Overlawyered: Chronicling The High Cost Of Our Legal System

Archive for February, 2015

Housing disparate impact returns to the Supreme Court

Daniel Fisher recounts oral argument in the case of Texas Dept. of Housing vs. The Inclusive Communities Project. Roger Clegg (more) and Terry Eastland comment on a “to exclude one is implicitly to include all others” argument made by some on the liberal side.

Interviewed at HousingWire, Mike Skojec of Ballard Spahr predicts major consequences from the case (including, paradoxically or otherwise, higher costs for the building of “affordable” housing should the liberal side win) and has this to say about how disparate-impact advocates have overplayed their hand:

In some disparate impact cases, the theory has worked effectively to lessen racial discrimination and the perpetuation of illegal segregation. However, the substantial increase in the use of the theory by advocacy groups and HUD for many kinds of claims for which it should not be used, such as how risk is evaluated in selling property insurance or how management companies screen the risk of criminal conduct and other bad acts by possible tenants, has caused the theory to be attacked and probably struck down.

Why “probably” struck down? Well, there are many signals of the Court’s intention:

The Court has wanted to examine this issue, as evidenced by accepting cert three times. It has repeatedly said that it only wanted to look at whether disparate impact applies under the Fair Housing Act and not what standard would apply if it does exist, even though there are many circuit court decisions using disparate impact, and they have used conflicting standards. Typically, the Court would want to decide an issue that is in conflict between the circuits, especially here, where HUD has already tried to resolve the conflicts with a rule. The Court’s refusal to consider a standard suggests that the majority of the justices already know disparate impact will no longer apply under the Fair Housing Act.

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February 13 roundup

  • Government of Canada alleges bill-padding by “king of class action lawsuits” in Indian residential schools compensation case [CBC; earlier here, here, and here]
  • P.F. Chang’s sued over surcharge on gluten-free menu [Yahoo, John O’Brien/Legal NewsLine]
  • Town consolidation as a cure for fragmented North County woes? Not so fast [Jesse Walker] Would it help if the towns went broke? [Megan McArdle, related on “taxation by citation”] St. Louis Post-Dispatch has gathered its coverage of the Ferguson story at a single portal;
  • “It was (Scottish) land law’s greatest ever day on twitter” [@MalcolmCombe Storify]
  • Billion-dollar lawsuit over natural gas collapses after “lawyers discovered that a key piece of evidence had been fabricated.” [Daniel Fisher, Forbes]
  • “Double Platinum Rapper Shilling For Local Lawyer Now” [Above the Law; Mark Jones, Columbus, Ga.]
  • She stoops to instruct: “Read the briefs,” Linda Greenhouse tells SCOTUS regarding high-profile King v. Burwell ObamaCare case [James Taranto, WSJ “Best of the Web”]. More: Robert Levy.

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How SCOTUS urban legends are made

No, the Supreme Court did not rule that firing a woman for breastfeeding is okay because men can lactate too. [Philip Miles, Lawffice Space]

P.S. Snopes weighs in (headlines “create a grossly misleading impression based upon one very minor element of a single aspect of the case”), prompting the ACLU’s Galen Sherwin to try a rescue mission in hopes readers would not lose interest in the case entirely once deprived of its clickbait elements. Raw Story, which did much to spread the silly meme, has now appended an easy-to-miss correction; Slate, which slapped an equally ridiculous headline on an Amanda Marcotte post, as of this writing has not.

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Agreeing with EEOC, jury awards demoted boozing truck driver $119,000

In 2009, a driver with Old Dominion Freight Line, Inc., admitted to the company that he had an alcohol problem. The company told him that it would no longer allow him to drive heavy trucks for the firm. (It said it offered him a less safety-sensitive, but also significantly lower-paying, dock job.) The Equal Employment Opportunity Commission (EEOC) stepped in and sued on his behalf under the Americans with Disabilities Act (ADA). It conceded that Old Dominion could (and indeed had to) take the keys away from a heavy truck driver it found to be currently drinking on the job, but contended it had failed in its obligation to “make an individualized determination as to whether the driver could return to driving and provide a reasonable accommodation of leave to its drivers for them to obtain treatment.” Of course backsliding and remission are common following rehab treatment, which means as a group drivers with known past alcohol problems will have a higher risk profile than drivers without. That is why at an earlier stage of the case I asked, “Are we really required to take chances with 18-wheelers on the highway?”

Now we know the answer: Yes. A jury agreed with the EEOC and awarded the driver $119,000 in back pay.

P.S. On the other hand, upholding the decision of a federal district court in Georgia, the Eleventh Circuit has ruled that Crete Carrier Corp. did not violate the ADA when it declined to employ a truck driver with a “current clinical diagnosis of alcoholism,” a bar to driving under DOT regulations.

