The Supreme Court

Year in Review
2001-2002 Term
Compiled and Edited by S.M. Oliva

July 2002
© Copyright 2002 The Center for the Moral Defense of Capitalism.

All Rights Reserved. No part of this publication may be reproduced, stored

in a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the express writ-
ten consent of CMDC.
CMDC: The Supreme Court Year in Review, 2001-2002 3

Contents
4/ Introduction

5/ Executive Summary

6/ Overview of the U.S. Judiciary

8/ Economic Freedom Rankings

12/ Index of Cases Presented

13/ Best & Worst Cases of 2001-2002

14/ Major Decisions

20/ Other Decisions

26/ Preview of the 2002-2003 Term

29/ Conclusion

30/ About CMDC

“If one wishes to advocate a

free society (that is, capital-
ism) one must recognize that
its indispensable foundation
is the principle of individual
rights.”
- Ayn Rand, “Man’s Rights”
CMDC: The Supreme Court Year in Review, 2001-2002 4

Introduction By Nicholas Provenzo

Chairman, The Center for the Moral Defense of Capitalism

A proper government defines and protects the individual rights of its citizens. Under such a govern-
“Without justice ment, the courts play a crucial role; it is through the courts that men are able to settle disputes peaceably
being fully, freely, according to predetermined legal rules. It is these legal rules that guide the judiciary—both substan-
tively and procedurally—in achieving justice in the thousands of trial verdicts and appellate opinions
and impartially that are issued each day in a functioning society. It is also to these legal rules that citizens look to find
administered, neither their rights substantively defined, as well as to find the determinative, logical procedures that they must
follow in order to secure these rights in times of conflict.
our persons, nor our At the pinnacle of a proper judicial system is a supreme court—as it is in the American republic.
rights, nor our prop- The United States Supreme Court represents the final arbiter for disputes, whether they are between
individuals, corporations, or governments. It is charged with the mission of not only interpreting and
erty, can be pro- applying statutes, but it also has the solemn responsibility of interpreting the enumerated powers granted
tected. Call the form to the U.S. government under the Constitution. It is the Supreme Court’s fundamental task to ensure for
all Americans that the government’s exercise of its powers remains wedded solely to the principle that
of government what- animates the Constitution—the doctrine of individual rights.
ever you may, if Yet without a consistent understanding of the principle of individual rights, the Supreme Court (and
the lower courts) are rudderless in their interpretation of the Constitution. In the Center’s review of the
justice cannot be opinions issued during the Supreme Court’s October 2001 term , we expose a conflicted and inconsis-
equally obtained by tent Court. The Court itself ruled in favor of individual rights in only 55% of the cases in the past term;
the rest of its cases were adjudicated along lines that restricted rights and unjustifiably expanded the
all the citizens, high power of government.
and low, rich and In Tahoe Preservation Council v. Tahoe Planning Agency, for example, the Court equated property
development with the victimization of nature, promoting specious environmentalist claims and expand-
poor, it is a mere ing the scope of arbitrary government power against property owners. In United States v. Fior D’Italia,
despotism.” Inc., the Court allowed the Internal Revenue Service to continue using the “aggregate estimation”
method for taxing tip wages, although the results of this method were proven to be grossly inaccurate in
- Justice Joeseph Story determining an individual’s tax liability. In Ashcroft v. American Civil Liberties Union, the Court up-
held the “community standards” test for determining the legality of pornographic websites, providing
lower courts with a subjective, unworkable standard that squelches the right to free speech. The practi-
cal result is that merchants are left with no guidance on how to avoid sanctions under the law.
Although often portrayed as the great champions of the Constitution, the best individual justices,
Clarence Thomas and Antonin Scalia, voted in favor of individual rights only 75% of the time. In Board
of Education v. Earls, Justice Thomas held that random drug testing of public school students who
participate in extracurricular activities did not trigger Fourth Amendment protections against unreason-
able searches. Thomas justified the policy on the ground that it was “a reasonable means of furthering
the School District’s important interest in preventing and deterring drug use among its school children.”
And in City of Los Angeles v. Almeda Books, Inc., Justice Scalia concurred with the Court’s decision
permitting city governments to use zoning ordinances to prohibit businessmen from operating commer-
cial enterprises offering adult entertainment. Scalia believed that empirical studies finding a statistical
correlation between crime rates in certain urban areas and types of businesses empowered local govern-
ments to violate the rights of individuals to speak their views, to create businesses, and to engage in
freely chosen transactions. Sanctioning government coercion to eradicate drug use or control (indi-
rectly) adult entertainment businesses—at the cost of the rights of personal liberty, property, free con-
tract, and free speech—are hardly pro-individual rights positions.
Clearly there is a disconnect between the principle of individual rights and the Court’s voting record.
The Center considers this problem to be philosophic, reflecting the larger conflict in American culture
between the Founders’ view of individualism and freedom versus the modern (and now dominant)
belief in collectivism and state paternalism. As evidence of this sea change in American culture, in
slightly less than half the cases in which state paternalism conflicted with the rights of individuals, state
paternalism won.
The Center does not expect the Court to change the legal landscape in a single case or in a single
term, but it does expect the Court to lead this country in the right direction—a task it has yet to achieve.
Thus, the need for a focused assessment of the Court’s jurisprudence, appraising how the Court and
individual Justices perform according to the fundamental moral standard of each individual’s right to
life, liberty and property. In the end, the Center hopes that the analyses it provides in these annual
reports will aid in understanding both the principle of individual rights and how these rights are applied
and protected under the Constitution.
CMDC: The Supreme Court Year in Review, 2001-2002 5

Executive Summary
The Center for the Moral Defense of Capitalism (CMDC) is pleased to
present its first annual “Supreme Court Year in Review” and Economic Free-
dom Rankings of the justices of the Supreme Court. Following the end of
the Court’s October 2001 Term in June 2002, we compiled a list of the Court’s
most relevant decisions from the past year as they relate to economic and
individual freedom. From a final list of 29 opinions, we analyzed each deci-
sion, determined whether the Court’s position was consistent with the prin-
ciples of individualism and capitalism, and assigned each justice a rating
based on how often they voted how CMDC would have decided the cases.
This survey includes summaries of the rulings included in our “Economic
Freedom Ranking,” as well as information on other key decisions of the
Court’s Term and summaries of the issues the justices have already decided
to hear in the October 2002 Term. Among the major decisions included in
our rankings are:

* Thompson v. Western States Medical Center, where the Court ex-

panded the First Amendment’s protection for “commercial” speech against
government attempts to keep customers ignorant of products.

* Tahoe Preservation Council v. Tahoe Planing Agency, where the

justices ignored the property rights of owners and held that a six-year “mora-
toria” banning individuals from using their property did not require com-
pensation from the government under the Fifth Amendment.

* Zelman v. Simmons-Harris, where the justices, by a 5-4 vote, up-

held the constitutionality of a limited school voucher program in Cleveland,
Ohio, from a First Amendment challenge.

* Board of Education v. Earls, where the Court found the Fourth “We must never forget that it
Amendment could be ignored if public school districts declared the exist-
ence of a “drug problem,” thereby permitting warrantless drug testing of
is a constitution that we are
students. expounding.”
- Chief Justice John Marshall
* Three cases where the Court further restricted the legislative le-
viathan of the Americans with Disabilities Act, defending the prerogatives
of employers to manage their companies free from government interference.

