Does the Constitution Require States to Provide an Insanity Defense to Defendants in Criminal Proceedings?

“Dec 07 007”by beerimoalem is licensed under CC BY-NC-SA 2.0

Margo Brandenburg, Associate Member, University of Cincinnati Law Review

I. Introduction 

American courts have historically reserved criminal punishment for morally culpable defendants.[1] Dating back to the English legal system, a deeply ingrained principle of American criminal jurisprudence has been that those without moral culpability should be excused from legal punishment.[2] With this in mind, courts around the country adopted the insanity defense to reflect this tradition that excuses individuals who are unable to tell whether their act was right or wrong.[3]                                                 

Today, this deeply ingrained principle of criminal law is being called into question. This month, the Supreme Court will listen to arguments about whether the Eighth and Fourteenth Amendments permit states to abolish the insanity defense in Kahler v. Kansas.[4] Part II of this article discusses the history of the insanity defense in the United States and how it is used today. Part III addresses the background and arguments posed in Kahler. Part IV argues that states should be constitutionally permitted to create an alternative method from the traditional insanity defense. Part V concludes that allowing the states to determine their own criminal laws is the proper policy decision.  

II. The Insanity Defense: Then and Now

Criminal laws are not uniform in the United States. There is no national consensus on the law that governs the standards of using the insanity defense.[5] Each state, the District of Columbia, and the federal system developed their own unique set of criminal laws.[6] With this in mind, this section will focus on the relevant laws of the majority of the United States. 

A. The Insanity Defense Through History

The insanity defense is known to be a staple throughout every jurisdiction in the history of the United States.[7] Traditionally, it was affirmatively pleaded as a defense by a criminal defendant that bore the burden of persuasion.[8] The standard for the defense of insanity has not been uniform in its formulation, but every jurisdiction throughout the country has recognized some form of an insanity defense in criminal proceedings in the past.[9]

States that provide the insanity defense today generally follow some version of the two-part M’Naghten rule.[10] Also known as the “right and wrong” test, the M’Naghten rule provides that a defendant should not be held criminally liable if he does not know the nature of his act, or if he does not know right from wrong with respect to the act.[11] Under this rule, the defense must prove that at the time of the criminal act, the accused did not know his actions were contrary to the law.[12]

The insanity defense was forced into spotlight after John Hinckley Jr.’s attempted assassination of then-President Ronald Reagan on March 30, 1981.[13] After the verdict of not guilty by reason of insanity came out, public suspicion exploded over the use of the insanity defense in criminal proceedings.[14] Hinckley’s acquittal outraged the American public, not only due to his thin record of dealing with mental illness, but also because of his calculated efforts in committing the crime.[15] Even today, decades after the Hinckley verdict, lawyers witness the ruling’s effect on the insanity defense. The chances of a defendant being acquitted by reason of insanity are slim and the threshold is high.[16] The public’s hostile feelings toward the insanity defense has led states to create legislation that reflects this disproval.[17]

B. Changing Times for The Insanity Defense 

Since the Hinckley case, four states around the country have essentially abolished a criminal defendant’s ability to plead insanity as a defense to a crime: Idaho, Montana, Utah, and Kansas.[18] Thus, if the Court decides that states may adopt alternative methods for looking at a defendant’s mental state, the majority of states around the country that currently use the insanity defense may begin reconsidering their laws. States have not uniformly replaced the insanity defense, but one alternative method states adopted is the “mens rea approach.”[19] The mens rea approach allows evidence in to attest to a defendant’s mental disease or defect as it effects the mental element of the crime.[20] Accordingly, this approach does away with the ability of a defendant to show a lack of understanding of right from wrong as a defense to the prima facie case.[21]

C. The Question Left Unanswered by Clark v. Arizona[22]

It is undetermined whether the Constitution allows states to abolish the traditional insanity defense and replace it with another method to evaluate a defendant’s culpability. The Supreme Court addressed this question briefly in Clark.[23] In Clark, a man killed a police officer in the line of duty and was sentenced to life in prison.[24] The man argued that Arizona’s insanity test violated the Fourteenth Amendment’s due process clause because it impermissibly excluded the first portion of the two-part M’Naghten test.[25] In response, the Supreme Court explained that although seventeen states and the federal government had adopted versions of the M’Naghten test, the M’Naghten test was not the only standard that comports with due process.[26] In addition, the Court stated that no particular formulation had yet evolved into a baseline for due process, and that rules regarding insanity should be left to state choice.[27] The Court went on to say that it has “never held that the Constitution mandates an insanity defense, nor has it held that the Constitution requires one.”[28] Because, in the Court’s opinion, the case did not call for an evaluation of the issue of the insanity defense, the Court did not discuss the issue.[29]

III. Kahler v. Kansas[30]

A. Background 

On November 28, 2009, James Kraig Kahler killed four of his family members including his wife, two children, and his wife’s grandmother, after breaking into his wife’s grandmother’s home in Kansas.[31] The state charged him with one count of capital murder, or, in the alternative, four counts of first-degree murder, and one count of aggravated burglary.[32] In the district court, the defense did not dispute that Kahler had murdered his family members.[33] Instead, the defense asserted that due to Kahler’s severe depression during the time of the crime, Kahler was incapable of forming the intent and premeditation required to establish capital murder.[34] Testimony from a forensic psychiatrist confirmed that Kahler’s depression and his capacity to manage his own behavior had been so decreased that he could not refrain from committing the act.[35] Even given this evidence, the jury convicted Kahler of aggravated burglary and capital murder, and sentenced him to death.[36]

Kahler appealed his case to the Kansas Supreme Court, where he questioned the constitutionality of a Kansas statute that provides “[i]t is a defense to a prosecution under any statute that the defendant, as a result of disease or defect, lacked the mental state required as an element of the offense charged. Mental disease or defect is not otherwise a defense.”[37] Specifically, Kahler argued that this statute violated the due process rights of defendants because it offends a principle of justice that is so important that it is fundamental.[38] The Kansas statute is Kansas’s version of the mens rea approach to determining criminal liability.[39] Kansas replaced the M’Naghten rule with the mens rea approach in 1996.[40] The Kansas Supreme Court stated that it already determined that Kansas’s mens rea approach does not offend due process under either the United States or Kansas constitutions, so the court would not consider the argument again.[41] The Kansas Supreme Court then affirmed the ruling of the district court.[42] Kahler appealed the decision again, this time to the Supreme Court of the United States.

B. Kahler’s Arguments 

To the Supreme Court of the United States, Kahler’s brief framed the question presented as whether states are permitted to abolish the insanity defense.[43] In short, Kahler’s most noteworthy arguments were that Kansas’s lack of an insanity defense violates the Fourteenth Amendment’s due process clause and the Eighth Amendment’s restriction on cruel and unusual punishment.[44]

1. Fourteenth Amendment

Kahler articulated that the insanity defense should be preserved within the states because it is so rooted in our nation’s history that the defense became a fundamental right that cannot be taken away without the due process of law.[45] Kahler deep-dove into the history of the insanity defense around the country to show that the defense should not be abolished because it represents a deeply ingrained principle of American criminal jurisprudence – that moral blameworthiness is the prerequisite for criminal punishment.[46]

2. Eighth Amendment

In the next part of his brief, Kahler argued that Kansas’s mens rea approach is in violation of the Constitution because there is no punishment more cruel and unusual than one asserted on someone who is unable to understand the nature of his wrongdoing.[47] Noting that the Court’s Eighth Amendment jurisprudence has historically centered around cruel punishment, Kahler cited Robinson v. California, where the Court used the Eighth Amendment to prohibit a criminal conviction.[48] Kahler’s Eighth Amendment argument was based on the conclusion that punishing the insane does not advance any goals of the current criminal law system.[49]

3. Validity of the Mens Rea Approach

Kahler argued against the validity of the mens rea approach as a mechanism for excusing morally blameless individuals.[50] He asserted that the mens rea approach does not account for an individual who intends to perform a criminal act, but may not have the capacity to understand that the criminal act is wrong.[51] As a result, Kahler argues that the insanity defense covers more ground than the mens rea approach – mentally incapacitated individuals are more likely to get excused for their criminal activity when they are able to plead insanity. [52]

C. Kansas’s Arguments

Kansas framed the issue very differently than Kahler, saying that the state has not “abolished” the insanity defense, but rather, it has “redefined” the defense to adopt a mens rea approach instead.[53]

1. Fourteenth Amendment

Counsel for Kansas argued that the mens rea approach does not violate the due process clause of the Fourteenth Amendment.[54] In support of this argument, Kansas asserted that the insanity defense is not rooted in our nation’s history.[55] In fact, Kansas noted that the insanity defense does not enjoy widespread use or acceptance in any capacity – the utilization of the defense has not been uniform in its formulation throughout history.[56] To add to this, Kansas asserted that due process does not require a particular insanity test, as noted by the Clark decision.[57] Lastly, Kansas argued that because an individual does not believe the crime they committed was wrong does not make them blameless.[58] Kansas posed an example of someone killing an abortion doctor because the person believes that abortions are wrong.[59] Even if that individual believes the killing of the abortion doctor was justified, they are not morally blameless, and should not escape criminal prosecution.[60]

2. Eighth Amendment 

Kansas also argued that the mens rea approach to insanity is constitutional under the Eighth Amendment. First, Kansas argued that Kahler’s claim is not properly before the Court because Kahler did not bring the Eighth Amendment claim to the Kansas Supreme Court.[61] Even on the merits, Kansas asserted that convicting individuals who do not realize their criminal actions are wrong does not constitute cruel and unusual punishment.[62] Specifically, Kansas argued that the history of the Eighth Amendment was to protect against cruel and unusual punishments, and stretching the Amendment to reach affirmative defenses invades on a state’s ability to define its own criminal laws.[63]

3. Attack on Kahler’s Insanity 

Lastly, Kansas argued that even the right and wrong test would not rid Kahler of liability for his actions because he was not insane at the time he murdered his family.[64] According to Kansas, Kahler was a calculated, cold-blooded killer, as evidenced by the jury’s finding that he should be condemned to death.[65] Due to this, Kansas asserted that even if Kahler was presented with the ability to use the insanity defense, he would not be relieved of punishment.[66] As a result, Kansas asserted that Kahler’s death sentence should be affirmed by the Court.[67]

IV. Discussion  

Kansas’s version of the mens rea approach allows a specific group of defendants who believe they are justified in committing the crime to be sent to prison even if they have a mental illness. For example, if a person is in a grocery store check-out and they think that the shopper in front of them is a bug and punches the shopper to death, they would not have the mens rea to commit a crime because they did not intend to commit murder –  they thought that person was just a bug. On the other hand, if a person is having hallucinations and thinks that the shopper in front of them in the grocery store is a terrorist and subsequently strangles the shopper to death, the person still has the requisite mens rea to commit the crime of murder. In this case, the insane person would think that they were justified in committing the murder. This person, who truly believes they were justified in murdering, likely would be sent to prison in a state that has adopted the mens rea approach. In a state that utilizes the insanity defense, however, the person may have a viable chance to be found not guilty by reason of insanity. Kansas’s version of the mens rea approach is potentially problematic for the mentally ill people who get sent to prison in a state following the mens rea approach. These individuals are less likely to get the sufficient mental health medical attention in a prison system.[68]

While some individuals who cannot tell right from wrong should be institutionalized rather than imprisoned, it is a stretch to say that knowledge of wrongfulness is a necessity when it comes to declaring someone mentally insane. Individuals who murder people, believing that the murder is justified, are not all innocent. A murderer should not be let off scot-free just because they have some kind of illness on the side; in order to be found not guilty by reason of insanity, the person must have murdered because of his mental illness. The mens rea approach effectively encompasses this reasoning, ensuring that only those who are truly blameless get medical attention. 

Although Kansas’s approach to determining insanity may not perfect, the Supreme Court should still defer to individual state’s judgment in adopting criminal laws and determining who should be deemed blameless. As evidenced by Clark, the affirmatively pleaded insanity defense is not a requirement to preserve a defendant’s due process rights. Thus, a state is not violating due process rights when it replaces the traditional insanity defense with another method like the mens rea approach. Even if the insanity defense is rooted in our history, evidence of a defendant’s mental state is not lost using the mens rea approach. Under the mens rea approach, evidence of insanity may still be brought in to attest to the defendant’s mental state at the time of the crime, but during a different point in the court proceeding. Thus, individuals are not losing their right to present an argument that they are insane. In effect, the Court should find that there has been no Fourteenth Amendment violation by Kansas’s adoption of the mens rea approach. 

Kahler’s Eighth Amendment claim is unconvincing. The Eighth Amendment protects against cruel and unusual punishments. The Court should not to get into the nit-picking of whether each individual criminal defendant’s punishment was a violation of the Eighth Amendment. If the Court were to do so, it would be wrongfully invading on state court’s right to interpret criminal laws within the state. Additionally, the Supreme Court has recognized the longstanding deference to the states in determining the extent to which mental illness may excuse liability for a crime.[69]

V. Conclusion 

The Supreme Court should find that, given the sound arguments presented by Kansas and other public policy considerations, the ruling of the Kansas Supreme Court should be affirmed in Kahler. A ruling affirming the Kansas Supreme Court will likely prompt many states to reconsider their use of the insanity defense, and possibly reformulate their laws to model something like Kansas’s mens rea approach.[70] Regardless of the downsides of the mens rea approach that Kansas has adopted, Kansas has not violated any constitutional principles by moving away from the traditional insanity defense. Given the wide deference given to states to determine criminal responsibility, Kansas has properly used its discretion in deciding to allow evidence of insanity to attest to the mens rea of the crime committed. As discussed, the traditional principle that morally blameless individuals should not be criminally punished is one of the highest values in criminal law. Kansas has showed us that this traditional principle of American law can still be preserved even if alternative methods are used to determine a defendant’s mental state at the time of a crime. 


[1]Brief for The American Bar Association as Amicus Curiae Supporting Petitioner at 5, Kahler v. Kansas, (No. 18-6135), US. S. Ct. Briefs LEXIS 2132 at *5. 

[2]Id

[3]Id.

[4]No. 18-6135 (petition for cert. filed Sep. 28, 2018).

[5]Id

[6]Robinson, Paul H. and Williams, Tyler Scot, “Mapping American Criminal Law Variations Across the 50 States: Ch. 14 Insanity Defense” (2017). Faculty Scholarship. 1718. http://scholarship.law.upenn.edu/faculty_scholarship/1718.

[7]Daniel J. Nusbaum, Note, The Craziest Reform of Them All: A Critical Analysis of the Constitutional Implications of “Abolishing” The Insanity Defense, 87 Cornell L. Rev. 1509, 1517 (2002). 

[8]Id

[9]Robinson & Williams, supra note 6.

[10]Stephen P. Garvey, Agency and Insanity, 66 Buffalo L. Rev. 123, 127 (2018).

[11]State v. Kahler, 410 P.3d 105, 125 (2018) (quoting State v. Baker, 819 P.2d 1173 (1991)). 

[12]Id

[13]Natalie Jacewicz, After Hinckley, States Tightened Use of The Insanity Plea (Jul. 28, 2016, 10:20 AM), https://www.npr.org/sections/health-shots/2016/07/28/486607183/after-hinckley-states-tightened-use-of-the-insanity-plea.

[14]Id. 

[15]Jennifer S. Bard, Re-arranging Deck Chairs on the Titanic: Why the Incarceration of Individuals with Serious Mental Illness Violates Public Health, Ethical, and Constitutional Principles and Therefore Cannot Be Made Right by Piecemeal Changes to the Insanity Defense, 5 Hous. J. Health L. & Pol’y 1, 34 (2005). 

[16]Id.

[17]Brief for The American Bar Association as Amicus Curiae Supporting Petitioner at 5, Kahler v. Kansas, (No. 18-6135), US. S. Ct. Briefs LEXIS 2132 at *5.

[18]Daniel J. Nusbaum, Note, The Craziest Reform of Them All: A Critical Analysis of the Constitutional Implications of “Abolishing” The Insanity Defense, 87 Cornell L. Rev. 1509, 1515 (2002). 

[19]State v. Kahler, 410 P.3d 105, 125 (2018). 

[20]Id. (citing State v. Jorrick, 4P.3d 610 (2000)).

[21]Id.  

[22]548 U.S. 735 (2006).

[23]Id.

[24]Id.at 743.

[25]Id. at 746. 

[26]Clark v. Arizona, 548 U.S. 735, 752 (2006).

[27]Id

[28]Id.at 752 n.20 (2006).

[29]Id.

[30](No. 18-6135) (petition for cert. filed Sep. 28, 2018).

[31]State v. Kahler, 410 P.3d 105, 114 (2018).

[32]Id. at 113.

[33]Id. at 114.

[34]Id.

[35]Id.

[36]Id. at 124. 

[37]Id.

[38]Id. at 125.

[39]Id. at 125. 

[40]Id.

[41]Id. (citing State v. Bethel, 66 P.3d 840 (2003)).

[42]State v. Kahler, 410 P.3d 105, 112 (2018).

[43]Brief for Petitioner at i, Kahler v. Kansas, (No. 18-6135) 2019 U.S. S. Ct. Briefs LEXIS 2056 at *10. 

[44] Brief for Petitioner at 2, Kahler v. Kansas, (No. 18-6135) 2019 U.S. S. Ct. Briefs LEXIS 2056 at *10.

[45]Id. at 16. 

[46]Id. at 14.

[47]Id. at 29.

[48]Id. (citing Robinson v. California, 370 U.S. 660, 667 (1962) (holding that conviction for the status of being a drug addict is an Eighth Amendment violation)).  

[49]Id. at 33-35. (Discussing why punishing insane people does not advance criminal law values of retribution, deterrence, incapacitation, or rehabilitation). 

[50]Brief for Petitioner at 40, Kahler v. Kansas, (No. 18-6135), 2019 U.S. S. Ct. Briefs LEXIS 2056 at *70.

[51]Id. at 41. 

[52]Id.

[53]Brief for Respondent at 8, Kahler v. Kansas, (No. 18-6135), 2019 U.S. S. Ct. Briefs LEXIS 2974 at *16. 

[54]Id. at 18.  

[55]Id.

