Ger­ry­man­der­ing, sales tax in Supreme Court’s sights

The Washington Post - - POLITICS & THE NATION - robert.barnes@wash­post.com BY ROBERT BARNES

The Supreme Court on Fri­day added a third ex­am­i­na­tion of dis­crim­i­na­tory ger­ry­man­der­ing charges to its docket, this time from Texas, and an­nounced it will con­sider over­rul­ing a decades-old prece­dent that hob­bles states from re­quir­ing on­line re­tail­ers to col­lect sales tax.

Those cases — along with a chal­lenge to how Se­cu­ri­ties and Ex­change Com­mis­sion em­ploy­ees en­force in­vest­ment pro­tec­tion laws — high­light a batch of grants that will fill much of the court’s re­main­ing term, the jus­tices an­nounced Fri­day.

And one other is­sue still could be added: a re­view of Pres­i­dent Trump’s lat­est travel ban on im­mi­grants and vis­i­tors from cer­tain coun­tries. The jus­tices will con­sider next week whether to take that case.

On the ger­ry­man­der­ing front, the Supreme Court al­ready has heard a chal­lenge to the way Wis­con­sin Repub­li­cans drew leg­isla­tive district maps. And last month it ac­cepted a pe­ti­tion from Mary­land Repub­li­cans to re­view the way that state’s Demo­cratic lead­er­ship re­drew the lines of a con­gres­sional district held by a GOP con­gress­man. Both of those cases in­volved charges of par­ti­san ger­ry­man­der­ing.

The cases from Texas in­volve long-run­ning dis­putes about whether Texas Repub­li­cans in­ten­tion­ally dis­crim­i­nated against mi­nor­ity vot­ers when re­draw­ing lines for con­gres­sional dis­tricts and the leg­is­la­ture in 2011.

A three-judge panel last sum­mer found that two of the Texas con­gres­sional dis­tricts vi­o­lated the Con­sti­tu­tion and the Vot­ing Rights Act, and were in­ten­tion­ally dis­crim­i­na­tory. It found simi-- that the state’s leg­isla­tive district maps were flawed.

It had or­dered the state to re­draw the lines in time for the 2018 elec­tions. In­stead, Texas asked the Supreme Court to put the rul­ings on hold un­til jus­tices could re­view the rul­ing’s mer­its.

The court agreed on a 5-to-4 vote in Septem­ber, with the court’s four lib­er­als ob­ject­ing. Both the con­gres­sional and leg­isla­tive map cases are Ab­bott v. Perez.

The sales-tax case rep­re­sents a con­sol­i­dated ef­fort by states to over­turn a 1992 Supreme Court de­ci­sion up­hold­ing a con­sti­tu­tional rule that barred re­quir­ing ven­dors to col­lect sales tax on mail-or­der sales un­less the busi­ness had a “phys­i­cal pres­ence” in the state.

The rule has al­ways been seen as con­tro­ver­sial, and the ex­plo­sion of In­ter­net sales means state and lo­cal gov­ern­ments have lost bil­lions of dol­lars in tax rev­enue. They say that the rul­ing is un­fair to them and to bricks-and-mor­tar re­tail­ers within their borders that have no choice but to col­lect the taxes.

South Dakota took the lead and told the court it was time to over­turn the prece­dent, Quill Corp. v. North Dakota.

Com­pa­nies now “can in­stantly tai­lor their mar­ket­ing and overnight de­liv­ery of hun­dreds of thou­sands of prod­ucts to in­di­vid­ual cus­tomers based on their IP ad­dresses; th­ese com­pa­nies can surely cal­cu­late sales tax from a zip code.”

But on­line re­tail­ers that asked the court to stay out of the In­ter­net sales bat­tles dis­agreed. “The bur­dens will fall pri­mar­ily on small and medium-size com­pa­nies whose ac­cess to a na­tional mar­ket will be sti­fled,” said law- yers for Way­fair, Over­stock.com and Newegg.

They said that the num­ber of tax­ing ju­ris­dic­tions in the United States is es­ti­mated at be­tween 10,000 and 16,000.

And they con­tend that it should be up to Congress, not the courts, to rem­edy any prob­lems that lo­cal gov­ern­ments say they have.

The pe­ti­tion “in­vites the court to as­sume a leg­isla­tive role, sup­plant­ing Congress, the body to which the Con­sti­tu­tion as­signs re­spon­si­bil­ity for reg­u­lat­ing com­merce ‘among the sev­eral states,’ and which is ac­tively ad­dress­ing the is­sue,” the com­pa­nies said.

But Congress has strug­gled for years to come up with a plan, even though some on­line re­tail­ers have said that they would wel­come a na­tional rem­edy rather than deal with in­di­vid­ual states.

The case is South Dakota v. Way­fair.

The SEC case is a tech­ni­cal is­sue that could af­fect how other reg­u­la­tory agen­cies do their work.

At is­sue is whether the SEC’s ad­min­is­tra­tive law judges are em­ploy­ees or, be­cause they wield sig­nif­i­cant de­ci­sion-mak­ing author­ity, are “in­fe­rior of­fi­cers” cov­ered by the Con­sti­tu­tion’s “ap­point­ments clause.”

Such of­fi­cers must be ap­pointed by the pres­i­dent, the head of a fed­eral agency or by a court.

The case is brought by Ray­mond Lu­cia, a for­mer Cal­i­for­nia ra­dio host and in­vest­ment ad­viser known for his “Buck­ets of Money” strat­egy. His case was heard by an ad­min­is­tra­tive law judge, and he re­ceived a life­time ban from in­vest­ment-re­lated work.

It is also no­table be­cause it is an­other case for which the Trump ad­min­is­tra­tion’s Jus­tice De­part­ment switched sides. It says it now agrees with Lu­cia and oth­ers in the busi­ness com­mu­nity who say that the SEC’s way of ap­point­ing the judges vi­o­lates the Con­sti­tu­tion. The case is Lu­cia v. SEC.

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