things of that nature.

 

And the imperative of the hour demands that we not make appeals to purely values-neutral procedural, platonic ideals like free speech for all, marketplace of ideas. It necessarily demands that we sober up to the gravity of the lateness of the hour and prudentially, actually wield, in state legislative chambers, some degree of power to punish our enemies within the confines of the rule of law. And I submit to you that our enemies in this context are the Ibram X. Kendi woke ideology extremists who are trying to poison and rotten the minds of our children into hating themselves and hating their country, to boot.

 

So I’ll end my introductory remarks on that, but I’m sure we’ll pick up a various train of topic.

 

Hon. Kyle Duncan:  Thank you, Josh. I remember that tone from some of the bench memos that got circulated when you were clerking.

 

[Laughter]

 

It was always clear who they were from. Now, let me turn it over to, let’s see, sorry, Kim.

 

Letitia Todd Kim:  No.

 

Hon. Kyle Duncan:  Is that okay, or do you want to go next?

 

Letitia Todd Kim:  Oh.

 

Hon. Kyle Duncan:  I think we’re not sitting quite in the right order but let’s…

 

Kimberly Hermann:  I think it was you.

 

Letitia Todd Kim:  Yeah. I think it’s -- yeah.

 

Hon. Kyle Duncan:  Is it you?

 

Letitia Todd Kim:  By last -- yeah.

 

[CROSSTALK]

 

Hon. Kyle Duncan:  My notes --

 

Letitia Todd Kim:  There’s some confusion here. Yeah.

 

Hon. Kyle Duncan:  -- my notes are wrong. Letitia, take it away.

 

Letitia Todd Kim:  Yeah. Despite my surname, I am not Korean. I am married to one, however. So people are very confused when I show up, and they say, “Oh, you’re not Korean.” I know that.

 

[Laughter]

 

Letitia Todd Kim:  In any event, thank you so much for that, Josh. I have a little bit of a different perspective on the anti-CRT legislation. I do broadly agree with Josh that the schools are not -- public schools, at least, are not a marketplace of ideas. In fact, they are traditionally a place for the local community to pass down knowledge, tradition, and values that the community deems important.

 

Teachers really don’t have that many free-speech rights in public schools, particularly with respect to their official job duties. They cannot just teach whatever they want and say whatever they want. Even students’ First Amendment rights are not unlimited in public schools. However, I do think there is an argument to be made that by banning critical race theory from being taught or discussed in the schools, and there are -- the laws in about nine or ten of them have been enacted in various states. They each differ from each other—some of them ban the teaching of critical race theory concepts, some of them ban inculcating the concepts into the students, and others ban compelling the students to affirm or adopt those concepts.

 

But I think whichever way you go, there’s a possible argument from the other side, let’s call it, that by singling out a particular belief and protecting certain students from exposure to that belief, and not other students from exposures to beliefs that they find offensive, that could potentially constitute a type of viewpoint discrimination under the First Amendment. And again, that’s a potential argument. I’m not saying it would win the day, but it’s just something to look out for.

 

      My particular area on this panel is to speak about critical race theory concepts––which I often refer to as critical social justice––in private K-12s. So private K-12s are very -- they have very different incentives, structures, and, of course, applicable laws than public K-12s, so they must be approached very differently. And private schools also have very different sensitivities than public schools, as you can imagine. But they are, make no mistake, in many cases, teaching a very aggressive form of critical social justice, and one has to ask, “Well, why? Why are they doing this?”

 

I think one of the reasons is that some or many, perhaps, of the private schools, it’s very important for them to have the best placement records possible for their students because when a parent is deciding on a private school, they often look at that: where do you place your students? And a lot of the more elite universities are specifically looking for schools—for high schools—to teach these types of concepts.

 

And many of you in this room may have heard of the reports of one of the -- a head of school of a very tony private school on the East Coast who was looking at the placement records of the school that she headed and realized that one very prestigious Ivy League university had not admitted any students from her school in several years. So she trucked on over to that prestigious Ivy League institution and asked, “What gives?” They said, “Well, you’re not sufficiently establishing a commitment to equity and justice [audio cut 44:54].” And they may also be separating the students into groups based on skin color and ancestry.

 

This client may also notice that these groups are not necessarily being treated the same way, although that probably shouldn’t matter. Some of them get to go to lunch early, some of them get ice cream first. They’re not even being -- discussing the same topics. So one group might talk about their pride in their ancestry and heritage, and another group may very well talk about what they need to do to compensate for their skin color. Unfortunately, in the private school context, as you can imagine, the legal remedies in that situation are very, very limited. By and large, the relationship is governed by the enrollment contract, which, if there are any private K-12 parents here, you probably know that the enrollment contract imposes virtually no obligations on the private school other than to enroll your child. So that really won’t get you very far.

 

Some courts have held that the student handbook is a contract, and that typically contains some type of anti-discrimination promise on behalf of the school. However, ultimately, the issue comes down to damages. What are you going to get? And as every person here remembers from law school, specific performance is an extraordinary remedy that probably will not be granted, and that is what most parents want. They want the school to perform under the contract, be it the enrollment contract or the student handbook contract, and stop discriminating and stop separating students into skin color swatch groups. But you probably are not going to get that under a breach of contract cause of action against a private school. That’s just the reality of the situation.

 

And I think parents in private schools have to be aware that the enrollment contract may sometimes impose obligations on them, and one of those obligations is often that if they openly voice disagreement with the school’s objectives in a way that embarrasses the school, then the school can, in fact, expel their child. And we’ve seen that happen in more than one case. So parents do have to be careful, and I think that’s why we see a lot of schools very upset by what they call parent factions. And when they say, “factions,” they don’t necessarily mean people going on Tucker. They mean parents who are banding together and making it known publicly within the community that they’re not happy with where the school is going. So those are the limitations on a contract claim.

 

There are other related legal remedies that are available; maybe a breach of the implied covenant of good faith, if you’re in a state that applies that to enrollment contracts; a potential misrepresentation claim that probably isn’t going to get you far. Obviously, Title VI of the Civil Rights Act, which prohibits discrimination in any publicly -- federally funded program, prohibits discrimination based on race and skin color. That, by and large, does not apply to private K-12s because almost none of them receive federal funding. And even if they do receive federal funding, Title VI requires there to be a nexus between the alleged discrimination and the federal funding. So, for example, if a private K-12 were to receive federal funding for a lunch program, you would be able to proceed on a Title VI claim only for discrimination in the lunch program.

 

Some states do have anti-discrimination laws that specifically apply to private K-12s, but very few, and they’re somewhat limited. New York human rights law prohibits harassment in private schools. It’s an open question as to whether some of these practices would be deemed harassment. Interestingly, and this is perhaps the most salient point I’m going to make, the State of California has a law, and it’s the only state in the country, I believe, that has one. But that statute gives high school students in both private and public high schools, essentially, the same free speech rights they would have if they were speaking in the public square.

 

And why is this relevant? It’s relevant because a lot of schools are instituting or announcing they are going to institute micro-aggressions policies. And everybody in this room knows what a microaggression is, or you know of an example of one. But it’s basically an anodyne statement that is almost certainly protected speech but which somebody perceives as offending them based on an immutable trait. So a statement that “Meritocracy is the best system,” or “They pulled themselves up by their bootstraps,” or “Where are you from?” those are all deemed microaggressions, literally. And I’m, obviously, not from Korea, but it would be a microaggression, nonetheless.

 

So, in any event, this California statute -- and again, it’s the only one in the country––unfortunately or fortunately, depending on who you are––that applies in this context. And moreover, it applies as soon as the policy is instituted, so you don’t have to wait, necessarily, for it to be enforced. You can bring a claim upon adoption of the policy. I think, ultimately, though, my personal hope with respect to private schools is that there’s going to be some type of a spillover effect.

 

And there is a lawsuit pending—and I think there may be a few—but there’s one lawsuit, in particular, that’s pending in Nevada––in district court in Nevada––Clark v. Democracy Prep, and it’s challenging a curriculum very much like what Josh discussed on various grounds, including equal protection and Title VI. And I think if there is a judgment of some kind that, yes, what this school did is, in fact, a violation of one’s civil rights -- if that’s the case, it might encourage private schools to think twice about what they’re doing because does a private school really want to be teaching students and doing things that would be unlawful and a violation of one’s civil rights if only it was done by a public school? That’s a question they will have to answer, hopefully. So with that, I wanted to pass it onto the professor, and he’s going to discuss these concepts as they exist in higher education.

 

Hon. Kyle Duncan:  Thanks, Letitia.

 

Prof: Akhil Reed Amar:  Josh Hammer described himself as a card-carrying member of The Federalist Society. I’m not a member of The Federalist Society. I have never been a member of The Federalist Society. I probably won’t ever be a member of The Federalist Society because I’m, truthfully, just not much of a joiner.

 

[Laughter]

 

      But I’m always so very honored to be invited to do events with my friends at The Federalist Society -- and you are my friends. I’m going to come back to this point at the end of my remarks, but when I’m on the road, I often just bring some of my comfort clothes, and here’s one of my favorite t-shirts. It’s about Yale Law School Federalist Society. I’m going to come back to this because there’s a lesson here, actually, that connects to our topic. Now I am, actually, a member of the Democratic Party. I’m not sure if I’m a card-carrying member. I’m not sure I ever got a card. I’m not an affiliate of the socialist wing of the party.

 

I quite believe in free markets, and I’m going to tell you something about free markets, really dramatic fact, and then shift to private education, which is one component of free markets. You’ve heard a bit about government schools. I want to talk more about non-governmental schools—private schools.

 

I love free markets. They create a certain dynamism. Here is an extraordinary fact about the openness of the American economy, in general. You take, maybe, the five most successful companies today—Amazon, Apple, Facebook, Google, Microsoft—they didn’t even exist half-century ago. And the ones that were behemoths a century ago don’t exist today. That’s the dynamism of the American economy, in general.

 

But now let’s contrast it to education, which is a very unusual sphere of the nine -- in education, older is better. It’s like money in Britain, or something—old money being far superior, obviously, to new money in an aristocratic society. So of the nine colleges that existed at the time of the founding, seven of them are still seven of the top 14 schools as rated by U.S. News & World Report. So very dynamic economy, generally lots of churn, no movement whatsoever almost in education, but I told you seven of the nine. The other interesting fact is that the seven of the nine that have done the best are the seven private schools. They’re the seven oldest Ivy’s, all except Cornell, which is a newer place. And the two old schools that were public schools––or are public schools now––have really been outperformed by their private competitors, William and Mary and Rutgers, formerly King’s College -- excuse me, Queen’s College.

 

So the private educational sphere is really important in America, in the world. People come from all around the world to come to our schools, and many of America’s greatest universities, as I just told you, are private universities. Again, U.S. News & World Report is not the be-all and end-all, but I think all 20 of its top 20 schools are, actually, private universities, liberal arts universities. So this is an important sector. I happen to teach in one of those places. And law and the Constitution aren’t going to be the answer to all the problems there because they’re not governed, to the same extent, by the First Amendment, these institutions. But we are governed by our own standards, our own ambitions, and goals.

 

My school says that the most fundamental mission is not even the social justice mission, which I do believe in. It’s an important one. But that’s not our defining mission at the university; it’s lux et veritas—light and truth. Our job is to actually discover and disseminate knowledge to the world. That’s the mission, and my claim is that a certain kind of diversity can be helpful in that project, but it’s actually ideological diversity that’s at least as important as mere demographic diversity. People of different points of view can sharpen each other and produce and disseminate more light and truth.

 

And I’m not arguing for a lower standard for people who think differently than I do or that the majority does. I’m arguing that we need to recognize our implicit bias, that it’s natural to think, “Oh, I’m a smart fellow, so people who agree with me, they must be smart people. And the people who disagree with me, they must be the not smart people, and so I’m supposed to only hire the smart people.” And that can take ethnic forms, a certain kind of clannishness, but it can also be true -- that’s an argument for a certain kind of demographic diversity commitment, but it’s also true, of course, of ideological diversity. And I think we have to take affirmative steps to try to counteract implicit bias and try to look out there for the smartest folks out there who think differently from how we do.

 

And this is why I am so very proud, every year, to co-teach with my friend, Steve Calabresi, co-founder and co-chairman of The Federalist Society. He thinks differently than I do politically. We vote differently on Election Day, I suspect, but we benefit from the other. I think our students benefit by hearing, actually, the exchange of views between people who actually have some ideological diversity between them.

 

So, yes, I’m going there. I’m talking about Yale and the recent unpleasantness and, as you know, unless you’ve been on a desert island, Yale Law School has not treated The Federalist Society or its members fairly and has yet to apologize for this and make amends for it. So my own view, on the basis of all sorts of information, some public, some yet to be made public, is that the law school is not living up to our highest commitments. Administration has been dilatory, duplicitous, disingenuous, downright deplorable. So there you have it.

 

So what’s the solution? I would urge the administration to stand up for The Federalist Society and its members. And to repeat, I am not a member of The Federalist Society, never have been, probably never will be. If you look on my faculty webpage, which I composed––and it’s very self-serving––the second sentence, I actually mentioned that I’ve received an award from this society. I’m proud of my friendship with this society, but I am not a member. But I think the administration has to stand up for The Federalist Society and its members and needs to take immediate steps to diversify the faculty ideologically, which brings me back to the t-shirt.

 

I’m a little bit over, but if you give me one more minute, I hope I can connect the dots --

 

 

Hon. Kyle Duncan:  Take your time.

 

Prof: Akhil Reed Amar:  -- because although Yale Law School isn’t living up to its highest standards now, I want you to understand, actually, where this very organization began and where the roots of its best traditions lie. So, when I’m -- and they are at Yale, at a great private university. I’m an undergraduate at Yale. I’m a chair of the liberal party of the Political Union, and I want to be president of the Yale Political Union because that’s what all of the chairs of the local party wanted to be. But there was this other fellow, and he wanted to be president of the Yale Political Union, and he actually had a better idea for the union. His name is Steve Calabresi.

 

So we were rivals, and I underestimated him. This is the problem with implicit bias, you see.

 

[Laughter]

 

And here was his better idea. And he became president of the Yale Political Union. His idea was let’s get not one speaker to come talk to the students, let’s get two on the same topic who disagree with each other, and they can have a debate, and then the students can jump in -- inspired by Bill Buckley’s Firing Line. And Buckley, himself, was a Yaley, you will all remember. Let’s get Bill Buckley to debate George McGovern on the Vietnam War, and the students can jump in. That’s Steve Calabresi’s brainchild, the Yale Political Union, along with people here, like, Lee Liberman Otis. And that idea -- which is really a brilliant idea to actually have different perspectives and debate and ideological diversity. My college roommate is, I think, still here, Paul Johnson. He watched all this going on. He always voted for Reagan. I never did. But we learned from each other, you see.

 

So that’s Steve’s idea, in part, and that becomes, actually, The Federalist Society. When Steve and Lee Liberman Otis and Dave McIntosh and others, Peter Keisler, all Yaleys go to law school -- that’s where The Federalist Society is born; different people who disagree with each other, talking to each other. And I went to all their meetings because -- and I was not a member, but I liked listening to them and talking with them and pushing back.

 

 So I need to show you the backside of the t-shirt, you see, which was made for me. They even gave me an unofficial title, --

 

[Laughter]

 

-- “The original Devil’s Advocate.” See? So we could be friends, and we don’t have to agree on everything, but we learn from each other. That’s where The Federalist Society began. That’s why you have ideologically diverse panels today, and at every FedSoc event I have ever attended. They’re the best conversations in town.

 

And, so finally, where did Steve get all that? I think, possibly, he got from his liberal uncle, Guido Calabresi—great professor at Yale Law School, eventual dean of Yale Law School. Guido Calabresi would talk all the time with Robert Bork. They were friends. They disagreed. Steve, eventually, would clerk for Bork. So out of these ideologically diverse conversations, Guido Calabresi and Robert Bork––today, Akhil Amar and Steve Calabresi––co-teaching. That’s actually the tradition that in one form becomes The Federalist Society.

 

I don’t think it’s what we’re seeing at Yale today -- Yale Law School. So I’m, today, using this platform to call upon the Yale Law School administration to be true to the best traditions of Yale University and Yale Law School, this light and truth tradition, this ideological tradition, the tradition embodied, epitomized, championed by my very dear friends Guido Calabresi and Steve Calabresi. Thank you very much.

 

Hon. Kyle Duncan:  Thank you. Kim?

 

Kimberly Hermann:  Okay. Well, I’m going to bring us back to K-12 schools a little bit and talk some about litigation in this area, the nitty-gritty of what’s actually happening in the schools, and give you guys some examples. But I want to start out by mentioning that for almost 50 years, at Southeastern Legal Foundation, we’ve been working to rebuild the American republic. And we’ve been standing with courageous Americans to fight for individual liberty and for free speech. And never before in the history of our foundation have we seen all levels of government so blatantly disregarding the Constitution and our civil rights laws and at such a furious pace.

 

      In America, as all of you know––because that’s why you’re here today––you know that the government can’t treat people differently because of their skin color and that they can’t compel individuals to self-censor or to affirm ideas that they just simply don’t believe in. But our K-12 schools, our colleges, and our federal government are doing just that. They’re implementing race-based programming into all of our schools, and they’re codifying it into our laws in the name of equity.

 

But everyone says, “What does equity mean?” In this sense, what I’m talking about is when they’re conditioning individuals to see only skin color, they’re putting everyone into a hierarchy of racial privilege, and then they pit racial groups against each other. Then we have those at the highest level of our government, as we’ve seen in the last few weeks, coming in and trying to intimidate and silence people who don’t agree with this hateful ideology. This is totalitarian tyranny, make no mistake about it. It is not a democratic republic.

 

So let me give you a few actual examples from cases that we’re litigating and that some of our friends are litigating about how the schools are doing this. Up in Illinois, we have a school district that is mandating racial segregation. We’re not talking about voluntary affinity groups. We’re not talking about after-school programs. We’re talking about requiring whites to go into one room, non-whites to go into another room, and giving them different teacher trainings and different lessons. This is blatantly and egregiously unconstitutional, and it is morally wrong.

 

We have that same school district, along with hundreds of others in this country, celebrating Black Live’s Matter Week. It’s a week where every single subject and every lesson and every grade focuses on the ideas that whites are oppressors, blacks are victims and oppressed, and it actually teaches kids lessons on how to become social justice protestors. This is in the actual documents that we have from many school districts across the country. Some of these kids are then even asked to make and take anti-racist pledges and then pledge allegiance to a BLM flag that their teachers keep in the classroom. Okay? This is actually happening.

 

We have other schools where kids as young as four years old are required to engage and read a book called, Not My Idea: A Book About Whiteness. It’s a book where you take a journey with a young child who’s teaching her mom that white people are bad, that they hurt black people, and that they are not punished for that by the law. In the back of the book, there’s an activity page. And you guys may have seen it; it’s gone viral on Twitter. But on one page, it says whiteness is a bad deal, and on the opposing page, it has white man dressed as the devil holding up a contract. The contract binds you to whiteness, where it says that you get to mess endlessly with the lives of your friends, loved ones, neighbors, and all fellow humans of color. Some of these kids are asked or required to then sign this contract. They can’t even begin to understand the concepts that are put forth in this, let alone recognize whether or not they agree with this or not.

 

We have every single school district—and I am not overstating that—every single school district throughout this country is requiring teachers to take some sort of equity training. It could be a DEI training; it could be an anti-racism training. They’re all named different things, and they all do look differently. But in the heartland of America, we have one case where we have teachers who are required to go and pick up signs before they went to this because it was done over Zoom. So you had to pick up “agree, strongly agree, disagree, strongly disagree” signs and bring them to your Zoom training. They were then read prompts, prompts like, “Parents are oppressors of their children. All teachers should vote for socialist politicians and teach their kids that socialism is a good thing.” These are direct quotes. Another one––I’ve got them right here––was that “Showing pride in America’s history is harmful.” They were then told that if you don’t hold up the “agree” sign, you are disrespecting everyone in the room, and those that did not were publicly reprimanded.

 

Okay. This is the bad news. These are just a few examples of -- as Josh mentioned, he’s documented a lot of this. Chris Rufo has documented a lot. Max Eden has documented a lot. All the examples are out there. So this is the bad news.

 

The good news is that parents have had enough, and we saw that last week when they went to the polls in Virginia. And we’re hearing that every day when we have parents defending education, getting out all of these tips that they’re getting, and when we’re bringing cases. We are all recognizing that the people that are putting this into place in our schools are doing this to create a generation of social justice warriors. They are doing this so that we don’t have diversity of thought when they get to college. So that idea, the idea that Professor brought up, can’t even happen because the kids are only seeing things in one way.

 

The outrage over what kids are being taught, and now, the plain attempt by those in the White House and Department of Justice in trying to silence parents, many are now considering lawsuits—lawsuits like the ones that we have brought and that some of our friends have brought. I’m hoping that many of you in this room, as you hear these examples, are also inspired to bring lawsuits or to speak up or to team up with groups like us so that we can bring more of these so we can actually bring about precedential change.

 

But we do need to be strategic in our cases. We have to be strategic in how we’re selecting our cases. We need to get the documents, we need increased transparency laws, and we need to FOIA everything. We need to be strategic in the remedies that we seek and how we message these cases. If we focus on the most egregious cases where we have a full evidentiary record and can set precedent, then we can get to the cause of this, so you’re not just playing Whack-a-mole with one lesson in one class, or you’re not infringing on the free speech rights of teachers or other students, and you’re not banning ideas. That’s not what this is about. It’s about stopping things when you have a hostile learning environment that violates Title VI, or it violates the Equal Protection Clause, or you’re compelling teachers to actually agree with egregious statements like, “Socialism is a good thing,” or that parents are oppressors of their children.

 

Right now, all of us––I would assume that everyone in this room, just like Americans across the country––feel like everything in the government’s stacked against them. But we have those courageous parents, we have the brave teachers, we have Federalist Society lawyers who know that there’s a place where we can all be heard, and that place is the courtroom. And so, I would just encourage all of you to take a really close look at what’s going on in your kids’ schools, and if lawsuits need to be brought, to think about actually bringing them and using all three branches of the government so that we can get this hateful ideology out of our kids’ classroom, and actually fight for the Constitution and their future. So with that, I’ll pass it over to Greg.

 

Hon. Kyle Duncan:  Thank you.

 

Greg Lukianoff:  Thank you, everybody. And thanks for having me. I, like all lawyers, am a creature of great concision. So for my actual opinion on what’s going on with the CRT controversy on K-12 and in higher education, I wrote a very pithy little 5,000-word article with three other authors over the summer, which had the commendable attribute of being dragged by both the right and the left, depending on which week you’re talking about. One of the things that we’re very clear about, and there’s no disagreement here, is that the principles around higher ed and K-12 are just completely different. The meaningful free speech actor when it comes to K-12, are the students themselves, to a lesser extent, their parents, not so much the teachers. I do think that Garcetti v. Ceballos limited the rights of public employees to too great of a degree, but that’s neither here nor there.

 

I am somewhat critical of some of the CRT legislation in a variety of different ways. I think that it was a big mistake to have any of them deal with higher education at all. I think it got a movement against something that I think people should be very critical of, off to, very much, the wrong foot. It means that my organization, FIRE, had to oppose these laws because if you’re saying -- if you’re applying some of these laws that would be perfectly constitutional as applied to K-12, to higher education, since the law is completely different, they suddenly become very problematic. And FIRE never backs down from targeting—we never play favorites. So we’ve ended up having to oppose them.

 

      I also think that one of the problems with the existing CRT laws is they create what I call a negative curriculum. They say what you can’t teach but not so much what you can. And I do think that when you’re in a position of saying, “Not this. Not this. Not this,” it ends up getting, one, interpreted poorly. David French does make the point, my friend, that the poor wording of some of these laws is problematic. To be clear, some of them are much more defensible than others. North Carolina’s version of it, I think, is––which only focuses on compelled speech––is almost certainly constitutional.

 

But one of the things that I tried to do was to create something, sort of a riff on my book with John Heidt, The Coddling of the American Mind -- I created something called The Empowering of The American Mind, which tried to take positive principles about things like, God forbid, believing in individuality and believing that you shouldn’t be compelling people’s speech and that you should treat people without labels, but also ideas from The Coddling the American Mind like, we should teach students to avoid cognitive distortions, which I could explain in questions if people really want to hear and, what we call in The Coddling of the American Mind, the three great untruths, which are -- one of the points that we make in the book is it’s as if we’re teaching a generation three terrible ideas, one of which is, what doesn’t kill you makes you weaker, always trust your feelings, and life is a battle between good people and evil people. And we point out that this doesn’t agree with ancient wisdom traditions or modern psychology.

 

So we tried to offer a positive vision in [The Empowering of the American Mind]. I think I have the final version of it, and we’re going to be cooperating with parents to see if we can actually ask principles like, “Can you sign onto these principles that all Americans should agree on, or can’t you?” And if they refuse to, then we seriously have to ask why.

 

      Now, you may be surprised that we’re doing anything at all on this because people who know FIRE know that we focus on higher education. Well, unfortunately -- and one of the things that I realized from writing [The Coddling of the American Mind], is that -- and there’s actually an article in the Atlantic about this today -- is students were showing up on campus by 2013-2014 already believing in a lot of this ideology. So it’s clear it wasn’t necessarily coming from higher education, although, to a degree, it was because it was coming through ed schools indirectly into K-12 education, and it was very clear that they were showing up already believing these things.

 

And one thing that I think we did get wrong in Coddling is we underestimated the role of ed schools. I also believe that a lot of these ideas got a real advantage by poorly thought-out legislation in 2010, which was in response to some of these claims of cyberbullying that allowed for the introduction of highly ideological anti-bullying programs to be introduced in K-12, an exception that led to a lot of the kind of programming that Kimberly’s talking about. So I think we’ve made mistakes with overregulating in the past.

 

So I’m going to shift over, quickly, to higher education. And one of the things that I really want to stress, and I’ve been doing this for 20 years as of October. I’ve been at FIRE for 20 years, and it’s unfortunate that I’ve had to say this almost every year for several years now, but I can say it this way; last year was the worst year I’d ever seen. It was terrifying. And we now have a scholar database where we try to go on and figure out what’s going on on-campus, where we try to find out, for lack of a better word, how many attempts by, usually, students there was to cancel professors. And we found 120 examples of this just in 2020, and that’s a big increase from what we saw in 2015. Now, to put that in perspective, I think there was 18 attempts at Stanford, my alma mater. There was nine or ten, I think, for Harvard and Yale, somewhere around there. The numbers get brought down for the top 10 schools, in part, because of MIT and Caltech, but as you might have seen, MIT is trying to catch up with its peers.

 

So things are bad. I’m extremely worried. 2020 was also a year where we saw just a huge increase in the number of case submissions to FIRE. One of the things we’re trying to do to contribute to this positively is to rank -- and that’s, as you can tell, that’s a theme of what we’re trying to do. What can we actually do to fix this? Lawsuits are appropriate, but as Letitia points out, lawsuits aren’t going to work against private schools, at least not most private schools. And without a culture that values individuality and values freedom of speech and conscience, and a culture that positively thinks in a group rights framework, as opposed to an individual right framework, we’re going to ultimately lose, and we’re going to lose something very precious.

 

And one of the things that we were able to see from the rankings was not just that students are telling you, very clearly, that they feel chilled in the classroom, is that they’re also saying that they increasingly approve of violence in response to speech, which was kind of a terrifying thing to see. And I do think -- I have this list of -- I like lists, and I have this list of five things every person should do. Why don’t I ask you to do this? Ask your alma maters to drop their speech codes, to stand up for faculty and students when they get in trouble, to pass a recommitment to freedom of speech on their campus. “The Chicago Statement,” for example, is a great example. The two, in some ways, more interesting thing is, teach students about freedom of inquiry and free speech when they show up the very first day in orientation. Preferably, don’t teach them that those things are bad.

 

[Laughter]

 

      You’d probably want this to be run by faculty who actually understand that and also poll. We’re able to poll, indirectly, what schools are doing through a group called, College Pulse. We’re able to get really interesting data about what students actually think, but nothing would compare to schools doing this themselves. And believe me, if they did this themselves, they would start seeing that professors are terrified, students are really scared. There is that percentage who thinks everything’s fine, but they tend to agree with everything the university believes in the first place.

 

So I have that list of five things, but in the last year, one thing that I’ve gotten even more adamant about is that when you have institutions that are as wealthy as Croesus––when they’re as powerful as Harvard and Yale, who have sitting to the side, the amount of money that’s the GDP to Lithuania and getting bigger every day––they don’t have any real incentive to change all that much. They disproportionately pick our ruling class, flat out, and they get tons of money for it, so what’s the incentive to change? And that’s why I do think in order -- you do have to accept that the Harvard and Yales and Stanfords aren’t going to go away. We have to do our best to make those schools better, but I don’t think things are going to move forward, either in K-12 or in higher education, without meaningful, large-scale experimentation in how we do all of the above.

 

I think that even Sal Khan has interesting ideas about how we could rethink K-12, but the frustrating thing, this week, in particular, is that you want to try a bunch of different approaches, particularly for higher education, but University of Austin -- hopefully, you heard about this. This is an experiment that I’ve been talking to Pano Kanelos, who is the former president of St. John’s, to start an entirely new higher educational institution with lots of really big names attached to it. And I think that that’s partially the way forward.

 

And I think employers are having major issues with the students that they’re getting from some of these very elite schools. As the authors of The Coddling of The American Mind, we’re hearing this all the time. So I do think there’s an opportunity for some really high-quality, rigorous upstarts coming out there. But I will say, it was really kind of heartbreaking to watch the reaction to the announcement of University of Austin, which was after years of people, “Oh, you don’t like it? Start your own university.” And then as soon as someone started their own university, it’s like, “Oh, not that one.”

 

[Laughter]

 

And it was one of these things where I think it’s a worthwhile experiment. I think we should try a lot more different approaches, and I think that that’s the only way you’re going to save higher education and K-12. You can’t do it just through litigation. You need experimentation in this field to save freedom of speech, both on and off campus. Anyway, thank you.

 

Hon. Kyle Duncan:  Thank you, Greg. Thank you for everyone’s comments. I think, at this point, what I want to do is give each of you the opportunity to either respond to something you heard that you may agree or disagree with, add to your comments, and we’ll go down the line again. And I apologize for getting the order wrong. You’d think the moderator could do that, but, you know.

 

      So if you all would respond, and then we can -- if any questions occur to me, I’ll ask some questions, but then we’ll open it up to questions from the audience. I’m sure they have many. Josh, you want to --

 

Josh Hammer:  Yeah. Sure

 

Hon. Kyle Duncan:   -- start off again?

 

Josh Hammer:  This is great. For sake of time, I’ll just ask, I guess, only one question. So, Professor Amar, I was deeply heartened by your very passionate condemnation of what happened at Yale Law School, which I think deserves the attention that it’s getting. I wrote in my weekly column about it a few weeks ago. It really does deserve our scorn, for lack of a better term here. I guess, beyond rhetorical condemnation, though, I would be curious what kind of actual remedial forms of punishment you might want to see happen to the administrators who are at the heart of this scandal or mini-scandal? And specifically, here’s what Princeton’s Robby George said. Robby said, “When things like this happen, there should be a formal investigation and disciplinary proceedings. If, after a full and fair hearing, administrators are found guilty of violating free speech or other academic freedom rights of students or faculty, they should be dismissed. Until this begins to happen, you can expect more of this.” So I would just be curious whether you agree with what Robby said there or if you have an alternative view of that.

 

Hon. Kyle Duncan:  Professor, feel free to respond if you like.

 

Prof: Akhil Reed Amar:  I think the first item of business is truth and reconciliation. We need to have an open, transparent identification of what actually happened. And Judge Stephanos Bibas, at the Yale breakfast this morning, talked about apology. I believe in apology. So does he. He talked about various religious and philosophical traditions. So the most important thing, I think, that I called for was an apology to those who were wronged—The Federalist Society and some of its members. That’s the most important thing. And, in the course of that, it’s not just that mistakes were made, people were wronged, some -- they were agents, actors, who did the wrong, so they should do the apologizing. And then after that, I’m not going to take a position because I -- and by the way, it’s a form of punishment of a sort to actually have to admit that you were wrong. What else should happen to them, I think, will depend a lot on the specific facts as they are adjudicated to have come out.

 

I do have my own ideas, but I also am a big believer in due process. And when we are thinking about punishing people as opposed to apologizing to people, more -- we have special rules -- the more severe the punishment, the more careful the process needs to be. I think we’ve had enough process to know that The Federalist Society members are owed an apology. Punishment, we’d need more process before, actually, individuals are punished, and so, let’s first have an apology, and let’s get procedures in place so this will not ever happen again. And let’s have more immediate steps taken toward the ideological diversification of the law school faculty.

 

Hon. Kyle Duncan:  Thank you. Anything else, Josh?

 

Josh Hammer:  I’m good with the one question.

 

Hon. Kyle Duncan:  Okay. Letitia?

 

Letitia Todd Kim:  Thank you. I actually have a question for Josh, Kim, and Greg, whoever wants to answer it, any or none. As Greg said, Harvard, Yale, and Stanford aren’t going anywhere. I also think diversity, equity, and inclusion aren’t going anywhere, at least not in our lifetimes. But the question, I think, is -- and I think those can be a good thing, depending on how they’re interpreted and implemented, but I would love to hear from my co-panelists as to whether they agree with that. Do they think that there are productive, positive ways that diversity, equity, and inclusion can be implemented, whether it’s in our schools or in our corporations, and if so, what would that look like?

 

Greg Lukianoff:  Oh, I’d definitely like to take that because one of the things that FIRE’s been doing -- and FIRE always has, I said, experiment a lot, but we always have sort of an experimental bucket of things that we try that are kind of bold and maybe even strange, like writing a book about free speech that’s actually about psychology. But we’ve been incubating a diversity trainer named Karith Foster, trying to start an organization called Inversity—and it’s just about to go off on its own—which is an attempt to take -- I’ve always found that absolutely ludicrous that we -- the way diversity inclusion is taught on campuses is extremely conformist. It’s not multi-cultural; it’s actually about, frankly, in many cases, adopting upper-class American, academic norms and that it’s couched as saying, “This is what you should really think, and this is what good people think.” Diversity—real diversity—requires freedom of speech.

 

I’m a first-generation American. I grew up in a neighborhood with a lot of other immigrant kids and first-generation. The one rule that you have, in that circumstance, is that everybody’s entitled to their freedom of speech. Sometimes they get punished for it, but you’re entitled to it. So I don’t think that, properly understood, there needs to be, as such, great tension between diversity and inclusion and freedom of speech and multi-culturalism. Chloe Valdary––I’m going to say her name wrong––is trying something called enchantment theory. She’s another experimental approach to diversity inclusion that focuses a lot more on individuality and actually talking across lines of difference.

 

But the first thing you have to see––and this is one of my concerns about the potential for reform at Yale––is, I think, in a lot of cases, these aren’t people who think they’ve done anything wrong. I think too many of them think DEI is just fine how it is, even though, like I said, I think it’s actually maintaining privilege to a degree. And actually, the research on DEI is that it doesn’t improve things and, actually, there’s a good argument to say that it makes people more alienated from each other. So I think that we’re so far away from the truth and reconciliation problem because I think that people still don’t think they did anything wrong -- like Nicholas Christakis, at Yale, for goodness’ sake. So we would love for this world to exist, but I think we’re so far away from it. You know, we need very small steps towards there and big innovative ideas like creating a new DEI industry for actual people for actual diversity.

 

Hon. Kyle Duncan:  Thank you. Did anyone else want to respond to that, or, Professor Amar, did you want to criticize Yale anymore?

 

[Laughter]

 

Prof: Akhil Reed Amar:  The night is young.

 

Josh Hammer:  I mean, I’ll chime in, real quick, just on the higher education components, not so much on the DEI components here. Look, one thing that I also love from Professor Amar’s remarks––we actually had a whole Newsweek debate podcast on this a few months ago––is what is the purpose of the university? What is the purpose of higher education? And I love, love the fact that Professor Amar is talking about lux et veritas because seeking truth, seeking the dissemination of knowledge and, ultimately, seeking truth, literally is the purpose, obviously, of the dialect going back, obviously, to the Greeks but in the modern European and North African history of the modern university, that was always the understanding of what the university is. The question, obviously––especially given the tax structures that the university endowments currently get and all that––is, are our current universities, in large part, as currently situated, actually doing that, let alone redounding to the national interest or the common good? And I think the short answer to that is quite clearly not. If anything, they are, in large part, destructive and rotting children’s minds -- or, not children but teenagers’ minds. Obviously --

 

[CROSSTALK]

 

Greg Lukianoff:  -- Perhaps coddling them? Sorry.

 

[Laughter]

 

Josh Hammer:  So the question, obviously, then is what do we do about that? There was one great essay by my buddy, Arthur Milikh, at Claremont Institute -- I linked to this essay all the time. It was a National Affairs essay. You can Google it. It was called -- an essay, “Preventing Suicide by Higher Education”. So the title kind of gives away the conclusion a little bit there. But at the National Conservatism Conference that I mentioned earlier that I was at last week, JD Vance, when he gave his keynote address —and you know, FedSoc not a partisan organization so no comment, obviously, on the actual Ohio senate race.

 

      But in JD Vance’s keynote address, he talked about how we have to think of the higher education apparatus in general now. He used the term “enemy” to borrow the same phraseology that I used earlier to refer to the woke ideology corrupting K-12 lower education. Whether or not you want to ascribe the word “enemy” to the higher education diversity "diversity-crats"––and I think it’s certainly appropriate in many cases, including what happened at Yale Law School—but regardless of whether you want to apply that particular word there, what we have to do is, ultimately, get ourselves comfortable––and even judge Duncan actually joked about this in his opening remarks––with getting us out of this mentality that a four-year education—kind of a Rumspringa for wealthy elites—is somehow a good rite of passage because the amount of fiscal and intellectual corruption––to say nothing of inflating costs of tuition and just the intellectual degradation––that takes place on most college campuses across America now really cannot be overstated. But it really -- this does have to start culturally, and I think the people in this room have to start thinking of higher education as an intrinsic good, worthy of being pursued unto itself.

 

Hon. Kyle Duncan:  Thank you.

 

Kimberly Hermann:  Yeah.

 

Hon. Kyle Duncan:  Who was next?

 

Kimberly Hermann:  I was just going to respond –

 

Hon. Kyle Duncan:  Please.

 

Kimberly Hermann:  -- to Letitia’s original question, which is, what is the place for DEI, specifically to K-12 schools -- to not repeat what Greg said for colleges. But of course, there’s a place for true diversity. Right? We need diversity of thought. We talk about that all the time. It’s incredibly important. But equity, as these schools are using it, they’re using it as nothing more than a license to punish Americans because of their skin color. You’re taking away talented and gifted programs. Right? You want everyone to have an equal outcome, so an end result. And what that ends up doing is, it really does punish all the kids that are in the room because you’re not giving the kids that need the additional resources, those resources. You’re not giving the kids who are excelling the ability to continue to excel. You’re taking away that drive there.

 

And so, yeah, of course we want diversity of so many different levels, but we also want equality, which is what our Constitution demands. Right? It’s what we fought for in this country. It's what’s enshrined in our Declaration of Independence. It’s very, very different than equity. And so, make no mistake about it, it’s a play on words here. And we have the White House coming out with an executive order a week/week-and-a-half ago creating an interagency working group so that we have equity in education. Why the EPA? Why the Department of Homeland Security? Why all these other agencies need to be involved in that baffles me. But it’s the same exact thing that we saw with environmental justice back in the ‘90s with Clinton. Right? It’s taking this concept of pitting people against each other. And so, just make no mistake about it, that’s what that is. We need diversity, but equity is not where this country needs to be going when it’s used in that way.

 

Hon. Kyle Duncan:  Thank you. Would anybody else like to respond to anything because I can ask a broad question, and we can also invite people from the --

 

[CROSSTALK]

 

Greg Lukianoff:  I would just like to –

 

Hon. Kyle Duncan:  -- go ahead.

 

Greg Lukianoff:  -- relay a personal experience. I lived in D.C. in the ‘90s, and I covered gun violence for my school newspaper, and I worked with inner-city high school kids for a program called The EnvironMentors Project, an environmental mentoring program for inner-city high school kids. And I got to meet some of the brightest students who are being horribly underserved by the D.C. public school system. They needed a place to go. They were almost exclusively black and brown kids, and they were extremely bright, and the idea that we’re doing something decent or kind by getting rid of the gifted and talented programs is such an insult to those children who will hide that they’re smart when they otherwise could be everything from productive to happy. It’s a very foolish way to go. And we talk about, in The Coddling of The American Mind -- about the equal outcome mentality is disastrous.

 

Hon. Kyle Duncan:  Thank you. I certainly invite questions from the audience. I’m sure we have many of them. Fine. I thought I’d have to wait for a line to form, but please, go ahead, introduce yourself. And please keep your question fairly brief, and make sure there’s a question mark at the end of it.

 

Josh (sp): I’ve actually got it drafted, so there’s a question mark.

 

Hon. Kyle Duncan:  Excellent.

 

Josh:  My name is Josh, and I am with the Kansas Chapter. And my question is specific to K-12 public schools, and it has to do with the tension -- or is there a tension between the principles supporting a legislative prescription of CRT curricula, basically, that K-12 public schools are not marketplaces of ideas and teachers should not get to teach what they want -- I think someone said it’s more the local community passing on the tradition and it’s a confined space, unlike university setting. Is there a tension between and that and the proposed judicial remedies that would prevent teachers from being compelled into particular speech, for example, in being required to use student’s preferred pronouns?

 

Hon. Kyle Duncan:  Okay. Well, that -- so I certainly throw that open to anyone. That raises a number of different issues and it -- one, in answering that, you might think about this, is if we’re going to talk about litigation and legal remedies, I think it would be helpful to specify who’s rights we’re talking about here. It strikes me that we have possible parental rights, we have student rights of various dimensions, whether it be to speak or, as Letitia mentioned, to receive information -- I thought, maybe, you said that at some point. We have teachers’ rights. We just heard someone -- a teacher against being compelled to speak. And yet, we’ve also heard panel members say that First Amendment rights are generally thought of as somewhat limited in this realm because, after all, I think Justice Alito said in a recent concurrence in the cheerleader case -- he said, “In schools, children in a math class can be made to speak about math.” And that’s certainly practical truths. So anybody want to take any one of those?

 

Josh Hammer:  I mean, I’ll hop in quickly. There’s a lot to unpack there, obviously, so I’ll try to be quick and then pass it on to my co-panelists. Look, from a fundamental perspective here, we need to remember what the First Amendment, in this context, is actually doing. Okay? To paraphrase something that Rufo has said himself, “The First Amendment does not exist to protect teachers’ 'free speech rights' from children and, by extension, their parents.” The First Amendment, in this context, exists to protect we, the people, the sovereign citizens of these United States, against the government, which, in this case, is the woke bureaucracies and, by extension, the individual teachers here. So, along those lines, to get to the other part of the question about proposed remedies -- I mean, one thing that I was toying around with––again, I’m not involved in drafting model legislation or anything like that, but just to throw an idea, a very half-baked idea out there––you could do some sort of -- a state legislature could create a private right of action along the lines of where there’s an alleged Title VI statutory violation for discriminating on the basis of race, and you could borrow from our dear friend, the “genius,” Jonathan Mitchell. You could borrow the expiate of Texas enforcement mechanism and rely upon individual parents to then file those private right of action lawsuits against school bureaucracies, to file those suits for appropriate damages. So just one possible idea about how I might think about these concepts.

 

Hon. Kyle Duncan:  I think, Kim, you wanted to say something.

 

Kimberly Hermann:  Yeah. I’m happy to chime in. I think that you have to look at it like Judge Duncan said, from whose rights are you talking about? So in the cases that we’ve filed, we’ve actually filed them on behalf of teachers. We have a compelled speech case on behalf of teachers in Missouri, dealing with the teacher training. So it’s not about the curriculum, but it’s about being compelled to opine and to agree with ideas that are very public ideas on a public topic. And there, we‘re talking about teachers’ rights.

 

      In a case we brought in Evanston, we also brought it on behalf of a teacher. But there, it’s a Title VI case. It’s a hostile learning environment case, where the Department of Education has, actually, already found that the school district violated the Civil Rights Act because she filed an OCR complaint back in 2019. They investigated it for 18 months. They issued a letter of finding saying that, “Yes, when you segregate students and you segregate teachers, your, in fact, violating Title VI.” And when Biden took office, they withdrew that letter of finding in an unprecedented fashion that we’ve yet to find where they’ve ever done that before. Yeah. I mean, that’s what we’ve been told. That’s never happened. It’s got to be very fact-specific as to whose rights you’re talking about here. But in the classroom, you’re a teacher. You have a job to do, but you also can’t be forced to violate your students’ rights, their civil rights. And so, you may have a remedy in that context.

 

Hon. Kyle Duncan:  Thank you. Anyone else want to chime in on that? Okay. Yes, sir.

 

Brian Bishop (sp):  Brian Bishop, from the Stephen Hopkin’s Center for Civil Rights in Rhode Island. I just wanted to ask if there’s a proper level of government for these issues to be taken up. It seems that we see them splashed across -- from very local iterations of the problem to a question of state policy and state intervention and then to a question of, perhaps, federal bureaucratic levers that are being pulled. And I haven’t really heard in the broad public debate, what I thought would have been the customary notion that these are matters for the local school board, and if the DEI crowd wins at one local school board, they’ll lose in the next, or we’re going to see these experiments going on beside each other and people are going to be able to pick from those very small laboratories of democracy. I’m just wondering why I haven’t heard that issue more focused on.

 

Hon. Kyle Duncan:  Thank you. Anyone? Levels of response to this. I forget who I heard this from yesterday, but we’re essentially talking about the idea of localism or subsidiarity, where we’re saying, “Well, there’s a problem. We can talk all day about the problem, but who is best situated to address the problem?” Is it a school board? Is it a school principal? Is it a city council? Is it a state legislature? Is it a state court? Is it a federal court? So who is it? Who’s best positioned to address these issues? Feel free, please.

 

Letitia Todd Kim:  Thank you. I do believe that when it comes to the public K-12s, it’s absolutely best handled by the local board of education and, historically, that’s how it’s been handled. I do agree that states have the -- as Josh mentioned, have the authority to determine many things that are in the curriculum, at least affirmatively. And we’ve certainly seen that happen in my home state of California, where the state has come down with a mandatory ethnic studies requirement in order to graduate from a public high school in California. So the state does have the authority, and it is using that authority with increasing frequency.

 

And then you see, obviously, the flip side of that, which is the anti-CRT legislation, with states coming in and saying, “No, you’re, actually, not going to teach this.” Because it varies so much from one community to another, I do think it’s best to be handled locally, if at all possible. Obviously, if you’re at a point of litigation, then that possibility is foreclosed.

 

I also see an issue––and this has happened in some districts in the country––where you have a great disconnect between the residents in the district, i.e., the parents, and the people who are on the -- elected to serve as trustees or on the local board of education. A lot of these people come in fresh from the university. They get on the board of education, and they start implementing policies that the underlying community is very strongly opposed to. It really does not work in their local community. Obviously, in such a case, we have to be satisfied with incremental changes, and maybe the community has to think about what they’re going to do when the next board of education comes up. But ideally, these are taken care of––and I think most effectively they’re taken care of––at a local level.

 

Brian Bishop:   A very brief follow-up. I just --

 

Hon. Kyle Duncan:  Okay, very brief.

 

Brian Bishop:  -- I recognize, when you say the next board of education, that that’s just what happened in the case of teaching creationism. I mean, the local school board did something, and they got deselected, so I really see much more potential for local effect here. Thank you.

 

Hon. Kyle Duncan:  Thank you. Next question. Oh, did we -- I’m sorry, did we have someone back there?

 

Rachel (sp):  I’m a little short.

 

[Laughter]

 

Hon. Kyle Duncan:  Oh, that’s all right. I wasn’t attempting to micro aggress against your height.

 

[Laughter]

 

I do that all the time.

 

 

Rachel:  No offense taken. My name is Rachel, --

 

Hon. Kyle Duncan:  Please.

 

Rachel:  -- and I want to address some of the things that were said at the end about being outcome-oriented. With no child left behind and federal testing mandates, education has become an outcome-oriented endeavor, and my question is, how do we balance accountability for our teachers and for education for our children without having the problems we’re having about being outcome-oriented? I think that there might be an obvious answer to that, but I would also love to hear some of the more intricate thoughts about -- we’re moving – I think the underlying problem is we’re moving towards this outcome-oriented thought process because we want accountability, so I’d love to hear solutions from the panel.

 

Hon. Kyle Duncan:  The question is about an outcome-oriented approach or mentality.

 

Josh Hammer:  What is so inherently problematic about that?

 

Rachel:  Oh. Well, my perspective of the comment that was given by the panel earlier was that equity is a problem because we’re outcome-oriented, and we’re using those outcomes to change the definition of equality and create different standards for people to get, “the same outcome,” and they’re not getting the same services in violation of equal opportunity. Right? And so, my question, basically, is, we’ve done that with testing, and now everything’s about the test, so we want accountability in our education, but now the outcome has shifted to this equity thing. What I’m hearing is, we want accountability for our teachers. How do we do that and maintain the First Amendment? How do we do that and maintain opportunities for students to learn with diversity, even though that’s going to be different?

 

Kimberly Hermann:  Well, --

 

[CROSSTALK]

 

Hon. Kyle Duncan:  Anyone, go ahead.

 

Kimberly Hermann:  And maybe, I’ll just clarify because I think that’s in direct question to something that I said. An example that I like to give is, say, reading in an elementary school. Right? You’ve got -- take a second-grade class. You’ve got kids that are reading across a very, very broad spectrum of levels. You’ve got kids starting -- for anyone who has young kids, you’ve got kids that might be starting at a level D, which is a kindergarten reading level, all the way up to kids who are reading chapter books and working towards your Harry Potter books that are for Fifth graders. Basically, what we mean when I say, “equity in terms of equal outcome,” is that instead of pushing these kids, who are really excelling, ahead, you stop giving them those resources. But at the same time, you’re not giving these kids the actual help that they need. You’re not giving them the tutors. And so, you go along, you’re not giving these kids the extra help, you’re not giving these kids the extra help. Go to third grade, go to fourth grade, go to fifth grade, and eventually, you’re all the way down here. So instead of bringing these kids up by giving them an equal opportunity and giving them the extra tutoring and the extra help that they need, you’re basically dumbing everyone down, which then, at the end of the day, you can control everyone so maybe that’s a whole different discussion.

 

[Laughter]

 

Right? I’ve heard Greg explain this, so he may be able to take it another step further, but that’s what I mean by equal outcome. Yeah, you still have to look at the test scores, that’s inevitable, but you’re creating a world where the outcomes are so much lower than they could be.

 

Greg Lukianoff:  We just talk about, in The Coddling of The American Mind, the equal outcome mindset because, unfortunately, it’s extremely difficult to have a situation where everybody’s going to perform at the highest level of the best student at any given place. It’s much easier to go in the opposite direction and try to bring as many people down. That’s one way that you -- my family fled Russia because we were trying to avoid a system that, basically, achieved equality by making everyone poor.

 

Hon. Kyle Duncan:  Thank you. Next question.

 

Art Macomber: Yes, sir. Thank you. Art Macomber, Coeur d’Alene, Idaho. After the invasion, we had the king and the church, which was really the law and equity, and we had --

 

Hon. Kyle Duncan:  Which invasion?

 

Greg Lukianoff:  Yeah, which invasion?

 

Art Macomber:  The 1066.

 

[CROSSTALK]

 

Greg Lukianoff:  Oh, yeah, yeah.

 

Hon. Kyle Duncan:  Oh, that one. Okay.

 

Art Macomber:  Yeah. Thank you. Thank you.

 

Greg Lukianoff:  I remember that. Oh yeah, that was years –

 

Josh Hammer:  Obviously.

 

[Laughter]

 

Art Macomber:  And so, --

 

Hon. Kyle Duncan:  All right.

 

Art Macomber:  -- you have this law of the king, which is very harsh, and you have the law of the church, which is compassionate and accommodating. And if you brought a debt action, you were in the king’s court, but if the tithe was phrased as, “We’re saving your soul,” then it would go to the chancery, it would go to the church court. And so, we’ve had this traditional thing of law and equity, they merged them, now we have a civil action. Okay, I get it.

 

But this term today, equity, I don’t get what these people are talking about because it is not what I traditionally read in the books about equity and what equity is. It sounds like a leveling mechanism. And so, I’m wondering, maybe, with Professor Amar can give me a clue from the legal bridge to get me over to this new thing because it feels like we’re talking about, like I say, a leveling mechanism to level some people at the expense of others. And I don’t think the church ever did that. And I also don’t think, today, they’re really talking about saving souls when they talk about equity, so that doesn’t work either.

 

Hon. Kyle Duncan:  Okay.

 

Art Macomber:  So I’m confused.

 

Hon. Kyle Duncan:  All right. Well, --

 

Art Macomber:  And I’m just looking for definition.

 

Hon. Kyle Duncan:  -- so you’re asking about the definition of equity. I think that’s a good question.

 

Art Macomber:  Thank you.

 

Hon. Kyle Duncan:  I thought it always meant --

 

Art Macomber:  -- And I didn’t read Pomeroy yet, so I can’t tell you what he said.

 

Hon. Kyle Duncan:  I thought equity meant injunction. We’re not talking about -- when you say diversity, equity, and inclusion, you’re not talking about preliminary injunctions, I take it. So I’m a little confused. But why don’t you talk about this general -- so the equity -- instead of equality, what do we say about it? And I’ll add to that question, where did this come from? These are ideas, right? These didn’t just blossom out of nowhere. They’re ideas.

 

Greg Lukianoff:  Yeah.

 

Hon. Kyle Duncan:  Right? And so, where do they come from? How is this equity idea getting into the school boards or the teachers or the curricula, and why now?

 

Greg Lukianoff:  That’s a curious question. But first of all, I wanted to say when you mentioned the invasion to a Russian, it’s like, “Oh, yes. Genghis Khan. Yes, it was very difficult.”

 

[Laughter]

 

      So the equity idea is as old as time, to a degree—like, hunter-gatherers had a strong idea of equity that, essentially -- that there’s a sort of leveling down that everybody has to maintain equality. There’s a lot of -- actually, they wouldn’t call it equality.

 

Hon. Kyle Duncan:  Yeah.

 

Greg Lukianoff:  It would be like that everybody has to be on the same level. So it’s an idea that has come in and out of fashion in intellectual circles for a very long time. The problem that I see with it is that when a lot of Americans hear equity, they go, “Oh, I totally believe in equality and equality of opportunity.” No. No, no, no. We’re talking about something very different, that everybody ends up in the same place, which is something that is also extremely difficult to achieve without disastrous results. But, Professor Amar, the question, I think, was directed at you.

 

Hon. Kyle Duncan:  I was directing it generally, but I mean, that’s how I’ve understood it, that we’re talking about outcomes and not opportunities.

 

Greg Lukianoff:  Yep.

 

Hon. Kyle Duncan:  And so, although there are many of the vowels that are the same in the two words, equality and equity—they rhyme, kind of—but they’re actually quite different and as, sort of, translated into, say, an educational policy or goodness, a legal doctrine, they would be very, very different, maybe even the opposite. Anybody else.

 

Letitia Todd Kim:  Thank you.

 

Hon. Kyle Duncan:  Sure.

 

Letitia Todd Kim:  I think that, at least as schools are using the term equity, what they seem to me to mean is––and this is very fuzzy––is giving each person what they need, giving each student what they need, giving each employee what they need to succeed. And that’s why I try to shy away from the phrase equality of opportunity because that can also be used in order to pursue equity as defined as equality of outcome because one can always say,” Well, this person does not have the same opportunity that everybody else has and shouldn’t they.” And in order to give them that same opportunity, we have to give them what is, in effect, equality of outcome.

 

So I think what we should be -- independently, I think I would not define equity that way, personally. I think equity can be a useful concept when it’s used in its original sense, meaning basic fairness. But when discussing the topic of equity, what I find most useful is to focus not on equality of opportunity but on equality before the law, which is what I think most people think of when they talk about equality vs. equity. And on this general topic of leveling, a book that I read a couple years ago that I highly recommend on this general topic is The Great Leveler by Walter Scheidel, if any of you is interested in that book.

 

Hon. Kyle Duncan:  Thank you.

 

Prof: Akhil Reed Amar:  And just, generally, since you ask about English courts and the Norman Conquest and all of that -- of course, words change meaning over time. My friend, Stanley Fish, is out there, so I can’t resist talking about Shakespeare and presidential eligibility. So a president has to be a natural-born and -- now if this were a Shakespeare class, we’d talk about Macbeth. And the witches say, “Be bloody bold resolute for -- laugh to scorn. The power of man, for none of woman born shall harm Macbeth.” And natural-born there is all about C-section because McDuff was from his mother’s womb untimely ripped. But that’s not quite what Article II really has in mind.

 

[Laughter]

 

      No C-section babies.

 

Hon. Kyle Duncan:  Can you cite a case for that proposition?

 

Prof: Akhil Reed Amar:  No, but I’ve actually written about it, so even better.

 

Hon. Kyle Duncan:  Secondary authority.

 

[Laughter]

 

Very persuasive. I did not mean to interrupt you.

 

[CROSSTALK]

 

Hon. Kyle Duncan:  Go ahead.

 

Prof: Akhil Reed Amar: No, no, no, no, no. But I just want Stanley Fish to know that he’s persuaded me that Shakespeare should be read and should be part of the canon of every well-educated, liberally educated would-be lawyer.

 

Josh Hammer:  Real quick, let me just throw in there before going on to the next question -- from my perspective, when the left uses the terms equity and equitable, what they’re really talking about here is they want proportional, intersectional outcome based on the various intersectional subgroup’s percentage of the population of the whole. Right? So again, to take my people, the Jews -- we’re 1.8 - 2% of the U.S. population. I don’t know what percentage Jews are in the CEO, C-suites, the Fortune 500. I would hazard a guess it’s probably slightly higher than our proportion of 1.8 - 2%, so the intersectional left looks at that and they see oppressor class, supremacism, whatever, here.

 

And to just give one very concrete example here––and it’s a somewhat provocative example, but I guess I’m good for nothing else if not that––is if you look at the percentage of unarmed black males who are shot and killed by law enforcement officers acting in the line of duty in a given year, out of the total proportion -- if you take that percentage and you compare to it to the percentage of black males in America, it’s going to seem disproportionately way out of proportion here.

 

But I think, as Heather Mac Donald has pretty persuasively––at least from my perspective––demonstrated, if you compare -- if you use a different denominator, if you use a different baseline, and you just look at the percentage of unarmed criminals who are engaging in reasonably suspicious––or whatever the relevant legal language would be––criminal activity at time, and then you compare that, I think, Heather has tried to argue that it’s actually whites who are disproportionately shot in that situation. Don’t quote me on that. But the point is here, the denominator is really what’s getting conflated here.

 

Hon. Kyle Duncan:  On that note -- yes, sir?

 

Dan Morenoff:  Thank you, Your Honor. Dan Morenoff, from the American Civil Rights Project. So we, The Federalist Society, the people in this room, and our predecessors have a long history of focusing on things like structural constitution as the protector of rights. And with that as a conceptual background, I find myself wondering, specifically, about Yale, but more generally about all of the host of organizations that have been brought up and discussed. Is there a structural problem posed by the creation of self-interested diversity bureaucracies and the impact they have on the possibility of the pursuit of light and truth? And if there is, what might be done about that to restore a structure compatible with the end?

 

Prof: Akhil Reed Amar:  In the Yale Daily News this week, there’s an article about the number of bureaucrats at Yale University compared to the number of professors at Yale University. And the bureaucrats now actually outnumber the professors. I’m actually quoted in that article. So one fundamental problem -- since I had mentioned economics before, in almost the rest of the free economy, actually, prices go down and quality goes up. And every microchip, eventually, does more and more and more and sells for less and less and less. It’s just amazing. But education costs have gone up and up and up. This is Baumol’s cost disease, and there’ve been many possible explanations for it, but bureaucratic bloat is one of them.

 

One real problem is folks who actually aren’t, themselves, educators––who aren’t in the classroom, who aren’t, themselves, actually researchers or teachers trying to find and disseminate knowledge, light, and truth––playing an increasingly large proportionate role just in the ecosystem of the universities. And if you’re a hammer, everything looks like a nail—you make work for yourself. If this is your bureaucratic assignment, you want more and more things to fall in your bureaucratic fiefdom, and it’s a genuine problem.

 

The late great Ralph Winter, in his -- who was a very good friend of The Federalist Society at the founding, was asked about this in his confirmation hearings. It’s the tension between administrators, deans of all sorts, and real professors, you see. And the chair of the committee was shuffling some papers -- and Ralph had an amazing sense of humor, very quick -- said, “Now, Mr. Winter,” -- he was shuffling some papers, said­ -- this was his confirmation hearings for the Second Circuit -- “you’re just a professor, not a dean, right?” And Ralph Winter said, “No, Mr. Chair, I’m a professor, not just a dean.”

 

[Laughter]

 

 And so, there is a problem here, when the folks are not, themselves, educators, when they’re not researchers, and they’re not actually classroom teachers.

 

Greg Lukianoff:  I really want to amplify that. One of the things that’s been blazingly clear from doing this for 20 years is how much the hyper bureaucratization of universities creates these problems. It creates threats to due process, threats to free speech. It creates bias-related incident programs that enforce an orthodoxy that’s very hard to challenge in a court of law. I think that -- I say this a lot -- one thing is if I ran a non-profit with the kind of overhead at development and administrative costs of universities, I would be out of business because nobody would want to give money to something that’s that bureaucratic-heavy. Yet, we watch this massive expansion going on in higher ed, and it’s even worse because one of the things that I think we underestimate, as I mentioned earlier in The Coddling of The American Mind, was the role of education schools. And one thing I didn’t fully put together was that, although there was so much political homogeneity in education schools, even by 2005, that it took FIRE, and I think maybe NIS, to oppose a mandated evaluation for commitment to social justice among the accrediting body of all education schools, and they were just fine with it. It took us to fight that.

 

And what I’m getting at is that, that lines up with the more radicalized K-12 [inaudible 2:04:30]. What I didn’t know was how many––and I was doing this work with Sam Abrams from AEI––how many of those education schools who don’t go to K-12, go to higher education. For the three schools he looked at, it was 56 percent, and the other percentages were from other highly ideological departments. So I do think that the idea that we can have this bureaucratization and cost-effective, rigorous, and intellectually legitimate universities, I think that you really start having to have much lower overhead at these schools if you really want freedom of speech, academic freedom.

 

Hon. Kyle Duncan:  Thank you. Let’s move on so we can be sure to get to everyone. Please, go ahead.

 

Andrea Lucas:  Thank you. Andrea Lucas. I’m a republican commissioner on the EEOC, so Title VII and employees’ rights are more my wheelhouse, but I’m interested––there was mention of teacher’s rights from that angle––to what degree does Title VII provide either a compliment or a solution for constraints on suing under free speech rights? So Title VII, in my opinion, many of these practices are hostile work environments for the teachers, whether they’re a private or a public employee. So, I’m interested, are you seeing that in litigation or as a solution for some of the constraints you might have under other statutes or rights?

 

Hon. Kyle Duncan:  Anyone who would like to take that? Maybe Kim?

 

Kimberly Hermann:  I think we’re going to. There’s certainly a lot of teachers that are interested in that avenue. There’s a number of EEOC complaints that are being considered being filed. We’re not litigating any of those right now, but I certainly think you’re going to see those coming down that pipeline --

 

Hon. Kyle Duncan:  Thank you.

 

Kimberly Hermann:  -- from various groups.

 

Hon. Kyle Duncan:  Is that Ilya?

 

Ilya Somin:  Yes.

 

Hon. Kyle Duncan:  Please.

 

Greg Lukianoff:  Hi, Ilya.

 

Ilya Somin:  Ilya Somin, George Mason University, not to be confused with the other Ilya, Ilya Shapiro, who’s also in this room.

 

[CROSSTALK]

 

Hon. Kyle Duncan:  He’s there, right there.

 

Ilya Somin:   I didn’t actually realize you were here.

 

Hon. Kyle Duncan:  Yes.

 

Ilya Somin:  I could go into a greater -- in greater detail about the problem of Ilya confusion, which even has its own hashtag on Twitter, but instead I’d like to ask a question that follows up on the previous questions about institutional approaches to these issues that -- I agree there is a problem, at least in some school districts, with CRT or woke education or whatever you want to call it, but I’m also worried about the possibility of instead of having a CRT curriculum, why not just implement a more conservative curriculum and force that through at the state level or even at the national level? The history of right-of-center attempts to control educational curricula is also not a very attractive one and includes many awful things.

 

So I wonder if, instead, it might be better -- I would ask the panel if instead, it might be better to -- instead of trying to seek centralized state control and have our preferred curriculum rather than somebody else’s, to instead decentralize power and allow for more institutional diversity and competition through some variety of school choice policy where there would be many different options. It wouldn’t be, if you live in a given area, you have to go to the local public schools, or you can still continue to pay tax money for those schools and have to fully self-fund for private alternatives, instead just some sort of voucher system or tax credit system. There are many different proposals that would mean some of the money would end up going to woke private schools that many people in this room might not like, but there would also be many alternatives on the right and the center and many other options. And that might be better than letting either the right or the left try to control curricula from state capitols or, even worse, from Washington D.C. So I would ask the panelists, might that be a better way to address some of the problems we have been discussing?

 

Hon. Kyle Duncan:  Reactions?

 

Ilya Somin:  Thank you.

 

Hon. Kyle Duncan:  Thank you.

 

Josh Hammer:  Those don’t strike me as mutually exclusive at all, honestly. I, personally, fully support greater privatization, school choice vouchers. I always support all that stuff. I just don’t’ see that as, necessarily, being in any kind of state of tension with pursuing marginal policies to that extent and wielding power at the state level to crack down on the racialist abhorrent indoctrination of our innocent children.

 

I guess, to go back to a slightly earlier question that I think you’re building off of here, I probably slightly disagree with my new friend on my left on this question. So you know, I lived in Texas for four years, and when I was there, I think, it was Governor Abbot. So then, Governor Abbott was oftentimes warring with the city council in Austin here, and the Texas state legislature would always legislate against the various forms of leftist malarkey that the city council in Austin was pulling out of its proverbial rear end.

 

And at the end of the day, in our system of governance, it is the state that wields power. It is not ultimately municipalities that are ultimately corporate creations largely of this day. We see this in Florida, too—my new home state. Governor DeSantis has been battling with all sorts of school districts and counties—Miami Dade County, Brower County—about the children wearing masks in schools in this calendar year. So look, are people probably speaking, right of center people, sober-minded American patriotic people who do not want their children indoctrinated again into hating themselves or their country here? From my perspective, it would be more prudent to try to vote with our feet and then wield power in the state jurisdictions and leave our men and women behind who might be living there in Austin, Texas, but still behind enemy lines. But at the same time, I don’t see that, again, in any degree of tension whatsoever with pushing for additional school policies in the state leg as well—school choice policies.

 

Hon. Kyle Duncan:  Great. Thank you. Dr. Fish?

 

Dr. Stanley Fish:  I’m not good at asking questions. I’m good at telling people what to believe.

 

[Laughter]

 

Hon. Kyle Duncan:  You go right ahead.

 

Dr. Stanley Fish:  So I’ll get right to it. First of all, I’ve been speaking out against both diversity and social justice teaching for 25 years in the New York Times and elsewhere. My key statement, which I repeat ad nauseum is, social justice may be a good thing, but it’s not a good academic thing. And I believe that because I believe that all academic decisions should be made on academic, that is, pedagogical or intellectual, grounds. This puts me in line with my friend Akhil’s emphasis on light and truth. Back in 1915, as you all will remember –

 

[CROSSTALK]

 

Hon. Kyle Duncan:   Well, that was someone after the Norman invasion.

 

Dr. Stanley Fish:  -- I thought that 1066, in the mode of Frank Sinatra, was a very good year.

 

[Laughter]

 

        But in 1915, it was against the law in several states to teach evolution. These days it’s against the law in many states, on the basis of Supreme Court and lower court decisions, to teach intelligent design, sometimes called creationism. I think that both of those movements––both of those developments––are suspect if they are based on ideological or political grounds rather than educational grounds. And in fact, I have a great deal more sympathy for intelligent design than most of my friends do have.

 

This brings me to critical race theory. The question to be asked critical race theory, from my perspective, is it an academic discipline, or is it something else, or is it a hybrid, or is it one thing at one time and another thing at another time? First of all, it exists. How do I know it exists? I teach it. And why do I teach it? Because I and three coeditors have published a jurisprudence casebook in which critical race theory is one of 12 or 13 chapters. Now in that theory––in that casebook chapter––you will find writings by Patricia Williams, Kimberle Crenshaw, Richard Delgado––who is one of the editors of this casebook––Charles Lawrence of Stanford, and other persons whose intellectual credentials and legal theory credentials, I think, are in very good order. And what they are teaching is something called critical race theory.

 

And you have to understand what critical means. It doesn’t mean against. It means reflecting on. It means not taking the surface for necessarily the entire truth. That’s what critical means. Take a critical look at it. And that is what the scholars that I named a moment ago do. They take a critical look at what’s been going on in the history both of race relationships and thinking about race relationships and legal decisions that pertain to race relationships. That seems to me to be an absolutely legitimate academic enterprise. And it's an academic enterprise that needs no apology from me or from anyone else.

 

Now the moment that academic enterprise turns into a political program, I get off the train, as I get off all the trains the moment when that happens. Two weeks ago, I was called before my dean at Cardoza Law School because of my weakness on the question of pronouns. So I’ve had my own run-ins in this way. Always the line for me is entirely clear. Is it a decision being made on intellectual, academic grounds, or is it not? The moment that my own law school, one of my law schools, the Cardoza Law School, voted that race as a topic must be a part of every course, I got off that train. That’s absolutely absurd. But it’s equally absurd to have a political movement based on the banning of a set of ideas which, if they are taught responsibly and historically, deserves attention, as any other seriously put forward set of ideas deserves attention. And finally, Greg, you’ve got to recognize, after all the years when I’ve been telling you this, that free speech and freedom of inquiry have nothing to do with one another.

 

Greg Lukianoff:  [Laughter] You’re right, Stanley.

 

Hon. Kyle Duncan:  I’m not sure there was a question there for anyone, --

 

Greg Lukianoff:  Yeah.

 

Hon. Kyle Duncan:  -- but I think there might have been a question of this entire panel.

 

[CROSSTALK]

 

Prof: Akhil Reed Amar:  The question is a good one -- is, “Why wasn’t he on this panel?” --

 

Greg Lukianoff:  Yeah.

 

Prof: Akhil Reed Amar:  -- because that was well put. Thank you.

 

Greg Lukianoff:  Yeah. Well, my friend Jonathan Haidt puts it really well. And it’s amazing how this gets read like a Zen cone when you tell younger people this, is that universities have to choose their telos. It can either be truth or it can be justice or some pre-existing idea of what you should believe. It cannot be both. And the idea that I’ve actually had to explain this to adults who graduated from law schools -- because they’re like, “Well, how could that possibly be?” No, you’re presuming to know the result of all your academic endeavors from the beginning. That’s completely getting things backward. And the difference -- I love Stanley, even though we disagree on any number of things. The primary difference is, I just think of free inquiry, academic freedom as within the larger sphere of what Johnathan Rauch calls liberal science, which is -- in which free speech is part. It’s actually more of a technical debate than you'd think. But, anyway. Good to see you, Stanley. Oh, and if you get in trouble at Cardoza, by the way, come to FIRE. That would be fun.

 

Dr. Stanley Fish:  I’m over age.

 

[Laughter]

 

Letitia Todd Kim:  I would say that -- I think, probably, as I see it, one of the largest problems is that critical race theory, however you define and describe it—let’s call them the concepts that are grounded in critical race theory—at many schools, increasingly at a younger and younger and younger level, is the only thing on offer. It’s not like, “Well, here’s one theory and one way to explain the world, and here’s another, and you get to pick and choose.” That’s not how it’s going. Everything is taught, in many schools, from the perspective and viewpoint of these concepts that are grounded in critical race theory.

 

And as Kim had pointed out, these are, in many cases, young kids, so it’s not enough to say, “Well, they have free speech. They can raise their hand and disagree if they so choose.” They’re ten. Okay? They’re nine. They really can’t. And I think one of the things we really need to demand in our schools, regardless of whether they’re public or private, is a diversity of sources. And we’re just not seeing diverse sources in the classroom right now.

 

Hon. Kyle Duncan:  Thank you.

 

[CROSSTALK]

 

Go ahead.

 

Kimberly Hermann:  It also comes in through all the different subjects, too. Right? We see it in math word problems. So they’re not going in there saying, “Let’s teach critical race theory,” but it’s being implemented in every single subject. And so, it’s really hard for parents to identify it, too. But it’s not even just teaching both sides. It’s that it’s infiltrated every subject at every grade in every school.

 

Hon. Kyle Duncan:  Thank you. Pepper, I think you were next, and then we’ll…go ahead.

 

Pepper (sp):  This is for Ms. Hermann. I’m pretty sure that if this were a room full of plaintiff’s personal injury lawyers, we’d all go out of here, and we’d all try to find expert psychologists to be our plaintiff’s personal injury damage experts. We’d go out and get some sympathetic young plaintiffs who had been harmed for life by being educated in this way, and then we’d sue the individual teachers, the board members, the organizations for intentional infliction of emotional distress. Has that been tried? If not, why not?

 

Kimberly Hermann:  There are plaintiff’s attorneys that are talking about doing that. From our perspective, as a public interest law firm, we are trying to get the courts to declare these practices to be violating Title VI––like the Department of Education found in the Evanston case already––or violating the First Amendment. There are people that are doing that, and there are times where that might be warranted. We’ve had two different sets of parents come to us where their kids tried to harm themselves because one of them doesn’t understand where they fall because they’re biracial.

 

And then another is a middle school student who outed themselves in class when they were in the middle of a safe circle. Right? And then there was a lot of bullying that ensued from that. And so, I think we are going to see some private attorneys taking cases like that, but from our perspective, we need to be pushing the needle with getting some strong rulings in some of these most egregious cases.

 

Hon. Kyle Duncan:  Okay. I think the last question. Go ahead.

 

Nick DeBenedetto:  Good afternoon. Nick DeBenedetto from the New Jersey Lawyers Chapter. My question is in the context of K-12 education. What role, if any, in this discussion is there for the historical veracity of what’s being taught to the students? For example, I know that there is a version of The 1619 Project that is being adapted for elementary school students. Is there any role for people to step in more forcefully and just dispute the accuracy of what’s being put forward?

 

Prof: Akhil Reed Amar:  Even though my main area is not K-12, I’m trying to get people like Steve Calabresi and others to join me in producing some materials about American history that would be free on the internet––we won’t want to make any money off this––that would be available to teachers and parents and students. The folks that are doing it would need, themselves, to be ideologically diverse to have a certain credibility with folks. And we want to begin just by being as factual as we can. One part of the project will be -- and this connects to Professor Calabresi’s interests, in particular, since he is a strong scholar about the unitary executive -- is for all Americans to know your presidents by seventh grade, know their names, know one paragraph about them because now, actually, you have the spine of American history at your disposal

 

  World history if you know the presidents, a little bit about them, the order of them. Some will like Ronald Reagan, and others will prefer Franklin Roosevelt. But you can trade baseball card facts about them and other things if that actually becomes the discourse. And the idea is to -- because it has to be age-appropriate.

 

The one thing that we have in common as Americans because see we don’t have race in common or religion -- people’s ancestors, some of them came yesterday and some of them came 300 years ago, some with bullwhips and some in chains. So what we have is our history. That makes us Americans -- and our Constitution. The new book that I have is stories that made us, as a we. So we have to have a national coherent narrative. That book is really for AP History, AP Government.

 

We have to start earlier, and one project would be, know your presidents, know who they are. That’s the easiest way to spoon-feed history because people are interested in other people and presidents are individuals, and so you can begin to get a sense of the broader context.

 

I’ll just tell what my own son, who knows his presidents and did since age six -- and I’m an immigrant kid -- and Greg – and I knew my presidents at age eight, and I can still close my eyes and recite them. So my son, actually, at age six, he asked me, he said, “Dad, when did the British become our friends?” I said, “Well, that’s a very interesting question, Vick. Why do you ask?” He said, “Dad, George Washington fought against the British, and Dwight Eisenhower fought alongside the British. So sometime in between, they must have become our friends.” Now, that’s actually a very sophisticated historical interpolation he did. He’s a six-year-old kid. And the truth is they did become our friends, kind of, somewhere in between.

 

[Laughter]

 

And if you know your presidents, you actually understand that Dwight Eisenhower is a president in the model of George Washington; two-term president, above party, and so was Ulysses S. Grant, by the way.

 

And that’s why Ron Chernow is one of the dedicatees of this new book that I wrote, along with Lin-Manuel Miranda and others, writes about George Washington and Ulysses Grant you see because -- but now you’re beginning to ask questions about Americans. But it begins with some just basic factual stuff, and I think––even though I’m not K-12 and neither is Steve––we could, with others, maybe, in this room, try to generate some non-ideological materials ––that actually have credibility––free, and get around all these textbook wars in Texas or California and other places, free and available to the world. So that’s one way of getting -- and then know your states, know when they joined the union and where they are on a map, and just basic stuff like that because that’s what we as Americans have in common, our Americanness.

 

Greg Lukianoff:  I did want to say that FIRE, actually, has a high school curriculum. When everything was shutting down last year, we sped it up to make sure it was available to teachers as they were going to go remote, and it was very well downloaded. It’s about, obviously, First Amendment, Constitutional history, that kind of stuff. And since we’re doing more K-12 outreach, we get to go to these conferences where there is The 1619 Project, where there is knowing our history, knowing ourselves, the Southern Poverty Law Center, the Howard Zinn Center. And at the moment, we’re not the cool kids at those places, but I think with Professor Amar’s history, that could be really exciting and really bring some people in. And, yeah. And know your presidents. I read a short book about Chester A.  Arthur, and I learned so much about that period of time. I recommend it to all of you.

 

Hon. Kyle Duncan:  Please join me in --

 

[CROSSTALK]

 

Kimberly Hermann:   I was just going to make a quick plug for the Woodson Center. My friend, Ian Rowe, out there, he frequently will come out and talk --

 

Hon. Kyle Duncan:  All right.

 

Kimberly Hermann:  -- about the 1776 Unites curriculum that they have out, which is absolutely phenomenal. It’s a really good counter-narrative to what CRT is teaching.

 

Hon. Kyle Duncan:  Please join me in thanking the panel.

 

 

 

 

 

 

 

 

 

 

 

 

 

     

 

     

 

11:30 a.m. - 1:45 p.m.
"Cancel Culture" Comes to Financial Services

2021 National Lawyers Convention

Topics: Culture • Financial Services
East Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". This panel discussed "Cancel Culture Comes to Financial Services."

Under the Obama Administration’s Operation Choke Point initiative bank regulators sought to de-bank various legal industries such as payday lenders, firearms dealers, and home-based charities. Today, banks have increasingly acted on their own initiative to effectively operate a new voluntary form of Operation Choke Point. In January 2021, Florida’s Bank United closed Donald Trump’s personal bank account. Other banks have cut off others seemingly because of political views and have been pressured by activists to cut off funding to politically-disfavored industries, religious organizations, and others, effectively a new voluntary form of Operation Choke Point.

Is this voluntary activity the free exercise of business judgment, or is it inappropriate response to external pressure?  What kind of unintended consequences might occur where banks use their business to punish based on viewpoint? Could this behavior make banks into utilities subject to more financial regulation or even government actors carrying out government directives? What are the appropriate responses to "cancel culture" or "choke point" tactics in banking? What steps are appropriate either through governmental or private actions?

Featuring:

  • Prof. Christopher Peterson, John J. Flynn Endowed Professor of Law, University of Utah S.J. Quinney College of Law
  • Mr. Paul Watkins, Managing Director, Patomak Global Partners
  • Prof. Todd J. Zywicki, George Mason University Foundation Professor of Law, Antonin Scalia Law School, George Mason University; Senior Fellow, Cato Institute
  • Moderator: Hon. Eric Murphy, U.S. Court of Appeals, Sixth Circuit

Speakers

Event Transcript

Hon. Eric Murphy:  Hello. I think we’re going to get started if everybody could take their seats. First, a few housekeeping introductions. The panel discussion today, “Cancel Culture Comes to Financial Services,” was organized by The Federalist Society’s Financial Services Practice Group and its chair, Wayne Abernathy. He was planning on attending to introduce the session, but unfortunately, he had a private matter to attend to.

 

With that, I think I’ll introduce the topic briefly first and then introduce our distinguished panel of speakers. As for the topic, “Cancel Culture Comes to Financial Services,” I thought as a generalist judge, I’m not all that sophisticated in financial services or banking, but I would try to give just my view of the debate and the dimensions of the debate. This is a debate that a lot of these panels in this National Lawyers Conference have focused on—the debate between public power and private power. The showcase panel from just nine o' clock today was with respect to media platforms, and I think it’s the same type of perspective that is going on here. And the perspective is, what should we do with undue public power? What should we do with undue private power? Is it really undue? I see it as a dichotomy between three types of interest.

 

The first interest in this consumer or financial perspective is, “Hey, sometimes individuals are using banking services to commit crimes or other things that we think are inappropriate, and so perhaps the government—the federal government or the states—should come in and tell banks and other financial institutions that they need to really police this and stop providing their services to those who, say, are committing fraud against hapless consumers.” And so, that would be a perspective of government needs to intervene in the banking industry to prevent things that we think are harmful to society.

 

If you equated this with the debate we just had on the media platforms, it would be the analogy of, “Hey, should we regulate Facebook to get off speech that the government thinks is harmful, whether it’s true threats or other types?” And we can have debates about what is the speech that qualifies as harmful. But it’s the same type of debate that the government should intervene to prevent harms that we think financial institutions are helping to facilitate. So that’s one perspective. And on that perspective, I think we might talk a little bit about Operation Choke Point, but that was the perspective of some in the government when they went after these different types of industries.

 

The second perspective is that, set aside government, private banks have market power. They have significant abilities to affect people’s lives, and they are doing so. They’re depriving industries of credit on their own, disfavored industries politically, politically unpopular industries, and this could be a use of private power that we deem problematic. To give a perspective -- so the last session was, again, about media platforms and de-platforming individuals from speaking. While that may -- the impact there is obvious with respect to the First Amendment. But when it comes to ordinary Americans or the ordinary person, this might be much more significant. I’ve never used Facebook or Twitter, for instance, but if somebody took away my ability to bank, that would really seriously affect my life, but not in a way that if somebody told me I couldn't use Twitter. I’d be like, “Okay, that’s a good thing, actually.”

 

Although that one might be more high-profile, this kind of discrimination could affect people’s lives in a more significant way, small businesses or individuals. And so, then maybe we should be thinking about the government intervening from the opposite perspective, to ensure equal treatment or fair treatment of all individuals in making sure that banks and other financial institutions aren’t depriving people of the access to credit that they need to perform their jobs or whatever their business is on grounds that we think are bad—like political grounds if you’re depriving them because you don’t agree with their viewpoint. And so, that would be kind of the fair access principle, that treating businesses just like we treat media platforms. Should they be treated as common carriers? Maybe these banks should be treated as common carriers to have an equal access, and the government should intervene from that perspective.

 

And then the third and final perspective is more of a libertarian perspective. Why do we think that government should be involved at all? Why not just allow the market to take care of things? If we think banks are a completive industry, if you get deprived somewhere, somebody will come in to fill the void because there’s enough consumer demand. And so, the government shouldn't really be involved at all in either perspective. So I think that’s the range of the debate. And we’ll talk about this and other issues, but that’s the range of the debate as I see it.

 

And our distinguished group of panelists that are going to have this debate, I will briefly introduce them. Paul Watkins will speak first. He is the Managing Director at Patomak Global Partners, where he focuses on state and federal regulatory issues surrounding financial technology. He has oversight responsibilities over payments, consumer and small business lending, open banking, data privacy, and digital assets. He joined Patomak following a stint with the Consumer Financial Protection Bureau, where he founded the Office of Innovation and was the director’s primary advisor on innovation. Perhaps, most importantly, from my perspective, before joining the CFPB, Paul worked in the Attorney General’s office for Arizona, and I worked with him briefly when I was in the Ohio Attorney General’s Office. In Arizona, Paul managed the state’s enforcement of consumer protection, data privacy, antitrust, and civil rights laws. Before his public service with the state, he spent some time in private practice and for a nonprofit and clerked for Judge Dennis Shedd on the Fourth Circuit Court of Appeals.

 

The next speaker will be Professor Todd Zywicki. Todd Zywicki is the George Mason University Foundation Professor of Law at George Mason’s Antonin Scalia Law School and a senior fellow at the Cato Institute’s Center for Monetary and Financial Alternatives. From 2020 to 2021, Todd served as chair of the Consumer Financial Protection Bureau Taskforce on Federal Consumer Financial Law. He also served earlier as the Director of the Office of Policy Planning at the Federal Trade Commission. He is a senior fellow of the F.A. Hayek Program for the Advanced Study of Politics, Philosophy, and Economics at George Mason University. And before his career as a law professor, he served some time in private practice and clerked for Judge Jerry E. Smith of the U.S. Court of Appeals for the Fifth Circuit, who we all know well.

 

And last but not least, our third speaker, Chris Peterson. Chris Peterson is the John J. Flynn Endowed Professor of Law at the University of Utah’s S.J. Quinney College of Law, where he teaches contracts, commercial law, and consumer protection courses. And like our other two speakers, from 2012 to 2016, he served some time in the CFPB as the Special Advisor in the Office of the Director -- at the CFPB in the office. He also served in the Office of Legal Policy for Personnel and Readiness in the United States Department of Defense and as Senior Counsel for Enforcement Policy and Strategy in the CFPB’s Office of Enforcement. And before his academic career, Professor Peterson also spent some time at a nonprofit, and he clerked for Judge Wade Brorby of the U.S. Court of Appeals for the Tenth Circuit. So with that, I think Paul Watkins will begin.

 

Paul Watkins:  Well, thank you so much. Thank you, Judge. And it’s wonderful to be here at FedSoc. Now, if you look at your program, you will notice you are supposed to be hearing from the Honorable Paul S. Atkins, the former SCC Commissioner, who unfortunately was not able to be with us. Now, you have Paul Watkins.

 

[Laughter]

 

So that was a very nice introduction. But, Judge, I think it’s very clear the reason I’m on this panel is because I had the most similar name.

 

Now, at this conference each year, we’re surrounded by likenesses of James Madison. So I want to pick up on some of the themes that you mentioned in your intro by referencing a 1792 essay that James Madison wrote on property. Now, before I read this quote, in accordance with the best practices of the National Archives, I need to note that this is a historical document. Some of you may find it triggering.

 

[Laughter]

 

Here’s what the document says. This is his famous essay where he talks about how you have a right to property. You also have property in your rights. And here’s his sentence. Madison says, “Where an excess of power prevails, property of no sort is duly respected. No man is safe in his opinions, his person, his faculties, or his possessions.”

 

And I would assert to you as a theme what we’re talking about here is an excess of power. We’re talking about an excess of government power, or we’re talking about an excess of market power. And that is the cause of the issues that we have when we’re talking about cancel culture in financial services. Now what I want to do is talk a little bit historically about examples of how this has been manifested in financial services, talk about how we might see similar phenomena today, and then briefly touch on how I believe technology might provide a way forward.

 

So one of the first iterations of cancel culture in financial services, as already mentioned, and of course that’s Operation Choke Point during the Obama administration. In fact, I think it precedes cancel culture. So maybe we should call this chokepoint culture. And Chokepoint really highlighted a traditional supervisory concept in banking regulation, which is reputational risk. And it makes sense to supervise for reputational risk because, for example, if you have a bank and you know that it’s run by folks that embezzle or are otherwise unethical, you might pull your money out. Other people could do the same, and this could cause a run on that bank, instability to the system.

 

What was creative, I think, about Operation Choke Point is that they applied this sort of framework to the banks’ customers and said, “Hey, if people only knew that you were banking gun manufacturers, payday lenders --” similar effect to, maybe, your own personal reputation—if you were an embezzler, people could pull their money out, cause a run. “We’re going to prevent you from harming yourself, just don’t bank with these people.” You can see the attractiveness of this idea from a policy perspective. It’s pretty hard to pass a law to outlaw payday industry, restrict firearms, a lot easier to do this through bank supervision. So if you have a policy goal, I think this is a concept that probably will always be around.

 

So what are prospects for seeing something similar today in financial services? And here, I think you need to look at some of the big themes that are being introduced in financial services, some of which we’ve been talking about at this conference. One of them is ESG, which, as you know, stands for Environment, Social, and Governance. And here I’m just going to talk about the E, the Environmental, and within the E, talk about climate change, which is being incorporated into supervisory frameworks by a number of institutions. You can see this from the international community, from Europe, from something called the Sustainable Finance Disclosure Regulation, from the Feds—FSOC recently came out with a report on climate-related financial risk—and from some of the states that have put out documents on climate change and financial risk.

 

And when you look at these documents, you see some familiar themes. You see our old friend, reputational risk. “What if people knew you were lending to fossil fuel companies? They might pull out their money, might cause a run. We’ll stop you from harming yourself.” And there’s also a big theme that is based around this prediction of the valuation of assets. We’ve all agreed—the whole world’s agreed under the Paris Agreement—we’re going to net zero. That means we’re going to have all these stranded assets. They’re not going to be worth anything. You better start writing them down. You better incorporate this into your underwriting, into your capital reserve requirements. This, of course, increases the cost of capital for fossil fuel companies. But if you look at these documents, they say you can’t just limit this perspective to fossil fuels; you have to look at industries where fossil fuels are significant inputs. So you have to look at transportation. You have to look at manufacturing—happens to be a lot of blue-collar-based industries. But anyway, that sort of increasing the cost of capital, making it harder to access services, I think, is probably one of the most likely manifestations that we will see going forward.

 

And so, there we’ve talked about excess power in the government. Turn to the private sector. When you look at financial services, many of these markets are highly concentrated. I’ll pick mutual funds as an example. Three large mutual funds, BlackRock, State Street, Vanguard, are the largest investors in 90 percent of the S&P 500, own about 25 percent of each company, and these folks are forming agreements, various agreements, around this space, detailing activities that they seek to take that could have a similar effect, again, in increasing the cost of capital for various industries.

 

So, where do we go from here? And I think you’ll hear some ideas thrown out on the panel as potential solutions. One that I want to highlight is that I think we’re in this interesting historical moment where intermediaries are very powerful. We talked about tech. We’re in this Web 2.0 moment, where internet platforms have a lot of clout. Financial intermediaries have a lot of clout. I don’t think we’re going to stay here. There’s a lot of technology coming into the market that is empowering the consumer over the platform, over the intermediary. I think when you look at blockchain technology, when you looked at cryptocurrency, there is a business model based on blockchain that can replace just about every financial intermediary.

 

For example, if you look at the way we make payments now, you take your credit card; you have an issuing bank; you have a merchant bank; you have a payment processor; you have a payment gateway; you have a card network. Any of these points, if they decide to be activists, can mess up that credit card transaction. And then you have the government supervising and regulating each of these intermediaries. Well, now I can send money from my wallet to Todd’s wallet. You all can look at your phone—I’m talking about a virtual wallet here; I can send money from a wallet on my phone to Todd’s wallet—you all can look at your phones. You can confirm that that transaction happened fast, cheap, many fewer intermediaries, much less need, potentially, for government involvement, many benefits for the consumer and small businesses in lower fees, reduced market concentration. These are all things that I think have significant support throughout the spectrum.

 

And so, I hope that as we’re thinking about these policies, we’re also working to accelerate technology that can take us past this particular historical moment when we are so dependent on intermediaries, and move us into a world that I think is more of a Madisonian world, where this power has not been concentrated, and instead, it has been distributed to consumers and users. Thank you very much.

 

Prof. Todd J. Zywicki:  I like that part where you said you were going to send money to my wallet, so I’ll settle up with you later. So I’m going to kind of be a little bit madcap and throw out a bunch of ideas because I think there’s a lot going on here. And banking, I think it’s a particularly good case study of what we’re talking about this week along, as the judge mentioned -- along with the internet and some other things. I’m going to circle back to that later. But I’m glad it’s getting attention. You may have noticed last night at the banquet, Senator Cotton made a passing reference to de-banking as well.

 

And what we’re seeing now is something that is pretty profound, which is -- I don’t know if you know this, but after January 6th, the next day, Donald Trump’s personal bank account was canceled by his personal bank in Florida. And I assume somebody else took him on as a customer, but he had a significant savings account, checking account, and his personal account. Then he was just canceled. Then there’s also reports of people who are canceled because they’re considered white supremacists. It’s easy to imagine, just like we see in the internet and other eras, where this could be extended to charities, for example, that don’t believe in whatever the -- same-sex marriage or whatever the case might be, individuals that they don’t like. And Paul specifically mentioned various industries.

 

For example, the nominee to be the new Control of the Currency came out this week. And one of our recent law review articles said she thinks that she’s the banking system to bankrupt the fossil fuel’s industry. And this is, -- boy, why do they call it Operation Choke Point? Because bank accounts, financial services -- they called it that because they were going to choke off the air they need to breathe. And so, if payday lenders can’t get a bank account to cash your check, then you can’t, basically, have a payday lender. If you’re a firearms dealer, if you can’t get a bank account, then you can’t really have a business. And this idea of politics and banking being entangled is an old idea. It goes way back, and it’s kind of ubiquitous in the world. But it’s really kind of accelerated in recent years.

 

And so, Paul started the story with Operation Choke Point. But I would argue the story actually goes back to the financial crisis, which is when, basically, all the big banks took our money, and they made all their crazy loans, and we bailed them out. But when they did that, they basically got in bed with the government. And there’s a lot of stories that come out with this, right? In fact, the government owned huge stakes in some of these, like Ally Financial. And so, that basically put them under the government’s thumb, which made it very easy to force something like Operation Choke Point to come through. And they’re basically still paying, I think, the ransom on those bailouts that they got. And so, now what we see is this development where it’s not just the government through Operation Choke Point, but this confluence of activists, the government, and all these other sorts of cancel culture-type pressures coming together to potentially use this leverage as a way of getting at individuals, even stifling their free speech, potentially, and the like.

 

And so, the question is, to me, what do we do about this? Right? Is this a problem, or should we do something else about it? And so, I’m going to talk about just a couple ideas here that I think are worth exploring in the larger thought for those of us in the conservative-libertarian legal movement. And one of the things I want to think about is, are our old tools—the way we thought about this traditionally—up to the job of dealing with these new threats of public/private power? And I think financial services is a particularly good way of looking at this because this is entanglement is so deep. And what goes on in financial services is not anything that we would recognize as any real system of regulation. It’s basically the system of supervision. Like the whole Operation Choke Point, it was really hard even to establish that was going on because it was basically done through this supervisory activity.

 

It’s not like they promulgated a rule and said, “We’re going to try to put payday lenders out of business.” It was just basically done through this sort of network of these examiners, and these supervisors started carrying out orders. And it took years for it to come out in FOIA and all this sort of stuff. All the payday lenders, for example, knew was their bank accounts were getting canceled. And they couldn't get a straight answer as to why it was. So banking has this particularly nontransparent way in which regulation is conducted. And in that sense, banking is kind of the apotheosis of the regulatory state—this way in which regulation is entwined with everything with public and private power.

 

The second thing that’s important about that is there are very high barriers to entry in banking, and they can use this as leverage. And so, Paul suggested the end-run around it would be basically to go around banks, to do cryptocurrency and that sort of thing, which I think we’ll come back to. But the reality is, what these payday lenders, for example, found was if they got their banks canceled at one place, odds are they weren’t going to get a bank account somewhere else, that basically, the word had gone out that these guys were toxic. And this isn’t a market in which entry is easy. Right? You basically have to get permission from those same regulators to be able to enter a market. And they’ve kind of made it clear what the rules of the road are going to be if you’re going to be able to enter the market. So it would have to actually go around the market then.

 

So what we have here, I think, is how do we think about these questions in the world of the second-best. Right? Once we have this entanglement of regulation with this private power, barriers to entry where people can’t just come and offer an alternative product, how should we be thinking about this? And I think there’s two ideas here that are worth grappling with, which is, traditionally, we thought in a very binary distinction between public and private. Right? Even this talks about public and private power. Right? That is an idea that has served us very well for a very long time, which is that there is public action that requires certain rules on it, and then there’s private action, which we think of as being completely subject to different rules. And so, the judge mentioned the libertarian view is, the market will sort this out. The market will take care of this. Right?

 

But it’s not clear to me that that is a viable solution in a situation like this. And if you think about the internet as well, what if you really do have antitrust issues? What if you really do have substantial barriers to entry? What they said was, “If you don’t like Twitter, start your own Twitter.” So Parler did, and you see what happened to them. Right? And so, I think in terms of public/private distinction, we’re in a realm here in which it’s starting to look like, once you put the regulatory state into the mix, it’s more of a continuum than it is an either/or. Over on one side, you might have banking. And so, over at the other side, you might have something like Uber and Lyft. Right? But of course, what do see in there? That is purely market activity, kind of pure freedom of contract. But of course, what’s happening? Now, basically, the left wants to turn all those people into employees and bring them under the umbrella of the regulatory state. And to your point, Paul, that’s my impression of what Rashida Tlaib has made sounds like this, which is they want to take all of this unregulated internet stuff and suck it into the banks so that then they can control it. Right? They want to suck everything into the regulatory systems precisely to be able to do this and use this clout.

 

I think the second question it leads me to think about is whether or not our traditional way of thinking about legal solutions through Chevron deference and Seminole Rock and all that stuff you administrative law people do that causes my eyes to glaze over, whether or not that’s -- is that the right way to think about dealing with the regulatory state when the regulatory state now is what Wayne Crews calls “a lot of this regulatory dark matter,” where it’s things that they’re just evading—notice-and-comment rulemaking? And look, we’re going to just have one of the most profound changes to American society—this new OSHA rule. Right? And they’re not going to do that through standard notice-and-comment rulemaking. Right? And who knows what’s going on behind the scenes? But can we really look and think in terms of deference doctrines and these sort of generic, dry legal concepts in getting at these kinds of questions once you really have the regulatory state and leveraging this private power through the regulatory state in a way that can have real consequences for people.

 

And so, this leads me to something like, what’s a middle solution? And one of the last things that Brian Brooks did when he was—I think it was the last thing he issued when he was Control of the Currency—was he issued a rule called the Fair Access Rule. And basically, it’s a rule that doesn’t make sense in the world of the first best, where you just leave it up to markets and let banks bank whoever they want to for whatever reason they want to. But I asked the question whether it makes sense in the world of the second-best. And the Fair Access Rule basically says—it’s a very blunt rule—but it basically said, in deciding whether to bank somebody, you have to basically only base it on financial variables, objective, clear, transparent financial variables, not all this other stuff, reputation, risk—not it’ll be a reputation risk because this person did a tweet that made some people think that they’re a white supremacist, or they were seen in the Capitol on January 6th or whatever the case may be. But basically, you can’t take care of that. You can only look at people’s objective financial records.

 

Now let me make it very clear, that sends a chill up my spine to be thinking in those terms. Right? It is very discomforting to me to think about the idea of whether or not the response to this might be something like the Fair Access Rule, something that basically requires the government to do something proactive in order to provide -- to overcome these other problems. I think the regulatory state is here to stay. I think it’s basically a variable here where, are we in the world of the second-best, or can we escape the world of the second-best? And I think this extends into other ideas. So think about internet regulation. Richard Epstein has this idea that’s essentially equivalent to the Fair Access Rule. Which it’s not; it’s just private. Not do something like Senator Holly’s proposed where basically there’d be comprehensive government regulation, but basically, a common carrier rule that required nondiscrimination with respect to people.