Associate Justice Clarence Thomas was ranked first among the justices
for his commitment to upholding the economic freedoms of Americans, even
though he did author two “major opinions” which substantially deviate from
his general commitment to individual rights. He was followed in our rankings
by Justice Antonin Scalia, Justice Sandra Day O’Connor and Justice An-
thony Kennedy. Justice Stephen Breyer, an appointee of former President
Clinton, scored our lowest rating, agreeing with CMDC just 35% of the
time. By contrast, justice Thomas and Scalia agreed with our position in
75% of the cases analyzed from this Term.
CMDC: The Supreme Court Year in Review, 2001-2002
“Justice, sir, is the great
interest of man on earth.”
- Sen. Daniel Webster
Overview of the Supreme
Court & Federal Judiciary
Article III of the U.S. Constitution
states, “The judicial Power of the United
States, shall be vested in one Supreme
Court, and in such inferior Courts as the
Congress may from time to time ordain and
establish.” Congress has the authority to
determine the number of justices which
constitute the Supreme Court as well as the
scope of the Court’s appellate jurisdiction.
The original Supreme Court, created in
1789, had six justices, which was expanded
to nine in the mid-19th Century. Supreme
Court justices, like all federal judges ap-
pointed under Article III, hold their posi-
tions on “good behavior,” a constitutional
phrase meaning life tenure. A federal judge
may only be forcibly removed through the
impeachment process of indictment by the
House of Representatives and trial and con-
viction by a two-thirds vote of the Senate.
Under the current judicial organiza-
tional scheme approved by Congress, there
are two levels of “inferior Courts” to the
Supreme Court. At the lowest level are the
U.S. District Courts, which actually con-
duct trials of law and fact. For purposes of
these courts, the nation is divided into 94
judicial districts, each of which contains a
District Court with a varying number of
judges. Every state has at least one district
court, and larger states are divided into two
or more districts. New York, for example,
is divided into four districts: Eastern,
Southern, Western and Northern. District
Courts conduct jury and bench trials in both
criminal and civil cases. Each judicial dis-
trict also has a separate Bankruptcy Court
to handle proceedings under federal bank-
ruptcy law, a power reserved exclusively
to the federal government under Article I
of the Constitution.
Parties who lose at trial in a District
Court may have the court’s decision re-
viewed in a United States Court of Appeals.
Once again, the U.S. is divided into geo-
graphic districts, called “circuits” in this
case, and each circuit has a court of ap-
peals. The fifty states and five U.S. territo-
ries are each assigned to one of eleven cir-
cuit couts, numbered First through Elev-
6
enth. The U.S. Court of Appeals for the
Fourth Circuit, for example, handles ap-
peals from the District Courts in Maryland,
Virginia, North Carolina and South Caro-
lina. The Court itself is based in Richmond,
Virginia, though it generally may hear cases
in any part of the circuit.
Two additional U.S. Courts of Appeal
handle special jurisdictions. The U.S. Court
of Appeals for the District of Columbia
Circuit handle appeals from the D.C. Dis-
trict Court, which includes a number of
appeals of federal regulatory agency deci-
sions, which are generally heard in the D.C.
District Court. The U.S. Court of Appeals
for the Federal Circuit hears appeals from
anywhere in the nation which relate to cer-
tain subject matters assigned by Congress,
such as patents. This court is located in
Washington, D.C.
In this document, a court of appeals will
be referred to by circuit, i.e. “First Circuit,”
“Tenth Circuit,” “Federal Circuit.”
There are other federal courts, such as
the Court of Military Appeals, but they are
not relevant to the scope of this review.
The Supreme Court has both original
(trial) and appellate jurisdiction. In either
case, it is the court of last resort, from which
no further appeal is possible. The Court’s
trial jurisdiction is limited by the Constitu-
tion to cases affecting ambassadors and
“public ministers,” and, more commonly,
cases where one state sues another. These
cases in recent times tend to involve bor-
der disputes, and are usually heard before
a “special master” appointed by the Su-
preme Court. The special master gathers
evidence and issues a report to the Court,
which can then adopt, amend or reject his
findings before delivering a final ruling.
In most cases, however, the Cout acts
pursuant to its appellate jurisdiction. In a
limited number of cases the Court hears
direct appeals from the district courts. This
occurs when Congress passes a law which
provides for such direct appeal without
having to go through a U.S. Court of Ap-
peals. In the 2001 Term, the case of Utah
v. Evans came on direct appeal from the
CMDC: The Supreme Court Year in Review, 2001-2002
District of Utah, because it involved the
apportionment of representatives, a matter
which Congress has designated for direct
appeal. Direct appeals are matters-of-right,
which means the Supreme Court must hear
them.
The more common form of appeal, how-
ever, are the discretionary ones, where the
Court must grant a writ of certiorari for
the case to be heard. These writs, literally
an order for the lower court to send up its
record of the proceedings below, are issued
to a U.S. Court of Appeals or to the high-
est appellate court of an individual state,
such as the Supreme Court of Virginia or
the Maryland Court of Appeals. The Court
grants certiorari solely at its discretion.
Under Court rules, four of the nine justices
must vote in favor of granting certiorari for
the appeal to be heard.
Supreme Court Rule 10 establishes the
general guidelines used by the justices in
deciding whether to grant certiorari. First,
the Court looks for whether a decision of
one U.S. court of appeals on an “important
matter” is in conflict with the decision of
another court of appeals. For example, if
the Seventh Circuit were to rule school
prayer unconstitutional, but the Fourth Cir-
cuit were to uphold the practice, the Su-
preme Court would likely grant review to
settle the “circuit conflict.” Second, the
Court looks to whether a decision of a state
supreme court on a “federal question”—
one arising under the Constitution or a law
enacted by Congress—conflicts with the
decision of another state supreme court or
a U.S. court of appeals. Third, the Court
will likely review a question of federal law
which has not previously been decided by
the Supreme Court, “but should be,” or, al-
ternatively, has been decided, but a lower
court has then issued a ruling which con-
flicts with the Supreme Court’s decision.
When certiorari is granted, the case is
placed on the calendar for oral argument
before the Court, and each party is in-
structed to prepare a written brief detail-
ing their arguments. Non-parties to the case
may be permitted to file supplemental
briefs as amicus curiae, or a “friend of the
Court.” If the case involves the constitu-
tionality of a federal law, the United States
will be asked by the Court to submit a brief
and participate in oral argument, if the fed-
eral government was not a named party to
7
the suit. In all cases where the U.S. gov-
ernment appears before the Court, it is rep-
resented by the Solicitor General, an of-
ficer of the Department of Justice, or one
of his deputies.
Oral arguments take place between
October and April in two-week blocks.
Each case typically is allotted one hour for
argument, equally divided between both
sides. If the United States is participating
as an amicus curiae they will usually di-
vide oral argument time with the side they
are supporting.
The Court releases judgments and opin-
ions at its discretion, but almost all cases
argued in a Term are decided by June. The
Court’s Term officially runs from the first
Monday in October until the following
October, although for practical purposes,
the Court begins their new docket year on
July 1.
If the Chief Justice is in the majority on
a case, he will assign himself or another
justice to write the Court’s opinion. If the
Chief Justice is in the dissent, then the se-
nior justice in the majority assigns the
Court’s opinion. The same procedure gen-
erally holds true for the dissent, although
multiple dissenting and concurring opin-
ions have become commonplace.
“The complete independence
In some cases, a majority of the Court of the courts of justice is
will agree on the judgment of a case but peculiarly essential in a
less than five justices will sign on to the
majority opinion. In these cases, the plu- limited Constitution.”
rality opinion is announced as the princi- - Alexander Hamilton
pal statement from the Court, but it is not
technically binding precedent on the lower
courts, since a majority did not concur with
its reasoning.
A final note about the U.S. courts of
appeal. Most cases heard before these
courts are decided by three-judge panels,
not by the full court of appeals. In rare
cases, the entire court will hear the case on
an important subject (except the Ninth Cir-
cuit, which has 23 judges; they hear such
en banc appeals in 11 judge panels). Rul-
ings by a court of appeals is only consid-
ered binding precedent in the states cov-
ered by that circuit. Other circuits are free
to decide similar cases differently, and they
often do, enabling the U.S. Supreme Court
to get a good idea of what questions re-
quire their final judgment.
CMDC: The Supreme Court Year in Review, 2001-2002
“This hand, to tyrants ever
sworn the foe, For Freedom
only deals the deadly blow;
Then sheathes in calm repose
the vengeful blade, For gentle
peace in Freedom’s hallowed
shade.”
- John Quincy Adams
Rating the Justices:
In Support of Freedom
In the October 2001 Term, the Su-
preme Court granted less than 100 writs
of certiorari out of more than 8,000 pe-
titions. From these writs, 84 written
opinions were issued on behalf of the
Court. CMDC has selected and analyzed
29 of these opinions, and has assigned
each justice a ranking based on the per-
centage of cases in which their votes
agreed with the position of CMDC.
Cases were selected based on exam-
ining the legal question presented to the
Court in the petition for certiorari. If the
question dealt with a substantial right of
an individual to voluntarily contract or
associate with others, we generally in-
cluded it in our survey. Some of the cases
selected did not deal directly with busi-
ness or economic matters, but the fact
they addressed a substantive individual
right made them worthy of inclusion
here.
Of the cases selected, 11 were desig-
nated by CMDC as “major opinions.”
These cases will be analyzed in greater
detail because of their overriding impor-
tance to the American public, and be-
cause they most clearly and concisely
deal with individual freedoms.
Criminal cases were excluded from
our analysis. Although many of these
cases dealt with important issues of pub-
lic interest, we did not feel their inclu-
sion here was appropriate, because our
concern was examining how the Court
dealt with the constitutional rights of
individuals to engage in voluntary trans-
actions among themselves. Criminal
rights cases, by definition, deal with
matters of due process within the con-
fines of the criminal court system.
We also excluded from consideration
those civil appeals which dealt strictly
with procedural or jurisdictional issues,
unless these questions directly affected
a substantive right or rights. For ex-
ample, we excluded the case of Utah v.
Evans, which was a constitutional chal-
lenge to the conduct of the 2000 U.S.
Census; however, we included
8
JPMorgan Chase Bank v. Traffic Stream
(BVI) Limited, because it dealt with a
jurisdictional question that went to the
integrity of contract law.
After reviewing the case and decid-
ing whether the Court’s decision sup-
ported CMDC’s view of the question
presented,we scored each member of the
Court on the basis of the percentage of
times they voted as we would have. In
one case we examined, US Airways v.
Barnett, we agreed with two of the four
dissenting justices, but not the other two
dissenters or the majority decision. This
was because although we supported the
Court’s judgment in reversing the court
of appeals, their reasoning was so ex-
cessively flawed as to render the impact
of the judgment meaningless.
On the following pages, we present
the justices of the Court in the order
which they were ranked based on our
“economic freedom” scores. If the ac-
tual percentages produced a tie, we used
a tiebreak consisting of the number of
opinions authored by the justice that
CMDC concurred with. Where a tie re-
mained, we used the number of major-
ity opinions agreed with.
The 11 opinions we classified as
“major” were given no greater weight in
determining the justices’ score or
rankings. The “major” classification was
simply designed to highlight certain
cases to you, the reader, in reviewing the
work of the Term.
Finally, the following is a breakdown
of the 29 opinions by author:
O’Connor 6
Kennedy 5
Thomas 5
Stevens 4
Rehnquist 3
Breyer 2
Souter 2
Ginsburg 1
Scalia 1
CMDC: The Supreme Court Year in Review, 2001-2002
1. Justice Clarence Thomas
Percentage: 75% (22 of 29 cases)
Majority Opinions authored:
*Barnhart v. Sigmon Coal Co.
*J.E.M. Ag Supply v. Hi-Bred Pioneer
*Rush Prudential HMO v. Moran
Ashcroft v. ACLU
Board of Education v. Earls
2. Justice Antonin Scalia
Percentage: 75% (22 of 29 cases)
Majority Opinions authored:
*Minnesota Republican Party v. Kelly
3. Justice Sandra Day O’Connor
Percentage: 60% (17 of 28 cases)
Majority Opinions authored:
*BE&K Construction Co. v. NLRB
Los Angeles v. Alameda Books
*Thompson v. Western States Med. Ctr.
*Toyota Manufacturing v. Williams
United States v. Craft
United States v. Fior D’Italia
9
Nominated July 1, 1991, by President Bush,
confirmed by the Senate October 15, 1991,
by a vote of 52-48. Succeeded Justice
Thurgood Marshall. Previously served as a
judge of the U.S. Court of Appeals for the
District of Columbia Circuit.
Principal Dissents authored:
*EEOC v. Waffle House
*United States v. Craft
Nominated June 17, 1986, by President
Reagan, confirmed by the Senate September
17, 1986, by a vote of 98-0. Succeeded Jus-
tice William Rehnquist. Previously served as
a judge of the U.S. Court of Appeals for the
District of Columbia Circuit.
“With reasonable men, I will
Principal Dissents authored: reason; with human men I
*Columbus v. Ours Garage
*U.S. Airways v. Barnett will plead; but to tyrants I
give no quarter, nor waste
arguments where they will
certainly be lost.”
- William Lloyd Garrison
Nominated July 7, 1981, by President Reagan,
confirmed by the Senate September 28, 1981,
by a vote of 99-0. Succeeded Justice Potter
Stewart. Previously served as a judge of the
Arizona Court of Appeals.
Principal Dissents authored:
*Chickasaw Nation v. United States
Ragsdale v. Wolverine World Wide, Inc.
* Denotes opinions supported by CMDC
CMDC: The Supreme Court Year in Review, 2001-2002
“The enumeration in the
Constitution, of certain
rights, shall not be construed
to deny or disparage others
retained by the people.”
- IX Amemdment
4. Justice Anthony Kennedy
Rating: 58% (17 of 29 cases)
Majority Opinions authored:
*Festo v. SMC
*Owasso School District v. Falvo
*Ragsdale v. Wolverine World Wide
*Ashcroft v. Free Speech Coalition
NCTA v. Gulf Power Co.
5. Justice David Souter
Rating: 58% (17 of 29 cases)
Majority Opinions authored:
*JPMorgan Chase Bank v. Traffic Stream
*Chevron USA v. Echzabal
6. Chief Justice William Rehnquist
Rating: 58% (17 of 29 cases)
Majority Opinions authored:
*Gonzaga University v. Doe
*HUD v. Rucker
*Zelman v. Simmons-Harris
10
Nominated November 24, 1987, by President
Reagan, confirmed by the Senate February
3, 1988, by a vote of 97-0. Succeeded Jus-
tice Lewis Powell. Previously served as a
judge of the U.S. Court of Appeals for the
Ninth Circuit.
Nominated July 25, 1990, by President Bush,
confirmed by the Senate October 2, 1990, by
a vote of 90-9. Succeeded Justice William
Brennan. Previously served as a judge of the
U.S. Court of Appeals for the First Circuit.
Principal Dissents authored:
*Los Angeles v. Alameda Books
*United States v. Fior D’Italia, Inc.
Zelman v. Simmons-Harris
Nominated October 22, 1971, by President Nixon,
confirmed by the Senate December 10, 1971, by a
vote of 68-26. Succeeded Justice John Marshall
Harlan. Elevated to Chief Justice by President
Reagan on June 17, 1986, confirmed by the Sen-
ate September 17, 1986, by a vote of 65-33. Suc-
ceeded Chief Justice Warren Burger. Previously
served as U.S. assistant attorney general.
CMDC: The Supreme Court Year in Review, 2001-2002
7. Justice John Paul Stevens
Percentage: 48% (14 of 29 cases)
Majority Opinions authored:
EEOC v. Waffle House
New York v. FERC
Tahoe Pres. Council v. Tahoe RPA
*Watchtower Society v. Stratton
8. Justice Ruth Bader Ginsburg
Percentage: 44% (13 of 29 cases)
Majority Opinions authored:
Columbus v. Ours Garage
9. Justice Stephen Breyer
Percentage: 35% (10 of 29 cases)
Majority Opinions authored:
Chickasaw Nation v. United States
US Airways v. Barnett
11
Nominated November 28, 1975, by President
Ford, confirmed by the Senate December 17,
1975, by a vote of 98-0. Succeeded Justice
William Douglas. Previously served as a
judge of the U.S. Court of Appeals for the
Seventh Circuit.
Principal Dissents authored:
Barnhart v. Sigmon Coal Co.
Gonzaga University v. Doe
Minnesota Republican Party v. Kelly
Nominated June 14, 1993, by President
Clinton, confirmed by the Senate August 3,
1993, by a vote of 96-3. Succeeded Justice
Byron White. Previously served as a judge of “Yesterday the greatest ques-
the U.S. Court of Appeals for the District of
Columbia Circuit. tion was decided which ever
was debated in America; and
Principal Dissents authored: a greater perhaps never was,
*Board of Education v. Earls
Minnesota Republican Party v. Kelly
nor will be, decided among
men. A resolution was passed
without one dissenting
colony, that these United
Colonies are, and of right out
to be, free and independent
Nominated May 13, 1994, by President states.”
Clinton, confirmed by the Senate July 29,
1994, by a vote of 87-9. Succeeded Justice
- John Adams (July 3, 1776)
Harry Blackmun. Previously served as a
judge of the U.S. Court of Appeals for the
First Circuit.
Principal Dissents authored:
Thompson v. Western States Med. Ctr.
CMDC: The Supreme Court Year in Review, 2001-2002 12

Index of Cases Presented

nor

rg
ist

dy
s

Ginsbu
Steven

Thoma
Souter

Breyer
Renqu

O’Con

Kenne
Scalia
Ashcroft v.
American Civil Liberties Union X
“The Republican form of Board of Education of Pottawatomie
County v. Earls X X X X
government is the highest BE&K Construction Co.
v. Nat’l Labor Relations Bd. X X X X X X X X X
form of government: but Chase Manhattan Bank
X X X X X X X X X
because of this it requires the v. Traffic Stream (BVI) Ltd.
Chevron USA, Inc.
X X X X X X X X X
highest type of human na- v. Echazabal
Chickasaw Nation
X X
ture—a type nowhere at v. United States
City of Columbus
present existing.” v. Ours Garage & Wrecker Service X X
EEOC
X X X
- Herbert Spencer v. Waffle House, Inc.
Festo Corp.
v. Shoketsu Kinzou Kogyo Co. X X X X X X X X X
Gonzaga University
v. Doe X X X X X X X
Barnhart
v. Sigmon Coal Co. X X X X X X
Dept. of Housing & Urban Development
v. Rucker X X X X X X X X R
J.E.M. Ag Supply
v. Pioneer Hi-Bred Int’l X X X X X X X
Los Angeles
v. Alameda Books, Inc. X X X X
National Cable Television Ass’n
v. Gulf Power Co. R
New York
v. Federal Energy Regulatory Comm’n
Owasso Indep. School District
v. Falvo X X X X X X X X X
Ragsdale
v. Wolverine World Wide, Inc. X X X X X
Ashcroft
v. Free Speech Coalition X X X X X X X
Republican Party of Minnesota
v. Kelly X X X X X
Rush Prudential HMO, Inc.
v. Moran X X X X
Tahoe-Sierra Preservation v. Tahoe
Regional Planning
X X X
Thompson
v. Western States Medical Center X X X X X
Toyota Motor Manufacturing
v. Williams X X X X X X X X X
United States
v. Craft X X X
United States
v. Fior D’Italia X X X
US Airways, Inc.
v. Barnett X X
Watchtower Bible & Tract Society v.
Stratton X X X X X X X X
Zelman
v. Simmons-Harris X X X X X

X denotes a vote in favor of CMDC's position.

