Professor Balkin Defends Constitutionality of Bonus Tax

Professor Jack Balkin has summarily rejected most of the prevailing constitutional arguments against the House of Representatives measure that would tax bonuses received by AIG executives and other TARP participants. The five most prevalent arguments include that the tax would violate the: 1. Due Process Clause of the Fifth Amendment; 2. Takings Clause; 3. Ex Post Facto Clause; 4. Contracts Clause; and 5. Bill of Attainder Clause. I agree with Balkin that 2, 3, and 4 are not relevant, but his due process and bill of attainder analysis is too swift.

Due Process
With respect to the due process argument, I agree with Balkin that a reviewing court would likely consider whether the measure is "rationally related to a legitimate government interest." Balkin argues that Congress can legitimately seek to avoid "extraordinary rents" to TARP participants and their employees and to curb "improper incentives and moral hazard in subsidized companies and their employees."

Assuming that these interests are indeed legitimate, the due process problem arises because in February, Congress explicitly exempted AIG's bonus payments from legislation that regulates compensation and bonus practices of TARP recipients. Although the measure would have effectively banned the controversial bonus payments, Congress gave the provision prospective, rather than retroactive application.

I would normally agree with Balkin that courts should not second-guess Congress under ordinary rational basis review. But AIG acted with explicit legal authority when it paid the bonuses. Neither the original version of TARP nor the regulations promulgated by the Treasury Department in the Bush and Obama administrations bans the bonuses. Congress recently enacted a measure that would have banned the bonuses, but it does not apply to AIG. Apparently, the Treasury Department requested that the restrictions not apply retroactively, and Congress agreed.

Now, Congress is trying to direct the Treasury Department to change course and subject the bonuses it only recently voted to exempt from regulation to an almost 100% tax. Even if these facts do not lead 5 or more Supreme Court Justices to conclude that the law violates the Due Process Clause, the issue strikes me as being a bit more complicated than Balkin's analysis suggests.

Bill of Attainder
Balkin's analysis of the bill of attainder issue is too abstracted and divorced from the factual context in which the tax proposal arises. Balkin dismisses the bill of attainder argument because the law does not "single out" individuals and it applies retrospectively and prospectively:

First, the tax defines the class to which it applies to an abstractly defined group rather than naming particular individuals. It applies to persons working for enterprises that have received emergency government subsidy; it is not aimed at particular companies or specific employees. Second, the tax is for a regulatory purpose, as described above, and not for a punitive purpose. Preventing misuse of government funds, limiting bad incentives, and avoiding moral hazard are regulatory purposes, not punitive purposes. The fact that isolated members of Congress may have expressed an impermissible punitive or retributive purpose does not mean that the tax violates the Constitution if the text of the bill on its face has an overtly regulatory purpose. Third, the tax is both prospective and retrospective in its targets, which is consistent with a regulatory as opposed to a punitive purpose.

If the factors Balkin lists are the only ones a court would consider in a bill of attainder analysis, I would argue that they could weigh against the tax, and not necessarily for it. Balkin's argument that the tax does not target AIG recipients and that it applies to an "abstractly defined group" requires us to suspend reality. Even though the House measure is written in general terms, the motivation behind the measure is very clear: The House seeks to "punish" AIG and its executives by recouping almost 100% of the bonus payments.

Balkin's argument would legitimize the type of formalistic arguments that litigants often make when they want to avoid the impact of and impulse for their actions. Formalism has been invoked to justify gross violations of due process and equality (such as segregation and unequal application of the criminal law). Balkin's abstracted analysis of the bill of attainder provision comes dangerously close to legitimizing the very type of formalistic arguments that routinely mask and excuse injurious and unfair governmental action.

First Bush, Now Obama: Department of Justice Opposes Inmate's Effort to Test DNA Evidence Used to Convict Him

Some commentators are criticizing the Obama administration's position in the case: District Attorney's Office for the Third Judicial District v. Osborne. The case involves an Alaska inmate's effort to obtain access to DNA evidence used to convict him of rape in 1994. Prevailing technology at the time could not establish his guilt or innocence with certainty; today, it would. The Office of the Solicitor General has adhered to Bush's position that the inmate does not have a constitutional right to re-test the DNA evidence, even though doing so could establish his innocence and despite the fact that his attorney will pay for the new scientific analysis of the evidence.

