We’re All Human

In early April of this year, a class action complaint captioned Richard Cole v United Health Insurance Company was filed in the United States District Court for the Southern District of Florida. The complaint alleges that:

Instead of acting solely in the interests of the participants and beneficiaries of its health insurance plans, upon information and belief, UHC denied coverage for [Proton Beam Radiation Therapy (“PBRT”)] to treat prostate cancer because, on average, PBRT is significantly more expensive than traditional Intensity Modulated Radiotherapy (“IMRT”) or other treatments.

The case was assigned to Judge Robert N. Scola, Jr. Earlier this week, Judge Scola recused himself. The substance of the recusal order should be read in full:

In early 2017, the Court was diagnosed with prostate cancer. In
determining the best course of treatment, the Court consulted with top medical experts throughout the country. All the experts opined that if I opted for radiation treatment, proton radiation was by far the wiser course of action. Although the Court opted for surgery, rather than radiation, those opinions still resonant.

Further, a very close friend of the Court was diagnosed with cancer in 2015. He opted to have proton radiation treatment at M.D. Anderson in Houston. His health care provider, United Healthcare, refused to pay for the treatment. Fortunately, he had the resources to pay $150,000 for the treatment and only upon threat of litigation did United Healthcare agree to reimburse him.

It is undisputed among legitimate medical experts that proton radiation therapy is not experimental and causes much less collateral damage than traditional radiation. To deny a patient this treatment, if it is available, is immoral and barbaric.

The Court’s opinions in this matter prevent it from deciding this case fairly and impartially.

What’s Wrong With Stephen Moore?

If asked the question posed above, I could cite the thirteen reasons listed by the 794 economists who oppose Moore’s appointment to the Fed. These include the fact that:

[Moore’s] statements reveal a deep ignorance of economics and an inability to listen to credible experts. He repeats fake and misleading economic statistics, and pushes fallacies about the VAT and trade competitiveness.

Or, I could point out that Moore is nothing more than a Trump sycophant.

But oh, there’s so much more. Like:

Is it possible that Trump could attempt to appoint anyone to the Fed who is less qualified? Oh, wait.

Kansas Abortion Ruling

In Hodes & Nauser, MDs, P.A. v. Schmidt, the Kansas Supreme Court sustained a temporary injunction against the enforcement of a bill that:

[P]rohibits physicians from performing a specific abortion method referred to in medical terms as Dilation and Evacuation (D & E) except when “necessary to preserve the life of the pregnant woman” or to prevent a “substantial and irreversible physical impairment of a major bodily function of the pregnant woman.”

The Court noted that 95% of second-trimester abortions in the United States are performed using the D & E procedure.

What is most significant about the ruling is (i) that it relies on the authority of the state constitution, thus cannot be reviewed by the U.S. Supreme Court and (ii) it rests on Section 1 of the Kansas Constitution Bill of Rights. That Section provides that:

All men are possessed of equal and inalienable natural rights, among which are life, liberty, and the pursuit of happiness.

The Court held that this provision is not merely an “idealized aspiration,” but sets forth “substantive rights [that] include a woman’s right to make decisions about her body, including the decision whether to continue her

Those who bang on the issue of “original intent” should be comfortable with the ruling since it carefully examines the historical and philosophical foundation of Section 1, citing, inter alia, John Locke, Sir William Blackstone, Sir Edward Coke, Edmund Burke, James Kent, Louis Brandeis, Dr. James Mohr, author of “The Origins and Evolution of National Policy, 1800-1900 (1978),” and Edward Mansfield.

Note: The citation to Mansfield is used more to refute Mansfield than to celebrate him.

[T]he husband’s control over the person of his wife is so complete that he may claim her society altogether; that he may reclaim her if she goes away or is detained by others; that he may use gentle constraint upon her liberty to prevent her going away, or to prevent improper conduct; that he may maintain suits for injuries to her person; that he may defend her with force; that she cannot sue alone; and that she cannot execute a deed or valid conveyance, without the concurrence of her husband. In most respects she loses the power of personal independence, and altogether that of separate action in legal matters.

Mansfield, The Legal Rights, Liabilities and Duties of Women 272-73.

Quite apart from the strategic/tactical advance in the battle over a woman’s right to choose, the opinion offers a good theoretical framework for addressing the issues.

Michigan Gerrymandering Case

A three-judge panel of the United States District Court for the Eastern District of Michigan (opinion per Clay, J.) has handed down an opinion wherein it:

[J]oins the growing chorus of federal courts that have, in recent years, held that partisan gerrymandering is unconstitutional. We find that the [Michigan Redistricting Plan] violates Plaintiffs’ First and Fourteenth Amendment rights because it deliberately dilutes the power of their votes by placing them in districts that were intentionally drawn to ensure a particular partisan outcome in each district.

This opinion may be revised or even overturned once the Supreme Court rules on two “partisan gerrymandering” cases presently before it.

New Immigration Policy Guidance

Here’s the new policy guidance from U.S. Citizenship and Immigration Services. It provides that:

[The] violation of federal controlled substance law, including for marijuana, established by a conviction or admission, is generally a bar to establishing [Good Moral Character] for naturalization even where the conduct would not be a violation of state law[; and]

An applicant who is involved in certain marijuana related activities may lack [Good Moral Character] if found to have violated federal law, even if such activity is not unlawful under applicable state or foreign laws.

In other words, if immigrants work in businesses that are legal under state law they will nonetheless be viewed as lacking Good Moral Character under Federal immigration law.