R denotes the Justice recused themselves.
CMDC: The Supreme Court Year in Review, 2001-2002
Thompson v. Western States Medical Center
Decided April 29, 2002, by a vote of 5-4.
O’Connor for the Court, Thomas concur-
ring, Breyer in dissent. This case involves
“drug compounding,” a process whereby a
pharmacist produces customized medica-
tion for a patient by combining or altering
other drugs. In 1997, Congress federalized
the regulation of drug compounding as part
of a bill amending the powers of the Food
and Drug Administration. Under this law,
compounded drugs may be produced with-
out having to gain regulatory approval by
the FDA, but there are a number of restric-
tions placed on the distribution of such
drugs.
One such restriction is that compounded
drugs must be produced “unsolicited,”
meaning pharmacists are banned from ad-
vertising the compounding of a particular
drug. A group of pharmarcists filed suit,
claiming this was an unconstitutional re-
striction of speech protected under the First
Amendment.
Affirming the Ninth Circuit’s decision,
the Supreme Court agreed with the phar-
macists that the restriction on advertising
was unconstitutional. Justice O’Connor,
writing for the Court, said the FDA’s inter-
est in preventing the large-scale marketing
of unapproved compounded drugs did not
outweigh the pharmacists right to engage
in protected commercial speech, such as
advertising.
Justice O’Connor also rejected the con-
tention of Justice Breyer, in his dissenting
opinion, that the government had a legiti-
mate fear of people asking their doctors to
prescribe medically unnecessary com-
pounded drugs, presumably as the result
of advertising. Not only does the govern-
ment not advance that argument in this
case, but Justice O’Connor also notes that
such a “paternalistic” view of the
government’s role in regulation runs con-
trary to the Court’s own precedents on the
issue of commercial speech. In addition,
such an approach would permit the gov-
ernment, as it did here, to prevent even
useful forms of speech involving com-
13
Best of the Term
pounded drugs: “For example,” Justice
O’Connor writes, “a pharmacist serving a
children’s hospital where many patients are
unable to swallow pills would be prevented
from telling the children’s doctors about a
new development in compounding that al-
lowed a drug that was previously available
only in pill form to be administered another
way.”
In a one paragraph concurring opinion,
Justice Thomas said that while he agreed
with the Court’s decision, he continued to
believe that it is inappropriate to continue
treating “commercial speech” as a separate
entity from “political speech” which is en-
titled to greater amounts of government
regulation.
Justice Breyer, joined by the Chief Jus-
tice and justices Stevens and Ginsburg in
dissent, says that the statute’s ban on ad-
vertising “directly advances” the
government’s legitimate interest “in pro-
tecting the health and safety of the Ameri-
can public,” because to permit the adver-
tising of compounded drugs would essen-
tially allow “untested” medications (un-
tested by the FDA, that is, not by the phar-
macists) to enter the marketplace. Justice
Breyer goes on to say that he can find no
“less restrictive” way for the public to be
protected from this problem other than a “We have previously rejected the
total ban on advertising. notion that the Government has
CMDC agrees with the Court’s decision and an interest in preventing the
opinion here, and we reject the nonsensical rea-
sons offered by the dissent in support of the
dissemination of truthful commer-
advertising ban. We also support Justice Tho- cial information in order to
mas’ viewpoint that the Court should abandon prevent members of the public
its overall framework for analyzing “commer- from making bad decisions with
cial speech” cases—a framework that em-
ploys an arbitrary three-prong test to assess the information.”
the ‘validity’ of a government’s interest in
- Justice Sandra Day O’Connor
regulating private speech of a commercial
nature —and instead treat all speech equally Thompson v. Western States
under the First Amendment. In the interim,
however, the Court’s analysis in this case pro-
vides a useful continuation of the movement
away from paternalistic attempts by the gov-
ernment to dictate policy outcomes by keep-
ing the public ignorant.
CMDC: The Supreme Court Year in Review, 2001-2002
“For over half a decade
petitioners were prohibited
from building homes, or any
other structures, on their
land. Because the Takings
Clause [of the Fifth Amend-
ment] requires the govern-
ment to pay compensation
when it deprives owners of all
economically viable use of
their land, and because a
ban on all development
lasting six years does not
resemble any traditional
land-use planning device, I
dissent.”
- Chief Justice William Rehnquist
Tahoe-Sierra Preservation v.
Tahoe Regional Planning
(dissent)
Worst of the Term
Tahoe-Sierra Preservation Council, Inc. v. Tahoe
Regional Planning Agency
Decided April 23, 2002, by a vote of 6-3.
Stevens for the Court, Rehnquist and Thomas
in dissent. In 1969, Congress created the
Tahoe Regional Planning Agency (TRPA) to
“halt increasing environmental damage to
Lake Tahoe,” which covers parts of Nevada
and California. In 1980, TRPA was given the
authority to restrict development of private
property in the Tahoe Region “until a new
regional plan was developed.” Pursuant to this
authority, TRPA prohibited development on
certain parcels of land, and and imposed a
temporary moratoria on other parcels. Vari-
ous lawsuits were filed in response to the ul-
timate regional plan proposed in 1984, one
by the State of California (seeking greater
land-use controls) and another by property
owners, who sought an injuction against
TRPA, as well as monetary damages for vio-
lation of the Takings Clause of the Fifth
Amendment, which reads, “nor shall private
property be taken for public use, without just
compensation.”
The U.S. District Court for Nevada found
for the property owners, and ordered TRPA
to compensate the landholders for denying
them the right to use and develop their land.
On appeal, the U.S. Ninth Circuit in San Fran-
cisco reversed, saying that a “moratorium” like
the one employed by TRPA did not violate
the Takings Clause. Circuit Judge Stephen
Reinhardt, writing for a unanimous three-
judge panel, wrote: “Because the temporary
development moratorium enacted by TRPA
did not deprive the plaintiffs of all of the value
or use of their property, we hold that it did
not effect a categorical taking. In reaching this
conclusion, we preserve the ability of local
governments to do what they have done for
many years — to engage in orderly, reason-
able land-use planning through a considered
and deliberative process. To do otherwise
would turn the Takings Clause into a weapon
to be used indiscriminately to penalize local
communities for attempting to protect the
public interest.” For Reinhardt, the protec-
tions provided by the Constitution are viewed
as “weapons” to be squleched.
The Supreme Court affirmed the Ninth Cir-
cuit, holding that the property owners were
not entitled to any compensation under the
14
Fifth Amendment. Justice Stevens, writing for
the Court, said that since the moratoria was
only enacted to give local planners time to
come up with a regional development policy,
there was no government “taking” of land as
defined by the Constitution. The Court said
“fairness and justice” would not be served by
“categorically” requiring that any govern-
ment-imposed moratoria on private land use
be accompanied by compensation to the af-
fected owners.
In dissent, Chief Justice Rehnquist argued
that “a ban on all development lasting almost
six years” could not be considered a legitmate
tool of land-use planning, and that compen-
sation was required by the Takings Clause.
The Chief Justice said the majority miscalcu-
lated the relevant length of the moratoria, im-
properly accepting the Ninth Circuit’s deter-
mination that the effective ban on land use
was only 32 months. In any event, the Chief
Justice wrote, the Court’s own precedents “re-
jects any distinction between temporary and
permanent takings when a landowner is de-
prived of all economically beneficial use of
the land.”
CMDC finds this case baffling, because
we believe the Constitution is clear on these
matters. Government (or “the public”) does
not have a right to arbitrarily deny individu-
als the use and benefit of their private prop-
erty. When the government has a legitimate
need to appropriate private property (such as
for reasons of national defense), it is required
to compensate the owner for his loss. Justice
Stevens’ opinion indicates that the main im-
petus for the violation of private property
here is to prevent Lake Tahoe from turn-
ing green, a condition which he alterna-
tively says will persist for “eternity” or
maybe “700 years” at best. Regardless of
how long the lake may be “green and
opaque,” the only relevant question is
whether this impending “disaster” gives the
government special license to dispense
with Fifth Amendment pleasantries. We be-
lieve that it does not, and consquently we
disagree with the Court’s holding and opin-
ion, and endorse the dissent authored by
the Chief Justice and joined by Justice
Scalia and Justice Thomas.
CMDC: The Supreme Court Year in Review, 2001-2002
Ashcroft v. American Civil Liberties Union,
Decided May 13, 2002, by a vote of 8-1. Thomas
announced the judgment of the Court, and issued
a partial majority opinion; O’Connor, Breyer and
Kennedy concurring, Stevens in dissent. Follow-
ing the Court’s invalidation of certain provisions
of the 1996 Communications Decency Act, Con-
gress enacted the Child Online Protection Act.
COPAattempts to ban minors from being exposed
to pornography via the Internet, by subjecting
Internet sites to a so-called “community standards”
test for decency. The ACLU filed suit seeking to
declare COPA unconstitutional on its face for em-
ploying the “community standards” test.
The Court declined to do so, vacating the Third
Circuit’s judgment that held the test to be consti-
tutionally invalid. The controlling portion of Jus-
tice Thomas’s opinion is limited, since a majority
of the Court did not concur with it. This led to four
separate opinions among the eight justices voting
to reverse the Third Circuit. Justice Thomas re-
jected the ACLU’s claim that “community stan-
dards” would subject the entire Internet to the mo-
rality of the most puritanical elements of Ameri-
can society. He argued that the variation in de-
cency standards from locality to locality was not
sufficient enough to justify the ACLU’s concerns.
Justice O’Connor took a more strident po-
sition, saying, “I would prefer that the Court
resolve the issue before it by explicitly adopt-
ing a national standard for defining obscenity
on the Internet.” Justice Breyer took the posi-
tion that “I believe that Congress intended the
statutory word ‘community’ to refer to the
Nation’s adult community taken as a whole,
not to geographically separate local areas.” Fi-
nally, Justice Kennedy, joined by justices Souter
and Ginsburg, said the Court should have
punted the issue back to the Court of Appeals,
to allow them to “undertake a comprehensive
analysis” of the true scope of COPA’s provisions.
The lone dissenter in all this was Justice
Stevens, who agreed with the ACLU (and
CMDC), saying that “community standards”
was a sign of impending doom for the Internet:
“In the context of the Internet, however, com-
munity standards become a sword, rather than
a shield. If a prurient appeal is offensive in a
puritan village, it may be a crime to post it on
the World Wide Web.”
CMDC disagrees with the Court’s holding,
and would concur with Justice Stevens’ dissent-
ing opinion. We believe the “community stan-
dards” test to be an assignment of collective
rights forbidden by the First Amendment.
15
Major Decisions
Board of Education of Independent School
District No. 92 of Pottawatomie County v.
Earls, Decided June 27, 2002, by a vote of
5-4. Thomas for the Court, Breyer concurring,
O’Connor and and Ginsburg in dissent. In this
case, the Court further destroyed the constitutional
rights of students in the context of the public school
system. At issue here was an Oklahoma school
district policy that required all middle and high
school students to submit to drug testing (urinaly-
sis) as a condition of participating in any
extracirricular activity, such as the band or chess
club. A number of students and parents challenged
the policy as a violation of the students’ Fourth
Amendment rights, and the Tenth Circuit in Den-
ver agreed, reversing a trial court’s previous rul-
ing in favor of the school district.
The Supreme Court reversed, holding that the
policy was “a reasonable means of furthering the
School District’s important interest in preventing
and deterring drug use among its school children.”
Since it was “reasonable,” the consentless searches
did not violate the Fourth Amendment, according
to Justice Thomas.
In a stinging dissent, Justice Ginsburg said the
district’s drug tesing policy “is not reasonable, it is
capricious, even perverse.” She noted that the
policy takes aim at students who are least likely to
be drug users, participants in after-school activi-
ties. Justice Ginsburg also noted that the school
district had repeatedly violated many of the terms
of its own policy, revealing confidential informa-
tion about a student’s results to nonpriviliged per-
sons without the consent of the student. Both the “If a purient appeal is offen-
trial court and the Supreme Court majority ignored
this fact, and improperly took the school district’s sive in a puritan village, it
denial at face value.
Concluding her dissent, Justice Ginsburg states
may be a crime to post it on
“It is a sad irony that the petitioning School Dis- the World Wide Web.”
trict seeks to justify its edict here by trumpeting
‘the schools’ custodial and tutelary responsibility - Justice John Paul Stevens
for children...[but] schools’ tutelary obligations to
their students require them to ‘teach by example’ Ashcroft v. ACLU (dissent)
by avoiding symbolic measures that diminish con-
stitutional protections. [Citing a 1943 Court deci-
sion] ‘That (schools) are educating the young for
citizenship is reason for scrupulous protection of
Constitutional freedoms of the individual, if we
are not to strangle the free mind at its source and
teach youth to discount important principles of our
government as mere platitudes.’
CMDC disagrees with the Court, and supports
Justice Ginsburg’s position. The Fourth Amend-
ment prohibits the state from conducting warrant-
less searches absent exigent circumstances.
CMDC: The Supreme Court Year in Review, 2001-2002
“If Typhoid Mary had come
under the ADA, would a
meat packer have been de-
fenseless if Mary had sued
after being turned away?”
- Justice David Souter
Chevron v. Echazabal
Chevron U.S.A., Inc. v. Echazabal,
Decided June 10, 2002, by a vote of 9-0.
Souter for the Court. This case was one of
three major victories this Term for businesses
in the decade-long struggle over the Ameri-
cans with Disabilities Act. Mario Echazabal
was rejected for a position at an oil refinery
owned by Chevron because his required medi-
cal examination showed damage to his liver,
the result of Hepatitis C. The company said
working at a refinery would only exacberate
Echzabal’s liver damage. Echazabal filed suit,
claiming his rights were violated under the
ADA. Although the trial judge granted sum-
mary judgment to Chevron, the Ninth Circuit
in San Francisco reversed, saying that the text
of the ADA only permitted a company to deny
someone a job if his disability posed a danger
to others, not to the disabled individual him-
self. The Court of Appeals also said that the
“ability to perform a job without risk to one’s
health or safety is not an ‘essential function’
of the job,” which would permit exclusion
under the ADA.
A unanimous Supreme Court reversed the
Ninth Circuit, holding that although Congress
did not specifically mention harm to oneself
as a grounds for exclusion under the ADA,
the Equal Employment Opportunity Commis-
sion was well within its statutory power to
adopt such a policy by regulation, as it did
here. The EEOC rules permit a company to
deny a job if they believe the position poses a
threat to a worker’s health or safety.
CMDC agrees with the Court’s decision.
Equal Employment Opportunity Commis-
sion v. Waffle House, Inc., Decided January
15, 2002, by a vote of 6-3. Stevens for the
Court, Thomas in dissent. In this case, the
Court found private contracts were no match
for the coercive power of the Americans with
Disabilities Act. Eric Baker was an employee
of Waffle House, Inc., who, upon signing his
application for employment, agreed that any
dispute arising from his employment with the
company would be settled by binding arbi-
tration. Sixteen days after he was hired, Baker
suffered a seizure while working as a grill
operator, and was dismissed by Waffle House.
Baker never filed for binding arbitration,
per his agreement with the company, but in-
stead filed a complaint with the EEOC, claim-
ing discrimination under the ADA. The EEOC
filed suit against Waffle House, requesting
backpay, reinstatement and other relief be
granted to Baker, even though he was not a
party to the actual lawsuit. The Fourth Cir-
cuit in Richmond held that the EEOC had to
at least give some consideration to Baker’s
16
arbitration agreement before seeking “victim
specific relief” in his name.
The Supreme Court ruled for the EEOC,
saying that the private arbitration agreement
was essentially meaningless, since the EEOC
had statutory power under the ADA and the
Civil Rights Act of 1964 to pursue individual
relief on behalf of Baker. Writing for the ma-
jority, Justice Stevens said that the EEOC was
not a party to the arbitration agreement, and
therefore could not be bound by its terms in
any way. Justice Thomas, in dissent, ridicules
the Court’s reasoning, saying that it not only
conflicts with a long history of case law on
the issue of arbitration agreements, but that
federal law specifically promotes the use of
arbitration agreements as a way of avoiding
litigation. Waffle House “gains nothing,” ac-
cording to Justice Thomas, by utilizing arbi-
tration agreements, and in fact could put it-
self at a disadvantage, since now an aggrieved
employee gets “two bites at the apple”: First
through the arbitration hearing, then through
an EEOC action brought on his behalf.
CMDC disagrees with the Court’s deci-
sion. The government has no right to inter-
fere with private contractual relationships,
unless there is fraud or coercion involved,
which was not the case here.
City of Los Angeles v. Alameda Books, Inc.,
Decided May 13, 2002, by a vote of 5-4.
O’Connor announced the judgment and is-
sued a plurality opinion; Scalia and Kennedy
concurring, Souter in dissent. In 1977 the City
of Los Angeles conducted a study to deter-
mine the correlation, if any, between the pres-
ence of “adult” business establishments and
property values. Although no direct link was
found between the two, there was some evi-
dence that areas with high concentrations of
adult businesses also had higher crime rates.
Based on this, the city enacted a zoning ordi-
nance which prohibited two adult businesses
from being located within 1,000 feet of one
another, or any such business from being
within 500 feet of a school, public park or
religious institution. Later, the city went fur-
ther with the rule, preventing more than one
type of adult business from operating within
the same building. For example, an adult
bookstore and adult movie theater could not
occupy the same mall. Again, the city relied
on its 1977 study to justify the regulation as
an anti-crime measure.
Alameda Books was cited by the city in
1995 for operating an adult bookstore and
adult “arcade” in the same structure, in viola-
tion of the zoning regulations. The company
sued to prevent enforcement of the ordinance,
CMDC: The Supreme Court Year in Review, 2001-2002
claiming it violated the First Amendment. The
District Court granted summary judgment in
Alameda’s favor, and the Ninth Circuit af-
firmed, although on different grounds. Both
courts cited the lack of evidence supporting
the city’s claim that the regulations were neces-
sary to prevent an increase in criminal activity.
The Supreme Court reversed, finding that
the city’s regulation did not offend the First
Amendment. Four justices, led by Justice
O’Connor, said the city could “reasonably
rely” on the 25-year-old study (which was lim-
ited in its scope and methodology) to justify
the ban on multiple adult businesses. Justice
Scalia, concurring with the plurality, put it
more bluntly: “The Constitution does not pre-
vent those communities that wish to do so
from regulating, or indeed entirely suppress-
ing, the business of pandering sex.” Justice
Kennedy, joining the Court’s judgment but not
Justice O’Connor’s opinion, wrote separately
to say that the city has a right to use their zon-
ing power to mitigate the “secondary effects”
of adult businesses, but that such regulations
should not be used to target the actual
“speech” itself. He also said that the lack of
evidence to support the city’s claims were ir-
relevant, since local governments needed
“latitude to experiment” with desirable social
policies irrespective of any evidentiary re-
quirements.
Justice Souter dissented, saying the city
had failed to reasonably defend the need for
the regulation: “[T]he government has not
shown that bookstores containing viewing
booths, isolated from other adult establish-
ments, increase crime or produce other nega-
tive secondary effects in surrounding neigh-
borhoods, and we are thus left without sub-
stantial justification for viewing the city’s First
Amendment restriction as content correlated
but not simply content based.” In other words,
the 1977 study itself is insufficient to justify
targeting businesses on the basis of what they
are doing, since that constitutes a restriction
on content, rather than on the time or place of
a business, which is the usual subject of a
zoning regulation (albeit an equally unjusti-
fiable one).
CMDC disagrees with the Court’s deci-
sion, and supports Justice Souter’s dissent.
The city had no reasonable basis to enact its
regulation, as it had no relation to the preven-
tion of crime. We further disagree with Jus-
tice Kennedy’s opinion that the city had a right
to enact the regulations pursuant to its zon-
ing power.
Toyota Motor Manufacturing, Kentucky,
Inc. v. Williams, Decided January 8, 2002,
17
by a vote of 9-0. O’Connor for the Court. This
case involves an ADA claim brought by Ella
Williams, who claimed Toyota refused to “rea-
sonably” accomodate her medical condition,
an impediment which prevented her from per-
forming two of the four major tasks associ-
ated with her position as an assembly-line
worker. The issue before the Court here was
the standard by which Williams could be
deemed “disabled” and thus entitled to pro-
tection under the ADA.
The Sixth Circuit found that Williams was
disabled because she could not perform most
of the physical tasks associated with her job. A
unanimous Supreme Court rebuked that stan-
dard, saying the proper test was whether Will-
iams was “unable to perform the variety of tasks
central to most people’s daily lives.” Since the
kind of repetitive work endemic to factory
workers is not central to most people’s daily
lives, the Sixth Circuit erred in using that as
evidence of an ADA-protected disability.
CMDC agrees with the Court’s decision.
United States v. Fior D’Italia, Inc.,
Decided June 17, 2002, by a vote of 6-3.
Breyer for the Court, Souter in dissent. In this
case, the Supreme Court sanctioned the Inter-
nal Revenue Service’s practice of simply guess-
ing the incomes of people when they are un-
able to make a factual determination of said
income. At issue here was the use of an IRS
method known as “aggregate estimation,”
whereby the government attempted to deter-
mine the amount of unreported tips earned by
waitstaff at Fior D’Italia, a popular Italian res-
taurant in San Francisco, California.
This case originated with an IRS “compli-
ance check” of Fior’s accounts for 1991 and “[A]n individual’s carpal
1992, which reported tip incomes far below
what the restaurant’s credit card receipts alone tunnel syndrome diagnosis,
indicated. Since the IRS could not know how
much in tips the employees received from cus-
on its own, does not indicate
tomers who paid in cash, the agency used an whether the individual has a
aggregate estimation: The average percentage
tip from the credit card receipts was calculated
disability within the mean-
(just over 14.2% for both years), and this per- ing of the ADA.”
centage was applied to the aggregate amount
of cash sales. The IRS made no attempt to as- - Justice Sandra Day O’Connor
certain each individual employee’s actual tip
income or tax liability. Toyota
Both the District Court and the Ninth Cir-
cuit ruled in favor of Fior D’Italia, holding that
v. Williams
the use of the “aggregate estimation” method
exceeded the IRS’s statutory authority. On re-
view, the Supreme Court reversed, holding that
a tax assessment method used by the IRS is
“entitled to a legal presumption of correctness”
under the Internal Revenue Code. Essentially,
the Court found that there was nothing in the
CMDC: The Supreme Court Year in Review, 2001-2002 18

