Sunday, November 29, 2020
Invalid warrantless arrest under Rule 113, Rules of Criminal Procedure; inadmissibility of evidence illegally seized.
PEOPLE OF THE PHILIPPINES, appellee, vs. RAFAEL OLIVARES, JR. and DANILO ARELLANO, appellants. G.R. No. 77865, December 4, 1998
Invalid warrantless arrest under Rule 113, Rules of Criminal Procedure; inadmissibility of evidence illegally seized.
“x x x.
In this case, there were no eyewitnesses to the killing and robbery and; thus, no direct evidence points to appellants criminal liability. The prosecution's principal evidence against them is based solely on the testimony of the police officers who arrested, investigated and subsequently took their confession. Such evidence when juxtaposed with appellants' constitutional rights concerning arrests and the taking of confessions leads to a conclusion that they cannot he held liable for the offense charged despite the inherent weakness of their defenses of denial and alibi, not because they are not guilty but because the evidence adduced against them are inadmissible to sustain a criminal conviction.
First, appellants were arrested without a valid warrant of arrest and their arrest cannot even be justified under any of the recognized exceptions for a valid warrantless arrest mentioned in Section 6, (now section 5) Rule 113 of the Rules on Criminal Procedure, which prior to its amendment in 1998 provides:
Arrest without warrant; when lawful. — A peace officer or private person may, without a warrant, arrest a person:
a) when the person to be arrested has committed, is actually committing, or is about to commit an offense in his presence;
b) when the offense has in fact been committed, and he has reasonable ground to believe that the person to be arrested has committed it;
c) when the person to be arrested is a prisoner who has escaped from a penal establishment or/place where he is serving final judgment or temporarily confined while his case is pending, or has escaped while being transferred from one confinement to another.
None of the foregoing exceptions for a valid warrantless arrest concurs herein. At the time appellants were apprehended, two days had already lapsed after the discovery of the crime — they were not doing nor had just done any criminal act. Neither were they caught in flagrante delicto or had escaped from confinement. Probably aware of the illegality of the arrest they made the arresting officers testified that appellants were merely invited to the police precinct. Such invitation, however when construed in the light of the circumstances is actually in the nature of an arrest designed for the purpose of conducting an interrogation.16 Mere invitation is covered by the proscription on a warrantless arrest because it is intended for no other reason than to conduct an investigation. Thus, pursuant to Section 4(2), Article IV of the 1973 Constitution which was in effect at that time, "any evidence" obtained in violation of their right under Section 3, Article IV (pertaining to invalid warrantless arrests)17 "shall be inadmissible for any purpose in any proceeding."18 By virtue of said constitutional protection any evidence obtained, including all the things and properties alleged to be stolen by appellants which were taken by the police from the place of the illegal arrest cannot be used as evidence for their conviction. In the same manner, all the products of those illegal arrest cannot be utilized to sustain any civil liability that they may have incurred by reason of their acts. This is the clear mandate of the Constitution when it provides that those illegally obtained evidence being "the fruits of the poisonous tree" are "inadmissible for any purpose in any proceeding". The foregoing constitutional protection on the inadmissibility of evidence (which are the product of an illegal search and arrest) known as the eclusionary rule, applies not only to criminal cases but even extends to civil, administrative and any other form of proceedings. No distinction is made by the Constitution; this Court ought not to distinguish.
X x x.”
Robbery with homicide - Article 294 of the Revised Penal Code (RPC)
PEOPLE OF THE PHILIPPINES, appellee, vs. RAFAEL OLIVARES, JR. and DANILO ARELLANO, appellants. G.R. No. 77865, December 4, 1998
Robbery with homicide - Article 294 of the Revised Penal Code (RPC)
“x x x.
Initially, the categorization by the prosecution of the crime of robbery with double homicide is erroneous because the word "homicide" in Article 294 of the Revised Penal Code (RPC) should be taken in its generic sense,11 absorbing not only acts which results in death (such as murder) but also all other acts producing anything short of death (such as physical injuries) committed during the robbery.12 and regardless of the multiplicity of the victim which is only considered as an aggravating circumstances.13 The indictable offense is still the complex crime of robbery with homicide (which is its proper nomenclature), the essential elements of which are:
a.) the taking of personal property with the use of violence or intimidation against a person;
b.) the property thus taken belongs to another;
c.) the taking is characterized by intent to gain or animus lucrandi;
d.) on the occasion of the robbery or by reason thereof, the crime of homicide which is therein used in a generic sense, was committed. 14
x x x.”
Inadmissible extrajudicial confession
PEOPLE OF THE PHILIPPINES, appellee, vs. RAFAEL OLIVARES, JR. and DANILO ARELLANO, appellants. G.R. No. 77865, December 4, 1998
Inadmissible extrajudicial confession
“x x x.
Even assuming arguendo that by entering a plea without first questioning the legality of their arrest, appellants are deemed to have waived any ojection concerning their arrest19 yet the extrajudicial confession of appellant Olivares, Jr. on which the prosecution relies, is likewise inadmissible in evidence. Under the Constitution, any person under investigation for the commission of an offense shall have the right, among other to have a counsel,20 which right can be validly waived. In this case, the said confession was obtained during custodial investigation but the confessant was not assisted by counsel. His manifestation to the investigating officer that he did not need the assistance of counsel does not constitute a valid waiver of his right within the contemplation of our criminal justice system. This notwithstanding the fact that the 1973 Constitution does not state that a waiver of the right to counsel to be valid must be made with the assistance or in the presence of counsel. Although this requisite concerning the presence of counsel before a waiver of the right to counsel can be validly made is enshrined only in the 1987 Constitution, which further requires that the waiver must also be in writing,21 yet jurisprudence is replete even during the time of appellants arrest where it has been categorically ruled that a waiver of the constitutional right to counsel shall not be valid when the same is made without the presence or assistance of counsel.22 Consequently, the valid waiver of the right to counsel during custodial investigation makes the uncounselled confession, whether verbal or non-verbal,23 obtained in violation thereof as also "inadmissible in evidence"24 under Section 20, Article IV of the 1973 Constitution25 which provides:
. . . . Any person under investigation for the commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used aginst him. Any confession obtained in violation of this section shall be inadmissible in evidence. (emphasis supplied).
Under the present laws, a confession to be admissible must be:26
1.) express and categorical;27
2.) given voluntarily,28 and intelligently where the accused realizes the legal significance of his act;29
3.) with assistance of competent and independent counsel;30
4.) in writing; and in the language known to and understood by the confessant;31 and
5 signed, or if the confessant does not know how to read and write thumbmarked by him.32
In this case, the absence of the third requisite above makes the confession inadmissible. The purpose of providing counsel to a person under custodial investigation is to curb the uncivilized practice of extracting confession even by the slightest coercion33 as would lead the accused to admit something false.34 What is sought to be avoided is the "evil of extorting from the very mouth of the person undergoing interrogation for the commission of an offense, the very evidence with which to prosecute and thereafter convict him.35 These constitutional guarantees have been made available to protect him from the inherently coercive psychological, if not physical atmosphere of such investigation.36 In any case, said extrajudicial confession of one accused may not be utilized against a co-accused unless they are repeated in open court or when there is an opportunity to cross-examine the other on his extrajudicial statements. It is considered hearsay as against said accused under the rule on res enter alios acta, which ordains that the rights of a party cannot be prejudiced by an act, declaration, or omission of another.37
Aware of the abuses committed by some investigating and police agencies on a criminal suspect to get leadings confessions, information and evidence just so they can claim to have speedily resolved a crime and fulfilled their duty, all at the expense of the basic human rights guaranteed by the Constitution the Court cannot turn a blind eye by disregarding the constitutional rights accorded to every accused and tolerate official abuse. The presumption that a public officer had regularly performed his official duty,38 which is only a matter of procedure, cannot prevail over the presumption of innocence stated in the highest law of the land — the Constitution. As a contract between and among the people, the provisions of the Constitution cannot just be taken lightly.
X x x.”
Circumstantial evidence; when sufficient to convict accused.
PEOPLE OF THE PHILIPPINES, appellee, vs. RAFAEL OLIVARES, JR. and DANILO ARELLANO, appellants. G.R. No. 77865, December 4, 1998
Circumstantial evidence; when sufficient to convict accused.
“x x x.
With the inadmissibility of the material circumstancial evidence which were premised on the likewise extrajudicial confession upon which both the prosecution and the lower court relied to sustain appellants' conviction the remaining circumstances cannot produce a logical conclusion to establish their guilt. In order to sustain a conviction based on circumstancial evidence, it is necessary that the same satisfies the following elements:
1. there is more than one circumstances;
2. the facts from which the inferences are derived are proven; and
3. the combination of all the circumstances is such as to produce a conviction beyond reasonable doubt.39
Simply put for circumstancial evidence to be sufficient to support a conviction, all circumstances must be consistent with each other, consistent with the hypothesis that the accused is guilty, and at the same time incosistent with the hypothesis that he is innocent and with every other rational hypothesis except that of guilt.40
X x x.
X x x (S)ome of the circumstancial evidence relied upon by the trial court were, at the risk of being repetitive, based on the inadmissible extrajudicial confession. The facts which became known only by virtue of the extrajudicial confession pertains to how the victims were killed, how appellants gained entrance into the premises, and how the alleged stolen properties were found in the house where one of them was arrested. Without the foregoing facts a combination of the remainder of the circumstancial evidence cannot sustain a conviction beyond the shadow of reasonable doubt: hence, the absence of the third requisite. Forthwith the prosecution failed to discharge its burden of proof and consequently to rebut with the required quantum of evidence42 the presumption of innocence43 fundamentally enjoyed by both appellants. For it is a basic evidentiary rule in criminal law that the prosecution has the onus probandi of establishing the guilt of the accused. El incumbit probatio non qui negat. He who asserts — not he who denies — must prove. Likewise, it is settled that conviction must rest not on the weakness of the defense but on the strength of the prosecution.44 Accordingly, circumstancial evidence with has not been adequately established cannot, by itself, be the basis of conviction.45
x x x.”
