The Third Circuit and the “Session” of the 18th Century Vermont General Assembly

As mentioned in my prior post, in the course of analyzing the meaning of “recess” in the Recess Appointments Clause, the Third Circuit considered legislative practice at the time of the framing. In looking at the state legislatures prior to 1787, the court found what it viewed as conflicting evidence on whether recesses are limited to intersession breaks.

Some state constitutions, the court noted, clearly indicated that a “recess” and a “session” cannot occur conterminously, thus supporting the intersession recess theory. For example, the Massachusetts and New Hampshire constitutions contain provisions that “make sense only if the legislature is not in ‘session’ when it is ‘in recess.'” Opinion at 48. (This is a point I previously made with respect to the Massachusetts constitution).

On the other hand, the court pointed to instances where the executive branch of a state had (allegedly) interpreted the “recess” to include intra-session breaks. For example, the Vermont constitution granted the executive power to lay embargoes during “the recess of the legislature only.” The Vermont General Assembly, which was meeting in Windsor, adjourned on April 16, 1781, stating that it would next meet on the second Wednesday of June at Bennington. During this adjournment, in May 1781, the Governor of Vermont imposed an embargo.

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The Third Circuit’s Recess Appointments Decision

Another appellate court has weighed in on the legality of President Obama’s recess appointments to the National Labor Relations Board. In NLRB v. New Vista Nursing & Rehabilitation, the Third Circuit held that “the Recess” in the Recess Appointments Clause refers only to the period between Senate sessions. Because the NLRB appointments were made during so-called “intra-session recesses,” the court concluded that they were illegal.

Although the Third Circuit reached the same result as did the D.C. Circuit in Noel Canning, the two opinions differ in some important respects. For example, while the D.C. Circuit placed a good deal of emphasis on the RAC’s use of the word “the” (as in “the Recess”), the Third Circuit declined to do so, finding the use of that word to be “uninformative.” Opinion at 57. The Third Circuit also declined to reach the issue of whether a vacancy must occur during a recess to be filled under the RAC. Opinion at 101 n.34.

The Third Circuit begins its analysis by identifying three possible meanings of “the Recess of the Senate”; (1) intersession breaks; (2) intersession breaks plus those intra-session breaks that last a non-negligible period (which the executive branch has historically identified, based on the Daugherty opinion, as more than ten days); and (3) “any time in which the Senate is not open for business and is unavailable to provide its advice and consent.” Opinion at 38. The last definition is, according to the court, the definition proffered by the NLRB.

The opinion looks at dictionary definitions (specifically Johnson’s dictionary) and legislative practice at the time of the framing, historical practice of the President and Congress under the RAC and other considerations, such as the need to adopt a definition of “recess” that provides a bright-line test that the political branches can rely upon. It finds some of these inconclusive, but most of them tend to cut against the second and/or third options, leaving the first (intersession breaks) as the most plausible meaning of the the “recess.” As John Elwood observes at the Volokh Conspiracy, the court places particular emphasis on the fact that recess appointments expire at the end of the “next Session.” It reasons that this durational provision must have been designed to ensure that recess appointments remain as an “auxiliary” method of appointment so that recess appointees serve “for only the time needed for the president and the Senate to have the opportunity to undergo the normal process.” Opinion at 75. If recess appointments could be made during intra-session breaks, then the Senate’s reconvening to continue the same session would have no effect on the recess appointment, which would continue even though the Senate was available to confirm a permanent appointment.. Opinion at 78.

In a rather rambling dissent, Judge Greenaway concludes that the “recess” must include both intersession and intra-session breaks. Adopting a functional approach, he argues that the purpose of the RAC is to allow the President to fill positions when the Senate is unavailable to provide advice and consent. Because the Senate is equally unavailable to provide advice and consent whether it is on an intersession or intra-session break, Judge Greenaway finds that the RAC must apply to both. Dissent at 6.

