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October 2012 Archives

France's socialist premiere Francois Hollande has a plan to ensure that young Frenchmen don't inadvertently develop a work ethic: ban homework.

Hollande argues that homework just isn't "fair." Why not? As David Azerrad reports at Heritage's Foundry, it is because homework "gives kids who get help from their parents a leg up on those who come from families where the parents are either absent or can't help." As David concludes, this perfectly illustrates how "equality of opportunity" can be twisted into "sameness of opportunity."

Before you say "it can't happen here," consider Larson v. Burmaster, a 2006 case in which a Wisconsin student and his father alleged that summer homework assignments violated the Due Process Clause of the Fourteenth Amendment. The plaintiffs cited a series of "substantive due process" cases holding that the Constitution protects parents' right to direct their children's education and upbringing. (I discuss this case in the opening chapter of my book, The Naked Constitution). And yes, it was tossed out by the trial court and the appellate court, but then, they laughed at the tobacco lawsuits at first.

The majority of states that have enacted bans on texting while driving have seen accident rates go up, rather than down. One theory is that, while texting while driving has gone down, this is more than offset by the increased number of people who try to surreptitiously text while drive by holding a smartphone below the steering wheel—a much more dangerous proposition. [MR]

Via Alison Frankel, the Federal Circuit reversed a preliminary injunction Apple won in the Northern District of California against a Samsung smartphone over a patented minor feature. As Frankel notes, the decision is an implicit endorsement of Judge Posner's recent ruling in an Apple-Motorola patent dispute that "minor features in complex devices most features of which are not alleged to infringe" are not grounds for more than nominal damages, and certainly not grounds for injunction.

Posner's opinion called for patent reform, and has justly gotten a lot of attention. [Crovitz; Frankel; WSJ; Fortune; Worstall; The Verge; Ars Technica]

In the In re Apple MagSafe Power Adapter Litigation, the attorneys walked away with $3.1 million, while the class got less than $1 million, and likely less than a quarter of what the attorneys got. The district court (Judge Ware in the N.D. Cal.) not only rubber-stamped the settlement while ignoring the Bluetooth precedent, but then issued an order to protect the illegitimate settlement, requiring a punitive appeal bond or the dismissal of any appeals. This deterred three of the five appellants, with a fourth being sanctioned for failing to dismiss his appeal. But Marie Newhouse, represented by me and attorneys with the Center for Class Action Fairness, held firm in her objection, and, after some delaying tactics by the plaintiffs, the opening brief was filed today, as we test whether the Bluetooth principles have teeth or can be ignored by district courts and trial lawyers with impunity. To this add another few questions: when is it permissible to have a "claims-made" settlement that pays the attorneys regardless of whether class members make claims or, as in this case, are deterred from making claims by artificial hoop-jumping requirements? Can class counsel take credit for "injunctive relief" that has the defendant doing what it was already doing before the complaint was filed? Is class counsel entitled to a commission on payments to the settlement administrator?

Earlier: objection; appeal bond hypocrisy. (As always, the Center for Class Action Fairness is not affiliated with the Manhattan Institute.)

The case is Kitagawa v. Apple, Inc., No. 12-15782 (9th Cir.).

Michael Mann, of the controversial hockey-stick graph and the East Anglia e-mail controversy, not satisfied with demonizing critics as McCarthyists, has sued Rand Simberg and Mark Steyn and their publishers, arguing that their use of the rhetorical "fraudulent" is a technical accusation of academic fraud. As Alison Frankel notes, National Review is showing braggadocio, claiming that they'll use the lawsuit as a means for civil discovery into questions that they believe have not been adequately investigated. On the other hand, as the suit was filed in D.C. Superior Court (perhaps forum-shopping for a jury pool opposed to conservatives?), defense lawyers will have the option of an anti-SLAPP motion, and the case is exceedingly unlikely to get to a jury if the trial judge follows the law. The case is Mann v. National Review, Inc., No. 8263-12 (D.C. Superior Court Civ. Div.). [Frankel; NRO attorney letter; Steyn; Adler @ Volokh; Hayward; Worstall; Slashdot]

This reminds me of nothing so much as the Lott v. Levitt suit, which had the similar attempt to claim that the use of "replicate" in a lay sense could be understood as libelous if interpreted in a technical academic sense. As I said when it was a conservative economist suing a liberal critic several years ago, this is "not the soundest means of establishing academic credibility or resolving academic disagreements." (And, indeed, as I predicted at the time, Lott lost.) Even beyond the unlikelihood of legal success, the suit seems destined for a Streisand effect; CEI is already using it as a basis for fundraising.

The skeptic blogs cheered my analysis of Lott v. Levitt; it'll be interesting to see how they react to my similar conclusion about the meritlessness of Mann's suit. Unfortunately, I haven't seen the same sort of support for free speech when the gore is on the other ox. Indeed, Conde Nast's ars technica goes so far as to gleefully cite a scary Orwellian case in Australia where the government punished politically incorrect speech by compelling reeducation for the offending parties. Maybe the critics of global warming theory are wrong—but if the government can punish the critics for being critics, what's to stop the government from adopting an incorrect scientific theory as beyond challenge and punishing the scientists who correctly challenge it?

Separately, Mann's attorney has previously represented R.J. Reynolds and Mobil Oil. I haven't seen anyone in the environmental community complaining about this. There's absolutely nothing wrong with that—which I hope the Left remembers when they complain that CEI or other conservative organizations are not to be trusted because they have had funding from tobacco or oil interests.

[Disclosure: I am an unpaid member of the CEI legal advisory board; I have not been consulted on this case. I have no current opinion on the validity of the hockey-stick graph or the soundness of the investigations into the East Anglia emails.]

"The death penalty is a joke."

So says murderer Douglas Stankewitz, who's been on death row for 34 years, thanks to repeated delays caused by collateral appeals. (He had carjacked 22-year-old newlywed Theresa Graybeal at a Kmart parking lot in Modesto, drove her around, and then shot her in the head as he stopped the car to buy heroin.) The California death penalty is on the ballot as Prop 34; proponents are, with impressive chutzpah, now using the cost of defending against these appeals as an argument for abolition rather than as an argument for replacing the judges who abuse the law. Nevertheless, polls show that voters disapprove of the measure to abolish capital punishment by 13 points. [Reuters via The Transom]

The Reuters story repeats many of the same statistics I previously discussed here from an AP story. What it doesn't mention is that the arguments about "increased cost" are entirely bogus. The litigation costs from life without parole will not be any cheaper than the litigation costs from the death penalty. As I've argued here before:

[The] cost argument just simply [isn't] true. If the death penalty disappeared tomorrow, the hundreds of lawyers who fight the death penalty wouldn't rest on their laurels. They'd simply shift their focus to other attacks on the use of criminal justice to punish criminals. Governments would still be spending the same millions of dollars defending against collateral attacks on convictions; they'd just be spending it on a different set of convicted criminals. Any monetary savings from abolishing capital punishment would be illusory.

