- Still money left in that piggy bank: Justice Department shakes $1.7 billion out of J.P. Morgan because its custody wing kept handling a primary Bernie Madoff account while a distant equity desk grew suspicious of him, in what “looks a bit like a tax on bigness and integration” [Matt Levine, Bloomberg; NPR].
- Legacy of TARP one of cronyism and lawlessness [Mark Calabria, USA Today]
- NYT assails a couple of academics as mouthpieces for Wall Street, Felix Salmon has a bit to say about that [Reuters, EconBrowser, Bainbridge, Pirrong] Daniel Fisher on a possible tie-in with Times reporter David Kocieniewski’s earlier piece flaying Goldman Sachs over aluminum warehousing [Forbes]
- “Court Receptive to Overturning SEC’s Conflict Minerals Disclosure Rule” [Fed Soc Blog]
- “Target Breach — Are Dodd-Frank ‘Swipe Fee’ Price Controls to Blame?” [John Berlau, CEI “Open Market”] “Volcker Rule Overshoots Wall Street to Hit Utah” [same]
- “CFPB and Disparate Impact” [Hester Peirce, Point of Law]
- “It might cost you $39K to crowdfund $100K under the SEC’s new rules” [Sherwood Neiss, VentureBeat via @jerrybrito]
- Here’s a novel proposal for corporate governance: use the rules agreed upon by the original parties to the transaction [Hodak]
- Taxpayers on hook: “N.J. boy left blind and brain-damaged after being beaten by father awarded $166M by jury” [Newark Star-Ledger]
- “Psychic Love Spell Center stole my money, lawyer alleges in lawsuit” [Houston; ABA Journal]
- “You can’t win these suits… Move on with your life.” Good advice for someone falsely accused of rape? [Roxanne Jones, CNN]
- Critical look at California judge’s lead paint ruling [Daniel Fisher/Forbes, earlier here, here]
- $6 check and apology over “F-word”: “Pub owner’s sarcastic response to Starbucks cease-and-desist letter goes viral” [ABA Journal]
- Suburb doesn’t want to accept public transit, but feds force its hand by use of controversial disparate impact theory [Dayton Daily News]
- Randy Barnett: libertarianism as a vehicle for moderation, toleration and social peace [Chapman Law Review/SSRN; one of my favorite academic papers from last year]
It looks as if someone really doesn’t want the Obama administration’s treasured but shaky “housing disparate impact” theory to come under review by the Supreme Court [Josh Blackman on reports of settlement mooting Mount Holly, N.J. case granted certiorari and pending before the Court; earlier on controversial tactics used to moot St. Paul case through settlement]
More: Piscataway v. Taxman also dropped off the Court’s docket via a mootness tactic. And shorter Doug Kendall/Constitutional Accountability Center: how dare PLF, Cato and IJ take the Court’s word on what the issue is in Mt. Holly? [Ilya Shapiro]
Under the “disparate impact” theory of housing discrimination, private business decisions or local government policies not motivated by race are deemed unlawful anyway because they have a differential statistical impact on housing transactions by members of a given racial group. A mortgage lender’s policy of lending only to borrowers with high down payments or sterling credit ratings, for example, might be subject to attack on the grounds that it tended to screen out minority borrowers, even if such was not its intention, and was not justified by business necessity. The U.S. Supreme Court has never ruled on this theory; two years ago, in a case called Magner v. Gallagher, it was widely speculated that the Court would disapprove disparate-impact claims, a prospect the Obama administration (which is deeply invested in the theory) managed to dodge only by arranging to moot the case through settlement.
In the new Supreme Court case of Township of Mount Holly v. Mount Holly Gardens Citizens in Action, Inc., plaintiffs claim that it is illegal for a New Jersey township to slate a tract of development land for detached single-family housing because poorer persons are less likely to be able to afford such housing and minority persons are more likely to be poorer. The Obama administration is backing the claim. [earlier] The Cato Institute, along with the Pacific Legal Foundation and several other groups, has filed an amicus brief defending the township. Writes Ilya Shapiro at Cato at Liberty:
The Gardens’ residents can’t afford the new housing not because of their race but because of their poverty. While it’s a harsh truth that a disproportionate number of minorities live in poverty, claiming that making expensive products is racist and that these “racists” have an obligation to compensate the victims of poverty is absurd. The FHA was intended, in the words of Senator Walter Mondale, “to permit people who have the ability to do so to buy any house offered to the public if they can afford to buy it. It would not overcome the economic problem of those who could not afford to purchase the house of their choice.”