Although there is much to be commended in the majority opinion, it rests on a misconception (or at least an unexamined assumption) regarding the nature of a “session.” To which I will turn in my next post.

Lois Lerner and Waiver of Fifth Amendment Privilege

Everybody is talking about whether Lois Lerner waived her Fifth Amendment privilege by making an exculpatory opening statement at yesterday’s hearing of the House Committee on Oversight and Government Reform (eg, these posts at Hot Air and the Volokh Conspiracy). As Juliet Eilperin notes, “[l]ike a lot of legal questions, it depends on whom you ask.”

It also depends on how you approach the question. Chairman Issa has indicated that he is consulting with counsel, and counsel (presumably the House Counsel’s office) will give him an answer based on reading the case law and advising on how the courts would likely react to the waiver issue if the committee and the House were to hold Lerner in contempt for refusing to answer questions. As I mentioned yesterday, this issue arose when I was at the House Counsel’s office in 2002 after Bernie Ebbers, the former CEO of WorldCom, made an exculpatory opening statement before taking the Fifth at a House hearing.

At the time, Ebbers’ lawyer (Reid Weingarten) argued that there was no waiver because Ebbers had made an exculpatory statement, but had not testified to any incriminating fact. He relied on cases where witnesses in judicial proceedings had been held not to waive the privilege when they answered questions but had not provided an incriminating response. There is, however, a strong argument that these cases are distinguishable because they involve witnesses who were compelled to answer questions and had no right to refuse to answer unless their responses would in fact incriminate them. They might apply to a congressional witness who answered preliminary questions before taking the Fifth, but they arguably do not apply to a congressional witness who voluntarily makes an opening statement. The latter situation (again, arguably) would be controlled by the principle that “a witness, in a single proceeding, may not testify voluntarily about a subject and then invoke the privilege against self-incrimination when questioned about the details.” Mitchell v. United States, 526 U.S. 314, 321 (1999).

For present purposes, let’s assume that the House Counsel advises Issa that it is likely (not certain) that the courts would hold that Lerner had waived her self-incrimination privilege under the facts presented. Let’s further assume that the law has not changed materially since 2002. Finally, let’s assume that there have been at least a few other congressional witnesses since then who have pulled similar stunts, but the House has not previously held any of them in contempt.

Under these circumstances, COGR could move forward with holding Lerner in contempt, but I would argue that it would be unwise to do so from the perspective of the House’s institutional interest. Instead, I would encourage the committee to declare prospectively that witnesses who make voluntary opening statements will be presumptively considered to have waived their privilege against self-incrimination with respect to questions within the subject matter of those statements (i.e., questions that would be within the scope of cross examination of an opening statement).

It is undoubtedly in the House’s institutional interest to discourage witnesses from making a self-serving opening statement and then refusing to answer a committee’s questions about it. On the other hand, it is also in the House’s institutional interest to turn square corners and maximize the chances that its legal position will be upheld in court. If COGR holds Lerner in contempt for the same conduct that Ebbers and other congressional witnesses have been allowed to get away with, its action will be tainted by the perception of unfairness and selective enforcement, and a court will be more likely to find that no waiver occurred. By contrast, if the committee puts witnesses clearly on notice that voluntary opening statements will be deemed to waive the privilege, any future enforcement action is far more likely to be successful.

Consistent with this position, Chairman Issa and Ranking Member Elijah Cummings could write to Lerner’s attorney and give him an opportunity to formally withdraw her opening statement. If he refuses to do so, it would be appropriate for the committee to move forward with contempt.

Taking the Fifth Before Congress

In a letter to the House Committee on Oversight and Government Reform yesterday, Lois Lerner’s attorney (veteran DC lawyer William Taylor) informed the committee of her intention to invoke her Fifth Amendment rights at today’s committee hearing. Taylor said that she should not be required to appear at the hearing because to do so would serve “no purpose other than to embarrass or burden her.” COGR required Lerner to appear, but dismissed her after she refused to answer questions, though not before she made an exculpatory  statement in which she denied any wrongdoing.