 

Think about areas such as employment law. Right? Employment law is an area now where we’re very wedded -- I suspect the people in this room intuitively are wedded to the idea of freedom of contract and employment of will. But employment at will today basically applies only to straight, white men under the age of 40, which basically means you can fire any straight, white man under the age of 40 at any time that you want to, and everybody else is under a different employment law regime. Right? Is that where we want to plant the flag with respect to that principle in the world of the second-best.

 

And so, I fear, as I mentioned—I’ll close on this—we could come up with market alternatives. We could come up with the ideas that Paul was saying. But I just sense the regulatory state just gobbles everything in its view. And we can set out this frontier, but I think it’s going to be fleeting and potentially -- and not end up being the kind of transformative-type thing it could be, as we’ve seen in other areas such as education and whatnot.

 

Hon. Eric Murphy:  Thank you. Okay. Chris?

 

Prof. Christopher Peterson:  Well, hi, everybody. I’m Chris Peterson. It’s nice to meet you; nice to be here. Thank you so much to The Federalist Society for the invitation to be, I guess, a cultural ambassador coming from the other side of the political aisle. I’m, I guess, the token Democrat on the panel. And thank you so much to Judge Murphy for hosting us today. It’s an honor to be here. I’m happy to engage in a constructive dialogue with The Federalist Society. When I told my wife that I was going to go give a talk at The Federalist Society, she kind of looked at me and said, “You sure?” But one of the things that Judge Murphy did not mention is that I was the Democratic Party’s candidate for governor of Utah, my home state, in the last election cycle. This is an easy room for me. It’s not that bad. I’ll be fine.

 

[Laughter]

 

So, anyway, I’m going to try to persuade you. I mean, the topic of our discussion today is, cancel culture comes to banking. And I’m going to try to persuade you that, in fact, cancel culture has not come to banking. I guess I’m going to first talk about -- I guess start out with the Choke Point thing that some of you are probably familiar with that we’ve been alluding to. I was in the Obama administration at the Consumer Financial Protection Bureau when this was allegedly happening. And so, I have some, sort of a bit of a ringside seat to that and can tell you my view of what that was about and then also some of the other risky products that are filtering through the payment systems in our banking industry. And then I’m going to talk about what -- set out a framer for how we screen out those risky payments and then make just one last cultural point that I hope you’ll indulge me on.

 

All right. So first off, what was this Choke Point thing? All right. So back during the Obama administration, everybody presumably is familiar that we have, in some areas of our country, extremely, ultra-high interest rate loans. The average interest rates on so-called payday loans is about 400 percent if you get them from a storefront. And if you get them online, typically they’re more in the 600 percent range. And they often compound for very long durations. My good friend Todd and I disagree about whether or not that’s a good idea and whether or not we should have old-fashioned usury laws. I say, yes—I’m on Adam Smith’s side. Todd says, no—he’s on Jeremy Bentham’s side. And legislatures all across the country have been battling this out as part of the grand pageant of American democracy for 300, 200 years now.

 

In some states, Todd’s side has won. My home state, we have no interest rate caps, have at it. We’re arresting people that don’t pay their payday loans right now in my home state—thousands of them every year. And in other states, like along the Eastern Seaboard, Arkansas, North Carolina, Montana, Colorado, it’s not legal. You can’t make those high-interest-rate loans. In some states, it’s even a felony, like in New York. Now, across the country, there were online lenders on the internet that were trying to have a national market and sell these loans through creative methods, even in states where it was illegal. And they had some creative theories why that was not illegal, and those theories turned out to not be true. And several of the leading CEOs of those companies are currently in the federal penitentiary, having been prosecuted for racketeering.

 

But what do the banking regulators do when online high-cost lenders that are making loans at loan-shark prices that are illegal under state law, in any event in some states, legal in some states if you have the right license and are following those licensing rules, which they generally were not, and then totally, probably, legal in some states? What do you do with that? Well, I think the response was, “Look, for financial institutions and payment processors that are processing those payments, you need to be careful in screening out whether or not you’re facilitating crimes in the borrower’s home state.” It’s not okay to make a triple-digit interest rate loan in the state of New York where that’s a felony. But in Utah, probably have at it, take advantage of those poor people. Thank you for the chuckle, whoever that was out there.

 

Audience Member:  -- Utah.

 

Prof. Christopher Peterson:  Yeah. All right. [Laughter] But the challenge was that it was really difficult to tell which companies have licenses and which companies don’t and which companies are doing it in a legal way. And there was also, across all of that, a cloud of legal uncertainty. And that wasn’t the only market where we were facing challenges like that for the financial services industry and for merchants. Some of the other examples were drug sales. So The Choke Point issue—the online payday loan issue—widely varying state law, some uncertainty about that state law, and no federal restrictions. In the drug sale market, some types of drugs, completely illegal everywhere. For marijuana, illegal under federal law across the entire country and also a serious crime under federal law. And then, in some states, they’ve decriminalized it and made it legal, and so it’s very complicated whether or not a bank can participate in that. Can you engage in processing payments for marijuana when that’s likely a crime under federal law still?

 

And then the other examples were -- another one of the big problem areas is online—I don’t even like talking about it—but online pornography and sex stuff. Right? I mean, probably pretty similar laws all across the country. There’s not very much variation locally. But there’s great difficulty in determining whether or not any particular transaction is illegal because there might be a child involved, or there might be somebody who is coercing somebody that’s participating in the activity under duress—just offscreen or whatever, there’s somebody with a gun or some pimp or some horrible person who’s creating a victim in that transaction. Are we just going to have the financial services industry just turn a blind eye to this terrible victimization?

 

Then, two more I’ll mention. The gun sales, which I don’t actually think was that big of an issue, but the online payday lenders who were running a big lobbying blitz in Congress knew that if they brought guns into it and sort of drummed something up about a Second Amendment issue that there’d be a huge powerful wave of political support for creating, for perpetuating, the notion that liberals are trying to take away your ability to get guns through the banking system. I think that was almost all cosmetic and was smokescreen. But in any event, it is true that there is widely varying gun regulation across the country.

 

In some states, some cities, you can purchase it. In other states, you can’t. Back to the same example, in my home state, have at it. Carry your six shooter on your side and just try not to shoot anybody. And obviously, in Chicago or New York, very different rules. And then at the federal level, some certainty for some technical statutory stuff, but the constitutional questions are -- who knows. I mean, the Supreme Court never grants cert to any of the constitutional questions, so nobody knows what’s legal and what’s not. So it may be the case that some financial institutions are a little bit worried about potential liability for violating local gun control ordinances.

 

The last example that we’ve heard out, and I think is the most plausible one for the cancel culture narrative in the sense that some financial institutions are becoming reluctant to bank with the fossil fuel industry -- and here, unlike these other examples, that doesn’t seem to be a pocket of illegal activity that’s generating some of the screening behavior. But giving charitable interpretation to the other side of that, there’s nothing that’s illegal that’s happening, but there is something that’s horrifying at the far end of that. And I know that some people in this room probably think that climate change is a hoax, but some of us believe that the science seems to be indicating that there’s going to be massive sea level rise, worldwide global famines, refugees.

 

And it’s not just bleeding-heart Democratic candidate, lost cause, governor people like me. It’s also the Pentagon, where I used to work, views this as one of the world’s most important national security threats because as we start to displace lots of people -- I mean, it’s part of what happened in Syria. There was a big climate-change-connected famine that caused massive dislocation of people from the provinces that became vulnerable to being co-opted by religious extremists and injected instability into the Syrian government’s regime. So look, that being said, I mean we got to do it through laws. I’m even a little bit uncomfortable saying we’re going to screen out fossil fuel payments until we come up with some political compromises about that.

 

But that being said, for each of those areas, there are legitimate underlying complicated legal concerns that are justifying trying to screen out illegal behavior from the banking industry. Now, what is this going to prevent us from having this snowball effect of all of a sudden just regular people off the street are going to have their bank accounts canceled? Also, I will say, it’s entirely inappropriate to cancel President Trump’s bank account. I mean, there are examples of inappropriate behavior. We got to do things with laws. But I do think that -- and here’s my core point -- it seems to me that merchants should bear the marginal costs of banks screening illegal activity out of our payment processing and banking system.

 

So if you as a merchant are engaged in a business where it’s difficult to signal to your payment processor whether or not you’re engaging in illegal activity, you should have to pay a risk-adjusted higher freight for getting your payments processed through our system. So if you look like you might, just maybe, can’t tell for sure, be an online sex trafficker, you’re going to have to pay a little higher price to get your payments processed. If you can’t tell whether or not that online payday lender has a license and is only making loans into states where it’s legally permissible because you have to a whole bunch of specialized underwriting to figure out whether or not that’s the case, you should have to pay a higher price.

 

Now, some banks and payment processors don’t want to engage in that process because coming up with granular risk-based pricing distinctions in a payment processing platform is pretty complicated. It’s not that easy. It requires specialization. And so, some banks made strategic decisions that we’re going to go in a different direction with our business. And that’s, in my view, a legitimate thing to do. So I think that that’s essentially what was going on, and I also think that’s probably the right thing to do. And there were specialized payment processors that started to develop that are niche-based processors that go and service those markets. There were very few legitimate payday loan companies that didn't, after a period of restructuring, find a payment processor that was perfectly capable of processing their payments for them. It provided that they were not the same types of companies that ended up with their CEOs in the federal penitentiary.

 

Well, the last thing I’ll point out is that—and I say this with just a lot of respect and love—on both sides of -- I mean it. I mean, I’m from Utah. Everybody, all my family, they’re Republicans.

 

[Laughter]

 

I mean, I’m like the black sheep. I got a bleeding heart. I’m a sensitive guy. I say this with a lot of affection and love. Right now, in our society, we have people—groups—that are rallying around political brands and talking points. And when we do that, we are often building support for our own careers and our own ambitions by coming together in groups. But what’s happening is we are tearing at the fabric of our society with these talking points.

 

Saying that this is about cancel culture as opposed to marginal risk-based pricing on payment processing, it’s salient. It’ll get people to come into the room at The Federalist Society, and it’ll make us all look like we’re talking about edgy issues. But the reality is, I think, a lot more bland than that. And the price of it is that it’s going to make it a lot harder for us, for all of us, to get together and talk about things and be civil, have civic virtue, have political compromise, and give one another the grace to continue to have the republic that the founding fathers bequeathed to us. So I would encourage us to be a little bit more careful about saying that things are cancel culture, when maybe there are other plausible explanations for what was really going on. Thank you so much.

 

Hon. Eric Murphy:  Thank you. Okay. So I’m going to ask several questions myself, and then we’ll open it up to audience questions for the last half hour or so. I guess I’d like to start to see if there’s any room for agreement with respect to whether -- when it’s appropriate for the government to intervene, to coerce banks, perhaps, to pay attention to their customers. And my question is basically, is the divide -- I guess, Paul and Todd, the question for you would be, are you okay with the government suggesting to banks that they need to monitor things that we would all agree are illegal? So in the states where it was payday lending, and it was clearly illegal, is it appropriate for the government to intervene there and to try to kind of either encourage or somehow coerce banks to not give to the payday lenders who are engaged in illegal activity?

 

And then the follow-up for Chris -- you may have already kind of conceded this, but the problematic nature of using these types of choke points, or whatever you want to call them, it seems to me, is that democratically, you can’t get the law passed to outlaw the underlying conduct. So if it is the payday lending in the states where it is legal, maybe there’s licensing issues. But if it is actually legal, why would we try to discourage the legal activity through banking rather -- it seems like it’s a back end around democracy in some respects. So I’m just curious to get -- the sticking point, maybe, is the legality versus the illegality of the underlying conduct.

 

Prof. Todd J. Zywicki:  Yeah. So I’m going to make very clear that it is not only legitimate but essential, I think, for financial regulators to monitor against illegal activity, the clearly illegal activity that Chris was describing. Where the problem comes in, and where I get nervous, is when they go beyond clearly illegal activity and start talking about the stuff like reputation risk. And that’s what comes out and sort of what the supervisors were telling the banks and this sort of nontransparent stuff. And so, they were basically like, “Well, you have a reputation risk when you provide bank accounts to payday lenders.” And basically, the question is, “Well, why?” And it’s, “Well, because we in this administration think they have a bad reputation. And so, as a result, we’re going to tell everybody they have a bad reputation, and if you bank them, then they have a bad -- then you’re banking people with a bad reputation.”

 

And so, I completely agree with the idea of using the financial system and that it’s appropriate to keep banks from facilitating illegal activity, especially -- and when you think about how that’s done, I mean, I think the anti-money laundering laws, for example, are a disaster. Right? I mean, I think there’s a pretty widespread sense that the cost of the anti-money laundering laws we have today exceed the benefits. Right? But I think that’s legitimate. And that’s where -- or that end goal -- but that’s where I get nervous is when you start allowing these more subjective things into the mix and especially when the subjective things are basically this nudge, nudge, wink, wink sort of stuff that financial regulators use when they lean on people or, as we see, when politicians lean on the social media platforms now, for example, to go after what they consider to be misinformation at the not-so-veiled-threat of taking enforcement action against them and that sort of thing. And that’s where I start having heartburn.

 

Paul Watkins:  And I would just add that maybe a potential way forward here, if there are neutral principles that are being applied, then those should be published through legislation or rulemaking, and the institutions should be able to refer to them and the person enforcing them should be held accountable and there should be a mechanism outside of the agency that’s implementing that rulemaking. And I think the opacity of the process was a big part of the problem. I also think we do need to look seriously about whether this regulatory regime is cost-justified. There are significant costs for what we have. We catch less, a fraction of a percent, of the amount of illicit funding that occurs in money laundering. Is this really the best way to do it? So I do not think that we should rest on the assumption that the structure, as we have it today, is the most cost-effective way to regulate.

 

Prof. Christopher Peterson:  Yeah. Judge, I think your question for me was, “Why should we discourage illegal activity, and doesn’t that undermine democracy?” I think I actually am saying the exact opposite of that. I’m not saying that we should discourage legal activity. I’m saying that there was illegal activity and that it was difficult to determine from the payment processor or the originating depository financial institution, the banks’ perspective, whether or not that activity was legal or illegal. And the cost of making that decision was creating lag in the pricing and the willingness of the banking industry to be willing to take on some of those potentially legal, potentially illegal payments.

 

And so, I think what we need is more specialization in the payment processing industry where you have input firms that can tell the difference between the payday lender that’s making an illegal loan and the payday lender that’s making a legal loan. And then, the banks should use those as agents to distinguish between the two. And if that payment processor is faking it, is hiding some payments in there, they should have serious liability for committing fraud, not only that affected the bank itself, but also all of the victims of the illegal activity that are downstream in the payment processing network.

 

The challenges, I think -- a lot of the devil in the details of our disagreement here is not in what the basic rules should be. It’s in the words like “clearly” and “reasonable.” I agree that this can be expensive. I’m not saying that we should screen every conceivable illegal activity. It would be too hard. But what we need is reasonable screening, and we need some government incentives to ensure that the financial institutions have pressure to allocate that risk and create efficiencies in doing that reasonable screening behavior.

 

Hon. Eric Murphy:  Okay. So, Todd, you mentioned reputational risk and concerns about it. I guess I just wanted to follow up with -- kind of the same way, both sides. It seems like in today’s society where everything is so divisive, people buy stuff based on politics and whether a corporation is on this side or that side -- I suspect, Paul, maybe this is for you, too—kind of the corporate perspective. I assume when I was a practicing lawyer, they just wanted to stay out of it as much as they could. But if the reputational -- to the extent it is a real thing if you think that if you do business with an industry that’s really unpopular and that could actually affect your own business, why isn’t that kind of a legitimate thing to think about?

 

And then I guess, Chris, for you -- I guess the opposite of that is why isn’t that kind of concerning from a democracy’s perspective if this reputational risk is enough to allow the government – so climate change, I guess, is the one you already talked about. If doing business with oil and gas industry can be, itself, enough to allow them to kind of stop, even though everybody agrees that perfectly legal, that does seem quite intrusive.

 

Prof. Todd J. Zywicki:  Yeah. Well, I mean, we have people being fired. I mean, think about Brendan Eich and the whole Mozilla story from a while back. Right? He donated to the traditional marriage, anti-same-sex marriage proposition in California, and later was fired—was unable to be CEO of his company—for things he did in the democratic sphere -- people being fired for things they do on their private time and things that they say on Twitter or Facebook.

 

And we know there’s only one side being fired. Let’s not be naïve about this. Yeah, in theory, it could be both sides doing this, but in practice, we know that’s not happening. This is why we have speech codes on college campus, for example. In theory, yeah, it could always be turned against the left, for example. But everybody knows that the college administrators aren’t going to do that. It’s not a plausible threat. And so, this sort of tit for tat is not a plausible threat. But I think it really is. I think that Brendan Eich and I think everything we’ve seen is kind of the preview of what we could easily see with financial services. And I think, again -- the big thing I think is a problem here is that the barriers to entry are so high, that this is such a heavily regulated industry, that it’s not that easy to just start up another bank and bank everybody who doesn’t have a bank account.

 

But think about an example just recently. A bunch of the big bank CEOs testified in Congress. I think it was Senator Toomey. And they had all come out against the Georgia voting law. They all came out about it. And you can make an argument on whether it’s this, that, or the other. But he said to them -- he said, “Tell me one provision in the -- you all spoke out against it, so tell me one provision in the Georgia voting law that is problematic.” And they all kind of looked at each other. Of course, none of them had read the law. They all had an opinion on it, but none of them read the law.

 

And finally, one of these guys mumbles, “Well, we had some people in our company who ‘felt disenfranchised’ by it.” And so, he essentially said, “Even though I can’t tell you that there was any actual disenfranchise, some people felt disenfranchised as a result of this. And so, we felt it was important to speak out on this topic.” It doesn’t take much imagination to say that we’re going to have employees saying that “I’m offended that you give a bank account to the Alliance Defending Freedom,” or some other organization, just like they did with Brendan Eich. Right? And so, that seems to me to be where we’re headed inevitably is banks kowtowing to activists to start canceling people’s bank accounts. And I’m not just not sure what the response to that is, what --

 

[CROSSTALK]

 

Hon. Eric Murphy:  Well, do you think it’s legitimate for the banks to think, “Well, if we don’t kowtow, we’re going to lose business?”  Is that --

 

Prof. Todd J. Zywicki:  Yeah. In a competitive market, in the world of the first best, yeah, bank whoever you want to. If you don’t want to bank the undesirables, I’ll bank the undesirables. Right? But I just don’t think that’s the way the financial system works in this country. I just don’t think that’s the way the regulatory state works. And I think that Operation Choke Point was just a toe in the water, the way in the which -- not used to legitimate purposes, as Chris was saying, but used to basically circumvent the democratic process. And I think they’re talking about doing that with different industries now and that sort of thing.

 

And I just think that’s probably where this seems to inevitably be going. With the example of Trump getting his bank account canceled -- sort of an example of my fear as to where this could be heading and whether it’s the industries or individuals. I think that was the logic behind the Fair Access Rule, which is a very blunt instrument to deal with all these other dysfunctions, I think, in the regulatory state as it comes to financial services.

 

Hon. Eric Murphy:  Okay. Chris, I guess, just to follow up on that. I mean, reputational risk in some respects is about speech if you think you’re banking with people who are icky.

 

[Laughter]

 

So isn’t that problematic from a kind of just -- it may not be a First Amendment issue. But certainly, it’s not unprecedented, for instance, for a state to pass a law that says private employers can’t discriminate against their employees on the basis of their political activity. So it expanded Title Seven at the state level. Why shouldn't we be encouraging speech in our society for all the reasons you mentioned and to kind of not allow these type of reputational risks to lead to de-banking?

 

Prof. Christopher Peterson:  Yeah. Yeah. I mean, it’s interesting to hear you, Todd. I love getting together with you. I love doing these panels with you, but I honestly -- I think that you are overstating this quite a bit. I just do not see evidence that there is any real momentum for banks kowtowing to activists by just starting to cancel ordinary people off the street’s bank accounts. That’s not happening. I don’t think it’s inevitable. I think that you’ve got a well-organized group here who’s going to prevent that from happening. And I guess the notion that you say that people being fired, that that’s -- so it’s an employment law issue.

 

The notion that that’s only happening on the right -- I guess it’s different in your blue/purplish state than in my red state. But I worry about that quite a lot from the right. I am terrified of my Federalist Society students that I’m going to say something that’s a little too like “I kind of like vaccines,” and they’re going to -- there was just a high school teacher in a suburb just south of me. She got fired because she went on a little Trump rant, which is inappropriate. She shouldn't have done it. It does happen on the other side. And there are lots of, I think -- especially, it’s hard for me understand—I’m not the messenger on this—but there is real discrimination against women, minorities, people of color, LGBTQ people, and they do get excluded. I think probably less in the ivory halls, the ivory tower where we work, but across the country in the marketplace, there is discrimination against it. So it does go both ways. I think that’s not fair.

 

So look, I think we’re kind of getting a little bit far afield. I have nothing constructive to say about the Georgia voting law. I’m a banking lawyer, and I only know a little bit about Utah law, and only just enough to make sure that I complied with every single statutory requirement that is necessary to run a campaign for governor. That seems a bit far afield for me. Look, again, I’m just going to try to emphasize we need to keep talking to each other. We need to not base our policy and our arguments on anecdotes. It has to be data-driven, to the best that we can—it’s always hard to do that—and it needs to be focused on finding reasonable compromises that take the temperature down a little bit, so people don’t start getting killed in this country because, let me tell you, there is a real risk of that on, frankly—just to be candid—on your side of the political aisle.

 

I cannot overstate how terrifying it was for me when I started getting bomb threats. People said the most horrific things about me and my family on Facebook. If you don’t think that there’s some ugliness on your side of the political aisle, you are being naïve. It’s scary out there. We need to take the temperature down, everybody. All right. Thanks.

 

Prof. Todd J. Zywicki:  Could I just—and obviously, I agree with that. I’m sorry that happened, Chris. And I admire your courage in running for governor, especially your tenacity to talk about taking on an uphill battle.

 

[CROSSTALK]

 

Prof. Christopher Peterson:  Everybody needs a hobby, Todd.

 

Prof. Todd J. Zywicki:  There you go. There you go.

 

Prof. Christopher Peterson:  My wife told me that. She didn't know the hobby --

 

 Prof. Todd J. Zywicki:  That’s right.

 

Prof. Christopher Peterson:  -- what the hobby was going to be.

 

Prof. Todd J. Zywicki:  And so, I get the point. Maybe it’s overstated. But if you had told me five years ago that Twitter would permanently ban the person with the largest Twitter following in the history of the world, who created Twitter, essentially, made it what it is—Donald Trump—people would have said, “Oh, that’s crazy. No self-interested profit-maximizing business is going to ban Donald Trump. And YouTube’s not going to ban Donald Trump. It’d just like be crazy to think that businesses might do something that.” And so, I just don’t -- hopefully, it won’t turn out to be the case. And I agree that they should cut both ways, but I’m just not sanguine that that’s going to be the case in the direction where things are going.

 

And let me make clear, in the world of the first-best, I would say break down the barriers to competition—Fintech, industrial loan companies—give nonbanks access to the payment system, let Walmart have a bank charter, let all these people -- let a thousand flowers flourish. But that just doesn’t seem to be where we are at with this. That would be the world of the first-best. It would a robust, competitive market with easy entrance. And that’s where I’m going to continue to push for that, right? That’s what we talked about the CFPB. But in the meantime, in the world of the second-best, I’m trying to think about where it seems like we might be headed.

 

Paul Watkins:  Can I jump in there? Just on the concept of reputational risk, so I didn't live Operation Choke Point to the same extent as the panelists here. But you know, if you just look -- I’m just reading from a supervisory document right now. “Insurers should consider the negative publicity that may be triggered by insurers underwriting or investing in sectors perceived as contributing to climate change.” That’s reputational risk because you’re insuring somebody contributing to climate change. That’s government-focused activity. So, where’s the evidence for that? Where is the crisis? We’ve had a lot of financial crises. Todd knows them much better than I do. Where’s the financial crisis that was caused by reputational risk? Is this a real thing, or is this just an end-run because passing laws is really hard, and then you’re held accountable, and you might be voted out of office in two years?

 

And I just want to jump on the innovation point. And I agree with Todd that it’s frustrating how slow innovation is, especially in financial services. But we have to break this cycle where one group comes in, and the incumbents say, “Oh, these regulations are too onerous. Take the regulations off of us.” And this group says, “Well, we don’t like regulation. All right. We’ll take some of the regulations off you.” Then the next group comes in, and the incumbents say, “Hey, our competitors are unregulated. Why don’t you go regulate them?” And they say, “Well, we’re here to regulate, so we’ll go regulate them.”

 

We need a sustained, bipartisan consensus around innovation, around promoting the insurgents so that they can take away this market share. This is a real problem, and it’s across both parties. And it’s because, I think, the political benefits of helping people who do not have capital is not that great. But we need -- whether it’s a narrative or a movement or something, we have to attack that problem, or we’re never going to get past these issues. So I hope maybe this organization can be part of promoting that because it’s really a principal-based approach to some of these excess power issues.

 

Prof. Christopher Peterson:  Yeah. I mean, I was going to respond to Todd again. Professor, Twitter canceled the president because there was an insurrectionist mob that erected a gallows outside the Capitol and was going to try to hang the vice president and the speaker of the House—the first invasion of the Capitol building since the War of 1812. So it’s a bit of an extraordinary case. I’m not sure that that should be the data point that we should use to generalize about what we can anticipate for ordinary people and businesses across the country in terms of banking.

 

And I think that trying to draw a parallel between those two things, I think, is an extraordinary leap. That’s not the same thing. That’s exactly the kind of thing that I think -- the debate about that is what’s poisoning our democracy. And we don’t want to let that very complicated, very important, and frankly above my pay grade conflict to spill into something as simple as who gets access to originating depository financial institution payment processing. Thank you.

 

Prof. Todd J. Zywicki:  Just to clarify, all I was saying, that is an example of people -- when you argue that private market actors will be sufficiently motivated purely by the profit motive to not do these things, I think that’s an example that cuts against it. And it does happen, of course. And so, I didn't mean to any way imply that whatever that was about had anything to do with ordinary people. But we do know a lot of things have happened during – you know, all the misinformation—what they call the misinformation stuff—with respect to the pandemic and everything. Or Alex Berenson -- Bret Weinstein, who was demonetized by YouTube. Right? There’s a lot of people who’ve been permanently banned or disciplined by the speech platforms.

 

And it’s not at all out of the realm of my thought to basically say, “Well, somebody who’s promoting misinformation about COVID or something also shouldn't have a bank account.” Right? They shouldn't have a bank account where they can receive payments and that sort of thing. I hope it wouldn't happen. It seems crazy, but I thought it would be crazy that they would do a lot of the things that they’ve been doing in exercising private power on those internet platforms. And maybe banking’s just different, but it’s not obvious to me that it necessarily is so intrinsically different that I’m not nervous.

 

Hon. Eric Murphy:  Yeah. So I just wanted to follow up on that. I guess we were talking a little bit about the appropriate role of government and now switching more to the libertarian, and why wouldn't the market correct these things. And I forget the Australian -- [inaudible 01:17:39] destruction. Right? I mean, new industries come about, or new technologies come about, and then they kind of blow up or destroy the existing markets. We see that all the time. You mentioned taxi cabs. They were very regulated. They loved their monopolies. And then Uber and these other groups come along, and now it’s incredibly competitive. Cable was seen as a natural monopoly on the distribution of content. And now there’s all these different ways you can get your content. It’s amazing. So why wouldn't we think that the same type of development would happen? Why are these barriers of entry unique enough to require a fair access rule versus just thinking the free market will find a way?

 

Paul Watkins:  So there’s a debate right now. Innovation in financial services is the introduction of a form of digital assets called stable point, which have tremendous potential to transform payments, reduce costs for consumers—for businesses—because this item can be, again, transacted person-to-person without going through all the intermediaries that we talked about. So FSOC just put out a report about a week ago, saying, “Hey, you can only do this in the banking system, essentially.” Currently, there are state charters, non-depository, or other forms of regulation. Tone of the report -- this is going to be -- maybe some of these will be money market funds, but this needs to be insured bank deposits regulated by the FDIC, regulated by the fed.

 

There was not a lot of controversy around that. That is a very big deal if we care about this issue. If we care about this issue, we’ve got to fight for these little guys who have what -- JP Morgan is like 3.2 trillion in assets, the largest stable point in the U.S. is 30 billion. You’ve got to fight for these little guys at this moment before they get pushed into this regulatory structure that is already dominated by the incumbents, and it’s going to choke off new ways of competing that are beneficial for this conversation but beneficial for consumers generally. Consumers are facing overdraft fees that they shouldn't have to pay. They’re unable to receive the full benefit of their capital because that’s going through an intermediary. They’re forced to pick among a small number of institutions because there’s not enough competition. This is the moment when we need to engage and where folks who are not directly involved in this space need to fight for the insurgents.

 

Prof. Todd J. Zywicki:  Yeah. It’s this level playing field garbage that the big banks are always pushing. Right? And that’s the sense, right, is -- there’s political incentives to throw out the net and pull them in, but then you also got the big banks lobbying to suppress any competition that they can get. And so, the way banks now get new accounts is they just buy other banks. Right? They don’t actually compete for customer business anymore. They just buy another bank. And so, I think it’s a real problem. This is one of the reasons why we raised -- at the CFPB, we raised some concern about the idea of the OCC being the proper chartering authority for Fintech companies because even if they do get the chartering authority for fintech companies, they’re going to layer on the back end the fair playing field, the level playing field, of capital requirements for companies that don’t do things that need capital requirements in the same sort of way. And so, that’s my concern then.

 

Prof. Christopher Peterson:  I’m so excited to hear how interested you both are in more vigorous antitrust enforcement. Look, I want to have more competition in the banking sector, too. So maybe there is some measure of potential agreement there. I do worry about—I mean, this is becoming about bitcoin and the other cryptocurrencies; that’s maybe a different panel—but I am not entirely persuaded.

 

Paul Watkins:  Same panel.

 

Prof. Christopher Peterson:  Sorry.

 

Paul Watkins:  Same panel.

 

Prof. Christopher Peterson:  I’m not entirely persuaded that there’s really that much comparative advantage in that technology over traditional financial services other than a comparative advantage in facilitating tax evasion, online, and payment for illegal activities and that. The anonymity that tends to be -- there’s a little bit more anonymity there. I mean, we have a relatively stable currency. Maybe there’s some advantage in Venezuela or something, where the government -- if you’ve got currencies fluctuating wildly. Ours is -- it’s under a little bit of pressure now, too. I admit that. But look, I’m not entirely convinced that bitcoin and these other cryptocurrencies are really going to provide that much value to low- and moderate-income people across the country. That remains to be seen to me. And I’m more worried that they’re going to facilitate more scamming and illegal activity that’s going to take advantage of those people.

 

Prof. Todd J. Zywicki:  Well, I don’t want to speak for Paul. But I think Paul’s point is that—I guess it’s appropriate I’m sitting in the middle—because I think what you’re –

 

[CROSSTALK]

 

Prof. Christopher Peterson:  No, you’re on the right, Todd.

 

Prof. Todd J. Zywicki:  I’m on the right.

 

Prof. Christopher Peterson:  You’re clearly on the right.

 

Prof. Todd J. Zywicki:  On this panel, which is -- if I sort of paraphrase --

 

Prof. Christopher Peterson:  I am way more middle than you, Todd.

 

Prof. Todd J. Zywicki:  You are on the left there.

 

[Laughter]

 

So there you go.

 

Prof. Christopher Peterson:  Fair enough.

 

Prof. Todd J. Zywicki:  But if I can paraphrase your position, Chris -- basically, you’re saying Zywicki is imagining a problem that isn’t really a problem, that it’s not that bad, that this isn’t -- people aren’t going to be getting their bank accounts canceled. This is a non-problem, and Zywicki’s getting his hair set on fire on. And Paul’s basically saying, “Well, if it is a problem, it’s not really a problem because there’s these other solutions, which is markets will solve the problem without government.” And so, I think that’s—I don’t want to put words in your mouth, Paul—but that’s what I interpreted your view to be is that, “Yeah, maybe banks will start doing this, but people will figure out a way to work around it, more or less. And so, maybe it’s not as big a deal as Zywicki thinks, even if it is a problem.”

 

Paul Watkins:  So what I was trying to say is that I think we are focusing a lot on the short-term policy solution. What are we doing within this space where we have the issue that we have right now? We’re not doing enough to just entirely change the conversation. And I guess it isn’t entirely a bitcoin conversation. I want to say I had the privilege of being in Professor Peterson’s classroom when I was working in the administration and went there with an administration official that I suspect he disagrees with on a number of issues. And it was a very substantive, thorough disagreement and respectful and just exactly the sort of interchange you’d want to have in an academic environment.

 

So whatever defense he’s making here, in his personal life, he is the exact opposite from what I’ve seen of cancel culture. So I do think there is real potential here. And if somebody wants to ask -- I don’t want to hijack the panel. So if somebody wants to ask a question in response to those points about digital currencies, there are answers. This is not just a mechanism for fraud. The essential idea is that you’re using technology to replace an intermediary that is currently charging a fee. That’s where the cost savings come from. You don’t need the intermediary anymore because you can use the technology. And that is a real-use case. That is apart from all the kind of noise that is in the space.

 

Hon. Eric Murphy:  Great. I see we have somebody who wants to ask a question. So I’ll let you ask one.

 

Scott Univer:  Thank you. Is this –

 

Hon. Eric Murphy:  Yeah.

 

Scott Univer:  I’m Scott Univer, member of the Financial Services Committee Executive Committee. Mr. Peterson, I wanted to address my question to you. First of all, I think you were being unduly modest about the appropriateness of yourself as a spokesperson here. First of all, your arguments are entirely reasonable. And second of all, you look like Clark Kent.

 

[Laughter]

 

But my question is this: Why do you think that it is necessary for opinion-based financial sanctions to reach down to the common person, a common financial user, in order to become a serious problem when all you really have to do is sanction a few high-profile users to tell people what the rules are and enforce compliance? As the French admiral was supposed to have said when asked why he hanged one of his ship captains after a losing battle, “To encourage the others.”

 

[Laughter]

Isn’t it not necessary to go down that far?

 

Prof. Christopher Peterson:  That’s a great question. And also, yes, thank you. If you saw my bench press though, you wouldn't think I was very much like Clark Kent anymore. It’s very, very mediocre. Well, thanks. I appreciate that. So it’s a great question. I mean, I agree with you that sanctioning a few high-profile things, illegal actors, is an important way to do it. One of the things that I think, in fact, happened is that some of the CEOs I mentioned that went to prison for illegal online -- for violating the racketeering statutes in their online high-cost lending, they got a couple of those cases done. I think I was an expert witness for one of them when the Eastern District of Pennsylvania prosecuted.

 

But the administration changed, and those cases all went away. And everybody realized that there was a new sheriff in town and that there wasn’t anybody to prosecute those cases anymore. And a lot of the same kind of illegal lenders started to creep up again. And they got a little bit more sophisticated about sheltering their assets and hiding overseas and that sort of thing. And so, a lot of that same activity still going on today. I find it extremely frustrating. So I get that there is a potential problem. I don’t think that Todd is entirely making this up. We have a contentious society, and there probably are -- there’s an examiner here or there who’s being unreasonable. I don’t doubt that. And they also probably can get in some real trouble if that emerges that they’re putting inappropriate pressure on.

 

It just strikes me that the larger problem is not disciplining the banking system, but are these -- this constellation of other big problems that are out there, whether that’s the sex trafficking, the loan sharking stuff I worry about, or guns—and obviously very, very salient powerful debate on that—all of those big problems are enormous problems. And this is a very important lever that we as a society have to try to control these problems and facilitate tying our mixed federalist republic together. It’s important for the New Yorkers to be able to have a law that says they don’t want loan sharking. And it’s important for the Utahans to be able to say, “Yeah, let’s have some loan sharking. We’re good with that.”

 

[Laughter]

 

I mean, that’s how we’ve managed to tie such a big, complicated country together. And the banking system has a role in respecting those regional differences and policing the payment systems based on the rules that are out there in society. And one component of that is sending some tough messages, maybe hanging a ship captain, using your metaphor once in a while. Little uncomfortable with the metaphor, but fair question. I don’t know if that was responsive or not.

 

Hon. Eric Murphy:  Great. Okay. Next question.

 

Questioner 2:  My name [inaudible 01:29:22]. I’m not from Utah. I’m from France, I’m sorry. I’m an attorney before the French Supreme Court. And I was very interested in what you say, Professors, about President Trump’s bank account closing. I’m not sure that in my country, and probably in Europe, such thing could be possible. In my country, we passed a law in 1998 which says that having a bank account is like a fundamental right and that no discrimination can be made in opening or closing a bank account. So I was wondering how such thing is legally possible in this country. And my question is about the border between cancellation and discrimination.

 

Prof. Christopher Peterson:  Well, I’ll take a stab at that. I mean, we have similar laws. The Equal Credit Opportunity Act specifies about nine different protected classes it’s illegal to discriminate based on, including race, national origin, disability status, which I think is—it’s also -- the Americans with Disabilities Act has some separate rules about that—use of public funds or asserting your rights under the Consumer Credit Protection Act, which is an umbrella statute that has a lot of our consumer protection laws. And then some states have public accommodations laws that expand those protected categories and maybe change the remedies in some way.

 

One protected category under any of those is not Donald Trump. He’s not listed as a protected category. So I don’t know whether or not they were engaging in some law. It strikes me as inappropriate for the bank to do that. I don’t know why they did it. It seems like a one-off case. But he’s a special case. We should not use him as an example for any policy other than policy for him, in my view. If we did find that there were banks that were going around canceling Republicans’ access to credit, I would be completely opposed to that and would go to bat for you all just like you’ll go to bat for me if the mob comes for me in Utah.

 

Hon. Eric Murphy:  Yeah, Chris, I was curious -- would you be okay adding political opinion to the group of protected classes?

 

Prof. Christopher Peterson:  Yeah, I think I would. I mean, that’s an interesting idea. I’d be open to that. It might create a -- it might be a moment to build on this essence of commonality. I’m very in favor of that. I think the one example that I’ve read a little bit about was there was some white supremacists. And my understanding is that they were selling, what I view, as vile white supremacy kind of merch—Nazi flags or something like that. I mean, I kind of feel like if I were at a bank, and I found out that we were processing payments for a company that’s distributing swastikas, I kind of feel like I should be able to back out of that, and I should not have to be compelled to have my brand and my bank tied to your swastika. So, where we would draw the lines on that, I don’t know. That’s a tricky, tricky question. I think that we probably would need a fancy United States Court of Appeals judge to give us some guidance.

 

Prof. Todd J. Zywicki:  No. That’s funny because that’s exactly the example I was thinking about, where that has happened to, not Donald Trump, but ordinary people doing unpopular things.

 

[CROSSTALK]

 

Prof. Christopher Peterson:  Selling Nazi Swastikas.

 

Prof. Todd J. Zywicki:  Yep. And not being able to get a bank account to do it, a perfectly legal, constitutionally protected activity.

 

Prof. Christopher Peterson:  But vile.

 

Prof. Todd J. Zywicki:  But vile, yes. But that frames the question. Right? So the point is I think that frames the question perfectly, which is, yeah, you have a right to free speech, to say this stuff, to create the merchandise, to, in theory, sell it. Those are all legal activities. But if you cannot accept payments for it, if you can’t get a bank account to do it—I mean, I guess you could try to do like the marijuana industry—but that basically, effectively, it seems like raises a concern about whether or not you’ve effectively destroyed their free speech rights. You might not like it.

 

      And so, I think the French example’s a good example. What I was going to say is that the rest of the world, I think—and you guys, I know Paul’s done a lot abroad—the rest of the world has much more of a clear vision of banking as being more like a public utility. And I’m guessing France is like that, right? The guaranteed access to bank accounts and all sorts of things, there’s an acknowledgment of banking in most parts of the world being like a --

 

[CROSSTALK]

 

Prof. Christopher Peterson:  Postal banks.

 

Prof. Todd J. Zywicki:  Yeah, right, postal banks, that’s right. Here in the United States, we’ve continued to think of banking as a private activity. And in many ways, that sort of frames my question, which is, is it accurate to still think of banks as predominantly private businesses when they’re so intertwined with the regulatory process? Or is it useful to start thinking of them as being, maybe not completely public utilities, but being more like public utilities? And when you’ve got a public utility or something like a public utility, maybe we want to have a different regulatory regime than just pretending like they’re completely private.

 

      And I don’t know the answer to that. Right? This is why I’m genuinely trying to think this through because there’s all kinds of unintended consequences that could flow from that. But I think that’s what we’ve seen is a migration of private businesses and banking as being more like public utilities and what might that mean for how we think about our regulatory regime.

 

Hon. Eric Murphy:  Great. Next question.

 

Julie Smith:  Hi. Julie Smith. I’m with the Institute for Free Speech. Again, Mr. Peterson, not to pick on you, but you know you’re here to be picked on.

 

[Laughter]

 

      So my problem with your framing of this issue is there are all these terrible things that happen, crimes, financial crimes, human trafficking, etc., and the burden of your argument seems to be, “Prosecution is hard. Wouldn't it be nice if we could have an easier way to cut all these things off?” The problem with that is you are -- when you’re talking about the lever of restricting banking services or other financial services, you are using a tool that is not suited to the prosecution or prevention of crimes. You are using a chainsaw to do brain surgery. And that is such a mismatch between the tool and the goal that I think inquiring minds are justified in asking if that’s the actual goal. So my question—and I do have one—is, aren’t you turning your back on all the reasons that prosecution is hard by using this other lever? Thank you.

 

Prof. Christopher Peterson:  So prosecution is hard. I mean, I worked in the Consumer Financial Protection Bureau trying to bring cases to police illegal markets, both through payment processors, but also just directly, and it’s extraordinarily expensive. And frankly, it’s a lot of the same folks that are in this room that made it so expensive by ensuring that we don’t have enough staff to go after it and by also having mandatory forced arbitration clauses that make it so the people can’t assert their private cause of action rights to go protect themselves. They can’t even get to court, and there’s no class actions that enforce directly against those lenders. So yeah. I mean, prosecution is hard. I think that this is one legitimate tool.

 

      I disagree that -- it’s not fair to characterize my position as, “We should just cut off bank access.” My position was more nuanced than that—that we should engage in reasonable screening measures to exclude illegal activity from the banking system, which we already do. I mean, that’s what the anti-money laundering statutes are. That’s what the know-your-customer statutes are. We do that with tracking the amount of putbacks -- or the amount of—the terminology’s escaping me—in the natural rules, they have to keep track of how many payments get sent back for allegations of fraud. And all of those are used to police access to the banking markets.

 

      I probably want a somewhat more muscular version of that than some folks have in the room, but that’s because I’m worried about a lot of these problems. And I don’t think that it’s a chainsaw for brain surgery. It’s the same kind of underwriting that you engage in when you make loans. You need to get to know the customer a little bit, see if they’re sketchy, maybe have some algorithms that help you out, make sure they’ve got the appropriate licenses in place, ask them who they’re doing business with. That all goes into making loans, and it should also go into that when you’re allowing merchants into the bank account vault to take money from customers through the payment processing system.

 

Hon. Eric Murphy:  Great. Next question.

 

Questioner 4:  Thank you all so much for coming and the great conversations today. As someone not familiar with complex fiscal services, it was both engaging and easy to follow. So I appreciate that. In the sake of looking for potential consensus, whether this might be consensus for or against, I wanted to ask a follow-up about the Fair Access Rule that Professor Zywicki had mentioned, which has now been repealed, but it’s been reproposed as the Fair Access to Banking Act. And it’s for the panel, but I want to phrase it first to Professor Peterson.

 

      So even if we accept your starting position that there is a legitimate need to potentially regulate this on the basis of differences in localities or states on what they may or may not permit to be legal or even a truly fiscal impactive change in the risk-based behavior of something that might be illegal, what concerns most of us is when we see that that legitimate starting point, accepting that if that is a legitimate starting point, it’s now moving to what appears to be JP Morgan saying they will cut off all ties to anything relating to coal, or Bank of America saying they’ll cut off all ties to anything that doesn’t meet their standard of clean energy, or even financial institutions saying that they’re willing to consider cutting off ties to institutions in Georgia. So that looks like a very troubling trend to us.

 

      So with the proposed act, what I understand to be the operate provision says that any financial institution operating in a geographical location has to offer their services equally based on quantitative means, impartially, including risk-based assessment. And now to me, that sounds like that does answer both of your starting two concerns but while allows us to avoid this, what appears to be, political nature of these other effects. So to you, would that be some sort of starting point that might be amendable to move forward on?

 

      To the rest of the panel, is this same act, something that starts as a legislative provision, an appropriate type of measure to move forward in the immediate future? Or does that still lend too much discretion to potential regulatory agencies that could abuse that in terms of too much delegated authority in being able to tinker with that under different administrations? Thank you.

 

Prof. Christopher Peterson:  Why don’t you guys go first? I want to think about it. It’s a tough question.

 

Paul Watkins:  Look, I mean, Todd, you’re the fair access expert here.

 

[Laughter]

 

Prof. Todd J. Zywicki:  Fair access --

 

Paul Watkins:  So I’m going to be -- I mean, what I would say -- I’m going to be a broken record and say, really -- how good do we think the process is going to be if it’s occurring tightly inside this regulatory space. Do we really think that this rule is going to solve it, that the government’s going to enforce it in a good way? Do we really want to trust our freedom with this? This was a big fight in the administration. I was on the committee that was supposed to be pushing digital assets policy—the committee that did nothing. There was a big outcry about this. Why wasn’t there a big outcry about us doing nothing? That needs to start happening from folks in this room and elsewhere, or else this problem’s not going to get solved.

 

Prof. Todd J. Zywicki:  Yeah. Right. I’ve learned this as a professor—everybody has a good idea, and they can tell you all the intended consequences, but it’s hard to think about what the unintended consequences are. And I think Paul justifiably does that. I try to think for the unintended consequences. I’ve kind of reached a stage where I think it’s probably a good idea, but I still haven’t made up my mind on it. I could try to think of all the unintended consequences and all the things that could happen. I think, as Paul suggests, maybe it’s not going to do that much. But I think it might do something. And so, I think it’s a very difficult question for precisely this reason, is that it’s actually increasing government supervision of these entities, government oversight of these entities. And that’s always a double-edged sword to think about. So that’s why I’m wrestling with it.

 

Prof. Christopher Peterson:  Yeah. So I understood the question that -- would I support a fair access rule requiring banks to bank customers, provided that they were engaging impartially, based on a risk assessment. And for me, the tough word that I was scratching my head about is what impartial means. Impartial in what respect? I mean, we do already have fair access rules. Fair access, that’s what the Equal Credit Opportunity Act is. It’s a rule that says you can’t turn away a woman who applies for a checking account because she’s not married, which used to happen all the time. It was totally inappropriate. So I mean, it depends on what we’re going to pack into the word impartial there.

 

      I mean, I’m open to saying that we should not discriminate on the basis of banking because of ordinary political alignment. But that being said though, I do have some sympathy. I mean, it’s odd for me to be the one that’s defending Chase. I mean, usually, I’m the one that’s coming up with a way to sue Chase. It’s weird how this is the case. But I tend to have some respect for their right as a financial institution to say, “You know what? We don’t want to bank this neo-Nazi.” I mean, that seems like it’s a reasonable thing for them to tie their brand. They spend all this money and time and effort building these brands. And then, all of a sudden, they’re going to be compelled to bank somebody that’s trying to sell swastika flags. What about freedom, guys? I think they should have the right to deny that customer.

 

Hon. Eric Murphy:  Do you think—just to follow up—if the response was, “Well, we have to because the law requires equal access,” that that would kind of moot the reputational harm? If the response was, “Well, they established a rule for a reason because we don’t want folks making this distinction between what is, especially acceptable --”

[CROSSTALK]

 

Prof. Christopher Peterson:  And everybody in the country is going to be forced to facilitate payment processing for swastika flags. Is that really what we want? I don’t want that. If that’s what impartial in the question means, I don’t think that we should be forced to that. And if they’re struggling to get a payment processor to sell their swastika flags, tough luck, Nazi.

 

[Laughter]

 

      My grandfather fought you and nearly died. You’re not on my side.

 

Hon. Eric Murphy:  Okay. Next question.

 

[Laughter]

 

Prof. Christopher Peterson:  Thank you, Judge.

 

Emily Gao (sp):  Hi. My name is Emily Gao. I’m in Alliance Defending Freedom.

 

Prof. Christopher Peterson:  I can’t quite hear.

 

Hon. Eric Murphy:  It’s on now.

 

Emily Gao:  Okay. Can you hear me now?

 

Hon. Eric Murphy:  Yep.

 

Emily Gao:  My name is Emily Gao. I’m with Alliance Defending Freedom. I wanted to add three real-life examples of people who had their payment processing canceled, and they weren’t politicians. So the first is the Ruth Institute, which is a pro-life and pro-family, pro-traditional marriage group. Their payment processing was canceled. They were with Vanco, which is owned by Wells Fargo at the time. Barronelle Stutzman, a client of Alliance Defending Freedom—she was a florist in Washington State who serves all customers but does not create custom wedding creations for same-sex weddings because she believes marriage is between a man and a woman. And similarly, Aaron and Melissa Klein in Oregon, who are cake artists, and they also believe in marriage between a man and a woman because they’re Christians. They also had their GoFundMe campaign canceled.

 

      And I think it would be wrong to cancel someone because of their belief in same-sex marriage or their support for abortion. But I think it’d be very, very hard to find examples of that because the cultural and market forces today would punish any payment processor that would cancel someone on that side. So I do think all of the examples we’ve seen come in -- they go in one direction.

 

Paul Watkins:  Sounds like a lot of support for Todd there.

 

[Laughter]

 

Prof. Todd J. Zywicki:  Definitely not Nazis.

 

Prof. Christopher Peterson:  Maybe this is for me, I guess, again. Look, so if I were at the bank, I would not have done that. I mean, that’s not a great choice. I think the one that’s most troubling to me is the pro-family, pro-life institute because that clearly seems to be a politically motivated thing. I’m not seeing a clear undergirding legal justification for that. The florist that doesn’t do same-sex weddings, depending on the state that that’s in -- a lot of states have now passed public accommodation laws that prohibit discrimination on the basis of LGBTQ categories. So the activity might have been illegal, and the payment processor might be worried that they’re going to be engaged in facilitating illegal activity. And that seems to me like they’ve got a peg to hang their hat on in making a decision about that.

 

      That being said, though, I suspect that most of these people are going to be able to find other ways to process their payments and that the overall -- it’s not like they’re going to be -- they’re going to be lots of payment processors and companies that are going to be sympathetic. They’re going to develop business niche models to cater to those potential clients. And the market should probably adjust to that pretty effectively. But I do have some sympathy. And it’s a fantastic question, so I really respect the question. It’s very detailed. But I just don’t think that in the end, this is as big of a concern as it is as sometimes we’re portraying it to be.

 

Paul Watkins:  Can we just go back to that flower example? I don’t want to misstate what you just said, but what I heard you say is -- so there was some enforcement action because, I think, allegedly there was discrimination against a particular customer. So you’re saying a payment processor that is taking in payments from other customers, from lawful customers, because something was sold—so the money came in, so this is lawful money—they should still be able to cut off funding because there was an enforcement action on something unrelated? That --

 

[CROSSTALK]

 

Prof. Christopher Peterson:  No, no. That’s not quite what I said. And I don’t know the facts of any of these cases, so I have to be quite cautious about this. But I think what I was saying -- it sounded like what you were saying—and I don’t know the facts—but what I was hearing is that there was a florist who was violating a public accommodations law and was doing it in an open and notorious way. And the payment processor realized, “Well, this company might be engaging in a violation of an ongoing public accommodations law, and our payment processor are trying to carefully screen out companies that are engaged in illegal activity”, which arguably, under state law, maybe that would be the case. I don’t know enough about that.

 

      It is part of the why I have some sympathy for financial institutions that are taking on payment processor clients. It’s very hard to do business in the modern society with all the complex, competing interests. It’s not easy to identify who’s engaging in illegal activity and who’s not. But if you have specialization, a company that’s specialized in identifying the distinctions between those two things, they very well could because they’ll get good at it. And that company that can tell the difference between what’s legal and not illegal, then the florist can go to that company if they’re not breaking the law and should have a robust market to facilitate her payments.

 

Hon. Eric Murphy:  Okay.

 

Paul Mahoney:  Hi, Paul Mahoney, law professor. This is mostly a question for Todd, but Chris, if you want to offer thoughts, that would be great. So, Todd, based on your view of the quasi-public utility nature of banks, I’m surprised that you so quickly concede that they ought to be in the business of preventing illegal transactions. One of the reasons that prosecuting is hard is that the government has to prove illegal activity.

 

Prof. Todd J. Zywicki:  Right.  Right.

 

Paul Mahoney:  In fact, it even has to prove it beyond a reasonable doubt. But all a bank examiner has to do is say, “Hey, if something smells bad, just cut off access.” So I’m surprised that you’re willing to concede that banks ought to be in the business of preventing activity that has not been adjudged illegal.

 

Prof. Todd J. Zywicki:  Right. Yeah. I mean, I think it’s a fair point, and I should probably think more about it. But I’m taking as my basis that things like anti-money laundering laws and anti-terrorism laws are in -- having banks do that is a legitimate sort of thing. And that’s really what the question goes because it’s the same thing there, right? I mean, obviously, the same basic principle when you’re talking about noncitizens versus citizens and that sort of thing. And I’ll think more about your point, Paul. But it doesn’t intuitively strike me that anti-money laundering laws are inherently a bad idea in terms of doing that sort of thing. And I think they do it. As Paul said, it’s too expensive. They do it in a terrible way that doesn’t actually seem to accomplish the goal. And I think, probably, that’s a big impact on financial inclusion, for example, and form remittances and all these sorts of things. But it doesn’t strike me as an inherently improper use of government power.

 

Paul Mahoney:  Well, Todd, I’ll just make one very quick observation, which is in money laundering, part of the definition of the crime is the use of the banking system, which is not true of these other.

 

Prof. Todd J. Zywicki:  That’s a fair point. Yeah, right. Yeah. Right. You’re saying that this is just fraud, not criminal type, and necessarily criminal activity. And I think Chris is saying it’s criminal.

 

Prof. Christopher Peterson:  If you’re aiding and abetting, if you’re helping somebody hurt a child, seems crimey to me. You know? And if the way that you’re doing that --

 

Prof. Todd J. Zywicki:  Crimey.

 

Prof. Christopher Peterson:  -- is specializing in hiding their illegal payments for you victimizing kids, that feels like the bank could be engaged in a crime there. And I’ll also mention, the online payday lenders that went to prison, their originating depository financial institution was US Bank, and they paid—I can’t remember what the settlement was to the Justice Department—but it was about -- I want to say it was about $380 million that they had to pay back. So the financial institutions can be held accountable if they’re facilitating and should be held accountable if they are knowingly and maybe recklessly facilitating processing illegal payments.

 

Questioner 7:  Hi. Was along the same lines as that question and the earlier question, but I haven’t really heard anyone use the terms due process today. And the reason we leave it to the DOJ to prosecute crime and only prosecute crimes after they happen, not before, is because they are a subject to like 200 years of due process law that’s been really vetted, and there’s lots of protections for the criminal defendant. And it seems like the speaker on the end wants the CFPB or other agencies to have the authority to go in and actually take punitive measures against people that have never been charged with a crime—it’s never been proven; it may not even have happened yet—without any restrictions around due process that the DOJ or other crime-fighting agencies would be subject to. So my question is, why do you think the CFPB or any other agency should be able to take punitive measures against anyone without abiding by due process concerns that the Department of Justice would have to follow?

 

Prof. Christopher Peterson:  I just don’t -- I mean, I don’t accept the analogy. We have all sorts of prophylactic safety rules in our society. We’re not allowed to drive down the freeway at 120 miles an hour. And banks should not be able to go into banking in reckless ways that facilitate --

 

Questioner 7:  [Inaudible 01:54:40] crimes specifically, so it’s criminal [inaudible 01:54:43].

 

Prof. Christopher Peterson:  So some of them are crimes, and some of them are statutory civil violations. And I don’t think that there’s punishment without due process. If the banking regulators take some action against the bank or the payment processor for facilitating illegal activity, then the bank is going to have a general counsel, and they’ll hire lawyers. They’ll lawyer up. And if the government did something wrong, they’re going to have access to due process. The question is whether or not at the outset, when we’re casting incentives across the society, are we going to create some incentives to try to ensure that the banks don’t become facilitators of illegal activity, whether that’s criminal or civil.

 

Prof. Todd J. Zywicki:  And I don’t want to overlook Paul’s earlier point, which is even if these are legitimate functions, the idea of having transparent, accountable rules, that sort of thing is an important part of it as well, which is not just having it be subjective standards. I mean, it’s an obvious point. But in banking, a lot of it really does seem to be very subjective, the way that supervision works.

 

Hon. Eric Murphy:  Go ahead.

 

Ethan Yang:  Hi. My name’s Ethan Yang. I'm a 1L at George Mason Law School. My question’s on the state actor doctrine component when private entities are sufficiently incentivized or coerced into enacting a government agenda. It’s therefore considered a public entity. So I was wondering, given that we heard about different agendas that banks are being incentivized for sue, it’s like fighting climate change or combatting gun control, at what point -- when does it start to look and smell like the state action doctrine is coming into place given that the government may or may not be using incentives or coercive measures to enact a certain political agenda via the private sector? And I guess, on that note, is that -- I guess, opportunities, concerns -- are we even close to that yet? I’m just wondering about your thoughts. Thank you.

 

Paul Watkins:  I wish I had the black letter law in my head so that I could answer your question on when that line is crossed. But I do think it’s a very interesting issue and a real one. And the other interesting dynamic—and this goes back to Professor Peterson’s point about how polarized we are—is we’re probably going to see it on both sides, where I imagine there will be many institutions that are going to have to choose—we’re either doing business in some blue states and subject to those supervision rules, or we’re doing business in some red states, and we’re subject to, you know, Todd Zywicki’s rules, or whatever the alternative legal framework is. And it’s very likely that these things will not be compatible.

 

      I mean, you can look at Texas, which says, “Our state’s not going to do business with institutions that are going to refuse to fund fossil fuels.” And you could see another state saying, “Well, you’re not going to be able to do business here,” or, “We’re going make this supervisory burden so strict that you’re going to have a hard time with doing business here if you are serving those institutions.” And I think that’s probably going to create a bifurcation in financial services that we may not have seen before.

 

Prof. Todd J. Zywicki:  Unless I’m mistaken, I think Texas State Legislature may have actually passed a law that prohibits discrimination against firearms, maybe. Does anybody know? Firearms industry and banking services, which would be an example of that sort of tit for tat kind of thing.

 

Hon. Eric Murphy:  Okay. Next question.

 

Nick Matich:  Nick Matich, McKool Smith. And I guess this question is for anyone on the panel. What makes the banking industry unique in that we would want to use it to combat other seemingly unrelated crimes. I mean, all kinds of other industries support other industries. So should computer manufacturers have to figure out if their customers are using their computers for illegal things or if they’re selling to a business that discriminates? Or, I mean, should airlines ask you before you get on the plane, “Are you traveling for a business that doesn’t hire gay people?” or something like that? That seems like we wouldn't accept that in any other industry, so why would we look to do it in the banking industry?

 

Prof. Todd J. Zywicki:  Well, we kind of do do it in the airline industry with the Do Not Fly list, right? We do have these intermediaries that end up helping -- being pulled in to help enforce laws. And I think that’s -- and obviously, there’s line-drawing problems here. But I think that would be what the idea is, is that it really is a choke point. That’s why it’s effective. Right? That’s why Operation Choke Point worked because they can cut off the oxygen.

 

Prof. Christopher Peterson:  I prefer bottleneck.

 

Prof. Todd J. Zywicki:  Bottleneck.

 

Nick Matich:  But the airline rules are to prevent people from blowing up the airplane itself. So that’s, I think -- my question’s along the lines of what Professor Mahoney was asking. Like, sure, anti-money laundering laws -- if you’re using the banks to commit a specific kind of fraud, that’s one thing. But we don’t use any other industry for the purposes of stopping crimes that are not directly related to the thing that’s going on.

 

Prof. Christopher Peterson:  Well, I mean, first off, I think that banking is somewhat unique. I mean, that’s why in all the states, the country’s big cities, it’s the banks that have the biggest buildings with their names on them. And banks stand at the fulcrum of all trade. They facilitate payment for all the stuff. And that’s an especially unique thing ever since we gave up barter. Maybe with the bitcoin, that’s going to start to change. So I think that they are an especially unique system. And they reap enormous profits. I mean, our money center banks have assets that dwarf the gross national product of most of the world’s countries. Right? It’s not like they don’t have resources to try to facilitate lending a hand to prevent some of the horrific things that happen in our society. We want our banks and our financial institutions to be good citizens that help us have an ordered and lawful, law-abiding society. That’s why. And nobody’s picking on the banks. They’re doing just fine.

 

Hon. Eric Murphy:  How about back here, please?

 

Jim Lindgren:  So, Jim Lindgren, Northwestern Law School. I was thinking about a possibility of either private suits or even prosecutions for taking away people’s civil rights. Some of the talk has been about, “Well, the banks choose to this or whatever.” But the problem is that the government conspired to take away the banking possibilities for gun dealers and tobacconists. You’re shaking you’re head, no.

 

Prof. Christopher Peterson:  I don’t believe that’s true. I’m sorry. I don’t believe that’s true.

 

Jim Lindgren:  Certainly, gun dealers reported this happening. It was --

 

Prof. Christopher Peterson:  Or lobbyists for online payday lenders said that the gun dealers were reporting this was happening.

 

[CROSSTALK]

 

Jim Lindgren:  It was on --

 

Prof. Christopher Peterson:  Maybe there was a little bit.

 

Jim Lindgren:  -- there was an official list that the government put out of things that were supposed to be risky.

 

Prof. Christopher Peterson:  That’s incorrect. Well, no.

 

Jim Lindgren:  Okay.

 

Prof. Christopher Peterson:  Risky, that’s right. You got that right. They said that they were risky, and there might be a little bit --

 

Jim Lindgren:  Yeah.  And therefore –

 

Prof. Christopher Peterson:  -- extra scrutiny to make sure that you’re not facilitating illegal payments.

 

Jim Lindgren:  Well, many banks responded to that by saying, “We just won’t deal with them at all.” And people were informed it was because a regulator came to their bank and said, “You should be careful about this. Maybe you should shut these off.” In any event, something like gun dealers, I’m sure there are corrupt ones, but most of them are not. Most of them are pretty meticulous. And tobacco stores, I’m surprised -- they may be selling to underage, but that doesn’t seem to be a money-laundering operation—probably doesn’t make much money at all.

 

      So here you have the government that’s, essentially, in my mind, conspiring to deprive people of civil rights. And I wonder why there haven’t been prosecutions either under state or federal law for this or private lawsuits for deprivations of civil rights because this seems to be what’s happening. You’re just suggesting they’re facilitating, but they’re not really conspiring. Somebody’s conspiring to take these rights away. They didn't happen in a vacuum. They happened because they were put on a list that the government was targeting for these things.

 

Prof. Christopher Peterson:  You’re using some words there that are kind of tough words, like targeting. I mean, I think what happened was that they recognized that there are some markets that are especially risky because there’s complexity of lots of different types and identifying what is legal and what is illegal. In some states, it’s illegal to sell -- in cities, it’s illegal to sell a handgun. Right? Under current law, maybe there’s some Supreme Court jurisprudence that might be coming to provide some further light about that. But the laws in Chicago are not the same as in Utah. In Utah, we have a gun manufacturer that just created a gun that looks like a Lego, but it’s a real pistol. Like Legos, like the kids’ toys. You could Google it. The gun looks like it’s a pistol, but it looks like it’s made out of Legos. And that’s apparently legal in the state. Seems like a bad idea to me.

 

      It’s not legal in Chicago. And some financial institutions have a hard time telling which ones are -- which manufacturers and sellers of those guns are engaging in legal versus illegal activity. And I think that that guidance -- all it really said was that, “If you’re in one of these markets where it’s kind of complicated, and it’s hard to tell what’s legal and what’s not, you as the financial institution need to do a little bit of extra due diligence to make sure that you’re not facilitating illegal activity.” And some banks responded by saying, “Well, that’s going to be complicated. It’s going to be hard to build a pricing model for that, and that’s not the direction that we want to go with our financial institution. So we’re going to take a step back from that processing business.” And then there are other companies that are like, “Great. New market opportunity. I can tell the difference between illegal guns and not illegal guns. I’ll be your payment processor.” And the market started to adjust to that, and it accommodated it. And all the gun dealers, basically, are banked now. The notion that there should be prosecutions for that strikes me as just not appropriate. But I appreciate the question.

 

Prof. Todd J. Zywicki:  There was a lawsuit in -- I know it’s in the Fifth Circuit. And I think it ended up maybe in Mississippi -- that ended up -- I think there was a settlement by the payday lenders. And I don’t know what the terms of the settlement was, but there was a private action brought by -- I think Chuck Cooper may have actually been the lawyer on the case. And I don’t remember exactly how that played out.

 

Hon. Eric Murphy:  I wonder if we should distinguish because when we think about civil rights, I tend to think about speech, so if your banks are coercing because of speech, but – I mean, with respect to firearms, maybe there’s Second Amendment concerns. But is it even appropriate to think about a civil right to engage in payday lending?

 

Prof. Todd J. Zywicki:  Well, it’s basically illegal activity, right?

 

Hon. Eric Murphy:  Supposed, yeah.

 

Prof. Todd J. Zywicki:  I mean, I don’t know if there’s a civil rights -- and obviously, also, we’re at a turning point here, which is, yeah, firearms companies are banked now, but we’ve just had four years of the Trump administration. Now we got a new sheriff in town. So hopefully, that will continue, but there is sort of a window of time there where the regulatory pressure was let up on some of these things.

 

Hon. Eric Murphy:  Okay. I think we have -- how much more time? Just a few more minutes, so go ahead.

 

Michelle Roberts:  Good afternoon. I’ve really enjoyed all the examples and hypos. Michelle Roberts of BlackRock. And so, I’d thought I’d throw out one more hypothetical for the panel. On the wokeness spectrum, where would you rate sanctions against individuals, like in the Magnitsky Act?

 

Prof. Todd J. Zywicki:  Like in the what? The door opened. I couldn't hear what you said.

 

Michelle Roberts:  The Magnitsky Act, having to do with Hermitage Capital. Their lawyer, Sergei Magnitsky, who was murdered, and then subsequently the individuals who were responsible were sanctioned individually. There’s some effort to expand the Magnitsky Act to apply to other bad actors around the world. And I’m just wondering on our cancel culture spectrum, what the panelists think of that approach.

 

Prof. Christopher Peterson:  Yeah. So I’m familiar with this a little bit. I mean, everybody that may not know the Magnitsky Act -- this is the statute that they passed to sanction the members of the Russian government elite class who were conspiring with Vladimir Putin to kill this guy. Isn’t he one of the people that fell out of a window?  I can’t remember. Or maybe he died in prison, I can’t recall. So it’s a sanctioning method -- mechanism on corrupt governments and oligarchs. I think that this is actually -- it’s a really good hypothetical. So should a bank engage in reasonable due diligence to facilitate not banking people that are throwing Americans out of windows and are on a specific sanctions list? Yeah. That seems like that’s a reasonable thing to do. I think we already kind of do that. I think that’s part of what that statute is about.

 

Hon. Eric Murphy:  Okay. I think we only have time for one more. Back -- yes.

 

Richard Clair:  Richard Clair from Virginia. What I don’t understand is why we don’t want all of this activity banked everywhere to create records for IRS to go audit. We could solve our deficit problem. Little lighter note.

 

Hon. Eric Murphy:  Okay. How about -- go ahead. Go ahead.

 

Susan Aprill:  Okay. Susan Aprill from Fort Lauderdale. And thank you for a really interesting conversation. Professor Peterson—I was sitting real close, so I think I heard you—but when you were using the example of how a bank doesn’t have to deal with a customer who publishes swastikas, I think – and so I couldn't tell if you meant Nazis because people who prepare Confederate flags, swastikas, other kinds of emblems that may not be popular with certain groups—pointy white hats—those people are generally distributors or manufacturers. So was that example meant to say that a bank doesn’t have to be tarnished with representing people who actually have political views, like Nazis—that’s their political belief—or people who are known to make these somewhat objectionable products even if they make other products.

 

Prof. Christopher Peterson:  Well, so maybe I’m being a little too glib in distinguishing between granularity and Naziism. I mean, one person’s -- I don't know. That’s a tough question. I guess I think the hypothetical that we’re talking about -- it’s not even a hypothetical. I think this is the underlying factual story that we were both alluding to. My understanding is that there was somebody who was manufacturing -- and when I say Nazi here, I think Third Reich merch—so swastika stuff. And the bank didn't want to facilitate online payments for people that were acquiring this merchandise and said, “No thanks. That’s not our business.” And I think that seems pretty respectable to me. I mean, where we draw these lines, I realize, is a very tough question. I mean, how far would that go? I certainly would not say we should have banks stop processing payments for Federalist Society merchandise. Although, there are some folks on my side of the aisle that are pretty upset with you right now.

 

Susan Aprill:  Yeah, right. Exactly.

 

Prof. Christopher Peterson:  Going back to the whole storm the Capitol thing. Look, I think we got to keep talking with each other. Drawing lines is always very, very hard. And if you draw that line, does it need to be nudged over a little bit too far this way or that way? I don’t know. It’s messy. It’s really difficult. It’s the kind of dialogue that we have to keep on having. So I don't know if that’s a helpful response or not.

 

[CROSSTALK]

 

Prof. Todd J. Zywicki:  And I think that’s the problem --

 

Susan Aprill:  Yeah.

 

Prof. Todd J. Zywicki:  is it starts with a -- I mean, think about college campuses and speech on campuses. Right? It starts with the Nazis, and then it’s that Milo guy, and next thing you know, Charles Murray is --

 

Prof. Christopher Peterson:  Okay.

 

Prof. Todd J. Zywicki:  -- not allowed to speak on campus. Right? And next time, it could be anybody.

 

Prof. Christopher Peterson:  Yeah. The problem with that is it’s a slippery slope argument.

 

Prof. Todd J. Zywicki:  Exactly. Exactly.

 

[CROSSTALK]

 

Susan Aprill:  It sure is.

 

Prof. Christopher Peterson:  And I get that there is some -- we’re having a hard time drawing those lines right now, but that’s not to say that we should just give up with drawing lines. There is a clear distinction between Third Reich-style Nazis and Charles Murray. Third Reich-style Nazis advocated the genocide of a people and were criminals and were violent. And our country came around that and fought them. Charles Murray has some controversial views. We can draw those lines and say -- just like we can on college campuses, we can do that in our banking system. And we just have to keep the dialogue going and be effective about it. And you know, at some point, we may get some more guidance from the government, and that might be helpful. Or we can let the market sort it out on some of those questions. That’s the kind of way -- life is messy. It’s messy. But the notion that, somehow, we’re slippery sloping into Charles Murray not being able to bank right now, that’s the kind of fear-mongering that I don’t think we’re really at risk of, Todd.

 

[CROSSTALK]

 

Susan Aprill:  So can I --

 

Prof. Christopher Peterson:  I don’t think that’s going to happen.

 

Hon. Eric Murphy:  We’re going to have to end it.

 

Susan Aprill:  -- I just wondered, can I manufacture confederate flags?

 

Hon. Eric Murphy:  Fifteen seconds. Okay.

 

Susan Aprill:  Just wondered.

 

Hon. Eric Murphy:  So we’re going to have to end. Couple comments. First, a quick update, just happening now, I guess Todd is on his way over to have a Fireside Chat with Vivek Ramaswamy. And then other than that, I’d like to thank our panel. This was a great panel that The Federalist Society puts on. It’s prototypical of a great debate. So thank you.

11:30 a.m. - 1:45 p.m.
Federalism and Broadband Spending: Finding the Right Approach

2021 National Lawyers Convention

Topics: Federalism • Telecommunications & Electronic Media
District Room (Lower Level)
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". This panel covered "Federalism and Broadband Spending: Finding the Right Approach."

The Covid-19 pandemic accelerated the desire for increased—indeed, universal—broadband access. This panel will focus on the infusion of federal and state funding into broadband networks. The panel will explore the ways in which states and private actors can play a role in ubiquitous deployment, the appropriate role of the FCC and other government agencies, including the USDA, NTIA, and DOE, how the FCC’s Universal Service programs can continue to facilitate deployment and adoption, and the terms that should accompany government funding distributed through states and federal agencies.

Featuring:

  • Hon. Brendan Carr, Commissioner, Federal Communications Commission
  • Hon. Eric Allan Koch, Senator and Chairman, Indiana Senate Utilities Committee, Indiana State Senate
  • Dr. Roslyn Layton, Senior Vice President, Strand Consult
  • Moderator: Hon. Steven Menashi, U.S. Court of Appeals, Second Circuit

Speakers

Event Transcript

Bryan Tramont:  Good afternoon, everybody. I want to welcome everyone to our panel: "Federalism and Broadband Funding." I'm Bryan Tramont, a managing partner at Wilkinson Barker Knauer, and I'm the chair of the practice group. I want to take this opportunity to encourage you all to sign up for the practice group; you can do that on the website. We do a lot of programming in this area and would love to have all of you join, so please consider that. It's a very exciting area of the law. It's going to be even more interesting as things progress through the new administration. There will be lots of controversial issues that we can take up, and we look forward to having you participate.  

 

      Also, per D.C. regulations, please do wear a mask unless you are eating or drinking or talking or whatever other things you might be doing.

 

      I'm going to briefly introduce our moderator for today's discussion, and our moderator will introduce our panelists. Judge Steven Menashi was appointed to the U.S. Court of Appeals for the Second Circuit on November 14, 2019. He previously served as special assistant and associate counsel to the President in the White House and as acting general counsel at the Department of Education. Prior to that, he was an assistant professor of law at the Scalia Law School at George Mason University. He was a research fellow at New York University School of Law and Georgetown University Law Center. He was also a partner at the law firm of Kirkland & Ellis in New York, and he served as a law clerk to Justice Alito and as a law clerk to Judge Ginsburg on the U.S. Court of Appeals for the D.C. Circuit. He's a graduate of Stanford Law School and Dartmouth College.

 

      So with that, I will turn it over to you, Judge.

 

Hon. Steven Menashi:  Thanks very much, Bryan, and welcome, everybody, to our panel on "Federalism and Broadband Spending: Finding the Right Approach."

 

      The pandemic seems to have accelerated the push for universal broadband access, and our panel is going to explore the ways in which the federal government and states and private actors play a role in the development of broadband networks and how the FCC's Universal Service fund and related programs can facilitate deployment and adoption and whether those programs might be reformed.

 

      To help us work through those issues, we have three distinguished panelists with us today. I'm going to introduce them in the order in which they're speaking, and then I'll turn it over to them.

 

      First, we'll hear from Commissioner Brendan Carr. Commissioner Carr is the senior Republican on the Federal Communications Commission, and he served previously as the agency's general counsel. Described by Axios as the "FCC's 5G Crusader," Commissioner Carr has led the FCC's work to modernize the infrastructure rules and accelerate the buildout of high-speed networks. His reforms aimed at cutting red tape, enabling the private sector to construct high-speed networks in communities across the country, and extending America's leadership in 5G. Before joining the FCC as a staffer, he worked as an attorney at Wiley Rein and clerked on the U.S. Court of Appeals for the Fourth Circuit. Commissioner Carr earned his JD from the Catholic University of America, where he served as editor of the Law Review. He grew up in Virginia and now lives in Washington, D.C.

 

      Next, we'll hear from Dr. Roslyn Layton who is a leading expert on technology policy. She's senior vice president of Strand Consult, an independent consultancy serving the global mobile telecom industry. She is also a visiting researcher at Aalborg University Copenhagen where she earned a doctoral thesis on network neutrality. She served on the Presidential[JRF1]  Transition Team for the Federal Communications Commission, and her work helped form the basis of the FCC's defense of the Restoring Internet Freedom Order. She has testified to the U.S. Senate and House on multiple topics and founded the thinktank "China Tech Threat" to study the problems of technology produced by the People's Republic of China. She serves as the program chair for the Telecom Policy Research Conference and is a senior contributor to Forbes.

 

      Third, we'll hear from Senator Eric Koch, an eighth-generation Hoosier. Senator Koch grew up on a grain and livestock farm where he learned the value of hard work and experienced the risks and rewards of the commodity markets. He earned a Bachelor's Degree from Georgetown University before working the 1984 Reagan campaign. He earned his JD at the Indiana University School of Law where he was a member of The Federalist Society, and he clerked at the Bloomington law firm of McDonald, Barrett & Dakich. He has been engaged in the private practice of law, with offices in Bloomington since 1989 and Bedford since 2003. In 2002, he was elected to the Indiana House of Representatives where he served until being elected to the Indiana State Senate in 2016. He currently serves as Chairman of the Senate Utilities Committee and Ranking Member of the Senate Judiciary and Commerce and Technology Committees. He also serves as a member of the Federal Communications Commission Consumer Advisory Committee and the public sector chair of the ALEC Task Force on Communications and Technology.

 

      So with that, I'm going to kick it off by turning it over to Commissioner Carr.

 

Hon. Brendan Carr:  Thank you so much, Judge, for the kind introduction for all of us. It's great to see all of you here.

 

      I know there are a lot of interesting panels out there, and despite the title, we will try to make this one interesting as well, so just stay awake. It's great to be anywhere in person these days, frankly. I'm so used to sitting behind a Zoom screen, which makes it very difficult to figure out when people have fallen asleep when I'm speaking, but thankfully, here in person, when you nod off, I will be able to spot you and identify you pretty quickly. So hopefully that will be an incentive to stay awake.

 

      As we've gone through this COVID-19 pandemic, as stay-at-home recommendations and orders spread across the country, so much of our lives, virtually overnight, turned to the internet. In the U.S., we saw this massive spike in internet usage effectively taking eight months of expected network growth and traffic growth and loading it onto the network in a single day. And America's networks performed despite that massive, massive surge. Even on the traditional telecom network, we were basically seeing the same call volume every day that we usually only see one day a year, which is Mother's Day — believe it or not, it's the highest call-volume day of the year. We were seeing Mother's Day call-volumes every single day during the beginning of the pandemic. It's also a good reminder to call your mother.

 

      America's networks performed. Other countries weren't so fortunate. In Europe, regulators there called up Netflix and other streaming video providers and asked them to degrade the quality of their signal because they were afraid that the continent's networks were going to break. Australia made some of the very same actions. China even saw a massive slowdown in their internet speeds, and we didn't. In fact, on the mobile side, we saw an increase in speeds. Why is that? It's because we have this regulatory framework in place that has incentivized a massive amount of investment in our broadband infrastructure, and it's because of infrastructure reforms that we put in place at the state level and the federal level over the past couple of years.

 

      If you flash back to a few short years ago to 2016, new internet infrastructure build in this country had essentially flatlined. In 2016, we built 708 new cell sites in this country. At that point in time, China was putting up the same number of cell sites that it was taking us years to do every single nine days. They were just hitting this massive cadence of builds. And frankly, it's because it cost too much to build internet infrastructure in this country and it took too long from a permitting process perspective. And China and other countries were getting ready to unleash, according to some news reports and analysts, a 5G tsunami that was going to leave the U.S. behind, making it, as they put it, nearly impossible for the U.S. to catch up.

 

      China saw what the 4G economy did to this country and all the economic growth we saw out of Silicon Valley and other places, and they wanted that-- at least then; there have been some changes to their strategy recently. But back then, they wanted that economic growth in the 5G economy for them. So we had some work to do; we were behind the eight ball.

 

      My job at the FCC — I've tried to do it a little different than some of my predecessors — I've tried to be guided a lot less by the lawyers and lobbyists inside D.C., some of which are here; I still like you. But I've attempted to get outside the beltway and be guided by policies that are working at the state level, talking directly to the women and men who are climbing towers, that are laying fiber, splicing the connections that we need. And one early idea that I got, again, came outside the beltway; it came from Indiana. It came from working with the Senator and some of his colleagues, including Brandt Hershman who worked with him back in the Senate then. They put together a very forward-leaning, what we call "small-cell build" which was going make it easier to build the cell sites that you need to support 5G. And that was not an idea from the beltway; it was an idea from Indiana. Indiana, back then, was putting up more cell sites than you were seeing in Silicon Valley because the regulatory framework mattered.

 

      I went to a small town just outside of [Indianapolis], [JRF2] Fishers, Indiana. I met with the Mayor, Scott Fadness, and he took me on a tour. They had 67 small cells in the small town of Fishers, Indiana at a point in time when the capital of Silicon Valley, San Jose, was putting up a goose egg of zero small cells — which I pointed out to Mayor Liccardo and he enjoyed that on Twitter when I made that point.

 

      So the idea is we looked at what was working in Indiana in this bill that they got across the finish line. We put that in place at the federal level, and what happened? We went from 708 cell sites in 2016 to over 46,000 cell sites built in 2019 alone. Internet speeds in this country tripled. We leapfrogged 20 countries on the global mobile speed index for downloads. We had more miles of fiber get built out than ever before, and we established a leadership position in 5G. And thankfully — because that's good generally — but it was particularly good as COVID hit, and that's why we were able to withstand that surge in demand that came with COVID. There were so many more families that were able to keep their kids educated remotely when their schools closed because of all the connections that got built out from building on the ideas that came from Indiana, and so I was proud of that.

 

      Right now, as we've had COVID, everyone has realized how important connectivity is, and we've never had a funding commitment at the federal level to truly get the job done. By some estimates, we need about $80 billion — these are high-end estimates; you can poke a lot of holes in them — but $80 billion to finish the job of bridging the digital divide.

 

      The reality, though, is if you look at the federal agencies right now — just the core ones that touch on broadband infrastructure — between Commerce, Education, Agriculture, Treasury, and the FCC right now, in the last year and a half, we have had budgeted or we've appropriated within ourselves $800 billion that are eligible for broadband infrastructure. Now that could be used on other infrastructure as well, so I don't want to oversell it, but that could be used on broadband infrastructure.

 

      So we need 80 billion by high-end estimates; we have 800 billion sitting there waiting to go. But we've got it stuck in the pipeline; we're not getting that money out into the field. And now we've got this new infrastructure bill that's passed with 65 billion additional dollars. And my greatest concern — and unfortunately, I think it's inevitable at this point — is that we're barreling towards a broadband blunder. We are going to waste such a significant portion of that 800 billion, and we are not going to have made enough progress bridging the digital divide.

 

      This is one area where federalism is going to be so important because, at least with respect to the 65 billion, the states are going to have a big role in administering those funds. It sort of cuts the FCC out of it — which is fine by me; I don't get a cut of the money going to the FCC; it's fine. But we've got to stay very coordinated at the federal and state level because we've got a lot of entities with a lot of dollars, and we can't afford to have them dumping on top of each other, overbuilding each other.

 

      I wrote a letter in July to the cabinet secretaries that have that funding: Ed, Ag, Treasury, Commerce. The ones that got back to me -- most of them just told me to pound sand or didn't even respond, which is fine; I get politics these days. The ones that did respond to me, it wasn't very comforting. They said, "You know, we're not even tracking how much of the money that's going out the door is going to broadband, let alone where it's going, what speeds, what technologies, what coordination." Just the threshold, "We don't even know how much of this 800 billion that we're shoveling out the door is going to broadband."

 

      That's a problem, and I've tried to flag it and I've tried to talk about it. But again, it's largely inevitable. We're going to have this massive, massive, waste, fraud, and abuse. It's not entirely too late, but we do have to tighten our coordination.

 

      Separate and apart from the $800 billion, we historically fund internet infrastructure builds in this country through a process called the "Universal Service Fund." You may not know about this, but if you look at your cell phone bill or your traditional telephone bill, there's a line-item charge added there every single month — it's actually a 30 percent charge right now. We at the FCC collect that monthly charge, stick it into the Universal Service Fund, and that creates about a $9-billion-a-year fund. Right now, that fund is unsustainable because that revenue that's associated with your telephone bills keeps declining, so we keep increasing the charge. Right now it's 30 percent; it started at 6 percent. A 30 percent charge on your bill is added to create 9 billion. That fund is in a death spiral.

 

      So what I propose is we should look to large technology companies to start contributing for the first time into this fund, and that would stabilize the fund; it would take that 30 percent charge off your bill. And it's fair because these large technology companies are the ones that benefit — we all benefit, but they benefit tremendously, to the tune of trillions of dollars — to the internet infrastructure builds that that Universal Service Fund is designed to support. And so I put forward that idea, and it's actually gained some pretty good bipartisan support.

 

      Then finally, real quick, you know, what else do we spend this money on? One thing I've been advocating for is to make sure that we take an appropriately tough stance with respect to communist China. For years, we allowed Universal Service Fund dollars to go to subsidize the purchase of Huawei, ZTE, and other spy gear to go right into our network. We took some action the last couple of years to crack down on that. But we had this Huawei loophole that allowed entities that -- you know, you couldn't take federal dollars and purchase this Huawei box and put it into your network, but you could use your own private dollars to purchase the same Huawei box, stick it in the same place in the network, and it was this massive loophole. Thankfully, working with members of Congress, a bipartisan bill passed in both the House and the Senate, and President Biden signed that bill just yesterday. That's going to give us some additional authority to make sure we close that Huawei loophole so we don't get additional insecure gear put in the networks.

 

      With that, I'll move on. But that's a quick overview of where we are with internet infrastructure in terms of buildout, some of the funding issues, and where I think we need to go to make a more sustainable model in getting big tech to finally contribute a fair share.

 

Hon. Steven Menashi:  Thanks very much. Dr. Layton?

 

Dr. Roslyn Layton:  Good afternoon, everyone. Thank you, Commissioner Carr, for making that observation about COVID. You know, you have a much-deserved victory lap, given your tenure on the FCC, and especially that things got organized before the pandemic happened that America's broadband providers could invest. They were ready for the unexpected, and many countries were not. So that was really important work that you did. You went all over the country advocating for removing regulations at the local level which were inhibiting broadband investment, and we have been reaping the benefits today.

 

      Before I begin, I really want to thank The Federalist Society. It's always an honor to be here. Thank you, Bryan and Danielle, and all the FedSoc staff. You know, I fly in from Copenhagen and come to this conference; it works so perfectly, and I love to be here. So thank you for making it so easy for me to participate.

 

      I wanted to cover a couple of quick things today:  A success story; a crisis; talk about private investment, as Commissioner Carr was teeing up, a lot of the public subsidies we have; do a little bit of comparison to Europe; and then I will tell you what I think is the right way forward.

 

      The last time we were together in this panel two years ago, in 2019, sitting up here was my friend and mentor Jeff Eisenach[JRF3] . At the time, we were in the thrall of trying to finalize a very important auction for the C-Band which was almost as if it was not going to happen. Fortunately, it came together, and the FCC, in a very short period of time, did something no one ever thought could be done. They thought it would take seven to ten years to organize that auction; they did it in a few months and got the rules and everything posted and ready to go in March when the lockdown happened. The FCC worked all through the summer and made sure that, beginning December 8 of last year, that auction happened. It raised more than $90 billion, which is a record for the United States, and it accounts for 47 percent of the total auction receipts in U.S. history. It's not a surprise or mistake that the Nobel Prize for Economics in 2019 went to the FCC's auction designers and economists. It is one of the signature achievements for the world in economics, in telecom policy, in spectrum policy; and it's something that has been done with this FCC. So it's really a tremendous success.

 

      Here we are, two years later, and we're in the midst of another crisis. December 5, two years from the time of that auction two years ago, we wanted to turn on this 5G spectrum in the C-Band, and lo and behold, at the eleventh hour, we got a safety warning from the Federal Aviation Administration that the 5G transmissions are going to interfere with the altimeters on planes. Meanwhile, 5G has been available in almost 50 countries, across 175 networks, with no reports of aviation problems whatsoever. This alert has taken the world's aviation regulators by total surprise. And it's quite unfortunate because the FAA, rather than waiting for their normal process of if they don't like the FCC decision there's a way that you can challenge it or whatever, they just went to the bully pulpit to frighten the American people. So we're now waiting at least one month for this 5G to be turned on. And if it was left to the FAA, it could be indefinitely.

 

      It's a very concerning situation. It is not good for anybody who wants to invest. It's certainly bad for our ideas of how we allow the FCC to make its spectrum policy decisions and how we see the different agencies attempting to undo the unanimous decisions of the FCC.

 

      What's even more maddening about this is that it was a completely avoidable situation. The reason that we can have 5G networks and cable networks rolled across as new generations come out without a problem — they don't upset the other — is because we have a global standards process. The 3GPP consortium is professionally managed; it organizes the rollout of the standards. There is not — surprise — something like this for altimeters. You would think that, for something so important for life and safety, there would be such a process. The FAA is not on top of it, and that is not existing.

 

      In a larger picture, the other issue here is what's even more amazing. It's that the U.S. has been able to become such a leader under the circumstances that our spectrum policy — outside of the success we have with the FCC and commercial spectrum — two-thirds of our most valuable natural resources are radio waves, and they're essentially held by federal agencies. So if you want to talk about the administrative takings or the regulatory takings, just look at the radio waves:  They have been held by agencies which have never paid for them; they're not transparent about their use; they're very inefficient; and this hasn't changed for about 100 years.

 

      Those of you who want to join me in trying to challenge that and see that we can have a viable commercial spectrum policy, please see me after this event today. But that is our crisis today. And we're going to continue to see, any time a new technology -- a new wireless technology emerges, a new spectrum, we're going to have every other federal agency who fears that their holdings or their obsolete equipment is threatened, they will attempt to undo, in whatever way they can, the FCC's lawfully and unanimously made decisions.

 

      Let's take a step back for a moment. If we look at that $90 billion auction figure, it's quite staggering. But keep in mind that America's broadband providers are investing that much every single year, which is itself quite impressive. That is about 25 percent of the world's total private investment in broadband. So the USA is five percent of the world's population; we're enjoying 25 percent of the world's broadband resources. So it is a success story beyond our imagination, and yet it's portrayed in the media as if we have broadband problems, that it's broken, it doesn't exist, this, that, and the other thing. It is a tremendous success, for all of the imperfections that we can find, that the sheer amount of the investment is itself staggering.

 

      I would also suggest:  Why is it that we have to waste so much public money when private companies are willing to put up tens of billions of dollars to be able to provide broadband?

 

      As I think Commissioner Carr has pointed out so well, this $800 billion is a tremendous waste. To put it into perspective, if you go back to 2009 — again, another waste of money — there was no oversight for whether a lot of that money was used to buy Huawei equipment, ZTE equipment. I don't know if NTIA has any process for -- apparently, they don't have a security process for seeing what will be used. Thank goodness the FCC has stepped in because we can at least ensure that this insecure equipment will not be used. But I don't think the other agencies are checking for that.

 

      I want to give you a quick comparison to Europe. I'm a Danish citizen in addition to being American; I've lived there for over ten years. We see in Europe -- before this regulatory wave which began in about 2005 with unbundling, Europe used to account for one-third of the world's total telecom investment. Today, it's about 15 percent, and the market is very moribund. European operators moved their investments out of Europe, and they put them in the U.S. T-Mobile, today, is the result of investment being taken out of Europe and put into T-Mobile. They took their investment and put into the rest of the world. That's the only profitability they make, and they don't invest in Europe, and it's quite sad.

 

      But there, the European paradigm, if you will, was a notion of having an incumbent network — perhaps a government-owned network — and the access to that would be regulated where you could resell. You have a single network in the country, and then you resell the access, and somehow or other, magically, someone who could resell it would decide to buy their own network because they had climbed this proverbial ladder of investment. Well, surprisingly, after 16 years, we have not seen new investment in the European Union, quite sadly. But for those of you who have any intuition, why would you invest in your own network if you could use another at a regulated low price? So that is kind of the summary of the EU.

 

      In the U.S., we took a different path, which is quite important. We said facilities-based competition. We have allowed cable infrastructure, wireless infrastructure, satellite, fixed wireless, all kinds of other networks to compete to allow consumers to choose the technology, and that is part of our huge success in the United States.

 

      It certainly is the case that things are not perfect. We can go to rural areas and find that we would like to have more networks in certain places. Now, this is also a question around allowing the local providers or the consumers to decide which technology they prefer. Some may be preferable in some areas versus others; there are different cost advantages depending upon where you are. And then, of course, there are a lot of the regulatory barriers which are there, and Commissioner Carr has worked hard to remove those.

 

      But really, the biggest glaring issue is that, since the beginning of the internet, we have somehow taken a vacation from reality and said the technology provider — the content provider's apps and services — they don't need to participate in the program. We're going to just put 100 percent of the cost on the consumer, on the end-user. And in defiance of all other two-sided markets that we use every single day, like credit cards or newspapers or the internet itself, we're just going to let the trillion-dollar companies pay zero, and we're going to just let them send in all the traffic they want.

 

      In a recent study I've done, I've looked at broadband networks in rural areas, and for every dollar of video streaming that's put into a rural broadband network, it costs that provider 48 cents to provision that traffic. That's in the cost of the servers, in the electricity, in the warehousing, and so on. Now, that 48 cents they cannot recover through USF because of the rules, and they can't raise the price. And the five leading providers of video streaming — Netflix, YouTube, Amazon Prime, Disney+, and Microsoft Xbox — have no interest to reimburse that cost, and they're doing everything they can to never reimburse that cost. So I'm so pleased to see Commissioner Carr has said it's time for the free ride to end, and presently now there is important discussion around how we do that.

 

      Now he has suggested some ideas. I personally have an idea called the "free market" [laughter] with a good-faith negotiation which we would have the government oversee. But basically, we would force the streaming video providers to reimburse those costs or force them to come to the table because, today, they never answer the response of the rural broadband providers. They refuse to answer their questions. They are so big they don't have to.

 

      That is certainly one area that we can improve. We're talking on the order of tens if not hundreds of billions of dollars that could be put into the economy, into the broadband providers, to help them to build the networks, and that would make a huge difference.

 

      I would also suggest that given now -- you know, we have a lot of people here who work in antitrust. They are defending the large tech companies. I think it's great; I don't support the antitrust actions against them. But what I would say instead is that they should pay for the resources they use. They should not get free transit on the internet; they shouldn't get free spectrum access; they shouldn't have a lot of other free stuff. All the free stuff they get has inured them and made them -- it only exacerbates the problem of them being large players and continuing to exacerbate, if you will, these problems. But it would be a great way to get money back into the American economy, build the networks themselves. Instead of deficit spending, more taxes on end-users, there's a better way to go.

 

      Finally, I would just compliment again that, if anybody was at yesterday's panel with Ajit Pai and the separation of powers, there were a lot of horror stories about FCC and Congress and different federal agencies and the back and forth. But I want to end on a positive note because we have had a huge success story in the Secure Equipment Act signed just yesterday.

 

      As former Chairman Pai explained, back in 2019, they realized this Huawei loophole. From 2018 to today, the FCC had granted 3,000 more equipment authorizations to Huawei -- a bad thing. But fortunately, that has come to an end. The Secure Equipment Act which was signed yesterday was bipartisan; it was near unanimous — I think something like only four people didn't vote for it in the House, and it was unanimous in the Senate — and, in a matter of a week, was signed by the president. So that is how things can work. And this represents something very important for the FCC to do because consumers themselves cannot really find out which equipment they can use or not use. The work has to be done by the National Security Agencies. The FCC maintains the covered lists, and it provides the equipment authorizations. So this is a really important function that the FCC serves.

 

      The nice part about this for those of us who care about separation of powers is that we saw the FCC doing exactly as Congress instructed. And I want to remind you, when all this net-neutrality stuff comes back next year like a zombie, that any time the FCC is going to say, "Well, we have to do this on our own; we just have to act" — no you don't because we've just demonstrated in a bipartisan way with the unanimous Support of Congress that the FCC will do what Congress says it should do, not what it makes up itself.

 

      Again, thank you, and I look forward to your questions.

 

Hon. Steven Menashi:  Thanks very much. Senator Koch?

 

Hon. Eric Allan Koch:  Thank you, Judge. And thank you for the invitation to be here with you today to bring a state-level policy perspective. As a member of the Indiana General Assembly, I've been involved in state broadband policy for nearly 20 years, so I want to begin by sharing some historical context.

 

      I can recall, as a freshman member of the House of Representatives in 2002, being assigned to a new standing committee called the "Technology Committee," which was the first time we took a look at broadband from a public policy perspective at the state level in Indiana. I can remember finding out then that no one had any idea where broadband was and where broadband wasn't in Indiana largely because the telecommunication providers closely guarded that information as a trade secret -- understandable.

 

      From there, we developed a mapping process that promised confidentiality to the industry, but the maps generated still weren't very useful in the absence of policy direction. In 2006, we became one of the first states to deregulate telecommunication services in a race with Texas, as I recall, for who was going to be first. Deregulation was phased in over a three-year period starting in 2006, and rates and charges for retail telecommunication services in Indiana were fully deregulated as of July 1, 2009. That legislation, importantly, made a statutory finding that, "Competition has become commonplace in the provision of telecommunication service in Indiana and the United States," and that competition would become the substitute for state regulation of rates, charges, and service quality. In other words, we moved to market regulation.

 

      The result of that deregulation was an early and significant influx of investment in internet-based telecommunication services, albeit with most flowing to the most densely populated areas of our state, and beginning the digital divide with the more expensive-to-serve rural areas.

 

      As Indiana entered the next decade, broadband policy moved front and center as both a political and economic development issue. Later, it would become, in addition, a quality of life issue, particularly in rural areas. Then, access to high-speed broadband would ultimately be viewed widely as a basic necessity or, in essence, a utility service such as electricity or water with an expectation that government action should fix market failures to bring high-speed internet to all at affordable prices as soon as possible.

 

      So that was the context within which our policy over the past decade has developed. As Chairman of first the House Committee on Energy, Telecommunications, and Utilities, and later and presently as Chairman of the Senate Utilities Committee, I applied certain principles, as we made broadband policy, that continue to be relevant to today's policy conversation as we appear to be on the cusp of an unprecedented amount of federal funding earmarked toward broadband.

 

      Here are a dozen policy pillars that have worked well for us, and which I think provide a sound guide for state and federal broadband spending:

 

      First:  We promoted local deregulation at the local level. In 2015, we created a broadband-ready certification process for local communities to use to send a signal to the telecommunications industry that that community had taken steps to reduce barriers to broadband infrastructure investment, barriers that we had identified; specifically, things like the appointment of a single point of contact for all matters related to broadband development projects; the establishment of procedures to allow for the electronic submission of all forms, applications, and documentation required for a broadband development project; a requirement that all permit applications be approved or denied within ten business days after they are filed; and an assurance that all inspections related to a broadband project will be completed in a timely and expeditious manner.

 

      These procedures must also prohibit the unit of local government from requiring the designation of a final contractor to complete the project; imposing a fee to review an application or issue a permit; imposing a seasonal moratorium on the issuance of permits; and discriminating among communication service providers. Currently, 56 Indiana communities have become Broadband-Ready Communities.

 

      Second:  We require skin in the game. Recently, we established a state fund containing approximately $270 million. Providers submitted letters of intent for 250 projects covering more than 140,000 customer locations, requesting over $600 million in funding. However, our program guidelines require providers to have 20 percent skin in the game to get those grants.

 

      Third:  We don't support government competition with private capital investments. For many years, it was fashionable in many states to fund municipal broadband, and in many cases, it led to taxpayer bailouts. We didn't go down that road and won't.

 

      Fourth:  We don't subsidize overbuilding; we don't subsidize one company overbuilding another's facilities. To protect against this, we have a challenge process built into our grant program.

 

      Fifth:  We leverage the existing electric infrastructure of our Rural Electric Membership Cooperatives, the REMCs, by allowing them to use their electric easements to provide broadband and, themselves, get into the broadband business. This, more than anything, has done more to bring broadband to our most rural areas in the last few years.