PAO; negligence as counsel – “The PAO, as the duly designated government agency to represent and render legal services to pauper litigants who cannot hire their own counsel, should have exerted more effort on this case.”
PEOPLE OF THE PHILIPPINES, appellee, vs. RAFAEL OLIVARES, JR. and DANILO ARELLANO, appellants. G.R. No. 77865, December 4, 1998
PAO; negligence as counsel – “The PAO, as the duly designated government agency to represent and render legal services to pauper litigants who cannot hire their own counsel, should have exerted more effort on this case.”
“x x x.
Upon a thorough review of the records of the case, appellants' conviction cannot stand for reasons which were not discussed or even mentioned by appellants' appointed counsel. The PAO, as the duly designated government agency to represent and render legal services to pauper litigants who cannot hire their own counsel, should have exerted more effort on this case. Its pleadings filed before this court could hardly be considered as the product of an advocate who has the responsibility to serve his client with competence and diligence. 10 The preparation of his case is a duty the lawyer owes not only to his client whose property, money and above all life and liberty he is bound to protect. It is also a duty he owes to himself, to his own integrity and self-respect at the bar. Nonetheless, the Court is not powerless to address and consider unassigned issues and relevant facts and law that may affect the merits and justifiable disposition of the case.
X x x.”
Kidnapping; proper penalty; damages awarded.
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. JERRY PEPINO y RUERAS and PRECIOSA GOMEZ y CAMPOS, Accused-Appellants. EN BANC, G.R. No. 174471, January 12, 2016.
Kidnapping; proper penalty; damages awarded.
“x x x.
The Proper Penalty:
Article 267 of the Revised Penal Code, as amended, mandates the imposition of the death penalty when the kidnapping or detention is committed for the purpose of extorting ransom from the victim or any other person. Ransom, as employed in the Jaw, is so used in its common or ordinary sense; meaning, a sum of money or other thing of value, price, or consideration paid or demanded for redemption of a kidnapped or detained person, a payment that releases one from captivity.53
In the present case, the malefactors not only demanded but received ransom for Edward's release. The CA thus correctly affirmed the RTC's imposition of the death penalty on Pepino and Gomez.
With the passage of Republic Act No. 9346, entitled ''An Act Prohibiting the Imposition of Death Penalty in the Philippines" (signed into law on June 24, 2006), the death penalty may no longer be imposed. We thus sentence Gomez to the penalty of reclusion perpetua without eligibility for parole pursuant to A.M. No. 15-08-02-SC.54
The reduced penalty shall likewise apply to the non-appealing party, Pepino, since it is more favorable to him.
The Awarded Indemnities:
In the case of People v. Gambao55 (also for kidnapping for ransom), the Court set the minimum indemnity and damages where facts warranted the imposition of the death penalty if not for prohibition thereof by R.A. No. 9346, as follows: (1) Pl00,000.00 as civil indemnity; (2) Pl00,000.00 as moral damages which the victim is assumed to have suffered and thus needs no proof; and (3) Pl00,000.00 as exemplary damages to set an example for the public good. These amounts shall earn interest at the rate of six percent (6%) per annum from the date of the finality of the Court's Resolution until fully paid.
We thus reduce the moral damages imposed by the CA from P300,000.00 to Pl00,000.00 to conform to prevailing jurisprudence on kidnapping cases. This reduced penalty shall apply to Pepino for being more favorable to him. However, the additional monetary award (i.e., P100,000.00 civil indemnity) imposed on Gomez shall not be applied to Pepino.56
We affirm the P700,000.00 imposed by the courts below as restitution of the amount of ransom demanded and received by the kidnappers. We also affirm the CA's award of Pl00,000.00 as exemplary damages based on Gambao.
X x x.”
Conspiracy - Proof of the agreement does not need to rest on direct evidence, as the agreement may be inferred from the conduct of the parties indicating a common understanding among them with respect to the commission of the offense. Corollarily, it is not necessary to show that two or more persons met together and entered into an explicit agreement setting out the details of an unlawful scheme or the details by which an illegal objective is to be carried out.
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. JERRY PEPINO y RUERAS and PRECIOSA GOMEZ y CAMPOS, Accused-Appellants. EN BANC, G.R. No. 174471, January 12, 2016.
"x x x.
d. The Presence of Conspiracy
Conspiracy exists when two or more persons come to an agreement concerning the commission of a crime and decide to commit it. It may be proved by direct or circumstantial evidence consisting of acts, words, or conduct of the alleged conspirators before, during and after the commission of the felony to achieve a common design or purpose.
Proof of the agreement does not need to rest on direct evidence, as the agreement may be inferred from the conduct of the parties indicating a common understanding among them with respect to the commission of the offense. Corollarily, it is not necessary to show that two or more persons met together and entered into an explicit agreement setting out the details of an unlawful scheme or the details by which an illegal objective is to be carried out.52
In the present case, the records establish the following facts: Pepino, Gomez, and another man entered Edward's office, and initially pretended to be customers; the three told Edward that they were going to pay, but Pepino pulled out a gun. After Pepino' s companion took the money from the cashier's box, the malefactors handcuffed him and forced him to go down to the parked car; Gomez sat at the front passenger seat of the car which brought Edward to a safe house in Quezon City; the abductors removed the tape from Edward's eyes, placed him in a room, and then chained his legs upon arrival at the safe house; the abductors negotiated with Edward's family who eventually agreed to a P700,000.00 ransom to be delivered by the family driver using Edward's own car; and after four days, three men and Gomez blindfolded Edward, made him board a car, drove around for 30 minutes, and left him inside his own car at the UP Diliman campus.
The collective, concerted, and synchronized acts of the accused before, during, and after the kidnapping constitute undoubted proof that Gomez and her co-accused conspired with each other to attain a common objective, i.e., to kidnap Edward and detain him illegally in order to demand ransom for his release.
X x x.”
The right to counsel attaches upon the start of the investigation, i.e., when the investigating officer starts to ask questions to elicit information and/or confessions or admissions from the accused.
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. JERRY PEPINO y RUERAS and PRECIOSA GOMEZ y CAMPOS, Accused-Appellants. EN BANC, G.R. No. 174471, January 12, 2016.
c. The Right to Counsel
The right to counsel is a fundamental right and is intended to preclude the slightest coercion that would lead the accused to admit something false. The right to counsel attaches upon the start of the investigation, i.e., when the investigating officer starts to ask questions to elicit information and/or confessions or admissions from the accused.46
Custodial investigation commences when a person is taken into custody and is singled out as a suspect in the commission of the crime under investigation.47 As a rule, a police lineup is not part of the custodial investigation; hence, the right to counsel guaranteed by the Constitution cannot yet be invoked at this stage. The right to be assisted by counsel attaches only during custodial investigation and cannot be claimed by the accused during identification in a police lineup.
Our ruling on this point in People v. Lara48 is instructive:
x x x The guarantees of Sec. 12(1 ), Art. III of the 1987 Constitution, or the so-called Miranda rights, may be invoked only by a person while he is under custodial investigation. Custodial investigation starts when the police investigation is no longer a general inquiry into an unsolved crime but has begun to focus on a particular suspect taken into custody by the police who starts the interrogation and propounds questions to the person to elicit incriminating statements. Police line-up is not part of the custodial investigation; hence, the right to counsel guaranteed by the Constitution cannot yet be invoked at this stage.49
Defense witness Reynaldo, however, maintained that Pepino and Gomez were among those already presented to the media as kidnapping suspects by the DOJ a day before the police lineup was made. In this sense, the appellants were already the focus of the police and were thus deemed to be already under custodial investigation when the out-of-court identification was conducted.
Nonetheless, the defense did not object to the in-court identification for having been tainted by an irregular out-of-court identification in a police lineup. They focused, instead, on the legality of the appellants' arrests.
Whether Edward and Jocelyn could have seen Pepino and Gomez in various media fora that reported the presentation of the kidnapping suspects to the media is not for the Court to speculate on. The records merely show that when defense counsel, Atty. Caesar Esturco, asked Jocelyn during cross-examination whether she was aware that there were several kidnap-for-ransom incidents in Metro Manila, the latter answered that she "can read in the newspapers."50 At no time did Jocelyn or Edward ever mention that they saw the appellants from the news reports in print or on television.
At any rate, the appellants' respective convictions in this case were based on an independent in-court identification made by Edward and Jocelyn, and not on the out-of-court identification during the police lineup. We reiterate that the RTC and the CA found the court testimonies of these witnesses to be positive and credible, and that there was no showing that their factual findings had been arrived at arbitrarily. The in-court identification thus cured whatever irregularity might have attended the police lineup.
As the Court ruled in People v. Algarme:51
Even assuming arguendo the appellants' out-of-court identification was defective, their subsequent identification in court cured any flaw that may have initially attended it. We emphasize that the "inadmissibility of a police lineup identification x x x should not necessarily foreclose the admissibility of an independent in-court identification." We also stress that all the accused-appellants were positively identified by the prosecution eyewitnesses during the trial.
It is also significant to note that despite the overwhelming evidence adduced by the prosecution, Pepino and Gomez did not even testify for their respective defenses.1âwphi1
X x x.”
Costs, settlement and funding of appeals in Philippines - SyCip Salazar Hernandez & Gatmaitan
See - https://www.lexology.com/library/detail.aspx?g=481bc8c1-185f-40e0-a6f2-882e74c15bcc&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2020-11-02&utm_term=
"x x x.
