Saturday, March 7, 2009

Apropos Laptop Bans,

check out this funny NYU Law Revue teaser. Thanks to Sasha and Chelsea Rosenthal for the pointer.

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DoJ Seeks Dismissal of Suit Against Yoo:

Although the Obama Administration disagrees with John Yoo's legal analyses, the Justice Department continues to defend Yoo in civil suits filed by former detainees. Politico reports:

At a court hearing Friday morning in San Francisco, government lawyers said that despite the change in administration, there has been no change in Yoo's government-run legal defense against a suit brought by Jose Padilla, an American citizen who spent more than three years in a Navy brig after being designated as an enemy combatant.

"This administration has made no secret that we disagree with many of the previous administration's legal policies on national security issues," a Justice Department spokesman, Matt Miller, said after the court session. "Nevertheless, we generally defend employees or former employees of the department in litigation filed in connection with their official duties." . . .

A Justice Department official, who asked not to be named, said the judge was advised that Obama appointees signed off on the legal strategy. "The positions taken in the briefs have been fully vetted within the administration," the official said.

Meanwhile, John Yoo defends himself from criticism over the content of just-released memos he drafted while serving in the Office of Legal Counsel.

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Those Narrow-Minded Russkies:

"A Muscovite with digits in his name has been declared outside the law," reads the headline. The offender, БОЧ РВФ 260602 (I hope this encoding works for you folks) is now six and a half, but the government has refused to give him a birth certificate, which I take it portends more refusals of important documents in the future. The name is an abbreviation for "biological object of a person of the families Voronin and Frolov, [born] 26 June 2002."

I don't get it: They allow backwards Rs and upside down Vs, but balk at at a few digits? For more on U.S. decisions on the subject, see here (though they are about name changes, not initial naming decisions).

Thanks to Victor Steinbok for the pointer.

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PLOL, or The Slow Death of the Law Review As We Know It:

[I don't think anyone has already posted on this, but apologies if I'm wrong; this seems like the sort of thing VCers would be all over/DavidP]

The directors of many of the leading law libraries (Harvard, Duke, Stanford, Yale, and a number of others) have recently adopted a very important policy statement bearing on the future of law reviews, calling for

". . . all law schools to stop publishing their journals in print format and to rely instead on electronic publication coupled with a commitment to keep the electronic versions available in stable, open, digital formats."

It's an important development, I believe. It's true, of course, as those of you who have been or are currently in law school know, that law library directors do not have any direct responsibility for law review publication; as a result, the statement is only of significance as an advisory matter, and it can't be implemented without a lot of other things happening and a lot of other people on board. Nonetheless, I think it adds an important voice to the debate about the future of the law review, and another hole in the hull of the law review ship, which has been taking on water for some time now.

The model here is the remarkable (and remarkably successful) Public Library of Science (PLoS), which now publishes 7 different open access journals in biology and medicine. [Full disclosure: I was involved in the formation of PLoS, not through any formal affiliation but because of close ties to one of its founders, my friend and sometime co-author Mike Eisen] Open access in the bio-medical sciences is a big deal, in a way that open access in the legal literature is not; there's a very large amount of money at stake, for one thing, as well as a more direct and obvious link to peoples' health and well-being. Loosening the stranglehold of the print publishers on information in that field is no small thing, and while PLoS hasn't eliminated that stranglehold, it has made serious inroads; it makes me reasonably confident that a true PLoL can't be too far behind. [And no discussion of open access in law should fail to note the many years of hard work by Peter Martin and Tom Bruce, of the Cornell Legal Information Institute, and Mike Carroll of Villanova, in trying to build a true open access platform for law and legal information]

Update: The Open Access Movement is the target of a bill making its way through the House of Representatives; Mike Eisen and Larry Lessig have been leading the charge against it, and I wish them luck - it's nothing short of outrageous that the NIH should be doling out public money for research and NOT making sure that research is available to the public.DavidP

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Friday, March 6, 2009

Huh?

Reuters, among others, reports:

U.S. Secretary of State Hillary Clinton met Russia's foreign minister on Friday, symbolically presenting him with a red "reset" button to improve ties that sank to a post-Cold War low during the Bush administration....

"I would like to present you with a little gift that represents what President Obama and Vice-President Biden and I have been saying and that is: 'We want to reset our relationship and so we will do it together,[']" said Clinton, presenting Lavrov with a palm-sized yellow box with a red reset button.

Clinton and Lavrov had dinner on the 18th floor of the Intercontinental Hotel in Geneva.

They joked about the Russian misspelling of "reset" on the button before sitting down at an oval table with aides. "We worked hard to get the right Russian word. Do you think we got it?" Clinton asked. "You got it wrong," said Lavrov, telling her "Peregruzka" meant "overcharge." ...

How does that happen? Unless I'm unfamiliar with some alternative meaning — and one that the Russian foreign minister was unfamiliar with, too — "peregruzka" doesn't remotely mean "reset." "Gruz" means "load," and "pere-" means "over-"; "peregruzka" means "overload." (I take it that "overcharge" is used in the story to mean an excess of an electric charge, which is to say an electrical overload, not "overcharge" in the more common English sense of charging too much money.) Doesn't the State Department have fluent translators to do such things? Or am I indeed missing some alternative meaning?

Thanks to InstaPundit for the pointer to the story.

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Self-Identification of the Political Views of College Faculty: InsideHigherEd has the scoop, based on a survey of "22,562 full-time college and university faculty members at 372 four-year colleges and universities nationwide." When asked to state their political views, professors responded:
Far left-- 8.8%
Liberal-- 47.0%
Middle of the Road-- 28.4%
Conservative-- 15.2%
Far right-- 0.7%
H/t: DartBlog

Related Posts (on one page):

  1. New Study May Underestimate Left-Wing Preponderance in Academia:
  2. Self-Identification of the Political Views of College Faculty:
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One More Disappointed Reader: Recently seen in the referrer logs, a visit to the Volokh Conspiracy from someone who googled "hot chicks." I'm guessing this post from Eugene last month isn't what the visitor had in mind.
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Nathan Sales Defends the Patriot Act:

I'm not an expert on the Patriot Act, but I confess that my general impression of it is negative (all these libertarians I hang around with, I guess).

But my colleague Nathan Sales has a column in the Christian Science Monitor that gives me some pause. His argument is that the Act itself is fundamentally ok and not really that radical and that its proper use is a matter of prudence and oversight not a radical limiting of its reach (or its elimination). For a skeptic like me, I found it to be quite thought-provoking.

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Bankruptcy Mortgage Modification Update:

UPDATE 8:31 p.m.: I just received an email that this version on Thomas, although the most recent that is there, is the version of legislation as it was introduced yesterday and doesn't contain action on amendments. But from what I can tell reading news stories, the provisions I focus on below (the "void against public policy" and clawback provisions) are still in the legislation.

One of my concerns about allowing modification of mortgages in bankruptcy was that it might refreeze credit markets because of provisions in mortgage-backed securities that allocate bankruptcy losses above a certain threshold pro rata to all tranches of MBS's.

Yesterday the House passed a revised version of the legislation that contains this remarkable clause (section 124):

SEC. 124. UNENFORCEABILITY OF CERTAIN PROVISION AS BEING CONTRARY TO PUBLIC POLICY.

No provision in any investment contract between a servicer and a securitization vehicle or investor in effect as of the date of enactment of this Act that requires excess bankruptcy losses that exceed a certain dollar amount on residential mortgages to be borne by classes of certificates on a pro rata basis that refers to types of bankruptcy losses that could not have been incurred under the law in effect at the time such contract was entered into shall be enforceable, as such provision shall be contrary to public policy. Notwithstanding this section, such reference to types of bankruptcy losses that could have been incurred under the law in effect at the time such contract was entered into shall be enforceable.

So to deal with the problem, Congress will simply declare those loss-allocation provisions in those contracts to be simply "unenforceable... as being contrary to public policy." Well, I have to confess that provision really just leaves me speechless. Has anyone ever seen anything like this--just a blanket declaration that a particular contract term is simply void against public policy, when it is a freely-bargained for, risk-allocation term? Does it solve the potential credit freeze problem? I guess it depends on how those losses will be allocated when there is no longer any contract term by which to allocate them. Especially given that the whole point of that contract term was to be the catch-all for losses that are not otherwise allocated under the MBS contracts. It is hard to see how this provision alone solves the problem of the uncertainty in valuing these securities if we don't know how the losses will otherwise be allocated.

I had also read reports that indicated that there were new protections in the legislation for recoupment by lenders when a borrower sells a home for a profit after stripping it down in bankruptcy. If so, I can't find it. All that I see is the same restrictions, namely that if the debtor sells the house while in bankruptcy there is a sliding scale starting at 80% recoupment in the first year down to 20% in the fourth year, but I don't see anything post-discharge, unless I missed something in reading through the legislation.

While on this topic should also note that I should correct the record on one minor point in my WSJ column on which I made a mistake. It relates to the precise effect of modification eliminating the ability to modify car loans in the 2005 bankruptcy amendments. In the article I referred to a recent NY Fed Staff report that looked at the elimination of the ability to modify car loans ("cramdown") in the 2005 bankruptcy reform legislation. The authors of the study found that eliminating the cramdown power substantially reduced interest rates on auto loans. But this finding was not the centerpiece of their paper and so they didn't report the actual estimate of the reduction in interest rates as a result. They were interested in the effect of exemption laws on car loan interest rates, not this intermediate step. I mis-read the paper as reporting a 265 basis point drop in the spread on car loans as a result of eliminating the cramdown power (if you read the paper, or at least the draft as it was at that time, you will see that it is hard to figure out what the authors are saying). That was actually the overall mean spread on car loans above the cost of funds, not the reduction as a result of eliminating the cramdown power. They stated that it had an effect but didn't report the actual figure for the reduction in the spread so it turns out that you can't tell just by looking at the paper itself how large the effect is. The WSJ asked me for a specific figure that day right before deadline and I supplied them this figure, which was a mistake.

I asked the authors if they would re-run the regressions and estimate the actual value of the reduction in the spread as a result of eliminating the cramdown, which they graciously agreed to do. I understand that they will be posting an updated version of the paper that includes this result. But to summarize, they find that the impact of eliminating cramdown was a reduction in interest rates of 56 or 46 basis points depending on the regression treatment and that this result is highly statistically significant (at .01 level). So they estimate that the reduction of the interest rate spread was about 50 basis points off of the 265 average spread, or about a 19 percent drop in the spread as a result (and an additional 12 points in states with unlimited exemptions (which is marginally significant). Obviously my mistake was inadvertent because it was irrelevant to my argument whether the effect was big and statistically significant or really big and statistically significant.

One thing that I should add here is that the effect of bankruptcy reform is not just 15 basis points and marginally significant, as some readers apparently have concluded. Ironically, I have even been criticized because I did not accept this finding as the conclusion of the study. The reason I did not report that finding is because it has nothing to do with the issue I was looking at. That estimation in the paper relates to a completely different question--it is a difference-in-difference regression that looks at whether state exemption laws have an independent effect on top of the general effect of eliminating the car loan cramdown. It was obvious to me at the time that this was not and could not be the correct figure. I knew that I was looking for a general baseline figure of some sort, and the authors only mention one baseline figure and read in context I thought it was the correct one and it was obvious that the difference-in-difference results was not the correct one. But in fact, there was another baseline number that they did not report. I won't belabor the point except to note that the findings in the difference-in-difference regressions simply are not the correct estimates of the impact of BAPCPA on car loan interest rates.

So the authors found that effect of BAPCPA on car loan spreads was substantial in size and highly statistically significant although I supplied the incorrect point estimate. I should note that the purpose of citing the study in the article was to simply illustrate the point that if you increase the risk of lending (such as by allowing modification of loans) this will lead to higher interest rates and costs for borrowers, which was shown with statistical significance. I was not to try to make a prediction about the exact size of the interest-rate increase that will result.

In fact, whether the effect for cramdown of home mortgages will be bigger or smaller than for car loans will depend on several factors. First is the expected risk that property values will fall in the future, which is different for car loans because cars are depreciating assets so they will almost certainly decline in value. Second, the size of the decline--for car loans it is probably a large number of relatively small decreases in value while for houses the value declines are likely to be much larger. The size of the decline is also relevant to how much value a lender might lose relative to losses from a foreclosure. Third is the risk that bankruptcy judges will tend to set the interest rates on mortgages in bankruptcy at a below-market rate, so that the lenders will get less from the modified mortgage than they would by reinvesting the money. For reasons discussed in my op-ed, this is likely to be a real risk.

Fourth, and perhaps most importantly, is what will be the effect of permitting mortgage modification on leading to increased bankruptcy filings. Cramdown of car loans were different from mortgages in several ways. Car loans were shorter-term loans and would be paid off during the Chapter 13 case. As a result, cramdown of a car loan reduced the payments owed to the secured lender but those savings were instead just made available to unsecured creditors. So there was no incentive for borrowers to file bankruptcy just to cramdown car loans because the debtor would not be able to capture the surplus. With mortgages, however, it is likely that most homes that are underwater today will rise in value in the future. And the cramdown will apply for the entire duration of the loan--up to 30 years. So it extends beyond the time of the chapter 13 plan. This means that an underwater borrower today who believes his home will rise in value in the future will have an incentive to file chapter 13 and capture future appreciation--an incentive that is absent in the context of car loans.

This means that permitting cramdown of home mortgages will almost certainly have an incentive effect of increasing bankruptcy filings at the margin, unlike for car loans. Moreover, there are certainly at least some people out there who would not be willing to permit foreclosure on their homes, but would be willing to file bankruptcy if it meant that they can strip-down their mortgages and capture future appreciation. So while there will be some substitution of foreclosure for bankruptcy, there will be a new pool of people who would be unwilling to permit foreclosure, but would be willing to file bankruptcy.

We don't know how big this group might be. Supporters of the mortgage modification proposal argue that this group is likely to be small because of the difficulties of bankruptcy and the negative impact on their credit scores and so that those who will file bankruptcy will do so only as a last resort. That seems unduly optimistic to me. In fact, a year or two ago there was a general belief that few people would walk away from their homes just because they were underwater, because of the hardship of foreclosure and the negative impact on their credit score. But I think it is abundantly clear at this point that there are a lot of people who are doing exactly that. And I don't see why we'd expect the use of bankruptcy to be any different. In fact, in his recent paper, Eric reports that 48% of homeowners reported in a survey that they would consider walking away from their homes if underwater by over $100,000. Moreover, given the huge surge of filings that are likely to result from allowing mortgage modification, bankruptcy judges are going to by necessity given only passing scrutiny to these cases, so the opportunities for fraud and abuse are likely to increase substantially as well.

So what this means is that we don't know how many people will choose to file chapter 13 and write-down their mortgage who otherwise would have not defaulted and instead paid their mortgages. But if the number of homeowners is nontrivial--and the events of the past two years lead me to believe that it probably is nontrivial--this will significantly increase bankruptcy filings. More importantly, it will increase bankruptcy filings among people who otherwise would not have been in foreclosure but instead would have paid their contracted loans. So for this group of borrowers it is a pure loss to the lenders because they are not saving foreclosure losses.

Update:

Calvin Massey provides an historical analogue to this provision--the Gold Clause cases. An excellent example in many ways. Calvin concludes that the provision likely is constitutional. Whether it is a good idea is a different question.

