Results matching “katrina”

Perez's Pension Power Play - PointOfLaw Forum

Vinny Sidhu
Legal Intern, Manhattan Institute's Center for Legal Policy

Newly-confirmed Labor Secretary Thomas Perez seems to certainly have no problem with courting controversy. After his widely-publicized quid pro quo with the city of St. Paul, Minnesota, which was designed to subvert judicial review of his prized "disparate impact" discrimination theory by the High Court, he has immediately found a new target to try and manipulate into submission. Allysia Finley of the Wall Street Journal recently reported that Mr. Perez has sent a warning shot across the bow of California Governor Jerry Brown over the state's recently-enacted pension reforms:

Two weeks ago, Mr. Perez sent the governor a letter warning that the pension reforms he signed into law last year violate the 1964 Urban Mass Transportation Act, which purportedly protects public transit workers' pension benefits and collective bargaining rights. California's pension legislation, Mr. Perez wrote, "diminishes both the substantive rights of transit employees under current collective bargaining agreements and narrows the future scope of collective bargaining over pensions."

It seems a bit odd that Congress would enact a law that would limit the ability of a sovereign state legislature to negotiate contract renewals dealing with future benefits of its own public employees, which does in fact constitute the substantive aspect of the CA legislation. The apparent implications of Mr. Perez's statement are that 1) any sort of pension reform enacted by a state is illegal, because pension reform done in the present restricts the bargaining position of unions in the future (regardless of the fact that the pension reform is duly-enacted state legislation), and 2) Congress may usurp the federal-state political structure when it is not happy with the results of pension reform done in the state context, under the pretext of a supposedly-preemptive piece of federal legislation.

This all seems odd because Congress did not in fact mention federal restrictions on contract bargaining in the context of future negotiations. Ms. Finley writes:

Thing is, the 1964 federal law merely protects employees' existing benefits under collective bargaining agreements and says nothing about the "future scope" of collective bargaining. California's pension reforms apply only to future benefits for new hires.

Mr. Perez's real play here seems to be to restrict the ability of states to negotiate in good faith with their public unions, while making sure that the liberal power base stays happy. The biggest problem with this tactic is its potential budget-busting effects on the state:

Thus, Mr. Perez is threatening to cut off billions in federal grants for local transit agencies starting Friday if California doesn't fix its reforms to comply with his interpretation of the 1964 federal law. The Los Angeles County Metropolitan Transportation Authority would stand to lose $268 million. Nearly $70 million in funding for Sacramento's Regional Transit District could dry up, thus halting construction on a light-rail line. Santa Barbara's Metropolitan Transit District has warned that it would have to reduce services by 30% and lay off 50 bus drivers.

Mr. Perez might want to make sure that the very public unions he is trying to keep happy do not revolt when the inevitable austerity measures arrive.

State tax changes - PointOfLaw Forum

Governors in Louisiana and Kansas are considering ending the state income tax. I'm a Pigouvian, so I approve: one wants taxes to have as few negative distortions as possible, and that means taxing undesirable or unavoidable activity, not productive activity.

Unfortunately, Virginia's governor is proposing to go in the opposite direction, proposing to replace its 17.5-cent/gallon gasoline tax with a 16% increase in the sales tax. That's exactly backwards. While consumption taxes are generally preferable to income taxes, it's far better to focus those taxes on activities with negative externalities—like driving. Virginia roads, especially in the Washington, DC, suburbs, are already among the most congested in the nation. (New subway lines will not do much to fix the problem, because the Metro is already at capacity in the number of trains that can cross the tunnel and bridge across the Potomac River; moreover, Metro refuses to adequately shift load through more aggressive peak-load pricing, meaning many people refuse to take the Orange Line during rush hour because they cannot be assured of even getting on.) The only time in my eleven-plus years in Northern Virginia that I have not seen the roads completely mobbed well before and after normal rush hour was in the immediate aftermath of Hurricane Katrina, when gas prices briefly spiked to nearly $5/gallon. People respond to incentives, and if gasoline prices go up, they will shift to carpooling and shorter drives at the margin. Reducing gasoline taxes will increase congestion, and spur more spending on road-building, a double-whammy, and that's not even counting the externalities of carbon emissions, which at a minimum lead to unpleasant smog.

