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Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group Teleforum calls, become a Federalist Society member today at fedsoc.org.

 

 

Guy DeSanctis:  Welcome to The Federalist Society's Teleforum conference call. This afternoon, May 10, we discuss “Litigation Update: Wisconsin Equal Protection and Race Based Scholarships.”  My name is Guy DeSanctis, and I am Assistant Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those of the expert on today's call.

 

      Today we are fortunate to have with us Rick Esenberg, Founder, President and General Counsel, Wisconsin Institute for Law & Liberty. After Rick gives his opening remarks, we will turn to you, the audience, for questions, so be thinking of those as we go along and have them in mind for when we get to that portion of the call.

 

      With that, thank you for being with us today. Rick, the floor is yours.

 

Rick Esenberg:  Well, thank you very much, and thank you to The Federalist Society for providing me with this opportunity.

 

      As advertised, one of the cases that I want to talk about involves race-based scholarship program that exists in the state of Wisconsin. Since we announced the teleforum, we filed another case which challenges a loan forgiveness program which was passed as part of the recent stimulus package that forgives loans taken out by farmers, but only farmers of a particular race. I think that case raises many of the same issues, and I want to comment briefly on that as well. Both of these cases, in my view, either arise from or reflect a growing policy orientation towards a policy of equity rather than equal opportunity and of something called anti-racism rather than non-discrimination.

 

      Philosophically, this new view—not really a new view but, one that has become increasingly popular—rests on the premise that all racial disparities result from something called systemic or structural racism. The term is generally undefined and  unexplained past noticing some racial disparity in the provision of some government benefit or the outcome of some type of process such as college admission or employment.

 

      In this context, systematic racism or structural racism could mean a number of things. It could be well-hidden bias, could be bias that is inflicted and unknown to the person exhibiting it, could be something akin to disparate impact theory where there is some criteria being used which has a racially disparate impact without meeting some standard of adequate justification.

 

      But oftentimes, I think, in these situations it's something more than that. It may be an assumption that all disparities are the result of some type of generalized societal discrimination which has resulted in disparities in financial or social capital between racial groups. Or it could be nothing more than a relay blame of some disparate impact as a racist result.

 

      As the term is commonly used, none of these various potential meanings are often discussed, but I think it's fair to say that unlike traditional disparate treatment or disparate impact analysis, this new policy dispensation does not require the identification of a discreet discriminatory act of concrete policy bearing some close relationship to the observed discrimination. The current most prominent advocate of this way of viewing racial matters, Ibram X. Kendi, takes the position that all group disparities are a product of racial discrimination and that all require a race-based remedy. He writes that the only remedy for racist discrimination is anti-racist discrimination.

 

      That's the philosophy underlying what we see. From a policy perspective, it manifests itself in a greater willingness to be transparent about race-based remedies. We're all familiar with the way college admissions has worked in the past, the way the Supreme Court has sort of, kind of excused the use of race in college admission but insisted that there be a certain amount of opaqueness and indirectness about it. It's not what we're seeing.

 

      What we're seeing is, I believe, inconsistent with the law as the Supreme Court and other courts have come to define it. Courts have tended to view the right to be free of racial discrimination as an individual and not a group right. They have tended not to justify disparate racial treatment by a desire to achieve equal racial outcomes in balancing.

 

      They have been skeptical of the notion that general societal discrimination can ever justify treating persons differently on the basis of race, and in applying strict scrutiny have generally required, at least in the constitutional context, the discrimination be intentional, but in all context that it be relatively recent, that it has some connection to the allegedly discriminatory outcome that we see, and that whatever remedy is preferred be narrowly tailored to respond to that narrow connection and only that narrow connection.