Update:

See update at top.


Layoffs at the Volokh Conspiracy: In light of all the layoff news everywhere else in the legal world, I wanted to reassure our readers that there are no layoffs presently planned here at the Volokh Conspiracy. Yes, we did lose our big client in Pajamas Media. Yes, in the current economic situation, our PPB — that is, Profits-Per-Blogger — are way down. Yes, there are some VC bloggers who use our luxurious office space and outstanding staff support and haven't written a post in months or years. (I assure you, Erik Jaffe exists!) But we're committed to giving you the same quality product in this down economy that we have given you in the boom times. And it will be all at the same low low price you have come to expect. — The Mgmt.

  UPDATE: It with regret that I announce that we are having to make reductions in our support staff. In the current economic situation, no blog can maintain the same staffing levels as before. I am therefore announcing a 50% reduction in our staff, effective immediately. Although there is no severance package, staff members who have been terminated will be sent a free Volokh Conspiracy t-shirt in the mail. Please expect 60-90 days for delivery. — The Mgmt.

  ANOTHER UPDATE: The difficult economic climate for law-blogging has led the management team to make yet another difficult decision: We are closing the Volokh Conspiracy's Washington DC blogging office. All bloggers and staff will now have to work out of their homes or coffee shops. We regret to have to make this decision, but we are confident that this move will allow us to remain among the premier law blog sites on the Internet well into the future. — The Mgmt.

  YET ANOTHER UPDATE: Effective immediately, the summer intern law blog program is suspended. — The Mgmt.
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Diversity Requirements and the Virginia Bar:

John Rosenberg has a long post on the Virginia Bar's efforts to promote "diversity" and whether they would survive a legal challenge.

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Peter Robinson on the ObamaCons Disillusionment:

Peter Robinson has a piece in Forbes.com today on the discovery by David Brooks, Christopher Buckley, and David Gergen that President Obama is actually a liberal:

A couple of implications here are worth noting. The first is that a deep, recurring pattern of American life has asserted itself yet again: the cluelessness of the elite.

Buckley, Gergen and Brooks all attended expensive private universities, then spent their careers moving among the wealthy and powerful who inhabit the seaboard corridor running from Washington to Boston. If any of the three strolled uninvited into a cocktail party in Georgetown, Cambridge or New Haven, the hostess would emit yelps of delight. Yet all three originally got Obama wrong.

Contrast Buckley, Gergen and Brooks with, let us say, Rush Limbaugh, whose appearance at any chic cocktail party would cause the hostess to faint dead away, or with Thomas Sowell, who occupies probably the most unfashionable position in the country, that of a black conservative.

Limbaugh and Sowell both got Obama right from the very get-go. "Just what evidence do you have," Sowell replied when I asked, shortly before the election, whether he considered Obama a centrist, "that he's anything but a hard-left ideologue?"

The elite journalists, I repeat, got Obama wrong. The troglodytes got him right. As our national drama continues to unfold, bear that in mind.

I was actually present at that interview with Thomas Sowell and I recall that was the moment at which it began to dawn on me that there was simply no factual basis for believing that Obama was anything except extremely liberal.

I don't know that I would agree with Peter that the main problem here is the cluelessnes of the elite, although that is at least part of it. The passion for these ObamaCons and their desire to believe against all evidence that Obama was a moderate I think was spurred in large part because of their revulsion against Sarah Palin. In that sense, the polite establishment position was to distance oneself from the yahoos in the Republican Party in favor of the urbane Obama (although I'm not quite sure how Joe Biden fits in here). Whatever the motivation, the desire of many to believe that Obama was a moderate was really just a triumph of wishful thinking and a desire to believe that was true, rather than any actual facts.

I think that there were a few other factors that drove the willingness of Brooks, Buckley, Gergen, et al., to believe that Obama was a moderate, despite all evidence to the contrary. First, Obama himself seems like he should be a political moderate because his personality comes across as so calm and moderate. Most people, whether far-right or far-left tend to have more extreme personalities as well. Obama doesn't come across as a radical bomb-thrower (remember Brooks's fawning profile of Obama's discussion of Niebuhr?). So there is a tendency to infer from Obama's calm personality that he is a moderate. Second, some of the ideas that are floating around (like new tax increases and aggressive regulation in the midst of a recession and unrestrained budget-busting spending) just seemed so implausible that I think there was a tendency to discount them as something that Obama simply wasn't serious about and that perhaps they were nothing more than political posturing. Turns out it looks like he was serious about them.

As I confessed back in the fall, until I really looked at his positions carefully (prompted by Sowell's comment) that Obama's extremism really sunk in to me. For those with more of a personal crush on Obama (or a desire to want to believe in him) it looks like it took a longer time for this to sink in.

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J.W. Verret on the Risks of Public Ownership:

My colleague J.W. Verret has an interesting article on Forbes.com on the dangers of public ownership of banks and why government investment may be "self-defeating" in returning them to financial health:

This is because governments have two unique qualities: immunity from insider trading laws and a political interest in using their shareholder power to pander to special interests.

A healthy share price makes for a healthy bank. But healthy share prices require healthy profits. When governments become powerful shareholders in companies, the profit motive is inevitably watered down.

After European governments privatized government-run industries in the 1980s they maintained powerful equity positions in the privatized firms. Those companies were twice as likely to need to subsequently obtain subsidies and bailouts at the public trough.

***

Another important consequence of the bailout is that Treasury's access as a regulator to inside information about banks makes it the ultimate inside trader of stocks in financial institutions. Luckily for the federal government, it has sovereign immunity from insider trading laws.

The market will significantly discount the value of banks in which Treasury is a shareholder. Since the dominant player in that market has the opportunity to engage in insider trading, it makes little economic sense for other investors to buy bank shares. Why would anyone want to play the game when they know the game is rigged?

To protect against insider trading liability, corporate executives file "10b-5 plans" that detail future share sales. Treasury should be bound to the same kind of plan to assure investors that it will not use inside information to trade its shares.

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Supreme Court Vacates Fourth Circuit Al-Marri Case and Remands With Order To Dismiss: Seems like the right move to me, and certainly not unexpected. Via SCOTUSblog, here is the order:
The application of the Acting Solicitor General respecting the custody and transfer of petitioner, seeking to release petitioner from military custody and transfer him to the custody of the Attorney General, presented to The Chief Justice and by him referred to the Court is granted. The judgment is vacated and the case is remanded to the United States Court of Appeals for the Fourth Circuit with instructions to dismiss the appeal as moot. See United States v. Munsingwear, Inc., 340 U.S. 36 (1950).
This means is that the 4th Circuit's splintered opinion in Al-Marri will be wiped off the books, and if the issue ever comes up again there won't be any controlling precedent either way.
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Speeches in Southern California Next Week: Next week, I will be giving 3 Federalist Society sponsored talks on "Was Lochner Right? Natural Rights and the Fourteenth Amendment" in Southern California. Here are the details:

Tuesday, March 10 @ 5:00 p.m.:
Western State University of Law
1111 N State College Blvd
Fullerton, CA 92831
Wednesday, March 11 @ noon:
Inland Empire Chapter of the Federalist Society
Tamale Factory
Avila Terrace, 3663 Main Street, Riverside CA

Cost: $30
Lunch will be served. Check-In: 11:45 a.m.

To make reservations, please call, fax, or e-mail Kaiya Avery. Please remit your check for the event to:
"The Federalist Society"
Attn: Kaiya Avery, c/o Knobbe, Martens, Olson & Bear, LLP, 3403 Tenth Street, Suite 700, Riverside, CA 92501
RSVP E-mail: kaiya.avery@kmob.com
Phone: (951) 781-9231 Fax: (951) 781-4507
Thursday, March 12 @ 12:15 p.m.:
California Western School of Law
Roy Bell Reading Room
350 Cedar Street San Diego, CA 92101

Related Posts (on one page):

  1. Speech Tomorrow in Riverside, CA:
  2. Speech Tomorrow in Fullerton, CA:
  3. Speeches in Southern California Next Week:

Make Mine Freedom: A new release from the Moving Picture Institute: A 1948 cartoon extolling the virtues of freedom and capitalism over statism. Somehow, the film seems eerily appropriate today. (Although it condemns "isms" of all stripes -- such as fascism, socialism, and communism -- clearly libertarianism is an label that was later formulated to describe the pro-freedom view of this film.)


Takings Clause (with Parochial Link to Two of the Volokh Conspirators):

One of the cool things about my part-part-part-time gig with Mayer Brown LLP is that I get to help my colleagues on some of the most fascinating constitutional law cases around. One very recent example is the certiorari petition in Empress Casino v. Giannoulias, a case involving a pretty deep split on the important question of when a monetary exaction becomes a taking for Takings Clause purposes. The split has been aggravated by the Court's fractured opinion in Eastern Associates v. Apfel (1998) — 4-1-4 decisions tend to do that — though it existed even independently of that case.

Our very own Ilya Somin, together with Eric Claeys, Richard Epstein, Nicole Garnett, and Eric Kades, has also signed on to a law professors' amicus brief in support of the petition, written by Stephen B. Kinnaird and his Paul, Hastings, Janofsky & Walker colleagues; and this amicus brief from the Mountain States Legal Foundation, one of the oldest pro-property-rights (among other things) public interest law firms, is also very good. If you're a Takings Clause buff, check them out — this is important and very interesting stuff.

Related Posts (on one page):

  1. George Will on the Empress Casino Takings Case:
  2. Wall Street Journal Editorial on the Empress Casino Takings Case:
  3. Takings Clause (with Parochial Link to Two of the Volokh Conspirators):
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Left/Right bloggers have huge split on Obama spending. Right bloggers did not expect it:

In this week's National Journal poll of political bloggers, we see one of the largest splits between Left and Right bloggers ever recorded in this this poll (which is several months old). The first topic was a four part question about whether Obama was over-reaching with global warming tax, health care spending increase, doubling the national debt, or cutting itemized deductions for high earners. On the Left, the answer was a 100% "no" on three of those, with a 92% "no" on the debt. On the Right, the answer was 86-93% "yes" on all of them.

I voted "yes" on everything, and wrote: "He's even worse than George W. Bush on wild spending increases and reckless deficits. That's like being even fatter than Fat Albert."

The second question was whether Obama was governing more to the left or more to the center than expected. For the Left bloggers, the plurality winner was the write-in: "about as expected." Things were about equally divided between the other two choices.

For the Right bloggers, "more to the left" was the choice of 73%. I was among those who was surprised, and wrote: "Almost as far left as I feared he might be during the campaign, based on his record as an elected official. During the transition period, I mistakenly thought that some of the appointments portended a more centrist approach, but that has certainly not been the case on fiscal policy."

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Firing an Employee for Gun Possession in Car Parked on Company-Controlled Parking Lot

is just fine, holds the U.S. Court of Appeals for the Sixth Circuit in Plona v. UPS. This is the latest phase in a case I noted two years ago (though that post came before it became clear that the parking lot was indeed company-controlled). Here's the relevant discussion:

Ohio has traditionally adhered to the employment-at-will doctrine, which permits an employer to terminate an at-will employment relationship “for any cause, at any time whatsoever, even if done in gross or reckless disregard of [an] employee’s rights.” But ... the Ohio Supreme Court [has] carved out an exception to the employment-at-will doctrine for situations where the employee’s discharge contravenes public policy. To maintain [such a] claim, a plaintiff must establish: (1) the existence of a clear public policy manifested in a state or federal constitution, statute or administrative regulation, or in the common law (the “clarity element”); (2) that a dismissal under circumstances similar to the plaintiff’s dismissal would jeopardize the public policy (the “jeopardy element”); (3) that the plaintiff’s dismissal was motivated by conduct related to the public policy (the “causation element”); and (4) that the employer lacked an overriding legitimate business justification for the dismissal (the “overriding justification element”). The clarity and jeopardy elements are questions of law to be decided by the court.

Here, Plona asserts that the “clear public policy” at issue is manifested in the Ohio Constitution, Article I, § 4, which states that “[t]he people have the right to bear arms for their defense and security ....” He reasons that UPS violated this policy by terminating him for possessing an unloaded firearm in a parking lot that he characterizes as quasi-public property by virtue of its use by UPS customers and its ownership by a party other than UPS.

Plona’s argument is without merit. Although the Ohio Constitution provides a general right to bear arms, the state certainly does not have a “clear public policy” of allowing employees to possess firearms on the premises of their private employers. To the contrary, the Ohio legislature has specifically provided that employers may limit their employees’ rights to bear arms:

Nothing in this section shall negate or restrict a rule, policy, or practice of a private employer that is not a private college, university, or other institution of higher education concerning or prohibiting the presence of firearms on the private employer’s premises or property, including motor vehicles owned by the private employer.

Plona does not dispute that the parking lot in question is owned by UPS’s wholly owned subsidiary BT-OH, or that the lease between UPS and BT-OH affords UPS full control over the parking lot. UPS was thus plainly within its rights, as codified in § 2923.126(C)(1), to prohibit its employees from possessing firearms in the parking area. Because Plona cannot show that UPS violated a clear public policy of the state of Ohio, his wrongful-termination claim fails as a matter of law.

By the way, to anticipate the likely "of course no court would ever hold this as to other rights, such as free speech" arguments: In most states, nongovernmental employers are allowed to fire employees based on their speech, even speech that's entirely outside employer property. (For a list of the states that take a contrary view, see this post chain; I had hoped to blog about more of the statutes than I noted there, but didn't have a chance to.) There's certainly no constitutional constraint on firing employees for their off-the-job speech -- the Bill of Rights generally applies only to government entities, not private employers -- and there's no federal statutory constraint on it (except as to a few types of speech, such as union advocacy).

The matter varies as to other constitutional rights:

  1. Free exercise of religion: Federal antidiscrimination statutes (and similar statutes in many states) generally does bar employers from firing employees based on the employees' religion, including the employees' religious practices, and even some on-the-job practices (though it depends on whether accommodating the practice would be unduly burdensome to the employer).

  2. Right to get pregnant, and right to abortion: A federal antidiscrimination statute (and similar statutes in many states) also generally bans discrimination based on pregnancy, which some courts have interpreted as covering discrimination based on abortion. See, e.g., Doe v. C.A.R.S. Protection Plus, Inc., 527 F.3d 358 (8th Cir. 2008).

  3. Right to marry, or not to marry: Quite a few states' statutes also bar employers from firing employees based on employees' marital status.

  4. Right to sexual autonomy: Quite a few states' statutes bar employers from firing employees based on employees' sexual orientation, which would presumably cover firings based on at least certain kinds of exercises of the right to sexual autonomy. Some states also ban discrimination based on lawful off-premises recreational conduct, which might cover some firings for sexual activity.

  5. Other rights: I know of no laws that bar employers from firing employees for the exercise of a right to self-incrimination, or a right to refuse to allow the police to search the employee's property, and the like.

So courts generally have not barred private employers from firing people based on the exercise of their constitutional rights (or, to be precise, their rights to do things free of government restriction). Congress has, as to a few rights (free exercise of religion, free speech as to labor matters in many contexts, reproductive rights). Some but by no means all state legislatures have, as to a few more rights (right to marry, right to sexual autonomy, and, in fewer states, freedom of speech). And a few states have done this as to the right to bear arms, even in some states on company parking lots. But the only general pattern here is that these rules are almost always created by legislatures and not by courts (with a few exceptions for things such as jury service and whistleblowing to government agencies, and even that not always).