This raises a number of legal questions, which we will proceed to consider.

1. Why can a witness invoke the Fifth Amendment before Congress when the privilege against self-incrimination applies only to criminal cases? With surprisingly little controversy (but see here for an academic view to the contrary), it has long been accepted by Congress and the courts that a congressional witness may invoke the Fifth. The theory is that if a witness were forced to testify in a congressional hearing, that testimony could be used against her in a subsequent criminal case. Note that this theory only holds if in fact the testimony could be used in court.

2. When can the witness invoke the Fifth? The witness must have a reasonable belief that her testimony might be used against her in a criminal prosecution. This does not mean that the witness must believe that she has actually committed a crime or that her truthful testimony would lead to her conviction. It just means that there is some realistic possibility that the witness may be criminally prosecuted for a matter to which her testimony might be relevant. This is a fairly low bar.

3. Can government officials invoke the Fifth before Congress and keep their jobs? Although I personally find it difficult to understand how a government official (particularly a senior official like Lerner) can refuse to testify before Congress, which is constitutionally responsible for overseeing the activities of her agency, it is fairly clear that she cannot be fired for doing so. My view is that at the least the President should be able to fire cabinet officials and others who serve at his pleasure for invoking the Fifth, but even this view was controversial when the issue arose during my tenure on the Hill. In any event, Lerner is a career employee, and my understanding is that she cannot be subjected to adverse employment consequences (unlike a private employee) for invoking her self-incrimination privilege.

4. Does Lerner have a colorable basis for invoking the Fifth? Yes. As mentioned earlier, there is a fairly low bar. The Justice Department has commenced a criminal investigation of the matter, and Lerner has reason to believe that she could be the target of investigation and ultimately of prosecution. In particular, it is conceivable that she could be prosecuted for making false or misleading statements to Congress. For example, this letter that she received from Chairman Darrell Issa and Representative Jim Jordan on May 14, 2013 points to various discrepancies between the facts as Lerner knew them and various statements that she made to Congress.

5. Can Congress require a witness to appear at a public hearing to invoke her Fifth Amendment rights? The short answer to this is yes. However, as we have discussed before (see here and here), the D.C. Bar has opined that a committee staff lawyer may violate the legal ethics rules if he or she participates in calling a witness to appear at a public hearing when the witness has asserted an intent to invoke the Fifth. By claiming that there was no legitimate purpose in requiring his client to appear, Taylor probably intended to suggest that committee lawyers participating in the hearing could run afoul of this legal ethics opinion. Perhaps this is why the committee was willing to excuse Lerner so quickly.

6. Does a witness waive her Fifth Amendment privilege when she voluntarily makes an exculpatory statement at a congressional hearing? You would think so, and apparently Representative Trey Gowdy made just that argument after Lerner made her statement. Unfortunately, witnesses at congressional hearings have been getting away with this for years. For example, when Bernie Ebbers, prior to taking the Fifth at a July 8, 2002 hearing before the House Committee on Financial Services, made an opening statement in which he denied all wrongdoing, a number of members argued that this statement waived the self-incrimination privilege. His lawyer (Reid Weingarten), however, argued that a “brief, non-incriminatory statement” did not waive the privilege. This was (and, as far as I know, still is) a debatable position, but the House has not seen fit to challenge it up to this point.

7. Can Congress require Lerner to testify notwithstanding her invocation of privilege? Yes. Recall that the privilege only prevents testimony that can be used in a criminal trial. By statute (see 18 U.S.C. 6002, 6005), a congressional committee may grant a witness immunity so that her statements may not be used against her; once such immunity is granted, the witness can be compelled before the committee. Initiating the process requires a two-thirds vote of the committee. Although in theory the witness receives only “use immunity” (meaning that she can still be prosecuted so long as her compelled statements are not used), the case law (in the D.C. Circuit at least) makes prosecution nearly impossible.