[56]Id. (citing Clark v. Arizona, 548 U.S. 735, 749 (2006)).

[57]Brief for Respondent at 19, Kahler v. Kansas, (No. 18-6135), 2019 U.S. S. Ct. Briefs LEXIS 2974 at *39.

[58]Id. at 40.

[59]Id. at 41.

[60]Id

[61]Id. at 46-47.

[62]Brief for Respondent at 47, Kahler v. Kansas, (No. 18-6135), 2019 U.S. S. Ct. Briefs LEXIS 2974 at *60-61

[63]Id. at 47-48. (citing Clark v. Arizona, 548 U.S. 735, 749 (2006)).

[64]Id. at 55. 

[65]Brief for Respondent at 56, Kahler v. Kansas, (No. 18-6135), 2019 U.S. S. Ct. Briefs LEXIS 2974 at *25-26. 

[66]Id.

[67]Id. at 57.

[68]Christina Canales, Note, Prisons: The New Mental Health System, 44 Conn. L. Rev.1725, 1748 (2012).

[69]Brief for Respondent at 15 n.3, Kahler v. Kansas, (No. 18-6135), 2019 U.S. S. Ct. Briefs LEXIS 2974 at *24. (citing Brief of the United States as Amicus Curiae, Clark v. Arizona, 548 U.S. 735 (2006) (No. 05-5966), 2006 WL 542415, at *9-10).

[70]Amy Howe, Argument preview: Justices to hear challenge to lack of insanity defense, SCOTUSblog (Sep. 30, 2019, 4:18 PM), https://www.scotusblog.com/2019/09/argument-preview-justices-to-hear-challenge-to-lack-of-insanity-defense/

Ohio Supreme Court Radically Expands State Power Over Home Rule in Cleveland v. State

Giant Gavel” by Sam Howzit is licensed under CC-BY 2.0.

William Malson, Associate Member, University of Cincinnati Law Review

I. Background

In 2003, the City of Cleveland (“the City”) passed the “Fannie Lewis Law,” requiring public-construction contracts of $100,000 or more to mandate that city residents perform 20% of the total hours worked under the contract.[1] The penalty for failure to comply with this contractual term included damages of up to 2.5% of the final amount of the contract.[2] In 2006, the General Assembly enacted R.C. 9.75, which prohibited a public authority from requiring a contractor for public improvements to employ a certain number or percentage of city residents, in direct conflict with the Fannie Lewis Law.[3] In response, the City challenged the constitutionality of R.C. 9.75, claiming that the General Assembly improperly invoked Oh. Const. art. II, § 34, pertaining to the welfare of employees, and that the statute infringed upon the City’s “Home Rule” authority under article XVIII, §§ 3 and 7, granting municipalities the power of local self-government.[4] Until 1989, these provisions were interpreted in favor of local self-government. Over the next thirty years, these provisions lost almost all power, culminating in a radical expansion of § 34 in City of Cleveland v. State, decided on September 24, 2019.

This article discusses how the Supreme Court has eroded Home Rule since 1989 by expanding the scope of article II, § 34, and recommends that the Supreme Court of Ohio should reconsider Cleveland and overturn the case that contributed to its recent ruling, City of Rocky River v. State Emp. Rels. Bd., 43 Ohio St.3d 1, 539 N.E.2d 103 (1989). 

II. Home Rule

Oh. Const. art. XVIII, § 7 grants municipalities power to adopt a charter for its government and exercise all powers of local government, subject to § 3, which additionally grants municipalities the authority “to adopt and enforce within their limits such local police, sanitary and other similar regulations, as are not in conflict with general laws.” These local and municipal powers are referred to as “home rule powers.”[5] Before 1989, the court had consistently held that general laws of Ohio could only affect the latter portion of § 3, namely, the power to enforce local police, sanity and other similar regulations.[6] All other aspects of home rule were given, constitutionally, to municipalities. To effectuate this distinction, the “statewide concern doctrine” emerged in 1929.[7] As a later court would put it, “[i]t is a fundamental principle of Ohio law that, pursuant to the ‘statewide concern’ doctrine, a municipality may not, in the regulation of local matters, infringe on matters of a general and statewide concern.”[8] Thus, if a local regulation affects the general public of the state as a whole more than the local inhabitants, the matter passes to the General Assembly.[9] This doctrine cut both ways: an Ohio law that was not on a matter of statewide concern unconstitutionally infringed upon local powers of self-government.[10] That all changed with Rocky River.[11]

The Rocky River court upheld an Ohio law requiring binding arbitration between a city and its safety forces in the event of a collective bargaining issue.[12] In doing so, it changed its historical interpretation of § 3 to include, under the general laws exception, the entirety of local self-government, “effectively read[ing] the home-rule provisions right out of the Ohio Constitution.”[13] In effect, the statewide concern doctrine was eliminated, and the general laws of Ohio superseded home rule.[14]

III. Article II, § 34

In the same decision, the Rocky River court expanded the state’s power under article II, § 34. § 34 grants the General Assembly the power to regulate the hours of labor, establish a minimum wage, and “provid[e] for the comfort, health, safety and general welfare of all employes; and no other provision of the constitution shall impair or limit this power.” The court held that the language of § 34 was “clear, certain and unambiguous,” and that collective bargaining was “indisputably concerned with the ‘general welfare’ of employees.”[15] Thus, the Ohio law constitutionally superseded local law. This decision laid the groundwork for the court to uphold, in City of Lima v. State, state prohibitions on political subdivisions from requiring its employees to reside within the city, and most recently, R.C. 9.75.[16]

In holding that the general welfare clause applies to city regulations on public-construction contracts, the Cleveland court defined “comfort” and “welfare” so broadly that it’s difficult to see how future legislation even remotely related to employees would fall outside the state’s power. “Comfort” includes “free[dom] from want or anxiety; mental ease or satisfaction or material well-being.”[17] “Welfare” includes “[s]tate of faring, or doing, well.”[18] Armed with the Cleveland court’s interpretation, the General Assembly could justify any regulation in the name of worker anxiety, satisfaction, or “doing well”—truly an incredibly power.

What makes expansion of § 34 so dangerous to home rule is its final clause, that “no other provision of the constitution shall impair or limit this power.”[19] By expanding its scope, the court gives the General Assembly carte blanche—limited only by the U.S. Constitution—as long as its legislation somehow affects the welfare of employees. In effect, the legislature may “advance the general welfare of employees notwithstanding other protections secured by the [Ohio] Bill of Rightsor the Home Rule Amendment” (emphasis added).[20]

IV. General Laws

The final protection of municipalities is the court’s test of general laws. Despite the obvious trend of the court to erode home rule with the practical elimination of the statewide concern doctrine and the expansion of § 34, courts still devised a test, fully assembled in City of Canton v. State, that limited the state’s authority over municipalities:

To constitute a general law for purposes of home-rule analysis, a statute must (1) be part of a statewide and comprehensive legislative enactment, (2) apply to all parts of the state alike and operate uniformly throughout the state, (3) set forth police, sanitary, or similar regulations, rather than purport only to grant or limit legislative power of a municipal corporation to set forth police, sanitary, or similar regulations, and (4) prescribe a rule of conduct upon citizens generally.[21]

This test was followed by the court in 2017 in City of Dayton v. State,[22]but it may not be around for long. Justice DeWine, in his concurring opinion in Cleveland, recommends replacing the general laws test with a definition found in the 1910 edition of Black’s Law Dictionary:

A law framed in general terms, restricted to no locality, and operating equally upon all of a group of objects, which, having regard to the purposes of the legislation, are distinguished by characteristics sufficiently marked and important to make them a class by themselves, is not a special or local law, but a general law.[23]

Such a broad definition leaves municipalities with almost no protection against state encroachments on home rule. Effectively, any law that applies statewide would be a general law—and would supersede home rule.

V. The Court Should Overturn Rocky River and Cleveland

DeWine is right to reject the new general law test. As originally understood, “general law” was a highly inclusive term. But the state’s power under article II, § 34, and article XVIII, §§ 3 and 7, was not.

§ 34: General Welfare of Employes

The court’s interpretation of § 34 powers has expanded far beyond its original scope. While the provision was certainly a broad grant of authority to the general assembly,[24] debate on the proposed amendment during the Ohio Constitutional Convention of 1912 was limited to wages, workers conditions, protection against danger, and a “fair working day.”[25] In modern terms, the amendment, originally conceived, was about minimum wages, maximum hours, and workplace conditions or hazards.[26] Cases shortly after the convention “paint[ed] a consistent picture showing that the . . . general-welfare clause was understood only to allow regulation of the workplace environment.”[27] For example, in 1916, the court considered the provision to be a “broad humanitarian policy of the state to safeguard the life, limb, health, and safety of its people employed in the industrial world” (emphasis added).[28] The court in Rocky River expanded the general welfare clause far beyond “what was conceivably intended,” allowing the Cleveland court to effectively allow all legislation that promotes the “general welfare of all employes” to render other constitutional provisions powerless.[29] Overturning Rocky River would correct this error.

§ 3: Home Rule

The Rocky River court erroneously held that general laws superseded not just police, sanitation, and similar regulations, but powers of local self-government. Prior to 1989, the court had consistently held otherwise. The majority justifies its casual dismissal with a mere footnote, quoting one single individual from the Ohio Constitutional Convention of 1912. The effect is to eliminate home rule. If Cleveland is an indication of what’s to come, municipalities may have cause to fear that any Ohio law would automatically supersede their own. Overturning Rocky River would correct this error as well.

Cleveland was decided incorrectly. Under the original meaning of article II, § 34, and article XVIII, §§ 3 and 7, R.C. 9.75 would not constitutionally override the Fannie Lewis Law. The court should determine, using the statewide concern doctrine, whether R.C. 9.75 is an unconstitutional encroachment of municipal home rule. Instead, the court radically expanded state power under § 34. Cleveland should be reconsidered, and Rocky River overruled.


[1]City of Cleveland v. State, 2019-Ohio-3820, ¶ 5-6 (hereafter “Cleveland”). 

[2]Id. at ¶ 6.

[3]See Ohio Rev. Code Ann. § 9.75 (LexisNexis 2019); Cleveland at ¶ 7.

[4]City of Cleveland v. State, 90 N.E.3d 979, 983 (8th Dist.), overruled by Cleveland.

[5]State ex rel. Toledo v. Lynch, 88 Ohio St. 71, 97, 102 N.E. 670 (1913), overruled on other grounds.

[6]State ex rel. Canada v. Phillips, 168 Ohio St. 191, 197, 151 N.E.2d 722 (1958).

[7]See Bucyrus v. State Dept. of Health, 120 Ohio St. 426, 166 N.E. 370 (1929).

[8]State ex rel. Evans v. Moore, 69 Ohio St.2d 88, 89-90, 431 N.E.2d 311 (1982).

[9]See Beachwood v. Bd. of Elections, 167 Ohio St. 369, 371, 148 N.E.2d 921 (1958); Cleveland Elec. Illum. Co. v. Painesville, 15 Ohio St.2d 125, 129, 239 N.E.2d 75 (1968).

[10]See City of Rocky River v. State Emp. Rels. Bd., 43 Ohio St.3d 1, 42, 539 N.E.2d 103 (1989) (Wright, J., dissenting); City of Cleveland v. State, 2017-Ohio-8882 at ¶ 9. 

[11]Rocky River, 43 Ohio St.3d at 12-13.

[12]Id. at 3.

[13]Id. at 42 (Wright, J., dissenting).

[14]Id.

[15]Id. at 15, 13 (Majority opinion).

[16]See City of Lima v. State, 122 Ohio St.3d 155, 2009-Ohio-2597, 909 N.E.2d 616.

[17]Cleveland at ¶ 22.

[18]Id.

[19]Oh. Const. art. II, § 34.

[20]Cleveland at ¶ 26.

[21]City of Canton v. State, 95 Ohio St.3d 149, 2002-Ohio-2005, 766 N.E.2d 963, syllabus.

[22]City of Dayton v. State, 151 Ohio St.3d 168, 2017-Ohio-6909, 87 N.E.3d 176, ¶ 15.

[23]Cleveland at ¶ 85 (DeWine, J., concurring).

[24]Am. Assn. of Univ. Professors v. Cent. State Univ., 87 Ohio St.3d 55, 61, 1999-Ohio-248, 717 N.E.2d 286.

[25]See Cleveland at ¶ 19; Cleveland at ¶ 93 (O’Connor, C.J., dissenting), Rocky River, 43 Ohio St.3d at 14-15.

[26]See Cleveland at ¶ 93 (O’Connor, C.J., dissenting), Rocky River at 28, 30 (Wright, J., dissenting).

[27]Cleveland at ¶ 70 (DeWine, J., concurring).

[28]Pittsburgh, C., C. & S. L. R. Co. v. Kinney, 95 Ohio St. 64, 70, 115 N.E. 505 (1916).

[29]Rocky River at 26-27 (Wright, J., dissenting).

Congressional Oversight: Overreach of Authority, or Entrenched Legal Tradition?

“U.S. Capitol Building_15”by US Department of State is licensed under CC BY-NC 2.0

Corey Bushle, Associate Member, University of Cincinnati Law Review

I. Introduction

On May 20, 2019 a D.C. District Court upheld the House of Representatives Oversight Committee’s power to conduct investigations pertinent to its legislative goals, even when those goals intersect with the President’s power.[1] The court held that the Committee had constitutional authority, through Congress’s implied power of inquiry, to request private financial statements of the President, including documents dated years prior to President Trump’s candidacy for president.[2] The decision is far from controversial when viewed in context with the Supreme Court’s jurisprudence on Congressional oversight and inquiry; the Court has not struck down an exercise of the Congressional inquiry power on Constitutional grounds since 1880.[3]

Nevertheless, the decision is important because it illustrates that, while the Supreme Court has paid lip service throughout its history to supposed limitations on Congress’s inquiry and oversight powers, these limitations are ultimately without real substance. This article will review the decision in Trump v. Committee on Oversight and Reform of the U.S. House of Representatives in context of U.S. legal tradition on legislative authority, analyzing whether the decision was correct. Finally, this article will examine whether the decision reflects a policy that will foster effective accountability between the President and Congress.

II. Background

The D.C. District Court’s decision in Trump v. Committee on Oversight and Reform of the U.S. House of Representatives came about from Congress’s massive, ongoing investigation into President Trump, his campaign, and his staff. After the President’s former attorney Michael Cohen testified before Congress alleging that the President routinely altered his financial statements in order to understate or overstate his financial position depending on the situation, the House Oversight Committee launched a series of inquiries into the President’s personal finances.[4] The Committee issued subpoenas to Mazars USA LLP, an accounting firm that provided services to the President, demanding access to several documents concerning the President himself and his affiliated organizations—the earliest of which was dated from 2011, well before Trump was even a presidential candidate.[5] The requests sparked a litigation clash between the President and the Oversight Committee over the extent of the legislative branch’s authority to investigate.

A. The President’s Arguments

The Court sorted President Trump’s arguments for why the subpoenas were unconstitutional into three general categories. First, the President argued that by allegedly investigating into the accuracy of a private citizen’s financial statements, the Committee was not engaged in “legislative” activity, but was usurping the executive and judicial branches by acting as law enforcement. Second, the President argued that since the scope of the inquiry extended beyond Trump’s time as a candidate for office, the Committee’s requests had nothing to do with government oversight, but was merely “exposure for exposure’s sake” of the conduct of a private citizen, which the Supreme Court has held to be an invalid purpose for a Congressional inquiry. Third, the President argued that the Committee did not act with a specific legislative purpose, but that it was conducting “roving oversight” without any end goal in sight, and that the financial documents from Mazars could not be related to any legislative purpose.[6]

B. The Court’s Decision

In granting summary judgement for the House Oversight Committee, the court rejected each of the President’s arguments.[7] As for the first point—that the Committee was usurping executive power by requesting documents that might reveal criminal wrongdoing—the court succinctly held that “[j]ust because a congressional investigation has the potential to reveal law violations does not mean such investigation exceeds the legislative function.”[8] Moreover, the court observed that Congress has wide latitude in its committee activities, and that courts require “exacting proof” to hold that Congress has improperly intruded into the coordinate branches of government.[9] According to the court, Congress would probably need to go as far as indicate that it intended to try the President at bar for criminal wrongdoing by itself, or go on a fishing expedition at the behest of the Department of Justice to secure documents for an investigation, for the Court to conclude that Congress’s true motive in issuing the subpoenas was not legislative, but executive or judicial. Since, in the court’s reasoning, this case clearly did not constitute such an extraordinary case of overstepping of Constitutional authority, the court deferred to the Oversight Committee and concluded that the subpoenas were a valid exercise of legislative power.[10]

After dismissing the first argument, the court turned to the President’s assertion that the Committee was investigating a private citizen’s affairs. Relying heavily on the Supreme Court’s 1880 decision in Kilbourne v. Thompson,[11] where the Supreme Court held that Congress does not have “the general power of investigating the private affairs of a citizen,” the President argued that, since the inquiry focused on activity that preceded his time in office, and the inquiry was not legislative in nature, Congress had no authority to request his private records.[12] Recounting Kilbourne and its unconvincing impact on Congressional inquiries, the court found that the case was largely “impotent” as a guiding principle to limit Congressional power, as no Supreme Court or Circuit Court decision had ever declared a Congressional inquiry unconstitutional because it investigated the private affairs of a citizen. The court characterized the true nature of the Kilbourne holding as one which prohibits Congress from investigating private affairs without a valid legislative purpose.[13] To offend that standard, the court said, a Congressional inquiry must have only one predominant result—an invasion of a person’s private affairs.[14] According to the court, the presence of an underlying invasive motive by individual members of the Committee could not overcome an otherwise valid inquiry connected to a legislative goal.[15]

To that end, the court found that the subpoenas could rationally lead to legislation on ethics and disclosure laws, as well as allowing the Committee to ensure the President’s compliance with the Foreign Emoluments clause—the Oversight Committee’s provided reasons for requesting the subpoenas.[16] Because these subjects were within Congress’s authority to legislate, the inquiry was at least facially valid. Thus, while the President cited several errant remarks by some Committee members that indicated a desire to embarrass or humiliate the President with the subpoenas, the Court declined to speculate as to the “true motive” of the investigation in the face of an otherwise valid legislative purpose.[17]

The President’s final argument contained two prongs. The President argued that the documents were not reasonably relevant to a legitimate legislative purpose, because (1) the request is akin to a “fishing expedition” for which the Committee had no reason to expect it to yield specific information and (2) any contemplated legislation that might be related to the documents would be unconstitutional, and thus the Committee has no valid legislative purpose.[18]

In dismissing the first part of the argument, the court held that the standard for Congressional inquiries, “pertinence” is a much lower bar to meet than the civil litigation standard of “relevance.”[19] Moreover, according to the court, the inquiry at hand would plainly meet either standard as the documents were relevant to the Committee’s investigation into ethics and conflict of interest laws.[20] As to the second portion of the President’s argument, the court held that since the Committee had a facially valid legislative purpose in investigating potential ethics and emoluments violations by the President, as evidenced by the admissions of Trump’s personal attorney, the courts could not overstep their Constitutional authority by ruling contemplated legislation unconstitutional; doing so would amount to issuing an advisory opinion, well outside the authority of federal courts.[21]

Having dispensed with all of the President’s arguments, and finding that the Oversight Committee’s requests were reasonably related to its claimed legislative motives in ethics, conflict of interest, and emoluments laws, the court granted summary judgement to the Oversight Committee.[22]

III. Analysis

The D.C. District Court’s decision in Trump v. Oversight Committee was clearly the correct result, as even the most cursory review of the Supreme Court’s decisions on Congressional investigative authority will show. In an era where public trust in government is at an all-time low,[23] now is not the time for courts to break from tradition to shield elected officials from internal scrutiny for potential wrongdoing, even when the likelihood of revealing such wrongdoing seems low. Moreover, the term “legislative power” is far from a self-defining concept, and courts should avoid rigidly construing this term when doing so has a high likelihood of eroding fundamental, well-established checks and balances between the legislature and the executive.

