Seattle’s $15 minimum-wage law has received plenty of attention from those on both sides of the issue. What has received less attention is the way in which this ordinance distinguishes between businesses—and discriminates against interstate commerce.

The ordinance separates employers into two categories, those with 500 or more employees (Schedule One) and those with fewer (Schedule Two), and mandates that the first category implement wage increases more quickly than the second. But the law creates a special rule for Seattle franchises, placing them into the first category if the total number of employees in the franchise network is 500 or more.

A group of franchise owners, led by the International Franchise Association, challenged the ordinance, to no success in the lower courts. Cato is now supporting their petition to the Supreme Court. Seattle insists that this categorization is neutral as between in-state and interstate commerce, because a franchise network could be entirely within Washington. The reality is that all Seattle franchises that are in Schedule One have either an out-of-state franchisor or are associated with out-of-state franchises of the same brand. The law thus discriminates against interstate commerce in precisely the way the Commerce Clause was intended to prevent.

When the delegates met in Philadelphia in 1787 to revise the Articles of Confederation, one of their main concerns was the protectionism the states exhibited under the Articles. As James Madison said at the time, “Most of our political evils may be traced to our commercial ones.” The Constitutional Convention debated many things between May and September 1787, but there seems to have been general agreement that the new Constitution would give Congress power to regulate—“make regular”—interstate commerce.

Although today’s federal government has far exceeded the positive Commerce Clause power the Framers intended to give it—in terms of federal programs and regulations—the principle that states and local governments may not enact laws that discriminate against interstate commerce dates back to Chief Justice Marshall’s opinion in Gibbons v. Ogden (1824), and indeed all the way to the animating purpose of the Convention. That principle—known as the negative or Dormant Commerce Clause—applies both when Congress has passed legislation in the area and when it hasn’t. See Case of the State Freight Tax (1873).

One scholar has remarked that, under the Articles, the states were “marvelously ingenious” at designing protectionist measures. Seattle’s franchise categorization is just one such measure, which discriminates against interstate commerce in a subtler way than most of the protectionism that courts have considered.

While arguing that its law is constitutional, Seattle points to the fact that the burden of the law will fall on in-state actors (the Seattle franchises). Where the burden falls, however, is irrelevant to whether a law discriminates against interstate commerce. Just last term, in Comptroller of the Treasury of Maryland v. Wynne, the Supreme Court held that Maryland’s income tax scheme violated the Commerce Clause by taxing residents on income they earned out-of-state—even though, by definition, the burden of the income tax law fell on Maryland residents. Seattle’s franchise categorization also violates the Dormant Commerce Clause’s extraterritoriality principle because it makes the wage burden placed on Seattle franchisees dependent on the hiring decisions of independent (and most likely unknown) franchises in other states.

The Supreme Court should take up International Franchise Association v. City of Seattle and consider not the economic wisdom of minimum-wage requirements generally but the effect of this particular law on interstate commerce.

For the last 20 years, Ohio has had its own kind of “Ministry of Truth,” otherwise known as the Ohio Elections Commission (OEC). Anyone who claimed that someone – typically a political opponent – was lying to advance or defeat a politician could file a complaint such that a panel of bureaucrats would determine the “truth.”

What will go down as the abuse of the “political statement law” was in 2010 when Rep. Steven Driehaus complained that a pro-life advocacy group accused him of supporting “taxpayer-funded abortions” by voting for the Affordable Care Act. The OEC determined that there was probable cause that the statement was false. The ruling was widely publicized in the media less than a month before the election. Then discovery started on the formal prosecution, requiring disclosure of all of the targeted group’s communications with allied organizations, political parties, and members of Congress.

Imagine just the time and money required to respond to this kind of complaint in the last month before an election – not to mention the PR fallout – such that the damage is done regardless of the result of the legal process. Accordingly, Susan B. Anthony List brought a lawsuit challenging the Ohio law (a version of which existed in about a dozen states). But after the election, Driehaus withdrew his complaint, the prosecution was shuttered, and so the OEC claimed that no harm was ultimately done and so the lawsuit had to be dismissed as moot. 

The Cato Institute filed an amicus brief before the Supreme Court mocking the absurdity of the law, joined by America’s leading political satirist P.J. O’Rourke (also an H.L. Mencken Research Fellow at Cato). Using humor to illustrate absurdity, we showed the silliness (and danger) of allowing potential criminal penalties for “false” statements like “Read my lips: no new taxes!” or “If you like your healthcare plan, you can keep it.” The brief generated a great response, so much so that it was reprinted in Politico and the Pennsylvania Journal of Constitutional Law, and The Green Bag gave it one of its “Exemplary Legal Writing” honors for 2014. Ultimately, the Supreme Court unanimously held that the statute could indeed be challenged.

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The RAND Corporation has published the second report in its “Strategic Rethink” series, this one entitled “America’s Security Deficit: Addressing the Imbalance between Strategy and Resources in a Turbulent World.” It is a noble undertaking, conducted by well-respected scholars and analysts. But I’m not particularly optimistic that conditions are ripe for the strategic rethink that they seek, and that the country desperately needs.

The strategy-resources gap should be corrected by adopting a new strategy, one that pares down the United States’ permanent overseas presence, and compels other countries to take on more responsibilities for their own defense (as Japan shows signs of doing). Instead, U.S. policymakers seem willing to undertake merely incremental changes at the margins, retaining U.S. primacy, and trying to cover the strategy-resources gap with wishful thinking and unrealistic assumptions.

RAND’s summary of the report explains “currently projected levels of defense spending are insufficient to meet the demands of an ambitious national security strategy.” And its Key Finding reads as follows:

Limitations on defense spending in the context of emerging threats are creating a “security deficit.”

• Fielding military capabilities sufficient, in conjunction with those of our allies and partners, to deal with the disparate challenges faced by the United States will require substantial and sustained investments in a wide range of programs and initiatives well beyond what would be feasible under the terms of the Budget Control Act.

Advocates for higher military spending have been saying this since the BCA was first passed. Those who also claim to care about the nation’s persistent fiscal imbalance typically note that the Pentagon’s budget is not the primary driver of the nation’s debt, and they would focus, first, on so-called mandatory spending (Social Security, Medicare, and Medicaid) which accounts for a far higher share of total federal expenditures, in order to find the additional money needed to close the security gap.

They are correct on the first point, the need to reform entitlements, but not on the need for more military spending.

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