“[I]n ordinary English,
‘reasonable’ does not mean
‘effective’.”
- Justice Stephen Breyer
US Airways v. Barnett
law which specifically prohibited the use of the
method, therefore the burden was on the res-
taurant to prove “that the IRS has acted ille-
gally in this case” since “agency action cannot be
found unreasonable in all cases simply because of
a general possibility of abuse, which exists in re-
spect to so many discretionary powers.”
Justice Souter, in dissent, argued that read-
ing the tax law “so broadly” in favor of IRS
“saddles employers with a burden unintended
by Congress.” He then exposes the fallacy of
the majority opinion’s defense of the IRS’s
policy, saying that the aggregate estimation
method itself is incorrect. Justice Souter points
out, quite articulately, that as a general trend
in the restaurant industry, tips on credit card
sales are not usually the same as tips on cash
sales; the former is typically higher, which
means that the IRS method tends to “overes-
timate liability.” Justice Souter says this places
an unfair burden on employers to try and ac-
curately gather information on how much their
employees are being tipped, something which
the tax code explicitly excuses them from hav-
ing to do. Thus, the IRS is punishing employ-
ers for actually following the law as written.
CMDC disagrees with the Court, and supports
Justice Souter’s dissent. The IRS has no statutory
power to “estimate” the income of restaurant em-
ployees using a method which is clearly designed
to create errors in favor of the IRS.
US Airways, Inc. v. Barnett,
Decided April 29, 2002, by a 5-4 vote. Breyer
for the Court, Stevens and O’Connor concur-
ring, Scalia and Souter in dissent. In this case,
the Court ruled the Americans with Disabili-
ties Act does not trump all private contractual
agreements within a corporation. Robert
Barnett, a former cargo-handler for U.S. Air-
ways, injured his back on the job in 1990, and
as a result asked to be transferred to a less de-
manding mailroom position. However, two
employees with more seniority had requested
the position, and the company’s policy (under
its union agreements) was to respect the senior-
ity in awarding positions. Barnett lost his job,
and subsequently filed suit under the ADA,
saying the company failed to make a “reason-
able accomodation” for his disability.
The District Court granted summary judg-
ment to U.S. Airways, saying the company’s
seniority system was well established, and that
accomodating Barnett’s disability “would im-
pose an undue hardship” on the company. The
Ninth Circuit, sitting en banc, reversed the trial
court, saying the presence of the seniority sys-
tem was only “a factor” in determining whether
there was an undue hardship, but not a deci-
sive one.
The Supreme Court reversed the Ninth Cir-
cuit, taking a middle position that while the
presence of a “bona fide” seniority system will
trump the interests of a disabled worker seek-
ing special treatment “in the run of cases,” there
may be individual cases where a disabled
worker is entitled to special treatment if he can
demonstrate that the seniority system itself is
followed inconsistently. In other words, if ex-
ceptions are regularly granted to the seniority
system, it does not create an expectation of uni-
form treatment among all workers and the Court
may ignore it in the context of the ADA’s re-
quirements.
At the heart of this case was the Court’s
interpertation of the term “reasonable
accomodation,” the centerpiece of the ADA’s
legislative force. The majority, led by Justice
Breyer, rejected Barnett’s argument that an
accomodation was only “reasonable” if it was
“effective” in meeting the disabled employee’s
request. “For one thing,” Justice Breyer said,
“in ordinary English, the word ‘reasonable’
does not mean ‘effective.’ It is the word
‘accomodation,’ not the word ‘reasonable’ that
conveys the need for effectiveness.”
Justice Breyer continued that while an inef-
fective accomodation would not meed a dis-
abled worker’s needs, a demand for an effec-
tive accomodation “could prove unreasonable
because of its impact, not on business opera-
tions, but on fellow employees say because it
will lead to dismissals, relocations, or modifi-
cation of employee benefits to which an
employer...may be relatively indifferent.”
Justice O’Connor filed a concurring opin-
ion, where she expressed concern that U.S.
Airways’ particular seniority system might not
necessarily render accomodation of Barnett
“unreasonable” under the ADA. She points out
the text of the company’s employee manual,
which says seniority does not automatically
entitle an employee to hold a particular posi-
tion, and that the company reserves the right to
change the policy at any time.
Justice Scalia and Justice Souter filed dis-
senting opinions, albeit for very different rea-
sons. Justice Scalia (joined by Justice Thomas)
felt that the majority should not have left any
room for the courts to disregard a seniority sys-
tem for ADA purposes. He said that the ADA
does not subject all employer policies to the
“reasonable accomodation” requirement, but
that since the majority disagrees, the issue then
becomes whether suspending a seniority sys-
tem is unreasonable.
Justice Scalia says it is unreasonable, but,
he writes, “The Court is unwilling, however,
to make that finding categorically, with respect
to all seniority systems. Instead, it creates (and
CMDC: The Supreme Court Year in Review, 2001-2002
‘creates’ is the appropriate word) a rebuttable
presumption that exceptions to seniority rules
are not ‘reasonable’ under the ADA, but leaves
it free for the disabled employee to show that
under the ‘special circumstances’ of his case,
an exception would be ‘reasonable’....for ex-
ample, if he showed that ‘one more departure’
from the seniority rules ‘will not likely make a
difference’.
“I have no idea what this means,” Justice
Scalia continued. “When is it possible for a
departure from the seniority rules to ‘not likely
to make a difference’? Even when a bona fide
seniority system has multiple exceptions, em-
ployees expect that these are the only excep-
tions. One more unannounced exception will
invariably undermine the values that the Court
cites as reasons for believing seniority systems
so important that they merit a presumption of
exemption.”
Justice Scalia (correctly) concludes that the
Court’s position gives disabled employees “a
vague and unspecified power” to undercut le-
gitimate seniority system policies, and indeed
any employer policy where “special circum-
stances” might exist under the ADA.
Justice Souter (joined by Justice Ginsburg)
also dissents, not for the reasons Justice Scalia
offered, but because “Nothing in the ADA in-
sulates seniority rules from the ‘reasonable
accomodation’ requirement.” In contrast to Jus-
tice Scalia’s belief that no seniority policy falls
under the ADA, Justice Souter said that all
employer policies may be overruled by the ADA
in the name of “reasonable accomodation.”
Although we agree with the Court’s deci-
sion to find in favor of U.S. Airways in this
case, we disagree with the Court’s reasoning,
and instead support Justice Scalia’s dissenting
opinion. Under the Court’s decision, there is
no objective standard of law for employers to
follow in implementing a seniority system
policy, and thus the majority’s reasoning is fa-
tally flawed as a matter of law. Justice Scalia
correctly states the fact that the ADA is not in-
tended to trump all employer policies, and that
in any event, the “rebuttable presumption” doc-
trine articulated by Justice Breyer fails to pro-
vide any useful guidance to business on how
to avoid sanctions under the law.
Zelman v. Simmons-Harris, Decided June 27,
2002, by a vote of 5-4. Rehnquist for the Court,
O’Connor and Thomas concurring, Stevens,
Souter and Breyer in dissent. The final opinion
of the 2001 Term, Zelman upheld the consti-
tutionality of Cleveland’s Pilot Project Scholar-
ship Program, a limited voucher program that pro-
vided state-funded tuition aid to students who at-
tended a participating public, prviate or parochial
19
school of their parent’s choosing. A group of
Ohio taxpayers filed suit to have the program
declared an unconstitutional violation of the
First Amendment’s Establishment Clause, since
religous schools were permitted to participate
in the program and receive tuition grants from
the State of Ohio.
The Sixth Circuit sided with the aggrieved
taxpayers, finding the voucher program had
the “primary effect” of advancing religion.
The Supreme Court disagreed and reversed,
saying the program “was enacted for a valid
secular purpose” and was appropriately neu-
tral towards religion, since the parents were
exercising individual choice.
Justice Thomas offered a passionate con-
curring opinion, where he put the voucher
issue in stark terms: “Fredrick Douglass once
said that ‘education means emancipation. It
means light and liberty. It means the uplift-
ing of the soul of man into the glorious light
of truth, the light by which men can only be
made free.’ Today many of our inner-city pub-
lic schools deny emancipation to urban mi-
nority students. Despite this Court’s obser-
vation nearly 50 years ago in Brown v. Board
of Education, that ‘it is doubtful that any
child may reasonably be expected to succeed
in life if he is denied the opportunity of an
education,’ urban children have been forced
into a system that continually fails them.”
In various dissents, Justices Stevens,
Souter and Breyer said that any form of gov-
ernment sponsorship of religous education
was unconstitutional. Justice Stevens said the
fact that parents, not the state, dictated the
choice of schools was “irrelevant.” He went
on to cite “my understanding on the impact
of religous strife on the decisions of our for- “There would be a tragic
bears to migrate to this continent, and on the
decisions of neighbors in the Balkans, North- irony in converting the Four-
ern Ireland, and the Middle East to mistrust
one another,” as grounds for opposing the
teenth Amendment’s guaran-
voucher program. tee of individual liberty into
While CMDC understands the dissenters’ con-
cern over the co-mingling of church and state
a prohibition of the exercise
(something we firmly oppose), we do not agree of educational choice.”
that vouchers will “weaken the foundation of our
democracy,” as Justice Stevens puts it. Indeed, we - Justice Clarence Thomas
believe that it is the public school system which
has weakened freedom and individual rights, and
Zelman v. Simmons-Harris
that while vouchers are not the ultimate solution (Concurring)
to the problem, they are a useful intermediary step,
and in any event, we do not see why giving money
to religous schools at the parent’s direction is any
less constitutional than forcing them to support
the state’s education monopoly. For these reasons,
we endorse the Court’s decision.
CMDC: The Supreme Court Year in Review, 2001-2002
“A patent holder should
know what he owns, and the
public should know what he
does not.”
- Justice Anthony Kennedy
Festo v. SMC
Other Decisions
BE&K Construction Co. v. National Labor
Relations Board, Decided June 24, 2002, by
a vote of 9-0. O’Connor for the Court, Scalia
and Breyer concurring. BE&K is a non-union
general contractor who was targeted for ha-
rassment by unions over the company’s con-
tract to modernize a California steel mill. The
unions used political lobbying, boycotts and
court action to prevent BE&K from success-
fully completing its work, and as a
conseuqence, the company filed federal suit
against the unions, alleging among other
things violation of the antitrust laws. After the
company’s lawsuit ended (the claims were all
withdrawn or dismissed by the trial court),
the unions filed a grievance with the NLRB,
saying BE&K’s actions was an attempt to in-
terfere with legally protected union activities.
The NLRB agreed with the unions, and im-
posed sanctions on BE&K, which were up-
held on appeal to the U.S. Sixth Circuit.
The Supreme Court reversed, holding that
the NLRB used an invalid standard to impose
liability. The Court said the Board had to show
that the company had pursued an objectively
baseless claim with the subjective intent to
prevent lawful union activity. Since the un-
derlying lawsuit had some objective merit, in
the Court’s view, the fact that it was unsuc-
cessful did not, in and of itself, justify the
NLRB’s imposition of liability. CMDC agrees
with the judgment of the Court, and we would
also echo a point made by Justice Scalia, in
his concurrence, that the courts are more than
capable of sanctioning abuse of judicial pro-
cess without the assistance of the NLRB.
JP Morgan Chase Bank v. Traffic Stream
(BVI) Infrastructure Ltd., Decided June 10,
2002, by a vote of 9-0. Souter for the Court.
This case involved a contract dispute between
Chase Manhattan Bank and Traffic Stream, a
corporation organized in the British Virgin
Islands (BVI). Under a financing agreement
between the two companies, all disputes were
to be litigated in the U.S. District Court for
the Southern District of New York. After
Chase won summary judgment in that court,
Traffic Stream appealed, and the Second Cir-
cuit reversed, citing the District Court lacked
proper jurisdiction under Article III of the
Constitution and federal statute. The Court of
Appeals said that since Traffic Stream was
organized in the BVI, an “Overseas Territory”
of the United Kingdom, it was not a “citizen
20
or subject of a foreign state” as required for
federal diversity jurisdiction.
The Supreme Court unanimously reversed,
faulting the Second Circuit’s bizarre premise
that a foreign citizen meant only those per-
sons (or companies) residing in a sovereign
nation directly recognized by the U.S. gov-
ernment. Although the BVI is not an inde-
pendent nation, they are a recognized depen-
dency of the British Crown, which is a sover-
eign power recognized by the U.S. Thus, the
District Court was correct to assert jurisdic-
tion over Traffic Stream as a “subject” of the
BVI (and the British Crown).
CMDC agrees with the Court’s decision,
and includes it in our ratings analysis because
