Opposition Brief — ACORN v. United States

3

these grants. New York Acorn has received funding

from the federal Department of Housing and Urban De-

velopment (HUD) through the New York State Housing

Finance Agency. Pet. App. 3a-4a.

b. ACORN has been plagued by serious mismanage-

ment, including embezzlement at its highest levels. In

1999 and 2000, Dale Rathke, the brother of ACORN's

founder Wade Rathke, embezzled nearly $1 million from

the organization. ACORN's officers failed to notify law

enforcement officials or even ACORN's board of direc-

tors until June 2008, when a whistleblower forced

ACORN to disclose the embezzlement. An internal re-

port commissioned by ACORN in the wake of the em-

bezzlement scandal detailed “‘potentially improper use

of charitable dollars for political purposes’ as well as

possible violations of federal law by ACORN and its

‘web’ of nearly 200 affiliated organizations.” Pet. App.

5a.

In 2009, a new scandal arose when hidden cameras

recorded ACORN employees and volunteers providing

advice and supportive counseling to what appeared to be

a proposed prostitution enterprise. Pet. App. 5a-Ga.

The Harshbarger Report concluded that the conduct

recorded on the videos “represent[ed] the byproduct of

ACORN's longstanding management weaknesses,”

Harshbarger Report 3, and “criticized ACORN's * * *

overall failure to provide adequate organizational infra-

structure necessary to manage and oversee its opera-

tions.” Pet. App. 6a.

ACORN workers have also been convicted of voter

registration fraud. Between October 2008 and May

2009, two more ACORN workers were charged with and

convicted of voter registration fraud. Pet. App. 5a. The

Harshbarger Report observed that “[t}he hidden camera

4

controversy [wa]s perceived by many as a third strike

against ACORN on the heels of the disclosure in June

2008 of an embezzlement cover-up, which triggered the

firing of ACORN's founder, and the allegations of voter

registration fraud during the 2008 elections.” Harsh-

barger Report 2; seo also zd. at 2 n.1 (noting that the

Report did not examine voting-fraud allegations).

2. Following the revelation of those instances of mis-

conduct and mismanagement, the federal government

re-evaluated ACORN's fitness for federal funding.

a. First, in September 2009, two federal agencies—

the Internal Revenue Service and the Census Bureau—

terminated their relationships with ACORN in response

to evidence of ACORN's misconduct. Pet. App. 6a.’

Also in September 2009, Members of Congress asked

the Government Accountability Office (GAQ) to begin an

investigation of ACORN, out of concern that the organ:-

zation was improperly using federal funds. /bid.

b. The next month, Congress enacted a restriction

on ACORN's eligibility for federal funds as part of the

2010 continuing appropriations resolution, the measure

that funded federal agencies until Congress enacted

appropriations legislation for Fiscal Year 2010 (FY

2010). Pet. App. 7a; see Continuing Appropriations Res-

olution, 2010 (2010 Continuing Resolution), Pub. L. No.

111-68, Div. B, § 163, 123 Stat. 2053 (2009) (Pet. App.

108a-109a). Section 163 of the 2010 Continuing Resolu-

tion provided that “[n]one of the funds made available by

this joint resolution or any prior Act may be provided to

the Association of Community Organizations for Reform

* Several States also suspended their funding of ACORN. Pet. App

6a-7a

Now (ACORN), or any of its affiliates, subsidiaries, or

allied organizations.”

In response to a request by HUD for guidance, the

Office of Legal Counsel of the Department of Justice

issued a memorandum explaining that the 2010 Continu

ing Resolution did not preclude agencies from making

payments in satisfaction of pre-existing contractual obli-

gations. Applicability of Section 168 of Division B of

Public Law 111-68 to Payments in Satisfaction of Ex-

isting Contractual Obligations (Oct. 23, 2009), http://

www. justice.gov/olc/2009/obligations-public-law11168.

pdf (OLC Memorandum); see Pet. App. 8a.