This prediction has been borne out by recent successful challenges to life without parole such as Miller v. Alabama and Graham v. Florida.

In Washington, DC, where most parking meters don't take credit cards or dollar coins, parkers can, for a price, use an app on their smartphones to park. The Durbin amendment in Dodd-Frank is raising the cost of this over 40%. Thanks, Congress! [Sen. DeMint; related earlier]

As Professor Bainbridge and I predicted, there has been an administrative-law challenge to the SEC's burdensome Dodd-Frank conflict minerals rule, adopted on a 3-2 vote without the sort of cost-benefit analysis required by Business Roundtable. The case is National Association of Manufacturers v. SEC, No. 12-1422 (D.C. Cir.). [Compliance Week; law.com/Corporate Counsel]

I'm a fan of Nate Silver, if an envious one. I was a statistical geek with the Baseball Prospectus crew years before Silver was, before giving up baseball sabermetrics for the more lucrative and seemingly practical path of focusing on my legal career. As a kid, I knew the electoral college counts by heart dating back decades, and voraciously consumed board- and computer games simulating presidential elections. The week before I left for law school, I got a job offer at a ridiculous salary for a college graduate to do spreadsheet modeling the place where I worked that summer. There's surely an alternate universe where I passed up law school, stuck with baseball, and had the idea to turn my spreadsheets to doing what Silver does in 2000 or 2004.

Silver recently complained about the degree to which he is criticized for his support for Obama in attacking his model, comparing it to baseball, where "You weren't getting in huge personal fights like, 'Oh, you're a White Sox fan, so you're biased in how you're interpreting the data." I agree that a lot of the criticism of Silver is unfair; the Unskewed Polls website is particularly silly. But Silver is possibly being overconfident in how objective he is.

Silver admittedly massages his data. The massage in 2012 provides bonuses to Obama in the predictions. That could be a coincidence from sound modeling, or it could reflect conscious or unconscious decisions on how to model, for example, how undecided voters will break against an incumbent—where Silver, rightly or wrongly, differs substantially from the conventional wisdom that a president who is polling at 48% is going to end up at 48% because the undecideds will decide to vote for the challenger at the last minute.

There is one particular case where Silver's model ignores facts that favor Republicans, and I think it potentially makes a big difference in his results. Silver points to 2000 as a counterexample to the proposition that polls consistently overweight Democrats or that undecideds break against the incumbent. In 2000, Gore outperformed the last polls by 3.2 points. Silver averages this in, and says that there's no partisan bias in polling or no evidence that undecideds break against the incumbent. But the last polls in 2000 didn't capture the last-minute November surprise of the revelation of Bush's drunk driving charge. (We forget this, because of the much greater drama that immediately followed.)

Silver lets the fact that Gore outperformed his polls by so much influence his model of how to predict undecided predilections for the incumbent and how to calculate house effects, rather than tossing it out as a case where polls didn't capture Election Day sentiments. That's a subjective decision to choose a particular objective rule, not an inherently objective decision. Silver might be right to do so, but reasonable minds can differ. The choice whether to include 2000 as a data point, rather than a sui generis outlier has effects on his model. For example, if we average 1992, 1996, 2004, and 2008, Republicans outperform the last polls by a mean of 1.8 points with a median of 1.0, with 2008 a rare occasion where the polls were on the money. Silver instead starts with polls in 1972 (though there were fewer than ten polls a year prior to 1992), and includes 2000, and gets a Democratic bias of 0.9 points with a median of 0.3—and it's not even clear that Silver includes that 0.3 to 0.9 percent lean in his model instead of treating it as random chance. 1972 is just as arbitrary a starting point as 1992; I have arguments for excluding 2000 from the sample, and I haven't seen Silver defend keeping 2000 in.

Moreover, even if you go back to 1972, you see that polls are breaking not just against Democrats, but against incumbents. The polls get it generally right for Republican incumbents, where the poll bias for Democrats and for incumbents appears to about cancel each other out; the two worst poll performances involve Democrat incumbents, who dropped 7.2 points (1980) and 5.0 points (1996). The only time in the last 40 years that a candidate from an incumbent party outperformed his polls by more than 1 point is 2000—the year of the November surprise. Excluding 2000, we see polls break 1.4 points on average for incumbents; including 2000, we see polls break 0.9 points on average for incumbents—but 0.3 points for Republican incumbents and 3.0 points for Democratic incumbents, though of course, we're only talking three data points in the last 40 years there, so that could just be random chance. If we exclude 2000, and assume homoskedasticity, the difference between the Republican and Democratic results is statistically significant, and suggests that polls are biased for both Democrats and incumbents, and that the conventional wisdom is correct that Obama is in trouble because he's continuing to poll below 50 percent. (Certainly, Obama acted as if he thinks he's behind in the most recent, and last, debate.)

Of course, one could equally arbitrarily go the other way, and say that everything before 2008 is wrong because older polls weren't as sophisticated as modern models. The subjective choice of assumptions in both my arguments above and in Silver's model gives the veneer of objectivity, but can have dramatic effects in the results. There's a reasonable argument against treating 2000 as an outlier, because it introduces subjectivity—if we decide to exclude 10% to 20% of our data points because of exceptional circumstances, why not subjectively exclude still other elections over smaller last-minute issues? That's Silver's most likely counterargument, and he's fairly applied it as a reason to include ludicrously bad polls favoring Romney in the model rather than picking and choosing which polls make the cut. Still, as Silver's model goes, a ludicrously bad Florida state poll doesn't have a big effect in the results, there are dozens of other, better, polls to give a more complete picture; including 2000 in deciding whether to model for whether polls are systematically biased for Democrats or whether undecideds break against the incumbent at the last minute has a much bigger effect if, as I suspect, 2000 is an outlier without predictive value on those two questions.

