By David B. Rivkin Jr. and Andrew M. Grossman

Jan. 6, 2022, in the Wall Street Journal

Hours after President Biden’s Sept. 9 speech announcing a series of vaccine mandates for private-sector employees, his chief of staff, Ron Klain, retweeted an MSNBC anchor’s quip that wielding workplace-safety regulation to force vaccinations was “the ultimate work-around.” Congress has never enacted a law requiring American civilians to be vaccinated—assuming it even has the constitutional authority to do so, which is doubtful. The Supreme Court hears arguments Friday on two of the mandates, which are likely to meet the same fate as other recent attempts to circumvent Congress that the courts have rejected.

The Constitution vests the power to make laws in Congress and charges the president with the duty to execute them. That’s what many in Washington derisively call the “high school civics class” model of government. It’s slow, it’s cumbersome, it rarely approves measures that don’t enjoy widespread public support, and it forces compromise, moderation and tailoring of policies to address the circumstances of a vast and varied nation. The temptation of avoiding it via executive fiat is obvious.

All it seems to take is clever lawyering. The U.S. Code is littered with broadly worded laws, made all the more capacious by judicial deference to agencies’ interpretations of them. Rather than dutifully carry out Congress’s design, a president can set his own policy and then scour the statute books for language that can be contorted to authorize it. In a 2001 Harvard Law Review article, then- Prof. Elena Kagan called the practice “presidential administration.” President Obama put it more plainly when he faced congressional resistance to his agenda: “I’ve got a pen to take executive actions where Congress won’t.”

But it isn’t quite that easy. The Clean Power Plan, Mr. Obama’s signature climate policy, set rigid and unattainable emission limitations for fossil-fuel power plants to force them out of operation and transform the energy market. It relied on an adventuresome interpretation of an obscure provision of the Clean Air Act. In 2016 the Supreme Court blocked it from taking effect, and the Trump administration later repealed it. (We represented Oklahoma in the litigation.)

Mr. Obama’s immigration-reform measures—also taken in the face of congressional opposition—suffered a similar fate. Deferred Action for Childhood Arrivals—which allows illegal aliens who were brought to the U.S. as children to work and avoid deportation—remains in legal limbo nearly a decade after it was established, following setbacks in the courts. Its counterpart for parents of U.S. citizens and permanent residents was enjoined before it took force.

Mr. Biden has had a taste of defeat himself, in a case that prefigures the mandate challenges. After Congress declined to extend the Trump administration’s nationwide eviction moratorium, the Biden administration acted on its own, relying on a 1944 statute authorizing the Centers for Disease Control and Prevention to undertake clearly delineated disease-prevention measures like fumigation and pest extermination. The justices, however, found it unthinkable that Congress had intended to confer on CDC so “breathtaking” an authority: “We expect Congress to speak clearly when authorizing an agency to exercise powers of vast economic and political significance.”

In other words, loose language in old laws isn’t enough to support a presidential power grab. Yet that’s all the support the administration has been able to muster for the vaccination mandates. The Occupational Safety and Health Administration mandate forcibly enlists all companies with 100 or more employees to administer a vaccination-or-testing requirement that reaches nearly 85 million employees. It relies on a narrow provision addressing workplace-specific hazards that has never been used to require vaccination. The mandate for Medicare and Medicaid providers (covering 10.3 million workers) rests on general provisions authorizing regulations necessary to administer those programs—which, again, have never been used to require vaccinations. None of these statutes contain even a hint that Congress authorized any agency to administer broad-based vaccination mandates touching millions of Americans.

Although the mandates are flawed in other ways, their lack of clear congressional authorization is the most striking defect. Excessive judicial deference to agencies’ statutory interpretations is what enabled Mr. Obama’s “I’ve got a pen” agenda and its revival under Mr. Biden. The result has been to distort the entire federal lawmaking apparatus. Members of Congress now lobby the executive branch to make law through regulation rather than legislate themselves. Agencies enact major policies that have the durability of a presidential term before they’re reversed. And the president would sooner blame the courts for legal defeats than admit he lacks the power to do his allies’ bidding.