The 2010 Continuing Resolution, along with tts re-

strictions on ACORN funding, expired on December 18,

2009. See Act of Oct. 30, 2009, Pub. L. No. 111-88, Div.

B, § 102, 123 Stat. 2972 (Pet. App. 111a).

c. When Congress subsequently adopted appropria-

tions legislation to fund the federal government for FY

2010, it included restrictions on funding to ACORN by

certain departments and agencies. Five provisions in

certain FY 2010 appropriations acts bar distribution of

funds to ACORN and related organizations. Four of

those provisions specify that none of the federal funds

appropriated under the relevant statute “may be distrib-

uted to the Association of Community Organizations for

Reform Now (ACORN) or its subsidiaries.”* The fifth,

* See Department of the Interior, Environment, and Related Agen

cies Appropriations Act, 2010, Pub. L. No. 111-88, Dw. A, § 427, 123

Stat. 2904, 2962 (2009) (Pet. App. 110a-]]1a); Department of Defense

Appropriations Act, 2010, Pub. L. No 111-118, Div. A, § 8123, 123 Stat

3409, 3458 (2009) (Pet. App. 115a), Consolidated Appropriations Act,

2010 (2010 Consolidated Act), Pub. L. No. 111-117, Div. B, § 534, 123

Stat. 3157 (2009) (Pet. App. 113a); :d@ Div. FE, § 511, 123 Stat. 3314 (Pet

App. 114a). The restriction in Division E of the 2010 Consolidated Act

6

which applies only to appropriations for the Department

of Transportation, HUD, and related agencies, covers a

slightly broader set of organizations related to ACORN:

“None of the funds made available under this Act or any

prior Act may be provided to the Association of Commu-

nity Organizations for Reform Now (ACORN), or any of

its affihates, subsidiaries, or allied organizations.”* See

also Pet. App. 41a n.4 (listing FY 2010 appropriations

acts not covered by ACORN-related funding restric-

tions).

In enacting the 2010 appropriations measures, Con-

gress formally directed the Comptroller General (the

head of the GAO) to “conduct a review and audit of Fed-

eral funds received by [ACORN] or any subsidiary or

affiliate of ACORN” to determine whether any federal

funds were misused, what sLeps can be taken to recover

misused funds and prevent the misuse of funds, and

whether all necessary steps were taken to prevent the

misuse of funds. Congress required that the Comptrol

ler General complete the investigation and report to

Congress within 180 days.°

applies to “funds made available in this division or any other division in

this Act." Jérd The six divisions of that Act cover Transportation,

HUD, and Related Agencies; Commerce, Justice, Science, and Related

Agencies; Financia) Services and Genera) Government; Labor, Health

and Human Services, and Education, and Related Agencies; Military

Construction and Veterans Affairs and Related Agencies; and Depart-

ment of State, Foreign Operations, and Related Programs.

* Transportation, Housing and Urban Development, and Kelated

Agencies Appropriations Act, 2010, Pub L. No. 111-117, Div A, § 418,

123 Stat. 3112 (2009) (Pet. App. 112a) That statute is Division A of the

larger 2010 Consolidated Act.

* Commerce, Justice, Serence, and Related Agencies Appropriations

Act, 2010, Pub. L. No. 111-117, Drv. B, § 635, 123 Stat. 3157-3158 (2009)

2

These provisions, along with most other provisions of

FY 2010 appropriations measures, have been extended

through the end of F'Y 2011 and are set Lo expire on Sep

tember 30, 2011. See Department of Defense and Full

Year Continuing Appropriations Act, 2011, H.R. 1473,

112th Cong., Ist Sess. §§ 1101, 1104, 1106 (2011) (signed

by the President on April 15, 2011, and to be pubhshed

as Pub. L. No. 112-10).

