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Comment by triviatise

8 years ago

In wickard vs filburn the govt made the case that a wheat farmer that grew wheat only for himself was subject to the interstate commerce clause. The reasoning was that he impacted markets by not having to buy wheat and therefore he should be fined for violating farming restrictions. The supreme court ruled in favor of the US govt.

This expansion of the commerce clause could lead to trump being able to get something like this through. Be wary of expansions of federal power predicated on reinterpretation of the constitution.

> The reasoning was that he impacted markets by not having to buy wheat and therefore he should be fined for violating farming restrictions

I see the government is familiar with interaction-free measurements of quantum systems.

But seriously, it sounds like people will "interpret" anything in any way that is most convenient to them. I almost wish we had a formal system of language so these sorts of things would not occur. Of course, then we would have bugs in that system that would miss important edge cases...

  • > I almost wish we had a formal system of language

    You mean "legalese"? The language used in law is very specific and nuanced. I enjoy how similar it is to programming, where a bug in the source language can be exploited, much how imperfections in legal documents can be used as a loophole.

    I'd love to see a software system that is able to reliably output high-quality legal documents. If developed in the open, any lawyer could theoretically contribute and help avoid loopholes for everyone. In theory we could build a framework that makes it easy to write loophole-free contracts that are easy for all parties to understand.

    • > In theory we could build a framework that makes it easy to write loophole-free contracts

      You mean similar to how, in theory, we could build a framework that makes it easy for us all to write readable, bug-free code?

      Edit: I was mostly being tongue in cheek, but I also recognize that this is about provably correct code à la Coq, etc. That'd be cool for sure. :)

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    • Fortunately in software we can patch in a matter of moments.

      Unfortunately bugs written in legalese tend to take years or decades to patch.

First: you literally do not know what you're talking about here. There's no Commerce Clause issue, because California's waivers to continue developing stricter standards, and the option for other states to adopt those standards instead of the federal ones, do not present a Commerce Clause issue: Congress has explicitly enacted into federal statute the permission for all of this.

Second: you still don't know what you're talking about, because even if there weren't federal statute explicitly covering this, California's rules apply to cars sold in California. SCOTUS has never reliably pushed far enough into expansive Commerce Clause jurisprudence to be able to strike that sort of thing down, and never ever will (hint: because doing so would create a legal precedent for federal gun control to pre-empt more-permissive state-level gun laws, something the Court's conservatives will never allow a hint of a possibility of a thought of an option of a shadow of a consideration of...).

Third: cherry-picking Commerce Clause cases is a really bad way to make an argument. SCOTUS has been all over the damn place on the Commerce Clause at different points in US history, and you can ultimately find a Commerce Clause case to justify basically anything you want to say, which is why any given example tends to be pretty meaningless as an argument.

That wouldn't be the issue here. The question is not whether the federal government gets to set standards at all under the Commerce Clause.

Instead, the issue here would be whether the Act of Congress that specifically governs air efficiency standards gives any quarter to this administration's laughable potential reasoning for not granting a waiver that the law dictates must be granted by the EPA Administrator to allow any state to exceed the federal standard.

Congress would need to repeal the relevant portions of the CAFE laws, which specifically allow CARB to propose their own standards.

This was from the famous Stitch in Time that Saved Nine. Since the US Constitution does not put a limit on the number of Supreme Court justices, FDR threatened to increase the number and stack the court in his favor if they did not rule in his favor.

Given my understanding of how lower courts work on case law, this set a whole bunch of biased precedents from this one ruling. The ability of California to set good environmental law could still prevail if they could get a ruling using some other way like the 10th amendment.

  • Commerce Clause jurisprudence is all over the place. For any given Commerce Clause case you pick as your example of how it's "gone too far this time!" (or "not gone too far enough!"), there'll be another one you can pick that's exactly the opposite.

    Even the same general panel of judges will about-face on it sometimes.

What would fuel efficiency standards look like under a strict interpretation of the commerce clause?

> This expansion of the commerce clause could lead to trump being able to get something like this through

That is not the strategy the Trump administration is using, according to the article. California is regulating emissions under a 2009 waiver granted by EPA. The administration is seeking to revoke that waiver.

  • The federal Clean Air Act states the EPA shall grant California the waiver unless California fails to meet certain conditions. The EPA (and by extension the head of the EPA, and the head of the EPA's boss who happens to be a President who hates California) does not possess the power, under the Act, to deny the waiver on a whim.

I know the case. If he was literally only “growing wheat for himself” as a subsistence farmer, the commerce clause wouldn’t apply. The reason it applies is that he was already operating a business that does interstate commerce.

Such a business, when it makes a choice to not execute a sale that it would have had an opportunity to execute, has “mens rea” for that act’s effects on interstate commerce—because such companies keep track of such things, and their decisions are driven by such metrics.