Costs, settlement and funding of appeals in Philippines
SyCip Salazar Hernandez & Gatmaitan
Costs, settlement and funding
Costs
What are the rules regarding attorneys’ fees and costs on appeal?
There are two commonly accepted concepts of attorneys’ fees: ordinary and extraordinary. In its ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer by his or her client for the legal services he or she has rendered to the latter; while in its extraordinary concept, attorneys’ fees are deemed indemnity for damages ordered by the court to be paid by the losing party in litigation. The instances where these may be awarded are those enumerated in article 2208 of the Civil Code (Alva v High Capacity Security Force, Inc, G R No. 203328, 8 November 2017). An appellate court may affirm, modify or set aside a trial court’s award of extraordinary attorneys’ fees in the process of appellate review.
Meanwhile, costs shall be awarded in favour of the prevailing party as a matter of course, but the court has the power, for special reasons, to adjudge that either party shall pay the costs of an action or that the same be divided, as may be equitable. Likewise, where an action or appeal is found to be frivolous, double or treble cost may be imposed on the plaintiff or appellant, which shall be paid by his or her attorney, if so ordered by the court. Again, this imposition may be affirmed, modified or set aside on appeal.
Settlement of first instance judgment after appeal lodged
Can parties enter into a settlement agreement to vacate the trial court judgment after an appeal has been taken?
Yes. Parties are allowed to enter into compromise or settlement agreements that cover cases pending trial, on appeal or even those that have already been finally decided. There is no time limitation as to when a compromise or settlement agreement may be entered into (Magbanua v Uy, G R No. 161003. 6 May 2005).
Limits on settlement after commencement of appeal
Are there any limits on settlement once an appeal has been taken?
The filing of an appeal does not limit the parties’ ability to enter into compromise or settlement agreements as long as such agreements are not contrary to law, morals, good customs or public policy. Article 2935 of the Civil Code of the Philippines, however, provides that no compromise upon the following questions shall be valid:
the civil status of persons;
validity of a marriage or a legal separation;
any ground for legal separation;
future support;
jurisdiction of courts; or
future legitime.
Third-party funding
May third parties fund appeals?
There are no specific rules in this jurisdiction that govern third-party litigation funders, and a litigant would ordinarily be free to source his or her litigation funds. However, an agreement whereby an attorney agrees to pay the expenses of proceedings to enforce the client’s rights is champertous (Roxas v Republic Real Estate Corp, G R No. 208205, 1 June 2016). A champertous contract is considered against public policy as it violates the fiduciary relations between the lawyer and his or her client, whose weakness or disadvantage may be exploited by the former (Nocom v Camerino, G R No. 182984, 10 February 2009).
Disclosure of litigation funding
If litigation funding is permitted in an appeal, must funding sources be disclosed to the court or other parties to the litigation?
There are no express rules covering third-party litigation funders in this jurisdiction (see question 25).
x x x."
Costs, settlement and funding of appeals in Philippines
SyCip Salazar Hernandez & Gatmaitan
Costs, settlement and funding
Costs
What are the rules regarding attorneys’ fees and costs on appeal?
There are two commonly accepted concepts of attorneys’ fees: ordinary and extraordinary. In its ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer by his or her client for the legal services he or she has rendered to the latter; while in its extraordinary concept, attorneys’ fees are deemed indemnity for damages ordered by the court to be paid by the losing party in litigation. The instances where these may be awarded are those enumerated in article 2208 of the Civil Code (Alva v High Capacity Security Force, Inc, G R No. 203328, 8 November 2017). An appellate court may affirm, modify or set aside a trial court’s award of extraordinary attorneys’ fees in the process of appellate review.
Meanwhile, costs shall be awarded in favour of the prevailing party as a matter of course, but the court has the power, for special reasons, to adjudge that either party shall pay the costs of an action or that the same be divided, as may be equitable. Likewise, where an action or appeal is found to be frivolous, double or treble cost may be imposed on the plaintiff or appellant, which shall be paid by his or her attorney, if so ordered by the court. Again, this imposition may be affirmed, modified or set aside on appeal.
Settlement of first instance judgment after appeal lodged
Can parties enter into a settlement agreement to vacate the trial court judgment after an appeal has been taken?
Yes. Parties are allowed to enter into compromise or settlement agreements that cover cases pending trial, on appeal or even those that have already been finally decided. There is no time limitation as to when a compromise or settlement agreement may be entered into (Magbanua v Uy, G R No. 161003. 6 May 2005).
Limits on settlement after commencement of appeal
Are there any limits on settlement once an appeal has been taken?
The filing of an appeal does not limit the parties’ ability to enter into compromise or settlement agreements as long as such agreements are not contrary to law, morals, good customs or public policy. Article 2935 of the Civil Code of the Philippines, however, provides that no compromise upon the following questions shall be valid:
the civil status of persons;
validity of a marriage or a legal separation;
any ground for legal separation;
future support;
jurisdiction of courts; or
future legitime.
Third-party funding
May third parties fund appeals?
There are no specific rules in this jurisdiction that govern third-party litigation funders, and a litigant would ordinarily be free to source his or her litigation funds. However, an agreement whereby an attorney agrees to pay the expenses of proceedings to enforce the client’s rights is champertous (Roxas v Republic Real Estate Corp, G R No. 208205, 1 June 2016). A champertous contract is considered against public policy as it violates the fiduciary relations between the lawyer and his or her client, whose weakness or disadvantage may be exploited by the former (Nocom v Camerino, G R No. 182984, 10 February 2009).
Disclosure of litigation funding
If litigation funding is permitted in an appeal, must funding sources be disclosed to the court or other parties to the litigation?
There are no express rules covering third-party litigation funders in this jurisdiction (see question 25).
x x x."
Admissibility of Identification; lineups; mug shots
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. JERRY PEPINO y RUERAS and PRECIOSA GOMEZ y CAMPOS, Accused-Appellants. EN BANC, G.R. No. 174471, January 12, 2016.
“x x x.
b. Admissibility of Identification
We find no merit in Gomez's claim that Edward's identification of her during trial might have been preconditioned by the "suggestive identification" made during the police lineup.
In People v. Teehankee, Jr.,30 the Court explained the procedure for out-of-court identification and the test to determine the admissibility of such identifications in this manner:
Out-of-court identification is conducted by the police in various ways. It is done thru show-ups where the suspect alone is brought face to face with the witness for identification. It is done thru mug shots where photographs are shown to the witness to identify the suspect. It is also done thru lineups where a witness identifies the suspect from a group of persons lined up for the purpose x x x In resolving the admissibility of and relying on out-of-court identification of suspects, courts have adopted the totality of circumstances test where they consider the following factors, viz: (1) the witness' opportunity to view the criminal at the time of the crime; (2) the witness' degree of attention at that time; (3) the accuracy of any prior description given by the witness; (4) the level of certainty demonstrated by the witness at the identification; (5) the length of time between the crime and the identification; and (6) the suggestiveness of the identification procedure.31
Applying the totality-of-circumstances test, we find Edward's out-of-court identification to be reliable and thus admissible. To recall, when the three individuals entered Edward's office, they initially pretended to be customers,32 and even asked about the products that were for sale.33 The three had told Edward that they were going to pay, but Pepino "pulled out a gun" instead.34 After Pepino' s companion had taken the money from the cashier's box, the malefactors handcuffed Edward and forced him to go down to the parked car. From this sequence of events, there was thus ample opportunity for Edward - before and after the gun had been pointed at him - to view the faces of the three persons who entered his office. In addition, Edward stated that Pepino had talked to him "[a]t least once a day"35 during the four days that he was detained.
Edward also saw Gomez seated at the front seat of the getaway metallic green Toyota Corolla vehicle. In addition, the abductors removed the tape from Edward's eyes when they arrived at the apartment, and among those whom he saw there was Gomez. According to Edward, he was able to take a good look at the occupants of the car when he was about to be released.
On the part of Jocelyn, she was firm and unyielding in her identification of Pepino as the person who pointed a gun at her husband while going down the stairs, and who brought him outside the premises of Kilton Motors. She maintained that she was very near when Pepino was taking away her husband; and that she could not forget Pepino's face. For accuracy, we quote from the records: x x x.
X x x.
We add that no competing event took place to draw Edward's and Jocelyn's attention from the incident. Nothing in the records shows the presence of any distraction that could have disrupted the witnesses' attention at the time of the incident.37
Jurisprudence holds that the natural reaction of victims of criminal violence is to strive to see the appearance of their assailants and observe the manner the crime was committed. As the Court held in People v. Esoy:38
It is known that the most natural reaction of a witness to a crime is to strive to look at the appearance of the perpetrator and to observe the manner in which the offense is perpetrated. Most often the face of the assailant and body movements thereof, create a lasting impression which cannot be easily erased from a witness's memory. Experience dictates that precisely because of the unusual acts of violence committed right before their eyes, eyewitnesses can remember with a high degree of reliability the identity of criminals at any given time.39
While this pronouncement should be applied with great caution, there is no compelling circumstance in this case that would warrant its non-application.
Contrary to what Gomez claimed, the police lineup conducted at the NBI was not suggestive. We note that there were seven people in the lineup; Edward was not compelled to focus his attention on any specific person or persons. While it might have been ideal if there had been more women included in the lineup instead of only two, or if there had been a separate lineup for Pepino and for Gomez, the fact alone that there were five males and two females in the lineup did not render the procedure irregular. There was no evidence that the police had supplied or even suggested to Edward that the appellants were the suspected perpetrators.
X x x.
We are not unaware that the Court, in several instances, has acquitted an accused when the out-of-court identification is fatally flawed. In these cases, however, it had been clearly shown that the identification procedure was suggestive.