of the importance of establishing clear and
concise rules for private contractual relations.
A company should not be permitted to under-
mine a voluntary obligation on the basis a non-
sensical definition of “jurisdiction” like the
one used by the Second Circuit here.
Chickasaw Nation v. United States, Decided
November 27, 2001, by a vote of 7-2. Breyer
for the Court, O’Connor in dissent. This case
involves an interpertation of the federal In-
dian Gaming Regulatory Act, specifically
whether the Act exempts Indian tribes from
paying certain federal excise taxes that the
states are exempt from. An error in the Con-
gressional drafting of the Act left the ques-
tion of the Indians’ exemption ambigous. The
majority, led by Justice Breyer, chose to re-
solve the conflict in favor of the United States;
Justice O’Connor, in dissent, says the statute
should be “construed liberally in favor of the
Indians, with ambigous provisions interperted
to their benefit,” a position the Court has taken
in previous Indian-related cases. CMDC
agrees with Justice O’Connor’s position.
Festo Corp. v. Shoketsu Kinzoku Kogyo
Kabushiki Co. Ltd. (SMC), Decided May
28, 2002, by a vote of 9-0. Kennedy for the
Court. In patent law, there are two concepts
that sometimes come into conflict with one
another. The first is prosecution history es-
toppel, which allows competitors to rely on
the history of a patent application proceeding
to determine where they can modify an
inventor’s patent without infringing upon it;
in other words, an inventor cannot narrow a
claim during a patent proceeding, then go back
after the fact and claim a broader protection
CMDC: The Supreme Court Year in Review, 2001-2002
than his patent entitles him to. Second is the
doctrine of equivalents, which protects a
patent holder from infringement when a com-
petitor makes “insubstantial changes” to an
inventor’s work.
In this case, Festo Corporation claims that
SMC is selling a magnetic rodless cylinder
which infringes upon two of Festo’s patents.
While SMC’s devices do not meet the literal
description of the Festo patents, they are simi-
lar enough for Festo to invoke the doctrine of
equivalents. SMC replied by invoking pros-
ecution history estoppel, saying that they had
employed designs for their product based on
an earlier version that Festo had submitted to
the Patent Office, but which they subsequently
narrowed in order to meet the requirements
for obtaining the patent. By relying on the
earlier version, SMC claims they did not in-
fringe Festo’s actual patents.
Here, the Supreme Court ruled the Court
of Appeals for the Federal Circuit erred in
forbiding Festo from asserting any infringe-
ment claims based on prosecution history. The
Court said that whether Festo had actually
rebutted the presumption that estoppel was
applicable, however, was a question that
needed to be further examined by the lower
courts. CMDC agrees with the Court’s deci-
sion, because we agree that the Federal Cir-
cuit should not have automatically barred
Festo’s infringement claims without first at-
tempting to define the precise scope of the
patents involved.
Gonzaga University v. Doe, Decided June
20, 2002, by a vote of 7-2. Rehnquist for the
Court, Breyer concurring, Stevens in dissent.
“John Doe” was a student at Gonzaga Uni-
versity who, upon graduation, sought employ-
ment as a public schoolteacher in the State of
Washington. As a prerequisite for employ-
ment, Doe was required to get an affidavit
certifying his “good moral character” from his
college dean. The Gonzaga dean here, Roberta
League, had overheard two students discuss-
ing an alleged incident of sexual misconduct
involving Doe. League investigated on her
own and, without informing Doe of her ac-
tions, reported Doe to the state department of
education, detailing the allegations against
him. Doe was accordingly denied the affida-
vit of good character from League.
Doe filed suit in state court, in part alleg-
ing a violation of his rights under the federal
Family Educational Rights and Privacy Act
(FERPA), which directs the U.S. secretary of
education to deny government funds to
schools which have a policy of releasing stu-
dent “educational records” without their con-
21
sent. Doe won at trial, and was awarded dam-
ages on his FERPA claim. The Washington
Court of Appeals reversed the verdict, saying
FERPA didn’t create an individual right that
could be asserted in court; the Supreme Court
of Washington reversed, saying FERPA “gives
rise to a federal right” that can be enforced by
the judiciary.
The U.S. Supreme Court reversed, agree-
ing with the Washington Court of Appeals that
FERPA was not intended to create an “indi-
vidual right,” but rather it dictated the terms
of federal appropriation of funds. The Chief
Justice, writing for the Court, said “if Con-
gress wants to create new rights...it must do
so in clear and unambigous terms.” Justice
Breyer, in his concurring opinion, notes that
the term “educational record” is so vaguely
defined by FERPA, that to allow private
causes of action would create chaos by argu-
ably restricting practices such as peer grad-
ing and letters of reccomendation. CMDC
agrees with Justice Breyer, and we agree with
the Court’s judgment and opinion.
Department of Housing and Urban Devel-
opment v. Rucker, Decided March 26, 2002,
by a vote of 8-0. Rehnquist for the Court,
Breyer not participating. In 1988, Congress
passed the Anti-Drug Abuse Act which pro-
vides that every “public housing agency shall
utilize leases which … provide that any crimi-
nal activity that threatens the health, safety,
or right to peaceful enjoyment of the premises
by other tenants or any drug-related criminal
activity on or off such premises, engaged in
by a public housing tenant, any member of
the tenant’s household, or any guest or other
person under the tenant’s control, shall be “[I]f Congress wants to create
cause for termination of tenancy.”
In 1997, the Oakland Housing Authority, new rights...it must do so in
which is bound by the Congressional Act,
evicted four tenants because persons in their
clear and unambigous
public housing units were caught using or terms.”
dealing illegal narcotics. A federal District
Court enjoined OHA from evicting the ten- - Chief Justice William Rehnquist
ants, saying that since they were not aware of Gonzaga Univ. v. Doe
the illegal drug activity, they could not be held
liable under their lease. The U.S. Ninth Cir-
cuit affirmed, and the Supreme Court unani-
mously reversed, saying that the “plain lan-
guage” of the 1988 Act “unambigously” per-
mits the evictions. While the Act does not re-
quire evictions, the Chief Justice wrote on
behalf of the Court, it does grant the OHA an
absolute right to enforce the lease. While
CMDC does not support current federal anti-
drug policy or public housing, the issue in
this case is whether tenants can be held to the
terms of their lease. We believe they should
CMDC: The Supreme Court Year in Review, 2001-2002
“[E]ven if it were possible to
select judges who did not
have preconceived views on
legal issues, it would hardly
be desirable to do so.”
- Justice Antonin Scalia
Rep. Party of Minn. v. White
be, and thus agree with the Court’s decision.
(Note: Justice Breyer did not participate be-
cause his brother was the District Court judge
in this case.)
Rush Prudential HMO, Inc. v. Moran, De-
cided June 20, 2002, by a vote of 5-4. Souter
for the Court, Thomas in dissent. Congress
passed the Employee Retirement Income Se-
curity Act of 1974 (ERISA) in order to pro-
vide uniform federal procedures for handling
employee benefit claims, such as those related
to health insurance. ERISA was designed to
overrule any conflicting state laws, since it
was the intent of Congress to create incen-
tives for employers to provide benefits by
negating the patchwork of individual state re-
quirements.
Debra Moran sued her HMO, Rush Pru-
dential, under an Illinois state law which re-
quires HMOs to submit to a form of arbitra-
tion (review by an outside physician) when
they deny coverage for a particular medical
procedure against the advice of a patient’s
principal physician. The Illinois law provides,
in essence, a remedy that runs contrary to
ERISA, which does not require the indepen-
dent review. Rush claims that ERISA’s pre-
emption authority prevents Moran from in-
voking the Illinois law. The Supreme Court
disagreed, holding that the state law is an “in-
surance regulation,” which is not preempted
by ERISA, and that enforcing the state law
would not substantially harm the intent of the
federal law.
Justice Thomas, in dissent, disagreed, say-
ing Illinois was creating a separate remedy
outside the ERISA’s mandate, which in and
of itself violates the intent of Congress. He
went on to note that allowing the states to
enforce these types of “independent review
provisions” would negate the ultimate policy
goal of Congress, by making healthcare ben-
efits too expensive to maintain, since HMOs
would be unable to effectively deny benefits
they believe to be medically unnecessary.
CMDC agrees with Justice Thomas as a
matter of policy, and on the law. The Illinois
statute directly conflicts with ERISA, and the
Supremacy Clause of the Constitution re-
quires the state to yield the right-of-way. We
disagree with the Court’s decision.
Republican Party of Minnesota v. White,
Decided June 27, 2002, by a vote of 5-4.
Scalia for the Court, O’Connor and Kennedy
concurring, Stevens and Ginsburg in dissent.
The Minnesota Constitution provides that all
judges in the state shall be elected. In 1974,
the Minnesota Supreme Court, pursuant to its
22
power to regulate judicial conduct, adopted a
regulation prohibiting candidates for judicial
office from announcing “his or her views on
disputed legal or political issues.” Gregory
Wersal, a candidate for the Minnesota Su-
preme Court, filed suit seeking a declaration
that this rule was unconstitutional under the
First Amendment. A federal District Court
ruled against Wersal and his co-plaintiffs (in-
cluding the state Republican Party), and the
Eighth Circuit affirmed.
The Supreme Court reversed, holding the
“announce clause” violated the First Amend-
ment. Justice Scalia, writing for the Court, said
that the state offered no “compelling interest”
which would justify the announce clause. Al-
though the reason given was to preserve the
“impartiality” of the state’s judiciary, Justice
Scalia could find no satisfactory definition of
the term in the state’s defense. The announce
clause was directed at statements on issues,
not for or against particular parties to a case,
and while the state might have an interest in
preventing the appearance that a judge has
certain preconceived notions about the law, it
would be nearly impossible to actually enforce
such a rule, since it would be impossible and
“hardly desirable” to find judges with abso-
lutely no preconceptions.
The concurring and dissenting opinions in
this case focus less on the constitutionality of
the law, and more on the inherent problems
with electing judges, and why the practice
should be disfavored. While these are policy
issues worthy of debate, they do not justify
the Minnesota ban on candidate speech.
CMDC agrees with the Court’s decision.
City of Columbus v. Ours Garage and
Wrecker Service, Inc., Decided June 20,
2002, by a vote of 7-2. Ginsburg for the Court,
Scalia in dissent. Under the federal Interstate
Commerce Act, local regulation of “motor car-
riers” engaged in the “transportation of prop-
erty” is preempted by the federal law, with
certain exceptions. One of these exceptions
says that the ICA shall not preempt “the au-
thority of a State” to regulate motor vehicle
safety. In this case, the City of Columbus
appealed the Sixth Circuit’s ruling that their
municipal tow truck regulations were invalid,
because the ICA preemption only applied to
acts of the State of Ohio, and not its cities.
The Supreme Court reversed the Sixth Cir-
cuit, saying the statutory language was un-
clear, and that absent such clarity, “federal
courts should resist attribution to Congress
of a design to disturb a State’s decision on
the division of authority between the State’s
central and local units over safety on munici-
CMDC: The Supreme Court Year in Review, 2001-2002
pal streets and roads.”
Justice Scalia dissented, saying the statu-
tory language was clear, and that the Court’s
federalism concerns were misplaced in this
instance. He cited the construction of the stat-
ute, where the term “State or a political sub-
division of a State” was used in two of the
four ICC exceptions, but only “State” was
used in the exception at issue here. Based on
this, Justice Scalia would hold the city’s law
invalid under the federal statute. CMDC
agrees, because Congress was acting pursu-
ant to its legitimate Article I authority, and
because the law is manifestly clear in this in-
stance. We disagree with the Court’s decision.
National Cable & Telecommunications As-
sociation v. Gulf Power Co., Decided Janu-
ary 16, 2002, by a vote of 8-0. Kennedy for
the Court, Thomas concurring in part and dis-
senting in part, O’Connor not participating.
In 1978, Congress passed the Pole Attach-
ments Act, which gives the Federal Commu-
nications Commission the power to “regulate
the rates, terms and conditions for pole at-
tachments to provide that such rates, terms
and conditions are just and reasonable.” Pole
attachments are wires carried on telephone and
utility poles for other services, such as cable
television. The Act was designed to prevent
“monopoly pricing” by the pole owners
against the cable operators. The question pre-
sented in this case was whether the Act gave
the FCC jurisdiction to set conditions for
wires carrying high speed Internet service as
well as wireless services.
The Supreme Court ruled that the FCC has
jurisdiction in both instances. On the Internet
issue, the Court found that the statute covers
all attachments made by a cable television
company, regardless of whether the attach-
ment is for television or Internet service. Simi-
larly, FCC regulation of wireless service is