 

      Sixth:  Our grant program uses a reverse-auction process to ensure projects go to the lowest bidder. Hoosiers without broadband access — and we define that as none or speeds below 25.3 — use a portal to report their need creating a reverse auction among interested providers. Those grants are also capped at $25,000 per line extension.

 

      Seventh:  No double-dipping. We prohibit state funding for projects that are receiving federal funding.

 

      Eighth:  Improved mapping — and we thank the FCC for its work on this — has enabled better allocation of funds. Previously, as you probably know, if one address in a census block had internet access, the entire census block was considered served for mapping purposes. This led to a lot of confusion, delay, and misallocation of resources.

 

      Ninth:  We reduce administrative delay and cost by adopting a dig-once policy that removes barriers that often prevent providers from deploying broadband or wireless facilities within highway rights-of-way.

 

      Tenth:  Although we specify minimum speeds for grant eligibility, we are technology neutral so as to avoid locking into outdated technologies.

 

      Eleventh:  We protected our nation's security by prohibiting public funds from being used to purchase equipment manufactured by an entity designated as posing a national security threat to the integrity of our communication network — do you recognize that language? — or communications supply chain under an FCC rule. We had more comments today — Huawei, ZTE, and others.

 

      And finally, Number Twelve:  We ensure accountability and fiscal integrity through legislative oversight by an annual audit of the broadband program conducted by our State Board of Accounts and reporting directly to the state legislature.

 

      These initiatives demonstrate that states, if allowed to innovate, can design criteria to ensure prudent and responsive management of broadband infrastructure funding. In our case, that was a market-based approach that followed the removal of existing regulatory barriers at the state and local level and with vigorous legislative oversight of the process.

 

      With that, thank you for the opportunity to share Indiana's story, and we look forward to your questions.

 

Hon. Steven Menashi:  Thanks very much to our panelists for those opening remarks. If anybody in the audience has any questions, we ask that you line up at the microphones that are on both sides of the room, and we'll call on you as you gather.

 

      In the meantime, I'll just throw out for the panel:  Since the topic of the panel involved federalism, maybe I could ask you to reflect a little bit on the strengths and weaknesses of our federalist system. My understanding is that there have been some critics who unfavorably compared the U.S. to other systems because they think that broadband infrastructure is a problem that needs to be centrally planned and addressed. We've had a little bit of a hint from the comments that we've had so far about some coordination problems between the federal government and states, and I wonder if there's some strength to it or if it's something to overcome.

 

      Why don't you start?

 

Hon. Brendan Carr:  Well, it's interesting from a couple of perspectives. One is that there were some efforts, including within some factions inside the Trump administration, that were floating this idea of attempting to sort of nationalize the wireless networks. What we all saw in 2016, 2017, was that we were falling behind China. And some people thought that we should try to out-China China and sort of centrally plan and control a nationalized wireless player. Even some later said that one response to Huawei would be for the U.S. government to purchase one of the equipment vendors and help them compete with Huawei. So we saw some efforts to do that, and obviously, we rejected that at the FCC and doubled down on sort of America's capitalist entrepreneurial system.

 

      The other tension we saw goes to what I mentioned with Indiana which was, at the federal level, we put in place guardrails that put limits on the fees that state and local governments could charge to build internet infrastructure when we imposed shock clocks on their actions. We had some people — and I get it — whenever you have someone in Washington telling a local regulator, "You can't charge 'x' to review a small-cell permit, and you've got to act within 'y' shock clock," there's going to be tension between federal and state. And there were people that said, you know, we're preempting too much; we're not respecting the role of state and local officials. So there was certainly some tension there.

 

      But to your point, we were looking at a need for a nationwide buildout of 5G, and the reality was there were some big must-serve cities — like San Francisco, like San Jose, like Manhattan in New York City — that were charging exorbitant rates because carriers had to go there. And to some extent, God bless the local officials there. San Jose was charging a million dollars just for carriers to sit at a table and negotiate high per-site fees to build 5G. And again, God bless San Jose that they had the luxury to do that. But what that did was it sucked up capital that was needed to go to the outlying smaller and rural communities. So we had to step in — obviously, we thought, rightfully so — at the federal level and regulate, there again building off of the ideas that we learned in Indiana.

 

      That was challenged; we went to the Ninth Circuit, and we won that case on the idea that we did have the authority to do that. So yeah, there is some tension there between our goal of a federal build and sometimes the local interest in maximizing the amount of money that they can get while also getting 5G. But thankfully, I think we struck the right balance there by looking to some of the state laws.

 

Hon. Steven Menashi:  Does anyone else have reflections on this federalism question?

 

Dr. Roslyn Layton:  Well, I would just point out, living in the European Union -- I think one of the advantages we have in the U.S. is we have a truly federal system, which is important for mergers and acquisitions.

 

      One of the challenges in the European Union is that there will be different authorities. It will be Brussels or your national competition authority depending upon if you want to make a merger. And I think with some things very important — for example when T-Mobile and Sprint merged — that that could happen. It took a while; many states were opposed to that. But that's quite important from the 5G perspective.

 

      But if you stand back and say -- if you look at the United States, you have three 5G networks covering the entire USA. That does not exist in Europe today. You have so many multiple carriers there covering their particular country. That's not Pan-European. And the value of federalism is that you can get that coverage; you can maximize technology availability redundantly to people across the entire USA.

 

      So the economies of scale of federalism have been so important. And I think this is what the European Union attempted to do but have unfortunately failed quite miserably. And even as early as 2014, the European Commission was raising the flag, saying, "We don't have enough 4G networks; we can't build across the way they can in the USA." So it's really a strength. I know we all will discuss how imperfect it is, but on those levels that you can do a merger in the U.S., it is an important benefit for American enterprise.

 

Hon. Eric Allan Koch:  I would just add, in addition to the traditional federalist tension pertaining to states and the federal government and in state legislatures, we have our relationship with our local units of government. As I mentioned, in our work, we found in many cases — sometimes intentionally, sometimes unintentionally — local units of government erecting barriers to these objectives. So we went through a process, as I talked about, that identified those barriers and gave them the opportunity to remove them. So for us, it was this three-level approach, and I think, as you've heard, we like to think that we did well and have led the way. And once again, states, if allowed to innovate, can provide a lot of solutions.

 

Hon. Steven Menashi:  Why don't we take a question from the audience? Why don't we go first to this microphone?

 

Ed Hearst (sp):  Thank you very much, and thank you all for appearing on the panel. My name is Ed Hearst, and I have a question about cellular service in rural areas where it's not right now. Many Americans face this problem as they can't use their cell phone near where they live or where they travel. I'm wondering what your thoughts are on that, in particular in regions where fiber is just too expensive to lay. What are your thoughts on using low Earth orbit satellites or other forms of wireless connections to do the cellular backhaul? And in all these bills, where is the money for that kind of thing? Thank you.

 

Hon. Brendan Carr:  Yeah. I've had a chance, getting outside of D.C., to see firsthand the challenges. I've driven a lot through rural Montana and seen my phone go to zero bars. I've been halfway out the Aleutian Island chain to Dutch Harbor and have had zero service on my phone. So I understand the challenges.

 

      There are a couple of things that we need to do. One, your point about technology -- we've got to be technology agnostic. There was a big push early on in the Biden administration to put a very heavy thumb on the scale for fiber and effectively only fund fiber solutions, and I think that's a very big mistake. We have to leave every single solution on the table. I think low Earth orbit satellites are going to play a role. It's not going to be a massive portion of the population that's going to get on there, but when you're looking at that one to two percent of the most difficult to serve, cost-wise, that's important. Again, you're talking about $80 billion; 40 billion was the estimate to get 98 percent of the country in fiber. The other 40 billion was that last two percent. So that's where we need fixed wireless, LEOs, other technology, to play a role.

 

      Another piece of it is the 5G Fund. You know, we laid out a process at the FCC for putting -- I think it was -- I can't remember the number -- 7, 8, 9 billion -- you lose track at a certain point -- dollars to support 5G builds in rural communities where there's no private-sector case because of the cost of building. In order to get that 5G Fund going, we have to finish our broadband maps that we're talking about so we know where it is. So we need to do that at the FCC, as well.

 

      Again, we can't be for a specific technology. I was in a small town in north Idaho, and they put up a fixed wireless connection. Basically overnight, by turning on this fixed wireless connection, they were bringing high-speed service to that community. If we had waited to build fiber there, there's two problems, and one is cost. It was about $350 per household for fixed wireless, whereas building fiber was $3,500 per household -- a big difference. But almost more important than that is the time. Virtually overnight, you get high-speed service through fixed wireless, and yet it would have been four to five years or more to get fiber to all those communities. So if you're someone who says, "I want fiber only," what you're really saying is, "I want people to wait on the wrong side of the digital divide for years to come." I don't think that's a good position — not that I feel passionate about it.

 

Hon. Steven Menashi:  Do you want to address that?

 

Hon. Eric Allan Koch:  Yeah, just briefly. Like many states, we have any number of what I call "mom-and-pop" rural wireless providers popping up — even sometimes without even any subsidy — filling that niche. So one reason we're technology-neutral in our policy is this isn't a silver bullet; it's a silver buckshot solution, and we've heard some here today.

 

Hon. Steven Menashi:  Thanks very much. Why don't we go to that microphone?

 

Questioner 2:  Thank you so much. I appreciate all the knowledge; it's been really interesting.

 

      I'm probably outside the target demographic, here. I am the CTO of a venture-backed blockchain startup out of New York City. One of the things that I've been seeing as I've explored sort of a legal space is the blockchain world has taken on the opinion that these problems can be solved peer-to-peer. There are a couple of these cryptocurrencies — namely, NKN and Helium — where they create a financial incentive for you to just give internet peer-to-peer locally to the people around you, and the market caps of those currencies have exploded. So I'm curious just what the thought process is on some of these protocols. Is this something totally off the radar, or do you think there's potentially a way to create maybe a policy incentive to get last-mile coverage through peer-to-peer protocols like this? If it's too obscure a question, I can totally appreciate that, but thank you.

 

Hon. Brendan Carr:  It was a little bit obscure, but we'll get an NFT made of this conversation, [laughter] and that should square the circle.

 

      There's always a tension at the FCC between policies that we put in place that are going to, from some people's perspectives, benefit large providers versus policy dials we can turn that are going to give smaller providers a fairer shot to compete. And there's all sorts of ways that you can do that. But it is a tension. I mean, the answer is not a significantly large portion of the population served from sort of peer-to-peer, mom-and-pop. We need just massive investments, so you've got to blend it with big providers with big pockets that can invest heavily in the infrastructure with the opportunity for innovative things to sort of pop up around the edges. But I do think it's an edge play. It may be a significantly good financial play, I don't know; but it's an edge play from sort of the national perspective of what we need.

 

Dr. Roslyn Layton:  First, I appreciate your entrepreneurship. I think it's great. This is the American spirit where you'll have entrepreneurs try things, and it's great trying it in New York City. You've got a lot of financial innovation going on.

 

      I think — and again, I don't know your particular solution in detail — there is the challenge of energy use, and some blockchain solutions are not always the most energy-efficient. I don't mean to debate you, but that can be -- one of the next frontiers in telecommunications are the greening of the networks because, when we look at, as we're going forward with 5G and next-generation networks, the amount of devices that we're going to be connecting to the network, they're growing exponentially, so the energy use is going to explode as well.

 

      To what extent blockchain will integrate with that versus other technologies and where we already know that today's broadband providers are trying to integrate and build in the energy efficiency of their program and how fast can blockchain get up to speed, you also have to think about quality of service and expectations of the customers — how many you can get involved — there's all of those issues that are there.

 

      But to me, I think that that's where we are today with blockchain, where it has some -- there's still certain obstacles it's trying to get through, which also includes regulatory from that side. I mean, we can talk all day around the wrong regulatory frameworks for cryptocurrencies and so on, but there's certainly tremendous promise, and I applaud you for exploring that.

 

Hon. Steven Menashi:  Thanks. Why don't we go to this one?

 

Sean O'Donnell (sp):  Hi. My name is Sean O'Donnell. I am a municipal attorney for a small city in a rural area. We have a lot of farmers who want broadband technology for their precision farming. As background, I used to write a lot of wills and do criminal defense, and now they threw me in front of public officials, and they want to know how to solve this broadband issue, so I don't know. [Laughter] This is very enlightening; thank you.

 

      My question is how would you advise them? Is there a way -- anything that small communities can do so that we don't get left behind? Should we shred our zoning codes? We're not San Jose, unfortunately, where we can charge those exorbitant fees. And, Senator, we're about 35 miles too far east to take advantage of your program; we're in Ohio. I'm just wondering your thoughts. Thank you.

 

Hon. Brendan Carr:  Yeah, that's a great question. I mean, farms and ranches have just massive needs for internet connectivity, and most people don't really think about that. If you think about precision ag, I think a lot of people conceive of a weather vane or a soil-sample monitor that has, like, a small amount of data. But the reality is, for every single plant, you can extract something like 18 gigabits worth of data from it between different sensor technologies, imaging technologies, to sort of really take advantage of precision ag. To put that into perspective, that's about double the amount of data that the average smartphone user does every single month.

 

      So the way to put that into perspective, if you look at an acre of cropland, conceive of every single plant in your mind as a smartphone, and that gives you a sense of why we need high capacity service in rural communities. I was outside of Indianapolis, in Arcadia, Indiana. I went to a farm out there — among many other ones — and these combines and other farm equipment are basically mini data centers. So we've got to get high-speed connectivity there.

 

      There's a couple of ways to do it. One: There's never going to be a private sector business case to do that, which is why we have the Universal Service Fund, which is why we have the 5G Fund; regulations matter. Again, Fishers, Indiana — a small town — got small cells in investment there because they rolled out the red carpet through modernized zoning and other regulatory frameworks.

 

      The other piece of it is, again, we've got $65 billion that's going to come down from the BIF that the president is going to sign on Monday, and again, a significant portion of that is going to go to states. So you need to work with your state, with Ohio, with the governor's office. Hopefully, they have a broadband office there in the governor's office. There's going to be a lot of freedom and flexibility as to how that money is spent, and I think it needs to go into connecting communities like yours. So probably the most important thing is to get in touch with the governor's office about the 65 billion that's going to the Commerce Department that's going to come out to states through grant programs.

 

Hon. Eric Allan Koch:  I would say take a look at our Broadband-Ready Communities language in Indiana; I'd be happy to talk to you afterwards and point you in that direction.

 

      Your question also underscores an important point that I want to make which is to define what problem you're trying to solve. When someone says — and we see the surveys — "I don't have broadband," that could mean many things. We assume it means, "I don't have infrastructure coming to my home or business," and in most cases, that's probably what they mean. It could also mean, "I have broadband available, but I can't afford it." It could also mean, "I have broadband available, but the speed and service quality are not what I need to do what I do or my family needs to do." Or it could mean broadband is available to that residence, but the customer isn't comfortable with adoption or, in some cases, chooses not to.

 

      So it's important to define what problem you're trying to solve because each of those four has a different solution and a different set of policy choices especially when we are engaging at a point where we're using taxpayer money to fund cases where a business case doesn't exist. So I think it's just critically important, when broadband is not available, to develop a deeper understanding of what that means in your community or different parts of your community because availability means different things to different people.

 

Hon. Steven Menashi:  Why don't we go to that microphone?

 

Brooks Harlow:  Thank you. Brooks Harlow with Technology and Communications Law[JRF4] , so I'm officially a telecom nerd with Commissioner Carr. I don't really have a question, but we've got time, so I'm going to [inaudible 01:37:50] [laughter] --

 

[CROSSTALK]

 

Hon. Brendan Carr:  What, a song and dance? What are you doing, Brooks? [Laughter]

 

Brooks Harlow:  -- I've been working 40 years in this space. It started out with, "Should we charge 50 cents a month for touchtone service?" and now we're talking about bits and bytes and the internet, and it's been a wild ride and a lot of fun.

 

      I've worked mostly with startup companies, not big incumbent companies, so what I've seen over the years and still see today is that it can be very difficult for a startup or for a rural company that maybe is even in a traditional industry — like, say, one up in Dutch Harbor, Commissioner — to break in. And some of the barriers that we run into as a small company or a startup are things like getting roaming agreements; things like getting handsets developed for a new network; things like getting content for a broadcaster or an internet provider.

 

      And what I think I see -- I'm not an economist, but what I think I'm seeing is that large companies that may not be monopolists from the perspective of the Sherman Act because they're big but they don't have — they maybe have three or four competitors — but nevertheless, they're effectively monopolists when some little company that has three or four hundred customers comes to them because they just don't care. You don't even show up on the radar screen. Getting their attention and getting them to do what you need to do can be really difficult. And then, in other areas, new technologies can be a threat. You know, if you're going to bust the paradigm, maybe shake up the industry if you get a toehold, there may be a resistance to dealing with these startup companies.

 

      So all right; let me try and turn that into a question:  Basically, what are your thoughts on small companies and startups, and do you think that the existing laws — the fair-trade laws, the antitrust laws, the communications laws — are those adequate to enable these companies to get a toehold and to serve rural America and to provide new kinds of services and more competition, or do we really need to go to Congress and see some changes? Thank you.

 

Hon. Brendan Carr:  Let me ask -- let me answer a better question, Brooks. [Laughter]

 

Brooks Harlow:  Friendly [inaudible 01:40:20].

 

Hon. Brendan Carr:  Exactly. Let me answer it this way, which is sort of to talk about it from the technology perspective but to talk about it from sort of the big-tech perspective, which is, in my view, we're living in a situation in which we've never had such a wide, wide gap between the power on the one hand that's wielded by these large technology companies and accountability on the other. It's just a massive, massive goal.

 

      I do think that we need to change competition policy. I think we need at least some updated thinking on the antitrust side. I've not weighed in on whether we need new standards or whatever, but I do think we need some updated tools to look at these companies through different competition lenses because we don't have slow-moving monopolies anymore. It's not like you're building a railroad and you can see it happening and the amassing of power is slow and visible. In the digital space, you can get to gatekeeper power — if not monopoly power — and scale to it so quickly. And so much of our thinking and doctrine is about regulating and identifying slow-moving, slow-building monopolies. So I think that's a challenge for regulators and a challenge for the doctrine, and I do think that we need to step in.

 

      The FCC has a role. I think we need to provide updated guidance on Section 230. I think we need to look at state law and federal law about imposing affirmative antidiscrimination obligations on large technology companies. And I think that there's a lot of running room left for us as conservatives to say, look, the idea that government is the greatest threat to individual liberty is still there. The government is the only one that can exact capital punishment, that can put you in jail. And I think conservatives have rightly been so focused on that, particularly coming out of the 1980s, from sort of the libertarian thread that sort of influenced a lot of conservative thinking. I think that what that resulted in was blinders to the fact that there is an additional threat to individual liberty. Yes, it's government; and yes, the solution of the '80s of shrinking government was a good way of doing it and getting them out of our business. But now we have the rise of these corporations that are a very large threat, in my view, to individual liberty, whether it's the tech platforms and all the censorship that they're doing, or moving beyond that.

 

      And so I think conservatives were slow to pivot from, "The government is the greatest threat to individual liberty," misinterpreting that as the government is the only threat to individual liberty, and saying we should just sit on our hands and do nothing as large corporations act in ways to squelch individual liberty. So we need to step up with the use of government power to hold these large technology platforms accountable to get to the core purposes of the conservative movement which is to preserve individual liberty. But it's going to take something other than sitting-on-our-hands libertarianism to do that, given the way that large technology companies are operating.

 

Dr. Roslyn Layton:  Let me add on that. [Laughter] I think Commissioner Carr has made a very powerful case. I certainly agree with this notion about equity; that's all the rage today, and we see a lot of inequity, if you will.

 

      I'm slightly skeptical just because of the experience of Europe. If we go back to 2014 when Margrethe Vestager came in as the Vice President for Competition for the European Union, this has been a gift to big tech. European regulations have done nothing but increase the market share and profitability of American platforms in Europe. Essentially, the whole notion about the European Union, which was going to be European companies trading goods with one another, has turned into Amazon selling Chinese products to Europeans. I think it's great for Amazon; they have an amazing experience. It's seamless; it works better than a lot of European platforms. There's nothing wrong with that and we benefit. My concerns are I don't know, the proposed solutions, how and whether they'll work because we know that, whatever we try to do, big tech will make it work for themselves. They're already embedded in government today. There's a revolving door between those companies and this administration and every administration. So I'm skeptical that all the right intentions will produce the result that we think.

 

      Now as a pragmatist, what I would prefer to do is to get the large companies to pay for their share of other people's resources and for the public resources. That is why they should pay for their use of spectrum; they should pay for their use of other people's networks. I'm not a copyright person; I know there are issues there. So I'm less excited about regulating them. And God forbid we make another monstrosity digital platform regulator. The Federalist Society will have to make a whole new section to deal with that. [Laughter] I'm sure all of you would send your kids to college on that program. But I guess what I'd say is I'm more interested to get them to contribute to our society for the use of our resources. And that is a way to get the money in the economy rather than thinking that we can somehow regulate it to make it fair. There may be some combination.

 

Hon. Steven Menashi:  Well, can I just ask — related to that — I know that you had this study that said about 75 percent of the traffic on all the broadband networks were from the streaming services, from these big streaming services like Netflix --

 

Dr. Roslyn Layton:  Yes.

 

Hon. Steven Menashi:  -- and upwards of 94 percent of the cost that's associated with expanding them --

 

Dr. Roslyn Layton:  Correct.

 

Hon. Steven Menashi:  -- is attributable to that. So does that -- I understand that we have this idea that that means maybe we should ask the streaming services to contribute to the cost, but does it also suggest that maybe the whole policy should be reevaluated somewhat? I mean, is it really a priority to increase access to streaming services? Maybe there should be a narrowly tailored public policy that doesn't just build off this infrastructure for these companies.

 

Dr. Roslyn Layton:  Thank you for asking that, Judge.

 

      You know, I sit in Copenhagen, and I study internet policy around the world. And what I have found when I look at traffic studies is, on one level, it's wonderful. Ninety-nine percent of the world's traffic goes to one percent of the world's destinations, and they're largely from the USA and now, increasingly, Chinese, which itself is a form of competition even though they don't play by our rules.

 

      But I think the point that the Judge is raising is an important one. As it is today, the downstream traffic on wireline networks is overwhelmingly going to four or five destinations. Now you could change that; if those companies decided to reformat some of the design of their services, it could become more efficient. Of course, they invest a lot in that today. Short of redoing all of public policy, what are the incentives for them to make their traffic more efficient or to support the cost of the network?

 

      The interesting thing — which I think a lot of people don't realize — is if you take an 80-20 view of our networks, the socially valuable part of our networks — public safety and education and work -- Upwork and all these kinds of parts — takes up very little data. Some of the most valuable communications you'll do will be a 2G SMS or a 3G SMS that you could make. But that doesn't require high speeds. So we have -- in some ways our definition that we always just have to have higher speeds at a low price, that is benefitting just entertainment. If we look at traditional telecom policy — we've talked about universal service — it's not supposed to make entertainment universally available. And a lot of what's behind the whole broadband push, the 65 billion, is a reward to the entertainment industry that is not deserved, especially when they're not paying for any of it.

 

      If you actually thought about provisioning the networks for what's socially valuable, you might begin to look at the technologies a little bit differently; you may be more flexible about the speeds. It could also help, as we talked to this gentleman here in Ohio -- what's socially valuable may be precision agriculture, not having more Netflix available. Not that I'm saying there's something wrong with that, but if you prioritize, you may have a different outcome.

 

      A quick example is Greenland -- 50,000 people. They have been doing telemedicine since 2008. They said it's most important for our people to have health and education first and foremost. Before we're making sure movies can be seen on the network, we're going to make an intranet available so all the school kids who are in Greenland can study the same things as people study in Denmark. And then there is an availability of the Danish Royal Hospital -- they can get access to those services in Greenland. So under that extreme conditions, they're able -- because they've decided that's how they're going to provision their network. And engineers can solve a lot of the problems, and they look at it differently than public policy.

 

      One of the worst things that we thought was that all data is equal; it isn't. Some data is more valuable to us, and we should understand and allow our network providers to work accordingly to make what's valuable for that community.

 

Hon. Steven Menashi:  Do you want to --

 

Hon. Brendan Carr:  No, I have nothing more to add, really. I thought the Greenland example is interesting although it did bring up some old wounds because they snubbed our overture to make them part of the U.S., but that's okay. We'll --

 

Dr. Roslyn Layton:  We should have bought them back in 1948.

 

Hon. Brendan Carr:  Yeah. It was a great deal for them, but they didn't take it. [Laughter]

 

Hon. Steven Menashi:  I guess I have this question in particular:  Do you think — since you said this question about the tech companies — if in fact a lot of the traffic on the broadband networks is supporting entertainment streaming services, does that lead one to question whether the objective is just increasing the infrastructure, period, as opposed to doing something more targeted or limited?

 

Hon. Brendan Carr:  You know, we need the infrastructure out there. And you can't really parse it -- get the infrastructure out there but only use it for "x." That becomes a challenge. But I do think what is right, here, is to think about the fact that we have this Universal Service Fund that you don't have a choice on, you're being forced to pay into, and is it effectively predominantly supporting the distribution mechanism for large technology companies, and if so, how should we modify our public policy? Should you be on the hook for, in the main, 100 percent of the cost of Netflix's delivery method, or should Netflix start to pay a fair share, a contribution, towards supporting it? I think that's where I would take that conversation.

 

Hon. Steven Menashi:  Why don't we go to this microphone?

 

Questioner 5:  Thank you, everyone, for a great panel and a great discussion, and it's great to see an Indiana senator here. I'm a proud citizen of Tippecanoe County, myself.

 

Hon. Eric Allan Koch:  Oh, terrific.

 

Questioner 5:  My question relates to securities. I think, earlier in this panel, there was a pretty broad consensus among you all around hardware security, in particular making sure Huawei and ZTE equipment doesn't end up in American networks, and I think that focus is great. But from my perspective, it only really touches one percent or less of the surface area of security, and I think, even without any Huawei or ZTE equipment anywhere in our communication infrastructure, it's probably still the case that Xi Jinping can call up the PLA one day and, the next thing you know, our network is getting wholesale disrupted.

 

      So I'm curious as to what your thoughts are on solutions for tackling network security as a more comprehensive matter than just hardware. You know, it's very easy to say either in statute or regulation, "Thou shall not use ZTE or Huawei or whatever other manufacturer of hardware." It's much harder to say much more holistically, "Thou shall give a damn about network security from the software layer on up." So I'm curious -- and I guess federalism makes this doubly interesting because the weakest link in the network determines how secure it's going to be, and the weakest link is going to end up being the jurisdiction that cares the least or invests the least in network security writ large. So I'm curious what your thoughts are on a comprehensive solution for network security in our federalist system.

 

Hon. Brendan Carr:  It's a good question. It's one that we're tackling at multiple levels. As you pointed out, we have prohibited Huawei and ZTE gear from going in. We're closing the loophole that let it go in with private funds. We are prohibiting carriers themselves, wholesale, that pose a threat to our national security from doing business here. China Mobile, for instance, we denied their authority to connect to the U.S. networks. And we are also starting to -- well, there's a lot of work going on in the cybersecurity side; principally, though, that happens at DHS, not the FCC. But we're sensitive to the idea that software is an increasingly important — obviously — component of these networks. And when you have foreign-based entities that are playing a role with respect to the provisioning of software and software-based services inside networks, there's a potential threat there. And there's some interest in taking not just the general cybersecurity actions that we are taking but to specifically target it at some of these foreign, what we call sort of "managed services providers."

 

Dr. Roslyn Layton:  Thank you for the question. You know, two years ago, I started a little think tank called "China Tech Threat" to answer exactly your question. My concern at the time was so much focus was on Huawei that I felt that, "Oh, if everybody thinks we address Huawei, then the work is done." And if you understand a network, you have many layers. You have not just transport security; you have processing, storage, end-user devices; you have privacy policy -- then to say nothing of the practices of the Chinese government.

 

      So let's be clear:  I think the FCC has been so consequential. And why I have been so pleased with their efforts was because, in general, my view is the U.S. is a very software-centric country that I think we've over-focused on software, forgetting hardware risks. And the FCC has really sped up in the last two or three years to try to address those things.

 

      Huawei is just one part of it, but look at your laptops, the servers, the end-user devices. Motorola was once a U.S. company. It's a Chinese company today; it's owned by Lenovo. There are some decisions we can't undo. Why did we allow IBM to sell its server division, its laptop division, to the Chinese laptop -- Lenovo company? I mean, it's absurd. It's on the order of Huawei. And now that is the world's largest laptop maker, and we created that. Unfortunately, they took a well-known U.S. brand, the ThinkPad brand, and made it a Chinese brand. The same with GE refrigerators; Haier bought that. So there has been this -- hardware is a major issue. The FCC cannot solve everything, but they are at least prioritizing the top risks; that was with Huawei and ZTE.

 

      They've looked at the cameras — you know, Hikvision and Hytera cameras — unfortunately deployed in lots of schools, municipalities, banks. That data of your face goes into a Chinese server. It can be processed in China, applied in social credits, put into a Chinese database of Americans which has existed since 2015 -- so all of that. TikTok, for example. If you go to the -- there's still an ongoing proceeding at the FCC on the covered list, and you can -- and also a credit to Commissioner Carr, talking about DJI drones should be added to the covered list. Personally, it may not be the remit of FCC, but look at semiconductors which have kill switches embedded in electronics devices. We have a major Chinese military semiconductor fab in YMTC producing chips that are bound for the U.S. market. We are allowing top-end semiconductor equipment to be sold to them in violation of our export control rules.

 

      So there is a lot to be done there. I think your point is correct. The FCC is doing what it can. You don't want to get so nihilistic to sort of throw in the towel the same way the Air Force CTO who just resigned said, "It's game over; China is already going to win." There are some people who are just totally despondent. I think the FCC has made very important steps. There's still a tremendous amount of work to do. I hope you'll check out our website chinatechthreat.com. You'll see where we try to pull together this discussion.

 

      This is an area where I wish it could be enough for consumers to make the right choice, but it isn't because your state government is buying -- was for a long time buying insecure equipment. And whether you like it or not, it puts your personal data, enterprise data sorts of things in there, so it is really a major problem. And it is really a whole-of-nation approach. We have to step up.

 

      We have other challenges of not making things in the U.S. anymore. Again, this is not the FCC's job to fix, but this is a challenge. I will commend the TIA, Telecom Industry Association, where they have been very supportive of restricting the Chinese-government-made equipment and also trying to promote the standards. Other things, like looking for vendors that are not owned by the Chinese government and trying to buy those kinds of products. There are so many more things that we can do. And then being smarter consumers.

 

      So there are really so many layers here to have a secure society. In the past, we didn't care about it; we thought China wasn't a threat. "Just buy stuff cheap; get it deployed; great." That was maybe the policy at the time. Now we can't live like that anymore. We have to start caring about our security and paying for it.

 

Hon. Steven Menashi:  There was some suggestion that maybe federalism made the problem more difficult. So can I ask, at the state level, are you considering those security questions?

 

Hon. Eric Allan Koch:  Well, the gentleman's point is good. I mean, the federalist model states have to be engaged because, in a networked world, we're only as strong as our weakest link, as you point out, and we've got a lot of work to do.

 

Hon. Steven Menashi:  Okay.  Let's go to this microphone.

 

Jay Payne:  Thank you. My name is Jay Payne, and I previously served as an attorney with the U.S. Department of Transportation.

 

      I'm not as familiar with infrastructure expenses and program [inaudible 01:59:18] assessments that go involved with building up our nation's digital infrastructure, but I am trying to draw some parallels to traditional infrastructure. I'm thinking of roads and bridges; I'm thinking federalism; how U.S. DOT works with state DOTs and local planning agencies at the local level. And I'm trying to think are there any best practices or similarities that the two different infrastructure industries could be learning from one another. I'm thinking of your point earlier about a single point of contact, when I was working on some of the NEPA reforms, and having one federal decision. We heard a lot of good feedback from state DOTs that that was a very helpful advancement in helping build our traditional roads and bridges infrastructure. So the question is whether there are lessons to be learned from either of the infrastructure industries that could be utilized in each others' practices. Thank you.

 

Hon. Brendan Carr:  I think there's a lot to be learned. Most fundamentally, we had these "dig-once" legislations; if you are putting in a road or a bridge, put some conduit in there so that you can later run fiber through it. That significantly drives down the cost. So there's a lot to be learned there.

 

      But there's also important differences, the most core difference being, of course, competition. And this concept that we should — which is not the point you are making, obviously — but that we should regulate the internet like we regulate utilities because it is so important is right in a sense that the internet is so important — like a road, like a bridge, like water, like power, like sewer — except we want competition for internet. You don't want competing roads, competing sewer lines, right? You don't have a choice of, like, where your sewer goes; that doesn't make sense. But in a digital space, we want multiple choices. And so we cannot impose the same legal regulatory framework on the internet that we pose on physical infrastructure that is a monopoly service with no choice. So the conflation of the value to the person of these infrastructure goods with the key difference of wanting competition and multiple providers in the broadband space is something that we need to keep in mind.

 

Dr. Roslyn Layton:  Thank you for coming to our session. I love it when the different practice groups can slum in each other's sessions. It's a great way to learn.

 

      When you study telecom policy, you go back to the railroads because of the Interstate Commerce Commission -- a lot of American telecom laws deriving from that. And personally, I do study a lot of different transportation infrastructures, and it's quite interesting where there's a lot of regulatory obsolescence across the transportation infrastructures. So what happens -- if you know the story about the ICC — which, at its height, had something like 3,000 people, and the Staggers Act in 1980 brought that down to what today's Surface Transportation Board is — that was very important in America's history to deregulate the railroads, and that was a tremendous success. Similarly, we did the same with the airlines -- huge gains for safety because there was a uniformity of planes. That deregulation allowed the innovation in different kinds of aircraft, which itself is probably the most important factor in airline safety -- learning a lot about this because of altimeters. [Laughter] I've done the deep dive on that.

 

      But the other thing I'd say is what you have going on in transportation today, the same as telecommunications — just as Commissioner Carr said — is intermodal competition. Look at Amazon Prime where they have ordered a fleet of electric vehicles that are built ergonomically to bring the items to your door. They don't even want to deal with FedEx and UPS; they're just going to have their own trucks. So that is a fascinating development.

 

      I would look at the American Society for Civil Engineers; they have a report card. And what I find so telling about all of the infrastructures in America -- what is the best grade of all? You get a B+ for freight rail. What is the difference between freight rail and every other infrastructure? Telecom is not in that study. But the difference is freight rail is privately owned. America's freight rail networks are privately owned. They have a high-level investment. They invest tremendously in safety and positive train control. And interestingly, they're suffering some of the same regulatory obsolescence challenges. So there's now a move to try to do net neutrality for the freight rail in something called "reciprocal switching," which is where the chemical industries who ship their goods on freight rail want to have price controls. Meanwhile, there is any number of possibilities for shipping your goods. And it's a global industry where you're looking at the shipping, you're looking at the logistics providers, the trucks. And then all of them are competing on emissions and green characteristics.

 

      So there's actually a lot to learn by studying telecommunications, vice-versa, but to me, the common thread is private investment. That was really important, pre-pandemic, that the ones that could have a high level of investment could weather the storm of the pandemic well. And then the other thing I'm looking for is where does the regulatory zombie emerge? Because that agency becomes obsolete. So they need to find a new constituency, and they need to invent a new boogeyman to justify their existence. We have an amazing FedSoc member, Jonathan Macey, who has written the article about regulatory obsolescence. I paraphrased it and looked at -- compared telecom and transport, but this is one of the challenges that you have is a race between the innovators and the regulators. And not to be too banal about it, but where you have the obsolete agency, they will try to reinvent with some new concept to secure a new constituency and to find a way to reregulate the old network as opposed to saying, "Let's let the infrastructures compete." And again, why do we have success in the USA in telecommunication? It's infrastructure competition.

 

Hon. Steven Menashi:  Thanks very much. Let's go over here.

 

Richard Benson:  Thanks for sharing your wisdom with us today. I'm Richard Benson, an attorney in Chicago.

 

      I was struck -- when we were discussing the digital divide, we have kind of a very technical lens focusing on the more rural and agricultural. And I think, every time I'm not in a technical panel like this, digital divide is almost always used as a reference for inner-city, poor, lack of access to education; especially Chicago public schools do not do well with virtual. And I'm curious — from especially a state perspective — if the states are getting control of the bulk of the money in the infrastructure bill, is there going to be a tension at the legislative level from putting the money in more inner-city and urban settings versus rural, and is there a way that we can maybe accomplish both goals?

 

Hon. Eric Allan Koch:  Yeah. Your question underscores a comment I made earlier in response to the gentleman from Ohio. It's really important that you define what kind of problem you're solving. And in the inner city digital divide, it may not be a lack of infrastructure to that home but lack of ability to pay, in which case a subsidy, maybe in the form of a voucher, rather than paying a -- or subsidizing a carrier to build into that home. So I think, again, it's really important to decide what the problem is because there's a different policy choice and different solutions for each of those problems.

 

      Now in terms of what's coming down to the states through Washington, we adjourned earlier this year, and in essence, we sewed a pocket because we weren't sure what, how much, and what strings. So in the case of Indiana, I know you've heard the principles that we tend to work from that, to the extent that we have discretion over building that framework, that's largely what it's going to look like.

 

Dr. Roslyn Layton:  Just a quick thing:  I would suggest you look at Telecom Policy Research Conference because today we're talking mainly supply-side; we're not talking demand. The user picture is very different. When we look at it from the user side, a lot of challenges — and I think you pointed to this — many people have a -- why might they not adopt? They don't feel the internet is valuable, right?

 

      For example, how did Denmark solve the solution to become a leading digital nation? Well, the government put all of their services -- made it digitally. Now that scares Americans -- completely understandably. But if you have a country of five million people, they have a high labor cost, and there's trust in the society generally. It's okay for the government to make everything digital because they wanted to lower the costs and to make a seamlessness; it's also for tax reasons, digital currency, blah, blah, blah, all of that. But then again, you have a highly educated, high-income population; it made sense.

 

      The U.S. is much more diverse; that's not necessarily the solution. But I think if you look at a group like TPRC, where they're grappling with the demand side and the user part of it, not all FCC tools and capabilities are tailored to addressing demand. And you may have different needs in public policy where you're going to look at both sides of the equation to find the right policy.

 

Hon. Steven Menashi:  Thanks. Let's go here.

 

Questioner 8:  This question is for Commissioner Carr. You mentioned the death spiral that's facing the Universal Service Fund and whether the contribution base should perhaps be expanded to try to make up for it. Don't you think it would be a lot better if Congress would just appropriate $9 billion a year for universal service? That would also eliminate the constitutional concerns with having an independent agency kind of impose its own ever-increasing taxation rate.

 

Hon. Brendan Carr:  There's some that are pushing for appropriation as one of the solutions. Some components of the death spiral have been slowed because we've seen a lot of appropriations. Through the CARES Act and otherwise — we had $3 billion that went into the Emergency Broadband Benefit program appropriated funds; we had $7 billion come in through the Emergency Connectivity Fund appropriated dollars — that's relieved some of the pressure.

 

      The core political decision was made in the 1990s as to why we fund it the way we do — which is outside of the appropriations — is because members of Congress decided that they wanted this outside of the appropriation process. They didn't want it to be a political football; they didn't want it to be subject to government shutdowns or failure to pass appropriation bills. So they specifically made the decision to put it outside of the annual appropriation. So I'm sort of working from that framework. If people want to change it, they can change it.

 

      But given the framework that we have, I think the answer is to broaden the contribution base, as you put it. So rather than doing 30 percent on this portion of the revenue, you bring big tech in. It obviously drops it to zero on your bill. And it can be replaced by something like a seven percent charge even if you just look at digital advertising revenue, not streaming revenue or anything like that. So I think it's less of a pass-through to consumers if we move over to large tech.

 

      Some people say we should go into appropriation; that's fine. I don't oppose it. But unless and until that happens, I think we've got to broaden the base.

 

Questioner 8:  All right.  Thank you.

 

Hon. Steven Menashi:  So we mentioned at one point the infrastructure bill. I guess two things:  One is maybe somebody could say something about what's new there and whether it changes the questions in this policy area. And then, also, I think it was mentioned that a lot of the funding is being administered by the Commerce Department. So is there a change in the role of the FCC and the federal regulators in this area after the infrastructure bill? Can you address that?

 

Hon. Brendan Carr:  Yeah. What's interesting is we talked earlier of these estimates of needing $80 billion on the high end of funds. I mean, the fact that we have 65 billion now — the fact that, as we talked earlier, I think we have 800 billion across the different agencies — we can no longer point to a lack of funding as the problem if we don't end the digital divide. It is going to put a very bright spotlight on policies. If we have the right policies in place, if we don't have massive waste, fraud, and abuse, we can get this done. I'm reminded of that old Reagan quote about babies:  They have a voracious appetite on one end and no sense of responsibility on the other. At this point, we have just poured billions and billions of dollars into the system. If we don't get our act together, there's going to be some problems on the back end in terms of all these programs.

 

      Commerce is interesting. Look, the FCC — obviously I work there, so I'm a little biased — they were stood up as the expert agency to do this. We have the Universal Service Fund; we do this every single year. We've got auctions of those dollars. We have oversight mechanisms in place. So look, the decision to move this fully inside the administration -- I understand why Democrats want unilateral control of those dollars rather than an independent agency where there's Republicans on the board that can have a say in how those dollars are used. I get the raw politics of it. And we've done this before. In 2008, in the Obama era, when we were coming out of a recession, they put the $7 billion through the Department of Commerce. Again, it puts it under basically the unilateral control of the president. I understand why the administration wants to do that. But the system we've got with the FCC overseeing the distribution of these funds is not perfect; we've got problems. But we don't need to hire a thousand people or commerce is going to be stuck having to staff up to distribute those funds.

 

Hon. Steven Menashi:  Thoughts on the infrastructure bill and changes for the future? Well, since we're toward the end of the panel, maybe I could ask if anybody has concluding thoughts or if they have --

 

John Strine (sp):  I have a question.

 

Hon. Steven Menashi:  Oh, sorry. There is a question. Why don't we go there?

 

John Stratt:  My name is John Stratt. Isn't there risk when you subsidize broadband that, in those areas was declared as libel for subsidies, that carriers stop investing in those areas until they can get the subsidies? We have seen that in a number of countries in Europe, that actually where the government in Europe you have this rule saying, "You're not allowed to give subsidies for broadband in geographic areas where the carriers have planned to build over the next three years." You do a mapping and you say, "These areas, you can get subsidies." But we can see those areas the carriers are applying for subsidies, and every year there's not enough funding to give money to all the projects which come in, and basically, we see the carriers stop investing in those geographic areas.

 

Hon. Brendan Carr:  Yeah. There is certainly some gamesmanship and some perverse incentives there. If we have an area that is unserved, we are going to prioritize getting service there. And so a provider that says, "Hey, it's economical for me to serve two people in this area, but if I serve two people in this area it knocks out this entire area for federal funds," they will likely pull back, not serve those two people, wait for the federal dollars to come in, and then serve the whole area. That's a tough thing to solve, but it is certainly right to say that it's a perverse incentive. And we've got a lot of perverse incentives. Again, we are spending all this money on broadband infrastructure while we're looking to more heavily regulate the entire industry through Title II, and that's like stepping on the gas and the brakes at the same time. So it's a tough spot.

 

John Strine:  I must say your auction model saying "Who can offer the cheapest solution" if you could say, like, the most cost-efficient, I think that's really an interesting model which Europe could learn a lot from.

 

Hon. Brendan Carr:  Yeah.

 

Dr. Roslyn Layton:  I was going to say, don't you have in Indiana -- don't you have something in the rules where you would prioritize the areas for investment?

 

Hon. Eric Allan Koch:  Yeah, we do. I talked about the online portal that we set up that creates the reverse auction so you have the lowest bidder as well as a robust challenge process to prevent that overbuilding that sometimes comes with subsidies.

 

Dr. Roslyn Layton:  Yeah.

 

Hon. Steven Menashi:  Okay. Well, why don't I ask if folks think there are questions we haven't addressed or something that you want to say that wraps up or tells us something about the future in this area.  Why don't we just go down the line?

 

Hon. Brendan Carr:  Well, look. I think there's more running room left with standing up to China. We've taken some strong steps. I think there's more for us to do at the FCC.

 

      I think we are going to see a rerun of the Title II playbook if you all survive the 2017 repeal of net neutrality. [Laughter] It was an interesting political debate. I think that is one of the greatest examples of false, inflammatory rhetoric: "The end of the internet." Then there was the wave of, "People are going to sell your web-browsing history." I mean, there were all kinds of false stories that were peddled, and the reality was the repeal of net neutrality increased investment and led to greater competition. But I think the Democrats are going to look to rerun that heavy-handed Title II playbook.

 

      But it's a little different playing field today. There's a saying that you can't ever step in the same river twice, and I think that's true here. In 2017 — well, 2014, the last time we had heavy-handed regulation of the internet — the idea that an ISP is the greatest threat to a free and open internet had some purchase among at least some corners of the public. I think -- flash forward to today, I think people have realized that the greatest threat to a free and open internet is not the mom-and-pop ISP, but it's the large technology companies that are actively blocking and throttling content, including blocking the sharing of URLs, including Microsoft Bing — to the extent you use that — blocking searches for the Tiananmen Square Tank Man in the runup to the Tiananmen Square anniversary.

 

      So I think the ability to rerun Title II and say we have to heavily regulate ISP because they're a threat to free and open internet, meanwhile these large technology companies are engaging in widespread censorship, I think that's going to be a complicating factor for Democrats as they rerun this play, but I'm confident that they will muddle their way through it.

 

Dr. Roslyn Layton:  I completely agree. I think those are great points.

 

      I would just like to reflect on having an FCC being at two-two and the tremendous bipartisanship. I've been so encouraged to see how it's worked really well. I would love to see the FCC at two-one Republican [laughter], and with Mr. Carr there as a de facto chair would be fine with me. I'm definitely concerned of prospects of a third Democrat, as supposedly in Gigi Sohn who has extremely radical ideas across so many things that The Federalist Society holds dear -- everything against intellectual property, against freedoms, freedom to contract, you know, user centricity of how do you want to prioritize your broadband connection yourself. So I would favor delaying, as much as possible, that nomination. I don't see any reason to speed it. It's going to take place next week, unfortunately. But the interesting point is, under the constraints today with two-two, FCC has done a lot, and it is a testament. I see Commissioner Carr and Acting Chair Rosenworcel have really done some very important policy together, particularly in security and a number of other areas. So that is actually a good story. And they could continue, as far as I'm concerned. [Laughter]

 

Hon. Eric Allan Koch:  Well, I think states will be watching closely as to what strings the federal broadband dollars are going to have as they come down, and will states be allowed to use a market-based framework like Indiana has or not, or something else? So that, I think, will be very important to us at the state level as we continue to make policy along the lines we discussed today.

 

Hon. Steven Menashi:  All right. Well, thanks to everybody for the interesting discussion, and please join me in thanking our panel.

 

1:45 p.m. - 2:30 p.m.
Fireside Chat with Vivek Ramaswamy

2021 National Lawyers Convention

Topics: Civil Rights • Corporations, Securities & Antitrust • Culture • Politics
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". The second day of the conference featured a fireside chat with Vivek Ramaswamy.

Featuring:

  • Mr. Vivek Ramaswamy, Author, Woke Inc.: Inside Corporate America's Social Justice Scam
  • Prof. Todd J. Zywicki, George Mason University Foundation Professor of Law, Antonin Scalia School of Law, George Mason University

Speakers

2:45 p.m. - 4:30 p.m.
Is Anyone Still Committed to Free Speech?

2021 National Lawyers Convention

Topics: Culture • First Amendment • Free Speech & Election Law
State Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

Share

Event Video

Listen & Download

Description

The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". This panel asked "Is Anyone Still Committed to Free Speech?".

The Supreme Court in 1964 spoke of "a profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open." That commitment has seemingly waned of late. Conservatives bemoan a new institutional "cancel culture" that chills heterodox views, with many now questioning limits on government’s ability to regulate the speech and associations of private parties like social-media platforms, corporations, and employers. Meanwhile, progressives complain that speech rights are, as one ACLU attorney put it, "more often a tool of the powerful than the oppressed" and should be subordinated to other values like equity, safety from harmful speech, and "anti-racism." Has something truly changed in recent years, and, if so, does it matter? Is the traditional view of free speech—freedom from government regulation—worth defending?

Featuring:

  • Mr. Mike Davis, President and Founder, Internet Accountability Project; Former Chief Counsel for Nominations to Senate Judiciary Chairman Chuck Grassley; Founder, The Article III Project
  • Prof. Stanley Fish, Professor of Law, Florida International University College of Law; Floersheimer Distinguished Visiting Professor of Law, Cardozo Law
  • Prof. Joel Gora, Professor of Law, Brooklyn Law School
  • Ms. Nicole Neily, President and Founder, Parents Defending Education
  • Moderator: Hon. David R. Stras, U.S. Court of Appeals, Eight Circuit

Speakers

2:45 p.m. - 4:30 p.m.
China, Global Companies, and Human Rights

2021 National Lawyers Convention

Topics: Civil Rights • Corporations, Securities & Antitrust • International Law & Trade • International & National Security Law • Foreign Policy
District Room (Lower Level)
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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Description

The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?" This panel covered "China, Global Companies, and Human Rights."

This panel will explore a suite of issues related to global companies that do business in China and the implications for national security, human rights, and the rule of law.  Panelists will explore how companies that have supply chains or otherwise are active in China weigh human rights concerns (e.g., in Xinjiang or Hong Kong) against market access, as well as consider the dilemma companies face when they find themselves caught in the crossfire between U.S. and allies' human rights sanctions (e.g., Global Magnitsky) and Chinese retaliatory sanctions. Do American companies feel an obligation, apart from any legal mandates, to act in ways that advance U.S. national security or foreign policy objectives? With senior policymakers intently focused on these and related issues, is the private sector giving them sufficient attention?

Featuring:

  • Amb. Craig Allen, President, US-China Business Council; Former U.S. Ambassador to Brunei Darussalam
  • Amb. Kelley Currie, Former U.S. Ambassador-at-Large for Global Women’s Issues
  • Mr. John S. Jenkins, Jr., Executive Vice President and General Counsel, TE Connectivity
  • Dr. Kori Schake, Senior Fellow and Director of Foreign and Defense Policy Studies, American Enterprise Institute
  • Moderator: Hon. Carlos T. Bea, Senior Judge, U.S. Court of Appeals, Ninth Circuit

Speakers

Event Transcript

Matthew Heiman:  Good afternoon, ladies and gentlemen. My name is Matthew Heiman. I chair the International and National Security Law Practice Group, and we’re delighted to bring this panel to you this afternoon. I have a few housekeeping announcements before we turn it over to Judge Bea and the panel.

 

But first, who is the International and National Security Law Practice Group? We are a group of professionals that are focused on those issues, and on behalf of the executive committee, we’re delighted to be here. We do programming like this throughout the year in the form of teleforums, podcasts, live events now that we’re coming out of the pandemic. If you’re interested in the work of the practice group, please come see me. I’ll be here today and tomorrow, or you can contact me through The Federalist Society. We’re always looking for people that are interested in these topics to join us and help plan these kinds of programs.

 

And now I’ll introduce our moderator, Judge Carlos Bea. Judge Carlos Bea sits on the U.S. Court of Appeals for the Ninth Circuit. He was appointed there by President George W. Bush in 2003. Prior to that, Judge Bea served on the San Francisco Superior Court. Prior to that, he had a long and distinguished career in civil litigation, and he also taught at the Hastings College of Law and Stanford Law School.

 

He’s a graduate of Stanford Law School for both his BA and JD, and if you’re interested in hearing more about Judge Bea—which you should look up his bio—one of the more interesting tidbits in his background is he is an Olympian. So with that, I will turn it over to Judge Bea.

 

Hon. Carlos T. Bea:  That’s true. I was a Cuban, and I played on the Cuban basketball team in the Olympic Games. But in all honesty, we were Olympic tourists rather than Olympic athletes. We only went two and five, so it wasn’t too great. Presently, I’m in San Francisco at the courthouse there, and I’m very happy to introduce you to our panelists today.

 

At far right, and our first speaker, is the Honorable Kelley Currie, who’s an Adjunct Senior Fellow at the Indo-Pacific Security Program of the Center of New American Security. Ambassador Currie served as U.S. Ambassador-at-Large for Global Women’s Issues and U.S. Representative of the United Nations Commission on the Status of Women. She also served under Ambassador Nikki Haley as the United States Representative to the U.N. Economic and Social Council and Alternative Representative to the General Assembly.

 

Throughout her career in foreign policy, Ambassador Currie has specialized in human rights, political reform, development, and humanitarian issues. She has held senior policy positions with the Department of State, the U.S. Congress, and several international and nongovernmental human rights and humanitarian organizations. I also learned that she’s a recovering lawyer, having received a Juris Doctor from Georgetown University, but thankfully, for her, she’s never had to practice. She has an undergraduate degree in Political Science at University of Georgia’s School of Public Affairs.

 

Immediately to my right is a second ambassador, Honorable Craig Allen, who’s the President of the US-China Business Council. Craig Allen is the President of the council, which is a private, nonpartisan, and nonprofit organization, which represents over 200 American companies doing business in China. Craig began his government career in 1985 at the Department of Commerce’s International Trade Administration. In 1988, he transferred to the American Institute in Taiwan, where he served as Director of the American Trade Center in Taipei. He held that position until 1992 when he was named to the Department of Commerce for a three-year posting in Beijing as Commercial Attaché.

 

After that, he perfected the trifecta by going to the U.S. Embassy in Tokyo, where he served as Commercial Attaché. He later became Deputy Assistant Secretary for China at the U.S. State Department. He was sworn in as a United States Ambassador to Brunei in 2014. He served until 2018 when he transitioned to the US-China Business Council. Craig received a BA from the University of Michigan and a Master of Science and Foreign Service from Georgetown.

 

Immediately to my left, and our third speaker, is John Jenkins, who is Executive Vice President and General Counsel of TE Connectivity. John is responsible for the company’s global legal, compliance, corporate governance, government affairs, intellectual property, security and risk management, and corporate social responsibility. TE Connectivity, he joined in 2012. Prior to joining TE Connectivity, he was with Tyco International for ten years and was the Vice President, Corporate Security, and International General Counsel.

 

Prior to 2003, John worked as a litigator with McGuireWoods, and began his career in 1987 as an officer in the United States Navy, and served as a judge advocate, both a military prosecutor and senior defense counsel, and finally, as Legislative Counsel to the Secretary of Navy. John earned his law degree from George Washington University, here, with high honors and a bachelor’s degree from the University of Virginia.

 

On my far left, and just arrived, Dr. Kori Schake. Did I pronounce that correctly?

 

Dr. Kori Schake:  Yes.

 

Hon. Carlos T. Bea:  All right.

 

John S. Jenkins, Jr.:  Perfect timing.

 

Dr. Kori Schake:  Director of foreign and defense policy studies at the American Enterprise Institute. Dr. Schake leads Foreign and Defense Policy Studies for the AEI. She’s the author of Safe Passage: The Transition from British to American Hegemony, and with Jim Mattis, the editor of Warriors and Citizens: American Views on Our Military. Dr. Schake has taught at Stanford, at Johns Hopkins SAIS, and West Point. She’s also had a distinguished career in government, working at the U.S. State Department, the U.S. Department of Defense, and National Security Council. With that, we’ll start with Ambassador Currie.

 

Amb. Kelley Currie:  Thank you so much, Judge Bea. It’s an honor to be here with you today, especially as a nonpracticing lawyer and someone who narrowly escaped a firm life, and as --

 

Hon. Carlos T. Bea:  Could you get closer to the microphone?

 

Amb. Kelley Currie:  -- oh, sorry. Yeah. Absolutely. It’s an honor to be with you all here today. I’ve spent most of my career in public policy, but my training as a lawyer has occasionally served me usefully throughout that 25 years, or 20-something years, since I graduated from law school. But it is an honor to be able to speak with actual practicing lawyers and to have this opportunity to talk to you today about issues that are very close to my heart and things that I care about a lot.

 

The topic of the panel being “China, Human Rights, and Global Companies,” we could go in a lot of different directions, but I’m going to try to follow a pretty linear story. And it starts in a place in western China called Xinjiang, and it is the story of an ethnic minority called the Uyghurs. There are other Muslim Turkic ethnic minorities living in western China: the Kazakh, Uzbek, Kyrgyz, other Turkic peoples who live in this area. This area used to be an independent country, briefly, called East Turkestan, and today, it is one of the largest chunks of China under Chinese control and is now referred to as Xinjiang, which in Chinese means “new territory.”

 

It was taken over by the People’s Liberation Army after they secured control of the Chinese heartland, and has been a restive area that was not always very well under control and certainly was not a part of most Chinese empires in a very integrated way throughout Chinese history. So it’s an area of China that is culturally quite different from the Han Chinese heartland. The people speak a language that comes from a different linguistic family. They practice Islam, and they are more oriented culturally, ethnically, toward central Asia—toward the Stans that used to be part of the former Soviet Union.

 

So this part of China, the People’s Republic of China, has been a problem from a management standpoint for the People’s Republic of China and the Chinese Communist Party since they came into power. And at various times, they’ve used various tools and practices to try to bind this region to the People’s Republic of China, mostly repressive means but also some more cooptation and economic integration means and combinations of those tools.

 

But since 2009, when there was a major uprising—a very violent uprising in the capital of this region, called Ürümqi—the Chinese party-state has turned very hard toward repressive measures to try to control what they describe as a terrorist threat in Xinjiang. And in order to do this, they have essentially built a prison state in Xinjiang where forced labor, mass internment, mass incarceration, a panopticon approach to security with mass deployment, CCTV, use of all sorts of facial recognition, even gate recognition technology is commonplace, both inside and outside of the places of detention.

 

The United States government, which I was part of for the past few years, estimated that between one and three million people have gone through the Chinese mass detention facilities in Xinjiang. The detention is arbitrary. It is not appealable through any judicial process. There is no due process, and the crimes that these people have committed, in most cases pre-crime -- if you’ve ever seen the movie Minority Report, you’re familiar with the theory of justice that the Chinese party-state is using in Xinjiang. Because they essentially put people in detention for thought crimes and for being too piously religious; for being too observantly religious; for having too long of unkempt beards; for refusing to eat pork during Chinese festival days; for refusing to drink alcohol or smoke cigarettes or use foul language, even; for reading the Quran too much; for praying too much. These are all things that could land you in a Chinese detention facility in Xinjiang.

 

And what happens to you once you get into these detention facilities is you are subjected to what’s called re-education, and essentially, this is an effort to strip away your ethnic identity as a Turkic Muslim minority and to make you more like a normal Han Chinese person. If that sounds pretty Orwellian, it is, and the methodology is pretty brutal. These places are prisons; let’s be very clear. They have barbed wire around them; they have watchtowers with armed guards; you live in barracks; you’re given gruel to eat. These are not schools. These are not training centers as they have been portrayed by the Chinese party-state.

 

So this is the context of what led the administration, last year—the state department and Secretary Mike Pompeo—to determine -- oh, I’m sorry. I did forget one very important thing. Outside of the camps, Uyghur women are subjected to extremely harsh and rights-violating population control methodologies, including forced sterilization, forced abortion, and other methods of coercive population control. This, in addition to being largely separated from men of child-producing age due to the mass detention.

 

So you have family separation. You also have removal of children from homes. I mean, they’ve done just about everything they can to erase Uyghur culture—shutting down mosques, taking children out of homes and putting them in boarding schools where they’re taught Chinese and not their own culture or their own language. So this is the context in Xinjiang right now. This really began in earnest in 2016. We started getting reports about it in 2017.

 

The reports intensified, and last year, we began -- well, actually, in 2019, the state department began a process of -- I was at the office of global criminal justice at the time, and we began compiling, basically, a dossier to determine whether crimes against humanity, genocide, or some other form of atrocity was being committed in Xinjiang.

 

And in January, the Secretary of State made a determination based on the evidence that had been collected and compiled, and a legal analysis that my friend Nathan Sales, over there, and I worked on, that indicated that we believe that in addition to crimes against humanity, that genocide was being perpetrated against the Uyghur people and other ethnic and religious minorities in Xinjiang by the Chinese Communist Party.

 

With that finding of genocide, we set a new standard in terms of how this situation was viewed by the U.S. government, but even prior to that determination, the state department, the Department of Commerce, and the Department of Treasury had been moving to sanction individuals and entities that we believed were involved in these crimes and in these gross violations of human rights.

 

And that included doing things like putting Global Magnitsky sanctions on various individual leaders, including Chen Quanguo, who is the head of the party and a Politburo member in Xinjiang, and doing things like issuing withhold release orders on various sectors of the economy, where Xinjiang was highly implicated. These included cotton, agricultural products, such as tomatoes, and small electronics.

 

This also included putting certain entities on the commerce entities list, and this included a number of companies that were involved in this mass surveillance and mass intrusive surveillance efforts, such as Hikvision, iFi tech, and others. There are now approximately 30 countries on that commerce entities list. They include companies that are being invested in and partners with U.S. companies. They include companies that have a presence in the United States, and they include a number of companies and entities that we are still trying to understand, especially through something called the Bingtuan, the Xinjiang Production and Construction Corporation, which is a quasi-government military thing that is unlike anything else in the world that exists in Xinjiang and owns somewhere between 8,000 and 600,000 subsidiaries or equity stakes in various Chinese entities.

 

So that’s the business landscape that’s affected by the genocide in Xinjiang. And to date, companies in the United States are trying to figure out how to unwind their exposure to what my old boss, Secretary Pompeo, described as “the stain of the century,” but which I see as the mechanization of genocide on a scale that the Third Reich could only have dreamed of doing, and at a technological level, that they could only have dreamed of doing.

 

And there is extensive exposure, not only through direct investment and connections, but one of the most interesting areas that I’m currently looking into is the solar panel supply chain because the vast majority of the solar panel supply chain and the polysilicon that is used to produce photovoltaic cells is produced by China. China has a massive share, in some cases 80 to 90 percent, of the global supply chain in certain elements of solar panels, and a lot of that production takes place in Xinjiang. And there are reports, credible reports, of forced labor being implicated in those supply chains.

 

And again, you have major investors, including companies like Invesco, that invest with companies that not only are involved in solar supply chains that may be implicated and problematic with forced labor but are also in joint ventures that are backed under three or four layers of ownership shells that trace right back to the Bingtuan, which is, again, a sanctioned entity under the Global Magnitsky -- which has been put under Global Magnitsky sanctions, and therefore U.S. companies should not be doing business with the Bingtuan.

 

So that’s a pretty straight-line narrative to where we are today, where you have companies that are -- and I was talking to Ambassador Allen. You have companies that are investing in China. You have companies that are doing business in China. You have companies doing business in the United States to get their supply chains from China, and they are trying -- I think most of them, in good faith -- U.S. companies are trying to understand and remove forced labor from their supply chain. Almost every industry, every solar panel and installer industry in the United States has signed a letter recently saying that they are working to get forced labor out of their supply chain.

 

But one of the challenges is the opaque legal structures that these companies are having to deal with in China. And then one of the other challenges that all investors that are invested in China, whether they’re invested in companies that are involved in human rights abuses or not, has to deal with is the fact that Chinese entities—especially those that are listed on the U.S. exchanges that are formed through corporate structures, such as the variable interest entities in the Cayman Islands but have their insiders and their assets primarily in China—are essentially law-proof and regulatory-proof in the United States.

 

And so it’s very difficult, if you have a problem, to get your assets or to extricate yourself, or if the Chinese entity decides to expropriate your investment and then your capital market investment, or whatever, you have very little recourse.

 

So I’ll stop there and turn it over with that lovely picture of what’s going on, but look forward to your questions about how we, in the legal profession, as well as policymakers, can start to address some of the serious and inherent risks in this situation from both a moral and philosophical standpoint as well as how it threatens U.S. competitiveness and threatens to endanger the savings of millions of investors in the United States who are invested, without knowing about it, in some of these companies and industries. Thank you.

 

Hon. Carlos T. Bea:  Thank you very much. Ambassador Allen?

 

Amb. Craig Allen:  Okay. Well, what a pleasure to be here. Thank you very much, Judge. Thank you for leading us today. Ambassador, thank you very much. I have to say I am not a lawyer nor a member of The Federalist Society, so please excuse me. I come here as a career member of the U.S. Foreign Service—served 33 years, much of it in China.

 

So let me start out with a little bit of context. And my first point would be that the U.S. corporate presence in China is indeed very, very large. China is America’s largest overseas export market—third, behind Canada and Mexico. And more than a million Americans rely on their jobs for exporting to China. And indirectly, multiply that by three, and you get the employment impact of China on the United States.

 

My second point would be that China represents a large percentage of global growth. Over the last 10 years, approximately 30 percent of global growth, GDP growth, has come from China, and I would anticipate that that will remain the same for the next 10 years—after that, a lowering down. So talk about Asia, of which China is the center -- talk about 40 percent of global growth. Throw in India, you got 50 percent of global growth. If American companies are not leaders in China, they are not going to be global leaders.

 

The third point I would make, in terms of context, is virtually all of our companies are in China for the China market. They are not outsourcing production there to bring back to the United States. They are there because China is an engine of global growth. So now, if one looks dispassionately at the relationship between American companies and human rights in China, I think that you would be very impressed by how many contributions American companies have made over the last 40 years, and indeed, as documentary evidence, if you look at any employment survey in China, you’ll find, in the most recent surveys, that six out of ten of the best companies to work for, for young Chinese graduates, are American companies.

 

Now, that’s not an accident. It's not because they’re human rights violators and nor is it some historic artifact. It’s because they’re very good places to work. Now, over the last four decades, American companies have served as an engine of growth and have contributed enormously to human rights in China—the rule of law and human dignity in China. So let me just give you a couple of examples, areas, each of which we could write a book on, but worker safety, mine safety, American sanitation, American companies have been the leaders.

 

Anticorruption and bribery, due to the Foreign Corrupt Practices Act -- American companies are not corrupt, and in China, that is a leading trait. Gender diversity, elevating women, and respecting LGBT employees, antipollution and responsible manufacturing, workplace safety, and of course, corporate social responsibility, in all of these areas, American companies have shown Chinese companies the way forward, thus contributing enormously to human rights in China.

 

And they are followed by Chinese private sector companies and public sector companies, all of whom are trying to figure out how to do CSR. And they learn from the American corporate model. Simply put, American companies operating in China follow the rule of law. And if you know China, if you’ve been to China, you know that that’s something that one cannot take for granted in the Chinese market.

 

Now, I’m not here to say that human rights are not a legitimate issue in the discussion of China. China is a huge country, and there are many unresolved tensions, conflicts, and controversies. China has signed and ratified the Universal Declaration of Human Rights, and many of these rights are spelled out in the Chinese Constitution. And I think that, to the extent that China does not live up to its U.N. or other multilateral obligations, it’s appropriate and useful to remind the Chinese of their formal commitment to these principles and to encourage China to do better, to meet its commitments.

 

And in the eyes of this former diplomat, these issues are almost all issues that are properly categorized as multilateral problems, and it’s not the United States’ sole responsibility to resolve these problems. They are multilateral issues; they affect the global commons.

 

Perhaps, we could take the case that Ambassador Currie was speaking on as an example. Chinese law and international practice both prohibit products coming from forced labor from entering into the global supply chain. There is not one U.S. company, certainly, not among the 265 companies in my organization, which knowingly purchases products made of forced labor. From anywhere on earth, to do so would be illegal, unethical, and simply unacceptable, and bad for business.

 

We agree that suppliers should meet standards set by the International Labor Organization and, of course, our own U.S. standards and the individual supplier standards of the individual companies, which are almost in every case stricter than ILO or U.S. corporate standards.

 

Now, I will concur with Ambassador Currie that compliance is not easy. We recognize that recently it’s become more difficult for foreign companies to do the due diligence necessary to certify that all their suppliers—especially those that are three, four tiers down in the supply chain—to meet these international requirements articulated by the U.S. government and customs.

 

So due to the current difficulty in obtaining reliable factory audits in Xinjiang, we, the USCBC, has called for the Chinese government to publicly and explicitly ratify the International Labor Organization’s conventions on forced labor, and then invite inspectors into Xinjiang to certify that all appropriate ILO standards are being met. And if China wishes to participate in the global supply chains, then China must fully implement the ILO standards and certify that all the factories in the international supply chain meet these standards.

 

So it’s my personal view that corporations and all legal persons—you and I, obviously—should respect the human rights and follow the law wherever they are. It’s certainly not too much to ask. But it’s also my personal view that you’re on pretty shaky ground when you require corporations to advance your favored interpretation of human rights, or you penalize them for not going beyond the requirements of the law. And indeed, I think that we could look at our own society and ask those questions of ourselves.

 

In our own country, domestically, the role of corporations and protecting the various rights of individuals and groups is an enormously complex issue on which we have very little consensus. So if we have no consensus internally within our own country, I think that we should be pretty careful when we’re addressing other countries. How do we best advance human rights around the world? I think it’s through economic integration, having American companies invest robustly, ensuring that we have a level playing field in China, and acting by the rule of law. Thank you very much.

 

Hon. Carlos T. Bea:  Thank you, Ambassador. And now, Mr. Jenkins.

 

Mr. John S. Jenkins, Jr.:  This is not --

 

Amb. Kelley Currie:  I think they’ll turn it on for you.

 

John S. Jenkins, Jr.:  Oh, okay.  I guess you can hear me. The light’s not on, but you can hear me.

 

So good afternoon, and thank you for the opportunity to give a little bit of a perspective of a company that actually has to operate in this very dynamic global environment. I think as Ambassador Currie outlined, what are some of the challenges and risks the companies face? And Ambassador Allen outlined, what are the opportunities and benefits before us? A company like TE Connectivity has to navigate and operate in this challenging and sometimes uncertain environment.

 

So maybe a little bit about TE Connectivity. We’re a Swiss-domiciled, NYSE-listed industrial technology company. We do connectivity—terminals, connectors, relays, cables, cable assemblies, components. If you move power, data, or signal through almost any application, chances are it could be our product. We’re in every car that’s on the planet. We serve every auto manufacturer globally, including the Chinese local OEMs in China. And that’s both for internal combustion and for EV.

 

We’re in heavy trucks and buses, agricultural equipment. We’re in your cell phone, your refrigerator, your television. We’re in your desktop computer or your tablet. We’re in the medical devices that you have access to in the hospitals. We’re on the factory floors that make all of the products that many of us buy and use every day. We’re in the energy grid, and we’re in home appliances. If your refrigerator is working and telling you that the water filtration for your ice maker needs to be changed, it’s probably our connector that’s moving that signal across that application.

 

We’re about $15 billion on the top line, and we’re spread very globally, about a third, a third, a third—a third in the Americas, a third in Europe, and a third in Asia, with heavy concentration in China. Probably about $2 ½ billion of our 15 is derived from China economic activity. About 90 percent of what we design, and make, and deliver in China is for China consumption, as Ambassador Allen remarked on earlier. We don’t export out of China. It’s not a low-cost-country play for us. It is a very important market, and a market that will soon probably be the largest economy on the globe. So for a company to be successful, a company needs to be able to compete and navigate in that environment.

 

We’ve got 135 factories around the globe, 17 of which are in China, about 20,000 employees in China, 2,500 engineers that are designing connectivity solutions for our applications, again across all of those industrial verticals, and we’re spread out across the country. We’re not in the western part of China, but we are in the Pearl River Delta. We’re in Shanghai, Xuzhou, Qingdao, Dongguan, Shenzhen, Shunda, where a lot of the manufacturing historically has been.

 

So how does a company like TE navigate this type of environment where you’ve got pressures coming from a variety of sources? Sometimes it's from governmental organizations. Sometimes it’s from NGOs. Sometimes, it’s from your customers. Sometimes it’s from employees. It could be your owners telling you what they think you should do, and in many respects, the course you need to steer is one that divorces from external factors that we can’t control. We can’t control policy. We can’t control law. We can’t control geopolitical competition. We can’t control any of that, but what we can control is ourselves.

 

And so how we, I would say, filter and make decisions around how best to operate and how best to return value to our shareowners is by focusing on our stakeholders—and our stakeholders are our customers, our employees, and our owners—and then filtering those stakeholder interests through the company’s purpose and the company’s values, right? TE’s purpose is to build a safer, sustainable, connected, more productive future, and our value is teamwork, innovation, integrity, and accountability.

 

And so we ask ourselves, “Is a proposed action, is a business course that we are steering, our decisions we are making true to our values and true to our purpose? Is it going to make us able to explain to our employees, our customers, and our owners how and why we have chosen a particular course of action? Is it true to our values? Does it advance our purpose, and at the end of the day, does it help grow long-term shareholder value?”

 

And so I know many of those in the room have a liberal arts background and have heard of a German theoretician, Carl von Clausewitz—his book, On War. And the exercise of national governmental power comes through four, I would say, main areas: diplomacy—and we have diplomats here on the panel with us—information; governments controlling the narrative—and we see that happening obviously around the globe with nationalistic, I would say, developments over the last three to five years—military; the use of the military—I mean, war is inherently a political activity for a political end—and then lastly, economics—and it’s that economic geopolitical competition that largely would affect a company like TE.

 

Now, we have to operate in accordance with the laws and regulations of all of those geographies where we do business, including trade controls, and that would have us respond to companies or customers being put on the entity list or export controls here in the U.S. At the same time, we have to navigate the countervailing impact of that. The Chinese government has and continues to enact blocking statutes that prevent the enforcement extraterritorially of certain U.S. trade control or U.S. entity list actions.

 

And so we can’t, again, control that economic, competitive dynamic between U.S. and China, between U.S. and EU, but what we can control is how we react, how we assess and make decisions. Our stakeholders, our purpose, our values, and thus far, that has held us, I would say, in very good stead, both with the U.S. government and the U.S. authorities but also with the Chinese government and the Chinese authorities. We’re, I think, a respected and important partner in both geographies, and we intend to remain so.

 

Hon. Carlos T. Bea:  Thank you very much.

 

Dr. Kori Schake:  So I think the perspective that you just heard from Mr. Jenkins is the perspective that most American businesses, in fact, most international businesses, operating in China would prefer, right? Their responsibility is to their shareholders, and their responsibility is to make their product well and make money off of it. The political risk of being able to do that in China is skyrocketing, and whether it remains possible for that to happen, I think, it’s deeply in doubt.

 

In my judgment, the bifurcation of the global supply chain, international investment, and opportunities to operate businesses is already bifurcating both by American government policy and by Chinese government policy, and I think it’s likely to be irrevocable. So I’m one of those starry-eyed idealists who believed that the United States was right in the late 1990s, early 2000s to invite China into the international order in the trade regimes, even to give them preferential entry when they didn’t yet meet the standards that were governing everybody else. That is, we didn’t create a level playing field when we invited China into the international order.

 

We give them preferential access because we were operating on the belief that another German philosopher, Hegel, purported that is so fundamental to American philosophy -- which is that as people grow more prosperous, they become more demanding political consumers. And there are a lot of reasons to believe that that’s true, right? The countries that are most sustainably prosperous are free societies. Unless you pull diamonds out of the ground or pump oil out of the ground, the relationship between a government and the people it taxes for revenue grows more responsive as people grow more prosperous.

 

China is, of course, a big outlier to that and has been for, at least, the last 25 years. Because China is growing more prosperous, it’s not growing freer. It’s growing much more repressive domestically and much more aggressive internationally. If you doubt this, read the China Military report that the Pentagon released last week because if you don’t lose sleep over that, then I’d love to know what you take to get to sleep at night.

 

So as folks said, American businesses operating in China have been forces for prosperity, forces for advancing the rule of law. The problem is that the rule of law in China, for example, now requires companies to give access to Chinese intelligence services to their data. That’s not going to be sustainable for American companies, no matter how much you want to operate in China. No matter how much the prosperity of the company depends on access to the China market, it is simply not going to be sustainable because the two conflicting forces that are driving up geopolitical risk are Western publics who believe that our values are universal, that people have rights, and they loan them to governments in limited ways for agreed purposes.

 

That is not the nature of the bargain in China. That is not the nature of law in China, and the example about China now making it illegal for companies to comply with American sanctions, you can’t reconcile those two things. So companies would be judicious to be slowly, gently, in ways that don’t alarm the Chinese government before you have your assets out of the country, trying to find a way to initially make production and supply chains more resilient by having alternative sourcing and then to figure out whether you’d rather be in the dollar-denominated market or whether you’d rather be in the Chinese market because my guess is, 15 years from now, there won’t be any middle ground between the two.

 

Hon. Carlos T. Bea:  Thank you.

 

Dr. Kori Schake:  One last thing, which is that the most interesting test case, right now, is actually the National Basketball Association, which a couple of years ago, a manager for a not very interesting team made a statement about human rights in China, and the totally disproportionate blowback by the Chinese, which was shutting off access to the NBA in China, so alarmed the leadership by the organization because they’re trying to make money in an emerging market, and they’re right to be trying to make money in an emerging market. That became untenable.

 

And so, the decision of how to back down without losing your American customers is the problem for businesses. And Enes Kanter has just dramatically upped the ante by being really strident on social media about Uyghur genocide and about complicity by Western companies in that. And so China has now blocked his team’s games in China, and the next round is now to see whether the NBA capitulates to Chinese pressure. If other players are -- so the war is actually a war of individuals making choices in the west and the Chinese government trying to apply broad penalties for it.

 

That’s why I think it’s unavoidable, and that we may actually get some help from the fact that it looks to the economist at the American Enterprise Institute like our policies are still being driven by the belief that China is stampeding towards prosperity and power, and it looks to our economists like the Chinese economy is now stalling. And we may soon have the problems of a failing China, which actually may be worse than the problems of a succeeding China. And I’ll stop there.

 

Hon. Carlos T. Bea:  Thank you very much. It’s now a privilege of the moderator to ask a question before I open it up to the panelists, and I have a question for Ambassador Currie. You talked briefly about the Global Magnitsky Act sanctions and enforcement as against individual Chinese or Chinese companies. Can you tell us a little bit more about that?

 

Amb. Kelley Currie:  Sure. So for those of you who don’t know, the Global Magnitsky sanctions are named after a gentleman named Sergei Magnitsky, who was a Russian accountant who worked for a man named Bill Browder who was investing in the Russian economy. And when Sergei discovered that there were some improprieties going on with a company that Mr. Browder was attempting to invest in or do business with, and then started making noise about this, it implicated some very powerful people in Russia, and Sergei was murdered by these people.

 

And Bill Browder became incensed and obsessed with getting justice for his friend and accountant Sergei Magnitsky. And ultimately, that led to the passage in the Congress of something called the Magnitsky Law, which allowed the United States to put sanctions on individual government officials and entities in Russia that were involved with either corruption or gross violations of human rights.

 

Several years later, that law was expanded globally, and those were the two proof standards. It’s a law that’s administered by the treasury department and the state department jointly, except based on an executive order that was issued by President Trump in 2017. And to date, hundreds of individuals and entities have been put on Magnitsky sanctions lists. And the Magnitsky sanction list allows for visa prohibitions and financial sanctions. It denies individuals who are listed on Magnitsky sanctions access to the U.S. global financial system, and as you probably can imagine, if you are denied access or the ability to engage with the U.S. financial system, you are locked out of much of the global financial system. You’re not allowed to engage in dollar-denominated trade or other activities that touch on the U.S. banking system.

 

So it’s a very powerful tool, and in China, as I mentioned, Chen Quanguo, who was the party secretary of Xinjiang at the time -- Zhu Hailun who was the head of the -- he’s the party secretary—basically, the political commissar of the Xinjiang Uyghur Autonomous Region—and several other individuals involved in repression in Xinjiang were put on the list, and then the Bingtuan as an entity was put on the list, and the Xinjiang Public Security Bureau was also listed. It’s primarily used to target government officials but can also be used to target others as well.

 

Hon. Carlos T. Bea:  Okay. A question for you, Ambassador Allen. You mentioned the ILO conventions regarding worker conditions and also forced labor. Is there any tool for enforcing compliance upon the Chinese government in that area?

 

Amb. Craig Allen:  So in the Chinese negotiations with the Europeans, the EU, on the comprehensive agreement on investment, the Chinese did pledge that they would respect the ILO conventions. That agreement has not gone into force, but it’s indicative, I think, of potentially getting to a place where the ILO conventions are respected. The Europeans have walked away from that agreement.

 

So currently, it is very difficult—and I would say impossible—to get certification that Chinese factories in Xinjiang are following the regulations. So unless there are independent auditors and inspectors to certify that a factory is not using forced labor, then it’s hard to prove that they’re not. And U.S. law, I think, is changing. The Xinjiang Forced Labor Prevention Act, which is currently probably near completion, is probably going to pass. So absent of labor inspections and certifications, I don't know how you do it.

 

Hon. Carlos T. Bea:  Okay. Thanks very much. As a judge and recovering lawyer, I’m interested in the rule of law as it applies. And particularly, because of one of our judges who’s traveled very often in China—Judge Wallace—I’d like to ask, Mr. Jenkins -- on the commercial level of commercial disputes, can you describe how the Chinese courts work and whether arbitration is a system which has entered into Chinese commercial disputes as it has in this country?

 

John S. Jenkins, Jr.:  Yes, Your Honor. I mean, it’s certainly been our experience, given, as I mentioned, where we operate—eastern China from Qingdao down through Suzhou and into Shanghai, and in southern China, around the Pearl River Delta—that the Chinese courts, and particularly the commercial courts, and those that handle intellectual property, do render principled decisions based on the evidence. And we do have, I think, experience where we believe that the decisions that have been rendered in cases where we’ve had those types of disputes, has been just, based on the facts and based on the evidence. And it’s not been influenced by either politics or forces external to the courtroom itself. We don’t think that we got homecooked.

 

And one particular dispute comes to mind where a trademark dispute between TE and a local Chinese company in Shenzhen -- and the dispute was litigated over five years. We won at each instance in the Chinese court system, and ultimately, the property rights of a, in this case, Western multinational, won out over a local businessman asserting a contract right. And so we find that the court system, at least, in those jurisdictions where we’re, I would say, heavily present, are reliable for resolving commercial disputes.

 

That said, depending on what area of law you’re talking about, it’s a little bit of a different legal regime. I mean, the Chinese and labor and employment legal regime is very employee-friendly, and I think I find in those cases, courts will be very accommodating to an employee who is challenging a labor action, probably for, I would say, more socialistic reasons than based on the principles of the case.

 

Hon. Carlos T. Bea:  Sounds like California.

 

[Laughter]

 

John S. Jenkins, Jr.:  Or South Korea, or Japan, or a number of other, I would say, pro-employee jurisdictions. But we know that, and that’s, I would say, somewhat a cost of doing business in that country. So I would say, by and large, we find that the court system works as it’s, I would say, intended to and don’t find the need to resort to alternative dispute measures to resolve commercial disputes.

 

Amb. Kelley Currie:  Judge, I’m sorry. If I can just add one thing there -- because I think it’s very important, that as long as your case doesn’t touch on the party’s prerogatives or the political interests of the party, then you’re generally going to get the result, and the outcome, and the process that my fellow panel member describes.

 

But if you do in any way unhinge on the party’s prerogatives or any political subject, that -- and this is true not just of American or Western companies, but true of Chinese defendants as well -- and that the party does consider the law and the courts a tool of the party in everything about the law, and the courts are subservient at the end of the day.

 

And this is in the Constitution—the Chinese Constitution—that, at the end of the day, everything is subservient to the party, and if the party decides that they want an outcome, then that’s the outcome that the courts come up with, and this has been proven time and time again.

 

Hon. Carlos T. Bea:  Now, a question for Dr. Schake. You mentioned a military analysis which should keep us awake at night. To what extent is the military analysis going to affect business in China?

 

Dr. Kori Schake:  Oh, that’s a great question, Your Honor. I think the military -- the tension between China’s dramatic military expansion and what it is they’re trying to do with it is making Washington policy nervous, right? I mean, members of Congress are falling over each other to be tougher on China. There’s not a let’s-be-cautious-they-might-not-mean-this caucus on China these days because they are expanding their military.

 

They tripled the size of their nuclear force, for example, which is causing the Pentagon to worry that they had always assumed that China’s nuclear deterrent had a minimalist strategy, namely, just to deter an attack on the country of China, and they have a force capable of that, and they just tripled it. And they just tested hypersonic missiles that can orbit the earth and thereby get past any missile defenses that the United States or other countries might construct.

 

So they just did targeting exercises where the targets were American aircraft carrier mockups, and so the military ambitions China – oh, I’m sorry. One last piece I should’ve added -- which is their real aggressiveness against their neighbors is causing us to think that all that military buildup is for a purpose, and that is contributing to a reevaluation of what it is the Chinese government wants, and that assessment of what the Chinese government wants is part of this spiraling-up of political risk that’s going on, and that will inevitably affect the business climate.

 

Hon. Carlos T. Bea:  Has it, to date, decreased American investment in China?

 

Dr. Kori Schake:  You know, it’s so interesting. It has not, but what we are seeing is the starting of the conversation about it, right? Wall Street and Silicon Valley are the interesting bellwethers on this. Ray Dalio, the founder of Bridgewater, an enormous investment firm, argues that there’s no telling who will win the war between the U.S. and China; therefore, he’s investing equally in both countries.

 

But the state of California is refusing to allow its retirement funds to invest in Chinese-owned companies. So you start to see the conversation. George Soros took to the pages of The Wall Street Journal to argue that it’s un-American to invest in Chinese companies. The commerce department begins to get a lot more aggressive about determining what areas of the Chinese economy need to be off-limits to American investors and what areas of the American economy they will not permit Chinese to invest in. So the bifurcation is just starting, and the area most resistant to it is Wall Street.

 

Hon. Carlos T. Bea:  Thank you very much. Now, I’d like to open up the panel to ask questions, one of the other.

 

Amb. Craig Allen:  Can I just say, another area that is a little bit resistant is American farmers. So 30 percent of soybean exports go to China. The U.S. agricultural communities’ prices are high now, and a lot of that is as a result of China. So it’s not only Wall Street that -- it’s many American citizens, like you and me, who are making a living, as a result of a rapidly growing economy, that has a complementarity about it. And so, projecting forward and suggesting that it's all going to go unravel, the evidence indicates otherwise. Thank you.

 

Hon. Carlos T. Bea:  Now, do any of the panel members wish to add to the remarks or ask questions of each other?

 

[CROSSTALK]

 

Amb. Kelley Currie:  I think there are a couple of things that I could add to on to what Kori has said about some of this. And it was very interesting -- when I was listening to the comments and saying that these issues need to be handled through a bilateral -- that human rights, or something, that need to be handled through bilateral mechanisms -- and they certainly are being handled through bilateral mechanisms, such as the UN Human Rights Council where China is a member in good standing, along with Venezuela, and Cuba, and Russia, and Saudi Arabia.

 

So that’s super awesome. And you’ve also discussed how the International Labor Organization basically has no access to do any kind of auditing or labor monitoring in China when it comes to issues like forced labor. And I would add that third-party auditors have basically stopped working in China because they can no longer verify supply chains or conduct credible audits.

 

But one thing that just kept coming back to me is this quote that I heard recently, and I’ll read it for everybody.

 

“In addition to addressing workforce needs and expectations, we expect companies to mitigate adverse impacts to people that could arise from their business practices, exposing them to material risks.

 

Failure to address these risks can reverberate across the company’s value chain, which may affect critical relationships with key stakeholders and impact shareholder value. Specifically, we ask that companies put in place the appropriate board oversight, due diligence, processes (e.g. human rights, risk assessment, and supply chain tracing, recruitment procedures, auditing, and grievance mechanisms, etc.), and remediation efforts, and communicate externally on their performance.”

 

The person who said that is a gentleman named Larry Fink. He is the CEO of BlackRock, which is an investment firm, I believe, that has $10 trillion in assets under management, primarily U.S. investors, pension funds, and retirement savings. So I just wanted to point out that Larry Fink thinks that human rights are a valid subject for businesspeople to be engaged on.

 

Hon. Carlos T. Bea:  Thank you. Now, we’ll ask questions from -- we’ll take questions from the audience. Please state your name, and where you’re from, and to whom you are directing the question.

 

Jonathan Brightbill:  Great. Thank you. My name is Jonathan Brightbill from Winston & Strawn. And before I start, Judge Bea, it’s an honor to be before you again. You were actually on en banc panel that I argued about two years ago. You were one of only two votes that properly held that the court had no jurisdiction and should just --

 

[Laughter]

 

-- [inaudible 01:18:41] entirely. So I thank you for that.

 

Hon. Carlos T. Bea:  People often come up to me at cocktail parties and say, “We love your opinions.” And I say, “That’s a case of mistaken identity. I only write dissents.”

[Laughter]

 

Jonathan Brightbill:  Well, this one was. This one was. So my question is for the panel as a whole. So there’s been a reference made to the thesis behind opening the doors to China was that by bringing in American investment, that they would ultimately become a democratic country. And people point to precedents like Japan, or South Korea, or Taiwan, or things that opened up over time, or, at least, that was one of the precedents that some people argue, right?

 

Is there a selection bias that there are actually -- and I don’t know -- are there precedents for countries where we opened up the doors, and there was a lot of Western investment, and we thought that this would lead to, ultimately, a sustainable democracy, and yet after, maybe, 10 or 15 years of success, it actually all came crashing down and back? I mean, I think about South America. I think about the Middle East. It seems, to me, that that’s probably true, but I just wonder if this idea that China -- maybe, we thought it would work, but it’s not going to -- if there are actually precedents for that?

 

Dr. Kori Schake:  So the best counter-example is imperial Japan, which at the end of the 19th century, opened up to cultural, business, political influence -- became intertwined and became more deeply militaristic and dangerous to everyone around it. The zenith of globalization economically, before the 1990s, was right before World War I, and so there are good counter-examples—a couple of them.

 

It was more an article of faith and philosophy that we believed that as countries became more prosperous, they would become more politically liberal because when you look at the countries that are most stable, most prosperous, they are representative democracies. And so, yes, there was selection bias in that article of faith that all of us are now wringing our hands over.

 

Amb. Kelley Currie:  And I would add -- because I was working on the Hill during the MFN debate in the mid-‘90s and working for a member of Congress who was really conflicted and went back and forth on this issue and voted on the most-favored-nation trading status differently year after year just based on how things were going on the ground in China—and he was convinced of that— I think that the bias was reinforced after the fall of the Soviet Union because we had won the Cold War, and our values had triumphed.

 

And I think that that did -- that end of history argument moment—that Pax Americana moment—convinced us all that this wasn’t an exorable outcome. I certainly was guilty of believing it, at least a little bit, or hoping -- maybe wishful thinking is more the proper characterization.

 

[CROSSTALK]

 

Dr. Kori Schake:  Can I add one more quick thing to that? Which is the two people who absolutely believed that Hegel was right and that as people become more prosperous, they become more demanding political consumers are Vladimir Putin and Xi Jinping. The repressiveness they are putting into place is precisely because they think our values are universal, and so their two votes matter.

 

Amb. Kelley Currie:  Yeah.

 

Jonathan Brightbill:  Thank you.

 

Hon. Carlos T. Bea:  Next question.

 

Connor Currie:  Hi there. Connor Currie from Wake Forest University School of Law. I appreciate Ambassador Currie’s Scots Irish spelling of the name. None of this “Y” business.

 

[CROSSTALK]

 

Amb. Kelley Currie:  It’s a family name.

 

Connor Currie:  My question is, what is the role of the U.S.’s relationship to India in addressing some of these concerns, whether economic or military, with China? And for the panelists, I guess, who are less concerned about China economically and militarily, what does the relationship with India mean for you all?

 

Amb. Kelley Currie:  Kori, that’s your wheelhouse.

 

Dr. Kori Schake:  I’ll take the India piece of it, which is the United States has wanted, for a long time, a lot closer relationship, and security, and foreign policy with India. And India was never willing to give it—always valuing a sense of itself as the leader of the nonaligned movement. China’s behavior is driving India into deep cooperation, not just with the United States but also with Australia, Japan, other countries. You see the quadrilateral cooperation not just on security but on vaccine distribution.

 

Indians are so nervous about Chinese aggressiveness that they are willing to step away from their traditional nonalignment because they want the help of other countries. It would be fabulous if we could substitute India as a production base, but the problem is bureaucracy in India is so expensive and so unreliable that, until they fix that problem, American companies are going to be looking other places.

 

John S. Jenkins, Jr.:  I can certainly speak, I guess, firsthand on that. Our India business is about the tenth the size of our China business, and as much as we want to invest and grow in the India market, where I only have 4 factories in India versus 17 in China, it is that very reason that Western multinationals are not more heavily present and invested in growing India for India. The bureaucracy, the inflexibility, the limitations on FDI all discourage the growth of western multinational presence in India. If you’re not one of the 27 families, essentially, largely, the Indian economy is closed to you.

 

Hon. Carlos T. Bea:  Okay.

 

Connor Currie:  Thank you.

 

Hon. Carlos T. Bea:  Next question.

 

Nick Matich:  Thank you. Nick Matich. The Chinese Communist Party has probably murdered more people than any entity in human history. And so, for the panel, does there become a point where companies should cease doing business in a jurisdiction because its government is so reprehensible? And if so, why is China not that example?

 

Amb. Kelley Currie:  Yeah. Hard to argue with that, and I think that the fact that they are in the midst of committing a genocide at this very moment is part of that as well. And I think that everybody should be questioning their exposure. I think, though, unfortunately, that most corporate entities, most of the investment firms -- I mean, I read that quote from Larry Fink earlier. Larry Fink has also, in the past year, urged all stock indices to re-weight toward China, saying that they have China underweighted in their indices by up to a third. He has just opened a massive new retail investment business in China as well.

 

So there’s a lot of hypocrisy in business. I’m here to tell you. Shocking news, I know, especially when it comes to things like the environmental, social, and governance standards that many corporations are signing up to and saying that they espouse as part of the effort to stave off the woke mob. They are espousing all of these new standards for themselves and saying that they believe in saving the planet, and reducing carbon, and that they respect worker and human rights. It only seems to apply here in the United States, not to overseas jurisdictions, and it’s definitely not to their China business.

 

So I think that one of the big challenges for people who do care about this is to expose that hypocrisy, and then monetize it, or commoditize it, and use it to highlight the problem of how -- and it starts with looking at your own investment portfolio to see what holdings you have in your 401k that may be connected to forced-labor supply chains or maybe supporting companies that are involved with civ-mil fusion that are helping Chinese military modernization and enabling the aggressive behavior that Kori mentioned earlier—the threatening behavior towards China’s neighbors and all of these other things.

 

Again, as Xi Jinping continues to assert the party’s primacy within China, and in some cases take China backwards both economically and politically away from the openness of the Deng era -- and you see this going on already in the Sixth Plenum that’s taking place right now in Beijing, where Xi Jinping is putting out new TIPA, new pronouncements, on what’s called common prosperity that’s intended to relevel the playing field in China. As he’s cracked down on highflying Chinese entrepreneurs to bring them back down to earth—the disappearance of people like Jack Ma, the pullback on the financial IPO, what happened with the Didi IPO—all of these things that are going on, they are, I think, starting to create nervousness within the financial sector about the risk.

 

And what’s interesting to me, again, is you’re starting to see -- you have George Soros, on the one hand, criticizing Ray Dalio for his pro-Chinese investment approach, and then you have, on the other hand, people like Josh Hawley, and people in the ISA, and leading Republicans, criticizing U.S. companies for basically funding China’s military modernization. And it’s coming at this from all directions.

 

And so I think when Kori talks about the decoupling and the unsustainability of the present model, those are the warning signs that I see in the system. And whether we’re headed toward a situation where -- the fact that there’s a trillion dollars in U.S. investment in Chinese companies that are listed on New York Stock Exchange, but incorporated in the Cayman Islands, and all of their assets and insiders are inside China, that’s a trillion dollars in U.S.-- again, 401k, pension funds, investments, that are subject to no legal regime, no regulatory regime. Definitely not the SEC. Definitely not suable in U.S. courts or assets recoverable by U.S. investors if something were to be expropriated, as happened with Alibaba and Alipay a decade ago.

 

And the fact that these things continue to be -- these companies—these Chinese companies—continue to be law proof, we continue to invest billions, up to a trillion dollars, in them and through U.S. capital markets, I believe that we are headed toward a situation of systemic risk with that alone, let alone -- so what the financial business understands -- they don’t care about human rights, at the end of the day, notwithstanding what Larry Fink says in his ESG letters. They care about money, and they care about making money, and they’re chasing alpha, but they do care about risk.

 

Amb. Craig Allen:  So when I became an ambassador, you get a letter saying that you should be pragmatic and principled. You should follow U.S. government interest in a pragmatic and principled manner. And I think that that’s good advice. When you look at China, it’s approximately 20 percent of the global population—about 30 percent of global growth.

 

Let’s do a counterfactual. If you pulled out of China, they’re going to have the speed and the scale to dominate the global economy. Now, if we’re in there competing with them, we will have -- working with our allies, in a very practical manner—ways that I suggested—trying to improve the situation, that’s a pragmatic and principled approach to this.

 

China, you might wish to wish it away. Good luck. It’s not going anywhere. We’re going to have to work with them. How do we work with them effectively is the question? And I think that talking with them is a good way to go. A little bit of cognitive empathy won’t kill you, and we need a pragmatic and principled relationship—a stability within this relationship. The discussion of removing American companies will create tremendous instability within the global framework, and it will allow China to dominate East Asia and perhaps the world. And that is not an outcome that any of us should wish for. Thank you.

 

Amb. Kelley Currie:  I have to remind everybody, though, that China gets a vote here, too. It’s not just what we do. Xi Jinping gets a vote in this, --

 

Amb. Craig Allen:  Sure.

 

Amb. Kelley Currie:  -- and so far, he is signaling very, very clearly that he would like to be less reliant on U.S. capital markets for Chinese growth. He would like to be less reliant on U.S. consumers for Chinese growth. They have a theory of dual circulation that they will continue to get what they can from the global financial system and the world economy while increasing China’s own self-reliance on its own internal markets and its own internal capabilities.

 

Again, I’m not making this stuff up. This isn’t Kelley Currie’s version of what’s going on in China. This is what the Chinese Communist Party says itself. I choose to believe that what they say they intend to do is what they want to do.

 

Hon. Carlos T. Bea:  Okay. Next question?

 

Sam Wright:  Yes. I’m Sam Wright. I’m an attorney in central Texas. I understand the PRC clearly has the military capability to invade, defeat Taiwan, but they would take massive casualties, and because of the only recently rescinded one-child policy, it would just be a demographic disaster, and maybe, the grieving parents would rise up. Is that a theory that you give credence to or that Xi Jinping just doesn’t care?

 

Dr. Kori Schake:  I do give some credence to it. China’s demographics are one of the reasons not to bet on long-term Chinese power. And if you think about the way, for example, the United States overcomes its demographic constraints, we do it by immigration. And the Chinese don’t have a social and economic model that makes that a comfortable alternative for them.

 

So, yeah, if you got to choose whether you were going to go into military service, your parents might prevent you from doing so. But don’t forget that Chinese have a very limited range of choice, and that if the government chooses to do that anyway, the fact that the Chinese people don’t like it probably won’t matter. We shouldn't project onto Chinese society the ability to control their government’s choices because, sadly, they don’t have it.

 

Hon. Carlos T. Bea:  Next question.

 

Questioner 5:  Yes, sir. I wanted to say, I think my friend Nicholas has plenty of cognitive empathy. It just happens to be for the Uyghurs.

 

Dr. Kori Schake:  Well said.

 

Questioner 5:  And this, I don’t mean to be a snarky question, but I was wondering, for Ambassador Allen—thank you for being here—is there a red line that you think if China crossed, we would have a moral or ethical responsibility to decouple our economy from theirs?

 

Amb. Craig Allen:  I would think that certainly if there was an invasion of Taiwan, that would absolutely be the case. So, yeah, of course. I mean, it’s not my job to apologize for the Chinese government. It’s my job to stand up for American farmers, workers, and ranchers.