The Supreme Court has long held that Congress has the implicit power to conduct inquiries and issue subpoenas to ensure that its laws are operating as intended, and to serve an informing function which allows Congress to look into corruption or inefficiencies in government.[24] In the 1927 case McGrain v. Daugherty, the Court considered whether Congress had the power to compel a private citizen to appear before it and testify as necessary to achieve a legislative purpose, and whether it appeared that Congress was actually using the testimony for its offered purpose.[25]At issue in McGrain was alleged misconduct by Attorney General Harry Daugherty, which caused the Senate to authorize a House Committee to investigate Daugherty.[26] In the course of the investigation, the Committee subpoenaed Daugherty’s brother—a banker—to provide testimony and documents from the bank where he worked which were relevant to the charges against the Attorney General.[27] The Court upheld the constitutionality of the subpoenas, observing that the power to obtain information needed to carry out its duties has long been an accepted power of the legislature, predating the United States and stretching back to Colonial Legislatures and British Parliament.[28] The House of Representatives has exercised this power as early as 1792.[29]

The Court in McGrain concluded that even the State courts have near-uniformly held that legislatures possess authority to compel discovery of information to perform their duties.[30] Even before McGrain was decided, legal scholars acknowledged the deeply entrenched nature of the powers of legislative inquiry, punishment for contempt in legislative hearings, and the power to send for persons and papers.[31] In short, there is no reasonable basis to claim that requesting documents and information is not a “legislative power” within Anglo-American legal tradition. 

However, a key issue in both McGrain and Trump is the alleged “private citizen” status of the subpoena’s subject matter. This issue really contains two separate questions: first, does the legal tradition of legislative oversight make a distinction between “public” and “private” persons; and second, is there any compelling policy reason to treat public and private persons differently when it comes to Congress’s power to gather information and conduct oversight?

As for the first question, the answer seems to be a soft “yes.” In Kilbourne, which may be the only case where a Congressional subpoena was held unconstitutional by a federal court, the Court held that Congress had exceeded its authority by investigating an unfavorable settlement with a bank to which the United States was a creditor.[32] The case has often been cited—as President Trump did in Trump v. Oversight Committee—to support the proposition that Congress does not have the general power to investigate the private affairs of a citizen.[33] However, this supposed limitation has proved to be toothless in practice. Since Kilbourne was decided in 1880, no Court of Appeal or Supreme Court case has ever struck down a Congressional subpoena on the grounds that it was an “investigation into the private affairs of a citizen.”[34]

As for the second question, practicality requires that the answer be “no.” The vast majority of conduct regulated by Congress is private; to effectively create laws that punish white collar crime, Congress may need to inquire into private business affairs; if a new technology arises that poses a threat to the safety of its constituents, Congress must be able to summon private scientists and businesspersons familiar with the technology to effectively proscribe regulations. Moreover, the testimony of private individuals may be necessary even when Congress investigates public officials like the President. The case at hand is the perfect illustration of this principle; but-for the time frame of the Mazars documents, which includes documents before Trump’s presidency, there would be no question that in the interest of possible impeachment proceedings, for example, the House could subpoena the President’s records from a private company. However, since the Committee requested some documents from before Trump’s presidency began, the President argued that they were irrelevant to a goal of public oversight. Such an argument has no basis in the law; writing for the Court in Watkins v. United States,Chief Justice Warren observed that citizens are entitled to know the inner workings of their government, and that Congress has the power to aid in that pursuit.[35] Whether the President of the United States has committed crimes, some of which may be ongoing, certainly falls under the umbrella of the inner workings of government to which the public is entitled to know.

IV. Conclusion

Modern legal scholarship on the effectiveness of Congressional oversight is limited, and what little study exists on this subject is inconclusive.[36] If politicians engage in covert dealings with private entities that creates conflicts of interest and a risk of corruption, they cannot be allowed to shield their misconduct behind the private entity through an artificially-imposed barrier. Such a barrier would ensure the evisceration of Congressional Oversight as a potentially effective check on the Executive. Thus, courts must continue to give wide deference to the judgment of Congress when evaluating the Constitutionality of an investigation as an exercise of legislative power.


[1]Trump v. Committee on Oversight and Reform of the U.S. House of Reps., 380 F.Supp. 3d 76 (D.D.C. 2019).

[2]Id.at 82.

[3]Id. at 99.

[4]Id. at 84-85.

[5]Id. at 86.

[6]Id. at 96-97.

[7]See id. at 105.

[8]Id. at 97.

[9]Id.

[10]Id. at 98.

[11]103 U.S. 168 (1880).

[12]Trump, 380 F. Supp. 3d at 99.

[13]Id. at 100.

[14]Id.

[15]Id. at 101.

[16]Id. at 96.

[17]Id. at 101. 

[18]Id. at 101-103.

[19]Id. at 101.

[20]Id.

[21]Id. at 103.

[22]Id. at 105.

[23]Public Trust in Government: 1958-2019, Pew Research Center (Apr. 11, 2019), https://www.people-press.org/2019/04/11/public-trust-in-government-1958-2019/ (last visited Sept. 17, 2019).

[24]See e.g. McGrain v. Daugherty, 273 U.S. 135 (1927); Quinn v. United States, 349 U.S. 155 (1955); Watkins v. United States, 354 U.S. 178 (1957).

[25]273 U.S. at 154-55.

[26]Id. at 151-52.

[27]Id. at 152.

[28]Id. at 161-62.

[29]Id.

[30]  Id.at 165.

[31]James M. Landis, Constitutional Limitations on the Congressional Power of Investigation, 40 Harv. L. Rev. 153, 169 (1926).

[32]Kilbourne, 103 U.S. at 168.

[33]McGrain, 273 U.S. at 171.

[34]Trump v. Committee on Oversight and Reform of the U.S. House of Reps., 380 F. Supp. 3d 76, 99 (D.D.C. 2019).

[35]Watkins, 354 U.S. at 200.

[36]Carl Levin, Defining Congressional Oversight and Measuring its Effectiveness, 64 Wayne L. Rev. 1, 22 (2018).

US-China Trade War: The Authority to Levy Tariffs

Trading Post” by Felix63 is licensed under CC BY-NC-ND 2.0.

Theron Anderson, Associate Member, University of Cincinnati Law Review

I. Introduction

In a reaction to the economic activity between the United States and China, President Trump has exercised the presidential power to levy tariffs against the foreign rival.[1] The tariffs exercised are “taxes or duties that are imposed on a specific class of imports or exports.”[2] The specific tariffs exercised by President Trump are a tax on exports originating from China. In exercising this authority, questions arise of the origins of this power to place tariffs on China’s products and whether this power is well-suited in the hands of the Executive Branch. Interpreting the text of the Constitution to determine the correct course of action, it is clear that the Legislative Branch is the correct wielder of the power to levy tariffs. 

II. Background

Far before President Trump took office as the Commander in Chief, he expressed distaste for China’s trade practices.[3] While campaigning for the office, retaliation to the China’s trade practices stood as a pillar of his platform.[4] These comments came to fruition when President Trump signed a memorandum, dated March 22, 2018, directing an imposition of tariffs on Chinese products.[5] On June 15, 2018, the United States finalized and implemented the first list of 818 products that would be susceptible to a 25% tariff.[6] True to his statements before taking office, President Trump alleged that the motivation of this act was the unfair trading practices of China, as well as the amount of intellectual property theft occurring within their jurisdiction on their watch.[7] China was quick to impose tariffs of their own against the United States in retaliation to the power exercised by President Trump.[8]

Since the memorandum signed by President Trump, the United States and China engaged in a tit-for-tat tariff competition that has affected billions of dollars of goods, influencing those involved to label the activity as a trade war.[9] From the outset of the trade war initiated by President Trump, China appeared to be skeptical of the advertised motivation of the initial United States’ tariffs.[10] Some within China have the belief that the trade practices of China are pretext for the United States attempt to affect the continuous growth of China’s economy and spur a comeback of their own.[11]

In wars over trade, “victory can only be achieved when the country has more bargaining leverage than its opponent.”[12] It becomes a game of who can punish the opposition the most.[13] While both sides are hurting, neither side is clearly winning or losing.[14] A formula of no leverage and no clear victor results in a trade war with no clear end.[15] As the United States travels down the path with no true end, one could inquire about the authority of President Trump that is taking the country down that path. 

III. Separation of Powers 

An understanding of the separation of powers is key to building a foundational understanding of the authority that President Trump has wielded in the trade war against China. The term separation of powers was created by Charles-Louis de Secondat, a social and political philosopher in 18thcentury France.[16] This term divides political authority of the state into legislative, executive, and judicial powers.[17] Designating the three powers as branches of government, each is assigned a different role. Focusing on the two branches at issue regarding the power to tariff, the legislative branch is tasked with enacting laws of the state and appropriating the money needed to operate the government.[18] The executive branch is tasked with implementing and administering the public policy enacted and funded by the legislative branch.[19]

The intention of the model is to prevent the concentration of power in one unit and provide checks and balances.[20] Each branch is granted a limited authority to check another branches authority to ensure balance among the branches. 

Throughout the life of the Constitution, a natural ebb and flow has existed between the branches.[21] At times, a certain branch might have wielded more power than expressly granted to it by the text of the Constitution. Due to the system of checks and balances set in place, the government is equipped with the tools to maintain the desired balance. 

IV. Presidential Tariff Power 

As written in the Supreme Law of the Land, the Constitution, Congress “shall have the Power to lay and collect Taxes, Duties, Imposes and Excises.”[22] They shall also “regulate Commerce with foreign Nations, and among the several States.”[23] And, perhaps most importantly, Congress has the authority “to make all Laws which shall be necessary and proper” to carry out the powers that are given to them within section 8 of Article I.[24] Interpreting this language, the clauses of the Constitution authorize Congress to raise taxes, including tariffs, and make laws necessary to regulate commerce with foreign nations. 

Within the section granting Presidential powers, the Constitution states that the President shall have the “Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur.”[25] While this clause does contain ingredients of international power, the Constitution omits an expressed power over international commerce and trade.[26]

This lack of expressed Presidential power is compensated by the ebb and flow of tariff authority to the executive branch over the years due to congressional delegation.[27] Over the past 100 years, numerous laws have been implemented that grant the President authority to manipulate tariffs.[28] In the most recent display of discretion, President Trump cited Section 232 of the Trade Expansion Act of 1962.[29] To trigger this authority, President Trump pointed the Secretary of Commerce to a potential threat of national security regarding trade.[30] A positive finding of a security threat unlocked the door to the President’s room of trade war tactics.[31]

V. Analysis

Due to the text of the Constitution, the need for balance within the government, and the United States non-engagement in a prototypical war, the correct possessor of the authority to levy tariffs belongs to the Legislative Branch. 

When the roles of the governmental branches become unclear, the Constitution should be the used as an answer key. Within that text, Congress is the true possessor of the authority to levy taxes, as written within Section 8 of Article 1. In addition, Congress is the possessor of the power to make any law necessary to effectuate that end.

Congress’s grasp on the tariffs power is also a necessary check on the foreign policy authority of the President to ensure balance within the government. The President is the first point of contact between foreign nations and the people of the United States. Allowing too much power to be wielded while abroad could have domestic consequences, as experienced currently with the US-China trade war. 

During a time of prototypical war where lives are at stake, the authority to levy tariffs could be an important tool to subdue the opposition. Under the current circumstances, no sense of urgency exists to warrant the quick action of tariff imposition. Therefore, the ability of the President to implement tariffs quickly is immaterial. Even if a time of crisis existed, allocation of power should not be decided based on who can move the quickest.[32] The allocation should be determined based on who is granted that authority under the Constitution.[33]

VI. Conclusion

In the second half of the Constitution’s life, the authority to levy taxes has moved from the rightful hands of the Legislature into the grasp of the Executive. The transfer goes against the foundation of the United States based on the text of the Constitution and the separation of powers principle that surrounds it. Therefore, the government should be led to curb the growing authority of the Executive and grant it back to the rightful owner, the Legislature.  


[1]Dorcas Wong, The US-China Trade War: A Timeline, China Briefing (September 23, 2019), https://www.china-briefing.com/news/the-us-china-trade-war-a-timeline/.

[2]Rea Regan, A Closer Look at How the Trade War Impacts Small Business, Connecteam (August 27, 2019), https://connecteam.com/trade-war-small-business/.

[3]Wong, supra note 1. 

[4]Id.

[5]Id.

[6]Id.

[7]A quick guide to the US-China trade war, BBC News (September 2, 2019), https://www.bbc.com/news/business-45899310.

[8]Wong, supra note 1. 

[9]Id.

[10]A quick guide to the US-China trade war, BBC News, September 2, 2019, https://www.bbc.com/news/business-45899310. 

[11]Id.

[12]Charles Hankla, Who has the upper hand in the U.S.-China trade war?, Market Watch (August 10, 2019), https://www.marketwatch.com/story/who-has-the-upper-hand-in-the-us-china-trade-war-2019-08-05.

[13]Id.

[14]Id.

[15]Id.

[16]Separation of Powers – An Overview, NCSL (May 1, 2019), http://www.ncsl.org/research/about-state-legislatures/separation-of-powers-an-overview.aspx.

[17]Id.

[18]Id.

[19]Id.

[20]Id.

[21]Id

[22]U.S. Const. art. I, §8, cl. 1.

[23]U.S. Const. art. I, §8, cl. 3.

[24]U.S. Const. art. I, §8, cl. 18.

[25]U.S. Const. art. II, §2, cl. 2.

[26]Caitlain Devereaux Lewis, Cong. Research Serv., R44707, Presidential Authority over Trade: Imposing Tariffs and Duties (2002).

[27]Tara Golshan, Why Trump can raise steel tariffs without Congress, Vox (April 8, 2018), https://www.vox.com/2018/3/8/17097206/trump-tariffs-congress.

[28]Lewis, supra note 26.

[29]Golshan, supra note 27.

[30]Id.

[31]Id.

[32]Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952) (Frankfurter, J., concurring).

[33]Id.

A Work Made For Hire Analysis of Code Revision Commission v. Public.Resource.Org, Inc.

Law Books” by Mr.TinDC is licensed under CC BY-NC-ND 2.0.

Mike Chernoff, Associate Member, University of Cincinnati Law Review

I. Introduction

In the United States, copyright protection can be extended to original works of authorship fixed in any tangible medium.1 However, this protection is restricted for works that have been created as a statement of law.The Supreme Court will be hearing a case in the near future that will consider the annotations associated with the Official Code of Georgia Annotated, which were written by a third party, but approved by the Georgia General Assembly.3  Specifically, the case will consider whether these annotations are an official government edict for purposes of a copyright analysis.

Part II of this article will give further background information on United States copyright laws concerning government works and works made for hire. Part III will discuss this arrangement, and the aforementioned lawsuit involving the Official Code of Georgia Annotated lawsuit, Code Revision Commission v. Public.Resource.Org, Inc., that occurred due to a third party website distributing the Code despite the State of Georgia’s claimed copyright over the annotations.4 Part IV will analyze the copyright claim issue by the State of Georgia by viewing the annotations from a “work made for hire” viewpoint.

II. Copyright Background

The Constitution gives Congress the power “[t]o promote the Progress of Science and useful Arts, by securing for limited Time to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”.5 Congress used this power to pass the Copyright Act, which states, “[c]opyright protection subsists . . . in original works of authorship fixed in any tangible medium of expression.”Authorship is a central point of copyright law, and the statute clarifies that “Copyright in a work . . . vests initially in the author or authors of the work.”

