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Small-fee case explodes: Minnesota justices direct judicial anger at Pawlenty and Legislature

At first glance, this looks like a pretty small deal. The Minnesota Supreme Court has added $100 to the annual fee paid by practicing lawyers to renew their licenses. This will raise roughly $2 million a year, which the court will then allocate to subsidize the operation of public defender offices around the state — which represent indigent defendants in criminal cases — and to further subsidize Legal Aid, which helps poor Minnesotans in civil cases.

No biggy, right? Most lawyers can afford an extra $2 a week for such good causes.

But if you read the Supreme Court order and accompanying documents, it's clear that this little order, which was adopted by just 4-3, is carrying a whole lot more baggage. Inside that baggage is judicial anger about the separation of powers, the threat to "liberty and justice for all" (it's in the Pledge of Allegiance, y'know), and justices who are royally pissed off at the governor and the Legislature for abdicating their responsibility to raise the taxes necessary to cover the spending they order, including spending that is required by the U.S. and Minnesota Constitutions.

The memorandum supporting the order, written by Chief Justice Eric Magnuson on behalf of three members of the court, says the fee increase is taken reluctantly and temporarily, almost apologetically, in the hope that it will last only two years, after which the other branches of government will do their jobs.

The two dissents representing three justices argue that the action is unconstitutional, insofar as it amounts to imposing a tax on lawyers, and it is the Legislature, not the Judicial branch, that is in charge of levying taxes.

But the most remarkable piece of the package is raucous, angry concurrence by Justice Paul Anderson. Anderson sides with Magnuson, which makes his the deciding vote in favor of the deal. The license fee is necessary for the maintenance of "a civilized society," Anderson says. But the price he exacts for his vote is a fierce lecture about how government ought to function. He ratifies the deal, then denounces it as necessitated by the "unfortunate impasse" between Gov. Tim Pawlenty and the DFL Legislature. But "unfortunate impasse" is pale language compared to what happens when Anderson gets warmed up.

If I fail to capture what is going on here, I encourage you to read the order, the concurrence and the dissents, but especially Anderson's concurrence, which is a very unusual judicial document. He denounces (not by name, but there is no mistaking it) the famous anti-tax conservative kingpin Grover Norquist, who once famously said that his goal is to shrink government down to the size at which he can drown it in a bathtub.

Anderson, whose political origins are moderate Republican (he got his judicial appointments from Republican Gov. Arne Carlson), has had it with the Norquist (and apparently Pawlenty) aversion to taxes. After paraphrasing Norquist's bathtub comment, the justice writes:

"The problem with this approach is that when you continuously put the government's head under water, it is not the government that drowns — real people drown. Floodwaters breach levees and people drown. Bridges collapse and people drown. I have little tolerance for this anti-government rhetoric given the adverse consequences that result to real people, especially the least advantaged among us, when this myopic approach to governing actually gets translated into policy. I believe that government does have a proper, even an essential role to play in creating and preserving a civilized society."

A little background

In the landmark 1963 ruling in Gideon v. Wainwright, the U.S. Supreme Court ruled that criminal defendants who cannot afford a lawyer must be provided one at public expense. In other words, maintaining a sufficient public defender operation is not optional; it is mandatory.

The vast majority of criminal defendants in Minnesota are poor enough to qualify and end up being represented by public defenders. During the budget squeeze of recent years, the public defenders office has been laying off lawyers while their caseloads and other expenses (health insurance anyone?) have been rising.To deal with the problem, public defenders stopped representing clients not absolutely entitled under Gideon to a public lawyer. For example, indigent parents whose custody of their children is threatened no longer get a public defender.

Over recent budget cycles, the public defender's office laid off more than 10 percent of its staff. The typical caseload of a public defender in Minnesota reached almost twice the proper caseload as recommended by the American Bar Association. In 2008, the public defender's office faced a $2.3 million deficit for the biennium. Then because of the state revenue shortfall (or, one could say, the political impossibility of new taxes to make up for the shortfall), the Legislature cut another $1.5 million from the public defender budget. During the 2009 legislative session, the committees responsible for funding the public defender office cut another $2 million, which State Public Defender John Stuart says would have led to another round of layoffs of almost 10 percent of the staff and more cases that the office simply couldn't handle in an adequate or timely fashion.

The legislators hit on the idea of asking the Supreme Court to raise that amount through a hike in the lawyers' licensing fee. The Legislature actually voted for, and the governor signed language authorizing the court to do this.

Well, as is clear from last week's ruling, the court didn't like the idea much. Magnuson (a Pawlenty appointee and close associate who publicly expressed his unhappiness over budget cuts imposed on the judicial branch in general) ordered the increase, writing that he did so reluctantly and hoping that it would only be necessary for one biennium. Magnuson took only three pages to explain his thinking.

