Speakers Focus on the Importance of Our Founding Documents

The Donald Koch Foundation hosted a presentation by Howard Bay and Clark Beim-Esche at the Principia School in St. Louis, Missouri, on April 4, 2017. During the talk, the speakers discussed the history of the Declaration of Independence and the Bill of Rights and why these documents remain important today.

The speakers both have strong ties to the Principia School, as well as a thorough knowledge of American history. A retired teacher of history and economics at the school, Mr. Bay is also a former Principia student. Mr. Beim-Eshce worked in the English and History departments at the Principia Upper School for more than 30 years. A winner of the Mark Twain Boyhood Home and Museum Creative Teaching Award, Mr. Beim-Esche is also an author. His 2015 book, Calling on the Presidents: Tales Their Houses Tell, is available at Barnes & Noble and Amazon.

Mr. Bay spoke first, describing the Declaration of Independence as America’s birth certificate. He went on to say that “no American document has had a greater global impact” than the Declaration of Independence. In fact, over half of today’s United Nations’ member countries have taken inspiration from our founding documents to create their own declarations of independence. All but two of these documents lack the passage from our document’s preamble, which states that “all men are created equal” and have “certain unalienable rights, including ”life, liberty, and the pursuit of happiness.”

Our Declaration of Independence was a radical document, according to Mr. Bay, because it marked the first time that a government was formed on the basis of a set of “truths.” It also asserted that a government’s power comes from the people and not the other way around. This meant that Americans were now “citizens” and not “subjects.”

Toward the end of his presentation, Mr. Bay described the harrowing journey that the Declaration of Independence and the Constitution took during the Revolutionary War and throughout the decades before ending up encased in glass at the National Archives. The fact that we could have easily lost these valuable documents is frightening. According to President Truman, “Liberty … can be lost, and it will be, if the time ever comes when these documents are regarded not as the supreme expression of our profound belief, but merely as curiosities in glass cases.” Mr. Bay concluded his portion of the talk by warning that in order to preserve the principles of liberty, each new generation of Americans must not only understand the truths expressed in our founding documents, but they must also cherish them.

Mr. Beim-Esche begins his portion of the presentation by comparing the Bill of Rights to the Ten Commandments. According to Mr. Beim-Esche, both documents are basically lists of “thou shalt nots.”

Subsequently, Mr. Beim-Esche detailed the timeline of the drafting of the Constitution, from the Declaration of Independence and the release of Thomas Paine’s Common Sense in 1776 to the Constitutional Convention in 1787. He goes on to describe the addition of the Bill of Rights in 1791.

The 10 amendments contained in this document list 24 limitations on government. Among these are restrictions on laws that diminish the freedom of speech, peaceable assembly, religion, press, and petition. The government also cannot force citizens to house soldiers in their homes without their consent or infringe upon people’s right to have and bear arms.

Additionally, the Bill of Rights prevents the government from conducting unreasonable searches and seizures and requires probable cause before issuing a warrant. The Bill of Rights also guarantees citizens freedom from self-incrimination, double trial for the same crime, arrest without indictment, and loss of property without just compensation. When a citizen is arrested, the government must deliver a just and timely trial, an impartial jury, notice of all charges, and legal representation. The accused also has the right to confront any witnesses. In a civil case over a certain dollar amount, citizens are entitled to a jury trial. Moreover, the government cannot impose excessive bail or fines, or any cruel and unusual punishment.

To further secure against government overreach, the 9th Amendment of the Bill of Rights denies the government any powers that the Constitution does not specifically mention. The 10th Amendment takes this one step further by stating that all rights not delegated to the federal government in the Constitution are reserved to the states and the people.

At the end of his presentation, Mr. Beim-Esche pointed to the bottom of a copy of the Bill of Rights that Donald Koch would later hand out to junior students in the audience. He said, “This copy of the American Bill of Rights is a gift to the students of Principia by the Donald L. Koch Foundation as a timeless reminder that the freedom entrusted to their care is a challenge to their generation—a test of them as individuals to preserve and protect or ignobly to lose.”

A Powerful Administrative State – Why You Should Fear It

Neither Democrats nor Republicans realize what the true threat to our liberty is. As a result, both parties spend all their time and resources attacking the wrong things. For example, conservatives complained loudly when President Obama agreed to the Iran nuclear deal and cut the defense budget, citing these actions as proof of his contempt for American exceptionalism. While today, liberals assert that President Trump’s proposed immigration restrictions and his distrust of the national press corps amount to an assault on the Constitution.