governed by the Act, since it covers attach-
ments made by any telecommunications com-
pany. Justice Thomas wrote separately to say
that the FCC “failed to engage in reasoned
decisionmaking” before asserting its new au-
thority, and although he did not question the
Court’s ultimate judgment, he thought the
FCC should be ordered to reconsider its regu-
lations before implementing them. CMDC
disagrees, since we believe that the Pole At-
tachments Act itself is constitutionally invalid
on its face (as it regulates the price of private
property), and thus we do not support the
Court’s judgment in this case.
Ragsdale v. Wolverine World Wide, Inc.,
Decided March 19, 2002, by a vote of 5-4.
23
Kennedy for the Court, O’Connor in dissent.
Under the Family and Medical Leave Act of
1993 (FMLA), employees of certain compa-
nies are to receive at least 12 weeks of unpaid
leave yearly, although employers are encour-
aged to grant more leave if possible. Wolver-
ine granted employee Tracy Ragsdale 30
weeks of unpaid leave while she was recov-
ering from cancer. When she was denied ad-
ditional leave, she was fired, whereupon she
filed suit claiming her FMLA rights were vio-
lated. She claimed that under the Secretary of
Labor’s regulations implementing FMLA, the
company had to specifically designate any
additional leave as counting against her
FMLA allocation of 12 weeks. Wolverine
conceded no formal notice was given, but said
the fact they gave her more than twice the le-
gally mandated leave should mean her FMLA
benefits were provided for in accordance with
the law. The District Court agreed, and granted
summary judgment to Wolverine, and the
Eighth Circuit affirmed.
The Supreme Court also affirmed, saying
the Secretary of Labor’s regulation was in-
valid because it acted contrary to the intent of
the statute. The rule was too categorical in
that it failed to take into account the reality of
a given case, as was the situation here, where
the failure to give technical notice was clearly
outweighed by the company’s grant of addi-
tional leave. Justice O’Connor, in dissent, said
that the Court should have deferred to the
Secretary’s judgment on the regulation be-
cause the rule was not totally “unreasonable.”
CMDC agrees with the majority’s
interpertation, and we support the decision of
the Court to invalidate the regulation.
“Shakespeare may not have
Ashcroft v. Free Speech Coalition, Decided
April 16, 2002, by a vote of 7-2. Kennedy for written sexually explicit
the Court, Thomas and O’Connor concurring,
Rehnquist in dissent. The Child Pornography
scenes for the Elizabethean
Prevention Act of 1996 (CPPA) expanded the audience, but were modern
definition of illegal child pornography to in-
clude computer-generated images that “ap-
directors to adopt a less
pears to be” minors engaging in sexually ex- conventional approach, that
plicit conduct. A group of adult entertainment
producers filed suit, claiming the law’s pro- fact alone would not compel
hibition violated the First Amendment. The the conclusion that the work
Supreme Court agreed, and invalidated the
“virtual child pornography” ban as being was obscene.”
“overbroad and unconstitutional.” Writing for
the Court, Justice Kennedy said that the CPPA - Justice Anthony Kennedy
failed to take into account works as a whole,
instead banning them on the basis of whether Ashcroft v. Free Speech Coalition
there was an explicit image alone. He said that
such lack of context could cause many legiti-
mate expresive works to be banned, such as
Shakespeare’s Romeo and Juliet, which de-
CMDC: The Supreme Court Year in Review, 2001-2002
“It is offensive—not only to
the values protected by the
First Amendment, but to the
very notion of a free
society—that in the context
of everyday public discourse a
citizen must first inform the
government of her desire to
speak to her neighbors and
then obtain a permit to do
so.”
- Justice John Paul Stevens
Watchtower Bible v. Stratton
picts teenage sex.
The Chief Justice dissented, saying that
Justice Kennedy’s concerns about the misap-
plication of the CPPA were unfounded, and
that the law could be properly interperted to
conform with the First Amendment. Justice
O’Connor wrote separately to say she would
strike down the ban on some forms of “vir-
tual child pornography,” but not others.
CMDC believes the majority was right to
strike down the entire ban as a reach under
the First Amendment, and thus we support the
Court’s decision in full.
Watchtower Bible & Tract Society of New
York v. Village of Stratton, Decided June 17,
2002, by a vote of 8-1. Stevens for the Court,
Breyer and Scalia concurring, Rehnquist in
dissent. The village of Stratton, Ohio, enacted
and enforced an ordinance which prevented
individuals from going door-to-door to pro-
mote any “cause” without first obtaining a
permit from the mayor’s office. A Jehovah’s
Witness group filed suit, claiming the regula-
tion was an unconstitutional infringement of
their religous freedom under the First Amend-
ment. The Supreme Court agreed, reversing
the Sixth Circuit’s decision to uphold the or-
dinance. Justice Stevens, writing for the Court,
said that “hand distribution of religous tracts
is ages old” and is an intrinsic part of the free-
dom or religion guaranteed by the First
Amendment. While the village has a legiti-
mate interest in preventing fraud and crime
(which they claimed as a reason for enacting
the ordinance), it does not justify such a broad
regulation of legitimate religous and commu-
nicative interests. The Chief Justice disagreed,
saying the “crime prevention” motive was
sufficient to uphold the regulation. CMDC
agrees with the Court’s decision.
New York v. Federal Energy Regulatory
Commission, Decided March 4, 2002, by a
vote of 9-0. Stevens for the Court, Thomas
concurring in part and dissenting in part. In
1992, Congress gave the Federal Energy
Regulatory Commission (FERC) the power
to order public utilities to open up their trans-
mission lines to outside power producers on
a case-by-case basis. Rejecting this piecemeal
mandate of the 1992 law, FERC instead is-
sued an order in 1996 ordering all public utili-
ties to open their lines to competitors. The
order said utilities had to offer access at com-
parable rates to what their existing generat-
ing partners received. Two separate suits com-
menced, one by energy producers who felt the
order did not go far enough, and another by
several states who felt FERC lacked the ju-
24
risdiction to govern power lines within their
states. The District of Columbia Circuit af-
firmed the FERC order in substantial part, and
the consolidated appeals were brought to the
Supreme Court on review.
The Court affirmed the D.C. Circuit, hold-
ing that FERC did not exceed its jurisdiction
in regulating the transmission lines, and that
the Commission’s actions was a “statutorily
permitted policy choice.” Justice Thomas,
writing separately, found that while FERC did
not overstep its jurisdiction, they failed to
engage in “reasoned decisionmaking” with
respect to some of their policy choices. Thus,
he would order FERC to reconsider the policy.
CMDC disagrees, believing that FERC has
no constitutional authority to regulate state
utilities in this manner whatsoever. We there-
fore disagree with the opinion of the Court.
J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred
International, Inc., Decided December 10,
2001, by a vote of 7-2. Thomas for the Court,
Scalia concurring, Breyer in dissent,
O’Connor not participating. The Plant Vari-
ety Protection Act of 1970 (PVPA) generally
prohibits individuals from obtaining patents
on plants, since they are “products of nature.”
Nevertheless, the Patent and Trademark Of-
fice regularly issues “utility patents” to plants
which are created through genetic engineer-
ing and related processes. This case involves
an alleged conflict between the Patent Office’s
policy and the PVPA. J.E.M. Ag Supply, do-
ing business under the name Farm Advantage,
Inc., allegedly resold bags of hybrid corn in
violation of an agreement with Pioneer, which
held the applicable patents on the corn. In
court, Farm Advantage claimed the patents
were invalid under the PVPA. The trial court
and the Court of Appeals for the Federal Cir-
cuit ruled in favor of Pioneer, saying plants
could be patented under the regular patent law.
The Supreme Court affirmed, saying that
the PVPA did not restrict the scope of the
general patent law, and that since Congress
had taken no action in the 16 years since the
PTO began granting plant patents to stop the
practice, there was no clear legislative intent
that the PVPA superseded the PTO’s general
authority. CMDC supports the Court’s con-
clusion in this case.
Barnhart v. Sigmon Coal Co., Decided Feb-
ruary 19, 2002, by a vote of 6-3. Thomas for
the Court, Stevens in dissent. In 1992, Con-
gress directed the Social Security Commis-
sioner to “assign” health benefits for retired
coal miners to their former employer, or, if
the employer was no longer in business, to
CMDC: The Supreme Court Year in Review, 2001-2002
“related persons.” The Commissioner as-
signed $237,000 in benefits to eighty-six
former miners for Shackelford Mining.
Shackelford was purchased in 1973 by Jericol
Mining, Inc., now an affiliate of Sigmon Coal
Co. Although none of the 86 workers had ever
worked for Jericol, the Commissioner ordered
the company to pay the benefits under the 1992
act of Congress. Jericol filed suit, claiming they
were not a “related person” under the statute.
The Supreme Court ruled that the 1992 law
does not permit the Commissioner to assign
the retired miners’ benefits to Sigmon, since
the “plain language” of the law does not de-
fine Sigmon as a “related person.” Justice
Stevens, in dissent, argues that the Court
should look beyond a literal reading of the
law, and instead carry out the “congressional
intent” in ensuring retired coal miners receive
benefits. The problem, however, is that
Sigmon was not a signatory to the original
agreement creating the benefits, nor was it
considered liable for said benefits prior to the
Commissioner’s decision under the 1992 law.
Therefore, CMDC believes the Court was
correct in ruling against the Commissioner.
Owasso Independent School District v.
Falvo, Decided February 19, 2002, by a vote
of 9-0. Kennedy for the Court, Scalia concur-
ring. The issue in this case was whether an
Oklahoma school district violated the Family
Educational Rights Privacy Act of 1974
(FERPA) by allowing teachers in an elemen-
tary school to ask students to grade each
other’s papers in-class. Kristja Falvo, the
mother of three children in the Owasso
schools, said the “peer grading” policy caused
embarassment to her children, and after the
school system refused to abandon the prac-
tice, she filed federal suit claiming a viola-
tion of FERPA. The U.S. Tenth Circuit in
Denver supported her position, saying that
“grades marked by students on each other’s
work” constituted a priviliged “educational
record” under FERPA.
The Supreme Court unanimously reversed,
saying that FERPA does not prohibit “educa-
tional techniques” such as peer grading. In
the Court’s view, a student grader is not an
agent of the school system under FERPA’s
definition, and the grade itself is not consid-
ered a priviliged “educational record” until it
is actually recorded by the teacher in her grade
book. The Court did not address the issue of
whether Mrs. Falvo could bring a private
cause of action under FERPA, although the
Court ruled later in the Term that it could not
be (See Gonzaga University v. Doe). As
CMDC agreed with the Gonzaga decision, we
25
also agree with the Court’s holding here.
United States v. Craft, Decided April 17,
2002, by a vote of 6-3. O’Connor for the
Court, Scalia and Thomas in dissent. The is-
sue here is whether the Internal Revenue
Service’s needs take precedence over a state’s
right to define the terms of property owner-
ship. In this case, Sandra Craft and her late
husband owned their home as “tenants by the
entirety,” which under Michigan law meant
they owned the property as a marital unit, not
as separate individuals. When Don Craft failed
to pay his fedreal income taxes, the IRS ob-
tained a lien against his property, including
the home owned in tenancy. $60,000 in pro-
ceeds from the house’s sale was placed in es-
crow by the IRS. After Mr. Craft’s death, the
IRS refused to release the escrowed funds to
Mrs. Craft, saying that the agency was entitled
to its proceeds. Legal action commenced, and
the U.S. Sixth Circiut found for Mrs. Craft,
saying that Michigan law did not recognize
an individual property interest for Mr. Craft
in the entireties estate, and thus the IRS could
not attach the lien.
The U.S. Supreme Court reversed and
found for the IRS. Justice O’Connor, writing
for the Court, saying that the lien provision
of the federal tax code is “meant to reach ev-
ery property interest that a taxpayer might
have,” and that to permit properties held in
tenancy to escape the lien would “facilitate “At argument, counsel for
abuse of the federal tax system” by allowing respondent seemed to agree
married couples to shield their property from
individual liens. that if a teacher in any of the
The problem, as Justice Scalia and Tho- thousands of covered class-
mas point out in their dissents, is that this was
preceisely what had been permitted for more rooms in the Nation puts a
than 50 years in states where marital property
can be held in tenancy. In fact, the Supreme
happy face, a gold star, or a
Court’s own precedent supported Mrs. Craft’s disapproving remark on a
position. Writes Justice Thomas, “Just as I am
unwilling to overturn this Court’s
class assignment, federal law
longstanding precedent that States define and does not allow other students
create property rights and forms of ownership,
I am equally unwilling to redefine or dismiss to see it...We doubt Congress
as fictional forms of property ownership that meant to intervene in this
the State has recognized in favor of an amor-
phous federal common-law definition of prop- drastic fashion with tradi-
erty.” Justice Scalia wrote separately to em- tional state functions.”