3. On November 12, 2009, following the adoption of

the 2010 Continuing Resolution, petitioners filed this

action to enjoin the enforcement of the ACORN-related

provision of that resolution. Petitioners alleged that the

provision violated the Bill of Attainder Clause, U.S

Const. Art. ], § 9, Cl. 3, the First Amendment, and the

Due Process Clause of the Fifth Amendment. They

named as defendants the United States, the Secretary

of the Treasury, the Secretary of HUD, and the Director

of the Office of Management and Budget. Pet. App. 8a

The district court concluded that petitioners wero

likely to succeed on their claim under the Ball of Alttain-

der Clause, and it entered a preliminary injunction pro

hibiting enforcement of the restriction against providing

federal funds to ACORN. Pet. App. 78a-105a. The gov

ernment filed an appeal of the preliminary injunction

After the preliminary injunction issued, plaintiffs

amended their complaint to include the five ACORN

related provisions in the FY 2010 appropriations acts

Plaintiffs also added three new defendants: the Admin

istrator of the Environmental Protection Agency, the

Secretary of Commerce, and the Secretary of Defense

Pet. App. 10a.

(Pet. App. 113a) That statute is Division B of the larger 2010 Consol:

dated Act

NS)

On March 10, 2010, the district court held in petition

ers’ favor under the Bill of Attainder Clause. Pet. App

33a-77a. The court entered a declaratory judgment and

& permanent injunction against the ACORN-related pro-

visions of both the 2010 Continuing Resolution and the

FY 2010 appropriations acts. /d. at 33a, T5a. The court

did not address petitioners’ First Amendment and duo

process claims.

4. The government timely appealed from the final

judgment, and the court of appeals stayed the injunction

pending appeal. Pet. App. Lia. Petitioners then apphed

to Justice Ginsburg to vacate the stay; Justice Ginsburg

denied the application. Association of Cnty Orgs. for

Reform Now v. United States, No. 0941000 (Apr. 23,

2010)

5. The court of appeals reversed the district court's

Ball of Attainder Clause ruling and remanded the case

for further proceedings on petitioners’ other claims

Pet. App. la-32a*

The court held that the challenged funding restric-

tions did not amount to legislative punishment and,

therefore, did not violate the Bill of Attainder Clause

The court considered the three factors that, under thos

Court's decisions, guide consideration of whether a leg-

islative act is punishment: (1) whether the statute falls

within the historical meaning of legislative punishment,

(2) “whether the statute, ‘viewed in terms of the type

and severity of the burdens imposed, reasonably can be

said to farther nonpunitive legislative purposes’”; and

* While the case was pending in the court of appeab, HUD deter.

mined that pequoner M HANY Management, Inc , formerly known as

New York Acorn, was no longer an “affiliate, subsidiary, or allied or

ganization of ACORN.” Pet. App. 4a n2 (citing Gow) CA R. 28)

Letter (July & 2010)

‘,

st

evidence of punitive intent by the legislature and an ab-

sence of any leguimate non-punitive purpose. Three

cases involved Cri) War-era laws that imposed statu-

tory disatihties on persons who refused to Lake an eath

that they had not supported the Confederacy. Carre

tngs v. Mrssoun, 71 U.S (4 Wall.) 277 (1866); Ex parte

Garland, 71 U.S. (4 Wall.) 333 (1886), Prerce v. Carsé

adon, S US. U6 Wall) 284 UST). The two 20th-

century cases involved congressional attempts to pumsh

“sudversives” or members of the Communist Party by

barring them from certain jobs. United States v. Lowti

S28 U.S. 303 (1946), United States v. Brown, 381 US

437 (1965)

This Court has distilled from those decisions a three-

part inquiry that reflects the lumited scope of this const:

tutional restriction To determine whether an Act of

Congress constitutes legislative punishment, a court

considers whether a statute (1) “falls within the histor:

cal meaning of legislative punishment”; (2) whether it

“further[s} nonpunitive legislative purposes”, and

(3) whether the legislative record “evinces a congressio-

nal intent to punish.” Selective Service, 468 ULS. at S52

Without a persuasive showing on the first two prongs,

“only the clearest proof could suffice to estabhsh the

unconstitutionality of a statute” on the basis of umper-

missible congressional motive alone. Avemming +

Nestor, 363 U.S. 603, 617 (1960)

2 The court of appeals correctly apphed these deci.

sions in holding that the challenged approprmations pro-

Visions are not unconstitutional bills of atlainder.

a. The court properly concluded that a restriction on

a corporation's ability to obtain discretionary grants and

new gevernment contracts im a particular fiscal year

does not fit with the historically recogmired forms of

s tbY WwW c ‘ iegisiature here f ss

ve achieved us legitimate none ye odjects

whe determining whethe 11aw Cc tilule pu sf

r t concluded that t was entirely eas ib!