Under United States copyright law, copyright protection is “not available for any work of the United States Government.”8 While this law applies to the federal government, there is no mention of state governments in the federal statute.However, the United States Copyright Office has a policy against registering a government edict that has been issued by any state government, including legislative enactments, judicial decisions, or similar types of official legal materials.10 This view has been confirmed by the courts in rulings that have established that with respect to government works, “the People” are the “author.”11 

The Supreme Court first addressed the issue of copyrighting government edicts in Wheaton v. Peters.12 In Wheaton, the Court unanimously held that “no reporter has or can have any copyright in the written opinions delivered by this Court; and that the judges thereof cannot confer on any reporter any such right.”13 The Supreme Court extended this ruling to state court opinions in Banks v. Manchester.14 Before Banks, an Ohio statute provided for the appointment of an official reporter for the Supreme Court of Ohio and this reporter was tasked with securing a copyright on the court’s decisions.15 The Ohio statute also required the Secretary of State to contract a publisher to have the exclusive right to publish the reports of the official court reporter.16 In Banks, the chosen publisher sued to enforce its copyright interest in the work of the judges of the Supreme Court of Ohio.17 The Court decided against the publisher in Banks because the publisher did not qualify as the author of the works.18 The Supreme Court  explained that the judges could not be the authors of the works because they write opinion in their judicial capacity.19 The Court suggested that preventing the judges from having a copyrightable interest in the opinions was sound public policy and would support the notion that all should have free access to judicial opinions in the interest of  justice.20

III. Case History

In Georgia, the official published set of statutes are collected in the Official Code of Georgia Annotated (“OCGA”).21 Along with the language of the statutes, the OCGA also includes annotations, which consist of history lines, repeal lines, cross references, commentaries, case notations, editor’s notes, excerpts from law review articles, summaries of opinions of the Attorney General of Georgia, summaries of advisory opinions of the State Bar, and other research references.22 These annotations are part of the official code, as stated in the OCGA when the code states that the statutes “shall be merged with annotations . . . and [are] published by authority of the state . . . and when so published [are to] be known and may be cited as the ‘Official Code of Georgia Annotated.’”23 However, these annotations are for convenient reference only and are not part of the law.24

Per an agreement with the State of Georgia, these annotations were initially prepared by Mathew Bender & Co., Inc., which is a part of the LexisNexis Group (“Lexis”).25 Under this agreement, Lexis has the exclusive right of publication of the OCGA, but is also responsible for the ongoing publication and maintenance of the OCGA, including the associated editorial, publication, and distribution costs.26 The agreement directs what types of annotations should appear in the OCGA as well as how Lexis should generate and arrange the content.27 The Code Revision Commission (“the Commission”) is tasked with supervising Lexis’s work and has final editorial control over the OCGA.28 The Commission consists of the Lieutenant Governor of Georgia, four members of the Georgia senate, the Speaker of the Georgia House of Representatives, four additional members of the Georgia House of Representatives, and five members appointed by the president of the State Bar of Georgia.29 After the Commission has approved the annotations, the Georgia General Assembly must vote to the OCGA the official codification of Georgia’s laws, and thus, must vote to incorporate the annotations as part of the OCGA.30

This agreement requires Lexis to create a free, unannotated, online version of the OCGA, and the agreement also limits the price that Lexis can charge for the OCGA.31 In return, Lexis has the exclusive right to produce and sell print, CD-ROM, and online versions of the OCGA.32 Lastly, the agreement provides that all the parts of the OCGA that are copyrightable, “shall be copyrighted in the name of the State of Georgia.”33

Public.Resource.Org (“PRO”) is a non-profit organization that aims to improve public access to government records and primary legal matters.34 For example, PRO has published various state statutory codes online.35 PRO purchased all 186 volumes of the print version of the 2013 edition of the OCGA, scanned the documents, and uploaded the documents  to its own website.36 These documents were then freely accessible to the public, and copies of these documents were distributed to other organizations and other websites.37

The Commission sent cease and desist letters to PRO demanding that it no longer publish the OCGA on the ground that it infringed upon the State of Georgia’s copyright in the work.38 After PRO refused to comply with the cease and desist letters, the Commission sued PRO seeking injunctive relief to restrict PRO from publishing the OCGA, resulting in Code Revision Commission v. Public.Resource.Org, Inc.39 PRO responded by denying that the State of Georgia held an enforceable copyright in the OCGA because the OCGA was a law that was in the public domain.40

The United States District Court for the Northern District of Georgia granted partial summary judgment for the Commission and rejected PRO’s motion for partial summary judgment as the court concluded the annotations in the OCGA lack the force of law and are, therefore, not public domain material.41 The District Court issued a permanent injunction against PRO requiring PRO to no longer produce or display the OCGA.42 PRO appealed this decision and the case was heard by the 11th Circuit Court of Appeals.43

On appeal, the Circuit Court reversed the District Court’s judgment and ruled in favor of PRO.44 The Circuit Court reasoned that the annotations in the OCGA were sufficiently law-like to be considered a work of the government and are not copyrightable.45 Due to the Commission’s direct supervision over Lexis’s work on the annotations, the annotations were created by legislative authority.46 The procedural method of approval, outlined in Part II, for the annotations was relevant to the circuit court’s decision.47  The Georgia General Assembly and the Governor both have to approve of the OCGA each year.48 The Circuit Court reasoned that this exemplifies the American system of government, therefore, the entirety of the OCGA is in effect, authored by the Georgia General Assembly.49 The circuit court also concluded this viewpoint was supported by the authoritative control that the Commission exercised over every stage of the creation of the OCGA annotations.50 

On June 24, 2019, the Supreme Court of the Untied States granted the Commission’s petition for a writ of certiorari.51

IV. Discussion

A potential argument in favor of affirming the circuit court’s decision can be reached by analogizing the agreement between the State of Georgia and Lexis to that of a typical work made for hire under United States copyright law. 

When the creator of a work is hired by another entity, the hiring entity may be considered the “author” for purposes of copyrightability in specific situations.52 A situation in which a work would be considered a “work made for hire” is when the work is “specially ordered or commissioned for use as a contribution to collective work,” as part of one of nine areas of subject matter, which include compilations, and when the parties have expressly agreed in a written instrument that the work shall be considered a work made for hire.53 

The State of Georgia contracted with Lexis for the purpose of creating and drafting the annotations that appear in the OCGA.54 A “compilation” is defined as “something gathered together especially from various sources.”55 The OCGA can be considered a gathering of the laws of Georgia into one document. From this viewpoint, the OCGA has characteristics that satisfy the definition of a compilation, thus satisfying the first element of a work made for hire. The agreement also stated that the State of Georgia would be the holders of any copyright that stemmed from the annotations that Lexis had written.56 While this may not expressly state that Georgia and Lexis had agreed to a work made for hire, the effect would be the same as if the agreement had said so. Both elements of a work made for hire are satisfied, and the State of Georgia could be considered the “author” of the annotations.

Due to the State of Georgia’s status as the legal “authors” of the annotations, the Court should treat the annotations as if the Commission had originally written them. In this analysis, the Court should consider whether a statute annotation that was originally written by the Georgia General Assembly should be considered copyrightable. Based on the Court’s reasoning in Banks, annotations written by Georgia’s Commission or General Assembly are not protected by copyright because the officials involved in these bodies would have written the annotations in their elected capacity.57 If annotations written by members of the Georgia General Assembly were hidden from the public under a veil of copyright, then the public would be deprived from the justice that the annotations provide. The result should be no different if the Georgia General Assembly hired an organization to write the annotations in its place. When the annotations are viewed as a work made for hire for the Georgia General Assembly, the result is clear that the state should not gain copyright protection over any portion of the OCGA.

V. Conclusion

Free and open access to state laws are an integral part of a person’s right to justice. The importance of this right establishes the reasoning behind Section 105 of the Copyright Act and the Copyright Office’s policy on government edicts.58  Hiring a third party should not be a loophole to allow a government to restrict a person’s right to access the laws and judicial opinions of their state. The Supreme Court should consider work made for hire copyright protection doctrine to confirm that the agreement between Georgia and Lexis prescribes Georgia as the authors of the annotations for purposes of copyright. Since the Georgia General Assembly would be considered the author of the annotations and the annotations are an addendum to the law, the state should not be afforded copyright protection on the annotations.

  1. 17 U.S.C. § 102 (2019).
  2. See 17 U.S.C. § 105 (2019); U.S. Copyright Office, Compendium of U.S. Copyright Office Practices § 313.6(C)(2) (3d ed. 2017).
  3. See Code Revision Comm’n v. Public.Resource.Org, Inc., 906 F.3d 1229 (11th Cir. 2018).
  4. Id.
  5. U.S.Const. art. I, § 8, cl. 8.
  6. 17 U.S.C. § 102 (2019).
  7. 17 U.S.C. § 201(a) (2019).
  8. 17 U.S.C. § 105 (2019).
  9. Id.
  10. U.S. Copyright Office, Compendium of U.S. Copyright Office Practices § 313.6(C)(2) (3d ed. 2017).
  11. Code Revision Comm’n v. Public.Resource.Org, Inc., 906 F.3d 1229, 1236 (11th Cir. 2018).
  12. Id. at 1237; Wheaton v. Peters, 33 U.S. 591, 668 (1834).
  13. See Wheaton, 33 U.S. 591, 668.
  14. Code Revision Comm’n, 906 F.3d at 1237; Banks v. Manchester, 128 U.S. 244, 254 (1888).
  15. Banks, 128 U.S. at 245, 249.
  16. Id. at 246.
  17. See id.
  18. Id. at 252.
  19. Id.at 253.
  20. Id.
  21. Code Revision Comm’n v. Public.Resource.Org, Inc., 906 F.3d 1229, 1233 (11th Cir. 2018).
  22. Id.
  23. Ga. Code Ann. § 1-1-1 (2019)
  24. Ga. Code Ann. § 1-1-7 (2019)
  25. Code Revision Comm’n, 906 F.3d at 1234.
  26. Id.
  27. Id. at 1233.
  28. Id.
  29. Id.
  30. Id. at 1245.
  31. Id. at 1234.
  32. Id.
  33. Id.
  34. Id.
  35. Id. at 1235.
  36. Id.
  37. Id.
  38. Id.
  39. Id.
  40. Id.
  41. Id.
  42. Id.
  43. Id.
  44. Id. at 1255.
  45. Id. at 1243.
  46. Id. at 1233.
  47. Id.at 1253.
  48. Id.
  49. Id.
  50. Id. at 1244.
  51. Id. at 1229.
  52. 17 U.S.C. § 101 (2019).
  53. Id.
  54. Code Revision Comm’n, 906 F.3d at 1234.
  55. Compilation, Merriam-Webster Dictionary, https://www.merriam-webster.com/dictionary/compilation (last visited Sep. 10, 2019).
  56. Code Revision Comm’n, 906 F.3d at 1234.
  57. Banks v. Manchester, 128 U.S. 244, 253 (1888).
  58. See 17 U.S.C. § 105 (2019); U.S. Copyright Office, Compendium of U.S. Copyright Office Practices § 313.6(C)(2) (3d ed. 2017).

Recent IRS Action Against Cryptocurrency Users May Result in Less Tax Revenue

Currency” by Credit Score Guide is licensed under CC BY 2.0.

William Malson, Associate Member, University of Cincinnati Law Review

I. Background

Bitcoin, the most widely known cryptocurrency, is a digitally secure store of value that exists as a shared public ledger, allowing fast and cheap transactions worldwide that never pass through a bank. During its early years, it was unclear how government regulatory agencies would deal with this new technology. To the casual observer, it’s currency. If you ask the U.S. Commodity Futures Trading Commission what it is, Bitcoin is a commodity.[1] If you ask the Internal Revenue Service (“IRS”), it’s property.[2] Ask Jeffrey Dorfman, professor of economics at the University of Georgia, and it’s an asset.[3] For tax purposes, the answer is clear: it’s property. But taxing bitcoin is difficult. In 2018, the IRS ramped up its efforts to tax cryptocurrency with the Virtual Currency Compliance campaign designed to address taxpayer noncompliance with IRS guidance.[4] Earlier this year, it began sending letters to thousands of taxpayers that may have failed to report income from cryptocurrency.[5] But the recent enforcement is based on faulty information. This article explains how bitcoin is taxed, the problems with IRS data, and how recent IRS action will push cryptocurrency further underground, making taxation even more difficult.

II. How Bitcoin is Taxed

Bitcoins (“BTC”)[6] are stored on digital “wallets” that can be sent to and from someone else’s “address” within that wallet.[7] This is called a transaction.[8] However, the nature of the transaction—and the tax implications—depend on the purpose behind it. For purposes of this article, transactions are broken apart into three categories: transfers, payments, and swaps.

A transfer is when bitcoin is sent from one address to another without changing ownership. For example, if I send bitcoin from my personal wallet to an exchange, I’ve transferred those coins—but they still belong to me. A payment is when bitcoin is used to pay for something, like wages, your AT&T phone bill,[9] or college tuition.[10] A swap is when bitcoin is exchanged for U.S. dollars or another cryptocurrency, similar to exchanging U.S. dollars for a foreign currency. For example, an owner of bitcoin might want to swap one of their BTC for an equivalent amount of U.S. dollars or another cryptocurrency like ether (“ETH”), created in 2014.[11] That swap would result in one less BTC for the original owner and about $10,170 or 47 ETH.[12] This swap has resulted in no capital gain or loss for either party until the value of BTC or ETH changes and another swap is made.

As of 2014, the IRS considers cryptocurrency, including bitcoin, to be property, rather than currency, for federal tax purposes.[13] Transfers are not taxed. Taxpayers who receive cryptocurrency as payments must determine the fair market value of that currency on the date of payment and pay tax on any gain in value between the payment date and the date that cryptocurrency is sold for cash.[14]

III. The “Swap” Problem

The problem for users arises when swaps occur on an exchange, a platform for merchants and consumers to buy and sell cryptocurrency. Cryptocurrency exchanges operate in the U.S. as payment settlement entities that require them to send users and the IRS Form 1099-K[15] if, for the calendar year, the gross amount of that user’s total reportable payment transactions exceeds $20,000, and the total number of such transactions exceeds 200.[16] But the “gross amount” of swaps does not correspond to the capital gain or loss for the user. For example, if a user bought one bitcoin for $10,170, and then sold it back at the same price, the exchange would record on Form 1099-K that the “gross amount” of those swaps was $20,340 (assuming the other reporting criteria are met).[17] Until recently, users who swapped currencies on exchanges could ignore this altogether and continue to report capital gains and losses using Form 8949 and Schedule D (Form 1040).[18] In this case, the capital gain would be zero. But the IRS thinks otherwise.

The IRS announced on July 26, 2019 that it had begun sending letters to more than 10,000 taxpayers with cryptocurrency transactions, acquired through various compliance efforts, that “potentially failed to report income and pay the resulting tax from [cryptocurrency] transactions or did not report their transactions properly.”[19] Letters 6173, 6174, and 6174-A explain that the receiving taxpayer either may not know the reporting requirements for transactions, may not have met their tax filing, or may not have properly reported their transactions.[20] But the IRS is relying on inaccurate data to generate these letters: cryptocurrency exchanges simply can’t provide tax reports like traditional stock exchanges.

IV. The Reporting Problem

Bitcoin is decentralized. There is no central bank, no administrator, no governing organization—no controlling body whatsoever. Users can swap currencies and incur great capital gains or losses independently of exchanges. Information obtained by the IRS will only reflect what occurs on a particular exchange. And if the IRS relies on exchange-reported Form 1099-Ks, users might incorrectly be on the hook for millions of dollars. But that hasn’t stopped the IRS.

By August 2019, users reported receiving IRS Notice CP 2000,[21] notifying the taxpayer that their tax return information doesn’t match data reported to the IRS.[22] While the notification isn’t an audit, it works the same way: taxpayers must respond by the deadline given on the form and either agree to pay the proposed tax, penalties and interest, or compile and mail a response with documents proving your position.[23] If the IRS is not able to accept a taxpayer’s explanation, it will issue Notice CP 3219A,[24] which must be challenged in court.[25]

V. Unless the IRS Wants Bitcoin to Go Underground, it Should Focus on Guidance

Cryptocurrency exchanges are centralized. They have corporate offices, hold users’ cryptocurrencies, and are regulated by various government entities. With the recent wave of enforcement, the IRS will incentivize further development of decentralized exchanges, making enforcement almost impossible.

A decentralized exchange is a market that does not rely on third parties to hold users’ funds. Swaps are peer-to-peer, enabling the exchange of one cryptocurrency for another directly between users. In essence, the exchange does not exist: it is a hub of information, not currency. As the number of companies accepting bitcoin continues to grow—and the number of users along with it—the IRS will be less able to harvest data of taxable transactions.[26] Cryptocurrency itself continues to advance in privacy protocols, making the tracing of coins along the public ledger increasingly difficult.[27]

The last official guidance from the IRS occurred in 2014. On May 16, 2019, IRS Commissioner Charles Rettig sent a letter to U.S. Representative Tom Emmer stating its intention to publish new guidance “soon.”[28] If the IRS fails to provide reasonable guidance for users and maintains its current course of enforcement, it may drive affected users to decentralized exchanges and currencies with greater privacy protocols, resulting in fewer traceable transactions and less tax revenue.


[1]Bitcoin Basics, U.S. CFTC, 1, https://www.cftc.gov/sites/default/files/idc/groups/public/@customerprotection/documents/file/oceo_bitcoinbasics0218.pdf [https://perma.cc/HH8T-B9A3] (last visited Sept. 20, 2019).

[2]Notice 2014-21, IRS, 2(Apr. 14, 2014), https://www.irs.gov/pub/irs-drop/n-14-21.pdf [https://perma.cc/8A2E-J6SV].

[3]Jeffrey Dorfman, Bitcoin Is An Asset, Not A Currency, Forbes (May 17, 2017, 9:05 AM), https://www.forbes.com/sites/jeffreydorfman/2017/05/17/bitcoin-is-an-asset-not-a-currency/#436f66842e5b [https://perma.cc/XV4T-A7U8].

[4]The IRS uses the term “virtual currencies,” including non-crypto virtual currencies.

[5]IRS has begun sending letters to virtual currency owners advising them to pay back taxes, file amended returns; part of agency’s larger efforts, IRS (Jul. 26, 2019), https://www.irs.gov/newsroom/irs-has-begun-sending-letters-to-virtual-currency-owners-advising-them-to-pay-back-taxes-file-amended-returns-part-of-agencys-larger-efforts [https://perma.cc/8JUG-2VU7].

[6]While “bitcoin,” “BTC,” or “coins” refer to the individual bitcoins being transferred, “Bitcoin” means the underlying network on which transfers take place.

[7]Kenny Li, Crypto Wallet Vs. Address,Hacker Noon (Mar. 21, 2018), https://hackernoon.com/crypto-wallet-vs-address-54f7fb980bd3 [https://perma.cc/MUK6-4TQW].