In People v. Pineda,42 the Court acquitted Rolando Pineda because the police suggested the identity of the accused by showing only the photographs of Pineda and his co-accused Celso Sison to witnesses Canilo Ferrer and Jimmy Ramos. According to the Court, "there was impermissible suggestion because the photographs were only of appellant and Sison, focusing attention on the two accused."43
Similarly, the Court in People v. Rodrigo44 acquitted appellant Lee Rodrigo since only a lone photograph was shown to the witness at the police station. We thus held that the appellant's in-court identification proceeded from, and was influenced by, impermissible suggestions in the earlier photographic identification.
The lack of a prior description of the kidnappers in the present case should not lead to a conclusion that witnesses' identification was erroneous. The lack of a prior description of the kidnappers was due to the fact that Jocelyn (together with other members of Edward's family), for reasons not made known in the records, opted to negotiate with the kidnappers, instead of immediately seeking police assistance. If members of Edward's family had refused to cooperate with the police, their refusal could have been due to their desire not to compromise Edward's safety.45 In the same manner, Edward, after he was freed, chose to report the matter to Teresita Ang See, and not to the police.
Given these circumstances, the lack of prior description of the malefactors in this case should not in any way taint the identification that Edward and Jocelyn made.
X x x.”
Elements of kidnapping
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. JERRY PEPINO y RUERAS and PRECIOSA GOMEZ y CAMPOS, Accused-Appellants. EN BANC, G.R. No. 174471, January 12, 2016.
Kidnapping
“x x x.
a. Elements of kidnapping proved
The elements of kidnapping and serious illegal detention under Article 267 of the Revised Penal Code, as amended, are: (1) the offender is a private individual; (2) he kidnaps or detains another or in any other manner deprives the latter of his liberty; (3) the act of detention or kidnapping must be illegal; and (4) in the commission of the offense, any of the following circumstances is present: (a) the kidnapping or detention lasts for more than three (3) days; or (b) it is committed by simulating public authority; or (c) serious physical injuries are inflicted upon the person kidnapped or detained or threats to kill him are made; or (d) the person kidnapped or detained is a minor, female, or a public officer. If the victim of kidnapping and serious illegal detention is a minor, the duration of his detention is immaterial. Likewise, if the victim is kidnapped and illegally detained for the purpose of extorting ransom, the duration of his detention is also of no moment and the crime is qualified and becomes punishable by death even if none of the circumstances mentioned in paragraphs 1 to 4 of Article 267 is present.25
X x x.
It is settled that the crime of serious illegal detention consists not only of placing a person in an enclosure, but also in detaining him or depriving him of his liberty in any manner. For there to be kidnapping, it is enough that the victim is restrained from going home. Its essence is the actual deprivation of the victim's liberty, coupled with indubitable proof of the intent of the accused to effect such deprivation.27
X x x.”
Illegality of the Arrest ; how questioned in court
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. JERRY PEPINO y RUERAS and PRECIOSA GOMEZ y CAMPOS, Accused-Appellants. EN BANC, G.R. No. 174471, January 12, 2016.
“x x x.
Illegality of the Arrest
We point out at the outset that Gomez did not question before arraignment the legality of her warrantless arrest or the acquisition of RTC's jurisdiction over her person. Thus, Gomez is deemed to have waived any objection to her warrantless arrest.
It is settled that [a]ny objection to the procedure followed in the matter of the acquisition by a court of jurisdiction over the person of the accused must be opportunely raised before he enters his plea; otherwise, the objection is deemed waived.21 As we held in People v. Samson:22
[A ]ppellant is now estopped from questioning any defect in the manner of his arrest as he failed to move for the quashing of the information before the trial court. Consequently, any irregularity attendant to his arrest was cured when he voluntarily submitted himself to the jurisdiction of the trial court by entering a plea of "not guilty" and by participating in the trial.23
At any rate, the illegal arrest of an accused is not sufficient cause for setting aside a valid judgment rendered upon a sufficient complaint after a trial free from error. Simply put, the illegality of the warrantless arrest cannot deprive the State of its right to prosecute the guilty when all other facts on record point to their culpability. It is much too late in the day to complain about the warrantless arrest after a valid information had been filed, the accused had been arraigned, the trial had commenced and had been completed, and a judgment of conviction had been rendered against her.24
X x x.”
Land registration, where the applicant is not a resident of the Philippines; venue; jurisdiction.
Presidential Decree 1529, otherwise known as the “Property Registration Decree.”
“Section 16. Non-resident applicant. If the applicant is not a resident of the Philippines, he shall file with his application an instrument in due form appointing an agent or representative residing in the Philippines, giving his full name and postal address, and shall therein agree that the service of any legal process in the proceedings under or growing out of the application made upon his agent or representative shall be of the same legal effect as if made upon the applicant within the Philippines. If the agent or representative dies, or leaves the Philippines, the applicant shall forthwith make another appointment for the substitute, and, if he fails to do so the court may dismiss the application.
“Section 17. What and where to file. The application for land registration shall be filed with the Court of First Instance of the province or city where the land is situated. The applicant shall file together with the application all original muniments of titles or copies thereof and a survey plan of the land approved by the Bureau of Lands.
“The clerk of court shall not accept any application unless it is shown that the applicant has furnished the Director of Lands with a copy of the application and all annexes.”
“Section 16. Non-resident applicant. If the applicant is not a resident of the Philippines, he shall file with his application an instrument in due form appointing an agent or representative residing in the Philippines, giving his full name and postal address, and shall therein agree that the service of any legal process in the proceedings under or growing out of the application made upon his agent or representative shall be of the same legal effect as if made upon the applicant within the Philippines. If the agent or representative dies, or leaves the Philippines, the applicant shall forthwith make another appointment for the substitute, and, if he fails to do so the court may dismiss the application.
“Section 17. What and where to file. The application for land registration shall be filed with the Court of First Instance of the province or city where the land is situated. The applicant shall file together with the application all original muniments of titles or copies thereof and a survey plan of the land approved by the Bureau of Lands.
“The clerk of court shall not accept any application unless it is shown that the applicant has furnished the Director of Lands with a copy of the application and all annexes.”
“Section 34. Delegated jurisdiction in cadastral and land registration cases. – Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts may be assigned by the Supreme Court to hear and determine cadastral or land registration cases covering lots where there is no controversy or opposition, or contested lots the where the value of which does not exceed One hundred thousand pesos (P100,000.00), such value to be ascertained by the affidavit of the claimant or by agreement of the respective claimants if there are more than one, or from the corresponding tax declaration of the real property. Their decisions in these cases shall be appealable in the same manner as decisions of the Regional Trial Courts (as amended by Republic Act 7691).”
Rule of the minority - Justice Antonio T. Carpio
See -
"x x x..
Rule of the minority
By: Antonio T. Carpio - @inquirerdotnet
Philippine Daily Inquirer / 05:07 AM November 12, 2020
In a democracy, the leaders of the state are chosen by the majority of voters in an election under the one person, one vote principle. Under this majoritarian concept, the Philippines is not a democracy. Since the first presidential election in 1992 under the 1987 Constitution, all our five presidents have been chosen by plurality vote, which constitutes a minority of all those who voted. This means that the Philippines actually follows the rule of the minority, whose votes outweigh the votes of the majority.
To ensure that the leaders are chosen by the majority of voters, the electoral system should require a run-off election if none of the candidates secures a majority vote. A run-off election is necessary in a multi-party system like what our 1987 Constitution instituted but unfortunately failed to provide. The framers of the 1987 Constitution believed that it is too costly to hold a run-off election.
Many developing countries, however, some even poorer than the Philippines, have a run-off election despite the cost. Among many others, these countries have a run-off in the election of their presidents: Afghanistan, Burkina Faso, Costa Rica, Dominican Republic, East Timor, Ecuador, El Salvador, Ghana, Guatemala, Haiti, Indonesia, Liberia, Malawi, Peru, Senegal, and Zimbabwe. What is more important to these countries is to elect national leaders with a clear mandate from a majority of voters. Such a mandate is often needed to provide political stability to the country and to ensure that a majority of the people support the platform of national leaders.
There is a creative way of simulating a run-off election while holding only one election, thus avoiding the additional cost of an actual run-off election. Under the instant run-off or alternative voting system, voters are asked to rank their preferences if there are more than two candidates. If the first ranked candidate secures a majority of the votes, then he wins the election. If no candidate secures a majority of the votes, the last candidate is eliminated and the second preference of those who voted for the eliminated candidate will be counted, and so on until a candidate receives a majority of the votes cast. The instant run-off system is followed at the national level in Australia, Ireland, Malta, and Papua New Guinea, and at the municipal level in the US, UK, Ireland, Australia, and New Zealand.
Our 1935 Constitution provided for a plurality election system, but a unique provision in the election law developed a two-party system that ensured majoritarian rule. The election code enacted by Congress created a three-member board of inspectors, tasked to administer the election at the precinct level, in every precinct throughout the country. The two largest political parties nominated two of the members of the board of inspectors while the third member was a Commission on Elections official who served as the chairperson. This setup gave the two largest political parties a government-salaried representative in every precinct throughout the country, entrenching the two-party system. This setup is no longer possible under the 1987 Constitution, which expressly prohibits political parties from being represented in the board of election inspectors, board of canvassers, or similar bodies.
The US presidential election is in a worse situation under its Electoral College system where the candidate who secures 270 electoral votes wins even if such candidate fails to win the nationwide popular vote. Five US presidents won the electoral vote but lost the nationwide popular vote, namely: Presidents Adams, Hayes, Harrison, Bush Jr., and Trump. To correct this flaw in the US presidential elections, the legislatures of 15 states and the District of Columbia, with a combined 196 electoral votes, have adopted the National Popular Vote Interstate Compact (NPVIC). Under the NPVIC, states will award all their electoral votes to the presidential candidate who wins the nationwide popular vote. The NPVIC will take effect once state legislatures adopting the NPVIC have a total of 270 electoral votes. This will ensure that the presidential candidate who wins the nationwide popular vote also wins the electoral vote.
