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Entries in Constitution (146)


CEI - Three States Join Constitutional Challenge to Dodd-Frank

New Orderly Liquidation Authority Threatens Financial Companies and Investors, Putting State Pension Funds at Risk Without Due Process


Washington, D.C., September 20, 2012 – The states of Oklahoma, South Carolina, and Michigan today joined a lawsuit challenging the constitutionality of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The states are asking the U.S. District Court for the District of Columbia to review the constitutionality of the Orderly Liquidation Authority, established under Title II of Dodd-Frank. The three states are joining the original plaintiffs in the lawsuit: State National Bank of Big Spring, Texas; the 60 Plus Association; and the Competitive Enterprise Institute.

“We must challenge Dodd-Frank to protect Oklahoma taxpayers and our financial stability. The law puts at risk the pension contributions and tax dollars that the people have entrusted us to protect,” Oklahoma Attorney General Scott Pruitt said. The Orderly Liquidation Authority (OLA) gives the Treasury Secretary the power to liquidate any financial company as along as the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve are in agreement.

“The new regulations do not stabilize our economy, they create greater uncertainty. As a result, States cannot allow our taxpayers, our investments or the Constitution to be subject to such financial risk. Dodd Frank replaces the rule of law with the rule of politics,” Attorney General of South Carolina, Alan Wilson, said. The unbridled power given to the OLA to seize assets of private companies is simply unconstitutional. If a large financial institution fails, holding state pension contributions and tax dollars, the states have very little ability to recover their citizens’ assets.

"Michigan's public-employee pension funds hold substantial fixed-income investments in large financial institutions," said Michigan Attorney General Bill Schuette.  "Dodd-Frank gives the U.S. Secretary of the Treasury essentially unlimited power - with no judicial or Congressional oversight - to pick winners and losers among creditors when these large financial institutions go bankrupt.  This lawsuit is necessary to safeguard Michigan's pension funds and protect current and future retirees."

Sam Kazman, General Counsel for one of the original plaintiffs, CEI, stated:  “Despite being called a reform measure, Dodd-Frank poses a massive threat to consumers, companies and the economy of this country.  The scope of that threat is clearly demonstrated by the decision of these three states to join our lawsuit, and we welcome their participation.”

The state attorneys general are challenging Title II of Dodd-Frank, which gives the Treasury Secretary the ability to liquidate financial companies with only 24 hours notice. There is no meaningful legal recourse for the company, there is an immediate gag order placed on all parties and it carries criminal penalties if violated; in short, this creates death panels for American companies. The private plaintiffs also are challenging the Financial Stability Oversight Council (Title I), the Consumer Financial Protection Bureau (Title X), and the validity of the Bureau Director’s appointment.

The lawsuit was originally filed in June 21, 2012.

> View a copy of the complaint at

> Information on the case and a copy of the filing can be found at


ALG's Daily Grind: Tying Obamacare in knots 

July 27, 2012

Tying Obamacare in knots

How to defund Obamacare.

Cartoon: Blame the paper

If guns cause murders, then…

Video: Financial giant Sandy Weill says 'Never mind' on superbanks

He once headed up Citigroup and worked to get laws in place to let banks, insurance companies and investment firms merge. Now he is changing his mind. It reminds us of a famed Saturday Night Live character.

Time for a Constitutional Moment

There are 23 cases left challenging another controversial mandate from Obamacare.


CEI - Net Neutrality Unconstitutional, Public Interest Groups Tell Appeals Court 

Washington D.C., July 24, 2012 — On July 23, TechFreedom and the Competitive Enterprise Institute, along with the Free State Foundation and the Cato Institute, filed a brief amici curiae (PDF) with the Court of Appeals for the D.C. Circuit arguing that the FCC’s 2011 “Preserving the Open Internet” Order is unconstitutional. By denying providers their constitutional rights, the groups argue, the FCC’s rule forces consumers to bear the costs of building tomorrow’s networks, foreclosing novel business models in which content companies share part of that burden.

"The FCC’s net neutrality rule violates both the First and Fifth Amendments: It compels Internet providers to speak and deprives them of their property rights without just compensation," said Ryan Radia, Associate Director of the Center for Technology & Innovation at the Competitive Enterprise Institute. “The problems the rule purports to solve are theoretical, but its impact on constitutional rights will be very real. Net neutrality regulation denies Internet providers their First Amendment right to choose what speech to allow on their networks, effectively compelling providers to convey all content companies’ messages—for free. Granting content companies nearly unfettered, free use of Internet providers’ private networks amounts to a permanent ‘virtual easement’."

The brief also rejects the FCC's claims of "ancillary" jurisdiction to regulate matters beyond what Congress has specifically assigned to the agency.

"We're asking the Court to rein in an agency that it's previously criticized for making sweeping claims of authority that would 'virtually free the Commission from its congressional tether,'" said Berin Szoka, President of TechFreedom. "There's no evidence to support the FCC's view that broadband and content providers are fundamentally at odds. But if broadband operators ever do abuse market power by blocking access to competitors, that's a problem existing antitrust laws can address. Those who think current antitrust mechanisms work too slowly should dust off the Digital Age Communications Act, a compromise proposal offered by The Progress & Freedom Foundation in 2005, allowing the FCC to issue rules on the basis of antitrust standards. But if the FCC can simply invent authority to regulate the Internet today, there is no limit to what it might do tomorrow."

The case is Verizon v. FCC (D.C. Cir. No. 11-1355) and this amicus brief is available here. John Elwood and Eric White of Vinson & Elkins LLP served as pro bono counsel on this brief, as they did on an amicus brief in which TechFreedom joined with CEI and Cato last year, challenging the FCC's indecency regulations.