Silver includes the "house effect" in his models in weighing polls; PPP tends to be overoptimistic about Democrats, Rasmussen about Republicans. But because of his treatment of 2000 as a typical election, Silver's model might be underestimating the house effect of polling in general and thus have its own house effect. A house effect of as little as 0.5% would be enough, even assuming Silver is right in every other way in his model, to turn Silver's 70-30 odds into Obama being barely favored; a house effect of the full 0.9% to 3% I suggest above would flip Silver's results to Romney being favored by at least as much as Obama is now. And there might be yet other judgment calls Silver is making similar to the decision to include 2000 polling in the model that favor Democrats that I haven't noticed.

We'll have a better sense in two weeks whether Silver's model has such a house effect. Silver was successful in 2008, but there were only five states with a spread of less than 2.5% in 2008, so correctly predicting the 45 states where results were pretty clear plus flipping a coin in the true swing states would give someone a 6-in-32 chance of getting at least 49 out of 50 states correct. (Still, give Silver credit for recognizing that Pennsylvania wasn't a swing state.) Silver provides much more analytical rigor than nearly all of the reporting on the subject; 538 is my go-to website for reporting on the polls. Silver could even be entirely right on the issues I discuss above; perhaps I'm guilty of unconscious data mining in favor of Republicans. But we can't yet exclude the null hypothesis that he's lucky, and that he's making mistakes that shade his results toward Democrats and/or toward incumbents.

James Copland and Adam Freedman, author of "The Naked Constitution," discuss oral arguments from the recent Supreme Court hearing of Fisher v. University of Texas in a new podcast.

"Now they've moved the goal posts on Grutter. It's not just enough to have a critical mass of minority students, those students themselves have to come from diversified high schools." - Adam Freedman

Stephen Richer, now a 1L at Chicago Law, does a good job summarizing the arguments alleging (and the better arguments refuting) the myth of a Supreme Court biased in favor of business, including my refutation of the surprisingly sloppy readings of the data in the Lee Epstein/Landes/Posner study that prompts much of the complaints.

One mistake: he forgets that the Supreme Court doesn't just review lower federal courts, but also state supreme courts—and, as Michael Greve has noted, the constitutional structure anticipates that state supreme courts will biased against out-of-state businesses in favor of in-state plaintiffs, and thus, as per Federalist No. 80, federal courts are meant as a check against this anti-business bias. Thus, we would expect a federal reviewing courts to rule more often in favor of business when they exercise discretionary certiorari jurisdiction, and there is a very good argument that the Supreme Court has not been pro-business enough.

One omission: the Andrew Pincus Senate Judiciary Committee testimony gets in the weeds of some of the particular allegations against the Supreme Court.

(h/t Bainbridge)

The chief executive of Illinois's Cook County, which includes Chicago, has come up with a nifty idea to curb gun violence: tax guns and ammunition in amounts that would equal a 200% tax on .22 caliber ammunition. There's just one catch, as I explain over at National Review Online: fundamental rights cannot be unduly burdened by taxation. As I argue, the holding of various First Amendment cases can be applied to prohibit government from taxing Second Amendment rights out of existence.

The October 3, 2012 argument before the Supreme Court in Arkansas Game & Fish Commission v. United States revealed a grumpy Supreme Court that was struggling with a long-standing tangle in its own takings jurisprudence: just where should it draw the elusive line between a tort and taking. To most people that question has a nonsensical quality, because many torts involve the taking of the property of another person, even if others do not.

To orient the discussion, it is best to see how this distinction plays out in private disputes. Where property has been taken by the defendant, the plaintiff can sue on a theory of restitution for compensation equal to the benefits that the wrongdoer has received, if that amount exceeds the dollar value of the plaintiff's harm. But if those benefits are not easily calculable, the plaintiff can always recover full damages for the property damage sustained.

The question is what happens when the government takes actions that could be described as torts, takings, or in some cases both. The easy answer under the Takings Clause should be that the government can never be required to compensate the aggrieved property owner for the benefit it received. After all, the whole purpose of the Takings Clause is to prevent any landowner from holding out for the benefits that otherwise accrue to the state. The proper approach thus always awards the aggrieved property owner a sum equal to its actual losses. At that point, all the incentives are in the right place. The requirement of compensation has two singular virtues. First, it means that no one person has to bear all the costs of government-sponsored projects intended to benefit the public at large. Second, by making the state pay the freight, it incentivizes the government not to go ahead with those projects whose social costs exceed their social benefits.

Continue reading Richard Epstein's new column.

Yuba City pays Danegeld
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"Yuba City pays man not to file any disability suits." [Sacramento Bee; related earlier on POL]

Interestingly, CBS coverage (via Fed Soc) calls the suits "frivolous." I dislike the term because of the confusion it engenders. George Louie's ADA suits, which impose more social costs than social benefits, are certainly "frivolous" in the colloquial sense. But if a layperson complains about "frivolous lawsuits," they will be told by tort reform opponents that there are already laws for punishing lawyers who bring "frivolous lawsuits." This is technically true, but entirely equivocation: the law defines "frivolous lawsuit" so narrowly that a case like Stella Liebeck's, where she sues for injuries from spilling coffee on herself, is not "frivolous" in the technical legal sense, because she persuaded a judge to ignore the law and allow the suit to proceed.

I prefer the term "meritless lawsuits" (for lawsuits without legal or without factual merit, though plaintiffs may prevail in some of them because of errors in the legal system) or the broader term "socially wasteful lawsuits" (which includes lawsuits where plaintiffs are entitled to prevail because of decisions by courts or legislatures to incur substantial net social cost to society at large).

Speaking of lack of marginal deterrence value of civil litigation, and also speaking of Milberg ripping off its clients...

Last week, the Second Circuit decided Wyly v. Weiss. Milberg Weiss brought securities litigation against Computer Associates in 1998; while that case was pending, they had brought additional litigation over a stock drop in 2002. The case settled in 2003, as a government investigation was pending, before Milberg conducted any additional discovery over the new allegations, and CA and its officers and directors got broad-based releases, while Milberg (facing its own legal troubles), received $30 to $40 million in CA stock. The settlement was rubber stamped without objection after Milberg represented to the court that it had considered the pending criminal investigation in reaching the settlement.

After the settlement was approved, CA restated more than $2.2 billion in revenue; the waiver was broad enough to cover any claims over that restatement. Numerous shareholders, led by Sam Wyly, were upset that Milberg settled on the quick, and asked Milberg to try to reopen the case under Rule 60(b); Milberg, who had already received its fees, and could jeopardize its standing as class counsel if it did anything to proved that it had negotiated a subpar settlement, refused. (I have former clients who empathize.)

