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Can Elon Musk silence independent media?
There has been a lot of discussion on MSNBC and other news sources about dissension between Donald Trump and Elon Musk. The suggestion is that the two may soon part ways. That analysis overlooks the long-term potential of Musk’s billions to address Trump goals, such as silencing independent media. Musk can use his billions to compromise independent media as he has already compromised X (formerly Twitter). Many have complained that X (Twitter) no longer offers a level playing field for those who oppose Musk and MAGA views.
The playbook on the harm Musk can do to independent media was written in Putin’s Russia. Russian oligarchs have played a significant role in helping Vladimir Putin consolidate control over the media landscape in Russia. This process, which unfolded primarily in the early 2000s, involved several oligarchs either directly taking control of key media outlets or using their influence to align the media with the Kremlin's interests.
During the 1990s, some media outlets enjoyed relative independence. However, as Putin rose to power, he prioritized bringing influential media under state or loyalist control. Many Russian oligarchs acquired and took over control of media outlets and made them compliant with government goals. For example:
Oligarch and politician Roman Abramovich, who is the former owner of Chelsea, a Premier League football club in London, England, and the primary owner of the private investment company Millhouse, was linked to the acquisition of significant media assets that consolidated media control under Kremlin-aligned ownership.
Vladimir Potanin owned stakes in key media companies, including NTV and Izvestia, which put media assets into Kremlin-friendly entities. He reputedly acquired his wealth through the controversial loans-for-shares program in Russia in the early to mid-1990s. As of December 2024, he is the wealthiest man in Russia and the 59th richest person in the world, with an estimated net worth of US$31.2 billion.
Alisher Usmanov acquired the Kommersant Publishing House, one of Russia's most respected media brands, ensuring editorial policies aligned with Kremlin narratives. Usmanov reputedly made his wealth after the collapse of the Soviet Union, through metal and mining operations, and investments. He is a shareholder of 49% of Metalloinvest, a Russian industrial conglomerate.
Yuri Kovalchuk, a close ally of Putin,is a major shareholder in National Media Group, which controls several television stations, newspapers, and online platforms. His influence ensures that media outlets like Channel One and REN TV support Kremlin policies.
Oleg Deripaska has controlled various regional media outlets and participated in broader Kremlin-driven media consolidation efforts. Deripaska began his career as a metals trader after the breakup of the Soviet Union. He used accumulated funds from trading to acquire stakes in the Sayanogorsk aluminum smelter from a consortium of businessmen who privatized it in the aftermath of the collapse of the Soviet Union.Deripaska is the founder of Basic Element, one of Russia's largest industrial groups, and Volnoe Delo, Russia's largest charitable foundation. He was the president of En+ Group, a Russian energy company, and headed United Company Rusal, the second-largest aluminum company in the world.
The Russian media outlets that were affected by oligarch influence were once relatively independent but now are not. NTV was once Russia's leading independent television network, but lost independence after being taken over by Gazprom Media (a state-controlled entity) after significant pressure on its founder, Vladimir Gusinsky. Kommersant was a prominent independent business newspaper, but lost its independence after being acquired by Alisher Usmanov in 2006. Izvestia is a historic newspaper brought under Kremlin-aligned ownership during the early 2000s. REN TV and Channel One became part of the National Media Group, heavily influenced by Yuri Kovalchuk and other Kremlin associates. Echo of Moscow was a popular liberal radio station, gradually brought under Gazprom Media's control, though it retained some editorial independence until it was shut down in 2022.
In summary, by the mid-2000s, most major media outlets in Russia were either directly state-controlled or owned by Kremlin-friendly oligarchs. Independent journalists and critical voices were marginalized, and the Kremlin established a near-monopoly on television news, which remains the primary source of information for most Russians. The captured media landscape has been used to promote state propaganda, suppress dissent, and justify government policies, including military interventions.
Could Elon Musk, and perhaps other billionaires, follow the Russian game plan in the U.S.? Are media outlets like MSNBC and the Washington Post at risk? The answer, I think, is yes, they are at risk. And buyouts of media outlets by Elon Musk or other U.S, oligarchs could be accomplished without significant regulatory pushback by Trump’s U.S. Department of Justice or FCC.
Can the risks posed by U.S. oligarchs to independent media be successfully opposed by a combination of public concern and legal actions? I hope so.
Don Resnikoff ©
There has been a lot of discussion on MSNBC and other news sources about dissension between Donald Trump and Elon Musk. The suggestion is that the two may soon part ways. That analysis overlooks the long-term potential of Musk’s billions to address Trump goals, such as silencing independent media. Musk can use his billions to compromise independent media as he has already compromised X (formerly Twitter). Many have complained that X (Twitter) no longer offers a level playing field for those who oppose Musk and MAGA views.
The playbook on the harm Musk can do to independent media was written in Putin’s Russia. Russian oligarchs have played a significant role in helping Vladimir Putin consolidate control over the media landscape in Russia. This process, which unfolded primarily in the early 2000s, involved several oligarchs either directly taking control of key media outlets or using their influence to align the media with the Kremlin's interests.
During the 1990s, some media outlets enjoyed relative independence. However, as Putin rose to power, he prioritized bringing influential media under state or loyalist control. Many Russian oligarchs acquired and took over control of media outlets and made them compliant with government goals. For example:
Oligarch and politician Roman Abramovich, who is the former owner of Chelsea, a Premier League football club in London, England, and the primary owner of the private investment company Millhouse, was linked to the acquisition of significant media assets that consolidated media control under Kremlin-aligned ownership.
Vladimir Potanin owned stakes in key media companies, including NTV and Izvestia, which put media assets into Kremlin-friendly entities. He reputedly acquired his wealth through the controversial loans-for-shares program in Russia in the early to mid-1990s. As of December 2024, he is the wealthiest man in Russia and the 59th richest person in the world, with an estimated net worth of US$31.2 billion.
Alisher Usmanov acquired the Kommersant Publishing House, one of Russia's most respected media brands, ensuring editorial policies aligned with Kremlin narratives. Usmanov reputedly made his wealth after the collapse of the Soviet Union, through metal and mining operations, and investments. He is a shareholder of 49% of Metalloinvest, a Russian industrial conglomerate.
Yuri Kovalchuk, a close ally of Putin,is a major shareholder in National Media Group, which controls several television stations, newspapers, and online platforms. His influence ensures that media outlets like Channel One and REN TV support Kremlin policies.
Oleg Deripaska has controlled various regional media outlets and participated in broader Kremlin-driven media consolidation efforts. Deripaska began his career as a metals trader after the breakup of the Soviet Union. He used accumulated funds from trading to acquire stakes in the Sayanogorsk aluminum smelter from a consortium of businessmen who privatized it in the aftermath of the collapse of the Soviet Union.Deripaska is the founder of Basic Element, one of Russia's largest industrial groups, and Volnoe Delo, Russia's largest charitable foundation. He was the president of En+ Group, a Russian energy company, and headed United Company Rusal, the second-largest aluminum company in the world.
The Russian media outlets that were affected by oligarch influence were once relatively independent but now are not. NTV was once Russia's leading independent television network, but lost independence after being taken over by Gazprom Media (a state-controlled entity) after significant pressure on its founder, Vladimir Gusinsky. Kommersant was a prominent independent business newspaper, but lost its independence after being acquired by Alisher Usmanov in 2006. Izvestia is a historic newspaper brought under Kremlin-aligned ownership during the early 2000s. REN TV and Channel One became part of the National Media Group, heavily influenced by Yuri Kovalchuk and other Kremlin associates. Echo of Moscow was a popular liberal radio station, gradually brought under Gazprom Media's control, though it retained some editorial independence until it was shut down in 2022.
In summary, by the mid-2000s, most major media outlets in Russia were either directly state-controlled or owned by Kremlin-friendly oligarchs. Independent journalists and critical voices were marginalized, and the Kremlin established a near-monopoly on television news, which remains the primary source of information for most Russians. The captured media landscape has been used to promote state propaganda, suppress dissent, and justify government policies, including military interventions.
Could Elon Musk, and perhaps other billionaires, follow the Russian game plan in the U.S.? Are media outlets like MSNBC and the Washington Post at risk? The answer, I think, is yes, they are at risk. And buyouts of media outlets by Elon Musk or other U.S, oligarchs could be accomplished without significant regulatory pushback by Trump’s U.S. Department of Justice or FCC.
Can the risks posed by U.S. oligarchs to independent media be successfully opposed by a combination of public concern and legal actions? I hope so.
Don Resnikoff ©
Donald Trump complicates the problem of curbing vexatious litigation
The courts have long confronted the problems caused by vexatious litigation – that is, litigation intended to harm defendants by imposing litigation costs and inconvenience instead of achieving victory on the merits. But many people see those problems as being compounded by litigation brought by a politically powerful Donald Trump.
In this writing, I begin by describing Trump’s recent litigation, and the prospects that he will bring similar litigation in the future that could chill dissent. I then move to discussing the array of vexatious and weakly grounded litigation that already confronts the courts, and that may be encouraged by the example of Donald Trump’s broad-ranging litigation.
I next discuss the remedies for vexatious and weakly grounded litigation that are available to the courts and lawyer regulatory groups – particularly Bar associations. One possible remedy is for the courts to dismiss weak cases at an early stage, a remedy that courts have aggressively used in the context of antitrust litigation. Finally, I discuss some of the case law relevant to the triage of weak antitrust cases and consider the applicability of these cases to litigation other than antitrust.
Donald Trump has a history of filing lawsuits against media organizations, including CNN, The New York Times, and others, often alleging defamation or bias. Critics argue that these lawsuits serve as a strategic tool to suppress unfavorable media coverage, rather than to resolve legitimate disputes. In some instances, courts have dismissed cases filed by Trump or his legal team for failing to meet legal standards.
In December 2024, ABC News settled a defamation lawsuit filed by Donald Trump, agreeing to pay $15 million to his presidential library and an additional $1 million to cover his legal fees. The lawsuit stemmed from statements made by ABC anchor George Stephanopoulos, who erroneously claimed that Trump had been found liable for rape in a civil case involving writer E. Jean Carroll. In reality, the jury had found Trump liable for sexual abuse, not rape.
But many legal experts think that the distinction between sexual abuse and rape is close enough that ABC could have won at trial. Politico explains that ABC’s decision to settle the case for an eight-figure payment — plus an apology — baffled and concerned some media lawyers because the network seemed to have strong legal arguments. Before the Stephanopoulos presentation, the judge in Carroll’s case ruled that Carroll’s own continued claims that Trump raped her were “substantially true.” ABC could have pointed to that ruling to show that Stephanopoulos’ statements did not meet the high legal standard that a defamatory statement must be both false and made recklessly, legal experts said. [https://www.politico.com/news/2024/12/17/media-lawyers-trump-lawsuits-fears-00194938]
Some experts worry that the ABC settlement may be just the first of a series of vexatious lawsuits brought by Trump against media outlets both big and small. Shortly after the ABC settlement, Trump sued the Des Moines Register and its former pollster J. Ann Seltzer for "brazen election interference" because of a poll published before the 2024 presidential election that showed Trump as likely to lose in Iowa. In fact, he won by a substantial margin in Iowa.
More Trump lawsuits like the one against ABC could have unfortunate effects. Media organizations large and small might avoid publishing investigative or critical stories out of fear of costly litigation. Smaller outlets, in particular, may struggle to defend against lawsuits, even if they have strong cases, because of financial and legal resource limitations.
Perhaps most importantly, the use by a powerful political figure of litigation strategies perceived as thinly based and vexatious can only complicate the burden on courts to control a broader array of vexatious litigation. In addition, lawyer groups such as bar associations will increasingly be challenged to consider the ethics of attorneys who bring cases that lack merit.
A District of Columbia case illustrates the burden on courts and lawyer groups. That is the relatively simple case of the dry-cleaning customer who sued for millions on the grounds that the dry cleaner lost his pants. Pearson v. Chung, 961 A.2d 1067 (D.C. 2008)], sometimes known as the "$54 million pants" case, is a 2007 civil case decided in the Superior Court of the District of Columbia. Roy Pearson, then an administrative law judge, sued his local dry cleaning establishment for $54 million in damages after the dry cleaners allegedly lost his pants.
The Pearson case went to trial on June 12, 2007. Pearson argued that the Chungs, the cleaning establishment owners, had failed to fulfill the "Same Day Service" and "Satisfaction Guaranteed" promises posted outside their business. Pearson lost the case and the subsequent appeal. The Chungs made a motion to recover their legal fees but withdrew it following the conclusion of a successful fundraising campaign.
The Pearson case drew broad attention as an example of vexatious and weak litigation and the need for law reform in the United States.
There is no lack of vexatious and thinly grounded cases. For example, an antitrust-related case with earmarks of vexatious litigation was recently filed against a broad array of defendants following a successful argument by one of the defendants before the FCC opposing a merger of companies in the telecommunications industry. The litigation complaint, brought by a principal named Kim who sought the merger, alleges that the successful FCC petitioners and co-conspirator defendants were motivated by anti-Korean racial animus, as opposed to simple anti-merger animus based on commercial interests and legal analysis. The defendant petitioners to the FCC represented two clients with an apparent commercial interest in opposing the merger, NewsGuild-CWA, the largest union of journalists in the country, and NABET-CWA, the National Association of Broadcast Employees and Technicians. The defendant FCC petitioners were successful in the sense that the merger did not go forward. The list of defendants sued by plaintiff Kim is a long one, including many beyond the petitioners. The defendant list includes the FCC, the FCC Chairwoman in her personal capacity, the FCC Bureau Chief in her personal capacity, DISH Network (a company that opposed the transaction), Allen Media Group (a company that is accused of participating), United Church of Christ Media Justice Ministry, Common Cause, The Goodfriend Legal Group, and attorney David Goodfriend (in his personal capacity).
Defendants argued, among other things, that petitioning the FCC in opposition to a merger is at the very heart of the First Amendment protection of speech, citing Eastern R.R. Presidents Conf. v. Noerr Motor-Freight, Inc., 365 U.S. 127, 137 (1961).
Just as it is not my role as a commenter to adjudicate whether Donald Trump’s actions against ABC or the Des Moines Register are well grounded, I leave to the courts the question of whether defendant FCC petitioners and other defendants in the Kim case were part of an illegal conspiracy as charged by the plaintiff, and were motivated by anti-Korean as opposed to anti-merger animus. But the case has strong earmarks of being vexatious and weakly grounded litigation that should be dismissed, and reviewed by appropriate lawyers groups for possible ethical impropriety. The earmarks of vexatious litigation include charges that seem overbroad and highly speculative on their face.
Focusing on a possible chilling effect of the Kim case in the context of FCC petitions, the case has the potential of chilling future petitions to the FCC that challenge mergers. More broadly, vexatious litigation could be an important tool for interest groups that wish to discourage petitions to the government that challenge mergers or other conduct that may violate antitrust laws. Such vexatious litigation could undermine important free speech goals. Even if future petitioners and related defendants succeed in getting vexatious lawsuits against them dismissed because they were appropriately exercising Noerr First Amendment rights, it is not at all clear that the relevant federal court rules would impose any sanction on the plaintiff for bringing a weak case. The unfortunate result is that future potential petitioners to the government on merger cases or other antitrust matters need to worry that even if they succeed in challenging a merger or other anticompetitive activity, they will later suffer the retribution of expensive vexatious litigation.
So, what should the courts and the organized Bar do to deal with vexatious and weakly grounded litigation? Where vexatious cases are brought in bad faith and plainly without merit the answer is relatively easy: sanctions should be imposed by the court, as by requiring the bad-faith plaintiff to pay the defendant’s litigation costs. The organized bar should consider whether plaintiff lawyers are guilty of ethical lapses.
Where the claims are weak but colorable the remedy for vexatious litigation is more difficult. One popular suggestion is that courts be more rigorous in reviewing the merits of cases at an early stage and triaging weak cases. Further discussion of that suggestion by the Bar and courts seems warranted. The discussion is challenging because the early triage remedy is a two-edged sword: too much rigor in the judicial screening of cases at an early stage may squelch cases that would show merit if allowed to go forward.
One possible remedy is for the courts to dismiss weak cases at an early stage, a remedy that courts have aggressively used in the context of antitrust litigation. The early triage of weak cases has frequently occurred in antitrust cases. Plaintiff attorneys specializing in antitrust litigation often complain about overly aggressive court triage in antitrust cases. (By way of full disclosure, I am an advocate of vigorous antitrust enforcement and tend to agree with those who complain about excessive court-imposed limitations on antitrust enforcement.)
An important antitrust case where the courts imposed early triage is Bell Atlantic Corp v Twombly, 550 US 544, where the Supreme Court made it clear that to survive dismissal and proceed to discovery, antitrust plaintiffs must plead a claim that is at least plausible on its face, as opposed to relying on conclusory statements suggesting an antitrust violation is merely possible).
The Court had earlier decided that to overcome summary judgment in the antitrust conspiracy context, plaintiffs must present evidence that “tends to exclude the possibility that the alleged conspirators acted independently” (Matsushita Elec Indus Co v Zenith Radio Corp, 475 US 574 [1986]). For example, a court may grant summary judgment for defendants in a conspiracy case where there is no direct or “smoking gun” evidence of a conspiracy, and the evidence suggests the alleged conspiracy would have been economically irrational (e.g., Anderson News, LLC v American Media, Inc, 899 F.3d 87 [2d Cir 2018]).
Both the Bell Atlantic and Matsushita case are based on broad principles that have been applied by courts to an array of cases, not just antitrust cases.
An article by Jonathan Sallett argues that court scrutiny of certain categories of antitrust cases puts too high a proof burden on plaintiffs, and squelches deserving litigation See https://www.americanbar.org/groups/antitrust_law/resources/magazine/2022-spring/antitrust-reform/?login . Sallett suggests that the courts have “made it too hard for antitrust enforcers to succeed in litigation by requiring antitrust enforcers to anticipate and bear the burden of addressing any potential defense just to proceed to full consideration of the merits.” Further, “In cases like Brooke Group, Trinko, and Amex the Supreme Court has transformed contestable factual propositions into legal doctrine that has unjustifiably ratcheted up plaintiffs' burden of proof. “ By way of brief background, Brooke Group set a rigorous standard for predatory pricing claims, requiring plaintiffs to prove both below-cost pricing and a dangerous probability of recouping the investment in below-cost prices; Trinko significantly limited the scope of antitrust claims based on refusal to deal and emphasized that the existence of regulatory oversight could diminish the need for antitrust intervention; Amex increased plaintiffs’ proof burdens with regard to antitrust issues in so-called two-sided markets. (The Amex case example of a two-sided market is that credit card businesses engage in a simultaneous transaction between cardholders on one side and retail merchants on the other.) The Amex court underscored the importance of considering both sides of the market in competitive analysis.
Some will disagree with Sallett and say that it is a good thing that limits are put on antitrust cases, and that the courts should engage in early triage of cases.
A further question for discussion is whether the sort of court limitations complained about by Sallett in the antitrust context are reasonable when applied to other categories of litigation that some may see as vexatious, such as D.C.’s $54 million pants case brought by Roy Pearson. As stated earlier, the discussion is challenging because the early triage remedy is a two-edged sword: too much rigor in judicial screening of cases at an early stage may squelch cases that would show merit if allowed to go forward.
Unfortunately, the recent cases brought by Donald Trump make the issue of vexatious and weak litigation more difficult for the courts and the organized bar. Vexatious and weak cases brought by a powerful political figure like Trump provide justification for plaintiffs like Pearson (pants) and Kim (FCC) in a way that tests the mettle of the courts and the organized Bar.
Don Resnikoff (c)
The courts have long confronted the problems caused by vexatious litigation – that is, litigation intended to harm defendants by imposing litigation costs and inconvenience instead of achieving victory on the merits. But many people see those problems as being compounded by litigation brought by a politically powerful Donald Trump.
In this writing, I begin by describing Trump’s recent litigation, and the prospects that he will bring similar litigation in the future that could chill dissent. I then move to discussing the array of vexatious and weakly grounded litigation that already confronts the courts, and that may be encouraged by the example of Donald Trump’s broad-ranging litigation.
I next discuss the remedies for vexatious and weakly grounded litigation that are available to the courts and lawyer regulatory groups – particularly Bar associations. One possible remedy is for the courts to dismiss weak cases at an early stage, a remedy that courts have aggressively used in the context of antitrust litigation. Finally, I discuss some of the case law relevant to the triage of weak antitrust cases and consider the applicability of these cases to litigation other than antitrust.
Donald Trump has a history of filing lawsuits against media organizations, including CNN, The New York Times, and others, often alleging defamation or bias. Critics argue that these lawsuits serve as a strategic tool to suppress unfavorable media coverage, rather than to resolve legitimate disputes. In some instances, courts have dismissed cases filed by Trump or his legal team for failing to meet legal standards.
In December 2024, ABC News settled a defamation lawsuit filed by Donald Trump, agreeing to pay $15 million to his presidential library and an additional $1 million to cover his legal fees. The lawsuit stemmed from statements made by ABC anchor George Stephanopoulos, who erroneously claimed that Trump had been found liable for rape in a civil case involving writer E. Jean Carroll. In reality, the jury had found Trump liable for sexual abuse, not rape.
But many legal experts think that the distinction between sexual abuse and rape is close enough that ABC could have won at trial. Politico explains that ABC’s decision to settle the case for an eight-figure payment — plus an apology — baffled and concerned some media lawyers because the network seemed to have strong legal arguments. Before the Stephanopoulos presentation, the judge in Carroll’s case ruled that Carroll’s own continued claims that Trump raped her were “substantially true.” ABC could have pointed to that ruling to show that Stephanopoulos’ statements did not meet the high legal standard that a defamatory statement must be both false and made recklessly, legal experts said. [https://www.politico.com/news/2024/12/17/media-lawyers-trump-lawsuits-fears-00194938]
Some experts worry that the ABC settlement may be just the first of a series of vexatious lawsuits brought by Trump against media outlets both big and small. Shortly after the ABC settlement, Trump sued the Des Moines Register and its former pollster J. Ann Seltzer for "brazen election interference" because of a poll published before the 2024 presidential election that showed Trump as likely to lose in Iowa. In fact, he won by a substantial margin in Iowa.
More Trump lawsuits like the one against ABC could have unfortunate effects. Media organizations large and small might avoid publishing investigative or critical stories out of fear of costly litigation. Smaller outlets, in particular, may struggle to defend against lawsuits, even if they have strong cases, because of financial and legal resource limitations.
Perhaps most importantly, the use by a powerful political figure of litigation strategies perceived as thinly based and vexatious can only complicate the burden on courts to control a broader array of vexatious litigation. In addition, lawyer groups such as bar associations will increasingly be challenged to consider the ethics of attorneys who bring cases that lack merit.
A District of Columbia case illustrates the burden on courts and lawyer groups. That is the relatively simple case of the dry-cleaning customer who sued for millions on the grounds that the dry cleaner lost his pants. Pearson v. Chung, 961 A.2d 1067 (D.C. 2008)], sometimes known as the "$54 million pants" case, is a 2007 civil case decided in the Superior Court of the District of Columbia. Roy Pearson, then an administrative law judge, sued his local dry cleaning establishment for $54 million in damages after the dry cleaners allegedly lost his pants.
The Pearson case went to trial on June 12, 2007. Pearson argued that the Chungs, the cleaning establishment owners, had failed to fulfill the "Same Day Service" and "Satisfaction Guaranteed" promises posted outside their business. Pearson lost the case and the subsequent appeal. The Chungs made a motion to recover their legal fees but withdrew it following the conclusion of a successful fundraising campaign.
The Pearson case drew broad attention as an example of vexatious and weak litigation and the need for law reform in the United States.
There is no lack of vexatious and thinly grounded cases. For example, an antitrust-related case with earmarks of vexatious litigation was recently filed against a broad array of defendants following a successful argument by one of the defendants before the FCC opposing a merger of companies in the telecommunications industry. The litigation complaint, brought by a principal named Kim who sought the merger, alleges that the successful FCC petitioners and co-conspirator defendants were motivated by anti-Korean racial animus, as opposed to simple anti-merger animus based on commercial interests and legal analysis. The defendant petitioners to the FCC represented two clients with an apparent commercial interest in opposing the merger, NewsGuild-CWA, the largest union of journalists in the country, and NABET-CWA, the National Association of Broadcast Employees and Technicians. The defendant FCC petitioners were successful in the sense that the merger did not go forward. The list of defendants sued by plaintiff Kim is a long one, including many beyond the petitioners. The defendant list includes the FCC, the FCC Chairwoman in her personal capacity, the FCC Bureau Chief in her personal capacity, DISH Network (a company that opposed the transaction), Allen Media Group (a company that is accused of participating), United Church of Christ Media Justice Ministry, Common Cause, The Goodfriend Legal Group, and attorney David Goodfriend (in his personal capacity).
Defendants argued, among other things, that petitioning the FCC in opposition to a merger is at the very heart of the First Amendment protection of speech, citing Eastern R.R. Presidents Conf. v. Noerr Motor-Freight, Inc., 365 U.S. 127, 137 (1961).
Just as it is not my role as a commenter to adjudicate whether Donald Trump’s actions against ABC or the Des Moines Register are well grounded, I leave to the courts the question of whether defendant FCC petitioners and other defendants in the Kim case were part of an illegal conspiracy as charged by the plaintiff, and were motivated by anti-Korean as opposed to anti-merger animus. But the case has strong earmarks of being vexatious and weakly grounded litigation that should be dismissed, and reviewed by appropriate lawyers groups for possible ethical impropriety. The earmarks of vexatious litigation include charges that seem overbroad and highly speculative on their face.
Focusing on a possible chilling effect of the Kim case in the context of FCC petitions, the case has the potential of chilling future petitions to the FCC that challenge mergers. More broadly, vexatious litigation could be an important tool for interest groups that wish to discourage petitions to the government that challenge mergers or other conduct that may violate antitrust laws. Such vexatious litigation could undermine important free speech goals. Even if future petitioners and related defendants succeed in getting vexatious lawsuits against them dismissed because they were appropriately exercising Noerr First Amendment rights, it is not at all clear that the relevant federal court rules would impose any sanction on the plaintiff for bringing a weak case. The unfortunate result is that future potential petitioners to the government on merger cases or other antitrust matters need to worry that even if they succeed in challenging a merger or other anticompetitive activity, they will later suffer the retribution of expensive vexatious litigation.
So, what should the courts and the organized Bar do to deal with vexatious and weakly grounded litigation? Where vexatious cases are brought in bad faith and plainly without merit the answer is relatively easy: sanctions should be imposed by the court, as by requiring the bad-faith plaintiff to pay the defendant’s litigation costs. The organized bar should consider whether plaintiff lawyers are guilty of ethical lapses.
Where the claims are weak but colorable the remedy for vexatious litigation is more difficult. One popular suggestion is that courts be more rigorous in reviewing the merits of cases at an early stage and triaging weak cases. Further discussion of that suggestion by the Bar and courts seems warranted. The discussion is challenging because the early triage remedy is a two-edged sword: too much rigor in the judicial screening of cases at an early stage may squelch cases that would show merit if allowed to go forward.
One possible remedy is for the courts to dismiss weak cases at an early stage, a remedy that courts have aggressively used in the context of antitrust litigation. The early triage of weak cases has frequently occurred in antitrust cases. Plaintiff attorneys specializing in antitrust litigation often complain about overly aggressive court triage in antitrust cases. (By way of full disclosure, I am an advocate of vigorous antitrust enforcement and tend to agree with those who complain about excessive court-imposed limitations on antitrust enforcement.)
An important antitrust case where the courts imposed early triage is Bell Atlantic Corp v Twombly, 550 US 544, where the Supreme Court made it clear that to survive dismissal and proceed to discovery, antitrust plaintiffs must plead a claim that is at least plausible on its face, as opposed to relying on conclusory statements suggesting an antitrust violation is merely possible).
The Court had earlier decided that to overcome summary judgment in the antitrust conspiracy context, plaintiffs must present evidence that “tends to exclude the possibility that the alleged conspirators acted independently” (Matsushita Elec Indus Co v Zenith Radio Corp, 475 US 574 [1986]). For example, a court may grant summary judgment for defendants in a conspiracy case where there is no direct or “smoking gun” evidence of a conspiracy, and the evidence suggests the alleged conspiracy would have been economically irrational (e.g., Anderson News, LLC v American Media, Inc, 899 F.3d 87 [2d Cir 2018]).
Both the Bell Atlantic and Matsushita case are based on broad principles that have been applied by courts to an array of cases, not just antitrust cases.
An article by Jonathan Sallett argues that court scrutiny of certain categories of antitrust cases puts too high a proof burden on plaintiffs, and squelches deserving litigation See https://www.americanbar.org/groups/antitrust_law/resources/magazine/2022-spring/antitrust-reform/?login . Sallett suggests that the courts have “made it too hard for antitrust enforcers to succeed in litigation by requiring antitrust enforcers to anticipate and bear the burden of addressing any potential defense just to proceed to full consideration of the merits.” Further, “In cases like Brooke Group, Trinko, and Amex the Supreme Court has transformed contestable factual propositions into legal doctrine that has unjustifiably ratcheted up plaintiffs' burden of proof. “ By way of brief background, Brooke Group set a rigorous standard for predatory pricing claims, requiring plaintiffs to prove both below-cost pricing and a dangerous probability of recouping the investment in below-cost prices; Trinko significantly limited the scope of antitrust claims based on refusal to deal and emphasized that the existence of regulatory oversight could diminish the need for antitrust intervention; Amex increased plaintiffs’ proof burdens with regard to antitrust issues in so-called two-sided markets. (The Amex case example of a two-sided market is that credit card businesses engage in a simultaneous transaction between cardholders on one side and retail merchants on the other.) The Amex court underscored the importance of considering both sides of the market in competitive analysis.
Some will disagree with Sallett and say that it is a good thing that limits are put on antitrust cases, and that the courts should engage in early triage of cases.
A further question for discussion is whether the sort of court limitations complained about by Sallett in the antitrust context are reasonable when applied to other categories of litigation that some may see as vexatious, such as D.C.’s $54 million pants case brought by Roy Pearson. As stated earlier, the discussion is challenging because the early triage remedy is a two-edged sword: too much rigor in judicial screening of cases at an early stage may squelch cases that would show merit if allowed to go forward.
Unfortunately, the recent cases brought by Donald Trump make the issue of vexatious and weak litigation more difficult for the courts and the organized bar. Vexatious and weak cases brought by a powerful political figure like Trump provide justification for plaintiffs like Pearson (pants) and Kim (FCC) in a way that tests the mettle of the courts and the organized Bar.
Don Resnikoff (c)
Can publicly funded broadcasting survive the next Trump presidency? BY DON ALLEN RESNIKOFF
Can publicly funded broadcasting survive the next Trump presidency? Public broadcasting includes domestic broadcasters, the Corporation for Public Broadcasting (CPB) and the Public Broadcasting Service (PBS), as well as the Voice of America (VOA) and other broadcasters to overseas audiences.
Concern about possible partisan misuse of domestic public broadcasting in the next Trump term as President is suggested by the past partisan misuse of the Voice of America and other overseas broadcasters during the last Trump administration.
In June 2020 the Trump administration installed political ally Michael Pack as head of the Agency for Global Media (USAGM), which has a supervisory role over the Voice of America and other publicly funded broadcasters that serve overseas audiences.(1) Prior to his VOA appointment, Pack ran the conservative Claremont Institute(2) and was a colleague of the right-wing political strategist Steve Bannon.(3)
Shortly after Pack took on his Global Media position, the director and the deputy director of Voice of America resigned, and Pack fired the heads of three other networks managed by Global Media—Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks—as well as the head of the Open Technology Fund. Pack dissolved the networks’ bipartisan advisory boards and replaced them with panels composed of people widely considered to be Trump loyalists.(4)
In the final days of the last Trump administration more than two dozen VOA newsroom employees signed a petition demanding the immediate resignation of their director and the top deputy. Staff complained that the director and deputy had failed in their responsibility to remain independent of government influence. The Washington Post reported that the VOA managers had ordered staff to broadcast a speech by the Secretary of State Mike Pompeo that was delivered at VOA headquarters. Staffers called it a “propaganda event.” Staff also criticized the VOA managers for disciplining a reporter who sought to question Pompeo after his speech.(5)
Anne Applebaum’s article in The Atlantic of June 2020 explains that the Voice of America “was never meant to be the tool of one political party, but rather to present America from a broad, nonpartisan perspective.”(6) The Guardian newspaper warned against allowing the government “to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”(7)
The last Trump administration’s actions against overseas public broadcasting suggests that not only overseas public broadcasting but also domestic public broadcasting may be at risk under the next Trump administration. Trump has threatened hostile action against domestic media in recent months, and actually sued CBS concerning programming Trump deemed hostile. Public broadcasting is more vulnerable to Presidential hostility than private companies like CBS.
Even before the last Trump administration, domestic publicly funded broadcasters CPB and PBS were the targets of efforts by Republican administrations to achieve partisan control. In 2005 an internal investigation at PBS charged the board chair Kenneth Tomlinson with engaging in politically motivated meddling in programming decisions, and injecting politics into hiring. Among other things, a report by the agency inspector general found that Tomlinson’s campaign against perceived liberal bias included hiring a content monitor to review NOW with Bill Moyers and other public broadcasting shows. Tomlinson was charged with exceeding “the oversight role of a board member in making procurement and programming decisions.” (8) Media reports suggest that NOW with Bill Moyers particularly angered Tomlinson because Tomlinson believed that Moyers was unfair to President Bush.(9)
The steps taken to limit Tomlinson’s actions were effective. Tomlinson left the PBS board on November 3, 2005, after the inspector general had presented his preliminary adverse findings on Tomlinson to the board. (10)
But there is concern that possible future partisan meddling by the incoming Trump administration into domestic public broadcasting may be more destructive. The concern is reasonable, even though there is law that protects domestic public broadcasting from partisan interference.
The statute and regulations that control U.S. public broadcasting for domestic audiences include the Public Broadcasting Act of 1967, which established the CPB. A board of directors governs the CPB, sets policy, and establishes programming priorities. The U.S. President appoints each board member, and each, after confirmation by the Senate, serves a six-year term. The board, in turn, selects its chair and appoints the president of the board and the chief executive officer, who then names the other corporate officers. (This is in contrast to the situation for the overseas broadcasting umbrella agency USAGM, whose CEO has, since 2016, been directly chosen by the U.S. President.)
The Public Broadcasting Act requires that the CPB’s programs be “obtained from diverse sources” and follow “strict adherence to objectivity and balance in all programs or series of programs of a controversial nature.” The CPB distributes federal funds to local PBS affiliates such as New York’s WNET (Thirteen) and Washington D.C.’s WETA. The operations of the Corporation for Public Broadcasting and the Public Broadcasting Service are distinct, so CPB executives have no direct editorial control over PBS stations, and no control over the application of objectivity and balance standards. However, the objectivity and balance standards have a commonsense application to PBS and the broadcast stations that belong to the PBS network.
The published editorial standards for PBS follow an approach that includes some flexibility: “Fairness does not require that equal time be given to conflicting opinions or viewpoints.” However, producers are advised by PBS to provide “appropriate context to the audience, and producers must give those who are the subject of attack or criticism a reasonable opportunity to respond.” That language puts the burden of fairness on producers only, but common sense suggests that PBS and its stations retain a role with regard to objectivity and balance, particularly when a PBS station takes on the role of co-producer.
It is not at all clear that a hostile President Trump would need to honor the fair broadcasting requirements of federal law. On the other hand, there may be some additional legal limits to Presidential power to control public broadcasting.
While Congress in 2016 gave direct power to the President to choose the CEO of the US Agency for Global Media, that power to appoint the CEO does not apply to the Corporation for Public Broadcasting and the PBS. There is some protection from a hostile President in the requirement that the CPB board, not the U.S. President, selects its own chair and appoints the president of the board and the chief executive officer. But that protection from Presidential ire is limited by the broad discretion of the President to remove board members.
The goal of protecting the autonomy of public broadcasters is further complicated by U.S. Supreme Court decisions that put a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the President. As Harvard Law professors Cass Sunstein and Adrian Vermeule noted some time ago, the court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities. (11)
This constitutional cloud also applies to the independence of the CPB, the PBS, as well as the VOA, and the other publicly funded broadcasters that serve overseas audiences.
Are there any strategies that would protect public broadcasting from the wrath of an angry President Trump? Perhaps.
Successful litigation by the D.C. Attorney General in the past suggests that state law on not-for-profit corporations can provide a basis for limiting the federal executive power to interfere with the independence of public broadcasting, at least with regard to those USAGM units that are non-profit organizations and receive annual grants from the USAGM. In a case addressing the authority of USAGM executives to replace directors of the not-for-profit Open Technology Fund, D.C. Superior Court Judge Shana Frost Matini held that efforts by the executives to replace Fund board members were precluded by Fund bylaws, which contain “the only clear mechanism for removal of directors.” (12)
Another approach to protecting public broadcasting independence focuses on protecting the First Amendment right to free speech of journalists working for VOA and other public broadcasters.
In 2020 U.S. District Court Judge Beryl Howell entered a preliminary injunction order protecting the right to free speech of VOA journalists. She ordered the USAGM CEO Michael Pack to stop interfering in the news service’s news coverage and editorial personnel matters. She limited Pack’s authority to force the news agency to cover President Trump more favorably. She said that the acts of Pack and his aides likely “violated and continue to violate First Amendment rights because, among other unconstitutional effects, they result in self-censorship and the chilling of First Amendment expression.” (13)
Forcefully expressed public opinion can help public broadcasting retain its founding principles of objectivity and balance and avoid becoming a vehicle for partisan political propaganda.
References
1. Catie Edmondson & Edward Wong, With Push From Trump, Senate Moves to Install Contentious Filmmaker at U.S. Media Agency. The New York Times, May 8, 2020.
2. Michael Pack, https://www.claremont.org/scholar-bio/michael-pack/
3. Edmondson & Wong, supra note 1.
4. Madeleine Albright & Marc Nathanson, Op-Ed: Trump has pulled out of the global battle for hearts and minds, LOS ANGELES TIMES, August 4, 2020, https://www.latimes.com/opinion/story/2020-08-04/trump-voice-of-america-independence.
5. Paul Farhi, Voice of America journalists demand resignation of news agency’s top leadership, The Washington Post, January 14, 2021, https://www.washingtonpost.com/lifestyle/media/voice-of-america-demand-director-resign/2021/01/14/d06c7e8a-567b-11eb-a817-e5e7f8a406d6_story.html
6. Anne Applebaum, The Voice of America Will Sound Like Trump, The Atlantic, June 22, 2020, https://www.theatlantic.com/ideas/archive/2020/06/voice-america-will-sound-like-trump/613321/
7. Julian Borger, Voice of America: independence fears after Trump ally purges senior officials, The Guardian, June 18, 2020, https://www.theguardian.com/media/2020/jun/18/voice-of-america-independence-fears-after-trump-ally-purges-senior-officials?CMP=share_btn_tw
8. Reporters’ Committee for the Freedom of the Press, Ex-CPB chair violated law by interfering with programming, November 16, 2005, https://www.rcfp.org/ex-cpb-chair-violated-law-interfering-programming/
9. David Folkenflik, CPB Memos Indicate Level of Monitoring, NPR, June 30, 2005, https://www.npr.org/templates/story/story.php?storyId=4724317
10. Reporters’ Committee for the Freedom of the Press, supra note 8.
11. Cass Sunstein & Adrian Vermeule, The Very Structure of Modern Government Is Under Legal Assault, The New York Times, September 15, 2020.
12. District of Columbia v. Open Technology Fund, 2020 CA 0031 185B Judge: Shana Frost Matini, https://oag.dc.gov/sites/default/files/2020-10/OTF-Summary-Judgment.pdf
13. Turner et al. v. U.S. Agency for Global Media et al., No. 1:2020cv02885 - Document 45 (D.D.C. 2020) (See https://www.gibsondunn.com/wp-content/uploads/2020/11/PI-Decision-11-20-2020.pdf)
• Don Allen Resnikoff is principal of Don Allen Resnikoff Law, LLC. He formerly did antitrust litigation work with the D.C. Office of the Attorney General and the U.S. Department of Justice’s Antitrust Division. This article draws from the Don Resnikoff article in Media Ethics, Spring 2021, Vol. 32, No. 2, “Protecting the Independence of Public Broadcasting”
Can publicly funded broadcasting survive the next Trump presidency? Public broadcasting includes domestic broadcasters, the Corporation for Public Broadcasting (CPB) and the Public Broadcasting Service (PBS), as well as the Voice of America (VOA) and other broadcasters to overseas audiences.
Concern about possible partisan misuse of domestic public broadcasting in the next Trump term as President is suggested by the past partisan misuse of the Voice of America and other overseas broadcasters during the last Trump administration.
In June 2020 the Trump administration installed political ally Michael Pack as head of the Agency for Global Media (USAGM), which has a supervisory role over the Voice of America and other publicly funded broadcasters that serve overseas audiences.(1) Prior to his VOA appointment, Pack ran the conservative Claremont Institute(2) and was a colleague of the right-wing political strategist Steve Bannon.(3)
Shortly after Pack took on his Global Media position, the director and the deputy director of Voice of America resigned, and Pack fired the heads of three other networks managed by Global Media—Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks—as well as the head of the Open Technology Fund. Pack dissolved the networks’ bipartisan advisory boards and replaced them with panels composed of people widely considered to be Trump loyalists.(4)
In the final days of the last Trump administration more than two dozen VOA newsroom employees signed a petition demanding the immediate resignation of their director and the top deputy. Staff complained that the director and deputy had failed in their responsibility to remain independent of government influence. The Washington Post reported that the VOA managers had ordered staff to broadcast a speech by the Secretary of State Mike Pompeo that was delivered at VOA headquarters. Staffers called it a “propaganda event.” Staff also criticized the VOA managers for disciplining a reporter who sought to question Pompeo after his speech.(5)
Anne Applebaum’s article in The Atlantic of June 2020 explains that the Voice of America “was never meant to be the tool of one political party, but rather to present America from a broad, nonpartisan perspective.”(6) The Guardian newspaper warned against allowing the government “to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”(7)
The last Trump administration’s actions against overseas public broadcasting suggests that not only overseas public broadcasting but also domestic public broadcasting may be at risk under the next Trump administration. Trump has threatened hostile action against domestic media in recent months, and actually sued CBS concerning programming Trump deemed hostile. Public broadcasting is more vulnerable to Presidential hostility than private companies like CBS.
Even before the last Trump administration, domestic publicly funded broadcasters CPB and PBS were the targets of efforts by Republican administrations to achieve partisan control. In 2005 an internal investigation at PBS charged the board chair Kenneth Tomlinson with engaging in politically motivated meddling in programming decisions, and injecting politics into hiring. Among other things, a report by the agency inspector general found that Tomlinson’s campaign against perceived liberal bias included hiring a content monitor to review NOW with Bill Moyers and other public broadcasting shows. Tomlinson was charged with exceeding “the oversight role of a board member in making procurement and programming decisions.” (8) Media reports suggest that NOW with Bill Moyers particularly angered Tomlinson because Tomlinson believed that Moyers was unfair to President Bush.(9)
The steps taken to limit Tomlinson’s actions were effective. Tomlinson left the PBS board on November 3, 2005, after the inspector general had presented his preliminary adverse findings on Tomlinson to the board. (10)
But there is concern that possible future partisan meddling by the incoming Trump administration into domestic public broadcasting may be more destructive. The concern is reasonable, even though there is law that protects domestic public broadcasting from partisan interference.
The statute and regulations that control U.S. public broadcasting for domestic audiences include the Public Broadcasting Act of 1967, which established the CPB. A board of directors governs the CPB, sets policy, and establishes programming priorities. The U.S. President appoints each board member, and each, after confirmation by the Senate, serves a six-year term. The board, in turn, selects its chair and appoints the president of the board and the chief executive officer, who then names the other corporate officers. (This is in contrast to the situation for the overseas broadcasting umbrella agency USAGM, whose CEO has, since 2016, been directly chosen by the U.S. President.)
The Public Broadcasting Act requires that the CPB’s programs be “obtained from diverse sources” and follow “strict adherence to objectivity and balance in all programs or series of programs of a controversial nature.” The CPB distributes federal funds to local PBS affiliates such as New York’s WNET (Thirteen) and Washington D.C.’s WETA. The operations of the Corporation for Public Broadcasting and the Public Broadcasting Service are distinct, so CPB executives have no direct editorial control over PBS stations, and no control over the application of objectivity and balance standards. However, the objectivity and balance standards have a commonsense application to PBS and the broadcast stations that belong to the PBS network.
The published editorial standards for PBS follow an approach that includes some flexibility: “Fairness does not require that equal time be given to conflicting opinions or viewpoints.” However, producers are advised by PBS to provide “appropriate context to the audience, and producers must give those who are the subject of attack or criticism a reasonable opportunity to respond.” That language puts the burden of fairness on producers only, but common sense suggests that PBS and its stations retain a role with regard to objectivity and balance, particularly when a PBS station takes on the role of co-producer.
It is not at all clear that a hostile President Trump would need to honor the fair broadcasting requirements of federal law. On the other hand, there may be some additional legal limits to Presidential power to control public broadcasting.
While Congress in 2016 gave direct power to the President to choose the CEO of the US Agency for Global Media, that power to appoint the CEO does not apply to the Corporation for Public Broadcasting and the PBS. There is some protection from a hostile President in the requirement that the CPB board, not the U.S. President, selects its own chair and appoints the president of the board and the chief executive officer. But that protection from Presidential ire is limited by the broad discretion of the President to remove board members.
The goal of protecting the autonomy of public broadcasters is further complicated by U.S. Supreme Court decisions that put a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the President. As Harvard Law professors Cass Sunstein and Adrian Vermeule noted some time ago, the court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities. (11)
This constitutional cloud also applies to the independence of the CPB, the PBS, as well as the VOA, and the other publicly funded broadcasters that serve overseas audiences.
Are there any strategies that would protect public broadcasting from the wrath of an angry President Trump? Perhaps.
Successful litigation by the D.C. Attorney General in the past suggests that state law on not-for-profit corporations can provide a basis for limiting the federal executive power to interfere with the independence of public broadcasting, at least with regard to those USAGM units that are non-profit organizations and receive annual grants from the USAGM. In a case addressing the authority of USAGM executives to replace directors of the not-for-profit Open Technology Fund, D.C. Superior Court Judge Shana Frost Matini held that efforts by the executives to replace Fund board members were precluded by Fund bylaws, which contain “the only clear mechanism for removal of directors.” (12)
Another approach to protecting public broadcasting independence focuses on protecting the First Amendment right to free speech of journalists working for VOA and other public broadcasters.
In 2020 U.S. District Court Judge Beryl Howell entered a preliminary injunction order protecting the right to free speech of VOA journalists. She ordered the USAGM CEO Michael Pack to stop interfering in the news service’s news coverage and editorial personnel matters. She limited Pack’s authority to force the news agency to cover President Trump more favorably. She said that the acts of Pack and his aides likely “violated and continue to violate First Amendment rights because, among other unconstitutional effects, they result in self-censorship and the chilling of First Amendment expression.” (13)
Forcefully expressed public opinion can help public broadcasting retain its founding principles of objectivity and balance and avoid becoming a vehicle for partisan political propaganda.
References
1. Catie Edmondson & Edward Wong, With Push From Trump, Senate Moves to Install Contentious Filmmaker at U.S. Media Agency. The New York Times, May 8, 2020.
2. Michael Pack, https://www.claremont.org/scholar-bio/michael-pack/
3. Edmondson & Wong, supra note 1.
4. Madeleine Albright & Marc Nathanson, Op-Ed: Trump has pulled out of the global battle for hearts and minds, LOS ANGELES TIMES, August 4, 2020, https://www.latimes.com/opinion/story/2020-08-04/trump-voice-of-america-independence.
5. Paul Farhi, Voice of America journalists demand resignation of news agency’s top leadership, The Washington Post, January 14, 2021, https://www.washingtonpost.com/lifestyle/media/voice-of-america-demand-director-resign/2021/01/14/d06c7e8a-567b-11eb-a817-e5e7f8a406d6_story.html
6. Anne Applebaum, The Voice of America Will Sound Like Trump, The Atlantic, June 22, 2020, https://www.theatlantic.com/ideas/archive/2020/06/voice-america-will-sound-like-trump/613321/
7. Julian Borger, Voice of America: independence fears after Trump ally purges senior officials, The Guardian, June 18, 2020, https://www.theguardian.com/media/2020/jun/18/voice-of-america-independence-fears-after-trump-ally-purges-senior-officials?CMP=share_btn_tw
8. Reporters’ Committee for the Freedom of the Press, Ex-CPB chair violated law by interfering with programming, November 16, 2005, https://www.rcfp.org/ex-cpb-chair-violated-law-interfering-programming/
9. David Folkenflik, CPB Memos Indicate Level of Monitoring, NPR, June 30, 2005, https://www.npr.org/templates/story/story.php?storyId=4724317
10. Reporters’ Committee for the Freedom of the Press, supra note 8.
11. Cass Sunstein & Adrian Vermeule, The Very Structure of Modern Government Is Under Legal Assault, The New York Times, September 15, 2020.
12. District of Columbia v. Open Technology Fund, 2020 CA 0031 185B Judge: Shana Frost Matini, https://oag.dc.gov/sites/default/files/2020-10/OTF-Summary-Judgment.pdf
13. Turner et al. v. U.S. Agency for Global Media et al., No. 1:2020cv02885 - Document 45 (D.D.C. 2020) (See https://www.gibsondunn.com/wp-content/uploads/2020/11/PI-Decision-11-20-2020.pdf)
• Don Allen Resnikoff is principal of Don Allen Resnikoff Law, LLC. He formerly did antitrust litigation work with the D.C. Office of the Attorney General and the U.S. Department of Justice’s Antitrust Division. This article draws from the Don Resnikoff article in Media Ethics, Spring 2021, Vol. 32, No. 2, “Protecting the Independence of Public Broadcasting”
Can people without technical skills support the DC Council bill regulating use of discriminatory AI algorithms?
Last year a bill was introduced to the DC Council with the goal of avoiding discrimination facilitated by artificial intelligence, particularly algorithms used for job applications and other similar situations. The concern is that machines can learn to reject applicants for reasons that are discriminatory, for example sex or height.
The bill is at https://lims.dccouncil.gov/Legislation/B25-0114 The bill did not become law.
The proposed DC bill concerning algorithms overlaps and augments the generally applicable DC antidiscrimination law. The bill adds requirements on use of algorithms to evaluate job candidates, and for other similar applications, and provides for enforcement through government and private litigation. The aim of the legislation is to stop discrimination using algorithms.
A principal requirement of the proposed DC law is similar to, but more elaborate than an existing New York City law: those who use algorithms must publicly share information about how they apply the algorithms. The proposed DC bill requires that parties that uses algorithms provide a “concise” public notice to explain their use.
The Biden Administration issued a “bill of rights” that suggests similar principles for regulating algorithms used for job applicants and in other similar situations. See at https://www.whitehouse.gov/ostp/ai-bill-of-rights/
Can people without technology skills sensibly assess the value of the proposed legislation? Should advocacy groups without technology skills support the legislation?
The Administration’s Bill of Rights for AI, like the New York City legislation, suggests an approach for public interest organizations without technology expertise that wish to support the DC legislation that would regulate use of algorithms in employment evaluation and other similar circumstances. A non-technical approach would be for the public interest organization to simply state support for the legislative goals of public disclosure of AI algorithms used for sensitive purposes.
An argument for such an approach is that the bottom line concern about illegal discrimination and algorithms is simply about avoiding a discriminatory outcome. One does not need to be a technology expert to recognize that it is reasonable to require parties that uses algorithms for job applications and similar situations to publicly provide a “concise” notice to explain their use.
I recognize that there are reasonable arguments against the DC legislative proposal, including an argument that special anti-discrimination legislation targeting AI and algorithms is not needed, since the special legislation concerning algorithms overlaps and augments the generally applicable DC antidiscrimination law. But a decision not to support the legislation should not be based on a concern that the AI issues are too complex.
Posted by Don Allen Resnikoff
PS on algorithms: See https://lawandtech.ie/the-future-of-credit-ai-or-human-judgment/ a blog by Joseph Boyer that discusses application of computer algorithms to credit applications.
Price Gouging as a target of government action – the DC experience
Price gouging is in the news, because Presidential candidate Kamala Harris supports government action against price gouging. Price gouging is not a precise concept: it is applied to an array of price hikes thought to be egregious. Whatever the definition of price gouging, government action against price gouging goes against conventional antitrust wisdom. Conventional wisdom is that the right path to low prices is vigorous competition, and the government’s role is to preserve competition: the government should not directly intervene and direct private companies to set particular prices.
Some, like Senator Elizabeth Warren, agree that as a general matter government control of private company pricing is bad, but argue that in egregious pricing situations the government should step in.
Recently, CNBC’s Joe Kernan, who brings a political point of view to the table, cross-examined Elizabeth Warren on Presidential candidate Harris’ advocacy of government action against price gouging. In responses to Kernan’s suggestion that action against price gouging is government control of price, Warren responded:
[T]hree dozen states have price gouging laws and they have used them effectively. States like Texas and Florida, they've used price gouging laws. Price gouging laws are not price control. Price gouging laws are to say, you know, sometimes markets go off the rails and when they do, we need some ways to get them back on the rails. We need some curbs on that behavior. See https://www.realclearpolitics.com/video/2024/08/23/cnbcs_kernen_vs_sen_warren_you_never_lose_an_argument_because_no_one_can_ever_say_anything_back_to_you.html
The DC Attorney General has pursued price gouging complaints. An interesting question is whether the pricing behavior challenged by the complaints is sufficiently well defined and egregious so as to be distinguishable from a general policy of government price controls. Put another way, do the DC prosecutions illustrate Warren’s point that state actions against price gouging are not the same as generally applicable government price controls. An example of a DC Attorney General price gouging action follows.
In November of 2020, then Attorney General Karl Racine filed a lawsuit against Capitol Petroleum Group, LLC (CPG), perhaps the leading retailer and distributor of gasoline in the District of Columbia, as well as several affiliated companies, for illegal price gouging during the District’s COVID-19 emergency. “The Office of the Attorney General’s investigation revealed that even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District.” OAG also alleged that CPG and its affiliates, Anacostia Realty, LLC, and DAG Petroleum Suppliers, LLC, unfairly increased profit margins they earned on gas distribution to other retailers. See https://oag.dc.gov/release/ag-racine-sues-major-gasoline-seller-price-gouging
The specific legal justification for the AG’s action was District’s Natural Disaster Consumer Protection Act (NDCPA), which went into effect when the Mayor declared a state of emergency on March 11, 2020. The NDCPA prohibits individuals or businesses from taking advantage of an emergency by charging higher than normal prices for goods and services. Specifically, the law bars retailers from increasing the amount they mark up goods over their wholesale costs and requires them to maintain the same markup percentage that was in place 90 days before the emergency was declared.
It is open to debate whether DC’s emergency regulation is good policy, but I think that the DC AG’s COVID era action against a large DC gasoline supplier supports Senator Warren’s view: CNBC’s Joe Kernan and others obfuscate the pricing discussion by suggesting that a government price gouging action directed against a particular instance of alleged egregious pricing conduct is the same as a broad regime of government price controls. The DC statute prohibiting sellers from jacking up prices to take advantage of an emergency is not the same as a statute broadly mandating price regulation.
Post by Don Allen Resnikoff 10-1
Price gouging is in the news, because Presidential candidate Kamala Harris supports government action against price gouging. Price gouging is not a precise concept: it is applied to an array of price hikes thought to be egregious. Whatever the definition of price gouging, government action against price gouging goes against conventional antitrust wisdom. Conventional wisdom is that the right path to low prices is vigorous competition, and the government’s role is to preserve competition: the government should not directly intervene and direct private companies to set particular prices.
Some, like Senator Elizabeth Warren, agree that as a general matter government control of private company pricing is bad, but argue that in egregious pricing situations the government should step in.
Recently, CNBC’s Joe Kernan, who brings a political point of view to the table, cross-examined Elizabeth Warren on Presidential candidate Harris’ advocacy of government action against price gouging. In responses to Kernan’s suggestion that action against price gouging is government control of price, Warren responded:
[T]hree dozen states have price gouging laws and they have used them effectively. States like Texas and Florida, they've used price gouging laws. Price gouging laws are not price control. Price gouging laws are to say, you know, sometimes markets go off the rails and when they do, we need some ways to get them back on the rails. We need some curbs on that behavior. See https://www.realclearpolitics.com/video/2024/08/23/cnbcs_kernen_vs_sen_warren_you_never_lose_an_argument_because_no_one_can_ever_say_anything_back_to_you.html
The DC Attorney General has pursued price gouging complaints. An interesting question is whether the pricing behavior challenged by the complaints is sufficiently well defined and egregious so as to be distinguishable from a general policy of government price controls. Put another way, do the DC prosecutions illustrate Warren’s point that state actions against price gouging are not the same as generally applicable government price controls. An example of a DC Attorney General price gouging action follows.
In November of 2020, then Attorney General Karl Racine filed a lawsuit against Capitol Petroleum Group, LLC (CPG), perhaps the leading retailer and distributor of gasoline in the District of Columbia, as well as several affiliated companies, for illegal price gouging during the District’s COVID-19 emergency. “The Office of the Attorney General’s investigation revealed that even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District.” OAG also alleged that CPG and its affiliates, Anacostia Realty, LLC, and DAG Petroleum Suppliers, LLC, unfairly increased profit margins they earned on gas distribution to other retailers. See https://oag.dc.gov/release/ag-racine-sues-major-gasoline-seller-price-gouging
The specific legal justification for the AG’s action was District’s Natural Disaster Consumer Protection Act (NDCPA), which went into effect when the Mayor declared a state of emergency on March 11, 2020. The NDCPA prohibits individuals or businesses from taking advantage of an emergency by charging higher than normal prices for goods and services. Specifically, the law bars retailers from increasing the amount they mark up goods over their wholesale costs and requires them to maintain the same markup percentage that was in place 90 days before the emergency was declared.
It is open to debate whether DC’s emergency regulation is good policy, but I think that the DC AG’s COVID era action against a large DC gasoline supplier supports Senator Warren’s view: CNBC’s Joe Kernan and others obfuscate the pricing discussion by suggesting that a government price gouging action directed against a particular instance of alleged egregious pricing conduct is the same as a broad regime of government price controls. The DC statute prohibiting sellers from jacking up prices to take advantage of an emergency is not the same as a statute broadly mandating price regulation.
Post by Don Allen Resnikoff 10-1
Attorney General Schwalb Secures Over $3.2 Million in Industry Sweep of Title Insurance Kickback Schemes
August 29, 2024 AG Press Release
Title Companies Recruited Real Estate Agents, Offered Illegal Payouts in Exchange for Client Referrals
Attorney General Brian L. Schwalb today announced that Allied Title & Escrow, LLC (Allied), KVS Title, LLC (KVS), Modern Settlements, LLC (Modern), and Union Settlements, LLC (Union) will pay a combined $3,290,000 after an investigation by the Office of the Attorney General (OAG) revealed the widespread use of illegal kickback schemes in the title insurance market. As part of the scheme, title companies offered real estate agents discounted ownership interests and lucrative profit sharing in exchange for business referrals that boosted the companies’ revenues. These conflict of interest-plagued, anticompetitive arrangements limited District homebuyers’ ability to shop for the best price and service when purchasing title insurance and escrow services and hurt law-abiding competitors in the title insurance industry, in violation of the District’s Consumer Protection Procedures Act (CPPA).
“District residents are entitled to make fully informed decisions about how to spend their hard-earned money, especially when it comes to making the high stakes purchase of a home,” said Attorney General Schwalb. “These four companies violated the most fundamental principles of a free and fair marketplace: they exploited consumers, limited their choices, and hurt other businesses that play by the rules. Today, we’re exposing and putting an end to these elaborate and illegal kickback schemes.”
Required by most lenders for home loans, title insurance protects a lender and a homebuyer from defects in a title to property, such as a previous owner’s debts. Real estate agents commonly suggest title insurance companies to their clients. However, both federal and District law prohibit kickbacks and other forms of compensation for the referral of title insurance and escrow business. These laws ensure that real estate agents act in the best interests of their clients—rather than themselves—and help prevent closing costs and fees from becoming artificially inflated by anticompetitive practices. While federal law allows for certain affiliated business arrangements that meet specific requirements, District law is more stringent and does not have such an exception.
OAG’s investigations found that Allied, KVS, Modern, and Union violated District law by providing real estate agents exclusive, lucrative, and discounted investment opportunities either in the companies themselves or in shell entities they created to induce the real estate agents to make business referrals that generated increased revenues for the companies. In return for the referrals, the agents received kickbacks in the form of a split of the profits. Modern and Union were created for the explicit purpose of recruiting agents to refer title insurance business to them in return for a share of the profits. Allied and KVS created shell companies for the same purpose.
In addition to profits from referrals, Allied compensated real estate agents for participating in the scheme by organizing and hosting multiple parties on yachts in the Chesapeake Bay. These yacht parties rewarded the agents for referrals, sought to ensure their continued loyalty, and incentivized future referrals.
OAG’s investigation revealed that the financial incentives these companies provided to real estate agents led those agents to aggressively steer their homebuying clients to the companies in ways that reduced buyers’ ability to shop for the best price or service. This behavior inhibited competition in the District’s title insurance and escrow market, and it harmed other title companies that followed the law but lost business to the companies operating the unlawful schemes.
Under the terms of the agreements:
OAG is continuing to investigate the issue of kickbacks across the title insurance industry to protect consumers, provide a level playing field for companies that follow the law, and ensure a competitive marketplace.
Copies of the settlement agreements are available here for Allied, KVS, Union, and Modern.
These matters were handled by Assistant Attorneys Generals Marcia Hollingsworth, Emily Barth, Jorge Bonilla Lopez, and Lindsay Marks, Deputy Director of the Office of Consumer Protection Kevin Vermillion, and Director of the Office of Consumer Protection Adam Teitelbaum.
August 29, 2024 AG Press Release
Title Companies Recruited Real Estate Agents, Offered Illegal Payouts in Exchange for Client Referrals
Attorney General Brian L. Schwalb today announced that Allied Title & Escrow, LLC (Allied), KVS Title, LLC (KVS), Modern Settlements, LLC (Modern), and Union Settlements, LLC (Union) will pay a combined $3,290,000 after an investigation by the Office of the Attorney General (OAG) revealed the widespread use of illegal kickback schemes in the title insurance market. As part of the scheme, title companies offered real estate agents discounted ownership interests and lucrative profit sharing in exchange for business referrals that boosted the companies’ revenues. These conflict of interest-plagued, anticompetitive arrangements limited District homebuyers’ ability to shop for the best price and service when purchasing title insurance and escrow services and hurt law-abiding competitors in the title insurance industry, in violation of the District’s Consumer Protection Procedures Act (CPPA).
“District residents are entitled to make fully informed decisions about how to spend their hard-earned money, especially when it comes to making the high stakes purchase of a home,” said Attorney General Schwalb. “These four companies violated the most fundamental principles of a free and fair marketplace: they exploited consumers, limited their choices, and hurt other businesses that play by the rules. Today, we’re exposing and putting an end to these elaborate and illegal kickback schemes.”
Required by most lenders for home loans, title insurance protects a lender and a homebuyer from defects in a title to property, such as a previous owner’s debts. Real estate agents commonly suggest title insurance companies to their clients. However, both federal and District law prohibit kickbacks and other forms of compensation for the referral of title insurance and escrow business. These laws ensure that real estate agents act in the best interests of their clients—rather than themselves—and help prevent closing costs and fees from becoming artificially inflated by anticompetitive practices. While federal law allows for certain affiliated business arrangements that meet specific requirements, District law is more stringent and does not have such an exception.
OAG’s investigations found that Allied, KVS, Modern, and Union violated District law by providing real estate agents exclusive, lucrative, and discounted investment opportunities either in the companies themselves or in shell entities they created to induce the real estate agents to make business referrals that generated increased revenues for the companies. In return for the referrals, the agents received kickbacks in the form of a split of the profits. Modern and Union were created for the explicit purpose of recruiting agents to refer title insurance business to them in return for a share of the profits. Allied and KVS created shell companies for the same purpose.
In addition to profits from referrals, Allied compensated real estate agents for participating in the scheme by organizing and hosting multiple parties on yachts in the Chesapeake Bay. These yacht parties rewarded the agents for referrals, sought to ensure their continued loyalty, and incentivized future referrals.
OAG’s investigation revealed that the financial incentives these companies provided to real estate agents led those agents to aggressively steer their homebuying clients to the companies in ways that reduced buyers’ ability to shop for the best price or service. This behavior inhibited competition in the District’s title insurance and escrow market, and it harmed other title companies that followed the law but lost business to the companies operating the unlawful schemes.
Under the terms of the agreements:
- Allied will pay $1.9 million to the District.
- KVS will pay $1 million to the District.
- Union will pay $325,000 to the District.
- Modern will pay $65,000 to the District.
- The District will devote up to $1.75 million from these settlements to restitution for affected consumers. OAG will share more information with homeowners in the coming months.
- All four companies agreed to end the practice of giving real estate agents consideration for the referral of title insurance business and will either cease their title insurance operations in the District or divest real estate agents from their ownership interests in the shell companies.
OAG is continuing to investigate the issue of kickbacks across the title insurance industry to protect consumers, provide a level playing field for companies that follow the law, and ensure a competitive marketplace.
Copies of the settlement agreements are available here for Allied, KVS, Union, and Modern.
These matters were handled by Assistant Attorneys Generals Marcia Hollingsworth, Emily Barth, Jorge Bonilla Lopez, and Lindsay Marks, Deputy Director of the Office of Consumer Protection Kevin Vermillion, and Director of the Office of Consumer Protection Adam Teitelbaum.
How China Regulates Big Tech and Governs its Economy
DC Bar podcast at https://podcasters.spotify.com/pod/show/DCBar
Angela Zhang, previously of the University of Hong Kong Faculty of Law, and currently of the USC Gould School of Law, is the author of “High Wire: How China Regulates Big Tech and Governs its Economy” (Oxford Press, 2024). She provides important and nuanced insights into China's hierarchical regulatory style. Don Resnikoff moderates.
Thanks to DC Bar's Jessica Harris for producing the program.
More about Angela Zhang's recent book and the podcast:
The book:
For years, Chinese regulatory authorities adopted a tolerant stance toward regulating its “big tech” entrepreneurs, with the goal of cultivating tech titans capable of outperforming their foreign rivals. But that tolerant approached has been reversed. Hope has faded for economic reform in China that would allow increased freedom for private enterprise. Hope has also faded that there could be dialogue between the U.S. and China leading to relaxation of restrictions on commerce between the U.S. and China, such as easing of tariffs.
Angela Zhang’s current book examines the recent changes in China’s regulation of business. China’s autocratic and hierarchical system has tightened, and in recent years the Chinese government has put draconian limits on business, particularly “big tech.” Against the political backdrop of President Xi Jinping’s “common prosperity” campaign against income inequality, the Chinese government unleashed a seemingly unrelenting blizzard of regulatory measures against Chinese tech firms in areas ranging from antitrust, financial controls, and labor.
To make sense of China’s regulatory crackdown on tech businesses, it is necessary to focus on China’s regulatory structure. President Xi Jinping can’t control everything directly. He must rely on a complex array of bureaucratic agencies to regulate the economy. That bureaucracy includes regulatory agencies that ostensibly have functions similar to U.S. agencies, such as antitrust enforcement or financial regulation. But the Chinese agencies tend not to follow regular legal procedures in the manner of analogue U.S. agencies. The agencies in China typically give priority to political goals such as deference to higher government authority and protecting national security.
A great value of Angela Zhang’s book is that she shares her knowledge of the complexities of the Chinese system of government and its bureaucratic agencies. She offers the insight that when regulatory agencies are focused on carrying out political goals in an increasingly hierarchical system, the result is extreme inefficiency to the point of disfunction.
The podcast:
The podcast focused on a particular segment of the recent High Wire book, Chapter 9.1. That chapter compares competition policies of the U.S., Europe, and China. Zhang writes at one point:
[W]hile the United States follows a market-centric strategy, Europe advocates a rights-based philosophy, and China champions a state-centric model. . . . The US model reflects an unwavering confidence in market mechanisms and assigns a relatively limited role to governmental intervention. In contrast, Europe’s approach is centered on protecting the rights and interests of users and citizens. Deviating from both of these models, China’s strategy places the state as the central figure guiding and regulating the tech industry.
The podcast also deals with the broader issues of Angela Zhang's High Wire book.
I recommend the Zhang High Wire book. The book is valuable to readers who wish to understand China's regulatory policies. The book is also valuable because it pulls us away from a provincial US-centric view of business regulation, and encourages us to look at business regulation from a broader, more international perspective.
--Don Resnikoff
About protesters at the 1968 Democratic convention
Following is a book review I published in 2021of the book The Trial of the Chicago 7, The Official Transcript (Simon and Schuster, October, 2020, earlier edition 1970) edited by Mark L. Levine , George C. McNamee , Daniel Greenberg.
During a turbulent time in American politics, protestors were indicted on the charges of conspiracy and crossing state lines with the intention of inciting riots. This may seem like a current news headline, but the violence occurred during the 1968 Democratic National Convention in Chicago, and the defendants were Vietnam War protestors. Riveting transcript excerpts from the federal trial of the “Chicago 7” form the heart of this book edited by Mark Levine, George McNamee, and Daniel Greenberg.
There is no shortage of drama in the contentious courtroom arguments between the lawyers and the judge and in the disruptive conduct of the defendants. “Yippies” (members of the Youth International Party) Abbie Hoffman and Jerry Rubin shouted taunts at Judge Julius Hoffman, and the judge and prosecutors responded in kind, insulting the defendants and their counsel in the presence of the jury. An eighth defendant, Black Panther leader Bobby Seale, was also charged. Seale spoke angrily in court, out of the permitted order, asserting what he perceived to be his right to act as his own lawyer. Judge Hoffman ordered Seale to be bound and gagged in the presence of the jury. Ultimately, Hoffman declared a mistrial in Seale’s case.
The defendants were charged under the Anti-Riot Act of 1968, which contains language — particularly in section 2102(b) — that critics see as violating constitutional free speech protections:
As used in this chapter, the term “to incite a riot”, or “to organize, promote, encourage, participate in, or carry on a riot”, includes, but is not limited to, urging or instigating other persons to riot, but shall not be deemed to mean the mere oral or written (1) advocacy of ideas or (2) expression of belief, not involving advocacy of any act or acts of violence or assertion of the rightness of, or the right to commit, any such act or acts.
None of the defendants were convicted by a jury on the conspiracy charge, but five were convicted on the inciting riot charge. In 1972 the Seventh Circuit Court of Appeals vacated the convictions in United States v. Dellinger.
When the Seventh Circuit heard the case, it discussed important constitutional issues of free speech, including whether the Anti-Riot Act threatened to punish the mere advocacy of ideas or expression of belief. Two of the appellate judges thought the language was good enough to pass constitutional muster, although they vacated the convictions on other grounds . The third, Judge Wilbur Pell Jr., disagreed about the free speech issue, which he would have added as grounds for vacating the convictions: “I am able to reach no conclusion other than that the added phrase [beginning with “not”] was intended to preclude, under pain of prosecution, advocacy of violence even though only an idea or expression of belief.”
FThe basis for reversal stated in the Court’s principal decision was that political issues of the day required much more voir dire inquiry of the jury than just the bare “can you be impartial” questions permitted by the trial judge.. Another ground for reversal was what the Court of Appeals viewed as open hostility by the presiding judge and prosecutors toward the defendants and their lawyers.
Prosecutions relying on the Anti-Riot Act have been infrequent, though several have arisen recently, mainly against neo-Nazi groups. Judicial reaction has been mixed. In the 2019 case United States v. Robert Rundo, the U.S. District Court for the Central District of California wrote: “The Anti-Riot Act has no imminence requirement. The Anti-Riot Act does not require that advocacy be directed toward inciting or producing imminent lawless action. It criminalizes advocacy even where violence or lawless action is not imminent.” The court thus dismissed charges against the three white supremacists for their role in violent rallies.
In last year’s United States v. Miselis, the Court of Appeals for the Fourth Circuit construed the Anti-Riot Act to allow it as the basis for a criminal conviction. The court explained that while the act is flawed, “the appropriate remedy is to invalidate the statute only to the extent that it reaches too far, while leaving the remainder intact.”
As the events of January 6 at the U.S. Capitol and afterward suggest, there is continuing significance of the legal issues in play during the Chicago 7 trial, even if indictments of alleged riot inciters in 2021 are based on different statutes. Now, as in 1969, the issue is how Congress and the courts deal with speech about taking action. In the 1969 case Brandenburg v. Ohio, the U.S. Supreme Court explained that the Constitution’s First Amendment protects advocating the use of force or lawbreaking “except where such advocacy is directed to inciting or producing imminent lawless action and is likely to incite or produce such action.”
Don Allen Resnikoff is principal at Don Allen Resnikoff Law, LLC.
Comment by Don Allen Resnikoff
Burn Book: A Tech Love Story
by Kara Swisher
(Simon & Schuster)
I am attracted to books that present antitrust law and competition policy issues to a broad audience. I see educating the public about competition issues as a laudable goal. Kara Swisher’s Burn Book is a recent example that caught my interest, but for unusual reasons.
The book first caught my attention because it is unusually popular for a book on competition policy – it was on the New York Times best seller list for weeks. The reason for the popularity seems to be book’s focus on bad behavior of big tech company executives. The stories of bad behavior are interesting and well presented.
But there is a problem with the focus on bad behavior by executives: it neglects the importance of law reform and vigorous law enforcement to correct bad business behavior. It is great that Kara Swisher is able to get the attention of a broad popular audience concerning bad behavior of big tech companies and their leaders. On the other hand, by focusing her attention so strongly on bad behavior of tech companies as an ethical or moral failure of business leaders, Kara Swisher gives insufficient attention to law reform and enforcement that would impose severe remedies and would control bad behavior.
Burn Book focuses a great deal on the details of how tech business superstars like Tesla’s Elon Musk and Meta’s Mark Zuckerberg and Google leaders Larry Page and Sergey Brin failed to keep their promises to do good rather than evil. When their businesses became large and very powerful, they became narcissistic and greedy billionaires in the John D. Rockefeller robber baron mode. The big tech companies they have led are the modern equivalents of the Rockefeller led Standard Oil industrial giant that the U.S. government broke up in the early 1900s.
The tech leaders are considered evil in part because they make money by trading on data they take from platform users. That scheme is enhanced by click-bait strategies that lead users into content that is false and undermines their mental health. Senator Elizabeth Warren posted on Twitter (now X) concerning Facebook (now Meta) that “Anybody on the internet knows that Facebook has monopoly power, . . We need stronger antitrust laws to break up big tech and finally unwind mergers like Facebook, WhatsApp, and Instagram.”
Kara Swisher certainly has an understanding of antitrust law and competition policy reforms that would counter big tech bad behavior, and she has the ability to articulate those understandings. She briefly complains at one point in her book about the failures of elected officials to pass “legislation to protect anyone.” She points to the need for legislation providing improved privacy protections, updated antitrust laws, algorithmic transparency requirements, and reforms otherwise addressing the negative effects of the information platform businesses on peoples’ mental health. But she offers little detail.
It is reasonable to guess that Swisher also supports such government enforcement efforts as opposing acquisition of rivals by large platform companies like Facebook, and suing Amazon concerning its actions against suppliers – but Swisher does not give us a lot on these topics.
I hope that Kara Swisher’s emphasis will shift in the future, with less focus on tech business personalities and their ethical behavior and more on law reform and government enforcement. It must be clear to her that the root of ethical issues and bad behavior of tech leaders is money. Until the U.S. legal process imposes legal remedies that have a cost, tech leaders will not value consumers or treat them well.
While Swisher’s book could have more to say about law reform and government enforcement, Burn Book does tell the story of her success as a business journalist, and it is an interesting one. Swisher deserves considerable respect for her accomplishments as a business journalist who focuses the public’s attention on the bad conduct of big businesses. Kara Swisher had the insight that tech business and particularly the behavior of big tech business leaders are of great interest to people. She also had the insight that print journalism is in decline, which led her to clever use of modern digital media, including podcasts, and live conferences.
There are comments in Burn Book that suggest that Kara Swisher may yet turn her considerable talents to more conventional law reform advocacy. She tells us that she has moved to Washington, DC and may pursue more Washington, DC type interests. She gives us a hint that she might focus more on the policy issues and law reform proposals that respond to the bad big tech behavior that she has chronicled. If Kara Swisher turns her attention to reform of government policy and law, her broad popularity and great journalistic skill may mean that many people will pay attention.
END
Burn Book: A Tech Love Story
by Kara Swisher
(Simon & Schuster)
I am attracted to books that present antitrust law and competition policy issues to a broad audience. I see educating the public about competition issues as a laudable goal. Kara Swisher’s Burn Book is a recent example that caught my interest, but for unusual reasons.
The book first caught my attention because it is unusually popular for a book on competition policy – it was on the New York Times best seller list for weeks. The reason for the popularity seems to be book’s focus on bad behavior of big tech company executives. The stories of bad behavior are interesting and well presented.
But there is a problem with the focus on bad behavior by executives: it neglects the importance of law reform and vigorous law enforcement to correct bad business behavior. It is great that Kara Swisher is able to get the attention of a broad popular audience concerning bad behavior of big tech companies and their leaders. On the other hand, by focusing her attention so strongly on bad behavior of tech companies as an ethical or moral failure of business leaders, Kara Swisher gives insufficient attention to law reform and enforcement that would impose severe remedies and would control bad behavior.
Burn Book focuses a great deal on the details of how tech business superstars like Tesla’s Elon Musk and Meta’s Mark Zuckerberg and Google leaders Larry Page and Sergey Brin failed to keep their promises to do good rather than evil. When their businesses became large and very powerful, they became narcissistic and greedy billionaires in the John D. Rockefeller robber baron mode. The big tech companies they have led are the modern equivalents of the Rockefeller led Standard Oil industrial giant that the U.S. government broke up in the early 1900s.
The tech leaders are considered evil in part because they make money by trading on data they take from platform users. That scheme is enhanced by click-bait strategies that lead users into content that is false and undermines their mental health. Senator Elizabeth Warren posted on Twitter (now X) concerning Facebook (now Meta) that “Anybody on the internet knows that Facebook has monopoly power, . . We need stronger antitrust laws to break up big tech and finally unwind mergers like Facebook, WhatsApp, and Instagram.”
Kara Swisher certainly has an understanding of antitrust law and competition policy reforms that would counter big tech bad behavior, and she has the ability to articulate those understandings. She briefly complains at one point in her book about the failures of elected officials to pass “legislation to protect anyone.” She points to the need for legislation providing improved privacy protections, updated antitrust laws, algorithmic transparency requirements, and reforms otherwise addressing the negative effects of the information platform businesses on peoples’ mental health. But she offers little detail.
It is reasonable to guess that Swisher also supports such government enforcement efforts as opposing acquisition of rivals by large platform companies like Facebook, and suing Amazon concerning its actions against suppliers – but Swisher does not give us a lot on these topics.
I hope that Kara Swisher’s emphasis will shift in the future, with less focus on tech business personalities and their ethical behavior and more on law reform and government enforcement. It must be clear to her that the root of ethical issues and bad behavior of tech leaders is money. Until the U.S. legal process imposes legal remedies that have a cost, tech leaders will not value consumers or treat them well.
While Swisher’s book could have more to say about law reform and government enforcement, Burn Book does tell the story of her success as a business journalist, and it is an interesting one. Swisher deserves considerable respect for her accomplishments as a business journalist who focuses the public’s attention on the bad conduct of big businesses. Kara Swisher had the insight that tech business and particularly the behavior of big tech business leaders are of great interest to people. She also had the insight that print journalism is in decline, which led her to clever use of modern digital media, including podcasts, and live conferences.
There are comments in Burn Book that suggest that Kara Swisher may yet turn her considerable talents to more conventional law reform advocacy. She tells us that she has moved to Washington, DC and may pursue more Washington, DC type interests. She gives us a hint that she might focus more on the policy issues and law reform proposals that respond to the bad big tech behavior that she has chronicled. If Kara Swisher turns her attention to reform of government policy and law, her broad popularity and great journalistic skill may mean that many people will pay attention.
END
DOL’s final Retirement Security Rules protect investors by expanding
definition of "investment advisor fiduciary."
Tthe Department of Labor (DOL) has issued Retirement Security Rules.
Arnold and Porter issued a firm advisory on the rules, which can be found at https//www.arnoldporter.com/en/perspectives/advisories/2024/05/final-investment-advice-fiduciary-rule
The Retirement Security Rule expands the definition of “investment advice fiduciary” for purposes of the Employee Retirement Income Security Act of 1974 (ERISA), as amended, and the Internal Revenue Code (the Code), and tightens the responsibilities of investment advisor to their clients.
The AARP and allied groups are strong supporters of the rule, and urge Congressional support. AARP comments explain that
[It]is the less wealthy, often financially unsophisticated retirement savers who are most at risk when it comes to recommendations that are not in their best interests. Too often, those recommendations promote investment products with high costs, substandard features, elevated risks, or poor returns. While the financial adviser makes a substantial profit off these recommendations, the retirement saver pays a heavy price for investment advice that is not in their best interest, amounting to tens or even hundreds of thousands of dollars in lost retirement income. The cumulative harm to all American retirement savers from these conflicts of interest is tens of billions of dollars a year. Strengthening the protections for hard-working Americans who are saving for a financially secure and independent retirement is a key priority.
Any efforts to undermine these rules are misguided: all Members of Congress should support this commonsense and long overdue initiative.
definition of "investment advisor fiduciary."
Tthe Department of Labor (DOL) has issued Retirement Security Rules.
Arnold and Porter issued a firm advisory on the rules, which can be found at https//www.arnoldporter.com/en/perspectives/advisories/2024/05/final-investment-advice-fiduciary-rule
The Retirement Security Rule expands the definition of “investment advice fiduciary” for purposes of the Employee Retirement Income Security Act of 1974 (ERISA), as amended, and the Internal Revenue Code (the Code), and tightens the responsibilities of investment advisor to their clients.
The AARP and allied groups are strong supporters of the rule, and urge Congressional support. AARP comments explain that
[It]is the less wealthy, often financially unsophisticated retirement savers who are most at risk when it comes to recommendations that are not in their best interests. Too often, those recommendations promote investment products with high costs, substandard features, elevated risks, or poor returns. While the financial adviser makes a substantial profit off these recommendations, the retirement saver pays a heavy price for investment advice that is not in their best interest, amounting to tens or even hundreds of thousands of dollars in lost retirement income. The cumulative harm to all American retirement savers from these conflicts of interest is tens of billions of dollars a year. Strengthening the protections for hard-working Americans who are saving for a financially secure and independent retirement is a key priority.
Any efforts to undermine these rules are misguided: all Members of Congress should support this commonsense and long overdue initiative.
Tariffs against China – what do antitrust and competition have to do with it?
U.S. tariffs against China may in reality be only indirectly related to antitrust policies protecting competition, but political rhetoric suggests otherwise. The recent rhetoric from the White House is that the U.S. goal for tariffs is putting international trade on a fair and level competitive playing field. Tariffs on electric cars, for example, are presented primarily as a response to China’s unfair trade practices.
The recent White House Fact Sheet concerning President Biden’s position on tariffs focuses on the idea of fair competition: "American workers and businesses can outcompete anyone—as long as they have fair competition. But for too long, China’s government has used unfair, non-market practices. China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care—creating unacceptable risks to America’s supply chains and economic security."
The same statement links the goal of correcting China’s unfair trade practices to protection of American business and labor: "President Biden is taking action to protect American workers and American companies from China’s unfair trade practices. To encourage China to eliminate its unfair trade practices regarding technology transfer, intellectual property, and innovation, the President is directing increases in tariffs across strategic sectors such as steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products."
To the extent that the goal of tariffs is the pragmatic one of protecting American businesses and workers, it is a question whether tariffs are a good tool. Skeptical comment from the Council of Foreign Relations about the effects of tariffs suggests that "Firms that use domestic products as inputs see their purchasing power shrink, as tariffs allow domestic producers to raise prices. For example, as automakers pay more for steel, economists suggest they are likely to shed more workers than steel mills will hire. One study by economists at Harvard University and the University of California, Davis, found that U.S. jobs in steel-using industries outnumbered jobs in steel-producing industries by an eighty-to-one ratio."
Also, tariffs often lead to retaliatory tariffs. And, of course, tariffs effect consumers. Tariffs on electric cars will mean that electric cars will be more expensive, and fewer American consumers will buy them.
Is the Biden administration considering the pragmatic pros and cons of tariffs? Is it actually creating a fair paying field for competition? Is it playing politics with an eye to the election? We will see.
By Don Allen Resnikoff
U.S. tariffs against China may in reality be only indirectly related to antitrust policies protecting competition, but political rhetoric suggests otherwise. The recent rhetoric from the White House is that the U.S. goal for tariffs is putting international trade on a fair and level competitive playing field. Tariffs on electric cars, for example, are presented primarily as a response to China’s unfair trade practices.
The recent White House Fact Sheet concerning President Biden’s position on tariffs focuses on the idea of fair competition: "American workers and businesses can outcompete anyone—as long as they have fair competition. But for too long, China’s government has used unfair, non-market practices. China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care—creating unacceptable risks to America’s supply chains and economic security."
The same statement links the goal of correcting China’s unfair trade practices to protection of American business and labor: "President Biden is taking action to protect American workers and American companies from China’s unfair trade practices. To encourage China to eliminate its unfair trade practices regarding technology transfer, intellectual property, and innovation, the President is directing increases in tariffs across strategic sectors such as steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products."
To the extent that the goal of tariffs is the pragmatic one of protecting American businesses and workers, it is a question whether tariffs are a good tool. Skeptical comment from the Council of Foreign Relations about the effects of tariffs suggests that "Firms that use domestic products as inputs see their purchasing power shrink, as tariffs allow domestic producers to raise prices. For example, as automakers pay more for steel, economists suggest they are likely to shed more workers than steel mills will hire. One study by economists at Harvard University and the University of California, Davis, found that U.S. jobs in steel-using industries outnumbered jobs in steel-producing industries by an eighty-to-one ratio."
Also, tariffs often lead to retaliatory tariffs. And, of course, tariffs effect consumers. Tariffs on electric cars will mean that electric cars will be more expensive, and fewer American consumers will buy them.
Is the Biden administration considering the pragmatic pros and cons of tariffs? Is it actually creating a fair paying field for competition? Is it playing politics with an eye to the election? We will see.
By Don Allen Resnikoff
Steven Pearlstein on Lina Khan
Steven Pearlstein, the legendary business reporter for the Washington Post, has an opinion piece in praise of the FTC;s Lina Khan: https://www.washingtonpost.com/opinions/2024/05/14/lina-khan-antitrust-ftc/
Pearlstein makes the point that Khan is eager to proselytize the broader public about the importance of antitrust:
While most FTC chairs channel their energy into legal filings and remarks at antitrust conferences, Khan believes her success depends on connecting antitrust law to the daily lives of Americans. That’s why she joined Hollywood writers on the picket line, why she books appearances on “The Daily Show” and at South by Southwest, and visits law schools to proselytize about antitrust. It’s why she relishes the coming battle over recently announced regulations to outlaw “junk fees” routinely added to ticket prices and airfares, and “noncompete clauses” that prevent Jimmy John’s workers, for example, from taking a higher-paying job at another sandwich shop nearby. And it’s why Khan holds “listening sessions” outside Washington at which ordinary citizens can voice concerns about high-profile mergers.
Although shy by nature, Khan aims to use her star power to raise public awareness and replace the dry, technocratic language of antitrust with vocabulary that speaks to fairness, opportunity, and the unequal distribution of wealth and power. Khan’s bet is that the judges who interpret and ultimately enforce antitrust law will be less inclined to rule in favor of corporate giants if they are widely perceived as running roughshod over the rest of society.
I believe in bringing debates about competition policy to the broader public. It is fair to ask whether the Biden administration, and Biden himself, are vigorously carrying Lina Khan’s trust-busting message to the public. Yes, we have heard from President Biden on an all-of-government approach to antitrust and business regulation, and the President has supported Khan and the advocacy antitrust chief at USDOJ, Jonathan Kanter. But has he strongly advocated trust-busting?
New York Times reporting seems inclined to answer “yes” on the question of the Biden administration’s public vigor as antitrust enforcer:
President Biden has taken an aggressive approach to policing deals that some have called overreaching and others have lauded as a necessary return to scrutiny on the power wielded by big business. Dealmakers say they are holding some deals back in hope of a more lenient approach in the next administration.
https://www.nytimes.com/2024/02/17/business/dealbook/doha-mekki-biden-antitrust.html
Tim Wu has been more skeptical, and complains that the Biden administration should be less reticent in advocating government actions against very large companies:
The strongest case for a Presidential role in competition policy lies in addressing the antitrust democracy deficit best described by First and Waller. As Professor Jed Purdy has explained, the President is “a kind of democratic oracle, tasked with giving voice to the people’s power to redefine public life through democratic action.” According to this understanding of Presidential power, the government ought “step in and reshape economic life precisely where individuals were vulnerable and unable to share their own lives.” Outside of monetary policy (which is its own story), to have an entire category of major economic decisions affecting millions made in a secretive and technical manner is difficult to justify.
https://academic.oup.com/antitrust/article-abstract/11/2/300/7208039?redirectedFrom=fulltext
Recently the USDOJ sued Ticketmaster and Live Nation for antitrust violations, and AG Garland has spoken out strongly, pointing out the Biden
administrations strong commitment to antitrust enforcement. https://www.msn.com/en-sg/news/other/ag-merrick-garland-speaks-on-live-nation-s-monopoly-lawsuit/vi-BB1mVWPn Perhaps the USDOJ Ticketmaster/Live Nation case is a vehicle for the Biden administration to bring aggressive antitrust enforcement policies to the attention of the public.
Steven Pearlstein on Lina Khan
Steven Pearlstein, the legendary business reporter for the Washington Post, has an opinion piece in praise of the FTC;s Lina Khan: https://www.washingtonpost.com/opinions/2024/05/14/lina-khan-antitrust-ftc/
Pearlstein makes the point that Khan is eager to proselytize the broader public about the importance of antitrust:
While most FTC chairs channel their energy into legal filings and remarks at antitrust conferences, Khan believes her success depends on connecting antitrust law to the daily lives of Americans. That’s why she joined Hollywood writers on the picket line, why she books appearances on “The Daily Show” and at South by Southwest, and visits law schools to proselytize about antitrust. It’s why she relishes the coming battle over recently announced regulations to outlaw “junk fees” routinely added to ticket prices and airfares, and “noncompete clauses” that prevent Jimmy John’s workers, for example, from taking a higher-paying job at another sandwich shop nearby. And it’s why Khan holds “listening sessions” outside Washington at which ordinary citizens can voice concerns about high-profile mergers.
Although shy by nature, Khan aims to use her star power to raise public awareness and replace the dry, technocratic language of antitrust with vocabulary that speaks to fairness, opportunity, and the unequal distribution of wealth and power. Khan’s bet is that the judges who interpret and ultimately enforce antitrust law will be less inclined to rule in favor of corporate giants if they are widely perceived as running roughshod over the rest of society.
I believe in bringing debates about competition policy to the broader public. It is fair to ask whether the Biden administration, and Biden himself, are vigorously carrying Lina Khan’s trust-busting message to the public. Yes, we have heard from President Biden on an all-of-government approach to antitrust and business regulation, and the President has supported Khan and the advocacy antitrust chief at USDOJ, Jonathan Kanter. But has he strongly advocated trust-busting?
New York Times reporting seems inclined to answer “yes” on the question of the Biden administration’s public vigor as antitrust enforcer:
President Biden has taken an aggressive approach to policing deals that some have called overreaching and others have lauded as a necessary return to scrutiny on the power wielded by big business. Dealmakers say they are holding some deals back in hope of a more lenient approach in the next administration.
https://www.nytimes.com/2024/02/17/business/dealbook/doha-mekki-biden-antitrust.html
Tim Wu has been more skeptical, and complains that the Biden administration should be less reticent in advocating government actions against very large companies:
The strongest case for a Presidential role in competition policy lies in addressing the antitrust democracy deficit best described by First and Waller. As Professor Jed Purdy has explained, the President is “a kind of democratic oracle, tasked with giving voice to the people’s power to redefine public life through democratic action.” According to this understanding of Presidential power, the government ought “step in and reshape economic life precisely where individuals were vulnerable and unable to share their own lives.” Outside of monetary policy (which is its own story), to have an entire category of major economic decisions affecting millions made in a secretive and technical manner is difficult to justify.
https://academic.oup.com/antitrust/article-abstract/11/2/300/7208039?redirectedFrom=fulltext
Recently the USDOJ sued Ticketmaster and Live Nation for antitrust violations, and AG Garland has spoken out strongly, pointing out the Biden
administrations strong commitment to antitrust enforcement. https://www.msn.com/en-sg/news/other/ag-merrick-garland-speaks-on-live-nation-s-monopoly-lawsuit/vi-BB1mVWPn Perhaps the USDOJ Ticketmaster/Live Nation case is a vehicle for the Biden administration to bring aggressive antitrust enforcement policies to the attention of the public.
Maryland failed to inspect nursing homes for years
Montgomery County Commission on Aging
The Montgomery County Commission on Aging has been advocating for more accountability. Here is a brief update the Commission sent recently to our Montgomery County Council members to get everyone caught up on the issue.
Several years ago, the State of Maryland unexpectedly and without explanation did not
renew a decade-old Memorandum of Understanding (MoU) with Montgomery County
that authorized Montgomery County (MC) employees to conduct and be responsible for
all nursing home inspections in the county. The MoU expired on July 1, 2021, at which
time, the State Office of Health Care Quality (OHCQ) assumed all responsibility for
nursing facility inspections in MC.
Since then, annual inspections and on-site complaint investigations in the county’s 34
MC nursing facilities have been few and far between.
Until very recently (see below), OHCQ has failed to respond to the Commission on
Aging’s many requests for information on whether surveys and investigations were being
conducted in MC, as well as information on how OHCQ planned to meet its new
responsibilities in the absence of the MOU.
In May 2023, the Commission on Aging (CoA) wrote to the new Secretary of Health Laura
Herrera Scott about the lack of annual and complaint inspections of nursing facilities in
MC, the lack of transparency, and the failure of OHCQ to respond to the commission’s
inquiries. We did not receive a response to this letter and finally wrote again in February
2024, at which time, we received an immediate response.
On April 1, 2024 a video call that included the Secretary, key staff, MC officials, and
select CoA members was held. While nothing was decided at this meeting, the State
seemed amenable to re-instituting a partnership that would allow MC to conduct
inspections. It is important to note that the County no longer has a department to
perform this work and the previous inspectors are no longer available. The CoA is
uncertain of the County plans, but we are relieved that the State appears to be
interested and flexible. They have agreed to continue to work with Montgomery County
to improve the inspection process and to make their work more transparent.
However, in the meantime, nursing facility residents (who are a most
vulnerable population) remain at risk. It is critically important that County
Council members continue to monitor this issue and to work with all relevant
parties to find an immediate and appropriate resolution. It is imperative that
inspections of nursing facilities be re-instituted and regularly conducted. We
are aware that regardless of the ultimate solution—whether the County re-
assumes responsibility for the inspection process, or the inspection process
remains with the State, there will be a start-up delay of many months.
Therefore, this matter requires immediate attention.
Montgomery County Commission on Aging
The Montgomery County Commission on Aging has been advocating for more accountability. Here is a brief update the Commission sent recently to our Montgomery County Council members to get everyone caught up on the issue.
Several years ago, the State of Maryland unexpectedly and without explanation did not
renew a decade-old Memorandum of Understanding (MoU) with Montgomery County
that authorized Montgomery County (MC) employees to conduct and be responsible for
all nursing home inspections in the county. The MoU expired on July 1, 2021, at which
time, the State Office of Health Care Quality (OHCQ) assumed all responsibility for
nursing facility inspections in MC.
Since then, annual inspections and on-site complaint investigations in the county’s 34
MC nursing facilities have been few and far between.
Until very recently (see below), OHCQ has failed to respond to the Commission on
Aging’s many requests for information on whether surveys and investigations were being
conducted in MC, as well as information on how OHCQ planned to meet its new
responsibilities in the absence of the MOU.
In May 2023, the Commission on Aging (CoA) wrote to the new Secretary of Health Laura
Herrera Scott about the lack of annual and complaint inspections of nursing facilities in
MC, the lack of transparency, and the failure of OHCQ to respond to the commission’s
inquiries. We did not receive a response to this letter and finally wrote again in February
2024, at which time, we received an immediate response.
On April 1, 2024 a video call that included the Secretary, key staff, MC officials, and
select CoA members was held. While nothing was decided at this meeting, the State
seemed amenable to re-instituting a partnership that would allow MC to conduct
inspections. It is important to note that the County no longer has a department to
perform this work and the previous inspectors are no longer available. The CoA is
uncertain of the County plans, but we are relieved that the State appears to be
interested and flexible. They have agreed to continue to work with Montgomery County
to improve the inspection process and to make their work more transparent.
However, in the meantime, nursing facility residents (who are a most
vulnerable population) remain at risk. It is critically important that County
Council members continue to monitor this issue and to work with all relevant
parties to find an immediate and appropriate resolution. It is imperative that
inspections of nursing facilities be re-instituted and regularly conducted. We
are aware that regardless of the ultimate solution—whether the County re-
assumes responsibility for the inspection process, or the inspection process
remains with the State, there will be a start-up delay of many months.
Therefore, this matter requires immediate attention.
CFPB Report Highlights Consumer Frustrations with Credit Card Rewards Programs
Consumers report losing benefits to devaluation, limited redemption opportunities, and vague or hidden terms and conditions
MAY 09, 2024
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) issued a new report finding consumers encounter numerous problems with credit card rewards programs. Consumers tell the CFPB that rewards are often devalued or denied even after program terms are met. Credit card companies focus marketing efforts on rewards, like cash back and travel, instead of on low interest rates and fees. Consumers who carry revolving balances often pay far more in interest and fees than they get back on rewards. Credit card companies often use rewards programs as a “bait and switch” by burying terms in vague language or fine print and changing the value of rewards after people sign up and earn them. New problems have been created by the growth of co-brand credit cards and rewards programs where consumers can transfer miles or points to merchants.
DAR Note: The CFPB report followed a CFPB hearing, in which DCCRC's Tracy Rezvani participated.
Consumers report losing benefits to devaluation, limited redemption opportunities, and vague or hidden terms and conditions
MAY 09, 2024
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) issued a new report finding consumers encounter numerous problems with credit card rewards programs. Consumers tell the CFPB that rewards are often devalued or denied even after program terms are met. Credit card companies focus marketing efforts on rewards, like cash back and travel, instead of on low interest rates and fees. Consumers who carry revolving balances often pay far more in interest and fees than they get back on rewards. Credit card companies often use rewards programs as a “bait and switch” by burying terms in vague language or fine print and changing the value of rewards after people sign up and earn them. New problems have been created by the growth of co-brand credit cards and rewards programs where consumers can transfer miles or points to merchants.
DAR Note: The CFPB report followed a CFPB hearing, in which DCCRC's Tracy Rezvani participated.
From Claire Kelloway, Food & Power:
Chicken Farmers’ Antitrust Suit Clears Hurdle, Poultry Growers Receive Class Certification
After more than seven years of litigation, contract poultry growers just got one step closer to prevailing justice last week. A federal judge granted farmers’ motion for class certification in an antitrust suit that alleges chicken companies conspired together to suppress their pay. This represents a major step forward for the poultry growers’ case and a broader triumph for efforts to challenge corporate wage-fixing.
A group of poultry farmers allege that 21 companies representing 98% of U.S. chicken production colluded together to hold down their wages by sharing detailed information about farmer pay and agreeing not to poach or recruit growers from one another. This alleged conspiracy made it harder for growers to switch between chicken companies to obtain higher pay or better contract terms. It also allegedly allowed companies to monitor their competitors’ compensation and ensure a consistent, lower pay rate across the industry. The third-party information-sharing service in question, Agri Stats, has been embroiled in several private and federal antitrust suits.
Chicken Farmers’ Antitrust Suit Clears Hurdle, Poultry Growers Receive Class Certification
After more than seven years of litigation, contract poultry growers just got one step closer to prevailing justice last week. A federal judge granted farmers’ motion for class certification in an antitrust suit that alleges chicken companies conspired together to suppress their pay. This represents a major step forward for the poultry growers’ case and a broader triumph for efforts to challenge corporate wage-fixing.
A group of poultry farmers allege that 21 companies representing 98% of U.S. chicken production colluded together to hold down their wages by sharing detailed information about farmer pay and agreeing not to poach or recruit growers from one another. This alleged conspiracy made it harder for growers to switch between chicken companies to obtain higher pay or better contract terms. It also allegedly allowed companies to monitor their competitors’ compensation and ensure a consistent, lower pay rate across the industry. The third-party information-sharing service in question, Agri Stats, has been embroiled in several private and federal antitrust suits.
Public agencies can be held liable for frivolous lawsuits, at least in New Jersey
In a recent case, the Appellate Division in New Jersey settled the issue of whether a public entity is immune from sanctions for filing a frivolous lawsuit. The case involved the Borough of Englewood Cliffs v. Trautner1. Here are the key points:
In summary, public agencies are not automatically immune from sanctions related to frivolous lawsuits. The specific circumstances and legal context play a crucial role in determining liability1. This discussion is based on New Jersey law, and the rules may vary in other jurisdictions.
By Don Allen Resnikoff aided by Bing AI
In a recent case, the Appellate Division in New Jersey settled the issue of whether a public entity is immune from sanctions for filing a frivolous lawsuit. The case involved the Borough of Englewood Cliffs v. Trautner1. Here are the key points:
- The Borough of Englewood Cliffs retained legal representation for affordable housing litigation.
- After the matter was settled, the newly constituted Borough Council sued the attorneys alleging professional malpractice, breach of contract, and other claims.
- The attorneys demanded that the lawsuit be voluntarily dismissed because it was frivolous.
- The trial court granted the attorneys’ motion to dismiss the Borough’s complaint with prejudice.
- The issue was whether a public entity (like the Borough) is immune from frivolous litigation sanctions.
In summary, public agencies are not automatically immune from sanctions related to frivolous lawsuits. The specific circumstances and legal context play a crucial role in determining liability1. This discussion is based on New Jersey law, and the rules may vary in other jurisdictions.
By Don Allen Resnikoff aided by Bing AI
Live Nation Slapped with $5 Billion Consumer Class Action Lawsuit Following DOJ Case — Potentially the First of Many Ashley King
May 28, 2024
Photo Credit: Filip Andrejevic
Live Nation and Ticketmaster have been hit with a $5 billion consumer class action lawsuit in the wake of the DOJ lawsuit to break up the two companies.In the first lawsuit against Live Nation and Ticketmaster since the US Justice Department sued to break up the two companies last week, a consumer class action lawsuit was filed against the conglomerate in Manhattan federal court on Thursday. The case is seeking $5 billion in damage on behalf of millions of ticket buyers.
Both the class action lawsuit and the DOJ’s filing accuse Live Nation of monopolizing the live events industry by forcing out its rivals and threatening venues that work with Ticketmaster competitors. The class action could be the first of many against Live Nation and Ticketmaster to ride the wave of the government’s case against the companies.
On Friday, the case was assigned to US District Judge Arun Subramanian, appointed to the court by President Biden last year after having represented plaintiffs in antitrust lawsuits at law firm Susman Godfrey. The class action plaintiffs are represented by attorneys at Israel David and Robbins Geller Rudman & Dowd.
Though the Justice Department’s new case against Live Nation not entirely dissimilar to its 2010 case addressing the company’s merger with Ticketmaster, the DOJ stresses that the previous case involved a different antitrust law — Live Nation has since shown “more expansive forms of anti-competitive conduct.”Live Nation has called the government’s lawsuit “baseless,” asserting that the live events market has “more competition than ever.” Lawyers not involved in the case but who have reviewed the government filing said Live Nation could partially base its defense on the fact the Justice Department agreed to sign off on the company’s acquisition of Ticketmaster in the first place.
But since the government’s signing off on the merger required the companies to adhere to a previously agreed upon set of guidelines, Live Nation’s failure to do so seems like reasonable grounds for legal action. That said, antitrust lawyers such as Eric Enson from Crowell & Moring, who is not involved in the lawsuit, said the government’s case raises “legal and factual questions about whether a breakup is a legally permissible remedy.”
Legal representation for the class action plaintiffs have not immediately responded to media requests for comment.
May 28, 2024
Photo Credit: Filip Andrejevic
Live Nation and Ticketmaster have been hit with a $5 billion consumer class action lawsuit in the wake of the DOJ lawsuit to break up the two companies.In the first lawsuit against Live Nation and Ticketmaster since the US Justice Department sued to break up the two companies last week, a consumer class action lawsuit was filed against the conglomerate in Manhattan federal court on Thursday. The case is seeking $5 billion in damage on behalf of millions of ticket buyers.
Both the class action lawsuit and the DOJ’s filing accuse Live Nation of monopolizing the live events industry by forcing out its rivals and threatening venues that work with Ticketmaster competitors. The class action could be the first of many against Live Nation and Ticketmaster to ride the wave of the government’s case against the companies.
On Friday, the case was assigned to US District Judge Arun Subramanian, appointed to the court by President Biden last year after having represented plaintiffs in antitrust lawsuits at law firm Susman Godfrey. The class action plaintiffs are represented by attorneys at Israel David and Robbins Geller Rudman & Dowd.
Though the Justice Department’s new case against Live Nation not entirely dissimilar to its 2010 case addressing the company’s merger with Ticketmaster, the DOJ stresses that the previous case involved a different antitrust law — Live Nation has since shown “more expansive forms of anti-competitive conduct.”Live Nation has called the government’s lawsuit “baseless,” asserting that the live events market has “more competition than ever.” Lawyers not involved in the case but who have reviewed the government filing said Live Nation could partially base its defense on the fact the Justice Department agreed to sign off on the company’s acquisition of Ticketmaster in the first place.
But since the government’s signing off on the merger required the companies to adhere to a previously agreed upon set of guidelines, Live Nation’s failure to do so seems like reasonable grounds for legal action. That said, antitrust lawyers such as Eric Enson from Crowell & Moring, who is not involved in the lawsuit, said the government’s case raises “legal and factual questions about whether a breakup is a legally permissible remedy.”
Legal representation for the class action plaintiffs have not immediately responded to media requests for comment.
FROM DMN
House of Representatives Pass the TICKET Act, Banning Hidden Pricing and Deceptive Ticketing Practices — Fix the Tix Coalition, NIVA, Recording Academy Commend the Move
Ashley King
May 15, 2024
Fresh off the House of Representatives passing the TICKET Act, banning hidden pricing and deceptive ticketing practices, the Fix the Tix Coalition and NIVA applaud the move and urge the Senate to follow suit.No sooner had the House of Representatives passed the landmark TICKET Act to ban hidden pricing and deceptive ticketing practices in the US than industry organizations and figureheads began commending the move.
The bill’s passing marks a crucial step toward improving ticketing transparency by requiring ticket sellers to clearly disclose the sale price at the beginning of the transaction, prior to the selection of a ticket, and to provide an itemized list of the base ticket price and its fees.
Organizations including the Fix the Tix Coalition and the National Independent Venue Association (NIVA) have released statements applauding the House’s move, urging the Senate to further enhance measures like the TICKET Act by passing the Fans First Act. This bill includes additional provisions to protect consumers from deceptive websites and bots.
“The Fix the Tix Coalition and the National Independent Venue Association commend the US House of Representatives and House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Ranking Member Frank Pallone (D-NJ), Subcommittee Chair Gus Bilirakis (R-FL), and Subcommittee Ranking Member Jan Schakowsky (D-IL), as well as Representatives Kelly Armstrong (R-ND) and Lisa Blunt Rochester (D-DE) for working to strengthen and pass H.R. 3950, the TICKET Act. This progress is crucial and we applaud it,” the two organizations wrote in a joint statement.
“We now call on the Senate to pass S. 3457, the Fans First Act, which builds on the TICKET Act by including additional provisions to wholly ban speculative, or fake, tickets, to ensure that deceptive imagery on websites does not trick consumers, to increase mandatory reporting of illegal bots to obtain tickets, to require clear and conspicuous itemization of the ticket price and fees at the beginning of the transaction, and to provide meaningful enforcement of these provisions,” their statement continues.
“We commend House passage of H.R. 3950, the TICKET Act, which will help to improve the ticket buying experience for fans, to protect the livelihoods of artists, and to preserve independent venues across the nation,” says Stephen Parker, Executive Director of the National Independent Venue Association.“Not only has the US House of Representatives moved to protect consumers from predatory and deceptive ticketing practices, but states across the country, including Arizona, Maryland, Minnesota, and Nevada, have recently banned, without exception, speculative tickets on a bipartisan basis,” continues Parker. “We call on Congress to do the same, to build on the TICKET Act and adopt strong, enforceable, and comprehensive ticketing reform legislation like the Fans First Act.”
“Eventbrite celebrates the resounding House passage of live event ticketing reform and commends bill sponsors and committee leadership for strengthening the legislation before passing it,” says Julia Hartz, Co-Founder and Chief Executive Officer of Eventbrite, and Fix the Tix Steering Committee Member. “Now, it’s the Senate’s turn to build upon this progress for consumers and fans by passing the bipartisan and comprehensive Fans First Act (S. 3457) as soon as possible.”
Harvey Mason Jr., Recording Academy CEO, concludes: “Today’s passage of the TICKET Act by the House of Representatives marks a significant step forward toward improving the concert ticket marketplace. The TICKET Act was a key focus of Grammys on the Hill two weeks ago, and the Recording Academy thanks our Congressional leaders for bringing the bill to a vote shortly after meeting with Academy members.”
“We now urge the Senate to act quickly to incorporate the strong provisions contained in the Fans First Act and move a comprehensive ticket reform package that will provide transparency and protect artists and their fans,” adds Mason.
House of Representatives Pass the TICKET Act, Banning Hidden Pricing and Deceptive Ticketing Practices — Fix the Tix Coalition, NIVA, Recording Academy Commend the Move
Ashley King
May 15, 2024
Fresh off the House of Representatives passing the TICKET Act, banning hidden pricing and deceptive ticketing practices, the Fix the Tix Coalition and NIVA applaud the move and urge the Senate to follow suit.No sooner had the House of Representatives passed the landmark TICKET Act to ban hidden pricing and deceptive ticketing practices in the US than industry organizations and figureheads began commending the move.
The bill’s passing marks a crucial step toward improving ticketing transparency by requiring ticket sellers to clearly disclose the sale price at the beginning of the transaction, prior to the selection of a ticket, and to provide an itemized list of the base ticket price and its fees.
Organizations including the Fix the Tix Coalition and the National Independent Venue Association (NIVA) have released statements applauding the House’s move, urging the Senate to further enhance measures like the TICKET Act by passing the Fans First Act. This bill includes additional provisions to protect consumers from deceptive websites and bots.
“The Fix the Tix Coalition and the National Independent Venue Association commend the US House of Representatives and House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Ranking Member Frank Pallone (D-NJ), Subcommittee Chair Gus Bilirakis (R-FL), and Subcommittee Ranking Member Jan Schakowsky (D-IL), as well as Representatives Kelly Armstrong (R-ND) and Lisa Blunt Rochester (D-DE) for working to strengthen and pass H.R. 3950, the TICKET Act. This progress is crucial and we applaud it,” the two organizations wrote in a joint statement.
“We now call on the Senate to pass S. 3457, the Fans First Act, which builds on the TICKET Act by including additional provisions to wholly ban speculative, or fake, tickets, to ensure that deceptive imagery on websites does not trick consumers, to increase mandatory reporting of illegal bots to obtain tickets, to require clear and conspicuous itemization of the ticket price and fees at the beginning of the transaction, and to provide meaningful enforcement of these provisions,” their statement continues.
“We commend House passage of H.R. 3950, the TICKET Act, which will help to improve the ticket buying experience for fans, to protect the livelihoods of artists, and to preserve independent venues across the nation,” says Stephen Parker, Executive Director of the National Independent Venue Association.“Not only has the US House of Representatives moved to protect consumers from predatory and deceptive ticketing practices, but states across the country, including Arizona, Maryland, Minnesota, and Nevada, have recently banned, without exception, speculative tickets on a bipartisan basis,” continues Parker. “We call on Congress to do the same, to build on the TICKET Act and adopt strong, enforceable, and comprehensive ticketing reform legislation like the Fans First Act.”
“Eventbrite celebrates the resounding House passage of live event ticketing reform and commends bill sponsors and committee leadership for strengthening the legislation before passing it,” says Julia Hartz, Co-Founder and Chief Executive Officer of Eventbrite, and Fix the Tix Steering Committee Member. “Now, it’s the Senate’s turn to build upon this progress for consumers and fans by passing the bipartisan and comprehensive Fans First Act (S. 3457) as soon as possible.”
Harvey Mason Jr., Recording Academy CEO, concludes: “Today’s passage of the TICKET Act by the House of Representatives marks a significant step forward toward improving the concert ticket marketplace. The TICKET Act was a key focus of Grammys on the Hill two weeks ago, and the Recording Academy thanks our Congressional leaders for bringing the bill to a vote shortly after meeting with Academy members.”
“We now urge the Senate to act quickly to incorporate the strong provisions contained in the Fans First Act and move a comprehensive ticket reform package that will provide transparency and protect artists and their fans,” adds Mason.
Key Bridge collapse could have been avoided by updating protective structures
The catastrophic collapse of the Francis Scott Key Bridge in Baltimore has raised questions about how such disasters can be prevented, and whether protective structures near the Key bridge should have been updated. While it’s impossible to design a bridge to directly withstand the immense impact of a gargantuan cargo ship, there are ingenious protective measures that could have been employed to safeguard the Key Bridge structure.
Credit: fastcompany.com and Bing AI
The catastrophic collapse of the Francis Scott Key Bridge in Baltimore has raised questions about how such disasters can be prevented, and whether protective structures near the Key bridge should have been updated. While it’s impossible to design a bridge to directly withstand the immense impact of a gargantuan cargo ship, there are ingenious protective measures that could have been employed to safeguard the Key Bridge structure.
- Dolphins: These are large circular walls filled with materials like sand or concrete. Dolphins act as sacrificial structures surrounding the perimeter of a bridge’s pillars. When a ship collides with the bridge, the dolphins absorb the energy of the impact, shielding the bridge’s columns. For instance, the Puente de la Constitución of 1812 in Spain features four dolphins designed to address accidental ship impacts. Each dolphin consists of 10 vertical piles, 5 feet in diameter, anchored to a depth of 30 meters1.
- Artificial Islands: Another approach, seen on New York City’s Verrazzano-Narrows Bridge, involves placing a bridge’s support piers on artificial islands made from massive rocks and concrete walls. These islands serve as protective barriers around the piers, absorbing the energy from potential vessel collisions1.
Credit: fastcompany.com and Bing AI
https://youtu.be/Tz556HZ3UVA
Excerpts from The Baltimore Banner on Key Bridge collapse: Transportation Secretary Pete Buttigieg says he “didn’t know any bridge built to withstand impact” from a container ship like the Dali, but engineering experts question whether catastrophic collapse of Key Bridge could have been prevented.
In the early hours of Tuesday morning, a massive container ship struck the Key Bridge, causing the structure to collapse in moments. But could it have been prevented?
Engineering experts told The Baltimore Banner that this will be the main question for investigators in the wake of the tragedy and raised similar concerns about what little we know about the 47-year-old bridge and its subsequent collapse so far.
Abi Aghayere, a professor of structural engineering at Drexel University, said his first reaction to seeing footage of the disaster was to wonder whether the bridge was designed to resist the massive force that would be generated by impact from a container ship, even traveling at low speeds.
Given that the four-lane bridge was constructed half a century ago, Aghayere questioned whether the original design took into account that the ships, which have grown considerably in size since then, would be maneuvering so close to the piers.
“If they didn’t design for that, why was there not a protection system like a bumper system around the piers to at least stop any vessel from going straight into hitting the bridge?” Aghayere asked.
He added that U.S. code for bridge construction considers that very possibility, and it’s something engineers always assess when designing bridges, but that it’s unclear when this design was last revisited.
Transportation Secretary Pete Buttigieg said he “didn’t know any bridge built to withstand impact” from a container ship like the Dali.
Aghayere said that if a bridge can’t be designed to do that, it should be reconfigured, such as moving bridge piers into shallower water where ships don’t travel, which might require a longer span.
“It’s one thing to say no bridge could be designed to resist these forces, but if you have vessels moving around there, the likelihood that this is going to happen is high,” he said. “It’s going to happen.”.
* * *
R. Shankar Nair, a civil engineering expert, said it was too early to form a strong opinion on the root cause of the collapse, but questioned whether the bridge was adequately safeguarded.
”As a matter of principle, when there is a bridge pier in a shipping channel we should expect the bridge to be strong enough to withstand impact or to be protected from impact,” Nair said. “From the result, we know that wasn’t the case here.”
Khalid M. Mosalam, a structural engineer and professor of civil engineering at the University of California, Berkeley, said the Key Bridge was designed as a steel, continuous truss bridge that, by design, “heavily relies on the integrity of its supports.”
In watching video of the collapse frame by frame, Mosalam said, he could clearly see where the ship hits one of the pillars, causing the span on the west to collapse first, followed by the collapse of the main span.
”As dramatic as this seems, it’s not a surprise to me to see a loss of a support of a continuous truss bridge like that lead to its overall collapse,” Mosalam said. He questioned the size of the bridge columns, which to him “didn’t seem big enough to take such an impact.”
”Certainly, if this pillar was bigger than what it was, to take such a massive impact, it would have survived, and that collapse wouldn’t have happened,” Mosalam said. Having said that, he said, the hit from the ship “might have been so excessive that a reasonable increase in the size of the columns still wouldn’t have been able to survive.”
”As unfortunate as it is, we will learn from it,” Mosalam said.
Rachel Sangree, an associate teaching professor in the civil and systems engineering department of the Johns Hopkins University, teaches a bridge design class focused on superstructures. She said the three-span continuous steel truss bridge is “an efficient way to build a bridge,” but the cargo ship struck it at one of the “worst possible locations.”
That means if something happens to one span, it can impact all of them, she said. ”There’s always a cost tradeoff. We can’t make a structure that’s 100% indestructible for environmental reasons and reasons of natural resources, but we do need to make sure that they’re safe.”
* * *
Ship collisions are rare, but they are not without historical precedent. There have been about 40 recorded events in the past 65 years, said Sherif El-Tawil, the Antoine E. Naaman Collegiate Professor of Civil and Environmental Engineering at the University of Michigan. He pointed to the Sunshine Skyway Bridge collapse in Tampa Bay, Florida, in 1980, which caused 35 deaths and led to the development of ship collision specifications for bridges.
“The ship collision guidelines came into effect in the early 1990s so they were too late in this case,” El-Tawil said in an email.
He noted that the bridge appeared to lack a “protection system,” which could have protected the bridge and the ship from damage in the event of a crash. This could have been created, for example, in the form of an artificial island, a pile embedded to the river’s floor or a fender attached to the pier system.
“I suspect that the cost of a protection system would likely be extremely high and is likely the reason it was not implemented,” he said.
The state of Maryland has more than 5,000 bridges, with more than 2,000 under the purview of the Maryland State Highway Administration. Of those, about 1% are rated “poor,” according to the state, and the number of “poor” bridges has fallen from 143 in 2006 to 26 in 2022.
The Key Bridge does not fall under the jurisdiction of the MSHA; it is maintained by the Maryland Transportation Authority, or MDTA.
In a review of assets by the Maryland Department of Transportation in 2021, it noted that the MDTA performs inspections on its bridges at least once every two years. Of its 326 bridges, 73% were given a “fair” grade, and 27% were listed as “good,” according to the department’s asset management plan.
The Banner has not immediately been able to review bridge inspection records.
After the deadly Interstate 35W bridge collapse in Minneapolis in 2007, then-Maryland Gov. Martin O’Malley’s administration declared all Maryland bridges “safe” and said that maintaining bridge safety ranked first among the state’s funding priorities.
According to a news release at the time, the state reported that major crossings in Maryland such as the Key Bridge and the Chesapeake Bay Bridge were inspected annually. The Federal Highway Administration’s annual audits of the state’s bridge inspection program consistently earned “excellent” scores, according to the state.
Baltimore Banner reporters Brenda Wintrode and Justin Fenton contributed to this report.
The full Baltimore Banner article is at https://www.thebaltimorebanner.com/community/transportation/baltimore-key-bridge-design-engineering-MZ6H4HUQOJGKRES3AYKGJZEXNI/
In the early hours of Tuesday morning, a massive container ship struck the Key Bridge, causing the structure to collapse in moments. But could it have been prevented?
Engineering experts told The Baltimore Banner that this will be the main question for investigators in the wake of the tragedy and raised similar concerns about what little we know about the 47-year-old bridge and its subsequent collapse so far.
Abi Aghayere, a professor of structural engineering at Drexel University, said his first reaction to seeing footage of the disaster was to wonder whether the bridge was designed to resist the massive force that would be generated by impact from a container ship, even traveling at low speeds.
Given that the four-lane bridge was constructed half a century ago, Aghayere questioned whether the original design took into account that the ships, which have grown considerably in size since then, would be maneuvering so close to the piers.
“If they didn’t design for that, why was there not a protection system like a bumper system around the piers to at least stop any vessel from going straight into hitting the bridge?” Aghayere asked.
He added that U.S. code for bridge construction considers that very possibility, and it’s something engineers always assess when designing bridges, but that it’s unclear when this design was last revisited.
Transportation Secretary Pete Buttigieg said he “didn’t know any bridge built to withstand impact” from a container ship like the Dali.
Aghayere said that if a bridge can’t be designed to do that, it should be reconfigured, such as moving bridge piers into shallower water where ships don’t travel, which might require a longer span.
“It’s one thing to say no bridge could be designed to resist these forces, but if you have vessels moving around there, the likelihood that this is going to happen is high,” he said. “It’s going to happen.”.
* * *
R. Shankar Nair, a civil engineering expert, said it was too early to form a strong opinion on the root cause of the collapse, but questioned whether the bridge was adequately safeguarded.
”As a matter of principle, when there is a bridge pier in a shipping channel we should expect the bridge to be strong enough to withstand impact or to be protected from impact,” Nair said. “From the result, we know that wasn’t the case here.”
Khalid M. Mosalam, a structural engineer and professor of civil engineering at the University of California, Berkeley, said the Key Bridge was designed as a steel, continuous truss bridge that, by design, “heavily relies on the integrity of its supports.”
In watching video of the collapse frame by frame, Mosalam said, he could clearly see where the ship hits one of the pillars, causing the span on the west to collapse first, followed by the collapse of the main span.
”As dramatic as this seems, it’s not a surprise to me to see a loss of a support of a continuous truss bridge like that lead to its overall collapse,” Mosalam said. He questioned the size of the bridge columns, which to him “didn’t seem big enough to take such an impact.”
”Certainly, if this pillar was bigger than what it was, to take such a massive impact, it would have survived, and that collapse wouldn’t have happened,” Mosalam said. Having said that, he said, the hit from the ship “might have been so excessive that a reasonable increase in the size of the columns still wouldn’t have been able to survive.”
”As unfortunate as it is, we will learn from it,” Mosalam said.
Rachel Sangree, an associate teaching professor in the civil and systems engineering department of the Johns Hopkins University, teaches a bridge design class focused on superstructures. She said the three-span continuous steel truss bridge is “an efficient way to build a bridge,” but the cargo ship struck it at one of the “worst possible locations.”
That means if something happens to one span, it can impact all of them, she said. ”There’s always a cost tradeoff. We can’t make a structure that’s 100% indestructible for environmental reasons and reasons of natural resources, but we do need to make sure that they’re safe.”
* * *
Ship collisions are rare, but they are not without historical precedent. There have been about 40 recorded events in the past 65 years, said Sherif El-Tawil, the Antoine E. Naaman Collegiate Professor of Civil and Environmental Engineering at the University of Michigan. He pointed to the Sunshine Skyway Bridge collapse in Tampa Bay, Florida, in 1980, which caused 35 deaths and led to the development of ship collision specifications for bridges.
“The ship collision guidelines came into effect in the early 1990s so they were too late in this case,” El-Tawil said in an email.
He noted that the bridge appeared to lack a “protection system,” which could have protected the bridge and the ship from damage in the event of a crash. This could have been created, for example, in the form of an artificial island, a pile embedded to the river’s floor or a fender attached to the pier system.
“I suspect that the cost of a protection system would likely be extremely high and is likely the reason it was not implemented,” he said.
The state of Maryland has more than 5,000 bridges, with more than 2,000 under the purview of the Maryland State Highway Administration. Of those, about 1% are rated “poor,” according to the state, and the number of “poor” bridges has fallen from 143 in 2006 to 26 in 2022.
The Key Bridge does not fall under the jurisdiction of the MSHA; it is maintained by the Maryland Transportation Authority, or MDTA.
In a review of assets by the Maryland Department of Transportation in 2021, it noted that the MDTA performs inspections on its bridges at least once every two years. Of its 326 bridges, 73% were given a “fair” grade, and 27% were listed as “good,” according to the department’s asset management plan.
The Banner has not immediately been able to review bridge inspection records.
After the deadly Interstate 35W bridge collapse in Minneapolis in 2007, then-Maryland Gov. Martin O’Malley’s administration declared all Maryland bridges “safe” and said that maintaining bridge safety ranked first among the state’s funding priorities.
According to a news release at the time, the state reported that major crossings in Maryland such as the Key Bridge and the Chesapeake Bay Bridge were inspected annually. The Federal Highway Administration’s annual audits of the state’s bridge inspection program consistently earned “excellent” scores, according to the state.
Baltimore Banner reporters Brenda Wintrode and Justin Fenton contributed to this report.
The full Baltimore Banner article is at https://www.thebaltimorebanner.com/community/transportation/baltimore-key-bridge-design-engineering-MZ6H4HUQOJGKRES3AYKGJZEXNI/
The ELVIS Act Has Officially Been Signed Into Law — First State-Level AI Legislation In the US
Ashley King at https://www.digitalmusicnews.com/author/aking/
March 21, 2024
Tennessee passes the ELVIS Act, becoming a nation leader in voice and likeness protections in the AI era.
Just weeks after its introduction on January 10, the bipartisan Ensuring Likeness Voice and Image Security (ELVIS) Act was signed into state law on March 21 by Tennessee Governor Bill Lee in Nashville, furthering the state’s leadership as an advocate for creatives’ rights. The ELVIS Act establishes strong protections for individual voice and likeness against unauthorized artificial intelligence-derived deep fakes and voice clones.
State Senate Majority Leader Jack Johnson (R-27) and House Majority Leader William Lamberth (R-44) presented the ELVIS Act to unanimous General Assembly passage with a 93-0 vote in the House and 30-0 in the Senate. Throughout the legislation’s process, country guitarist Lindsay Ell, vocalist Natalie Grant, Evanescence co-founder David Hodges, Contemporary Christian artist Matt Maher, singer Chrissy Metz, songwriter Jamie Moore, RIAA SVP of Public Policy Jessie Richard, and Christian artist Michael W. Smith helped lobby for support, speaking to the potential harms of unchecked AI deep fakes and voice clones.
“Fittingly named after one of the world’s most iconic voices, the ELVIS Act marks a history-defining moment — protecting us all from irresponsible and unethical AI. The Human Artistry Campaign applauds this strong, bipartisan effort to stop unauthorized AI-generated deep fakes and voice clones that steal essential parts of our individuality,” said Dr. Moiya McTier, Human Artistry Campaign Senior Advisor.
“The life’s work and irreplaceable contributions of the creative community to our culture deserve safeguards that allow AI technology to be used responsibly without violating anyone’s rights or appropriating their art.”
“From Beale Street to Broadway, to Bristol and beyond, Tennessee is known for our rich artistic heritage that tells the story of our great state. As the technology landscape evolves with artificial intelligence, I thank the General Assembly for its partnership in creating legal protection for our best-in-class artists and songwriters,” said Governor Bill Lee.
“The Recording Academy celebrates the passage of the ELVIS Act as a groundbreaking achievement in the effort to protect human creators in the age of AI. This milestone represents the power of collaboration, and it was a privilege to work with our partners in the Human Artistry Campaign, Governor Lee, and the Tennessee state legislature to move the ELVIS Act forward,” concluded Recording Academy CEO Harvey Mason Jr.“Today is just the beginning — as AI continues to develop, the Recording Academy and our members will continue to support meaningful legislation across the country that uplifts music people and human creativity.”
Ashley King at https://www.digitalmusicnews.com/author/aking/
March 21, 2024
Tennessee passes the ELVIS Act, becoming a nation leader in voice and likeness protections in the AI era.
Just weeks after its introduction on January 10, the bipartisan Ensuring Likeness Voice and Image Security (ELVIS) Act was signed into state law on March 21 by Tennessee Governor Bill Lee in Nashville, furthering the state’s leadership as an advocate for creatives’ rights. The ELVIS Act establishes strong protections for individual voice and likeness against unauthorized artificial intelligence-derived deep fakes and voice clones.
State Senate Majority Leader Jack Johnson (R-27) and House Majority Leader William Lamberth (R-44) presented the ELVIS Act to unanimous General Assembly passage with a 93-0 vote in the House and 30-0 in the Senate. Throughout the legislation’s process, country guitarist Lindsay Ell, vocalist Natalie Grant, Evanescence co-founder David Hodges, Contemporary Christian artist Matt Maher, singer Chrissy Metz, songwriter Jamie Moore, RIAA SVP of Public Policy Jessie Richard, and Christian artist Michael W. Smith helped lobby for support, speaking to the potential harms of unchecked AI deep fakes and voice clones.
“Fittingly named after one of the world’s most iconic voices, the ELVIS Act marks a history-defining moment — protecting us all from irresponsible and unethical AI. The Human Artistry Campaign applauds this strong, bipartisan effort to stop unauthorized AI-generated deep fakes and voice clones that steal essential parts of our individuality,” said Dr. Moiya McTier, Human Artistry Campaign Senior Advisor.
“The life’s work and irreplaceable contributions of the creative community to our culture deserve safeguards that allow AI technology to be used responsibly without violating anyone’s rights or appropriating their art.”
“From Beale Street to Broadway, to Bristol and beyond, Tennessee is known for our rich artistic heritage that tells the story of our great state. As the technology landscape evolves with artificial intelligence, I thank the General Assembly for its partnership in creating legal protection for our best-in-class artists and songwriters,” said Governor Bill Lee.
“The Recording Academy celebrates the passage of the ELVIS Act as a groundbreaking achievement in the effort to protect human creators in the age of AI. This milestone represents the power of collaboration, and it was a privilege to work with our partners in the Human Artistry Campaign, Governor Lee, and the Tennessee state legislature to move the ELVIS Act forward,” concluded Recording Academy CEO Harvey Mason Jr.“Today is just the beginning — as AI continues to develop, the Recording Academy and our members will continue to support meaningful legislation across the country that uplifts music people and human creativity.”
The Cap One--Discover Merger as a source of competitive harm
The Capital One—Discover merger may not only fail to enhance competition with leading card companies Visa and Mastercard, but do just the opposite. Consequently, the merger may not lower fees to merchants and others.
Respected competition policy scholar John Kwoka expressed concern in a recent interview concerning the Capital One-Discover merger:
"The parties, of course, will make the case that they may be able to lower the processing fees and, as a result, give customers -you, me -credit card users and merchants something of a break," he says.
On the other hand, a Capital One and Discover marriage would result in even greater bargaining power for the pair that could be leveraged against merchants as well, Kwoka says. Many industry experts have warned against further shrinking of competition in an already highly consolidated credit card market.
"Down that path lies the opposite concern - that the merger will preserve the high fees and simply result in Capital One-Discover pocketing those fees more fully than at present, where Capital One has to pay Visa and Mastercard," he says.
https://news.northeastern.edu/2024/02/20/capital-one-discover-merger/
A frequently expressed view of merchant advocates is that Visa and Mastercard and large banks act jointly to keep payment card fees high, and to block competition. That view is articulated in the recent lawsuit brought by Block against Visa and Mastercard; the Complaint can be found at Block, Inc. v. Visa Inc. et al, Docket No. 1:23-cv-05377 (E.D.N.Y. Jul 14, 2023), Court Docket
Beginning at paragraph 25 of the Block Complaint, the explanation is offered that Visa and Mastercard were initially run by banks, and have continued to coordinate with banks despite being separately incorporated. Visa and Mastercard and the large banks are described as co-conspirators alleged to have aided practices resulting in high fees to Square. Large bank issuers that have issued Visa and Mastercard payment cards are alleged to have agreed to inflate, set, and enforce inflated Visa and Mastercard Interchange Fees. Banks that acquire Visa and Mastercard transactions from Square are said to have done the same. The agreed practices that result in high fees include icompetitive rules and restraints on Square and similar merchants. Banks that have or have had membership on Visa’s or Mastercard’s board of directors are said to have adopted and agreed to impose the challenged rules and restraints upon Square, its Sellers, and other Payment Facilitators.
A concern suggested by the Block allegations is that the merged Capital One -- Discover entity will join in Visa/Mastercard/big bank anti-competitive strategies, rather than opposing them.
Further support for that concern can be found in a 2019 white paper (Payment Insecurity -- How Visa and Mastercard Use Standard-Setting to Restrict Competition and Thwart Payment Innovation, by Rene M. Pelegero, see https://www.securepaymentspartnership.com/wp-content/uploads/2019/12/Payment_Insecurity_Final.pdf) that articulates a widely held view that EMVCo, a standard-setting organization of large payment card companies, including Discover, engages in a systematic pattern by the card companies to use EMVCo to develop anticompetitive standards that protect the interests of its owners and preempt competition in the market that could lower costs and improve security for businesses and consumers.
EMVCo is a standard setting consortium with control split equally among Visa, Mastercard, JCB, American Express, China UnionPay, and Discover.
The standards in issue apply to EMV cards (smart cards, or chip cards) which store their data on integrated circuit chips, in addition to magnetic stripes for backward compatibility.
Following is a quote from the 2019 study’s executive summary explaining how the EMVCo consortium, including Discover, uses standard setting to block competition from electronic payment alternatives that could compete with the kinds of payment card offerings of Visa, Mastercard, and Discover. Some of the technical references are arcane, but the gist is clear:
Our research reveals an insidious pattern in which the card companies use EMVCo as a tool to maximize their share of transaction volumes: when the card companies feel threatened by competitive pressures or economic challenges, they or EMVCo supporting their strategies - assume responsibility for the definition of a standard, which results in technical specifications that only benefit the card companies, not the U.S. payments industry at large. EMVCo is an armory for the card companies' arsenal of standards that have been repeatedly brandished against competing payment methods and against merchants' ability to route transactions through unaffiliated debit networks. This paper will show:
• How EMVCo supported Visa's 20-year-plus battle against unaffiliated debit networks, resulting in the implementation of less secure chip-and-signature EMV cards in the United States rather than the more secure chip-and-PIN cards used elsewhere, limiting the competition that Visa and Mastercard could face from those networks. (Section 6).
• How EMVCo (with support of the card companies) adopted expensive, complex and difficult-to-implement technology such as NFC [near field communications] because it preserved the status quo for the card companies and protected their market share. (Section 7)
• That EMVCo decided to establish tokenization standards that excluded non card payments, ignoring the work of other standards-setting organizations such as the American National Standards Institute or The Clearing House. EMVCo pushed aside calls for open standards and instead issued a tokenization standard that discriminates against unaffiliated debit networks (Section 8)
• How EMVCo ignored the work of other standards-setting organizations such as the Fast Identity Online (FIDO) Alliance and World Wide Web Consortium (popularly known as W3C) that were developing open authentication standards for both card and non-card systems. Instead, EMVCo is regressing to 3-D Secure, an old standard inherited from the card companies which EMVCo is trying to position as a global authentication standard. 3-D Secure 2.0, as this new standard is being called, is likely to introduce much friction during the checkout process and create obstacles for routing of debit transaction through unaffiliated debit networks. (Section 9)
• That EMVCo has introduced the Secure Remote Commerce standard, which purports to become a new integrated checkout platform for online payment. Neither EMVCo nor the card companies have fully explained and justified the reason for this standard. Secure Remote Commerce has the potential to be leveraged as competitive pre-emption tool that may limit participation from non-card company payment methods and to hinder merchants' ability to route transactions through unaffiliated debit networks, creating higher dependencies on the card companies and increasing merchants' payment processing costs, as well as potentially violating federal law for debit transactions. (Section 10)
• ***
The bottom line is that there is considerable concern that the Capital One – Discover merger will result in Discover doubling down on coordination with banks and Visa and Mastercard to push strategies that exclude payment system rivals and maintain high fees to merchants and others.
John Kwoka has a point of concern about the negative effects of the Capital One—Discover merger that the USDOJ, the Fed, the OCC, and the FDIC will need to carefully consider.
Don Resnikoff 3-12-2024
The Capital One—Discover merger may not only fail to enhance competition with leading card companies Visa and Mastercard, but do just the opposite. Consequently, the merger may not lower fees to merchants and others.
Respected competition policy scholar John Kwoka expressed concern in a recent interview concerning the Capital One-Discover merger:
"The parties, of course, will make the case that they may be able to lower the processing fees and, as a result, give customers -you, me -credit card users and merchants something of a break," he says.
On the other hand, a Capital One and Discover marriage would result in even greater bargaining power for the pair that could be leveraged against merchants as well, Kwoka says. Many industry experts have warned against further shrinking of competition in an already highly consolidated credit card market.
"Down that path lies the opposite concern - that the merger will preserve the high fees and simply result in Capital One-Discover pocketing those fees more fully than at present, where Capital One has to pay Visa and Mastercard," he says.
https://news.northeastern.edu/2024/02/20/capital-one-discover-merger/
A frequently expressed view of merchant advocates is that Visa and Mastercard and large banks act jointly to keep payment card fees high, and to block competition. That view is articulated in the recent lawsuit brought by Block against Visa and Mastercard; the Complaint can be found at Block, Inc. v. Visa Inc. et al, Docket No. 1:23-cv-05377 (E.D.N.Y. Jul 14, 2023), Court Docket
Beginning at paragraph 25 of the Block Complaint, the explanation is offered that Visa and Mastercard were initially run by banks, and have continued to coordinate with banks despite being separately incorporated. Visa and Mastercard and the large banks are described as co-conspirators alleged to have aided practices resulting in high fees to Square. Large bank issuers that have issued Visa and Mastercard payment cards are alleged to have agreed to inflate, set, and enforce inflated Visa and Mastercard Interchange Fees. Banks that acquire Visa and Mastercard transactions from Square are said to have done the same. The agreed practices that result in high fees include icompetitive rules and restraints on Square and similar merchants. Banks that have or have had membership on Visa’s or Mastercard’s board of directors are said to have adopted and agreed to impose the challenged rules and restraints upon Square, its Sellers, and other Payment Facilitators.
A concern suggested by the Block allegations is that the merged Capital One -- Discover entity will join in Visa/Mastercard/big bank anti-competitive strategies, rather than opposing them.
Further support for that concern can be found in a 2019 white paper (Payment Insecurity -- How Visa and Mastercard Use Standard-Setting to Restrict Competition and Thwart Payment Innovation, by Rene M. Pelegero, see https://www.securepaymentspartnership.com/wp-content/uploads/2019/12/Payment_Insecurity_Final.pdf) that articulates a widely held view that EMVCo, a standard-setting organization of large payment card companies, including Discover, engages in a systematic pattern by the card companies to use EMVCo to develop anticompetitive standards that protect the interests of its owners and preempt competition in the market that could lower costs and improve security for businesses and consumers.
EMVCo is a standard setting consortium with control split equally among Visa, Mastercard, JCB, American Express, China UnionPay, and Discover.
The standards in issue apply to EMV cards (smart cards, or chip cards) which store their data on integrated circuit chips, in addition to magnetic stripes for backward compatibility.
Following is a quote from the 2019 study’s executive summary explaining how the EMVCo consortium, including Discover, uses standard setting to block competition from electronic payment alternatives that could compete with the kinds of payment card offerings of Visa, Mastercard, and Discover. Some of the technical references are arcane, but the gist is clear:
Our research reveals an insidious pattern in which the card companies use EMVCo as a tool to maximize their share of transaction volumes: when the card companies feel threatened by competitive pressures or economic challenges, they or EMVCo supporting their strategies - assume responsibility for the definition of a standard, which results in technical specifications that only benefit the card companies, not the U.S. payments industry at large. EMVCo is an armory for the card companies' arsenal of standards that have been repeatedly brandished against competing payment methods and against merchants' ability to route transactions through unaffiliated debit networks. This paper will show:
• How EMVCo supported Visa's 20-year-plus battle against unaffiliated debit networks, resulting in the implementation of less secure chip-and-signature EMV cards in the United States rather than the more secure chip-and-PIN cards used elsewhere, limiting the competition that Visa and Mastercard could face from those networks. (Section 6).
• How EMVCo (with support of the card companies) adopted expensive, complex and difficult-to-implement technology such as NFC [near field communications] because it preserved the status quo for the card companies and protected their market share. (Section 7)
• That EMVCo decided to establish tokenization standards that excluded non card payments, ignoring the work of other standards-setting organizations such as the American National Standards Institute or The Clearing House. EMVCo pushed aside calls for open standards and instead issued a tokenization standard that discriminates against unaffiliated debit networks (Section 8)
• How EMVCo ignored the work of other standards-setting organizations such as the Fast Identity Online (FIDO) Alliance and World Wide Web Consortium (popularly known as W3C) that were developing open authentication standards for both card and non-card systems. Instead, EMVCo is regressing to 3-D Secure, an old standard inherited from the card companies which EMVCo is trying to position as a global authentication standard. 3-D Secure 2.0, as this new standard is being called, is likely to introduce much friction during the checkout process and create obstacles for routing of debit transaction through unaffiliated debit networks. (Section 9)
• That EMVCo has introduced the Secure Remote Commerce standard, which purports to become a new integrated checkout platform for online payment. Neither EMVCo nor the card companies have fully explained and justified the reason for this standard. Secure Remote Commerce has the potential to be leveraged as competitive pre-emption tool that may limit participation from non-card company payment methods and to hinder merchants' ability to route transactions through unaffiliated debit networks, creating higher dependencies on the card companies and increasing merchants' payment processing costs, as well as potentially violating federal law for debit transactions. (Section 10)
• ***
The bottom line is that there is considerable concern that the Capital One – Discover merger will result in Discover doubling down on coordination with banks and Visa and Mastercard to push strategies that exclude payment system rivals and maintain high fees to merchants and others.
John Kwoka has a point of concern about the negative effects of the Capital One—Discover merger that the USDOJ, the Fed, the OCC, and the FDIC will need to carefully consider.
Don Resnikoff 3-12-2024
DC residents should support federal rail safety legislation
We have previously pointed out that train derailments in places like Palestine, Ohio raise concerns in the DC metro area, where potentially dangerous rail traffic is routed through densely populated areas. Consequently, remedial actions to improve rail safety should be of concern to DC area residents, particularly proposed new federal safety laws.
The New York Times recently reported that Congressional efforts to pass remedial legislation have failed. No remedial bill has passed.
https://www.nytimes.com/2024/01/28/business/ohio-train-derailment-safety-east-palestine.html
This past spring Senators Sherrod Brown and J.D. Vance of Ohio, along with Sens. Marco Rubio (R., Fla.), Josh Hawley (R. Mo.), Bob Casey (D., Pa.) and John Fetterman (D., Pa.), introduced legislation intended to prevent future train disasters such as the Feb. 3 derailment of Norfolk Southern Corp. railcars near East Palestine, Ohio. Senators said the bill would strengthen safety procedures for trains carrying hazardous materials, establish requirements for wayside defect detectors, create a permanent requirement for railroads to operate with at least two-person crews, and increase fines for wrongdoing committed by rail carriers.
No bill was passed. And accidents went up.
Derailments rose at the top five freight railroads in 2023, according to regulatory reports for the first 10 months of the year, the most recent period for which data exists for all five companies. And there was a steep increase in the mechanical problem — an overheated wheel bearing — that regulators think caused the derailment of the 1.75-mile-long train in East Palestine. See https://www.ntsb.gov/investigations/Pages/RRD23MR005.aspx
Norfolk Southern, the operator of the train and the owner of the track that runs through the town, was the only railroad among the five to report a decline in accidents in the period.
Recommendation: Local consumer groups should advocate for the a bipartisan bill aimed at making railroads safer — including a requirement that railroads use more detectors to identify overheated wheel bearings. The bill is at https://www.congress.gov/bill/118th-congress/senate-bill/576?q=%7B%22search%22%3A%22rail+safety+act%22%7D&s=2&r=5
Resistance to the billfrom rail lobbyists should not be allowed to prevail.
Posting by Don Allen Resnikoff Credit: Much of the factual material is drawn from the NT Times
We have previously pointed out that train derailments in places like Palestine, Ohio raise concerns in the DC metro area, where potentially dangerous rail traffic is routed through densely populated areas. Consequently, remedial actions to improve rail safety should be of concern to DC area residents, particularly proposed new federal safety laws.
The New York Times recently reported that Congressional efforts to pass remedial legislation have failed. No remedial bill has passed.
https://www.nytimes.com/2024/01/28/business/ohio-train-derailment-safety-east-palestine.html
This past spring Senators Sherrod Brown and J.D. Vance of Ohio, along with Sens. Marco Rubio (R., Fla.), Josh Hawley (R. Mo.), Bob Casey (D., Pa.) and John Fetterman (D., Pa.), introduced legislation intended to prevent future train disasters such as the Feb. 3 derailment of Norfolk Southern Corp. railcars near East Palestine, Ohio. Senators said the bill would strengthen safety procedures for trains carrying hazardous materials, establish requirements for wayside defect detectors, create a permanent requirement for railroads to operate with at least two-person crews, and increase fines for wrongdoing committed by rail carriers.
No bill was passed. And accidents went up.
Derailments rose at the top five freight railroads in 2023, according to regulatory reports for the first 10 months of the year, the most recent period for which data exists for all five companies. And there was a steep increase in the mechanical problem — an overheated wheel bearing — that regulators think caused the derailment of the 1.75-mile-long train in East Palestine. See https://www.ntsb.gov/investigations/Pages/RRD23MR005.aspx
Norfolk Southern, the operator of the train and the owner of the track that runs through the town, was the only railroad among the five to report a decline in accidents in the period.
Recommendation: Local consumer groups should advocate for the a bipartisan bill aimed at making railroads safer — including a requirement that railroads use more detectors to identify overheated wheel bearings. The bill is at https://www.congress.gov/bill/118th-congress/senate-bill/576?q=%7B%22search%22%3A%22rail+safety+act%22%7D&s=2&r=5
Resistance to the billfrom rail lobbyists should not be allowed to prevail.
Posting by Don Allen Resnikoff Credit: Much of the factual material is drawn from the NT Times
Kansas Becomes the Latest State to Sue TikTok Over Harm to Minors
Ashley King -- DMN
March 8, 2024
Attorney General Kris Kobach filed a consumer protection lawsuit vs. TikTok, saying the social media giant failed to inform minors of its addictive qualities. It also alleges the app failed to inform adults about the effectiveness of its parental controls when it comes to blocking content that may damage mental health.
The petition seeks an order permanently enjoining TikTok and parent company ByteDance from engaging in deceptive acts against Kansas consumers. It also requests the court award civil penalties of $10,000 per violation, or $20,000 per instance in special circumstances while requiring TikTok to pay investigative and attorney costs.
“The app has promoted filth, profanity, sexual content, and alcohol and drugs to Kansas Kids,” Attorney General Kris Kobach says. “Even worse, it has used coercive algorithms that spike dopamine, keeping kids on the app as long as possible and facilitating downward mental health spirals.”“In reality, this company created an app intentionally to hook Kansas children onto their salacious, dangerous, and damaging content at the price of those children’s mental health,” adds Fran Oleen, Deputy Attorney General in Kansas. Kansas is not the only state in the U.S. to take legal action even as TikTok faces broader opposition in Congress.
Utah, Arkansas, and Indiana have launched similar lawsuits vs. the social media giant, alleging that the company is baiting children into addictive habits. While Indiana’s effort was dismissed by a judge—other states are picking up the mantle.“TikTok designed and employs algorithm features that spoon-feed kids endless, highly curated content from which our children struggle to disengage. TikTok designed these features to mimic a cruel slot machine that hooks kids’ attention and does not let them go,” Utah Attorney General Sean Reyes said in a press statement.
Meanwhile, TikTok is facing a law that if passed in Congress would require parent company ByteDance to divest TikTok entirely or face a blanket ban across the United States.
Ashley King -- DMN
March 8, 2024
Attorney General Kris Kobach filed a consumer protection lawsuit vs. TikTok, saying the social media giant failed to inform minors of its addictive qualities. It also alleges the app failed to inform adults about the effectiveness of its parental controls when it comes to blocking content that may damage mental health.
The petition seeks an order permanently enjoining TikTok and parent company ByteDance from engaging in deceptive acts against Kansas consumers. It also requests the court award civil penalties of $10,000 per violation, or $20,000 per instance in special circumstances while requiring TikTok to pay investigative and attorney costs.
“The app has promoted filth, profanity, sexual content, and alcohol and drugs to Kansas Kids,” Attorney General Kris Kobach says. “Even worse, it has used coercive algorithms that spike dopamine, keeping kids on the app as long as possible and facilitating downward mental health spirals.”“In reality, this company created an app intentionally to hook Kansas children onto their salacious, dangerous, and damaging content at the price of those children’s mental health,” adds Fran Oleen, Deputy Attorney General in Kansas. Kansas is not the only state in the U.S. to take legal action even as TikTok faces broader opposition in Congress.
Utah, Arkansas, and Indiana have launched similar lawsuits vs. the social media giant, alleging that the company is baiting children into addictive habits. While Indiana’s effort was dismissed by a judge—other states are picking up the mantle.“TikTok designed and employs algorithm features that spoon-feed kids endless, highly curated content from which our children struggle to disengage. TikTok designed these features to mimic a cruel slot machine that hooks kids’ attention and does not let them go,” Utah Attorney General Sean Reyes said in a press statement.
Meanwhile, TikTok is facing a law that if passed in Congress would require parent company ByteDance to divest TikTok entirely or face a blanket ban across the United States.
Is Spirit a failing or weakened airline? Judge Young v. financial analysts
In Judge Young’s decision disapproving the JetBlue-Spirit merger (available at https://www.courthousenews.com/wp-content/uploads/2024/01/spirit-antitrust-decision.pdf), he rejected failing firm and weakened firm defenses after reviewing a lot of evidence after a 17-day trial. He wrote that the airlines “presented no evidence that Spirit was in such a dire financial situation that it had no hope for the future; instead, multiple Spirit executives testified that the airline had a plan to return to profitability.”
Many financial experts disagree. CNN Business reports that “Spirit Airlines could end up in bankruptcy and be forced out of business because of a federal court decision to block a proposed sale to JetBlue Airways, according to a note from an airline analyst.” Some discouraging public comments from JetBlue about merger prospects seem to fuel the analysts’ pessimism.
I understand the tendency of financial analysts to carp about the wisdom of government antitrust enforcers and about the wisdom of judges who support the enforcers. But as I watch the stock price of Spirit fall I wonder whether the dire warnings of financial analysts, combined with JetBlue’s comments, might actually undermine Spirit’s chances of survival. If so, might there be some considered strategy afoot to undermine enforcement in general, and Judge Young’s decision in particular? Or are the dire warnings of analysts and comments of JetBlue just the company and analysts doing business as usual?
Are the post-decision warnings about Spirit’s financial health something the enforcers should worry about?
Should the District of Columbia’s laws and ethics rules for lawyers be revised to address settlement agreements that provide secrecy for dangerous products?
By Don Allen Resnikoff
One critical aspect of legal practice involves the negotiation and settlement of disputes, including litigated disputes, a process that sometimes includes confidentiality agreements. Those confidentiality agreements may keep secret important information about dangerous products.
Do the District of Columbia’s laws and ethics rules for lawyers adequately address settlement agreements that provide confidentiality for information about dangerous products? The question is an important one: legislatures in California and other states have already considered statutes that would require judges and attorneys to block settlements that hide information about dangerous products. The D.C. Council might do the same.
When negotiating settlement agreements, a lawyer’s duty to represent the clients' interests will often include seeking confidentiality provisions to protect proprietary information, trade secrets, or simply to avoid public scrutiny. However, in cases involving dangerous products or practices, the public's safety becomes an important counterbalancing concern.
Advocates for more restrictive ethical standards would put an increased burden on lawyers to police settlement agreements, stipulations for court orders, and standing protective orders that hide important information about dangerous products that, arguably, the public has a right to know. The advocates contend that companies often wish to keep such information secret, not because of legitimate trade secrets, but to avoid accountability for their dangerous and defective products that harm the public. Advocates argue that company lawyers should not be complicit. [fn: Richard Zitrin, The Case Against Secret Settlements (Or, What You Don't Know Can Hurt You), 2 Journal of the Institute for the Study of Legal Ethics 115 (1999). Available at: http://repository.uchastings.edu/faculty_scholarship/1210]
The specific ethics rule language suggested by advocate Richard Zitrin is:
A lawyer shall not participate in offering or making an agreement, whether in connection with a lawsuit or otherwise, to prevent or restrict the availability to the public of information that the lawyer reasonably believes directly concerns a substantial danger to the public health or safety, or to the health or safety of any particular individual(s).
Neither the American Bar Association nor any state-level Bars have adopted the Zitrin proposed ethical rule.
Various state bar associations have issued ethics opinions prohibiting settling parties from agreeing to keep confidential information already in the public record, a much more limited restriction. [fn: https://www.dentons.com/en/insights/newsletters/2020/march/4/practice-tips-for-lawyers/shhhh-complying-with-confidentiality-clauses-in-settlement-agreements]
That lesser ethical limitation applies in the District of Columbia, my home jurisdiction. A blog published by attorney Charles Bacharach in 2006 explains that a District of Columbia Bar Legal Ethics Committee opinion prohibits settling parties from agreeing to keep confidential information already in the public record. (D.C. Bar Opinion 335).
The D.C. Committee held that "the confidentiality of otherwise public information cannot be part of a settlement agreement, even if the lawyer's client agrees that such a provision be included." Such agreements, the Committee opined, have the effect of preventing "other potential clients from identifying lawyers with the relevant experience and expertise to bring similar actions." Although recognizing that such confidentiality clauses impose no direct limitation on the lawyer's ability to bring subsequent actions, the Committee held that the provisions do "restrict his ability to inform potential clients of his experience."
Various arguments are made against broadening DC’s lawyer ethics rules to make lawyers responsible for avoiding secrecy in settlement and court documents that hide information concerning products that endanger the public.
One important argument is that lawyers engaged in litigation should be allowed to protect clients from revealing information that could lead to legal action against the client, much as criminal defense lawyers are not expected to reveal information about their client’s criminal conduct.
A stronger argument, in my opinion, is that the question of whether a product or practice is dangerous to the public can be a complex and difficult question best left to court decision based on a formal review of evidence, rather than to the judgment of an attorney whose primary goal is defending a company.
An example of the predicament of an attorney attempting to determine a product’s public danger is provided by the Oxycontin story, which involved what many perceived as a scheme by Purdue Pharma to hide the dangers of the Oxycontin opioid through use of confidential settlement agreements that kept the dangers secret. As late at 2019, government health officials were considering data from Purdue Pharma supporting the safety of Oxycontin. [fn: See https://www.statnews.com/2019/07/22/revamped-oxycontin-was-supposed-to-reduce-abuse-but-has-it/] Government officials may have been skeptical about the Purdue data, but it does not follow that a litigation attorney representing Purdue in 2015 should have been charged with the burden of independently determining that Oxycontin is dangerous, leading to an obligation on the attorney to force disclosure of the then disputed and uncertain dangers.
Adjudicating that Oxycontin or other products are dangerous and that a settlement agreement or court order should not hide the danger is, arguably, best left to a judge. A judge can apply due process standards to the question of what evidence of product danger should be considered, and then carefully weigh evidence and decide whether the danger should be revealed to the public.
If the question is best left to a judge as to what products are dangerous and should not be hidden by a settlement agreement or court order, then it follows that the preferable reform needed in D.C. is not expansion of ethics rules, but passage of legislation that would put on a judge the burden of deciding whether products are dangerous and should not be hidden by a settlement agreement or court order. For example, in a litigated matter the presiding judge could be required to decide whether a settlement agreement presents an Oxycontin type problem of a product danger that should be revealed to the public.
Of course, such a reform statute would not effectively reach confidentiality settlements that do not get court scrutiny. While a reform statute could be structured to include language reaching non-judicial settlements, the consequence could often be to put an ethical burden on settling attorneys, which I have suggested may be seen as putting an inappropriate adjudication burden on lawyers.
It is interesting that California has considered a reform statute that would require judges to review the propriety of secrecy provisions about dangerous products in settlement agreements. However, the statute would also put an independent ethical burden on attorneys to police settlements. A Skadden law firm article at
https://www.skadden.com/insights/publications/2022/05/california-bill-would-prohibit-settlement-agreements discusses the bill in California known as the Public Right To Know Act of 2022, SB 11491. This bill aims to prohibit settlement agreements that prevent the disclosure of information about defective products or environmental hazards.
The California bill would impact legal actions involving a “defective product or environmental hazard that poses a danger to public health or safety.” It proposes prohibiting court orders that do not allow public disclosure of the covered information, as well as prohibiting other settlement agreements not involving court orders that restrict the disclosure of factual information about the offending products.
Under the California bill, an attorney’s failure to comply could be grounds for professional discipline and a potential investigation by the State Bar of California.
It seems likely that there will be future discussion concerning D.C.’s ethical rules and possible remedial statutes concerning settlement agreements that seek to hide information about dangerous products. That discussion is important to the public. Richard Zitrin’s proposals for more aggressive ethics rules are likely to be a part of the discussion, as are proposals for legislation based on aspects of the California model that will require judges to police settlement agreements that come before them.
END
By Don Allen Resnikoff
One critical aspect of legal practice involves the negotiation and settlement of disputes, including litigated disputes, a process that sometimes includes confidentiality agreements. Those confidentiality agreements may keep secret important information about dangerous products.
Do the District of Columbia’s laws and ethics rules for lawyers adequately address settlement agreements that provide confidentiality for information about dangerous products? The question is an important one: legislatures in California and other states have already considered statutes that would require judges and attorneys to block settlements that hide information about dangerous products. The D.C. Council might do the same.
When negotiating settlement agreements, a lawyer’s duty to represent the clients' interests will often include seeking confidentiality provisions to protect proprietary information, trade secrets, or simply to avoid public scrutiny. However, in cases involving dangerous products or practices, the public's safety becomes an important counterbalancing concern.
Advocates for more restrictive ethical standards would put an increased burden on lawyers to police settlement agreements, stipulations for court orders, and standing protective orders that hide important information about dangerous products that, arguably, the public has a right to know. The advocates contend that companies often wish to keep such information secret, not because of legitimate trade secrets, but to avoid accountability for their dangerous and defective products that harm the public. Advocates argue that company lawyers should not be complicit. [fn: Richard Zitrin, The Case Against Secret Settlements (Or, What You Don't Know Can Hurt You), 2 Journal of the Institute for the Study of Legal Ethics 115 (1999). Available at: http://repository.uchastings.edu/faculty_scholarship/1210]
The specific ethics rule language suggested by advocate Richard Zitrin is:
A lawyer shall not participate in offering or making an agreement, whether in connection with a lawsuit or otherwise, to prevent or restrict the availability to the public of information that the lawyer reasonably believes directly concerns a substantial danger to the public health or safety, or to the health or safety of any particular individual(s).
Neither the American Bar Association nor any state-level Bars have adopted the Zitrin proposed ethical rule.
