The Constitution Will Survive Covid-19

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

War-room podcast, October 2020

“If Democrats win, if they take the White House and the Senate, they abolish the filibuster by a simple majority, and they extend the Supreme Court to any size they want. It is completely Constitutional. It is not unlawful. But it will be a horrible result for everybody. Court packing would dramatize and enshrine in all its ugliness for everybody the Democrats’ view of the Supreme Court, which is essentially a legislature whose job is to ensure policy outcomes… I have no doubt that if they were to win, they would do that.”

What Kind of Judge Is Amy Coney Barrett?

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

Sept. 26, 2020, in the Wall Street Journal

It speaks volumes that the early opponents of Judge Amy Coney Barrett’s confirmation have almost nothing to say about the work that has defined her career. Her scholarly and judicial writings place her at the center of the mainstream consensus on the judge’s role as an arbiter, not a lawmaker, who abides by the duty to enforce the law as written.

“A faithful judge resists the temptation to conflate the meaning of the Constitution with the judge’s own political preference,” she wrote in a 2017 article, shortly before she took the bench. That requires “fidelity to the original public meaning, which serves as a constraint upon judicial decisionmaking.” Judging also requires humility, to guard against “the feeling of infallibility” that often tempts judges to stray from the law. After all, “courts are not always heroes and legislatures are not always villains. They are both capable of doing good, and they are both capable of doing harm.” Ultimately, “the measure of a court is its fair-minded application of the rule of law.”

Her opinions for the Seventh U.S. Circuit Court of Appeals show skilled legal craftsmanship and sensitivity for the people whose rights are at stake. Among her most influential decisions is Doe v. Purdue University(2019), on the rights of college students accused of sexual assault. The case involved a male student who was suspended from school and expelled from ROTC based on his girlfriend’s accusation that he had groped her while she slept. He disputed the charge, but the university refused to disclose the evidence against him, to consider exculpatory evidence, and to interview witnesses—even the accuser, whose account it deemed more “credible” than his. All this was “fundamentally unfair,” Judge Barrett concluded, falling “short of what even a high school must provide to a student facing a days-long suspension.”

The male student alleges that the university “tilted the process against men accused of sexual assault” to comply with since-rescinded U.S. Education Department guidance, and thereby discriminated against him on the basis of sex in violation of Title IX. Judge Barrett’s decision, joined by two other female judges, allows that claim to go foward.

What’s notable about the opinion is Judge Barrett’s skill in working through the complexities of the parties’ arguments—which involved disputes over technical legal matters such as standing and remedies, among many others—without losing sight of the bigger picture. Her decision was not an unalloyed win for the male student, who lost on his claim for money damages. But the persuasive force of its reasoning made it an instant landmark in the wave of litigation sparked by the 2011 Education Department guidance. More than half the courts of appeals and dozens of district-court cases have already cited it.

Judge Barrett brought the same analytical acumen to bear in Kanter v. Barr (2019). Her dissenting opinion is an originalist tour de force on the Second Amendment’s application to “felon dispossession” laws, which restrict gun ownership by convicted criminals. The majority held that the government may categorically strip even nonviolent felons of Second Amendment rights. Judge Barrett took a narrower view based on the amendment’s text and history.

Surveying laws and practice around the time of the amendment’s framing in the late 18th century, she found support only for keeping weapons from those deemed dangerous and likely to misuse them. That category, she concluded, is “simultaneously broader and narrower than ‘felons’—it includes dangerous people who have not been convicted of felonies but not felons lacking indicia of dangerousness”—like the plaintiff, who had been convicted of mail fraud, or hypothetical felons convicted for “selling pigs without a license in Massachusetts” or “redeeming large quantities of out-of-state bottle deposits in Michigan.”

In U.S. v. Watson (2018), a Fourth Amendment case, the court considered whether police had reasonable suspicion to block a parked car based on an anonymous report that “boys” were “playing with guns” nearby. Judge Barrett, writing for a unanimous panel, concluded they didn’t. Because Indiana law permits carrying a firearm in public without a license, that tip didn’t create a reasonable suspicion of a crime, even if it might have been prudent for police to visit the scene and speak with those involved voluntarily. Judge Barrett rejected out of hand the government’s argument that a more forceful response could be justified based on the locale: “People who live in rough neighborhoods may want and, in many situations, may carry guns for protection. They should not be subject to more intrusive police practices than are those from wealthy neighborhoods.”

Judge Barrett has also been sensitive to the needs of law enforcement. In Sanzone v. Gray (2018), she joined two other judges in an unsigned opinion holding that officers were entitled to qualified immunity from money damages when a suspect pointed a gun at officers immediately before he was shot. But she has also denied immunity in a series of cases in which officers allegedly lied or fabricated evidence in warrant affidavits. Her decisions hew close to the facts and the law, neither deferring to law enforcement nor accepting unfounded claims of abuse.