phasize that the Court’s finding that the ten-
ancy ownership was a “fictional” form of - Justice Anthony Kennedy
property rights is absurd, since corporations
are also a legal fiction in that regard, yet their Owasso Public Schools v. Falvo
legitimacy is unquestioned. We agree with
Justice Scalia and Justice Thomas, and be-
lieve the Court wrongly decided this case.
CMDC: The Supreme Court Year in Review, 2001-2002
“ I do not distinguish by the
eye, but by the mind, which
is the proper judge of man.”
- Seneca
2002-2003 Preview
As of June 27, 2002, the Supreme Court
has granted writs of certiorari in 38 cases and
held them over for argument in their next term,
which opens Monday, October 7, 2002. Be-
low are brief summaries of cases that CMDC
will be following in the coming year.
Kentucky Association of Health Plans, Inc.
v. Miller, Decided September 7, 2000, by a
2-1 vote of the Sixth Circuit. The Court will
decide whether a state law which compels
HMOs to cover services provided by any doc-
tor in the HMO’s geographic region is pre-
empted by the federal Employee Retirement
Income Security Act. This involves a similar
issue to the one decided this Term by the Court
in Rush Prudential HMO v. Moran, where the
Court ruled in favor of the state law. CMDC
disagreed with that decision.
Pharmaceutical Research & Manufactur-
ers of America v. Concannon, Decided May
16, 2001, by a 3-0 vote of the First Circuit.
The Court will decide whether a Maine law
designed to force drug companies into sell-
ing medications to Medicaid patients at lower
prices is unconstitutional under the Commerce
Clause, as well as the federal Medicaid stat-
ute. The trial court ruled the law invalid, but
the First Circuit reversed.
Eldred v. Ashcroft, Decided February 26,
2001, by a 2-1 vote of the District of Colum-
bia Circuit. This case involves a challenger
to the Copyright Terms Extension Act (CTEA)
of 1998, where Congress extended all exist-
ing U.S. copyrights for an additional term of
20 years. A group of public domain publish-
ers filed suit, claiming the CTEA violates the
Copyright Clause of the Constitution, which
says copyrights are to be secured for “limited
times.” They also claimed the extenstion vio-
lated their First Amendment rights to repro-
duce legitimate public domain works. The
D.C. Circuit dismissed both arguments.
Nevada Department of Human Resources
v. Hibbs, Decided December 11, 2001, by a
3-0 vote of the Ninth Circuit. This is an Elev-
enth Amendment challenge to the Family and
Medical Leave Act of 1993. The State of Ne-
vada is asking the Court to decide whether
FMLA was constitutionally enacted pursuant
to Congress’s Fourteenth Amendment pow-
ers, thereby abrogating the states’ immunity
26
from being sued in federal court under the
Eleventh Amendment. The United States has
intervened to oppose Nevada’s position.
Scheidler v. NOW, Inc. and
Operation Rescue v. NOW, Inc., Decided
October 2, 2001, by a 3-0 vote of the Seventh
Circuit. This case originated in 1986, when
the National Organization for Women filed a
lawsuit against a number of anti-abortion
groups, claiming their protests activities
amounted to extortion under the federal
Rackateer Influenced and Corrupt Organiza-
tions Act (RICO). In 1994, the Supreme Court
ruled the lawsuit could proceed regardless of
First Amendment concerns. At trial, a jury
awarded NOW and their co-plaintiffs injuctive
and monetary relief. The subject of this ap-
peal is whether injuctive relief is permitted in
a private RICO action. Additionally, the Court
will decide whether a related law, the Hobbs
Act, can define political protesting activities
as a form of criminal extortion.
Virginia v. Black, Decided November 2,
2001, by a 4-3 vote of the Supreme Court of
Virginia. This case involves a Virginia law
which states, “It shall be unlawful for any
person or persons, with the intent of intimi-
dating any person or group of persons, to burn,
or cause to be burned, a cross on the property
of another, a highway or other public place.”
On appeal, the Virginia Supreme Court re-
versed several convictions under this law,
holding the general ban on cross burning vio-
lated the First Amendment.
Moseley v. V Secret Catalogue, Inc., Decided
July 30, 2001, by a 3-0 vote of the Sixth Cir-
cuit. This is a trademark infringement case in-
volving Victoria’s Secret, a national company,
and a Kentucky merchant operating under the
name “Victor’s Secret,” later “Victor’s Little
Secret.” Victoria’s Secret filed suit, claiming
Victor’s, owned by Victor and Cathy Moselet
was violating their trademark. The legal ques-
tion was whether the Moseleys’ actions caused
“dilution” of Victoria’s Secret’s brand name,
even though the company could show no di-
rect economic damage had been caused by the
Moseleys’ store, which was not, in their view,
a direct competitor. The trial court and the Sixth
Circuit ruled for Victoria’s Secret, concluding
the law was intended to “catch dilution” be-
fore actual economic harm occurred.
CMDC: The Supreme Court Year in Review, 2001-2002
Norfolk & Western Rail Co. v. Ayers, De-
cided by the Circuit Court of West Virginia
for Kanawha County. Six retired
railworkers sued their former employer,
claiming that exposure to asbestos while
on the job contributed to various lung prob-
lems. While none of the plaintiffs actually
contracted lung cancer, they claimed “fear”
of developing cancer due to asbestos ex-
posure justified damages. The trial judge
instructed the jury not to consider any fac-
tors besides asbestos exposure (such as the
the plaintiffs’ chain smoking) which might
have contributed to the “fear” of cancer.
The jury awarded a combined $5.8 million
in damages, even though some of the plain-
tiffs never had any lung problems at all.
The Supreme Court of West Virginia de-
cided not to hear the appeal, but the U.S.
Supreme Court took the unusual step of
granting a writ of certiorari to a state trial
court, because of concerns over applica-
tion of the Federal Employer’s Liability
Act in this case. FELA allows employees
of a railroad to sue in any state where the
railroad operates, and West Virginia is con-
sidered a popular forum for such suits,
because juries there tend to grant large
damage awards and there are limited op-
tions for appeal.
State Farm Mutual Automobile Insur-
ance Co. v. Campbell, Decided October
19, 2001, by a 4-1 vote of the Supreme
Court of Utah. This case stems from a 1981
traffic accident, which resulted first in liti-
gation between the accident victim and
State Farm insurance, and then a second
suit where the victim sued State Farm for
fraud, bad faith and infliction of emotional
distress. At trial the plaintiff won $2.6 mil-
lion in compensatory damages and $145
million in punitive damages. The trial court
permitted evidence of State Farm’s national
business practices to be considered, even
though that appeared to conflict with a
contrary holding of the U.S. Supreme
Court. The Court will now decide whether
the punitive damage award violates due
process.
Sprietsma v. Mercury Marine, Decided
August 16, 2001, by a 5-1 vote of the Su-
preme Court of Illinois. This case involves
a wrongful death suit brought by a widow
who claimed Mercury Marine manufac-
tured a defective boat motor. The plaintiff
claimed that the motor should have con-
27
tained a propeller guard, an item the U.S.
Coast Guard had considered requiring pur-
suant to its authority under the Federal
Boat Safety Act (FBSA). By deciding not
to require the propeller guards, the Illinois
Supreme Court held that the plaintiff in this
case was preempted from pursuing her
claim against Mercury Marine under
FBSA. Justice Rita Garman, writing for the
Illinois majority, said that allowing the
plaintiff to recover damages here “would
in effect, create a propeller guard require-
ment, thus frustrating the objectives of
Congress in promulgating the FBSA.” The
U.S. Supreme Court will review this deci-
sion, to determine whether the federal law
should preempt the Illinois suit.
FCC v. Next Wave Communications,
Decided June 22, 2001, by a 3-0 vote of
the District of Columbia Circuit. In 1997,
Next Wave successfully bid $47.4 billion
for 63 broadband PCS licenses at an auc-
tion conducted by the Federal Communi-
cations Commission. The company was
allowed, under an FCC regulation, to pay
for the licenses in installments, with the
understanding that failure to make any pay-
ment on time would result in immediate
cancellation of the licenses. “A conservative government
In 1998, Next Wave filed for Chapter
11 protection under the Bankruptcy Code.
is an organized hypocrisy.”
Chapter 11 stays any debts owed, includ- - Benjamin Disraeli
ing those owed to the government. A judge
of the U.S. Bankruptcy Court for the South-
ern District of New York found that Next
Wave could keep its licenses even after
nonpayment, because Section 525 of the
Bankruptcy Code prohibits the government
from revoking a license from a debtor for
nonpayment of fees. The judge also re-
duced the amount Next Wave owed on the
liceneses themselves, saying they were
originally auctioned off at a price above
market value.
The Second Circuit in New York over-
turned the Bankruptcy Court’s decision, say-
ing that the FCC had the regulatory right to
revoke the licenses, and that this matter was
outside the Bankruptcy Code’s jurisdiction.
Next Wave then filed an appeal with the Dis-
trict of Columbia Circuit, which has juris-
diction over FCC regulatory decisions. That
court held that the Bankruptcy Code trumped
the FCC’s regulatory power, so Next Wave’s
licenses stand. The U.S. Supreme Court will
hear the appeal of the D.C. Circuit’s deci-
sion next Term.
CMDC: The Supreme Court Year in Review, 2001-2002
“The people’s government,
made for the people, made by
the people, and answerable to
the people.”
- Sen. Daniel Webster
Other Highlights
Among the other highlights of the
2001 Term not included in our analysis
were a number of cases dealing with
other issues of constitutional law and
interpertation. On the criminal side of
the ledger, a 6-3 Court found that execut-
ing the “mentally retarded” (a group
vaguely defined as adults with an IQ
below 60) was a categorical violation of
the Eighth Amendment’s ban on “cruel
and unusual punishment.” Justice
Stevens, writing for the Court in Atkins
v. Virginia, said that a “national consen-
sus” had emerged against executing the
retarded, and that justified invalidating
such executions in the states that had not
already prohibited the practice. The
Chief Justice and Justice Scalia, in sepa-
rate dissents, ridiculed the Court’s rea-
soning, saying that there was no basis
in law for declaring any “national con-
sensus” existed on the subject.
The Court also clarified (well, at-
tempted to clarify) its position on what
questions must be submitted to a jury at
trial in criminal cases. Following up
their holding two years ago in Apprendi
v. New Jersey, the Court issued two rul-
ings on the role of jurys. In Ring v. Ari-
zona, seven justices voted to invalidate
the capital sentencing procedures of five
states, holding that any factor which
might increase the maximum sentence to
death must be determined by a unani-
mous jury. Arizona law had directed
judges to decide “aggravating factors” in
capital cases seprate from the jury’s find-
ing of guilt.
However, in Harris v. United States,
the Court held that a jury need not de-
cide factors which only increase the
minimum sentence. William Harris was
convicted of illegally distributing nar-
cotics, and was likely facing a six-month
jail sentence, except that he was in pos-
session of a firearm at the time of his
arrest, requiring the judge to give him a
minimum sentence of seven years under
law. Five justices found that it was con-
stitutional to leave this question to the
judge, since it did not increase the maxi-
mum penalty, only the minimum.
The Court also ruled on a case stem-
ming from the 2000 Census, Utah v.
Evans. The State of Utah had sued to get
28
an additional seat in the House of Rep-
resentatives, which they claim was ap-
portioned to North Carolina on the ba-
sis of a faulty method used by the gov-
ernment to count people who didn’t ac-
tually respond to the Census. Justice
Breyer, writing for the Court, said that
it was permissible for the Census to use
“hot-deck imputation” to extrapolate
data from non-responding households.
Since this method does not involve a sta-
tistical estimate of a wide population,
just specific households, Justice Breyer
said it did not violate the census law
(which prohibits statistical sampling) or
the Constitution, which requires an “ac-
tual enumeration” of the population for
apportionment purposes.
On the continuing issue of the Elev-
enth Amendment immunity of states
from suit in federal courts, the justices
extended that protection to cases involv-
ing administrative agencies. A 5-4 ma-
jority held in Federal Maritime Commis-
sion v. South Carolina Ports Authority
that adjudicative proceedings before an
executive branch agency should be
treated the same in terms of “sovereign
immunity” standards. Of particular note
in Justice Thomas’s majority opinion
was his contention that the Founders
would not have conceived of the notion
of ‘administrative agencies’ that would
exercise quasi-judicial powers. The im-
mense growth in the scope of the fed-
eral government, however, should not
justify erosion of a state’s legitimate sov-
ereign “dignity,” as Justice Thomas puts
it.
Finally, the Court issued a pair of de-
cisions involving the ongoing “deregu-
lation” of the telecommunications indus-
try under a 1996 Congressional act. In
the key decision, Verizon Communica-
tions v. FCC, actually a consolidation of
five cases, the Court held that the law
gave the federal government broad
power to dictate the terms by which lo-
cal telephone companies would be com-
pelled to provide competitiors with ac-
cess to their systems. The Court, led by
Justice Souter, said the FCC could exer-
cise its power even if it meant trampling
on a state’s prerogative to regulate intr-
astate utility rates.
CMDC: The Supreme Court Year in Review, 2001-2002 29

