- Senator Elizabeth Warren and her Accountable Capitalism Act represent an attempt to revive a theory of the corporation that fell out of favor long ago, that corporate status is a grant of favor in exchange for which the state may demand services or cooperation [Abdurrahman Kayiklik, Columbia Law School Blue Sky Blog; earlier with links to Warren on corporate governance and other topics]
- Bill in Congress would enlist banks in watching gun sales [Robert VerBruggen/NRO; Noah Shepardson, Reason] NRA, in litigation, contends it has evidence New York state officials negotiated with U.K.’s Lloyds to curtail insurance availability in a way specifically targeted at the association [Stephen Gutowski thread]
- “The Misguided Quest to Limit Choice in Consumer Credit” [Diego Zuluaga]
- “The CFPB and Payday Lending Regulations” [Peter Van Doren last February; earlier on payday lending; Federalist Society Regulatory Transparency Project video on regulation-through-investigation of payday lenders with Jamie Fulmer, Chris Peterson, and Brian Knight]
- Federalist Society podcast on Community Reinvestment Act with Aaron Klein and Diego Zuluaga;
- Learned a new word, lutulent, which means “muddy, turbid, thick” and is more or less the opposite of luculent (“lucid, clear, transparent”) [Keith Paul Bishop on unclarities in new California law requiring gender quotas on boards (“a lutulent mess”); earlier here, etc.]
“Presidential candidate Elizabeth Warren wants to break up big tech firms and impose new regulation on firms with high revenues. Walter Olson discusses what that might look like in practice.” I join Caleb Brown for a Cato podcast on themes outlined in this space last week. Related: Geoffrey Manne and Alec Stapp last March on Warren’s plans for tech and antitrust (“To Warren, our most dynamic and innovative companies constitute a problem that needs solving.”)
Bonus: earlier posts on Warren and her economic plans including white-collar prosecution, exit tax, regulation of private equity, and corporate governance first, second, third posts as well as political spending and labor co-determination.
T-Mobile and Sprint, the #3 and #4 wireless carriers, would like to combine so as to more effectively compete with Verizon and AT&T, the two dominant players in the cellular service market. Various states went to court against the merger, arguing (dubiously) that the combination would harm consumers and drive up prices. And now, via Reuters, this:
Also on Monday, Nevada said it would withdraw from the lawsuit in exchange for early deployment of the next generation of wireless in the state, creation of 450 jobs for six years and a $30 million donation to be distributed by Nevada Attorney General Aaron Ford and aimed at helping women and minorities, Ford’s office said.
How blatant can you get? The best touch, of course, is the $30 million fund with which to ingratiate lucky beneficiaries around the state. (“The recipients of these grants for the use of the charitable contribution will be at the discretion of Nevada’s attorney general” — that is, the same AG Ford who filed and settled the state’s case, and from whose press release is excerpted that sentence.) It looks a lot like the familiar cozytown set-up in many cities in which permission to build a large development or win a public contract just might call for a hefty donation to a local nonprofit with ties to the mayor and council.
Notwithstanding the best efforts from some quarters to develop per se rules in hopes of generating clear and predictable legal outcomes, antitrust law remains a world of subjective interpretation in which government office-holders are left with great discretion regarding how and against whom to wield enforcement power. Whether you want to call it logrolling or use a less flattering term like “extortion,” the temptation is to trade off antitrust leniency for some of the other sorts of favors business might be able to render government actors.
All of which brings us to presidential candidate Elizabeth Warren’s and other candidates’ new proposals for antitrust, which a CNBC headline accurately reports (as to Warren’s) “would dramatically enhance government control over the biggest U.S. companies.” In particular, the proposals would invite the government far more deeply into oversight of business practices, including refusal to share “essential” facilities with competitors, pricing goods below the cost of production, and much more, as well as mergers and acquisitions.
