Wisconsin Court Upholds Anti-Union Law, Microsoft Loses Foreign Data Challenge, Obamacare Opponents Seek SCOTUS Review
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UPDATED: Aug 1, 2014
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This week Wisconsin’s Supreme Court upheld the state’s controversial anti-union legislation, Microsoft lost a legal challenge to the government’s right to obtain data held in foreign servers, and the losers in last week’s Obamacare decision filed a Supreme Court appeal.
Wisconsin Supreme Court Uphold Anti-Union Legislation
Wisconsin’s highest court struck down a legal challenge against the state’s controversial collective-bargaining rights legislation, finding instead that Governor Scott Walker’s marquee legislation limiting the rights of public sector unions is constitutional. In 2011, Governor Walker and the Republican controlled Wisconsin legislature took public unions to task by passing Act 10, a wide-sweeping law that limited collective bargaining to negotiations over wages only, forced public sector union members to contribute higher percentages to pensions and healthcare plans, and prevented unions from forcing non-members to pay union dues. The polarizing legislation was lauded by conservatives across the country, but faced legal challenge for allegedly violating rights to equal protection and free association.
In 2012 a lower Wisconsin court struck down key provisions of the law, leaving the final decision on Act 10 in the hands of the Wisconsin Supreme Court. Reversing the 2012 lower court decision, Wisconsin’s high court determined that Act 10 withstood constitutional scrutiny despite its aggressive approach to dealing with public-sector unions. In a 5-2 split decision, Wisconsin’s predominantly conservative Supreme Court held that legal challenges failed because collective-bargaining authority is not a right protected by the state’s constitution.
The decision seems to be the end of the road for challengers opposed to Act 10. With public-sector union membership dropping by as much as 50% across the state, teacher and government employee labor organizations have lost steam and were counting on the Wisconsin Supreme Court as the final opportunity to strike down the law. While Governor Scott Walker, who championed the law in 2011, is a tight race to retain his seat against Democrat Mary Burke, it is unlikely that Act 10 will be repealed by the state’s Republican controlled legislation. With the anti-union legislation surviving its final legal challenge, other conservatively controlled states may be more willing to take up the banner and take on public-sector unions across the country.
Microsoft Must Submit Data Stored in Foreign Servers
This week a federal judge in New York determined that Microsoft must comply with a government search warrant requiring the company turn over customer’s e-mail communications that are stored in overseas’ data servers. The case comes to federal court after Microsoft challenged a governmental warrant for e-mails in connection with a drug-trafficking probe that are currently stored in the company’s data server in Ireland. Microsoft claims that the government has no claim to data stored outside the US, but Judge Loretta Preska disagreed and affirmed the authority of the government’s warrant.
The Department of Justice argued that it should be allowed to reach across US borders for evidence in criminal cases without being forced to involve foreign governments – a requirement that could both delay police investigations and raise thorny diplomatic questions over US jurisdiction. American tech companies, the government claimed, are subject to US law regardless of where data is stored, and, as such, must turn over business records no matter what country the e-mails are in. Microsoft countered that customer e-mails are not business communications owned by the company, but instead are customer property protected from government eyes under rights of privacy. After a spirited debate, Judge Preska upheld lower court rulings in the case and determined that customer e-mails on Microsoft servers are not private property, but instead are business records. As such, Microsoft, and other American tech companies, can be compelled by warrant to turn e-mail, and other electronically stored information, over to police or government officials even if the data is stored in servers abroad.
Critics of the decision point out that the 1986 Electronic Communications Privacy Act (ECPA), which gives the government authority to request business records, is silent on whether search warrants for digital content are valid abroad. Judge Preska determined that Congress implicitly authorized the reach overseas when passing the ECPA, raising the ire of textualists who believe that Congress would have specifically authorized extra-territorial warrants if it intended the ECPA to span America’s borders. Microsoft has announced its intent to appeal the decision, leaving the case in the hands of the Court of Appeals for the Second Circuit.
Obamacare Opponents Seek Supreme Court Appeal
Virginia residents who oppose the authority of the IRS to offer tax subsidies under the Affordable Care Act (ACA) for federally managed insurance exchanges suffered a loss in last week’s King v Burwell 4th Circuit Court of Appeals decision – one of two federal courts to come to the opposite conclusion on the issue. The debate, which centers on whether Congress intended to allow the IRS to offer subsidies for insurance sold on federal exchanges despite not explicitly saying so, is critical to the survival of Obamacare because 36 states have refused to establish local exchanges, leaving a federal exchange the only option for many Americans.
With the DC Court of Appeals rejecting the IRS authority in Halbig v Burwell the losers in King are appealing to the Supreme Court to settle the matter once and for all. Subsidy opponents are bypassing the option of having the 4th Circuit Court reconsider its ruling, choosing instead to fast-track the important legal decision to the Supreme Court.