The courts share blame for this state of affairs, having lost sight of the basic separation-of-powers principles that should guide questions of agencies’ statutory authority. A decision rejecting the vaccination mandates because they weren’t clearly authorized by Congress would serve as a shot across the bow signaling that the work-around era is over.

Mr. Rivkin served at the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations. Mr. Grossman is an adjunct scholar at the Cato Institute. Both practice appellate and constitutional law in Washington.

Source: https://www.wsj.com/articles/end-of-work-arounds-biden-executive-order-vaccine-mandate-covid-omicron-supreme-court-11641505106

By David B. Rivkin Jr. and Lee A. Casey

7 December 2021 in the Wall Street Journal

Congress is about to begin another debt-ceiling fight, and it threatens the Constitution as well as America’s solvency.

Over the past two years, Uncle Sam has borrowed and spent trillions of dollars to address Covid-19. Coronavirus spending added nearly $3 trillion to the national debt this year alone—and that doesn’t count the recently passed infrastructure bill and the pending Build Back Better Act. The unprecedented growth in federal outlays has contributed to inflation, which has reached a 30-year high, and caused annual budget deficits to soar.

The government is about to reach its statutory federal borrowing limit of $28.4 billion. If Congress doesn’t increase the limit, Washington will run out of money to meet its legal obligations. Republicans and Democrats are at loggerheads over how much to spend and whether to enact what the Democrats call “transformational” legislation—measures that would reshape the American economy and increase government’s role in nearly all aspects of life.

The threat to the Constitution comes from one of the options lawmakers are considering: suspending rather than raising the statutory debt ceiling, thereby authorizing the executive branch to borrow an unlimited amount of money for a limited time. Suspending the debt ceiling would undermine the structure of American democracy—particularly when government spending obligations are in flux, and the future direction of key policies is being fiercely contested.

Senate Minority Leader Mitch McConnell has warned Democrats that if they insist on enacting major and costly policy changes on a partisan basis, they will have to increase the debt ceiling without votes from Republicans. That could be accomplished through budget reconciliation, the means by which the Democrats intend to pass the Build Back Better Act with a simple majority. But Democrats are wary of unilaterally raising the debt ceiling, which isn’t popular.

In October, facing a debt-ceiling stalemate and a possible government shutdown, Republicans reluctantly supplied the votes necessary to increase the debt ceiling by $480 billion. That was constitutionally proper, but it bought only a little time. The increase will be exhausted this month, and Mr. McConnell and Majority Leader Chuck Schumer have again started negotiations on the debt ceiling.

Congress usually raises the statutory debt ceiling to a new specific dollar amount, a core part of its constitutional power of the purse. Occasionally, however, Congress (with both parties in the majority) has “suspended” the debt ceiling. As we argued in these pages during the last debt-ceiling crisis, such delegations of power are constitutional only if, as Justice Elena Kagan put it in Gundy v. U.S. (2019), “Congress lays down by legislative act an intelligible principle to which the person or body authorized to exercise the delegated authority is directed to conform.”

The current unsettled budgetary environment makes the constitutional infirmity of suspending the debt ceiling acute. When suspensions were adopted in the past, there was at least a shared understanding between Congress and the executive about where the dollars were to go and how much spending there would be. Previous suspensions weren’t coupled with open attempts to transform the country’s economy and society—to upend the fundamental relationship of government to the governed.

Today’s spending plans are opaque and unpredictable. The estimated cost of Build Back Better alone ranges from $1.75 trillion to more than $5 trillion. That lack of clarity could also dramatically alter the terms upon which the Treasury can find willing buyers for new U.S. debt, greatly increasing debt-servicing costs. Suspending the debt ceiling in these circumstances would mean the executive branch is entirely unbound.

As another debt-ceiling cliff-hanger emerges, Democratic leaders appear committed to a suspension, which again would require Republican support. Giving bipartisan cover to another unconstitutional suspension would be disastrous. Decisions about the levels of spending, borrowing and taxation now under consideration require democratic accountability. Congress is almost evenly divided between the two major parties, a situation that counsels against transformative political and economic changes negotiated in back rooms.