 

      That brings us to the two cases that we wanted to talk about. Both of these are cases recently filed by my organization, the Wisconsin Institute for Law & Liberty. Both were filed in the state of Wisconsin. One challenges a program in the State of Wisconsin which isn't really new. It was enacted in the late 1980s. And the case, Rabiebna v. Higher Educational Aids Board, challenges what is called a Minority Undergrad Retention Scholarship Program. It provides scholarships to students that are currently in college but only provides them to certain select minority groups. You can apply for and receive one of these scholarships if you are black, American Indian, Hispanic, or if you immigrated from Laos, Vietnam, or Cambodia after 1975.

 

      So one of the interesting things about it is that many minority groups that are usually included in affirmative action programs, people who are Chinese, Japanese, Indian, North African, Pacific Islander, may not apply for this scholarship. In fact, the lead plaintiff in our case is a woman named Kiki Rabiebna, an immigrant from Thailand. Neither she nor her teenage son would be eligible to apply for this program.

 

      We have challenged the case in state court, a little bit unusual. We had our reasons for doing that, and we have made only a state constitutional claim proceeding under Article I, Section 1 of the Wisconsin Constitution which has been interpreted to provide equal protection roughly on par and subject to the same rules and elaborations as the federal courts provide in the context of the Fourteenth Amendment.

 

      There are some interesting twists to the case. One is a prior procedural requirement. Our plaintiffs are asserting taxpayer standing. Taxpayer standing, of course, is, with very narrow exception, unavailable in federal court. It is available in many state court systems, including the state of Wisconsin. The idea is that a taxpayer can challenge, and is harmed by and can challenge, the expenditure of state funds in a way which is unlawful. And so our clients assert  standing because it is unlawful to allocate scholarship funds on the basis of race, and they are harmed by that whether or not they, themselves, would be denied participation in the scholarship program. The case was recently filed. That state has not yet responded, and we'll stay tuned to see what happens.

 

      The other case, one that we filed the week before last, is a case called Faust v. Vilsack and, contrary to the Rabiebna case, this arises from a piece of legislation that was only recently passed that is part of the Biden administration's COVID stimulus or relief package. And it essentially provides that farmers with outstanding USDA guaranteed loans—and all small farmers have outstanding USDA loans; you really can't operate a farm without them—that some of those farmers who fall into the category of socially disadvantaged, a term that was lifted from an earlier statutory scheme, these socially disadvantaged farmers may have their loans forgiven plus, for lack of a better term, receive a 20 percent SPIFF. So you don't have to repay your outstanding loan and you get a little bit extra.

 

      But socially disadvantaged farmers is being defined as including only members of groups that have been discriminated against in the past, to wit: black, Hispanic, Asian, and American Indian farmers. White farmers need not apply. Well, actually, you don't have to apply. It looks like they're going to just to this automatically. But white farmers will not have their loans forgiven. Women will not have their loans forgiven. So this is really an extraordinarily transparent racial preference program, and one that, in some sense, goes beyond mere preference or thumb on the scale. It is, in fact, an absolute prohibition against providing benefits to white farmers. It is a completely segregated, if you will, government program.

 

      Now there is a history here. USDA—and I suspect the government will talk a lot about this—there is a history here of USDA being accused of discriminating over the years against black farmers. There was a litigation that was brought in the '90s called Pigford, and there was a settlement. It was a class action, and there was a settlement, and a great deal of money was disbursed. Some people claimed it was not enough. There was a voluntary additional disbursement of funds to claimants in 2010. But these settlements were different in the sense that, one, it had to show something. One had to show that one was affected in some way by this discrimination, keeping the payment of those claims more in line with the way that we have traditionally handled allegations of racial discrimination.

 

      Here, there is no narrow tailoring whatsoever. If one is a black farmer, one can have one's loan forgiven, even if, for example, you purchased your farm in 2017 and 2018 and there is no claim that you, yourself, have suffered discrimination in any USDA program. So it is extraordinarily broad. It is extraordinarily blatant, if you will, and, at least in our view and the view of our clients, completely inconsistent with the way courts have treated racial preferences in the past.