; to broadly exclude ACORN's aff es, sut

ries, and allies [ron redera | ig 4

ACORN S own reports dem¢ nstrated Trat ws ¢ rean ;

and related entities “make up * * * an amorph

d sprawling S i’¢ App. 2

n light of th fthe “ACORN F

\ and the fact that ne ble é _o T

nifed Siale M4), ¢ nyeTress c

easonably deternine that any federa ey flow

ACORN or related organizations was at risk of |

isused or wasted, and that limited federal m

would be better spent elsewhere

In a similar vein, petitioners argue (Pet. 26) that

egisialion Was necessarily punitive dDecause Congre

1 have allowed the Executive Branch to rest

ACORN funding as soon as it determined “that cert

conditions have been met.” But Congress, not the Ex

ULIVe Rranch IS TESPONSIOle n the f rst instance

propriating federal funds. That authority is, of cour

cabined by various constitut al constraints and <

used to inflict pumshment. The Constitution d

however bar Cor gyress [ron leg Sia yw Si

vy to Salepguara the use t taxpaye r cy )

cts and grants, and does suthor a t

; eh \

16

have chosen to rely on the Executive Branch's slower

and less certain administrative procedures.’

ce. This Court has made clear that “[jjudicial inqui-

ries into Congressional motives are at best a hazardous

matter, and when that inquiry seeks to go behind objec-

tive manifestations it becomes a dubious affair indeed.”

Flemming, 363 U.S. at 617. The Court has thus cau-

tioned that “only the clearest proof could suffice to es-

tablish the unconstitutionality of a statute” on the basis

of impermissible congressional motive. /did. A legisla-

tive record cannot support a conclusion that a law is mo-

tivated by a desire to “punish” affected persons unless

it presents “unmerstakabdle evidence of punitive intent.”

Selective Service, 468 U.S. at 856 n.15 (emphasis added)

(quoting Flemming, 363 U.S. at 619). Thus, in Selective

Service, the Court declined to find that the challenged

statute was punitive even though opponents of the mea-

sure considered it punitive and there were “several iso-

lated statements” among the statute’s supporters “ex-

” Petitioners also contend (Pet. £5) that the funding restnetions were

necessanly punitive because they were not made contingent on the re-

sults of the GAO investigation that the legislation also required, see

p. 6, supra. The court of appeals properly determined that Congress

could “modify the appropriations law following the GAO's investiga-

tion,” and that a temporary ban on receiving government funds, coupled

with the GAO investigation, was proportionate to Congress's legitimate,

non-punitive purpose. Pet. App. 23a-29a. Indeed, GAO's investigation

is not yet compkete. GAO issued a prekrunary report on June 14, 2010,

stating that its “analysis related to these objectives is ongoing, [and) the

information in this report ts preliminary and subject to change.” See

GAO, GAO-19-6)8R, Prelizmimary Odsenations on Funding, Over-

erght, and Investigations and Proseculrons of ACORN or Potentially

Related Organizations 2 (2010). GAO noted that it plans to issue a

further, final report.

17

pressing understandable indignation over the decision

of some nonregistrants to show their defiance of the

{draft} law.” /did.

The Second Circuit properly fcllowed this precedent

in holding that “there is not ‘unmistakable evidence’ of

congressional intent to punish” petitioners, such that the

temporary appropriations restriction is an unconstitu-

tional bill of attainder. Pet. App. 23a. The court noted

that in Lovett, “the congressional record was ‘unmistak-

ably’ clear as to Congress's intent to punish the subject

individuals,” while here, “at most, there is the ‘smatter-

ing’ of legislators’ opinions regarding ACORN's guilt of

fraud.” /d. at 3la.