Then Anderson spent 10 pages concurring, while explaining how much he hated the situation.  He pretty bluntly threatened that he would not vote for the deal after the current biennium:

"It is my hope that at the end of this two-year period, the Governor and Legislature will thoughtfully reexamine their respective positions, consider what it means to live in a civilized society and reflect upon the words 'and justice for all' in the Pledge of Allegiance. If they do such a reexamination, I hope they will, with the support of the people of Minnesota, provide adquate funding for Minnesota's public defenders."

That rhetoric comes from a justice who voted for the deal. Justice Alan Page, who dissented (joined by two other justices), argued that the deal is not just inadvisable but impermissible. For one reason:

"A 'fee' imposed solely to raise revenue to fund an obligation of the state is a tax, plain and simple."

Fee or tax?

This is, of course, reminiscent of Pawlenty's pyrotechnics of 2005 attempting to argue that the 75 cents a pack that the state imposed on a pack of cigarettes was not a tax but a "health impact fee." But that argument was merely political semantics, an effort by Pawlenty to square his advocacy of that revenue raiser with his pledge not to raise taxes. The fee/tax on lawyers is different. If Page is right that the $100-a-year lawyer charge is a tax, then it presents a different problem because the Supreme Court is not empowered to impose taxes. "Because it is a tax, we may not impose it," wrote Page.

Page further argued that funding the public defenders' function is an obligation on the whole state, not on a small segment of the population, namely, lawyers. On that point, while this may not affect Page's technical legal argument, it should be noted that the Minnesota Bar Association did adopt a resolution supporting the deal. So, if the MBA speaks for the state's lawyers, they have agreed to pay. It should also be noted that MinnCare, the state health plan for the poor, has relied on a fee/tax imposed on the state's physicians. Perhaps Page would distinguish the cases on grounds that the provision of medical care to the poor is not an "obligation of the state" in the sense that it is not required by the Constitution, whereas the provision of lawyers to the poor is constitutionally mandated.

The three justices who voted against the fee/tax deal make an interesting coalition. Page is perhaps the most liberal and only DFLer on the court. Justice Helen Meyer is a Ventura appointee and one of the court's moderates. She joined in Page's dissent. Justice Lorie Gildea is a recent Pawlenty appointee (she filed a separate dissent, simply stating that she agreed the court lacked the authority to make the deal, dissociating herself from the rest of Page's opinion).

Chief Public Defender Stuart is in the middle of all this. He agrees that this is no way to run an airline, but the court's order is actually and technically in response to a petition he filed asking them to do it. He remained philosophical as he spoke of the unusual tone of the rulings:

"To varying degrees, the justice all say this isn’t the way public defense ought to be paid for, and they’re right," Stuart said. "Certainly Justice Paul Anderson was pretty clear in calling out the governor on this. As a matter of theory, I agree with them all that this ought to be paid for out of general funds.

"But it would be very stressful to the operation of the court system to have us lose 30 more lawyer positions. The possibility of interminable delays in certain kinds of cases wouldn’t be good either. The way I look at it, the court did the best thing it could in a bad situation."

Stewart said the case in which he reluctantly became a player fits the pattern of recent years in Minnesota, where shrinking revenue and no-new-taxes creates a funding crisis for a vital government function, and the players look for creative "revenue enhancements." Eventually, he said, the "revenue enhancements get stretched too thin" and something will have to give.

"We’re just trying to provide good services to our clients and we can’t do it if we have to lay off a whole bunch of lawyers every year."

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Comments (24)

Minnesota state and local expenditures as of 2000: 35.4 billion. Same number as of 2009: 50.8 billion. That doesn't look like drowning much to me.

Well written story. But, I have some Shadenfreund for the Lawyers. I am in the car industry and every day I get to charge customers an extra $100 (min) for registration on vehicle purchases. I understand the point of the story to be the Judicial branch leving "taxes", but the court should have lobbied the Legislature harder.

The key issue, unspoken and not mentioned in this article, is "inherent judicial authority."

That's the trump card the court has, but is loathe to use. But it seems they are getting closer to that.

First, with public defender funding. And, finally, for the funding of the court system itself.

Fees, fees, fees. They have taken the place of taxes, and sometimes are much less fair. Not necessarily in this case, but a progressive income tax levied on all citizens with few loopholes would be the most logical way of funding our government. The wealthy do not like this kind of tax, so they have successfully lobbied since, about 1980, to change our tax system to a fee system. This system is now collapsing all around us. Perhaps people will now begin to understand - "Taxes are what we pay for civilized society . . . A penalty on the other hand is intended altogether to prevent the thing punished." Oliver Wendell Holmes, Jr.

Penalties and fees should not be the source of government funding. Civilized society should justly tax citizens to run our state.