Various state bar associations have issued ethics opinions prohibiting settling parties from agreeing to keep confidential information already in the public record, a much more limited restriction. [fn: https://www.dentons.com/en/insights/newsletters/2020/march/4/practice-tips-for-lawyers/shhhh-complying-with-confidentiality-clauses-in-settlement-agreements]
That lesser ethical limitation applies in the District of Columbia, my home jurisdiction. A blog published by attorney Charles Bacharach in 2006 explains that a District of Columbia Bar Legal Ethics Committee opinion prohibits settling parties from agreeing to keep confidential information already in the public record. (D.C. Bar Opinion 335).
The D.C. Committee held that "the confidentiality of otherwise public information cannot be part of a settlement agreement, even if the lawyer's client agrees that such a provision be included." Such agreements, the Committee opined, have the effect of preventing "other potential clients from identifying lawyers with the relevant experience and expertise to bring similar actions." Although recognizing that such confidentiality clauses impose no direct limitation on the lawyer's ability to bring subsequent actions, the Committee held that the provisions do "restrict his ability to inform potential clients of his experience."
Various arguments are made against broadening DC’s lawyer ethics rules to make lawyers responsible for avoiding secrecy in settlement and court documents that hide information concerning products that endanger the public.
One important argument is that lawyers engaged in litigation should be allowed to protect clients from revealing information that could lead to legal action against the client, much as criminal defense lawyers are not expected to reveal information about their client’s criminal conduct.
A stronger argument, in my opinion, is that the question of whether a product or practice is dangerous to the public can be a complex and difficult question best left to court decision based on a formal review of evidence, rather than to the judgment of an attorney whose primary goal is defending a company.
An example of the predicament of an attorney attempting to determine a product’s public danger is provided by the Oxycontin story, which involved what many perceived as a scheme by Purdue Pharma to hide the dangers of the Oxycontin opioid through use of confidential settlement agreements that kept the dangers secret. As late at 2019, government health officials were considering data from Purdue Pharma supporting the safety of Oxycontin. [fn: See https://www.statnews.com/2019/07/22/revamped-oxycontin-was-supposed-to-reduce-abuse-but-has-it/] Government officials may have been skeptical about the Purdue data, but it does not follow that a litigation attorney representing Purdue in 2015 should have been charged with the burden of independently determining that Oxycontin is dangerous, leading to an obligation on the attorney to force disclosure of the then disputed and uncertain dangers.
Adjudicating that Oxycontin or other products are dangerous and that a settlement agreement or court order should not hide the danger is, arguably, best left to a judge. A judge can apply due process standards to the question of what evidence of product danger should be considered, and then carefully weigh evidence and decide whether the danger should be revealed to the public.
If the question is best left to a judge as to what products are dangerous and should not be hidden by a settlement agreement or court order, then it follows that the preferable reform needed in D.C. is not expansion of ethics rules, but passage of legislation that would put on a judge the burden of deciding whether products are dangerous and should not be hidden by a settlement agreement or court order. For example, in a litigated matter the presiding judge could be required to decide whether a settlement agreement presents an Oxycontin type problem of a product danger that should be revealed to the public.
Of course, such a reform statute would not effectively reach confidentiality settlements that do not get court scrutiny. While a reform statute could be structured to include language reaching non-judicial settlements, the consequence could often be to put an ethical burden on settling attorneys, which I have suggested may be seen as putting an inappropriate adjudication burden on lawyers.
It is interesting that California has considered a reform statute that would require judges to review the propriety of secrecy provisions about dangerous products in settlement agreements. However, the statute would also put an independent ethical burden on attorneys to police settlements. A Skadden law firm article at
https://www.skadden.com/insights/publications/2022/05/california-bill-would-prohibit-settlement-agreements discusses the bill in California known as the Public Right To Know Act of 2022, SB 11491. This bill aims to prohibit settlement agreements that prevent the disclosure of information about defective products or environmental hazards.
The California bill would impact legal actions involving a “defective product or environmental hazard that poses a danger to public health or safety.” It proposes prohibiting court orders that do not allow public disclosure of the covered information, as well as prohibiting other settlement agreements not involving court orders that restrict the disclosure of factual information about the offending products.
Under the California bill, an attorney’s failure to comply could be grounds for professional discipline and a potential investigation by the State Bar of California.
It seems likely that there will be future discussion concerning D.C.’s ethical rules and possible remedial statutes concerning settlement agreements that seek to hide information about dangerous products. That discussion is important to the public. Richard Zitrin’s proposals for more aggressive ethics rules are likely to be a part of the discussion, as are proposals for legislation based on aspects of the California model that will require judges to police settlement agreements that come before them.
END
DC Bar Podcast:
AI innovation or price-fixing? Jay Himes on DC's case against RealPage and landlords
https://podcasters.spotify.com/pod/show/dcbar/episodes/AI-Innovation-or-Price-fixing--Jay-Himes-on-DCs-Case-Against-RealPage-and-Landlords-e2d8bgt
Attorney General Brian L. Schwalb filed a lawsuit against RealPage, Inc. and 14 of the largest residential landlords in the District of Columbia. The lawsuit alleges that they colluded to illegally raise rents for tens of thousands of DC residents. The Complaint alleges that the collusion used artificial intelligence computer techniques that collected and shared confidential information among landlords, and fixed artificially prices for rents. Jay Himes, formerly lead antitrust enforcer for the State of New York and an expert in the area, explains the evolution of antitrust enforcement in dealing with artificial intelligence issues, while focusing on DC’s case. Don Resnikoff acted as interlocutor.
AI innovation or price-fixing? Jay Himes on DC's case against RealPage and landlords
https://podcasters.spotify.com/pod/show/dcbar/episodes/AI-Innovation-or-Price-fixing--Jay-Himes-on-DCs-Case-Against-RealPage-and-Landlords-e2d8bgt
Attorney General Brian L. Schwalb filed a lawsuit against RealPage, Inc. and 14 of the largest residential landlords in the District of Columbia. The lawsuit alleges that they colluded to illegally raise rents for tens of thousands of DC residents. The Complaint alleges that the collusion used artificial intelligence computer techniques that collected and shared confidential information among landlords, and fixed artificially prices for rents. Jay Himes, formerly lead antitrust enforcer for the State of New York and an expert in the area, explains the evolution of antitrust enforcement in dealing with artificial intelligence issues, while focusing on DC’s case. Don Resnikoff acted as interlocutor.
DC Appeal Judges Question Amazon Defense In DC AG Antitrust Suit
Excerpt from Law360 article at https://www.law360.com/competition/articles/1774818?cn_pk=a2e06c07-3158-4204-b3e4-2749e1f5d7fb&utm_source=newsletter&utm_medium=email&utm_campaign=custom&utm_content=2023-12-08&read_main=1&nlsidx=0&nlaidx=0&detected=1?copied=1 [paywall]
A District of Columbia Court of Appeals judge seemed skeptical of Amazon's defense in December 7, 2023 oral arguments over Washington, D.C.'s antitrust suit against the e-commerce giant, saying it appeared quite plausible that Amazon's pricing policies affect the entire e-commerce marketplace, which it dominates, and encourage sellers to hike their prices across the board.
In front of a two-judge panel, the two sides argued over the D.C. trial court's dismissal of the district's Sherman Act claims challenging the company's most-favored nation clause, which prevents sellers on Amazon's platform from offering their products cheaper elsewhere, including on their own websites.
The D.C. Attorney General's office argues the clause has driven sellers on the site to bake Amazon's fees — allegedly the highest in e-commerce — into their cost on other platforms or face the wrath of the world's biggest online retailer.
In March 2022, D.C. Superior Court Judge Hiram Puig-Lugo granted the company's motion to dismiss, holding that, according to the standard set in 2007's Bell Atlantic Corp. v. Twombly , the district hadn't made sufficiently plausible and non-conclusory allegations that the pricing agreement between Amazon and its sellers had worked to anti-competitive effect across the e-commerce market.
The case is District of Columbia v. Amazon, Inc., case number 22-CV-0657, in the District of Columbia Court of Appeals.
Excerpt from Law360 article at https://www.law360.com/competition/articles/1774818?cn_pk=a2e06c07-3158-4204-b3e4-2749e1f5d7fb&utm_source=newsletter&utm_medium=email&utm_campaign=custom&utm_content=2023-12-08&read_main=1&nlsidx=0&nlaidx=0&detected=1?copied=1 [paywall]
A District of Columbia Court of Appeals judge seemed skeptical of Amazon's defense in December 7, 2023 oral arguments over Washington, D.C.'s antitrust suit against the e-commerce giant, saying it appeared quite plausible that Amazon's pricing policies affect the entire e-commerce marketplace, which it dominates, and encourage sellers to hike their prices across the board.
In front of a two-judge panel, the two sides argued over the D.C. trial court's dismissal of the district's Sherman Act claims challenging the company's most-favored nation clause, which prevents sellers on Amazon's platform from offering their products cheaper elsewhere, including on their own websites.
The D.C. Attorney General's office argues the clause has driven sellers on the site to bake Amazon's fees — allegedly the highest in e-commerce — into their cost on other platforms or face the wrath of the world's biggest online retailer.
In March 2022, D.C. Superior Court Judge Hiram Puig-Lugo granted the company's motion to dismiss, holding that, according to the standard set in 2007's Bell Atlantic Corp. v. Twombly , the district hadn't made sufficiently plausible and non-conclusory allegations that the pricing agreement between Amazon and its sellers had worked to anti-competitive effect across the e-commerce market.
The case is District of Columbia v. Amazon, Inc., case number 22-CV-0657, in the District of Columbia Court of Appeals.
https://rachelcarsoncouncil.org/states-strike-back-death-star-bills-erode-local-autonomy/?eType=EmailBlastContent&eId=3a6c07dc-1749-4572-a877-4227c32d7bbc
D.C. attorney general hits back at Jordan, Comer in Leonard Leo probe
Excerpt from https://www.politico.com/tag/legal
By HEIDI PRZYBYLA 11/13/2023 05:15 PM EST
The investigation centers on whether the conservative judicial activist abused laws governing nonprofits. On Oct. 30, GOP Reps. Jim Jordan and James Comer demanded all materials from D.C. Attorney General Brian Schwalb related to Leonard Leo.
D.C. Attorney General Brian Schwalb won’t share with Congress information about his investigation into whether judicial activist Leonard Leo abused nonprofit tax laws, according to a letter released on Monday. Leo presides over a multi-billion-dollar network of tax-exempt nonprofit groups and used it, in part, to organize campaigns over the past decade to install the Supreme Court’s conservative majority. The question at issue is the transfer of tens of millions of dollars collected by one of his aligned nonprofit organizations to his for-profit entity. On Oct. 30, GOP Reps. Jim Jordan (R-Ohio) and James Comer (R-Ky.), chairs of the House Judiciary and Oversight committees, respectively, demanded all materials from Schwalb related to Leo. In his letter, Schwalb rejected both the request and its premise — that any probe might be politically motivated. “Contrary to your letter’s suggestion, [the office] is committed to the impartial pursuit of justice, without regard to political affiliation or motivation and without fear or favor,” wrote Schwalb. It’s the latest attempt by Leo allies to throw sand in the gears of Schwalb’s investigation. (Though in keeping with law enforcement protocol, Schwalb still has not confirmed or denied its existence.) Whether the probe uncovers wrongdoing is significant given the sheer scale of Leo’s work: He is also the beneficiary of a $1.6 billion contribution, believed to be the biggest political donation in U.S. history. Jordan and Comer had claimed it appears Schwalb does not have jurisdiction to investigate nonprofits and other entities that were incorporated outside of Washington, D.C. “I am concerned that your letter may misapprehend jurisdiction over nonprofit organizations operating in the District,” Schwalb said. “No corporation, whether for-profit or not-for-profit, is exempt from the laws of a jurisdiction in which it chooses to be present and do business.” Leo’s attorney previously told POLITICO his client is not cooperating with Schwalb’s investigation. Leo’s network of nonprofits, often referred to as “dark money” groups, are exempt from tax and do not have to disclose their donors because they are registered as charitable or social welfare organizations. They spent hundreds of millions of dollars on campaigns to promote the nominations of Justices Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett. But many partisan groups operate as nonprofits shielded from federal tax, and that’s not why Schwalb is investigating. In March. POLITICO reported that a total of $43 million flowed to Leo’s company, CRC Advisors, over two years and that the bulk of it came from one of his charitable groups, The 85 Fund. A few months later, a Democrat-aligned watchdog group filed a complaint with the IRS and with Schwalb’s office alleging the total amount of money that flowed from Leo-aligned nonprofits to his for-profit firms was $73 million over six years beginning in 2016. That’s the year Leo was tapped as an unpaid judicial adviser to former President Donald Trump.
**
DC AG Schwalb speaks on DC's RealPage price fixing suit (CNBC)
https://www.cnbc.com/video/2023/11/01/d-c-attorney-general-brian-schwalb-probes-alleged-rent-fixing-scheme-by-landlords.html
DC's press release in RealPage price fixing case
https://oag.dc.gov/release/attorney-general-schwalb-sues-realpage-residential
Excerpt:
“RealPage and the defendant landlords illegally colluded to artificially raise rents by participating in a centralized, anticompetitive scheme, causing District residents to pay millions of dollars above fair market prices,” said AG Schwalb. “Defendants’ coordinated and anticompetitive conduct amounts to a District-wide housing cartel. At a time when affordable housing in DC is increasingly scarce, our office will continue to use the law to fight for fair market conditions and ensure that District residents and law-abiding businesses are protected.”
* *
Specifically, OAG’s lawsuit alleges that:
DC's filed Complaint in RealPage price fixing case
https://oag.dc.gov/sites/default/files/2023-11/DC%20OAG%20RealPage%20Complaint%20-%20Filed.pdf
DAR Comment
There are several legal actions facing RealPage. One is the lawsuit filed by the D.C. Attorney General in November 2023, accusing 14 landlords in the district and RealPage of illegal rent hikes.
Another is the lawsuit filed by a group of renters in San Diego in October 2022, alleging a nationwide conspiracy among RealPage and major residential landlords.
RealPage is also under investigation by the Federal Trade Commission, which issued a civil investigative demand to the company in September 2022.
The DC lawsuit underlines the special role played by state-level AGs in antitrust matters. There is a local element to real estate markets, and state level prosecutors are well positioned to effectively investigate local markets.
On the merits, the RealPage investigations have attracted a lot of attention because of the Artificial Intelligence label put on the RealPage business model. However, a significant part of the relevant real estate pricing information is in the public domain, of the sort used by real estate pricing information sources like Zillow. Of course, other relevant real estate pricing information will be confidential.
A particularly powerful allegation in the DC Complaint is that the landlords who work with RealPage actively collude. For example:
B. Defendant Landlords Agree Among Themselves to Forgo Competition and Set Rents Using RealPage’s RM Software.
72. Defendant Landlords not only agreed with RealPage to impose RealPage-generated rents, but also agreed with one another to do so. 23
73. As Ray Thornton, former Vice President of Information Technology at Colonial Properties (which was subsequently acquired by Defendant MAA in 2013) admitted, Colonial only adopted LRO after consulting with “peers that we trusted” who reported “some really good numbers.”
74. Similarly, a former employee of both RealPage and multiple property management companies reported numerous in-person meetings among Participating Landlords (including Defendants Gables and Equity) specifically for the purpose of exchanging pricing data. These landlords were not acting as true competitors, rather the meetings occurred because, “[w]e didn’t want to do damage to each other.”
These allegations of active collusion, if proven, are damning, without regard to whether the shared information was generated by esoteric AI technology or human clerks wearing green eyeshades.
DR
https://www.cnbc.com/video/2023/11/01/d-c-attorney-general-brian-schwalb-probes-alleged-rent-fixing-scheme-by-landlords.html
DC's press release in RealPage price fixing case
https://oag.dc.gov/release/attorney-general-schwalb-sues-realpage-residential
Excerpt:
“RealPage and the defendant landlords illegally colluded to artificially raise rents by participating in a centralized, anticompetitive scheme, causing District residents to pay millions of dollars above fair market prices,” said AG Schwalb. “Defendants’ coordinated and anticompetitive conduct amounts to a District-wide housing cartel. At a time when affordable housing in DC is increasingly scarce, our office will continue to use the law to fight for fair market conditions and ensure that District residents and law-abiding businesses are protected.”
* *
Specifically, OAG’s lawsuit alleges that:
- RealPage and the defendant District landlords colluded to use RealPage’s “Revenue Management” technology, making it market-dominant. RealPage contracts with property managers and owners to provide its software and services. The company’s unparalleled access to proprietary data and significant market share have positioned it as the “Big Tech” company of rental housing.
- The defendant landlords illegally coordinated to forgo competition and share sensitive company data and delegate rent-setting authority to RealPage in order to raise rents. RealPage and the defendant landlords transformed a competitive marketplace into one in which competing landlords work together for their collective benefit at the expense of renters. Their anticompetitive agreement is reflected in documents, has been publicly acknowledged by cartel members, and is closely policed by RealPage to ensure compliance. Participating landlords worked to recruit additional landlords into the illegal scheme, providing written and oral testimonials touting the benefits of using RealPage’s technology to inflate rent prices and increase revenues.
- The defendants’ illegal agreement to share information and collectively set rents led to artificially inflated rental prices and caused District tenants to pay millions of dollars above market rates. RealPage widely touts the impact of its products, publicly advertising revenue increases of 2-7%. Where RealPage’s market penetration increases, price effects tend to extend beyond just the users of the price-setting software itself, potentially impacting all market participants, illustrating the significant, widespread effects of the adoption of RealPage’s algorithmic pricing.
- With this lawsuit, OAG is seeking to:
- Stop RealPage and the defendant landlords from engaging in anticompetitive behaviors that artificially inflate rent prices for District tenants.
- Appoint a corporate monitor to ensure that RealPage and the defendant landlords do not engage in further anticompetitive misconduct.
- Secure financial compensation for the District and residents whose rents were unlawfully raised.
DC's filed Complaint in RealPage price fixing case
https://oag.dc.gov/sites/default/files/2023-11/DC%20OAG%20RealPage%20Complaint%20-%20Filed.pdf
DAR Comment
There are several legal actions facing RealPage. One is the lawsuit filed by the D.C. Attorney General in November 2023, accusing 14 landlords in the district and RealPage of illegal rent hikes.
Another is the lawsuit filed by a group of renters in San Diego in October 2022, alleging a nationwide conspiracy among RealPage and major residential landlords.
RealPage is also under investigation by the Federal Trade Commission, which issued a civil investigative demand to the company in September 2022.
The DC lawsuit underlines the special role played by state-level AGs in antitrust matters. There is a local element to real estate markets, and state level prosecutors are well positioned to effectively investigate local markets.
On the merits, the RealPage investigations have attracted a lot of attention because of the Artificial Intelligence label put on the RealPage business model. However, a significant part of the relevant real estate pricing information is in the public domain, of the sort used by real estate pricing information sources like Zillow. Of course, other relevant real estate pricing information will be confidential.
A particularly powerful allegation in the DC Complaint is that the landlords who work with RealPage actively collude. For example:
B. Defendant Landlords Agree Among Themselves to Forgo Competition and Set Rents Using RealPage’s RM Software.
72. Defendant Landlords not only agreed with RealPage to impose RealPage-generated rents, but also agreed with one another to do so. 23
73. As Ray Thornton, former Vice President of Information Technology at Colonial Properties (which was subsequently acquired by Defendant MAA in 2013) admitted, Colonial only adopted LRO after consulting with “peers that we trusted” who reported “some really good numbers.”
74. Similarly, a former employee of both RealPage and multiple property management companies reported numerous in-person meetings among Participating Landlords (including Defendants Gables and Equity) specifically for the purpose of exchanging pricing data. These landlords were not acting as true competitors, rather the meetings occurred because, “[w]e didn’t want to do damage to each other.”
These allegations of active collusion, if proven, are damning, without regard to whether the shared information was generated by esoteric AI technology or human clerks wearing green eyeshades.
DR
DC joins State AGs in Challenge to Major League Baseball Antitrust exemption
Eighteen attorneys general, including the DC AG's office, have signed a brief urging the United States Supreme Court to hear a challenge of Major League Baseball's antitrust exemption.
Led by Connecticut Attorney General William Tong, the group of 18 bipartisan AG's submitted an amicus brief in support of former minor league baseball team Tri-City ValleyCats and Oneonta Athletic Corporation -- which owns the Norwich Sea Unicorns.
The two teams once had MLB team affiliations. However, in 2020 MLB teams agreed to cut affiliated minor league teams from 160 to 120 -- with the ValleyCats and the Sea Unicorns among the 40 teams across 23 states that were trimmed.
"Baseball is big business. There's no rational reason why baseball -- above any other sport, or any other business -- should be insulated from federal and state antitrust enforcement," Attorney General Tong said. "The Norwich Sea Unicorns deserve the same, fair shot at recruiting talent and Major League support as any other team. It's time to reconsider and overturn the antiquated and unfair baseball antitrust exemption."
Major League Baseball has held an antitrust exemption since 1922 after the US Supreme Court ruled that baseball fell outside the scope of
antitrust laws.
Along with Connecticut, Pennsylvania and New Jersey, the following AGs signed the brief: Arizona, Colorado, Indiana, Kansas, Louisiana, Massachusetts, Minnesota, Montana, New Mexico, Tennessee, Vermont, Virginia, West Virginia and the District of Columbia.
The brief filed by the AGs comes days after Senators Mike Lee (Utah) and Marco Rubio (Florida) along with Representatives Paul Tonko (New York) and Joe Courtney (Connecticut) filed their own amicus brief to overturn the antitrust exemption.
Credit: CBS News
EXCERPT FROM AG BRIEF
SUMMARY OF THE ARGUMENT
Federal law cannot preempt historic state police-power prerogatives absent an unmistakably clear Congressional command. Antitrust enforcement is undisputedly a function of states’ historic police powers. But Congress never spoke at all—much less clearly and unmistakably—to federal preemption of state antitrust enforcement against the business of baseball. This Court created the exemption and applied it against the states despite Congressional silence and the federalism canon. Since then, lower federal courts and state courts have applied the exemption to thwart state investigations into, and enforcement against, the business of baseball. Inappropriate preemption is just one outgrowth of the flawed logic that underlies the mistaken antitrust exemption for the business of baseball. This Court should grant certiorari and end the aberrational exemption, which has become inextricably intertwined
5 with an incursion of federal judge-made law into a protected area of state sovereignty.
Tri-City ValleyCats, Inc., et al, Petitioners vs. The Office of the Commissioner of Baseball, Docket No. 23-283 (U.S. Sep 22, 2023), Court Docket
Eighteen attorneys general, including the DC AG's office, have signed a brief urging the United States Supreme Court to hear a challenge of Major League Baseball's antitrust exemption.
Led by Connecticut Attorney General William Tong, the group of 18 bipartisan AG's submitted an amicus brief in support of former minor league baseball team Tri-City ValleyCats and Oneonta Athletic Corporation -- which owns the Norwich Sea Unicorns.
The two teams once had MLB team affiliations. However, in 2020 MLB teams agreed to cut affiliated minor league teams from 160 to 120 -- with the ValleyCats and the Sea Unicorns among the 40 teams across 23 states that were trimmed.
"Baseball is big business. There's no rational reason why baseball -- above any other sport, or any other business -- should be insulated from federal and state antitrust enforcement," Attorney General Tong said. "The Norwich Sea Unicorns deserve the same, fair shot at recruiting talent and Major League support as any other team. It's time to reconsider and overturn the antiquated and unfair baseball antitrust exemption."
Major League Baseball has held an antitrust exemption since 1922 after the US Supreme Court ruled that baseball fell outside the scope of
antitrust laws.
Along with Connecticut, Pennsylvania and New Jersey, the following AGs signed the brief: Arizona, Colorado, Indiana, Kansas, Louisiana, Massachusetts, Minnesota, Montana, New Mexico, Tennessee, Vermont, Virginia, West Virginia and the District of Columbia.
The brief filed by the AGs comes days after Senators Mike Lee (Utah) and Marco Rubio (Florida) along with Representatives Paul Tonko (New York) and Joe Courtney (Connecticut) filed their own amicus brief to overturn the antitrust exemption.
Credit: CBS News
EXCERPT FROM AG BRIEF
SUMMARY OF THE ARGUMENT
Federal law cannot preempt historic state police-power prerogatives absent an unmistakably clear Congressional command. Antitrust enforcement is undisputedly a function of states’ historic police powers. But Congress never spoke at all—much less clearly and unmistakably—to federal preemption of state antitrust enforcement against the business of baseball. This Court created the exemption and applied it against the states despite Congressional silence and the federalism canon. Since then, lower federal courts and state courts have applied the exemption to thwart state investigations into, and enforcement against, the business of baseball. Inappropriate preemption is just one outgrowth of the flawed logic that underlies the mistaken antitrust exemption for the business of baseball. This Court should grant certiorari and end the aberrational exemption, which has become inextricably intertwined
5 with an incursion of federal judge-made law into a protected area of state sovereignty.
Tri-City ValleyCats, Inc., et al, Petitioners vs. The Office of the Commissioner of Baseball, Docket No. 23-283 (U.S. Sep 22, 2023), Court Docket
California Attorney General Rob Bonta reportedly is preparing to file a lawsuit to challenge Kroger’s planned $24.6 billion acquisition of Albertsons 123. The lawsuit is being considered on the grounds that the deal could potentially harm consumers and workers
“We are moving toward acting,” Bonta told reporters in Washington, according to a Bloomberg report. “Right now, there’s not a lot of reason not to sue.”
Bonta said he met with US Federal Trade Commission Chair Lina Khan and discussed the transaction with her.
The report came as Kroger (KR) has been working to try to appease the FTC so the antitrust regulator can approve the deal, including a plan announced last month to sell 413 stores for $1.9 billion to C&S Wholesale Grocers.
“We are moving toward acting,” Bonta told reporters in Washington, according to a Bloomberg report. “Right now, there’s not a lot of reason not to sue.”
Bonta said he met with US Federal Trade Commission Chair Lina Khan and discussed the transaction with her.
The report came as Kroger (KR) has been working to try to appease the FTC so the antitrust regulator can approve the deal, including a plan announced last month to sell 413 stores for $1.9 billion to C&S Wholesale Grocers.
D.C. Mayor Muriel Bowser introduced a revised public safety package on Monday
(Excerpts from DCist)
The package rrenegs on several police reform measures passed in the wake of George Floyd’s murder in 2020, including restrictions to use-of-force, vehicular pursuits, and body-worn camera footage requirements.
The ACT Now Act of 2023 (or Addressing Crime Trends Now Act) would also create new penalties for organized retail theft, allow the police chief to declare certain areas “drug-free zones,” and reinstate a law that makes it illegal to wear a mask for committing a crime.
The emphasis on policing — and criticisms of the reforms instituted in the council’s Comprehensive Policing and Justice Reform Amendment Act — follow the mayor’s posture this year regarding crime reduction, which has largely centered around enforcement and heightened criminal penalties.
“The department is dealing with some of the negative consequences of the Comprehensive Policing and Justice Reform Amendment Act,” Bowser said at the 4th District Police Station in Ward 4 alongside interim Police Chief Pamela Smith and Deputy Mayor of Public Safety and Justice Lindsey Appiah. “Some of the changes that were made just don’t match the daily practice of safe and effective policing.”
Bowser’s tough-on-crime proposal is the second such legislative push made by the mayor this year attempting to address crime, as the city records its highest number of homicides in a single year since the 1990s. It also comes as city officials face pressure from residents (and frequent, sometimes nonsensical or factually inaccurate chastisements from Republicans on Capitol Hill) to address the violence.
In the spring, the mayor urged the council to pass her package of laws to increase pretrial detention and stiffen gun penalties. A narrower version of that legislation, introduced by Ward 2 Councilmember Brooke Pinto, passed on an emergency basis. Local lawmakers’ attempts to solve these issues have brought city-wide frustrations to the fore as some residents call for harsher penalties and surveillance, some call for more resources poured into the systemic issues that underlie violence, and many say they want both as a part of nuanced solutions.
“You’ve heard me say repeatedly this year, we must have a policy environment that supports accountability,” Bowser said. “This perception that people have that you can commit a brazen crime and get away with it has got to stop.”
In a statement to DCist/WAMU, Ward 2 Councilmember Brooke Pinto, who chairs the judiciary committee, said she had already spoken to the mayor about making sure the bill gets a hearing this fall.
Speaking at the press conference, Ward 4 Councilmember Janeese Lewis George — who has previously pushed back against Bowser and Pinto’s tough-on-crime policies like expanding pretrial detention — did not comment on any specific provisions but tried to present a united front, alongside At-Large members Kenyan McDuffie and Anita Bonds. Lewis George’s office could not provide further comment to DCist/WAMU on Monday, as she was still reviewing the full legislation.
“It can’t be the council versus the mayor versus the judges versus the [U.S. Attorney for D.C.],” she said. “It has to be all of us, united together working together. That’s the environment we have to be in.”
Several aspects of the mayor’s proposal narrow the scope of the permanent police reform measures passed by the Council in late 2022.
* * *
Two Media Views on Violent Crime In D.C., WSJ and Axios
https://www.wsj.com/us-news/violent-crime-is-surging-in-d-c-this-year-we-just-stood-there-and-screamed-380f3c69?mod=wknd_pos1&mod=wknd_pos1 [paywall]
By Scott Calvert
https://www.axios.com/local/washington-dc/2023/10/03/dc-crime-by-neighborhood-2023
by Cuneyt Dil
DAR Comment: Not too surprisingly, the Wall Street Journal is on the bandwagon of complaints about crime in big cities, particularly Washington DC. An excerpt from a WSJ article on crime in DC appears below. To the credit of the WSJ, there is some useful discussion of crime facts and of the crime fighting problems faced by DC government.
In the District, most crimes committed by adults are prosecuted by an appointed U.S. attorney, not an elected local district attorney. The local DC AG is allowed to prosecute only misdemeanor and similar lesser crimes , while higher level felony crimes are prosecuted only by the federal US Attorney. See https://oag.dc.gov/about-oag/what-we-do also https://www.justice.gov/usao-dc
The WSJ points out that U.S. Attorney Matthew Graves has taken flak for declining during fiscal year 2022 to charge, at the time of arrest, 67% of offenses that would have been tried by a local prosecutor in D.C. Superior Court, the usual venue for non-federal crimes. Graves, in office since 2021, said the rate is driven by several factors beyond his control, one being the D.C. crime lab’s lack of accreditation.
Both problems pointed out by the WSJ deserve attention. A disfunctional D.C. crime lab should be made functional, or federal resources should be allowed to take on the crime lab role. It is unusual for local crimes above the misdemeanor level to be prosecuted only by a federal prosecutor rather than a local government prosecutor, and if that unusual allocation of authority translates into reluctance to prosecute, then the allocation should be changed. Whatever office runs higher-than-misdemeanor felony prosecutions should be well funded and committed to its prosecutor's role. The US Attorney in Maryland has some leeway to decline felony prosecutions that the DC US Attorney does not, because in Maryland there are local prosecutors who share jurisdiction to prosecute felonies.
The Axios article makes an important point about DC crime statistics. Most crime in DC takes place west of Rock Creek Park, an area where the people are less wealthy and more likely to be people of color than the area east of Rock Creek Park. To some extent crime in DC is a tale of two cities within one jurisdiction.
Excerpts from WSJ:
The district has had 216 homicides this year, 38% more than at this point in 2022—and more than any full year from 2004 to 2020, police data show. By contrast, killings are down this year in big cities from coast to coast: by 24% in Los Angeles, 19% in Houston, 18% in Philadelphia, 12% in Chicago, and 11% in New York City.
“I definitely think public safety has been and continues to be the No. 1 concern for district residents,” said Lindsey Appiah, D.C.’s deputy mayor for public safety. She said other types of crime drive fear, too. Robberies are up 70%, and car thefts have more than doubled.
District officials have added more visible police patrols and enforced the juvenile curfew. The D.C. Council in July passed emergency legislation making it easier to detain criminal suspects pretrial. Appiah said violent crime fell after the law took effect, and the jail population swelled by about 25%.
House Republicans in March blocked an overhaul of D.C.’s antiquated criminal code, calling the Democratic-led district’s new code soft on crime. Local officials said the lawmakers misrepresented the code overhaul.
No single reason explains D.C.’s violent crime increase, law-enforcement officials say. They cite factors such as the steady flow of illegal guns, a depleted police force and lingering effects of pandemic disruptions—issues not unique to Washington. They also note homicides in D.C. fell 10% in 2022, a steeper drop than most other big cities saw.
But in the district, most crimes committed by adults are prosecuted by an appointed U.S. attorney, not an elected district attorney. U.S. Attorney Matthew Graves has taken flak for declining during fiscal year 2022 to charge, at the time of arrest, 67% of offenses that would have been tried in D.C. Superior Court, the usual venue for non-federal crimes.
Graves, in office since 2021, said the rate is driven by several factors beyond his control, one being the D.C. crime lab’s lack of accreditation. He also said his staff’s charging rate was higher for the fiscal year that ended Sept. 30, though his office hasn’t released figures.
Excerpt from Axios:
D.C.'s crime map is a tale of two cities divided by Rock Creek, with violence increasing most sharply east of the park.
Why it matters: Most of this year's 212 homicides and gunfire have occurred in Northeast and Southeast, especially hurting families and the lives of young people in D.C.'s communities of color.
By the numbers: Violent crime is up 38% in Washington compared to the same time last year.
(Excerpts from DCist)
The package rrenegs on several police reform measures passed in the wake of George Floyd’s murder in 2020, including restrictions to use-of-force, vehicular pursuits, and body-worn camera footage requirements.
The ACT Now Act of 2023 (or Addressing Crime Trends Now Act) would also create new penalties for organized retail theft, allow the police chief to declare certain areas “drug-free zones,” and reinstate a law that makes it illegal to wear a mask for committing a crime.
The emphasis on policing — and criticisms of the reforms instituted in the council’s Comprehensive Policing and Justice Reform Amendment Act — follow the mayor’s posture this year regarding crime reduction, which has largely centered around enforcement and heightened criminal penalties.
“The department is dealing with some of the negative consequences of the Comprehensive Policing and Justice Reform Amendment Act,” Bowser said at the 4th District Police Station in Ward 4 alongside interim Police Chief Pamela Smith and Deputy Mayor of Public Safety and Justice Lindsey Appiah. “Some of the changes that were made just don’t match the daily practice of safe and effective policing.”
Bowser’s tough-on-crime proposal is the second such legislative push made by the mayor this year attempting to address crime, as the city records its highest number of homicides in a single year since the 1990s. It also comes as city officials face pressure from residents (and frequent, sometimes nonsensical or factually inaccurate chastisements from Republicans on Capitol Hill) to address the violence.
In the spring, the mayor urged the council to pass her package of laws to increase pretrial detention and stiffen gun penalties. A narrower version of that legislation, introduced by Ward 2 Councilmember Brooke Pinto, passed on an emergency basis. Local lawmakers’ attempts to solve these issues have brought city-wide frustrations to the fore as some residents call for harsher penalties and surveillance, some call for more resources poured into the systemic issues that underlie violence, and many say they want both as a part of nuanced solutions.
“You’ve heard me say repeatedly this year, we must have a policy environment that supports accountability,” Bowser said. “This perception that people have that you can commit a brazen crime and get away with it has got to stop.”
In a statement to DCist/WAMU, Ward 2 Councilmember Brooke Pinto, who chairs the judiciary committee, said she had already spoken to the mayor about making sure the bill gets a hearing this fall.
Speaking at the press conference, Ward 4 Councilmember Janeese Lewis George — who has previously pushed back against Bowser and Pinto’s tough-on-crime policies like expanding pretrial detention — did not comment on any specific provisions but tried to present a united front, alongside At-Large members Kenyan McDuffie and Anita Bonds. Lewis George’s office could not provide further comment to DCist/WAMU on Monday, as she was still reviewing the full legislation.
“It can’t be the council versus the mayor versus the judges versus the [U.S. Attorney for D.C.],” she said. “It has to be all of us, united together working together. That’s the environment we have to be in.”
Several aspects of the mayor’s proposal narrow the scope of the permanent police reform measures passed by the Council in late 2022.
* * *
Two Media Views on Violent Crime In D.C., WSJ and Axios
https://www.wsj.com/us-news/violent-crime-is-surging-in-d-c-this-year-we-just-stood-there-and-screamed-380f3c69?mod=wknd_pos1&mod=wknd_pos1 [paywall]
By Scott Calvert
https://www.axios.com/local/washington-dc/2023/10/03/dc-crime-by-neighborhood-2023
by Cuneyt Dil
DAR Comment: Not too surprisingly, the Wall Street Journal is on the bandwagon of complaints about crime in big cities, particularly Washington DC. An excerpt from a WSJ article on crime in DC appears below. To the credit of the WSJ, there is some useful discussion of crime facts and of the crime fighting problems faced by DC government.
In the District, most crimes committed by adults are prosecuted by an appointed U.S. attorney, not an elected local district attorney. The local DC AG is allowed to prosecute only misdemeanor and similar lesser crimes , while higher level felony crimes are prosecuted only by the federal US Attorney. See https://oag.dc.gov/about-oag/what-we-do also https://www.justice.gov/usao-dc
The WSJ points out that U.S. Attorney Matthew Graves has taken flak for declining during fiscal year 2022 to charge, at the time of arrest, 67% of offenses that would have been tried by a local prosecutor in D.C. Superior Court, the usual venue for non-federal crimes. Graves, in office since 2021, said the rate is driven by several factors beyond his control, one being the D.C. crime lab’s lack of accreditation.
Both problems pointed out by the WSJ deserve attention. A disfunctional D.C. crime lab should be made functional, or federal resources should be allowed to take on the crime lab role. It is unusual for local crimes above the misdemeanor level to be prosecuted only by a federal prosecutor rather than a local government prosecutor, and if that unusual allocation of authority translates into reluctance to prosecute, then the allocation should be changed. Whatever office runs higher-than-misdemeanor felony prosecutions should be well funded and committed to its prosecutor's role. The US Attorney in Maryland has some leeway to decline felony prosecutions that the DC US Attorney does not, because in Maryland there are local prosecutors who share jurisdiction to prosecute felonies.
The Axios article makes an important point about DC crime statistics. Most crime in DC takes place west of Rock Creek Park, an area where the people are less wealthy and more likely to be people of color than the area east of Rock Creek Park. To some extent crime in DC is a tale of two cities within one jurisdiction.
Excerpts from WSJ:
The district has had 216 homicides this year, 38% more than at this point in 2022—and more than any full year from 2004 to 2020, police data show. By contrast, killings are down this year in big cities from coast to coast: by 24% in Los Angeles, 19% in Houston, 18% in Philadelphia, 12% in Chicago, and 11% in New York City.
“I definitely think public safety has been and continues to be the No. 1 concern for district residents,” said Lindsey Appiah, D.C.’s deputy mayor for public safety. She said other types of crime drive fear, too. Robberies are up 70%, and car thefts have more than doubled.
District officials have added more visible police patrols and enforced the juvenile curfew. The D.C. Council in July passed emergency legislation making it easier to detain criminal suspects pretrial. Appiah said violent crime fell after the law took effect, and the jail population swelled by about 25%.
House Republicans in March blocked an overhaul of D.C.’s antiquated criminal code, calling the Democratic-led district’s new code soft on crime. Local officials said the lawmakers misrepresented the code overhaul.
No single reason explains D.C.’s violent crime increase, law-enforcement officials say. They cite factors such as the steady flow of illegal guns, a depleted police force and lingering effects of pandemic disruptions—issues not unique to Washington. They also note homicides in D.C. fell 10% in 2022, a steeper drop than most other big cities saw.
But in the district, most crimes committed by adults are prosecuted by an appointed U.S. attorney, not an elected district attorney. U.S. Attorney Matthew Graves has taken flak for declining during fiscal year 2022 to charge, at the time of arrest, 67% of offenses that would have been tried in D.C. Superior Court, the usual venue for non-federal crimes.
Graves, in office since 2021, said the rate is driven by several factors beyond his control, one being the D.C. crime lab’s lack of accreditation. He also said his staff’s charging rate was higher for the fiscal year that ended Sept. 30, though his office hasn’t released figures.
Excerpt from Axios:
D.C.'s crime map is a tale of two cities divided by Rock Creek, with violence increasing most sharply east of the park.
Why it matters: Most of this year's 212 homicides and gunfire have occurred in Northeast and Southeast, especially hurting families and the lives of young people in D.C.'s communities of color.
By the numbers: Violent crime is up 38% in Washington compared to the same time last year.
- The Anacostia and Fairlawn area has recorded 10 homicides so far this year, one of the highest concentrations in the city.
- The Brentwood area in Northeast has seen nine homicides.
- In Adams Morgan, robberies soared 95% from last year.
- But motor vehicle thefts in Ward 3, which includes upper Wisconsin and Connecticut avenues, have increased by 48 incidents compared to last year.'
- A mix of residents interviewed by the Washington Post last month showed a portrait of a city shaken by the violence, perhaps most intensely since the much more violent 1980s and 1990s.
- For example: With many teenagers becoming victims of crime, parents are worried about the safety of children traveling to flag football games in Southeast, Derek Floyd, a coach at Barry Farm Recreation Center in Ward 8, told the Post.
- Some teens are staying away from practices too, lest they become targets because "people know where they are," he says.
DC Bar Podcast: Revising D.C.'s Criminal Code: Updating Recent Events and Next Steps
Ann Wilcox of the D.C. Affairs Community interviews Jinwoo Park, Esq, Executive Director of the Criminal Code Reform Commission, an independent agency of DC Govt. Mr. Park describes the criminal code reform framework that was formulated over several years and forwarded to the Congress in 2023 (later disapproved by the Congress). We discuss that process, revised bills that passed the DC Council this summer, and the path forward for comprehensive criminal code reform.
Listen to the episode and subscribe to Brief Encounters at https://anchor.fm/DCBar or wherever you access your podcasts.
Jinwoo Park is the Executive Director for the DC Criminal Code Reform Commission. Prior to his appointment as director, he served as an attorney advisor to the CCRC, and previously served as a staff attorney for the DC Sentencing Commission. He has also clerked for judges in DC Superior Court and the DC Court of Appeals.
Ann Wilcox is a member of the Steering Committee of the DC Affairs Community. She is an attorney who has practiced in DC Superior Court and engages in public interest law practice. She is also active in community and non-profit organizations.
Ann Wilcox of the D.C. Affairs Community interviews Jinwoo Park, Esq, Executive Director of the Criminal Code Reform Commission, an independent agency of DC Govt. Mr. Park describes the criminal code reform framework that was formulated over several years and forwarded to the Congress in 2023 (later disapproved by the Congress). We discuss that process, revised bills that passed the DC Council this summer, and the path forward for comprehensive criminal code reform.
Listen to the episode and subscribe to Brief Encounters at https://anchor.fm/DCBar or wherever you access your podcasts.
Jinwoo Park is the Executive Director for the DC Criminal Code Reform Commission. Prior to his appointment as director, he served as an attorney advisor to the CCRC, and previously served as a staff attorney for the DC Sentencing Commission. He has also clerked for judges in DC Superior Court and the DC Court of Appeals.
Ann Wilcox is a member of the Steering Committee of the DC Affairs Community. She is an attorney who has practiced in DC Superior Court and engages in public interest law practice. She is also active in community and non-profit organizations.
International law and local legal issues
Recently I was called upon to think about the relationship between international law issues and local law issues. On reflection I realized that there are many local and pragmatic legal issues connected with international law.
For example, international law deals with technology challenges from Chinese companies like Huawei, but local jurisdictions are responsible for related policy decisions. According to a report from Georgetown’s Center for Security and Emergency Technology (see the report, https://cset.georgetown.edu/publication/banned-in-d-c/0), 1,681 state and local governments nationwide spent about $45 million on equipment made by five firms — Huawei, ZTE, Hikvision, Dahua and Hytera — even as the U.S. has since 2018 banned federal agencies from doing so, citing those companies’ potential as conduits for espionage.
Most recently, a batttery factory planned in Michigan by a Chinese company, Grotian, has caused a local backlash. The Chinese company plans to build a $2.4 billion electric vehicle battery factory in Green Charter Township, Michigan, with state subsidies and tax breaks. Many residents oppose the project, fearing that it is a dangerous infiltration by the Chinese Communist Party and that it will harm the environment and national security. The opposition has led to protests, death threats, lawsuits and a recall election to unseat the local officials who backed the project.
The debate reflects a broader trend of rising anti-China sentiment and scrutiny of Chinese investments in the United States, especially in the renewable energy sector.
In another sector, international law deals with security threats from media platform technology companies like TikTok, but again there are local and pragmatic legal issues. The Washington Post reports that nearly two dozen state governors and officials have imposed government restrictions on TikTok in their states. The bans range from prohibiting the device on government internet networks to restricting state employees from using or downloading the app on state devices. Montana’s bans are uniquely broader, affecting non-government users.
Climate change is a topic that nations negotiate, but it is also a topic that has local aspects. For example, DC government has a formal climate plan. The plan’s introduction explains that In the past several years, the District has seen record-breaking extreme weather like heat waves and snowstorms, higher tides caused by rising sea level, heavy rains and flooding, and warmer average temperatures and two to three times as many dangerously hot days: “Climate Ready DC is the District’s plan to adapt to our changing climate. . . .Climate adaptation means taking action today to prepare people, homes, communities, businesses and infrastructure for the potential impacts of climate change.” See https://sustainable.dc.gov/climateready
Problems of the unhoused and underemployed, including immigrants, are another example of broad issues that have an international aspect but also involve local and pragmatic legal issues.
And, of course, there are other examples.
Recently I was called upon to think about the relationship between international law issues and local law issues. On reflection I realized that there are many local and pragmatic legal issues connected with international law.
For example, international law deals with technology challenges from Chinese companies like Huawei, but local jurisdictions are responsible for related policy decisions. According to a report from Georgetown’s Center for Security and Emergency Technology (see the report, https://cset.georgetown.edu/publication/banned-in-d-c/0), 1,681 state and local governments nationwide spent about $45 million on equipment made by five firms — Huawei, ZTE, Hikvision, Dahua and Hytera — even as the U.S. has since 2018 banned federal agencies from doing so, citing those companies’ potential as conduits for espionage.
Most recently, a batttery factory planned in Michigan by a Chinese company, Grotian, has caused a local backlash. The Chinese company plans to build a $2.4 billion electric vehicle battery factory in Green Charter Township, Michigan, with state subsidies and tax breaks. Many residents oppose the project, fearing that it is a dangerous infiltration by the Chinese Communist Party and that it will harm the environment and national security. The opposition has led to protests, death threats, lawsuits and a recall election to unseat the local officials who backed the project.
The debate reflects a broader trend of rising anti-China sentiment and scrutiny of Chinese investments in the United States, especially in the renewable energy sector.
In another sector, international law deals with security threats from media platform technology companies like TikTok, but again there are local and pragmatic legal issues. The Washington Post reports that nearly two dozen state governors and officials have imposed government restrictions on TikTok in their states. The bans range from prohibiting the device on government internet networks to restricting state employees from using or downloading the app on state devices. Montana’s bans are uniquely broader, affecting non-government users.
Climate change is a topic that nations negotiate, but it is also a topic that has local aspects. For example, DC government has a formal climate plan. The plan’s introduction explains that In the past several years, the District has seen record-breaking extreme weather like heat waves and snowstorms, higher tides caused by rising sea level, heavy rains and flooding, and warmer average temperatures and two to three times as many dangerously hot days: “Climate Ready DC is the District’s plan to adapt to our changing climate. . . .Climate adaptation means taking action today to prepare people, homes, communities, businesses and infrastructure for the potential impacts of climate change.” See https://sustainable.dc.gov/climateready
Problems of the unhoused and underemployed, including immigrants, are another example of broad issues that have an international aspect but also involve local and pragmatic legal issues.
And, of course, there are other examples.
The legacy of government corruption in New Jersey
I depart today from my usual focus on DC related legal issues to comment on New Jersey’s legacy of political corruption. I am from New Jersey, and worked as an Assistant U.S. Attorney in Newark, New Jersey in the late 1960s. I was aware of a venal level of corruption and organized crime involvement in local government at that time. Hollywood movies often romanticized and made light of the venal behavior. Current press reports suggest that vestiges of that legacy may remain.
A New York Times obituary for Frederick Lacey, who was appointed US Attorney for New Jersey in 1969, tells some of the story. See https://www.nytimes.com/2017/04/11/nyregion/frederick-b-lacey-dead-new-jersey-prosecutor-and-judge.html Here are some excerpts:
As an imposing, 6-foot-4 United States attorney for New Jersey, Mr. Lacey smashed the corrupt Democratic machines in Essex and Hudson Counties.
He successfully prosecuted Mayors Hugh J. Addonizio of Newark and Thomas J. Whelan of Jersey City; John V. Kenny, the Hudson County party boss; and Mafia leaders with whom local politicians, power brokers and officials conspired to plunder the public coffers.
Within four years, Mr. Lacey and his successor, Herbert J. Stern, won the convictions of three-dozen government officials after what Mr. Lacey called “the most intensive investigation ever conducted by the federal government in New Jersey” had uncovered graft “unmatched in anything in my experience.”
“Everything has a price on it,” he said at the time.
As a prosecutor Mr. Lacey was best known for battling mob bosses, among them Angelo DeCarlo, who was known as Gyp, and Ruggiero Boiardo, who was known as Richie the Boot.
“What was only speculation when I last was here is now established,” he said on returning to the prosecutor’s office in 1969. “There is such a phenomenon as organized crime. Call it the Mafia, call it Cosa Nostra, call it Organized Crime, it exists.”
Mr. Lacey fought to release hundreds of pages of transcripts of F.B.I. wiretaps to demonstrate the mob’s reach. (In one, Mr. DeCarlo was overheard urging support for [Newark Mayor] Mr. Addonizio’s political career, saying, “He’ll give us the city.”)
“Organized crime is, in the vernacular, taking us over,” Mr. Lacey warned.
The Times wrote that the tapes “surpassed the disclosures made in 1963 before a Senate committee by Joseph M. Valachi, the deserter from the Mafia,” and that by corralling the bosses and detailing the mob’s superstructure, Mr. Lacey and his team had succeeded in outlining “the most complete network of crime and official corruption that has yet to be brought to trial in an American courtroom.”
PS: I previously published a book review in the DC Bar Magazine of Herb Stern’s book Diary of a DA: A True Story of the Prosecutor Who Took on the Mob, Fought Corruption, and Won (Skyhorse Norton, dist.) which discusses the 1970s New Jersey political corruption cases in some detail. The book provides a detailed account of the government fight against powerful state government officials and the mafia during a time when assassinations were rampant, cities were burning in race riots, and racketeering and graft were prevalent in New Jersey .
I depart today from my usual focus on DC related legal issues to comment on New Jersey’s legacy of political corruption. I am from New Jersey, and worked as an Assistant U.S. Attorney in Newark, New Jersey in the late 1960s. I was aware of a venal level of corruption and organized crime involvement in local government at that time. Hollywood movies often romanticized and made light of the venal behavior. Current press reports suggest that vestiges of that legacy may remain.
A New York Times obituary for Frederick Lacey, who was appointed US Attorney for New Jersey in 1969, tells some of the story. See https://www.nytimes.com/2017/04/11/nyregion/frederick-b-lacey-dead-new-jersey-prosecutor-and-judge.html Here are some excerpts:
As an imposing, 6-foot-4 United States attorney for New Jersey, Mr. Lacey smashed the corrupt Democratic machines in Essex and Hudson Counties.
He successfully prosecuted Mayors Hugh J. Addonizio of Newark and Thomas J. Whelan of Jersey City; John V. Kenny, the Hudson County party boss; and Mafia leaders with whom local politicians, power brokers and officials conspired to plunder the public coffers.
Within four years, Mr. Lacey and his successor, Herbert J. Stern, won the convictions of three-dozen government officials after what Mr. Lacey called “the most intensive investigation ever conducted by the federal government in New Jersey” had uncovered graft “unmatched in anything in my experience.”
“Everything has a price on it,” he said at the time.
As a prosecutor Mr. Lacey was best known for battling mob bosses, among them Angelo DeCarlo, who was known as Gyp, and Ruggiero Boiardo, who was known as Richie the Boot.
“What was only speculation when I last was here is now established,” he said on returning to the prosecutor’s office in 1969. “There is such a phenomenon as organized crime. Call it the Mafia, call it Cosa Nostra, call it Organized Crime, it exists.”
Mr. Lacey fought to release hundreds of pages of transcripts of F.B.I. wiretaps to demonstrate the mob’s reach. (In one, Mr. DeCarlo was overheard urging support for [Newark Mayor] Mr. Addonizio’s political career, saying, “He’ll give us the city.”)
“Organized crime is, in the vernacular, taking us over,” Mr. Lacey warned.
The Times wrote that the tapes “surpassed the disclosures made in 1963 before a Senate committee by Joseph M. Valachi, the deserter from the Mafia,” and that by corralling the bosses and detailing the mob’s superstructure, Mr. Lacey and his team had succeeded in outlining “the most complete network of crime and official corruption that has yet to be brought to trial in an American courtroom.”
PS: I previously published a book review in the DC Bar Magazine of Herb Stern’s book Diary of a DA: A True Story of the Prosecutor Who Took on the Mob, Fought Corruption, and Won (Skyhorse Norton, dist.) which discusses the 1970s New Jersey political corruption cases in some detail. The book provides a detailed account of the government fight against powerful state government officials and the mafia during a time when assassinations were rampant, cities were burning in race riots, and racketeering and graft were prevalent in New Jersey .
Free Expression, Open Internet
Is Artificial Intelligence a New Gateway to Anticompetitive Collusion?
October 2, 2023 / George Slover https://cdt.org/staff/george-slover/
Also by CDT Intern Hannah Babinski
Roughly 85 percent of adults in the United States interact with the Internet on a daily basis.[1] Commerce over the Internet has in many ways made the lives of Americans easier, more convenient, and streamlined. But has it also opened the door for companies to utilize new and innovative technology to take advantage of their customers, suppliers, and workers by engaging in collusive price fixing? And if so, what can be done about it?
Antitrust scholars have been raising this question for several years,[2] but the new innovations in artificial intelligence are bringing renewed attention to it.
Under the U.S. antitrust laws, unlawful collusion – specifically, price fixing, the form of collusion we focus on here – encompasses any agreement among competing companies to set prices at inflated levels.[3] The law condemns collusion because it subverts the free market and denies consumers the benefits of prices determined by competition, where companies honestly compete against each other to win customers by offering more attractive products and services at more affordable prices.[4] The antitrust laws have traditionally drawn a distinction, for a mix of policy and practicality reasons, between price-fixing agreements and what is referred to as “conscious parallelism.” The distinction lies in that the latter can actually constitute honest competition, with companies separately and independently monitoring each other’s prices in order to look for opportunities to gain an advantage over their competitors and attract new customers.
The former, in contrast, is an agreement to avoid honest competition. Antitrust enforcers, and courts, have recognized that conscious parallelism is not without its problems. Companies can monitor each other’s prices in order to see how high they can inflate their own prices, and this can result in prices that are higher than if vigorous competition were taking place. Yet, enforcers and courts have concluded that it is impossible, as a practical matter, to identify and stop conscious parallelism that inflates prices without risking interfering with honest competitive responses to normal price and value fluctuations of goods and services.[5] So they look for indicators that the price monitoring and adjustments are not independent but rather are mutual, intended coordination.
This grey area between independent price monitoring in the interest of honest competition and orchestrated price coordination is also referred to as “tacit collusion” – recognizing that it has the same adverse effect on competition as intentional, “express” collusion, even though it is not treated as unlawful under the antitrust laws.[6]
The use of computer algorithms – and increasingly, their use in more sophisticated artificial intelligence – to manage companies’ determination of optimum pricing has re-opened the questions around tacit collusion. Is it technologically feasible for an algorithm to engineer inflated prices by tacit collusion? Does tacit collusion become easier and more likely with the aid of an algorithm? Where might it occur? How would it be detected by antitrust enforcers? Could current antitrust law be applied and adapted to better address the resulting harms to competition and consumers?
An algorithm can perform at light speed the component operations involved in determining optimum pricing – monitoring the prices of all competitors, and the purchases made at those prices, at various locations throughout a territory; calculating the effects of various changes in price; and adjusting accordingly. Because of this, the means of collusion are far more powerful, and the potential scale of harm is exponentially greater. Furthermore, the coordinated movements can be more subtle individually when they can occur multiple times every millisecond; this also makes them harder to detect.
In the past, collusive price coordination, whether express or tacit, has been shown to be easier to accomplish, and therefore more likely to occur, in markets where the following are true:
An algorithm could be a powerful tool in aid of a price-fixing agreement, by making it easier to monitor the marketplace, to calculate the inflated price to which all companies will agree, to detect when a company is not adhering to the agreed price, and to determine and impose an effective “punishment” in response.[8]
Some of the market characteristics noted above may not be as necessary for algorithmic collusion, thanks to the light-speed monitoring and adjustments that algorithms are capable of. For example, the products and services may not have to be as homogeneous, or priced exactly the same, as long as they are similar enough that consumers see them as reasonable substitutes for each other. An algorithm can more easily take into account variations and assign appropriate price differentials that still result in prices being inflated above their competitive market levels.
But if the use of an algorithm could facilitate coordinated pricing, it could also make it easier for enforcers to detect and prove it. Proving unlawful price fixing requires evidence of mutual anticompetitive intent – of a de facto agreement – a “meeting of the minds,” a mutually communicated understanding, a “conscious commitment to a common scheme.”[9] This evidence can be circumstantial, but if circumstantial evidence is relied upon, it cannot be equally consistent with conscious parallelism; it must suggest the existence of a de facto agreement.[10] This circumstantial evidence is likely to be present in a similar fashion whether or not an algorithm is used to facilitate the agreement.
But the use of an algorithm could make it easier for enforcers and courts to confidently ascribe anticompetitive intent to interactions that they previously had to give the benefit of the doubt and accept as procompetitive or benign – as mere conscious parallelism. An algorithm can provide a window into the mind of the programmer, almost like a diary entry or a “smoking gun” email communication – if enforcers know what to look for.For example, an algorithm could be programmed to test where the sustainable maximum price is, by experimenting with incremental price increases to see if other companies follow. Or it could be programmed to promptly follow another company’s price increase, but to be slower in following another company’s price decrease. Or it could be programmed to retaliate against another company’s price decrease with an even greater price decrease of its own, targeted at the other company and the places where it has most of its sales – thereby not only erasing the other company’s opportunity for increased sales it hoped to achieve by its price-cutting but punishing it even further by taking away some of its existing customers.
These anticompetitive actions, if performed discreetly by humans, could be difficult for enforcers to detect, and even more difficult to ascribe intent to. However, an algorithm’s code can provide a roadmap into the mind of the human programmer. And if the programmer was acting as the agent of the company using the algorithm, or acting at its request, the intent revealed in the programming could be ascribed to the company. Evidence of an agreement is still needed to prove a case of explicit unlawful collusion. But if more than one company is using the same algorithm, or algorithms designed in conjunction with each other, or algorithms programmed to monitor each other, it may be easier to infer an agreement by showing that both companies share the same anticompetitive intent.
Along with examining the algorithms’ code and how companies are using them, enforcers can also look for traditional tell-tale indicators of possible collusion as cause for closer investigation. For example, prices that seem “stickier” in staying high despite changes in cost or consumer demand.[11] There might also be a pattern of price changes suggesting retaliation against a price-cutter, and subsequent harmonization could be circumstantial evidence of an agreement between the price-cutter and the retaliator that brings the penitent price-cutter back into the collusive fold.
But what if there is no indication that the company or the programmer had premeditated intent for the algorithm to facilitate collusion? What if the initial programming was ostensibly neutral, and the algorithm has “figured out” on its own (i.e., through “machine learning”) how to coordinate the company’s pricing with other companies in a way that leads to everyone’s prices settling at higher levels, and with higher profits for all participating companies, as a result of their not competing?
Can the current antitrust laws effectively address these new challenges? What adjustments to those laws might be useful?
As explained above, an important part of the reason tacit collusion has been accepted, or acquiesced in, is that it is so difficult to confidently judge the motive for what appears to be coordinated pricing. And having the algorithm available to examine could help clarify that motive, allowing enforcers to identify coding instructions that are inconsistent with pricing competitively. So if two or more companies selling similar products or services are using algorithms that are programmed to enable anticompetitive pricing, that can be evidence of, at minimum, a deliberate facilitating practice that foreseeably leads to inflated prices. That might be a rule-of-reason violation, or it might even give rise to a presumption of a per se price-fixing agreement. With machine learning, on the other hand – where the algorithm is given general instructions to optimize pricing and “learns” on its own to do so through coordination with other companies’ pricing – the companies could try to further distance themselves from the algorithm’s actions.
They could claim that they did not set out to program their algorithm to coordinate with competitors to keep prices inflated and that they are as surprised as anyone that their algorithm may have figured out on its own how to do so. However, even in this situation, the algorithm provides a useful window. Here it’s a window that also enables the company using it – or the programmer on the company’s request – to monitor and make follow-up assessments of how the algorithm is operating in practice. So enforcers and courts could make a similar presumption that holds companies legally accountable for setting their pricing algorithms loose on the marketplace with a “set it and forget it” blessing, and never following up on the algorithm’s functioning and capability.
In order for these situations to give rise to antitrust liability, enforcers and the courts would need to recognize that the traditional reasons that conscious parallelism had to be given the benefit of the doubt no longer apply. Today, it is possible to “read the mind” of an algorithm, so the company employing it can be held accountable when it fails to do so in order to keep the algorithm from engaging in coordination that leads to inflating prices above competitive levels. This higher enforcement sensitivity enabled by “investigating the algorithm” would still be entirely consistent with traditional antitrust principles – still deferring to companies acting independently in the free marketplace to decide how to competitively offer their products and services. Enforcers, and the courts, would need to accept that a commensurate adjustment in interpreting existing law is warranted, along with developing more technologically sophisticated analytical techniques.
If enforcers and the courts are unwilling to take these interpretive steps, or if these interpretive steps prove ineffective, Congress should consider enacting legislation to clarify the law to better enable effective antitrust enforcement against collusion by algorithm, while holding to traditional antitrust principles.
Increased transparency, through required reporting of how algorithms are designed and used, could help facilitate the detection of collusion by algorithm.[12] (Proceeding with caution, mindful that increased transparency can be a double-edged sword, also potentially facilitating anticompetitive coordination among companies.) Enforcers could also educate themselves by using algorithmic models to simulate conditions conducive to algorithmic tacit collusion and run tests to determine if, when, and how it occurs.[13]
Unless enforcers and the courts act, or Congress does, algorithms have the potential to supercharge price coordination and to lead to widespread price hikes, aggrandizing company profits at the expense of consumers forced to pay more than they should.
[1] Andrew Perrin & Sara Atske, About Three-in-Ten U.S. Adults Say They are ‘Almost Constantly’ Online, Pew Rsch. Ctr. (Mar. 26, 2021), https://www.pewresearch.org/short-reads/2021/03/26/about-three-in-ten-u-s-adults-say-they-are-almost-constantly-online/.
[2] E.g., Ariel Ezrachi & Maurice E. Stucke, Artificial Intelligence & Collusion: When Computers Inhibit Competition, 2017 U. Ill. L. Rev. 1775 (2017); Federal Trade Commission, Hearings on Competition and Consumer Protection in the 21st Century, Hearing 7, Session 1, Algorithmic Collusion (Nov. 14, 2018), https://www.ftc.gov/media/71288.
[3] Collusion can also take place in the other direction, with companies as buyers, agreeing to keep the prices they pay for goods and services they buy, and the wages and benefits they pay their workers, at depressed levels. Platforms for commercial transactions are considered to be sellers of services to users on both sides of the platform. And there are other forms of collusion besides agreements directly about price. For example, companies can “allocate markets” as noncompete zones, by agreeing to sell to different sets of customers. Or they might agree to slow innovations and improvements in product and service quality to a pace that is more profitable for all of the colluding companies. All of these forms of collusion cause similar harm to competition and the free market. And they could all potentially be impacted by computer algorithms and artificial intelligence. Here, we focus on price-related collusion by companies acting as sellers of goods and services, which we will refer to as “price fixing.”)
[4] Price Fixing, Bid Rigging, and Market Allocation Schemes: What They Are and What to Look For, Dep’t. of Just. Antitrust Div. (2021), https://www.justice.gov/atr/file/810261/download.
[5] See, e.g., In re Text Messaging Antitrust Litig., 782 F.3d 867 (7th Cir. 2015).
[6] See Ariel Ezrachi & Maurice E. Stucke, Sustainable and Unchallenged Algorithmic Tacit Collusion, 17 Nw. J. Tech. & Intell. Prop. 217, 224 (2020).
[7] See Marc Ivaldi et al., The Economics of Tacit Collusion, Eur. Comm’n (March 2003), https://ec.europa.eu/competition/mergers/studies_reports/the_economics_of_tacit_collusion_en.pdf.
[8] See Ariel Ezrachi & Maurice E. Stucke, Algorithmic Collusion: Problems and Counter-Measures, at 3-4, Roundtable on Algorithms and Collusion, OECD, June 2017, https://one.oecd.org/document/DAF/COMP/WD%282017%2925/en/pdf.
[9] Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764, 768 (1984).
[10] See Ezrachi & Stucke, supra note 5, at 222-23.
[11] See Francisco Beneke & Mark-Oliver Mackenrodt, Remedies for Algorithmic Tacit Collusion, 9 J. of Antitrust Enf’t., at 161-62 (2021).
[12] Ezrachi & Stucke, supra note 2, at 1806-07.
[13] Ezrachi & Stucke, supra note 5, at 258.
Is Artificial Intelligence a New Gateway to Anticompetitive Collusion?
October 2, 2023 / George Slover https://cdt.org/staff/george-slover/
Also by CDT Intern Hannah Babinski
Roughly 85 percent of adults in the United States interact with the Internet on a daily basis.[1] Commerce over the Internet has in many ways made the lives of Americans easier, more convenient, and streamlined. But has it also opened the door for companies to utilize new and innovative technology to take advantage of their customers, suppliers, and workers by engaging in collusive price fixing? And if so, what can be done about it?
Antitrust scholars have been raising this question for several years,[2] but the new innovations in artificial intelligence are bringing renewed attention to it.
Under the U.S. antitrust laws, unlawful collusion – specifically, price fixing, the form of collusion we focus on here – encompasses any agreement among competing companies to set prices at inflated levels.[3] The law condemns collusion because it subverts the free market and denies consumers the benefits of prices determined by competition, where companies honestly compete against each other to win customers by offering more attractive products and services at more affordable prices.[4] The antitrust laws have traditionally drawn a distinction, for a mix of policy and practicality reasons, between price-fixing agreements and what is referred to as “conscious parallelism.” The distinction lies in that the latter can actually constitute honest competition, with companies separately and independently monitoring each other’s prices in order to look for opportunities to gain an advantage over their competitors and attract new customers.
The former, in contrast, is an agreement to avoid honest competition. Antitrust enforcers, and courts, have recognized that conscious parallelism is not without its problems. Companies can monitor each other’s prices in order to see how high they can inflate their own prices, and this can result in prices that are higher than if vigorous competition were taking place. Yet, enforcers and courts have concluded that it is impossible, as a practical matter, to identify and stop conscious parallelism that inflates prices without risking interfering with honest competitive responses to normal price and value fluctuations of goods and services.[5] So they look for indicators that the price monitoring and adjustments are not independent but rather are mutual, intended coordination.
This grey area between independent price monitoring in the interest of honest competition and orchestrated price coordination is also referred to as “tacit collusion” – recognizing that it has the same adverse effect on competition as intentional, “express” collusion, even though it is not treated as unlawful under the antitrust laws.[6]
The use of computer algorithms – and increasingly, their use in more sophisticated artificial intelligence – to manage companies’ determination of optimum pricing has re-opened the questions around tacit collusion. Is it technologically feasible for an algorithm to engineer inflated prices by tacit collusion? Does tacit collusion become easier and more likely with the aid of an algorithm? Where might it occur? How would it be detected by antitrust enforcers? Could current antitrust law be applied and adapted to better address the resulting harms to competition and consumers?
An algorithm can perform at light speed the component operations involved in determining optimum pricing – monitoring the prices of all competitors, and the purchases made at those prices, at various locations throughout a territory; calculating the effects of various changes in price; and adjusting accordingly. Because of this, the means of collusion are far more powerful, and the potential scale of harm is exponentially greater. Furthermore, the coordinated movements can be more subtle individually when they can occur multiple times every millisecond; this also makes them harder to detect.
In the past, collusive price coordination, whether express or tacit, has been shown to be easier to accomplish, and therefore more likely to occur, in markets where the following are true:
- the companies selling are relatively few, and the barriers to new entry by other companies are relatively high, due to high initial investment costs or other reasons, so consumers have few choices;
- the product or service is homogeneous, meaning the product or service offered by one company is essentially the same as the product or service offered by the other companies, so it is easier for the companies to converge on a price; and
- sales tend to be frequent and regular, and the price is transparent, so it is easier for the companies to monitor for changes.
An algorithm could be a powerful tool in aid of a price-fixing agreement, by making it easier to monitor the marketplace, to calculate the inflated price to which all companies will agree, to detect when a company is not adhering to the agreed price, and to determine and impose an effective “punishment” in response.[8]
Some of the market characteristics noted above may not be as necessary for algorithmic collusion, thanks to the light-speed monitoring and adjustments that algorithms are capable of. For example, the products and services may not have to be as homogeneous, or priced exactly the same, as long as they are similar enough that consumers see them as reasonable substitutes for each other. An algorithm can more easily take into account variations and assign appropriate price differentials that still result in prices being inflated above their competitive market levels.
But if the use of an algorithm could facilitate coordinated pricing, it could also make it easier for enforcers to detect and prove it. Proving unlawful price fixing requires evidence of mutual anticompetitive intent – of a de facto agreement – a “meeting of the minds,” a mutually communicated understanding, a “conscious commitment to a common scheme.”[9] This evidence can be circumstantial, but if circumstantial evidence is relied upon, it cannot be equally consistent with conscious parallelism; it must suggest the existence of a de facto agreement.[10] This circumstantial evidence is likely to be present in a similar fashion whether or not an algorithm is used to facilitate the agreement.
But the use of an algorithm could make it easier for enforcers and courts to confidently ascribe anticompetitive intent to interactions that they previously had to give the benefit of the doubt and accept as procompetitive or benign – as mere conscious parallelism. An algorithm can provide a window into the mind of the programmer, almost like a diary entry or a “smoking gun” email communication – if enforcers know what to look for.For example, an algorithm could be programmed to test where the sustainable maximum price is, by experimenting with incremental price increases to see if other companies follow. Or it could be programmed to promptly follow another company’s price increase, but to be slower in following another company’s price decrease. Or it could be programmed to retaliate against another company’s price decrease with an even greater price decrease of its own, targeted at the other company and the places where it has most of its sales – thereby not only erasing the other company’s opportunity for increased sales it hoped to achieve by its price-cutting but punishing it even further by taking away some of its existing customers.
These anticompetitive actions, if performed discreetly by humans, could be difficult for enforcers to detect, and even more difficult to ascribe intent to. However, an algorithm’s code can provide a roadmap into the mind of the human programmer. And if the programmer was acting as the agent of the company using the algorithm, or acting at its request, the intent revealed in the programming could be ascribed to the company. Evidence of an agreement is still needed to prove a case of explicit unlawful collusion. But if more than one company is using the same algorithm, or algorithms designed in conjunction with each other, or algorithms programmed to monitor each other, it may be easier to infer an agreement by showing that both companies share the same anticompetitive intent.
Along with examining the algorithms’ code and how companies are using them, enforcers can also look for traditional tell-tale indicators of possible collusion as cause for closer investigation. For example, prices that seem “stickier” in staying high despite changes in cost or consumer demand.[11] There might also be a pattern of price changes suggesting retaliation against a price-cutter, and subsequent harmonization could be circumstantial evidence of an agreement between the price-cutter and the retaliator that brings the penitent price-cutter back into the collusive fold.
But what if there is no indication that the company or the programmer had premeditated intent for the algorithm to facilitate collusion? What if the initial programming was ostensibly neutral, and the algorithm has “figured out” on its own (i.e., through “machine learning”) how to coordinate the company’s pricing with other companies in a way that leads to everyone’s prices settling at higher levels, and with higher profits for all participating companies, as a result of their not competing?
Can the current antitrust laws effectively address these new challenges? What adjustments to those laws might be useful?
As explained above, an important part of the reason tacit collusion has been accepted, or acquiesced in, is that it is so difficult to confidently judge the motive for what appears to be coordinated pricing. And having the algorithm available to examine could help clarify that motive, allowing enforcers to identify coding instructions that are inconsistent with pricing competitively. So if two or more companies selling similar products or services are using algorithms that are programmed to enable anticompetitive pricing, that can be evidence of, at minimum, a deliberate facilitating practice that foreseeably leads to inflated prices. That might be a rule-of-reason violation, or it might even give rise to a presumption of a per se price-fixing agreement. With machine learning, on the other hand – where the algorithm is given general instructions to optimize pricing and “learns” on its own to do so through coordination with other companies’ pricing – the companies could try to further distance themselves from the algorithm’s actions.
They could claim that they did not set out to program their algorithm to coordinate with competitors to keep prices inflated and that they are as surprised as anyone that their algorithm may have figured out on its own how to do so. However, even in this situation, the algorithm provides a useful window. Here it’s a window that also enables the company using it – or the programmer on the company’s request – to monitor and make follow-up assessments of how the algorithm is operating in practice. So enforcers and courts could make a similar presumption that holds companies legally accountable for setting their pricing algorithms loose on the marketplace with a “set it and forget it” blessing, and never following up on the algorithm’s functioning and capability.
In order for these situations to give rise to antitrust liability, enforcers and the courts would need to recognize that the traditional reasons that conscious parallelism had to be given the benefit of the doubt no longer apply. Today, it is possible to “read the mind” of an algorithm, so the company employing it can be held accountable when it fails to do so in order to keep the algorithm from engaging in coordination that leads to inflating prices above competitive levels. This higher enforcement sensitivity enabled by “investigating the algorithm” would still be entirely consistent with traditional antitrust principles – still deferring to companies acting independently in the free marketplace to decide how to competitively offer their products and services. Enforcers, and the courts, would need to accept that a commensurate adjustment in interpreting existing law is warranted, along with developing more technologically sophisticated analytical techniques.
If enforcers and the courts are unwilling to take these interpretive steps, or if these interpretive steps prove ineffective, Congress should consider enacting legislation to clarify the law to better enable effective antitrust enforcement against collusion by algorithm, while holding to traditional antitrust principles.
Increased transparency, through required reporting of how algorithms are designed and used, could help facilitate the detection of collusion by algorithm.[12] (Proceeding with caution, mindful that increased transparency can be a double-edged sword, also potentially facilitating anticompetitive coordination among companies.) Enforcers could also educate themselves by using algorithmic models to simulate conditions conducive to algorithmic tacit collusion and run tests to determine if, when, and how it occurs.[13]
Unless enforcers and the courts act, or Congress does, algorithms have the potential to supercharge price coordination and to lead to widespread price hikes, aggrandizing company profits at the expense of consumers forced to pay more than they should.
[1] Andrew Perrin & Sara Atske, About Three-in-Ten U.S. Adults Say They are ‘Almost Constantly’ Online, Pew Rsch. Ctr. (Mar. 26, 2021), https://www.pewresearch.org/short-reads/2021/03/26/about-three-in-ten-u-s-adults-say-they-are-almost-constantly-online/.
[2] E.g., Ariel Ezrachi & Maurice E. Stucke, Artificial Intelligence & Collusion: When Computers Inhibit Competition, 2017 U. Ill. L. Rev. 1775 (2017); Federal Trade Commission, Hearings on Competition and Consumer Protection in the 21st Century, Hearing 7, Session 1, Algorithmic Collusion (Nov. 14, 2018), https://www.ftc.gov/media/71288.
[3] Collusion can also take place in the other direction, with companies as buyers, agreeing to keep the prices they pay for goods and services they buy, and the wages and benefits they pay their workers, at depressed levels. Platforms for commercial transactions are considered to be sellers of services to users on both sides of the platform. And there are other forms of collusion besides agreements directly about price. For example, companies can “allocate markets” as noncompete zones, by agreeing to sell to different sets of customers. Or they might agree to slow innovations and improvements in product and service quality to a pace that is more profitable for all of the colluding companies. All of these forms of collusion cause similar harm to competition and the free market. And they could all potentially be impacted by computer algorithms and artificial intelligence. Here, we focus on price-related collusion by companies acting as sellers of goods and services, which we will refer to as “price fixing.”)
[4] Price Fixing, Bid Rigging, and Market Allocation Schemes: What They Are and What to Look For, Dep’t. of Just. Antitrust Div. (2021), https://www.justice.gov/atr/file/810261/download.
[5] See, e.g., In re Text Messaging Antitrust Litig., 782 F.3d 867 (7th Cir. 2015).
[6] See Ariel Ezrachi & Maurice E. Stucke, Sustainable and Unchallenged Algorithmic Tacit Collusion, 17 Nw. J. Tech. & Intell. Prop. 217, 224 (2020).
[7] See Marc Ivaldi et al., The Economics of Tacit Collusion, Eur. Comm’n (March 2003), https://ec.europa.eu/competition/mergers/studies_reports/the_economics_of_tacit_collusion_en.pdf.
[8] See Ariel Ezrachi & Maurice E. Stucke, Algorithmic Collusion: Problems and Counter-Measures, at 3-4, Roundtable on Algorithms and Collusion, OECD, June 2017, https://one.oecd.org/document/DAF/COMP/WD%282017%2925/en/pdf.
[9] Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764, 768 (1984).
[10] See Ezrachi & Stucke, supra note 5, at 222-23.
[11] See Francisco Beneke & Mark-Oliver Mackenrodt, Remedies for Algorithmic Tacit Collusion, 9 J. of Antitrust Enf’t., at 161-62 (2021).
[12] Ezrachi & Stucke, supra note 2, at 1806-07.
[13] Ezrachi & Stucke, supra note 5, at 258.
A Closer Look: D.C. Court of Appeals Endorses Broad Organizational Standing to Bring Consumer Protection Lawsuits
By Andrew Soukup, Ashley Simonsen, Henry Liu & Alyssa Vallar on March 8, 2022
POSTED BY COVINFGTON LAW FIRM IN A CLOSER LOOK, CONSUMER PRODUCTS, FOOD AND BEVERAGE, LITIGATION https://www.insideclassactions.com/category/food-and-bev/
We previously reported on a surge of mislabeling suits filed in District of Columbia Superior Court, following lower court decisions that purported to grant “tester” plaintiffs—individuals and organizations that purchase products simply to test whether the representations about a product are true—a right to sue on behalf of the general public under the District of Columbia Consumer Protection Procedures Act (“CPPA”). A year later, the District of Columbia Court of Appeals has endorsed an even more expansive interpretation of the CPPA, permitting a public interest organization to bring such actions even if the organization fails to satisfy Article III’s standing requirements. We expect even more lawsuits to be filed in the wake of this decision.
The CPPA Purports to Allow Public Interest Organizations to Assert Mislabeling Claims on Behalf of Consumers Generally.
The CPPA prohibits misleading or deceptive trade practices. It purports to give public interest organizations the right to sue on behalf of the consumer or class of consumers likely to be deceived or misled by those practices, as long as the organization has a “sufficient nexus” to the interest of such consumers to adequately represent those interests. D.C. Code § 28-3905(k)(1)(D). Public interest organizations have increasingly embraced this provision of the CPPA to argue that they may stand in the shoes of consumers and bring any lawsuit that an individual consumer might bring, even if the organization itself has not suffered any injury.
Defendants have attempted to dismiss these cases on Article III standing grounds, but trial courts have reached inconsistent decisions. Some courts have dismissed CPPA claims brought by public interest organizations for lack of Article III standing where the organization failed to show that it suffered an injury-in-fact. Others, however, have held that public interest organizations need not establish Article III standing to bring a deceptive trade practices claim under the CPPA.
The D.C. Court of Appeals Clarifies that Article III Standing Requirements Do Not Apply to Certain CPPA Claims.
The District of Columbia Court of Appeals decision in Animal Legal Defense Fund v. Hormel Foods Corp., 258 A.3d 174 (D.C. 2021), resolved this disagreement, holding that a public interest organization may bring suit under the CPPA free from any requirement to demonstrate its own Article III standing. Although Article III’s standing requirements usually apply in District of Columbia courts, the Hormel Foods court held that the legislative history of the CPPA reflected an intent by the District of Columbia Council to displace Article III’s standing requirements with a more lenient statutory test for standing.
The key takeaways from the decision include:
Hormel Foods removes one arrow from a defendant’s quiver in CPPA cases brought by public interest organizations. Companies that sell products in the District of Columbia should prepare to be targeted by this statute by organizations purporting to act in the public interest. And because many of these lawsuits seek only injunctive and declaratory relief, they can be difficult to remove to a federal court.
Yet despite Hormel Foods’s expansive interpretation of standing under the CPPA, companies can still avail themselves of creative arguments to defeat CPPA claims.
By Andrew Soukup, Ashley Simonsen, Henry Liu & Alyssa Vallar on March 8, 2022
POSTED BY COVINFGTON LAW FIRM IN A CLOSER LOOK, CONSUMER PRODUCTS, FOOD AND BEVERAGE, LITIGATION https://www.insideclassactions.com/category/food-and-bev/
We previously reported on a surge of mislabeling suits filed in District of Columbia Superior Court, following lower court decisions that purported to grant “tester” plaintiffs—individuals and organizations that purchase products simply to test whether the representations about a product are true—a right to sue on behalf of the general public under the District of Columbia Consumer Protection Procedures Act (“CPPA”). A year later, the District of Columbia Court of Appeals has endorsed an even more expansive interpretation of the CPPA, permitting a public interest organization to bring such actions even if the organization fails to satisfy Article III’s standing requirements. We expect even more lawsuits to be filed in the wake of this decision.
The CPPA Purports to Allow Public Interest Organizations to Assert Mislabeling Claims on Behalf of Consumers Generally.
The CPPA prohibits misleading or deceptive trade practices. It purports to give public interest organizations the right to sue on behalf of the consumer or class of consumers likely to be deceived or misled by those practices, as long as the organization has a “sufficient nexus” to the interest of such consumers to adequately represent those interests. D.C. Code § 28-3905(k)(1)(D). Public interest organizations have increasingly embraced this provision of the CPPA to argue that they may stand in the shoes of consumers and bring any lawsuit that an individual consumer might bring, even if the organization itself has not suffered any injury.
Defendants have attempted to dismiss these cases on Article III standing grounds, but trial courts have reached inconsistent decisions. Some courts have dismissed CPPA claims brought by public interest organizations for lack of Article III standing where the organization failed to show that it suffered an injury-in-fact. Others, however, have held that public interest organizations need not establish Article III standing to bring a deceptive trade practices claim under the CPPA.
The D.C. Court of Appeals Clarifies that Article III Standing Requirements Do Not Apply to Certain CPPA Claims.
The District of Columbia Court of Appeals decision in Animal Legal Defense Fund v. Hormel Foods Corp., 258 A.3d 174 (D.C. 2021), resolved this disagreement, holding that a public interest organization may bring suit under the CPPA free from any requirement to demonstrate its own Article III standing. Although Article III’s standing requirements usually apply in District of Columbia courts, the Hormel Foods court held that the legislative history of the CPPA reflected an intent by the District of Columbia Council to displace Article III’s standing requirements with a more lenient statutory test for standing.
The key takeaways from the decision include:
- Only Statutory Standing Required. A public interest organization—defined by the CPPA as “a nonprofit organization that is organized and operating, in whole or in part, for the purpose of promoting interests or rights of consumers,” D.C. Code § 28-3901(a)(15)—need not satisfy traditional Article III standing requirements to bring a CPPA claim in District of Columbia courts. Rather, such organizations need only satisfy the CPPA’s statutory standing requirement that the organization have a “sufficient nexus” to the interests of the consumers they seek to represent.
- Broad Nexus Requirement. In determining whether such a nexus exists, the Court of Appeals suggested that protecting consumer interests need not be the organization’s primary purpose. The plaintiff in Hormel Foods satisfied this requirement by showing that one of its “subsidiary purposes” was to ensure that consumers of meat have accurate information about factory farming conditions and practices so they can make informed decisions about meat consumption—even though the organization’s primary mission was to protect the lives and advance the interests of animals.
- Loose Pleading Standards. The Court of Appeals embraced a loose pleading standard for asserting standing under § 28-3905(k)(1)(D). Although the plaintiff in Hormel Foods did not invoke this provision as a basis for standing in its complaint—indeed, it did not invoke that provision until summary judgment—the Court allowed the lawsuit to proceed on the ground that the facts alleged in the complaint nonetheless supported this theory of standing.
Hormel Foods removes one arrow from a defendant’s quiver in CPPA cases brought by public interest organizations. Companies that sell products in the District of Columbia should prepare to be targeted by this statute by organizations purporting to act in the public interest. And because many of these lawsuits seek only injunctive and declaratory relief, they can be difficult to remove to a federal court.
Yet despite Hormel Foods’s expansive interpretation of standing under the CPPA, companies can still avail themselves of creative arguments to defeat CPPA claims.
- Other CPPA Provisions Still Require Article III Standing. The holding in Hormel Foods applies only to lawsuits brought by public interest organizations on behalf of a consumer or class of consumers under § 28-3905(k)(1)(D). It does not apply to consumers seeking direct relief from a deceptive trade practice (§ 28-3905(k)(1)(A)), nor does it apply to individuals or organizations that bring a CPPA claim—on behalf of themselves or the general public—based on products they purchased simply to test whether the representations about the product are true (§ 28-3905(k)(1)(B), (C)). Individual and organizational plaintiffs, including “tester” plaintiffs, who sue under these other provisions of the CPPA must still show Article III standing.
- Personal Jurisdiction. Notwithstanding Hormel Foods, personal jurisdiction requirements continue to apply in District of Columbia courts to the same extent as in federal courts. Even if a public interest organization has statutory standing under the CPPA, it still must demonstrate that the District of Columbia court has personal jurisdiction over the defendant.
- No Underlying Claim By Consumers. While a public organization need not demonstrate injury to itself, it must still identify a consumer or class of consumers who have or will be injured by the alleged deceptive practices. D.C. Code § 28-3905(k)(1)(D) permits public interest organizations to bring private attorney-general lawsuits only to the extent an individual consumer or class of consumers could bring a CPPA claim. In other words, showing that an individual consumer cannot maintain a deceptive practices claim against a company remains a viable defense to a claim by a public interest organization.
FROM THE COUNCIL FOR COURT EXCLELLENCE:
CCE and ATJC Publish New Report on Probate Reform
FULL REPORT. https://www.courtexcellence.org/uploads/File/Strengthening%20Probate%20Admin%20in%20DC%202_9_22.pdf
On February 9, 2022, the Council for Court Excellence (CCE) and the D.C. Access to Justice Commission (ATJC) published Strengthening Probate Administration in the District of Columbia. When a person dies, their debts must be paid and their property distributed, through the probate process. Probate is a complex area of law and many people cannot afford an attorney to guide them through it.
In January 2020, CCE and ATJC formed an expert Working Group to address the challenges faced by self-represented individuals during probate. The Working Group ultimately developed recommendations in 20 areas to strengthen probate processes for everyone and increase access to justice for low- and moderate-income people.
The report’s release comes after over two years of research into other jurisdictions, case reviews, and interviews with self-represented individuals, D.C. probate court employees, and legal practitioners. The diverse and distinguished Working Group included experienced probate lawyers, public interest advocates, independent subject-matter experts, and Superior Court judges* and the Register of Wills.*
The report, created with support from the State Justice Institute, includes recommendations spanning 20 different topic areas, including:
CCE and ATJC Publish New Report on Probate Reform
FULL REPORT. https://www.courtexcellence.org/uploads/File/Strengthening%20Probate%20Admin%20in%20DC%202_9_22.pdf
On February 9, 2022, the Council for Court Excellence (CCE) and the D.C. Access to Justice Commission (ATJC) published Strengthening Probate Administration in the District of Columbia. When a person dies, their debts must be paid and their property distributed, through the probate process. Probate is a complex area of law and many people cannot afford an attorney to guide them through it.
In January 2020, CCE and ATJC formed an expert Working Group to address the challenges faced by self-represented individuals during probate. The Working Group ultimately developed recommendations in 20 areas to strengthen probate processes for everyone and increase access to justice for low- and moderate-income people.
The report’s release comes after over two years of research into other jurisdictions, case reviews, and interviews with self-represented individuals, D.C. probate court employees, and legal practitioners. The diverse and distinguished Working Group included experienced probate lawyers, public interest advocates, independent subject-matter experts, and Superior Court judges* and the Register of Wills.*
The report, created with support from the State Justice Institute, includes recommendations spanning 20 different topic areas, including:
- Expanding Community Education on Estate Planning and Probate Administration;
- Simplifying Transfers of Certain Property and Notice Requirements;
- Increasing Access to Self-Help Materials and Legal Advice;
- Adjusting Levels for Allowances, Reimbursements, and Small Estates; and more.
Recent developments in rail freight safety
We have previously pointed out that train derailments in places like Palestine, Ohio raise concerns in the DC metro area, where potentially dangerous rail traffic is routed through densely populated areas. Consequently, remedial actions to improve rail safety should be of concern to DC area residents, particularly proposed new federal safety laws. It would be useful for local consumer groups to take a position on the proposed new federal laws.
Senators from Ohio and Pennsylvania introduced a bipartisan rail safety bill this past spring. The Senate has yet to vote on the proposed safety bill. Sens. Sherrod Brown and J.D. Vance of Ohio, along with Sens. Marco Rubio (R., Fla.), Josh Hawley (R. Mo.), Bob Casey (D., Pa.) and John Fetterman (D., Pa.), introduced legislation intended to prevent future train disasters such as the Feb. 3 derailment of Norfolk Southern Corp. railcars near East Palestine, Ohio.
Senators said the bill would strengthen safety procedures for trains carrying hazardous materials, establish requirements for wayside defect detectors, create a permanent requirement for railroads to operate with at least two-person crews, and increase fines for wrongdoing committed by rail carriers.
In Congressional testimony, Norfolk Southern CEO Shaw said the company supports certain provisions in the bill but stopped short of endorsing the legislation in its entirety. In particular he objected to provisions expanding required train crew size. He offered reassurance of a general kind: “We are committed to the legislative intent to make rail safer,” he said. “Norfolk Southern runs a safe railroad, and it is my commitment to improve that safety and make our safety culture the best in the industry.”
There has been other relevant activity, particularly litigation. Ohio Attorney General Dave Yost sued to hold the company financially responsible for the train derailment in East Palestine. The complaint, filed in U.S. District Court of the Northern District of Ohio, sought civil penalties, damages, court costs and other relief for the Feb. 3 incident, which led to the derailment of 38 cars, including 11 tankers carrying hazardous materials that caught fire. The lawsuit asked the court to order the company to pay for damages to natural resources and property and to make payments for the economic harm done to the state and its residents.
The attorney general’s office cited Norfolk Southern for 58 alleged violations of state and federal laws, including those covering hazardous waste and air and water pollution.
“The derailment in East Palestine, Ohio was both foreseeable and preventable,” the lawsuit said. “Norfolk Southern’s own record demonstrates that it knew—and should have taken appropriate steps to prevent—the significant harm that the derailment would cause the state.”
The state sought an injunction that would require the company to clean up all hazardous materials and other pollutants from the air, soil and water in and around the derailment site. The Environmental Protection Agency issued an order in February requiring Norfolk Southern to clean up the derailment site.
The National Transportation Safety Board, which typically investigates major transportation and hazardous-materials accidents, opened a special probe into Norfolk Southern’s safety culture, a move it hadn’t made in years. The NTSB said it took the step “given the number and significance” of accidents and called for the company to immediately review and assess its safety practices. The Federal Railroad Administration separately has opened a safety probe into Norfolk Southern.
By Don Allen Resnikoff
Credit: Much of the factual material is drawn from the Wall Street Journal
We have previously pointed out that train derailments in places like Palestine, Ohio raise concerns in the DC metro area, where potentially dangerous rail traffic is routed through densely populated areas. Consequently, remedial actions to improve rail safety should be of concern to DC area residents, particularly proposed new federal safety laws. It would be useful for local consumer groups to take a position on the proposed new federal laws.
Senators from Ohio and Pennsylvania introduced a bipartisan rail safety bill this past spring. The Senate has yet to vote on the proposed safety bill. Sens. Sherrod Brown and J.D. Vance of Ohio, along with Sens. Marco Rubio (R., Fla.), Josh Hawley (R. Mo.), Bob Casey (D., Pa.) and John Fetterman (D., Pa.), introduced legislation intended to prevent future train disasters such as the Feb. 3 derailment of Norfolk Southern Corp. railcars near East Palestine, Ohio.
Senators said the bill would strengthen safety procedures for trains carrying hazardous materials, establish requirements for wayside defect detectors, create a permanent requirement for railroads to operate with at least two-person crews, and increase fines for wrongdoing committed by rail carriers.
In Congressional testimony, Norfolk Southern CEO Shaw said the company supports certain provisions in the bill but stopped short of endorsing the legislation in its entirety. In particular he objected to provisions expanding required train crew size. He offered reassurance of a general kind: “We are committed to the legislative intent to make rail safer,” he said. “Norfolk Southern runs a safe railroad, and it is my commitment to improve that safety and make our safety culture the best in the industry.”
There has been other relevant activity, particularly litigation. Ohio Attorney General Dave Yost sued to hold the company financially responsible for the train derailment in East Palestine. The complaint, filed in U.S. District Court of the Northern District of Ohio, sought civil penalties, damages, court costs and other relief for the Feb. 3 incident, which led to the derailment of 38 cars, including 11 tankers carrying hazardous materials that caught fire. The lawsuit asked the court to order the company to pay for damages to natural resources and property and to make payments for the economic harm done to the state and its residents.
The attorney general’s office cited Norfolk Southern for 58 alleged violations of state and federal laws, including those covering hazardous waste and air and water pollution.
“The derailment in East Palestine, Ohio was both foreseeable and preventable,” the lawsuit said. “Norfolk Southern’s own record demonstrates that it knew—and should have taken appropriate steps to prevent—the significant harm that the derailment would cause the state.”
The state sought an injunction that would require the company to clean up all hazardous materials and other pollutants from the air, soil and water in and around the derailment site. The Environmental Protection Agency issued an order in February requiring Norfolk Southern to clean up the derailment site.
The National Transportation Safety Board, which typically investigates major transportation and hazardous-materials accidents, opened a special probe into Norfolk Southern’s safety culture, a move it hadn’t made in years. The NTSB said it took the step “given the number and significance” of accidents and called for the company to immediately review and assess its safety practices. The Federal Railroad Administration separately has opened a safety probe into Norfolk Southern.
By Don Allen Resnikoff
Credit: Much of the factual material is drawn from the Wall Street Journal
District of Columbia Foreclosure Mediation Program
by Don Allen Resnikoff
Litigation can be slow and cumbersome, so a variety of suggestions have been made to make dispute resolution faster and more efficient. Among them are limiting time-consuming litigation procedures, such as extended discovery through oral depositions. Another is compelled alternative dispute resolution, such as required arbitration.
The array of suggestions for expediting dispute resolution raises complex and difficult questions. The discussion that follows focuses on a District of Columbia mediation program for residential real estate. The District of Columbia’s Foreclosure Mediation Program lets homeowners and lenders meet face-to-face to discuss alternatives to foreclosure.
The DC foreclosure mediation program is useful to focus on. For one thing, it is important to many people. Spreading information about the program may help people resolve residential foreclosure disputes.
Looking at the DC program will not teach us all we might want to know alternate dispute resolution possibilities, or the possibility of limiting procedures in civil litigation. But it will teach us something about a real world voluntary mediation program.
The mediation program is open to District owners of residential properties located in the District – including owners of condominiums – who have received a notice of default from their lender. The notice lenders must send warnings that the property could go into foreclosure.
The program is offered by the Department of Insurance, Securities and Banking (DISB) in partnership with Housing Counseling Services, a local nonprofit. The DISB website provides further information.
By way of background, real property foreclosure in DC may be non-judicial or judicial. Non- judicial is more common.
In Washington D.C., lenders may foreclose on deeds of trusts in default using the non-judicial foreclosure process. The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. The lender mails a notice of default to the borrower, which includes the amount required to reinstate the loan. The lender must also record the notice of default in the land records, which is the first official step in the nonjudicial process. District of Columbia primarily operates as a title theory state where the property title remains in trust until payment in full occurs for the underlying loan.
A judicial foreclosure in the District of Columbia is a process where the lender files a lawsuit against the borrower in the D.C. Superior Court to obtain a judgment of foreclosure. The borrower will receive an Initial Order, a Summons, and a Complaint from the court. The Summons will notify the borrower that they have 20 days to file an answer to the Complaint. If the borrower does not respond or fails to raise a valid defense, the court will grant a default judgment to the lender and order a foreclosure sale. If the borrower responds and challenges the foreclosure, the court will hold a hearing to decide the case. As explained above, the judicial foreclosure process in D.C. is less common than the nonjudicial foreclosure process, which, as mentioned above, does not involve the court but requires the lender to follow certain notice and mediation requirements.
Returning to the mechanics of foreclosure mediation, § 42–815.02 of the Code of the District of Columbia regarding foreclosure mediation includes the following:
Borrowers who get the benefit of the statute are residential mortgage borrowers and, if different from the residential mortgage borrower, the person who holds record title.
Mediation under the statute refers to a meeting between the lender or trustee and the borrower, with the help of a neutral third-party mediator appointed by the DISB Mediation Administrator, to attempt to reach agreement on a loss mitigation program for the borrower. That may include the renegotiation of the terms of a borrower’s residential mortgage, loan modification, refinancing, short sale, deed in lieu of foreclosure, and any other options that may be available in lieu of foreclosure.
Mediation is elective: The borrower may elect to participate in mediation and certify compliance with the lender’s loss mitigation documentation requirements.
See also information from the DC OAG at https://oag.dc.gov/pl-foreclosure-important-information#:~:text=The%20%E2%80%9CSaving%20DC%20Homes%20from%20Foreclosure%20Emergency%20Amendment,for%20DC%20took%20effect%20on%20May%2025%2C%202011.
When a foreclosure case goes to court, the DC Civil Court may provide a further round of mediation. Parties in cases involving foreclosure of a residential mortgage or deed of trust are required to file a Confidential Settlement Statement) with the Multi-Door Dispute Resolution Division. . This statement is for the use of the Court’s mediator. See https://www.dccourts.gov/sites/default/files/MultiDoor-PDFs/CSSForResidentialForeclosureCases2017.pdf
Is the DC foreclosure mediation program successful? DISB Commissioner Karima Woods says yes. She testified in her report on fiscal year 2022, DISB’s Foreclosure Prevention and Mediation Program was successful in helping 27 homeowners obtain relief under the COVID-19 forbearance programs, and another49 homeowners received modifications from their lenders. She says that “Our efforts resulted in saving $53.5 million in property value, with an additional $4.8 million saved in Q1 of FY23.” https://disb.dc.gov/sites/default/files/dc/sites/disb/release_content/attachments/fy22-23_poh_testimony_final.pdf
In future work, including with the DC Bar, we hope to explore further concerning the DC foreclosure mediation program, and learn more about lessons may teach about mediation as a dispute resolution technique.
by Don Allen Resnikoff
Litigation can be slow and cumbersome, so a variety of suggestions have been made to make dispute resolution faster and more efficient. Among them are limiting time-consuming litigation procedures, such as extended discovery through oral depositions. Another is compelled alternative dispute resolution, such as required arbitration.
The array of suggestions for expediting dispute resolution raises complex and difficult questions. The discussion that follows focuses on a District of Columbia mediation program for residential real estate. The District of Columbia’s Foreclosure Mediation Program lets homeowners and lenders meet face-to-face to discuss alternatives to foreclosure.
The DC foreclosure mediation program is useful to focus on. For one thing, it is important to many people. Spreading information about the program may help people resolve residential foreclosure disputes.
Looking at the DC program will not teach us all we might want to know alternate dispute resolution possibilities, or the possibility of limiting procedures in civil litigation. But it will teach us something about a real world voluntary mediation program.
The mediation program is open to District owners of residential properties located in the District – including owners of condominiums – who have received a notice of default from their lender. The notice lenders must send warnings that the property could go into foreclosure.
The program is offered by the Department of Insurance, Securities and Banking (DISB) in partnership with Housing Counseling Services, a local nonprofit. The DISB website provides further information.
By way of background, real property foreclosure in DC may be non-judicial or judicial. Non- judicial is more common.
In Washington D.C., lenders may foreclose on deeds of trusts in default using the non-judicial foreclosure process. The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. The lender mails a notice of default to the borrower, which includes the amount required to reinstate the loan. The lender must also record the notice of default in the land records, which is the first official step in the nonjudicial process. District of Columbia primarily operates as a title theory state where the property title remains in trust until payment in full occurs for the underlying loan.
A judicial foreclosure in the District of Columbia is a process where the lender files a lawsuit against the borrower in the D.C. Superior Court to obtain a judgment of foreclosure. The borrower will receive an Initial Order, a Summons, and a Complaint from the court. The Summons will notify the borrower that they have 20 days to file an answer to the Complaint. If the borrower does not respond or fails to raise a valid defense, the court will grant a default judgment to the lender and order a foreclosure sale. If the borrower responds and challenges the foreclosure, the court will hold a hearing to decide the case. As explained above, the judicial foreclosure process in D.C. is less common than the nonjudicial foreclosure process, which, as mentioned above, does not involve the court but requires the lender to follow certain notice and mediation requirements.
Returning to the mechanics of foreclosure mediation, § 42–815.02 of the Code of the District of Columbia regarding foreclosure mediation includes the following:
Borrowers who get the benefit of the statute are residential mortgage borrowers and, if different from the residential mortgage borrower, the person who holds record title.
Mediation under the statute refers to a meeting between the lender or trustee and the borrower, with the help of a neutral third-party mediator appointed by the DISB Mediation Administrator, to attempt to reach agreement on a loss mitigation program for the borrower. That may include the renegotiation of the terms of a borrower’s residential mortgage, loan modification, refinancing, short sale, deed in lieu of foreclosure, and any other options that may be available in lieu of foreclosure.
Mediation is elective: The borrower may elect to participate in mediation and certify compliance with the lender’s loss mitigation documentation requirements.
See also information from the DC OAG at https://oag.dc.gov/pl-foreclosure-important-information#:~:text=The%20%E2%80%9CSaving%20DC%20Homes%20from%20Foreclosure%20Emergency%20Amendment,for%20DC%20took%20effect%20on%20May%2025%2C%202011.
When a foreclosure case goes to court, the DC Civil Court may provide a further round of mediation. Parties in cases involving foreclosure of a residential mortgage or deed of trust are required to file a Confidential Settlement Statement) with the Multi-Door Dispute Resolution Division. . This statement is for the use of the Court’s mediator. See https://www.dccourts.gov/sites/default/files/MultiDoor-PDFs/CSSForResidentialForeclosureCases2017.pdf
Is the DC foreclosure mediation program successful? DISB Commissioner Karima Woods says yes. She testified in her report on fiscal year 2022, DISB’s Foreclosure Prevention and Mediation Program was successful in helping 27 homeowners obtain relief under the COVID-19 forbearance programs, and another49 homeowners received modifications from their lenders. She says that “Our efforts resulted in saving $53.5 million in property value, with an additional $4.8 million saved in Q1 of FY23.” https://disb.dc.gov/sites/default/files/dc/sites/disb/release_content/attachments/fy22-23_poh_testimony_final.pdf
In future work, including with the DC Bar, we hope to explore further concerning the DC foreclosure mediation program, and learn more about lessons may teach about mediation as a dispute resolution technique.
Climate Activists Gaining Ground In Courts Worldwide
Excerpt from article By Juan-Carlos Rodriguez · https://www.law360.com/publicpolicy/articles/1721374?nl_pk=53bfd6c6-812f-40af-9e74-2515430832fc&utm_source=newsletter&utm_medium=email&utm_campaign=publicpolicy&utm_content=2023-09-18&read_more=1&nlsidx=0&nlaidx=0 [paywall]
Law360 (September 15, 2023, 9:04 PM EDT) -- As the United Nations General Assembly meets in New York City this week, a spotlight will shine brightly on countries' efforts to address climate change. Climate activists have promised to fill the streets, but in addition to protests and marches, they're increasingly turning to courts around the globe as a way to drive their policy goals.
Judges worldwide have a growing body of domestic and international climate law to study, thanks largely to lawsuits filed by climate activists — often children or other marginalized groups — who see courts as another way to drive faster policy changes.
The results of their legal actions have been mixed, but litigants have been emboldened by each new lawsuit and there appears to be no slowdown in sight, said Viren Mascarenhas, a partner at Milbank LLP.
Mascarenhas said there is a movement to establish governments' climate change responsibilities at all court levels, including state and federal courts here in the U.S., national courts abroad, and international courts like the European Court of Human Rights, the Inter-American Court of Human Rights, the International Tribunal for the Law of the Sea and the International Court of Justice.
"Whether it's a state agency or a national actor or an international body: What are they meant to do in light of mounting evidence that climate change is impacting the rights of individuals?" Mascarenhas said.
"This movement has been afoot before regional and international courts for about 15 years. But it is getting much more traction now in the last 3 to 5 years as several of these courts … are hearing these cases and rendering decisions in favor of the plaintiffs or claimants."
Kenneth Markowitz, a partner at Akin Gump Strauss Hauer & Feld LLP, said courts are still in the early stages of handling lawsuits that are using the legal process as a tool to drive behavioral change around climate change.
"As the reports keep coming out of the UN, with more dramatic scenarios being painted, and hitting tipping points, and desperation among those that are interested in paying attention to this, it's only going to inspire more creativity and attempts to use the court system to make those behavioral changes, particularly in areas where the legislature, the regulatory bodies have failed to act or are handcuffed from acting," Markowitz said.
Here in the U.S., a Montana state court judge in August sided with a group of youth plaintiffs who argued that state lawmakers' amendments to the Montana Environmental Policy Act prohibiting regulators from considering greenhouse gas emissions in permitting decisions violated the youths' constitutional right to a "clean and healthful environment."
Excerpt from article By Juan-Carlos Rodriguez · https://www.law360.com/publicpolicy/articles/1721374?nl_pk=53bfd6c6-812f-40af-9e74-2515430832fc&utm_source=newsletter&utm_medium=email&utm_campaign=publicpolicy&utm_content=2023-09-18&read_more=1&nlsidx=0&nlaidx=0 [paywall]
Law360 (September 15, 2023, 9:04 PM EDT) -- As the United Nations General Assembly meets in New York City this week, a spotlight will shine brightly on countries' efforts to address climate change. Climate activists have promised to fill the streets, but in addition to protests and marches, they're increasingly turning to courts around the globe as a way to drive their policy goals.
Judges worldwide have a growing body of domestic and international climate law to study, thanks largely to lawsuits filed by climate activists — often children or other marginalized groups — who see courts as another way to drive faster policy changes.
The results of their legal actions have been mixed, but litigants have been emboldened by each new lawsuit and there appears to be no slowdown in sight, said Viren Mascarenhas, a partner at Milbank LLP.
Mascarenhas said there is a movement to establish governments' climate change responsibilities at all court levels, including state and federal courts here in the U.S., national courts abroad, and international courts like the European Court of Human Rights, the Inter-American Court of Human Rights, the International Tribunal for the Law of the Sea and the International Court of Justice.
"Whether it's a state agency or a national actor or an international body: What are they meant to do in light of mounting evidence that climate change is impacting the rights of individuals?" Mascarenhas said.
"This movement has been afoot before regional and international courts for about 15 years. But it is getting much more traction now in the last 3 to 5 years as several of these courts … are hearing these cases and rendering decisions in favor of the plaintiffs or claimants."
Kenneth Markowitz, a partner at Akin Gump Strauss Hauer & Feld LLP, said courts are still in the early stages of handling lawsuits that are using the legal process as a tool to drive behavioral change around climate change.
"As the reports keep coming out of the UN, with more dramatic scenarios being painted, and hitting tipping points, and desperation among those that are interested in paying attention to this, it's only going to inspire more creativity and attempts to use the court system to make those behavioral changes, particularly in areas where the legislature, the regulatory bodies have failed to act or are handcuffed from acting," Markowitz said.
Here in the U.S., a Montana state court judge in August sided with a group of youth plaintiffs who argued that state lawmakers' amendments to the Montana Environmental Policy Act prohibiting regulators from considering greenhouse gas emissions in permitting decisions violated the youths' constitutional right to a "clean and healthful environment."
DC local planning for climate change
-- by Don Allen Resnikoff
The recent Hawaii experience with extensive fire damage made me wonder whether DC government has done any planning concerning local consequences of climate change. An example we all can think of is the effect on DC of sea level rise.
It turns out that DC government has done some planning. See https://sustainable.dc.gov/climateready Following is some language from the DC website:
The Climate Ready DC Plan
In the past several years, the District has seen record-breaking extreme weather (like heat waves and snowstorms), higher tides caused by rising sea level, heavy rains and flooding, and warmer average temperatures and two to three times as many dangerously hot days. Climate Ready DC is the District’s plan to adapt to our changing climate. While the District is doing its part to reduce greenhouse gas emissions, we are already seeing the impacts of climate change. Climate adaptation means taking action today to prepare people, homes, communities, businesses and infrastructure for the potential impacts of climate change.
Learn what the District is doing to prepare for the impacts of climate change. https://doee.dc.gov/climateready
[click]
What Climate Change Means for the District--
Rising Temperatures, Heatwaves and Dangerously Hot Days
Average annual temperatures have increased 2°F during the last 50 years, and are expected to continue to rise. Historically, the average summer high temperature in the District was 87°F. This is projected to increase significantly to between 93°F and 97°F by the 2080s. As average temperatures rise, extreme heat days will increase and heatwaves will last longer and occur more frequently. Heat waves can be deadly, as prolonged heat exposure may lead to a series of health conditions, including respiratory challenges, exhaustion, cramping, heatstroke, and fatalities. This proves especially true for older people, children, and those with existing health conditions, who are at greater risk of developing heat-related illnesses.
Even more, some neighborhoods in DC are up to 16.5°F warmer than others due to the urban heat island effect. Neighborhoods with large areas of pavement and buildings, and minimal green space, stay warmer than non-urban areas. As temperatures increase due to climate change, this effect will worsen.
More Frequent and Intense Heavy Rain Events
In September 2020, a surprisingly intense storm dumped almost three inches of stormwater on the District in a two hour period that overwhelmed sewer and stormwater infrastructure and led to dangerous flooding and prompted numerous rescue operations. In July 2019, the District experienced a month’s worth of rain in a matter of hours, stranding residents on top of their cars. In 2016, a cloudburst (sudden, violent rainstorm) over Cleveland Park sent water rushing down the Metro station escalators and submerged the tracks with water, closing the station. In 2012, heavy rains over the Bloomingdale neighborhood overwhelmed the storm sewer system and flooded streets and the basements of homes. In 2006, heavy rains over Federal Triangle caused flooding that submerged the basements of federal office buildings and national museums with multiple feet of water, causing millions of dollars in damage and exposing the priceless collections of the country’s museums. The intensity and frequency of these severe rain storms is only expected to increase in the District as a result of climate change.
Sea Level Rise & Storm Surge
Over the last century, warmer oceans and melting ice due to climate change have caused sea levels to rise around the globe. This change in sea level poses significant risks to coastal cities and those adjacent to tidal rivers. In the District, water levels for the Potomac and Anacostia Rivers, both tidal rivers, have increased 11 inches in the past 90 years. As a result, flooding along our riverfront has increased by more than 300%, according to the National Oceanic and Atmospheric Administration. Sea level rise will only amplify this trend.
++++
DC law allows public interest organizations independent standing to assert claims on behalf of consumers
-by Don Allen Resnikoff
DC’s CPPA allows public interest organizations independent standing to assert claims on behalf of consumers. The DC Court of Appeals has agreed that public interest organization have standing to bring such actions even if the organization fails to satisfy usual Article III standing requirements.
For the plaintiffs’ bar the unusual CPPA provision suggests unusual opportunities. Can actions be brought by a public interest firm to enjoin overcharging in the same manner that the DC AG enjoined GrubHub from overcharging, even in a situation where certifying a class action would be difficult?
Covington attorneys examine the issue from a defendants’ perspective in an article at https://www.insideclassactions.com/2022/03/08/a-closer-look-d-c-court-of-appeals-endorses-broad-organizational-standing-to-bring-consumer-protection-lawsuits/ A slightly modified version of that article appears below.
The topic of public interest organizations independent standing to assert claims on behalf of consumers is of great interest and importance, and deserves further discussion.
**
A Closer Look: D.C. Court of Appeals Endorses Broad Organizational Standing to Bring Consumer Protection Lawsuits
By Andrew Soukup, Ashley Simonsen, Henry Liu & Alyssa Vallar on March 8, 2022
The District of Columbia Court of Appeals has endorsed an expansive interpretation of the CPPA, permitting a public interest organization to bring such actions even if the organization fails to satisfy Article III’s standing requirements. We expect even more lawsuits to be filed in the wake of this decision.
The CPPA Purports to Allow Public Interest Organizations to Assert Mislabeling Claims on Behalf of Consumers Generally.
The CPPA prohibits misleading or deceptive trade practices. It purports to give public interest organizations the right to sue on behalf of the consumer or class of consumers likely to be deceived or misled by those practices, as long as the organization has a “sufficient nexus” to the interest of such consumers to adequately represent those interests. D.C. Code § 28-3905(k)(1)(D). Public interest organizations have increasingly embraced this provision of the CPPA to argue that they may stand in the shoes of consumers and bring any lawsuit that an individual consumer might bring, even if the organization itself has not suffered any injury.
Defendants have attempted to dismiss these cases on Article III standing grounds, but trial courts have reached inconsistent decisions. Some courts have dismissed CPPA claims brought by public interest organizations for lack of Article III standing where the organization failed to show that it suffered an injury-in-fact. Others, however, have held that public interest organizations need not establish Article III standing to bring a deceptive trade practices claim under the CPPA.
The D.C. Court of Appeals Clarifies that Article III Standing Requirements Do Not Apply to Certain CPPA Claims.
The District of Columbia Court of Appeals decision in Animal Legal Defense Fund v. Hormel Foods Corp., 258 A.3d 174 (D.C. 2021), resolved this disagreement, holding that a public interest organization may bring suit under the CPPA free from any requirement to demonstrate its own Article III standing. Although Article III’s standing requirements usually apply in District of Columbia courts, the Hormel Foods court held that the legislative history of the CPPA reflected an intent by the District of Columbia Council to displace Article III’s standing requirements with a more lenient statutory test for standing.
The key takeaways from the decision include:
• Only Statutory Standing Required. A public interest organization—defined by the CPPA as “a nonprofit organization that is organized and operating, in whole or in part, for the purpose of promoting interests or rights of consumers,” D.C. Code § 28-3901(a)(15)—need not satisfy traditional Article III standing requirements to bring a CPPA claim in District of Columbia courts. Rather, such organizations need only satisfy the CPPA’s statutory standing requirement that the organization have a “sufficient nexus” to the interests of the consumers they seek to represent.
• Broad Nexus Requirement. In determining whether such a nexus exists, the Court of Appeals suggested that protecting consumer interests need not be the organization’s primary purpose. The plaintiff in Hormel Foods satisfied this requirement by showing that one of its “subsidiary purposes” was to ensure that consumers of meat have accurate information about factory farming conditions and practices so they can make informed decisions about meat consumption—even though the organization’s primary mission was to protect the lives and advance the interests of animals.
• Loose Pleading Standards. The Court of Appeals embraced a loose pleading standard for asserting standing under § 28-3905(k)(1)(D). Although the plaintiff in Hormel Foods did not invoke this provision as a basis for standing in its complaint—indeed, it did not invoke that provision until summary judgment—the Court allowed the lawsuit to proceed on the ground that the facts alleged in the complaint nonetheless supported this theory of standing.
CPPA Claims Brought by Public Interest Organizations Require Creative Defenses.
Hormel Foods removes one arrow from a defendant’s quiver in CPPA cases brought by public interest organizations. Companies that sell products in the District of Columbia should prepare to be targeted by this statute by organizations purporting to act in the public interest. And because many of these lawsuits seek only injunctive and declaratory relief, they can be difficult to remove to a federal court.
Yet despite Hormel Foods’s expansive interpretation of standing under the CPPA, companies can still avail themselves of creative arguments to defeat CPPA claims.
• Other CPPA Provisions Still Require Article III Standing. The holding in Hormel Foods applies only to lawsuits brought by public interest organizations on behalf of a consumer or class of consumers under § 28-3905(k)(1)(D). It does not apply to consumers seeking direct relief from a deceptive trade practice (§ 28-3905(k)(1)(A)), nor does it apply to individuals or organizations that bring a CPPA claim—on behalf of themselves or the general public—based on products they purchased simply to test whether the representations about the product are true (§ 28-3905(k)(1)(B), (C)). Individual and organizational plaintiffs, including “tester” plaintiffs, who sue under these other provisions of the CPPA must still show Article III standing.
• Personal Jurisdiction. Notwithstanding Hormel Foods, personal jurisdiction requirements continue to apply in District of Columbia courts to the same extent as in federal courts. Even if a public interest organization has statutory standing under the CPPA, it still must demonstrate that the District of Columbia court has personal jurisdiction over the defendant.
• No Underlying Claim By Consumers. While a public organization need not demonstrate injury to itself, it must still identify a consumer or class of consumers who have or will be injured by the alleged deceptive practices. D.C. Code § 28-3905(k)(1)(D) permits public interest organizations to bring private attorney-general lawsuits only to the extent an individual consumer or class of consumers could bring a CPPA claim. In other words, showing that an individual consumer cannot maintain a deceptive practices claim against a company remains a viable defense to a claim by a public interest organization.
Tags: False Advertising, Food Labeling, Litigation
Covington Authors:
Andrew Soukup
Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings.
Ashley Simonsen
Ashley Simonsen is a litigator whose practice focuses on defending complex class actions in state and federal courts across the country, with substantive experience in the three hotbeds of class action litigation: New York, San Francisco, and Los Angeles.
Henry Liu
Henry Liu specializes in defending antitrust and consumer class actions. His successful representation of multinational companies in antitrust class actions earned him a spot among Law360’s Rising Stars, which recognizes accomplishments of attorneys under 40 “whose legal accomplishments transcend their age.”
Alyssa Vallar
Alyssa Vallar is an associate in the firm’s Washington, DC office and a member of the Litigation and Investigations Practice Group. Prior to joining the firm, Alyssa clerked for the Hon. Gerald Bard Tjoflat on the U.S. Court of Appeals for the Eleventh Circuit.
-- by Don Allen Resnikoff
The recent Hawaii experience with extensive fire damage made me wonder whether DC government has done any planning concerning local consequences of climate change. An example we all can think of is the effect on DC of sea level rise.
It turns out that DC government has done some planning. See https://sustainable.dc.gov/climateready Following is some language from the DC website:
The Climate Ready DC Plan
In the past several years, the District has seen record-breaking extreme weather (like heat waves and snowstorms), higher tides caused by rising sea level, heavy rains and flooding, and warmer average temperatures and two to three times as many dangerously hot days. Climate Ready DC is the District’s plan to adapt to our changing climate. While the District is doing its part to reduce greenhouse gas emissions, we are already seeing the impacts of climate change. Climate adaptation means taking action today to prepare people, homes, communities, businesses and infrastructure for the potential impacts of climate change.
Learn what the District is doing to prepare for the impacts of climate change. https://doee.dc.gov/climateready
[click]
What Climate Change Means for the District--
Rising Temperatures, Heatwaves and Dangerously Hot Days
Average annual temperatures have increased 2°F during the last 50 years, and are expected to continue to rise. Historically, the average summer high temperature in the District was 87°F. This is projected to increase significantly to between 93°F and 97°F by the 2080s. As average temperatures rise, extreme heat days will increase and heatwaves will last longer and occur more frequently. Heat waves can be deadly, as prolonged heat exposure may lead to a series of health conditions, including respiratory challenges, exhaustion, cramping, heatstroke, and fatalities. This proves especially true for older people, children, and those with existing health conditions, who are at greater risk of developing heat-related illnesses.
Even more, some neighborhoods in DC are up to 16.5°F warmer than others due to the urban heat island effect. Neighborhoods with large areas of pavement and buildings, and minimal green space, stay warmer than non-urban areas. As temperatures increase due to climate change, this effect will worsen.
More Frequent and Intense Heavy Rain Events
In September 2020, a surprisingly intense storm dumped almost three inches of stormwater on the District in a two hour period that overwhelmed sewer and stormwater infrastructure and led to dangerous flooding and prompted numerous rescue operations. In July 2019, the District experienced a month’s worth of rain in a matter of hours, stranding residents on top of their cars. In 2016, a cloudburst (sudden, violent rainstorm) over Cleveland Park sent water rushing down the Metro station escalators and submerged the tracks with water, closing the station. In 2012, heavy rains over the Bloomingdale neighborhood overwhelmed the storm sewer system and flooded streets and the basements of homes. In 2006, heavy rains over Federal Triangle caused flooding that submerged the basements of federal office buildings and national museums with multiple feet of water, causing millions of dollars in damage and exposing the priceless collections of the country’s museums. The intensity and frequency of these severe rain storms is only expected to increase in the District as a result of climate change.
Sea Level Rise & Storm Surge
Over the last century, warmer oceans and melting ice due to climate change have caused sea levels to rise around the globe. This change in sea level poses significant risks to coastal cities and those adjacent to tidal rivers. In the District, water levels for the Potomac and Anacostia Rivers, both tidal rivers, have increased 11 inches in the past 90 years. As a result, flooding along our riverfront has increased by more than 300%, according to the National Oceanic and Atmospheric Administration. Sea level rise will only amplify this trend.
++++
DC law allows public interest organizations independent standing to assert claims on behalf of consumers
-by Don Allen Resnikoff
DC’s CPPA allows public interest organizations independent standing to assert claims on behalf of consumers. The DC Court of Appeals has agreed that public interest organization have standing to bring such actions even if the organization fails to satisfy usual Article III standing requirements.
For the plaintiffs’ bar the unusual CPPA provision suggests unusual opportunities. Can actions be brought by a public interest firm to enjoin overcharging in the same manner that the DC AG enjoined GrubHub from overcharging, even in a situation where certifying a class action would be difficult?
Covington attorneys examine the issue from a defendants’ perspective in an article at https://www.insideclassactions.com/2022/03/08/a-closer-look-d-c-court-of-appeals-endorses-broad-organizational-standing-to-bring-consumer-protection-lawsuits/ A slightly modified version of that article appears below.
The topic of public interest organizations independent standing to assert claims on behalf of consumers is of great interest and importance, and deserves further discussion.
**
A Closer Look: D.C. Court of Appeals Endorses Broad Organizational Standing to Bring Consumer Protection Lawsuits
By Andrew Soukup, Ashley Simonsen, Henry Liu & Alyssa Vallar on March 8, 2022
The District of Columbia Court of Appeals has endorsed an expansive interpretation of the CPPA, permitting a public interest organization to bring such actions even if the organization fails to satisfy Article III’s standing requirements. We expect even more lawsuits to be filed in the wake of this decision.
The CPPA Purports to Allow Public Interest Organizations to Assert Mislabeling Claims on Behalf of Consumers Generally.
The CPPA prohibits misleading or deceptive trade practices. It purports to give public interest organizations the right to sue on behalf of the consumer or class of consumers likely to be deceived or misled by those practices, as long as the organization has a “sufficient nexus” to the interest of such consumers to adequately represent those interests. D.C. Code § 28-3905(k)(1)(D). Public interest organizations have increasingly embraced this provision of the CPPA to argue that they may stand in the shoes of consumers and bring any lawsuit that an individual consumer might bring, even if the organization itself has not suffered any injury.
Defendants have attempted to dismiss these cases on Article III standing grounds, but trial courts have reached inconsistent decisions. Some courts have dismissed CPPA claims brought by public interest organizations for lack of Article III standing where the organization failed to show that it suffered an injury-in-fact. Others, however, have held that public interest organizations need not establish Article III standing to bring a deceptive trade practices claim under the CPPA.
The D.C. Court of Appeals Clarifies that Article III Standing Requirements Do Not Apply to Certain CPPA Claims.
The District of Columbia Court of Appeals decision in Animal Legal Defense Fund v. Hormel Foods Corp., 258 A.3d 174 (D.C. 2021), resolved this disagreement, holding that a public interest organization may bring suit under the CPPA free from any requirement to demonstrate its own Article III standing. Although Article III’s standing requirements usually apply in District of Columbia courts, the Hormel Foods court held that the legislative history of the CPPA reflected an intent by the District of Columbia Council to displace Article III’s standing requirements with a more lenient statutory test for standing.
The key takeaways from the decision include:
• Only Statutory Standing Required. A public interest organization—defined by the CPPA as “a nonprofit organization that is organized and operating, in whole or in part, for the purpose of promoting interests or rights of consumers,” D.C. Code § 28-3901(a)(15)—need not satisfy traditional Article III standing requirements to bring a CPPA claim in District of Columbia courts. Rather, such organizations need only satisfy the CPPA’s statutory standing requirement that the organization have a “sufficient nexus” to the interests of the consumers they seek to represent.
• Broad Nexus Requirement. In determining whether such a nexus exists, the Court of Appeals suggested that protecting consumer interests need not be the organization’s primary purpose. The plaintiff in Hormel Foods satisfied this requirement by showing that one of its “subsidiary purposes” was to ensure that consumers of meat have accurate information about factory farming conditions and practices so they can make informed decisions about meat consumption—even though the organization’s primary mission was to protect the lives and advance the interests of animals.
• Loose Pleading Standards. The Court of Appeals embraced a loose pleading standard for asserting standing under § 28-3905(k)(1)(D). Although the plaintiff in Hormel Foods did not invoke this provision as a basis for standing in its complaint—indeed, it did not invoke that provision until summary judgment—the Court allowed the lawsuit to proceed on the ground that the facts alleged in the complaint nonetheless supported this theory of standing.
CPPA Claims Brought by Public Interest Organizations Require Creative Defenses.
Hormel Foods removes one arrow from a defendant’s quiver in CPPA cases brought by public interest organizations. Companies that sell products in the District of Columbia should prepare to be targeted by this statute by organizations purporting to act in the public interest. And because many of these lawsuits seek only injunctive and declaratory relief, they can be difficult to remove to a federal court.
Yet despite Hormel Foods’s expansive interpretation of standing under the CPPA, companies can still avail themselves of creative arguments to defeat CPPA claims.
• Other CPPA Provisions Still Require Article III Standing. The holding in Hormel Foods applies only to lawsuits brought by public interest organizations on behalf of a consumer or class of consumers under § 28-3905(k)(1)(D). It does not apply to consumers seeking direct relief from a deceptive trade practice (§ 28-3905(k)(1)(A)), nor does it apply to individuals or organizations that bring a CPPA claim—on behalf of themselves or the general public—based on products they purchased simply to test whether the representations about the product are true (§ 28-3905(k)(1)(B), (C)). Individual and organizational plaintiffs, including “tester” plaintiffs, who sue under these other provisions of the CPPA must still show Article III standing.
• Personal Jurisdiction. Notwithstanding Hormel Foods, personal jurisdiction requirements continue to apply in District of Columbia courts to the same extent as in federal courts. Even if a public interest organization has statutory standing under the CPPA, it still must demonstrate that the District of Columbia court has personal jurisdiction over the defendant.
• No Underlying Claim By Consumers. While a public organization need not demonstrate injury to itself, it must still identify a consumer or class of consumers who have or will be injured by the alleged deceptive practices. D.C. Code § 28-3905(k)(1)(D) permits public interest organizations to bring private attorney-general lawsuits only to the extent an individual consumer or class of consumers could bring a CPPA claim. In other words, showing that an individual consumer cannot maintain a deceptive practices claim against a company remains a viable defense to a claim by a public interest organization.
Tags: False Advertising, Food Labeling, Litigation
Covington Authors:
Andrew Soukup
Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings.
Ashley Simonsen
Ashley Simonsen is a litigator whose practice focuses on defending complex class actions in state and federal courts across the country, with substantive experience in the three hotbeds of class action litigation: New York, San Francisco, and Los Angeles.
Henry Liu
Henry Liu specializes in defending antitrust and consumer class actions. His successful representation of multinational companies in antitrust class actions earned him a spot among Law360’s Rising Stars, which recognizes accomplishments of attorneys under 40 “whose legal accomplishments transcend their age.”
Alyssa Vallar
Alyssa Vallar is an associate in the firm’s Washington, DC office and a member of the Litigation and Investigations Practice Group. Prior to joining the firm, Alyssa clerked for the Hon. Gerald Bard Tjoflat on the U.S. Court of Appeals for the Eleventh Circuit.
Is my donation to my alma mater supporting a losing investment in college football?
By Don Allen Resnikoff
My interest in the business of college football increased when I discovered that my alma mater, New Jersey’s Rutgers University, is losing millions because of its investment in college football. I am affected because I have donated money to Rutgers, in amounts that for me are large. I’d like to feel that the donations are helping students, not offsetting ill-considered sports business investments.
Early reporting on Rutgers’ football business problems appeared at https://www.northjersey.com/story/news/watchdog/2022/07/07/rutgers-athletics-spends-big-builds-debt-big-ten-conference/65367819007/ The article reports that Rutgers athletics had football related debt of more than $250 million: “The rising costs were part of joining the Big Ten Conference in 2014, with coaches’ salaries doubling and football — the sport that traditionally brings in cash for athletics divisions — losing millions of dollars. . . . Losses were more than $73 million two years running, followed by $60 million in 2022.”
Football business losses at Rutgers are a burden on the State of New Jersey and its taxpayers, who provide subsidy money to Rutgers, and also to tuition paying students and donors like me.
The business problems of college football are not limited to Rutgers. While many colleges do show a profit on their football programs, college football programs are fraught with financial risk. A successful football business venture requires that a college field a team that will attract TV viewers – a losing team probably won’t do it. Also, the team must be part of a conference of teams that can arrange a lucrative contract with a media giant like Fox or ESPN. The media giants themselves face headwinds as their business moves from bundled cable programming to streaming video. It is a risky business for college administrators.
The college football business also raises questions about the need of colleges to focus on their main goal: education. Colleges obviously should focus mainly on educating students, not on running a risky football business analogous to running a for-profit gladiator circus.
The business risk and educational values issues have gotten a lot of media attention recently because of recent shifts of allegiance by colleges among the college football conferences that arrange TV contracts with media companies like ESPN and FOX. The Wall Street Journal (https://www.wsj.com/sports/football/college-sports-pac-12-big-ten-big-12-7b7902a7?mod=wsjhp_columnists_pos2) describes the shift of alliances. If I understand the shifts correctly (there is a good chance I don’t, but plainly there are a lot of shifts), former Pac-12 schools the University of Washington and the University of Oregon recently left Pac-12 to join the Big Ten. Previously, Arizona, Arizona State , Utah, and Colorado left Pac-12 to join the Big 12. That means that Pac-12 will be left with only four teams. As soon as 2024, the Big Ten conference will have 18 members while the Big 12 will swell to 16.
The bottom line is that some colleges are engaging in risky business ventures when they should be focused on education. Many in major media outlets get that point. Here is an excerpt from the Atlantic:
For so long, college-football power brokers spent a lot of time conjuring every excuse as to why a fair and equitable system for players just wasn’t feasible. Now colleges’ hypocrisy is being fully exposed. Athletes were simply seeking equity and fair market value, and they’re finally able to get it. Colleges have been beholden to money the whole time. https://www.theatlantic.com/ideas/archive/2023/08/college-football-greed-conference-alignment/674930/
Of course, financial mismanagement by colleges is not necessarily confined to the football/media business. A recent article in the Wall Street Journal argues that "The nation’s best-known public universities have been on an unfettered spending spree." See https://www.wsj.com/articles/state-university-tuition-increase-spending-41a58100?st=lql2duwyp2dje9z&reflink=article_email_share
By Don Allen Resnikoff
My interest in the business of college football increased when I discovered that my alma mater, New Jersey’s Rutgers University, is losing millions because of its investment in college football. I am affected because I have donated money to Rutgers, in amounts that for me are large. I’d like to feel that the donations are helping students, not offsetting ill-considered sports business investments.
Early reporting on Rutgers’ football business problems appeared at https://www.northjersey.com/story/news/watchdog/2022/07/07/rutgers-athletics-spends-big-builds-debt-big-ten-conference/65367819007/ The article reports that Rutgers athletics had football related debt of more than $250 million: “The rising costs were part of joining the Big Ten Conference in 2014, with coaches’ salaries doubling and football — the sport that traditionally brings in cash for athletics divisions — losing millions of dollars. . . . Losses were more than $73 million two years running, followed by $60 million in 2022.”
Football business losses at Rutgers are a burden on the State of New Jersey and its taxpayers, who provide subsidy money to Rutgers, and also to tuition paying students and donors like me.
The business problems of college football are not limited to Rutgers. While many colleges do show a profit on their football programs, college football programs are fraught with financial risk. A successful football business venture requires that a college field a team that will attract TV viewers – a losing team probably won’t do it. Also, the team must be part of a conference of teams that can arrange a lucrative contract with a media giant like Fox or ESPN. The media giants themselves face headwinds as their business moves from bundled cable programming to streaming video. It is a risky business for college administrators.
The college football business also raises questions about the need of colleges to focus on their main goal: education. Colleges obviously should focus mainly on educating students, not on running a risky football business analogous to running a for-profit gladiator circus.
The business risk and educational values issues have gotten a lot of media attention recently because of recent shifts of allegiance by colleges among the college football conferences that arrange TV contracts with media companies like ESPN and FOX. The Wall Street Journal (https://www.wsj.com/sports/football/college-sports-pac-12-big-ten-big-12-7b7902a7?mod=wsjhp_columnists_pos2) describes the shift of alliances. If I understand the shifts correctly (there is a good chance I don’t, but plainly there are a lot of shifts), former Pac-12 schools the University of Washington and the University of Oregon recently left Pac-12 to join the Big Ten. Previously, Arizona, Arizona State , Utah, and Colorado left Pac-12 to join the Big 12. That means that Pac-12 will be left with only four teams. As soon as 2024, the Big Ten conference will have 18 members while the Big 12 will swell to 16.
The bottom line is that some colleges are engaging in risky business ventures when they should be focused on education. Many in major media outlets get that point. Here is an excerpt from the Atlantic:
For so long, college-football power brokers spent a lot of time conjuring every excuse as to why a fair and equitable system for players just wasn’t feasible. Now colleges’ hypocrisy is being fully exposed. Athletes were simply seeking equity and fair market value, and they’re finally able to get it. Colleges have been beholden to money the whole time. https://www.theatlantic.com/ideas/archive/2023/08/college-football-greed-conference-alignment/674930/
Of course, financial mismanagement by colleges is not necessarily confined to the football/media business. A recent article in the Wall Street Journal argues that "The nation’s best-known public universities have been on an unfettered spending spree." See https://www.wsj.com/articles/state-university-tuition-increase-spending-41a58100?st=lql2duwyp2dje9z&reflink=article_email_share
The DC Attorney General's unique role in bringing important local cases
In this article I argue in support of District of Columbia Attorney General (AG) Brian Schwalb’s
efforts to bring cases where the main benefits are local. The AG’s filing of such cases has
special importance, particularly when initiating the cases will not be of interest to prosecutors
in other states.
DC government needs to assure that the Office of the DC Attorney General retains sufficient
funds to successfully pursue local cases.
The Attorney General sues as Plaintiff where bringing a case will benefit the public. Many of
those cases will have regional or national impact, and may be brought by the DC Attorney
General in cooperation with other State AGs or federal enforcers. Other cases brought by the
AG may be primarily of local interest, which is why they are unlikely to be of interest to
prosecutors in other States.
In choosing to bring cases with local impact, the DC Attorney General faces a quandary shared
by all state level AGs: locally significant cases may be difficult to pursue and put heavy demands
on limited local resources. Although some companies that are targets of Attorney General
lawsuits may act quickly to acknowledge and remedy charges of wrongdoing, others may not.
Defendants have a right to vigorously defend cases in court, and when they do so they increase
the resource burdens on the AG's Office.
The solution to limited resource issues can be simple: more resources. The DC Council can
allocate money from several sources, including allowing money recoveries from successful AG
cases to be retained by the AG and used to pay for more AG cases.
The current DC Attorney General, Brian Schwalb, and his predecessor, Karl Racine, have
pursued a number of affirmative cases that illustrate the importance of locally significant cases.
Some examples:
In December, 2022, then Attorney General Karl Racine announced the results of DC’s action
against Grubhub Holdings, Inc. and Grubhub, Inc. (Grubhub). The companies would pay $3.5
million for charging customers hidden fees and using deceptive marketing techniques to
increase profits. See https://oag.dc.gov/release/ag-racine-secures-35-million-grubhub-illegally,
https://oag.dc.gov/release/ag-racine-secures-35-million-grubhub-illegally. In addition, Grubhub
agreed to reform misleading pricing practices.
Grubhub is a food delivery company that takes costumers' food orders through the company's
website or app and then connects the order with a "gig economy" worker who picks up the
order from the restaurant and delivers it to the consumer. Grubhub makes money by charging
consumers fees when they order food, and by charging fees and commissions to many of the
restaurants that appear on its website.
The DC AG's Office sued Grubhub for alleged violations of the District's Consumer Protection
and Procedures Act (CPPA). The Act provides that it is illegal to make misrepresentations about
products or services. The violations charged by the AG's Office involved Grubhub's failure to
adequately disclose pricing information to consumers, resulting in overcharges. For example,
Grubhub charged menu prices higher than those available at the restaurant, without disclosing
that prices may be higher on Grubhub.
The full settlement agreement between the DC Ag and Grubhub is here:
https://oag.dc.gov/sites/default/files/2022-12/2022.12.30 Consent Judgment and Order.pdf
As Attorney General, Karl Racine also brought cases supporting DC's 24% interest rate cap on
consumer loans. (There is some pushback against such interest rate caps from lenders and
others, but I will leave consideration of the merits of interest rate caps for another discussion.)
In 2021 the DC Office of the Attorney General sued Opportunity Financial (OppFi) for
deceptively marketing high interest loans to DC consumers. Some of these rates were more
than eight times higher than the DC rate cap. This DC litigation effort was successful.
OppFi agreed to refund $1.5 million to over 4,000 District consumers whom OppFi charged high
interest rates. OppFi waived over $640,000 in interest owed by those consumers, and paid
$250,000 to the District in penalties.
OppFi, an online lender, used a "rent-a-bank" scheme, coordinating with banks in states that
allow high interest loans in a scheme to avoid state and local laws in jurisdictions that do have
limits on high interest rates loans.
The action against OppFi was important to local consumers. In an online posting, the DC AG's
office explained that OppFi provided loans to many District residents at a difficult to repay
160% APR—more than seven times the District's 24% rate cap.
The OppFi prosecution is one of several similar predatory lending cases pursued by Karl Racine
as Attorney General.
In recent months DC Attorney General Brian Schwalb has demonstrated the DC AG Office’s
continuing interest in bringing cases of local concern.
In April of this year, Attorney General Schwalb announced that Pro-Football Inc., the corporation that
owns the Washington Commanders, will return over $200,000 to affected ticket holders and pay $425,000 to the
District to resolve allegations that the team systematically failed to return ticket holders’
deposits and intentionally created barriers for fans to get refunds, in violation of District law.
The full settlement agreement is available at https://oag.dc.gov/sites/default/files/2023-
04/2023.4.10 DC v. Pro-Football Inc. Consent Order-signed.pdf
Attorney General Schwalb announced another locally important case resolution in April of this
year, involving Maryland Applicators.
Maryland Applicators, a construction company that
operates throughout the District of Columbia, will pay $835,000 to the District to
resolve allegations that the company intentionally misclassified its employees as independent
contractors to avoid providing them sick leave and other employment benefits which they were
legally owed. As part of the settlement, the company also agreed not to bid on or provide work
under any District government contracts for one year. The AG press release is at AG Schwalb
Secures $835,000 from Construction Company that Denied Workers Sick Leave and Benefits (dc.gov)
https://oag.dc.gov/release/ag-schwalb-secures-835000-construction-company
In March of this year, AG Schwalb announced several initiatives to aid DC tenants. He
announced the filing of a housing discrimination lawsuit seeking to enforce new protections for
DC tenants that went into effect in 2022. In a lawsuit filed against two local real estate
companies—Bailey Real Estate Holdings, LLC and 1537 Gales Street NE, LLC—and two
individuals who operate those companies, the Office of the Attorney General (OAG) asserted
that the defendants illegally discriminated against some housing voucher holders. The lawsuit
also claims that the defendants illegally refused to accept housing vouchers at some properties,
falsely telling prospective tenants with vouchers that apartments were unavailable. The suit
sought a court order to stop the discrimination, as well as civil penalties and other costs. See
the AG press release at https://oag.dc.gov/release/ag-schwalb-files-first-lawsuit-enforcing-newanti
AG Schwalb also announced in March the successful resolution of four separate housing cases
that will require landlords in Wards 1, 5, and 8 to remedy serious threats to the safety and
security of tenants and community members at their respective properties.
Other investigations involving housing are discussed in the AG press release at
https://oag.dc.gov/release/ag-schwalb-requires-landlords-make-critical-health
The commitment of Attorney General Schwalb to continuing enforcement of locally important
matters is reflected in the posting by Adam Teitelbaum, Director of OAG's Office of Consumer
Protection. See https://oag.dc.gov/blog/district-consumers-most-common-concerns-2022
Mr. Teitelbaum points out some of the cases discussed earlier in this article:
In 2022, OAG heard from thousands of consumers and as a result, opened 2,874
individual consumer complaints — the highest number to date. Through its free
mediation service, OAG was able to return more than $582,000 directly to consumers.
OAG also secured more than $7 million dollars in 2022 by enforcing DC’s consumer
protection laws, including by successfully resolving of our lawsuits against rent-a-bank
lenders Opportunity Financial and Elevate, online delivery
services Instacart and Grubhub, and local home warranty scammer Express
Homebuyers.
The cases discussed earlier in this article and by Mr. Teitelbaum reflect both the importance of
locally significant cases and the commitment of the DC AG’s Office to pursue them, even
though locally significant cases can be difficult and expensive to pursue.
DC AG cases that illustrate the problem of locally important but resource intensive cases
include cases brought against Capitol Petroleum Group, LLC (CPG) and its affiliated companies.
Capitol is a leading retailer and wholesale distributor of gasoline in the District of Columbia.
In 2020, then DC AG Racine sued Capitol Petroleum Group (CPG), LLC and affiliated companies
for illegal price gouging during the District's COVID-19 emergency. The Office of the Attorney
General explained that even as wholesale gas prices dropped when the economy slowed in
March and April of 2020, CPG doubled its profits on each gallon of gas sold at retail to
consumers at 54 gas stations in the District. OAG also alleged that CPG and its affiliates unfairly
increased profit margins they earned on wholesale gas distribution to other retailers.
The DC AG's price gouging complaint is available at:
https://www.docketalarm.com/cases/District_Of_Columbia_Superior_Court/2020%20CA%200
04671%20B/DISTRICT_OF_COLUMBIA_Vs._CAPITOL_PETROLEUM_GROUP_LLC_et_al_DAD/Co
mplaint%20Package%20eServed%20to%20Filer_11122020/
Capitol Petroleum and affiliates defended vigorously. As of early 2023 the case remains before
the DC courts. See
https://www.docketalarm.com/cases/District_Of_Columbia_Superior_Court/2020%20CA%200
04671%20B/DISTRICT_OF_COLUMBIA_Vs._CAPITOL_PETROLEUM_GROUP_LLC_et_al_DAD/The
%20District%20of%20Columbia_04292022/ Also https://portaldc.
tylertech.cloud/app/RegisterOfActions/#/94075D50836EE14258D500E19194103CE7EE373A
1E5168F6DD46576A602A6E6B/anon/portalembed
There is little doubt that the continuing litigation entails significant government personnel resources
and expense.
A long litigation history indicates that local gasoline supply cases can be difficult and costly to
bring for the DC Office of the Attorney General. In 2013, the DC AG at that time, Irvin Nathan,
brought a lawsuit concerning local gasoline distribution and pricing against Capitol Petroleum
Group LLC and affiliates that was eventually dropped after extended and expensive litigation,
without any remedy being secured. Washington Post reporter Mike DeBonis described the case
as targeting "exclusive-supply agreements" between the most powerful local gasoline
wholesaler and the independent dealers who operated wholesaler-owned stations.
ExxonMobil was also named as a defendant in the case, as it established the exclusive supply
agreements in question before selling 29 stations with the exclusive supply arrangements to
wholesaler-station operator Eyob Mamo in 2009. See
https://www.washingtonpost.com/blogs/mike-debonis/wp/2013/08/27/d-c-attorney-generaltakes-
new-aim-at-gas-mogul-joe-mamo/
It is not surprising that ExxonMobil contributed substantially to a vigorous litigation defense
against the AG’s enforcement efforts.
Allocating adequate resources to litigating cases brought by the DC AG has been an important
topic for the DC Council and the DC Attorney General. In April of this year AG Schwalb provided
testimony on behalf of Office of the Attorney General to the DC Council hearing on the fiscal
Year 2024 Budget. See https://oag.dc.gov/release/ag-schwalb-testimony-office-attorneygeneral-
In his statement to the DC Council, AG Schwalb explained that OAG actions generate a return
far in excess of their cost. He said that OAG generated nearly $600 million for the District, a
roughly four-times return on investment based on the AG’s FY22 budget. With regard to
litigation initiated by the AG’s Office , including consumer matters, AG Schwalb said that the
AG’s Public Advocacy Division netted $12 million in penalties and restitution in consumer
protection, housing, workers’ rights, and civil rights cases brought in the public interest.
In addition, AG Schwalb pointed out that the benefits OAG provides for the District are not just
monetary in nature --enforcing and defending the laws the Council has enacted is of obvious
great public benefit.
AG Schwalb’s testimony comes at a time when the District is strapped for funds. The Mayor’s
Office has shown an inclination to limit the amount the AG can retain from case winnings and
plow back into new cases. AG Schwalb’s characterization of these issues in his testimony is
statesmanlike in tone: “For purposes of this year’s budget, we recognized the Council
faces difficult budget choices, and we thought it was important for OAG to partner with the
Mayor, to the greatest extent possible, to develop OAG’s budget. . . . [T]he Mayor asked OAG to
find $10 million in savings in our budget. . . . I am pleased to report that . . . we reached almost
full agreement. As a result, the enhancement requests we have of the Council are modest, both
in number and amount.”
But, there are two sides to the budget discussions AG Schwalb has carried out with the Mayor
in his statesmanlike manner. Funding needs can be large for affirmative consumer protection,
antitrust, and other cases of importance, including difficult cases focusing on local issues. The
need to finance difficult cases focusing on local issues is illustrated by the vigorously contested
gasoline price case currently being litigated in the DC Courts, and earlier gasoline price litigation
brought and later dropped by the DC AG’s Office.
As an outside observer I can’t say whether the budget compromises reached between DC AG
Schwalb and Mayor Bowser sufficiently address the funding needs of the Attorney General’s
Office. But I can point out that adequately investing in enforcement is of great public concern.
As AG Schwalb points out, what is at stake is whether the AG is being allowed to retain
sufficient funds to successfully pursue important cases in the public interest, including cases
primarily of local concern. Only the DC AG has the power and interest in pursuing the cases that
are primarily of local concern.
END Don Resnikoff ©
Disclosure note: I have represented gasoline retailers in legal actions against gasoline
distributors; gasoline distribution issues interested me when I was the lead antitrust attorney
with the DC AG's office some years ago.
In this article I argue in support of District of Columbia Attorney General (AG) Brian Schwalb’s
efforts to bring cases where the main benefits are local. The AG’s filing of such cases has
special importance, particularly when initiating the cases will not be of interest to prosecutors
in other states.
DC government needs to assure that the Office of the DC Attorney General retains sufficient
funds to successfully pursue local cases.
The Attorney General sues as Plaintiff where bringing a case will benefit the public. Many of
those cases will have regional or national impact, and may be brought by the DC Attorney
General in cooperation with other State AGs or federal enforcers. Other cases brought by the
AG may be primarily of local interest, which is why they are unlikely to be of interest to
prosecutors in other States.
In choosing to bring cases with local impact, the DC Attorney General faces a quandary shared
by all state level AGs: locally significant cases may be difficult to pursue and put heavy demands
on limited local resources. Although some companies that are targets of Attorney General
lawsuits may act quickly to acknowledge and remedy charges of wrongdoing, others may not.
Defendants have a right to vigorously defend cases in court, and when they do so they increase
the resource burdens on the AG's Office.
The solution to limited resource issues can be simple: more resources. The DC Council can
allocate money from several sources, including allowing money recoveries from successful AG
cases to be retained by the AG and used to pay for more AG cases.
The current DC Attorney General, Brian Schwalb, and his predecessor, Karl Racine, have
pursued a number of affirmative cases that illustrate the importance of locally significant cases.
Some examples:
In December, 2022, then Attorney General Karl Racine announced the results of DC’s action
against Grubhub Holdings, Inc. and Grubhub, Inc. (Grubhub). The companies would pay $3.5
million for charging customers hidden fees and using deceptive marketing techniques to
increase profits. See https://oag.dc.gov/release/ag-racine-secures-35-million-grubhub-illegally,
https://oag.dc.gov/release/ag-racine-secures-35-million-grubhub-illegally. In addition, Grubhub
agreed to reform misleading pricing practices.
Grubhub is a food delivery company that takes costumers' food orders through the company's
website or app and then connects the order with a "gig economy" worker who picks up the
order from the restaurant and delivers it to the consumer. Grubhub makes money by charging
consumers fees when they order food, and by charging fees and commissions to many of the
restaurants that appear on its website.
The DC AG's Office sued Grubhub for alleged violations of the District's Consumer Protection
and Procedures Act (CPPA). The Act provides that it is illegal to make misrepresentations about
products or services. The violations charged by the AG's Office involved Grubhub's failure to
adequately disclose pricing information to consumers, resulting in overcharges. For example,
Grubhub charged menu prices higher than those available at the restaurant, without disclosing
that prices may be higher on Grubhub.
The full settlement agreement between the DC Ag and Grubhub is here:
https://oag.dc.gov/sites/default/files/2022-12/2022.12.30 Consent Judgment and Order.pdf
As Attorney General, Karl Racine also brought cases supporting DC's 24% interest rate cap on
consumer loans. (There is some pushback against such interest rate caps from lenders and
others, but I will leave consideration of the merits of interest rate caps for another discussion.)
In 2021 the DC Office of the Attorney General sued Opportunity Financial (OppFi) for
deceptively marketing high interest loans to DC consumers. Some of these rates were more
than eight times higher than the DC rate cap. This DC litigation effort was successful.
OppFi agreed to refund $1.5 million to over 4,000 District consumers whom OppFi charged high
interest rates. OppFi waived over $640,000 in interest owed by those consumers, and paid
$250,000 to the District in penalties.
OppFi, an online lender, used a "rent-a-bank" scheme, coordinating with banks in states that
allow high interest loans in a scheme to avoid state and local laws in jurisdictions that do have
limits on high interest rates loans.
The action against OppFi was important to local consumers. In an online posting, the DC AG's
office explained that OppFi provided loans to many District residents at a difficult to repay
160% APR—more than seven times the District's 24% rate cap.
The OppFi prosecution is one of several similar predatory lending cases pursued by Karl Racine
as Attorney General.
In recent months DC Attorney General Brian Schwalb has demonstrated the DC AG Office’s
continuing interest in bringing cases of local concern.
In April of this year, Attorney General Schwalb announced that Pro-Football Inc., the corporation that
owns the Washington Commanders, will return over $200,000 to affected ticket holders and pay $425,000 to the
District to resolve allegations that the team systematically failed to return ticket holders’
deposits and intentionally created barriers for fans to get refunds, in violation of District law.
The full settlement agreement is available at https://oag.dc.gov/sites/default/files/2023-
04/2023.4.10 DC v. Pro-Football Inc. Consent Order-signed.pdf
Attorney General Schwalb announced another locally important case resolution in April of this
year, involving Maryland Applicators.
Maryland Applicators, a construction company that
operates throughout the District of Columbia, will pay $835,000 to the District to
resolve allegations that the company intentionally misclassified its employees as independent
contractors to avoid providing them sick leave and other employment benefits which they were
legally owed. As part of the settlement, the company also agreed not to bid on or provide work
under any District government contracts for one year. The AG press release is at AG Schwalb
Secures $835,000 from Construction Company that Denied Workers Sick Leave and Benefits (dc.gov)
https://oag.dc.gov/release/ag-schwalb-secures-835000-construction-company
In March of this year, AG Schwalb announced several initiatives to aid DC tenants. He
announced the filing of a housing discrimination lawsuit seeking to enforce new protections for
DC tenants that went into effect in 2022. In a lawsuit filed against two local real estate
companies—Bailey Real Estate Holdings, LLC and 1537 Gales Street NE, LLC—and two
individuals who operate those companies, the Office of the Attorney General (OAG) asserted
that the defendants illegally discriminated against some housing voucher holders. The lawsuit
also claims that the defendants illegally refused to accept housing vouchers at some properties,
falsely telling prospective tenants with vouchers that apartments were unavailable. The suit
sought a court order to stop the discrimination, as well as civil penalties and other costs. See
the AG press release at https://oag.dc.gov/release/ag-schwalb-files-first-lawsuit-enforcing-newanti
AG Schwalb also announced in March the successful resolution of four separate housing cases
that will require landlords in Wards 1, 5, and 8 to remedy serious threats to the safety and
security of tenants and community members at their respective properties.
Other investigations involving housing are discussed in the AG press release at
https://oag.dc.gov/release/ag-schwalb-requires-landlords-make-critical-health
The commitment of Attorney General Schwalb to continuing enforcement of locally important
matters is reflected in the posting by Adam Teitelbaum, Director of OAG's Office of Consumer
Protection. See https://oag.dc.gov/blog/district-consumers-most-common-concerns-2022
Mr. Teitelbaum points out some of the cases discussed earlier in this article:
In 2022, OAG heard from thousands of consumers and as a result, opened 2,874
individual consumer complaints — the highest number to date. Through its free
mediation service, OAG was able to return more than $582,000 directly to consumers.
OAG also secured more than $7 million dollars in 2022 by enforcing DC’s consumer
protection laws, including by successfully resolving of our lawsuits against rent-a-bank
lenders Opportunity Financial and Elevate, online delivery
services Instacart and Grubhub, and local home warranty scammer Express
Homebuyers.
The cases discussed earlier in this article and by Mr. Teitelbaum reflect both the importance of
locally significant cases and the commitment of the DC AG’s Office to pursue them, even
though locally significant cases can be difficult and expensive to pursue.
DC AG cases that illustrate the problem of locally important but resource intensive cases
include cases brought against Capitol Petroleum Group, LLC (CPG) and its affiliated companies.
Capitol is a leading retailer and wholesale distributor of gasoline in the District of Columbia.
In 2020, then DC AG Racine sued Capitol Petroleum Group (CPG), LLC and affiliated companies
for illegal price gouging during the District's COVID-19 emergency. The Office of the Attorney
General explained that even as wholesale gas prices dropped when the economy slowed in
March and April of 2020, CPG doubled its profits on each gallon of gas sold at retail to
consumers at 54 gas stations in the District. OAG also alleged that CPG and its affiliates unfairly
increased profit margins they earned on wholesale gas distribution to other retailers.
The DC AG's price gouging complaint is available at:
https://www.docketalarm.com/cases/District_Of_Columbia_Superior_Court/2020%20CA%200
04671%20B/DISTRICT_OF_COLUMBIA_Vs._CAPITOL_PETROLEUM_GROUP_LLC_et_al_DAD/Co
mplaint%20Package%20eServed%20to%20Filer_11122020/
Capitol Petroleum and affiliates defended vigorously. As of early 2023 the case remains before
the DC courts. See
https://www.docketalarm.com/cases/District_Of_Columbia_Superior_Court/2020%20CA%200
04671%20B/DISTRICT_OF_COLUMBIA_Vs._CAPITOL_PETROLEUM_GROUP_LLC_et_al_DAD/The
%20District%20of%20Columbia_04292022/ Also https://portaldc.
tylertech.cloud/app/RegisterOfActions/#/94075D50836EE14258D500E19194103CE7EE373A
1E5168F6DD46576A602A6E6B/anon/portalembed
There is little doubt that the continuing litigation entails significant government personnel resources
and expense.
A long litigation history indicates that local gasoline supply cases can be difficult and costly to
bring for the DC Office of the Attorney General. In 2013, the DC AG at that time, Irvin Nathan,
brought a lawsuit concerning local gasoline distribution and pricing against Capitol Petroleum
Group LLC and affiliates that was eventually dropped after extended and expensive litigation,
without any remedy being secured. Washington Post reporter Mike DeBonis described the case
as targeting "exclusive-supply agreements" between the most powerful local gasoline
wholesaler and the independent dealers who operated wholesaler-owned stations.
ExxonMobil was also named as a defendant in the case, as it established the exclusive supply
agreements in question before selling 29 stations with the exclusive supply arrangements to
wholesaler-station operator Eyob Mamo in 2009. See
https://www.washingtonpost.com/blogs/mike-debonis/wp/2013/08/27/d-c-attorney-generaltakes-
new-aim-at-gas-mogul-joe-mamo/
It is not surprising that ExxonMobil contributed substantially to a vigorous litigation defense
against the AG’s enforcement efforts.
Allocating adequate resources to litigating cases brought by the DC AG has been an important
topic for the DC Council and the DC Attorney General. In April of this year AG Schwalb provided
testimony on behalf of Office of the Attorney General to the DC Council hearing on the fiscal
Year 2024 Budget. See https://oag.dc.gov/release/ag-schwalb-testimony-office-attorneygeneral-
In his statement to the DC Council, AG Schwalb explained that OAG actions generate a return
far in excess of their cost. He said that OAG generated nearly $600 million for the District, a
roughly four-times return on investment based on the AG’s FY22 budget. With regard to
litigation initiated by the AG’s Office , including consumer matters, AG Schwalb said that the
AG’s Public Advocacy Division netted $12 million in penalties and restitution in consumer
protection, housing, workers’ rights, and civil rights cases brought in the public interest.
In addition, AG Schwalb pointed out that the benefits OAG provides for the District are not just
monetary in nature --enforcing and defending the laws the Council has enacted is of obvious
great public benefit.
AG Schwalb’s testimony comes at a time when the District is strapped for funds. The Mayor’s
Office has shown an inclination to limit the amount the AG can retain from case winnings and
plow back into new cases. AG Schwalb’s characterization of these issues in his testimony is
statesmanlike in tone: “For purposes of this year’s budget, we recognized the Council
faces difficult budget choices, and we thought it was important for OAG to partner with the
Mayor, to the greatest extent possible, to develop OAG’s budget. . . . [T]he Mayor asked OAG to
find $10 million in savings in our budget. . . . I am pleased to report that . . . we reached almost
full agreement. As a result, the enhancement requests we have of the Council are modest, both
in number and amount.”
But, there are two sides to the budget discussions AG Schwalb has carried out with the Mayor
in his statesmanlike manner. Funding needs can be large for affirmative consumer protection,
antitrust, and other cases of importance, including difficult cases focusing on local issues. The
need to finance difficult cases focusing on local issues is illustrated by the vigorously contested
gasoline price case currently being litigated in the DC Courts, and earlier gasoline price litigation
brought and later dropped by the DC AG’s Office.
As an outside observer I can’t say whether the budget compromises reached between DC AG
Schwalb and Mayor Bowser sufficiently address the funding needs of the Attorney General’s
Office. But I can point out that adequately investing in enforcement is of great public concern.