3. Petitioners assert two purported inter-circuit

conflicts, both of which are illusory. First, petitioners

contend (Pet. 14-17) that the court of appeals created a

conflict with the D.C. Circuit by not treating the funding

restriction as “suspect” because of its specificity. The

D.C. Circuit has endorsed no such principle.

In Foretich v. United States, 351 F.3d 1198 (2003),

the D.C. Circuit held that Congress had overstepped

constitutional bounds in resolving a custody dispute in

favor of a child's mother on the “basis of a judgment that

‘the father had] committed criminal acts of child sexual

abuse.” /d. at 1204. The court noted that Congress had

passed the statute after the D.C. Superior Court had

dismissed the allegations of sexual abuse; from all the

evidence, the court concluded that “[t}he Act memonial-

izes a judgment by the United States Congress that Dr.

Foretich is guilty of horrific crimes * * * despite the

repeated and unwavering rejection of such claims by

every court that considered them.” /d. at 1223.

The D.C. Circuit stressed that its holding reflected

the punitive nature of the statute, not its specificity.

18

Noting that “‘virtually all legislation operates by identi

fying the characteristics of the class to be benefited or

burdened,’” the court observed that “it is not clear that

the specificity requirement retains any real bite.” 351

F.3d at 1218 (quoting BellSouth Corp., 144 F.3d at 63)

Rather, specificity “is only the beginning of (the) in-

quiry” under the Bill of Attainder Clause, and under

that inquiry, “the principal touchstone of a bill of attain-

der is punishment.” /bid. Thus, Foretich does nothing

to establish a conflict concerning the validity of precisely

focused legislation."

Second, petitioners contend (Pet. 24-28) that the

court of appeals’ decision conflicts with other decisions

that have examined whether equally effective but “less

burdensome alternatives” existed. Niron, 433 U.S. at

482; see SeaRiver, 309 F.3d at 677; Foretich, 351 F.3d at

1222. This Court has already established that such an

inquiry “is often useful” in answering the question

“whether a legislature sought to inflict punishment on

an individual,” Nixon, 433 U.S. at 482, but it has never

suggested that legislation is subject to a least-

restrictive-means test merely because the regulated

party finds it burdensome. A law 1s not a bill of attain-

der if it is not punitive, and here (as in Nixon and

SeaRiver) the law is not punitive. Moreover, the court

of appeals’ analysis explains why petitioners’ proffered

less burdensome alternatives would not in fact be

equally effective: in particular, ACORN’s complex

structure gave Congress a valid reason to include

ACORN's subsidiaries and affiliates in the restriction

* Inany event, narrow focus is more easily justified in the appropna-

tions context, as in this case: Congress often operates with great speci-

ficity when prescmbing how appropriated funds are to be spent, and

that specificity does not by itself reveal any punitive intent

19

alongside ACORN itself. Pet. App. 26a. Because the

means Congress chose were proportionate to its legiti-

mate ends, id. at 23a-29a, no further means-ends scru-

tiny was necessary.

4. This Court has not addressed whether the Bill of

Attainder Clause apphes to corporations. Cf. First Nat!

Bank v. Bellotti, 435 U.S. 765, 779 n.14 (1978) (“Certain

‘purely personal’ guarantees * * * are unavailable to

corporations and other organizations because the ‘his-

toric function’ of the particular guarantee has been lim-

ited to the protection of individuals.”) (quoting United

States v. White, 322 U.S. 694, 698-701 (1944)). Petition-

ers (which are corporations) therefore are mistaken in

their assertion that the way in which the court of ap-

peals has applied the Clause to corporations conflicts

with this Court's precedent.

The court of appeals agreed with petitioners that the

Bill of Attainder Clause protects corporations. See Pet.

App. 18a (citing Con Ed, 292 F.3d at 349). Petitioners

nevertheless ask the Court to consider whether the

Clause would apply to corporations in precisely the same

manner as to individuals in this suit. Answering that

question would require this Court to examine whether

the Clause applies to corporations at all." And neither

that larger question nor the secondary question that

petitioners present independently warrants review: the

courts of appeals generally agree that to the extent the

Clause protects corporations, “[t]here may well be ac-

tions that would be considered punitive if taken against

an individual, but not if taken against a corporation.”

