What are the implications of the Constitution’s Appointments Clause for the tenure of acting attorney general Matthew Whitaker? Thomas Berry, recently a legal associate at the Cato Institute and now at the Pacific Legal Foundation, takes up the question in the Yale Journal of Regulation. More: Michael Rappaport; and earlier at Overlawyered on other Appointments Clause controversies.
For well over a decade it’s been apparent that the distinctive arrangements by which asbestos plaintiff’s lawyers acquire control of the bankrupt remains of defendant corporations they’ve sued, and then exercise control over those firms’ claims, disbursements, and general management, is fraught with self-dealing and sometimes fraud, ranging from the charging of unnaturally high fees to the concealment of double- and triple-dipping by claimants. Business interests have pursued a campaign in the states and Congress to require more transparency and better judicial oversight of asbestos bankruptcy trusts. Now they may have a powerful ally indeed in the federal government, which has weighed in with an early statement of interest in one such bankruptcy to insist on better controls against fraud and abuse. Its standing for such an intervention arises in part from its role as Medicare and Medicaid payor (entitled by law to recoup some health-related outlays) rather than merely from any interest it might have in heading off fraud generally. [Daniel Fisher, Forbes; Daniel Gill, Bloomberg Law] Fisher:
In the Trump administration, at least, the government will no longer look the other way as asbestos lawyers negotiate lenient terms that make it easy for their current clients to get money at the expense of future claimants and federal entitlement programs….
The government’s unusually blunt statement of interest in the Kaiser Gypsum bankruptcy, long before any plan of reorganization has been approved, warns lawyers against including terms that make it hard to ferret out fraud and abuse, including confidentiality requirements that make it impossible to determine how much claimants have been paid and the basis for their claims….
The Justice Department also warned it will be looking for excessive fees and may not allow claimants to deduct those fees from reimbursement due the government for Medicare and Medicaid expenses.
Sequel: Feds object to trustee candidate in Duro Dyne bankruptcy.
[J]ust after Twitter and Facebook appeared before Congress, the DOJ released a statement saying that it was investigating whether or not actions by the big internet companies was “intentionally stifling the free exchange of ideas.” The full statement was short and to the point:
We listened to today’s Senate Select Committee on Intelligence hearing on Foreign Influence Operations’ Use of Social Media Platforms closely. The Attorney General has convened a meeting with a number of state attorneys general this month to discuss a growing concern that these companies may be hurting competition and intentionally stifling the free exchange of ideas on their platforms.
The competition question is one that the DOJ’s antitrust division clearly has authority over, but alarms should be raised about the DOJ or state AGs arguing that these platforms are “stifling the free exchange of ideas on their platforms.” Because while — on its face — that might sound like it’s supporting free speech, it’s actually an almost certain First Amendment violation by the DOJ and whatever state AGs are involved.
There are lots and lots of cases on the books about this, but government entities aren’t supposed to be in the business of telling private businesses what content they can or cannot host. Cases such as Near v. Minnesota and Bantam Books v. Sullivan have long made it clear that governments can’t be in the business of regulating the speech of private organizations — though those are both about regulations to suppress speech.
More: “How Regulating Platforms’ Content Moderation Means Regulating Speech – Even Yours” [Cathy Gellis]; John Samples, Cato Daily Podcast on Trump’s comments about Google searches; Federalist Society debate on social media antitrust; “if you’re going to make an allegation that there’s a big [anti-conservative] conspiracy [on search engine results], you should do your due diligence.” [Zachary Graves] Earlier here, etc.