[8]Transaction, Bitcoin Wiki (last updated Feb. 22, 2019), https://en.bitcoin.it/wiki/Transaction [https://perma.cc/9MSY-PAX3].

[9]AT&T Now Accepts BitPay, AT&T (May 23, 2019), https://about.att.com/story/2019/att_bitpay.html [https://perma.cc/68AY-JD4S].

[10]Jack Linshi, King’s College Becomes First U.S. School to Accept Bitcoin, Time (Jun. 13, 2014), https://time.com/2871764/kings-college-accept-bitcoin/ [https://perma.cc/MS66-YYND].

[11]Who Created Ethereum?, Bitcoin Mag., https://bitcoinmagazine.com/guides/who-created-ethereum [https://perma.cc/Z982-GSBX].

[12]As of Sept. 20, 2019. The actual exchange rate can vary wildly.

[13]See IRS, supra note 2, at 2.

[14]Id. at 2-3.

[15]Form 1099 K Reporting Requirements for Payment Settlement Entities, IRS (last reviewed or updated Jul. 29, 2019), https://www.irs.gov/businesses/new-1099-k-reporting-requirements-for-payment-settlement-entities [https://perma.cc/5YSF-5L3F].

[16]2019 Instructions for Form 1099-K, IRS (2019), https://www.irs.gov/pub/irs-pdf/i1099k.pdf [https://perma.cc/G4Q4-XLJU].

[17]David Kemmerer, The IRS Is Blindly Coming After Cryptocurrency Traders – Here’s Why, Cointelegraph (Sept. 14, 2019), https://cointelegraph.com/news/the-irs-is-blindly-coming-after-cryptocurrency-traders-heres-why [https://perma.cc/8H6Q-4H42].

[18]2018 Instructions for Schedule D, IRS (2018), https://www.irs.gov/pub/irs-pdf/i1040sd.pdf [https://perma.cc/95JB-29R9].

[19]See IRS, supra note 5.

[20]IRS Letters to Virtual Currency taxpayers, IRS (Jul. 16, 2019), https://www.irs.gov/pub/notices/letter_6173.pdf [https://perma.cc/24D2-K83H], https://www.irs.gov/pub/notices/letter_6174.pdf [https://perma.cc/LH3L-VL3H], https://www.irs.gov/pub/notices/letter_6174-a.pdf [https://perma.cc/KN5C-PAUL].

[21]See Nikhilesh De, New IRS Warning Letters Target Crypto Investors Who Misreported Trades, CoinDesk (Aug. 14, 2019, 8:55 PM), https://www.coindesk.com/new-irs-warning-letters-target-crypto-investors-who-misreported-trades [https://perma.cc/5H84-7NF7]; Or Lokay Cohen, IRS Sends New Round of Letters to Bitcoin and Crypto Holders, Cointelegraph (Aug. 25, 2019), https://cointelegraph.com/news/internal-revenue-service-sends-new-round-of-letters-to-crypto-holders [https://perma.cc/N4GE-ZPLE]; IRS Notice CP2000 For Cryptocurrency – What Do I Do?, CryptoTrader.Tax, https://www.cryptotrader.tax/blog/irs-notice-cp2000-for-cryptocurrency [https://perma.cc/RB5J-BAK6] (last visited Sept. 20, 2019).

[22]IRS explains CP 2000 letters sent to taxpayers when tax return information doesn’t match information from 3rd parties, IRS (May 2018), https://www.irs.gov/newsroom/irs-explains-cp-2000-letters-sent-to-taxpayers-when-tax-return-information-doesnt-match-information-from-3rd-parties [https://perma.cc/CG6U-P6AT].

[23]How to Handle IRS CP2000 Notices (Underreporter Inquiry), H&R Block, https://www.hrblock.com/tax-center/irs/audits-and-tax-notices/irs-notice-cp2000/ [https://perma.cc/M4TU-E3XH] (last visited Sept. 25, 2019).

[24]IRS Letter CP2000: Proposed Changes to Your Tax Return, IRS (Feb. 9, 2018), https://www.youtube.com/watch?v=3R0POvqL3Ko&feature=youtu.be.

[25]IRS Notice CP3219A – Notice of Deficiency & Increase in Tax, H&R Block, https://www.hrblock.com/tax-center/irs/audits-and-tax-notices/irs-notice-cp3219a/ [https://perma.cc/3T2U-49TJ] (last visited Sept. 20, 2019).

[26]See AT&T, supra note 9; Time, supra note 10; How to use Bitcoin to add money to your Microsoft account, Microsoft (last updated Oct. 5, 2018), https://support.microsoft.com/en-us/help/13942/microsoft-account-how-to-use-bitcoin-to-add-money-to-your-account [https://perma.cc/BV3A-2ZQA]; Who Accepts Bitcoin as Payment?, 99Bitcoins (last updated Jun. 10, 2019), https://99bitcoins.com/bitcoin/who-accepts/ [https://perma.cc/3UTN-EUEY].

[27]Arijit Dutta & Saravanan Vijayakumaran, MProve: A Proof of Reserves Protocol for Monero Exchanges, 2019 Inst. of Electrical and Electronic Eng’r Eur. Symposium on Security and Privacy Workshops (EuroS&PW), 330, https://eprint.iacr.org/2018/1210.pdf [https://perma.cc/AMT3-ZT8T].

[28]Letter from IRS Commission Charles P. Rettig to U.S. Representative Tom Emmer, U.S. House of Representatives: Tom Emmer (May 16, 2019), https://emmer.house.gov/sites/emmer.house.gov/files/5.16.2019%20emmer%202019-11771.pdf [https://perma.cc/M58Y-PLBN].

How to Constitutionally Treat Prisoners with Gender Dysphoria

Gender Neutral & Accessible Canada Day” by Mike Gifford is licensed under CC BY-NC 2.0.

Nicolette Crouch, Associate Member, University of Cincinnati Law Review

I. Adree Edmo’s Journey

Adree Edmo is serving ten years in prison for sexually abusing a 15-year-old boy.[1] When she was incarcerated in 2012, her name was Mason Edmo.[2] Edmo had identified as female since about age 6.[3] After entering prison, Edmo’s treating psychiatrist diagnosed her gender dysphoria,[4] which the American Psychiatric Association defines as a “marked incongruence between one’s experienced/expressed gender and assigned gender, of at least 6 months’ duration . . . .”[5] Shortly thereafter, Edmo changed her legal name to Adree Edmo and the sex on her birth certificate to “female.”[6] Throughout her incarceration, Edmo presented as female, wearing makeup and feminine hairstyles.[7] Since 2012, prison officials of the Idaho Department of Correction (“IDOC”) had provided hormone therapy to treat Edmo’s gender dysphoria.[8] Additionally, Edmo received treatment for mental health issues such as a major depressive disorder, anxiety, and drug and alcohol addiction.[9]

After Edmo tried to castrate herself, she brought suit against IDOC prison officials, Corizon, Inc. (the health care provider for IDOC) and others, alleging that the denial of gender confirmation surgery (“GCS”) violated the Eighth Amendment of the Constitution.[10]

This article proposes guidelines that courts should follow when deciding if prisons are constitutionally required to provide GCS to inmates for gender dysphoria. Part II of this article discusses the landmark case Estelle v. Gamble, which established the rule that deliberate indifference to serious medical needs could be an Eight Amendment violation.[11] Part III focuses on the Ninth Circuit’s recent ruling in Edmo v. Corizon, Inc.[12] that found prison officials had violated the Eighth Amendment for not providing Edmo with GCS. Part IV describes the Fifth Circuit ruling in Gibson v. Collier[13] that held prison officials’ decision to deny an inmate GCS was not deliberate indifference. Finally, Part V discusses how courts should analyze prison medical care claims under the deliberate indifference standard.

II. Prisons Must Provide Adequate Medical Care to Inmates

The Eighth Amendment prohibits cruel and unusual punishment of inmates.[14] In Estelle v. Gamble, the Supreme Court interpreted this prohibition to include “deliberate indifference to serious medical needs of prisoners.”[15] Accordingly, constitutional protection is granted only when an inmate can show that prison officials (1) acted with deliberate indifference (2) to the inmate’s serious medical need.[16] For purposes of this article, gender dysphoria is presumed to be a serious medical need.[17]

In Estelle, the inmate claimed that the prison violated the Eighth Amendment when it provided allegedly inadequate treatment for a back injury the inmate had sustained during prison work.[18] Although the Supreme Court ruled that failing to provide an inmate with proper medical care could constitute cruel and unusual punishment, the Court found that the inmate’s specific medical treatment did not meet that threshold.[19] In its reasoning, the Court provided several examples of deliberate indifference to medical needs, including intentional poor responses to inmates’ medical needs, intentional delays or denials of treatment, and intentional interference with treatment.[20] But the Court explained that the standard was not so broad as to encompass negligent treatment.[21] For example, there is no Eighth Amendment violation where an inmate merely disagrees with a physician’s treatment choices.[22] The Court did not elaborate on other types of conduct that constitute deliberate indifference,[23] leaving lower courts to more precisely define deliberate indifference.[24]

III. The Argument for Providing GCS: Edmo v. Corizon, Inc.

This year, the Ninth Circuit addressed the deliberate indifference standard in Adree Edmo’s case.[25] Here, the Ninth Circuit ruled that “responsible prison officials were deliberately indifferent to Edmo’s gender dysphoria, in violation of the Eighth Amendment” for not providing GCS to Edmo.[26] The court’s remedy was to order the state of Idaho to provide Edmo with the surgery.[27]

Edmo sought GCS despite already receiving  hormone therapy and other treatment for gender dysphoria.[28] After attempting to castrate herself, Edmo was evaluated by the psychiatrist for GCS.[29] However, the psychiatrist did not recommend GCS, finding that Edmo did not satisfy criteria published by the World Professional Association for Transgender Health (“WPATH Standards”) or additional criteria required by the psychiatrist.[30] Although the psychiatrist recognized that Edmo’s gender dysphoria had worsened, the psychiatrist reported that Edmo failed to meet two of the six criteria required under the WPATH Standards for recommending GCS: the fourth prong, which required that “significant medical or mental health concerns . . . be well controlled,” (the “Mental Health Prong”) and the sixth prong, which required “12 continuous months of living in a gender role that is congruent with [the patient’s] gender identity.” (the “Gender Role Prong”).[31] With respect to the Mental Health Prong, the psychiatrist reasoned that Edmo experienced mental health issues separate from gender dysphoria that were not under adequate control.[32] Regarding the Gender Role Prong, the psychiatrist opined that Edmo needed to experience living as a woman outside of prison.[33] For those reasons, the psychiatrist concluded that GCS was not medically necessary for Edmo.[34]

The Ninth Circuit disagreed and held that Edmo established that GCS was medically necessary and, therefore, refusing to provide GCS constituted deliberate indifference by IDOC.[35] The Ninth Circuit explained that prison officials are deliberately indifferent when they provide treatment that is “medically unacceptable under the circumstances. . . .”[36] The court concluded that failing to provide GCS to Edmo was medically unacceptable.[37] The Ninth Circuit relied on the district court’s determination that the testimony of the psychiatrist and the State’s medical experts (collectively, the “State’s Experts”) was unsound, while the testimony of Edmo’s medical experts was credible.[38] First, the Ninth Circuit declared that the district court did not err in giving greater weight to the opinions of Edmo’s experts over those of the State’s Experts because the State’s Experts lacked “requisite experience.”[39] Second, the court asserted that the opinions of the State’s Experts “directly contradicted” the WPATH Standards of Care.[40] The court pointed to the Psychiatrist’s opinion regarding the Gender Role Prong.[41] This opinion, the court explained, ran “head-on” into the WPATH Standards of Care that provide that “[a]ccess to medically necessary treatment should not be denied on the basis of institutionalization . . . .”[42] Finally, the court found opinions of the State Experts “illogical and unpersuasive” because aspects of the opinions differed from those Edmo’s experts.[43] For example, Edmo’s experts found that Edmo exhibited symptoms of gender dysphoria for a sufficient length of time to receive the surgery.[44] However, the State’s Experts disagreed and cautioned that GCS was not yet appropriate because Edmo failed to present pre-incarceration medical records that documented symptoms of gender dysphoria.[45]

Accordingly, the Ninth Circuit upheld the district court’s determination that testimony from Edmo’s experts proved that GCS was medically necessary for Edmo.[46] The court affirmed the district court’s determination that IDOC acted with deliberate indifference in declining to provide Edmo with GCS, in violation of Eighth Amendment.[47]

IV. The Argument Against Providing GCS: Gibson v Collier

In contrast, the majority opinion in Gibson v. Collier relied heavily on evidence of an ongoing debate within the medical community about the necessity of GCS to hold that prison officials did not act with deliberate indifference in denying GCS to the inmate.[48]

Like Edmo, the inmate in Gibson was diagnosed with gender dysphoria during her incarceration.[49]Prior to claiming an Eighth Amendment violation, the inmate attempted castration and suicide.[50] The inmate acknowledged that mental health counseling and hormone therapy helped alleviate gender dysphoria to an extent.[51] However, after requesting and not receiving an individualized assessment for GSC, the inmate filed suit and challenged the refusal as deliberate indifference to her medical needs.[52] The majority disagreed with the inmate and concluded that prison officials are deliberately indifferent only when officials act “with malicious intent – that is, with knowledge that they were withholding medically necessary care.”[53] The majority found no malicious intent when prison officials deny a treatment that is debated and lacks consensus within the medical community.[54] The majority explained that a “single dissenting expert” does not “automatically defeat[] medical consensus about whether a particular treatment is necessary . . . But where, as here, there is robust and substantial good faith disagreement dividing respected members of the expert medical community, there can be no claim under the Eighth Amendment.”[55]

The majority reviewed evidence of the medical controversy from Kosilek v. Spencer[56] and the Center for Medicare & Medicaid Services under the U.S. Department of Health and Human Services (“CMS HHS”).[57] The majority acknowledged that the WPATH Standards provide that, “for many [transgender people], [GCS] is essential and medically necessary to alleviate their gender dysphoria.”[58] However, the majority described testimony from medical experts in Kosilek that (1) expressed hesitation to rely on the WPATH Standards; (2) emphasized  the availability of other noninvasive treatment options; (3) expressed concerns that WPATH Standards were driven by political considerations rather than medical judgement; and (4) emphasized gaps in the medical community regarding the long-term effects of GCS.[59] Additionally, the majority cited a CMS HHS memorandum that declined to mandate coverage for GCS with respect to Medicare and Medicaid patients, finding that “there is not enough high quality evidence to determine whether [GCS] improves health outcomes . . . .”[60] The majority found that this evidence demonstrated that the WPATH Standards of Care reflected only one side in a “sharply contested medical debate” over whether GCS is necessary to treat gender dysphoria.[61]

The majority concluded that prison officials were not deliberately indifferent in denying GCS to the inmate because the medical community was “deeply divided about the necessity and efficacy of [GCS].”[62]

V. A Comprehensive Analysis of Medical Care for Inmates

Both the Ninth Circuit and Fifth Circuit erred by leaving out important factors in their analyses of the deliberate indifference standard. The Ninth Circuit erred in suggesting that if an illness has a medically recognized treatment, the Eighth Amendment requires prisons provide it to inmates. The Fifth Circuit erred in allowing a prison to deny a medically recognized treatment without conducting an individualized assessment of the inmate’s particular medical needs. When determining whether a prison is constitutionally obligated to provide a treatment to an inmate, courts should consider both the inmate’s particular needs and other factors like security risks within a prison.[63]

The Supreme Court has suggested that a refusal to individually evaluate inmates for medical treatment could violate the Eighth Amendment.[64] In Estelle, the Supreme Court explained that deliberate indifference could occur through intentional denial or interference with an inmate’s medical care.[65] If “intentionally interfering”[66] with treatment could violate the Eighth Amendment, it follows that a blanket refusal to evaluate an inmate for treatment could violate the Eighth Amendment. Moreover, the policy followed by the prison in Gibson even instructed that inmates with gender dysphoria be “evaluated by appropriate medical and mental health professionals and [have their] treatment determined on a case by case basis. . . .” (emphasis added).[67] Therefore, the Fifth Circuit erred in allowing prison officials to deny GCS without evaluating whether the treatment was medically necessary for the inmate.

However, prison medical care analysis should not end after reviewing the inmate’s particular medical needs. Courts should consider other factors that alter the scope of medical treatment provided to inmates.

First, cost considerations are notably absent from deliberate indifference jurisprudence.[68] By ignoring costs, courts drain judicial resources on cases that affect a limited percentage of inmates.[69] Additionally, courts might award prisoners treatment that is out of reach for average, non-incarcerated members of society. Although cost estimates vary, the Philadelphia Center for Transgender Surgery, for example, estimates $21,400 to transition from male to female, and $24,900 to transition from female to male.[70] Therefore, when deciding whether prisons should provide particular treatment to inmates, courts should examine Medicaid coverage decisions and private insurance decisions about the same treatment. These coverage decisions signal whether states and private entities have chosen to fund particular treatment. By analyzing Medicaid and private insurance coverage decisions about a particular treatment, courts can weigh the cost of the particular treatment in their Eighth Amendment analyses. This is because states and private insurers have likely already considered cost in deciding whether to fund a particular treatment.[71]

Next, courts should give deference to prison officials regarding security and safety concerns surrounding an inmate’s circumstances. The Supreme Court has ruled that prison officials must protect inmates from harm.[72] Such deference is crucial because the Supreme Court explained that “courts cannot assume that state legislatures and prison officials are insensitiveto the requirements of the Constitution or to the perplexing sociological problems of how best to achieve the goals of the penal function of the criminal justice system.” (emphasis added).[73]

Finally, courts should consider expert testimony of medical professionals about particular treatments. Because cost and security concerns, alone, could block many treatment options for inmates, medical opinions and recommendations help courts examine the necessity and efficacy and, alternatives to, particular treatments. Both theCorizon court and Gibson majority relied heavily on expert medical testimony in reaching their conclusions.[74]

When determining whether a prison must constitutionally provide a particular treatment to an inmate, courts should first examine the inmate’s medical needs. But, the analysis should not end there. Courts should balance the inmate’s medical needs against cost, prison security concerns, and medical expert testimony.