However, both sides are ignoring the very large elephant in the room. The biggest danger Americans face is actually the administrative state—a sprawling, executive-branch bureaucracy made up of hundreds of federal agencies, sub-agencies, and departments. Often referred to as the “deep state” or the “regulatory state,” this bipartisan behemoth exercises powers once held only by royalty. These include the authority to create, adjudicate, and enforce laws that affect almost every aspect of our lives.

Americans should fear an overly powerful administrative state for a variety of reasons. First, it is nearly impossible to hold these bureaucrats accountable for their actions. These officials are unelected and thus don’t have to please their constituents to keep their jobs. Adding to the unaccountability of the administrative state is its status as a nebulous entity.

Nobody can even say for sure how many agencies actually exist, because there is no definitive list. The spring 2015 edition of the Unified Agenda of Federal Deregulatory and Regulatory Actions publication, for example, lists 60 federal agencies. However, the Administrative Conference of the United States claims the number is 115. Meanwhile, The United States Government Manual states that there are 316 federal agencies.

If we can’t even figure out how many agencies there are, how can we tell who is making all the rules we must follow, or for that matter, how many rules even exist? To make matters worse, these agencies constantly produce a multitude of what amount to undocumented regulations, otherwise known as “regulatory dark matter,” through their bulletins, memos, and guidance documents. A US House of Representatives Committee on Oversight and Government Reform voiced its alarm over these “non-legislative” rules in 2012, stating

“Guidance documents, while not legally binding or technically enforceable, are supposed to be issued only to clarify regulations already on the books. However . . . they are increasingly used to effect policy changes, and they often are as effective as regulations in changing behavior due to the weight agencies and the courts give them.”

Another reason to fear the administrative state is that it has assumed the powers that were once the exclusive domain of Congress and the courts. The National Labor Relations Board (NLRB), for example, not only creates laws that govern employer-employee relations, it also investigates rule violations, decides the fate of the rule-breakers, and enforces the consequences of its decisions. However, according to Article I, Section I of the Constitution, all legislative powers are supposed to reside with Congress. In fact, the Founding Fathers thought it was extremely important to separate the judicial, legislative, and executive powers into different branches of government. James Madison explicitly states in Federalist No. 47 that

“the accumulation of all powers legislative, executive, and judiciary in the same hands . . . may justly be pronounced the very definition of tyranny.”

In his 2014 book Is Administrative Law Unlawful?, constitutional scholar Philip Hamburger claims that today’s administrative state has essentially “gutted” the Constitution. One supporting example is the use of administrative courts, which deny citizens the right to a fair trial. These proceedings, which judges on the agencies’ payroll oversee, often lack a jury and fail to follow full due-process procedures.

According to Hamburger, the framers of our Constitution would be appalled by the abuses we see perpetuated by today’s administrative state. In fact, they drafted the Constitution specifically to avoid the possibility of a corrupt head of state, like King James I, ever governing America. James Madison even went as far as to say that the Constitution was a means to guard against “the danger to liberty from the overgrown and all-grasping prerogative of an hereditary magistrate.”

King James I believed that his divine right of “absolute power” allowed him to dismiss laws or make them not apply to certain people without having to obtain approval from Parliament. James also made his own laws, bypassing Parliament and the court system. He issued proclamations and established tribunals, which, like modern administrative agencies, commissioned expert reports and issued and enforced decrees.

The federal agencies of today are essentially doing the same thing. The federal Department of Health and Human Services (HHS), for instance, exempted a number of politically important companies, like McDonald’s, from certain Obamacare provisions. However, in place of royal decrees, the administrative state issues rules and sends out “guidance” letters. One particularly infamous letter is the one from an Education Department official in 2011 that stripped college students of due process rights when someone accuses them of sexual misconduct.

So, how do we reign in the administrative state and the overreach of the executive branch? According to Hamburger, there are several practical things we can do. One is to hold agency officials financially accountable for exceeding their constitutional authority. Until the 19th century, the American people could sue these individuals for damages. Today, thanks to a “qualified immunity” doctrine, government officials are safe from repercussions of their actions.