If Democrats believe their programs are meritorious enough to burden the country with trillions of dollars in additional debt, they should accept the political risk of raising the debt ceiling without Republican votes. If Democrats are right, they’ll benefit and Republicans will pay the political price for intransigence. That’s how American democracy works, and why so many of the Constitution’s most fundamental provisions, such as Congress’s power of the purse, were adopted—to ensure accountability and the consent of the people.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served at the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush Administrations.

Source: https://www.wsj.com/articles/debt-ceiling-crisis-threatens-democracy-budget-limit-build-back-better-mcconnell-schumer-11638718728

By David B. Rivkin Jr. and Lee A. Casey

Nov. 27, 2020, in the Wall Street Journal

The Covid-19 pandemic “has served as a sort of constitutional stress test,” Justice Samuel Alito observed this month. “The pandemic has resulted in previously unimaginable restrictions on individual liberty.” The setting underscored the point: Justice Alito made his remarks in an online speech that ordinarily would have been delivered in a cavernous hall, before a crowd of hundreds gathered for the Federalist Society’s annual dinner.

A public-health emergency may justify curtailments of liberty that would be unacceptable in normal times. But even in an emergency, America’s government doesn’t wield unlimited powers. Measures taken to deal with this pandemic have imposed severe restrictions on the most basic rights and liberties, often with little consideration of their legal basis. The U.S. Constitution prohibits many of the most draconian measures taken or under consideration.

Joe Biden has implicitly acknowledged the point. Accepting the Democratic presidential nomination in August, the former vice president declared: “We’ll have a national mandate to wear a mask—not as a burden, but to protect each other. It’s a patriotic duty.” But his transition website promises only to “implement mask mandates nationwide by working with governors and mayors.”

A federal mask mandate is a nonstarter because it would have to be grounded in one of Congress’s constitutionally enumerated powers, all of which have limits. The go-to section to justify federal regulation is the clause granting lawmakers the power “to regulate commerce . . . among the several states.” As the Supreme Court held in National Federation of Independent Business v. Sebelius (2012), which involved the ObamaCare mandate to buy medical insurance, individuals must be engaged in commercial activity before Congress can regulate them. Congress cannot impose requirements on the citizenry “precisely because they are doing nothing,” Chief Justice John Roberts wrote.

The same is true of other prospective federal anti-Covid measures, such as a national “stay at home” order or an overall economic lockdown. Congress does have broad authority to regulate business, which it could use to impose workplace safety rules, including mask mandates. But nationwide lockdowns are a dubious legal proposition. Congress has never attempted to eliminate all or most economic activity. Any such requirement, even if supportable under the Commerce Clause, would raise significant concerns about the constitutional rights of people prevented from earning a living.

State and local mandates pose a more complicated question. Unlike the federal government, states have a general “police power” that permits them to enact public-health regulations. State and local mask mandates will likely survive judicial scrutiny, as the burden is relatively small. But quarantine requirements imposed on otherwise healthy people, and especially stay-at-home orders and shutdowns of economic activity, are another matter.

Courts have generally upheld quarantines as proper exercises of state police power. But they have traditionally required the involuntary seclusion only of infected individuals and those exposed to them. Quarantines for travelers may survive constitutional challenges. They are generally limited to 14 days or less and arguably supported by the states’ interest in limiting the potential to spread the infection from viral “hot spots.”

But states have no constitutional authority to discriminate against out-of-state persons, goods or services or to burden interstate commerce unduly. It would be hard to justify restrictions that draw arbitrary distinctions between intra- and interstate travelers or among states. New York’s current rules, for instance, exempt travelers within New York and from adjacent states while ordering quarantine for those from distant states with lower Covid rates.

Universal, open-ended stay-at-home mandates and general economic shutdowns are unprecedented in America. The former amount to the imposition of house arrest on vast numbers of people without due process or any provision for basic needs. They raise important constitutional issues involving freedom of assembly, due process and equal protection.