 

China is going to continue to produce a lot of growth. Okay? We should be a part of that. American workers, farmers, and ranchers should not be constrained unnecessarily by their government just due to sensitivities that are not inherently bilateral. So an invasion of Taiwan, an invasion of Korea, an attack against Japan, closing off the South China Sea, an invasion of India, I agree, that’s a very dangerous situation. These are all potentially casus belli.

 

Dr. Kori Schake:  But they are closing off the South China Sea, --

 

[CROSSTALK]

 

Amb. Craig Allen:  They are --

 

Dr. Kori Schake:  -- and they have actually invaded India and taken a swathe of territory.

 

Amb. Craig Allen:  -- I’m sorry. That is incorrect.

 

Ethan Yang:  Hi. My name’s Ethan Yang. I’m with the American Institute for Economic Research. I’m also a 1L at Scalia Law School. My family’s also from Taiwan, so I guess a fun fact. So on the issue of decoupling, some of it being natural, some of it being due to regulatory issues in the U.S. and China, I’m curious to know—especially given the concerns that Ambassador Allen and Currie raised about the dual circulation on the one hand, but also the ability to retaliate if they invaded Taiwan or South Korea economically, on the other—what do you make of the argument that the counterfactual of a decoupled China is much worse in the reality that we have today, as in you will have a CCP that is not concerned with appeasing the U.S. corporations and attracting investment, just concerned with doing its own thing without the possible threat of actual real decoupling, as in the case of invasion of Taiwan, or South Korea, or other human rights violations, and that kind of sorts? So I was just wondering what the panel thinks of the counterfactual, that the CCP will be far more unhinged and far less concerned of treading lightly if we actually fully decouple. Thank you.

 

Dr. Kori Schake:  Yeah. I think we honestly don’t know the answer, right? I think it is generally true that a desire to preserve the engines of prosperity limits the range of choice for most countries. But I’m hesitant to bet too much on it. Because, for example, Xi Jinping promised President Obama that China was not militarizing the islands it’s building in the South China Sea to foreclose other countries’ access to it, and yet they have done that.

 

And in a whole bunch of other ways, China looks to be playing chicken with us, trying to keep their options open while foreclosing ours. And we need to play as aggressive a game as they are if we are to sustain a level playing field—a set of rules that apply not just to us but also to China.

 

Amb. Kelley Currie:  And I would add to what Kori said that the way that we do that is not by getting in a race to the bottom with China, whether it’s economic, political, or otherwise, that we do it by leaning into our own strengths and the areas where they are poorly set up to compete against us. And that’s one of the reasons why I think that the effort to work with allies, the quad, efforts such as that, are very important because we do have allies, and we do have a more attractive governance and values model than one-party authoritarianism. And so, I think that those are the areas where we, as a country, can also lean in and really crowd into that space.

 

I think also economic openness -- I am a free trader, actually. I believe in free trade. I believe in free trade with free nations, though. I think that if you are not doing -- if you’re trading with unfree nations, you’re not dealing with a partner on the other side of the table that’s able to come to you and make trade arrangements that are equitable. They just can’t because they have different incentive structures within their governance, and they have different incentive structures for their own political survival. So I think it’s really important to make that caveat on what free trade looks like—that it has to be done with partners that come to the table with the same expectations that you do.

 

Hon. Carlos T. Bea:  Next question.

 

Robert Delaney:  Thank you. Robert Delaney. I’m the North America Bureau Chief with South China Morning Post. I just wanted to ask, with respect to the challenges that U.S. companies have with China when it comes to supply chains and when it comes to technology, to what extent will the Innovation in Competition Act that’s been passed by the Senate have, assuming that the House passes their version and it becomes law? To what extent does this legislation, if it becomes law, will it help U.S. companies? Thank you.

 

Hon. Carlos T. Bea:  Want to take that, John?

 

John S. Jenkins, Jr.:  Sure. Most companies, at least, in the technology manufacturing space the TE is in, we design local for local, we make local for local, and we deliver local for local. Companies that would be in that supply chain for the industrial supply chain, be it OEMs, Tier 1s, Tier 2s, the way that they’re organized is they want their supply chains, relatively speaking, close to where they are and innovating, making, and delivering close to where they are. And so, as I mentioned at the outset, we’re roughly a third, a third, a third across the globe, and our engineering powers split roughly along those lines as well.

 

And so our engineers are designing in Shanghai, or they’re designing in Bangalore, or they’re designing in Bensheim, Germany, or just up the road in Harrisburg, Pennsylvania for applications that are going to be made locally, drawing local supply chain raw materials and delivered locally to the customer where they need it for their application. And so much of the, I would say, export control and technology control efforts don’t reach a broad swathe of what industrial tech actually does on a day-to-day basis.

 

We’re, like I said, a Swiss-domicile company where engineering operations outside of the U.S. are, I would say, largely outside of the legislative reach of the U.S., or the U.K., or Germany, or you pick the country where there’s regulatory activity, but as long as you’re design[ing], making, and building locally, you’re a domestic enterprise for the purposes of whatever, again, technology or trade control law you’re talking about.

 

So we, of course, are paying attention and want to understand the reach, the scope, the limitations, but fundamentally, we organize, design, make, and deliver at a local level, and as long as that’s the business model that our customers, who’s one of our important stakeholders, right, expects of us, that’s how we’re going to behave because that’s how we compete.

 

Dr. Kori Schake:  That’s a nice point.

 

Hon. Carlos T. Bea:  All right. We have five minutes left. Next to the questions. You first.

 

Aaron Katz:  Thank you very much, Your Honor. Aaron Katz, University of Connecticut School of Law. It’s been said that America’s companies have been bringing rule of law, justice, and liberty to the communists, and I am wondering if there is any concern that the opposite ideals—the ideals of China’s authoritarian regime—have been rubbing off on us? Are we bringing back their toxic ideas to the American people and our institutions, or is it only a one-way street?

 

Dr. Kori Schake:  That’s a fabulous question. I don’t see much evidence that American businesses are adopting Chinese Communist Party practices in part because American law prevents it, right? You don’t have the ability to do things that the Chinese government can do and can make possible in China, so the rule of law matters hugely. Congress would sanction it. State governments -- you have so many more means of legal, political, and societal control over activity in the United States that I don’t think it’s much of a threat.

 

But the point you raise is an interesting one. So I was having a debate with a terrific China scholar, Nadège Rolland, from the National Bureau of Asian Economic Research, and I was arguing that the activism of American civil society groups—basketball players caring about Uyghur rights—is actually going to drive -- eventually going to either drive bifurcation or drive changes in Chinese government behavior.

 

And she thinks I’m mistaken because she thinks the Chinese government has already written off Western markets and Western publics as unwinnable in the medium term, but that what China is doing is focusing on winning the global south. Countries where you have 27 families, who run the economy or authoritarian states -- that is, we may be unwinnable, but there’s a huge swathe of the world that’s in play because our values are disruptive to the social, and political, and economic orders.

 

Amb. Kelley Currie:  I come down somewhere in between my good friend Nadège and Kori on this, but I think that, yes, China is pivoting toward dealing with the global south because it’s much easier, and they’re swimming in a warm sea when they’re dealing in countries that have a weaker rule of law, weaker institutions, weaker oversight mechanisms than the United States.

 

But when it comes to U.S. -- and not just U.S. business, but when it comes to the global multinational corporations, to the U.S. financial services industry, they are so very much interested in coopting and instrumentalizing those sectors and continuing to try to use them to advance their purposes, whether it’s to get access to advanced technology, get access to liquid capital markets.

 

We still have the most liquid, largest, by a factor, capital markets in the world, and they still do need some of that. And that’s why you’ve seen some pretty dramatic things with the financial IPO and the Didi IPO, that there was a big effort by the Chinese Communist Party to reassure the financial elites and the global business elites that, “No, no. We still want your money. We still want your investment. Please BlackRock, come open your retail investment operation here, and set up a $1 billion mutual fund, and let Chinese invest in it directly.”

 

So they’re still hedging a little bit, definitely moving towards the global south, but still see these sectors, the U.S. business community, in particular, as a valuable ally in holding off the decoupling movement and the more hawkish elements of U.S. national security and foreign policy and trade policy.

 

Hon. Carlos T. Bea:  Last question.

 

Harout Samra:  Thank you, Judge. And thank you all for really a fantastic panel, and I’ll keep this short. I know we’re running out of time. Mr. Jenkins, I was really intrigued by your comments about the Chinese courts. In my experience, and in my practice -- Harout Samra with DLA Piper -- one of the concerns that remains prevalent is intellectual property protection.

 

Amb. Craig Allen:  Sure.

 

Harout Samra:  And I’ve been involved in arbitrations and other disputes with Chinese companies.

 

If you can, expand a little bit on your experience with the Chinese courts, but in particular, if you could, talk about under what circumstances you might look or have looked to international arbitration, for example, as an alternative, and to what extent you have had a positive or other experience with that, as it relates to your business interactions in China. Thank you.

 

John S. Jenkins, Jr.:  Sure. So without boring you, I guess, with facts, and figures, and details, right, we’re a Clarivate Top 100 innovator. We have about 14,000 patents and are consistently innovating, largely, electrical, mechanical, and material science solutions. Now, not all the solutions are, I would say, fit for a global market or global purpose. A lot of those are, I would say, regionally designed, right? I don’t need to overengineer because I can’t sell and make margin if I’m overengineered. I need to engineer fit-for-purpose and then make for margin, so to speak.

 

So in large part, again, the local designs, manufacturing, an applications drive your IP strategy. I don’t need to protect a piece of IP that I developed in India, or Germany, or the U.S. I don’t need to protect it everywhere because it’s not necessarily fit-for-purpose everywhere. However, where it is fit-for-purpose everywhere -- there are those types of innovations that are truly breakthrough in material science or whatever the engineering application is.

 

Well then, we will look to, I would say, protect and license in a manner that gives us the highest degree of comfort and confidence that our innovation is, number one, going to be protected and, number two, is not going to be subject to inappropriate exploitation use or copying. And in those circumstances, we would, I would say, have a more western protection regime.

 

I will say, however, that we have found, particularly in China, the willingness of competition authorities to respect and enforce intellectual property rights. I’ve had, during my tenure as general counsel, no more than four, right, customs raids for counterfeit factory activities where you’re taking my design; you’re copying it; you’re using my trademarks; you’re selling to my customers.

 

Western OEMs are selling a connector to Volkswagen, representing that it’s mine, and in fact, it’s not mine. And the competition police, when we present them with the evidence, you’ve got to make the case, but then they’ll go in, they’ll seize the goods, they’ll arrest the people, and they will make them accountable to us financially for the harm they’ve caused. So 80/20 rule, maybe—80 percent of it—local protections and a local IP strategy is sufficient. Twenty percent would maybe be a little bit more of breakthrough innovation that you would treat a little bit differently.

 

Hon. Carlos T. Bea:  Okay.

 

John S. Jenkins, Jr.:  I hope that helps.

 

Hon. Carlos T. Bea:  All right. Now, before we thank our panel, I’d like to remind you that the next event will be the Barbara K. Olson Memorial Lecture and reception starting at 5:00 PM in the Grand Ballroom. Now, can we join me in all thanking the panel?

2:45 p.m. - 4:30 p.m.
Originalism: Perspectives from the Bench

2021 National Lawyers Convention

Topics: Federal Courts • Constitution • Philosophy
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". This panel explored "Originalism: Perspectives from the Bench."

Many would agree that originalism is now a standard when it comes to judicial philosophy. On this panel, a variety of judges will discuss how they 'do' originalism while sitting on a case. Furthermore, they will provide their views on whether and how advocates can best brief and argue cases along originalist lines.

Featuring:

  • Hon. Edith Jones, U.S. Court of Appeals, Fifth Circuit
  • Hon. Kevin Newsom, U.S. Court of Appeals, Eleventh Circuit
  • Hon. Andrew Oldham, U.S. Court of Appeals, Fifth Circuit
  • Hon. Neomi Rao, U.S. Court of Appeals, D.C. Circuit
  • Moderator: Hon. John Nalbandian, U.S. Court of Appeals, Sixth Circuit

Speakers

Event Transcript

Dean Reuter:  Can you hear me in the back? Well, welcome once again. Just a couple housekeeping notes before we get started before I introduce John Nalbandian, Judge Nalbandian, our moderator.

 

      I've also been asked to repeat the D.C. regulations on mask wearing. I mentioned on day one, there are some exceptions. If you're actively eating and drinking -- I don’t know how you can inactively eat and drink, but maybe that's a thing. And also as I mentioned on day one, even for these large indoor gatherings, if you're unconscious, under the D.C. government restrictions, you do not need to wear a mask [laughter]. So help out your seat mate. If you see somebody who's unconscious, take their mask off for them [laughter]. Also, my final mask tip, I mentioned earlier this morning, it can be uncomfortable. It can be a difficulty or a pain. What I've done to try and ease that difficulty is last night I soaked my mask in some high end scotch [laughter], so I've been rather dreamily enjoying my ask all day long, so with that, we're going to resume our panel -- not resume our panel, resume our convention with this panel.

      It's my pleasure to introduce the moderator. All the bios are in your convention app, so I'm just going to introduce him as you know him, Judge John Nalbandian on the Sixth Circuit. I'm very pleased to have you back, Judge.

 

[Applause]

 

Hon. John Nalbandian:  Thank you. Thank you, Dean. Welcome. Welcome everybody. It's great, obviously, to be back in person. And we've said that, but, obviously, it's a great thing, and we are really happy to be here. So I want to welcome everybody to our special session panel. It's entitled Originalism: Perspectives From the Bench. And today we're going to hear from a number of very distinguished jurists about, among other things, how they incorporate originalism and originalist analysis into their opinions and on advice that they have for advocates to help make them -- to help you all make these kinds of arguments which in term will make judges' lives easier. And who doesn't want that, of course?

 

      So obviously, I'm John Nalbandian. I'm on the Sixth Circuit. I'm your moderator. Before we start, I'd like to add a quick personal note. So in addition to marking Justice Thomas's 30th year on the Supreme Court, this fall also marked the 30th anniversary of my starting my 1L year in law school at UVA, a decidedly -- I will say, a decidedly less significant event in the history of the republic, I will grant you. However, what it really marks in the 30th anniversary of when I first joined The Federalist Society. And why does this matter, of course?

 

      Well, the first publication that I remember reading from The Federalist Society was a pamphlet that contained a speech that was given by then Attorney General Edwin Meese to the ABA in 1985. As many of you students of originalism and the originalist movement know, the topic of that speech was the then somewhat controversial idea that the text of the document and the original intention of those who framed it would be the judicial standard in giving effect to the Constitution. And although the idea of original intent and what some now call original expected application had certainly been around for a while, coming at the time that it did, Attorney General Meese's remarks were a call for a course change over the prevailing views of constitutional interpretation.

 

      Now, one year later in 1986, Justice Scalia, then Circuit Judge Scalia, in an address to the Attorney Generals' conference on economic liberties, stated that the quest for original intent was really a quest for original meaning, which later became a quest for original public meaning. And now, skipping over a bunch of history, of course, here we are 35 years later with originalism being one of the, if not the, prevailing most popular or prevailing method at least for interpreting the Constitution, at least we hope. Indeed, you know that you've arrived when you start having fights among yourselves about what I will call nuances in the doctrine.

 

      In any event, I'd like to turn to our panel. I'll skip the detailed introductions because I've taken too much time talking about myself, of course, but you can find their biographical information in the conference materials or on Wikipedia, of course. But briefly, we're going to start with Judge Edith Jones who has served on the Fifth Circuit since 1985 and is, without a doubt, the wisest member of our panel. Next we'll go to Judge Kevin Newsom from the Eleventh Circuit or, as I like to call it as a former Fifth Circuit clerk, the old Fifth Circuit. And I think it's safe to say that Kevin writes the longest footnotes of any member of our panel [laughter]. Next we have Judge Andrew Oldham from the Fifth Circuit, who is certainly the buffest member of our panel [laugher]. Flash those guns. And finally, we have Neomi Rao from the D.C. Circuit. And of course, given that it's the all-important D.C. Circuit, I wouldn't dare make a joke about Judge Rao [laughter].

 

      So I'm going to be by asking the members of our panel some questions to prompt a few individual remarks. Then we'll have some discussion, and obviously, we'll turn it over to the audience at some point.

 

      So Judge Jones, I talked a little bit about the history of originalism, original intent, and you were there from the beginning. And I wonder if you might add a little bit generally to that history and maybe highlight some of the materials that maybe weren't there at the time you were doing originalism and what you've got now maybe that's different.

 

Hon. Edith Jones:  There's been a revolution, and that is largely attributable to the founders of The Federalist Society whether you're in this room or not. I was just reminiscing about this. I took the bench on January 1 -- June 1, 1985, about one month before Ed Meese's speech on originalism. I was the daughter of a doctor and a trained nurse, and our affiliation with lawyers as I grew up was rather small. But I do remember, and skeptical at that, I do remember "Impeach Earl Warren" bumper stickers. And in certain parts of Texas, these were not uncommon because there was a large public anxiety, bordering on revolt, about the revolution that the Warren court has wrought in constitutional law. I knew mothing about originalism at the time. I just had the visceral feeling along with millions of people that judges shouldn't be telling everybody else what to do.

 

      I got to law school in 1971, had the good fortune to be mentored by Charles Alan Wright whoyou probably don't even knowparticipated in defending President Nixon until he felt compelled to resign. And Wright was known as a conservative in the circles of the law school, which was still pleasantly apolitical at that time, but he was really known as the author of the treatise on federal procedure. And there wasn't anything particularly originalist about that because, after all, that was based on the federal rules from the 1930s that had wrought their own very significant changes in traditional procedures.

     

      So, when I came on the court, not only was I the young whipper snapper, and they wondered how did somebody this age who had been a mere bankruptcy lawyer get to a court of appeals, but they just had -- I had to earn my spurs. And I was at the beginning of The Federalist Society. The first time I came here to a conference, I think, was in around '87 or '88 where I debated Liz Warren about bankruptcy policy...

 

[Laughter and applause]

 

Hon. Edith Jones:  That established a relationship from which she has never fully recovered.

 

[Laughter]

 

Hon. Edith Jones:  But of course, General Meese was there, and I believe Ronald Reagan gave a speech to the banquet which was assembled in this room. So you see how The Federalist Society has grown and matured. The whole approach to constitutional law underwent a revolution. Many of us were familiar with what Justice Rehnquist had been doing, largely on his own for some years. Then we viewed with great excitement the appointments of Justice O'Connor and Justice Kennedy, then the elevation of Rehnquist to the Chief Justice along with Justice Scalia's appointment. Justice Scalia, I think, started the ball rolling with his emphasis on textualism and what, until only a few decades earlier, would have been considered the traditional approach to the law, which is to look at the law in order to interpret and not the spirit and the legislative history and so on.

 

      But we had very few resources. Very few arguments were founded in originalism. So it really took the inspiration of Justice Scalia, the ongoing inspiration of Judge Bork, even though, -- well, which was a wakeup call to all of us about the stakes that were at issue in confirmation battles and in the battle of ideas, and then finally, the accession of Justice Thomas, the most dangerous man in American as one left wing publication called him, because he and Justice Scalia taught my fine colleagues here what's possible in the law.

 

      I will leave it to them to sketch in the rest of the details. I've been  able to study The Federalist Papers, the founding documents on the bench, in a way that as an economics major and lawyer, I'd never done. The resources are vast and deep, and hopefully we will be able to tell you about some of those that are available to those of you who are practicing lawyers who will have the chanceI have no doubtto be calling on originalism in the near future.

 

[Applause]

 

Hon. John Nalbandian:  Great. Thank you. Thank you, Judge Jones. Judge Newsom, can you talk a little bit about originalism in practice? I know you've had several opinions that have really delved deep into the original public meaning. I'm just wondering how you do that, and give is a little insight.

 

Hon. Kevin C. Newsom:  Yeah. Sure. Thank you. I guess I would say two things about originalism from my perspective now as a judge. One, it's really hard. And I'm going to steal a line not even from my colleague Bill Pryor, but as I recall, if I'm recalling the story correctly, from one of his former clerks who joked with him that, "Judge, originalism is a failed methodology simply because it's too difficult." And of course he didn't mean that, but doing originalism and doing it well is very, very hard. It would be much easier to shoot from the hip and decide cases sort of as the viscera direct you, but I don't think that's our role. And so to do it right is very, very difficult. I think to be an okay judge would be pretty easy, but if you want to be a good judge, then that's really hard, and this is part of it.

 

      The other thing I'll say about it is that originalism, I have found, is unpredictable. One of the great things, one of many blessings about being a judge -- and all of us at one point were in the practice of law. Many of you are in the practice of law. And I love being a practicing lawyer, but one of the things I love most about being a judge is that you don't know or care in advance what the answer is. You actually reason from premise to conclusions which is, one would think, how you're supposed to do it. But as a lawyer you have a client, and so you know what your endpoint is or should be or what you want it to be, and then you figure out a way how to package the arguments correctly so as to reach that end point.

 

      We, at least when we're doing it right, don't do that. You just start with the nitty gritty. You start with the data, and you reason your way through it. And when you've finished reasoning your way through it, you write it up. And originalism is part of that devotion to what I somewhat boyscoutedly maybe would call objectivity in the law. Like I actually believe that the law is a real thing and that it can be sort of studied and deduced. And I think originalism is part of that, along with its running buddy textualism, which is something that you tend to think of in statutory and regulatory cases.

 

      But originalism is so both hard and unpredictable. What I mean by unpredictable is when you're reasoning from the raw data to a conclusion, you don't know where that is going to take you when you begin. So for instance, Judge Nalbandian mentioned that I had tried this. I hope I've done it well. I've tried to do it well a couple of times. And in one of these instances, for instance, I came ultimately to the conclusion, which I think we may have reasonable disagreement about on the panel even, that the Supreme Court's Article III standing jurisprudence I can't make square with what I take to be the original understanding of Article III.

 

      And so that was an unpredictable thing for me. I couldn’t have seen that coming. I certainly didn't have it like out for standing. I never really sort of thought about it one way or the other until, as I said, in this concurring opinion after several unsatisfying experiences with it, I wondered if there might not be a better way to think about it, which caused us to go back. I say us because this is a team effort. I can't do this on my own. I think Judge Oldham will talk about this to some extent. But I count on law clerks, as well, who care about getting the law right and who care about reasoning from first principles. And so this was an us project, and it took us sort of trying to rewind the tape way, way, way, way, way back and figure out what we thought the better answer was going forward.

 

      So I think the things that I would want aspiring originalists to know in advancethis is fair warning. Walk into this with your eyes wide open. If you want to call yourself an originalist, a) you are choosing a difficult path. It would be easier to do it otherwise. I happen to think that this is the faithful way to be a judge when interpreting the Constitution, but it's hard, and it's also unpredictable. You may or may not "like" the answers that your originalism machine spits out. But that, to my way of thinking, is what it is. It's not my job to improve the law. It's simply my job to find it and interpret it as best I can.

 

      So I think Judge Oldham has some practical advice that he's going to give some of you in the audience. But I just want you to know, again, as originalists or aspiring originalists, that it's a difficult path. I think it's a righteous path, but it's a difficult path and a very unpredictable path as well.

 

[Applause]

 

Hon. John Nalbandian:  Judge Oldham, obviously if you want to address some of that, that would be great, but also, I know you do some teaching and follow pretty closely what's going on in academia. I wonder if you might kind of talk a little bit about what's going on in academia and maybe how it is or is not helpful to what you're doing as a judge.

 

Hon. Andrew S. Oldham:  Yeah. Yes. Thank you very much. And I guess I'll pick up where Judge Newsom left off and weave back into the intersection between the academy and the bench.

 

      One of the things that I've been most struck by in thinking about constitutional questions that come up in our cases is that by the time the case gets to the court of appeals, certainly by the time it gets to the Supreme Court of the United States, the case is on a trajectory, largely determined by the parties, sometimes determined by exogenous events. There's been briefing and argument and all sorts of development in the case. And sometimes there's an originalist argument made; sometimes there's not. Sometimes the originalist argument that is made is good; sometimes it's not. Sometimes it's not easy to tell if it's a good originalist argument or not.

      One of the things I'm most struck by in particular, as the consensus around originalism is a valid if not the most compelling way of understanding the Constitution's meaning has continued to grow and grown year and year, is that there seems to be this view that I can make a legal argument, and then I just cite a case from the 1720s, and that's originalism which is incredibly frustrating to try to -- you would never do that with just a -- if we were talking about the meaning of Title VII, you wouldn't just cite a case and say oh, well here's one case that supports my understanding of what the text of Title VII means. So it's not obvious to my why people think that they can just -- it's like the oh, ah, whiz bang factor of seeing a CCD citation from 1726. And I go oh, well, then that must be what the Constitution means.

 

      So by the time it gets to the court, and it's been litigated, and the parties have presented their arguments, it's often too late, to say nothing of the timeframes that we have to decide the cases under. Our court gets thousands and thousands of cases a year. You can't just sit and take nine months to go down and try to figure out the original public meaning of the free speech clauses in the Constitution.

 

      And so one of the places that we look, in addition to, as Judge Newsom points out, to our law clerks who can help us do this, is to the academy where there are people who are paid to do, among other things, legal research. And one of the things I have been most struck by in the years that I've been on our court is the divide between what courts do and what legal academics do.

 

      And I mean that in kind of two different ways. So I'm thinking about the legal academy generally. So this is not just folks who are in the academy and who are originalists and doing originalist things, but just the legal academy generally is often just has nothing to do whatsoever with what courts do. I think that's striking. I don't mean to suggest that academics should be focused exclusively on courts and the courts are somehow the most important thing in American law, far from it. But I do think it is kind of amazing, sometimes, when you pick up a prominent top 14 law review and it seems to have little or no bearing whatsoever on just law generally.

 

      Like Judge Jones, I'm the child of two doctors, and so when I was a kid and I was going through the mail or sitting at the kitchen table, there was often a copy of the Journal of the American Medical Association. And at least in the '80s, I was in kindergarten I guess when General Meese gave his speech.

 

[Laughter]

 

Hon. Edith Jones:  Thank you. Time for my afternoon nap.

 

[Laughter]

 

Hon. Andrew S. Oldham:  I didn't see a copy of that on the kitchen table, but we'd often see the Journal of the American Medical Association. And at last in the '80s when you would look at JAMA, it was about medicine. And I think at the end of the day, law reviews are the professional publication of our practice. And I'm just sort of struck by just generally what legal academics are doing.

 

      But then secondarily and perhaps more relevant to the audience and our topic for today, I'm often stuck by what originalist academics are doing. And it is so highly theoretical, in general -- there's lots of exceptions and I want to talk about at least a couple of those. But in general, a lot of the academic originalist discussion that we seem to be having, at least at the moment, is about good originalism, bad originalism, originalist methods, originalist theory that is what is the providence of originalism, what is the normative value of it, so kind of these big picture things. And I think that's probably really important, and I don't mean to suggest that it's not because if we won't have that debate then you could leave thinking that all you need to do is cite a case from CCD Pennsylvania in 1728 and you've won your originalist argument. So we need to talk a little bit about what it means to be an originalist, how to do originalism, sources and methods kind of originalism. That's important.

 

      But from what we do, by the time the case gets to us, what we really need to know is what is the original public meaning of the speech clause or the free speech clause in the First Amendment. Or what is the original public meaning of the nondelegation doctrine, or what did that mean at the founding, that kind of idea. And I don't pick the nondelegation doctrine at random. I was quite pleased to see that the Yale Law Journal published an article on that last year from Professor Wurman. And that's great because at least then you have an article that you can look at. And that doesn't mean it's right. It still needs to be tested in an adversarial, you know, way. There needs to be criticism of it, and we need to fight about whether -- that it gets the right answer. But at least it’s a starting point, and it's way more helpful to the project of trying to figure out a nondelegation case or whatever the thing is that's in front of us than just another article that's about theory or hypothesis of normative value that come from originalism.

 

Hon. John Nalbandian:  Great. Thank you, Judge Oldham.

 

[Applause]

 

Hon. John Nalbandian:  Judge Rao, and maybe you could tell us a little bit or talk a little bit about originalism, what you've noticed, the originalism and practitioner arguments on the D.C. Circuit.

 

Hon. Neomi Rao:  Sure. And I can maybe pick up from where Judge Oldham left off. I was an academic for a number of years, hopefully not guilty of some of the things you mentioned. But there is a tremendous gap between what academics are doing with respect to originalism and the kind of practical originalist questions we face when we have novel issues that come before us. And perhaps the D.C. Circuit does have its fair share of novel separation of powers issues. And so often times what we're looking for is a really practical kind of originalism. What is the meaning of a particular term or a particular clause? And often, when you look at the academic literature, there's not a lot of research about those issues.

 

      And so then there's a question, as an intermediate appellate court, how do you go about addressing a novel question that isn't well covered by Supreme Court or circuit precedent? And so I guess I can speak a little bit to some of the things that I've done when cases like that have come before me.

 

      I think a first step, and I think this is true for judges but also for advocates, is to really thoroughly canvas the existing case law. Because oftentimes a problem seems to be wholly novel, but there is more in the case law than perhaps one might appreciate just by looking at kind of the greatest hits, which is what judges and advocates often revert to. The common catch phrase is the opinions that everyone always looks at. They're often older cases, maybe separate writings or dissents from cases that are less well known, where maybe you will start to see certain aspects of a problem fleshed out by judges in the past.

 

      And I think one of the helpful things about doing a very thorough survey of the existing case law is that it allows a judge and an advocate perhaps when writing a brief to really precisely pinpoint what question is open. What exactly is the novel or open question here? And it might be somewhat different than it seems at first glanced. I think being armed with the full range of what's already out there is very helpful.

 

      And then hopefully the briefs, in a case that presents a novel question, will have some originalist research. Although often times because of time and resources, we don't see that much originalist briefing on the D.C. Circuit. I'm surprised by how few amicus briefs we have even in certain high profile and important cases, not necessarily calling for more amicus briefs. But sometimes I'm a little surprised that there isn't more amicus participation in some of the cases, some of the cases that I've seen.

 

      So then what's the next step? Oftentimes, really, I think you just have to as a judge roll up your sleeves and get into the meat of things. And as Judge Newsom said, this is often really difficult. Where you look; have you thoroughly canvased old cases, the Federalist Papers, other sources of meaning? I think we're lucky to live in a time when there are so many resources available online, so I think the online resources have improved tremendously. So you can get some good work done even in chambers with limited time and resources.

 

      But I've also seen, depending on the nature of the case, if it's a separation of powers issue, often times it's important to look to see what the political branches have done. What has their practice been on a particular issue? And in that vein, I think the practice of the political branches can't change the original meaning, but it might shed some light on what that original meaning is. And that research is often very difficult, going back and just reading debates in the congressional record, correspondence between Congress and the executive branch. There's a tremendous amount of material, and it is a very difficult path. So that's one way to go.

 

      I think also seeing Justice Thomas's originalist opinions, one of the things I think he does that is so important is to really look at the foundations of the law. We're not just looking at the words in abstract or maybe whatever sources or cases from Pennsylvania we can find from the 1700s. What's the political philosophy that informed the framers? What were they reading and thinking about? What were natural law ideas that informed their understanding of law? What common law concepts were they familiar with and thinking about? And so those deeper background principles, becoming informed about those and how they impact original meaning, that makes the enterprise I think that much more difficult.

 

      So it is a hard road. But I guess I'll say a few things. I think I also -- one other thing to consider is that many of these questions about separation of powers ultimately boil down to similar questions about what is the content of the legislative power? What is the content of the executive power and the judicial power? And these questions are all interrelated and intertwined, and so even when a case may seem novel, there might be analogies from other contexts that can be brought be bear on a novel question. And so there may be more thinking and reasoning out there than is immediately apparent. But maybe with that I'll stop here.

 

[Applause]

 

Hon. John Nalbandian:  Great. Thank you. Does anybody have any comments on what they've just heard? Judge Jones?

 

Hon. Edith Jones:  I agree with everything everyone said. But one thing I've found very useful in just generally preparing myself for the breadth of issues that come before us is -- I'm sorry, but this maybe a sad parody of that old saw about doing legislative history by looking over the crowd and picking out who you like. But I've found over the years that there are certain scholars, whose reputations for probity and whose general alignment with the traditional view of the law and the foundations of American society, are worth paying close attention to and delving in to. And so I list a few of those.

 

      One is Philip Hamburger whose written -- the breadth of his work is increasingly amazing. He's written definitive works on religious freedom in the United States, on what he called law and judicial duty on the administrative state. He's written on 503(c)(3). He's got another book out more recently.

 

      Another person I regard highly is Professor Ralph Rossum at Claremont, PhD in political science in the Straussian school, written very penetrating books about both Justice Thomas and Justice Scalia's jurisprudence.

 

      I like to read Randy Barnett. I may not always agree with Professor Barnett, but he's an accurate -- well, he's an accurate scholar, and he tells us things that are very important to know in an era in which control of our economy is very much up in the air right now.

 

      I love to read Richard Epstein on certain subjects. I look to publications from the Boyden Gray Center for Administrative Law. They had a seminar this year on the 75th anniversary of the Administrative Procedure Act. Well, we all know that's at the forefront of the Court's thinking, and they are getting into some historical aspects of that that are very interesting.

 

      And then not all originalism goes back to the 18th century. Some of it goes back only to the '60s and '70s. And we expect a great deal of ligation on voting, redistricting. A friend of mind named Abigail Thernstrom wrote a book long ago called Whose Votes Count, about the history of the implementation of the Voting Rights Act. So if as you watch current literature come out, you will find books -- in fact I've seen some of those books in a couple of the justices' libraries as well. So you look for the good books and read them when you can. And that all lends to your background to be able to deal with more challenging issues.

 

Hon. John Nalbandian:  Does anyone else have any suggestions on sources or things you look to or have found particularly helpful?

 

Hon. Kevin C. Newsom:  I guess I would just echo what Judge Oldham said, and I think he might have more specific suggestions even then I do. But you heard all of us say that this is hard to do. And in some ways, this is sort of a plea for help. It's a plea for help for two reasons. One, sort of at a theoretical level, we exist in an adversary system. And so we can only do so much appropriately, given the arguments that are put before us. I'm not suggesting, for instance, that we are sort of bound down to the specific cases that parties are citing to us. Of course we know that's not true. But there is -- we have a limited range of options, given the cases that you bring to us, what we can do with them. And so if you want courts to do originalism and do it well, then you need to sort of bring the arguments to us. We are by nature a passive instrument of government, and so we need the arguments brought to us.

 

      The second piece of that, not just if you want it done but if you want it done well, then we really need help, both from the lawyers in the audience and from the academics in the audience. Because even if I were footloose and fancy free to do whatever old thing I want in any case, to sort of swim down to the bottom of the sea on every question, I'm just not necessarily going to do it as well, even with this merry band of genius law clerks that I have who make me look better than I am. We're not going to do it as well as we would if the parties very robustly have brought the full sort of force of their argumentation to bear on the court.

 

      And so that's sort of like a background plea, but I think Judge Oldman might have even more specific suggestions for sort of source material and where you might get it.

 

Hon. Andrew S. Oldham:  Well, let me make two points or to pick up right where Judge Newsom left off. One of my favorite books that I've used for years that I have in paper -- although you don't need it in paper. It's on the internet -- is the Founders' Constitution by Lerner and Curland, which I think is incredibly helpful. It's organized by constitutional clause. So when you have a question about Article I Section 9 fill in the blank, you can just turn straight to that particular clause in the book, and it's got, whatever, 15, 20 depending on whatever clause is at issue, some number of sources. And it has excerpts from those with the citations, so you can figure out where to go find the full source. And I think it's incredibly helpful as a starting point.

 

      But I offer that with the second proposition, which is a huge caveat, and that is that I think one of the greatest hazards in originalismand there's no better time to talk about this than in a meeting like thisis to think that that is sufficient. I have realized over the yearsand I've given a series of talks about the Federalist Papers and the Antifederalist Papers for example, that, and I'm sure everyone -- I'm certainly guilty of this -- maybe none of you might be, but I certainly amwhere it's like you find something in a Federalist Paper and you think, oh, I'll just cite see also Federalist 51, as a sort of supportive citation for whatever it is that you are arguing. And there's a tendency to do that when all you know about a particular topic is what you just found in the Founders' Constitution in 10 minutes because you just found it on the internet or you happen to have one on your shelf and think that oh, I've now liquidated the meaning of this particular constitutional provision because I've got this really old citation for it.

     

      And in many ways, that is -- not only is it not good, it's affirmatively undermining the originalist proposition, right, which is that we're not looking for old citations. You can find those with relative ease on the internet. What we're looking for is the original public meaning of the clause. And that takes way more. And so I think we can offer -- there's all sorts of things. I'm sure everyone in this room would have a different favorite when it comes to sort of how to start an originalist question. But starting the originalist question, although important, it's just that. It's the start. It is not the answer. It is not the end. And I think getting all the way to the end and feeling confident that I've now actually figured out what self-incrimination meant in 1789 or 1792 is way harder.

 

Hon. John Nalbandian:  Judge Rao, anything on source?

 

Hon. Neomi Rao:  Sure. On sources. Right. I agree with what's been said. I do think there are some helpful online sources. I would also maybe just mention one other issue which is that oftentimes the constitutional issues, at least on my circuit, are not properly exhausted before the agency. And I have seen so many interesting issues and cases sort of not -- we can't reach them because they haven't been exhausted in the proper way before an agency, even though the constitutional challenge is important and interesting. So I think that is something. I think Judge Oldham mentioned that we see the cases as they come to us, and so it's very important for litigants from the very beginning to get the issues into a case whether it's before an agency or a district court that they want to litigate all the way through. I've just seen that in a number of contexts.

 

Hon. John Nalbandian:  Let me addI’ll just sort to use my prerogative herethere is a source guide from Jud Campbell at the University of Richmond and Will Baude, a source guide with sources on early constitutional dictionaries, papers. It's an article that gets updated on SSRN constantly, and they can point you in the right direction, at least the start. I have found it helpful. Again, it's -- originalism is a little bit scary because sometimes like Judge Oldham said, you're not sure you've gone down every road, and that's a worry. But anyway, that article I would recommend to those of you that are interested in a starting place at least.

 

Hon. Edith Jones:  Let me just add one thing, that is there is a lot of times where originalism informs what we are deciding even though, at least in my case out of intellectual modesty, I'm not going to write a tome about the 18th century, 19th century practices. So just if you do enough work to point us in the right direction, we can decide. You don't have to be Moses of originalism, and you can just point us in the right direction.

 

Hon. John Nalbandian:  What do you all do -- let's maybe drill down a little deeper -- if you have a case where you think there should be an originalist argument or originalism is implicated, let's say, but the parties are not really making the argument? Obviously we've got the party presentations principle. We all respect the adversarial system greatly. It's the way we get to the right answers I think. But what do you do? Do you ask for additional briefing? Have you gone back to parties with very specific questions? Can you give us more information?

 

      Perhaps the most famous example is in Brown v. Board, right, the Supreme Court went back and asked an originalist, an original intent question. Or are you all just inclined to use it as a starting point and then do you own digging?

 

Hon. Kevin C. Newsom:  I would reiterate what I said earlier. Both because of the adversarial system and party presentation and because frankly, like Judge Jones says, I’m not sure I have enough confidence in myself to sort of know where all the bodies are buried. I think I would rather have the help. So I think if it were me, I would, especially before writing originalism into a majority opinion that will become the holding of the court, I would rather hear from the parties to make sure a) that they've had their say, and b) that we've had the fullest possible airing of the issues in sort of an adversarial clash.

 

      Because I think, as Judge Oldham points out, originalism and historical analysis generally are not the same thing. They might look alike, but they're not the same thing and we're certainly not after finding -- what Judge Oldham was describing earlier -- finding the old 1720s era CCD case from Pennsylvania to put at the end of your sentence. That's an advocacy move. So when I was lawyer -- I always joke. Right before I was nominated, I had essentially become a pharma lawyer. I had an appellate and legal strategy practice. And by and large, the guys who were paying the bills were the pharma companies. And I knew in advance that the answer in my question, in my cases was that this common law cause of action is preempted by federal law. I know that. I know the common law cause of action was preempted. Now we just need to figure out how best to explain that the common law cause of action is preempted. And although that's not originalism, that is reasoning in reverse.

 

      And so I would find the magic citation to put at the end of the sentence in the same way that Judge Oldham was describing. If you're doing sort of faux originalism, then what you do is you figure out the answer in advance, and then you find the 1720s era CCD case from Pennsylvania. You stick it at the end of your sentence, and you say, "Look, I'm an originalist," and you feed it to the court. That's advocacy, which is fine, but that's not what we do. We're not advocates. You hope we're not advocates.

 

      So we need advocacy from both side and full soup to nuts advocacy from both sides, especially with respect to these originalism arguments. That just kind of requires an army to get these things right. To sort of go back to where I started, it's really, really hard to do this. And I guess you're never quite sure, 100 percent certain that you 've nailed it, but there are better and worse ways to go about this. And for my money, the better way to go about it is to get a much input as you possibly can.

 

      So certainly before I would write it into a majority opinion, I would want to hear from both sides. I guess the calculus is a little bit different if you're going to write something separate that's not going to bind the parties before you. But I think best practice is probably to get as much input as you can. I don't know if other people see it differently.

 

Hon. Andrew S. Oldham:  My preference is to often do them separately for that very reason, which is to say here's a constitutional provision I've now thought about with some effort and energy. Here's a good faith effort to try to figure out what this particular provision means, how this sits or doesn't sit particularly well with the current state of precedent, and the current upshot of that being, this doesn't really bind anybody. This is just my attempt to do it.

 

      And one of the reasons I think it's an important exercise is that, to go back to sort of the beginning of our conversation on the panel, is that I see all of this as part of a conversation. And it's a clause by clause conversation that is not a one-shot deal where we just do it one time in one case, but instead we are trying over time to come up with a more and more refined understanding of what a particular provision of the Constitution means.

 

      And so you can -- I don't think there's any harm in a certain degree of humility in saying I obviously don't have all the right answers. I don't know this is 100 percent correct, but I've spent a good faith amount of time and really tried to grapple with this, to look at cases on both sides, to look at arguments on both sides, and then to show your work. It's part of the whole -- my background is in science and math before I, to my parent's chagrin, moved off to law school. But one of the things you learn if you do hard science is that you show your work, right. You write out the proof. You explain how you got there. And if somebody has a problem with it, they can come in and say, "This is where you erred. This is where you went off the road, and you made a mistake." And then we can refine that in another case. I think it's way easier to do that in a separate writing. So I think it's partly on us to contribute to the conversation, but as I said before, it can't be just the judiciary trying to grapple with these originalist propositions.

 

Hon. John Nalbandian:  Let me ask you, so if I’m in a district court, obviously I know who my audience is. And if I'm in the Supreme Court, I know who my audience is. If I'm in a court of appeals, federal court of appeals, I don't really know beforehand, and in some courts of appeals with a lot of judges, you have no idea. What should advocates do about -- there may be some judges that are originalists. Maybe there are some judges who are not. Obviously, we've got a new administration. We've got a new crop of judges. Every four years that can change. What should an advocate do in terms of presenting non-originalist arguments. I'm assuming you play to win the game, as Herm Edwards said, but can you elaborate on that, any of you?

 

Hon. Edith Jones:  I think one way to look at it is read ACLU briefs, and ACLU briefs often act as if originalism never existed. So if you're on the other side of the ACLU, then you have to talk about originalism and make the other side respond. I was on a panel or listening to a panel recently where a prominent Supreme Court lawyer said that she had to hire Clarence Thomas clerks who could tell her about originalism whatever it is, so they could make those arguments whatever they are. So she didn't really -- they don't really care about it. And you're going to be on the other side, and you have to address -- and particularly in the district court, which has a lot of the power.

 

      We only get to appeal, hear the appeals of the side who loses. But we have a generation of new, extraordinarily competent district judges who are writing very wonderful opinions. And you want to make your arguments to those people or even to the other people so that if you lose you can appeal to our side. But you know, every advocate does whatever port is in a storm, but a convincing originalist argument will go a long way with many judges on the courts now.

 

Hon. Kevin C. Newsom:  Yeah. I guess I would just say I think that -- and this is not single-handedly the work of Justices Scalia and Thomas, but wow, have they advanced the conversation in a sort of a paradigm shifting way such that an entire generation of lawyers, my generation, thinks about the law in a certain way. And originalism, whether or not you're a thorough going originalist or textualist or not, you respect those modes of argumentation. And so I think it's quite unlikely that you're going to make a formalist, originalist/textualist argument, depending on the kind of case that you have before you, that's going to alienate many judges these days.

 

      Having said that, I do think that from an advocate's perspective, you owe it to your client to put all of your best foot forward. So whether you, personally, Joe Schmageggy, are a thorough going originalist, when you come to us, you've got to be loaded for bear, all of it. And so if you've got non-originalist arguments to make that serve your client's interest, then I think as a matter of ethical obligation to your client, you should be making those arguments.

 

      But that is not to say that you should be kicking your originalist arguments to the side. I just think it's pretty unlikely that you're going to alienate judges by making them. So I think you have to -- it's like a both/and. It's not an either/or; it's a both/and. That's my sense.

 

Hon. Andrew S. Oldham:  Let me throw out another hurdle we have to a lot of this. If we can take a step back even before lawyers and advocates making arguments in particular cases, I think another challenge is what about law schools and what are -- because I know we have a lot of law students in the audience and recent law graduates. One of the things I think is really interesting is the disconnect between the way courts consider constitutional questions these days and the way law schools teach them. And so especially if you're a recent law school graduate and you're confronting a constitutional question, maybe you either didn't serve as a law clerk or didn't serve as law clerk for a judge who thinks a lot about originalism and originalist questions, what do you do? How do you even start to make these arguments without the tools having been taught to you or gone through a class or some sort of sharpening iron process to figure out exactly how to do it?

 

      And I think that's a real challenge. I think it's -- I'm not really sure -- I was already sort of operating on the assumption that, as courts increasingly on asking originalist questions, as courts are increasingly writing originalist decisions or at least attempting in some way to do that, that the conversation would continue to evolve to the point where this would sort of percolate into the law school curriculums and would be taught in a way that we can have some evaluation of good originalism versus bad originalism versus half-hearted originalism or whatever. And I'm not sure that that debate is even going on such that then when we ask litigants to be able to do this in court rooms, I'm not sure how exactly how best to do that.

 

      So I guess it goes back to something that Judge Newsom said earlier which is that in many ways it's a plea for help because I think it really, really starts at the latest in law school. And as far as I can tell, that's an underserved need.

 

Hon. Neomi Rao:  Yeah. I think that's certainly true. I think it's certainly -- making originalist arguments, it seems to me that if you make a strong originalist arguments, there are essentially three ways that someone on the other side can respond. They can just say that originalism doesn't matter. It's a bad method. I think it's great that we've evolved to a place where you rarely see that as a response, either from advocates or judges. Most people agree that originalism matters at least to some extent.

 

      I think that the second answer you get is well, maybe that's the original meaning, but we have to go with precedent anyway, and that's what's important. So we don't care about the original meaning because we care about precedent. I think that's the second answer.

 

      And then really, the third answer, I think we see more and more frequently is if when you're presented with a strong originalist argument, if you disagree or you want to reach -- if a judge wants to reach a different outcome, then they have to go ahead and do their own originalist research to rebut the arguments that are made. And I think that is the most -- that's the most productive way that we can hopefully start to refine our answers about what the law means and what the original meaning of various clauses are.

 

      So I think continuing to make those arguments is one way to keep that dialogue going. Whether a judge ends up writing in a separate opinion a dissent or a concurrence, or maybe those arguments make it into a majority, I think it's very important for advocates to go ahead and make those even if they don't know who the panel might be because it poses a kind of challenge to, I guess, both to the judge and to the advocates on the other side.

 

Hon. Kevin C. Newsom:  Can I just pick up on one thing that Judge Oldham said accounting for the fact that there likely are a number of law students in the room. And I don't want to take for granted that all of the law students in the room are already died in the wool originalists. You may not be. Frankly, when I was a -- I didn't have a clue, when I was a first year law student, second year law student, really what originalism really meant. I think a lot of law students are more sophisticated today than I was then. It's a low bar [laughter]. But I didn't know.

      I mean people ask me a lot -- I'm often asked how did you come into your judicial philosophy. And the honest truth is I kind of backed into it because what happened to me is I got to Harvard. I'm dating myself, but I got to Harvard in 1994. And I wasn't sure at all how the law was supposed to be done. And I looked around and pretty quickly realized I think I know how it's not supposed to be done by basically sort of just like eh, you know, sort of how do I want this to come out. It's all just sort of what the judge ate for breakfast. The judge can do whatever he wants, can drive whatever result she wants. And I just thought, boy, maybe I'm naïve or boyscoutish or pollyannish or something, but I just don't think that's right.

      And so I kind of backed my way into this sort of, for lack of a better way to describe it, sort of formalist way of thinking about the law, believing that the law, as I said earlier, is an objective thing. That there's not necessarily in every case a right answer and a wrong answer, but there are better answers and worse answers. I actually believe that.

      And so I guess I would just say to the seekers, to the law student seekers in the room, don't be afraid of the fact that you don't yet quite know how this is supposed to be done, but be open to the idea that there is sort of objectivity in the law. And don't be cowed by law school culture into believing that it has to be a sort of result orientation in every case. I just don't think that's true. It was never true. It was not true for me as a law student. It was not true for me as a lawyer. And it's certainly not true in my experience as a judge.

 

      So I would just say to the law students in the room, maintain an open mind and be receptive to the idea that originalism and constitutional interpretation, textualism, and statutory interpretation may well be -- you may well find it to be the best and most proper way to go about it. I just wanted to do that before we got away from the student piece. That's my soapbox speech for the afternoon.

 

Hon. John Nalbandian:  Let me ask you this question, then, because I know that we've talked -- a few have you have alluded to the other side, kind of critics of originalism. And I think for the most part that is meant -- I'll just kind of use generalist terms here, but -- attacks from the left, obviously. We're seeing now some new theories, maybe from the right, common good constitutionalism, common good originalism. Do you all see those theories gaining traction? Do you think that they could impact the way that we decide cases?

 

[Laughter]

 

Hon. Edith Jones:  I thought we decided not to talk about that.

 

[Laughter]

 

Hon. John Nalbandian:  I thought Judge Oldham volunteered to give us his views.

 

Hon. Edith Jones:  Yeah. He likes to disagree with me.

 

Hon. Andrew S. Oldham:  That's not true.

 

[Laughter]

 

Hon. Andrew S. Oldham:  See I just did it. I just disagreed with you.

 

[Laughter]

 

Hon. Neomi Rao:  Disagreeing with Judge Jones is a dangerous place to be.

 

Hon. Andrew S. Oldham:  I don't do it often. I have not seen any discussion of this in cases so far. Obviously I follow a lot of the academic debate amongst originalists. And I think of this debate like I think of a lot of debates, which I think that debate is generally healthy. And the different ideas should clash, and we should have an open dialogue. And I think it's a good one to have. But I've not actually seen any form of these sort of different forms of originalism being argued in cases yet.

 

Hon. John Nalbandian:  Judge Rao?

 

Hon. Neomi Rao:  Okay. Well, I guess there -- and I'm not sure that there's just one thing that is common good constitutionalism, necessarily, from what I've read. But I understand some of the criticisms that are brought in the writings that are under the banner of common good constitutionalism. And I guess one of the ways, at least, I see those criticisms is against a kind of -- I don't know -- I want to call it maybe a thin form of textualism or originalism.

 

      And this goes back in some ways to what I was saying earlier is that if you're looking for original meaning, you can't do that divorced from the underlying foundations of the law. You can't really be thinking about original public meaning without having some sense of political philosophy and legal theory and the natural law, and traditional international law and the common law. And all of these things are part of the foundation of the soil in which our Constitution was written and enacted. So I think to the extent that some of these critics are pointing at that, at that sort of richer foundation, I think that is a useful way to think about originalism.

 

Hon. Edith Jones:  Well, I'll weigh in a little bit. I'm friends with proponents of both theories, one of who was Justice Scalia and one of whom was Hadley Arkes. And they spent years engaged in argument much deeper than I can even conceive in my mind, much less reproduce about the impact or the jurisprudential application of natural law. What I see it as -- of course none of us who have taken an Article III oath are going to say that we're going to look to the brooding omnipresence in the sky and decide a priori what's right in every case. That kind of argument that natural law means that you're departing from the Constitution and the written law is absurd. It is a grotesque mischaracterization. The principles of natural law are those that are written in the hearts of men from time immemorial which begins at least at Cicero and before then. So it is common sense founded on common reasoning.

 

      Let me give you two or three of the elemental principles of law that used to undergird the thinking of most people. Biology.

 

[Laughter and applause]

 

Hon. Edith Jones:   Retroactivity was viewed as abhorrent to the law, putting consequences on men after the fact. It is improper to take from A and give to B. That was, until a hundred years or so ago, viewed as an elemental principle of the law. Now where is that in the positive Constitution? It isn't there, but we all think about those kinds of factors when we make decisions. So all I would say about this is that it is a very dangerous enterprise at this point in our extremely tenuous constitutional structure and ability to sustain a constitutional structure to engage in the circular firing squad.

 

Hon. John Nalbandian:  Well said.

 

[Applause]

 

Hon. John Nalbandian:  Judge Newsom? No comments?

 

[Laughter]

 

Hon. Kevin C. Newsom:  Yeah. Well, I was with Judge Jones. I thought this was sort of off the table. I guess the only thing I would say is that -- and again, maybe this is more to the students than anybody else in the room. But we have a tendency to talk about the law in terms of the conservatives and the liberals. I get it that those are useful, or maybe sort like they're labels that make us sort of feel warm. But for my -- I always try to tell the students who I teach on the side as an adjunct that I think the far more interesting divide among judges is between formalists and pragmatists or formalists and functionalists or something like that. And it's not necessarily between political conservatives and political liberals. There may be some overlap.

     

      But sort of to the point that I at least began this with, I think if you're doing formalism, again which I take to encompass both originalism and textualism, I think if you're doing it right, look, sometimes the conservatives are going to love you. Sometimes they're going to hate you. Sometimes the libs are going to love you. Sometimes they're going to hate you. And that's exactly as it should be. It's just not my job. It's just not my job to drive results in individual cases. It's my job to swear an oath to the Constitution, find the best methodology that I can to implement that oath, and then the results are what they are. And if that makes me a conservative, then I guess I'm a conservative. If it makes me something else, then I guess I'm that something else.

 

      But I just sort of view this as almost like a category error to call people conservatives and liberals. I just think that it's a methodology, and the methodology, it's not mechanistic necessarily, but it produces the results that it produces. And sometimes those in this room may love those from me. Sometimes, I'm guessing you may not like them from me. But all I can do is I can swear to you that I'm doing my level best to implement the methodology that I have convinced myself is the right way to do this job. And if those results go sideways, we live in a democracy and sort of convince those in the political branches to correct my errors.

 

      And so I just want to be careful about us sort of getting into sloppy thinking about this being just sort of -- I don't think that formalism is in the law is like sort of, should be or really is political conservatism masquerading under some other banner. I think they're just different things. They're just different things. And I hope that doesn't make me a sort of again, sort of Pollyanna, but I actually believe that. For better or for worse, I actually believe that, and I try to do it every day. So that's all I would say about it.

 

[Applause]

 

Hon. John Nalbandian:  Do you think -- so we talk about originalism as a method. Is it positive law now? In other words, or can a method be precedential? Is there methodological precedent or is originalism always going to be kind of fighting in the arena with other methods?

 

Hon. Edith Jones:  I think have to recognize that for the entirety of my existence on earth, the idea of traditionalism versus what we now call progressivism has been represented political and cultural clashes. I do not see that abating short of a national disaster. And so in the large societal sense, we are Manichean in that way. Some people contend that that's inherent in liberal democracy. Others might contend that that is inherent in a society which is losing faith in God.

 

      But if you just want to put it on the day-to-day basis, who's going to argue a Second Amendment case today without arguing originalism? It ain't gonna happen because the Supreme Court set the proper tone for that. At some point, there may be a basis for a serious reconsideration of the Commerce Clause. I'm telling you, we're entering an era in which there's very great challenge to the economy. Are we going to start looking at prisoner -- excuse me -- criminal procedure standards in a different way based on originalist concepts which are pretty far divorced from the Fourth and the Fifth Amendment as we now know them? I sort of doubt it, but I suppose anything is possible.

 

      I am interested in what one of -- I think Andy mentioned just in passing yesterday. Are we about to do away with tiers of review? Because I don't think the common law understood tiers of review. And I thought that loosey goosey and meaningless as they are, they're embedded in First Amendment law, but maybe Andy has some methodological way to get around that.

 

[Laughter]

 

Hon. Andrew S. Oldham.  I will just say -- let me answer it this way. I do think it is interesting that we have very different precedential approaches to different constitutional provisions. So I do think it's interesting, as Judge Jones points out, you can read both opinions in Heller and you can come away with the conclusion that whatever the right answer is between Justice Scalia and Justice Stevens that we're all originalists now, as many have said. But you could read, from the same October term of the Supreme Court, a First Amendment case about time, place, and manner restrictions if there were such a case that term, and you'd have a very different view about the First Amendment, even though they're obviously part of the same Bill of Rights and adopted by the same people. Tiers of scrutiny apply in one, and there's the more history and tradition that applies in the other. So I do think that's interesting.

 

      So to the original question prompt about whether originalism is part of positive law. Is there precedent that compels this approach? I just think one fascinating thing and a real challenge for the inferior courts of the United States is that it depends on the clause. It's all the same Constitution obviously, but in some clauses the approach is dictated and in others it's not.

 

Hon. Neomi Rao:  I guess I might answer the question a little bit different way. I think the question that may be more hotly disputed is whether the Constitution is a positive law. And so there's a lot of ongoing debate about whether the Constitution itself is a positive law. I think the Constitution is a positive law, absolutely. And so then I think -- and I think that the best way to interpret the Constitution is by looking to the original public meaning. So to me, I'm not sure that the methodology has to be part of the positive law, but I think the prior question is the most important. Is the Constitution itself a positive law? And I think it is.

 

Hon. John Nalbandian:  I think we should open it up to audience questions. I don't know -- we've got some microphones.

 

Hon. Edith Jones:  Circular firing squad.

 

[Laughter]

 

Questioner 1:  Everyone's here now. I'd like to -- does this work? I'd like to rise to Edith's cue, but just offer reflections for my friends on the panel. Lyman Trumbull assured his colleagues up and down that nothing in this new Fourteenth Amendment was going to challenge those laws in Illinois as well as Virginia that barred marriage across racial lines. And he knew that if he couldn't give that assurance, that Fourteenth Amendment didn't have a ghost of a chance of passing.

 

      So I put the question once to one of our friends that's on the Supreme Court, "Does that mean you should not have done Loving v. Virginia?" He said, "Well, I have to think about it." But you know darn well, they'd not go back and redo Loving v. Virginia. What we say now is that Trumbull didn't understand the real depth of his principles. Not all of us see all the implications rising at any time from all of our principles. That's the way life is. Now we think we could give an account of that principle that had something to do with the fact that we can't draw moral inferences about people, about their worth. So race determined their quality.

 

      Well, that wasn't explained by Lyman Trumbull, nor was it explained by William Graham Sumner. So just as we don't take Lyman Trumbull the fact that he said it. It's an old thing. We don't accept that as determining the law. The problem is that it's not settled either when we point to say that -- Mike McConnell points out that William Graham Sumner did think the Fourteenth Amendment was at odds with racial segregation.

 

Hon. John Nalbandian:  Is there -- do we have a question?

 

Questioner 1:  Yeah. No.

 

[Laughter]

 

Questioner 1:  I would offer this reflection. It's a version of the Euthyphro. Is it old because it is good, or we've made it old because we think there's something resoundingly good about it? Some of us study Hamilton and Marshall because they trace their justements back to those anchoring principles that were there before the Constitution and promise to be true even now. So my point is, saying it's old does not exactly settle the case.

 

Hon. John Nalbandian:  Any response?

 

[Laughter]

 

Eric (sp):  Hi. My name's Eric. I'm a student at Georgetown Law. I wanted to pick up on something that Judge Rao had mentioned about concurrences. When Supreme Court precedent conflicts with original meaning, do you all think that using dicta or concurrences is an effective way to advance originalism within the constraints that you have as a lower court judge?

 

Hon. Kevin C. Newsom:  I mean I guess I can just say this from sort of personal experience. I mentioned very briefly, and we don't have the time or the energy, I think, to swim all the way down into this standing issue that I've raised. But this concurring opinion, this 57-page concurring opinion that I wrote just sort of unburdening about Article III standing, I recognized both before I wrote, it in a case called Spokeo v. Robins, and since I wrote it, in a case called TransUnion v. Ramirez, the Supreme Court has said in effect, "Newsom, you're wrong." And so but is that reason not to do it? I actually just don't think it is for the reasons that Judge Oldham suggested.

 

      Again, sort of right or wrong, I'm not trying to necessarily to suggest that I've figured this out and everybody else is wrong. It's like I've thought about this for a long time, and I've tried my best to try to reason my way through it from an originalist perspective, and I think this is a better way to think about it. And that is not the end of the conversation. It's the beginning of the conversation. As Nick Saban said when he won his first national championship, "This is not the end. This is the beginning."

 

Audience Member:  Roll Tide.

 

Hon. Kevin C. Newsom:  Roll Tide. [Laughter] So I mean it's part of -- you would hope that it's part of an organic conversation. So I think in answer to the question from me anyway, the answer is it's a perfectly passable thing to do, and maybe it gains adherence in five years. Maybe it gains adherence in 20 years. Maybe it never gains adherence but not for the want of trying.

 

Hon. Edith Jones:  Judge Ho wrote a concurrence in a little case that's up before the Supreme Court called Dobbs and suggested that Roe v. Wade should be overruled, so yeah, of course they have an effect when the time is right.

 

Hon. John Nalbandian:  How about way in the back?

 

Questioner 3:  Okay. I have a question about Rodriguez de Quijas and Bosse. So the subjection gets made to originalism. The Supreme Court doesn't have enough time. Well, the lower court judges have some time on their hands. And rather than having concurrences that are sort of cert petitions or draft cert petitions, the Court could go back to the rule that they followed in cases like West Virginia School Board v. Barnette. So West Virginia lost the case at the trial court that disagree basically with Gobitis, and the Court didn't say anything about well lower courts have to follow our holding. So what do you think about the advisability of reconsidering Rodriguez de Quijas or Bosse about lower courts just straight up having the power to say hey, Supreme Court you got it wrong in this earlier case. We think you would overrule this. What do you think about that?

 

Hon. Edith Jones:  That's a real easy answer. If you want us to do that, do you want people who don’t believe in originalism to do that? We're in a hierarchical system. That would destroy what stability we have in the rule of law.

 

[Applause]

 

Hon. John Nalbandian:  How about up here?

 

David McDonald:  Hello. David McDonald from Mountain States Legal Foundation. I've found corpus linguistics to be interesting. It's like a promising tool in the originalist toolbox, but I've been afraid to use it in advocacy because I'm not sure how judges will feel about it. So I'm curious what the panel thinks about corpus linguistics and originalism?

 

Hon. Andrew S. Oldham:  I'll say I share the reservation, largely from at least my perceived ignorance about how best to do it. One of the things I think is a real challenge when it comes to any of these things is I think it's very tempting to find corpus linguistics sites or whatever. You run your search. You find some things you like, and you use it, and you point to corpus linguistics as inherently supporting your argument. And I think it just makes me nervous without feeling well-trained in it and understanding is provenance, known that the Supreme Court -- as Judge Jones pointed out, we are in a system of a vertical hierarchy. And so branching out to use new tools, especially in majority opinions, is difficult. But I think also in a concurring opinion where you're just speaking for yourself, I think it's really important to feel like you've made a really good faith effort to understand something.

 

      And so I'm not sure that corpus linguistics has gotten to the place now where there's enough -- at least on the benchwhich is sort of the perspective we're supposed to be offering hereenough practitioners of it to be to the same place that we are with some of these other tools and other methods that we use for originalist inquiry. But that's just speaking for me. I'm sure that there are many members of the federal judiciary who would say absolutely, "Make your argument, and we'll evaluate it the same way we would any other originalist argument."

 

Hon. John Nalbandian:  Thank you. In the way back again.

 

Duane Horning:  Good afternoon. My name is Duane Horning. I'm in private practice in San Diego, California. When I hear about the formulaic or textual and originalist method and how one should start at the beginning and just work it through and it leads where it leads without having a predetermined outcome, I greatly respect and admire that process. But it brings to mind the old law versus equity division and the Chancery courts and of course now today, we have unified courts.

 

      So my question is when the court is doing an originalist or textualist analysis, is there ever a place, maybe after getting to the end, to take a step back, now wearing the hat of equity, and evaluate is this getting to the right and just result? And if there is a place for that, then is that an opportunity for equity to swallow the rule and get us right back to whatever the judge thinks is right kind of a problem? Or how does that interplay work?

 

Hon. Kevin C. Newsom:  All right. I'll give it a shot. I think, for better or worse, my answer to your fundamental question, is there room to take a step back and say is this the just result, is no. I hope that doesn't make me a bad person.

 

      But I teach this jurisprudence class on the side, I've got one of my students in the audience. And we talked about formalism and realism a couple of weeks ago. And I said and I believe that if you believe in the separation of powers, if you believe that we fundamentally live in a democracy and you believe in the separation of powers, then the judge's jobagain, I hope this doesn't make me a bad personisn't to drive just results in individual cases. It's to decide the case as best he or she can according to the law written on the page, and then let the chips fall where they may. And if it's crazy enough, then you hope that the political branches will step in to do what they should do which is to create a just society. I hope that's not too simple-minded, but that's my fundamental view of what my role is. I don't know if others have different views about that.

 

Hon. John Nalbandian:   Hearing none, I'll take that as acclamation.

 

[Applause and laughter]

 

Lorianne Updike Toler:  Thanks. Lorianne Updike Toler. I teach First Amendment law in Boston, and I do teach an originalism section. And you spoke of resources. I have a long drummed the drum about practical resources for originalism and helped to start the Constitutional Resources Project or ConSource, if you're looking for something with a constitutional index that links to sources, you can find it there. But I wanted to ask two questions, if I may. One is if historical amici were presented to your courts that were in favor of neither party and really dug into the history in a helpful, practical way, would that be welcomed by you?

 

Hon. Kevin C. Newsom:  I would pay.

 

Hon. Neomi Rao:  That would be incredibly helpful for a lot of these cases. Yes.

 

Lorianne Updike Toler:  Okay. I'm hoping to start a constitutional history clinic. I'm sorry.

 

Hon. Andrew S.  Oldham:  I was going to say it absolutely would be helpful, but I would say the most helpful thing is I'm grateful for the pedagogy. I think teaching students to ask these questions and teaching them how to do at least some preliminary inquiry into originalism in incredibly helpful, so my gratitude for that. But obviously yes, I think the amici briefs are helpful too.

 

Lorianne Updike Toler:  Thank you. Second question. I've done an empirical analysis of the Court's use of  constitutional convention over time, and those Justices that I looked at without jurisprudential theories, like originalism or -- Brian Brennen and Fay are also included here -- showed statistically significant deviations from expected political outcomes, meaning that the greater use of history produced constraining results. They deviated politically. We don't see any deviation for Thomas, none, although he uses history to a great extent and primary sources specifically. But for the originalist justices that we looked at, there was not significant deviation. And what I hear Judge Newsom and others saying is if this is a method that has bite, that we're committed to, there should be more significant deviation. How do we encourage that type of jurisprudential approach on the Court, if we're seriously committed to originalism?

 

Hon. Neomi Rao:  I'm sorry. What is the deviation -- what are you measuring the deviation from precisely?

 

Lorianne Updike Toler:  Expected political outcomes. There's a Martin-Quinn score of expected political outcome, political decisions by the justices. It goes back to 1935.

 

Hon. Edith Jones:  Why don't you tell us what our scores are, and then we'll [inaudible 01:34:26] --

 

[Laughter and applause]

 

Lorianne Updike Toler:  I'm going to plead the Fifth.

 

[Laughter]

 

Hon. Kevin C. Newsom:  So I would just say one thing briefly. So there's a different kind of deviation, which is deviation from the method. I think we can all -- you can all think, probably, of deviations from the method. Like so for instance, Judge Jones brought up the Commerce Clause. Maybe this is personal to me because when I was Alabama's SG, I was involved in a case at the Supreme Court that ultimately was called Gonzales v. Raich, the medical marijuana case. And I filed a brief on what I called the pot side of the case saying basically that California's got this goofy law, and if California wants to have a goofy law, that's the reason we live in a federalist system. And long story short, so we lost. Our side lost And Justice Scalia was on what I'll call the other side. He was on the other side of the case.

 

      But I think -- and I've said this to law students and young lawyers before -- what's beautiful about that -- and so to me I can sort of look at that and think anyway that that was a deviation from method. From Justice Scalia, the champion of this, to me that sort of feels like a deviation from method. But what makes this so great to me and what I find frankly kind of inspiring is that those deviations are so few and far between that you can point them out. Like I can say to this sophisticated group of people, Gonzales v. Raich was a deviation in method, and some of you, I hope at least some of you are like, yeah, it kind of was. But you'd have to rack your brains to think about the next one.

 

      And isn't that great that we are living in this period of constitutional dialogue that originalism has taken hold, at least to an extent, that among our heroes, we can count the deviations on a single hand. That's pretty great. It's pretty great. So instead of complaining about those deviations, I think we should celebrate the fact that they're so few and far between.

 

Hon. Andrew S. Oldham:  Can I add one point which is that I -- so obviously, I don't know anything about this index and how things are scored one way or the other. But one thing I have found frustrating every time I have peered over the wall to look at in the academy about the way some of these empirical studies are done is I don't understand how you can assign scores to one side or another with respect to a lot of the constitutional questions that we get.

 

      So for example, a lot of the constitutional questions that we see, anyway, in the court of appeals are under the Fourth, Fifth, and Sixth Amendments. And so I'm not really sure what Justice Scalia famed champion of Crawford and the Confrontation Clause and had originalist arguments that in his mind convinced him of his understanding of what the Confrontation Clause meant and what it means to confront witnesses against you, how does that score on some index? And if so, how and why and what would be sort of an expected outcome with respect to an understanding of a warrantless search in a Fourth Amendment? I'm just not sure I understand the project in doing it.

 

      And I think that captures a large swatch of the constitutional litigation that we see in federal courts is not the stuff that folks are often talking about under the Second Amendment or the Fourteenth Amendment.

 

Hon. John Nalbandian:  I think we're in the back.

 

Questioner 7:  Hi. Thank you for the panel. I found the discussion very interesting. This question's primarily for Judge Rao, but feel free, anyone can respond. Judge Rao, you mentioned in your remarks thatI'm paraphrasingbut you come across a case, and there is an originalist dimension to it, and the originalism answer is not obvious. So you would look to the case law, which would seem you might find a lot of wisdom there but maybe not. So I wonder -- math people talk about the order of operation. If you look to the case law first, do you run the risk of sort ofI don't knowpolluting or contaminating your thinking if you'd taken a look at it without the benefit of someone's history or the case law, which again, might not have a lot of wisdom. Is there a concern about that?

 

Hon. Neomi Rao:  Well, I think as a intermediate appellate court, we have to be mindful of the precedent from the Supreme Court and our respective circuits. And so my comments were really designed to say that often there's more in the case law than maybe is immediately apparent, and people don't often go back and carefully read the cases. So you might find something there. But if you don't, but at least you'll have a sense of what are the questions that are not answered by the cases. Where are the gaps? Where is the true issue of first impression?

      And so I don't think looking at the cases necessarily skews that perspective because I think it just helps you to identify the question. And then once you've identified the question, you can go back and look at the historical sources to try to answer that question.

 

Questioner 7:  Okay. Thank you.

 

Hon. John Nalbandian:  Let's take a couple more. Right here.

 

Michael Isaac:  Thank you. Michael Isaac from Tampa, Florida. Federal 78 tells us that the judicial branch is the weakest of the three branches. Its power is to be limited to that of judgement. And Judge Rao, you made a very interesting comment in your original statement about the separation of powers. And in previous discussions I've heard on originalism, what ordinarily goes nondiscussed or undiscussed in great detail is how protecting the separation of powers and judicial restraint plays an integral part in originalism. So I'm interested to hear perhaps if you could explore that to a little bit greater extent. And from a pragmatic point of view Bostick is probably the perfect example of how a decision was presented as textualistic, but in reality they stepped into the shoes of legislators and gave the petitioner relief that they couldn't get from the Congress.

 

Hon. Neomi Rao:  So I guess I'm not -- can you just repeat your question? I'm sorry.

 

Michael Isaac:  Well, you had talked about separation of powers as part of originalism. And what typically goes -- you don't hear a lot of discussions about how the nuance of protecting separation of powers and judicial restraint plays into originalism. So I'm just hoping that you can expound on that a little bit.

 

Hon. Neomi Rao:  Sure. Right. I think one of the things that interesting of every separation of powers question also, even if it's not directly this way, involves a question about what is the proper scope of the judicial power in answering that separation of powers question. And so I take your point that there's often a question about the role that the judge should play in a particular case, especially in disputes between the political branches. So I do think that's a very important aspect of every separation of powers case.

 

      And then there are questions about what's the original understanding of the judicial power? How far does it reach? What is a proper case or controversy? And I think that's inherent in all of these, these hard cases about separation of powers.

 

Hon. Kevin C. Newson:  Can I say just one thing about that briefly. So I think the difficulty of unhinged, amethodological, judicial supremacy is that it's just totally corrosive of the political process and civic engagement more generally. If, as a society, we have come to believe that the federal courts exist to right every wrongyou're going to see this is kind of a soapbox issue of mine. But if we've come to believe that the federal courts exist to right every social wrong, thenas I think is descriptively accuratethe political branches have fallen asleep, and people frankly have fallen sleep because, they assume, when it really hits the fan, the federal courts will rescue us from ourselves.

 

      And I just think wouldn't it be better if the federal courts tied themselves to the mast of some methodologyI'll take originalism, textualism, formalism more generally—but  bind yourself to that mast and then force the political branches and the people to reengage. That just seems like a monumentally better government to me than the one that we're currently sort of toiling under.

 

      And it's cyclical, right? It's this vicious cycle. The courts chomp of more and more and more, and so the political branches fall deeper and deeper into a slumber, and so do the people. And so the courts have to pick up the slack because the political branches aren't doing anything. And wouldn't it be better if somebody sort of cut the cord and said we're not doing this anymore. And there would be some growing pains, but the political branches and the people would have to reengage in a way that I think they frankly aren't right now.

 

[Applause]

 

Michael Isaac:  And that was the point I was trying to make. The byproduct of what's happening when the courts don’t engage in appropriate judicial restraint is we are now viewed by the general public in the same eyes as the political ideology. And so every time the Court comes out with a decision, it's never because it's the process. And as you talked about, the process took us from point A to point Z. It's politically motivated. And so that was the whole point of what I was trying to get at.

 

Hon. Edith Jones:  Let me press Judge Newsom's point a little bit farther because first of all, we're looking for nirvana, I'm afraid, in suggesting that the impetus of the judiciary is at some point going to reach a state of perfect originalism such that courts are in their rightful place. We're the most litigious society in history. And 20 years ago, it seemed to me that we had finally reached the point of equilibrium about the time of the Glucksberg case when Justice Rehnquist has a commanding majority of the Court on assisted suicide saying we're not going to mess around with substantive due process anymore. And then only a couple years later, Lawrence happened and some new rules in the death penalty. What I'm saying is the there is an impetus toward using the judiciary for purposes that it is not best suited to serve. And if it's not substantive due process, it's going to be something else.

     

      And the other point I'd make is that another consequence of this is that the people who don't care how the judiciary is going to come out find that it is a very worthwhile game to play. And therefore, it is not just in the process of enforcing the law that they exploit what has been done to expand the role of the judiciary before. It is the process is the punishment for many people, and that is another way in which the system gets completely warped, and many people don't even realize what's going on.

 

Michael Isaac:  Thank you.

 

Hon. John Nalbandian:  I think with that we will thank our panel for their presentations today.

 

[Applause]

 

Hon. John Nalbandian:  And thank you all for attending.

 

5:00 p.m. - 5:45 p.m.
20th Annual Barbara K. Olson Memorial Lecture

2021 National Lawyers Convention

Topics: Constitution
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?".

On September 11, 2001, at the age of 45 and at the height of her professional and personal life, Barbara K. Olson was murdered in the terrorist attacks against the United States as a passenger on the hijacked American Airlines flight that was flown into the Pentagon. The Federalist Society believes that it is most fitting to dedicate an annual lecture on limited government and the spirit of freedom to the memory of Barbara Olson. She had a deep commitment to the rule of law and understood well the relationship between respecting limits on government power and the preservation of freedom. And, significantly, Barbara Olson was an individual who never took freedom for granted in her own life, even in her final terrifying moments-her inspiring and energetic human spirit is a testament to what one can achieve in a world that places a premium on human freedom. Solicitor General Theodore B. Olson delivered the first lecture in November 2001. The lecture series continued in following years with other notable individuals.

Featuring:

  • Hon. Theodore B. Olson, Partner, Gibson Dunn

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5:45 p.m. - 7:30 p.m.
Barbara K. Olson Memorial Reception

2021 National Lawyers Convention

East and State Rooms
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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Event Transcript

Eugene B. Meyer:  Good afternoon. I want to welcome you all to the 20th Annual Barbara Olson Memorial Lecture. I am Eugene Meyer, President of The Society.

 

This memorial lecture series started, as many of you know, shortly after 9/11, and Ted Olson’s inaugural lecture reminded us of what it means to be an American and how our legal tradition is part of our identity as Americans. That reminder only gets more important every year. We want the lecture series to remind lawyers of it, so they foster legal principles that advance individual freedom, personal responsibility, and the rule of law.

 

And I do -- with this being the 20th anniversary, I want to give the other lecturers who’ve included: Justice Scalia, Chief Justice Roberts, Vice President Cheney, Judges Ken Starr, Robert Bork, Ray Randolph, Edith Jones, Doug Ginsburg, Dennis Jacobs, Jeff Sutton, and then Judge, now Justice, Neil Gorsuch, former Attorney Generals Bill Barr, and Michael Mukasey, former White House Counsel Don McGahn, Peter Thiel, John Allison, and Senators Tom Cotton, and Ben Sasse -- quite a group.

 

Anyway, that brings us to today’s lecturer, which could not be more appropriate. This series has been remarkably successful for 20 years. And for years before that, Ted and Barbara hosted a summer bar-b-que at their beautiful house for our student chapter presidents, which drew hundreds of prominent attorneys in addition to those students and helped encourage those chapter presidents to build our chapters, and through that, build The Society and encourage many more to be involved. I’m sure some of those chapter presidents are probably in the audience today.

 

Then there’s also Ted’s strong and consistent defense of free speech, including repeatedly explaining to reporters who are doing national stories on The Federalist Society that The Federalist Society—unlike, say, the American Bar Association—never told Ted what to think.

 

[Laughter]

 

I could give you a lot of Ted’s bio, but I think what we want to do is hear from Ted. I simply want to say you’ve done a great deal for us, Ted. And having this lecture in Barbara’s honor has been a highlight. We are so honored to have you deliver the 20th Annual Barbara Olson Lecture. Ted.

 

Hon. Ted Olson:  Thank you. Thank you. So long as you keep that up, it’ll be that much longer before the cocktail party.

 

[Laughter]

 

Well, it’s a great, great privilege to be a part of The Federalist Society and to be participating in the Barbara Olson traditional lecture.

 

On a clear and sunny September 11, 20 years ago, the world we had been living crumbled, and time seemed to come to a stop. Unlike December 7, 1941, when the full force of Japan’s Air Force launched a surprise attack on a far away Navy base, this time, a mere 19 individual zealots armed with hate and with little more than box cutters, executed a massive, coordinated, and crippling attack on our people, our government, and our institutions. They exploded, highjacked commercial airliners packed with civilian passengers into America’s commercial base in New York City and the nerve center of our defense establishment at the Pentagon a few miles from here.

 

Had it not been for the towering heroics of a few brave passengers, one of their highjacked planes would likely have hit the Capitol and killed hundreds of members of Congress. Thousands of individuals on those flights and occupying those structures were murdered, maimed, and horribly burned that day. New York’s commercial center and the command center of our national defense were reduced in a single morning to smoking rubble. Wrenched abruptly from our complacent, comfortable bubbles, we came face to face that day with a vulnerable, fragile, and defenseless future – not from an attack by a warring nation, but from a tiny collection of determined fanatics.

 

The gut-punch reality was hard to accept, but we had to. The world was populated by thousands more like them, similarly motivated and equally capable of horrible devastations with nothing to lose. One of our own, Federalist Barbara Bracher Olson, was one of the victims that day as she headed for Los Angeles on American Airlines Flight 77.

 

Terrorists could not have selected a more quintessential American victim. She was a Texan Catholic who had put herself through a predominantly Jewish law school in the heart of New York City. She’d declined a lucrative job at a prominent New York law firm to come to Washington in order to fulfill her long-standing ambition to be at the center of the nation’s political world. The Federalist Society was a dream come true for Barbara. She loved the rough and tumble of robust debate bursting with ideas, energy, passion, and enthusiasm. She persuaded the Dean of her persuasively liberal law school to allow her to form the first Federalist Society Chapter at Cardozo Law School.

 

And immediately after law school, she thrust herself into Washington life becoming, in rapid succession, a lawyer in private practice, an Assistant United States Attorney, a top congressional investigator, Deputy Solicitor General of the House of Representatives, General Counsel for the Senate whip, author of two best-selling books about the Clintons – not favorable, I must say [Laughter], and a regular and remarkably successful political and legal commentator on national television.

 

Barbara saw, in The Federalist Society, a reflection of herself. She was a passionate believer in individual liberty, private enterprise, and limited government. She had an insatiable appetite for ideas, debate, and intellectual jousting. Barbara enjoyed mixing it up on virtually any subject, and she was very, very good at it. She was outspoken, articulate, and, it must be said, brash. She could, and would, take on anyone, in any venue, on any issue with little or no advanced notice. She was quick and had a rapier-like wit. I told her once that some people thought she was opinionated.

 

[Laughter]

 

She thought that was a great compliment.

 

[Laughter]

 

Of course, she had opinions. She had very little time for anyone who didn’t have opinions. But she debated with passion, not anger, never mean-spirited or unkind. She delivered her thrust with a flip of her long blonde hair and a mischievous and contagiously radiant smile. Her adversaries liked and respected her but feared her at the same time. Barbara was a fighter until the very moment when the terrorists extinguished her life. She somehow managed to reach out to me by phone from her doomed flight as it was being highjacked. Knowing, because I told her—I had to—that two other highjacked planes had been flown into the World Trade Center Towers in New York, she sought, in those last moments, advice as to how she could save herself and her fellow passengers. Had she been on that plane in Pennsylvania, I believe with all my heart that she would have joined those brave souls who gave their lives to take that plane down, rather than letting it continue to fly into the heart of Washington.

 

Barbara loved being a part of The Federalist Society: the debates, the people, your energy, your principles, and of course, your convictions. You populated and enlivened the world of ideas and placed your opinions, arguments, and contentions on the line.

 

As Gene said, Barbara co-hosted with me summer gatherings of student Federalists in our backyards every year. Indeed, the concept was originally her idea. We started in 1990 or ’91 with a few summer students, Washington lawyers, and a few judges. She sought to create networks and mentorships for young Federalists. I think our first event involved something like 30 people. By the time Barbara was murdered, the crowds had come to exceed 500 in our backyard, and it kept growing and growing until Gene finally put a stop to that and moved the venue to a more commonplace like the Supreme Court. [Laugther]

 

And in those backyard events for these young students—included lawyers and judges and people from Washington—luminaries such as Robert Bork, Clarence Thomas, Nino Scalia, David Sentelle, Larry Silverman, Dick Leon, Steve Williams, Doug Ginsburg, Danny Boggs, Spence Abraham, Sam Alito, Chuck Cooper, Paul Clement, Boyden Gray, Lee Liberman Otis, Ray Randolph, Lillian BeVier – the list goes on and on. I had to stop. But I cannot forget the thrill in your young faces when you came face to face with Bob Bork or Clarence Thomas or Nino Scalia.

 

To this day, I encounter lawyers from all over the country, including members of Congress, members of the cabinet, cabinet secretaries, high-level public officials, prominent lawyers who attended those summer parties as young students. They can’t wait to tell me what an inspiration that afternoon was for them. Many of you are here tonight. This is just a part of Barbara’s legacy.

 

This speech is called the Barbara K. Olson Memorial Lecture. Although I never really cared for that term "lecture"—it sounds too much like a colonoscopy [Laughter] or any recent speech by President Biden [Laughter]—so I prefer to think of this as a remembrance. So in preparing for this evening, I thought I might try to channel Barbara and what she might think and say about the state of politics and society in America today had her life not been so brutally ended on September 11. I have no doubt that she would have had a lot to say to us, so I will try to limit these imaginary insights to just four subjects.

 

First, America’s stature and standing in the world and in the hearts of its people. Barbara, like her fellow Texans, loved this country and was proud to be an American. She believed in an America that stood tall, was respected by its citizens, allies, and other nations, feared by its enemies, abided by its commitments, and protected the lives and rights of its people. The America that gave birth to the individuals about whom Tom Brokaw coined the term “the greatest generation.”

 

After 9/11, America came together and demonstrated its unity in resolve and resilience. We proved to one another and to the world that we could not be defeated by terrorism, however horrific and devastating the attack might be. President Bush and Vice President Cheney joined in inspiring the American people to rebuild our transportation industry, our economy, our defenses, and our united spirit. We mobilized our forces to attack Al-Qaeda and the Taliban. We vowed never to forget and never to forgive the brutal savages that sheltered terrorists, spawned terrorism, enslaved and debased their own people—particularly women—and wantonly took the lives and futures of thousands of Americans. Barbara would have been proud of what we as a country accomplished, particularly in Afghanistan, in isolating and punishing the Taliban.

 

She was a fierce advocate for the rights of the oppressed and disadvantaged, helping to form, among other things, the Independent Women’s Forum to assist and advance the voices of conservative women in this country so that in future controversies, there would be a conservative voice when liberal women came forward to claim to speak for all the women in America. And even as a fledgling attorney, when lawyers of the State Department and the Justice Department were reluctant to do it, she volunteered to go to New York, and by herself, serve papers on the Palestinian Liberation Organization, expelling that terrorist organization from the United States. She was thrilled to do that.

 

[Laughter]

 

Everybody said, “Are you okay? Is it going to be alright? Aren’t you afraid?” No.

 

So I could only imagine what Barbara would have thought if she had been here to witness the reckless, precipitous, and panicked withdrawal of our troops and personnel from Afghanistan this summer, abandoning its people, particularly its women, to the oppression of the Taliban, deserting the people in that country who had helped us hold the Taliban at bay for 20 years, and skulking away from hundreds of American citizens and many thousands of American supporters and friends. She can’t speak for herself tonight, but I believe I know what she would have felt when America turned its back on its own citizens, our allies, and those who had fought side by side with us, leaving tens of thousands of people in the hands of the very murderous fanatics who had facilitated her murder.

 

We have learned that our Marines were given a mere 30 minutes to pluck a few people out of thousands of Afghans who had been coming by bus, car, and foot for ten straight days assembling near the gates of that airport, standing knee-deep in sewage attempting to flee from the terror of the Taliban to whom we had abandoned control of their country. Twelves minutes into that desperate half hour, a suicide bomber detonated a device that killed 170 of them and 13 of our own servicemen and women. Thousands of helpless people were deserted and, for the most part, forgotten. What kind of nation does that? Certainly, not the America of Douglass MacArthur, George Patton, Dwight Eisenhower, or Ronald Reagan. The America that took on the Nazi Germany and Imperial Japan, an America that fought for its people in the Bill of Rights, that kept its promises, sent its military after the terrorists, respected and encouraged women and girls to be educated, and stood up to bullies, murderers, thugs, hijackers, and kidnappers.

 

Barbara would have been outraged, inconsolable that our nation had expended billions of dollars, sent hundreds of our soldiers to their death, and 20 years to defeat groups like Al-Qaeda and the Taliban and ISIS only to quit, lay down our arms, retreat in panic, and turn Afghanistan over to those very same people who have consistently proclaimed their hatred for America and Israel and who repeatedly vowed to destroy us. And she would have been astonished when we proclaimed to the world that our forthcoming surrender would be completed in time for September 11, dishonoring the memory of the nation of that national tragedy by capitulating to the same people who had engineered it. What a cruel mockery of the people murdered and crippled on September 11.

 

Phrases like “we will never forget” meant something in Barbara’s America. She would have seized that hearing these words uttered in the same breath as speeches bragging about the amazing success of our evacuation—the retrograde they call it—of our troops, diplomats, and those very few lucky enough not to be left behind. We were told when we announced that we would wash our hands of Afghanistan that this would not be another Saigon. The Afghan government and its armies would hold off the Taliban for months or more. And when the eminently predictable and sudden collapse did occur, putting the lie to these predictions, we were told that all Americans would be safely evacuated as well as our supporters. And then, of course, we stampeded out of our airbase in a panic in the dead of night without notice to our allies, leaving behind massive amounts of aircraft, vehicles, weapons, uniforms, and ammunition.

 

And we were so rushed to escape from the only remaining, barely functioning airport that we left thousands of humans standing in wastewater while issuing talking points about our great success in evacuating the people we did not forget. Again, you heard we will never forget, we will never forgive. How much accountability has there been for that public, humiliating defeat? None that I have seen. How much are we doing to affect the removal of the remaining abandoned Americans and tens of thousands of terrified Afghans? I haven’t heard much about that either. How much longer before the reenergized, rearmed, and diplomatically legitimatized Taliban, and the other Jihadist grouping in Afghanistan, attack America or Israel or Paris or Madrid or churches, synagogues, restaurants, playgrounds, or nightclubs? We hear about our over-the-horizon capacity to stop such terrorism. Does anyone believe that?

 

Second, Barbara would be astonished by our government’s unlawful, unilateral relinquishment of our southern border to armies of migrants from all over the world. A central tenant of a nation’s sovereignty is the establishment, sanctity, and protection of its borders and its citizens. Ensuring domestic tranquility and providing for the common defense are a nation’s obligations, so plain that they are asserted in the preamble to the Constitution and central to our existence as a nation. We seem to have rescinded that cornerstone of sovereignty. Tens, indeed hundreds of thousands of individuals are pouring into the United States, completely undeterred by our national government, in violation of our laws, overriding our ability to make reasoned decisions as to who can come into this country and threatening the safety and security of all Americans.

 

The invaders include, of course, decent, desperate, sympathetic people seeking asylum and freedom from poverty and corrupt and tyrannical regimes, but also human traffickers, smugglers of addictive poisons such as heroin and fentanyl, fugitives, and unvaccinated carriers of COVID-19 and other afflictions. We don’t even seem to be trying to distinguish among them. What other conclusion to draw than that the federal government has intentionally abrogated the principles of American borders and territorial integrity without the consent of the people and our elected representatives? We are being forced to accept and absorb millions of persons of all ages, backgrounds, and motivations without any systematic effort or ability to provide them with a humane integration, education, or opportunity.

 

Our government is now said to be negotiating the size of the bounty we will be paying to some of them. Naturally, they are met with resentment and hostility in many segments of the country because they have flouted our immigration laws with the complicity of our Executive. We cannot begin to handle the burdens this massive invasion creates for our local communities and neighborhoods, so our government either ignores or papers them over with public relations smokescreens and dishonest, evasive pretenses that this is not happening. If the United States cannot, or will not, control who enters this country, what does this do to our ability to enforce other laws? Indeed, what does that mean for the rule of law in any traditional sense? How can American citizens be expected to respect and obey the law if our federal government sanctions, indeed embraces, even rewards non-citizens who’ve entered this country in violation of our laws of entry and who acknowledged no responsibility to abide by any or all of our laws? This sounds fairly bleak, doesn’t it?

 

[Laughter]

 

But I was trying to figure out what Barbara would say. That leads me to the third dreadful trend that we are witnessing throughout this country that Barbara would have abhorred. The lawlessness permeating and overwhelming our cities. Funding for law enforcement is being reallocated—that is to say, reduced dramatically—and law enforcement officers are retiring or quitting in droves. Increasingly, few sentient individuals are willing to enter a profession offering little beyond personal risks, meager compensation, and daily heapings of disrespect and humiliation.

 

Recently, district attorneys in all parts of the country, including particularly San Francisco, Los Angeles, and Chicago, are refusing to enforce laws or prosecute violators. Arrests are not being made. The criminals who are unlucky enough to be arrested are promptly being released—in New York, for example—to offend again, which they routinely, regularly, and frequently do. Shoplifters, vagrants, and drug addicts—although you can’t call them that—swarm streets and harass and intimidate businesses and vulnerable citizens. Stores are closing in the centers of our major cities because businesses cannot stop hordes of thieves from walking brazenly and arrogantly in and out with trash bags or suitcases full of merchandise.

 

Homeless encampments—whose occupants we are now told to refer to as the unhoused—have sprung up everywhere—if you went to Union Station last night, you saw it firsthand—in our streets, sidewalks, parks, underpasses, and subways, bus and railroad terminals, near schools, and even in airports. The streets of San Francisco, and other once livable and beautiful cities, are littered with needles, garbage, human waste, debris, and open-aired drug markets. People are being assaulted, panhandled, badgered, or attacked on the streets, coffee shops, sidewalk restaurants, on buses, subways -- bicycles are being stolen, car thefts and carjackings are becoming epidemic. Rates of burglaries, assaults, street crimes, shootings, rapes, and homicides are steadily increasing.

 

We once used the term third-world country to refer to some big-city neighborhoods. That has become an insult to the impoverished nations that do not have a fraction of the resources we do. Today, substantial segments of Philadelphia, Baltimore, Seattle, Portland, San Francisco, Chicago, New York, and Washington D.C. merit that description, only worse. How many of you can identify areas in your communities where you would not dare to go after dark or even in the daylight? And don’t answer that question. I know the truth of it.

 

The same local officials who have allowed this to happen with failed, mindless, feel-good policies are endlessly reelected to pursue the same policies. Barbara spent much of her life in Houston, San Francisco, Los Angeles, New York, and Washington D.C. She would, today, be profoundly depressed to see the decay and disintegration taking hold and strangling these and other cities because of progressive policies of apathy, virtue signaling, and disinterest by elected—for life, it seems—political officials. They say they are simply not enforcing small crimes, but when did an offense against our laws or our people become too trivial to enforce? These public figures seemingly don’t care about the victims of those crimes, which often can turn out to be very serious. How suddenly civility disappears when civil order disintegrates.

 

Fourth, Barbara was a passionate believer in robust, even fierce, debate. She would have been shocked at the cultural, societal shift that has occurred so rapidly in America, not only silencing but oppressing ideas, terms, names, phrases, even holidays in the name of the extinguishing triggers, microaggressions, sensitivities, and imaginary acts of discrimination. Not only must we watch what we say, but how and when we say it, and to whom we are speaking. I’m disregarding my own admonition, of course.

 

[Laughter]

 

Failure to carefully, cautiously calibrate your speech can and will—as they say in the Miranda warning—be used against you. And the banter or silly, immature jokes you exchanged in high school can and surely will be deployed to condemn you 20 years later or 40 years later. I recall Barbara’s response to a study and report critical of judges and lawyers at a D.C. Circuit conference a few years ago castigating acts and words deemed demeaning to women such as interruptions, insufficiently sensitive questions directed towards women lawyers. Barbara rejected the notion that women couldn’t and shouldn’t be interrupted during oral arguments or subjected to hostile or otherwise mean questions in court.

 

She did not want, nor did she think, that women should be treated like fragile flowers or delicate china who couldn’t take it. Not only did she feel that women, just like men, could handle and prevail in a rough and tumble legal and social environment, but that believing and acting otherwise towards women was demeaning, discriminatory, and led to the view that women, especially women lawyers, were inferior, not tough enough. She hated that.

 

Barbara Olson would have been shocked to see that the 'woke' movement had come so far that even a statue of Thomas Jefferson would be removed from city government in New York, that holidays like Columbus Day and traditional Halloween costumes were either banned or attacked as cultural appropriations. I read just four days ago that the Newport News, Virginia School Board had designated the John Marshall Early Learning Center to be given a less odious name in response to a decree from Virginia Governor Ralph Northam, otherwise known only for admitting and denying that the picture of a person in blackface in his college yearbook was him. John Marshall, our longest-serving and most acclaimed Chief Justice, too toxic for his name to be on a public school.

 

When a speaker may be banned because of his or her views are unpopular; when street gangs are allowed to intimidate or shoot young children on the way to school; when a person harboring a dog may not be considered an owner but only a custodian; when a mother has to be referred to as a birthing parent; when the new James Webb Telescope calls for a new name because NASA Administrator Webb had been under Secretary of State 70 years ago in the Truman administration during a congressionally instigated purge on gay persons; when pronouns such as he or she become not only offensive but prohibited if uttered without consent; when those pronouns must become they or them; or when the leader of a decades old Feast of Lanterns celebrating the first Chinese woman to be born on the Monterey Peninsula must apologize for the parade and issue these words, “The harm I have caused as an unconscious white woman filled with white fragility and my own perfectionism;” and when The Federalist Society itself could be castigated because of less than popular views of some of its members, what have we become?

 

Barbara would have seen this as an assault on freedom, the stifling of dissent and unfavored views, and the constitutionalization of conformity, a step on the way to mind control, uniformity, a tyranny against individual liberty – everything that this organization stands for. She would have seen the systemic categorization of decisions, benefits, rights, promotions, and appointments based on race or gender as fundamentally un-American. She bristled when she was told that Texas females should refer to themselves as women, not think of themselves as girls. The more someone tried to intimidate Barbara because of what we now call un-woke speech, the more she would have used it.

 

[Laughter and Applause]

 

But I want to leave you on a little lighter note. I inform you -- I must inform you, and I am happy to inform you that The New York Times is coming to your rescue.

 

[Laughter]

 

In last Sunday’s paper, apparently shocked by the November 2 elections, The Times published a collection of pieces—maybe some of you saw this—with suggestions of how America, as they put it, can snap out of it and revitalize and renew the American spirit. Among their suggestions—and I’m not making this up—you would have been gratified to see were proposals to eliminate citizenship and all age limits on eligibility to vote -- all age limits on eligibility [Laughter]—parents can vote for their newborns—to erase all student, medical, and rental debt, make international law part of the American law, replace the stars and stripes with a monochrome—they have a picture of this—a monochrome gray flag, and, this is the best part, create multiple states from California, Texas, and Florida. There you have it. The simple answer to all of our problems: expand the franchise to include infants and anyone else who wants to vote, abolish debt, gray wash the American flag, and give California 12 Senators.

 

[Laughter]

 

If Barbara were speaking to you this evening, she would have lamented at what we have done to our citizens here and abroad, lawlessness in our communities, the widespread surrender of our national respect and integrity. She would weep but also rage. She would not be silent. I am certain of that. She would be engaged, fighting, speaking out, organizing, demanding a return of our national integrity and domestic order and safety, and goading those who remain silent in the face of these developments.

 

Of course, she would be encouraged by the involvement of Federalists and like-minded Americans to stand up against these weaknesses, these trends, this disintegration. She would not let us give into apathy, malaise, helplessness, and cravenness, which we are now seeing all around us.

 

So thank you for honoring Barbara with this lecture series and for showing up in such robust numbers for the event every year. Barbara cannot be here physically to participate, but her spirit lurks in the conference rooms and hallways of every Federalist Society meeting. Thank you.

 

Eugene B. Meyer:  Thank you, Ted. We continue to miss Barbara, but that was a wonderful remembrance, and thank you so much. Once again, thanks to both you and her for all you’ve done to help build The Federalist Society. We really appreciate it.