As AG Schwalb points out, what is at stake is whether the AG is being allowed to retain
sufficient funds to successfully pursue important cases in the public interest, including cases
primarily of local concern. Only the DC AG has the power and interest in pursuing the cases that
are primarily of local concern.
END Don Resnikoff ©
Disclosure note: I have represented gasoline retailers in legal actions against gasoline
distributors; gasoline distribution issues interested me when I was the lead antitrust attorney
with the DC AG's office some years ago.
The Titan submersible disaster as a lesson about government regulation
No one argues for unnecessary regulation, including unneeded regulation of recreational vehicles. But the implosion of the Titan submersible and the tragic deaths of its passengers suggests discussion about the wisdom of well considered government regulations in less exotic contexts, such as for vehicles more commonly used to transport people.
The Titan submersible was not subject to any safety regulations because it operated in international waters. Because submersibles like the Titan are not regulated, there is no governing body dictating what safety features the craft requires.
A Wikipedia article addressing safety concerns explains that Reporter David Pogue, who completed an undersea expedition in 2022 as part of a CBS News Sunday Morning feature, stated that all passengers who enter the Titan sign a waiver confirming their knowledge that it is an "experimental" vessel "that has not been approved or certified by any regulatory body, and could result in physical injury, disability, emotional trauma or death". Television producer Mike Reiss, who has also completed the expedition, noted that the waiver "mention[s] death three times on page one".
As non-experts we need to rely on the judgments of experts on safety issues. But certain omissions stick out.
It is unclear whether the vessel had a rescue beacon or other way to signal for help.
A modified Logitech F710 wireless game controller was used to steer the Titan.
Prior dives put stress on the hull of the vessel, perhaps weakening it, just as the materials of an airplane wing are stressed an experience weakening over time. But did anyone do stress tests in the way that is done for airplanes? See https://www.bbc.com/future/article/20140319-stress-tests-for-safer-planes#:~:text=To%20see%20how%20the%20wings%20and%20fuselage%20would,of%20its%20A350%20XWB%20Airbus%20in%20December%202013.
A 2019 article published in Smithsonian magazine referred to Titan entrepreneur Rush as a "daredevil inventor".[13] who argued against the need for government safety regulations. In the article, Rush is described as having said the U.S. Passenger Vessel Safety Act of 1993 (application of which the Tital avoided) "needlessly prioritized passenger safety over commercial innovation".[45] In a 2022 interview, Rush told CBS News, "At some point, safety just is pure waste. I mean, if you just want to be safe, don't get out of bed. Don't get in your car. Don't do anything." Speaking in a 2021 interview, Rush further observed, "I've broken some rules to make [the Titan]. I think I've broken them with logic and good engineering behind me. "[47]
But the recent incident involving the Titan submarine has raised concerns about the safety of such submersibles and whether they should be subject to stricter government regulation234. By extension, that discussion is relevant to the desirable reach of a broad array of regulations, particularly federal and local regulations relevant to safe use of vehicles used for transportation, such as boats, trains, buses, automobiles and two and three wheel recreational vehicles.
See also:
https://en.wikipedia.org/wiki/2023_Titan_submersible_incident
https://www.theatlantic.com/science/archive/2023/06/missing-titanic-submarine-safety-catastrophe/674491/
https://www.nytimes.com/2023/06/20/us/oceangate-titanic-missing-submersible.html
https://www.insider.com/titan-submarine-ceo-complained-about-obscenely-safe-regulations-2023-6
+++++++++++++++
PR Federal judge strikes down minor leaguers antitrust action against baseball
The case decision is at: https://law.justia.com/cases/federal/district-courts/puerto-rico/prdce/3:2022cv01017/168525/84/
The decision adopts the Magistrate Report found at https://ecf.prd.uscourts.gov/doc1/15919079180, also https://www.law360.com/articles/1691504/attachments/1 [paywalls]
A Law360 aticle by Elaine Briseño explains that A Puerto Rican federal judge has tossed a proposed class action filed by three minor league baseball players that alleged MLB suppressed their bargaining power and paid them below-market salaries, agreeing with a magistrate judge that the claims were outside the statute of limitations and not subject to antitrust laws.
The Wednesday order from U.S. District Judge María Antongiorgi-Jordán adopted the recommendations of U.S. Magistrate Judge Bruce J. McGiverin, who detailed in a May 31 filing why the claims should be dismissed.
The lawsuit was filed in January 2022 by Daniel Concepcion, Aldemar Burgos and Sidney Duprey-Conde, who played for the minor league teams associated with the Kansas City Royals, San Francisco Giants and San Diego Padres. The suit accused MLB of having a "cartel of 30 major league baseball teams" that "openly colluded and continue to collude, conspire, and agree to restrict and depress, at below market rates, the wages and compensation defendants pay each of their minor league players, including compensation payments made to some class members and plaintiffs in Puerto Rico."
Players in Puerto Rico are on average paid less than $15,000 a year to play in the minor leagues and work approximately 60 hours per week without overtime pay, according to the lawsuit.
The Law360 article explains:
At the heart of the case is whether professional baseball is subject to antitrust laws.
MLB teams are currently exempt from federal antitrust laws because, in 1922, the Supreme Court ruled that baseball was not interstate commerce in Federal Baseball Club of Baltimore v. National League , with Justice Oliver Wendell Holmes writing the majority opinion. The games, according to the decision, are public exhibitions, which are "purely state affairs" making them exempt from antitrust laws. The plaintiffs had argued at the time that the National League and American League were trying to monopolize baseball.
Judge McGiverin said the court was bound in the current case by the Supreme Court decision, even if some feel the long ago decision was "egregiously wrong." The players had also argued they were protected by the Curt Flood Act of 1998, which states that MLB players are protected under the federal antitrust laws. However, Judge McGiverin did not buy that argument either. He said minor league players are exempt from the act's protections and recommended that the antitrust claims be tossed.
+++++++++++++
Lawyers sanctioned for use of ChatGPT AI tool in brief that contained fake citations to non-existent court opinions
The New York federal court judge explained that there is nothing wrong with attorney use of artificial intelligence in brief writing, but that
attorneys are responsible for checking their work for accuracy. The judge also complained that the attorneys who improperly used the AI tool were not forthcoming about the errors in their brief, causing wasteful expenditures of time by opposing counsel and the court.
The brief that used the fake citations argued that plaintiff's claim concerning injuries suffered on an airplane were not time barred. In a separate decision the judge ruled against the plaintiff.
The 43 page ruling on sanctions for fake citations is here:
https://www.courthousenews.com/wp-content/uploads/2023/06/chatGPT-sanctions-ruling.pdf
The New York federal court judge explained that there is nothing wrong with attorney use of artificial intelligence in brief writing, but that
attorneys are responsible for checking their work for accuracy. The judge also complained that the attorneys who improperly used the AI tool were not forthcoming about the errors in their brief, causing wasteful expenditures of time by opposing counsel and the court.
The brief that used the fake citations argued that plaintiff's claim concerning injuries suffered on an airplane were not time barred. In a separate decision the judge ruled against the plaintiff.
The 43 page ruling on sanctions for fake citations is here:
https://www.courthousenews.com/wp-content/uploads/2023/06/chatGPT-sanctions-ruling.pdf
DC Bar Podcast: The Proposed D.C. Law Challenging use of Discriminatory AI Algorithms
https://podcasters.spotify.com/pod/show/dcbar/episodes/The-Proposed-D-C--Law-Challenging-use-of-Discriminatory-AI-Algorithms-e24krb9/a-a9t0rk5
Georgetown Law’s Laura Moy explains the proposed D.C. law holding companies accountable for using discriminatory AI algorithms in evaluating applicants for jobs, housing, or other similar opportunities.
The proposed legislation would prohibit companies from using artificial intelligence algorithms that produce biased or discriminatory results. Biased or discriminatory results cause harm by blocking people from opportunities such as jobs or housing.
Ms. Moy explains that companies that use algorithms in their decision making would be required by the proposed law to, among other things, audit their algorithms for discriminatory patterns, and disclose and explain when algorithms negatively affect an applicant’s opportunities. The proposed law would empower the AG’s office and individuals to bring suit for violations.
Ms. Moy argues that the proposed law is needed to protect applicants’ rights. She also addresses some arguments raised in opposition. Opponents argue that there is already law in existence making discrimination illegal, so that a supplemental anti-discrimination law focused on algorithms is not needed. Also, opponents argue that language in the proposed law is complex and unclear, causing uncertainty for companies using algorithms.
Laura M. Moy is Associate Professor of Law, Georgetown University Law Center, and Director of the Communications & Technology Law Clinic. The moderator for this podcast was Don Allen Resnikoff. Don Allen Resnikoff is with the DC Bar's Antitrust and Consumer Law Steering Committee. The views he expresses are his own, and not necessarily those of the Bar Community.
Listen and subscribe to Brief Encounters at https://anchor.fm/DCBar or wherever you access your podcasts.
Repeat Publication: The Case Against Montgomery County MD School Bus Camera Tickets
Editor's note: Several readers have written to support the concerns expressed in this article. For that reason I am repeating it. DR
Are Montgomery County, Maryland car drivers and drivers elsewhere sometimes being unfairly punished for failing to stop for school bus flashing stop light warnings? The answer seems to be “yes” when the drivers are fined even though they are not given enough warning time to be able to stop safely.
Suppose an automobile driver is driving 30 miles per hour on a two-way residential street when a school bus approaches from the opposite direction and stops and puts on flashing stop sign lights. Data suggests that the auto driver will need at least three seconds to come to a safe stop 20 feet away from the bus. But if the auto driver is less than 3 seconds away when the flashing lights start, that driver cannot safely stop.
Despite that practical physical limitation, if an enforcement camera on the bus shows the car passing the school bus 1 or 2 seconds after the flashing lights start, in Montgomery County and elsewhere the photo and video showing that can be used as evidence of a violation. Unfairly so, some would say.
Montgomery County’s Automated School Bus Enforcement Program, called “Cross Safe,” punishes owners of vehicles that pass stopped school buses with the red stop lights flashing, without any exception where there is insufficient time to stop safely. The punishment is a ticket issued through Montgomery County’s automated traffic enforcement program. The ticket charges a civil violation.
As a matter of policy, no one supports drivers endangering students by passing stopped school buses with red stop lights flashing, any more than anyone supports running yellow or red lights at traffic intersections. But punishing drivers who are not afforded a reasonable warning period to safely stop seems obviously unfair.
How long is a reasonable time to allow automobile drivers to stop safely?
Maryland State law follows guidelines of the Federal Highway Administration for traffic signals at road intersections. Here is what Maryland State law says:
Timing of yellow light signals. -- The [government] agency primarily responsible for traffic control at an intersection monitored by a traffic control signal monitoring system shall ensure that the length of time that a traffic control signal displays a yellow light before changing to a red signal indication is set in accordance with regulations adopted by the State Highway Administration consistent with standards or guidelines established by the Federal Highway Administration.
Maryland Code TRANSPORTATION § 21-202 - 1. Traffic control signal monitoring systems
The Maryland State Highway Administration guidelines explain that the function of the yellow change interval is to warn motorists of an impending change in the assignment of right-of-way – i.e., notify motorists that a red signal indication will be displayed next. The yellow change interval should be long enough so motorists can see the indication change from green to yellow and then have adequate time to determine whether to stop or enter the intersection. Specifically, it should be long enough to allow motorists farther away from the intersection to comfortably stop in advance of the intersection or allow motorists closer to the signal to enter the intersection.
The Maryland Guidelines explain that “[T]he duration of a yellow change interval shall be predetermined and it should have a duration of approximately 3 to 6 seconds; however, SHA does not use yellow change intervals lower than 3.5 seconds.” See https://transops.s3.amazonaws.com/uploaded_files/MDSHA%20Signal%20Timing%20Manual.pdf
The Maryland State Guidelines track The Federal Highway Administration's Manual on Uniform Traffic Control Devices. Applying a formula used by the Institute of Technical Engineers Technical Committee, anything falling below the yellow times shown here should be considered as a potential unfairly short yellow light.
25 MPH -- 3.0 Seconds
30 MPH -- 3.5 Seconds
35 MPH -- 4.0 Seconds
40 MPH -- 4.5 Seconds
45 MPH -- 5.0 Seconds
Maryland State law is clear on the responsibility of local government agencies to require fair use of traffic stop light signals at roadway intersections. While school buses are not roadway intersections, the logic of the statute’s scheme of warning lights that applies to traffic intersections should carry over to school bus stop lights.
If anything, more warning time is appropriate for school bus stop lights, since buses move from place to place, so each new location for flashing bus stop signs is more of a surprise to motorists than for signs at an intersection.
The bottom line is that the logic of the Maryland State law on stop lights that applies to road intersections should apply to school buses with stop lights and enforcement cameras. Local government authorities should insure that motorists are not punished for failing to stop for a school bus stop light where the motorist lacked the seconds of time needed for a safe stop. If the application of that Maryland State stop light law to school buses is unclear, it should be made clear.
***
An additional bothersome point concerns the motivation for bus stop signs with unfairly short warning periods. The answer may be that most of the revenue from the fines collected from motorists goes to a private company; so the motivation might be greed. The private company has a perverse incentive to collect unjust fines.
The private company that takes most of the revenue derived from bus stop light violations in Montgomery County (typically a $250 fine) has a checkered history.
By Don Allen Resnikoff
Editor's note: Several readers have written to support the concerns expressed in this article. For that reason I am repeating it. DR
Are Montgomery County, Maryland car drivers and drivers elsewhere sometimes being unfairly punished for failing to stop for school bus flashing stop light warnings? The answer seems to be “yes” when the drivers are fined even though they are not given enough warning time to be able to stop safely.
Suppose an automobile driver is driving 30 miles per hour on a two-way residential street when a school bus approaches from the opposite direction and stops and puts on flashing stop sign lights. Data suggests that the auto driver will need at least three seconds to come to a safe stop 20 feet away from the bus. But if the auto driver is less than 3 seconds away when the flashing lights start, that driver cannot safely stop.
Despite that practical physical limitation, if an enforcement camera on the bus shows the car passing the school bus 1 or 2 seconds after the flashing lights start, in Montgomery County and elsewhere the photo and video showing that can be used as evidence of a violation. Unfairly so, some would say.
Montgomery County’s Automated School Bus Enforcement Program, called “Cross Safe,” punishes owners of vehicles that pass stopped school buses with the red stop lights flashing, without any exception where there is insufficient time to stop safely. The punishment is a ticket issued through Montgomery County’s automated traffic enforcement program. The ticket charges a civil violation.
As a matter of policy, no one supports drivers endangering students by passing stopped school buses with red stop lights flashing, any more than anyone supports running yellow or red lights at traffic intersections. But punishing drivers who are not afforded a reasonable warning period to safely stop seems obviously unfair.
How long is a reasonable time to allow automobile drivers to stop safely?
Maryland State law follows guidelines of the Federal Highway Administration for traffic signals at road intersections. Here is what Maryland State law says:
Timing of yellow light signals. -- The [government] agency primarily responsible for traffic control at an intersection monitored by a traffic control signal monitoring system shall ensure that the length of time that a traffic control signal displays a yellow light before changing to a red signal indication is set in accordance with regulations adopted by the State Highway Administration consistent with standards or guidelines established by the Federal Highway Administration.
Maryland Code TRANSPORTATION § 21-202 - 1. Traffic control signal monitoring systems
The Maryland State Highway Administration guidelines explain that the function of the yellow change interval is to warn motorists of an impending change in the assignment of right-of-way – i.e., notify motorists that a red signal indication will be displayed next. The yellow change interval should be long enough so motorists can see the indication change from green to yellow and then have adequate time to determine whether to stop or enter the intersection. Specifically, it should be long enough to allow motorists farther away from the intersection to comfortably stop in advance of the intersection or allow motorists closer to the signal to enter the intersection.
The Maryland Guidelines explain that “[T]he duration of a yellow change interval shall be predetermined and it should have a duration of approximately 3 to 6 seconds; however, SHA does not use yellow change intervals lower than 3.5 seconds.” See https://transops.s3.amazonaws.com/uploaded_files/MDSHA%20Signal%20Timing%20Manual.pdf
The Maryland State Guidelines track The Federal Highway Administration's Manual on Uniform Traffic Control Devices. Applying a formula used by the Institute of Technical Engineers Technical Committee, anything falling below the yellow times shown here should be considered as a potential unfairly short yellow light.
25 MPH -- 3.0 Seconds
30 MPH -- 3.5 Seconds
35 MPH -- 4.0 Seconds
40 MPH -- 4.5 Seconds
45 MPH -- 5.0 Seconds
Maryland State law is clear on the responsibility of local government agencies to require fair use of traffic stop light signals at roadway intersections. While school buses are not roadway intersections, the logic of the statute’s scheme of warning lights that applies to traffic intersections should carry over to school bus stop lights.
If anything, more warning time is appropriate for school bus stop lights, since buses move from place to place, so each new location for flashing bus stop signs is more of a surprise to motorists than for signs at an intersection.
The bottom line is that the logic of the Maryland State law on stop lights that applies to road intersections should apply to school buses with stop lights and enforcement cameras. Local government authorities should insure that motorists are not punished for failing to stop for a school bus stop light where the motorist lacked the seconds of time needed for a safe stop. If the application of that Maryland State stop light law to school buses is unclear, it should be made clear.
***
An additional bothersome point concerns the motivation for bus stop signs with unfairly short warning periods. The answer may be that most of the revenue from the fines collected from motorists goes to a private company; so the motivation might be greed. The private company has a perverse incentive to collect unjust fines.
The private company that takes most of the revenue derived from bus stop light violations in Montgomery County (typically a $250 fine) has a checkered history.
By Don Allen Resnikoff
Podcast: Hazardous Rail Shipments in Densely Populated D.C.
https://podcasters.spotify.com/pod/show/dcbar/episodes/Hazardous-Rail-Shipments-in-Densely-Populated-D-C-e23gcmh
This podcast describes past local government efforts to keep hazardous freight rail traffic out of D.C. and illuminates what DC government is doing now to protect D.C. citizens, using current laws and regulations.
In 2005, the D.C. Council was blocked by the D.C. Court of Appeals from enforcing legislation that would have stopped rail transport of hazardous freight into DC. In 2007 a government report suggested routing rail freight traffic away from densely populated D.C., but that suggestion was not followed.
In this podcast, Michael Somersall, Associate Director of the Rail Safety and Emergency Response Division of D.C.’s Environmental Services Administration describes how this Division enforces current state level and federal rail safety rules and regulations with the goal of protecting District residents and railroad employees from unsafe practices on both freight and passenger trains. Ann Wilcox and Don Resnikoff provided introductory information. Ann is co-chair of the D.C. Bar D.C. Affairs Community. Don Resnikoff, who moderated the podcast, is a member of the D.C. Bar Antitrust and Consumer Law Community. This episode is brought to you in part by our sponsor, LawPay.
Listen and subscribe to Brief Encounters at https://anchor.fm/DCBar or wherever you access your podcasts.
Are you being misled by an add-on charge on your restaurant bill?
DC AG Brian Schwalb’s alert on DC restaurants' use of an add-on percentage "service charge" or similar fee
It may be that no part or only a small part of the add on charge actually goes to the servers
By Don Allen Resnikoff
Recently my wife and I joined a small group for a 5 PM "Happy Hour" at a pleasant DC Italian theme restaurant that has a very comfortable outdoor patio, pleasant food and drinks, and modest prices. When the check came it included a 20% "service charge," plus a line for "Additional tip." The phrase "additional tip" suggested that the 20% service charge was already a tip, but we felt we couldn't be sure, even though two of us in the group are lawyers. So we asked our waiter, who said he was confused about it. We made the guess that "20% service charge" was a tip. So we did not add anything to the "additional tip" line.
But my current guess about the add-on charge is different. It is quite possible that none of the 20% add-on charge goes to servers, or that only some unknown smaller percentage is shared with servers. I suspect that other than the unknown percentage shared with servers, the 20% may in effect simply be a markup of menu prices, presented in a confusing way.
The DC Attorney General issued a statement on restaurant add-on charges in March of this year that includes the following:
Consumer Alert: DC Restaurants Are Barred from Charging Deceptive Fees
March 7, 2023
You have dinner at a local DC restaurant with your family. You plan to pay the price listed on the menu, sales tax, and a tip. But when your bill comes at the end of the meal, there’s a vague 20% fee added on that you didn’t expect. How do you know if the fee is going to service workers? Are restaurants allowed to charge fees without telling you?
Many District consumers have raised questions about fees and surcharges that restaurants charge to diners, including whether those fees are allowed and what they can be used for. This consumer alert is intended to provide the public with information about what the law allows and prohibits. These questions and answers are for illustrative purposes and should not be considered as legal opinions.
Are there rules against deceptive restaurant fees?
Yes. The District’s Consumer Protection Procedures Act grants District consumers the right to complete, accurate, and timely information whenever they purchase goods or services—including when they place orders at restaurants. That means that while restaurants are allowed to charge fees, they are not allowed to hide them, obscure them in fine print, or only disclose them after you have already ordered. And restaurants must also inform consumers why the fees are being charged.
What types of fees are legal?
To comply with these laws, restaurants should:
- Clearly and prominently disclose fees at the beginning of the ordering process. This must include the type and amount of fee. For example: Servers could tell you about a fee verbally, or it could be disclosed in bold print on the menu.
- Accurately describe the reason for the fee, either by naming the fee clearly (like: “worker health insurance fee”) or explaining how it is used.
- Use any fees exclusively for the purposes disclosed. For example, “service fees” must go fully and directly to service workers, unless other uses are prominently disclosed.
Restaurants may violate the District’s consumer laws if they:
- Bury fee information in fine print on a menu.
- Fail to disclose the amount or percentage of a fee until the bill is given to the diner at the end of a meal.
- Use fees collected from diners for purposes contrary to the purposes disclosed.
- Use ambiguous or misleading language that fails to fully convey to a diner how a fee will be used (for example, charging an ambiguous “restaurant recovery” fee without explaining what the fee will assist in recovering).
Are there consequences for violating the law?
Yes. OAG is the primary enforcer of the District’s consumer protection laws. If our office finds that a business has violated the law by failing to adequately disclose or describe fees charged to diners, we could seek refunds for consumers, penalties, and changes to the restaurant’s practices.
How can I alert OAG about potential violations?
You can submit a consumer complaint by:
- Filling out our online complaint form
- Calling (202) 442-9828; or
- Emailing [email protected]
The DC Attorney General's consumer advisory is at https://oag.dc.gov/release/consumer-alert-dc-restaurants-are-barred-charging
DC Attorney General Schwalb doesn’t express an opinion about whether any particular add-on charge by any particular restaurant in DC is a violation of DC law, and neither do I.
I will say that at several restaurants I’ve patronized I’ve had difficulty understanding how the add-on fee I was charged will be applied, that is, whether servers will get some particular percentage of the add-on. That is something that AG Schwalb says should be understandable. I have taken no action based on my difficulty in understanding, other than to do research on the topic.
Someone who has done considerably more research is Sarah Stella, who created an spreadsheet showing restaurant name, amount of service fee, and the stated reason. See https://docs.google.com/spreadsheets/d/1UrAuD1TcfX546IEJL34I37ACVWljSi4lhIRA0w15-_Y/edit#gid=1486084773
A few other thoughts. Why is it that restaurants that use add-on fees don’t simply raise all the menu prices instead and skip the add-on? Perhaps to create confusion operating in the restaurant's favor?
The add-on fee strategy reminds me of the experience my wife and I had going to a charming small restaurant in Staunton, Virginia. The prices on the bill did not match the prices on the menu. So, I pointed out the discrepancy to the waitress. She pointed to the sign posted by the owner saying that "the prices on the menus are not the actual prices." I think that the odd posting might be similar to our recent 20% add-on experience, but more forthcoming -- and the Staunton menu price add-on was much less than 20%.
Hopefully, DC restaurants will take a hint from AG Brian Schwalb’s consumer alert and provide patrons with complete, accurate, and timely information about add-on charges. If they don’t it may be that DC Attorney General Schwalb will be hearing from DC restaurant consumers who feel that their experiences with DC restaurant add-on charges do not meet the standards of legality described by the AG.
By Don Allen Resnikoff
Follow-up blog on regulating use of AI algorithms and discrimination
by Don Allen Resnikoff
To recap, last year a bill was introduced to the DC Council with the goal of avoiding discrimination facilitated by artificial intelligence, particularly algorithms used for job applications and other similar situations.
The bill is at https://lims.dccouncil.gov/Legislation/B25-0114 The bill did not become law, but reports are that the bill will be reintroduced this year.
The proposed DC bill concerning algorithms overlaps and augments the generally applicable DC antidiscrimination law. The bill adds requirements on use of algorithms to evaluate job and certain other candidates, and provides for enforcement through government and private litigation. The aim of the legislation is to stop discrimination using algorithms by applying prophylactic regulations.
A requirement of the proposed DC law is similar to, but more elaborate than an existing New York City law: those who use algorithms must share information about how they apply the algorithms. The proposed DC bill requires that parties that uses algorithms provide a “concise” notice to explain the use.
The Biden Administration has issued a “bill of rights” that suggests principles for regulating algorithms used for job applicants and in other similar situations. See at https://www.whitehouse.gov/ostp/ai-bill-of-rights/
The Administration’s Bill of Rights for AI, like the New York City legislation, suggests an approach for public interest organizations that wish to support DC legislation that would regulate use of algorithms in employment evaluation and other similar circumstances, but who wish to avoid commenting on the details of complex technology.
A non-technical approach would be for the public interest organization to state support for the legislative goals of public disclosure of AI algorithms used for sensitive purposes, while leaving discussion of technology for others. The relevant principles are those stated in the Administration’s Bill of Rights (although the phrasing used by the Administration writers could be made simpler and clearer).
An argument for such an approach is that the bottom line concern about illegal discrimination is not about use of technology. It is about avoiding a discriminatory outcome. The means of achieving a discriminatory outcome is point of secondary importance. ( I recognize that the point emphasizing discriminatory outcomes over technology also supports an argument that special anti-discrimination legislation targeting AI and algorithms is not needed.)
Posting by Don Resnikoff
"Bad blood" Elizabeth Holmes and prison
Theranos founder Elizabeth Holmes will likely report to prison soon, with timing the subject of ongoing court proceedings.
Holmes was sentenced to over 11 years in prison for defrauding investors in her blood testing start-up. The liklihood that she will be going to prison soon has put her case back into national news headlines. A federal judge is considering timing for the start of her prison term, in light of Holmes' pursuit of an appeal.
It is timely to revisit John Carreyrou’s book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf). In that book Wall Street Journal reporter John Carreyrou reviewed his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
Theranos founder Elizabeth Holmes will likely report to prison soon, with timing the subject of ongoing court proceedings.
Holmes was sentenced to over 11 years in prison for defrauding investors in her blood testing start-up. The liklihood that she will be going to prison soon has put her case back into national news headlines. A federal judge is considering timing for the start of her prison term, in light of Holmes' pursuit of an appeal.
It is timely to revisit John Carreyrou’s book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf). In that book Wall Street Journal reporter John Carreyrou reviewed his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
DC’s proposed bill on discrimination and AI algorithms
By Don Allen Resnikoff
Last year a bill was introduced to the DC Council with the goal of avoiding discrimination facilitated by artificial intelligence, particularly algorithms used in candidate selection determinations of “eligibility for, opportunity to access, or terms of access to important life opportunities.” The proposed bill would apply to job applicants and other similar situations.
The bill is at https://lims.dccouncil.gov/Legislation/B25-0114 The bill did not become law, but reports are that the bill will be reintroduced this year.
New York City has already adopted a similar automated employment decision tool (AEDT) law that is effective as of April 15 of this year. The law can be found at https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=4344524&GUID=B051915D-A9AC-451E-81F8-6596032FA3F9&Options=ID%7CText%7C&Search=
The gist of the New York City law is that employers will be prohibited from using an artificial intelligence (AI) tool to screen job candidates or evaluate employees unless the employer’s AI technology has been audited for bias no more than one year before its use, and a summary of the audit's results is made publicly available on the employer's website.
The New York City law aims for simplicity. Commenters have noted that the goal of simplicity may be elusive, for reasons that include uncertainty about what constitutes a sufficient audit of an AI-type tool, as well as uncertainty about what constitutes a sufficient public presentation of audit results. At the root of the concern is the perception that artificial intelligence and algorithms are complex and not easily deciphered by people without relevant expertise.
On the question of complexity of algorithms, it is important to note that the level of complexity associated with discrimination in candidate selection is relatively low. The questions addressed by the New York City law are relatively narrow: whether automated tools collect or analyze information about an applicant in a way that would be illegal if carried out by a human. A useful discussion of the relevant technology is at All the Ways Hiring Algorithms Can Introduce Bias (hbr.org) https://hbr.org/2019/05/all-the-ways-hiring-algorithms-can-introduce-bias
The New York City law is intended to aid enforcement of the New York State Human Rights Law with regard to artificial intelligence applications which may be a tool for carrying out illegal discrimination. The New York State Human Rights Law prohibits discrimination on the basis of "age, race, creed, color, national origin, sexual orientation, military status, sex, marital status or disability" in employment, housing, education, credit, and access to public accommodations. It is enforced by the New York State Division of Human Rights. Read Full NYS Human Rights Law https://dhr.ny.gov/lawThere is a rationale for the link between the anti-discrimination goals of the New York State Human Rights Law and the anti-discrimination goals of the more recent New York City law regulating use of automated employment decision technology. The rationale for the recent New York City law is that regulations specially tailored to AI will make use of AI and computerized programs more transparent and fair.
The DC Council bill is longer than the New York City legislation. The DC bill has anti-discrimination goals similar to the New York City law, but with more detailed procedures for disclosing use of artificial intelligence in candidate evaluation. The proposed DC law applies not only to employment but to other “important life opportunities.”
The stated goal of the proposed DC bill concerning algorithms overlaps the goals of DC’s existing generally applicable law prohibiting discrimination. Below is language on goals from the proposed DC bill:
(a) In general. (1) A covered entity shall not make an algorithmic eligibility determination or an algorithmic information availability determination on the basis of an individual’s or class of individuals’ actual or perceived race, color, religion, national origin, sex, gender identity or expression, sexual orientation, familial status, source of income, or disability in a manner that segregates, discriminates against, or otherwise makes important life opportunities unavailable to an individual or class of individuals. (2) Any practice that has the effect or consequence of violating paragraph (1) of this subsection shall be deemed to be an unlawful discriminatory practice.
The generally applicable DC Human Rights Act of 1977, DC Code, Chapter 2, Title 14 (Unit A. Human Rights Law. | D.C. Law Library (dccouncil.gov) https://code.dccouncil.gov/us/dc/council/code/titles/2/chapters/14/units/A) has similar language. The DCHRA ensures that every individual in D.C. has an equal opportunity to enjoy “all aspects of life,” including housing, public accommodation, education, equal employment, job training, and job advancement.
Under the DCHRA, discrimination is prohibited based on any of 15 protected statuses, even if the discrimination is only part of the reason for a decision on a candidate.
The proposed new DC bill addressing discrimination involving algorithms augments the generally applicable DC antidiscrimination law. The bill adds requirements on those who use algorithms to evaluate candidates, and provides for government and private litigation against those who violate those requirements. The aim, similar to the NYC law, is to reinforce the goal of stopping discrimination by applying specialized regulations making use of AI and computerized programs more transparent and fair.
A basic requirement of the proposed DC law is similar to but more elaborate than the New York law: those who use algorithms must share information about how they use the algorithms. The proposed DC bill requires that the covered party that uses algorithms provide a “concise” notice explaining that use.
Conclusion:
The proposed new DC bill addressing discrimination involving algorithms supplements the generally applicable DC antidiscrimination law by adding specially tailored requirements on those who use algorithms to evaluate candidates. The goals of the existing DC human rights laws and the proposed new law are the same: preventing discrimination against job applicants and other kinds of candidates. The rationale for the proposed new law is that specially tailored regulations will make use of AI and computerized programs more transparent and fair.
Some may oppose the proposed legislation on the grounds that it is not needed to augment existing DC anti-discrimination law, or that the proposed law is too complex. My suggestion to public interest groups that oppose discrimination and support the proposed legislation is that they should comment in support of the proposed bill and make suggestions to improve it. Comments in support may require a walk into the weeds of computer technology, but that walk may be required for public interest groups that want to play a useful role in the discussion.
By Don Allen Resnikoff © who takes full responsibility for the content.
By Don Allen Resnikoff
Last year a bill was introduced to the DC Council with the goal of avoiding discrimination facilitated by artificial intelligence, particularly algorithms used in candidate selection determinations of “eligibility for, opportunity to access, or terms of access to important life opportunities.” The proposed bill would apply to job applicants and other similar situations.
The bill is at https://lims.dccouncil.gov/Legislation/B25-0114 The bill did not become law, but reports are that the bill will be reintroduced this year.
New York City has already adopted a similar automated employment decision tool (AEDT) law that is effective as of April 15 of this year. The law can be found at https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=4344524&GUID=B051915D-A9AC-451E-81F8-6596032FA3F9&Options=ID%7CText%7C&Search=
The gist of the New York City law is that employers will be prohibited from using an artificial intelligence (AI) tool to screen job candidates or evaluate employees unless the employer’s AI technology has been audited for bias no more than one year before its use, and a summary of the audit's results is made publicly available on the employer's website.
The New York City law aims for simplicity. Commenters have noted that the goal of simplicity may be elusive, for reasons that include uncertainty about what constitutes a sufficient audit of an AI-type tool, as well as uncertainty about what constitutes a sufficient public presentation of audit results. At the root of the concern is the perception that artificial intelligence and algorithms are complex and not easily deciphered by people without relevant expertise.
On the question of complexity of algorithms, it is important to note that the level of complexity associated with discrimination in candidate selection is relatively low. The questions addressed by the New York City law are relatively narrow: whether automated tools collect or analyze information about an applicant in a way that would be illegal if carried out by a human. A useful discussion of the relevant technology is at All the Ways Hiring Algorithms Can Introduce Bias (hbr.org) https://hbr.org/2019/05/all-the-ways-hiring-algorithms-can-introduce-bias
The New York City law is intended to aid enforcement of the New York State Human Rights Law with regard to artificial intelligence applications which may be a tool for carrying out illegal discrimination. The New York State Human Rights Law prohibits discrimination on the basis of "age, race, creed, color, national origin, sexual orientation, military status, sex, marital status or disability" in employment, housing, education, credit, and access to public accommodations. It is enforced by the New York State Division of Human Rights. Read Full NYS Human Rights Law https://dhr.ny.gov/lawThere is a rationale for the link between the anti-discrimination goals of the New York State Human Rights Law and the anti-discrimination goals of the more recent New York City law regulating use of automated employment decision technology. The rationale for the recent New York City law is that regulations specially tailored to AI will make use of AI and computerized programs more transparent and fair.
The DC Council bill is longer than the New York City legislation. The DC bill has anti-discrimination goals similar to the New York City law, but with more detailed procedures for disclosing use of artificial intelligence in candidate evaluation. The proposed DC law applies not only to employment but to other “important life opportunities.”
The stated goal of the proposed DC bill concerning algorithms overlaps the goals of DC’s existing generally applicable law prohibiting discrimination. Below is language on goals from the proposed DC bill:
(a) In general. (1) A covered entity shall not make an algorithmic eligibility determination or an algorithmic information availability determination on the basis of an individual’s or class of individuals’ actual or perceived race, color, religion, national origin, sex, gender identity or expression, sexual orientation, familial status, source of income, or disability in a manner that segregates, discriminates against, or otherwise makes important life opportunities unavailable to an individual or class of individuals. (2) Any practice that has the effect or consequence of violating paragraph (1) of this subsection shall be deemed to be an unlawful discriminatory practice.
The generally applicable DC Human Rights Act of 1977, DC Code, Chapter 2, Title 14 (Unit A. Human Rights Law. | D.C. Law Library (dccouncil.gov) https://code.dccouncil.gov/us/dc/council/code/titles/2/chapters/14/units/A) has similar language. The DCHRA ensures that every individual in D.C. has an equal opportunity to enjoy “all aspects of life,” including housing, public accommodation, education, equal employment, job training, and job advancement.
Under the DCHRA, discrimination is prohibited based on any of 15 protected statuses, even if the discrimination is only part of the reason for a decision on a candidate.
The proposed new DC bill addressing discrimination involving algorithms augments the generally applicable DC antidiscrimination law. The bill adds requirements on those who use algorithms to evaluate candidates, and provides for government and private litigation against those who violate those requirements. The aim, similar to the NYC law, is to reinforce the goal of stopping discrimination by applying specialized regulations making use of AI and computerized programs more transparent and fair.
A basic requirement of the proposed DC law is similar to but more elaborate than the New York law: those who use algorithms must share information about how they use the algorithms. The proposed DC bill requires that the covered party that uses algorithms provide a “concise” notice explaining that use.
Conclusion:
The proposed new DC bill addressing discrimination involving algorithms supplements the generally applicable DC antidiscrimination law by adding specially tailored requirements on those who use algorithms to evaluate candidates. The goals of the existing DC human rights laws and the proposed new law are the same: preventing discrimination against job applicants and other kinds of candidates. The rationale for the proposed new law is that specially tailored regulations will make use of AI and computerized programs more transparent and fair.
Some may oppose the proposed legislation on the grounds that it is not needed to augment existing DC anti-discrimination law, or that the proposed law is too complex. My suggestion to public interest groups that oppose discrimination and support the proposed legislation is that they should comment in support of the proposed bill and make suggestions to improve it. Comments in support may require a walk into the weeds of computer technology, but that walk may be required for public interest groups that want to play a useful role in the discussion.
By Don Allen Resnikoff © who takes full responsibility for the content.
AG Schwalb Secures Over $625,000 from Washington Commanders for Failing to Return District's Fans' Ticket Deposits
April 10, 2023Settlement Requires Team to Follow Strict Outreach Protocols to Ensure Money is Returned to Fans
WASHINGTON, DC – Attorney General Brian L. Schwalb today announced that Pro-Football Inc., the corporation which owns the Washington Commanders, will return over $200,000 to impacted residents and pay $425,000 to the District to resolve allegations that the team systematically failed to return ticket holders’ deposits and intentionally created barriers for fans to get refunds in violation of District law.
“Rather than being transparent and upfront in their ticket sale practices, the Commanders unlawfully took advantage of their fan base, holding on to security deposits instead of returning them,” said AG Schwalb. “Under this settlement agreement, our office will maintain strict oversight over the Commanders to ensure all necessary steps are taken to reimburse fans for the refunds they are entitled to. Our office takes seriously the obligation to enforce DC consumer protection laws by holding accountable anyone that tries to exploit District consumers.”
For full press release: AG Schwalb Secures Over $625,000 from Washington Commanders for Failing to Return District's Fans' Ticket Deposits (dc.gov) https://oag.dc.gov/release/ag-schwalb-secures-over-625000-washington
April 10, 2023Settlement Requires Team to Follow Strict Outreach Protocols to Ensure Money is Returned to Fans
WASHINGTON, DC – Attorney General Brian L. Schwalb today announced that Pro-Football Inc., the corporation which owns the Washington Commanders, will return over $200,000 to impacted residents and pay $425,000 to the District to resolve allegations that the team systematically failed to return ticket holders’ deposits and intentionally created barriers for fans to get refunds in violation of District law.
“Rather than being transparent and upfront in their ticket sale practices, the Commanders unlawfully took advantage of their fan base, holding on to security deposits instead of returning them,” said AG Schwalb. “Under this settlement agreement, our office will maintain strict oversight over the Commanders to ensure all necessary steps are taken to reimburse fans for the refunds they are entitled to. Our office takes seriously the obligation to enforce DC consumer protection laws by holding accountable anyone that tries to exploit District consumers.”
For full press release: AG Schwalb Secures Over $625,000 from Washington Commanders for Failing to Return District's Fans' Ticket Deposits (dc.gov) https://oag.dc.gov/release/ag-schwalb-secures-over-625000-washington
American Antitrust Institute President Diana Moss is joined by Proskauer Rose antitrust partner John Ingrassia for a discussion of antitrust policy and enforcement under the Biden administration.
In this session, learn how the agencies are approaching mergers, monopolization, non-compete agreements, and the power of big tech.
LISTEN NOW https://click.email.dcbar.org/?qs=4edcdf0698b9c4b72ab5ebe6fd55a9e47ab7fb235bf7210b2fa8abac7108882455d2442664b48f13779a289364192bb033453d3fd0d2c65a
Listen and subscribe to Brief Encounters at anchor.fm/DCBar or wherever you access your podcasts.
In this session, learn how the agencies are approaching mergers, monopolization, non-compete agreements, and the power of big tech.
LISTEN NOW https://click.email.dcbar.org/?qs=4edcdf0698b9c4b72ab5ebe6fd55a9e47ab7fb235bf7210b2fa8abac7108882455d2442664b48f13779a289364192bb033453d3fd0d2c65a
Listen and subscribe to Brief Encounters at anchor.fm/DCBar or wherever you access your podcasts.
Book review by Don Allen Resnikoff-- Empire of Pain, by Patrick Radden Keefe -- from DC Bar's Washington Lawyer, March-April 2023
The Major Questions Doctrine: Judicial Activism That Undermines Democracy
54 Loyola Chicago L. J. (Issue 3, 2023).
19 Pages Posted: 6 Oct 2022 Last revised: 18 Jan 2023
Warren S. Grimes
Southwestern Law School
Date Written: September 12, 2022
AbstractThe Major Questions Doctrine, formally unveiled by the Supreme Court in West Virginia v. EPA, is said to be based on separation of powers doctrine, preventing agencies from asserting powers beyond what Congress could reasonably be understood to have granted. Masquerading as a doctrine that protects congressional authority, the doctrine does the opposite.
It targets open-ended grants of authority to an agency, a necessary tool in the legislative process. It usurps authority consciously granted to an expert agency that is politically accountable to the President and Congress, and places decision-making in the hands of unelected judges that lack expertise and are less accountable to the democratic polity. It is unpredictable in application and unnecessary to preserve traditional judicial review of agency actions. It ignores the realities of how democratic legislatures function and invites judicial activism whenever someone disagrees with an agency interpretation of open-ended authority. Perversely, it subjects politically accountable agency interpretations of general authority to stricter scrutiny than would conventionally apply when Congress implicitly grants general authority to courts.
Keywords: Supreme Court, Administrative Law, Canons of Interpretation, agency authority
JEL Classification: K20, K23, K32
Suggested Citation:
Grimes, Warren S., The Major Questions Doctrine: Judicial Activism That Undermines Democracy (September 12, 2022). 54 Loyola Chicago L. J. (Issue 3, 2023)., Available at SSRN: https://ssrn.com/abstract=4206108 or http://dx.doi.org/10.2139/ssrn.4206108
54 Loyola Chicago L. J. (Issue 3, 2023).
19 Pages Posted: 6 Oct 2022 Last revised: 18 Jan 2023
Warren S. Grimes
Southwestern Law School
Date Written: September 12, 2022
AbstractThe Major Questions Doctrine, formally unveiled by the Supreme Court in West Virginia v. EPA, is said to be based on separation of powers doctrine, preventing agencies from asserting powers beyond what Congress could reasonably be understood to have granted. Masquerading as a doctrine that protects congressional authority, the doctrine does the opposite.
It targets open-ended grants of authority to an agency, a necessary tool in the legislative process. It usurps authority consciously granted to an expert agency that is politically accountable to the President and Congress, and places decision-making in the hands of unelected judges that lack expertise and are less accountable to the democratic polity. It is unpredictable in application and unnecessary to preserve traditional judicial review of agency actions. It ignores the realities of how democratic legislatures function and invites judicial activism whenever someone disagrees with an agency interpretation of open-ended authority. Perversely, it subjects politically accountable agency interpretations of general authority to stricter scrutiny than would conventionally apply when Congress implicitly grants general authority to courts.
Keywords: Supreme Court, Administrative Law, Canons of Interpretation, agency authority
JEL Classification: K20, K23, K32
Suggested Citation:
Grimes, Warren S., The Major Questions Doctrine: Judicial Activism That Undermines Democracy (September 12, 2022). 54 Loyola Chicago L. J. (Issue 3, 2023)., Available at SSRN: https://ssrn.com/abstract=4206108 or http://dx.doi.org/10.2139/ssrn.4206108
NCAA Faces New Antitrust Suit Over Volunteer Coach Wage-Fixing
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March 23, 2023The National Collegiate Athletic Association is the subject of an antitrust legal action which contends that they, along with member schools, participated in a collusive arrangement to avoid compensating volunteer coaches, reported Bloomberg.
The NCAA’s bylaw restricts Division 1 schools to a limited number of paid coaches. Still, it allows the hiring of other designated “volunteer coaches” who aren’t paid, according to a proposed class action filed Tuesday in the US District Court for the Eastern District of California.
“These agreements among Defendant and its member schools, in antitrust terms, make the member schools a buyer-side cartel,” said the three plaintiffs, who coach track and field and wrestling.
The research indicated that volunteer coaches often give their time in excess of 40 hours a week to the job.
“In reality, that means that skilled coaches who are desired by NCAA schools, but not employed as regular (paid) coaches, must provide very valuable services to the schools for free, or not be employed in their profession of choice,” they said.
The plaintiffs are seeking certification of a class of more than 1,000 people who will have worked as volunteer coaches between March 17, 2019 to June 30, 2023.
Credit:
SOURCENews Bloomberg Law
-
March 23, 2023The National Collegiate Athletic Association is the subject of an antitrust legal action which contends that they, along with member schools, participated in a collusive arrangement to avoid compensating volunteer coaches, reported Bloomberg.
The NCAA’s bylaw restricts Division 1 schools to a limited number of paid coaches. Still, it allows the hiring of other designated “volunteer coaches” who aren’t paid, according to a proposed class action filed Tuesday in the US District Court for the Eastern District of California.
“These agreements among Defendant and its member schools, in antitrust terms, make the member schools a buyer-side cartel,” said the three plaintiffs, who coach track and field and wrestling.
The research indicated that volunteer coaches often give their time in excess of 40 hours a week to the job.
“In reality, that means that skilled coaches who are desired by NCAA schools, but not employed as regular (paid) coaches, must provide very valuable services to the schools for free, or not be employed in their profession of choice,” they said.
The plaintiffs are seeking certification of a class of more than 1,000 people who will have worked as volunteer coaches between March 17, 2019 to June 30, 2023.
Credit:
SOURCENews Bloomberg Law
Electric motorized bicycles on pedestrian/bike shared paths? They need to be controlled.
By Don Allen Resnikoff
I occasionally walk or ride a bike on the Capital Crescent Trail that runs from Maryland to Georgetown in DC. I sometimes do the same on the part of Beach Drive that is blocked off north of Piece Mill in DC to accommodate pedestrians and bikers.
Sometimes I’ll see electrified bikes of the kind that look a lot like standard mountain bikes and go at speeds typically less than about 15 miles per hour. But more and more I see heavy looking electric powered machines with fat tires that may permit pedaling, but are traveling at speeds of about 30 MPH. They are the equivalent of small electric powered motorcycles. They are a menace.
DC, Maryland, and Virginia all have laws that regulate the use of electric bikes on pedestrian trails. Here is a chart from 2019 that gives some indication of what bikes are allowed and where. https://www.capitaltrailscoalition.org/wp-content/uploads/2019/11/Trails-Symposium-E-bike-Cheat-Sheet.pdf
A Washington Post article from some years ago found advocates for electric bikes on pedestrian trails: Some describe a desire to accommodate an aging and out-of-shape population that still wants to experience bike trails. “I don’t think having additional people trying to use alternative means of transportation is necessarily a bad thing,” said Alex Logemann, a policy analyst at the industry-funded PeopleForBikes advocacy group.
The same article explained that The National Park Service does not allow motorized bikes on its trails, including the D.C. section of the Capital Crescent Trail and the Mount Vernon Trail in Alexandria, but there isn’t much enforcement. See https://www.washingtonpost.com/opinions/lets-keep-motors-off-our-bike-trails/2017/07/28/94824620-67e6-11e7-8eb5-cbccc2e7bfbf_story.html
But time has moved on, and more recent heavy ebikes that can go more than 25 miles an hour on pedestrian trails have been developed and are increasingly popular. They are a menace on pedestrian trails. Local government and the National Park Service need to pay attention and get serious about enforcement. And some new laws may be necessary. Something should be done before there is a rash of serious accidents and law suits.
A 2022 article cites some lawmakers who grasp the problem: officials in Carlsbad, California, near San Diego, recently declared a “state of emergency” after accidents involving bicycles of all kinds more than tripled since 2019. Residents blamed e-bikes for this growth. But the article explains that “Currently, e-bike manufacturers are innovating faster than US officials can adapt. Austin Darling, a spokesman for Amsterdam-based VanMoof, whose most popular model costs $2,400, says Americans want faster, more powerful e-bikes.” https://sdcleanfuels.org/e-bike-boom-grows-more-dangerous-creating-push-for-tougher-cycling-rules-in-cities/
My conclusion: Faster and bigger electric bikes require vigorous enforcement of current laws, and consideration of new laws, perhaps focused on the recent wave of faster and bigger electric bikes.
By Don Allen Resnikoff
I occasionally walk or ride a bike on the Capital Crescent Trail that runs from Maryland to Georgetown in DC. I sometimes do the same on the part of Beach Drive that is blocked off north of Piece Mill in DC to accommodate pedestrians and bikers.
Sometimes I’ll see electrified bikes of the kind that look a lot like standard mountain bikes and go at speeds typically less than about 15 miles per hour. But more and more I see heavy looking electric powered machines with fat tires that may permit pedaling, but are traveling at speeds of about 30 MPH. They are the equivalent of small electric powered motorcycles. They are a menace.
DC, Maryland, and Virginia all have laws that regulate the use of electric bikes on pedestrian trails. Here is a chart from 2019 that gives some indication of what bikes are allowed and where. https://www.capitaltrailscoalition.org/wp-content/uploads/2019/11/Trails-Symposium-E-bike-Cheat-Sheet.pdf
A Washington Post article from some years ago found advocates for electric bikes on pedestrian trails: Some describe a desire to accommodate an aging and out-of-shape population that still wants to experience bike trails. “I don’t think having additional people trying to use alternative means of transportation is necessarily a bad thing,” said Alex Logemann, a policy analyst at the industry-funded PeopleForBikes advocacy group.
The same article explained that The National Park Service does not allow motorized bikes on its trails, including the D.C. section of the Capital Crescent Trail and the Mount Vernon Trail in Alexandria, but there isn’t much enforcement. See https://www.washingtonpost.com/opinions/lets-keep-motors-off-our-bike-trails/2017/07/28/94824620-67e6-11e7-8eb5-cbccc2e7bfbf_story.html
But time has moved on, and more recent heavy ebikes that can go more than 25 miles an hour on pedestrian trails have been developed and are increasingly popular. They are a menace on pedestrian trails. Local government and the National Park Service need to pay attention and get serious about enforcement. And some new laws may be necessary. Something should be done before there is a rash of serious accidents and law suits.
A 2022 article cites some lawmakers who grasp the problem: officials in Carlsbad, California, near San Diego, recently declared a “state of emergency” after accidents involving bicycles of all kinds more than tripled since 2019. Residents blamed e-bikes for this growth. But the article explains that “Currently, e-bike manufacturers are innovating faster than US officials can adapt. Austin Darling, a spokesman for Amsterdam-based VanMoof, whose most popular model costs $2,400, says Americans want faster, more powerful e-bikes.” https://sdcleanfuels.org/e-bike-boom-grows-more-dangerous-creating-push-for-tougher-cycling-rules-in-cities/
My conclusion: Faster and bigger electric bikes require vigorous enforcement of current laws, and consideration of new laws, perhaps focused on the recent wave of faster and bigger electric bikes.
Plaintiffs and merger opponents DC, California, and Illinois have voluntarily withdrawn their motion for a Court preliminary injunction order to prevent Albertsons Companies, Inc. from issuing a “special cash dividend” announced as part of its proposed merger with the Kroger Company
Plaintiffs and merger opponents District of Columbia, the State of California, and the State of Illinois previously moved for a Court preliminary injunction order to prevent Albertsons Companies, Inc. from issuing a “special cash dividend” announced as part of its proposed merger with the Kroger Company and memorialized in an Agreement and Plan of Merger.
Plaintiffs expressed concern that the the Special Dividend and related restrictions that Defendants’ Merger Agreement places on Albertsons are likely to have consequential effects on competition, workers, and consumers, both during the pendency of the merger review and beyond. For that reason the States’ opposed the proposed merging parties agreement that Albertsons would pay an "outsized dividend" to its large, institutional controlling shareholders at the outset of the merger review. The States' argument is laid out at 2022.12.1 Motion for Preliminary Injunction_Redacted.pdf (ca.gov)
But now the Plaintiffs have withdrawn their application. A document filed by Plaintiffs in the case on 2/24/2023 recites:
PLAINTIFFS’ NOTICE OF VOLUNTARY DISMISSAL OF COMPLAINT
Pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i), Plaintiffs the District of Columbia, the State of California, and the State of Illinois (“Plaintiffs”) hereby give notice of their dismissal of all causes of action in the Complaint against defendants Albertsons Companies, Inc. (“Albertsons”) and The Kroger Co. (“Kroger”). Kroger and Albertsons have not filed an answer to the Complaint, have not moved to dismiss it, and have not moved for summary judgment. Dismissal under Rule 41(a)(1)(A)(i) is therefore appropriate.
The voluntary dismissal follows Court rulings adverse to to Plaintiff States. The California Attorney General's Office told Law360 in a statement Friday, "The fact remains that this proposed merger is still under review. Our office is dedicated to doing all we can to ensure that the proposed merger of these grocery behemoths complies with antitrust law and does not result in higher prices and worse service for consumers, suppressed wages for workers, or other anti-competitive effects."
Plaintiffs and merger opponents District of Columbia, the State of California, and the State of Illinois previously moved for a Court preliminary injunction order to prevent Albertsons Companies, Inc. from issuing a “special cash dividend” announced as part of its proposed merger with the Kroger Company and memorialized in an Agreement and Plan of Merger.
Plaintiffs expressed concern that the the Special Dividend and related restrictions that Defendants’ Merger Agreement places on Albertsons are likely to have consequential effects on competition, workers, and consumers, both during the pendency of the merger review and beyond. For that reason the States’ opposed the proposed merging parties agreement that Albertsons would pay an "outsized dividend" to its large, institutional controlling shareholders at the outset of the merger review. The States' argument is laid out at 2022.12.1 Motion for Preliminary Injunction_Redacted.pdf (ca.gov)
But now the Plaintiffs have withdrawn their application. A document filed by Plaintiffs in the case on 2/24/2023 recites:
PLAINTIFFS’ NOTICE OF VOLUNTARY DISMISSAL OF COMPLAINT
Pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i), Plaintiffs the District of Columbia, the State of California, and the State of Illinois (“Plaintiffs”) hereby give notice of their dismissal of all causes of action in the Complaint against defendants Albertsons Companies, Inc. (“Albertsons”) and The Kroger Co. (“Kroger”). Kroger and Albertsons have not filed an answer to the Complaint, have not moved to dismiss it, and have not moved for summary judgment. Dismissal under Rule 41(a)(1)(A)(i) is therefore appropriate.
The voluntary dismissal follows Court rulings adverse to to Plaintiff States. The California Attorney General's Office told Law360 in a statement Friday, "The fact remains that this proposed merger is still under review. Our office is dedicated to doing all we can to ensure that the proposed merger of these grocery behemoths complies with antitrust law and does not result in higher prices and worse service for consumers, suppressed wages for workers, or other anti-competitive effects."
From DC Appleseed -- Lawyer letter in opposition to Congressional override to DC criminal code revision
Posting of the Appleseed note is by Don Allen Resnikoff
As you likely know, DC is currently facing unprecedented federal intervention into our locally passed laws. In 2022, the DC Council passed a comprehensive overhaul of DC’s criminal code known as the Revised Criminal Code Act of 2022 (“RCCA”). DC’s lack of statehood and its Home Rule Act mean that laws passed by the DC government are implemented only after a congressional review period. When an act undergoes congressional review, members of Congress with little connection to the District of Columbia can weigh in on purely local affairs impacting DC residents most directly. The US House of Representatives already voted to disapprove the RCCA. This purely local legislation is now facing a disapproval resolution, SJ Res. 12, in the US Senate.
I [Appleseed Executive Batters-Thompson] am emailing today to ask attorneys practicing in DC to sign onto a letter asking US Senators to vote NO on SJ Res. 12. As practicing attorneys in DC, we are well-qualified to address the corrosive impact on democracy when laws passed by DC’s duly elected officials face unwarranted intervention from federal legislators unanswerable to DC voters. We are also uniquely situated to correct misleading and inflammatory rhetoric surrounding the RCCA, the drafting process, and DC’s current criminal code. For these reasons and others, I ask you to sign on to a letter from practicing DC attorneys urging US Senators to vote against SJ Res. 12, the joint resolution disapproving and blocking enactment of DC’s RCCA. In addition to correcting the most common misconceptions about the RCCA, this letter urges US Senators to respect self-government and local autonomy for the people of DC. Regardless of how you feel about the RCCA, DC’s elected officials are far better equipped to make any necessary changes than US Senators with limited knowledge of or accountability to the District.
Attorneys: you can view the sign-on letter and submit a brief form to add your name via the following link: https://forms.microsoft.com/r/dCkLNdTUPn
Because we anticipate on vote on this resolution as soon as next Monday, March 6th, please sign on by COB on Thursday, March 2, 2023. For questions, please email me at [email protected].
DAR Comment: I agree with the thought that regardless of how you feel about the RCCA, DC’s elected officials are far better equipped to make any necessary changes to DC statute law than US Senators with limited knowledge of or accountability to the District. Also, I agree there is a corrosive impact on democracy when laws passed by DC’s duly elected officials face unwarranted intervention from federal legislators unanswerable to DC voters. To say DC voters can be overridden because DC is not a state is to focus on a technicality rather than the broader priniciple that national government should defer to local authority, even where, as in DC and Puerto Rico, the status of being a State is lacking.
For non-lawyers and non residents of DC: I see no reason why you can't send a letter with the same content Appleseed recommends for lawyers. DR
Posting of the Appleseed note is by Don Allen Resnikoff
As you likely know, DC is currently facing unprecedented federal intervention into our locally passed laws. In 2022, the DC Council passed a comprehensive overhaul of DC’s criminal code known as the Revised Criminal Code Act of 2022 (“RCCA”). DC’s lack of statehood and its Home Rule Act mean that laws passed by the DC government are implemented only after a congressional review period. When an act undergoes congressional review, members of Congress with little connection to the District of Columbia can weigh in on purely local affairs impacting DC residents most directly. The US House of Representatives already voted to disapprove the RCCA. This purely local legislation is now facing a disapproval resolution, SJ Res. 12, in the US Senate.
I [Appleseed Executive Batters-Thompson] am emailing today to ask attorneys practicing in DC to sign onto a letter asking US Senators to vote NO on SJ Res. 12. As practicing attorneys in DC, we are well-qualified to address the corrosive impact on democracy when laws passed by DC’s duly elected officials face unwarranted intervention from federal legislators unanswerable to DC voters. We are also uniquely situated to correct misleading and inflammatory rhetoric surrounding the RCCA, the drafting process, and DC’s current criminal code. For these reasons and others, I ask you to sign on to a letter from practicing DC attorneys urging US Senators to vote against SJ Res. 12, the joint resolution disapproving and blocking enactment of DC’s RCCA. In addition to correcting the most common misconceptions about the RCCA, this letter urges US Senators to respect self-government and local autonomy for the people of DC. Regardless of how you feel about the RCCA, DC’s elected officials are far better equipped to make any necessary changes than US Senators with limited knowledge of or accountability to the District.
Attorneys: you can view the sign-on letter and submit a brief form to add your name via the following link: https://forms.microsoft.com/r/dCkLNdTUPn
Because we anticipate on vote on this resolution as soon as next Monday, March 6th, please sign on by COB on Thursday, March 2, 2023. For questions, please email me at [email protected].
DAR Comment: I agree with the thought that regardless of how you feel about the RCCA, DC’s elected officials are far better equipped to make any necessary changes to DC statute law than US Senators with limited knowledge of or accountability to the District. Also, I agree there is a corrosive impact on democracy when laws passed by DC’s duly elected officials face unwarranted intervention from federal legislators unanswerable to DC voters. To say DC voters can be overridden because DC is not a state is to focus on a technicality rather than the broader priniciple that national government should defer to local authority, even where, as in DC and Puerto Rico, the status of being a State is lacking.
For non-lawyers and non residents of DC: I see no reason why you can't send a letter with the same content Appleseed recommends for lawyers. DR
WSJ: Wholesale egg prices have dropped a lot, but retail prices have not
From https://www.wsj.com/articles/egg-prices-shortage-avian-flu-11673629381?st=rnqta9vx5tid2hy&reflink=share_mobilewebshare
Wholesale egg prices have dropped from record highs in December, but the grocery staple remains more expensive than usual and continues to squeeze consumer budgets.
Wholesale prices of Midwest large eggs hit a record $5.46 a dozen in December, according to the research firm Urner Barry. Those prices have declined to $2.35 a dozen, according to Urner Barry, but are still higher than $1.30 a dozen in January 2022.
Retail prices for a dozen regular eggs have stayed in the $4 range since late December but are declining, NielsenIQ data show. A dozen regular eggs sold for $4.13 for the week ended Feb. 4, lower than $4.40 for the week ended Jan. 21.
Why don’t retail egg prices drop more in sync with dropping wholesale prices? Grocer Scott Karns 'splains it, some might say not too convincingly:
There is often a lag between wholesale prices—what suppliers charge—and the retail prices that consumers pay, as supermarkets try to sell through the inventory they have on hand, said Scott Karns, chief executive of Karns Foods in Pennsylvania.
Posting by Don Allen Resnikoff
From https://www.wsj.com/articles/egg-prices-shortage-avian-flu-11673629381?st=rnqta9vx5tid2hy&reflink=share_mobilewebshare
Wholesale egg prices have dropped from record highs in December, but the grocery staple remains more expensive than usual and continues to squeeze consumer budgets.
Wholesale prices of Midwest large eggs hit a record $5.46 a dozen in December, according to the research firm Urner Barry. Those prices have declined to $2.35 a dozen, according to Urner Barry, but are still higher than $1.30 a dozen in January 2022.
Retail prices for a dozen regular eggs have stayed in the $4 range since late December but are declining, NielsenIQ data show. A dozen regular eggs sold for $4.13 for the week ended Feb. 4, lower than $4.40 for the week ended Jan. 21.
Why don’t retail egg prices drop more in sync with dropping wholesale prices? Grocer Scott Karns 'splains it, some might say not too convincingly:
There is often a lag between wholesale prices—what suppliers charge—and the retail prices that consumers pay, as supermarkets try to sell through the inventory they have on hand, said Scott Karns, chief executive of Karns Foods in Pennsylvania.
Posting by Don Allen Resnikoff
2007 DC Report Urges Rerouting Of Hazardous Rail Shipments Away From Downtown DC
Posting by Don Allen Resnikoff
The recent freight rail calamity in Palestine, Ohio is a reminder that freight rail shipping involves great risk. That is particularly true when routing is through urban areas. The Washington, DC area is an unusually fraught example. The following information is drawn from a 2007 article that is available at
https://www.firehouse.com/rescue/article/10505309/new-dc-report-urges-rerouting-of-hazardous-rail-shipments
A 2007 report issued by the National Capital Planning Commission calls for hazmat shipments to be diverted from downtown DC to the suburbs despite a federal court order that stopped Washington from banning these trains.
About the area involved: It's the main line of the CSX Railroad, a two-mile stretch of track that crosses the Potomac River from Virginia into southwest Washington. For about 16 blocks, it runs near or next to a dozen federal office buildings, including congressional offices, the U.S. Capitol, a huge power plant and numerous tourist attractions. A branch line goes into a tunnel that carries passenger trains under Capitol Hill to Union Station. There's good reason to be fearful of an accident or a terrorist attack that could cause a fire, explosion, chemical leak or toxic cloud along the railroad's right-of-way. More than 8,000 rail cars carrying chemicals travel these tracks in the course of a year.
The DC City Council passed a law banning freight trains with dangerous cargoes. CSX filed a lawsuit to stop the ban. All of the federal agencies with a stake in the case, including the Department of Homeland Security, opposed the city and sided with the railroad. A federal district court ruled in favor of the city, but that verdict was overturned by the U.S. Court of Appeals in 2005, which held that the Council's action interfered with interstate commerce and was unconstitutional. CSX was free to run its trains with hazmat loads.
The 2007 study by the Planning Commission proposes three solutions to the problem: an eight-mile tunnel from the Potomac River to Maryland at a cost of $5.3 billion or, one of two above-ground routes that completely bypass Washington and reroute the trains from Virginia to Maryland. Each has a $4.3 billion price tag.
It is reasonable to ask whether the situation facing the urban DC area has changed between 2007 and 2023. The answer: not much. As reported in current media, the Obama Administration introduced some rail safety regulations that were pulled back by the Trump Administration.
The rail safety dilemma facing Washington, its suburbs and other urban areas continues to be a problem, and it looks like it will not be quickly or easily resolved.
Posting by Don Allen Resnikoff
The recent freight rail calamity in Palestine, Ohio is a reminder that freight rail shipping involves great risk. That is particularly true when routing is through urban areas. The Washington, DC area is an unusually fraught example. The following information is drawn from a 2007 article that is available at
https://www.firehouse.com/rescue/article/10505309/new-dc-report-urges-rerouting-of-hazardous-rail-shipments
A 2007 report issued by the National Capital Planning Commission calls for hazmat shipments to be diverted from downtown DC to the suburbs despite a federal court order that stopped Washington from banning these trains.
About the area involved: It's the main line of the CSX Railroad, a two-mile stretch of track that crosses the Potomac River from Virginia into southwest Washington. For about 16 blocks, it runs near or next to a dozen federal office buildings, including congressional offices, the U.S. Capitol, a huge power plant and numerous tourist attractions. A branch line goes into a tunnel that carries passenger trains under Capitol Hill to Union Station. There's good reason to be fearful of an accident or a terrorist attack that could cause a fire, explosion, chemical leak or toxic cloud along the railroad's right-of-way. More than 8,000 rail cars carrying chemicals travel these tracks in the course of a year.
The DC City Council passed a law banning freight trains with dangerous cargoes. CSX filed a lawsuit to stop the ban. All of the federal agencies with a stake in the case, including the Department of Homeland Security, opposed the city and sided with the railroad. A federal district court ruled in favor of the city, but that verdict was overturned by the U.S. Court of Appeals in 2005, which held that the Council's action interfered with interstate commerce and was unconstitutional. CSX was free to run its trains with hazmat loads.
The 2007 study by the Planning Commission proposes three solutions to the problem: an eight-mile tunnel from the Potomac River to Maryland at a cost of $5.3 billion or, one of two above-ground routes that completely bypass Washington and reroute the trains from Virginia to Maryland. Each has a $4.3 billion price tag.
It is reasonable to ask whether the situation facing the urban DC area has changed between 2007 and 2023. The answer: not much. As reported in current media, the Obama Administration introduced some rail safety regulations that were pulled back by the Trump Administration.
The rail safety dilemma facing Washington, its suburbs and other urban areas continues to be a problem, and it looks like it will not be quickly or easily resolved.
DC AG Schwalb Statement on U.S. House Voting to Overturn Democratically Enacted Local Laws
https://oag.dc.gov/release/ag-schwalb-statement-us-house-voting-overturn
February 9, 2023
WASHINGTON, DC – Attorney General Brian L. Schwalb today released the following state-ment regarding the U.S. House of Representatives’ vote to override democratically enacted local laws:
“Every American should be concerned that the House of Representatives is interfering with local DC self-governance. Today’s move to overturn our laws is not about making the District safer or more just. Today’s actions are political grandstanding and highlight the urgent need for DC statehood. District residents are on notice that lawmakers seek to undermine our democratic process to gain political favor and are substituting uninformed politics for the views of those impacted most, DC residents. As the District’s chief law officer, I will defend any democratically enacted law that is passed and will continue to protect the District against future Congressional interference.”
On Monday, AG Schwalb sent a letter Speaker Kevin McCarthy urging Congress to vote against the proposed resolutions.
A copy of that letter is available here. https://oag.dc.gov/sites/default/files/2023-02/DC%20AG%20House%20Letter%20Criminal%20Code%20and%20Voting.pdf
DAR Comment:
It is interesting that while the Washington Post and other media covered the home rule issue of Congressional override of DC legislation,
the PBS News Hour chose to focus on the wisdom of the policy choice of the DC legislation to reduce maximum sentences. Two invited guests sparred on the wisdom of reduced maximum sentences. House Republicans take steps to block new criminal code in Washington, D.C. | PBS NewsHour https://www.pbs.org/newshour/show/house-republicans-take-steps-to-block-new-criminal-code-in-washington-d-c
https://oag.dc.gov/release/ag-schwalb-statement-us-house-voting-overturn
February 9, 2023
WASHINGTON, DC – Attorney General Brian L. Schwalb today released the following state-ment regarding the U.S. House of Representatives’ vote to override democratically enacted local laws:
“Every American should be concerned that the House of Representatives is interfering with local DC self-governance. Today’s move to overturn our laws is not about making the District safer or more just. Today’s actions are political grandstanding and highlight the urgent need for DC statehood. District residents are on notice that lawmakers seek to undermine our democratic process to gain political favor and are substituting uninformed politics for the views of those impacted most, DC residents. As the District’s chief law officer, I will defend any democratically enacted law that is passed and will continue to protect the District against future Congressional interference.”
On Monday, AG Schwalb sent a letter Speaker Kevin McCarthy urging Congress to vote against the proposed resolutions.
A copy of that letter is available here. https://oag.dc.gov/sites/default/files/2023-02/DC%20AG%20House%20Letter%20Criminal%20Code%20and%20Voting.pdf
DAR Comment:
It is interesting that while the Washington Post and other media covered the home rule issue of Congressional override of DC legislation,
the PBS News Hour chose to focus on the wisdom of the policy choice of the DC legislation to reduce maximum sentences. Two invited guests sparred on the wisdom of reduced maximum sentences. House Republicans take steps to block new criminal code in Washington, D.C. | PBS NewsHour https://www.pbs.org/newshour/show/house-republicans-take-steps-to-block-new-criminal-code-in-washington-d-c
CFPB Press Release: CFPB and New York Attorney General Sue Credit Acceptance for Hiding Auto Loan Costs, Setting Borrowers Up to Fail
Major subprime auto lender targets Americans with loans that it predicts they cannot afford to repay
JAN 04, 2023
WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) and the New York State Office of the Attorney General sued a predatory auto lender, Credit Acceptance Corporation, for misrepresenting the cost of credit and tricking its customers into high-cost loans on used cars. The car-buying experience turns into a nightmare for many of Credit Acceptance’s borrowers, who face unaffordable monthly payments, vehicle repossessions, and debt collection lawsuits. The joint complaint alleges that, among other things, Credit Acceptance hides costs in loan agreements and sets consumers up to fail. The complaint also alleges that Credit Acceptance violated New York usury limits and other consumer and investor protection laws. The lawsuit seeks to force Credit Acceptance to stop its illegal practices, reimburse harmed consumers, pay back wrongfully earned gains, and pay a penalty.
“Credit Acceptance obscured the true cost of its loans to car buyers, leading to severe financial distress for borrowers and subjecting them to aggressive debt collection tactics on loans its own systems predicted that borrowers can’t afford to repay,” said CFPB Director Rohit Chopra. “The CFPB and the New York Attorney General seek to halt Credit Acceptance's illegal practices and make consumers whole.”
“CAC claimed to help low-income New Yorkers purchase cars, but instead, drove them straight into debt,” said New York Attorney General Letitia James. “CAC steered hardworking New Yorkers onto a path of financial ruin by tricking them into unaffordable, high-interest auto loans while cutting backroom deals with dealers to increase their own profits. These predatory actions hurt innocent people and left them with mountains of debt. I thank the CFPB for their partnership to stop this harm and protect everyday New Yorkers.”
Credit Acceptance (NASDAQ:CACC) is an indirect auto lender headquartered in Southfield, Michigan that funds and services used-car loans for people with low credit scores. Credit Acceptance is one of the country’s largest publicly traded auto lenders and does business with a network of more than 12,000 affiliated used-car dealers. From November 2, 2015 to April 30, 2021, approximately 1.9 million people obtained used car loans through Credit Acceptance and its affiliated dealers. In 2020 alone, consumers obtained more than $4.9 billion in Credit Acceptance-financed loans. The company’s loans typically carry very high interest rates.
Specifically, the company allegedly harmed consumers by:
This is not the only action targeting Credit Acceptance for violation of consumer financial protection laws. For example, last year, the Massachusetts Attorney General secured more than $27 million for thousands of families harmed by Credit Acceptance.
Major subprime auto lender targets Americans with loans that it predicts they cannot afford to repay
JAN 04, 2023
WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) and the New York State Office of the Attorney General sued a predatory auto lender, Credit Acceptance Corporation, for misrepresenting the cost of credit and tricking its customers into high-cost loans on used cars. The car-buying experience turns into a nightmare for many of Credit Acceptance’s borrowers, who face unaffordable monthly payments, vehicle repossessions, and debt collection lawsuits. The joint complaint alleges that, among other things, Credit Acceptance hides costs in loan agreements and sets consumers up to fail. The complaint also alleges that Credit Acceptance violated New York usury limits and other consumer and investor protection laws. The lawsuit seeks to force Credit Acceptance to stop its illegal practices, reimburse harmed consumers, pay back wrongfully earned gains, and pay a penalty.
“Credit Acceptance obscured the true cost of its loans to car buyers, leading to severe financial distress for borrowers and subjecting them to aggressive debt collection tactics on loans its own systems predicted that borrowers can’t afford to repay,” said CFPB Director Rohit Chopra. “The CFPB and the New York Attorney General seek to halt Credit Acceptance's illegal practices and make consumers whole.”
“CAC claimed to help low-income New Yorkers purchase cars, but instead, drove them straight into debt,” said New York Attorney General Letitia James. “CAC steered hardworking New Yorkers onto a path of financial ruin by tricking them into unaffordable, high-interest auto loans while cutting backroom deals with dealers to increase their own profits. These predatory actions hurt innocent people and left them with mountains of debt. I thank the CFPB for their partnership to stop this harm and protect everyday New Yorkers.”
Credit Acceptance (NASDAQ:CACC) is an indirect auto lender headquartered in Southfield, Michigan that funds and services used-car loans for people with low credit scores. Credit Acceptance is one of the country’s largest publicly traded auto lenders and does business with a network of more than 12,000 affiliated used-car dealers. From November 2, 2015 to April 30, 2021, approximately 1.9 million people obtained used car loans through Credit Acceptance and its affiliated dealers. In 2020 alone, consumers obtained more than $4.9 billion in Credit Acceptance-financed loans. The company’s loans typically carry very high interest rates.
Specifically, the company allegedly harmed consumers by:
- Hiding the true cost of credit: Since 2014, Credit Acceptance’s loan agreements nationwide have said that consumers would pay interest at an average 22% APR. However, the true cost of credit offered is far higher than what borrowers are told. This is because Credit Acceptance’s business model pushes dealers to manipulate the prices of vehicles sold to Credit Acceptance borrowers, based on borrowers’ projected performance. This increases the principal balance of the loans. By hiding the true cost of the credit in inflated principal balances, Credit Acceptance evades state interest rate caps and deprives consumers of the ability to make informed decisions, to compare financing options, or to avoid high interest charges.
- Setting up borrowers to fail: Credit Acceptance ensured its own profits by providing loans without regard to whether borrowers could afford them. For almost 4 out of 10 loans, Credit Acceptance predicted that it would not be able to collect the full amount financed by the loan. Credit Acceptance profits even when borrowers are unable to pay their loans in full by using aggressive debt collection methods. As a result of Credit Acceptance’s practices, customers faced late fees, repossessions, auctions, post-repossession collection efforts, lawsuits, and ruined credit profiles.
- Closing its eyes to practices that harmed consumers: The company created financial incentives for dealers to add extra products to loans and then shrugged off whether customers were misled into thinking the add-on products were required. Add-on products, such as vehicle service contracts, are a profit center for Credit Acceptance. They represented about $250 million in revenue in 2020 alone.
This is not the only action targeting Credit Acceptance for violation of consumer financial protection laws. For example, last year, the Massachusetts Attorney General secured more than $27 million for thousands of families harmed by Credit Acceptance.
National Law Review On PFAS Consumer Fraud Lawsuits
The National Law Review reports that on December 28, 2022, a PFAS consumer fraud class action lawsuit was filed in New York against Coca-Cola over alleged PFAS content in the Simply Tropical juice products sold by the company.
The NLR article points out that the Coca-Cola PFAS consumer fraud lawsuit is but the latest in a growing line of PFAS lawsuits that allege that certain consumer goods contain PFAS, that the products or company’s values were marketed as healthy or environmentally friendly, and that consumers would not have purchased the products if they knew that the products contained PFAS. Increased attention on PFAS content in consumer goods in the scientific community and media presented significant risks to various industries.
The article also points out that with studies underway, legislation pending that targets consumer goods, and increasing media reporting on PFAS in consumer goods and concerns over human health, product manufacturers should be increasingly wary of lawsuits similar to the Coca-Cola lawsuit being filed against them. There are an increasing number of PFAS consumer fraud cases being filed, with some of the below as representative of recent trends:
The National Law Review reports that on December 28, 2022, a PFAS consumer fraud class action lawsuit was filed in New York against Coca-Cola over alleged PFAS content in the Simply Tropical juice products sold by the company.
The NLR article points out that the Coca-Cola PFAS consumer fraud lawsuit is but the latest in a growing line of PFAS lawsuits that allege that certain consumer goods contain PFAS, that the products or company’s values were marketed as healthy or environmentally friendly, and that consumers would not have purchased the products if they knew that the products contained PFAS. Increased attention on PFAS content in consumer goods in the scientific community and media presented significant risks to various industries.
The article also points out that with studies underway, legislation pending that targets consumer goods, and increasing media reporting on PFAS in consumer goods and concerns over human health, product manufacturers should be increasingly wary of lawsuits similar to the Coca-Cola lawsuit being filed against them. There are an increasing number of PFAS consumer fraud cases being filed, with some of the below as representative of recent trends:
- Cosmetics industry:
- Brown v. Cover Girl, New York (April 1, 2022)
- Anderson v. Almay, New York (April 1, 2022)
- Rebecca Vega v. L’Oreal, New Jersey (April 8, 2022)
- Spindel v. Burt’s Bees, California (March 25, 2022)
- Hicks and Vargas v. L’Oreal, New York (March 9, 2022)
- Davenport v. L’Oreal, California (February 22, 2022)
- Food packaging industry:
- Richburg v. Conagra Brands, Illinois (May 6, 2022)
- Ruiz v. Conagra Brands, Illinois (May 6, 2022)
- Hamman v. Cava Group, California (April 27, 2022)
- Azman Hussain v. Burger King, California (April 11, 2022)
- Little v. NatureStar, California (April 8, 2022)
- Larry Clark v. McDonald’s, Illinois (March 28, 2022)
- Feminine hygiene products:
- Gemma Rivera v. Knix Wear Inc., California (April 4, 2022)
- Blenis v. Thinx, Inc., Massachusetts (June 18, 2021)
- Destini Canan v. Thinx Inc., California (November 12, 2020)
The NLR article can be found at https://www.natlawreview.com/article/coca-cola-pfas-consumer-fraud-lawsuit-continues-2022-trend
The New York attorney general, Letitia James, has sued the founder of the collapsed cryptocurrency bank Celsius Network, accusing him of a scheme to defraud hundreds of thousands of investors.
The lawsuit alleges that Celsius founder Alex Mashinskymisled customers into depositing their crypto savings on the platform, promising falsely that it was as safe as a traditional bank.
The nain allegations are about fraudulent inducement to put money into risky investments mischaracterized as safe. That the source of investor funds were crypto seems secondary, The complaint is here:
mashinsky_complaint.pdf (ny.gov) https://ag.ny.gov/sites/default/files/mashinsky_complaint.pdf
An excerpt from the Complaint:
Between 2018 and at least June 2022, Defendant Alex Mashinsky (“Mashinsky” or “Defendant”) engaged in a scheme to defraud hundreds of thousands of investors, including more than 26,000 New Yorkers, by using false and misleading representations to induce them to deposit billions of dollars in digital assets with his cryptocurrency lending company Celsius Network LLC (together with its parent and related entities, “Celsius”), which he founded and led as chief executive officer. Mashinsky promoted Celsius as a safe alternative to banks while concealing that Celsius was actually engaged in risky investment strategies.
The lawsuit alleges that Celsius founder Alex Mashinskymisled customers into depositing their crypto savings on the platform, promising falsely that it was as safe as a traditional bank.
The nain allegations are about fraudulent inducement to put money into risky investments mischaracterized as safe. That the source of investor funds were crypto seems secondary, The complaint is here:
mashinsky_complaint.pdf (ny.gov) https://ag.ny.gov/sites/default/files/mashinsky_complaint.pdf
An excerpt from the Complaint:
Between 2018 and at least June 2022, Defendant Alex Mashinsky (“Mashinsky” or “Defendant”) engaged in a scheme to defraud hundreds of thousands of investors, including more than 26,000 New Yorkers, by using false and misleading representations to induce them to deposit billions of dollars in digital assets with his cryptocurrency lending company Celsius Network LLC (together with its parent and related entities, “Celsius”), which he founded and led as chief executive officer. Mashinsky promoted Celsius as a safe alternative to banks while concealing that Celsius was actually engaged in risky investment strategies.
DC AG and 37 other AGS want more power to protect consumers from airline abuses
In light of the recent widely discussed meltdown in Southwest Air service, it is interesting to see that in August, 38 state attorneys, including DC's AG, warned in an open letter to Congress that the Department of Transportation was failing to properly regulate the airline industry. They asked for expanded state level power to protect consumers. The National Association of Attorneys General (NAAG) letter asked Congress to pass legislation that would authorize state attorneys general to enforce both state and federal consumer protection laws governing the airline industry.
It also encouraged Congress to consider shifting the authority for federal investigations of airline patron complaints from the United States Department of Transportation (U.S. DOT) to an agency more primarily focused on consumer protection, such as the U.S. Department of Justice or the Federal Trade Commission.
They wrote, among other things, that“Americans are justifiably frustrated that federal government agencies charged with overseeing airline consumer protection are unable or unwilling to hold the airline industry accountable.”
It is relevant that reportedly, Southwest Airlines received over $7B in federal pandemic aid prior to cancelation chaos; and
spent $5.6 billion on stock buybacks in the three years leading up to the pandemic, rather than making investments in infrastructure to be better prepared for extreme weather events.
The text of the AG letter, lightly edited, and with footnotes omitted, follows:
Dear Leader Schumer, Speaker Pelosi, Leader McConnell, and Leader McCarthy,
As our states’ chief consumer protection enforcers, we receive consumer complaints and work hard to hold accountable irresponsible actors who treat consumers deceptively or unfairly. Over the course of the COVID-19 pandemic, certain corporate actors have systematically failed to live up to their responsibilities to their customers and have caused significant frustrations and unnecessary challenges for these customers. In particular, the airline industry has failed their customers.
Over the past couple of years, our offices have received thousands of complaints from outraged airline passengers about airline customer service—including about systematic failures to provide required credits to those who lost travel opportunities during the pandemic.
As you are aware, federal law places the central responsibility for addressing violations of airline consumer protection with the United States Department of Transportation (US DOT). Accordingly, our offices have relayed the complaints we have received to the US DOT. Unfortunately, the agency has thus far failed to respond and to provide appropriate recourse in those cases. Americans are justifiably frustrated that federal government agencies charged with overseeing airline consumer protection are unable or unwilling to hold the airline industry accountable and to swiftly investigate complaints submitted to the US DOT.
The lack of action has spanned multiple administrations – both Republican and Democratic Presidents have failed to spur the US DOT to act in a manner that responds effectively to consumer complaints.
If state attorneys general had a substantial and meaningful role in overseeing airline consumer protection, the failure of the US DOT would be ameliorated by the ability of state attorneys general to enforce the law. But state attorneys general have little to no authority to hold airline companies accountable for unacceptable behavior towards consumers. This vacuum of oversight allows airlines to mistreat consumers and leaves consumers without effective redress.
Moreover, given the increased level of concentration in the airline industry and the decreased levels of competition, the ability of the marketplace to punish or reward industry behavior that harms or helps consumers is lessened, increasing the importance of effective enforcement of consumer protection requirements.
For airline consumers to be properly protected, we urge Congress to take meaningful action and pass legislation that would authorize state attorneys general to enforce our state and federal consumer protection laws governing the airline industry. Furthermore, we encourage Congress to consider shifting the authority for federal investigations of patron complaints A bipartisan coalition of 40 attorneys general also has urged Congressional action regarding consumer protection measures for airline industry customers previously.
Now, four airlines control almost 70 percent of domestic air travel in the United States. And because consumers are basically limited to the flights available from nearby local airports, this means that, in practice, most consumers are left to choose between two or three airlines when making travel plans.
There is also little to no entry in this sector, as discussed in the next part, in part because incumbent airlines have developed a reputation for predation. Finally, in what demonstrates the clear consumer harm from the high level of concentration in the airline industry, consider that when fuel prices fell dramatically, consumers did not see any benefits passed on to them, but rather the industry recorded massive profits.
The mistreatment of airline consumers is a bi-partisan issue—one that requires immediate action from federal lawmakers. Flying is essential to millions of Americans as they go about their personal and professional lives and is critical to our local, state, and national economies. Customers booking airline tickets should enjoy a reasonable expectation of being treated fairly, respectfully, and consistently under the law throughout all interactions during their experience with the airline industry. Consumer confidence in the air travel experience is paramount to a thriving economy.
In making these requests, we acknowledge that the US DOT is presently considering a series of rulemakings to provide consumers with additional protections. We support such efforts and will urge a greater solicitude for and reliance on state attorneys general in such processes. But even if the US DOT improves the current regulatory protections, we remain deeply concerned and frustrated that the agency is unable or unwilling to vindicate the rights of consumers and to hold airline companies accountable for irresponsible actions.
It is time to authorize state attorneys general, and perhaps a different federal agency, to enforce consumer protections for airline travelers. Thank you for your attention to these serious concerns and our recommendations to help address this vital issue for our country. We stand ready to work with you and with your chambers to craft legislation that provides far better enforcement for consumer violations and protects Americans that rely on air travel.
[The full letter is at NAAG-Policy-Letter-Airline-Accountability-and-Increased-Consumer-Protection-Final_38-AGs.pdf (naagweb.wpenginepowered.com)
Posting by Don Allen Resnikoff
In light of the recent widely discussed meltdown in Southwest Air service, it is interesting to see that in August, 38 state attorneys, including DC's AG, warned in an open letter to Congress that the Department of Transportation was failing to properly regulate the airline industry. They asked for expanded state level power to protect consumers. The National Association of Attorneys General (NAAG) letter asked Congress to pass legislation that would authorize state attorneys general to enforce both state and federal consumer protection laws governing the airline industry.
It also encouraged Congress to consider shifting the authority for federal investigations of airline patron complaints from the United States Department of Transportation (U.S. DOT) to an agency more primarily focused on consumer protection, such as the U.S. Department of Justice or the Federal Trade Commission.
They wrote, among other things, that“Americans are justifiably frustrated that federal government agencies charged with overseeing airline consumer protection are unable or unwilling to hold the airline industry accountable.”
It is relevant that reportedly, Southwest Airlines received over $7B in federal pandemic aid prior to cancelation chaos; and
spent $5.6 billion on stock buybacks in the three years leading up to the pandemic, rather than making investments in infrastructure to be better prepared for extreme weather events.
The text of the AG letter, lightly edited, and with footnotes omitted, follows:
Dear Leader Schumer, Speaker Pelosi, Leader McConnell, and Leader McCarthy,
As our states’ chief consumer protection enforcers, we receive consumer complaints and work hard to hold accountable irresponsible actors who treat consumers deceptively or unfairly. Over the course of the COVID-19 pandemic, certain corporate actors have systematically failed to live up to their responsibilities to their customers and have caused significant frustrations and unnecessary challenges for these customers. In particular, the airline industry has failed their customers.
Over the past couple of years, our offices have received thousands of complaints from outraged airline passengers about airline customer service—including about systematic failures to provide required credits to those who lost travel opportunities during the pandemic.
As you are aware, federal law places the central responsibility for addressing violations of airline consumer protection with the United States Department of Transportation (US DOT). Accordingly, our offices have relayed the complaints we have received to the US DOT. Unfortunately, the agency has thus far failed to respond and to provide appropriate recourse in those cases. Americans are justifiably frustrated that federal government agencies charged with overseeing airline consumer protection are unable or unwilling to hold the airline industry accountable and to swiftly investigate complaints submitted to the US DOT.
The lack of action has spanned multiple administrations – both Republican and Democratic Presidents have failed to spur the US DOT to act in a manner that responds effectively to consumer complaints.
If state attorneys general had a substantial and meaningful role in overseeing airline consumer protection, the failure of the US DOT would be ameliorated by the ability of state attorneys general to enforce the law. But state attorneys general have little to no authority to hold airline companies accountable for unacceptable behavior towards consumers. This vacuum of oversight allows airlines to mistreat consumers and leaves consumers without effective redress.
Moreover, given the increased level of concentration in the airline industry and the decreased levels of competition, the ability of the marketplace to punish or reward industry behavior that harms or helps consumers is lessened, increasing the importance of effective enforcement of consumer protection requirements.
For airline consumers to be properly protected, we urge Congress to take meaningful action and pass legislation that would authorize state attorneys general to enforce our state and federal consumer protection laws governing the airline industry. Furthermore, we encourage Congress to consider shifting the authority for federal investigations of patron complaints A bipartisan coalition of 40 attorneys general also has urged Congressional action regarding consumer protection measures for airline industry customers previously.
Now, four airlines control almost 70 percent of domestic air travel in the United States. And because consumers are basically limited to the flights available from nearby local airports, this means that, in practice, most consumers are left to choose between two or three airlines when making travel plans.
There is also little to no entry in this sector, as discussed in the next part, in part because incumbent airlines have developed a reputation for predation. Finally, in what demonstrates the clear consumer harm from the high level of concentration in the airline industry, consider that when fuel prices fell dramatically, consumers did not see any benefits passed on to them, but rather the industry recorded massive profits.
The mistreatment of airline consumers is a bi-partisan issue—one that requires immediate action from federal lawmakers. Flying is essential to millions of Americans as they go about their personal and professional lives and is critical to our local, state, and national economies. Customers booking airline tickets should enjoy a reasonable expectation of being treated fairly, respectfully, and consistently under the law throughout all interactions during their experience with the airline industry. Consumer confidence in the air travel experience is paramount to a thriving economy.
In making these requests, we acknowledge that the US DOT is presently considering a series of rulemakings to provide consumers with additional protections. We support such efforts and will urge a greater solicitude for and reliance on state attorneys general in such processes. But even if the US DOT improves the current regulatory protections, we remain deeply concerned and frustrated that the agency is unable or unwilling to vindicate the rights of consumers and to hold airline companies accountable for irresponsible actions.
It is time to authorize state attorneys general, and perhaps a different federal agency, to enforce consumer protections for airline travelers. Thank you for your attention to these serious concerns and our recommendations to help address this vital issue for our country. We stand ready to work with you and with your chambers to craft legislation that provides far better enforcement for consumer violations and protects Americans that rely on air travel.
[The full letter is at NAAG-Policy-Letter-Airline-Accountability-and-Increased-Consumer-Protection-Final_38-AGs.pdf (naagweb.wpenginepowered.com)
Posting by Don Allen Resnikoff
DC AG Racine on Texas immigrants in DC
Some would say that it was not in the spirit of Christmas for Texas governor Abbott to arrange drop-off of ill-prepared immigrants in DC on a frigid Christmas eve. See https://www.washingtonpost.com/immigration/2022/12/25/migrants-dc-christmas-eve/ (“About 110 to 130 men, women and children got off the buses outside the Naval Observatory on Saturday night in 18-degree weather after a two-day journey from South Texas, according to the Migrant Solidarity Mutual Aid Network. On the coldest Christmas Eve day on record in the District, some migrants were bundled up in blankets as they were greeted by volunteers who had received word that Texas Gov. Greg Abbott (R) had sent the caravan.”)
What DC AG Racine has said in the past is that sending such immigrants may be not only inhumane, but illegal. As reported by Axios (at https://www.axios.com/2022/10/15/dc-attorney-general-texas-florida-migrants-buses: In October District of Columbia Attorney General Karl Racine opened an investigation into whether state governors at the southern border — like Texas Gov. Greg Abbott (R) — misled immigrants when deciding to transport them. Racine said immigrants told investigators that they were misled, "with talk about promised services." Racine said DC is investigating if the trip organizers deceived immigrants before boarding the buses to other states, promising jobs or services and potentially violating civil rights when moving immigrants across state lines.
The DC AG’s office could look into whether anyone committed fraud by falsely promising jobs or services, or whether there were civil rights violations. The D.C. attorney general can pursue misdemeanor criminal charges or file civil fraud charges, and refer more serious criminal violations to the DC U.S. Attorney’s Office.
Posting by Don Allen Resnikoff
AG Racine’s farewell, and comment on his success in local impact cases
DC AG Racine’s December 22, 2022 Newsletter is a farewell statement that celebrates his successes as the first elected AG in DC. Racine’s accomplishments are impressive, and have earned him favorable media attention.
I have particular admiration for those AG cases that focus on local issues as opposed to national issues that draw the attention of many state and federal enforcers.
AG Racine focused on important local issues in cases his office brought supporting DC’s 24% interest rate cap on consumer loans.
As a general matter, interest rate caps are favored by consumer advocates, who say that rate caps imposed by local legislators protect consumers from predatory lenders. So-called “pay-day” lenders are often pointed to as frequent predatory lenders. Bankers and other lenders often oppose legislated interest rate caps, because they interfere with creditor decision making, and may harm borrowers who have a reasonable demand for high interest rate loans.
One such case involving violation of DC’s interest rate capwas described in an October, 2022 posting from the AG’s office. The posting explained said that OAG sued Opportunity Financial (OppFi) in 2021 for deceptively marketing high interest loans to DC consumers that were more than eight times higher than the DC rate cap. In 2021, the company agreed to pay $1.5 million to refund over 4,000 District consumers who were charged exploitive interest rates by the company, waive over $640,000 in interest owed by those consumers, and pay $250,000 to the District in penalties.
In an online posting, the AG’s office explained that Opportunity Financial misrepresented its high interest loans as fast and easy cash and falsely claimed that its loans would help struggling consumers build credit. Instead, from at least 2018 until May 2020, “OppFi” provided loans to most District residents at a 160% APR—more than seven times the District’s 24% rate cap. Most states, like DC, protect their residents from predatory lenders through state laws that prohibit charging exploitative interest rates, but some states do not.
The AG’s office explains that OppFi is an online lender that uses a rent-a-bank scheme, coordinating with banks in states that allow high interest loans in a scheme to try to skirt state and local laws that do have limits on high interest rates loans. Its business model is focused on lending to consumers with below-average credit. Though OppFi is not a licensed moneylender in the District of Columbia, it advertised, offered, provided, and serviced loan products, called OppLoans, to thousands of District residents. OppFi partnered with FinWise Bank, a state-chartered bank in Utah (which allows high interest loans). But OppFi ultimately controls these loans, taking on the risks and reaping the profits.
The Opportunity Financial prosecution is one of several similar predatory lending cases pursued by Karl Racine’s AG office. It is an example of a case where the government prosecutor most likely to pursue the interests of DC residents is the DC AG’s office. Consequently, it is an example of a kind of case that deserves particular high praise because of its focus on local issues, as opposed to national issues that draw the attention of many states and federal enforcers.
Posting by Don Allen Resnikoff
DC AG Racine’s December 22, 2022 Newsletter is a farewell statement that celebrates his successes as the first elected AG in DC. Racine’s accomplishments are impressive, and have earned him favorable media attention.
I have particular admiration for those AG cases that focus on local issues as opposed to national issues that draw the attention of many state and federal enforcers.
AG Racine focused on important local issues in cases his office brought supporting DC’s 24% interest rate cap on consumer loans.
As a general matter, interest rate caps are favored by consumer advocates, who say that rate caps imposed by local legislators protect consumers from predatory lenders. So-called “pay-day” lenders are often pointed to as frequent predatory lenders. Bankers and other lenders often oppose legislated interest rate caps, because they interfere with creditor decision making, and may harm borrowers who have a reasonable demand for high interest rate loans.
One such case involving violation of DC’s interest rate capwas described in an October, 2022 posting from the AG’s office. The posting explained said that OAG sued Opportunity Financial (OppFi) in 2021 for deceptively marketing high interest loans to DC consumers that were more than eight times higher than the DC rate cap. In 2021, the company agreed to pay $1.5 million to refund over 4,000 District consumers who were charged exploitive interest rates by the company, waive over $640,000 in interest owed by those consumers, and pay $250,000 to the District in penalties.
In an online posting, the AG’s office explained that Opportunity Financial misrepresented its high interest loans as fast and easy cash and falsely claimed that its loans would help struggling consumers build credit. Instead, from at least 2018 until May 2020, “OppFi” provided loans to most District residents at a 160% APR—more than seven times the District’s 24% rate cap. Most states, like DC, protect their residents from predatory lenders through state laws that prohibit charging exploitative interest rates, but some states do not.
The AG’s office explains that OppFi is an online lender that uses a rent-a-bank scheme, coordinating with banks in states that allow high interest loans in a scheme to try to skirt state and local laws that do have limits on high interest rates loans. Its business model is focused on lending to consumers with below-average credit. Though OppFi is not a licensed moneylender in the District of Columbia, it advertised, offered, provided, and serviced loan products, called OppLoans, to thousands of District residents. OppFi partnered with FinWise Bank, a state-chartered bank in Utah (which allows high interest loans). But OppFi ultimately controls these loans, taking on the risks and reaping the profits.
The Opportunity Financial prosecution is one of several similar predatory lending cases pursued by Karl Racine’s AG office. It is an example of a case where the government prosecutor most likely to pursue the interests of DC residents is the DC AG’s office. Consequently, it is an example of a kind of case that deserves particular high praise because of its focus on local issues, as opposed to national issues that draw the attention of many states and federal enforcers.
Posting by Don Allen Resnikoff
DC AG Racine's recent antitrust actions
Last month, a posting by the DC AG’s office reviewed some of AG Racine’s major antitrust efforts. The posting offers an interesting and impressive list of antitrust actions: I’ve repeated the DCAG review below.
Many of the cases involve issues of national or international scope, such as Amazon allegedly fixing online retail prices through contract provisions that prevent third-party sellers from offering their products on other platforms; and Facebook’s allegedly anticompetitive acquisitions and exclusionary conduct.
The proposed Albertson supermarket merger with Kroger is an example of a matter of national scope with some important local aspects. Does it matter whether after a merger the Harris Teeter groceries in DC may no longer be in competition with some local Safeway stores? That is a local question, and involves issues of local geography and shopping patterns that the local AG should be in a particularly good position to analyze.
That said, my experience in DC Government antitrust enforcement suggests that a challenging aspect of DC antitrust enforcement is successfully bringing limited local resources to bear on local problems. Does lack of competition in gasoline wholesaling in DC result in artificially high pricing for retail gasoline in DC? That is an important local question that puts a heavy demand on limited local government capacities, and is not likely to interest enforcers outside of DC.
***
The DC AG’s review of recent past AG antitrust action is at https://oag.dc.gov/release/ag-racine-sues-albertsons-and-kroger-federal-court
The text follows
OAG has a long record of holding companies accountable for antitrust violations. In May 2021, OAG filed a lawsuit against Amazon alleging that the company is fixing online retail prices through contract provisions that prevent third-party sellers to offer their products on other platforms. https://oag.dc.gov/release/ag-racine-files-antitrust-lawsuit-against-amazon
OAG also joined a coalition of attorneys general in filing a lawsuit against Facebook Inc. in December 2020, alleging that the company has engaged in a pattern of illegal acquisitions and exclusionary conduct to stifle competition and maintain its overwhelming market dominance. https://oag.dc.gov/release/ag-racine-joins-multistate-lawsuit-seeking-end
In addition, OAG also joined a multistate group of attorneys general in suing Google, Inc. in December 2020 for exclusionary conduct to maintain or establish its dominance in several product markets. https://oag.dc.gov/release/ag-racine-joins-multistate-lawsuit-seeking-end-0oogle, Inc.
And OAG sued Facebook over the Cambridge Analytica scandal. https://oag.dc.gov/release/ag-racine-sues-facebook-failing-protect-millions
OAG joined in multistate settlements with several banks, including Deutsche Bank, Barclays, and UBS, worth hundreds of millions of dollars, for fraudulent and anticompetitive conduct during the 2007-2008 financial crisis and its aftermath.
OAG is actively litigating antitrust cases in the pharmaceutical industry, including a multistate antitrust lawsuit against the manufacturers of Suboxone, a prescription drug used to treat opioid addiction, for engaging in an anticompetitive scheme to block generic competition for Suboxone. https://oag.dc.gov/release/ag-racine-announces-68-million-multistate
OAG is also litigating multistate lawsuits against several manufacturers of generic drugs for allegedly conspiring to fix drug prices, thwart competition, and engage in illegal and anticompetitive trade practices with regard to more than 40 drugs. https://oag.dc.gov/release/ag-racine-joins-coalition-filing-third-lawsuit
Additionally, OAG has opposed anti-competitive mergers such as those between T-Mobile and Sprint, Anthem-Cigna and Aetna-Humana, Staples and Office Depot, Sysco and U.S. Foods, and fantasy sports sites DraftKings and FanDuel.
Last week, AG Racine led a bipartisan group of state attorneys general calling on Albertsons to stop the payout until the proposed merger’s impact can be fully assessed. https://oag.dc.gov/release/ag-racine-leads-bipartisan-group-ags-calling
Posting and comment by Don Allen Resnikoff
Are local DC gas wholesalers and retailers gouging on price, even as prices decline?
Does worry about that possibility of artificially high prices disappear because retail prices in DC have substantially declined recently?
This writing reflects continuing concern that “companies running gas stations and setting prices at the pump” should “bring down the price you are charging at the pump to reflect the cost you’re paying for the product.” See President Biden’s thoughts about that idea at https://nypost.com/2022/07/05/biden-blasting-gas-stations-economic-illiteracy-or-shameless-demagoguery/
Now as before, the relevant economic analysis turns on straightforward facts. In the District of Columbia, Gas Buddy reports for 12/12/2022 that several stations in DC are charging as little as $3.09 per gallon of regular gas (sometimes subject to conditions, like paying cash), while other stations in DC are charging prices of $3.50 and higher. See USA and Local National Gas Station Price Heat Map - GasBuddy.com and Best Gas Prices & Local Gas Stations in Washington DC (gasbuddy.com)
Here are some low prices listed by GasBuddy:
Costco
2441 Market St NE
Washington, DC
$3.09
CITGO
3820 Minnesota Ave NE
Washington, DC
$3.09
BP
4400 Benning Rd NE
Washington, DC
$3.15
Shell
3830 Minnesota Ave NE
Washington, DC
$3.15
CASH
BP
7000 BLAIR RD NW
Washington, DC
$3.19
CASH
Here are some high prices shown by GasBuddy’s map (There is no list, probably because no one needs a list of expensive gas stations):
Shell
Shell
4900 Wisconsin Ave NW
Washington, DC
$3.85
Exxon
(17)
4244 Wisconsin Ave NW
Washington, DC
$3.85
Exxon (11)
3540 14th St NW
Washington, DC $3.49
Why some gas stations charge more and others less is a matter for speculation, but in the past some people have offered analysis. A 2013 Washington Post article by Mike DeBonis explains that one corporate wholesaler group had exclusive supply agreements with roughly 60 percent of the 107 gasoline retailers operating in the city, according to a lawsuit brought by the DC Attorney General: “As a result of these agreements, the [Eyob Mamo connected companies] set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents and others … of the benefits of competition.” https://www.washingtonpost.com/blogs/mike-debonis/wp/2013/08/27/d-c-attorney-general-takes-new-aim-at-gas-mogul-joe-mamo/
Can we say with confidence that some DC gasoline station retailers and wholesalers have behaved badly, or illegally, or that government intervention is needed? Not necessarily. It can be argued that posted prices and Gas Buddy reporting means that competition can work, and drivers can drive a few minutes to benefit from lower prices. Also, perhaps rents or other costs of doing business explain retail price discrepancies.
Direct or indirect power over retail prices by a dominant local wholesaler may or may not be a basis for a finding of bad or illegal behavior, depending on the fact details.
But, once again, even the simple set of facts from Gas Buddy suggests an idea worth exploring about the profits being made by those stations charging $3.50 per gallon for regular gas rather than, say, $3.15. (Even a person weak in math will see that the difference between $3.15 and $3.50 is about 11%.) Unless the $3.50 stations have decided to buy gas from local wholesale terminals at much higher prices than the $3.15 gas stations, or have unusually high overhead costs, the $3.50 gas stations might be making about 35 cents more per gallon than other stations. The Economics 101 principle in play here is that more may actually be more.
There is relevant history that bears repetition concerning DC gas prices. In 2020 DC AG Racine sued Capitol Petroleum, a major DC gasoline seller, alleging price gouging. Borrowing from the wording of the AG’s press release, Racine filed a lawsuit against Capitol Petroleum Group, LLC (CPG), a leading retailer and distributor of gasoline in the District of Columbia, as well as several affiliated companies, for illegal price gouging during the District’s COVID-19 emergency. The Office of the Attorney General’s (OAG) investigation revealed that even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District. OAG also alleged that CPG and its affiliates, Anacostia Realty, LLC, and DAG Petroleum Suppliers, LLC, unfairly increased profit margins they earned on gas distribution to other retailers. “With this lawsuit, OAG is seeking a court order to stop CPG from violating the District’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices, and civil penalties.”
Whether illegal price gouging as alleged by the AG has actually occurred is a technical legal question beyond the scope of this brief note. The point here is simply that great price discrepancies raise concerns that are reasonable for an AG to explore. For those interested in the legal issues, the DC AG’s price gouging complaint is available at: https://oag.dc.gov/sites/default/files/2020-11/Capitol-Petroleum-Group-Complaint.pdf
With regard to the 2013 DC AG lawsuit mentioned above, Washington Post reporter Mike DeBonis explained that the lawsuit targeted “exclusive-supply agreements” between the most powerful local gasoline wholesaler and the independent dealers who operated wholesaler-owned stations. ExxonMobil was also named as a defendant in the case, as it established the agreements in question before selling 29 stations to wholesaler-station operator Mamo in 2009, and could still enforce them through its supply contracts with distributors.
The 2013 AG lawsuit never resulted in an enforceable judgment in DC’s favor, but instead followed a tangled procedural history that is beyond the scope of this note, as are the precise merits or demerits of the case.
But the bottom-line point is clear. It is reasonable to worry even as COVID concerns and gas prices decline that some DC gas sellers are selling gas at retail prices that are significantly more above cost than are other retailers. Or that they may be doing it because of issues of market power. That is, they do it because they can.
The suggestion here is that It is reasonable for law enforcers to remain worried even as retail gasoline prices decline, so that public concerns diminish.
In short, it is neither demagoguery nor a failure to grasp Econ 101 principles to think that State Attorneys General should be concerned and conduct investigations when some local gas retailers charge significantly more than others, or when retail prices do not decline to an extent that fully reflects lower supply costs, or when local wholesalers appear to directly or indirectly control retail prices of a high percentage of retailers.
by Don Allen Resnikoff, who is responsible for any opinions expressed
Does worry about that possibility of artificially high prices disappear because retail prices in DC have substantially declined recently?
This writing reflects continuing concern that “companies running gas stations and setting prices at the pump” should “bring down the price you are charging at the pump to reflect the cost you’re paying for the product.” See President Biden’s thoughts about that idea at https://nypost.com/2022/07/05/biden-blasting-gas-stations-economic-illiteracy-or-shameless-demagoguery/
Now as before, the relevant economic analysis turns on straightforward facts. In the District of Columbia, Gas Buddy reports for 12/12/2022 that several stations in DC are charging as little as $3.09 per gallon of regular gas (sometimes subject to conditions, like paying cash), while other stations in DC are charging prices of $3.50 and higher. See USA and Local National Gas Station Price Heat Map - GasBuddy.com and Best Gas Prices & Local Gas Stations in Washington DC (gasbuddy.com)
Here are some low prices listed by GasBuddy:
Costco
2441 Market St NE
Washington, DC
$3.09
CITGO
3820 Minnesota Ave NE
Washington, DC
$3.09
BP
4400 Benning Rd NE
Washington, DC
$3.15
Shell
3830 Minnesota Ave NE
Washington, DC
$3.15
CASH
BP
7000 BLAIR RD NW
Washington, DC
$3.19
CASH
Here are some high prices shown by GasBuddy’s map (There is no list, probably because no one needs a list of expensive gas stations):
Shell
Shell
4900 Wisconsin Ave NW
Washington, DC
$3.85
Exxon
(17)
4244 Wisconsin Ave NW
Washington, DC
$3.85
Exxon (11)
3540 14th St NW
Washington, DC $3.49
Why some gas stations charge more and others less is a matter for speculation, but in the past some people have offered analysis. A 2013 Washington Post article by Mike DeBonis explains that one corporate wholesaler group had exclusive supply agreements with roughly 60 percent of the 107 gasoline retailers operating in the city, according to a lawsuit brought by the DC Attorney General: “As a result of these agreements, the [Eyob Mamo connected companies] set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents and others … of the benefits of competition.” https://www.washingtonpost.com/blogs/mike-debonis/wp/2013/08/27/d-c-attorney-general-takes-new-aim-at-gas-mogul-joe-mamo/
Can we say with confidence that some DC gasoline station retailers and wholesalers have behaved badly, or illegally, or that government intervention is needed? Not necessarily. It can be argued that posted prices and Gas Buddy reporting means that competition can work, and drivers can drive a few minutes to benefit from lower prices. Also, perhaps rents or other costs of doing business explain retail price discrepancies.
Direct or indirect power over retail prices by a dominant local wholesaler may or may not be a basis for a finding of bad or illegal behavior, depending on the fact details.
But, once again, even the simple set of facts from Gas Buddy suggests an idea worth exploring about the profits being made by those stations charging $3.50 per gallon for regular gas rather than, say, $3.15. (Even a person weak in math will see that the difference between $3.15 and $3.50 is about 11%.) Unless the $3.50 stations have decided to buy gas from local wholesale terminals at much higher prices than the $3.15 gas stations, or have unusually high overhead costs, the $3.50 gas stations might be making about 35 cents more per gallon than other stations. The Economics 101 principle in play here is that more may actually be more.
There is relevant history that bears repetition concerning DC gas prices. In 2020 DC AG Racine sued Capitol Petroleum, a major DC gasoline seller, alleging price gouging. Borrowing from the wording of the AG’s press release, Racine filed a lawsuit against Capitol Petroleum Group, LLC (CPG), a leading retailer and distributor of gasoline in the District of Columbia, as well as several affiliated companies, for illegal price gouging during the District’s COVID-19 emergency. The Office of the Attorney General’s (OAG) investigation revealed that even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District. OAG also alleged that CPG and its affiliates, Anacostia Realty, LLC, and DAG Petroleum Suppliers, LLC, unfairly increased profit margins they earned on gas distribution to other retailers. “With this lawsuit, OAG is seeking a court order to stop CPG from violating the District’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices, and civil penalties.”
Whether illegal price gouging as alleged by the AG has actually occurred is a technical legal question beyond the scope of this brief note. The point here is simply that great price discrepancies raise concerns that are reasonable for an AG to explore. For those interested in the legal issues, the DC AG’s price gouging complaint is available at: https://oag.dc.gov/sites/default/files/2020-11/Capitol-Petroleum-Group-Complaint.pdf
With regard to the 2013 DC AG lawsuit mentioned above, Washington Post reporter Mike DeBonis explained that the lawsuit targeted “exclusive-supply agreements” between the most powerful local gasoline wholesaler and the independent dealers who operated wholesaler-owned stations. ExxonMobil was also named as a defendant in the case, as it established the agreements in question before selling 29 stations to wholesaler-station operator Mamo in 2009, and could still enforce them through its supply contracts with distributors.
The 2013 AG lawsuit never resulted in an enforceable judgment in DC’s favor, but instead followed a tangled procedural history that is beyond the scope of this note, as are the precise merits or demerits of the case.
But the bottom-line point is clear. It is reasonable to worry even as COVID concerns and gas prices decline that some DC gas sellers are selling gas at retail prices that are significantly more above cost than are other retailers. Or that they may be doing it because of issues of market power. That is, they do it because they can.
The suggestion here is that It is reasonable for law enforcers to remain worried even as retail gasoline prices decline, so that public concerns diminish.
In short, it is neither demagoguery nor a failure to grasp Econ 101 principles to think that State Attorneys General should be concerned and conduct investigations when some local gas retailers charge significantly more than others, or when retail prices do not decline to an extent that fully reflects lower supply costs, or when local wholesalers appear to directly or indirectly control retail prices of a high percentage of retailers.
by Don Allen Resnikoff, who is responsible for any opinions expressed
Kovacic discusses FTC action against Microsoft on CNBC -- bold but underresourced
https://www.msn.com/en-us/foodanddrink/financenews/this-is-the-boldest-move-the-biden-administration-has-taken-to-police-mergers-says-fmr-ftc-chairman/vi-AA1541X0?category=foryou
The Kovacic comment underscores the need for more government antitrust resources. The resources of state level enforcers are important. During the USDOJ action against Microsoft in the 1990s early 200os period, state antitrust enforcers played a major role.
https://www.msn.com/en-us/foodanddrink/financenews/this-is-the-boldest-move-the-biden-administration-has-taken-to-police-mergers-says-fmr-ftc-chairman/vi-AA1541X0?category=foryou
The Kovacic comment underscores the need for more government antitrust resources. The resources of state level enforcers are important. During the USDOJ action against Microsoft in the 1990s early 200os period, state antitrust enforcers played a major role.
Dispositive motion will be heard 12/12/2022 in DC gun rights case
In a minute order entered on November 21, DC Judge Randolph D. Moss scheduled a hearing for December 12 on whether the plaintiffs in a pending DC gun rights case have standing to pursue their action challenging a DC law limiting guns in public transportation facilities. A Court decision that Plaintiffs lack standing could lead to dismissal of the litigation.
Plaintiffs are challenging enforcement of DC Code Section 7-2509.07(a)(6), which prohibits carrying handguns in public transportation vehicles and stations. The statute reflects an effort by the DC Council to limit guns in sensitive public spaces. Such limiting regulation arguably is permitted by the recent US Supreme Court decision in New York State Rifle & Pistol Association v. Bruen, 597 U.S. __, Case No. 20-843, slip op. (June 23, 2022). The US Supreme Court decision in Bruen expanded the right of gun owners to carry their guns into public spaces.
The question Judge Moss will focus on in the December 12 hearing is whether the injuries alleged by the gun owning Plaintiffs are sufficient to confer standing to sue. If not, that would be a reason for the Judge to dismiss the suit.
Posting by DAR
In a minute order entered on November 21, DC Judge Randolph D. Moss scheduled a hearing for December 12 on whether the plaintiffs in a pending DC gun rights case have standing to pursue their action challenging a DC law limiting guns in public transportation facilities. A Court decision that Plaintiffs lack standing could lead to dismissal of the litigation.
Plaintiffs are challenging enforcement of DC Code Section 7-2509.07(a)(6), which prohibits carrying handguns in public transportation vehicles and stations. The statute reflects an effort by the DC Council to limit guns in sensitive public spaces. Such limiting regulation arguably is permitted by the recent US Supreme Court decision in New York State Rifle & Pistol Association v. Bruen, 597 U.S. __, Case No. 20-843, slip op. (June 23, 2022). The US Supreme Court decision in Bruen expanded the right of gun owners to carry their guns into public spaces.
The question Judge Moss will focus on in the December 12 hearing is whether the injuries alleged by the gun owning Plaintiffs are sufficient to confer standing to sue. If not, that would be a reason for the Judge to dismiss the suit.
Posting by DAR
DCCRC Board member Naomi Claxton will testify on Thursday, December 8, 2022 before the Council of the District of Columbia COMMITTEE ON THE JUDICIARY & PUBLIC SAFETY N OTICE OF P UBLIC H EARING 1350 Pennsylvania Avenue, concerning the proposed “Sunshine in Litigation Act of 2022”
Virtual Hearing via Zoom To Watch Live: https://www.facebook.com/CMcharlesallen/
Councilmember and Chairperson Charles Allen's notice of the hearing explains that the stated purpose of Bill 24-0933, the “Sunshine in Litigation Act of 2022”, is to prohibit confidentiality agreements and protective orders in civil actions involving defective products or environmental conditions that are likely to cause significant harm, and to allow members of the public to challenge agreements and orders that violate the act.
***
Statement on Behalf of The DC Consumer Rights Coalition by and through Board Member Tracy Rezvani:
The DC Consumer Rights Coalition (DCCRC) is a non-profit organization that advances economic rights and financial inclusion of DC residents through research, education, advocacy, and community organization. DCCRC works with individual consumer advocates, poverty and consumer organizations, and grassroots members to press for policies that protect the District's vulnerable residents. DCCRC also educates individuals on consumer issues and consumer rights, advocates for consumer interests, studies critical consumer issues, and works to build the consumer movement.
My name is Tracy Rezvani and I am a board member and a consumer protection attorney who has represented individuals, businesses, and non-profits in class, commercial, consumer, false advertising, mass torts, and whistleblower litigation for over twenty-five years. As a consumer protection attorney, I have seen case settlements hinge on the scope of the confidentiality clause time and again. Trade secrets and personal identifying information aside, there is no immutable right for corporations to give themselves the upper hand in litigation at the expense of the public.
Statement by the DC Consumer Rights Coalition in Support of the "Sunshine in Litigation Act of 2022":
The DC Consumer Rights Coalition (DCCRC) agrees with a fundamental tenet of the administration of justice in democratic societies: court proceedings should be conducted in public view. Public access to judicial records is a vital aspect of that principle. That is especially important in cases that have effects that extend beyond the parties to the case-in particular, cases that involve defective products, widespread fraud, or dangerous environmental conditions that pose dangers to the general public. That principle is ignored when a court agrees to the parties' request to hide those dangers from the public, by allowing overbroad confidentiality clauses in settlement agreements, or by issuing overbroad protective orders.
DCCRC's advocacy of public access to judicial records has included, among other things, hosting public programs on strategies lawyers can use to oppose overbroad confidentiality clauses in court-approved settlement agreements, and to oppose issuing overbroad court-ordered protective orders; a podcast for the public describing the putative effect of the Sunshine Act for DC consumers; and a webinar for the local legal community to explain the scope and purpose of the Act.
As an aspect of its broader advocacy of public access to judicial records, the DC Consumer Rights Coalition joins other public interest organizations in supporting the "Sunshine in Litigation Act of 2022" introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmembers Allen, Bonds, Lewis George, Gray, and White. We thank our fellow consumer advocates at the National Consumers League, Public Justice and Consumer Reports for the advocacy and efforts on these issues.
Court-permitted secrecy has caused harm in an array of cases, such as cases related to the opioid epidemic. As pointed out by Councilmember Cheh in her letter submitting the proposed D.C. Sunshine in Litigation Act of 2022, individuals and governments began filing cases many years ago charging opioid manufacturers with intentionally misleading doctors about the dangers of prescription opioids. However, because judges in these cases agreed to the parties' request to require that the court records remain under seal, the clear evidence of the manufacturers' wrongdoing and of the dangers of opioids uncovered by the plaintiff parties was kept from the public, causing great harm.
Court sanctioned secrecy in the opioid or Essure cases, and other cases involving danger to consumers, hampers effective government oversight and enforcement. It also makes it needlessly difficult for other individuals who have been similarly harmed to get justice. In the absence of regulatory intervention or a class action, obtaining justice often means duplicating efforts to build a new case from scratch. That leads to the inefficiency of duplicative court cases with varying results.
Councilmember Cheh intends that the proposed Act would prohibit parties and courts from keeping information related to public dangers secret. It still allows courts to protect sensitive items such as personal identifying, medical, and financial information, and company trade secrets. But its goal is to ensure that evidence that has been disclosed in a matter in litigation and shows evidence of an ongoing danger to the public may not be the subject of a protective order.
Several other states, including Florida, Louisiana, Virginia, Arkansas, and Washington, have already adopted similar laws.
Opponents of "sunshine" laws argue that settlements might be harder if companies cannot settle in a way that keeps the evidence of consumer harm secret. In some jurisdictions that have enacted such laws, there is evidence that such acts do not impact a company's willingness to settle cases. Given the impact of public harm cases, many of which show corporations who have had early knowledge of the dangers of their products, it is clear that the government must act and cannot wait for corporations to self-regulate. A company that is causing harm must not be permitted to use the costs of litigation to coerce a victim to agree to keep that harm secret from the public as the price for their own justice.
In summary, DCCRC agrees with the National Consumers' League and Public Justice's position that many lives could be saved, and much suffering prevented by removing the ability for corporations to demand secrecy orders in court settlements that hide information about product issues harmful to consumers. For these reason we join other public interest organizations in supporting the "Sunshine in Litigation Act of 2022" introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmembers Allen Bonds, Lewis George, Gray, and White.
/s/ Tracy Rezvani
Tracy Rezvani
DC Consumer Rights Coalition 5335 Wisconsin Avenue, NW, Suite 440,
Washington, DC 20015.
Virtual Hearing via Zoom To Watch Live: https://www.facebook.com/CMcharlesallen/
Councilmember and Chairperson Charles Allen's notice of the hearing explains that the stated purpose of Bill 24-0933, the “Sunshine in Litigation Act of 2022”, is to prohibit confidentiality agreements and protective orders in civil actions involving defective products or environmental conditions that are likely to cause significant harm, and to allow members of the public to challenge agreements and orders that violate the act.
***
Statement on Behalf of The DC Consumer Rights Coalition by and through Board Member Tracy Rezvani:
The DC Consumer Rights Coalition (DCCRC) is a non-profit organization that advances economic rights and financial inclusion of DC residents through research, education, advocacy, and community organization. DCCRC works with individual consumer advocates, poverty and consumer organizations, and grassroots members to press for policies that protect the District's vulnerable residents. DCCRC also educates individuals on consumer issues and consumer rights, advocates for consumer interests, studies critical consumer issues, and works to build the consumer movement.
My name is Tracy Rezvani and I am a board member and a consumer protection attorney who has represented individuals, businesses, and non-profits in class, commercial, consumer, false advertising, mass torts, and whistleblower litigation for over twenty-five years. As a consumer protection attorney, I have seen case settlements hinge on the scope of the confidentiality clause time and again. Trade secrets and personal identifying information aside, there is no immutable right for corporations to give themselves the upper hand in litigation at the expense of the public.
Statement by the DC Consumer Rights Coalition in Support of the "Sunshine in Litigation Act of 2022":
The DC Consumer Rights Coalition (DCCRC) agrees with a fundamental tenet of the administration of justice in democratic societies: court proceedings should be conducted in public view. Public access to judicial records is a vital aspect of that principle. That is especially important in cases that have effects that extend beyond the parties to the case-in particular, cases that involve defective products, widespread fraud, or dangerous environmental conditions that pose dangers to the general public. That principle is ignored when a court agrees to the parties' request to hide those dangers from the public, by allowing overbroad confidentiality clauses in settlement agreements, or by issuing overbroad protective orders.
DCCRC's advocacy of public access to judicial records has included, among other things, hosting public programs on strategies lawyers can use to oppose overbroad confidentiality clauses in court-approved settlement agreements, and to oppose issuing overbroad court-ordered protective orders; a podcast for the public describing the putative effect of the Sunshine Act for DC consumers; and a webinar for the local legal community to explain the scope and purpose of the Act.
As an aspect of its broader advocacy of public access to judicial records, the DC Consumer Rights Coalition joins other public interest organizations in supporting the "Sunshine in Litigation Act of 2022" introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmembers Allen, Bonds, Lewis George, Gray, and White. We thank our fellow consumer advocates at the National Consumers League, Public Justice and Consumer Reports for the advocacy and efforts on these issues.
Court-permitted secrecy has caused harm in an array of cases, such as cases related to the opioid epidemic. As pointed out by Councilmember Cheh in her letter submitting the proposed D.C. Sunshine in Litigation Act of 2022, individuals and governments began filing cases many years ago charging opioid manufacturers with intentionally misleading doctors about the dangers of prescription opioids. However, because judges in these cases agreed to the parties' request to require that the court records remain under seal, the clear evidence of the manufacturers' wrongdoing and of the dangers of opioids uncovered by the plaintiff parties was kept from the public, causing great harm.
Court sanctioned secrecy in the opioid or Essure cases, and other cases involving danger to consumers, hampers effective government oversight and enforcement. It also makes it needlessly difficult for other individuals who have been similarly harmed to get justice. In the absence of regulatory intervention or a class action, obtaining justice often means duplicating efforts to build a new case from scratch. That leads to the inefficiency of duplicative court cases with varying results.
Councilmember Cheh intends that the proposed Act would prohibit parties and courts from keeping information related to public dangers secret. It still allows courts to protect sensitive items such as personal identifying, medical, and financial information, and company trade secrets. But its goal is to ensure that evidence that has been disclosed in a matter in litigation and shows evidence of an ongoing danger to the public may not be the subject of a protective order.
Several other states, including Florida, Louisiana, Virginia, Arkansas, and Washington, have already adopted similar laws.
Opponents of "sunshine" laws argue that settlements might be harder if companies cannot settle in a way that keeps the evidence of consumer harm secret. In some jurisdictions that have enacted such laws, there is evidence that such acts do not impact a company's willingness to settle cases. Given the impact of public harm cases, many of which show corporations who have had early knowledge of the dangers of their products, it is clear that the government must act and cannot wait for corporations to self-regulate. A company that is causing harm must not be permitted to use the costs of litigation to coerce a victim to agree to keep that harm secret from the public as the price for their own justice.
In summary, DCCRC agrees with the National Consumers' League and Public Justice's position that many lives could be saved, and much suffering prevented by removing the ability for corporations to demand secrecy orders in court settlements that hide information about product issues harmful to consumers. For these reason we join other public interest organizations in supporting the "Sunshine in Litigation Act of 2022" introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmembers Allen Bonds, Lewis George, Gray, and White.
/s/ Tracy Rezvani
Tracy Rezvani
DC Consumer Rights Coalition 5335 Wisconsin Avenue, NW, Suite 440,
Washington, DC 20015.
How Banks and Private Equity Cash In When Patients Can’t Pay Their Medical Bills
Excerpt from https://khn.org/news/article/how-banks-and-private-equity-cash-in-when-patients-cant-pay-their-medical-bills/?utm_campaign=KFF-2022
As Americans are overwhelmed with medical bills, patient financing is now a multibillion-dollar business, with private equity and big banks lined up to cash in when patients and their families can’t pay for care. By one estimate from research firm IBISWorld, profit margins top 29% in the patient financing industry, seven times what is considered a solid hospital margin.
Hospitals and other providers, which historically put their patients in interest-free payment plans, have welcomed the financing, signing contracts with lenders and enrolling patients in financing plans with rosy promises about convenient bills and easy payments.
For patients, the payment plans often mean something more ominous: yet more debt. Millions of people are paying interest on these plans.
Excerpt from https://khn.org/news/article/how-banks-and-private-equity-cash-in-when-patients-cant-pay-their-medical-bills/?utm_campaign=KFF-2022
As Americans are overwhelmed with medical bills, patient financing is now a multibillion-dollar business, with private equity and big banks lined up to cash in when patients and their families can’t pay for care. By one estimate from research firm IBISWorld, profit margins top 29% in the patient financing industry, seven times what is considered a solid hospital margin.
Hospitals and other providers, which historically put their patients in interest-free payment plans, have welcomed the financing, signing contracts with lenders and enrolling patients in financing plans with rosy promises about convenient bills and easy payments.
For patients, the payment plans often mean something more ominous: yet more debt. Millions of people are paying interest on these plans.
Should national crypto laws look lke New York's?
I watched the recent two hour Brookings session on crypto regulation (still available at https://youtu.be/Q4telYRIwn) and came to the conclusion that New York is ahead of other States and the federal government concerning regulation of crypto companies liked the recently failed FTX. To New York's credit, it did not approve FTX operation in New York, so New York residents were insulated from harm from FTX. That is not to say that possible criminal activity sounding in fraud would have been prevented had FTX been subject to New York's regulatory scheme.
The gist of the story of New York as local regulatory hero is well captured in a story by reporter David Attlee at US national crypto laws should look like New York’s, says state regulator (cointelegraph.com) https://cointelegraph.com/news/us-national-crypto-laws-should-look-like-new-york-s-says-state-regulator:
The superintendent of the New York Department of Financial Services (DFS) joined a nationwide regulatory discussion in the aftermath of the FTX collapse with a fresh take. Adrienne Harris believes that any federal crypto legislation to come should not override state regulatory regimes.
During her speech under the headline “Digital asset regulation: The state perspective,” Harris proposed that lawmakers in Washington take a closer look at the New York state regulatory regime:
“We would like for there to be a framework nationally that looks like what New York has, because I think it is proving itself to be a very robust and sustainable regime.”There is a need for more, not less, regulation, though, Harris added. She highlighted the extensive registration process in New York, which includes the assessment of the company’s organizational structure, the fitness of its executives, financial statements, and Anti-Money Laundering and Know Your Customer regimes as the guarantor of investors’ financial safety.
During the same panel, Harris’s colleague, NYDFS virtual currency chief Peter Marton, reminded the public that FTX has never been granted a BitLicense to operate in the state.
Introduced in 2015, the New York state BitLicense is notoriously difficult to obtain and drew harsh criticism even from New York City Mayor Eric Adams, who has been planning to make NYC the “center of the cryptocurrency industry” for a while.
In June 2022, the DFS released regulatory guidance for United States dollar-backed stablecoins. Per the framework, a stablecoin must be fully backed by reserves as of the end of every business day and the issuer must have a redemption policy approved in advance by the DFS that gives the holder the right to redeem the stablecoin for U.S. dollars.
I watched the recent two hour Brookings session on crypto regulation (still available at https://youtu.be/Q4telYRIwn) and came to the conclusion that New York is ahead of other States and the federal government concerning regulation of crypto companies liked the recently failed FTX. To New York's credit, it did not approve FTX operation in New York, so New York residents were insulated from harm from FTX. That is not to say that possible criminal activity sounding in fraud would have been prevented had FTX been subject to New York's regulatory scheme.
The gist of the story of New York as local regulatory hero is well captured in a story by reporter David Attlee at US national crypto laws should look like New York’s, says state regulator (cointelegraph.com) https://cointelegraph.com/news/us-national-crypto-laws-should-look-like-new-york-s-says-state-regulator:
The superintendent of the New York Department of Financial Services (DFS) joined a nationwide regulatory discussion in the aftermath of the FTX collapse with a fresh take. Adrienne Harris believes that any federal crypto legislation to come should not override state regulatory regimes.
During her speech under the headline “Digital asset regulation: The state perspective,” Harris proposed that lawmakers in Washington take a closer look at the New York state regulatory regime:
“We would like for there to be a framework nationally that looks like what New York has, because I think it is proving itself to be a very robust and sustainable regime.”There is a need for more, not less, regulation, though, Harris added. She highlighted the extensive registration process in New York, which includes the assessment of the company’s organizational structure, the fitness of its executives, financial statements, and Anti-Money Laundering and Know Your Customer regimes as the guarantor of investors’ financial safety.
During the same panel, Harris’s colleague, NYDFS virtual currency chief Peter Marton, reminded the public that FTX has never been granted a BitLicense to operate in the state.
Introduced in 2015, the New York state BitLicense is notoriously difficult to obtain and drew harsh criticism even from New York City Mayor Eric Adams, who has been planning to make NYC the “center of the cryptocurrency industry” for a while.
In June 2022, the DFS released regulatory guidance for United States dollar-backed stablecoins. Per the framework, a stablecoin must be fully backed by reserves as of the end of every business day and the issuer must have a redemption policy approved in advance by the DFS that gives the holder the right to redeem the stablecoin for U.S. dollars.
WSJ: Local prosecutors may charge crypto execs
After years of debate about the need for government regulation of crypto currency to protect consumers, the recent collapse of the FTX exchange has changed part of the discussion of crypto to the possibility of local prosecution of executives. Following is an excerpt from a WSJ article on the point. [FTX, Sam Bankman-Fried Sit in the Crosshairs of U.S. Prosecutors - WSJ https://www.wsj.com/articles/ftx-sam-bankman-fried-sit-in-the-crosshairs-of-u-s-prosecutors-11668398012?mod=hp_lead_pos1 (paywall)]
The Manhattan U.S. attorney’s office is investigating FTX’s collapse, according to people familiar with the matter. One focus for prosecutors, at least initially, is likely to be examining reports that FTX lent customer funds to Alameda Research, a crypto-trading firm that traded on FTX and other exchanges. FTX founder Sam Bankman-Fried, who resigned as chief executive on Friday, also founded and owns Alameda Research.
* * *
Using customer funds for proprietary trading or lending them out—without an investor’s consent—is generally forbidden in the regulated securities and derivatives markets.
* * *
In the unregulated crypto market, no such customer-protection rules exist. Still, using customer funds for a purpose that wasn’t disclosed can constitute fraud or embezzlement, according to former prosecutors and other legal experts.
“What this will boil down to is, were there deliberate lies to convince depositors or investors to part with their assets?” said Samson Enzer, a former Manhattan federal prosecutor. “Were there statements made that were false, and the maker of those statements knew they were false and made with the intent to deceive the investor?”
After years of debate about the need for government regulation of crypto currency to protect consumers, the recent collapse of the FTX exchange has changed part of the discussion of crypto to the possibility of local prosecution of executives. Following is an excerpt from a WSJ article on the point. [FTX, Sam Bankman-Fried Sit in the Crosshairs of U.S. Prosecutors - WSJ https://www.wsj.com/articles/ftx-sam-bankman-fried-sit-in-the-crosshairs-of-u-s-prosecutors-11668398012?mod=hp_lead_pos1 (paywall)]
The Manhattan U.S. attorney’s office is investigating FTX’s collapse, according to people familiar with the matter. One focus for prosecutors, at least initially, is likely to be examining reports that FTX lent customer funds to Alameda Research, a crypto-trading firm that traded on FTX and other exchanges. FTX founder Sam Bankman-Fried, who resigned as chief executive on Friday, also founded and owns Alameda Research.
* * *
Using customer funds for proprietary trading or lending them out—without an investor’s consent—is generally forbidden in the regulated securities and derivatives markets.
* * *
In the unregulated crypto market, no such customer-protection rules exist. Still, using customer funds for a purpose that wasn’t disclosed can constitute fraud or embezzlement, according to former prosecutors and other legal experts.
“What this will boil down to is, were there deliberate lies to convince depositors or investors to part with their assets?” said Samson Enzer, a former Manhattan federal prosecutor. “Were there statements made that were false, and the maker of those statements knew they were false and made with the intent to deceive the investor?”
DC AG Karl Racine sues Albertsons, Kroger over $4 billion dividend payout (cnbc.com)
https://www.cnbc.com/video/2022/11/03/dc-ag-karl-racine-sues-albertsons-kroger-over-4-billion-dividend-payout.html
Karl Racine, attorney general for Washington D.C., joins CNBC’s ‘Squawk Box’ to explain why he is suing to block Albertsons’ $4 billion dividend payout to shareholders ahead of its planned merger with Kroger.
https://www.cnbc.com/video/2022/11/03/dc-ag-karl-racine-sues-albertsons-kroger-over-4-billion-dividend-payout.html
Karl Racine, attorney general for Washington D.C., joins CNBC’s ‘Squawk Box’ to explain why he is suing to block Albertsons’ $4 billion dividend payout to shareholders ahead of its planned merger with Kroger.
DC AG Press release:
Racine Sues Albertsons and Kroger in Federal Court to Halt $4 Billion Cash Handout to Shareholders
November 2, 2022
Lawsuit and Temporary Restraining Order Follow Albertsons’ & Kroger’s’ Refusal to Stop the Private Equity Cash-Grab that Would Hamstring Albertsons’ Ability to Compete & Hurt Jobs of Safeway Employees
WASHINGTON, D.C. – Attorney General Karl A. Racine today announced a new lawsuit in federal court against Albertsons Companies Inc. and The Kroger Co. (Albertsons and Kroger) and is seeking a temporary restraining order (TRO) to stop a nearly $4 billion payout to Albertsons’ shareholders—a payout 57 times greater than the historic dividends Albertsons has provided—until a full review of their proposed merger is complete.
Albertsons owns Safeway, which operates 13 grocery stores across the District and is a critical source of affordable fresh food for District residents. Kroger owns Harris Teeter, also prevalent in the District and a close competitor to Safeway. This lawsuit follows AG Racine’s effort last week in leading a bipartisan group of state attorneys general to call on Albertsons to stop the payout until the proposed merger’s impact on workers, consumers, and competition can be fully assessed. Albertsons and Kroger told the attorneys general they would continue with the payout. On October 14, Albertsons announced the special dividend in direct connection with their merger with Kroger.
“Albertsons’ rush to secure a record-setting payday for its investors threatens District residents’ jobs and access to affordable food and groceries in neighborhoods where no alternatives exist,” said AG Racine. “This would have a particularly devastating impact on struggling people and families with access to fewer grocery stores during a time of historically high inflation. My office will use all our authority to stop this cash grab and protect District workers, families, and consumers.”
District residents depend on close and ready access to fresh food and also depend on employment by these companies. Organizations knowledgeable about labor conditions, including the UFCW local 400 (which represents Safeway workers in the District), have raised substantial concerns that this dividend will make it more difficult for Albertsons to compete for labor by reducing Albertsons’ ability to offer wage increases, pensions, or store improvements.
“As the union of grocery workers in the District of Columbia and beyond, we applaud Attorney General Karl Racine for taking action to halt the brazen attempt to loot Albertsons through an unprecedented special dividend payment,” said Mark Federici, President of United Food & Commercial Workers Local 400. “If allowed to occur, this payout will leave Albertsons largely depleted of liquid assets and put the livelihoods of countless grocery workers in jeopardy. Instead of using their increased profits on exorbitant executive compensation packages and enriching Wall Street investors, Albertsons should invest in the essential workers who make the grocery company successful in the first place – the same workers who risked their lives to keep food on America’s tables throughout the pandemic.”
On October 14, when Albertsons and Kroger announced their proposed merger, Albertsons also announced a “special dividend” to go out to shareholders on November 7 at $6.85 per share—totaling nearly $4 billion, which is more than two years of profits for the company. The “special dividend” risks significantly limiting their ability to operate and properly compete with Kroger and other supermarkets, which could seriously impact consumers, workers, and the grocery industry writ-large before regulators even have the chance to review the deal.
The giveaway to private equity would severely limit Albertsons’ cash-on-hand and deprive it of money needed to compete effectively. In the District, because of the essential and constant need for food, even a short-term reduction in competition in the District’s neighborhoods, especially those where Harris Teeter and Safeway compete, can result in higher prices and reductions in quality that can significantly harm consumers. This impact intensifies with inflation at historically high levels, as consumers’ grocery prices rose 12.2% from last summer to this summer, the biggest jump in over 40 years. Meanwhile, the private equity investors who control the grocery chains will have gained profits nine times larger than their original investments in 2006, if the merger is approved.
OAG’s allegations against Albertsons & Kroger
The Office of the Attorney General (OAG) alleges that the proposed special dividend would violate federal and District antitrust law because:
Last week, AG Racine also announced that OAG is starting a formal investigation into the Albertsons-Kroger proposed merger and its impact on workers and consumers, separate from the lawsuit being filed today. Kroger and Albertsons have more than 710,000 employees in nearly 5,000 stores across 48 states and D.C., reinforcing that all corners of the country would feel the effects of the proposed merger.
This lawsuit was joined by the Office of the Attorney General for the States of California and Illinois and filed under seal in the U.S. District Court for the District of Columbia.
This case was handled by Kathleen Konopka, Senior Advisor to the Attorney General for Competition Policy, Section Chief Adam Gitlin of OAG’s Public Integrity Section, Assistant Attorneys General William Margrabe, Geoffrey Comber, and Elizabeth Arthur, and Paralegals Jesse Zweben and Amanda Bangle.
Read the complaint.https://oag.dc.gov/sites/default/files/2022-11/DC%20et%20al%20v.%20Kroger%20et%20al%20Redacted%20Complaint.pdf
Racine Sues Albertsons and Kroger in Federal Court to Halt $4 Billion Cash Handout to Shareholders
November 2, 2022
Lawsuit and Temporary Restraining Order Follow Albertsons’ & Kroger’s’ Refusal to Stop the Private Equity Cash-Grab that Would Hamstring Albertsons’ Ability to Compete & Hurt Jobs of Safeway Employees
WASHINGTON, D.C. – Attorney General Karl A. Racine today announced a new lawsuit in federal court against Albertsons Companies Inc. and The Kroger Co. (Albertsons and Kroger) and is seeking a temporary restraining order (TRO) to stop a nearly $4 billion payout to Albertsons’ shareholders—a payout 57 times greater than the historic dividends Albertsons has provided—until a full review of their proposed merger is complete.
Albertsons owns Safeway, which operates 13 grocery stores across the District and is a critical source of affordable fresh food for District residents. Kroger owns Harris Teeter, also prevalent in the District and a close competitor to Safeway. This lawsuit follows AG Racine’s effort last week in leading a bipartisan group of state attorneys general to call on Albertsons to stop the payout until the proposed merger’s impact on workers, consumers, and competition can be fully assessed. Albertsons and Kroger told the attorneys general they would continue with the payout. On October 14, Albertsons announced the special dividend in direct connection with their merger with Kroger.
“Albertsons’ rush to secure a record-setting payday for its investors threatens District residents’ jobs and access to affordable food and groceries in neighborhoods where no alternatives exist,” said AG Racine. “This would have a particularly devastating impact on struggling people and families with access to fewer grocery stores during a time of historically high inflation. My office will use all our authority to stop this cash grab and protect District workers, families, and consumers.”
District residents depend on close and ready access to fresh food and also depend on employment by these companies. Organizations knowledgeable about labor conditions, including the UFCW local 400 (which represents Safeway workers in the District), have raised substantial concerns that this dividend will make it more difficult for Albertsons to compete for labor by reducing Albertsons’ ability to offer wage increases, pensions, or store improvements.
“As the union of grocery workers in the District of Columbia and beyond, we applaud Attorney General Karl Racine for taking action to halt the brazen attempt to loot Albertsons through an unprecedented special dividend payment,” said Mark Federici, President of United Food & Commercial Workers Local 400. “If allowed to occur, this payout will leave Albertsons largely depleted of liquid assets and put the livelihoods of countless grocery workers in jeopardy. Instead of using their increased profits on exorbitant executive compensation packages and enriching Wall Street investors, Albertsons should invest in the essential workers who make the grocery company successful in the first place – the same workers who risked their lives to keep food on America’s tables throughout the pandemic.”
On October 14, when Albertsons and Kroger announced their proposed merger, Albertsons also announced a “special dividend” to go out to shareholders on November 7 at $6.85 per share—totaling nearly $4 billion, which is more than two years of profits for the company. The “special dividend” risks significantly limiting their ability to operate and properly compete with Kroger and other supermarkets, which could seriously impact consumers, workers, and the grocery industry writ-large before regulators even have the chance to review the deal.
The giveaway to private equity would severely limit Albertsons’ cash-on-hand and deprive it of money needed to compete effectively. In the District, because of the essential and constant need for food, even a short-term reduction in competition in the District’s neighborhoods, especially those where Harris Teeter and Safeway compete, can result in higher prices and reductions in quality that can significantly harm consumers. This impact intensifies with inflation at historically high levels, as consumers’ grocery prices rose 12.2% from last summer to this summer, the biggest jump in over 40 years. Meanwhile, the private equity investors who control the grocery chains will have gained profits nine times larger than their original investments in 2006, if the merger is approved.
OAG’s allegations against Albertsons & Kroger
The Office of the Attorney General (OAG) alleges that the proposed special dividend would violate federal and District antitrust law because:
- Issuing the payout will render Albertsons less able to compete effectively with other supermarkets, including Kroger, and restrain trade in violation of Section 1 of the Sherman Act and D.C. Code § 28–4502.
- Albertson being strapped for cash will likely hamper its ability to advertise, provide promotions, price competitively, and maintain staffing and staff wages and benefits.
Last week, AG Racine also announced that OAG is starting a formal investigation into the Albertsons-Kroger proposed merger and its impact on workers and consumers, separate from the lawsuit being filed today. Kroger and Albertsons have more than 710,000 employees in nearly 5,000 stores across 48 states and D.C., reinforcing that all corners of the country would feel the effects of the proposed merger.
This lawsuit was joined by the Office of the Attorney General for the States of California and Illinois and filed under seal in the U.S. District Court for the District of Columbia.
This case was handled by Kathleen Konopka, Senior Advisor to the Attorney General for Competition Policy, Section Chief Adam Gitlin of OAG’s Public Integrity Section, Assistant Attorneys General William Margrabe, Geoffrey Comber, and Elizabeth Arthur, and Paralegals Jesse Zweben and Amanda Bangle.
Read the complaint.https://oag.dc.gov/sites/default/files/2022-11/DC%20et%20al%20v.%20Kroger%20et%20al%20Redacted%20Complaint.pdf
The video podcast featuring Kathleen Konopka, Office of the Attorney General for the District of Columbia, is
here:
https://youtu.be/xkGey9x0eq4
Kathleen discusses the affirmative antitrust civil enforcement case work of the DC Attorney General’s Office, both locally and with federal and state partners nationally.
here:
https://youtu.be/xkGey9x0eq4
Kathleen discusses the affirmative antitrust civil enforcement case work of the DC Attorney General’s Office, both locally and with federal and state partners nationally.
Sunshine Act video podcast
The link to the Sunshine Act video podcast is https://youtu.be/U_8QzcHo8cU It is an offering on the Youtube channel DCCRCORG. The podcast is the video recording of the program held on October 27 -- see below
The link to the Sunshine Act video podcast is https://youtu.be/U_8QzcHo8cU It is an offering on the Youtube channel DCCRCORG. The podcast is the video recording of the program held on October 27 -- see below
Canadian Watchdog Probes Price Hikes In Grocery Sector
CPI
-
October 24, 2022
Canada’s Competition Bureau is launching a study of grocery store competition in the country amid a growing outcry over surging prices for food.
While extreme weather, higher input costs, supply chain disruptions and Russia’s invasion of Ukraine may have contributed to higher food inflation, the antitrust watchdog said it wants to better understand whether lack of competition is also at play, according to a statement released Monday. [https://www.canada.ca/en/competition-bureau/news/2022/10/competition-bureau-to-study-competition-in-canadas-grocery-sector.html]
Canada’s food-retail sector is dominated by industry giants such as Loblaw Cos., owned by the billionaire Weston family, Nova Scotia-based Sobeys Inc. and Walmart.
Read also: Canadian Conservatives Vow To Crack Down On Food Price-Fixing [https://www.competitionpolicyinternational.com/canadian-conservatives-vow-to-crack-down-on-food-price-fixing/]
With inflation hovering at four-decade highs, Canadian consumers are facing a massive decline in their purchasing power. Last month, prices for food purchased from stores were up 11% from a year ago, the fastest annual gain since August 1981.
The bureau said more competition could mean “lower prices, more choices, and better convenience for consumers.”
The study will examine three main questions:
SOURCE Detroit News -- original sorce (paywall)
CPI
-
October 24, 2022
Canada’s Competition Bureau is launching a study of grocery store competition in the country amid a growing outcry over surging prices for food.
While extreme weather, higher input costs, supply chain disruptions and Russia’s invasion of Ukraine may have contributed to higher food inflation, the antitrust watchdog said it wants to better understand whether lack of competition is also at play, according to a statement released Monday. [https://www.canada.ca/en/competition-bureau/news/2022/10/competition-bureau-to-study-competition-in-canadas-grocery-sector.html]
Canada’s food-retail sector is dominated by industry giants such as Loblaw Cos., owned by the billionaire Weston family, Nova Scotia-based Sobeys Inc. and Walmart.
Read also: Canadian Conservatives Vow To Crack Down On Food Price-Fixing [https://www.competitionpolicyinternational.com/canadian-conservatives-vow-to-crack-down-on-food-price-fixing/]
With inflation hovering at four-decade highs, Canadian consumers are facing a massive decline in their purchasing power. Last month, prices for food purchased from stores were up 11% from a year ago, the fastest annual gain since August 1981.
The bureau said more competition could mean “lower prices, more choices, and better convenience for consumers.”
The study will examine three main questions:
- To what extent are higher grocery prices a result of changing competitive dynamics?
- What can we learn from steps that other countries have taken to increase competition in the sector?
- How can governments lower barriers to entry and expansion to stimulate competition for consumers?
SOURCE Detroit News -- original sorce (paywall)
The proposed DC Sunshine Act would restrain courts from entering orders restricting public disclosure of a public hazard at issue in civil actions involving defective products or dangerous environmental conditions.
This FREE remote Zoom program will be held October 27, 2022 12:15-1:45 PM To sign up for the program and get a Zoom link, send a request by email to: [email protected] with “Sunshine Act Program" in the subject line.
Hosted by the DC Consumer Rights Coalition and co-sponsored by the DC Bar’s Antitrust and Consumer Community. .
This FREE remote Zoom program will be held October 27, 2022 12:15-1:45 PM To sign up for the program and get a Zoom link, send a request by email to: [email protected] with “Sunshine Act Program" in the subject line.
Hosted by the DC Consumer Rights Coalition and co-sponsored by the DC Bar’s Antitrust and Consumer Community. .
DCBar DCCRC podcast:
Sunshine for Consumers: How Proposed DC Law can Limit Court Secrecy Orders about Dangerous Products
Speaker: Naomi Claxton
Listen to the episode and subscribe to Brief Encounters at https://anchor.fm/dcbar or wherever you access your podcasts.
Sunshine for Consumers: How Proposed DC Law can Limit Court Secrecy Orders about Dangerous Products
Speaker: Naomi Claxton
Listen to the episode and subscribe to Brief Encounters at https://anchor.fm/dcbar or wherever you access your podcasts.
DC Consumer Rights Coalition Remote Program announcement, Tuesday, October 18, 12:15 PM,
by Zoom
Kathleen Konopka, Deputy Attorney General, Office of the Attorney General for the District of Columbia,
will discuss the affirmative antitrust civil enforcement case work of the DC Attorney General’s Office, both locally and with federal and state partners nationally.
DC Bar Antitrust and Consumer Law Community members will participate and moderate
+++++
The free remote Zoom program will be held on Tuesday, October18, 2022 12:15-1:15 PM (duration 60 minutes)--
Hosted by DC Consumer Rights Coalition and co-sponsored by the DC Bar’s
Antitrust and Consumer Law Community.
.
This is a free program – there is no charge for attendance.
To sign up for the program and get a Zoom link, send a request by email to [email protected] with “Konopka program” in the subject line.
by Zoom
Kathleen Konopka, Deputy Attorney General, Office of the Attorney General for the District of Columbia,
will discuss the affirmative antitrust civil enforcement case work of the DC Attorney General’s Office, both locally and with federal and state partners nationally.
DC Bar Antitrust and Consumer Law Community members will participate and moderate
+++++
The free remote Zoom program will be held on Tuesday, October18, 2022 12:15-1:15 PM (duration 60 minutes)--
Hosted by DC Consumer Rights Coalition and co-sponsored by the DC Bar’s
Antitrust and Consumer Law Community.
.
This is a free program – there is no charge for attendance.
To sign up for the program and get a Zoom link, send a request by email to [email protected] with “Konopka program” in the subject line.
Fom Business Journals:
Oregon scores $1.1B in Medicaid funding for broader health care programs
Oregon's health care sector will be a proving ground for $1.1 billion in new federal Medicaid funding to address food and housing insecurity, reports Elizabeth Hayes of the Portland Business Journal.
A federal regulator approved a five-year waiver that broadens what Oregon is allowed to cover so it can test programs meant to address a wider range of health-related issues. Massachusetts also got the waiver.
The agreement gives these states more tools to tackle issues related to health care such as food and housing insecurity, said Oregon Health Authority Director Pat Allen.
Oregon scores $1.1B in Medicaid funding for broader health care programs
Oregon's health care sector will be a proving ground for $1.1 billion in new federal Medicaid funding to address food and housing insecurity, reports Elizabeth Hayes of the Portland Business Journal.
A federal regulator approved a five-year waiver that broadens what Oregon is allowed to cover so it can test programs meant to address a wider range of health-related issues. Massachusetts also got the waiver.
The agreement gives these states more tools to tackle issues related to health care such as food and housing insecurity, said Oregon Health Authority Director Pat Allen.
From DMN: California Governor Newsom Signs Bill to Assist Live Music Venues In the State
California Governor Newsom Signs Bill to Assist Live Music Venues (digitalmusicnews.com) https://www.digitalmusicnews.com/2022/09/27/california-bill-live-music-venues-newsom/?utm_source=Daily+Snapshot&utm_campaign=0d7c40ceb5-Daily_Snapshot_September_28_2022&utm_medium=email&utm_term=0_2fb43ebd24-0d7c40ceb5-13024573&mc_cid=0d7c40ceb5&mc_eid=83b90a0323
DAR: An idea for DC and other States?
California Governor Newsom Signs Bill to Assist Live Music Venues (digitalmusicnews.com) https://www.digitalmusicnews.com/2022/09/27/california-bill-live-music-venues-newsom/?utm_source=Daily+Snapshot&utm_campaign=0d7c40ceb5-Daily_Snapshot_September_28_2022&utm_medium=email&utm_term=0_2fb43ebd24-0d7c40ceb5-13024573&mc_cid=0d7c40ceb5&mc_eid=83b90a0323
DAR: An idea for DC and other States?
Statement of Karl A. Racine, Attorney General
Office of the Attorney General for the District of Columbia
As Prepared for Delivery
Before the Committee on Government Operations & Facilities
Councilmember, Robert White, Chairperson
Public Hearing
Bill 24-558 – Stop Discrimination by Algorithms Act of 2021
September 22, 2022
Introduction
Thank you, Chairperson White, Councilmembers, and staff for holding today’s hearing on this pathbreaking digital civil rights legislation, “The Stop Discrimination by Algorithms Act of 2021.”
OAG has expertise in civil rights, consumer protection, and tech accountability
Discrimination and bias can change peoples’ lives—impacting the schools they can go to, the homes they can purchase, the loans they get approved, and the jobs they are hired for. Our country has taken critical steps to help prevent discrimination and support equity and fairness in in these areas, for example by passing laws like the landmark civil rights laws of the 1960s. Building on these federal laws, in the 1970s, the District passed the Human Rights Act, one of the strongest civil rights laws in the country. It outlaws discrimination based on 21 traits, including race, religion, national origin, sexual orientation, gender identity or expression, and disability.
But one of the unfulfilled promises of these civil rights laws is the prevention of discrimination through tools that could not have been predicted nearly fifty years ago: modern technologies like algorithms that many companies and institutions now use to make important decisions. These algorithms—tools that use machine learning and personal data to make predictions about people—can determine who to hire for a new job, how much interest to charge for a loan, and whether to approve a tenant for an apartment. Without laws in place to clearly address discrimination in these tools, they will continue to result in widespread but nearly invisible bias and discrimination against marginalized communities. That is why our legislation is needed—it will modernize our civil rights laws for the 21st century and ensure that discrimination isn’t allowed in any form.
At the Office of Attorney General (OAG), we are committed to enforcing the law to stop discrimination in the District. In 2019, our office established a robust civil rights enforcement practice to investigate and bring lawsuits to challenge discriminatory policies and practices. Our work has included taking action to stop discrimination in areas ranging from denials of fair housing accommodations to denials of services to residents east of the Anacostia River.
OAG has also led the nation in protecting consumers by scrutinizing new technology practices and reining in Big Tech giants. We have sued Amazon and Google for anti-trust violations, and we took Facebook to court for data privacy violations. On top of that, in the last year alone, our Office of Consumer Protection has handled more than 2,500 consumer complaints, returned more than $600,000 to consumers through mediation and more than $5 million through lawsuits, and levied nearly $5 million in penalties against large tech-driven companies like DoorDash, GetARound, and Instacart.
These experiences have equipped us to recognize when we face a new civil rights frontier like the algorithmic discrimination challenge we now confront. Yes, algorithmic systems can expand possibilities for some, but, for many marginalized communities, they unfairly foreclose options for the future. This startling inequity requires us to adapt our laws for the digital age, which is why we are proposing action now, before it’s too late.
Algorithms can perpetuate hidden bias on a massive scale
People often assume that algorithmic decisions are more fair or accurate because they are driven by data and machine-learning. But that isn’t the case. Unfortunately, algorithmic decision-making systems are not always neutral. Instead, they can inherit bias or systemic discrimination that is baked into historical data or that results from a designer’s blind spots and then replicate it at a large scale. When this happens, automated decision algorithms can change lives for the worse and lock people—especially members of marginalized groups—out of important life opportunities.
For instance, housing advertisers on Facebook have targeted housing ads to renters and buyers based on race, religion, sex, and familial status. And tenant-screening companies use algorithms to generate automated tenant scoring reports for nine out of 10 landlords in the U.S., with some scoring reports making conclusory “accept” or “deny” recommendations with little information about how those determinations were made. Yet these scoring algorithms can incorrectly sweep in criminal or eviction records tied to people with similar names and are especially error-prone in Latino communities, which share a smaller set of unique surnames.
Lending algorithms have calculated higher interest rates for borrowers who attended Historically Black Colleges and Universities or Hispanic-Serving Institutions. And in the health care space, an algorithm used by many hospitals and insurers has suggested that healthier white patients should receive more services to manage their health conditions than sicker Black patients. Meanwhile, software that schedules doctors’ appointments disproportionately double-books Black patients, forcing them to sit in the waiting room longer and experience more hurried appointments than other patients.
Employment algorithms can filter applicants by how closely their resumés match a business’s current workers. After being trained on one workplace’s data, one such screening tool suggested that applicants who were named Jared and played lacrosse were the best candidates for the job. Several years ago, Amazon found its AI hiring software downgraded resumés that included the word “women” and candidates from all-women’s colleges. Other interview software uses video analysis that screens out applicants with disabilities.
These are just some of the many examples that scholars, advocates, and legal researchers have uncovered, and you have heard about many others today.
A digital civil rights solution is needed
These problems are unlikely to change without government intervention. That’s because, while some corporate actors are starting to take a closer look at their practices, there is currently no uniform requirement that any kind of bias testing be performed. And without uniform requirements, many companies will not do this critical work. In fact, there is an inherent misalignment of incentives when it comes to companies’ scrutinizing their algorithms for bias. Companies that design or use algorithms don’t always know what factors go into their decision-making processes. And right now, they have little reason to find out. Compounding the problem, it is not always clear to consumers when algorithms are in use or when they have been excluded from an opportunity because of some aspect of their identity. And even when consumers suspect bias in an automated process, they likely lack the technological expertise and access to the algorithm to prove what happened and why. Congressional lawmakers have put forward proposals to promote digital transparency, but none has gained traction yet, and the algorithmic space remains largely unregulated.
So, rather than asking individual residents to take on the near-impossible task of identifying and combatting digital discrimination one instance at a time, we have put forward a comprehensive, public civil rights solution to protect District residents. It sets standards that all companies must follow to ensure that their algorithmic systems are not perpetuating bias in the first place, and it recognizes the responsibility of the government to monitor for problems and remedy them when they arise.
The bill we propose today is an effort to create equity in the 21st century by ensuring that institutions have incentives to prevent automated discrimination and promote transparency about their processes. It was developed over the course of several years in consultation with civil rights and technology experts—including at the District’s own Georgetown University Law Center, federal lawmakers and regulators, and representatives from the business sector. Though it offers the country’s most comprehensive digital civil rights package to date, it is built on a foundation of principles common to many model algorithmic governance documents and frameworks under consideration in Congress and other state governments.