Mandating how many individuals can meet in one’s home, as some states did in time for Thanksgiving, is particularly difficult to justify. If the government can regulate your dinner guests, what can’t it do? Although the government has imposed location-specific curfews in times of war and civil disorder to address specific public-safety concerns, protracted populationwide curfews directed at more-nebulous threats will be difficult to justify.

Some of these issues will doubtless reach the Supreme Court, but lower courts are already wrestling with them. In County of Butler v. Wolf, William S. Stickman IV, a federal district judge in Pittsburgh, struck down Pennsylvania’s most draconian anti-Covid-19 measures. These included strict limits on indoor and outdoor gatherings, stay-at-home requirements, and the lockdown of businesses that aren’t “life-sustaining.” Judge Stickman found these measures wanting on First Amendment, due-process and equal-protection grounds, even under an “intermediate” level of scrutiny.

“A public health emergency does not give Governors and other public officials carte blanche to disregard the Constitution for as long as the medical problem persists,” Judge Stickman concluded in his September decision. He took particular note of Pennsylvania’s diversity of communities—and hence of Covid risks—as against the state’s “one-size fits all approach” to stay-at-home orders, which were not in any way tailored to minimize the burden while achieving the government’s legitimate ends.

Judge Stickman concluded that Pennsylvania’s business lockdown requirements failed to meet even the lowest level of constitutional scrutiny—being rationally related to a proper state purpose. He noted that the state had not articulated “a set, objective and measurable definition” of “life-sustaining” businesses, and that its requirements arbitrarily favored large retailers over small ones. Pennsylvania has appealed Judge Stickman’s decision, but it is difficult to see how the state can defend such capricious and comprehensive restrictions. The same goes for other states: Such details as closing health clubs but not beauty salons (New York), or imposing restrictions on the use of sailboats but not motorboats (Michigan), appear driven not by any rational basis but by government officials’ aesthetic and ideological preferences.

No doubt some judges will be inclined to defer to government officials in an emergency. Five Supreme Court justices did so earlier this year when churches in California and Nevada sought to enjoin state orders limiting the number of worshipers at services. In both cases, Chief Justice Roberts voted with the court’s four Democratic appointees to deny immediate relief.

But the other four justices dissented in both cases on the grounds that the orders violate freedom of religion by imposing greater limits on religious activities than comparable secular businesses, including casinos. As Justice Alito quipped during his Federalist Society speech: “Take a quick look at the Constitution. You will see the Free Exercise Clause of the First Amendment, which protects religious liberty. You will not find a craps clause.”

This Wednesday the court granted injunctive relief to the Roman Catholic Diocese of Brooklyn and an Orthodox synagogue, which are challenging New York Gov. Andrew Cuomo’s occupancy limits. Justice Amy Coney Barrett joined the new 5-4 majority. In a concurring opinion, Justice Neil Gorsuch observed that the state had ignored “long-settled principles” that almost always prohibit government officials “from treating religious exercises worse than comparable secular activities.”

One area in which the states clearly can impose anti-Covid mandates is vaccinations. In Jacobson v. Massachusetts (1905), the Supreme court upheld the city of Cambridge’s authority to respond to a smallpox outbreak by mandating vaccines for all inhabitants. The justices affirmed that “the rights of the individual in respect of his liberty may at times, under the pressure of great dangers, be subjected to such restraint, to be enforced by reasonable regulations, as the safety of the general public may demand.”

Congress may also be able to impose vaccination or testing on employees or others engaged in commerce. But proponents of economic lockdowns overreach when they cite Jacobson in support. The case was modest in scope and dealt with a far surer remedy for a deadlier virus than Covid-19.

Federal and state officials have every right to urge Americans to take precautions against viral spread, though it would help if they consistently followed their own advice. But when the government moves beyond persuasion to coercion, its requirements must meet constitutional muster.