It’s hard to know whether Sen. Warren sees all this new arbitrary discretion as a bug, or a feature, in her enormous plan. Either way, an accumulation of power that tempting will sooner or later attract appointees seeking either a political whip hand over the U.S. corporate sector, a source of payouts like that in Nevada, or both. [cross-posted from Cato at Liberty]
- In the greater Oklahoma City area next Tuesday, Nov. 12? Come out to my lunchtime law school talk at the U. of O. on employment law, sponsored by the school’s Federalist Society chapter [details]
- A Sixth Circuit opinion thus begins: “This court once observed, ‘[w]hen a party comes to us with nine grounds for reversing the district court, that usually means there are none.’ Steven Hank comes to us with twenty-seven.” [Hank v. Great Lakes Constr. Co., Court Listener]
- Elizabeth Warren tale of “two cents” wealth tax Hallowe’en costume doesn’t quite add up [my Cato post; another point]
- Speaking of Warren, when asked what would happen to displaced health insurance workers once private insurance is done away with — not, to be sure, the strongest objection to her plan, but still one worth having an answer for — saying they can go work for auto or life insurers makes about as much sense as saying displaced workers from dance studios can go work for recording or graphic design studios [The Hill]
- No good deed: Brad Pitt, others on charitable foundation can be sued over alleged flaws in New Orleans homes [AP/WDSU]
- “Coincidentally or not, current and former members of the Baltimore Orioles, which the Angelos family owns, were dispatched to the [Maryland] State House for a good will visit while the [Angelos asbestos] bill was under consideration.” [Josh Kurtz, Maryland Matters]
- Supreme Court poised to strike down structure of Consumer Financial Protection Bureau (CFPB) as unconstitutional [Ilya Shapiro, National Review]
- No love lost between Elizabeth Warren’s, Barack Obama’s teams when consumer finance regulation was on the table [Alex Thompson, Politico]
- Cato Daily Podcasts on two topics with Diego Zuluaga and Caleb Brown: Congress is considering a ban on cashless stores, and Bernie Sanders wants to create a public credit scoring system;
- And speaking of the Vermont senator: “The Economic Consequences of Sen. Sanders’ Stock Confiscation Plan” [Ryan Bourne, Cato]
- State Street hearing before Boston federal judge lays bare politics and accounting issues of one large securities class action settlement [Daniel Fisher/Legal Newsline and more, Law360 also via Fisher]
- SEC rules on “accredited investors” are an attempt “to protect us from ourselves. Yet there are no such rules for betting in Las Vegas.” [David Henderson]
- Democratic contenders’ platforms on employment issues: Sanders still gets out furthest to left but Warren, Buttigieg, and O’Rourke giving him some serious competition [Alexia Fernández Campbell, Vox]
- Occupational licensure: more states embrace reform [Eric Boehm] Bright spots include Colorado (Gov. Jared Polis vetoes expansion) and Pennsylvania (recognition of out-of-state licenses) [Alex Muresianu and more] Connecticut catching up on nail salons, in a bad way [Scott Shackford]
- “Trump’s Labor Board Is Undoing Everything Obama’s Did” [Robert VerBruggen, NRO] A theme: to protect employee freedom of choice [Glenn Taubman and Raymond J. LaJeunesse, Federalist Society]
- Mistaken classification of a worker as an independent contractor, whatever its other unpleasant legal implications for an employer, is not an NLRA violation when not intended to interfere with rights under the Act [Todd Lebowitz; Washington Legal Foundation; In re Velox Express]
- Modern employers need to watch out for their HR departments, says Jordan Peterson [interviewed by Tyler Cowen, via David Henderson]
- Despite effects of federal pre-emption, state constitutions afford a possible source of rights claims for workers [Aubrey Sparks (Alaska, Florida constitutions) and Jonathan Harkavy (North Carolina), On Labor last year]
Not scary or intrusive at all: presidential candidate Sen. Bernie Sanders (I-Vt.) has called for enacting a “national wealth registry,” the better to enforce future schemes of taxation, confiscation, and restraints on expatriation [Brittany De Lea, Fox Business; related, Chris Edwards, Cato; Emily Ekins on opinion poll] And the steep “exit tax” that Sen. Elizabeth Warren (D-Mass.) and Sanders propose to slap on wealthy individuals who depart the U.S., of up to 40 and 60 percent respectively, did not sound better in the original German [Ira Stoll; earlier]
P.S.: On the constitutionality angle, note that the Competitive Enterprise Institute has just filed a lawsuit on behalf of a couple challenging the constitutionality of a provision of the 2017 tax reform law known as the Mandatory Repatriation Tax. Counsel Andrew Grossman, quoted in the CEI press release, stated:
The Mandatory Repatriation Tax is unconstitutional for the same reason that a wealth tax would be. The Constitution does not permit Congress to simply declare money that it wants to tax to be income and then demand its cut. And the courts have never permitted retroactive taxation reaching back anywhere near the 30 years, as the Mandatory Repatriation Tax does. The details of the tax may be complicated, but the constitutional violations are clear.