Judicial anger? Not so much.

I read petty churlishness.

Peder DeFor:

Gross State Product in 2000: $186B
Gross State Product in 2009: $263B

Your state+local as a percent:
2000: 19%
2009: 19%

Note: I'm not questioning your numbers, but this would have to include all expenditures, some of which are done with money from the Feds. It is not based on a closed system.

Gross State Product takes into account population growth, inflation, and a host of other factors. While I think it's worth noting that we do not see a significant contraction, we also do not see an increase.

However, within that number we do see some areas where costs are rising significantly. Inflation on health care, for example has consistently outstripped growth in just about anything you can imagine. So the fact that it's relatively constant overall does not necessarily imply that there isn't a lot of pressure on some areas.

But it does suggest that arguments based on "drowning in the bathtub" are overstatement. I agree with you on that point.

Erik, agreed about the drowning. My quick math suggested about a 5% annual increase, maybe 6%. And you're right that there are things that are outstripping that percentage. I'd say that there is a pretty widespread political failure to actually grapple with those things.
Health care of course is a biggie and it will simply continue to get more expensive. That's the price of using the insurance model to cover cradle to grave health expenses. But there is no real movement to change that.
Another piece (which doesn't get enough attention) is pensions, especially public pensions. This problem will get bigger and bigger and no one has the will to tackle it either.
But hey, at least we're getting new signs out near the airport!

Two comments: First a minor correction. Justice Paul Anderson was appointed by Governor Carlson never by Governor Quie. The second is more substantive. Courts are wisely very reluctant to use their authority to order legislative bodies to adequately fund constitutionally mandated services but it does happen. California is now faced with a federal court mandating increased corrections spending and or the release of inmates. A generation ago this state was mandated to adequately fund mental health hospitals. If there is a looming deficit next bienium, what the opinion may suggest is a Supreme Court that may decide further cuts to the public defender system are unconstituional.

Thanks for the factcheck, Kevin Burke. I've fixed the post to remove the reference to Gov. Quie.

Eric,

Great article. Thanks for the fine reporting.

I am not certain what your intent was -- if your intent went beyond simply reporting an interesting story of conflict. I read the article as an essay about how elected officials have failed to do their jobs and the implications of this failure. And their failure goes unnoticed and unpunished by the electorate.

To me the saddest part of the bigger story is the success of Governor Pawlenty in positioning himself as someone who is fiscally responsible.

It seems to me that these judicial comments assume that raising taxes is the only answer.

What about realigning spending priorities, adequately funding (if they REALLY need it) the judicial system, and cutting other, lower priority budget items? I wonder if any of the judges even considered that.

I can't swallow "I need more -- you have to raise taxes" as the only proper response. But then, I'm not a judge.

"I have little tolerance for this anti-government rhetoric given the adverse consequences that result to real people" (part of Justice Anderson's quote above)

Justice Anderson says it well, and directly contradicts the selfishness of the Grover Norquists of the world.

If we really wanted ineffective, small government, Somalia seems to have that covered. One wonders how Mr. Norquist and his fans would enjoy the Somalian experience.

Superb Journalism - with a capital "J" -
Professor Hage would be proud.
Thank you.
Dave Porter

Chief Justice Eric Magnuson has been speaking about the issue of funding since January. It took some real stones to speak about it in this particular manner.

Chief Justice Magnuson has said that the 10 percent reduction would force the court system to cut 300-400 jobs, which would mean it would be unable to process hundreds of thousands of cases.

Minnesota's court system is not alone. Many state court budgets around the U.S. are in financial trouble including Florida, Arizona, and California.

John you are also correct in pointing out that you do not work in the judicial branch. But since you are a CPA you certainly have a unique perspective in that regard.

Similar to taxing lawyers to support our judicial system is the rumored increase in traffic arrests to support local police budgets. Perhaps now teachers will charge students to get their tests and grades returned to them before the end of the semester?

The Paul Anderson Republicans of the US have become, metaphorically, politically assassination victims by the Grover Norquist crowd. Witness the stepping down of moderate Republican Jim Ramstad. This is not just a California or Minnesota state problem, it is a national tragedy. I ran across a second Grover Norquist quotation: "We are trying to change the tones in the state capitals - and turn them toward bitter nastiness and partisanship." This attempt to wreck our country by these anarchists is reflected in the non-bi-partisan health care vote.

These jokers want to reverse the progressive decisions of the Warren Court, including, the Constitutional right to a court-appointed attorney] for those unable to afford one (Gideon v. Wainwright). Pawlenty is attempting to lead this pack of anarchists to power.

This is one of the times when I completely shoot all of my credentials as a DFLer and a Progressive. I'm proud to call myself both, but we have to be realistic about what's going on if we are, indeed, to have "Progress".