Some of them will, such as well-tailored state-level mask and vaccination mandates. Others probably won’t, including broad curfews, stay-at-home orders, economic lockdown mandates and measures that target protected First Amendment activities. There may be a “judicial impulse to stay out of the way in times of crisis,” Justice Gorsuch wrote in the New York case. “But . . . we may not shelter in place when the Constitution is under attack.”

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush.

Source: https://www.wsj.com/articles/the-constitution-will-survive-covid-19-11606502792

By David B. Rivkin, Jr., and J. Michael Luttig

17 August 2020 in the Wall Street Journal

Plaintiff lawyers want insurance companies to absorb the cost to business of the Covid-19 pandemic—and they’ve had some early successes. A federal judge in Kansas City, Mo., last week allowed salon and restaurant owners to proceed with a lawsuit claiming that Covid shutdowns constituted “direct physical loss or damage” covered by business-interruption policies. California lawmakers introduced legislation in June that would establish a presumption that Covid-19 qualifies for such coverage.

Yet however sympathetic their clients, the lawyers’ efforts are unconstitutional and dangerous. They threaten to bankrupt the insurance industry, on which American businesses and consumers depend.

Most commercial policies include coverage for business interruption caused by physical damage to the business assets. If a car dealership suffers tornado damage to its roof, it can recover repair costs and losses incurred while the premises are closed. But disease isn’t “physical loss or damage,” as that phrase is ordinarily understood or typically intended in insurance contracts. Most such contracts expressly exclude such losses. That’s because losses associated with communicable diseases—like those from war or nuclear accident—aren’t insurable. The risks are unknowable, preventing the calculation of a premium sufficient to cover the losses if the event occurs.

As the Supreme Court observed in Los Angeles Department of Water and Power v. Manhart (1978), “drastic changes” in the legal rules governing insurance policies can “jeopardize the insurer’s solvency and, ultimately, the insureds’ benefits.” If the Kansas City lawsuit and hundreds like it succeed in redefining “direct physical loss” to include Covid-induced business closures, insurers would be forced to cover losses that were never underwritten. The industry has enough reserves to pay up to $800 billion for losses covered by home, auto and business policies. Uncovered Covid-19 losses are estimated in the trillions.

Fortunately, there are significant constitutional limits on the ability of either courts or legislatures to change private insurance contracts. The Constitution forbids the states to “impair the obligation of contracts.” As Chief Justice John Marshall observed in Ogden v. Saunders (1827), the power of contract impairment “had been used to such an excess by the state legislatures, as to break in upon the ordinary intercourse of society and destroy all confidence between man and man.” The effect was “not only to impair commercial intercourse and threaten the existence of credit, but to sap the morals of the people and destroy the sanctity of private faith.”

The Contracts Clause has been invoked less frequently since the ratification of the 14th Amendment, whose Due Process Clause has become the preferred vehicle for challenging state regulatory actions. But the justices made clear in Allied Structural Steel Co. v. Spannaus (1978) that it still “limits the power of a State to abridge existing contractual relationships.” In that case, Minnesota rewrote pensions, requiring an employer to pay $185,000 to nine employees who were terminated before their benefits vested under the company’s plan. The court struck down the law as a “severe” and “unreasonably conditioned” retroactive alteration of agreed-upon obligations. Sveen v. Melin (2018), another Minnesota case, upheld a state-mandated invalidation of life-insurance beneficiary designations on divorce—but only because the impairment of the parties’ contractual obligations was minimal. The policyholder could redesignate the former spouse and “reverse the effect of the . . . statute with the stroke of a pen.”

Even during the Depression, the high court was skeptical of state laws that impaired private contracts. Home Building & Loan Association v. Blaisdell (1934) upheld a state law that extended the time allowed for redeeming real property from foreclosure under existing mortgages, but only because the redemption extension was a reasonable temporary condition.

State legislatures that attempt to abridge commercial insurance contracts today may argue that they are meeting a Depression-caliber economic emergency. Yet although the court reaffirmed in Spannaus that states’ ability to impair contract obligations is greater during an emergency, it also held that such laws must be “tailored to the emergency that it is designed to meet” and impose only “reasonable” conditions. Legislative changes establishing liability for Covid-19 losses would completely abrogate existing contracts and impose immediate, permanently binding, ruinous contractual obligations that the parties specifically contracted not to cover. They would almost certainly be struck down under the Contracts Clause.