8. Would Lerner be a good candidate for immunity? Maybe. In part that depends on how likely one thinks it is that she would be prosecuted if immunity is not granted. Based on what is known today, by far the most likely criminal charge against her would relate to misleading Congress. But it would be difficult to prosecute her unless one can point to an unambiguous false statement and prove that she knew it was false when she made it. Even if a case could theoretically be made, one has to consider how likely it would be that the Department of Justice would prosecute her for misleading Congress, particularly on a theory that could ensnare many other senior administration officials.

Why it Doesn’t Matter Whether Celia Roady is a “Lobbyist”

Celia Roady, the Morgan Lewis tax partner who posed the now-infamous planted question regarding IRS targeting of conservative groups at an ABA conference, “focuses her practice on tax and governance issues affecting tax-exempt organizations, including charities, foundations, colleges and universities, museums, and other nonprofit organizations,” according to the Morgan Lewis website.

Roady has also been described by news reports as a “lobbyist,” but that is not quite right. She was registered in 2005 and 2006 to lobby for two clients, the Schwab Fund for Charitable Giving and the Vanguard Charitable Endowment Program. In both cases the subject of the lobbying was “tax treatment of donor-advised funds of charitable organizations” and in both cases the lobbying registration was terminated on January 19, 2007. Thereafter Roady was not registered to lobby for any client, and thus no longer a “lobbyist.” Or at least a “registered lobbyist.”

Roady’s lobbying reports reflect contacts only with the Senate Finance Committee and Joint Committee on Taxation. One might therefore assume that she had no discussions with executive branch agencies regarding the subject of her lobbying effort. The Lobbying Disclosure Act requires a report of “the Houses of Congress and the Federal agencies contacted by lobbyists employed by the registrant on behalf of the client.” As pointed out by the ABA Lobbying Manual (4th ed.), at p. 136, this language might be read to require disclosure if conversations take place with any federal agency, but it has been interpreted by the Clerk of the House and Secretary of the Senate to apply only if there has been a “lobbying contact” with the agency. This means, for example, that Roady would only have to list the IRS if she had discussions with someone who qualified as a “covered executive branch official” and those discussions did not fall within one of 19 exceptions to covered communications.

Roady clearly has a close relationship with various people at the IRS, including Lois Lerner, the director of the IRS’s exempt organization division, who called Roady before the ABA conference to request that she ask a question regarding the Inspector General’s investigation of improper targeting of conservative organizations. One would expect that Roady has communicated frequently with Lerner and other IRS officials regarding matters of importance to her own clients so one might wonder why those conversations never triggered a disclosure obligation under the LDA. Certainly Lerner is senior enough to qualify as a “covered executive branch official.” [Ok, maybe not so certainly- see comment from Dave Mason below]

One way that Roady might have been able to avoid triggering a disclosure obligation would be to communicate in ways that fell within one of the exceptions to the Lobbying Disclosure Act. For example, with respect to her lobbying on “tax treatment of donor-advised funds of charitable organizations,” Roady would have had to disclose if she had had a conversation with Lerner (or another high-ranking IRS official) on behalf of one of her clients. But suppose Roady’s involvement in this issue was not limited to her advocacy on behalf of private clients? At around the same time of her lobbying effort, she served on a working group of the “Panel on the Nonprofit Sector,” a project of Independent Sector, which describes itself as the “leadership network for nonprofits, foundations, and corporate giving programs committed to advancing the common good in America and around the world.” This project resulted in a report which, among other things, made a series of recommendations regarding donor-advised funds (see p. 39). So if Roady discussed these issues with Lerner or others at the IRS, who is to say if she was doing so on behalf of her paying clients or Independent Sector?