VI. Conclusion

The Corizon decision will likely spur more Eighth Amendment Claims from criminals suffering from gender dysphoria who seek GCS after being denied the surgery. By expanding medical care analysis for prisoner to include factors like cost, security, and medical testimony, courts can better understand how such treatment decisions are made outside of prison – by the average American, by states, and by medical professionals.


[1]Amanda Peacher & James Dawson, State Must Provide Gender Confirmation Surgery To Idaho Inmate Adree Edmo, Boise State Public Radio, (Sept. 13, 2019) https://www.boisestatepublicradio.org/post/state-must-provide-gender-confirmation-surgery-idaho-inmate-adree-edmo#stream/0.

[2]Edmo v. Corizon, Inc., No. 19-35017, No. 19-35019, 19-35017, 2019 WL 3978329 at *7 (9th Cir. Aug. 23, 2019).

[3]Id.

[4]Id.

[5]Id. at *4.

[6]Id. at *7.

[7]Id.

[8]Id.

[9]Id. at *8.

[10]Id. at *10.

[11]Estelle v. Gamble, 429 U.S. 97, 106 (1976).

[12]2019 WL 3978329, at *1.

[13]Gibson v. Collier, 920 F.3d 212, 220-21 (5th Cir. 2019).

[14]The Eighth Amendment of the Constitution states that “[e]xcessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishment inflicted.” U.S. Const., amend. VIII.

[15]429 U.S. at 106.

[16]Id.

[17]Corizon, 2019 WL 3978329, at *19 (declaring that the parties agree that gender dysphoria is a “sufficiently serious medical need to trigger the State’s obligations under the Eighth Amendment.”).

[18]429 U.S. at 98-101.

[19]Id. at 97.

[20]Id.

[21]Id. at 105-06.

[22]Id. at 107.

[23]See id. at 102-06.

[24]See, e.g., Edmo v. Corizon, Inc., No. 19-35017, No. 19-35019, 19-35017, 2019 WL 3978329 (9th Cir. Aug. 23, 2019).

[25]Corizon, 2019 WL 3978329, at *1.

[26]Id. at *3.

[27]Id.

[28]Id. at *23-24.

[29]Id. at *24.

[30]Id. at *27-29.

[31]Id. at *27 (quoting The World Professional Association for Transgender Health, Standards of Care for the Health of Transsexual, Transgender, and Gender-Nonconforming People, 60 (7th ed. 2011)).

[32]Id. at *27.

[33]Id.

[34]Id.

[35]Id. at *1.

[36]Id. at *57 (quoting Hamby v. Hammond, 821 F.3d 1085, 1092 (9th Cir. 2016)).

[37]Id. at *59-60.

[38]Id.

[39]Id. at *61-63.

[40]Id. at *66.

[41]Id. at *27, 64.

[42]Id. at *65 (quoting Standards of Care at 67).

[43]See id. at *66-74.

[44]Id. at *66.

[45]Id. at *23.

[46]Id. at *69.

[47]Id. at *3.

[48]Gibson v. Collier, 920 F.3d 212, 220-24 (5th Cir. 2019).

[49]Id. at 216-17.

[50]Id. at 217.

[51]Id.

[52]Id. at 218.

[53]Id. at 220.

[54]Id.

[55]Id.

[56]Kosilek v. Spencer, 774 F.3d 63 (1st Cir. 2014) (en banc).

[57]Gibson, F.3d 212at 221-23.

[58]Id. at 218-21 (quotingStandards of Careat 54).

[59]Id. 221-22.

[60]Id. 223; Centers for Medicare & Medicaid Services, Decision Memo for Gender Dysphoria and Gender Reassignment Surgery48 (Aug. 30, 2016), https://www.cms.gov/medicare-coverage-database/details/nca-decision-memo.aspx?NCAId=282.

[61]F.3d 212at 221.

[62]Id. at 220-21.

[63]See, e.g., Edmo v. Corizon, Inc., No. 19-35017, No. 19-35019, 19-35017, 2019 WL 3978329 (9th Cir. Aug. 23, 2019); see also Farmer v. Brennan, 511 U.S. 825 (1994).

[64]See, e.g., Estelle v. Gamble, 429 U.S. 97, 104 (1976).

[65]Id. at 104-05.

[66]Id.

[67]Gibson, F.3d 212at 217-18.

[68]See, e.g., Corizon, 2019 WL 3978329 (9th Cir. Aug. 23, 2019); Gibson, F.3d 212at 221-23.

[69]Marek Mędraś & Paweł Jóźków, Transsexualism — diagnostic and therapeutic aspects, 61 Polish J. Endocrinology412, 412-13 (2010) (reviewing a 2010 study reported that gender dysphoria affects less than 0.01% of the population).

[70]The Philadelphia Center For Transgender Surgery, Male To Female Price List, http://www.thetransgendercenter.com/index.php/maletofemale1/mtf-price-list.html (last visited Sept. 20, 2019); Female to Male Price List, http://www.thetransgendercenter.com/index.php/femaletomale1/ftm-price-list.html (last visited Sept. 20, 2019).

[71]National Conference of State Legislatures, Understanding Medicaid: A Primer for State Legislators(Aug. 30, 2019) http://www.ncsl.org/research/health/understanding-medicaid-a-primer-for-state-legislators.aspx (explaining why the Medicaid program is costly for states).

[72]Farmer v. Brennan, 511 U.S. 825 (1994). In this case, the prisoner-petitioner presented as female and was sexually assaulted by other inmates.

[73]Rhodes v. Chapman, 452 U.S. 337, 352 (1981).

[74]See Edmo v. Corizon, Inc., No. 19-35017, No. 19-35019, 19-35017, 2019 WL 3978329 at *59-60 (9th Cir. Aug. 23, 2019); Gibson v. Collier, 920 F.3d 212, 221-23 (5th Cir. 2019).

Aberrant Sixth Circuit: Which Appellate Standard of Review Applies When Determining Employee Status Under ERISA?

Employees Only” by Thomas Hawk is licensed under CC BY-NC 2.0.

Blythe McGregor, Associate Member, University of Cincinnati Law Review

I. INTRODUCTION

The outcome of employee benefits cases often turn on the definition of “employee.” The distinction between employee and nonemployee is not clear under the Employment Retirement Income Security Act of 1974 (ERISA).[1] Circuits have split over which standard of review applies when a district court determines employee status.

ERISA was enacted to advance the interests of employees and their beneficiaries. The statute imposes uniform standards for employee pension and welfare plans. While the statute defines “employee,”[2] the Supreme Court has disparaged this definition as “nominal,” and “circular.”[3] Thus, the Court set forth twelve factors in Nationwide Mutual Insurance Co. v. Darden for lower courts to consider when making the employee/nonemployee distinction under ERISA.[4]  These factors have been regularly applied by lower courts. 

The appropriate procedure for the factors’ application has become disputed. The circuits are split regarding whether a lower court’s findings of each Darden factor are questions of fact or law. Specifically, the circuit courts disagree about what appellate standard of review is appropriate in employment status cases. In Jammal v. American. Family Insurance. Co.,the Sixth Circuit held that Darden factor conclusions are not entirely factual determinations.[5] Meanwhile, other circuits have held that a court’s conclusion on each Darden factor is a conclusion of fact.[6]  

II. BACKGROUND

A. APPELLATE STANDARD OF REVIEW

Generally, an appellate court subjects a district court’s finding of fact to the clear error standard. This standard is from Federal Rule of Civil Procedure 52, which states: “[f]indings of fact, whether based on oral or other evidence, must not be set aside unless clearly erroneous.”[7] This is a high bar for appellate review of factual findings, and deference is given to the district court. Only the district court has the opportunity to assess the factual record during a trial and appraise the credibility of a witness. An appellate court should uphold the district court’s factual record.[8] Alternatively, questions of law, or questions predominantly of law, are reviewed by the appellate court de novo, meaning the appellate court can review the legal conclusion without giving weight to the district court’s analysis.[9] In an interlocutory appeal, an appellate court faces an even bigger hurdle when reviewing a district court’s factual conclusions.[10] The appellate court must review the district court’s legal conclusions against the backdrop of the district court’s factual findings.[11]

Neither Rule 52 nor the Supreme Court have provided a clear test to determine how to distinguish between fact and law.[12] In fact, the Court has acknowledged the “vexing nature” of this distinction.[13] And it is common for circuit courts to apply the general appellate review standard and have different results. 

B. Nationwide Mutual Insurance Company v. Darden[14]

In Darden, the Supreme Court laid a foundation for the employee status analysis. Respondent Robert Darden operated an insurance agency and was bound to the terms of multiple contracts signed with petitioners Nationwide Mutual Insurance.[15] According to these agreements, Darden would only sell Nationwide policies and, consequently, would be enrolled in a Nationwide retirement plan.[16] Additionally, if Darden, after termination, sold insurance within twenty-five miles for one of petitioner’s competitors, Darden would not receive the benefits of the plan.[17] Darden broke his noncompete agreement and, after Nationwide notified Darden of the intent to withhold retirement plan benefits, Darden sued under ERISA claiming the benefits were nonforfeitable because these benefits had already vested.[18] The case depended on whether Darden should be classified as Nationwide Mutual’s employee or an independent contractor because ERISA only applies to employees.[19]

The Supreme Court held that the factors from Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989), controlled.[20] In Reid, the Court established several factors relevant, in light of the general common law of agency, to making the employee/nonemployee distinction in the context of the Copyright Act of 1976.[21]Specifically, considerations include: 

the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party,  the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.[22]

The Court noted that these factors are far from resolute.[23]  The weight a court should give to each factor differs depending on the legal context of each case.[24]However, because each factor “turns on factual variables within an employer’s knowledge,” employers are able to make judgments about the status of ERISA claimants.[25]

C. Divergent Sixth Circuit: Jammal v. American Family Insurance Company[26]

In Jammal v. American Family Insurance Company, the Sixth Circuit departed from the precedent provided by other circuits. This class action lawsuit originated when insurance agents claimed that American Family Insurance misclassified them as independent contractors to avoid providing those agents with benefit obligations imposed under ERISA.[27]At trial, compelling evidence was presented to support both sides. The defense argued that the agents’ positions within the company were structured as independent contractors.[28] Further, all agents had signed a contract which stipulated that the agents were independent contractors.[29] American Family Insurance treated the agents as independent business owners who established and operated their own offices.[30] The agents, on the other hand, presented evidence that agents were termed “employees” during interactions with American Family Insurance and that managers exercised control over the agents’ office operations.[31] The district court held that the agents were employees under ERISA.[32] Although the Darden factors were utilized in making this determination, the district court also engaged in a more sweeping analysis turning on the degree of control American Family Insurance managers exercised over the agents.[33]

On interlocutory appeal, the Sixth Circuit acknowledged that the lower court’s factual findings underlying each Darden factor could not be reviewed de novo.[34] The court also noted that the district court’s ultimate conclusion of employee status is a question of law.[35] Thus, the issue was with the district court’s applications of factual findings to each Darden factor. The Sixth Circuit admitted that some of its own precedent is incongruent with the outcome.[36]  The court came to the conclusion that the district court’s individual Darden factor conclusions, and the weight given to those conclusions, are not entirely questions of fact and thus may be reviewed de novo at the appellate level.[37]

The court contended that a de novo review of Darden conclusions is supported because a legal standard is often applied when making these determinations, such as when considering whether the skill required for the plaintiff’s position is separate from that of the business.[38] When determining the existence of this factor, the Sixth Circuit held,  a court must decide whether to assess the amount of skill required or if the skill is completely discrete from the business.[39] For this reason, the Sixth Circuit postulated that the Darden factors are legal standards that are applied to facts.[40] The court also emphasized language used in its U.S. v. Ware decision, expressing that the weight given to each Darden factor depends on legal context.[41] Therefore, how important a certain Darden factor is to the employee status analysis depends on the cause of action. This procedural outlook proved consequential: after weighing and reconsidering the district court’s Darden analysis, the Sixth Circuit reversed the district court’s decision and determined that insurance agents are independent contractors, not employees, under ERISA.[42]

In making the determination that insurance agents are independent contractors, the Sixth Circuit in Jammal strayed from longstanding precedent on the employee status appellate review issue. Prior to Darden, many circuits expressed that conclusions on individual factors in an employee/nonemployee determination were matters of law. Three circuits have addressed this issue in the context of the Fair Labor Standards Act.[43] First, applying factors used to determine employee status pre-Darden, the Fifth Circuit categorized findings of “historical fact” and findings as to the “factors themselves” as both based on the factual record and subject to the clear error standard.[44] Next, the Second Circuit, also using pre-Darden factors, held that the presence of each factor is a question of fact, while the overall conclusion based on those factors is a question of law.[45] Lastly, the Tenth Circuit cited the above Second Circuit decision to reiterate that the conclusions as to individual factors were subject to the clearly erroneous standard.[46]

After Darden, the clearly erroneous standard of review applied by the Fifth, Second, and Tenth circuits was upheld. Only four years post-Darden, the Eighth Circuit in Berger Transfer applied the clearly erroneous standard to a district court’s Darden conclusions in an ERISA context.[47] More recently, the Eighth Circuit relied on Berger Transfer and held that findings as to the Darden factors are subject to the clear error standard.[48]

III. Analysis

Viewing the judicial precedent with a commitment to pragmatism, the Sixth Circuit’s factor-weighing analysis is consistent with civil procedure tradition. It is important to note that this is a unique circuit split. One side of the split originates from cases decided during the late 20th century, while the splitting circuit did so in early 2019. Because of this gap in time, it is apt to reconsider the standards adopted decades ago in light of cases such as Jammal that may call for a more in-depth review of the district court’s conclusions. Jammal is a perfect example of the call for this higher standard of review. In that case, both the insurance company and the insurance agent presented compelling arguments, and the district court weighed the factors in the legal context of ERISA. A statute that creates a cause of action in a given case also creates a legal backdrop against which factual elements must be weighed. Thus, the Darden factors must be weighed within the legal context of ERISA. The appellate court should ensure that the relevant Darden factors are being considered in order to ensure a just outcome under the statutory scheme at issue. For example, in Jammal, the Sixth Circuit discussed the increased relevance of the “hiring party’s control” factor in a copyright case, but that this factor would not be as relevant for determining employee status in an ERISA case.[49] The court noted that, in the context of ERISA, the Darden factors related to the financial structure of the company should be given the most weight and favor independent contractor status.[50]The Sixth Circuit determined that if those factors had been given appropriate weight, the district court would have come to the opposite conclusion.[51] Thus, an appellate review of a district court’s conclusions on each Darden factor, weighed to support a certain legal conclusion within a particular legal context, is appropriate. This is especially true when the factual record provides a compelling argument for both plaintiff and defendant. The legal context matters and if appeals courts are not allowed to review the factors to be weighed in a given legal context, the purpose of appellate review would be undermined. 

The Sixth Circuit’s holding is also contrary to the legislative purpose of Rule 52. Among other justifications for the rule, the Advisory Committee notes list the maintenance of “stability and judicial economy,” upholding the legitimacy of district courts, and avoiding excessive appeals.[52]  District courts directly absorb the evidence and testimony from a trial. These courts are at an advantage when determining the existence of simple factors such as the skill required for a position or the source of instrumentalities and tools used by an employee. Each employer-employee relationship and company dynamic is unique. Only a district court is positioned to have a sufficient grasp on the facts of a case to determine the presence or absence of one of the Darden factors. 

The Sixth Circuit claimed that each Darden factor contains a legal determination and was not entirely off-base. For example, how many tools or instrumentalities must be provided by an employer to affirm the existence of this factor? In considering the separateness of skill required, should weight be given to the amount of skill required or the nature of the skill? However, this is still a fact sensitive determination. The Sixth Circuit’s not “entirely a question of fact” language itself implies that there is a factual element to determine.[53] A certain number of tools may suffice in a case where such tools play a major role in performing the occupational task, while the same number of tools may not fulfill the standard when the tools were collateral to occupational duties. The amount of skill required, and the nature of occupational duties are also factual conclusions. As noted above, only the district court has an intimate understanding of the company dynamic and complicated facts of a case. Therefore, the Sixth Circuit’s argument is crushed under the weight of Rule 52’s omnipresent legislative purpose.  

IV. Conclusion

Jammal pushed the envelope of the appellate standard of review. Although going too far, the Sixth Circuit accurately recognized a circuit court’s review to include the weight given to each Darden factor. The Supreme Court must provide lucidity to avoid asymmetrical application of the Darden factors. The Supreme Court should adopt a conclusion that upholds the functional distinction between district and circuit courts set forth in the Rules of Civil Procedure. This would allow appeals courts to conduct a thorough review of the district courts’ legal analysis to ensure employees are receiving the benefits they deserve. For this reason, appellate courts should review the weight assigned to each Darden factor de novo, while adhering to the district court’s conclusions on the existence or nonexistence of each factor.


[1]29 U.S.C.A. § 1001 et seq. 

[2]Id.at § 1002(6). 

[3]Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323 (1992).

[4]Id. at 323-24 (quoting Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 732 (1989)).

[5]Jammal v. Am. Family Ins. Co., 914 F.3d 449, 456 (6th Cir. 2019).

[6]See id.

[7]Fed. R. Civ. P. 52(a). 

[8]See Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 855 (1982).

[9]See Wyner ex rel. Wyner v. Manhattan Beach Unified Sch. Dist., 223 F.3d 1026, 1028 (9th Cir. 2000).

[10]An interlocutory appeal is an appeal made before a final judgement has been rendered by a district court.

[11]See Foster Wheeler Energy Corp. v. Metro. Knox Solid Waste Auth., Inc., 970 F.2d 199, 202 (6th Cir. 1992). 

[12]Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485, 501 (1984).

[13]Id.

[14]Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992).

[15]Id. at 319-20.

[16]Id.at 320.

[17]Id. 

[18]Id.

[19]Id.at 321. 

[20]Id. at 323.

[21]Community for Creative Non-Violence v. Reid490 U.S. 730, 739-40, 751-52 (1989).