Wyly sued in state court for malpractice. The Milberg defendants successfully enjoined the case in the original federal district court under the All-Writs Act, and the Second Circuit affirmed, holding that the plaintiffs were seeking to relitigate the original fairness determination, and that that fairness determination precluded a finding of malpractice, because it necessarily included a determination that class counsel performed adequately.

Perhaps the result is right in this particular case (Wyly's case largely rides on the failure to discover 23 boxes of withheld documents that seem to be immaterial). But even if so, the decision is far too overbroad. The question "Did class counsel commit legal malpractice?" (or, more precisely "Was class counsel's performance deficient?") differs from the question "Did the district court correctly rule that the settlement was fair on the record before it as presented by self-interested ex parte participants?" (One seeking a patent before the Patent Office has a duty to self-disclose because of the ex parte process. With rare exceptions, courts have permitted class counsel to affirmatively misrepresent matters to their own fiduciaries.) It cannot be the case that every fairness hearing determination is dispositive on the question of whether class counsel met their ethical duties. Imagine a scenario where class counsel tacitly colludes with the defendants to shortchange the class for its own benefit (much less one where class counsel explicitly colludes with defendants, or engages in a reverse auction to grab the largest share of settlement proceeds), and then wins a fairness determination thanks to a court's failure to see past the ex parte presentation. Is it really the case that class members have no cause of action for deficient performance? It's certainly not the case that a doctor can short-circuit a medical malpractice claim by pointing out that a competent doctor might have ended up with the same result. As I've noted before, we could solve the medical-malpractice crisis overnight if we simply required legal malpractice standards to conform to medical malpractice standards and vice versa.

More: Trask; Reuters.

Related: Judge Easterbrook's dissent in Kamilewicz v. Bank of Boston Corp., 100 F.3d 1348 (7th Cir. 1996).

Three class actions against Internet provider Clearwire (who market their services as "Clear") allege that customers faced undisclosed throttling of Internet speeds. Under a settlement of the pending actions, the attorneys, led by Milberg, will ask for $2 million, to be divvied up among several law firms by Milberg (itself a problematic settlement provision). But Clearwire won't be systematically refunding its customers; class members have to fill out a claim form. Class members who are current customers will get credits on their account after filling out a claim form. Under some generous assumptions (say, 1.3 million current customers with a 2% claims rate and an average claim of $50 that gets entirely used, and 1 million former customers with a 0.5% claim rate and an average claim of $50), Clearwire will settle for about $3.25 million, and the attorneys will get 60% of that. It's almost certain that class recovery will not reach the $6 million figure to justify a $2 million fee under the Ninth Circuit's 25% benchmark rule. Add to that clear sailing and the "kicker," and you have all three Bluetooth elements arguing against settlement approval. Over a million dollars that should be going to class members will instead be going to attorneys.

District courts inconsistently protect class members' rights in claims-made settlements; class counsel frequently implausibly argue, much as in the bad old days of coupon settlements, that courts should value the settlement as if every single class member submitted a claim form and got paid, thus treating a claims-made settlement, where claims rates are usually in the 1% range, like one where the defendant actually takes the initiative to pay every single class member, and permitting outsized fees. Once this happens, class counsel is happy to agree to restrictions on the claims process that throttle down the number of payments that class members will receive, because their fees are based on the denominator rather than the numerator. (Especially ironic in a case like this, where the underlying allegation is that the defendant unfairly throttled service speeds.) Even if a judge were inclined to want to consider the amounts the class was actually paid, settlements usually (as this one does) schedule the end of the claims period to be weeks after the fairness hearing, thus permitting the parties to hide the ball as to what class members actually receive.

One hopes that a class member who receives the postcard or email notice retains a non-profit pro bono attorney to vindicate class members' rights in this case—and class members' rights in future claims-made settlements.

The case is Dennings v. Clearwire Corp., 2:10-cv-01859-JLR (W.D. Wash.).

As Ted Frank pointed out in his recent post, the self-proclaimed "fact checkers" in the media seem to have no interest in correcting the president's distortions regarding the Ledbetter Act.

Here's another whopper that has escaped the media's attention. When discussing Arizona's immigration law (SB 1070), Obama said: "Part of the Arizona law said that law enforcement officers could stop folks because they suspected maybe they looked like they might be undocumented workers and check their papers." In fact, the law allows police officers to request papers only upon "reasonable suspicion" -- a well-established standard -- and specifically states that police may not consider "race, color, or national origin" in forming a reasonable suspicion. At oral argument before the Supreme Court, Chief Justice Roberts asked the Solicitor General Donald Verrilli: "No part of your argument has to do with racial or ethnic profiling, does it?" And Verrilli replied "that's correct, Mr. Chief Justice."

But perhaps the strangest assertion from the president was this: "You know a major difference in this campaign is that Governor Romney feels comfortable having politicians in Washington decide the health care choices that women are making." That is, of course, an odd assertion from somebody who believes that the 15 members of the Independent Payment Advisory Board should be empowered to "decide the health care choices" for an entire nation, men and women. But then, by way of explanation, Obama stated that Romney would allow employers to decide what sort of health coverage to provide their employees -- even giving employers the freedom to choose health plans that don't cover contraception.

Apparently, Romney's refusal to impose a national contraception mandate on employers puts power in the hands of "politicians." Obama never attempted to back up his preposterous claim about "health care choices" -- and you can bet that the media will never challenge him.

Ledbetter again
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It's frustrating that in all the media fact-check frenzy, no one ever calls out claims that the Lilly Ledbetter Act, which does nothing but transfer wealth from working-class employees to wealthy attorneys, has done anything for women other than increase their unemployment rate. Hans Bader further points out that Ledbetter herself has nothing to complain about other than her lawyers' performance.

I am quoted in a Peter Lattman Dealbook story about the $2.43 billion Bank of America settlement. (Also: Reuters.) I'm adverse to Bernstein Litowitz in the Johnson & Johnson case (being argued tomorrow), but I'll give credit to them here for asking for "only" $150 million in fees (as opposed to the $400+ million requested and $285 million recently awarded in Delaware for a smaller settlement).

The settlement is unquestionably large; as Alison Frankel notes, it is about twenty cents on the dollar, after a government prosecution resulted in a much smaller nuisance settlement. (Of course, as Frankel also notes, Bank of America had reason to fear a jury trial in Manhattan after years of bad publicity over the financial crisis. Even if Bank of America was entirely innocent, could their defense attorneys say that they had an 80% chance of winning that jury trial?)