Speaking of Independent Sector, another way that Roady might communicate with high-ranking IRS officials without engaging in “lobbying contacts” is to appear with them on panels or at professional conferences (like the ABA conference itself). As public events, these probably fall outside the definition of “lobbying contacts.” Roady (like many other Washington tax lawyers) frequently participates in such events. For example, if you had been at the Ritz Carlton on April 24, 2013, you could have attended a program jointly sponsored by Independent Sector and Georgetown Law School, and featuring tax and legal experts such as Roady and . . . wait for it . . . Lois Lerner.

(This event was titled, ironically, “Nonprofit Governance: Advancing Your Mission Through Lobbying.” You see, the tax law generally restricts nonprofits from engaging in lobbying, but it is a tad vague on what exactly constitutes lobbying or how much is allowed. This “leaves public charities in quandary- they are permitted to engage in some lobbying but too much may jeopardize their tax exemption, and there is no bright-line test for determining how much lobbying is too much.” If this problem sounds to you  a lot like the issue of how much political activity can be engaged in by tax exempt groups, we think alike.)

Even more ironically, Roady may have avoided “lobbying contacts” in part because of her appointment by the IRS to be a member of its Advisory Committee on Tax-Exempt and Government Entities. This appointment would not have been possible if Roady had still been a registered lobbyist because President Obama has barred lobbyists from serving on such committees. However, the LDA also exempts communications “made in the course of participation in an advisory committee” from the definition of “lobbying contacts.” Thus, having been appointed to the committee due to her cozy relationship with the IRS, Roady’s service on the committee provided her with a basis for communicating with senior IRS officials without triggering a registration obligation.

Of course, given the many vagaries of the LDA, someone who really does not want to register can often find a colorable basis for failing to do so. Lack of enforcement makes it unlikely that a non-registrant will even have to explain his or her failure to register. While these problems may militate in favor of tightening the requirements of the LDA, they also make it foolish and counterproductive to punish those who do register.

Thus, while the policy of banning lobbyists from serving on advisory committees may or may not prove to be unconstitutional (as currently being argued before the D.C. Circuit), the Roady case illustrates why it certainly will not fulfill Obama’s stated goal of changing the “culture of special interest access.” All it does is incentivize non-compliance with the LDA, and reward those who can find a way not to register.

Renzi trial (chock full of Speech or Debate goodness) begins

The corruption trial of former congressman Rick Renzi began this week in federal court in Arizona. A number of Speech or Debate issues can be expected to arise during the trial. The Bipartisan Legal Advisory Group (affectionately known as BLAG) has already filed this amicus brief addressing the question of whether Renzi would waive the Speech or Debate privilege by introducing in his defense evidence of certain legislative activities, such as the fact that a particular bill (referred to as the Resolution Copper Company bill) was introduced in the House and that another bill (referred to as the Preserve Petrified Forest Land Investors bill) was never introduced.

BLAG asserts (correctly, as far as I know) that no case has ever found a waiver of the Speech or Debate privilege. It contends that no such waiver can take place unless the privilege-holder (in this case Renzi) makes an “explicit and unequivocal renunciation,” as the Supreme Court put it in U.S v. Helstoski, 442 U.S. 477, 491 (1979). Renzi’s introduction of evidence regarding legislative activities (which would violate the privilege if introduced by the government) does not amount to such a renunciation, according to BLAG. Thus the government would not be entitled to introduce privileged evidence itself, even if directly responsive to the evidence introduced by Renzi.

Needless to say, the government will argue that this is a tad unfair, but BLAG maintains that the court can address this problem by exercising its discretion under Federal Rule of Evidence 403. It suggests that the court may choose to exclude the evidence offered by Renzi or condition its admission on Renzi’s waiver of Speech or Debate with regard to certain responsive evidence (for example, evidence that would be within the scope of cross-examination).

Another potential issue in the Renzi case relates to a subpoena for documents that was received by the House Intelligence Committee (I don’t know which side served it). According to a notice under House Rule VIII filed by the committee on March 12, 2013, the committee intends to move to quash the subpoena as contrary to the rights and privileges of the House. The docket sheet does not reflect such a motion, though, so I assume that the issue has either been resolved or put off until a future time.