Virginia plans to collect about $1 billion in gasoline taxes and $11 billion in income taxes. Why not make the ratio 1:1 instead of 1:11? Cutting the income tax rate in half, as Maryland raises its own rate and nearby DC has among the highest rates in the nation, would spur even more wealthy people to move to Virginia from Maryland and DC (and increase Virginia property values) meaning that the revenue loss would not be anywhere near 50%; raising the gasoline tax to collect $6 billion (even as it would need to be increased by more than 6-fold to compensate for lower gas purchases) would reduce road congestion, increase Metro usage (and thus Metro revenues), and thus decrease highway expenses. Win-win-win.

Krugman Confused About State vs. Federal Government - PointOfLaw Forum

In what appears to be an attempt to scare wavering voters into supporting the president, New York Times columnist Paul Krugman argues that if Hurricane Sandy had arrived under a Romney administration, the victims would have been left without any government assistance. And by "government," Krugman means the federal government because, of course, only the federal government can respond to emergencies.

After discussing past Republican attempts to devolve disaster relief to the states, Krugman concludes "if Mr. Romney had been president these past four years the federal response to disasters of all kinds would have been far weaker than it was." And to prove the virtue of federal intervention, Krugman evokes "the scene in flooded Hoboken, with the National Guard moving in the day after the storm struck to deliver food and water and rescue stranded residents."

There's just one problem: the National Guard is a unit of state government, not the federal government. Indeed, it is the successor to the state militias. Krugman might have taken a moment to consult the Pentagon's own website discussing post-Sandy relief: "The National Guard takes its missions from the governor, and they're supporting the first responders," reports the DoD, quoting Army General Frank Grass.

Governor Christie called up the New Jersey Guard; Governor Cuomo, the New York Guard. It appears that FEMA played a role in getting other states to contribute guardsmen to the relief effort, but it is preposterous to think that such cooperation would not have occurred without Uncle Sam.

The Constitution empowers the president to summon the state militias "to execute the laws of the union, suppress insurrections, and repel invasions." But none of those conditions applies at present and (to my knowledge) President Obama has not asserted the power to call up the National Guard for post-Sandy relief. But when there are cheap political points to be scored, Krugman is not one to be distracted by the Constitution -- or the facts.

Schwartz et al. on climate-change litigation - PointOfLaw Forum

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.

In re Katrina Canal Breaches Litigation - PointOfLaw Forum

In a surprising decision in March, the Fifth Circuit upheld judgments against the Army Corps of Engineers seeking to hold them liable for damages from levees that failed during Hurricane Katrina. This did not stand: on a petition for rehearing, the panel reversed itself and threw out the claims against taxpayers. [In re Katrina Canal Breaches Lit. (5th Cir. Sep. 24, 2012) via Bashman link roundup]

Cobell v. Salazar (D.C. Cir. 2012) - PointOfLaw Forum

I'm disappointed by Tuesday's decision in Cobell v. Salazar, the first time I ever lost a federal appeal I've argued. (Of course, as always, the Center for Class Action Fairness is not affiliated with the Manhattan Institute.) [Briefing; Coverage: DC Circuit Review; BLT; ICTMN; AP; Reuters; Cronkite; McClatchy; Oklahoman; wildly inaccurate KFBB.]