In the Philippines, the flaw in the presidential electoral system that results in the rule of the minority can only be corrected by a constitutional amendment. The correction of this flaw is a worthy subject of a constitutional amendment.
acarpio@inquirer.com.ph
Read more: https://opinion.inquirer.net/135223/rule-of-the-minority#ixzz6fAEutysI
Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook
"x x x..
Rule of the minority
By: Antonio T. Carpio - @inquirerdotnet
Philippine Daily Inquirer / 05:07 AM November 12, 2020
In a democracy, the leaders of the state are chosen by the majority of voters in an election under the one person, one vote principle. Under this majoritarian concept, the Philippines is not a democracy. Since the first presidential election in 1992 under the 1987 Constitution, all our five presidents have been chosen by plurality vote, which constitutes a minority of all those who voted. This means that the Philippines actually follows the rule of the minority, whose votes outweigh the votes of the majority.
To ensure that the leaders are chosen by the majority of voters, the electoral system should require a run-off election if none of the candidates secures a majority vote. A run-off election is necessary in a multi-party system like what our 1987 Constitution instituted but unfortunately failed to provide. The framers of the 1987 Constitution believed that it is too costly to hold a run-off election.
Many developing countries, however, some even poorer than the Philippines, have a run-off election despite the cost. Among many others, these countries have a run-off in the election of their presidents: Afghanistan, Burkina Faso, Costa Rica, Dominican Republic, East Timor, Ecuador, El Salvador, Ghana, Guatemala, Haiti, Indonesia, Liberia, Malawi, Peru, Senegal, and Zimbabwe. What is more important to these countries is to elect national leaders with a clear mandate from a majority of voters. Such a mandate is often needed to provide political stability to the country and to ensure that a majority of the people support the platform of national leaders.
There is a creative way of simulating a run-off election while holding only one election, thus avoiding the additional cost of an actual run-off election. Under the instant run-off or alternative voting system, voters are asked to rank their preferences if there are more than two candidates. If the first ranked candidate secures a majority of the votes, then he wins the election. If no candidate secures a majority of the votes, the last candidate is eliminated and the second preference of those who voted for the eliminated candidate will be counted, and so on until a candidate receives a majority of the votes cast. The instant run-off system is followed at the national level in Australia, Ireland, Malta, and Papua New Guinea, and at the municipal level in the US, UK, Ireland, Australia, and New Zealand.
Our 1935 Constitution provided for a plurality election system, but a unique provision in the election law developed a two-party system that ensured majoritarian rule. The election code enacted by Congress created a three-member board of inspectors, tasked to administer the election at the precinct level, in every precinct throughout the country. The two largest political parties nominated two of the members of the board of inspectors while the third member was a Commission on Elections official who served as the chairperson. This setup gave the two largest political parties a government-salaried representative in every precinct throughout the country, entrenching the two-party system. This setup is no longer possible under the 1987 Constitution, which expressly prohibits political parties from being represented in the board of election inspectors, board of canvassers, or similar bodies.
The US presidential election is in a worse situation under its Electoral College system where the candidate who secures 270 electoral votes wins even if such candidate fails to win the nationwide popular vote. Five US presidents won the electoral vote but lost the nationwide popular vote, namely: Presidents Adams, Hayes, Harrison, Bush Jr., and Trump. To correct this flaw in the US presidential elections, the legislatures of 15 states and the District of Columbia, with a combined 196 electoral votes, have adopted the National Popular Vote Interstate Compact (NPVIC). Under the NPVIC, states will award all their electoral votes to the presidential candidate who wins the nationwide popular vote. The NPVIC will take effect once state legislatures adopting the NPVIC have a total of 270 electoral votes. This will ensure that the presidential candidate who wins the nationwide popular vote also wins the electoral vote.
In the Philippines, the flaw in the presidential electoral system that results in the rule of the minority can only be corrected by a constitutional amendment. The correction of this flaw is a worthy subject of a constitutional amendment.
acarpio@inquirer.com.ph
Read more: https://opinion.inquirer.net/135223/rule-of-the-minority#ixzz6fAEutysI
Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook
x x x."
Goodbye to Originalist Judges - Eric Segall
See - https://www.jurist.org/commentary/2020/11/eric-segall-goodbye-to-originalist-judges/
"x x x.
Goodbye to Originalist Judges
Eric Segall
NOVEMBER 17, 2020 09:00:11 AM
Edited by: Akshita Tiwary | Government Law College Mumbai, IN
Eric Segall, a Professor of Law at Georgia State University, argues that judges should no longer rely on an originalism that has become either pernicious or irrelevant...
Once President-Elect Biden takes office, we will be able to say goodbye to new judges who self-identify as originalists. This change is important because in constitutional cases, originalism is either pernicious or irrelevant, and we should stop pretending otherwise.
There is nothing wrong with the American people celebrating their link to the white, propertied males who wrote and voted for both our original Constitution and later the post-Civil War Reconstruction Amendment. Both sets of men created general structures of government and important but, vague aspirations that are still with us today. But along with this nod to our past, we must also remember that these men and the societies they inhabited embraced pernicious values concerning people of color, women and the less fortunate. We must emphatically reject those values today. One way of accomplishing that goal is for lawyers, judges and legal scholars to repudiate originalism as a method of constitutional interpretation.
We follow the Constitution where it is clear because, like it or not, the Constitution is our fundamental law. Although many of its original provisions are quite controversial today, such as the details of the electoral college, and some are benign, such as the President must be 35, many issues of governance must be settled until the document is properly amended. But those provisions generally do not end up in court and are irrelevant to originalism debates. We can all be originalists when it comes to precise constitutional instructions.
The issue for judges today is how they should evaluate claims based on imprecise text, such as the equal protection and due process clauses, when the histories of those provisions are contested and modern problems arise. In that context, originalism is either pernicious or irrelevant. With the flood of Trump judges claiming to be originalists now sitting on the federal bench, it is more important then ever to make them see that answers to complex, modern legal issues do not lie in 1789 or 1868.
For example, most scholars agree that the original meaning of the 14th Amendment does not bar today’s affirmative action programs because in 1868, many such programs existed for the newly freed slaves. The conservative Justices have never examined that history in any opinion because they know it does not support their made-up, non-textual rule of color-blindness. So this is the rare example where a good faith look into originalism by judges would support a liberal cause.
Nevertheless, our social, political and legal debates over public universities using racial preferences to diversify their student bodies should not be fought on the battlefield of history. Our country is so different than the one that ratified the 14th Amendment in so many important ways that we should debate the wisdom of racial preferences by today’s standards and modern values. When we do that, we see there are reasonable argument on both sides (i.e., we need to make up for centuries of discrimination but maybe the cure is worse than the disease). The important point for judges, though, is that because the text is silent, and the history outdated, they should defer to elected officials on this hard problem. In this case, originalism, while not pernicious, should be irrelevant.
But in many other cases implicating the rights and problems of marginalized groups, originalism is indeed pernicious. No fair reading of the Constitution’s original public meaning, in 1789 or 1868, could possibly help women, LBGTQ folks, or the poor achieve real equality because those societies were built for and ran by rich, white men. The original public meaning of the 14th Amendment, despite its general text, is not conducive to giving traditionally disadvantaged groups a fair shake civilly, politically, legally or economically.
Moreover, in any case involving today’s advanced technologies, such as the implication of the internet for defamation law, the use of drone strikes to kill American terrorists abroad, the degree of pain involved in lethal injections for capital punishment, among an infinite number of other modern complex issues, originalism is and should be deemed by judges to be irrelevant. Pretending otherwise takes away judicial transparency when we need it the most- applying hopelessly imprecise language to new problems the drafters and ratifiers of that language could never have imagined.
In one of the most well-regarded judicial opinions in American history, Justice Robert Jackson, in a case brought by steel companies challenging President Truman’s seizure of the steel mills during the Korean War, said,
“just what our forefathers did envision, or would have envisioned had they foreseen modern conditions, must be divined from materials almost as enigmatic as the dreams Joseph was called upon to interpret for Pharaoh.”
And in possibly the most important and well-settled Supreme Court opinion of the 20th century, Brown v. Board of Education, a unanimous Court said that it would not “turn the clock back” to 1868 to decide whether state-required segregation in public schools was constitutional. The examples of explicit rejection of originalism by the Supreme Court throughout our history are legion and persuasive. We must return to the time when America’s judges knew that today’s world would require today’s solutions.
The rejection of originalism does not entail the acceptance of aggressive judicial review. As I documented in a 2012 book, the history of the Supreme Court is a history of judicial imposition of values and politics, not logic and law. If we want to cut back the Court’s power, and we should, the problem must be attacked directly through structural reform. If we do not want the Court to be less powerful, then we should require the Justices to express fidelity to today’s values and modern sensibilities. The worst of all worlds is one where judges exercise substantial authority while pretending they are making decisions based on a world that, in large part, no longer exists. I have no doubt the Founding Fathers would agree.
Eric Segall is the Ashe Family Chair Professor of Law at Georgia State University, where he teaches federal courts and constitutional law. He is the author of Originalism as Faith (Cambridge University Press, 2018).
Suggested citation: Eric Segall, Goodbye to Originalist Judges, JURIST – Academic Commentary, November 17, 2020, https://www.jurist.org/commentary/2020/11/eric-segall-goodbye-to-originalist-judges/.
x x x."
"x x x.
Goodbye to Originalist Judges
Eric Segall
NOVEMBER 17, 2020 09:00:11 AM
Edited by: Akshita Tiwary | Government Law College Mumbai, IN
Eric Segall, a Professor of Law at Georgia State University, argues that judges should no longer rely on an originalism that has become either pernicious or irrelevant...