Thanks to How Appealing for the pointer to the Sixth Circuit decision.

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One Dollar --> Happiness, Guaranteed!

Because I like you all so much, I've decided to share my formula for guaranteed happiness — well, almost guaranteed. It's quite simple (and the idea's not original to me, though I can't recall from whom* I got it in order to give proper attribution):

1. Buy a lottery ticket - the bigger the payoff, the better. 2. Pay with (untraceable) cash. 3. Burn the ticket. 4. Watch the televised drawing of the winner.

You will be very, very happy when your number is not picked as the winner, which it will not be — I'm 99.9999999999% certain of that. You want better odds at getting happiness for $1, you have to talk to the Man upstairs.

[*thanks neurodoc!!]

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Better Legal Treatment Mandated for Lawyer Defendants Than for Others?

That's what Sayers v. Prugh, Holliday & Karatinos, an Eleventh Circuit decision from earlier this week, suggests. Sayers sued her employer for alleged failure to pay overtime, but her lawyer didn't even call the defendant to negotiate a payment before filing suit. The defendant ultimately accepted a small settlement:

Sometime after discovery closed, Defendants tendered an offer of judgment under Federal Rule of Civil Procedure 68 for $3,500 plus any attorney’s fees and costs to which the district court determined Plaintiff was entitled. Defendants denied all liability in the Rule 68 offer. Plaintiff accepted the Rule 68 offer.... Plaintiff, through her lawyer, timely moved for her litigation expenses [which were potentially available under the federall overtime statute]. She asked the district court to award her $13,800 in attorney’s fees and $1,840.70 in costs....

[T]he district court denied attorney’s fees and costs. The district court wrote that “there are some cases in which a reasonable fee is no fee” and found that this case was such a case.

Now it may well be reasonable to award little or no money in fees and costs when a plaintiff's lawyer fails to use less expensive dispute resolution techniques — calling or writing — and instead files suit right away. But what troubles me is that the court's rationale didn't focus on protecting defendants generally, or protecting courts from having to deal with needless lawsuits generally. Rather, it focused chiefly on civility between lawyers (albeit with an eye towards eventually reducing litigation overhead as a result of such greater civility):

Defendants are lawyers and their law firm. And the lawyer for Plaintiff made absolutely no effort — no phone call; no email; no letter — to inform them of Plaintiff’s impending claim much less to resolve this dispute before filing suit. Plaintiff’s lawyer slavishly followed his client’s instructions and — without a word to Defendants in advance — just sued his fellow lawyers. [Footnote: This explanation counts for little: a lawyer’s duties as a member of the bar — an officer of the court — are generally greater than a lawyer’s duties to the client. See Malautea v. Suzuki Motor Co., 987 F.2d 1536, 1546 (11th Cir. 1993) (“An attorney’s duty to a client can never outweigh his or her responsibility to see that our system of justice functions smoothly. This concept is as old as common law jurisprudence itself.”); Thomas v. Tenneco Packaging Co., 293 F.3d 1306, 1327 (11th Cir. 2002) (“Independent judgment is an essential ingredient of good lawyering, since attorneys have duties not only to their clients, but also, as officers of the court, to the system of justice as a whole.”) (internal quotation marks omitted).]

Plaintiff’s lawyer showed little concern for the district court’s time and energy and no courtesy to his fellow lawyers. As the district court saw it, this conscious disregard for lawyer-to-lawyer collegiality and civility caused (among other things) the judiciary to waste significant time and resources on unnecessary litigation and stood in stark contrast to the behavior expected of an officer of the court. [Footnote: The customs of professional courtesy were important to the district court. In its written order, the district court used these words: “This Court is not ruling that a pre-suit letter is always required, but in this case, the Plaintiff’s lawyer did not even make a phone call to try to resolve the issue before filing suit. The Defendant is a law firm. Prior to filing suit in this local area, it is still reasonable to pick up the phone and call another lawyer so it won’t be necessary to file suit. The defense proffered by Plaintiff’s lawyer for not doing so is that his client instructed him to file suit first and ask questions later.... [T]he Court reminds him that the lawyer is the officer of the Court, not the client. This [C]ourt will not permit lawyers to file unnecessary litigation and palm it off on their clients.”]

The district court refused to reward — and thereby to encourage — uncivil conduct by awarding Plaintiff attorney’s fees or costs. Given the district court’s power of oversight for the bar, we cannot say that this decision was outside of the bounds of the district court’s discretion. [Footnote: We have said that a court may not sanction a lawyer under its inherent powers absent a showing “that the lawyer’s conduct constituted or was tantamount to bad faith.” We have assumed that awarding no attorney’s fees and costs constitutes some informal sanction. Nevertheless, even if bad faith is required, we conclude that the conscious indifference to lawyer-to-lawyer collegiality and civility exhibited by Plaintiff’s lawyer (per his client’s request) amounted to harassing Defendants’ lawyers by causing them unnecessary trouble and expense and satisfied the bad-faith standard.]

We strongly caution against inferring too much from our decision today. These kinds of decisions are fact-intensive. We put aside cases in which lawyers are not parties. We do not say that pre-suit notice is usually required or even often required under the FLSA to receive an award of attorney’s fees or costs. Nor do we now recommend that courts use their inherent powers to deny prevailing parties attorney’s fees or costs. We declare no judicial duty. We create no presumptions. We conclude only that the district court did not abuse its discretion in declining to award some attorney’s fees and costs based on the facts of this case. [Some paragraph breaks added.]

Much of what the court says is quite reasonable, to a point. A lawyer's duties as officer of the court may well be greater than the lawyer's duties to the client — consider for instance the duty of candor to the court. And uncollegial behavior between lawyers as representatives of the parties can indeed waste the time of the court as well as hurting the clients.

Litigation is often a long process, in which many steps — for instance, discovery — can be done either very expensively, through repeated arguments before the court, or less expensively but often with the same practical result, by agreement between the parties and their lawyers. Human nature being what it is, such agreement is much less likely if the lawyers have been needlessly unpleasant to each other. So rudeness among lawyers may indeed lead to unnecessary consumption of the court's time and of the clients' money, often without even any real tactical advantage to either client. (Sometimes hardball or even unpleasant behavior does benefit the lawyer's client, but often it doesn't.)

But all those things apply regardless of who the clients are. Better treatment of lawyer-defendants than doctor-defendants or businessperson-defendants strikes me as much more troublesome, whether the treatment is justified as a matter of "civility" or otherwise. Lawyers should be civil to nonlawyer adversaries as well as to lawyer adversaries. And nonlawyer defendants should be as entitled as lawyer defendants to the benefit of either rules or (as here) discretionary judicial decisions calling for (for example) prelitigation discussion rather than immediate and expensive filing of lawsuits.

This having been said, I acknowledge that there can be nonlaughable public-regarding justifications for better treatment of lawyer defendants: It's possible, for instance, that the ill will generated by uncivil treatment by lawyer A of lawyer defendant B will cause acrimony between A and B in future cases, and will thus waste future courts' time and future clients' money. That wouldn't play out the same way if B weren't a lawyer. But it seems to me that such speculation shouldn't suffice to justify legal decisions that expressly discriminate in favor of lawyers-as-defendants.

Thanks to How Appealing for the pointer.

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West Coast Jefferson's Moose Sighting:

Just wanted to drop a note and invite any of you West Coast VC-ers who might happen to be in the neighborhood this coming Monday to a talk I'll be giving about my book over at the Stanford Law School around lunchtime (12:50 - 2). It should be interesting - I think I've got a pretty good talk prepared, and my guess is there will be some folks there with some interesting thoughts on how this Jefferson's moose idea does, or doesn't, help us figure out what's going on on the Net and/or what we might do about that.

And some of you may recall a few weeks ago I noted the strange coincidence that the folks digging the foundation for the new Thomas Jefferson Law School building in San Diego had unearthed an almost-complete skeleton of a woolly mammoth. It's pretty funny; here I go and spend a dozen years or so writing a book that is all about Jefferson's rather remarkable interest in (read: obsession with) questions of size, and scale, and the search for really, really big animals -- and a couple of weeks after it is published they find a mammoth under the Jefferson Law School?!

Well, things get, as Lewis Carroll said, curiouser and curiouser: Underneath the mammoth, they've uncovered the skeleton of a 40-foot baleen whale! Seriously! [and now I'm reasonably certain that if they keep digging, they'll turn up an apatosaur or two under there]. Dean Rudy Hasl of the Law School was quoted as saying it was "amazing to find such enormous land and sea creatures within 10 feet of one another" -- I'll say!!

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Effects of Payday Lending Regulations:

Substantive regulation of consumer credit generally has one intended effect and three unintended consequences. The good effect is less of whatever it is that is regulated. So if regulators cap interest rates through usury regulations, for instance, interest rates on average will be lower. But there are also unintended consequences: (1) term repricing (i.e., substitution of up-front fees like annual fees, downpayments, or points), (2) product substitution, such as less use of the regulated product (such as credit cards) and more use of alternative products (such as layaway or payday lending), and (3) if term and product substitution is not perfect, there will be credit rationing. The basic question for regulators, then, is whether once the benefits and costs of the regulation are tabulated, do the overall benefits exceed the costs.

Jonathan Zinman of Dartmouth has an interesting new paper out on the effects of payday lending regulation in Oregon that looks at these factors. Here's his findings (as summarized in the abstract):

Many policymakers and some behavioral models hold that restricting access to expensive credit helps consumers by preventing overborrowing. I examine some short-run effects of restricting access, using household panel survey data on payday loan users collected around the imposition of binding restrictions on payday loan terms in Oregon. The results suggest that borrowing fell in Oregon relative to Washington, with former payday loan users shifting partially into plausibly inferior substitutes. Additional evidence suggests that restricting access caused deterioration in the overall financial condition of the Oregon households. The results suggest that restricting access to expensive credit harms consumers on average.

And in the paper he fleshes out some of the substitution effects--the substitution effect for payday lenders seems to be primarily for checking overdraft protection and late bill payments (presumably in preference to bounced checks) along with some residual rationing effect:

I find that the Cap dramatically reduced access to payday loans in Oregon, and that former payday borrowers responded by shifting into incomplete and plausibly inferior substitutes. Most substitution seems to occur through checking account overdrafts of various types and/or late bills. These alternative sources of liquidity can be quite costly in both direct terms (overdraft and late fees) and indirect terms (eventual loss of checking account, criminal charges, utility shutoff). Under the broadest measure of liquidity in the data, the likelihood of any expensive short-term borrowing fell by 7 to 9 percentage points in Oregon relative to Washington following the Cap. This jibes with respondent perceptions, elicited in the baseline survey, that close substitutes for payday loans are lacking.

Next I examine the effects of the Cap on the summary measures of financial condition that are available in the data: employment status, and respondents’ qualitative assessments of recent and future financial situations. Estimates on individual outcomes are noisy but consistent with large declines in financial condition. Estimates on a summary measure of any adverse outcome—-being unemployed, experiencing a recent decline in financial condition, or expecting a future decline in financial condition— suggest large and significant deterioration in the financial condition of Oregon respondents relative to their Washington counterparts. As such the results suggest that restricting access harmed Oregon respondents, at least over the short term, by hindering productive investment and/or consumption smoothing.

This finding is interesting for a couple of reasons. First, a number of researchers have observed that despite the "high" APR on payday loans, the cost of a payday loan is probably less than the cost of bounced check once the returned check fees are taken into account. It looks like there is some evidence that consumers are using payday loans (and related products like overdraft protection and late bill payments) to prevent bounced checks. Second, some research has suggested that many consumers who are unable to gain access to payday loans they generally turn to pawn shops as the next-best substitute. Zinman finds in surveys that about 15 percent of respondents report that if they were unable to get a payday loan they would have turned to something like a pawn shop, car title loan, or credit card (there is some evidence that consumers use payday loans even when they could use credit cards for some reason). So overdraft protection loans, Zinman suggests, are closer and less-inferior substitutes for payday lending.


Bring Back Bubba! - On Missing Bill Clinton:

Columnist Steven Chapman is missing Bill Clinton, a sentiment that has often occurred to me in recent years as well:

If Barack Obama achieves nothing else in his presidency, he may do something that once seemed impossible: give a lot of people who aren't crazy about his party a new respect for Bill Clinton.

Clinton, for all his appetites and excesses, was a cautious, centrist sort of Democrat. He had innumerable ideas for things the government could do, but most were small and fairly innocuous. He was willing to go along with Republicans on some of their sound ideas—such as balancing the budget, reforming the welfare system, and expanding foreign trade.

He focused on making government better, not making it bigger. He didn't greatly enlarge Washington's role in our lives. He proclaimed—or conceded—that the "era of big government is over...."

Obama's fiscal blueprint builds on profligate habits established by George W. Bush. Under Clinton, federal spending fell to 18.4 percent of gross domestic product—the lowest level since 1966. By 2007, it was up to 20 percent. By 2019, according to the administration, it would rise to 22.6 percent.

This increase may not sound like much, but it is. Before the current recession began, reports budget analyst Brian Riedl of the conservative Heritage Foundation, government spending amounted to about $24,000 per household. Under Obama's plan, it would exceed $32,000 per household (in inflation-adjusted dollars). Someone will have to pay for every cent of that spending, and it won't be just the rich.

In retrospect, Clinton's record looks very good compared to that of both of his successors, each of whom presided over massive expansions of government. Among the many flaws of Obama's recently passed stimulus bill is its undermining of the 1996 welfare reform act, one of Clinton's greatest achievements.

There is no need to romanticize Clinton. Government growth was constrained on his watch in part because his worst instincts were checked by a Republican Congress, and he in turn checked theirs. As a general rule, divided government leads to limited government. Obviously, Obama has also been able to take advantage of a massive economic crisis, the kind of event that often provides opportunities for expanding government power. Clinton's relatively impressive record was in part the product of the political constraints he faced (no big crisis to exploit, and a Congress controlled by a hostile opposition party during his last six years in office).

Still, Clinton appears to have had a genuine commitment to welfare reform and free trade, among other market-oriented policies. No such tendencies are evident in Obama. I never knew how much I would miss Bubba until he was gone.

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Garry Kasparov on Putin:

Russian opposition leader and former world chess champion Garry Kasparov argues that Vladimir Putin's days are numbered. Kasparov may be right that elite and public anger at the economic crisis and Putin's poor handling of it might lead to the collapse of his regime. I am less optimistic than Kasparov, however, about the likelihood that a post-Putin Russian government will be better than the current one. Kasparov seems to assume that Putin's fall will open the door for pro-western liberal democrats like Kasparov himself. I hope he is right, but I fear that ultranationalists and possibly the communists are in a stronger position to inherit Putin's mantle. They have greater influence in powerful institutions such as the military and secret police, and may well also have greater support from Russian public opinion. As I noted in earlier posts in this series, Russian opinion has been heavily influenced by years of nationalistic and anti-Western propaganda sponsored by Putin even as liberal democratic oppositionists were largely banned from the electronic media.