It’s just like insider trading: not executing a trade that would have otherwise (i.e. given only public knowledge) been in your best interests to execute, where you didn’t execute it because of corporate-internal knowledge, is still just as illegal as the reverse. In either case, since it’s your job as a trader to be aware of the effects of both executing and not executing trades, either “act” can be said to be the result of an explicit, intentional choice you made.

(Of course, that’s different from just not executing a trade that you would have had no particular reason to execute. You can’t blame someone for insider trading just because they don’t short a stock, if they don’t already have a pattern of shorting stocks!)

In all such cases, the guilty party is a more abstract type of actor than an individual (e.g. a corporation; an accredited investor) and their guilt is driven by the fact that such actors behave predictably according to some preference function, such that it’s clear where such actors act against that preference function both through explicit action; and through inaction.

Or, as a formalism: when it’s 100% of your job, as an agent in a system, to decide whether to make deals, then a lack of a deal, together with evidence that you considered the deal, can be regarded as an explicit choice you’ve made to not make that deal.

  • > I know the case. If he was literally only “growing wheat for himself” as a subsistence farmer, the commerce clause wouldn’t apply. The reason it applies is that he was already operating a business that does interstate commerce.

    Are you sure about that? I don't know that much about the law, but I've always heard of this case specifically because the excess wheat he was producing was for his own consumption.

    Wiki seems to agree with this, not mentioning anything about his having a business that I see (although I only skimmed the article and may have missed something).

    • Yes, the amount grown in excess of the law was for his own use; but the amount grown conformant to the law was for sale.

      There may not have been an incorporated entity beyond just the farmer as farmer; but, sole proprietorship+ or corportation, there was still a separate abstract entity from the federal government’s perspective whose function was to trade in wheat (a “trading entity” or “Doing Business As” entity.) The farmer was—again, from the federal government’s perspective—the employee and sole shareholder of that entity; and that entity did business selling wheat.

      + (Sole proprietorships are a “hack” of the public API by which individuals interact with the tax system, allowing them to track their DBA revenue and expenses as part of their individual income and expenses. From the government’s perspective, though, when it comes to trade law rather than tax law, there’s always a company on both sides of each trade. In the case of sole proprietorships—including the case of, say, two neighbouring farmers bartering—the trade is just being executed by two "companies" whose identities are foreign-keyed to the individual sole shareholders' identities.)

      Under this model, the amount grown in excess of the law was, effectively, grown by a business that sells wheat, and then given to the business’s sole shareholder in place of pay. That transaction caused the shareholder to not have to buy wheat on the market, which means the business made a choice to make this deal, when the business—as an entity that sells wheat—had a responsibility to know that it was breaking the excess law by doing this.

  • "It’s just like insider trading: not executing a trade that would have otherwise (i.e. given only public knowledge) been in your best interests to execute, where you didn’t execute it because of corporate-internal knowledge, is still just as illegal as the reverse."

    Can you provide a citation for that? Every definition I've read (eg. [1]) says that for it to be insider trading, there must be a trade. It doesn't necessarily have to be done by you (eg. U.S. vs. Rajaratnam [2], where an insider was convicted of passing information to a friend for relationship goodwill), nor do you have to be the insider (eg. Martha Stewart [3]) but some exchange of tangible property for financial benefit must have taken place.

    It seems very problematic, from an enforcement perspective, to criminalize not doing something, particularly when it comes to trading. I don't see how you could ever prove "would be in your best interest to execute, given only public knowledge", given that the whole point of a trade is that one counterparty believes that it's in their best interests to own the security at the sale price while the other party believes it's in their best interests to not own the security. If there's any market liquidity at all at that price, it implies there's a difference of opinion over whether the security is worth owning. It also seems problematic to try and infer whether your lack of an action was because of inside knowledge or whether it was because you were restricted from stock transactions because of insider trading laws (ironically) or whether you just had too many other things going on to bother trading.

    [1] https://www.investor.gov/additional-resources/general-resour...

    [2] https://www.businessinsider.com/can-you-be-guilty-of-insider...

    [3] https://en.wikipedia.org/wiki/ImClone_stock_trading_case

    • I was thinking specifically of a case mentioned previously here on HN, where someone cancelled a monthly scheduled partial stock-liquidation event on corporate-internal news that the company's value would change. IIRC the law said that this was insider trading: there was an evidence trail proving that the trade would have been executed, if not for corporate-internal knowledge.

      I guess you could phrase this more clearly as: never investigating a trade in the first place can't be insider trading; but proposing/planning/scheduling a trade and then cancelling that trade, can be insider trading. Where, as well, choosing to execute a competing trade can be considered to cancel the trade that would have been executed in its place.

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