For more on the constitutional violations of the FCC’s network neutrality rule, see:

• Randolph J. May, Net Neutrality Mandates: Neutering the First Amendment in the Digital Age, 3 I/S: A J. of Law and Pol’y for the Info. Soc’y 198, 209 (2007);

• Daniel Lyons, Virtual Takings: The Coming Fifth Amendment Challenge to Net Neutrality Regulation, 86 Notre Dame L. Rev. 66, 97 (2011).


ALG - The death of the U.S. Constitution 

June 28, 2012, Fairfax, VA—Americans for Limited Government President Bill Wilson today issued the following statement reacting to the Supreme Court's decision to uphold Obamacare:

"The U.S. Constitution died today.  The underlying hope and belief that our nation's founding document protected individual freedoms from an ever encroaching government is a thing of the past based upon this ruling.  It is inconceivable how these nine lifetime appointed jurists could have decided to keep a law that is such a blatant intrusion into each of our lives, but the result of their decision is that individuals can no longer rely on the federal government power being limited by anything other than the political pressure their individual elected representatives feel.  Ultimately, the Supreme Court has opted out of the battle to retain our freedoms, and has thrown in entirely with those who advocated for unlimited government authority.  It is truly a sad day for our nation."


NRO editorial: Roberts has "done violence" to Constitution

A new NRO editorial, “Chief Justice Roberts’s Folly,” discusses the Supreme Courts’ decision to uphold Obamacare, stating,

What the Court has done is not so much to declare the mandate constitutional as to declare that it is not a mandate at all, any more than the mortgage-interest deduction in the tax code is a mandate to buy a house. . . The Constitution does not give the Court the power to rewrite statutes, and Roberts and his colleagues have therefore done violence to it. If the law has been rendered less constitutionally obnoxious, the Court has rendered itself more so. Chief Justice Roberts cannot justly take pride in this legacy.

Chief Justice Roberts’s Folly

By The Editors

In today’s deeply disappointing decision on Obamacare, a majority of the Supreme Court actually got the Constitution mostly right. The Commerce Clause — the part of the Constitution that grants Congress the authority to regulate commerce among the states — does not authorize the federal government to force Americans to buy health insurance. The Court, in a 5–4 decision, refused to join all the august legal experts who insisted that of course it granted that authorization, that only yahoos and Republican partisans could possibly doubt it. It then pretended that this requirement is constitutional anyway, because it is merely an application of the taxing authority. Rarely has the maxim that the power to tax is the power to destroy been so apt, a portion of liberty being the direct object in this case.

What the Court has done is not so much to declare the mandate constitutional as to declare that it is not a mandate at all, any more than the mortgage-interest deduction in the tax code is a mandate to buy a house. Congress would almost surely have been within its constitutional powers to tax the uninsured more than the insured. Very few people doubt that it could, for example, create a tax credit for the purchase of insurance, which would have precisely that effect. But Obamacare, as written, does more than that. The law repeatedly speaks in terms of a “requirement” to buy insurance, it says that individuals “shall” buy it, and it levies a “penalty” on those who refuse. As the conservative dissent points out, these are the hallmarks of a “regulatory penalty, not a tax.”

The law as written also cuts off all federal Medicaid funds for states that decline to expand the program in the ways the lawmakers sought. A majority of the Court, including two of the liberals, found this cut-off unconstitutionally coercive on the states. The Court’s solution was not to invalidate the law or the Medicaid expansion, but to rule that only the extra federal funds devoted to the expansion could be cut off. As the dissenters rightly point out, this solution rewrites the law — and arbitrarily, since Congress could have avoided the constitutional problem in many other ways.

The dissent acknowledges that if an ambiguous law can be read in a way that renders it constitutional, it should be. It distinguishes, though, between construing a law charitably and rewriting it. The latter is what Chief Justice John Roberts has done. If Roberts believes that this tactic avoids damage to the Constitution because it does not stretch the Commerce Clause to justify a mandate, he is mistaken. The Constitution does not give the Court the power to rewrite statutes, and Roberts and his colleagues have therefore done violence to it. If the law has been rendered less constitutionally obnoxious, the Court has rendered itself more so. Chief Justice Roberts cannot justly take pride in this legacy.

The Court has failed to do its duty. Conservatives should not follow its example — which is what they would do if they now gave up the fight against Obamacare. The law, as rewritten by judges, remains incompatible with the country’s tradition of limited government, the future strength of our health-care system, and the nation’s solvency. We are not among those who are convinced that we will be stuck with it forever if the next election goes wrong: The law is also so poorly structured that we think it may well unravel even if put fully into effect. But we would prefer not to take the risk.

It now falls to the Republicans, and especially to Mitt Romney, to make the case for the repeal of the law and for its replacement by something better than either it or the health-care policies that preceded it. Instead of trusting experts to use the federal government’s purchasing power to drive efficiency throughout the health sector — the vain hope of Obamacare’s Medicare-cutting board — they should replace Medicare with a new system in which individuals have incentives to get value for their dollar. Instead of having Washington establish a cartel for the insurance industry, they should give individuals tax credits and the ability to purchase insurance across state lines. Instead of further centralizing the health-care system, in short, they should give individuals more control over their insurance.

Opponents should take heart: The law remains unpopular. Let the president and his partisans ring their bells today, and let us work to make sure that they are wringing their hands come November.

The complete text of the editorial follows. It can also be found on National Review Online at