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Thursday, March 5, 2009

En Banc Sixth Circuit Reverses in Garner v. Mitchell: Back in September 2007, I blogged about a Sixth Circuit case, Garner v. Mitchell, that granted a writ of habeas corpus in a capital case based on a theory that the defendant who had signed a Miranda waiver form hadn't actually waived his rights. I wrote then that "I suspect this decision won't be the last ruling in the case," and it turns out it wasn't: earlier this week, the en banc Sixth Circuit overturned the panel decision.
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Statutory Damages and Music Industry Lawsuits Against Direct Infringers:

A new I/P Colloquium podcast hosted by my colleague Doug Licthman, with Prof. Charlie Nesson (Harvard), RIAA lawyer Steven Marks (RIAA), Prof. Catherine Sharkey (NYU), Prof. Thomas Colby (GW), and Dan Markel (Florida State):

Joel Tenenbaum looks a lot like every other defendant who has been accused by the music industry of illegally sharing copyrighted work online, but with one key difference: his defense attorney is Harvard Law School Professor Charlie Nesson, and Nesson is out to turn his case into a public referendum not only on the music industry's efforts to enforce copyright through these direct-infringer suits, but also on the copyright rules that make the industry litigation possible. In this program, we engage Nesson's key arguments, focusing especially on Nesson's claim that copyright law's statutory damages regime runs afoul of constitutional protections against excessive and/or arbitrary civil damages awards.

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Sanjay Gupta Withdraws:

CNN's Sanjay Gupta has withdrawn from consideration as the next Surgeon General.

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Ted Cruz:

I too know Ted, who's running for Texas Attorney General, and think very highly of him: He is extremely smart, an "outstanding advocate" (as Orin notes), and in general the very sort of serious, accomplished, and highly professional lawyer that I wish we had more of in elected politics. (As Orin points out, he clerked for Chief Justice Rehnquist, has served as Texas Solicitor General, and is now the head of the Morgan Lewis appellate practice.)

Ted's views are more solidly conservative than mine. But I would have gladly voted for him if I were a Texan; not being a Texan, all I could do was contribute to his campaign, and I would encourage others to do the same.

UPDATE: Prof. Rick Garnett (Mirror of Justice) writes:

My friend and co-clerk (with Chief Justice Rehnquist), Ted Cruz, is running for Attorney General (he served for several years as the state's Solicitor General), as a Republican, in Texas. Ted is -- no surprise, for a Republican running in Texas -- a conservative, and he and I have not always seen eye-to-eye on policy matters (including capital punishment. MOJ readers in Texas should know, though, that -- besides being a stalwart friend and a prince among men -- Ted is solid as a rock, and inspiringly passionate, when it comes to school choice and education reform. In fact, the first conference I ever organized I organized with Ted. It was a big event, in Ohio, which dealt with the social-justice and religious-freedom aspects of the school-choice issue. To have such a committed advocate, on such an important matter, in the AG's office, in one of the largest states, would be a very good thing.

I remember that conference, too, and I remember how forceful and effective Ted's speech on the subject was. I think that was only the second time I'd met Ted, and it made me think that here was a man who was going to go far -- which he is indeed doing.

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"Cook County Sheriff Sues Craigslist for Erotic Services Category": Eric Goldman has the complaint and legal analysis over at the Technology & Marketing Law Blog.
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Ted Cruz: Many VC readers know or know of Ted Cruz, a former Rehnquist clerk who was an outstanding advocate as Texas Solictor General and now heads the appellate practice at Morgan Lewis (and who many years ago went to college and law school with yours truly). Ted has announced that he plans to run for Texas Attorney General, and I wanted to flag his website for interested readers.

Heritage Event on Judicial Nominations:

Speaking of judicial nominations, next Wednesday I will participate in a panel at the Heritage Foundation titled “Advice to President Obama on Judicial Nominations.” The other panelists, who will likely have far more interesting things to say on the matter, are former Acting Solicitor General Walter Dellinger and National Journal columnist Stuart Taylor. Former Attorney General Ed Meese will moderate. Details here. While I doubt the Obama Administration takes advice from the Heritage Foundation all that often, it should be an interesting event.

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Senate Republicans Unite to Defend “Blue Slips”:

All 41 Senate Republicans have signed a letter to President Obama calling upon him to renominate one or more of President Bush’s stalled appellate nominees and respect the traditional role of home-state Senators in vetting judicial appointments. The letter notes that President Bush renominated a stalled Clinton nominee (Roger Gregory), and elevated another (Barrington Parker), and asks President Obama to consider doing the same. Further, the letter insists that the Senate Judiciary Committee respect the traditional blue-slip policy “to be observed, even-handedly and regardless of party affiliation.” Failure to take such steps, the letter suggests, could prompt a Republican filibuster of appellate judicial nominees. Specifically, the letter warns that if GOP Senators “are not consulted on, and approve of, a nominee from our states, the Republican Conference will be unable to support moving forward on that nominee” and that Senate Republicans “will act to preserve this principle and the rights of our colleagues if it is not.” Politico and Ed Whelan have more.

I am no fan of the blue slip, particularly with regard to appellate nominees, but I certainly understand why Senators like it. Insofar as seats on the federal circuit courts of appeals are effectively divvied up among the states within each circuit, Senators want to preserve their prerogative to influence appointments to their states' seats. Focusing on preservation of the blue slip also provides common ground for Republican senators who disagree over what makes for a good appellate judge and whether the Senate should consider judicial ideology in the confirmation process. There is no way all 41 Senate Republicans would hold together to oppose an Obama nominee over judicial ideology, temperament, or personal failings (say, failure to pay taxes), but the caucus may well stick together over process and Senatorial prerogative.

It will be interesting to see how the Obama Administration and Senate Democrats, respond to this letter. Then-Senator Obama showed no inclination toward bipartisanship over judicial nominations. He supported the filibuster of Bush nominees, voted against Roberts and Alito and cloture for the Roberts and Alito nominations, and refused to join the “Gang of 14.” Senate Republicans understandably wonder why they should treat Obama’s judicial nominations any better than he treated those of President Bush. Yet continuing tit-for-tat and one-upmanship in judicial nominations has produced little but a deepening, downward spiral of obstruction and politicization of judicial nominations. Perhaps a mild overture by the White House – say the renomination of stalled nominees to the Third and Fourth Circuits – could help turn the page.

So there is no misunderstanding, were it up to me, I would eliminate the blue slip for appellate nominations. I also oppose filibusters of judicial nominations and believe all federal judicial nominations should receive reasonably prompt consideration by the Senate Judiciary Committee and an up-or-down vote. Further, I believe Presidents should receive substantial deference from the Senate in their choice of judicial nominees, and that Senate consideration should focus on qualifications and temperament, not ideology. This was my view when President Bush was in office, and it remains my view today. As a practical matter, however, I also recognize that some sort of accommodation by both sides may be necessary if we are to bring the retaliatory escalation of obstruction to an end.

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Is Caperton Really About Free Speech?

Former FEC Commissioner and longtime law professor Bradley Smith and his Center for Competitive Politics colleague Jeff Patch co-authored an interesting op-ed on Caperton v. A.T. Massey Coal for the WSJ. The case involves a claim that Caperton’s due process right to an impartial tribunal was violated when a justice of the West Virginia Supreme Court, Brent Benjamin, failed to recuse himself despite Massey Coal CEO Don Blankenship’s expenditure of $3 million to unseat the incumbent justice Benjamin replaced. While most coverage of the case suggests the issue is whether wealthy individuals or corporations can “buy” favorable judicial outcomes through campaign expenditures, Smith and Patch suggest that Caperton is best understood as a case about political speech in the context of judicial elections. They warn that a decision overturning the West Virginia Supreme Court’s invalidation of a $50 million verdict for Massey Coal could have profound First Amendment implications.

most stories portray Mr. Blankenship as having in effect "bought" a justice in order to win a favorable outcome in his case. But Mr. Blankenship did not contribute $3 million to Mr. Benjamin's campaign; he spent the money on his own. Mr. Benjamin did not request Mr. Blankenship's aid, discuss the spending with him, agree to anything, or even meet him until 2006. . . .

Does it matter? Even if Mr. Blankenship spent his money without Mr. Benjamin's consent or prior knowledge, even if Mr. Benjamin was legally powerless to stop him, aren't we picking nits? After all, $3 million dollars is a lot of money.

The distinction matters because the difference between campaign contributions and independent spending has, for more than 30 years, occupied a central position in campaign finance law. The Supreme Court has ruled that the government may regulate direct contributions to candidates, which can create at least the appearance of a quid pro quo exchange. But the Court has consistently rejected regulation of independent expenditures, recognizing that if the government can regulate any spending that might influence an election or make a candidate grateful, it can effectively regulate all political speech. . . .

But suppose the Court holds that Justice Benjamin had a constitutional obligation of recusal. What would the standard be, exactly? $50,000? $1,000? $100? Should a judge be expected to scan all campaign-finance filings in an election cycle — especially when some types of independent speech do not have to be reported?

Short of abolishing judicial elections — which many "reform" groups would like to do — there is no credible way to craft a workable recusal standard based on independent speech.

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The Prop 8 challenge after today's oral argument:

I’m out of the business of predicting with confidence what the California Supreme Court will do based on its oral arguments. So I’ll predict without confidence that: (1) the court will hold that Proposition 8 was a valid amendment, but (2) will also hold that the 18,000 same-sex marriages entered between June and November continue to be recognized and valid in California.

It seemed to me that Chief Justice George and (especially) Justice Kennard, both in the 4-justice majority in last May’s marriage decision, were quite skeptical of the argument that Prop 8 was a revision requiring prior legislative approval. Maybe they were being devil’s advocates. But losing those two votes, if they’ve been lost, probably means losing on the challenge to Prop 8.

In principle, the justices’ votes on whether there is a right to same-sex marriage and on whether a proposition repealing that right is an amendment, are independent questions. A judge could believe there’s a fundamental right to same-sex marriage but that the state constitution liberally allows amendments by simple majority votes. On the other hand, a judge could believe there’s no fundamental right to same-sex marriage, but think that once the right is recognized, the elimination of a fundamental right for a suspect class is such a monumental act, and is fraught with so many dangers if allowed to stand as a precedent, that it can be accomplished only by revision.

The main hope, such as it remains, for opponents of Prop 8 lies in the recognition of several justices today, including at least one who dissented from last May’s decision (Corrigan), that Prop 8 is unprecedented and thus calls for a new articulation of what constitutes a revision. Dean Starr agreed the “precise issue has not been before this Court.” As I wrote in response to one commenter yesterday:

I don't think the question is so much whether the precedents "support" the petitioners as it is whether the precedents even address a case like Prop 8. There's never been an amendment in California or elsewhere that (1) stripped a judicially declared "fundamental right" (a term of art that doesn't just mean things that are important to people) from (2) a judicially-protected suspect class (another term of art that doesn't just mean any political minority). There have been other anti-SSM amendments, of course, but never in the teeth of a judicial decision the other way on these points. . . .

It's not true that only quantitatively large changes have been held to be revisions, and the petitioners make no quantitative claim here. Qualitatively significant changes can be revisions, as well. . . .

The question next would be: have the past cases closed and finally defined the set of "qualitative" constitutional changes that should be routed through the more deliberative, laborious, and consensus-dependent revision process? If there's a case to be made that the set isn't closed, it's hard to imagine a stronger candidate than one in which a suspect class loses a fundamental right on the say-so of 52% of the population. . . .

If the California Supreme Court rules in favor of Prop 8, it seems to me it will need to do one of two things: (1) back off from one or more of its rationales from the marriage decision, or (2) candidly acknowledge that a bare majority of Californians can limit fundamental rights for anyone, including vulnerable minorities, under the state constitution. It's hard for me to see how either option would be attractive to the court.

One more brief note from today’s argument. If it wasn’t clear before today, it is now clear that Attorney General Jerry Brown’s role in the case has not only been unhelpful to the petitioners, but has undermined it. His view is that Prop 8 is an amendment rather than a revision “under existing cases” but that Prop 8 is unconstitutional because it took away a right that is on an unspecified and growing list of “inalienable,” natural rights that can never be taken away by any constitutional change process. Brown thus undermines the petitioners on their strongest argument (the constitutional-procedural one) and offers instead a much weaker one (a constitutional-substantive one). It was plain in oral argument that none of the justices were buying it, and that Brown’s lawyer, given an impossible position to defend, could not defend it.

UPDATE: In response to some commenters' concerns about the usurpation of democracy and popular sovereignty if the court invalidates Prop 8, the question in the case is not whether the state constitution can be changed but how. The distinction between revision and amendment is not a judicial invention, but a matter of constitutional text. Unless an amendment is whatever the majority votes for, a position even the legal supporters of Prop 8 don't take, that textual distinction calls for a judgment about how to distinguish them.

Related Posts (on one page):

  1. The Prop 8 challenge after today's oral argument:
  2. Starr on California "amendments":
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Starr on California "amendments":

Defending Proposition 8 in today's California Supreme Court oral argument, Dean Ken Starr agreed that a bare majority of the voters could amend the state constitution to:

(1) Repeal the state constitutional protection of the freedom of speech.

(2) Repeal all rights of gay couples in domestic partnerships, protected both by statute and constitutionalized in judicial decisions. In other words, while he characterizes Prop 8 as "limited," it need not have been limited to be a valid amendment.

(3) Repeal and prohibit all specific antidiscrimination protections for gays and lesbians in all areas: housing, public employment, private employment, education, insurance, public accommodations, and in every other area of life. (That was done by Colorado in its own Amendment 2, struck down in Romer v. Evans under the federal Equal Protection Clause.)

Indeed, one could come up with many other examples of "amendments" under Starr's theory. Mormons can't contribute to political campaigns. Blacks may not marry whites. Immigrant women could be limited to having one baby, or none. These would be amendments and not "revisions" -- requiring more consensus and deliberation -- because they are neither (1) voluminous nor (2) alter the "basic structure of the state government."

Starr would say that at least some of these amendments would be unconstitutional under the federal constitution, which is true (although probably not true of #1 and #2 above). But nothing in the California constitution would prevent a majority from enacting them as amendments.

More on the oral argument later today.

Related Posts (on one page):

  1. The Prop 8 challenge after today's oral argument:
  2. Starr on California "amendments":
Comments

How Low Do You Think the Dow Will Fall?: This morning the Dow Jones Industrial Average is down again another few percent: Right now it is around 6600. I'd be interested to know what readers think about how low the Dow will fall. Over the next 5 years or so, how far down do you expect the Dow to drop?

How far do you think the Dow Jones will drop in the current recession?
It has already reached the low point.
Between 6000 and 6500.
Between 5500 and 6000.
Between 5000 and 5500.
Between 4500 and 5000.
Between 4000 and 4500.
Below 4000.
I don't know.
  
Free polls from Pollhost.com


Comments

Applications to DC-Area Law Schools Are Up: The BLT has the scoop.
Comments

Wednesday, March 4, 2009

Louisiana Capital Post-Conviction Project Lawyer Retracts Claim of Unethical Conduct by Blogger:

Patterico, the blogger involved, quotes the message from the lawyer.