RIP James Q. Wilson - PointOfLaw Forum

Jim Hood reelected - PointOfLaw Forum

Mississippi attorney general Jim Hood won reelection in a landslide. Radley Balko tweets: "Mass corruption of state's justice system never an issue. Race was about $400 dinner at a steakhouse." And Balko is surely talking only about the criminal justice system there, not Hood's cozy relationship with trial lawyers where he delegates litigation to them that helps out the trial bar far more than taxpayers, or his carrying water for the now-convicted Dickie Scruggs's illegitimate litigation against insurance companies over Hurricane Katrina. [LNL]

The Hood reelection shows the problem of many states' constitutional structure. Mississippi voters have elected a governor, legislature, and high-court judiciary willing to restore the rule of law to the state and attempt to end its reputation as a judicial hellhole, but because trial lawyers control the office of a down-ballot executive branch race, the voters' will and true justice reform is hindered. Reform is needed.

As Connecticut's attorney general, Richard Blumenthal used to be able to get his shot of publicity by filing populist, anti-business lawsuits. Now as a junior member of the U.S. Senate, he's forced to seek publicity in other ways, introducing outrageous charges of possible criminality in his campaign against the oil industry. From The Hill, "Grand jury floated to probe gas prices":

Sen. Richard Blumenthal (D-Conn.) on Sunday called for an aggressive federal probe - including a possible grand jury - into whether rising gasoline prices stem from illegal manipulation of energy markets....

Blumenthal, Connecticut's former attorney general, said on CBS' "Face the Nation" that federal officials need to play hardball.

"I commend and applaud the president for focusing on this issue but I think there really needs to be an investigation involving, for example, subpoenas and compulsory process which I used as attorney general in similar investigations. There needs to be very possibly a grand jury to uncover the potential wrongdoing," said Blumenthal, who was elected to the Senate last year.

Blumenthal is a member of the Senate Judiciary Committee, and you would expect Chairman Patrick Leahy to hold hearings to attack "Big Oil" soon enough.

The political posturing that historically accompanies rising gas prices has gotten even more twisted this year than in the past. Last week President Obama announced that Attorney General Eric Holder would lead a task force, as described in his Saturday radio address, "with just one job: rooting out cases of fraud or manipulation in the oil markets that might affect gas prices, including any illegal activity by traders and speculators." Holder touted his effort at the White House blog and promoted it at the dispassionately named web site,

Why turn to the Department of Justice when the Federal Trade Commission already has the expertise in investigating oil pricing and speculation? A reasonable conclusion is that the White House wants a political document with pre-ordained conclusion, because factual studies have previously disproved allegations of speculation. Here's what the FTC concluded in its study of pricing in the wake of Hurricane Katrina, a report released in May 2006.

In its investigation, the FTC found no instances of illegal market manipulation that led to higher prices during the relevant time periods but found 15 examples of pricing at the refining, wholesale, or retail level that fit the relevant legislation's definition of evidence of "price gouging." Other factors such as regional or local market trends, however, appeared to explain these firms' prices in nearly all cases. Further, the report reiterated the FTC's position that federal gasoline price gouging legislation, in addition to being difficult to enforce, could cause more problems for consumers than it solves, and that competitive market forces should be allowed to determine the price of gasoline drivers pay at the pump.

A separate study in 2008 by the Commodity Futures Trading Commission found that financial trading had not driven price moves in the oil market. (See Wall Street Journal editorial, Sept. 15, 2008, "See You Later, Speculator.")

A tale of two police departments - PointOfLaw Forum

The Department of Justice Civil Rights Division is critical of the New Orleans Police Department and its use of excessive force. Its report (via Sailer) singles out the too-low recruiting standards:

NOPD hired hundreds of officers during a relatively short time period; one estimate is that 400 officers were hired during the three year period following Katrina. In its press to hire these officers, NOPD reportedly lowered its recruiting standards, essentially removing the physical agility requirement and asking the Civil Service Commission to score the written portion of the application less vigorously. ...

In interviews with NOPD officers at all ranks, we heard the consistent complaint that the Training Academy routinely graduated police recruits who were sub-par and not fit for duty.

Meanwhile, in Dayton, Ohio, the Department of Justice Civil Rights Division has successfully demanded that that city's police department lower its recruiting standards, complaining that the existing high standards on the written exam discriminated against African-Americans.

