Posts Tagged ‘Department of Justice’

AT&T Time Warner merger

My new piece at CNN begins by noting that antitrust law has moved on since the Truman era, even if the U.S. Department of Justice hasn’t quite:

In 1948 the US Supreme Court ordered Hollywood studios to sell their movie theaters, following the then-popular idea that the government should police marketplace competition by restraining businesses’ vertical integration — or as we might put it these days, by ordering content kept separate from distribution.

The surprise in 2018 is not so much that US District Judge Richard Leon rejected the government’s challenge to the $85 billion AT&T-Time Warner merger. That much was expected by most antitrust watchers. The shock came from the stinging way he rejected the government’s evidence — using language such as “gossamer thin” and “poppycock.”

CNN, of course, is owned by merger participant Time Warner. The question is not whether vertical integration will happen in video delivery, but whether older companies will be allowed to catch up. For Washington to block a merger like this, I suggest, “would be as futile as attempting to separate Net from Flix or You from Tube.”

Department of Justice, state AGs intervene in class action settlements

Dusting off rarely used powers held under the Class Action Fairness Act, the U.S. Department of Justice and some state attorneys general have begun to file in opposition to class action settlements. In a case against defendants Ashburn Corporation and online discount wine retailer Wines ‘Til Sold Out (WTSO), which had already drawn objections from CEI’s Ted Frank, DoJ and AGs from 19 states succeeded in getting some settlement terms rewritten, in a deal then denied final approval by the trial judge, who saw additional problems. [Alison Frankel, Reuters; Perry Cooper, Bloomberg Law and more; Nicholas Malfitano, Legal Newsline] For Arizona Attorney General Mark Brnovich, the wine case was the ninth in which his office had intervened against a class settlement it viewed as unfair [Brnovich press release] “If your state’s AG isn’t joining the briefs of the bipartisan coalition led by Arizona defending consumers against class action abuse, you should be asking their office some tough questions.” [@tedfrank on Twitter]

Trump’s first clemency

Under the circumstances, eight years (as opposed to 27) was long enough for Sholom Rubashkin to serve behind bars for bank fraud and other financial misconduct, especially since by interfering in his bankruptcy proceedings the U.S. government had itself driven up the cost of his actions to creditors, thus pushing him into a higher sentencing range. There were other irregularities in his trial as well. But let’s hope that President Trump extends clemency to other equally deserving inmates who lack the money and influence to call forward a campaign on their behalf [Mark Joseph Stern, Slate] More: Des Moines Register, WLF, NBC.

Banking and finance roundup

Marijuana, federalism, and law enforcement

Attorney General Jeff Sessions has rescinded an earlier Justice Department memo which had prescribed a hands-off approach to enforcing some aspects of the federal ban on marijuana in states that have legalized the drug for medical or recreational use. A needless step backward for federalism and state autonomy, or a necessary implication of the rule of law and the associated geographical uniformity of federal law? Some commentaries: Ken White/Popehat; Jacob Sullum (“Although [the] move reflects Sessions’ well-known opposition to marijuana legalization, it is not clear how big an impact it will have on the cannabis industry, because federal prosecutors have always had broad discretion but limited resources in this area”); Jonathan Blanks (“This move endangers state-legal businesses and violates the principle of federalism that has been central to the Republican Party for decades”); Jonathan Adler; Ilya Somin; Jeffrey Miron (“Marijuana liberalizations (decriminalization, medicalization, and legalization) have generated none of the negatives asserted by Sessions [who compares the drug to opiates and links it to violence]; in fact, the evidence shows minimal impact on use, health, traffic safety, education, or crime”).

U.S. Department of Justice: We’re ending regulation by guidance

The U.S. Department of Justice, November 17 [press release/memo]:

Today, in an action to further uphold the rule of law in the executive branch, Attorney General Jeff Sessions issued a memo prohibiting the Department of Justice from issuing guidance documents that have the effect of adopting new regulatory requirements or amending the law. The memo prevents the Department of Justice from evading required rulemaking processes by using guidance memos to create de facto regulations.

In the past, the Department of Justice and other agencies have blurred the distinction between regulations and guidance documents. Under the Attorney General’s memo, the Department may no longer issue guidance documents that purport to create rights or obligations binding on persons or entities outside the Executive Branch….

“Guidance documents can be used to explain existing law,” Associate Attorney General Brand said. “But they should not be used to change the law or to impose new standards to determine compliance with the law. The notice-and-comment process that is ordinarily required for rulemaking can be cumbersome and slow, but it has the benefit of availing agencies of more complete information about a proposed rule’s effects than the agency could ascertain on its own. This Department of Justice will not use guidance documents to circumvent the rulemaking process, and we will proactively work to rescind existing guidance documents that go too far.”

This is an initiative of potentially great significance. For many decades, critics have noted that agencies were using Dear Colleague and guidance letters, memos and so forth — also known variously as subregulatory guidance, stealth regulation and regulatory dark matter — to grab new powers and ban new things in the guise of interpreting existing law, all while bypassing notice-and-comment and other constraints on actual rulemaking. To be sure, many judgment calls and hard questions of classification do arise as to when an announced position occupies new territory as opposed to simply stating in good faith what current law is believed to be. But the full text of the memo shows a creditable awareness of these issues. Note also, even before the Justice memo, Education Secretary Betsy DeVos’s statement in September, on revoking the Obama Title IX Dear Colleague letter: “The era of ‘rule by letter’ is over.”

Another notable pledge in the DoJ press release:

The Attorney General’s Regulatory Reform Task Force, led by Associate Attorney General Brand, will conduct a review of existing Department documents and will recommend candidates for repeal or modification in the light of this memo’s principles.

Note also this recent flap over certain financial regulations and the possibility that they may have been issued without notice to Congress, which could preserve Congress’s right to examine and block them under the terms of the Congressional Review Act.

New FCPA Corporate Enforcement Policy at DoJ

The Department of Justice has announced a new corporate enforcement policy for the Foreign Corrupt Practices Act; it doesn’t go nearly as far as compliance lawyers and critics of the FCPA might have wanted, though. Commentary by Mike Koehler (“FCPA Professor”) here, here, and here (FAQ). More: Federalist Society podcast discussion with John C. Richter and George J. Terwilliger.

Crime and punishment roundup

Crime and punishment roundup

  • “This Massachusetts Lawmaker Wants to Throw Folks in Prison for Having Secret Car Compartments” [Scott Shackford; earlier on compartment bans here, here, and here]
  • Traffic stops dangerous and intrusive. Why not focus them where they’re most needed? [Steve Chapman] More: a different view from Scott Greenfield;
  • Why is AG Sessions enabling forfeiture end runs by police around their own state lawmakers? It’s not good federalism [Natalie Delgadillo, Governing] Angling to end suit, Philadelphia offers to end use of asset forfeiture funds for law enforcement [Robert Moran, Philadelphia Inquirer]
  • White-collar prosecution: “Time To Revisit The Yates Memo?” [Robert Bork, Jr.]
  • What happened when Rhode Island inadvertently legalized indoor prostitution [Elana Gordon, NewsWorks]
  • What if U.S. Department of Justice policies had to be run through OIRA regulatory review for cost-benefit comparison, as many other agencies’ do? [Mark Osler, Marshall Project]