 

I want to just close with a couple of very basic things. One, our reception for those who’ve registered for it, is across the hall. And I also want to announce, we’ve been doing these videos, and we have our first, sort of, Federalist Society film festival at 7:30 tonight in the Chinese Room, which is right back -- right down that way. So thank you all very much. I appreciate it. Take care. Goodnight.

 

7:30 p.m. - 10:00 p.m.
FedSoc Studios Showcase: Five Years of FedSoc Films

2021 National Lawyers Convention

Topics: Federalist Society
Chinese Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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FedSoc Studios Showcase:

Five Years of FedSoc Films

This year we are proud to announce our first-ever FedSoc Studios Showcase, an evening highlighting the best of our five years of FedSoc Films! Join us after the Barbara K. Olson Memorial Reception on Friday night, November 12, at 7:30 PM for drinks, popcorn, and FedSoc original movies! Local beer & wine will be served.

7:00 PM | Doors Open

7:30 PM | Showcase Introduction

7:40 PM | Film: Taking Poletown: A Community’s Fight Over Economic Justice & Eminent Domain

8:10 PM | Remarks on History of FedSoc Films

8:15 PM | Film: American Craft: What Beer Can Teach Us About Well-Crafted Laws

8:25 PM | Film: Roe v. Wade: A Legal History

8:50 PM | Film: Fashion & Intellectual Property

9:05 PM | Trailer: They Say It Can’t Be Done

9:15 PM | Film: American Cincinnatus: George Washington Lays Down His Sword

9:30 PM | Concluding Remarks

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9:00 a.m. - 10:45 a.m.
Showcase Panel III: Corporate and Academic Management Today

2021 National Lawyers Convention

Topics: Corporations, Securities & Antitrust • Culture • Education Policy
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". The final day of the conference commenced with showcase panel on "Corporate and Academic Management Today."

The life of law school Deans and university administrators have always included responding to various demands from students and faculty. In recent years those demands include attacks on the school for failing to address racist behavior and patterns, sexual harassment and the mistreatment of gays and other minorities. Over the last couple of years those demands have significantly increased in quantity, volume and force. At the same time corporate management, especially across Fortune 500 companies, but by no means limited to them, have experienced similar pressures. Most recently, we're beginning to see pushback on behalf of outspoken students on free speech grounds, accused predators with due process claims, and others on equal protection grounds. How has management handled these pressures both in academia and in the corporate world? How should they? This roundtable includes those who have dealt with these issues—is some cases very recently and in others from a few years ago.

Featuring:

  • Mr. Richard Bagger, Partner and Executive Director, Christie 55 Solutions LLC
  • Dean David Schizer, Dean Emeritus & Harvey R. Miller Professor of Law, Columbia Law School
  • Dr. Lee Burdette Williams, Executive Director, College Autism Network; Former Vice President of Student Affairs and Dean of Students, Wheaton College; Former Dean of Students, University of Connecticut
  • Prof. Robin Fretwell Wilson, Mildred Van Voorhis Jones Chair in Law, Director, Institute of Government and Public Affairs, University of Illinois College of Law
  • Moderator: Hon. Michael Brennan, U.S. Court of Appeals, Seventh Circuit

Speakers

Event Transcript

Dean Reuter:  Welcome back, or welcome, as the case might be. A lot of people show up only on Saturday, so I’m glad to see you here today. This is the hardcore group, so I particularly appreciate you making it in this morning. I heard that there’s a lot of traffic issues. There’s a marathon being run, and I’m sure that’s being run with every bit of the efficiency that the D.C. government can garner. So thank you for enduring the traffic and making your way here.

 

      We’ve got two great days behind us but still another great day ahead. I heard from, in terms of a recap, that several people came up to me yesterday and said that yesterday’s in-house counsel panel was the best panel they’ve ever seen, so that was interesting.

 

      And Ted Olson, of course, gave, I thought, a touching and memorable survey of current affairs through the eyes of Barbara Olson, which I thought was particularly poignant. And then in contrast, Vivek Ramaswamy, at a hundred miles an hour I thought, used a 30 minute time slot to deliver 60 minutes of remarks, so an impressive feat.

 

      But welcome back. I’ve also been asked to mention the COVID masks again. We’re a legal group following the law and I’ll mention again I think the humorous exceptions, one for eating and drinking, if you’re continuously eating and drinking. I don’t know what that means but it sounds gluttonous. Also, there’s an exception for unconscious people, even for large, indoor gatherings. If you’re unconscious, if you see your seat mate’s unconscious, you can slip their mask off.

 

      I was wondering when I read that guidance, what does that committee meeting look like? Where I’ll say well, if you’re eating and drinking you shouldn’t have to wear a mask. Well, what if you’re drinking, or what if you’re unconscious? That’s the way government is made, I guess.

 

      But my job today is to welcome you to the final and best day of what I describe as the secret dark cabal that is The Federalist Society and the National Lawyers Convention. Now, as you know, The Federalist Society is composed of thousands of members who assemble in broad daylight in the well-lit halls and meeting rooms of the historic Mayflower Hotel in our nation’s capital, in hallways and rooms shared with members of the new and the mainstream press. Indeed, over 60 members of the press have RSVP’d to attend our humble convention.

 

      And we even have a media relations team that works overtime to try to get our proceedings broadcast live on television and reported in the press. Virtually everything we do is livestreamed on the internet, literally around the globe. So I conclude that when it comes to being a secret society, we are sadly and wholly inept. We have completely failed.

 

      But I welcome you, not only those of you in the room, but those of you watching on the livestream wherever or whoever you may be. Please tell your friends and your family about us and ask them to watch. They can have a peek inside the impenetrable Federalist Society.

 

      Now, much of what we’re discussing in this year’s convention really goes to the very basic heart of the question about the state of our country, the condition of America. Many people assume that America is strong enough to simply continue on forever, to simply endure despite evidence to the contrary, the fact that every form of government, every county but for those that are in existence today have failed.

 

      Ours is a very young and relatively inexperienced country. My wife LouAnne has an uncle who’s 105 years old. Now, calculating from 1789 he’s been alive for 42 percent of the country, which I think is just an amazing thing. I noted a week ago, the 200th birthday of Fyodor Dostoevsky was celebrated, and I thought how times flies. I remember when he was just 150. But we’re really not old as a country is the message, and we’re not highly experienced, and we’re not a proved form of government. We’re still really brand new. And that, of course, reminds me of a story.

 

      It’s a story I’ve told before, so I apologize if you’ve heard this before. I played football on my high school football team in Frederick County, Maryland, a small, rural county in Maryland. The school didn’t even have a football team until my junior year, and consequently, we were terrible. But I was a transplant from another state, another community, and I alone on this new team had played pee wee football growing up for years. None of my new teammates had any prior experience, so we were pretty bad. And how bad were we? I was the captain. I played every second of every game. I was the leading scorer, the leading pass interceptor, the leading fumble recoverer. That’s how bad we were.

 

      But because I had played football growing up, I liked to say that I was the only one on the team going in who had ever played organized football. And after two years, I was still the only one on the team who had ever played organized football. Anyhow, I managed to score the first touchdown, catching a pass in the end zone. And as luck would have it, the team photographer, our school photographer, captured the moment on film. That picture was framed by a friend, and it sat on a table in my dining room for years.

 

      Years later, one day, I rounded the corner into the dining room, and I saw my son, at the time probably five years old, pointing to the picture and sagely explaining to my three-year-old daughter, that’s what football looked like in the olden days. It’s a color photograph. But in his tiny mind, a few years ago was the olden days.

 

      And for many of us walking around today, America has been here forever and will be here forever. But vigilance is required, and critical analysis, well, it’s critical as we move forward. We must never take our country for granted, but we must also never despair. I appreciate you being here as colleagues and as students.

 

      With that, is now my privilege to introduce our showcase panel and its moderator. Many of you already know Judge Michael Brennan of the Seventh Circuit. He was a Wisconsin Appellate Court Judge for nearly a decade before taking the federal bench. Before that, he spent years in private practice. He’s also served as an Assistant DA, so he brings that perspective as well. But that’s all in his bio.

 

      What you don’t know, or what you might not know about Judge Brennan is that he met his wife Emily through The Federalist Society. Indeed Emily, who’s on the premises today but not in the room, was long ago a fellow staff member of mine at The Federalist Society when Emily and Judge Brennan met. So my ultimate conclusion, then, is that we are, The Federalist Society, that is, much better as a matchmaking dating service than we are assembling covert meetings. So, Judge Brennan.

 

Hon. Michael Brennan:  Thank you, Dean. For those of you wondering, that picture is still in Dean’s office.

 

      Our topic today is corporate and academic management. The title of this showcase could bring to mind issues that you see in the general media, the legal media, and otherwise on a monthly or weekly basis. In the academy, an invitation to a speaker, to a university, or to a law school has caused controversy. How has that school responded? How have the individuals who invited that speaker, how have they responded?

 

      Law school chapters of this society have hosted events at which protests have been staged. How do the law school, the chapter, how do they handle those circumstances? Staying with the university model, how does a university investigate and adjudicate sexual assault or sexual discrimination on campus? How does that implicate Title IX and the various versions of Title IX within the Office of Civil Rights at the Department of Education? They’ve taken on a changing role over the decades. So what are the standards of evidence that apply for sexual violence, and what should due process requirements be in the campus context?

 

      In addition to discussion about the university environment, it’s important to talk about the management in the corporate world. A community organizing group, other non-shareholders might have challenged a corporation, for example, to divest themselves of certain assets or to leave a certain business space. This debate has been characterized as stakeholder capitalism versus shareholder capitalism. What obligations does a corporation have to non-shareholders to act in a certain manner, and how does that debate apply, not just in the for-profit context but in the not-for-profit context?

 

      Our distinguished speakers today will include individuals who’ve dealt directly with these issues both in an academic way but also in an actual practical way of dealing with the problems face-to-face.

 

     

 

 

 

 

      Dean David Schizer is Dean Emeritus and Harvey R. Miller Professor of Law and Economics at Columbia Law School. He served as dean from 2004-2014. At 35, the dean was the youngest in the law school’s history and the longest serving dean since 1971. While on a three-year leave from the law school in 2017-2019, Dean Schizer served as Executive Vice President and CEO of the American Jewish Joint Distribution Committee, a century-old international humanitarian organization.

 

      He’s a scholar of tax law and the nonprofit sector. He has served as a visiting professor at Yale, Harvard, and Georgetown. He’s also taught at Tokyo University, Hebrew University, and other academic institutions. Before joining the law school faculty in 1998, the dean was a law clerk for Justice Ruth Bader Ginsburg on the U.S. Supreme Court and Judge Alex Kozinski on the U.S. Court of Appeals for the Ninth Circuit. He began his career in the tax department of the Davis Polk law firm.

 

      Lee Burdette Williams has worked in higher education and student affairs for more than three decades and is now the Executive Director of the College Autism Network, a nonprofit organization supporting the efforts of autistic college students and the institutions that serve them. She served previously as the Vice President for Student Affairs and Dean of Students at Wheaton College in Massachusetts and the Dean of Students at the University of Connecticut.

 

      Her professional interests include student mental health, academic partnerships, learning communities, and student culture. A particular interest is in the experience of autistic students in student conduct processes. She has written extensively on these and other topics and is a frequent speaker and presenter on contemporary issues in higher education. She’s the author of two books and has taught in the student affairs graduate programs at the University of Vermont, the University of Connecticut, Appalachian State University, and the University of Maryland College Park, from where she received her Ph.D.

 

      Robin Fretwell Wilson is the Director of the Institute of Government and Public Affairs and the Mildred Van Voorhis Jones Chair in Law at the University of Illinois College of Law, where she served as the Associate Dean for Public Engagement. A scholar in family law, bioethics, and law and religion, Professor Wilson has worked extensively on behalf of state and federal law reform efforts in each of these realms.

 

      She is the author of 13 books, her articles have appeared in numerous law reviews and peer reviewed law journals, and her work has been featured in many major media outlets. In 2010 and again in 2016, Professor Wilson was ranked among the top 10 family law scholars in the United States for scholarly impact. She ranks among the top 10 percent of authors in all-time downloads from the Social Science Research Network.

 

      Professor Wilson’s scholarship has been cited by the Fifth, Seventh, and Tenth Circuits, in numerous other state and federal courts, and she’s presented her research around the world. Professor Wilson founded and co-directs the University of Illinois College of Law Family Law and Policy Program and co-directs its Epstein Health Law and Policy Program.

     

      Richard Bagger is a Partner and Executive Director of Christie 55 Solutions, a New Jersey based consulting firm that provides strategic counsel to assist clients with business strategies and opportunities and with complex public policy and regulatory challenges at the state, federal and international levels. Rich is also an adjunct faculty member and Rutgers University and a member of the Board of Directors of Tonix Pharmaceuticals.

 

      Before joining Christie 55 Solutions, Rich worked in the health sector for over 25 years, including as the senior most global corporate affairs executive for Pfizer and Celgene companies.

 

      I note that each of our speakers speak today here in their personal capacity. And as you know, as always, The Federalist Society takes no particular legal or public policy positions. All opinions expressed are those of the speaker.

 

      A quick word on format. Our total panel time is an hour and 45 minutes. Each of our individual speakers are going to proceed with some opening remarks about eight to ten minutes each in the order that I’ve introduced them. That’ll be followed by a round table discussion, and then we’ll have time for audience question and answer in the last 15 to 20 minutes.

 

      So we’ll begin with our initial remarks from the Dean. Dean Schizer?

 

Dean David Schizer:  Judge, thank you. It’s really nice to be with all of you today, and I’m going to help you answer a burning question which I’m sure you think about all the time: Do I want to be a law school dean? And basically, I can tell you that there are absolutely fantastic aspects of this job, but I’m not going to talk about those. I’m going to talk about those moments when you wake up in the morning and say, why in the world am I doing this?

 

      And specifically I am going to talk about two experiences that I had over the years, two case studies. One is about a controversy about a student group, another is about the right way to run a disciplinary proceeding. But before I do that, I’m just going to start with a couple of -- with four, actually, four general observations about nonprofit management and about academic management specifically.

 

      First, one of the reasons why managing, whether it’s a university or another nonprofit, why it’s so hard is that success is hard to measure. You cannot use profitability. So think about it. If someone is doing something that really doesn’t make a lot of sense, maybe they’re just mistaken. Maybe it’s something that’s good for them but not good for organization. If that happens at a for-profit company. at least you can point out and say, hey, but what are the earnings like for your group? And if the earnings are bad, at the end of the day, they can’t really explain it away.

 

      But in a nonprofit, it’s not that simple. You still have to define what your mission is. You try to measure success, but you don’t have that consensus around what success looks like. And it allows people to do things that in my opinion, they shouldn’t be able to do.

 

      Which brings me to my second point, so what do we do about that? I’m in the middle of writing a book now on nonprofit management. It’s called Run It Like a Business: What’s Wrong with Nonprofits and How to Fix Them. And my basic point is run it like a successful business. Don’t do what’s politically expedient. Don’t do what’s easy. Be rigorous in figuring out what the best course is to advance your mission and do that. But you also have to bring other people along. So if you remember nothing else, remember analysis and advocacy. To me, that’s the formula.

 

      Which brings us to part three, my third point. Academic management is ways even harder because you have so little power. Think about it. One of the key groups that you’re managing, tenured faculty, they don’t have to listen to you, so a lot of it is about persuasion. I have a friend who is a law school dean who said that he dreams someday of being reincarnated as a manager with real power.

 

      And the fourth point that I would make is that universities are fascinating ecologies with lots of different groups, different interests, and I think when you look at it from the outside you might not recognize that. Indeed, people in this room probably see an undifferentiated mass of left-wing sentiment, and it’s not all together untrue, but at the same time, we have to distinguish among the different groups.

 

      So let me start with students. One thing that is critically important about students and a reason why they sometimes see things differently than faculty is—it won’t surprise you—they’re young. I remember how much smarter I must have been when I was young because I was certain about everything. And that dynamic exists. I remember as a college student speaking to someone who was talking to me in a heartfelt way about what he believed. And then he pounded the table and he said, “The only thing I can’t stand is intolerance,” no sense of irony at all in saying it.

 

      So you have the students on one side, then you have faculty. As a conservative member of a law faculty, I can tell you that I’m not the norm. Generally, they do point left. At the same time, they have other commitments that they really care about, academic freedom and also due process in law school. Both of those things are important in the discussion that we’re about to have.

 

      So let me turn, then, to those two anecdotes which illustrate these themes. It’s Friday afternoon. I’m already home. My cell phone rings, and a student -- and this is September of 2005. It’s my second year as the dean. And the student at the other end of the phone says, “Listen, I just wanted you to know that tomorrow the student senate is likely to kick the Christian law student organization off campus. I thought you’d want to know.”

 

      Okay, so now you understand how I felt. What happened there? What happened was the student government -- the student senate at Columbia Law School has a policy that a student organization has to be open to every student, or if they aren’t, then they’re not eligible to be recognized. And the Christian Legal Society had changed its policy that fall, and they had decided to ask their members to make an affirmation of faith, and their leaders had to affirm about conduct. And one of the principles that they included was that you could not be gay and also be a leader of this organization.

 

      So that’s the fact pattern that created this issue. Some of you may know that a similar thing happened at Hastings, and five years later the Supreme Court addressed the issue. But what happened at Columbia? Well, one of the things that was particularly challenging is that this really was a decision the student senate could make, and I couldn’t make for them, as much as I would have liked to.

 

      By contract, our tuition revenue, some of it goes directly to the student senate, they allocate it, and that’s what this process was. The truth is if I said, “This is what you have to do,” I was really taking a risk that they would do the opposite just to make the point that I couldn’t tell them what to do. But I did not want the Christian Legal Society to be kicked off campus. At the same time, I did not want our LGBTQ students to feel as if the school was not committed to them also. And so what do you do?

 

      Well, the real problem here is that we had an incredibly difficult issue, but the students on each side thought of it as easy. And that’s what I had to fix. So, analysis. Point number one: on one side of this issue, you have nondiscrimination norms. And if our law review or some other student group said we’re not open to women anymore, or people of color, or gay students, that’s a problem. “Open to everyone” is by default generally the right policy.

 

      But not necessarily always, which brings us to the other point: religious freedom. If you want to have a group which is defined by a shared faith, then the people in the group presumably should have that faith. And if you say that everyone can be a member, then what it means is you won’t have that faith based character anymore. So in a way, you don’t have that faith based group that you think you have. So this is hard. There’s no easy way to balance those two positions, but that’s what I needed them to do is I needed them to see how hard it was.

 

      Analysis: that takes us to advocacy. Who could my allies be, particularly since I couldn’t, as a matter of form, make this decision, but I sure wanted it to come out in a particular way. So, first set of allies: the leaders of the student senate. They felt like they were caught in the middle of something. So when I said to them, “Delay this vote. Delay it for months. This is an important issue. Let’s study it. Let’s study it as a group,” they were actually quite happy to do that. And then I recruited faculty, and we had faculty members who were on different sides of the issue, but they were collegial, and they all understood how hard the issue was. Basically, the effort was to make this a teaching moment, and it worked out quite well, actually.

 

      After several months, literally months of a series of meetings discussing the issue, the student senate committee charged with studying this decided to recommend and exception to the “open to all” rule for expressive association. But at the same time, the Christian Legal Society had a change in its leadership and the new group actually wanted to be open to all anyway. So the issue became moot, people were happy, you never read about it, mission accomplished. Again, I think I lost -- I think a lot of my hair turned gray during this one.

 

      I’ll just briefly mention a second example of some of these dynamics. You may remember President Obama’s Department of Education sent a letter known as the “Dear Colleague” letter to general counsels at universities with particular views about what Title IX required in disciplinary proceedings. So our general counsel, as general counsels are wont to do, got this letter and said, oh boy, we’ve got to make changes.

 

      And so they wanted to make lots of changes in the disciplinary proceedings at the law school and other places, and I thought they were not taking full account of the due process rights of people who were accused in these situations. So that was my view, but I knew that the fact that it was my view personally wouldn’t necessarily persuade the general counsel. So again, analysis and advocacy.

 

      Analysis: two really important principles, each of which is critically important. We’ve got to have -- we’ve got to guarantee a safe environment to all our students. We’ve got to make sure people are comfortable. We should have no tolerance for really bad behavior, on one side. On the other side, we have to make sure allegations are true. We have to do the best job we can to figure out what really happened, and we have to be fair to everyone. It’s not easy to do both of those things, but that’s really what you have to do.

 

      What I did is I referred the issue to a faculty committee. Our student services committee had 11 members that year just by happenstance. Eight of them were women, which I thought would lend an important perspective to this issue. They analyzed the policy, and if anything, they were more upset about it than I was. They were emphatically, emphatically unhappy with aspects of the university policy, and I just unleashed them on the general counsel’s office. I don’t think they liked that very much.

 

      And then the last thing I did there is I also formed an advisory committee of graduates. I asked two sitting state court judges to offer a perspective and also a prominent public interest lawyer. It so happened that one of them was a university trustee, which didn’t hurt either. But basically, what we did is we took to hard issue head on. We tried to figure out how to navigate it, advocacy too, and the policy did get better.

 

      There’s more to say, but the issue is these issues are hard, but you can make progress on them if you try hard enough.

 

Dr. Lee Burdette Williams:  Good morning. I suppose that nobody in this room wakes up wondering if you want to be a dean of students. The fact that I’m no longer a dean of students probably tips my hand a bit. When I look at this audience, though, I actually see you in one or more of three roles that feel particularly relevant to me this morning, and I’d like to ask you to listen to my comments through the lens of one, two, or all three of those roles.

 

      The first is that you’re all alumni of an institution—two, probably—so you have a particular interest in the activities and reputation of those institutions. Another role is that I suspect many of you are the parents of current or future college students. The third role is that perhaps you have already been or will be called on to represent a student or a group of students in their actions against their alma mater. So my hope is to provide you in all three of those roles some insight about how things look from the other side of the desk, the university administrator’s view of things.

 

      And I want to start the way that I started all of my work as a student affairs professional. It’s with this simple idea, that learning takes place best in the context of community, that if we want students to learn, which most of us would agree is the goal of an education, then we have to create the kind of secure and trusting environment that encourages intellectual risk taking necessary to truly learn.

 

      If any of you have ever done any kind of climbing, either on a real rock face or a ropes course, you understand this. It’s only when you feel securely belayed by someone that you trust are you willing to attempt the kind of dynamic moves necessary to ascend.

 

      And this isn’t brain surgery; it is, however, brain science. What the science of our brains tells us is that only when the amygdala—that almond shaped component of our brain that sits atop the brain stem—only when that amygdala is calm can the other parts of our brain responsible for absorbing, retaining, and analyzing information do their work. When the amygdala is activated by fear or anxiety, learning ceases.

 

      I’ve always seen my work and the work of my colleagues as creating an environment where my students have the confidence to make the dynamic intellectual moves their faculty ask them to make. And we do that through building community. It is hard work. It’s the nature of humans, especially the late adolescents and young adults who often populate our campuses, to push against boundaries, to question authority, to engage in high-risk behavior that puts themselves or other at risk. After all, retuning to brain science, we know that the prefrontal cortex that enables good judgment is actually under construction until the age of about 25.

 

      So it’s in the context of community when breakdowns between members happen that those of us in some position of authority mobilize to repair it. And we do so using a set of tools that we have been taught and trained to use, counseling, mediation, creative sanctioning. We give the person doing harm opportunities to repair the damage. We give those how have been harmed the opportunity to state their complaint. We confront, we educate, we heal, and we move on.

 

      Because our campuses are as fluid and as fast flowing as a river, there’s always a group within the community about to depart. There’s always a group about to enter. And what ties them together, the constant, is that sense of community that they feel.

 

      So of course, in higher ed we are imperfect in these efforts. We get things wrong. We believe a student who it turns out is lying. We disbelieve a truth-teller. We investigate incidents, but we are not infallible by any stretch. And I’d be lying myself if I told you that no student had ever been unjustly accused and sanctioned, or no student had ever gotten away with something egregious, two categories I found myself in quite often as a student myself.

 

      And this is pretty much how it’s gone for most of the three hundred years of American higher education: we confront, we educate, we heal, we move on. And we do it in the context of a community that we feel a connection to and a responsibility for.

 

      Partly what motivates us to do our work as well as we can is the knowledge that the next day, we are going to run into each other on the quad, in a dining hall, in a classroom. So we have incentive to treat one another well because the tie that binds us, the tie between individual and community, it matters.

 

      The description of this session this morning mentions “attacks on the school for failing to address a variety of problems.” As my younger colleagues say, “They’re not wrong.” We have failed in some significant ways, though I would argue that we have actually succeeded more often. Those just don’t get publicized very often.

 

      The description of this session goes on, “We’re beginning to see pushback on behalf of outspoken students.” There is nothing new here. We are not beginning to see pushback. We have always seen pushback. In the year 1229 at the University of Paris, students went on strike. The same at Oxford in that century. Some of those crises ended badly, like students murdered their professors.

 

      So those of us who assume the role of dean, like our predecessor Oxford dons, willingly step into the fray with the owners of these still developing brains. If you’ve ever raised children into adulthood, you know what I mean. We accept that our students are going to get angry with us, rail against our edicts, and scream about our limit setting. And at every turn, we confront, we educate, we heal, and we move on.

 

      But no longer, because now students stop looking within the community for response and reparation. They no longer seek redress from individuals they know. They no longer lead off their efforts by scheduling an appointment with the president or the dean of students. Instead, they turn their gaze outward, or more specifically, to their screens and out into the ether where they find sympathy and support from a hundred or a thousand people who do not know the first thing about our community, much less feel any loyalty to it.

 

      So maybe you’re thinking that’s not such a bad thing. If institutions of higher ed have mucked things up so badly, maybe it is time to call in the cavalry. Maybe calling attention to our misdeeds, to our refusal to listen, is a good thing. The overused cliché that sunlight is the best disinfectant might be true, and nothing drenches us in sunlight faster than a viral tweet.

 

      But the problem with enlisting these outsiders is that students suddenly lose all control of the conversation they were hoping to have. The narrative is now public and often distorted by others for their own agenda, which rarely includes student learning. This is not at all a partisan problem. Ugly accusations about their institutions and the administrators and faculty who are employed by them come from both ends of the political spectrum.

 

      Ironically, in fact, if you step back and look at the spectrum in its totality, you see a number of strategic commonalities among students at both ends. One of those strategies is to go public, go viral, enlist outsiders, and hope that heads will roll. And sometimes they do roll, and sometimes they deserve to, but quite often good people, solid professionals, lose their jobs and in many cases their careers because that’s what satisfies that crowd, this outside, very opinionated crowd.

 

      I asked you at the beginning to consider the three potential roles and perspectives that you might bring to these campus controversies. And I’d like to end with two approaches that I’ve used when I’ve been in the position to advise or respond to student activists and encourage you to maybe employ these in some of those roles.

 

      Ask the student or students what strategies they have already employed to make their concerns known. Have they spoken directly to the other parties involved? Have they tried to solve the problem in-house? Students excel at making demands. Demands, I tell them, are a bit off-putting. I always encourage student activists to reframe their demands as requests and to be prepared to compromise. Higher ed does a lot of things well, but a quick pivot is not one of them, so change will not happen quickly.

 

      And then, make sure the students truly understand what’s at stake. Do they want a public airing of their community’s shortcomings, keeping in mind that they are a part of that community and its reputation impacts them personally? Do they want to publically humiliate people whose career choice indicates a certain kind of commitment to students’ wellbeing, to their wellbeing?

 

      Do they want to sacrifice their own learning, the classroom kind, to engage in this other experience? Students who engage in some of these controversies tend to go into it, loins girded ready for battle, and they often missing end up substantial amounts of class time, which they are, I remind them, paying for. I can’t answer those questions for them, but I try to ask them to consider the consequences of their actions. If there is one through line in the work of all deans of students it’s this: your choices, your consequences.

 

      In sum, let me say again what I started with, my belief that learning takes place best in the context of community, that the building and maintaining of community is a shared responsibility, and its loss at the hands of those who do not care about that community inflicts significant damage on the educational enterprise. Thank you.

 

Hon. Michael Brennan:  Robin?

 

Prof. Robin Fretwell Wilson:  Thank you. If we read the news, we see universities as a hot bed of wokeness and corporations as instigators in supporting actors in a woke culture. We’ve heard a lot of sobering accounts during this conference and meeting, and I don’t mean to dispute any of those. I do think faculty and students both are afraid. But there are hopeful signs from universities and corporations, and so I want to spend a few minutes on those hopeful signs.

 

      Oftentimes, the hopeful signs don’t make the headlines. The media is really not interested -- or is interested in reporting students heckling Charles Murray, or students at Duke recently getting up and walking out when David Stras was speaking. They’re far less interested in telling you about the real conversations that are happening around the country by students about how they and, by extension, we can live together despite our deepest differences.

 

      These conversations are happening around the country, in particular around gay rights and religious liberty, a place where my own scholarship and work has been. And we see that as a culture war that feels like it’s always going to be with us, and it certainly feels like it’s getting worse as we navigate issues around trans people.

 

      But progress is being made. It takes concerted work, and I’ll just give you a concrete example. Many of you know Yale Professor Bill Eskridge. He’s a big friend of The Federalist Society. He and I created a dialogue series called the Tolerance Means Dialogues to give students a platform for sharing their experiences. That takes a lot of effort. It’s not only our effort. Casey Mattox and I were talking yesterday. He’s doing Courageous Conversations at Koch. There are lots of things in this space that are happening.

 

      But I’m going to tell you about the Tolerance Means Dialogues for a minute. I know some people here from prior dialogues at BYU. We don’t always hear good things about Millennials. Millennials seem to be the most trashed generation in history for some reason, and yet the dialogues are based on the premise that Generation Z and the Millennials actually have grown up with unprecedented diversity. They’ve come up with ways to actually respect each another across those divides without submerging the differences. In a sense, that gets done, whether it’s sexuality, whether it’s religion, whether it’s a political identity, and when they accord that respect to other people, it’s reflected back to them. But you never hear that in the media.

 

      Now, in these dialogues, which we’ve had everywhere from Arizona to Alabama to Pennsylvania, at public universities like the University of Alabama, private religious colleges like BYU and Malone University, students write about what tolerance means to them. They get scholarships for doing that. Who wants to be against getting a tolerance scholarship? It’s sort of incentives baked into the system.

 

      But they often say that tolerance is probably too little. They’ve actually argued against the question in the frame, and they talk about the project of living together actually requiring a lot more that merely tolerance. And what they do is they share their insights about how they do that in their own lives.

 

      Now, a lot of the stories are about reconciling. One of our winners is a young man, now a lawyer at Kirkland & Ellis, who talked about his father urging him as a teenager to go to gay conversion therapy. For him, that was a nonstarter. It was also a deep wound. He shares a discussion in his essay about tolerance. He says that it requires him to accept the reality that other people have core values. And I’m just reading from his essay. It requires him to accept that he cannot change the hearts and minds of all people, including his father. That’s a deep testament to tolerance.

 

      At these dialogues—I’ll give you an example from Alabama—we had DEI officers there celebrating the winners, talking about these kinds of ideas. They were seated next to judges, and university leaders, AIDS activists, religious leaders, and gobs of students, all in the same room, packed in at the University of Alabama, which I don’t think makes the news either. So I think it’s possible to do these things.

 

      The basic way they unfold is there are dialogue catalysts like me and Bill Eskridge. Sometimes my dialogues partner will be a trans man, Shannon Minter, who’s an amazing litigator, by the way. And often Bill or Shannon or someone will start and talk about their own experiences as a trans person or a gay man. Now if you know Bill Eskridge, you know what a believer in pluralism he is and how much he believes in the rights of religious people to be authentically themselves, as well. So he creates a kind of parity of these things.

 

      I sort of take the pointy-headed academic role and talk about civil rights and how civil rights don’t have to be a zero sum. They’re more like puzzle pieces that can be fit together, but it requires lawmakers to do that, not judges. Apologies, Judge, but it generally has to be done by judges if we’re going to do that.

 

      And then, center stage is taken by our dialogue winners, and they, frankly, smoke the rest of us, just talking about what’s happened to them in their young lives and how they have managed to get over the friction that everybody else sees at the university or in culture. And these are not dumbed down observations by any means, and I’ll just give you an example.

 

      One of our dialogue winners self-identified Arielle Brown as an African American Christian. She was getting her Ph.D. She shared her experience with what she called discrimination and microaggressions. The microaggressions were people assuming, and here I’m reading from her, that because of her spirituality and her character that they were automatically rejected because it was assumed that her Christian identity influenced her to hate the LGBTQ+ community. And then she goes on and talks about how deeply unfair it was to impute that to her, which I think is incredibly powerful and something that we need to remember in society.

 

      The dialogues, as I said, are kicked off by dialogue catalysts. The winners then read the essays. In some sense, the Q&A is where the real stuff happens. At Arizona State, we had our first virtual dialogue, because COVID, and one of the students who had the first question was a Federalist Society member who said that she had been called a Nazi by other people at ASU. And the moderator, it was the associate dean in that particular case, actually addressed that and talked about the university had grappled with that. I spoke directly to it too, which I think is important just by itself, that a person felt like this institution actually felt like that was wrong and said it publicly, as it is, obviously.

 

      We had another dialogue where a young man who ended up working on this dialogue series with us, a guy named Bryce Tune, he asked a question. He said, “You know, I’m a Christian, but I support the LGBT community. And I’m pro-gun, but I favor Medicare for all. So how am I supposed to, as an undergraduate, think about these commitments?”

 

      The answer is not really complicated. His commitments don’t have to match up with some package of political commitments on the right or the left. Bryce gets to be Bryce, but he needs to be affirmed in that and talked about. He needs to hear that our commitments are not either/or, they can be both/and. And we get to decide those things that we think are important. I think that’s the kind of work, hopefully, that Lee Burdette and others I know are doing as deans of students all over the country.

 

      One of the things that I think is really important and one of the reasons that universities get these really horrible outcomes is they are not occupying the field. If you want to have this kind of dialogue, you actually have to work at it, which means you, the university, needs to create the context where this kind of frank dialogue where people on the left and on the right can both share their experiences, and talk about how they actually want to be respectful of other people, and how they’ve done that. That actually takes work.

 

      Now, it helps if the chancellor puts you on his Instagram, so thank you, Chancellor Jones. And it helps when esteemed faculty that are even woke sometimes tell students that they need to come to these dialogues because they are ultimately about tolerance of all people. And it helps to have those DEI officers there.

 

      We had our first trans winner recently. And then later, I was told by the moderator that she had sued the university, and I’m like, “Oh, this is not good.” So what we did is we created a green room, and we brought the highest DEI officer of the university to the green room with our funders, Templeton Religion Trust, and we all visited before the dialogue about that so that if there was some blow up it was going to happen there in the little green room and not on the stage. And it’s just one small example of all the care that has to go into actually being able to have dialogues that move people’s hearts and minds, I think.

 

      Now we have an amazing team, a ground game that we run as outsiders to different universities that we visit, and it’s a huge amount of work. We spend weeks writing every single registered student organization. We bake parity into the dialogue so it projects tolerance.

 

      The Federalist Society has been an amazing partner in this, by the way. Federalist Society student chapters co-sponsor with the American Constitution Society, like the “evildoers on the other side.” They’re actually sometimes co-sponsoring for the very first time in the history of the chapter. Christian Legal Society will be out there alongside Outlaw. And the projection of that is that we don’t have to be at loggerheads. We can come together and have a dialogue.

 

      It helps that Bill Eskridge has lent his time to this. It helps that Templeton pays for everything, so it’s very easy to ask people to host us because we pay for everything and do all the work. But in any event, we are now on stable footing for the next three years, so shameless plug for us, and then I’ll make some comments about corporations. We would love to host these dialogues if you think that your university would benefit from that. We co-convene with you. So if you are interested in that real kind of dialogue, I’d be happy to visit with you after.

 

      I’m a Pollyanna. You can see that from these comments. But I think there’s some promising things in corporations too. Like universities, they’re a microcosm of the world. Now, we spend all of our time at work, it seems. It’s important that in work we bring our whole selves to the workplace, including our religious commitments, and that we do our best work when we are able to be authentically ourselves at work, just like we are at university.

 

      Now, inside of companies we’ve seen a rise of affinity groups for employees of faith in places like Zurich, and American Express, and Allstate, and Cummins. Now, these groups that are organized around faith commitments are taking a page. They’re copying LGBT affinity groups that have risen up decades before in companies, and these groups are actually collaborating together. They’re coming together to talk about being fully themselves at work.

 

      Now, this recognition and structure, I think, can actually help place people of faith on an equal footing, or nearly equal, or a more equal footing inside of companies because it makes their needs seen. Now, ideally, their interests and rights are going to be respected without having anybody like our friends from Becket sue a company because they want to take a moment to pray during the day. Far better for this to come up within a company and people recognize that it’s important to respect their employees in their faith commitments as well as their LGBTQ identity or any other identity.

 

      Recently, Andy Koppelman at Northwestern, and I, Bill Eskridge, and others, convened state lawmakers in the Midwest around the idea that religious liberty and gay rights don’t have to be at loggerheads. And we brought Fortune 500 company officers. And that matters because in our culture war, we think that the only side of the ledger that these companies play on is for the far left. And that’s true in many, many things, but it’s not true in all things. They actually have an interest in helping lawmakers figure out how these rights are going to coexist. I will stop right there. Thank you.

 

Richard Bagger:  Good morning. I’m going to take a couple minutes and speak to the corporate management aspects of this issue, especially the externally facing aspects of corporate activities.

 

      Let me begin with my conclusions, first, that corporations should remain focused on their purpose and business objectives and not stray into issues that do not impact or are not impacted by those objectives; second, that businesses should not speak to every issue, should not acquiesce to every stakeholder, and cannot be all things to all people, including their employees; and third, that the issues that corporations do engage on and speak to should be ones that contribute to their business objectives and to creating or protecting shareholder value.

 

      Now, I’m not suggesting any changes to corporate law or legal remedies for shareholders. What I am suggesting is that corporate executives apply the same focus on business objectives in this area that they do elsewhere in the business.

 

      Some quick context here is important, as the purpose of the modern corporation has been debated now for at least 50 years. Milton Freidman’s 1970 essay laid out a clear world view. Shareholders own corporations whose purpose is to increase shareholder value. Boards and management should be focused exclusively on that objective. That shareholder theory of the purpose of corporations has had lasting impact and is seen in much of corporate governance today, including how corporate objectives are set and how senior executives are compensated.

 

      However, an alternative theory also developed, known as the stakeholder theory or stakeholder capitalism, which holds that corporations are accountable not only to their shareholders, but also to society, especially to address impacts from their operations such as environmental, labor, and community issues.

     

      Over the past twenty years aspects of stakeholder capitalism have grafted onto the shareholder theory as companies see issues related to their operations such as environmental footprints, supply chain, and the communities where they’re located as impacting shareholder value.

 

      We have also seen increasing investor interest in ESG issues, further bringing stakeholder capitalism into shareholder value. Larry Fink of BlackRock’s annual letters to CEOs with BlackRock representing in many cases their largest shareholder, I can tell you, gets a lot of boardroom attention. And these developments are also reflected in the Business Roundtable’s 2019 updated statement on the purpose of the corporation, which is consistent where companies have been moving for a decade or more.

 

      So the question is where should a business draw the line? What issues have a strong connection to shareholder value even if they’re a step or two removed? And which issues have no connection to business purpose, or worse, risk having a negative impact for shareholders? What constitutes appropriate stakeholder capitalism that can contribute to shareholder value versus what’s an exercise in woke capitalism that could potentially damage shareholder value?

 

      How should corporate executives think about this? From my perspective the key is focus, focus, focus, keeping your eyes on the business and not getting distracted. Corporate executives insist on discipline and focus when engaged in business strategy, investment decisions, and business plan execution. They divest non-core businesses. They outsource support services so as not to distract the organization. They strive to align employees around a single set of objectives. This same focus should be true on engaging on public issues and in public debate.

 

      Plus, companies don’t have much experience outside their core business. They’re ill-suited to speak on issues beyond their expertise and are more likely to get in trouble when they do. I think we only need look at the Georgia voting law and some companies’ response to that as evidence of that point. And the farther they stray from their core business, the more likely they are to get called out for hypocrisy. And Woke, Inc. is a good read on this point, full of such examples.

 

      What are some of the reasons corporations might speak to issues outside their core business? And we always need to be asking ourselves, do these meet the stakeholder values standard? Well, the first is customers. Some companies make a strategic decision as part of their marketing plan; think Nike. Is that based on market research? Have they thought about the business consequences? Do companies really want to write off large groups of potential customers? As Michael Jordan famously said, “Republicans buy sneakers too.”

 

      Employees -- there’s an increasing expectation from employees that their employer will speak out on issues that matter to them even if not related to business objectives. Now, this can create a serious risk of a loss of focus, create a distraction, risk losing a one company mindset, and can really undermine company culture, inclusion, and employee engagement as some employees sit on their hands and silently dissent.

 

      And then third, issues of politics and reputation. Some companies engage on issues outside their business priorities to seek favor with the party in power or reputational benefit from the media and opinion leads. And here again, the question always should be what’s the business purpose because this, I think, is an especially dangerous area. Picking sides in politics inevitably leads to an equal and opposite political reaction, sometimes as soon as the next election.

 

      Finally, sometimes it appears there is not business justification at all for companies speaking to an issue, which I think of as the C-suite equivalent of the faculty lounge. Now, the best way to counteract that echo chamber of the corporate faculty lounge is to have the discipline to insist that there be a tangible business purpose for speaking out on an issue.

 

      Now, because these issues involve questions of shareholder value and corporate reputation, board oversight is really important. Boards should have regular discussions with management about the issues on which the company engages publically and the processes that are in place for prioritizing those issues based on business objectives.

 

      In recent years, activist shareholder groups have pressed boards to regularly review companies’ political and policy engagement. They intended this to put a spotlight on company advocacy and encourage engagement on broader ESG type issues. However, I believe that boards should use these same reviews to ensure that the companies’ external engagement is focused on matters that have a connection to business objectives in creating or protecting shareholder value.

 

      Finally, let me close with just a couple suggestions for business leaders. First, to proactively consider whether to engage on public issues as part of business strategy. It’s not a separate thing. It’s not a separate category. It should all contribute to the business plan, and to engage only on issues that advance a business objective to create or create or protect shareholder value.

 

      Second, not to be overly reactive, not to get distracted. It will be necessary to adjust the plan, but to keep your eyes on the business goal.

 

      Third, to develop policy principles based on your company mission and ensure that any political activities are based on those principles. Those principles become the safe harbor in a complex political world.

 

      And finally, and importantly, to communicate with employees to explain how as a mission driven company, you focus on the business, and that it is by achieving your corporate mission that you make a difference in the world. I encourage you to take a look at Brian Armstrong’s blog, “Coinbase is a mission focused company,” which I think is a great example of executive leadership and executive communication in this area.

 

      Thank you for your interest, and I look forward to the discussion.

 

Hon. Michael Brennan:  Thank you. Let’s begin with just a comment about Rich’s use of ESG, environmental, social, and governance factors. For those of you in the audience, and this was new to me in preparation as well, it’s this idea that there are certain demands, although as Lee might say, requests, that individual groups are being made either of a university or of a corporation. Those ESG factors might also be characterized as stakeholder capitalism versus shareholder capitalism, this distinction that exists, or it might manifest itself in demands that are being made on a university level, say, by groups that will go forward.

 

      I’d like to start the discussion by talking about a common criticism that happens of colleges and universities as well as corporations, that they’re not prepared to investigate or adjudicate or to respond to or to speak to these types of demands or requests as they’re being made, whether it be a for-profit or not-for-profit corporation responding to a non-shareholder stakeholder, whether it be a university dean of students or university administration having to respond to these types of request being made.

 

      I want to open it up to the floor for comments that our speakers may have on that type of observation of some that the corporation or university are not fully prepared to respond. Lee?

 

Dr. Lee Burdette Williams:  Again, you’re not wrong. I think that as Rich said, there is a level of focus that is happening on a college campus related to the learning enterprise. And if we have limited bandwidth, we have limited personnel, where do we want to focus our energy and the energy that’s traditionally been focused around trying to provide students with the education that’s promised them, trying to provide other stakeholders with the research and knowledge generation that a university exists for? So really, this begins to feel like kind of an adjacent set of tasks that then overtakes the educational enterprise.

 

      I think that we have gotten better at it, but we are stacking sandbags against a rising tide of dissent, frustration, and aggressiveness by outside forces. And it sometimes feels like we can’t get ahead of that to stay focused on what we are there to do.

 

Hon. Michael Brennan:  Dean?

 

Dean David Schizer:  I do agree. There’s a saying in management that if it’s not a priority, it’s a distraction. And I do think, just to align myself with the good points that Rich has made, stakeholder capitalism is, in my opinion, a really flawed idea.

 

      I just want to speak for a moment about for-profit companies, but I’m doing this drawing on what I’ve already said about not-for-profits. One of the ways in which non-profits go astray is when they’re not clear about what they’re trying to do, and that lack of clarity could lead them to be too comfortable with decisions that maybe were good years ago but aren’t good anymore. And frankly, it can also be a cover when people want to do things that are good for themselves but don’t really advance the mission.

 

      Remember, I said the great thing about for-profit companies is that it’s harder to get away with that because there’s this clear metric of profitability. But what stakeholder capitalism is trying to do is to dilute the metric and say it’s not just about profit, it’s also about helping the community, helping the environment, and so on.

 

      And just to make this point a bit more vividly, I want you to think about being on the board of three different intuitions. Two are for-profit companies and one is a nonprofit. So let’s start with a for-profit company that only is committed to shareholder maximization, so to the Milton Friedman type company. You’re on the board. You go to a meeting, and management says to you, “We need to focus. There are two businesses that we run. Hard, we’ll call them, and easy.” Hard and easy. Hard is hard because it’s more challenging for them. Easy is, well, that’s more like a vacation.

 

      And they say to you, “We want to stop with hard. We want to shut that one down. And we want to just run with easy. We think that’s the way to go.” So, obviously, the question you’re going to ask is, “Okay. But before we make this decision, just tell me about the earnings of each of these divisions.”

 

      And if they look a little sheepish and say, “Well, actually, hard is more profitable, but we just don’t think it’s worth it.” Well, you’re not going to let them get away with that. You’re going to say, “Wait a minute. No. What are you doing? If this is the real value add, this is the one we do. And if you have to shut one down shut the other one down.” So it’s the ability to see through the self-interested suggestion that is so important at a for-profit company. So you stopped that. Good job.

 

      You go to your next board meeting. It’s the not-for-profit. Same conversation, “Let’s shut down hard. Let’s keep doing easy.” Well, you can’t say, “Which of them is more profitable?” You need to find a different way to figure which advances the mission more effectively. And that’s possible, but it takes a lot more work. So there’s more of a risk that the self-interested decision slips by you.

 

      The third meeting is the woke company, the stakeholder capitalism company, where management says, “Okay, let’s get rid of hard. Let’s go with easy.” And you say, “Wait, why? What’s the profitability?” And they say, “No, no. It’s not as profitable, but it helps us advance these 15 other really important social goals.” It’s harder to argue with that. But do you really know that that’s what they’re trying to do? Or maybe this is just something that’s self-interested.

 

      So I think the fact that companies are pushed to focus on profitability is really good. It’s really important. And this trend away from it, however well-intentioned, I think leads to very bad outcomes.

 

Hon. Michael Brennan:  Rich?

 

Richard Bagger:  I agree with the dean’s comments. I’ll just add a couple of observations. In terms of whether companies are prepared for this, there’s probably a distinction between larger companies and smaller companies. And a smaller entrepreneur would say the fact that the large company is focusing on all this stuff -- while they’re focusing on this stuff, I’m going to go beat them in the marketplace, or take their business away from them. So this is definitely like a startup versus established company issue here.

 

      Second, on stakeholder capitalism, stakeholder capitalism becomes shareholder capitalism when the stakeholders go buy a hundred shares for public companies and then start submitting shareholder resolutions to the annual meeting, which becomes then an important thing that companies need to manage as they recognize that the vast majority of their shareholders probably disagree with the perspective of those activist shareholders.

 

      Finally, I’ve seen a trend of the sort of demands of activist stakeholders, starting with internally focused things like what are you doing about your own environmental policies for the impacts that your facilities are having, sort of moving from that from internally focused things about the company to what are you doing about public issues that don’t relate to your business? And that becomes a very slippery slope.

 

Hon. Michael Brennan:  Robin, when you get invited in by a university environment, are they prepared -- I think of the BYU situation that you’re talking about. Are you going in because it’s a fire drill, or are you -- is there an anticipation of these external problems and how they deal with them?

 

Prof. Robin Fretwell Wilson:  Well, I think there’s an anticipation. I will say the universities, as I said earlier, need to occupy this field. Oftentimes, these dialogues are a data point that when something later happens at the university, a student does something that seems hateful and may be hateful, the university is able to say we respect all people here because of this track record.

 

      Unfortunately, this is not just a single one-shot dialogue. That kind of track record has to be built, and rebuilt, and built, and rebuilt. I think it can be important to the reputation of the university to have done this type of work before something skitters off the rails.

 

      I will say I think faculty need support too because faculty are having these -- they’re the primary interface with students. And oftentimes, something that they say can be misconstrued or blown up. And trying to put together an apparatus that is there for faculty when that happens, I think, is really important.

 

Hon. Michael Brennan:  Lee, in the university environment, when an issue arises and there’s an attempt to solve it within the community such that those community bonds remain tight, is it always an external force coming in because of the desires of that external force, or is there a gap or a need in the university that needs to be filled?

 

Dr. Lee Burdette Williams:  I think that external forces are sometimes the most pernicious and difficult to respond to within the context of that community. I think there are always issues that arise within the community based on differences that students and faculty bring to the community, based, again, on the age and the developmental needs of students to push back and really establish a unique identity for themselves. And I feel like within the community, those individual differences can be managed with a lot of the tools that we’ve always used.

 

      The kinds of dialogues that Robin is referring to are dialogues that, internally, campuses have been having for hundreds of years. It’s the free and open exchange of ideas that has built American higher education into the force that it is. I feel like when we’ve got internal differences, internal problems, we have effective tools to respond 90 percent of the time.

 

Hon. Michael Brennan:  Dean, at Columbia, if these issues arose -- you gave an example involving the Christian Legal Society. Was there a more recent example involving The Federalist Society in the last couple years?

 

Dean David Schizer:  So there was, actually. Somewhat different situation, but it also helps to illustrate the point. I’m a big fan of our chapter. I’m one of the small group of faculty or kind of informal faculty advisors to them. They’re very capable.

 

      So just about ten, eight, nine months ago in the wake of January 6th, the chapter was using a group chat to air different views about what had happened. I had occasion later to read the group chat. I was quite impressed. It was very thoughtful. But it turns out that a couple of students who weren’t in the chapter managed to get into the chat by, I suppose, pretending to be someone else. And then they started taking these statements out of context, and posting them on social media, and trying to depict the students in an unfavorable light.

 

      Look, at some level, we as lawyers understand that we’re criticized sometimes, and that’s just part of it and you have to get used to that. At the same time, these were very unfair characterizations of what they’d actually said. And it was sort of heated. So they reached out to me and a couple of others. We met with them. The good news is that the others at the law school sort of agreed that this was really important, that people be able to express what they thought, and that these were not fair characterizations.

 

      So the thing sort of died down, and again, I don’t think you ever read about it. But the point is, and I go back to distinguishing between students and faculty, and I did that before in a different way. If someone wants to criticize me, if someone wants to say what you said is wrong, it’s terrible, etc., okay. Fine. I’m a tenured member of the faculty. People can say what they want.

 

      But if you’re a 24-year-old student with a promising career ahead of you, and all of a sudden, you’re worried that people are going to try to depict you as something you aren’t, it’s incredibly unfair. And it’s important for people to be supportive and try to help people learn from that, but also help people overcome that. Not always easy.

 

Hon. Michael Brennan:  Robin, the Dean’s example brings in social media. And from some of the examples you’ve given, you’ve talked a lot about in-person dialogue or in-person conversations, the green room example you gave. Social media’s got to make this incredibly complicated when you’re talking about those issues.

 

Prof. Robin Fretwell Wilson:  Yeah. We actually have a social media strategy or piece of this. We give a social media engagement prize at the dialogues, so one person, ideally a student, takes the prize, not somebody else. But people who tweet questions, those questions will get pulled and discussed by the panelists. So you could be livestreaming in from Ireland, as we’ve had people do, and that question is read. But the prize actually tries to get people engaged virtually but also in the place.

 

      Part of the problem is people don’t want to ask even a question sometimes, but they feel safe putting it on the Twitter feed for the lecture. And then we can talk about that as a group of panelists. So social media can be used to actually make it safer to have conversation, and it’s not always about not being able to have a conversation.

 

Hon. Michael Brennan:  Rich, we have talked about both internal facing and external facing responses of a corporation. And I think for a lot of people here, what came to mind was the baseball all-star game this summer and whether or not Major League Baseball had had a strategy.

 

      At the same time, it’s got to, obviously, for its own hiring and its own employment, have aspects of a strategy with regard to how to deal with these issues. Is it only the very large corporations or entities like that that are going to have to means to have both an outward and an inward facing strategy? How does that work with regard to entities that are not that large?

 

Richard Bagger:  It’s important to align positioning internally and externally so that an external position can have a really deleterious effect internally on inclusion among employees, upon engagement among employees. Planning ahead, thinking ahead, having a strategy about what’s really important to an organization, what its principles are, and communicating internally to employees becomes very important.

 

      The all-star game -- and I’m thinking about Delta in connection with the Georgia voting law, to me, demonstrates the risk of reacting. And so to say, “Okay, we’ve got to get a statement out there today. We need to be in the media cycle. We need to do this both because of our perception of where are employees are,” or for whatever reason.

 

      And that just increases the risk of getting beyond your skis and being in the position, for example, where, as I understand it, Colorado had more restrictive early voting than Georgia would have had under the new law, or that the airline had hubs in other cities that were at airports in cities and states that had more restrictive voting than Georgia, and not thinking two steps ahead. So I think alignment with principles, consistency in internal and external communication, and thinking a step or two ahead.

 

Hon. Michael Brennan:  Thank you. What we’d like to do now is open the floor up for questions. And specifically I’m going to enter -- I’m going to invoke my judicial prerogative here and ask to ensure that you’re posing a question. Also, we ask for you to give just your affiliation, your name and affiliation, pose your question, and also if you could let us know is this to the full panel or to individual panelists. There may be panelists who want to comment on another panelist’s answer.

 

Roger Pilon:  I’m Roger Pilon from the Cato Institute. Mr. Bagger, as a student of Milton Friedman, I enjoyed your remarks very much. I want to put to you however, the following situation. It’s no more recent than this morning’s Wall Street Journal’s page one, an article about how American investors and corporations are furthering by their actions the interests of Xi Jinping and the Chinese government, which presents the short-term/long-term interest for the corporation. And this isn’t even in corporations alone.

 

      In fact, at universities, the tuition from foreign students, especially Chinese students -- and at Columbia, in fact, the Confucius Institute was also a hot issue there, whether Columbia should keep it or not. So if you would please comment on that. It seems to me a tougher issue than the examples that you gave.

 

Richard Bagger:  Excellent question because I do think it is a tougher example and creates some really challenging questions for companies that are weighing market opportunities in China, but they’re also weighing what’s going to happen to their intellectual property when they’re doing business in China, and are also potentially opening themselves up to, again, some of the hypocrisy examples that have been noted pretty widely. I think these questions about China are really prominent among what management and boards are dealing with.

 

      So is it worth it, what’s the upside, and what are the challenges that they have as global companies?

 

Hon. Michael Brennan:  Let’s go on to the far side. Name, and affiliation, and question.

 

Casey Mattox:  Sure. Casey Mattox. I’m with the Koch Institute and with Americans for Prosperity. My question is, particularly as to academic -- on the academic side. I have a lot of sympathy for universities having to navigate this particular moment where tensions seem to be so high. I think a lot of the conversation can end up being around application of policies. What do we do when warring tribes are coming at one another? The question I have is -- my experience, I’ve litigated against universities before. I was actually co-counsel in CLS v. Martinez. Next time I would ask for a trigger warning before mentioning that case.

 

      But it seems to me that a whole lot of the problems could be resolved, or at least could be lessened, if there as more preparation on the front side. So when you have a lot of universities that have, particularly in public universities, really unconstitutional polices, and they write those policies down, and they go through general counsel, and they get published, and then students respond to a crisis that’s happening on campus using those policies.

 

      I’ll give you one quick example, the Uzuegbunam case the Supreme Court heard earlier this year, Georgia Gwinnett College. That’s a case where the university wrote down and went through multiple levels of review, and they ultimately published a policy that said that no student could disturb the peace and tranquility of another student. So a student then, of course, goes out and starts talking about his faith on a public university campus. Another student complained that their tranquility was disturbed. And the university fought that for multiple years to the Supreme Court trying to defend that policy.

 

      That was a conflict between two students. But if the university had just decided, hey, let’s not create a blatantly unconstitutional policy that’s going to tell someone whenever your tranquility is disturbed, you have right to be able to complain about another student, it could have solved a lot of problems on the front side. So I’m curious why isn’t that happening more? Why aren’t universities more intentionally, deliberately working to make their policies comply with the First Amendment, and would that really help?

 

Dr. Lee Burdette Williams:  Well, I’m not sure I entirely agree entirely with the premise that universities are not working. I think there is a great deal of work being done. It’s an iterative process. Every time there is new case law, I can assure you that institutions are studying it carefully. There are a lot of policies that are, yeah, unconstitutional or really problematic, and over time those have gotten changed.

 

Casey Mattox:  I’ll just point out, FIRE shows that almost 90 percent of schools have policies, written policies, that are inconsistent with the First Amendment.

 

Dr. Lee Burdette Williams:  Again, you can -- I’m not sure I agree with all of the premises and definitions that FIRE uses to identify those, but I know that there are institutions that are constantly reevaluating their policies and making changes. So it’s not what it was ten years ago, and it’s not what it will be in ten years. But as I said, it’s a slow process. Higher ed, it’s turning a battleship with your bare hands. It happens very slowly.

 

Hon. Michael Brennan:  Dean?

 

Dean David Schizer:  I’ll give you a very short lawyer’s answer, which is, obviously, the First Amendment technically doesn’t apply to private universities. Now, I will tell you that when we were confronting our own version of the Martinez case, I was clear both that the First Amendment didn’t technically apply, but that First Amendment values were critically important, and therefore we should act as if it did.

 

      But I guess the second point I would make is that was a 5-4 decision. And the way the Court came out is they said, actually, an “open to all” policy is okay. I would have come out the other way. I know you would have as well. But I think this brings us to a slightly different version of your question, which is how do we balance all these competing interests? And it’s really quite difficult. And I think the part of what you said that I thought was especially compelling is when you said, well, it’s the application of the principles that’s so hard.

 

      And it really is. And just to maybe offer a further thought on that to emphasize what I’m trying to convey, how do we -- this disturbing someone’s tranquility, it’s easy to poke fun at that, to be honest. I think part of what you’re supposed to get at a university is the sense that you believe something, and you can believe it with all your heart, but not everyone does. And that’s a fact of life, and it means that it’s your job to make your case to other people, hopefully in a way that persuades them. But it is also your job to get used to the fact that people aren’t always going to agree. That’s what life is in a vibrant democracy with free speech rights and all the rest.

 

      And so, good. But on the other hand, I wish it was all that simple. My mom was Class of 1959 at Columbia Law School. She was one of 12 women. One of the things that a professor liked to do was to have “ladies day” where the women were kind of on call and subjected to a particularly rigorous inquisition that never applied to the men. Another time, my mother had the experience of offering an answer, “Well, professor, I feel…” And he shut her down said, “Women feel, men think.”

 

      We shouldn’t do that, right? And the answer to that is not, oh well, it’s your job to get used to being treated that way. No. So we want a certain measure of collegiality at the same time. And the point is, how can we as educators and frankly, as a county, because it applies to everybody, how can we learn to be collegial in the way we disagree? And I think that the better we do at that, the better the world is, and maybe the good question that you asked becomes easier to answer.

 

Hon. Michael Brennan:  Robin?

 

Prof. Robin Fretwell Wilson:  Casey, it occurs to me that a lot of times, universities want a very clear policy so that the people who have to decide what happens in this context from this person in this dorm room and their neighbor in the next dorm room, it can be executed on. I, as a lawyer, think you should never have a policy you’re not willing to enforce, so if it’s a dumb policy, that’s probably bad.

 

      But I do think there are interests because the university is a place where people have their home in tranquility. If the guy in the dorm room next to me means I can’t study, that’s a problem. What I think could happen here is exactly the thing that you told me about the other day. We could have just broken the impasse, maybe, by getting these folks to sit in the same room, kind of the Obama, let’s have a beer over here and talk about this, or the dinner discussions that you were talking about.

 

      It’s really unfortunate that that isn’t the way we resolve disputes sometimes, and I think that’s really the hard question. Why isn’t it?

 

Marissa Cohen:  Hi, my name is Marissa Cohen. I’m getting my LLM at Emory University right now. And a question I have goes to the due process and to the discourse that you were talking about. A lot of times in university, I’m seeing that students fail to have a discourse directly with their professors with an issue about a professor. Right away, if something happens in the classroom, they circumvent the professor and they go to the dean or higher up.

 

      But then also, at the same time, there then feels like there’s no due process for the professor. The professor can’t address the person who’s making the claims. We recently had a professor who said the n-word, and his class was immediately drained. All the students didn’t even get to have the next class with him for him to apologize. The class was just canceled. And then he wasn’t able to teach for the rest of the year. And likewise, a lot of students complain now too about the Socratic method because these professors say -- I use she pronouns, but I get called Mister Cohen all of the time. I correct them and move on with my life.

 

      But a lot of students are saying that this is an assault on them. It’s an assault on student identities by having this. And then, again, they circumvent the professor, and now it’s a larger campus issue instead of something that could have been a one-on-one dialogue. So how are there ways that are protecting the professors but are also hearing these student concerns?

 

Dean David Schizer:  I think your question comes from a commendable impulse. And as a member of a faculty, I appreciate you concern for our well-being. I will say though, that there are hierarchies in universities, and it’s a lot to ask for students who know they’re going to be graded by a professor and for students who know that the professor will be in a position to, I don’t want to say embarrass them, but put them on the spot and ask hard questions, and maybe reveal to their classmates that they weren’t quite prepared, it’s a lot to ask for them to have to go to the professor first to say, hey, what you said, I didn’t appreciate that.

 

      Now having said that, it is important for universities not just to prejudge things, but to try to get the full picture. And so there need to be conversations, and I do think that at some point, it can be very healthy for there to be a subsequent meeting where the professor talks about what she or he meant and tries to both reassure students but also maybe to explain why what they did was ok, or whatever it is.

 

      Think about mediating challenges within your family. And I think about the fact that my extended family, we love each other, but we do have disagreements. And sometimes they’re not altogether pleasant, but you have to deal with them. I think it’s that metaphor. If you think about a university that way, then you’re kind of on the right track. Honesty, collegiality, and holding people accountable, you have to do all of those things.

 

Hon. Michael Brennan:  Lee?

 

Dr. Lee Burdette Williams:  Yeah, you’re absolutely right that there are -- there’s a power dynamic that is sometimes really difficult for a student to overcome in wanting to have that kind of conversation.

 

      I do think there is learning happening. Let me use the example of the n-word. I would like to think that people are just going to stop using it, that there have been enough situations that have arisen from even contextualized use of it to perhaps suggest to faculty that they just don’t use the word, or use the phrase that describes the word, or anything. Is there some other way they can get their point across? And I think that’s how change happens.

 

      Nobody wants to be the subject of a story in Inside Higher Ed on a Monday morning because their students have walked out of class. And I think those situations continue to happen because there’s a sort of stubbornness on both sides, like I’m right and I should be able to do this. I should be able to keep someone from disturbing my tranquility.

 

      But I think as Robin said, those conversations, and as David gave the analogy, those conversations within the sense of community or family that can happen can be really instructive. That’s what changes our minds. I have been influenced throughout my entire career by students. Students have changed my heart, my mind, repeatedly over 30 years of my career by having conversations with me and me having conversations with them.

 

      Three students sitting around the table in my office discussing a really difficult situation that’s happened is going to have a lot more impact on me as a leader of the university than 3,000 signatures on a Change.org petition. So how do we get students and faculty and others into those conversations? How do we create that kind of safe environment? And that’s the hard, daily, grinding work of building community and caring about one another in multiple places in multiple ways.

 

Hon. Michael Brennan:  Robin?

 

Prof. Robin Fretwell Wilson:  Well, I’ll just chime in on the same point about power. I do think it is hard to go directly to the faculty member. Your point about “mister” and “miss” is hard. When I started fairly young as a teacher, it just seemed super weird to me to be calling my students, who are almost my age, “mister” and “miss,” and asking them to stand at the microphone when they were -- or not the microphone, but stand when they were speaking in class.

 

      So I just roll with first names. It didn’t always serve me when I was a young teacher because I’d have a faculty member who came in to review my class, and the students were calling me by the first name. They didn’t feel like I’d created the right distance. But I still just roll with first names for that reason.

 

      The pronoun thing is really -- well, and I want to say a word just about the n-word. You know, if somebody used the word “bitch” or, God forbid, the c-word, I would just stop. I couldn’t hear everything they said after that.

 

      And I think that’s what’s happening pedagogically in the classroom. And we can call that triggering. I just can’t see, as Lee said, the value pedagogically of needing to recite this word, just like I wouldn’t use generally the word “bitch” and certainly would not use the c-word. But, in any event, I think there are words like that for us, and we should remember that. As educators, the whole point is I need to be able to talk to you, and you need to be able to hear me. And we contour and context that with the way we’re presenting our material.  I’ll just stop on that point.

 

Hon. Michael Brennan:  Judge, last question.

 

Hon. John Curry:  Okay, thank you. Judge John Curry from Chicago. I really appreciate your input on these collaborative types of ways to try to resolve these conflicts that come up. So this question is more to the two deans and the professor.

 

      Let me pose a rhetorical question. Do you not understand that these instances are really -- that what is going on there is a movement? In other words, there’s cohesiveness to it. It may vary in different ways and reflect different issues, race, gender issues, sexuality, etc., but it is an actual movement, and it’s a movement that has strategies. And to the extent you may calm them down in these instances of collaboration, they’re going to come back again, and so, really, it’s only a tick. Do you not understand that, and that it is very negatively affecting very many universities and colleges across the country already?

 

      And then secondarily, another rhetorical question, wouldn’t you agree that a position taken by the leadership of the University of Chicago some few years ago, making a very strong statement about how the mission of liberal education in the country, and that should be a benchmark to pose when dealing with these issues?

 

      A couple of the failures I’ve seen, the University of Chicago statement was in a way a reaction to my alma mater’s president, President Mort Schapiro of the Northwestern University who published a syndicated column about safe spaces. Well, just last year, that came back to bite him because the safe space students are all protesting on his family lawn at his home day after day, night after night. And my other alma mater, Vanderbilt University, in having an equality position in the university, it resulted in pushing off the Roman Catholic Ministry from the campus, which remains the situation today.

 

      So those are my two questions. Do you not acknowledge it’s a movement; and then secondarily, shouldn’t there be a strong statement made to anchor dealing with it? Thank you.

 

Dean David Schizer:  I appreciate the two excellent points that you made. I would say that first of all, a caveat. I finished being dean in 2014. I think the world has moved a bit since then. I was away from the university. I came back. I could see some of the differences.

 

      Having said that, I think the formula, at least for me, is as follows: rigorous, relentless, almost merciless in ensuring that people can say what they want to say. Free speech is critical. I agree with the University of Chicago’s take on that. At the same time, although we can be relentless and tough about ideas, we should be respectful as people of each other.

 

      And I’ll say, I remember my first year as a law student; first couple of months, get called on. We were given the job of trying to make the case. And I remember pounding the table a couple of times. It wasn’t working. And if you think about the really good lawyers you know and the things that you’ve learned over time, that’s not the way to persuade people. And yelling at people and calling them names is not the way to persuade people.

 

      It’s thoughtfulness. It’s recognizing what they might think originally and trying to move them. And this is what we need to teach people to do. I feel pretty good about the -- and I hate the word “safe space,” and I’m not a fan of the concept as I think it’s sometimes described. But a classroom needs to be a place where people feel personally respected and people free to think what they want to think and explore ideas. And there should be no name calling. And we should find ways to do that that are respectful and, heaven forbid, even fun.

 

      And if we do that well, then I think a lot of these issues melt away because we continue to be committed, as we have to be, to free expression and to critical examination of ideas because without that what are we doing to begin with?

 

Hon. Michael Brennan:  Robin, a last hopeful word.

 

Prof. Robin Fretwell Wilson:  [Laughter] Judge, that was a tough question. Okay, so yeah, it may be a movement. This is problem of elites. Our whole culture is captured by elites. And, you know, the point about our students is they don’t buy into that movement, by and large. They just want to be respectful of each other, and they actually found ways to do that. We should hand over the keys to them, bottle whatever their insights are, and send it to the rest of the world.

 

      At some point, we have to drown out the elites. And that’s a relentless process, to use the dean’s word. And I think it’s one that we just have to stay vigilant about and actually be part of, lift these guys’ voices up because they are tomorrow’s leaders, and they don’t buy in to all of this fracturing.

 

Hon. Michael Brennan:  Well, thanks to all of our speakers. Please join me in thanking them. I’m to remind you that the book signings are going on in the mezzanine until 11:15. Enjoy the rest of the day.

11:00 a.m. - 12:30 p.m.
Private Power and Eminent Domain

2021 National Lawyers Convention

Topics: Environmental & Energy Law • Fourth Amendment • Property Law
District Room (Lower Level)
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". This panel discussed "Private Power and Eminent Domain."

Since the Founding, the extent to which the public power of eminent domain may be used by, or for the benefit of, private parties, has been a subject of intense debate. Time and time again, the U.S. Supreme Court has considered cases testing the Fifth Amendment’s guarantee that "private property [shall not] be taken for public use, without just compensation." U.S. Const., amend. V. Over 15 years ago, in the landmark case of Kelo v. New London, the Court upheld the exercise of eminent domain to transfer private property from private individuals to other private entities. The decision – controversial from the outset – prompted deeper questions about the extent to which the Constitution allows for eminent domain for "public purposes" even where the action advances the economic interests of private parties over others. But how lasting is this precedent? In a recent dissent from the denial of certiorari in Eychaner v. Chicago, three justices voted to revisit Kelo, two of them expressly calling to overrule it. Since Kelo, the U.S. Supreme Court has continued to review eminent domain and other cases, raising significant property rights concerns – often involving complex questions at the intersection of private and public power.

Most recently, in the 2020-2021 term, the U.S. Supreme Court heard three cases dealing with the intersection of private and public power in the eminent domain context: 

  • Cedar Point Nursery v. Hassid, where the Court held that a state regulation allowing union organizers to enter private property constituted a taking requiring just compensation;
  • PennEast Pipeline v. New Jersey, where the Court dealt with the legality of the Federal Energy Regulatory Commission’s (FERC) delegation of eminent domain powers to a private pipeline company; and
  • Pakdel v. San Francisco, where the Court continued to reduce procedural hurdles for inverse condemnation claims (expanding upon a prior decision just two years ago in Knick v. Township of Scott). 

For this panel, a distinguished lineup of speakers will discuss the intersection between public and private power in the eminent domain context. The panel will focus on eminent domain’s history, the implications of originalism for understanding the extent and use of that power, recent Supreme Court rulings on these topics, and the likely subjects and issues for review in future cases, among other things. As part of this discussion, the panel will illuminate the constitutional, legal, economic, and philosophic principles and considerations that help to inform perspectives on this important topic of public versus private power in the realm of property rights.

Featuring:

  • Hon. Paul D. Clement, Partner, Kirkland & Ellis LLP; Former Solicitor General, U.S. Department of Justice
  • Prof. Roderick Hills, William T. Comfort, III Professor of Law, New York University School of Law
  • Mr. Robert J. McNamara, Senior Attorney, Institute for Justice
  • Mr. Joshua Thompson, Director of Legal Operations, Pacific Legal Foundation
  • Moderator: Hon. Jennifer Walker Elrod, U.S. Court of Appeals, Fifth Circuit

Speakers

Event Transcript

Jeff Wood:  Good morning. Welcome to day three of The Federalist Society National Lawyers Convention. My name is Jeff Wood. I’m a partner in the Washington, D.C. office of Baker Botts. I currently serve as the chair of The Federalist Society Environmental and Property Rights Practice Group Executive Committee. It’s an honor to be in that role. Our executive committee is comprised of environmental and property rights lawyers from around the country. We hold events monthly, sometimes several a month, and produce publications on a wide range of environmental and property rights topics at the intersection of constitutional governance and the rule of law.

 

Our executive committee is honored to have helped prepare and plan for this morning’s panel discussion entitled “Private Power and Eminent Domain.” I’d like to take a moment to recognize a few specific members of our executive committee who helped lead the effort to put this morning’s panel together; many of them are here today—Stephanie Maloney, Victoria Seal (sp), Tony Francois, Josh Baker, John Irving, Adam Griffin, and Garrett Kral. So thank you all for your effort in putting this together. Our main mission at the Executive Committee for the Environmental and Property Rights Practice Group is to host robust debates with leading scholars from different viewpoints on a wide range of issues, and today is no exception.

 

With regard to the mask mandate, one final note, we’re required to mention that per D.C. regulations, please wear a mask unless you are eating or drinking.

 

So with that, it’s my privilege to be able to introduce our moderator for today’s panel, Judge Jennifer Walker Elrod of the United States Court of Appeals for the Fifth Circuit. Judge Elrod is a graduate of Baylor University and Harvard Law School and has served on the Fifth Circuit since 2007, after appointment by fellow Texan, President George W. Bush. In our audience this morning, I know we have at least one of your former clerks, another fellow Texan, Corrine Snow. Welcome Corinne, and perhaps others, too, out there. So Judge, thank you for your service to our nation, and thank you for moderating today’s discussion. Thank you.

 

Hon. Jennifer Walker Elrod:  Thank you so much for the gracious introduction, and thank you to all of you for being here today with us. I know that you are anxious to talk about these important areas of intersection between private and public power in the eminent domain context. The materials say that since the founding, the extent to which the public power of eminent domain may be used by or for the benefit of private parties has been a subject of intense debate. I think that Judge Jones put it well yesterday, that that was a subject of debate long, long before the founding of our country, maybe in the Justinian Period, of whether you could take from A to give to B. But time and time, our Supreme Court has considered the cases testing the Fifth Amendment’s guarantee that private property shall not be taken for public use without just compensation. Fifteen years ago, of course, we had the landmark case of Kelo v. New London. We’ve had a recent dissent from the denial of cert in Eychaner v. Chicago. We’ve had the Cedar Point Nursery case. We’ve had the PennEast case. This area is hoppin’, and we have a very distinguished panel to consider this hopping area.

 

We have Mr. Robert J. McNamara, who serves as a senior attorney with the Institute for Justice. He joined the Institute in 2006. And his work has resulted in court victories for property owners fighting eminent domain abuse, tour guides fighting unconstitutional restrictions on their speech, taxi drivers seeking the right to own their own businesses, and many others. Welcome, Bob, to our panel.

 

Next, we have the Honorable Paul D. Clement of Kirkland & Ellis. And he has served as the 43rd Solicitor General of the United States from June 2005 until June 2008. He has argued over 100 cases before the United States Supreme Court, including McConnell v. FEC, Tennessee v. Lane, United States v. Booker, Epic Systems Corp v. Lewis, and the list goes on and on. We were both in section three in Harvard Law School in our class together. And he was the really smart one.

 

Professor Roderick Hills is the William T. Comfort, III Professor of Law at NYU School of Law. He teaches and writes in a variety of public law areas—constitutional laws with an emphasis on doctrines governing federalism, local government law, land use regulation jurisdiction, and conflicts of law, as well as education law. His interest focuses on a common focus on the problems and promise of decentralization. The United States, in his view, has one of the most decentralized systems of regulation in the world, placing enormous power over land, schools, assistance to the needy, and many other topics under the control of sub-national governments ranging from school districts to states. We look forward to hearing from Professor Hills in his work involving decentralized legal regimes with an eye towards how to balance these costs and benefits. Thank you, Professor Hills, for being with us today.

 

And last, but certainly not least, we have Mr. Joshua Thompson, Director of Legal Operations for the Pacific Legal Foundation. Joshua Thompson joined PLF as an attorney in 2007, and his litigation practices covered all PLF subject areas with a particular focus on equality and opportunity. Joshua argued PLF’s 13th case before the United States Supreme Court, Cedar Point Nursery v. Hassid, where the Court ruled that a California regulation that allowed union organizers onto private property violated the Fifth Amendment’s taking clause. We look forward to hearing you discussing this case and others, Joshua. Thank you for being with us today.

 

It’s my understanding that Bob is going to take the first crack at this very interesting subject matter. You know, when I was a lawyer, I used to represent the electric company in my town, and sometimes we would have -- we had takings powers, but sometimes we would be the entity that was taking from because the toll roads would want to come in and take our easements and our land. We would have to negotiate all that. So I know that this is a very complicated and interesting subject matter. So please lead us off and teach us what you know.

 

Robert J. McNamara:  Well, thank you very much, Your Honor. It is a complicated and interesting subject matter, and thanks to all of you for coming to the property rights panel here in the basement, which is where property rights frequently find themselves.

 

[Laughter]

 

So I thought a useful way to frame today’s discussion is to very briefly just talk about government power itself and of the different types of government power. I think it’s very common when we talk about federal power to talk about the different powers the government might be exercising. Right? Congress may be using the commerce power or the taxing power, but an original understanding of government power actually commonly talked about government power that way, that government as a whole was made up of a bundle of discrete powers, particularly, as relevant here, the police power, which was the government’s power to regulate behavior to protect the general public health and safety, and the eminent domain power, which was the government’s power to take private property for a public use. And that’s a distinction that has, in many ways, fallen out of modern law.

 

When we’re talking about government power, and especially state and local government power, we tend to just say, “The government has the police power, and the police power is the government’s general power to do stuff. And should the government decide to do stuff to you, then God have mercy on your soul.” And I think that’s incorrect, and I think that’s incorrect in a way that illuminates a lot of the modern controversies we’re having, both because sometimes the police power can be used in ways that really are an exercise of the eminent domain power and sometimes the eminent domain power’s historical limits are ignored because it’s being treated as if it’s just the police power. And I think it makes a certain amount of intuitive sense that there’s a difference between the government’s ability to regulate behavior and the government’s ability to take away our stuff. A rule that says I’m not allowed to throw my water bottle at Josh is a reasonable rule that has to do with the general decorum of the panel. A rule that says I’m not allowed to have my water bottle at all because someone else is thirstier than I am is, perhaps, a different sort of rule, a different sort of power that we might want to put different limits on.

 

And we see this distinction come up in a lot of areas, whether it’s overreaching exercises of the police power, where the government may say, “If you want to be in the business of selling raisins, you have to give us some of your raisins for free.” Or the government might say, “If you want to be in the business of publishing books, you have to give us some of your books for free,” which is also a thing the government does. Or the government might say, “If you want to be in the business of growing crops, you have to give us an easement over your farmland,” which we will hear more about later. But at the same time, there are actual avowed exercises of the eminent domain power that are all too often treated as if they’re purely exercises of the police power, which bring us to what remains, for my money, the largest controversy in eminent domain and property law today, which is the continuing viability of the Supreme Court’s decision in Kelo v. City of New London. And fundamentally, the error that the Kelo decision made—and I think Justice Stevens has subsequently admitted to this—is that in its attempt to trace the historical roots of the eminent domain power, the Kelo majority is relying on 19th century cases that aren’t about the eminent domain power—that are about the police power.

 

And the limitation of eminent domain for public use was there for a reason because the eminent domain power, the power to completely divest someone of their property, is, in fact, a more troublesome power. It needs to be more thoroughly cabined. And I think what we’ve seen in the wake of Kelo is that there is a broad recognition that this is true. Some of this has come from the Court itself. As Judge Elrod noted, there was a dissental last term, a three Justice dissental in Eychaner, calling for the Court to affirmatively rethink Kelo. But some of it is actually what you see in state high courts. State supreme court after state supreme court has rejected the Kelo holding, most recently the Iowa Supreme Court.

 

And I think what’s most striking about the Iowa opinion is, you frequently see state court opinions that say, “Well, our history is different from the federal history, and so we’re adopting a different view of our state constitution.” And what the Iowa court really says is just, “Kelo’s wrong. On the logic of Kelo, you could take any Motel 6 and replace it with a Hilton, and we’re not going to allow that to happen in this state because that means the public use clause means nothing.” And I can’t think of another opinion that that has been so routinely and directly rejected by state courts simply on the grounds of its own internal logic, which, I think, means that there’s a real prospect for a reconsideration of Kelo at the federal level.

 

But the other thing that is a growing issue in eminent domain law is the use of eminent domain as a stand-in for the police power, as evidenced by a case IJ is litigating right now on Long Island where a small family business wanted to open a hardware store and faced the kind of barriers that small family businesses frequently face. The city wouldn't give them a permit. The city wouldn't give them the zoning permissions they needed. And the family fought through all of this. They wanted to build their hardware store. They owned their land. And finally, they filed a lawsuit in state court saying that the city was required to give them their permit. As soon as they prevailed in a motion to dismiss in that lawsuit, the city announced that actually, what they really wanted on that spot was a park, and they were going to use eminent domain to build what they call a passive park. A passive park is a vacant lot.

 

[Laughter]

 

And there have been a number of state high courts that have said, “No. This is a pretextual use of eminent domain. It’s not a public use simply to destroy something, simply to take away something you don’t want. A public use is actually something you want to do, to use for the public,” which is an issue that is underdeveloped in federal constitutional law, but I think goes, as a lot of the rest of this discussion is going to go to, to this division between the eminent domain power, which is for the public use and the police power, which is regulation for the general public health and safety. I think that dichotomy has fallen out of a lot of our modern discussions, and I think the absence of that dichotomy is why we so frequently see regulators and government officials running up against what the courts are actually going to allow under the Constitution. I have promised to keep this short because I think the most interesting part of these panels are always the discussion and the Q and A, so I will leave it there, and I very much look forward to hearing from my co-panelists.

 

 Joshua P. Thompson:  Thank you, Robert. I think that leads well into my discussion. I want to just first thank The Federalist Society for having me here today. I have a long history with The Federalist Society, and I think it ties in well to what Robert was talking about. My first legal job ever was a clerk, a 1L clerk, at The Federalist Society. And I think it was the first legal clerk that they ever had, so I got there, and Peter Redpath really didn’t know what to do with me, so he had me summarize Supreme Court opinions for that first year. And that was the year that Kelo came out, so I actually summarized it, and it was probably nonsensical, but that was my first legal job. But I’m here to talk about Cedar Point Nursery, PLF’s 13th Supreme Court victory, my first case that I argued before the Supreme Court, which I think makes me the most distinguished lawyer from Wisconsin, ever. Is that right?

 

[Laughter]

 

Hon. Paul D. Clement:  One or two. I don't know somewhere there. Yeah.

 

Joshua P. Thompson:  So Cedar Point Nursery involved a California regulation that allowed union activists to come on to private property for three hours a day, 120 days out of the year. And we challenged this as a physical taking under the Fifth Amendment. But to understand exactly what this regulation allowed, I do have a 15-second clip that I hope is ready to run that demonstrates what the access regulations allowed on our client’s property, Cedar Point Nursery. [Pause, waiting for video clip] No one had it. Okay. Well, anyway, you can visit that video on PLF’s website—Pacific Legal Foundation. Essentially, what happened is our clients had a northern California nursery, had no idea that this regulation existed. Most of the union activity in California is in the Central Valley. But one cold October morning, in their six-week window to harvest, the union stormed onto the property at 5:00 in the morning, with bullhorns screaming down the line, and they didn’t know what the hell was going on. They woke up our client, who was sleeping at the time, and he said, “Well, call the police. Get the police out there.” So the police come out, and they said, “I’m sorry, we can’t kick them off. If we kick them off, we would have to arrest you because they are legally allowed to come onto your property.”

 

So we challenged this regulation as a taking under the Fifth Amendment. We argued in our complaint and framed the issue as this is akin to taking an easement, and of course, if a government takes an easement, it would be routine, requiring compensation. The government defended on the grounds that, “Ah, maybe it’s an easement, maybe it’s not an easement, but it’s limited in time.” Easements, to require compensation, require 24/7 access. This only requires access, or only permits access, three hours a day, 120 days out of the year, so therefore, it can’t be a per se taking. It’s merely a regulation on use and therefore should be governed under Penn Central’s multi-factor analysis. And that issue won the day at the district court, won the day at the Ninth Circuit. We went en banc. We got an eight-judge dissent, but it was a dissent, and we had to petition the Supreme Court. We did frame the issue, again, as an easement being taken from our clients. And again, the government said, “Fine. It’s an easement, but it’s not a 24/7 easement.”

 

The Supreme Court grants cert, but now with the light of the Supreme Court looking at this case, it’s clear that “Well, this isn’t exactly an easement. Right? It’s not transferrable. It’s not alienable. It’s not recorded on your property.” And so, now, for the first time, California’s really leaning into the idea that “Yeah. It’s not an easement. If it were an easement we would have to pay, but it’s not an easement, so we don’t have to pay.” But fortunately for us, there’s this history of Supreme Court precedent from Causby and Portsmouth Harbor that uses language like servitudes and easements that these aren’t easements as we understand easements—recordable, alienable, transferrable—but they do deny the right to exclude in a meaningful way. They allow entry onto private property. And so we, I think, really leaned into that language of denying the right to exclude. And the Supreme Court, of course, in a 6-3 opinion, ruled in our favor that this was a Fifth Amendment per se taking, and we were entitled to compensation. Of course, we didn’t seek compensation, but we got an injunction.

 

I think the Cedar Point Nursery did two things to clear up property law. I think the first is that there was this understanding from Lingle that was sort of intentioned with Tahoe-Sierra of whether physical takings, physical invasions, were a subset of regulatory takings. Lingle said, “Yes, it’s a subset.” Tahoe-Sierra says, “No, they sort of stand outside of the regulatory taking framework, and they are more akin to eminent domain because this is the government actually taking access to your property, denying you the right to exclude.” And I think Cedar Point Nursery pretty much sides with Tahoe-Sierra, which is what we had argued, strategically because the Chief Justice had argued that case.

 

[Laughter]

 

And the second thing that I think that Cedar Point clears up is, Loretto. Loretto is the cable box of New York. The government really relied on Loretto. We both relied on Loretto. They had argued Loretto demonstrates that it has to be permanent, continuous on your property. That didn’t really bother us because we could say this regulation is always on their property. No matter what day of the year, this regulation is infringing on their property rights. It may not be that access is being taken at that moment, but the regulation exists. But nevertheless, we did want to emphasize more so that it was the right to exclude that was being denied and that it didn’t matter if the right to exclude was limited in time. After all, the Nolan Court had held that there aren’t people going to and fro in front of Nolan’s Beach. Nobody’s stationed in front of their property 24/7. It’s the right of access that’s being denied, and that right merits compensation.

 

The Supreme Court ruled in our favor. I think the holding of Cedar Point Nursery isn’t obvious. I think the best formulation of it is that any denial of the right to exclude merits compensation. Pretty easy. But baked within the right to exclude is four exceptions. I think these four exceptions are what are going to mark most of the litigation of Cedar Point going forward. And I think there are some things that are clear. If the government wants to take a daylight easement across your beachfront property, that would violate Cedar Point. We had a case, Knick v. Township of Scott, where the government had allowed the public to come on to search for Revolutionary War gravestones. I think that clearly violates Cedar Point. But the four exceptions to the right to exclude recognized by Cedar Point are, first, open to the general public. This is PruneYard; this is why we actually got into this case. We were looking for a case to overrule PruneYard, but the case went in a different direction, but PruneYard remains good law. If the business opens itself to the general public, it is voluntarily giving up the right to exclude, so any government regulation that denies the right to exclude, it’s not denying the right to exclude because you’ve already given it up.

 

The second exception are torts—so mere trespasses. Imagine if a government utility company comes to service the telephone pole and they accidentally or maybe purposefully park on your lawn, that’s not a taking. That’s not denying you the right to exclude—at most, it’s a tort. Maybe it’s a non-compensable tort, but it’s not denying you your property right. There will be litigation over repeated trespasses when they rise to the level of a taking and when it’s just mere trespasses, but that will bear itself off in future litigation.

 

The third exception is background principles of property law. You hold your property subject to certain background principles. One of those principles is that if the government comes onto your property with a valid warrant, you cannot kick them out. That’s not a taking of your property right when the government searches your property. It is inherent in your property right that if they have a valid warrant, that they can come on there. Now, maybe you have a valid Fourth Amendment claim, but it’s not taking your property right.

 

And the final exception is conditions. The government can condition your right to exclude in exchange for a government benefit. So if you want to open a pharmaceutical company -- this is according to the case law – is, at least, a dangerous chemical that you don’t have the right to trade in commerce without a government benefit. They can create inspection regimes for your pharmaceutical company, denying you the right to exclude in exchange for the benefit of being able to trade pharmaceuticals in commerce. So I think those four exceptions will be where Cedar Point goes forward. I do want to say one last bit. When I was getting on the plane to come here -- as a public interest lawyer we owe all of our work to our great clients. We spend a lot of time finding our clients. I got the unfortunate news that the owner of Cedar Point Nursery passed away on Sunday. Thank you.

 

Prof. Roderick Hills:  Does this work? Oh, great. It’s great to be here. And one of the reasons it’s great to be here is there are great lawyers who come here. We law professors don’t get to mix with lawyers as much as I like. Josh is a great lawyer. And so, he can tell you how these cases come to be in a way that a law professor who’s not litigating them really can’t. So, Josh, that’s great. And great lawyers care about their clients, too, in a way that law professors don’t because they don’t have clients. So I’m always cast at these FedSoc events as the guy who disagrees. I’m the official debate guy. And so, I’m going to be disagreeable, and my big disagreement is going to be whether federal constitutional takings will ever be a growth industry. My claim is it probably never will be. Why? Well, because constitutional takings litigation is sort of like a land war in Asia; it’s a quagmire.

 

[Laughter]

 

Right? We’ve got a thousand federal district judges, and they’ve got to supervise literally hundreds of thousands of complex, fact-intensive decisions about rent control, sub-divisions, zoning and conditional use permits. No way that tiny little force of commandos is going to be able to hold that terrain.

 

And so, whenever the Supreme Court gets involved in takings, here’s what happens. They announce a brilliant new rule in the '80s, like Lucas, and then they slowly retreat with the denominator. Right? They announce a brilliant new rule, like Loretto. “You can’t permanently physically occupy,” and it turns out there’s a ton of conditions that means the federal courts back off. So what I want to talk about today is why I think Loretto and Cedar Point Nursery doesn’t have very many legs. I want to talk about that fourth condition that Josh just mentioned that conditions on a government benefit. And I want to use the case study of rent control to explain why Loretto/Cedar Point Nursery will probably not be a great vehicle for undermining rent control.

 

Now, the reason why this is timely is there are literally five cases pending in federal district court trying to apply Cedar Point Nursery/Loretto to New York’s new 2019 rent control regulations. And boy, there’s never been a better time to do this because New York State’s 2019 rent-control regulations are absolutely crazy.

 

[Laughter]

 

So if you’re going to strike down rent control, this is a great time to do it. And we’ve got a great precedent from Josh to do it with. Why? Well, rent control seems to give a third party permanent physical occupation of somebody else's land, and New York has just made it even more permanent. So what I want to talk about quickly is how these rent control regulations work, why they seem to violate Cedar Point and Yee v. City of Escondido, which is the 1992 case that governs this area, and why these cases are totally failing. Then I’m going to end with a few hints as to why you might make them a little more successful if you made them narrower. But just keep in mind, land war in Asia—unlikely that a federal court will want to get too deep into this area.

 

So what do the new rent control regulations do? They essentially make it very difficult to decontrol units. Typically, rent control is limited by the fact that a landlord can remove his unit from the rent-controlled market through a condo conversion. Basically, what happens is they say, “Great. We’re not going to rent anymore. We’re going to get out of the rental business.” And what New York has said is, “That’s going to be very difficult,” through rules like getting rid of what’s called luxury decontrol, very severe limits on a landlord reoccupying a unit for personal use—if you actually want to say, “I want to live there,” you can only do it for a year, and you have to show necessity—and a new rule on condo conversion that makes it very hard to convert a six-unit building to condos. You need 51 percent of the tenants to agree. As my land-use lawyer friends say, “Good luck with that.”

 

So it looks like this is a permanent physical occupation. If you’re a landlord, you’re going to have to stay in the landlord business no matter what. If your tenant dies, you can’t convert it to a condo unless everybody else in the building pretty much agrees. Seems to violate permanent physical occupation of Cedar Point. And in particular, it seems to allow you to get around Yee v. City of Escondido. This is a 1992 case in which the Supreme Court upheld a California rent control rule on mobile home pads. But they said, “The reason why we’re upholding this is, it’s a facial challenge, and you haven’t shown that the landlord must,” quote, “refrain in perpetuity from terminating the tenancy.” Now, it looks like you can show it’s impossible to terminate a tenancy. If you’re in the rent-control business in a building that was built before 1974, that’s where rent stabilization governance in New York—pre-1974 buildings -- no way you can get rid of tenants. If the tenant dies, you’ve got to find a new one, or you could just leave the place vacant, in which case you’re violating Lucas—no economic benefit. Right?

 

So this looks like a great possibility for a challenge. And guess what? The Supreme Court even dropped a hint in that eviction moratorium case from the CDC. The Supreme Court said, “Many landlords have modest means and preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership, the right to exclude,” citing Loretto. So doesn’t this look like the Supreme Court’s basically begging litigators to challenge rent control? However, there are five cases that have been brought in New York federal court, Eastern District of New York, and every one of them have lost at the district level. They’re before the Second Circuit now, but I predict they’ll lose there, too. Why? Facial challenge. A facial challenge to rent control will never succeed because it essentially means the Court’s going to have to take a position on price controls, and price controls include minimum wage laws, utility regulations, a variety of rules where the Court just doesn’t want to get involved. They might think they’re inefficient; they’re right. They might think they’re dumb; they’re right. But that doesn’t mean the Supreme Court wants to be the supreme czar of the economy, so unless you have an exit strategy, where you can say, “Look, you don’t have to get rid of all price control; indeed, you don’t have to get rid of all rent control,” there’s no way that the Second Circuit will want to stick its foot in this cow pie.

 

Now, I want to explain why that might make sense. I want to defend that. That position is defensible on the grounds that the place you should be bringing these cases is in state court, under state constitutions. And you might say, “Why? If the feds can’t do it, why can the states do a better job?” There’s more of them. State supreme courts are elected. They feel they have a greater popular mandate to get involved in complex policy. There are literally hundreds of state court judges for every federal court judge. They can get involved in land use policy. They can review these things through mandamus procedures or certiorari procedures. Third, state constitutions are easy to amend. And so, if they get it wrong, the people can come in and correct them.

 

And so, it’s really a much better idea, I think, to focus on developing state constitutional law, state-by-state, rather than try to go to the feds and say, “Try to police this myriad of economic regulations.” However, I promised you I would suggest a strategy that a lawyer, a smart lawyer who knows how to develop a case, might bring in federal court. As applied, find a specific plaintiff and try to find a plaintiff who’s being barred from reoccupying in their own unit. I suggest, say, I don't know, Hasidic landlord in Williamsburg who wants to bring his family into a six-unit building. Right? “Sorry. You can’t reoccupy the unit.” That kind of as-applied case highlights a case where somebody has been perpetually barred from exercising their right to exclude. That sort of case might win, but that means that you have to wait a long time for the right plaintiff. I think one of the reasons why Kato and a lot of these great litigation houses jump in with facial challenges is they want to get started right away. But that means they have a dog of a case because it means they’re inviting the Court to participate in a land war in Asia without an exit strategy. We know from this summer where that leads you. Okay, that’s all.

 

Hon. Paul D. Clement:  Delighted to be with the judge and with my fellow panelists. I think the reason that I’m here talking to you about property rights and not upstairs talking about the Second Amendment is because one of the cases that I argued recently in the Supreme Court was a case called PennEast. And the issue in PennEast was the circumstances in which, when the federal government delegates its eminent domain authority to a private entity, whether the private entity can then exercise that eminent domain authority, vis-a-vis state property. And the Supreme Court, by a 5-4 vote, with a relatively interesting lineup of justices, said that there wasn’t an Eleventh Amendment problem with that lawsuit, and so the answer is yes. The federal government can delegate its eminent domain authority to a private entity, and then that private entity can exercise the eminent domain authority, much the way that the judge was talking about her client back in the day as a utility exercising the eminent domain authority, and they can do that against all forms of property owners, effectively, including state property owners.

 

So most of the debate in the case, frankly, is about federalism and Eleventh Amendment issues. If there are questions about that, happy to talk about that in the Q and A, but since this is really more of a property rights panel than a federalism panel, I think I’ll skip to what I think are the interesting implications from that, and like most litigators, I want to make three points.

 

[Laughter]

 

The first point, and really the most central point, is I think in thinking about the question of whether it’s okay for the government to delegate its eminent domain power to a third party, a private party, I think it’s very important to think about that issue separately from the Kelo question and whether the condemnation is for a public use or a public purpose, depending on whether you’re reading texts or Supreme Court cases. But those are really two fundamentally different issues, and they always have been different issues.

 

And so, to prove that they’re not just different, but they’ve always been different, I’ve brought a prop; I brought a treatise. I’ve brought Professor Cooley’s treatise on Constitutional limits from 1868. This is a favorite treatise of Justice Scalia and others because it gives you a pretty good snapshot of the way that courts were thinking about a lot of constitutional issues right around the time of the adoption of the reconstruction amendments, so contemporaneously with the ratification of the Fourteenth Amendment. It’s in the public domain, so you can get it online. I don’t get any royalties, but I would invite everybody to pick up a copy of Cooley’s treatise because it’s one of the best things written since the Federalist Papers.

 

There’s three quick passages I’m going to read. The first does two things, for me anyways. It captures the idea that the public use question, the Kelo question, has always been a hard one, and there’s always been an understanding, though, that there are limits, judicially enforceable limits, on taking property from one person and giving it to another, not for a public use. The other thing it does, at least for me is, there’s a tendency when you come across a bad idea, at least a bad idea in my view -- like, somebody can take my property and give it to another simply because, in my possession, the government has deemed property blighted, that seems like a dangerous notion. And a lot of times, when you come across a dangerous notion in an opinion written by the Supreme Court in, say, the 1960s, you tend to associate it as being a new bad idea. This passage shows that that idea was actually live and a bad idea in 1868 as well.

 

So in describing this, Cooley says, and I’ll quote -- talking about the various arguments you can make for public benefit takings.

 

It may be for the public benefit that all the wild lands in the State be improved and cultivated, all the lowlands drained, all the unsightly places beautified, all dilapidated buildings replaced by new; because all these things tend to give an aspect of beauty, thrift, and comfort to the country, and thereby [to] invite settlement, increase the value of lands and gratify the public taste; but the common law has never sanctioned an appropriation of property based on these considerations alone; [and] any such appropriation must therefore be held to be forbidden by our constitutions.

 

Plural, state and federal. So back in 1868 the idea of just taking somebody’s property, not for a public use, but just because, “You know what? I, as the government, think it’s more valuable in the hands of another person than the one who currently owns it,” has never been accepted as something that’s routine or unproblematic, and certainly subject to constitutional limits.

 

Now, at the same time, three pages later in his treatise, Cooley separately addresses the question of whether the eminent domain power can be delegated. And here, he thinks there’s not much of an issue. Says, “It has long been settled that it is not essential that the taking should be to or by the state itself if by any other agency in the opinion of the legislature the use can be made equally effectual for the public benefit.” And then he follows up on that a page later and says,

 

If the legislature reflecting the public sentiment, decides that the general benefit is better promoted by the construction of infrastructure, through individuals or corporations, it would clearly be pressing a constitutional maxim to an absurd extreme if it were to be held that the public necessity should only be provided for in a way which is least consistent with the public interest, only by the state itself.