 

      That case was filed in the Eastern District in Federal Court, Eastern District of Wisconsin, on behalf of a number of farmers, some from Wisconsin, some from other states. And there will probably be some motion practice in the very, very near future. But at this point, again, nothing has happened and there have been no developments.

 

      So that is essentially an update on what we're doing. My organization, the Wisconsin Institute for Law & Liberty, has instituted an equality under the law project. We expect to be filing other cases like this, one probably as early as Wednesday. And we think that given the dispensation, in particular, of the Biden Administration, this is going to be a very, very fertile area of practice because I think that there is a really concerted attempt to go beyond what courts have permitted in the past, both in terms of the transparency and the breadth of racial preference programs. These are two examples, one is old, one is new, but I think we're going to see a lot of other new ones and litigation arising from it.

 

      So that basically concludes what I wanted to say. I’d be happy to respond if there are any questions or comments.

 

Guy DeSanctis:  Thank you, Rick. We have our first question.

 

Caller 1:  Thank you for the presentation. Very helpful. Can you explain in a public forum like this the considerations that went into filing the one case in state court while you filed the other case in federal court?

 

Rick Esenberg:  I think part of the concern that we had in the Rabiebna case had to do with the peculiar needs and situation of the clients that we had that permitted that case to be filed in state court and not federal court. We generally are interested in developing state constitutional law. We think it's underdeveloped. We practice a lot in our state supreme court. I think I have been up there five or six times this past term. And so it's not unusual for us to file something like that, particularly if it involves a challenge to a state program.

 

      Obviously, it's something we could have done in the Vilsack case, but we think that ultimately there has to be a federal consideration of the federal program, and so, particularly given the fact that we are emphasizing this kind of litigation in a way that we haven't in the past where we've sort of been more of a Wisconsin -- not quite Wisconsin only, but at least very, very Wisconsin-first organization, that's not the approach we're taking to these equal protection cases. And so both this case and some others that we are about to file will be federal court cases in different places.

 

Caller 1:  And so you rely exclusively on state law in order to avoid removal? Was that the idea?

 

Rick Esenberg:  In the Rabiebna case, yes, that's what we've done.

 

Caller 1:  Thank you. Helpful.

 

Guy DeSanctis:  Thank you for that question. Next question.

 

Caller 2:  Yes. Thanks very much. Sounds like noble causes. I wish you every success. Just a couple of questions. Number one, I know there was a teleforum, I don't know, a few weeks ago regarding litigation that seemed like it might be related with respect to Thomas Jefferson High School in Fairfax County or somewhere in northern Virginia. I wasn't sure if you were familiar with that case and familiar with any overlap related to it.

 

      And then with respect to the state law question with taxpayer standing -- and obviously if you're combining this to Wisconsin, I don't know if you would be raising or anticipating the other side raising federal constitutional issues which might force removal. I'm also assuming, therefore, that it wouldn't have any precedential value outside of Wisconsin or be able to be a ground for making any federal law related to the area.

 

Rick Esenberg;  Yeah, Rabiebna does not -- and I think from a federal perspective it's kind of a lay down case, but I think that of Vilsack, too. I don't know that the case will be removed because I -- in another life, I was a civil procedure professor, and the plaintiff is the master of his or her complaint. And asserting a -- I'm not sure that a federal defense could even be asserted here, but asserting a federal defense is not necessarily going to support removal. Here, I don't see any way in which a federal issue could be injected into the case in a way that would permit removal, so I don't think the case will be removed.

 

      It's absolutely true that precedential value is limited unless it's one of these cases that the US Supreme Court takes from a state supreme court. Nevertheless, we think that there is some value in getting good state constitutional law decisions, and, just as a general philosophical matter, we believe it's an underdeveloped area of the law. And the cases can be valuable, both for their intrinsic -- they resolve a particular dispute in a particular place, but also because there is a potential to get a well-reasoned decision that can be influential elsewhere.