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Banking and finance roundup

  • Calvin’s refuge: how Swiss banking confidentiality undermined state despotism [Matt Welch, who also discusses how the gruesome FATCA law is proving to be the first component of an multilateral effort by OECD governments to curtail account privacy]
  • Dodd-Frank compliance costs and the rapid decline of community banks [Marshall Lux and Robert Greene/Kennedy School, Carrie Sheffield, Jeff Sovern with a scoffing view; WSJ]
  • “The IRS seized $242 million based on suspected structuring in more than 2,500 cases from 2005 to 2012.” [Jacob Sullum, new Institute for Justice report (PDF) by Dick Carpenter II and Larry Salzman and summary] More: new structuring case against Dubuque, Iowa widow raises question of whether feds have really followed through on promise not to press structuring charges where income is otherwise legal [AP/WHEC]
  • “House Investigators: DOJ Forced Banks to Donate to Left-Wing Groups” [Joel Gehrke, NRO]
  • “FDIC retreats on Operation Choke Point?” [Todd Zywicki] Rep. Luetkemeyer likely to keep up the pressure on regulators [Kevin Funnell]
  • “Fed Officials Accused of Perjury in AIG Bailout Trial” [Lawrence Cunningham, Concurring Opinions]
  • “Standard & Poor’s Settlement Shows Futility Of Fighting Government Policy” [Daniel Fisher, earlier]

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Eighth Circuit limits cy pres

Former Overlawyered contributor Ted Frank, in his more recent capacity as class-action objector, has done much to direct judicial attention to the abuses and problems of cy pres settlement provisions that channel supposedly leftover settlement moneys to third parties, often nonprofits to which the parties, their lawyers, or the judge is sympathetic. Last month a split Eighth Circuit panel, agreeing with his arguments, disallowed a deal by which money from the settlement of a class action over the NationsBank/BankAmerica merger would be sent to Legal Services of Eastern Missouri [Ted Frank/CCAF; Alison Frankel/Reuters; David Oetting v. Green Jacobson, ruling in PDF; Bill McClellan, St. Louis Post-Dispatch in September (“Why should money belonging to the class members be given to a charity — no matter how much the judge and the class-action lawyers like the charity?”); Sean Wajert] Per James Beck:

The Court explained, “Because the settlement funds are the property of the class, a cy pres distribution to a third party of unclaimed settlement funds is permissible only when it is not feasible to make further distributions to class members, except where an additional distribution would provide a windfall to class members with liquidated-damages claims that were 100 percent satisfied by the initial distribution.” … The Court disagreed with the district court’s finding that further distributions (including the search for class members whose checks had been unreturned) would be too “costly and difficult”, emphasizing that “that inquiry must be based primarily on whether the amounts involved are too small to make individual distributions economically viable.” …

The Court also “flatly rejected” class counsel’s argument that further distribution would be inappropriate because “it would primarily benefit large institutional investors, who are less worthy than charities such as LSEM,” … In other words, class counsel can’t use legal French to take a class’ money.

Meanwhile, “despite the growing controversy, the Rules Advisory Committee is considering formalizing the use of cy pres” in Rule 23 class actions, a step that not all will welcome [Andrew Trask]

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Free speech roundup

  • Departing NPR ombudsman claims U.S. free speech guarantees wouldn’t protect Charlie Hebdo, many on Twitter would like to set him straight on that [Edward Schumacher-Matos] More: Hans Bader.
  • Ninth Circuit urged to revisit whether First Amendment protects right to refer to real-world players in fantasy sports [Volokh]
  • Multi-party parliamentary panel in Britain proposes banning persons who “spread racial hatred” from Twitter, Facebook, other social media [BBC] Visiting newsagents: “Police from several UK forces seek details of Charlie Hebdo readers” [The Guardian]
  • Ecuador regime continues counterattack against social media critics at home and abroad [Adam Steinbaugh (Twitter suspends account “for posting DMCA notice”), The Guardian, earlier] Cartoonist “Bonil” put on trial [Freedom House]
  • Burt Neuborne, Robert Corn-Revere debate Williams-Yulee v. Florida Bar case: “Should elected judges be allowed to ask for donations?” [National Constitution Center podcast with Jeffrey Rosen via Ronald Collins, Concurring Opinions]
  • Second Circuit confirms: law allowing expungement of arrest records doesn’t require media to go back and delete related news stories [AP, Volokh]
  • Rakofsky suit against legal bloggers and other defendants (more than 80 in all) sputters toward apparent conclusion [Turkewitz, more (need for stronger protections against speech-chilling suits under New York law)]

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Rikers Island and the correctional officers’ union

It isn’t just in California (here, here, here, here, here, here) that the political power of guard unions makes prisons hard to reform. In December the New York Times investigated the head of the guards’ union in New York City, Norman Seabrook, seen as “the biggest obstacle to efforts to curb brutality and malfeasance” at the city’s notorious Rikers Island, and noted that most elected officials are reluctant to be quoted discussing him by name, sometimes due to “fears about their safety while visiting Rikers” if they get on his wrong side. Seabrook has derailed investigators, reformers, and oversight officials for years:

Perhaps the most naked display of Mr. Seabrook’s power came on Nov. 18, 2013, when a Rikers inmate, Dapree Peterson, was scheduled to testify against two correction officers in a brutality case. Mr. Seabrook essentially shut down the city’s courts by sidelining the buses that ferry inmates to and from court, interviews and documents show. As a result, hundreds of inmates missed court dates, including Mr. Peterson, whose beating had been investigated and referred for prosecution by [deputy commissioner for investigation Florence] Finkle.

The blockage also caused 49 inmates to miss scheduled medical appointments at Bellevue Hospital Center.

Full story here. More: John McGinnis (despite personal tone of Times’s criticism of Seabrook, his actions respond to the predictable incentives of a union leader), Daniel DiSalvo, Washington Examiner (unions can win popularity by preventing discipline of misbehaving workers), Ed Krayewski, Kevin Williamson. See also our coverage of correctional officers “bill of rights” laws in Maryland, Pennsylvania, etc. here, here, here, and here.

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