Conclusion
Based on the Court’s 2001-2002 decisions, CMDC has identified four
key areas where continued debate and expanded activism will be criti-
cal. While the Court’s rulings did not only impact these areas, we be-
lieve they are the ones most critical to ensuring America’s continued
protection of economic freedom and individual rights:

Property rights. The Court’s ruling in the Tahoe case will likely
embolden local governments and environmental groups to continue pur-
suing multi-year “moratoria” as a means of negating an individual’s right
to use his land as he chooses. It is imperative that new zoning laws, such
as “anti-sprawl” measures, be stopped at the city, town and state levels
before they are challenged in the courts, since the Fifth Amendment’s
guarantee of compensation for lost property is no longer considered sac-
rosanct by a majority of the Court.

Commercial speech. Although Western States was an important

victory for the protection of “commercial” speech from government regu-
lation, there is still a ways to go before the First Amendment distinction
from “political” speech is eliminated. Justice Thomas has proven a valu-
able ally in thwarting federal and state attempts to restrict businessmen
from speaking to promote their products and defend their interests. And
as a result of the Western States ruling, the U.S. Food and Drug Admin- “Reason is the life of the law;
istration is now actively soliciting public comment on how their policies nay, the common law itself is
affect the First Amendment rights of drug companies and pharmacists.
nothing else but reason...The
Business regulation. The Americans with Disabilities Act remains law, which is perfection of
the single greatest regulatory burden on the majority of American em- reason.”
ployers, virtually destroying their ability to dismiss and manage employ- - Sir Edward Coke
ees without fear of federal litigation. While the Court offered a number
of decisions favorable to employers with regard to the ADA this year,
more needs to be done.

Education. On the final day of the 2001 Term, the Court issued
conflicting rulings on public education. On the one hand, the declared
vouchers used in religous and private schools are constitutional, while
on the other hand they gave public school officials free rein to randomly
drug test essentially any student without their parent’s permission. Nei-
ther of these decisions will likely settle the underlying constitutional
and policy issues, however, and continued monitoring and activism will
be required to bring about an end to the public education monopoly.

CMDC will continue to monitor the activitied of the entire federal

court system throughout the summer, and into the Supreme Court’s Oc-
tober 2002 Term, where the issues of economic rights and individual
liberty will continue to be decided in the “highest court in the land.”
 About CMDC
The Center for the Moral Defense of
Capitalism was founded in 1998 to
advance the social welfare of the nation
by presenting a moral foundation for
individualism and economic freedom to
the public, policymakers and the
judiciary. CMDC provides analysis of
human affairs through the application of
Ayn Rand’s philosophy of Objectivism.

At the center of CMDC’s mission is our

argument that all human action may be
voluntary, free of coercion, and that the
initiation of physical force must be
banished from all human relationships.
We believe in a just government that acts
as an agent of its citizens, charged with
the sole mission of employing retaliatory
physical force against the initiation of
physical force.

CMDC’s recent activities include a series

of comment letters to the Federal Trade
Commission in support of the rights of
physicians, a brief to the U.S. Court of
Appeals in support of Microsoft
Corporation, advocacy in defense of
industry and technology against
environmentalism, and a lobbying effort
in support of private cloning research.

PO BOX 16325
ALEXANDRIA, VA 22302-8325
WWW.MORALDEFENSE.COM