Recently in Miscellaneous Category

The Oglala Sioux tribe in the Pine Ridge Indian Reservation in the southwest corner of South Dakota say they have an alcoholism problem; one out of four infants born suffer from fetal alcohol syndrome. So they've attempted regulations to keep the reservation dry, but that just creates an alcohol smuggling problem in addition to the alcoholism problem; in any event, any Indians wanting to drink can just go across the border to Nebraska. (Just as there are fireworks stores lying on the other side of state lines, and many casinos on the California-Nevada border, a small town of twelve on the Nebraska-South Dakota border is home to four beer stores.) This is, the tribe says in a $500 million lawsuit, not the fault of the Indians who keep drinking, or the Indians who smuggle alcohol into the reservation, but the fault of the major beer manufacturers and the Nebraska beer stores. How it is these companies' responsibility to prevent the legal sale of beer is beyond me; are they supposed to engage in racial profiling at the checkout counter? Refuse to sell to vendors near dry areas?

The case is Oglala Sioux Tribe v. Schwarting, No. 4:12-cv-03027-JMG-CRZ (D. Neb.). The attorneys are the named partners of the White, Jorgenson firm in Omaha, who are doing their clients a disservice if they are not taking this case on a contingent basis (and merely doing themselves and society a disservice if they are). I've posted the complaint online.

In a 2-1 split decision, a panel of the U.S. Court of Appeals for the Ninth Circuit found that California's 2008 law known as Proposition 8, a voter-determined ban on same-sex marriage in California, violated the equal protection clause of the Fourteenth Amendment. Judge Stephen Reinhardt's 89-page opinion is almost certain to be challenged via either an appeal for en-banc review or a petition for a writ of certiorari.

Do you think the 9th Circuit got it right? Let us know on Twitter @pointoflaw.

Kenneth R. Feinberg, partner and founder of Feinberg Rozen and administrator of the government's two outside-the-courts victims' compensation funds for September 11 and the BP Deepwater spill discusses mass injuries and alternative dispute resolution in the American legal system. Manhattan Institute's Center for Legal Policy also hosted an event featuring Mr. Feinberg which allowed for a more extended and comprehensive discussion of ADR and modern mass litigation.

In a new podcast, Steven Malanga, Manhattan Institute senior fellow and City Journal's senior editor, discusses his recent City Journal article "The Court That Broke Jersey" which argues among other things that "the state's activist judiciary has forced taxpayers to finance unprecedented educational and housing regimes."

To its credit, Southern California Public Radio rounds up the blog criticism of a shoddy ProPublica report on Freddie Mac investments that I also critiqued in my KPCC appearance. One argument neither I nor the roundup mentions: selling off the less-risky elements of the mortgage derivatives and keeping the riskier elements for itself, Freddie Mac is (for better or worse) promoting homeownership by absorbing some of the risk of investing in mortgages, thus propping up housing prices by making more money available for lending. Of course, we'd be better off without this distorting intervention in the housing market: the ProPublica report is not wrong for criticizing Freddie Mac, but is criticizing Freddie Mac for the wrong reason. And its call for taxpayer subsidies to homeowners with bad credit would just make things worse.

In 2010, we reported:

Within fifteen minutes of 18-year-old Nikki Catsouras stealing her father's Porsche, she (perhaps under the influence of cocaine) decapitated herself when she smashed into a California State Route 241 tollbooth at 100 mph. Two California Highway Patrol officers released some of the accident photos (as they often do to emphasize the horrific consequences of unsafe driving), some Internet ghouls were less than polite about them, and now Catsouras's wealthy family wants $20 million from California taxpayers for the release of the public records—and a California appellate court has permitted the case to proceed. The Catsourases apparently have excellent public relations, because the media is unceasingly sympathetic to their suit (failing to distinguish between California's actions and the anonymous Internet abusers' actions), even as the Streisand effect has resulted in far more dissemination of the gruesome photos (NSFW).

Now, the California Highway Patrol has settled with the Catsouras family for $2.37 million, a pretty wealth transfer from middle-class taxpayers to a family that could afford multiple Porsches. And again, the media makes no mention of the free-speech implications of citizens being able to sue taxpayers over the release of public records. [LA Times] The huge sum is about what the family could have recovered if CHP was actually responsible for Catsouras's death.

British tourist Leigh Van Bryan, about to go to Los Angeles, joked on Twitter about digging up Marilyn Monroe's grave and destroying America. DHS found out somehow, detained Van Bryan and friend Emily Banting at the airport, and deported them back to Europe. Boing Boing correctly points out (via Alkon) that this is silly—but the reason we know this is silly is because you and I and Boing Boing are racially profiling. Native white British subjects haven't done any damage to America since they burned DC down in 1814, and are exceedingly unlikely to be serious about "destroying America." (As Boing Boing profiles Van Bryan: "He would not hurt anyone. He is gay.") But we want DHS to have the flexibility to detain hypothetical Islamic fundamentalist Mohammed Abbasi if he were to make a similar threat on the Internet that is less likely to be a joke. But we don't let DHS racially profile. That means that DHS has to treat everyone with the same insane level of scrutiny, which both results in silly false positives, like the deportation of Leigh van Bryan, and likely also results in false negatives, because resources diverted to investigating 88-year-old invalid grandmothers and gay Irish tweeters aren't being used to scrutinize Saudi college dropouts taking flight lessons. Perhaps we as a society prefer things this way rather than have a DHS that engages in racial profiling, but then we have to recognize that in the absence of profiling, the DHS will not have the discretion to use common sense to permit Van Bryan and Banting to spend their tourist dollars here. More at Daily Mail.