 

So right back in 1868, there’s this clear distinction.

 

Another great treatise I would highly recommend and is also in the public domain is a treatise on eminent domain law written by John Lewis in 1888. This is the bible for eminent domain law in the 19th century. And it goes into detail on all sorts of issues that probably Josh and Bob have thought through, but most people, even if they thought deeply about eminent domain power, haven’t thought about how the courts administer it, whether there was a right to a jury, what do you do if you have an eminent domain taking and then the entity that took it goes bankrupt or decides to get into a different business, how do you reclaim property that’s been taken. He goes through all of this by surveying the cases in 1888 that have been decided up until that point under the state constitutions, and he says whether the taking is done by the state itself or the power is delegated to a third party, a corporation typically formed for the purpose, is an immaterial consideration.

 

And the third and best source for the idea that these two things are different is, Justice Thomas’s Kelo dissent because in that dissent, he has to wrestle with the idea that there is a long history of delegating authority to -- first, the Mill Acts are the granddaddy of all of this, and then there are turnpikes, and then there are railroads. And a lot of the takings law in this country was developed in the context of those infrastructure projects. And most of them, frankly, were infrastructure projects that were administered by private corporations, often created just for that purpose. And then they were the ones exercising the eminent domain authority.

 

My basic point is, I think if you are skeptical about the majority opinion in Kelo, I wouldn't have that skepticism translate over to the idea of having skepticism that just because the power is being delegated to a third party, or just because the taking has the form of taking property from one person and giving it to another, that alone doesn’t say, “Ah. Well, there, it must be a private use, not a public use.” You have to dig deeper and get to the next level of the public use -- happy to talk about that later. I think there are plenty of ways to try to develop the jurisprudence that says public use has a distinct meaning from public purpose. The classic delegations to private companies to build things that are not just for the public use but are essentially going to be open to all of the public because the entity that took them is going to operate as a common carrier—classic example with things like turnpikes and railroads—those kind of situations, I think, are easy to justify as a public use. I think Justice Thomas would say they’re a public use even though it’s a delegation to a private party. So the first point is just those are two very different things.

 

The second thing is conservatives should actually like delegations to private corporations to exercise the eminent domain authority because the alternative was to just make the state bigger. Historically -- if you put your head back to the 19th century or the late 18th century -- the federal government had much fewer people in it than it does now. You had a very skinny federal government, and so the idea that every time the federal government might develop some need to build a bridge across to link two states, or a highway, or a turnpike, or even -- there’s some very interesting old Supreme Court cases about the takings that were involved in creating the canal in Alexandria or highways in D.C. And in all of those contexts, the alternative for the state was, “We could make the state bigger. We could run all the highways ourselves. We could run the turnpike or the canal ourselves, or we could delegate it to somebody from private industry who actually knows how to do this thing.” And ultimately, I think most of the judgments that were made in the early republic or delegated to somebody who knows how to do this thing. The benefit of that is we don’t all the sudden have a national department of turnpikes and a much bigger government. Again, I just want to try to defang the notion that there’s some problem with delegating the eminent domain power.

 

And the third point is pretty tangential to all of the discussion we’ve had, but I have to say it because I feel it deeply. So the PennEast case, we won this great 5-4 victory for the Pipeline Company, which meant that they could clear the hurdle that New Jersey was trying to impose for the building of the pipeline. But what happened seven months later, nine months later, they decided they weren’t going to build this part of the pipeline through New Jersey because there were 16 other hurdles that they had to clear, including the New Jersey Department of Environment giving them the right permits to do this. And about three years ago I had another case where I represented pipeline—the Atlantic Coast Pipeline. That case presented the fascinating question of whether you could essentially build a pipeline under the Appalachian Trail or whether the Appalachian Trail was a barrier to pipeline development, which would be a problem because the Appalachian Trail’s over 2,000 miles long. The Fourth Circuit, in its wisdom, though, said, “Yep. That’s a barrier to pipeline development. You can’t really do that.” And the Supreme Court, 9-0, reversed. Then about six months later, the pipeline company abandoned the pipeline through that property.

 

Now, look, I’m happy. They paid my bills in both cases. So I’m reasonably happy, but my takeaway from this is there’s something fundamentally wrong with the approval process for pipelines. And it just doesn’t make sense. If we’re going to have pipelines, which I think we should, but if we’re going to have them, it ought to be possible to get the approval process streamlined in a way that you don’t present a dozen different potential challenges to opponents of the pipelines. And this was promised. If you go back to the brief in opposition—look at the brief in opposition of the environmental challengers in the Atlantic Coast Pipeline case—they basically told the Supreme Court, “Don’t grant cert in this case because even if we’re wrong about this issue, we have ten other things up our sleeves, and we’re going to figure out a way to block this pipeline.” And it didn’t work as a no cert argument, but they sort of had a point. And that just is no way to run a railroad. It’s no way to run a pipeline. And so, I really do think that is something that is in dire need of reform.

 

Hon. Jennifer Walker Elrod:  Well, there’s so many ways we could go with this. We could hear about why there isn’t more state litigation on this. And 3e could hear about if it’s so clear from Professor Cooley’s treatise and John Lewis’s treatise, why was it 5-4? We could hear about -- if Justice Thomas has written public use means something more than any conceivable public purpose, what is public use, and where do we draw the line for that? Gentlemen, what would you like to talk about?

 

Robert J. McNamara:  Well, I’m perfectly happy to pick up on where Paul left off because I think he’s exactly right about our pipeline approval process because the one thing that comes with approval to build a federal natural gas pipeline is the power of eminent domain, and not the power to actually build the pipeline. And so, The Atlantic Coast Pipeline, armed with the power of eminent domain, did what it had to do to build the pipeline, and it disrupted countless property owners and took property from countless property owners only to eventually to be told, “Ah. It turns out the multifarious other government actors in this area won’t actually let us build the thing,” which seems to me, exactly backwards. Right? The power of eminent domain should come last in the process. And I analogize this to my work with state and local governments all the time, that if someone came forward and said, “We need the power of eminent domain to build this project, but also, we don’t have zoning approvals, we don’t have permits to build, there’s no sewage at the site, and there’s no road that goes there,” we’d say, “That’s insane. Why would you approve eminent domain for this thing that you don’t know you’re allowed to build?” And that is, perversely, exactly the system of federal pipeline construction, which I don’t know that it has a judicial solution so much as it needs a congressional solution. But it’s one of the few areas where I think the condemners and the condemnees are in perfect agreement that this system is bonkers and needs to change.

 

And I also think he’s right that the fact that there’s a delegation of the eminent domain power doesn’t answer the question of whether the use of eminent domain is constitutional. But I want to stress I think he’s right that it doesn’t answer the question. It doesn’t tell us that it is constitutional, and it doesn’t tell us that it isn’t constitutional, particularly if you’re concerned that the eminent domain power be used for a public use. And I think Justice Thomas is right that public use encompasses use by the public in the form of a common carrier. We need to be worried about the scope and shape of a delegation. It’s one thing to say that this railroad is a common carrier, or this pipeline is a common carrier, but it’s worth asking the second question of how do we know it’s a common carrier? Who’s choosing the route? Who’s actually in charge of the exercise of this delegated power? Which is not a question that was presented in the PennEast case, and I don’t think reasonably could have been, but is a question in a lot of state-level delegations of power.

The way you become a common carrier under Louisiana law to construct a common carrier pipeline is you announce that you are a common carrier pipeline. And there is no regulatory apparatus restricting your ability to grant yourself that power. So I do think the fact that it’s a delegation doesn’t answer the question telling us that it’s unconstitutional, but the fact that it’s a delegation does raise second-order questions that we should be asking in these situations, which doesn’t mean that the state of New Jersey should have prevailed in PennEast. I’m actually quite glad it didn’t because if pipeline companies can’t condemn state-owned land, that just means they’re going to condemn more privately owned land, which doesn’t seem like it’s good for anyone except the state of New Jersey. But I do think that there are further questions in delegation that can and should be developed, and are—to mollify Professor Hills—are being developed in state court; we do both. And state courts are an active area of litigation here. I just don’t think they’re the only area of litigation because we have a U.S. Constitution for a reason, and I think it should be enforced.

 

Joshua P. Thompson:  I will respond to Professor Hills, which is more in my subject area. And the rent control issue, I think, is an interesting one. If you look at Cedar Point Nursery, and if you look at our brief, it was largely the exact same. The Supreme Court almost adopted verbatim what we had been arguing the entire time, which is very humbling and great, but there was one thing where we differed on, and it was on these exceptions. The Supreme Court says a lot of these denials of the right to exclude can be baked into the condition schemes. So you’re giving up a government benefit in exchange for the denial of a right to exclude. Where we said the inspection regimes, the OSHA regimes, better fall under background principles because they’re essentially search functions, and the government always has the power to search, and we thought that was the better way to look at it, the Supreme Court disagreed and hinted that these would be reviewed under the unconstitutional conditions framework, which is what Professor Hills says is the reason why a lot of these rent control schemes will be upheld. And he might be right about that.

And I think the reason why it’s wrong to view these as conditions cases is because of what the Supreme Court had held five years earlies in Horn. The Chief Justice in Horn says that -- the government defends—Horn is the raisins case in California—the government defends Horn by saying that, “This is just a condition on your right to enter the raisin market, that you have to give up a third of your raisins. This isn’t a taking. It’s just a condition on using raisins.” And the Chief Justice, in a famous opinion, says, “The raisins are a healthy snack. You cannot condition your right to enter into agriculture. It’s not a pharmaceutical company.” And I think the same logic applies to entering the rental market. There’s no government benefit that you’re exchanging to enter into the rental market. People’ve been renting homes and inns since the beginning of time. So to put that into the constitutional conditions framework, I think, is misplaced. Whether it’s background principle, I think, could be better argued.

 

But where I would agree with Professors Hills is that what we need to -- I do think that the CDC eviction moratorium case and Cedar Point, also Pakdel, which was PLF’s 14th Supreme Court victory last year, all hint that there is this denial of the right to exclude that’s paramount and it does hint at potentially going after rent control. PLF, 20 years ago, had a rent-control project that lost twenty cases in a row, and we have a nice long history of precedents upholding rent control, but these three cases, I think, do hint at a potential revival of rent-control challenges. And I agree with him that the best way to go about that would be find a plaintiff, an as-applied challenge to a particular rent control. In fact, Pakdel, which is now on remand to the district court, is along those same lines. Pakdel -- it’s not a complete ban on him inhabiting his property -- and we do have other PLF attorneys here who know that case better than I do -- but in order to reinhabit his property, the couple would have to pay X-thousands of dollars in order to get access. So I think these issues are the important ones of the day with regard to Cedar Point Nursery and constitutional conditions and, like I said, I just view it a little bit differently than Professor Hills does.

 

Prof. Roderick Hills:  Yeah. I don’t disagree with anything that Josh said. I’ll just say that the Supreme Court probably does not want to create a natural right to rent residential real estate. And why is that? Well, because in every one of the 25,000 general jurisdictions in its zone, they use their zoning ordinances to exclude the rental of residential real estate in single-family zones. Right? And so now, what you’ve got are a bunch of angry homeowners, many of whom are Republicans with down payments, who say, “You just let a hotel move in next door to my -- or a bed and breakfast -- next door to my nice single-family home, so you’re going to strike down zoning?” And you guys say, “No. No. I’m not going to strike down zoning. That’s reasonable, but I am going to strike down rent control.” But all of a sudden the distinction between zoning and rent control starts to get fuzzy. What about Mitchell-Lama? Mitchell-Lama gives grants out to people who own residential real estate if they agree to restrict rents. “Well, that’s a governmental benefit, that grant.” Okay, what about 421a tax abatements? Is that a governmental benefit if they cut your taxes? Guess what? You only get a 421a in New York if you agree to put a covenant on the apartment, reducing rents. So rent control comes in a zillion shapes and sizes. The Court does not want to get involved in that quagmire. It really doesn’t matter how often you say, “We’ve got a federal constitution.” I guarantee you federal judges are going to say, “I am not going to be the rental guidance board for 25,000 municipalities.”

 

And for that reason, I think you got to go state and in all sorts of ways. The state judges, the state constitutions, have advantages. Notice, by the way, if you go the as-applied route, all of a sudden -- and I think Paul’s and your presentation show this -- there’s a whole bunch of state backdrops, state law, that obviate the need to decide the federal constitutional question. After all, a pipeline never will be built. Right? Because there’s a whole bunch of state statutory rules that might not be met. And so, Pullman abstention kicks in. Why should we address this complicated federal constitutional question? We can abstain, send it to state court and get the whole thing kicked on state grounds. Well, these guys came at 5:00 A.M. to Cedar Point Nursery without notice, violating the very state law. We’re not going to decide this Loretto issue. We’re just going to kick it back to state court and say, “Hey. Did they violate state law?” So once you get into the business of as-applied plaintiff-specific challenges where the law’s actually being enforced against an actual person, the federal courts immediately say, “I see a way out of here. I’m going to Pullman abstain my way into not having to be the rental guidance board for the United States.”

 

Hon. Paul D. Clement:  So I’ll just join this conversation with a couple of thoughts. I mean, one is, there’s a lot to be said for litigating in state courts when it’s a good forum. But the alternative is, try to get the Supreme Court to do something kind of modest but important with the Takings Clause. And the alternative is, say, litigating in California state court. I’ll take my chances in federal court with that. And then just to kind of marry up some of this discussion, I absolutely agree that as-applied is the way to go in these cases. And it’s not just because it makes it easier for the Court to decide these cases, but it also makes it easier to win the hearts and minds and have an amicus strategy that can be really successful and to put a face on these cases. I mean, part of the reason that people are still talking about Kelo is because there was a well-selected plaintiff. There was a house that people could picture. You can make movies about it. You can’t really do that in a facial challenge, especially if the facial challenge is brought by a residential real estate corporation or something. It just doesn’t work.

 

The only caveat, I would say, is – I mean, I agree with you in predicting that these cases will not fare well in the Second Circuit. I think part of the reason for that, though, is just that people have been challenging New York rent control for 50 years, and there’s all these precedents, everywhere you’d want to litigate, that are not favorable. And it sounds like your experience with the 20 losses in the earlier project. But with all that partial doom and gloom -- I mean, there’s another principle of Supreme Court litigation, which is pigs get fed and hogs get slaughtered. And I do think the current iteration of the New York law is so cartoonish and absurd. Somebody in this room, maybe, was a plant who got into the New York legislature and drafted up the law with the idea that “I’m going to make this the perfect test case to get rent control struck down as a taking,” because it, really, -- it’s asking for it. So I’d offer that thought because this may be the one facial challenge that could succeed, not because an as-applied challenge wouldn’t be much better, but because, wow, this law.

 

And just to say something to Josh, my fellow native Wisconsinite -- first of all, how do you like my mask? I’m not wearing it, --

 

[CROSSTALK]

 

Joshua P. Thompson:  Pack mask.

 

Hon. Paul D. Clement:  -- but a Packer mask. But the second thing I wanted to say is -- and that’s another reason why Cedar Point came out the way it did because you picked both your client exceptionally well, but you picked your target exceptionally well. And anytime you pick your target well, unfortunately, creates this dynamic that the law that you successfully challenged was so extreme that there’s going to be plenty of ways, in the next case, for people to try to distinguish this because “this isn’t 120 days and this isn’t --” all of this thing that’s almost tantamount to a permanent physical occupation. But in my experience, it’s much more gratifying to try to continue to litigate and deal with people who are distinguishing your win, than to lose, so I applaud you for picking some very, very good targets in that case.

 

Joshua P. Thompson:  Thank you.

 

Hon. Jennifer Walker Elrod:  So what are your forecasts for Kelo itself? Is it going to be flat-out overruled or incrementally cut away? Does anyone have a forecast for Kelo itself? Is there a percolating case? Hopefully not in my circuit. I would have some issue. Something like that? If you don’t want to talk about that, do you think the traditional notion of the common good sheds any light on the Public Use Clause? Those are two very different questions, perhaps. But you can have a shot at either one of them. And ladies and gentlemen in the audience, it would be okay if you line up if you’re having questions. We’re going to have questions soon from the audience.

 

Robert J. McNamara:  I’m happy to take the first one. We don’t have anything that’s going to come before you, so there’s no recusal danger. But I think Kelo is not long for this world. Justice Scalia, before he passed, whenever he was asked in a Q and A what modern Supreme Court case he thought was going to be overturned, he would point to Kelo and say that the backlash to Kelo really demonstrated that the Court had gone too far and that the Court was going to have to course correct. And I suppose that was easy for him to say because he was a dissent, correctly. But I think he was right. I think the dissental in Eychaner shows that there’s an appetite to take a case that is rightly framed. We’re actively bringing and framing those cases so that we can bring them up—again, not in the Fifth Circuit yet. I think the issue is ripe for reconsideration. There really isn’t another modern decision that you have being so squarely rejected on its merits, on its own logic, by state high courts, that I think that it really points up that the modern Court has to reconsider, at least, this sweeping nature of Kelo, even if it doesn’t go all the way to adopting Justice Thomas’s dissent.

 

Hon. Jennifer Walker Elrod:  Thank you.

 

Hon. Paul D. Clement:  And I’ll follow up, for what it’s worth. I largely agree. I think it’s a close question as to -- the Court doesn’t like to overrule its precedents. And Kelo doesn’t seem, to me, to be one that they absolutely have to overrule, in so many words. Kelo -- the majority opinion doesn’t say that there’s no judicial role in enforcing public use. And so this is not one of these ones where they’ve said there’s no jurisprudence under this clause. There’s no judicial role. And if they’d said that, then it would have to be overruled. But given that even the majority opinion suggests that there is a judicial role, I think that it’s a case where the Court could make the law a lot better without saying that they’re going to overrule Kelo, in so many words. It may be cathartic to say it in so many words, so they may do that. And it is a very unpopular decision, so I’m not ruling it out, but I almost feel like the harder question is, will they overrule it or just trim back on it?

 

But just to amplify one point that Bob said is -- I do think that the fact that the state courts have rejected it is particularly important here because as a general matter, the Supreme Court doesn’t care much about what state courts think or do. But this is one area where I think they would. I think the judicial fear with public use doctrine is just, “How are we going to come up with an administrable test?” And it’s much easier to say, “Eh. The legislature, they’re well-positioned to figure out what’s a public purpose. And having a jurisprudence of public use seems like it’s hard and might be difficult to administer.” And so, the fact that the lower courts are not just rejecting the reasoning of Kelo, but stepping up to the plate and saying, “No, this is not that hard a judicial role, we can do this under our state constitution,” I think is a particularly helpful dynamic in terms of pushing the federal law in the right direction.

 

Prof. Roderick Hills:  I just want to say that if you push the law in the right direction, make sure you don’t adopt Kennedy’s concurrence.

 

[Laughter]

 

That is a disastrous doctrine. You’ll recall that he said, “Well, you know, it’s not a public use if you condemn some blighted area, and then you immediately turn it over to a private person for redevelopment.” Now, that is absolute folly. If you’re going to condemn a big piece of urban land, you better have a private investor in mind, or else you’re going to be like the New London Development Company, which is still holding on to that crappy piece of land. Right? So do not, do not—I repeat, do not—condemn land because it’s blighted and not have a particular person who’s issued an RFP and said they’ll take it over. And that’s what happens, by the way, when judges get involved in these land use issues. They screw them up because they don’t understand real estate finance. They don’t understand mortgages. They don’t understand security interests. They don’t understand how cities do business. And so, I’d really tread with caution if you start having the feds make up a doctrine.

 

Robert J. McNamara:  You know who also didn’t understand those things?

 

[CROSSTALK]

 

Prof. Roderick Hills:  The New London --

 

Robert J. McNamara:  It’s the New London --

 

Prof. Roderick Hills:  -- Development Corporation.

 

Robert J. McNamara:  -- Development Corporation.

 

[Laughter]

 

Hon. Jennifer Walker Elrod:  Well, that’s lovely.

 

[Laughter]

 

Robert J. McNamara:  We agreed, see?

 

Hon. Jennifer Walker Elrod:  Sir, did you have a question?

 

Chris Green:  Sure. Chris Green from Ole Miss. I have a question for Paul Clement. Where did you get that gorgeous copy of Cooley’s treatise? And if we took it, how much compensation would you...

 

[CROSSTALK]

 

Hon. Paul D. Clement:   So this is why -- it’s probably true that if the government came in and said you’re going to make better use out of this than I will --

 

Chris Green:  I would.

 

[Laughter]

 

Hon. Paul D. Clement:  I know you would, you would. Right. Right. But that would be wrong somehow. And honestly, they could give me just compensation measured by what I paid, but that wouldn't make me feel okay. It would still seem like there was a constitutional violation there. I got this the place you get most things like this—it’s either eBay or AbeBooks. I think it was probably AbeBooks, which I highly recommend as a great place to -- and I’m not getting a kickback or anything, but it’s a great place to find old law books.

 

Hon. John Curry: Yes. Judge John Curry from Chicago. I’m one of only two judges in the Circuit Court of Cook County that presides over eminent domain cases in our jurisdiction. Actually, Cedar Point came up in a case I decided two days ago before I came to this conference. A small suburban municipality needed to repair its sewage lift station. And on the neighboring residential private property, it literally extended its construction footprint over 2,000 square feet of the person’s property, put up construction fence. And the property owner cited Cedar Point to me, and I didn’t think he needed to go there. The village contended that -- “Well, we have the right of entry easement that solves all problems. It says right of easement at all times. Well, we need this construction site at all times, and we’re just entering.”

 

      And there’s a rich body of state law across the country. In New York, Litchfield is one case from 1906, and my state, [County] of Canaan in 1982, both of which are cited all around the country, at least 25 jurisdictions, where it said there’s a clear distinction between right-of-entry and a more dynamic use of the property, and once you cross that line of dynamic use, then condemnation rights are kicked in—that’s the taking of property—and there has to be condemnation. I’d just like your comments on that and whether that’s an alternative to looking at this issue.

 

The second question I had raised, sort of leveraging on the rent control -- I had a case -- there seems to be now a robust development of anti-gentrification laws in urban areas. In the city of Chicago, the city reclaimed a vacated railroad right-of-way into a lovely parkway. I think there’s one in New York City, in Manhattan, similar to that. And obviously, this is a boon to neighborhoods. It is adjacent to what’s been for 50 years a low-income Hispanic neighborhood. And the Hispanic alderman there said, “We need to preserve our Hispanic neighborhood.” He had an enacted an anti-gentrification law, which, on one hand, would require anyone who wanted to tear down a property to build more expensive single-family residence would have to pay a $15,000 demolition fee per unit on the property. The second law was if there’s more than 50 percent of the units – rather, 50 percent of the properties on the block that are multi-family, you cannot tear down your unit to build a new single-family residence. Basically, I had to dismiss the suit on standing grounds, but I thought there was some intriguing issues raised here on these [inaudible 01:19:37], particularly when they have to nibble away through a demolition fee or a property limitation fee. I’d like your comments on that.

 

And I’ll make one last final comment. Three years ago, in this very room, we had a great seminar on eminent domain, and a professor, whose name I forgot, indicated that on Kelo, basically across the states, it’s not been a green light to public authorities, but generally, there’s been a dial back on state level—state and local level—a lot of statutes that are more on the anti-Kelo end, and common law developings that’s not as robust as the Kelo decision itself. Thank you. Those are my comments.

 

Hon. Jennifer Walker Elrod:  So we have a testimonial from the state courts. Does anybody want to respond?

 

Joshua P. Thompson:  Yeah. I’ll take the Cedar Point question. Without knowing the intricacies of the case that you adjudicated, I think one thing that happened in the course of litigating Cedar Point is we got an amicus brief on the other side from a lot of law professors. I hope that Professor Hills wasn’t on that brief. But it essentially argued that ruling in our favor would upend these centuries-old utility laws and regulations that allowed entries onto private property for regulating utility lines, sewer lines, what have you. We didn’t think so, and the Court ultimately agreed because of the background principles exception. If this is something that is inherent in your property right when you assumed that property -- now it may be a question of when the background principles clock starts to tick, but with a lot of these utility exceptions, they go back to pre-1776, that the government had the authority to create sewer lines or to maintain sewer lines—not power lines at the time—but essentially, our argument was Cedar Point will not upend those sorts of statutes because they aren’t infringing on your right to exclude because you never possessed the right to exclude a valid exercise of utility maintenance. So maybe that would apply in the situation that you were talking about.

 

      It could also be—if it’s just like random torts—that it could be one of those cases that are the dividing line between repeated entries onto private property when that trespass becomes so significant that it becomes the taking of the right to exclude. But either of those exceptions seem to be what I would litigate in the scenario that you’re explaining.

 

Prof. Roderick Hills:  I’d like to say a word about inclusionary requirements because the judge was referring to anti-gentrification requirements. These are typically requirements that if you redevelop land for market-rate housing, you have to include affordable units or pay into a housing trust fund or otherwise stop gentrification. And the Supreme Court has recently been giving signs that it might try to put stronger limits on inclusionary zoning. Now, this sounds like a great idea. It’s a disaster. And here’s why. If you’re a Libertarian, the thing you care about is restrictive zoning. You got to get rid of restrictive zoning. But getting rid of inclusionary conditions on restrictive zoning doesn’t get rid of restrictive zoning because if you say to Chicago, “Oh, you’re not allowed to put a condition on ten extra for area ratio—FAR as we say in the bizz,” you know what they’re going to do? They’re going to say, “Fine. We just won’t give you ten extra FAR.”

 

Now, the next step, of course, you’d say is, “Oh, well, the Supreme Court should strike down restrictive zoning.” But that’s never going to happen. Euclid is 1926. Right? It’s almost a century old. The country is filled with people who love their zoning on both sides of the aisle. If you think the Supreme Court’s going to get rid of, say, single-family zones, you are smoking something. So what does that mean? It means that if you say you can’t condition map amendments that rezone on providing rent-controlled units, a whole bunch of left-wing cities are going to say, “Fine. We won’t rezone.” And we are facing a housing crisis that’s colossal in this country because cities from San Francisco to New York City to Boston are not rezoning. The housing shortage is absolutely devastating. And the Supreme Court will just pour oil on that fire if it destroys the flexibility of local governments in making conditions because the only way you’re going to get this stuff through city council, rezoning that allows for apartment buildings in multi-family, is to have those sorts of conditions. Again, just watch out when you make them the zoning board for the United States.

 

Hon. Paul D. Clement:   I just want to point out, if you really are a Libertarian, you probably are smoking something.

 

[Laughter]

 

 

Joshua P. Thompson:  Cigars.

 

Robert J. McNamara: Good one.

 

[Laughter]

 

Hon. Jennifer Walker Elrod:  Wow. I’m sure members of this section are very happy that people are passionate about property rights at this time in the morning. We’re into the afternoon now. And you may ask your question, sir.

 

Connor Mighell:  Wonderful. Hi, Connor Mighell from Texas Public Policy Foundation, Center for the American Future. I do of energy and environmental law. And I promise I do have a real question, but first of all, Mr. Clement, What is the name of that treatise? I’m also very covetous of that book right there.

 

Hon. Paul D. Clement:   Constitutional Limitations.

 

Connor Mighell:  Okay.

 

Hon. Paul D. Clement:  It’s in the public domain. There’s --

 

[CROSSTALK]

 

Connor Mighell:  I’ll look it up.

 

Hon. Paul D. Clement:   -- this is a reprint of the first edition with a nice leather cover. There’s lots of different ways to get it. It’s really - I mean, Justice Scalia’s cited it numerous times in opinions.

 

Connor Mighell:  Excellent. Thank you. This is for anyone who wants to chime in. On the subject of takings in general – so the elemental question is what properly counts as private property under the Takings Clause. For instance, a license isn’t considered property despite the fact that a license does convey, for a time, a set of privileges to use a certain property, or at least it can. And do you think the current view of the scope of private property in federal law entirely comports with the original public meaning of the Takings Clause? Do you think it’s a worthwhile strategy for advocates or academics to argue that instead of expanding what’s a taking, the definition of what counts as private property for purposes of a taking should be expanded according to the original public leaning, or do you think the courts have got it right on that?

 

Prof. Roderick Hills:  Federal or state court?

 

Connor Mighell:  Either, or.

 

Prof. Roderick Hills:  I just have this point about property. As you enlarge a scope of property—so taxi medallions are property, occupational licenses are property—everything becomes property, government becomes mired in gridlock. Example: New York City wants to deregulate the taxi industry by letting Uber and Lyft compete. Guess what argument the owners of taxi medallions make? “You can’t do that. That’s the takings of property without just compensation.” So be careful what you wish for. As you multiply property, you make it impossible to deregulate because every deregulatory impulse can reduce the value of property. Example: on Midtown East, remember Grand Central? Everybody read it. The air rights of above Grand Central, that was compensation. It was property to get those extra air rights.

 

      Well, then New York City council says, “We’re going to let everybody have air rights.” So the owner of Grand Central Station says, “That violates my property rights. You can’t deregulate Midtown East and allow everybody to build up because that means my air rights become worth less money.” And so, all of a sudden, we’re going to lose approximately six million square feet of extra building and office space and impose a ridiculously restrictive zoning scheme that was designed in 1961 because some Libertarian lawyer decided they wanted to make property really broad? Ah, geez. So keep it at the state level, at least, to quarantine the harm you can do.

 

[Laughter]

 

Robert J. McNamara: If I could quickly stick up for Libertarian lawyers?

 

[Laughter]

 

I think it’s less a question of how you define property or a question of how you define takings. And we litigated a lot of the deregulatory takings cases around Uber and Lyft regulation. And the question there, actually, is not whether you have a property right in your taxi medallion. I think you clearly do. If New York City wanted to come and take away your taxi medallion you paid money for, that would be a taking. The question is whether it’s a taking for the government to act in a way that allows someone else to use their property in a way that prevents money from flowing into your pocket. And that is something that, as a matter of federal law, has never been a taking.

 

The circuits have uniformly recognized that the mere fact that the government is reducing regulations on someone else that might reduce your income doesn’t give you a right to storm into court and demand that the government head out and arrest Uber and Lyft drivers, which was actually, in Chicago, the claim that initially brought by the taxi drivers. They wanted an injunction forcing the police to arrest people who were driving for Lyft, and so we represented Lyft drivers who would prefer not to be arrested. So I think it’s less whether we define that as property and whether we define property as a right to avoid any diminution in value. And I think that’s really the fulcrum of those cases, not so much that we Libertarians have gotten out over our skis in defining what property is or isn’t.

 

Hon. Jennifer Walker Elrod:  Our cigar-smoking gentleman.

 

Isaiah McKinney:  Isaiah McKinney, 3L Wake Forest. I’ve also had the pleasure of bothering Josh as a summer clerk at PLF. I wanted to ask about the Eleventh Amendment and property. So I heard Professor Merrill make an argument recently that after PennEast where the Court said, “The state can’t use the Eleventh Amendment to protect sovereign. It can be sued for taking its own property.” Couldn't there also be—Professor Merrill’s point wasn’t that you could make an argument now that when private property owners have had their property taken by the state and are suing the state to get just compensation, in somewhere like a Knick case, the state shouldn’t be able to plead the Eleventh Amendment to protect themselves against that claimant for just compensation. What would be your response to that? Are we seeing the sovereign immunity—the Eleventh Amendment being eroded in Fifth Amendment taking claims?

 

Hon. Paul D. Clement:  So I’ll take that, and I’ll also belatedly answer the judge’s question about why -- if it’s so clear that delegation of the eminent domain power is not that bad a thing, why was PennEast 5-4? I mean, it was 5-4 because of the Eleventh Amendment issue, because of the federalism issues. I actually don’t think the dissenters -- I read those opinions in light of Justice Thomas’s dissent in Kelo. I don’t think the dissenters had a problem with the bare fact that there was a delegation of the eminent domain power there. And it was the combination of the eminent domain power and then suing the state as a defendant. So I don’t think there is going to be any erosion of the states’ ability to -- I don’t think you can bring an eminent domain action that would otherwise be an entitlement under state law in federal court now or anything like that.

 

And I think the key to the PennEast case is the idea that what you really have is an understanding that even when you delegate the eminent domain authority, the delegee is effectively still a federal actor, is the way I think about it. And that sort of has to make sense because the Constitution generally only applies to state actors in the Fourteenth Amendment, federal actors in the context of the unamended Constitution. And so if there’s a private entity exercising properly delegated eminent domain authority, and they don’t give you just compensation, well, you can sue them under the Takings Clause. And they’re violating the Takings Clause. So I think you have to understand that if the delegation is valid, and it’s a delegation from the federal government, then they’re exercising a federal power.

 

And then I think the whole holding of PennEast, which kind of builds on United States v. Texas, is the idea that when a federal agent is suing a state government, the state doesn’t get to assert the Eleventh Amendment in response because they surrendered that in the plan of the convention. And so, I don’t really think that logic -- you know, the Court could’ve decided it some other way and said eminent domain proceedings are sui generis such that Eleventh Amendment doesn’t apply. And if they decided it that way, I think there would be more to the argument that maybe that has legs in other implications. But I think, given the way that the Court actually decided it, I don’t see that it really extends to anybody who’s not a federal delegee and could be understood as a federal actor.

 

Questioner 1:  Hi, my question for Mr. Thompson -- perhaps, reflecting a bit of Professor Hills’ pessimism, so apologies in advance of that. But in reading the Cedar Point, it seemed that in extolling a right to exclude, the Supreme Court implicitly denigrated a right to include in the bundle of rights. Maybe my reading is wrong on that, but it seems to suggest that that would be resolved under Penn Central. And so, the category of regulation I have in mind, in particular, are the very common local restrictions or even prohibitions on the ability of people to use their own residences for short-term rentals. For example, through Airbnb or VRBO. Do you see a route via which the Supreme Court might actually expand the right to include people in your own property, or is my pessimism there well-founded? Thank you.

 

Joshua P. Thompson:  Sure. The Supreme Court certainly holds a special solicitude for the right to exclude, and that doctrine goes back for hundreds of years. I think the analogy of the bundle of sticks is what really harms other challenges to property right regulation. The bundle of sticks implies that you can take away your right to build a chicken coop or to paint your house blue or to rent to Airbnb folks, and that still keeps your bundle of sticks essentially there. I think that’s the only constitutional right that we frame that way. You can frame the First Amendment or the Second Amendment that way as well, but only property rights has this bundle of sticks analogy that gets thrown at it all the time. I think, notwithstanding, my objection to the bundle of sticks analogy, is pretty prevalent in the case law, and only the right to exclude to this day has been singled out as deserving of special treatment.

 

Essentially, what the Court said, I think, in Cedar Point, is that without the right to exclude, private property is no longer private. That’s sort of the fundamental stick that cannot be taken away without just compensation. So I would like to see more sticks eligible for the per se treatment. I would encourage us to try to think of property rights in a different framework than the bundle of sticks going forward and not use that as litigators. But I don’t see an immediate path victory under the Fifth Amendment to challenging some of these local restrictions on bed and breakfasts. Now, there are challenges, I know. I think IJ’s doing some of them under the Fourth Amendment. There may be an economic liberty challenge to some of these. There are inspection regimes that can be challenged, but as it stands now, I don’t think the Fifth Amendment is a likely path to victory, unfortunately.

 

Hon. Jennifer Walker Elrod:  You have the distinction of being the last question, but you need to make it snappy.

 

Gideon Rappaport:  Thank you. Gideon Rappaport, NYU Law. I got up originally to push on the point that property rights are being expanded and somehow everything, government letting somebody do something is now a taking of other people—its right is now worth less. But my question is, pushing back on Professor Hills’s idea that this is a quagmire, this is too complicated for courts to do, courts, all the time, it’s like the World Trade Organization—International Trade Court—they always deal with issues of differentiating real health and safety restrictions from, essentially, protectionism. That’s much harder than this.

 

      You can get the economists involved, and you can see that by a certain level of rent control, rather than splitting the surplus you’re essentially pushing product below the weighted average cost of capital investor. And then essentially, you are taking their property by forcing to rent for less than the return they would be owed. I don’t think it’s that fact-intensive, and if anything, courts can use a bit of in terrorem to stop these extreme rent control. I would hope, in general, all of it, but is this possible to do in a manner that is just limiting the profit of the landlords to a certain extent, as opposed to pushing them into the red, which is what happened to a lot of people in New York, in particular?

 

Hon. Jennifer Walker Elrod:  Anyone want to respond? Courts doing economics.

 

Prof. Roderick Hills:  I think it’s great that the courts do it, just not through the Constitution. The U. S. Constitution is unamendable, virtually, and it’s controlled by nine lawyers. So it’s highly centralized and very difficult to modify, unlike the WTO, which is controlled by democratically accountable governments, or unlike common law nuisance, which is controlled by judges, often elected, and amendable by state legislatures. So I think it’s wonderful to have cost/benefit analysis and nuanced, fact-specific regulation. Just don’t assign that job to a single agency, the U. S. Supreme Court, and make it immune from control by every other entity in the business. Look, you guys in The Federalist Society were founded to limit the power of the U. S. Supreme Court. Right? So by all means, do this stuff, just choose the forum wisely in which it is done.

 

Hon. Paul D. Clement:   And can I just offer one slight counterpoint to that? I guess I would take what Professor Hills is saying very seriously, but my recommendation would be to take it not as gospel, but as a challenge. I could be upstairs talking about the Second Amendment, and in that context, you hear some of the same idea that, like, “Oh, gee whiz. If the Court gets involved in this, they’re going to have to look at all these different laws, and they’re going to have to develop a whole jurisprudence.” And I would say, A, that’s what the Court’s supposed to do when there’s on point constitutional text, which there is in the Second Amendment, and there is in the Fifth Amendment, not in a lot of other areas the Court’s involved. So that’s their job, but it’s our job as litigators to make that administrable and to avoid some of the nightmares.

 

So like I said, don’t take it as, “Stop suing in federal court entirely; go to state court.” That may be what you mean, but what I would take it as is, “Take it as a challenge.” It doesn’t have to be a land war in Asia. There probably was a better way to withdraw troops from Afghanistan, too. So take it as a challenge, but don’t take it lightly because what he’s saying is what a lot of judges are thinking, particularly if you’re trying to take them to someplace that they haven’t been before, or worse yet, a place that they were once before and retreated. The challenge is on you. What’s your limiting principle? How are you going to win this case in a way that’s actually administrable and doesn’t create problems? Give that a lot of thought on the front end, and then it doesn’t end up being a quagmire.

 

Hon. Jennifer Walker Elrod:  Ladies and gentlemen, our time has come to an end. Please join us for the annual Rosenkranz Debate and Luncheon in the Grand Ballroom at 12:30. And before you go, please give a warm hand of appreciation to our esteemed panel.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11:00 a.m. - 12:30 p.m.
ABA Law School Accreditation Standards

2021 National Lawyers Convention

Topics: Education Policy • Professional Responsibility & Legal Education
State Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?" This panel discussed "ABA Law School Accreditation Standards."

For many years, the U.S. Department of Education has recognized the Council of the American Bar Association Section on Legal Education and Admissions to the Bar as the accrediting organization for law schools. The importance of that function cannot be overstated. For nearly every state, a J.D. degree from an ABA-accredited law school is required to practice law. To become accredited, a law school must comply with the standards contained in the ABA Standards and Rules of Procedure for Approval of Law Schools. In May 2021, the Council of the ABA Section proposed a set of accreditation standards that, among other things, would require law schools to "take effective actions that, in their totality, demonstrate progress in (1) Diversifying the students, faculty, and staff; and (2) Creating an inclusive and equitable environment for students, faculty, and staff." An interpretation of that provision stated, "The requirement of a constitutional provision that purports to prohibit consideration of race, color, ethnicity, religion, national origin, gender, gender identity or expression, sexual orientation, age, disability, or military status in admissions or employment decisions is not a justification for a school’s non-compliance." The school would have to show "effective actions and progress . . . by means other than those prohibited by the applicable constitutional or statutory provisions." In addition, law schools must "provide training and education to law students on bias, cross-cultural competency, and racism: (1) at the start of the program of legal education, and (2) at least once again before graduation." The Council has since withdrawn the proposal for further study, but it may reappear.

Our panel of experts will discuss the degree to which the ABA’s proposed new policy represented a change from its prior practice; if it was a change, how it came about, including any arguments for or against it; whether it is justified and consistent with the accrediting role; and, if it is not, what steps, if any, might be appropriate to take.

Featuring:

  • Hon. Scott Bales, Former Chief Justice, Arizona Supreme Court
  • Prof. John McGinnis, George C. Dix Professor in Constitutional Law, Northwestern University Pritzker School of Law
  • Prof. Thomas D. Morgan, Oppenheim Professor Emeritus of Antitrust and Trade Regulation Law, George Washington University Law School
  • Mr. Daniel R. Thies, Shareholder, Webber & Thies, P.C.
  • Moderator: Hon. Gregory Katsas, U.S. Court of Appeals, D.C. Circuit 

Speakers

Event Transcript

Jack Park:  Good morning. My name is Jack Park. I’m the chair of the Professional Responsibility and Legal Education Practice Group here.

 

      Now, I’d like to introduce our moderator, the Honorable Gregory Katsas—he goes by Greg—U.S. Court of Appeals for the D.C. Circuit. Judge Katsas was appointed to the D.C. Circuit in December 2017. He graduated from Princeton University and Harvard Law School, where he was an executive editor on the Harvard Law Review.

 

      Between 1989 and 1992, he served as a law clerk to Judge Edward Becker on the Third Circuit, to then Judge Clarence Thomas on the D.C. Circuit, and to Justice Thomas on the Supreme Court. Between 1992 and 2001, he was an associate and then partner in the Washington office of Jones Day, where he specialized in appellate and complex litigation.

 

      Between 2001 and 2009, he served in many senior positions in the Department of Justice, including as Assistant Attorney General for the Civil Division and as Acting Associate Attorney General. In 2009, he returned to Jones Day. From January to December of 2017, he served as Deputy Assistant to the President and Deputy Counsel to the President.

 

      Judge Katsas, thank you.

 

Hon. Gregory Katsas:  Thank you, Jack. The subject of today’s panel is law school accreditation standards, more specifically, the diversity and curricular standards that have been proposed by the American Bar Association’s Section on Legal Education and Admission to the Bar.

 

      ABA accreditation standards have the force and effect of law. The Department of Education uses them for federal law purposes, and most states require graduation from an ABA accredited law school in order to practice law. We’re going to focus on amendments to the accreditation standards that were recently proposed by the Council on Legal Education. They’re fairly detailed, but just to tee things up, I will mention three aspects of the proposals.

 

      One is to broaden the existing diversity requirements. The current standard requires law schools to undertake concrete action to produce a student body that is diverse with respect to race, ethnicity, and gender. The proposal on the table would broaden both the kinds of actions required and the kinds of diversity required. It is to require effective action showing progress in diversification, and it defines diversity with respect to race, color, ethnicity, national origin, gender, sexual orientation, gender identity, age, disability, religion, and military status. The proposal would measure compliance by reference to results achieved and provides no excuse for noncompliance to the extent that federal or state law bars discrmination on any of these grounds.

 

      The second element of the proposal is to require effective action to produce an environment that is inclusive and equitable with respect to the same categories. The proposal outlines possible ways to achieve this, including suggestions like tracking academic outcomes by race, sex, etc., supporting affinity groups, and providing diversity, equity, and inclusion training. And as with the student body provision, it states that compliance is measured by outcomes achieved.

 

      A third proposal is to amend the curricular requirements. The current standard requires courses on professional responsibility, a course on clinical training, and exposure to legal writing. The proposal on the table is to add required training with respect to bias, cross-cultural competency, and racism.

 

      The original proposal from, I think it was April of 2021 generated a fair amount of opposition. Some from quarters one might expect like conservative leaning groups such as the Justice Liberty Center and FIRE, raising concerns about reverse discrimination, free speech, and religious liberty.

 

      There was also opposition from ten prominent members of the Yale Law School faculty, including Professor Amar, who’s at this conference. The Yale professors worried that the expanded diversity requirements were a euphemism for quotas and an incitement to violate anti-discrimination law. They raised a concern that affinity groups are by definition non-diverse, so there’s room for good faith disagreement about whether expanded support for them is a good thing or a bad thing. And they suggested that some of the diversity initiatives were unnecessary because, in their words, American law schools today are hotbeds of concern and activity to promote diversity.

 

      The original standards were tabled subject to further review. Just the other day a new set of proposals came out from the ABA. I just found out about them about an hour ago, so I haven’t had a chance to study them, but hopefully our panelists will educate me as they educate you on how the ABA has changed the original amendments, where they might be going with this, and maybe we’ll have some debate on the pros and cons of this, as well.

 

      I will introduce our very distinguished panel in the order in which they will be making opening statements. Thomas Morgan is the Oppenheim Professor Emeritus of Antitrust and Trade Regulation Law at the George Washington University Law School, where he teaches antitrust and professional responsibility. He’s written widely used case books about both subjects, as well as articles about legal education. Professor Morgan helped draft both the restatement of law governing lawyers and the Model Rules of Professional Conduct. He served as Dean of the Emory School and has taught at Brigham Young, Cornell, and the University of Illinois.

 

      Scott Bales served on the Arizona Supreme Court for 14 years, including as its Chief Justice for five years. From 2020 to 2021, Justice Bales was Chairman of the Council of the ABA’s Section on Legal Education when the accreditation standards at issue here were first rolled out. Earlier in his career, he served as a law clerk to Justice Sandra Day O’Connor, as a Deputy Assistant Attorney General in what is now the Justice Department’s Office of Legal Policy, and as the Solicitor General of Arizona.

 

      John McGinnis is the George C. Dix Professor of Constitutional Law at Northwestern University Pritzker School of Law. He’s written dozens of scholarly books and articles, including Originalism and the Good Constitution, which was published by the Harvard University Press in 2013. He served as a law clerk for then Judge Ken Starr on the D.C. Circuit and as a Deputy Assistant Attorney General in DOJ’s Office of Legal Counsel. In 1997, he received the FedSoc’s Bator award, which is given to an outstanding academic under age 40.

 

      Daniel Thies is a shareholder in the firm of Webber & Thies. He serves with Justice Bales on the Council of the ABA’s Section on Legal Education. In private practice, he handles complex commercial disputes throughout the country. He began his career as a law clerk to Judge James Holderman of the Northern District of Illinois and to Judge Jerry Smith on the Fifth Circuit.

 

      We’ll begin with opening statements of up to ten minutes, so let me turn the floor over to Professor Morgan.

 

Prof. Thomas Morgan:  Thank you, Judge Katsas. To most law schools, national accreditation is a matter of life or death. Law students and prospective clients in turn depend on accreditation standards to require what will help the law schools produce informed and effective lawyers. Who has the power to accredit law schools shapes what gets taught, by whom, and to whom? Ultimately, the holder of accreditation authority shapes the development of law itself.

 

      I’m here this morning to provide a little background. I am not an opponent of the ABA. Indeed, I think I’m a friend. I’ve been a member of the ABA for over 50 years. I’ve chaired many site visits in support of the accreditation process. But the ABA today is in somewhat disarray, and the independence of the law school accreditation function is in sufficient doubt to make today’s program timely.

 

      The ABA began in 1878 as essentially a hundred member invitation only club of outstanding lawyers. Even then, legal education was one of its main interests. The move from small club to national big tent for the legal profession was achieved in the 1930s when the ABA welcomed state and local bar associations to participate in its policymaking meetings.

 

      After World War II, the ABA articulated six organization objectives, including preservation of and education about the Constitution and the constitutional system of government, finding ways to make legal services available to everyone at a cost they can afford, and finishing up with coordination of the activities of the entire U.S. organized bar.

 

      The ABA organized itself internally to support subject matter sections that attracted many of my generation to join it for the chance to mingle with leaders in our fields and to try to make constructive changes in the law. In 1952, the Justice Department agreed to let the ABA comment on qualifications of judicial nominees. And the same year, the U.S. Department of Education empowered the ABA to accredit law schools. So far, so good.

 

      But throughout the mid-twentieth century, the ABA pursued another preoccupation, and I’m not making this up. The preoccupation was how can we guarantee that lawyers earn as much as doctors?

 

[Laughter]

 

      That was a kind of a good objective to many young lawyers who had returned from World War II and were trying to rebuild their careers. Doctors make it hard to become a doctor, the argument went, and we too should try to limit entry into our field.

 

      Ultimately, a Justice Department anti-trust case alleged capture of the accreditation process by practicing lawyers and law school faculty. It was settlement of the accreditation case in 1995 that put the standards themselves and their application to particular schools almost entirely in the hands of the Council of the ABA Section of Legal Education and Admission the Bar. Scott Bales and Daniel Thies will embody for you the fact that that group has had very able and distinguished members over the years.

 

      The delegation of accreditation authority to the Council was explicitly made to cut the tie between law school accreditation and the ABA. The ABA’s decline and disarray as a result today can be seen in numbers. In 1980, the ABA had about 300,000 members, which at the time was well over 50 percent of American lawyers. By now, membership is down below 200,000. Now, only about one in seven U.S. lawyers is a member of the ABA. In the process, the old ABA goals of preserving our system of government, public education about the Constitution, and promoting ways to make affordable legal services available to all citizens are largely gone.

 

      Since about 2008, the ABA goals are focused on four principles. Goal I, member services, includes CLE programs and section activities which many of you may be involved in, plus car rental and product discounts designed to make economic sense of being an ABA member. Goal II, advocacy for the profession, supports the ABA’s involvement here in Washington, advocating a number of ABA objectives. Goal IV, advancing the rule of law, is a continuation of a long standing program called World Peace Through Law. But Goal III, which is the one we’re focusing on, on eliminating bias and enhancing diversity, is basically the only substantive goal the ABA has left.

 

      What the ABA calls its Goal III Business Unit, the Diversity and Inclusion Center has nine so-called Goal III entities, each churning out policies and standards. I give you this background because we’re here today looking at the impact of Goal III on law school accreditation, and I submit that cutting the tie between the ABA and the Council of the Section of Legal Education seems basically not to have happened, or not to have happened to a sufficient degree.

 

      Proposals to amend accreditation standards in the name of diversifying law schools, faculties, and student bodies are closely derived from the ABA strategy for furthering Goal III objectives. For example, the proposal Judge Katsas described with respect to Accreditation Standard 206 requiring affirmative efforts to improve diversity basically tracks the Goal III survey of members and leaders in the ABA that has been undertaken lately. It requires a survey of law school and students’ race, ethnicity, and even their sexual self-identity, a variety of factors, and then is intended to use that data as a basis for monitoring and for future law school hiring and admission decisions.

 

      Of course, none of us should forget that law schools, like the remainder of our society, faces the consequences of wrongs done to black citizens and others over now many generations. That’s a problem of profound concern and it isn’t going to go away without a lot of sensitivity and effort.

 

      Having a diverse bar is a good objective, but as Judge Katsas recited earlier, it is a current objective of the Council without the kinds of changes that are now being proposed. We need to recognize that the Council is under a lot of pressure from others in the educational world who favor very much the objectives that they have been advancing. And it is trying to talk through those issues that, I think, we’re going to do today.

 

      Of course, the ABA is as much a private club as it was in 1878, and as such, it can do what it wants with its goals, and it will live with the result of its efforts. Law schools, however, have to live in a competitive, challenging world. They have to recruit good faculty and good students. And in addition to worrying about their racial and ethnic and other characteristics, they have to figure out how to operate at lower cost, charge lower tuition, and graduate students with less debt who still will be informed, courageous professionals throughout their career.

 

      The current administration’s Department of Education has given the Council of the ABA Section a new five-year term as accreditor of American law schools. The current administration likes what they see. I would hope that the Council will assert its independence and focus on a balanced set of objectives that reflect the real world that law schools experience and could get wide support throughout the bar and the law school communities. If present trends continue, however, in my opinion, the Council of the ABA Section should one day lose its status as the accreditation authority for American law schools. Thank you.

 

Hon. Gregory Katsas:  Justice Bales?

 

Hon. Scott Bales:  Thank you. I want to begin by thanking Judge Katsas and the organizers for putting this panel together and noting a perhaps unrecognized connection between the panel and legal education. As it ends up, Professor McGinnis and I were classmates. And after we graduated from law school, we both worked the following summer of the Office of the U.S. Solicitor General, so that was 1983.

 

      And for me, that resulted because one of my mentors in law school was Paul Bator, who had gone on to become a Deputy Solicitor General. I was pleased to learn in preparing for the panel that among the recipients of the Paul Bator teaching award is Professor McGinnis. Of course, Professor Bator was one of the faculty members involved in the early formation of The Federalist Society.

 

      It’s easy for people to conflate the ABA in the sense of its role as a professional association with, as Professor Morgan noted, hundreds of thousands of members. It’s easy to conflate that with the ABA’s Council for the Section of Legal Education, but it’s important to understand that the ABA, as the bigger entity, doesn’t really play a role in the accreditation process. And actually, that is a consequence of federal law.

 

      The Council has to act separately and independently from the larger ABA in its role as an accreditor, so the decisions whether to accredit a particular school, whether a school is found to be out of compliance, the articulation of the standards and the rules that govern that process, those are done by the Council without participation by, for example, the Board of Governors of the ABA or the larger House of Delegates.

 

      With respect to the adoption of standards, the House of Delegates has a small role in the sense that when we, the Council, approve a change in the standards, that is sent to the House of Delegates for its concurrent, and it has the ability to refer back to the Council twice a proposal before it becomes effective.

 

      So for example, when the Council in the last couple years approved a more rigorous standard for bar passage, that was initially referred back for further consideration by the House of Delegates. But ultimately, the Council chose to proceed notwithstanding the referral, an illustration, I guess, of the kind of independence that Professor Morgan thinks is valuable on the part of the Council.

 

      So you may be wondering, well who is this Council if it’s actually separate and independent from the larger ABA? It’s twenty people, and less than half of the twenty are people actually associated with law schools. So there are currently, I think, of the twenty members, there are nine law faculty or deans. Of the nine, six are current or former deans of law schools. Of the remaining eleven, seven are people who are lawyers or judges like Daniel and me. And the other members include the Chief Justice of Michigan and the Chief Judge of the D.C. Court of Appeals, as I believe what your highest local court is called.

 

      And there are four non-lawyer members that come from different backgrounds. For example, there’s a professor of architecture from Oregon who’s on, actually, the board of accreditation for architects. So it’s, by design, a cross-section of people with both interest in the accreditation process and relevant experience but, also by design, not dominated by people currently working as law deans or professors.

           

      Accreditation serves three important functions. First, and this ties into what Professor Morgan said a little bit about the economics of legal education, by being accredited, a school’s students are eligible for federal student aid, so that’s a function of the Department of Education. It’s been in place for some 70 years because, understandably, you don’t want to have federally funded student loans going to institutions that are bringing in students and then graduating them in ways that leave them incapable of practicing or repaying their loans.

 

      The second important function of accreditation is it does allow a law graduate to then go to literally every state, the District of Columbia, and some of our other U.S. territories or possessions, and qualify for admission. It’s accepted across our multiple jurisdictions. And with a federalist system, that’s very important because the admission to practice is regulated at the level of states, almost exclusively by state supreme courts.

 

      The ABA doesn’t determine who can practice law. That’s done by individual jurisdiction’s state supreme courts. So if a law student like me, when I was finishing, is going to go and try to practice in a state on the other side of the country from where I went to law school, it’s important that there be a uniform recognition. That has a lot of benefits for law students and for the legal profession.

 

      And then third, accreditation is something of a signaling device. It signifies to students who are contemplating going to law schools, to employers who are hiring graduates from law schools, that they’ve achieved a certain level of identified minimal studies that serve, we hope, to qualify people for admission to the bar and success in practice.

 

      So one thing that means, those multiple functions, is the Council has multiple constituencies. We are quite responsive to the Department of Education. We have to be if we’re going to remain the recognized accreditor. We are responsive, or we try to be responsive to what we understand to be the needs of students in terms of actually getting educations that will prepare them for admission and successful practice. And we’re also appropriately sensitive to what we hear from state supreme courts.

 

      Now, that by no means exhausts the constituencies. We hear a lot and often from deans and others involved with actual legal education in different roles. And one thing it, I think, reminds me of that it’s important to not forget, is when you’re talking about organizations like the Council, or perhaps more broadly even the ABA, you have to avoid the danger anthropomorphizing, of attributing to complicated entities sort of the type of design or deliberation or choice that an individual may have. In my experience, that is rarely true with respect to the Council, at least, and certainly with respect to the ABA.

 

      The standards as you might expect are complicated, given that they’re drafted by a committee, and given that they govern the activities of what, in essence, are lawyers. But they are fluid, and they’re adopted in ways that involve a lot of input from the different groups I’ve identified. As I think the remarks by both Judge Katsas and Professor Morgan reflect, the changes we’re going to talk about in the course of this program were initially -- consideration began in 2020.  There was public notice at a certain stage. That, then, has led to further consideration.

 

      The Council doesn’t do anything precipitously, which I sometimes think is perhaps a handicap. It certainly doesn’t do anything at the behest of leadership of the ABA, again in the sense of the ABA President or the ABA Council. We are continually trying to make sure the standards reflect the current needs and changes in the way education is provided and the needs of the profession.

 

      One illustration is that once the pandemic occurred, law schools, like other institutions and certainly other institutions of higher education, had to pivot almost immediately from in-person education to virtual education. And the standards, by and large, restrict law schools more so than other higher education programs in terms of the amount of distance education they can offer. So we had to go literally within a matter of months to almost entirely online education, and that was something that we achieved successfully, which is reflective of both work by the Council but even more so by law schools and their students and faculties.

 

      Longer term, we’re looking currently at what the regulations on distance education should be. We have also improved the processes in various ways. Law schools get accredited every ten years through a pretty rigorous process. But in the interim, they file annual reports on things like changes in enrollment, employment of graduates, attrition. And the Council’s become much more agile in terms of responding to that kind of information and trying to then follow up and make sure schools are keeping on track in terms of compliance with the standards.

 

      So in just a few minutes before I finish, I’m going to comment briefly on why diversity in our profession I think is so important, particularly from a perspective of preserving confidence in our legal system and the rule of law.

 

      So if you look at the census data that came out last spring, diversity index in the United States now over 60 percent. That means if you pick two people by random, the chances that they’re going to be from different racial or ethnic backgrounds is now almost two-thirds, a significant increase since 2010. Census data also showed that almost half of the children in the United States are diverse in terms of race or ethnicity. A quarter of the children in the United States have one immigrant parent, which I thought was a stunning statistic, and then I realized, well, my daughter-in-law has an immigrant parent. And that diversity’s only increasing.

 

      At the same time, we know from various surveys that among particularly minority communities, confidence in our justice system broadly has been declining. And this was true even before the incidents of the summer of 2020, such as the murder of George Floyd. We also know that over the last decade, diversity in the legal profession has stagnated. About 15 percent of American lawyers are diverse in terms of ethnicity or race. Now, we’re doing better in terms of diversity by gender. The percentage of practicing lawyers who identify as women have increased from about a third to 37 percent.

 

      And we certainly do better in diversity in our law schools and among law faculties, but even there, it’s relatively much less diverse than our current population or where our population is trending. I very much believe in the goals of increasing diversity among our profession. I don’t see it -- I see it more from the perspective of a former state chief justice in a very diverse state and wanting to ensure that there is widespread faith and support for the ideals of the rule of law that led me to want to become a lawyer in the first place.

 

      And I’m sure we’ll talk more about that and about whether the pending proposals for changes in the standards advance those goals or not. And again, I thank the organizers for putting this panel together.

 

Hon. Gregory Katsas: Professor McGinnis?

 

Prof. John McGinnis:  Well, thank you so much, and thanks to the section for inviting me. And I’m really very pleased to be with my old classmate, Scott Bales, today. He had a reputation as a very judicious fellow, even as a law student, which is rare.

 

      I’m afraid that I, though, find the new standards of the Section on Legal Education, I think they are substantively flawed, and I think they impose unwise and, in my view, sometimes illegal requirements on schools to consider such matters as race and ethnicity in faculty hiring and admission. And they more generally, I think, encourage a trend that’s already going on in our law schools, the trends towards wokeness and illiberalism.

 

      But even if I liked the substantives standards, I would still object largely to their imposition because these are ideologically freighted requirements on all school law schools, and therefore, they retard what I think is really important about legal education, the ability to experiment and innovate by individual law schools and not to follow the crowd.

 

      Let’s, as an example, begin with Section Standard 206, strength and requirement of a diverse faculty, where diversity is defined entirely in terms of demographic characteristics. It gives pride of place. It gives real focus to diversity with respect to race, ethnic diversity, and otherwise. I think that standard will sometimes perhaps often require race and ethnic gender consciousness in hiring. Otherwise, a faculty would find it impossible, I think, to satisfy at particular times, given competing demands of course coverage and scholarship that traditionally dominate faculty hiring in the selection.

 

      Moreover, the Council, I think, makes it clear that a school may need to consider such characteristics because it exempts only state schools in jurisdictions that actually forbid consideration of race and ethnicity and gender from being compelled to do so if they don’t have a diverse faulty. I think this blanket requirement is illegal. The legality of affirmative action in employment plans hinge on a particular institution’s determination about past discrimination in hiring minority groups. Most law schools have been hiring without discrimination for more than a generation or more.

 

      Moreover, there has never been a Supreme Court ruling to extend the diversity rationale of Grutter to employment, let alone to faculty hiring where considerations in favor of non-discrimination are even weightier. And in any event, the justification for Grutter’s diversity rationale depends heavily on the academic freedom of universities to make their own decisions about the need for such diversity. The one-size-fits-all mandate undermines rather than advances the academic freedom of law schools, which I think is an underpinning of the Grutter decisions.

 

      And I think even if these requirements were legal, they’d be unwise, certainly without a concomitant requirement to assure intellectual diversity because let’s look at the effects of these standards on intellectual diversity. Frankly at the moment, as the Anglican Church was said to be the Tory Party at prayer, law professors today are the Democratic Party at the lectern.

 

      A recent study by political scientists at Harvard and Chicago shows that at many schools, there are almost no representatives of conservative views among the faculty. And the authors themselves noted minority and female professors are even more left-wing on average than the median professor, creating an enormous tension between a push for diversity, defined by demographic characteristics, and the viewpoint diversity, which some schools might well think is the real diversity that is needed at a law school, given that law consists a lot about policy debates.

 

      Indeed, I fear that the standards indifference to viewpoint diversity suggests the Section is actually not interested in promoting what most people would think of diversity per se, but only racial and ethnic balancing. The blunt effect of the Section on Legal Education’s standards is likely to have everyone singing from the same political hymnal so long as the look different.

 

      And what is the justification for an accreditation agency imposing the standards on all law schools? Is there any study that shows that focusing on the demographic characteristics in hiring results in a better education for students, students of all races and ethnicities, than evaluating individuals solely on teaching and their scholarly achievements?

 

      I have similar concerns about Section 206’s imposition of similar, if slightly more weakly worded, diversity requirements, again, I think, entirely defined by demographic group identity in the student body. Now, even if sharing the interest in having a profession that’s open to all ethnic groups, we do, however, have substantial data suggestion that admitting some racial minorities with substantial lower credentials that other students weakens their performance at the bar, comparted to students with the same credentials who go to a school with students of the same caliber. So there’s an empirical question even about how to best diversify the profession.

 

      To be sure, there’s a debate about what has been called the mismatch hypothesis. But it shouldn’t be the role of an accreditor to prevent schools from acting on their own view of the relevant evidence and not giving a substantial preference on admission based on minority status, precisely because of their fear that this will not advance those people who are admitted, as opposed to going to a school where the students are of similar scores and grade point averages.

 

      Standard 206 also requires that schools maintain an equitable and inclusive environment and report each year what they’ve done about it. Now, equity and inclusion are undefined by these standards. But anyone on campus today recognizes that these are words that have become words of woke speak that can justify all sorts of ideas that anyone, an average person, I think, might think, well, inequitable and non-inclusive, such as skewing benefits to particular groups.

 

      And let me not say that this is just an abstract concern. This fall, I heard a diversity consultant at our law school say the following, saying that cold calling everyone via the time-honored Socratic method was non-inclusive. You might think it’s completely inclusive, you call on everyone, you grill everyone, because the Socratic method makes some students more uncomfortable than others. And this consultant also suggested that we have in every class, no matter what its subject matter, an acknowledgment of the history of white supremacy.

 

      And quite a few schools have decided—and you can look at their websites, the Loyola Chicago is a prominent one, I’m sorry to say in my own jurisdiction—have decided that to be inclusive they must proclaim themselves to be, quote, “anti-racist,” a frequently now Orwellian term, and even require prospective faculty hires to say how they will advance such ideological goals.

 

      The standards give no indication that these kinds of changes may not be required to create an inclusive and equitable environment. The standards only say that law schools are not required to censor or prohibit academic discussion by faculty of ideas that may be offensive. I find that hardly comforting. The standards don’t require crushing academic freedom in the name of wokeness, but they don’t forbid it either.

 

      Anyone in law school campus knows that these standards will encourage administrators to make their institutions more woke to avoid potential trouble at accreditation time, particularly given the reality that accreditation visit committees are likely composed or often composed of relatively liberal, even left-wing faculty members.

 

      A new provision in Standard 303 also requires that law schools shall provide training and education to law students on bias, cross-cultural competency, and racism at the start of the program of legal education and at least once again before graduation. This requirement breaks new ground by telling law schools what is the clear, the most important social problem related to the profession, so important that it must be addressed not directly in any subject related to law.

 

      As a group of senior Yale law professors said -- and there’s not a single conservative among these professors, and that’s not surprising. It’s Yale, after all. They said that these -- they understood the reality of these standards. They said that the new proposed requirements, these educational requirements attempt to institutionalize dogma, mandating instruction in matters that are unrelated to any distinctively legal skill. So a common theme of the problematic provisions is they represent ideologically left-wing efforts to impose uniformity on the nation’s law school without evidence that they will improve an attorney’s skills or their fidelity to law.

 

      Let’s just look at them. The left favors race and gender consciousness in hiring, whereas color blindness is the predominant position of the right and Republicans. The standards are concerned with demographic diversity to the exclusion, indeed to the detriment of ideological diversity. That’s also the position of the left. The idea, and I think this is represented in the standards about what needs to be taught, that structural racism rather than structural elite self-dealing that hurts the working class regardless of race, that that’s the besetting problem of American Society, I think also encapsulates nicely a fundamental difference between the right and the left.

 

      Judge Bales argues that the Council on Legal Education is independent from the ABA. And,  of course, as Professor Morgan has suggested, there seems to be a clear connection between its drive and the ABA’s now central focus. But I think more generally, it’s hard to believe that it’s not diffusely influenced by the political attitudes of the American Bar Association. I believe it’s—I may be corrected—its head is appointed by the ABA President. Many of its members, I think most of its members are ABA members. And frankly, the ABA has become a left-wing organization. The resolutions at the ABA’s annual meeting now resemble a wish list of the Democratic Party.

 

      Let’s just look at a few of recent ones: voting rights for the incarcerated, a minimum wage, abortion rights, prohibition on preventing biologically male athletes from competing in women’s sports, to name just a few. These are all controversial ideological positions. To be sure, some individual members of the ABA, including my distinguished colleagues on this panel, I’m sure have the best of motives. Even if not being academics, I’m not sure they’re fully alive to all the realities of how their language will affect the campus.

 

      The structural realities, I think, of ideological influence can’t be ignored. Let’s have a thought experiment. Let’s think that we had a structure -- we had the accrediting body. We had a Council on Legal Education that was connected as the ABA is, but not the ABA, but to The Federalist Society. And let’s assume that it was said to be independent of The Federalist Society, but had mostly members of The Federalist Society, who also I think undoubtedly have the best of motives.

 

      Despite their excellent motivation and the characters of the individual members, and despite that fact that unlike the ABA, The Federalist Society does not take ideological positions, despite that, I think people would be worried about the influence of The Federalist Society on this supposedly independent council that was in some way connected to it.

 

      Thus, I think just as the previous administration wisely took out the ABA’s Standing Committee on the Judiciary out of its privileged position in judging judicial candidates, so should the Education Department deprive the ABA and the Council of its positions as an accrediting body. After all, the reason for the Education Department’s involvement, I think, principally is to determine what institutions are likely to graduate students who will repay their student loans. That’s the federal interest.

 

      But these new requirements have nothing to do with this interest, which would be better served, in my view, by simply reviewing the loan default rates at various schools. In the interim, states can consider removing the influence of the Council from the processing of accrediting law schools. I think that change would lead to more experimentation and innovation in legal education, including innovation of how actually to diversify the profession, free from the ideological straitjacket of the current association’s standards. Thanks very much.

 

Hon. Gregory Katsas:  Mr. Thies?

 

Daniel Thies:  Thank you, Judge Katsas, and thank you everybody for attending and to the organizers as well for this program.

 

      I want to start out by mentioning another connection on the panel, which is that Professor Morgan, during his time in Champaign-Urbana, Illinois, became good friends with my grandfather, some of my uncles, and a number of many family members. So all of them speak very highly of him, and it’s an honor to be on a panel with him.

 

      I also attended these National Lawyers Conventions as a law student, now a little bit over a decade ago, and I always also remember being very impressed by Professor McGinnis, and his very cogent and witty positions on a number of things. So it’s also an honor to be up here with him.

 

      It’s fallen to me to defend the ABA’s diversity proposals, and I think it’s useful to point out that, handicap as it is, we’re actually in the middle of the process. So as has been mentioned, there was a proposal that came out last year. There was a notice and comment process. The Committee that I chair, the Standards Committee of the Council, considered that feedback. We came out with a new proposal last week, November 4. I circulated it to the panel the next day, so that we’ve all had a chance to look at it, and you can be the judge.

 

      I’m going to talk about it a little later on, what some of the changes are, but I think we’ve been responsive to a number of the concerns of the public and the law professors and other comments that we received. That’s the point of the process. That’s why we go through this, and all of you are invited into the process, not only to submit notice and comment, but like me, you could be somebody who volunteers to help out at the Section to go on a site visit, and you can be involved. That’s the beauty of professional self-regulation. So this isn’t some abstract bureaucracy in Washington that you’re not able to reach. We as lawyers can actually have an impact on it.

 

      So I want to start out to talk about diversity by mentioning three examples of a situation that a lawyer might confront in practice. The first, a black woman approaches you for estate planning. The key question that she has is why does she need a will? Why can’t I just name my heirs as joint tenants on her bank accounts and on her house? As a lawyer, you explain to her the typical answer about why that’s not a good idea, including that your children’s creditors then would be able to reach all your assets.

 

      But as the conversation goes on, it’s clear that she doesn’t trust you. She reveals a deep distrust of institutions like probate courts and banks that are deeply rooted in experience that she and her parents have had, when she’s been taken advantage of in the past. As a result, she doesn’t trust your advice. She walks out with no estate plan. And as result, she’ll be less able to effectively transfer her wealth to the next generation.

 

      Example number two, you’re preparing for a jury trial in a complex commercial matter that on its face is completely unrelated to race. In fact, it’s a contract matter where the issue fundamentally is whether or not the defendant was obligated to keep his promises. Tens or even hundreds of millions of dollars are at stake. You go through extensive preparation, including hiring a jury consultant. And after hearing your case, the jury consultant tells you that the district where the case is venued is likely to produce a significant number of minority jurors.

 

      He also says that the way that you’re planning to tell your story right now is not likely to appeal to those jurors who may have a different view of whether or not large companies are likely to keep their promises. As a result, he tells you need to adjust you presentation to take into account the way that minority jurors are likely to perceive your case. And you spend the next few weeks reworking your trial outline and preparing your witnesses to implement what you’ve learned.

 

      Third example, this client is a pro bono local nonprofit that owns low income housing in your community that is funded by U.S. Department of Housing and Urban Development grants. Financial issues, unfortunately, require the nonprofit to sell the housing, but it can only sell to another nonprofit that will uphold the terms of the grants. Your job is to make the case to potential buyers, a job that requires you to explain the need for low income housing. And that, in turn, requires you to understand the racially discriminatory patterns of housing that have existed in your community dating back to before World War II.

 

      So what do all three of these examples have in common? Actually, they’re all things that have happened to me in the last four years as a general practitioner in Champaign-Urbana, Illinois.  Not a place that is particularly known for its racial strife or racist history. And there’s dozens of others instances like that I could list, and I imagine lawyers from all over the country could you similar stories.

 

      All of these examples demonstrate why a minimally competent lawyer must have a basic understanding of race and the impact that is has on our society. It influences whether or not you as a lawyer are going to be able to be effective in achieving the goals of your client.

 

      Now, why do I say minimally competent? Well, that’s really the goal of the accreditation process, to set minimum standards for law schools and to make sure that they’re producing lawyers that are minimally competent to be able to function in our society. This, in fact, is the goal of the proposed changes to Standard 303 that have been discussed.

 

      The Standard says that students must be given education at least twice during their law school experience—and they don’t have to be full courses by the way, they can just be a lecturer or a session—but twice, education on bias, cross-cultural competence, and racism. Now, Interpretation 303-8 of the proposal specifies that we are not prescribing the former content of this education. That’s not the role of the accreditor. We’re just requiring that you talk about this on the theory that if you’re going to be a lawyer in our society, you have to have some understanding of these issues.

 

      Now, just as The Federalist Society, as we heard in the introduction to this talk, can sponsor CLE that gets you a diversity credit in various states, so too can law schools approach these topics from a conservative perspective if they wish. There’s no prescription one way or the other. In fact, contrary to what Professor McGinnis says, the Standards do protect academic freedom. In Standard 405, law schools are actually required to have a policy of academic freedom that allows teaching from all ideological perspectives.

 

      Second, it’s also the goal of the proposed changes to Standard 206. One of the changes that was a response to the comments is that the preamble now says that the goal of the new standard is to achieve the effective educational use of diversity, which ties it directly to this purpose of lawyers understanding the context in which they will be practicing, including, particularly, giving them other teachers who are from different minority groups so they can understand different perspectives.

 

      Now, this is based on the conviction that law schools will not be as effective at teaching the skills a lawyer needs to confront the scenarios that I outlined above if it doesn’t include members of underrepresented groups who are able to represent those perspectives form a first-hand basis.

 

      Now, I want to stress that the philosophical basis, at least in my mind, for why the Council is undertaking the things is not because we want to impose wokeness or critical race theory on the law schools. It’s not a radical leftist agenda, which I don’t think would be appropriate for an accreditor to undertake. Instead, I see these things as coming in from what I would call a Burkean conservative perspective, which can be summed up in two words, which is that culture matters.

 

      Navigating the world requires a nuanced understanding of circumstances, including the history of race in our country, and not the blind application of ideology. And this, in turn, requires an exposure to a variety of ideas and a variety of backgrounds so that we can fully understand the culture in which we will be operating as lawyers. Law schools that don’t provide this are not serving their students well, and they are not serving the public well either.

 

      Now, of course some law schools are and will continue to teach critical race theory. There are a number of leftists in American law schools. That’s probably unavoidable, and it would not be the ABA’s place to ban that any more than the ABA would be able to prescribe it. But I do think that it’s important that the accreditation standards carve out a space for law schools that do not subscribe to the reigning orthodoxy of the day. And we do that in the new standards in at least three ways, or four ways actually.

 

      First, as Interpretation 303-6, which interprets the requirement to provide training on bias and cultural competency, again says that we’re not prescribing the content of that education. That’s up to the law schools. Standard 206, when it requires an inclusive and equitable environment with respect to certain underrepresented groups, specifies that that rule does not require law schools to censure the academic discussion of ideas that may be offensive to some. To the contrary, Standard 405 protects academic freedom. And I think law schools would get in trouble if they started censuring speech in the classroom with which they politically disagreed.

 

      New Interpretation 206-4  also says that to the extent the Standard requires a religiously affiliated law school to provide an environment that’s inclusive and equitable with respect to sexual orientation or gender identity, the school need not act contrary to its religious beliefs, as long as those actions are protected by the U.S. Constitution.

 

      And finally, Interpretation 206-5 says that if there is a state constitution or other law that prohibits the consideration of race or ethnicity in hiring that the law school’s not required to violate that law.

 

      Now, I want to respond briefly to Professor McGinnis’s comment about the need for ideological diversity in law schools. I support that goal. I think it’s one of the main goals of The Federalist Society, and it’s a wonderful thing when law schools are filled with diverse political perspectives.

 

      But I think it’s dangerous to have an accreditor making ideological judgments about who is sufficiently conservative to check the quota of conservatives that the law school needs to be accredited. For example, does Akhil Amar or Amy Chua qualify? These are difficult questions, and if you get an accreditor in the business of making ideological judgments, I think it could be very dangerous where that might end.

 

      An accreditor can’t mandate ideological diversity. What it can do, again, is protect academic freedom. That’s Standard 405. And it can also carve out a space for accredited law schools that, again, dissent from the prevailing view. For example, Ave Maria Law School, accredited by the ABA; George Mason Law School, accredited by the ABA; Regent, accredited by the ABA; Faulkner, Brigham Young, and there’s a number of other law schools that generally have a conservative perspective and have a large number of conservatives on their faculty. They’re allowed to exist under the current standards, and they will continue to be allowed to exist under the current standards, if it were up to me at least.

 

      I also want to respond to the point about the danger of imposing wokeism in law school and what the meaning of inclusion and equity means. There actually is an interpretation of the standard that says what kind of actions a law school might take to promote inclusion and equity.

 

      Among them is not suppressing the speech of others. It’s not there. And that’s not the goal. Again, that’s protected under Standard 405. Instead, that standard is about providing support for underrepresented students who, for example, may be the first generation of their family to attend college or law school. What sort of additional support might they need? That’s the kind of question we want law schools to be asking.

 

      It’s also about teaching civility, which I think is crucial to the legal profession, where we can disagree on fundamental and important questions without attacking each other personally or doing it in a way that makes others turn off the conversation because they feel threatened. Students have to be introduced to this tradition, and it’s the role of law schools to be able to inculcate those values so that the next generation will be as capable of civil debate as I hope we’re demonstrating on this panel.

 

      A final point about the ABA’s role in accreditation. Judicial independence is an extremely important value in our society. It’s part of the separation of powers. It’s one of the ways that we keep our government in check. And you can’t have judicial independence if the very government that you’re trying to keep in check is the entity that describes who should be allowed to be a lawyer and be allowed to access the courts. As a result, it’s crucial that we have an independent body, not the legislature, not Congress, not an agency in Washington, that is deciding who can and cannot become a lawyer.

 

      That’s why the ABA has been in this business for almost 100 years now. And it’s why the ABA, I think, should continue to be in this business on into the future. Thank you.

 

Hon. Gregory Katsas:  Okay. We are running a little bit behind, but I do want to give all the panel members a couple of minutes to respond to anything they’ve heard. So let’s aim for two minutes per panelist, but go ahead, Professor Morgan.

 

Prof. Thomas Morgan:  Thank you, Judge. I think it’s important to stress that in at least three areas, at least I believe the panel is largely in agreement. First, there has been no dispute about the ABA Standards for equal opportunity in education. That, at some periods in our history, would have been a fight. But everybody recognizes, I think, that the idea that individuals should be welcome in the legal profession, whatever their background or makeup, is an important value that we all respect.

     

      Second is the idea that everybody largely agrees that diversity as a concept is important. That is to say, we are in a diverse society, and there is value in having diversity throughout the institutions of the society so that people do have confidence in their institutions.

 

      Third, I agree with Daniel Thies that cultural sensitivity is an important value and is a part of being a responsible lawyer. What I think that the ABA has left out, and even some of them may misunderstand, is that law schools operate in markets all the time. You don’t get to dictate what the percentage of your black students are going to be. You have to find them and recruit them in order to get them to come your school.

 

      In short, and I’m using -- I’ll just try to move more quickly here. You have to do your best, and you have to convince the accreditors that you’re doing your best. But what the ABA has set up in their proposal, even the new one, Daniel, is the burden of proof on the law school, and then suggestions of safe harbors which amount to very detailed surveys of very personal attitudes and information about all sorts of characteristics. And that’s where you go astray.

 

      The proposals for years have required efforts in this area. And when we did the visits, we would interview faculty and administrators and everybody else involved in the question of whether or not you are seeking to develop a more diverse faculty and student body. But we recognize that in a real world environment, you can’t make the numbers come out right year after year. And if your accreditation turns on it, then you get too much focus on meeting those numbers instead of all the other things you have to do to build a quality law school, and ultimately, a quality legal education.

 

      We respect you. We respect all the efforts that you’re putting in in a very complex environment to develop these standards. But I think there is work left to be done.

 

Hon. Gregory Katsas:  Justice Bales?

 

Hon. Scott Bales:  I think Professor Morgan does make an important point on the agreement as to ultimate goals. And certainly with respect to 205 and 206, those are standards that have been in place. Indeed, some of the changes in 206 reflect a response to schools that were asking for more clarity in guidance. We certainly can debate over whether the changes do, in the most effective way, help us achieve, perhaps, shared goals.

 

      I can’t resist wanting to respond briefly on 303 and the comments by Yale professors about how they relate or do not relate to practice skills. As a Harvard graduate, I never thought of Yale as place where a person went to learn how to practice. I always thought that was the ethereal law school.

 

      But let me just mention three things quickly. And, again, 303, the new Standard, directs that there be some education on issues of bias, cross-cultural confidence, and racism. On bias, the rules of the Model Code of Judicial Conduct says that judges shall not manifest bias or prejudice, and they shall not allow lawyers appearing before them to do so. That means it’s a core element now of professional competency.

 

      In terms of cultural competency, that’s something that’s long been practiced by law enforcement, and the health care professions, by the military. And I know as a prosecutor in Arizona, I could not have effectively prosecuted violent crimes off our Indian reservations without some sensitivity in terms of cultural competency. Things likes whether you firmly shake a person’s hands or look them in the eye mean very different things in that cultural context than it might have meant from the cultural context I came from.

 

      And finally, as to racism, I noticed this summer when Justice Alito wrote the majority opinion in the voting rights case Brnovich v. DNC, he observed that the history of racially discriminatory denial of voting rights that was the backdrop to things like the Voting Rights Act is something that all Americans should remember. Certainly, it’s something that all lawyers should remember if we’re truly committed to upholding the ideals of our Constitution.

 

Hon. Gregory Katsas:  John?

 

Prof. John McGinnis:  Let me just begin by saying that I actually don’t think the best idea is for any accreditor to impose ideological diversity. The difficulty with these standards, though, is that they’re going to reduce ideological diversity, as even a study by Harvard and Chicago Law professors suggests, that that focus is in tension with that. And I think the reason that ideological diversity is important to think about is to recognize how these standards will work.

 

      There’s a connection between the rules that are given and those who are carrying them out. And my largest concern is not only the vagueness, I think, of the rules and use of the word equity and inclusion, but the reality that those words are going to be interpreted in very left-wing institutions and used to make them even more -- to create even a greater pall of orthodoxy.

 

      So the way I think of this is that we already have a lot of ideological distortions at law schools, primarily because there is so little ideological diversity. And that’s the kindle, and these standards are little sparks that create even more fire there. So in a world where we had extremely ideologically diverse law schools, maybe these standards wouldn’t be as problematic as they are. But that’s why I think it’s important to understand the interaction between these standards and the law faculties that we have and how they will be used to create a more woke education, relied on in that respect. And indeed people will openly say, well, the accreditation -- why get in any trouble with the accreditation standard? Let’s go farther in this respect.

 

      And the only other point I just emphasize is that I don’t think the standards take seriously enough the fact that there is a large debate about where -- it’s not a question of whether we should admit completely, with every standard of non-discrimination, people from all ethnic groups. But the question is what degree of preference to give different groups. And that is a deep, deep question about actually even how to advance diversity.

 

      I don’t think these standards, and particularly how they will be applied on the ground, take sufficient account of that. And that, I think, is perhaps the greatest tragedy because I fear, as someone who’s somewhat sympathetic to the mismatch hypothesis, that this actually will be harmful in the long run to diversifying the profession.

 

Hon. Gregory Katsas:  Daniel, you’ve had a little bit of rebuttal so far, but just briefly, if you have anything else.

 

Daniel Thies:  Sure, yeah. There’s plenty to talk about here, for sure. So I think it’s useful to point out in response to some of the comments that they’re really two animating principles behind the standards as expressed in these proposals.

 

      One is the idea that we should be focused on outcomes and not inputs. So if you know the history of this process, the standards used to be littered certain number of volumes needed to have in your library and various input measures of things that we were prescribing. We’ve now moved to an outcome standard where the idea is you say more generally what the goals are and give law schools flexibility to achieve that. That’s what we’ve tried to accomplish here by not being too prescriptive about how you promote diversity but saying that it’s something that law schools should care about.

 

      The other factor is, of course, that we want to avoid quotas. And I think it’s important to note that the revised proposal took out some language that there was some concern that it did prescribe quotas. But I think the new standard is clear that the results that we’re looking for here are not just a certain number of minorities. We’re talking about effective educational use of diversity. So the point is what’s going on in the classroom? How are lawyers being trained? And that’s the focus of the standard, not quotas.

 

      And last point, to respond to Professor McGinnis, I totally get the concern that law faculty are going to take the standards and run with them to promote whatever ideological goal they might want to promote. That’s what lawyers do. We take the tools that we’re given. The solution to that, though, is transparency and guidance from the ABA. And we’ve been trying to achieve that in recent years through managing directors, memos about what various standards mean, educational programs where we talk to faculty and deans and explain what’s required. More of that is necessary, and I think we need to do a better job of that.

 

Hon. Gregory Katsas:  Let me just ask you -- let me give you a hypothetical, picking up on John’s point about how this inclusive environment standard is going to interact in the real world in the law schools as they are. What would you say to a situation where a diversity officer takes the position that membership in The Federalist Society is triggering, and uses that as a basis to threaten their law license, and harass them, and such? And that is actually going on right now at a very major law school that’s well represented here.

 

Daniel Thies:  I think The Federalist Society is about academic discussion of ideas. And the new standards as proposed say that law schools are not required to censure or prohibit the academic discussion of ideas. So, absolutely, I think that would be very problematic if a diversity officer is saying that. There’s nothing in the standards that required that. Again, academic freedom is protected, and I think there’d be an argument that the school would be in danger of violating 405 if it went down that road and excluded an entire ideological group from campus.

 

Hon. Gregory Katsas:  Okay, let’s go to questions. We don’t have a lot of time, but we’ll try to do as many as we can. Please.

 

Questioner 1:  So I have a question about minimum standards. And this panel’s very Harvard-y, so let’s use a Harvard example. There’s 182 full-time faculty at Harvard Law; five by my count are conservative, give or take five or six. And my worry is not with the conservative students in the classroom. They know both sides of the arguments. It’s about the kind of soft liberal students. They’re never taught the other side. Is this a problem for being critical thinkers, for being a lawyer that’s able to represent multiple positions?

 

      Are we not equipping -- it’s kind of odd to think about it at a FedSoc conference, but are we being bad stewards of the faculty for those people who are conservatives, who are being exposed to different ideas? And so, Mr. Theis or Justice Bales, I’d be curious to hear your thoughts on that.

 

Hon. Scott Bales:  Well, I have to -- it’s hard not to talk from one’s own experience. When I was at Harvard, it was in the midst of the controversies about critical legal studies. And you probably could have, at that time, said that the number of conservative professors was a few as it was today. But as I said, Paul Bator was one of my mentors. My third year paper advisor was a guy named Douglas Ginsburg. I edited a law review article by someone named Charles Fried.

 

      So there are certainly perspectives of conservative voices in the school. And after all, we are talking about adults. In my experience, law students aren’t -- they’re fairly quickly independent-minded, and they have access to a diversity of views.

 

      I share the concerns that Daniel Thies voiced about if the accreditors were to try to control diversity, and I think if you look across American law schools -- I get the view that, look, you take polls, and most professors are on the left side of their politics. But I think within schools, there is still a diversity of perspectives, and I don’t think students are denied an opportunity to hear a variety of views.

 

      If I were a dean, I’d want to ensure that I did have a faculty with differing views, and I’d hope that there would be way that students in the course of their careers would be exposed to different perspectives and taught to think critically themselves. And I think that’s one of the most important things that a law school education provides, that you think critically, and you engage others civilly in trying to come to your own reasoned views.

 

Hon. Gregory Katsas:  Next question.

 

James Dimmer:  Yes, my name is James Dimmer. I’m a student at George Washington. Oh, in the back? Oh, he can go.

 

Hon. Gregory Katsas:  I can’t see, sorry. Do we have two mikes? Yeah, okay. Next question from the back.

 

Questioner 2:  Sorry about that. Yeah, really quick question, it was discussed earlier that one of the proposals is to have some measuring performance among different demographic backgrounds. Is there a disclosure requirement to say how certain groups are performing in terms of their class?

 

      Let me just give you where this question’s coming from. People in this room might be familiar -- I’m Georgetown alum. There was recently a situation where professors were having a discussion on a Zoom call. One of the professors made the comment, to her chagrin -- she wasn’t boasting about it, but she said. “I have some African-American students in my class. They perform well in class, but when the grades come out, they’re towards the bottom of the class.”

 

      That created an uproar. There was a letter that came from the dean. I thought it was quite, actually, embarrassing because it starts bringing up concepts of bystander liability because the other person on the phone call -- what wound up happening is I think both professors -- one got fired, one left. And it’s not me to defend liberal professors getting hoisted on their own petard, but that happened.

 

      And the one thing that wasn’t in the letter was is there any objective statistics that the dean could share to show how students are preforming at the law school? And no one wanted to touch that one.

 

Daniel Thies:  There’s a couple things there. I think that the language that was referenced about looking at academic outcomes and so forth was removed from the latest proposal. What is in the latest proposal is a requirement that law schools report in what’s called the annual questionnaire data that the Council requires that reflects their performance in satisfying the diversity standards.

 

      So there is a set of data that the ABA requires. It includes ethnic and racial data of students, and also of outcomes, and outcomes in the sense of who graduates and who passes the bar as measured by race. So yes, absolutely, if there’s a school where lots of African American students are matriculating but not graduating, or graduating and not passing the bar, that could be very much a problem with the standard.

 

      In terms of making it public, I think that’s a discussion that’s ongoing among the Council. There has been a decision recently to release bar pass data aggregated across the country by race and ethnicity. And I think there’s been discussion also of doing that on a school by school basis, but there continues to be discussion on that point.

 

Hon. Katsas:  From the front.

 

James Dimmer:  Okay, sorry. I’ll try this again. I find it a little problematic that we’re equating race with what I think are class issues. I think if you go into any poor white neighborhood basically in America, you’ll be able to find people who aren’t friends of banks or corporations.

 

      Speaking of myself, I grew up homeless. We often didn’t have electricity. And then I ran away when I was sixteen and spent the next five or six years on the street. So I’m just curious why someone who might have a darker complexion than me that grew up relatively wealthy and agrees with 95 percent of what 80 percent of the law school class would agree with would have more diversity than a conservative very, very poor student like myself. Thank you.

 

Daniel Thies:  Well, the revised proposal, I think it’s worth pointing out in the language on students says, “A law school shall ensure the effective educational use of diversity by providing full access to the study of law and admission to the profession to all persons.” All persons, same language as the Constitution, so that would include race, class, all sorts of differences. All persons need to have full access to law school.

 

      And it goes on then and says, “particularly members of underrepresented groups related to race and ethnicity.” And there’s been a lot of debate about whether or not there should be a focus on those two groups, but I think what’s carried the day in the debate so far is that there is a unique history of historical injustices when it comes to race and ethnicity in this country. And the standard is meant to take account of that, and to say that those groups require some particular attention, but not to the exclusion of other diverse categories, rather based on class or otherwise.

 

Hon. Gregory Katsas:  Professor Morgan?

 

Prof. Thomas Morgan:  Just quickly, part of that question illustrates part of the real problem that schools are facing. There are trade-offs all the time as to how you -- and the problem of how you make decisions among very valuable objectives. You can’t meet them all with the resources you have. There really are decisions that have to be made. And I just suggest, and I don’t mean it’s easy, that you need to make clear, Daniel, what the opportunities schools have are to meet these important objectives.

 

Hon. Gregory Katsas:  We are almost out of time, but let’s try to squeeze in one more from the back.

 

Questioner 4: Sure. Mr. Thies, you expressed a concern about judging whether someone’s conservative enough. You don’t want to be in that business, but why aren’t concerned about judging, am I black enough to bring whatever perspective eyes a black person is supposed to bring if I’m going to be a faculty member?

 

Daniel Thies:  Well, I think we do have a long history of measuring that in our country, imperfect, to be sure. But the Department of Education has collected racial and ethnicity data for a long time. The ABA uses their categories, and they allow students and faculty to identify which racial category or categories they fall into. And admittedly, that’s an imperfect measure. It may not capture everybody the way they want to be captured, but it is a way of getting some data on this point that I think can be useful for the purposes that we’ve talked about.

 

Prof. John McGinnis:  Can I just --

 

Hon. Gregory Katsas:  -- Go ahead, John.

 

Prof. John McGinnis:  You say it’s imperfect history. And, of course, the point is some people think it’s a dreadful history that we’ve been doing this. And the argument for color blindness is, actually, of course, that by getting away from looking at these considerations, we’re actually going not to perpetuate that history.

 

      Now, I understand there are responses on the other side, that we need to look at this history to get beyond it, that we can quote different Supreme Court Justices. But I don’t understand why it’s the role of the accreditor to make those kinds of very difficult, ideologically fraught decisions. We could have a debate about that, but it doesn’t seem the central issue. It doesn’t seem to be central or even the responsibility of an accreditor to make those decisions rather than allowing them for different law schools to make those decisions. We’ll see who has the better atmosphere in the law school, who actually has an atmosphere where people are treated without regard to the color of their skin.

 

      There’s real tensions. And I speak from experience of having a law school where people have a consciousness that some people are admitted with different standards, and that creates real tensions within and law school, and does not, I think, ultimately promote a society in which people deal with one another as individuals. That’s the debate, and it’s a great debate to have politically, but I don’t think it’s a debate to have, or for the accreditor to put one thumb on the side of that debate.

 

Hon. Gregory Katsas:  It’s now 12:31, which means we’re a minute over time. It is time for the Rosenkranz Debate. I’m sorry to the folks in line, but please join me in thanking the panelists for an excellent discussion.

 

[Applause]

 

11:00 a.m. - 12:30 p.m.
Second Amendment: Next Steps in the Unfolding Litigation Battle

2021 National Lawyers Convention

Topics: Constitution • Second Amendment • Supreme Court
East Room
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". This panel explored "Second Amendment: Next Steps in the Unfolding Litigation Battle."

The U.S. Supreme Court famously decided many Second Amendment cases in its Heller and McDonald cases. Yet much remains uncertain. In its first significant Second Amendment case in ten years, the Court is poised to decide the extent of citizen rights to carry firearms outside the home. Our panel will discuss the oral argument (scheduled for November 3), the merits, the procedure, as well as possible outcomes.

Featuring:

  • Mr. Jonathan Lowy, Vice President, Legal & Chief Counsel, Legal, Brady Campaign to Prevent Gun Violence
  • Prof. Mark W. Smith, Senior Fellow of Law and Public Policy and Presidential Scholar, The King’s College
  • Mr. David H. Thompson, Managing Partner, Cooper & Kirk PLLC
  • Moderator: Hon. Thomas M. Hardiman, U.S. Court of Appeals, Third Circuit

Speakers

Event Transcript

Dean Reuter:  I want to introduce our moderator, Tom Hardiman. I’ve asked our moderators -- Judge Tom Hardiman, I should have said. I apologize. I’ve asked our moderators to introduce panelists briefly so we can get right to the substance and save as much panel time for discussion as possible. So I’m going to introduce him only as the Judge on the Third Circuit of the U.S. Court of Appeals. I think his most important credential is he’s the father of Kate Hardiman, who’s here with us in the first row.

 

      So thank you for being here. Judge, thank you for moderating this panel. I’m really looking forward to the discussion.

 

Hon. Thomas Hardiman:  Thank you, Dean. It is indeed a wonderful transition to start to be known as Kate Hardiman’s father, so I happily accept that moniker.

 

      It’s a great pleasure to be here with you on this panel called “Second Amendment: Next Steps in the Unfolding Litigation Battle.” As everyone in this room knows, I’m sure the Supreme Court wrote a landmark opinion in 2008 in the Heller case involving gun regulation here in the district. That was followed up two years later in Otis McDonald’s case against Chicago which made the Second Amendment incorporated against the states, like almost all of the other rights contained in the Bill of Rights. And just recently, on November 3, the Supreme Court heard oral argument in a very important case after a relatively lengthy period of time with little said on the matter.

 

      So we have an expert panel here today to fill in all the blanks. And we’re going to do this in two sections. We’re going to start by focusing on the New York State Rifle & Pistol Association case that was just argued versus Bruen, and we’re going to have each of our experts present on that case. And then we’ll have a little bit of debate and discussion on that. And then after, we’re going to get into the broad range of issues beyond the issue raised in that case.

 

      I’m very honored to be moderating with three great experts. Our first speaker will be David H. Thompson, the managing partner of Cooper & Kirk, PLLC, here in Washington. He joined the firm at its founding. Mr. Thompson has extensive trial an appellate experience in a wide range of matters and has secured victories worth billions of dollars.

 

      He’s litigated in cases—I have litigation envy when I read this—he’s litigated cases in over 30 federal district courts and argued in each of the 13 federal circuit courts of appeal and before the United States Supreme Court, as well as many state courts. Mr. Thompson was awarded his bachelor’s degree, magna cum laude, from Harvard where he was Phi Beta Kappa, and his law degree from Harvard as well in 1994 with honors.

 

      Please welcome David Thompson.

 

David Thompson:  Thank you, Judge. And thank you so much to The Federalist Society for putting together this panel. It’s really an honor to share the podium with Judge Hardiman who has had such a distinguished record on the Third Circuit, and to share it with Jonathan Lowy and Mark Smith who are two of the most knowledgeable and skilled Second Amendment scholars and advocates in the country.

 

      I want to start my remarks in this round by talking about the Bruen case, talking about that New York case the judge referenced. Just a little bit of background, in over 40 states, I believe it’s 43 states, in America and the District of Columbia, you have a right as a law-abiding citizen to have a permit to carry a firearm.

 

      But there are a few states on the coast, New York, New Jersey, California, Maryland, Massachusetts, where you can’t get a permit to carry a firearm unless you have a good reason. What counts as a good reason? Well, let me tell you one thing that doesn’t count as a good reason, which is being a law-abiding citizen who wants to carry a firearm for self-defense. That’s not a good reason, and it’s not a good reason even if you live in a crime infested area.

 

      Now, the First Circuit, the Second Circuit, the Third Circuit, over a compelling dissent by someone I won’t mention, the Fourth Circuit, the Ninth Circuit all upheld these laws, and the D.C. Circuit struck them down. So there was a clear split in authority. And in June of 2020, a cert petition was filed challenging New York’s law. And there was a clear split. There was a lot of expectation that there would be a grant in that case, and there wasn’t.

 

      And then just a couple of months later, a similar petition by the same lawyers challenging the same type of regime and the same issues and the same arguments was granted. What had changed? Well, Justice Ginsburg had been replaced by Justice Barrett. So if you need any further evidence of the significance of that change, look no further than the Second Amendment.

 

      What are the issues that the Court is going to have to confront? The first is the proper analytical framework. Heller emphasized text, history, and tradition as the basis for striking down D.C.’s ban on the possession of a handgun. And the lower courts have pretty consistently declined to follow Heller’s approach. They’ve reasoned that text, history, and tradition only apply to the core of the Second Amendment, and they say the word keep, that’s in the core, but the word bear, two words later, that’s not in the core. That’s in the periphery and the penumbras, and so they don’t apply text, history, and tradition.

 

      Instead, they apply intermediate scrutiny. And the analysis goes something like this. Public safety is really important. This law relates to public safety. Legislatures know a lot more about that than we do. Viola, you don’t have any Second Amendment rights. That’s what the lower courts have been saying.

 

      Now, Chief Justice Roberts during the Heller oral argument said, “These tiers of scrutiny, aren’t they like a barnacle that’s attached to parts of the Constitution? This isn’t part of the actual original framework.” And he’s absolutely right.