Judge Barrett has been especially attuned to overreaching by administrative agencies. She joined several opinions declining to defer to government agencies’ interpretations of their own regulations—a controversial doctrine known as Auer deference, which four Supreme Court justices said last year they were prepared to overturn.

She has also been aggressive in scrutinizing agencies’ factual determinations, particularly in Social Security cases. If C.S. Lewis was right that “integrity is doing the right thing even when no one is watching,” then these decisions deserve special appreciation, because they hold the government to its burden when the outcome matters to no one but the litigants.

A final illustration of Judge Barrett’s temperament and discernment can be found in two decisions on immigration law. In Cook County v. Wolf (2020), she dissented from a panel opinion blocking the Trump administration’s “public charge” rule, which restricts admission of aliens likely to depend on public benefits. Her dissent was vindicated when the Supreme Court stayed the injunction. In Morales v. Barr (2020), however, she wrote a ruling against an administration policy preventing immigration judges from “administratively closing,” and thereby delaying, deportation cases. While the two opinions differ in their bottom-line results, what they share in common is diligent and faithful statutory analysis following the example of Justice Antonin Scalia, for whom Judge Barrett clerked.

Judge Barrett’s body of work shows her to be independent, discerning, diligent and fair. That’s why her opponents are likely to resort to personal attacks.

Messrs. Rivkin and Grossman practice appellate and constitutional law in Washington. Mr. Rivkin served at the Justice Department and the White House Counsel’s Office.

Source: https://www.wsj.com/articles/what-kind-of-judge-is-amy-coney-barrett-11601154273

Why the ‘Biden Rule’ Doesn’t Apply in 2020

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

19 September 2020 in the Wall Street Journal

The week after President Jimmy Carter lost his 1980 re-election bid, he announced the judicial nomination of a close ally of Senate Judiciary Committee Chairman Ted Kennedy. The nomination sailed through the Senate, which confirmed the First U.S. Circuit Court of Appeals judge 80-10 less than a month later, six weeks before Inauguration Day. That nominee, Stephen Breyer, now sits on the Supreme Court.

Justice Breyer’s second nomination, in 1994, got more attention, but his first in 1980 neatly illustrates a constitutional principle: The president’s authority to make judicial nominations, and the Senate’s power to weigh them, is unaffected by the electoral calendar.

Minutes after the news broke Friday that Justice Ruth Bader Ginsburg had died, Senate Minority Leader Chuck Schumer declared his opposition to considering any nominee “until we have a new president.” The argument is an appeal to precedent; Mr. Schumer’s tweet was lifted from a statement by Majority Leader Mitch McConnell after Justice Antonin Scalia’s death in February 2016.

Then, the Senate withheld its consent from President Obama’s nominee, Judge Merrick Garland. Mr. McConnell’s rationale was that the voters should have a say in selecting the next justice. Put aside that Mr. Schumer and his caucus were on the other side of the issue four years ago. The important question is: What’s the right precedent?

It isn’t 2016. In the realm of Supreme Court nominations, practice has long followed principle. Twenty-five times presidents have made nominations to fill Supreme Court vacancies that arose in presidential election years, and 21 times the Senate confirmed the nominee. The general rule is that when there is a vacancy on the nation’s highest court, the political branches will fill it.

At the same time, the Senate has long observed a narrow exception to that rule—one also guided by constitutional concern—and that’s what was in play in 2016. When the nation chooses a president and a Senate, it makes its choice about who wields the power and bears the responsibility to pick and confirm judges. But when the president and Senate have divergent views on judges and judicial philosophy, there’s no clear mandate on what kinds of judges ought to be confirmed. For well over a century—the last exception was Chief Justice Melville Fuller in 1888, during President Cleveland’s first term—the Senate hasn’t confirmed a Supreme Court nominee chosen in an election year by a president of the opposite party. That’s why, in 2016, Mr. McConnell let voters break the stalemate.

This exception was popularized in 1992 by Sen. Joe Biden, then chairman of the Judiciary Committee. He urged President George H.W. Bush to refrain from making any Supreme Court nominations in that election year. What made 1992 different from other election years, Mr. Biden explained, was that “divided Government” reflected an absence of a “nationwide consensus” on constitutional philosophy. “Action on a Supreme Court nomination must be put off until after the election campaign is over,” the future vice president insisted. No vacancy arose until 1993, when Bill Clinton was in the White House and Ginsburg’s nomination easily passed a Democratic Senate. But the Biden rule fit 2016 to a tee.

It’s especially ill-suited to 2020. Not only does the same party control the White House and the Senate, but the 2016 and 2018 elections were both unusually focused on the issues of constitutional philosophy and judicial selection, owing to the Scalia vacancy and the Democrats’ smear campaign against Brett Kavanaugh. The voters made their choice, sending Donald Trump to the White House with his list of prospective nominees and a Republican majority to the Senate. There’s no stalemate for the voters to break this time around.