First, the legislation clarifies how the District’s civil rights law applies in the digital space by explicitly outlawing discrimination in targeted advertising and automated decision-making in core areas of life: education, employment, housing, and important services like health care and insurance. Second, the legislation would require companies to do work on the front end to ensure their algorithms are fair and to share information about this work with OAG in the form of annual bias audits. And third, the legislation would increase transparency for consumers by requiring companies to disclose when algorithms are in use and to offer a more robust explanation if an unfavorable decision—like denying a mortgage or charging a higher interest rate—is made and to explain how consumers can correct any misuse of data.
Together, these provisions implement commonsense guardrails to prevent some of the most pernicious harms of discrimination on an automated scale to promote a more equitable future for all of us.
We encourage companies that use these algorithms to support this effort. We met with business sector representatives when drafting this legislation to ensure we incorporated their perspectives. These conversations prompted us to, for instance, reduce duplication of effort by allowing a bias audit submitted to another state or federal government to substitute for the report this legislation requires. We also ensured that the bill applies only to larger entities with at least $15 million in annual revenue or to companies processing a significant amount of data on District residents. This means that most small business should not be affected by this law. The standards we propose here should not be prohibitive for organizations that are following the District’s current civil rights laws. In fact, some of the businesses we spoke to are already undertaking algorithmic bias audits, and they welcome the competitive advantage that this early compliance will give them over entities that have not yet prioritized digital fairness.
Institutions that have yet to begin this work now have an opportunity to be part of the solution, rather fighting to retain the status quo. Sadly, today we’ve heard much of the latter. Many companies fought other civil rights advancements like the Americans with Disabilities Act, and ended up on the wrong side of history. Companies should heed those past mistakes and instead work with us to support this important civil rights bill.
Conclusion
For decades, the District has been a leader in passing and enforcing civil rights laws. We can continue that leadership—both locally and nationally—by enacting this legislation as a model for uniform digital civil rights standards. Considering the number of national businesses that do work here, this legislation will establish a baseline for how companies across the country root out biases in the algorithms they use. And there is no reason that other states should not seek to adopt this same model. In fact, we are proud to have more and more localities, states, and even the White House, joining us on this path already. Let’s continue to be the leaders we are.
My team and I would be happy to answer any questions you may have.
Office of the Attorney General for the District of Columbia
As Prepared for Delivery
Before the Committee on Government Operations & Facilities
Councilmember, Robert White, Chairperson
Public Hearing
Bill 24-558 – Stop Discrimination by Algorithms Act of 2021
September 22, 2022
Introduction
Thank you, Chairperson White, Councilmembers, and staff for holding today’s hearing on this pathbreaking digital civil rights legislation, “The Stop Discrimination by Algorithms Act of 2021.”
OAG has expertise in civil rights, consumer protection, and tech accountability
Discrimination and bias can change peoples’ lives—impacting the schools they can go to, the homes they can purchase, the loans they get approved, and the jobs they are hired for. Our country has taken critical steps to help prevent discrimination and support equity and fairness in in these areas, for example by passing laws like the landmark civil rights laws of the 1960s. Building on these federal laws, in the 1970s, the District passed the Human Rights Act, one of the strongest civil rights laws in the country. It outlaws discrimination based on 21 traits, including race, religion, national origin, sexual orientation, gender identity or expression, and disability.
But one of the unfulfilled promises of these civil rights laws is the prevention of discrimination through tools that could not have been predicted nearly fifty years ago: modern technologies like algorithms that many companies and institutions now use to make important decisions. These algorithms—tools that use machine learning and personal data to make predictions about people—can determine who to hire for a new job, how much interest to charge for a loan, and whether to approve a tenant for an apartment. Without laws in place to clearly address discrimination in these tools, they will continue to result in widespread but nearly invisible bias and discrimination against marginalized communities. That is why our legislation is needed—it will modernize our civil rights laws for the 21st century and ensure that discrimination isn’t allowed in any form.
At the Office of Attorney General (OAG), we are committed to enforcing the law to stop discrimination in the District. In 2019, our office established a robust civil rights enforcement practice to investigate and bring lawsuits to challenge discriminatory policies and practices. Our work has included taking action to stop discrimination in areas ranging from denials of fair housing accommodations to denials of services to residents east of the Anacostia River.
OAG has also led the nation in protecting consumers by scrutinizing new technology practices and reining in Big Tech giants. We have sued Amazon and Google for anti-trust violations, and we took Facebook to court for data privacy violations. On top of that, in the last year alone, our Office of Consumer Protection has handled more than 2,500 consumer complaints, returned more than $600,000 to consumers through mediation and more than $5 million through lawsuits, and levied nearly $5 million in penalties against large tech-driven companies like DoorDash, GetARound, and Instacart.
These experiences have equipped us to recognize when we face a new civil rights frontier like the algorithmic discrimination challenge we now confront. Yes, algorithmic systems can expand possibilities for some, but, for many marginalized communities, they unfairly foreclose options for the future. This startling inequity requires us to adapt our laws for the digital age, which is why we are proposing action now, before it’s too late.
Algorithms can perpetuate hidden bias on a massive scale
People often assume that algorithmic decisions are more fair or accurate because they are driven by data and machine-learning. But that isn’t the case. Unfortunately, algorithmic decision-making systems are not always neutral. Instead, they can inherit bias or systemic discrimination that is baked into historical data or that results from a designer’s blind spots and then replicate it at a large scale. When this happens, automated decision algorithms can change lives for the worse and lock people—especially members of marginalized groups—out of important life opportunities.
For instance, housing advertisers on Facebook have targeted housing ads to renters and buyers based on race, religion, sex, and familial status. And tenant-screening companies use algorithms to generate automated tenant scoring reports for nine out of 10 landlords in the U.S., with some scoring reports making conclusory “accept” or “deny” recommendations with little information about how those determinations were made. Yet these scoring algorithms can incorrectly sweep in criminal or eviction records tied to people with similar names and are especially error-prone in Latino communities, which share a smaller set of unique surnames.
Lending algorithms have calculated higher interest rates for borrowers who attended Historically Black Colleges and Universities or Hispanic-Serving Institutions. And in the health care space, an algorithm used by many hospitals and insurers has suggested that healthier white patients should receive more services to manage their health conditions than sicker Black patients. Meanwhile, software that schedules doctors’ appointments disproportionately double-books Black patients, forcing them to sit in the waiting room longer and experience more hurried appointments than other patients.
Employment algorithms can filter applicants by how closely their resumés match a business’s current workers. After being trained on one workplace’s data, one such screening tool suggested that applicants who were named Jared and played lacrosse were the best candidates for the job. Several years ago, Amazon found its AI hiring software downgraded resumés that included the word “women” and candidates from all-women’s colleges. Other interview software uses video analysis that screens out applicants with disabilities.
These are just some of the many examples that scholars, advocates, and legal researchers have uncovered, and you have heard about many others today.
A digital civil rights solution is needed
These problems are unlikely to change without government intervention. That’s because, while some corporate actors are starting to take a closer look at their practices, there is currently no uniform requirement that any kind of bias testing be performed. And without uniform requirements, many companies will not do this critical work. In fact, there is an inherent misalignment of incentives when it comes to companies’ scrutinizing their algorithms for bias. Companies that design or use algorithms don’t always know what factors go into their decision-making processes. And right now, they have little reason to find out. Compounding the problem, it is not always clear to consumers when algorithms are in use or when they have been excluded from an opportunity because of some aspect of their identity. And even when consumers suspect bias in an automated process, they likely lack the technological expertise and access to the algorithm to prove what happened and why. Congressional lawmakers have put forward proposals to promote digital transparency, but none has gained traction yet, and the algorithmic space remains largely unregulated.
So, rather than asking individual residents to take on the near-impossible task of identifying and combatting digital discrimination one instance at a time, we have put forward a comprehensive, public civil rights solution to protect District residents. It sets standards that all companies must follow to ensure that their algorithmic systems are not perpetuating bias in the first place, and it recognizes the responsibility of the government to monitor for problems and remedy them when they arise.
The bill we propose today is an effort to create equity in the 21st century by ensuring that institutions have incentives to prevent automated discrimination and promote transparency about their processes. It was developed over the course of several years in consultation with civil rights and technology experts—including at the District’s own Georgetown University Law Center, federal lawmakers and regulators, and representatives from the business sector. Though it offers the country’s most comprehensive digital civil rights package to date, it is built on a foundation of principles common to many model algorithmic governance documents and frameworks under consideration in Congress and other state governments.
First, the legislation clarifies how the District’s civil rights law applies in the digital space by explicitly outlawing discrimination in targeted advertising and automated decision-making in core areas of life: education, employment, housing, and important services like health care and insurance. Second, the legislation would require companies to do work on the front end to ensure their algorithms are fair and to share information about this work with OAG in the form of annual bias audits. And third, the legislation would increase transparency for consumers by requiring companies to disclose when algorithms are in use and to offer a more robust explanation if an unfavorable decision—like denying a mortgage or charging a higher interest rate—is made and to explain how consumers can correct any misuse of data.
Together, these provisions implement commonsense guardrails to prevent some of the most pernicious harms of discrimination on an automated scale to promote a more equitable future for all of us.
We encourage companies that use these algorithms to support this effort. We met with business sector representatives when drafting this legislation to ensure we incorporated their perspectives. These conversations prompted us to, for instance, reduce duplication of effort by allowing a bias audit submitted to another state or federal government to substitute for the report this legislation requires. We also ensured that the bill applies only to larger entities with at least $15 million in annual revenue or to companies processing a significant amount of data on District residents. This means that most small business should not be affected by this law. The standards we propose here should not be prohibitive for organizations that are following the District’s current civil rights laws. In fact, some of the businesses we spoke to are already undertaking algorithmic bias audits, and they welcome the competitive advantage that this early compliance will give them over entities that have not yet prioritized digital fairness.
Institutions that have yet to begin this work now have an opportunity to be part of the solution, rather fighting to retain the status quo. Sadly, today we’ve heard much of the latter. Many companies fought other civil rights advancements like the Americans with Disabilities Act, and ended up on the wrong side of history. Companies should heed those past mistakes and instead work with us to support this important civil rights bill.
Conclusion
For decades, the District has been a leader in passing and enforcing civil rights laws. We can continue that leadership—both locally and nationally—by enacting this legislation as a model for uniform digital civil rights standards. Considering the number of national businesses that do work here, this legislation will establish a baseline for how companies across the country root out biases in the algorithms they use. And there is no reason that other states should not seek to adopt this same model. In fact, we are proud to have more and more localities, states, and even the White House, joining us on this path already. Let’s continue to be the leaders we are.
My team and I would be happy to answer any questions you may have.
Cancer victims urge court to end J&J bankruptcy roadblock to lawsuits
Sep 19, 2022 | 7:56 PM
By Dietrich Knauth
EXCERPTS FROM ARTICLE
(Reuters) – People suing Johnson & Johnson over the company’s talc products urged an appeals court on Monday to revive their claims, saying the profitable company should not be allowed to use a bankrupt subsidiary to block lawsuits alleging the products cause cancer.
They asked a panel of the Philadelphia-based 3rd U.S. Circuit Court of Appeals to dismiss the bankruptcy of J&J’s subsidiary LTL Management, saying that LTL is a “concocted” corporation set up solely to stop them from getting their day in court.
J&J spun off LTL in October, assigned its talc liabilities to it and placed the newly created subsidiary into bankruptcy days later.
That restructuring strategy, known as the “Texas two-step,” paused about 38,000 lawsuits J&J was facing alleging that its baby powder and other talc-based products contain asbestos and caused mesothelioma and ovarian cancer.
Critics, including lawmakers and legal experts, say J&J’s bankruptcy maneuver could provide a blueprint for other big companies to avoid juries in mass tort lawsuits.
David Frederick, representing a separate group of cancer plaintiffs, said the bankruptcy allows LTL to pay “less money, more slowly.”
“Not a dime will be paid until the last appeal of the last objector is resolved,” Frederick said.
But J&J countered bankruptcy court allows all current and future talc lawsuits to be settled together, which it says is the fastest and fairest way.
The company has set aside $2 billion to settle talc claims, which LTL executives describe as a starting point rather than a “cap”.
Before the bankruptcy filing, J&J faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were awarded a judgment of more than $2 billion, according to bankruptcy court records.
But more than 1,500 talc lawsuits have been dismissed without J&J paying anything and the majority of cases that have gone to trial have resulted in defense verdicts, mistrials or judgments for the company on appeal, according to LTL’s court filings.
The cancer victims are asking the appeals court to overrule a New Jersey bankruptcy judge who allowed LTL’s bankruptcy to continue. LTL’s bankruptcy filing automatically stopped lawsuits from proceeding against it, and U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey ruled in February that LTL’s bankruptcy should also stop talc lawsuits from proceeding against parent company J&J.
FULL ARTICLE: Cancer victims urge court to end J&J bankruptcy roadblock to lawsuits | 102.7 WBOW | The Valley's Greatest Hits | Terre Haute, IN (1027wbow.com) https://1027wbow.com/2022/09/19/cancer-victims-urge-court-to-end-jj-bankruptcy-roadblock-to-lawsuits/
Sep 19, 2022 | 7:56 PM
By Dietrich Knauth
EXCERPTS FROM ARTICLE
(Reuters) – People suing Johnson & Johnson over the company’s talc products urged an appeals court on Monday to revive their claims, saying the profitable company should not be allowed to use a bankrupt subsidiary to block lawsuits alleging the products cause cancer.
They asked a panel of the Philadelphia-based 3rd U.S. Circuit Court of Appeals to dismiss the bankruptcy of J&J’s subsidiary LTL Management, saying that LTL is a “concocted” corporation set up solely to stop them from getting their day in court.
J&J spun off LTL in October, assigned its talc liabilities to it and placed the newly created subsidiary into bankruptcy days later.
That restructuring strategy, known as the “Texas two-step,” paused about 38,000 lawsuits J&J was facing alleging that its baby powder and other talc-based products contain asbestos and caused mesothelioma and ovarian cancer.
Critics, including lawmakers and legal experts, say J&J’s bankruptcy maneuver could provide a blueprint for other big companies to avoid juries in mass tort lawsuits.
David Frederick, representing a separate group of cancer plaintiffs, said the bankruptcy allows LTL to pay “less money, more slowly.”
“Not a dime will be paid until the last appeal of the last objector is resolved,” Frederick said.
But J&J countered bankruptcy court allows all current and future talc lawsuits to be settled together, which it says is the fastest and fairest way.
The company has set aside $2 billion to settle talc claims, which LTL executives describe as a starting point rather than a “cap”.
Before the bankruptcy filing, J&J faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were awarded a judgment of more than $2 billion, according to bankruptcy court records.
But more than 1,500 talc lawsuits have been dismissed without J&J paying anything and the majority of cases that have gone to trial have resulted in defense verdicts, mistrials or judgments for the company on appeal, according to LTL’s court filings.
The cancer victims are asking the appeals court to overrule a New Jersey bankruptcy judge who allowed LTL’s bankruptcy to continue. LTL’s bankruptcy filing automatically stopped lawsuits from proceeding against it, and U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey ruled in February that LTL’s bankruptcy should also stop talc lawsuits from proceeding against parent company J&J.
FULL ARTICLE: Cancer victims urge court to end J&J bankruptcy roadblock to lawsuits | 102.7 WBOW | The Valley's Greatest Hits | Terre Haute, IN (1027wbow.com) https://1027wbow.com/2022/09/19/cancer-victims-urge-court-to-end-jj-bankruptcy-roadblock-to-lawsuits/
California Files Antitrust Lawsuit Against Amazon that resembles recently dismissed case brought by DC AG Racine
As reported by the New York Times, Bob Bonta, California’s attorney general, has brought a lawsuit alleging that Amazon punishes companies that offer lower prices on other websites.
California’s attorney general filed an antitrust lawsuit against Amazon on Wednesday, claiming the retailer stifles competition and increases the prices that consumers pay across the internet.
The suit is limited to California, where officials said Amazon had around 25 million customers, but if it succeeds it could have a broad impact across the country.
The NY Times explains that lawsuit largely focuses on the way Amazon penalizes sellers for listing products at lower prices on other websites. If Amazon spots a product listed cheaper on a competitor’s website, it often will remove important buttons like “Buy Now” and “Add to Cart” from a product listing page.
Those buttons are a major driver of sales for companies selling through Amazon, and losing them can quickly hurt their businesses.
The NY Times explains: “That creates a dilemma for marketplace sellers. At times, they can offer products for lower prices on sites other than Amazon because the cost of using those sites can be lower. But because Amazon is by far the largest online retailer, the sellers would rather raise their prices on other sites than risk losing their sales on Amazon, the complaint said, citing interviews with sellers, competitors and industry consultants.”
The California Complaint alleges that
“Without basic price competition, without different online sites trying to outdo each other with lower prices, prices artificially stabilize at levels higher than would be the case in a competitive market.”
The NY Times observes that the California suit is the latest in a string of increasingly aggressive efforts by states and regulators in Washington and Europe to curb the influence of the technology industry’s biggest companies. Also on Wednesday, a European Union court gave its blessing to a record multibillion-dollar fine issued against Google in 2018.
The lawsuit echoes a case that was brought by Karl A. Racine, the attorney general for the District of Columbia, and that was thrown out this spring. Judge Hiram E. Puig-Lugo of Superior Court of the District of Columbia found that Mr. Racine had not provided sufficient evidence that Amazon’s policies were anticompetitive. Mr. Racine is appealing the ruling.
Tha California Complaint is at 2022-09-14 California v. Amazon Complaint-redacted.pdf, 2022-09-14 California v. Amazon Complaint-redacted.pdf
As reported by the New York Times, Bob Bonta, California’s attorney general, has brought a lawsuit alleging that Amazon punishes companies that offer lower prices on other websites.
California’s attorney general filed an antitrust lawsuit against Amazon on Wednesday, claiming the retailer stifles competition and increases the prices that consumers pay across the internet.
The suit is limited to California, where officials said Amazon had around 25 million customers, but if it succeeds it could have a broad impact across the country.
The NY Times explains that lawsuit largely focuses on the way Amazon penalizes sellers for listing products at lower prices on other websites. If Amazon spots a product listed cheaper on a competitor’s website, it often will remove important buttons like “Buy Now” and “Add to Cart” from a product listing page.
Those buttons are a major driver of sales for companies selling through Amazon, and losing them can quickly hurt their businesses.
The NY Times explains: “That creates a dilemma for marketplace sellers. At times, they can offer products for lower prices on sites other than Amazon because the cost of using those sites can be lower. But because Amazon is by far the largest online retailer, the sellers would rather raise their prices on other sites than risk losing their sales on Amazon, the complaint said, citing interviews with sellers, competitors and industry consultants.”
The California Complaint alleges that
“Without basic price competition, without different online sites trying to outdo each other with lower prices, prices artificially stabilize at levels higher than would be the case in a competitive market.”
The NY Times observes that the California suit is the latest in a string of increasingly aggressive efforts by states and regulators in Washington and Europe to curb the influence of the technology industry’s biggest companies. Also on Wednesday, a European Union court gave its blessing to a record multibillion-dollar fine issued against Google in 2018.
The lawsuit echoes a case that was brought by Karl A. Racine, the attorney general for the District of Columbia, and that was thrown out this spring. Judge Hiram E. Puig-Lugo of Superior Court of the District of Columbia found that Mr. Racine had not provided sufficient evidence that Amazon’s policies were anticompetitive. Mr. Racine is appealing the ruling.
Tha California Complaint is at 2022-09-14 California v. Amazon Complaint-redacted.pdf, 2022-09-14 California v. Amazon Complaint-redacted.pdf
From Matt Stoller: States Taking the Lead on Regulating Google?
In a little noticed but important big tech case, Republican Ohio Attorney General David Yost is suing Google. He’s not doing it via antitrust. Instead, he’s using common carrier law, asserting that the firm has public obligations under Ohio law to carry all comers on equal terms. His claim is that it’s illegal for Google to downgrade links to rivals like Yelp, below its own reviews of restaurants, or place its own travel search results higher than those of Expedia. It’s the ‘self-preferencing’ idea that Congress is wrestling with right now, only done through common law at a state level.
This lawsuit comes directly out of Clarence Thomas’s anti-Google arguments in 2021. In a series of opinions and statements, Thomas, responding to Donald Trump’s removal from key internet speech platforms, began creating the legal infrastructure for conservatives to place public obligations onto big tech platforms. Yost took that argument and ran with it.
Recently, Yost won an important procedural motion to treat the determination that Google is a common carrier and the remedy for that status separately. Had they been handled together, as Google sought, it would have been a messy and difficult process, and the judge might have simply thrown up his hands. Now, Google’s legal position as a common carrier, and the remedy for that position, will be separate questions. One of my favorite Wall Street analysts, Paul Gallant, made an excellent point on the politics of this case.
While this sounds like a long shot, recall Justice Thomas in 2Q 2021 signaled lower courts that major digital platforms may well fit the legal definition of common carriers and thus can be forbidden from unreasonable discrimination. If the Ohio AG wins, we'd expect other states to pursue similar regimes, particularly if Congress fails to pass the "no self-preferencing" antitrust bill by the end of Sept. before the midterm recess.
See https://nam12.safelinks.protection.outlook.com/?url=https%3A%2F%2Fsubstack.com%2Fredirect%2F898ca799-be9b-496c-8f8b-ff512b1b42ee%3Fr%3D4w6ql&data=05%7C01%7C%7Cc5c66e68e14f412d85f608da934789d4%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637984232725966752%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=GLbidLiC2dFw8WiiemlJ7RUyn2JHHXuV0ohdjEamwTM%3D&reserved=0
In a little noticed but important big tech case, Republican Ohio Attorney General David Yost is suing Google. He’s not doing it via antitrust. Instead, he’s using common carrier law, asserting that the firm has public obligations under Ohio law to carry all comers on equal terms. His claim is that it’s illegal for Google to downgrade links to rivals like Yelp, below its own reviews of restaurants, or place its own travel search results higher than those of Expedia. It’s the ‘self-preferencing’ idea that Congress is wrestling with right now, only done through common law at a state level.
This lawsuit comes directly out of Clarence Thomas’s anti-Google arguments in 2021. In a series of opinions and statements, Thomas, responding to Donald Trump’s removal from key internet speech platforms, began creating the legal infrastructure for conservatives to place public obligations onto big tech platforms. Yost took that argument and ran with it.
Recently, Yost won an important procedural motion to treat the determination that Google is a common carrier and the remedy for that status separately. Had they been handled together, as Google sought, it would have been a messy and difficult process, and the judge might have simply thrown up his hands. Now, Google’s legal position as a common carrier, and the remedy for that position, will be separate questions. One of my favorite Wall Street analysts, Paul Gallant, made an excellent point on the politics of this case.
While this sounds like a long shot, recall Justice Thomas in 2Q 2021 signaled lower courts that major digital platforms may well fit the legal definition of common carriers and thus can be forbidden from unreasonable discrimination. If the Ohio AG wins, we'd expect other states to pursue similar regimes, particularly if Congress fails to pass the "no self-preferencing" antitrust bill by the end of Sept. before the midterm recess.
See https://nam12.safelinks.protection.outlook.com/?url=https%3A%2F%2Fsubstack.com%2Fredirect%2F898ca799-be9b-496c-8f8b-ff512b1b42ee%3Fr%3D4w6ql&data=05%7C01%7C%7Cc5c66e68e14f412d85f608da934789d4%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637984232725966752%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=GLbidLiC2dFw8WiiemlJ7RUyn2JHHXuV0ohdjEamwTM%3D&reserved=0
The Washington Post Reports:
Washington Hebrew school says parents waived right to sue over sex abuse
By Lauren Lumpkin
Updated September 13, 2022 at 9:48 p.m. EDT|Published September 13, 2022 at 7:35 p.m. EDT
[Excerpts, slightly modified by DAR]
A group of parents in 2019 sued Washington Hebrew Congregation, claiming that leaders at Edlavitch-Tyser Early Childhood Center ignored warning signs as a teacher sexually abused toddlers. The suit also said the employee was allowed to be alone with students despite District regulations that require at least two adults to be present with toddlers in licensed child development centers.
The synagogue has argued that parents suing over alleged child sex abuse surrendered their right to bring a lawsuit when they signed activity waivers upon enrolling their children in school, court documents show.
In July, attorneys for Washington Hebrew Congregation filed a motion for summary judgment, a request for the court to make a ruling before a trial. The school’s attorneys argued that, in the paperwork parents signed, they gave up their right to sue.
Among those documents that parents completed was a consent and liability waiver that stated “neither parents nor their children will bring claims against WHC or any of its employees for personal injuries sustained ‘as a result of’ a child’s ‘participation in these activities [of the Washington Hebrew Congregation’s Edlavitch-Tyser Early Childhood Center].’”
But parents understood those “activities” to include “typical preschool activities,” parents’ attorneys responded in court records. “Not a single plaintiff parent who signed the release contemplated that it would cover injuries sustained as a result of their children being sexually abused by a trusted WHC employee.”
Karen Dunn, a lawyer for nine of the plaintiff families, urged the court to deny Washington Hebrew Congregation’s motion for summary judgment.
“Among other absurdities, WHC’s reading of the release’s text would require the court to find that damage caused by sexual abuse was damage caused by participation in a school activity,” Dunn stated in the filing.
The employee was also not properly vetted, the families — who are not identified in the lawsuit — claim.
+++
DAR comment:
The commonly stated rule for DC is that waivers of liability are generally enforceable, with some exceptions. One exception is where reckless behavior caused the injury: Liability waivers in Washington, D.C. are not enforceable if the injury suffered was due to the willful, wanton, and reckless negligence of the other party. See Richard J. MOORE, Appellant v. Terrell WALLER and Square 345 Limited Partnership t/a Grand Hyatt Hotel, Appellees.No. 05-CV-695, Decided: August 02, 2007
But whatever the technical legalities, we as lawyers should worry if ordinary people find technical rules and litigation practices to be surprising and unfair. That can be the situation with regard to waiver of liability clauses in an array of situations. For example, where the signing party to a form document is not represented by counsel and does not realize the possibly draconian consequences of liability waiver language, or signs because it is necessary to complete the transaction with a party of greater bargaining power (an “adhesion” contract), or the signer simply skips reading the language on the naïve assumption that pitfalls are unlikely because the adverse party seems benign.
Washington Hebrew school says parents waived right to sue over sex abuse
By Lauren Lumpkin
Updated September 13, 2022 at 9:48 p.m. EDT|Published September 13, 2022 at 7:35 p.m. EDT
[Excerpts, slightly modified by DAR]
A group of parents in 2019 sued Washington Hebrew Congregation, claiming that leaders at Edlavitch-Tyser Early Childhood Center ignored warning signs as a teacher sexually abused toddlers. The suit also said the employee was allowed to be alone with students despite District regulations that require at least two adults to be present with toddlers in licensed child development centers.
The synagogue has argued that parents suing over alleged child sex abuse surrendered their right to bring a lawsuit when they signed activity waivers upon enrolling their children in school, court documents show.
In July, attorneys for Washington Hebrew Congregation filed a motion for summary judgment, a request for the court to make a ruling before a trial. The school’s attorneys argued that, in the paperwork parents signed, they gave up their right to sue.
Among those documents that parents completed was a consent and liability waiver that stated “neither parents nor their children will bring claims against WHC or any of its employees for personal injuries sustained ‘as a result of’ a child’s ‘participation in these activities [of the Washington Hebrew Congregation’s Edlavitch-Tyser Early Childhood Center].’”
But parents understood those “activities” to include “typical preschool activities,” parents’ attorneys responded in court records. “Not a single plaintiff parent who signed the release contemplated that it would cover injuries sustained as a result of their children being sexually abused by a trusted WHC employee.”
Karen Dunn, a lawyer for nine of the plaintiff families, urged the court to deny Washington Hebrew Congregation’s motion for summary judgment.
“Among other absurdities, WHC’s reading of the release’s text would require the court to find that damage caused by sexual abuse was damage caused by participation in a school activity,” Dunn stated in the filing.
The employee was also not properly vetted, the families — who are not identified in the lawsuit — claim.
+++
DAR comment:
The commonly stated rule for DC is that waivers of liability are generally enforceable, with some exceptions. One exception is where reckless behavior caused the injury: Liability waivers in Washington, D.C. are not enforceable if the injury suffered was due to the willful, wanton, and reckless negligence of the other party. See Richard J. MOORE, Appellant v. Terrell WALLER and Square 345 Limited Partnership t/a Grand Hyatt Hotel, Appellees.No. 05-CV-695, Decided: August 02, 2007
But whatever the technical legalities, we as lawyers should worry if ordinary people find technical rules and litigation practices to be surprising and unfair. That can be the situation with regard to waiver of liability clauses in an array of situations. For example, where the signing party to a form document is not represented by counsel and does not realize the possibly draconian consequences of liability waiver language, or signs because it is necessary to complete the transaction with a party of greater bargaining power (an “adhesion” contract), or the signer simply skips reading the language on the naïve assumption that pitfalls are unlikely because the adverse party seems benign.
From DMN -- Ticketmaster Formally Responds to Congressman Bill Pascrell Jr. (digitalmusicnews.com)https://www.digitalmusicnews.com/2022/09/07/ticketmaster-bill-pascrell-jr-response/? )
Ticketmaster Formally Responds to Congressman Bill Pascrell Jr.: ‘Dynamic Pricing Is About Capturing More Value For the Artist’
Dylan Smith
September 7, 2022
(Official White House Photo by Adam Schultz)
Last week, Ticketmaster faced renewed congressional scrutiny over its business practices – and specifically the role that “dynamic pricing” played in elevating the cost of tickets to Bruce Springsteen’s 2023 concerts. Now, the ticketing giant has addressed the situation with an “official statement.”
The NFT-equipped ticketing platform just recently published said official statement on Ticketmaster’s business website, and the public response arrives one week after New Jersey Representative Bill Pascrell Jr. took aim at the company in a letter addressed to Live Nation president and CEO Michael Rapino.
A longtime Ticketmaster critic (and the author of the BOSS Act), the lawmaker in the multifaceted message called on the Live Nation subsidiary to disclose, among an array of other things, how many of Springsteen’s 2023 shows will take place at venues owned by the business, whether there’s a “price ceiling” on the passes, and whether “there are restrictions on purchasing a single ticket.”
In addition to reportedly elevating the price of certain “platinum” Bruce Springsteen tickets to north of $5,000 apiece, dynamic pricing subsequently caused some Harry Styles “platinum” passes (which “are being sold for the first time through Ticketmaster,” the company’s website emphasizes) to cost more on Ticketmaster than on third-party resale platforms.
While Representative Pascrell Jr. requested that Live Nation and Ticketmaster respond to his inquiry by September 30th, the entities have already published a roughly 779-word official statement, as mentioned at the outset.
“We appreciate and share Congressman Pascrell’s passion for improving the ticketing industry and look forward to continuing our dialogue with him,” Ticketmaster’s response begins. “As the resale ticketing market has grown to more than a $10 billion dollar [sic] industry over the past few years, artists and teams have lost that revenue to resellers who have no investment in the event going well or any of the people working behind the scenes to bring the event to life. As such, Event Organizers have looked to market-based pricing to recapture that lost revenue.”
From there, the document indicates that these same event organizers, not Ticketmaster, establish “different onsale parameters” as well as “pricing strategy and price range parameters on all tickets, including dynamic and fixed price points.”
After dedicating a couple paragraphs to explaining that “supply and demand drives pricing decisions,” the text proceeds to paint dynamic pricing as a tool that secures “more value for the artist at the initial onsale” by preventing resellers from scooping up passes at face value and then reselling them for a profit.
“Ticketmaster builds the technology to empower the strategy that the artist team sets,” the document reiterates. “The secondary market sees over $10 billion in ticket sales and continues to grow rapidly. Through Ticketmaster, dynamic pricing has captured over $500 million for Event Organizers from resale markets in 2022 alone.”
Finally, before concluding by highlighting the ways in which Ticketmaster has purportedly advocated for reform in the ticketing space – including alleged support for New York’s total-cost law, which execs hope to see “extended across the nation” – the follow-up dives into some of the specifics behind Bruce Springsteen’s ticket sales.
According to Ticketmaster, at least four marketplaces (AXS, SeatGeek, and Paciolan, besides Ticketmaster) sold dynamically priced Springsteen tickets, 11.8 percent of which “were designated Platinum” on Ticketmaster. The remaining majority of passes “were sold at set prices,” higher-ups relayed.
Also on Ticketmaster, the average price of all sold Bruce Springsteen tickets was $262, with 1.3 percent of moved passes having fetched more than $1,000 apiece, per the breakdown. The same source shows that 18 percent of Springsteen tickets sold for under $99 each, against 27 percent for the $100 to $150 price range, 11 percent between $150 and $200, and a total of 56 percent for all <$200 tickets.
Ticketmaster Formally Responds to Congressman Bill Pascrell Jr.: ‘Dynamic Pricing Is About Capturing More Value For the Artist’
Dylan Smith
September 7, 2022
(Official White House Photo by Adam Schultz)
Last week, Ticketmaster faced renewed congressional scrutiny over its business practices – and specifically the role that “dynamic pricing” played in elevating the cost of tickets to Bruce Springsteen’s 2023 concerts. Now, the ticketing giant has addressed the situation with an “official statement.”
The NFT-equipped ticketing platform just recently published said official statement on Ticketmaster’s business website, and the public response arrives one week after New Jersey Representative Bill Pascrell Jr. took aim at the company in a letter addressed to Live Nation president and CEO Michael Rapino.
A longtime Ticketmaster critic (and the author of the BOSS Act), the lawmaker in the multifaceted message called on the Live Nation subsidiary to disclose, among an array of other things, how many of Springsteen’s 2023 shows will take place at venues owned by the business, whether there’s a “price ceiling” on the passes, and whether “there are restrictions on purchasing a single ticket.”
In addition to reportedly elevating the price of certain “platinum” Bruce Springsteen tickets to north of $5,000 apiece, dynamic pricing subsequently caused some Harry Styles “platinum” passes (which “are being sold for the first time through Ticketmaster,” the company’s website emphasizes) to cost more on Ticketmaster than on third-party resale platforms.
While Representative Pascrell Jr. requested that Live Nation and Ticketmaster respond to his inquiry by September 30th, the entities have already published a roughly 779-word official statement, as mentioned at the outset.
“We appreciate and share Congressman Pascrell’s passion for improving the ticketing industry and look forward to continuing our dialogue with him,” Ticketmaster’s response begins. “As the resale ticketing market has grown to more than a $10 billion dollar [sic] industry over the past few years, artists and teams have lost that revenue to resellers who have no investment in the event going well or any of the people working behind the scenes to bring the event to life. As such, Event Organizers have looked to market-based pricing to recapture that lost revenue.”
From there, the document indicates that these same event organizers, not Ticketmaster, establish “different onsale parameters” as well as “pricing strategy and price range parameters on all tickets, including dynamic and fixed price points.”
After dedicating a couple paragraphs to explaining that “supply and demand drives pricing decisions,” the text proceeds to paint dynamic pricing as a tool that secures “more value for the artist at the initial onsale” by preventing resellers from scooping up passes at face value and then reselling them for a profit.
“Ticketmaster builds the technology to empower the strategy that the artist team sets,” the document reiterates. “The secondary market sees over $10 billion in ticket sales and continues to grow rapidly. Through Ticketmaster, dynamic pricing has captured over $500 million for Event Organizers from resale markets in 2022 alone.”
Finally, before concluding by highlighting the ways in which Ticketmaster has purportedly advocated for reform in the ticketing space – including alleged support for New York’s total-cost law, which execs hope to see “extended across the nation” – the follow-up dives into some of the specifics behind Bruce Springsteen’s ticket sales.
According to Ticketmaster, at least four marketplaces (AXS, SeatGeek, and Paciolan, besides Ticketmaster) sold dynamically priced Springsteen tickets, 11.8 percent of which “were designated Platinum” on Ticketmaster. The remaining majority of passes “were sold at set prices,” higher-ups relayed.
Also on Ticketmaster, the average price of all sold Bruce Springsteen tickets was $262, with 1.3 percent of moved passes having fetched more than $1,000 apiece, per the breakdown. The same source shows that 18 percent of Springsteen tickets sold for under $99 each, against 27 percent for the $100 to $150 price range, 11 percent between $150 and $200, and a total of 56 percent for all <$200 tickets.
Supporting public colleges, including DC
by Don Allen Resnikoff
Current discussions about student loan forgiveness are related to a broader debate about the current high price of advanced education. I come to that debate like a visitor from another time -- 1958, to be exact. When I graduated from the public high school in Plainfield, New Jersey in 1958, it was not difficult for me to attend the New Jersey State university, Rutgers, for a few hundred dollars a year in tuition. State subsidized room and board were similarly inexpensive.
Because Rutgers was inexpensive, the fact that my family could provide no money for college was not a significant handicap. I was able to earn some money during college through music gigs (it was the era of “Animal House”), and summer jobs that often resembled Charlie Chaplin or “I Love Lucy” episodes where a hapless factory worker struggles with a comically rapid assembly line. And, I had a small scholarship from my hometown newspaper that rewarded me for years of delivering newspapers by bicycle, throwing folded papers onto the porches of homes near mine.
The result was that I was able to graduate from college debt free, and go on to law school with a partial scholarship. What followed was the sort of respectable career as a lawyer that my parents hoped for, much of it in government work pursuing affirmative antitrust litigation.
My gratitude to Rutgers is reflected in the Rutgers scholarship fund I have endowed in the name of my deceased brother Roy, who followed me to Rutgers in 1960 and subsequently pursued a career as a respected physician.
Turning to the current debate about the current high price of advanced education, a recent Forbes article provides “list price” (before scholarship and other subsidy) tuition costs for public colleges in the US. See https://www.forbes.com/sites/michaeltnietzel/2021/11/01/which-states-have--the-least-and-the-most-expensive-public-colleges/?
For two year colleges, in 2021-22, average published tuition and fees for full-time in-district students at public two-year colleges ranged from a low of $1,430 in California to a high of $8,600 in Vermont.
For four year colleges, the 2021-22 average tuition and fees price for full-time, in-state students at public four-year colleges ranged from a low of $6,100 in Wyoming to a high of $17,750 in Vermont. Following Wyoming, the least expensive states were Florida ($6,370), Montana ($7,265), Utah ($7,387), and North Carolina ($7,389).
After Vermont, the most expensive states for four-year were New Hampshire ($17,040), Pennsylvania ($15,312), my home base in New Jersey ($14,963), and Illinois ($14,667).
Forbes goes on to explain that for ‘flagship’ state universities, the lowest price for 2021-22 tuition and fees for full-time in-state students was $6,100 at the University of Wyoming, followed by the University of Florida ($6,380), University of Montana ($7,490), University of Idaho ($8,340) and the University of New Mexico ($8,510). The most expensive flagship was the University of Vermont with an in-state tuition and fee price of $19,000. It was followed by the University of New Hampshire ($18,960), Pennsylvania State University ($18,900), University of Connecticut ($18,560) and the University of Virginia ($17,460).
Most public four-year institutions charge nonresidents a significantly higher amount, but the District of Columbia has a subsidy program that provides some subsidies to DC residents to attend out of state colleges. The D.C. Tuition Assistance Grant Program (DCTAG) program assists D.C. residents by defraying the cost of out-of-state tuition to some extent. For public schools, the program will help cover the difference between in-state and out-of-state tuition for up to $10,000 a year for 6 years, with a lifetime maximum of $50,000. Undergraduate students who choose to attend private colleges and universities in the D.C. metropolitan area as well as those who choose to attend any private Historically Black Colleges and Universities (HBCUs) throughout the nation, are eligible to receive a grant for up to $2,500 a year for six years, with a lifetime maximum of $12,500.
But, college funding coach Zaina Bankwalla points out in her website that If you reside in D.C. you may or may not qualify for a tuition grant through the D.C. Tuition Assistance Grant Program (DCTAG), which, depending on what school you go to and what aid package you receive, might lower your tuition to in-state rates, but that is rare. There is likely to be a short-fall, because college prices have skyrocketed in the past two decades since the DCTAG program was adopted, while the grant values have remained roughly the same. The grants may still cover the whole difference at a few schools, but at most schools it will fall short of that. So, in most states D.C. residents will pay a price less than other out of state students, but somewhat more than in-state residents without any other forms of aid. See https://www.thecollegefundingcoach.org/the-myth-of-the-d-c-resident-paying-in-state-tuition/
The bottom line for me as a 1958-1962 Rutgers student is that I’d like to see increased government funding for state schools like Rutgers so that more students from poor but hopeful families have the same opportunities I had. There are a lot of people who say it can’t be done, but in my day it was done. Leading politician Mitch McConnell is reported to know about that, since McConnell graduated from an inexpensive public school, the University of Louisville in 1964. His tuition back then at the public (State/City) college was $330. Senator Bernie Sanders has advocated for federal funding support so that two- and four-year public and tribal colleges and universities would be tuition-free.
The issues raised by increasing government funding support for state supported schools are distinct from issues about government funding of education at private schools such as Princeton. Princeton, like Rutgers, is in New Jersey, but government support to a private school like Princeton raises issues of perverse incentives to raise tuition fees that do not apply to Rutgers.
As it happens, Founding Father James Madison had something to say on the importance of public funded education in Kentucky (albeit not for everyone at the time). In 1822, he wrote to a friend that “the liberal appropriations made by the Legislature of Kentucky for a general system of Education cannot be too much applauded. … Enlightened patriotism … is now providing for the State a Plan of Education embracing every class of Citizens.”
“Knowledge will forever govern ignorance,” Madison explained, “and a people who mean to be their own governors must arm themselves with the power which knowledge gives.”
Posting by Don Allen Resnikoff, who is fully responsble for the content
DCCRC agrees with National Consumers League, Public Justice, and other advocates of DC Councilmember Cheh's bill requiring public access to court filings with information important to consumers
By Don Allen Resnikoff
The DC Consumer Rights Coalition (DCCRC) is a non-profit organization with a 501(c)(3) IRS tax exemption that advances economic rights and financial inclusion of DC residents through research, education, advocacy, and community organization. DCCRC works with individual consumer advocates, poverty and consumer organizations, and grassroots members to press for policies that protect the District’s vulnerable residents. DCCRC also educates individuals on consumer issues and consumer rights, advocates for consumer interests, studies critical consumer issues, and works to build the consumer movement.
Consistent with that mission, DCCRC is an advocate for a fundamental principle of justice systems in democratic societies: court proceedings should be conducted in public view. Public access to judicial records is an important aspect of that principle. That is especially important in cases that have effects beyond the parties to the case—in particular, cases that involve defective products or dangerous environmental conditions that pose dangers to the general public. Unfortunately, that principle is ignored when a court agrees to the parties’ request to hide those dangers from the public, by allowing overbroad confidentiality clauses in settlement agreements, or by issuing overbroad protective orders.
DCCRC’s advocacy of public access to judicial records has included, among other things, joining with the DC Bar and Public Justuce in hosting a recent public forum on strategies lawyers can use to oppose overbroad confidentiality clauses in court-approved settlement agreements, and to oppose issuing overbroad court-ordered protective orders.
As an aspect of its broader advocacy of public access to judicial records, the DC Consumer Rights Coalition supports other public interest organizations who are advocating for the “Sunshine in Litigation Act of 2022” introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmember Charles Allen. We thank advocates at the National Consumers League, Public Justice and others for their advocacy leadership on these issues.
Following is an excerpt of a statement prepared by DCCRC for submission to the DC Council at the appropriate time:
Court-permitted secrecy has caused harm in an array of cases, such as cases related to the opioid epidemic. As pointed out by Councilmember Cheh in her letter submitting the proposed D.C. Sunshine in Litigation Act of 2022, individuals and governments began filing cases many years ago charging that opioid manufacturers had intentionally misled doctors about the dangers of prescription opioids. However, because judges in these cases agreed to the parties’ request to require that the court records remain under seal, the clear evidence of the manufacturers’ wrongdoing and of the dangers of opioids uncovered by the plaintiff parties was kept from the public, causing great harm.
Court permitted secrecy in the opioid and other cases involving danger to consumers hampers effective government oversight and enforcement. And it makes it needlessly more difficult for other individuals who have been harmed in similar ways to get justice. For them, getting justice means repeating all the same efforts to build a new case from scratch. That leads to the inefficiency of duplicative court cases with varying results.
Councilmember Cheh explains in her note to the DC Council that the proposed Act would put a stop to that kind of harm-causing secrecy. It would prohibit parties and courts from keeping information related to public dangers secret. It would still allow courts to protect sensitive private information that is not needed for public safety, like people’s personal medical and financial information, and the company’s trade secrets. But it would make sure that evidence of ongoing dangers to the public cannot remain hidden.
Several other states, including Florida, Louisiana, Virginia, Arkansas, and Washington, have already adopted similar laws, and California has similar legislation pending.
Opponents of “sunshine” laws argue that settlements might be harder if companies cannot settle in a way that keeps the evidence of consumer harm secret. It is not at all clear that the Act would really impact a company’s willingness to settle case. But a company that is causing harm should not be permitted to force someone who has suffered that harm to agree to keep that harm secret from the public as a price for getting their own justice.
In summary, we agree that many lives could be saved and much suffering could be prevented if corporations are not allowed to insist on secrecy orders in court settlements that hide information about product issues harmful to consumers. For that reason we join other public interest organizations in supporting the “Sunshine in Litigation Act of 2022” introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmember Charles Allen.
By Don Allen Resnikoff
The DC Consumer Rights Coalition (DCCRC) is a non-profit organization with a 501(c)(3) IRS tax exemption that advances economic rights and financial inclusion of DC residents through research, education, advocacy, and community organization. DCCRC works with individual consumer advocates, poverty and consumer organizations, and grassroots members to press for policies that protect the District’s vulnerable residents. DCCRC also educates individuals on consumer issues and consumer rights, advocates for consumer interests, studies critical consumer issues, and works to build the consumer movement.
Consistent with that mission, DCCRC is an advocate for a fundamental principle of justice systems in democratic societies: court proceedings should be conducted in public view. Public access to judicial records is an important aspect of that principle. That is especially important in cases that have effects beyond the parties to the case—in particular, cases that involve defective products or dangerous environmental conditions that pose dangers to the general public. Unfortunately, that principle is ignored when a court agrees to the parties’ request to hide those dangers from the public, by allowing overbroad confidentiality clauses in settlement agreements, or by issuing overbroad protective orders.
DCCRC’s advocacy of public access to judicial records has included, among other things, joining with the DC Bar and Public Justuce in hosting a recent public forum on strategies lawyers can use to oppose overbroad confidentiality clauses in court-approved settlement agreements, and to oppose issuing overbroad court-ordered protective orders.
As an aspect of its broader advocacy of public access to judicial records, the DC Consumer Rights Coalition supports other public interest organizations who are advocating for the “Sunshine in Litigation Act of 2022” introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmember Charles Allen. We thank advocates at the National Consumers League, Public Justice and others for their advocacy leadership on these issues.
Following is an excerpt of a statement prepared by DCCRC for submission to the DC Council at the appropriate time:
Court-permitted secrecy has caused harm in an array of cases, such as cases related to the opioid epidemic. As pointed out by Councilmember Cheh in her letter submitting the proposed D.C. Sunshine in Litigation Act of 2022, individuals and governments began filing cases many years ago charging that opioid manufacturers had intentionally misled doctors about the dangers of prescription opioids. However, because judges in these cases agreed to the parties’ request to require that the court records remain under seal, the clear evidence of the manufacturers’ wrongdoing and of the dangers of opioids uncovered by the plaintiff parties was kept from the public, causing great harm.
Court permitted secrecy in the opioid and other cases involving danger to consumers hampers effective government oversight and enforcement. And it makes it needlessly more difficult for other individuals who have been harmed in similar ways to get justice. For them, getting justice means repeating all the same efforts to build a new case from scratch. That leads to the inefficiency of duplicative court cases with varying results.
Councilmember Cheh explains in her note to the DC Council that the proposed Act would put a stop to that kind of harm-causing secrecy. It would prohibit parties and courts from keeping information related to public dangers secret. It would still allow courts to protect sensitive private information that is not needed for public safety, like people’s personal medical and financial information, and the company’s trade secrets. But it would make sure that evidence of ongoing dangers to the public cannot remain hidden.
Several other states, including Florida, Louisiana, Virginia, Arkansas, and Washington, have already adopted similar laws, and California has similar legislation pending.
Opponents of “sunshine” laws argue that settlements might be harder if companies cannot settle in a way that keeps the evidence of consumer harm secret. It is not at all clear that the Act would really impact a company’s willingness to settle case. But a company that is causing harm should not be permitted to force someone who has suffered that harm to agree to keep that harm secret from the public as a price for getting their own justice.
In summary, we agree that many lives could be saved and much suffering could be prevented if corporations are not allowed to insist on secrecy orders in court settlements that hide information about product issues harmful to consumers. For that reason we join other public interest organizations in supporting the “Sunshine in Litigation Act of 2022” introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmember Charles Allen.
DC Court Won't Revive AG's Antitrust Suit Against Amazon
A District of Columbia Superior Court judge has denied the Washington attorney general's bid to reverse his decision tossing a complaint accusing Amazon of stifling e-commerce competition, saying the complaint relies on repeated and conclusory statements that lack factual information to support claims of anti-competitive conduct and harm.
The opinion is here:
https://eaccess.dccourts.gov/eaccess/search.page.3?x=lt1k7bWCUoLShGjCBBHn4HcdrcO5N4ZsaoJRXZIAkPc-XjbfgMe9OBsqMXIikKfc06gdY3t2n0816A1Vd2fi4q9eQ9A7c3JWGLg9HNLFBHIWeaBoMpWYZAjNUFNYRpAka7440fQEH6s0UyF2auR9y2hqqq5nZNQ8WaUc10qVFFA
Excerpt:
ORDER
This order addresses the newest chapter of anti-trust litigation between the District of Columbia and Amazon.com, Inc. It began on April 14, 2022, when the District of Columbia filed Plaintiff's Opposed Motion for Reconsideration, or in the Alternative, For Leave to Amend the Complaint or for a Written Order of Decision ("Motion for Reconsideration"). It gathered momentum on April 27, 2022, when the non-party U.S. Department of Justice submitted a Statement of Interest of the United States of America in Support of Plaintiff's Motion for Reconsideration. It became ripe after the Defendant lodged its opposition to reconsideration on April 28, 2022, and the District countered with a reply on May 5, 2022. For reasons below, the Motion for Reconsideration is denied.
Background
On March 25, 2021, the Plaintiff District of Columbia filed its original Complaint against Defendant Amazon.com, Inc. See Compl. On July 20, 2021, the Defendant filed an Opposed Motion to Dismiss Plaintiff District of Columbia's Complaint ("First Motion to Dismiss"). On September 10, 2021, the District filed a First Amended Complaint in response to the Defendant's motions. As a result, Defendant's First Motion to Dismiss was denied as moot. See Sept. 16, 2021 Order.
The Plaintiff's First Amended Complaint raised four claims against the Defendant.
These claims were (1) Agreements in Restraint of Trade (MFNs) In Violation of the D.C. Code§ 28-4502, (2) Agreements in Restraint of Trade (MMA) In Violation of the D.C. Code§ 28-4502,
(3) Illegal Maintenance of Monopoly in Violation ofD.C. Code§ 28-4503, and (4) Attempted Monopolization in Violation ofD.C. Code§ 28-4503.
The First Amended Complaint triggered a series of filings from both sides. On October 25, 2021, the Defendant lodged an Opposed Motion to Dismiss Plaintiff District of Columbia's Amended Complaint ("Second Motion to Dismiss"). On December 15, 2021, the District countered with a written opposition. At that point, the parties respectively filed replies and sur replies on January 21, 2022, February 10, 2022, and February 8, 2022. Subsequently, at a hearing held on March 18, 2022, Defendant's Second Motion to Dismiss was granted and this matter dismissed.
Now, Plaintiff moves the Court to reconsider the dismissal entered on March 18, 2022, grant Plaintiff leave to file a Second Amended Complaint, or to issue a written order of decision to memorialize the Court's March 18, 2022 ruling.
A District of Columbia Superior Court judge has denied the Washington attorney general's bid to reverse his decision tossing a complaint accusing Amazon of stifling e-commerce competition, saying the complaint relies on repeated and conclusory statements that lack factual information to support claims of anti-competitive conduct and harm.
The opinion is here:
https://eaccess.dccourts.gov/eaccess/search.page.3?x=lt1k7bWCUoLShGjCBBHn4HcdrcO5N4ZsaoJRXZIAkPc-XjbfgMe9OBsqMXIikKfc06gdY3t2n0816A1Vd2fi4q9eQ9A7c3JWGLg9HNLFBHIWeaBoMpWYZAjNUFNYRpAka7440fQEH6s0UyF2auR9y2hqqq5nZNQ8WaUc10qVFFA
Excerpt:
ORDER
This order addresses the newest chapter of anti-trust litigation between the District of Columbia and Amazon.com, Inc. It began on April 14, 2022, when the District of Columbia filed Plaintiff's Opposed Motion for Reconsideration, or in the Alternative, For Leave to Amend the Complaint or for a Written Order of Decision ("Motion for Reconsideration"). It gathered momentum on April 27, 2022, when the non-party U.S. Department of Justice submitted a Statement of Interest of the United States of America in Support of Plaintiff's Motion for Reconsideration. It became ripe after the Defendant lodged its opposition to reconsideration on April 28, 2022, and the District countered with a reply on May 5, 2022. For reasons below, the Motion for Reconsideration is denied.
Background
On March 25, 2021, the Plaintiff District of Columbia filed its original Complaint against Defendant Amazon.com, Inc. See Compl. On July 20, 2021, the Defendant filed an Opposed Motion to Dismiss Plaintiff District of Columbia's Complaint ("First Motion to Dismiss"). On September 10, 2021, the District filed a First Amended Complaint in response to the Defendant's motions. As a result, Defendant's First Motion to Dismiss was denied as moot. See Sept. 16, 2021 Order.
The Plaintiff's First Amended Complaint raised four claims against the Defendant.
These claims were (1) Agreements in Restraint of Trade (MFNs) In Violation of the D.C. Code§ 28-4502, (2) Agreements in Restraint of Trade (MMA) In Violation of the D.C. Code§ 28-4502,
(3) Illegal Maintenance of Monopoly in Violation ofD.C. Code§ 28-4503, and (4) Attempted Monopolization in Violation ofD.C. Code§ 28-4503.
The First Amended Complaint triggered a series of filings from both sides. On October 25, 2021, the Defendant lodged an Opposed Motion to Dismiss Plaintiff District of Columbia's Amended Complaint ("Second Motion to Dismiss"). On December 15, 2021, the District countered with a written opposition. At that point, the parties respectively filed replies and sur replies on January 21, 2022, February 10, 2022, and February 8, 2022. Subsequently, at a hearing held on March 18, 2022, Defendant's Second Motion to Dismiss was granted and this matter dismissed.
Now, Plaintiff moves the Court to reconsider the dismissal entered on March 18, 2022, grant Plaintiff leave to file a Second Amended Complaint, or to issue a written order of decision to memorialize the Court's March 18, 2022 ruling.
DC Bar Brief Encounters! episode is now live. Information is below:
Gun Control and the Supreme Court
Public interest advocate Bert Foer on the background and implications of the Supreme Court’s decision in New York Rifle and Pistol Association v. Bruen, argued last November and announced on June 23, 2022.
Listen and subscribe to Brief Encounters at https://anchor.fm/DCBar or wherever you access your podcasts.
Gun Control and the Supreme Court
Public interest advocate Bert Foer on the background and implications of the Supreme Court’s decision in New York Rifle and Pistol Association v. Bruen, argued last November and announced on June 23, 2022.
Listen and subscribe to Brief Encounters at https://anchor.fm/DCBar or wherever you access your podcasts.
Bernie Sanders asks: To what extent Is the “Chips” Act really about preserving US competitiveness in semiconductors?
The Wall Street Journal reports that a $280 billion package of subsidies and research funding to boost U.S. competitiveness in semiconductors and advanced technology is on track to pass Congress. Senate Majority Leader Chuck Schumer is among those who support incentives to US semiconductor makers, ostensibly to increase US competitiveness.
Senator Bernie Sanders is not having it. In remarks issued on July 25, he said that the effect of the 1000+ page bill is for American taxpayers to provide the micro-chip industry, including Intel, with a blank check of over $76 billion at a time when semiconductor companies are making tens of billions of dollars in profits and paying their executives exorbitant compensation packages. In addition, the semiconductor companies have, with US government support, undermined US competitiveness by investing in Chinese manufacturing and sending US manufacturing jobs overseas. Here is an excerpt from the Sanders remarks:
+++
Over the last 20 years, the micro-chip industry has shut down over 780 manufacturing plants and other establishments in the United States and eliminated 150,000 American jobs while moving most of its production overseas after receiving over $9.5 billion in government subsidies and loans.
Let me give you just a few examples:
Between 2010 and 2014, Intel laid off approximately 1,400 workers from the Rio Rancho, New Mexico chip facility and offshored 1,000 jobs to Israel.
According to the Oregon Bureau of Labor and Industry, Intel laid off more than 1,000 workers in Oregon between 2015 and 2016. They specifically noted that the company was offshoring jobs to Israel and that workers were required to train their replacements in India and Costa Rica before being laid off when their jobs were shipped there.
Texas Instruments outsourced 400 jobs from their Houston, Texas manufacturing facility to the Philippines in 2013.
Micron Technology has repeatedly cut jobs in Boise, Idaho, including 1,100 in 2003, another 1,100 in 2007, and 1,500 in 2008. In 2009, the company stopped manufacturing some types of chips entirely and laid off 2,000 workers.
In other words, in order to make more profits, these companies took government money and used it to ship good-paying jobs abroad. Now, as a reward for causing this crisis, these same companies are in line to receive a massive taxpayer handout to undo the damage that they did. That is simply unacceptable.
In total, it has been estimated that 5 major semi-conductor companies will receive the lion’s share of this taxpayer handout: Intel, Texas Instruments, Micron Technology, Global Foundries, and Samsung. These 5 companies made $70 billion in profits last year.
The company that will likely benefit the most from this taxpayer assistance is Intel.
In 2021, Intel made nearly $20 billion in profits. During the pandemic, Intel had enough money to spend $16.6 billion, not on research and development, not in building new plants in America, but on buying back its own stock to reward its executives and wealthy shareholders. So here is the absurd moment that we are at. It is estimated that Intel will receive between $20 and $30 billion in federal funding with no strings attached in order to build new plants. And yet, within the last several years, this same company spent over $16 billion on stock buybacks. And there is no guarantee in this bill that they will not continue to do stock buybacks.
Over the past 20 years, Intel spent over $100 million on lobbying and campaign contributions. That’s a heck of an investment. For $100 million in lobbying and campaign contributions you receive at least $20 billion in corporate welfare. Not a bad deal.
A little over a week ago, the CEO of Intel, Pat Gelsinger, did an interview on CNBC’s Squawk Box. And I think it tells us everything we want to know about oligarchy, arrogance and the state of American politics.
And this is what Mr. Gelsinger said:
“My message to congressional leaders is ‘Hey, if I’m not done with the job, I don’t get to go home. Neither should you. Do not go home for August recess until you have passed the chips act. Because I and others in the industry will make investment decisions. And do you want those investments in the US or are we simply not competitive enough to do them here and we need to go to Europe or Asia for those? Get the job done. Do not go home for August recess without getting these bills passed.”
M. President, let’s be clear. The CEO of Intel received a $179 million compensation package last year. And now what he is saying is that if you don’t give my industry a $76 billion blank check and my company up to $30 billion, despite our profound love for our country and our love of American workers and the needs of the military we are prepared to go to Europe or Asia where we may be able to make even more money.
As I said last week, I am, thankfully, not a lawyer, but that sure sounds like extortion to me. But Mr. Gelsinger’s words sure sound like extortion to me. What he is saying is that if you don’t give his industry $76 billion in corporate welfare, despite the needs of the military for advanced microchips, despite the needs of the medical industry for advanced microchips, despite the needs of our entire economy for advanced microchips, he is threatening to abandon America and move abroad.
Well, I have a few questions for Mr. Gelsinger and the other micro-chip CEOs:
If Intel and the others receive a corporate welfare check from the taxpayers of America are they willing to commit today that their companies will not outsource American jobs overseas?
If this legislation passes, will Intel and the others commit today that they will not spend another penny on stock buybacks to enrich wealthy shareholders but will instead spend the lion’s share of their profits to create jobs in the United States of America?
If this legislation goes into effect, will Intel and the others commit today that they will stay neutral in any union organizing campaign like the one being waged at Intel’s micro-chip plant in Hillsboro, Oregon?
If this legislation goes into effect, will Intel and the others commit today that they are prepared to issue warrants to the federal government so that the taxpayers of America get a reasonable return on their investments?
M. President, if Intel and the others were prepared to say “yes” to any of these questions they would not be lobbying against my amendment to impose these conditions to the CHIPS Act. And that, to my mind, is absolutely unacceptable.
Further, I say to my colleagues who claim that this bill is supposed to make us “more competitive” with China, guess what?
Since 2008, Intel has invested at least $700 million in tech companies in China including two Chinese semi-conductor start-ups Pro-Plus and Spectrum Materials.
Cite: https://www.sanders.senate.gov/press-releases/prepared-remarks-sanders-questions-why-u-s-must-join-the-club-and-give-blank-checks-to-microchip-companies-while-ignoring-other-major-issues/
Posting by Don Allen Resnikoff
PS. I do not endorse Sanders’ thought that he is thankful not to be a lawyer. I believe that many lawyers are benign or even positive forces. DAR
The Wall Street Journal reports that a $280 billion package of subsidies and research funding to boost U.S. competitiveness in semiconductors and advanced technology is on track to pass Congress. Senate Majority Leader Chuck Schumer is among those who support incentives to US semiconductor makers, ostensibly to increase US competitiveness.
Senator Bernie Sanders is not having it. In remarks issued on July 25, he said that the effect of the 1000+ page bill is for American taxpayers to provide the micro-chip industry, including Intel, with a blank check of over $76 billion at a time when semiconductor companies are making tens of billions of dollars in profits and paying their executives exorbitant compensation packages. In addition, the semiconductor companies have, with US government support, undermined US competitiveness by investing in Chinese manufacturing and sending US manufacturing jobs overseas. Here is an excerpt from the Sanders remarks:
+++
Over the last 20 years, the micro-chip industry has shut down over 780 manufacturing plants and other establishments in the United States and eliminated 150,000 American jobs while moving most of its production overseas after receiving over $9.5 billion in government subsidies and loans.
Let me give you just a few examples:
Between 2010 and 2014, Intel laid off approximately 1,400 workers from the Rio Rancho, New Mexico chip facility and offshored 1,000 jobs to Israel.
According to the Oregon Bureau of Labor and Industry, Intel laid off more than 1,000 workers in Oregon between 2015 and 2016. They specifically noted that the company was offshoring jobs to Israel and that workers were required to train their replacements in India and Costa Rica before being laid off when their jobs were shipped there.
Texas Instruments outsourced 400 jobs from their Houston, Texas manufacturing facility to the Philippines in 2013.
Micron Technology has repeatedly cut jobs in Boise, Idaho, including 1,100 in 2003, another 1,100 in 2007, and 1,500 in 2008. In 2009, the company stopped manufacturing some types of chips entirely and laid off 2,000 workers.
In other words, in order to make more profits, these companies took government money and used it to ship good-paying jobs abroad. Now, as a reward for causing this crisis, these same companies are in line to receive a massive taxpayer handout to undo the damage that they did. That is simply unacceptable.
In total, it has been estimated that 5 major semi-conductor companies will receive the lion’s share of this taxpayer handout: Intel, Texas Instruments, Micron Technology, Global Foundries, and Samsung. These 5 companies made $70 billion in profits last year.
The company that will likely benefit the most from this taxpayer assistance is Intel.
In 2021, Intel made nearly $20 billion in profits. During the pandemic, Intel had enough money to spend $16.6 billion, not on research and development, not in building new plants in America, but on buying back its own stock to reward its executives and wealthy shareholders. So here is the absurd moment that we are at. It is estimated that Intel will receive between $20 and $30 billion in federal funding with no strings attached in order to build new plants. And yet, within the last several years, this same company spent over $16 billion on stock buybacks. And there is no guarantee in this bill that they will not continue to do stock buybacks.
Over the past 20 years, Intel spent over $100 million on lobbying and campaign contributions. That’s a heck of an investment. For $100 million in lobbying and campaign contributions you receive at least $20 billion in corporate welfare. Not a bad deal.
A little over a week ago, the CEO of Intel, Pat Gelsinger, did an interview on CNBC’s Squawk Box. And I think it tells us everything we want to know about oligarchy, arrogance and the state of American politics.
And this is what Mr. Gelsinger said:
“My message to congressional leaders is ‘Hey, if I’m not done with the job, I don’t get to go home. Neither should you. Do not go home for August recess until you have passed the chips act. Because I and others in the industry will make investment decisions. And do you want those investments in the US or are we simply not competitive enough to do them here and we need to go to Europe or Asia for those? Get the job done. Do not go home for August recess without getting these bills passed.”
M. President, let’s be clear. The CEO of Intel received a $179 million compensation package last year. And now what he is saying is that if you don’t give my industry a $76 billion blank check and my company up to $30 billion, despite our profound love for our country and our love of American workers and the needs of the military we are prepared to go to Europe or Asia where we may be able to make even more money.
As I said last week, I am, thankfully, not a lawyer, but that sure sounds like extortion to me. But Mr. Gelsinger’s words sure sound like extortion to me. What he is saying is that if you don’t give his industry $76 billion in corporate welfare, despite the needs of the military for advanced microchips, despite the needs of the medical industry for advanced microchips, despite the needs of our entire economy for advanced microchips, he is threatening to abandon America and move abroad.
Well, I have a few questions for Mr. Gelsinger and the other micro-chip CEOs:
If Intel and the others receive a corporate welfare check from the taxpayers of America are they willing to commit today that their companies will not outsource American jobs overseas?
If this legislation passes, will Intel and the others commit today that they will not spend another penny on stock buybacks to enrich wealthy shareholders but will instead spend the lion’s share of their profits to create jobs in the United States of America?
If this legislation goes into effect, will Intel and the others commit today that they will stay neutral in any union organizing campaign like the one being waged at Intel’s micro-chip plant in Hillsboro, Oregon?
If this legislation goes into effect, will Intel and the others commit today that they are prepared to issue warrants to the federal government so that the taxpayers of America get a reasonable return on their investments?
M. President, if Intel and the others were prepared to say “yes” to any of these questions they would not be lobbying against my amendment to impose these conditions to the CHIPS Act. And that, to my mind, is absolutely unacceptable.
Further, I say to my colleagues who claim that this bill is supposed to make us “more competitive” with China, guess what?
Since 2008, Intel has invested at least $700 million in tech companies in China including two Chinese semi-conductor start-ups Pro-Plus and Spectrum Materials.
Cite: https://www.sanders.senate.gov/press-releases/prepared-remarks-sanders-questions-why-u-s-must-join-the-club-and-give-blank-checks-to-microchip-companies-while-ignoring-other-major-issues/
Posting by Don Allen Resnikoff
PS. I do not endorse Sanders’ thought that he is thankful not to be a lawyer. I believe that many lawyers are benign or even positive forces. DAR
Bert Foer’s podcast for the DC Bar on 2nd Amendment gun rights
Recently Bert Foer recorded a podcast on 2nd Amendment gun rights for the DC Bar. It will be available in a few weeks. (We’ll circulate the link when its available.) He focused on the recent US Supreme Court decision in NY State Rifle & Pistol Assn v. Bruen .
His presentation provided some background, including earlier cases Heller and McDonald v. Chicago, which established an individual right to keep a handgun at home for self-defense.
Bert explained that the Bruen case involved state regulation of open and concealed carry of guns. The majority opinion, by Justice Thomas, held that New York’s requirements that the gun owner show a special need to carry a gun violates the 14th Amendment, by preventing law-abiding citizens with ordinary self-defense needs from exercising their Second Amendment right to keep and bear arms in public for self-defense.
The podcast discussion includes further information about the Thomas opinion, the additional opinions by Alito, Kavanaugh Roberts, and Barrett, as well as the dissent by Breyer, which was joined by Sotomayor and Kagan.
The dissenters said that it is wrong for the majority opinion to focus nearly exclusively on history, which means ignoring governmental interests. Balancing the lawful use of guns against the danger of firearms is primarily the responsibility of elected bodies, not judges. The dissenters said that the majority decision gives little guidance to lower courts, and that the majority reliance on history is an approach that will permit judges to reach outcomes they prefer, cloaking those outcomes in language of history.
The podcast discussion also concerned implications for federal law, state law, and private action.
One particularly interesting question Bert discussed is whether there remains a private right to be free from guns on one’s property. That is an issue that has not yet been broadly addressed. “No guns allowed” might be the policy of leading national businesses, as well as small businesses, hotels, shopping centers and malls, banks, restaurants and bars, apartment complexes, law firms, hospitals, doctors’ and dentist offices, to give a few examples. If such private initiatives are widespread and enforced, it will be highly inconvenient to carry a gun in public.
New York State’s current post-Bruen law makes it a crime to carry a firearm on private property, unless the property owner allows it. Other states may follow the New York example, which will likely be challenged, but a popular campaign to make the private sector gun-free may well be effective in the absence of legislation.
I think that Bert’s argument for a private campaign is a strong one. For businesses, it is an aspect of maintaining a non-hostile, safe work environment. For customers, the concerns for safety and stress when entering a place of business are similar. It is frightening to most of us to be in a space where there are possibly many guns, visible or concealed, so there would seem to be a natural and potentially powerful constituency awaiting mobilization for a campaign to keep guns out of most private areas.
There would be some gun-owners who claim their Second Amendment rights are violated by private initiatives banning guns, so court challenges to this ancient and widely accepted right against trespass could be expected. But, as Bert points out, there are many precedents for privately imposed limitations that may be imposed on entry onto private property.
I agree with Bert’s idea that we should be able to act on our own as private citizens to limit the carnage by gunfire that the Supreme Court has made ever more likely.
Posting by Don Allen Resnikoff
Recently Bert Foer recorded a podcast on 2nd Amendment gun rights for the DC Bar. It will be available in a few weeks. (We’ll circulate the link when its available.) He focused on the recent US Supreme Court decision in NY State Rifle & Pistol Assn v. Bruen .
His presentation provided some background, including earlier cases Heller and McDonald v. Chicago, which established an individual right to keep a handgun at home for self-defense.
Bert explained that the Bruen case involved state regulation of open and concealed carry of guns. The majority opinion, by Justice Thomas, held that New York’s requirements that the gun owner show a special need to carry a gun violates the 14th Amendment, by preventing law-abiding citizens with ordinary self-defense needs from exercising their Second Amendment right to keep and bear arms in public for self-defense.
The podcast discussion includes further information about the Thomas opinion, the additional opinions by Alito, Kavanaugh Roberts, and Barrett, as well as the dissent by Breyer, which was joined by Sotomayor and Kagan.
The dissenters said that it is wrong for the majority opinion to focus nearly exclusively on history, which means ignoring governmental interests. Balancing the lawful use of guns against the danger of firearms is primarily the responsibility of elected bodies, not judges. The dissenters said that the majority decision gives little guidance to lower courts, and that the majority reliance on history is an approach that will permit judges to reach outcomes they prefer, cloaking those outcomes in language of history.
The podcast discussion also concerned implications for federal law, state law, and private action.
One particularly interesting question Bert discussed is whether there remains a private right to be free from guns on one’s property. That is an issue that has not yet been broadly addressed. “No guns allowed” might be the policy of leading national businesses, as well as small businesses, hotels, shopping centers and malls, banks, restaurants and bars, apartment complexes, law firms, hospitals, doctors’ and dentist offices, to give a few examples. If such private initiatives are widespread and enforced, it will be highly inconvenient to carry a gun in public.
New York State’s current post-Bruen law makes it a crime to carry a firearm on private property, unless the property owner allows it. Other states may follow the New York example, which will likely be challenged, but a popular campaign to make the private sector gun-free may well be effective in the absence of legislation.
I think that Bert’s argument for a private campaign is a strong one. For businesses, it is an aspect of maintaining a non-hostile, safe work environment. For customers, the concerns for safety and stress when entering a place of business are similar. It is frightening to most of us to be in a space where there are possibly many guns, visible or concealed, so there would seem to be a natural and potentially powerful constituency awaiting mobilization for a campaign to keep guns out of most private areas.
There would be some gun-owners who claim their Second Amendment rights are violated by private initiatives banning guns, so court challenges to this ancient and widely accepted right against trespass could be expected. But, as Bert points out, there are many precedents for privately imposed limitations that may be imposed on entry onto private property.
I agree with Bert’s idea that we should be able to act on our own as private citizens to limit the carnage by gunfire that the Supreme Court has made ever more likely.
Posting by Don Allen Resnikoff
Washingtonpost: https://www.washingtonpost.com/dc-md-va/2022/06/30/lawsuit-guns-dc-metro-buses/
Gun owners sue D.C., demanding to carry firearms on Metro
The plaintiffs say a recent Supreme Court ruling opens the door for guns on buses and trains.
By Paul Duggan
EXCERPT
Updated June 30, 2022 at 9:26 p.m. EDT|Published June 30, 2022 at 7:05 p.m. EDT
Four men with permits to carry concealed handguns in the District sued the city on Thursday, arguing that the ban on carrying firearms in the Metro transit system is unconstitutional under a recent U.S. Supreme Court ruling.
The lawsuit, filed in U.S. District Court in Washington, cites the Supreme Court’s June 23 decision that makes it harder for governments to restrict the carrying of pistols outside the home. Writing for the court’s 6-to-3 conservative majority, Justice Clarence Thomas said that to ban concealed handguns in a particular place, “the government must demonstrate that the regulation is consistent with this Nation’s historical tradition of firearm regulation.”
The District prohibits people with concealed-carry permits to carry weapons in more than a dozen locations designated “sensitive areas,” including schools, government buildings, polling places, medical offices and businesses serving alcohol, in addition to the transit system. In the lawsuit filed Thursday, the plaintiffs argue that Metro should be removed from the list.
“Public transportation vehicles and stations, essentially the D.C. Metro, share few, if any, characteristics supporting the designation of other locations as sensitive areas,” the lawsuit says.
Unlike schools and government offices, for example, the Metro system is “not populated with individuals who would be high-value targets to a terrorist or active killer,” the plaintiffs contend. “They are not landmarks or symbols of our nation which would be inviting to terrorists or active killers. … There is not a tradition or history of prohibitions of carrying firearms on public transportation vehicles. In short, there is no basis to label the Metro as a sensitive area.”
The office of D.C. Attorney General Karl A. Racine (D) vowed to fight the lawsuit — one of many such cases that are likely to arise across the country in light of the Supreme Court’s ruling last week in New York State Rifle & Pistol Assoc. v. Bruen.
Gun owners sue D.C., demanding to carry firearms on Metro
The plaintiffs say a recent Supreme Court ruling opens the door for guns on buses and trains.
By Paul Duggan
EXCERPT
Updated June 30, 2022 at 9:26 p.m. EDT|Published June 30, 2022 at 7:05 p.m. EDT
Four men with permits to carry concealed handguns in the District sued the city on Thursday, arguing that the ban on carrying firearms in the Metro transit system is unconstitutional under a recent U.S. Supreme Court ruling.
The lawsuit, filed in U.S. District Court in Washington, cites the Supreme Court’s June 23 decision that makes it harder for governments to restrict the carrying of pistols outside the home. Writing for the court’s 6-to-3 conservative majority, Justice Clarence Thomas said that to ban concealed handguns in a particular place, “the government must demonstrate that the regulation is consistent with this Nation’s historical tradition of firearm regulation.”
The District prohibits people with concealed-carry permits to carry weapons in more than a dozen locations designated “sensitive areas,” including schools, government buildings, polling places, medical offices and businesses serving alcohol, in addition to the transit system. In the lawsuit filed Thursday, the plaintiffs argue that Metro should be removed from the list.
“Public transportation vehicles and stations, essentially the D.C. Metro, share few, if any, characteristics supporting the designation of other locations as sensitive areas,” the lawsuit says.
Unlike schools and government offices, for example, the Metro system is “not populated with individuals who would be high-value targets to a terrorist or active killer,” the plaintiffs contend. “They are not landmarks or symbols of our nation which would be inviting to terrorists or active killers. … There is not a tradition or history of prohibitions of carrying firearms on public transportation vehicles. In short, there is no basis to label the Metro as a sensitive area.”
The office of D.C. Attorney General Karl A. Racine (D) vowed to fight the lawsuit — one of many such cases that are likely to arise across the country in light of the Supreme Court’s ruling last week in New York State Rifle & Pistol Assoc. v. Bruen.
Matt Stoller on antitrust enforcement and the Biden choice for DC Circuit Court Judge
(From Stoller's 7-12-2022 free newsletter)
In other words, while enforcers have started to change their thinking around antitrust, judges on both sides of the aisle have not. If Biden had a coherent philosophy, to complement assertive enforcers like Khan and Kanter he would also be nominating candidates for judicial slots that oppose narrow views of antitrust law. That is, in reverse, how Reagan eroded the law, by both putting enforcers like James Miller and Bill Baxter at the agencies, and by nominating people like Bork to the judiciary.
But Biden is not doing that. This is not obvious if you just look at his one Supreme Court nominee, Ketanji Brown Jackson, who is not a corporate lawyer and will likely have a reasonable posture on market power questions. Below the surface, however, there are a lot of questionable picks.
For instance, Biden just nominated to D.C. Circuit a 35 year-old Google lawyer named Brad Garcia. Garcia is a former Elena Kagan clerk from the monopoly friendly big law firm O’Melveny, and aside from Google, he has also represented Ford, Fidelity, and China Agritech in cases that fortify corporate power. Like most corporate lawyers with political ambitions, Garcia has done a bunch of pro bono cases - in this instance for prisoners and immigration - but his paying work was on behalf of dominant firms. This choice is a big deal - the most important regulatory court outside of the Supreme Court is the D.C. circuit...
(From Stoller's 7-12-2022 free newsletter)
In other words, while enforcers have started to change their thinking around antitrust, judges on both sides of the aisle have not. If Biden had a coherent philosophy, to complement assertive enforcers like Khan and Kanter he would also be nominating candidates for judicial slots that oppose narrow views of antitrust law. That is, in reverse, how Reagan eroded the law, by both putting enforcers like James Miller and Bill Baxter at the agencies, and by nominating people like Bork to the judiciary.
But Biden is not doing that. This is not obvious if you just look at his one Supreme Court nominee, Ketanji Brown Jackson, who is not a corporate lawyer and will likely have a reasonable posture on market power questions. Below the surface, however, there are a lot of questionable picks.
For instance, Biden just nominated to D.C. Circuit a 35 year-old Google lawyer named Brad Garcia. Garcia is a former Elena Kagan clerk from the monopoly friendly big law firm O’Melveny, and aside from Google, he has also represented Ford, Fidelity, and China Agritech in cases that fortify corporate power. Like most corporate lawyers with political ambitions, Garcia has done a bunch of pro bono cases - in this instance for prisoners and immigration - but his paying work was on behalf of dominant firms. This choice is a big deal - the most important regulatory court outside of the Supreme Court is the D.C. circuit...
California promotes local production of low cost insulin
The state’s budget allocates $100 million to make insulin more cheaply. California Gov. Gavin Newsom, a Democrat, said $50 million will be put toward a California insulin-manufacturing facility and $50 million will go toward the development of low-cost insulin products.
“Nothing epitomizes market failures more than the cost of insulin,” Mr. Newsom said in a video on Thursday explaining the plan. See https://twitter.com/CAgovernor/status/1545121996123426816
The state’s budget allocates $100 million to make insulin more cheaply. California Gov. Gavin Newsom, a Democrat, said $50 million will be put toward a California insulin-manufacturing facility and $50 million will go toward the development of low-cost insulin products.
“Nothing epitomizes market failures more than the cost of insulin,” Mr. Newsom said in a video on Thursday explaining the plan. See https://twitter.com/CAgovernor/status/1545121996123426816
Law Reform
to Prohibit Overly Broad Secrecy Orders in Litigated Cases
A free remote Zoom program will be held July 20, 2022 1:15-2:45 PM --
Hosted by DC Consumer Rights Coalition and co-sponsored by the DC Bar’s
Antitrust and Consumer Community, and the DC Bar’s DC Affairs Community.
This is a free program – there is no charge for attendance.
To sign up for the program and get a Zoom link, send a request by email to [email protected] with “7-20 right to know” in the subject line. More materials will be emailed to registered participants before the program.
Speakers:
Leah Nicholls and Phillip Robinson, Public Justice – Access to Justice Project
Program coordinator: Don Allen Resnikoff
Attorneys Nicholls and Robinson will speak in support of local “right to know” law reform.
The program will specifically discuss:
to Prohibit Overly Broad Secrecy Orders in Litigated Cases
A free remote Zoom program will be held July 20, 2022 1:15-2:45 PM --
Hosted by DC Consumer Rights Coalition and co-sponsored by the DC Bar’s
Antitrust and Consumer Community, and the DC Bar’s DC Affairs Community.
This is a free program – there is no charge for attendance.
To sign up for the program and get a Zoom link, send a request by email to [email protected] with “7-20 right to know” in the subject line. More materials will be emailed to registered participants before the program.
Speakers:
Leah Nicholls and Phillip Robinson, Public Justice – Access to Justice Project
Program coordinator: Don Allen Resnikoff
Attorneys Nicholls and Robinson will speak in support of local “right to know” law reform.
The program will specifically discuss:
- The traditional role of the ‘public courthouse’ and right of the public to observe and review information disclosed in litigation.
- Why court secrecy is important and why advocates should care, including examples of the impact of overbroad confidentiality orders.
- Different means and methods to curb overbroad protective orders established in different jurisdictions.
- The current standard in DC courts.
- What local courts and attorneys can do to ensure a fair balance between protecting genuinely sensitive information, such as true trade secrets and the public’s right to know information disclosed in court proceedings.
Are local DC gas wholesalers and retailers gouging on price?
Rich Lowery of the NY Post apparently doesn’t think that could be. He called out “shameless demagoguery” and “economic illiteracy” when President Biden urged “companies running gas stations and setting prices at the pump” to “bring down the price you are charging at the pump to reflect the cost you’re paying for the product.” See https://nypost.com/2022/07/05/biden-blasting-gas-stations-economic-illiteracy-or-shameless-demagoguery/
But economic analysis turns on facts. For a local example, in the District of Columbia Gas Buddy reports for 7/6/2022 that several stations in DC are charging $5.05 per gallon, while other stations in DC are charging prices like $4.45, 4.54, and $4.69. See https://www.gasbuddy.com/gaspricemap?lat=38.94031259746692&lng=-77.00923321831054&z=13
For a further local example, a 2013 Washington Post article by Mike DeBonis explains that one corporate wholesaler group had exclusive supply agreements with roughly 60 percent of the 107 gasoline retailers operating in the city, according to a lawsuit brought by the DC Attorney General: “As a result of these agreements, the [Mamo companies] set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents and others … of the benefits of competition.” https://www.washingtonpost.com/blogs/mike-debonis/wp/2013/08/27/d-c-attorney-general-takes-new-aim-at-gas-mogul-joe-mamo/
Is it certain on these facts that some DC gasoline station retailers and wholesalers are behaving badly, or illegally, or that government intervention is needed? Not necessarily. It can be argued that posted prices and Gas Buddy reporting mean that competition can work, and drivers can drive a few minutes to benefit from lower prices. Also, perhaps rents or other costs of doing business explain retail price discrepancies.
Direct or indirect power over retail prices by a dominant local wholesaler may or may not be a basis for a finding of bad or illegal behavior, depending on the fact details.
But, it is hardly “economic illiteracy” or worse for the DC AG to be concerned by price discrepancies, retail prices that do not reflect lower costs, and apparent dominance by a local wholesaler.
Even the simple set of facts from Gas Buddy suggests an idea worth exploring about the profits being made by those stations charging $5.05 per gallon rather than, say, $4.70 a gallon. Unless the $5.05 stations have decided to buy gas from local wholesale terminals at much higher prices than the $4.70 gas stations, the $5.05 gas stations might be making about 35 cents more per gallon than other stations. The Economics 101 principle in play here is that more may actually be more.
In 2020 DC AG Racine sued Capitol Petroleum, a major DC gasoline seller, alleging price gouging. Borrowing from the wording of the AG’s press release, Racine filed a lawsuit against Capitol Petroleum Group, LLC (CPG), a leading retailer and distributor of gasoline in the District of Columbia, as well as several affiliated companies, for illegal price gouging during the District’s COVID-19 emergency. The Office of the Attorney General’s (OAG) investigation revealed that even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District. OAG also alleged that CPG and its affiliates, Anacostia Realty, LLC, and DAG Petroleum Suppliers, LLC, unfairly increased profit margins they earned on gas distribution to other retailers. “With this lawsuit, OAG is seeking a court order to stop CPG from violating the District’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices, and civil penalties.”
Whether illegal price gouging has occurred is a technical legal question beyond the scope of this brief note. The point here is simply that great price discrepancies raise concerns that are reasonable for an AG to explore. For those interested in the legal issues, a copy the DC AG’s price gouging complaint is available at: https://oag.dc.gov/sites/default/files/2020-11/Capitol-Petroleum-Group-Complaint.pdf
With regard to the 2013 DC AG lawsuit mentioned above, Washington Post reporter Mike DeBonis explained that the lawsuit targeted “exclusive-supply agreements” between the most powerful local gasoline wholesaler and the independent dealers who operated wholesaler-owned stations. ExxonMobil was also named as a defendant in the case, as it established the agreements in question before selling 29 stations to wholesaler-station operator Mamo in 2009, and could still enforce them through its supply contracts with distributors.
The 2013 AG lawsuit never resulted in an enforceable judgment in DC’s favor, but instead followed a tangled procedural history that is beyond the scope of this note, as are the precise merits or demerits of the case.
But the bottom-line point is clear. It is reasonable, and not an exercise in economics 101 illiteracy to worry that in the District of Columbia area it might be true that some gas sellers are selling gas at retail prices that are much more above cost than are other retailers. They may be doing it because of issues of market power. That is, they do it because they can.
The fact points drawn from the District of Columbia experience are hardly unique. Similar retail pricing variations are reported by Gas Buddy throughout the US, and a number of US metropolitan areas have powerful gasoline wholesalers.
It is neither demagoguery nor a failure to grasp Econ 101 principles to think that State Attorneys General should be concerned and conduct investigations when some local gas retailers charge much more than others, when retail prices do not decline to reflect lower supply costs, or when local wholesalers appear to directly or indirectly control retail prices of a high percentage of retailers.
More broadly, there may be good reason for AG investigation whenever retail gas prices are not responsive and proportionate to changes in the price of supply. Mr. Lowery’s suggestion that such investigation puts “shameless demagoguery” and “economic illiteracy” in play in fact reflects his tendency to demagoguery and ignoring relevant facts that are in plain sight.
by Don Allen Resnikoff 7-9
Rich Lowery of the NY Post apparently doesn’t think that could be. He called out “shameless demagoguery” and “economic illiteracy” when President Biden urged “companies running gas stations and setting prices at the pump” to “bring down the price you are charging at the pump to reflect the cost you’re paying for the product.” See https://nypost.com/2022/07/05/biden-blasting-gas-stations-economic-illiteracy-or-shameless-demagoguery/
But economic analysis turns on facts. For a local example, in the District of Columbia Gas Buddy reports for 7/6/2022 that several stations in DC are charging $5.05 per gallon, while other stations in DC are charging prices like $4.45, 4.54, and $4.69. See https://www.gasbuddy.com/gaspricemap?lat=38.94031259746692&lng=-77.00923321831054&z=13
For a further local example, a 2013 Washington Post article by Mike DeBonis explains that one corporate wholesaler group had exclusive supply agreements with roughly 60 percent of the 107 gasoline retailers operating in the city, according to a lawsuit brought by the DC Attorney General: “As a result of these agreements, the [Mamo companies] set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents and others … of the benefits of competition.” https://www.washingtonpost.com/blogs/mike-debonis/wp/2013/08/27/d-c-attorney-general-takes-new-aim-at-gas-mogul-joe-mamo/
Is it certain on these facts that some DC gasoline station retailers and wholesalers are behaving badly, or illegally, or that government intervention is needed? Not necessarily. It can be argued that posted prices and Gas Buddy reporting mean that competition can work, and drivers can drive a few minutes to benefit from lower prices. Also, perhaps rents or other costs of doing business explain retail price discrepancies.
Direct or indirect power over retail prices by a dominant local wholesaler may or may not be a basis for a finding of bad or illegal behavior, depending on the fact details.
But, it is hardly “economic illiteracy” or worse for the DC AG to be concerned by price discrepancies, retail prices that do not reflect lower costs, and apparent dominance by a local wholesaler.
Even the simple set of facts from Gas Buddy suggests an idea worth exploring about the profits being made by those stations charging $5.05 per gallon rather than, say, $4.70 a gallon. Unless the $5.05 stations have decided to buy gas from local wholesale terminals at much higher prices than the $4.70 gas stations, the $5.05 gas stations might be making about 35 cents more per gallon than other stations. The Economics 101 principle in play here is that more may actually be more.
In 2020 DC AG Racine sued Capitol Petroleum, a major DC gasoline seller, alleging price gouging. Borrowing from the wording of the AG’s press release, Racine filed a lawsuit against Capitol Petroleum Group, LLC (CPG), a leading retailer and distributor of gasoline in the District of Columbia, as well as several affiliated companies, for illegal price gouging during the District’s COVID-19 emergency. The Office of the Attorney General’s (OAG) investigation revealed that even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District. OAG also alleged that CPG and its affiliates, Anacostia Realty, LLC, and DAG Petroleum Suppliers, LLC, unfairly increased profit margins they earned on gas distribution to other retailers. “With this lawsuit, OAG is seeking a court order to stop CPG from violating the District’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices, and civil penalties.”
Whether illegal price gouging has occurred is a technical legal question beyond the scope of this brief note. The point here is simply that great price discrepancies raise concerns that are reasonable for an AG to explore. For those interested in the legal issues, a copy the DC AG’s price gouging complaint is available at: https://oag.dc.gov/sites/default/files/2020-11/Capitol-Petroleum-Group-Complaint.pdf
With regard to the 2013 DC AG lawsuit mentioned above, Washington Post reporter Mike DeBonis explained that the lawsuit targeted “exclusive-supply agreements” between the most powerful local gasoline wholesaler and the independent dealers who operated wholesaler-owned stations. ExxonMobil was also named as a defendant in the case, as it established the agreements in question before selling 29 stations to wholesaler-station operator Mamo in 2009, and could still enforce them through its supply contracts with distributors.
The 2013 AG lawsuit never resulted in an enforceable judgment in DC’s favor, but instead followed a tangled procedural history that is beyond the scope of this note, as are the precise merits or demerits of the case.
But the bottom-line point is clear. It is reasonable, and not an exercise in economics 101 illiteracy to worry that in the District of Columbia area it might be true that some gas sellers are selling gas at retail prices that are much more above cost than are other retailers. They may be doing it because of issues of market power. That is, they do it because they can.
The fact points drawn from the District of Columbia experience are hardly unique. Similar retail pricing variations are reported by Gas Buddy throughout the US, and a number of US metropolitan areas have powerful gasoline wholesalers.
It is neither demagoguery nor a failure to grasp Econ 101 principles to think that State Attorneys General should be concerned and conduct investigations when some local gas retailers charge much more than others, when retail prices do not decline to reflect lower supply costs, or when local wholesalers appear to directly or indirectly control retail prices of a high percentage of retailers.
More broadly, there may be good reason for AG investigation whenever retail gas prices are not responsive and proportionate to changes in the price of supply. Mr. Lowery’s suggestion that such investigation puts “shameless demagoguery” and “economic illiteracy” in play in fact reflects his tendency to demagoguery and ignoring relevant facts that are in plain sight.
by Don Allen Resnikoff 7-9
CFPB: Using Complex Algorithms Is Not A Legal Defense For Discrimination
10 June 2022
by Sarah Auchterlonie , Jason Downs and Jason R. Dunn
Brownstein Hyatt Farber Schreck, LLP
The Consumer Financial Protection Bureau recently warned companies that, under federal anti-discrimination laws, they still owe consumers an explanation of specific reasons for denying credit applications, even if they use complex algorithms to determine creditworthiness. The move is both a reminder of the agency's continued focus on anti-discrimination enforcement as well as the enduring responsibility of companies using new technology in consumer interactions.
On May 26, the agency published a circular confirming its position that creditors' adverse action notice requirements under the Equal Credit Opportunity Act apply when using artificial intelligence or other algorithm-based credit models-even if the company claims it does not fully understand how the technology it uses to make those decisions works. Beyond denied credit applications, adverse actions can include closing or changing the terms of an existing credit account or denying a request to increase credit limits.
"Companies are not absolved of their legal responsibilities when they let a black-box model make lending decisions," CFPB Director Rohit Chopra said in a press release.
"The law gives every applicant the right to a specific explanation if their application for credit was denied, and that right is not diminished simply because a company uses a complex algorithm that it doesn't understand."
The circular comes after the CFPB announced in mid-March that it would prioritize targeting unfair discrimination even if fair lending laws don't apply, citing prohibitions against unfair, deceptive and abusive practices under the Consumer Financial Protection Act (CFPA). In a move signaling closer collaboration with states, including state attorneys general, the CFPB is also empowering states to enforce provisions under the CFPA, recently publishing an interpretive rule clarifying that Section 1042 permits states to enforce any provision of the law. The interpretive rule notes a CFPB action would not preempt a parallel state action. Further evidence of federal-state partnerships is the fact that the CFPB has memoranda of understanding with nearly two dozen state attorneys general, all 50 states, the District of Columbia and Puerto Rico.
In the end, creditors and lenders are still liable under federal law if they do not provide specific reasons for adverse actions, and a lack of understanding of how credit modeling technology works is not a legal defense for noncompliance. More broadly, companies are operating in a regulatory environment at the state and federal level that is increasingly focused on protecting consumers from algorithmic discrimination. Companies would be wise to review their algorithms for disparate treatment and disparate impact.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Sarah Auchterlonie, Jason Downs,
Jason R. Dunn
Brownstein Hyatt Farber Schreck, LLP
10 June 2022
by Sarah Auchterlonie , Jason Downs and Jason R. Dunn
Brownstein Hyatt Farber Schreck, LLP
The Consumer Financial Protection Bureau recently warned companies that, under federal anti-discrimination laws, they still owe consumers an explanation of specific reasons for denying credit applications, even if they use complex algorithms to determine creditworthiness. The move is both a reminder of the agency's continued focus on anti-discrimination enforcement as well as the enduring responsibility of companies using new technology in consumer interactions.
On May 26, the agency published a circular confirming its position that creditors' adverse action notice requirements under the Equal Credit Opportunity Act apply when using artificial intelligence or other algorithm-based credit models-even if the company claims it does not fully understand how the technology it uses to make those decisions works. Beyond denied credit applications, adverse actions can include closing or changing the terms of an existing credit account or denying a request to increase credit limits.
"Companies are not absolved of their legal responsibilities when they let a black-box model make lending decisions," CFPB Director Rohit Chopra said in a press release.
"The law gives every applicant the right to a specific explanation if their application for credit was denied, and that right is not diminished simply because a company uses a complex algorithm that it doesn't understand."
The circular comes after the CFPB announced in mid-March that it would prioritize targeting unfair discrimination even if fair lending laws don't apply, citing prohibitions against unfair, deceptive and abusive practices under the Consumer Financial Protection Act (CFPA). In a move signaling closer collaboration with states, including state attorneys general, the CFPB is also empowering states to enforce provisions under the CFPA, recently publishing an interpretive rule clarifying that Section 1042 permits states to enforce any provision of the law. The interpretive rule notes a CFPB action would not preempt a parallel state action. Further evidence of federal-state partnerships is the fact that the CFPB has memoranda of understanding with nearly two dozen state attorneys general, all 50 states, the District of Columbia and Puerto Rico.
In the end, creditors and lenders are still liable under federal law if they do not provide specific reasons for adverse actions, and a lack of understanding of how credit modeling technology works is not a legal defense for noncompliance. More broadly, companies are operating in a regulatory environment at the state and federal level that is increasingly focused on protecting consumers from algorithmic discrimination. Companies would be wise to review their algorithms for disparate treatment and disparate impact.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Sarah Auchterlonie, Jason Downs,
Jason R. Dunn
Brownstein Hyatt Farber Schreck, LLP
law reform to prohibit overly broad secrecy orders in litigated cases
Public Justice (https://www.publicjustice.net) and other Washington, D.C. area public interest organizations are advocating for law reform to prohibit overly broad secrecy orders in litigated cases. One goal is legislation that will limit court entry of orders that permit parties to withhold and keep secret important consumer information without substantial justification. Several states have enacted “right to know” anti-secrecy laws that address the problem, including Florida, Louisiana, Montana, South Carolina, and Washington State. A California anti-secrecy law is being considered by legislators and may be adopted in the near future.
Neither the District of Columbia, Maryland, nor Virginia have such laws. The DC Consumer Rights Coalition, DC Bar Consumer and D.C. Affairs Communities/Sections, and others, plan to present a program this Summer in which attorneys representing Public Justice will advocate for local “right to know” law reform.
One model for such local advocacy is the California “Public Right to Know Act” which was recently passed by the California State Senate. As explained in a posting by Public Justice at https://www.publicjustice.net/california-senate-passes-public-right-to-know-act/,
California Senate Bill 1149 would protect the public’s right to know the facts about dangerous public hazards that are discovered during litigation.
The Public Justice posting explains that the California “Public Right to Know Act”— would do the following:
Sponsoring California Senator Connie M. Leyva explained that “Information about defects and hazards created by companies should never be hidden behind a veil of courthouse secrecy that can endanger the lives and safety of Californians . . . .The public must have access to this vital information so that they can decide—for themselves—how they can protect themselves and their families from these defective products or toxic hazards. It is unconscionable that any company would ever seek to keep critical information that can lead to injuries or even deaths from the public—and all because of their desire for keep making profits. I thank my Senate colleagues that voted for SB 1149 today, as they are standing on the side of the public by helping to prevent future injuries or deaths.”
The Public Justice posting explains that for decades, overly broad court protective orders have enabled companies to shield evidence of threats to public safety and other corporate wrongdoing.
Consumers Union has for many years supported “right to know” legislation in California. Elisa Odabashian, Senior Policy Analyst with Consumers Union’s West Coast Office, made the following statement in 2000 in support of legislative proposals resembling the current SB 1149 that would limit secret out-of-court settlements in product defect, environmental hazard, unfair insurance claims practice or financial fraud lawsuits.
“Many lives could be saved and much suffering could be averted if corporations were not allowed to use secrecy orders in court settlements to hide information about product defects, environmental hazards, or financial fraud.”
“The Firestone/Ford tire tragedies highlight how secrecy orders can have very serious consequences on public safety. Over the last decade–long before the recent recall of millions of Firestone tires sold largely on the popular Ford Explorer–there were 50-100 Firestone tire lawsuits. Most of these court cases were settled with secrecy orders in place that effectively kept information about the potential dangers associated with the tires from the public. According to the Detroit Free Press, to date, there have been 119 deaths and 500 serious injuries associated with Firestone tire tread separations. Many of these deaths and injuries could have been prevented if secret settlements had been barred.” https://advocacy.consumerreports.org/press_release/consumers-union-supports-bills-to-limit-secret-out-of-court-settlements/
Further information will be forthcoming about the upcoming DC Consumer Rights Coalition, DC Bar Consumer and D.C. Affairs Communities/Sections program in which attorneys representing Public Justice will advocate for local “right to know” law reform.
By Don Allen Resnikoff
__________
Public Justice (https://www.publicjustice.net) and other Washington, D.C. area public interest organizations are advocating for law reform to prohibit overly broad secrecy orders in litigated cases. One goal is legislation that will limit court entry of orders that permit parties to withhold and keep secret important consumer information without substantial justification. Several states have enacted “right to know” anti-secrecy laws that address the problem, including Florida, Louisiana, Montana, South Carolina, and Washington State. A California anti-secrecy law is being considered by legislators and may be adopted in the near future.
Neither the District of Columbia, Maryland, nor Virginia have such laws. The DC Consumer Rights Coalition, DC Bar Consumer and D.C. Affairs Communities/Sections, and others, plan to present a program this Summer in which attorneys representing Public Justice will advocate for local “right to know” law reform.
One model for such local advocacy is the California “Public Right to Know Act” which was recently passed by the California State Senate. As explained in a posting by Public Justice at https://www.publicjustice.net/california-senate-passes-public-right-to-know-act/,
California Senate Bill 1149 would protect the public’s right to know the facts about dangerous public hazards that are discovered during litigation.
The Public Justice posting explains that the California “Public Right to Know Act”— would do the following:
- Create a presumption that no court order may conceal information about a defective product or environmental hazard that poses a danger to public health or safety unless the court finds that the public interest in disclosure is clearly outweighed by a specific and substantial need for secrecy.
- Prohibit settlement agreements that restrict the disclosure of information about a defective product or environmental hazard that poses a danger to public health or safety, and make any provision in an agreement void as against public policy, and thus unenforceable.
- Narrowly tailor its application to only information about a “danger to public health or safety” that is likely to cause “significant or substantial bodily injury or illness, or death.”
Sponsoring California Senator Connie M. Leyva explained that “Information about defects and hazards created by companies should never be hidden behind a veil of courthouse secrecy that can endanger the lives and safety of Californians . . . .The public must have access to this vital information so that they can decide—for themselves—how they can protect themselves and their families from these defective products or toxic hazards. It is unconscionable that any company would ever seek to keep critical information that can lead to injuries or even deaths from the public—and all because of their desire for keep making profits. I thank my Senate colleagues that voted for SB 1149 today, as they are standing on the side of the public by helping to prevent future injuries or deaths.”
The Public Justice posting explains that for decades, overly broad court protective orders have enabled companies to shield evidence of threats to public safety and other corporate wrongdoing.
Consumers Union has for many years supported “right to know” legislation in California. Elisa Odabashian, Senior Policy Analyst with Consumers Union’s West Coast Office, made the following statement in 2000 in support of legislative proposals resembling the current SB 1149 that would limit secret out-of-court settlements in product defect, environmental hazard, unfair insurance claims practice or financial fraud lawsuits.
“Many lives could be saved and much suffering could be averted if corporations were not allowed to use secrecy orders in court settlements to hide information about product defects, environmental hazards, or financial fraud.”
“The Firestone/Ford tire tragedies highlight how secrecy orders can have very serious consequences on public safety. Over the last decade–long before the recent recall of millions of Firestone tires sold largely on the popular Ford Explorer–there were 50-100 Firestone tire lawsuits. Most of these court cases were settled with secrecy orders in place that effectively kept information about the potential dangers associated with the tires from the public. According to the Detroit Free Press, to date, there have been 119 deaths and 500 serious injuries associated with Firestone tire tread separations. Many of these deaths and injuries could have been prevented if secret settlements had been barred.” https://advocacy.consumerreports.org/press_release/consumers-union-supports-bills-to-limit-secret-out-of-court-settlements/
Further information will be forthcoming about the upcoming DC Consumer Rights Coalition, DC Bar Consumer and D.C. Affairs Communities/Sections program in which attorneys representing Public Justice will advocate for local “right to know” law reform.
By Don Allen Resnikoff
__________
dc-bar-ethics-charge-against-rudy-giuliani.pdf (documentcloud.org)
The DC Bar's ethics complaint against Rudy Giuliani is here:
https://s3.documentcloud.org/documents/22058087/dc-bar-ethics-charge-against-rudy-giuliani.pdf
Excerpt:
The conduct and standards that Respondent has violated, and the relevant facts, are as follows:
2. In the November 3, 2020, presidential election, in excess of 6.7 million votes were cast in the Commonwealth of Pennsylvania. President Biden carried the state by more than 80,000 votes.
3. Respondent represented Donald J. Trump for President, Inc. (the “Trump Campaign”), and Lawrence Roberts and David John Henry, registered voters who were citizens of the Commonwealth of Pennsylvania (collectively “Plaintiffs”).
4. Neither Respondent nor Plaintiffs challenged the November 3, 2020, election results pursuant to the Commonwealth of Pennsylvania’s statutory procedures for election contests.
5. Instead, with Respondent’s assistance, Plaintiffs filed a lawsuit that sought to overturn the results of the Pennsylvania presidential election through a federal district court order, based on alleged violations of the United States Constitution
* *
THE CHARGES
45. Respondent’s conduct violated the following Pennsylvania Rules of Professional Conduct: a. 3.1, in that he brought a proceeding and asserted issues therein without a non-frivolous basis in law and fact for doing so; and b. 8.4(d), in that he engaged in conduct prejudicial to the administration of justice.
The DC Bar's ethics complaint against Rudy Giuliani is here:
https://s3.documentcloud.org/documents/22058087/dc-bar-ethics-charge-against-rudy-giuliani.pdf
Excerpt:
The conduct and standards that Respondent has violated, and the relevant facts, are as follows:
2. In the November 3, 2020, presidential election, in excess of 6.7 million votes were cast in the Commonwealth of Pennsylvania. President Biden carried the state by more than 80,000 votes.
3. Respondent represented Donald J. Trump for President, Inc. (the “Trump Campaign”), and Lawrence Roberts and David John Henry, registered voters who were citizens of the Commonwealth of Pennsylvania (collectively “Plaintiffs”).
4. Neither Respondent nor Plaintiffs challenged the November 3, 2020, election results pursuant to the Commonwealth of Pennsylvania’s statutory procedures for election contests.
5. Instead, with Respondent’s assistance, Plaintiffs filed a lawsuit that sought to overturn the results of the Pennsylvania presidential election through a federal district court order, based on alleged violations of the United States Constitution
* *
THE CHARGES
45. Respondent’s conduct violated the following Pennsylvania Rules of Professional Conduct: a. 3.1, in that he brought a proceeding and asserted issues therein without a non-frivolous basis in law and fact for doing so; and b. 8.4(d), in that he engaged in conduct prejudicial to the administration of justice.
Uvalde victims sue gunmaker
"A school staffer and a deceased student’s family have filed lawsuits against the manufacturer of the gun used in the Uvalde, Texas mass shooting." See https://ardwatalab.net/news-headlines/uvalde-victims-suing-gun-manufacturer-face-long-road-to-justice The company is Daniel Defense. Commenters suggest that the gravamen of the lawsuits will be similar to the recently settled Connecticut action against Remington: that the gun maker intentionally marketed its weapons to young, unstable males. Copies of the Uvalde filings are not immediately available.
The Connecticut lawyers who successfully sued the maker of the rifle used in the 2012 Newtown, Connecticut, shooting filed a letter Friday seeking documents and records from Daniel Defense, maker of the rifle used in the Uvalde, Texas, shooting May 24.
This petition was filed on behalf of the father of Amerie Jo Garza, one of the 19 children killed in the rampage by the alleged gunman, 18-year-old Salvador Ramos. See https://abcnews.go.com/US/father-child-killed-uvalde-retains-lawyers-sued-makers/story?id=85165012
"A school staffer and a deceased student’s family have filed lawsuits against the manufacturer of the gun used in the Uvalde, Texas mass shooting." See https://ardwatalab.net/news-headlines/uvalde-victims-suing-gun-manufacturer-face-long-road-to-justice The company is Daniel Defense. Commenters suggest that the gravamen of the lawsuits will be similar to the recently settled Connecticut action against Remington: that the gun maker intentionally marketed its weapons to young, unstable males. Copies of the Uvalde filings are not immediately available.
The Connecticut lawyers who successfully sued the maker of the rifle used in the 2012 Newtown, Connecticut, shooting filed a letter Friday seeking documents and records from Daniel Defense, maker of the rifle used in the Uvalde, Texas, shooting May 24.
This petition was filed on behalf of the father of Amerie Jo Garza, one of the 19 children killed in the rampage by the alleged gunman, 18-year-old Salvador Ramos. See https://abcnews.go.com/US/father-child-killed-uvalde-retains-lawyers-sued-makers/story?id=85165012
Can the Uvalde police chief be prosecuted?
By Don Allen Resnikoff, who is individually responsible for the content
Is criminal prosecution possible for Pete Arredondo, the Uvalde district police chief who led a delayed and ineffective response to a school mass shooting in the Florida town? Conventional wisdom is that criminal prosecution is unlikely for such police failures as lack of prompt aggressive action against a shooter. But if the local prosecutors find that the facts of alleged bad behavior are strong enough to warrant it, there is possible precedent for prosecution.
A criminal action was brought by local prosecutors against Scot Peterson in connection with the shooting that killed 17 people in 2018 at a school in Parkland, Florida. The facts on which the Peterson prosecution was based have a unique aspect that may affect the utility of the Petersen prosecution as precedent. The allegation is that he took cover behind a wall while a gunman moved through several floors of Marjory Stoneman Douglas High School.
Peterson has been charged with seven felony counts of child neglect, three counts of culpable negligence and one count of perjury.
The status of the Peterson case is that it is scheduled for trial in September of 2022.
Following is a copy of a recent filing in the Peterson case in which Peterson requests permission to visit the shooting site for discovery purposes.
By Don Allen Resnikoff, who is individually responsible for the content
Is criminal prosecution possible for Pete Arredondo, the Uvalde district police chief who led a delayed and ineffective response to a school mass shooting in the Florida town? Conventional wisdom is that criminal prosecution is unlikely for such police failures as lack of prompt aggressive action against a shooter. But if the local prosecutors find that the facts of alleged bad behavior are strong enough to warrant it, there is possible precedent for prosecution.
A criminal action was brought by local prosecutors against Scot Peterson in connection with the shooting that killed 17 people in 2018 at a school in Parkland, Florida. The facts on which the Peterson prosecution was based have a unique aspect that may affect the utility of the Petersen prosecution as precedent. The allegation is that he took cover behind a wall while a gunman moved through several floors of Marjory Stoneman Douglas High School.
Peterson has been charged with seven felony counts of child neglect, three counts of culpable negligence and one count of perjury.
The status of the Peterson case is that it is scheduled for trial in September of 2022.
Following is a copy of a recent filing in the Peterson case in which Peterson requests permission to visit the shooting site for discovery purposes.
INVESTOR ALERT: Attorney General James Warns New Yorkers About Cryptocurrency Investment Risks
Investors Lost Hundreds of Billions in Cryptocurrency
Investments as the Market Reached Record Lows
See https://ag.ny.gov/press-release/2022/investor-alert-attorney-general-james-warns-new-yorkers-about-cryptocurrency
NEW YORK – New York Attorney General Letitia James today issued an alert to New Yorkers to remind them of the dangerous risks of investing in cryptocurrencies after the market reached record lows last month and investors lost hundreds of billions. Cryptocurrencies are subject to extreme and unpredictably high price swings that make them among the most high-risk investments on the market. Last month, some of those risks materialized as the price of multiple virtual currencies — from the newest coins to the most well-established coins — plunged deeply and wiped away hundreds of billions in investments. This is not the first time the market has plunged. To protect New Yorkers from this extreme volatility, Attorney General James offers New Yorkers guidance on the various risks associated with cryptocurrencies.
“Over and over again, investors are losing billions because of risky cryptocurrency investments,” said Attorney General James. “Even well-known virtual currencies from reputable trading platforms can still crash and investors can lose billions in the blink of an eye. Too often, cryptocurrency investments create more pain than gain for investors. I urge New Yorkers to be cautious before putting their hard-earned money in risky cryptocurrency investments that can yield more anxiety than fortune.”
The virtual currency market exposes investors to dangerous risks, such as wild price swings and potential losses due to hacking, fraud, or theft. Even “legitimate” investments in virtual assets are subject to speculative bubbles and security issues. Investors in virtual assets should beware of the many significant risks of investing in these products including:
Additionally, in 2018, the Office of the Attorney General (OAG) released its “Virtual Markets Integrity Initiative” report, a more detailed overview of the virtual currency markets in New York and around the world. The report gives basic, but important information about how virtual currencies trade, and the risks investors face when they buy and sell, even on “legitimate” trading platforms.
If you are worried that you or someone you love has been a victim of investment fraud, contact OAG’s Investor Protection Bureau immediately. If you have worked in the virtual assets industry and believe you may have knowledge of wrongdoing, contact OAG’s Investor Protection Bureau immediately or the online whistleblower portal.
Investors Lost Hundreds of Billions in Cryptocurrency
Investments as the Market Reached Record Lows
See https://ag.ny.gov/press-release/2022/investor-alert-attorney-general-james-warns-new-yorkers-about-cryptocurrency
NEW YORK – New York Attorney General Letitia James today issued an alert to New Yorkers to remind them of the dangerous risks of investing in cryptocurrencies after the market reached record lows last month and investors lost hundreds of billions. Cryptocurrencies are subject to extreme and unpredictably high price swings that make them among the most high-risk investments on the market. Last month, some of those risks materialized as the price of multiple virtual currencies — from the newest coins to the most well-established coins — plunged deeply and wiped away hundreds of billions in investments. This is not the first time the market has plunged. To protect New Yorkers from this extreme volatility, Attorney General James offers New Yorkers guidance on the various risks associated with cryptocurrencies.
“Over and over again, investors are losing billions because of risky cryptocurrency investments,” said Attorney General James. “Even well-known virtual currencies from reputable trading platforms can still crash and investors can lose billions in the blink of an eye. Too often, cryptocurrency investments create more pain than gain for investors. I urge New Yorkers to be cautious before putting their hard-earned money in risky cryptocurrency investments that can yield more anxiety than fortune.”
The virtual currency market exposes investors to dangerous risks, such as wild price swings and potential losses due to hacking, fraud, or theft. Even “legitimate” investments in virtual assets are subject to speculative bubbles and security issues. Investors in virtual assets should beware of the many significant risks of investing in these products including:
- Highly Speculative and Unpredictable Value: Virtual currencies are easy to create and spread in the market quickly. Their underlying value is highly subjective and unpredictable. As a result, prices can swing wildly and crash without warning and without regard to any changes in the real economy. At times, price fluctuations are driven by market hype on various social media platforms.
- Difficulty Cashing Out Investments: There is no guarantee that you will be able to liquidate your investments when you want — such as when the crypto markets begin to crash. During times of crisis, trading platforms may halt trading or purport to experience technical difficulties, preventing you from accessing your assets.
- Higher Transaction Costs: Some trading platforms charge fees on transactions such as transferring funds and withdrawing money. These fees can vary depending on the size of the transaction and overall trading volume. Therefore, it may also cost you more to access your assets when you need them the most.
- Unstable “Stablecoins”: Despite their misleading name, there is no guarantee that your stablecoin investment is protected from decreasing value. The nature and quality of the assets backing stablecoins — if there are any assets backing the stablecoin — can vary greatly and along with that so can the risks associated with holding such coins.
- Hidden Trading Costs: Value in cryptocurrencies and other virtual assets may be propped up by automated trading, or bots, that are, for example, programmed to spot when another trader is trying to make a purchase and then buy ahead of the trade. This practice can push up the price and cost you more to purchase the same virtual asset.
- Conflicts of Interest: Many operators of virtual currency trading platforms are themselves heavily invested in virtual currencies, and trade on their own platforms without oversight. The financial interests of these operators may conflict with your interests. There have also been recent reports of large investors receiving favorable treatment, such as private cash-outs away from the market.
- Limited Oversight: There are no federally regulated exchanges, like the New York Stock Exchange or Nasdaq, for virtual currencies. Virtual currency trading platforms operate from various places around the world, many of which are not easily accessible to American law enforcement. Many platforms are subject to little or no oversight. If you are the victim of fraud on one of these exchanges, you will likely have no recourse in the United States. Further, many issuers of virtual currencies are not regulated and therefore are not subject to net capital requirements or examinations. Thus, people who lose money trading a certain virtual currency may have no recourse with respect to the issue of the currency.
Additionally, in 2018, the Office of the Attorney General (OAG) released its “Virtual Markets Integrity Initiative” report, a more detailed overview of the virtual currency markets in New York and around the world. The report gives basic, but important information about how virtual currencies trade, and the risks investors face when they buy and sell, even on “legitimate” trading platforms.
If you are worried that you or someone you love has been a victim of investment fraud, contact OAG’s Investor Protection Bureau immediately. If you have worked in the virtual assets industry and believe you may have knowledge of wrongdoing, contact OAG’s Investor Protection Bureau immediately or the online whistleblower portal.
DAR comment:
Local litigation by local government and individuals has been brought against gun manufacturers. But for the most part such litigation is blocked by the e federal Protection of Lawful Commerce in Arms Act, which Congress passed in 2005 to shield gunmakers from legal claims stemming from crimes committed with their products. Following is brief discussion from the media of the recently settled Sandy Hook action by individuals against Remington, and a Reuters "Explainer" briefly cataloging other litigation actions brought against gun manufacturers. Also below is a media reference to two background check bills passed by the House and stalled in the Senate.
Also below is a media discussion of California and New York legislative efforts to increase legal responsibility of gun manufacturers.
From Barton article below: "no lawsuit has ever resulted in a jury finding a major gunmaker liable for a mass shooting. This is largely because of the federal Protection of Lawful Commerce in Arms Act, which Congress passed in 2005 to shield gunmakers from legal claims stemming from crimes committed with their products. The Sandy Hook case against Remington is one of only a few suits to have ever bypassed PLCAA’s protections, satisfying a narrow exception in the law that allows for claims when gun companies violate relevant state or federal laws."
In February the Sandy Hook case is settled in a way that reportedly allows Remington to withhold some documents of public interest.
**
Democratic state legislatures have shown a renewed interest in broadening the industry’s liability with new laws
Excerpt from https://americanblow.com/read/AAXULCJ
In California in the immediate wake of the Uvalde shooting, state legislators advanced a gun control package that included a bill that would open up gun manufacturers to civil legal liability for certain marketing and design practices.
Gov. Gavin Newsom (D) had vowed in recent months to push for a gun control law similar to the controversial Texas abortion restriction that allowed private individuals to sue healthcare providers who performed banned abortions.
“California will not stand by as kids across the country are gunned down,” Newsom said following the Texas school shooting. “Guns are now the leading cause of death for kids in America. While the U.S. Senate stands idly by and activist federal judges strike down commonsense gun laws across our nation, California will act with the urgency this crisis demands.”
The proposals are similar to a New York state law enacted last year that opens manufacturers up to civil public nuisance lawsuits if they fail to implement reasonable safeguards against unlawful distribution or use of their firearms.
On Wednesday, the New York law survived an initial legal hurdle when a federal judge dismissed a gun industry lawsuit challenging its constitutionality.
New York Attorney General Letitia James (D), who defended the law in federal court, responded to the judge’s ruling by inviting other states to follow suit.
“As we mourn the deaths of 19 innocent children lost to gun violence in Uvalde and the countless more in Buffalo and across America every day, this is a moment of light and hope,” James said in a statement. “New York is proud to defend the right to impose reasonable gun restrictions that protect all of us.”
“As public officials, we were elected to solve problems and address the needs of the people. Prayers alone will no longer do, and cowardliness is not part of the job description. New York will always lead, and I urge others with a backbone to follow.”
Still, it remains to be seen whether the state laws will ultimately withstand court scrutiny.
In 2005, Congress passed the Protection of Lawful Commerce in Arms Act (PLCAA), which protects firearms manufacturers and distributors from facing civil lawsuits over crimes committed with their products.
Gun control advocates have long argued that PLCAA has allowed manufacturers to act with impunity and smothered the sort of high-impact court cases that led to industry-wide reckonings for tobacco and opioid companies.
But the renewed state interest in liability laws and other recent legal developments may signal that such a reckoning could be on the horizon for gun makers.
While PLCAA granted the industry sweeping immunity from civil lawsuits, the protections are not absolute. The law has certain exceptions for things like misconduct or violating state and local laws.
Earlier this year, the gun manufacturer Remington reached a settlement with the families of nine victims of the 2012 Sandy Hook school shooting. Remington’s insurers agreed to pay the families $73 million to settle the claims that the company had marketed weapons to troubled young men like the one who committed the massacre.
As part of the settlement, Remington also agreed to release troves of internal company records, including ones detailing its marketing strategy.
Legal experts see the agreement as a huge blow to the gun industry, and not just because it includes the largest monetary award to victims of gun violence.
In 2019, the Supreme Court allowed the families’ case to proceed, declining to hear Remington’s appeal arguing that PLCAA shielded manufacturers from such lawsuits.
Heidi Li Feldman, a law professor at Georgetown University, said the renewed aggressiveness from state officials and private plaintiffs could usher in a new era in which the industry faces more liability.
“The most dramatic effect that PLCAA had was it led immediately to a round of dismissals of then pending suits that were premised on the idea that the gun industry’s conduct constituted a public nuisance,” Feldman said. “The second consequence of PLCAA is that … it drastically raised the cost of litigating against the gun industry, meaning that lots of suits that might have been brought didn’t get brought because no one can afford to bring them.”
She added that if plaintiffs continue to score major victories in big, expensive cases that pry internal records from manufacturers, it will provide an antidote “to the way in which PLCAA heightens the cost of pursuing civil accountability for the gun industry.”
The Sandy Hook Lawsuit Against Remington Settled in February
The gunmaker agreed to pay a $73 million settlement, which will allow it to shield some details about the industry’s internal workings.
From article by Champe Barton
EXCERPTS:
Families of victims killed in the Sandy Hook Elementary School massacre have agreed to a $73 million settlement with Remington Arms. The agreement heralds the final chapter of a nearly eight-year legal saga that has provided a template for successfully suing the gun industry.
Remington — which made the Bushmaster XM15-E2S semiautomatic rifle used in the shooting — will allow the families to make public thousands of internal marketing documents handed over by the company as part of discovery. But the gunmaker will no longer have to comply with a February 17 deadline for releasing additional documents that could have shed further light on its practices. [Emphasis by DAR]
* *
The families’ suit, filed in 2015, accused Remington of violating a Connecticut law against deceptive trade practices by intentionally marketing its weapons to young, unstable males. The company’s ads touted the use of Remington rifles in military combat and presented them as badges of masculinity. “Consider Your Man Card Reissued,” went the tagline in one ad. The families alleged that these tactics inspired the 20-year-old gunman to attack the elementary school in December 2012.
Remington contended that its advertising did not target at-risk youth in particular and that no evidence connected their marketing strategies to the Sandy Hook shooting.
* *
To date, no lawsuit has ever resulted in a jury finding a major gunmaker liable for a mass shooting. This is largely because of the Protection of Lawful Commerce in Arms Act, which Congress passed in 2005 to shield gunmakers from legal claims stemming from crimes committed with their products. The Sandy Hook case is one of only a few suits to have ever bypassed PLCAA’s protections, satisfying a narrow exception in the law that allows for claims when gun companies violate relevant state or federal laws. A Connecticut court rejected Remington’s argument that the case should be dismissed because of PLCAA, and in November 2019, the U.S. Supreme Court declined to hear the gunmaker’s appeal of that decision.
* *
The settlement leaves just a handful of surviving lawsuits against gunmakers. In 2020, a Pennsylvania Superior Court ruled PLCAA unconstitutional in a case brought against Springfield Armory after one of its pistols was involved in the accidental shooting death of a child. The state’s Supreme Court has yet to review that decision. In Indiana, the city of Gary has reached discovery in its suit that accuses Smith & Wesson and a number of other large gun manufacturers of creating and facilitating a public nuisance of gun violence in the city in the ’90s.
Most recently, the Mexican government filed suit against Smith & Wesson and a number of other major gunmakers in a bid to hold American gun companies accountable for firearm violence in Mexico. A judge has yet to rule on whether PLCAA will apply.
See full article at https://www.thetrace.org/2022/02/sandy-hook-families-lawsuit-remington-arms-marketing/
Reuters Explainer - Can U.S. gunmakers be liable for mass shooting?
Tom Hals
Wed, May 25, 2022 By Tom Hals
EXCERPTS:
U.S. GUN COMPANIES ARE GENERALLY PROTECTED FROM LAWSUITS
Since 2005, the Protection of Lawful Commerce in Arms Act (PLCAA) has provided near blanket immunity for gun makers and dealers from liability for crimes committed with their products. The law was passed after lawsuits by several cities tried to hold companies liable for gun violence.
ARE THERE EXCEPTIONS?
Yes. The PLCAA has several provisions that allow a company to be sued, including for claims a company has knowingly violated laws related to the marketing of the product related to the shooting.
The Connecticut Supreme Court said in 2019 that the federal law permitted a lawsuit by some of the families of the victims of a 2012 shooting at the Sandy Hook Elementary School. The families sued Remington for violating the state's marketing law by allegedly promoting its Bushmaster rifle for criminal use.
Remington, which twice filed for bankruptcy during the case, agreed in February to pay the families $73 million, the first settlement of its kind.
Also in 2019, the Indiana Court of Appeals said PLCAA did not prevent the city of Gary from pursuing a 1999 lawsuit against firearms manufacturers under the state's public nuisance laws. Nuisance laws can be used to hold a defendant liable for damage done to a public good, like community safety, and the city alleged the manufacturers knew of illegal handgun sales and failed to prevent them.
Two federal appeals courts, however, have ruled that public nuisance lawsuits are barred by PLCAA because they don't apply to the sale or marketing of firearms.
OTHER LEGAL CASES
Following the Connecticut Supreme Court ruling, other cases were launched that are working their way through the courts, seeking to seize on exemptions in PLCAA.
Victims of a 2019 mass shooting at a California synagogue sued Smith & Wesson, saying the company negligently marketed the AR-15 style rife used by the shooter. A state court judge rejected last year the company's argument the lawsuit was barred under PLCAA.
Meanwhile, the Texas Supreme Court ruled earlier this year that an online seller of ammunition, Luckygunner.com, was not protected by PLCAA from a lawsuit on behalf of victims of a 2018 shooting at a Santa Fe, Texas, high school. The company is accused of knowingly violating a law that makes it illegal to sell ammunition to minors.
* *
RECENT LEGISLATIVE ACTION
In July, New York's governor signed into law a measure that allows firearm sellers, manufacturers and distributors to be sued by the state, cities or individuals for creating a public nuisance.
A U.S. judge on Wednesday ruled against the firearms industry which sued to block the law and argued it was barred by PLCAA.
On Tuesday, California senators approved a bill hours after the Texas shooting that would allow private citizens to sue anyone who manufactures, distributes, transports, imports, or sells assault weapons and untraceable ghost guns.
The bill, which is supported by Governor Gavin Newsom, is styled on a Texas anti-abortion "vigilante" law that is meant to skirt conflicting federal law. It will now be considered by the state's assembly.
**
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Diane Craft)
Tom Hals
Wed, May 25, 2022 By Tom Hals
EXCERPTS:
U.S. GUN COMPANIES ARE GENERALLY PROTECTED FROM LAWSUITS
Since 2005, the Protection of Lawful Commerce in Arms Act (PLCAA) has provided near blanket immunity for gun makers and dealers from liability for crimes committed with their products. The law was passed after lawsuits by several cities tried to hold companies liable for gun violence.
ARE THERE EXCEPTIONS?
Yes. The PLCAA has several provisions that allow a company to be sued, including for claims a company has knowingly violated laws related to the marketing of the product related to the shooting.
The Connecticut Supreme Court said in 2019 that the federal law permitted a lawsuit by some of the families of the victims of a 2012 shooting at the Sandy Hook Elementary School. The families sued Remington for violating the state's marketing law by allegedly promoting its Bushmaster rifle for criminal use.
Remington, which twice filed for bankruptcy during the case, agreed in February to pay the families $73 million, the first settlement of its kind.
Also in 2019, the Indiana Court of Appeals said PLCAA did not prevent the city of Gary from pursuing a 1999 lawsuit against firearms manufacturers under the state's public nuisance laws. Nuisance laws can be used to hold a defendant liable for damage done to a public good, like community safety, and the city alleged the manufacturers knew of illegal handgun sales and failed to prevent them.
Two federal appeals courts, however, have ruled that public nuisance lawsuits are barred by PLCAA because they don't apply to the sale or marketing of firearms.
OTHER LEGAL CASES
Following the Connecticut Supreme Court ruling, other cases were launched that are working their way through the courts, seeking to seize on exemptions in PLCAA.
Victims of a 2019 mass shooting at a California synagogue sued Smith & Wesson, saying the company negligently marketed the AR-15 style rife used by the shooter. A state court judge rejected last year the company's argument the lawsuit was barred under PLCAA.
Meanwhile, the Texas Supreme Court ruled earlier this year that an online seller of ammunition, Luckygunner.com, was not protected by PLCAA from a lawsuit on behalf of victims of a 2018 shooting at a Santa Fe, Texas, high school. The company is accused of knowingly violating a law that makes it illegal to sell ammunition to minors.
* *
RECENT LEGISLATIVE ACTION
In July, New York's governor signed into law a measure that allows firearm sellers, manufacturers and distributors to be sued by the state, cities or individuals for creating a public nuisance.
A U.S. judge on Wednesday ruled against the firearms industry which sued to block the law and argued it was barred by PLCAA.
On Tuesday, California senators approved a bill hours after the Texas shooting that would allow private citizens to sue anyone who manufactures, distributes, transports, imports, or sells assault weapons and untraceable ghost guns.
The bill, which is supported by Governor Gavin Newsom, is styled on a Texas anti-abortion "vigilante" law that is meant to skirt conflicting federal law. It will now be considered by the state's assembly.
**
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Diane Craft)
The Hill: The background check gun bills now stalled in the Senate
Here are the gun bills stalled in the SenateBY EMILY BROOKS AND MIKE LILLIS - 05/25/22 1:01 PM ET
Two major control measures were passed by the House last year: The Enhanced Background Checks Act of 2021 and the Bipartisan Background Checks Act of 2021. Both measures stalled in the Senate.
Further detail on the bills is at Here are the gun bills stalled in Congress | The Hill https://thehill.com/news/house/3501301-here-are-the-gun-bills-stalled-in-congress/?email=23dab1a75b8396b58677d1fb9fc3d3e5f946969d&emaila=007a144815d178e37146c89d4c439342&emailb=f7bf73e2d7ca47c65c9df513d4f1a2ad486611b90e9f78b92689312edf5b4e16&utm_source=Sailthru&utm_medium=email&utm_campaign=05.26.22%20KB%20%E2%80%94%20The%20Hill%20-%20Morning%20Report&utm_term=Morning%20Report
Here are the gun bills stalled in the SenateBY EMILY BROOKS AND MIKE LILLIS - 05/25/22 1:01 PM ET
Two major control measures were passed by the House last year: The Enhanced Background Checks Act of 2021 and the Bipartisan Background Checks Act of 2021. Both measures stalled in the Senate.
Further detail on the bills is at Here are the gun bills stalled in Congress | The Hill https://thehill.com/news/house/3501301-here-are-the-gun-bills-stalled-in-congress/?email=23dab1a75b8396b58677d1fb9fc3d3e5f946969d&emaila=007a144815d178e37146c89d4c439342&emailb=f7bf73e2d7ca47c65c9df513d4f1a2ad486611b90e9f78b92689312edf5b4e16&utm_source=Sailthru&utm_medium=email&utm_campaign=05.26.22%20KB%20%E2%80%94%20The%20Hill%20-%20Morning%20Report&utm_term=Morning%20Report
The DC AG's revised 5-23 Complaint against Zuckerberg is HERE:
2022.05 (3).pdf (dc.gov) https://oag.dc.gov/sites/default/files/2022-05/2022.05%20%283%29.pdf
Excerpt:
Introduction
1. In under two decades, Facebook, Inc. (now known as Meta Platforms, Inc.) (“Facebook”) has grown from a small online social network to an implacable corporate giant. Facebook offers a variety of products and services, including the well-known Facebook product. Today, Facebook is larger than any single country—with more than 2.9 billion monthly active users, nearly half the global population. To put that in perspective, Facebook has more users than the populations of the United States, China and Brazil combined. And Facebook has become wealthier than over 150 countries worldwide, including Switzerland, Sweden, and the UAE. Not surprisingly, Facebook has seized enormous influence over global affairs. Facebook controls how people communicate with friends and family, conduct business online, what news they read, and even how they communicate with governments and elected officials. Atop it all is Mark Zuckerberg, the unelected leader of a massive digital empire with billions of inhabitants.
2. But Zuckerberg’s Facebook is far from a disinterested platform for people to communicate, stay in touch with friends, and reconnect with old acquaintances. Instead, Facebook has become a wildly successful and unique business, deriving enormous wealth from acquiring and monetizing the data of those billions of people leading their lives in Facebook’s digital ecosystem. But even that is not enough. Facebook is in a relentless pursuit to expand its reach on humanity and bring an ever-increasing number of people under its influence.
3. To that end, Mark Zuckerberg has been building his version of the Internet where the “default is social.” To him, that means building an Internet where people live their digital lives on Facebook. The goal is to convince people to reveal the most granular details of who they are to Facebook—their religions, their work histories, their likes—so that it can be monetized, and Zuckerberg and his company can continue to grow even wealthier. 3
4. Facebook—at Zuckerberg’s direction—shifted its business model in this way because it recognized that it could be even more profitable if it could harness and sell the ability to dependably influence its users’ behavior to third parties. Facebook therefore encouraged (and, at times, teamed up with) developers and researchers to collect and analyze Facebook user data so that it could better learn how to manipulate its own users’ moods and influence what they purchase and even whether and how they vote.
5. Facebook has become among the world’s leading innovators in experimenting on how to keep users engaged—meaning more data and more money for Facebook. But at Facebook’s scale, these experimental decisions reverberate globally.
6. That is in part because Facebook has realized an ugly truth: its social platform becomes “stickier” (meaning people will stay on it longer and share more data) when it is filled with toxicity. What this means is that the more Zuckerberg’s Facebook stokes divisiveness and polarization, destabilizes democracies, amplifies genocides, and impacts users’ mental health, the more money Facebook and its leaders make.
7. Given the trillions of dollars at issue, and having no regard for the people it purports to serve, Facebook—at Zuckerberg’s direction—has decided to hide these problems for as long as possible, including intentionally misleading Facebook users as well as the public, the press, and political leaders.
8. One prime example—and the one that forms the basis for the instant suit—was Facebook’s 2010 decision to open up the Facebook Platform to third parties. Again the brainchild of Zuckerberg, this move helped Facebook by persuading outside developers to build eye-catching applications for Facebook—directing even more users, and user data, into the platform. Developers, though, could access the massive trove of user data that Facebook had collected through the “side door” of applications.
9. Zuckerberg had always been aware that the success of Facebook hinged on convincing users that their data was private enough, while selling as much access to those users as possible without driving them away. And Zuckerberg was fully aware that users would be concerned by this newly vulnerable position. So Zuckerberg engaged in a decade-long campaign designed to convince users that Facebook cared about and tried to protect users and their data. Behind closed doors however, Zuckerberg insisted that Facebook’s policies be “as simple as we can get away with.
10. In March 2018, whistleblower Christopher Wylie publicly revealed that a company called Cambridge Analytica—a London-based electioneering firm—exfiltrated the personal data of more than 70 million Facebook users in the United States, including more than 340,000 District residents, in order to influence the results of the 2016 United States presidential election. This data trove included Facebook users’ ages, interests, pages they’ve liked, groups they belong to, physical locations, political affiliation, religious affiliation, relationships, and photos, as well as their full names, phone numbers, and email addresses.
11. In other words, Cambridge Analytica used the Facebook Platform—in a way that Facebook and Zuckerberg encouraged—to influence and manipulate the outcome of a United States presidential election. The personal data of the more than 70 million U.S. Facebook users that Cambridge Analytica used to manipulate the election accounted for more than half the total votes during the 2016 presidential elections, in an election that was effectively decided by just a few hundred thousand people.
12. Though the data Cambridge Analytica (and many other companies) used was supposedly private and protected from disclosure by Facebook’s privacy and data policies, Cambridge Analytica knew that it could access this trove of data using Facebook’s existing developer tools, an open secret that was well known to Facebook’s business partners using the platform. Cambridge Analytica also knew that it could leverage Facebook’s lax policy enforcement to continue manipulating the Facebook data it had amassed without fear Facebook would do anything about its operations. All the while, Facebook and Zuckerberg were trying to convince users in their user-facing statements that their data was safe.
13. The Cambridge Analytica revelations shocked the world, but it was no surprise to Facebook or Zuckerberg. Facebook had both a longstanding relationship with Cambridge Analytica and also actively encouraged companies like Cambridge Analytica to use the Facebook Platform to influence and manipulate consumer behavior.
14. What is most troubling is that Facebook looked into Cambridge Analytica and determined that it posed a risk to consumer data but chose to bury those concerns rather than stop them, as that could have hurt Facebook’s (and Zuckerberg’s) bottom line. Instead of coming clean, Facebook continued to help Cambridge Analytica win a United States presidential election.
15. While Facebook and Zuckerberg have, a full three years later, publicly condemned Cambridge Analytica’s data collection, its condemnation, in reality, only demonstrates that what Zuckerberg and Facebook say publicly is part of an intentional plan to mask the devastating consequences of their actions (or inactions).
16. Zuckerberg has said time and again that he and Facebook have a responsibility to protect users, and if they can’t, then they “don’t deserve to serve [them].”
17. Accordingly, the District brings this case to ensure that Mark Zuckerberg is held accountable for his role in Facebook violating the District’s consumer protection laws by misrepresenting the protection of user data and their blatant disregard and misuse of sensitive, personal data belonging to District residents.
2022.05 (3).pdf (dc.gov) https://oag.dc.gov/sites/default/files/2022-05/2022.05%20%283%29.pdf
Excerpt:
Introduction
1. In under two decades, Facebook, Inc. (now known as Meta Platforms, Inc.) (“Facebook”) has grown from a small online social network to an implacable corporate giant. Facebook offers a variety of products and services, including the well-known Facebook product. Today, Facebook is larger than any single country—with more than 2.9 billion monthly active users, nearly half the global population. To put that in perspective, Facebook has more users than the populations of the United States, China and Brazil combined. And Facebook has become wealthier than over 150 countries worldwide, including Switzerland, Sweden, and the UAE. Not surprisingly, Facebook has seized enormous influence over global affairs. Facebook controls how people communicate with friends and family, conduct business online, what news they read, and even how they communicate with governments and elected officials. Atop it all is Mark Zuckerberg, the unelected leader of a massive digital empire with billions of inhabitants.
2. But Zuckerberg’s Facebook is far from a disinterested platform for people to communicate, stay in touch with friends, and reconnect with old acquaintances. Instead, Facebook has become a wildly successful and unique business, deriving enormous wealth from acquiring and monetizing the data of those billions of people leading their lives in Facebook’s digital ecosystem. But even that is not enough. Facebook is in a relentless pursuit to expand its reach on humanity and bring an ever-increasing number of people under its influence.
3. To that end, Mark Zuckerberg has been building his version of the Internet where the “default is social.” To him, that means building an Internet where people live their digital lives on Facebook. The goal is to convince people to reveal the most granular details of who they are to Facebook—their religions, their work histories, their likes—so that it can be monetized, and Zuckerberg and his company can continue to grow even wealthier. 3
4. Facebook—at Zuckerberg’s direction—shifted its business model in this way because it recognized that it could be even more profitable if it could harness and sell the ability to dependably influence its users’ behavior to third parties. Facebook therefore encouraged (and, at times, teamed up with) developers and researchers to collect and analyze Facebook user data so that it could better learn how to manipulate its own users’ moods and influence what they purchase and even whether and how they vote.
5. Facebook has become among the world’s leading innovators in experimenting on how to keep users engaged—meaning more data and more money for Facebook. But at Facebook’s scale, these experimental decisions reverberate globally.
6. That is in part because Facebook has realized an ugly truth: its social platform becomes “stickier” (meaning people will stay on it longer and share more data) when it is filled with toxicity. What this means is that the more Zuckerberg’s Facebook stokes divisiveness and polarization, destabilizes democracies, amplifies genocides, and impacts users’ mental health, the more money Facebook and its leaders make.
7. Given the trillions of dollars at issue, and having no regard for the people it purports to serve, Facebook—at Zuckerberg’s direction—has decided to hide these problems for as long as possible, including intentionally misleading Facebook users as well as the public, the press, and political leaders.
8. One prime example—and the one that forms the basis for the instant suit—was Facebook’s 2010 decision to open up the Facebook Platform to third parties. Again the brainchild of Zuckerberg, this move helped Facebook by persuading outside developers to build eye-catching applications for Facebook—directing even more users, and user data, into the platform. Developers, though, could access the massive trove of user data that Facebook had collected through the “side door” of applications.
9. Zuckerberg had always been aware that the success of Facebook hinged on convincing users that their data was private enough, while selling as much access to those users as possible without driving them away. And Zuckerberg was fully aware that users would be concerned by this newly vulnerable position. So Zuckerberg engaged in a decade-long campaign designed to convince users that Facebook cared about and tried to protect users and their data. Behind closed doors however, Zuckerberg insisted that Facebook’s policies be “as simple as we can get away with.
10. In March 2018, whistleblower Christopher Wylie publicly revealed that a company called Cambridge Analytica—a London-based electioneering firm—exfiltrated the personal data of more than 70 million Facebook users in the United States, including more than 340,000 District residents, in order to influence the results of the 2016 United States presidential election. This data trove included Facebook users’ ages, interests, pages they’ve liked, groups they belong to, physical locations, political affiliation, religious affiliation, relationships, and photos, as well as their full names, phone numbers, and email addresses.
11. In other words, Cambridge Analytica used the Facebook Platform—in a way that Facebook and Zuckerberg encouraged—to influence and manipulate the outcome of a United States presidential election. The personal data of the more than 70 million U.S. Facebook users that Cambridge Analytica used to manipulate the election accounted for more than half the total votes during the 2016 presidential elections, in an election that was effectively decided by just a few hundred thousand people.
12. Though the data Cambridge Analytica (and many other companies) used was supposedly private and protected from disclosure by Facebook’s privacy and data policies, Cambridge Analytica knew that it could access this trove of data using Facebook’s existing developer tools, an open secret that was well known to Facebook’s business partners using the platform. Cambridge Analytica also knew that it could leverage Facebook’s lax policy enforcement to continue manipulating the Facebook data it had amassed without fear Facebook would do anything about its operations. All the while, Facebook and Zuckerberg were trying to convince users in their user-facing statements that their data was safe.
13. The Cambridge Analytica revelations shocked the world, but it was no surprise to Facebook or Zuckerberg. Facebook had both a longstanding relationship with Cambridge Analytica and also actively encouraged companies like Cambridge Analytica to use the Facebook Platform to influence and manipulate consumer behavior.
14. What is most troubling is that Facebook looked into Cambridge Analytica and determined that it posed a risk to consumer data but chose to bury those concerns rather than stop them, as that could have hurt Facebook’s (and Zuckerberg’s) bottom line. Instead of coming clean, Facebook continued to help Cambridge Analytica win a United States presidential election.
15. While Facebook and Zuckerberg have, a full three years later, publicly condemned Cambridge Analytica’s data collection, its condemnation, in reality, only demonstrates that what Zuckerberg and Facebook say publicly is part of an intentional plan to mask the devastating consequences of their actions (or inactions).
16. Zuckerberg has said time and again that he and Facebook have a responsibility to protect users, and if they can’t, then they “don’t deserve to serve [them].”
17. Accordingly, the District brings this case to ensure that Mark Zuckerberg is held accountable for his role in Facebook violating the District’s consumer protection laws by misrepresenting the protection of user data and their blatant disregard and misuse of sensitive, personal data belonging to District residents.
America’s addiction to monopolies caused the baby food shortage
By Samanth SubramanianPublished May 18, 2022
Excerpt:
The US’ vast shortage in infant formula has one immediate cause: the suspension of operations in an Abbott Laboratories plant in Michigan earlier this year, after samples of a lethal bacteria were found in it. But beyond that lies a bigger structural problem plaguing the American economy: a tendency for many sectors to be controlled by a few companies, or even just one.
The baby food sector, for instance, is an oligopoly, in which two companies—Abbott and the Reckitt-owned Mead Johnson—dominate three-quarters of the market by sales. Further, the federal Women, Infants and Children (WIC) program, which offers supplemental nutrition for low-income families, buys and distributes nearly half of all baby formula in the US. The WIC program contracts with a specific company in each state, setting up a de facto monopoly situation. Abbott is the WIC’s contracted supplier in 34 states.
Full article: America's addiction to monopolies caused the baby food shortage — Quartz (qz.com) https://qz.com/2167097/americas-addiction-to-monopolies-caused-the-baby-food-shortage/
By Samanth SubramanianPublished May 18, 2022
Excerpt:
The US’ vast shortage in infant formula has one immediate cause: the suspension of operations in an Abbott Laboratories plant in Michigan earlier this year, after samples of a lethal bacteria were found in it. But beyond that lies a bigger structural problem plaguing the American economy: a tendency for many sectors to be controlled by a few companies, or even just one.
The baby food sector, for instance, is an oligopoly, in which two companies—Abbott and the Reckitt-owned Mead Johnson—dominate three-quarters of the market by sales. Further, the federal Women, Infants and Children (WIC) program, which offers supplemental nutrition for low-income families, buys and distributes nearly half of all baby formula in the US. The WIC program contracts with a specific company in each state, setting up a de facto monopoly situation. Abbott is the WIC’s contracted supplier in 34 states.
Full article: America's addiction to monopolies caused the baby food shortage — Quartz (qz.com) https://qz.com/2167097/americas-addiction-to-monopolies-caused-the-baby-food-shortage/
The CA “Public Right to Know Act” That Passed Senate Judiciary Committee
Upholding the ability of Californians to find out the facts about dangerous public hazards that are discovered during litigation, the Senate Judiciary Committee approved Senate Bill 1149 authored by Senator Connie M. Leyva (D-Chino).
Also known as the “Public Right to Know Act”, SB 1149 will, if adopted:
- SB 1149 is Jointly Sponsored by Consumer Reports and Public Justice
Upholding the ability of Californians to find out the facts about dangerous public hazards that are discovered during litigation, the Senate Judiciary Committee approved Senate Bill 1149 authored by Senator Connie M. Leyva (D-Chino).
Also known as the “Public Right to Know Act”, SB 1149 will, if adopted:
- Create a presumption that no court order may conceal information about a defective product or environmental condition that poses a danger to public health or safety unless the court finds that the public interest in disclosure is clearly outweighed by a specific and substantial need for secrecy.
- Prohibit settlement agreements that restrict the disclosure of information about a defective product or environmental condition that poses a danger to public health or safety, and make any provision in an agreement void as against public policy, and thus unenforceable.
- Narrowly tailor its application to only information about a "danger to public health or safety" that is likely to cause "significant or substantial bodily injury or illness, or death."
One of the major developments on the "right to know" issue was the 2019 PRO PUBLICA revelation of dangerous information in sealed court documents. Following is the 2019 Pro Publica article, with a link to the court documents.
Sackler Embraced Plan to Conceal OxyContin’s Strength From Doctors, Sealed Testimony ShowsAs OxyContin addiction spurred a national nightmare, a member of the family that has reaped billions of dollars from the painkiller boasted that sales exceeded his “fondest dreams,” according to a secret court document obtained by ProPublica. https://www.propublica.org/series/opioid-billionaires
by David Armstrong
Feb. 21, 2019, 1:45 p.m. EST
EXCERPT:
In May 1997, the year after Purdue Pharma launched OxyContin, its head of sales and marketing sought input on a key decision from Dr. Richard Sackler, a member of the billionaire family that founded and controls the company. Michael Friedman told Sackler that he didn’t want to correct the false impression among doctors that OxyContin was weaker than morphine, because the myth was boosting prescriptions — and sales.
“It would be extremely dangerous at this early stage in the life of the product,” Friedman wrote to Sackler, “to make physicians think the drug is stronger or equal to morphine….We are well aware of the view held by many physicians that oxycodone [the active ingredient in OxyContin] is weaker than morphine. I do not plan to do anything about that.”
“I agree with you,” Sackler responded. “Is there a general agreement, or are there some holdouts?”
Ten years later, Purdue pleaded guilty in federal court to understating the risk of addiction to OxyContin, including failing to alert doctors that it was a stronger painkiller than morphine, and agreed to pay $600 million in fines and penalties. But Sackler’s support of the decision to conceal OxyContin’s strength from doctors — in email exchanges both with Friedman and another company executive — was not made public.
Read the DepositionThis sealed 2015 deposition, obtained by ProPublica, is believed to be the only time a Sackler family member has testified under oath about the aggressive marketing of OxyContin that helped foster the opioid crisis.
**
The email threads were divulged in a sealed court document that ProPublica has obtained: an Aug. 28, 2015, deposition of Richard Sackler.
https://www.documentcloud.org/documents/5745212-Deposition.html
Sackler Embraced Plan to Conceal OxyContin’s Strength From Doctors, Sealed Testimony ShowsAs OxyContin addiction spurred a national nightmare, a member of the family that has reaped billions of dollars from the painkiller boasted that sales exceeded his “fondest dreams,” according to a secret court document obtained by ProPublica. https://www.propublica.org/series/opioid-billionaires
by David Armstrong
Feb. 21, 2019, 1:45 p.m. EST
EXCERPT:
- SERIES:OPIOID BILLIONAIRESThe Deceptive Marketing of OxyContin
In May 1997, the year after Purdue Pharma launched OxyContin, its head of sales and marketing sought input on a key decision from Dr. Richard Sackler, a member of the billionaire family that founded and controls the company. Michael Friedman told Sackler that he didn’t want to correct the false impression among doctors that OxyContin was weaker than morphine, because the myth was boosting prescriptions — and sales.
“It would be extremely dangerous at this early stage in the life of the product,” Friedman wrote to Sackler, “to make physicians think the drug is stronger or equal to morphine….We are well aware of the view held by many physicians that oxycodone [the active ingredient in OxyContin] is weaker than morphine. I do not plan to do anything about that.”
“I agree with you,” Sackler responded. “Is there a general agreement, or are there some holdouts?”
Ten years later, Purdue pleaded guilty in federal court to understating the risk of addiction to OxyContin, including failing to alert doctors that it was a stronger painkiller than morphine, and agreed to pay $600 million in fines and penalties. But Sackler’s support of the decision to conceal OxyContin’s strength from doctors — in email exchanges both with Friedman and another company executive — was not made public.
Read the DepositionThis sealed 2015 deposition, obtained by ProPublica, is believed to be the only time a Sackler family member has testified under oath about the aggressive marketing of OxyContin that helped foster the opioid crisis.
**
The email threads were divulged in a sealed court document that ProPublica has obtained: an Aug. 28, 2015, deposition of Richard Sackler.
https://www.documentcloud.org/documents/5745212-Deposition.html
PRESS RELEASE -- 2000 statement from Consumers UnionConsumers Union supports bills to limit secret out-of-court settlementsDecember 4, 2000
December 4, 2000
CONSUMERS UNIONS SUPPORTS BILLS TO LIMIT SECRET OUT-OF-COURT SETTLEMENTS
Measures by Assemblymember Steinberg and Senator Escutia Would Limit Agreements in Product Defect, Environmental Hazard and Financial Fraud Cases
SACRAMENTO — Elisa Odabashian, Senior Policy Analyst with Consumers Union’s West Coast Office, made the following statement in support of AB 36 (Steinberg, D-Sacramento) and SB 11 (Escutia, D-Norwalk), which would limit secret out-of-court settlements in product defect, environmental hazard, unfair insurance claims practice or financial fraud lawsuits.
“Many lives could be saved and much suffering could be averted if corporations were not allowed to use secrecy orders in court settlements to hide information about product defects, environmental hazards, or financial fraud.”
“The Firestone/Ford tire tragedies highlight how secrecy orders can have very serious consequences on public safety. Over the last decade–long before the recent recall of millions of Firestone tires sold largely on the popular Ford Explorer–there were 50-100 Firestone tire lawsuits. Most of these court cases were settled with secrecy orders in place that effectively kept information about the potential dangers associated with the tires from the public. According to the Detroit Free Press, to date, there have been 119 deaths and 500 serious injuries associated with Firestone tire tread separations. Many of these deaths and injuries could have been prevented if secret settlements had been barred.”
“Consumers Union believes this legislation will be a strong deterrent to businesses tempted to engage in unethical acts that take lives, harm the environment, or commit financial fraud. We believe this law will motivate corporations to correct the errors that brought them into court in the first place, instead of hiding behind secrecy orders and continuing business as usual until hundreds of unsuspecting consumers are harmed or killed, and recalls are required. We applaud Assemblyman Steinberg and Senator Escutia for taking up this important matter and we urge the legislature to support it.”
Under the proposed measures, out-of-court secret settlements would be barred unless they met strict standards and procedures imposed by the courts. The bills also apply to discovery materials like crash test reports, company documents, and consumer complaints not used at trial.
By applying to settlement agreements and documents not filed with the court, the measures fill a large gap left open by a recently approved Judicial Council rule which applies only to material actually filed with the court. The new Judicial Council rule creates a presumption against secrecy and allows a court to seal records only if strict standards and procedures are met.
Steinberg and Escutia’s identical measures are sponsored by state Attorney General Bill Lockyer and the Consumer Attorneys of California and supported by a broad range of public interest organizations, including Center for Public Interest Law, Congress of California Seniors, Consumer Federation of California, Consumers for Auto Reliability and Safety, Foundation for Taxpayers and Consumer Rights, Sierra Club, and United Policyholders.
Contact:
Elisa Odabashian or Michael McCauley
415-431-6747
Consumers Union West Coast Office
###
December 4, 2000
CONSUMERS UNIONS SUPPORTS BILLS TO LIMIT SECRET OUT-OF-COURT SETTLEMENTS
Measures by Assemblymember Steinberg and Senator Escutia Would Limit Agreements in Product Defect, Environmental Hazard and Financial Fraud Cases
SACRAMENTO — Elisa Odabashian, Senior Policy Analyst with Consumers Union’s West Coast Office, made the following statement in support of AB 36 (Steinberg, D-Sacramento) and SB 11 (Escutia, D-Norwalk), which would limit secret out-of-court settlements in product defect, environmental hazard, unfair insurance claims practice or financial fraud lawsuits.
“Many lives could be saved and much suffering could be averted if corporations were not allowed to use secrecy orders in court settlements to hide information about product defects, environmental hazards, or financial fraud.”
“The Firestone/Ford tire tragedies highlight how secrecy orders can have very serious consequences on public safety. Over the last decade–long before the recent recall of millions of Firestone tires sold largely on the popular Ford Explorer–there were 50-100 Firestone tire lawsuits. Most of these court cases were settled with secrecy orders in place that effectively kept information about the potential dangers associated with the tires from the public. According to the Detroit Free Press, to date, there have been 119 deaths and 500 serious injuries associated with Firestone tire tread separations. Many of these deaths and injuries could have been prevented if secret settlements had been barred.”
“Consumers Union believes this legislation will be a strong deterrent to businesses tempted to engage in unethical acts that take lives, harm the environment, or commit financial fraud. We believe this law will motivate corporations to correct the errors that brought them into court in the first place, instead of hiding behind secrecy orders and continuing business as usual until hundreds of unsuspecting consumers are harmed or killed, and recalls are required. We applaud Assemblyman Steinberg and Senator Escutia for taking up this important matter and we urge the legislature to support it.”
Under the proposed measures, out-of-court secret settlements would be barred unless they met strict standards and procedures imposed by the courts. The bills also apply to discovery materials like crash test reports, company documents, and consumer complaints not used at trial.
By applying to settlement agreements and documents not filed with the court, the measures fill a large gap left open by a recently approved Judicial Council rule which applies only to material actually filed with the court. The new Judicial Council rule creates a presumption against secrecy and allows a court to seal records only if strict standards and procedures are met.
Steinberg and Escutia’s identical measures are sponsored by state Attorney General Bill Lockyer and the Consumer Attorneys of California and supported by a broad range of public interest organizations, including Center for Public Interest Law, Congress of California Seniors, Consumer Federation of California, Consumers for Auto Reliability and Safety, Foundation for Taxpayers and Consumer Rights, Sierra Club, and United Policyholders.
Contact:
Elisa Odabashian or Michael McCauley
415-431-6747
Consumers Union West Coast Office
###
The USDOJ statement of support for the DC AG's case against Amazon
The statement appears below
The statement appears below
In a letter to Fidelity’s CEO, Sens. Elizabeth Warren and Tina Smith asked for information on the extent to which potential conflicts of interest might have affected the decision to offer bitcoin.
The letter appears below
The letter appears below
DC Bar program on China and antitrust: Angela Zhang; Nathan Bush- 4-14-2022
REMOTE PROGRAM: Author Angela Zhang discusses her book “Chinese Antitrust Exceptionalism"
Author Angela Chang will discuss her book: "Chinese Antitrust Exceptionalism: How the Rise of China Challenges Global Regulation", published by Oxford University Press in March 2021.
Available As:
Zoom Webinar --- See Bar anmnouncement:
Pasted in above is the link to the DC Bar's announcement of program that is free for anyone interested, because of co-sponsorship by the DC Consumer Rights Coalition. The date is 4-14-2022. The time is 9 AM Eastern (because Professor Zhang is in Hong Kong -- a 12 hour time difference.) Registration is required, using the on-line form that can be reached by clicking on the light blue printed link. I encourage you to sign up and invite other people to tune in to the program. As I understand it, the audience will not be able to speak during the program, but can submit questions.
Following is a further brief description of the program drawn from my book review that the DC Bar magazine will publish later this year.
I expect this to be an interesting and valuable antitrust program.
Don Resnikoff
******************************
More information: The DC Bar, Consumer and Antitrust Section, and the DC Consumer Rights Coalition, offer a video program via Zoom on April 14, 2002, 9 AM Eastern
Angela Huyue Zhang discusses her book: CHINESE ANTITRUST EXCEPTIONALISM : HOW THE RISE OF CHINA CHALLENGES GLOBAL REGULATION. Nathan Bush will ask questions and offer comment.
Angela Huyue Zhang is an associate professor at the Faculty of Law at the University of Hong Kong. In her book Professor Zhang describes the complex layers of competition regulation in China. Importantly, she also discusses international politics and economic rivalry: how antitrust and other business regulations are used as weapons of economic rivalry between China and the United States.
Professor Zhang explains that the Chinese government has increasingly weaponized its antitrust laws as part of its “tit-for-tat” trade war strategy against aggressive U.S. sanctions imposed on Chinese technology companies.
Professor Zhang agrees with experts such as lawyer Nathan Bush that it would be useful for the US and China to more directly tackle the difficult obstacles in the way of more positive and cooperative trade relations and coordination of competition policy between the two countries. Nathan Bush writes in a recent issue of the ABA’s Antitrust Law Journal that there is “value in preserving constructive engagement” and collaboration between the U.S. and China with regard to competition policy. [i]
Professor Zhang hopes that tit-for-tat weaponizing of business regulation will not continue to harm both the U.S. and China. She believes it will help if both China and the US encourage imports from each other, and support more economic interdependence that in turn will lead to better cooperation. She is concerned by the tendency of U.S. politicians to discourage imports of Chinese tech products, and suggests that “Economic interdependence raises the costs of conflict and increases the incentives for countries to cooperate.”
Professor Zhang’s insights into Chinese competition policy and China’s use of business regulation as a weapon in international economic rivalry make her a valuable participant in the international engagement among competition policymakers, scholars, and the Bar that Nathan Bush advocates. It may be a difficult engagement, but the US and China cannot escape being co-inhabitants in commerce on a small planet, and would do well to get along.
By Don Allen Resnikoff ©
[i] Nathan Bush, Chinese Antitrust in the Trade War, Antitrust Law Journal - Volume 84 Issue 1 (2021)
REMOTE PROGRAM: Author Angela Zhang discusses her book “Chinese Antitrust Exceptionalism"
Author Angela Chang will discuss her book: "Chinese Antitrust Exceptionalism: How the Rise of China Challenges Global Regulation", published by Oxford University Press in March 2021.