There are two issues in this article. The first is the issue whether the courts can be granted the authority to decide whether a fee that looks a lot like a tax can be raised. On this point, I tentatively agree with Justice Page on purely technical grounds.

The second issue is whether we are deliberately starving out state and local government in an ideological war. I find little evidence to support the idea that state plus local government is either expanding or contracting as a share at any significant rate. We can say, however:

1) The economy has been rather stagnant or in a contraction over the last decade

2) State+Local government, as a share of the economy, is about the same.

3) Funding sources for that government are shifting, relying less on state revenues that are more broadly consumption based and more on local property based revenue or money from the Feds.

4) Despite the relative stagnation overall, costs for some items are increasing faster than others - especially employee costs, most notably health care.

5) Increases in employee costs will fall most heavily on local government because, as the providers of essential services, employees are a much larger share of their relative budgets than the state.

What on earth does all this mean? It means that we are dealing with economic stagnation largely by finger pointing rather than digging into the reality of what's happening around us. The net result is that local governments have a tendency to be squeezed harder.

There is a strong Progressive case to be made that we have genuinely screwed up over the last decade by putting our essential services under pressure and increasing regressive taxes, but that point cannot be made by looking at broad, overall trends. If we are going to be serious about solving the problem, we have to first be serious about identifying it.

Stagnation is problem #1. If you all want to keep fighting like wild dogs over the last scrap of meat, go at it. Just don't think for a second this is "Progressive".

Eric, what a fine piece of work. This is a story that needs to be told. As a lawyer I am acutely aware of how these cuts are threatening our Judiciary. What people ignore is the fact that a fair Judicial system is absolutely necessary for a Democracy to function.

John I: The justices and the whole courts system endured Pawlenty's cuts for years until they could not save an additional penny by "realigning their priorities."

This IS a national problem. It is a selfish (I've got mine, the hell with you) so-called philosophy based in Ayn Rand and economists like Milton Friedman.

Articles like this should be appearing in the national press and the damage done by the anti-tax/anti-government crowd widely discussed by radio, TV and newspaper columnists. Else they will elect yet more governors, state legislators and members of Congress like Tim Pawlenty.

Grover Norquist, founder of Americans for Tax Reform (www.atr.org) says, "My ideal citizen is the self-employed, homeschooling, IRA-owning guy with a concealed-carry permit. Because that person doesn't need the goddamn government for anything."

Grover sees taxation as theft and opposes his Leave Us Alone movement to what he calls The Takings Coalition, which "consists of the Trial Lawyers, the corrupt Big City Machines, the Labor Union Bosses and the two wings of the Dependency Movement - those who remain trapped in dependency and those who make $80,000 a year managing the dependency of others and making sure they don't get jobs and become Republicans."

Erik Hare (#17) I read some time ago, Erik, that Pawlenty's tax cuts for Minnesota's wealthiest few reduced state revenues by $1 billion per year. That's a significant contribution to the "let's shrink government" goal of the anti-tax folks.

When Pawlenty seemed to waver in his commitment at times, Grover Norquist would call, write or visit to help him strenghen his resolve.

John Kline, Michele Bachmann, Erik Paulsen and former senator Norm Coleman are all signers of the Taxpayer Protection Pledge.

At the state level, in addition to Pawlenty and Carol Molnau, 15 state senators and 28 House members have all signed the pledge. You can recognize them by their rhetoric during floor debates.

Bernice,

I get it -- you don't like Pawlenty.

Perhaps in your next post you might address the substance of my comment?

An excellent article and, for the most part, an interesting discussion.

Although the extra $75 a year won't kill me, I have to agree with the dissent. Fees imposed for purposes other than the administration of the attorney licensing system and in aid of what are seen as insufficient legislative funding are taxes. Discussion of the aspirational goals of the Rule of Conduct have no bearing on that fact.

Our courts are under substantial pressure, as any attorney appearing in Minnesota's district courts knows full well. Some court administrators have curtailed hours, many judges are without the law clerk necessary to keep up with their case loads. Some judges now decline to hear non-dispositive pretrial motions. Decisions on dispositive motions often are delayed well beyond the 90 days provided for. Recent increases in district court filing fees are the product of these problems and funding limitations.

There are many potential ways to relieve the burden on the courts and, in this particular instance, on public defenders. But a $2 million patch is not going to solve the long term problem. It's time the legislature looked at the entire justice system (civil and criminal), identify those things we are legally and/or morally obligated to provide and take steps to ensure that these are available. No parent, for example, should lose custody of a child without adequate legal representation.

By the way, anybody, who is Grover Norquist? Has everyone heard of him but me?

TEMPORARY? Since when is Published Orders, re: Separation of Powers raising Revenue Temporary,
www.taxthemax.blogspot.com Chief Justice faces Election 2010,