Supreme Court declines to hear 5th Circuit climate suit - PointOfLaw Forum

The U.S. Supreme Court today denied the petition of mandamus from plaintiffs who in Comer v. Murphy Oil Co. had sued energy companies and manufacturers for contributing to global warming, which strengthened Hurricane Katrina, which worsened property damage in Mississippi, so pay up. (Order List)

This is the suit that ran such a strange course through the lower courts.  U.S. District Court Judge Louis Guirola, Jr., of the Southern District of Mississippi originally dismissed the lawsuit in August 2007, ruling the plaintiffs lacked standing and the tort claims had to be resolved through the political system. (Opinion here, via Global Climate Law Blog.) The plaintiff's appealed to the Fifth Circuit, and on Oct. 16, 2009, a three-judge panel ruled two-to-one that the lawsuit had indeed raised justiciable issues that should be heard at trial. (Opinion here.)

The Fifth Circuit than agreed to consider the case en banc, but then one more appellate judge recused herself for a conflict of interest, eliminating the necessary quorum to hear the case. Since the three-member panel's ruling had been vacated, the case was dismissed (ruling), and the plaintiffs were forced to pursue the mandamus route in an attempt to keep the litigation alive.

Two other federal global warming/public nuisance suits remain: American Electric Power v. Connecticut, on appeal to the U.S. Supreme Court, and Native Village of Kivalina versus Exxon Mobil, on appeal to the Ninth Circuit.

See also, Climate Law Blog, "SCOTUS Denies Petition for Mandamus in 5th Circuit Climate Nuisance Suit," and earlier, Jonathan Adler at, "Writ of Mandamus Sought in Comer v. Murphy Oil." Earlier POL posts here.

Around the web, January 6 - PointOfLaw Forum

  • Professor Bainbridge weighs in on yesterday's post on securities litigation. [Bainbridge]
  • Fifth Circuit rejects questionable Katrina class action settlement. [Beck; In re Katrina Canal Breaches Litig.]
  • $950/hour law professor vouches for Ken Feinberg's ethics; plaintiffs' lawyers complain that BP is using the same tactic plaintiffs' lawyers regularly use to prove their own ethics. [AP/]
  • Damned if you, damned if you don't. Fox News doesn't hit the sweet spot between too much and not enough discipline to enforce hostile-environment policies, and gets with a lawsuit by white news anchor who was fired after using the N-word; the lawsuit has survived a motion to dismiss in the E.D. Pa. [On Point]
  • Compassion and humanity, or just bad judgment? The case of Sonia Sotomayor. [Epstein @ Ricochet]
  • Does educational affirmative action have adverse effects on minority representation in white-collar careers? [Heriot @ Fed Soc]
  • Most ridiculous lawsuits of 2010 winners. [ILR]
  • Lawsuits meant to silence critics. [Overlawyered]

Around the web, December 9 - PointOfLaw Forum

  • Toyota isn't going to be able to win its sudden acceleration litigation at the motion-to-dismiss phase. [NLJ] This means the case proceeds to tens of millions of dollars worth of discovery as plaintiffs search for documents that they can take out of context to "prove" an otherwise nonexistent problem.
  • Brooklyn lawsuit: because they offer keyless ignition, it's Toyota's fault that 79-year-old plaintiff forgot to turn off his car and died of carbon monoxide poisoning. [NYDN via ABAJ] It's almost as if Toyota should require a surcharge for elderly drivers.
  • It doesn't necessarily mean much legally if a wealthy criminal defendant appeals a criminal conviction—the cost-benefit analysis is to seek every level of appellate review possible—but Conrad Black might have a point in his en banc petition objecting to the Seventh Circuit's "harmless error" analysis. [Bashman link roundup; Earlier at POL] (Update: see now Elwood @ Volokh.)
  • More tapes the Ecuador plaintiffs don't want you to see in the Chevron case. [Am Law Daily]
  • One of the collateral tragedies of Richard Nagareda's death is that he was one of the few law professors willing to take a common-sense stand on Twombly and Iqbal. Compare the nonsense from Arthur Miller.
  • Fisherman on the Gulf Coast are doing pretty well under the BP compensation scheme. [FrumForum]
  • Speaking of the Gulf Coast, the opinion is unpublished, but the Fifth Circuit got around to affirming the rejection of a class certification in Katrina litigation against insurers. [Jackson]
  • A new blog on originalism.
  • It's behind a subscription wall, but the story is titled "Legal Activist Ted Frank Cries Conflict of Interest, Forces O'Melveny and Grant & Eisenhofer to Modify Apple Securities Class Action Deal." [Litigation Daily ($)]