Available As:
Zoom Webinar --- See Bar anmnouncement:
- Thursday, April 14, 2022 (9:00 AM - 10:30 AM (GMT-05:00) Eastern Time (US & Canada)) https://dcbar.inreachce.com/Details/Information/CD9997DB-4059-45C0-B506-242C8CB0383A
Pasted in above is the link to the DC Bar's announcement of program that is free for anyone interested, because of co-sponsorship by the DC Consumer Rights Coalition. The date is 4-14-2022. The time is 9 AM Eastern (because Professor Zhang is in Hong Kong -- a 12 hour time difference.) Registration is required, using the on-line form that can be reached by clicking on the light blue printed link. I encourage you to sign up and invite other people to tune in to the program. As I understand it, the audience will not be able to speak during the program, but can submit questions.
Following is a further brief description of the program drawn from my book review that the DC Bar magazine will publish later this year.
I expect this to be an interesting and valuable antitrust program.
Don Resnikoff
******************************
More information: The DC Bar, Consumer and Antitrust Section, and the DC Consumer Rights Coalition, offer a video program via Zoom on April 14, 2002, 9 AM Eastern
Angela Huyue Zhang discusses her book: CHINESE ANTITRUST EXCEPTIONALISM : HOW THE RISE OF CHINA CHALLENGES GLOBAL REGULATION. Nathan Bush will ask questions and offer comment.
Angela Huyue Zhang is an associate professor at the Faculty of Law at the University of Hong Kong. In her book Professor Zhang describes the complex layers of competition regulation in China. Importantly, she also discusses international politics and economic rivalry: how antitrust and other business regulations are used as weapons of economic rivalry between China and the United States.
Professor Zhang explains that the Chinese government has increasingly weaponized its antitrust laws as part of its “tit-for-tat” trade war strategy against aggressive U.S. sanctions imposed on Chinese technology companies.
Professor Zhang agrees with experts such as lawyer Nathan Bush that it would be useful for the US and China to more directly tackle the difficult obstacles in the way of more positive and cooperative trade relations and coordination of competition policy between the two countries. Nathan Bush writes in a recent issue of the ABA’s Antitrust Law Journal that there is “value in preserving constructive engagement” and collaboration between the U.S. and China with regard to competition policy. [i]
Professor Zhang hopes that tit-for-tat weaponizing of business regulation will not continue to harm both the U.S. and China. She believes it will help if both China and the US encourage imports from each other, and support more economic interdependence that in turn will lead to better cooperation. She is concerned by the tendency of U.S. politicians to discourage imports of Chinese tech products, and suggests that “Economic interdependence raises the costs of conflict and increases the incentives for countries to cooperate.”
Professor Zhang’s insights into Chinese competition policy and China’s use of business regulation as a weapon in international economic rivalry make her a valuable participant in the international engagement among competition policymakers, scholars, and the Bar that Nathan Bush advocates. It may be a difficult engagement, but the US and China cannot escape being co-inhabitants in commerce on a small planet, and would do well to get along.
By Don Allen Resnikoff ©
[i] Nathan Bush, Chinese Antitrust in the Trade War, Antitrust Law Journal - Volume 84 Issue 1 (2021)
Members of Congress to FTC: Dan Snyder and Washington Commanders Football may have victimized fans who bought seat leases
Excerpt:
We are writing to share evidence of concerning business practices by the Washington
Commanders uncovered during the Committee’s ongoing investigation into workplace
misconduct at the team. Evidence obtained by the Committee, including emails, documents, and
statements from former employees, indicate senior executives and the team’s owner, Daniel
Snyder, may have engaged in a troubling, long-running, and potentially unlawful pattern of
financial conduct that victimized thousands of team fans and the National Football League
(NFL).
According to information and documents obtained by the Committee, for over a decade,
Commanders executives may have withheld millions of dollars in refundable security deposits
owed to customers upon the expiration of their multi-year seat leases and may have taken steps
to prevent customers from collecting these deposits. According to a former team executive, the
Commanders “failed to properly refund those security deposits intentionally and took various
steps to retain as much of that money as possible.”1 Documents indicate that as of 2016, the
team may have retained up to $5 million in deposits from approximately 2,000 customers.
a copy of the full letter follows:
Excerpt:
We are writing to share evidence of concerning business practices by the Washington
Commanders uncovered during the Committee’s ongoing investigation into workplace
misconduct at the team. Evidence obtained by the Committee, including emails, documents, and
statements from former employees, indicate senior executives and the team’s owner, Daniel
Snyder, may have engaged in a troubling, long-running, and potentially unlawful pattern of
financial conduct that victimized thousands of team fans and the National Football League
(NFL).
According to information and documents obtained by the Committee, for over a decade,
Commanders executives may have withheld millions of dollars in refundable security deposits
owed to customers upon the expiration of their multi-year seat leases and may have taken steps
to prevent customers from collecting these deposits. According to a former team executive, the
Commanders “failed to properly refund those security deposits intentionally and took various
steps to retain as much of that money as possible.”1 Documents indicate that as of 2016, the
team may have retained up to $5 million in deposits from approximately 2,000 customers.
a copy of the full letter follows:
SCOTUS nominee Ketanji Brown Jackson and SCOTUS restraints on regulatory agencies
As the Senate hearings for Supreme Court nominee Ketanji Brown Jackson become history, one element that will be remembered is the high level of partisanship, down to and including last minute pleading by leader McConnell that Republicans vote against her.
The Republican contribution to dialogue at the confirmation hearings focused mainly on issues apparently well suited to a large television and internet blogger audience: the content of children’s books used at Georgetown Day School, sentencing in criminal cases involving child pornography, and others.
There were drier but important ideological issues that Republican Senators could have focused on. Wall Street Journal editorial writers focused on an opinion by Supreme Court nominee Ketanji Brown Jackson that, in the view of the WSJ writers, gave far too much leeway for exercise of discretion by a government administrative agency. The regulatory discretion that bothers the WSJ is the US Department of Agriculture requirement that meat be labeled with the country where the animal was born, raised and slaughtered. It also bars processors from commingling meat from different countries.
The American Meat Institute in the case of AMI v. USDA contended that the USDA rule violated the First Amendment and Administrative Procedure Act. The Wall Street Journal editorial agrees with AMI,and takes exception to a decision by Judge Brown Jackson allowing the USDA rule. The WSJ editorial writers suggest that the Senators at Judge Brown Jackson’s recent confirmation hearing should have inquired further concerning Judge Jackson’s regulation friendly opinion in AMI v. USDA. See https://www.wsj.com/articles/judge-ketanji-brown-jacksons-regulatory-red-meat-usda-american-meat-institute-11648071674?msclkid=513b842cafa111ec8fe9a4ade312c04c
In fact, the Wall Street Journal editorial writers have an important point: a right-leaning US Supreme Court might be hostile to regulatory agencies and be instrumental in dismantling the regulatory government regime that has been important at least since the days of Franklin D. Roosevelt and the inception of the New Deal.
A recent excellent Brookings program addressed the issue of the future of regulatory issues in US Supreme Court jurisprudence. See https://www.brookings.edu/events/the-future-of-regulation-at-the-supreme-court/
The introduction to the Brookings program explains that two important cases at the Supreme Court this term–American Hospital Association v. Becerra, US Supreme Court Docket No. 20-1114 [Arg: 11.30.2021] and West Virginia v. Environmental Protection Agency, US Supreme Court Docket No. 20-1530 [Arg: 02.28.2022] –could shape regulatory policy in this country for years to come.
A main question in the AHA v. Becerra case is whether the Department of Health and Human Services is entitled to deference in its interpretation of a statute that enables it to reduce drug reimbursement rates for hospitals.
West Virginia v. Environmental Protection Agency asks the Supreme Court to consider the statutory limitations imposed on the Environmental Protection Agency by the Clean Air Act when it attempts to regulate emissions emanating from stationary sources.
Current law permits a degree of delegation of discretionary authority to regulatory agencies that some critics believe is excessive. That criticism is particularly strong where delegation involves major questions of policy. Changes in the law could reduce the discretion of regulatory agencies and arguably inhibit one of the greatest strengths of regulatory agencies: the ability to relatively quickly enact rules in response to changing social, political, or economic circumstances.
Briefly, some take-aways from the Brookings program are that a hostile U.S. Supreme Court could indeed take a wrecking ball to the regulatory regime that has been important to U.S. governance since the New Deal days of the 1930s. But the Justice most interested in the wrecking ball approach is Gorsuch, and he has not attracted a strong following even among the right-leaning Republican-appointed justices. It may be that leeway for exercise of regulatory discretion is not under immediate threat from the U.S. Supreme Court.
For more detail, go to the Brookings program, which featured impressive experts Robert Litan, Simon Lazarus, Susan Rose-Ackerman, and Ilan Wurman.
By Don Resnikoff
SCOTUS nominee Ketanji Brown Jackson and SCOTUS restraints on regulatory agencies
As the Senate hearings for Supreme Court nominee Ketanji Brown Jackson become history, one element that will be remembered is the high level of partisanship, down to and including last minute pleading by leader McConnell that Republicans vote against her.
The Republican contribution to dialogue at the confirmation hearings focused mainly on issues apparently well suited to a large television and internet blogger audience: the content of children’s books used at Georgetown Day School, sentencing in criminal cases involving child pornography, and others.
There were drier but important ideological issues that Republican Senators could have focused on. Wall Street Journal editorial writers focused on an opinion by Supreme Court nominee Ketanji Brown Jackson that, in the view of the WSJ writers, gave far too much leeway for exercise of discretion by a government administrative agency. The regulatory discretion that bothers the WSJ is the US Department of Agriculture requirement that meat be labeled with the country where the animal was born, raised and slaughtered. It also bars processors from commingling meat from different countries.
The American Meat Institute in the case of AMI v. USDA contended that the USDA rule violated the First Amendment and Administrative Procedure Act. The Wall Street Journal editorial agrees with AMI,and takes exception to a decision by Judge Brown Jackson allowing the USDA rule. The WSJ editorial writers suggest that the Senators at Judge Brown Jackson’s recent confirmation hearing should have inquired further concerning Judge Jackson’s regulation friendly opinion in AMI v. USDA. See https://www.wsj.com/articles/judge-ketanji-brown-jacksons-regulatory-red-meat-usda-american-meat-institute-11648071674?msclkid=513b842cafa111ec8fe9a4ade312c04c
In fact, the Wall Street Journal editorial writers have an important point: a right-leaning US Supreme Court might be hostile to regulatory agencies and be instrumental in dismantling the regulatory government regime that has been important at least since the days of Franklin D. Roosevelt and the inception of the New Deal.
A recent excellent Brookings program addressed the issue of the future of regulatory issues in US Supreme Court jurisprudence. See https://www.brookings.edu/events/the-future-of-regulation-at-the-supreme-court/
The introduction to the Brookings program explains that two important cases at the Supreme Court this term–American Hospital Association v. Becerra, US Supreme Court Docket No. 20-1114 [Arg: 11.30.2021] and West Virginia v. Environmental Protection Agency, US Supreme Court Docket No. 20-1530 [Arg: 02.28.2022] –could shape regulatory policy in this country for years to come.
A main question in the AHA v. Becerra case is whether the Department of Health and Human Services is entitled to deference in its interpretation of a statute that enables it to reduce drug reimbursement rates for hospitals.
West Virginia v. Environmental Protection Agency asks the Supreme Court to consider the statutory limitations imposed on the Environmental Protection Agency by the Clean Air Act when it attempts to regulate emissions emanating from stationary sources.
Current law permits a degree of delegation of discretionary authority to regulatory agencies that some critics believe is excessive. That criticism is particularly strong where delegation involves major questions of policy. Changes in the law could reduce the discretion of regulatory agencies and arguably inhibit one of the greatest strengths of regulatory agencies: the ability to relatively quickly enact rules in response to changing social, political, or economic circumstances.
Briefly, some take-aways from the Brookings program are that a hostile U.S. Supreme Court could indeed take a wrecking ball to the regulatory regime that has been important to U.S. governance since the New Deal days of the 1930s. But the Justice most interested in the wrecking ball approach is Gorsuch, and he has not attracted a strong following even among the right-leaning Republican-appointed justices. It may be that leeway for exercise of regulatory discretion is not under immediate threat from the U.S. Supreme Court.
For more detail, go to the Brookings program, which featured impressive experts Robert Litan, Simon Lazarus, Susan Rose-Ackerman, and Ilan Wurman.
By Don Resnikoff
🔊 ANTI-MONOPOLY RISING:
Anti-monopoly rising (as suggested by Barry Lynn)
- U.S. Senators Amy Klobuchar (D-Minn.) and Richard Blumenthal (D-Conn.) sent a letter to the Justice Department (DOJ) last week, urging officials to investigate anticompetitive conduct by ticketing and events company Live Nation. The letter alleges that Live Nation violated its agreement with the DOJ that convinced the agency to approve the company’s vertical merger with ticketing company Ticketmaster in 2010. Live Nation is accused of retaliating against concert venues that decide not to use Ticketmaster for their events. (Reuters)
- On March 11, the European Commission and the U.K.’s Competition and Markets Authority announced that they were investigating Google and Facebook over their “Jedi Blue” deal launched in September 2018. The regulators allege that the deal created obstacles for ad-tech competitors to Google’s Open Bidding Program. In 2017 Facebook decided to drop its support for a potential Google rival after receiving preferential access to Google’s bidding system. The deal is already being investigated in the U.S. as 15 attorneys general have filed lawsuits. (The Verge)
- Last week, the European Commission raided several automakers over suspected violation of the EU’s cartel rules, while the U.K.’s Competition and Markets Authority also launched a probe. The automakers are suspected of collusion in the collection, treatment, and recovery of end-of-life cars and vans. The companies raided are reported to be Renault and Stellantis, while Mercedes Benz and BMW received information requests. The European Commission has not publicly disclosed the names of companies being investigated. (Reuters, Bloomberg)
- Judge Richard A. Jones of the U.S. District Court for the Western District of Washington last week allowed a class-action lawsuit against Amazon to move forward. The lawsuit, brought by a group of consumers, accuses Amazon of putting in place “most favored nation” style rules in the form of “fair pricing agreements.” Such agreements force sellers who want to use different platforms to add an Amazon fee to the cost of their products, raising the price on platforms that offer lower prices and driving up prices across the entire internet. In 2011, Amazon signed an agreement with the Federal Trade Commission not to use such arrangements. (Competition Policy International, Bloomberg)
Anti-monopoly rising (as suggested by Barry Lynn)
- U.S. Senators Amy Klobuchar (D-Minn.) and Richard Blumenthal (D-Conn.) sent a letter to the Justice Department (DOJ) last week, urging officials to investigate anticompetitive conduct by ticketing and events company Live Nation. The letter alleges that Live Nation violated its agreement with the DOJ that convinced the agency to approve the company’s vertical merger with ticketing company Ticketmaster in 2010. Live Nation is accused of retaliating against concert venues that decide not to use Ticketmaster for their events. (Reuters)
- On March 11, the European Commission and the U.K.’s Competition and Markets Authority announced that they were investigating Google and Facebook over their “Jedi Blue” deal launched in September 2018. The regulators allege that the deal created obstacles for ad-tech competitors to Google’s Open Bidding Program. In 2017 Facebook decided to drop its support for a potential Google rival after receiving preferential access to Google’s bidding system. The deal is already being investigated in the U.S. as 15 attorneys general have filed lawsuits. (The Verge)
- Last week, the European Commission raided several automakers over suspected violation of the EU’s cartel rules, while the U.K.’s Competition and Markets Authority also launched a probe. The automakers are suspected of collusion in the collection, treatment, and recovery of end-of-life cars and vans. The companies raided are reported to be Renault and Stellantis, while Mercedes Benz and BMW received information requests. The European Commission has not publicly disclosed the names of companies being investigated. (Reuters, Bloomberg)
- Judge Richard A. Jones of the U.S. District Court for the Western District of Washington last week allowed a class-action lawsuit against Amazon to move forward. The lawsuit, brought by a group of consumers, accuses Amazon of putting in place “most favored nation” style rules in the form of “fair pricing agreements.” Such agreements force sellers who want to use different platforms to add an Amazon fee to the cost of their products, raising the price on platforms that offer lower prices and driving up prices across the entire internet. In 2011, Amazon signed an agreement with the Federal Trade Commission not to use such arrangements. (Competition Policy International, Bloomberg)
BROOKINGS: The future of regulation at the Supreme Court
Monday, March 28, 2022, 1:30 - 3:00 p.m. EDT
Online: https://www.brookings.edu/events/the-future-of-regulation-at-the-supreme-court
RSVP to watch Two important cases at the Supreme Court this term–American Hospital Association v. Becerra and West Virginia v. Environmental Protection Agency–could shape regulatory policy in this country for years to come. Rulings in each of these cases could invoke the "delegation doctrine" and/or the "major questions doctrine." Changes to either of these legal principles could inhibit one of the greatest strengths of regulatory agencies: the ability to relatively quickly enact rules in response to changing social, political, or economic circumstances.
On March 28, the Center on Regulation and Markets at Brookings will bring together leading experts on administrative and constitutional law to address the possible outcomes in these court decisions and what they mean for the future of regulatory policy in the U.S.
Viewers can submit questions for speakers by email to [email protected] or on Twitter using #DelegationDoctrine.
Opening remarks
Stephanie Aaronson, Vice President and Director, Economic Studies, The Brookings Institution
Introduction
Sanjay Patnaik, Senior Fellow, Bernard L. Schwartz Chair in Economic Policy Development, and Director, Center on Regulation and Markets, The Brookings Institution
Keynote address
Anne Joseph O'Connell, Adelbert H. Sweet Professor of Law, Stanford University
Panel
Moderator: Robert E. Litan, Nonresident Senior Fellow, Economic Studies, Brookings
Simon Lazarus, Former Senior Counsel, Constitutional Accountability Center
Susan Rose-Ackerman, Professor of Law and Political Science, Emeritus, Yale Law School
Ilan Wurman, Associate Professor of Law, Sandra Day O'Connor College of Law, Arizona State University
Stay up to date on Brookings events. Sign up for event invitations by topic and our weekly events update.
IHOP has announced the International Bank of Pancakes.
Customers who open an account with the “bank” will be able to earn points, or Pancoins, with every order and trade them for free food.
The chain said the program will allow it to reward guests while also building relationships with them. It coincides with a revamped IHOP app and website that are intended to ease ordering and customization for guests.
Here’s how the program will work: Customers can open an IBOP account in the IHOP app. After that, they will earn one Pancoin for every $5 they spend at the restaurant. Once they earn three Pancoins, they can exchange them at the in-app “Stack Market” for a coupon that entitles them to free food, like a short-stack of pancakes, a burger or a burrito. Customers will need the IHOP app to use the program.
The chain will use data from the transactions to generate marketing offers for guests based on what they’ve ordered in the past.
“The purpose of us introducing the International Bank of Pancakes, our first loyalty program, is to reward and engage our guests and to create a relationship with them,” said IHOP CMO Kieran Donahue.
IHOP's first loyalty program is (as you might have noticed already) a riff on the cryptocurrency trend.
The mechanics of the program will be supported in part by new pay-at-the-table technology. Dine-in customers can scan a QR code with their phone to pay their bill, which will automatically add Pancoins to their account. If they choose to pay the old-fashioned way, they’ll get a receipt (aka a “deposit slip”) with a code and barcode to collect their reward points. Delivery and pickup orders will also earn Pancoins.
Donahue said the chain wanted to have some fun with the cryptocurrency trend when it was designing the program, which is how it landed on the bank motif.
Note: IHOP makes it clear that Pancoins are not actual cryptocurrency. They can only be used within the IHOP program. They may not otherwise be used as currency.
https://www.restaurantbusinessonline.com/marketing/ihop-unveils-first-loyalty-program-international-bank-pancakes?msclkid=398cfb5eb13211ec8958b50b7a6a2f8c
D.C. AG Antitrust Lawsuit Against Amazon is dismissed by Court
The D.C. AG's suit against Amazon concerned pricing restrictions in its contracts with sellers. D.C. alleged that the company harmed consumers by blocking sellers on its marketplace from offering better deals elsewhere.But on Friday of March 18 the DC lawsuit was dismissed by D.C. Superior Court Judge Hiram Puig-Lugo, who granted mazon’s motion to dismiss. The docket entry reads: "03/18/2022 Oral Ruling Granted on Defendant's Amazon.Com, Inc.'s Opposed Written Motion to Dismiss Plaintiff District of Columbia's Amended Complaint by Judge Puig-Lugo. Entered on the Docket 03/18/2022."
A spokesperson for the D.C. AG told the Wall Street Journal that “We believe that the Superior Court got this wrong, and its oral ruling did not seem to consider the detailed allegations in the complaint, the full scope of the anticompetitive agreements, the extensive briefing and a recent decision of a federal court to allow a nearly identical lawsuit to move forward . . .. We are considering our legal options and we’ll continue fighting to develop reasoned antitrust jurisprudence in our local courts and to hold Amazon accountable for using its concentrated power to unfairly tilt the playing field in its favor.
The Amazon motion to dismiss initial filing is at https://www.scribd.com/document/565534727/Amazon-Motion-to-Dismiss-DC-Case
Posting by Don Allen Resnikoff
The D.C. AG's suit against Amazon concerned pricing restrictions in its contracts with sellers. D.C. alleged that the company harmed consumers by blocking sellers on its marketplace from offering better deals elsewhere.But on Friday of March 18 the DC lawsuit was dismissed by D.C. Superior Court Judge Hiram Puig-Lugo, who granted mazon’s motion to dismiss. The docket entry reads: "03/18/2022 Oral Ruling Granted on Defendant's Amazon.Com, Inc.'s Opposed Written Motion to Dismiss Plaintiff District of Columbia's Amended Complaint by Judge Puig-Lugo. Entered on the Docket 03/18/2022."
A spokesperson for the D.C. AG told the Wall Street Journal that “We believe that the Superior Court got this wrong, and its oral ruling did not seem to consider the detailed allegations in the complaint, the full scope of the anticompetitive agreements, the extensive briefing and a recent decision of a federal court to allow a nearly identical lawsuit to move forward . . .. We are considering our legal options and we’ll continue fighting to develop reasoned antitrust jurisprudence in our local courts and to hold Amazon accountable for using its concentrated power to unfairly tilt the playing field in its favor.
The Amazon motion to dismiss initial filing is at https://www.scribd.com/document/565534727/Amazon-Motion-to-Dismiss-DC-Case
Posting by Don Allen Resnikoff
On unlicensed street vendors in DC -- from CityPaper
Street vending is illegal in D.C., punishable by fines of up to $500. Street vendors, many of whom sell pupusas, taquitos, or other food staples from their home countries, as well as clothes and water, are mainstays in neighborhoods such as Columbia Heights. They are excluded workers, which makes them ineligible to receive pandemic funds or unemployment benefits. Unlike gig economy jobs that don’t require a license, street vendors are criminalized when they fail to get past the hurdles to attain a costly vending license. For some vendors, particularly in Ward 1, English isn’t their first language, which makes it tough to jump through all the vending licensing hoops and may create confusion during interactions with police or officials from the Department of Consumer and Regulatory Affairs.
Some advocacy groups are stepping up to create an economic lifeline for the community. On Wednesday, Vendedores Unidos launched its partnership venture with Beloved Community Incubator to bring United Food Cooperative, a new catered meal service owned and operated by indigenous chefs, to the District.
Still, co-ops can only do so much. A systemic approach that would help all D.C. street vendors requires Council action, advocates say. In its 2021 report, the D.C. Police Reform Commission recommended that the Council decriminalize street vending, noting that most vendors are Black and Brown residents who disproportionately face jail time and live in constant fear of the police.
“The [police’s] attitude, … their hatred towards us—I don't know why they hate the street vendors so much,” Genesis tells City Paper.
To read more about Genesis' story and MPD's oversight hearing, click here.
--Ambar Castillo ([email protected])
See https://outlook.live.com/mail/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgAFDif4HgAAAA%3D%3D
Street vending is illegal in D.C., punishable by fines of up to $500. Street vendors, many of whom sell pupusas, taquitos, or other food staples from their home countries, as well as clothes and water, are mainstays in neighborhoods such as Columbia Heights. They are excluded workers, which makes them ineligible to receive pandemic funds or unemployment benefits. Unlike gig economy jobs that don’t require a license, street vendors are criminalized when they fail to get past the hurdles to attain a costly vending license. For some vendors, particularly in Ward 1, English isn’t their first language, which makes it tough to jump through all the vending licensing hoops and may create confusion during interactions with police or officials from the Department of Consumer and Regulatory Affairs.
Some advocacy groups are stepping up to create an economic lifeline for the community. On Wednesday, Vendedores Unidos launched its partnership venture with Beloved Community Incubator to bring United Food Cooperative, a new catered meal service owned and operated by indigenous chefs, to the District.
Still, co-ops can only do so much. A systemic approach that would help all D.C. street vendors requires Council action, advocates say. In its 2021 report, the D.C. Police Reform Commission recommended that the Council decriminalize street vending, noting that most vendors are Black and Brown residents who disproportionately face jail time and live in constant fear of the police.
“The [police’s] attitude, … their hatred towards us—I don't know why they hate the street vendors so much,” Genesis tells City Paper.
To read more about Genesis' story and MPD's oversight hearing, click here.
--Ambar Castillo ([email protected])
See https://outlook.live.com/mail/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgAFDif4HgAAAA%3D%3D
Subaru disabled the telematics system and associated features on new cars registered in Massachusetts last year
That is part of a spat over a right-to-repair ballot measure approved, overwhelmingly, by the state’s voters in 2020. The measure, which has been held up in the courts, required automakers to give car owners and independent mechanics more access to data about the car’s internal systems.
See https://www.wired.com/story/right-to-repair-massachusetts-question-1-election-2020/
Excerpt from https://www.wired.com/story/fight-right-repair-cars-turns-ugly/?utm_source=pocket-newtab
Coach Brian Flores v. the NFL and the Giants -- the WSJ perceives litigation difficulties
In a class action complaint against the NFL and others, former Head Coach of the Miami Dolphins, Brian Flores, charges that he and other members of the proposed class have been denied positions as head coaches and general managers as a result of racial discrimination. [See Complaint at https://int.nyt.com/data/documenttools/brian-flores-nfl-lawsuit/44f04359fa5bb496/full.pdf] The Wall Street Journal article points out that class action litigation requirements are daunting, even in the face of allegations of blatant race discrimination. That raises a question of whether the Courts are up to the task of dealing fairly with the litigation. Here is an excerpt from the WSJ piece:
While these types of cases potentially can take years to resolve, legal observers said early proceedings would determine whether the suit carries force.
The league and team defendants are likely to ask a judge to dismiss Mr. Flores’s claims at the outset, according to several employment lawyers not involved in the case.
Mr. Flores would need to prevail against those early motions to advance into a broad discovery phase that could potentially give his lawyers access to emails and text messages of owners and managers discussing their hiring processes, materials that could provide a rare window into the NFL’s employment practices.
“The discovery process in a case like this is dangerous for both sides because you don’t know what will come out,” said Joshua Burgener, a commercial and employment litigator at law firm Dickinson Wright.
Mr. Burgener and others said the central question for a judge at the motion-to-dismiss stage would likely be whether Mr. Flores’s allegations are merely speculative or instead add up to a plausible claim that hiring practices by the NFL and its teams disfavor candidates of color.
It is conceivable that Mr. Flores survives a dismissal motion in part because of statistical evidence showing few minorities hold top positions in the league, said Howie Waldman, a labor and employment lawyer in Florida who represents employers. But to prevail on the merits, the former coach at some point will need to draw a sharper connection between his alleged exclusion from coaching jobs and his race.
Cooley blog on Flores and the Dolphins: Is the Rooney Rule just window dressing?
Blog PubCo @ Cooley Cooley LLP
USA February 3 2022 At the beginning of Black history month, in a class action complaint against the NFL and others replete with heart-breaking allegations of racism, former Head Coach of the Miami Dolphins, Brian Flores, charged that, among many other things, he and other members of the proposed class have been denied positions as head coaches and general managers as a result of racial discrimination. Defendants that have responded publicly have reportedly denied the allegations and said that the claims are without merit. Particularly notable from a governance and DEI perspective are allegations regarding the disingenuous application of the vaunted “Rooney Rule”—which originated in the NFL back in 2002 in an effort to address the dearth of Black head coaches—but has since become almost de rigueur in governance circles as one effective approach to increasing diversity in a wide variety of contexts, including boards of directors. However well-intentioned originally, the complaint alleges, “the Rooney Rule is not working.” Flores claims that, to fulfill the admonitions of the Rooney Rule, NFL teams “discriminatorily subjected” him and other Black candidates “to sham and illegitimate interviews due in whole or part to their race and/or color.” While this claim is far from the most incendiary in the complaint, if shown to be accurate, it would certainly seriously damage the reputation of the defendants involved. Can an approach that has allegedly failed to work in its original setting still be made to work effectively in other contexts?
As you may have read, Flores was fired as head coach of the Miami Dolphins last month, after three years, including two winning seasons. After his termination, he was recruited as head coach for the NY Giants. But he was not hired for the position and, the complaint alleges, he “learned that the Giants’ continued courtship was nothing more than a discriminatory façade designed to show false compliance with the Rooney Rule.” The complaint alleges that around 40 other members of the proposed class have been subject to this and other types of discriminatory conduct. By filing the complaint, Flores says that he hopes “to shine a light on the racial injustices that take place inside the NFL and to effectuate real change for the future.” Among other relief, he is seeking injunctive relief designed to “Increase the influence of Black individuals in hiring and termination decisions,” ensure diversity of ownership and decision-making and increase objectivity in hiring and termination decisions.
According to the complaint, the Rooney Rule originated in 2002, in response to adverse public reaction to a detailed report on the NFL’s head-coaching hiring practices entitled “Black Coaches in the National Football League: Superior Performance, Inferior Opportunities.” The report showed evidence of discrimination, “including that Black Head Coach candidates were less likely to be hired and that Black Head Coaches were more likely to be fired.” In response, the NFL created a “Committee on Workplace Diversity,” headed by Pittsburgh Steelers’ President Dan Rooney, which recommended that the NFL institute the “Rooney Rule,” which required “that NFL teams make a commitment to interview minority candidates for every Head Coach job opening (with limited exceptions).” The Rule was approved by the owners in 2002 and has since been amended to apply to other coach and managerial positions and to require teams to interview at least two minority head coach candidates, including one in person. Violations have resulted in team fines, the complaint alleges.
According to the complaint, however, “the Rooney Rule has failed to yield any meaningful change to an institution so fully steeped in discriminatory practices….In the 20 years since the Rooney Rule was passed, only 15 Head Coaching positions have been filled by Black Candidates. During that time, there have been approximately 129 Head Coaching vacancies. Thus only 11% of Head Coach positions have been filled by Black candidates—in a league where 70% of players are Black.” The complaint alleges that, when “the Rooney Rule was instituted, almost twenty years ago, there were three Black Head Coaches. There is now only one,” among 32 teams. Although the complaint acknowledges that “the Rooney Rule was and remains well-intentioned, its effectiveness requires NFL teams to take it seriously, and not treat it as a formality that must be endured simply to formalize the pre-determined hiring of a white coach.” “[W]hat is clear,” the complaint alleges, “is that the Rooney Rule is not working.” Among other reasons, it is “not working because management is not doing the interviews in good-faith, and it therefore creates a stigma that interviews of Black candidates are only being done to comply with the Rooney Rule rather than in recognition of the talents that the Black candidates possess.”
The complaint alleges that, to appear to comply with the Rooney Rule, Flores was subjected to the indignity of sham interviews. In particular, Flores was scheduled to interview for the Head Coach position at the New York Giants. As it turns out, the complaint alleges, the Giants had already made the decision to hire someone else—and had disclosed that decision to third parties, one of whom inadvertently leaked that decision to Flores. But the Giants still went ahead with the Flores interview, “deceptively [leading him] to believe he actually had a chance at this job.” The complaint claims that Flores then had to sit through an interview dinner with the Giant’s new General Manager, knowing that the Giants had already selected someone else and “had to give an extensive interview for a job that he already knew he would not get—an interview that was held for no reason other than for the Giants to demonstrate falsely to the League Commissioner Roger Goodell and the public at large that it was in compliance with the Rooney Rule.” As alleged, Flores was devastated to learn “that not only would he not be getting the Giants Head Coach job—the job of his dreams—but, more importantly, that he was not even being given serious consideration for the position but being treated as a box to ‘check off’ due to his race.”
Other examples are provided in the complaint. For instance, a Black candidate that had coached for many years interviewed for, but was rejected at, around 10 open head coach positions. According to the complaint, he subsequently stated that “that only two of the four interviews he engaged in that year felt like ‘legitimate interviews’ where he had a ‘legitimate shot at the job.’ He was asked in a follow-up question whether his saying two of the job interviews were ‘legitimate,’ meant he believed the other two were ‘Rooney Rule interviews.’ [He] said: ‘Take it however you want.’” Ironically, the Rooney Rule had morphed into an epithet—and a highly pejorative one at that.
In recent years, the Rooney Rule has been widely touted in governance and DEI circles as a way to cast a wider net that includes diverse candidates when seeking to fill a position. Outside of the NFL, the Rooney Rule has meant a commitment to include women and minority candidates in every pool from which candidates for certain positions are chosen. For example, the NYC Comptroller’s Boardroom Accountability Project 3.0 called on companies to adopt the Rooney Rule as a structural reform—a policy committing to include women and minority candidates in every pool from which nominees for open board seats and CEOs are selected. The Rooney Rule has also been invoked by institutional investors, such as CalSTRS, and groups that advocate for board diversity, such as the Thirty Percent Coalition, as a tool to increase the number of women on boards. And certainly, the Rooney Rule may work well in those contexts. Whatever the context, however, to be effective, as this case suggests, the Rule requires that those applying it do more than just pay it lip service. This case makes clear that companies that rely on the Rooney Rule as a strategy for achieving diversity must ensure that they are implementing that strategy—along with other strategies to increase diversity—in good faith.
Cooley LLP - Cydney S. Posner
Blog PubCo @ Cooley Cooley LLP
USA February 3 2022 At the beginning of Black history month, in a class action complaint against the NFL and others replete with heart-breaking allegations of racism, former Head Coach of the Miami Dolphins, Brian Flores, charged that, among many other things, he and other members of the proposed class have been denied positions as head coaches and general managers as a result of racial discrimination. Defendants that have responded publicly have reportedly denied the allegations and said that the claims are without merit. Particularly notable from a governance and DEI perspective are allegations regarding the disingenuous application of the vaunted “Rooney Rule”—which originated in the NFL back in 2002 in an effort to address the dearth of Black head coaches—but has since become almost de rigueur in governance circles as one effective approach to increasing diversity in a wide variety of contexts, including boards of directors. However well-intentioned originally, the complaint alleges, “the Rooney Rule is not working.” Flores claims that, to fulfill the admonitions of the Rooney Rule, NFL teams “discriminatorily subjected” him and other Black candidates “to sham and illegitimate interviews due in whole or part to their race and/or color.” While this claim is far from the most incendiary in the complaint, if shown to be accurate, it would certainly seriously damage the reputation of the defendants involved. Can an approach that has allegedly failed to work in its original setting still be made to work effectively in other contexts?
As you may have read, Flores was fired as head coach of the Miami Dolphins last month, after three years, including two winning seasons. After his termination, he was recruited as head coach for the NY Giants. But he was not hired for the position and, the complaint alleges, he “learned that the Giants’ continued courtship was nothing more than a discriminatory façade designed to show false compliance with the Rooney Rule.” The complaint alleges that around 40 other members of the proposed class have been subject to this and other types of discriminatory conduct. By filing the complaint, Flores says that he hopes “to shine a light on the racial injustices that take place inside the NFL and to effectuate real change for the future.” Among other relief, he is seeking injunctive relief designed to “Increase the influence of Black individuals in hiring and termination decisions,” ensure diversity of ownership and decision-making and increase objectivity in hiring and termination decisions.
According to the complaint, the Rooney Rule originated in 2002, in response to adverse public reaction to a detailed report on the NFL’s head-coaching hiring practices entitled “Black Coaches in the National Football League: Superior Performance, Inferior Opportunities.” The report showed evidence of discrimination, “including that Black Head Coach candidates were less likely to be hired and that Black Head Coaches were more likely to be fired.” In response, the NFL created a “Committee on Workplace Diversity,” headed by Pittsburgh Steelers’ President Dan Rooney, which recommended that the NFL institute the “Rooney Rule,” which required “that NFL teams make a commitment to interview minority candidates for every Head Coach job opening (with limited exceptions).” The Rule was approved by the owners in 2002 and has since been amended to apply to other coach and managerial positions and to require teams to interview at least two minority head coach candidates, including one in person. Violations have resulted in team fines, the complaint alleges.
According to the complaint, however, “the Rooney Rule has failed to yield any meaningful change to an institution so fully steeped in discriminatory practices….In the 20 years since the Rooney Rule was passed, only 15 Head Coaching positions have been filled by Black Candidates. During that time, there have been approximately 129 Head Coaching vacancies. Thus only 11% of Head Coach positions have been filled by Black candidates—in a league where 70% of players are Black.” The complaint alleges that, when “the Rooney Rule was instituted, almost twenty years ago, there were three Black Head Coaches. There is now only one,” among 32 teams. Although the complaint acknowledges that “the Rooney Rule was and remains well-intentioned, its effectiveness requires NFL teams to take it seriously, and not treat it as a formality that must be endured simply to formalize the pre-determined hiring of a white coach.” “[W]hat is clear,” the complaint alleges, “is that the Rooney Rule is not working.” Among other reasons, it is “not working because management is not doing the interviews in good-faith, and it therefore creates a stigma that interviews of Black candidates are only being done to comply with the Rooney Rule rather than in recognition of the talents that the Black candidates possess.”
The complaint alleges that, to appear to comply with the Rooney Rule, Flores was subjected to the indignity of sham interviews. In particular, Flores was scheduled to interview for the Head Coach position at the New York Giants. As it turns out, the complaint alleges, the Giants had already made the decision to hire someone else—and had disclosed that decision to third parties, one of whom inadvertently leaked that decision to Flores. But the Giants still went ahead with the Flores interview, “deceptively [leading him] to believe he actually had a chance at this job.” The complaint claims that Flores then had to sit through an interview dinner with the Giant’s new General Manager, knowing that the Giants had already selected someone else and “had to give an extensive interview for a job that he already knew he would not get—an interview that was held for no reason other than for the Giants to demonstrate falsely to the League Commissioner Roger Goodell and the public at large that it was in compliance with the Rooney Rule.” As alleged, Flores was devastated to learn “that not only would he not be getting the Giants Head Coach job—the job of his dreams—but, more importantly, that he was not even being given serious consideration for the position but being treated as a box to ‘check off’ due to his race.”
Other examples are provided in the complaint. For instance, a Black candidate that had coached for many years interviewed for, but was rejected at, around 10 open head coach positions. According to the complaint, he subsequently stated that “that only two of the four interviews he engaged in that year felt like ‘legitimate interviews’ where he had a ‘legitimate shot at the job.’ He was asked in a follow-up question whether his saying two of the job interviews were ‘legitimate,’ meant he believed the other two were ‘Rooney Rule interviews.’ [He] said: ‘Take it however you want.’” Ironically, the Rooney Rule had morphed into an epithet—and a highly pejorative one at that.
In recent years, the Rooney Rule has been widely touted in governance and DEI circles as a way to cast a wider net that includes diverse candidates when seeking to fill a position. Outside of the NFL, the Rooney Rule has meant a commitment to include women and minority candidates in every pool from which candidates for certain positions are chosen. For example, the NYC Comptroller’s Boardroom Accountability Project 3.0 called on companies to adopt the Rooney Rule as a structural reform—a policy committing to include women and minority candidates in every pool from which nominees for open board seats and CEOs are selected. The Rooney Rule has also been invoked by institutional investors, such as CalSTRS, and groups that advocate for board diversity, such as the Thirty Percent Coalition, as a tool to increase the number of women on boards. And certainly, the Rooney Rule may work well in those contexts. Whatever the context, however, to be effective, as this case suggests, the Rule requires that those applying it do more than just pay it lip service. This case makes clear that companies that rely on the Rooney Rule as a strategy for achieving diversity must ensure that they are implementing that strategy—along with other strategies to increase diversity—in good faith.
Cooley LLP - Cydney S. Posner
A bill that would upend how Apple and Google run their mobile app stores easily made it out of the Senate Judiciary Committee on Thursday.
Senators on the committee voted to pass the Open App Markets Act 20-2, with Sen. John Cornyn (R-Texas) and Sen. Thom Tillis (R-NC) voting no.
Senators on the committee voted to pass the Open App Markets Act 20-2, with Sen. John Cornyn (R-Texas) and Sen. Thom Tillis (R-NC) voting no.
- If the bill passes the full Senate and is signed by President Biden, Google and Apple would essentially have to give up full control of their app stores.
- New rules could require them both to allow app side-loading — installing apps from non-sanctioned marketplaces — and alternative payment processing systems. Apple and Google have argued vehemently against the bill.
- Source: Axios
Two hard-to-love companies, BARBRI and West Academic, plan to merge
By Don Allen Resnikoff
On January 4, 2022, legal exam prep company BARBRI Global, a “portfolio” company of investor Francisco Partners, announced that it has acquired West Academic from Levine Leichtman Capital Partners. West Academic is a publisher of casebooks, treatises, study aids and other legal education materials for law students. It publishes materials under three brands: West Academic Publishing, Foundation Press, and Gilbert. The January 4 announcement says that "West Academic provides industry-leading materials for tomorrow's lawyers and the schools that train them.”
From a consumer perspective, neither BARBRI or West are particularly lovable. Both are thought of as expensive by many consumers.
In 2013 BARBRI reached a $9.5 million class action lawsuit settlement over allegations it attempted to monopolize the market for bar examination courses. See
http://www.barbrisettlement.com/media/1871446/v1_stets2_notice_050613_final.pdf
The settlement resolved a class action lawsuit (Stetson, et al. v. West Publishing Corporation, et al.) that alleged that BARBRI violated antitrust laws by agreeing with rival Kaplan to limit competition in the market for bar review courses. Plaintiffs alleged that BARBRI agreed not to compete in the LSAT business and that Kaplan agreed not to compete in the bar review business, thereby allocating to BARBRI the market for full-service bar review courses in the United States and preventing a competitive bar review course from being marketed and sold.
West is a conglomeration of previously independent publishers. Publisher Thomson purchased West in 1996. Thomson also consolidated into West a number of other law book companies purchased by either Thomson or West, including Bancroft-Whitney, Banks-Baldwin, Barclay, Callaghan & Company, Clark Boardman, Foundation Press, Gilbert's, Harrison, Lawyers Cooperative Publishing, and Warren, Gorham & Lamont.
An indication of West’s book pricing policies is found in four texts sold by West Academics that are relevant to the merger and acquisition questions of law law applicable to the BARBI-West merger:
(1) Gevurtz and Sautter's Mergers and Acquisitions Law (Hornbook Series), By Franklin A. Gevurtz, Christina M. Sautter, Hardbound $146.00, eBook$109.50;
(2) Oesterle and Haas's The Law of Mergers and Acquisitions, 5th
By Dale A. Oesterle, Jeffrey J. Haas, Hardbound $245.00, eBook$183.75;
(3) Hill, Quinn, and Davidoff Solomon's Mergers and Acquisitions: Law, Theory, and Practice, 2d By Claire A. Hill, Brian JM Quinn, Steven Davidoff Solomon, Hardbound $225.00
eBook $168.75; and
(4) Bainbridge's Mergers and Acquisitions, 3d (Concepts and Insights Series)
By Stephen M. Bainbridge, , Softbound$50.00, eBook$37.50 (perhaps a relative bargain).
As an economist might say, West’s relevant costs are probably much lower than the selling prices, so that West Academics has extracted lots of rents.
It might surprise a consumer without legal or economics training, but for the USDOJ to find a theory of harm to support an antitrust prosecution of the BARBRI-West merger would likely be difficult. The companies are not direct competitors, so the price effects of the merger are not obvious. The products of the companies are complements –they have a “vertical” relationship.
A reason for consumer surprise might be the tendency for BARBRI to be an antitrust bad actor, West to be a very powerful company in its market area, and for both parties to charge what seem like very high prices.
However, just because no strong obvious theory of harm comes to the mind of experts doesn’t mean that there is no problem in the Government’s allowing the merger. Perhaps, as one respected antitrust scholar suggests, exclusion of rivals by way of control over complementary or vertical products is underestimated as a competitive risk, and it to be feared that companies in severely concentrated markets with histories of gross and aggressive consumer abuse may well have something unfortunate up their sleeves when they merge.
By Don Allen Resnikoff
On January 4, 2022, legal exam prep company BARBRI Global, a “portfolio” company of investor Francisco Partners, announced that it has acquired West Academic from Levine Leichtman Capital Partners. West Academic is a publisher of casebooks, treatises, study aids and other legal education materials for law students. It publishes materials under three brands: West Academic Publishing, Foundation Press, and Gilbert. The January 4 announcement says that "West Academic provides industry-leading materials for tomorrow's lawyers and the schools that train them.”
From a consumer perspective, neither BARBRI or West are particularly lovable. Both are thought of as expensive by many consumers.
In 2013 BARBRI reached a $9.5 million class action lawsuit settlement over allegations it attempted to monopolize the market for bar examination courses. See
http://www.barbrisettlement.com/media/1871446/v1_stets2_notice_050613_final.pdf
The settlement resolved a class action lawsuit (Stetson, et al. v. West Publishing Corporation, et al.) that alleged that BARBRI violated antitrust laws by agreeing with rival Kaplan to limit competition in the market for bar review courses. Plaintiffs alleged that BARBRI agreed not to compete in the LSAT business and that Kaplan agreed not to compete in the bar review business, thereby allocating to BARBRI the market for full-service bar review courses in the United States and preventing a competitive bar review course from being marketed and sold.
West is a conglomeration of previously independent publishers. Publisher Thomson purchased West in 1996. Thomson also consolidated into West a number of other law book companies purchased by either Thomson or West, including Bancroft-Whitney, Banks-Baldwin, Barclay, Callaghan & Company, Clark Boardman, Foundation Press, Gilbert's, Harrison, Lawyers Cooperative Publishing, and Warren, Gorham & Lamont.
An indication of West’s book pricing policies is found in four texts sold by West Academics that are relevant to the merger and acquisition questions of law law applicable to the BARBI-West merger:
(1) Gevurtz and Sautter's Mergers and Acquisitions Law (Hornbook Series), By Franklin A. Gevurtz, Christina M. Sautter, Hardbound $146.00, eBook$109.50;
(2) Oesterle and Haas's The Law of Mergers and Acquisitions, 5th
By Dale A. Oesterle, Jeffrey J. Haas, Hardbound $245.00, eBook$183.75;
(3) Hill, Quinn, and Davidoff Solomon's Mergers and Acquisitions: Law, Theory, and Practice, 2d By Claire A. Hill, Brian JM Quinn, Steven Davidoff Solomon, Hardbound $225.00
eBook $168.75; and
(4) Bainbridge's Mergers and Acquisitions, 3d (Concepts and Insights Series)
By Stephen M. Bainbridge, , Softbound$50.00, eBook$37.50 (perhaps a relative bargain).
As an economist might say, West’s relevant costs are probably much lower than the selling prices, so that West Academics has extracted lots of rents.
It might surprise a consumer without legal or economics training, but for the USDOJ to find a theory of harm to support an antitrust prosecution of the BARBRI-West merger would likely be difficult. The companies are not direct competitors, so the price effects of the merger are not obvious. The products of the companies are complements –they have a “vertical” relationship.
A reason for consumer surprise might be the tendency for BARBRI to be an antitrust bad actor, West to be a very powerful company in its market area, and for both parties to charge what seem like very high prices.
However, just because no strong obvious theory of harm comes to the mind of experts doesn’t mean that there is no problem in the Government’s allowing the merger. Perhaps, as one respected antitrust scholar suggests, exclusion of rivals by way of control over complementary or vertical products is underestimated as a competitive risk, and it to be feared that companies in severely concentrated markets with histories of gross and aggressive consumer abuse may well have something unfortunate up their sleeves when they merge.
Antitrust reform in 2022? Analysis by Jeffrey May for Walters-Kluwer
[http://antitrustconnect.com/2021/12/31/will-2022-be-the-year-in-which-antitrust-reforms-become-law/]
Comment by Don Allen Resnikoff
Jeffrey May’s topic is antitrust reform, which is the focus of a great deal of current discussion. The Biden Administration has encouraged reform discussion with talk about the importance of antitrust enforcement, and by appointing well known antitrust reformers to key positions at the FTC and the USDOJ. Legislators like Senator Klobuchar have introduced antitrust reform bills in Congress.
The path for antitrust reform is uncertain. Legislative appetite for sweeping structural reform of the economy seems limited – there are, for example, no active legislative proposals for no-fault monopoly legislation that would cap large firm size. (Senator Klobuchar does propose particularly strict antitrust rules for certain large companies.) Many of the array of current legislative proposals are unlikely to survive and pass the U.S. Senate.
Author May’s approach to making sense of the unpredictability of reform is to compile a list of currently relevant legislative proposals and to comment on them. That is a reasonable approach that improves on simply saying that antitrust reform will be difficult to achieve. May’s approach makes it possible to categorize the proposals that are on legislators’ minds. Following is a selective overview:
To my mind the legislative proposals fall roughly into five main categories: (1) proposals that leave current antitrust enforcement laws mainly unchanged, but strengthened by legislative tweaks; (2) proposals that modify the substance of antitrust laws in ways that remedy perceived shortfalls in enforcement; (3) proposals for laws with specific provisions targeted at specific industry segments, like “platform” industries. (4) Special proposals affecting baseball and OPEC. (5) Proposals to defund the FTC.
- Tweaks
Other pending legislation would assist the FTC’s antitrust enforcement efforts. One proposal (H R 2668) would make clear the power of the FTC to obtain restitution of money, and to seek disgorgement of ill-gotten gains. That would reverse the results of a US Supreme Court decision unfavorable to the FTC.
Legislation has been introduced (H R 6093) that would aid FTC enforcement by providing incentives to “whistleblowers” who reveal wrongdoing. The incentives include rewards, and protection from retaliation.
The State Antitrust Enforcement Venue Act (H R 3460; S 1787) would strengthen the ability of State AGs to control the cases they bring. The goal is to prevent transfer of cases away from the State where they were brought.
2. Modifying the substance of antitrust laws
Senator Klobuchar introduced legislation (S. 225) that would toughen the standards for merger enforcement. Section 7 of the Clayton Act would be revised to forbid mergers that “create an appreciable risk of materially increasing competition.” That would preclude more mergers than the current language, which forbids mergers that “substantially lessen competition.”
Another Klobuchar proposal contained in S. 225 would greatly expand the Clayton Act to reach “exclusionary conduct.” The statutory language explains that “The term ‘exclusionary conduct’ means conduct that— “(i) materially disadvantages 1 or more actual or potential competitors; or“ (ii) tends to foreclose or limit the ability or incentive of 1 or more actual or potential competitors to compete.”
There is a legislative proposal by Senator Mike Lee (S 2039) that would change the doctrine that antitrust remedies are foreclosed to “downstream” purchasers by case law, Illinois Brick and related cases. The proposed legislation would reverse the Illinois Brick rule and create an entitlement to recover by remote purchasers. Another proposal in the same bill would allow the USDOJ to recover treble damages on behalf of consumers.
The same Lee bill will attempt to codify a view of the much debated “consumer welfare” standard for antitrust enforcement. The bill’s language would, in the view of some critics, narrow the scope of antitrust enforcement. It provides that “In examining the competitive effects of conduct or a transaction challenged under any of the antitrust laws, a court shall consider exclusively the effects of the challenged conduct or transaction on consumer welfare, including price, output, quality, innovation, and consumer choice.”
3. Targeted proposals affecting platform companies.2 The House bills targeting tech sector platform companies are identified at page 7 of the May article. One (H R 3849) has the goal of requiring data to be easily transportable from one platform to another. Another (H R 3816; S 2992) would preclude what is perceived as the Amazon practice of self-preferencing – disadvantaging products on the Amazon platform that compete with Amazon products.
A Klobuchar/Cotton bill (the Senate version is S 3197) would put particularly burdensome merger requirements on designated platform companies perceived to have unusual market power. Another proposal (H R 3825) would block designated platform companies from integrating with downstream businesses where there is a “conflict of interest.” (An example is Google if it acts as owner of the platform and a competitor on the platform.) Another proposal (S 2710; H R 5017) would provide app developers with expanded rights against Google and Apple.
4. Proposals affecting OPEC and baseball
Briefly, proposals have been made to eliminate the judicially created exemption of baseball from antitrust enforcement, and to authorize the USDOJ to sue the OPEC oil cartel, notwithstanding that sovereign governments are involved in the cartel.
5. Proposals to divest the FTC of antitrust jurisdiction.
Senator Mike Lee’s proposed S 2039 includes a “one agency” provision that would divest the FTC of antitrust enforcement authority, leaving the USDOJ as the exclusive federal antitrust enforcer.
CONCLUSION
Jeffrey May’s article is an excellent aid in parsing recent legislative proposals affecting antitrust enforcement. There is doubt about enactment of any of the proposals, but knowing about them is helpful in assessing possible future paths for antirust reform, whether through changes in antitrust by regulatory agencies and the courts, or through the legislative political process.
DAR
A new lawsuit charges major U.S. universities and college with violating antitrust laws by coordinating concerning students' financial aid packages.
The schools allegedly "participated in a price-fixing cartel that is designed to reduce or eliminate financial aid...and that in fact has artificially inflated the net price of attendance for students receiving financial aid."
See the Complaint at https://www.courtlistener.com/docket/62017107/henry-v-brown-university/
Here is an excerpt from the Complaint Introduction:
- Defendants are private, national universities that have long been in the top 25 of the U.S. News & World Report rankings for such schools. These elite institutions occupy a place of privilege and importance in American society. And yet these same Defendants, by their own admission, have participated in a price-fixing cartel that is designed to reduce or eliminate financial aid as a locus of competition, and that in fact has artificially inflated the net price of attendance for students receiving financial aid. Defendants participate in the cartel claiming the protection of Section 568 of the Improving America's Schools Act of 1994 (the "568 Exemption"). This exemption from the antitrust laws, which otherwise prohibit conspiracies among competitors, applies to two or more institutions of higher education at which "all students admitted are admitted on a need-blind basis." Section 568 defines "on a need-blind basis" to mean "without regard to the financial circumstances of the student involved or the student's family." 15 U.S.C. § 1 Note.
- Defendants have not been entitled to the 568 Exemption. Under a true need-blind admissions system, all students would be admitted without regard to the financial circumstances of the student or student's family. Far from following this practice, at least nine Defendants for many years have favored wealthy applicants in the admissions process. These nine Defendants have thus made admissions decisions with regard to the financial circumstances of students and their families, thereby disfavoring students who need financial aid. All Defendants, in turn, have conspired to reduce the amount of financial aid they provide to admitted students. This conspiracy, which has existed (with slightly varying membership) for many years, thus falls outside the exemption from the antitrust laws.
- Defendants are members of the so-called "568 Presidents Group," in which the members have agreed on "a set of common standards for determining the family's ability to pay for college," which the members describe as the "Consensus Approach." Based on the Consensus Approach, in approximately 2003 the 568 Presidents Group (the "568 Cartel") devised the Consensus Methodology, which is a common formula for determining an applicant's ability to pay. Under the Consensus Methodology, an applicant's ability to pay is a substantial determinant of the net price, which is the institution's gross tuition plus fees for room and board, less institutional grant aid, charged to the applicant for attendance.
- In collectively adopting this methodology, and regularly meeting to implement it jointly, the 568 Cartel has explicitly aimed to reduce or eliminate price competition among its members. As a result of this conspiracy, the net price of attendance for financial-aid recipients at Defendants' schools has been artificially inflated. In short, due to the conduct challenged herein, over almost two decades, Defendants have overcharged over 170,000 financial-aid recipients by at least hundreds of millions of dollars, in violation of Section 1 of the Sherman Act.
- Defendants' longstanding conspiracy would be immune from the antitrust laws only if they have all been complying with the 568 Exemption. In fact, however, at least nine Defendants (Columbia, Dartmouth, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn, and Vanderbilt) have been members of the 568 Cartel and have not qualified for the 568 Exemption throughout the Class Periods (defined below).
- Instead, these nine Defendants have considered the financial circumstances of students and their families in admissions- for example, by maintaining admissions systems that favor the children of wealthy past or potential future donors. At least some of these nine Defendants also take into account applicants' financial circumstances through a largely secretive practice known as "enrollment management." And at least some of these nine Defendants have also considered applicants' need for financial aid by preferencing students who will not need financial aid in deciding on waitlist admissions.
- The other seven Defendants (Brown, CalTech, Chicago, Cornell, Emory, Rice, and Yale) have been members of the 568 Cartel during at least parts of the last two decades. These seven Defendants may or may not have adhered to need-blind admissions policies, but they nonetheless conspired with the other Defendants. The 568 Exemption thus does not apply to them either. In addition, although such knowledge is unnecessary to show their liability, these seven Defendants knew or should have known that the other nine Defendants were not following need blind admissions policies.
- In critical respects, elite, private universities like Defendants are gatekeepers to the American Dream. Defendants' misconduct is therefore particularly egregious because it has narrowed a critical pathway to upward mobility that admission to their institutions represents. The burden of the 568 Cartel's overcharges falls in particular on low- and middle-income families struggling to afford the cost of a university education and to achieve success for their children. In addition, unlike prior admissions scandals, such as Varsity Blues,1 the 568 Cartel's systematic suppression of financial aid is the official policy of its participants.
Biden antitrust litigation --
by Don Allen Resnikoff
We are at what is widely perceived as a watershed moment for antitrust enforcement. Thanks to President Joe Biden, Lina Khan and Tim Wu now have important roles at the FTC. They are well known as dynamic thinkers about competition policy. Jonathan Kanter, known as an adversary of Facebook and Google, will lead the antitrust division of the Justice Department. Facebook and Google are among tech companies widely thought of as potential targets of aggressive enforcement.
Some have suggested that since the inauguration of President Biden the antitrust litigation efforts of the FTC and USDOJ are already more aggressive, and that regulators other than the FTC and USDOJ have stepped up and acted as aggressive antitrust enforcers.
But some journalists and commenters seem to be overstating or simply misstating what is happening in antitrust. Some talk about antitrust as now addressing immediate and difficult political and economic issues such as inflation and income disparity. Antitrust enforcement is certainly linked to political issues. But a misunderstanding of the linkage between antitrust enforcement and politics can lead to the error of thinking that political predispositions should determine the outcome of antitrust enforcement actions. For that reason, I think some words of caution are in order about the importance of traditional due process principles in antitrust enforcement.
I am not suggesting that the Biden antitrust appointees fail to see the importance of due process principles. The words of caution are for others. I think that the Biden appointees understand very well that what should determine antitrust outcomes is, of course, due process litigation principles that have been followed in the US at least since the time of Thurman Arnold and the FDR New Deal. As US citizens we expect due process in antitrust enforcement: we expect that antitrust litigation targets will be apprised of well defined and fair and consistent requirements of the law, and that they will be given a right to defend before a fair and impartial judicial decision maker. The rights of antitrust litigants in the US are not different from other litigants, as defined in such cases as Goldberg v. Kelly, 397 U.S. 254, 267 (1970). The rights of US litigants are different from those of litigants in China, where antitrust enforcement can be bureaucratic, quixotic, and short on due process rights. See Chinese Antitrust Exceptionalism: How The Rise of China Challenges Global Regulation by Angela Huyue Zhang (University of Hong Kong) :: Oxford University Press (2021)
It is comforting to see that in the Biden Administration there has been significant continuity with traditional antitrust enforcement styles. The USDOJ and FTC continue to follow some traditional litigation enforcement practices, including application of usual due process procedures. That traditional enforcement practices persist is not too surprising, since antitrust litigation is generally pursued under the watchful eye of judges who expect due process in their courts.
Following are a few examples that illustrate that under the Biden Administration much of government antitrust litigation has stayed on well recognized tracks.
One example is what some say is one of USDOJ’s biggest recent successes -- blocking the merger of two large insurance companies, Aon and Willis Towers Watson.
A June 2021 press release of the USDOJ describes its filed Complaint in the Aon/Willis matter in a way that should please advocates of vigorous enforcement, but it is also an example of following traditional antitrust enforcement practices. The following press release excerpts describe market power allegations in the Complaint that are similar to the sort of carefully honed and provable allegations the USDOJ has made in merger cases for decades:
The U.S. Department of Justice filed a civil antitrust lawsuit today to block Aon’s $30 billion proposed acquisition of Willis Towers Watson, a transaction that would bring together two of the “Big Three” global insurance brokers. As alleged in the complaint filed in the U.S. District Court for the District of Columbia, the merger threatens to eliminate competition, raise prices, and reduce innovation for American businesses, employers, and unions that rely on these important services.
“Today’s action demonstrates the Justice Department’s commitment to stopping harmful consolidation and preserving competition that directly and indirectly benefits Americans across the country,” said Attorney General Merrick B. Garland. “American companies and consumers rely on competition between Aon and Willis Towers Watson to lower prices for crucial services, such as health and retirement benefits consulting. Allowing Aon and Willis Towers Watson to merge would reduce that vital competition and leave American customers with fewer choices, higher prices, and lower quality services.”
Another recent example of antitrust enforcement following a traditional track are bid rigging charges brought against Contech Engineered Solutions LLC (Contech). Contech pleaded guilty to one count of violating the Sherman Act and one count of conspiracy to commit fraud, as charged in a six-count indictment filed in the Eastern District of North Carolina on Oct. 21, 2020. An excerpt from the June, 2021 USDOJ press release follows:
Engineering Firm Pleads Guilty to Decade-Long Bid Rigging and Fraud Scheme
Company Sentenced to Pay $7 Million in Criminal Fine and Over $1.5 Million in Restitution to North Carolina Department of Transportation
A North Carolina engineering firm was sentenced today after pleading guilty to long lasting conspiracies to rig bids and defraud the North Carolina Department of Transportation (NCDOT).
According to court documents, Contech Engineered Solutions LLC (Contech) pleaded guilty to one count of violating the Sherman Act and one count of conspiracy to commit fraud, as charged in a six-count indictment filed in the Eastern District of North Carolina on Oct. 21, 2020. Contech admitted to conspiring to rig bids to the NCDOT and conspiring to defraud the NCDOT in order to fraudulently obtain contracts for infrastructure projects. The conspiracies started at least as early as 2009 and continued at least until March 2018. Former Contech executive Brent Brewbaker was charged as a co-defendant in the same six-count indictment, and he remains under indictment.
“Today’s resolution demonstrates the Antitrust Division’s unwavering commitment to holding accountable those who cheat the competitive process at the expense of the American taxpayer,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “A critical part of that mission is seeking restitution to compensate government victims of public procurement crimes.”
Other examples of Biden Administration antitrust enforcement are more novel, and as such may be praiseworthy examples of aggressive and innovative antitrust enforcement. For one example, The U.S. Surface Transportation Board recently flexed its antitrust muscles and exercised its antitrust authority with regard to Canadian National Railway Co.'s takeover bid for Kansas City Southern Railway. The Board denied use of a device called “voting trust” which would have facilitated the merger. The trust would have allowed KCS to remain independent while a full and lengthy review of the proposed takeover goes forward, while also allowing shareholders to be paid without having to wait for a final decision on the deal.
The Surface Transportation Board said that while the trust would mean CN wasn't in direct control of KCS operations, it would still be a beneficial owner and share in profits:
"Antitrust regulators have long recognized that the sort of financial interest that CN would have in KCS is sufficient to alter a firm's incentive to compete vigorously."
An “all-of-government” engagement of an array of regulatory agencies may be a useful tool for effective antitrust enforcement. The Surface Transportation Board is just one of several federal agencies that combine public interest and antitrust enforcement powers.
But to return to our cautionary points, some public commenters and political advocates need to be more aware that political pressures can be brought to bear on antitrust enforcement in ways that can undermine traditional due process practices and do harm. The unfortunate consequences include loss of confidence in the fairness of enforcement procedures. The examples of political misuse of antitrust that come to mind are from the Trump Administration, not the Biden Administration, but the Trump examples illustrate the hazards to be avoided.
Law professor Chris Sagers opined that President Trump’s U.S. Antitrust chief enforcer Delrahim “proved to be yet another of the president’s political hacks." See https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html Among other things, Sagers talks about the Trump USDOJ’s challenge to the AT&T/Time Warner merger. Sagers discusses the allegations that the USDOJ action was pursued to punish President Trump’s political enemy, Time Warner’s CNN. Sagers finds the allegations “hard to doubt.”
Whether Sagers is right or not about what happened, he is certainly right that antitrust litigation should not be pursued for political reasons not tied to the merits of the matter.
Spencer Waller’s article The Political Misuse of Antitrust https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/ , helpfully reviews the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Among them is the USDOJ’s past guidance on the impropriety of government prosecutorial decisions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
To be clear, I’ll repeat that I don’t think there is a need to fear that Biden appointees will go off of the traditional track of due process in antitrust enforcement. I don’t think they want to emulate the perceived behavior of Donald Trump or Chinese antitrust bureaucrats in misusing antitrust enforcement as a cudgel to secure political goals, ignoring usual due process protections. That is, well defined charges, and a full opportunity to defend before an impartial judge, among other due process elements. But I worry that some commenters and politicians don’t see it that way. So, some words of caution seem in order.
DAR
by Don Allen Resnikoff
We are at what is widely perceived as a watershed moment for antitrust enforcement. Thanks to President Joe Biden, Lina Khan and Tim Wu now have important roles at the FTC. They are well known as dynamic thinkers about competition policy. Jonathan Kanter, known as an adversary of Facebook and Google, will lead the antitrust division of the Justice Department. Facebook and Google are among tech companies widely thought of as potential targets of aggressive enforcement.
Some have suggested that since the inauguration of President Biden the antitrust litigation efforts of the FTC and USDOJ are already more aggressive, and that regulators other than the FTC and USDOJ have stepped up and acted as aggressive antitrust enforcers.
But some journalists and commenters seem to be overstating or simply misstating what is happening in antitrust. Some talk about antitrust as now addressing immediate and difficult political and economic issues such as inflation and income disparity. Antitrust enforcement is certainly linked to political issues. But a misunderstanding of the linkage between antitrust enforcement and politics can lead to the error of thinking that political predispositions should determine the outcome of antitrust enforcement actions. For that reason, I think some words of caution are in order about the importance of traditional due process principles in antitrust enforcement.
I am not suggesting that the Biden antitrust appointees fail to see the importance of due process principles. The words of caution are for others. I think that the Biden appointees understand very well that what should determine antitrust outcomes is, of course, due process litigation principles that have been followed in the US at least since the time of Thurman Arnold and the FDR New Deal. As US citizens we expect due process in antitrust enforcement: we expect that antitrust litigation targets will be apprised of well defined and fair and consistent requirements of the law, and that they will be given a right to defend before a fair and impartial judicial decision maker. The rights of antitrust litigants in the US are not different from other litigants, as defined in such cases as Goldberg v. Kelly, 397 U.S. 254, 267 (1970). The rights of US litigants are different from those of litigants in China, where antitrust enforcement can be bureaucratic, quixotic, and short on due process rights. See Chinese Antitrust Exceptionalism: How The Rise of China Challenges Global Regulation by Angela Huyue Zhang (University of Hong Kong) :: Oxford University Press (2021)
It is comforting to see that in the Biden Administration there has been significant continuity with traditional antitrust enforcement styles. The USDOJ and FTC continue to follow some traditional litigation enforcement practices, including application of usual due process procedures. That traditional enforcement practices persist is not too surprising, since antitrust litigation is generally pursued under the watchful eye of judges who expect due process in their courts.
Following are a few examples that illustrate that under the Biden Administration much of government antitrust litigation has stayed on well recognized tracks.
One example is what some say is one of USDOJ’s biggest recent successes -- blocking the merger of two large insurance companies, Aon and Willis Towers Watson.
A June 2021 press release of the USDOJ describes its filed Complaint in the Aon/Willis matter in a way that should please advocates of vigorous enforcement, but it is also an example of following traditional antitrust enforcement practices. The following press release excerpts describe market power allegations in the Complaint that are similar to the sort of carefully honed and provable allegations the USDOJ has made in merger cases for decades:
The U.S. Department of Justice filed a civil antitrust lawsuit today to block Aon’s $30 billion proposed acquisition of Willis Towers Watson, a transaction that would bring together two of the “Big Three” global insurance brokers. As alleged in the complaint filed in the U.S. District Court for the District of Columbia, the merger threatens to eliminate competition, raise prices, and reduce innovation for American businesses, employers, and unions that rely on these important services.
“Today’s action demonstrates the Justice Department’s commitment to stopping harmful consolidation and preserving competition that directly and indirectly benefits Americans across the country,” said Attorney General Merrick B. Garland. “American companies and consumers rely on competition between Aon and Willis Towers Watson to lower prices for crucial services, such as health and retirement benefits consulting. Allowing Aon and Willis Towers Watson to merge would reduce that vital competition and leave American customers with fewer choices, higher prices, and lower quality services.”
Another recent example of antitrust enforcement following a traditional track are bid rigging charges brought against Contech Engineered Solutions LLC (Contech). Contech pleaded guilty to one count of violating the Sherman Act and one count of conspiracy to commit fraud, as charged in a six-count indictment filed in the Eastern District of North Carolina on Oct. 21, 2020. An excerpt from the June, 2021 USDOJ press release follows:
Engineering Firm Pleads Guilty to Decade-Long Bid Rigging and Fraud Scheme
Company Sentenced to Pay $7 Million in Criminal Fine and Over $1.5 Million in Restitution to North Carolina Department of Transportation
A North Carolina engineering firm was sentenced today after pleading guilty to long lasting conspiracies to rig bids and defraud the North Carolina Department of Transportation (NCDOT).
According to court documents, Contech Engineered Solutions LLC (Contech) pleaded guilty to one count of violating the Sherman Act and one count of conspiracy to commit fraud, as charged in a six-count indictment filed in the Eastern District of North Carolina on Oct. 21, 2020. Contech admitted to conspiring to rig bids to the NCDOT and conspiring to defraud the NCDOT in order to fraudulently obtain contracts for infrastructure projects. The conspiracies started at least as early as 2009 and continued at least until March 2018. Former Contech executive Brent Brewbaker was charged as a co-defendant in the same six-count indictment, and he remains under indictment.
“Today’s resolution demonstrates the Antitrust Division’s unwavering commitment to holding accountable those who cheat the competitive process at the expense of the American taxpayer,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “A critical part of that mission is seeking restitution to compensate government victims of public procurement crimes.”
Other examples of Biden Administration antitrust enforcement are more novel, and as such may be praiseworthy examples of aggressive and innovative antitrust enforcement. For one example, The U.S. Surface Transportation Board recently flexed its antitrust muscles and exercised its antitrust authority with regard to Canadian National Railway Co.'s takeover bid for Kansas City Southern Railway. The Board denied use of a device called “voting trust” which would have facilitated the merger. The trust would have allowed KCS to remain independent while a full and lengthy review of the proposed takeover goes forward, while also allowing shareholders to be paid without having to wait for a final decision on the deal.
The Surface Transportation Board said that while the trust would mean CN wasn't in direct control of KCS operations, it would still be a beneficial owner and share in profits:
"Antitrust regulators have long recognized that the sort of financial interest that CN would have in KCS is sufficient to alter a firm's incentive to compete vigorously."
An “all-of-government” engagement of an array of regulatory agencies may be a useful tool for effective antitrust enforcement. The Surface Transportation Board is just one of several federal agencies that combine public interest and antitrust enforcement powers.
But to return to our cautionary points, some public commenters and political advocates need to be more aware that political pressures can be brought to bear on antitrust enforcement in ways that can undermine traditional due process practices and do harm. The unfortunate consequences include loss of confidence in the fairness of enforcement procedures. The examples of political misuse of antitrust that come to mind are from the Trump Administration, not the Biden Administration, but the Trump examples illustrate the hazards to be avoided.
Law professor Chris Sagers opined that President Trump’s U.S. Antitrust chief enforcer Delrahim “proved to be yet another of the president’s political hacks." See https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html Among other things, Sagers talks about the Trump USDOJ’s challenge to the AT&T/Time Warner merger. Sagers discusses the allegations that the USDOJ action was pursued to punish President Trump’s political enemy, Time Warner’s CNN. Sagers finds the allegations “hard to doubt.”
Whether Sagers is right or not about what happened, he is certainly right that antitrust litigation should not be pursued for political reasons not tied to the merits of the matter.
Spencer Waller’s article The Political Misuse of Antitrust https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/ , helpfully reviews the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Among them is the USDOJ’s past guidance on the impropriety of government prosecutorial decisions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
To be clear, I’ll repeat that I don’t think there is a need to fear that Biden appointees will go off of the traditional track of due process in antitrust enforcement. I don’t think they want to emulate the perceived behavior of Donald Trump or Chinese antitrust bureaucrats in misusing antitrust enforcement as a cudgel to secure political goals, ignoring usual due process protections. That is, well defined charges, and a full opportunity to defend before an impartial judge, among other due process elements. But I worry that some commenters and politicians don’t see it that way. So, some words of caution seem in order.
DAR
Why a Chinese company dominates the international market for electric car batteries
A recent New York Times story explains that the Chinese CATL company has become a dominant international player in electric car batteries. The company already supplies batteries to almost all of the world’s automakers, including G.M., Volkswagen, BMW and Tesla.
One reason for CATL’s success is obvious: CATL is the beneficiary of Chinese government policies with the goal of making CATL a national industrial champion. Influential Chinese people are part of the CATL operation. The Chinese government has been generous in supplying money.
The New York Times article provides some detail. For example:
In 2011 the Chinese government required that foreign automakers that want to sell electric cars in China transfer crucial technology to a local company. Only then would the government subsidize the sale of their autos.
In 2015 the Chinese government unveiled the Made in China 2025 plan, a guide to achieving independence in major industries of the future, including electric cars, in a decade.
Chinese policy banks, which lend to government-endorsed projects that may be too risky for local banks, stepped in to provide more than $100 million to CATL projects in Qinghai, where important raw materials are located. The provincial government of Qinghai offered roughly $33 million from 2015 through 2017.
CATL benefited greatly from the government’s drive to get automakers in China to use only locally made batteries.
Do these anecdotes carry a point about Chinese government policies and US government policies? Of course. It is obvious that in the absence of a US government strategy responsive to Chinese government policy, Chinese companies may have dominant international roles in car batteries and other industries.
Underneath the obvious point are complexities. Chinese industrial policies are not as monolithic as may appear on the surface. Various national and local government agencies vie for authority, and some ostensibly are interested in promoting competitive industries.
US policies have their complexities as well. The US has traditions of legal due process that are weak in China, where judicial review of agency actions is much less important. The US has significant anti-monopoly traditions. Yet the US imposes tariffs and other import restraints that appear to have protectionist goals.
How the interplay of Chinese and US business regulation will work out is something that remains to be seen.
The full New York Times article is at https://www.nytimes.com/2021/12/22/business/china-catl-electric-car-batteries.html?smid=em-share
A recent New York Times story explains that the Chinese CATL company has become a dominant international player in electric car batteries. The company already supplies batteries to almost all of the world’s automakers, including G.M., Volkswagen, BMW and Tesla.
One reason for CATL’s success is obvious: CATL is the beneficiary of Chinese government policies with the goal of making CATL a national industrial champion. Influential Chinese people are part of the CATL operation. The Chinese government has been generous in supplying money.
The New York Times article provides some detail. For example:
In 2011 the Chinese government required that foreign automakers that want to sell electric cars in China transfer crucial technology to a local company. Only then would the government subsidize the sale of their autos.
In 2015 the Chinese government unveiled the Made in China 2025 plan, a guide to achieving independence in major industries of the future, including electric cars, in a decade.
Chinese policy banks, which lend to government-endorsed projects that may be too risky for local banks, stepped in to provide more than $100 million to CATL projects in Qinghai, where important raw materials are located. The provincial government of Qinghai offered roughly $33 million from 2015 through 2017.
CATL benefited greatly from the government’s drive to get automakers in China to use only locally made batteries.
Do these anecdotes carry a point about Chinese government policies and US government policies? Of course. It is obvious that in the absence of a US government strategy responsive to Chinese government policy, Chinese companies may have dominant international roles in car batteries and other industries.
Underneath the obvious point are complexities. Chinese industrial policies are not as monolithic as may appear on the surface. Various national and local government agencies vie for authority, and some ostensibly are interested in promoting competitive industries.
US policies have their complexities as well. The US has traditions of legal due process that are weak in China, where judicial review of agency actions is much less important. The US has significant anti-monopoly traditions. Yet the US imposes tariffs and other import restraints that appear to have protectionist goals.
How the interplay of Chinese and US business regulation will work out is something that remains to be seen.
The full New York Times article is at https://www.nytimes.com/2021/12/22/business/china-catl-electric-car-batteries.html?smid=em-share
U.S. FAA Issues Safety Alert on 5G Interference to Aircraft
U.S. regulators at the Federal Aviation Administration are warning airlines that a new band of 5G mobile phone service approved by the Federal Communications Commission might interfere with key safety devices on aircraft.
The FAA issued a Special Airworthiness Information Bulletin warning that “action might be required to address potential interference with sensitive aircraft electronics.”
The 5G spectrum abuts radio signals used by so-called radar altimeters, which measure how close an aircraft is to the ground.
While FAA took pains to say it is working with the Federal Communications Commission and other agencies to allow the new technology to safely coexist with aviation, the safety alert creates an unusual situation in which one agency raises concerns while another has granted its approval. It also illustrates growing frustration within the aviation industry.
Canada recently imposed restrictions on locating new 5G cell towers near the runways of large airports. Australia, France and other nations have taken steps to limit the chances of aircraft interference.
Radar altimeters are used on planes and helicopters for multiple critical safety functions, including landing when visibility is low, anti-collision warnings and systems that warn pilots when they inadvertently get too low. Some commercial helicopter flights can’t operate without a working radar altimeter.
“The FCC is committed to continuing to work with its federal partners to simultaneously preserve air safety and advance the deployment of new technologies that promote American consumer and business needs,” the agency said in a statement.
On December 20 the Wall Street Journal reported that the problem has not been solved.
See article at https://www.bloomberg.com/news/articles/2021-11-02/u-s-faa-issues-safety-alert-on-5g-interference-to-aircraft
U.S. regulators at the Federal Aviation Administration are warning airlines that a new band of 5G mobile phone service approved by the Federal Communications Commission might interfere with key safety devices on aircraft.
The FAA issued a Special Airworthiness Information Bulletin warning that “action might be required to address potential interference with sensitive aircraft electronics.”
The 5G spectrum abuts radio signals used by so-called radar altimeters, which measure how close an aircraft is to the ground.
While FAA took pains to say it is working with the Federal Communications Commission and other agencies to allow the new technology to safely coexist with aviation, the safety alert creates an unusual situation in which one agency raises concerns while another has granted its approval. It also illustrates growing frustration within the aviation industry.
Canada recently imposed restrictions on locating new 5G cell towers near the runways of large airports. Australia, France and other nations have taken steps to limit the chances of aircraft interference.
Radar altimeters are used on planes and helicopters for multiple critical safety functions, including landing when visibility is low, anti-collision warnings and systems that warn pilots when they inadvertently get too low. Some commercial helicopter flights can’t operate without a working radar altimeter.
“The FCC is committed to continuing to work with its federal partners to simultaneously preserve air safety and advance the deployment of new technologies that promote American consumer and business needs,” the agency said in a statement.
On December 20 the Wall Street Journal reported that the problem has not been solved.
See article at https://www.bloomberg.com/news/articles/2021-11-02/u-s-faa-issues-safety-alert-on-5g-interference-to-aircraft
antitrust-division-seeks-additional-public-comments-bank-merger-competitive-analysis
I was recently asked by a reporter to comment on the DOJ's announcement that it is seeking additional public comments on how and whether it should update the 1995 Bank Merger Competitive Review Guidelines:
https://www.justice.gov/opa/pr/antitrust-division-seeks-additional-public-comments-bank-merger-competitive-analysis
Following is what I sent to the reporter.
Don Allen Resnikoff
**
I'm guessing that you'd like a reply from me that is quick and, hopefully, pithy, despite the complexities of the subject matter.
Democrat v. Republican partisan quarrels are likely to be a focus of commenters, and there do seem to be some differences of opinion that split on party lines. The traditional USDOJ way of dealing with bank mergers has been criticized by progressives as too lax. Congresswoman Maxine Waters (D. Ca) wrote in a recent letter that "Scholars and regulators have written about the need for a stronger framework, including through lowering the concentration thresholds for enhanced scrutiny of mergers, more rigorous evaluation of financial stability risks, and consideration of potential conflicts of interest, which is especially important as a range of markets are becoming more concentrated." https://financialservices.house.gov/news/email/show.aspx?ID=CWRRGI26ELG3KXMYL73UMHJNPQ -- https://financialservices.house.gov/news/email/show.aspx?ID=CWRRGI26ELG3KXMYL73UMHJNPQ
Congresswoman Water's comments are consistent with more general complaints about merger enforcement, as reflected in comments of AAI's Diana L. Moss in “Merger Policy and Rising Concentration: An Active Agenda for Antitrust Enforcement, Antitrust,” Vol 33 (2018), https://www.antitrustinstitute.org/wp-content/uploads/2018/12/Antitrust-Mag-2018_Moss.pdf Moss points out that “evidence of rising concentration bolsters progressives’ longstanding concerns about lax merger enforcement”.
And, some partisan battles about regulation of banking have erupted in regulatory agencies. Politico comments that "The FDIC is currently in the throes of an internal power struggle. The immediate issue at the FDIC is about whether the agency is controlled by a majority of its board of directors or by its chair, Jelena McWilliams. All of the directors other than McWilliams are Joe Biden appointees; McWilliams is a Donald Trump holdover." https://www.politico.com/news/magazine/2021/12/16/biden-fire-fdic-chief-525140
On the other hand, some of the complex issues of how to regulate banking may transcend partisan bickering. The recent USDOJ call for comments concerning merger guidelines at https://www.justice.gov/opa/pr/antitrust-division-seeks-additional-public-comments-bank-merger-competitive-analysis is notable for an ecumenical tone. While the call for comments compliments the insights of CFPB Director Rohit Chopra, who was involved in the recent McWilliams kerfuffle at the FDIC, the call also highlights efforts of former head of DOJ's Antitrust Division, Makan Delrahim.
Many issues of bank regulation are complex, whether approached from a "left" or "right" perspective. For example, under the heading “Relevant Product and Geographic Markets,” the call for comments explains that, depending on the transaction, the Division generally reviews three separate product markets in banking matters: (1) retail banking products and services, (2) small business banking products and services, and (3) middle market banking products and services. The question that follows is: "Are there additional product markets that the Division should include in its analysis?" That is a complicated question to answer, in part because in recent years the banks have taken on non-traditional roles, such as investment banking and dealing in derivatives. Some of those activities involve partnerships with fintech firms. The recently withdrawn Office of Comptroller of Currency candidate Saule Omarova was vocal in expressing concerns about OCC interpretations that expanded national bank derivatives activities to include derivatives on commodities and equities, and the Federal Reserve’s granting of Section 23A exemptions on dealings with affiliates immediately before and during the 2008 Financial Crisis; and the exemptions from the definition of a “bank” under the Bank Holding Company Act. The U.S. Comptroller of the Currency Nominee and Her Writings: What They Mean for Banks and Fintechs
Complexity is also heightened because the Department of Justice shares merger review jurisdiction with the Federal Reserve, the FDIC, the Office of Thrift Supervision, or the Office of the Comptroller of the Currency, depending on which agency has jurisdiction over the relevant category of banking institution. The Federal Reserve has been the most important of these because of its jurisdiction over mergers involving bank holding companies.
In the aftermath of the financial crisis of 2008, there were many large bank mergers, most of which involved bank holding companies, such as Bank of America, JPMorgan Chase, and Wells Fargo. Those mergers were subject to review by both the Federal Reserve and the Department of Justice. The procedure relevant to interagency collaboration is that the acquiring bank first files an application with the Federal Reserve (or one of the other regulatory agencies, as applicable), which will then pass the application on to the Antitrust Division for review. The Federal Reserve or other regulatory agency then reviews the application concurrently with the Antitrust Division. The analytical approaches of the Antitrust Division are somewhat different from the approaches of the Federal Reserve Board and the other regulatory agencies, but in past years the differences have certainly not obstructed the recent U.S. government tendency to facilitate nationwide consolidation in banking.
Improving coordination between USDOJ and regulatory agencies concerning bank mergers and considering needed updates to relevant procedures is a complex and important challenge that politicians with differing views will need to deal with.
I hope I have helped.
Don Allen Resnikoff
I was recently asked by a reporter to comment on the DOJ's announcement that it is seeking additional public comments on how and whether it should update the 1995 Bank Merger Competitive Review Guidelines:
https://www.justice.gov/opa/pr/antitrust-division-seeks-additional-public-comments-bank-merger-competitive-analysis
Following is what I sent to the reporter.
Don Allen Resnikoff
**
I'm guessing that you'd like a reply from me that is quick and, hopefully, pithy, despite the complexities of the subject matter.
Democrat v. Republican partisan quarrels are likely to be a focus of commenters, and there do seem to be some differences of opinion that split on party lines. The traditional USDOJ way of dealing with bank mergers has been criticized by progressives as too lax. Congresswoman Maxine Waters (D. Ca) wrote in a recent letter that "Scholars and regulators have written about the need for a stronger framework, including through lowering the concentration thresholds for enhanced scrutiny of mergers, more rigorous evaluation of financial stability risks, and consideration of potential conflicts of interest, which is especially important as a range of markets are becoming more concentrated." https://financialservices.house.gov/news/email/show.aspx?ID=CWRRGI26ELG3KXMYL73UMHJNPQ -- https://financialservices.house.gov/news/email/show.aspx?ID=CWRRGI26ELG3KXMYL73UMHJNPQ
Congresswoman Water's comments are consistent with more general complaints about merger enforcement, as reflected in comments of AAI's Diana L. Moss in “Merger Policy and Rising Concentration: An Active Agenda for Antitrust Enforcement, Antitrust,” Vol 33 (2018), https://www.antitrustinstitute.org/wp-content/uploads/2018/12/Antitrust-Mag-2018_Moss.pdf Moss points out that “evidence of rising concentration bolsters progressives’ longstanding concerns about lax merger enforcement”.
And, some partisan battles about regulation of banking have erupted in regulatory agencies. Politico comments that "The FDIC is currently in the throes of an internal power struggle. The immediate issue at the FDIC is about whether the agency is controlled by a majority of its board of directors or by its chair, Jelena McWilliams. All of the directors other than McWilliams are Joe Biden appointees; McWilliams is a Donald Trump holdover." https://www.politico.com/news/magazine/2021/12/16/biden-fire-fdic-chief-525140
On the other hand, some of the complex issues of how to regulate banking may transcend partisan bickering. The recent USDOJ call for comments concerning merger guidelines at https://www.justice.gov/opa/pr/antitrust-division-seeks-additional-public-comments-bank-merger-competitive-analysis is notable for an ecumenical tone. While the call for comments compliments the insights of CFPB Director Rohit Chopra, who was involved in the recent McWilliams kerfuffle at the FDIC, the call also highlights efforts of former head of DOJ's Antitrust Division, Makan Delrahim.
Many issues of bank regulation are complex, whether approached from a "left" or "right" perspective. For example, under the heading “Relevant Product and Geographic Markets,” the call for comments explains that, depending on the transaction, the Division generally reviews three separate product markets in banking matters: (1) retail banking products and services, (2) small business banking products and services, and (3) middle market banking products and services. The question that follows is: "Are there additional product markets that the Division should include in its analysis?" That is a complicated question to answer, in part because in recent years the banks have taken on non-traditional roles, such as investment banking and dealing in derivatives. Some of those activities involve partnerships with fintech firms. The recently withdrawn Office of Comptroller of Currency candidate Saule Omarova was vocal in expressing concerns about OCC interpretations that expanded national bank derivatives activities to include derivatives on commodities and equities, and the Federal Reserve’s granting of Section 23A exemptions on dealings with affiliates immediately before and during the 2008 Financial Crisis; and the exemptions from the definition of a “bank” under the Bank Holding Company Act. The U.S. Comptroller of the Currency Nominee and Her Writings: What They Mean for Banks and Fintechs
Complexity is also heightened because the Department of Justice shares merger review jurisdiction with the Federal Reserve, the FDIC, the Office of Thrift Supervision, or the Office of the Comptroller of the Currency, depending on which agency has jurisdiction over the relevant category of banking institution. The Federal Reserve has been the most important of these because of its jurisdiction over mergers involving bank holding companies.
In the aftermath of the financial crisis of 2008, there were many large bank mergers, most of which involved bank holding companies, such as Bank of America, JPMorgan Chase, and Wells Fargo. Those mergers were subject to review by both the Federal Reserve and the Department of Justice. The procedure relevant to interagency collaboration is that the acquiring bank first files an application with the Federal Reserve (or one of the other regulatory agencies, as applicable), which will then pass the application on to the Antitrust Division for review. The Federal Reserve or other regulatory agency then reviews the application concurrently with the Antitrust Division. The analytical approaches of the Antitrust Division are somewhat different from the approaches of the Federal Reserve Board and the other regulatory agencies, but in past years the differences have certainly not obstructed the recent U.S. government tendency to facilitate nationwide consolidation in banking.
Improving coordination between USDOJ and regulatory agencies concerning bank mergers and considering needed updates to relevant procedures is a complex and important challenge that politicians with differing views will need to deal with.
I hope I have helped.
Don Allen Resnikoff
DC AG Press release:
AG Racine Files Lawsuit to Hold January 6 Insurrectionists Accountable & Stand Up for Harmed District Law Enforcement Officers
December 14, 2021WASHINGTON, D.C. –
Attorney General Karl A. Racine today filed a federal lawsuit to hold two violent groups accountable for the role they played in planning and carrying out the deadly January 6, 2021 attack on the U.S. Capitol. The lawsuit specifically claims the groups, and their leaders and members, caused extensive damage to the District of Columbia, and particularly to the law enforcement officers who risked their lives to defend the Capitol, those in it, the District, and our democracy.
Full press release: https://oag.dc.gov/release/ag-racine-files-lawsuit-hold-january-6
Karl Racine interview by CNBC:
https://www.msnbc.com/morning-joe/watch/dc-attorney-general-sues-proud-boys-oath-keepers-for-damages-from-jan-6-attack-128771141884
AG Racine Files Lawsuit to Hold January 6 Insurrectionists Accountable & Stand Up for Harmed District Law Enforcement Officers
December 14, 2021WASHINGTON, D.C. –
Attorney General Karl A. Racine today filed a federal lawsuit to hold two violent groups accountable for the role they played in planning and carrying out the deadly January 6, 2021 attack on the U.S. Capitol. The lawsuit specifically claims the groups, and their leaders and members, caused extensive damage to the District of Columbia, and particularly to the law enforcement officers who risked their lives to defend the Capitol, those in it, the District, and our democracy.
Full press release: https://oag.dc.gov/release/ag-racine-files-lawsuit-hold-january-6
Karl Racine interview by CNBC:
https://www.msnbc.com/morning-joe/watch/dc-attorney-general-sues-proud-boys-oath-keepers-for-damages-from-jan-6-attack-128771141884
From LA Times: Rand Paul demands federal disaster aid for Kentucky, after voting against it for everyone else
BY MICHAEL HILTZIKBUSINESS COLUMNIST
DEC. 13, 2021 11:44 AM PT
Consider the two faces of Sen. Rand Paul (R-Ky.).
First, the Rand Paul of Dec. 11, writing to President Biden after a string of tornadoes devastated his home state, killing at least 64 and leveling whole communities:
“The Governor of the Commonwealth has requested federal assistance this morning, and certainly further requests will be coming as the situation is assessed. I fully support those requests and ask that you move expeditiously to approve the appropriate resources for our state.”
Second, the Rand Paul of Oct. 24, 2017, on the Senate floor opposing a $36.5-billion disaster aid bill to help residents of Texas, Louisiana, Florida and Puerto Rico after hurricanes Harvey, Irma and Maria as well as victims of wildfires in California:
“People here will say they have great compassion and they want to help the people of Puerto Rico, the people of Texas, the people of Florida, but notice they have great compassion with someone else’s money. Ask them what they’re doing to help their fellow man.”
Excerpt from https://www.latimes.com/business/story/2021-12-13/hiltzik-rand-paul-kentucky-tornado-aid-after-voting-against-it-for-everyone-else
BY MICHAEL HILTZIKBUSINESS COLUMNIST
DEC. 13, 2021 11:44 AM PT
Consider the two faces of Sen. Rand Paul (R-Ky.).
First, the Rand Paul of Dec. 11, writing to President Biden after a string of tornadoes devastated his home state, killing at least 64 and leveling whole communities:
“The Governor of the Commonwealth has requested federal assistance this morning, and certainly further requests will be coming as the situation is assessed. I fully support those requests and ask that you move expeditiously to approve the appropriate resources for our state.”
Second, the Rand Paul of Oct. 24, 2017, on the Senate floor opposing a $36.5-billion disaster aid bill to help residents of Texas, Louisiana, Florida and Puerto Rico after hurricanes Harvey, Irma and Maria as well as victims of wildfires in California:
“People here will say they have great compassion and they want to help the people of Puerto Rico, the people of Texas, the people of Florida, but notice they have great compassion with someone else’s money. Ask them what they’re doing to help their fellow man.”
Excerpt from https://www.latimes.com/business/story/2021-12-13/hiltzik-rand-paul-kentucky-tornado-aid-after-voting-against-it-for-everyone-else
The DC AG as antitrust enforcer and litigator against big tech “platform” companies
Karl Racine is the first elected Attorney General of Washington D. C. He assumed office in 2015. His current term ends on January 2, 2023. He has said that he won’t seek re-election. One question for candidates who will seek the AG office is whether they will continue his policies, particularly with regard to actions against large tech “platform” companies, including antitrust actions.
Following are several D.C. AG press releases from the last few months that are relevant, including D.C. actions against large tech “platform” companies that would impose limits on the companies but that are not strictly about antitrust. Brief excerpts are provided.
AG Racine Opening Statement About His Antitrust Lawsuit Against Amazon for Senate Finance Subcommittee Hearing
December 7, 2021
Attorney General Karl A. Racine today will testify at a hearing in the U.S. Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth. Below is an excerpt from his opening statement.
Excerpt:
[W]e were the first attorney general office to bring an antitrust lawsuit against Amazon alleging that it is illegally controlling prices through restrictive agreements with third-party sellers that sell on Amazon’s marketplace and wholesalers that feed Amazon’s retail business.
Amazon claims that everything it does in business is about the consumer. Well, even just a cursory look – and certainly our investigation – reveals otherwise. Amazon is focused on one thing only: its bottom line, even at the expense of consumers – like the ones it claims to care so much about. In fact, Amazon is costing all of us more money by controlling prices across the entire market.
As you have said before, Senator Warren – I too, am a capitalist. A fair profit is more than fair. A great profit is more than fair. And people should get paid for entrepreneurship and hard work. But when companies use their market power to reduce competition and take advantage of consumers under the guise of creating efficiencies, regulators must step in.
Right now, many families are hurting. They’re trying to keep a roof over their heads, food on the table, and clothes on their back. And if they’re lucky, maybe afford a few Christmas presents. But Amazon’s pricing policies contribute to making that unattainable.
Back in 2019, Amazon was facing pressure from Congress and regulators over anti-competitive behavior. To put regulators at ease, Amazon claimed it removed a clause in its agreements with third-party sellers that prohibited them from offering their goods for lower prices or on better terms on competing online marketplaces, including the third-party sellers’ own websites.
Spoiler alert: Amazon did a bait-and-switch by replacing the initial agreement with something nearly identical.
Let me give an example of how this works. If I’m a third-party seller selling headphones and I want to list my product on Amazon, I must do the following: Sell the headphones at a price on the Amazon marketplace that allows me to still earn a reasonable profit after incorporating Amazon’s high fees and commissions. Then, I’m barred from selling my headphones on any other platform, including my own website at a lower price, even though I could earn the same profit by doing so. And if I do, I – the third-party seller – could get kicked off of Amazon or have other significant sanctions imposed on me.
This leaves third-party sellers with two choices. They can sell their product on Amazon under these restrictive terms. Or they can only offer their product on other marketplaces. But because Amazon controls between 50-70% of all online sales, third-party sellers have little choice but to accept Amazon’s terms.
These agreements impose an artificially high price floor across the online retail marketplace. By charging such high fees – as much as 40% of the product price – Amazon is inflating the prices for consumers on its platform and competing platforms. For example, if I’m selling a pair of headphones for $100 on Amazon. Up to $40 dollars of that price is to cover Amazon’s fees. Plain and simple, this is inflation.
And consumers lose in this scheme. As a result of Amazon’s agreements, consumers think they’re getting the lowest prices on Amazon’s marketplace because they don’t see any lower prices on other online marketplaces. But, absent these agreements, third-party sellers could offer their products for lower prices on other online marketplaces.
And Amazon isn’t just doing this with third-party sellers, they’re doing it with wholesalers as well—so we added that to our lawsuit too.
First-party sellers sell products to Amazon for Amazon to resell at retail to consumers. If Amazon lowers its retail prices to match or beat a lower price on a competing online marketplace, the wholesalers are forced to pay Amazon the difference between the agreed-upon profit and what Amazon realizes with the lowered retail price. This can lead to wholesalers owing Amazon millions of dollars. To avoid triggering this agreement, wholesalers have increased the prices to and on competing online marketplaces.
AG Racine Files Brief Supporting Effort to Hold Facebook Accountable For Falsely Claiming to Remove Hate Speech From Its Platform
December 6, 2021
Attorney General Karl A. Racine filed a brief urging the Superior Court of the District of Columbia not to grant technology platforms sweeping immunity from local consumer protection law, and to allow a private lawsuit challenging Facebook’s deceptive claims about its content moderation…
Excerpt from press release:
“As we know from countless documents and sworn testimony of former Facebook employees, Facebook and its senior executives know exactly what they’re doing and why they’re doing it. They are bombarding users with hateful and violent content every day—because Facebook cares more about profit than it cares about protecting its consumers and being responsible about hate speech,” said AG Racine. “Now Facebook is trying to claim that it—and other massive tech companies—are above the law and cannot be held accountable for their false statements to consumers. But no company is entitled to mislead consumers, and there is nothing in local or federal law that shields companies like Facebook from the consequences of their own deception.”
Muslim Advocates, a national civil rights organization based in the District, filed suit against Facebook and its executives in April 2020 to hold the company accountable for misleading consumers about the safety of its product. In its lawsuit, Muslim Advocates alleged that Facebook and its senior leadership violated DC’s consumer protection laws when they repeatedly and falsely claimed to remove hate speech and harmful content from its platform. The group highlights the hateful anti-Muslim attacks that remain pervasive on Facebook, and the alleged failure of the tech giant to uphold its policies requiring the removal of harmful content, including hate speech, bullying, harassment, and violence.
In its amicus brief supporting Muslim Advocates, OAG urges the Court to allow the case to move forward because:
- District law prohibits all companies from misleading consumers: The District’s Consumer Protection Procedures Act (CPPA) prohibits a wide variety of deceptive and unlawful businesses practices that harm consumers. The law applies to all consumer goods and services, whether they are sold, leased, or transferred. In its motion seeking dismissal of Muslim Advocates’ lawsuit, Facebook argues that it cannot be held accountable under the CPPA because it does not charge consumers a monetary fee. OAG’s brief explains that the law clearly protects consumers from all improper trade practices, regardless of whether a consumer pays a fee to use the service.
- Granting tech platforms immunity from the District’s consumer protection laws would harm District residents: Exempting tech companies that do not charge monetary fees from consumer protection laws would harm District consumers and diminish their access to truthful information about many of the services they use every day. Today, many companies operate like Facebook: they provide purportedly free online services in exchange for access to consumers’ personal data, which they sell to third parties or use to sell advertising. While users may not pay money for these services, they are “paying” with something of value: sensitive personal information, including information about their demographic characteristics, physical locations, search histories, and even health-related information. These large and powerful tech companies should not be exempt from accountability when they harm and mislead consumers.
- Federal law does not protect tech platforms from being held accountable for false statements and misrepresentations: In Facebook’s motion to dismiss, the tech platform argues that a federal law—Section 230 of the Communications Decency Act—exempts it from any legal responsibility for its own statements to consumers. OAG’s brief explains why this is wrong. Section 230 shields tech platforms from lawsuits related to the content posted on their platforms by third parties. However, it does not provide businesses with immunity for their own unlawful representations about their goods and services. The District explains that the statute simply does not apply in this case, where consumers are seeking to hold Facebook and its executives accountable for their own alleged misrepresentations about the services the company provides.
Suing Mark Zuckerberg and Holding CEOs Accountable
November 1, 2021
In October, I added Facebook CEO Mark Zuckerberg to a lawsuit I filed in 2018 suing Facebook. Our lawsuit goes after Facebook for deceiving its consumers about the steps Facebook would take to protect user data.
Testimony https://oag.dc.gov/newsroom?category%5B10%5D=10
From the press release:
Our lawsuit goes after Facebook for deceiving its consumers about the steps Facebook would take to protect user data. These failures to put in place safeguards promised to consumers impacted tens of millions of users nationally and nearly half of all District residents – including by allowing Cambridge Analytica, a private company, to acquire and use that data to influence voters and manipulate the 2016 election. The Cambridge Analytica scandal is still the largest consumer privacy scandal in the nation’s history.
We did our due diligence over the past two years before taking this step of adding Mark Zuckerberg to our lawsuit. Since we originally filed the lawsuit in December 2018, my office has reviewed hundreds of thousands of pages of documents that have been produced in the litigation.
We have conducted a wide range of depositions, from Facebook’s directors to former employees and whistleblowers. We have also reviewed documents produced in other cases, as well as many hours of public statements by Mr. Zuckerberg, including his sworn testimony before the U.S. Senate and other law enforcement agencies.
The evidence we gathered is clear: Mark Zuckerberg knowingly and actively participated in the decisions that led to Cambridge Analytica’s mass collection of Facebook user data. On top of this, he also made misrepresentations to users, the public, and government officials about how secure the data on Facebook was and about Facebook’s role.
Under these circumstances, adding Mark Zuckerberg to our lawsuit is warranted, and sends a strong message that corporate leaders, including CEOs, will be held accountable for their actions.
To learn more about the case, read this New York Times article.https://www.nytimes.com/2021/10/20/technology/mark-zuckerberg-facebook-lawsuit.html
To learn more about the significance of the case, watch my interview on CNN’s OutFront and listen to my interview with NPR’s Morning Edition.
Karl A. Racine
Attorney General
Amazon’s search results are full of ads ‘unlawfully deceiving’ consumers, new complaint to FTC claims
A FTC new complaint alleges Amazon uses “deliberately" confusing practices in search results, misleading users about advertisements on the platform. Ad sales are one of Amazon’s fastest growing businesses, and the complaint alleges its practices run afoul of consumer protection laws.
See https://www.washingtonpost.com/technology/2021/12/08/amazon-search-results-ftc-complaint/
A FTC new complaint alleges Amazon uses “deliberately" confusing practices in search results, misleading users about advertisements on the platform. Ad sales are one of Amazon’s fastest growing businesses, and the complaint alleges its practices run afoul of consumer protection laws.
See https://www.washingtonpost.com/technology/2021/12/08/amazon-search-results-ftc-complaint/
Consumer Reports on high auto loan rates
A Consumer Reports article explains that llaws governing auto loan financing caps vary dramatically from state to state—there is no federal interest rate limit—and individual state usury laws, which make it illegal to charge excessive interest, are complicated and can appear to contradict other statutes on the books, Consumer Reports found. As a result, in some places consumers can be charged interest rates on car loans more commonly associated with predatory payday lending. The problem may be especially acute for people with poor credit.
“We need comprehensive laws that address all the ways dealers and lenders can take advantage of people and provide meaningful protections for buyers,” says R.J. Cross, tax and budget advocate for the U.S. Public Interest Research Group, a consumer advocacy and political organization that has researched auto lending.
The article is at America’s Loophole-Ridden Auto Lending Laws Harm Consumers - Consumer Reports https://www.consumerreports.org/car-financing/how-loophole-ridden-auto-lending-laws-harm-consumers-a3113489289/
A Consumer Reports article explains that llaws governing auto loan financing caps vary dramatically from state to state—there is no federal interest rate limit—and individual state usury laws, which make it illegal to charge excessive interest, are complicated and can appear to contradict other statutes on the books, Consumer Reports found. As a result, in some places consumers can be charged interest rates on car loans more commonly associated with predatory payday lending. The problem may be especially acute for people with poor credit.
“We need comprehensive laws that address all the ways dealers and lenders can take advantage of people and provide meaningful protections for buyers,” says R.J. Cross, tax and budget advocate for the U.S. Public Interest Research Group, a consumer advocacy and political organization that has researched auto lending.
The article is at America’s Loophole-Ridden Auto Lending Laws Harm Consumers - Consumer Reports https://www.consumerreports.org/car-financing/how-loophole-ridden-auto-lending-laws-harm-consumers-a3113489289/
A second look at The Case Against the Supreme Court, the 2014 book by Erwin Chemerinsky
This seems like a good moment to take down from the bookshelf Erwin Chemerinsky’s 2014 book, The Case Against the Supreme Court (Viking, 386 pages).
The book argues that over time the U.S. Supreme Court’s decisions have frequently been wrong. The wrong case decisions are often a product of the ideology of the Justices who decide the cases. For Chemerinsky, ideology means the “values, views, and prejudices” of the Justices. Those values, views and prejudices are not necessarily the same as those of a particular political party, but often overlap. There have been some moments when the Court’s wrong decisions were partisan in the sense of favoring a particular political party’s agenda.
The author’s suggestions for structural reform of the Court are mild. He does not, for example, advocate doing away with the Court's power to review laws for their constitutionality. He would have Congress impose term limits, perhaps 18 years, so that the prevailing ideologies of a particular moment in history are less likely to persist for decades.
Chemerinsky is not recommending that operatives for a particular political party he favors be appointed as Justices – very few people have that point. But it seems likely that he would subscribe to the popular observation that elections matter.
Turning to some of the history recounted by the author, one point of ideology that has caused harm concerns race. The “separate but equal” doctrine justifying racial separation was the law of the land for many decades. The doctrine was abandoned by the U.S. Supreme Court only in 1954, in Brown v. Board of Education, which Chemerinsky hails as a high point of good Supreme Court decision making. But it took the Court a long time to get there -- decades. And Chemerinsky finds the Court’s follow-up on the Brown decision to be less than perfect.
And, Chemerinsky points out, the ideology of the judges deciding Brown was crucial. The deciding judges believed in racial equality and were not “originalists.” They did not limit interpretation of the Constitution to what the framers originally intended. Recall that framer Thomas Jefferson (who wrote "all men are created equal") owned slaves, and engaged in sexual predation.
Among other points of ideology that have caused harm is hostility to ethnic minorities such as the Japanese. In Korematsu v. United States, the Court, in a 6-3 decision, upheld evacuation and internment of Japanese-American citizens. Chemerinsky points out that the decision was highly offensive in its reliance on ethnicity alone to decide who is a threat to national security.
Another important point of ideology is antipathy to regulations intended to protect workers and consumers. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
This article is posted by Don Allen Resnikoff, who takes responsibility for the views expressed.
END
This seems like a good moment to take down from the bookshelf Erwin Chemerinsky’s 2014 book, The Case Against the Supreme Court (Viking, 386 pages).
The book argues that over time the U.S. Supreme Court’s decisions have frequently been wrong. The wrong case decisions are often a product of the ideology of the Justices who decide the cases. For Chemerinsky, ideology means the “values, views, and prejudices” of the Justices. Those values, views and prejudices are not necessarily the same as those of a particular political party, but often overlap. There have been some moments when the Court’s wrong decisions were partisan in the sense of favoring a particular political party’s agenda.
The author’s suggestions for structural reform of the Court are mild. He does not, for example, advocate doing away with the Court's power to review laws for their constitutionality. He would have Congress impose term limits, perhaps 18 years, so that the prevailing ideologies of a particular moment in history are less likely to persist for decades.
Chemerinsky is not recommending that operatives for a particular political party he favors be appointed as Justices – very few people have that point. But it seems likely that he would subscribe to the popular observation that elections matter.
Turning to some of the history recounted by the author, one point of ideology that has caused harm concerns race. The “separate but equal” doctrine justifying racial separation was the law of the land for many decades. The doctrine was abandoned by the U.S. Supreme Court only in 1954, in Brown v. Board of Education, which Chemerinsky hails as a high point of good Supreme Court decision making. But it took the Court a long time to get there -- decades. And Chemerinsky finds the Court’s follow-up on the Brown decision to be less than perfect.
And, Chemerinsky points out, the ideology of the judges deciding Brown was crucial. The deciding judges believed in racial equality and were not “originalists.” They did not limit interpretation of the Constitution to what the framers originally intended. Recall that framer Thomas Jefferson (who wrote "all men are created equal") owned slaves, and engaged in sexual predation.
Among other points of ideology that have caused harm is hostility to ethnic minorities such as the Japanese. In Korematsu v. United States, the Court, in a 6-3 decision, upheld evacuation and internment of Japanese-American citizens. Chemerinsky points out that the decision was highly offensive in its reliance on ethnicity alone to decide who is a threat to national security.
Another important point of ideology is antipathy to regulations intended to protect workers and consumers. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
This article is posted by Don Allen Resnikoff, who takes responsibility for the views expressed.
END
Christina Jackson: Pandemic exposes DC government’s failure to distribute unemployment benefits to people in need
Excerpt from https://thedcline.org/2021/11/16/christina-jackson-pandemic-exposes-dc-governments-failure-to-distribute-unemployment-benefits-to-people-in-need/
The COVID-19 pandemic caused many DC residents to lose their jobs and erased years of employment progress. In February 2020, just before the pandemic began, the District’s unemployment rate had fallen to a five-year low of 4.9%. Two months later, unemployment more than doubled to 11.1%. Some people who lost their jobs have since found new employment, but not nearly enough have been able to do so. As of September 2021, the unemployment rate was still 6.5%.
Even worse, the District government has failed to ensure that people who lose their jobs receive the unemployment benefits to which they are entitled. These long-standing failures became especially conspicuous when the federal government expanded unemployment benefits during the pandemic.
The pandemic presented a stress test to the District’s unemployment system, and the DC Department of Employment Services (DOES) flunked.
Excerpt from https://thedcline.org/2021/11/16/christina-jackson-pandemic-exposes-dc-governments-failure-to-distribute-unemployment-benefits-to-people-in-need/
The COVID-19 pandemic caused many DC residents to lose their jobs and erased years of employment progress. In February 2020, just before the pandemic began, the District’s unemployment rate had fallen to a five-year low of 4.9%. Two months later, unemployment more than doubled to 11.1%. Some people who lost their jobs have since found new employment, but not nearly enough have been able to do so. As of September 2021, the unemployment rate was still 6.5%.
Even worse, the District government has failed to ensure that people who lose their jobs receive the unemployment benefits to which they are entitled. These long-standing failures became especially conspicuous when the federal government expanded unemployment benefits during the pandemic.
The pandemic presented a stress test to the District’s unemployment system, and the DC Department of Employment Services (DOES) flunked.
A National Labor Relations Board regional director has decided that Amazon warehouse workers in Bessemer, Ala., will get a second vote on whether to unionize.
Complaints about the first vote concerned issues such as the placement of a mailbox at the warehouse and signage posted nearby, and the NLRB regional director said the company disregarded the rules for the election and interfered with employees' "rights to an election free of coercion and interference."
Full Story: CNN (11/29), National Public Radio (11/29)
SCOTUS hears arguments over HHS hospital-payments rule
Justices of the US Supreme Court expressed concern about the complexity of a case concerning a rule that opponents say has curtailed additional Medicare payments that go to hospitals with a large proportion of poor patients. The case centers on a rule from the Department of Health and Human Services that altered the formula for calculating disproportionate share hospital adjustments, as the payments are known.
Full Story: Bloomberg Law (11/29)
Rittenhouse and Wisconsin self-defense law
Kyle Rittenhouse'strial for shooting three men during street protests in Wisconsin last summer resulted in acquittal. The case outcome may be seen as an artifact of Wisconsin's self-defense law. Prosecutors' argued that he acted recklessly and dangerously, but the defense argument included self defense within the meaning of Wisconsin law.
From the WSJ [ Kyle Rittenhouse Shooting Trial to Focus on Reasonableness, Self-Defense - WSJ https://www.wsj.com/articles/kyle-rittenhouse-shooting-trial-to-focus-on-reasonableness-self-defense-11635428739?mod=article_inline]
“What is really terribly difficult for the state is that under Wisconsin law the prosecutor will have the burden of negating self-defense, beyond a reasonable doubt. And to negate anything is difficult, to negate it beyond a reasonable doubt is extraordinary,” said Daniel Blinka, a former prosecutor and professor at Marquette University Law School in Milwaukee.
In Wisconsin, a defendant needs only to present some evidence of self-defense in order to impose the burden of proof on the prosecution to negate that claim beyond a reasonable doubt, Mr. Blinka said. About 17 other states have similar laws, according to research by the National Conference of State Legislatures. In most states, the defendant has to prove their actions were reasonable.
“The self-defense provisions in Wisconsin clearly favor the defense,” said Joshua Dressler, a professor emeritus at Ohio State University’s law school and author of a widely used textbook on criminal law.
Here, from a Wisconsin lawyers' blog, is a summary of the Wisconsin law.
See What Are Wisconsin's Self-Defense Laws? - Gamino Law Offices, LLC https://gamino.law/what-are-wisconsins-self-defense-laws/
Under Wisconsin law, you’re allowed to use self-defense to protect yourself by threatening to use force or by actually using force against someone, but only if:
In a case like that, the prosecutor would most likely try to show the jury that you could’ve deescalated the situation without killing the other person. He or she might suggest that you could’ve simply retreated from the situation. In other cases, the prosecutor might argue that you provoked the original attack.
Sometimes you have a duty to retreat from a situation. If you provoke an attack, you can’t claim self-defense unless you’ve exhausted every other reasonable means to escape from the situation. If you didn’t provoke the attack, the jury in your case will look at whether you had a chance to retreat from the situation in most cases.
***
The Wisconsin statute language:
2020 Wisconsin Statutes & Annotations
Chapter 939. Crimes — general provisions.
939.48 Self-defense and defense of others.
Universal Citation: WI Stat § 939.48 (2020)939.48 Self-defense and defense of others.
(1) A person is privileged to threaten or intentionally use force against another for the purpose of preventing or terminating what the person reasonably believes to be an unlawful interference with his or her person by such other person. The actor may intentionally use only such force or threat thereof as the actor reasonably believes is necessary to prevent or terminate the interference. The actor may not intentionally use force which is intended or likely to cause death or great bodily harm unless the actor reasonably believes that such force is necessary to prevent imminent death or great bodily harm to himself or herself.
(1m)
(a) In this subsection:
1. “Dwelling" has the meaning given in s. 895.07 (1) (h).
2. “Place of business" means a business that the actor owns or operates.
(ar) If an actor intentionally used force that was intended or likely to cause death or great bodily harm, the court may not consider whether the actor had an opportunity to flee or retreat before he or she used force and shall presume that the actor reasonably believed that the force was necessary to prevent imminent death or great bodily harm to himself or herself if the actor makes such a claim under sub. (1) and either of the following applies:
1. The person against whom the force was used was in the process of unlawfully and forcibly entering the actor's dwelling, motor vehicle, or place of business, the actor was present in the dwelling, motor vehicle, or place of business, and the actor knew or reasonably believed that an unlawful and forcible entry was occurring.
2. The person against whom the force was used was in the actor's dwelling, motor vehicle, or place of business after unlawfully and forcibly entering it, the actor was present in the dwelling, motor vehicle, or place of business, and the actor knew or reasonably believed that the person had unlawfully and forcibly entered the dwelling, motor vehicle, or place of business.
(b) The presumption described in par. (ar) does not apply if any of the following applies:
1. The actor was engaged in a criminal activity or was using his or her dwelling, motor vehicle, or place of business to further a criminal activity at the time.
2. The person against whom the force was used was a public safety worker, as defined in s. 941.375 (1) (b), who entered or attempted to enter the actor's dwelling, motor vehicle, or place of business in the performance of his or her official duties. This subdivision applies only if at least one of the following applies:
a. The public safety worker identified himself or herself to the actor before the force described in par. (ar) was used by the actor.
b. The actor knew or reasonably should have known that the person entering or attempting to enter his or her dwelling, motor vehicle, or place of business was a public safety worker.
(2) Provocation affects the privilege of self-defense as follows:
(a) A person who engages in unlawful conduct of a type likely to provoke others to attack him or her and thereby does provoke an attack is not entitled to claim the privilege of self-defense against such attack, except when the attack which ensues is of a type causing the person engaging in the unlawful conduct to reasonably believe that he or she is in imminent danger of death or great bodily harm. In such a case, the person engaging in the unlawful conduct is privileged to act in self-defense, but the person is not privileged to resort to the use of force intended or likely to cause death to the person's assailant unless the person reasonably believes he or she has exhausted every other reasonable means to escape from or otherwise avoid death or great bodily harm at the hands of his or her assailant.
(b) The privilege lost by provocation may be regained if the actor in good faith withdraws from the fight and gives adequate notice thereof to his or her assailant.
(c) A person who provokes an attack, whether by lawful or unlawful conduct, with intent to use such an attack as an excuse to cause death or great bodily harm to his or her assailant is not entitled to claim the privilege of self-defense.
(3) The privilege of self-defense extends not only to the intentional infliction of harm upon a real or apparent wrongdoer, but also to the unintended infliction of harm upon a 3rd person, except that if the unintended infliction of harm amounts to the crime of first-degree or 2nd-degree reckless homicide, homicide by negligent handling of dangerous weapon, explosives or fire, first-degree or 2nd-degree reckless injury or injury by negligent handling of dangerous weapon, explosives or fire, the actor is liable for whichever one of those crimes is committed.
(4) A person is privileged to defend a 3rd person from real or apparent unlawful interference by another under the same conditions and by the same means as those under and by which the person is privileged to defend himself or herself from real or apparent unlawful interference, provided that the person reasonably believes that the facts are such that the 3rd person would be privileged to act in self-defense and that the person's intervention is necessary for the protection of the 3rd person.
(5) A person is privileged to use force against another if the person reasonably believes that to use such force is necessary to prevent such person from committing suicide, but this privilege does not extend to the intentional use of force intended or likely to cause death.
(6) In this section “unlawful" means either tortious or expressly prohibited by criminal law or both.
History: 1987 a. 399; 1993 a. 486; 2005 a. 253; 2011 a. 94.
Kyle Rittenhouse'strial for shooting three men during street protests in Wisconsin last summer resulted in acquittal. The case outcome may be seen as an artifact of Wisconsin's self-defense law. Prosecutors' argued that he acted recklessly and dangerously, but the defense argument included self defense within the meaning of Wisconsin law.
From the WSJ [ Kyle Rittenhouse Shooting Trial to Focus on Reasonableness, Self-Defense - WSJ https://www.wsj.com/articles/kyle-rittenhouse-shooting-trial-to-focus-on-reasonableness-self-defense-11635428739?mod=article_inline]
“What is really terribly difficult for the state is that under Wisconsin law the prosecutor will have the burden of negating self-defense, beyond a reasonable doubt. And to negate anything is difficult, to negate it beyond a reasonable doubt is extraordinary,” said Daniel Blinka, a former prosecutor and professor at Marquette University Law School in Milwaukee.
In Wisconsin, a defendant needs only to present some evidence of self-defense in order to impose the burden of proof on the prosecution to negate that claim beyond a reasonable doubt, Mr. Blinka said. About 17 other states have similar laws, according to research by the National Conference of State Legislatures. In most states, the defendant has to prove their actions were reasonable.
“The self-defense provisions in Wisconsin clearly favor the defense,” said Joshua Dressler, a professor emeritus at Ohio State University’s law school and author of a widely used textbook on criminal law.
Here, from a Wisconsin lawyers' blog, is a summary of the Wisconsin law.
See What Are Wisconsin's Self-Defense Laws? - Gamino Law Offices, LLC https://gamino.law/what-are-wisconsins-self-defense-laws/
Under Wisconsin law, you’re allowed to use self-defense to protect yourself by threatening to use force or by actually using force against someone, but only if:
- You use only the force necessary to prevent or terminate interference with your person or someone else’s person.
- You must reasonably believe that such force is necessary to prevent imminent death or great bodily harm to yourself.
In a case like that, the prosecutor would most likely try to show the jury that you could’ve deescalated the situation without killing the other person. He or she might suggest that you could’ve simply retreated from the situation. In other cases, the prosecutor might argue that you provoked the original attack.
Sometimes you have a duty to retreat from a situation. If you provoke an attack, you can’t claim self-defense unless you’ve exhausted every other reasonable means to escape from the situation. If you didn’t provoke the attack, the jury in your case will look at whether you had a chance to retreat from the situation in most cases.
***
The Wisconsin statute language:
2020 Wisconsin Statutes & Annotations
Chapter 939. Crimes — general provisions.
939.48 Self-defense and defense of others.
Universal Citation: WI Stat § 939.48 (2020)939.48 Self-defense and defense of others.
(1) A person is privileged to threaten or intentionally use force against another for the purpose of preventing or terminating what the person reasonably believes to be an unlawful interference with his or her person by such other person. The actor may intentionally use only such force or threat thereof as the actor reasonably believes is necessary to prevent or terminate the interference. The actor may not intentionally use force which is intended or likely to cause death or great bodily harm unless the actor reasonably believes that such force is necessary to prevent imminent death or great bodily harm to himself or herself.
(1m)
(a) In this subsection:
1. “Dwelling" has the meaning given in s. 895.07 (1) (h).
2. “Place of business" means a business that the actor owns or operates.
(ar) If an actor intentionally used force that was intended or likely to cause death or great bodily harm, the court may not consider whether the actor had an opportunity to flee or retreat before he or she used force and shall presume that the actor reasonably believed that the force was necessary to prevent imminent death or great bodily harm to himself or herself if the actor makes such a claim under sub. (1) and either of the following applies:
1. The person against whom the force was used was in the process of unlawfully and forcibly entering the actor's dwelling, motor vehicle, or place of business, the actor was present in the dwelling, motor vehicle, or place of business, and the actor knew or reasonably believed that an unlawful and forcible entry was occurring.
2. The person against whom the force was used was in the actor's dwelling, motor vehicle, or place of business after unlawfully and forcibly entering it, the actor was present in the dwelling, motor vehicle, or place of business, and the actor knew or reasonably believed that the person had unlawfully and forcibly entered the dwelling, motor vehicle, or place of business.
(b) The presumption described in par. (ar) does not apply if any of the following applies:
1. The actor was engaged in a criminal activity or was using his or her dwelling, motor vehicle, or place of business to further a criminal activity at the time.
2. The person against whom the force was used was a public safety worker, as defined in s. 941.375 (1) (b), who entered or attempted to enter the actor's dwelling, motor vehicle, or place of business in the performance of his or her official duties. This subdivision applies only if at least one of the following applies:
a. The public safety worker identified himself or herself to the actor before the force described in par. (ar) was used by the actor.
b. The actor knew or reasonably should have known that the person entering or attempting to enter his or her dwelling, motor vehicle, or place of business was a public safety worker.
(2) Provocation affects the privilege of self-defense as follows:
(a) A person who engages in unlawful conduct of a type likely to provoke others to attack him or her and thereby does provoke an attack is not entitled to claim the privilege of self-defense against such attack, except when the attack which ensues is of a type causing the person engaging in the unlawful conduct to reasonably believe that he or she is in imminent danger of death or great bodily harm. In such a case, the person engaging in the unlawful conduct is privileged to act in self-defense, but the person is not privileged to resort to the use of force intended or likely to cause death to the person's assailant unless the person reasonably believes he or she has exhausted every other reasonable means to escape from or otherwise avoid death or great bodily harm at the hands of his or her assailant.
(b) The privilege lost by provocation may be regained if the actor in good faith withdraws from the fight and gives adequate notice thereof to his or her assailant.
(c) A person who provokes an attack, whether by lawful or unlawful conduct, with intent to use such an attack as an excuse to cause death or great bodily harm to his or her assailant is not entitled to claim the privilege of self-defense.
(3) The privilege of self-defense extends not only to the intentional infliction of harm upon a real or apparent wrongdoer, but also to the unintended infliction of harm upon a 3rd person, except that if the unintended infliction of harm amounts to the crime of first-degree or 2nd-degree reckless homicide, homicide by negligent handling of dangerous weapon, explosives or fire, first-degree or 2nd-degree reckless injury or injury by negligent handling of dangerous weapon, explosives or fire, the actor is liable for whichever one of those crimes is committed.
(4) A person is privileged to defend a 3rd person from real or apparent unlawful interference by another under the same conditions and by the same means as those under and by which the person is privileged to defend himself or herself from real or apparent unlawful interference, provided that the person reasonably believes that the facts are such that the 3rd person would be privileged to act in self-defense and that the person's intervention is necessary for the protection of the 3rd person.
(5) A person is privileged to use force against another if the person reasonably believes that to use such force is necessary to prevent such person from committing suicide, but this privilege does not extend to the intentional use of force intended or likely to cause death.
(6) In this section “unlawful" means either tortious or expressly prohibited by criminal law or both.
History: 1987 a. 399; 1993 a. 486; 2005 a. 253; 2011 a. 94.
Antitrust hawks offer states a toolbox for regulating Big Tech
‘If we’re going to wait for Washington to solve this problem, we could be waiting a very long time,’ New York state senator says
The so-called techlash that has gripped Washington in recent years has yet to result in Congress sending new antitrust legislation to the president’s desk."
By Dean DeChiaro
Posted November 16, 2021 at 6:30am
Article excerpt -- opening sentences:
Antitrust hawks who favor tougher regulations on big technology companies are looking beyond the Beltway to aid state lawmakers who have similar aims — but fewer resources.
The D.C.-based American Economic Liberties Project — a nonpartisan organization that advocates for new antitrust laws to take on the power of companies like Apple, Amazon, Facebook and Google — last week released a toolkit that state officials could use to push policies similar to those that have been proposed, but not yet passed, at the federal level.
See https://www.rollcall.com/2021/11/16/antitrust-hawks-offer-states-a-toolbox-for-regulating-big-tech/
‘If we’re going to wait for Washington to solve this problem, we could be waiting a very long time,’ New York state senator says
The so-called techlash that has gripped Washington in recent years has yet to result in Congress sending new antitrust legislation to the president’s desk."
By Dean DeChiaro
Posted November 16, 2021 at 6:30am
Article excerpt -- opening sentences:
Antitrust hawks who favor tougher regulations on big technology companies are looking beyond the Beltway to aid state lawmakers who have similar aims — but fewer resources.
The D.C.-based American Economic Liberties Project — a nonpartisan organization that advocates for new antitrust laws to take on the power of companies like Apple, Amazon, Facebook and Google — last week released a toolkit that state officials could use to push policies similar to those that have been proposed, but not yet passed, at the federal level.
See https://www.rollcall.com/2021/11/16/antitrust-hawks-offer-states-a-toolbox-for-regulating-big-tech/
Prosecutors’ Focus On Labor Market Collusion Sharpens the Need for Compliance Training
By Robert E. Connolly (Law Office of Robert Connolly) on Nov 15, 2021 06:05 pm
See https://kluwerlaw.us6.list-manage.com/track/click?u=752026a04d2007135a2ab4662&id=42eb7820b5&e=84837a780d
Excerpt -- opening sentences:
In an October 16, 2016 FTC/DOJ press release: FTC and DOJ Release Guidance for Human Resource Professionals on How Antitrust Law Applies to Employee Hiring and Compensation the Antitrust Division first announced: “Going forward, the Justice Department intends to criminally investigate naked no-poaching or wage-fixing agreements that are unrelated or unnecessary to a larger legitimate collaboration between the employers.” The Antitrust Division has since made good on that promise with several criminal cases, some involving individuals as defendants, currently in the courts. See, United States v. Jindal, No. 4:20-cr-00358 (E.D. Tex. Dec. 9, 2020); United States v. Surgical Care Affiliates, LLC, No: 3-21-CR0011-L (N.D. Tex. Jan. 5, 2021); United States v. Hee et al., No. 2:21-cr-00098-RFB-BNW (D. Nev. Mar. 30, 2021); United States v. DaVita, Inc., No. 21-cr-00229-RBJ (D. Colo. July 14, 2021).
The focus on labor market collusion is not a passing interest of the Antitrust Division.
On guardianship reform
The highly publicized Britney Spears tangle with guardianship raised issues of reform concerning unduly restrictive guardianship practices.
During the week of May 10, 2021, the National Guardianship Network, and other affiliated groups, brought together advocates who discussed the current state of the nation’s adult guardianship system and developed recommendations for reform and improvement around the theme of maximizing autonomy and ensuring accountability. Following is an excerpt:
States and courts must ensure that all judicial proceedings which may impact any of an adult’s rights to legal capacity provide meaningful due process, which includes:
• Right to a qualified and compensated lawyer, paid a reasonable fee through the use of public funds if the adult is unable to pay, and appointed by the court should the adult not have a lawyer of their own choosing.
• Reasonable notice provided in the adult's preferred language in an understandable and accessible format, served in a manner that ensures timely receipt.
• An impartial, valid, and reliable assessment by a compensated and qualified person conducting a capacity assessment who has knowledge and training about decision-making in the area(s) related to the proceedings, inclusive of the adult’s preferred reasonable accommodations and method of communication. Recommendations of the Fourth National Guardianship Summit 3
• Protection of the adult’s right to participate in the proceeding consistent with their preferences, including preferred communication accommodations, after the right to appear and the purpose of the proceeding have been explained to the adult through the means the adult understands. Recommendation 1.3: States and courts must ensure full access to a full or partial restoration of rights as soon as possible after a right is legally restricted. The process to restore rights includes:
• A clearly defined statute, regulation, court rule or policy which sets forth the procedures and the evidentiary burden and timelines.
• Representation of the adult whose rights were legally restricted by a qualified and compensated lawyer, paid a reasonable fee through the use of public funds if the adult is unable to pay, and appointed by the court should the adult not have a lawyer of their own choosing. • A process triggered by informal or formal means.
• Notice to the adult whose rights have been legally restricted of the opportunity to restore their rights, annually and upon a change in the applicable law, regulation, rule or policy.
• A meaningful periodic review by a court or other appropriate entity, inclusive of the perspective of the adult whose rights were restricted, of whether it is necessary to continue to restrict the adult’s rights.
• A guardian trained on the rights restoration process and the guardian’s obligations in regards to the restoration of rights, the training to occur initially upon appointment and upon a change in the applicable law, regulation, rule or policy.
• Courts and lawyers trained on the rights restoration process.
• A prohibition on guardian interference with the restoration of rights, and as appropriate guardian facilitation of the restoration of rights. Any party seeking to restore any right or rights of an adult whose rights have been legally restricted need only demonstrate the right to restoration by a preponderance of the evidence.
Fourth_National_Guardianship_Summit_-_Adopted_Recommendations_(May_2021).pdf (syr.edu) http://law.syr.edu/uploads/docs/academics/Fourth_National_Guardianship_Summit_-_Adopted_Recommendations_%28May_2021%29.pdf
Note: We will include additional discussion of guardianship issues in future postings. DAR
The highly publicized Britney Spears tangle with guardianship raised issues of reform concerning unduly restrictive guardianship practices.
During the week of May 10, 2021, the National Guardianship Network, and other affiliated groups, brought together advocates who discussed the current state of the nation’s adult guardianship system and developed recommendations for reform and improvement around the theme of maximizing autonomy and ensuring accountability. Following is an excerpt:
States and courts must ensure that all judicial proceedings which may impact any of an adult’s rights to legal capacity provide meaningful due process, which includes:
• Right to a qualified and compensated lawyer, paid a reasonable fee through the use of public funds if the adult is unable to pay, and appointed by the court should the adult not have a lawyer of their own choosing.
• Reasonable notice provided in the adult's preferred language in an understandable and accessible format, served in a manner that ensures timely receipt.
• An impartial, valid, and reliable assessment by a compensated and qualified person conducting a capacity assessment who has knowledge and training about decision-making in the area(s) related to the proceedings, inclusive of the adult’s preferred reasonable accommodations and method of communication. Recommendations of the Fourth National Guardianship Summit 3
• Protection of the adult’s right to participate in the proceeding consistent with their preferences, including preferred communication accommodations, after the right to appear and the purpose of the proceeding have been explained to the adult through the means the adult understands. Recommendation 1.3: States and courts must ensure full access to a full or partial restoration of rights as soon as possible after a right is legally restricted. The process to restore rights includes:
• A clearly defined statute, regulation, court rule or policy which sets forth the procedures and the evidentiary burden and timelines.
• Representation of the adult whose rights were legally restricted by a qualified and compensated lawyer, paid a reasonable fee through the use of public funds if the adult is unable to pay, and appointed by the court should the adult not have a lawyer of their own choosing. • A process triggered by informal or formal means.
• Notice to the adult whose rights have been legally restricted of the opportunity to restore their rights, annually and upon a change in the applicable law, regulation, rule or policy.
• A meaningful periodic review by a court or other appropriate entity, inclusive of the perspective of the adult whose rights were restricted, of whether it is necessary to continue to restrict the adult’s rights.
• A guardian trained on the rights restoration process and the guardian’s obligations in regards to the restoration of rights, the training to occur initially upon appointment and upon a change in the applicable law, regulation, rule or policy.
• Courts and lawyers trained on the rights restoration process.
• A prohibition on guardian interference with the restoration of rights, and as appropriate guardian facilitation of the restoration of rights. Any party seeking to restore any right or rights of an adult whose rights have been legally restricted need only demonstrate the right to restoration by a preponderance of the evidence.
Fourth_National_Guardianship_Summit_-_Adopted_Recommendations_(May_2021).pdf (syr.edu) http://law.syr.edu/uploads/docs/academics/Fourth_National_Guardianship_Summit_-_Adopted_Recommendations_%28May_2021%29.pdf
Note: We will include additional discussion of guardianship issues in future postings. DAR
To what extent will the US Supreme Court rely on 1300s British law to decide 2022 NY gun carry rights?
The U.S. Supreme Court is examining a question left unanswered since the its 2008 Heller decision: To what extent do Americans have a constitutional right to carry loaded, concealed firearms outside the home and in public places? That question is part of the New York State Rifle & Pistol Association Inc. v. Bruen case, currently before the Court. The case was argued before the Court on November 3.
An article in the Washington Post explains how it is that 14th Century English law may have a role in the U.S. Supreme Court’s decision.
“At times, the dueling sides examine in their briefs the same founding-era statutes, court rulings and even 14th-century English law. Both quote the Statute of Northampton — the ancient law that prohibited people from traveling armed “by night nor by day” and in places where people were likely to gather such as “fairs” and “markets.”https://www.washingtonpost.com/politics/courts_law/supreme-court-ny-gun-law/2021/10/28/f21a5fc2-31cf-11ec-a1e5-07223c50280a_story.html
An acquaintance who is not a lawyer told me he is puzzled that 14th through 18th century firearms laws are relevant to a U.S. Supreme Court decision, when current gun carrying issues involve use of modern weapons in modern urban areas, and civilian misuse of modern military style assault rifles. The fact is that the handgun was invented in about 1500. In the 1300s firearms in England did not go beyond something referred to as a hand held cannon. It was a metal tube in which gunpowder and a small cannon ball was inserted. Guns and rifles used in the 1700s were quite different from those used today. See https://about-history.com/history-of-the-firearm-and-how-it-changed-warfare/#:~:text=The%20firearm%20was%20introduced%20to%20the%20Arabs%20in,almost%20perfect%2C%20this%20made%20it%20far%20more%20deadly.
Along the same line, the conditions in England’s cities in the 1300s were likely much different than in urban centers in New York and elsewhere in the modern word. Not to mention that militias of the time were different than now.
People who have the benefit of law school training understand that for Supreme Court Justices it can be important to analyse the mindset of the drafters of the Second Amendment of the Constitution, and that what had gone in England in the 1300s through the 1700s was likely part of that mindset.
Here’s how one scholar put it, who reads history as on the side of limiting the right to bear arms:
“As the Supreme Court considers the issue of the public carrying of arms in the New York State Rifle & Pistol Association Inc. v. Bruen, the court should look no further than the [1328] Statute of Northampton, its interpretation by Coke and de Bracton, and the Statute’s enforcement.[footnote omitted] In so doing, the court should find that the 1689 English Bill of Rights did not guarantee the absolute right to bear arms, and governmental authorities and bodies were within their right by means of the Statute of Northampton and later legislation to restrict and prosecute the carrying of arms in public by private citizens.
https://firearmslaw.duke.edu/2021/09/observations-regarding-the-interpretation-and-legacy-of-the-statute-of-northampton-in-anglo-american-legal-history/
For people who have not had the benefit of law school training, and some that have, it may be comforting to know that there has been lively discussion about how judges should decide Constitutional cases, and how questions of current social and political policy may be brought to bear. One focus of such discussion is the well-know Brown v. Board of Education desegregation case of the 1950’s. It may seem obvious to some that the Equal Protection clause of the US Constitution applies to Blacks as well as whites. But on the issue of desegregation it seems clear that for the framers of the Constitution the very separate and unequal treatment of Black people was OK.
Relatively few people would argue today that the Brown v. Board of Education desegregation case was wrongly decided. The question that continues to be argued is the explanation of how the Court brought to bear current social and political points of fundamental fairness to Black people, despite the procedural limitations of legal precedent suggesting that separation of Blacks was OK. . One scholar concludes that a purely procedural theory of justice and institutional legitimacy for courts is insufficient. See Untitled Document (harva https://cyber.harvard.edu/bridge/LegalProcess/essay3.txt.htm rd.edu)
Another scholarly observer suggests that when famous “originalist” jurist Antonin Scalia said that “I am an originalist, not a nut,” the inference may be drawn that Scalia “would surely accept Brown v. Board of Education for that reason.” See http://carneades.pomona.edu/2020-Law/11.Scalia.html The thought is that no level of deference to the mindset of the drafters of the Constitution and to legal precedent supporting racial separation can justify judicial decisions that are “nuts” in terms of current political and social realities. One can hope.
The U.S. Supreme Court is examining a question left unanswered since the its 2008 Heller decision: To what extent do Americans have a constitutional right to carry loaded, concealed firearms outside the home and in public places? That question is part of the New York State Rifle & Pistol Association Inc. v. Bruen case, currently before the Court. The case was argued before the Court on November 3.
An article in the Washington Post explains how it is that 14th Century English law may have a role in the U.S. Supreme Court’s decision.
“At times, the dueling sides examine in their briefs the same founding-era statutes, court rulings and even 14th-century English law. Both quote the Statute of Northampton — the ancient law that prohibited people from traveling armed “by night nor by day” and in places where people were likely to gather such as “fairs” and “markets.”https://www.washingtonpost.com/politics/courts_law/supreme-court-ny-gun-law/2021/10/28/f21a5fc2-31cf-11ec-a1e5-07223c50280a_story.html
An acquaintance who is not a lawyer told me he is puzzled that 14th through 18th century firearms laws are relevant to a U.S. Supreme Court decision, when current gun carrying issues involve use of modern weapons in modern urban areas, and civilian misuse of modern military style assault rifles. The fact is that the handgun was invented in about 1500. In the 1300s firearms in England did not go beyond something referred to as a hand held cannon. It was a metal tube in which gunpowder and a small cannon ball was inserted. Guns and rifles used in the 1700s were quite different from those used today. See https://about-history.com/history-of-the-firearm-and-how-it-changed-warfare/#:~:text=The%20firearm%20was%20introduced%20to%20the%20Arabs%20in,almost%20perfect%2C%20this%20made%20it%20far%20more%20deadly.
Along the same line, the conditions in England’s cities in the 1300s were likely much different than in urban centers in New York and elsewhere in the modern word. Not to mention that militias of the time were different than now.
People who have the benefit of law school training understand that for Supreme Court Justices it can be important to analyse the mindset of the drafters of the Second Amendment of the Constitution, and that what had gone in England in the 1300s through the 1700s was likely part of that mindset.
Here’s how one scholar put it, who reads history as on the side of limiting the right to bear arms:
“As the Supreme Court considers the issue of the public carrying of arms in the New York State Rifle & Pistol Association Inc. v. Bruen, the court should look no further than the [1328] Statute of Northampton, its interpretation by Coke and de Bracton, and the Statute’s enforcement.[footnote omitted] In so doing, the court should find that the 1689 English Bill of Rights did not guarantee the absolute right to bear arms, and governmental authorities and bodies were within their right by means of the Statute of Northampton and later legislation to restrict and prosecute the carrying of arms in public by private citizens.
https://firearmslaw.duke.edu/2021/09/observations-regarding-the-interpretation-and-legacy-of-the-statute-of-northampton-in-anglo-american-legal-history/
For people who have not had the benefit of law school training, and some that have, it may be comforting to know that there has been lively discussion about how judges should decide Constitutional cases, and how questions of current social and political policy may be brought to bear. One focus of such discussion is the well-know Brown v. Board of Education desegregation case of the 1950’s. It may seem obvious to some that the Equal Protection clause of the US Constitution applies to Blacks as well as whites. But on the issue of desegregation it seems clear that for the framers of the Constitution the very separate and unequal treatment of Black people was OK.
Relatively few people would argue today that the Brown v. Board of Education desegregation case was wrongly decided. The question that continues to be argued is the explanation of how the Court brought to bear current social and political points of fundamental fairness to Black people, despite the procedural limitations of legal precedent suggesting that separation of Blacks was OK. . One scholar concludes that a purely procedural theory of justice and institutional legitimacy for courts is insufficient. See Untitled Document (harva https://cyber.harvard.edu/bridge/LegalProcess/essay3.txt.htm rd.edu)
Another scholarly observer suggests that when famous “originalist” jurist Antonin Scalia said that “I am an originalist, not a nut,” the inference may be drawn that Scalia “would surely accept Brown v. Board of Education for that reason.” See http://carneades.pomona.edu/2020-Law/11.Scalia.html The thought is that no level of deference to the mindset of the drafters of the Constitution and to legal precedent supporting racial separation can justify judicial decisions that are “nuts” in terms of current political and social realities. One can hope.
Nocera on Steve Donziger v. Chevron:
An Environmental Hero or Outlaw? Can It Be Both?
An Environmental Hero or Outlaw? Can It Be Both? - The New York Times (nytimes.com) https://www.nytimes.com/2021/11/06/business/dealbook/steven-donziger.html
Nocera offers an interesting opinion piece about Steve Donziger, the lawyer who spent decades suing first Texaco and then Chevron (after Chevron bought Texaco in 2001) for damaging the environment and despoiling the Amazon rainforest in Ecuador, harming the tribespeople who lived there.
Here is a quick summary of the Nocera opinion piece – which I recommend reading in full – ending with a full presentation of Nocera’s concluding observations:
In 2011, an Ecuadorean court ruled in favor of Mr. Donziger’s clients, and awarded them $18 billion (later reduced to $9.5 billion).
But Chevron brought a RICO case against Donziger in the United States, claiming wrongdoing in the prosecution of the Equador case. And in 2014, Judge Lewis A. Kaplan, of the United States District Court in Manhattan, ruled in Chevron’s favor. He wrote that Mr. Donziger had foisted “fraudulent evidence on an Ecuadorean court,” and accused Mr. Donziger and “his co-conspirators” of attempting to use the court to extort money from Chevron. Therefore, he said, Chevron did not have to pay the $9.5 billion. Courts in other countries where Chevron does business came to the same conclusion. Mr. Donziger has always denied the bribery allegation, or that he did anything wrong in handling the case.
In 2018, after Judge Kaplan’s judgment had finally been affirmed, the company brought another case against Mr. Donziger. Among other things, it wanted him to turn over his computer and other electronic devices. Judge Kaplan agreed. But Mr. Donziger refused to comply, saying it would give the oil company “backdoor access to confidential attorney-client communications.”
In 2019, the judge took the extraordinary measure of bringing in a private law firm to prosecute Mr. Donziger for criminal contempt of court. This case was presided over by another district court judge, Loretta A. Preska, who quickly ordered that Donziger be placed under house arrest and wear an electronic ankle monitor. After a short trial earlier this year, she found Mr. Donziger guilty, and sentenced him to the six months he is now serving. He was also disbarred.
[Here is the concluding part of the Nocera article in full:]
Along the way, something surprising has happened: Outside the courtroom, it was as if the ghostwritten report and the alleged bribe of the Ecuadorean judge had never happened. Mr. Donziger’s victory in Ecuador was praised as legitimate, and he was widely viewed by progressives as an environmental hero. Sting, the musician, helped raise money for his defense. Greta Thunberg offered her support. Representative Alexandria Ocasio-Cortez and several of her Democratic colleagues sent a letter to Attorney General Merrick Garland, asking him to review the case. The Harvard Law professor Charles Nesson rallied to his cause. Campaigns have been started to #FREEDONZIGER. A group of experts from the United Nations said in a report that his pretrial detention was “arbitrary” and therefore illegal. And on, and on. To them, this was a classic example of a fossil fuel company using its might to punish someone brave enough to stand up to it.
This phenomenon of seeing controversial figures as black or white — saint or sinner, hero or villain — is one of the plagues of our polarized age. It has become nearly impossible for people to acknowledge that sometimes their heroes can do something wrong, and their foes can get something right. Donald Trump is the most obvious example of this, but you see it all the time in politics, and in business as well. Are C.E.O.s rapacious greed-heads, or are they stewards of capitalism? Are oil companies supplying the fuel that the world needs to function, or are they “outlaws,” as the environmental activist Bill McKibben calls them? Too many people are unwilling to hold both ideas in their heads at once.
This failing is especially glaring in the Donziger case. If he had played by the rules in litigating the case in Ecuador, he might have come away with a judgment that a U.S. court would have upheld. Chevron would have had to pay billions to his impoverished clients. To put it another way, by using the tactics he did, Mr. Donziger did his clients an enormous disservice. That his allies refuse to see this suggests their hatred of Big Oil has blinded them to some of Mr. Donziger’s inconvenient actions.
But then there is Chevron. Companies are supposed to make rational risk and reward calculations. The company’s push to prevent the Ecuadorean judgment from going into effect was rational, and showing that Mr. Donziger had violated the rules was an appropriate way to do that. But punishing Mr. Donziger beyond that may ultimately have been a mistake. He has been turned into an environmental martyr, which is the last thing Chevron should want. He’s no longer the lawyer who broke the rules to win a case. Instead, he’s the lawyer who stood up to Big Oil.
As machination piled upon machination, and as the case became solely about Mr. Donziger, one party has been largely forgotten: the Ecuadorean tribespeople he once represented. Thirty years later, for all the money that has been spent on litigation, their circumstance is unchanged.
Consumer Report on Maserati Levante, Senator Joe Manchin's vehicle of choice
Derived from the Ghibli and Quattroporte sedans, most versions of the Levante come with a 345-hp or 424-hp turbo V6. Each is mated to an quick-and-smooth eight-speed automatic. The Maserati Levante has a combined gas mileage ranging from 16.0 miles per gallon to 19.0 miles per gallon depending on the trim and model year. A model with better mileage or an electric version that does not use fossil fuels seems improbable.
The Trofeo version uses a turbocharged V8. The Levante delivers a powerful sound from the Ferrari-developed engine, with nimble, athletic handling and, courtesy of the standard air suspension, a steady ride. Interior features include a version of Chrysler's Uconnect system with an 8.4-inch touch screen and a stunning cabin that's wrapped in leather, suede, and wood, with comfortable seats and detailed stitching. But the gear selector and other controls are not intuitive to use. BSW is standard, and FCW and AEB are optional.
The Maserati is the vehicle referred to by singer Joe Walsh in "Life's Been Good -- Records on the Wall." Joe Walsh - Life Been Good at VetsAid 2018 (Tacoma) - Bing video https://www.bing.com/videos/search?q=joe+walsh+records+on+the+wall&docid=608027675465578300&mid=D16A312DB2A6158ACE4ED16A312DB2A6158ACE4E&view=detail&FORM=VIRE Walsh says that his Maserati goes 185 mph.
Recent news reports involving climate change protesters and Senator Joe Manshin of West Virginia show Manshin proudly driving a Maserati Levante. There does not appear to be a Maserati dealer in West Virginia, perhaps because of lack of local demand in West Virginia for Maseratis. For the
2021 Maserati Levante BASE MSRP RANGE is $74,490 - $149,990, Destination Charge: $1495. There is a Maserati dealer near Pittsburgh, and Senator Manshin could have purchased his Maserati at that location.
Owning a Maserati suggests that for rock star Joe Walsh and Senator Joe Manshin life has been, as Joe Walsh put it, good so far.
For further consumer information on the Maserati, see https://www.consumerreports.org/cars/maserati/levante/2021/overview
Posting by Don Resnikoff
Derived from the Ghibli and Quattroporte sedans, most versions of the Levante come with a 345-hp or 424-hp turbo V6. Each is mated to an quick-and-smooth eight-speed automatic. The Maserati Levante has a combined gas mileage ranging from 16.0 miles per gallon to 19.0 miles per gallon depending on the trim and model year. A model with better mileage or an electric version that does not use fossil fuels seems improbable.
The Trofeo version uses a turbocharged V8. The Levante delivers a powerful sound from the Ferrari-developed engine, with nimble, athletic handling and, courtesy of the standard air suspension, a steady ride. Interior features include a version of Chrysler's Uconnect system with an 8.4-inch touch screen and a stunning cabin that's wrapped in leather, suede, and wood, with comfortable seats and detailed stitching. But the gear selector and other controls are not intuitive to use. BSW is standard, and FCW and AEB are optional.
The Maserati is the vehicle referred to by singer Joe Walsh in "Life's Been Good -- Records on the Wall." Joe Walsh - Life Been Good at VetsAid 2018 (Tacoma) - Bing video https://www.bing.com/videos/search?q=joe+walsh+records+on+the+wall&docid=608027675465578300&mid=D16A312DB2A6158ACE4ED16A312DB2A6158ACE4E&view=detail&FORM=VIRE Walsh says that his Maserati goes 185 mph.
Recent news reports involving climate change protesters and Senator Joe Manshin of West Virginia show Manshin proudly driving a Maserati Levante. There does not appear to be a Maserati dealer in West Virginia, perhaps because of lack of local demand in West Virginia for Maseratis. For the
2021 Maserati Levante BASE MSRP RANGE is $74,490 - $149,990, Destination Charge: $1495. There is a Maserati dealer near Pittsburgh, and Senator Manshin could have purchased his Maserati at that location.
Owning a Maserati suggests that for rock star Joe Walsh and Senator Joe Manshin life has been, as Joe Walsh put it, good so far.
For further consumer information on the Maserati, see https://www.consumerreports.org/cars/maserati/levante/2021/overview
Posting by Don Resnikoff
In Scalia's shadow: U.S. Supreme Court -- Second Amendment Case heard 11-3-2021
The transcript of the 11-3 hearing is here:
https://www.supremecourt.gov/oral_arguments/argument_transcripts/2021/20-843_i4dk.pdf
DC Bar Podcast on race and the Second Amendment:
DC Bar's "Brief Encounters" has a new episode. You can listen to the episode HERE<https://anchor.fm/dcbar/episodes/Race-and-the-Second-Amendment-e19gh5k>.
Race and the Second Amendment
Don Resnikoff, Esq. and Anthony Picadio, Esq. take a look at the Second Amendment and its roots. Why did the drafters connect the right to bear arms to service in a militia; and how has the U.S. Supreme Court interpreted the drafters' language.
The transcript of the 11-3 hearing is here:
https://www.supremecourt.gov/oral_arguments/argument_transcripts/2021/20-843_i4dk.pdf
DC Bar Podcast on race and the Second Amendment:
DC Bar's "Brief Encounters" has a new episode. You can listen to the episode HERE<https://anchor.fm/dcbar/episodes/Race-and-the-Second-Amendment-e19gh5k>.
Race and the Second Amendment
Don Resnikoff, Esq. and Anthony Picadio, Esq. take a look at the Second Amendment and its roots. Why did the drafters connect the right to bear arms to service in a militia; and how has the U.S. Supreme Court interpreted the drafters' language.
The USDOJ press release on its suit to block Peguin Random House's acquisition of Simon and Shuster
by DAR: The press release, which is excerpted below, can be found at https://www.justice.gov/opa/pr/justice-department-sues-block-penguin-random-house-s-acquisition-rival-publisher-simon
The press release, like the Complaint it describes, is interesting for focusing on the power of the large companies over authors. It is a case that includes allegations of "monopsony," power over those who supply product.
We previously included a Don Resnikoff review of Chris Sagers' book on the Apple litigation. The Sagers book contains
a detailed and interesting description of the publishing industry and relevant antitrust law.
The USDOJ excerpt:
Justice Department Sues to Block Penguin Random House’s Acquisition of Rival Publisher Simon & Schuster
Merger Would Create Publishing Behemoth, Harming Authors and Consumers
The U.S. Department of Justice filed a civil antitrust lawsuit today to block Penguin Random House’s proposed acquisition of its close competitor, Simon & Schuster. As alleged in the complaint filed in the U.S. District Court for the District of Columbia, this acquisition would enable Penguin Random House, which is already the largest book publisher in the world, to exert outsized influence over which books are published in the United States and how much authors are paid for their work.
“The complaint filed today to ensure fair competition in the U.S. publishing industry is the latest demonstration of the Justice Department’s commitment to pursuing economic opportunity and fairness through antitrust enforcement,” said Attorney General Merrick B. Garland.
“Books have shaped American public life throughout our nation’s history, and authors are the lifeblood of book publishing in America. But just five publishers control the U.S. publishing industry,” the Attorney General continued. “If the world’s largest book publisher is permitted to acquire one of its biggest rivals, it will have unprecedented control over this important industry. American authors and consumers will pay the price of this anticompetitive merger – lower advances for authors and ultimately fewer books and less variety for consumers.”
“In stopping Penguin Random House from extending its control of the U.S. publishing market, this lawsuit will prevent further consolidation in an industry that has a history of collusion,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “I want to thank the Attorney General and senior leadership of the department for their support of antitrust enforcement.”
As described in the complaint, publishers compete to acquire manuscripts, which they edit, package, market, distribute and sell as books. Publishers pay authors advances for the rights to publish their books. In most cases, the advance represents an author’s total compensation for their work.
The publishing industry is already highly concentrated, as the complaint details. Just five publishers, known as the “Big Five,” are regularly able to offer high advances and extensive marketing and editorial support, making them the best option for authors who want to publish a top-selling book. Most authors aspire to write the next bestseller and selling their rights to the Big Five offers the best chance to do so.
While smaller publishers occasionally win the publishing rights to anticipated top-selling books, they lack the financial resources to regularly pay the high advances required and absorb the financial losses if a book does not meet sales expectations. Today, Penguin Random House, the world’s largest publisher, and Simon & Schuster, the fourth largest in the United States, compete head-to-head to acquire manuscripts by offering higher advances, better services and more favorable contract terms to authors. However, as the complaint alleges, the proposed merger would eliminate this important competition, resulting in lower advances for authors and ultimately fewer books and less variety for consumers.
The complaint alleges that the acquisition of Simon & Schuster for $2.175 billion would put Penguin Random House in control of close to half the market for acquiring publishing rights to anticipated top-selling books, leaving hundreds of individual authors with fewer options and less leverage. According to its own documents as described in the complaint, Penguin Random House views the U.S. publishing market as an “oligopoly” and its acquisition of Simon & Schuster is intended to “cement” its position as the dominant publisher in the United States.
Courts have long recognized that the antitrust laws are designed to protect both buyers and sellers of products and services, including, as relevant here, authors who rely on competition between the major publishers to ensure they are fairly compensated for their work. As the complaint makes clear, this merger will cause harm to American workers, in this case authors, through consolidation among buyers – a fact pattern referred to as “monopsony.”
The Antitrust Division’s Horizontal Merger Guidelines lay out a straightforward framework to analyze monopsony cases, and under those guidelines this transaction is presumptively anticompetitive. Simply put, if Penguin Random House acquires Simon & Schuster, the two publishers will stop competing against each other. As a result, authors will be paid less for their work. Authors who are paid less write less, which, in turn, means that the quantity and variety of books diminishes too.
by DAR: The press release, which is excerpted below, can be found at https://www.justice.gov/opa/pr/justice-department-sues-block-penguin-random-house-s-acquisition-rival-publisher-simon
The press release, like the Complaint it describes, is interesting for focusing on the power of the large companies over authors. It is a case that includes allegations of "monopsony," power over those who supply product.
We previously included a Don Resnikoff review of Chris Sagers' book on the Apple litigation. The Sagers book contains
a detailed and interesting description of the publishing industry and relevant antitrust law.
The USDOJ excerpt:
Justice Department Sues to Block Penguin Random House’s Acquisition of Rival Publisher Simon & Schuster
Merger Would Create Publishing Behemoth, Harming Authors and Consumers
The U.S. Department of Justice filed a civil antitrust lawsuit today to block Penguin Random House’s proposed acquisition of its close competitor, Simon & Schuster. As alleged in the complaint filed in the U.S. District Court for the District of Columbia, this acquisition would enable Penguin Random House, which is already the largest book publisher in the world, to exert outsized influence over which books are published in the United States and how much authors are paid for their work.
“The complaint filed today to ensure fair competition in the U.S. publishing industry is the latest demonstration of the Justice Department’s commitment to pursuing economic opportunity and fairness through antitrust enforcement,” said Attorney General Merrick B. Garland.
“Books have shaped American public life throughout our nation’s history, and authors are the lifeblood of book publishing in America. But just five publishers control the U.S. publishing industry,” the Attorney General continued. “If the world’s largest book publisher is permitted to acquire one of its biggest rivals, it will have unprecedented control over this important industry. American authors and consumers will pay the price of this anticompetitive merger – lower advances for authors and ultimately fewer books and less variety for consumers.”
“In stopping Penguin Random House from extending its control of the U.S. publishing market, this lawsuit will prevent further consolidation in an industry that has a history of collusion,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “I want to thank the Attorney General and senior leadership of the department for their support of antitrust enforcement.”
As described in the complaint, publishers compete to acquire manuscripts, which they edit, package, market, distribute and sell as books. Publishers pay authors advances for the rights to publish their books. In most cases, the advance represents an author’s total compensation for their work.
The publishing industry is already highly concentrated, as the complaint details. Just five publishers, known as the “Big Five,” are regularly able to offer high advances and extensive marketing and editorial support, making them the best option for authors who want to publish a top-selling book. Most authors aspire to write the next bestseller and selling their rights to the Big Five offers the best chance to do so.
While smaller publishers occasionally win the publishing rights to anticipated top-selling books, they lack the financial resources to regularly pay the high advances required and absorb the financial losses if a book does not meet sales expectations. Today, Penguin Random House, the world’s largest publisher, and Simon & Schuster, the fourth largest in the United States, compete head-to-head to acquire manuscripts by offering higher advances, better services and more favorable contract terms to authors. However, as the complaint alleges, the proposed merger would eliminate this important competition, resulting in lower advances for authors and ultimately fewer books and less variety for consumers.
The complaint alleges that the acquisition of Simon & Schuster for $2.175 billion would put Penguin Random House in control of close to half the market for acquiring publishing rights to anticipated top-selling books, leaving hundreds of individual authors with fewer options and less leverage. According to its own documents as described in the complaint, Penguin Random House views the U.S. publishing market as an “oligopoly” and its acquisition of Simon & Schuster is intended to “cement” its position as the dominant publisher in the United States.
Courts have long recognized that the antitrust laws are designed to protect both buyers and sellers of products and services, including, as relevant here, authors who rely on competition between the major publishers to ensure they are fairly compensated for their work. As the complaint makes clear, this merger will cause harm to American workers, in this case authors, through consolidation among buyers – a fact pattern referred to as “monopsony.”