The Issues
Alaska is one of only six states where inmates do not have a post-conviction right to DNA evidence used to convict them. Osborne argues that he has a constitutional right to the evidence. The Ninth Circuit Court of Appeals agrees with him. The Supreme Court recently held oral arguments in the case.

The Supreme Court often looks to state law to determine whether "the people" have spoken on the existence of a constitutional right (this diminishes charges of "judicial activism"). Accordingly, the Court could view Alaska as an "outlier" and hold that due process requires that the state allow Osborne to test the DNA evidence. Post-conviction access to DNA evidence is particularly important in older convictions in which DNA analysts utilized primitive technology.

It is unclear what Alaska gains from its refusal to turn over the evidence. If the DNA analysis determines that Osborne is a rapist, the case ends. If not, then justice requires his release from prison. Osborne has secured pro bono legal representation, and his lawyers have offered to pay for the DNA testing.

Some prosecutors, however, have been defiant even when DNA establishes an inmate's innocence (or at least demonstrates that the individual is not guilty). In 2002, a federal court in Pennsylvania ruled -- in a strikingly similar case -- that the inmate, who was convicted of raping two women, had a post-conviction right to re-test the DNA evidence. The DNA screening proved that the same person raped the two women -- but that the inmate was not the rapist. The prosecutor still refused to accept the results.

Another series of test showed that the inmate was not the rapist, but the prosecutor again refused to believe that he was innocent. The prosecutor nevertheless asked the judge to release the inmate because he did not have sufficient evidence to prove his guilt.

Obama and DNA Rights
As a state senator, Obama sponsored and lobbied for legislation that gave all inmates a post-conviction right to DNA evidence -- the same right that Osborne asserts in this case. The government's position does not prevent states from passing laws to establish this right in the future; instead, it seeks to rebut the inmate's argument that due process establishes this right.

The Bush administration was not required to take a position in this case. Although the Bush administration decided to submit a brief in the case, the Obama administration could have refused to defend it, withdrawn it, or even switched position. And while the Solicitor General has a culture of maintaining the same positions as the previous administration in pending cases, critics argue that the issues this case raises are so substantial that the Obama administration could have legitimately abandoned Bush's argument.

Final Words
I believe that inmates should have the right to test DNA evidence used to convict them. They certainly should have the right to test the evidence prior to a conviction. The issue of cost is not relevant in this particular case, because Osborne's lawyers will pay for the DNA analysis. Because I strongly believe in due process and because science can answer the question of guilt or innocence, I believe that the Court should rule against Alaska and reject the Bush-Obama arguments.

William Sessions, a former federal judge and Director of the FBI during the Reagan administration, has a very passionate take on the case that appears on Slate.Com. I close this essay with a slice of Sessions' argument:

It's a generally laudatory goal for a new president to continue the DoJ polices of the previous one when he takes office. But a change in position may be warranted in some cases. Osborne is one of them. The Justice Department's decision is particularly perplexing because when President Obama was an Illinois state senator, he responded to that state's wrongful conviction problem by leading a bipartisan effort to help prevent convictions of the innocent, including laws allowing access to DNA evidence.

Evidence of innocence does—and must—matter to all of us, whenever it is presented. I have no idea whether Osborne is guilty. If the DNA shows that he is, so be it. But what if it shows he is not? Wouldn't victims of crime want to know if the wrong person is imprisoned, and the real perpetrator is still on the streets, free to commit more crimes? Wouldn't all of us want to know this?

Former Attorney General John Ashcroft has called DNA the "truth machine of law enforcement." Why should our criminal justice system be afraid of that truth machine? . . . .

Note: The SCOTUS Blog contains excellent coverage of this issue. Law.Com also has helpful analysis.