Related Posts (on one page):

  1. Louisiana Capital Post-Conviction Project Lawyer Retracts Claim of Unethical Conduct by Blogger:
  2. Louisiana Capital Post-Conviction Project Lawyer Trying To Suppress Blog Commentary About Case:
Comments

Results of Student Survey About My No-Laptop-in-Class Experiment

are in this memo I wrote to my colleagues (with pie charts). Summary:

What effect did the no-laptop policy have on Strongly negativeSlightly negativeNeutralSlightly positiveStrongly positive
... your concentration in class?2%8%19%40%31%
... your finding the class time interesting?0%6%42%29%23%
... your learning the material?4%19%41%19%17%
... the usefulness of your notes for studying?19%33%21%12%15%
... your overall enjoyment of the course?0%12%34%29%25%

With this in mind, let me offer a few suggestions to my fellow professors:

(1) If you think a no-laptop policy might help, experiment with it. I’ve noted above some reasons why my experience might not be generalizable from the sexy first-semester Criminal Law class. But if some of us get and report more data in other classes, all of us will get a better perspective.

(2) If you want to try a no-laptop policy, tell students up front about the generally positive reaction my students have reported. This should make them more open to the experiment, and at least decrease any immediate flak you might get from the students. No need to start the semester by making your students resentful.

(3) Warn students in the syllabus about the policy, and briefly explain that it’s an experiment from which you’re trying to learn, for the benefit of future students. My sense is that this will help students feel open to the policy, and will help deflect skepticism about whether the policy will work: I’m not sure whether it will work myself, you can tell them — that’s why I’m trying this as an experiment, though I also have some tentative feedback from others that leads me to think it will be a successful experiment.

(4) For the second- and third-year classes, note the policy in the class description, so that students won’t be surprised — or, if they will be surprised, you can politely convey to them that the surprise was their fault.

(5) If you do try such a policy, please conduct a survey after the end of the course, follow up with the students at least once to get a decent response rate, and share the results with the rest of us.

Comments

Wyeth and Deference to Agencies:

One interesting aspect of the Supreme Court's Wyeth decision is its refusal to defer to the FDA's conclusion that state tort suits, of the sort at issue here, conflict with the FDA's regulatory scheme. While the Court does not foreclose deferring to similar agency determinations in the future, Justice Stevens makes clear that it is for courts, not agencies, to determine whether such a conflict exists. While this might not matter much in the immediate future, as I doubt the Obama Administation will be all that aggressive in urging preemption, it will raise the bar for future, pro-preemption administrations.

Here is a portion of the relevant language in the opinion.

In prior cases, we have given “some weight” to an agency’s views about the impact of tort law on federal objectives when “the subject matter is technica[l] and the relevant history and background are complex and extensive.” . . . Even in such cases, however, we have not deferred to an agency’s conclusion that state law is pre-empted. Rather, we have attended to an agency’s explanation of how state law affects the regulatory scheme. While agencies have no special authority to pronounce on pre-emption absent delegation by Congress, they do have a unique understanding of the statutes they administer and an attendant ability to make informed determinations about how state requirements may pose an “obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” . . . The weight we accord the agency’s explanation of state law’s impact on the federal scheme depends on its thoroughness, consistency, and persuasiveness. . . .

. . . we have no occasion in this case to consider the pre-emptive effect of a specific agency regulation bearing the force of law. And the FDA’s newfound opinion, expressed in its 2006 preamble, that state law “frustrate[s] the agency’s implementation of its statutory mandate,” . . . does not merit deference for the reasons we have explained. . . .

In short, Wyeth has not persuaded us that failure-to-warn claims like Levine’s obstruct the federal regulation of drug labeling. Congress has repeatedly declined to pre-empt state law, and the FDA’s recently adopted position that state tort suits interfere with its statutory mandate is entitled to no weight. Although we recognize that some state-law claims might well frustrate the achievement of congressional objectives, this is not such a case.

The folks at the Drug and Device Law blog have some initial thoughts on the decision here.

Related Posts (on one page):

  1. Wyeth and Deference to Agencies:
  2. Court Rejects Wyeth's Preemption Claim:
Comments

Holodeck 2009: Here is an updated variation of the virtual reality holodeck concept that was such an entertaining feature of Star Trek: The Next Generation. The video, entitled World Builder, took one day of filming and two years of post-production by Bruce Branit. (Hat tip: Gizmodo)


World Builder from Bruce Branit on Vimeo.

John Yoo:
"Now that I'm not in the government, part of my role, because I have a certain amount of expertise, is to try to keep the government honest."
-- From an interview with the Orange County Register.

  On the other hand, back when he was in government....
Comments

California Supreme Court hears Prop 8 challenge tomorrow:

The oral argument will be three hours long, from 9 a.m. to 12 p.m. You can watch it at this site. If in the state you can also watch the oral argument on the California Channel, a cable public-affairs station. At its website, the court has a page devoted to the Prop 8 challenge, including links to all of the briefs filed on either side.

The main argument is that Prop 8 was a "revision" (not an "amendment") to the state constitution requiring prior legislative approval and not simply a majority vote of the people. The state attorney general, Jerry Brown, makes the different and, shall we say, more creative, argument that same-sex marriage is among the "inalienable" rights protected by the state constitution that simply cannot be taken away. Ken Starr has been making the primary case for upholding Prop 8 as a valid "amendment" requiring only a simple majority vote.

On the revision vs. amendment question, the text and history of the initiative process created in 1911 tell us little. The initiative process was a Progressive reform designed to circumvent a state legislature thought to be dominated by wealthy business interests. Whatever else can be said of them, the contending sides in the SSM debate are not robber barons.

The state court precedents don't provide a clear answer, either. As usual, both sides can point to decisions (and to isolated passages in decisions) that support their positions. One side argues that California has a long history of direct democracy, which the state courts have generally honored by liberally allowing constitutional changes as "amendments." The other argues that in light of last May's marriage decision, In re Marriage Cases, Prop 8 is unprecedented in form: it strips a fundamental right from a vulnerable minority. Starr's briefs in the case are lively and excellent in many ways, but they never really come to grips with the California marriage decision and its potentially game-changing significance for the Prop 8 challenge. That doesn't mean Prop 8 will lose. I've previously written that I think the petitioners have a good argument, but I still doubt it will be a winning one.

The other important question raised by the case is the status of the 18,000 same-sex marriages entered between June and November 2008. The plain text of Prop 8 supports an argument that these marriages are invalid, in my view ("Only marriage between a man and a woman is valid or recognized in California.") So the main issue is whether an explicit statement about retroactive effect must be included when legislation or constitutional change produces an important alteration in a citizen's status and rights.

Tomorrow, throughout California and across the country, there will be "viewing parties" to watch lawyers and judges thrust and parry over Prop 8. It's the Super Bowl for SSM, though we won't know the winner for weeks (the court has 90 days to issue an opinion). It'll be the final word, until the next final word.

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Does Senator Kennedy Need Congressional Permission for His Knighthood?

The New York Times Caucus blog reports (quoting Prime Minister Gordon Brown) that the Queen of England "has awarded an honorary Knighthood for Sir Edward Kennedy." A couple of people have asked: Does this require Congressional approval, under article I, § 9 of the Constitution, "no Person holding any Office of Profit or Trust under [the United States], shall, without the consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State"?

I'm no expert on the subject (though I'm not sure whether anyone is), but my tentative thinking is that membership in the Senate or the House is not an "Office of Profit or Trust under [the United States]." Three pieces of evidence for this:

  1. Article II, § 1 provides that "no Senator or Representative, or Person holding an Office of Trust or Profit under the United States, shall be appointed an Elector." This strongly suggests that "Senator or Representative" and "Person holding an Office of Trust or Profit" are two different things.

  2. Article I, § 6, provides that "no Person holding any Office under the United States, shall be a Member of either House during his Continuance in Office." This likewise suggests that "Office under the United States" doesn't include membership in Congress.

  3. There's 1790s Senate precedent for the proposition that a Senator is not a "Civil Officer[] of the United States" for purpose of impeachment, though the question is not free of controversy.

Note that the situation with Alcee Hastings, an impeached and removed federal judge who became a Representative, doesn't shed light on the subject. Article I, § 3 does allow the Senate to include "disqualification to hold and enjoy any Office of honor, Trust or Profit under the United States" as part of the "Judgment in Cases of Impeachment"; the Hastings situation might thus have tested whether membership in Congress is an "Office of honor, Trust or Profit under the United States" -- but it didn't, because the Senate didn't include such a disqualification within its judgment (a decision that was for the Senate to make).

If any of you have more information on this, please do pass it along, since this post is the result of only a bit of quick research on my part.

Comments

Kirkland & Ellis Will Ask Supreme Court To Consider Incorporation of Second Amendment, in the Second Circuit's Nunchaku Case:

Benjamin Wolf (The Elliot Schlissel New York Law Blog) has a guest-post from the petitioner in Maloney v. Cuomo that reports this.

Kirkland & Ellis (which is doing this case pro bono) is a top-notch law firm, with a top-notch Supreme Court practice. My guess is that the Supreme Court would prefer to consider the incorporation question in a case that involves more common facts, and that doesn't raise the additional legal question of whether nunchakus qualify as "arms" for Second Amendment purposes. But it's hard to tell for sure: It's possible for the Justices to use the case to decide the purely legal question of whether the Fourteenth Amendment incorporates the Second Amendment and thus constrains the states to respect an individual right to keep and bear arms. The Justices must be aware that the question is out there in lots of cases.

Moreover, the main criterion for choosing whether to decide a case -- whether there's a split among federal circuit courts or state supreme courts on the subject -- may well not arise on this issue: The existence of late 1800s Supreme Court precedent against applying the Second Amendment to the states (in a case that also held the same as to the First Amendment, a view that the Court has long since rejected) may keep a split from developing in the first place, as lower courts conclude that they're bound by the precedent despite the Court's relatively broad embrace of incorporation throughout the 1900s. So it's possible that the Court might conclude that there's no time like the present to decide the issue, though I'd still guess the odds are against it, even with Kirkland involved.

Comments

Court Rejects Wyeth's Preemption Claim:

This morning, in Wyeth v. Levine, the Supreme Court held, 6-3, that federal approval of warnings on prescription drug labels does not preempt state law tort suits alleging that such warnings were inadequate. Justice Stevens wrote the majority opinion, joined by the usual suspects and Justice Kennedy. Justice Thomas concurred in the judgment. Justice Alito dissented, joined by the Chief Justice and Justice Scalia.

This is the second time this term in which the Court has rejected industry arguments that federal law preempts state tort law claims. The Court also rejected a preemption claim in Altria v. Good. This is interesting because preemption claims fared quite well during the first three years of the Roberts Court, lending support to the idea that this Court is "pro-business." Until this year, the only preemption claim the Roberts Court had rejected was the argument that the Clean Water Act preempts punitive damages in Exxon Shipping v. Baker, but this was not much of a loss for business as, in the same decision, the Court limited the extent of such damages under the federal common law of maritime. I don't think Wyeth and Altria signal a dramatic shift in the Court's jurisprudence, but I do believe these decisions are evidence that early proclamations that the Roberts Court is a "pro-business" court were premature.

Related Posts (on one page):

  1. Wyeth and Deference to Agencies:
  2. Court Rejects Wyeth's Preemption Claim:
Comments

A Strange Standard for Success:

In announcing his reversal of the Bush Administration's Section 7 consultation rule under the Endangered Species Act, President Obama declared: "For more than three decades, the Endangered Species Act has successfully protected our nation's most threatened wildlife, and we should be looking for ways to improve it, not weaken it." This is a strange thing to say, as the ESA has completely failed to recover threatened and endangered species. As I have noted here and elsewhere (see also here and here), the ESA has an abysmal record at recovering species.

Well over 1,800 species are listed as threatened and endangered under the ESA. As of this morning, when I checked on the FWS website, a total of 46 species have been "delisted" — that is have been removed from the list of threatened and endangered species. Of these, 26 were delisted because of an initial data error in the listing (FWS miscounted or misidentified a species) or due to extinction. (17 and 9 respectively.) Of the remaining species, many of these species' recovery have absolutely nothing to do with the Endangered Species Act. Several bird species, for example, were almost certainly helped by the de facto DDT ban, but this was done in 1972, a year before the ESA was enacted. Several other species, such as some species of Australian kangaroos and birds from Palau, are indeed doing better, but the ESA had no role with these species either. In the few instances in which the ESA might have helped, such as with the Aleutian Canada goose, the key actions had nothing to do with the Act's primary regulatory components. (The goose, for instance, was largely helped by predator control, not controls on private land.) In sum, it is not clear that there is a single species — not one of the 1,000-plus — that has been recovered due to the primary regulatory provisions of the Act. If this is President Obama's idea of "success," I don't want to know what constitutes a failure.

UPDATE: To be clear, as explained in some of the links above, I do not believe there is a single example — not one — of a species that was recovered due to the ESA's regulations of private land. But, some may wonder, is it at least helping species and preventing their extinction? Not likely. As I have blogged extensively (again at the links above) there is substantial evidence that, for many species, the ESA actually causes harm by discouraging habitat conservation and actually encouraging preemptive habitat destruction. It is impossible to prove what would, or would not, have occurred if we had a different species conservation law. But if, after 35 years, there are few-to-no examples of the ESA's regulations successfully recovering one of the 1600-plus listed species, and growing evidence that the law works against the sorts of measures — habitat conservation on private land — one can claim that there is no evidence of the law's "success," and ample reason to believe it is an utter failure.

SECOND UPDATE: Is it fair to use the number of recoveries as a measure of the ESA's success? Well, this is the standard the ESA itself establishes, and I think it is perfectly appropriate to measure the success or failure of a law based upon its own stated objectives. Section 2 of the Act explicitly states that the purpose of the Act is the "conservation" of endangered and threatened species. "Conservation," in turn, is explicitly defined in Section 3 to mean "to use and the use of all methods and procedures which are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to this Act are no longer necessary." So, conservation is recovery according to the express terms of the Act, and this is what the Act completely fails to do.

Related Posts (on one page):

  1. A Strange Standard for Success:
  2. Obama Suspends Bush ESA Rule:
Comments

Obama Suspends Bush ESA Rule:

Among the Bush Administration's more controversial, last-minute regulatory changes was a rule to relax the consultation requirement under Section 7 of the Endangered Species Act. Specifically, the rule allowed federal agencies the latitude to make their own initial determination as to whether they had to engage in consultation with the Fish and Wildlife Service or National Marine Fisheries Service over the potential adverse impacts on endangered or threatened species of activities funded, permitted, or undertaken by the federal government. In a presidential memorandum issued yesterday, President Obama called upon Interior and Commerce Departments (homes to the Fish & Wildlife Service and National Marine Fisheries Service, respectively) to reconsider the rule. Perhaps more significantly, the President also instructed all agency heads to "exercise their discretion, under the new regulation, to follow the prior longstanding consultation and concurrence practices involving the FWS and NMFS." In other words, federal agencies are to act as if the Bush Administration rule were never adopted, until such time the Obama Administration is able to put in place a new rule of its own.

Reactions to the memo are largely what one would expect. Environmentalists cheered, while industry warned of greater costs and permitting delays. From the Washington Post:

Francesca Grifo of the Union of Concerned Scientists, an activist group, said the switch would help guard against the potential conflicts of interest and lack of expertise that could color decision making by any agency hoping to press ahead with a particular project. "After years of scientific scandal, the Interior Department and its partner agencies need desperately to regain credibility by making decisions with honesty, clarity, and transparency," Grifo said.

