Articles

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

A Colorado judge's threatened contempt sanctions against Fox News investigative reporter Jana Winter—who refuses to reveal a confidential news source—has refocused public attention on how journalists operate.

News must often be gathered from confidential sources, or not at all. Given how vital is the freedom of the press in a democracy, that confidentiality must be maintained. It is time that Congress recognize this and enact legislation that enables journalists to protect their confidential sources and newsgathering materials.

Ms. Winter covered the July 20, 2012 mass shooting that killed 12 people and injured 58 others in an Aurora, Colo., movie theater. Based on confidential law-enforcement sources, she reported that James E. Holmes, who is charged with the murders, had previously sent a notebook to his psychiatrist describing his intent to kill.

Now that Mr. Holmes is facing trial, his defense attorneys want to know the identities of Ms. Winter's sources to aid in their client's defense. The judge has yet to decide whether the notebook, which is potentially covered by a patient-psychiatrist privilege, is admissible. He has postponed until August a decision on whether he will force Ms. Winter to reveal her sources. But if he ultimately sides with the defendant, Ms. Winter will have to choose between violating her sources' trust and going to jail.

Such pressures on reporters are not uncommon, with prosecutors, defense counsel and judges demanding disclosure of their confidential sources and newsgathering materials. In 2005, for instance, New York Times reporter Judith Miller was jailed for refusing to reveal a confidential source, who leaked to her the identity of CIA employee Valerie Plame, to a grand jury.

Although most states provide some protection for journalists in the form of a reporter's "privilege," or "shield law," the extent of these provisions varies. Fewer than half of the states (including such key media markets as New York, California and Washington, D.C.) have a robust privilege that protects journalists' confidential sources, with a few narrow exceptions. Other states have recognized only a "qualified" privilege, where consideration is given to how difficult it might be to otherwise obtain the desired information.

David S. Tatel, a highly respected judge of the U.S. Court of Appeals for the D.C. Circuit, suggested in Ms. Miller's case—where contempt sanctions were upheld because of the gravity of the national security issues involved—that "reason and experience," as manifested by the laws in "forty-nine states and the District of Columbia," support "recognition of a privilege for reporters' confidential source." Unfortunately, today federal law recognizes only a modest reporter's privilege, grounded in the rules of evidence and applied by courts on a case-by-case basis, without detailed congressional guidance. Congress can and should do more, defining such a privilege by statute.

A national privilege should include a presumption that journalists may protect the confidentiality of their sources and that this privilege can be overridden only when there would otherwise be an imminent danger to public safety or national security (such as the actual threat of violence or attack). Confidentiality would not be overridden merely because it might jeopardize a prosecution or civil lawsuit.

A national law would not violate the Constitution's fundamental federalism principles. States are guaranteed wide latitude in addressing their own needs and concerns. But where a national market has developed—as is the case with news and newsgathering—a uniform federal approach to regulation is justifiable.

Federal pre-emption of state law in this area will be a step further than Congress has considered in the past, but Congress has wrestled with this problem before. A bill that would have applied to all federal proceedings, establishing a robust privilege subject to a few exceptions, came close to passage in 2009. It foundered because of the "WikiLeaks" controversy, where a trove of the most sensitive U.S. diplomatic and military documents was released en masse. The bill's defeat may well have been Julian Assange's ultimate revenge against the freedom of the press that he disingenuously claimed to venerate.

A reporter's privilege is not cost-free—sometimes it will impede the ability of the government and private plaintiffs to win in court. However, the cause of justice is not the only worthwhile goal in America's system of ordered liberty. Civil and criminal prosecutions are already hampered by a set of well-recognized privileges—accorded to psychiatrists, priests, lawyers and spouses—that reflect a societal recognition that they are worth the costs.

Similarly, prosecutors are often unable to introduce important evidence if it was improperly obtained, reflecting the belief that inculcating proper behavior by law-enforcement personnel is worth the costs. A strong federal shield law for reporters would be consistent with how we balance the cause of justice and other key constitutional and societal values.