[22]Darden, 502 U.S. at 323-24.

[23]Id.at 327.

[24]Ware v. United States, 67 F.3d 574, 578 (6th Cir. 1995).

[25]Darden, 502 U.S. at 327.

[26]Jammal v. Am. Family Ins. Co., 914 F.3d 449 (6th Cir. 2019).

[27]Id. at 451-52.

[28]Id. at 452.

[29]Id. 

[30]Id.

[31]Id. at 452-53

[32]Id. at 455.

[33]Id.

[34]Id.

[35]Id.

[36]Id. 

[37]Id.at 456-57.

[38]Id.at 456. 

[39]Id.

[40]Id.

[41]Id.

[42]Id. at 460.

[43]29 U.S.C.A § 201 et seq.

[44]Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042, 1044 (5th Cir. 1987).

[45]Brock v. Superior Care, Inc., 840 F.2d 1054, 1059 (2d Cir. 1988).

[46]Dole v. Snell, 875 F.2d 802, 805 (10th Cir. 1989).

[47]Berger Transfer & Storage v. Cent. States, Se. & Sw. Areas Pension Fund, 85 F.3d 1374, 1377-78 (8th Cir. 1996).

[48]Ernster v. Luxco, Inc., 596 F.3d 1000, 1005 (8th Cir. 2010).

[49]Jammal v. Am. Family Ins. Co., 914 F.3d 449, 456 (6th Cir. 2019).

[50]Id. at 458.

[51]Id. at 459.

[52]Fed. R. Civ. P. 52 advisory committee’s notes to 1985 amendment.

[53]See Jammal, 914 F.3d at 456.

FDA Moves to Combat the “Epidemic of Youth E-Cigarette Use”

“DSC_0216”by takemetoklinghovillage is licensed under CC BY-NC-SA 2.0

William Malson, Associate Member, University of Cincinnati Law Review

Background

On August 8, 2016, the U.S. Food and Drug Administration (“FDA”) finalized a rule extending its regulatory authority over all tobacco products, including electronic nicotine delivery systems (“ENDS”)—commonly referred to as e-cigarettes.[1] With this rule, all ENDS products were expected to file premarket tobacco product applications with the FDA within two years.[2]Although the FDA has generated 8,600 warning letters and more than 1,000 civil penalties to retailers under the rule, some companies have ignored the law completely,[3] and adolescent use of ENDS products has continued to rise.[4] On September 11, 2019, the FDA announced that it intends to finalize a compliance policy that would prioritize the agency’s enforcement of the application rule for non-tobacco-flavored e-cigarettes, clearing the market of unauthorized products—including all flavors.[5] According to Alex Azar, Secretary of Health and Human Services, the upcoming enforcement is meant to “reverse the deeply concerning epidemic of youth e-cigarette use.”[6]

We’ve been here before. In 2009, the FDA banned cigarettes with “certain kid-appealing flavors” in an effort to protect children from the dangers of cigarettes.[7] Ten years later, it’s not clear that vaping is as big a threat as smoking—or even that the original ban helped. 

Adolescent Vapers: Attracted to the Flavor?

In 2004, 17-year-old smokers were more than three times as likely as those over the age of 25 to smoke flavored cigarettes.[8] According to the director of the FDA’s Center for Tobacco Products in 2009, it was the flavoring that made cigarettes more appealing to youth, prompting a nationwide ban on flavored cigarettes that took effect that year.[9] Today, underage teens are roughly 16-timesas likely to report current use of JUULs[10]— a specific ENDS product that looks like a tall USB flash drive and comes in flavors like Mango, Fruit and Creme.[11] In 2011, less than two percent of high school students reported having used ENDS products in the previous month. By 2015, that number jumped to 16%.[12] In 2018, over 37% of high school seniors reported “any vaping” in the past year.[13]

But it’s not just the flavor that’s attracting teenagers. On July 24, 2019, the Subcommittee on Economics and Consumer Policy of the House Committee on Oversight and Reform heard testimony[14] that JUUL presented to students at school in April 2017 under the guise of an “anti-addiction talk.”[15] According to students present at the talk, the speaker claimed that the FDA would approve JUUL as “99% safer than cigarettes” any day, that it was totally safe, and that the speaker even told one student that he should recommend JUUL to his nicotine-addicted friend who, unbeknownst to the speaker, was in fact the student’s 14 year old classmate who was addicted not to cigarettes, but to JUUL.[16] The speaker even took out a JUUL and showed it to the students, calling it the “iPhone of Vapes.”[17]

The Risks of Vaping

JUUL dominates the vaping market, with a market share of 71.4% as of August 10, 2019.[18] A single JUUL-pod contains either 23mg or 40mg of nicotine, depending on the desired strength.[19] Non-JUUL ENDS products such as “clearomizers”[20]are refillable tanks that hold about 3mL of liquid (“e-liquid”) that comes in various nicotine strengths ranging from 0mg/mL to 24mg/mL.[21] Put in a JUUL-sized pod, that’s up to 16.8mg of nicotine. Cigarettes, although containing up to 12mg of nicotine, only impart roughly 2mg to the user,[22] as most of the drug is removed through the filter or vaporized in the environment.[23] From an addiction perspective, vaping poses serious risks. But the other risks associated with smoking may be significantly lower.

Smoking leads to disease and disability and harms nearly every organ of the body.[24] Cigarettes in particular contain approximately 600 ingredients, releasing more than 7,000 chemicals when burned.[25] 250 of these chemicals are known to be harmful, and 69 are known to cause cancer.[26] In contrast, the only chemicals e-liquid theoretically needs to contain are propylene glycol, vegetable glycerin, flavoring, and optionally, nicotine.[27] Flavoring comes in the form of aldehydes such as cinnamaldehyde, which imparts a cinnamon taste,[28] benzaldehyde, which imparts an almond taste,[29] or a combination of any number of flavoring chemicals. But once mixed together, chemicals interact with each other in unexpected ways, creating new substances altogether.[30] One study found upwards of 64 substances in e-liquid—82 when vaped—some of them unidentified.[31]

While vaping is not completely safe, it is certainly safer. According to Michael Blaha, M.D., director of clinical research at the Johns Hopkins Ciccarone Center for the Prevention of Heart Disease, “there’s almost no doubt that [vaping] expose[s] you to fewer toxic chemicals than traditional cigarettes.”[32] On September 12, 2019, the Centers for Disease Control and Prevention (“CDC”) reported that there have been 380 cases of lung illness and six deaths related to ENDS product use.[33] Compared to the 480,000 deaths annually in the United States from smoking,[34] vapers can take some solace that their chances of serious illness or death are relatively low.[35]

Will the Ban Work?

According to then-commissioner of the FDA, in 2009, the ban on flavored cigarettes was targeted to reduce the number of children who become regular smokers.[36] But did it even work?

FIGURE 1: Estimated percentage of high school students who currently use any tobacco product, any combustible tobacco product, tobacco product types, and selected tobacco products[37]

Cigarette Use Among High School Students — United States, 1991–2009, CDC (Jul. 9, 2010), https://www.cdc.gov/mmwr/preview/mmwrhtml/mm5926a1.htm

According to CDC data, shown above, cigarette use declined from above 15% in 2011 to below 10% in 2017. But previous CDC data indicate that cigarette use was already on the decline.

FIGURE 2. Percentage of high school students who had ever smoked cigarettes, were current cigarette users, and were current frequent cigarette users.[38]

Cigarette Use Among High School Students — United States, 1991–2009, CDC (Jul. 9, 2010), https://www.cdc.gov/mmwr/preview/mmwrhtml/mm5926a1.htm

For current cigarette use, the prevalence increased from 27.5% in 1991 to 36.4% in 1997, declined to 21.9% in 2003, and then declined more gradually, to 19.5% in 2009. For current frequent cigarette use, the prevalence increased from 12.7% in 1991 to 16.8% in 1999, declined to 9.7% in 2003, and then declined more gradually, to 7.3% in 2009. For all three measures, rates began to decline in the late 1990s, but the rate of decline slowed during 2003—2009.

To combat high school student cigarette use, the CDC advocated for “reductions in advertising, promotions, and commercial availability of tobacco products . . . combined with full implementation of communitywide, comprehensive tobacco control programs.”[39]

Perhaps, given the inconclusiveness of the previous ban’s effectiveness, the next step ought to be stricter advertising regulations, instead of eliminating thousands of vape shops and potentially hundreds of thousands of jobs.[40]


[1]Vaporizers, E-Cigarettes, and other Electronic Nicotine Delivery Systems (ENDS), FDA (current as of Sept. 12, 2019), https://www.fda.gov/tobacco-products/products-ingredients-components/vaporizers-e-cigarettes-and-other-electronic-nicotine-delivery-systems-ends [https://perma.cc/5HKF-U7C4].

[2]See Trump Administration Combating Epidemic of Youth E-Cigarette Use with Plan to Clear Market of Unauthorized, Non-Tobacco-Flavored E-Cigarette Products, FDA (Sept. 11, 2019), https://www.fda.gov/news-events/press-announcements/trump-administration-combating-epidemic-youth-e-cigarette-use-plan-clear-market-unauthorized-non [https://perma.cc/9FC8-QEYG]; Trump Administration Combating Epidemic of Youth E-Cigarette Use with Plan to Clear Market of Unauthorized, Non-Tobacco-Flavored E-Cigarette Products, U.S. Dep’t of Health & Hum. Serv. (Sept. 11, 2019), https://www.hhs.gov/about/news/2019/09/11/trump-administration-combating-epidemic-youth-ecigarette-use-plan-clear-market.html [https://perma.cc/PZS2-CFQM].

[3]Devin Coldewey, FDA says Juul “ignored the law’ and warns it may take action, TechCrunch (Sept. 9, 2019), https://techcrunch.com/2019/09/09/fda-says-juul-ignored-the-law-and-warns-it-may-take-action/ [https://perma.cc/G7PY-E5X4].

[4]See FDA, supranote 2; Teens using vaping devices in record numbers, Nat’l Inst. on Drug Abuse (Dec. 17, 2018), https://www.drugabuse.gov/news-events/news-releases/2018/12/teens-using-vaping-devices-in-record-numbers [https://perma.cc/VGY7-THDB].

[5]See FDA, supra note 2.

[6]Id.

[7]Menthol and Other Flavors in Tobacco Products, FDA (current as of Jul. 20, 2018), https://www.fda.gov/tobacco-products/products-ingredients-components/menthol-and-other-flavors-tobacco-products [https://perma.cc/2B4J-9U4M].

[8]Gardiner Harris, Flavors Banned From Cigarettes to Deter Youths, N.Y. Times (Sept. 22, 2009), https://www.nytimes.com/2009/09/23/health/policy/23fda.html [https://perma.cc/6SPQ-3PAW].

[9]Daniel J. DeNoon, FDA Bans Flavored Cigarettes, WebMD (Sept. 22, 2009), https://www.webmd.com/smoking-cessation/news/20090922/fda-bans-flavored-cigarettes#1 [https://perma.cc/Y5R8-HLTJ].

[10]Salynn Boyles, Survey: Teens Using JUUL E-cigs More Than Young Adults, MedPageToday(Oct. 30, 2018), https://www.medpagetoday.com/pulmonology/smoking/76032 [https://perma.cc/FF3G-ZNPT].

[11]What JUULpod flavors and nicotine strengths does JUUL offer?, JUUL, https://support.juul.com/hc/en-us/articles/360023529913-What-JUULpod-flavors-and-nicotine-strengths-does-JUUL-offer- [https://perma.cc/6JEF-TJWC] (last visited Sept. 13, 2019).

[12]Jessica L. Barrington-Trimis & Adam M. Leventhal, Adolescents’ Use of “Pod Mod” E-Cigarettes — Urgent Concerns, 379 New Eng. J. of Med. 1099, 1099(Sept. 20, 2018).

[13]See Nat’l Inst. on Drug Abuse, supra, note 3.

[14]Examining JUUL’s Role in the Youth Nicotine Epidemic: Part I, House Comm. on Oversight and Reform: Subcomm. on Econ. and Consumer Pol’y(Jul. 24, 2019, 9:00 AM), https://oversight.house.gov/legislation/hearings/examining-juul-s-role-in-the-youth-nicotine-epidemic-part-i [https://perma.cc/AB9G-7TL7].

[15]House Comm. on Oversight and Reform: Subcomm. on Econ. and Consumer Pol’y, Examining JUUL’s Role in the Youth Nicotine Epidemic: Part I, YouTube (Jul. 24, 2019), https://youtu.be/m3iEMrAd83o, at 52:25—53:15.

[16]See Id. at 1:20:20—1:21:20; FDA, Warning Letter: JUUL Labs, Inc. (current as of Sept. 9, 2019), https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/juul-labs-inc-590950-09092019 [https://perma.cc/TB63-DSZ7].

[17]See House Comm. on Oversight and Reform, supra, note 13, at 53:15—53:26.

[18]Angelica LaVito, Juul’s momentum slips as NJOY woos customers with dollar e-cigarettes, CNBC (Aug. 20, 2019, 1:22 PM), https://www.cnbc.com/2019/08/20/juuls-momentum-slips-as-njoy-woos-customers-with-dollar-e-cigarettes.html [https://perma.cc/T847-APK2].

[19]How much nicotine is in a JUULpod?, JUUL, https://support.juul.com/hc/en-us/articles/360026223453-How-much-nicotine-is-in-a-JUULpod- [https://perma.cc/RB6T-SFHM] (last visited Sept. 13, 2019); but seeTalih et al., Characteristics and toxicant emissions of JUUL electronic cigarettes, Tobacco Control: Online(Feb. 11, 2019), https://tobaccocontrol.bmj.com/content/early/2019/02/21/tobaccocontrol-2018-054616.full [https://perma.cc/S35J-J9DN] (finding JUUL to contain 69mg/mL of nicotine, or 48.3mg).

[20]Spyros Papamichail, Atomizers vs. Clearomizers vs Cartomizers: Everything You Need to Know, Vaping360 (Oct. 2, 2018), https://vaping360.com/best-vape-tanks/atomizers-clearomizers-cartomizers/#what-is-a-clearomizer [https://perma.cc/4GMP-23LD].

[21]VU102 Finding Your Nicotine Strength, Mister-E-Liquid (2019), https://www.mister-e-liquid.com/vu102-finding-your-nicotine-strength/ [https://perma.cc/QY9Y-NU8A].

[22]Bernd Mayer, How much nicotine kills a human? Tracing back the generally accepted lethal dose to dubious self-experiments in the nineteenth century, 88 Archives of Toxicology 5, 5 (2014).

[23]Vieira et al., Quantification of Nicotine in Commercial Brand Cigarettes, 38 Biochemistry and Molecular Biology Educ. 330, 331(2010).

[24]Smoking & Tobacco Use: Fast Facts,CDC (last reviewed Feb. 6, 2019), https://www.cdc.gov/tobacco/data_statistics/fact_sheets/fast_facts/index.htm [https://perma.cc/8BT7-2246].

[25]What’s In a Cigarette?, Am. Lung Ass’n (last updated Aug. 20, 2019), https://www.lung.org/stop-smoking/smoking-facts/whats-in-a-cigarette.html [https://perma.cc/5U8Q-CGFM].

[26]Harms of Cigarette Smoking and Health Benefits of Quitting, Nat’l Cancer Inst. (last reviewed Dec. 19, 2017), https://www.cancer.gov/about-cancer/causes-prevention/risk/tobacco/cessation-fact-sheet#what-harmful-chemicals-does-tobacco-smoke-contain [https://perma.cc/BSE9-CFD7].

[27]What are the Ingredients in Vape Juice?, blu (Jul. 3, 2017), https://www.blu.com/en/US/what-are-the-ingredients-in-e-liquid.html [https://perma.cc/ZR9J-HRNH].

[28]Showing metabocard for Cinnamaldehyde (HMDB0003441), The Hum. Metabolome Database, http://www.hmdb.ca/metabolites/HMDB0003441 [https://perma.cc/V8ZM-LBDX] (last visited Sept. 13, 2019).

[29]Showing metabocard for Benzaldehyde (HMDB0006115), The Hum. Metabolome Database, http://www.hmdb.ca/metabolites/HMDB0006115 [https://perma.cc/YK5C-4297] (last visited Sept. 13, 2019).

[30]Erythropel et al., Formation of flavorant—propylene Glycol Adducts with Novel Toxicological Properties in Chemically Unstable E-Cigarette Liquids, 21 Nicotine & Tobacco Res. 1248, 1248 (2019).

[31]Herrington, JS & Myers, C, Electronic cigarette solutions and resultant aerosol profile, 1418 J. of Chromatography A 192, 192 (2015).

[32]Michael Joseph Blaha, 5 Vaping Facts You Need to Know, John Hopkins Med.(2019), https://www.hopkinsmedicine.org/health/wellness-and-prevention/5-truths-you-need-to-know-about-vaping [https://perma.cc/LQ44-RTTU].

[33]Outbreak of Lung Disease Associated with E-Cigarette Use, or Vaping, CDC (Sept. 12, 2019), https://www.cdc.gov/tobacco/basic_information/e-cigarettes/severe-lung-disease.html [https://perma.cc/N94Z-Q2Y6].

[34]See CDC, supra note 21.

[35]A rate of 480,000 deaths for approximately 40 million adult smokers in the U.S. equals a mortality risk of 1.2%, or 1 in 83.3. About 3.7% of adults used e-cigarettes in 2014, translating to 9.06 million vapers. A rate of 386 serious illnesses or deaths for those 9.06 million vapers equals a risk of 0.0043%, or 1 in 23,467. SeeSmoking & Tobacco Use: Data and Statistics, CDC(last reviewed Feb. 28, 2019), https://www.cdc.gov/tobacco/data_statistics/index.htm [https://perma.cc/R4NY-EB5P]; Charlotte A. Schoenborn & Renee M. Gindi, Electronic Cigarette Use Among Adults: United States, 2014, CDC(Oct. 2015), https://www.cdc.gov/nchs/data/databriefs/db217.pdf [https://perma.cc/6TGJ-5BBP]; Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States, States, Counties, and Puerto Rico Commonwealth and Municipios: April 1, 2010 to July 1, 2018: 2018 Population Estimates, U.S. Census Bureau: Am. Fact Finder, 4 (Apr. 1, 2018), https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml (click on “Age” on the left sidebar, then “Annual Population Estimates for Selected Age Groups by Sex” in the body of the page, then “Print” under Actions). 

