Samuel Alito. (Image via YouTube screengrab/The Heritage Foundation.)
Conservative Supreme Court Justice Samuel Alito has responded to a Democratic senator’s recent demand that he recuse himself from a wealth tax case, calling the lawmaker’s argument invalid.
In a written statement tacked on at the end of Friday’s order list, Alito said that he was writing publicly to respond to “concerns” because the case is “scheduled to be heard soon, and because of the attention my planned participation in this case has already received.”
Alito received that attention because of an interview he gave to the Wall Street Journal in which he was “willing to say” his “controversial view” that there is “[n]o provision in the Constitution gives [Congress] the authority to regulate the Supreme Court — period.” The comments were published days after Senate Judiciary Democrats pushed for ethics reforms up to legislation requiring the highest court in the land to “adopt a code of conduct,” “create a mechanism to investigate alleged violations of the code of conduct and other laws,” “improve disclosure and transparency when a Justice has a connection to a party or amicus before the Court, “and require Justices to explain their recusal decisions to the public.”
In August, Sen. Dick Durbin, an Illinois Democrat serving as the chairman of the Senate Judiciary Committee, sent a letter to Chief Justice John Roberts regarding the July 28th interview of Alito that was published in the opinion pages of the Wall Street Journal.
In that interview, Durbin said, Alito inappropriately opined on the “constitutionality of legislation under consideration by the U.S. Senate and agree[d] to sit for interviews conducted in part by an attorney with a case currently pending before the Court” — in violation of a “key tenet of the Statement on Ethics Principles and Practices (hereinafter Statement on Ethics) to which all Supreme Court Justices purport to subscribe as well as the Code of Conduct for U.S. Judges.”
As a result of Alito “creat[ing] an appearance of impropriety in the minds of reasonable members of the public,” Durbin said, Chief Justice Roberts was urged to “take appropriate steps to ensure that Justice Alito will recuse himself in any future cases concerning legislation that regulates the Court, as well as Moore v. United States.”
The Supreme Court decided to take up Charles G. Moore’s case on June 26, several months after the petition was filed in February.
The petition for a writ of certiorari posed one question: “Whether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states.”
The petition began by asserting that the U.S. Court of Appeals for the Ninth Circuit was wrong to uphold the Mandatory Repatriation Tax established by the Tax Cuts and Jobs Act, which was signed into law by former President Donald Trump in 2017.
“In 2017, the Tax Cuts and Jobs Act (TCJA) created a new, one-time tax: the Mandatory Repatriation Tax (MRT). Under the MRT’s modified version of Subpart F, U.S. persons owning at least 10% of a [controlled foreign corporation] CFC are taxed on the CFC’s profits after 1986, regardless of whether the CFC distributed earnings,” a Ninth Circuit summary of the case explained. “Additionally, going forward, a CFC’s income taxable under subpart F includes current earnings from its business.”
The court ultimately held that the “revised Subpart F is consistent with the Apportionment Clause” of the Sixteenth Amendment.
“The MRT is not a ‘wholly new tax’ because prior to the MRT, U.S. shareholders were taxed on CFC earnings when they were distributed,” the opinion said. “The Moores had reason to expect that such transactions would eventually be taxed.”
Moore’s lawyers said in their petition to the Supreme Court that their case “presents a question of exceptional importance concerning Congress’s taxing power” and the “‘novel’ new tax.”
“[T]he Ninth Circuit held for the first time ever that ‘realization of income is not a constitutional requirement’ for Congress to impose a tax exempt from apportionment under the Sixteenth Amendment,” the petition said. “On that basis, it concluded that ‘there is no constitutional prohibition against Congress attributing a corporation’s income pro-rata to its shareholders’ and then taxing them on it, as happened here.”
The petitioner maintained the ruling “shatters what had been an unbroken judicial consensus dating back to Eisner v. Macomber, 252 U.S. 189 (1920), that the Sixteenth Amendment’s exemption from apportionment is limited to taxes on realized gains.”