Given the growing importance of nontraditional media sources, the privilege should apply to professional reporters and citizen-bloggers. It should not, however, be extended to cases where the reporter himself is the target of a criminal investigation unrelated to his receiving of confidential information, such as securities trading on inside information.

Enacting a robust federal shield law for reporters has obvious merits and no partisan impediments. It is thus necessary and doable.

Messrs. Rivkin and Casey served in the U.S. Justice Department during the Reagan and George H.W. Bush administrations. They are partners practicing in the Washington, D.C., office of Baker & Hostetler LLP.

Source: http://online.wsj.com/article/SB10001424127887324030704578424930938783180.html

Those who support stricter gun control fear that the passage of time since the Dec. 14 shootings at Sandy Hook Elementary School will result in further watering-down of measures. They should not, however, discount the risk that attempts to shave a few weeks or months off the usual legislative process will result in bad laws, with unintended and lasting consequences.

While pro-gun forces may overstate the case against expanded background checks — they are not, for example, a prelude to disarming the citizenry — President Obama and his allies have understated the difficult legal questions posed by extending the background-check system to cover more sales and transfers.

Under current law, gun dealers hold a Federal Firearms License (FFL) and are required to conduct instant background checks before handing a firearm to a buyer. But transfers between people who are not regularly engaged in the business of dealing firearms fall outside this requirement. This includes most transfers among family members and friends as well as some sales at gun shows — the “gun show loophole.” (Whether or not a background check has been conducted, it is illegal to transfer a firearm to a person known to be ineligible or likely to use it in a crime.)

The bill by Senate Majority Leader Harry Reid (D) — which is still the baseline proposal in the Senate — would close the “loophole” by channeling nearly all transfers through an FFL holder. At the heart of the bill is a 1½-page-long definition of “transfer,” meant to exclude from coverage such exchanges as a parent giving a gun to a son or daughter or lending a rifle for a hunting trip. But the dense language creates a trap for the unwary, who could face substantial criminal penalties for mistakes such as shooting a deer one day out of season or going one over a hunting limit — either of which would transform a lawful transfer into an illegal one.

The Reid bill would give the attorney general the power to set the price that FFL holders would charge to oversee private transfers. Opponents rightly noted that nothing would stop the attorney general from ratcheting up the fee to discourage or even halt transfers. After all, being a political appointee, the attorney general could take the heat and simply opt to set a new baseline status quo for gun rights, without further involvement by Congress.

Rather than attempt to work out such issues through hearings and mark-ups, the idea of universal background checks was ditched in the “compromise” proposal by Sens. Pat Toomey (R-Pa.) and Joe Manchin (D-W.Va.), who more modestly extend background checks to reach gun-show sales and advertised private sales.

But here, too, the devil is in the details. Toomey-Manchin requires a background check for transfers “pursuant to an advertisement.” What does that mean? Would a listing on a church bulletin board or hunting club’s e-mail list qualify? Does it matter whether the buyer saw the advertisement? The answers to these questions matter because a mistake would render the transfer illegal and could lead to jail time.

Toomey-Manchin also tasks the attorney general with enacting regulations that define its specifics, which means potential sellers would probably consult the final legislation as well as the Code of Federal Regulations to steer clear of risks. At that point, of course, most people would do the transfer through a licensed dealer. The bill hints at this likely result by including a carve-out for transfers among certain family members — an exception that would be superfluous if the bill were expected to work as drafted.

Like the Reid bill, Toomey-Manchin imposes what amounts to a tax on many private transfers of firearms by requiring them to go through a dealer, who presumably would expect to be paid. It allows the market to set the price, but the rush to legislate has precluded attempts to evaluate this burden, whether it would vary by region or whether alternatives might prove less onerous.

There are also privacy concerns. Currently, background-check records must be destroyed within 24 hours, preventing that data from being used for other purposes. But the Reid bill and Toomey-Manchin make exceptions for private transfers, and the latter also eliminates standard privacy protections for mental-health records used in the background check system; the attorney general would be allowed to use them for any purpose.