- As one who wrote at length about the silicone-implant litigation at the time — founded as it was on junk science theories hyped to panic potential plaintiffs — I agree that Elizabeth Warren has nothing to apologize for about her bankruptcy work for Dow Corning. Move on to better criticisms, please [Darren McKinney, WSJ] Related: Federalist Society teleforum on mass tort bankruptcies with Steven Todd Brown, Ralph Brubaker, and Dan Prieto;
- “What should be the duty of public retailers whose customers have bizarre or offensive clothing, appearance, demeanor or behavior but do not actually engage in or threaten violence on the retailers’ premises? To avoid risk, should the retailers exclude them from their stores?” [Eugene Volokh quoting federal court opinion in Budreau v. Shaw’s Supermarkets, Inc. (D. Maine)]
- New York residents should brace for higher taxes as trial-lawyer-backed bill in Albany exposes public authorities to more road claims [John Whittaker, Jamestown Post-Journal]
- “Kansas Supreme Court Throws Out Personal Injury Damages Cap” [Associated Press]
- Whose proposal for joint trial counts as triggering removal of mass action under the Class Action Fairness Act? The court’s? Choice between federal and state courts implicates fundamental questions of fairness [Eric Alexander, Drug and Device Law on Supreme Court certiorari petition in Pfizer v. Adamyan]
- Glyphosate, talc verdicts suggest juries may be paying more attention to purported smoking-gun documents than to scientific evidence on causation [Daniel D. Fisher, Northern California Record; Corbin Barthold, WLF] “Inconsistent Gatekeeping Undercuts the Continuing Promise of Daubert” [Joe G. Hollingsworth and Mark A. Miller, WLF]
- Neat trick: banks can get Community Reinvestment Act credit for lending in “low-income census tracts” even when that means extending $800K mortgages to gentrifiers [Diego Zuluaga, Politico, related policy analysis and Cato podcast]
- Sen. Elizabeth Warren has a plan to regulate private equity. It’s not good [Steven Bainbridge] When you’ve lost veteran liberal columnist Steven Pearlstein… [Washington Post]
- Speaking of terms with ugly histories, maybe it’s time for Sens. Warren and Sanders to retire the metaphor of the financial sector as vampires or “vultures” engaged in “sucking” or “bleeding” [Ira Stoll, related]
- Volume of securities litigation is on sharp upswing, policy remedies needed [Kevin LaCroix/D&O Diary and more, Chubb “Rising Tide” report] Rising in Australia too [Nicola Middlemiss, Insurance Business Australia]
- Unconstitutionality of CFPB structure hasn’t gone away and neither has the need for the Supreme Court to tackle the issue [Ilya Shapiro on Cato certiorari amicus brief in Seila Law LLC v. CFPB] Appointment process for Puerto Rico financial oversight board under PROMESA law is of doubtful constitutionality [Shapiro on Cato amicus brief in Financial Oversight & Management Board for Puerto Rico v. Aurelius Investment, LLC]
- In an age of professional consultants, why does the law continue to require corporate governance to be delivered by way of individual board members? Firms specializing in board services could offer attractive alternative [Todd Henderson, Charles Elson, Stephen Bainbridge, Federalist Society Forum]
An amusing correction in New York magazine’s profile of Sen. Elizabeth Warren: “predators” to “creditors.” (The misheard quote is from a law professor who studied with Warren, not from Warren herself.) My new Cato post explains.