The Search for the Trump Tax Returns

Rep. Richard E. Neal, Chairman of the House Ways and Means Committee, has issued a formal request to IRS Commissioner Charles P. Rettig to furnish tax information pertaining to President Trump. The initial request was made on April 3.

In his April 13 letter, Neal outlines at length that the provisions of the operative statute, 26 U.S.C. § 6103(f), are “unambiguous and raise[] no complicated legal issues that warrant supervision or review by the Department of the Treasury . . . or the Department of Justice.” Further, he points out that:

It is not the proper function of the IRS, Treasury, or Justice to question or second guess the motivations of the Committee or its reasonable determinations regarding its need for the requested tax returns and return information. Indeed, the Supreme Court has consistently noted that the motivations underlying Congressional action are not to be second guessed, even by the courts. Eastland v. U.S. Servicemen’s Fund, 421 U.S. 491, 509 (1975) (“The wisdom of congressional approach or methodology is not open to judicial veto.”); Watkins, 354 U.S. at 200 (“But a solution to our problem is not to be found in testing the motives of committee members for this purpose. Such is not our function.”); Barenblatt v. United States, 360 U.S. 109, 132 (1959) (“So long as Congress acts in pursuance of its constitutional power, the Judiciary lacks authority to intervene on the basis of the motives which spurred the exercise of that power.”).

Neal could have gone further. In his law review article at 26 Tax Lawyer 103 (2015), Preventing Congressional Violations of Taxpayer Privacy, Professor George K. Yin stated that:

[An] important factor influencing Congress in 1924 was a Senate investigation of the Bureau of Internal Revenue (BIR) (predecessor to the modern day Service). The onset of that investigation earlier in 1924 had been stymied by the inability of the investigating committee to examine tax returns. In addition, the Senate had approved the investigation in part because of a bitter, public feud between Treasury Secretary Mellon and Senator Couzens (R-MI) in which the former was perceived by some in Congress—probably mistakenly—to have unlawfully publicized the latter’s tax returns[.]

* * * * *

Providing Congress with direct access to the information would potentially be a way to even the score between the two branches.

Yin reports that there was a significant dispute over the question of whether the return information obtained by Congress could be publicly disclosed. That dispute continued over the years, resulting in changes to §6103(f) in 1976. He concludes that:

Congress’s failure [in 1976] to require the tax committees to sit in closed executive session when submitting information to the House and Senate should, therefore, be viewed as a conscious decision to preserve an essential outlet for public disclosures. Importantly, however, there is no evidence indicating any intention to broaden the discretion of the committees beyond that provided them in 1924. As previously described, Congress expected the tax committees to protect the confidentiality of the information and to make public disclosures only for a legitimate committee purpose.

Like, oh I don’t know, impeachment perhaps.

Posted by Stuart Levine.

The Gold of Pot at the End of the Rainbow

I thought that my experience with budding cannabis entrepreneurs (Bad pun. I am thoroughly ashamed of myself.) might be of some interest.

For many years, there was an upscale Kosher catering hall in Baltimore named “Blue Crest North.” The building is at the end of the block where I live. After the original owners sold the facility, including both the real estate and the catering business, it began a long decline. The new owners, in an attempt to keep the ship afloat, rented the hall out as a venue for seminars given either by a multi-level marketing organization or some sort of “invest in real estate with no money down” scheme. While walking my dogs, I would pass the building. I saw the incoming attendees to these seminars–earnest, honest, but clearly clinging to the lower edge of middle-classdom. They would walk in with seminar material and clipboards in hand, certain to take copious notes. Somehow, I knew that their efforts would come to naught.

Now, a couple of months ago I was invited by some subgroup of the University of Maryland to give a presentation at a two-day seminar on starting and operating a cannabis business. My topic was, of course, the tax aspects of selling cannabis. I previously mentioned the seminar here with a link to my speaker’s outline. In the presentation, I particularly focused on 26 U.S.C. 280E. That Code section provides as follows:

No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.

I made it clear that, in my opinion, Section 280E makes it virtually impossible to derive a significant profit operating a cannabis business. (I note that a colleague of mine claims to have clients who are making serious money in the business. I have my doubts. I think that any current profitability is due to the novelty of legal cannabis. For the reasons suggested by Mark’s analysis here, I think that any profitability is a short-term phenomenom.)

In any event, when I got to the venue I discovered that even though there was a UofMD sponsorship, the primary sponsor was a group that apparently puts on these seminars on a for-profit basis and then collects additional fees acting as a consultant to cannabis entrepreneurs. I looked at the audience. The attendees were the same people that I used to see walking into seminars given at the Blue Crest.

At the end of my presentation, one very unhappy attendee asked: “Are you saying that we cannot make money in the cannabis business?”

Well, yes.

From Time to Time

The U.S.D.C. for Alaska (per Gleason, J.) has overturned Trump’s executive order that attempted to reverse actions taken by President Obama. The Court framed the issue as follows:

This case concerns Section 12(a) of the [Outer Continental Shelf Lands Act], which provides as follows: “The President of the United States may, from time to time, withdraw from disposition any of the unleased lands of the outer Continental Shelf.” In 2015 and 2016, President Obama issued three memoranda and one executive order withdrawing certain areas of the Outer Continental Shelf from leasing. On April 28, 2017, President Trump issued Executive Order 13795, which purported to revoke the 2015 and 2016 withdrawals.

Slip op. at 3-4, emphasis added.

So, for at least some period, oil and gas exploration in these environmentally sensitive areas have been blocked.