Once President-Elect Biden takes office, we will be able to say goodbye to new judges who self-identify as originalists. This change is important because in constitutional cases, originalism is either pernicious or irrelevant, and we should stop pretending otherwise.
There is nothing wrong with the American people celebrating their link to the white, propertied males who wrote and voted for both our original Constitution and later the post-Civil War Reconstruction Amendment. Both sets of men created general structures of government and important but, vague aspirations that are still with us today. But along with this nod to our past, we must also remember that these men and the societies they inhabited embraced pernicious values concerning people of color, women and the less fortunate. We must emphatically reject those values today. One way of accomplishing that goal is for lawyers, judges and legal scholars to repudiate originalism as a method of constitutional interpretation.
We follow the Constitution where it is clear because, like it or not, the Constitution is our fundamental law. Although many of its original provisions are quite controversial today, such as the details of the electoral college, and some are benign, such as the President must be 35, many issues of governance must be settled until the document is properly amended. But those provisions generally do not end up in court and are irrelevant to originalism debates. We can all be originalists when it comes to precise constitutional instructions.
The issue for judges today is how they should evaluate claims based on imprecise text, such as the equal protection and due process clauses, when the histories of those provisions are contested and modern problems arise. In that context, originalism is either pernicious or irrelevant. With the flood of Trump judges claiming to be originalists now sitting on the federal bench, it is more important then ever to make them see that answers to complex, modern legal issues do not lie in 1789 or 1868.
For example, most scholars agree that the original meaning of the 14th Amendment does not bar today’s affirmative action programs because in 1868, many such programs existed for the newly freed slaves. The conservative Justices have never examined that history in any opinion because they know it does not support their made-up, non-textual rule of color-blindness. So this is the rare example where a good faith look into originalism by judges would support a liberal cause.
Nevertheless, our social, political and legal debates over public universities using racial preferences to diversify their student bodies should not be fought on the battlefield of history. Our country is so different than the one that ratified the 14th Amendment in so many important ways that we should debate the wisdom of racial preferences by today’s standards and modern values. When we do that, we see there are reasonable argument on both sides (i.e., we need to make up for centuries of discrimination but maybe the cure is worse than the disease). The important point for judges, though, is that because the text is silent, and the history outdated, they should defer to elected officials on this hard problem. In this case, originalism, while not pernicious, should be irrelevant.
But in many other cases implicating the rights and problems of marginalized groups, originalism is indeed pernicious. No fair reading of the Constitution’s original public meaning, in 1789 or 1868, could possibly help women, LBGTQ folks, or the poor achieve real equality because those societies were built for and ran by rich, white men. The original public meaning of the 14th Amendment, despite its general text, is not conducive to giving traditionally disadvantaged groups a fair shake civilly, politically, legally or economically.
Moreover, in any case involving today’s advanced technologies, such as the implication of the internet for defamation law, the use of drone strikes to kill American terrorists abroad, the degree of pain involved in lethal injections for capital punishment, among an infinite number of other modern complex issues, originalism is and should be deemed by judges to be irrelevant. Pretending otherwise takes away judicial transparency when we need it the most- applying hopelessly imprecise language to new problems the drafters and ratifiers of that language could never have imagined.
In one of the most well-regarded judicial opinions in American history, Justice Robert Jackson, in a case brought by steel companies challenging President Truman’s seizure of the steel mills during the Korean War, said,
“just what our forefathers did envision, or would have envisioned had they foreseen modern conditions, must be divined from materials almost as enigmatic as the dreams Joseph was called upon to interpret for Pharaoh.”
And in possibly the most important and well-settled Supreme Court opinion of the 20th century, Brown v. Board of Education, a unanimous Court said that it would not “turn the clock back” to 1868 to decide whether state-required segregation in public schools was constitutional. The examples of explicit rejection of originalism by the Supreme Court throughout our history are legion and persuasive. We must return to the time when America’s judges knew that today’s world would require today’s solutions.
The rejection of originalism does not entail the acceptance of aggressive judicial review. As I documented in a 2012 book, the history of the Supreme Court is a history of judicial imposition of values and politics, not logic and law. If we want to cut back the Court’s power, and we should, the problem must be attacked directly through structural reform. If we do not want the Court to be less powerful, then we should require the Justices to express fidelity to today’s values and modern sensibilities. The worst of all worlds is one where judges exercise substantial authority while pretending they are making decisions based on a world that, in large part, no longer exists. I have no doubt the Founding Fathers would agree.
Eric Segall is the Ashe Family Chair Professor of Law at Georgia State University, where he teaches federal courts and constitutional law. He is the author of Originalism as Faith (Cambridge University Press, 2018).
Suggested citation: Eric Segall, Goodbye to Originalist Judges, JURIST – Academic Commentary, November 17, 2020, https://www.jurist.org/commentary/2020/11/eric-segall-goodbye-to-originalist-judges/.
x x x."
Changing of the Guard: The Rule of Law And A Safe Haven for Investment - Prof. William H. Widen
See - https://www.jurist.org/commentary/2020/11/william-widen-asset-investment/
"x x x.
Changing of the Guard: The Rule of Law And A Safe Haven for Investment
William H. Widen
NOVEMBER 10, 2020 12:01:51 PM
Edited by: Vishwajeet Deshmukh | Government Law College Mumbai, IN
William H. Widen, Professor of Law at the University of Miami School of Law, in Coral Gables, Florida discusses the fragile nature of the rule of law and explains why protecting this asset must be a priority for a new Biden administration...
The United States has an invaluable asset: the rule of law and its historic role in protecting property rights. This essay highlights the fragile nature of this asset and explains why protecting this asset—particularly in the eyes of foreign investors—must be a priority for a new Biden administration (as it should be for the remainder of a Trump administration).
The executive branch, supported by congress and the courts, acts as custodian for this most valuable asset across administrations regardless of the political party. The United States has been, and remains, a safe haven for investors from around the world in all manner of assets, including U.S. Treasury securities, stocks and bonds, real estate, and intellectual property. The United States increasingly relies on foreign investment to finance its deficit spending, as well as contribute to efficient and low-cost capital raising by United States businesses. If foreign investors came to doubt the security of investments in the United States, or the desirability of its capital markets and exchanges, the negative impression could have disastrous consequences. (A recent New York Times essay/video suggests the world already is unimpressed with how the oldest democracy runs elections.)
President Trump has been criticized for assaults on the rule of law in various spheres of activity (as has the Republican Party), including the rule of law in the economic sector. For example, Professor Michael Klarman at the Harvard Law School highlighted actions taken by the Trump administration against business interests by “selecting winners and losers in the economic marketplace.” Indeed, some actions of the Trump administration have placed this asset at risk. Perhaps paradoxically, President Trump and his supporters leveled similar accusations about the consequences of a Biden administration should it adopt various progressive policies advocated by liberal elements of the Democratic Party.
Recent Trump Administration Executive Orders directed at Chinese technology companies (TikTok and WeChat), and the tentative solution in TikTok, provide a lens to view the problem because these cases created heightened concern over the continued status of the United States as a safe haven for foreign investment. These Executive Orders and their potential resolution must be viewed in context to understand the full extent of the problem. Executive orders are a bi-partisan problem which raise the red flag of possible arbitrary and capricious action creating market uncertainty.
Last August, the Trump Administration issued broad executive orders relating to Chinese technology apps stating “[t]he spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China continues to threaten the national security, foreign policy, and economy of the United States.” The orders followed a unanimous Senate vote to ban TikTok (owned by the Chinese firm ByteDance) from all U.S. government devices. The TikTok order states that “any transaction by any person” with ByteDance or its subsidiaries will be prohibited in 45 days. One consequence: Apple and Google could not offer the app through their app stores. A similar ban applied to WeChat, a messaging app owned by Chinese giant TenCent. Extending the ban beyond WeChat to all of TenCent would have major implications for the video gaming industry because TenCent owns Riot Games (developer of League of Legends) and TenCent holds a major stake in Epic Games (maker of Fortnite).
TikTok immediately raised the rule of law spectre stating: “We are shocked by the recent Executive Order, which was issued without any due process” and vowing to “pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the Administration, then by the US courts.”
One might dismiss TikTok’s response as mere rhetoric or propaganda to counter a climate of rising nationalism and generalized animosity towards China flowing from the COVID-19 pandemic. Moreover, national security concerns rightfully loom large in the equation. This response lacks nuance and context.
The rhetoric from China softened in light of the proposed sale of a 20% interest in TikTok Global to Oracle and Walmart—leaving an 80% interest with the Chinese investment vehicle. By raising the “rule of law” issue, however, TikTok knew it was injecting a powerful counterargument into the controversy that should duly concern the United States government. Indeed, raising this spectre may have contributed to a tentative outcome which TikTok recently said was not a “worst-case scenario” and was “unfair” but at the same time “reasonable”. Indeed, a 20% divestment solution looks much better than a transfer of majority control to a United States investment vehicle—as often required for investment by the United States or multinational firm in a business in a socialist country—let alone complete divestment to which China vehemently objected (though President Trump favored). The current status of this deal remains uncertain, even though the Trump administration indicated a willingness to accept a 20% divestiture. It is not clear from the public details of the proposed transaction whether it even amounts to a divestiture at all—rather than a complex arrangement in which Oracle performs platform, custodianship, and servicing functions for a fee. Ring-fencing information and intellectual property in exchange for an economic upside of 20% of profits from United States operations should be motivated by national security rather than extracting rents for private parties.