But Bill Kovacs, the U.S. Chamber of Commerce's vice president of environment, technology and regulatory affairs, said reviving another layer of review "will result in even greater delays to projects -- including stimulus-backed, job-creating projects -- as agencies now grapple with the prospect of lengthy inter-agency consultations to determine, for instance, if a bridge project in Florida contributes to the melting of Arctic ice. This is such a departure from the spirit and the letter of the Endangered Species Act that we wonder if the law's drafters would even recognize it today."

A big question is how this rule will effect agency consultation obligations for actions that result in increased greenhouse gas emissions. Now that the polar bear is listed as a threatened species, some environmental groups argue that large projects permitted or funded by the federal government should be subject to Section 7 consultation due to their potential contribution to climate change and the consequent effect on polar bears. The Obama Administration, however, appears to be taking a slightly different view.
Administration officials said the move is not likely to trigger broad use of the Endangered Species Act to regulate greenhouse gas emissions. While the Bush rule specifically prohibited endangered species consultations on the basis of "global processes" such as climate change, an Interior official who asked not to be identified said under the new policy such a review would only be triggered if scientific evidence suggested "a causal connection" between emissions from a federal project and its effect on specific imperiled species or an identifiable part of its habitat.

Related Posts (on one page):

  1. A Strange Standard for Success:
  2. Obama Suspends Bush ESA Rule:
Comments

Tuesday, March 3, 2009

DOMA challenged today in Massachusetts federal court:

Gay & Lesbian Advocates & Defenders (GLAD) has filed a challenge to the federal definition of marriage codified in Section 3 of the Defense of Marriage Act, which prevents the federal government from treating gay couples married under state law as married under federal law. (GLAD is the group that brought the successful challenge to Massachusetts' marriage law.)

The 92-page Complaint is available here. It claims that the plaintiffs, married under state law, were denied federal benefits that would have been available to them if they were opposite-sex married couples. The underlying constitutional claim is that Section 3 violates the equal protection principles applicable to the federal government through the Fifth Amendment. The group has more about the suit here.

(Thanks to Chris Geidner for the pointer.)

Comments

There Goes the ObamaCons:

David Brooks is surprised that it turns out that Obama actually is a liberal after all:

Those of us who consider ourselves moderates — moderate-conservative, in my case — are forced to confront the reality that Barack Obama is not who we thought he was. His words are responsible; his character is inspiring. But his actions betray a transformational liberalism that should put every centrist on notice. As Clive Crook, an Obama admirer, wrote in The Financial Times, the Obama budget “contains no trace of compromise. It makes no gesture, however small, however costless to its larger agenda, of a bipartisan approach to the great questions it addresses. It is a liberal’s dream of a new New Deal.”

This reality dawned on some of us back before the election (even if I confess to being a bit slow myself).

Is Brooks the only ObamaCon so far to be surprised by this?

Comments

In My Neverending Quest for Good New York Style Pizza

in the D.C. area, my wife and I decided to try "Johnny's New York Style Pizzeria and Restaurant," which we spotted in a strip mall with an Alexandria maddress, but that's geographically "Springfield," not far from the Springfield Mall. Needless to say, we weren't expecting much, but were at least heartened that the restaurant sells pizza by the slice.

We were pleasantly surprised, by both the regular slices and the sicilian. My verdict: pretty good. My wife's verdict: very good. Joint verdict: The best pizza we've had in the D.C. area.

Bonus: The owner is from Queens.

Extra bonus: The strip mall in question has an interesting used book store, and a supply store for preschoolers and young gradeschoolers that has many unique items.

New York pizzaphiles in D.C. exile will definitely want to check it out.

UPDATE: A reader informs me via email: "Although it operates under a different name, it's owned by the same folks who run Valentino's Pizza in Alexandria, on Beauregard Street, just north of Little River Turnpike/Duke Street. Both places serve the same pizza, but for some reason the "large" pizzas are larger at Valentino's.

If you didn't try the "Bianca" (white) pizza (no tomato sauce, but with ricotta, basil, and garlic), I heartily recommend it to you."

Unfortunately, I hate ricotta cheese.

Comments

Congress Won't Be Carbon Neutral:

From the Washington Post:

The U.S. House of Representatives has abandoned a plan to make its offices "carbon neutral," a sign that Congress is wrestling with a pledge to become more green even as it crafts sweeping legislation on climate change.

The promise that the House would effectively reduce its greenhouse gas emissions to zero was a centerpiece of the Green the Capitol program in which the new Democratic leadership sought to use Capitol Hill as a kind of a national demonstration project.

But last week, a spokesman for the House's chief administrative officer said the chamber's leadership had dropped an essential part of the plan, the purchase of "carbon offsets" to cancel out emissions from its buildings. Offsets are a controversial commodity that promises that a certain amount of pollution was captured or avoided elsewhere.

"Right now, there is no plan to purchase more offsets," spokesman Jeff Ventura said. The House paid $89,000 for offsets to cover the last session, in 2007 and 2008. . . .

On Friday, Ventura issued a statement saying that carbon neutrality was no longer the House's goal.

"Although original 'carbon neutrality' targets were achieved [in the last Congress], we recognize a widely accepted standard for 'absolute neutrality' does not exist, nor is there any formal accreditation process to certify an organization is carbon neutral," Ventura said. "Therefore, the second phase of Green the Capitol will focus on the continued reduction of carbon and the saving of energy through operational improvements."

It seems Congress realized it's not so easy being "green."

Comments

The Stimulus and the Spending Clause:

Several governors may reject some portion of the stimulus funding for their state. In a recent post, Jack Balkin suggests that “the governors' threats to refuse federal money actually help establish the constitutionality of the stimulus bill, and its proposed bargain of federal funding in return for state regulatory obligations.” He writes:

if one or more states seriously suggests that they may refuse some or all of the stimulus money because of the federal strings attached, this tends to demonstrate that the stimulus bill is a constitutional exercise of the spending power: it is evidence that pressure to accept federal monies has not turned into compulsion, that a genuine offer is being made and that each state can still freely decide whether or not to accept the money.
I disagree, as I explain below.

Related Posts (on one page):

  1. Is the Stimulus Bill Constitutional?
  2. The Stimulus and the Spending Clause:
Comments

Louisiana Capital Post-Conviction Project Lawyer Trying To Suppress Blog Commentary About Case:

Ben Sheffner (Copyrights & Campaigns) has the story, with all the links you can want. Patrick Frey confirms that the commenter does indeed seem to be the lawyer (something that's generally worth checking on the Internet). Here's an excerpt from Sheffner's long and detailed post:

Patrick Frey is a Los Angeles County Deputy District Attorney. He also has a blog called "Patterico's Pontifications," which features news, analysis, and commentary on subjects including politics, the criminal justice system, and media bias. Frey's blog includes a disclaimer on the front page making clear that his blogging is completely separate from his work as a prosecutor ....

Frey recently wrote a long and detailed post about allegations that 2 prosecution experts in a Louisiana murder case manufactured evidence that helped send the defendant, Jimmie Duncan, to death row. Frey's post included extensive analysis of the forensic evidence, and the results of an interview he conducted with a prosecution expert witness (who was not accused of manufacturing evidence)....

Duncan's appellate attorney[,] ... Kathy Kelly of the Capital Post-Conviction Project of Louisiana left the following comment on Frey's blog:

I’m am [sic] Mr. Duncan’s lawyer. This case is currently on appeal. You are not the prosecutor, the judge or a forensic expert. You have noted contacting several people who are potential witnesses in the case and who will be called as witnesses later on in an evidentiary hearing. As a lawyer you should no [sic] that you have no business talking to witnesses when you are not a party to this case. Cease immediately or I will file an ethics complaint with your state bar.... You are a memeber [sic] of the general public you have no right to be demanding that this child’s autopsy or medical records be turned over to you. Again you are neither the DA or the JUdge [sic] in this case.

What? It's an ethical violation for an attorney who blogs as a hobby to act exactly as a reporter: interviewing witnesses and seeking relevant documents? On a case in which he has no official involvement as an attorney? ...

Sheffner analyzes the California Rules of Professional Conduct, and concludes there's nothing at all unethical in Frey's opining on the case. I'm not expert enough on the Rules to verify this, but I can say that First Amendment law should and likely does protect Frey's speech even if Sheffner is mistaken and the Rules do indeed purport to restrict Frey here (which I have no reason to believe is the case). The Court has upheld (in Gentile v. State Bar) some restrictions on lawyer speech about his client when there's an impending trial, chiefly because of concerns that the speech may unduly influence jurors. But this rationale certainly doesn't apply to speech by someone who isn't a lawyer for one of the parties, and who is speaking while the case is on appeal (and thus before judges, who presumably know enough not to be unduly influenced by public comments about the case).

Frey's response, which is much to his credit: "I don’t intend to cease exercising my First Amendment right to speak about matters of legitimate public concern because some lawyer who is mis[re]presenting the content of my post threatens a bogus complaint to my State Bar."

UPDATE: Prof. David Hricik (Legal Ethics Forum) agrees with Sheffner.

Related Posts (on one page):

  1. Louisiana Capital Post-Conviction Project Lawyer Retracts Claim of Unethical Conduct by Blogger:
  2. Louisiana Capital Post-Conviction Project Lawyer Trying To Suppress Blog Commentary About Case:
Comments

Use Those Handcuffs for Manifestly Appropriate Purposes Only, Please:

From the New Jersey Code, §§ 2C-39.3(k), 2C-39.9.2:

Any person who knowingly has in his possession handcuffs [defined as "a device, conventionally used for law enforcement purposes, that can be tightened and locked about the wrists for the purpose of restraining a person's movement"] under circumstances not manifestly appropriate for such lawful uses as handcuffs may have, is guilty of a disorderly persons offense.

You can guess what my question is.

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Prof. Richard Epstein Dismissed from Book-Blurb Libel Case, on Jurisdictional Grounds:

According to the Institute for Justice (also reported in this Dallas Observer blog (Robert Wilonsky):

A Dallas judge yesterday ordered that nationally renowned law professor Richard Epstein be dismissed from a defamation lawsuit brought by Dallas developer H. Walker Royall. In that lawsuit, Royall claimed that Epstein defamed him merely by writing a blurb on the back cover of Bulldozed: “Kelo,” Eminent Domain, and the American Lust for Land. Carla Main, the author of Bulldozed, and Encounter Books, the book’s publisher, remain targets of Royall’s lawsuit.

Bulldozed tells the story of eminent domain abuse in Freeport, Texas, and ties that story to the larger issue of eminent domain abuse in America after the U.S. Supreme Court’s infamous decision in Kelo v. City of New London. Royall was a key player in the Freeport debacle, having signed an agreement with the city of Freeport whereby the city would take land owned by a local seafood business through eminent domain and transfer it to Royall’s company for a luxury marina development project. During that dispute, Royall sued the targets of the takings, the Gore family, over statements they made about Royall on a website opposing the taking. When Carla Main wrote a book about eminent domain abuse in Freeport, Royall sued her, too, along with her publisher. When Epstein contributed a blurb to the back cover, Royall sued him. Royall also sued a local newspaper that ran a review of Bulldozed and the writer who wrote the review.

Epstein is now out of the lawsuit. Dallas Judge Carlos Cortez ordered Epstein’s dismissal after Royall failed to show that the Texas court had jurisdiction over the Illinois resident, who has not been to Texas in more than 13 years.

Epstein is a professor at the University of Chicago Law School and New York University School of Law. Ironically, he is the author of a prominent book on eminent domain, as well as a torts casebook that is used in law schools across the United States.... [A]lthough Epstein has now been dismissed, Main and Encounter remain as defendants....

Comments

Is Talk Radio Bad for the Right?

Conservative voices dominate AM talk radio. Is this a good thing for conservatives? John Derbyshire makes a strong case that talk radio has contributed to the dumbing down of the American Right.

With reasons for gratitude duly noted, are there some downsides to conservative talk radio? Taking the conservative project as a whole—limited government, fiscal prudence, equality under law, personal liberty, patriotism, realism abroad—has talk radio helped or hurt? All those good things are plainly off the table for the next four years at least, a prospect that conservatives can only view with anguish. Did the Limbaughs, Hannitys, Savages, and Ingrahams lead us to this sorry state of affairs?

They surely did. At the very least, by yoking themselves to the clueless George W. Bush and his free-spending administration, they helped create the great debt bubble that has now burst so spectacularly. The big names, too, were all uncritical of the decade-long (at least) efforts to “build democracy” in no-account nations with politically primitive populations. Sean Hannity called the Iraq War a “massive success,” and in January 2008 deemed the U.S. economy “phenomenal.”

Much as their blind loyalty discredited the Right, perhaps the worst effect of Limbaugh et al. has been their draining away of political energy from what might have been a much more worthwhile project: the fostering of a middlebrow conservatism. There is nothing wrong with lowbrow conservatism. It’s energizing and fun. What’s wrong is the impression fixed in the minds of too many Americans that conservatism is always lowbrow, an impression our enemies gleefully reinforce when the opportunity arises. Thus a liberal like E.J. Dionne can write, “The cause of Edmund Burke, Leo Strauss, Robert Nisbet and William F. Buckley Jr. is now in the hands of Rush Limbaugh, Sean Hannity. … Reason has been overwhelmed by propaganda, ideas by slogans.” Talk radio has contributed mightily to this development.

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Monday, March 2, 2009

The better, cheaper mortgage fix

is the headline contrived by irrepressible Slate headline writers for a piece I wrote with Luigi Zingales, based on this paper, on themes I discussed here, here, and here. Thanks to readers for comments.


Does the Border Search Doctrine Apply To Searching Computers if the Government Moves the Computer Away from the Border Before Searching It?: One of the fun aspects of computer search and seizure law is that computers often allow facts that just don't come up very often in traditional cases. The new facts raise intriguing and new questions that test the basis of existing law, forcing courts to choose which principles of preexisting law should apply to the new facts. A border search opinion from last week, United States v. Cotterman, provides a fascinating example.

  In the Cotterman case, agents seized a computer at the Mexico-Arizona border and wanted to search it, but they apparently didn't have a trained analyst nearby. As a result, they let the computer owner go on into the U.S., and in the meantime they drove the computer to a government forensic analyst in Tucson, about 170 miles away. The analyst in Tucson searched the computer two days later and found child pornography.

  Here's the question: Does the border search exception apply to the search of the computer that was seized at the border but actually searched in Tucson two days later? The question is interesting because searches and seizures ordinarily occur at the same place. If evidence is seized at the border, it normally will be searched at the border. Under the border search exception, no cause is required. The dynamics of computer searches are different. A comprehensive search for evidence of a computer generally requires a careful analysis at a lab by a trained forensic analyst. Asa result, computers normally are seized in one place and then searched later on in a different place. So what happens when the location of the search and seizure diverge? Should the law follow the location of the seizure or location of the search? If the law follows the former, the computer can be searched without cause; if it follows the latter, some cause must first be established.