Congress routinely includes sunset provisions when legislating in ways that may impact First Amendment or privacy rights, so lawmakers can recalibrate based on experience. Unfortunately, neither the Reid bill nor Toomey-Manchin include such provisions. So regulations that are too restrictive or ineffective will remain so — at least until there are 60 votes in the Senate and a president willing to reconsider.

Given the time and attention that they deserve, these issues could be addressed. But artificial deadlines and an undue sense of urgency guarantee worse results and continued mistrust on both sides of this debate.

David B. Rivkin Jr. and Andrew M. Grossman practice law in the Washington office of BakerHostetler. Rivkin served in the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations.

Source: http://www.washingtonpost.com/opinions/the-rush-to-a-bad-gun-control-law/2013/04/15/af89abb4-a5ff-11e2-a8e2-5b98cb59187f_story.html

Fines levied by the SEC against a corporation for long-ago wrongdoing do not protect current investors.

By DAVID B. RIVKIN JR.  And JOHN J. CARNEY

Two weeks ago, a unanimous Supreme Court rebuffed the Securities and Exchange Commission Gabelli v. SEC. The SEC maintained that its enforcement actions for fines under the Investment Advisers Act weren't subject to the five-year statute of limitations. This wasn't the first time the courts have pushed back a federal agency for overreaching. It won't be the last.

But the SEC's audacity prompts a broader policy question: What good is accomplished by imposing monetary penalties on corporations, as the agency attempted to do in Gabelli? The answer is that when such penalties are sought by the government, they probably do more harm than good.

Monetary damages, including penalties, that are awarded in private lawsuits are an attempt to compensate victims of corporate fraud and other unlawful behavior, usually shareholders or customers, making them as "whole" as the law can approximate. The SEC doesn't seek monetary fines in most cases—it has an array of other enforcement options including injunctive or remedial relief. When it does pursue a fine, however, the purpose is solely punitive.

In Gabelli, for example, the SEC brought two sets of claims against principals of an investment firm who countenanced a client's "market timing" scheme. The first claim sought disgorgement of profits to the government—a remedy that Gabelli didn't appeal. But the SEC also sought large monetary fines designed solely to punish the defendants and brand them as wrongdoers.

Who is the wrongdoer in such a situation? The company officials who made the bad decisions? The board of directors? The shareholders? Pinning a wrongdoer label on the corporation as a whole or fining a corporation in this way—years after any alleged wrongdoing—punishes current shareholders for conduct that benefited a largely different group of shareholders, if any benefit was conferred at all.

From a current shareholder's point of view, government-imposed corporate fines are virtually indistinguishable from a tax on investing, and are thus a disincentive for doing so.

Gabelli isn't the only case when the SEC sought penalties involving ancient conduct. In January 2006, McAfee, the software company, consented "without admitting or denying the [SEC's] allegations" to pay a civil penalty of $50 million for unlawful conduct alleged to have occurred between 1998 and 2000.

Similarly, in August 2003, UBS PaineWebber agreed to a $500,000 fine in connection with its unacknowledged failure to supervise a former registered representative who served jail time for defrauding certain clients. The conduct ended by March 1998, approximately five and a half years before the SEC instituted administrative proceedings.

More recently, the SEC fined Eli Lilly $29 million in December 2012 for alleged misconduct that purportedly began more than a decade ago.

The principal rationale for levying fines is to deter corporate wrongdoing. The mismatch between the shareholders that benefit from misconduct and those that are ultimately punished undermines this rationale.

Corporate fines are equally problematic when considered as punishment for a manager's bad conduct. Fine an individual for his conduct, and you are likely to deter him from doing it again. Fine a corporation, and the managers responsible for the misconduct have almost always left or been fired long beforehand. New managers are in place, and for them the tab is just a price of doing business.

