Posts Tagged ‘law enforcement for profit’

Elizabeth Warren on white-collar prosecution — and what to do instead

My new piece at Cato, citing Carissa Byrne Hessick and Benjamin Levin at Slate, discusses Sen. Elizabeth Warren’s proposal to lower the standard for criminal culpability in many white-collar prosecutions to simple negligence. It begins:

Presidential candidate and Sen. Elizabeth Warren (D-Massachusetts) wants to see more business people behind bars, and she’s not fussy about how to make that happen. In a Washington Post op-ed last week she unveiled a new Corporate Executive Accountability Act, which in her words would expand “criminal liability to any corporate executive who negligently oversees a giant company causing severe harm to U.S. families.” She says she wants top executives to know that they can be (again in her own words) “hauled out in handcuffs for failing to reasonably oversee the companies they run.”

And ends:

The civil courts already hear many thousands of cases seeking damages over claims that serious harm arose from industry conduct that falls short of being reckless or deliberately wrongful. Not infrequently – as with claims over supposed “sudden acceleration” in cars, cancer from Roundup, and autoimmune disease from silicone breast implants – large sums get paid even when science finds no basis for concluding the products caused the harms alleged, such is our legal system’s tendency to tilt against business defendants as unsympathetic. Under the Warren standard, complaints that driverless cars have gotten into avoidable accidents or vaccines have caused side effects – maybe even that cheeseburgers, supersize sodas, and margaritas have worsened the harms of obesity – will put business people at risk for long prison terms. To her backers, will this count as a bug? Or a feature?

Aside from the propriety of criminalizing simple negligence, the issue is not so much that individuals as such are the wrong target for white-collar prosecution — as Stephen Bainbridge has argued, holding them personally culpable will often make more sense than prosecuting the corporate entity — as that notions of collective guilt must not be used to impute criminal culpability to others within an organization not proved to have committed wrong acts or acted with wrong mind. While the Warren proposal would march off in the wrong direction, in the Cato Handbook for Policymakers two years ago,
I contributed a chapter on white-collar prosecution with the following recommendations:

Congress and state lawmakers (and where appropriate, the president and executive branch law enforcement officials) should

  • review existing law with an eye toward rolling back overcriminalization and replacing criminal penalties with civil sanctions where feasible;
  • enact reforms such as the model Criminal Intent Protection Act to bolster recognition of mens rea (punishment should ordinarily require a guilty state of mind, not inadvertent noncompliance) as well as the related mistake of law defense in criminal law;
  • codify the common law rule of lenity (ambiguity in law should be resolved against finding guilt), as Texas joined other states in doing in 2015;
  • devise safe harbor provisions that enable economic actors to avoid criminal liability by behaving reasonably and in intended compliance with the law;
  • limit agency discretion to create new crimes without an act of the legislature;
  • enact guidelines to strengthen judicial oversight of deferred prosecution agreements and nonprosecution agreements (explicit court approval, not the unilateral say-so of government prosecutors, should be required for appointment of corporate monitors or the extension of time under supervision);
  • enact asset forfeiture reforms such as Rep. Jim Sensenbrenner’s (R-WI) Due Process Act, including requiring that conviction be a prerequisite for forfeiture; review and, where appropriate, reduce or coordinate per offense fines and sanctions to avoid levying penalties disproportionate to the gravity of misconduct;
  • prohibit, as a proposed New Mexico law would do, the allocation of settlement moneys (cy pres) to charities, nonprofits, or advocacy groups not themselves injured;
  • assign penalties, forfeitures, and settlement proceeds to the public treasury or, where appropriate in certain cases, to private parties who can show specific individual injury from the offense (penalties should not fund particular government agencies in ways that incentivize zealous enforcement or insulate the agencies from appropriations oversight);
  • prohibit the payment of public lawyers and forensics experts on contingency, that is, in ways dependent on case outcome or the magnitude of penalties (this principle should apply alike to career prosecutors, other staff public lawyers, experts, and outside law firms); existing contingency arrangements should be terminated; and
  • impose transparent principles of selection and payment on outside contracting for legal services.

DoJ intervenes against Clean Water Act frequent filer

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]

Chicago impound confound

“It can’t be overstated what a procedural and logistical nightmare it is to get a car impounded in the city of Chicago.” [C.J. Ciaramella, Reason] Related, Atlanta area: “Lawsuit claims Doraville officials writing tickets for profit, not enforcement” [WXIA, Kaitlyn Schallhorn, Fox News] And Pagedale, Mo., a small St. Louis suburb, has agreed “to stop bankrolling itself by fining its residents into the poorhouse.” [Scott Shackford, Reason]

Crime and punishment roundup

  • “Lawmakers must act now to close New York’s double jeopardy loophole,” claims New York Attorney General Barbara Underwood. Its what? [Kenneth Lovett/New York Daily News, Jacob Sullum/Reason, Jed Shugerman/Slate (defending closing of “loophole”), Jonathan Blanks on Twitter, earlier]
  • Speaking of pardon powers, Debra Saunders quotes me in column on Presidential pardons, Martha Stewart, Rod Blagojevich, Marc Rich, etc. [Las Vegas Review Journal/syndicated]
  • “California Town Hired Private Law Firm to Sue Citizens, Then Tried to Conceal Massive Costs” [Scott Shackford, earlier on Indio, Coachella, etc.] Bill passed by California assembly “would put an end to a practice in which several cities have been contracting with private prosecutors to handle nuisance abatement cases, then billing the impacted citizens thousands in lawyers’ fees.” [same]
  • “In light of the [Aaron] Persky recall, here are some studies on the impact of elections on judicial behavior. The story is consistent: elections make judges harsher, and there may be other costs as well (like lower-skilled people becoming judges).” [John Pfaff Twitter thread, earlier here, here, and here]
  • “CBP Sued For Seizing $41,000 From Airline Passenger, Then Refusing To Give It Back Unless She Promised Not To Sue” [Tim Cushing, TechDirt]
  • Even when suspects are in fact guilty, lies told to justify searches “corrupt the law in order to enforce it. That’s not how policing is supposed to work.” [Jonathan Blanks on Joseph Goldstein, New York Times investigation of police perjury (“testilying”)]

Google and Facebook turn away bail bond ads

Two things that can both be true:

1) we should find a better system than cash bail;

2) in the mean time bail bond services provide a needed service for some families.