The Antitrust Division’s Horizontal Merger Guidelines lay out a straightforward framework to analyze monopsony cases, and under those guidelines this transaction is presumptively anticompetitive. Simply put, if Penguin Random House acquires Simon & Schuster, the two publishers will stop competing against each other. As a result, authors will be paid less for their work. Authors who are paid less write less, which, in turn, means that the quantity and variety of books diminishes too.
Book review of The Second: Race and Guns in a Fatally Unequal America, by Carol Anderson
The Don Allen Resnikoff discussion of the Carol Anderson book on the Second Amendment is here:
Washington Lawyer - November/December 2021 https://washingtonlawyer.dcbar.org/novemberdecember2021/index.php#/p/42
Anderson believes the root of many incidents of misconduct toward Black people with guns lies in the design of the Second Amendment to the U.S. Constitution. She writes: “[W]hat we get in the Second Amendment is . . . about a militia that is designed to curtail Black people’s rights to life, liberty and the pursuit of happiness. So sitting in the Bill of Rights is the right to curtail Black people’s rights. . . .”
As determined by the U.S. Supreme Court, the law on gun rights has to a significant extent turned against Anderson’s point about racial motivation. The leading opinion, District of Columbia v. Heller (2008), rejects the idea that the Second Amendment was adopted to protect a white militia and to curtail Black rights.
The Resnikoff book review in the DC Bar's Washington Lawyer refers to scholarly articles by Anthony Picadio. Mr. Picadio is featured in a DC Bar podcast on the Second Amendment that will be available shortly.
For the full discussion of the Anderson book, follow the link above.
The Don Allen Resnikoff discussion of the Carol Anderson book on the Second Amendment is here:
Washington Lawyer - November/December 2021 https://washingtonlawyer.dcbar.org/novemberdecember2021/index.php#/p/42
Anderson believes the root of many incidents of misconduct toward Black people with guns lies in the design of the Second Amendment to the U.S. Constitution. She writes: “[W]hat we get in the Second Amendment is . . . about a militia that is designed to curtail Black people’s rights to life, liberty and the pursuit of happiness. So sitting in the Bill of Rights is the right to curtail Black people’s rights. . . .”
As determined by the U.S. Supreme Court, the law on gun rights has to a significant extent turned against Anderson’s point about racial motivation. The leading opinion, District of Columbia v. Heller (2008), rejects the idea that the Second Amendment was adopted to protect a white militia and to curtail Black rights.
The Resnikoff book review in the DC Bar's Washington Lawyer refers to scholarly articles by Anthony Picadio. Mr. Picadio is featured in a DC Bar podcast on the Second Amendment that will be available shortly.
For the full discussion of the Anderson book, follow the link above.
DC AG Racine's newsletter on the DC suit against Mark Zuckerberg
Suing Mark Zuckerberg and Holding CEOs Accountable
In October, I added Facebook CEO Mark Zuckerberg to a lawsuit I filed in 2018 suing Facebook. [https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMDAsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMTExMDEuNDgyMDI1MTEiLCJ1cmwiOiJodHRwczovL29hZy5kYy5nb3YvcmVsZWFzZS9hZy1yYWNpbmUtc3Vlcy1mYWNlYm9vay1mYWlsaW5nLXByb3RlY3QtbWlsbGlvbnMifQ.n95Qq3GwemLwClIWBisjVbBuhiBx8eEu0ntW5N8koxU/s/1016768181/br/115936435047-l]
Our lawsuit goes after Facebook for deceiving its consumers about the steps Facebook would take to protect user data. These failures to put in place safeguards promised to consumers impacted tens of millions of users nationally and nearly half of all District residents – including by allowing Cambridge Analytica, a private company, to acquire and use that data to influence voters and manipulate the 2016 election. The Cambridge Analytica scandal is still the largest consumer privacy scandal in the nation’s history.
We did our due diligence over the past two years before taking this step of adding Mark Zuckerberg to our lawsuit. Since we originally filed the lawsuit in December 2018, my office has reviewed hundreds of thousands of pages of documents that have been produced in the litigation.
We have conducted a wide range of depositions, from Facebook’s directors to former employees and whistleblowers. We have also reviewed documents produced in other cases, as well as many hours of public statements by Mr. Zuckerberg, including his sworn testimony before the U.S. Senate and other law enforcement agencies.
The evidence we gathered is clear: Mark Zuckerberg knowingly and actively participated in the decisions that led to Cambridge Analytica’s mass collection of Facebook user data. On top of this, he also made misrepresentations to users, the public, and government officials about how secure the data on Facebook was and about Facebook’s role.
Under these circumstances, adding Mark Zuckerberg to our lawsuit is warranted, and sends a strong message that corporate leaders, including CEOs, will be held accountable for their actions.
To learn more about the case, read this New York Times article. [https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMDEsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMTExMDEuNDgyMDI1MTEiLCJ1cmwiOiJodHRwczovL3d3dy5ueXRpbWVzLmNvbS8yMDIxLzEwLzIwL3RlY2hub2xvZ3kvbWFyay16dWNrZXJiZXJnLWZhY2Vib29rLWxhd3N1aXQuaHRtbCJ9.K6B_6--nmCK0KmBNK_I2IC9BPvBTtxRU44KxoEh2hiA/s/1016768181/br/115936435047-l]
To learn more about the significance of the case, watch my interview on CNN’s OutFront and listen to my interview with NPR’s Morning Edition.
/s/ Karl A. Racine
Attorney General
Suing Mark Zuckerberg and Holding CEOs Accountable
In October, I added Facebook CEO Mark Zuckerberg to a lawsuit I filed in 2018 suing Facebook. [https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMDAsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMTExMDEuNDgyMDI1MTEiLCJ1cmwiOiJodHRwczovL29hZy5kYy5nb3YvcmVsZWFzZS9hZy1yYWNpbmUtc3Vlcy1mYWNlYm9vay1mYWlsaW5nLXByb3RlY3QtbWlsbGlvbnMifQ.n95Qq3GwemLwClIWBisjVbBuhiBx8eEu0ntW5N8koxU/s/1016768181/br/115936435047-l]
Our lawsuit goes after Facebook for deceiving its consumers about the steps Facebook would take to protect user data. These failures to put in place safeguards promised to consumers impacted tens of millions of users nationally and nearly half of all District residents – including by allowing Cambridge Analytica, a private company, to acquire and use that data to influence voters and manipulate the 2016 election. The Cambridge Analytica scandal is still the largest consumer privacy scandal in the nation’s history.
We did our due diligence over the past two years before taking this step of adding Mark Zuckerberg to our lawsuit. Since we originally filed the lawsuit in December 2018, my office has reviewed hundreds of thousands of pages of documents that have been produced in the litigation.
We have conducted a wide range of depositions, from Facebook’s directors to former employees and whistleblowers. We have also reviewed documents produced in other cases, as well as many hours of public statements by Mr. Zuckerberg, including his sworn testimony before the U.S. Senate and other law enforcement agencies.
The evidence we gathered is clear: Mark Zuckerberg knowingly and actively participated in the decisions that led to Cambridge Analytica’s mass collection of Facebook user data. On top of this, he also made misrepresentations to users, the public, and government officials about how secure the data on Facebook was and about Facebook’s role.
Under these circumstances, adding Mark Zuckerberg to our lawsuit is warranted, and sends a strong message that corporate leaders, including CEOs, will be held accountable for their actions.
To learn more about the case, read this New York Times article. [https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMDEsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMTExMDEuNDgyMDI1MTEiLCJ1cmwiOiJodHRwczovL3d3dy5ueXRpbWVzLmNvbS8yMDIxLzEwLzIwL3RlY2hub2xvZ3kvbWFyay16dWNrZXJiZXJnLWZhY2Vib29rLWxhd3N1aXQuaHRtbCJ9.K6B_6--nmCK0KmBNK_I2IC9BPvBTtxRU44KxoEh2hiA/s/1016768181/br/115936435047-l]
To learn more about the significance of the case, watch my interview on CNN’s OutFront and listen to my interview with NPR’s Morning Edition.
/s/ Karl A. Racine
Attorney General
YouTube power over media
An article by journalist Adam Satariano buried in the middle of the Saturday New York Times Business section tells the tale of how a British media outlet, Novaro Media, was arbitrarily deleted by YouTube. Novaro is a left-leaning media outlet, but right leaning news outlets have often complained of the same deletion fate. Satariano explains that Youtube's “rules are opaque and sometimes arbitrarily enforced — or mistakenly enforced, in Novara’s case.” YouTube has great market power that make it a particularly important platform for media outlets.
The article is titled How a Mistake by YouTube Shows Its Power Over Media It can be found at https://www.nytimes.com/2021/10/29/business/youtube-novara.html?smid=em-share
Key points include that YouTube can exercise its power and terminate publications arbitrarily. YouTube's accountability is sharply limited. Terminated media outlets have little recourse.
Satariano explains that after an outcry online, YouTube restored Novara’s channel in a few hours, saying that it had been removed in error. It helped Novara that there was a great on-line outcry, and that members of the British Parliament expressed concern.
But other independent journalists, activists and creators on YouTube often don’t have similar success, particularly in countries like Belarus, Russia and Turkey where YouTube is under pressure from authorities to remove opposition content and where the company does not have as much language or cultural expertise.
Satariano’s article mentions possible legislative remedies being considered in Great Britain, but commenters suggest that the proposed remedies are unlikely to protect media outlets like Novaro.
See How a Mistake by YouTube Shows Its Power Over Media - The New York Times (nytimes.com)
An article by journalist Adam Satariano buried in the middle of the Saturday New York Times Business section tells the tale of how a British media outlet, Novaro Media, was arbitrarily deleted by YouTube. Novaro is a left-leaning media outlet, but right leaning news outlets have often complained of the same deletion fate. Satariano explains that Youtube's “rules are opaque and sometimes arbitrarily enforced — or mistakenly enforced, in Novara’s case.” YouTube has great market power that make it a particularly important platform for media outlets.
The article is titled How a Mistake by YouTube Shows Its Power Over Media It can be found at https://www.nytimes.com/2021/10/29/business/youtube-novara.html?smid=em-share
Key points include that YouTube can exercise its power and terminate publications arbitrarily. YouTube's accountability is sharply limited. Terminated media outlets have little recourse.
Satariano explains that after an outcry online, YouTube restored Novara’s channel in a few hours, saying that it had been removed in error. It helped Novara that there was a great on-line outcry, and that members of the British Parliament expressed concern.
But other independent journalists, activists and creators on YouTube often don’t have similar success, particularly in countries like Belarus, Russia and Turkey where YouTube is under pressure from authorities to remove opposition content and where the company does not have as much language or cultural expertise.
Satariano’s article mentions possible legislative remedies being considered in Great Britain, but commenters suggest that the proposed remedies are unlikely to protect media outlets like Novaro.
See How a Mistake by YouTube Shows Its Power Over Media - The New York Times (nytimes.com)
Can Trust Busters Help Deter Union Busters?
From https://www.foodandpower.net/latest/dollar-general-union-busting-unfair-competition-10-21
As workers flex their power in strikes and walkouts across the country, more retail employees are trying to organize corners of the large, low-wage, anti-union sector.
This includes a union drive in Barkhamsted, Connecticut, at a Dollar General store, a rapidly expanding discount chain known for low wages and harsh working conditions. Dollar General has more than 157,000 employees, and in 2020 a store employee’s median annual income was $14,571. Meanwhile corporate profits increased 54% between 2019 and 2020 to $2.6 billion.
Shortly after Dollar General workers in Barkhamsted filed for a union election in late September, the corporation hired anti-union consultants for $2,700 per consultant per day and sent corporate managers to patrol the store. After weeks of one-on-one meetings with workers, anti-union presentations, alleged threats to close the store, and a specious termination of a union-sympathetic employee, the union election looks likely to fail. Last Friday, two workers voted for unionizing, three voted against, and two ballots were contested. The National Labor Relations Board (NLRB) will make the final call.
In a statement sent via email, Dollar General said that “we disagree with the claim raised by our former Barkhamsted employee, as well as any allegation of retaliation or harassment” and that the company “believe[s] a union is not in our employees’ best interests.”
“It’s been the most aggressive anti-union campaign that I’ve seen,” says Jessica Petronella, director of organizing with UFCW Local 371. “They are worried about the bigger picture. They don’t want these workers at Barkhamsted to organize because … they don’t want workers in other stores to feel empowered.”
Petronella alleges that Dollar General violated several labor laws and plans to file unfair labor practice charges with the NLRB. But the agency’s weak fines generally do not deter illegal union busting by firms determined to block worker organizing. “It’s a cost of doing business,” says Nelson Lichtenstein, labor historian and professor emeritus at University of California, Santa Barbara.
Harsher penalties and stronger labor protections could change this business calculus, as could a new approach to competition policy. Labor advocates have long sought to prevent firms from competing in a race to the bottom on labor costs. Antitrust enforcement could embody this principle by establishing that labor law violations are an unfair way for corporations to corner markets.
Antitrust laws bar businesses from dominating industries through “unfair” or “anticompetitive” means. But there are few clear legal definitions of unfair or anticompetitive conduct. Congress gave the Federal Trade Commission (FTC) broad authority to define and prohibit so-called “unfair methods of competition,” but the agency has read this power narrowly and used it sparingly in recent decades. This could change – the FTC formed a new working group to explore fair competition rulemaking, and new chairwoman Lina Khan is committed to tapping unused authority.
Courts have held that businesses cannot acquire or maintain monopolies using fraud, deception, and other generally prohibited practices, according to research by Open Markets legal director Sandeep Vaheesan.
In the late 1970s, FTC Chairman Michael Pertschuk extended this interpretation and floated the idea of prosecuting companies that violated employment, environmental, labor, and other laws. By breaking these generally applicable laws, Pertschuk argued that firms used “unfair methods of competition” to obtain advantages over honest rivals that complied with the law. What Pertschuk suggested was not farfetched but rooted in Supreme Court interpretations of the FTC’s authority. In a 1972 decision, the Supreme Court stated the FTC can act as “a court of equity” and “consider[] public values beyond simply those enshrined in the letter or encompassed in the spirit of the antitrust laws.”
In the case of Dollar General, maintaining low labor costs is a central part of its competitive edge. But if Dollar General holds down wages and working conditions by breaking labor law and illegally busting unions in order to drive out retail competitors, especially in small towns, that could be deemed an unfair method of competition. Antitrust scholars including Vaheesan and University of Chicago law professor Eric Posner have made arguments along these lines.
David Seligman, executive director of the nonprofit law firm Towards Justice, says some lawyers have recently tried using labor law violations as evidence of unfair competition. Most notably, private plaintiffs and the state attorney general in California argued corporations that illegally misclassify employees as independent contractors gain an unfair competitive advantage by evading minimum wage, overtime, workers compensation, and other labor standards (thus lowering their labor costs). Courts agreed this conduct violated California competition and labor laws, but in a private suit the court did not find any violation of federal antitrust law.
Seligman says other antitrust practitioners could do more to expand this legal theory. “One key thing that public enforcers and academics ought to be doing is reinforcing the ways in which conduct fits together to amount to unfair competition,” says Seligman. “Unfair labor practice[s] can be part of a pattern of conduct that results in unfair competitive advantages.”
Lichtenstein also pointed to mechanisms beyond antitrust and traditional collective bargaining that can take squeezing labor out of competition, such as sectoral bargaining. Governments can establish standard-setting boards or councils where worker and business representatives come together to set wage, benefits, safety, and other standards across entire industries. New York state raised fast food workers’ minimum wage through this type of board, and Seattle created a multi-stakeholder board that sets labor standards for domestic workers. Participatory standard-setting boards can be especially useful in sectors, such as retail, where corporations manage many outlets or independently owned franchises that are hard to unionize.
“I don’t see traditional collective bargaining as it was envisioned in the [National Labor Relations] Act able to organize Dollar General,” Lichtenstein says. “They have ten thousand stores, it’s so easy for them to shut down the stores that get unionized.”
Even though it is illegal to shut down a store for unionizing, it happens. Only one Dollar General store has ever successfully unionized and three months after the union was finally certified, Dollar General closed the location citing “future profitability” concerns.
From https://www.foodandpower.net/latest/dollar-general-union-busting-unfair-competition-10-21
As workers flex their power in strikes and walkouts across the country, more retail employees are trying to organize corners of the large, low-wage, anti-union sector.
This includes a union drive in Barkhamsted, Connecticut, at a Dollar General store, a rapidly expanding discount chain known for low wages and harsh working conditions. Dollar General has more than 157,000 employees, and in 2020 a store employee’s median annual income was $14,571. Meanwhile corporate profits increased 54% between 2019 and 2020 to $2.6 billion.
Shortly after Dollar General workers in Barkhamsted filed for a union election in late September, the corporation hired anti-union consultants for $2,700 per consultant per day and sent corporate managers to patrol the store. After weeks of one-on-one meetings with workers, anti-union presentations, alleged threats to close the store, and a specious termination of a union-sympathetic employee, the union election looks likely to fail. Last Friday, two workers voted for unionizing, three voted against, and two ballots were contested. The National Labor Relations Board (NLRB) will make the final call.
In a statement sent via email, Dollar General said that “we disagree with the claim raised by our former Barkhamsted employee, as well as any allegation of retaliation or harassment” and that the company “believe[s] a union is not in our employees’ best interests.”
“It’s been the most aggressive anti-union campaign that I’ve seen,” says Jessica Petronella, director of organizing with UFCW Local 371. “They are worried about the bigger picture. They don’t want these workers at Barkhamsted to organize because … they don’t want workers in other stores to feel empowered.”
Petronella alleges that Dollar General violated several labor laws and plans to file unfair labor practice charges with the NLRB. But the agency’s weak fines generally do not deter illegal union busting by firms determined to block worker organizing. “It’s a cost of doing business,” says Nelson Lichtenstein, labor historian and professor emeritus at University of California, Santa Barbara.
Harsher penalties and stronger labor protections could change this business calculus, as could a new approach to competition policy. Labor advocates have long sought to prevent firms from competing in a race to the bottom on labor costs. Antitrust enforcement could embody this principle by establishing that labor law violations are an unfair way for corporations to corner markets.
Antitrust laws bar businesses from dominating industries through “unfair” or “anticompetitive” means. But there are few clear legal definitions of unfair or anticompetitive conduct. Congress gave the Federal Trade Commission (FTC) broad authority to define and prohibit so-called “unfair methods of competition,” but the agency has read this power narrowly and used it sparingly in recent decades. This could change – the FTC formed a new working group to explore fair competition rulemaking, and new chairwoman Lina Khan is committed to tapping unused authority.
Courts have held that businesses cannot acquire or maintain monopolies using fraud, deception, and other generally prohibited practices, according to research by Open Markets legal director Sandeep Vaheesan.
In the late 1970s, FTC Chairman Michael Pertschuk extended this interpretation and floated the idea of prosecuting companies that violated employment, environmental, labor, and other laws. By breaking these generally applicable laws, Pertschuk argued that firms used “unfair methods of competition” to obtain advantages over honest rivals that complied with the law. What Pertschuk suggested was not farfetched but rooted in Supreme Court interpretations of the FTC’s authority. In a 1972 decision, the Supreme Court stated the FTC can act as “a court of equity” and “consider[] public values beyond simply those enshrined in the letter or encompassed in the spirit of the antitrust laws.”
In the case of Dollar General, maintaining low labor costs is a central part of its competitive edge. But if Dollar General holds down wages and working conditions by breaking labor law and illegally busting unions in order to drive out retail competitors, especially in small towns, that could be deemed an unfair method of competition. Antitrust scholars including Vaheesan and University of Chicago law professor Eric Posner have made arguments along these lines.
David Seligman, executive director of the nonprofit law firm Towards Justice, says some lawyers have recently tried using labor law violations as evidence of unfair competition. Most notably, private plaintiffs and the state attorney general in California argued corporations that illegally misclassify employees as independent contractors gain an unfair competitive advantage by evading minimum wage, overtime, workers compensation, and other labor standards (thus lowering their labor costs). Courts agreed this conduct violated California competition and labor laws, but in a private suit the court did not find any violation of federal antitrust law.
Seligman says other antitrust practitioners could do more to expand this legal theory. “One key thing that public enforcers and academics ought to be doing is reinforcing the ways in which conduct fits together to amount to unfair competition,” says Seligman. “Unfair labor practice[s] can be part of a pattern of conduct that results in unfair competitive advantages.”
Lichtenstein also pointed to mechanisms beyond antitrust and traditional collective bargaining that can take squeezing labor out of competition, such as sectoral bargaining. Governments can establish standard-setting boards or councils where worker and business representatives come together to set wage, benefits, safety, and other standards across entire industries. New York state raised fast food workers’ minimum wage through this type of board, and Seattle created a multi-stakeholder board that sets labor standards for domestic workers. Participatory standard-setting boards can be especially useful in sectors, such as retail, where corporations manage many outlets or independently owned franchises that are hard to unionize.
“I don’t see traditional collective bargaining as it was envisioned in the [National Labor Relations] Act able to organize Dollar General,” Lichtenstein says. “They have ten thousand stores, it’s so easy for them to shut down the stores that get unionized.”
Even though it is illegal to shut down a store for unionizing, it happens. Only one Dollar General store has ever successfully unionized and three months after the union was finally certified, Dollar General closed the location citing “future profitability” concerns.
Discussion of On Corruption in America (Knopf, 2020), by Sarah Chayes
By Don Allen Resnikoff
Is US prosecution of official corruption too lax?
Writing in the New York Times, Ryan C. Crocker, ambassador to Afghanistan under President Barack Obama, explains that a major problem in Afghanistan has been the corruption of their political leaders. Crocker points out that U.S. sufferance of corruption in Afghanistan has precedent in the U.S.: “Corruption was endemic in New York, Boston and Chicago through much of the 19th and into the 20th centuries.”[i]
Journalist and former military advisor Sarah Chayes’ makes essentially the same points as Crocker in her book , On Corruption in America (Alfred a Knopf, 2020). When Chayes was in Afghanistan, she saw that theft of government money was rife. There have been networks of privileged people in and out of the Afghan government who have had access to government decision makers, and misused that access.
Chayes offers many examples of the same thing happening in America. One example among many concerns the well-connected Steven Mnuchin. His Capmark Financial Group was a leading originator of shaky real estate loans and collateralized debt arrangements in the lead up to the financial crash of 2008. When Mnuchin bought IndyMac Bank in 2009, the FDIC assumed nearly 80% of loan losses. It “enriched him on homeowners’ distress,” according to Chayes.
Mnuchin was subsequently appointed to head the U.S. Treasury during the Trump Administration.
Another example involves Senate leader Mitch McConnell, his wife Elaine Chao, and Russian and Chinese business people. Chayes alleges that a network of McConnell’s relatives, and Russian and Chinese cronies, conspired to divert public money that should have benefitted Kentucky mineworkers. The diversion was to an aluminum plant in Kentucky that benefitted well connected individuals. Chayes says that what happened was “a distorted sequence of events typical of today’s era of transnational kleptocratic networks.”
Chayes believes that U.S. laws on official corruption need to be strengthened in a number of ways, including legislative reversal of decisions of the U.S. Supreme Court on what constitutes official corruption. Chayes defies conventional wisdom when she argues against the unanimous decision of the Court overturning the corruption conviction of Virginia’s former Governor Bob McDonnell.
The Governor accepted valuable benefits from a wealthy corporate leader and then put pressure on the University of Virginia to run studies of a questionable pharmaceutical product being promoted by the wealthy benefactor.
The federal bribery statute, 18 U.S.C. § 201, makes it a crime for a public official to “receive or accept anything of value” in exchange for being “influenced in the performance of any official act.” An "official act" is a decision or action on a "question, matter, cause, suit, proceeding or controversy." The Court said that the “question” or “matter” must involve a formal exercise of government authority, and must also be something specific and focused that is "pending" or "may by law be brought" before a public official. To qualify as an "official act," the public official must make a decision to take an action on that question or matter, or agree to do so. Setting up a meeting, talking to another official, or organizing an event -- without more -- does not fit that definition of "official act." Because jury instructions in the McDonnell trial did not follow those requirements, the U.S. Supreme Court found that there was trial error requiring reversal of the McDonnell conviction.[ii]
Chayes disparages the U.S. Supreme Court’s decision as making routine corrupt politics legal and acceptable. Chayes argues that the U.S. Supreme Court managed to “transform a broad, commonsense definition of bribery into something narrow and technical.” Lawyers understand the fairness rationale of the Court’s reasoning, but such understanding does not address Chayes’ point that ordinary citizens may expect that behavior like McDonnell’s should be considered corrupt and prosecutable.
Chayes’ point about political corruption is straightforward: When well-connected networks of business and government people act corruptly to enrich themselves at the expense of ordinary people, those ordinary people will lose confidence in their government.
[i] Ryan Croccker, America Lost Patience in Afghanista, https://www.nytimes.com/2021/08/21/opinion/us-afghanistan
[ii] McDonnell v. United States, 579 U.S. ___,2915
Slate: Is Joe Manchin about ideology or self-serving?
A recent article in Slate magazine points out:
• A summer sting operation by Greenpeace had an Exxon Mobil lobbyist reveal that he met with Manchin weekly to try to persuade him to weaken Biden’s climate agenda (and he’s not the only rich guy who gets Manchin regularly on the line).
• An August piece in Harper’s noted that the West Virginia Democratic Party, which the senator played no small role in gutting, remains entirely under Manchin’s influence and control. It also mentions how Manchin leveraged his influence within the Senate to get plush government appointments for people close to him, including his wife.
• A September report from Type Investigations and the Intercept revealed that Manchin is currently invested in multiple coal companies that are run by his son, and that, even though the elder Manchin’s investments are in a blind trust, he has personally made $4.5 million from them during the time he has spent in the Senate (11 years to date).
Also: "In this remaining time, he seems to be simply looking out for his sources of wealth, including the ones that come from his son’s coal incinerators. It wouldn’t be the first time a Manchin family member used conflicts of interest to their advantage. Joe’s wife, Gayle, previously served as head of the West Virginia Board of Education and used her position to try to require the state’s schools to purchase EpiPens. EpiPens are manufactured by the Big Pharma juggernaut Mylan, whose former CEO was Heather Bresch—Manchin’s daughter, who stepped down after it was revealed she helped fix the prices of EpiPens in collusion with Pfizer. Family helping family: It’s a highly lucrative graft."
See https://slate.com/news-and-politics/2021/10/joe-manchin-coal-climate-change.html?sid=5ff8d8b261bfa546dd075a83&email=f7bf73e2d7ca47c65c9df513d4f1a2ad486611b90e9f78b92689312edf5b4e16&utm_medium=email&utm_source=newsletter&utm_content=TheSlatest&utm_campaign=traffic
Another among other articles with a similar point: Joe Manchin’s Dirty Empire (theintercept.com) https://theintercept.com/2021/09/03/joe-manchin-coal-fossil-fuels-pollution/
Posting by Don Allen Resnikoff
Judge Sotomayor finds her colleagues approach to procedural issues to be "Stunning:"
Cite as: 594 U. S. ____ (2021) 1 SOTOMAYOR, J., dissenting SUPREME COURT OF THE UNITED STATES No. 21A24 WHOLE WOMAN’S HEALTH ET AL. v. AUSTIN REEVE JACKSON, JUDGE, ET AL. ON APPLICATION FOR INJUNCTIVE RELIEF [September 1, 2021] JUSTICE SOTOMAYOR, with whom JUSTICE BREYER and JUSTICE KAGAN join, dissenting.
The Court’s order is stunning. Presented with an application to enjoin a flagrantly unconstitutional law engineered to prohibit women from exercising their constitutional rights and evade judicial scrutiny, a majority of Justices have opted to bury their heads in the sand. Last night, the Court silently acquiesced in a State’s enactment of a law that flouts nearly 50 years of federal precedents. Today, the Court belatedly explains that it declined to grant relief because of procedural complexities of the State’s own invention. Ante, at 1. Because the Court’s failure to act rewards tactics designed to avoid judicial review and inflicts significant harm on the applicants and on women seeking abortions in Texas, I dissent
The whole of the opinion is here: 21A24 Whole Woman's Health v. Jackson (09/01/2021) (supremecourt.gov) https://www.supremecourt.gov/opinions/20pdf/21a24_8759.pdf
Posting by Don Allen Resnikoff
Cite as: 594 U. S. ____ (2021) 1 SOTOMAYOR, J., dissenting SUPREME COURT OF THE UNITED STATES No. 21A24 WHOLE WOMAN’S HEALTH ET AL. v. AUSTIN REEVE JACKSON, JUDGE, ET AL. ON APPLICATION FOR INJUNCTIVE RELIEF [September 1, 2021] JUSTICE SOTOMAYOR, with whom JUSTICE BREYER and JUSTICE KAGAN join, dissenting.
The Court’s order is stunning. Presented with an application to enjoin a flagrantly unconstitutional law engineered to prohibit women from exercising their constitutional rights and evade judicial scrutiny, a majority of Justices have opted to bury their heads in the sand. Last night, the Court silently acquiesced in a State’s enactment of a law that flouts nearly 50 years of federal precedents. Today, the Court belatedly explains that it declined to grant relief because of procedural complexities of the State’s own invention. Ante, at 1. Because the Court’s failure to act rewards tactics designed to avoid judicial review and inflicts significant harm on the applicants and on women seeking abortions in Texas, I dissent
The whole of the opinion is here: 21A24 Whole Woman's Health v. Jackson (09/01/2021) (supremecourt.gov) https://www.supremecourt.gov/opinions/20pdf/21a24_8759.pdf
Posting by Don Allen Resnikoff
Does current labor unrest offer an opportunity for a resurgence of labor unions?
By DAR: The context for current labor-management disputes is that union power has declined over recent decades. In 2019, only 10.8 percent of U.S. workers were union members, according to the Bureau of Labor Statistics.
27 states have “right to work” laws that require unions to represent all workers, not just those that join or pay union dues. That holds down the number of union workers and weakens unions financially.
Most employees can be fired for any reason, and do not have the advantage of union representation on issues such a wage levels, working conditions, and health and other benefits.
Current pandemic related labor unrest may be an opportunity for union organizing, but perhaps not. Amazon famously beat back attempts to unionize its workers. The Biden administration has promoted legislation to aid unions and expand employee bargaining rights, but the fate of that legislation is uncertain. For a description of the legislation see 2021-02-04 PRO Act of 2021 Fact Sheet.pdf (house.gov)
By DAR: The context for current labor-management disputes is that union power has declined over recent decades. In 2019, only 10.8 percent of U.S. workers were union members, according to the Bureau of Labor Statistics.
27 states have “right to work” laws that require unions to represent all workers, not just those that join or pay union dues. That holds down the number of union workers and weakens unions financially.
Most employees can be fired for any reason, and do not have the advantage of union representation on issues such a wage levels, working conditions, and health and other benefits.
Current pandemic related labor unrest may be an opportunity for union organizing, but perhaps not. Amazon famously beat back attempts to unionize its workers. The Biden administration has promoted legislation to aid unions and expand employee bargaining rights, but the fate of that legislation is uncertain. For a description of the legislation see 2021-02-04 PRO Act of 2021 Fact Sheet.pdf (house.gov)
Some believe there may be a resurgence of labor unions
A New Republic magazine article is optimistic. The article argues that “workers across the country are standing up for basic dignity and respect on the job in a historic way.” America Is in the Midst of a Dramatic Labor Resurgence | The New Republic https://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgencehttps://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgence
The article offers some statistics: The Bureau of Labor Statistics tracks “large strikes,” meaning strikes of over 1,000 workers. In 2020, there were a total of nine such strikes, involving 28,800 workers. In 2021 so far, the total number is already at 12 strikes, involving 22,300 workers. There are three large pending strike authorizations that could add to that tally: IATSE-affiliated Hollywood production workers (60–65,000 workers), Kaiser Permanente workers (37,000), and UAW-affiliated John Deere workers (roughly 10,000).
The article also offers statistics about strikes that are not “large strikes.” either. In 2020, the Federal Mediation & Conciliation Service, a government agency that handles labor disputes, recorded under 50 official strikes resulting from union labor disputes. So far in 2021, the Cornell ILR Labor Action Tracker has recorded over 100 such strikes—and it’s only October.
A New Republic magazine article is optimistic. The article argues that “workers across the country are standing up for basic dignity and respect on the job in a historic way.” America Is in the Midst of a Dramatic Labor Resurgence | The New Republic https://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgencehttps://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgence
The article offers some statistics: The Bureau of Labor Statistics tracks “large strikes,” meaning strikes of over 1,000 workers. In 2020, there were a total of nine such strikes, involving 28,800 workers. In 2021 so far, the total number is already at 12 strikes, involving 22,300 workers. There are three large pending strike authorizations that could add to that tally: IATSE-affiliated Hollywood production workers (60–65,000 workers), Kaiser Permanente workers (37,000), and UAW-affiliated John Deere workers (roughly 10,000).
The article also offers statistics about strikes that are not “large strikes.” either. In 2020, the Federal Mediation & Conciliation Service, a government agency that handles labor disputes, recorded under 50 official strikes resulting from union labor disputes. So far in 2021, the Cornell ILR Labor Action Tracker has recorded over 100 such strikes—and it’s only October.
The number of workers on strike hits the highest since the 1980s
Excerpt from https://www.cnbc.com/2019/10/21/the-number-of-workers-on-strike-hits-the-highest-since-the-1980s.html
PUBLISHED MON, OCT 21 20191:20 PM EDTUPDATED MON, OCT 21 20191:57 PM EDT
Olivia Raimonde
The number of striking workers balloons to nearly 500,000 in 2018, up from about 25,000 in 2017, according to the Bureau of Labor Statistics.
This is the largest number of people who have walked out on work since the mid-1980s.
As the labor market tightens, workers are becoming more confident about striking for better salaries and benefits.
In September, workers for General Motors walked out in what has now become the company’s longest strike in decades. The strike began after the auto manufacturer could not reach a contract agreement with labor union United Auto Workers. The walkout is estimated to have cost General Motors upwards of $2 billion, according to Bank of America.
Not only are people striking, but the number of people who have voluntarily quit their job, which can be viewed as a measure of job market confidence, hit an all-time high in July. The percentage of striking workers in the total workforce is currently at about 0.3%, compared with 0.4% in the mid-1980s.
As the gap between executive salaries and worker pay expands, more people are becoming discontent. In the recovery, corporate profits stabilized long before household income, acting as a spark for the surge in strikes.
General Motors workers aren’t the only ones walking out on the job. About 3,500 Mack Truck employees, who are also UAW members, are currently striking across three states for the first time in 35 years over their contracts. The union is seeking better contract terms on issues ranging from wage increases and holiday schedules to health care coverage and retirement benefits.
Among other notable actions, Chicago public school teachers are in their third day of a strike, demanding higher salaries, better benefits and more resources for the classroom. The strike has effectively canceled classes for approximately 361,000 students.
DAR Note: John Deere workers are also striking.
Record numbers of people are quitting their jobs-
About 4.3 million Americans, or 2.9% of the workforce, left their jobs in August, with many citing a career change and better hours as reasons why.
See Video Record number of people are quitting their jobs - ABC News (go.com) https://abcnews.go.com/GMA/News/video/record-number-people-quitting-jobs-80554144#:~:text=Record%20number%20of%20people%20are%20quitting%20their%20jobs,career%20change%20and%20better%20hours%20as%20reasons%20why.
Excerpt from https://www.cnbc.com/2019/10/21/the-number-of-workers-on-strike-hits-the-highest-since-the-1980s.html
PUBLISHED MON, OCT 21 20191:20 PM EDTUPDATED MON, OCT 21 20191:57 PM EDT
Olivia Raimonde
The number of striking workers balloons to nearly 500,000 in 2018, up from about 25,000 in 2017, according to the Bureau of Labor Statistics.
This is the largest number of people who have walked out on work since the mid-1980s.
As the labor market tightens, workers are becoming more confident about striking for better salaries and benefits.
In September, workers for General Motors walked out in what has now become the company’s longest strike in decades. The strike began after the auto manufacturer could not reach a contract agreement with labor union United Auto Workers. The walkout is estimated to have cost General Motors upwards of $2 billion, according to Bank of America.
Not only are people striking, but the number of people who have voluntarily quit their job, which can be viewed as a measure of job market confidence, hit an all-time high in July. The percentage of striking workers in the total workforce is currently at about 0.3%, compared with 0.4% in the mid-1980s.
As the gap between executive salaries and worker pay expands, more people are becoming discontent. In the recovery, corporate profits stabilized long before household income, acting as a spark for the surge in strikes.
General Motors workers aren’t the only ones walking out on the job. About 3,500 Mack Truck employees, who are also UAW members, are currently striking across three states for the first time in 35 years over their contracts. The union is seeking better contract terms on issues ranging from wage increases and holiday schedules to health care coverage and retirement benefits.
Among other notable actions, Chicago public school teachers are in their third day of a strike, demanding higher salaries, better benefits and more resources for the classroom. The strike has effectively canceled classes for approximately 361,000 students.
DAR Note: John Deere workers are also striking.
Record numbers of people are quitting their jobs-
About 4.3 million Americans, or 2.9% of the workforce, left their jobs in August, with many citing a career change and better hours as reasons why.
See Video Record number of people are quitting their jobs - ABC News (go.com) https://abcnews.go.com/GMA/News/video/record-number-people-quitting-jobs-80554144#:~:text=Record%20number%20of%20people%20are%20quitting%20their%20jobs,career%20change%20and%20better%20hours%20as%20reasons%20why.
A judge on Friday issued a temporary restraining order against the Chicago police union president, prohibiting him from making public statements that encourage members not to report their COVID-19 vaccine status to the city.
Cook County Circuit Judge Cecilia Horan ruled there was potential irreparable harm if local Fraternal Order of Police President John Catanzara persisted in making such statements. City attorneys argued they were tantamount to him advocating “sedition” and “anarchy” because he was directing members to disobey an order from their superiors.https://www.chicagotribune.com/news/breaking/ct-fop-john-catanzara-vaccine-mandate-20211015-egsrqzbzvzefrk4thcbxfqwpxi-story.html
The City of Chicago's litigation Complaint requesting injunction against discouraging COVID vaccine mandate requirements is here:
https://news.wttw.com/sites/default/files/article/file-attachments/1%202021-10-14%20Verified%20Complaint%20(FOP).pdf
Excerpt:
If Catanzara and the FOP are allowed to continue with these extortionate demands ... the City will be faced with an unlawful and untenable Hobson’s Choice: either exempt the FOP membership from complying with reasonable and necessary directives needed to combat the COVID-19 pandemic and thereby jeopardize the health and safety of both CPD employees and citizens with whom they interact, or be left without a police force sufficient to keep the peace and combat the pandemic of violent crime plaguing the City. . . .
Cook County Circuit Judge Cecilia Horan ruled there was potential irreparable harm if local Fraternal Order of Police President John Catanzara persisted in making such statements. City attorneys argued they were tantamount to him advocating “sedition” and “anarchy” because he was directing members to disobey an order from their superiors.https://www.chicagotribune.com/news/breaking/ct-fop-john-catanzara-vaccine-mandate-20211015-egsrqzbzvzefrk4thcbxfqwpxi-story.html
The City of Chicago's litigation Complaint requesting injunction against discouraging COVID vaccine mandate requirements is here:
https://news.wttw.com/sites/default/files/article/file-attachments/1%202021-10-14%20Verified%20Complaint%20(FOP).pdf
Excerpt:
If Catanzara and the FOP are allowed to continue with these extortionate demands ... the City will be faced with an unlawful and untenable Hobson’s Choice: either exempt the FOP membership from complying with reasonable and necessary directives needed to combat the COVID-19 pandemic and thereby jeopardize the health and safety of both CPD employees and citizens with whom they interact, or be left without a police force sufficient to keep the peace and combat the pandemic of violent crime plaguing the City. . . .
Legislation to bar internet companies from favoring their own products on their platforms is gaining more support, in what could be a potential threat to the business models of tech giants like Amazon.com Inc. and Apple Inc.
Bipartisan Senate legislation set to be unveiled on Thursday would prohibit dominant platforms from favoring their own products or services, a practice known as self-preferencing. It would also bar these dominant platforms from discriminating among business users in a way that materially harms competition.
In particular, the bill would prohibit a range of practices that are harmful to businesses and consumers, such as requiring a business to buy a dominant platform’s goods or services in exchange for preferred placement; misusing a business’s data in order to compete against it; biasing search results in favor of the dominant firm; and unfairly preventing another business’s product from inter-operating with the dominant platform.
The House Judiciary Committee passed a similar bill earlier this year, although in some respects the Senate bill would be somewhat tougher.
The Senate bill is being sponsored by Sens. Amy Klobuchar (D., Minn.), the chairwoman of the Senate antitrust subcommittee, and Chuck
Grassley of Iowa, the Judiciary Committee’s top Republican.
Excerpt from WSJ [paywall] Effort to Bar Tech Companies From ‘Self-Preferencing’ Gains Traction - WSJhttps://www.wsj.com/articles/effort-to-bar-tech-companies-from-self-preferencing-gains-traction-11634202000?cx_testId=3&cx_testVariant=cx_2&cx_artPos=3&mod=WTRN#cxrecs_s
An excerpt from the House version of the bill follows [https://www.congress.gov/bill/117th-congress/house-bill/3816/text?r=43&s=1]:
SECTION 1. SHORT TITLE.
This Act may be cited as the “American Choice and Innovation Online Act”.
SEC. 2. UNLAWFUL DISCRIMINATORY CONDUCT.
(a) Violation.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to engage in any conduct in connection with the operation of the covered platform that--
(1) advantages the covered platform operator’s own products, services, or lines of business over those of another business user;
(2) excludes or disadvantages the products, services, or lines of business of another business user relative to the covered platform operator’s own products, services, or lines of business; or
(3) discriminates among similarly situated business users.
(b) Other Discriminatory Conduct.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to--
(1) restrict or impede the capacity of a business user to access or interoperate with the same platform, operating system, hardware and software features that are available to the covered platform operator’s own products, services, or lines of business;
(2) condition access to the covered platform or preferred status or placement on the covered platform on the purchase or use of other products or services offered by the covered platform operator;
(3) use non-public data obtained from or generated on the platform by the activities of a business user or its customers that is generated through an interaction with the business user’s products or services to offer or support the offering of the covered platform operator’s own products or services;
(4) restrict or impede a business user from accessing data generated on the platform by the activities of the business user or its customers through an interaction with the business user’s products or services, such as contractual or technical restrictions that prevent the portability of such data by the business user to other systems or applications;
(5) restrict or impede covered platform users from un-installing software applications that have been preinstalled on the covered platform or changing default settings that direct or steer covered platform users to products or services offered by the covered platform operator;
(6) restrict or impede businesses users from communicating information or providing hyperlinks on the covered platform to covered platform users to facilitate business transactions;
(7) in connection with any user interfaces, including search or ranking functionality offered by the covered platform, treat the covered platform operator’s own products, services, or lines of business more favorably than those of another business user;
(8) interfere or restrict a business user’s pricing of its goods or services;
(9) restrict or impede a business user, or a business user’s customers or users, from interoperating or connecting to any product or service; and
(10) retaliate against any business user or covered platform user that raises concerns with any law enforcement authority about actual or potential violations of State or Federal law.
(c) Affirmative Defense.--
(1) IN GENERAL.—Subsection (a) and (b) shall not apply if the defendant establishes by clear and convincing evidence that the conduct described in subsections (a) or (b)--
(A) would not result in harm to the competitive process by restricting or impeding legitimate activity by business users; or
(B) was narrowly tailored, could not be achieved through a less discriminatory means, was nonpretextual, and was necessary to--
(i) prevent a violation of, or comply with, Federal or State law; or
(ii) protect user privacy or other non-public data.
Bipartisan Senate legislation set to be unveiled on Thursday would prohibit dominant platforms from favoring their own products or services, a practice known as self-preferencing. It would also bar these dominant platforms from discriminating among business users in a way that materially harms competition.
In particular, the bill would prohibit a range of practices that are harmful to businesses and consumers, such as requiring a business to buy a dominant platform’s goods or services in exchange for preferred placement; misusing a business’s data in order to compete against it; biasing search results in favor of the dominant firm; and unfairly preventing another business’s product from inter-operating with the dominant platform.
The House Judiciary Committee passed a similar bill earlier this year, although in some respects the Senate bill would be somewhat tougher.
The Senate bill is being sponsored by Sens. Amy Klobuchar (D., Minn.), the chairwoman of the Senate antitrust subcommittee, and Chuck
Grassley of Iowa, the Judiciary Committee’s top Republican.
Excerpt from WSJ [paywall] Effort to Bar Tech Companies From ‘Self-Preferencing’ Gains Traction - WSJhttps://www.wsj.com/articles/effort-to-bar-tech-companies-from-self-preferencing-gains-traction-11634202000?cx_testId=3&cx_testVariant=cx_2&cx_artPos=3&mod=WTRN#cxrecs_s
An excerpt from the House version of the bill follows [https://www.congress.gov/bill/117th-congress/house-bill/3816/text?r=43&s=1]:
SECTION 1. SHORT TITLE.
This Act may be cited as the “American Choice and Innovation Online Act”.
SEC. 2. UNLAWFUL DISCRIMINATORY CONDUCT.
(a) Violation.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to engage in any conduct in connection with the operation of the covered platform that--
(1) advantages the covered platform operator’s own products, services, or lines of business over those of another business user;
(2) excludes or disadvantages the products, services, or lines of business of another business user relative to the covered platform operator’s own products, services, or lines of business; or
(3) discriminates among similarly situated business users.
(b) Other Discriminatory Conduct.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to--
(1) restrict or impede the capacity of a business user to access or interoperate with the same platform, operating system, hardware and software features that are available to the covered platform operator’s own products, services, or lines of business;
(2) condition access to the covered platform or preferred status or placement on the covered platform on the purchase or use of other products or services offered by the covered platform operator;
(3) use non-public data obtained from or generated on the platform by the activities of a business user or its customers that is generated through an interaction with the business user’s products or services to offer or support the offering of the covered platform operator’s own products or services;
(4) restrict or impede a business user from accessing data generated on the platform by the activities of the business user or its customers through an interaction with the business user’s products or services, such as contractual or technical restrictions that prevent the portability of such data by the business user to other systems or applications;
(5) restrict or impede covered platform users from un-installing software applications that have been preinstalled on the covered platform or changing default settings that direct or steer covered platform users to products or services offered by the covered platform operator;
(6) restrict or impede businesses users from communicating information or providing hyperlinks on the covered platform to covered platform users to facilitate business transactions;
(7) in connection with any user interfaces, including search or ranking functionality offered by the covered platform, treat the covered platform operator’s own products, services, or lines of business more favorably than those of another business user;
(8) interfere or restrict a business user’s pricing of its goods or services;
(9) restrict or impede a business user, or a business user’s customers or users, from interoperating or connecting to any product or service; and
(10) retaliate against any business user or covered platform user that raises concerns with any law enforcement authority about actual or potential violations of State or Federal law.
(c) Affirmative Defense.--
(1) IN GENERAL.—Subsection (a) and (b) shall not apply if the defendant establishes by clear and convincing evidence that the conduct described in subsections (a) or (b)--
(A) would not result in harm to the competitive process by restricting or impeding legitimate activity by business users; or
(B) was narrowly tailored, could not be achieved through a less discriminatory means, was nonpretextual, and was necessary to--
(i) prevent a violation of, or comply with, Federal or State law; or
(ii) protect user privacy or other non-public data.
_______________
Last July, the Senate Commerce Commottee issued a press release which anticipated the scheduling disaster that hit Southwest Air this past weekend. The press release complained that the airlines had not applied the taxpayer funds given to them to maintain an effective workforce. The press release follows:
As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov)As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustrations, Chair Cantwell Calls on Airlines for AnswersAs Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov) https://www.commerce.senate.gov/2021/7/as-workforce-shortages-force-flight-cancellations-delays-and-passenger-frustrations-chair-cantwell-calls-on-airlines-for-answers
A headline in the Senate Commerce Committee press release says:
An excerpt from the letters sent to several airlines, including Southwest Air, which cancelled many flights last weekend:
I am deeply concerned by recent reports highlighting [Airline] workforce shortages that have caused flight cancellations and generated delays for passengers. These shortages come in the wake of unprecedented federal funding that Congress appropriated, at the airlines’ request, to support the airline industry during the COVID-19 pandemic. Congress issued this funding with the express purpose of keeping the workforce on payroll to ensure an easier ramp up when air travel returned. I am concerned that, at best, [Airline] poorly managed its marketing of flights and workforce as more people are traveling, and, at worst, it failed to meet the intent of tax payer funding and prepare for the surge in travel that we are now witnessing. In light of reported airline cancellations and delays, and recognizing that [Airline] was one of the largest recipients of payroll support funding, I write to request information regarding [Airline] efforts to comply with the terms of its payroll support agreements with the federal government as well as the origin of recent workforce shortages and the subsequent effect on passengers.
Congress recognized the need to ensure that airline workers, including pilots, flight attendants, baggage crews, customer service professionals, contractors, and others could retain their jobs and, in turn, keep the airline industry operating safely for the American public. To accomplish this, Congress created the Payroll Support Program (“PSP”) to protect the jobs of thousands of airline workers, ensure that essential travel would continue uninterrupted, and guarantee that the airline industry would remain viable not just for passenger flight, but for cargo flight as well. At the urging of industry, the PSP was initially created by the CARES Act to help the industry as air traffic sharply dropped and was subsequently extended by the 2021 Consolidated Appropriations Act and the American Rescue Plan Act, and provided $63 billion to passenger carriers, cargo carriers, and contractors, including $54 billion in relief to passenger airlines. Under the CARES Act, to further assist the airline industry, Congress also provided up to $46 billion in loans, including up to $25 billion for passenger air carriers.
In exchange for funding, aviation companies were required to refrain from conducting involuntary layoffs, furloughs, or instituting pay or benefit reductions. These companies were also required to file periodic reports with Treasury, documenting, among other things, the amount of PSP funds expended and any changes in employee headcount each quarter.[1]
Over the past year, there have been reports of U.S. airlines seeking to reduce the size of their workforce by encouraging employees to accept early retirements, voluntary furloughs, buyouts, and leaves of absence. This is in addition to reports projecting an impending, massive pilot shortage. As passenger travel has boomed in recent weeks, new reports also suggest that some airlines are now unprepared to meet the increased demand that they scheduled for, and have resorted to delaying or canceling flights. This reported workforce shortage runs counter to the objective and spirit of the PSP, which was to enable airlines to endure the pandemic and keep employees on payroll so that the industry was positioned to capture a rebound in demand. Additionally, these disruptions in air travel have harmed U.S. consumers just as the American economy is rebounding, and the existing airline workforce is being placed under immense pressure to meet demand.
To assist the Committee in examining these issues, please provide written responses to the following questions by July 30, 2021:
Last July, the Senate Commerce Commottee issued a press release which anticipated the scheduling disaster that hit Southwest Air this past weekend. The press release complained that the airlines had not applied the taxpayer funds given to them to maintain an effective workforce. The press release follows:
As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov)As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustrations, Chair Cantwell Calls on Airlines for AnswersAs Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov) https://www.commerce.senate.gov/2021/7/as-workforce-shortages-force-flight-cancellations-delays-and-passenger-frustrations-chair-cantwell-calls-on-airlines-for-answers
A headline in the Senate Commerce Committee press release says:
An excerpt from the letters sent to several airlines, including Southwest Air, which cancelled many flights last weekend:
I am deeply concerned by recent reports highlighting [Airline] workforce shortages that have caused flight cancellations and generated delays for passengers. These shortages come in the wake of unprecedented federal funding that Congress appropriated, at the airlines’ request, to support the airline industry during the COVID-19 pandemic. Congress issued this funding with the express purpose of keeping the workforce on payroll to ensure an easier ramp up when air travel returned. I am concerned that, at best, [Airline] poorly managed its marketing of flights and workforce as more people are traveling, and, at worst, it failed to meet the intent of tax payer funding and prepare for the surge in travel that we are now witnessing. In light of reported airline cancellations and delays, and recognizing that [Airline] was one of the largest recipients of payroll support funding, I write to request information regarding [Airline] efforts to comply with the terms of its payroll support agreements with the federal government as well as the origin of recent workforce shortages and the subsequent effect on passengers.
Congress recognized the need to ensure that airline workers, including pilots, flight attendants, baggage crews, customer service professionals, contractors, and others could retain their jobs and, in turn, keep the airline industry operating safely for the American public. To accomplish this, Congress created the Payroll Support Program (“PSP”) to protect the jobs of thousands of airline workers, ensure that essential travel would continue uninterrupted, and guarantee that the airline industry would remain viable not just for passenger flight, but for cargo flight as well. At the urging of industry, the PSP was initially created by the CARES Act to help the industry as air traffic sharply dropped and was subsequently extended by the 2021 Consolidated Appropriations Act and the American Rescue Plan Act, and provided $63 billion to passenger carriers, cargo carriers, and contractors, including $54 billion in relief to passenger airlines. Under the CARES Act, to further assist the airline industry, Congress also provided up to $46 billion in loans, including up to $25 billion for passenger air carriers.
In exchange for funding, aviation companies were required to refrain from conducting involuntary layoffs, furloughs, or instituting pay or benefit reductions. These companies were also required to file periodic reports with Treasury, documenting, among other things, the amount of PSP funds expended and any changes in employee headcount each quarter.[1]
Over the past year, there have been reports of U.S. airlines seeking to reduce the size of their workforce by encouraging employees to accept early retirements, voluntary furloughs, buyouts, and leaves of absence. This is in addition to reports projecting an impending, massive pilot shortage. As passenger travel has boomed in recent weeks, new reports also suggest that some airlines are now unprepared to meet the increased demand that they scheduled for, and have resorted to delaying or canceling flights. This reported workforce shortage runs counter to the objective and spirit of the PSP, which was to enable airlines to endure the pandemic and keep employees on payroll so that the industry was positioned to capture a rebound in demand. Additionally, these disruptions in air travel have harmed U.S. consumers just as the American economy is rebounding, and the existing airline workforce is being placed under immense pressure to meet demand.
To assist the Committee in examining these issues, please provide written responses to the following questions by July 30, 2021:
Austin Real Estate Firm Files Antitrust Suit Against Zillow
There is a new antitrust lawsuit against Zillow, reported Axios.
Austin-based REX, a tech-based real estate broker, alleges Zillow unfairly marginalized its listings. REX’s listings, along with others that don’t list with a realtor — such as sale by owner — are now found on an obscure “other listings” tab on the Zillow website, rather than the default tab.
Zillow officials say they are complying with National Association of Realtors rules that call for the separation of agent-listed homes from those not represented by agents. The NAR is also a defendant in the REX lawsuit.
The dispute stems from Zillow’s recent move to go beyond listing homes for sale and create a brokerage to hire agents itself. The company announced last fall it would employ agents for its house-flipping service Zillow Offers in several states and would join the National Association of Realtors.
As part of that move, Zillow changed the way it collects listings of houses for sale. Zillow now gathers listings directly from multiple listing services, the databases of listings provided by real-estate brokers. (The Northwest Multiple Listing Service, for example, catalogues listings across more than two dozen counties in Washington.)
Along with that came the change that hit Rex: Zillow now categorizes listings under two tabs when people search for homes for sale: “agent listings” (where homes listed on multiple listing services show up) and “other listings.” To enforce National Association of Realtors rules, certain multiple listing services require that separation, according to the complaint. See https://www.axios.com/local/austin/2021/10/11/austin-real-estate-tech-zillow-rex-lawsuit
Source:Axios
There is a new antitrust lawsuit against Zillow, reported Axios.
Austin-based REX, a tech-based real estate broker, alleges Zillow unfairly marginalized its listings. REX’s listings, along with others that don’t list with a realtor — such as sale by owner — are now found on an obscure “other listings” tab on the Zillow website, rather than the default tab.
Zillow officials say they are complying with National Association of Realtors rules that call for the separation of agent-listed homes from those not represented by agents. The NAR is also a defendant in the REX lawsuit.
The dispute stems from Zillow’s recent move to go beyond listing homes for sale and create a brokerage to hire agents itself. The company announced last fall it would employ agents for its house-flipping service Zillow Offers in several states and would join the National Association of Realtors.
As part of that move, Zillow changed the way it collects listings of houses for sale. Zillow now gathers listings directly from multiple listing services, the databases of listings provided by real-estate brokers. (The Northwest Multiple Listing Service, for example, catalogues listings across more than two dozen counties in Washington.)
Along with that came the change that hit Rex: Zillow now categorizes listings under two tabs when people search for homes for sale: “agent listings” (where homes listed on multiple listing services show up) and “other listings.” To enforce National Association of Realtors rules, certain multiple listing services require that separation, according to the complaint. See https://www.axios.com/local/austin/2021/10/11/austin-real-estate-tech-zillow-rex-lawsuit
Source:Axios
Bonus: SNL news summary 10-16-2021
https://youtu.be/QQP_IMxtfBM
https://youtu.be/QQP_IMxtfBM
Is China Shooting Its Private Entrepreneurs in the Foot (Or Worse)?
by Don Allen Resnikoff
Even advocates of aggressive business regulation in the U.S. often recognize that excessive government restraints hobble entrepreneurial innovation. Former USDOJ Antitrust chief Delharim observed that while certain kinds of regulation are necessary, regulation was never intended to be without appropriate limits. Delharim pointed out that Thomas Jefferson said that "a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." [Public Roundtable on Anticompetitive Regulations Transcript Part One (justice.gov) https://www.justice.gov/atr/page/file/1073936/download]
It is hardly surprising that the Chinese government, which has Communist ideological roots, would depart from the advice of Thomas Jefferson and seek to control private Chinese companies in a way that risks seriously undermining those companies.
It is surprising that some U.S. commenters, including a prestigious New York Times columnist, suggest that the Chinese government’s recent crackdown on its private entrepreneurs will make them more threatening competitors, so much so that antitrust enforcement against companies like Facebook should be relaxed: “Mark Zuckerberg was right. . . .[he pointed to] the growing dangers from China across the digital landscape. He argued that [U.S.] tech companies like his needed to be large, if only to fend off challenges from the Asian giant and its ever-more-powerful government-controlled companies.” [https://www.nytimes.com/2021/07/20/opinion/china-xi-didi-biden-facebook.html]
Japan’s experience with keiretsu and government control of business in the 1970s and 1980s suggests that excessive government control undermines private entrepreneurs. One Japanese observer says that during those years “the Japanese economy caught up with other industrial economies in the world. . . . Japanese business and household sectors should have changed their behavior from the one based on collective actions to the more autonomous one of coping with their own risks under a more competitive environment. . . . .Collective business practices and government interventions largely remained.” The effects on the Japanese economy were dire. See https://www.gsid.nagoya-u.ac.jp/sotsubo/Postwar_Development_of_the_Japanese%20Economy(Otsubo_NagoyaU).pdf
There are important parallels between Japan’s earlier strategies and China’s current strategies for economic growth, despite obvious differences such as different population size and political ideology. In both situations governments’ political influence over business activities is very important. Growth is important as a government goal. In Japan’s earlier strategy and China’s recent strategy there is deliberate targeting of specific industry sectors for growth.
The experience in Japan suggests that the time came when the Japanese government needed to step out of the way and let successful private companies mature and succeed and let weaker companies fail. Instead, Japanese government bureaucrats continued to protect weaker companies.
The question for China is the extent to which it will allow government bureaucrats to meddle in the business of private companies in a way that suits perceived political purposes, but interferes with the operation of an open commercial market that rewards strong companies. If there is too much meddling by government bureaucrats,, China may face a decline for its companies in a manner similar to Japan.
It is possible to argue that because China has a non-democratic government its leaders may be in a position to avoid Japan’s error of failing to release the entrepreneurial energy of its successful companies. But that argument ignores the strong bent of Chinese bureaucrats to exercise political control over business, to the possible great detriment to those businesses. (See Benjamin Bracher’s perceptive student honors thesis written years ago and comparing Japan and China economies, at https://www.southwestern.edu/live/news/9466-benjamin-bracher-13-the-economic-rise-of-japan
What will happen after the Chinese government’s current crackdown on its private entrepreneurs is a matter of speculation, of course. I see merit in the observation that while the Chinese government’s goal is to fix structural problems, like excess debt and inequality, and generate more balanced growth, “economists warn that authoritarian governments have a shaky record with this type of transformation.” See The End of a ‘Gilded Age’: China Is Bringing Business to Heel - The New York Times (nytimes.com) https://www.nytimes.com/2021/10/05/business/china-businesses.html
The recent comments of Raghuram G. Rajan, professor of economics, are in the same vein. He observes that “[B]ecause China’s past cavalier treatment of intellectual property rights has made advanced economies increasingly wary of sharing research and know-how, China now must create more of its own IP. And while it has universities and sophisticated private corporations that can do this, the key question is whether these entities will have incentive to innovate freely despite the recent crackdown. From https://www.project-syndicate.org/commentary/china-risky-business-crackdown-common-prosperity-campaign-by-raghuram-rajan-2021-_2021&utm_medium=email&utm_term=0_73bad5b7d8-38b81a0552-107280365&mc_cid=38b81a0552&mc_eid=1ddc269de8}
So, it may be that the Chinese government policy of cracking down on its private entrepreneurs will shoot the Chinese economy in the foot, or worse. The implications for U.S. economic policy are complex, but appear to include cautions about the U.S. countering the Chinese by emulating a misguided policy of authoritarian government controls over business.
by Don Allen Resnikoff
Even advocates of aggressive business regulation in the U.S. often recognize that excessive government restraints hobble entrepreneurial innovation. Former USDOJ Antitrust chief Delharim observed that while certain kinds of regulation are necessary, regulation was never intended to be without appropriate limits. Delharim pointed out that Thomas Jefferson said that "a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." [Public Roundtable on Anticompetitive Regulations Transcript Part One (justice.gov) https://www.justice.gov/atr/page/file/1073936/download]
It is hardly surprising that the Chinese government, which has Communist ideological roots, would depart from the advice of Thomas Jefferson and seek to control private Chinese companies in a way that risks seriously undermining those companies.
It is surprising that some U.S. commenters, including a prestigious New York Times columnist, suggest that the Chinese government’s recent crackdown on its private entrepreneurs will make them more threatening competitors, so much so that antitrust enforcement against companies like Facebook should be relaxed: “Mark Zuckerberg was right. . . .[he pointed to] the growing dangers from China across the digital landscape. He argued that [U.S.] tech companies like his needed to be large, if only to fend off challenges from the Asian giant and its ever-more-powerful government-controlled companies.” [https://www.nytimes.com/2021/07/20/opinion/china-xi-didi-biden-facebook.html]
Japan’s experience with keiretsu and government control of business in the 1970s and 1980s suggests that excessive government control undermines private entrepreneurs. One Japanese observer says that during those years “the Japanese economy caught up with other industrial economies in the world. . . . Japanese business and household sectors should have changed their behavior from the one based on collective actions to the more autonomous one of coping with their own risks under a more competitive environment. . . . .Collective business practices and government interventions largely remained.” The effects on the Japanese economy were dire. See https://www.gsid.nagoya-u.ac.jp/sotsubo/Postwar_Development_of_the_Japanese%20Economy(Otsubo_NagoyaU).pdf
There are important parallels between Japan’s earlier strategies and China’s current strategies for economic growth, despite obvious differences such as different population size and political ideology. In both situations governments’ political influence over business activities is very important. Growth is important as a government goal. In Japan’s earlier strategy and China’s recent strategy there is deliberate targeting of specific industry sectors for growth.
The experience in Japan suggests that the time came when the Japanese government needed to step out of the way and let successful private companies mature and succeed and let weaker companies fail. Instead, Japanese government bureaucrats continued to protect weaker companies.
The question for China is the extent to which it will allow government bureaucrats to meddle in the business of private companies in a way that suits perceived political purposes, but interferes with the operation of an open commercial market that rewards strong companies. If there is too much meddling by government bureaucrats,, China may face a decline for its companies in a manner similar to Japan.
It is possible to argue that because China has a non-democratic government its leaders may be in a position to avoid Japan’s error of failing to release the entrepreneurial energy of its successful companies. But that argument ignores the strong bent of Chinese bureaucrats to exercise political control over business, to the possible great detriment to those businesses. (See Benjamin Bracher’s perceptive student honors thesis written years ago and comparing Japan and China economies, at https://www.southwestern.edu/live/news/9466-benjamin-bracher-13-the-economic-rise-of-japan
What will happen after the Chinese government’s current crackdown on its private entrepreneurs is a matter of speculation, of course. I see merit in the observation that while the Chinese government’s goal is to fix structural problems, like excess debt and inequality, and generate more balanced growth, “economists warn that authoritarian governments have a shaky record with this type of transformation.” See The End of a ‘Gilded Age’: China Is Bringing Business to Heel - The New York Times (nytimes.com) https://www.nytimes.com/2021/10/05/business/china-businesses.html
The recent comments of Raghuram G. Rajan, professor of economics, are in the same vein. He observes that “[B]ecause China’s past cavalier treatment of intellectual property rights has made advanced economies increasingly wary of sharing research and know-how, China now must create more of its own IP. And while it has universities and sophisticated private corporations that can do this, the key question is whether these entities will have incentive to innovate freely despite the recent crackdown. From https://www.project-syndicate.org/commentary/china-risky-business-crackdown-common-prosperity-campaign-by-raghuram-rajan-2021-_2021&utm_medium=email&utm_term=0_73bad5b7d8-38b81a0552-107280365&mc_cid=38b81a0552&mc_eid=1ddc269de8}
So, it may be that the Chinese government policy of cracking down on its private entrepreneurs will shoot the Chinese economy in the foot, or worse. The implications for U.S. economic policy are complex, but appear to include cautions about the U.S. countering the Chinese by emulating a misguided policy of authoritarian government controls over business.
States Allowed To Seek Disgorgement (Money Payment) Order In Martin Shkreli Antitrust Case-
New York and other states will be allowed to seek a nationwide disgorgement (money payment) order if they win at trial on their claim that Vyera Pharmaceuticals and its former chief executive Martin Shkreli participated in an anticompetitive scheme to maintain a price boost for the life-saving drug Daraprim.
US District Judge Denise Cote in Manhattan federal court said in her ruling on Friday, September 24, that New York law permitted the state to move to recoup alleged ill-gotten corporate gains nationally. The Cote decision is at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
New York and other states will be allowed to seek a nationwide disgorgement (money payment) order if they win at trial on their claim that Vyera Pharmaceuticals and its former chief executive Martin Shkreli participated in an anticompetitive scheme to maintain a price boost for the life-saving drug Daraprim.
US District Judge Denise Cote in Manhattan federal court said in her ruling on Friday, September 24, that New York law permitted the state to move to recoup alleged ill-gotten corporate gains nationally. The Cote decision is at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
Federal Trade Commission chief Lina Khan is resurrecting a review of Zillow Group's (Z, ZG) $500 million acquisition of ShowingTime -
Zillow had come to the deal in February for the online scheduling platform for real estate showings.
In the Spring, FTC lawyers told the companies they had no concerns about it. But now the FTC is asking for more information.
https://seekingalpha.com/news/3660803-zillow-acquiring-home-showing-platfor-showingtime-for-500m
Zillow had come to the deal in February for the online scheduling platform for real estate showings.
In the Spring, FTC lawyers told the companies they had no concerns about it. But now the FTC is asking for more information.
https://seekingalpha.com/news/3660803-zillow-acquiring-home-showing-platfor-showingtime-for-500m
Are the Authors of Consumer Reviews Protected by Anti-SLAPP Laws?
EXCERPT FROM Public Citizen Consumer Law & Policy Blog
Posted: 01 Oct 2021 09:02 AM PDT
by Paul Alan Levy
Today we entered an important case that will determine whether New York’s new and improved anti-SLAPP law protects the authors of consumer reviews against being sued for defamation when they reveal publicly that they were less than thrilled with a business’s services or products.
The case arose from the horrible experience of the Sproule family in early March 2020, when they traveled from their home in the Chicago suburbs to Sarah Sproule’s hometown, Wantagh, New York, to attend her father’s funeral. They brought along their daughter’s brand-new puppy (her Christmas present!) and took him in for grooming at a local business, VIP Pet Grooming Studio. The precise course of events is disputed, but the bottom line is that the grooming was interrupted because the puppy reacted badly; water accumulated in the dog’s lungs; and after two days on a ventilator at a local animal hospital, at a cost of more than $10,000, the dog had to be put down.
Compounding the family’s misery, the grooming outfit refused to take any responsibility for what had happened. So Robert Sproule posted reviews on both Yelp and Google, and both he and his wife sued the grooming company for negligence once the courts reopened as the pandemic eased. On the same day that it responded to the negligence complaint, VIP Pet Grooming sued for defamation. In a particularly sleazy move, the company sued both Robert and Sarah Sproule, even though only Robert Sproule had posted the reviews. Was this punishment for Sarah Sproule’s having sued for negligence? Was it just extra pressure on the family as a whole? VIP's lawyer has ignored that question so far.
Last year, New York updated its antiSLAPP law by expanding coverage from speech about “public permittees and licensees” to “speech on an issue of public interest,” as well as by toughening both the standards for justifying SLAPP suits and the remedies afforded to the victims of SLAPPs. Curiously enough, the defamation suit was filed a mere eight days before the effective date of the new law; it was served four days before the effective date, potentially raising the question whether the new law would be held to be applicable to cases still pending when the law came into effect. (all the courts that have addressed that issue so far have found that anti-SLAPP amendments do apply). But the trial judge denied the motion to dismiss on the ground that, because the consumer reviews addressed only a single problem encountered with a single local business, it was a review about a “private beef” rather than an issue of public interest.
This holding threatens all consumers and, indeed, most people who write publicly about the actions of companies that affect them. After all, most people post reviews only about incidents that affect them, and usually they write about their own particular experiences. Does that make these postings “private beefs”? And the holding raises a problem far beyond New York because anti-SLAPP laws in many states have similar language defining the scope of the speech protected. We took the case, therefore, to establish the principle that, when a consumer speaks up about his or her experiences with a single company, the common interest of all consumers in learning about corporate wrongdoing is sufficient to make the review a matter of public interest within the meaning of anti-SLAPP laws. And the legal issues are squarely presented on this appeal because the plaintiff pet grooming business chose to stand on its complaint, along with its argument that the anti-SLAPP law did not apply, rather than submitting any affidavits purporting to show that the review contained false statements of fact.
Our brief draws both on the language of the New York anti-SLAPP law, which is particularly useful because it defines “public interest” as including everything but “a purely private matter,” but also on cases applying anti-SLAPP laws in other states as well as interpretations of “matter of public concern,”which is a common concept in First Amendment law that affects defamation law particularly but other kinds of controversies as well.
The appeal will likely be argued next year.
https://pubcit.typepad.com/clpblog/2021/10/are-the-authors-of-consumer-reviews-protected-by-anti-slapp-laws.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
EXCERPT FROM Public Citizen Consumer Law & Policy Blog
Posted: 01 Oct 2021 09:02 AM PDT
by Paul Alan Levy
Today we entered an important case that will determine whether New York’s new and improved anti-SLAPP law protects the authors of consumer reviews against being sued for defamation when they reveal publicly that they were less than thrilled with a business’s services or products.
The case arose from the horrible experience of the Sproule family in early March 2020, when they traveled from their home in the Chicago suburbs to Sarah Sproule’s hometown, Wantagh, New York, to attend her father’s funeral. They brought along their daughter’s brand-new puppy (her Christmas present!) and took him in for grooming at a local business, VIP Pet Grooming Studio. The precise course of events is disputed, but the bottom line is that the grooming was interrupted because the puppy reacted badly; water accumulated in the dog’s lungs; and after two days on a ventilator at a local animal hospital, at a cost of more than $10,000, the dog had to be put down.
Compounding the family’s misery, the grooming outfit refused to take any responsibility for what had happened. So Robert Sproule posted reviews on both Yelp and Google, and both he and his wife sued the grooming company for negligence once the courts reopened as the pandemic eased. On the same day that it responded to the negligence complaint, VIP Pet Grooming sued for defamation. In a particularly sleazy move, the company sued both Robert and Sarah Sproule, even though only Robert Sproule had posted the reviews. Was this punishment for Sarah Sproule’s having sued for negligence? Was it just extra pressure on the family as a whole? VIP's lawyer has ignored that question so far.
Last year, New York updated its antiSLAPP law by expanding coverage from speech about “public permittees and licensees” to “speech on an issue of public interest,” as well as by toughening both the standards for justifying SLAPP suits and the remedies afforded to the victims of SLAPPs. Curiously enough, the defamation suit was filed a mere eight days before the effective date of the new law; it was served four days before the effective date, potentially raising the question whether the new law would be held to be applicable to cases still pending when the law came into effect. (all the courts that have addressed that issue so far have found that anti-SLAPP amendments do apply). But the trial judge denied the motion to dismiss on the ground that, because the consumer reviews addressed only a single problem encountered with a single local business, it was a review about a “private beef” rather than an issue of public interest.
This holding threatens all consumers and, indeed, most people who write publicly about the actions of companies that affect them. After all, most people post reviews only about incidents that affect them, and usually they write about their own particular experiences. Does that make these postings “private beefs”? And the holding raises a problem far beyond New York because anti-SLAPP laws in many states have similar language defining the scope of the speech protected. We took the case, therefore, to establish the principle that, when a consumer speaks up about his or her experiences with a single company, the common interest of all consumers in learning about corporate wrongdoing is sufficient to make the review a matter of public interest within the meaning of anti-SLAPP laws. And the legal issues are squarely presented on this appeal because the plaintiff pet grooming business chose to stand on its complaint, along with its argument that the anti-SLAPP law did not apply, rather than submitting any affidavits purporting to show that the review contained false statements of fact.
Our brief draws both on the language of the New York anti-SLAPP law, which is particularly useful because it defines “public interest” as including everything but “a purely private matter,” but also on cases applying anti-SLAPP laws in other states as well as interpretations of “matter of public concern,”which is a common concept in First Amendment law that affects defamation law particularly but other kinds of controversies as well.
The appeal will likely be argued next year.
https://pubcit.typepad.com/clpblog/2021/10/are-the-authors-of-consumer-reviews-protected-by-anti-slapp-laws.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
SIRM: EEOC Guidance on when Employers can require COVID vaccination
An SIRM article explains:
As mandatory COVID-19 vaccines become more widespread, many employers are asking what they can do if workers refuse. Some employers are firing workers who won't take the vaccine and others are requiring unvaccinated employees to submit to weekly testing and take other safety precautions.
The Equal Employment Opportunity Commission (EEOC) has weighed in with guidance that answers some workplace vaccination questions. For example, the agency said that federal anti-discrimination laws don't prohibit employers from requiring all employees who physically enter the workplace to be vaccinated for COVID-19. Employers that encourage or require vaccinations, however, must comply with the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964 and other workplace laws, according to the EEOC.
Explanation is at the full SIRM article: https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/if-workers-refuse-a-covid-19-vaccination.aspx
An SIRM article explains:
As mandatory COVID-19 vaccines become more widespread, many employers are asking what they can do if workers refuse. Some employers are firing workers who won't take the vaccine and others are requiring unvaccinated employees to submit to weekly testing and take other safety precautions.
The Equal Employment Opportunity Commission (EEOC) has weighed in with guidance that answers some workplace vaccination questions. For example, the agency said that federal anti-discrimination laws don't prohibit employers from requiring all employees who physically enter the workplace to be vaccinated for COVID-19. Employers that encourage or require vaccinations, however, must comply with the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964 and other workplace laws, according to the EEOC.
Explanation is at the full SIRM article: https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/if-workers-refuse-a-covid-19-vaccination.aspx
Fed Corruption Maybe: Second Fed president leaves amid fallout from trading controversy
from article by Zachary Halaschak https://news.yahoo.com/second-fed-president-leaves-amid-204500090.html
Mon, September 27, 2021
Federal Reserve Bank of Dallas President Robert Kaplan announced his retirement from the central bank just hours after another top official at the central bank announced he was stepping down amid controversy over personal trades they made while on the job.
Kaplan, a former Goldman Sachs executive, announced his resignation on Monday, citing fallout from a series of trades he made last year while the Fed embarked upon an expansive asset-buying program. The resignation comes the same day that Federal Reserve Bank of Boston President Eric Rosengren, who was also facing public scrutiny, announced his retirement for health reasons.
“The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy,” Kaplan said in a statement. “Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work.”
Kaplan reiterated that his personal trades did not violate Fed policies or the central bank’s ethical standards. His retirement from the central bank is effective on Oct. 8, and Rosengren will be departing the Fed on Friday.
***
Earlier this month, disclosures revealed that Kaplan executed high-value trades in large corporations such as Apple and Amazon.
The individual security holdings prompted Fed Chairman Jerome Powell to call for changes to the Fed’s rules during a press briefing last week. Powell said that the Fed has begun a “comprehensive review of the ethics rules around permissible financial holdings and activity by Fed officials.”
“We need to make changes, and we’re going to do that as a consequence of this,” the chairman said on Wednesday.
***
from article by Zachary Halaschak https://news.yahoo.com/second-fed-president-leaves-amid-204500090.html
Mon, September 27, 2021
Federal Reserve Bank of Dallas President Robert Kaplan announced his retirement from the central bank just hours after another top official at the central bank announced he was stepping down amid controversy over personal trades they made while on the job.
Kaplan, a former Goldman Sachs executive, announced his resignation on Monday, citing fallout from a series of trades he made last year while the Fed embarked upon an expansive asset-buying program. The resignation comes the same day that Federal Reserve Bank of Boston President Eric Rosengren, who was also facing public scrutiny, announced his retirement for health reasons.
“The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy,” Kaplan said in a statement. “Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work.”
Kaplan reiterated that his personal trades did not violate Fed policies or the central bank’s ethical standards. His retirement from the central bank is effective on Oct. 8, and Rosengren will be departing the Fed on Friday.
***
Earlier this month, disclosures revealed that Kaplan executed high-value trades in large corporations such as Apple and Amazon.
The individual security holdings prompted Fed Chairman Jerome Powell to call for changes to the Fed’s rules during a press briefing last week. Powell said that the Fed has begun a “comprehensive review of the ethics rules around permissible financial holdings and activity by Fed officials.”
“We need to make changes, and we’re going to do that as a consequence of this,” the chairman said on Wednesday.
***
Auto seat safety bill now before Congress may be in peril
Recent news suggests that a bill to improve auto seat safety may currently be in jeopardy because of Congressional wrangling. The article below is from some weeks ago and discusses the merits of the propsed legislation.
From article By Megan Towey, Kris Van Cleave
Updated on: April 26, 2021 / 7:09 PM / CBS News
Following a series of CBS News reports that revealed potential safety dangers in vehicle seats, Senators Ed Markey and Richard Blumenthal will reintroduce legislation that would require a new strength standard.
"Seatback strength standards have not been substantially updated since 1967, allowing thousands to be injured and killed when their car's front seats collapse after a crash," Markey, a Democrat from Massachusetts, told CBS News. "That's why I'm reintroducing legislation to require the modernization of our seatback safety standards moving forward. We must end these entirely unacceptable and preventable tragedies."
The Modernizing Seatback Safety Act would require automakers and the National Highway Traffic Safety Administration to strengthen seat standards within two years.
In a series of stories that began airing in 2015, CBS News revealed that when hit from behind, car front seats may break and their occupants can be propelled – forcefully – into the rear seats where children usually sit.
CBS News identified more than 100 people, mostly children, who were severely injured or killed in alleged seatback failures over the past 30 years. The number is likely higher: In 2016, then-NHTSA administrator Mark Rosekind acknowledged that such crashes were not closely tracked.
Crash tests have shown the risks associated with seatback failures for decades, with problems existing in many different car makes and models. Auto safety experts blame a seatback safety standard that dates back to the 1960s.
The cost to fix the problem could be small - as little as on a dollar or so per seat, according to a deposition with an auto company engineer reviewed by CBS News.
"It is the moral obligation of a society to use available, affordable, science-based solutions to limit risks that can kill or severely injure unsuspecting individuals," said Jason Levine, executive director of the Center for Auto Safety. "The Modernizing Seatback Safety Act can finally bring closure to an embarrassing half-century of an unwillingness to upgrade a safety standard that can be passed with the average dining room chair."
***
The measure on seat strength is one of four auto-safety bills Markey and Blumenthal are introducing Monday.
One would offer grants to states to use for notifying registered vehicle owners of safety recalls and establish annual report cards on how effectively automakers are completing open recalls. Another would require automakers to provide more information about incidents involving death or serious injuries and then have NHTSA make that data available to the public in a user-friendly format.
The third would require the Department of Transportation to study how driver-monitoring systems can prevent distraction and misuse of advanced driver assistance systems – including Tesla's Autopilot – and calls for regulations requiring the installation of driver-monitoring systems based on the agency's findings.
The Senators hope to include the package in President Biden's infrastructure bill.
See https://www.cbsnews.com/news/seatback-strength-legislation-reintroduced-after-cbs-news-investigation/
Recent news suggests that a bill to improve auto seat safety may currently be in jeopardy because of Congressional wrangling. The article below is from some weeks ago and discusses the merits of the propsed legislation.
From article By Megan Towey, Kris Van Cleave
Updated on: April 26, 2021 / 7:09 PM / CBS News
Following a series of CBS News reports that revealed potential safety dangers in vehicle seats, Senators Ed Markey and Richard Blumenthal will reintroduce legislation that would require a new strength standard.
"Seatback strength standards have not been substantially updated since 1967, allowing thousands to be injured and killed when their car's front seats collapse after a crash," Markey, a Democrat from Massachusetts, told CBS News. "That's why I'm reintroducing legislation to require the modernization of our seatback safety standards moving forward. We must end these entirely unacceptable and preventable tragedies."
The Modernizing Seatback Safety Act would require automakers and the National Highway Traffic Safety Administration to strengthen seat standards within two years.
In a series of stories that began airing in 2015, CBS News revealed that when hit from behind, car front seats may break and their occupants can be propelled – forcefully – into the rear seats where children usually sit.
CBS News identified more than 100 people, mostly children, who were severely injured or killed in alleged seatback failures over the past 30 years. The number is likely higher: In 2016, then-NHTSA administrator Mark Rosekind acknowledged that such crashes were not closely tracked.
Crash tests have shown the risks associated with seatback failures for decades, with problems existing in many different car makes and models. Auto safety experts blame a seatback safety standard that dates back to the 1960s.
The cost to fix the problem could be small - as little as on a dollar or so per seat, according to a deposition with an auto company engineer reviewed by CBS News.
"It is the moral obligation of a society to use available, affordable, science-based solutions to limit risks that can kill or severely injure unsuspecting individuals," said Jason Levine, executive director of the Center for Auto Safety. "The Modernizing Seatback Safety Act can finally bring closure to an embarrassing half-century of an unwillingness to upgrade a safety standard that can be passed with the average dining room chair."
***
The measure on seat strength is one of four auto-safety bills Markey and Blumenthal are introducing Monday.
One would offer grants to states to use for notifying registered vehicle owners of safety recalls and establish annual report cards on how effectively automakers are completing open recalls. Another would require automakers to provide more information about incidents involving death or serious injuries and then have NHTSA make that data available to the public in a user-friendly format.
The third would require the Department of Transportation to study how driver-monitoring systems can prevent distraction and misuse of advanced driver assistance systems – including Tesla's Autopilot – and calls for regulations requiring the installation of driver-monitoring systems based on the agency's findings.
The Senators hope to include the package in President Biden's infrastructure bill.
See https://www.cbsnews.com/news/seatback-strength-legislation-reintroduced-after-cbs-news-investigation/
New York and other states will be allowed to seek a nationwide disgorgement order based on the claim that Vyera Pharmaceuticals and its former chief executive Martin Shkreli participated in an anticompetitive scheme to maintain a price boost for the life-saving drug Daraprim
From the ruling by DENISE COTE, District Judge:
Defendants Vyera Pharmaceuticals, LLC and its parent company Phoenixus, AG (together, “Vyera”), Martin Shkreli, and
Kevin Mulleady have moved for partial summary judgment on the scope of the plaintiffs’ claim for disgorgement. They contend
that the seven State plaintiffs may only pursue such relief where the defendants’ net profits are tied to sales that have
victimized citizens of their States. The State plaintiffs have cross-moved for summary judgment and a preclusion order. For
the following reasons, the defendants’ motion is denied. The States’ cross-motion is granted.
The opinion can be read at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
From the ruling by DENISE COTE, District Judge:
Defendants Vyera Pharmaceuticals, LLC and its parent company Phoenixus, AG (together, “Vyera”), Martin Shkreli, and
Kevin Mulleady have moved for partial summary judgment on the scope of the plaintiffs’ claim for disgorgement. They contend
that the seven State plaintiffs may only pursue such relief where the defendants’ net profits are tied to sales that have
victimized citizens of their States. The State plaintiffs have cross-moved for summary judgment and a preclusion order. For
the following reasons, the defendants’ motion is denied. The States’ cross-motion is granted.
The opinion can be read at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
FTC Chair Kahn's recent memo to Staff and Commissioners
Viatris, Joe Manchin, and the problem with overseas production of generic pharmaceuticals
In an earlier posting we noted that although the Viatris plant in West Virginia has been making generic pharmaceuticals since 1965 it’s closed down and laid workers off -- moving manufacture to India and Australia. We pointed out the disturbing involvement of Senator Joe Manchin. Viatris was formed through a merger between two pharmaceutical companies, Mylan and Upjohn. Mylan’s chief executive, Manchin’s daughter Heather Bresch, got a $31 million payout as a result of the corporate consolidation before the new company set about cutting costs, including the closure of the Morgantown plant. Joseph Gouzd, president of United Steelworkers of America Local 8-957 and a worker at the plant, said that Viatris gave little reason for the closure except to say the company is looking to “maximize the best interests of the shareholders.” Investigative journalist Katherine Eban says moving pharmaceutical production overseas contradicts the recommendations of numerous reports that have found major safety lapses in drug manufacturing abroad, as well as concern from lawmakers about keeping a key industry within the United States. “This is pure insanity,” Eban says. “It seems like it is both pharmaceutical and national security suicide to close this plant.”
Now a new NYT article points out that when production of generics shifts overseas, it’s harder for the Food and Drug Administration to inspect factories: "Major companies have been caught faking and manipulating the data that is supposed to prove that drugs are effective and safe. Probable carcinogens have been discovered in the drug supply. During the pandemic, which caused several countries to ban the export of medical supplies, a new fear has arisen: that faraway factories might one day cut Americans off from their drugs. Dozens of lifesaving medications are made with ingredients no longer manufactured in the United States."
The new article reiterates the past promises by Presidents Donald Trump and Joe Biden to encourage more drug production on U.S. soil. But the Viatris experience suggests that these promises are not being fulfilled.
See https://www.nytimes.com/2021/09/18/opinion/drug-market-prescription-generic.html
In an earlier posting we noted that although the Viatris plant in West Virginia has been making generic pharmaceuticals since 1965 it’s closed down and laid workers off -- moving manufacture to India and Australia. We pointed out the disturbing involvement of Senator Joe Manchin. Viatris was formed through a merger between two pharmaceutical companies, Mylan and Upjohn. Mylan’s chief executive, Manchin’s daughter Heather Bresch, got a $31 million payout as a result of the corporate consolidation before the new company set about cutting costs, including the closure of the Morgantown plant. Joseph Gouzd, president of United Steelworkers of America Local 8-957 and a worker at the plant, said that Viatris gave little reason for the closure except to say the company is looking to “maximize the best interests of the shareholders.” Investigative journalist Katherine Eban says moving pharmaceutical production overseas contradicts the recommendations of numerous reports that have found major safety lapses in drug manufacturing abroad, as well as concern from lawmakers about keeping a key industry within the United States. “This is pure insanity,” Eban says. “It seems like it is both pharmaceutical and national security suicide to close this plant.”
Now a new NYT article points out that when production of generics shifts overseas, it’s harder for the Food and Drug Administration to inspect factories: "Major companies have been caught faking and manipulating the data that is supposed to prove that drugs are effective and safe. Probable carcinogens have been discovered in the drug supply. During the pandemic, which caused several countries to ban the export of medical supplies, a new fear has arisen: that faraway factories might one day cut Americans off from their drugs. Dozens of lifesaving medications are made with ingredients no longer manufactured in the United States."
The new article reiterates the past promises by Presidents Donald Trump and Joe Biden to encourage more drug production on U.S. soil. But the Viatris experience suggests that these promises are not being fulfilled.
See https://www.nytimes.com/2021/09/18/opinion/drug-market-prescription-generic.html
California lawmakers recently approved the Garment Worker Protection Act, which would eliminate the piece rate system and ensure workers are paid an hourly minimum wage.
The bill would also expand who is liable for stolen wages – meaning a brand like Charlotte Russe, for example, would share responsibility for paying out wage theft claims filed by workers who make their clothing in factories such as the ones in downtown LA. Right now, those claims are filed against the factories themselves but can languish for years before being paid out, if they ever are.
from Garment workers in America’s fashion capital may make just $6 an hour. A new law could change that (msn.com) https://www.msn.com/en-us/news/us/garment-workers-in-america-s-fashion-capital-may-make-just-6-an-hour-a-new-law-could-change-that/ar-AAOzWgP?ocid=msedgdhp&pc=U531
The bill would also expand who is liable for stolen wages – meaning a brand like Charlotte Russe, for example, would share responsibility for paying out wage theft claims filed by workers who make their clothing in factories such as the ones in downtown LA. Right now, those claims are filed against the factories themselves but can languish for years before being paid out, if they ever are.
from Garment workers in America’s fashion capital may make just $6 an hour. A new law could change that (msn.com) https://www.msn.com/en-us/news/us/garment-workers-in-america-s-fashion-capital-may-make-just-6-an-hour-a-new-law-could-change-that/ar-AAOzWgP?ocid=msedgdhp&pc=U531
SCOTUS BLOG's Amy Howe discusses the upcoming US Supreme Court term, including abortion and gun related issues
Amy Howe's interview on the weekend PBS Newshour discusses the upcoming US Supreme Court term, which is likely to include abortion and gun rights cases. Among other things, Amy Howe offers her expertise on questions such as the Court's use of the "shadow docket" in denying an emergency stay against the Texas law limiting abortions. She also discusses the impact of recent changes in the Court's membership.
See:
https://www.pbs.org/newshour/show/gun-laws-abortion-rights-upcoming-scotus-hearings-to-be-impacted-by-rbgs-death
Amy Howe's interview on the weekend PBS Newshour discusses the upcoming US Supreme Court term, which is likely to include abortion and gun rights cases. Among other things, Amy Howe offers her expertise on questions such as the Court's use of the "shadow docket" in denying an emergency stay against the Texas law limiting abortions. She also discusses the impact of recent changes in the Court's membership.
See:
https://www.pbs.org/newshour/show/gun-laws-abortion-rights-upcoming-scotus-hearings-to-be-impacted-by-rbgs-death
Abortion, the death penalty, and the shadow docket By Lee Kovarsky
on Sep 6, 2021 at 12:03 pm
FacebookLinkedInTwitterEmail
PrintFriendlyShareLee Kovarsky is the Bryant Smith chair in law and co-director of Capital Punishment Center at the University of Texas at Austin.
Most people following the litigation over S.B. 8 — the new Texas ban on nearly all abortions after the sixth week of pregnancy — have heard some version of the argument. The Supreme Court could neither enjoin the flagrantly unconstitutional abortion restrictions nor lift the circuit court’s unexplained order pausing lower-court litigation, the “rule-of-law story” goes, because the Supreme Court’s hands were tied. In this telling, the Supreme Court’s procedural doctrines required that it refuse emergency relief unless the party seeking it is reasonably certain to prevail in the litigation. And procedural uncertainties admittedly lurked. Sovereign immunity precluded suit against Texas itself, S.B. 8 privatized enforcement and circuit precedent foreclosed suits against state executive-branch officers, and there were lingering questions about whether the plaintiffs could sue the judicial personnel named in the complaint. But this ode to rule-of-law values sounds some pretty false notes.
The Supreme Court issued its S.B. 8 order on the so-called “shadow docket,” where it hands down orders and summary decisions that did not receive full briefing and oral argument. In the past several years — and especially in the past 18 months — the court has increasingly used its shadow docket to award emergency relief in politically charged cases. I have niche expertise in one category of shadow-docket activity: the death penalty. There were 13 federal executions during the last six months of the Trump administration, and the pertinent shadow-docket interventions disclose anything but a court abstaining in close cases.
I have written about the “Trump executions” at length elsewhere, and a little background is in order here. Before the summer of 2020, the federal government hadn’t executed anyone since 2003. President Donald Trump’s Justice Department decided to get the federal government back in the execution business, and it began announcing execution dates during the summer of 2019. The federal lethal-injection protocol called for the use of a single drug, pentobarbital, that was developed to euthanize animals. The first volley of planned executions took place in July 2020, with the possibility of a Trump-to-Biden transition looming six months later. There is usually 11th-hour litigation in the shadow of executions, and the relevant federal law ensures that the Supreme Court will almost always receive applications for execution stays (from prisoners) or applications to vacate them (from the government).
The Supreme Court granted emergency relief to the government, on the shadow docket and pursuant to the same norms about restricting relief to reasonably certain litigation winners, in seven of the 13 Trump execution cases. In each of these cases, the Supreme Court’s intervention overturned a lower-court disposition on a contested legal question. As a practical matter, the relief allowed the executions to go forward while the cases were pending, and courts dismissed the litigation as moot after the prisoners were dead. Let me tell you a bit more about how “certain” the government’s success was in those cases.
Start with Eighth Amendment litigation over the use of pentobarbital, which culminated in a shadow-docket order vacating a lower-court injunction affecting four of the 13 prisoners (Daniel Lee, Wesley Purkey, Dustin Honken, and Keith Nelson). In Barr v. Lee, the Supreme Court grounded its decision to vacate that injunction on an earlier case involving a materially different issue that the Supreme Court nonetheless seemed to read as a categorical rule that the Eighth Amendment permitted pentobarbital-only executions. Several months later, however, the U.S. Court of Appeals for the District of Columbia Circuit squarely held that a claimant could state an Eighth Amendment claim against such executions. The legal rule forming the basis for the Supreme Court’s intervention was anything but settled.
Next consider the Orlando Hall execution. Hall asserted that the use of un-prescribed pentobarbital violated the Food, Drug, and Cosmetic Act. The district court stayed his execution after a D.C. Circuit decision that such use of pentobarbital was in fact an FDCA violation. The Supreme Court vacated the stay. What bears emphasis is that the Supreme Court granted emergency relief on its shadow docket not just when the party seeking it had uncertain prospects for success, but when that party would almost certainly lose on the underlying legal question — and even though likelihood of success on the merits is supposed to be a necessary condition for such relief.
Perhaps the most shocking of all the shadow-docket orders was the last one, in the Dustin Higgs case. The federal death-penalty statute has a provision requiring that federal sentence implementation mimic that of the state in which the federal court sits. In situations where the federal court sits in a state that has abolished the death penalty, the statute directs the sentencer, at the time of sentence, to designate some other state for implementation-parity purposes. Higgs had been sentenced by the U.S. District Court for the District of Maryland in 2001, at a time when Maryland retained the death penalty, and so there was no other-state designation in the sentencing judgment. But Maryland abolished the death penalty in 2013; the implementation parity rule would thus have mooted the capital sentence.
At the very least, Higgs raised a novel question about how the statute should apply in such a case. As Higgs’ execution date approached — which also coincided with the very end of Trump’s term — the federal government rather sloppily (and tardily) asked that the non-designating judgment be amended or “supplemented” (whatever that means) so that a practicing state could be designated retroactively. The (exasperated) district judge held that he had no power to alter the judgment in that way, and the government appealed to the U.S. Court of Appeals for the 4th Circuit, which aggressively expedited the appellate calendar so that oral argument could take place on Jan. 22 (two days after President Joe Biden’s inauguration). Without offering any substantive reasoning, the Supreme Court used its shadow docket to vacate the lower-court stay, grant certiorari before judgment, summarily reverse on the merits, and order the lower courts to retroactively designate Indiana. I have been able to locate no comparable maneuver (a summary merits decision on a petition for certiorari before judgment) before or since, and neither has my colleague Professor Steve Vladeck, who meticulously tracks the court’s shadow-docket activity. (Vladeck also has argued persuasively that the Supreme Court’s handling of the Texas abortion law is inconsistent with its recent shadow-docket practice in another area: emergency requests related to religious liberty.)
I should mention that the Supreme Court’s criteria for adjudicating stays and those for adjudicating injunctions have some meaningful differences. There is express statutory authority for stays, whereas the authority for court injunctions traces to a more general authority specified in the All Writs Act. Those differences notwithstanding, both require the party seeking emergency relief to establish some elevated likelihood of prevailing on the merits alongside the injury justifying immediate intervention. Uncertainty, whether procedural or substantive, is supposed to be a powerful weight against shadow-docket relief.
The comparison between the Supreme Court’s federal-execution interventions and its S.B. 8 abstention exposes the problems with the rule-of-law story. The court’s treatment of the death-penalty litigation was less about the clear merits of the government’s claims than it was about the justices’ frustration with execution delays and their desire to prevent the Biden administration from influencing sentence implementation. (The Biden administration later declared an execution moratorium.) There is a reasonable debate to be had about whether considerations like those justify more aggressive shadow-docket intervention, and two wrongs don’t make a right. But nobody can reasonably argue that the court’s federal-execution interventions sided with a party that would clearly prevail on the underlying claims, at least based on existing law. The rule-of-law storytelling flooding cable news and social media is therefore farcical. The court refused to enjoin S.B. 8 because five justices chose not to; not because the modern law and norms of shadow-docket practice foreclosed it from doing so.
Posted in Featured, Emergency appeals and applications
on Sep 6, 2021 at 12:03 pm
FacebookLinkedInTwitterEmail
PrintFriendlyShareLee Kovarsky is the Bryant Smith chair in law and co-director of Capital Punishment Center at the University of Texas at Austin.
Most people following the litigation over S.B. 8 — the new Texas ban on nearly all abortions after the sixth week of pregnancy — have heard some version of the argument. The Supreme Court could neither enjoin the flagrantly unconstitutional abortion restrictions nor lift the circuit court’s unexplained order pausing lower-court litigation, the “rule-of-law story” goes, because the Supreme Court’s hands were tied. In this telling, the Supreme Court’s procedural doctrines required that it refuse emergency relief unless the party seeking it is reasonably certain to prevail in the litigation. And procedural uncertainties admittedly lurked. Sovereign immunity precluded suit against Texas itself, S.B. 8 privatized enforcement and circuit precedent foreclosed suits against state executive-branch officers, and there were lingering questions about whether the plaintiffs could sue the judicial personnel named in the complaint. But this ode to rule-of-law values sounds some pretty false notes.
The Supreme Court issued its S.B. 8 order on the so-called “shadow docket,” where it hands down orders and summary decisions that did not receive full briefing and oral argument. In the past several years — and especially in the past 18 months — the court has increasingly used its shadow docket to award emergency relief in politically charged cases. I have niche expertise in one category of shadow-docket activity: the death penalty. There were 13 federal executions during the last six months of the Trump administration, and the pertinent shadow-docket interventions disclose anything but a court abstaining in close cases.
I have written about the “Trump executions” at length elsewhere, and a little background is in order here. Before the summer of 2020, the federal government hadn’t executed anyone since 2003. President Donald Trump’s Justice Department decided to get the federal government back in the execution business, and it began announcing execution dates during the summer of 2019. The federal lethal-injection protocol called for the use of a single drug, pentobarbital, that was developed to euthanize animals. The first volley of planned executions took place in July 2020, with the possibility of a Trump-to-Biden transition looming six months later. There is usually 11th-hour litigation in the shadow of executions, and the relevant federal law ensures that the Supreme Court will almost always receive applications for execution stays (from prisoners) or applications to vacate them (from the government).
The Supreme Court granted emergency relief to the government, on the shadow docket and pursuant to the same norms about restricting relief to reasonably certain litigation winners, in seven of the 13 Trump execution cases. In each of these cases, the Supreme Court’s intervention overturned a lower-court disposition on a contested legal question. As a practical matter, the relief allowed the executions to go forward while the cases were pending, and courts dismissed the litigation as moot after the prisoners were dead. Let me tell you a bit more about how “certain” the government’s success was in those cases.
Start with Eighth Amendment litigation over the use of pentobarbital, which culminated in a shadow-docket order vacating a lower-court injunction affecting four of the 13 prisoners (Daniel Lee, Wesley Purkey, Dustin Honken, and Keith Nelson). In Barr v. Lee, the Supreme Court grounded its decision to vacate that injunction on an earlier case involving a materially different issue that the Supreme Court nonetheless seemed to read as a categorical rule that the Eighth Amendment permitted pentobarbital-only executions. Several months later, however, the U.S. Court of Appeals for the District of Columbia Circuit squarely held that a claimant could state an Eighth Amendment claim against such executions. The legal rule forming the basis for the Supreme Court’s intervention was anything but settled.
Next consider the Orlando Hall execution. Hall asserted that the use of un-prescribed pentobarbital violated the Food, Drug, and Cosmetic Act. The district court stayed his execution after a D.C. Circuit decision that such use of pentobarbital was in fact an FDCA violation. The Supreme Court vacated the stay. What bears emphasis is that the Supreme Court granted emergency relief on its shadow docket not just when the party seeking it had uncertain prospects for success, but when that party would almost certainly lose on the underlying legal question — and even though likelihood of success on the merits is supposed to be a necessary condition for such relief.
Perhaps the most shocking of all the shadow-docket orders was the last one, in the Dustin Higgs case. The federal death-penalty statute has a provision requiring that federal sentence implementation mimic that of the state in which the federal court sits. In situations where the federal court sits in a state that has abolished the death penalty, the statute directs the sentencer, at the time of sentence, to designate some other state for implementation-parity purposes. Higgs had been sentenced by the U.S. District Court for the District of Maryland in 2001, at a time when Maryland retained the death penalty, and so there was no other-state designation in the sentencing judgment. But Maryland abolished the death penalty in 2013; the implementation parity rule would thus have mooted the capital sentence.
At the very least, Higgs raised a novel question about how the statute should apply in such a case. As Higgs’ execution date approached — which also coincided with the very end of Trump’s term — the federal government rather sloppily (and tardily) asked that the non-designating judgment be amended or “supplemented” (whatever that means) so that a practicing state could be designated retroactively. The (exasperated) district judge held that he had no power to alter the judgment in that way, and the government appealed to the U.S. Court of Appeals for the 4th Circuit, which aggressively expedited the appellate calendar so that oral argument could take place on Jan. 22 (two days after President Joe Biden’s inauguration). Without offering any substantive reasoning, the Supreme Court used its shadow docket to vacate the lower-court stay, grant certiorari before judgment, summarily reverse on the merits, and order the lower courts to retroactively designate Indiana. I have been able to locate no comparable maneuver (a summary merits decision on a petition for certiorari before judgment) before or since, and neither has my colleague Professor Steve Vladeck, who meticulously tracks the court’s shadow-docket activity. (Vladeck also has argued persuasively that the Supreme Court’s handling of the Texas abortion law is inconsistent with its recent shadow-docket practice in another area: emergency requests related to religious liberty.)
I should mention that the Supreme Court’s criteria for adjudicating stays and those for adjudicating injunctions have some meaningful differences. There is express statutory authority for stays, whereas the authority for court injunctions traces to a more general authority specified in the All Writs Act. Those differences notwithstanding, both require the party seeking emergency relief to establish some elevated likelihood of prevailing on the merits alongside the injury justifying immediate intervention. Uncertainty, whether procedural or substantive, is supposed to be a powerful weight against shadow-docket relief.
The comparison between the Supreme Court’s federal-execution interventions and its S.B. 8 abstention exposes the problems with the rule-of-law story. The court’s treatment of the death-penalty litigation was less about the clear merits of the government’s claims than it was about the justices’ frustration with execution delays and their desire to prevent the Biden administration from influencing sentence implementation. (The Biden administration later declared an execution moratorium.) There is a reasonable debate to be had about whether considerations like those justify more aggressive shadow-docket intervention, and two wrongs don’t make a right. But nobody can reasonably argue that the court’s federal-execution interventions sided with a party that would clearly prevail on the underlying claims, at least based on existing law. The rule-of-law storytelling flooding cable news and social media is therefore farcical. The court refused to enjoin S.B. 8 because five justices chose not to; not because the modern law and norms of shadow-docket practice foreclosed it from doing so.
Posted in Featured, Emergency appeals and applications
Are gun rights vulnerable to the Texas approach to abortion rights?
From the NYT (by law professors Jon Michaels and David Noll):
"Perhaps though, what’s good for the goose will be good for the gander, and blue states will use these same tools [as the Texas legislature] to suppress rights they dislike. Massachusetts could authorize citizens to seek damages from houses of worship that refuse to follow Covid safety protocols; California could give citizens the right to sue neighbors who recklessly keep guns in their homes."
DAR Comment: Do you think that the US Supreme Court would use a shadow docket ruling to allow a California vigilante law against guns to go forward as it has the Texas vigilante law against abortion rights? If your reaction to this thought experiment is no, then you could be thinking that the US Supreme Court decision is ideological and political, not legal. If yes, you may have confidence that the US Supreme Court will follow the law consistently without regard to whether the substantive effect on Constitutional rights pleases "the left" or "the right."
See https://www.nytimes.com/2021/09/04/opinion/texas-abortion-law.html
From the NYT (by law professors Jon Michaels and David Noll):
"Perhaps though, what’s good for the goose will be good for the gander, and blue states will use these same tools [as the Texas legislature] to suppress rights they dislike. Massachusetts could authorize citizens to seek damages from houses of worship that refuse to follow Covid safety protocols; California could give citizens the right to sue neighbors who recklessly keep guns in their homes."
DAR Comment: Do you think that the US Supreme Court would use a shadow docket ruling to allow a California vigilante law against guns to go forward as it has the Texas vigilante law against abortion rights? If your reaction to this thought experiment is no, then you could be thinking that the US Supreme Court decision is ideological and political, not legal. If yes, you may have confidence that the US Supreme Court will follow the law consistently without regard to whether the substantive effect on Constitutional rights pleases "the left" or "the right."
See https://www.nytimes.com/2021/09/04/opinion/texas-abortion-law.html
AAI Podcasts: What’s the Beef? How the Beef Packing Cartel Hurts Producers and Consumers and How Independent Cattle Producers and Processors Can Help Restore Competition and Choice
July 13, 2021 | Diana L. Moss , Mike Callicrate , Patrick Robinette
Food & Agriculture
See https://www.antitrustinstitute.org/work-products/type/podcasts/
From the AAI website: In this podcast, AAI President Diana Moss sits down with two leaders in the independent sector to discuss the fallout from decades of massive consolidation and rising concentration in beef packing. Her guests, Mike Callicrate and Patrick Robinette, run innovative, independent business operations in two different parts of the US. They discuss the state of competition in U.S. beef packing, which is dominated by four packing firms that control over 80% of the market. Next, they turn to problems of market access for smaller ranchers and processors and deceptive labeling that deprives consumers of informed choices. The conversation reveals that an industrial food system with little competition packs significant inefficiency and susceptibility to shocks like COVID-19. On the other hand, smaller operations provide needed competition and resiliency in the beef supply. Moss, Callicrate, and Robinette close with the importance of stronger antitrust enforcement in the beef packing sector and USDA initiatives that promote competition, price transparency, and the importance of alternative supply systems.
Related AAI Work
Public Comments and TestimonyAAI Encourages USDA to Take More Aggressive Role in Crafting Competition Policies to Combat Concentration and Supply Chain Instability in Food and Agriculture https://www.antitrustinstitute.org/work-product/aai-encourages-usda-to-take-more-aggressive-role-in-crafting-competition-policies-to-combat-concentration-and-supply-chain-instability-in-food-and-agriculture/
June 21, 2021 | Diana L. Moss
July 13, 2021 | Diana L. Moss , Mike Callicrate , Patrick Robinette
Food & Agriculture
See https://www.antitrustinstitute.org/work-products/type/podcasts/
From the AAI website: In this podcast, AAI President Diana Moss sits down with two leaders in the independent sector to discuss the fallout from decades of massive consolidation and rising concentration in beef packing. Her guests, Mike Callicrate and Patrick Robinette, run innovative, independent business operations in two different parts of the US. They discuss the state of competition in U.S. beef packing, which is dominated by four packing firms that control over 80% of the market. Next, they turn to problems of market access for smaller ranchers and processors and deceptive labeling that deprives consumers of informed choices. The conversation reveals that an industrial food system with little competition packs significant inefficiency and susceptibility to shocks like COVID-19. On the other hand, smaller operations provide needed competition and resiliency in the beef supply. Moss, Callicrate, and Robinette close with the importance of stronger antitrust enforcement in the beef packing sector and USDA initiatives that promote competition, price transparency, and the importance of alternative supply systems.
Related AAI Work
Public Comments and TestimonyAAI Encourages USDA to Take More Aggressive Role in Crafting Competition Policies to Combat Concentration and Supply Chain Instability in Food and Agriculture https://www.antitrustinstitute.org/work-product/aai-encourages-usda-to-take-more-aggressive-role-in-crafting-competition-policies-to-combat-concentration-and-supply-chain-instability-in-food-and-agriculture/
June 21, 2021 | Diana L. Moss
Who loves the Apple settlement with App Developers? Not everyone.
Apple has reached a settlement with a group of app developers represented by the Hagens, Berman law firm. Apple's description of the settlement is that it would allow developers to urge customers to pay them outside their iPhone apps. The New York Times explained that "The move would allow app makers to avoid paying Apple a commission on their sales and could appease developers and regulators concerned with its control over mobile apps, including strict policies designed to force developers to pay it a cut of their sales." https://www.nytimes.com/2021/08/26/technology/apple-settles-app-store-lawsuit.html
The Hagens, Berman press release says that the settlement will result in the creation of a $100 million Small Developer Assistance Fund and important changes to App Store policies and practices. Also, "small and other U.S. iOS developers will benefit from changes to App Store policies and practices as they relate to App Store search results, app and in-app product price points, appeals from rejections of apps and transparency. Small U.S. iOS developers also will benefit from a pledge that for at least three years following court approval of the settlement, Apple will not raise the 15% commission rate that applies for those participating in its Small Business Program." And, "Apple will permit all U.S. iOS developers to communicate with their customers outside their apps about purchasing methods other than Apple’s in-app purchase (IAP) system. Apple also will remove the prohibition against U.S. developers using information obtained within their apps to communicate with their customers outside their apps about the use of purchasing methods other than IAP, subject to consumer consent and opt-out safeguards." https://www.hbsslaw.com/press/apple-ios-app-developers/us-ios-developers-to-benefit-from-100-million-apple-small-developer-assistance-fund-and-changes-to-app-store-policies-in-developer-antitrust-class-action-settlement
Not everyone thinks the settlement is great news for app developers. David Heinemeier Hansson writes that "Apple's new settlement is a corrupt joke." https://world.hey.com/dhh/apple-s-new-settlement-is-a-corrupt-joke-bd8b9c1e
Here is part of what he says:
This new Apple settlement with a group of class-action legal vultures . . . [is] a pointless settlement that reaffirm existing provisions and then asks for a couple of [trivial improvements resembling a change to] cornflower blue icons. Let's take it step by step again:
1) The plaintiffs – here being the actual lawyers in the class-action proceeding, not the interests of the developers they supposedly represent – have justified their pursuit for loot mainly by getting Apple to reaffirm existing policies. Like having them affirm that "at the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics like downloads, star ratings, ...". So part of this settlement is that Apple says it'll continue to do search like it's done so far, and that it won't make it worse for users and developers by corrupting it with self-dealings and sold preferences, but only for the next three years? What a concession to extract!
It keeps going on like this, such as the pointless concession that pricing can now be $40.99 and $41.99, in addition to the normal $39.99 and $44.99, or any other number out of a predetermined 500 price points instead of the previous 100. Talk about the many hues of cornflower blue.
But it gets worse, because the trophy of this settlement, as presented in the press, is supposedly that developers can now tell their customers where to buy services outside the app. Except no, that's not actually what's happening! Apple is simply "clarifying" that companies can send an email to their customers, if they've gotten permission to do so, on an opt-in basis. That email may include information about how to buy outside the app.
So the steering provisions of the App Store, that developers are not allowed to tell users inside their app or on the signup screen about other purchasing choices than IAP – the only places that actually matter! – is being cemented with this "clarification". It draws a thicker line, asserts Apple's right to steer in the first place, and offers the meaningless concession of opt-in email, which was something developers had already been doing.
2) The legal vultures running this class-action suit knew that all these clarifications and agreements were cornflower blue requests from the outset. The point of the negotiation was never to extract any meaningful change of policy or behavior, but to provide cover for the process, such that they could claim to have performed their judicial duties to the underlying plaintiffs (developers). While walking away with $30M in fees that they took from an Apple-administered charity provision that's part of the deal.
3) The cynicism of this performance drips in every other sentence of Apple's press release about the matter. Like the aforementioned sentence about how "At the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics". Yes, you can have your search results in cornflower blue. Because they already were! But also, we may change the color in three years. Of course you legal vultures will be long gone by then. You won't care, we don't care, this is all a performance of compliance!
4) Since the entire game was rigged for the outcome of having the class-action vultures taking a third cut of whatever settlement sum is included from the outset, Apple knew this too. Negotiating around the specific but meaningless points of the deal was just a way to justify that final outcome: Apple pays these lawyers $30m, such that they can print a press release that gullible journalists will try to spin as having some larger meaning, because that story travels better.
5) The only human response is to show our blood-soaked teeth in disdain for such a blatantly corrupt deal. Developers have suffered a litany of indignities under Apple's monopoly power over the years, and now they'll suffer a few more. The twist being that they now come from the hands of a group of legal vultures pretending to advocate on developer's behalf but are really just paid to collude with Apple.
If the developer community had any hopes riding on this class-action lawsuit, this outcome would have been a dagger in the heart. Far worse than if no suit has been undertaken at all. If anything, this settlement cements the tremendous power that Apple has and wields. Even when a class-action lawsuit gets underway, it can be bought with bromides and bribes.
A question about the settlement is how it affects ongoing litigation between app developer Epic and Apple, if at all. Epic and Apple are waiting for a decision from federal judge Yvonne Gonzalez Rogers of U.S. District Court for the Northern District of California.in a separate lawsuit that was filed by Epic Games. Epic is the maker of the popular game Fortnite. Epic wants to force Apple to allow app developers to avoid App Store commissions altogether.
Apple has reached a settlement with a group of app developers represented by the Hagens, Berman law firm. Apple's description of the settlement is that it would allow developers to urge customers to pay them outside their iPhone apps. The New York Times explained that "The move would allow app makers to avoid paying Apple a commission on their sales and could appease developers and regulators concerned with its control over mobile apps, including strict policies designed to force developers to pay it a cut of their sales." https://www.nytimes.com/2021/08/26/technology/apple-settles-app-store-lawsuit.html
The Hagens, Berman press release says that the settlement will result in the creation of a $100 million Small Developer Assistance Fund and important changes to App Store policies and practices. Also, "small and other U.S. iOS developers will benefit from changes to App Store policies and practices as they relate to App Store search results, app and in-app product price points, appeals from rejections of apps and transparency. Small U.S. iOS developers also will benefit from a pledge that for at least three years following court approval of the settlement, Apple will not raise the 15% commission rate that applies for those participating in its Small Business Program." And, "Apple will permit all U.S. iOS developers to communicate with their customers outside their apps about purchasing methods other than Apple’s in-app purchase (IAP) system. Apple also will remove the prohibition against U.S. developers using information obtained within their apps to communicate with their customers outside their apps about the use of purchasing methods other than IAP, subject to consumer consent and opt-out safeguards." https://www.hbsslaw.com/press/apple-ios-app-developers/us-ios-developers-to-benefit-from-100-million-apple-small-developer-assistance-fund-and-changes-to-app-store-policies-in-developer-antitrust-class-action-settlement
Not everyone thinks the settlement is great news for app developers. David Heinemeier Hansson writes that "Apple's new settlement is a corrupt joke." https://world.hey.com/dhh/apple-s-new-settlement-is-a-corrupt-joke-bd8b9c1e
Here is part of what he says:
This new Apple settlement with a group of class-action legal vultures . . . [is] a pointless settlement that reaffirm existing provisions and then asks for a couple of [trivial improvements resembling a change to] cornflower blue icons. Let's take it step by step again:
1) The plaintiffs – here being the actual lawyers in the class-action proceeding, not the interests of the developers they supposedly represent – have justified their pursuit for loot mainly by getting Apple to reaffirm existing policies. Like having them affirm that "at the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics like downloads, star ratings, ...". So part of this settlement is that Apple says it'll continue to do search like it's done so far, and that it won't make it worse for users and developers by corrupting it with self-dealings and sold preferences, but only for the next three years? What a concession to extract!
It keeps going on like this, such as the pointless concession that pricing can now be $40.99 and $41.99, in addition to the normal $39.99 and $44.99, or any other number out of a predetermined 500 price points instead of the previous 100. Talk about the many hues of cornflower blue.
But it gets worse, because the trophy of this settlement, as presented in the press, is supposedly that developers can now tell their customers where to buy services outside the app. Except no, that's not actually what's happening! Apple is simply "clarifying" that companies can send an email to their customers, if they've gotten permission to do so, on an opt-in basis. That email may include information about how to buy outside the app.
So the steering provisions of the App Store, that developers are not allowed to tell users inside their app or on the signup screen about other purchasing choices than IAP – the only places that actually matter! – is being cemented with this "clarification". It draws a thicker line, asserts Apple's right to steer in the first place, and offers the meaningless concession of opt-in email, which was something developers had already been doing.
2) The legal vultures running this class-action suit knew that all these clarifications and agreements were cornflower blue requests from the outset. The point of the negotiation was never to extract any meaningful change of policy or behavior, but to provide cover for the process, such that they could claim to have performed their judicial duties to the underlying plaintiffs (developers). While walking away with $30M in fees that they took from an Apple-administered charity provision that's part of the deal.
3) The cynicism of this performance drips in every other sentence of Apple's press release about the matter. Like the aforementioned sentence about how "At the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics". Yes, you can have your search results in cornflower blue. Because they already were! But also, we may change the color in three years. Of course you legal vultures will be long gone by then. You won't care, we don't care, this is all a performance of compliance!
4) Since the entire game was rigged for the outcome of having the class-action vultures taking a third cut of whatever settlement sum is included from the outset, Apple knew this too. Negotiating around the specific but meaningless points of the deal was just a way to justify that final outcome: Apple pays these lawyers $30m, such that they can print a press release that gullible journalists will try to spin as having some larger meaning, because that story travels better.
5) The only human response is to show our blood-soaked teeth in disdain for such a blatantly corrupt deal. Developers have suffered a litany of indignities under Apple's monopoly power over the years, and now they'll suffer a few more. The twist being that they now come from the hands of a group of legal vultures pretending to advocate on developer's behalf but are really just paid to collude with Apple.
If the developer community had any hopes riding on this class-action lawsuit, this outcome would have been a dagger in the heart. Far worse than if no suit has been undertaken at all. If anything, this settlement cements the tremendous power that Apple has and wields. Even when a class-action lawsuit gets underway, it can be bought with bromides and bribes.
A question about the settlement is how it affects ongoing litigation between app developer Epic and Apple, if at all. Epic and Apple are waiting for a decision from federal judge Yvonne Gonzalez Rogers of U.S. District Court for the Northern District of California.in a separate lawsuit that was filed by Epic Games. Epic is the maker of the popular game Fortnite. Epic wants to force Apple to allow app developers to avoid App Store commissions altogether.
Elizabeth Holmes and her company Theranos: The Boies law firm and lessons about aggressive lawyering
As the trial of Elizabeth Holmes for promoting a sham blood analysis device begins, it is timely to revisit John Carreyrou’s book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf). In that book Wall Street Journal reporter John Carreyrou reviewed his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
As the trial of Elizabeth Holmes for promoting a sham blood analysis device begins, it is timely to revisit John Carreyrou’s book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf). In that book Wall Street Journal reporter John Carreyrou reviewed his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
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Why Federal Antitrust Enforcers Should Pursue a Policy of Blocking More Harmful Mergers
July 29, 2021 | Diana L. Moss Excerpt from AAI website: This week, the Antitrust Division of the U.S. Department of Justice (DOJ) forced global insurance behemoths Aon and Willis Towers Watson to abandon their proposed mega-merger. The deal would have reduced competition in insurance brokerage markets from three to only two players, harming American businesses and consumers through higher prices and lower quality for health and retirement benefits products and services. This bold and needed move is a credit to the experienced, acting leadership at the Antitrust Division. It clearly recognizes the trend of declining competition, rising concentration, and growing evidence of harm from decades of weak enforcement. AAI encourages Federal Trade Commission (FTC) Chair, Lina Khan, and nominee for Assistant Attorney General, Jonathan Kanter, to adopt a policy of moving to block more mergers, rather than settling them with remedies such as divestitures and conduct requirements and prohibitions. https://www.antitrustinstitute.org/work-product/why-federal-antitrust-enforcers-should-pursue-a-policy-of-blocking-more-harmful-mergers/ |
Mylan and Upjohn merger result: Joe Manchin scandal -- pharma jobs from WV to India, $31M for family
- The story in Vanity Fair: "'We Can't Reach Him': Joe Manchin Is Ghosting the West Virginia Union Workers Whose Jobs His Daughter -- https://www.vanityfair.com/news/2021/07/joe-manchin-is-ghosting-the-west-virginia-union-workers
- From "Democracy Now" https://www.democracynow.org/2021/7/28/joe_manchin_west_virginia_heather_bresch
ACLED on state “Anti-protest” Legislation
Since June 2020, state officials have introduced at least 100 proposals that would restrict the right to free assembly (PEN America, 13 May 2021). Republican lawmakers have proposed 81 bills in over 30 states during the 2021 legislative session alone, more than double the number introduced in any other year, according to the International Center for Not-for-Profit Law (New York Times, 21 April 2021; International Center for Not-for-Profit Law, 22 April 2021). These bills have become law in states like Oklahoma and Florida, with new legislation increasing the penalties for “unlawful protesting” and “granting immunity to drivers whose vehicles strike and injure protesters in public streets” (New York Times, 21 April 2021).
Although officials have cited instances of protest violence over the past year to justify this new legislative push — with Governor Ron DeSantis labelling Florida’s law “the strongest anti-looting, anti-rioting, pro-law-enforcement piece of legislation in the country” (New York Times, 21 April 2021) — most of these states have experienced low levels of violent or destructive demonstration activity (see map below). ACLED data show that, on average, the states in which strict “anti-protest” laws have been proposed have the same rate of peaceful protests as states that have not pursued such legislation, meaning that violent demonstrations do not feature more prominently in the former than the latter. States like Florida and Oklahoma, which have promulgated some of the most restrictive new laws, have actually seen a lower proportion of demonstrations involving violent or destructive activity than most other states in the country.
excerpt from A Year of Racial Justice Protests: Key Trends in Demonstrations Supporting the BLM Movement | ACLED (acleddata.com)
The popular press covers antitrust reform
A recent New York Times article says that “Outside groups and ideological allies of the administration warn that if Mr. Biden hopes to truly follow in the footsteps of his antitrust idols, Presidents Theodore Roosevelt and Franklin D. Roosevelt, he will need to push for sweeping legislation to grant new powers to federal regulators, particularly in the tech sector. The core federal antitrust laws, which were written more than a century ago, did not envision the kind of commerce that exists today, where big companies may offer customers low prices but at the expense of competition.The administration has quietly supported legislation working its way through the House.” https://www.nytimes.com/2021/07/24/business/biden-antitrust-amazon-google.html
A dedicated reader of this blog [dcconsumerrightscolaition.org] points out a WSJ article by Greg Ip [https://www.wsj.com/articles/antitrusts-new-mission-preserving-democracy-not-efficiency-11625670424 -- pay wall] that provides a succinct, if opinionated, summary of the quandary that faces advocates of antitrust reform. In recent decades the antitrust laws have failed to discourage market dominance by a series of gigantic companies. Notwithstanding the comment in the New York Times, in some areas –agriculture for example – large companies mean elevated prices for consumers. In other areas, companies like Google and Facebook offer low prices to consumers, but arguably squelch competition and facilitate disinformation. Many blame the failures of antitrust enforcement on the idea that prosecutors and courts blindly followed the lead of Judge Robert Bork and narrowly applied a vision of a consumer welfare standard focused largely on lprotecting low consumer prices. Greg Ip points out that many antitrust reformers draw on the broader ideas of Louis Brandeis, who believed that vigorous government action against large companies enlivened democracy.
Greg Ip notes that Brandeis “feared that as the corporations became large and powerful, they took on a life of their own, becoming increasingly insensitive to humanity’s wants and fears,” according to Columbia University law professor and National Economic Council member Tim Wu’s 2008 book [https://globalreports.columbia.edu/books/the-curse-of-bigness/]
Alternatives for reforming the antitrust laws include legislation that would correct perceived shortcomings in court decisions narrowly applying Robert Bork style thinking and narrowly applying consumer welfare principles focused largely on consumer prices. Professor Andy Gavil wrote a brief article on antitrust reform that focused on monopolization law and suggested a relatively simple approach to law reform. See https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/ Gavil said:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of [Sherman Act] Section 2. Such a modern framework could:
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
It is relevant to the Gavil approach that Greg Ip writes that “A federal judge dismissed a lawsuit by the FTC and most state attorneys-general for failing to establish that Facebook Inc. is a monopoly. Legislation proposed by Democrats in the House of Representatives would lower the bar for winning such suits, but their fate is unclear.”
Another and more complex approach to antitrust reform is what might be called an “all of government” approach, where behaviors of large companies, like Facebook, Google, and Amazon, is addressed by an array of new laws and regulations that draw on the Brandeisian impulse to enhance efficiency and support democratic values. It may be difficult to argue against increased efficiency and support for democracy, but Greg Ip worries that the effort to promote new regulation and laws may be difficult. He argues that a (possibly improved version) of the traditional consumer welfare standard is “less at risk of politicization than [new laws based on] beliefs about what’s good or bad for democracy.”
It should be noted that Greg Ip is not at all supportive of the “big is bad” approach to antitrust enforcement. He is biased in favor of big. He writes: “Barring firms from getting big could deprive consumers of the benefits that only big firms can deliver.” That bias would seem to affect his judgment on matters of law reform.
A recent New York Times article says that “Outside groups and ideological allies of the administration warn that if Mr. Biden hopes to truly follow in the footsteps of his antitrust idols, Presidents Theodore Roosevelt and Franklin D. Roosevelt, he will need to push for sweeping legislation to grant new powers to federal regulators, particularly in the tech sector. The core federal antitrust laws, which were written more than a century ago, did not envision the kind of commerce that exists today, where big companies may offer customers low prices but at the expense of competition.The administration has quietly supported legislation working its way through the House.” https://www.nytimes.com/2021/07/24/business/biden-antitrust-amazon-google.html
A dedicated reader of this blog [dcconsumerrightscolaition.org] points out a WSJ article by Greg Ip [https://www.wsj.com/articles/antitrusts-new-mission-preserving-democracy-not-efficiency-11625670424 -- pay wall] that provides a succinct, if opinionated, summary of the quandary that faces advocates of antitrust reform. In recent decades the antitrust laws have failed to discourage market dominance by a series of gigantic companies. Notwithstanding the comment in the New York Times, in some areas –agriculture for example – large companies mean elevated prices for consumers. In other areas, companies like Google and Facebook offer low prices to consumers, but arguably squelch competition and facilitate disinformation. Many blame the failures of antitrust enforcement on the idea that prosecutors and courts blindly followed the lead of Judge Robert Bork and narrowly applied a vision of a consumer welfare standard focused largely on lprotecting low consumer prices. Greg Ip points out that many antitrust reformers draw on the broader ideas of Louis Brandeis, who believed that vigorous government action against large companies enlivened democracy.
Greg Ip notes that Brandeis “feared that as the corporations became large and powerful, they took on a life of their own, becoming increasingly insensitive to humanity’s wants and fears,” according to Columbia University law professor and National Economic Council member Tim Wu’s 2008 book [https://globalreports.columbia.edu/books/the-curse-of-bigness/]
Alternatives for reforming the antitrust laws include legislation that would correct perceived shortcomings in court decisions narrowly applying Robert Bork style thinking and narrowly applying consumer welfare principles focused largely on consumer prices. Professor Andy Gavil wrote a brief article on antitrust reform that focused on monopolization law and suggested a relatively simple approach to law reform. See https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/ Gavil said:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of [Sherman Act] Section 2. Such a modern framework could:
- Embrace today’s structured approach to the rule of reason, as did the Court in Microsoft
- Fully integrate a more sophisticated understanding of exclusionary conduct, market power, and anti-competitive effects.
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
It is relevant to the Gavil approach that Greg Ip writes that “A federal judge dismissed a lawsuit by the FTC and most state attorneys-general for failing to establish that Facebook Inc. is a monopoly. Legislation proposed by Democrats in the House of Representatives would lower the bar for winning such suits, but their fate is unclear.”
Another and more complex approach to antitrust reform is what might be called an “all of government” approach, where behaviors of large companies, like Facebook, Google, and Amazon, is addressed by an array of new laws and regulations that draw on the Brandeisian impulse to enhance efficiency and support democratic values. It may be difficult to argue against increased efficiency and support for democracy, but Greg Ip worries that the effort to promote new regulation and laws may be difficult. He argues that a (possibly improved version) of the traditional consumer welfare standard is “less at risk of politicization than [new laws based on] beliefs about what’s good or bad for democracy.”
It should be noted that Greg Ip is not at all supportive of the “big is bad” approach to antitrust enforcement. He is biased in favor of big. He writes: “Barring firms from getting big could deprive consumers of the benefits that only big firms can deliver.” That bias would seem to affect his judgment on matters of law reform.
DC AG RACINE: Addressing Violent Crime in the District
July 23, 2021
Gun violence and violent crime are impacting the entire District, and residents deserve a thoughtful and long-term response.
Last Friday, six-year-old Niyah Courtney was shot and killed. The next day, tens of thousands of fans at Nationals Park dove for cover thinking that they were in the middle of an active shooter situation. Yesterday, residents near Logan Circle ran for cover as shots were fired and two men were shot.
These are appalling and gut-wrenching events. My heart goes out to the victims and loved ones of those directly impacted by these incidents and the community members shaken by the trauma of this violence in our city.
Gun violence is hurting our whole community, ripping apart families, and creating fear and trauma. No one wants to fear for their children’s lives as they go to school or walk down the street. But in parts of the District, that is a daily reality. Violence has long plagued neighborhoods that too often get overlooked—particularly low-income communities of color. District residents deserve to feel safe in their homes and their neighborhoods, and when they are walking down the street with their families.
It is our job as elected leaders to do everything we can to stop gun violence and violent crime, prevent more senseless deaths, and make every part of the District safer. I may not have all the answers, but my office is doing everything we can to stop the gun violence and violent crime in our community now and in the future.
Our city needs a proactive, comprehensive plan. It needs a clear, consistent, and all-hands-on-deck approach. Some of these steps include action my office is already taking, and some are bigger than my office alone. But we must work together to make meaningful progress.
First, we need aggressive gun safety reform. There are too many guns flooding our city, and there are too many loopholes that enable the floodgates to remain open. We need federal legislation that closes these loopholes, mandates background checks, and helps stop the flow of guns across our country and into our city. My office is fighting the prevalence of illegal ghost guns in the District, which lack serial numbers and can’t be traced. We are suing Polymer80—a leading manufacturer of ghost guns in the United States and the company that manufactured the majority of deadly ghost guns recovered in DC—for illegally advertising and selling them to DC consumers. And we have advocated for strong federal regulation of these firearms.
Second, we must fully invest in community-driven, evidence-based violence interruption programs. We know based on research and data that empowering communities to interrupt violence, intervening with those most likely to commit or be victims of violence, and changing norms around violence can have a long-lasting impact. That’s why we launched Cure the Streets in several neighborhoods that have historically experienced some of the highest rates of gun violence. This public health approach to treating violence is working in these neighborhoods. We’re asking the DC Council to fund an expansion of Cure the Streets so it can operate in more neighborhoods. We’re grateful that the Council took the first steps to expanding the program by adding one additional site in its budget vote earlier this week. But more neighborhoods would benefit from a site. There are also other important violence interruption programs operating around the city that deserve support and investment as well.
Third, we need to hold individuals accountable when they commit crimes and change their behavior so they are less likely to reoffend in the future. As the prosecutor for crime perpetrated by young people in the District, when a case is referred to my office for prosecution, we assess the needs of the victim and the impact of the conduct on public safety. Then, we work to achieve a resolution that supports victims while doing what needs to be done to change the behavior of the youth. This approach helps reduce recidivism and makes our communities safer. We do this so they do not become future violent offenders and instead become contributing members of our communities. And, when appropriate, we prosecute.
Finally, we need to address the root causes of crime in our communities, including poverty, hopelessness, and trauma – to break the cycle of violence. This is a public health crisis as much as it is a public safety crisis. We know there are two Washington, DCs – and our communities east of the river, where most of the gun violence is happening, need investment and support. But too often they are not even part of the conversation. Only when we address the challenges these communities face every day can we make real progress now and in the future.
These are critical steps, but they are not the only solutions. We need more ideas for making the District a safer, more equitable place. We must be thoughtful about our efforts and careful to avoid reactionary tough-on-crime approaches that we know do not actually improve public safety.
Violent crime is on the rise across the country. The District is not immune from it. But that doesn’t excuse us from tackling our problem locally. Unfortunately, the response to gun violence, especially when it happens in Black and brown communities, follows a familiar pattern: thoughts and prayers, vigils, and calls for reform, and then a return to the status quo. All of us have a role to play in stopping this violence, and I will continue to work with the mayor, our law enforcement partners, the Council, advocates, and others to marshal resources, ingenuity, and bold ideas to bring about change.
Read my full statement from earlier this week on my new Medium page.[https://medium.com/@AttorneyGeneralKarlRacine/the-district-needs-a-clear-and-comprehensive-plan-to-combat-violent-crime-bb82ae5c0280]
Karl A. Racine
Attorney General
The Viatris plant in West Virginia has been making generic pharmaceuticals since 1965 – but it’s closing down and laying workers off -- moving manufacture to India and Australia
Michael Sainato
Sun 20 Jun 2021 03.00 EDT “Disbelief. Distraught and traumatized.”
Just some of the words the United Steelworkers Local 8-957 president, Joe Gouzd, used to describe how he and hundreds of other workers felt after their 56-year-old pharmaceutical plant in West Virginia was shut down, sending between 1,500 and 2,000 jobs to India and Australia.
The Viatris plant at Chestnut Ridge, just outside Morgantown, has been in operation since 1965, providing well-paid jobs in one of America’s poorer states. And the timing of the closure has workers furious.
“This is the last generic pharmaceutical manufacturing giant in the US, and executives are offshoring our jobs to India for more profits. What is this going to do to us if we have another pandemic?” said Gouzd.
It is also causing a political row, with Congress accused of inaction and workers denouncing profits before people.
“When is this going to end, losing American jobs? Every politician you hear, part of their political platform is: jobs, domestic jobs, domestic manufacturing, bringing jobs and manufacturing back to America,” said Gouzd.
The offshoring of jobs has taken on new political weight since Donald Trump was elected. But his record in office was just as poor as his predecessors’.
While the US does not track all jobs lost to offshoring, the labor department does count the number of workers who petition for help under a federal law designed to aid those harmed by trade.
According to Reuters, during the four years of Trump, those petitions covered 202,151 workers whose jobs moved overseas, only slightly less than the 209,735 workers covered under Obama.
Biden has proposed taxing companies that offshore jobs, but it remains to be seen whether he will be successful. Viatris may prove his first big test.
DAR comment: The article is clear on the point that the political rhetoric of repatriating jobs to the U.S. rings hollow when large companies offshore jobs in the interests of improved profits. DR
Michael Sainato
Sun 20 Jun 2021 03.00 EDT “Disbelief. Distraught and traumatized.”
Just some of the words the United Steelworkers Local 8-957 president, Joe Gouzd, used to describe how he and hundreds of other workers felt after their 56-year-old pharmaceutical plant in West Virginia was shut down, sending between 1,500 and 2,000 jobs to India and Australia.
The Viatris plant at Chestnut Ridge, just outside Morgantown, has been in operation since 1965, providing well-paid jobs in one of America’s poorer states. And the timing of the closure has workers furious.
“This is the last generic pharmaceutical manufacturing giant in the US, and executives are offshoring our jobs to India for more profits. What is this going to do to us if we have another pandemic?” said Gouzd.
It is also causing a political row, with Congress accused of inaction and workers denouncing profits before people.
“When is this going to end, losing American jobs? Every politician you hear, part of their political platform is: jobs, domestic jobs, domestic manufacturing, bringing jobs and manufacturing back to America,” said Gouzd.
The offshoring of jobs has taken on new political weight since Donald Trump was elected. But his record in office was just as poor as his predecessors’.
While the US does not track all jobs lost to offshoring, the labor department does count the number of workers who petition for help under a federal law designed to aid those harmed by trade.
According to Reuters, during the four years of Trump, those petitions covered 202,151 workers whose jobs moved overseas, only slightly less than the 209,735 workers covered under Obama.
Biden has proposed taxing companies that offshore jobs, but it remains to be seen whether he will be successful. Viatris may prove his first big test.
DAR comment: The article is clear on the point that the political rhetoric of repatriating jobs to the U.S. rings hollow when large companies offshore jobs in the interests of improved profits. DR
U.S. Equal Employment Opportunity Commission
guidance on employer mandates on vaccinations
(from www.eeoc.gov/newsroom/eeoc-issues-updated-covid-19-technical-assistance)
- Federal EEO laws do not prevent an employer from requiring all employees physically entering the workplace to be vaccinated for COVID-19, so long as employers comply with the reasonable accommodation provisions of the ADA and Title VII of the Civil Rights Act of 1964 and other EEO considerations. Other laws, not in EEOC’s jurisdiction, may place additional restrictions on employers. From an EEO perspective, employers should keep in mind that because some individuals or demographic groups may face greater barriers to receiving a COVID-19 vaccination than others, some employees may be more likely to be negatively impacted by a vaccination requirement.
- Federal EEO laws do not prevent or limit employers from offering incentives to employees to voluntarily provide documentation or other confirmation of vaccination obtained from a third party (not the employer) in the community, such as a pharmacy, personal health care provider, or public clinic. If employers choose to obtain vaccination information from their employees, employers must keep vaccination information confidential pursuant to the ADA.
- Employers that are administering vaccines to their employees may offer incentives for employees to be vaccinated, as long as the incentives are not coercive. Because vaccinations require employees to answer pre-vaccination disability-related screening questions, a very large incentive could make employees feel pressured to disclose protected medical information.
- Employers may provide employees and their family members with information to educate them about COVID-19 vaccines and raise awareness about the benefits of vaccination. The technical assistance highlights federal government resources available to those seeking more information about how to get vaccinated.
ep. Ken Buck (Colo.), the top Republican on the House Judiciary antitrust subcommittee, is forming a new “Freedom From Big Tech Caucus”
He will be joined by some other GOP lawmakers who supported antitrust bills advanced by the committee last month.
Rep. Lance Gooden (R-Texas) will serve as co-chairman of the caucus. Other founding members of the caucus include Reps. Madison Cawthorn (R-N.C.), Burgess Owens (R-Utah) and Paul Gosar (R-Ariz.).
The caucus will aim to unite Republicans in Congress to “rein in Big Tech” through “legislation, education, and awareness.”
The announcement outlines a focus on antitrust reform, including restoring “the free and dynamic digital economy,” promoting “competition and innovation,” and supporting small businesses.
Additionally, the caucus said it will aim to protect privacy and data rights, protect children from harmful content online and “end political censorship.”
“Big Tech has abused its market power for decades, and Congress must act to hold these companies accountable and preserve the free market, promote competition and innovation, protect the freedom of speech, and foster a thriving digital economy,” Buck said in a statement.
The formation of the caucus comes as rifts within the House GOP deepen amid the push to pass the six antitrust bills the Judiciary Committee advanced that aim to reform antitrust power and target tech giants.
Rep. Jim Jordan (R-Ohio), ranking member of the Judiciary Committee, opposed the bills, and House Minority Leader Kevin McCarthy (R-Calif.) has also voiced criticism of the legislative package.
Amid the backlash, Jordan last week unveiled his own strategy for taking on Big Tech companies. Jordan’s agenda differed from the bills put forward by the committee, notably by calling for the Federal Trade Commission to be stripped of its antitrust enforcement authority.
Democrats face their own challenges on the bills, especially among a group of California lawmakers who have opposed the bills that target the companies based in their Bay Area districts.
From: https://thehill.com/policy/technology/563344-top-house-antitrust-republican-forms-freedom-from-big-tech-caucus
He will be joined by some other GOP lawmakers who supported antitrust bills advanced by the committee last month.
Rep. Lance Gooden (R-Texas) will serve as co-chairman of the caucus. Other founding members of the caucus include Reps. Madison Cawthorn (R-N.C.), Burgess Owens (R-Utah) and Paul Gosar (R-Ariz.).
The caucus will aim to unite Republicans in Congress to “rein in Big Tech” through “legislation, education, and awareness.”
The announcement outlines a focus on antitrust reform, including restoring “the free and dynamic digital economy,” promoting “competition and innovation,” and supporting small businesses.
Additionally, the caucus said it will aim to protect privacy and data rights, protect children from harmful content online and “end political censorship.”
“Big Tech has abused its market power for decades, and Congress must act to hold these companies accountable and preserve the free market, promote competition and innovation, protect the freedom of speech, and foster a thriving digital economy,” Buck said in a statement.
The formation of the caucus comes as rifts within the House GOP deepen amid the push to pass the six antitrust bills the Judiciary Committee advanced that aim to reform antitrust power and target tech giants.
Rep. Jim Jordan (R-Ohio), ranking member of the Judiciary Committee, opposed the bills, and House Minority Leader Kevin McCarthy (R-Calif.) has also voiced criticism of the legislative package.
Amid the backlash, Jordan last week unveiled his own strategy for taking on Big Tech companies. Jordan’s agenda differed from the bills put forward by the committee, notably by calling for the Federal Trade Commission to be stripped of its antitrust enforcement authority.
Democrats face their own challenges on the bills, especially among a group of California lawmakers who have opposed the bills that target the companies based in their Bay Area districts.
From: https://thehill.com/policy/technology/563344-top-house-antitrust-republican-forms-freedom-from-big-tech-caucus
Protecting the Independence of Public Broadcasting, by Don Allen Resnikoff
https://www.mediaethicsmagazine.com/index.php/browse-back-issues/216-spring-2021-vol-32-no-2/3999344-protecting-the-independence-of-public-broadcasting
Comment by Don Allen Resnikoff:
In my recent article in Media Ethics Magazine [see citation above], I say that U.S. publicly funded broadcasting should be protected from being turned into a partisan or ideological tool. The most effective protection for the independence of public broadcasting is the support of U.S. Presidents, and a Supreme Court that does not unduly limit the permissible delegation of authority to government agencies.
Protecting the autonomy of public broadcasters is complicated by a U.S. Supreme Court decision that reflects a shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the case of Seila Law LLC v. Consumer Financial Protection Bureau the Supreme Court determined that the structure of the Consumer Financial Protection Bureau (CFPB), with a single director who could be removed from office only “for cause,” violated the requirements of the Constitution for the separation of powers. The Court explained, in its 5-4 decision, that, as a general matter, leaders of federal agencies serve at the discretion of the President. The President can fire them at his/her discretion.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the established idea that Congress has the power to allow agencies to operate independently of the President. Harvard Law professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” And, of course, public broadcasting.
In a recent opinion issued shortly before publication of my Media Ethics article, Collins et al. v. Yellen, et al., 594 U.S. ____ (2021), the U.S. Supreme Court confirmed its adherence to the principles of the Seila case concerning the independence of government agencies. While the Court reiterated the idea that certain agencies may retain independence because of special circumstances, it decided the Collins case in a way that suggests a possible lack of Court flexibility in responding to the special circumstances of public broadcasting that support agency independence.
Note: My shorter related article on protecting the independence of public broadcasting previously appeared in the DC Bar Washington Lawyer Magazine
Don Allen Resnikoff
https://www.mediaethicsmagazine.com/index.php/browse-back-issues/216-spring-2021-vol-32-no-2/3999344-protecting-the-independence-of-public-broadcasting
Comment by Don Allen Resnikoff:
In my recent article in Media Ethics Magazine [see citation above], I say that U.S. publicly funded broadcasting should be protected from being turned into a partisan or ideological tool. The most effective protection for the independence of public broadcasting is the support of U.S. Presidents, and a Supreme Court that does not unduly limit the permissible delegation of authority to government agencies.
Protecting the autonomy of public broadcasters is complicated by a U.S. Supreme Court decision that reflects a shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the case of Seila Law LLC v. Consumer Financial Protection Bureau the Supreme Court determined that the structure of the Consumer Financial Protection Bureau (CFPB), with a single director who could be removed from office only “for cause,” violated the requirements of the Constitution for the separation of powers. The Court explained, in its 5-4 decision, that, as a general matter, leaders of federal agencies serve at the discretion of the President. The President can fire them at his/her discretion.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the established idea that Congress has the power to allow agencies to operate independently of the President. Harvard Law professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” And, of course, public broadcasting.
In a recent opinion issued shortly before publication of my Media Ethics article, Collins et al. v. Yellen, et al., 594 U.S. ____ (2021), the U.S. Supreme Court confirmed its adherence to the principles of the Seila case concerning the independence of government agencies. While the Court reiterated the idea that certain agencies may retain independence because of special circumstances, it decided the Collins case in a way that suggests a possible lack of Court flexibility in responding to the special circumstances of public broadcasting that support agency independence.
Note: My shorter related article on protecting the independence of public broadcasting previously appeared in the DC Bar Washington Lawyer Magazine
Don Allen Resnikoff
Picadio on the 2nd Amendment,
and the true history of militias and guns
Anthony Picadio’s thoughtful article in the July, 2021 Pennsylvania Bar Association Quarterly explains that in the near future the Supreme Court will address the gun rights case New York State Rifle & Pistol Association v. Corlett. This case involves a Constitutional Second Amendment challenge to New York State’s concealed carry law.
Author Picadio reminds us that the U.S. Supreme Court’s Heller case held in 2008, by a 5-4 vote, that the Second Amendment protects an individual’s right to possess a firearm, unconnected to service in a militia. Justice Antonin Scalia wrote the majority opinion in Heller. The opinion reflects Scalia’s dedication to an “originalist” style of Constitutional interpretation, the ostensible goal of which is a careful and deferential approach to the Constitution’s language as it was understood at the time of ratification.
Picadio’s article discusses the views of the three new U.S. Supreme Court Justices, Gorsuch, Kavanaugh and Coney-Barrett. They are all avowed originalists and apparent supporters of an expansive view of personal gun rights.
Picadio argues, among other things, that originalist Constitutional interpretation has not lived up to its promise of neutral, predictable decisions unaffected by a justice’s personal views. Picadio shows how originalism has increased the level of politicization in our judicial system. He writes:
Perhaps the most pernicious effect of originalism has been the politicization of history itself. We now have the situation where a one-vote majority Supreme Court opinion [in Heller] has decided our history. Does it no longer matter what history scholars say about the history of gun regulation in 18th Century England and early America? Does the concept of stare decisis foreclose consideration of further scholarly research? Just posing these questions shows how preposterous it is for a court to re solve, as a matter of law, disputed and contested historical issues.
What is the history of 18th Century gun regulation that Picadio believes has been obscured? A main aspect is that gun regulation was closely related to and supportive of oppression of black Americans. Following is an excerpt from his article on that particular point [footnotes omitted]:
Scalia’s idea that the Second Amendment was not understood as connecting gun ownership to service in a militia is not persuasive. His statement that another reason for the Second Amendment was to protect gun ownership/use for self-defense, is just wrong. To believe that, one would have to believe that James Madison, who sat on the Virginia committee which specifically rejected what Scalia called a Second Amendment analogue [that did not discriminate against blacks], and who was conscious of his state’s history of denying arms to free blacks, had a complete change of heart and drafted a Second Amendment which he knew would conflict with state laws such as Virginia’s [which limited gun ownership by blacks].The more likely conclusion is that Madison wrote the militia clause with the understanding that it would limit the interpretation of the operative clause and that was surely the understanding of those in the slave states which ratified the Second Amendment. Only by limiting the right to bear arms to members of all white militias could Madison ensure that guns would not be available to free blacks.
To be clear, the points discussed here are just a part of Anthony Picadio’s discussion of what lies ahead in the U.S. Supreme Court’s consideration of Second Amendment issues.
NOTE: Picadio’s article will also appear in the Transpartisan Review at: transpartisanreview.org
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
The challenges to new FTC Chair Khan in plain sight
From https://newsupdate.uk/one-of-big-techs-biggest-critics-is-now-its-regulator/
“She brings to the job what I would call the boldest vision for the agency in its history,” William Kovacic, a former chairman of the agency, said of her approach to competition law. “So in that respect, she is a potentially transformative figure.”
The question is how much she will be able to accomplish.
Her fast ascent from researcher to leader of a large federal agency underscores the growing concerns about the power of the big tech companies — and big business in general — in Washington. In her new job, she will command more than 1,000 investigators, lawyers and economists who are responsible for policing the American economy.
Her reach will extend far beyond the tech giants and the antitrust legal critiques where she made her name. The F.T.C. investigates unfair or deceptive practices by companies in addition to antitrust violations. This year alone, it has challenged the merger of two cement producers in Pennsylvania, cracked down on unsupported statements about treatments for Covid-19 and reached a deal with two liquor companies over a merger it said would hurt competition for cheap sparkling wine.
But Ms. Khan will also confront her share of limits. In order to create new rules or take major actions against companies, she will need to persuade at least two of the four other commissioners to agree with her. She will also need to make decisions that can hold up in the courts, which have tended to push back against aggressive antitrust enforcement.
“If you want your vision to endure,” Mr. Kovacic said, “you have to change law and policy, and you can’t do that by yourself.”
From https://newsupdate.uk/one-of-big-techs-biggest-critics-is-now-its-regulator/
“She brings to the job what I would call the boldest vision for the agency in its history,” William Kovacic, a former chairman of the agency, said of her approach to competition law. “So in that respect, she is a potentially transformative figure.”
The question is how much she will be able to accomplish.
Her fast ascent from researcher to leader of a large federal agency underscores the growing concerns about the power of the big tech companies — and big business in general — in Washington. In her new job, she will command more than 1,000 investigators, lawyers and economists who are responsible for policing the American economy.
Her reach will extend far beyond the tech giants and the antitrust legal critiques where she made her name. The F.T.C. investigates unfair or deceptive practices by companies in addition to antitrust violations. This year alone, it has challenged the merger of two cement producers in Pennsylvania, cracked down on unsupported statements about treatments for Covid-19 and reached a deal with two liquor companies over a merger it said would hurt competition for cheap sparkling wine.
But Ms. Khan will also confront her share of limits. In order to create new rules or take major actions against companies, she will need to persuade at least two of the four other commissioners to agree with her. She will also need to make decisions that can hold up in the courts, which have tended to push back against aggressive antitrust enforcement.
“If you want your vision to endure,” Mr. Kovacic said, “you have to change law and policy, and you can’t do that by yourself.”
NJ Governor Murphy Signs Landmark Legislation to Permanently Establish the Community College Opportunity Grant Program
02/26/2021
New Law Will Continue to Guarantee Tuition-Free Community College Education to More than 50,000 New Jersey Students Each Academic Year
JERSEY CITY – Fulfilling his promise to make tuition-free community college a reality, Governor Phil Murphy today signed A4410, permanently establishing the Community College Opportunity Grant Program (CCOG), which will allow qualified students to attend any New Jersey community college without tuition or educational fees.
“For far too long, higher education has been out of reach for countless New Jerseyans due to its high cost,” said Governor Murphy. “Today’s bill signing underscores our continued commitment to college affordability, ensuring that our young people and working adults have the opportunity to earn post-secondary degrees and advance their promising careers.”
“Today represents a huge win for college affordability and a transformative moment in our state’s history. In the years to come, CCOG will continue offering thousands more eligible students equitable access to a college education for free,” said Dr. Brian Bridges, Secretary of Higher Education. “To emerge stronger and fairer from the COVID-19 pandemic, we are investing in future generations today by expanding affordable options to ensure students’ lifelong success.”
“New Jersey now sends a clear message: county college is tuition-free for students with family incomes of $65,000 or below,” said David Socolow, Executive Director of the New Jersey Higher Education Student Assistance Authority (HESAA). “Governor Murphy has enabled HESAA to back up that promise by filling students’ remaining financial aid gaps with more than 25,000 Community College Opportunity Grants since the spring 2019 semester. The impact of this commitment reaches still further, by making an up-front, tuition-free price guarantee that enables tens of thousands of additional students to focus on their postsecondary education without concern about paying the tuition sticker price. Many students can now consider enrolling in college with full confidence that their entire county college tuition will be covered by the State of New Jersey. By raising awareness that college is more affordable, we can encourage more students to pursue courses of study that will enhance their lives and careers here in the Garden State.”
CCOG, which will be administered by the Higher Education Student Assistance Authority (HESAA), will provide last-dollar grants to eligible county college students for those tuition costs and fees not already covered by any other State, federal, and institutional need-based grants and merit scholarships. Students with adjusted gross incomes of $65,000 or less will be eligible to receive this financial grant for a total of five (5) semesters. This legislation also directs the Legislature to appropriate funding for the “Student Success Incentive” to the Office of the Secretary of Higher Education, for distribution to each county college. This funding will be used to support outreach and student success initiatives to further the goals of the CCOG grant program.
From https://www.nj.gov/governor/news/news/562021/20210226a.shtml
DAR Comment: When I attended New Jersey's Rutgers University some years ago, the tuition and room and board were not free, but close to it. My family had no money to contribute, but with a small home town newspaper scholarship and part time work I lived comfortably at college, and graduated without debt. I later attended law school on a partial scholarship. As a consequence of the opportunities extended to me I have enjoyed an interesting legal career, lived comfortably, and provided a comfortable upbringing for my children. I've attended reunions at Rutgers where I've chatted with others from poor families who were able to pursue satisfying careers because of the minimal tuition and room and board costs they experienced at Rutgers. In recent years opportunities for excellent and low-cost college education have melted away for students from families with small financial resources--costs for tuition and room and board at Rutgers have increased dramatically. The New Jersey initiative, while limited to community colleges, is a welcome step to restoring advanced education opportunities for students from poor families.
02/26/2021
New Law Will Continue to Guarantee Tuition-Free Community College Education to More than 50,000 New Jersey Students Each Academic Year
JERSEY CITY – Fulfilling his promise to make tuition-free community college a reality, Governor Phil Murphy today signed A4410, permanently establishing the Community College Opportunity Grant Program (CCOG), which will allow qualified students to attend any New Jersey community college without tuition or educational fees.
“For far too long, higher education has been out of reach for countless New Jerseyans due to its high cost,” said Governor Murphy. “Today’s bill signing underscores our continued commitment to college affordability, ensuring that our young people and working adults have the opportunity to earn post-secondary degrees and advance their promising careers.”
“Today represents a huge win for college affordability and a transformative moment in our state’s history. In the years to come, CCOG will continue offering thousands more eligible students equitable access to a college education for free,” said Dr. Brian Bridges, Secretary of Higher Education. “To emerge stronger and fairer from the COVID-19 pandemic, we are investing in future generations today by expanding affordable options to ensure students’ lifelong success.”
“New Jersey now sends a clear message: county college is tuition-free for students with family incomes of $65,000 or below,” said David Socolow, Executive Director of the New Jersey Higher Education Student Assistance Authority (HESAA). “Governor Murphy has enabled HESAA to back up that promise by filling students’ remaining financial aid gaps with more than 25,000 Community College Opportunity Grants since the spring 2019 semester. The impact of this commitment reaches still further, by making an up-front, tuition-free price guarantee that enables tens of thousands of additional students to focus on their postsecondary education without concern about paying the tuition sticker price. Many students can now consider enrolling in college with full confidence that their entire county college tuition will be covered by the State of New Jersey. By raising awareness that college is more affordable, we can encourage more students to pursue courses of study that will enhance their lives and careers here in the Garden State.”
CCOG, which will be administered by the Higher Education Student Assistance Authority (HESAA), will provide last-dollar grants to eligible county college students for those tuition costs and fees not already covered by any other State, federal, and institutional need-based grants and merit scholarships. Students with adjusted gross incomes of $65,000 or less will be eligible to receive this financial grant for a total of five (5) semesters. This legislation also directs the Legislature to appropriate funding for the “Student Success Incentive” to the Office of the Secretary of Higher Education, for distribution to each county college. This funding will be used to support outreach and student success initiatives to further the goals of the CCOG grant program.
From https://www.nj.gov/governor/news/news/562021/20210226a.shtml
DAR Comment: When I attended New Jersey's Rutgers University some years ago, the tuition and room and board were not free, but close to it. My family had no money to contribute, but with a small home town newspaper scholarship and part time work I lived comfortably at college, and graduated without debt. I later attended law school on a partial scholarship. As a consequence of the opportunities extended to me I have enjoyed an interesting legal career, lived comfortably, and provided a comfortable upbringing for my children. I've attended reunions at Rutgers where I've chatted with others from poor families who were able to pursue satisfying careers because of the minimal tuition and room and board costs they experienced at Rutgers. In recent years opportunities for excellent and low-cost college education have melted away for students from families with small financial resources--costs for tuition and room and board at Rutgers have increased dramatically. The New Jersey initiative, while limited to community colleges, is a welcome step to restoring advanced education opportunities for students from poor families.
Book review by Don Allen Resnikoff
The Twilight of Democracy: The Seductive Lure of Authoritarianism
Anne Applebaum. Doubleday (224p) 2020
Anne Applebaum’s book The Twilight of Democracy describes how a significant number of well-educated and sophisticated people in countries around the world are supporting anti-democratic movements and opposing democracy. Instead, they support autocracy. The reasoning of such people is not ideology so much as support for the status quo, a continuation of a social hierarchy where the established insider group is preserved, and groups perceived as outsiders are quashed.
Applebaum makes subordinate but important points about the role of false narratives in advancing anti-democratic movements. Often the false narratives used by anti-democratic movements involve conspiracy theories, where people perceived as outsiders are accused of conspiring against the established insider group. False narratives are a particularly interesting phenomena because they are, Applebaum argues, relevant even in countries like the U.S., where responsible journalists can present the truth about false narratives.
A question raised by the false narratives story is what journalists and ordinary citizens can do to counter false narratives. In a world where the media and citizens sometimes isolate themselves in “echo chambers” of limited information, simply presenting the truth may not be enough.
Turning to Applebaum’s stories, she tells us that when Poland’s right-wing Law and Justice Party gained political control in 2015, it took over the state’s public radio and TV outlets. The new government fired established reporters and replaced them with right-wing political loyalists.
Applebaum reports that the state public broadcaster programming became “straightforward ruling party propaganda” and “lies.” There were “twisted news reports” and “extensive vendettas against people and organizations whom the ruling party didn’t like.” In Poland the tradition of privately operated broadcasting was weak, so state control of the public broadcasting gave the government a very powerful voice.
Applebaum reports that the state broadcaster’s vendettas had lethal effects. On one occasion the state broadcaster’s persistent (and, according to Applebaum, incorrect and unfair) attacks on a town’s mayor inspired a deranged person to kill the mayor.
In her book, and in a Washington Post Op-Ed, Applebaum tells how the Polish government concocted a conspiracy theory that had great political benefits to the right-wing government, and that achieved acceptance among the Polish people because of Polish government control of broadcasting.[i] She offers the story as a warning to U.S. citizens about the path for an autocratic government in the United States. Applebaum’s intention is to provide a preview of possible bad political developments in the United States – the growth of anti-democratic movements.