Moreover, even the threat of government fines or penalties puts immediate, intense pressure on a corporation to settle, regardless of the merits. A protracted legal fight means a public-relations nightmare. It could also impinge on corporate earnings, the reputations of current executives, and relationships with regulators and other business concerns.

Whether the corporation is actually culpable of wrongdoing is a consideration, but it may not be a major one. That question can be beside the point of getting back to business and avoiding a prolonged battle with the SEC. In the large number of settlement scenarios where actual guilt isn't the most pressing or relevant consideration, the fines don't by definition deter any future misconduct.

In any event, when the government obtains fines from corporate wrongdoers, the monies rarely go to any ascertainable "victims"—they merely transfer funds from businesses to an already bloated public sector. With the aggregate penalties often running into the billions of dollars, the economic distortions involved are substantial.

Notwithstanding the Supreme Court's rap on the SEC's knuckles for its behavior in Gabelli, this agency and others, both federal and state, are increasingly aggressive in seeking fines. Last month the SEC's website touted the $1.53 billion in penalties that it has accrued from enforcement actions related to the 2008 financial crisis. The reported monetary relief to victims amounted to $1.15 billion. Stated another way, the government recovered 33% more for itself than for investors.

The SEC has the authority to return some of those fines it collected to injured investors, but the agency website is silent on that point. Bigger fines may demonstrate an agency's prowess or increase its bragging rights. But that has nothing to do with whether any given amount is appropriate or just punishment—or indeed, any punishment at all.

There is a better way, and it doesn't mean letting corporations off the hook for bad behavior. In addition to victims' private lawsuits that hold corporations accountable, government actions can pursue wrongdoers in a variety of ways, including: disgorgement of ill-gotten gains to victims, injunctions to curtail harmful conduct, and the imposition of examiners and monitors, all of which can adequately address and cure the underlying misconduct.

For any government agency—but in particular for the SEC, which supposedly seeks to protect investors—these types of equitable remedies, not punitive monetary fines, should be the remedies of first resort.

Messrs. Rivkin and Carney practice law at BakerHostetler. Mr. Rivkin served in the Justice Department and the White House Counsel's Office in the Reagan and George H.W. Bush administrations. Mr. Carney served in the SEC's Division of Enforcement and the Justice Department as a Securities Fraud Chief.

Source: http://online.wsj.com/article/SB10001424127887324128504578344502420815488.html?KEYWORDS=Rivkin

The courts would no more allow government to undermine the Second Amendment than the First.

By DAVID B. RIVKIN JR. And ANDREW M. GROSSMAN

Could there be a better illustration of the cultural divide over firearms than the White House photograph of our skeet-shooting president? Clay pigeons are launched into the air, but the president's smoking shotgun is level with the ground. This is not a man who is comfortable around guns. And that goes a long way toward explaining his gun-control agenda.

Lack of informed presidential leadership aside, there is a gulf between those Americans who view guns as invaluable tools for self-defense, both against private wrongdoers and a potentially tyrannical government, and those who regard that concept as hopelessly archaic and even subversive. For them, hunting is the only possible legitimate use of firearms, and gun ownership should be restricted to weapons suited to that purpose.

But while the level of the policy discourse leaves much to be desired, its constitutional dimensions are even more dimly recognized, much less seriously engaged. Yet the debate over guns, as is the case with many other contentious issues in American history, cannot be intelligently pursued without recognizing its constitutional dimensions. The Supreme Court's 2008 decision in Heller v. District of Columbia confirmed that the Second Amendment means what it says: "the right of the people to keep and bear arms shall not be infringed."

After Heller and its follow-on case, McDonald v. Chicago, which applied the Second Amendment rights to the states, what government cannot do is deny the individual interest in self-defense. As a legal matter, that debate is settled.

The president and his allies seem to have missed the message, as demonstrated by his continued insistence that most of the American people, including many hunters, support his proposed gun-control measures. Even if that claim were true, constitutionally protected rights are guarded with particular vigor precisely when public opinion turns against them. Meanwhile, the president's continued appeals to emotion, capitalizing on a series of tragic mass shootings, also ill-fit what ought to be a serious and dispassionate discussion.