Other ways to restrain the power of the administrative state involve requiring Congress to approve any new laws and to review all existing regulations to decide which ones should become laws. Additionally, the president could make certain agencies try cases in regular courts rather than relying on administrative judges.

One Important Way This Think Tank Is Fighting for Your Rights

To guard against any one bloc of the central government gaining too much influence, the founding fathers installed a system of checks and balances into our founding documents. One aspect of this system is the concept of separation of powers, which means that each of the three branches of government – the executive, the judicial, and the legislative – must operate solely within the boundaries delegated to it by the Constitution.

Also inherent in separation of powers is the idea that those who execute the law are directly accountable to the president. However, many government agencies today are effectively disregarding the strictures of the Constitution. They do so by arguing that in order to efficiently serve the needs of modern society, they must employ powers designated to other branches.

Administrative Law Judges and Conflicts of Interest

There are a number of organizations, however, that are fighting against the creep of the administrative state. The Cato Institute is a research foundation that aims to advance the principles of limited government, free markets, and individual liberty in public policy. It recently filed an amicus curiae, or “Friend of the Court,” brief in support of the defendant in a case involving the US Securities and Exchange Commission (SEC), condemning its use of administrative law judges (ALJs).

Essentially, the SEC claimed that in 2006, the investment advisory firm Timbervest and its four owners committed fraud by arranging to sell a client’s land at an extremely low price to another client before purchasing the property itself without notifying the first client. The SEC also alleged that Timbervest received real estate commissions on these transactions that it failed to disclose. The SEC “tried” Timbervest’s owners in its in-house court, which does not rely on a jury to render a decision, but instead leaves rulings in the hands of ALJs, who the agency considers its “employees.”

After the SEC pronounced Timbervest liable, it ordered the firm to pay back all the fees the initial client paid and permanently barred the owners of Timbervest from engaging with any investment advisers. Timbervest appealed to the DC Circuit Court, arguing that it was innocent of the charges and that, regardless, the matter had surpassed the statute of limitations specified by the Investment Advisers Act of 1940.

The Significance of the Appointments Clause

The Cato Institute filed its amicus brief with the DC Circuit Court on May 2, 2016 because it wanted to “address the implications of core separation-of-powers issues along with the democratic accountability of executive officers – issues that no other amicus brief covers.” Cato argued that ALJs are essentially judicial officers of the executive branch, similar to territorial judges.

However, there are three layers of officials between the SEC’s ALJs and the president. As a result, the president cannot remove them like he or she can remove other officers if they abuse their powers. The ALJ system therefore violates the Appointments Clause in Article II of the Constitution, which grants the president control over “inferior officers” of the executive branch, even if these posts are judicial in nature.

Another issue Cato raised was that the process by which the SEC hires ALJs produces inherent bias. After all, if a judge’s employer chooses him or her to try a case that involves the employer, the judge may (whether consciously or unconsciously) side with the entity that supplies his or her paycheck.

The Supreme Court has even stated that bias is nearly inevitable when “a man chooses the judge in his own cause.” As a testament to how widespread the problem has become, a former SEC ALJ named Lillian McEwen recently publicly revealed how the SEC pressured ALJs to favor the agency in rulings.

Article III Courts Ensure Due Process

In addition, the Constitution specifies that cases involving real estate fraud should be heard before an Article III court, not an administrative one. Congress can assign cases to administrative courts for cases involving new public rights, such as Social Security Disability claims. However, it can’t do this for cases, like the Timbervest one, that address common-law matters that have been argued in courts since the birth of our nation.

The government also can’t eliminate a person’s Constitutional rights without the due process provided by a proper judge. By banning Timbervest’s owners from any kind of association with an investment adviser, the ALJ violated the owners’ First Amendment right to free association. To remove this right requires, at the least, a jury trial held in an Article III, or federal, court.

While the Timbervest case still lingers in the appeals process, a number of other organizations have joined The Cato Institute in supporting Timbervest in its struggle against the ALJ system. The Washington Legal Foundation, a public interest law firm that bills itself as “an advocate for freedom and justice,” and the Securities Industry and Financial Markets Association, which promotes efficient and effective capital markets, have also filed amicus briefs supporting Timbervest’s assertion that the SEC’s ALJ system is inherently unconstitutional.