The U.S. Constitution (as well as state constitutions) provide specific protections against impairing the “Obligation of Contract” (Clause 1, Article 10) and taking property for public use without just compensation (5th Amendment); the 14th Amendment protects against the deprivation of property by a state without due process of law. Indeed, the framers inserted the contract clause into the U.S. Constitution to assure foreign lenders that debts would be honored in state courts and not compromised by state legislation forgiving local debtors (it also protected banks based in northeastern cities from disfavored treatment in other states).
While the U.S. Constitution (and its various state counterparts) appear to offer fairly comprehensive protection for contract and property rights, over time these protections have been severely restricted by interpretation. After the Civil War, the prominence of the contract clause in protecting property rights diminished in favor of “substantive due process”—and became largely moribund following the case of Home Building & Loan Ass’n v. Blaisdell. Substantive due process as a concept is now disfavored, with reference to “Lochnerism” a term of opprobrium. (The Contract Clause does not protect against federal government economic regulation which has dramatically increased.) Direct protection for interests in property has fared little better, as the court has accorded disparate and less protective treatment for economic interests in property as opposed to interests in personal rights, such as freedom of religion, freedom of association, and freedom of expression. (See, for example, Kelo v. City of New London.)
This well-known trend lessening protections for economic interests in the U.S. courts does not occur in a vacuum.
President Trump directly attacked the rule of law when he criticized the judiciary, the FBI, and the Department of Justice (and, to a lesser extent, the press). His willingness to pardon or commute sentences for political allies exacerbated this perception. Attempting to force divestiture of TikTok to United States companies via executive order and regulation challenges the sanctity of property rights of foreign investors. Oracle’s founder, Larry Ellison, hosted a fundraiser for President Trump on the same day the Department of Justice urged dropping a Microsoft suit against Oracle, making the perception worse. Is this national defense or an unjustified extraction of value? At a 20% divestiture level, it appears the parties were satisfied that national security and protection of property had been properly balanced.
But concerns over the rule of law do not end with the Trump administration. On the other side of the aisle, progressive elements advocate for reparations (which some see as a harbinger for deprivation of property rights), the prospect of a Biden administration portends higher taxes (which conservative elements might see as “confiscatory”) and the possible appointment of new Supreme Court justices in a so-called “court-packing” scheme might entrench a judicial philosophy likely to continue (if not further erode) limited constitutional protections for economic interests and property rights. Meanwhile, Senator Bernie Sanders has proposed legislation that would impose an estimated $75 billion in taxes on a handful of billionaires. (Balancing these various concerns would be one task for bi-partisan Congressional studies on reparations and the structure of the judiciary—both studies worth starting.) These potential legislative actions of a Biden administration (though potentially worrisome to investors) would follow a deliberative legislative process rather than a unilateral executive action that might be viewed as arbitrary and capricious.
It is in this context that TikTok raised its concerns over the rule of law—and in which the solution of a modest divestment appears to have been reached—at least in principle.
The Trump Administration, Congress, and a future Biden Administration all need to recognize the context in which international investors watch actions taken by the United States Government against TikTok.
On the one hand, it is fully legitimate for the United States to protect its national security—steps to limit the use of apps by United States employees and agencies fall into this camp. As an illustration, nobody questions prohibitions against non-U.S. persons acquiring security interests in various properties of defense contractors—the fear is that a foreign person ought not to acquire possession of a defense asset in a foreclosure. The same concern over protecting U.S. defense assets and secrets applies here to TikTok.
On the other hand, solutions reached to solve legitimate security concerns should avoid the appearance of using executive orders and regulations to extract rents at the expense of foreign investors.
The risks are several. One risk is that, in protecting the legitimate interests of the United States, our politicians paint with a broad brush, risking the creation of the perception that the U.S. is on a path descending into confiscatory policies akin to the nationalization of private party assets. Such a path might play well for short-term political gain as feelings of nationalism are on the rise. But knee-jerk nationalism alarms international investors in the United States. Is it really necessary, for example, for Chinese investors to divest investments in companies like TikTok in order to secure the national defense? Maybe—and we should not shy away from protecting the national interest. But, in financial markets, there is a fine line between perception and reality—indeed perception often becomes reality. While some regulation is undoubtedly necessary and appropriate to protect our National interest, our government decision-makers need to be mindful of the larger context in which these decisions are made and how they will be perceived by the larger international investment community. This is why TikTok’s raising of the rule of law was effective as propaganda even if TikTok posed a security risk.
Another risk is that foreign investors perceive an erosion of respect in the United States court system for property rights—the recent appointment of Justice Amy Coney Barrett, however, is unlikely to create direct concern about protection for property rights. Nevertheless, a plan to expand the number of Supreme Court Justices might create an alarm. A concern about expanding the number of Justices is separate and apart from a concern that the appointment process of Justice Barrett required Republican Senators to completely reverse their stand about the appropriateness of Supreme Court appointments in an election year—also not a good look from a rule of law perspective—but one that is less threatening to investors because the process technically complied with existing law (even if accompanied by hypocritical rhetoric).
This, of course, is why TikTok raised the spectre of the rule of law to oppose the Trump Administration’s Executive Order, to begin with. While the response of the Chinese app maker contains an element of propaganda, it is effective as a rhetorical response precisely because it contains an element of truth. It is not mere advocacy. The United States needs to pay particular attention in these troubled times that we collectively—and in a bi-partisan way—safeguard our national treasure of the rule of law insofar as it protects investment and private property.
Of course, the TikTok saga is far from over. In a lawsuit filed by creators who use TikTok—and not TikTok itself—a federal judge has issued an injunction against the pending November 12 ban on TikTok in the United States based on First Amendment concerns. So the matter remains in a state of confusion—though observers still believe that the ultimate resolution will involve divestment of some TikTok assets or ownership.
The recent delay of the public offering of Jack Ma’s Ant Group on the Hong Kong and Shanghai stock exchanges is instructive. Beijing encourages Chinese hi-tech companies to list shares on Chinese stock exchanges, rather than in the United States. The sudden delay in the Ant Group offering (following a prior announcement of the offering) creates the appearance that Chinese exchanges may not be ready to challenge United States securities markets for dominance. (I say “appearance” because the public statements about the reasons for the delay—including that the provider of financial services retain some risk on loans it originates and concern over financial disclosure) seem sound. Despite the challenges TikTok has faced in the United States, TikTok and Oracle have announced tentative plans for an IPO of TikTok Global within about a year (reportedly in a United States registered public offering). The United States benefits from the impression that delays such as those faced by the Ant Group in an offshore IPO might not have happened here even though the stated reasons for delay would have concerned United States regulators as well. Some observers believe the delay actually resulted from a Jack Ma speech which upset the Chinese regulators—increasing global capital’s fear of arbitrary and capricious regulatory action. Preserving the United States as a safe haven for investment goes hand in glove with hosting the world’s premier exchanges and capital markets.
Our custodians in government need to protect the position of the United States as the preferred location for investment.
William H. Widen is a Professor of Law at the University of Miami School of Law.
Suggested Citation: William H. Widen, Changing of the Guard: The Rule of Law And A Safe Haven for Investment, JURIST – Academic Commentary, November 10, 2020, https://www.jurist.org/commentary/2020/11/william-widen-asset-investment/.
This article was prepared for publication by Vishwajeet Deshmukh, a JURIST staff editor. Please direct any questions or comments to him at commentary@jurist.org.
Opinions expressed in JURIST Commentary are the sole responsibility of the author and do not necessarily reflect the views of JURIST's editors, staff, donors or the University of Pittsburgh.
"x x x.
Changing of the Guard: The Rule of Law And A Safe Haven for Investment
William H. Widen
NOVEMBER 10, 2020 12:01:51 PM
Edited by: Vishwajeet Deshmukh | Government Law College Mumbai, IN
William H. Widen, Professor of Law at the University of Miami School of Law, in Coral Gables, Florida discusses the fragile nature of the rule of law and explains why protecting this asset must be a priority for a new Biden administration...
The United States has an invaluable asset: the rule of law and its historic role in protecting property rights. This essay highlights the fragile nature of this asset and explains why protecting this asset—particularly in the eyes of foreign investors—must be a priority for a new Biden administration (as it should be for the remainder of a Trump administration).
The executive branch, supported by congress and the courts, acts as custodian for this most valuable asset across administrations regardless of the political party. The United States has been, and remains, a safe haven for investors from around the world in all manner of assets, including U.S. Treasury securities, stocks and bonds, real estate, and intellectual property. The United States increasingly relies on foreign investment to finance its deficit spending, as well as contribute to efficient and low-cost capital raising by United States businesses. If foreign investors came to doubt the security of investments in the United States, or the desirability of its capital markets and exchanges, the negative impression could have disastrous consequences. (A recent New York Times essay/video suggests the world already is unimpressed with how the oldest democracy runs elections.)
President Trump has been criticized for assaults on the rule of law in various spheres of activity (as has the Republican Party), including the rule of law in the economic sector. For example, Professor Michael Klarman at the Harvard Law School highlighted actions taken by the Trump administration against business interests by “selecting winners and losers in the economic marketplace.” Indeed, some actions of the Trump administration have placed this asset at risk. Perhaps paradoxically, President Trump and his supporters leveled similar accusations about the consequences of a Biden administration should it adopt various progressive policies advocated by liberal elements of the Democratic Party.
Recent Trump Administration Executive Orders directed at Chinese technology companies (TikTok and WeChat), and the tentative solution in TikTok, provide a lens to view the problem because these cases created heightened concern over the continued status of the United States as a safe haven for foreign investment. These Executive Orders and their potential resolution must be viewed in context to understand the full extent of the problem. Executive orders are a bi-partisan problem which raise the red flag of possible arbitrary and capricious action creating market uncertainty.