  In the Cotterman case, the court ruled that the law should follow the time and place of the search rather than the seizure. By bringing the computer to the forensic analyst instead of the analyst to the computer, the border search exception didn't apply. The court focused on Ninth Circuit caselaw involving "extended border searches," which have ruled that as time and space passes from the initial border crossing, a search can only be justified based on reasonable suspicion — and that only after more time/space passes from the border is a search no longer even an "extended border search." From the opinion:
  When a search is removed in time and place from the border, the courts have repeatedly held that this represents a greater intrusion on the person requiring that under the totality of the circumstances, customs officers had reasonable suspicion of criminal activity in order to justify the search, the so-called “extended border search.” United States v. Whiting, 781 F.2d 692, 695 (9th Cir.1986); United States v. Cardona, 769 F.2d 625, 628 (9th Cir.1985); United States v. Alfonso, 759 F.2d 728, 734 (9th Cir.1985); United States v. Bilir, 592 F.2d 735, 740-741 (9th Cir.1979). As the Court in Alfonso stated: "We recognize, of course, that time and place are relevant, since the level of suspicion for extended border searches is stricter than the standard for ordinary border searches. Extended border searches occur after the actual entry has been effected and intrude more on an individual's normal expectation of privacy. Therefore, extended border searches must be justified by “reasonable suspicion” that the subject of the search was involved in criminal activity, rather than simply mere suspicion or no suspicion." Alfonso, 759 F.2d at 734. In Alfonso, the search took place thirty-six hours after the ship docked at Los Angeles harbor.
  At some point, the discrepancy in time and distance will become so great that it is no longer an extended border search, thus requiring probable cause and a warrant. Again, there is no bright line test, but an examination of the totality of circumstances, including time, distance and law enforcement efforts is required. Alfonso, 759 F.2d at 736; United States v. Sahanaja, 430 F.3d 1049, 1054-1055 (9th Cir.2005). For instance, had the forensic examiner in this case placed the Cottermans electronics equipment at the end of the queue, conducting the examination in a month or two, it could be argued the search was so removed in time as to no longer be an extended border search. We need not reach that question here, where the facts show reasonable diligence and speed in conducting the computer forensic examination. Therefore, the Government need only show reasonable suspicion, not probable cause, to justify the search in this case.
  Because the court concluded that the government lacked reasonable suspicion, the motion to suppress was granted.

  I find this analysis unpersuasive, and I think that if the Government appeals — which I would guess it will, given the ICE guidelines allowing what it did — the Ninth Circuit will very likely reverse. The Ninth Circuit cases concluding that the place of the search were relevant were all cases in which the search occurred at the same place as the seizure. It makes sense that the location of the seizure would matter: The idea behind the border search exception is that expectations of privacy vary based on location, so the the law should adjust the threshold of cause to correspond to the extent of the experienced intrusion.

  But location doesn't seem to matter when a computer is taken from a suspect at the border and searched offsite. To be sure, the computer is seized, and the duration of the seizure must be constitutionally reasonable. Cf. United States v. Van Leeuwen, 397 U.S. 249 (1970). But the location of the search has no obvious relevance to the intrusion experienced by the defendant, who doesn't know where the computer is searched or in all likelihood even care. Indeed, it often happens that agents in one district will ship off a computer to another district for analysis: It would be quite odd if the courts based the legality of the search on where the forensic analysis just happened to be done. Why does it matter that the computer went to the analyst instead of the analyst to the computer given that the owner of the computer was elsewhere?

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On "Real Filibusters" - RePass Responds:

In response to my post below, David Repass comments:

Jonathan Adler asks me (rhetorically) “Where was Prof. RePass when ‘phantom filibusters’ were used against President Bush’s judicial nominees?” My answer is: in the same place as I am now. It’s just that I didn’t try to get my view published in The New York Times back then, but I did teach it to students in my courses. My view then (as now) is that the majority leader should let filibusters – real filibusters – take place. If the minority is so intensely concerned about something that they are willing to mount a filibuster, then let them take the Senate floor and state their case. If Democrats were so concerned about certain Bush judicial appointments, then Bill Frist should have let them risk public opprobrium for holding up Senate business with a filibuster.

It is clearly unconstitutional for any majority leader to require 60 senators to support every controversial piece of legislation before it can even be debated. This fundamentally changes the Constitution and is not simply a procedural matter.

For more on filibusters, see these items by Sandy Levinson and Jean Edward Smith.

Related Posts (on one page):

  1. On "Real Filibusters" - RePass Responds:
  2. Bring Back the Filibuster, For Real:
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Defamation by Half-Truth:

Generally speaking, modern defamation law applies only to false statements; but at some point a literally true statement may so strongly carry a false connotation that the speaker could be held liable for the implied falsehood despite the literal truth. I've often looked for a good example of this, and I just found one, in an early 1960s case (though it's been around outside the defamation context at least since 1916): The first mate who, upset by his teetotaling captain, writes in the ship's log,

Captain sober today.

H.P. Grice's work on conversational implicatures, by the way relates to this.

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What John Yoo's OLC Memos on the Terrorist Surveillance Program Probably Said: Of the newly released OLC memos, one particularly interesting one is this memo dated January 15, 2009 — just a few days before the OLC changed hands from Bush's people to Obama's. The memo explains what a number of OLC's positions were in still-secret memos written in the early period following 9/11, and it then explains why the later Bush OLC rejected those early positions.

  Of particular interest to me, as a FISA/surveillance guy, the memo seems to say at page 6 that the initial OLC memos on FISA (presumably the ones that okayed the "Terrorist Surveillance Program") relied on the theory that FISA simply didn't apply to national security monitoring because it did not include a "clear statement" of that intent. We only get a summary of Yoo's reasoning in the 2009 memo, but the argument as summarized seems to be that nothing in FISA clearly indicated an intent to regulate surveillance of executive branch monitoring for national security purposes. (As far as I know, DOJ has never said that this was the basis of the OLC memos on the TSP.) The 2009 memo explains that this is not the position of OLC, as OLC had taken the position in the 2006 "White Paper" that the AUMF authorized the TSP.

  If I'm reading this correctly, then, the original Yoo memos on the TSP had argued that FISA didn't apply because there was nothing in the statute that indicated clearly an intent to regulate national security surveillance. This would have been an extremely lame analysis, though. Congress had plainly stated that FISA was the exclusive means for national security monitoring in 18 U.S.C. 2511(f): It's hard to read the phrase "procedures in . . . the Foreign Intelligence Surveillance Act of 1978 shall be the exclusive means by which electronic surveillance . . . may be conducted" as not clearly indicating an intent to regulate electronic surveillance in the national security area. Indeed, much of the point of FISA was to regulate that.

  If I'm reading this correctly, it might explain why Senators Feinstein & Specter introduced legislation back in '06 , at the height of the legal controversy over the TSP, that would "re-state" that FISA was the exclusive means for national security surveillance. A lot of people giggled at this idea at the time: Why restate what Congress already said? However, if the Bush Administration at some point indicated to Specter and Feinstein what the reasoning was of the initial OLC memos, Feinstein and Specter would have known something we didn't. "Re-stating" the point in new legislation could have been designed to provide the "clear statement" that the Yoo memo argued was necessary.
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Food Buffets at Law School (and Other) Events:

A simple tip -- if you're going to have food laid out on a buffet table, especially before a talk, don't put the table flush against the wall unless you absolutely have to.

Rather, move it out from the wall, so that there can be two lines (one on either side of the table) instead of one. This will speed things up dramatically, and let the non-food part of the event start more quickly. A very simple suggestion, but I've noticed that many organizations neglect to do things this way.

A second tip, if you implement the first tip, though this requires a little more foresight: Make sure that you have two serving utensils for each platter or bowl that requires serving utensils. The two-line solution will still work even without the double utensils, but it will work better with the double utensils.

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Bleg About Civil Liability and State Action:

Do any of you know of arguments that New York Times v. Sullivan departed from the original understanding of the freedom of speech and of the press as to state action (as opposed to whether broad libel liability was constitutionally permissible state action)?

I'm looking for claims that the Framers understood the freedom of speech and of the press as not applicable to civil damages liability, at least under common-law torts. I should note that my sense is that this historical claim is mistaken -- but I'm just looking for evidence of it. Many thanks!

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More OLC "War on Terror" Memos Released: You can find them here. There's tons of stuff in there, and I'm starting to look through them now.
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Contracting Out Tax Bill Collection + Law Firm Paying for Line-Sitters:

An interesting story from the Louisville Courier Journal:

Since Feb. 3, a local law firm has paid ... a cadre of ... students and stay-at-home moms to wait outside the [Jefferson County's sheriff's] office, ... 24 hours a day, seven days a week.

The goal is to be first in line April 6 -- the first day that the firm's client, an unnamed investment company, can make an offer to buy Jefferson County's delinquent property tax roll.

As part of a system that may soon be ended by the Kentucky General Assembly, the company that's first in line pays the county what it's owed -- in recent years, an average of about $14 million on about 15,000 delinquent bills -- and then can make money by charging the derelict owners 12 percent interest a year until they pay their debts.

If the owners still don't pay, after one year, the company could foreclose on their properties.

For its part, the law firm -- Albrektson & Wakild, of Crestwood -- can reap collection fees of up to 100 percent of the amount owed on small bills, and smaller percentages on larger bills....

Not my field, but seemed like an interesting story, so I thought I'd pass it along. Thanks to reader William Ridlon for the pointer.

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Text to speech bleg:

Do readers have recommendations for good software for text to speech conversion? I would like to take some of the articles I have written, for which I still of course have the electronic files, and make them available in MP3 format. The project only seems worth doing if the resulting MP3 file is high quality. So what software should I investigate?

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Bring Back the Filibuster, For Real:

Professor David RePass thinks we have too many "phantom filibusters." As a consequence, there is a de facto sixty-vote requirement for passing legislation in the Senate. While I disagree with Professor RePass' claim that the "phantom filibuster" is "unconstitutional" -- the Senate clearly has the authority to set its own internal rules -- I do think that "real" filibusters, in which the minority has to take the floor to prolong debate and stave off a vote, are preferable to the current practice. So where was Prof. RePass when "phantom filibusters" were used against President Bush's judicial nominees?

Related Posts (on one page):

  1. On "Real Filibusters" - RePass Responds:
  2. Bring Back the Filibuster, For Real:
Comments

How Free Is Your State?

New Hampshire's state motto is "Live Free or Die." But is New Hampshire the most free place to live in the United States? Apparently it is, according to a new study, Freedom in the 50 States: An Index of Personal and Economic Freedom, just released by the Mercatus Center at George Mason University.

For this study, the authors analyzed state policy measures ranging from tax rates and business regulations to drug laws and social policy to determine the relative degree of freedom allowed under state law. The winners? New Hampshire topped the list as the most free state in the nation, followed by Colorado and South Dakota. The least free? New York, New Jersey, and Rhode Island. My own state, Ohio, was ranked 38th.

Do you disagree with the rankings? Do you think the authors care too much about taxes and tobacco, yet not enough about sexual liberty or personal expression. The authors disclose their methodology and have made their data available at this website. Further, they explicitly "invite others to adopt their own weights to see how the overall state freedom rankings change." This strikes me as a very useful project.

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The Inflation Risk:

One issue that people have kicked around a bit is the risk of inflation embedded in the current fiscal and monetary policy being used to fight the recession and credit squeeze.

With respect to fiscal policy, the concern is probabilistic--will it be possible to fund the massive budget deficits, and now creation and expansion of new government policies, without at some point resorting to monetizing the debt. It is hard to see how, especially if heavier regulation and slower-growth policies are adopted.

Perhaps less-known but more frightening is the incredible growth in the money supply over the past year or so. I first found out about this a few weeks ago in this post by Peter Robinson which links to this extraordinary graph from the St. Louis Fed. Note the 2009 figures (and below the chart you can click on it to see different benchmark comparisons).

Why has this incredible boost in the money supply had no impact? Presumably because the "velocity" of money has remained low--people and banks are hoarding money, rather than spending, borrowing, and lending it. Assuming velocity rises again, however, we may be looking at an inflationary spiral like we've never seen before in this country.

Peter says it well, "We've Never Been Here Before."

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Econtalk "Zywicki on Debt and Bankruptcy":

I had the privilege of recently sitting down with my colleague and friend Russ Roberts for his podcast "Econtalk" to discuss issues of consumer credit and consumer bankruptcy. The interview is here along with some excerpted highlights.

Russ's podcast is great and he is a marvelous interviewer, so check out some of his other podcasts while you are there.

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Amazon Caves on Kindle:

Amazon has modified its new Kindle 2, the subject of a somewhat over-heated copyright dispute that I commented on earlier, so that its new "text-to-speech" functionality will be enabled/disabled at the option of the publisher -- i.e., that each publisher will get to decide for itself, when licensing books for Kindle sale, whether to allow it to be "spoken" through the S-2-T processor or not. Not good news for the consumer, it seems to me -- although if Amazon makes it clear, when you're purchasing Kindle books, whether the S-2-T functionality works or not on that particular title, it's probably a wash for most of us [though not for the blind or the partially blind -- they lose, in this deal]

[thanks to Tom Hynes for the pointer]

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Foreclosure Externalities:

Two recent articles have raised an issue that I've been thinking about as well. First this one by Jim Prevor and this one by Alan Reynolds in the New York Post.

The basic issue raised by these articles as whether there is a "foreclosure externality" from a house going into foreclosure and thereby reducing property values for neighboring houses. The point here is different from one simply of supply and demand. The argument is not that a foreclosure increases the number of houses for sale and thereby depresses prices. But rather that an abandoned house brings disrepair, crime, and other problems that depress surrounding houses. A lot of weight has been placed on one article that finds a $3000 negative externality for surrounding houses. As Prevor notes, however, this is probably overstated for several reasons.

One reason is that any effect appears to be temporary, not permanent. There are widespread reports now of foreclosed houses turning over in resale markets, so it may be that the duration of any externality is much shorter-lived than previously thought.

We also don't know whether the marginal negative value is actually linear or whether it has declining negative marginal value. Thus, even if the third foreclosure depresses prices $3000, what about the thirteenth? The twenty-third? It seems implausible to think that the marginal negative value remains constant. Finally, that study was conducted when house prices were at their peak; now that home prices have fallen dramatically, it may be that the negative foreclosure effect is much smaller.

Reynolds notes that the foreclosure problem is not uniform across the country, but that there are actually a handful of states and other hotspots around the country with unusually high levels of foreclosures. This suggests that if there is a foreclosure externality it is concentrated in a few places--the overwhelming number of Americans, however, suffer no foreclosure externality.

Why does this matter? Because the presence of a foreclosure externality has been advanced as an argument for reducing the number of foreclosures as an end in itself, rather than trying to distinguish between "worthy" and "unworthy" homeowners. In particular, I think that this goes to the question of whether we should allow principal write-downs in order to eliminate the incentives for a homeowner to walk away from an underwater mortgage.

We can think conceptually about two groups of people: those who want to keep their houses but can't afford it (say because they had an increase in their interest rate on an ARM) and those who could afford to keep their houses but are making a rational economic calculation to walk away because the house is under water. These are stylized differences of course--both elements are present to different degrees in different cases. There seems to be some popular support for helping the first type of homeowner and foreclosure rescue plans to date have focused on that issue. But the second type of person can be helped only if we are willing to allow a write-down of principal. Foreclosure rescue plans to date have generally refused to bail-out the second person by allowing principal write-down.