 

      And so while I do think that most cases in this area are going to be filed in federal court, and including the cases that we file, I do think that there is room to file some of them in state court and get some development of the law by the higher courts of some of our states.

 

Guy DeSanctis:  Thank you for that.

 

Edward Greim:  Professor Esenberg, this is Eddie Greim at Graves Garrett in Kansas City.

 

Rick Esenberg:  How are you?

 

Edward Greim:  Hello. Good to hear you. And I'm going to give you two questions. If you've got time, maybe both; if not, you can just choose one. I'd be curious in both of them. The first one, on the federal side, has your research kind of disclosed any interesting circuit splits in this kind of -- I guess you're going down the City of Richmond type line of cases. Are there any kind of interesting circuit splits that you are already thinking about on some of the elements of the federal equal protection angle?

 

      And then the second question is, for those of us who do a fair amount of state court practice, are there any kind of hooks that we ought to be looking for in our state constitutions because some of these states copied each other with some provisions or a Bill of Rights that they enacted after the Civil War in the 20th century. Are there any little hooks that we ought to be looking for that maybe give us a different sort of equal protection test or something that's more robust than you can bring in a federal challenge?

 

Rick Esenberg;  I think that with respect to the first question, I think there is -- and how you articulate this, I think, is going to be a challenge for litigants, but I think that the farmers case in particular, and probably the scholarship case, too, come down to a question of narrow tailoring. And when I was in law school in the neo-Pleistocene era, we always went around mouthing the phrase that strict scrutiny was strict in theory but fatal in fact. And that might have been true back then. I think it's not true anymore. I think Adarand announced that that wasn't necessarily going to be the case in this area, and it hasn't been.

 

      And so I think that there are some differences in how strict, I guess, for lack of a better word, courts in different circuits have been with respect to scrutiny in this type of thing. And if we're going to see more policy initiatives like this where the government simply says, "Look, it's time for a racial reckoning. It's time for racial reconciliation," although sometimes it seems more like retribution, we're going to wind up focusing a lot more on what strict scrutiny means. And I think we are going to -- I think there is a difference among various courts and various circuits as to how that gets applied.

 

      With respect to state constitutions, I've always thought it would be interesting to bring an admissions case and see whether somebody could -- particularly if current law is going to stay the way it is, where schools are permitted to use race as a classification in admitting kids to college, could you challenge that under a state constitution and argue then for a more stringent interpretation of a state's guarantee equal protection? Now, if you look at what most state Supreme Courts say about the interpretation of cognate provisions, they'll say, "Well, we follow the U.S. Supreme Court." But it's the black letter law that they don't have to unless there's some Supremacy Clause problem, and they don't always do it.

 

      For example in my state, we have a case pending -- not we, although we filed an amicus brief, but there is a case pending in the U.S. Supreme Court now regarding the continued viability of Smith v. Employment Division. In the state of Wisconsin, we don't follow Smith v. Employment Division. Any substantial burden on religious practice is subject to strict scrutiny.

 

      And how you get a court to do that is tough. There are various theories, and, of course, there's always a potential, particularly in an area like this, that somebody will come back and try to assert some federal interest, and so you've got to pick your case in a way that minimizes the possibility that that can be done. But I've always thought that that would be an interesting case to bring.

 

Edward Greim:  Thank you.

 

Guy DeSanctis:  Thank you for those questions. At the moment, it doesn't appear that we have any more questions. Do you have anything else you'd like to go into? We have time.

 

Rick Esenberg:  No, I think I'm good.

 

Guy DeSanctis:  Okay. Well, on behalf of The Federalist Society, I want to thank our expert, Rick Esenberg, for the benefit of his valuable time and expertise today. And I want to thank our audience for calling in and participating. We welcome listener feedback by e-mail at [email protected]. As always, keep an eye on our website and your emails for announcements about upcoming Teleforum calls and virtual events. Thank you all for joining us today. We are adjourned.

 

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Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.