But I am troubled by one aspect of the settlement. There is a single class of beneficiaries, the class of shareholders who purchased during the pre-disclosure class period. But the settlement is paid for by Bank of America—i.e., current shareholders. And some of those current shareholders are class members. For that subclass of class members, not only are they receiving no benefit—money is simply being transferred from the left-hand pocket to the right-hand pocket—but they are paying a commission on the change in accounting entries to plaintiffs' attorneys. Combined with the costs of defense and settlement administration, it is far from clear to me that this unseparated and uncertified subclass of current shareholders has the same interests as the class members—or even that this lawsuit and settlement has not harmed them, rather than benefited them. To my knowledge, no court has ever addressed this fundamental intra-class conflict in securities litigation; to my knowledge, no defendant has even raised the issue as a reason against class certification without subclassing. Maybe some day a current-shareholder class member will object that separate representation is required under Rule 23(a)(4) in a securities litigation settlement, or intervene to protest a single-class certification; maybe securities defense firms in a future case will be half as creative and innovative as the plaintiffs' bar in the zealous representation of their clients.

That's aside from the fact that the alleged $10-$15 billion loss in this case isn't a $10-$15 billion social loss. Even if it is true, as plaintiffs allege, that prices were inflated $4.75/share during the class period, that $4.75 wasn't going to Bank of America or even, for the largest part, to current shareholders. It was going to former shareholders: for every investor allegedly out $4.75, another investor realized a windfall of $4.75. A diversified investor is just as likely to be a winner from these sorts of alleged disclosure mistakes as a loser. Now, let's concede that it's the case that confidence in disclosures would be expected to have a positive effect on stock prices (though that positive effect was realized by the investors holding shares when confidence in the markets originally improved in the 1930s, rather than by current investors who already paid that premium afterwards). It's far from clear that the litigation tax shareholders pay, both in direct payments to securities plaintiffs' and defense lawyers and in indirect costs of compliance and in executive time diverted by litigation (and in increased executive compensation to reflect the threat of personal civil and criminal liability errors), provides concomitant benefits at the margin that simple regulatory enforcement does not already accomplish. The $150 million fine BoA paid the SEC, and the tens of millions BoA spent on lawyers in the process of that investigation, combined with criminal penalties, is surely enough in terrorem expense to ensure a similar level of deterrence, especially given that executives who commit these sorts of errors are not likely to still be executives when it comes time to pay the civil-litigant piper several years later. Too, the overwhelming majority of shareholder litigation, well over 90% of cases, free-rides off of government investigations or corporate self-disclosure, rather than independently uncovering wrongdoing. But that particular public-policy question is a matter for the legislature, rather than for courts looking at securities litigation. And as we've seen, there have been those in Congress who want to make securities litigation more, rather than less, inefficient and costly to the economy. The October 13 Economist has a good story about the problem of overregulation and double jeopardy in the financial industry. More: Ronald Barusch. Related: my 2006 Congressional testimony; Olson on WorldCom.

In last night's vice presidential debate, Joe Biden purported to "guarantee" that no Obama-nominated judge would ever vote to overturn Roe v. Wade. Never mind what this "guarantee" is backed up by -- Joe's dental work? -- it demonstrates the Obama administration's view of the Judiciary. As I argue over at NRO's "Corner," the very idea that a president could guarantee the actions of an independent branch of government ought to be too unseemly to mention, even for Joe Biden. The former Judiciary Committee stalwart also claimed that overturning Roe would "outlaw abortion" -- in fact, it would simply return the issue to the states, as I also explain at NRO.

James Copland and Collin Levy, senior editorial page writer at the Wall Street Journal, discuss findings from "Proxy Monitor 2012: A Report on Corporate Governance and Shareholder Activism."

"What's interesting is that there is a significant disconnect between the leading proxy advisory firm, Institutional Shareholder Services, and what shareholders are actually doing" - Copland

The one thing that was clear during yesterday's Supreme Court argument in Fisher v. University of Texas -- a case involving affirmative action -- was that the Court's liberal bloc is terrified at the prospect of overruling Grutter v. Bollinger, a 2003 precedent holding that public universities can use racial preferences in admissions (a blatant violation of the Equal Protection Clause) because "diversity" is a "compelling state interest."

A substantial diversity industry has been built upon Grutter, which explains why liberal justices, the media, and college deans' offices are desperate to see it upheld. But what emerged from yesterday's oral argument is that Grutter is an incoherent mess. Trying to shoehorn the Texas system into Grutter's "logic," the university's lawyer argued that the university had not achieved a "critical mass" of minorities -- then refused to say what a critical mass would constitute. My full analysis of yesterday's oral argument and why Grutter must go is posted here at NRO Bench Memos.

I got rude hate mail from a trial lawyer, Gary W. Jackson of North Carolina, today, and was curious what might prompt such a thing. His own track record from his website in the first link I clicked there suggests why he's apparently angry at people who ask for common sense to be applied to the civil justice system.

Let's stipulate that the underlying facts are appalling: in 2006, ex-con Tony Savalis Summers raped and killed a mother, Lavell Williams, and stabbed her daughters. Summers stabbed Williams 39 times as she suffered horrifically and drowned in her own blood, resulting in a rare death penalty verdict in Greensboro, North Carolina. Summers was the husband of a friend's godmother and knew Williams from giving her and two of her children a ride home from a barbecue at the godmother's home. Several months later, allegedly high on cocaine and alcohol, he entered Williams's apartment from an unlocked window, and attacked the family.

This is, Jackson and his law office alleged in a lawsuit, the fault of Williams's apartment complex: with 20/20 hindsight, they should have provided "better" security to residents who apparently pay about $500/month in rent, though it's hard to see how anything short of an armed guard summonable through wired panic buttons would have made a difference here. Notwithstanding an exculpatory clause in the lease, the case settled for $1.45 million in 2010. One presumes that Summers, the most (and likely only) culpable party, didn't pay anything (though he was surely named as a defendant to avoid diversity jurisdiction if the landlord was an out-of-state LLC). Now, if I were a benevolent dictator with access to the Treasury printing presses, and didn't have to worry about inflation, I'd happily command that any children who were victimized like these children were victimized be awarded a million dollars; I'm not questioning their desert. The question is why the apartment building should be footing the bill, and what purpose is served by holding landlords who offer $500/month apartments liable.

The costs will be simply shifted to future tenants (in this and other apartment buildings serving the poor), so what we have here is a wealth transfer of about $500,000 to $600,000 to trial lawyers from people of an income level that they can only afford to pay about $500/month for housing. Another consequence: developers less willing to build reasonably priced housing for people who are more likely to associate with ex-convicts, because, at the margin, some developers will not be able to afford the litigation tax that pays for America's lawyers to be the highest paid in the world without making us any safer.

