TandaPay Cannot Be Regulated — 2
Court precedent as it applies to TandaPay — Andrew Mabon
TandaPay is a blockchain project which seeks to provide groups the ability to self insure. This post provides a complete index for the work done on the project.
Citizens United v. FEC 558 U.S. 310 (2010)
“Our nation’s speech dynamic is changing, and informative voices should not have to circumvent onerous restrictions to exercise their First Amendment rights… Corporations, like individuals, do not have monolithic views” 558 U.S. 1, 48 (2010)
Effectively, the Supreme Court is stating its own institutional belief that the dynamics of free speech have changed over the course of national and jurisprudence history. No longer is speech simply at a pulpit or a podium or a street corner as was the case in times before mass communication mediums. In modern times, free speech as protected by the First Amendment is also understood to cover contributions and financial expenditures on behalf of a candidate or causes the contributor feels strongly about; it is a sincerely held belief. Even in collective agreement situations- monolithic views, as the Court terms- that collective thought likely breaks in ways trivial and substantial from other groups with just as sincere values. Tanda groups follow this logic: a collection of trusted members pooling funds do not share the societal monolithic view that only “traditional” insurance companies can provide adequate or affordable deductibles.
Further, in a rare move on the part of a usually-traditional and deferential Court, the author notes that technologies facilitating communications, including financial transactions as they relate to the First Amendment, have exacerbated the free speech dynamic. Mobile apps and blockchain technologies also provide a cyber space of free speech, and this is just as resolutely covered by the letter and spirit of the First Amendment. There can be no misconstruing this: the free, voluntary transfer and exchange of funds in a tanda pool of like-minded, trusted members is extended the same freedoms and protections as hecklers, jesters, orators, and later, physical paper ads, radio ads, and election signs. Collective pooling and consensual transfer of funds, regardless of the mechanism- so long as legal- is speech, and those speaking in these ways are within the bounds of the Constitution.
“We decline to adopt an interpretation that requires intricate case-by-case determinations to verify whether political speech is banned, especially if we are convinced that… th[e] corporation has a constitutional right to speak on it.” 558 U.S. 1, 15 (2010)
Referring to the government’s effort through the FEC to stymie expenditure funds for political candidates, the Court refuses to accept before it each and every instance of potential free speech disputes, particularly when pertaining to the medium of speech and the value of said speech. Further, if a large insurance corporation may speak- verbally or financially- on issues that affect its operation and longevity, then it follows that a tanda group of consenting individuals, concerned about unaffordable premiums, coverage amounts, their share or equity in a pool of funds, etc., are afforded the exact same First Amendment protections shown Citizens United and, say, Progressive Insurance Company. Shared concern of mutually-identifiable issues within a group give rise to TandaPay’s sufficient claim of protection under the letter and spirit of free speech principles enshrined in our Constitution.
“Corporations and unions…. May establish, however, a “separate segregated fund” (known as a Political Action Committee or PAC) for these purposes. The monies received by the segregated fund are limited to donations from stockholders and employees of the corporation, or, in the case of unions, members of the union.” 558 U.S. 1, 24 (2010)
This line is from the opening pages of the ruling, in the context of how entities may funnel money into causes supporting particular candidates or positions over another. The key element of this quote as it relates to TandaPay’s operation, as well as the conceptualization of what a tanda group is, rests on “separate segregated fund” and the inherent limitations of donation-based operations. The tanda group, regardless of pre-existing or formed trust over time, separates the contributions of members into a virtual lock box, further segregated by individual lock boxes that are associated individuals’ contributions to the fund. The nexus of TandaPay’s operational functionality is, then, and by the Court’s interpretation, fundamentally no different than a corporation establishing a PAC in favor of one candidate’s position or values.
When a tanda forms and its members agree to a per-person contribution for deductible coverage and claim payments, those funds are no longer the individual’s, though they do eventually receive the money back. The difference aside, politicians and corporate entities themselves have no access to the funds they place in the collective pool; it serves the benefit of “other”- ideas, people affected by them, the bottom line, corporate interests, etc. If their cause or candidate loses, however, then the expenditure is lost and does not return, refund, or rebate (tax write-offs aside). Alternatively, in the benefit, losses from TandaPay groups are limited, and theft or abrogation of terms are impossible or highly unattractive, as the fund pool is capped at merely what all have contributed. Limited loss but maximized free speech capacity with funds as the vehicle are untouchable under the Court’s analysis of the First Amendment.