Or as I put it in my new National Review piece:

This week Google and Facebook announced that they would stop accepting ads for bail-bond services. It’s the perfect moral gesture for our times: It makes a grand statement, keeps pressure groups happy, reminds us that the tech giants have weight to throw around, and leaves its intended beneficiaries no better and perhaps imperceptibly worse off.

I go on to discuss stigmatization as a substitute for policy, which sorts of practices if adopted would probably serve as a substitute for cash bail, and the widely held notion that mass incarceration in the contemporary U.S. arose from a plot to expand business revenue. The piece concludes:

If one is going to be suspicious of mercenary motives in the justice system, I recommend starting with the providers among whom defendants’ families do not get to pick and choose in their hour of need in a relatively competitive market. That would include probation providers and jail phone-call providers — and, yes, some firms involved with private prisons.

Of course, those companies aren’t big advertisers, since the only customer they need to convince is the law-enforcement agency. So Google and Facebook are spared the need to worry about what posture to strike toward them.

Whole thing here. For a different view, here’s Google’s Senior Counsel on Civil and Human Rights writing together with the chairman of Freedom Partners Chamber of Commerce and general counsel for Koch Industries. [Malika Saada Saar and Mark Holden]

Law enforcement for profit roundup

  • “When you find yourself threatening to find more reasons to put even more citizens in jail in order to protect your revenue stream, it’s maybe time to take a step back and think about what you’re doing.” [Scott Shackford on Alabama forfeiture debate]
  • How IRS spent $20 million on debt collection program that generated $6.7 million in payments [Howard Gleckman, Tax Policy Center]
  • “Federal Judge Strikes Down New York City’s Dragnet That Seized Thousands Of Cars Without Warrants” [Nick Sibilla, IJ/Forbes]
  • Prison phone calls and other captive markets: “Stop squeezing prisoners’ families for cash” [Megan McArdle]
  • “The high price of being wrongly accused in Alabama’s ‘monetized’ criminal justice system” [Ashley Remkus, Al.com]
  • “Cop Who Called Asset Forfeiture ‘A Tax-Liberating Goldmine’ Sued for Illegal Traffic Stop and Seizure” [C.J. Ciaramella; Kane County, Ill.]

Law enforcement for profit roundup

  • In Mississippi, a “mother has been forbidden from any contact with her newborn for 14 of the 18 months the child has been alive” because of unpaid misdemeanor fines [Radley Balko, WLBT/MSNewsNow; judge has now resigned, but similar practices reported to be common] Is Biloxi going to do better? [ABA Journal]
  • “They … didn’t give it back”: outrageous tales of asset forfeiture from Alabama [Connor Sheets, AL.com]
  • Efforts afoot in Lansing to write down nearly $595 million in unpaid Michigan drivers’ fees [Chad Livengood, Crain’s Detroit Business] Warren, Mich., residents invited to turn in neighbors on suspicion, win bounties from forfeiture funds [Scott Shackford]
  • Ethical red flags: maker of heroin-cessation compound “marketing directly to drug court judges and other officials.” [Jake Harper, NPR]
  • In Craighead County, Arkansas, private probation firms sue judges who cut them out of the process [Andrew Cohen, The Marshall Project]
  • From Ohio “mayor’s courts” to asset forfeiture, prosecution for profit imperils due process [Jacob Sullum]

Environment roundup

  • Clean Water Act’s citizen-suit procedure can “be a huge money maker” for private groups: “Policing for profit in private environmental enforcement” [Jonathan Wood]
  • “Chicago Alderman Tells Property Owners to ‘Come Back to Me on Your Knees’ or Face Zoning Changes” [Eric Boehm, Reason]
  • Wetlands: “Farmer faces $2.8 million fine after plowing field” [Damon Arthur, Redding Record-Searchlight]
  • Urban bike lanes are green religious monuments, writes Arnold Kling, a biker himself;
  • Climate change shareholder disclosure: “Class action lawyers have become very clever at developing these cases for profit.” [Nina Chestney, Reuters]
  • “Why full compensation for property owners might lead to more unlawful takings” [Ilya Somin]

Public employment roundup

  • From 2014, missed earlier, and relevant to bounty-hunting and public sector incentive systems: George Leef reviews Nicholas Parrillo’s Against the Profit Motive: The Salary Revolution in American Government [Regulation]
  • “Los Angeles’ Pension Problem Is Sinking The City” [Scott Beyer]
  • Firefighter unions throw their weight around in Arizona local politics [Jessica Boehm, Arizona Republic]
  • Public employee pay studies: “In this instance, I’d argue that casual intuition has a higher signal-to-noise ratio than does formal empiricism.” [Arnold Kling]
  • Public sector employees aren’t sicker than comparable private employees but do take more illness/injury days off [Steven Malanga, City Journal]
  • Mayor concedes there’s no “rational justification” for California city’s six-figure pensions, but that’s what the union got in its contract [Eric Boehm, Reason]