BULLETIN
#23 Winter 1998
l TAFOL FILES
BRIEF IN
UNITED STATES SUPREME COURT
l TAFOL PROVIDES ASSISTANCE TO ARI
l SOLICITATION
#23 Winter
1998 Page 1
TAFOL FILES
BRIEF IN UNITED STATES SUPREME COURT
The Association for Objective Law has filed its first United States
Supreme Court brief. The case, Hon. Thomas R. Phillips v. Washington
Legal Foundation, is described in the last issue of this Bulletin.
It involves the Texas IOLTA (Interest on Lawyers' Trust Accounts)
program which requires that lawyers place certain of their clients'
funds in interest-bearing bank accounts, the interest from which
is used to provide legal services to low-income persons.
Plaintiffs challenged this program on three grounds: that the
program violated the constitutional prohibition against taking
property without just compensation, that it violated the clients'
right to exclude others from the use of the principal, and that
it violated their right not to support opinions with which they
disagree.
The district
court ruled for defendants on all claims, but the Court of Appeals
reversed. The Supreme Court agreed to review of
the Court of Appeals’ decision on the issue whether "interest
earned on client funds held by lawyers in IOLTA accounts [is] a
property interest of the client or lawyer, cognizable under the
Fifth Amendment of the United States
Constitution . . ."
Defendants, of course, argue for a negative answer. They contend
that IOLTA takes no property; without the program, they claim,
the clients could earn no interest on the small amounts of money
available. This statement is false but, to anyone who takes rights
seriously, unimportant. In the context of the case, however, it
had to be answered.
Plaintiffs
took on this task. Their analysis begins with a discussion of
interest in general, emphasizing the criticisms and justifications
of it. Aristotle believed that, because of the sterility of money,
charging interest for a loan was unnatural. Aristotle was
followed by the Scholastics in the thirteenth century. Under
their influence, charging interest was made illegal. By the late
Middle Ages, however, numerous exceptions to the prohibition
were recognized. Eventually, interest came to be viewed as compensation
for the temporary loss of use of one's money. Finally, it was justified
as a substitute for alternate ways the lender could have invested
the principal. This was incorporated into the definition: "Interest
is the compensation allowed by law, or fixed by the parties, for
the use or forbearance of money or as damages
#23 Winter
1998 Page 2
for its detention." From this, it follows that interest necessarily
belongs to the lender. (In the words of an English court, "Interest
shall follow the principal, as the shadow the body.") The
brief points out that courts, from the English common law through
the present, have universally recognized this conclusion. Thus,
the program takes the clients' property. TAFOL's brief
takes a related but different approach. It concentrates on the
moral
right of the owners of money to complete control over
their property. It begins by describing IOLTA's intrusion on its
victims: the taking of the client's property and the conscription
of lawyers and banks in the theft. It goes on to identify the ethical
premise of the IOLTA program: that man has an obligation to serve
others. It contrasts this premise with the ethics of self-interest
and its political consequence: limited government. Essential to
the implementation of this form of government, the brief continues,
is the right to property: "To the extent a man is forced to
let someone else use his belongings, he is not free."
The brief
then lists seven illustrations of this statement, each taken
from the facts
of a previous Supreme Court case. It continues: "Each
of these examples illustrate the fact that control over physical
objects---the right to exclude others from one's property---is
the essence of property rights. In each case, this Court was
asked to protect an intellectual or abstract right. (Sometimes
the request was successful, sometimes not.) In fact, each of these
claims was a demand for undisturbed control over property. This
control is necessary for the free exercise of any human activity:
Just as man can't exist without his body, so no rights can exist
without the right
to translate one's rights into reality---to think,
to work and to keep the results---
which means: the right of property.
. . . Only a ghost can exist without material
property, only a
slave can work with no right to the product of his effort. . .
.
The source of property rights is the law of causality. All property
and all forms
of wealth are produced by man's mind and labor. As
you cannot have
effects without causes,
so you cannot have wealth without its source:
without intelligence.
This passage from Atlas
Shrugged introduces a series of
quotations from John Locke, William Blackstone's Commentaries on
the Laws of England, John Adams, a 1797 North Carolina Supreme
Court case, Joseph Story (a distinguished early member of the
Supreme Court), and Abraham Lincoln. Each of these quotations
supports property rights. They show that the right of property
is one of the foundations of the United States. Finally, they
are summarized in a single statement of Ayn Rand: "Without
property rights, no other rights are possible."
The brief
concludes: "In
the past, this Court disapproved of depredations of the government
upon property:
To lay with
one hand the power of the government on the property of the citizen,
and
with the other to bestow it upon favored individuals
to aid private enterprises
and build up private fortunes, is none
the less a robbery because it is done
under the forms of law and
is called taxation. [Citing an 1874 case, Citizens'
Savings & Loan
Association v. Topeka]
"The
Court should return to this approach . . . the judgment of the
Court of Appeals
should be affirmed."
The brief
was written by Steve Plafker with assistance from Tom Bowden,
Michael Mazzone, Mark Nitikman, and Dee Tagliavia. A copy
will be sent to TAFOL contributors of $50 or more (see below).
[no longer available]
#23 Winter
1998 Page 3
TAFOL received
requests for copies of the brief from Congressional Quarterly
and from National Public Radio.
TAFOL PROVIDES ASSISTANCE TO ARI
From time to time, The Ayn Rand Institute asks TAFOL to provide
it with legal assistance. TAFOL in turn refers ARI to an appropriate
lawyer. We are compiling a list of lawyers who are willing to provide
help. For this purpose, we request the name, address, phone number,
fax number, e-mail address, bar admissions, and areas of specialization
of any attorney who is interested in helping ARI with its legal
needs. This information should be sent to Michael v. Conger [address
omitted].
SOLICITATION
In the past
years, TAFOL has filed several amicus curiae briefs, written
position papers on mandatory pro bono and abortion,
onducted informal classes at Objectivist conferences, and
sponsored writing contests for law students. These activities
require money. Last year's writing contest cost $1,300 in prizes
and printing and mailing costs. Preparation of the IOLTA brief
described above cost $1,000. (This does not include the money TAFOL
spent supporting Michael Mazzone's efforts.) The printing and mailing
this Bulletin averages about $200.
The cost of the IOLTA brief depleted our treasury. Recent contributions
have restored it to some extent. We are seeking further contributions
so that we can continue our work. Each contributor of at least
$50 will receive a copy of our brief. [no longer available]
__________________________________
Copyright © 1998
The Association for Objective Law. All rights reserved. The Association
for Objective Law is a Missouri non-profit
corporation whose purpose is to advance Objectivism, the philosophy
of Ayn Rand, as the basis of a proper legal system.
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