Around the web, October 21 - PointOfLaw Forum

  • Fifth Circuit: can't blame dredging companies for Hurricane Katrina damage. [Wajert; In Re: In the Matter of the Complaint of Great Lakes Dredge & Dock Co. LLC]
  • Ohio Court of Appeals: no class action against Best Buy for complying with state law in stove installation. The case was particularly egregious given that the "defrauded" lead plaintiff, who spent an extra $68 to come into compliance with state law, got a $75 gift certificate from Best Buy for his trouble. [Jackson]
  • Robbins Geller (which used to be Coughlin Stoia which used to be Lerach Coughlin) hires lobbyists to promote securities litigation in Dodd-Frank regulations. [BLT]
  • In West Virginia, feds not being fooled by Darrell McGraw creating slush funds with settlements when he was supposed to be reimbursing Medicare. [LNL]
  • Is the bisphenol A crisis "fiction"? [Goldberg @ Examiner]
  • Defense win for Novartis in New Jersey Aredia/Zometa jaw osteonecrosis case, even though plaintiff was a showcase plaintiff. [Drug and Device Law]
  • Democratic think tank Third Way opposes foreclosure moratorium. [via Zywicki @ Volokh]
  • NYCLU Title IX lawsuit squashes high-school soccer in NYC. [OL]

  • A review of the classic In re Hydrogen Peroxide class action certification decision. [Trask]
  • Indictment of Georgia federal judge on drug charges giving rise to challenges to his decisions, including by a vegan group that didn't get attorneys fees after the won only four dollars in a lawsuit. [AJC; WSJ Law Blog]
  • MI's Kay Hymowitz quoted on academia's rediscovery of the importance of culture in evaluating poverty. [NYT]

The release of emails from the Scruggs Katrina Group's PR firm shows David Rossmiller getting under the skin of some corrupt lawyers and their PR flacks. See this must-read post from David Rossmiller: the quote in this post title ain't the half of it. It's great to see him back blogging.

Rubin on Katrina and Deepwater - PointOfLaw Forum

Emory professor Paul Rubin, a friend who's done a good bit of work on the litigation-reform front, extends Ted's Jones Act analysis in a broader discussion comparing the federal government's reactions to Deepwater Horizon and Hurricane Katrina, in today's Wall Street Journal.

For the record: in Hurricane Katrina, the Bush administration was able to get Jones Act restrictions that interfered with help from international ships waived on Day 3; for Deepwater Horizon, where international help is much more critical due to shortages of domestic shipping able to engage in oil-skimming, it's 60 days in, and the Obama administration still hasn't waived the Jones Act. Keith Hennessey, who was involved in the Bush White House process, explains; see also WSJ, Olson, Bader.

Given that the only purpose of the Jones Act is 1920-era protectionism of special interests against foreign competition at the expense of the American consumer, and given that this could be done with the stroke of a pen, this should be a much bigger scandal. But it appears that the Obama administration is stonewalling on the issue by falsely claiming that a Jones Act waiver would not make any difference; after all, if they do waive the Jones Act, and the public sees how much additional help European allies could have been providing all along, the comparison with the Bush administration will become even more unfavorable.