- North Carolina’s heartbalm law strikes again, as judge orders man who slept with married woman to pay jilted husband $8.8 million [Virginia Bridges, Raleigh News & Observer, more on homewrecker tort]
- Cornell economist Rick Geddes explains the federal government’s postal monopoly [David Henderson]
- Trademark swagger: “Chicago Poke Chain Sends C&D To Hawaiian Poke Joint Demanding It Not Be Named ‘Aloha Poke'” [Timothy Geigner, Techdirt] “Shipyard Brewing Loses Its Lawsuit Over Ships and The Word ‘Head'” [same]
- “Man files lawsuit under False Claims Act against manufacturer of batteries for use in intercontinental ballistic missile launch controls, asks for $30 mil, settles for $1.7 mil. What follows is—in the trial court’s words—a “hellish” dispute over the man’s attorneys’ fees. Third Circuit: We feel you; the order reducing requested fees is affirmed in almost every respect.” [John K. Ross, Short Circuit, on U.S. ex rel. Palmer v. C&D Technologies]
- Using the law to suppress one’s competition: New York Taxi Workers Alliance cheers City Council’s move to cap Uber and ridesharing [Reuters] It’s totally normal and not at all suspicious that the city council president who wants tougher enforcement against Airbnb is also president of the state’s hotel lobby [Eric Boehm, Reason; Biloxi, Mississippi]
- For those still keeping score, it’s improper and prejudicial for the head of the nation’s law enforcement apparatus to declaim publicly against a criminal trial in progress, whether or not the defendant happens to be his own campaign manager [David Post, Volokh; April Post and podcast on inapplicable “fruit of the poisonous tree” claim]
The citizen-suit provision of the Clean Water Act (CWA) “allows any individual or organization that can establish standing to bring litigation against both private parties and the Environmental Protection Agency (EPA),” and incentivizes such suits by allowing filers to collect attorney’s fees. While some valuable enforcement actions may result, writes Marc Robertson for the Washington Legal Foundation,
it is not difficult for shakedown litigators to identify targets. One especially easy theory to advance in citizen-suit litigation is unlawful stormwater pollution. Stormwater regulations are exceedingly broad, and almost any business whose production process generates as a by-product anything that could be classified as a pollutant is vulnerable to a lawsuit. In many cases, attorneys’ fees can far exceed the damage from the alleged violations, leading companies to settle rather than litigate.
Recently, DOJ filed statements in three ongoing lawsuits that allege violations of stormwater discharge limits. … those suits are just three of more than 150 notices of violation submitted by this same law firm since 2016.
The similarly worded complaints, against industrial facilities in the Los Angeles area, alleged that pollutants at each facility washed off the property during rainstorms. While the government seldom exercises its right to intervene in citizen suits, DoJ in its three filings asked the court to examine whether the actions were truly an effective way to enforce the CWA or were serving other, less public goals. [Alfonso Lares v. Reliable Wholesale Lumber Inc. filing]
“Responding to the surge of website accessibility lawsuits filed under Title III of the ADA, 103 members of Congress from both parties sent a letter to Attorney General Sessions urging action to stem the tide of website accessibility lawsuits.” The group is led by Ted Budd (R-N.C.) and J. Luis Correa (D-Calif.) [Minh N. Vu and Samuel Sverdlov, Seyfarth Shaw]
Related, more trouble coming down the road: “The World Wide Web Consortium just published an expanded version of the WCAG to add 17 more requirements to address new technologies and other digital barriers for individuals with disabilities.” [Kristina M. Launey and Minh N. Vu, Seyfarth Shaw]
And yet more: federal-level reform is one thing, but a California state court decision in Los Angeles sets the stage for costly liability under the state Unruh Act no matter how Washington goes.
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.”
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]
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.
- Big news: U.S. Department of Justice changes sides in Lucia v. SEC, challenge to constitutionality of SEC use of administrative law judges [Thaya Brook Knight, Cato; Knight and Ilya Shapiro in August; Kevin Daley, Daily Caller]
- Cyan v. Beaver County Employees Retirement Fund, oral argument Nov. 28: SCOTUS considers limits on securities class actions in state courts [Washington Legal Foundation]
- GAO: 2013 financial-agency guidance on leveraged lending was in effect a rulemaking, but wasn’t submitted to Congress as required. Time for review [Michelle Price, Davide Scigliuzzo, Reuters]
- Missed, from last March: shareholder class action lawyers suing Sprint sought to charge for 6,905 hours of work by (as it turned out) disbarred attorney [Joe Palazzolo and Sara Randazzo, WSJ; Doug Austin, eDiscovery Daily Blog]
- Joseph Stiglitz would like to outlaw Bitcoin [Jim Epstein, Reason]
- Bad idea watch: “Chicago Council Considers Banning Cashless Stores” [Charles Blain, Market Urbanism Report]