 

      If you look at the history of the tiers of scrutiny, you’ll see that it was an invention of left wing activist judges in the 1960s that, when text and history forbade them from reaching a desired policy result, then they reverted to and created tiers of scrutiny, basically saying, “Well, yes, we know the text and the history says that you have a right to X, but we tell you as judges that there’s really an important reason, a compelling reason, why you don’t have that right.”

 

      You don’t have to look any further than, for example, affirmative action. You would have thought the word equal meant equal, and yet we are told, at least for 25 years under Grutter, that equal doesn’t mean equal. If there’s diversity, there’s compelling interest.

 

      So that’s the first thing they’re going to have to look at is what is the proper analytical framework. And anyone who’s interested in this, I would commend to you Joel Alicea’s and John Ohlendorf’s article in the 2019 National Affairs. Their amicus brief was cited to and referenced by Justice Kavanaugh in the oral argument. And it’s really a masterpiece showing the intellectual bankruptcy behind tiers of scrutiny.

 

      Fortunately, I don't think there’re five votes on the United States Supreme Court to erase the Second Amendment through intermediate scrutiny. Instead, the Court is going to start with the text of the operative clause, which says the right of the people to keep and bear arms shall not be infringed. How much clearer could they have been? If we were all gathered around a table, and we wanted to create a robust right to own and carry a firearm, I think we’d be hard pressed to do better than that.

 

      And certainly, if you look at the founding time, you look at Samuel Johnson’s dictionary, you look at Noah Webster’s dictionary, then, as now, bear means to carry. And that makes sense because if we think about the purposes identified by Heller behind the Second Amendment, it’s self-defense. Obviously, that takes place in and outside of the home. It’s hunting outside and fighting tyranny. That’s outside too, last time I checked the history of the Battle of Lexington and Concord.

 

      So the text really ought to dispose of New York’s law. But if there were any doubt, we could look to the history. And we would look at treatises from Blackstone that said that there’s absolutely a right to carry a firearm outside the home. We could look at the practice of the founders. If we look at the first seven presidents of the United States, all of them were alive at the time of the adoption of the Second Amendment, and all of them were carrying on a regular and frequent basis.

 

      And so this puts the United States Supreme Court to a test, and there’s no middle ground. They either have to brand the first seven presidents of the United States habitual criminals, or they have to find that there’s a right, and there was a right, and there is a right, to carry a firearm outside the home. Spoiler alert, they’re not going to brand them criminals.

 

      The laws that were in place at the time of the founding also confirm that there was a right to carry a firearm outside the home. In fact, in many states and colonies, you were required to carry a firearm to church and on other occasions. There were also laws that prohibited slaves from carrying a firearm. Well, if there really was a general prohibition and no one had a right to carry, why would you have this entirely superfluous law saying slaves can’t carry either? So that’s further evidence.

 

      The other problem New York has is the dog that didn’t bark in the night. They cannot find one, not one instance of anyone in the entirety of Colonial American history who was arrested for carrying a firearm peaceably in defense of themselves. Now, you might say, yeah, but people were angels back then. You really didn’t need to carry a firearm.

 

      [Laughter]

 

      But if you look at the murder rates in Boston, Philadelphia, and New York, they were multiples higher than even under Bill de Blasio’s New York.

 

      [Laughter]

 

      So there was a need to carry a firearm back then for self-defense.

 

      You might say, well, what does the other side have to say about this? Well, they have five arguments on history, and let me just run through them quickly. Number one, they point to the Statute of Northampton, a 1328 English law. And in fairness, there were some American colonies, Virginia, Massachusetts, that had analogs to the statute of Northampton at the time of the adoption of the Second Amendment.

 

      But remember, Virginia, Massachusetts, the first six presidents came from those two states and regularly carried a firearm. Thomas Jefferson said to his nephew, “Let your gun be your constant companion.” So again, the practice of the founders shows, and court decisions as well, show that those laws were not understood to be a prohibition on peaceful carriage. The Statute of Northampton and its analogs prohibited carrying to the terror of the people. You couldn’t terrorize people with a firearm, but you could peacefully carry for self-defense.

 

      The second historical argument they make relates to a Massachusetts law from 1836, a so-called surety law. Now, the first point is 1836, all the founders are dead, so what does an 1836 law tell you about what the founders think? I would submit precious little.

 

      But leaving aside the fact that it’s too late, it wasn’t a ban on carriage. Here’s how it worked. If someone in the community identified you as a menace to society, and if a judge found that you were a menace to society, you could carry a firearm, provided you posted a bond so if you misused it, you would lose the bond, and that’s how it worked. That’s not a ban.

 

      And moreover, if you think about it, the invocation of that law explodes New York’s view of history. Why? Because they are postulating that before 1836 in Massachusetts, there was a complete ban on carriage, and nobody could carry. And then they say in 1836, one and only one type of person was permitted to carry, people who were deemed to be a menace to society and posted a bond. That can’t possibly be right, and there’s not a scintilla of evidence to demonstrate it or support it.

 

      Now, the third point they make is that there were bans on concealed carry in the early 19th century, and they’re right about that. But there was litigation over those bans, and courts consistently upheld those bans on concealed carry but expressly and explicitly because they permitted open carriage. And our position in litigating these cases has been that as long as the state allows carriage, it could be open, it could be concealed, then the Second Amendment has been honored.

 

      Now, the fourth thing they point to is the Wild West. I was a little surprised that they were pointing to the Wild West as a paradigm of lawfulness and the North Star of constitutional adjudication. Was there right to gay marriage in the Wild West? Were all the other provisions of the Bill of Rights honored in the Wild West? But even if we were going to look at the Wild West as compelling evidence, it’s too late, number one. It’s after the Civil War. And number two, it was only a tiny minority, Tombstone, Arizona, Dodge City, where they had these types of bans.

 

      The fifth argument they make relates to the idea that, well, you had a right to carry in rural areas, but you didn’t have a right to carry in a densely populated area. Now, remember what Thomas Jefferson said to his nephew, “Let your gun be your constant companion,” not your companion except when you’re around other people.

 

      And remember what John Adams, who defended the officers in the Boston Massacre trial, and that incident, the Boston Massacre, took place at State Street. And then, as now, it is one of the most urban environments in the United States. And even though it was an admission against his clients, John Adams conceded that yes, the Bostonians, the ordinary citizens, had a right to be armed at the site of the Boston Massacre. So that argument I don't think is going to carry the day either.

 

      Mark, I know, is going to talk about some of the social science and the modern-day realities of carriage and what that means, but there was one just precious colloquy between Justice Alito and the lawyer for New York that I have to highlight. The lawyer from New York expressed complete horror at the idea that there might be guns in the subways of New York. And Justice Alito said, “Well, how many guns are there today in the subways of New York?”

 

      And the wheels started spinning. And by my count, the New York City Police Department has seized 50,000 guns over the last decade, illegal guns, in the City of New York. And that’s obviously only a tiny fraction of the actual number of guns. And so there are guns in the New York City subways today. The only thing is it’s the criminals who have them, not law-abiding citizens, and that’s not the system that the founders set up.

 

      Now, there was a lot of discussion in the oral argument about sensitive places, the idea that, well, you don’t have a right to bring a gun anywhere. And that’s true. You could not bring a gun into a courtroom, for example, at the time of the founding. And I think the key thing on this sensitive places is to really watch this and make sure that this exception doesn’t swallow the rule. The guide star should be text and history.

 

      And what does the history say about this? There’s an amicus brief by the Independent Institute. It walks through that there were certain narrow exceptions, for example, a courthouse. Why would a courthouse be a gun free zone? Well, the answer is because there was a bailiff there, and the bailiff would keep the peace.

 

      I think the modern-day analogue would be when you’re on the other side of TSA, you don’t have a reason to carry a firearm. The government is keeping you entirely safe. Likewise in schools, the University of Virginia adopted a ban on guns by students, not teachers, by students while Jefferson and Madison were on the board of visitors.

 

      So those are two of the limited, narrow, historically-based exceptions and limitations on the right to carry. It’s not everywhere at every time, but text and history should be the guide stars. Thank you.

 

Hon. Thomas Hardiman:  For those of you standing, there are plenty of seats over here. It might be a good time to make your way over if you’d rather sit.

 

      Thank you, David. Our next presenter is Mr. Jonathan Lowy. He is chief counsel and vice president, legal, at the Brady Campaign to Prevent Gun Violence. Since 1997, he has represented victims of gun violence in lawsuits to reform dangerous gun industry practices and assisted governments and public officials in defense of reasonable gun laws. Named as one of the nation’s 500 leading lawyers for over a decade, John has litigated in over 40 states to reduce gun violence, including winning several landmark trial and appellate rulings, settlements, and verdicts.

 

      He is also the author of multiple law review articles, including “The Right Not to Be Shot: Public Safety, Private Guns, and the Constellation of Constitutional Liberties.” He’s also written Everything’s at Stake: Preserving Authority to Prevent Gun Violence in the Second Amendment’s Third Chapter. A graduate of Harvard College and the University of Virginia Law School, please welcome Jonathan Lowy.

 

Jonathan Lowy:  Thank you, Judge Hardiman, and panel. And thanks so much to The Federalist Society for hosting this important event and for seeking a balanced discussion. I’m not one of the usual suspects here, and I really appreciate sincerely, especially in these divisive times, reaching across and hearing each other out and trying to find common ground as Americans.

 

      And that has been Brady’s way through our almost 50 years. Our motto is “Take action, not sides.” We have a long bipartisan tradition. We’re founded by Republicans. We’re named after Republicans. Our agenda is simply to reduce gun deaths and injuries, which is a goal I hope all of us share and should be central to our discussion here today.

 

      And in a search for common ground in discussing the future of the Second Amendment, I suggest we respect certain principles that have been traditionally considered conservative ones. One, in our democracy, policy should generally be determined by the people through their elected representatives. Two, judges should not be making policy. Three, judges should show great deference to the politically accountable branches of government. Four, that deference should be at its apex when public safety is at stake, where courts have always recognized broad governmental authority. And five, judicial decisions should not be based on the personal or policy viewpoints of judges. To violate any of those principles is, as is often said, judicial activism.

 

      All of these principles weigh in favor of a narrow construction of private gun rights under the Second Amendment and against a broad right to carry guns in public sought in NYSRPA v. Bruen. As has been discussed, Bruen seeks to strike down a policy that the people of New York have enjoyed for over a century that restricts the carrying of loaded, hidden guns in public to those with good cause. That policy could be repealed by the people if they so wish, but they have not chosen to do so, and for good reason. That law, along with other strong gun laws, has helped give New York one of the lowest gun death rates in the nation.

 

      The issue in Bruen is whether five justices should do what the people of New York have decided they do not want, and mandate virtually anyone to be allowed to carry hidden, loaded guns in public. That is the policy in many states, including, by the way, the states with the top gun death rates in the nation. But about a quarter of the U.S. population has chosen a more restrictive policy. It’s no coincidence that those states with restrictive carry policies have some of the lowest gun death rates in the nation.

 

      Now, conservative principles of judicial restraint counsel against such policymaking by the courts. As Judge J. Harvie Wilkinson recognized, mandating a broad right to carry intrudes on, quote, “popular governance.” And it’s potentially dangerous. Judge Wilkinson wrote, quote, “This is serious business. We do not wish to be even minutely responsible for some unspeakably tragic act of mayhem because in the peace of our judicial chambers, we miscalculated as to Second Amendment rights.”

 

      Another conservative jurist, Michael Luttig, said expressly about Bruen, quote, “Conservatives, textualists, and originalists believe, or should, that the Second Amendment ought not be interpreted to take from the people and their legislatures the historical and traditional authority they have had for centuries to decide where handguns may be carried in public and in public places.”

 

      As these jurists recognized, Heller does not mandate a broad right to carry. The holding of Heller was that the Second Amendment protects a right of law-abiding, responsible citizens to a gun in the home for self-defense. That was it. And Heller’s finding that the Second Amendment protects some right to guns for self-defense is far too shaky a foundation on which to deprive states of their longstanding police power authority to restrict guns in public. Such an expansion of Heller contradicts the very text, history, and tradition test its proponents purport to rely on.

 

      And when we consider that test, it’s worth recalling how radical the ruling in Heller was. Before 2008, the view that the Second Amendment only protects bearing arms in the, quote, “well-regulated militia” referenced in its text was so settled that former Chief Justice Warren Burger, a Nixon appointee, called the notion that the Second Amendment restricts private gun laws, quote, “one of the greatest pieces of fraud,” I repeat the word fraud, “on the American people by special interest groups I have seen in my lifetime,” close quote.

 

      After all, the framers did not include a statement of purpose in any other of the Bill of Rights, but they did choose to include one in the Second Amendment, a well-regulated militia, being necessary to the security of a free state. History shows that the amendment was driven by anti-federalist concerns that the newly created federal government could monopolize military might and starve state militias.

 

      Whatever the framers thought about guns, whatever the gun carrying practices of our presidents or others were, the framers did not have private gun rights on their minds when they drafted and ratified the Second Amendment. And that, by the way, is the critical issue, not whether it was legal for seven presidents to carry, just as it’s not an issue of whether the people of 43 states have the legal right to carry. The question is, is there a constitutional right under the Second Amendment?

 

      Now, James Madison, who drafted the Second Amendment, pointedly chose not to include formulations from some states and dissenters that did protect private self-defense or hunting. And the ratification debates solely concerned militias, not private gun rights.

 

      Now, Justice Scalia in his majority opinion in Heller conceded that protecting the militia, quote, “was the reason that the right was codified.” But he then asserted, quote, “That can only show that self-defense had little to do with the right’s codification. It was the central component of the right itself.” I’ve puzzled over that sentence for 12 years. Now, there was no citation in it or real explanation as to why a purpose that the framers did not mention was central, but the purpose stated in the text was not. So much for text and history.

 

      This reading effectively erases the amendment’s militia clause and rewrites the constitutional text to read something like guns being a necessity for private self-defense, the right of the people to keep and bear arms shall not be infringed, which, by the way, to answer Mr. Thompson’s question, would be a much clearer way to embrace the right that he is advocating.

 

      Now, historical studies since Heller have only confirmed its errors. And this all raises a very insightful and important question raised by Justice Barrett in the Bruen argument, which was, and I’m paraphrasing, does the Court have to accept Heller’s findings on history? I think the answer is clearly no. That is not what courts do. Five justices cannot declare that George Washington was not our first president, nor can five justices declare that the historical purpose of the Second Amendment was something that the framers never mentioned in the text or ratification debates.

 

      But despite Heller’s questionable rulings, it does not support a broad right to carry guns in public, much less concealed guns. Heller recognized expressly that most 19th century courts upheld prohibitions on concealed carry, prohibitions, mind you, not just discretionary permitting, like New York has.

 

      And the history bears this out, which is very different from the history Mr. Thompson discussed. From 13th century England to 20th century America, public gun carrying was greatly restricted. Another conservative jurist, Ninth Circuit Judge Jay Bybee, surveyed this history, and in rejecting a similar challenge to carry restrictions, concluded that a, quote, “review of more than 700 years of English and American legal history reveals a strong theme. Government has the power to regulate arms in the public square.” In fact, over a century ago, the Supreme Court recognized that, quote, “the right of the people to keep and bear arms is not infringed by laws prohibiting the carrying of concealed weapons.”

 

      Now, I don't think 21st century gun laws should be constrained by history and tradition. To me, it shouldn’t matter how Americans regulated muskets or early firearms in the 1780s or the 1870s when there was no thriving gun industry or gun violence epidemic. But if text, history, and tradition is the test that is applied, every one of those factors support allowing Americans to restrict public gun carrying, certainly when concealed.

 

      And if the Court purports to rely on text, history, and tradition to find a broad right that is at odds with all three factors, such a decision would severely damage the institutional credibility of the courts. It will suggest that policy preferences, not judicial principle, may be driving Second Amendment decisions.

 

      Worse, such a decision may rely on alternate facts, or to put it more plain, untruths. In Bruen, NYSRPA’s counsel claimed repeatedly that states that generally allow concealed carry have comparable gun violence as states like New York. And he repeatedly pointed to Phoenix, Houston, and Chicago as cities in relaxed carry states that he said, quote, “have not had demonstrably worse problems,” close quote, than states with New York-like restrictions.

 

      Those assertions are false. In truth, Phoenix, Houston, and Chicago have homicide rates that are more than two, three, and five times the rates of New York. Indeed, nine of the ten cities with the highest murder rates in the country are in states with right to carry laws. The ten states with the most gun violence all have right to carry laws, yet six of the seven states with the lowest gun death rates all have restrictive carry laws like New York’s. In fact, just yesterday, The Washington Post fact checker verified that NYSRPA’s claims were incorrect and gave NYSRPA counsel Paul Clement three Pinocchios for them.

 

      Now, studies confirm that right to carry laws are associated with 13 to 15 percent higher violent crime rates. Another study found that individuals carrying guns were over four times more likely to be shot, and fatally shot, in an assault than those not carrying. More concealed carry guns lead to significantly more crime and more deaths, yet the fantasy persists that untrained civilians going about their lives can be relied on to whip out their guns in parks and streets and hit only the bad guy and be correct that the bad guy is the one who should be shot.

 

      Well, my organization is named after James Brady, who, as White House Press Secretary, was in the entourage of perhaps the best protected man on the planet. But even a battalion of highly trained, well-armed Secret Service could not stop a single gunman from nearly killing him. The lesson that Jim and Sarah Brady learned was not to beef up the security detail, but to keep guns out of dangerous people’s hands.

 

      In fact, even trained police officers miss their targets most of the time. And as recent shootings show, police too often end up needlessly shooting people, often fatally. There are worse outcomes with civilians who have less training, less preparedness for high stress incidents, and less ability to know who is a real threat. In a Harvard study, judges found that most reported self-defense gun uses that they reviewed were probably illegal. The fact is, while guns are occasionally used in self-defense, it is far more likely that a gun will be used in a homicide, suicide, or unintentional shooting.

 

      Study after study shows that strong gun laws save lives. After Connecticut passed a law requiring a permit to purchase a gun, gun deaths fell by 40 percent. After Missouri repealed a similar law, the gun death rate increased at least 25 percent. And it is true that a majority of states have generally permissive gun laws, but those laws are not a product of public will but of gun lobby clout.

 

      Polls show that over 90 percent of Americans support background checks on all gun sales. Solid majorities favor licensing and other laws, yet none are laws of the land. In about 70 percent of America, Americans choose to keep themselves and their families safe by not owning a gun, yet the courts may force those to face guns virtually everywhere, despite the evidence that it will result in more people dying.

 

      Of course, others are free to argue that guns are far more effective for self-defense than the data shows or as I’ve suggested, and that the non-gun owning 70 percent of Americans are misguided. But the fundamental issue before the Court is who makes those gun policy decisions, the New York legislature, or five justices? Courts are on shaky ground in depriving Americans of the authority to restrict gun carrying in our parks, streets, and communities for the first time in our history.

 

      In closing, I would commend that we all try to come together on some first principles. One, as Thomas Jefferson recognized, the care of human life and happiness, and not their destruction, is the first and only object of good government. Our failure to care for human life, including to protect people from gunfire, has driven America into a gun violence epidemic that claims over 40,000 lives a year and injures many more. No other comparable country tolerates its citizens being subjected to anywhere close to such levels of gun violence.

 

      The Second Amendment does not condemn us to this fate. The right to worship, to assemble, to speak, is at risk, as is the right that the founders announced first in the Declaration of Independence, the right to life. Courts need not agree with what are the best solutions to end our gun violence epidemic, but they should not be the ones deciding what solutions Americans must have. Thank you.

 

Hon. Thomas Hardiman:  Thank you, Jonathan. Last but not least, our third presenter is Professor Mark Smith. He’s a New York attorney and a Presidential Scholar at the King’s College. He’s a Visiting Fellow in Pharmaceutical Public Policy and Law in the Department of Pharmacology at Oxford University.

 

      Professor Smith is a New York Times best-selling author and a frequent guest on the Fox News channel. He is the author of six books, including First They Came for the Gun Owners: The Campaign to Disarm You and Take Your Freedoms. Professor Smith is the host and producer of The Four Boxes Diner on YouTube, a channel providing in-depth analysis on Second Amendment scholarship and Second Amendment news. Please welcome Mark Smith.

 

Prof. Mark Smith:  It’s always a pleasure to be speaking to The Federalist Society, which is the center of the vast right wing conspiracy.

 

      [Laughter]

 

      To begin, I clearly agree that the Second Amendment guarantees a right to carry guns outside the home and that by simply reading the text of the Second Amendment along with its history should guarantee the outcome of the NYSRPA v. Bruen case. And I equally agree that the notion of the New York proper clause requirement that says basically you need to go to a government agent in New York or elsewhere and say, “Mother, may I exercise my fundamental constitutional rights,” also violates the Second Amendment. That’s not how the Constitution works. You don’t have to ask permission of the government to exercise your fundamental constitutional rights to go to church, to have guns, or to carry guns.

 

      With that said, I’d like to address two specific arguments that New York and their friends have argued before the Supreme Court, and to show their fallacies with both. First, New York argues that granting concealed carry permits or allowing law-abiding citizens with no criminal record to carry guns in public will somehow give rise to a much more dangerous environment and a net loss to public safety.

 

      The second argument I’m going to address is something many of you may not have heard of, and that is the notion that under the doctrine or philosophy of corpus linguistics, which is Latin for basically the study of language and texts, but we like to use Latin, or at least some people in the anti-gun community apparently like to use it, corpus linguistics, and an explanation of why corpus linguistics is not a basis to deny us our fundamental rights to keep and bear arms mentioned specifically in the text of the Second Amendment itself.

 

      But let’s start with public safety. Now, when you talk about public safety and constitutional rights, I view this as really a logical fallacy, a form of appeal to emotion where you’re essentially waving bloody shirts and saying, “See? People get hurt by X, and therefore we need to ban it or stop it.”

 

      That’s not how the Constitution works. The reality is that there are no net costs to allowing law-abiding Americans to exercise their fundamental rights to carry a gun. Now, of course, I should not even have to talk about public policy. It should be irrelevant, and it really is legally irrelevant. Why is that? Well, because we know from the 2008 Heller ruling by the Supreme Court that the constitutionality of gun control laws turns on the text, history, and tradition of the Second Amendment and does not get limited or discussed in the context of some social science data-driven discussions of what is good or bad for society.

 

      That’s not how, again, the Constitution works. In fact, Justice Scalia wrote in Heller specifically that the very enumeration of the right takes the issue out of the hands of government, including the courts, the power to decide case by case whether or not a right is really worth insisting upon. That’s not our call. That’s not the legislature’s call. That was the Founding Fathers’ call.

 

      We the people spoke to the right to keep and bear arms when we enacted the Constitution. And if you don’t like what the Second Amendment says, you should do what Justice Stevens recommended, the late Justice Stevens, which is to go through Article V processes and amend the Constitution to remove the Second Amendment. And good luck with that.

 

      Now, of course, public policy considerations and safety considerations are not new. Let’s just take the most basic common sense first year law student example. The criminal procedural processes in the Bill of Rights, the Fourth Amendment, the Fifth Amendment, the Sixth, the Seventh Amendment, the Eighth Amendment as well, these are limitations on what government can and cannot do in the prosecution of criminal cases.

 

      As a result of enforcing this public policy -- as a result, essentially, of enforcing these Bill of Rights provisions involving criminal prosecutions, guess what? Some bad criminals actually go free. But a decision was made by the Founding Fathers and by us in adhering to the Constitution that sometimes, criminals have to be let free to respect the freedoms and rights protected by Americans in the Bill of Rights. That is a public policy cost. But that doesn’t mean that the answer is you reject the Bill of Rights as written in the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, and so on, and so on.

 

      Now, remember, for the sake of argument, let’s just play this game out, though. Let us assume for the sake of argument, assuming arguendo—we’re talking to lawyers here—that there are in fact five votes on the Supreme Court to say, “Yeah, yeah, we can balance away constitutional rights involving the Second Amendment. Yep, social science teaches us this.”

 

      So my question is that I’m going to address is does New York actually have a public policy argument to somehow restrict the public carry of firearms by law-abiding Americans or not? The answer is no. If you actually look carefully at the history and the facts on the ground of Americans carrying firearms in public, you find that there really is no basis for denying law-abiding citizens who meet objective criteria, such as I’m not a criminal, I’m not a convicted felon, I’m not in a mental health institution, from barring them from carrying guns.

 

      Now, I think the best evidence of this is the lived experience of Americans and the lived experiences of states. Let’s start from the most basic premise. Let us look at the great and the good among us in society, our betters, if you will. Well, our betters, if you will, the great and the good, know that guns stop bad people from doing bad things to good people. And how do we know this? Because they all either carry guns or they have people, armed body guards, that carry guns for them. Whether they be Hollywood celebrities, rich anti-gun donors, and of course, the primary anti-gunners that live in the White House today, all have the benefit of armed protection.

 

      And ask yourself this: Why do police officers carry guns? Why does Secret Service carry guns? What’s the point of the guns? Oh yeah, we know because guns actually save lives. They prevent bad people from doing bad things to good people.

 

      And by the way, isn’t it very interesting that President Biden when he talks about you carrying guns and me carrying guns in public to protect our lives, that’s a gun epidemic. But when it comes to President Biden getting protected by men with guns and women with guns, that’s not an epidemic. That’s called appropriate protection of human life. My question to the president was simply this. Hey, Mr. President, if you think guns are bad and don’t do any good, why don't you disarm your security detail? You teach us how it’s done. You go first.

 

      Now, we know the reality is, notwithstanding the rhetoric and the appeals to emotion, which as you know from Philosophy 101 logic is a fallacy, we know that guns save lives. In fact, there’s a powerful study that recommend that you all look at from 2021, just earlier this year, by a Georgetown Professor named William English who—he was not the only one, but he’s the most recent—that showed that there are 1.67 [million] defensive gun uses in the United States every year. That breaks down to 32,000 defensive gun uses that protect life every week, or 4,575 defensive gun uses every day.

 

      Now, what’s very interesting about this is that in most instances of guns saving lives and protecting Americans, no shot was fired. Most of the instances of defensive gun use either involve the showing of a gun that caused the threat to run away, or the saying, “I’ve got a gun. You better get out of here,” and that was enough to deter countless crimes. And again, 1.67 million defensive gun uses a year, according to Bill English from Georgetown, a prestigious university, I think we can all agree.

 

      Now, of course, a little bit of common sense is appropriate. Where do you think there’s more likely to be a mass shooting, in a building that has a sign that says something like, “Notice: Gun-free zone. We don’t believe in  guns. No weapons allowed.” You think the criminals are going to follow that?

 

      Well, Cesare Beccaria in the 18th century, an important Italian Enlightenment philosopher that the Founding Fathers all knew well and, actually, Jefferson even wrote down the quote I’m about to tell you, Cesare Beccaria specifically talked about how any kind of arm bands only hurts the law-abiding citizen and doesn’t do anything to stop criminals from doing criminal things. It does nothing to stop the criminal. It actually only emboldens the criminal Cesare Beccaria in the 18th century, before the Second Amendment was written, understood this basic common-sense view of human life.

 

      Of course, we know that guns also stop mass shootings from why we’ve never seen a mass shooting at a police department. What is it about police departments that keep them immune from mass shootings? I don’t think it’s the cute hats or the blue uniforms. No, it’s the guns. It’s the guns that protect innocent lives from criminality and evildoers.

 

      So it’s very clear that the lived experience I’ve just described allow for guns to improve public safety. But beyond that, I want to just briefly explain specifically how the New York arguments that guns somehow lead to a net cost in public policy. Let’s take a look at some of the social scientists and studies that have addressed this issue.

 

      Now, I don’t want to get into boring statistics too much, although we can, but I’m just going to hit a couple highlights, and that’s this. Let’s take a look at some of the studies by organizations that I, in my opinion, would not label the NRA or the Second Amendment or proponents like that. Let’s take a typical establishment group like the RAND Corporation. Nothing wrong with the RAND Corporation, but I’m not sure I would view them as Second Amendment advocates. That’s just my take. Well, they did a comprehensive survey talking about the explosion of research between carrying guns in public and violent crime rates, and they basically said that in all of their analysis looking at all these studies, they found no connection that more guns equals more violent crime. And that’s the RAND Corporation.

 

      Now, this, by the way, matches up with other studies done by, again, what I would consider more establishment groups, including one arm of the federal government, so signed studies, and also via a 2003 study by the CDC. So again, I think even if you want to talk about statistics, if you look at the more objective people that are not -- that I would say, again, are very establishment, they say they can’t see evidence of more guns being negative to public policy in America.

 

      And by the way, this is consistent with what we’ve seen over the last many decades. Remember, since 1975, we’ve seen a tsunami of states that have made it easier to get guns, made it easier to carry guns, whether it be going to a shall issue permitting system, or in 21 states today, a permitless carrying system. So it’s a one-way ratchet toward more gun freedom and not less. And as a result of this, Justice Kavanaugh at oral argument in Bruen had a very interesting observation. He said that he had not seen any real evidence that the 43 states that have shall issue or constitutional care regimes have a lot more accidents or crime. Even Kavanaugh noticed that that was not true.

 

      So again, I think the reality is this. If you look at the states that have loosened their gun laws to make it easier for people to carry guns, easier to have guns, guess what? It’s a one-way ratchet toward gun freedom because guess what? In all of those states, you cannot point to one which has actually gone backwards. Those states that have adopted permitless carry, they’ve adopted shall issue, none of them have said, “Oh my god, we have blood in the streets! We’ve got to go backwards.” It hasn’t happened.

 

      Why is that? Because the lived experience, the actual experiences of actual Americans and actual law enforcement agencies in these states demonstrate without a doubt that more guns on the street in the hands of law-abiding citizens that meet objective criteria make communities more safe, a lesson that, again, our betters already know.

 

      Now, I also want to talk briefly about the notion of corpus linguistics. Now, this was not argued, at the end of the day, during the oral argument. It did not come up. And New York itself basically recognized probably the fallacy of the argument involving corpus linguistics because the didn’t seem to mention it in their brief that I could tell.

 

      Now, what is corpus linguistics? All right, really all it is is a fancy way of taking a database of historical documents and writing a text electronic search, a Google search of it. And then you look at the conclusions and you draw some conclusions from it. Basically, a researcher takes an electronic database of the Founding Era and they run research, they do some search terms of keywords and whatever, it spits out results, they read through it, and they try to draw conclusions. So I want to just give you a quick example of how this works and a simple to use example, and then I’ll go back to how it’s being used in the Bruen case.

 

      Let’s say you wanted to figure out what the word airplane meant in the early 1940s in American life. What does airplane mean? Is it military, or is it civilian? So in theory, you would go and look at a series of databases involving information from 1940 to 1945, let’s say, and you would run electronic searches, and it would spit out results, and then you would look at all the different uses of the word airplane in the database, which would include newspaper articles or whatever.

 

      Now, if you then count up the uses, how many uses in the newspapers at the time were of airplanes in the context of military uses or other uses, and then you might say something like something known as the frequency hypothesis. I’m generalizing here, of course. You say something like, well, in 95 percent of the uses between 1940 and 1945, the word airplane was used in the military context, and therefore, airplane means military airplane. Of course, we know that’s absurd. That’s not true because there’s plenty of civilian uses for airplanes other than military.

 

      But the reason why I mention that is because it’s analogous to what’s happening in my view of many people in the corpus linguistics world talking about the Second Amendment because what they’re doing is they are saying, “Heller taught us that we have to use text and history to understand the meaning of the Second Amendment at the time of the founding, and look at -- do all these database searches of all these historical documents and try to conclude does the phrase ‘bear arms,’ does it mean military or militia, or does it mean you get to walk around and carry a gun in downtown Boston?”

 

      And then they say, “Well, if you look at the founding period and we do all the searches and then we do all the addition and we do all the subjective measurements, we conclude that overwhelmingly, the phrase ‘bear arms’ means military or militia; therefore, the Second Amendment commonly was understood to protect a militia right and not an individual right.”

 

      Of course, this is absurd for several reasons. First of all, this notion was rejected by Heller that specifically took a similar argument by linguists and said, no, that’s not how you do it. The linguists’ briefs in Heller were rejected specifically as this is not how you interpret the Second Amendment. It’s not a collective right. It’s an individual right.

 

      Second of all, of course, if you actually look at what was going on in American history at the time of the founding, guess what was going on? Just like in the early ’40s you had World War II, at the founding period you have a series of wars where many people were writing about the French and Indian War, they were writing about the American Revolution, and they were also talking about the future of American in terms of standing armies and whatnot. So you had a lot of discussion at the Founding Era about arms, bearing arms in the context of the militia.

 

      But that doesn’t answer the critical question the Supreme Court must answer today, which is in the context of the Second Amendment where you talk about the right of the people to keep and bear arms, what does that phrase mean? And again, the arguments by the corpus linguistics people, and I’m simplifying here, is essentially that because the common use of bear arms by our math, by our calculations, is mostly military, the Second Amendment must mean military and not private civilian carrying a firearm, which again, I think that’s too simplistic of a view.

 

      And I think that’s probably why the State of New York did not argue corpus linguistics. I think that’s also why the U.S. Supreme Court probably did not ask any questions at oral argument about corpus linguistics because they thought it wasn’t going to teach the Court what the Second Amendment meant.

 

      Again, I think that, to close, labeling something corpus linguistics or appealing to emotion is something that I think the Supreme Court is going to see through. And at the end of the day, I think the Supreme Court is going to uphold the text and the history of the Second Amendment and conclude that we as Americans have a fundamental right not just to keep guns in the home, loaded, for self-defense, but also to carry guns, loaded and unlocked, outside the home in public for self-defense and confrontation against the evildoers that inevitably in the human experience are among us. Thank you.

 

Hon. Thomas Hardiman:  All right. I want to make sure we leave time for questions, so I’m going to ask our excellent presenters to have a lightning round here. And I’ll start by asking Jonathan, I think you made the point that Heller does not necessarily mean that there’s a right to carry outside the home, that Heller applies outside the home. If I heard the arguments in the Bruen case correctly, it seemed like New York sort of conceded that point. Do you agree that New York started from the premise that there is some right to carry outside the home, and if so, what do you think about that?

 

Jonathan Lowy:  I agree, Your Honor, that it sounded like that to me. And to be honest with you, I’m not sure if they conceded it in the pleadings or not. I read the argument the same way as you, Your Honor, that it certainly sounded like New York was not pushing back on the idea that there was some right to carry in public. I’m not sure if they conceded it in the pleadings or not.

 

      If that is what they are conceding, I disagree with that view. I do think that there is some right to carry in public that’s related to the right recognized in Heller, like for instance in the Azelle case to get training and to have your gun and use it safely in the home. But I do not think that Heller or Texas through tradition support a broader right to carry in public.

 

David Thompson:  Just to clarify that I agree, they did concede that in the Supreme Court. I filed that complaint. They did not concede that in the Second Circuit. In the Second Circuit, they said there’s no right to carry outside the home at all. And for some reason, when the got to the Supreme Court, they rethought that position.

 

Hon. Thomas Hardiman:  Terrific. Now, next question for David and Mark. Unless I’m mistaken, and you can correct me if I am, when Justice Scalia wrote in the Heller majority opinion that that decision was not to call into question longstanding prohibitions that had existed, isn’t it the case that the states like New York that are attempting to regulate firearm carry this way do point accurately to longstanding laws prohibiting concealed carry?

 

      And again, listening to the argument, this was something Mr. Clement had to deal with because he said, “Well, we don’t really -- it doesn't have to be concealed, it doesn't have to be open, but it’s got to be one or the other.” So what do David and Mark respond to the notion that the country has a longstanding history of preventing concealed carry of firearms?

 

David Thompson:  I would make just a couple of quick points about that. Number one, that was dicta. Number two, Justice Stevens has bragged that he forced that language in through Kennedy into the opinion.

 

      Perhaps more importantly, we talked a lot about text and history today, but we didn’t talk about the third part of the trinity, tradition. And it’s an important question. And what Judge Kavanaugh explained in the D.C. Circuit in the Heller III case was tradition can only confirm. When the text and the history point to one result, tradition is only relevant if it comes in in a confirming way.

 

      So if, for example, New York had banned the possession of handguns for a hundred years, that would be a tradition. It’s a hundred years old, but it wouldn’t have any sort of firm -- it’s not a confirming analytic, and it would therefore be irrelevant. And really, it should be a tradition from the Founding Era, too. I should correct myself. But even a tradition from the Founding Era cannot trump text and history.

 

      I don't know if Mark has more to say.

 

Hon. Thomas Hardiman:  Nothing? All right. Jonathan, would you like to respond to that at all?

 

Jonathan Lowy:  Well, I think the history and tradition of regulating public carry, including prohibiting most public carrying of guns, is just pretty clear. And that’s what -- Judge Bybee and Judge Luttig both came to that conclusion. The Supreme Court a century ago in Robertson v. Baldwin recognized that longstanding tradition of prohibiting concealed carry. So I do think that that’s -- again, the history is clear, and it goes well beyond Dodge City. It goes to Texas and others.

 

      And if I could just briefly just read an example of a 19th century opinion that upheld one of these, and I think it’s important. This was the Supreme Court of Texas in a case that the Heller majority cited, English v. State. The court said, “In the great social compact under and by which states and communities are bound and held together, each individual has compromised the right to avenge his own wrongs and must look to the state for redress. We must not go back to that state of barbarism in which each claims the right to administer the law in his own case.”

 

      And I think that really gets to it. I think we have a social compact where we cede some of our liberties to the state. And Mississippi and Alabama can have a different judgement and decide that people should broadly carry. But it’s certainly within the history and tradition for states like New York and California and others to take a different approach.

 

Prof. Mark Smith:  I think it’s worth just distinguishing those two Texas cases that the anti-gun community likes to bring up all the time as to why they’re really irrelevant to the Second Amendment. First of all, both of those Texas decisions involved a Texas constitutional provision that was fuzzier than the Second Amendment, which as of that moment had not been incorporated and applied to the states, number one.

 

      Number two is we have to also look at the historical context of Texas when these cases came about, which is the late 19th century, early 20th century. Basically, if you look at the situation of Texas at the time, you had former generals of the Union Army that were sitting on the Texas Supreme Court overseeing gun confiscation and gun disarmament efforts of the former Confederates that lived in Texas. So in many respects, you could distinguish those just by saying these were a form of military occupation orders by Texas Supreme Court restricting the right to carry of former enemy combatants against the Union.

 

      Third is, I would say, of course, this is very late in the day. Heller talks about the Founding Era. What did the founders understand when they wrote the text of the Second Amendment? Anything in the late 19th century after the Civil War doesn’t speak to that.

 

      And last but not least, even if you look at Texas law at the time, there was a rule that says you could travel with guns. And as to whether or not travel meant traveling across the state or around town, there was a debatable proposition. But there’s a lot of unique facets to those Texas decisions when you drill down that doesn’t really speak to the meaning of the Second Amendment today or at the founding.

 

Hon. Thomas Hardiman:  Terrific. We have so many people lined up. I’m going to turn to questions earlier than I planned under one condition. Ask question and make it short. Sir?

 

Howard Klein:  Yes, thank you. My name is Howard Klein. I’m from Florida. I moved here from California because my M1 carbine from World War II was going to be an assault weapon, and I would have to get fingerprinted to by a box of shells at the range.

 

      My question has to do with I want to focus on something other than this language of the Second Amendment. I would like to ask the view of the panelists of what the right of self-defense was that was protected, in my opinion, under the Ninth Amendment that was so fundamental that people who had no other constitutional rights, the right to own property, or they were women, minors, people who couldn’t vote, they couldn’t own property, they couldn’t contract, but they were deemed to have a right to self-defense with arms.

 

      So what is the view of the panelists on -- let’s get away from the Second Amendment. Let’s go to the fundamental right of self-defense which predates the Second Amendment, and the Second Amendment could not be interpreted to constrain that basic right.

 

Hon. Thomas Hardiman:  Thank you.

 

David Thompson:  I’m not an expert on the Ninth Amendment, but I would say that the key insight behind your question is that it’s a preexisting right. It comes from the English Bill of Rights, and it may predate that as well. But certainly by 1689, this was a right that all Englishmen, and by extension, Americans, enjoyed. So it’s preexisting, and it’s not just as though it were created in 1791.

 

Prof. Mark Smith:  I think there’s four points that go right to your question. The first is if you actually just look at the text of the Second Amendment, it clearly protects a preexisting right because of the way it’s written, the right of the people to keep and bear arms. It presupposes the existence of something. It’s not creating the right, it’s recognizing and codifying something that was already understood to exist, number one.

 

      Number two is we know that self-defense, including for a woman, was protected at the time of our founding by at least two stories, and I’m sure that Stephen Halbrook, I saw walked in, I’m sure he has fifty other stories of the founding period that he could tell you. But we know that Benjamin Franklin’s wife used firearms with friends to protect the ripping down of his home, Ben Franklin’s home, because there was concern that Franklin was behind some of the coercive acts, like the Stamp Act, etc. And there was a mob that tried to tear down Franklin’s home. And Benjamin Franklin’s wife, with guns, stopped that from taking place. And we know this because Franklin wrote a letter to his wife saying, “Thank you for getting the guns to protect our home from being torn down by the mob.” So she was allowed to use self-defense.

 

      And of course, James Q. Wilson, one of our -- not James Q., but James Wilson, one of the first Supreme Court justices who was a Founding Father, he used guns with his friends to prevent his house from being torn down by a mob.

 

      And of course, David alluded to the Boston Massacre, where John Adams, one of the Founding Fathers and one of our first presidents, said at trial in defending the British officers that, yeah, we admit that these Americans, these Bostonians, had a right to bear arms to protect themselves peaceably and defensively in Boston at the time of the founding.

 

      So I think those three examples alone demonstrate that the right of self-defense was preexisting, did exist, and applied not just to men but also to women in the form of Ben Franklin’s wife.

 

Jonathan Lowy:  So just briefly, I think that’s a really interesting point. And I do think that the self-defense tradition would have been a firmer basis for the Heller decision than the Second Amendment. I think that the Heller decision -- and it’s not just me. Nelson Lund has attacked the analysis in that it basically erased half of the constitutional text. I’m not sure if there’s any constitutional text that has been so dissed as that first part. And I think maybe the Court was conflating these two traditions improperly.

 

      However, I do think when we’re talking about public carry, I don’t think the self-defense tradition helps you because I don’t believe -- and there was an amicus brief by Professor Eric Ruben on the self-defense tradition. I don’t think it would entitle you to take out your gun in a public space where someone else has an equal right to be and shoot them, like Trayvon Martin’s death, for example. And that would be an example, real world example, of how this self-defense right in public could play out.

 

      There was a man who had a gun for self-defense. He followed this teenager who was unarmed, and then came to a situation where he thought, after following him, that he needed to pull out his gun for self-defense. That’s what he said. And he pulled it out and killed this unarmed teenager. And that’s a real world example.

 

      The petitioners in Bruen would claim that he had not just a legal right but a constitutional right to do exactly what he did. I don’t think the common law self-defense tradition supports that, and that’s why you had the NRA push for stand-your-ground laws, which went beyond the common law tradition. The reason you needed that legislation was because the common law didn’t support shooting other people in places where that other person has a right to be.

 

Hon. Thomas Hardiman:  The gentleman at the back microphone.

 

Marisa Cohen:  Hi. My name is Marisa Cohen, a woman, but it’s all right. I look good in a suit. Self-proclaimed Yankee.

 

      So in the oral argument, we could say that I think Sonia Sotomayor actually argued for New York better than New York argued for itself. But the argument was telling of a bit of a mess of the justices in general because if these are going to be the people who are going to decide gun rights going forward, how far do we want them to go, because John Roberts said, “Okay, I understand that New Yorkers don’t want people to have it in Giant Stadium.” Well, Giant Stadium is in New Jersey. So, I mean, if this -- they don’t really know where their ground is.

 

      And Mr. Smith, when you were speaking, you said that there are these objective qualifications that come into play. Well, if there is a qualification and objective standards, then that means that there isn’t this all go free, have a gun, sort of system. There has to be some sort of foundation, and there has to be some sort of line that’s drawn. Where is the line that you guys want to see drawn compared to the line that New York actually has in place?

 

Hon. Thomas Hardiman:  Thank you. Where to draw the line?

 

Prof. Mark Smith:  Well, I think it’s a relatively easy way to draw a line. I think the first answer is I think everyone over the age of 18, because at the time of our founding, 18-year-olds were not only allowed to have guns, they were in many instances required to have guns in terms of local and state militia and other obligations. So 18-year-olds, and I think David’s actually got a case on that.

 

      So I would say anyone over 18 that’s a law-abiding citizen in terms of not a convicted felon, basically under 18 U.S.C. 922 of the Federal Code, it sets forth this series of disqualifying people, meaning you’ve been adjudicated mentally incompetent, because if you can’t take care of yourself, well, you can’t have a gun, or probably do other things. If you’re a convicted felon -- I know that there’s a debate about non-violent versus violent felons which may come up down the road, but if you’re a convicted felon, you can’t have a gun.

 

      But if you’re basically a law-abiding American over the age of 18, you are entitled to that constitutional right to keep and bear arms, no different than if you’re entitled to the constitutional rights under the criminal procedure rules. You’re entitled to get married, to enter into contracts, to enter into a gay marriage, according to the Supreme Court, or to do any of these other things. You’re an American adult.

 

      And remember, in America, we presume individual liberty first. Mother, may I -- we’re Americans. We don’t go “mother, may I” to the government and say please, Mr. Government, can I get this? No, it works in reverse. When in doubt, you have the freedom to do it. Only when you demonstrate you’re incapable of making responsible decisions as an adult do we take that right away from you. But until then, you should have the right to exercise all your rights, including but not limited to your Second Amendment rights.

 

Hon. Thomas Hardiman:  Mr. Smith, let me just ask for a point of clarification. You say 18.

 

Prof. Mark Smith:  Yes.

 

Hon. Thomas Hardiman:  My recollection -- it’s been some years since I had to adjudicate a case in this area, but my recollection is that some of the states required militia service as early as 14 or 16. And if that’s so, why would you draw the line at 18 instead of an age that’s consistent with the age of militia service?

 

Prof. Mark Smith:  Because I think the best way to draw the line for the Second Amendment is by looking at the Federal Militia Acts. Not one, there’s actually two militia acts of 1792. And in both of the Federal Militia Acts, I believe, the age set by the First Congress, which, by the way, was the First Congress that adopted the Second Amendment, that same group of people said that 18 was the proper age for militia service, and therefore, I think since the wrote the Second Amendment and the Militia Acts of 1792 and set the age at 18, I think that’s why it should be 18, even though you are correct. Historically, there are instances of younger folks in some of the state rules. But I think the right answer, because you do have to draw lines at some point, is probably the First Congress’s line drawing at 18.

 

Hon. Thomas Hardiman:  Okay, super. Any -- Jon?

 

Jonathan Lowy:  I think, first of all, I think that the first freedom is the right to live, and that that’s infringed by these permissive carry laws. Of course, the right to carry guns that’s being sought is not the right to carry guns as fashion accessories. It’s the right to carry guns in order to use them in self-defense, which means, from George Zimmerman’s perspective, to take the gun out and shoot and potentially kill another person when that individual deems it necessary. And even if that’s a crime, of course, it turns out that it’s a crime, it’s, of course, too late for the victim. So I do think that that’s where we should start any analysis.

 

      But I think it’s worth looking at the sensitive places discussion. I thought it was a great question because it exposes all sorts of fallacies in this argument. For one, if you think you should keep guns out of Giant Stadium, assuming that they have jurisdiction in New Jersey, because it’s crowded, well then, why don’t you keep guns out of other places where it’s crowded? The New York City subways are very crowded, of course.

 

      Then there was -- Justice Alito said, “Well, if you --” -- oh, I think Mr. Clement said, “If you restrict access to a place, then it can be sensitive.” Well, does that mean if you have a free concert at Giant Stadium that allows in anyone, then guns are permitted? I don't think so.

 

      Then there was the argument, and I think this was Justice Alito, that places where there is security can be sensitive places because you don’t need your gun because security is being provided for you. And my thought was, really? Does that mean that the SC or any court, if the metal detector is not working and the guards are on strike, that judges would feel comfortable having families of the defendant and everyone else packing heat, loaded guns? Again, I don’t think so. So I don’t think that there was a logical line that was drawn.

 

      And of course, it exposed the ultimate fallacy, which is if guns are the recipe for safety, why are you restricting them? Wouldn’t the safest Yankee Stadium be one in which everyone has loaded guns? And the courtroom, Your Honor, when you’re hearing a case with a criminal defendant, maybe it’s a mob boss, and their entourage all has loaded guns, is that -- apparently, the logic is that’s the safest scenario. Again, I don’t think so. Maybe there are some who feel that.

 

Hon. Thomas Hardiman:  Thanks. Monsieur Brillard?

 

Mr. Brillard:  Thank you, Judge. My name is Brillard. I’m a French citizen, and I would like to make a short remark and one question. The short remark is that I often hear in this country the U.S. should do like the Europeans, and especially like the French, and it would be much safer, blah, blah, blah. Okay, well, I’d like to remind you that for the French, to the French, during our Revolution, we regarded the right to bear arms as a part of our freedom. And a prohibition of bearing arms is very recent, it’s 1939. And the right to bear arms is still today an issue in our country.

 

      I have a question for Mr. Lowy. I heard that you made a connection between the prohibition or the restrictions to bear arms and safety and death by violence. My question is, who are you talking about? Are you talking about bad or honest people? When you say many people die from arms, I’d like to know whether if in the states which prohibit or restrict the bearing of arms, are there more honest people who die from violence? This is my question.

 

Jonathan Lowy:  Well, the studies show that states with restrictive gun laws have the lowest gun death rates, while the states with permissive laws have the highest gun death rates. Same thing with carry laws, that when states have allowed permissive carry, there is a higher gun death rate.

 

      Now, when you say are these honest people or not honest people, Trayvon Martin -- we have concrete examples here. He was by all accounts an honest person. He was a teenager walking to his father’s carrying Skittles and a soft drink. And he was killed by what I think people would call an honest person who thought he was exercising his Second Amendment rights.

 

      I think it’s also sort of a fallacy to talk about honest or not honest because even if there’s justification, we don’t have the death penalty for those offenses. Ahmaud Arbery’s killers are on trial right now, two men who followed him, thought he looked like someone who or heard of someone who had broken into -- committed some robberies or thefts or something, and they killed him.

 

      Now, I don't know whether Ahmaud Arbery was guilty or not. I don’t think there was any basis for this. But, of course, even if he was guilty, we don’t have capital punishment for that crime, and we certainly don’t have civilians making on-the-spot judgements that they are going to inflict capital punishment. And that’s what happened, and that’s what does happen. And those are examples of quote, unquote, “good guys.”

 

David Thompson:  Let me just say, if I may, I think when we talk about the gun death rate, we’re asking the wrong question. In ancient Rome, the gun death rate was zero, and if you had a society with no guns, you’d have a zero gun death rate. The question is, to the extent any of this matters under tiers of scrutiny, what’s the death rate, because you have a powerful substitution effect where people use other means of killing each other.

 

      And when we look at the social sciences, can we really tell what these numbers mean? The National Academy of Sciences did a meta study, and they said you just can’t tell. It’s just not a significant causal factor in crime whether you have these laws or not.

 

      Now, John Donohue of Stanford Law School says that he can tell. He has created -- he doesn’t compare actual states; he compares synthetic states. He takes part of California and combines it with part of Mississippi and says if you take this hypothetical state and compare it with this other one, and you treat these laws like a light switch, whether they’re either in this camp or not, then there’s a problem.

 

      And Bill English has come forward and just blown that apart by showing, number one, the synthetic analysis doesn’t work in this context, number one. But number two, it’s not a light switch because the moment that you have one of these laws passed and people can start carrying, it takes time. In Florida, it took a couple of decades for there to be millions of people with carriage licenses. And if you look at that as a timed sequence, you see all of the allegedly bad effects go to zero and flip positive, and that these laws actually have a positive effect.

 

      That went into the Supreme Court. New York and its allies had no answer to Bill English. It was conceded, the validity of his study. There is no answer to it. And so the social science is clear. Theses laws are beneficial. It doesn’t matter because the founders took the policy off the table, and we look at text and history, and I trust the founders rather than the New York State legislature in 1911. But the reality is if we were going to decide our laws this way, the social science would favor those who favor carriage.

 

Prof. Mark Smith:  Yeah, and I want to add a few things because Trayvon Martin keeps coming up. I think there’s a few points that need to be understood about this situation. The first is in America, we’re citizens and not subjects, again, so being a right of citizen means you have a right to bear arms.

 

      The second of all is I think that you raise an excellent point, and you can break down the statistics. If you actually look at the data of gun deaths, which is, of course, gun deaths -- guns don’t kill anyone. Criminals kill people, but let’s talk about criminals using guns deaths. First of all, you have to take the gun violence statistics and cut it by 66 percent because when they talk about gun violence, two-thirds of that is suicides. So now you’re looking at a subsegment of just homicides by guns.

 

      Then what you do, and you can do this, you take a look at the number of deaths where the perpetrator had a felony record, and then you look at the number of instances where the victim also had a felony record, and what you find is most of these crimes involving guns are gang related, criminal on criminal, killing each other in gang battles in places like Chicago. And the way they do that is you look at the perp and the victim, and when they’re both felonies and they’re both felons with convicted records, ding ding ding, neither is allowed to own a gun under federal law. So any more gun control won’t work because they’re not allowed to have a gun.

 

      And by the way, on the Trayvon Martin thing, here is the lesson of Trayvon Martin. The lesson of Trayvon Martin is this, that defensive gun uses of the type that Bill English talked about where you have 1.67 million of them a year, or over 4,000 a day, defensive gun uses are reported in the media at best locally, if at all. The misuse of guns is reported by The Washington Post and The New York Times and the national legacy mainstream media all the time. So they talk all about the “guns are bad” side of the equation, and they conveniently ignore the defensive gun use side of the equation, except when they talk about something like Trayvon Martin.

 

      But let’s talk about Trayvon Martin and George Zimmerman real quick. George Zimmerman’s head was beat on the ground with concrete so badly that the photographs at the time that the police investigated this, they said there’s no crime here. This is clearly an act of self-defense. Only several months after the decision not to charge George Zimmerman with the death of Trayvon Martin, only after a PR campaign that really drove the district attorney to charge George Zimmerman did they charge George Zimmerman, who then tried the case and was then exonerated by self-defense.

 

      So this notion that Trayvon Martin is an example of an innocent person getting shot or something by a criminal or a law-abiding citizen with a gun was simply not true, because again, Zimmerman’s shot was deemed self-defense. It was actually not even charged, and then it was charged, and then it was tried, and it was self-defense.

 

      And I think we may see something similar in Wisconsin this week. Only time will tell.

 

Hon. Thomas Hardiman:  I’m sorry to say that we’re too short on time to take your questions, but you’re certainly welcome to chat after. Thank you all for coming. The luncheon is across the hall, the Rosenkranz Debate. Please thank our panelists.

12:30 p.m. - 2:30 p.m.
13th Annual Rosenkranz Debate & Luncheon

2021 National Lawyers Convention

Topics: Constitution • Corporations, Securities & Antitrust • First Amendment • Security & Privacy • Separation of Powers • Free Speech & Election Law
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". The final day of the conference featured the thirteenth annual Rosenkranz Debate.

RESOLVED: Concentrated corporate power is a greater threat to individual freedom than government power

Featuring:

  • Mr. John Allison, Executive in Residence, Wake Forest University School of Business; Former President and CEO, Cato Institute; Former President and CEO, BB&T
  • Mr. Ashley Keller, Partner, Keller Lenkner LLC
  • Moderator: Hon. Douglas H. Ginsburg, U.S. Court of Appeals, D.C. Circuit

Speakers

Event Transcript

Eugene Meyer:  Good afternoon. Good afternoon, everyone. Welcome to our 13th Annual Rosenkranz Debate. My name is Eugene Meyer, and I want to express our gratitude to the Rosenkranz Foundation for supporting this event for more than the last decade. We love having this Saturday centerpiece for our convention, which is an intellectually sharp, one-on-one debate between two highly prominent legal theorists and public policy experts. It has been quite a distinguished career.

 

We’re privileged to have moderating this year’s debate Judge Douglas Ginsburg of the U.S. Court of Appeals for the D.C. Circuit. He’s not only been a great friend of the Society and a wonderful judge, but he’s also done some superb and invaluable work with A More or Less Perfect Union, his three-hour program for PBS on the Constitution emphasizing the importance of originalism which premiered in January 2020, and when COVID-19 closed the schools, was broadcast repeatedly on stations throughout the country.

 

In September of this year, he released Civic Fundamentals, comprising 100 two-minute videos addressing the questions on the naturalization test and explaining the history and the philosophy behind the answers. His aim is to get these materials into classrooms of a million students per year, and there is a brochure on this on most of your tables. To introduce our debaters and to conduct the debate, I am honored to call on Judge Douglas Ginsburg.

 

Hon. Douglas H. Ginsburg:  Thank you, Gene. Welcome, federalists and friends. The debate this year, the resolution, is concentrated corporate power is a greater threat to individual freedom than government power. I must admit that until I saw this formulation, I had never thought about this question. And yet, I think it’s a terrific question, and we’re going to have a very informative debate bringing out the nuances of this.

 

Our debaters are, for the affirmative, we have Mr. Keller here, Ashley Keller, who is a partner in Keller Lenkner LLC. He has a fascinating background. I think he represents clients in a wide variety of practices and types, including antitrust, my particular interest. And he’s one of the leaders of Keller Lenkner’s products-liability practice as well. Ashley represents numerous states in antitrust litigation against Google for monopolizing products and services, services used by advertisers and publishers in the online advertising market.

 

What did I want to say? Yes. Before launching the law firm, Ashley cofounded a litigation finance firm, fascinating aspect of his background, which grew to more than $1.3 billion in assets under management and was the world’s largest private investment manager focused on legal and regulatory risk. That firm was acquired by Burford Capital in 2016.

 

Before all of that, Ashley was a partner at Bartlit Beck in Chicago. He was a law clerk for Judge Posner on the Seventh Circuit and for Justice Kennedy on the Supreme Court. He was educated at Harvard College, received his real education at Chicago, where he got an M.B.A. from Chicago Booth School of Business and a J.D. from the University of Chicago Law School, where he was graduated first in his class from a school that still ranks its students. Somewhat Burkean, I think.

 

Then, in the negative here of the resolution, we have John Allison, a name known to many of you. He’s now Executive in Residence of the Wake Forest University School of Business. But John is a member of Cato’s Board of Directors and Chairman of the Executive Advisory Council of the Cato Institute’s Center for Monetary and Financial Alternatives. He was president and CEO of Cato from 2012 to 2015. Before that, he had been chairman and CEO of the BB&T banking firm, which was the tenth largest financial services company in the United States.

 

He’s the author of The Financial Crisis and the Free Market Cure: Why Pure Capitalism is the World Economy’s Only Hope and of The Leadership Crisis and the Free Market Cure: Why the Future of Business Depends on the Return to Life, Liberty, and the Pursuit of Happiness. John is a Phi Beta Kappa graduate of the University of North Carolina-Chapel Hill. He received his master’s degree in management from Duke University, and he’s a graduate of the Stonier Graduate School of Banking. He’s also been the recipient of six honorary doctorates. Oh, my goodness, I just heard. I agree.

 

The ground rules are these. The affirmative will begin with 15 minutes. Remember the resolution is that concentrated corporate power is a greater threat to individual freedom than government power. So we’ll begin with the affirmative case for 15 minutes from Ashley Keller, and then from John Allison the negative for 15 minutes. There will be time for rebuttal after that. So, Ashley, you are on.

 

Ashley Keller:  Thank you, Judge Ginsburg, and may it please the federal courts.

 

      Concentrated corporate power is the greatest threat to the people’s cherished liberties. And throughout our history, that wasn’t true. Government was our greatest threat, and the framers knew it. As Thomas Jefferson noted, “When the people fear government, there is tyranny. When government fears the people, there is liberty.” Or as the father of our nation reputedly said, “Government does not reason. It is not eloquence. It is force. Like fire, it is a dangerous servant and a fearful master.”

 

That was true at the dawn of our republic and remained true throughout our history. Each successive generation of Americans has an obligation to remain vigilant against abuses of government power. Ronald Reagan used different but no less eloquent words than the framers to modernize their warnings about government. He opined that the nine most terrifying words in the English language are, “I’m with the government, and I’m here to help.”

 

I’m distressed to report something that many in this room already know. We seem to have just crossed over a key inflection point in American history, where government power is no longer the people’s greatest threat. It’s still a menace, to be very sure. And we must never ignore that front of the unending battle to preserve our God-given freedoms.

 

But those of us who care about individual rights must now confront a rear-guard action, where massive corporations are pursuing a common and mutually agreed upon agenda to destroy American freedom. In our time, the nine most terrifying words in the English language are, “I’m Facebook, and I know what’s best for you.” You can substitute Facebook for Meta, or Alphabet, Amazon, Coca Cola, Goldman Sachs, JP Morgan, Twitter, or Walmart, and your level of terror should be undiminished.

 

Defenders of freedom must face reality. The Chamber of Commerce is not our friend. The C-suite grandees who finance it are not our friends either. They were erstwhile allies of convenience, and they are now the enemies of a freedom-loving people. To support that contention, I’d like to start with the why. Why is it that concentrated corporate power is such a menace today? I think it’s actually the intersection of several different problems. And, no, this is not me embracing intersectionality.

 

The first problem we face is the swelling ranks of so-called woke people, who are completely and unabashedly opposed to individual rights. And you don’t have to take my word for it. Just ask the woke-atariat. They will unapologetically tell you that America’s founding was an immoral act designed to solidify white supremacy, that the Bill of Rights is racist, the right to freely express controversial ideas is a form of micro-aggression, the right to practice traditional Judeo-Christian values is a pretext for marginalizing powerless communities.

 

If you choose not to speak in favor of a cause you don’t support, well, guess what? Silence is violence. Choose instead to condemn looting, arson, and lawless mayhem, guess what? Destruction of private property isn’t violence. It’s just a peaceful protest intensifying to repair a past injustice.

 

These views are incompatible with American conceptions of individual freedom. And it doesn’t take a Rhodes scholar to observe that these views are not evenly distributed throughout our population. The 70-year-old farmer in Kansas is not equally likely to be woke as the 25-year-old software engineer in Silicon Valley, oh, no. The woke-atariat is composed almost exclusively of young, highly progressive people, which means, in turn, that the exercise of individual freedom that they seek to suppress is the freedom of moderates and conservatives. Those are the people, if the woke have their druthers, who can’t speak freely, can’t freely exercise their religion, enjoy their property rights, or avoid race-based discrimination.

 

Now, because I do support individual freedom, normally I would not offer up these toxic viewpoints as an excuse to enlist the heavy hand of the state. The cure for puerile, mendacious speech is mature and enlightened speech. So, in an ideal world, I would favor someone with a lot more patience than I have explaining to these misguided snowflakes that they live in the greatest country on God’s green earth.

 

The only reason they’re allowed to spread manifest calumnies about America is because they are enjoying the freedoms that only America provides. If they want to really understand a society without individual freedom, I suggest they go to Xinjiang and spend some time in the public square protesting the Chinese Communist Party’s brutal oppression of the Uyghur Muslims. In fact, I’ll splurge for the airline ticket. The Chinese Communist Party will splurge for the reeducation camp. There’s no need for Uncle Sam to do anything.

 

But, alas, the highly liberal woke ideology is not our only problem. The second problem we face is that, seemingly overnight, corporations have almost uniformly abandoned Milton Friedman’s shareholder primacy model of the firm. What does that mean? Milton Friedman had this crazy idea. The purpose of a company is to make money, not to take shareholder resources to support social agendas or the private interests of officers and directors. Now, this, of course, doesn’t mean that CEOs can’t support political causes. Of course, they can. Of course, they should. But they should do it with their own money, not the official infrastructure brand and massive treasuries of the companies they run. Think of it as a Hatch Act for corporate officers.

 

For my entire life at least, corporations more or less adhered to Friedman’s model. There were, admittedly, a few questionable incursions into public policy and social issues. But even then, at least the companies had the decency to lie to me about it, pretending that they were doing this to maximize profits. Companies aren’t pretending anymore. Thanks to the emergence of so-called stakeholder primacy, corporate officers and directors now brazenly admit that they are making decisions that don’t maximize profits.

 

So how do they make decisions? Well, it’s with every conservative’s dream come true, a Justice Breyer style multi-factor balancing test. Sure, sure, shareholder profit, that’s important. We’ll consider that. But so is the company’s commitment to the environment and the employees and our communities and to the world writ large. And when you weigh all of those things together, voila, corporate agents can do whatever the hell they want.

 

And what do they want? Why, to virtue signal to the woke, of course. That’s why CEOs routinely alienate more than half of their customers by spewing lies about voter ID laws that 80 percent of Americans support. It’s why your inbox is flooded with daily emails from companies you patronize, explaining how they plan to discriminate on the basis of race in order to fight racism.

 

Hey, Gillette, here’s a news flash. I buy your razor blades because they do the least bad job of getting the stubble off my face. I don’t give a damn what you’re CEO thinks about political science, so stop with the spam, for the love of God.

 

Once again, this new form of corporate waste in itself doesn’t support government regulation. If a bunch of foolish businesses want to abandon the profit motive, that should mean other businesses can start with a laser focus on profit. Those businesses should have a lower cost of capital and will steal a huge swath of customers who want their razors cheap and their razorblade manufacturers politically neutral. So my instinct is always let the invisible hand work. Let the market correct itself.

 

But we can’t because of the third reality we face, which, coupled with the first two factors, creates a problem that cries out for a solution. Corporations today have a durable concentration of market power. Tech giants, like Facebook, Amazon, and Twitter have natural monopolies that can’t be easily displaced. Other companies wield monopolistic market power, not by themselves, but by using third party organizations to facilitate horizontal agreements that in aggregate prevent normal market-correcting mechanisms. When we apply this trio of factors to individual freedoms, the results are terrifying and implicate the same concerns that justify protecting individual freedoms from government power.

 

Let’s take as an example the freedom of speech. What’s the common rationale for preventing the government from controlling the content of speech, or worse still, suppressing one side’s viewpoint? It’s that we can’t trust government bureaucrats, however well intentioned, to separate true ideas from false ones, and so a vigorous marketplace of ideas is the lifeblood of republican society. No matter how controversial or uncomfortable an idea might make someone, individuals have a right to air all views, and we trust a free and informed people to decide for themselves what is true and what is false, and then to support in the voting booth leaders who share that perspective.

 

That rationale stands undiminished if you replace a government censor with a private, all-powerful one. Facebook, Twitter, and Amazon, with some $3 trillion in market capitalization between them, each have durable monopolies in the dissemination of various forms of content. Because each company no longer adheres to Milton Friedman’s view of the firm, each has and continues to throttle, alter, or outright suppress content, even if that means fewer advertising views and thus lower profits.

 

And because these tech giants obviously cater to or are run by young, woke liberals, the profit-destroying speech that they suppress is almost universally moderate or conservative viewpoints. I don’t trust the government to choose which viewpoints are true or false, but I sure as hell don’t trust Mark Zuckerberg, Jack Dorsey, or Jeff Bezos to do so either.

 

As another illustration, let’s consider a person’s right not to be treated differently on the basis of race. Why is this right vis-à-vis government written into both the constitution and the statutes at large? It’s because it’s deeply immoral for the government to wield its awesome power to punish or reward people on the basis of an immutable characteristic. Yet, examples abound of corporations acting in concert to flagrantly violate this right.

 

Here’s an example that may strike a little close to home. A legion of Fortune 500 companies are using third-party organizations like Diversity Lab to agree with each other that they will only purchase legal services from law firms that staff their matters with 33 percent minority lawyers.

 

Do you remember the good old days, when liberals promised that diversity was just a plus factor and quotas and racial floors would never be countenanced? Well, AT&T, Coca Cola, Facebook, General Electric, Hewlett Packard, Microsoft, Pepsi, 3M, Walmart, and scores of other companies with trillions upon trillions of dollars of market capitalization have all agreed with each other to change that paradigm. Lawyers can’t avoid discrimination on the basis of immutable characteristics when more than half of the clients who purchase legal services collude to implement these deeply immoral quotas. It is indeed assorted business, this divvying us up by race. It also is and must be illegal business.

 

Or how about companies forcing employees to go through morally bankrupt critical race training that’s more redolent of something cooked up by the Ministry of Love than a McKenzie inspired efficiency seminar? To the CEOs out there who are pretending not to know any better, George Orwell meant 1984 as a dystopian cautionary tale, not your instruction manual.

 

Your so-called educational sessions are segregated by race and teach that America is a white supremacy system. Whites who believe in merit, objectivity, capitalism, color blindness, or that we are all equal in the eyes of God are guilty of racist thoughts. They can’t improve until they accept their guilt and shame, embrace the idea that white is not right, acknowledge that they are racists, and then pledge to take on a newly created anti-racist identity.

 

This is not the claptrap being heard in some obscure professor’s office hours, oh, no. This is required content at Walmart, a $400 billion company with 1.6 million American employees. They make 14 bucks an hour. They’re not privileged or entitled. They just face a daily struggle to pay the rent and make ends meet.

 

What’s more, the CEO of Walmart is Doug McMillon. He makes a little more than $14 an hour, and he’s using his perch as the president of the business round table to get other Fortune 100 companies to force this same racist prattle on their workforces. If Doug McMillon wants to spew lies about America and engage in the cruelest irony by branding people racist solely because of the color of their skin, he ought to have the decency to reach into his own pocket to finance that noxious speech. The $22 million that Walmart shareholders pay him each and every year is more than enough for him to get started.

 

As for the hapless employees who are being subjected to this disgraceful treatment, in many geographic markets, Walmart is by far the largest employer of low-skilled labor. And if it’s permitted to band together through a trade organization with other employers who agree to force this content on employees, the fact that labor is mobile is a Hobson’s choice. It is no answer to say to a low-skilled, low-income worker, “You’ve got the right to avoid race-based treatment on pain of losing any chance at a sustainable livelihood.”

 

It is crystal clear, to me at least, that something must be done about our present predicament. And I’m the first to concede none of the problems I’ve just articulated violate the Constitution. So we need to work with statutory law. And given the current political climate, it would be ideal if this was a law that was already on the books rather than pinning our hopes on new legislation.

 

Hon. Douglas H. Ginsburg:  One minute.

 

Ashley Keller:  Now, if only we had a statute that prohibited abuses of monopoly power or prevented horizontal conspiracies in restraint of competition. Ah, yes, we have a long tradition of vigorously enforcing the antitrust laws for the societal good, and my proposed solution is to do so here. We should define product and geographic markets the same way. Courts should impose the same injunctive remedies for violations as they always have.

 

The one twist that is warranted by the present circumstances is that courts should consider difficult to quantify harms to competition when analyzing anti-competitive effects. If huge corporations aren’t going to focus solely on the bottom line, in violation of the Milton Friedman principle, courts shouldn't do so either. Conspiracies to aggregate market power to deprive people of their cherished liberties imposing calculable damage on the foundation of American society. They should be unlawful per se.

 

Hon. Douglas H. Ginsburg:  Thirty seconds.

 

Ashley Keller:  And huge monopolies that attempt not just to make monopoly profits but to remake American society in the way that a half dozen billionaires might prefer does similar irreparable harm to the American way of life. Article III judges, I implore you to do your jobs and put a stop to this madness before it is too late.

 

Hon. Douglas H. Ginsburg:  John, I take it that your remit is now to tell us that all of that, notwithstanding, that of government power is still worse. So have at it.

 

John Allison:  All right. Well, first, thank you for the invitation to be here today. I have a very high regard for The Federalist Society. Frankly, there are not many attorneys outside of The Federalist Society who are strong advocates for limited government and free society. I’ve had the genuine pleasure over the years of working with Gene Meyers, and I’ll tell you he’s been a great person to work with and very productive.

 

      I am a banker instead of an attorney. So I may have a slightly different perspective world view, although I’ve been fortunate to work with a lot of world-class attorneys over the years. During my 40-year tenure at BB&T, including 20 years of CEO and 3 years of CEO of Cato, I’ve had an interesting experience of working with many government regulators and politicians at all levels. It’s been an education, I’ll tell you that.

 

I would say, interestingly enough, I don’t disagree with Ashley on a lot of what he said, and I’m taking a very different approach. What I disagree with is that business is a cause in that. Every issue that he’s raised were forced on businesses, and that’s what people don’t really understand. The regulatory impact on business is subtle and very powerful. Resolution concentrated corporate force is a greater threat to individual freedom than the government. It’s not. That’s just the fact. Governments have guns.

 

You think corporations just go around and do what they want to do? No, it don’t work that way. Sorry. Walmart can offer you great prices, special deals, etc., but they can’t make you buy their products. The government can make you. They can take your property. And by the way, they do that a lot, a lot more than people realize. You see that in the banking business. They can put you in jail. They can kill you. In fact, governments throughout history have killed hundreds of millions of people. Government is about power, and it is potentially extremely dangerous.

 

When I was working at Cato, we had many horror stories about government. Is cronyism an issue? And I really actually thought this was what we were talking about. It absolutely is. It’s a significant problem in good times. Congressmen, senators are often for sale, for rationalization. I think if congressmen were always for sale, almost everything Ashley talked about wouldn't exist. They’re not always for sale. The irony is that cronyism goes away very quickly in the bad times. It only takes a little change in administration, like Obama versus Trump versus Biden, and all the rules change, which makes it very difficult to operate.

 

Let me talk about a few examples of some things that I’ve been personally involved in. Citigroup, which was the largest financial institution in the world, has been the classic crony capitalist over the years. In my career, they failed three times and been bailed out by the government.

 

Interestingly enough, however, the last time they failed, they didn't get bailed out. Most people think they got bailed out, but it didn't work that way. The head of the Federal Reserve at that time was Bernanke. Now, Bernanke was an interesting guy. He was paranoid, is the only word I would have. In fact, he wrote a book. And in that book, he described his tremendous fear that the financial crisis was going to get much worse and was going to destroy the economies of the whole world.

 

I, in fact, personally thought that was bizarre. I was running a bank, and we were doing fine. Most of the normal economy in the U.S. was doing fine. The fact that Citigroup was in trouble -- now, I’ll have to admit, if I had been Bernanke, I’d have taken over Citigroup, like you do at lots of failing banks, broke it up, and sold it. And the world would be a better place to live today, frankly. The banking industry would be more diversified. There’d be more competition. It’d be a good thing.

 

But I don’t think Bernanke took over Citigroup because of cronyism. He took it over because he was afraid that their problems would turn into a global economic collapse. In fact, when the feds took over Citigroup—and it took over a number of other large financial institutions—they chose who the CEOs were going to be. They put a number of representatives on the board, they put in a group of people to supervise the board, and they had control of those large financial institutions.

 

The results were horrendous, by the way. The growth—this was happening under Obama’s administration—economic growth during Obama’s administration was one of the slowest periods in U.S. history. And one reason was the banking industry wasn’t functioning very well. And Citigroup stock returns during that eight-year period were way below the market, way below the market. And it finally ended when Trump took over, and not big fan of Trump. But anyway, at least he got rid of that.

 

It’s not that Citigroup was saved by cronyism. I went through the corrections in the early 1980s and the early 1990s, and the economy was really in a lot worse state than it was in 2008. And yet, Bernanke and the Fed, by their actions, acted like the economy was going to go broke. And to some degree, they created very substantial problems.

 

Another example -- I’ll give a personal example in the banking business. The bank in Alabama called Colonial Financial had been a pretty good size bank, had been very successful on paper for a long period of time. They were classic cronyists. They had connections with the local governments, the state government, and the federal government.

 

And then, suddenly, the FDIC, which had been giving them excellent marks, as strong as you could be for years, realized that the bank was a mess. And this happened when they ended up changing examiners at the bank. And they eventually took it over and sold it. We happened to buy the bank with guarantees from the FDIC. But there was this government regulator basically sanctioning this Colonial Bank, which allowed them to raise deposits at cheaper prices, become more competitive with other banks, when in fact, they were bankrupt all along.

 

Another example, and this is an interesting one, probably impacts everybody in here, home builders. Now, for 60 years, home builders have had tremendous political clout. It’s kind of off the chart. They hide behind having a home’s a good thing. They’re mostly interested in selling homes and making a profit, of course.

 

However, the cycle ended in 2008, 2009. And this is why cronyism never really works long term. Obama had no mercy for home builders. He didn't like home builders for whatever reason. He didn't like developers. And he was focused on saving individual homeowners, which is kind of a disconnect since home builders own tons of money and they’re forced to sell their houses. What’s going to happen to prices? Prices are going to fall.

 

The FDIC had been gutted before the financial crisis. This is how this regulatory stuff works. They had allowed tremendous risk in the home building industry. They suddenly tightened down on home builders. What was interesting, and this was not fun to go to, they hired a bunch of kids, rightly out of college who didn't really know anything about banking or the economy because they hadn’t staffed up. They had no staff. And then they hired a bunch of guys that got failed. They hired the guy that is supervisor, that was somebody we fired. That’s an interesting person to be supervised by.

 

Anyway, and they suddenly changed the rules. They forced us to put home building customers, residential builders and developers, out of business that had been customers of ours for 40 years, where we dealt with the grandfather, the father, and the son in the home building business.

 

In the early ‘80s and early ‘90s, we had a similar -- it’s actually a worse economic correction until the federal government screwed it up. And we kept those home builders in business. We worked with them. And they came out and they started building homes again. In the 2008 period, 90 percent of the home builders in the United States went out of business, 90 percent.

 

You want to know why housing prices are high today? The government wiped out the home building business, something that banks -- we certainly never would have done. It’s a real unfortunate tragedy. It was also tough. I mean, these were good people in many cases that had had their lives ruined. We wouldn't have a housing shortage today, home prices would be substantially lower than they are today if the Federal Reserve, the FDIC, hadn’t wiped out the home builders. Again, a craze of cronyism that worked in the good times and turned into a disaster in the bad times.

 

But the point of that is the government made the rules. They can be nice, and they can be nasty. They can change because of different economic environments. They can change because of different administrations, different political environments, and they do. If you actually operate a business like a bank, there’s no effort to kind of smooth things. It’s fundamentally, at the end of the day, it’s driven by the political beliefs of the president and his party.

 

I could go on with examples for a long time, but we don’t have time to do that. In general, in my experience, many more corporations have been crushed by the government than have been helped by the government over a longer period of time. I mean, many, many more.

 

By the way, the most elegant and interesting example is not a corporation, of cronyism, is the teachers unions, and that is at the local level, the state level, the federal level. They’re something. They are something. Unfortunately, I don’t have time to tell you about the teachers unions. If somebody wants to ask a question, I’d love to talk about it because I actually have a cure for what we need to do. But it really has hurt the quality of education in the United States. It’s tragic. The teachers unions, in my view, are the worst enemies of students we have in this country by far.

 

Here’s an interesting fact. Of the 50 largest businesses in the U.S. in 1928, only 15, 30 percent, were still in business in 2018. So 70 percent were gone. And of the 30 percent that was left, every one of them was really a different business. They had survived by changing their business. Now, if you look at the history, all those businesses that are gone at one time or another were cronyists of one kind or the other. But cronyism is suicide in my personal opinion. When we ran BB&T, we did everything we possibly could to avoid the government. We didn't want any favors from the government. We just tried to keep them out of our business.

 

And I think companies that were forced -- I mean, if you take a Google and a Facebook—and we could talk about this—those companies started out trying not to get involved with the government. But the government got involved with them. They came up with excuses because they like power. They like control. And the things, if you think how radically Facebook and Google’s strategy have changed, it’s not because Facebook and Google wanted to change it. It’s because if they didn't change it, the government was going to close them down.

 

Capitalism by corporations is a concern and can be disastrous in good times. Based on my many years of experience working with corporate bars and running Cato, I’ll tell you with absolute certainty, in the long term, government always prevails. And, again, they have guns.

 

Hon. Douglas H. Ginsburg:  Ashley, seven minutes to rebut that.

 

Ashley Keller:  Thanks, Judge Ginsburg. And I neglected to say at the outset, thank you, John, for agreeing to participate in this debate. It’s a real privilege to be opposite you.

 

      I think my principal rebuttal point is objection nonresponsive. And I say that, just like you, agreeing with a great number of the things that you said. I take a back seat to nobody in my disdain for excessive government regulation. I believe in free markets. I believe that the government will always do a poor job, even if it’s well intentioned, at trying to allocate scarce goods and resources. And so, all of these regulations that you see coming from the state and federal levels are often harming consumer welfare.

 

I’m a proud graduate of the Chicago School. I respect all of those principles. I can draw the supply-and-demand curve and show you the consumer surplus section of it and show you why taxes and regulation adversely impact it. That’s all stipulated to the silly government regulations that harm bottom lines and make it harder for people to get the goods and services they want are a bad idea, and we should be against them.

 

I also think that the thing you didn't have time for is extremely important, and we should always make the teachers unions the object of our spleen. So that’s a point of common ground as well.

 

But name a single solitary government regulation that is causing the corporate malfeasance that I articulated in my opening remarks. Point to the regulation that says it’s a good idea to have racial quotas, and you should go out there and insist that law firms engage in outright violations of the civil rights laws. Show me the government regulation that says that Twitter or Facebook should throttle content and that Amazon should disallow Parler from using Amazon web services because it was the most downloaded app. You will not find anything in the CFR and the statutes at large in anything that is making corporations engage in this outrageous behavior because it’s not a problem of government regulation.

 

It’s not that we grew government too big and too fast, which we have, which is why I’ve always said government remains a menace. We still have to watch that front of the war. But these are corporate actors acting on their own or in concert with other corporate actors because they want a virtue signal right now in a way that is harming people’s rights.

In a different period of time, we could absolutely swing back to the situation where “I’m with the government, and I’m here to help” are the nine most terrifying words in the English language. But that’s not the moment in history that we’re in. And we have to take stock of the actual things that we’re seeing in the world.

 

The one point that I think is somewhat responsive and that I want to get into, you are correct—and I also agree with this point—that the government has the monopoly on the legitimate use of coercive force outside of emergency circumstances, i.e. they have guns. By the way, I’ve got guns too.

 

[Laughter]

 

John Allison:  You don’t have as many as the government.

 

Ashley Keller:  That’s right. They do have more than me, although you don’t know how many I have. I’m a collector.

 

      But that is a point worth rebutting because I agree that the government having all of these guns and the ability to use coercive force to throw people in jail, to even execute them for certain capital crimes is an awesome power. And so we have to take it very seriously, and we cannot pretend that government is not a threat to our rights.

 

      But I think, at least at this moment in time, we have trained the government not to use their guns in flagrant violation of our rights. We should be careful about that. We shouldn't slip up. We shouldn't lose our vigilance. But there are so many examples of the government trying to stray out of its lane and to impinge on the people’s liberties where they get shut down immediately, thanks in large part to many of the people in this room.

 

Some recent examples, the government tried to discriminate on the basis of race and give farming subsidies only to minority farmers. It got shut down in a nanosecond. California tried to force speech codes by saying you’ve got to use particular pronouns and, if you have objections to that, it could be punishable by fines that were criminal in nature. The California Supreme Court unanimously shot that down and said that’s a violation of the First Amendment. If the government ever tried to engage in the throttling of speech that Twitter or Facebook is engaged in, they would get Rule 11 sanctioned by some judges in this room because it would obviously be a violation of the First Amendment.

 

And so, yes, we have to worry about creep. Yes, we have to worry that the government -- it’s like a velociraptor. They’re constantly testing the cage to see if it’s electrified. And if you let them get away with things, they’re going to take advantage. But at least, right now, they’re pretty well trained to realize that you can’t flagrantly violate the Constitution.

 

Of course, there are disagreements about constitutional principles and the scope of rights. And everyone in this room is right, and the other side is wrong. There’s generally broad consensus about what the government can and cannot do, and corporations are running amok and crossing all of those lines. And I don’t think you could point to any regulation that’s causing the corporations to do it. They’re doing it of their own accord.

 

Hon. Douglas H. Ginsburg:  John, you have more?

 

John Allison:  Yeah. I appreciate a lot of what Ashley said. I do think it’s naïve. It’s naïve because he’s never actually been in business and seen how the regulators operate. It’s nice to believe that we have rule of law. We kind of have rule of law. What we really have is rule of regulators, and that is a lot of our problem. And the regulators make up the law, and it changes often. It’s really hard as heck to follow the law because it depends on administrations. It depends on political environment. It depends on what’s happening in the newspapers.

 

This whole woke -- I happen to know some of the CEOs that have come out for the woke thing. They hate woke, but they’re afraid not to be woke because the regulators will crush them. And the regulators don’t need regulations to come after you. I can tell you that from personal experience. But they can find something wrong.

 

And by the way, if you’re running a business, there are so many regulations, it is impossible to follow them all. You can’t do it. You can’t do it. And they can find something you -- I think if you follow one regulation, you violate another. I was trying to remember some of the law -- in the banking business, there are eight or ten laws that are contradictory. And the regulators decide what data to enforce the laws.

 

So it’s nice to say, well, the law hasn’t changed. The regulations haven’t changed. But they have changed. They change because the regulators change every time you get administrations or when you get a lot of press, a lot of press. But I guarantee you the regulators are tightening down. In fact, I know, from personal experience.

 

This whole thing about critical race theory, boy, that is super forced on businesses. If you’re trying to manage a business, that is a really difficult thing to deal with. I’ve heard a number of CEOs complain about it. And they have to have these training sessions, which they hate because it makes half their employees mad, and the other half don’t like them because they’re having this session. It’s not something that they do voluntarily.

 

The regulators are driven by politics. I mean, it’s within a range, but it’s a pretty dadgum big range. If you guys wanted to do something, make the regulators obey the law. That would be the most powerful thing you could do to improve freedom in this country because they just make up the laws. And, of course, one thing you could do is get Congress to actually write laws so they don’t have all this flexibility. And we really have rule of law, that’d be great.

 

So it’s not -- another thing. Google, Facebook, Amazon, the probability of them being basically out of business or being a much diminished force in our economy in ten years is huge. This goes back to why I told you the example of what I saw in businesses. Businesses come and go. I knew the CEO of Google pretty well. He quit, retired because the government. They’d run their business very independently, and then all of a sudden, the government was there, and he knew he couldn't stand it. He was a clear free market guy. He was a supporter of Cato, a libertarian think tank. But he got out because he knew the handwriting was on the wall.

 

The very fact that the government’s tightening up on these firms will drive them out of business because they’ll become competitors. They will come along and fill the niches that they’re leaving. There’s a lot of conservatives in this country. They may be a minority, but they aren’t going to do business with these guys that are saying, “Oh, you can’t go on Facebook.” Well, fine, then we’ll have to create our own organization. It happens. It happens all the time in business. It’ll happen again.

 

Yeah, government’s making more smoke. But we’re in good times, right? The economy’s booming. Things are going well. This is the time that, yeah, yeah, we’ll give money to the government, pay lip service to their big stuff. But kind of keep watching for when things get tougher, and they’ll go after a number of these firms, including firms that are trying to do what they think the government wants to do.

 

And, of course, you might get a change in administration because Mr. Biden doesn’t seem to be doing too well. And then, whoever comes in will probably go after the woke companies. So it’s a very interesting life. I wish it was simple that we actually had rule of law. It would be a huge, wonderful thing, but we don’t. And if you run a business, you know it every day. It’s not much fun in that regard.

 

Hon. Douglas H. Ginsburg:  Thank you, John.

 

      Ashley, I think one of the thrusts of John’s remarks is that looking at pages in the code of federal regulation or statutes and not finding anything that requires this or that is looking under the lamppost rather than where you left your keys. I mean, from my personal experience counseling businesses, regulated businesses, financial institutions, and telecoms, one of the most frequently heard complaints was regulation by raised eyebrow. You’re not going to find any raised eyebrow regs anywhere, but that’s the way we were regulated. I can’t attest personally to which eyebrow gets raised when an administration changes, although there’s some evidence of that in the press. So, what do you say to that?

 

Ashley Keller:  Yeah. I appreciate the question. Just so you know, John, I have been in business, and I have been regulated by the Securities and Exchange Commission. So like you, I am afraid of regulators and don’t like when they’re in my office looking through every box and file. So I’m aware of the phenomena that you’re referring to. I’d like to think, though, that I’m not naïve, I’m just idealistic.

 

      If you’ve got these friends who are CEOs who secretly hate the woke stuff, tell them to grow a spine and stop discriminating on the basis of race. I mean, have we gone from “I’ll pledge my life and fortune in sacred honor for the principles” to “I’m afraid of the regulator; I can’t stand up for what’s right.”? Give me a break. That’s ridiculous. And they’re violating the law in doing it. Rule of law, there are interstices. We can’t always tell what the law is. But it’s black letter law that you can’t do what these corporations are doing. These CEOs should be ashamed of themselves. And being afraid is not good enough.

 

John Allison:  Well, I agree with that. And I personally, we fought them left and right. We never gave in. But I also understand.

 

      And one of the interesting questions, by the way—and this is the argument they put back—is what is their fiduciary obligation to their shareholders? If they fight these regulators, their company’s going to be punished. It may be something else. It may be some of it. But it’s no way a business cannot—a big business—cannot violate tons of regulations.

 

      So should they have their share price creamed by the regulators coming in on their business? Or should they do backflips, whatever is necessary to make regulators happy? I think that’s a tough, tough call because they would get fired, and the guy that comes in behind them won’t do that. So what will they -- should you make that sacrifice? Personally, we fought them. I fought them left and right, and we won. But they’ve gotten a lot crazier, I think, than they were then.

 

Hon. Douglas H. Ginsburg:  So if wokeism is the thing that’s in the best interest of the shareholders, what is the management to do?

 

Ashley Keller:  Well, it’s not in the best interest of shareholders because, thank God, most of the country is not woke, and they don’t like this nonsense. But let’s make sure that we got our chronology right. This nonsense started during the Trump administration. The Brandon administration is relatively new.

 

[Laughter]

 

      Was it the Trump regulators who were raising eyebrows and saying discriminate on the basis of race and throttle speech that’s good for conservatives? I don’t think so. I don’t think those regulators were raising those eyebrows. The companies were doing this of their own accord in the previous administration, and they have accelerated their misconduct in this administration. So there’s actually continuity of wokeism between these two administrations. It’s not the change of administration that’s the problem. It’s the C-suite.

 

John Allison:  I want to react to that. Trump was pretty much discounted by the regulators. And if you think about his personality, that shouldn't surprise you. So the regulators were running independent doing what they wanted to do. I ran into that talking to a number of CEOs.

 

      And what did they want to do? They want control. They want power. They don’t want to be limited by the regulations. And they liked -- they didn't like wokeism, but they liked being in control. So they started moving along with it. And also, they felt Trump was going to get thrown out. They may have been wrong about that.

 

Hon. Douglas H. Ginsburg:  We now know that for two generations, if not more, the Federal Housing Administration consistently engaged in forcing banks to redline, to create racial zones, and to avoid financing homes that would be -- for customers that would be integrating a neighborhood or a block. Consistent, pervasive, never approved by any president, certainly not by President Truman, certainly not by President Kennedy, but that was the world the government gave us.

 

Ashley Keller:  Yeah, government’s terrible too. The resolution is not corporations are the root of all evil and government is hunky-dory, because I don’t believe that, and I wouldn't have spoken on the affirmative if it was. But I agree that that’s lawless, and it shouldn't be permitted.

 

      But right now, the notion that there are all these regulators out there secretly whispering into the CEOs ears, and we’ve just never heard about it saying, “You should do all this woke stuff. You should publicly say that you’re taking action not to maximize profit, even though secretly that’s not what you believe, and it really does maximize profit. And you’re doing all of this stuff because our eyebrow was raised a certain way.” Maybe that’s possible. You can never say never.

 

And if it comes out that that’s empirically the case, I will support the other side of the resolution then. But I don’t think that that’s what’s happening. We would have seen some evidence of it if this was driven by regulation. This is driven, I think, by the C-suite, by the CEOs, who like the psychic income they get from virtue signaling because they rub elbows with all of the people who go to the cocktail parties that New York Times folks like to go to. And they like that they’re supporting those causes that a very small sliver of elite people in this population like but the overwhelming majority of Americans disdain.

 

John Allison:  Or could I --

 

Hon. Douglas H. Ginsburg:  -- Oh, sure, John.

 

John Allison:  Because I have experienced some of what you were talking about, very interesting. When Bill Clinton was elected president -- this is an old experience, but it’s an interesting experience. When Bill Clinton was elected president, he had a lot of support from the minority community. And he promised that he would end racial discrimination in the banking business.

 

      There had been a study done by the Federal Reserve in Boston that showed there was discrimination. Now, the study ended up being totally discredited. It had nothing to do with reality. And there’s not motivation to racially discriminate. If you’re in the banking business, you want to make all the good loans you can. You have to not be in business to believe you’re going to turn down people that can pay you back, and you can make money. You don’t understand how competitive the world is.

 

      But anyway, Clinton made this promise to his minority constituents. And so he literally sent the FDIC around to find banks discriminating against minorities. He basically told it. And they went around the country and they found banks “guilty of discrimination.” And the deal was, if you’d plead guilty, they’d come up with a fine—it was a high fine, but it certainly wasn’t a killer fine—and they’d leave you alone. So a ton of banks did that.

 

      Well, they came to BB&T and accused us of discrimination. Well, a lot of our customer base is minority. At that time, we were operating in eastern North Carolina, which was agriculture minority area. I was CEO. And we said, “Wait a minute.” The way they tried to do discrimination is they would come up with these cases they had where we’d turn down a loan and we had made a similar loan.

 

Well, we said, “Well, let’s look at your evidence.” And we looked at the evidence, and it was crazy. The loans we turned down, we should have. We’d have been doing the bar a terrible disservice. They couldn't pay it back, and we’d end up owning their home. And the ones we made, we should have made.

 

We weren’t guilty. And we said, “We’re not guilty.” We hadn’t done anything wrong. Well, they said, “That’s fine. We’re only going to do a few things. You can’t open any new branches. You can’t do any merges and acquisitions. And we’re going to audit over the next six months literally with a team of 50 people,” on top of their normal audit team all auditing the bank.

 

So we ended up hiring a firm because we weren’t experts in dealing with regulators on issues like this. And we started producing lots of evidence that we weren’t racially discriminating. And they just basically threw it away. I mean, what they were going to do is keep the pressure on us so long that we had to say uncle because we needed to open branches. We needed to do merges and acquisitions, or we would get bought. And that was their whole strategy.

 

Fortunately, for us, I don’t know if you guys remember this—probably you’re not old enough—two years in, Clinton, his Democratic supporters got wiped out, and Congress suddenly was Republican. The next day, the next day—this goes to rule of law and regulators—the next day, the regulators call and say, “Hey, we really didn't mean it. We’re gone with no problem. You can open your assorted new branches.” That’s a true story. That’s a true story. That’s what rule of law looks like when you’re really trying to run an organization.

 

Hon. Douglas H. Ginsburg:  Well, on that sad note, I think we should take some questions from the audience. But we’re not going to vote on which is worse, Sodom or Gomorrah.

 

[Laughter]

 

      But we would like to get some input from the audience. Paul, is it? I’m sorry, over there.

 

Isaiah McKinney:  Isaiah McKinney. I'm a 3L at Wake Forest. Could you please speak to or argue against the ways in which government has picked winners and losers by regulating selectively and for creating and crafting regulations favorable to these big woke corporations but also unfavorably towards smaller potential competitors?

 

John Allison:  I didn't hear the question exactly.

 

Hon. Douglas H. Ginsburg: I’m not sure of it.

 

John Allison:  Yeah, repeat the question.

 

Hon. Douglas H. Ginsburg:  We need you to repeat the question a little louder.

 

Isaiah McKinney:  Could you speak to the ways in which the government regulations have picked winners and losers by crafting regulations that are favorable towards these big woke corporations but are unfavorable towards smaller competitors that could threaten their quote, unquote, “monopoly”? How has government regulation been selective rather than equally applied, and how has that caused part of this problem? Or, if it hasn’t, how has it not caused this? How is that not part of the problem?

 

John Allison:  It’s a huge problem. The way they do it is by making them regulate -- it’s not like they want to drive out small businesses, although sometimes they do want to drive out small business because it’s harder. They wanted to reduce the number of community banks in the United States. It’s conscious strategy because they’re harder to regulate, that many banks. It was intentional.

 

      But anyway, in general, that’s not necessarily their go. But they create such complex regulations that the regulatory cost kills the small business. And I can tell you that from when I was at BB&T. Fortunately, when we started, our regulatory cost was manageable. But as we got bigger, our regulatory cost exploded. And the community banks, the smaller banks, were facing that same kind of thing. And I saw it over and over with businesses.

 

      In a small business, since they can put you -- they can close you down. They technically, in many cases, can put you in jail. If you’re running a small business and your regulatory costs go up, and you’re the only person in the business that can handle that regulation, they’ll drive you out of business. And I’ve seen that thousands of times in small businesses in the banking business.

 

      And it wasn’t necessarily what the regulators go, it was just the effect of highly complex regulations. I mean, you should read some of these regulations. I’m sure you have. But think about them from a business owner’s side. He’s not an expert on the law. He doesn’t have a whole bunch of -- can’t afford to have attorneys working for him and has to do that while he’s running his business. It’s a killer. That helps the Googles, by the way.

 

Hon. Douglas H. Ginsburg:  Ashley, do you want to comment on that?

 

Ashley Keller:  Very briefly, I agree that I don’t think government regulation is targeting pro-woke versus anti-woke corporations. I think government regulation, as John just said, tends to favor, whether intentionally or unintentionally, big corporations with a lot of resources.

 

      But that is actually very problematic with respect to the woke issues that I was talking about because just think about the small businesses who are actually struggling to compete with each other in your local neighborhoods or whatever. Does your local neighborhood restaurant do this wokeism stuff where they say, “White customers get seated second, even if they come in first”? Do you see your local gas station that’s a sole proprietorship engaging in this nonsense?

 

      No. They actually have to compete in the free market. Their margins are razer thin. They’re like true competition. They’re the things that we should be supporting. But the government regulatory environment, again as John has articulated, tends to favor incumbents and big, massive corporations.

 

Paul Kamenar:  Well, thank you. Judge, is this on? Yeah. Paul Kamenar, a local attorney that filed comments with the SEC opposing their Nasdaq Board Diversity Rule, which is pending in the Fifth Circuit. Lot of what we’re talking about is laid out very well in Vivek Ramaswamy’s book Woke, Inc, who spoke yesterday. And I highly recommend everybody get that book.

 

      And there’s another one that came out a couple weeks ago by Professor John McWhorter of Columbia who wrote a book on woke antiracism. And just want to make one little reference here in the book, where he says, “A friend of mine on Facebook said that they agree with Black Lives Matter only to be roasted by an anonymous person who said, ‘Wait a minute. You agree with them? That implies you get to disagree with them. That’s like saying you agree with the laws of gravity. You as a white person don’t get to agree or disagree when black people assert something. Saying you agree with them is every bit as arrogant as disputing them. This isn’t an intellectual exercise. It is their lives on the line.’” I’m omitting all the all caps and the exclamation points in this.

 

      My question to Mr. Allison is in terms of the remedy you spoke about, maybe the antitrust laws. Could you comment on the current lawsuits challenging Twitter and Facebook being a state actor because of the exemption they get in Section 230? By the way, a couple weeks ago, all those cases were transferred to California based on the form selection clause of the Twitter account.

 

Hon. Douglas H. Ginsburg:  End of question, go.

 

Ashley Keller:  Sure. So I’m not steeped in the facts of that complaint or the allegations contained in that complaint. I am skeptical of the idea that just because there’s a government statute or regulation that means that there’s a concerted action between the government and the private business.

 

      But I’m still, as you alluded to, in favor of using the antitrust laws where appropriate to break up monopolies or to force monopolies to stop engaging in the sort of behavior that we were talking about. And the quote that you just read is exactly the sort of ridiculous, disgusting nonsense that makes me throw up in my mouth.

