Minimum Competence

This Day in Legal History: Brushaber v. Union Pacific Railroad Co.

On January 24, 1916, the United States Supreme Court issued a pivotal decision in Brushaber v. Union Pacific Railroad Co. This case arose after Frank Brushaber, a shareholder of Union Pacific Railroad, filed suit against the company to challenge the federal income tax imposed on its earnings. Brushaber argued that the tax violated the Constitution by not being apportioned among the states in accordance with Article I, Section 9. His challenge directly questioned the recently ratified 16th Amendment, which granted Congress the authority to tax incomes without apportionment.

In its ruling, the Supreme Court upheld the constitutionality of the federal income tax. Writing for the majority, Chief Justice Edward Douglass White rejected Brushaber's claims, affirming that the 16th Amendment eliminated the requirement for income taxes to be apportioned among the states. The Court emphasized that the amendment did not create a new power of taxation but clarified Congress's authority to levy such taxes directly.

This decision was a turning point in U.S. legal and financial history, solidifying the federal government's ability to collect income taxes as a primary source of revenue. It set the stage for the modern tax system and allowed for the growth of federal programs funded through taxation. By resolving disputes surrounding the 16th Amendment, Brushaber helped ensure the stability of income taxation as a legal and constitutional practice.

A federal judge in Seattle has temporarily blocked a controversial executive order issued by President Donald Trump seeking to end birthright citizenship, which is guaranteed under the 14th Amendment. The order, titled “Protecting the Meaning and Value of American Citizenship,” denies citizenship to children born in the United States if their parents lack legal status, are in the country temporarily, or if both parents fail to meet citizenship or residency criteria. This policy would leave thousands of American-born children stateless, without access to federal benefits, or documentation like passports, effectively excluding them from many civic rights and responsibilities.

Senior U.S. District Judge John Coughenour declared the order "blatantly unconstitutional," citing the clear language of the 14th Amendment and Supreme Court precedent, such as United States v. Wong Kim Ark (1898), which reaffirmed birthright citizenship regardless of parental status. The executive order, effective February 19, 2025, has drawn multiple lawsuits from states and advocacy groups. Washington Attorney General Nick Brown, joined by Oregon, Illinois, and Arizona, among others, emphasized that the order could deprive an estimated 150,000 children nationally of citizenship annually. This includes 4,000 children in Washington state alone.

The order also demands that federal agencies refuse to issue documents recognizing citizenship to these individuals, which state officials argue oversteps presidential authority and contradicts constitutional protections. Plaintiffs highlight significant harm to state-funded healthcare, education, and welfare programs, as federal support for these services is tied to recognized citizenship status. The ruling echoes previous legal challenges to Trump-era policies, such as the blocked travel bans, underscoring judicial limits on executive power in shaping immigration and constitutional rights​​.

Judge in Seattle blocks Trump order on birthright citizenship nationwide

US judge temporarily blocks Trump's order restricting birthright citizenship | Reuters

The U.S. Supreme Court has allowed the government to enforce the Corporate Transparency Act (CTA), requiring millions of businesses to disclose their beneficial ownership to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The Court stayed an injunction that had blocked the law’s enforcement, enabling the government to proceed while litigation continues in the Fifth Circuit Court of Appeals, with oral arguments scheduled for March 25. However, the January 13 filing deadline remains suspended.

Justice Neil Gorsuch supported the stay, suggesting the Court resolve the legality of nationwide injunctions in such cases. Justice Ketanji Brown Jackson dissented, arguing the government hadn’t demonstrated urgency for immediate implementation. The CTA mandates most U.S. businesses incorporated before 2024—and approximately five million new annual incorporations—to report ownership details, with noncompliance subject to penalties. FinCEN estimates that 32.6 million entities will need to comply, though 10 million have already submitted information voluntarily.

The CTA aims to combat financial crimes by curbing the misuse of anonymous shell companies, a measure supported by transparency advocates. Critics, including businesses and advocacy groups, argue the law infringes on constitutional rights. Texas Top Cop Shop Inc., represented by the Center for Individual Rights, has challenged the law’s constitutionality.

The law’s enforcement has been turbulent, with multiple court rulings and delayed deadlines. FinCEN has encouraged voluntary reporting during this period, warning of fines of $500 per day for noncompliance if enforcement resumes. Meanwhile, businesses and advisors have been urged to preemptively file to avoid potential technical issues when mandatory compliance takes effect.

Supreme Court Allows Corporate Transparency Act Enforcement (1)

President Donald Trump signed an executive order on January 23, 2025, creating a cryptocurrency working group tasked with drafting new regulations and exploring the establishment of a national cryptocurrency stockpile. The order aims to overhaul U.S. digital asset policy, a key promise from Trump's campaign. It protects banking services for crypto companies, bans the creation of central bank digital currencies (CBDCs), and pushes for clear regulatory frameworks for digital assets, including stablecoins.

The order also directs the U.S. Securities and Exchange Commission (SEC) to rescind guidance that had imposed high costs on companies safeguarding crypto assets, a move welcomed by the industry. Venture capitalist and former PayPal executive David Sacks was named chair of the working group, which includes leaders from the Treasury Department, SEC, and Commodity Futures Trading Commission.

This directive marks a shift from the previous administration's stricter stance on cryptocurrencies, which included lawsuits against major exchanges like Coinbase and Binance for alleged violations of U.S. law. Industry leaders and policymakers applauded the move, viewing it as a significant step toward mainstream adoption of digital assets and the development of consistent regulations.

The executive order also mentions evaluating the creation of a digital asset stockpile potentially sourced from cryptocurrencies seized by law enforcement, though details on its implementation remain unclear. Bitcoin’s price reached record highs earlier in the week, reflecting investor optimism over Trump’s pro-crypto administration.

Trump orders crypto working group to draft new regulations, explore national stockpile | Reuters

This week’s closing theme is by Johann Christoph Friedrich Bach.

Johann Christoph Friedrich Bach (1732–1795), often referred to as the "Bückeburg Bach," was the ninth son of Johann Sebastian Bach and a distinguished composer in his own right. Born in Leipzig, Johann Christoph Friedrich grew up immersed in music under the tutelage of his father, yet he developed a unique style that bridged the Baroque and Classical eras. He spent most of his career at the court of Schaumburg-Lippe in Bückeburg, where he served as Konzertmeister and later as Kapellmeister. His music, characterized by elegance and charm, often reflected the tastes of the emerging Classical period while retaining the counterpoint and depth of his father's influence.

Bach composed a variety of works, including symphonies, keyboard pieces, and chamber music, yet his output remains relatively underappreciated compared to his more famous siblings, such as Carl Philipp Emanuel and Wilhelm Friedemann. Johann Christoph Friedrich passed away on January 26, 1795, leaving behind a legacy of compositions that deserve wider recognition.

For this week’s closing theme, we’ve chosen his Flute Sonata in D minor, HW VIII/3.1 - I. Allegretto non troppo, arranged for trumpet, cello, and harpsichord. This arrangement brings new energy to Bach’s graceful and lyrical lines, blending the interplay of the trumpet’s bright tones with the rich warmth of the cello and the intricate textures of the harpsichord. The Allegretto non troppo exemplifies Johann Christoph Friedrich’s ability to balance expressive melodies with delicate intricacies, creating music that is both accessible and profound. As we remember his contributions to music on the anniversary of his passing, let this piece inspire reflection on the enduring artistry of the Bach family.

Without further ado, Johann Christoph Friedrich Bach’s Flute Sonata in D minor, HW VIII/3.1 - I. Allegretto non troppo, enjoy!