Id. at 20a (quoting Con Ed, 292 F.3d at 354); accord

* There is a substantial historncal argument that it would not. See,

¢ g., 1 William Blackstone, Commentaries *464 (an aggregate corpora-

uon “is not liable * * * to attainder”).

20

BellSouth Corp., 162 F.3d at 683-684 (“{I]t is obvious

that there are differences between a corporation and an

individual under the law,” and therefore “any analogy

between prior cases that have involved individuals and

this case, which involves a corporation, must necessarily

take into account this difference.”).

In any event, there is no indication here that the Sec-

ond Circuit would have applied a different analysis if

petitioners were individuals with a history of misman-

agement who applied for discretionary federal grants

and contracts. Rather, the outcome of this case turned

on the legitimate purpose of the funding restriction.'°

5. Even if the question presented might warrant

review in an appropriate case, this is not such a case,

because in the posture of this case the resolution of that

question may well not matter, for several reasons,

a. As an initial matter, the petition is interlocutory.

Petitioners brought suit on three theories, but only one

was the basis for the decisions below. The court of ap-

peals’ decision returned the case to the district court for

further proceedings on petitioners’ First Amendment

and due process claims, Pet. App. 32a, which if success-

'® Petitioners’ reliance (Pet. 29) on this Court's junsprudence regurd-

ing corporation: First Amendment rights 1s mapposite. A corpora-

tion's protection against being debarred from government business for

refusing to support a political party or its candidates, see O'Hare Truck

Serv., Inc. v. City of Northlake, 518 U.S. 719 (1996), or to engage in

pohtca) speech, see Crtazens United v. FEC, 1305S, Ct. 876 (2010), 1s un-

related to Congress's authority to temporarily halt dwcretionary fed-

eral funds to an organization with a history of nusmanagement. Peti-

tioners have asserted no right to receive federal money, and their anal-

ogy to the lifetime employment bar held invalid by this Court in Lovett

makes no attempt to grapple with the distinctions inherent in the apph-

cation of the Bill of Attainder Clause to a corporation rather than to an

individual.

ra

ful would presumably yield the same result that petilion-

ers seek here. The district court has stayed those pro-

ceedings pending disposition of the petition for a writ of

certiorari. See p. 10, supra.

b. Indeed, while petitioners are litigeiing those

claims on remand, there is a significant possibility that

the case will become moot. Petitioners seck prospective

relief against legislation that is currently set to expire a

few months from now, on September 30, 2011, See p. 7,

supra; see also 2d Am. Compl. 37-39 (seeking only pro

spective rehef, costs, and attorney's fees). Although it

is possible that Congress might extend current law into

the next fiscal year or adopt another funding restriction

applicable to petitioners in some form, the adoption of

new legislation—which would come with a new legisla

Live record, potentially including information developed

in the ongoing GAO investigation, and which might have

a different secope—would not be sufficient to keep alive

petitioners’ arguments against the current legislation.

Because petitioners seek interlocutory review in a case

challenging a statute that may no longer be in force by

the time this Court convenes for its next Term, plenary

review is not appropriate at this time."

c. Petitioners’ own ability to press a justiciable con-

troversy is also uncertain. Two of the three petitioners,

ACORN and Acorn Institute, have filed for rehef under

Chapter 7 (“Liquidation”) of the Bankruptcy Code, }1

U.S.C. 701 et seq. See In re Acorn Inst., Inc., No. 10-

50362 (Bankr. E.D.N.Y. filed Nov. 2, 2010); Jn re Associ-

ation of Cmty. Orgs. for Reform Now, No. 10-50380

" If the case remains justiciable, petitioners would be able to seek

this Court's review after final judgment, even on questions finally deeid-

ed at this interlocutory stage. See,e.g., Major League Baseball Players

Ass'n v. Garvey, 532 U.S. 504, 608 (2001) (per curiam).