The civil justice system is sufficiently broken that cases like this are so commonplace that they fly under the radar daily without being reported. And they're only possible because of jackpot justice: the apartment building is willing to settle for $1.5 million to avoid the tiny risk of getting hit with a verdict for tens of millions of dollars if they get the wrong judge and the wrong jury.

(Interestingly, one theory of liability is that the apartment complex was negligent because it failed to have a zero-tolerance policy for trespassers. Of course, had the complex raised the rent to be able to spend the money on the personnel to be able to implement a zero-tolerance policy for trespassers, they would've been sued and accused of racial profiling the first time they hit a false positive. Just ask the NYPD. Damned if you do, damned if you don't.)

Victor Schwartz, Phil Goldberg, and Chris Appel write in The Recorder ($) on the status of climate-change litigation in the federal appellate courts; the Ninth Circuit recently affirmed dismissal of the Kivalina suit (in an opinion by Judge Sidney Thomas, of all people), and the Fifth Circuit is considering a similar suit seeking to hold liable carbon-based energy producers for Hurricane Katrina.

At this point, it is uncertain what the Fifth Circuit will decide. If the panel bucks conventional wisdom and allows the case to go forward, it will be interesting to see if it tries to set any limiting principles so that similar claims cannot arise after every severe storm or change in weather patterns. If the court tries to do so, it will undoubtedly realize, as other courts have, that moving the deck chairs in this litigation do not change the legal outcome.

To the extent the Fifth Circuit looks to the Supreme Court for guidance, the Supreme Court has already made its position clear: America's energy policy is properly decided in Congress and the executive branch, and that there is no "room for a parallel track" of litigation for setting [greenhouse-gas] emissions case-by-case in courtrooms across America.

Whirlpool v. Glazer
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The Sixth Circuit, in a decision that pays only lip service to Wal-Mart v. Dukes while ignoring its requirements for finding commonality, affirmed the certification of a single Ohio class in a consumer-fraud class action against Whirlpool over 21 different models of front-loading washers over a nine-year class period. Like every other environmentally-friendly energy-and-water-saving front-loading washer, Whirlpool washers, if not properly maintained, have a small percentage chance (and a slightly larger chance than for the old technology of top-loading washers) of generating unpleasant odors from laundry residue: does that create compensable injury for purchasers who never suffered this problem? Of course, as in many class actions, the attorneys are less interested in consumer redress for nonexistent harms, so much as imposing litigation expense that would prompt a settlement payment to the attorneys. In a Washington Times op-ed, Tiger Joyce complains "Beyond the urgent question of class certification, the 6th Circuit's opinion being appealed also establishes a radical new theory of product liability. In essence, it says that even if just one buyer of a manufactured product might one day become dissatisfied with the product, even if proper product maintenance would have prevented that dissatisfaction, and even if the product is otherwise widely and enthusiastically embraced in the marketplace, everyone who ever bought the product has, by definition, been overcharged and can be joined in a class action against the manufacturer." The theory is analogous to a fraud-on-the-market theory in securities law transposed to consumer law. Of course, one buys securities to make money, while one buys washing machines to wash clothes. If your clothes are washed satisfactorily, have you really been injured any more than by the fact that you mistakenly failed to buy your washer at Sears instead of Best Buy and inadvertently paid too much?

Of course, this particular question of Ohio law and public policy isn't before the Supreme Court, which generally doesn't intervene in error-correction of federal interpretations of state law, though there is an attempt to resuscitate the First American Federal question of class standing that the Supreme Court chose not to resolve last year in the cert brief itself. This case does not seem like the best of vehicles to make that stand.

But the commonality issue certainly seems cert-worthy, and even GVR-worthy. In terms of the certification, it's hard to see a common issue, given the different designs and different states of manufacturer and consumer knowledge over that time, and the Sixth Circuit opinion doesn't even try to distinguish Dukes. How is Whirlpool supposed to defend itself in a trial over such a wide-ranging class? Note that, while this is "just" a class action over Ohio consumers and Whirlpool washers, the same sort of case is being brought against every washer manufacturer.

I don't quite understand Joyce's reasoning in claiming "the future of all manufacturing in the United States hangs in the balance"—foreign manufacturers selling here will get sued just the same as American manufacturers will. It is, however, a litigation tax on consumers who face higher prices to compensate for the expense of lawsuits like this, and thus a wealth transfer from middle-class consumers to wealthy lawyers.

More: cert petition; Chamber amicus; PLAC amicus; PLF amicus; Wajert; PLF; Karlsgodt. The matter (No. 12-322) was to come up for conference Friday, but the Court has requested a response from the respondents, which is a better-than-average, though not dispositive, sign.

Debate with Susan Saladoff on WFAE
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This morning I'm debating Susan Saladoff on WFAE-Charlotte on Charlotte Talks with Mike Collins at 9 am Eastern. Will follow up with links in this post.

More on Texas anti-coupon law
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We've previously discussed how a unique Texas law scuttled a $0 shareholder derivative settlement. Reuters follows up, quoting me in a story that references a pending Center for Class Action Fairness appeal over a strike suit settlement over the Frontier Oil merger.

"Obama's Property Grab"
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Over at the Bloomberg View, I call attention to the Obama administration's attempt to convince the U.S. Supreme Court that the federal government can deny landowners the use of their property for years -- decades if need be -- without ever paying compensation.

Deputy Solicitor General Edwin Kneedler advanced this remarkable proposition during oral argument in Arkansas Game and Fish Commission v. United States, a case involving the damage wrought by the Army Corps of Engineers in its operation of the Clearwater Dam in Arkansas. The administration's argument poses a grave threat to the vitality of the Fifth Amendment's takings clause, which requires the government to pay "just compensation" when it takes property for public use. I explain why this argument is dead wrong here.

In the wake of last Tuesday's presidential debate, the pundits have been obsessed with Romney's zingers and Obama's deer-in-the-headlights performance. But the defining moment of the evening was provided by the debate stage itself.

When asked to define the role of the federal government, Romney said, "look behind us: the Constitution and the Declaration of Independence," pointing to the stage backdrop which featured excerpts from the founding documents. Fidelity to the principles of the Founding Fathers emerged as a key theme for Romney, but was utterly ignored by former ConLaw professor Obama. (I recently discussed these differing visions of the federal government on Fox & Friends, here.)