Federal efforts to impose new contracts on insurance companies would also be unlikely to survive a constitutional challenge. The Fifth Amendment’s Due Process Clause prohibits Congress from imposing retroactive liabilities that, as the court put it in Landgraf v. USI Film Productions (1994), “increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed.” In Eastern Enterprises v. Apfel (1998), the court struck down a law imposing new pension liabilities on employers based on decades-old contracts. The justices couldn’t agree on a rationale for their ruling: A plurality saw it as an unconstitutional taking without just compensation. But in a concurring opinion, Justice Anthony Kennedy argued that it violated due process. He noted that political pressures tempt lawmakers “to use retroactive legislation as a means of retribution against unpopular groups or individuals.”

Businesses, especially small ones, have suffered terribly because of the Covid-19 virus. Many likely won’t survive. But shifting the burden to the insurance industry by either judicial rewriting or legislatively abrogating insurance contracts would be unconstitutional, especially since the losses have been largely caused by government decrees. Congress has already provided enormous financial assistance to American businesses—the appropriate means of compensating losses suffered from the government’s shutdown of the economy.

Because the litigation threat is existential, the insurance industry should do more than defend specific lawsuits. It should seek declaratory judgments now, establishing the limits of their potential liability. It also should work to convince federal and state lawmakers that they neither should nor constitutionally could abrogate and rewrite private insurance contracts.

Mr. Rivkin practices appellate and constitutional law in Washington. He served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush. Mr. Luttig was general counsel of the Boeing Co., 2006-20. He served as a judge on the Fourth U.S. Circuit Court of Appeals. 1991-2006.

Source: https://www.wsj.com/articles/coronavirus-contracts-and-the-constitution-11597705464

In this interview on War-room, I take listeners through the arguments why immunity (even if temporary) from Covid liability is needed now to kickstart an economic recovery. This will allow time for comprehensive federal regulatory guidelines to follow. The interview follows my recent op-ed in the Wall Street Journal with Michael Luttig (see below).

Congress has the power to limit coronavirus liability while regulators develop rules to control contagion.

By J. Michael Luttig and David B. Rivkin, Jr.

20 May 2020 in the Wall Street Journal

As Congress considers another Covid-19 rescue bill, the usual partisan divide has opened over limiting pandemic-related tort liabilities. Republicans and business owners argue that litigation will hamstring recovery. Trial lawyers, unions and Democrats counter that liability limits would encourage businesses to endanger employees and consumers. The Senate Republican leadership proposes immunity for all businesses that comply with public-health guidelines except in cases of “gross negligence” and willful misconduct.

Republicans’ approach is appealing in theory, but in practice it can’t be implemented without detailed regulatory standards—which in the case of Covid-19 won’t be written for some time. Rather than permanently change liability standards based on incomplete information about the virus, it would be wiser to enact an immediate but temporary immunity. That would permit the economy to begin reopening while allowing time for federal regulators to promulgate standards on which long-term immunity could be conditioned.

The existing tort liability system, which rests mostly on state statutory and common law, has few virtues and many flaws. It is inefficient and often arbitrarily imposes liability. Tort litigation, unlike regulatory standards and enforcement, is largely unconstrained by due process and other constitutional limits. The results can be crippling for small businesses, which can’t afford protracted litigation, and even large companies have to settle meritless or frivolous lawsuits. The system is driven by jackpot-justice incentives.

This system is particularly ill-equipped for dealing with Covid-19, which affects the whole economy. Yet hundreds of lawsuits are already pending against universities, processing plants, manufacturing, mass-transportation companies and other businesses. Plaintiff lawyers are petitioning legislatures to rewrite or courts to reinterpret insurance policies, which specifically exclude pandemic-related liabilities, in an effort to obtain large recoveries. While such efforts are constitutionally suspect, these lawsuits won’t die easily.