The lesson Anne Applebaum offers is that propagation of false conspiratorial narratives provides groundwork for undermining the rule of law. In conspiracy theories the conspirators are characterized as evil, allowing the anti-democratic forces to argue that extra-legal and autocratic strategies to crush them are appropriate. Applebaum believes that such autocratic strategies and related opposition to the rule of law are a threat in the United States
The genesis of the conspiracy story pressed by the right-wing Polish government was the crash of a plane that had carried the Polish president, Lech Kaczynski, and other high level officials. Several dozen senior military figures and politicians were on the plane. All died.
The president’s twin brother, Jaroslaw Kaczynski, began to promote a false conspiracy theory. At the core of the conspiracy idea was the thought that the crash was not an accident, but the work of secret forces, particularly elite groups manipulated by foreigners. The alleged “conspirators” were “left wing” people with ties to Western democracies.
Applebaum reports that the use of the concocted conspiracy theory was a successful political strategy. It propelled the right-wing nationalist-populist party, Law and Justice, to political successes.
The conspiracy theory about the plane crash was plainly false, according to Applebaum. Applebaum says that the truth is that within hours of the crash, forensic experts were on the ground. They immediately obtained the black boxes and transcribed them meticulously. The cockpit tape can be heard online, and it is strong evidence, in Applebaum’s view. “The president was late; . . . When Russian air traffic controllers wanted to divert the plane because of heavy fog, he did not agree. The chief of the Air Force sat in the cockpit during the final minutes of the flight and pushed the pilots to land: ‘Be bold, you’ll make it,’ he told them. According to the official report, written by the country’s top aviation experts, the plane hit a tree, then the ground, and then broke up.”[ii]
It is significant that the ability of the right-wing Polish government to successfully promote a false narrative of a conspiracy of foreign-influenced left-wing forces depended not only on the government’s control of government-run broadcasting, but also on lack of alternate information sources. The Polish government wielded effective autocratic control over all dissemination of information. That is different than the situation in the United States, where there are multiple and sometimes competing source of information.
Despite the differences between Poland and the U.S. with regard to journalistic freedom, Anne Applebaum’s message is clear. Autocratic government tendencies are aided by use of fake narratives about political enemies. That is true even in the United States, where there is alternate media that is independent of government and can report the facts.
The political harm that can be caused in the United States by false conspiratorial narratives is clear, according to Anne Applebaum: undermining democracy and the rule of law.
i https://www.washingtonpost.com/opinions/global-opinions/in-poland-a-preview-of-what-trump-could-do-to-america/2016/09/19/71515d02-7e86-11e6-8d13-d7c704ef9fd9_story.html
[ii] ibid
The Twilight of Democracy: The Seductive Lure of Authoritarianism
Anne Applebaum. Doubleday (224p) 2020
Anne Applebaum’s book The Twilight of Democracy describes how a significant number of well-educated and sophisticated people in countries around the world are supporting anti-democratic movements and opposing democracy. Instead, they support autocracy. The reasoning of such people is not ideology so much as support for the status quo, a continuation of a social hierarchy where the established insider group is preserved, and groups perceived as outsiders are quashed.
Applebaum makes subordinate but important points about the role of false narratives in advancing anti-democratic movements. Often the false narratives used by anti-democratic movements involve conspiracy theories, where people perceived as outsiders are accused of conspiring against the established insider group. False narratives are a particularly interesting phenomena because they are, Applebaum argues, relevant even in countries like the U.S., where responsible journalists can present the truth about false narratives.
A question raised by the false narratives story is what journalists and ordinary citizens can do to counter false narratives. In a world where the media and citizens sometimes isolate themselves in “echo chambers” of limited information, simply presenting the truth may not be enough.
Turning to Applebaum’s stories, she tells us that when Poland’s right-wing Law and Justice Party gained political control in 2015, it took over the state’s public radio and TV outlets. The new government fired established reporters and replaced them with right-wing political loyalists.
Applebaum reports that the state public broadcaster programming became “straightforward ruling party propaganda” and “lies.” There were “twisted news reports” and “extensive vendettas against people and organizations whom the ruling party didn’t like.” In Poland the tradition of privately operated broadcasting was weak, so state control of the public broadcasting gave the government a very powerful voice.
Applebaum reports that the state broadcaster’s vendettas had lethal effects. On one occasion the state broadcaster’s persistent (and, according to Applebaum, incorrect and unfair) attacks on a town’s mayor inspired a deranged person to kill the mayor.
In her book, and in a Washington Post Op-Ed, Applebaum tells how the Polish government concocted a conspiracy theory that had great political benefits to the right-wing government, and that achieved acceptance among the Polish people because of Polish government control of broadcasting.[i] She offers the story as a warning to U.S. citizens about the path for an autocratic government in the United States. Applebaum’s intention is to provide a preview of possible bad political developments in the United States – the growth of anti-democratic movements.
The lesson Anne Applebaum offers is that propagation of false conspiratorial narratives provides groundwork for undermining the rule of law. In conspiracy theories the conspirators are characterized as evil, allowing the anti-democratic forces to argue that extra-legal and autocratic strategies to crush them are appropriate. Applebaum believes that such autocratic strategies and related opposition to the rule of law are a threat in the United States
The genesis of the conspiracy story pressed by the right-wing Polish government was the crash of a plane that had carried the Polish president, Lech Kaczynski, and other high level officials. Several dozen senior military figures and politicians were on the plane. All died.
The president’s twin brother, Jaroslaw Kaczynski, began to promote a false conspiracy theory. At the core of the conspiracy idea was the thought that the crash was not an accident, but the work of secret forces, particularly elite groups manipulated by foreigners. The alleged “conspirators” were “left wing” people with ties to Western democracies.
Applebaum reports that the use of the concocted conspiracy theory was a successful political strategy. It propelled the right-wing nationalist-populist party, Law and Justice, to political successes.
The conspiracy theory about the plane crash was plainly false, according to Applebaum. Applebaum says that the truth is that within hours of the crash, forensic experts were on the ground. They immediately obtained the black boxes and transcribed them meticulously. The cockpit tape can be heard online, and it is strong evidence, in Applebaum’s view. “The president was late; . . . When Russian air traffic controllers wanted to divert the plane because of heavy fog, he did not agree. The chief of the Air Force sat in the cockpit during the final minutes of the flight and pushed the pilots to land: ‘Be bold, you’ll make it,’ he told them. According to the official report, written by the country’s top aviation experts, the plane hit a tree, then the ground, and then broke up.”[ii]
It is significant that the ability of the right-wing Polish government to successfully promote a false narrative of a conspiracy of foreign-influenced left-wing forces depended not only on the government’s control of government-run broadcasting, but also on lack of alternate information sources. The Polish government wielded effective autocratic control over all dissemination of information. That is different than the situation in the United States, where there are multiple and sometimes competing source of information.
Despite the differences between Poland and the U.S. with regard to journalistic freedom, Anne Applebaum’s message is clear. Autocratic government tendencies are aided by use of fake narratives about political enemies. That is true even in the United States, where there is alternate media that is independent of government and can report the facts.
The political harm that can be caused in the United States by false conspiratorial narratives is clear, according to Anne Applebaum: undermining democracy and the rule of law.
i https://www.washingtonpost.com/opinions/global-opinions/in-poland-a-preview-of-what-trump-could-do-to-america/2016/09/19/71515d02-7e86-11e6-8d13-d7c704ef9fd9_story.html
[ii] ibid
Five recent proposed antitrust reform bills
From: https://deadline.com/2021/06/house-antitrust-apple-amazon-facebook-google-1234773904/
With links to the text of proposed bills
-The Platform Competition and Opportunity Act: prohibits acquisitions of competitive threats by dominant platforms, as well acquisitions that expand or entrench the market power of online platforms.
Facebook in particular has been taken to task for buying Instagram and other smaller rivals to maintain its social media dominance.
https://www.congress.gov/bill/117th-congress/house-bill/3826
–The Ending Platform Monopolies Act: eliminates the ability of dominant platforms to leverage their control over across multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition.
This would lead breakups of Amazon and other big tech companies by prohibiting them from owning a business that uses the platform “for the sale or provision of products or services” or that sells services as a condition of accessing the platform. Companies couldn’t own businesses that create conflicts of interest, where the platform has incentive and ability to advantage its own products over competitors. Retailers on Amazon’s marketplace have accused the company of mining their data to undercut them.
https://www.congress.gov/bill/117th-congress/house-bill/3825
-The American Innovation and Choice Online Act: prohibits discriminatory conduct by dominant platforms, including a ban on self-preferencing “and picking winners and losers online.”
https://www.congress.gov/bill/117th-congress/house-bill/3816
–The Merger Filing Fee Modernization Act: updates filing fees for mergers for the first time in two decades to ensure that Department of Justice and Federal Trade Commission have the resources they need to aggressively enforce the antitrust laws. It raises the fees for mergers valued at over $1 billion and lowers them for deals of under $500,000.
https://www.congress.gov/bill/117th-congress/senate-bill/228
--The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: promotes competition online by lowering barriers to entry and switching costs for businesses and consumers through interoperability and data portability requirements.
https://www.congress.gov/bill/116th-congress/senate-bill/2658/all-info
From: https://deadline.com/2021/06/house-antitrust-apple-amazon-facebook-google-1234773904/
With links to the text of proposed bills
-The Platform Competition and Opportunity Act: prohibits acquisitions of competitive threats by dominant platforms, as well acquisitions that expand or entrench the market power of online platforms.
Facebook in particular has been taken to task for buying Instagram and other smaller rivals to maintain its social media dominance.
https://www.congress.gov/bill/117th-congress/house-bill/3826
–The Ending Platform Monopolies Act: eliminates the ability of dominant platforms to leverage their control over across multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition.
This would lead breakups of Amazon and other big tech companies by prohibiting them from owning a business that uses the platform “for the sale or provision of products or services” or that sells services as a condition of accessing the platform. Companies couldn’t own businesses that create conflicts of interest, where the platform has incentive and ability to advantage its own products over competitors. Retailers on Amazon’s marketplace have accused the company of mining their data to undercut them.
https://www.congress.gov/bill/117th-congress/house-bill/3825
-The American Innovation and Choice Online Act: prohibits discriminatory conduct by dominant platforms, including a ban on self-preferencing “and picking winners and losers online.”
https://www.congress.gov/bill/117th-congress/house-bill/3816
–The Merger Filing Fee Modernization Act: updates filing fees for mergers for the first time in two decades to ensure that Department of Justice and Federal Trade Commission have the resources they need to aggressively enforce the antitrust laws. It raises the fees for mergers valued at over $1 billion and lowers them for deals of under $500,000.
https://www.congress.gov/bill/117th-congress/senate-bill/228
--The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: promotes competition online by lowering barriers to entry and switching costs for businesses and consumers through interoperability and data portability requirements.
https://www.congress.gov/bill/116th-congress/senate-bill/2658/all-info
AAI Has Allergic Reaction to Misguided Decision in EpiPen Monopolization Case (Sanofi v. Mylan)
AAI filed an amicus brief urging the Tenth Circuit Court of Appeals to reverse a district court order granting summary judgment to the defendant Mylan in a closely watched monopolization case involving the ubiquitous EpiPen, a device used to treat allergy patients who suffer from life-threatening anaphylaxis.
The AAI brief argues that the district court failed to account for Mylan’s overwhelming monopoly power in assessing the likelihood that its conduct would have anticompetitive effects in the EAI market. Although the district court accurately cited language from a different case emphasizing that exclusive dealing is common in the economy and can often be procompetitive, it neglected to account for the economic realities of the EAI market, in which Mylan was eliminating its only capable rival. Because the court failed to appreciate that competition cannot exist without competitors, it did not recognize that conduct eliminating the Auvi-Q on some basis other than efficiency was all but assured of causing cognizable harm under the antitrust laws.
Read More - https://www.antitrustinstitute.org/work-product/aai-has-allergic-reaction-to-misguided-decision-in-epipen-monopolization-case-sanofi-v-mylan/
AAI filed an amicus brief urging the Tenth Circuit Court of Appeals to reverse a district court order granting summary judgment to the defendant Mylan in a closely watched monopolization case involving the ubiquitous EpiPen, a device used to treat allergy patients who suffer from life-threatening anaphylaxis.
The AAI brief argues that the district court failed to account for Mylan’s overwhelming monopoly power in assessing the likelihood that its conduct would have anticompetitive effects in the EAI market. Although the district court accurately cited language from a different case emphasizing that exclusive dealing is common in the economy and can often be procompetitive, it neglected to account for the economic realities of the EAI market, in which Mylan was eliminating its only capable rival. Because the court failed to appreciate that competition cannot exist without competitors, it did not recognize that conduct eliminating the Auvi-Q on some basis other than efficiency was all but assured of causing cognizable harm under the antitrust laws.
Read More - https://www.antitrustinstitute.org/work-product/aai-has-allergic-reaction-to-misguided-decision-in-epipen-monopolization-case-sanofi-v-mylan/
Statute advocated by Maryland Consumer Rights Coalition becomes law -- protects people with medical bills they can't pay
the Medical Debt Protection Act (HB565/SB514) is now law. The legislation, sponsored by Del. Lorig Charkoudian and Sen. Brian Feldman offers the strongest protections for patients with medical debt in the country. Among its many strong provisions, it prohibits liens on homes for anyone with medical debt, prohibits wage garnishment for patients who qualify for free or reduced-cost care, prohibits the use of body attachments for any medical debt collection efforts, creates an income-based repayment plan of no more than 5% of a person’s gross monthly income for all patients with medical debt, and establishes a moratorium on medical debt collection from June through January 2022.
Source: MCRC
the Medical Debt Protection Act (HB565/SB514) is now law. The legislation, sponsored by Del. Lorig Charkoudian and Sen. Brian Feldman offers the strongest protections for patients with medical debt in the country. Among its many strong provisions, it prohibits liens on homes for anyone with medical debt, prohibits wage garnishment for patients who qualify for free or reduced-cost care, prohibits the use of body attachments for any medical debt collection efforts, creates an income-based repayment plan of no more than 5% of a person’s gross monthly income for all patients with medical debt, and establishes a moratorium on medical debt collection from June through January 2022.
Source: MCRC
DC AG Newsletter on Amazon suit
New Antitrust Lawsuit Against Amazon
May was quite the month.
* * *
And at the end of the month, my office announced a new antitrust lawsuit against Amazon. Through this suit, we’re seeking to end Amazon’s anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of District law.
For years, Amazon has controlled online retail prices through its restrictive contracts and policies. Amazon requires third-party sellers to agree that they won’t offer their products anywhere else online–including their own websites–for a lower price than on Amazon.
These agreements result in an artificially high price across the online retail marketplace. They ensure that high fees charged to third-party sellers by Amazon–as much as 40% of the product price–are incorporated not only in the price charged on Amazon, but also in the prices charged on competing platforms across the online retail sales market.
Amazon has used its dominant position in the online retail market to win at all costs. My office filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.
To learn more about the case, read this New York Times article. [Amazon Accused of Manipulating Prices by D.C. Attorney General - The New York Times (nytimes.com), https://www.nytimes.com/2021/05/25/business/amazon-dc-lawsuit.html]
To learn more about the significance of the case, read this other New York Times article. [The Big Deal in Amazon’s Antitrust Case - The New York Times (nytimes.com),https://www.nytimes.com/2021/05/25/technology/amazon-antitrust-lawsuit.html]
Thank you.
Karl A. Racine
Attorney General
New Antitrust Lawsuit Against Amazon
May was quite the month.
* * *
And at the end of the month, my office announced a new antitrust lawsuit against Amazon. Through this suit, we’re seeking to end Amazon’s anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of District law.
For years, Amazon has controlled online retail prices through its restrictive contracts and policies. Amazon requires third-party sellers to agree that they won’t offer their products anywhere else online–including their own websites–for a lower price than on Amazon.
These agreements result in an artificially high price across the online retail marketplace. They ensure that high fees charged to third-party sellers by Amazon–as much as 40% of the product price–are incorporated not only in the price charged on Amazon, but also in the prices charged on competing platforms across the online retail sales market.
Amazon has used its dominant position in the online retail market to win at all costs. My office filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.
To learn more about the case, read this New York Times article. [Amazon Accused of Manipulating Prices by D.C. Attorney General - The New York Times (nytimes.com), https://www.nytimes.com/2021/05/25/business/amazon-dc-lawsuit.html]
To learn more about the significance of the case, read this other New York Times article. [The Big Deal in Amazon’s Antitrust Case - The New York Times (nytimes.com),https://www.nytimes.com/2021/05/25/technology/amazon-antitrust-lawsuit.html]
Thank you.
Karl A. Racine
Attorney General
Amazon will rely on high burden of proof – experts
In a lawsuit filed May 25 in Washington, D.C., Superior Court, Washington, D.C.'s Attorney General Karl Racine claimed Amazon artificially inflated prices across the entire online retail market by prohibiting merchants that sell on Amazon's site from charging lower prices for the same products elsewhere. The lawsuit seeks to stop Amazon’s use of the price agreements, recover damages and impose penalties to discourage similar conduct by Amazon and other companies.
But experts say the suit is limited in scope because any judgment would apply to the district alone. A lack of successfully litigated cases focused on this issue could also pose an obstacle.
"There isn't a body of litigation that has looked at this in detail, in this setting, in trial proceedings," said former Federal Trade Commission Chair William Kovacic. "Without the benefit of cases that have said 'this practice is anti-competitive,' you have to explore some new terrain. The burden is always on the plaintiff to show anti-competitive effects."
Meanwhile, Amazon will likely bring an expert forward who argues that the company's pricing practices are pro-competitive or have no competitive effect, said Kovacic, who currently serves as a law professor at George Washington University. "Amazon will say 'this hasn't been condemned in the United States before,'" Kovacic said.
In an email statement to S&P Global Market Intelligence June 1, an Amazon spokesperson said sellers set their own prices for the products they offer in its store.
"Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store, we reserve the right not to highlight offers to customers that are not priced competitively," the spokesperson said. "The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law."
The suit takes on extra significance given that independent third-party merchants account for a majority of physical gross merchandise sales on Amazon's site, at 60% as of 2019, according to data from Marketplace Pulse, a firm that collects data on e-commerce companies, including Amazon.
Many Amazon sellers are increasingly diversifying to online platforms run by Walmart Inc., eBay Inc., Target Corp. and others to reach new consumers in the wake of the pandemic. Despite this, Amazon remains the dominant source for many of these sales.
"The perception is that they have almost zero negotiating leverage" when it comes to price, said Tuna Amobi, media and entertainment analyst with CFRA Research.
The suit rekindles some antitrust concerns with Amazon's price parity provision under its "most favored nation" agreements in which the company previously prohibited sellers from offering products at lower prices on competing platforms, Amobi said.
Amazon replaced the provision in 2019 with a "fair pricing policy," which has the same effect of blocking sellers from offering lower prices to consumers on other retail sites, Amobi said.
"The argument now is that Amazon really didn't follow through with the spirit of [removing the price parity provision] and kept enforcing it indirectly," Amobi said.
Under Amazon's fair pricing policy, third-party sellers can be sanctioned or removed from Amazon if they offer their products for lower prices or under better terms on a competing platform, according to the Washington, D.C., suit.
The lawsuit adds to increasing scrutiny over Amazon's relationship with its third-party sellers, including a probe launched by the FTC in concert with the attorneys general in New York and California.
But the district lawsuit's relatively limited scope, coupled with a high bar to prove fault, means little near-term material risk, Amobi said.
"It just seems to be a high bar to prove that these merchants had actually suffered direct losses," Amobi said. "Amazon has said merchants had the discretion to set their own prices. They are just requiring them to not offer lower prices elsewhere."
Kovacic said the plaintiff can, however, point to substantial academic literature that supports the theory of the district's case along with cases in Europe, where competition authorities in the United Kingdom and Germany launched investigations into whether Amazon’s price parity provision is anti-competitive.
According to the suit, Amazon informed European regulators in 2013 that it would abandon the provision across the European Union, but the provision "remained in place for years longer in the United States and elsewhere."
From: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/dc-s-antitrust-suit-against-amazon-will-rely-on-high-burden-of-proof-8211-experts-64539029
- Author Katie Arcieri
In a lawsuit filed May 25 in Washington, D.C., Superior Court, Washington, D.C.'s Attorney General Karl Racine claimed Amazon artificially inflated prices across the entire online retail market by prohibiting merchants that sell on Amazon's site from charging lower prices for the same products elsewhere. The lawsuit seeks to stop Amazon’s use of the price agreements, recover damages and impose penalties to discourage similar conduct by Amazon and other companies.
But experts say the suit is limited in scope because any judgment would apply to the district alone. A lack of successfully litigated cases focused on this issue could also pose an obstacle.
"There isn't a body of litigation that has looked at this in detail, in this setting, in trial proceedings," said former Federal Trade Commission Chair William Kovacic. "Without the benefit of cases that have said 'this practice is anti-competitive,' you have to explore some new terrain. The burden is always on the plaintiff to show anti-competitive effects."
Meanwhile, Amazon will likely bring an expert forward who argues that the company's pricing practices are pro-competitive or have no competitive effect, said Kovacic, who currently serves as a law professor at George Washington University. "Amazon will say 'this hasn't been condemned in the United States before,'" Kovacic said.
In an email statement to S&P Global Market Intelligence June 1, an Amazon spokesperson said sellers set their own prices for the products they offer in its store.
"Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store, we reserve the right not to highlight offers to customers that are not priced competitively," the spokesperson said. "The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law."
The suit takes on extra significance given that independent third-party merchants account for a majority of physical gross merchandise sales on Amazon's site, at 60% as of 2019, according to data from Marketplace Pulse, a firm that collects data on e-commerce companies, including Amazon.
Many Amazon sellers are increasingly diversifying to online platforms run by Walmart Inc., eBay Inc., Target Corp. and others to reach new consumers in the wake of the pandemic. Despite this, Amazon remains the dominant source for many of these sales.
"The perception is that they have almost zero negotiating leverage" when it comes to price, said Tuna Amobi, media and entertainment analyst with CFRA Research.
The suit rekindles some antitrust concerns with Amazon's price parity provision under its "most favored nation" agreements in which the company previously prohibited sellers from offering products at lower prices on competing platforms, Amobi said.
Amazon replaced the provision in 2019 with a "fair pricing policy," which has the same effect of blocking sellers from offering lower prices to consumers on other retail sites, Amobi said.
"The argument now is that Amazon really didn't follow through with the spirit of [removing the price parity provision] and kept enforcing it indirectly," Amobi said.
Under Amazon's fair pricing policy, third-party sellers can be sanctioned or removed from Amazon if they offer their products for lower prices or under better terms on a competing platform, according to the Washington, D.C., suit.
The lawsuit adds to increasing scrutiny over Amazon's relationship with its third-party sellers, including a probe launched by the FTC in concert with the attorneys general in New York and California.
But the district lawsuit's relatively limited scope, coupled with a high bar to prove fault, means little near-term material risk, Amobi said.
"It just seems to be a high bar to prove that these merchants had actually suffered direct losses," Amobi said. "Amazon has said merchants had the discretion to set their own prices. They are just requiring them to not offer lower prices elsewhere."
Kovacic said the plaintiff can, however, point to substantial academic literature that supports the theory of the district's case along with cases in Europe, where competition authorities in the United Kingdom and Germany launched investigations into whether Amazon’s price parity provision is anti-competitive.
According to the suit, Amazon informed European regulators in 2013 that it would abandon the provision across the European Union, but the provision "remained in place for years longer in the United States and elsewhere."
From: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/dc-s-antitrust-suit-against-amazon-will-rely-on-high-burden-of-proof-8211-experts-64539029
NYT Dealbook: “New York May Change How America Does Antitrust”
Last year, Gianaris introduced a bill to update New York state’s antitrust law, with the goal being to move away from the monopoly friendly standard judges use right now to understand what constitutes a market power, which is known as the ‘consumer welfare’ standard. This week, the updated bill is likely to pass the full state Senate, and will be headed for the New York Assembly. It is a serious effort. Gianaris is a powerful player in New York politics, and the legislation has the support of New York’s Attorney General, Letitia James, who is also leading one of the key antitrust cases against Facebook.
You can tell it matters because the New York Times’s Dealbook - read by investors - reported on it last week.
What would this bill do? It would change standards for how a firm is considered to be too powerful. While changing standards seems technical and wonky, such a change would in fact be a revolutionary act to break the power that dominant firms have over our economy. (I testified on behalf of the bill last year, and my organization has written an explainer of the legislation.)
Right now, to be considered subject to monopolization law, a firm has to have 70-90% of a market, plus it has to engage in egregious behavior that economists measure as inefficient. This bill would blow up that entire framework. First, a firm would only have to have 40% of a market to be considered dominant. Plus, firms that are powerful enough to set wages across an industry, ahem Amazon, would also be considered dominant. It wouldn’t be illegal to be dominant, but under this legislative framework, dominant firms would no longer be allowed to engage in predatory conduct or block competitors from the market.
The legislation would also expand what would be considered anti-competitive behavior. A bunch of stuff that is now dead-letter law, like predatory pricing or selling below cost to capture market share, could come back. The bill would also let private actors sue under these new standards, so it would allow newspapers, grocery stores, pharmacists, manufacturer and employees to sue if they are being abused by a powerful buyer, seller, and/or distributor.
Credit: Matt Stoller
Last year, Gianaris introduced a bill to update New York state’s antitrust law, with the goal being to move away from the monopoly friendly standard judges use right now to understand what constitutes a market power, which is known as the ‘consumer welfare’ standard. This week, the updated bill is likely to pass the full state Senate, and will be headed for the New York Assembly. It is a serious effort. Gianaris is a powerful player in New York politics, and the legislation has the support of New York’s Attorney General, Letitia James, who is also leading one of the key antitrust cases against Facebook.
You can tell it matters because the New York Times’s Dealbook - read by investors - reported on it last week.
What would this bill do? It would change standards for how a firm is considered to be too powerful. While changing standards seems technical and wonky, such a change would in fact be a revolutionary act to break the power that dominant firms have over our economy. (I testified on behalf of the bill last year, and my organization has written an explainer of the legislation.)
Right now, to be considered subject to monopolization law, a firm has to have 70-90% of a market, plus it has to engage in egregious behavior that economists measure as inefficient. This bill would blow up that entire framework. First, a firm would only have to have 40% of a market to be considered dominant. Plus, firms that are powerful enough to set wages across an industry, ahem Amazon, would also be considered dominant. It wouldn’t be illegal to be dominant, but under this legislative framework, dominant firms would no longer be allowed to engage in predatory conduct or block competitors from the market.
The legislation would also expand what would be considered anti-competitive behavior. A bunch of stuff that is now dead-letter law, like predatory pricing or selling below cost to capture market share, could come back. The bill would also let private actors sue under these new standards, so it would allow newspapers, grocery stores, pharmacists, manufacturer and employees to sue if they are being abused by a powerful buyer, seller, and/or distributor.
Credit: Matt Stoller
AAI Urges Ninth Circuit to Reinstate Conspiracy Case Against the National Association of Realtors (The PLS.com v. NAR, et al.)
June 2, 2021 | Laura Alexander , Joshua P. Davis , John B. Kirkwood
Private Enforcement , Section 1 of the Sherman Act , Collusion
AAI submitted an amicus brief asking the Ninth Circuit Court of Appeals to overturn the dismissal of a complaint from pocket-listing network PLS.com against the National Association of Realtors (NAR) and several of its affiliated multiple listing (MLS) services.
NAR has long dominated the market for residential real estate transactions and its affiliated MLSs have held a comparable monopoly on residential real estate listing networks. NAR has been the subject of multiple consent decrees from the Department of Justice over the years, including related to its MLS listing policies. PLS is a recent entrant to the residential real estate listing market, which sought to provide a nationwide electronic platform for pocket listings. Pocket listings are listings that contain less information about a property than a traditional MLS listing, and they are desired by buyers and sellers who wish to maintain privacy.
PLS alleged that, faced with the threat of competition from PLS’s nationwide pocket listing network, NAR and its affiliated MLSs conspired to enact a Clear Cooperation Policy that, effectively, excluded PLS from the market entirely. The district court, after hearing oral argument, dismissed PLS’s complaint for lack of antitrust standing and denied PLS leave to amend.
AAI’s brief argues that reversal is warranted because the district court baselessly imposed an “ultimate consumer harm” requirement for plaintiffs to establish antitrust standing and wrongly concluded the Clear Competition Policy was “competitively neutral” because the court did not understand the nature of platform competition. The brief points out that an “ultimate consumer harm” requirement contravenes the logic and purpose of the direct purchaser rule and would needlessly hamper private antitrust enforcement and burden courts. In the brief, AAI also argues that far from being competitively neutral, the Clear Competition Policy seeks to eliminate the ability of realtors and brokers to use more than one listing network, which reinforces the barriers to entry in this market from network effects.
The brief was written by AAI Vice President of Policy Laura Alexander. A group of law and economics professors, including Professors and AAI Board Members Josh Davis and John Kirkwood, filed a separate amicus brief in support of PLS.
AAI Amicus Brief https://www.antitrustinstitute.org/wp-content/uploads/2021/06/2021-06-02-Amicus-Brief-iso-PLS-FINAL.pdf
June 2, 2021 | Laura Alexander , Joshua P. Davis , John B. Kirkwood
Private Enforcement , Section 1 of the Sherman Act , Collusion
AAI submitted an amicus brief asking the Ninth Circuit Court of Appeals to overturn the dismissal of a complaint from pocket-listing network PLS.com against the National Association of Realtors (NAR) and several of its affiliated multiple listing (MLS) services.
NAR has long dominated the market for residential real estate transactions and its affiliated MLSs have held a comparable monopoly on residential real estate listing networks. NAR has been the subject of multiple consent decrees from the Department of Justice over the years, including related to its MLS listing policies. PLS is a recent entrant to the residential real estate listing market, which sought to provide a nationwide electronic platform for pocket listings. Pocket listings are listings that contain less information about a property than a traditional MLS listing, and they are desired by buyers and sellers who wish to maintain privacy.
PLS alleged that, faced with the threat of competition from PLS’s nationwide pocket listing network, NAR and its affiliated MLSs conspired to enact a Clear Cooperation Policy that, effectively, excluded PLS from the market entirely. The district court, after hearing oral argument, dismissed PLS’s complaint for lack of antitrust standing and denied PLS leave to amend.
AAI’s brief argues that reversal is warranted because the district court baselessly imposed an “ultimate consumer harm” requirement for plaintiffs to establish antitrust standing and wrongly concluded the Clear Competition Policy was “competitively neutral” because the court did not understand the nature of platform competition. The brief points out that an “ultimate consumer harm” requirement contravenes the logic and purpose of the direct purchaser rule and would needlessly hamper private antitrust enforcement and burden courts. In the brief, AAI also argues that far from being competitively neutral, the Clear Competition Policy seeks to eliminate the ability of realtors and brokers to use more than one listing network, which reinforces the barriers to entry in this market from network effects.
The brief was written by AAI Vice President of Policy Laura Alexander. A group of law and economics professors, including Professors and AAI Board Members Josh Davis and John Kirkwood, filed a separate amicus brief in support of PLS.
AAI Amicus Brief https://www.antitrustinstitute.org/wp-content/uploads/2021/06/2021-06-02-Amicus-Brief-iso-PLS-FINAL.pdf
Letter from Senators Rounds and Smith on meat packers "stranglehold"
May 27, 2021
The Honorable Merrick Garland Attorney General
U.S. Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530
Dear Attorney General Garland,
The time has come for the government to determine whether the stranglehold large meatpackers have over the beef processing market violate our antitrust laws and principles of fair competition.
For over 100 years, the purpose of antitrust laws in our country has been to preserve the process of fair competition for the benefit of consumers. Too much market power often yields less competition and is ripe for market abuse. Yet as you know, four large meat packing companies control over 80% of the processing market in today’s economy and are seemingly able to control prices at their will, or even defy expectations of market fundamentals.
In the last several years, the price of live cattle in the United States market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store. Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price. These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.
These difficulties faced by consumers and producers are not experienced by meatpackers. For example, in the past decade, there have been repeated instances in the market which demonstrates a disconnection between the price of live cattle purchased by meatpackers and the value of choice beef cutout sold by meatpackers (see chart 1; the gap between these two values is isolated and displayed in chart 3).
These persistent irregularities reveal an unfairness in the producer-meatpacker relationship and possibly anticompetitive behavior in the beef industry.
One potential explanation for this disparity may be the ability of meatpackers to import beef from foreign countries, either through external sources or their own vertically integrated sources. Based on data from the United States Department of Agriculture (USDA) Global Agricultural Trade System (GATS), as the price increases for live cattle, there is a subsequent and consistent increase experienced in beef importation (see chart 2). Furthermore, the initiation of plummeting prices in the live cattle market appears to correspond almost exactly with the repeal of Mandatory Country of Origin Labeling, which demonstrates the negative impact of imports on domestic beef prices (also chart 2).These trends indicate a potential existence of collaborative price-fixing activity or other anticompetitive behavior on behalf of the largest beef meatpacking companies in the United States. These issues deserve meaningful investigation, especially given the unprecedented consolidation of this industry.
The U.S. meatpacking industry is more consolidated today, than it was in 1921 when the Packers and Stockyards Act was enacted. Four companies operate 18 of the top 20 beef slaughter facilities in the country, which constitutes 94% of this capacity. Ironically, two of the four giant domestic processors are foreign owned. In our opinion, that concentration has caused a market disconnect, resulting in tangible market manipulation that has economically disadvantaged American ranchers and ultimately, American consumers who want to buy U.S. beef at an affordable price.
As stated by Congress, the purpose of the Packers and Stockyards Act is, "to assure fair competition and fair trade practices, to safeguard farmers and ranchers...to protect consumers...and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices................ " It is truly
unfortunate that exactly 100 years later, the problem is actually worse.
In the last 30 years, there has been no major expansion of beef packing capacity in the United States. Beef packers continue to bring foreign beef into their facilities and place “Product of the U.S.A.” on the final product. This is, at the very least, highly misleading and undermines the price and quality of U.S. beef. Without mandatory country of origin labeling for beef – packers are provided a federal sanction to undercut American producers and dupe American consumers.
U.S. meatpackers also take advantage of their vast resources to hold what is known in the industry as a captive supply. Through forward contracting and formula based sales, packers, collectively, can easily predict their needs many months in advance. These captive supply practices allow meatpackers to exert more control, limit competition and depress sales in the live cash market.
Additionally, legalizing the sale of state inspected meat in interstate commerce has been thwarted, forcing local producers to bottleneck their beef processing at major U.S. meat packing facilities to get the federal stamp of approval.
Arguably, every piece of beef legislation introduced before Congress is the direct result of our attempts to put a band-aid on the real issue: packer concentration.
Exactly 100 years ago, the United States saw fit to break up the packing industry because of concentration and market manipulation. Since that time, packer concentration and foreign influence has significantly grown and until the question of whether consolidation of power in the meatpacking industry has amounted to violations of our antitrust laws is fully answered, this market will continue to suffer for both the consumer and the producer.
From our perspective, the anticompetitive practices occurring in the industry today are unambiguous and either our antitrust laws are not being enforced or they are not capable of addressing the apparent oligopoly that so plainly exists. This is where we need to work together. In the past 18 months, the Department of Justice has received multiple letters raising these concerns, and collectively, we urge your department to take decisive action.
President Biden prioritizes “Buy American” policies that would benefit both consumers and producers and we believe our requests outlined here today support that mission. Unfortunately, the current situation involves multi-national meatpacking companies that continue to get fat off of the high price they impose on retailers and consumers, and the low price they set for producers.
This needs to change.
Our American ranchers work hard every day to produce the best beef in the world. They battle the wind, the rain, the snow and the sun. They shouldn’t have to battle a problem their government has an obligation to fix. If we do not take action, current U.S. policies will be identified as the cause for the demise of the American rancher and American consumers will be forced to pay a higher price for a much lower quality product. The time has come to either enforce or examine our antitrust laws to restore fairness to the marketplace. American producers and consumers depend on us.
We look forward to your response.
Sincerely,
M. Michael Rounds
United States Senator
Tina Smith
United States Senator
CC: President Biden, Secretary Vilsack
May 27, 2021
The Honorable Merrick Garland Attorney General
U.S. Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530
Dear Attorney General Garland,
The time has come for the government to determine whether the stranglehold large meatpackers have over the beef processing market violate our antitrust laws and principles of fair competition.
For over 100 years, the purpose of antitrust laws in our country has been to preserve the process of fair competition for the benefit of consumers. Too much market power often yields less competition and is ripe for market abuse. Yet as you know, four large meat packing companies control over 80% of the processing market in today’s economy and are seemingly able to control prices at their will, or even defy expectations of market fundamentals.
In the last several years, the price of live cattle in the United States market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store. Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price. These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.
These difficulties faced by consumers and producers are not experienced by meatpackers. For example, in the past decade, there have been repeated instances in the market which demonstrates a disconnection between the price of live cattle purchased by meatpackers and the value of choice beef cutout sold by meatpackers (see chart 1; the gap between these two values is isolated and displayed in chart 3).
These persistent irregularities reveal an unfairness in the producer-meatpacker relationship and possibly anticompetitive behavior in the beef industry.
One potential explanation for this disparity may be the ability of meatpackers to import beef from foreign countries, either through external sources or their own vertically integrated sources. Based on data from the United States Department of Agriculture (USDA) Global Agricultural Trade System (GATS), as the price increases for live cattle, there is a subsequent and consistent increase experienced in beef importation (see chart 2). Furthermore, the initiation of plummeting prices in the live cattle market appears to correspond almost exactly with the repeal of Mandatory Country of Origin Labeling, which demonstrates the negative impact of imports on domestic beef prices (also chart 2).These trends indicate a potential existence of collaborative price-fixing activity or other anticompetitive behavior on behalf of the largest beef meatpacking companies in the United States. These issues deserve meaningful investigation, especially given the unprecedented consolidation of this industry.
The U.S. meatpacking industry is more consolidated today, than it was in 1921 when the Packers and Stockyards Act was enacted. Four companies operate 18 of the top 20 beef slaughter facilities in the country, which constitutes 94% of this capacity. Ironically, two of the four giant domestic processors are foreign owned. In our opinion, that concentration has caused a market disconnect, resulting in tangible market manipulation that has economically disadvantaged American ranchers and ultimately, American consumers who want to buy U.S. beef at an affordable price.
As stated by Congress, the purpose of the Packers and Stockyards Act is, "to assure fair competition and fair trade practices, to safeguard farmers and ranchers...to protect consumers...and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices................ " It is truly
unfortunate that exactly 100 years later, the problem is actually worse.
In the last 30 years, there has been no major expansion of beef packing capacity in the United States. Beef packers continue to bring foreign beef into their facilities and place “Product of the U.S.A.” on the final product. This is, at the very least, highly misleading and undermines the price and quality of U.S. beef. Without mandatory country of origin labeling for beef – packers are provided a federal sanction to undercut American producers and dupe American consumers.
U.S. meatpackers also take advantage of their vast resources to hold what is known in the industry as a captive supply. Through forward contracting and formula based sales, packers, collectively, can easily predict their needs many months in advance. These captive supply practices allow meatpackers to exert more control, limit competition and depress sales in the live cash market.
Additionally, legalizing the sale of state inspected meat in interstate commerce has been thwarted, forcing local producers to bottleneck their beef processing at major U.S. meat packing facilities to get the federal stamp of approval.
Arguably, every piece of beef legislation introduced before Congress is the direct result of our attempts to put a band-aid on the real issue: packer concentration.
Exactly 100 years ago, the United States saw fit to break up the packing industry because of concentration and market manipulation. Since that time, packer concentration and foreign influence has significantly grown and until the question of whether consolidation of power in the meatpacking industry has amounted to violations of our antitrust laws is fully answered, this market will continue to suffer for both the consumer and the producer.
From our perspective, the anticompetitive practices occurring in the industry today are unambiguous and either our antitrust laws are not being enforced or they are not capable of addressing the apparent oligopoly that so plainly exists. This is where we need to work together. In the past 18 months, the Department of Justice has received multiple letters raising these concerns, and collectively, we urge your department to take decisive action.
President Biden prioritizes “Buy American” policies that would benefit both consumers and producers and we believe our requests outlined here today support that mission. Unfortunately, the current situation involves multi-national meatpacking companies that continue to get fat off of the high price they impose on retailers and consumers, and the low price they set for producers.
This needs to change.
Our American ranchers work hard every day to produce the best beef in the world. They battle the wind, the rain, the snow and the sun. They shouldn’t have to battle a problem their government has an obligation to fix. If we do not take action, current U.S. policies will be identified as the cause for the demise of the American rancher and American consumers will be forced to pay a higher price for a much lower quality product. The time has come to either enforce or examine our antitrust laws to restore fairness to the marketplace. American producers and consumers depend on us.
We look forward to your response.
Sincerely,
M. Michael Rounds
United States Senator
Tina Smith
United States Senator
CC: President Biden, Secretary Vilsack
Fauci responds to attacks by Senator Josh Hawley and others concerning Fauci's role in investigation of pandemic source in China
https://www.rollingstone.com/politics/politics-news/fauci-calls-baseless-republican-attacks-on-him-anti-science-nonsense-1179115/
https://www.rollingstone.com/politics/politics-news/fauci-calls-baseless-republican-attacks-on-him-anti-science-nonsense-1179115/
Jeff Greenfield on PBS: How the recent rise in crime could impact Dems’ prospects in 2022
https://www.pbs.org/newshour/show/how-the-rise-in-crime-could-impact-dems-prospects-in-2022
Excerpts:
Hari Sreenivasan:
All through the '60s, crime rose sharply. The violent crime rate doubled in that decade. And then when you add in upheaval in the cities, upheaval on campus, the whole issue of disorder and lawlessness became a national political issue, particularly in 1968 in the campaigns of George Wallace and especially in the campaign of Richard Nixon.
And that issue hung around for decades. In 1986, there were three justices of the California Supreme Court removed by the voters for not being tough enough on crime. And I know you'll remember in 1988, Michael Dukakis' presidential campaign was hobbled by the issue that there had been a furlough program where convicted criminals were let out for a while and one of them went on a crime spree, which resulted in a major effort by the Bush campaign in its commercials.
Jeff Greenfield:
Bill Clinton, when he ran for president in 1992, made a point of appearing in front of police officers and presenting both as a candidate and as president, a very tough crime package supported in no small measure by then Senator Joe Biden.
The major thing that happened is that crime went down, nationally, it went down, and in some cases dramatically. In New York in 1990, there were some 2,200 murders. By 2018, there were fewer than 300. And when there's less crime, it's less on people's minds. Then you had the murder of George Floyd and the massive protests against police violence against Blacks so that in 2020, Biden was apologizing for the tough, draconian crime bills that he sponsored back in the '90s. There was also a demand on the part of some progressives to defund the police, although Biden himself opposed that. And at the same time, you began to see another rise in crime so that crime began to rear its ugly head again in the last election.
Hari Sreenivasan:
We saw, in effect, an effect in the November election about the topic of crime.
Jeff Greenfield:
Absolutely. Because of the violence that was on television screens, the occasional sporadic violence around protests and the fact that crime jumped in 2020. In many big cities, though, the murder rate, the homicide rate went up sharply. And what people like Jim Clyburn, one of the most influential Democrats in the House of Representatives, said after is that the whole issue of crime hurt congressional Democrats running in many purple districts. It may explain why Donald Trump, who ran a very, very strong law and order campaign, got more of the brown and Black votes in many parts of the country. These were middle class folks who were upset by violence.
And so now you have the specter of a president trying to run on what he's doing for the economy. Who could be politically threatened by the fact that when crime rises, it becomes a central issue to people because it is literally about their safety. And that's a very real possibility that will hinder Biden's attempt to win back reluctant Democrats to say, look what we're doing for you. Because if the response was, yeah, but I'm not safe in my neighborhood, that can be a powerful political tool. As you mentioned, we saw that a generation ago.
This posting is by Don Resnikoff, who takes responsibility for the posting
https://www.pbs.org/newshour/show/how-the-rise-in-crime-could-impact-dems-prospects-in-2022
Excerpts:
Hari Sreenivasan:
All through the '60s, crime rose sharply. The violent crime rate doubled in that decade. And then when you add in upheaval in the cities, upheaval on campus, the whole issue of disorder and lawlessness became a national political issue, particularly in 1968 in the campaigns of George Wallace and especially in the campaign of Richard Nixon.
And that issue hung around for decades. In 1986, there were three justices of the California Supreme Court removed by the voters for not being tough enough on crime. And I know you'll remember in 1988, Michael Dukakis' presidential campaign was hobbled by the issue that there had been a furlough program where convicted criminals were let out for a while and one of them went on a crime spree, which resulted in a major effort by the Bush campaign in its commercials.
Jeff Greenfield:
Bill Clinton, when he ran for president in 1992, made a point of appearing in front of police officers and presenting both as a candidate and as president, a very tough crime package supported in no small measure by then Senator Joe Biden.
The major thing that happened is that crime went down, nationally, it went down, and in some cases dramatically. In New York in 1990, there were some 2,200 murders. By 2018, there were fewer than 300. And when there's less crime, it's less on people's minds. Then you had the murder of George Floyd and the massive protests against police violence against Blacks so that in 2020, Biden was apologizing for the tough, draconian crime bills that he sponsored back in the '90s. There was also a demand on the part of some progressives to defund the police, although Biden himself opposed that. And at the same time, you began to see another rise in crime so that crime began to rear its ugly head again in the last election.
Hari Sreenivasan:
We saw, in effect, an effect in the November election about the topic of crime.
Jeff Greenfield:
Absolutely. Because of the violence that was on television screens, the occasional sporadic violence around protests and the fact that crime jumped in 2020. In many big cities, though, the murder rate, the homicide rate went up sharply. And what people like Jim Clyburn, one of the most influential Democrats in the House of Representatives, said after is that the whole issue of crime hurt congressional Democrats running in many purple districts. It may explain why Donald Trump, who ran a very, very strong law and order campaign, got more of the brown and Black votes in many parts of the country. These were middle class folks who were upset by violence.
And so now you have the specter of a president trying to run on what he's doing for the economy. Who could be politically threatened by the fact that when crime rises, it becomes a central issue to people because it is literally about their safety. And that's a very real possibility that will hinder Biden's attempt to win back reluctant Democrats to say, look what we're doing for you. Because if the response was, yeah, but I'm not safe in my neighborhood, that can be a powerful political tool. As you mentioned, we saw that a generation ago.
This posting is by Don Resnikoff, who takes responsibility for the posting
Is criminal justice reform to blame for the rise in crime in NYC
https://www.pbs.org/newshour/show/is-criminal-justice-reform-to-blame-for-the-rise-in-crime-in-nyc
Following up on Jeff Greenfield's comments that recent increases in urban crime are a political threat to Democrats, Jullian Harris-Calvin of the Vera Institute of Justice in New York argues that criminal justice reform is not to blame for the recent rise in crime in NYC. Also that the recent rise in crime is exaggerated -- even with the recent rise in crime the crime level is much lower than decades ago. Ms. Harris-Calvin argues a balanced approach to the legal issues: effective policing and appropriate reform in matters of policing and incarceration policies. DAR
https://www.pbs.org/newshour/show/is-criminal-justice-reform-to-blame-for-the-rise-in-crime-in-nyc
Following up on Jeff Greenfield's comments that recent increases in urban crime are a political threat to Democrats, Jullian Harris-Calvin of the Vera Institute of Justice in New York argues that criminal justice reform is not to blame for the recent rise in crime in NYC. Also that the recent rise in crime is exaggerated -- even with the recent rise in crime the crime level is much lower than decades ago. Ms. Harris-Calvin argues a balanced approach to the legal issues: effective policing and appropriate reform in matters of policing and incarceration policies. DAR
from https://www.reuters.com/business/sustainable-business/shareholder-activism-reaches-milestone-exxon-board-vote-nears-end-2021-05-26/
Exxon loses board seats to activist hedge fund in landmark climate vote
Jennifer HillerSvea Herbst-bayliss
The success by hedge fund Engine No. 1 in its showdown with Exxon shocked an energy industry struggling to address growing investor concerns about global warming. It happened on the same day activists scored a big win against another oil major, Royal Dutch Shell - a Dutch court ordered the company to drastically deepen pledged cuts to greenhouse gas emissions.
Eight of Exxon's nominees including CEO Darren Woods were re-elected to its 12-member board of directors, along with two of Engine No. 1's nominees, the company said. The counting is not finished, so Engine No. 1 could potentially see three of its four nominees join the Exxon board.
The result will add to pressure on Woods, who campaigned to convince shareholders to shoot down the board challenge and argued the company was already advancing low carbon projects and improving profits.
"Today, we heard shareholders communicate a desire for ExxonMobil to further these efforts," Woods said in a statement. "We're well positioned to do that."
Under Woods, Exxon incurred a $22 billion loss last year as COVID-19 pandemic destroyed fuel demand worldwide. Exxon has lagged other oil majors in its response to climate change concerns, forecasting many more years of oil and gas demand growth and doubling down on spending to boost its output - in contrast to global rivals that have scaled back fossil fuel investments.
"It's a huge deal. It shows not just that there is more seriousness apparent in the thinking among investors about climate change, it's a rebuff of the whole attitude of the Exxon board," said Ric Marshall, executive director of ESG Research at MSCI.
The dissident shareholder group led by Engine No. 1 put up a slate of four nominees in the first big boardroom contest at an oil major that makes climate change the central issue. The fund's stake in Exxon - an energy behemoth with a market value of close to $250 billion - is worth just $50 million.
NEW DIRECTION
The two Engine No. 1 nominees elected were Gregory Goff, a 64-year-old former top executive at Marathon Petroleum (MPC.N) and Andeavor, and former Neste Oyj (NESTE.HE) executive Kaisa Hietala.
"We welcome the new directors, Gregory Goff and Kaisa Hietala, to the board and look forward to working with them constructively and collectively on behalf of all shareholders," CEO Woods said at the end of Exxon's shareholder meeting.
Vote counting to determine the final two seats was continuing. That left the re-election of directors Steven Kandarian, Douglas Oberhelman, Samuel Palmisano and Wan Zulkiflee up in the air. Alexander Karsner, one of Engine No. 1's nominees, was still in the running, Exxon said.
Governments and companies have moved to reduce emissions from fossil fuels that are warming the planet by investing in wind and solar energy. Investors led by Engine No. 1 have said Woods needed to make big changes to ensure Exxon's future value to investors.
The fund successfully rallied support from institutional investors and shareholder advisory firms upset with Irving, Texas-based Exxon for its weak financial performance in recent years. Among those were BlackRock Inc (BLK.N), Exxon's second-largest shareholder, who agreed to vote for three members of Engine No. 1's slate.
BlackRock said the three bring "fresh perspectives and relevant transformative energy experience" that would help Exxon evaluate "the risks and opportunities presented by the energy transition," according to a note posted on its website.
**
Woods had argued that Exxon's board understood the company's complexity and that Exxon supports a path toward carbon reductions in the Paris accord, the international agreement aimed at combating climate change.
However, in another signal of investor dissatisfaction with the company's approach to climate change, shareholders also approved measures calling on Exxon to provide more information on its climate and grassroots lobbying efforts.
"Exxon Mobil shareholders chose real action to address the climate crisis over business as usual in the fossil fuel industry," said New York State Comptroller Thomas DiNapoli, who in April said the state's pension fund backed Engine No. 1.
DiNapoli said that for years, investors have "received platitudes and gaslighting in response" from Exxon in response to concerns about the climate crisis.
Exxon had fought to keep climate activists at bay, spending tens of millions of dollars on a high-profile PR campaign, agreeing to publish more details of its emissions and coming out in support of carbon reduction. Activists said it was too little, too late, and that Exxon needs a less reactive strategy.
DAR Comment: Hedge fund Engine No. 1's leadership of dissident shareholders such as pension funds suggests further disruption of corporate governance for an array of companies. Potentially that suggests a path to a corporate governance model that better serves the consumer interest on matters like climate change. But that path is not at all clear. A main goal of a company like ExxonMobil is still about making money, and it is not at all clear that the Engine 1 hedge fund leaders or the new board members want to undermine that goal. Pension fund stockholders have a similar incentive to support profitability. On the other hand, disruption of the usual manner of electing directors does support hope for a governance model for corporations that is more responsive to public concerns on issues like climate change.
Exxon loses board seats to activist hedge fund in landmark climate vote
Jennifer HillerSvea Herbst-bayliss
- excerpts:
The success by hedge fund Engine No. 1 in its showdown with Exxon shocked an energy industry struggling to address growing investor concerns about global warming. It happened on the same day activists scored a big win against another oil major, Royal Dutch Shell - a Dutch court ordered the company to drastically deepen pledged cuts to greenhouse gas emissions.
Eight of Exxon's nominees including CEO Darren Woods were re-elected to its 12-member board of directors, along with two of Engine No. 1's nominees, the company said. The counting is not finished, so Engine No. 1 could potentially see three of its four nominees join the Exxon board.
The result will add to pressure on Woods, who campaigned to convince shareholders to shoot down the board challenge and argued the company was already advancing low carbon projects and improving profits.
"Today, we heard shareholders communicate a desire for ExxonMobil to further these efforts," Woods said in a statement. "We're well positioned to do that."
Under Woods, Exxon incurred a $22 billion loss last year as COVID-19 pandemic destroyed fuel demand worldwide. Exxon has lagged other oil majors in its response to climate change concerns, forecasting many more years of oil and gas demand growth and doubling down on spending to boost its output - in contrast to global rivals that have scaled back fossil fuel investments.
"It's a huge deal. It shows not just that there is more seriousness apparent in the thinking among investors about climate change, it's a rebuff of the whole attitude of the Exxon board," said Ric Marshall, executive director of ESG Research at MSCI.
The dissident shareholder group led by Engine No. 1 put up a slate of four nominees in the first big boardroom contest at an oil major that makes climate change the central issue. The fund's stake in Exxon - an energy behemoth with a market value of close to $250 billion - is worth just $50 million.
NEW DIRECTION
The two Engine No. 1 nominees elected were Gregory Goff, a 64-year-old former top executive at Marathon Petroleum (MPC.N) and Andeavor, and former Neste Oyj (NESTE.HE) executive Kaisa Hietala.
"We welcome the new directors, Gregory Goff and Kaisa Hietala, to the board and look forward to working with them constructively and collectively on behalf of all shareholders," CEO Woods said at the end of Exxon's shareholder meeting.
Vote counting to determine the final two seats was continuing. That left the re-election of directors Steven Kandarian, Douglas Oberhelman, Samuel Palmisano and Wan Zulkiflee up in the air. Alexander Karsner, one of Engine No. 1's nominees, was still in the running, Exxon said.
Governments and companies have moved to reduce emissions from fossil fuels that are warming the planet by investing in wind and solar energy. Investors led by Engine No. 1 have said Woods needed to make big changes to ensure Exxon's future value to investors.
The fund successfully rallied support from institutional investors and shareholder advisory firms upset with Irving, Texas-based Exxon for its weak financial performance in recent years. Among those were BlackRock Inc (BLK.N), Exxon's second-largest shareholder, who agreed to vote for three members of Engine No. 1's slate.
BlackRock said the three bring "fresh perspectives and relevant transformative energy experience" that would help Exxon evaluate "the risks and opportunities presented by the energy transition," according to a note posted on its website.
**
Woods had argued that Exxon's board understood the company's complexity and that Exxon supports a path toward carbon reductions in the Paris accord, the international agreement aimed at combating climate change.
However, in another signal of investor dissatisfaction with the company's approach to climate change, shareholders also approved measures calling on Exxon to provide more information on its climate and grassroots lobbying efforts.
"Exxon Mobil shareholders chose real action to address the climate crisis over business as usual in the fossil fuel industry," said New York State Comptroller Thomas DiNapoli, who in April said the state's pension fund backed Engine No. 1.
DiNapoli said that for years, investors have "received platitudes and gaslighting in response" from Exxon in response to concerns about the climate crisis.
Exxon had fought to keep climate activists at bay, spending tens of millions of dollars on a high-profile PR campaign, agreeing to publish more details of its emissions and coming out in support of carbon reduction. Activists said it was too little, too late, and that Exxon needs a less reactive strategy.
DAR Comment: Hedge fund Engine No. 1's leadership of dissident shareholders such as pension funds suggests further disruption of corporate governance for an array of companies. Potentially that suggests a path to a corporate governance model that better serves the consumer interest on matters like climate change. But that path is not at all clear. A main goal of a company like ExxonMobil is still about making money, and it is not at all clear that the Engine 1 hedge fund leaders or the new board members want to undermine that goal. Pension fund stockholders have a similar incentive to support profitability. On the other hand, disruption of the usual manner of electing directors does support hope for a governance model for corporations that is more responsive to public concerns on issues like climate change.
S. 3084
AN ACT To invest in innovation through research and development, and to improve the competitiveness of the United States. . . .
1. SHORT TITLE; TABLE OF CONTENTS. 1(a) SHORTTITLE.—This Act may be cited as the 2‘‘American Innovation and Competitiveness Act’’
A copy of the proposed Act is here: https://www.congress.gov/114/bills/s3084/BILLS-114s3084es.pdf
AN ACT To invest in innovation through research and development, and to improve the competitiveness of the United States. . . .
1. SHORT TITLE; TABLE OF CONTENTS. 1(a) SHORTTITLE.—This Act may be cited as the 2‘‘American Innovation and Competitiveness Act’’
A copy of the proposed Act is here: https://www.congress.gov/114/bills/s3084/BILLS-114s3084es.pdf
Can Americam mask makers survive Chinese competition? American mask makers speak.
The following letter from American mask makers to the President outlines the perceived problems of American manufacturers facing Chinese competition
The majority of U.S. Mask Manufacturing will go offline in 60 days; 2,647 jobs already lostUpdated: May 13
Dear President Biden:
We write to you with a request for immediate help against unfair trade practices by foreign nations that threaten the viability of the U.S. domestic PPE mask manufacturing industry, as well as future U.S. pandemic preparedness efforts. Purchasing existing stockpiles from U.S. manufacturers and taking urgent regulatory action on procurement is needed for the continued health of our nation.
The American Mask Manufacturer’s Association (AMMA) represents the 26 small business Mask Manufacturers that answered America’s call for emergency PPE during the onset of the COVID-19 pandemic. While none of our members had made masks before this crisis, we refused to stand idly by while our nation's doctors, nurses, and neighbors were dying without the proper PPE that China hoarded from the rest of the world.
We responded in the most American way possible, as entrepreneurs and as builders. With no federal funding, our 26 member companies sprang into action—and in less than a year, created the manufacturing capacity for 3.69 billion surgical masks and 1.06 billion N95-style respirators. At the same time, we created 7,823 good-paying jobs.
Being entrepreneurs, we built our business models on pre-pandemic mask-market prices, creating companies that would serve our country long after the current crisis. With recent advances in robotics and automation, we proved our ability to make far higher quality and safer masks than China. These are masks that the U.S. Government and private healthcare organizations would prefer to purchase if prices were comparable.
Fearing America’s manufacturing independence, China has changed the rules and is effectively dumping masks on the U.S. market at well below actual costs. This has made it impossible for our U.S. manufacturers to compete—and as a result, 260 million American-made masks sit in U.S. warehouses unused today.
If this remains unchanged, 54% of our production will go offline in 60 days and 84.6% in less than a year.
There are $0.03 - $0.06 of raw materials in every surgical mask produced--that price is the same everywhere in the world. Yet somehow, we are seeing Chinese masks sold for less than $0.01 here in the United States.
And it’s not just masks. The entire supply chain is at risk.
For example, three of our members make their own meltblown, the key filtration material in N95 and Surgical masks that makes them effective. Meltblown is also the leading reason for production shortages and astronomical prices at the peak of the pandemic. Berry-Amendment compliant meltblown costs between $7-$12 per pound, but our members can make it for a cost of $3-$4 per pound. China is selling N95-quality meltblown at $1.22 per pound—12% cheaper than the cost of raw materials. Because of this, one of our members has stopped producing meltblown altogether. Other U.S. nonwoven manufacturers, like Cummins Filtration, are turning off their meltblown lines this month.
It is even more concerning to find that many of these cheaply sold Chinese products fail to meet American standards.
The National Personal Protective Technology Laboratory (NPPTL), a division of the CDC, recently completed a series of tests on KN95’s imported into the United States. Of 326 total masks tested, NPPTL found that 31.5%, or 103 masks, failed to meet the Chinese KN95 standard (GB 2626-2019) and the NIOSH standard (42 CFR Part 84) of 95% particulate filtration protection.
Additionally, the Emergency Care Research Institute (ERCI) found that 70% of Chinese KN95 masks tested failed to meet minimum standards, concluding that “U.S. hospitals bought hundreds of thousands of masks produced in China [that] aren’t safe and effective against the spread of COVID-19.”
As a result, U.S. state and national government and private healthcare systems have filled their warehouses with cheap, ineffective Chinese products that put our citizens at risk.
If China is allowed to continue dumping masks for a fraction of the costs of materials, we will be more dependent on China for PPE than before the pandemic--putting our healthcare workers at risk for current and future pandemics. These unfair trade practices threaten the viability of our industry and the welfare of every single American.
This is not only a matter of national security but of national pride. American industry responded to this crisis--please help us fight China’s unfair trade practices that are destroying what we have striven so hard to build.
In support of our shared interests, we ask that you strongly consider the following actions:
Our entire membership is made up of diverse women and men who believe strongly in the free market, and do not want a government handout. We did not ask for federal funds to build our factories here in America, and we are not asking for a bailout now. If not for unfair and potentially illegal trade practices, all our businesses would be thriving today. That said, if the government and your administration no longer need our factories to produce PPE, we would still mark the past 12 months as a success and triumph of American spirit in a time of need.
We know your administration is working hard to ensure the long-term survival of American PPE producers, and for that we are grateful. However, the tactics being employed against us by foreign manufacturers are immediate threats to our ability to stay in business. We have already had to lay off significant numbers of our workforce and the majority of production facilities will be forced to permanently shutter mask manufacturing in less than 60 days.
If America needs our production capabilities to protect the country in the future, we need swift and decisive action that only you can provide.
Thank you, Mr. President, and your Administration, for your strong leadership to protect the American public from this deadly virus. Through partnership and collaboration, we can end this pandemic and protect against the next.
Sincerely,
Lloyd Armbrust President, AMMA Founder, Armbrust Inc.
Luis Arguello, President, Demetech
Dan Izhaky, President, United Safety Technology
Brian Wolin, CEO, Protective Health Gear Howard Sherman, CEO, Premier Guard USA
Glenn Ferreri, President, Premier Guard USA Brian Goldmeier, Partner, Made In America PPE
Chet Desai, Partner, Made In America PPE Amir Tafreshi, Founder & CEO, Lutema USA
Eddie Phanichkul, Founder & CMO, Lutema USA
Paul Hickey, President & Co-Founder, PureVita
Lee Mornan, VP of Sales & Marketing, Altor Safety
Todd Raines, President, NFI Masks LLC J
ason Greene, Owner, Medicair Inc.
Avi Polischuk, Owner, Medicair Inc.
Jeremy A. Briggs, Esq., President, Luosh USA
Landon Morales, President, Armbrust Inc.
Brent Dillie, Chairman, AMMA, Managing Partner, Premium-PPE
Clayton Geye, CEO , Indiana Face Mask
James Wyner, CEO Shawmut Corporation
Matt Brandman, CEO, American Surgical Mask
Kahoru Watanabe, Co-Founder, American Surgical Mask
Tim Ziegenfus, CEO, ATI Corporation of North America
Richard Gehricke, COO, ATI Corporation of North America Connor Knapp, Founder, NYPPE LLC Thomas Allen Jr., COO, NYPPE LLC Charles Park, PZero Innovations Inc.
Ryan Gehricke, COO, Carolina Facemask and PPE
Rodney McAbery, Vice President, Guardsman Global
Adam Harmon, President, ALG Health
Dakota Hendrickson, Founder, Filti
George Tsatsos, VP of Sales,
Filti Kan Chou, President of CW Horizon LLC
Chris Dement, Co-Founder, Premium-PPE
Daniel C. Murphy, CEO, DediCare Medical Solutions, LLC
cc: Jeffrey Zients, Coordinator and Counselor to the President, COVID-19 Pandemic Response Timothy Manning, Supply Coordinator, White House COVID-19 Response Celeste Drake, Made in America Director, Office of Management and Budget
Sources:
Bradsher, Keith, and Liz Alderman. The World Needs Masks. China Makes Them, but Has Been Hoarding Them. New York Times, 2020. NY Times, https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html.
Centers for Disease Control and Prevention. NPPTL Respirator Assessments to Support the COVID-19 Response. CDC, 2021. CDC, https://www.cdc.gov/niosh/npptl/respirators/testing/NonNIOSHresults.html.
ECRI. “Up to 70% of Chinese KN95 Masks Tested by ECRI Don’t Meet Minimum Standards.” ERCI.org, 2020, https://www.ecri.org/press/up-to-70-of-chinese-kn95-masks-tested-by-ecri-dont-meet-min imum-standards. Accessed 22 September 2020.
Kates, Graham. N95 mask shortage comes down to this key material: "The supply chain has gotten nuts". CBS News, 2020. CBS News, https://www.cbsnews.com/news/n95-mask-shortage-melt-blown-filters/.
See https://www.ammaunited.org/post/the-majority-of-u-s-mask-manufacturing-will-go-offline-in-60-days-2-647-jobs-already-lost
The following letter from American mask makers to the President outlines the perceived problems of American manufacturers facing Chinese competition
The majority of U.S. Mask Manufacturing will go offline in 60 days; 2,647 jobs already lostUpdated: May 13
Dear President Biden:
We write to you with a request for immediate help against unfair trade practices by foreign nations that threaten the viability of the U.S. domestic PPE mask manufacturing industry, as well as future U.S. pandemic preparedness efforts. Purchasing existing stockpiles from U.S. manufacturers and taking urgent regulatory action on procurement is needed for the continued health of our nation.
The American Mask Manufacturer’s Association (AMMA) represents the 26 small business Mask Manufacturers that answered America’s call for emergency PPE during the onset of the COVID-19 pandemic. While none of our members had made masks before this crisis, we refused to stand idly by while our nation's doctors, nurses, and neighbors were dying without the proper PPE that China hoarded from the rest of the world.
We responded in the most American way possible, as entrepreneurs and as builders. With no federal funding, our 26 member companies sprang into action—and in less than a year, created the manufacturing capacity for 3.69 billion surgical masks and 1.06 billion N95-style respirators. At the same time, we created 7,823 good-paying jobs.
Being entrepreneurs, we built our business models on pre-pandemic mask-market prices, creating companies that would serve our country long after the current crisis. With recent advances in robotics and automation, we proved our ability to make far higher quality and safer masks than China. These are masks that the U.S. Government and private healthcare organizations would prefer to purchase if prices were comparable.
Fearing America’s manufacturing independence, China has changed the rules and is effectively dumping masks on the U.S. market at well below actual costs. This has made it impossible for our U.S. manufacturers to compete—and as a result, 260 million American-made masks sit in U.S. warehouses unused today.
If this remains unchanged, 54% of our production will go offline in 60 days and 84.6% in less than a year.
There are $0.03 - $0.06 of raw materials in every surgical mask produced--that price is the same everywhere in the world. Yet somehow, we are seeing Chinese masks sold for less than $0.01 here in the United States.
And it’s not just masks. The entire supply chain is at risk.
For example, three of our members make their own meltblown, the key filtration material in N95 and Surgical masks that makes them effective. Meltblown is also the leading reason for production shortages and astronomical prices at the peak of the pandemic. Berry-Amendment compliant meltblown costs between $7-$12 per pound, but our members can make it for a cost of $3-$4 per pound. China is selling N95-quality meltblown at $1.22 per pound—12% cheaper than the cost of raw materials. Because of this, one of our members has stopped producing meltblown altogether. Other U.S. nonwoven manufacturers, like Cummins Filtration, are turning off their meltblown lines this month.
It is even more concerning to find that many of these cheaply sold Chinese products fail to meet American standards.
The National Personal Protective Technology Laboratory (NPPTL), a division of the CDC, recently completed a series of tests on KN95’s imported into the United States. Of 326 total masks tested, NPPTL found that 31.5%, or 103 masks, failed to meet the Chinese KN95 standard (GB 2626-2019) and the NIOSH standard (42 CFR Part 84) of 95% particulate filtration protection.
Additionally, the Emergency Care Research Institute (ERCI) found that 70% of Chinese KN95 masks tested failed to meet minimum standards, concluding that “U.S. hospitals bought hundreds of thousands of masks produced in China [that] aren’t safe and effective against the spread of COVID-19.”
As a result, U.S. state and national government and private healthcare systems have filled their warehouses with cheap, ineffective Chinese products that put our citizens at risk.
If China is allowed to continue dumping masks for a fraction of the costs of materials, we will be more dependent on China for PPE than before the pandemic--putting our healthcare workers at risk for current and future pandemics. These unfair trade practices threaten the viability of our industry and the welfare of every single American.
This is not only a matter of national security but of national pride. American industry responded to this crisis--please help us fight China’s unfair trade practices that are destroying what we have striven so hard to build.
In support of our shared interests, we ask that you strongly consider the following actions:
- Immediately remove the FDA’s EUA for non-U.S. based manufacturers, as we have demonstrated that there is ample U.S. production and supply.
- Immediately require the federal government, and anyone receiving federal dollars for PPE reimbursement, to buy Berry-Amendment Compliant masks.
- Review the Strategic National Stockpile. Specifically, remove masks that fail to meet American standards and require private industry and state and local governments to do the same.
- A law or regulatory action requiring hospitals and organization that accept federal funds to purchase 40% of their PPE from domestic manufacturers by 2023. This will bring investment to every level of our industry and allow the market to do its job.
Our entire membership is made up of diverse women and men who believe strongly in the free market, and do not want a government handout. We did not ask for federal funds to build our factories here in America, and we are not asking for a bailout now. If not for unfair and potentially illegal trade practices, all our businesses would be thriving today. That said, if the government and your administration no longer need our factories to produce PPE, we would still mark the past 12 months as a success and triumph of American spirit in a time of need.
We know your administration is working hard to ensure the long-term survival of American PPE producers, and for that we are grateful. However, the tactics being employed against us by foreign manufacturers are immediate threats to our ability to stay in business. We have already had to lay off significant numbers of our workforce and the majority of production facilities will be forced to permanently shutter mask manufacturing in less than 60 days.
If America needs our production capabilities to protect the country in the future, we need swift and decisive action that only you can provide.
Thank you, Mr. President, and your Administration, for your strong leadership to protect the American public from this deadly virus. Through partnership and collaboration, we can end this pandemic and protect against the next.
Sincerely,
Lloyd Armbrust President, AMMA Founder, Armbrust Inc.
Luis Arguello, President, Demetech
Dan Izhaky, President, United Safety Technology
Brian Wolin, CEO, Protective Health Gear Howard Sherman, CEO, Premier Guard USA
Glenn Ferreri, President, Premier Guard USA Brian Goldmeier, Partner, Made In America PPE
Chet Desai, Partner, Made In America PPE Amir Tafreshi, Founder & CEO, Lutema USA
Eddie Phanichkul, Founder & CMO, Lutema USA
Paul Hickey, President & Co-Founder, PureVita
Lee Mornan, VP of Sales & Marketing, Altor Safety
Todd Raines, President, NFI Masks LLC J
ason Greene, Owner, Medicair Inc.
Avi Polischuk, Owner, Medicair Inc.
Jeremy A. Briggs, Esq., President, Luosh USA
Landon Morales, President, Armbrust Inc.
Brent Dillie, Chairman, AMMA, Managing Partner, Premium-PPE
Clayton Geye, CEO , Indiana Face Mask
James Wyner, CEO Shawmut Corporation
Matt Brandman, CEO, American Surgical Mask
Kahoru Watanabe, Co-Founder, American Surgical Mask
Tim Ziegenfus, CEO, ATI Corporation of North America
Richard Gehricke, COO, ATI Corporation of North America Connor Knapp, Founder, NYPPE LLC Thomas Allen Jr., COO, NYPPE LLC Charles Park, PZero Innovations Inc.
Ryan Gehricke, COO, Carolina Facemask and PPE
Rodney McAbery, Vice President, Guardsman Global
Adam Harmon, President, ALG Health
Dakota Hendrickson, Founder, Filti
George Tsatsos, VP of Sales,
Filti Kan Chou, President of CW Horizon LLC
Chris Dement, Co-Founder, Premium-PPE
Daniel C. Murphy, CEO, DediCare Medical Solutions, LLC
cc: Jeffrey Zients, Coordinator and Counselor to the President, COVID-19 Pandemic Response Timothy Manning, Supply Coordinator, White House COVID-19 Response Celeste Drake, Made in America Director, Office of Management and Budget
Sources:
Bradsher, Keith, and Liz Alderman. The World Needs Masks. China Makes Them, but Has Been Hoarding Them. New York Times, 2020. NY Times, https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html.
Centers for Disease Control and Prevention. NPPTL Respirator Assessments to Support the COVID-19 Response. CDC, 2021. CDC, https://www.cdc.gov/niosh/npptl/respirators/testing/NonNIOSHresults.html.
ECRI. “Up to 70% of Chinese KN95 Masks Tested by ECRI Don’t Meet Minimum Standards.” ERCI.org, 2020, https://www.ecri.org/press/up-to-70-of-chinese-kn95-masks-tested-by-ecri-dont-meet-min imum-standards. Accessed 22 September 2020.
Kates, Graham. N95 mask shortage comes down to this key material: "The supply chain has gotten nuts". CBS News, 2020. CBS News, https://www.cbsnews.com/news/n95-mask-shortage-melt-blown-filters/.
See https://www.ammaunited.org/post/the-majority-of-u-s-mask-manufacturing-will-go-offline-in-60-days-2-647-jobs-already-lost
Matt Gaetz explains the 2nd Amendment
Matt Gaetz says the 2nd amendment is about “maintaining within the citizenry the ability to maintain an armed rebellion against the government”
https://twitter.com/i/status/1398058997312278528
https://www.washingtonpost.com/politics/2021/05/28/gaetz-silicon-valley-second-amendment/
Matt Gaetz says the 2nd amendment is about “maintaining within the citizenry the ability to maintain an armed rebellion against the government”
https://twitter.com/i/status/1398058997312278528
https://www.washingtonpost.com/politics/2021/05/28/gaetz-silicon-valley-second-amendment/
CA bill would help fast food workers
Excerpt from https://www.foodandpower.net/latest/fast-food-labor-standard-setting-2021
Last month workers rallied for the FAST Recovery Act, a California bill that would create a council of labor and business interests to set stronger wages and working conditions across the industry. It would also make fast food brands liable for labor violations at all their independently owned franchises.
Excerpt from https://www.foodandpower.net/latest/fast-food-labor-standard-setting-2021
Last month workers rallied for the FAST Recovery Act, a California bill that would create a council of labor and business interests to set stronger wages and working conditions across the industry. It would also make fast food brands liable for labor violations at all their independently owned franchises.
DC AG press release https://oag.dc.gov/release/ag-racine-files-antitrust-lawsuit-against-amazon
AG Racine Files Antitrust Lawsuit Against Amazon to End its Illegal Control of Prices Across Online Retail Market
May 25, 2021Amazon Has Illegally Used and Maintained its Monopoly Power, Raising Prices for Consumers & Stifling Competition in Online Retail Sales by Imposing Restrictive Agreements on Third-Party Sellers
WASHINGTON, D.C. – Attorney General Karl A. Racine today filed an antitrust lawsuit against Amazon.com, Inc., (Amazon) seeking to end its anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The Office of the Attorney General (OAG) alleges that Amazon fixed online retail prices through contract provisions and policies it previously and currently applies to third-party sellers on its platform. These provisions and policies, known as “most favored nation” (MFN) agreements, prevent third-party sellers that offer products on Amazon.com from offering their products at lower prices or on better terms on any other online platform, including their own websites. These agreements effectively require third-party sellers to incorporate the high fees charged by Amazon – as much as 40% of the total product price – not only into the price charged to customers on Amazon’s platform, but also on any other online retail platform. As a result, these agreements impose an artificially high price floor across the online retail marketplace and allow Amazon to build and maintain monopoly power in violation of the District of Columbia’s Antitrust Act. The effects of these agreements continue to be far-reaching as they harm consumers and third-party sellers, and suppress competition, choice, and innovation. OAG is seeking to put an end to Amazon’s control over online retail pricing, as well as damages, penalties, and attorney’s fees.
“Amazon has used its dominant position in the online retail market to win at all costs. It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation, and illegally tilting the playing field in its favor,” said AG Racine. “We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.”
Amazon is the world’s largest online retailer, controlling 50-70% of the online market sales. Amazon sells its own products, and some products it sources wholesale from major manufacturers, through its online platform. It also allows independent third-party sellers to sell their own products on Amazon.com through what it calls “Amazon Marketplace.” Because of the company’s dominance and vast base of customers, over two million independent third-party sellers rely on Amazon Marketplace.
In 2019, Amazon claimed to have removed its price parity policy that explicitly prohibited third-party sellers from offering their products on a competing online retail sales platform, including the third-party sellers’ own website, at a lower price or on better terms than offered the products on Amazon. But in fact, Amazon quickly and quietly replaced the price parity policy with an effectively-identical substitute, its Fair Pricing Policy. Under the Fair Pricing Policy, third-party sellers can be sanctioned or removed from Amazon altogether if they offer their products for lower prices or under better terms on a competing online platform.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are facially anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of the District of Columbia’s Antitrust Act. Specifically, the lawsuit alleges that Amazon:
The complaint, filed in D.C. Superior Court, is available here. https://oag.dc.gov/sites/default/files/2021-05/Amazon-Complaint-.pdf
AG Racine Files Antitrust Lawsuit Against Amazon to End its Illegal Control of Prices Across Online Retail Market
May 25, 2021Amazon Has Illegally Used and Maintained its Monopoly Power, Raising Prices for Consumers & Stifling Competition in Online Retail Sales by Imposing Restrictive Agreements on Third-Party Sellers
WASHINGTON, D.C. – Attorney General Karl A. Racine today filed an antitrust lawsuit against Amazon.com, Inc., (Amazon) seeking to end its anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The Office of the Attorney General (OAG) alleges that Amazon fixed online retail prices through contract provisions and policies it previously and currently applies to third-party sellers on its platform. These provisions and policies, known as “most favored nation” (MFN) agreements, prevent third-party sellers that offer products on Amazon.com from offering their products at lower prices or on better terms on any other online platform, including their own websites. These agreements effectively require third-party sellers to incorporate the high fees charged by Amazon – as much as 40% of the total product price – not only into the price charged to customers on Amazon’s platform, but also on any other online retail platform. As a result, these agreements impose an artificially high price floor across the online retail marketplace and allow Amazon to build and maintain monopoly power in violation of the District of Columbia’s Antitrust Act. The effects of these agreements continue to be far-reaching as they harm consumers and third-party sellers, and suppress competition, choice, and innovation. OAG is seeking to put an end to Amazon’s control over online retail pricing, as well as damages, penalties, and attorney’s fees.
“Amazon has used its dominant position in the online retail market to win at all costs. It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation, and illegally tilting the playing field in its favor,” said AG Racine. “We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.”
Amazon is the world’s largest online retailer, controlling 50-70% of the online market sales. Amazon sells its own products, and some products it sources wholesale from major manufacturers, through its online platform. It also allows independent third-party sellers to sell their own products on Amazon.com through what it calls “Amazon Marketplace.” Because of the company’s dominance and vast base of customers, over two million independent third-party sellers rely on Amazon Marketplace.
In 2019, Amazon claimed to have removed its price parity policy that explicitly prohibited third-party sellers from offering their products on a competing online retail sales platform, including the third-party sellers’ own website, at a lower price or on better terms than offered the products on Amazon. But in fact, Amazon quickly and quietly replaced the price parity policy with an effectively-identical substitute, its Fair Pricing Policy. Under the Fair Pricing Policy, third-party sellers can be sanctioned or removed from Amazon altogether if they offer their products for lower prices or under better terms on a competing online platform.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are facially anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of the District of Columbia’s Antitrust Act. Specifically, the lawsuit alleges that Amazon:
- Raises prices for consumers: Amazon’s MFNs harm consumers by artificially inflating prices they pay for products purchased across the online retail market. When third-party sellers sell on Amazon, they must pass on the cost of Amazon’s high fees and commissions to consumers. While third-party sellers can sell their products for lower prices on other platforms and on their own websites, where fees are lower or non-existent, Amazon’s MFNs prevent sellers from passing on these savings to consumers. These agreements create an artificially high price “floor” across the entire online market and prevent other platforms from enticing consumers away from Amazon with lower prices and gaining market share. Without these restraints, products would be available to consumers at lower prices.
- Stifles competition in the online retail market: Amazon maintains its dominance in online retail by preventing other platforms from competing on price to win market share. The most important factor in online shoppers’ purchasing decisions is price. By ensuring that third-party sellers cannot offer lower prices elsewhere online, Amazon insulates itself from meaningful competition.
- Deprives consumers of choice: Amazon’s anticompetitive actions have resulted in less choice for consumers in the online retail market, suppressed innovation, and reduced investment in potentially-competing platforms.
The complaint, filed in D.C. Superior Court, is available here. https://oag.dc.gov/sites/default/files/2021-05/Amazon-Complaint-.pdf
Notable quote on the difficulties of bringing antitrust litigation
“To mount a credible antitrust campaign, you need to have a significant war chest,” said David Kesselman, an antitrust lawyer in Los Angeles who has followed the [Apple/Epic] case. “And the problem for many smaller companies and smaller businesses is that they don’t have the wherewithal to mount that type of a fight.”
From article on Apple/EPic litigation https://www.nytimes.com/2021/05/24/technology/apple-epic-antitrust-trial.html
“To mount a credible antitrust campaign, you need to have a significant war chest,” said David Kesselman, an antitrust lawyer in Los Angeles who has followed the [Apple/Epic] case. “And the problem for many smaller companies and smaller businesses is that they don’t have the wherewithal to mount that type of a fight.”
From article on Apple/EPic litigation https://www.nytimes.com/2021/05/24/technology/apple-epic-antitrust-trial.html
The Department of Agriculture will distribute loan forgiveness funds to thousands of minority and disadvantaged farmers
The forgiveness funds are part of a program established under the American Rescue Plan.
The fund, which is meant to provide government aid to “socially disadvantaged farmers and ranchers,” marks a “major civil rights victory,” Agriculture Secretary Tom Vilsack said in a USA Today op-ed published Friday.
“For Black and minority farmers, the American Rescue Plan could represent one of the most significant pieces of civil rights legislation in decades,” he wrote. “That’s because deep within the law is a provision that responds to decades of systemic discrimination perpetrated against farmers and ranchers of color by the U.S. Department of Agriculture.”
The law specifically directs the USDA to pay off the farm loans of nearly 16,000 minority farmers, and Vilsack told The Washington Post on Friday that those who will benefit include Black, American Indian, Hispanic, Alaskan Native, Asian American and Pacific Islander farmers.
“Today, after months of planning, USDA begins this historic debt relief program,” the secretary wrote in his op-ed.
Vilsack told the Post that farmers “will get a letter that advises them that their debt is in the process of being paid,” and eligible farmers and ranchers will receive an additional 20 percent of the loan as a cash payment to compensate for the burden that comes with a large debt relief.
The launch comes after Black farmers had accused the USDA of delaying its start to the program, while white farmers and some lawmakers have criticized it as being discriminatory, and banks have argued it could negatively harm lending institutions.
The program is currently facing multiple lawsuits, including from America First Legal (AFL), the legal group started by former President Trump aide Stephen Miller.
AFL argued in its lawsuit filed late last month that the USDA through its fund for disadvantaged farmers and ranchers is “actively and invidiously discriminating against American citizens solely based upon their race.”
“White farmers and ranchers are not included within the definition of ‘socially disadvantaged farmers and ranchers,’ making them ineligible for aid under these federal programs,” the lawsuit argued.
“These racial exclusions are patently unconstitutional, and the Court should permanently enjoin their enforcement,” the AFL added.
In another lawsuit, a group of white Midwestern farmers alleged they were denied participation in the loan forgiveness program because of their race, arguing that if they were considered eligible, “they would have the opportunity to make additional investments in their property, expand their farms, purchase equipment and supplies, and otherwise support their families and local communities.”
Credit: https://thehill.com/policy/finance/554807-usda-to-start-loan-forgiveness-for-thousands-of-farmers-of-color-in-june
The forgiveness funds are part of a program established under the American Rescue Plan.
The fund, which is meant to provide government aid to “socially disadvantaged farmers and ranchers,” marks a “major civil rights victory,” Agriculture Secretary Tom Vilsack said in a USA Today op-ed published Friday.
“For Black and minority farmers, the American Rescue Plan could represent one of the most significant pieces of civil rights legislation in decades,” he wrote. “That’s because deep within the law is a provision that responds to decades of systemic discrimination perpetrated against farmers and ranchers of color by the U.S. Department of Agriculture.”
The law specifically directs the USDA to pay off the farm loans of nearly 16,000 minority farmers, and Vilsack told The Washington Post on Friday that those who will benefit include Black, American Indian, Hispanic, Alaskan Native, Asian American and Pacific Islander farmers.
“Today, after months of planning, USDA begins this historic debt relief program,” the secretary wrote in his op-ed.
Vilsack told the Post that farmers “will get a letter that advises them that their debt is in the process of being paid,” and eligible farmers and ranchers will receive an additional 20 percent of the loan as a cash payment to compensate for the burden that comes with a large debt relief.
The launch comes after Black farmers had accused the USDA of delaying its start to the program, while white farmers and some lawmakers have criticized it as being discriminatory, and banks have argued it could negatively harm lending institutions.
The program is currently facing multiple lawsuits, including from America First Legal (AFL), the legal group started by former President Trump aide Stephen Miller.
AFL argued in its lawsuit filed late last month that the USDA through its fund for disadvantaged farmers and ranchers is “actively and invidiously discriminating against American citizens solely based upon their race.”
“White farmers and ranchers are not included within the definition of ‘socially disadvantaged farmers and ranchers,’ making them ineligible for aid under these federal programs,” the lawsuit argued.
“These racial exclusions are patently unconstitutional, and the Court should permanently enjoin their enforcement,” the AFL added.
In another lawsuit, a group of white Midwestern farmers alleged they were denied participation in the loan forgiveness program because of their race, arguing that if they were considered eligible, “they would have the opportunity to make additional investments in their property, expand their farms, purchase equipment and supplies, and otherwise support their families and local communities.”
Credit: https://thehill.com/policy/finance/554807-usda-to-start-loan-forgiveness-for-thousands-of-farmers-of-color-in-june
Banker groups oppose U.S. Dept. of Agriculture loan relief to African-American Socially Disadvantaged Farmers
DAR Comment: The core of the bankers objection is this (quoting from the Bankers' letter):
This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments. The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs.
The Bankers' letter and materials follow:
April 9, 2021
The Honorable Tom Vilsack Secretary of Agriculture
U.S. Department of Agriculture 1400 Independence Avenue, SW Washington, D.C. 20250
Dear Secretary Vilsack:
On behalf of the commercial banking industry and the more than 52,000 bank locations serving American citizens, we write to share our recommendations on USDA’s implementation of Section 1005 of the American Rescue Plan Act related to Socially Disadvantaged Farmers and Ranchers (SDA). This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments.
The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs. Second, purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted. The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to SDA and other borrowers. Finally, USDA could consider assuming the payments of those loans that are not delinquent and have not been associated with previous legal challenges.
Please see the attachment for an explanation of these recommendations which we would be pleased to further discuss with USDA officials. The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with all farm and ranch borrowers and USDA. Our recommendations will help ensure these partnerships remain intact.
Sincerely,
American Bankers Association
Independent Community Bankers of America National Rural Lenders Association
Attachment
Recommendations on Relieving Indebtedness of SDA Borrowers
Implementing Section 1005 of the American Rescue Plan Act
The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 12, 2021. Section 1005 of the Act requires USDA to pay off all direct and guaranteed loans to Socially Disadvantaged Farmers and Ranchers (SDA) that existed as of January 1, 2021. Each SDA borrower is eligible to receive up to 120 percent of their outstanding loan indebtedness. The sudden, abrupt payoff of any category of guaranteed loans could result in an interest income loss to banks holding these loans and a loss on the premiums paid by secondary market purchasers/investors. To ensure lenders continue using USDA guaranteed loans to meet future guaranteed borrower demand, USDA should incorporate the following recommendations.
Recognize lenders’ costs of funding, maintaining, and servicing loans and ensure lenders are made whole by being compensated for lost income due to the loan payoffs.
For example, a large community bank which has an SDA farm/ranch portfolio of over $200 million calculates they could lose millions of dollars in net income per year if their portfolio of SDA loans is quickly paid off. A $200mm-plus loan balance going to zero will have a significant financial impact on the bank’s balance sheet, capital position and income statements alarming bank regulators. Such a loss will also undoubtedly reduce the bank’s ability to retain employees.
Another example is a smaller community bank with over $10 million in SDA farm/ranch loans comprising over ten percent of their portfolio. This bank estimates the sudden payoff of these loans will cause an annual loss of net income of over $300,000 per year for several years and raise concerns alluded to above.
Providing agricultural loans involves a substantial cost for lenders related to the costs of securing funding for loan-making and underwriting activities which include analyzing producers’ creditworthiness and ability to cash flow and correctly assessing the value of the farm/ranch assets. Loans must be approved by a loan review committee and lenders’ staff must monitor loan payments and asset quality, often with on-site inspections and periodic follow-up and consultation with borrowers and in some cases pursue collection efforts.
If USDA does not compensate lenders for such disruptions or avoid sudden loan payoffs, the likely result will be less access to credit for those seeking USDA guaranteed loans in the future, including SDA farmers/ranchers.
Other than the additional twenty percent to pay SDA taxes, USDA could assume payment of loans that are not delinquent or were not part of previous legal challenges.
Payments of existing loan terms on loans that were not part of the previous court challenges ensures SDA farmers/ranchers who are not delinquent are also immediately relieved from the burden of repaying their guaranteed loans while maintaining the payment schedule originally set up by the bank and agreed to by the farm or ranch customer. Instead, USDA would make the payments. This process protects the banks’ investment in loan-making to guaranteed borrowers and would be similar to how some PPP loan payments were made by the SBA.
Purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted.
The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to farmers and ranchers. Commercial lenders have, over several decades, partnered with USDA to build this reliable and vibrant secondary market to serve all guaranteed loan borrowers. However, there is real concern about the ability of both lenders and investors to continue to facilitate credit availability in the secondary market going forward should consideration not be given to their considerable existing investments.
Presently, lenders can sell the guaranteed portion of their USDA loans to secondary market purchasers, including Farmer Mac, regional brokers, and loan aggregators. By selling the guarantees, lenders replenish their funds when liquidity is tight, allowing them to subsequently make new loans. The secondary market also allows lenders to provide long-term fixed rate loans resulting in longer terms at lower interest rates, reducing costs for farm and ranch borrowers.
Additionally, secondary market purchasers pay a premium for these guarantees based on the expectation of a dependable income stream over a multi-year period (typically 8-10 years). Due to the perception of reliability of payments, the guarantees are considered tradable, thus generating premiums from interested purchasers. The premiums on these loan purchases could disappear overnight with demand for purchasing USDA guarantees drying up.
In sum, the secondary market for USDA guaranteed farm loans provides favorable terms for farm borrowers, needed liquidity for lenders, and consistent, predictable yield for investors. The government guarantees help provide a market for these loans and mitigates credit risk in a vitally important sector filled with great uncertainty. The guarantees also provide bank regulators with assurance of limited risks to the financial institution which made the loan(s). However, if paying off entire categories of guarantee borrowers is not implemented properly, USDA’s actions could severely damage the secondary market by making the market unreliable and pricing unpredictable. This would cause a significant loss of available capital for lending under the USDA programs harming all guaranteed borrowers as well as the overall integrity of USDA’s guaranteed programs.
Conclusion
The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with SDA borrowers as active partners sharing in the risks of keeping their operations viable for their families and their futures. Commercial lenders should not be hindered from continuing to work with all guaranteed loan borrowers. We urge USDA to assist both SDA farmers/ranchers as required by statute and their lenders who have worked so diligently on their behalf.
Finally, USDA should consider the necessity of maintaining the integrity of their guaranteed loan programs, which can only be accomplished if those lenders dealing with USDA loan guarantees are protected from the sudden, unexpected loss of income from abrupt loan payoffs and detrimental disruptions to the secondary market. Adopting the above recommendations will help accomplish these objectives.
https://www.icba.org/docs/default-source/icba/advocacy-documents/letters-to-regulators/letter-to-usda-on-sda-loan-payoffs.pdf?sfvrsn=1e780e17_0
DAR Comment: The core of the bankers objection is this (quoting from the Bankers' letter):
This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments. The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs.
The Bankers' letter and materials follow:
April 9, 2021
The Honorable Tom Vilsack Secretary of Agriculture
U.S. Department of Agriculture 1400 Independence Avenue, SW Washington, D.C. 20250
Dear Secretary Vilsack:
On behalf of the commercial banking industry and the more than 52,000 bank locations serving American citizens, we write to share our recommendations on USDA’s implementation of Section 1005 of the American Rescue Plan Act related to Socially Disadvantaged Farmers and Ranchers (SDA). This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments.
The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs. Second, purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted. The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to SDA and other borrowers. Finally, USDA could consider assuming the payments of those loans that are not delinquent and have not been associated with previous legal challenges.
Please see the attachment for an explanation of these recommendations which we would be pleased to further discuss with USDA officials. The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with all farm and ranch borrowers and USDA. Our recommendations will help ensure these partnerships remain intact.
Sincerely,
American Bankers Association
Independent Community Bankers of America National Rural Lenders Association
Attachment
Recommendations on Relieving Indebtedness of SDA Borrowers
Implementing Section 1005 of the American Rescue Plan Act
The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 12, 2021. Section 1005 of the Act requires USDA to pay off all direct and guaranteed loans to Socially Disadvantaged Farmers and Ranchers (SDA) that existed as of January 1, 2021. Each SDA borrower is eligible to receive up to 120 percent of their outstanding loan indebtedness. The sudden, abrupt payoff of any category of guaranteed loans could result in an interest income loss to banks holding these loans and a loss on the premiums paid by secondary market purchasers/investors. To ensure lenders continue using USDA guaranteed loans to meet future guaranteed borrower demand, USDA should incorporate the following recommendations.
Recognize lenders’ costs of funding, maintaining, and servicing loans and ensure lenders are made whole by being compensated for lost income due to the loan payoffs.
For example, a large community bank which has an SDA farm/ranch portfolio of over $200 million calculates they could lose millions of dollars in net income per year if their portfolio of SDA loans is quickly paid off. A $200mm-plus loan balance going to zero will have a significant financial impact on the bank’s balance sheet, capital position and income statements alarming bank regulators. Such a loss will also undoubtedly reduce the bank’s ability to retain employees.
Another example is a smaller community bank with over $10 million in SDA farm/ranch loans comprising over ten percent of their portfolio. This bank estimates the sudden payoff of these loans will cause an annual loss of net income of over $300,000 per year for several years and raise concerns alluded to above.
Providing agricultural loans involves a substantial cost for lenders related to the costs of securing funding for loan-making and underwriting activities which include analyzing producers’ creditworthiness and ability to cash flow and correctly assessing the value of the farm/ranch assets. Loans must be approved by a loan review committee and lenders’ staff must monitor loan payments and asset quality, often with on-site inspections and periodic follow-up and consultation with borrowers and in some cases pursue collection efforts.
If USDA does not compensate lenders for such disruptions or avoid sudden loan payoffs, the likely result will be less access to credit for those seeking USDA guaranteed loans in the future, including SDA farmers/ranchers.
Other than the additional twenty percent to pay SDA taxes, USDA could assume payment of loans that are not delinquent or were not part of previous legal challenges.
Payments of existing loan terms on loans that were not part of the previous court challenges ensures SDA farmers/ranchers who are not delinquent are also immediately relieved from the burden of repaying their guaranteed loans while maintaining the payment schedule originally set up by the bank and agreed to by the farm or ranch customer. Instead, USDA would make the payments. This process protects the banks’ investment in loan-making to guaranteed borrowers and would be similar to how some PPP loan payments were made by the SBA.
Purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted.
The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to farmers and ranchers. Commercial lenders have, over several decades, partnered with USDA to build this reliable and vibrant secondary market to serve all guaranteed loan borrowers. However, there is real concern about the ability of both lenders and investors to continue to facilitate credit availability in the secondary market going forward should consideration not be given to their considerable existing investments.
Presently, lenders can sell the guaranteed portion of their USDA loans to secondary market purchasers, including Farmer Mac, regional brokers, and loan aggregators. By selling the guarantees, lenders replenish their funds when liquidity is tight, allowing them to subsequently make new loans. The secondary market also allows lenders to provide long-term fixed rate loans resulting in longer terms at lower interest rates, reducing costs for farm and ranch borrowers.
Additionally, secondary market purchasers pay a premium for these guarantees based on the expectation of a dependable income stream over a multi-year period (typically 8-10 years). Due to the perception of reliability of payments, the guarantees are considered tradable, thus generating premiums from interested purchasers. The premiums on these loan purchases could disappear overnight with demand for purchasing USDA guarantees drying up.
In sum, the secondary market for USDA guaranteed farm loans provides favorable terms for farm borrowers, needed liquidity for lenders, and consistent, predictable yield for investors. The government guarantees help provide a market for these loans and mitigates credit risk in a vitally important sector filled with great uncertainty. The guarantees also provide bank regulators with assurance of limited risks to the financial institution which made the loan(s). However, if paying off entire categories of guarantee borrowers is not implemented properly, USDA’s actions could severely damage the secondary market by making the market unreliable and pricing unpredictable. This would cause a significant loss of available capital for lending under the USDA programs harming all guaranteed borrowers as well as the overall integrity of USDA’s guaranteed programs.
Conclusion
The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with SDA borrowers as active partners sharing in the risks of keeping their operations viable for their families and their futures. Commercial lenders should not be hindered from continuing to work with all guaranteed loan borrowers. We urge USDA to assist both SDA farmers/ranchers as required by statute and their lenders who have worked so diligently on their behalf.
Finally, USDA should consider the necessity of maintaining the integrity of their guaranteed loan programs, which can only be accomplished if those lenders dealing with USDA loan guarantees are protected from the sudden, unexpected loss of income from abrupt loan payoffs and detrimental disruptions to the secondary market. Adopting the above recommendations will help accomplish these objectives.
https://www.icba.org/docs/default-source/icba/advocacy-documents/letters-to-regulators/letter-to-usda-on-sda-loan-payoffs.pdf?sfvrsn=1e780e17_0
Doctors Now Must Provide Patients Their Health Data, Online and On Demand
By Sarah Kwon
MAY 18, 2021
Excerpts:
On April 5, a federal rule went into effect that requires health care providers to give patients electronic access to their health information without delay upon request, at no cost. Many patients may now find their doctors’ clinical notes, test results and other medical data posted to their electronic portal as soon as they are available.
Advocates herald the rule as a long-awaited opportunity for patients to control their data and health. “This levels the playing field,” said Jan Walker, co-founder of OpenNotes, a group that has pushed for providers to share notes with patients. “A decade ago, the medical record belonged to the physician.”
But the rollout of the rule has hit bumps, as doctors learn that patients might see information before they do. Like Ramsey, some patients have felt distressed when seeing test results dropped into their portal without a physician’s explanation. And doctors’ groups say they are confused and concerned about whether the notes of adolescent patients who don’t want their parents to see sensitive information can be exempt — or if they will have to breach their patients’ trust.
Patients have long had a legal right to their medical records but often have had to pay fees, wait weeks or sift through reams of paper to see them. The rule aims not only to remove these barriers, but also to enable patients to access their health records through smartphone apps, and prevent health care providers from withholding information from other providers and health IT companies when a patient wants it to be shared. Privacy rules under the Health Insurance Portability and Accountability Act, which limit sharing of personal health information outside a clinic, remain in place, although privacy advocates have warned that patients who choose to share their data with consumer apps will put their data at risk.
Studies have shown numerous benefits of note sharing. Patients who read their notes understand more about their health, better remember their treatment plan and are more likely to stick to their medication regimen. Non-white, older or less educated patients report even greater benefits than others.
While most doctors who have shared notes with patients think it’s a good idea, the policy has drawbacks. One recent study found that half of doctors reported writing their notes less candidly after they were opened to patients. Another study, published in February, found that 1 in 10 patients had ever felt offended or judged after reading a note. The study’s lead author, Dr. Leonor Fernandez, of Beth Israel Deaconess Medical Center, said there is a “legacy of certain ways of expressing things in medicine that didn’t really take into account how it reads when you’re a patient.”
The AMA is advocating for “tweaks” to the rule, he said, like allowing brief delays in releasing results for a few of the highest-stakes tests, like those diagnosing cancer, and more clarity on whether the harm exception applies to adolescent patients who might face emotional distress if their doctor breached their trust by sharing sensitive information with their parents. The Office of the National Coordinator for Health Information Technology, the federal agency overseeing the rule, responded in an email that it has heard these concerns, but has also heard from clinicians that patients value receiving this information in a timely fashion, and that patients can decide whether they want to look at results once they receive them or wait until they can review them with their doctor. It added that the rule does not require giving parents access to protected health information if they did not already have that right under HIPAA.
Patient advocate Cynthia Fisher believes there should be no exceptions to immediately releasing results, noting that many patients want and need test results as soon as possible, and that delays can lead to worse health outcomes. Instead of facing long wait times to discuss diagnoses with their doctors, she said, patients can now take their results elsewhere. “We can’t assume the consumer is ignorant and unresourceful,” she said. In the meantime, hospitals and doctors are finding ways to adapt, and their tactics could have lasting implications for patient knowledge and physician workload. At Massachusetts General Hospital, a guide for patients on how to interpret medical terminology in radiology reports is being developed, said Dr. William Mehan, a neuroradiologist. An internal survey run after radiology results became immediately available to patients found that some doctors were monitoring their inbox after hours in case results arrived. “Burnout has come up in this conversation,” Mehan said. Some electronic health records enable doctors to withhold test results at the time they are ordered, said Jodi Daniel, a partner at the law firm Crowell & Moring. Doctors who can do this could ask patients whether they want their results released immediately or if they want their doctor to communicate the result, assuming they meet certain criteria for exceptions under the rule, she said. Chantal Worzala, a health technology policy consultant, said more is to come. “There will be a lot more conversation about the tools that individuals want and need in order to access and understand their health information,” she said.
This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.
AAI: Study Finds Private Equity Investment Accelerates Concentration and Undermines a Stable, Competitive Healthcare Industry
May 18, 2021 | Laura Alexander , Dr. Richard Scheffler
Health & Pharmaceuticals , Competition Policy https://www.antitrustinstitute.org/issues/competition-policy
A decade’s worth of evidence supports troubling findings that private equity business practices have a negative impact on competition in healthcare and on patients. A new white paper, produced by experts at the American Antitrust Institute (AAI) and UC Berkeley, calls for immediate attention to the role that private equity investment plays in harming patients and impairing the functioning of the healthcare industry. In this groundbreaking new white paper, Soaring Private Equity Investment in the Healthcare Sector: Consolidation Accelerated, Competition Undermined, and Patients at Risk, AAI’s Laura Alexander and Professor Richard Scheffler of The Nicholas C. Petris Center on Health Care Markets and Consumer Welfare in the School of Public Health at UC Berkeley detail the emerging threat posed by private equity investment in healthcare markets.
“The report documents the astronomical growth of private equity’s investment in healthcare, which focuses on short-term profits and not the wellbeing of patients, and its consequences” says UC Berkeley School of Public Health Professor and Petris Center Director Richard Scheffler.
The paper’s major conclusions include:
“The ramifications of private equity investment in healthcare are still unfolding,” says study co-author and AAI Vice President of Policy Laura Alexander. “But given the speed with which private equity is transforming healthcare markets and the implications for competition, patients, and public health, the time to act is now.”
Media Contacts:Laura Alexander
American Antitrust Institute
[email protected]
(202) 276-4050
Dr. Richard Scheffler
Petris Center
[email protected]
(510) 508-5079
AAI Private Equity Healthcare Report -- https://www.antitrustinstitute.org/wp-content/uploads/2021/05/Private-Equity-I-Healthcare-Report-FINAL.pdf
May 18, 2021 | Laura Alexander , Dr. Richard Scheffler
Health & Pharmaceuticals , Competition Policy https://www.antitrustinstitute.org/issues/competition-policy
A decade’s worth of evidence supports troubling findings that private equity business practices have a negative impact on competition in healthcare and on patients. A new white paper, produced by experts at the American Antitrust Institute (AAI) and UC Berkeley, calls for immediate attention to the role that private equity investment plays in harming patients and impairing the functioning of the healthcare industry. In this groundbreaking new white paper, Soaring Private Equity Investment in the Healthcare Sector: Consolidation Accelerated, Competition Undermined, and Patients at Risk, AAI’s Laura Alexander and Professor Richard Scheffler of The Nicholas C. Petris Center on Health Care Markets and Consumer Welfare in the School of Public Health at UC Berkeley detail the emerging threat posed by private equity investment in healthcare markets.
“The report documents the astronomical growth of private equity’s investment in healthcare, which focuses on short-term profits and not the wellbeing of patients, and its consequences” says UC Berkeley School of Public Health Professor and Petris Center Director Richard Scheffler.
The paper’s major conclusions include:
- Private equity investment in healthcare has grown dramatically—to nearly $750 billion in the last decade—and is poised to increase even further due to the COVID-19 pandemic’s impact on the healthcare sector and its projected growth.
- The private equity business model is fundamentally incompatible with a stable, competitive healthcare system that serves patients and promotes the health and wellbeing of the population.
- Private equity’s focus on short-term revenue generation and consolidation undermines competition and destabilizes healthcare markets.
- Private equity acts as an anticompetitive catalyst in healthcare markets, amplifying and accelerating concentration and anticompetitive practices.
- Private equity funds operate under the public and regulatory “radar,” leaving the vast majority of private equity deals in healthcare unreported, unreviewed, and unregulated.
- Urgent action is needed to oversee, investigate, and understand the impact of private equity on patients and healthcare markets, including changes to antitrust reporting requirements, withdrawal of the Department of Justice’s guidance on remedies, and study of additional oversight of healthcare mergers by the Department of Health and Human Services.
“The ramifications of private equity investment in healthcare are still unfolding,” says study co-author and AAI Vice President of Policy Laura Alexander. “But given the speed with which private equity is transforming healthcare markets and the implications for competition, patients, and public health, the time to act is now.”
Media Contacts:Laura Alexander
American Antitrust Institute
[email protected]
(202) 276-4050
Dr. Richard Scheffler
Petris Center
[email protected]
(510) 508-5079
AAI Private Equity Healthcare Report -- https://www.antitrustinstitute.org/wp-content/uploads/2021/05/Private-Equity-I-Healthcare-Report-FINAL.pdf
"Pay-day" high interest lenders have made big money from desperate borrowers during the pandemic
It is one of the cruel ironies of the pandemic: At a time of great suffering for millions of working-class Americans, the odd financial rhythms of the past year—with its waves of job layoffs, followed by unprecedented government stimulus and a sharp economic rebound—have helped some of these high-interest lenders rake in record earnings. That the windfall for these companies came just as the Federal Reserve was making near zero-rate loans available for corporate America and the wealthy only further riles up the industry’s biggest critics.
“Debt collectors had a big year, and so did predatory lenders,” said Lauren Saunders, associate director at the National Consumer Law Center, a non-profit that advocates for low-income borrowers. “The idea that any company could keep charging 100% or 200% interest or more during this time of crisis is really outrageous.”
What’s more, consumer advocates point to studies that show Black and Latino communities are disproportionately targeted by providers of high-cost loans.
In Michigan, areas that are more than a quarter Black and Latino have 7.6 payday stores for every 100,000 people, or about 50% more than elsewhere, according to data collected by the Center for Responsible Lending. A forthcoming study from the University of Houston that was provided to Bloomberg shows similar disparities when it comes to online advertising.
From: Bloomberg Payday, Predatory Lenders Racked Up Record Profits in 2020 (bloomberg.com) https://www.bloomberg.com/graphics/2021-payday-loan-lenders/?cmpid=BBD051721_BIZ&utm_medium=email&utm_source=newsletter&utm_term=210517&utm_campaign=bloombergdaily
It is one of the cruel ironies of the pandemic: At a time of great suffering for millions of working-class Americans, the odd financial rhythms of the past year—with its waves of job layoffs, followed by unprecedented government stimulus and a sharp economic rebound—have helped some of these high-interest lenders rake in record earnings. That the windfall for these companies came just as the Federal Reserve was making near zero-rate loans available for corporate America and the wealthy only further riles up the industry’s biggest critics.
“Debt collectors had a big year, and so did predatory lenders,” said Lauren Saunders, associate director at the National Consumer Law Center, a non-profit that advocates for low-income borrowers. “The idea that any company could keep charging 100% or 200% interest or more during this time of crisis is really outrageous.”
What’s more, consumer advocates point to studies that show Black and Latino communities are disproportionately targeted by providers of high-cost loans.
In Michigan, areas that are more than a quarter Black and Latino have 7.6 payday stores for every 100,000 people, or about 50% more than elsewhere, according to data collected by the Center for Responsible Lending. A forthcoming study from the University of Houston that was provided to Bloomberg shows similar disparities when it comes to online advertising.
From: Bloomberg Payday, Predatory Lenders Racked Up Record Profits in 2020 (bloomberg.com) https://www.bloomberg.com/graphics/2021-payday-loan-lenders/?cmpid=BBD051721_BIZ&utm_medium=email&utm_source=newsletter&utm_term=210517&utm_campaign=bloombergdaily
Expanding citations from Matt Stoller's blog on U.S. waiving IP protections for Covid vaccines
FTC releases a report about repair restrictions and how they limit your ability to fix products that break.
by
Emily Wu, May 6, 2021
Attorney, Federal Trade Commission
When you buy a new smartphone, computer, home appliance, or other product, you may not always think about whether it can be fixed if it breaks or has an issue. But here’s the thing: some manufacturers prevent you from fixing the things you buy. They might do things like gluing in batteries, limiting the availability of spare parts, and not giving you the repair instructions and software to help figure out the problem.
The FTC released a report today about repair restrictions and how they limit your ability to fix products that break. The report suggests what the FTC, lawmakers, and manufacturers can do to make it easier for you to fix the things that you own.
But there are some things that you can do yourself. Before you buy, do some research online to find out:
If you’re told that your warranty was voided or that it will be voided because of independent repair, we want to hear about it. Report it to the FTC at ReportFraud.ftc.gov.
by
Emily Wu, May 6, 2021
Attorney, Federal Trade Commission
When you buy a new smartphone, computer, home appliance, or other product, you may not always think about whether it can be fixed if it breaks or has an issue. But here’s the thing: some manufacturers prevent you from fixing the things you buy. They might do things like gluing in batteries, limiting the availability of spare parts, and not giving you the repair instructions and software to help figure out the problem.
The FTC released a report today about repair restrictions and how they limit your ability to fix products that break. The report suggests what the FTC, lawmakers, and manufacturers can do to make it easier for you to fix the things that you own.
But there are some things that you can do yourself. Before you buy, do some research online to find out:
- What is the average lifespan of the product?
- What is likely to go wrong with it if it breaks?
- How hard will it be to fix the problem?
If you’re told that your warranty was voided or that it will be voided because of independent repair, we want to hear about it. Report it to the FTC at ReportFraud.ftc.gov.
Spotify’s Joe Rogan encouraged “healthy” 21-year-olds not to get a coronavirus vaccine
From: https://www.mediamatters.org/joe-rogan-experience/spotifys-joe-rogan-encourages-healthy-21-year-olds-not-get-coronavirus-vaccine
WRITTEN BY ALEX PATERSON
On the April 23 edition of his Spotify podcast, Joe Rogan encouraged healthy young people not to get a COVID-19 vaccine, saying, “If you're like 21 years old, and you say to me, should I get vaccinated? I'll go no.”
Experts estimate that in order to achieve herd immunity, society may need to get to a critical mass of 70% to 90% of people vaccinated.
Rogan is one of the most influential podcast hosts in the world. His show is broadcast exclusively on Spotify and is the most popular podcast on the platform. He has frequently used his podcast to spread conspiracy theories, espouse dangerous COVID-19 misinformation, and attack trans people.
DAR Comment: Joe Ragan is plainly not a medical expert. He did graduate from Newton South High School in Massachusetts in 1985. He started college at the University of Massachusetts Boston, but dropped out. He may have taken courses in advanced biology and immunology, but maybe not. His main professional accomplishments include stand-up comedian and podcast blogger. His anti-vax opinions are arguably blatantly wrong and misleading. Does Spotify have the legal right to censor or refuse to post Regan's comments, as YouTube previously did? If yes, is a company's blocking of his comments an offensive example of "cancel culture," or a common sense effort by an independent, non-government business to limit patently wrong and harmful ranting by a right-wing nut?
Why would anyone accept comedian and blogger Joe Rogan's information about the utility of a COVID vaccine?
Assuming for the purpose of argument that Joe Rogan's information about lack of purpose for a Covid vaccicnation is blatantly wrong and misleading, why would anyone credit his expertise when ample information suggesting the contrary is available through newspapers, broadcast journalism, and the internet? The common sense response is that people are often imperfect in absorbing information, particularly information that is not congenial to their prejudices. Here is a snippet from the abstract of a recent scholarly article that reflects that thought:
An emerging research consensus finds that corrective information is typically at least somewhat effective at increasing belief accuracy when received by respondents. However, the research that I review suggests that the accuracy-increasing effects of corrective information like fact checks often do not last or accumulate; instead, they frequently seem to decay or be overwhelmed by cues from elites and the media promoting more congenial but less accurate claims. As a result, misperceptions typically persist in public opinion for years after they have been debunked. Given these realities, the primary challenge for scientific communication is not to prevent backfire effects but instead, to understand how to target corrective information better and to make it more effective. Ultimately, however, the best approach is to disrupt the formation of linkages between group identities and false claims and to reduce the flow of cues reinforcing those claims from elites and the media. Doing so will require a shift from a strategy focused on providing information to the public to one that considers the roles of intermediaries in forming and maintaining belief systems.
From the Abstract, Why the backfire effect does not explain the durability of political misperceptions by Brendan Nyhan
https://www.pnas.org/content/118/15/e1912440117
Assuming for the purpose of argument that Joe Rogan's information about lack of purpose for a Covid vaccicnation is blatantly wrong and misleading, why would anyone credit his expertise when ample information suggesting the contrary is available through newspapers, broadcast journalism, and the internet? The common sense response is that people are often imperfect in absorbing information, particularly information that is not congenial to their prejudices. Here is a snippet from the abstract of a recent scholarly article that reflects that thought:
An emerging research consensus finds that corrective information is typically at least somewhat effective at increasing belief accuracy when received by respondents. However, the research that I review suggests that the accuracy-increasing effects of corrective information like fact checks often do not last or accumulate; instead, they frequently seem to decay or be overwhelmed by cues from elites and the media promoting more congenial but less accurate claims. As a result, misperceptions typically persist in public opinion for years after they have been debunked. Given these realities, the primary challenge for scientific communication is not to prevent backfire effects but instead, to understand how to target corrective information better and to make it more effective. Ultimately, however, the best approach is to disrupt the formation of linkages between group identities and false claims and to reduce the flow of cues reinforcing those claims from elites and the media. Doing so will require a shift from a strategy focused on providing information to the public to one that considers the roles of intermediaries in forming and maintaining belief systems.
From the Abstract, Why the backfire effect does not explain the durability of political misperceptions by Brendan Nyhan
https://www.pnas.org/content/118/15/e1912440117
Can employers mandate employees to take fully approved (not emergency approved) vaccines? Probably yes
Pfizer has announced that it will seek full authorization for its COVID vaccine, superseding its current emergency authorization. Moderna is likely to follow.
There has been a lot of speculation about whether employers can require employees to take COVID vaccine when the authorization is merely and emergency authorization. But the issue is different when the vaccine is fully approved by the FDA, as explained in a blog by Brownstein Hyatt Farber Schreck (see https://www.jdsupra.com/legalnews/can-employers-mandate-covid-19-vaccines-6532002/). The blog explains, among other things, that:
Employers generally can mandate “ordinary” vaccines, subject to business considerations, taking into account accommodations that may be required under the American with Disabilities Act, or due to certain medical conditions (such as pregnancy or strong allergies to vaccine components), or for religious reasons. Requests for religious accommodation may be based on objections to the concept of vaccines generally, or specific to a particular vaccine (e.g., gene-based vaccines). This analysis applies in the context of vaccines approved by the FDA through its formal process under which, after consideration of evidence from human studies, the agency determines that vaccines are safe and effective. For example, the FDA has formally approved many influenza vaccines, which in turn have been mandated by some employers (such as health care providers) in accordance with EEOC guidance.
In addition, the The FDCA is a federal regulatory statute that preempts conflicting state laws. This preemptive force should include the individual’s right of refusal of a fully authorized vaccine.
Pfizer has announced that it will seek full authorization for its COVID vaccine, superseding its current emergency authorization. Moderna is likely to follow.
There has been a lot of speculation about whether employers can require employees to take COVID vaccine when the authorization is merely and emergency authorization. But the issue is different when the vaccine is fully approved by the FDA, as explained in a blog by Brownstein Hyatt Farber Schreck (see https://www.jdsupra.com/legalnews/can-employers-mandate-covid-19-vaccines-6532002/). The blog explains, among other things, that:
Employers generally can mandate “ordinary” vaccines, subject to business considerations, taking into account accommodations that may be required under the American with Disabilities Act, or due to certain medical conditions (such as pregnancy or strong allergies to vaccine components), or for religious reasons. Requests for religious accommodation may be based on objections to the concept of vaccines generally, or specific to a particular vaccine (e.g., gene-based vaccines). This analysis applies in the context of vaccines approved by the FDA through its formal process under which, after consideration of evidence from human studies, the agency determines that vaccines are safe and effective. For example, the FDA has formally approved many influenza vaccines, which in turn have been mandated by some employers (such as health care providers) in accordance with EEOC guidance.
In addition, the The FDCA is a federal regulatory statute that preempts conflicting state laws. This preemptive force should include the individual’s right of refusal of a fully authorized vaccine.
Mayor Bowser Announces $350 Million Rent and Utility Assistance Program for DC Residents
https://mayor.dc.gov/release/mayor-bowser-announces-350-million-rent-and-utility-assistance-program-dc-residents
Monday, April 12, 2021
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents
(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
https://mayor.dc.gov/release/mayor-bowser-announces-350-million-rent-and-utility-assistance-program-dc-residents
Monday, April 12, 2021
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents
(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
The NYT questions the ethics of the Trump campaign’s automatic donation multiplier clauses, but are the clauses illegal? Should they be?
A New York Times expose' finds ethically questionable behavior in the Trump campaign’s use of clauses that automatically multiply a donor’s contribution. The NYT article explains that he campaign set up recurring donations by default for online donors. Contributors had to wade through a fine-print disclaimer and manually uncheck a box to opt out. As time went on, the Trump team made that disclaimer increasingly opaque. It introduced a second prechecked box, known internally as a “money bomb,” that doubled a person’s contribution. Eventually its solicitations featured lines of text in bold and capital letters that overwhelmed the opt-out language.
See https://www.nytimes.com/2021/04/03/us/politics/trump-donations.html
The Times writers are careful not to charge that the Trump campaign’s strategies are illegal under state or federal law, and whether they are illegal is a point that could be debated. Several States have statutes that limit automatic renewals in certain contexts. For example, New York, somewhat like California, has a statute that requires, among other things, that companies present “automatic renewal offer terms” in a “clear and conspicuous manner before the subscription or purchasing agreement is fulfilled” and that no consumers’ credit card be changed for renewal without “affirmative consent.” See https://www.natlawreview.com/article/new-york-s-broad-automatic-renewal-law-and-accompanying-compliance-issues-coming
An FTC statement explains that companies have an obligation to explain the details of the deal up front, clearly disclose any automatic renewal terms, get consumers’ express consent before billing, and offer simple ways to cancel. The FTC entered into a $10 million settlement with online learning company ABCmouse for allegedly violating those established consumer protection principles. “The case offers lessons for subscription-based businesses about the perils of snaring customers in a negative option trap.” See https://ftc.gov/news-events/press-releases/2020/09/childrens-online-learning-program-abcmouse-pay-10-million-settle
There is a law reform point implied in the New York Times expose'. Arguably, there ought to be a legislative proposal from a member of Congress clearly prohibiting what the Trump campaign did, if the practice is as unfair and onerous as the Times expose' suggests.
A New York Times expose' finds ethically questionable behavior in the Trump campaign’s use of clauses that automatically multiply a donor’s contribution. The NYT article explains that he campaign set up recurring donations by default for online donors. Contributors had to wade through a fine-print disclaimer and manually uncheck a box to opt out. As time went on, the Trump team made that disclaimer increasingly opaque. It introduced a second prechecked box, known internally as a “money bomb,” that doubled a person’s contribution. Eventually its solicitations featured lines of text in bold and capital letters that overwhelmed the opt-out language.
See https://www.nytimes.com/2021/04/03/us/politics/trump-donations.html
The Times writers are careful not to charge that the Trump campaign’s strategies are illegal under state or federal law, and whether they are illegal is a point that could be debated. Several States have statutes that limit automatic renewals in certain contexts. For example, New York, somewhat like California, has a statute that requires, among other things, that companies present “automatic renewal offer terms” in a “clear and conspicuous manner before the subscription or purchasing agreement is fulfilled” and that no consumers’ credit card be changed for renewal without “affirmative consent.” See https://www.natlawreview.com/article/new-york-s-broad-automatic-renewal-law-and-accompanying-compliance-issues-coming
An FTC statement explains that companies have an obligation to explain the details of the deal up front, clearly disclose any automatic renewal terms, get consumers’ express consent before billing, and offer simple ways to cancel. The FTC entered into a $10 million settlement with online learning company ABCmouse for allegedly violating those established consumer protection principles. “The case offers lessons for subscription-based businesses about the perils of snaring customers in a negative option trap.” See https://ftc.gov/news-events/press-releases/2020/09/childrens-online-learning-program-abcmouse-pay-10-million-settle
There is a law reform point implied in the New York Times expose'. Arguably, there ought to be a legislative proposal from a member of Congress clearly prohibiting what the Trump campaign did, if the practice is as unfair and onerous as the Times expose' suggests.
A Sober Look at SPACs - Investors beware
Yale Journal on Regulation, Forthcoming
Stanford Law and Economics Olin Working Paper No. 559
NYU Law and Economics Research Paper No. 20-48
57 Pages Posted: 16 Nov 2020 Last revised: 6 Mar 2021
Michael KlausnerStanford Law School; European Corporate Governance Institute (ECGI)
Michael OhlroggeNew York University School of Law
Emily Ruanaffiliation not provided to SSRN
Date Written: October 28, 2020
Abstract:
A Special Purpose Acquisition Company (“SPAC”) is a publicly listed firm with a two-year lifespan during which it is expected to find a private company with which to merge and thereby bring public. SPACs have been touted as a cheaper way to go public than an IPO. This paper analyzes the structure of SPACs and the costs built into their structure. We find that costs built into the SPAC structure are subtle, opaque, and far higher than has been previously recognized. Although SPACs raise $10 per share from investors in their IPOs, by the time the median SPAC merges with a target, it holds just $6.67 in cash for each outstanding share. We find, first, that for a large majority of SPACs, post-merger share prices fall, and second, that these price drops are highly correlated with the extent of dilution, or cash shortfall, in a SPAC. This implies that SPAC investors are bearing the cost of the dilution built into the SPAC structure, and in effect subsidizing the companies they bring public. We question whether this is a sustainable situation. We nonetheless propose regulatory measures that would eliminate preferences SPACs enjoy and make them more transparent, and we suggest alternative means by which companies can go public that retain the benefits of SPACs without the costs.
Keywords: SPAC, Securities Law
Suggested Citation:
Klausner, Michael D. and Ohlrogge, Michael and Ruan, Emily, A Sober Look at SPACs (October 28, 2020). Yale Journal on Regulation, Forthcoming, Stanford Law and Economics Olin Working Paper No. 559, NYU Law and Economics Research Paper No. 20-48, Available at SSRN: https://ssrn.com/abstract=3720919 or http://dx.doi.org/10.2139/ssrn.3720919
Download This Paper https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1
Open PDF in Browser https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1&type=2
See also https://www.nytimes.com/2021/03/31/business/dealbook/spac-sponsors.html
Yale Journal on Regulation, Forthcoming
Stanford Law and Economics Olin Working Paper No. 559
NYU Law and Economics Research Paper No. 20-48
57 Pages Posted: 16 Nov 2020 Last revised: 6 Mar 2021
Michael KlausnerStanford Law School; European Corporate Governance Institute (ECGI)
Michael OhlroggeNew York University School of Law
Emily Ruanaffiliation not provided to SSRN
Date Written: October 28, 2020
Abstract:
A Special Purpose Acquisition Company (“SPAC”) is a publicly listed firm with a two-year lifespan during which it is expected to find a private company with which to merge and thereby bring public. SPACs have been touted as a cheaper way to go public than an IPO. This paper analyzes the structure of SPACs and the costs built into their structure. We find that costs built into the SPAC structure are subtle, opaque, and far higher than has been previously recognized. Although SPACs raise $10 per share from investors in their IPOs, by the time the median SPAC merges with a target, it holds just $6.67 in cash for each outstanding share. We find, first, that for a large majority of SPACs, post-merger share prices fall, and second, that these price drops are highly correlated with the extent of dilution, or cash shortfall, in a SPAC. This implies that SPAC investors are bearing the cost of the dilution built into the SPAC structure, and in effect subsidizing the companies they bring public. We question whether this is a sustainable situation. We nonetheless propose regulatory measures that would eliminate preferences SPACs enjoy and make them more transparent, and we suggest alternative means by which companies can go public that retain the benefits of SPACs without the costs.
Keywords: SPAC, Securities Law
Suggested Citation:
Klausner, Michael D. and Ohlrogge, Michael and Ruan, Emily, A Sober Look at SPACs (October 28, 2020). Yale Journal on Regulation, Forthcoming, Stanford Law and Economics Olin Working Paper No. 559, NYU Law and Economics Research Paper No. 20-48, Available at SSRN: https://ssrn.com/abstract=3720919 or http://dx.doi.org/10.2139/ssrn.3720919
Download This Paper https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1
Open PDF in Browser https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1&type=2
See also https://www.nytimes.com/2021/03/31/business/dealbook/spac-sponsors.html
PBS segment on "Renters hit by pandemic juggle assistance, eviction laws"
See PBS NewsHour | Renters hit by pandemic juggle assistance, eviction laws | Season 2021 | PBS
Posting by Don ALlen Resnikoff
PBS reporter John Yang explores the operation of a landlord-tenant court diversion program in Franklin County, Ohio, where an eviction defendant has the benefit of a diversion program which provides landlords and tenants with an alternative to court actions against tenants. The program provides emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.
As I pointed out in an earlier article, a number of jurisdictions have similar programs.
Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
See PBS NewsHour | Renters hit by pandemic juggle assistance, eviction laws | Season 2021 | PBS
Posting by Don ALlen Resnikoff
PBS reporter John Yang explores the operation of a landlord-tenant court diversion program in Franklin County, Ohio, where an eviction defendant has the benefit of a diversion program which provides landlords and tenants with an alternative to court actions against tenants. The program provides emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.
As I pointed out in an earlier article, a number of jurisdictions have similar programs.
Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
Should local regulations require that vehicles commonly used on city streets be equipped with technology that protects pedestrians?
The adult daughter of a family friend was hit by a motor vehicle while she was carefully and legally crossing a street. Tragically, she died as a result. A question that comes to mind is whether there are safety features of vehicles that could avoid such deaths. What are those features, and should they be required on all vehicles, or at least on vehicles commonly used on city streets, such as delivery vehicles.
A GAO report from a few years ago says this:
Automakers have developed vehicle features intended to avoid pedestrian crashes and mitigate the extent of injury to pedestrians. Crash avoidance features (also known as “active” safety features) rely on cameras, radar, and other devices to detect a pedestrian and then act to alert a driver to take action, or automatically apply a vehicle’s brakes to slow or stop the vehicle to avoid striking a pedestrian. One pedestrian crash avoidance system is referred to as pedestrian automatic emergency braking, which uses a camera, radar, or a combination, to automatically apply brakes to avoid a collision.
Crash mitigation features (also known as “passive” safety features) generally involve the use of pedestrian-friendly vehicle components that are designed to reduce the severity of injuries should a pedestrian be hit. Passive safety features can include energy absorbing bumper material, hoods that provide space between the hood and the hard components in the engine compartment, and contoured vehicle front-ends intended to reduce harm to pedestrians.
See https://www.gao.gov/assets/gao-20-419.pdf
The GAO recommends that the National Highway Traffic Safety Administration (NHTSA) have clear testing standards for pedestrian safety technology. A related idea that comes to mind is local regulation that requires vehicles commonly used on city streets to be equipped with technology that protects pedestrians. Taxis and delivery vehicles are examples.
Posting by Don Allen Resnikoff
The adult daughter of a family friend was hit by a motor vehicle while she was carefully and legally crossing a street. Tragically, she died as a result. A question that comes to mind is whether there are safety features of vehicles that could avoid such deaths. What are those features, and should they be required on all vehicles, or at least on vehicles commonly used on city streets, such as delivery vehicles.
A GAO report from a few years ago says this:
Automakers have developed vehicle features intended to avoid pedestrian crashes and mitigate the extent of injury to pedestrians. Crash avoidance features (also known as “active” safety features) rely on cameras, radar, and other devices to detect a pedestrian and then act to alert a driver to take action, or automatically apply a vehicle’s brakes to slow or stop the vehicle to avoid striking a pedestrian. One pedestrian crash avoidance system is referred to as pedestrian automatic emergency braking, which uses a camera, radar, or a combination, to automatically apply brakes to avoid a collision.
Crash mitigation features (also known as “passive” safety features) generally involve the use of pedestrian-friendly vehicle components that are designed to reduce the severity of injuries should a pedestrian be hit. Passive safety features can include energy absorbing bumper material, hoods that provide space between the hood and the hard components in the engine compartment, and contoured vehicle front-ends intended to reduce harm to pedestrians.
See https://www.gao.gov/assets/gao-20-419.pdf
The GAO recommends that the National Highway Traffic Safety Administration (NHTSA) have clear testing standards for pedestrian safety technology. A related idea that comes to mind is local regulation that requires vehicles commonly used on city streets to be equipped with technology that protects pedestrians. Taxis and delivery vehicles are examples.
Posting by Don Allen Resnikoff
In April, 2020, SCOTUS decided that nonunanimous jury convictions in criminal cases are unconstitutional. A recent PBS program tells the stories of people previously convicted by nonunanimous juries.
Posting by Don Allen Resnikoff
In April, 2020, The Supreme Court of the United States ruled in Ramos v. Louisiana, 590 U.S. ___ (2020) [see https://supreme.justia.com/cases/federal/us/590/18-5924/] that nonunanimous jury convictions are unconstitutional. At the time, Oregon and Louisiana, were the only two states which still allowed nonunanimous jury convictions.
From Justice Gorsuch’s opinion for the majority in Ramos v. Louisiana:
Why do Louisiana and Oregon allow nonunanimous convictions? Though it’s hard to say why these laws persist, their origins are clear. Louisiana first endorsed nonunanimous verdicts for serious crimes at a constitutional convention in 1898. According to one committee chairman, the avowed purpose of that convention was to “establish the supremacy of the white race,” and the resulting document included many of the trappings of the Jim Crow era: a poll tax, a combined literacy and property ownership test, and a grandfather clause that in practice exempted white residents from the most onerous of these requirements.1 Nor was it only the prospect of African-Americans voting that concerned the delegates. Just a week before the convention, the U. S. Senate passed a resolution calling for an investigation into whether Louisiana was systemically excluding African-Americans from juries. Seeking to avoid unwanted national attention, and aware that this Court would strike down any policy of overt discrimination against African-American jurors as a violation of the Fourteenth Amendment, the delegates sought to undermine African-American participation on juries in another way. With a careful eye on racial demographics, the convention delegates sculpted a “facially race-neutral” rule permitting 10-to-2 verdicts in order “to ensure that African-American juror service would be meaningless.” Adopted in the 1930s, Oregon’s rule permitting nonunanimous verdicts can be similarly traced to the rise of the Ku Klux Klan and efforts to dilute “the influence of racial, ethnic, and religious minorities on Oregon juries.”
With regard to hardship caused in Louisiana and Oregon to State government burdened with retrials of nonunanimous jury convictions, Justice Gorsuch wrote:
[P]rior convictions in only two States are potentially affected by our judgment. Those States credibly claim that the number of nonunanimous felony convictions still on direct appeal are somewhere in the hundreds, and retrying or plea bargaining these cases will surely impose a cost. But new rules of criminal procedures usually do . . . .
So, what are the stories of people previously convicted by nonunanimous juries? That is the focus of a recently broadcast PBS segment:
https://www.thirteen.org/programs/pbs-newshour/non-unanimous-juries-were-outlawed-why-two-states-used-them-1616964936/
Capital requirements for banks: Is the Fed pruning its magic money tree?
Current news headlines are that the Fed has decided to end temporary exemptions from capital requirements for banks. See https://www.nytimes.com/2021/03/19/business/economy/federal-reserve-bank-leverage.html
That news is just one development in a long simmering controversy about whether regulators should impose stringent capital requirements on banks in order to preserve bank stability, that is, to avoid the sort of instability that affected banks in the 2008 financial crisis.
In their book The Bankers New Clothes, authors Admati and Hellwig argued that string capital requirements are crucial. See http://bankersnewclothes.com/ That website includes two videos of Ms. Admati explaining her views.
The New York Times very briefly summarized Ms. Admati's views as follows:
Ms. Admati’s simple message is that the government is overlooking the best way to strengthen the financial system. Regulators, she says, need to worry less about what banks do with their money, and more about where the money comes from.
Companies other than banks get money mostly by selling shares to investors or by reinvesting profits. Banks, by contrast, can rely almost entirely on borrowed funds, including the money they get from depositors. Ms. Admati argues that banks are taking larger risks than other kinds of companies because they use other people’s money, and the results are that they keep crashing the economy.
Her solution is to make banks behave more like other companies by forcing them to reduce sharply their reliance on borrowed money. That would likely make the banking industry more stodgy and less profitable — reducing the economic risks, the executive bonuses and, for shareholders, both the risks and the profits. https://www.nytimes.com/2014/08/10/business/when-she-talks-banks-shudder.html#after-story-ad-1
It is important to note that the Admati view about substantial capital requirements for banks is opposed by some. Some opposition comes from what may be called the "magic money tree" theory about banking: "All money comes from a magic tree, in the sense that money is spirited from thin air. There is no gold standard. Banks do not work to a money-multiplier model, where they extend loans as a multiple of the deposits they already hold. Money is created on faith alone, whether that is faith in ever-increasing housing prices or any other given investment." The magic money tree idea is discussed, and rebutted, in an article at https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/?sh=6ffaa3883073
Posting by Don Allen Resnikoff
Current news headlines are that the Fed has decided to end temporary exemptions from capital requirements for banks. See https://www.nytimes.com/2021/03/19/business/economy/federal-reserve-bank-leverage.html
That news is just one development in a long simmering controversy about whether regulators should impose stringent capital requirements on banks in order to preserve bank stability, that is, to avoid the sort of instability that affected banks in the 2008 financial crisis.
In their book The Bankers New Clothes, authors Admati and Hellwig argued that string capital requirements are crucial. See http://bankersnewclothes.com/ That website includes two videos of Ms. Admati explaining her views.
The New York Times very briefly summarized Ms. Admati's views as follows:
Ms. Admati’s simple message is that the government is overlooking the best way to strengthen the financial system. Regulators, she says, need to worry less about what banks do with their money, and more about where the money comes from.
Companies other than banks get money mostly by selling shares to investors or by reinvesting profits. Banks, by contrast, can rely almost entirely on borrowed funds, including the money they get from depositors. Ms. Admati argues that banks are taking larger risks than other kinds of companies because they use other people’s money, and the results are that they keep crashing the economy.
Her solution is to make banks behave more like other companies by forcing them to reduce sharply their reliance on borrowed money. That would likely make the banking industry more stodgy and less profitable — reducing the economic risks, the executive bonuses and, for shareholders, both the risks and the profits. https://www.nytimes.com/2014/08/10/business/when-she-talks-banks-shudder.html#after-story-ad-1
It is important to note that the Admati view about substantial capital requirements for banks is opposed by some. Some opposition comes from what may be called the "magic money tree" theory about banking: "All money comes from a magic tree, in the sense that money is spirited from thin air. There is no gold standard. Banks do not work to a money-multiplier model, where they extend loans as a multiple of the deposits they already hold. Money is created on faith alone, whether that is faith in ever-increasing housing prices or any other given investment." The magic money tree idea is discussed, and rebutted, in an article at https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/?sh=6ffaa3883073
Posting by Don Allen Resnikoff
The NY AG suit against Amazon for failing to provide workplace safety
ViewDocument (state.ny.us) https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=muvelgaOEvSt6Yc1gGqzAg==V
excerpt:
3. Throughout the historic pandemic, Amazon has repeatedly and persistently failed to comply with its obligation to institute reasonable and adequate measures to protect its workers from the spread of the virus in its New York City facilities JFK8, a Staten Island fulfillment center, and DBK1, a Queens distribution center. Amazon’s flagrant disregard for health and safety requirements has threatened serious illness and grave harm to the thousands of workers in these facilities and poses a continued substantial and specific danger to the public health.
4. Since at least March 2020 when the COVID-19 outbreak began to devastate New York City, Amazon failed to comply with requirements for cleaning and disinfection when infected workers had been present in its facilities; Amazon failed to adequately identify and notify potential contacts of such infected workers; and Amazon failed to ensure that its discipline and productivity policies, and productivity rates automated by line-speeds, permitted its employees to take the time necessary to engage in hygiene, sanitation, social-distancing, and necessary cleaning practices.
5. When Amazon employees began to object to Amazon’s inadequate practices and to make complaints to Amazon management, government agencies, and the media, Amazon took swift retaliatory action to silence workers’ complaints. In late-March 2020, Amazon fired employee Christian Smalls, and in early-April 2020, Amazon issued a final written warning to employee Derrick Palmer. Amazon’s actions against these visible critics who advocated for Amazon to fully comply with legal health requirements sent a chilling message to other Amazon employees.
6. Amazon’s response to the pandemic continues to be deficient.
ViewDocument (state.ny.us) https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=muvelgaOEvSt6Yc1gGqzAg==V
excerpt:
3. Throughout the historic pandemic, Amazon has repeatedly and persistently failed to comply with its obligation to institute reasonable and adequate measures to protect its workers from the spread of the virus in its New York City facilities JFK8, a Staten Island fulfillment center, and DBK1, a Queens distribution center. Amazon’s flagrant disregard for health and safety requirements has threatened serious illness and grave harm to the thousands of workers in these facilities and poses a continued substantial and specific danger to the public health.
4. Since at least March 2020 when the COVID-19 outbreak began to devastate New York City, Amazon failed to comply with requirements for cleaning and disinfection when infected workers had been present in its facilities; Amazon failed to adequately identify and notify potential contacts of such infected workers; and Amazon failed to ensure that its discipline and productivity policies, and productivity rates automated by line-speeds, permitted its employees to take the time necessary to engage in hygiene, sanitation, social-distancing, and necessary cleaning practices.
5. When Amazon employees began to object to Amazon’s inadequate practices and to make complaints to Amazon management, government agencies, and the media, Amazon took swift retaliatory action to silence workers’ complaints. In late-March 2020, Amazon fired employee Christian Smalls, and in early-April 2020, Amazon issued a final written warning to employee Derrick Palmer. Amazon’s actions against these visible critics who advocated for Amazon to fully comply with legal health requirements sent a chilling message to other Amazon employees.
6. Amazon’s response to the pandemic continues to be deficient.
The FCC approves emergency program to bring high speed internet to the underserved - local implementation required
DAR Comment: The FCC's emergency program establishes the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic. The Order explains that virtual learning, telemedicine, and telework have increased every household’s need for access to broadband services. The cost of broadband services can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
The Washington Post explains that many will see their Internet bills reduced by as much as $50 a month in credits paid to their Internet service providers, and residents of tribal areas are eligible for even larger discounts. However, "It may take up to two months before Americans can take advantage of it; the government must still fine-tune its systems so that families can apply for, and providers can receive, the emergency benefits. That task is likely to be a tall one for Washington, which historically has struggled to deploy complicated technology under tight time constraints." See https://www.washingtonpost.com/technology/2021/02/26/broadband-internet-subsidies-coronavirus/
The Post reports that AT&T has said that it intends to participate. CenturyLink, Charter, Comcast, Frontier, T-Mobile and Verizon did not immediately commit to accepting the emergency benefits, although many companies and their trade groups have said in recent days they support the FCC’s work and intend to review its new implementing rules.
The FCC has announced that it is mobilizing people and organizations to help share important consumer information about the Emergency Broadband Benefit. Since iImplementation of the FCC emergency internet program turns on efforts of btoadband providers, one thing that public interest organizations might do is to encourage and applaud efforts by broadband providers to participate in and supplement the FCC initiative on broadband for the underserved.
The FCC Order: https://docs.fcc.gov/public/attachments/FCC-21-29A1.pdf
From the Introduction:
In this Order, we establish the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic.1 Efforts to slow the spread of COVID-19 have resulted in the dramatic disruption of many aspects of Americans’ lives, including social distancing measures to prevent person-to-person transmission that have required the closure of businesses and schools across the country for indefinite periods of times, which in turn has caused millions of Americans to become newly unemployed or unable to find work. These closures have also led people to turn to virtual learning, telemedicine, and telework to enable social distancing measures, which has only increased every household’s need for access to broadband services. The cost of broadband services, however, can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
Excerpt from Provider Election Process to Participate in the Emergency Broadband Benefit Program
21. We direct USAC, under the supervision of and in coordination with the Bureau, to establish and administer a process to enable all participating EBB Program [broadband service] providers to file election notices containing information sufficient to effectively administer the program. We direct USAC to collect information in such notices that includes: (1) the states in which the provider plans to participate in the EBB Program; (2) a statement that, in each such state, the provider was a “broadband provider” as of December 1, 2020; (3) a list of states where the provider is an existing ETC, if any; (4) a list of states where the provider received FCC approval, whether automatic or expedited, to participate, if any; (5) whether the provider intends to distribute connected devices under the EBB Program; (6) a description of the Internet service offerings for which the provider plans to seek reimbursement from the EBB Program in each state; (7) documentation demonstrating the standard rates for those services; and (8) any other administrative information necessary for USAC to establish participating providers in the EBB Program.
DAR Comment: It makes sense for local government and citizen groups to follow up with local broadband providers concerning utilization of the FCC initiative
DAR Comment: The FCC's emergency program establishes the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic. The Order explains that virtual learning, telemedicine, and telework have increased every household’s need for access to broadband services. The cost of broadband services can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
The Washington Post explains that many will see their Internet bills reduced by as much as $50 a month in credits paid to their Internet service providers, and residents of tribal areas are eligible for even larger discounts. However, "It may take up to two months before Americans can take advantage of it; the government must still fine-tune its systems so that families can apply for, and providers can receive, the emergency benefits. That task is likely to be a tall one for Washington, which historically has struggled to deploy complicated technology under tight time constraints." See https://www.washingtonpost.com/technology/2021/02/26/broadband-internet-subsidies-coronavirus/
The Post reports that AT&T has said that it intends to participate. CenturyLink, Charter, Comcast, Frontier, T-Mobile and Verizon did not immediately commit to accepting the emergency benefits, although many companies and their trade groups have said in recent days they support the FCC’s work and intend to review its new implementing rules.
The FCC has announced that it is mobilizing people and organizations to help share important consumer information about the Emergency Broadband Benefit. Since iImplementation of the FCC emergency internet program turns on efforts of btoadband providers, one thing that public interest organizations might do is to encourage and applaud efforts by broadband providers to participate in and supplement the FCC initiative on broadband for the underserved.
The FCC Order: https://docs.fcc.gov/public/attachments/FCC-21-29A1.pdf
From the Introduction:
In this Order, we establish the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic.1 Efforts to slow the spread of COVID-19 have resulted in the dramatic disruption of many aspects of Americans’ lives, including social distancing measures to prevent person-to-person transmission that have required the closure of businesses and schools across the country for indefinite periods of times, which in turn has caused millions of Americans to become newly unemployed or unable to find work. These closures have also led people to turn to virtual learning, telemedicine, and telework to enable social distancing measures, which has only increased every household’s need for access to broadband services. The cost of broadband services, however, can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
Excerpt from Provider Election Process to Participate in the Emergency Broadband Benefit Program
21. We direct USAC, under the supervision of and in coordination with the Bureau, to establish and administer a process to enable all participating EBB Program [broadband service] providers to file election notices containing information sufficient to effectively administer the program. We direct USAC to collect information in such notices that includes: (1) the states in which the provider plans to participate in the EBB Program; (2) a statement that, in each such state, the provider was a “broadband provider” as of December 1, 2020; (3) a list of states where the provider is an existing ETC, if any; (4) a list of states where the provider received FCC approval, whether automatic or expedited, to participate, if any; (5) whether the provider intends to distribute connected devices under the EBB Program; (6) a description of the Internet service offerings for which the provider plans to seek reimbursement from the EBB Program in each state; (7) documentation demonstrating the standard rates for those services; and (8) any other administrative information necessary for USAC to establish participating providers in the EBB Program.
DAR Comment: It makes sense for local government and citizen groups to follow up with local broadband providers concerning utilization of the FCC initiative
Before Boulder shooting, NRA victory blocking local gun control
A Colorado judge blocked Boulder from enforcing its two-year-old assault rifle ban on March 12, ruling it violated a 2003 state law prohibiting municipalities from enacting their own firearms regulations. Boulder city spokeswoman Shannon Aulabaugh said city attorneys would meet to decide on whether to appeal the ruling by Boulder County District Court Judge Andrew Hartman, The Denver Post reported March 18, but in the meantime, the Boulder Police Department wouldn't enforce the ban on AR-15-style rifles and large-capacity magazines.
The National Rifle Association celebrated the ruling last Tuesday, noting its supporting role in striking down the ban. A week later, a gunman opened fire in a Boulder supermarket, killing 10 people, including a Boulder Police officer.
Source: Yahoo News
A Colorado judge blocked Boulder from enforcing its two-year-old assault rifle ban on March 12, ruling it violated a 2003 state law prohibiting municipalities from enacting their own firearms regulations. Boulder city spokeswoman Shannon Aulabaugh said city attorneys would meet to decide on whether to appeal the ruling by Boulder County District Court Judge Andrew Hartman, The Denver Post reported March 18, but in the meantime, the Boulder Police Department wouldn't enforce the ban on AR-15-style rifles and large-capacity magazines.
The National Rifle Association celebrated the ruling last Tuesday, noting its supporting role in striking down the ban. A week later, a gunman opened fire in a Boulder supermarket, killing 10 people, including a Boulder Police officer.
Source: Yahoo News
To get rich, become a doctor or a lawyer. My mother said it years ago, and now David Brooks of the NYT says it -- Don Allen Resnikoff
Excerpt from Brooks NYT column:
So what profession is most likely to get you rich? Medicine! You get to save lives and make bank all at once! One third of doctors overall, including about 58.6 percent of surgeons, are in the top one percent of earners. There are more doctors and surgeons in the top one percent than any other job category. According to Rothwell’s book, in Spain, Sweden and Iceland, doctors earn twice as much as the average worker, but in the United States physicians and surgeons earn nearly five times as much.
Why is that? First, there’s our screwed-up health care system in which nearly 18 percent of gross domestic product flows into medicine and disproportionately toward a relatively small number of doctors. Second, there are huge barriers of entry into that profession — including, of course, the strenuous education that’s required. The number of medical school students is limited. In 2018-2019, only 41 percent of applicants who applied to medical school actually got into one. Plus, a 1997 federal law capped the number of residency slots that Medicare funds would support.
It typically takes a minimum of 11 years of difficult training to become a doctor, costing hundreds of thousands of dollars. Once you’re a doctor, you are protected by state laws from competition from lower cost workers. Rothwell cites research suggesting that nurse practitioners and dental hygienists can perform many duties now done by doctors and dentists, at lower cost.
If you’re squeamish around blood, you can go into law. Census data for 2019 shows that about 14.5 percent of lawyers are in the top one percent of earners. And for some of the same reasons: high barriers to entry, limits on competition from less costly alternatives and limits on innovation. For example, in most states it’s illegal for a nonlawyer to own a law firm. If some MBA has an innovative idea for how to streamline practices, she is not allowed to start a firm and use that idea.
https://www.nytimes.com/2021/02/25/opinion/inequality-medicine-law.html?
Don Resnikoff comment:
I won't comment about being a doctor, but since I've worked as a lawyer for many years I will comment about that. For starters, I am not now and have never been within the top 1% of earners, or even close. I am financially comfortable, as they say, at a modest level.
Next, while I have had a good career as a lawyer, mostly in public service, with stints in private practice, I've had to take the bad with the good. I'll mention just one bad here, because it has been on my mind recently. It is that cases I've worked on tend to go on for a very long time. Working on those cases has been interesting for me, but protracted litigation can disserve the goal of achieving a just result.
One famous example is US v IBM. The case took roughly 700 trial days over seven years. I was not on the case for all seven years, just the last few after the Government rested its affirmative case. A 1981 New York Times article says "The judge presiding over the Federal Government's antitrust case against the International Business Machines Corporation set a June 1 deadline yesterday for the six-year-old trial to end. . . . He indicated yesterday that since the trial was near its end, both sides should be able to meet the deadline easily. Thomas D. Barr, I.B.M.'s lead attorney, said I.B.M. would have no trouble meeting the deadline. Donald A. Resnikoff, of the Justice Department, agreed the deadline was desirable but expressed reservations."
I can't now recall what my reservations were, and I haven't gone back to check the transcript.
Much later, after I retired from USDOJ, I worked for the DC AG's Office on antitrust matters, and was assigned to assist one of the State groups working on the US and State AG case against Microsoft. The suit began on May 18, 1998, with the U.S. Department of Justice and the AGs of twenty U.S. states and the District of Columbia suing Microsoft for illegally thwarting competition in order to protect and extend its software monopoly. In June, 2004, a U.S. appeals court unanimously approved settlement of the case, rejecting objections of the District of Columbia, among others, that the settlement sanctions were inadequate. (See Wikipedia for a short summary.)
My private practice experience has been similar with regard to long cases. In 2011 I was one of two attorneys who signed a Complaint concerning bank and payment system practices affecting the ATM industry. The case is still in active litigation 10 years later, although I no longer work on it.
In 2014 I began work on a case for a gasoline station operator concerning disputed franchise arrangements. Litigation began in 2016, and is still ongoing. Again, I will not work on the litigation through to the end. A younger lawyer will do that.
The long cases I've mentioned have been extremely interesting to me, and arguably even somewhat important. But the time required to bring them to conclusion is frustrating . Delay means expense for the litigants, with a just result being deferred, or worse. In both the government IBM and Microsoft cases, the disadvantaged competitors and their technologies that were at issue when the litigations began were no longer available for rescue by the time the cases ended.
Excerpt from Brooks NYT column:
So what profession is most likely to get you rich? Medicine! You get to save lives and make bank all at once! One third of doctors overall, including about 58.6 percent of surgeons, are in the top one percent of earners. There are more doctors and surgeons in the top one percent than any other job category. According to Rothwell’s book, in Spain, Sweden and Iceland, doctors earn twice as much as the average worker, but in the United States physicians and surgeons earn nearly five times as much.
Why is that? First, there’s our screwed-up health care system in which nearly 18 percent of gross domestic product flows into medicine and disproportionately toward a relatively small number of doctors. Second, there are huge barriers of entry into that profession — including, of course, the strenuous education that’s required. The number of medical school students is limited. In 2018-2019, only 41 percent of applicants who applied to medical school actually got into one. Plus, a 1997 federal law capped the number of residency slots that Medicare funds would support.
It typically takes a minimum of 11 years of difficult training to become a doctor, costing hundreds of thousands of dollars. Once you’re a doctor, you are protected by state laws from competition from lower cost workers. Rothwell cites research suggesting that nurse practitioners and dental hygienists can perform many duties now done by doctors and dentists, at lower cost.
If you’re squeamish around blood, you can go into law. Census data for 2019 shows that about 14.5 percent of lawyers are in the top one percent of earners. And for some of the same reasons: high barriers to entry, limits on competition from less costly alternatives and limits on innovation. For example, in most states it’s illegal for a nonlawyer to own a law firm. If some MBA has an innovative idea for how to streamline practices, she is not allowed to start a firm and use that idea.
https://www.nytimes.com/2021/02/25/opinion/inequality-medicine-law.html?
Don Resnikoff comment:
I won't comment about being a doctor, but since I've worked as a lawyer for many years I will comment about that. For starters, I am not now and have never been within the top 1% of earners, or even close. I am financially comfortable, as they say, at a modest level.
Next, while I have had a good career as a lawyer, mostly in public service, with stints in private practice, I've had to take the bad with the good. I'll mention just one bad here, because it has been on my mind recently. It is that cases I've worked on tend to go on for a very long time. Working on those cases has been interesting for me, but protracted litigation can disserve the goal of achieving a just result.
One famous example is US v IBM. The case took roughly 700 trial days over seven years. I was not on the case for all seven years, just the last few after the Government rested its affirmative case. A 1981 New York Times article says "The judge presiding over the Federal Government's antitrust case against the International Business Machines Corporation set a June 1 deadline yesterday for the six-year-old trial to end. . . . He indicated yesterday that since the trial was near its end, both sides should be able to meet the deadline easily. Thomas D. Barr, I.B.M.'s lead attorney, said I.B.M. would have no trouble meeting the deadline. Donald A. Resnikoff, of the Justice Department, agreed the deadline was desirable but expressed reservations."
I can't now recall what my reservations were, and I haven't gone back to check the transcript.
Much later, after I retired from USDOJ, I worked for the DC AG's Office on antitrust matters, and was assigned to assist one of the State groups working on the US and State AG case against Microsoft. The suit began on May 18, 1998, with the U.S. Department of Justice and the AGs of twenty U.S. states and the District of Columbia suing Microsoft for illegally thwarting competition in order to protect and extend its software monopoly. In June, 2004, a U.S. appeals court unanimously approved settlement of the case, rejecting objections of the District of Columbia, among others, that the settlement sanctions were inadequate. (See Wikipedia for a short summary.)
My private practice experience has been similar with regard to long cases. In 2011 I was one of two attorneys who signed a Complaint concerning bank and payment system practices affecting the ATM industry. The case is still in active litigation 10 years later, although I no longer work on it.
In 2014 I began work on a case for a gasoline station operator concerning disputed franchise arrangements. Litigation began in 2016, and is still ongoing. Again, I will not work on the litigation through to the end. A younger lawyer will do that.
The long cases I've mentioned have been extremely interesting to me, and arguably even somewhat important. But the time required to bring them to conclusion is frustrating . Delay means expense for the litigants, with a just result being deferred, or worse. In both the government IBM and Microsoft cases, the disadvantaged competitors and their technologies that were at issue when the litigations began were no longer available for rescue by the time the cases ended.
WashPost on right to counsel in civil cases
editorial excerpt:
Most European countries have long-standing rules granting a right to counsel to litigants in property and monetary cases, as well as ones in which life and liberty hang in the balance. In England, Parliament acted more than 500 years ago to ensure that paupers would be provided lawyers when suing in King Henry VII’s courts; that right found its way into laws in some of the original 13 colonies.
In today’s United States, lawmakers and judges have carved out a hodgepodge, varying wildly from state to state and even by locality, under which certain at-risk individuals may qualify for court-appointed counsel in some types of civil matters. In most states, for instance, that’s the case when authorities seek to remove children permanently from their parents and send them to foster care, owing to alleged neglect or abuse. In a handful of big cities, other laws enacted in recent years grant a right to counsel to tenants facing eviction, an event that often triggers a cascade of other problems, such as homelessness.
Far more often, however, poor people unversed in the law are on their own when states have not specified a right to counsel and judges cannot or will not provide one. That produces appalling results across a range of legal disputes.
https://www.washingtonpost.com/opinions/2021/02/26/noncriminal-cases-right-to-lawyer-representation/?arc404=true
editorial excerpt:
Most European countries have long-standing rules granting a right to counsel to litigants in property and monetary cases, as well as ones in which life and liberty hang in the balance. In England, Parliament acted more than 500 years ago to ensure that paupers would be provided lawyers when suing in King Henry VII’s courts; that right found its way into laws in some of the original 13 colonies.
In today’s United States, lawmakers and judges have carved out a hodgepodge, varying wildly from state to state and even by locality, under which certain at-risk individuals may qualify for court-appointed counsel in some types of civil matters. In most states, for instance, that’s the case when authorities seek to remove children permanently from their parents and send them to foster care, owing to alleged neglect or abuse. In a handful of big cities, other laws enacted in recent years grant a right to counsel to tenants facing eviction, an event that often triggers a cascade of other problems, such as homelessness.
Far more often, however, poor people unversed in the law are on their own when states have not specified a right to counsel and judges cannot or will not provide one. That produces appalling results across a range of legal disputes.
https://www.washingtonpost.com/opinions/2021/02/26/noncriminal-cases-right-to-lawyer-representation/?arc404=true
Public Citizen wants WTO to waive IP protections to aid international distribution of vaccines
EXCERPT from https://www.citizen.org/article/rethinking-trade-podcast-u-s-officials-are-blocking-global-covid-19-vaccine-access-at-the-wto/
World Trade Organization (WTO) rules undermine access to COVID-19 vaccines and medicines. That’s why scores of countries are demanding that the WTO’s monopoly protections for pharmaceutical corporations be temporarily waived so COVID-19 vaccines and treatments can be produced worldwide. This is essential to ensure enough affordable doses to end the pandemic and save lives. But U.S. trade officials are blocking the waiver, insisting that even during this deadly global pandemic, Big Pharma profits should come first. The question is: Will this position change under a Biden administration?
EXCERPT from https://www.citizen.org/article/rethinking-trade-podcast-u-s-officials-are-blocking-global-covid-19-vaccine-access-at-the-wto/
World Trade Organization (WTO) rules undermine access to COVID-19 vaccines and medicines. That’s why scores of countries are demanding that the WTO’s monopoly protections for pharmaceutical corporations be temporarily waived so COVID-19 vaccines and treatments can be produced worldwide. This is essential to ensure enough affordable doses to end the pandemic and save lives. But U.S. trade officials are blocking the waiver, insisting that even during this deadly global pandemic, Big Pharma profits should come first. The question is: Will this position change under a Biden administration?
Lori Wallach of Public Citizen on US reliance on overseas production for COVID gear
EXCERPT from https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf:
As production of key parts and assembly of goods in diverse sectors has become both geographically concentrated and concentrated in fewer companies,whenproduction in a key country, region or company is disrupted –whether by illness in the current instance or natural disaster, war or other calamity–world supplies are affected. Experts have warned about the perils of hyperglobalized supply chains for years. As Barry Lynn’s 2005 book “End of the Line”warned: “In September 1999, an earthquake devastated much of Taiwan, toppling buildings, knocking out electricity, and killing 2,500 people. Within days, factories as far away as California and Texas began to close. Cut off from their supplies of semiconductor chips, companies like Dell and Hewlett-Packard began to shutter assembly lines and send workers home. A disaster that only a decade earlier would have been mainly local in nature almost cascaded into a grave global crisis. The quake, in an instant, illustrated just how closely connected the world had become and just how radically different are the risks we all now face.”1The COVID-19 crisis forced people throughout the United States to recognize a problem previously mainly experienced by those in venues hurt by outsourcing and trade-related job loss: The United States no longer can make many basic goods it needs.
https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf
EXCERPT from https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf:
As production of key parts and assembly of goods in diverse sectors has become both geographically concentrated and concentrated in fewer companies,whenproduction in a key country, region or company is disrupted –whether by illness in the current instance or natural disaster, war or other calamity–world supplies are affected. Experts have warned about the perils of hyperglobalized supply chains for years. As Barry Lynn’s 2005 book “End of the Line”warned: “In September 1999, an earthquake devastated much of Taiwan, toppling buildings, knocking out electricity, and killing 2,500 people. Within days, factories as far away as California and Texas began to close. Cut off from their supplies of semiconductor chips, companies like Dell and Hewlett-Packard began to shutter assembly lines and send workers home. A disaster that only a decade earlier would have been mainly local in nature almost cascaded into a grave global crisis. The quake, in an instant, illustrated just how closely connected the world had become and just how radically different are the risks we all now face.”1The COVID-19 crisis forced people throughout the United States to recognize a problem previously mainly experienced by those in venues hurt by outsourcing and trade-related job loss: The United States no longer can make many basic goods it needs.
https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf
WSJ:WeWork’s Adam Neumann to Get Extra $50 Million Payout in SoftBank SettlementDeal
By
Maureen Farrell
and
Eliot Brown
Updated Feb. 24, 2021 10:13 pm ET
WeWork co-founder and former Chief Executive Adam Neumann is set to reap an extra $50 million windfall and other benefits as part of an agreement that would settle a bitter dispute he and other early investors in the shared-office-space provider have waged with SoftBank Group Corp., according to people familiar with the matter.