Janus v. AFSCME 585 U.S. 1 (2018)
“In simplest terms, the First Amendment does not permit the government to compel a person to pay for another party’s speech just because the government thinks that the speech furthers the interests of the person who does not want to pay.” 585 U.S. 1, 14 (2018)
Here the Court is acknowledging not only that many non-union members find the application of agency fees by unions to cover overall collective bargaining costs burdensome, but once more, by virtue of financial transfer in the course of decision making, rules them unconstitutional and violative of the principles underpinning the First Amendment. Tanda groups follow such holdings of the Court: free speech is inherently protected (and in recent, precedent-establishing ways) in the course of the free exchange of currency between and among contributors to a cause.
But at the crux of this protection is the requirement that a tanda remain comprised of trusted, close members who avail voluntary consent to the group cause. One is neither coerced nor compelled to be a member, but rather asked for a discretionary transfer, and therein lies the separation of an archaic concept of a labor union and a more contemporary vision as put forth by TandaPay.
An important concern of the Court is also brought forth in arguments, where the government’s position is found to be faulty and onerous; implicity, the self-interested are protected. A one-two punch against the prevailing status quo is delivered in a seminal case as this one, building on Citizens eight years earlier, when an agency of the government admonishes that which it is a part of, at once agreeing with the plaintiff and chastising government for failing to keep up with the times.
Union power and membership is in precipitous decline, but that is not to say the motivations that gave rise to such employee power and community trust a century ago do not remain; really all persons at their core, beyond any trivial pursuit of material, desire trust; stability; uplift; community development. These are core values in humanity and business; community and corporation, and continue in a TandaPay-linked tanda. Ergo, tandas operate as a new concept but very much within the confines of established Constitutional precedent.
“It is also not disputed that the State may require that a union serve as an exclusive bargaining agent for its employees- itself a significant impingement on associational freedoms that would not be tolerated in other contexts.” 585 U.S. 1, 33 (2018)
The primary focus of the Court’s ruling here is that prevailing state law in those states that do permit collective bargaining of public-sector workers (approx. 28) is a substantial affront to First Amendment protections guaranteed to all individuals, regardless of their capacity outside or inside the workplace. When one is required to operate and communicate through the negotiating power of a singular institution of whom they are not a voluntary member, or from whom some element of their power is coercive, one lacks true First Amendment-guaranteed freedoms. Insurance companies are a near mirror image of the Court’s statement here. Insurance companies aggressively apply subrogation clauses in contracts with their members, preventing them from seeking settlements outside of their own negotiating process.
If, in the course of a civil trial arising from personal injury, for example, the injured claimant obtains a compensatory award from the jury, it is sometimes included against and used to pay for your insurance claims against the defendant; ergo, the insurer makes money. You are not necessarily permitted to obtain what could be a more favorable award through settlement between the parties, outside of your insurer protections. Union structures are quite similar in this context, where the Court strikes such practices down.
The Court’s ruling is promising for any future expansion of the scope of tandas, as they lack such restrictions on First Amendment protections, with no singular negotiating authority. As a contributing collective, no one member holds final say, all approve claims, and contributory value is equitable. Such an organization is as rejection of rigid community structures and buttresses the originalist context of the First Amendment meant to ensure the free expression of speech as much as the free exchange of currency.
“For one thing, it would be unconscionable to permit free speech rights to be abridged in perpetuity in order to preserve contract provisions that will expire on their own in a few years’ time. “The fact that [public-sector unions] may view [agency fees] as an entitlement does not establish the sort of reliance interest that could outweigh the countervailing interest that [nonmembers] share in having their constitutional rights fully protected.”
Starting off on a new chain of legal analysis on the part of the Court, the author of the ruling hacks away at the inherently temporary nature of an agency-fee based contract, that ensures paying members are fully-covered to their benefit; but, while still covering non-members, are starving those same people of free speech and association protections.
Additionally, the Court shatters status quo practice and turns over prior rulings that permitted unions to engage in such entitlement-based fee-collection practices. It also shows that such practices are a subtle but nonetheless significant abridgment of the First Amendment. As will be stated in later analyses of following quotes, the essential component of speech-protected engagement in a community must be volunteerism and consent. Free speech rights of individuals are not secondary or subject to the whims of a majority, they must flow freely. In a tanda group, consent is key.