While the courts are still sorting out Heller's implications, politicians should not assume that they have a free hand to restrict private gun ownership. Decades of case law interpreting and applying the other provisions of the Bill of Rights show that there are hard-and-fast limits on gun control.

The general framework is straightforward and certainly well-known to those who have studied (let alone taught) constitutional law. The government cannot abridge constitutionally protected rights simply to make a symbolic point or because it feels that something must be done. Any measure must be justified by a legitimate government interest that is compelling or at least important. At the same time, any regulation must be "narrowly tailored" to achieve that interest.

On that basis, in a recent case the Supreme Court struck down a federal ban on depictions of animal cruelty, rejecting the government's argument that it had any legitimate interest in banning pictures and videos associated with crimes, and finding—even assuming the government's interest—that the statute swept up too much protected speech. In this way, judicial balancing requires a careful weighing of the government's interests against the individual's, with a thumb on the scale in favor of the individual.

But you wouldn't know that from the current gun-control debate. Several states, for example, are considering gun-insurance mandates modeled after those for automobile insurance. There is no conceivable public-safety benefit: Insurance policies cover accidents, not intentional crimes, and criminals with illegal guns will just evade the requirement. The real purpose is to make guns less affordable for law-abiding citizens and thereby reduce private gun ownership. Identical constitutionally suspect logic explains proposals to tax the sale of bullets at excessive rates.

The courts, however, are no more likely to allow government to undermine the Second Amendment than to undermine the First. A state cannot circumvent the right to a free press by requiring that an unfriendly newspaper carry millions in libel insurance or pay a thousand-dollar tax on barrels of ink—the real motive, in either case, would be transparent and the regulation struck down. How could the result be any different for the right to keep and bear arms?

The same constitutional infirmity plagues the president's plan. Consider his proposal for a new "assault weapons" ban, targeting a class of weapons distinguished by their cosmetic features, such as a pistol grip or threaded barrel. These guns may look sinister, but they don't differ from other common weapons in any relevant respect—firing mechanism, ammunition, magazine size—and so present no greater threat to public safety. Needless to say, the government has no legitimate interest in banning guns that gun-controllers simply do not like and would not, themselves, care to own.

Also constitutionally suspect are restrictions on magazine size. There is no question that a limit of 10 rounds (as the president has proposed) or seven (as enacted by New York state last month) would impair the right to self-defense. A magazine with 10 rounds may provide adequate protection against a single nighttime intruder. But it may not: What if there are two intruders?

Further compounding the constitutional problem is the fact that the benefit of such limits is questionable. For a practiced and calm shooter, swapping magazines takes no more than a couple of seconds. And a swap may not even be necessary if the shooter has multiple guns, as in several mass shootings in recent years.

While some limit on magazines may be constitutionally permissible, one that falls below the capabilities of guns in common usage for self-defense is probably not. The most popular guns for self-defense take 15 or so rounds in their default configurations. Given the uncertain benefit of restricting magazine size, not to mention the tens of millions of "high capacity" magazines in circulation, something near that number may be a constitutional minimum.

And while there is no question that procedural requirements like background checks are permissible, that does not mean that the government may place an undue burden on the right of law-abiding citizens to protect themselves. Excessive waiting periods, registration fees and the like are all subject to scrutiny, lest they infringe on constitutionally guaranteed rights.

At bottom, the Constitution requires sensible and effective regulation of guns that respects and upholds this most fundamental right. Policies motivated by nothing more than discomfort with firearms, often born of a lack of experience, fall far short.

Messrs. Rivkin and Grossman practice law in the Washington, D.C., office of BakerHostetler. Mr. Rivkin served in the Justice Department and the White House Counsel's Office in the Reagan and George H.W. Bush administrations.

Source: http://online.wsj.com/article/SB10001424127887323951904578290460073953432.html?mod=ITP_opinion_0