For following the law as it was written and attempting to improve a blighted neighborhood without resorting to eminent domain abuse, Mount Holly was rewarded with a decade’s worth of vexatious litigation — which the Supreme Court should now end once and for all.
More: Hans Bader, Examiner.
I’ve got a new piece at Reason on the long-running dispute between the federal Department of Housing and Urban Development and the government of Westchester County in suburban NYC. Claiming that Westchester has failed to follow through on promises of attracting more minority homeowners, HUD is suing the county and wielding funding cutoffs to get it to step up a large commitment to subsidized housing, override town zoning rules, and enact an ordinance forbidding private landlords from turning away Section 8 tenants. The WSJ editorialized yesterday on the subject. Further background: ironic that county is being penalized after seeking to cooperate [Gerald McKinstry, Newsday; Joanne Wallenstein, Scarsdale 10583]; former Democratic county legislator backs county executive Rob Astorino on so-called “source of income” legislation [Journal-News]; similar law already in effect in Washington, D.C. [Examiner]; earlier coverage here, here, etc., and my 2009 City Journal account.
P.S. Shortly after our piece, a Second Circuit panel ruled the county out of compliance. ProPublica, the foundation-supported reporting-and-opinion outfit, has been doing a series of reporting-and-opinion pieces taking the plaintiffs’ side, including this latest.
Title VI of the Civil Rights Act of 1964, which prohibits discrimination by recipients of federal education spending and other programs, does not currently allow private litigants to sue demanding punitive (as distinct from compensatory) damages, nor do the courts entertain private suits complaining of “disparate impact” under it. Some trial lawyers and advocates of expansive discrimination law have long wanted to change that, and now Hans Bader of the Competitive Enterprise Institute is warning that there are efforts afoot to slip an expansion into law by attaching it to some “must-pass” piece of legislation. An effort by Democratic senators to attach it to the Defense Authorization Act appears to have fallen short, but it may be back as a rider on other bills, with serious courtroom consequences, Bader warns, for schools and colleges and also for doctors and hospitals.
- Fearful of adverse Supreme Court ruling, Department of Justice said to have exercised pressure on city of St. Paul to buckle in housing-disparate-impact case [Kevin Funnell]
- Justice Janice Rogers Brown: we can dream, can’t we? [Weigel] The Brown/Sentelle opinion everyone’s talking about, questioning rational basis review of economic regulation [Hettinga v. U.S., milk regulations; Fisher, Kerr]
- Claim: “The Bachelor” TV franchise discriminates on basis of race [Jon Hyman]
- Chicago sold off municipal parking garages. Good. It also promised to disallow proposals for private parking nearby. Not good [Urbanophile]
- Bad day in court for Zimmerman prosecution [Tom Maguire, more, Merritt]
- “I want some systematic contacts wherever your long arm can reach” — hot-‘n’-heavy CivPro music video satire [ConcurOp, language]
- Federal judge dismisses charge against man who advocated jury nullification outside courthouse [Lynch, Sullum, earlier]
Following extensive rumblings of an impending crackdown, the Equal Employment Opportunity Commission has sued Kaplan, the private education company, over its alleged policy of considering applicants’ credit records in making hiring decisions [Baltimore Sun, George Lenard; earlier here and here]
More from Ted Frank: “Somebody should tell the Transportation Security Administration, which also performs credit checks: they reject job applicants if they have more than $5000 in overdue debt.” And from the same link:
But what’s also driving the push to check credit is fear of lawsuits, [employment attorney Manesh] Rath said, especially in businesses where employees have access to customers’ money or possessions, including the banking, property management, hotel and home health care industries.
…”The employer will have a tough time defending itself,” Rath said, “if it didn’t take the simple measure of doing a background check.”
At City Journal, Heather Mac Donald has an important article on the federal courts’ willingness to second-guess in great detail the hiring practices of the New York City fire department, in search of more hiring of black applicants. It is worth noting that fire departments are pressed to rely (and even perhaps over-rely) on written tests in assessing applicants’ suitability in part because traditional testing of physical skills such as the ability to wield a charged hose, get up a ladder quickly, and carry body-size weights has been extensively and successfully sued against by lawyers representing female applicants.
Notwithstanding Barack Obama’s claim of a spending freeze on discretionary spending, Roger Clegg finds that the Obama Justice Department’s proposed budget calls for 22 new attorneys to bring “disparate-impact” cases—presumably the ones too weak to find a trial lawyer willing to take it on. And we can be quite confident that there won’t be any disparate impact against Federalist Society members when they do that hiring, right?