Unlike most presidential debates in recent memory, Tuesday's gave the candidates an opportunity to lay out their philosophy of government at length. With an entire segment (or "pod" to use host Jim Lehrer's oddly futuristic term) devoted to the proper role of a central government, each man had the chance to address the core issue of American politics; the very question that brought the delegates to Philadelphia in 1787.

To that question, the president said not a word -- not one -- about the Constitution: the document that creates and defines the federal government. The Founders devised a central government whose powers would be "few and defined," as James Madison put it. Instead of referring to the document which he took an oath to uphold, Mr. Obama said that the role of the federal government is limited only by its "capacity" -- a fancy way of saying that Washington can do anything within its brute power.

According to the president, federal power must be used to create "ladders" and "gateways" of opportunity, and "frameworks" for success; all of this suggesting that individuals and businesses cannot succeed without help from Capitol Hill. This makes perfect sense if you believe that entrepreneurs don't actually build their own businesses. But it makes no sense if you consult the enumerated powers of the federal government. Although Congress can regulate interstate commerce, it has no overarching power to impose its own concept of opportunity and success on a diverse nation.

The president then moved on to that familiar euphemism: the federal government must make "investments," i.e., it should spend like there's no tomorrow. Education not up to snuff? No problem: "let's hire another hundred thousand math and science teachers," said the president. And community colleges get a piece of the action, too. They should have vocational training programs, which, of course, "require" federal support. There's just one thing missing from this narrative: "education" is simply not within the federal government's constitutional powers.

When Lehrer turned to Mitt Romney, the contrast could not have been sharper. Not only did Romney refer explicitly to the Constitution, but he also explained that both individuals and states have "rights" against the federal government -- another concept overlooked by the president (in fact, Obama did not mention "rights" once in this debate on domestic policy).

Romney agreed that hiring more teachers is a good thing, but pointed out that "every school district, every state should make that decision on their own." He cleverly hijacked the president's vague references to "opportunity" and "success," making the point that these are matters of individual initiative. What government has to do, as the governor put it, is uphold the right of individuals "to pursue their dreams, and not to have the government substitute itself for the rights of free individuals."

In an earlier segment on health care, Romney took the president to task for "whisking aside the 10th Amendment" by imposing a national health care mandate. The 10th Amendment is the provision that reinforces the right of states to conduct their own affairs, except in those areas specifically delegated to the federal government. Mr. Obama did not see fit to address this concern.

At one point in the debate -- once he had regained something of his usual professorial manner -- the president intoned that the differences between the candidates are "instructive." You can say that again.

As an editorial in the Wall Street Journal by our own Jim Copland notes, the ballot advice of the profitable—and government-privileged—Institutional Shareholder Services often clashes with the desires of the average diversified investor.

Randall Munroe has a point. Funny how all government antitrust prosecutions under Section 2 in the last 75 years look silly in hindsight. I'd call it the revenge of Robert Bork, except Bork was on the wrong side in the Microsoft case.

Schlesinger v. Ticketmaster
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The coupon settlement in Schlesinger v. Ticketmaster was so appalling that even the Denver Post thought I should get involved; I received over a dozen inquiries from class members. But it was a pre-CAFA case in California state court, and the odds of creating relevant precedent, given the tiny number of pre-CAFA cases pending in California state court, were low. As a matter of triage, the Center for Class Action Fairness did not get involved. Eighty class members did object, however, and I'm pleased to see that the trial court did its job and saw through the settlement (h/t M.L.), rejecting both it and what would have been a $16.5 million windfall for the attorneys, over twice their lodestar.

The Supreme Court kicked off the October Term on Monday - the first Monday of October. Here's a quick roundup of the big issues up before the Court.

Affirmative action: The court will revisit its 2003 ruling (Grutter v. Bollinger) which upheld certain affirmative-action programs at universities. In the new case, Fisher v. University of Texas, the Court will consider a white student's challenge to the admissions policy at UT Austin that allows race to trump other merit-based factors. As John Yoo recently argued, the Court should overturn Grutter as a "blemish" on our constitutional law.

Gay Marriage: It's considered likely that the Court will address gay marriage, although the Justices have not made an announcement yet. Actually, there are two distinct issues: (1) can Congress define "marriage" for federal law purposes? and (2) can states define marriage as the union of one man and one woman?

The first issue relates to the Defense of Marriage Act (DOMA). There is at least a decent Tenth Amendment argument that DOMA is unconstitutional. If the federal government wants to make certain benefits contingent on being married, so be it, but the feds have to defer to the states to supply the definition of marriage.

The second issue, which relates to California's Proposition 8, presents a much greater threat to our constitutional order. The liberal argument is that the Constitution requires state recognition of same-sex marriage and, therefore, divests states of their historic power over the definition of marriage. According to the liberal spin, as the Washington Post's Robert Barnes reports in typically unbiased fashion, the question is "whether society's growing acceptance of same-sex unions warrants constitutional protection." I guess society's "growing acceptance" is somehow reflected by the 37 states that have passed laws defining marriage as limited to a union between one man and one woman. As I have said before, the liberal argument here is pure judicial activism.

ObamaCare, Part II? There is at least a possibility that the Affordable Care Act will come back to the Court this term. The Court is considering a petition by Liberty University to reconsider the university's challenge to ACA's employer mandate on religious freedom grounds, but also as exceeding Congress's power. Although the Court often summarily rejects such petitions, it has kept this one under advisement all summer, and now has asked the Obama administration to respond - raising the likelihood that the Court will agree to revisit this law.

Takings. The case is Arkansas Game and Fish Comm. v. United States. The issue is whether government regulations that impose recurring flood invasions constitute a "taking" within the meaning of the Takings Clause, even if the flooding isn't permanent.

Voting rights. Overlapping with the recent Voter ID controversies are a series of cases challenging Section 5 of the Civil Rights Act, which requires states and localities with a history of discrimination to get federal approval of any changes in their voting laws. In a 2009 ruling, the Supreme Court expressed concern about "serious constitutional questions raised by Section 5's intrusion on state sovereignty." Clearly this is the case for state and local elections. But even for federal elections, the Constitution gives states the power to define "the times, places, and manner" of choosing congressmen. Granted, Congress has the power to amend such regulations, but that's very different from forcing states to ask Congress's permission before changing their voting laws.