[36]See Harris, supra, note 6.

[37]Gentzke et al., Vital Signs: Tobacco Product Use Among Middle and High School Students — United States, 2011-2018,CDC(last reviewed Feb. 14, 2019), https://www.cdc.gov/mmwr/volumes/68/wr/mm6806e1.htm?s_cid=osh-vs-mmwr-full-001 [https://perma.cc/GLB4-SLQT].

[38]Cigarette Use Among High School Students — United States, 1991–2009, CDC (Jul. 9, 2010), https://www.cdc.gov/mmwr/preview/mmwrhtml/mm5926a1.htm [https://perma.cc/XR9W-NWJY].

[39]Id.

[40]The number of vape shops in the U.S. is difficult to pin down. One study looking at the proximity of vape shops to college campuses identified 9,945 shops in 2015. In 2014, the Smoke-Free Alternatives Trade Association, a vaping industry group, estimated the number of vape shops in the U.S. to be 35,000. To complicate matters, smoke shops, which sell traditional tobacco products and added ENDS products to their inventory, might number over a hundred thousand: California alone claims to regulate more than “34,000 retailers with tobacco licenses and vape shops.” SeeHongying Dai & Jianqiang Hao, Geographic density and proximity of vape shops to colleges in the USA, 26 TOBACCO CONTROL 379, 379 (2017); Mike Esterl, Big Tobacco’s E-Cigarette Push Gets a Reality Check, The Wall St. J.(Aug. 26, 2014, 2:38 PM), https://www.wsj.com/articles/big-tobaccos-e-cig-push-gets-a-reality-check-1409078319 [https://perma.cc/7UHF-SUFB]; New California Tobacco Laws Go Into Effect,Cal. Dep’t. of Pub. Health(Jun. 9, 2016), https://www.cdph.ca.gov/Programs/OPA/Pages/NR16-035.aspx [https://perma.cc/A2MY-PUDY].

H.B. 6: Is this the End of Nuclear Power in Ohio?

“Dungeness”by nigelphoto2011 is licensed under CC BY-NC-ND 2.0

William Malson, Associate Member, University of Cincinnati Law Review 

Disclaimer: the author is employed by a group seeking to hold a referendum on H.B. 6.

Background

In 1966, the Atomic Energy Commission discontinued operations of the Piqua Nuclear Power Facility just outside the southern city limits of Piqua, Ohio.[1] Ohio would be without nuclear power for eleven years, until the licensing of the Davis-Besse Nuclear Power Station (“Davis-Besse”) in 1977[2] and the Perry Nuclear Power Plant in 1986.[3] Today, these plants are at risk of being decommissioned by the owner of both plants—FirstEnergy Corp. (“FirstEnergy”)[4]—citing financial inability to continue routine operations,[5] such as the ability to purchase fuel for Davis-Besse.[6] In response, the Ohio General Assembly passed Amended Substitute House Bill 6 (“H.B. 6”), providing for new charges for electricity customers that will ultimately be passed on to “qualifying nuclear resources” in Ohio—namely, FirstEnergy’s nuclear plants.[7] But H.B. 6 is not without controversy. Groups as diverse as the Sierra Club[8] and the American Petroleum Institute[9] have condemned the bill, uniting in opposition to one of the key features of the law: the bailout of FirstEnergy’s nuclear plants.

What’s happening to nuclear power in Ohio?

Nationwide, nuclear power made up almost twenty percent of electricity generated in 2018.[10] But that number will likely drop in the near future, as more than one-third of existing nuclear power plants, representing twenty-two percent of total U.S. nuclear capacity, are either unprofitable or scheduled to close.[11] Ohio generates fifteen percent of its energy from nuclear power,[12] less than the national average, and most at-risk nuclear plants are in the Midwest and Mid-Atlantic regions.[13] Consistent with the national decline, on March 29, 2018, FirstEnergy Solutions, a subsidiary of FirstEnergy Corp.,[14] asked the U.S. Department of Energy to issue an emergency order to the regional transmission organization to compensate FirstEnergy’s at-risk plants “for the full benefits they provide to energy markets and the public at large.”[15] No such order came, and FirstEnergy Solutions filed for chapter 11 bankruptcy on March 31, 2018.[16]

Enter H.B. 6.

What is H.B. 6?

In the midst of FirstEnergy Solutions’s extended and contentious bankruptcy proceeding,[17] the General Assembly conceived and passed House Bill 6, signed into law July 23, 2019, effective October 22, 2019.[18] While H.B. 6 also includes large cuts in renewable energy requirements and deregulations of small wind farms,[19] a key feature of the law is the establishment of the nuclear generation fund, out of which FirstEnergy’s plants will receive payments between April 2021 through January 2028.[20] The nuclear fund will consist of a new charge levied on electricity customers in Ohio totaling $150,000,000 annually—or $1.05 billion over the next 7 years—up to 85 cents per month for residential customers, and $2,400 per month for certain industrial customers.[21] H.B. 6 also requires the Ohio Public Utilities Commission to establish a non-bypassable, statewide cost-recovery charge between 2020 and 2030, capped at $1.50 per month for residential customers and $1,500 per month for all other customer classes.[22] Together, the maximum annual charge for residential customers would be $28.20.

Public backlash

The noise generated by interest groups and news publications surrounding the law’s passage has been underscored by an attempt to overturn the law in its entirety.[23] Under article II, section 1c of the Ohio Constitution, citizens have the power to overturn laws by referendum, applicable to any law except those providing for tax levies, appropriations for the current expenses of the state government and institutions, and emergency laws necessary for the immediate preservation of the public peace, health or safety, as provided in section 1d.[24] If successful, the law would not go into effect unless it is approved by a majority of voters in the next election.[25] In this case, that’s November 2020.

To appear on the ballot, the referendum must be signed by six percent of Ohio voters, determined by the total votes cast in the previous gubernatorial election.[26] But before the constitutional process, there is a statutory process, requiring those seeking to utilize the referendum power to submit a summary of the law, signed by 1,000 Ohio voters, to the Ohio Attorney General and Ohio Secretary of State, who must approve the summary and verify the signatures before circulation.[27] This referendum power, though originating with the Ohio Constitutional Convention of 1912, is not often used.[28] Since 2006, only eight referendum petitions were approved out of ninety-five separate attempts to use the referendum or initiative powers to overturn laws or propose constitutional amendments or statutes.[29] The last time a petition was approved for circulation was June 21, 2013, in an attempt to refer new restrictions on electronic gambling.[30] But the power has again been used.

Recent Developments

On August 29, 2019, Ohio Attorney General Dave Yost approved a summary petition to refer H.B. 6 in its entirety.[31] The next day, Ohioans Against Corporate Bailouts (“OACB”), the group behind the referendum, announced that it had begun circulating petitions to put the law up for a general vote in the November 2020 election.[32] In response, on September 4, 2019, FirstEnergy Solutions challenged OACB’s referendum petition in the Ohio Supreme Court, asking the Court to exempt H.B. 6 from referendum, contending that the “charge” applied to electricity customers is legally a “tax,” and therefore not subject to the referendum power under article II, section 1c.[33] On September 10, 2019, the Court ordered OACB to answer or move to dismiss the complaint by October 1, 2019.[34]

It is unclear whether FirstEnergy Solutions will be successful in its attempt to prevent referral of H.B. 6. In the past, the Court has held that the referendum power should be broadly construed “unless the act in question is plainly and persuasively included within one of the three classes excepted from the operation of the referendum.”[35] But where the law in question clearly falls under the exceptions of article II, section 1d, the Court has not hesitated to allow its immediate effect.[36] If FirstEnergy Solutions is unable to convince the Court to stop the referendum of H.B. 6 from going forward, voters are likely to overturn the law next year, perhaps ending the era of nuclear power in Ohio.[37]


[1]U.S. Dep’t of Energy, Off. of Legacy Mgmt., Piqua, Ohio, Decommissioned Reactor Site, 1 (2018), https://www.lm.doe.gov/Piqua/Fact_Sheet.pdf [https://perma.cc/W4EY-3TJK].

[2]FirstEnergy, Davis-Besse Nuclear Power Station, https://www.firstenergycorp.com/content/dam/corporate/fenoc/files/Davis-Besse_Plant_Facts_at_a_Glance.pdf [https://perma.cc/H3BX-PFEJ] (last visited Sept. 9, 2019).

[3]FirstEnergy, Perry Nuclear Power Plant, https://www.firstenergycorp.com/content/dam/corporate/generationmap/files/Perry%20Plant%20Facts.pdf [https://perma.cc/CP5P-ZQP7] (last visited Sept. 9, 2019).

[4]James Conca, Why Closing Ohio’s Nuke Plants Will End Up Killing More Ohioans, Forbes (Jul. 9, 2019), https://www.forbes.com/sites/jamesconca/2019/07/09/message-to-ohio-more-people-die-when-nuclear-plants-close/#6e7062046271 [https://perma.cc/KN6H-J4QZ].

[5]FirstEnergy Solutions, FirstEnergy Solutions Seeks Emergency Order to Avert Power Crisis, 1 (Mar. 29, 2018), https://www.fes.com/content/dam/fes/about/files/newsreleases/fes-202c-release.pdf [https://perma.cc/ZPD5-6NCQ].

[6]Reproduction of FirstEnergy Solutions Corp. Press Release, PR Newswire (Jul. 1, 2019, 9:15 AM), https://www.prnewswire.com/news-releases/firstenergy-solutions-corp-300878525.html [https://perma.cc/D4B3-PVJX].

[7]Am. Sub. H. B. No. 6, 133d Gen. Assemb., Reg. Sess. (Oh. 2019).

[8]Sierra Club: Ohio Chapter, Update & Actions for HB 6 (May 6, 2019), https://www.sierraclub.org/ohio/blog/2019/05/update-actions-for-hb-6 [https://perma.cc/K2KX-9PMQ].

[9]API Ohio Disappointed in Ohio Lawmakers for Passage of Nuclear Bailout Laws, Am. Petrol. Inst.: News (Jul. 23, 2019), https://www.api.org/news-policy-and-issues/news/2019/07/23/api-ohio-on-hb6-passage [https://perma.cc/48NH-Q9KW].

[10]What is U.S. electricity generation by energy source?, U.S. Energy Info. Admin.: Frequently Asked Questions (last updated Mar. 1, 2019), https://www.eia.gov/tools/faqs/faq.php?id=427&t=3 [https://perma.cc/2P8X-U5ZV].

[11]Clemmer et al., The Nuclear Power Dilemma, Union of Concerned Scientists, 2 (2018), https://www.ucsusa.org/sites/default/files/attach/2018/11/Nuclear-Power-Dilemma-full-report.pdf [https://perma.cc/F7L4-MRLB].

[12]The Pub. Util. Comm’n of Ohio, How does Ohio generate electricity, https://www.puco.ohio.gov/be-informed/consumer-topics/how-does-ohio-generate-electricity/ [https://perma.cc/9ZHA-ZJB3] (last visited Sept. 9, 2019).

[13]Clemmer et al., supra note 11, at 3.

[14]Homepage of FirstEnergy Solutions, FirstEnergy Solutions (2019), https://fes.com [https://perma.cc/G2DS-KQH9].

[15]Reproduction of Request for Emergency Order Pursuant to Federal Power Act Section 202(c), Harv. Elec. L. Inst.: St. Power Project, 1 (Mar. 29, 2018), https://statepowerproject.files.wordpress.com/2018/03/fes-202c-application.pdf [https://perma.cc/FU7Y-LZ9Y].

[16]In re FirstEnergy Sols. Corp., No. 18-50757, 2018 WL 2315916, at *1 (Bankr. N.D. Ohio May 18, 2018).

[17]See Andrew Scurria, FirstEnergy’s Bankruptcy Deal With Power Units Collapses, Wall St. J.(Apr. 4, 2019, 6:42 PM), https://www.wsj.com/articles/firstenergys-bankruptcy-deal-with-power-units-collapses-11554409862 [https://perma.cc/Q43J-BCDK]; John Funk, FES and FE have created a ‘scheme’ that is an ‘abuse of the bankruptcy system’: Feds say, The Plain Dealer (updated Apr. 2, 2019), https://www.cleveland.com/business/2019/04/fes-and-fe-have-created-a-scheme-that-is-an-abuse-of-the-bankruptcy-system-feds-say.html [https://perma.cc/3AE2-9NF5].

[18]The Ohio Legis., House Bill 6: Status (2019), https://www.legislature.ohio.gov/legislation/legislation-status?id=GA133-HB-6 [https://perma.cc/VUU7-BGEC].

[19]See Creates Ohio Clean Air Program, 2019, Am. Sub. H. B. No. 6, 2019, Ohio Laws File 12, §§ 4928.64, 4928.66; §§ 4906.13, 5727.75.

[20]See id.§ 3706.49, §§ 3706.45, 3706.55.

[21]Id.§ 3706.46.

[22]Id. § 4928.148.

[23]See David Roberts, Ohio just passed the worst energy bill of the 21st century, VOX(Jul. 27, 2019, 12:00 PM), https://www.vox.com/energy-and-environment/2019/7/27/8910804/ohio-gop-nuclear-coal-plants-renewables-efficiency-hb6 [https://perma.cc/HC9B-FWB6]; Don’t Be Fooled – HB 6 is a Bailout for First Energy, AARP, https://action.aarp.org/site/Advocacy?cmd=display&page=UserAction&id=7873 [https://perma.cc/29Z8-KVWT] (last visited Sept. 9, 2019); Steve Clemmer, 5 Reasons Why HB 6, Ohio’s Nuclear Plant Subsidy Proposal, Should Be Rejected, Union of Concerned Scientists: Blog (May 16, 2019, 10:38 AM), https://blog.ucsusa.org/steve-clemmer/5-reasons-why-hb6-should-be-rejected [https://perma.cc/24SK-QHD3]; HB 6, the Ohio nuclear bailout bill, is a bad bill, but it can be made better: editorial, The Plain Dealer(May 10, 2019), https://www.cleveland.com/opinion/2019/05/hb-6-the-ohio-nuclear-bailout-bill-is-a-bad-bill-but-it-can-be-made-better-editorial.html [https://perma.cc/2RTP-JNUQ]; Daniel Carson, HB 6 opponents make second effort to start referendum campaign, USA Today Network: Fremont News Messenger (Aug. 20, 2019, 6:29 PM), https://www.thenews-messenger.com/story/news/local/2019/08/20/nuclear-power-plant-bailout-house-bill-6-opponents-second-petition-for-referendum/2060840001/ [https://perma.cc/SJ8F-52ES].

[24]OH. Const. art. II, § 1d.

[25]Id.§ 1c.

[26]Statewide Referendum, Ohio Sec’y of St., https://www.sos.state.oh.us/legislation-and-ballot-issues/putting-an-issue-on-the-ballot/statewide-referendum/ [https://perma.cc/BPU2-AJTW] (last visited Sept. 9, 2019).

[27]Ohio Rev. Code Ann. § 3519.01(B) (LexisNexis 2019).

[28]Proceedings and Debate of the Constitutional Convention of the State of Ohio – 1912: Seventy-Ninth Day, The Sup. Ct. of Ohio & The Ohio Jud. Sys.,1950, https://www.sconet.state.oh.us/LegalResources/LawLibrary/resources/day79.pdf [https://perma.cc/46MH-BCUL] (last visited Sept. 9, 2019).

[29]List of petitions submitted to the Attorney General’s Office, Ohio Att’y Gen., https://www.ohioattorneygeneral.gov/Legal/Ballot-Initiatives/Petitions-Submitted-to-the-Attorney-General-s-Offi [https://perma.cc/TF77-9G8W] (last visited Sept. 9, 2019).

[30]Referendum Petition appearing on List of petitions submitted to the Attorney General’s Office, Ohio Att’y Gen., https://www.ohioattorneygeneral.gov/getattachment/551303f0-3b3e-419e-bf91-8a2023d0c673/Referendum-on-Sub-H-B-7-(Internet-Cafes).aspx [https://perma.cc/446M-G4AY] (last visited Sept. 9, 2019).

[31]Approval of Summary Petition for Referendum of Am. Sub. H.b. 6, Ohio Att’y Gen.(Aug. 29, 2019), https://www.ohioattorneygeneral.gov/getattachment/4631259c-509f-49ac-abe8-604a44c8e2d7/Referendum-of-Am-Sub-H-B-No-6-(Resubmission).aspx [https://perma.cc/G5ZE-GTUW].

[32]Tom Jackson, Petition drive launched to reverse aid to Ohio’s nuclear plants, Sandusky Reg.(Sept. 9, 2019, 9:00 AM), http://www.sanduskyregister.com/story/201908300043 [https://perma.cc/4NJB-T45B].

[33]Challenge to Referendum Petition Under Article II, Section 1g of Ohio Constitution and Verified Complaint for Writ of Mandamus, The Sup. Ct. of Ohio: Case Information (Sept. 4, 2019), http://supremecourt.ohio.gov/pdf_viewer/pdf_viewer.aspx?pdf=871986.pdf [https://perma.cc/SVB7-3KPK].

[34]Summons, The Supreme Court of Ohio: Case Info. (Sept. 10, 2019), http://supremecourt.ohio.gov/pdf_viewer/pdf_viewer.aspx?pdf=872288.pdf [https://perma.cc/63VS-NXHC].

[35]State ex rel. LetOhioVote.org v. Brunner, 916 N.E.2d 462 (Ohio 2009). 

[36]State ex rel. Ohio AFL-CIO v. Voinovich, 631 N.E.2d 582, 591 (Ohio 1994).

[37]Dan Shingler, Referendum to defeat House Bill 6 begins to gather energy in state, Crain’s Cleveland Bus. (Aug. 4, 2019, 4:00 AM), https://www.crainscleveland.com/energy-and-environment/referendum-defeat-house-bill-6-begins-gather-energy-state [https://perma.cc/JG9V-P4EB].