Wednesday, December 9, 2009 update:
The action, whereby the U.S. Treasury, without authorization by Congress, used TARP funding to force Chrysler LLC into a debtor-client relationship, and then in using that to practically control the corporation in bankruptcy pleadings has raised several constitutional and legal issues on the action.
An amicus curiae brief was filed with this case in October, including the involvement of a number of advocacy groups and at least one leading constitutional scholar:
- Washington Legal Foundation
- Allied Educational Foundation
- Cato Institute
- George Mason University Foundation Professor of Law Dr. Todd J. Zwycki
Previously, a request before the Court for a stay of the bankruptcy action was denied in July.
Basically, any action taken on this case could be a harbinger for how any further Chrysler bankruptcy proceedings or quo warranto actions could be interpreted by the Court in this matter.
The question is raised: Did the Treasury Department act unconstitutionally in the manner in which it dispositioned certain federal monies?
Tuesday, December 8, 2009 update:
As part of the demand for information about the authority used, Donofrio confirmed, there will be questions about Obama’s eligibility to be president. Donofrio contends that since by Obama’s own admission his father never was a U.S. citizen, Obama was born a dual citizen. The framers of the Constitution, he argues, did not consider a dual citizen to be a “natural born citizen” as required for the presidency.
The burden, then, would shift to Obama and his administration officials to document their constitutional authority for their decisions and their handling of taxpayer money.
If the president cannot document his eligibility to occupy the Oval Office, his presidential task force had no authority to act at all, the case contends.
Pidgeon told WND the plaintiffs in the case are the former Chrysler dealers, and their interests will be paramount.
The goal is “to get them restored,” he said, and “put them back where they were before their contracts were rejected.”
“Our clients are not in this action as ‘birthers,'” he said, citing a term used for people who question Obama’s constitutional eligibility. “Our clients are here to seek redress for wrongs.”
But the case may open doors that have been closed in other disputes over Obama’s eligibility. Most previous cases, at one point or another, have been dismissed because the plaintiffs do not have “standing” – they have not suffered direct injury for which they have a reasonable expectation of seeking redress.
In the case of the dealers, they have suffered financial loss because of circumstances that developed with the government’s intervention in the auto industry.
Original story below the dashed line.
In a Right Side of Life exclusive, I had reported (based on this Portland Civil Rights Examiner posting by Dianne Cotter) that attorneys Leo Donofrio and Stephen Pidgeon have, in fact, gotten together and have been retained by lead Plaintiff James Anderer and other Chrysler dealers to appeal on damages incurred in the Chrysler bankruptcy sale.
Further, the concept of quo warranto — an ancient “prerogative writ” — has been confirmed by Devvy Kidd’s recent telephone conversation with Mr. Donofrio as a petition by which he and Mr. Pidgeon will be challenging the Obama Administration under three counts.
According to Ms. Kidd’s interview, while § 16-3501. Persons against whom issued; civil action states the following:
A quo warranto may be issued from the United States District Court for the District of Columbia in the name of the United States against a person who within the District of Columbia usurps, intrudes into, or unlawfully holds or exercises, a franchise conferred by the United States or a public office of the United States, civil or military. The proceedings shall be deemed a civil action.
She was able to confirm with Mr. Donofrio that the above section is a bit of a “catch-all:”
Leo points out that the statute not only applies to eligibility, but also to the unlawful “exercise” of authority via public office. At the common law, quo warranto was not only used to challenge usurpation of office but also to challenge illegal government actions and the current quo warranto statute was written as a catch all in this regard. So Leo and Steve will bring two counts under 3501, eligibility and illegal use of Government funds. The second count refers to the use of TARP funds to facilitate the Chrysler Bankruptcy sale.
An important aspect of potential “specific injury” may not have been had by creditors, but dealers face substantially greater particular harm:
The 2d Circuit Court of Appeals dealt with this issue as raised by creditors of Chrysler in an appeal of the Sale transaction to which the dealers were not a party. In that decision, the Court of Appeals stated that the issue raised “interesting and unresolved issues”, but the appellants did not have standing based upon their limited injuries. The Chrylser dealers have the requisite injury – loss of their frnachises – to meet the standing requirements. They will raise the issue in the quo warranto petition before the DC District Court.
And it looks like those TARP monies could also play a part in the filings:
You may recall that former Treasury Secretary Paulson refused to use TARP funds to bail out the auto industry indicating that to do so was not proper under the statute. A Congressional bill to allow TARP funds to be used for that purpose failed in the Senate, but the Obama administration went forward with it anyway.
Donofrio and Pidgeon also plan a third quo warranto count based upon 16-3521(2) of the quo warranto statute…
Here’s what § 16-3521. Persons against whom issued; civil action (2) states:
A quo warranto may be issued from the Superior Court of the District of Columbia in the name of the District of Columbia against –
(2) one or more persons who act as a corporation within the District of Columbia without being duly authorized, or exercise within the District of Columbia corporate rights, privileges, or franchises not granted them by law in force in the District of Columbia.
The proceedings shall be deemed a civil action.
As Ms. Kidd puts it:
In other words, the actions taken by the government were an illegal exercise of corporate authority. The government has acted as a political agent (acting as board of directors) against corporations using taxpayer money to restructure the auto industry under their vision.
In the posting, Mr. Donofrio emphasizes that he and Mr. Pidgeon represent the best interests of the dealers, leaving open the possibility of a settlement.
In reference to the bankruptcy deal, Messrs. Donofrio and Pidgeon shared with me that, per a recent article by Neil Roland of Automotive News, the House is crafting a new bill for the rejected dealers:
WASHINGTON — House leaders crafted a bill over the weekend that would provide third-party arbitration for rejected General Motors Co. and Chrysler Group dealerships using criteria more favorable to dealers than those proposed by the automakers last week.
The legislation, which is being forwarded to Senate leaders for consideration, would allow dealers who want to appeal their closures to “present any kind of relevant information during the arbitration,” a copy of the new bill shows.
The arbitrator is directed to consider the dealer’s experience, past profitability, current economic viability and the demography and geography of the local market, the legislation says.
“The arbitrator shall balance the interests of the covered dealership, the covered manufacturer and the public and shall decide, based on that balancing, whether or not the covered dealership should be reinstated,” the bill says.
Nevertheless, both attorneys say that the proposed legislation would not satisfy their client’s needs and that they will be moving forward with litigation. “Unless the legislation returns our clients to their franchise agreements as they were in effect prior to the Chrysler Bankruptcy,” they said, “we will be forced to press on in the courts.”
In other news related to Mr. Donofrio, his Hawaiian UIPA requests are on hold as he focuses on the above.
See the following links regarding the eligibility saga:
- The background:
- The questions:
- The State Department and Sen. Patrick Leahy’s (D-VT) Natural Born Citizen Resolution (April 10, 2008)
TRSoL News (semi-automatically-generated headlines every day): News.TheRightSideOfLife.com
Photo courtesy BrightCove