Alien Torts. On Monday, the Court heard argument on the scope of the Alien Tort Statute (ATS), a venerable 1798 law that allows aliens to bring lawsuits in federal court for violations "of the law of nations or a treaty of the United States." As far as we know, it was enacted to cover very minor gaps in the law, like the assault of a diplomat in the U.S., or piracy committed by Americans in international waters. The law was virtually unused until the 1980s, when it was revived as a nifty way to use American courts to pursue alleged human rights abusers.

In the new frontier, the international rights bar is arguing that the ATS gives courts jurisdiction over suits that have no connection to the US; that is, cases in which foreign plaintiffs sue foreign defendants over conduct that occurred outside of the U.S. The case is Kiobel v. Royal Dutch Petroleum.

In Monday's argument, the Justices showed skepticism of the expansion of the ATS and their questions sought some principle to limit ATS. Justice Sotomayor seemed inclined to endorse an interpretation put forth by the European Union in an amicus brief, which argues that US courts should allow ATS lawsuits with no connection to the US, provided the parties have exhausted all other remedies. As a matter of policy, that might or might not be sensible, but it is disturbing that even one Supreme Court Justice believes that a 214-year-old American law should be interpreted according to a policy formula dreamed up in Brussels.

In 2012, "public housing has accounted for nearly 20 percent of all shootings in the city, 10 percent of felony assaults and 11 percent of rapes -- though less than 5 percent of city residents live in the projects." Police can prevent crime by preventing people who shouldn't be in the housing projects from being there. But Legal Aid attorneys have successfully lobbied to preclude police from easily prosecuting trespass violations through "vertical patrolling" based on bogus allegations of false arrests. And law-abiding residents of New York City public housing are that much more unsafe. [Heather Mac Donald @ [NY Post & City Journal]

Commonwealth Court Judge Robert Simpson announced today that he was enjoining enforcement of Pennsylvania's voter identification law, known as Act 18. Unless that ruling is overturned before November 6, election workers will not be able to stop anyone from voting for lack of identification (they can still ask for identification, for what it's worth).
The ruling means that voter fraud will be that much easier to pull off in Pennsylvania. Naturally it's being hailed as a "victory" by liberal groups eager to keep a swing state in the Democratic column.

In reality, though, this ruling doesn't touch the merits of the law. Judge Simpson's hand was forced by a state supreme court order that he had to block the law unless he was satisfied that not a single eligible voter would be barred from voting for lack of identification. Thus, Judge Simpson mechanically held that he could not guarantee "that there will be no voter disenfranchisement arising out of the Commonwealth's implementation of a voter identification requirement for purposes of the upcoming election."

On the merits of this case, the last word is still Judge Simpson's August ruling in which he refused to enjoin the law, finding the plaintiffs did not have a strong likelihood of success on the merits of their constitutional claim. That is surely correct - the Supreme Court upheld Indiana's voter ID requirement in Crawford v. Marion County Election Board and the Georgia Supreme Court upheld that state's law. The notion that Act 18 puts an "undue burden" on voting rights is preposterous. The law allows voters to use any photo ID issued by any federal, state, or municipal agency -- even a state university ID. And, once again, if a voter shows up without an ID, he or she can still cast a provisional ballot, which will count - provided the voter can produce identification within 6 days.

Ultimately, the law should be upheld, but that will take place long after the November election.

A district court judge in the Southern District of California rejected a so-called $8.5 million settlement of class actions against Groupon where the money not going to attorneys was going almost entirely to cy pres recipients that the court found inappropriate. Readers remember that I had objected.

Bainbridge on unions
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The libertarian case for Romney

Timothy Sandefur and Doug Mataconis say there is no such case. I think this is a dramatic overreaction; one can be disappointed in Romney's libertarian credentials (why is the campaign microtargeting me with anti-free-trade brochures?) and recognize that there is a substantial material difference between Romney and Obama to libertarian ideals in practice. That difference can be found in one important place: the Supreme Court. Sandefur puts too much weight on the symbolic appointment of Robert Bork to his legal advisory committee, but Bork is a figurehead for purposes of the primaries. He is not going to be deeply involved in policy-making or judicial selection; the Romney Justice Department will largely be staffed by the same Federalist Society members that happily invite Sandefur to speak before them. Sandefur claims "Romney's appointees are just as likely to be bad as good," but that's true only if one lets the perfect be the enemy of the good. Justices Kennedy and Scalia are in their late 70s, and both are the critical fifth vote on tremendously important libertarian principles:

  • There are four justices on the Supreme Court ready to hold that the First Amendment does not bar Congress from regulating political speech against incumbents.
  • There are four justices on the Supreme Court ready to hold that the Second Amendment does not create any individual rights against the government.
  • There are four justices on the Supreme Court ready to hold that the Commerce Clause creates no constraint on Congress's regulatory powers.
  • There are likely at least four justices on the Supreme Court ready to hold that the government can choose to discriminate on the basis of race if "diversity" is at issue.
One can point to individual unhappy results from Republican-appointed justices, but it is a mathematical certainty that Obama-appointed justices will flip the Court on these critical issues of the rights of individuals against the government—none more critical than First Amendment protection for political speech. Once that falls, the game is over and libertarians have lost permanently. This alone is a dispositive libertarian case for Romney, even before one gets to the difference between a Romney and Obama on economic freedom and regulation. Related: Nunziata; Severino; Levey.

In Kiobel v. Royal Dutch Petroleum, Nigerian plaintiffs alleged that a Dutch corporation assisted the Nigerian government in harming Nigerian citizens in violation of international law. Why is this in American courts? Good question, and one the Supreme Court asked after oral argument of this Alien Torts Claim Act case last term.

Professor Bainbridge worries that Justice Roberts will suffer from the Greenhouse effect and reverse the Second Circuit, but I see no reason to think Roberts will do so. As I noted last year, Roberts's decision in NFIB v. Sebelius was both disappointing and worthy of criticism, but it was entirely consistent with his pre-existing jurisprudence. Moreover, even the Obama administration is forced to admit that the Alien Tort Claims Act has metastasized beyond sound public policy. How can the US argue against abusive extraterritorial jurisdiction over United States citizens over United States claims by foreign nations if it permits judicial supremacy in cases like this? I haven't seen any defense of the expansive application of the Alien Tort Claims Act that reflects the risk to American sovereignty. I don't see this as being a 5-4 case.

More: POL featured discussion; a good Reuters profile of the amicus lawyers that persuaded the Court to take this tack; Anderson @ Volokh; Ramsey; AEI event; SCOTUSblog symposium; Cato amicus; Chamber amicus; SCOTUSblog link roundup and docket; argument transcript.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.