 

Roger Severino:  Thank you. This is Roger Severino from the Ethics and Public Policy Center. As a former civil rights regulator, I agree with Judge Ginsburg that it’s not just regulation by raised eyebrow. What I found was regulation by phone call. We would get complaints on all sorts of civil rights statutes. I was at HHS. And our staff, great career folks, would just pick up the phone and say, “Hey, fix this,” whether or not the law was actually on their side.

 

      And I want to say that you’re both right. It is woke CEOs. It is also regulators. I don’t think every CEO is, by nature, woke. But I do think that you have the HR departments are listening to those phone calls, listening to the guidance documents that are coming out of -- and they came out of -- we put a tamp on it during the Trump administration. But it’s hard to erase all of it.

 

      And those HR departments are then putting the CEOs that want to do the right thing in this bind, and you have very mostly conservative general counsels in these corporations saying, “Hey, we don’t want to bring the ire of the regulators.” So it’s almost a symbiotic thing, where the ones that want to do it use the regulators as an excuse, and those that don’t, they feel pressured on the inside. What are your thoughts on that dynamic?

 

John Allison:  I think that’s true. I think they’re true. I think, a lot of times, maybe the CEO really is opposed to it, but his legal staff says, “Hey, we’re going to get sued.” His HR people say, “Oh, we’re going to have terrible internal problems.” And a lot of them really do stuff they don’t really agree with because they’re afraid of the internal implications.

 

      I do want to tell you one story about regulators, though, that I think you’ll find interesting. It’s an interesting story. When the financial crisis happened, I was adamantly opposed to government bailouts. I didn't think they were necessary. I thought it would just -- some of the banks like Citigroup ought to fail, and the world be a better place to live. I really did. And I did the worst crisis by far in 1980 and 1990. Then, of course, Congress approved the TARP program. I was opposed to the TARP program before it got approved. I went to Congress—I almost never do this—and tried to get people to vote against it. It failed the first vote, passed the second vote.

 

      The day after TARP failed—now, this is an act that I tried to work against—I got a call from our regulator. And he was almost embarrassed, and that’s tough for regulators. But he said, “John, we know that you have far more capital than is required under current regulations and you haven’t had a single quarter loss during the financial crisis. However, we’ve got a team together that’s coming and audit your bank tomorrow, and we’re confident that they’re going to find some serious problems that you don’t know about.”

 

      Okay, we got the message. So I said, “Oh.” I said, “How do we avoid that?” He said, “Well, you just to have to agree to participate in TARP, this bailout,” because Bernanke, who was head of the Federal Reserve, wanted to force the healthy banks to participate to make it harder for people to know who the bad banks were. So he forced the healthy banks to participate.

 

      And interesting enough, it cost us a fortune. We didn't need the money. We had money coming out of our kazoo-boo. And it cost us $100 million unnecessarily. And then, as soon as we heard about an opportunity to get out, we tried to get out. And it took us months to get out because they were making a ton of money on the healthy banks, and they were using that to cover their losses on the unhealthy banks. Unbelievable. Unbelievable. In that case, it wasn’t exactly the regulator, but it was if you go all the way to Bernanke. That was something Bernanke caused to happen.

 

Hon. Douglas H. Ginsburg:  Recover from that, and take another question.

 

Mike Daugherty:  I’m Mike Daugherty with LabMD. I’d like to have your commentary about the game of dodging the judiciary in the regulatory state. My experience has been big corporations -- I had a commissioner at the FTC recuse herself. Now, she’s buried in Microsoft when she was saving the world before in Vermont.

 

      And then, all the rules the administration state, if you’re a small business, like I was, without the pro bono defense I had gotten for a decade, I would have never gotten to an Article III judge. And I felt that was intentional hands around my ankles, like don’t you dare get to the judiciary. Do you think the judiciary understands for every person they see, there’s 20 other companies that couldn't even get through it? And do you think the judiciary understands how rare and how intentionally avoided they are?

 

Hon. Douglas H. Ginsburg:  Well, I can’t speak for much of the judiciary, just myself. But I am aware that, not only is it difficult to get to us, you have to really persist. You have to win before the administrative law judge, get reversed by the FTC, go to the circuit, and that takes -- that’s a losing money proposition. You have to do it on principle. And a few companies do it, very few, because obviously -- I’ve had a lawyer say to me, “Because of Chevron, I cannot in good faith advise a client to take an appeal.” That’s pretty scary, I think. So, yes.

 

Joe Cosby:  Thank you. Joe Cosby. I practice in D.C. And for both Mr. Allison and Mr. Keller, isn’t even this topic a little bit avoiding maybe the big elephant in the room, which is culture? The CEOs, regardless of how much of a spine they have, are definitely going to be afraid of the wave through the millennials and their employees. And quite a few of them are afraid of what Twitter is going to say about them with the Twitterati. As Bari Weiss suggested, the editor of The New York Times is now Twitter.

 

      And with respect to the argument that the government has the guns, sounds like the argument that Stalin made about the pope. And I think the pope won that battle and that the culture, in fact, may be the lead thing in both cases about both leading the government and the business environment. So isn’t it the culture that’s really at issue, and what would you do about those things?

 

Hon. Douglas H. Ginsburg:  That’s a very interesting question. John?

 

John Allison:  I don’t think it’s typically the culture because I don’t think the business could have survived if it had the kind of cultural defect that I think you’re describing. I do think some CEOs have a lot less courage than others, and that’s definitely true. I would be surprised many of them really want woke, but I think some of them just don’t have the courage to do it. I know having had, as I just told you a few minutes ago, we faced down the regulators several times. It ain’t much fun. It gets scary, and you can make it -- it’s an interesting question. It’s a question the attorneys kept throwing back at us. Are we really acting in the shareholder’s best interest to fight the regulators?

 

      And that’s a tough call objectively in business. I mean, you got this, I call it a moral commitment to the shareholders. And a lot of the stuff that these fights, are you fighting for your shareholders? Maybe you can argue that in 20 years, but that’s a long time to figure out where this stuff is going. Are you fighting for you because you really just oppose, you think what they’re doing is morally wrong? I’ll be honest, in our case, we thought we were fighting for our shareholders, but we also were doing it because we thought we had the moral high ground.

 

Ashley Keller:  Yeah. I mean, I think culture is a problem. But we can only debate one problem at a time. But, yeah, if you look at what kids are being taught in schools, I relocated my family because I was deeply uncomfortable with what my children were being taught in their private school that still had the unions that you and I don’t like.

 

      And if you have an entire generation of people that are raised to think that America is a structurally evil place and that the Bill of Rights is racist and all the other claptrap we’ve been talking about, eventually that’s going to take effect. But as Bari Weiss also said, the solution to this problem is courage. And by the way, it doesn’t take that much courage to stand up to the millennials. They are paper tigers. For goodness’ sake, if you’re the CEO of a Fortune 500 company and you can’t stand up to them, find another job.

 

Hon. Douglas H. Ginsburg:  We have five minutes left. Please make your questions very brief. And no comments, just questions.

 

Benjamin Pugh:  Good afternoon. Benjamin Pugh from Huntington Beach California. The question I had was an issue I don’t think I’ve heard talked about yet, which is the unprecedented power of big tech and the big woke corporations to control the government by controlling what information is disseminated during elections. And it’s not just censoring a Hunter Biden laptop story or inventing a Russia collusion hoax. But ten years ago, the way you won a Congressional election was with mailers, walking door-to-door, flyers, sometimes you’re on the news. Now, you buy ads on Facebook that are targeted. Now, you buy YouTube ads.

 

Hon. Douglas H. Ginsburg:  We have the question.

 

Benjamin Pugh:  That’s pretty much the primary avenue to control the elected officials.

 

Hon. Douglas H. Ginsburg:  We got your point.

 

Benjamin Pugh:  And those corporations have their finger on that ability to censor.

 

Hon. Douglas H. Ginsburg:  Let the gentlemen answer.

 

Ashley Keller:  I think that that’s a very important point, and I tried to touch on it. But like I said, a free and robust marketplace of ideas is the lifeblood of republican society. And if you have monopolists who are controlling which ideas get out into the marketplace, that is a huge problem.

 

      I am not worried about targeted ads because I trust adults to be able to discern what’s true and what’s false. But I am concerned that only one side’s viewpoint can’t get out into the marketplace. That impacts how people vote. And by the way, something we didn't touch on, it impacts whether people accept the results of an election, which we often hear people complain about, rightly, that in a democracy, the losers are the most important party. Well, the losers are not going to accept the result, just like in banana republics, if they don’t think they had a fair shake to persuade their fellow citizens.

 

John Allison:  I want to say a quick addendum to that, something we looked at Cato. I don’t think that’s actually true. If you look at the last election, almost all the press was pro-Biden. And yet, Trump, who had very colorful characteristics, almost won. And if you look at the people that voted at Trump, they voted at Trump, not because of the newspapers, because they saw what Trump did. So all the positive press for Biden and the negative press for Trump was not the deciding factor in that election, not if you ask people in survey what you were doing.

 

Ashley Keller:  Almost won also means just barely lost. And just barely lost, why? Maybe because the information wasn’t even-handed.

 

John Allison:  I think he lost because of what he had done as president.

 

Joshua Kleinfeld:  So my name’s Joshua Kleinfeld. I’m a professor at Northwestern Law School. And I just want to observe and think about the generational divide in the conservative movement that we’re seeing almost symbolized on stage. As I watch the two of you, I’m of the same generation as Ashley. John, well, it’s interesting. Watching the two of you talk is like me and my dad having a conversation over the dinner table.

 

John Allison:  I’m glad you didn't say granddad.

 

Joshua Kleinfeld:  My dad is a Reagan appointee to the District Court and a George H. W. Bush appointee to the Circuit Court. And he came up in the Reagan version of the conservative movement, where the problem was inefficient and hapless government. It was the source of oppression, and it was the source of inefficiency, and the free market was the solution. And then there’s this younger generation who have the same goals. We have the same goals as you, which is a liberty-loving America, but we’re observing that there’s some new kind of market failure. There’s some new kind of problem that makes that old Reaganite conception of how oppression works mistaken.

 

      So I know my time is limited. I want to try -- I’m not just an observer of this generational divide. I am on one side of it decisively. Ashley is right in his contentions here. The reason why, the thing that we are seeing that some of the older generation is not seeing is that there has been a shift from oppression through governmental power to oppression through ideological power. The shift is coming from an ideologically unified ruling class coming through elite schools and then populating our elite institutions. And those elite institutions are diverse. It could be Goldman Sachs. It could be your Jenner & Block. It could be your local school board. But there is a unified ideology --

 

Hon. Douglas H. Ginsburg:  -- Professor, you have succeeded in running out the clock so that there is no time for an answer.

 

Joshua Kleinfeld:  -- that is a real issue of the fight here.

 

Hon. Douglas H. Ginsburg:  You’ve used the time. There is no time for an answer. I think we understand what you’ve said. It’s not really a question, but we heard you.

 

      Please join me in thanking the combatants.

 

Ashley Keller:  Thanks. Great job.

 

Hon. Douglas H. Ginsburg:  Terrific.

 

Ashley Keller:  That was a lot of fun.

 

John Allison:  I enjoyed it.

 

     

 

2:45 p.m. - 4:30 p.m.
Showcase Panel IV: Law, Science, and Public Policy

2021 National Lawyers Convention

Topics: Politics
East & State Rooms
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". The final showcase panel explored "Law, Science, and Public Policy."

"Science" as a concept enjoys the trust of the public. Indeed, some make "I trust the Science" a centerpiece for their appeal to the voting public, and this evidently has had some success. 

By contrast, others in the scientific community stress that scientific methods explicitly exclude "trust". The noted physicist Richard Feynman remarked that "science begins with the distrust of experts". Instead, process in science relies on an "ethic" of impersonal objectivity, respect for data, self-questioning, a willingness to stand corrected, and open discourse. Its methods involve constructing models for reality that best fit objective assessments of available data, followed by a search for data that might contradict those models. Scientists are therefore (supposed to be) anti-advocates, willing to concede when their models were wrong; the most successful scientists even enjoy conceding, as it means that knowledge has advanced.

However, scientists, being human, are inherently imperfect practitioners of scientific methods. Historians document many examples where scientists have advocated their own (wrong) ideas over others simply because they were their own, obstructed opposing points of view, and otherwise behaved as 'politically' as in any other field of human endeavor. However, the process and its "ethic" has historically allowed models for reality to improve, and those improvements are known by the technology that has emerged based on them. As one example without science, improvements in civilized transport advanced haltingly over millennia. With science, citizens may now buy tickets to suborbital space flight.

Consequently, public policy decision-makers often rely on science (or at least they say they do) when making laws and regulations in many areas, including economics, criminal law, environmental regulations technology and bioethics. 

However, the law is in many ways anti-science. Scientists, practicing their methods, commit to seeking out and weighting more heavily data that oppose their theory; they are (supposed to be) anti-advocates. In contrast, clients hire lawyers expressly to be their advocates.

This creates a natural tension when scientists are called upon to advise public policy. Many who call themselves "scientists" are willing to participate as advocates in public policy. This has been shown clearly in fields like anthropogenic climate change, economic stimulus packages and, most recently, in the management of the COVID-19 pandemic. 

How should we as lawyers assure that science is used properly in the public space, to make policy conform to reality, and not for political goals?

The panel will address two areas with this as background:  

  • The FDA, CDC, and public health regulation. The COVID pandemic uncovered many problems in the way medical science is used to manage public health crises. with public policy.
  • Should scientific presentations be paternalistic?  Is it ever justified to withhold, distort, or misrepresent science for fear that the truth will do damage by being misunderstood or misused?  

Featuring:

  • Dr. Steven Benner, Distinguished Fellow, The Westheimer Institute at the Foundation for Applied State Room Molecular Evolution
  • Prof. I. Glenn Cohen, James A. Attwood and Leslie Williams Professor of Law, Deputy Dean, and Faculty Director, Petrie-Flom Center for Health Law Policy, Biotechnology & Bioethics, Harvard Law School
  • Ms. Christina Sandefur, Executive Vice President, Goldwater Institute
  • Moderator: Hon. Kenneth Lee, U.S. Court of Appeals, Ninth Circuit

Speakers

Event Transcript

One of our panelists asked that the transcript of his remarks not be published, so this transcript has been edited accordingly.

 ***

Hon. Kenneth Lee:  Good afternoon. My name is Kenneth Lee. I'm a judge in the U.S. Court of Appeals for the Ninth Circuit. And I'm honored to moderate this final Showcase Panel: "The Law, Science and Public Policy." Before we begin, I want to thank Dean, Julie, Evelyn and all the others who've helped arrange this conference. I know it takes a lot of time and effort to make this happen, and we appreciate it.

I also want to thank all the people here, the audience here today. Because this is the last session, on the last day of the conference, I know you guys are probably tired. And, judging from the activity at the hotel bar, some of you may be nursing a hangover as well. But you made it. So thank you for being here.

I think today's topic is a very timely one. I think, over the past couple of years, we've heard the buzzword, or buzz phrase, "follow the science." We've seen bumper stickers or internet memes saying, "I trust science." And some scientists today are like celebrities. They're famous. People respect them. And you see them all over the TV and magazines.

And, for those of you who read that intellectual journal, Us Weekly, you may be familiar with the section called, "Celebrities ⸺ they're just like us." And they show a photo of, like, Tom Cruise walking his dog, or Sean Penn buying a cup of coffee before he punches someone in the face for taking a picture of them.

And, I think, scientists ⸺ like celebrities ⸺ are just like us, in some ways. We respect them, but they're not infallible. They may have their own biases, and they may be subject to pressure. That being said, I think everyone agrees that science needs to play an important role in crafting public policy.

Today's session, we will discuss how can we ensure that science plays an appropriate and proper role in crafting public policy. And we have an eclectic and all-star panel to discuss this issue.

First, to my right, is Professor Steven Benner. He is a serial entrepreneur in biotechnology. He served as a professor of chemistry at Harvard. I think his tie might be of the periodic chart, I believe, if you can't see that. He's been, also, at the Swiss Institute of Technology, and the University of Florida. Today, he directs a biotech company, managing the current pandemic. And he also presides over a non-profit called Foundation for Applied Molecular Evolution.

As a government major in college, I have no idea what that means. I suspect most of you also have no idea what that means. And, if you did understand what that means, you're probably at the wrong hotel. I think the Federation of American Scientists are meeting at the Hyatt across the street. But we're happy to have Professor Benner here today.

Finally, we have Christina Sandefur. She is the Executive Vice President at the Goldwater Institute. She is the co-drafter of the Right to Try initiative ⸺ which is now federal law ⸺ which protects terminally ill patients their right to try safe investigational treatments that have been prescribed by their physicians, but are not yet FDA approved. Her most recent book is called, Cornerstone of Liberty: Private Property Rights in 21st Century America.

Finally, we were supposed to have Professor Hank Greely, of Stanford. Unfortunately, I think he had a knee injury and could not be here. We hope that he recovers quickly, because I think the Miami Dolphins may need him as their quarterback next week.

The format for this is each panelist will provide an opening statement for six or seven minutes. And, after that, I think they'll respond to each other's points. And then we will open it to the floor. We want this to be very interactive. And I think this will be very informative and fun. And I think Professor Benner will start.

Dr. Steven Benner:  So, is the microphone on? Yes, I guess it is. Well, as Judge Lee pointed out, I am a high priest of the new religion called science. And, now that you know this, you are all obligated to trust me. Otherwise, you will be deplatformed, shunned, and, perhaps, even unemployed.

This topic, today, I'm looking at as an experiment. Because, I was curious to see how the legal profession ⸺ which, I gather, is represented in the room here --this is a group I don't usually talk with how the legal profession would respond to an admission by a scientist, a frank admission by a scientist like myself, that, in many areas, from climate to Covid, the scientists do not publicly offer our best, good-faith assessments of reality when it comes to policy. And more on that in a minute.

As many of you know, ever since about the Second World War, there has been a covenant between the body politic and scientists, where the politic supports us with very little control ⸺ except, perhaps, by peer review done by the scientists themselves ⸺ but, in return, expect to have basic research breakthroughs that eventually lead to useful things, like the atomic bomb, or, for that matter, environmental-sound policies, or medicines.

And, of course, that covenant has been wildly successful. But, in public policy, the covenant really relies on the willingness of scientists, when asked, to give what we think to be our best good-faith representations of reality, perhaps with caveats. And that part of the covenant has, over the decades, been largely destroyed.

So, climate science, of course, offers the best example, the best documented case. But Covid really exemplifies how the corruption of science costs lives. And I'm going to have a few words to say about this, but let me give you a couple of examples.

There are propositions that people who have reason to know, have an opinion on, have the opinion that these propositions are true. But they cannot say them in public, for fear of being deplatformed, shunned, or unemployed.

So, for example, in climate science, this is not the warmest year on record. Not even close. That's generally accepted to be true. But it's something that we can't say in public. The rise in global temperature that so concerns Al Gore or Greta Thunberg actually started in 1750, and was two-thirds over before carbon dioxide from human sources became a factor at all. Again, everybody who has a reason to have an opinion on this subject knows that that's likely to be true. But we can't say it.

The Paris Accords, by the way -- there is absolutely no reason to believe that they will have any impact at all on sea level or any of the other things. Those are all true statements.

And, now, anyone who has reason to have an opinion, accepts these propositions. And yet, if they say them in public, they risk deplatforming, shunning, and unemployment. And so, politicians, even politicians on the Right -- this is not a Left-Right thing. Boris Johnson, a Conservative from the United Kingdom; Erin O'Toole, the Conservative from Canada -- all adopt policies on climate that have absolutely no basis in science at all. And that's because of the way in which information has been transferred.

But Covid is really the case. And it's a timely case, where the goring of science has caused deaths. Everyone in the position to have an opinion at all, knows that, first, Covid-19 was likely the product of human engineering. Second, that it was likely circulating in the United States before the first cases were identified in the United States, and that the CDC and the Food and Drug Administration forced public health surveillance to be blind in the first three months of this pandemic.

So let me amplify on that last point. In my lab, we were aware of Covid. We had Covid assays running in February first. We knew about Covid, because we had participated in the SARS scare in 2003, 2004. But the Center for Disease Control require that all Covid tests be done in Atlanta. And I have no idea what their legal authority was for requiring that. But they were scientists, and, therefore, they were trusted and obeyed.

And then, the Center for Disease Control set up CDC-approved centers around the United States, and distributed a CDC-approved test kit. That kit did not work. This is a political advertisement, because it did not employ our chemistry. So our chemistry was available to secure our campus in March. It received regulatory approval in April -- in India, not in the United States. We did not get a regulatory approval in the United States until August.

And, just last week, Rochelle Walensky of the CDC said, and I'm quoting now, "Masks can help reduce your chance of Covid infections by more than 80 percent." That's a statement with absolutely no scientific basis, whatsoever. I don't even know what that statement means. But it has been -- even today, you can go outside. The Mayflower will tell you they're enforcing CDC recommendations. If they were in any other field, not scientists, you would not regard them as scientists or authoritative. You might regard them as having been failed Bozos, probably, outside of the field.

But, such is the trust that you folks give to scientists. And so I'm interested to see what you folks have to say about that.

Ms. Christina Sandefur:  All right. Well, I usually say that I am the token Libertarian on the panel and happy to play cleanup duty on that. But it actually sounds like Professor Cohen and I don't disagree on all that much. So that's always fun.

But I do want to focus on a slightly different version of this topic. I want to talk about why we must choose ⸺ at least in the context of law and government ⸺ individual autonomy over science-based paternalism, for lack of better term. And I will focus, mostly, on medical autonomy, and the medical side of things, at least in my initial remarks.

So, first, medical autonomy is not only, in my opinion, a cornerstone of medical ethics. It is one of the most basic ideas of freedom, guaranteed by our Constitution. And if you think about it, if you own yourself ⸺ which is what our governing system says, at least in theory, in the United States ⸺ if one owns oneself, then they have to have the freedom to make these personal intimate decisions, or otherwise you do not have the freedom to exercise any of your other rights.

And there actually is a long line of cases that supports, to some degree, medical autonomy. So, we've got cases from the Supreme Court that recognize one's right to refuse life-saving treatment. We have cases recognizing one's right to refuse unwanted bodily intrusions, one's right to care for one's own health in person, and seek out the doctor of their choice. And on and on.

Now, of course, a lot of these cases are limited to their facts, and don't go very far beyond that. But some of the lower courts have even gotten into some really interesting issues. For example, the right to choose whether or not to cut your own hair. So, we have a long line of tradition in the court, supporting the right to medical autonomy, to some degree.

But, unfortunately, we also have a growing tradition, both in what is accepted in governing, and also in what the courts have then accepted from government. And that is a system that prioritizes the preferences of public policy decision-makers ⸺ or even scientists, vis-à-vis public policy decision makers ⸺ at the expense of every person's right, really, to shape their own destiny. And that [audio cut out 00:38:21 - 00:39:45].

Moreover, questions about how we choose to live our lives -- those, to a degree really aren't scientific or medical questions at all. And that's where I think there's a lot of confusion when we have discussions like this and we talk about following the science.

Science answers questions about reality. But it doesn't answer questions about how people should deal with this reality. And scientific experts may be experts in their field, but they aren't experts on people's individual values or risk-tolerances -- so, for example, in the case of medicine, whether a drug is acceptably risky for a particular person to take. That isn't a judgment. That's not a medical judgment. Instead, that's a normative judgment that's going to vary from person-to-person, depending on their circumstances, their risk-tolerance, the benefits that they expect to derive from taking that treatment.

And that's why government officials can't just follow the science, so to speak. There's many qualifications for that very reason. Because they can't effectively determine what risks or benefits are applied to a particular population as a whole.

So what we get is decisions that, in my opinion, end up being very disjointed, very arbitrary. So we have a system of medicine ⸺ and this is just broadly speaking ⸺ that, on one hand, allows folks to take dangerous medicines, medicines that I don't think anyone would argue are not dangerous, so something like chemotherapy, which is essentially poison -- even acetaminophen, Tylenol, right? That kills hundreds of people a year. So we have a system that allows people to take those risks.

We have a system that allows people to end their lives, at least in some states, with a doctor's help. And we even allow people to be paid -- healthy people, to be paid to volunteer to test medicines whose risks we have no idea. That could be very dangerous, and even fatal to them. But, yet, in many cases we also -- that same system also forbids people from taking treatments that could alleviate suffering or even help save their lives. And so it's very arbitrary, very disjointed.

And nobody has perfect information. And that's another thing, I think, to remember, when we talk about following the science. Because you can have multiple people claiming that they're following the science, and coming to very different conclusions. And, if you backtrack, it may not be the logic that's the problem. It may be that the premises actually differ. Where there are unknowns, again, the principles of medical autonomy dictate that we have to defer to the risk-tolerance of the individual. No system is going to ensure against all risks, including our current system. Many, many treatments that are approved for safety and efficacy by the FDA are later pulled, are later re-tested. Just because something gets the stamp of approval from our federal government does not mean it's going to be right for every individual. It does not mean that it comes without risks. It's impossible to ensure against all risks.

So, again, the question comes down to, who decides whether the level of risk is going to be acceptable to a patient? Is it the government, or is it the patient herself?

I think the question of information, and allowing for the free flow of scientific information, is a separate, but also, important one. The Caronia decision came up. I think that I have a different take on how the FDA has interpreted the outcome of the Caronia decision. But I think this is a very, very important area to pay attention to, because censoring or withholding scientific information doesn't just hurt patients or consumers. It also violates constitutional rights to free speech.

And in the context of medicine, this is particularly important. Because we not only have a government that is actually blocking patients from making certain decisions about treatments, but also taking away the tools, in my opinion, that patients and doctors need, to be able to make those well-informed decisions. And that's what is so frightening, especially in an era where we have access to more information than ever before -- some, of course, very helpful, some, of course, very unhelpful. And we have people who can pick and choose what information gets to patients and doctors.

So, in the context of off-label treatment, and the discussion of that, that's what the Caronia decision dealt with. And there is this anomaly in law ⸺ again, if you look at things from a free-speech perspective ⸺ that says that off-label treatments are treatments that are for purposes, or patients, or dosages, different than the federal government has approved. Those treatments are legal. Prescribing them is legal. It's actually very common. But yet, under certain circumstances, federal law prohibits manufacturing companies from talking about those off-label treatments or promoting them.

And I consider this to be a gag rule. Again, I think it's very harmful to patients and doctors and insurance companies and the like. And there is this line of cases where the courts are consistently saying that you can't prosecute speech. If the conduct is lawful, then the truthful speech about the conduct also must be lawful. Because, otherwise, you're flipping the First Amendment on its head. You don't typically see, in the law, a situation where we see that conduct is lawful, but speech about that conduct is unlawful.

And, in my opinion, the FDA has continued to ignore such rulings, or distinguish them in ways that only lawyers could love. Right? When the Caronia decision came out, the FDA said, "Okay, well, we're not really prosecuting speech. What we're doing is we're using speech as evidence of the crime of misbranding." What is branding, if not speech? That is really a distinction only a lawyer could love.

But we can laugh about these things. But the real-world reality is that we now have scientists, or pharmaceutical companies, or others, who are terrified to bring up or to discuss information that could actually help people for fear of criminal prosecution. And the fear is real. I've written about a company called Vascular Solutions that had truthful communications about the lawful use of varicose vein treatments. And it took -- they were prosecuted for making that truthful speech. It took five years and $25 million dollars of the company's money and time to be able to eventually clear themselves of any wrongdoing. And, at the end of the day, what came out of that? What innovations were suppressed, because of the time and money that was spent on that litigation, when nobody actually did anything wrong? That is not listening to science. That is suppressing science.

So, there's a lot, obviously, that we've all spoken about. I really look forward to the Q&A, and further discussion. I guess I would just say that my takeaway from this very raw topic is that there's too much focus on whether or not government is following the science. And I think that that results in -- rather than insuring a free flow of scientific information, so that people can make their own decision ⸺ which is what our Constitution empowers us to do ⸺ we are moving toward government as the decision-maker, so long as they can justify their actions, in terms of following the science. And I would posit that -- rather than asking, "What is the correct science?" or whether government's following the science, we should be focusing on narrowing the scope of government action, itself, properly constraining it and deferring to the individual, when there are close cases.

So thank you. I look forward to this discussion.

Hon. Kenneth Lee:  Thank you for the very interesting, provocative, views of all the panel members. I don't know if anyone wants to directly respond to any of the other panelists' thoughts, if anyone's itching to do that.

Ms. Christina Sandefur:  Yeah. I mean, I think we agree on the fact that there's an asymmetry there. I think, just agreeing on whether that should be, then, that the FDA should regulate more or regulate less, is probably where the question lies. And I think it's important to think about why the FDA doesn't regulate or require the same kind of proof every time a prescription is prescribed off-label, or a medicine is prescribed off-label. And, just imagine -- I mean, we've all heard the statistics that it can take ten, fifteen years, billions of dollars, to bring a drug to market. Some of that is R&D that the company needs to do. A lot of that is getting through the regulatory, the clinical trial process that the FDA has imposed.

Now, imagine you do that for one set of the population. You do that for adults, or you do that for adults with a certain disease, or you do that for one type of cancer. And now you get that drug to market. Now you've got to turn around. We know that a lot of cancers are different, but they respond very similarly to the same treatment. Doctors are experts in their fields. Pharmaceutical companies know from continued testing these things. Now, imagine you had to take that drug all the way back through that process. Another, potentially, five, ten, years; five hundred thousand, million dollars. It would make these drugs inaccessible and cost-prohibitive for patients when there's no need to do that.

And at the end of that process, you've got to keep in mind, I'm not saying that the clinical trial process isn't helpful or important. But, in some ways it's kind of an arbitrary phase to meet. And at the end of that process, there's, again, no guarantee that that treatment is going to work for that particular individual with that particular kind of cancer. All of this is a little bit more of an art than a science, in some ways. And so, again, I think, at the end of the day, we have to think about what does this mean for the individual who is trying to alleviate suffering, or, god forbid, trying to save his or her own life.

Dr. Steven Benner:  I find this conversation cute, adorable. I mean, Western civilization post-enlightenment has been based on the notion that we can develop a knowledge of the world around us doing a process that, among other things, involves self-doubt, a little bit of humility, and doesn't accede to authority.

Now, I've just told you guys, I mean, obviously, there are many historical examples. Lysenko comes to mind. Of course, Darwinian evolution did a real number on political theory, leading to Margaret Sanger's eugenics, all the way to national socialism, antisemitism. I've just told you, as an expert in two areas that are core public policy, that the science is corrupted, and that you are descending into dark ages, because you don't let scientists tell you about Covid or Coronavirus. And you folks are adorably discussing what you are, as you're academics.

I've read -- Glenn has a very famous brief called the Lander Brief, which is involved in the Myriad case. I mean, I've read this. I went back and read, Christina, your amicus for the hallucinogenic drug case. It's all fine. But the underpinnings of science, in fact, the underpinnings of nanny state, is that the nanny is going to be Mary Poppins, not Nanny McPhee. And the argument for libertarianism is not -- I mean, it certainly is philosophical, as you phrase it. But the ultimate argument is that the people who you give nanny power to, are not capable of exercising it correctly.

And so, I would not like to get into policy discussions today, but just give you my best good-faith assessment of reality as a scientist. And that is that fewer people would have died of Covid in the United States had there been no FDA or CDC. And the reason -- and it's a counterfactual. It's hard to prove. But the reason for that is because what would have happened without an FDA or CDC is that every veterinary school, every academic in molecular biology, would have had tests up and running when we did in the end of January. And we would have known what was going on in the public health sector much better than with the FDA standing in the way of that, and the CDC screwing things up. Because these people are not competent to be our nannies.

[Applause]

Dr. Steven Benner:  -- I don't usually play to the crowd.

My best-faith, good-faith assessment of the reality is that fewer people would have died in America had there not been an FDA or a CDC. That's just a statement of -- as a proposition, I'm asserting the truth value of it. Now, vaccines are a fascinating case. In 2008, the technology was invented, which goes into the Moderna and Pfizer vaccines. And that's a remarkably rapid turnaround ⸺ twelve years ⸺ to reality. I, myself, misunderstood. I was, indeed, expecting to have, in 18 months to 24 months, at the earliest, for a vaccine to be developed. We had a lot of interactions with Newt Gingrich and various other people in the Trump administration with a diagnostics profile. But, it appears as if the reason why that vaccine was so effectively and so rapidly delivered was because someone in the administration was pushing the FDA to stand down, to not go through all the whistles and bells.

Now, you're asking a different question ⸺ which is a sociological question, which I'm not going to give you any opinion on ⸺ as to what the public response would have been different, had there been the right, less or more, regulatory steps. But, what's clear is, it would have been later, had there been more regulatory steps.

The EUA for diagnostics -- let's start there. Because the EUA came in in diagnostics, in large part, in response to SARS, where finally somebody figured out that there was a risk of not having a diagnostics, which was sufficient in many circumstances. Now, what has happened with EUA is in between 2003 and 2020, is that the EUA has become more and more like a regulatory process, rather than a way of avoiding regulatory process. That's the same thing as Right to Try. Right? There was a law and, basically, the Right to Try law has been eroded by regulatory [inaudible].

Ms. Christina Sandefur:  True. Yeah. And I think another interesting aspect of what you just said is the lack of focus on testing and approving testing rapidly. And I can't speak to how many lives would have been saved had that not happened. But, what I think is, another important aspect of that is the snowball effect of what comes from that in other government regulations. So, because we had a CDC and an FDA that were very slow to approve testing, because we did not have a state level, or local level authority to be able to approve and administer testing ⸺ which is something that my colleagues at the Goldwater Institute have advocated for ⸺ we had -- I mean, it was very difficult for people to get tested. Therefore, it was very difficult to identify who actually had Covid, and who did not.

And so, what is the response, then, from state governments, local governments, even the federal government? Well, it's to take the sledgehammer, rather than the scalpel approach. Right? And that's why we see lockdowns of various degrees. We need to just keep people away from each other. And since we don't know who has it and who doesn't, well, I guess we're just going to have to tell everybody that they have to stay home. And the economic consequences -- because we have to remember, too, this isn't just -- health care doesn't just operate in a vacuum. And healthcare regulations don't operate in a vacuum.

So the economic consequences of this ⸺ the mental health consequences, I mean ⸺ are astronomical. And we will spend decades trying to measure them. Yet, if we had a more permissive, a better system set up, where people could have been tested better, we could have had an approach that might have focused more on quarantining individuals. And I'm not suggesting that is the appropriate policy. But that would have been more of a scalpel approach to allow other people to go about their business and have to certain people kind of kept away from the general public so that they don't get others sick. That is more of the historical type of response. And, frankly, I think that would have allowed people to continue living their lives, and to go about -- it would have had fewer economic consequences.

So, I think it's interesting to think about that aspect, as well.

Dr. Steven Benner:  No, I mean, there's no question that this is true. But look, the FDA, for example, requires that a test that is patient-specific ⸺ where you're screening asymptomatic people ⸺ must be as sensitive as the most sensitive test. That's a holdover from HIV. Because HIV people can be asymptomatic and still spread. And the test, therefore, has to be as sensitive. And, of course, it makes absolutely no sense for a respiratory disease, because a respiratory disease is transferred by people who have a high viral load in their sneeze, not to be -- and, by the way, let me say for all the government majors here -- I can get you all running Covid tests. I can get you running molecular Covid tests in about 30 minutes. It's not difficult to do. Helen Chu is doing it in Seattle. She was told by the FDA to stand down.

We were able to transfer our kids to some people in Colorado. My legal team told me, "Hey. Don't do that unless you want to go to jail, because that's forbidden." What that did was force all tests to be false negatives, because the tests were not run. And then it, of course, led to -- and we have a public space entry test. I have a test that will allow us to sample the Covid burden in this air -- not allowed to be used. Okay?

So the bottom line out of all this is, by the way, not millions. We haven't had millions of deaths in the United States yet. But certainly -- and I don't know the number. Somewhere in the tens of thousands would be my guess. But, certainly, it was quite true that for January, February, March and April, we were blind, as epidemiologists, to what was going on out there, because of the FDA. And I could have had every one of these people in the audience deputized to be running tests in their local community, and doing a very good job of it.

Dr. Steven Benner:  Let's distinguish between diagnostics and things that you inject into your body.  So, let me also give you a scientific opinion ⸺ and everybody would agree with this ⸺ that safety and efficacy, as Christina has mentioned, are very different things. And, as a scientist, I cannot tell you what efficacy is, in a medicine. A vaccine -- I really can't tell you either, although it's easier, because there is a metric for how many people vaccinated get sent to hospitals. But, no, it's an interesting question. The question is, I was ⸺ and myself, I must confess to my error ⸺ in March of 2020, saying that it was going to be two years to get a vaccine. Why? Because Ebola had taken us five years, and not quite the same pressure.

 I understand, however, that my conservatism also has a risk. And that's the risk of the people dying in the time that it takes to go through the regulation. Now, my view is that if I believe that I -- what's wrong with dealing with very intelligent people. Right? I became a professor at Harvard. Pretty good. I was the youngest tenured professor at the Swiss Federal Institute of Technology. "Professor Benner," I said to myself, "ah, you're pretty smart." No. The whole point about science is, of course, that we have to recognize that we're not that smart. And so my view is that I'm not capable of coming up with -- [Applause] I know, I don't usually get applause in my talks. When I talk about the dipole moment of nucleotide bases in DNA, no one seems to applaud.

[Laughter]

But, yes, the point here is that you are in the situation where you're trying to make a decision between an early vaccine, which will kill people because it's not adequately tested, or a late vaccine, where people will die because they don't have the vaccine. And I'm not smart enough to make that. And with Rochelle Walensky telling me that there's an 80 percent chance that masks will prevent me from getting Covid, I don't believe a thing she says anymore. Sorry.

Hon. Kenneth Lee:  How would each panel member grade the United States government's response to Covid, whether it means following the science, or balancing science with other public policy considerations? And, since we have a couple of academics, maybe we could grade it on a curve, and take into account, maybe, what the rest of the world did. I think I know what your grade would be.

Dr. Steven Benner:  Asked and answered. You've got that. Well, look, I mean, hydroxycloroquin -- if you published a paper in the U.S. jurisdiction ⸺ where it was not allowed to be in favor of it ⸺ you are 3.4 times more likely to come up with a negative result than if you published a paper outside of the U.S jurisdiction. This is an analysis of metadata. And it's a statement that scientists changed what they published, in response to political pressure. We wish that Trump had kept his mouth shut, because we would have at least gotten a fair evaluation of that medication -- which I happen to think is not a very good one, but that's just my personal opinion. But lousy -- and Sweden, of course, there are other -- we have wonderfully done lots of experiments around the world. I'm delighted we experiment with people's lives. I mean it's -- as an experimental scientist, that's wonderful. But we have not done particularly well on the curve.

Ms. Christina Sandefur:  So, as the non-academic on the panel, I'm reticent to give letter grades. But, as the practicing lawyer, I will answer with, "It depends." If we're talking about the vaccine development, I tend to agree with you. I think the government deserves high marks, primarily because it mostly got out of the way. I think the testing -- terrible, right? I actually would disagree on the federalism. I think that the states needed more authority to be able to act and respond to what was going on in the various localities. I think they have more authority. I think they needed more authority. And I think, when we look at the way some state governments behaved, though, I would give them quite high marks. Because I think we saw something really remarkable.

One of the sort of silver linings of Covid is this is one the worst health crises that the United States has seen in some time, and yet all of these regulations that exist on the state level that were justified ⸺ as government is supposed to justify regulations, on the basis of health and safety ⸺ were, miraculously, not needed, or were actually even standing in the way of public health and safety. And so we got rid of things like restrictions on telemedicine ⸺ people being able to consult with doctors without actually being there in person ⸺ restrictions on licensure that made it hard for medical professionals to move from state to state. And, as we scaled these things back, I mean, even silly things like restrictions on things like whether or not restaurants can offer carryout alcohol. And we scale all of these things back, and then we realize, gosh, this was actually better for our public health and safety and we probably can just make these reforms permanent.

So, on the state level, I think many states did quite well. I think the feds, it's a mixed bag.

Hon. Kenneth Lee:  On that point, do you believe that, given our experience with the rapid approval of the vaccines, that this will be the future, in terms of government approving? And, also, I will say, if folks here have any questions for the panelists, you can start lining up and we can field some questions as well.

Ms. Christina Sandefur:  Well, I am optimistic that, given the Right to Try movement ⸺ starting with, of course, the AIDS crisis, back in the '80s, Right to Try movement, Covid now ⸺ I'm optimistic that more people are paying closer attention to these types of regulations. I see more patient advocates than ever paying attention and demanding smarter regulations that get access to patients quicker. So I think there's going to be -- I think it's impossible to go back to the way things were. I think there's going to be a demand for a change.

Now, the question is, we're in Washington D.C right now, where good ideas go to die. So how quickly are they going to implement those ideas? I don't know. But I do think that we're going to see a lot more movement on the grassroots level. I mean, that's how Right to Try got where it did as quickly as possible. And, by the way, Right to Try was not the be-all and end-all. It was just the start, I think, of a lot of this. But that's because it really was a grassroots movement that started in the states. You had almost every single state in a short five years passing these laws saying that patients have a right to try these unapproved medications. And Congress can no longer turn a blind eye. And I think we're going to continue to see that kind of advocacy, hopefully driving some change in the future.

Dr. Steven Benner:  Yeah. My comment would be that I think that Covid is a wakeup call as an example that the anti-science or the lack of availability of actual science to public policy makers in the area of climate change is going to be far more expensive and, ultimately, far more damaging than it has been in Covid.

Hon. Kenneth Lee:  Okay.

Questioner 1:  I found interesting the discussion of how we would have done without the FDA and the CDC. I wonder, if we change the hypothetical just a little bit, and say, what if we deliberately privatize the function of the FDA to something like, for example, underwriters' laboratories for electronic devices? Private entities could potentially fill the gap and offer private certifications of medicines, and things of that nature. Would we have been better off through the crisis had we taken steps to privatize those functions before the pandemic?

Dr. Steven Benner:  Yes.

Questioner 1:  Well, I'd love to answer that question really quickly. Yeah. Personally, I think they destroyed public trust in the vaccines by censoring and suppressing science and information, by damaging the integrity of science through the whole process. I think if we had been without the politicization of the science, I would have been much more readily accepting of vaccines, myself. But I don't know how many people would agree with me on that.

Dr. Steven Benner:  Agreed

Ms. Christina Sandefur:  It's hard to measure that, of course. But I tend to agree with that. Because, I mean, gosh, we all have anecdotal evidence of that, of conversations we've had with people who seem unusually reticent to take this vaccine, given, maybe, the likelihood that they would take other vaccines. And I think it really does come down to just a real public distrust in government, which I think, generally, is a healthy thing, but I think could probably be avoided if you have independent reviews of these sorts of things. And we see that by the way.

Look at all of the things that are not regulated by the FDA that fall completely outside of its regulation -- nutritional supplements, and things like that. A lot of these things are totally unproven, untested, frankly, because we have the FDA system. And if they don't have to go through it, well, then, they don't. Whereas, if we had a privatized system, I think people would pay a lot more attention to those sorts of things. And people do pay attention.

There is a lot of nutritional supplements that have a stamp of approval from a third-party private organization that will go in and do independent testing and say, "Hey, the ingredients that this company says are there are actually there." And, personally, I pay a lot of attention to that. And that's true of everything that we do, from the types of restaurants that we go to, to when you go to book a hotel. People look at reviews. They look at independent assessments. So I think there's no reason for us to think that healthcare is, or should be, any different.

Dr. Steven Benner:  Well, let me -- I don't want your point to get lost. Nothing corrupts the public perception of science, than the impression that a committee, nay, a government committee, is standing between you and the primary scientist. NASA -- there was a discovery of phosphine -- not important, three atoms of hydrogen, one of phosphate -- in the atmosphere of Venus. And someone argued that this was a signature of life on Venus. What did NASA do? They established a committee to make sure that unauthorized non-consensus claims of life-detection would never occur again. That corrupts the public perception of science.

Hon. Kenneth Lee:  Now we'll alternate here, and we'll go to the back row, to the gentleman next to Bob Uecker over there.

Ethan Yang:  Hi, my name's Ethan Yang. I'm a 1L at Scalia Law School, and I'm also with the American Institute for Economic Research. My question is on the use of unsettled or clearly politicized science, when it comes to arguing for the rational basis test when it comes to the state's use of the police power. I think one emblematic example would be [Roman Catholic Diocese of Brooklyn v. Cuomo], where Justice Gorsuch, writing for the majority, basically ruled that then-Governor Cuomo's lockdown policies were very arbitrary and, therefore, unconstitutional. But then, in dissent, Justice Sotomayor said Justice Gorsuch doesn't even begin to consider the consensus of the public health experts. So, I was just wondering, in the case of clearly politicized science ⸺ and, obviously, this will continue when it comes to climate change, what have you ⸺ how should the legal profession really approach science when it comes to justifying things on the grounds of rational basis?

Dr. Steven Benner:  You tell me.

Ms. Christina Sandefur:  Well, I think you've pointed out one of the problems with the rational basis test. And again, when we have myriad problems -- but, when we have a system that tries to determine -- well, first of all, as we know, in rational basis tests, there doesn't have to be any basis, and the way we achieve that doesn't have to be rational -- but rational basis tests, correctly applied by courts. At the end of the day, then you get a battle of experts. And we've discussed how you can come to multiple different conclusions. And that's why, again, I think, in the case of the law, that shouldn't be -- the starting point shouldn't be okay, well, should this be based on expertise, and which expert is right. Again, we've got to look at the principle of autonomy, the principles of freedom, people's individual rights.

And this, by the way, is also a problem with bifurcating rights. Because we've touched on this just a little bit, where you have a situation where something, a mandate, might be legal, because we say that it supports health and safety. But then there's an exemption for somebody based on their religious views. And it seems kind of bizarre, in some ways. If this is necessary for public health and safety, then why do we allow some people to be exempt, simply because they follow the right kind of philosophy or the right kind of religion?

And I think this is the problem with treating different rights differently. We have a higher standard for free speech and religious freedom, which is why people try to couch things in terms of that, versus when it comes to my own right to medical autonomy or economic freedom or property rights. There's a lower standard. And, frankly, they should all be -- all rights should enjoy the same protections as free speech rights and religious rights.

Questioner 3:  My question goes more towards the regulatory agencies than Mr. Yang's on the rational basis test. Because, perhaps there should be a higher test than rational basis when you're actually going to physically invade someone. But my question ⸺ I'd really like Judge Lee's view of it, but I know he's the moderator ⸺ [laughter]

 But, in civil litigation, we worked on Daubert for ages. Like, everyone's got to be a gate -- all the judges have to be a gatekeeper on Daubert. Well, how come when the administrative agencies have one little Kentucky study on vaccines, or something that no scientist thinks is any good ⸺ because of the deference we give to the agencies ⸺ that's okay? The plaintiffs lose. But, if we actually took all of what you're saying about good science and bad science, we'd apply the Daubert test to the administrative agencies, and perhaps we'd get better results. What do you think of that?

Ms. Christina Sandefur:  Yes.

Dr. Steven Benner:  Yes.

Hon. Kenneth Lee:  Do you want to go, back there?

Nick DeBenedetto:  Good afternoon. My name is Nick DeBenedetto from the New Jersey lawyers' chapter. My question is specifically for Mr. Benner. Can you talk about, from your perspective, what needs to happen within the scientific community to reduce the reticence to speak, and to share the conflicting data? One, coming out of law school just recently, might naively think that the hard sciences and your very data-driven approach would make you guys a little bit more immune to this sort of thing, rather than equally susceptible to it.

Dr. Steven Benner:  Well, yeah. I was just, four years ago, on a panel over at the American Council of Trustees and Alumni, where my panelist was Allison Stanger, who had invited Charles Murray to speak at Middlebury, and was rewarded by being sent to the hospital by a concussion from the violent protestors who did not want to study child psychology.

And she turned to us and said, "Yes. We are expecting STEM ⸺ science, technology, engineering, and math ⸺ to lead us out of the wilderness in this area of suppression of political ideas. And, of course, in the area of child developmental psychology, that ship has sailed. In the area of climate, that ship has sailed. You cannot get a grant, tenure, or a promotion if you say, for example, that the global warming that so concerns us began in 1750, and it was two-thirds over before carbon dioxide became a factor. And we know that because Judith Curry at Georgia Tech said that. And she was forced out of her position at Georgia Tech by Kim Cobb and various other people who subscribe to the science as settled, denier. These are two phrases that were introduced by Al Gore that basically destroyed climate science.

So yeah. I think it's a good question. I do think that Covid is a sufficiently flexible field right now that you can still find people in academic areas who do not get concerned about losing tenure, or losing promotions or grants by making accurate statements. But I think that in child psychology, in particular ⸺ climate science, as well ⸺ that ship has sailed.

Ms. Christina Sandefur:  Judge, if I may petition the court, it looks like we have a question way in the back of the room that I think we might have been missing -- that third microphone.

Hon. Kenneth Lee:  Got it.

Jack Etheridge:  Thank you very much. My name's Jack Etheridge, from Ohio. And in August of this year, City Journal published an article called, "Do Masks Work?" by Jeffrey Anderson. And, in the article, he concludes that 14 of the randomized clinical trials that had been done, that tested the effectiveness of masks in preventing the transmission of respiratory viruses -- only three suggested, but did not prove statistically significant evidence and intention-to-treat analysis that masks might be useful. He went on to say that the other 11 suggested that masks are either useless ⸺ whether compared to no mask, or because they appear not to add to good hand hygiene ⸺ or actually counterproductive.

I'm not an anti-mask person. In fact, I love my commemorative Federalist Society mask. But my question is this: given these conclusions ⸺ which seem to be pretty valid scientific conclusions ⸺ why is it that mask use is so much focused upon by governments and regulatory agencies?

Dr. Steven Benner:  Okay. Do you want to take it? We have had a back and forth on this. So do you buckle your seatbelt when you get on an airplane? And, if you do, who do you think you're fooling? Now, there is, of course -- there is an energy, below which, put into the airplane, the seatbelt has no effect. And there is an energy, above which, if you put it in the airplane, the seatbelt has no effect. But, there is, actually, an energy that goes into the airplane -- turbulence, or something, where the seatbelt is useful. And that's why you do it. Because there's basically low cost.

There have been studies -- there's one in Bangladesh. There's one, very well, often cited, in Denmark, which show zero to eighteen percent -- some low effectiveness of masks. My reason why I think a mask is a good idea is because it gives you the impression, just like when you buckle your seatbelt in an airplane, that you're doing something, that you have some degree of control over your fate. And that has psychological value, which is not to be minimized.

Hon. Kenneth Lee:  I think we'll go into the middle row over there.

Questioner 7:  I just wanted to ask, do you note the major change that's occurred here with the CDC and the FDA overriding clinicians? This is brand new territory. And it's of great importance to me, in two areas, not only overriding the clinicians. My daughter had Covid early enough, before they even had testing to know what it was. So the doctor sent her home with what he would normally have sent her home with, which was prednisone and a Z-pack. And this actually saved her life, as she was going MIF. If he had followed the current FDA guidelines, he would have sent her home and said for me to bring her back to the hospital when her lips turned blue.

And, furthermore, with the CDC focusing on useless things like masks ⸺ because Covid is .15 microns to .16 microns ⸺ unless you have an N95 on, your mask is doing nothing. With them focusing on masks and vaccines ⸺ which, I think, the jury, quite frankly, is still out on ⸺ they have ignored things like UV lights and MERV 13 filters. And I spoke with somebody from the Army who said to me, "Oh yes. Upper UV lights work fabulously, but we gave them up once the vaccine came into play. So, should this vaccine fail, we don't have UV lights where they deserve to be.

And we have clinicians who are afraid to prescribe things such as Ivermectin -- a $6 pill that they use quite effectively in India. But yet, they were looking to grant approval to Pfizer -- a $700 protease, very cleverly designed around the Ivermectin generic drug. But the big, big question is, we have overridden clinicians, and scared our scientists

Dr. Steven Benner:  -- I've interviewed, maybe, 200 patient families in Coronavirus, just to try to get details. And there's no question that if you're above a certain age, not taking the vaccine is probably an extremely bad idea.

Ms. Christina Sandefur:  I think, just the one thing to add to that, though, is a good point that you made -- relates to the seen versus the unseen. Or what happens when government makes certain choices. What is it crowding out by not making others? And so I think that is one of the reasons why our extremely cumbersome, expensive, lengthy, regulatory process not only adds to the costs, ultimately, of treatment, but, of course, when you approve something and don't approve something else, or when a drug company enjoys IP protection before generics can come onboard, it's just something to think about, that what kinds of costs are you adding, both in terms of financial costs, and in focusing resources in certain areas versus others?

And that's without making a comment about the particular things that you spoke to. But that is a very real concern that I think a lot of people don't think about. Because we will never know the things that were not made available to us, or the resources that were not dedicated to things that could have been helpful, simply by virtue of the fact that the government didn't choose them.

Hon. Kenneth Lee:  The gentleman here.

Michael Buschbacher:  Michael Buschbacher, from Boyden Gray and Associates. One of the hats I wear is an environmental lawyer. And I've worked both for the government, at DOJ, and in private practice. And one of the very frustrating things ⸺ especially, working for a lot of fossil fuel companies in private practice, and looking at the public policy decisions we're making ⸺ is exactly as Professor Benner points out, just the sheer nonsense that passes for our conversation about climate and pollution.

And I wonder, what's the way that we, who work in that area, might help to restore the covenant that you mentioned at the beginning of your remarks. Because, I'm very afraid, for exactly what you mentioned, that we're going to end up in a situation where things are really, really terrible, and ⸺ unless you're Elon Musk, perhaps ⸺ and what are the things that those of us who are not scientists can do to help change the way the conversation goes?

Dr. Steven Benner:  Well, I wish I knew. And I wish you guys, as members of the political, legal, community would advise us on this. What is the case right now, is that the scientists are, themselves, self-enforcing the flow of information outside. So, if you ask -- when I say anybody who has a reason to know, it's like Christopher Columbus. No, everybody didn't think the world was flat, and Christopher knew it was round. If you asked a farmer, "Is the world round or flat?" they would say, "I've never thought about the subject."

Likewise, if I were to say to you, "Was it, in fact, nine degrees centigrade warmer, fifteen degrees warmer, fifty million years ago in the Eocene?" you would say, "I've never thought about it." But that's a fact that's widely known. Everybody knows it. Everybody also knows that since the last ice age, we're somewhere in the 70th percentile. That is, 30 percent of the years have been warmer, and 70 percent of the years have been cooler. And the coral reefs have done fine, and the polar bears did fine.

There was not, all right -- all of this was well-known to people in geology departments. But you are not permitted to say it. And if you say it, you will not get a grant. You will not get promoted. You will not get tenure. You won't get a job. Now, how you manage that is beyond me. Because, remember, the seeds of this were sown 20 years ago, when science was determined to be settled by the political authorities. Lysenko is a very good model for that, actually. And then, if you were not in agreement, you were a science denier. And, of course, what a science denier is, is a scientist. Right? Somebody who challenges.

Now, I don't know how you handle this. As I said to the previous questioner, this ship has sailed. Climate science -- it's like genetics in the Soviet Union. It took generations for that to work itself out of the system. And, the fact that you have Boris Johnson, who's a Conservative Party from the U.K., Erin O'Toole in Canada -- this is not a Left-Right thing any longer. This is a universal consensus, based on no science at all. And I don't know how you handle it, at this point. Because, as I say, Judith Curry is thrown out for saying true statements. When you say true statements, and you're thrown out of the academic life, that's quite a tragedy for people in academic life. Because we don't know how to get a real job.

Ms. Christina Sandefur:  And it's even more than that. Right? In addition to the self-censoring scientists, and things like that, this is another area where we have positive and normative statements. And people fail to distinguish between the two when they make policies. And it is just simply not the case that there are people out there that believe we should have a pollution-free environment. Nobody -- no human being that wants to live, wants a pollution-free environment -- no human being that wants to live comfortably.

And so, the question comes down to, even if we can come to a consensus on climate change, and what's causing it, and what the trajectory is, then the question becomes one of, so what? So, then, what do we do about it? And, again, do we use the scalpel, or sledgehammer approach? Do we say, "Well, we can go ahead and give our lives back to the earth, and stop doing whatever it is that we're doing." And then we will all perish. We will not have vaccines and things like that. Or do we say, "Okay. Well, let's think about the consequences of human decisions and how much pollution, or how much effect on the environment ⸺ to the extent that we have those effects ⸺ is acceptable to live the type of life we want to live?"

And, again, that goes back to everybody has a different view on that. Everybody has different assessments. So that's what makes it so hard for a regulator to just come in and say, "I'm following the science. And, gosh, we have climate change. And so now we've got to stop all pollution. We've got to stop all business. We've got to move everybody to electric cars, and hold our breath really long."

Hon. Kenneth Lee:  We'll go, go in the back, there.

Paul Kamenar:  Thank you. My name is Paul Kamenar. I'm a lawyer here in Washington D.C. I have two questions. One -- both Professor Cohen and Ms. Sandefur, you correctly said that the FDA cannot ban the off-label use of FDA-approved drugs. But, in terms of promotion, nine years ago, the Second Circuit held in U.S. v. Caronia, "The government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful off-label use of an FDA-approved drug."

So, my first question is, isn't the FDA following the circuit rule on this, and other circuits?

Ms. Christina Sandefur:  No.

Paul Kamenar:  They're not following it. Okay, there. They're a lawless agency. So there we go.

Ms. Christina Sandefur:  That does kind of go back to how people perceive information. I think they're -- it's just an interesting sort of sociological experiment to be in different geographic areas where there may be mandates, and still see a wide number of people just not wearing masks anymore. And then, I've actually been in areas where there are not mandates, and I've seen quite a few people wearing masks.

And that kind of goes back to if -- especially for, I think, the bulk of the people who are in this room have, and, again, an admirable, in most cases, just sort of knee-jerk reaction to, "I don't want to be told what to do by the government." Are these mandates actually counterproductive? And do they get people -- do they further erode the trust between scientists or regulators and the general population?

Dr. Steven Benner:  Let me point out, though, Covid could be different. This is likely an engineered virus, which may be one of the reasons why it presents to the public so crazy -- that we've never seen the symptomatic distribution. But, had Covid been like diphtheria, whooping cough, and any number of other things, we would not be wearing masks as a preventative. We just couldn't tolerate that. So, if Covid were different, masks would not be sufficient. And, of course, then we would be -- and it's an interesting question, as to how the modern public would require or adapt to an influenza from, like 1918. It's a very interesting question as to what we would do as a regulatory legal status, if we actually had a really serious pandemic.

Hon. Kenneth Lee:  Okay.

Elizabeth:  Thank you all so much. My name's Elizabeth. I'm a fourth year evening student at Georgetown Law School. I think most of us in this room who are lawyers, and right-of-center lawyers, came into Covid with already-formed opinions about the administrative state, and about liberty interests, and all of those things. But I think the average American soured on government science over time. I don't think they came in with that prior opinion.

And I think, in large part, they soured because of the sense that, either the scientists are just making it up, or they're not being honest with us. Dr. Fauci says, "You don't have to wear masks." Then he says, "You do have to wear a mask." Then they say, "Vaccinated people don't have to wear a mask." Then they say "Vaccinated people do have to wear a mask." And they say, "Covid doesn't spread in aerosol." And now it does. And Covid -- vaccinated people can't get Covid and end up in the hospital. It has a 99 percent efficacy. Oh, wait, maybe it's not. Maybe it fades over time.

I understand some of this is an aspect of science. Science develops over time, as well as, science isn't always 100 percent certain. So why do our government scientists not do a better job of communicating this to the American people? Because, in some ways, I think the lack of trust that Americans now have in science is due to the very scientists' own fault in not communicating what they themselves truly believe about these things, which is that it's not certain.

So, what would your advice be to government scientists about how to communicate with the American people? And why do you think they have this hesitancy to express the uncertainty that is inherent in scientific inquiry?

Dr. Steven Benner:  Are you familiar with the male answer syndrome? My wife tells me that if you ask a man a question and he does not know the answer, he'll give you an answer anyhow. Scientists need to say more frequently the four most important words, "I do not know." And that's something that scientists -- but I do agree that we have been remiss in our education system in explaining what science is, which is centered around uncertainty. And, as Feynman says, "Science begins with a disbelief in experts." But you also have a political process now, which goes back ⸺ and Al Gore is largely responsible for it in the area of climate ⸺ where we do not express the fact that science begins with a distrust of experts, and the statement, "Trust the experts" is anti-science.

Hon. Kenneth Lee:  In the back, there.

Lindsey Powell:  Hi. My name is Lindsey Powell. I work for Harvard's Office of Technology Development. From a Libertarian perspective, where do you each draw the line between personal autonomy, individual rights, and any obligation we may have to protect our fellow citizens and others?

Ms. Christina Sandefur:  Yeah. I mean that is not only a question, it's the question. Typically, when it comes to these decisions, I do think that there is -- I'm a Libertarian and not an anarchist, because I do believe that there is a very limited role for government in protecting people's rights. And, so, I do think that the closer you get to things like vaccinations, or other public safety measures, there's arguably some role for government, simply because you are talking about people's decisions that have an effect on others. So, where, exactly, you draw that line, I think I'll borrow the phrase that more people need to be comfortable saying. And that is, "I don't know."

But what I do know is that we have -- we are nowhere near that line. We've been talking about getting rid of the FDA and the CDC. I wish we were at a point where that was the next question. What we have is a system that defers to government over individual autonomy almost every time this question comes up. So my feeling is that, when there is a tie or a close call, the true Libertarian response has to be to defer to the individual's decision, the individual autonomy. But so many times, we don't even have those close calls, and we still have our finger on the scale for the government.

Hon. Kenneth Lee:  I know you were standing there for a while. It has to be very quick. It will be the last question.

Questioner 13:  It's a very quick question. Some of the panelists and questioners have privileged the physician-patient relationship. But physicians do derive part of their authority from state licensing regimes. And I'm curious how these arguments that we've been talking about interact with that. We've talked a lot about federal regulation. Thank you.

Ms. Christina Sandefur:  Your question's about the state licensure -- I guess I would just say that it is true that states have an enormous power, breathtaking power, over a physician's ability to practice his or her profession. And I think that more conversation has to be devoted to that, as well. Because, frankly, physicians may be free to take certain steps, but if they do so, their medical licenses can be in jeopardy. And that's another way ⸺ as you rightly pointed out ⸺ that the physician-patient relationship is harmed.

Hon. Kenneth Lee:  And, before we conclude, I want to remind everyone to stay here in this room. We will have the Bork memorial lecture, featuring the Honorable Laurence Silberman. But I want to thank all of the panelists here for their wonderful discussion today.

 

 

 

4:30 p.m. - 5:30 p.m.
Hon. Robert H. Bork Memorial Lecture

2021 National Lawyers Convention

Topics: Constitution
East & State Rooms
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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The 2021 National Lawyers Convention took place November 11-13, 2021 at the Mayflower Hotel in Washington, DC. The topic of the conference was "Public and Private Power: Preserving Freedom or Preventing Harm?". The conference concluded with the annual Hon. Robert H. Bork Memorial Lecture, featuring remarks by Judge Laurence H. Silberman on "The Job of Attorney General—A Historical Perspective."

Judge Laurence H. Silberman will be delivering remarks on "The Job of Attorney General—A Historical Perspective."

Featuring:

  • Hon. Laurence H. Silberman, United States Court of Appeals, District of Columbia Circuit

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Event Transcript

Hon. Michael Mukasey:  … to the concept of a package under the Carriage of Goods by Sea Act or something in between. However, the topic of this afternoon’s talk is a historical perspective on the job of the attorney general, a topic that lies squarely within Article II. And introducing any other judge who chose to speak on such a decidedly Article II topic might present a challenge, but not so with Judge Silberman. For one thing, his career included service as deputy attorney general, beginning in September of 1974 after what is generally referred to as the Saturday Night Massacre. His tenure as deputy, even in that serious time, did have its lighter moments. I’m told that to resolve disputes between the office of Legal Counsel, which was then headed by Antonin Scalia, and a solicitor general, who was then Robert Bork, he would hear the two of them out and then go upstairs, he said, to consult the attorney general. He would then sit alone in a conference room for about half an hour, sometimes with a drink and a cigar, and then go back and tell them how the attorney general had decided.

 

[Laughter]

 

      When he disclosed that, several years later, to Scalia, he learned several Sicilian curse words.

 

[Laughter]

 

      Most of the business, at the time, however, was serious, including following up on a newspaper story about the existence of secret files of the late FBI Director, J. Edgar Hoover, who had died in 1972, files that he had assembled that contained negative information on various political and other public figures so that Hoover could pressure them into doing things for political and other reasons or so that he could put that information at the disposal of others, whom Hoover favored. Judge Silberman felt that it was his obligation, at the time, to review those files. He did, and he later described that as the worst experience of his public career. He wrote later, in a statement that has more than a faint current echo­­ -- he said, “I have always thought that the most heinous act in which a democratic government can engage is to use its law enforcement machinery for political ends.”

 

      His work and his influence, both when acting in a judicial capacity and when performing a task that did not directly involve Article III work, have extended well into Article II territory, and particularly to the main responsibility of Article II office holders, which is to keep the nation and its citizens safe. When sitting on the FISCR Court of Review in 2002, he was the principal author of an opinion concluding that, contrary to what was then the Department of Justice position, FISCR did not require that intelligence gathering and law enforcement within the Justice Department be separated by a wall, which impeded the effective use of intelligence that was supposed to keep the country safe.

 

      In 2004, he agreed to serve as co-chair, along with Senator Chuck Robb, of the bipartisan commission that investigated intelligence failures relating to Iraq’s weapons of mass destruction. The Silberman Robb Commission reviewed the intelligence shortfalls with respect to Iraq and contrasted them with successes with respect to Libya in a report that was so thorough and so comprehensive and dispassionate that partisan recriminations were largely avoided. The Commission’s recommendations, including establishment of the national security division within the Justice Department and the strengthening the FBI’s intelligence and counterterrorism capabilities, were followed. And I think it’s generally recognized that Judge Silberman drove those recommendations.

 

      His former law clerks include Justice Amy Coney Barrett and others who serve in the federal judiciary, as well as many who have served in senior positions within the executive branch and within the academy, as well as in private practice and industry. On a personal note, I was privileged to be among those who nominated Judge Silberman to receive the nation’s highest civilian award, the Medal of Freedom, which President Bush conferred on him in 2008.

 

      When you consider the scope and depth of Judge Silberman’s reach, it should come as no surprise to anybody in this room that I fully expect to learn more about the nature of the job of the attorney general in the next several minutes than I learned in the several months that I actually held it.

 

[Laughter]

 

Judge Silberman, the microphone is yours.

 

Hon. Laurence H. Silberman:  Thank you very much. It’s an honor, indeed, to be introduced for this topic by one the more distinguished––maybe the most distinguished––attorney general we’ve had in a long time. On the other hand, I have to be very careful and be non-political, so I can’t say anything in this talk about present controversies. And so, I’m not going to say anything nice about Mike Mukasey’s tenure, as much as I admire it. I’m not going to talk about that because it gets into the political world.

 

      My thesis is that to be a successful attorney general, one must effectively balance loyalty to the general policies of the president with an obligation to enforce the laws in a non-partisan fashion. This is by no means easy. A good attorney general should constantly feel the tension between these objectives. It is just as improper for an attorney general to describe him or herself as the president’s wingman as it is to see oneself as a wholly independent actor. It is quite wrong to allow for partisan considerations to interfere with legitimate investigative and prosecutorial authorities. It is particularly troubling if these powerful tools––investigatorial and prosecutorial tools––are used for political purposes.

 

      We must bear in mind, however, that the Constitution gives the president, not the attorney general, the responsibility to take care that the laws be faithfully executed. He or she has a right to set Justice Department policies within proper limits: that’s the president. So, if the president gives an order that an attorney general believes is based on narrow, partisan purposes, his or her proper course is not to refuse to comply––as we have seen recently––but only to resign. It takes courage to pursue an honorable course as attorney general, to balance the conflicting pressures—perhaps even more courage for a Republican.

 

      As I have recently observed in a judicial opinion, almost all the present media is virtually an adjunct to the Democratic Party. The result is that a Republican attorney general will face fierce criticism from the press, even if he or she were to pursue an honorary course. But at all costs, an attorney general must not panic in the face of press criticism. Incidentally, I don’t believe my recent observation about the press and media, as heavily torn to the Democratic Party, is a partisan remark. It’s an undeniable fact. Witness, although I have recently been criticized for my opinion, no one, no critic, has questioned my prentice governing the democratic bias of the American media and press. So we can take it as a fact.

 

      As a judge, I wish to avoid discussion of recent political events, otherwise, as I said, I would say something nice about Mike Mukasey’s tenure. Instead, my focus tonight will be on history—on Ed Leavy’s tenure as attorney general. That was almost 50 years ago. That’s history now. I’m afraid much of what I am about to recount is autobiographical, but I have no alternative if I am to tell the story.

 

      Ed Leavy has been often described by the media and academic sources as the paradigmatic excellent attorney general. The mainstream press compares him to Bill Barr, to the disadvantage of the latter. I would not make the same judgment. The press treatment of Ed Leavy prompted me to recall his tenure to describe my experiences with him, hence this speech. Undeniably, Ed Leavy was a decent and honorable man. He carried through some important reforms of the FBI, particularly those responding to the terrible COINTELPRO practices, which Bill Saxbe and I had discovered toward the end of our tenure.

 

      When I learned that the president of the University of Chicago, a most respected ex-law professor, was going to be attorney general, I was enthusiastic. He was thought to be a brave university president because he had ignored a student occupation of a university building at the University of Chicago during the Vietnam or counter Vietnam rebellions. As Don Rumsfeld, President Ford’s Chief of Staff, diplomatically explained to me, I was much too young to be promoted from deputy to attorney general in a post-Watergate era. He did not need to say I wasn’t particularly distinguished, although that was true, too. Still, I had become very close to President Ford and his counsel, his ex-law partner, Phil Buchen, during the difficult transition period from the Nixon presidency.

 

      Indeed, I was offered several other senior-government posts, including one cabinet-level one, before I fixed on Ambassador to Yugoslavia, a country that had fascinated me since college. Before that, Ed Leavy had very graciously asked me to stay on as deputy attorney general. That was not pro forma. He even enlisted my mentor, George Shultz––who, of course, was secretary of everything --

 

[Laughter]

 

      -- and a former Chicago Business School dean to lean on me. But I was adamant. I wished to leave, primarily because I had had a close relationship with Bill Saxbe. He, along with the White House personnel chief, had persuaded me to come back in government after the Saturday Night Massacre.

 

      A deputy of any department is only as effective as his relationship to the principal combined with that relationship to the White House. Now, to be sure, when we were prosecuting Nixon, my relationship to him was rather tenuous. But nevertheless, I did feel obliged to be loyal to his policies. In other words, the deputy and other senior political appointees of a department are ideally the mutual choice of both the principal and the White House. If the choices are all from the White House, the cabinet officer is hamstrung. And if they are picked by the cabinet officer alone, departmental loyalty to the president is tenuous. Having been a deputy in two departments for five years, I had no desire -- I wonder if you can give me some kind of light here that I can read from. There’s a light here that’s impossible for anybody my age to see. Do you have anything here?

 

Dean Reuter:  Are you able to hold this?

 

Hon. Laurence H. Silberman:  Yes. Otherwise, I’d go off script and get in trouble.

 

[Laughter]

 

A deputy of any department is only effective as his or her relationship with the principal, combined with that with the White House. In other words, the deputy, and other senior political appointees, are dually the mutual choice above the principal and the White House. I already said, if it’s all the choice of one, it’s a disaster, and if it’s all the choice of the other, it can be a disaster.

 

      So having been a department deputy in two departments for five years, I had no wish to develop a new relationship with someone else no matter how much I respected his reputation. I explained this material so as to rebut any possible suggestion that my criticism of Ed Leavy, which is about to come, is in any sense sour grapes. Indeed, the president asked me to suggest three possible nominees to replace me as deputy attorney general. I was flattered. I had never known that to happen before. Normally, White House personnel office jealously guards the suggestion of possible nominees, and a retiring applicant is not normally thought as a source of replacement suggestions.

 

To add to the anomaly, Don Rumsfeld, the legendary tough chief of staff, called me to urge that I nominate his Princeton classmate, Marty Hoffman––a very good man––then, General Counsel of Defense. I did, but my first choice was Ed Schmults, the Undersecretary of Treasury for Law Enforcement, with whom I had worked closely. The president, following my advice, chose Schmults, and his nomination was held back when a criminal antitrust suit was brought against a company on whose board he had once sat. He had not been remotely involved, but in the post-Watergate era, the White House was excessively sensitive.

 

As it happened, I was able to recommend Schmults for the same job––this time, successfully––when Reagan was elected. After Leavy was confirmed, he became actively involved in the search for a deputy. He asked my views about Phil Areeda, who some of you may remember as an enormously distinguished professor at Harvard Law School. He thought of him as a possible replacement for me. Unfortunately, I discouraged that choice. To explain why, I must take a step backward.

 

I had recruited Nino Scalia, the year before, as the Assistant Attorney General for the crucial Office of Legal Counsel in the Justice Department. He actually was nominated by Nixon and appointed by Ford because he came in in the interregnum. We became very close, to the point that we would actually tease each other about our ethnic backgrounds. He would accuse me of being insufficiently knowledgeable about Jewish culture, which he picked up in New York.

 

[Laughter]

 

      After Ford became president, I noted he appointed his old law partner from Michigan, Phil Buchen––a wonderful, wise, and decent man––as his counsel. Buchen realized he needed some Washington expertise, so he brought down Phil Areeda––who had served him as a young Harvard Law School graduate in the Eisenhower White House––to come down and gave him the title of co-counsel. Scalia came to my office to tell me the news about Phil Areeda. I mistakenly assumed he, like Scalia, was of Italian heritage, and I made some irreverent remark, to which Nino replied, “He’s not one of ours. He’s one of yours,” --

 

[Laughter]

 

-- which I took to mean he was Jewish.

 

As it happened, Phil and I became very close friends. We visited each other for years and spoke often until his untimely death. But neither Nino or I never mentioned anything about Phil’s supposed Jewish background, at least, for almost a year. He did––Phil, that is––a wonderful work in the White House. We collaborated on some deregulation initiative with Steve Brier, then working on the Hill.

 

Rumsfeld recognized Phil’s talent, which went far beyond legal expertise. He wanted him appointed as Executive Director of The Domestic Affairs Counsel. However, although Phil loved the idea, the chairmanship of the Domestic Affairs Counsel had been promised to Nelson Rockefeller. He, apparently, saw Phil Areeda as Rumsfeld’s man, and the rivalry between Rumsfeld and Rockefeller had become bitter. Because of that narrow view of Areeda, which was ridiculous -- that he was Rumsfeld’s man -- he was no one’s man except the president. But in any event, it stopped Phil’s appointment, and he, rather disappointed, decided to return to Harvard.

 

After Schmults’s appointment cratered, Ed Leavy asked me, “What about Phil Areeda for deputy?” By that time, I had learned of Ed Leavy’s plan to use the Domestic Antitrust laws to break the Arab boycott. I thought it was nuts. I responded that Areeda was one of the first people I considered, but I rejected him because I didn’t think it was wise, in light of Leavy’s Arab boycott plans, to have two Jews in the top two positions in the department. He agreed.

 

Some days later, I received a call from Phil Areeda, who had been discussing with me his plans to return to Harvard. He said that after he left law school domestic counsel job, the only position he would be willing to take was the one I was leaving. I explained I would have recommended him but for Leavy’s anti-Arab boycott plans. There was a moment of dead silence. Phil said, “Larry, I’m not Jewish.”

 

[Laughter]

 

I asked quickly, “What are you?” He replied, “I’m a Lebanese Catholic.” I said, “Oh my God, that’s perfect.”

 

[Laughter]

 

      I immediately ran up to Leavy’s office. I was just two minutes too late. He had just hung up the phone after offering the job to a federal district judge in New York, Ace Tyler. Tyler had headed the Civil Rights Division in the Eisenhower administration. Ace Tyler was what you might describe as a very wet Republican. I prefer that British term for squishy --

 

[Laughter]

 

-- to the word RINO, which has been badly misused lately by a prominent politician. Phil Areeda, on the other hand, besides being a free-market champion, was conservative across the board, including social issues.

 

I became concerned about Ed Leavy as attorney general when Phil and I were tasked to prepare him for confirmation. We sat in the Roosevelt Room in the White House, going over his questions and answers he would face. One of the most sensitive was busing. The administration had become rather dubious as to the benefit of busing, typically by judicial order, in order to achieve integration in the schools. Ed seemed quite reluctant to express a similar concern in his congressional confirmation testimony. It was not because he disagreed. He sort of agreed. He sort of had the same doubts, but he was very uncomfortable in stating them publicly. I gathered this reluctance to express such views stemmed from his concern about academic impressed opinion. I became exasperated, as was Phil Areeda.

 

I pushed Leavy rather hard at one point, asking bluntly—I recall it vividly—asking whether he still wanted to be attorney general. In short, early on, I got a bit of a sinking feeling that Ed Leavy was too much concerned with the views of professional academics and the press. He wasn’t anywhere near as interested in presidential objectives, still less Republican Party policies. I realized afterwards that Phil Areeda, as a distinguished and more conservative academic, might have had an enormously positive influence on Leavy, which leads me to the decisions Leavy made that I think were his unfortunate legacy.

 

The first was the abrogation of a carefully drawn agreement I had negotiated with Lane Kirkland, the president of the AFL-CIO, concerning immigration. Illegal immigration was nowhere as burning an issue in 1974 or ’75, but we could see the problem growing. In those days, the AFL-CIO was hawkish about stemming the flow. Lane Kirkland could practically control most of the Democratic Party on any issue touching laborers’ core interests. And although certain civil rights groups were legitimately concerned about any legislative proposal that could be thought to target Hispanics, we carefully considered how that would be avoided. Accordingly, I, either as deputy attorney general or acting attorney general––I can’t remember exactly which––agreed with Lane that we would have and fashion legislation that would require the development of forge-proof social security cards and all employers in the United States would be obliged to examine those cards before hiring anyone. Obviously, the cards would go to legal immigrants—legal immigrants—or citizens.

 

Amusingly, at the end of the negotiation, Lane demanded one further consideration from me––which begins to get to the subject of this talk––that Bob Bork personally argued the League of Cities v. Usery case, the one challenging the U.S. government’s application of the wage and hour laws to state employees. Lane wanted Bob to argue it in the Supreme Court. Sure enough, he didn’t want to argue; he didn’t like the case. I called him. I told him what my deal was. He protested. I explained that the deal was in blood, and so he reluctantly acquiesced. He argued the case, and of course, he lost.

 

[Laughter]

 

Not surprisingly, some groups on both the left and right objected to the proposal that Lane and I had developed—that it would constitute a national identity card. I suppose, in a sense, it was, but we thought it was absolutely essential. As I was preparing to take up my ambassadorial appointment, to my very great disappointment, I learned that Ed Leavy abrogated the deal. He received fierce protests from the AFL-CIO and some from the press. He also had a bad experience with student protests at the University of Chicago when he wanted to introduce identity cards, so he backed off, and the deal cratered.

 

Can one imagine how much better off we would be today if that legislation had passed? One might wonder why the Ford White House would have allowed Leavy to break the agreement. The truth is, the issue was not anywhere near as hot as it is today, and Leavy, in the aftermath of Watergate, had, in hindsight, much too much autonomy.

 

The next unfortunate Leavy decision––in my view, the very worst––was the appointment of John Paul Stevens to the Supreme Court. Justice Douglas had become ill while I was still a justice. Leavy had not yet surfaced. It appeared that Douglas would be forced to resign shortly. I was asked by the president to come up with a list of five names to replace Douglas. Given the demands of the time––of my time–– I could not read an extensive number of federal circuit court opinions. And of course, it would be federal circuit court opinions, federal circuit court judges, that we would look at as possible nominees. So bearing in mind for the need for absolute secrecy, which the president had demanded of me, I enlisted a superb conservative lawyer in the ranks of the Tax Division of the Justice Department. That was Earnest Brown, who had been a professor at Harvard Law School who had been so disgusted by the hijinks in the ‘60s that he quit and buried himself in the Tax Division.

 

I did not consult Nino Scalia. One might have thought, as the assistant attorney general for OLC, he would be the obvious source of advice, but even then, I was thinking of Nino himself as a possible Supreme Court appointment. Indeed, years later, in 1984, as a former chairman of Reagan’s lawyers and law professors, I suggested to senior White House staff cabinet members that during the campaign, they leaked the names of Bork, Scalia, and Posner as prospective Supreme Court nominees. That was, of course, before Posner converted.

 

[Laughter]

 

      I thought it was going to be done, but Jim Baker objected, and we had to include Sam Pierce, the secretary of HUD who, incidentally, remained under investigation for 10 years. That was a mistake but, in any event, some years later, when Nino was nominated to the Supreme Court, I acted as his counsel through the confirmation process. You wonder why I acted as his counsel? Well, most of the problems -- I was a judge, too, and most of the problems dealt with what was legitimate for a judge to say, but even more important, I was free.

 

[Laughter]

 

      Back to 1975. With Professor Brown’s help, I came up with a list of five prospective nominees. I have a good memory, but I remember only the top three. First on my list––first by a very long shot––was the Solicitor General, Bob Bork. The second was Cliff Wallace, a judge on the Ninth Circuit who became Chief Judge. And the third was Phil Tone on the Seventh Circuit. I think I remember that after Stevens was picked Tome resigned. I don’t know what the consequences are of that or the sequence.

 

      The president and Phil Buchen were a bit apprehensive about Bork. They worried he might be too controversial, not because of Roe v. Wade. That had been decided a couple of years before with rather little attention. It was only as time went by that it became a hot-button issue. It was rather because Bork had fired Archie Cox, the denouement of the Saturday Night Massacre.

 

I remember contending strongly that I could get him confirmed, that both Elliot Richardson and Bill Ruckelshaus had urged Bork to remain a justice. They didn’t want the consequences of a mutiny when Elliot resigned, and Bill was fired, which -- because he would have to fire Cox and be left holding the bag. They pointed out the difference. As a price of confirmation they had both had to promise, as I had to later as Deputy Attorney General, that they would support the special prosecutor, whereas Bork had been nominated before Watergate had heated up and had no such commitment. So therefore, I didn’t think it was fair to blame him.

 

I also told him that when I, as Deputy Attorney General, threatened to resign to Nixon after he ordered me to interfere with the John Conley prosecution, Bork had hastened to say he would join me. I should tell you that Bill Saxbe had a different view. When I asked him -- when I told him that I had told the White House that I was going to resign in light of Nixon’s order, and I asked Bill Saxbe, “If the White House asks me what your view is--” I told him that Bork would resign -- “but what is your view?” Bill Saxbe said––he was out hunting with Jim Eastland––he said, “Larry, don’t bother me anymore. If the president asks for my view, tell him to go piss up a rope.”

 

[Laughter]

 

He was pungent.

 

–In any event, most importantly, I told the president and Phil Buchen that I had had some very private discussions with Birch Bayh, the Chairman of the Judiciary Subcommittee, about Bork’s nomination and confirmation, and he, too, thought Bork could be confirmed. I pointed out to Phil that the president had moved left, particularly in his appointments, since becoming president, and the fight over Bork’s nomination, which I thought would be successful, would help Ford against a challenge from the right, likely coming from California.

 

[Laughter]

 

      We didn’t get very far in our discussions because Douglas temporarily recovered. When he did step down, I had left Washington to be Ambassador of Yugoslavia. I was truly astonished when John Paul Stevens was nominated to replace Douglas. He had not even been on any lists that Professor Brown and I had considered. But as it turned out, he was a rather close friend of Ed Leavy’s. They had co-taught together.

 

When sometime later, I asked Phil Areeda about Stevens, he expressed disdain. I remember that he said that Stevens had never voted against an antitrust plaintiff. Of course, Phil, as an antitrust lawyer, focused on that. But in any event, the White House had deferred totally to Ed Leavy’s choice and, once again, as with Ace Tyler, Leavy turned away from a conservative.

 

      I thought it was a dubious appointment from the beginning, but it turned out to be, from the point of view of one who believed in judicial restraint, a disastrous one. I very much doubt that if Phil Areeda had been deputy attorney general––if Nino and I hadn’t screwed that up––that choice would never have been made. Rumsfeld, as I had noted, had enormous respect for Phil Areeda. I think Phil Areeda would have been strongly opposed to Stevens.

 

      Finally, I turn to two related decisions which could have damaged Ford’s reelection. Henry “Hank” Ruth, a Penn Law professor, had succeeded Jaworski as Watergate’s Special Prosecutor. I had developed a rather close relationship with him during the last six months of the Watergate era, leading to President Nixon’s resignation. He came to my office in early 1975, after Ford was president, to discuss the prospect of closing the special prosecutor’s office. He pointed out, quite reasonably, that the premise of the office, that White House officials, including President Nixon, were under investigation -- the premise was no longer operative. After all, Jerry Ford was president. Since I was preparing to leave Justice to go to Yugoslavia, I hadn’t focused on the issue, but I instantly agreed.

 

Ed Leavy had just been sworn in, so I took Hank Ruth with me to see the new attorney general. Hank and I urged Leavy to disband the office, but Leavy was troubled. Although all the Watergate cases had been tried, some were on appeal. Leavy asked me what would happen if one or more of the convictions were overturned and had to be retried. I responded that, of course, we would retry them. Leavy was unpersuaded. He was afraid we would be criticized in the press if we lost a case, so he rejected our recommendations. Hank Ruth, rather disappointed––perhaps even disgusted––told me he was resigning, and he promptly did. Leavy then appointed Chuck Ruff, a prominent democratic lawyer, to carry on as the new Watergate Special Prosecutor.

 

I came back to Washington in September 1976 for consultations at the State Department. I noted in the press that President Ford had begun to close the gap with Jimmy Carter. Then the Washington Post broke the story that Ford himself was under investigation by the Special Watergate Prosecutor. That was all Ford needed. His image as the decent guy who had cleaned up the Nixon mess was put in jeopardy.

 

It turned out the allegation against Ford had nothing to do with Watergate. It was a bogus claim relating to a campaign contribution in a previous congressional race. It was as phony as a four-dollar bill, cooked up by political enemies; a disgruntled ex-staffer of Ford who had not been taken to the White House; a rather nasty Maryland politician, Helen Bentley, who had been fired from an administrative job; and the head of a union furious at Ford for vetoing the Cargo Preference Bill.

 

The allegation went to the FBI who brought it to Ace Tyler and the attorney general. Rather than sending it to the Criminal Division for at least a preliminary look, in order to protect themselves, they foolishly decided to send the matter to Chuck Ruff, the Watergate Special Prosecutor. He only had a skeleton staff, and he didn’t move very quickly. The matter was not disposed of promptly, and no surprise—no surprise—it leaked right in the middle of the campaign. That was a disaster. Ford’s identification with Watergate was toxic, and as I recall, Ford dropped precipitously in the internal polls after the Post story; never quite recovered.

 

As I ponder Leavy’s three fateful decisions, which in my view, are a major part of his legacy, I realize the last one, which could have hurt Ford’s reelection chances, was fortuitous to me. If Ford had won in 1976, Reagan would probably not have won in 1980. I would not have been chairman of his lawyers and law professors and co-chairman of his foreign policy advisors, in which case, I probably would not have been appointed to the Court of Appeals. But whatever my personal gain, Leavy’s tenure was quite unfortunate for the president. He was an honorable man, I’ve said that, but I don’t think he felt the tension the ideal attorney general is supposed to feel. He was much too much concerned with his press image to be an effective Republican attorney general. Thank you.

 

[Applause]

 

Dean Reuter:  Do you want to take some questions?

 

Hon. Laurence H. Silberman:  Oh, sure.

 

I’ve been asked whether I would be willing to take questions, and I said yes.

 

[Laughter]

 

May be a mistake, but I don’t think so. I’ll be careful. But given the lights, I won’t be able to see anybody with their hand up.

 

Dean Reuter:  Nobody stood up. Use the microphones here at the front. There you go.

 

Questioner 1:  Will do. Could it be that Attorney General Leavy was affected by the Watergate atmosphere? In other words, he was hypersensitive because of the politics of the time?

 

 Hon. Laurence H. Silberman:  Sure. That’s another way of saying he was more conscious than he should have been to press treatment, isn’t it? When you say, “The politics of the time,” you’re referring to how the press treated the situation. You mean, he wasn’t given a complete clean slate?

 

Questioner 1:  And he also was facing Republican collapse.

 

Hon. Laurence H. Silberman:  Somehow or other that doesn’t seem to me relevant factors for an attorney general.

 

Questioner 1:  Thank you.

 

John Reeves:  Hello, Judge Silberman. My name’s John Reeves. I’m a sole appellate practitioner in St. Louis. Thank you for what I think we can all agree is an amazing speech. I have more of a technical, nerdy question. It’s my understanding that --

 

Hon. Laurence H. Silberman:  Did you say, “Dirty?”

 

[Laughter]

 

John Reeves:  Oh gosh! Nerdy—among nerds—yeah. Well, I can come up with a dirty -- no, I won’t go there. No. It’s my understanding, at the time of the Saturday Night Massacre, that the solicitor general was number three in the DOJ, behind the AG and the deputy AG, correct?

 

Hon. Laurence H. Silberman:  Right.

 

John Reeves:  But now the number three position, today, is the associate attorney general. Is it true that the position of associate attorney general was created shortly after the Saturday Night Massacre specifically to put one more political appointee level between the more administrative positions versus the solicitor general’s office? I don’t know if you -- any, any…

 

Hon. Laurence H. Silberman:  A nerdy question deserves a nerdy response.

 

[CROSSTALK]

 

John Reeves:  And I’m honored to have one from you.

 

Hon. Laurence H. Silberman:  I’m going to tell you the truth about what happened --

 

John Reeves:  Please.

 

Hon. Laurence H. Silberman:  -- to the associate attorney general. When Elliot Richardson replaced Kleindienst -- who, you remember, got in terrible trouble and had to resign and eventually indicted. When Elliot Richardson came from HEW––the former HEW––to attorney general, he brought with him a man by the name of Jonathan Moore who had been counselor with him in the State Department—his first job in the Nixon administration. Jonathan was not a lawyer—enormously talented guy who had been at my alma mater, Dartmouth, with me, as a matter of fact––and Jonathan came over, and Elliot wanted to create a position for him to help him manage the Department. So he created the job of Associate Attorney General. And he got that level four from the White House.

 

      And then it continued on when Griffin Bell became Attorney General because Carter insisted that Griffin Bell take the Pittsburgh mayor, Flaherty, as his Deputy Attorney General. Now, Griffin Bell did not want Flaherty as Deputy Attorney General—perfect example of my proposition that a deputy is only good if he’s part selected by the principal. So what Griffin Bell did was put Flaherty way to the side, ignored him, and brought, as I recall, the head of the Republican Party in the assembly in Georgia, his friend, up to be Associate Attorney General and got Congress to create the job as a statutory job. And this was a way of creating a deputy when he didn’t want the deputy that President Carter had insisted. And that’s the explanation of where the associate attorney general job came from.

 

      And I have argued with attorney’s general who’ve sought my advice as they’ve gone into office, one after another––and I don’t think I ever talked to Mike about this––the only way you can use that job logically is not to divide between civil and criminal because U.S. attorneys do both, and they should be under the supervision only of the deputy. But if you’re going to use the associate attorney general’s job, put all the staff functions under that so you operate like a corporation with line functions under the deputy and staff functions, budget, administration, legislation, so forth under the associate attorney general. I’m sure that’s more nerdy response than anybody wanted. But you can see that job came -- was created because of internal politics.

 

John Reeves:  Thank you.

 

Questioner 3:  Judge Silberman, thank you very much for those remarks, and I thought that was a very interesting piece of history. If memory serves correctly, I believe the ’74 midterms had gone heavily democratic and, at least, part of it was my understanding that Justice Stevens had been nominated with the fact in mind that the senate was heavily democratic as well. You had mentioned that you had thought that you had, at least, a fighting chance of, perhaps, nominating and confirming Robert Bork back then. And my question is, even with the heavily democratic senate then, do you think the risk of Mr. Bork getting Borked in ’76 was just as high as it ended up being in ’87?

 

Hon. Laurence H. Silberman:  Well, you remember I had these private conversation with Birch Bayh, and he was particularly powerful. He was Chairman of the Subcommittee of the Judiciary and represented, sort of, the center of the Democratic Party, and he thought Bob could be confirmed. So there is no question there would have been something of a fight, but I think the configuration of the senate at that time was, I think, almost a majority of southern Democrats and Republicans—pretty close.

 

      And it’s true that Nixon had had trouble with Haynsworth, but Haynsworth had been opposed by both the civil rights groups and the AFL-CIO. I was pretty sure I could, if not deliver the AFL-CIO, neutralize them. And the civil rights groups would not have been energized to oppose Bork at that point because Affirmative Action, after all, had been a Nixon initiative, of which, unfortunately, I am largely responsible. So the civil rights groups were not as hostile to the Republicans as they were in 1986 - ’87. So I thought I was pretty sure I could get him confirmed. It was going to be something of a struggle, but I was pretty sure. In fact, I think it would have been possible to have him confirmed in ’87 if he had stopped trying to turn the senate into a Yale classroom.

 

[Laughter]

 

      Yeah.

 

Questioner 4:  Hi. And thank you so much for doing this. You’ve met a lot of different kinds of attorneys in your work in the Department of Justice. And I guess I’m curious if you’ve noticed any trends over time of attorneys who seemed really promising at the beginning of their careers and then turned out not to fill their roles really well?

 

Hon. Laurence H. Silberman:  Lordy, how do I answer that question?

 

[Laughter]

 

      I’ve never seen a lawyer that wasn’t competent; they’re all wonderful.

 

[Laughter]

 

Questioner 4:  That works.

 

Questioner 5:  What do you think are the differences in the political environment as they existed during the time that you’re describing––right after Watergate and during Watergate––and now? Particularly, is it better or worse? And if you feel comfortable doing it, is there any advice that you would offer to an attorney general or an assistant attorney general about how to handle those kinds of challenges that exist now?

 

Hon. Laurence H. Silberman:  You won’t be surprised to hear that I would tell an attorney general to fire anybody in his top staff who read the Washington Post and the New York Times.

 

[Laughter]

 

      I would do that as president, too.

 

[Laughter]

 

      Actually, what troubles me is, as I observe from the outside, I think over time, there’s been a difference in the civil service staff of the government. When I was Undersecretary of Labor, even when I was Deputy Attorney General, I don’t think senior appointees in a Republican administration would face the same hostility and resistance from the civil service that is more likely today. Someone said to me about the State Department, “You could fire a cannon through the department and not hit a Republican.” And that may be a serious problem.

 

      I remember I was at a Federalist Society meeting in the very beginning of the last administration, and a young woman who was the deputy general counsel of a major department—politically sensitive department—told me––standing right outside––that she had had a meeting of the general counsel’s office––it was very large––and two of the lawyers had raised their hand and notified her that they were part of the resistance. I said, “Why didn’t you fire them?” She said, “Well, there’d be too long a process.” Well, I said, “Transfer them to Alaska.”

 

[Laughter]

 

      But it’s going to be -- in my sense, from what I hear, that it’s much more difficult to gain the allegiance of the bureaucracy if you’re on the Republican side than it was back when I was deputy attorney general or undersecretary of labor. I may be wrong about that. I hope I am. But from what I hear from conversations, it’s a problem that is not unique to the last Republican president.

 

Dean Reuter: Well, Judge Silberman, that was just terrific. Thank you so much. What a great way to conclude our convention programming, with you as a featured speaker, and in doing so, honor Judge Bork, one of the few pillars of The Federalist Society, with us from the very beginning. I want to thank you so much. Also, thanks to Michael Mukasey for that introduction. And I want to give special acknowledgment to Bob Bork and his wife, Diana, who are with us today down front here.

 

      I think, in closing, if I can borrow a few minutes while they put the finishing touches on the reception, there’s a not so hidden thread that runs through many of the remarks I’ve heard at this year’s convention, which is something along the lines of staying vigilant, being ever aware, being ever skeptical of all sides, frankly. Be skeptical of what you’re hearing, of what is being pushed to you, even be skeptical of your own echo chamber, but do so good-naturedly. Being skeptical and vigilant, of course, reminds me of a very, very brief story that involves my son.

 

      They’re not quite ready yet over there, so --

 

[Laughter]

 

      This is about 20 years ago or so. So you have to imagine my son as, perhaps, three years old and, as you imagine, know that I looked, pretty much, the same 20 years ago as I do now.

 

[Laughter]

 

      That’s not a joke [laughter]. That was hurtful.

 

[Laughter]

 

      Anyhow, I’m in the front yard of our rural home playing with my son, and he’s out of my sightline for only a moment, having walked into the side yard of the house, and I briskly walk in his direction, in the which -- which he’d just disappeared. But before I get there, he comes back around the corner of the house, back into the front yard. He’s got both his hands behind his back, and I, apparently, must have had a look on my face because before I could even say a single word, he looked up at me and said, “Nothing.”

 

[Laughter]

 

      So obviously, I was skeptical, and rightfully so, it turns out. But we might all be going through a moment here where we’re told by others there is nothing here to see or where somebody’s hiding a ball. So let’s be vigilant but always good-naturedly so.

 

      And as we close, a couple business notes. I invite all of you to visit and even monitor The Federalist Society website. This organization has become so broad and so deep, there’s so much going on, we’ve only just scratched the surface at this convention.

 

      And I’m going to take a moment to thank the staff of the Mayflower Hotel and who have been fairly flawless, I think.

 

[Applause]

 

      I’m sure they’ll watch the video and hear your applause later. They’re probably not -- but some of the security staff are in the room, and I want to thank them—forever present and a great comfort.

 

[Applause]

 

      Of course, all the speakers who flew in from the country, with a special emphasis on the speakers who provide the opposing view, we just couldn’t do what we do without a diversity of views, and they take particular pains to join us. So thank you to them, as well.

 

[Applause]

 

      Finally, and I really do hope they watch the video later, I want to thank The Federalist Society staff. This is an event that’s an all-hands-on-deck affair for The Federalist Society. And every last one of them has had a hand in the success. If you see them with the red ribbons on, on their placards or on their nametags, please feel free to thank them. They’re probably exhausted but graciously, I think. I always insist that the entire Federalist Society staff take tomorrow off --

 

[Laughter]

 

      -- and then on Monday we do our convention postmortem, and we start planning for next year’s convention.

 

      If you give me just one moment longer, they’re not quite ready yet. I want to take the organizer’s prerogative, which I’ve just made up—that’s not really a thing––and end on a semi-personal note. People keep asking me throughout this convention and in the halls, “How are you holding up? Are you tired? How’s the staff surviving?” And everybody’s concerned for our energy level and maybe even concerned for our health. And I have to tell you, if there’s any doubt, that I love this, and we all love this. I’m energized by this, and I still walk down the promenade and get a thrill, and I walk into the room at Union Station and I get goosebumps. And I’m so happy to see so many familiar faces or half-faces, as the case may be. I do love this job, and I love it because of you, because of you who are The Federalist Society, because of you who are the network, the real backbone of the organization. As I’m fond of saying, “To me, this event, the National Lawyer’s Convention, is like one great big family reunion. Everywhere you turn, there’s somebody you know, but these people you actually like.”

 

[Laughter]

 

      Since some others might be watching the video later, I want to say that I said that with deep love and affection for every single member of my extended family. So now, please join us across the hall for our closing reception, and until our next gathering, we are adjourned. Thank you.

 

     

 

 

5:30 p.m. - 7:00 p.m.
Closing Reception

2021 National Lawyers Convention

Palm Court Ballroom
The Mayflower Hotel
1127 Connecticut Avenue, NW
Washington, DC 20036

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All registrants are welcome to attend the Closing Reception.

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