Last August, the Trump Administration issued broad executive orders relating to Chinese technology apps stating “[t]he spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China continues to threaten the national security, foreign policy, and economy of the United States.” The orders followed a unanimous Senate vote to ban TikTok (owned by the Chinese firm ByteDance) from all U.S. government devices. The TikTok order states that “any transaction by any person” with ByteDance or its subsidiaries will be prohibited in 45 days. One consequence: Apple and Google could not offer the app through their app stores. A similar ban applied to WeChat, a messaging app owned by Chinese giant TenCent. Extending the ban beyond WeChat to all of TenCent would have major implications for the video gaming industry because TenCent owns Riot Games (developer of League of Legends) and TenCent holds a major stake in Epic Games (maker of Fortnite).
TikTok immediately raised the rule of law spectre stating: “We are shocked by the recent Executive Order, which was issued without any due process” and vowing to “pursue all remedies available to us in order to ensure that the rule of law is not discarded and that our company and our users are treated fairly – if not by the Administration, then by the US courts.”
One might dismiss TikTok’s response as mere rhetoric or propaganda to counter a climate of rising nationalism and generalized animosity towards China flowing from the COVID-19 pandemic. Moreover, national security concerns rightfully loom large in the equation. This response lacks nuance and context.
The rhetoric from China softened in light of the proposed sale of a 20% interest in TikTok Global to Oracle and Walmart—leaving an 80% interest with the Chinese investment vehicle. By raising the “rule of law” issue, however, TikTok knew it was injecting a powerful counterargument into the controversy that should duly concern the United States government. Indeed, raising this spectre may have contributed to a tentative outcome which TikTok recently said was not a “worst-case scenario” and was “unfair” but at the same time “reasonable”. Indeed, a 20% divestment solution looks much better than a transfer of majority control to a United States investment vehicle—as often required for investment by the United States or multinational firm in a business in a socialist country—let alone complete divestment to which China vehemently objected (though President Trump favored). The current status of this deal remains uncertain, even though the Trump administration indicated a willingness to accept a 20% divestiture. It is not clear from the public details of the proposed transaction whether it even amounts to a divestiture at all—rather than a complex arrangement in which Oracle performs platform, custodianship, and servicing functions for a fee. Ring-fencing information and intellectual property in exchange for an economic upside of 20% of profits from United States operations should be motivated by national security rather than extracting rents for private parties.
The U.S. Constitution (as well as state constitutions) provide specific protections against impairing the “Obligation of Contract” (Clause 1, Article 10) and taking property for public use without just compensation (5th Amendment); the 14th Amendment protects against the deprivation of property by a state without due process of law. Indeed, the framers inserted the contract clause into the U.S. Constitution to assure foreign lenders that debts would be honored in state courts and not compromised by state legislation forgiving local debtors (it also protected banks based in northeastern cities from disfavored treatment in other states).
While the U.S. Constitution (and its various state counterparts) appear to offer fairly comprehensive protection for contract and property rights, over time these protections have been severely restricted by interpretation. After the Civil War, the prominence of the contract clause in protecting property rights diminished in favor of “substantive due process”—and became largely moribund following the case of Home Building & Loan Ass’n v. Blaisdell. Substantive due process as a concept is now disfavored, with reference to “Lochnerism” a term of opprobrium. (The Contract Clause does not protect against federal government economic regulation which has dramatically increased.) Direct protection for interests in property has fared little better, as the court has accorded disparate and less protective treatment for economic interests in property as opposed to interests in personal rights, such as freedom of religion, freedom of association, and freedom of expression. (See, for example, Kelo v. City of New London.)
This well-known trend lessening protections for economic interests in the U.S. courts does not occur in a vacuum.
President Trump directly attacked the rule of law when he criticized the judiciary, the FBI, and the Department of Justice (and, to a lesser extent, the press). His willingness to pardon or commute sentences for political allies exacerbated this perception. Attempting to force divestiture of TikTok to United States companies via executive order and regulation challenges the sanctity of property rights of foreign investors. Oracle’s founder, Larry Ellison, hosted a fundraiser for President Trump on the same day the Department of Justice urged dropping a Microsoft suit against Oracle, making the perception worse. Is this national defense or an unjustified extraction of value? At a 20% divestiture level, it appears the parties were satisfied that national security and protection of property had been properly balanced.
But concerns over the rule of law do not end with the Trump administration. On the other side of the aisle, progressive elements advocate for reparations (which some see as a harbinger for deprivation of property rights), the prospect of a Biden administration portends higher taxes (which conservative elements might see as “confiscatory”) and the possible appointment of new Supreme Court justices in a so-called “court-packing” scheme might entrench a judicial philosophy likely to continue (if not further erode) limited constitutional protections for economic interests and property rights. Meanwhile, Senator Bernie Sanders has proposed legislation that would impose an estimated $75 billion in taxes on a handful of billionaires. (Balancing these various concerns would be one task for bi-partisan Congressional studies on reparations and the structure of the judiciary—both studies worth starting.) These potential legislative actions of a Biden administration (though potentially worrisome to investors) would follow a deliberative legislative process rather than a unilateral executive action that might be viewed as arbitrary and capricious.
It is in this context that TikTok raised its concerns over the rule of law—and in which the solution of a modest divestment appears to have been reached—at least in principle.
The Trump Administration, Congress, and a future Biden Administration all need to recognize the context in which international investors watch actions taken by the United States Government against TikTok.
On the one hand, it is fully legitimate for the United States to protect its national security—steps to limit the use of apps by United States employees and agencies fall into this camp. As an illustration, nobody questions prohibitions against non-U.S. persons acquiring security interests in various properties of defense contractors—the fear is that a foreign person ought not to acquire possession of a defense asset in a foreclosure. The same concern over protecting U.S. defense assets and secrets applies here to TikTok.
On the other hand, solutions reached to solve legitimate security concerns should avoid the appearance of using executive orders and regulations to extract rents at the expense of foreign investors.
The risks are several. One risk is that, in protecting the legitimate interests of the United States, our politicians paint with a broad brush, risking the creation of the perception that the U.S. is on a path descending into confiscatory policies akin to the nationalization of private party assets. Such a path might play well for short-term political gain as feelings of nationalism are on the rise. But knee-jerk nationalism alarms international investors in the United States. Is it really necessary, for example, for Chinese investors to divest investments in companies like TikTok in order to secure the national defense? Maybe—and we should not shy away from protecting the national interest. But, in financial markets, there is a fine line between perception and reality—indeed perception often becomes reality. While some regulation is undoubtedly necessary and appropriate to protect our National interest, our government decision-makers need to be mindful of the larger context in which these decisions are made and how they will be perceived by the larger international investment community. This is why TikTok’s raising of the rule of law was effective as propaganda even if TikTok posed a security risk.
Another risk is that foreign investors perceive an erosion of respect in the United States court system for property rights—the recent appointment of Justice Amy Coney Barrett, however, is unlikely to create direct concern about protection for property rights. Nevertheless, a plan to expand the number of Supreme Court Justices might create an alarm. A concern about expanding the number of Justices is separate and apart from a concern that the appointment process of Justice Barrett required Republican Senators to completely reverse their stand about the appropriateness of Supreme Court appointments in an election year—also not a good look from a rule of law perspective—but one that is less threatening to investors because the process technically complied with existing law (even if accompanied by hypocritical rhetoric).
This, of course, is why TikTok raised the spectre of the rule of law to oppose the Trump Administration’s Executive Order, to begin with. While the response of the Chinese app maker contains an element of propaganda, it is effective as a rhetorical response precisely because it contains an element of truth. It is not mere advocacy. The United States needs to pay particular attention in these troubled times that we collectively—and in a bi-partisan way—safeguard our national treasure of the rule of law insofar as it protects investment and private property.
Of course, the TikTok saga is far from over. In a lawsuit filed by creators who use TikTok—and not TikTok itself—a federal judge has issued an injunction against the pending November 12 ban on TikTok in the United States based on First Amendment concerns. So the matter remains in a state of confusion—though observers still believe that the ultimate resolution will involve divestment of some TikTok assets or ownership.
The recent delay of the public offering of Jack Ma’s Ant Group on the Hong Kong and Shanghai stock exchanges is instructive. Beijing encourages Chinese hi-tech companies to list shares on Chinese stock exchanges, rather than in the United States. The sudden delay in the Ant Group offering (following a prior announcement of the offering) creates the appearance that Chinese exchanges may not be ready to challenge United States securities markets for dominance. (I say “appearance” because the public statements about the reasons for the delay—including that the provider of financial services retain some risk on loans it originates and concern over financial disclosure) seem sound. Despite the challenges TikTok has faced in the United States, TikTok and Oracle have announced tentative plans for an IPO of TikTok Global within about a year (reportedly in a United States registered public offering). The United States benefits from the impression that delays such as those faced by the Ant Group in an offshore IPO might not have happened here even though the stated reasons for delay would have concerned United States regulators as well. Some observers believe the delay actually resulted from a Jack Ma speech which upset the Chinese regulators—increasing global capital’s fear of arbitrary and capricious regulatory action. Preserving the United States as a safe haven for investment goes hand in glove with hosting the world’s premier exchanges and capital markets.
Our custodians in government need to protect the position of the United States as the preferred location for investment.
William H. Widen is a Professor of Law at the University of Miami School of Law.
Suggested Citation: William H. Widen, Changing of the Guard: The Rule of Law And A Safe Haven for Investment, JURIST – Academic Commentary, November 10, 2020, https://www.jurist.org/commentary/2020/11/william-widen-asset-investment/.
This article was prepared for publication by Vishwajeet Deshmukh, a JURIST staff editor. Please direct any questions or comments to him at commentary@jurist.org.
Opinions expressed in JURIST Commentary are the sole responsibility of the author and do not necessarily reflect the views of JURIST's editors, staff, donors or the University of Pittsburgh.
x x x."
Tuesday, November 17, 2020
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