There’s not even a serious debate over judicial philosophy. Mr. Trump has maintained and expanded his list of prospective nominees, but Mr. Biden refuses to release one. That reflects the reality that, while Democrats bemoan the originalist bent of Mr. Trump’s picks, they embrace no competing doctrine, only the insistence that judicial power be wielded to achieve their political ends. Their instant opposition to any Trump nominee is of a piece: the exercise of power divorced from principle.

Another bit of history: In 1980, Mr. Biden voted to confirm Judge Breyer.

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

Source: https://www.wsj.com/articles/why-the-biden-rule-doesnt-apply-in-2020-11600545795

Mail-In Voting Could Deliver Chaos

By David B. Rivking, Jr., and Lee A. Casey

25 August 2020 in the Wall Street Journal

If the 2000 election provoked a constitutional crisis, the 2020 one is flirting with disaster. Debate over voting by mail has focused mostly on the potential for fraud and logistical difficulties. But there are also legal problems with it, which carry the seeds of chaos before Inauguration Day and continuing instability after.

Under federal law, the presidential election must take place on Nov. 3, and the electors chosen on that day must vote on Dec. 14 to select the new president and vice president. These dates can’t be changed without an act of Congress, and the 20th Amendment sets Inauguration Day on Jan. 20.

Article II of the Constitution gives Congress the power to “determine the time of choosing the electors, and the day on which they shall give their votes; which day shall be the same throughout the United States.” Congress has done so by enacting laws mandating that “the electors of President and Vice President shall be appointed, in each State, on the Tuesday next after the first Monday in November,” and that the Electoral College must meet and vote on “the first Monday after the second Wednesday in December.” As the Supreme Court held in Foster v. Love (1997), taken together the relevant constitutional and statutory provisions mandate “holding all elections for Congress and the Presidency on a single day throughout the Union.”

It follows that although state statutes permit the use of certain mail-in ballots sent on or before Election Day, no ballot cast after Nov. 3 is constitutionally valid. That implies that counting unpostmarked mailed ballots that arrive after Election Day would be unconstitutional, as there would be no way to tell if they were cast in time. In addition, the winner of each state’s electoral votes must be determined by Dec. 14, or those votes cannot be cast.

These requirements create a six-week window during which the electors must be chosen and certified, leaving little time for errors or challenges to the results. The delays inevitable in widespread voting by mail would make it difficult or impossible for some states to meet the Dec. 14 deadline, even without challenges to the results—which are certain this year if the election is close.

The deadline is even tighter thanks to another federal statute, which requires that any controversy over the electors a state has appointed must be resolved, under pre-existing state law, at least six days before the Electoral College meets. If a dispute isn’t resolved by the Dec. 8 “safe harbor,” the state legislature has until Dec. 14 to determine how the electors are to be selected or forfeit its electoral votes. If a state meets the Dec. 8 deadline, the result is conclusive and Congress must accept it.

The U.S. Supreme Court stopped the biased Florida recount on Dec. 12, 2000—that year’s safe-harbor deadline. Time had run out to remedy the equal-protection and due-process violations in the recounts that the Florida Supreme Court had ordered. The state court had earlier concluded that the Florida Legislature intended its electors to “participate[e] fully in the federal electoral process.” Thus, the high court concluded, the safe harbor had to be met.

We can assume no state would want its electoral votes to go uncast. As a result, there is only a very short window for mail-in-ballots to be received and counted. State actions and litigation—which are already being pursued with gusto—establishing an overlong period for counting such ballots will endanger a state’s electoral votes, impeding the Constitution and federal election statutes. And, as the Supreme Court said in Ex parte Siebold (1880), Congress’s election regulations “are paramount to those made by the State legislature; and if they conflict therewith, the latter, so far as the conflict extends, ceases to be operative.”

Proponents of universal mail-in-voting argue that reliance on traditional in-person voting will disenfranchise many Americans because of the Covid-19 pandemic. Even if that’s true, the established constitutional and statutory requirements must be met. Drawing out the tabulation of large numbers of ballots received after Election Day would make this nearly impossible.

At best, the result would be electors chosen by state legislatures. At worst, states would be disfranchised in the Electoral College—or send rival slates of electors to vote on Dec. 14, leading to a bitter dispute in Congress over which votes to recognize. Any victor who emerged from such chaos would serve under a cloud of illegitimacy, promising four more years of political instability.

One of America’s greatest constitutional imperatives is the smooth and timely transition of power from one duly elected president to the next. That is now in doubt not because of the absurd notion that President Trump will refuse to leave office on Jan. 20 if the voters reject him on Nov. 3, but because the push for mail-in voting may overload the system, making an orderly election impossible.

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/mail-in-voting-could-deliver-chaos-11598376494

Coronavirus, Contracts and the Constitution

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