Update: and welcome Instapundit and Boing Boing readers. You'll note that, contrary to Boing Boing's characterization, I never say that I approve of racial profiling; there are unquantifiable benefits for a society that refuses to do so, especially for someone like me who is swarthy and could dress as Khalid Sheikh Mohammed for Halloween simply by not shaving. I merely note that the abstaining from racially profiling is not costless. A consequence of the failure to racially profile is that people who clearly are not Muslim terrorists are going to be treated as if they were Muslim terrorists, and that means that people who say they are going to "destroy America" cannot be assumed to be joking. Boing Boing huffily denies profiling, but that simply isn't true. The post author clearly thought some profiling was appropriate in evaluating this decision: as I noted above, he quoted the person who asserted that gay people aren't violent. Why did "conservatives" pick on this one post? We discussed it at our secret Vast Right Wing Conspiracy meetings. No, seriously, I saw the Boing Boing post on Amy Alkon's blog, noted that Boing Boing thought it relevant to mention that Van Bryan was gay to demonstrate that the DHS was being silly, and Glenn Reynolds saw my post on Facebook. Certainly, DHS will be more accurate if they act as an intelligent Bayesian, and react less harshly to gay Irish tweeters—but that would entail racial profiling.

I'll be on the Patt Morrison show today at 1:06 p.m. Pacific rebutting the oversensationalized claim that Freddie Mac was "betting against struggling homeowners."

A WSJ article finds that top patent attorneys are discovering that it's more lucrative to vertically integrate and represent their own patent-holding companies. So John Desmarais, with the help of venture capitalists, has formed Round Rock Research LLC, purchased Micron Technologies' portfolio of 4200 patents, and is making more money licensing and suing over it than he was in private practice. A troll can more effectively use a patent—valid or invalid—offensively in litigation than a business that actually makes things: the cost of a troll to litigate is less because it does not have the same sort of defensive discovery costs, or adverse collateral business consequences that might come from suing its customers. Thus, a legitimate business like Micron can unlock some of the unrealized value of its patent portfolio by selling it to a patent troll. This increases the returns to invention, but at the cost of increased transactions costs to the industry, and it is far from clear that the benefits outweigh the costs.

If nothing else, defendants will find that they have to pay their patent attorneys more as both demand increases and supply decreases. Too, as the returns to a science education plus legal education increase, we will see more human capital diverted from scientifically-productive positions to legal jobs that are simply societal transactions costs.

There is an interesting divorce of interests in a transaction like Micron's. Patent-litigation defendants can challenge the validity of a patent, and that often entails discovery of the inventors, which is a real cost to the inventors' employers. If the details of the Micron-Round Rock transaction ever become public, it would be interesting to see who is bearing the costs of that discovery, and how the contractual terms govern Micron's long-term obligations to Round Rock or the risk of patent invalidation.

After successfully growing its mortgage unit, MetLife has decided to shut the division down firing 4, 300 workers in the process. The reason cited by the Fortune 50 company was an "uncertain marketplace and regulatory environment."

Hans Bader, senior attorney and counsel for special projects with the Competitive Enterprise Institute, identified a distinct culprit for this large job loss: the Dodd-Frank Wall Street Reform and Consumer Protection Act.

MetLife entered the mortgage market in 2008, and managed to achieve a "rising market share" despite a difficult economy and the collapse of the housing market. "Then came Dodd-Frank," and other new legal and regulatory risks and burdens for mortgage lenders. MetLife as a whole was hit with restrictions harmful to shareholders because of its mortgage business, even though "mortgages were less than 1% of MetLife's overall business." So it wanted to sell the mortgage unit to Bank of America or Wells Fargo to escape from those regulations. But it couldn't sell the mortgage unit, because those big banks don't want a new mortgage unit, since their existing mortgage business is already unattractive due to "the Obama Administration's various efforts to halt foreclosures" through government pressure, and "the robo-signing pseudo-scandal" involving the nation's biggest banks -- which will soon have to pay billions to state attorney generals and certain mortgage borrowers even though no one current on their mortgage payments has ever been foreclosed upon due to robo-signing. "So MetLife concluded it was better to shut down its [mortgage] operations, take a $90 million to $110 million after-tax charge, and move on." Its "investors cheered" its escape from Dodd-Frank's tentacles, and its stock price rose in response.

The Lowell Milken Institute for Business Law and Policy at UCLA School of Law is accepting applications for the Lowell Milken Institute Law Teaching Fellowship. The Institute describes the fellowship as follows:

This fellowship is a full-time, year-round, one or two academic-year position (approximately July 2012 through June 2013 or June 2014). The position involves law teaching, legal and policy research and writing, preparing to go on the law teaching market, and assisting with organizing projects such as conferences and workshops, and teaching. No degree will be offered as part of the Fellowship program.

Fellowship candidates must hold a JD degree from an ABA accredited law school and be committed to a career of law teaching and scholarship in the field of business law and policy. Applicants should have demonstrated an outstanding aptitude for independent legal research, preferably through research and/or writing as a law student or through exceptional legal experience after law school. Law Teaching Fellowship candidates must have strong academic records that will make them highly competitive for law teaching jobs.

Applications are due by March 1, 2012. More information about the Institute and on the fellowship can be found here.