Sen. Durbin’s letter pointed out that one of the bylines on the Wall Street Journal article from July belonged to David Rivkin, “a partner at BakerHostetler LLP [who] is on the team representing plaintiff-appellants in the case Moore v. United States, whose dismissal at the district court level was affirmed by the Ninth Circuit.”
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“While this case has been pending before the Court, Justice Alito twice sat for interviews with Mr. Rivkin, once in April and again in July,” Durbin said. “Mr. Rivkin’s access to Justice Alito and efforts to help Justice Alito air his personal grievances could cast doubt on Justice Alito’’s ability to fairly discharge his duties in a case in which Mr. Rivkin represents one of the parties.”
Alito fired back Friday by saying there is “no valid reason for my recusal in this case,” as the Wall Street Journal interview was no different from the many interviews justices have conducted withe NPR, the New York Times, CBS, Fox News, National Review and ABC, even though those media entities have “frequently been parties in cases before the Court.”
“Similarly, many of my colleagues have been interviewed by attorneys who have also practiced in this Court, and some have co-authored books with such attorneys,” Alito wrote.
Calling Rivkin both a “much-published opinion-journalist and a practicing attorney,” Alito said there was nothing untoward or “out of the ordinary” about the interviews.
“When Mr. Rivkin participated in the interviews and co-authored the articles, he did so as a journalist, not an advocate. The case in which he is involved was never mentioned; nor did we discuss any issue in that case either directly or indirectly,” Alito wrote. “His involvement in the case was disclosed in the second article, and therefore readers could take that into account.”
The justice said that Durbin’s recusal argument is fundamentally “unsound” because his position, if taken to its logical extreme, could mean the Supreme Court is regularly short members on bench.
“Similarly, we regularly receive briefs filed by or on behalf of Members of Congress who have either supported or opposed our confirmations, or who have made either favorable or unfavorable comments about us or our work,” Alito continued. “We participate in cases in which one or more of the attorneys is a former law clerk, a former colleague, or an individual with whom we have long been acquainted. If we recused in such cases, we would regularly have less than a full bench, and the Court’s work would be substantially disrupted and distorted.”
Alito emphasized that it is the job of a justice to set aside personal connections and any “favorable or unfavorable comments” when decided cases “solely on the law and the facts.”
“For these reasons, there is no sound reason for my recusal in this case, and in accordance with the duty to sit, I decline to recuse,” Alito’s statement ended.
Durbin’s letter also mentioned that Rivkin is representing Leonard Leo, the co-Chairman of the Federalist Society, as the Senate Judiciary Committee investigates Leo’s “actions to facilitate gifts of free transportation and lodging that Justice Alito accepted from Paul Singer and Robin Arkley II in 2008.”
In June, Alito penned an op-ed in the Wall Street Journal to get out ahead of a judicial ethics-focused ProPublica story about the justice taking an undisclosed private jet flight to Alaska in 2008 paid for by Elliott Management hedge fund billionaire and GOP donor Paul Singer.
Singer, the chairman at the Manhattan Institute — an influential conservative policy think tank — and friend of the Federalist Society, went on to reap a $2.4 billion windfall when the Supreme Court in 2014 ruled 7-1 in favor of NML Capital, a subsidiary of Singer’s Elliot Management in the Foreign Sovereign Immunity Act case Republic of Argentina v. NML Capital.
Alito said the luxury fishing trip had no bearing on the outcome of the case and he rejected the notion that he should have recused himself.
“My recollection is that I have spoken to Mr. Singer on no more than a handful of occasions, all of which (with the exception of small talk during a fishing trip 15 years ago) consisted of brief and casual comments at events attended by large groups,” Alito wrote in the op-ed at the time. “On no occasion have we discussed the activities of his businesses, and we have never talked about any case or issue before the Court. On two occasions, he introduced me before I gave a speech—as have dozens of other people.”
Fellow conservative Justice Brett Kavanaugh said as recently as Thursday that he’s “hopeful that there will be some concrete steps taken soon” on Supreme Court ethics issues.
“To the extent that we can increase confidence, we are working on that,” Kavanaugh said.
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