The notion that businesses will act recklessly if Congress affords liability relief ignores the good-faith compliance culture of American enterprises and the regulatory environment in which they operate. Businesses have strong incentives against even negligent behavior, which would cause bad publicity and customer distrust. We’ve seen many announcements in recent weeks about what businesses are doing to keep customers and employees safe. Bad actors can and will be held to account by states and municipalities using police and regulatory powers to fine, close or even prosecute those that operate dangerously. An elaborate system of federal and state workmen’s compensation provides additional protection.

Tort law is primarily a state matter, but it’s well-established that Congress can intervene via its power to regulate interstate commerce. Federal law has provided tort liability protections to firearms makers and for nuclear power. Congress also enacted laws to limit liabilities arising out of Y2K—like Covid-19, a specific event that was thought to have potentially calamitous economic consequences.

The Supreme Court has sustained congressional authority to sweep aside state policies, statutes and procedures that impair interstate commerce, beginning with Gibbons v. Ogden (1824), which affirmed federal pre-eminence in regulating interstate navigation. In New York v. Beretta (2008), which upheld the limitations on liability for firearms makers, the Second U.S. Circuit Court of Appeals held that Congress’s authority includes the power to ban state tort lawsuits that “are a direct threat” to specific industries.

While there are legitimate doubts—which we share—that the Commerce Clause’s original meaning encompasses intrastate economic activities, the high court has embraced this view since 1942, when it held in Wickard v. Filburn that the federal government could ban growing wheat for personal consumption because it impaired a wheat-production scheme created by federal statute. The justices also asserted in Gonzales v. Raich (2005) that the Commerce Clause allows Congress to regulate intrastate activities that “substantially affect interstate commerce.” Those precedents are enough to allow Congress to protect businesses with local footprints, such as beauty salons or restaurants, that buy products or supplies in interstate commerce.

Senate Republicans should also propose to make protection against tort liability a precondition for states and localities to receive nearly $1 trillion in the new Covid-19 rescue bill. In National Federation of Independent Business v. Sebelius (2012), the ObamaCare case, the Supreme Court limited Congress’s ability to coerce states into adopting new policies by threatening to withdraw money for existing programs. Since this money is new, that won’t pose an obstacle. Using its spending and Commerce Clause powers, Congress can promulgate a variety of regulatory schemes that would replace current federal and state statutory and common-law liabilities for Covid-19 and that would survive litigation challenges.

Making liability protection work will require regulation to evolve along with scientific understanding of Covid-19. Current federal, state and local guidelines, including those published by the Centers for Disease Control and Prevention, are informed exclusively by medical considerations and do not reflect traditional regulatory criteria such as cost and feasibility of implementation, and are too ambiguous and inconclusive to be a proper basis for imposing or limiting Covid-19-related liabilities. New, industry-specific guidelines will have to be developed by agencies such as the Occupational Safety and Health Administration.

OSHA and other federal agencies have the expertise to evaluate scientific, practical and cost-effective standards governing operations of a wide range of businesses. What they need is new statutory authority to issue safe-harbor guidelines for businesses that pre-empt tort liability under state law. Companies and trade associations would work with OSHA and propose industry- or business-specific guidelines to the agency, such as for meat packing plants or package sorting facilities. OSHA would promptly review each proposal, make necessary modifications, and then issue it as an immediately effective regulation with the legal force to override lawsuit liability. Businesses that comply with these regulations can rest assured that they’ve met their legal obligations.

Such considered Covid-19 liability reform—temporary immunity while businesses reopen, followed by promulgation of comprehensive federal regulatory guidelines—would be constitutional and consistent with federalist values. It would protect public health while enabling a prompt and full economic recovery.

Mr. Luttig is a former general counsel of the Boeing Co. He served as a judge on the Fourth U.S. Circuit Court of Appeals, 1991-2006. Mr. Rivkin practices appellate and constitutional law in Washington. He served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush.

Source: https://www.wsj.com/articles/lawsuits-neednt-block-recovery-11589993211