If there is a modest or non-existent foreclosure externality, then the case for reducing the number of foreclosures as an end in itself becomes weaker, and instead we may want a more nuanced plan that focuses on helping some homeowners but not others. If a person could make his payments, but chooses not to because the home is underwater, then the question is whether we should essentially bribe him not to walk away from his home. The only real reason to do this is if his walk away will hurt the rest of us--what amounts to essentially an extortion threat. If that threat is largely toothless, however, then the argument for giving in is hard to see.

Without some sort of foreclosure externality, what is going on in many of the markets where we see large-scale foreclosures is nothing more than supply and demand—there are simply too many homes that were built and prices have to fall to their market levels. This seems to explain the situation in the exurbs in California, Las Vegas, Phoenix, Tampa, etc. Prices have fallen because there are just too many houses, not because of foreclosure externalities. And we can’t repeal the laws of supply and demand.

Thus we are left with a bit of a conundrum. There are undoubtedly many people who we think worthy of helping stay in their houses, such as those who have had a sudden unexpected increase in an ARM and want to keep their homes but can't afford it. If we can help get those people into a lower-interest fixed mortgage, then great, that seems like a worthwhile foreclosure-rescue plan to me.

But there are a lot of other people—-perhaps a majority in some places at this point-—who are walking away as a rational response to the incentives they have, some of which are pernicious incentives established by state law, such as state antideficiency laws that let them walk.

So we are left with the possibility that if we help everyone we think is worth helping (and only those worth helping, we will help a lot of worthy people but will only make a small dent in the foreclosure problem. To make a substantial reduction in the foreclosure numbers we would have to be willing to write-down principal and give in to the threat that those who are underwater will walk away.

So far policymakers have generally resisted allowing massive principal write-downs, including the most recent Obama proposal. The Obama plan focuses on making payments more affordable, and in so doing, may deliver help to those we think we want to help--those who want to keep their homes but are unable to afford it. But it does not allow principal write-down and so thus eschews giving relief to those who could afford to keep their home but choose not to. If this is so, it may result in helping many people but doing little to staunch the overall tide of foreclosures.

In the end, however, this may be a completely defensible compromise--do everything we can to help make payments affordable but not allow principal write-down which would essentially be a bribe to those who are walking away from their homes as a rational economic calculation because they are underwater. With respect to the latter group, the market seems to be working sufficiently fine to recycle these houses back onto the market in foreclosure sales.

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The Credit Crisis and the Mafia:

I've noted on a couple of occasions that the credit crisis in the United States has made credit card and other similar credit less available to consumers and small businesses, leading them to substitute to lenders like layaway, pawn shops, and payday lenders.

In Italy, the impact of the credit crisis has been somewhat more alarming--the inability to get bank credit has generated a rapid growth in the market share of the mafia:

At a time when businesses most need loans as they struggle with falling sales, rising debt and impending bankruptcy, banks have tightened their lending to them.

Italian banks, which for years had been widely criticized for lending sparingly to small and medium-size businesses, now have "absolutely closed the purse strings," said Gian Maria Fara, the president of Eurispes, a private research institute.

That is great news for loan sharks. Confesercenti, the national shopkeepers association, estimates that 180,000 businesses recently have turned to them in desperation. Although some shady lenders are freelancers turning profits on others' hard luck, very often the neighborhood tough offering fat rolls of cash is connected to the Mafia, the group said.

"Office workers, middle-class people, owners of fruit stands, flower stalls are all becoming their victims. . . . We have never seen this happen," said Lino Busa, a top Confesercenti official. "It is as common as it is hidden."

Many experts say organized crime is already the biggest business in Italy. Now, Fara said, the untaxed underground economy is growing even larger. "Certainly I am worried," he said. "The banking system doesn't work, and the private one that is operating is often managed by organized crime."

In the United States we have a buffer of lending institutions in between formal bank loans and illegal loan-sharks, such as payday lenders and others. I don't know for certain, but my impression is that these fringe lending institutions are less-available in Italy (or Europe generally), where there are much stricter paternalistic limits on consumer lending, than here. Although the history of loan-sharking in America is sketchy (or at least I've never found a good source on it--please recommend it if you know of one), my sense is that mafia-controlled loan-sharking was much more prominent in the United States in the early 20th Century than it is today. Over time in the United States the light regulation of consumer credit enabled a range of lending institutions to develop, thereby reducing consumer demand for illegal loan-sharks.

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Sunday, March 1, 2009

Rush Limbaugh's Living Constitution:

From his speech to the Conservative Political Action Conference:

We want every American to be the best he or she chooses to be. We recognize that we are all individuals. We love and revere our founding documents, the Constitution and the Declaration of Independence. [Applause] We believe that the preamble to the Constitution contains an inarguable truth that we are all endowed by our creator with certain inalienable rights, among them life. [Applause] Liberty, Freedom. [Applause] And the pursuit of happiness. [Applause] Those of you watching at home may wonder why this is being applauded. We conservatives think all three are under assault. [Applause] Thank you. Thank you.

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Sunday Song Lyric: I am really into The Seldom Seen Kid by Elbow. Don't ask why, but I'm quite surprised how much I like the album -- the whole thing. One of the singles is "Grounds for Divorce" -- which is, we're told, a cocktail. Here's the first verse and chorus:
I’ve been working on a cocktail called “Grounds For Divorce”
Polishing a compass that I hold in my sleeve
Down comes him on sticks but then he kicks like a horse
There’s a Chinese cigarette case and the rest you can keep
and the rest you can keep
and the rest you can keep

There’s a hole in my neighborhood down which of late I cannot help but fall
There’s a hole in my neighborhood down which of late I cannot help but fall
The full lyrics and a live performance of the song can be found here. YouTube has the video.
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Decentralizing Drug Policy:

More encouraging news from the San Francisco Chronicle:

U.S. Attorney General Eric Holder is sending strong signals that President Obama - who as a candidate said states should be allowed to make their own rules on medical marijuana - will end raids on pot dispensaries in California.

Asked at a Washington news conference Wednesday about Drug Enforcement Administration raids in California since Obama took office last month, Holder said the administration has changed its policy.

"What the president said during the campaign, you'll be surprised to know, will be consistent with what we'll be doing here in law enforcement," he said. "What he said during the campaign is now American policy." . . .

After the federal Drug Enforcement Agency raided a marijuana dispensary at South Lake Tahoe on Jan. 22, two days after Obama's inauguration, and four others in the Los Angeles area on Feb. 2, White House spokesman Nick Schapiro responded to advocacy groups' protests by noting that Obama had not yet appointed his drug policy team.

"The president believes that federal resources should not be used to circumvent state laws" and expects his appointees to follow that policy, Schapiro said.

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The Death of Copyright, Item #241

There are many reasons why copyright law as we know it is fundamentally ill-suited for the networked age, and why it will (if we are fortunate, and smart) look very, very different 10 or 20 years from now. I've commented on this many times in the past here on the VC (and will keep doing so, unless and until Eugene tells me to shut up).

Here's a nice recent illustration of one of copyright's fundamental problems.

Over the past few weeks, there has been a proliferation of videos on Youtube made using Microsoft's recently-released "Songsmith" software. Songsmith lets you input music into your computer — by singing and/or playing your guitar into your mic, or feeding in a pre-recorded track — and then the software "analyzes" the music and adds backing tracks matching the "genre" of the music you've fed in. It didn't take long for people to take control of the software's capabilities and to begin feeding in classic songs and re-working them, with sometimes spectacular results:

Sgt. Pepper's Lonely Hearts Club Band

I Heard it Through the Grapevine

Both authored by 'azz10,' who, by the looks of things, seems to be pretty gifted at this sort of thing.

That there is copyright infringement here is almost beyond dispute. Let me put it this way: as a copyright lawyer myself, I would not want to be defending azz10's side in an infringement suit. That, alone, is troubling — copyright is supposed to promote creativity, and here's a veritable explosion of creativity — hundreds of thousands of these videos have been posted to date, some great, some awful, many interesting and expressive — and copyright (and only copyright) is standing squarely in the way.

But my point here is different. One of the things that makes copyright so ill-suited to the networked age is that it doesn't scale. Here's what I mean. If azz10 walked into my office and said: "I'd like to hire you to clear copyright on this work I have created; find out who I have to pay royalties to, and get me the rights," I would not be able to complete that task (and no copyright lawyer worth his/her salt could complete that task) in less than 4 or 5 hours of work, and possibly a good deal more. Take the "I Heard it Through the Grapevine" video. Some of the questions I will have to answer in order to do this work competently:

Who owns the rights to the "audiovisual work" portraying the Marvin Gaye performance?

Who owns the rights to the underlying "sound recording"?

Who owns the rights to the underlying "musical work" (i.e., the song itself)> (under copyright law, this is a separate copyrighted work, and can be owned separately from either of the foregoing)

What kind of royalty do I need to pay, i.e. am I paying a royalty for "reproducing" these works, or for "performing" them? Or "publicly displaying" them? Or "transmitting them by digital audio transmission"? Each of these is plausible, none is certain, and it makes an enormous difference in the amount of the royalty and the identity of the persons to whom the royalty is owed (i.e., if it's a "performance," different copyrights are involved than if it's not).

What about Microsoft? Do I owe them a royalty, inasmuch as I've used some of their "genre" tracks in my video?

Some of these involve chasing down facts that may be hard to uncover (like who owns the various copyrights). Others involve difficult questions of law. I'll need to examine some documents (copyright assignments, possibly; the language of the Songsmith license, certainly; things like that). I've done this sort of work, for paying clients; it's not impossible, but it does take some time. The point: it takes orders of magnitude more time to do the copyright clearances than it does to create the work. Think about it — it could well have taken azz10 15 minutes to synch up these tracks on Songsmith — and easily 10 or 100 times more work would be required to do so in compliance with copyright law.

That is an absurd state of affairs. Multiply the waste involved by 100,000 for each of the Songsmith videos posted on Youtube. And then mulitply that by 1,000,000, for each of the Songsmith videos created and not posted on Youtube.

That's what I mean by a failure to scale. This is, remember, all supposed to be about encouraging creative work. In the old days, with a (much) smaller number of relevant events needing copyright protection, the ratio of creative work to law-compliance work may have been reasonable. But it is reasonable no longer.

How we figure out how to change all this is another story. [I try to tell that one in my book]

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New Chairman of the National Council of Intelligence:

It's a fellow named Chas. Freeman who, among other things, is the former U.S. ambassador to Saudi Arabia, and the president of a Saudi government-funded "public relations" organization, the Middle East Policy Council. Surely, the "no blood for oil crowd" is outraged by the appointment of someone with close ties to the Saudis to such a sensitive position?

Then there's this, an email Freeman wrote a few years back, uncovered by Michael Goldfarb of the Weekly Standard, that argues that the Chinese acted with "ill-conceived restraint" before massacring unarmed demonstrators in Tiananmen Square. The only thing the Chinese murderers were guilty of was "overly cautious behavior." You have to read the whole thing to believe it [perhaps not coincidentally, Freeman also co-chairs the U.S.-China Policy Foundation, which agitates for closer U.S.-China ties]:

I will leave it to others to address the main thrust of your reflection on Eric's remarks. But I want to take issue with what I assume, perhaps incorrectly, to be yoiur citation of the conventional wisdom about the 6/4 [or Tiananmen] incident. I find the dominant view in China about this very plausible, i.e. that the truly unforgivable mistake of the Chinese authorities was the failure to intervene on a timely basis to nip the demonstrations in the bud, rather than — as would have been both wise and efficacious — to intervene with force when all other measures had failed to restore domestic tranquility to Beijing and other major urban centers in China. In this optic, the Politburo's response to the mob scene at "Tian'anmen" stands as a monument to overly cautious behavior on the part of the leadership, not as an example of rash action.

For myself, I side on this — if not on numerous other issues — with Gen. Douglas MacArthur. I do not believe it is acceptable for any country to allow the heart of its national capital to be occupied by dissidents intent on disrupting the normal functions of government, however appealing to foreigners their propaganda may be. Such folk, whether they represent a veterans' "Bonus Army" or a "student uprising" on behalf of "the goddess of democracy" should expect to be displaced with despatch from the ground they occupy. I cannot conceive of any American government behaving with the ill-conceived restraint that the Zhao Ziyang administration did in China, allowing students to occupy zones that are the equivalent of the Washington National Mall and Times Square, combined. while shutting down much of the Chinese government's normal operations. I thus share the hope of the majority in China that no Chinese government will repeat the mistakes of Zhao Ziyang's dilatory tactics of appeasement in dealing with domestic protesters in China.

I await the brickbats of those who insist on a politically correct — i.e. non Burkean conservative — view.

Surely, Obamaphiles who have been pushing for years to encourage U.S. policy toward China to focus more on human rights are up in arms?

In fact, while I'm sure such people do exist, a quick survey of blogs to the left of The New Republic shows that those who have chosen to comment are expressing contentment glee over Freeman's appointment. Why, because he is a "realist" about Israel, a polite way of saying he's expressed a fair amount of hostility both to Israel and its American supporters. Here's The Nation, TPM Cafe's M.J. Rosenberg, and Matthew Yglesias. And these are the folks that claim that Israel-related matters distort the neoconservatives' perspective on world events! In fairness, other liberal blogs are maintaining a studious, perhaps embarrassed, silence. It's entirely possible that some bloggers are mortified by Freeman, but are not prepared to "undermine" Obama and side with his "neoconservative enemies."

UPDATE: Here's Stephen Walt, of "The Israel Lobby" coauthorship fame, defending Freeman from his detractors. And here, in its entirety, is how Walt explains why it's okay for Obama to appoint an apologist for the Saudi and Chinese dictatorships, who until the day of his appointment was on the payroll of the former, to a very sensitive intelligence position: [sound of crickets chirping].

Apparently, no matter how otherwise appalling Freeman's appointment may be, the fact that he has acquired many of the same pro-Israel enemies as Walt (deservedly) has acquired serves as a sufficient defense. But of course, according to Walt, it is Freeman's critics who are "obsessed" with "their own narrow-minded vision of U.S. Middle East policy." Given that Walt is apparently unwilling to even address Freeman's dubious ties to and defenses of China and Saudi Arabia, the schoolyard taunt "it takes one to know one" comes to mind. But that's unfair to Freeman's critics, who have, in fact, focused attention not just on Freeman's hostility to Israel, but on his willingness to serve as the president of a propaganda outfit funded by a dictatorial foreign power, and his grotesque interpretation of the events in China in 1989, whereas Walt focuses his attention only on Israel-related matters, and even then fails to offer a substantive defense of specific criticisms beyond "the enemy of my enemies is my friend"

FURTHER UPDATE: Eric Trager on Walt:

How can Walt — who has spent the past three years bloviating on the supposed influence of pro-Israel groups on U.S. foreign policy — defend the administration for appointing an outright Saudi client to chair the all-important NIC? Why does he bristle when "pro-Israel pundits" merely speak out on foreign policy, but has no problem empowering a man whose income came via Riyadh to determine the very intelligence that makes it into top policymakers’ hands?

Of course, I don’t expect an answer from Walt. Conspiracy theorists aren’t known for applying their supposed principles consistently.

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