Recusable, non-justiciable, dis-enbancable - PointOfLaw Forum

When an eighth judge recused herself* from hearing the lawsuit on global warming damages, the U.S. Fifth Circuit of Appeals found itself without a quorum for en banc consideration of Comer v. Murphy Oil. The court on Friday determined it had no legitimate alternatives for hearing the appeal after the court had vacated the three-judge panel's ruling in anticipation of the en banc review. The result is that the U.S. District Court judge's original dismissal of the Comer lawsuit stands.

This is a strange one. What would have compelled a recusal after the en banc court had already been properly constituted? The Fifth Circuit would only say that "new circumstances arose." The Wall Street Journal speculated in an earlier editorial: "In Comer, did one of the more liberal Fifth Circuit judges buy stock specifically to blow up the quorum?" The Journal provides no evidence -- the court is not talking -- but the logic is that by blowing up the case, the recusing judge is pushing the global warming issue to the U.S. Supreme Court, increasing pressure for a political resolution of the policy issues. It's the judiciary's version of EPA's power play to regulate greenhouse gas emissions under the Clean Air Act: You don't like it? Legislate!

One can reasonably infer a legal strategy based on recusal from the fact the plaintiffs -- Mississippi residents trying to apportion blame and win cash for damages from Hurricane Katrina -- sued some 150 energy and industrial companies. (Having engaged in years of respiration, we breathed a sigh of relief at having escape the suit.)

The Fifth Circuit's order says the court considered alternatives:

  • Asking the Chief Justice to appoint a judge from another Circuit pursuant to 28 U.S.C. ยง 291.
  • Declaring that there is a quorum under the provisions of Federal Rule of Appellate Procedure 35(a).
  • Adopting the Rule of Necessity, allowing disqualified judges to sit.
  • "Dis-enbancing" the case and ordering the panel opinion reinstated, and issuing the mandate thereon.
  • Holding the case in abeyance until the composition of the court changes.

In a dissent, Judge Eugene Davis, joined by Judge Carl Stewart, writes:

The five judges who entered this order reasoned that this result was mandated by our Local Rule 41.3, which provides: "Unless otherwise expressly provided, the granting of a rehearing en banc vacates the panel opinion and judgment of the court and stays the mandate."

But Local Rule 41.3 is a "provisional, practical rule" not intended for this kind of circumstance -- the loss of a quorum -- and it makes no sense to it to have an impact on the merits of the case, Davis argued.

Lawyers we talk to cannot recall a similar case; the judges are making new interpretations of their rules based on a recusal occurring in the middle of the process.

All this makes us even more curious as to what the "new circumstances" were. Did they arise from a judge's politically motivated act or something more mundane? We demand transparency!

More from Howard Bashman at How Appealing. As of 9:45 a.m. Monday, we find no news (non-blogging) accounts of the court's action.

* Judge Davis identifies the recusing judge as a "her," but that doesn't narrow down things too much: Seven of the 16 judges on the Fifth Circuit are women.

A federal trial judge has found the Army Corps of Engineers to have been grossly negligent, and the proximate cause of the flooding of the Lower 9th Ward and St. Bernard parish (both areas were virtually destroyed) during Hurricane Katrina. [Here is an LA Times story on the ruling.] Judge Stanwood R. Duval found that nonfeasance lay at the base of the flooding of East New Orleans, but that misfeasance was the cause of the "Lower 9th" and St. Bernard disasters. This could potentially be a humongous source of civil liability for the United States.

Suing oil companies for causing Katrina, cont'd - PointOfLaw Forum

Ilya Shapiro thinks that the full Fifth Circuit en banc will overturn the recent panel decision in Comer v. Murphy Oil, or that the Supreme Court will agree to review the case. [Cato at Liberty]. "Mass tort litigation specialist Russell Jackson calls the plaintiffs' claims "the litigator's equivalent to the game 'Six Degrees of Kevin Bacon.'" Jackson also notes in a second post that a judge's recent dismissal of the Kivalina suit should be helpful to defendants seeking review of Comer. Earlier here.

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