This ruling both applies to tandas and TandaPay’s business model, and underscores how beneficial it is in a legal sense that it doesn’t- the Court’s turning down prevailing practices in public sector unions’ use of agency fees as detrimental to free speech presents an equivocal opposite scenario of the tanda concept. The law simply doesn’t interact with TandaPay’s approach, as it lacks coercion or any violative practice of free speech principles or practices as established in court precedent.
Buckley v. Valeo, 424 U.S. 1 (1976)
“A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached.” 424 U.S. 19 (1976)
TandaPay permits the consensual, free, and voluntary creation of tandas, or groups, of contributors in a fund pool covering deductible expenses and costs. Contributions to the tanda, likewise, are voluntary, but a general minimum amount per person is set and agreed upon entry. The essence of the point of this voluntary contribution in a coverage mechanism like TandaPay is underscored by the Court’s refusal to accept limitations on the free expenditure of money, extrapolated to mean that it is unconstitutional and restrictive of the First Amendment. Further, free speech is not meant to be rebuffed out of fear of discomfort or threats to status quo- whether economic or political.
Major companies and major political parties are subject to financial expenditure rulings regardless of size, employees, annual operating income, etc. The same holds for tanda groups, which may be as small as 20 or as great as 100- or more- and this citation from Buckley further illustrates that restrictions are prohibited on the audiences reached and potentially solicited for, or considering contributing to, group funds. Following the voluntary formation of the groups, the Court’s holding is valid all the same- there is no legal restriction on the number of issues a group may discuss or seek to address collectively (similar to PAC), nor are there any restrictions on how “deep” the groups may go to pool funds to ensure adequate coverages for the group. As discussed above, the inherent life-breathing aspect of a tanda is its formation, which is only effective with an audience, or contributors.
A contribution serves as a general expression of support for the candidate and his views, but does not communicate the underlying basis for the support. The quantity of communication by the contributor does not increase perceptibly with the size of his contribution, since the expression rests solely on the undifferentiated, symbolic act of contributing. At most, the size of the contribution provides a very rough index of the intensity of the contributor’s support for the candidate. A limitation on the amount of money a person may give to a candidate or campaign organization thus involves little direct restraint on his political communication, for it permits the symbolic expression of support evidenced by a contribution but does not in any way infringe the contributor’s freedom to discuss candidates and issues. While contributions may result in political expression if spent by a candidate or an association to present views to the voters, the transformation of contributions into political debate involves speech by someone other than the contributor.
Given the important role of contributions in financing political campaigns, contribution restrictions could have a severe impact on political dialogue if the limitations prevented candidates and political committees from amassing the resources necessary for effective advocacy.” 424 U.S. 21 (1976)
Once more, the Court holds throughout its ruling the paramountcy of free and voluntary contribution. Further, the Court’s holding underscores how those contributions necessarily instill confidence in political systems, but this is also applicable to economic standards as well. When a company or corporation contributes, say, $2,000,000 to a candidate-affiliated Super PAC, that entity can be said to evince “a very rough index of the intensity of the contributor’s support for the candidate”. Index of the intensity of course meaning level of support, tanda group contributors’ amounts placed in the pool necessarily underscores the Court’s identification of “intensity”.
If tanda members with fairly close relations, or adhering to the two-degrees of separation proposed among the group structure, are willing to contribute even more than the $30 example threshold amount- say, $50- then that lays plain the confidence of the group in itself, its coverages, and its trust among each other to uplift the shared goals of the tanda. This is categorically no different than large corporations funneling huge sums of money to candidate PAC’s that support causes near and dear to them- and profitable.
Further, the Court here addresses the singular act of a contribution itself as the nexus of protected free speech. Contributions are voluntary, or at least should be and as addressed as much in Citizen’s United and Janus. Contributions are an essential element of First Amendment protections because curtailing or otherwise restricting the expenditure of money through contribution essentially diminishes those protections. Therefore, tanda groups are no different. Restricting their viability through prohibitions on creation or participation, or further restricting the voluntary contribution of funds to the pool, violates the First Amendment in the same way as addressed in Buckley.