Why Is the 7th Amendment Important to Us Today?

Most people know that the 1st Amendment is about free speech, and nearly every school kid can tell you that the 2nd Amendment guarantees Americans the right to bear arms. However, many people do not understand what the 7th Amendment protects. The irony of this is that without the 7th Amendment, Americans could lose many of the other rights to which they are entitled.

Added to the Constitution in 1791, the text of the 7th Amendment reads:

“In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.”

This means that in a civil case (when single persons or organizations sue each other, as opposed to a criminal charge brought by the government against a person or an organization) involving a sum that exceeds the minimum threshold (which, according to 28 U.S. Code § 1332, is currently more than $75,000 if diversity of citizenship applies, or more than $20 if diversity of citizenship does not apply), the parties involved have the right to argue their case before a jury of their peers. Further, any decision arising from a civil case such as this cannot be summarily overturned unless appropriate legal procedures are followed.

It must be noted that the 7th amendment only applies to federal cases. The Supreme Court has never ruled that the 7th amendment can be extended to state and local courts. However, most states voluntarily guarantee the right to a jury trial in civil cases. Additionally, state court cases that are decided under federal law must guarantee the right to a jury trial.

Why did the founders include this amendment?

The framers of the Constitution believed strongly in a citizen’s right to a trial by his or her peers. In fact, it was one of the key ideals for which they fought in the Revolution. The founders were worried that if judges had the sole authority to decide trials, they would take the government’s side in any issue, thus tipping the scales of justice towards those in power.

Early Americans had good reason to fear this outcome. When King George III appointed judges in the colonies, these judges tended to rule in favor of the crown. Consequently, the founders believed that the best way to ensure fair trials was to entrust the outcomes to juries composed of locals. These people likely knew the defendant(s) and understood the issues involved in a case.

The founding fathers added the 7th Amendment to the Constitution to protect the jury system from the influence of any official or subjective power. As the founders had learned from their days under colonial rule, those high in the political hierarchy had no qualms about subverting the workings of justice for their own ends.

Today, Constitutional scholars across the political spectrum agree on the necessity of protecting the civic jury system. According to Justice William Rehnquist, the right to a jury trial is an “important bulwark against tyranny and corruption, a safeguard too precious to be left to the whim of the sovereign, or, it might be added, to that of the judiciary.”

Recent abuses of our 7th Amendment rights

Pressured by special interests over the past few decades, legislatures and other government bodies across the country have passed laws that limit people’s access to the courts and restrict the power of juries, thus eroding the authority of the civil jury system. The following are a few examples of how American’s 7th Amendment rights are being violated:

1) Using internal courts. More than two dozen federal agencies, including the Social Security Administration and the Securities and Exchange Commission, rely upon their own internal court system to make decisions regarding compliance matters. According to these agencies, these internal judges (known as “administrative law judges”) are experts in their particular field. Thus, the argument goes, they are better suited to adjudicate regulatory cases than regular federal judges.

However, these agency courts do not follow the same rules as other court systems. Internal judges can disallow the testimony of expert witnesses, refuse requests for information regarding government witnesses, and limit how the defense can depose a witness or conduct discovery. Unsurprisingly, these internal courts tend to rule in favor of the agency that provides their paychecks.

2) Forcing arbitration. It is difficult nowadays to shop online, accept a job offer, or fill out an application for a credit card without having to agree to an arbitration clause. These are often hidden in the fine print in Terms of Service contracts that everyone agrees to, yet almost no one actually reads. Arbitration clauses mean that people cannot obtain certain goods or services without first relinquishing their right to jury trial.

Under these Terms of Service, if an individual wants to hold a company accountable for unfair or illegal business practices, he or she is barred from filing a class-action lawsuit. Instead, he or she must participate in arbitration, a process that often favors corporate interests. In fact, according to data from The New York Times, nearly two-thirds of those who engage in arbitration to fight fraud, excessive fees, or bad loans received zero compensation.

3) EstablishingThe English Rule.” Lobbyists across the country have begun advocating for “The English Rule,” which is when the loser of a civil court trial is responsible for paying the winner’s legal fees. For example, if a person sued General Motors, he or she would be required to pay the corporation’s legal expenses if he or she lost. Obviously, this makes it very risky for any but the very wealthy to sue a large business, thus reducing access to a jury trial for all but a select few.