As The Wall Street Journal reported earlier this week, the parties are closing in on a deal in which SoftBank, WeWork’s majority shareholder, would buy about $1.5 billion of stock from other investors, including nearly $500 million from Mr. Neumann. That is about half as much as it previously planned to buy.
But part of the deal not previously reported sets Mr. Neumann apart from other shareholders. It calls for SoftBank to give the 41-year-old the $50 million special payout and extend by five years a $430 million loan it made to him in late 2019, the people said. SoftBank is also slated to pay $50 million for Mr. Neumann’s legal fees. It isn’t clear how much it is paying for the other shareholders’ legal fees.
The settlement between SoftBank, Mr. Neumann and the other shareholders isn’t final and the terms could still change, the people cautioned. Should the parties reach agreement, potentially in the next few days, it would avert an early-March trial.
WeWork is separately negotiating a combination with a special-purpose acquisition company called BowX Acquisition Corp. that would provide the startup with a public listing, people familiar with the discussions said. While the talks could still fall apart and other options are being considered, WeWork and BowX could reach agreement as soon as next week, some of the people said.
_
Excerpts from The New Yorker: “How Venture Capitalists Are Deforming Capitalism”
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
By
Maureen Farrell
and
Eliot Brown
Updated Feb. 24, 2021 10:13 pm ET
WeWork co-founder and former Chief Executive Adam Neumann is set to reap an extra $50 million windfall and other benefits as part of an agreement that would settle a bitter dispute he and other early investors in the shared-office-space provider have waged with SoftBank Group Corp., according to people familiar with the matter.
As The Wall Street Journal reported earlier this week, the parties are closing in on a deal in which SoftBank, WeWork’s majority shareholder, would buy about $1.5 billion of stock from other investors, including nearly $500 million from Mr. Neumann. That is about half as much as it previously planned to buy.
But part of the deal not previously reported sets Mr. Neumann apart from other shareholders. It calls for SoftBank to give the 41-year-old the $50 million special payout and extend by five years a $430 million loan it made to him in late 2019, the people said. SoftBank is also slated to pay $50 million for Mr. Neumann’s legal fees. It isn’t clear how much it is paying for the other shareholders’ legal fees.
The settlement between SoftBank, Mr. Neumann and the other shareholders isn’t final and the terms could still change, the people cautioned. Should the parties reach agreement, potentially in the next few days, it would avert an early-March trial.
WeWork is separately negotiating a combination with a special-purpose acquisition company called BowX Acquisition Corp. that would provide the startup with a public listing, people familiar with the discussions said. While the talks could still fall apart and other options are being considered, WeWork and BowX could reach agreement as soon as next week, some of the people said.
_
Excerpts from The New Yorker: “How Venture Capitalists Are Deforming Capitalism”
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
Annals of the law: "viewed in context, Mr. Carlson cannot be understood to have been stating facts"
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK KAREN MCDOUGAL, Plaintiff, -againstFOX NEWS NETWORK, LLC Defendant. 1:19-cv-11161 (MKV) OPINION AND ORDER GRANTING MOTION TO DISMISS MARY KAY VYSKOCIL, United States District Judge 9/24/2020:
Excerpts:
Fox News first argues that, viewed in context, Mr. Carlson cannot be understood to have been stating facts, but instead that he was delivering an opinion using hyperbole for effect. See Def. Br. at 12-15. Fox News cites to a litany of cases which hold that accusing a person of “extortion” or “blackmail” simply is “rhetorical hyperbole,” incapable of being defamatory.
* * *
Plaintiff Karen McDougal filed this action asserting a single claim of slander per se after she allegedly was defamed by a segment on the popular program “Tucker Carlson Tonight,” which is produced by Defendant Fox News Network, LLC (“Fox News”) and airs on Fox News Channel. Specifically, Ms. McDougal alleges that the host of the show, Tucker Carlson, accused her of extorting now-President Donald J. Trump out of approximately $150,000 in exchange for her silence about an alleged affair between Ms. McDougal and President Trump. After the case was removed from New York state court, Fox News moved to dismiss Ms. McDougal’s claim on the grounds that Mr. Carlson’s statements were not statements of fact and that she failed adequately to allege actual malice. For the reasons stated herein, Fox News’s Motion to Dismiss is GRANTED.
https://images.law.com/contrib/content/uploads/documents/389/116288/McDougal-Defamation-Dismiss.pdf
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK KAREN MCDOUGAL, Plaintiff, -againstFOX NEWS NETWORK, LLC Defendant. 1:19-cv-11161 (MKV) OPINION AND ORDER GRANTING MOTION TO DISMISS MARY KAY VYSKOCIL, United States District Judge 9/24/2020:
Excerpts:
Fox News first argues that, viewed in context, Mr. Carlson cannot be understood to have been stating facts, but instead that he was delivering an opinion using hyperbole for effect. See Def. Br. at 12-15. Fox News cites to a litany of cases which hold that accusing a person of “extortion” or “blackmail” simply is “rhetorical hyperbole,” incapable of being defamatory.
* * *
Plaintiff Karen McDougal filed this action asserting a single claim of slander per se after she allegedly was defamed by a segment on the popular program “Tucker Carlson Tonight,” which is produced by Defendant Fox News Network, LLC (“Fox News”) and airs on Fox News Channel. Specifically, Ms. McDougal alleges that the host of the show, Tucker Carlson, accused her of extorting now-President Donald J. Trump out of approximately $150,000 in exchange for her silence about an alleged affair between Ms. McDougal and President Trump. After the case was removed from New York state court, Fox News moved to dismiss Ms. McDougal’s claim on the grounds that Mr. Carlson’s statements were not statements of fact and that she failed adequately to allege actual malice. For the reasons stated herein, Fox News’s Motion to Dismiss is GRANTED.
https://images.law.com/contrib/content/uploads/documents/389/116288/McDougal-Defamation-Dismiss.pdf
Slate/Mark Joseph Stern on the SCOTUS "Shadow Docket"
EXCERPT:
Over the past few years, the Supreme Court has dramatically altered the way it decides most cases—without acknowledging or justifying this radical shift. More and more often, the justices forgo the usual appeals procedure in favor of rushed decision-making behind closed doors in what’s known as “the shadow docket.” They issue late-night opinions on the merits of a case without hearing arguments or receiving full briefing, and often refuse to reveal who authored the opinion, or even how each justice voted. The public is then left to guess why or how the law has changed and what reasoning the court has embraced. These emergency orders are supposed to be a rare exception; today, however, the court regularly uses them to make law in hugely controversial cases, including disputes over the border wall, COVID-19 restrictions, and executions. On Thursday, the House Judiciary Committee held a hearing to decide what, if anything, Congress can do to address a problem that’s spiraling out of control.
https://slate.com/news-and-politics/2021/02/supreme-court-shadow-docket-house-hearing.html?
EXCERPT:
Over the past few years, the Supreme Court has dramatically altered the way it decides most cases—without acknowledging or justifying this radical shift. More and more often, the justices forgo the usual appeals procedure in favor of rushed decision-making behind closed doors in what’s known as “the shadow docket.” They issue late-night opinions on the merits of a case without hearing arguments or receiving full briefing, and often refuse to reveal who authored the opinion, or even how each justice voted. The public is then left to guess why or how the law has changed and what reasoning the court has embraced. These emergency orders are supposed to be a rare exception; today, however, the court regularly uses them to make law in hugely controversial cases, including disputes over the border wall, COVID-19 restrictions, and executions. On Thursday, the House Judiciary Committee held a hearing to decide what, if anything, Congress can do to address a problem that’s spiraling out of control.
https://slate.com/news-and-politics/2021/02/supreme-court-shadow-docket-house-hearing.html?
COVID variants and life after vaccination
DAR comment:
Many sources, like the Economist article excerpted below, predict that people currently vaccinated against COVID may remain susceptible to emerging mutant strains. For the elderly and other susceptible people, vaccination may not mean that precautions should be dropped. Such measures as social distancing will remain important. The hopeful news within that bad news is that mutants may not spread as rapidly as feared, and vaccines can be tweaked in the future to address mutant COVID strains, and even current vaccines are likely to deter life-threatening illness from mutants. DAR
EXCERPTS:
Another reason for covid-19’s persistence is that, even as vaccines are making sars-cov-2 less infectious and protecting people against death, new viral variants are undoing some of their good work. For one thing, successful variants are more infectious—anything from 25-40% in the case of b.1.1.7 which was first found in Britain. Infection is governed by the dizzying mathematics of exponential growth, so cases and deaths accumulate rapidly even if the variant is no more deadly. To get a given level of viral suppression, more onerous social distancing is needed.
In addition, new variants may withstand current vaccines. The ones found in Brazil and South Africa may also be defeating the immunity acquired from a previous covid-19 infection. The hope is that such cases will be milder, because the immune system has been primed by the first encounter with the disease. Even if that is true, the virus will continue to circulate, finding unprotected people and—because that is what viruses do—evolving new strains, some of which will be better at evading the defences that societies have mounted against them.
For all these reasons, governments need to start planning for covid-19 as an endemic disease. . . . The adjustment to living with covid-19 begins with medical science. Work has already started on tweaking vaccines to confer protection against variants. That should go along with more surveillance of mutations that are spreading and accelerated regulatory approval for booster shots. Meanwhile treatments will be required to save more of those who contract the disease from death or serious illness. The best outcome would be for a combination of acquired immunity, regular booster jabs of tweaked vaccines and a menu of therapies to ensure that covid-19 need rarely be life-threatening. But that outcome is not guaranteed.
To the extent that medicine alone cannot prevent lethal outbreaks of covid-19, the burden will also fall on behaviour, just as it has in most of the pandemic. But rather than national lockdowns and months-long school closures, which come at a huge price, the responsibility should fall more heavily on individuals. Habits like mask-wearing may become part of everyday life. Vaccine passports and restrictions in crowded spaces could become mandatory. Vulnerable people will have to maintain great vigilance.
https://www.economist.com/leaders/2021/02/13/how-well-will-vaccines-work
Similarly from WSJ
Research by Dr. Lessells and his colleagues showed that the B.1.351 variant had initially spread most rapidly in the South African province of Eastern Cape, where many residents had already contracted Covid-19 and recovered. He and his colleagues also showed in a series of lab experiments that antibodies from previously infected individuals were less effective against B.1.351 than earlier coronavirus variants.
Data from another study in South Africa seemed to back those findings, suggesting that previous infection may not fully protect against infection by the variant.
from:https://www.wsj.com/articles/covid-19-vaccination-delays-could-bring-more-virus-variants-impede-efforts-to-end-pandemic-11613817002?mod=hp_lead_pos1
DAR comment:
Many sources, like the Economist article excerpted below, predict that people currently vaccinated against COVID may remain susceptible to emerging mutant strains. For the elderly and other susceptible people, vaccination may not mean that precautions should be dropped. Such measures as social distancing will remain important. The hopeful news within that bad news is that mutants may not spread as rapidly as feared, and vaccines can be tweaked in the future to address mutant COVID strains, and even current vaccines are likely to deter life-threatening illness from mutants. DAR
EXCERPTS:
Another reason for covid-19’s persistence is that, even as vaccines are making sars-cov-2 less infectious and protecting people against death, new viral variants are undoing some of their good work. For one thing, successful variants are more infectious—anything from 25-40% in the case of b.1.1.7 which was first found in Britain. Infection is governed by the dizzying mathematics of exponential growth, so cases and deaths accumulate rapidly even if the variant is no more deadly. To get a given level of viral suppression, more onerous social distancing is needed.
In addition, new variants may withstand current vaccines. The ones found in Brazil and South Africa may also be defeating the immunity acquired from a previous covid-19 infection. The hope is that such cases will be milder, because the immune system has been primed by the first encounter with the disease. Even if that is true, the virus will continue to circulate, finding unprotected people and—because that is what viruses do—evolving new strains, some of which will be better at evading the defences that societies have mounted against them.
For all these reasons, governments need to start planning for covid-19 as an endemic disease. . . . The adjustment to living with covid-19 begins with medical science. Work has already started on tweaking vaccines to confer protection against variants. That should go along with more surveillance of mutations that are spreading and accelerated regulatory approval for booster shots. Meanwhile treatments will be required to save more of those who contract the disease from death or serious illness. The best outcome would be for a combination of acquired immunity, regular booster jabs of tweaked vaccines and a menu of therapies to ensure that covid-19 need rarely be life-threatening. But that outcome is not guaranteed.
To the extent that medicine alone cannot prevent lethal outbreaks of covid-19, the burden will also fall on behaviour, just as it has in most of the pandemic. But rather than national lockdowns and months-long school closures, which come at a huge price, the responsibility should fall more heavily on individuals. Habits like mask-wearing may become part of everyday life. Vaccine passports and restrictions in crowded spaces could become mandatory. Vulnerable people will have to maintain great vigilance.
https://www.economist.com/leaders/2021/02/13/how-well-will-vaccines-work
Similarly from WSJ
Research by Dr. Lessells and his colleagues showed that the B.1.351 variant had initially spread most rapidly in the South African province of Eastern Cape, where many residents had already contracted Covid-19 and recovered. He and his colleagues also showed in a series of lab experiments that antibodies from previously infected individuals were less effective against B.1.351 than earlier coronavirus variants.
Data from another study in South Africa seemed to back those findings, suggesting that previous infection may not fully protect against infection by the variant.
from:https://www.wsj.com/articles/covid-19-vaccination-delays-could-bring-more-virus-variants-impede-efforts-to-end-pandemic-11613817002?mod=hp_lead_pos1
Real estate agents caught on tape steering buyers away from homes with less commission
“I’m not even going to show it to them, to be honest with you,” the real estate agent said. “I can’t help you to sell something that’s wiping out my profession.”
In recording after recording, Houston real estate agents are heard saying they will not show certain homes to their clients — even though the houses meet all the buyers’ desires. Conversations recorded by California-based discount brokerage REX show that many actually steer clients away from homes that offer less lucrative commissions. See Houston real estate agents caught on tape steering buyers away from homes with less commission - Coque Nexus 5
When Stephens Research hosted am investors conference about REX, it described REX his way: REX was created in 2015 to bring residential real estate into line with today's expectations by using AI and big data to push past the outmoded practices of traditional real estate brokers to provide a superior outcome for both buyers and sellers at lower costs. In general, the REX fee is 70% less than traditional agent commissions, which usually totals 5-6%. REX is also unique in that it operates outside of the standard MLS system, which allows the Company to control/minimalize both the sell side and buy side fees (ex. Redfin charges 1.0%-1.5% on the sell side but the consumer typically still pays the standard 2.5%-3.0% for the buy side agent). See https://www.stephens.com/institutional-equities-and-research/research/events/a-conversation-with-rex-homes/
Here are excerpts from the USDOJ press release reflecting a settlement with the NAR this past November that relates to broker practices concerning buyer brokers:
The Department of Justice today filed a civil lawsuit against the National Association of REALTORS® (NAR) alleging that NAR established and enforced illegal restraints on the ways that REALTORS® compete.
The Antitrust Division simultaneously filed a proposed settlement that requires NAR to repeal and modify its rules to provide greater transparency to home buyers about the commissions of brokers representing home buyers (buyer brokers), cease misrepresenting that buyer broker services are free, eliminate rules that prohibit filtering multiple listing services (MLS) listings based on the level of buyer broker commissions, and change its rules and policy which limit access to lockboxes to only NAR-affiliated real estate brokers.
According to the complaint, NAR’s anticompetitive rules, policies, and practices include: (i) prohibiting MLSs that are affiliated with NAR from disclosing to prospective buyers the commission that the buyer broker will earn; (ii) allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free; (iii) enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered; and (iv) limiting access to the lockboxes that provide licensed brokers with access to homes for sale to brokers who work for a NAR-affiliated MLS. These NAR rules, policies, practices have been widely adopted by NAR-affiliated MLSs resulting in decreased competition among real estate brokers. See https://www.justice.gov/opa/pr/justice-department-files-antitrust-case-and-simultaneous-settlement-requiring-national
“I’m not even going to show it to them, to be honest with you,” the real estate agent said. “I can’t help you to sell something that’s wiping out my profession.”
In recording after recording, Houston real estate agents are heard saying they will not show certain homes to their clients — even though the houses meet all the buyers’ desires. Conversations recorded by California-based discount brokerage REX show that many actually steer clients away from homes that offer less lucrative commissions. See Houston real estate agents caught on tape steering buyers away from homes with less commission - Coque Nexus 5
When Stephens Research hosted am investors conference about REX, it described REX his way: REX was created in 2015 to bring residential real estate into line with today's expectations by using AI and big data to push past the outmoded practices of traditional real estate brokers to provide a superior outcome for both buyers and sellers at lower costs. In general, the REX fee is 70% less than traditional agent commissions, which usually totals 5-6%. REX is also unique in that it operates outside of the standard MLS system, which allows the Company to control/minimalize both the sell side and buy side fees (ex. Redfin charges 1.0%-1.5% on the sell side but the consumer typically still pays the standard 2.5%-3.0% for the buy side agent). See https://www.stephens.com/institutional-equities-and-research/research/events/a-conversation-with-rex-homes/
Here are excerpts from the USDOJ press release reflecting a settlement with the NAR this past November that relates to broker practices concerning buyer brokers:
The Department of Justice today filed a civil lawsuit against the National Association of REALTORS® (NAR) alleging that NAR established and enforced illegal restraints on the ways that REALTORS® compete.
The Antitrust Division simultaneously filed a proposed settlement that requires NAR to repeal and modify its rules to provide greater transparency to home buyers about the commissions of brokers representing home buyers (buyer brokers), cease misrepresenting that buyer broker services are free, eliminate rules that prohibit filtering multiple listing services (MLS) listings based on the level of buyer broker commissions, and change its rules and policy which limit access to lockboxes to only NAR-affiliated real estate brokers.
According to the complaint, NAR’s anticompetitive rules, policies, and practices include: (i) prohibiting MLSs that are affiliated with NAR from disclosing to prospective buyers the commission that the buyer broker will earn; (ii) allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free; (iii) enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered; and (iv) limiting access to the lockboxes that provide licensed brokers with access to homes for sale to brokers who work for a NAR-affiliated MLS. These NAR rules, policies, practices have been widely adopted by NAR-affiliated MLSs resulting in decreased competition among real estate brokers. See https://www.justice.gov/opa/pr/justice-department-files-antitrust-case-and-simultaneous-settlement-requiring-national
Confused COVID vaccine scheduling blamed on inadequate Maryland State computer software by Montgomery County Executive Elrich
On a recent radio program, hosted by Harold Fisher, Montgomery County Executive Marc Elrich indicated that a software problem was allowing Montgomery County teachers and staff to sign up for vaccine appointments, even though they are not yet eligible in Montgomery County. Elrich said the state's website was unable to set criteria that would differentiate counties and their current vaccine priority groups.
See https://www.wusa9.com/article/news/local/maryland-vaccine-appointments-for-teachers-some-turned-away/65-fdaf261f-b839-44b0-ab04-98c1721c940b
Similarly, Elrich explained in a recent public video report that because the state's website softeware was unable to set criteria that would differentiate current vaccine priority groups, people are sometimes able to use shared computer links to sign up for vaccinations out of the priority order set by the County. He asked that people not do that. He expressed hope that the State would develop software that can differentiate between priority groups.
See https://www.youtube.com/watch?v=_nlr04wV5n0&feature=youtu.be -- beginning at minute 7.00
--
NYT Opinion https://www.nytimes.com/section/opinion
Yes, It Matters That People Are Jumping the Vaccine Line
By Elisabeth Rosenthal
EXCERPT:
For weeks Americans have watched those who are well connected, wealthy or crafty “jump the line” to get a vaccine, while others are stuck, endlessly waiting on hold to get an appointment, watching sign-up websites crash or loitering outside clinics in the often-futile hope of getting a shot.
To eliminate this knock-out-your-neighbor race to score a vaccine, the administration needs to find ways to build trust in the system. It will take more than “more people, more places, more supply” to end the Darwinian competition and restore confidence and order.
That’s in part because, desperate to end their own pandemic nightmare, many of our most respected institutions and politicians have behaved badly.
Yes, It Matters That People Are Jumping the Vaccine Line
By Elisabeth Rosenthal
EXCERPT:
For weeks Americans have watched those who are well connected, wealthy or crafty “jump the line” to get a vaccine, while others are stuck, endlessly waiting on hold to get an appointment, watching sign-up websites crash or loitering outside clinics in the often-futile hope of getting a shot.
To eliminate this knock-out-your-neighbor race to score a vaccine, the administration needs to find ways to build trust in the system. It will take more than “more people, more places, more supply” to end the Darwinian competition and restore confidence and order.
That’s in part because, desperate to end their own pandemic nightmare, many of our most respected institutions and politicians have behaved badly.
Matt Stiller: big pharma chains= slow vaccine rollout
(From his newsletter BIG)
The government partnered with chains CVS and Walgreens to deploy the vaccine, and these chains have done a bad job. There’s a natural experiment showing how independently owned pharmacies have outperformed the chains. Roughly 35% of pharmacies are independent, so we can look at where there are a lot of chain pharmacies, and where there aren’t, and then compare the two. A lot of the places dominated by chains, like Virginia and California, are blue states with significant public health systems and expertise, while red states like South Dakota and Alaska tend to have more suspicion of government and have more independent pharmacies.
And what do we find? Illinois, where Walgreens has its headquarters, is 11th slowest in the country in terms of vaccine roll-out (based on the percentage of supply used). Rhode Island, where that wonderful consumer-based CVS is based, is one of the very worst, in the bottom five. Who is doing well? The leading states are rural, South Dakota, West Virginia, and New Mexico. Now, rolling out this kind of campaign is difficult, and the type of drug store ownership structure is only one factor. State leadership and public institutional make-up matters. But private infrastructure is key as well. And in fact, if you look at one state that has been leading since the beginning of the roll-out - West Virginia - one reason it has done a better job is precisely because it doesn’t really have very many chain pharmacies.
West Virginia is poor and rural, precisely what would make it harder to organize a vaccine strategy. And yet, the state, with its strategy based on independent pharmacies, managed to offer vaccines to every nursing home resident by the end of December, a month before nearly everyone else. As NPR’s Alex Leo reported, West Virginia stumbled into its independent pharmacy strategy by accident. The Trump administration organized the vaccine roll-out with a recommendation that states partner with large chains CVS and Walgreens on vaccinating people in nursing homes and long-term assisted living facilities. But in West Virginia, there just aren’t have enough CVS or Walgreens stores for the partnership to make sense. So instead, the state had to go directly to its local pharmacies, of which there are 250, mostly in rural areas.
It was a blessing in disguise, as these pharmacies turned out to be better than the unwieldy “bureaucracy of huge national chains,” as Leo put it. The small pharmacies already had data on many patients, and they could schedule appointments, match doses, and handle paperwork quickly, all of which confounded the giants.
(From his newsletter BIG)
The government partnered with chains CVS and Walgreens to deploy the vaccine, and these chains have done a bad job. There’s a natural experiment showing how independently owned pharmacies have outperformed the chains. Roughly 35% of pharmacies are independent, so we can look at where there are a lot of chain pharmacies, and where there aren’t, and then compare the two. A lot of the places dominated by chains, like Virginia and California, are blue states with significant public health systems and expertise, while red states like South Dakota and Alaska tend to have more suspicion of government and have more independent pharmacies.
And what do we find? Illinois, where Walgreens has its headquarters, is 11th slowest in the country in terms of vaccine roll-out (based on the percentage of supply used). Rhode Island, where that wonderful consumer-based CVS is based, is one of the very worst, in the bottom five. Who is doing well? The leading states are rural, South Dakota, West Virginia, and New Mexico. Now, rolling out this kind of campaign is difficult, and the type of drug store ownership structure is only one factor. State leadership and public institutional make-up matters. But private infrastructure is key as well. And in fact, if you look at one state that has been leading since the beginning of the roll-out - West Virginia - one reason it has done a better job is precisely because it doesn’t really have very many chain pharmacies.
West Virginia is poor and rural, precisely what would make it harder to organize a vaccine strategy. And yet, the state, with its strategy based on independent pharmacies, managed to offer vaccines to every nursing home resident by the end of December, a month before nearly everyone else. As NPR’s Alex Leo reported, West Virginia stumbled into its independent pharmacy strategy by accident. The Trump administration organized the vaccine roll-out with a recommendation that states partner with large chains CVS and Walgreens on vaccinating people in nursing homes and long-term assisted living facilities. But in West Virginia, there just aren’t have enough CVS or Walgreens stores for the partnership to make sense. So instead, the state had to go directly to its local pharmacies, of which there are 250, mostly in rural areas.
It was a blessing in disguise, as these pharmacies turned out to be better than the unwieldy “bureaucracy of huge national chains,” as Leo put it. The small pharmacies already had data on many patients, and they could schedule appointments, match doses, and handle paperwork quickly, all of which confounded the giants.
NYT Reports on misbahavior and ripoffs by "consumer complaint" sites
EXCERPT (slightly edited)
Ripoff Report is one of hundreds of “complaint sites” — others include She’s a Homewrecker, Cheaterbot and Deadbeats Exposed — that let people anonymously expose an unreliable handyman, a cheating ex, a sexual predator. Ripoff Report offers “arbitration services,” which cost up to $2,000, to get rid of “substantially false” information.
But there is no fact-checking. The sites often charge money to take down posts, even defamatory ones. And there is limited accountability. Ripoff Report, like the others, notes on its site that, thanks to Section 230 of the federal Communications Decency Act, it isn’t responsible for what its users post.
If someone posts false information about you on the Ripoff Report, the CDA prohibits you from holding us liable for the statements which others have written. You can always sue the author if you want, but you can’t sue Ripoff Report just because we provide a forum for speech.
With that impunity, Ripoff Report and its ilk are willing to host pure, uncensored vengeance.
https://www.nytimes.com/2021/01/30/technology/change-my-google-results.html?action=click&module=Top%20Stories&pgtype=Homepage
EXCERPT (slightly edited)
Ripoff Report is one of hundreds of “complaint sites” — others include She’s a Homewrecker, Cheaterbot and Deadbeats Exposed — that let people anonymously expose an unreliable handyman, a cheating ex, a sexual predator. Ripoff Report offers “arbitration services,” which cost up to $2,000, to get rid of “substantially false” information.
But there is no fact-checking. The sites often charge money to take down posts, even defamatory ones. And there is limited accountability. Ripoff Report, like the others, notes on its site that, thanks to Section 230 of the federal Communications Decency Act, it isn’t responsible for what its users post.
If someone posts false information about you on the Ripoff Report, the CDA prohibits you from holding us liable for the statements which others have written. You can always sue the author if you want, but you can’t sue Ripoff Report just because we provide a forum for speech.
With that impunity, Ripoff Report and its ilk are willing to host pure, uncensored vengeance.
https://www.nytimes.com/2021/01/30/technology/change-my-google-results.html?action=click&module=Top%20Stories&pgtype=Homepage
The next USDOJ Antitrust chief should be an experienced litigator for plaintiffs, preferably for government plaintiffs
By Don Allen Resnikoff
The Hill for 1/19/21 reports that that President-elect Joe Biden’s top candidate to run the Department of Justice’s antitrust division is Renata Hesse. She is known for representing Google in some antitrust cases with co-counsel Ted Cruz (R-Texas).
Renata Hesse’s resume on the Sullivan and Cromwell website says that she is co-head of the Firm’s Antitrust Group. Her practice focuses on antitrust counseling, cartels and merger clearance.
The resume also refers to her experience with the USDOJ Antitrust Division. That experience includes including leading the Antitrust Division at the Department of Justice twice as Acting Assistant Attorney General and serving that division for more than 15 years. During her time at the Division, Ms. Hesse worked on a number of high profile transactions, as well as other key initiatives related to the licensing and enforcement of standards-essential patents. She also had oversight of the criminal program as the Principal Deputy Assistant Attorney General, where she was a decision-maker on a range of significant criminal matters. Ms. Hesse was previously Chief of the Networks and Technology Section and a Trial Attorney in two Division sections.
Renata Hesse is plainly a well-qualified and excellent candidate, but I hope that there is a wide competition for the USDOJ antitrust chief position that includes consideration of a candidate’s court room experience organizing and litigating complex cases for plaintiffs, particularly government plaintiffs.
My experience as a USDOJ trial attorney is that relatively few USDOJ antitrust cases actually go to trial – most are settled without a trial. As a consequence of apparent lack of confidence in the litigation abilties of regular government staff, USDOJ has on occasion bypassed staff and hired outside counsel to litigate its antitrust cases. A well known example is USDOJ engagement of David Boies as lead litigator for its antitrust lawsuit against Microsoft in the late 1990s.
Some insight into the USDOJ’s current in-house litigation staff resources was provided by past USDOJ antitrust chief Makan Delrahim’s line-up of USDOJ lawyers for its recently announced action against Google.
Delrahim’s choice as lead lawyer was Kenneth Dintzer, a longtime trial attorney now in the DOJ’s Civil Division – not the Antitrust Division. Dintzer has handled high-profile cases for the department over more than 20 years. Dintzer led the government’s antitrust prosecution of General Electric Co. for allegedly anticompetitive medical imaging supply arrangements with hospitals in the mid-1990s.
“The Division has tremendous confidence in the hardworking litigation team led by Ken Dintzer, one of the Department’s most experienced and talented trial lawyers,” said a USDOJ representative.
There are other possible candidates to lead the USDOJ’s Antitrust Division with substantial court room experience and demonstrated ability in organizing and litigating complex cases for government plaintiffs.
One is Thomas Greene. His resume on the Hastings College of Law website reflects that he is a trial attorney with the Antitrust Division of the U.S. Department of Justice where he investigates and prosecutes criminal and civil antitrust actions. He was previously special trial counsel for the Federal Trade Commission’s Bureau of Competition where he led successful challenges against major health care mergers in Idaho and Illinois.
Also, he served in the California Attorney General’s Office where he was chief of antitrust. Among other cases, he successfully argued an appeal to the United States Supreme Court vindicating indirect purchaser remedies under state antitrust law, California v. ARC America Corp., 490 U.S. 93 (1989), and served as national class counsel in California v. Hartford Fire Insurance Co. He also served as the Chair of the Multistate Antitrust Task Force of the National Association of Attorneys General.
In addition to antitrust litigation, he led special task forces litigating cases against major tobacco manufacturers and energy companies, and subsequently served as Chief Assistant Attorney General for the Public Rights Division, the 300-attorney, affirmative litigation arm of the California Attorney General’s Office.
Another attorney with a strong background representing government plaintiffs in litigation is Jay Himes. His resume on the Labaton Sucharow website reflects that prior to joining Labaton Sucharow, Jay served for nearly eight years as the Antitrust Bureau Chief in the New York Attorney General's office. In that role, he was the States’ principal representative in the marathon 2001 negotiations that led to settlement of the governments’ landmark monopolization case against Microsoft. Thereafter, Jay partnered with U.S. DOJ officials to lead the Microsoft judgment monitoring and enforcement effort, an activity that continued throughout his time at the Attorney General's office.
During his tenure as New York's chief antitrust official, Jay also led significant, high-profile antitrust investigations and enforcement actions. These cases included In re Buspirone Antitrust Litigation ($100 million settlement), In re Cardizem CD Antitrust Litigation ($80 million settlement), and In re Compact Disc Antitrust Litigation ($67 million settlement). Under Jay's leadership, the New York Bureau secured what were at the time the two largest antitrust civil penalties recoveries ever achieved under the State's antitrust statute.
By Don Allen Resnikoff
The Hill for 1/19/21 reports that that President-elect Joe Biden’s top candidate to run the Department of Justice’s antitrust division is Renata Hesse. She is known for representing Google in some antitrust cases with co-counsel Ted Cruz (R-Texas).
Renata Hesse’s resume on the Sullivan and Cromwell website says that she is co-head of the Firm’s Antitrust Group. Her practice focuses on antitrust counseling, cartels and merger clearance.
The resume also refers to her experience with the USDOJ Antitrust Division. That experience includes including leading the Antitrust Division at the Department of Justice twice as Acting Assistant Attorney General and serving that division for more than 15 years. During her time at the Division, Ms. Hesse worked on a number of high profile transactions, as well as other key initiatives related to the licensing and enforcement of standards-essential patents. She also had oversight of the criminal program as the Principal Deputy Assistant Attorney General, where she was a decision-maker on a range of significant criminal matters. Ms. Hesse was previously Chief of the Networks and Technology Section and a Trial Attorney in two Division sections.
Renata Hesse is plainly a well-qualified and excellent candidate, but I hope that there is a wide competition for the USDOJ antitrust chief position that includes consideration of a candidate’s court room experience organizing and litigating complex cases for plaintiffs, particularly government plaintiffs.
My experience as a USDOJ trial attorney is that relatively few USDOJ antitrust cases actually go to trial – most are settled without a trial. As a consequence of apparent lack of confidence in the litigation abilties of regular government staff, USDOJ has on occasion bypassed staff and hired outside counsel to litigate its antitrust cases. A well known example is USDOJ engagement of David Boies as lead litigator for its antitrust lawsuit against Microsoft in the late 1990s.
Some insight into the USDOJ’s current in-house litigation staff resources was provided by past USDOJ antitrust chief Makan Delrahim’s line-up of USDOJ lawyers for its recently announced action against Google.
Delrahim’s choice as lead lawyer was Kenneth Dintzer, a longtime trial attorney now in the DOJ’s Civil Division – not the Antitrust Division. Dintzer has handled high-profile cases for the department over more than 20 years. Dintzer led the government’s antitrust prosecution of General Electric Co. for allegedly anticompetitive medical imaging supply arrangements with hospitals in the mid-1990s.
“The Division has tremendous confidence in the hardworking litigation team led by Ken Dintzer, one of the Department’s most experienced and talented trial lawyers,” said a USDOJ representative.
There are other possible candidates to lead the USDOJ’s Antitrust Division with substantial court room experience and demonstrated ability in organizing and litigating complex cases for government plaintiffs.
One is Thomas Greene. His resume on the Hastings College of Law website reflects that he is a trial attorney with the Antitrust Division of the U.S. Department of Justice where he investigates and prosecutes criminal and civil antitrust actions. He was previously special trial counsel for the Federal Trade Commission’s Bureau of Competition where he led successful challenges against major health care mergers in Idaho and Illinois.
Also, he served in the California Attorney General’s Office where he was chief of antitrust. Among other cases, he successfully argued an appeal to the United States Supreme Court vindicating indirect purchaser remedies under state antitrust law, California v. ARC America Corp., 490 U.S. 93 (1989), and served as national class counsel in California v. Hartford Fire Insurance Co. He also served as the Chair of the Multistate Antitrust Task Force of the National Association of Attorneys General.
In addition to antitrust litigation, he led special task forces litigating cases against major tobacco manufacturers and energy companies, and subsequently served as Chief Assistant Attorney General for the Public Rights Division, the 300-attorney, affirmative litigation arm of the California Attorney General’s Office.
Another attorney with a strong background representing government plaintiffs in litigation is Jay Himes. His resume on the Labaton Sucharow website reflects that prior to joining Labaton Sucharow, Jay served for nearly eight years as the Antitrust Bureau Chief in the New York Attorney General's office. In that role, he was the States’ principal representative in the marathon 2001 negotiations that led to settlement of the governments’ landmark monopolization case against Microsoft. Thereafter, Jay partnered with U.S. DOJ officials to lead the Microsoft judgment monitoring and enforcement effort, an activity that continued throughout his time at the Attorney General's office.
During his tenure as New York's chief antitrust official, Jay also led significant, high-profile antitrust investigations and enforcement actions. These cases included In re Buspirone Antitrust Litigation ($100 million settlement), In re Cardizem CD Antitrust Litigation ($80 million settlement), and In re Compact Disc Antitrust Litigation ($67 million settlement). Under Jay's leadership, the New York Bureau secured what were at the time the two largest antitrust civil penalties recoveries ever achieved under the State's antitrust statute.
USDOJ press release:
Three Individuals Affiliated With the Oath Keepers Indicted in Federal Court for Conspiracy to Obstruct Congress on Jan. 6, 2021
Three individuals associated with the Oath Keepers, a paramilitary organization focused on recruitment of current and former military, law enforcement, and first responder personnel, were indicted today in federal court in the District of Columbia for conspiring to obstruct Congress, among other charges.
Jessica Marie Watkins, 38, and Donovan Ray Crowl, 50, both of Champaign County, Ohio; and Thomas Caldwell, 65, of Clarke County, Virginia, were indicted today in federal court in the District of Columbia on charges of conspiracy, obstructing an official proceeding, destruction of government property, and unlawful entry on restricted building or grounds, in violation of 18 U.S.C. §§ 371, 1512, 1361, and 1752. Watkins and Crowl were arrested on Jan. 18; Caldwell was arrested on Jan. 19. All three individuals originally were charged by criminal complaint. The maximum penalty for Obstructing an Official Proceeding is a sentence of up to 20 years in prison.
According to the charging documents, Watkins, Crowl, and Caldwell communicated with each another in advance of the Jan. 6, 2021, incursion on the U.S. Capitol and coordinated their attack. Watkins, Crowl, and Caldwell are all affiliated with the Oath Keepers, while Watkins and Crowl are also members of the Ohio State Regular Militia. Watkins claimed to be a commanding officer within the Ohio State Regular Militia in a social media post.
According to the indictment, the three defendants initiated their communications and coordination in November 2020 and continued through on or about Jan. 19, 2021, when Caldwell was arrested. The exchanges vary in topics from a call to action to logistics, including lodging options, coordinating calls to discuss the plan, and joining forces with other Oath Keeper chapters. On Dec. 31, 2020, Caldwell posted, “THIS IS OUR CALL TO ACTION, FREINDS! SEE YOU ON THE 6TH IN WASHINGTON, D.C. ALONG WITH 2 MILLION OTHER LIKE-MINDED PATRIOTS.” In a subsequent post on Jan. 2, 2021, Caldwell stated, “It begins for real Jan 5 and 6 on Washington D.C. when we mobilize in the streets. Let them try to certify some crud on capitol hill with a million or more patriots in the streets. This kettle is set to boil…”
According to the criminal complaint filed on Jan. 19, on Jan. 6, the three documented their participation and whereabouts in or around the U.S. Capitol on social media. Caldwell posted messages on Facebook such as, “We are surging forward. Doors breached[.]” and at 3:05 p.m. posted just, “Inside.” Watkins posted photos of herself, and with Crowl, on her Parler account and captioned a photo by stating, “Me before forcing entry into the Capitol Building. #stopthesteal2 #stormthecapitol #oathkeepers #ohiomilitia.” Subsequently, she posted a video of herself inside the Capitol captioned, “Yeah. We stormed the Capitol today. Teargassed, the whole, 9. Pushed our way into the Rotunda. Made it into the Senate even. The news is lying (even Fox) about the Historical Events we created today.”
In addition to the communication via Facebook and Parler, the FBI obtained an audio recording of Zello communications between Watkins and other suspected Oath Keepers during the Capitol incursion on a channel called “Stop the Steal J6.” As alleged in the indictment, in one transmission Watkins stated, “We have a good group. We have about 30-40 of us. We are sticking together and sticking to the plan.” An unknown male responds, “We’ll see you soon, Jess. Airborne.” Following the U.S. Capitol incursion, Watkins and Crowl each interviewed with the media. During the interviews, both confirmed membership of the Oath Keepers.
Excerpt from https://www.justice.gov/opa/pr/three-individuals-affiliated-oath-keepers-indicted-federal-court-conspiracy-obstruct
Three Individuals Affiliated With the Oath Keepers Indicted in Federal Court for Conspiracy to Obstruct Congress on Jan. 6, 2021
Three individuals associated with the Oath Keepers, a paramilitary organization focused on recruitment of current and former military, law enforcement, and first responder personnel, were indicted today in federal court in the District of Columbia for conspiring to obstruct Congress, among other charges.
Jessica Marie Watkins, 38, and Donovan Ray Crowl, 50, both of Champaign County, Ohio; and Thomas Caldwell, 65, of Clarke County, Virginia, were indicted today in federal court in the District of Columbia on charges of conspiracy, obstructing an official proceeding, destruction of government property, and unlawful entry on restricted building or grounds, in violation of 18 U.S.C. §§ 371, 1512, 1361, and 1752. Watkins and Crowl were arrested on Jan. 18; Caldwell was arrested on Jan. 19. All three individuals originally were charged by criminal complaint. The maximum penalty for Obstructing an Official Proceeding is a sentence of up to 20 years in prison.
According to the charging documents, Watkins, Crowl, and Caldwell communicated with each another in advance of the Jan. 6, 2021, incursion on the U.S. Capitol and coordinated their attack. Watkins, Crowl, and Caldwell are all affiliated with the Oath Keepers, while Watkins and Crowl are also members of the Ohio State Regular Militia. Watkins claimed to be a commanding officer within the Ohio State Regular Militia in a social media post.
According to the indictment, the three defendants initiated their communications and coordination in November 2020 and continued through on or about Jan. 19, 2021, when Caldwell was arrested. The exchanges vary in topics from a call to action to logistics, including lodging options, coordinating calls to discuss the plan, and joining forces with other Oath Keeper chapters. On Dec. 31, 2020, Caldwell posted, “THIS IS OUR CALL TO ACTION, FREINDS! SEE YOU ON THE 6TH IN WASHINGTON, D.C. ALONG WITH 2 MILLION OTHER LIKE-MINDED PATRIOTS.” In a subsequent post on Jan. 2, 2021, Caldwell stated, “It begins for real Jan 5 and 6 on Washington D.C. when we mobilize in the streets. Let them try to certify some crud on capitol hill with a million or more patriots in the streets. This kettle is set to boil…”
According to the criminal complaint filed on Jan. 19, on Jan. 6, the three documented their participation and whereabouts in or around the U.S. Capitol on social media. Caldwell posted messages on Facebook such as, “We are surging forward. Doors breached[.]” and at 3:05 p.m. posted just, “Inside.” Watkins posted photos of herself, and with Crowl, on her Parler account and captioned a photo by stating, “Me before forcing entry into the Capitol Building. #stopthesteal2 #stormthecapitol #oathkeepers #ohiomilitia.” Subsequently, she posted a video of herself inside the Capitol captioned, “Yeah. We stormed the Capitol today. Teargassed, the whole, 9. Pushed our way into the Rotunda. Made it into the Senate even. The news is lying (even Fox) about the Historical Events we created today.”
In addition to the communication via Facebook and Parler, the FBI obtained an audio recording of Zello communications between Watkins and other suspected Oath Keepers during the Capitol incursion on a channel called “Stop the Steal J6.” As alleged in the indictment, in one transmission Watkins stated, “We have a good group. We have about 30-40 of us. We are sticking together and sticking to the plan.” An unknown male responds, “We’ll see you soon, Jess. Airborne.” Following the U.S. Capitol incursion, Watkins and Crowl each interviewed with the media. During the interviews, both confirmed membership of the Oath Keepers.
Excerpt from https://www.justice.gov/opa/pr/three-individuals-affiliated-oath-keepers-indicted-federal-court-conspiracy-obstruct
Biden Appointee fires Trump Allies at Radio Free Europe And Other Overseas Networks
By Don Allen Resnikoff
National Public Radio (NPR) and other media report that the new acting head of the U.S. Agency for Global Media, Kelu Chao, has fired the presidents and boards of Radio Free Europe/Radio Liberty, Radio Free Asia and the Middle East Broadcasting Networks. https://www.npr.org/2021/01/22/959848852/usagm-chief-fires-trump-allies-over-radio-free-europe-and-other-networks
In June of 2020 the Trump Administration installed political ally Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America and other publicly funded broadcasters that serve overseas audiences. Prior to his VOA appointment, Pack ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon.
Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired and replaced the heads of three other networks managed by Global Media — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund. Pack dissolved the networks’ bipartisan advisory boards and replaced them with panels composed of people widely considered to be Trump loyalists.
In the final days of the Trump administration more than two dozen VOA newsroom employees signed a petition demanding the immediate resignation of their director and top deputy. Staff complained that the director and deputy had abdicated their responsibility to remain independent of government influence.
The Trump administrations misuse of the Voice of America and other publicly funded overseas broadcasters is a reminder that U.S. publicly funded broadcasting should be protected from ever being turned into a narrow partisan or ideological tool. This caution applies to the Voice of America (VOA) and other broadcasters to overseas audiences, but also to domestic broadcasters of the Corporation for Public Broadcasting (CPB) and the Public Broadcasting Service (PBS).
Concern about possible future partisan misuse of domestic public broadcasting is suggested by past partisan misuse of the Voice of America and other overseas broadcasters during the Trump administration.
Anne Applebaum’s June, 2020 article in The Atlantic explains that the Voice of America “was never meant to be the tool of one political party, but rather to present America from a broad, nonpartisan perspective.” The Guardian newspaper warns against allowing Government “to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
By Don Allen Resnikoff
National Public Radio (NPR) and other media report that the new acting head of the U.S. Agency for Global Media, Kelu Chao, has fired the presidents and boards of Radio Free Europe/Radio Liberty, Radio Free Asia and the Middle East Broadcasting Networks. https://www.npr.org/2021/01/22/959848852/usagm-chief-fires-trump-allies-over-radio-free-europe-and-other-networks
In June of 2020 the Trump Administration installed political ally Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America and other publicly funded broadcasters that serve overseas audiences. Prior to his VOA appointment, Pack ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon.
Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired and replaced the heads of three other networks managed by Global Media — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund. Pack dissolved the networks’ bipartisan advisory boards and replaced them with panels composed of people widely considered to be Trump loyalists.
In the final days of the Trump administration more than two dozen VOA newsroom employees signed a petition demanding the immediate resignation of their director and top deputy. Staff complained that the director and deputy had abdicated their responsibility to remain independent of government influence.
The Trump administrations misuse of the Voice of America and other publicly funded overseas broadcasters is a reminder that U.S. publicly funded broadcasting should be protected from ever being turned into a narrow partisan or ideological tool. This caution applies to the Voice of America (VOA) and other broadcasters to overseas audiences, but also to domestic broadcasters of the Corporation for Public Broadcasting (CPB) and the Public Broadcasting Service (PBS).
Concern about possible future partisan misuse of domestic public broadcasting is suggested by past partisan misuse of the Voice of America and other overseas broadcasters during the Trump administration.
Anne Applebaum’s June, 2020 article in The Atlantic explains that the Voice of America “was never meant to be the tool of one political party, but rather to present America from a broad, nonpartisan perspective.” The Guardian newspaper warns against allowing Government “to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
Grounds for prosecuting Trump-inspired rioters: Inciting to riot, Anti-Riot Act of 1968, 18 U.S.C. § 2101 and 2102
By Don Allen Resnikoff
The grounds for prosecuting Trump-inspired rioters who invaded the U.S. Capital building certainly include such straightforward charges as felony destruction of government property, weapons-related offenses, and assault. Among more complex and interesting possible charges is inciting to riot, based on the Anti-Riot Act of 1968, 18 U.S.C. § 2101 and 2102. Media reports of FBI and other government investigations suggest significant pre-planning of the invasion of the Capital.
The 1968 Act was successfully used as a basis for a federal prosecution just a few months ago, in the case of United States v. Miselis.
The statute has a checkered history because of complaints that it violates Constitutional free speech rights.
The Anti-Riot Act was passed as a section of the Civil Rights Act of 1968. The Anti-Riot Act appears to have been a response to the urban riots of 1964–1967, which some legislators saw as being incited by agitators from outside of affected cities. The passage of time has made the problem of remote inciting to riot more serious, because of the modern use of the internet to encourage and facilitate violent actions. There has been a lot of media reporting about use of the internet to encourage and facilitate the recent violence at the Capital building.
The 1968 law provides, in part: “a) (1) Whoever travels in interstate or foreign commerce or uses any facility of interstate or foreign commerce or uses any facility of interstate or foreign commerce, including, but not limited to, the mail, telegraph, telephone, radio, or television, with intent – (A) to incite a riot; or (B) to organize, promote, encourage, participate in, or carry on a riot; or (C) to commit any act of violence in furtherance of a riot; or (D) to aid or abet any person in inciting or participating in or carrying on a riot or committing any act of violence in furtherance of a riot. . . . ”
The statute was famously used to prosecute leaders of demonstrations at the 1968 Democratic National Convention in Chicago. The defendants in that case are often called “the Chicago 7.” Their story is told in a recent movie and a recently re-issued book of trial transcript excerpts.
When the 7th Circuit Court of Appeals vacated the convictions of the Chicago 7 defendants for inciting a riot in 1972, one judge wrote that the charging statute, the 1968 Anti-Riot Act, violates the Constitution because it is “intended to preclude, under pain of prosecution, advocacy of violence even though only an idea or expression of belief.”
Since the time of the 1969-70 Chicago 7 trial, prosecutions relying on the Anti-Riot Act of 1968 have been infrequent, but recently there have been several Anti-Riot prosecutions, including against white neo-Nazi groups. The government’s position in the recent cases is that the statute is Constitutionally valid.
Judicial reaction has been mixed. In the 2019 California federal case of U.S. v. Robert Rundo, et al., No. 18-00759-CJC (Central District Ca., 2019) [See https://www.courthousenews.com/wp-content/uploads/2019/06/USvRundoetal-DISMISSAL.pdf], the Court granted Defendants’ motion to dismiss the Indictment on the grounds that the Anti-Riot Act is unconstitutionally overbroad in violation of the First Amendment.
But in United States v. Miselis, No. 19-4550 (4th Cir. Aug. 24, 2020) the appellate Court construed the Anti-Riot Act so as to give it some actionable scope within the Constitution, allowing it to be used as the basis for a criminal conviction. The Court explained while that the Anti-Riot Act “sweeps up a substantial amount of speech that remains protected advocacy,” the statute also “comports with the First Amendment,” so that “the appropriate remedy is to invalidate the statute only to the extent that it reaches too far, while leaving the remainder intact.” The Court pointed out that “because the factual bases for the defendants' guilty pleas conclusively establish that their own substantive offense conduct—which involves no First Amendment activity—falls under the Anti-Riot Act's surviving applications, their convictions stand.” So, in Miselis, the criminal conviction was allowed to stand.
It will be interesting to see whether and how the Government will use the Anti-Riot Act of 1968 in charging criminal incitement against persons having a role in inciting the Trump-inspired rioting involving invasion of the U.S. Capital building.
Don Allen Resnikoff is fully responsible for the content of this posting
By Don Allen Resnikoff
The grounds for prosecuting Trump-inspired rioters who invaded the U.S. Capital building certainly include such straightforward charges as felony destruction of government property, weapons-related offenses, and assault. Among more complex and interesting possible charges is inciting to riot, based on the Anti-Riot Act of 1968, 18 U.S.C. § 2101 and 2102. Media reports of FBI and other government investigations suggest significant pre-planning of the invasion of the Capital.
The 1968 Act was successfully used as a basis for a federal prosecution just a few months ago, in the case of United States v. Miselis.
The statute has a checkered history because of complaints that it violates Constitutional free speech rights.
The Anti-Riot Act was passed as a section of the Civil Rights Act of 1968. The Anti-Riot Act appears to have been a response to the urban riots of 1964–1967, which some legislators saw as being incited by agitators from outside of affected cities. The passage of time has made the problem of remote inciting to riot more serious, because of the modern use of the internet to encourage and facilitate violent actions. There has been a lot of media reporting about use of the internet to encourage and facilitate the recent violence at the Capital building.
The 1968 law provides, in part: “a) (1) Whoever travels in interstate or foreign commerce or uses any facility of interstate or foreign commerce or uses any facility of interstate or foreign commerce, including, but not limited to, the mail, telegraph, telephone, radio, or television, with intent – (A) to incite a riot; or (B) to organize, promote, encourage, participate in, or carry on a riot; or (C) to commit any act of violence in furtherance of a riot; or (D) to aid or abet any person in inciting or participating in or carrying on a riot or committing any act of violence in furtherance of a riot. . . . ”
The statute was famously used to prosecute leaders of demonstrations at the 1968 Democratic National Convention in Chicago. The defendants in that case are often called “the Chicago 7.” Their story is told in a recent movie and a recently re-issued book of trial transcript excerpts.
When the 7th Circuit Court of Appeals vacated the convictions of the Chicago 7 defendants for inciting a riot in 1972, one judge wrote that the charging statute, the 1968 Anti-Riot Act, violates the Constitution because it is “intended to preclude, under pain of prosecution, advocacy of violence even though only an idea or expression of belief.”
Since the time of the 1969-70 Chicago 7 trial, prosecutions relying on the Anti-Riot Act of 1968 have been infrequent, but recently there have been several Anti-Riot prosecutions, including against white neo-Nazi groups. The government’s position in the recent cases is that the statute is Constitutionally valid.
Judicial reaction has been mixed. In the 2019 California federal case of U.S. v. Robert Rundo, et al., No. 18-00759-CJC (Central District Ca., 2019) [See https://www.courthousenews.com/wp-content/uploads/2019/06/USvRundoetal-DISMISSAL.pdf], the Court granted Defendants’ motion to dismiss the Indictment on the grounds that the Anti-Riot Act is unconstitutionally overbroad in violation of the First Amendment.
But in United States v. Miselis, No. 19-4550 (4th Cir. Aug. 24, 2020) the appellate Court construed the Anti-Riot Act so as to give it some actionable scope within the Constitution, allowing it to be used as the basis for a criminal conviction. The Court explained while that the Anti-Riot Act “sweeps up a substantial amount of speech that remains protected advocacy,” the statute also “comports with the First Amendment,” so that “the appropriate remedy is to invalidate the statute only to the extent that it reaches too far, while leaving the remainder intact.” The Court pointed out that “because the factual bases for the defendants' guilty pleas conclusively establish that their own substantive offense conduct—which involves no First Amendment activity—falls under the Anti-Riot Act's surviving applications, their convictions stand.” So, in Miselis, the criminal conviction was allowed to stand.
It will be interesting to see whether and how the Government will use the Anti-Riot Act of 1968 in charging criminal incitement against persons having a role in inciting the Trump-inspired rioting involving invasion of the U.S. Capital building.
Don Allen Resnikoff is fully responsible for the content of this posting
Informal Auction: Possibly valuable wine in return for contribution to the DC Bar Pro Bono Center
From Don Resnikoff
My wife and I received a gift bottle of wine that could be worth
many hundreds of dollars if it were in perfect condition. The
bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart,
Gordon & Co. Ltd. Given the “provenance,” including that it has
been stored in someone’s residence, and the fill level, experts
have questioned the value.
We would like to use the wine as an
incentive to encourage a substantial charitable donation to the DC
Bar Pro Bono Center. I will be happy to turn over the wine to the
person who promises the highest donation to the Pro Bono
Center, if it is high enough to dissuade me from trying the bottle myself,
and who is willing to take the risk that the wine might or might
not be great. If you are inclined to take a chance on the wine as an
incentive for making a substantial donation to the DC Bar’s Pro
Bono Center, let me know at [email protected]. If your
offer is the best, and high enough to dissuade me from trying the bottle
myself, I’ll let you know. Once I have proof of the donation to the DC Bar
Pro Bono Center I’ll turn over the bottle. (I suggest using Paypal.
See https://www.paypal.com/paypalme/dcbarprobonocenter)
If you are the winning bidder, I hope you’ll then let me know how the wine
tastes!
Here is a picture of our bottle (the bright light behind the bottle is to
make clear the fill level):
From Don Resnikoff
My wife and I received a gift bottle of wine that could be worth
many hundreds of dollars if it were in perfect condition. The
bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart,
Gordon & Co. Ltd. Given the “provenance,” including that it has
been stored in someone’s residence, and the fill level, experts
have questioned the value.
We would like to use the wine as an
incentive to encourage a substantial charitable donation to the DC
Bar Pro Bono Center. I will be happy to turn over the wine to the
person who promises the highest donation to the Pro Bono
Center, if it is high enough to dissuade me from trying the bottle myself,
and who is willing to take the risk that the wine might or might
not be great. If you are inclined to take a chance on the wine as an
incentive for making a substantial donation to the DC Bar’s Pro
Bono Center, let me know at [email protected]. If your
offer is the best, and high enough to dissuade me from trying the bottle
myself, I’ll let you know. Once I have proof of the donation to the DC Bar
Pro Bono Center I’ll turn over the bottle. (I suggest using Paypal.
See https://www.paypal.com/paypalme/dcbarprobonocenter)
If you are the winning bidder, I hope you’ll then let me know how the wine
tastes!
Here is a picture of our bottle (the bright light behind the bottle is to
make clear the fill level):
Here’s more of the story on the wine:
An elderly relative gave us a "thank you" gift of a bottle of Madeira wine that her father gave her in about 1980. The dad said it is “special”. The label says: 1845 Madeira Bual Solera Cossart Centenary. The bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart, Gordon & Co. Ltd.
History: A local expert explained to us that Madeira suffered nearly complete devastation of vineyards from Oidium and Phylloxera during the 1850s and 1870s. With shortages of wines but old stock still around, the Soleras were started during the early to mid 1870s. Basically young wine from the newly planted vines was added to old wine to extend the stock they could actually sell and ship.
The vintage 1845 is the “madre” or mother vintage that was first laid down. In this case the Solera for 1845 Bual Solera was founded in 1875. Each year the casks were topped off or when 10% was ullage. They would add young wine. The average age of the Solera was 50-80 years by the 1950s.
The Soleras were stopped in 1953 when Cossart joined the Madeira Wine Association. The pipes used to store the wine were shipped off and the wine was bottled. This bottling was known as the Centenary wine since the firm was founded in 1745. At least several hundred bottles were sold making it one of the most prolific of the 19th century Soleras.
The expert told us that Madeira is quite robust. If it’s been in bottle for a long time you typically decant it ahead of time at the rate of one day for every decade in bottle.
As for value of the bottle, if the “provenance” and condition were perfect the bottle might be worth $750$-1250. Factors of the provenance make the value of our bottle uncertain, including that it has been stored in someone’s residence for 40 years (we believe horizontally and in a cool location), and that the fill level is below the bottle neck. Your guess is as good as ours on value.
Don Allen Resnikoff
An elderly relative gave us a "thank you" gift of a bottle of Madeira wine that her father gave her in about 1980. The dad said it is “special”. The label says: 1845 Madeira Bual Solera Cossart Centenary. The bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart, Gordon & Co. Ltd.
History: A local expert explained to us that Madeira suffered nearly complete devastation of vineyards from Oidium and Phylloxera during the 1850s and 1870s. With shortages of wines but old stock still around, the Soleras were started during the early to mid 1870s. Basically young wine from the newly planted vines was added to old wine to extend the stock they could actually sell and ship.
The vintage 1845 is the “madre” or mother vintage that was first laid down. In this case the Solera for 1845 Bual Solera was founded in 1875. Each year the casks were topped off or when 10% was ullage. They would add young wine. The average age of the Solera was 50-80 years by the 1950s.
The Soleras were stopped in 1953 when Cossart joined the Madeira Wine Association. The pipes used to store the wine were shipped off and the wine was bottled. This bottling was known as the Centenary wine since the firm was founded in 1745. At least several hundred bottles were sold making it one of the most prolific of the 19th century Soleras.
The expert told us that Madeira is quite robust. If it’s been in bottle for a long time you typically decant it ahead of time at the rate of one day for every decade in bottle.
As for value of the bottle, if the “provenance” and condition were perfect the bottle might be worth $750$-1250. Factors of the provenance make the value of our bottle uncertain, including that it has been stored in someone’s residence for 40 years (we believe horizontally and in a cool location), and that the fill level is below the bottle neck. Your guess is as good as ours on value.
Don Allen Resnikoff
Don Allen Resnikoff article: Threats to the Independence
of Public Broadcasting
Washington Lawyer - January/February 2021 (dcbar.org)
[ http://washingtonlawyer.dcbar.org/januaryfebruary2021/index.php#/p/36 ]
Following is an excerpt from the beginning of the article:
Past steps by the U.S. government limiting the autonomy of Voice of America (VOA) suggest a need for legislative action to safeguard the future
independence of public broadcasting in the United States. The Corporation for Public Broadcasting (CPB) and the Public Broadcasting
Service (PBS) should be protected from ever being turned into a tool of a narrow partisan or ideological point of view.
The challenge of protecting public broadcasting is complicated by the U.S. Supreme Court’s shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the recent case of Seila Law LLC v. Consumer Financial Protection Bureau,[footnote omitted] the Supreme Court determined that the structure of the CFPB, with a single director who could be removed from office only “for cause,” violates the separation of powers requirements of the Constitution. Court explained in its 5–4 decision that as a general matter, leaders of federal agencies
serve at the discretion of the president.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the long established idea that Congress has the power to allow agencies to operate independently of the president. In September, Harvard Law
professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal
Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” [footnote omitted]
The constitutional cloud applies to the independence of the CPB and PBS. There is hope for proposals for statutory change that can effectively supplement existing unique statutory provisions protecting the independence of public television and also meet the Supreme Court’s articulated standards.
of Public Broadcasting
Washington Lawyer - January/February 2021 (dcbar.org)
[ http://washingtonlawyer.dcbar.org/januaryfebruary2021/index.php#/p/36 ]
Following is an excerpt from the beginning of the article:
Past steps by the U.S. government limiting the autonomy of Voice of America (VOA) suggest a need for legislative action to safeguard the future
independence of public broadcasting in the United States. The Corporation for Public Broadcasting (CPB) and the Public Broadcasting
Service (PBS) should be protected from ever being turned into a tool of a narrow partisan or ideological point of view.
The challenge of protecting public broadcasting is complicated by the U.S. Supreme Court’s shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the recent case of Seila Law LLC v. Consumer Financial Protection Bureau,[footnote omitted] the Supreme Court determined that the structure of the CFPB, with a single director who could be removed from office only “for cause,” violates the separation of powers requirements of the Constitution. Court explained in its 5–4 decision that as a general matter, leaders of federal agencies
serve at the discretion of the president.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the long established idea that Congress has the power to allow agencies to operate independently of the president. In September, Harvard Law
professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal
Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” [footnote omitted]
The constitutional cloud applies to the independence of the CPB and PBS. There is hope for proposals for statutory change that can effectively supplement existing unique statutory provisions protecting the independence of public television and also meet the Supreme Court’s articulated standards.
Monday, January 4, 2021
Two-Sided Market, R&D and Payments System Evolution
By D Daniel Sokol
https://lawprofessors.typepad.com/antitrustprof_blog/2021/01/two-sided-market-rd-and-payments-system-evolution.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+typepad%2FFBhU+%28Antitrust+%26+Competition+Policy+Blog%29#
Two-Sided Market, R&D and Payments System Evolution
By:Bin Grace Li; James McAndrews; Zhu Wang
Abstract:It takes many years for more efficient electronic payments to be widely used, and the fees that merchants (consumers) pay for using those services are increasing (decreasing) over time. We address these puzzles by studying payments system evolution with a dynamic model in a twosided market setting. We calibrate the model to the U.S. payment card data, and conduct welfare and policy analysis. Our analysis shows that the market power of electronic payment networks plays important roles in explaining the slow adoption and asymmetric price changes, and the welfare impact of regulations may vary significantly through the endogenous R&D channel.
URL:http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/057&r=com
Two-Sided Market, R&D and Payments System Evolution
By D Daniel Sokol
https://lawprofessors.typepad.com/antitrustprof_blog/2021/01/two-sided-market-rd-and-payments-system-evolution.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+typepad%2FFBhU+%28Antitrust+%26+Competition+Policy+Blog%29#
Two-Sided Market, R&D and Payments System Evolution
By:Bin Grace Li; James McAndrews; Zhu Wang
Abstract:It takes many years for more efficient electronic payments to be widely used, and the fees that merchants (consumers) pay for using those services are increasing (decreasing) over time. We address these puzzles by studying payments system evolution with a dynamic model in a twosided market setting. We calibrate the model to the U.S. payment card data, and conduct welfare and policy analysis. Our analysis shows that the market power of electronic payment networks plays important roles in explaining the slow adoption and asymmetric price changes, and the welfare impact of regulations may vary significantly through the endogenous R&D channel.
URL:http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/057&r=com
Linda Greenhouse on Ruth Bader Ginsburg:
How Did a Young, Unknown Lawyer Change the World?Ruth Bader Ginsburg took on the obstacles to women’s equality incrementally, but she was powered by a larger vision.
By Linda Greenhouse
Sept. 24, 2020
I replied that she had a project, a goal from which she never deviated during her long career. It was to have not only the Constitution but also society itself understand men and women as equal.
Fair enough, as far as that explanation goes. But I think it misses something deeper about Justice Ginsburg, who died last Friday at 87. What she had, in addition to passion, skill and a field marshal’s sense of strategy, was imagination.
She envisioned a world different from the one she had grown up in, a better world in which gender was no obstacle to women’s achievement, to their ability to dream big and to realize their aspirations. Then she set out to use the law to usher that world into existence.
Read the full article at https://www.nytimes.com/2020/09/24/opinion/sunday/ginsburg-supreme-court.html
How Did a Young, Unknown Lawyer Change the World?Ruth Bader Ginsburg took on the obstacles to women’s equality incrementally, but she was powered by a larger vision.
By Linda Greenhouse
Sept. 24, 2020
DAR Comment: As we start the New Year, this seems a good moment to read Linda Greenhouse's tribute to Ruth Bader Ginsburg. An axcerpt and citation to the article follow
I replied that she had a project, a goal from which she never deviated during her long career. It was to have not only the Constitution but also society itself understand men and women as equal.
Fair enough, as far as that explanation goes. But I think it misses something deeper about Justice Ginsburg, who died last Friday at 87. What she had, in addition to passion, skill and a field marshal’s sense of strategy, was imagination.
She envisioned a world different from the one she had grown up in, a better world in which gender was no obstacle to women’s achievement, to their ability to dream big and to realize their aspirations. Then she set out to use the law to usher that world into existence.
Read the full article at https://www.nytimes.com/2020/09/24/opinion/sunday/ginsburg-supreme-court.html
Article on section 230 immunity
Posted: 11 Dec 2020 08:20 AM PST
The immunity provided to internet platforms by section 230 of Communications Decency Act is a hot topic these days. Gregory Dickenson has written Rebooting Internet Immunity. Here is the abstract:
We do everything online. We shop, travel, invest, socialize, and even hold garage sales. Even though we may not care whether a company operates online or in the physical world, however, the question has dramatic consequences for the companies themselves. Online and offline entities are governed by different rules. Under Section 230 of the Communications Decency Act, online entities—but not physical-world entities—are immune from lawsuits related to content authored by their users or customers. As a result, online entities have been able to avoid claims for harms caused by their negligence and defective product designs simply because they operate online.
The reason for the disparate treatment is the internet’s dramatic evolution over the last two decades. The internet of 1996 served as an information repository and communications channel and was well governed by Section 230, which treats internet entities as another form of mass media: Because Facebook, Twitter and other online companies could not possibly review the mass of content that flows through their systems, Section 230 immunizes them from claims related to user content. But content distribution is not the internet’s only function, and it is even less so now than it was in 1996. The internet also operates as a platform for the delivery of real-world goods and services and requires a correspondingly diverse immunity doctrine. This Article proposes refining online immunity by limiting it to claims that threaten to impose a content-moderation burden on internet defendants. Where a claim is preventable other than by content moderation—for example, by redesigning an app or website—a plaintiff could freely seek relief, just as in the physical world. This approach empowers courts to identify culpable actors in the virtual world and treat like conduct alike wherever it occurs.
Posted: 11 Dec 2020 08:20 AM PST
The immunity provided to internet platforms by section 230 of Communications Decency Act is a hot topic these days. Gregory Dickenson has written Rebooting Internet Immunity. Here is the abstract:
We do everything online. We shop, travel, invest, socialize, and even hold garage sales. Even though we may not care whether a company operates online or in the physical world, however, the question has dramatic consequences for the companies themselves. Online and offline entities are governed by different rules. Under Section 230 of the Communications Decency Act, online entities—but not physical-world entities—are immune from lawsuits related to content authored by their users or customers. As a result, online entities have been able to avoid claims for harms caused by their negligence and defective product designs simply because they operate online.
The reason for the disparate treatment is the internet’s dramatic evolution over the last two decades. The internet of 1996 served as an information repository and communications channel and was well governed by Section 230, which treats internet entities as another form of mass media: Because Facebook, Twitter and other online companies could not possibly review the mass of content that flows through their systems, Section 230 immunizes them from claims related to user content. But content distribution is not the internet’s only function, and it is even less so now than it was in 1996. The internet also operates as a platform for the delivery of real-world goods and services and requires a correspondingly diverse immunity doctrine. This Article proposes refining online immunity by limiting it to claims that threaten to impose a content-moderation burden on internet defendants. Where a claim is preventable other than by content moderation—for example, by redesigning an app or website—a plaintiff could freely seek relief, just as in the physical world. This approach empowers courts to identify culpable actors in the virtual world and treat like conduct alike wherever it occurs.
As His Term Ends, Trump Faces More Questions on Payments to His Hotel
A civil case being pursued by the attorney general for the District of Columbia has brought renewed attention to what limits there should be on a president’s ability to profit from the office.
https://www.nytimes.com/2020/12/07/us/politics/trump-hotel-payments.html
A civil case being pursued by the attorney general for the District of Columbia has brought renewed attention to what limits there should be on a president’s ability to profit from the office.
https://www.nytimes.com/2020/12/07/us/politics/trump-hotel-payments.html
Naomi Claxton In DC Bar Connect, December 3, 2020
Proskauer's Antitrust Team Recommends that its Clients Conduct a Price-Gouging Audit:
"The definition of price gouging varies significantly from state to state, and consequently, so do the compliance standards. Non-compliance could be met with hefty penalties, as most states charge per individual violation. State attorneys general, private plaintiffs, and the federal government have all been active in price gouging investigations and enforcement actions up and down the supply chain.
Because these price gouging compliance risks are both new and unique to this pandemic, companies cannot necessarily rely on their existing monitoring and risk mitigation systems (for price gouging or otherwise). Even those few companies that had price gouging compliance procedures in place before this pandemic may find that those procedures are out of date or incomplete due to recent changes in the law and changes in enforcement priorities. Given the increased risks to national and multi-state companies across the supply chain, companies should consider conducting what effectively amounts to a 'Price Gouging Audit'."
www.mindingyourbusinesslitigation.com/2020/07/...
NYT: Paycheck Protection … But only for a Few
The government’s Paycheck Protection Program was meant to funnel aid to millions of small businesses so that they could pay their bills during the coronavirus pandemic. But new data shows what many applicants already suspected [https://www.nytimes.com/2020/12/02/business/paycheck-protection-program-coronavirus.html] : Most of the funding went to a tiny fraction of those who needed it. A report from the Small Business Administration revealed that 1 percent of the program’s 5.2 million borrowers received more than a quarter of the $523 billion that was distributed. As for the other 99 percent? Many businesses received much less than what they applied for, and have struggled all the more since the program ended in August. [https://www.nytimes.com/2020/09/01/business/economy/small-businesses-coronavirus.html]
The government’s Paycheck Protection Program was meant to funnel aid to millions of small businesses so that they could pay their bills during the coronavirus pandemic. But new data shows what many applicants already suspected [https://www.nytimes.com/2020/12/02/business/paycheck-protection-program-coronavirus.html] : Most of the funding went to a tiny fraction of those who needed it. A report from the Small Business Administration revealed that 1 percent of the program’s 5.2 million borrowers received more than a quarter of the $523 billion that was distributed. As for the other 99 percent? Many businesses received much less than what they applied for, and have struggled all the more since the program ended in August. [https://www.nytimes.com/2020/09/01/business/economy/small-businesses-coronavirus.html]
Stoller on Slack, Salesforce, and Microsoft
Slack filed a complaint with the EU Competition authority, accusing Microsoft of using its dominant hold on business software tools to exclude Slack’s products. [see https://www.nytimes.com/2020/07/22/technology/slack-microsoft-antitrust.html]
“Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software,” Jonathan Prince, vice president of communications and policy at Slack, said in a statement. This comment is an echo of the monopoly maintenance claims used against the corporation in the 1998 antitrust case that nearly broke it up.
But there was no action forthcoming. Two months later, Slack warned investors that Microsoft might strike back, writing as an investment risk that “it could be subject to retaliatory or other adverse measures by Microsoft, its employees, or agents in response to the complaint that we filed with the European Commission.” And then finally, this week, Slack threw in the towel, selling itself to Salesforce and ceasing to exist as an independent concern. As Casey Newton put it at Verge, “the medium-term future of work is increasingly a choice between three giants: Microsoft, Salesforce, and (in a distant third) Google. And with that, the golden age of worker choice in productivity tools seems to be coming to an end.” Slack’s fate, Newton notes, “mirrors that of many one-time innovators in enterprise productivity,” such as Mailbox, Acompli, and Evernote.
Had Microsoft been broken up in 1998, had antitrust enforcers acted at any point in the last fifteen years to prohibit predatory pricing or illegal tying in software markets or to slow the massive acquisition spree that both Microsoft and Salesforce have undertaken, Slack would still be an independent company and the enterprise software space would be a vibrant place with lots of choices and competition. But there is effectively no antitrust law if you are powerful. So Slack sold out to a more powerful entity, Salesforce, to protect themselves from Microsoft’s predation, since law enforcers wouldn’t bother to do so.
Now, this is a big merger, and the $27 billion price Salesforce for Slack is paying is no small amount, so clearly, antitrust enforcers will notice the deal and look it over. But my guess is that enforcers will examine this merger with the same care they showed every other transaction they waved through while napping. Of course the deal should be blocked, because the goal is to build out a vertically integrated enterprise sales and software toolset and exclude others from that market. That’s what Salesforce is, a mess of product lines glued together with press releases, market power and political connections.
Source: 12/6/2020 Stoller "BIG" newsletter
Slack filed a complaint with the EU Competition authority, accusing Microsoft of using its dominant hold on business software tools to exclude Slack’s products. [see https://www.nytimes.com/2020/07/22/technology/slack-microsoft-antitrust.html]
“Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software,” Jonathan Prince, vice president of communications and policy at Slack, said in a statement. This comment is an echo of the monopoly maintenance claims used against the corporation in the 1998 antitrust case that nearly broke it up.
But there was no action forthcoming. Two months later, Slack warned investors that Microsoft might strike back, writing as an investment risk that “it could be subject to retaliatory or other adverse measures by Microsoft, its employees, or agents in response to the complaint that we filed with the European Commission.” And then finally, this week, Slack threw in the towel, selling itself to Salesforce and ceasing to exist as an independent concern. As Casey Newton put it at Verge, “the medium-term future of work is increasingly a choice between three giants: Microsoft, Salesforce, and (in a distant third) Google. And with that, the golden age of worker choice in productivity tools seems to be coming to an end.” Slack’s fate, Newton notes, “mirrors that of many one-time innovators in enterprise productivity,” such as Mailbox, Acompli, and Evernote.
Had Microsoft been broken up in 1998, had antitrust enforcers acted at any point in the last fifteen years to prohibit predatory pricing or illegal tying in software markets or to slow the massive acquisition spree that both Microsoft and Salesforce have undertaken, Slack would still be an independent company and the enterprise software space would be a vibrant place with lots of choices and competition. But there is effectively no antitrust law if you are powerful. So Slack sold out to a more powerful entity, Salesforce, to protect themselves from Microsoft’s predation, since law enforcers wouldn’t bother to do so.
Now, this is a big merger, and the $27 billion price Salesforce for Slack is paying is no small amount, so clearly, antitrust enforcers will notice the deal and look it over. But my guess is that enforcers will examine this merger with the same care they showed every other transaction they waved through while napping. Of course the deal should be blocked, because the goal is to build out a vertically integrated enterprise sales and software toolset and exclude others from that market. That’s what Salesforce is, a mess of product lines glued together with press releases, market power and political connections.
Source: 12/6/2020 Stoller "BIG" newsletter
Greenhouse on US Supreme Court and religious rights
Excerpt:
The Supreme Court has become a prize in a war over how far the country will go to privilege religious rights over other rights, including the right not to be discriminated against. A case the court heard last month, Fulton v. City of Philadelphia, raises the question whether a Catholic social services agency under contract with the city to place children in foster homes can refuse to consider same-sex couples as foster parents despite the city’s nondiscrimination law.
For religious adherents pressing such claims, equal treatment is no longer sufficient. Special treatment is the demand. That’s clear in another Covid-related case that reached the Supreme Court this week. In mid-November, Gov. Andrew Beshear of Kentucky issued a temporary order barring in-person instruction in all public and private schools. A religious school, Danville Christian Academy, promptly won an injunction from a federal district judge.
A three-judge panel of the United States Court of Appeals for the Sixth Circuit stayed the injunction this past weekend. The court observed that because the order applied to religious and secular schools alike, it was “neutral and of general applicability,” key words that under a 1990 Supreme Court decision, Employment Division v. Smith, foreclose a claim under the First Amendment’s Free Exercise Clause for a special religious exemption.
Claiming that “it is called by God to provide in-person instruction to its students,” the school has gone to Justice Kavanaugh, who has supervisory jurisdiction over the Sixth Circuit, asking him to vacate the stay of the injunction. The 35-page brief skips almost entirely over the fact that public schools are under the same strictures, asking instead, “Why can a 12-year-old go to the movies along with two dozen other people, but she can’t watch ‘The Greatest Story Ever Told’ with a smaller group in Bible class?” Justice Kavanaugh has told Governor Beshear to respond by Friday afternoon.
From: https://www.nytimes.com/2020/12/03/opinion/amy-coney-barrett-supreme-court-religion.html
From Slate: Congress considers changes to one of the country’s core internet regulation laws, known as Communications Decency Act Section 230.
Right now, CDA 230 gives platforms themselves broad discretion to take down user speech that they consider “objectionable,” even if that speech doesn’t violate the law. Republicans have claimed (with little support) that the law gives platforms cover for “conservative bias” in content moderation. In earlier proposals, Republicans like Sen. Josh Hawley called for platforms to protect all speech, or to somehow create politically “neutral” rules. The DOJ and Graham bills abandon that approach and instead spell out their drafters’ speech preferences. They would keep immunity in place only for specified categories of lawful-but-awful speech, including pornography, barely legal harassment, and pro-terrorist or pro-suicide material. But platforms would face new legal exposure if they take down content for reasons not included in this government-approved list—such as Holocaust denial, white supremacist racial theories, and electoral disinformation. Apparently in these lawmakers’ value systems, platforms should be free to take down The Virgin Suicides, but not The Protocols of the Elders of Zion, recommendations to cure COVID-19 by ingesting bleach, or misleading information about voting by mail.
From: Lindsey Graham and the DOJ’s suggested Section 230 reform would hurt content moderation. (slate.com)
Right now, CDA 230 gives platforms themselves broad discretion to take down user speech that they consider “objectionable,” even if that speech doesn’t violate the law. Republicans have claimed (with little support) that the law gives platforms cover for “conservative bias” in content moderation. In earlier proposals, Republicans like Sen. Josh Hawley called for platforms to protect all speech, or to somehow create politically “neutral” rules. The DOJ and Graham bills abandon that approach and instead spell out their drafters’ speech preferences. They would keep immunity in place only for specified categories of lawful-but-awful speech, including pornography, barely legal harassment, and pro-terrorist or pro-suicide material. But platforms would face new legal exposure if they take down content for reasons not included in this government-approved list—such as Holocaust denial, white supremacist racial theories, and electoral disinformation. Apparently in these lawmakers’ value systems, platforms should be free to take down The Virgin Suicides, but not The Protocols of the Elders of Zion, recommendations to cure COVID-19 by ingesting bleach, or misleading information about voting by mail.
From: Lindsey Graham and the DOJ’s suggested Section 230 reform would hurt content moderation. (slate.com)
From Tax Policy Center: Balancing Hate, The First Amendment, And Tax-Exempt Status
Is hate speech constitutionally protected? Do groups that express hate in their words and deeds deserve tax-exempt status? Is the IRS equipped to judge what is hate and what is merely odious? Does it even matter?
The House Ways & Means Oversight Subcommittee held a hearing on this fraught subject last week. And the answers, it turns out, are very complicated.
Members heard dramatic and painful testimony from victims of hate. But they also heard important, if less passionate, testimony from the former head of the IRS’s tax-exempt organizations division about how the IRS addresses requests for tax-exempt status and from a law professor who cautioned that the Constitution requires “viewpoint-neutral” administration of requests for tax exemption.
Marcus Owens, the former IRS head of tax-exempt organizations, described the IRS process for permitting tax deductions for contributions to educational, charitable, or religious organizations. He acknowledged that the IRS faces multiple challenges when determining whether an organization meets the tests required for being eligible to receive tax-deductible contributions, for example, by being an educational entity.
Ideally, the IRS would examine a group’s written application, activities, organizing documents, operational plans, and public statements. Under IRS rules, if the group advocates a particular viewpoint, it may qualify as educational as long as it presents “a sufficiently full and fair exposition of the pertinent facts as to permit an individual or the public to form an independent opinion or conclusion;” but it would not qualify if its principle function is “the mere presentation of unsupported opinion.”
Though speech alone is not determinative, courts have ruled that tax-exempt status can be denied for organizations that frequently use inflammatory statements, including ethnic, racial and religious slurs in their communications, coupled with distorted statements presented as fact.
But supervising tax-exempt groups is tangential to the IRS’s core mission of collecting revenue and, faced with reduced resources, the IRS has progressively required or reviewed less information, denied fewer applications for tax-exempt status, and “systematically dismantled” its enforcement structure, Owens testified.
In fiscal year 2018, the IRS examined only 2,816 of the 1.6 million returns filed by tax-exempt organizations. And of the nearly 92,000 new applications it received, the IRS rejected only 71, less than five percent of the number rejected in 2007. This reduced level of activities likely reflects both fewer resources and Congressional criticism of prior policies and procedures.
UCLA law professor Eugene Volokh carefully outlined constitutional limitations the IRS operates under. Hate speech is protected by the Constitution unless it involves imminent threats. While nonprofits have no constitutional right to a tax exemption, they do have a right to be free from discrimination. “The Tax Code indeed subsidizes hate,” he said, “just as it subsidizes Socialism, Satanism, and a wide variety of dangerous and offensive ideas. Under the First Amendment, tax exemptions have to be distributed without discrimination based on viewpoint; that means that evil views have to be treated the same way as good views.”
Excerpt from https://www.taxpolicycenter.org/taxvox/balancing-hate-first-amendment-and-tax-exempt-status
Is hate speech constitutionally protected? Do groups that express hate in their words and deeds deserve tax-exempt status? Is the IRS equipped to judge what is hate and what is merely odious? Does it even matter?
The House Ways & Means Oversight Subcommittee held a hearing on this fraught subject last week. And the answers, it turns out, are very complicated.
Members heard dramatic and painful testimony from victims of hate. But they also heard important, if less passionate, testimony from the former head of the IRS’s tax-exempt organizations division about how the IRS addresses requests for tax-exempt status and from a law professor who cautioned that the Constitution requires “viewpoint-neutral” administration of requests for tax exemption.
Marcus Owens, the former IRS head of tax-exempt organizations, described the IRS process for permitting tax deductions for contributions to educational, charitable, or religious organizations. He acknowledged that the IRS faces multiple challenges when determining whether an organization meets the tests required for being eligible to receive tax-deductible contributions, for example, by being an educational entity.
Ideally, the IRS would examine a group’s written application, activities, organizing documents, operational plans, and public statements. Under IRS rules, if the group advocates a particular viewpoint, it may qualify as educational as long as it presents “a sufficiently full and fair exposition of the pertinent facts as to permit an individual or the public to form an independent opinion or conclusion;” but it would not qualify if its principle function is “the mere presentation of unsupported opinion.”
Though speech alone is not determinative, courts have ruled that tax-exempt status can be denied for organizations that frequently use inflammatory statements, including ethnic, racial and religious slurs in their communications, coupled with distorted statements presented as fact.
But supervising tax-exempt groups is tangential to the IRS’s core mission of collecting revenue and, faced with reduced resources, the IRS has progressively required or reviewed less information, denied fewer applications for tax-exempt status, and “systematically dismantled” its enforcement structure, Owens testified.
In fiscal year 2018, the IRS examined only 2,816 of the 1.6 million returns filed by tax-exempt organizations. And of the nearly 92,000 new applications it received, the IRS rejected only 71, less than five percent of the number rejected in 2007. This reduced level of activities likely reflects both fewer resources and Congressional criticism of prior policies and procedures.
UCLA law professor Eugene Volokh carefully outlined constitutional limitations the IRS operates under. Hate speech is protected by the Constitution unless it involves imminent threats. While nonprofits have no constitutional right to a tax exemption, they do have a right to be free from discrimination. “The Tax Code indeed subsidizes hate,” he said, “just as it subsidizes Socialism, Satanism, and a wide variety of dangerous and offensive ideas. Under the First Amendment, tax exemptions have to be distributed without discrimination based on viewpoint; that means that evil views have to be treated the same way as good views.”
Excerpt from https://www.taxpolicycenter.org/taxvox/balancing-hate-first-amendment-and-tax-exempt-status
Excerpts from The New Yorker: “How Venture Capitalists Are Deforming Capitalism”
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
Why it would be a huge mistake to allow Big Tech firms to acquire banks
By
Art Wilmarth
November 26, 2020 9:00 AM EST
https://fortune.com/2020/11/26/big-tech-banking-glass-steagall-act-financial-crisis/
·
Prior to 1980, the Glass-Steagall Act of 1933 maintained a strict separation between our banking system and our capital markets. However, financial regulators opened loopholes in Glass-Steagall during the 1980s and 1990s, allowing banks to engage in securities activities and permitting nonbanks to offer bank-like products.
“Universal banks” (banks engaged in securities activities) and “shadow banks” (nonbanks offering bank-like services) dominated our financial markets after Congress repealed Glass-Steagall in 1999. Universal banks and shadow banks played leading roles in the toxic subprime lending boom that led to the financial crisis of 2007–09.
In response to the financial crisis, the Treasury Department and the Federal Reserve bailed out big banks as well as large shadow banks (including AIG, Morgan Stanley, and Goldman Sachs). Federal agencies also protected short-term financial instruments that functioned as substitutes for bank deposits, such as money market mutual funds, commercial paper, and securities repurchase agreements (“repos”).
The federal government’s response to the financial crisis went far beyond the traditional U.S. policy of protecting banks and bank depositors. Federal authorities effectively wrapped the federal “safety net” around our entire financial system. By doing so, they “bankified” our financial markets.
The Dodd-Frank Act’s regulatory reforms did not correct the deeply flawed structure of the financial system—including the dominance of universal banks and shadow banks—that caused the financial crisis of 2007–09. Consequently, federal agencies felt compelled to provide another series of bailouts when the COVID-19 pandemic triggered a new financial crisis. Federal authorities aggressively intervened in March to protect universal banks, shadow banks, and short-term financial markets from failure. In addition, federal agencies took the unprecedented step of backstopping the corporate bond market.
That extraordinary measure was not coincidental. Universal banks and shadow banks promoted a massive expansion of corporate debt during the past decade. The debts of U.S. corporations reached a record level of $10.5 trillion in March 2020. Almost two-thirds of those debts were either rated as “junk” or received the lowest investment-grade rating (BBB). Corporate debt markets would have collapsed without the federal government’s backstop, with severe knock-on effects for our financial system and economy.
. Now federal regulators are trying to bankify the rest of the economy. The Office of the Comptroller of the Currency (OCC)—the regulator of national banks—wants to give national bank charters to fintechs that offer lending or payment services but do not accept deposits. The Federal Deposit Insurance Corporation (FDIC) is considering a rule that would allow all types of commercial firms to acquire FDIC-insured industrial banks (consumer banks chartered by Utah and several other states).
The OCC’s and FDIC’s initiatives would allow technology firms and other commercial enterprises to obtain banking privileges and benefits—including access to the federal “safety net”—without complying with many of the prudential requirements governing FDIC-insured full-service banks. For example, commercial owners of fintech national banks and industrial banks would not have to comply with the Bank Holding Company (BHC) Act, which prohibits affiliations between FDIC-insured full-service banks and commercial firms. That prohibition is the cornerstone of our historic policy of separating banking and commerce.
The Glass-Steagall and BHC acts separated banking from commerce to prevent undue concentrations of financial and economic power and to minimize conflicts of interest in bank lending and investment advice. A bank that controls—or is controlled by—a commercial firm has powerful and dangerous incentives to use its lending and investment policies to support its commercial affiliate. Problems that arise in the commercial affiliate are likely to infect the bank, as shown by the recent collapse of Wirecard in Germany.
If the OCC’s and FDIC’s initiatives succeed, Congress will face intense pressure to repeal the separation of banking and commerce. Big Tech firms will lobby for permission to acquire full-service banks, and big banks will push for authority to acquire technology firms. If Congress gives in (as it did when it repealed Glass-Steagall), mergers between Big Tech companies and big banks are virtually certain to occur.
The result will be a bankification of our economy. Giant banking-and-commercial conglomerates will spread across the nation. Commercial owners of banks will profit from the federal “safety net,” including the ability to offer FDIC-insured deposits—the cheapest and most stable source of funding available in the private market. Large commercial firms that own sizable banks will be considered “too big to fail” and will enjoy enormous advantages over smaller competitors that can’t afford to acquire banks.
When the next crisis occurs, federal agencies will feel compelled to rescue not only our financial system but also our leading banking-and-commercial conglomerates. Market discipline, which has already been greatly weakened in our financial markets, will largely disappear from the rest of our economy.
Congress should adopt two crucial measures to reverse the bankification of our country. First, Congress should enact a new Glass-Steagall Act to reestablish a strict separation between our banking system and our capital markets. Congress should prohibit banks from underwriting and trading in securities and other capital market instruments, except for government bonds.
Congress should also prohibit nonbanks from offering short-term financial instruments that function as deposit substitutes. Only banks should be allowed to issue money market mutual funds, commercial paper, and repos. Requiring nonbanks to fund their operations with longer-term securities would eliminate the shadow bank business model, restore market discipline, and improve the stability of our financial markets.
Second, Congress should reaffirm the separation of banking and commerce by overruling the OCC’s and FDIC’s initiatives. Both measures would return banks to their traditional roles as objective providers of deposit, credit, payment, and fiduciary services. The “too big to fail” problem would be greatly diminished with the elimination of universal banks and the likely disappearance of shadow banks. Banks and commercial firms would be prevented from exercising any type of control over each other.
Banks and the capital markets would once again become independent sectors with strong incentives to serve the needs of consumers, communities, and Main Street businesses. Our financial system and our economy would become more stable, more competitive, and more productive.
Art Wilmarth is a professor emeritus of law at George Washington University. This essay is based on his recently published book, Taming the Megabanks: Why We Need a New Glass-Steagall Act, and his testimony before the House Financial Services Committee’s Task Force on Financial Technology on Sept. 29, 2020.
By
Art Wilmarth
November 26, 2020 9:00 AM EST
https://fortune.com/2020/11/26/big-tech-banking-glass-steagall-act-financial-crisis/
·
Prior to 1980, the Glass-Steagall Act of 1933 maintained a strict separation between our banking system and our capital markets. However, financial regulators opened loopholes in Glass-Steagall during the 1980s and 1990s, allowing banks to engage in securities activities and permitting nonbanks to offer bank-like products.
“Universal banks” (banks engaged in securities activities) and “shadow banks” (nonbanks offering bank-like services) dominated our financial markets after Congress repealed Glass-Steagall in 1999. Universal banks and shadow banks played leading roles in the toxic subprime lending boom that led to the financial crisis of 2007–09.
In response to the financial crisis, the Treasury Department and the Federal Reserve bailed out big banks as well as large shadow banks (including AIG, Morgan Stanley, and Goldman Sachs). Federal agencies also protected short-term financial instruments that functioned as substitutes for bank deposits, such as money market mutual funds, commercial paper, and securities repurchase agreements (“repos”).
The federal government’s response to the financial crisis went far beyond the traditional U.S. policy of protecting banks and bank depositors. Federal authorities effectively wrapped the federal “safety net” around our entire financial system. By doing so, they “bankified” our financial markets.
The Dodd-Frank Act’s regulatory reforms did not correct the deeply flawed structure of the financial system—including the dominance of universal banks and shadow banks—that caused the financial crisis of 2007–09. Consequently, federal agencies felt compelled to provide another series of bailouts when the COVID-19 pandemic triggered a new financial crisis. Federal authorities aggressively intervened in March to protect universal banks, shadow banks, and short-term financial markets from failure. In addition, federal agencies took the unprecedented step of backstopping the corporate bond market.
That extraordinary measure was not coincidental. Universal banks and shadow banks promoted a massive expansion of corporate debt during the past decade. The debts of U.S. corporations reached a record level of $10.5 trillion in March 2020. Almost two-thirds of those debts were either rated as “junk” or received the lowest investment-grade rating (BBB). Corporate debt markets would have collapsed without the federal government’s backstop, with severe knock-on effects for our financial system and economy.
. Now federal regulators are trying to bankify the rest of the economy. The Office of the Comptroller of the Currency (OCC)—the regulator of national banks—wants to give national bank charters to fintechs that offer lending or payment services but do not accept deposits. The Federal Deposit Insurance Corporation (FDIC) is considering a rule that would allow all types of commercial firms to acquire FDIC-insured industrial banks (consumer banks chartered by Utah and several other states).
The OCC’s and FDIC’s initiatives would allow technology firms and other commercial enterprises to obtain banking privileges and benefits—including access to the federal “safety net”—without complying with many of the prudential requirements governing FDIC-insured full-service banks. For example, commercial owners of fintech national banks and industrial banks would not have to comply with the Bank Holding Company (BHC) Act, which prohibits affiliations between FDIC-insured full-service banks and commercial firms. That prohibition is the cornerstone of our historic policy of separating banking and commerce.
The Glass-Steagall and BHC acts separated banking from commerce to prevent undue concentrations of financial and economic power and to minimize conflicts of interest in bank lending and investment advice. A bank that controls—or is controlled by—a commercial firm has powerful and dangerous incentives to use its lending and investment policies to support its commercial affiliate. Problems that arise in the commercial affiliate are likely to infect the bank, as shown by the recent collapse of Wirecard in Germany.
If the OCC’s and FDIC’s initiatives succeed, Congress will face intense pressure to repeal the separation of banking and commerce. Big Tech firms will lobby for permission to acquire full-service banks, and big banks will push for authority to acquire technology firms. If Congress gives in (as it did when it repealed Glass-Steagall), mergers between Big Tech companies and big banks are virtually certain to occur.
The result will be a bankification of our economy. Giant banking-and-commercial conglomerates will spread across the nation. Commercial owners of banks will profit from the federal “safety net,” including the ability to offer FDIC-insured deposits—the cheapest and most stable source of funding available in the private market. Large commercial firms that own sizable banks will be considered “too big to fail” and will enjoy enormous advantages over smaller competitors that can’t afford to acquire banks.
When the next crisis occurs, federal agencies will feel compelled to rescue not only our financial system but also our leading banking-and-commercial conglomerates. Market discipline, which has already been greatly weakened in our financial markets, will largely disappear from the rest of our economy.
Congress should adopt two crucial measures to reverse the bankification of our country. First, Congress should enact a new Glass-Steagall Act to reestablish a strict separation between our banking system and our capital markets. Congress should prohibit banks from underwriting and trading in securities and other capital market instruments, except for government bonds.
Congress should also prohibit nonbanks from offering short-term financial instruments that function as deposit substitutes. Only banks should be allowed to issue money market mutual funds, commercial paper, and repos. Requiring nonbanks to fund their operations with longer-term securities would eliminate the shadow bank business model, restore market discipline, and improve the stability of our financial markets.
Second, Congress should reaffirm the separation of banking and commerce by overruling the OCC’s and FDIC’s initiatives. Both measures would return banks to their traditional roles as objective providers of deposit, credit, payment, and fiduciary services. The “too big to fail” problem would be greatly diminished with the elimination of universal banks and the likely disappearance of shadow banks. Banks and commercial firms would be prevented from exercising any type of control over each other.
Banks and the capital markets would once again become independent sectors with strong incentives to serve the needs of consumers, communities, and Main Street businesses. Our financial system and our economy would become more stable, more competitive, and more productive.
Art Wilmarth is a professor emeritus of law at George Washington University. This essay is based on his recently published book, Taming the Megabanks: Why We Need a New Glass-Steagall Act, and his testimony before the House Financial Services Committee’s Task Force on Financial Technology on Sept. 29, 2020.
FTC Holds Workshop on Data Portability
By Kim Phan & Katie Morehead on September 29, 2020
POSTED IN DATA PORTABILITY, FEDERAL TRADE COMMISSION (FTC), ONLINE PRIVACY [https://www.cyberadviserblog.com/category/federal-trade-commission/]
On September 22nd, the Federal Trade Commission (FTC) hosted an event, “Data To Go: An FTC Workshop on Data Portability,” [https://www.ftc.gov/news-events/events-calendar/data-go-ftc-workshop-data-portability] to examine the potential benefits and challenges to consumers and competition raised by data portability. Data portability means giving consumers the ability to receive a copy of their data for their own use or and move the data to another entity or service.
The workshop did not focus on any specific policy proposals or legislation, but the FTC expressed a desire to begin discussions as issues associated with data portability continue to evolve. The FTC noted that in addition to providing benefits to consumers, data portability may benefit competition by allowing new entrants to access data they otherwise would not have so that they can grow competing platforms and services. At the same time, the FTC recognizes that there may be challenges to implementing or requiring data portability.
During the workshop, FTC staff discussed several examples of existing data portability laws and regulations, such as the right to data portability under Article 20 of the European Union’s General Data Protection Regulation (GDPR) and the right for consumers to make requests for portable data under the California Consumer Privacy Act (CCPA). The FTC noted that other countries have taken different approaches, like India and the United Kingdom’s data portability regulations that are narrowly tailored to address only the health and financial services sectors.
The panelists of the workshop highlighted a variety of issues and considerations for data portability. From an information security perspective, the panelists discussed how businesses would need to ensure they could verify the identity of the consumer before completing a transfer of data to prevent unauthorized actors from stealing people’s data. From a privacy perspective, the panelists discussed how users should be fully informed about the data they are receiving, to whom they can transfer their data, and how a new entity or service may use the information they are given by the consumer.
Additionally, from an operational perspective, the panelists remarked that the data provided to consumers would need to be interoperable between different systems. In one example discussed by the panelists, if consumers receive their data and are not able to give their information to another entity or use their data with other systems then the ability to port the data loses its effectiveness. The panelists called for businesses or the government to implement some form of standardization so that the data would remain useful to consumers. Some panelists called for a federal privacy and security law that would set protection standards for businesses in regards to data portability.
The FTC is not the only government agency exploring the concept of data portability. The Consumer Financial Protection Bureau (CFPB) recently announced a potential rulemaking under the Dodd-Frank Act Section 1033, which authorizes the CFPB to create rules enhancing consumers’ access to their financial data. The CFPB is asking for comments on similar issues as those discussed during the FTC working surrounding data portability, such as privacy, security, effective consumer control over data access, and accountability for errors and any unauthorized access.
By Kim Phan & Katie Morehead on September 29, 2020
POSTED IN DATA PORTABILITY, FEDERAL TRADE COMMISSION (FTC), ONLINE PRIVACY [https://www.cyberadviserblog.com/category/federal-trade-commission/]
On September 22nd, the Federal Trade Commission (FTC) hosted an event, “Data To Go: An FTC Workshop on Data Portability,” [https://www.ftc.gov/news-events/events-calendar/data-go-ftc-workshop-data-portability] to examine the potential benefits and challenges to consumers and competition raised by data portability. Data portability means giving consumers the ability to receive a copy of their data for their own use or and move the data to another entity or service.
The workshop did not focus on any specific policy proposals or legislation, but the FTC expressed a desire to begin discussions as issues associated with data portability continue to evolve. The FTC noted that in addition to providing benefits to consumers, data portability may benefit competition by allowing new entrants to access data they otherwise would not have so that they can grow competing platforms and services. At the same time, the FTC recognizes that there may be challenges to implementing or requiring data portability.
During the workshop, FTC staff discussed several examples of existing data portability laws and regulations, such as the right to data portability under Article 20 of the European Union’s General Data Protection Regulation (GDPR) and the right for consumers to make requests for portable data under the California Consumer Privacy Act (CCPA). The FTC noted that other countries have taken different approaches, like India and the United Kingdom’s data portability regulations that are narrowly tailored to address only the health and financial services sectors.
The panelists of the workshop highlighted a variety of issues and considerations for data portability. From an information security perspective, the panelists discussed how businesses would need to ensure they could verify the identity of the consumer before completing a transfer of data to prevent unauthorized actors from stealing people’s data. From a privacy perspective, the panelists discussed how users should be fully informed about the data they are receiving, to whom they can transfer their data, and how a new entity or service may use the information they are given by the consumer.
Additionally, from an operational perspective, the panelists remarked that the data provided to consumers would need to be interoperable between different systems. In one example discussed by the panelists, if consumers receive their data and are not able to give their information to another entity or use their data with other systems then the ability to port the data loses its effectiveness. The panelists called for businesses or the government to implement some form of standardization so that the data would remain useful to consumers. Some panelists called for a federal privacy and security law that would set protection standards for businesses in regards to data portability.
The FTC is not the only government agency exploring the concept of data portability. The Consumer Financial Protection Bureau (CFPB) recently announced a potential rulemaking under the Dodd-Frank Act Section 1033, which authorizes the CFPB to create rules enhancing consumers’ access to their financial data. The CFPB is asking for comments on similar issues as those discussed during the FTC working surrounding data portability, such as privacy, security, effective consumer control over data access, and accountability for errors and any unauthorized access.
EPA: Diesel truck owners who defeat polution controls
Brief excerpt from EPA statement:
Emissions controls have been removed from more than 550,000 diesel pickup trucks in the last decade. As a result ofthis tampering, more than 570,000 tons of excess oxides ofnitrogen(NOx) and 5,000 tons ofparticulate matter (PM) will be emitted by these tampered trucks over the lifetime ofthe vehicles. These tampered trucks constitute approximately 15 percent of the nationalpopulation of diesel trucks that were originally certified with emissions controls. But, due to their severe excess NOx emissions, these trucks have an air quality impact equivalent to adding more than 9 million additional (compliant, non- tampered) diesel pickup trucks to our roads. This Report describes these estimates ingreater detail and explains AED's underlying analysis.
https://int.nyt.com/data/documenttools/epa-on-tampered-diesel-pickups-11-20/6d70536b06182ad2/full.pdf
Brief excerpt from EPA statement:
Emissions controls have been removed from more than 550,000 diesel pickup trucks in the last decade. As a result ofthis tampering, more than 570,000 tons of excess oxides ofnitrogen(NOx) and 5,000 tons ofparticulate matter (PM) will be emitted by these tampered trucks over the lifetime ofthe vehicles. These tampered trucks constitute approximately 15 percent of the nationalpopulation of diesel trucks that were originally certified with emissions controls. But, due to their severe excess NOx emissions, these trucks have an air quality impact equivalent to adding more than 9 million additional (compliant, non- tampered) diesel pickup trucks to our roads. This Report describes these estimates ingreater detail and explains AED's underlying analysis.
https://int.nyt.com/data/documenttools/epa-on-tampered-diesel-pickups-11-20/6d70536b06182ad2/full.pdf
DCOAG: Fighting Price Gouging
For more than eight months, an emergency declaration has been in place in the District because of COVID-19. Special protections for District residents have been in place too, including a ban on price gouging. Most—but not all—District businesses have been following the law. In a price gouging lawsuit my office filed this month, we alleged that Capitol Petroleum Group (CPG), a major gasoline seller, overcharged consumers at 54 gas stations in the District during the emergency. Our investigation revealed that CPG unlawfully doubled average profits per gallon of gas at the expense of District consumers and at one point applied a markup of nearly 150% to the prices it charged other retailers.
From: DC OAG newsletter
For more than eight months, an emergency declaration has been in place in the District because of COVID-19. Special protections for District residents have been in place too, including a ban on price gouging. Most—but not all—District businesses have been following the law. In a price gouging lawsuit my office filed this month, we alleged that Capitol Petroleum Group (CPG), a major gasoline seller, overcharged consumers at 54 gas stations in the District during the emergency. Our investigation revealed that CPG unlawfully doubled average profits per gallon of gas at the expense of District consumers and at one point applied a markup of nearly 150% to the prices it charged other retailers.
From: DC OAG newsletter
The House Transportation Committee investigation report on Boeing and the 737.
https://transportation.house.gov/imo/media/doc/2020.09.15%20FINAL%20737%20MAX%20Report%20for%20Public%20Release.pdf
The picture painted in the report is not pretty.
After an exhaustive 18 month investigation, the House Transportation Committee concluded that there were multiple missed opportunities to ensure a safe MAX design and reverse flawed technical design criteria, faulty assumptions about pilot response times and production pressures.
The FAA also bears responsibility for failing to adequately review and correct Boeing’s MAX 737 errors and safety flaws. The FAA failed in its oversight of Boeing and its certification of the aircraft.
The 737 MAX crashes were not the result of a singular failure, technical mistake or mismanaged event. Instead, the two horrific crashes were the culmination of a series of faulty assumptions by Boeing’s engineers, a lack of transparency on Boeing’s management, and grossly inefficient regulation and oversight by the FAA.
From: https://blog.volkovlaw.com/2020/10/boeing-737-max-accountability-shareholder-litigation-against-boeing-board-house-transportation-committee-issues-scathing-report-part-i-of-ii/
https://transportation.house.gov/imo/media/doc/2020.09.15%20FINAL%20737%20MAX%20Report%20for%20Public%20Release.pdf
The picture painted in the report is not pretty.
After an exhaustive 18 month investigation, the House Transportation Committee concluded that there were multiple missed opportunities to ensure a safe MAX design and reverse flawed technical design criteria, faulty assumptions about pilot response times and production pressures.
The FAA also bears responsibility for failing to adequately review and correct Boeing’s MAX 737 errors and safety flaws. The FAA failed in its oversight of Boeing and its certification of the aircraft.
The 737 MAX crashes were not the result of a singular failure, technical mistake or mismanaged event. Instead, the two horrific crashes were the culmination of a series of faulty assumptions by Boeing’s engineers, a lack of transparency on Boeing’s management, and grossly inefficient regulation and oversight by the FAA.
From: https://blog.volkovlaw.com/2020/10/boeing-737-max-accountability-shareholder-litigation-against-boeing-board-house-transportation-committee-issues-scathing-report-part-i-of-ii/
For Billion-Dollar COVID Vaccines, Basic Government-Funded Science Laid the Groundwork
Much of the pioneering work on mRNA vaccines was done with government money, though drugmakers could walk away with big profits
The vaccines made by Pfizer and Moderna, which are likely to be the first to win FDA approval, in particular rely heavily on two fundamental discoveries that emerged from federally funded research: the viral protein designed by Graham and his colleagues, and the concept of RNA modification, first developed by Drew Weissman and Katalin Karikó at the University of Pennsylvania. In fact, Moderna’s founders in 2010 named the company after this concept: “Modified” + “RNA” = Moderna, according to co-founder Robert Langer.
“This is the people’s vaccine,” said corporate critic Peter Maybarduk, director of Public Citizen’s Access to Medicines program. “Federal scientists helped invent it and taxpayers are funding its development. … It should belong to humanity.”
* * *
Under a 1980 law,[Bayh-Dole Act] the NIH will obtain no money from the coronavirus vaccine patent. How much money will eventually go to the discoverers or their institutions isn’t clear. Any existing licensing agreements haven’t been publicized; patent disputes among some of the companies will likely last years. HHS’ big contracts with the vaccine companies are not transparent, and Freedom of Information Act requests have been slow-walked and heavily redacted, said Duke University law professor Arti Rai.
Some basic scientists involved in the enterprise seem to accept the potentially lopsided financial rewards.
“Having public-private partnerships is how things get done,” Graham said. “During this crisis, everything is focused on how can we do the best we can as fast as we can for the public health. All this other stuff is going to have to be figured out later.”
“It’s not a good look to become extremely wealthy off a pandemic,” McLellan said, noting the big stock sales by some vaccine company executives after they received hundreds of millions of dollars in government assistance. Still, “the companies should be able to make some money.”
For [Barney] Graham [who did important basic research at NIH], the lesson of the coronavirus vaccine response is that a few billion dollars a year spent on additional basic research could prevent a thousand times as much loss in death, illness and economic destruction. At a news conference Monday, Graham’s boss at NIH, Anthony Fauci, highlighted the spike protein work.
“We shouldn’t underestimate the value of basic biology research,” Fauci said.
Much of the pioneering work on mRNA vaccines was done with government money, though drugmakers could walk away with big profits
- By Arthur Allen, Kaiser Health News on November 18, 2020
- https://www.scientificamerican.com/article/for-billion-dollar-covid-vaccines-basic-government-funded-science-laid-the-groundwork/
The vaccines made by Pfizer and Moderna, which are likely to be the first to win FDA approval, in particular rely heavily on two fundamental discoveries that emerged from federally funded research: the viral protein designed by Graham and his colleagues, and the concept of RNA modification, first developed by Drew Weissman and Katalin Karikó at the University of Pennsylvania. In fact, Moderna’s founders in 2010 named the company after this concept: “Modified” + “RNA” = Moderna, according to co-founder Robert Langer.
“This is the people’s vaccine,” said corporate critic Peter Maybarduk, director of Public Citizen’s Access to Medicines program. “Federal scientists helped invent it and taxpayers are funding its development. … It should belong to humanity.”
* * *
Under a 1980 law,[Bayh-Dole Act] the NIH will obtain no money from the coronavirus vaccine patent. How much money will eventually go to the discoverers or their institutions isn’t clear. Any existing licensing agreements haven’t been publicized; patent disputes among some of the companies will likely last years. HHS’ big contracts with the vaccine companies are not transparent, and Freedom of Information Act requests have been slow-walked and heavily redacted, said Duke University law professor Arti Rai.
Some basic scientists involved in the enterprise seem to accept the potentially lopsided financial rewards.
“Having public-private partnerships is how things get done,” Graham said. “During this crisis, everything is focused on how can we do the best we can as fast as we can for the public health. All this other stuff is going to have to be figured out later.”
“It’s not a good look to become extremely wealthy off a pandemic,” McLellan said, noting the big stock sales by some vaccine company executives after they received hundreds of millions of dollars in government assistance. Still, “the companies should be able to make some money.”
For [Barney] Graham [who did important basic research at NIH], the lesson of the coronavirus vaccine response is that a few billion dollars a year spent on additional basic research could prevent a thousand times as much loss in death, illness and economic destruction. At a news conference Monday, Graham’s boss at NIH, Anthony Fauci, highlighted the spike protein work.
“We shouldn’t underestimate the value of basic biology research,” Fauci said.
What the EU Gets Right—and the US Gets Wrong—About Antitrust
European regulators focus on how Amazon, Apple, Facebook, and Google use—and abuse–their vast stores of data to maintain advantages over rivals.THERE’S A GROWING bipartisan consensus in the US to rein in the massive power accumulated by dominant tech firms. From state capitals to Congress, officials have launched multiple investigations of whether the big four of Amazon, Apple, Facebook, and Google are now forces more for harm than good and whether their size and scale demand government action to curtail them or potentially break them up.
US regulators have not yet shown all their cards, but they should pause before arguing that too big equals anticompetitive, or seeking to break up or substantially restructure the tech giants. Instead, they might want to look to Europe.
The US and EU have long differed in their approaches to Big Tech. US regulators and legislators have focused more on the size of these companies, while the EU has focused on issues related to control of data. Most recently, the EU sued Amazon for taking undue advantage of its customer and vendor data to gain a competitive edge over the thousands of independent businesses who sell through the platform. Earlier, the EU chipped away at Apple’s questionable tax practices and Google’s management of its ad platform. It has also attempted to give individuals more control over their data through rules such as the General Data Protection Regulation, which allows individuals to opt out of cookies and data-tracking on websites they visit.
In the US, by contrast, powerful voices, from Senator Elizabeth Warren to advocates such as the Open Markets Institute, call for antitrust enforcement to break up these companies. Tuesday, Senator Richard Blumenthal (D–Connecticut) urged “a break-up of tech giants. Because they've misused their bigness and power.” In the executive branch, Justice Department antitrust chief Makan Delrahim, also has spoken of dismantling the big companies.
As appealing as the big stick of antitrust enforcement is to a US government with memories of breaking up Standard Oil and AT&T in the 20th century, it may be the Europeans who are getting to the real issue: the companies’ use, and abuse, of data to erect empires. As European Commission executive vice president Margrethe Vestager wrote in announcing the action against Amazon, “We do not take issue with the success of Amazon or its size. Our concern is a very specific business conduct”—Amazon’s use of its data to privilege its own products over those of other sellers.
By emphasizing that data, rather than market size, gives Amazon an unfair advantage, the EU authorities are addressing the core challenge of Big Tech: It’s not their market value or their aggressive acquisitions that undermine competition, it’s the access to mountains of data. Reducing their scale through forced divestitures or curtailing their ability to acquire will satisfy bloodlust and may marginally restore competition, but unless the data market is restructured, it may all be for naught.
In the US, the Justice Department’s recent antitrust suit against Google addresses Google’s privileged use of data it collects to gain a competitive advantage. But the language of the suit, explicitly donning the mantle of the 1890 Sherman Act, echoes the outdated mantras of size and market concentration in a way that suggests a still-encumbered grasp of the real issue.
Over time, US law has come to view antitrust through a single lens: harm to the consumer. That’s a problem for critics of Big Tech, because the companies give away many of their products for free and can argue that in other cases they lower prices. The US antitrust framework simply isn’t well-suited to the unique structure and scope of these 21st-century behemoths.
In the words of Lina Khan, an attorney who served on the staff of the House antitrust subcommittee that issued a highly critical report of the tech giants in October, “the current framework in antitrust—specifically its pegging competition to consumer welfare, defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy.” The report says tech’s Big Four have gone from being “scrappy, underdog startups” to the “kinds of monopolies we last saw in the era of oil barons and railroad tycoons” and that have acquired too much power that they have then exploited. Khan favors changing the law to look more broadly at the ill effects of monopolies.
The blunt approach favored by some antitrust advocates in the US contrasts with the surgical tactics of the EU. Breakups are rhetorically appealing; they cut through the media noise and say, “We are doing something!” For that reason, they’re likely to gather continued bipartisan steam. Moreover, the EU’s focus on who owns what data and how it can be used has done little to slow Big Tech’s ascent.
But if the issue isn’t size per se but rather privileged access to and use of data, the EU approach is more tailored to these companies, rather than the 20th-century antecedents they resemble. They are not simply digital variants of Standard Oil or AT&T. They are new entities with distinct business models built on data. Unless their use of data is altered meaningfully, it won’t matter if they are broken up or even if firewalls are erected inside them. They will retain powerful sway over data marketplaces and exert anti-competitive pressure on smaller companies without the same access to data.
The EU’s actions, along with the earlier efforts to give individuals more control over their data, recognize that new world better than US actions based on antitrust regulations designed for industrial monopolies of an earlier time. Here as in so much else, the US could meaningfully learn from approaches in other countries rather than falling back on its own history and frameworks.
It’s often said that data is the new oil; as a resource, that may be. But as for containing excesses, data and tech companies are more like nuclear energy: potent, immensely powerful, but requiring complicated and unique tools to harness them for good and contain them.
Credit: Wired
https://www.wired.com/story/what-eu-gets-right-us-wrong-antitrust/?
European regulators focus on how Amazon, Apple, Facebook, and Google use—and abuse–their vast stores of data to maintain advantages over rivals.THERE’S A GROWING bipartisan consensus in the US to rein in the massive power accumulated by dominant tech firms. From state capitals to Congress, officials have launched multiple investigations of whether the big four of Amazon, Apple, Facebook, and Google are now forces more for harm than good and whether their size and scale demand government action to curtail them or potentially break them up.
US regulators have not yet shown all their cards, but they should pause before arguing that too big equals anticompetitive, or seeking to break up or substantially restructure the tech giants. Instead, they might want to look to Europe.
The US and EU have long differed in their approaches to Big Tech. US regulators and legislators have focused more on the size of these companies, while the EU has focused on issues related to control of data. Most recently, the EU sued Amazon for taking undue advantage of its customer and vendor data to gain a competitive edge over the thousands of independent businesses who sell through the platform. Earlier, the EU chipped away at Apple’s questionable tax practices and Google’s management of its ad platform. It has also attempted to give individuals more control over their data through rules such as the General Data Protection Regulation, which allows individuals to opt out of cookies and data-tracking on websites they visit.
In the US, by contrast, powerful voices, from Senator Elizabeth Warren to advocates such as the Open Markets Institute, call for antitrust enforcement to break up these companies. Tuesday, Senator Richard Blumenthal (D–Connecticut) urged “a break-up of tech giants. Because they've misused their bigness and power.” In the executive branch, Justice Department antitrust chief Makan Delrahim, also has spoken of dismantling the big companies.
As appealing as the big stick of antitrust enforcement is to a US government with memories of breaking up Standard Oil and AT&T in the 20th century, it may be the Europeans who are getting to the real issue: the companies’ use, and abuse, of data to erect empires. As European Commission executive vice president Margrethe Vestager wrote in announcing the action against Amazon, “We do not take issue with the success of Amazon or its size. Our concern is a very specific business conduct”—Amazon’s use of its data to privilege its own products over those of other sellers.
By emphasizing that data, rather than market size, gives Amazon an unfair advantage, the EU authorities are addressing the core challenge of Big Tech: It’s not their market value or their aggressive acquisitions that undermine competition, it’s the access to mountains of data. Reducing their scale through forced divestitures or curtailing their ability to acquire will satisfy bloodlust and may marginally restore competition, but unless the data market is restructured, it may all be for naught.
In the US, the Justice Department’s recent antitrust suit against Google addresses Google’s privileged use of data it collects to gain a competitive advantage. But the language of the suit, explicitly donning the mantle of the 1890 Sherman Act, echoes the outdated mantras of size and market concentration in a way that suggests a still-encumbered grasp of the real issue.
Over time, US law has come to view antitrust through a single lens: harm to the consumer. That’s a problem for critics of Big Tech, because the companies give away many of their products for free and can argue that in other cases they lower prices. The US antitrust framework simply isn’t well-suited to the unique structure and scope of these 21st-century behemoths.
In the words of Lina Khan, an attorney who served on the staff of the House antitrust subcommittee that issued a highly critical report of the tech giants in October, “the current framework in antitrust—specifically its pegging competition to consumer welfare, defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy.” The report says tech’s Big Four have gone from being “scrappy, underdog startups” to the “kinds of monopolies we last saw in the era of oil barons and railroad tycoons” and that have acquired too much power that they have then exploited. Khan favors changing the law to look more broadly at the ill effects of monopolies.
The blunt approach favored by some antitrust advocates in the US contrasts with the surgical tactics of the EU. Breakups are rhetorically appealing; they cut through the media noise and say, “We are doing something!” For that reason, they’re likely to gather continued bipartisan steam. Moreover, the EU’s focus on who owns what data and how it can be used has done little to slow Big Tech’s ascent.
But if the issue isn’t size per se but rather privileged access to and use of data, the EU approach is more tailored to these companies, rather than the 20th-century antecedents they resemble. They are not simply digital variants of Standard Oil or AT&T. They are new entities with distinct business models built on data. Unless their use of data is altered meaningfully, it won’t matter if they are broken up or even if firewalls are erected inside them. They will retain powerful sway over data marketplaces and exert anti-competitive pressure on smaller companies without the same access to data.
The EU’s actions, along with the earlier efforts to give individuals more control over their data, recognize that new world better than US actions based on antitrust regulations designed for industrial monopolies of an earlier time. Here as in so much else, the US could meaningfully learn from approaches in other countries rather than falling back on its own history and frameworks.
It’s often said that data is the new oil; as a resource, that may be. But as for containing excesses, data and tech companies are more like nuclear energy: potent, immensely powerful, but requiring complicated and unique tools to harness them for good and contain them.
Credit: Wired
https://www.wired.com/story/what-eu-gets-right-us-wrong-antitrust/?
Irving Azoff has offered a decidedly blunt take on the music payments (or the relative lack thereof) made by social networks including Facebook, Snapchat, and TikTok, indicating that they “resist paying for music until you go beat the f—k out of them.”
The 72-year-old management mainstay, who hasn’t hesitated to voice his opinion of big-name content platforms in the past, disclosed his firmly worded stance on social networks in a recent interview with the Los Angeles Times. This piece was published late last week, just before the Full Stop Management exec and chairman was inducted into the Rock and Roll Hall of Fame as a non-performer, receiving the Ahmet Ertegun Award. Irving Azoff nonchalantly noted in the article that Travis Scott is “unmanageable” and opined: “I don’t think there’s that many smart people in our business.”
And after emphasizing that he continues to manage musicians as part of a larger effort to pursue artist-rights causes – not solely due to the far-reaching financial benefits delivered by his star-studded client roster – the Music Artists Coalition co-founder turned his attention to social platforms’ unwillingness to “pay fair market value” for music.
“These people, when they start out – whether it’s Facebook, Snapchat, TikTok, whatever – they resist paying for music until you go beat the f—k out of them,” stated the longtime Eagles manager. “And then of course, none of them pay fair market value and they get away with it. Your company’s worth $30 billion and you can’t spend 20 grand for a song that becomes a phenomenon on your channel? Even when they pay, artists don’t get enough.
“Music, as a commodity, is more important than it’s ever been, and more unfairly monetized for the creators. And that’s what creates an opportunity for people like me,” finished the former Live Nation executive chairman and Ticketmaster CEO.
https://www.digitalmusicnews.com/2020/11/09/irving-azoff-social-platform-comments/
The 72-year-old management mainstay, who hasn’t hesitated to voice his opinion of big-name content platforms in the past, disclosed his firmly worded stance on social networks in a recent interview with the Los Angeles Times. This piece was published late last week, just before the Full Stop Management exec and chairman was inducted into the Rock and Roll Hall of Fame as a non-performer, receiving the Ahmet Ertegun Award. Irving Azoff nonchalantly noted in the article that Travis Scott is “unmanageable” and opined: “I don’t think there’s that many smart people in our business.”
And after emphasizing that he continues to manage musicians as part of a larger effort to pursue artist-rights causes – not solely due to the far-reaching financial benefits delivered by his star-studded client roster – the Music Artists Coalition co-founder turned his attention to social platforms’ unwillingness to “pay fair market value” for music.
“These people, when they start out – whether it’s Facebook, Snapchat, TikTok, whatever – they resist paying for music until you go beat the f—k out of them,” stated the longtime Eagles manager. “And then of course, none of them pay fair market value and they get away with it. Your company’s worth $30 billion and you can’t spend 20 grand for a song that becomes a phenomenon on your channel? Even when they pay, artists don’t get enough.
“Music, as a commodity, is more important than it’s ever been, and more unfairly monetized for the creators. And that’s what creates an opportunity for people like me,” finished the former Live Nation executive chairman and Ticketmaster CEO.
https://www.digitalmusicnews.com/2020/11/09/irving-azoff-social-platform-comments/
DC Court restrains Trump administration actions and protects First Amendment Free Speech Rights of Voice of America Journalists
Recently U.S. District Court Judge Beryl Howell entered a preliminary injunction order protecting free speech rights of VOA journalists. She ordered a Trump Administration appointee, U.S. Agency for Global Media CEO Michael Pack, to stop interfering in the news service's news coverage and editorial personnel matters. She limited Pack's authority to force the news agency to cover President Trump more favorably. She said that the acts of Pack and his aides likely "violated and continue to violate First Amendment rights because, among other unconstitutional effects, they result in self-censorship and the chilling of First Amendment expression. . . .,"
The opinion is here:
https://www.gibsondunn.com/wp-content/uploads/2020/11/PI-Decision-11-20-2020.pdf
Recently U.S. District Court Judge Beryl Howell entered a preliminary injunction order protecting free speech rights of VOA journalists. She ordered a Trump Administration appointee, U.S. Agency for Global Media CEO Michael Pack, to stop interfering in the news service's news coverage and editorial personnel matters. She limited Pack's authority to force the news agency to cover President Trump more favorably. She said that the acts of Pack and his aides likely "violated and continue to violate First Amendment rights because, among other unconstitutional effects, they result in self-censorship and the chilling of First Amendment expression. . . .,"
The opinion is here:
https://www.gibsondunn.com/wp-content/uploads/2020/11/PI-Decision-11-20-2020.pdf
New York adopts strong anti-SLAPP statute
Posted: 17 Nov 2020 09:16 AM PST
by Paul Alan Levy
With a signature last week from Governor Cuomo, New York has become the latest state to enact a strong anti-SLAPP law. Addressing flaws that came to the fore in our recent defense of Richard Robbins, the new statute considerably broadens the scope of speech covered by anti-SLAPP protections, and, requires a stay of discovery upon the filing of an anti-SLAPP motion, provides for the consideration of affidavits as well as pleadings in assessing whether there is “a substantial basis in law” for actions directed at protected speech, and requires, rather than simply permitting, awards of attorney fees when an anti-SLAPP motion is granted.
Unlike the anti-SLAPP laws in most states with such broad coverage, the New York statute does not contain exceptions for lawsuits aimed at commercial speech, suits filed in the public interest, or suits filed on behalf of state or local governments. It remains to be seen whether such amendments prove to be needed to prevent the application to the statute to cases far removed some the sort of oppressive lawsuits at which the sponsors were aiming, as enactment of such exceptions proved necessary in California after its pioneering anti-SLAPP law was enacted without those safeguards.
Posted: 17 Nov 2020 09:16 AM PST
by Paul Alan Levy
With a signature last week from Governor Cuomo, New York has become the latest state to enact a strong anti-SLAPP law. Addressing flaws that came to the fore in our recent defense of Richard Robbins, the new statute considerably broadens the scope of speech covered by anti-SLAPP protections, and, requires a stay of discovery upon the filing of an anti-SLAPP motion, provides for the consideration of affidavits as well as pleadings in assessing whether there is “a substantial basis in law” for actions directed at protected speech, and requires, rather than simply permitting, awards of attorney fees when an anti-SLAPP motion is granted.
Unlike the anti-SLAPP laws in most states with such broad coverage, the New York statute does not contain exceptions for lawsuits aimed at commercial speech, suits filed in the public interest, or suits filed on behalf of state or local governments. It remains to be seen whether such amendments prove to be needed to prevent the application to the statute to cases far removed some the sort of oppressive lawsuits at which the sponsors were aiming, as enactment of such exceptions proved necessary in California after its pioneering anti-SLAPP law was enacted without those safeguards.
Apple will pay $113 million to settle states’ investigation into battery throttling.
Nov. 18, 2020, 6:49 p.m. ETNov. 18, 2020
Nov. 18, 2020By Jack Nicas
Apple agreed on Wednesday to pay $113 million to settle an investigation by more than 30 states into its past practice of secretly slowing down older iPhones to preserve their battery life.
Apple’s practice of throttling phones was a black eye for the company when it was revealed in 2017, seeming to confirm some customers’ suspicions that their devices got slower when Apple released new phones. Apple said at the time that its software had slowed down phones with older batteries to prevent them from shutting off unexpectedly. Apple offered some customers free battery replacements in response to the controversy.
As part of its settlement with the states, Apple must be more transparent about how it manages battery life on its devices. Apple previously agreed to pay up to $500 million to affected customers to settle a separate class-action suit.
An Apple spokeswoman declined to comment but pointed to language in the settlement that said the agreement did not mean Apple has admitted any wrongdoing
https://www.nytimes.com/2020/11/18/business/apple-will-pay-113-million-to-settle-states-investigation-into-battery-throttling.html
Nov. 18, 2020, 6:49 p.m. ETNov. 18, 2020
Nov. 18, 2020By Jack Nicas
Apple agreed on Wednesday to pay $113 million to settle an investigation by more than 30 states into its past practice of secretly slowing down older iPhones to preserve their battery life.
Apple’s practice of throttling phones was a black eye for the company when it was revealed in 2017, seeming to confirm some customers’ suspicions that their devices got slower when Apple released new phones. Apple said at the time that its software had slowed down phones with older batteries to prevent them from shutting off unexpectedly. Apple offered some customers free battery replacements in response to the controversy.
As part of its settlement with the states, Apple must be more transparent about how it manages battery life on its devices. Apple previously agreed to pay up to $500 million to affected customers to settle a separate class-action suit.
An Apple spokeswoman declined to comment but pointed to language in the settlement that said the agreement did not mean Apple has admitted any wrongdoing
https://www.nytimes.com/2020/11/18/business/apple-will-pay-113-million-to-settle-states-investigation-into-battery-throttling.html
WSJ: Apple Inc. AAPL -1.10% is halving the commission it charges smaller developers that sell software through its App Store,
a partial concession in its battle with critics over how it wields power in its digital ecosystem.
The iPhone maker said that starting next year it will collect 15% rather than 30% of App Store sales from companies that generate no more than $1 million in revenue through the software platform, including in-app purchases. The fee will remain 30% for developers whose sales through the App Store, excluding commission payments, exceed $1 million—meaning the reduction won’t affect such vocal Apple opponents as videogame company Epic Games Inc.
Apple’s 30% take has been at the heart of complaints this year from other tech companies and some users over how it manages the vast digital world of people who use iPhones, iPads and other Apple devices. The policy is also central to a major legal battle with Epic, and to government examinations in the U.S. and Europe of Apple’s competitive behavior as a gatekeeper between software makers and the hundreds of millions of people who use Apple’s gadgets.
From: https://www.wsj.com/articles/apple-under-antitrust-scrutiny-halves-app-store-fee-for-smaller-developers-11605697203?mod=tech_lead_pos4
DAR Comment: Epic's litigation against Apple has been criticized for legal weaknesses, but it may be a cog in Epic's seemingly successful machine to pressure Apple for better rates.
a partial concession in its battle with critics over how it wields power in its digital ecosystem.
The iPhone maker said that starting next year it will collect 15% rather than 30% of App Store sales from companies that generate no more than $1 million in revenue through the software platform, including in-app purchases. The fee will remain 30% for developers whose sales through the App Store, excluding commission payments, exceed $1 million—meaning the reduction won’t affect such vocal Apple opponents as videogame company Epic Games Inc.
Apple’s 30% take has been at the heart of complaints this year from other tech companies and some users over how it manages the vast digital world of people who use iPhones, iPads and other Apple devices. The policy is also central to a major legal battle with Epic, and to government examinations in the U.S. and Europe of Apple’s competitive behavior as a gatekeeper between software makers and the hundreds of millions of people who use Apple’s gadgets.
From: https://www.wsj.com/articles/apple-under-antitrust-scrutiny-halves-app-store-fee-for-smaller-developers-11605697203?mod=tech_lead_pos4
DAR Comment: Epic's litigation against Apple has been criticized for legal weaknesses, but it may be a cog in Epic's seemingly successful machine to pressure Apple for better rates.
Airbnb Claims Google Pushes Competing Travel Listings Down
-
November 17, 2020
Airbnb, in its S-1 filing, wrote that it believes its search results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, reported CNBC. [https://www.cnbc.com/2020/11/16/airbnb-s1-google-travel-sites-hurt-airbnb-in-search-results.html]
Airbnb says Google’s search business has prevented the home-sharing company from reaping internet traffic, according to documents the company filed as it prepares to sell shares to the public.
Airbnb allows users to book short-term rentals and experiences while traveling. Under the “Risk Factors” in Airbnb’s S-1 filing, the company said Google has favored its own products over the company’s, resulting in fewer online visitors to its website. In the last year, the Alphabet company has added more search features akin to travel websites, including for vacation rentals.
“We believe that our SEO results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, which reduce the prominence of our platform in organic search results for travel-related terms and placement on Google,” the prospectus states.
DAR Comment: At recent Congressional hearings, many stories like Airbnb's were looked at, and had a prominent role in the Report issued by the Democratic majority.
-
November 17, 2020
Airbnb, in its S-1 filing, wrote that it believes its search results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, reported CNBC. [https://www.cnbc.com/2020/11/16/airbnb-s1-google-travel-sites-hurt-airbnb-in-search-results.html]
Airbnb says Google’s search business has prevented the home-sharing company from reaping internet traffic, according to documents the company filed as it prepares to sell shares to the public.
Airbnb allows users to book short-term rentals and experiences while traveling. Under the “Risk Factors” in Airbnb’s S-1 filing, the company said Google has favored its own products over the company’s, resulting in fewer online visitors to its website. In the last year, the Alphabet company has added more search features akin to travel websites, including for vacation rentals.
“We believe that our SEO results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, which reduce the prominence of our platform in organic search results for travel-related terms and placement on Google,” the prospectus states.
DAR Comment: At recent Congressional hearings, many stories like Airbnb's were looked at, and had a prominent role in the Report issued by the Democratic majority.
How Biosimilar Disparagement Violates Antitrust Law
by Michael Carrier
Nov. 16, 2020,
Biosimilar adoption has lagged in the U.S. due, in part, to their high cost and disparagement by manufacturers of biologics. Rutgers Law professor Michael A. Carrier says biologic manufacturers are violating antitrust law because they have a monopoly and engage in exclusionary conduct by issuing disparaging statements with foreboding safety warnings.
Biologics, the next wave of pharmaceutical products, offer pathbreaking advances in treating cancer, arthritis, chronic diseases, and other conditions. Their promise, however, is matched by their high price. More complex than brand-name small-molecule drugs, biologics could cost patients hundreds of thousands of dollars a year.
The hope, then, is that just as with generic drugs, competition from follow-on products known as biosimilars will lower prices. In fact, a recent report from the Association for Affordable Medicines found that biosimilars could “save America tens of billions of dollars over the next decade.” But it warned that these savings would materialize “only if patients can access” the biosimilars. One main reason they might not is disparagement.
Biologic companies have raised ominous warnings that biosimilars are not the same, with differences posing grave safety consequences. This can violate antitrust law.
Biosimilars are nearly the same as biologics. In fact, they are required to be “highly similar” to and have “no clinically meaningful differences” from biologics. To show that it is highly similar, a biosimilar manufacturer “extensively analyz[es]…the structure and function of both the reference product and the proposed biosimilar,” using “[s]tate-of-the-art technology…to compare characteristics…such as purity, chemical identity, and bioactivity.”
The manufacturer also conducts studies to show that there are no clinically meaningful differences in “safety, purity, and potency.”
Biologic Companies Are Violating Antitrust Law
How is antitrust law being violated? First, biologic manufacturers are likely to have monopoly power. There has been limited entry of biosimilars in the U.S. Biologics make up eight of the top 10 highest-selling drugs in the country. And manufacturers charge astronomical prices, as much as hundreds of thousands of dollars a year.
Second, biologic manufacturers’ statements and omissions could constitute exclusionary conduct. There are several types of deception: Manufacturers make foreboding safety threats. They warn that biosimilars act differently from, or are not identical to, reference products. And they fret that biosimilars do not satisfy interchangeability standards.
Each of these types of statements, even though they may be nuanced, deceives. A product that is “highly similar” to and has “no clinically meaningful differences” from the reference product cannot act differently in the body. Similarly, claiming that the biosimilar is not identical is irrelevant; in fact, it is “normal and expected within the manufacturing process” for even batches of biologic products themselves to reveal “[s]light differences.”
Nor does a biosimilar’s failure to attain interchangeability mean that it is less safe. This status only makes sense for biosimilars that would be dispensed at the pharmacy counter, where substitution takes place. But each of the biosimilars that has entered the U.S. market so far has been dispensed not in this setting, but through injection or infusion in the hospital.
Deceptive StatementsThe Federal Trade Commission has explained that companies can engage in deception not just by issuing false statements but also by making misleading statements and omitting information. Similarly, in February, the FDA explained in draft guidance that “representations or suggestions that create an impression that a biosimilar is not highly similar to its reference product are likely to be false or misleading.”
In evaluating antitrust liability for deception, some courts analyze an array of factors to ensure that the conduct affects competition. A plaintiff challenging biosimilar disparagement would be likely to satisfy these factors. Because the statements warn of health concerns, they would be material. As representations about safety, they would be likely to induce reasonable reliance. And a biosimilar manufacturer would not be likely to readily neutralize the disparaging statements.
Other courts apply a more holistic approach. Such a flexible framework makes it even more likely that an antitrust claim would be successful. It would recognize the irreversible effects of locking new patients into biologics because they do not trust biosimilars. And it would consider disparagement’s effects in fortifying entry barriers cementing biologics’ power.
In short, biologic manufacturers are likely to have monopoly power and engage in exclusionary conduct, thereby violating antitrust law.
In warning consumers about safety harms, biologic manufacturers make statements that sound reasonable on their face. But they seek to sow fear, not informing patients that there are no clinically meaningful differences between biologics and biosimilars.
Antitrust liability would prevent biologic manufacturers from stifling more affordable biosimilars in their cradle by ominously implying false safety concerns. In the process, antitrust promises to help U.S. consumers afford lifesaving medicines.
https://news.bloomberglaw.com/health-law-and-business/how-biosimilar-disparagement-violates-antitrust-lawThis column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Author Information
Michael A. Carrier is Distinguished Professor of Law at Rutgers Law School
District officials will now send out another $100 million in grants to businesses hit hardest by the coronavirus pandemic
This is the city’s largest effort to prop up struggling retailers and restaurants since an initial round of cash assistance this spring.
Mayor Muriel Bowser announced this new “Bridge Fund” Wednesday, with plans to let businesses start applying for the grants on a rolling basis over the course of the next few weeks. The money will largely be targeted to the hospitality sector, considering that the pandemic has pummeled those industries particularly acutely, closely mirroring (but still distinct from) a program the D.C. Council created this summer.
The grants will be split among four categories: restaurants, hotels, retail and entertainment. Restaurants will be eligible to earn the largest portion of the funds, with $35 million set aside for the industry, while hotels are close behind with $30 million up for grabs. Entertainment venues and related businesses will be eligible for $20 million, while retailers can earn a total of $15 million.
https://www.bizjournals.com/washington/news/2020/11/18/dc-business-relief-grants-new-coronavirus.html?
This is the city’s largest effort to prop up struggling retailers and restaurants since an initial round of cash assistance this spring.
Mayor Muriel Bowser announced this new “Bridge Fund” Wednesday, with plans to let businesses start applying for the grants on a rolling basis over the course of the next few weeks. The money will largely be targeted to the hospitality sector, considering that the pandemic has pummeled those industries particularly acutely, closely mirroring (but still distinct from) a program the D.C. Council created this summer.
The grants will be split among four categories: restaurants, hotels, retail and entertainment. Restaurants will be eligible to earn the largest portion of the funds, with $35 million set aside for the industry, while hotels are close behind with $30 million up for grabs. Entertainment venues and related businesses will be eligible for $20 million, while retailers can earn a total of $15 million.
https://www.bizjournals.com/washington/news/2020/11/18/dc-business-relief-grants-new-coronavirus.html?
The view from Moscow -- Sputnik News
US Health Dept. Says Will Not Work With Biden Until Official Announcement of His Victory
MOSCOW (Sputnik) – The US Department of Health and Human Services will not work with projected President-elect Joe Biden until the General Services Administration (GSA) confirms his victory in the presidential election, Secretary Alex Azar said.
“We've made it very clear that when GSA makes a determination, we will ensure complete, cooperative professional transitions and planning,” Azar said at a press briefing on Wednesday, as quoted by the CNN broadcaster.
He stressed that the department was just following the existing guidance.
“We're about getting vaccines and therapeutics invented and get the clinical trial data and saving lives here. That's where our focus is as we go forward with our efforts,” Azar added.
GSA head Emily Murphy has reportedly yet to sign the required paperwork formalizing the start of the transition period. Until this move, Biden's team has no access to the government finances as well as cannot cooperate with federal bodies.
Incumbent President Donald Trump has not yet conceded defeat in the election despite prominent US media outlets, such as the Fox News broadcaster, declaring Biden's victory. Trump has made multiple claims of electoral fraud since polls closed.
US Health Dept. Says Will Not Work With Biden Until Official Announcement of His Victory
MOSCOW (Sputnik) – The US Department of Health and Human Services will not work with projected President-elect Joe Biden until the General Services Administration (GSA) confirms his victory in the presidential election, Secretary Alex Azar said.
“We've made it very clear that when GSA makes a determination, we will ensure complete, cooperative professional transitions and planning,” Azar said at a press briefing on Wednesday, as quoted by the CNN broadcaster.
He stressed that the department was just following the existing guidance.
“We're about getting vaccines and therapeutics invented and get the clinical trial data and saving lives here. That's where our focus is as we go forward with our efforts,” Azar added.
GSA head Emily Murphy has reportedly yet to sign the required paperwork formalizing the start of the transition period. Until this move, Biden's team has no access to the government finances as well as cannot cooperate with federal bodies.
Incumbent President Donald Trump has not yet conceded defeat in the election despite prominent US media outlets, such as the Fox News broadcaster, declaring Biden's victory. Trump has made multiple claims of electoral fraud since polls closed.
Businesses Trying to Rebound After Unrest Face a Challenge: Not Enough Insurance - The New York Times
A below-the-fold article in the NYT focuses on small businesses owned by largely uninsured minority people that were destroyed by vandals while racial justice protest riots were going on in Kenosha.
The author, Nellie Bowles, observes that some activists have downplayed the damage to businesses from looting and arson occurring while racial justice protests were going on around the country. But some affected small entrepreneurs, such as those interviewed by Bowles, have little or no insurance, and are struggling.
https://www.nytimes.com/2020/11/09/business/small-business-insurance-unrest-kenosha.html?searchResultPosition=1
A below-the-fold article in the NYT focuses on small businesses owned by largely uninsured minority people that were destroyed by vandals while racial justice protest riots were going on in Kenosha.
The author, Nellie Bowles, observes that some activists have downplayed the damage to businesses from looting and arson occurring while racial justice protests were going on around the country. But some affected small entrepreneurs, such as those interviewed by Bowles, have little or no insurance, and are struggling.
https://www.nytimes.com/2020/11/09/business/small-business-insurance-unrest-kenosha.html?searchResultPosition=1
In this action, the Trump Campaign and the Individual Plaintiffs (collectively, the “Plaintiffs”) seek to discard millions of votes legally cast by Pennsylvanians . . . .
Excerpt from opinion at
www.courtlistener.com/recap/gov.uscourts.pamd.127057/gov.uscourts.pamd.127057.202.0_1.pdf
In this action, the Trump Campaign and the Individual Plaintiffs (collectively, the “Plaintiffs”) seek to discard millions of votes legally cast by Pennsylvanians from all corners – from Greene County to Pike County, and everywhere in between. In other words, Plaintiffs ask this Court to disenfranchise almost seven million voters.
This Court has been unable to find any case in which a plaintiff has sought such a drastic remedy in the contest of an election, in terms of the sheer volume of votes asked to be invalidated. One might expect that when seeking such a startling outcome, a plaintiff would come formidably armed with compelling legal arguments and factual proof of rampant corruption, such that this Court would have no option but to regrettably grant the proposed injunctive relief despite the impact it would have on such a large group of citizens.
That has not happened. Instead, this Court has been presented with strained legal arguments without merit and speculative accusations, unpled in the operative complaint and unsupported by evidence. In the United States of America, this cannot justify the disenfranchisement of a single voter, let alone all the voters of its sixth most populated state. Our people, laws, and institutions demand more. At bottom, Plaintiffs have failed to meet their burden to state a claim upon which relief may be granted.
Therefore, I grant Defendants’ motions and dismiss Plaintiffs’ action with prejudice.
Excerpt from opinion at
www.courtlistener.com/recap/gov.uscourts.pamd.127057/gov.uscourts.pamd.127057.202.0_1.pdf
In this action, the Trump Campaign and the Individual Plaintiffs (collectively, the “Plaintiffs”) seek to discard millions of votes legally cast by Pennsylvanians from all corners – from Greene County to Pike County, and everywhere in between. In other words, Plaintiffs ask this Court to disenfranchise almost seven million voters.
This Court has been unable to find any case in which a plaintiff has sought such a drastic remedy in the contest of an election, in terms of the sheer volume of votes asked to be invalidated. One might expect that when seeking such a startling outcome, a plaintiff would come formidably armed with compelling legal arguments and factual proof of rampant corruption, such that this Court would have no option but to regrettably grant the proposed injunctive relief despite the impact it would have on such a large group of citizens.
That has not happened. Instead, this Court has been presented with strained legal arguments without merit and speculative accusations, unpled in the operative complaint and unsupported by evidence. In the United States of America, this cannot justify the disenfranchisement of a single voter, let alone all the voters of its sixth most populated state. Our people, laws, and institutions demand more. At bottom, Plaintiffs have failed to meet their burden to state a claim upon which relief may be granted.
Therefore, I grant Defendants’ motions and dismiss Plaintiffs’ action with prejudice.
Landlord-Tenant Court Diversion programs in various jurisdictions
by Don Allen Resnikoff
Diversion programs typically provide landlords and tenants with an alternative to court actions against tenants by providing emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
by Don Allen Resnikoff
Diversion programs typically provide landlords and tenants with an alternative to court actions against tenants by providing emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
https://www.msn.com/en-us/news/politics/punxsutawney-phil-will-do-groundhog-day-virtually-next-year/vi-BB1bcwXl
FROM WTOP: Major DC gas wholesaler/retailer accused of overcharging customers
A local gas retailer is accused of price gouging, according to a lawsuit filed in D.C.
The Office of the Attorney General for the District of Columbia said that Capitol Petroleum Group and its affiliate companies gouged prices during the District’s COVID-19 emergency.
“Even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District,” a news release said. [https://oag.dc.gov/release/ag-racine-sues-major-gasoline-seller-price-gouging]
D.C. Attorney General Karl Racine said the company “took advantage” of consumers instead of “passing the cost savings along to District consumers as required by law.”
The allegations state that before March 2020, Capitol Petroleum Group earned an average of $0.44 in profits per gallon of regular gas and $0.80 per gallon of premium. However, following the emergency declaration on March 11, the company earned an average profit of $0.88 per gallon of regular gas and $1.23 per gallon of premium gas that it sold.
The original emergency declaration that has been extended prohibited price gouging during the coronavirus public health emergency.
The D.C. Attorney General’s Office also accused the company of applying a markup of 149.85% to prices it charged other retailers per gallon of gas during the week of March 22-28, whereas from December 2019 to March 9, 2020, its average markup per gallon was 41.6%.
The District is seeking a court order to stop the company from violating D.C.’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices and civil penalties.
Capitol Petroleum Group affiliates named in the lawsuit include Anacostia Realty LLC and DAG Petroleum Suppliers LLC. Capitol Petroleum group is based in Virginia.
This is the second lawsuit Racine’s office has filed against a D.C. business for price gouging during the pandemic. The first was against Helen Mart, a store in Ward 7.
“Price gouging is illegal in the District, and companies may not unlawfully increase their profit margins at the expense of District residents during an emergency,” Racine said.
The penalty for price gouging in D.C. is $5,000 per violation.
- Abigail Constantino
A local gas retailer is accused of price gouging, according to a lawsuit filed in D.C.
The Office of the Attorney General for the District of Columbia said that Capitol Petroleum Group and its affiliate companies gouged prices during the District’s COVID-19 emergency.
“Even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District,” a news release said. [https://oag.dc.gov/release/ag-racine-sues-major-gasoline-seller-price-gouging]
D.C. Attorney General Karl Racine said the company “took advantage” of consumers instead of “passing the cost savings along to District consumers as required by law.”
The allegations state that before March 2020, Capitol Petroleum Group earned an average of $0.44 in profits per gallon of regular gas and $0.80 per gallon of premium. However, following the emergency declaration on March 11, the company earned an average profit of $0.88 per gallon of regular gas and $1.23 per gallon of premium gas that it sold.
The original emergency declaration that has been extended prohibited price gouging during the coronavirus public health emergency.
The D.C. Attorney General’s Office also accused the company of applying a markup of 149.85% to prices it charged other retailers per gallon of gas during the week of March 22-28, whereas from December 2019 to March 9, 2020, its average markup per gallon was 41.6%.
The District is seeking a court order to stop the company from violating D.C.’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices and civil penalties.
Capitol Petroleum Group affiliates named in the lawsuit include Anacostia Realty LLC and DAG Petroleum Suppliers LLC. Capitol Petroleum group is based in Virginia.
This is the second lawsuit Racine’s office has filed against a D.C. business for price gouging during the pandemic. The first was against Helen Mart, a store in Ward 7.
“Price gouging is illegal in the District, and companies may not unlawfully increase their profit margins at the expense of District residents during an emergency,” Racine said.
The penalty for price gouging in D.C. is $5,000 per violation.
Google Breakup Should ‘Be on the Table' Says Sen. Klobuchar, Who Is a Possible Biden Pick for Attorney General
By Lauren Feiner, CNBC • Published November 12, 2020 • Updated on November 12, 2020 at 7:42 pm
Sen. Amy Klobuchar
During a virtual keynote speech for the American Bar Association's Fall Forum, Klobuchar praised the Justice Department for leaving open the option of so-called structural remedies in its recent antitrust lawsuit against Google.
By Lauren Feiner, CNBC • Published November 12, 2020 • Updated on November 12, 2020 at 7:42 pm
Sen. Amy Klobuchar
- During a virtual keynote speech for the American Bar Association's Fall Forum, Sen. Amy Klobuchar, D-Minn., praised the Justice Department for leaving open the option of so-called structural remedies in its recent antitrust lawsuit against Google.
- Klobuchar's name has been floated as a possible attorney general under President-elect Joe Biden, CNBC reported on Tuesday.
- Even if she remains in the Senate, Klobuchar will be a force for tech companies to reckon with, especially if Democrats win the majority in the chamber.
During a virtual keynote speech for the American Bar Association's Fall Forum, Klobuchar praised the Justice Department for leaving open the option of so-called structural remedies in its recent antitrust lawsuit against Google.
European Commission - Press release on Amazon Actions
DAR Comment: At a moment where there is political pressure for reform of antitrust in the U.S., the EU model of "abuse of dominant position" suggests one path for reform. For that reason, it is worth noticing real-world operation of that EU model, and evaluating whether it is an improvement over current U.S. practice.
Antitrust: Commission sends Statement of Objections to Amazon for the use of non-public independent seller data and opens second investigation into its e-commerce business practices
Brussels, 10 November 2020
The European Commission has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets. The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third party sellers.
The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “We must ensure that dual role platforms with market power, such as Amazon, do not distort competition. Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
Statement of Objections on Amazon's use of marketplace seller data
Amazon has a dual role as a platform: (i) it provides a marketplace where independent sellers can sell products directly to consumers; and (ii) it sells products as a retailer on the same marketplace, in competition with those sellers.
As a marketplace service provider, Amazon has access to non-public business data of third party sellers such as the number of ordered and shipped units of products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, data relating to shipping, to sellers' past performance, and other consumer claims on products, including the activated guarantees.
The Commission's preliminary findings show that very large quantities of non-public seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon's retail offers and strategic business decisions to the detriment of the other marketplace sellers. For example, it allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers.
The Commission's preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany- the biggest markets for Amazon in the EU. If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The sending of a Statement of Objections does not prejudge the outcome of an investigation.
Investigation into Amazon practices regarding its “Buy Box” and Prime label
In addition, the Commission opened a second antitrust investigation into Amazon's business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon's logistics and delivery services (the so-called “fulfilment by Amazon or FBA sellers”).
In particular, the Commission will investigate whether the criteria that Amazon sets to select the winner of the “Buy Box” and to enable sellers to offer products to Prime users, under Amazon's Prime loyalty programme, lead to preferential treatment of Amazon's retail business or of the sellers that use Amazon's logistics and delivery services.
The “Buy Box” is displayed prominently on Amazon's websites and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” (i.e. being chosen as the offer that features in this box) is crucial to marketplace sellers as the Buy Box prominently shows the offer of one single seller for a chosen product on Amazon's marketplaces, and generates the vast majority of all sales. The other aspect of the investigation focusses on the possibility for marketplace sellers to effectively reach Prime users. Reaching these consumers is important to sellers because the number of Prime users is continuously growing and because they tend to generate more sales on Amazon's marketplaces than non-Prime users.
If proven, the practice under investigation may breach Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.
Background and procedure
Article 102 of the TFEU prohibits the abuse of a dominant position. The implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.
The Commission opened the in-depth investigation into Amazon's use of marketplace seller data on 17 July 2019.
A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Sending a Statement of Objections and opening of a formal antitrust investigation does not prejudge the outcome of the investigations.
More information on the investigation is available on the Commission's competition website, in the public case register under case number AT.40462.
The Commission has informed Amazon and the competition authorities of the Member States that it has opened a second in-depth investigation into Amazon's business practices.
This investigation will cover the European Economic Area, with the exception of Italy. The Italian Competition Authority started to investigate partially similar concerns last year, with a particular focus on the Italian market. The Commission will continue the close cooperation with the Italian Competition Authority throughout the investigation.
More information on the investigation will be available on the Commission's competition website, in the public case register under case number AT.40703.
There is no legal deadlines for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.
IP/20/2077
Press contacts:
Arianna PODESTA (+32 2 298 70 24)
Maria TSONI (+32 2 299 05 26)
General public inquiries: Europe Direct by ph
DAR Comment: At a moment where there is political pressure for reform of antitrust in the U.S., the EU model of "abuse of dominant position" suggests one path for reform. For that reason, it is worth noticing real-world operation of that EU model, and evaluating whether it is an improvement over current U.S. practice.
Antitrust: Commission sends Statement of Objections to Amazon for the use of non-public independent seller data and opens second investigation into its e-commerce business practices
Brussels, 10 November 2020
The European Commission has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets. The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third party sellers.
The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “We must ensure that dual role platforms with market power, such as Amazon, do not distort competition. Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
Statement of Objections on Amazon's use of marketplace seller data
Amazon has a dual role as a platform: (i) it provides a marketplace where independent sellers can sell products directly to consumers; and (ii) it sells products as a retailer on the same marketplace, in competition with those sellers.
As a marketplace service provider, Amazon has access to non-public business data of third party sellers such as the number of ordered and shipped units of products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, data relating to shipping, to sellers' past performance, and other consumer claims on products, including the activated guarantees.
The Commission's preliminary findings show that very large quantities of non-public seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon's retail offers and strategic business decisions to the detriment of the other marketplace sellers. For example, it allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers.
The Commission's preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany- the biggest markets for Amazon in the EU. If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The sending of a Statement of Objections does not prejudge the outcome of an investigation.
Investigation into Amazon practices regarding its “Buy Box” and Prime label
In addition, the Commission opened a second antitrust investigation into Amazon's business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon's logistics and delivery services (the so-called “fulfilment by Amazon or FBA sellers”).
In particular, the Commission will investigate whether the criteria that Amazon sets to select the winner of the “Buy Box” and to enable sellers to offer products to Prime users, under Amazon's Prime loyalty programme, lead to preferential treatment of Amazon's retail business or of the sellers that use Amazon's logistics and delivery services.
The “Buy Box” is displayed prominently on Amazon's websites and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” (i.e. being chosen as the offer that features in this box) is crucial to marketplace sellers as the Buy Box prominently shows the offer of one single seller for a chosen product on Amazon's marketplaces, and generates the vast majority of all sales. The other aspect of the investigation focusses on the possibility for marketplace sellers to effectively reach Prime users. Reaching these consumers is important to sellers because the number of Prime users is continuously growing and because they tend to generate more sales on Amazon's marketplaces than non-Prime users.
If proven, the practice under investigation may breach Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.
Background and procedure
Article 102 of the TFEU prohibits the abuse of a dominant position. The implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.
The Commission opened the in-depth investigation into Amazon's use of marketplace seller data on 17 July 2019.
A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Sending a Statement of Objections and opening of a formal antitrust investigation does not prejudge the outcome of the investigations.
More information on the investigation is available on the Commission's competition website, in the public case register under case number AT.40462.
The Commission has informed Amazon and the competition authorities of the Member States that it has opened a second in-depth investigation into Amazon's business practices.
This investigation will cover the European Economic Area, with the exception of Italy. The Italian Competition Authority started to investigate partially similar concerns last year, with a particular focus on the Italian market. The Commission will continue the close cooperation with the Italian Competition Authority throughout the investigation.
More information on the investigation will be available on the Commission's competition website, in the public case register under case number AT.40703.
There is no legal deadlines for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.
IP/20/2077
Press contacts:
Arianna PODESTA (+32 2 298 70 24)
Maria TSONI (+32 2 299 05 26)
General public inquiries: Europe Direct by ph
Europe’s top antitrust enforcer Margrethe Vestager has warned against pushing for the structural break up of tech companies
Vestager, who has aggressively pursued antitrust investigations against the likes of Google, Amazon and Apple in recent years, said it would be “doable” to force the breakup of the tech giants under current EU law. But she warned of unintended consequences and potentially lengthy court battles between European regulators and the tech giants.
“I don’t think it is something that should be introduced in this legislation and I think one should be very careful with that type of remedy because one should be very sure how it would actually work,” Vestager said. “It would tie you up in court for a very very long time. I think it’s important we try these routes first with the platforms.”
She is among the top European bureaucrats who are currently drafting the Digital Services Act, aimed at establishing new rules for the tech giants in Europe.
Vestager’s comments also put her at odds with other senior European officials, including Europe’s Internal Market Commissioner Thierry Breton, who have signalled a desire to force the separation of tech companies in some circumstances.
From https://www.theinformation.com/briefings/bc65c0
Vestager, who has aggressively pursued antitrust investigations against the likes of Google, Amazon and Apple in recent years, said it would be “doable” to force the breakup of the tech giants under current EU law. But she warned of unintended consequences and potentially lengthy court battles between European regulators and the tech giants.
“I don’t think it is something that should be introduced in this legislation and I think one should be very careful with that type of remedy because one should be very sure how it would actually work,” Vestager said. “It would tie you up in court for a very very long time. I think it’s important we try these routes first with the platforms.”
She is among the top European bureaucrats who are currently drafting the Digital Services Act, aimed at establishing new rules for the tech giants in Europe.
Vestager’s comments also put her at odds with other senior European officials, including Europe’s Internal Market Commissioner Thierry Breton, who have signalled a desire to force the separation of tech companies in some circumstances.
From https://www.theinformation.com/briefings/bc65c0
Chemerinsky: Free exercise of religion: Fulton v. City of Philadelphia
May people and businesses, based on their religious beliefs, discriminate against gays and lesbians? This was the central issue, but not decided, in 2018 in Masterpiece Cakeshop v. Colorado Civil Rights Commission, which involved whether a bakery could be held liable for refusing to design and bake a cake to celebrate a same-sex marriage. It is a question that the court identified but did not answer in June 2020, when it held in Bostock v. Clayton County, Georgia that Title VII of the 1964 Civil Rights Act prohibits employment discrimination based on sexual orientation or gender identity. The court left open the issue of whether an employer could discriminate based on religious beliefs.
The city of Philadelphia contracts with private social service agencies to place children in foster homes. The city insists that the agencies not discriminate, including on the basis of sexual orientation. Catholic Social Services challenges this and says that it could not certify a same-sex married couple as foster parents because its religion does not recognize same-sex marriage as marriage. It claims that the requirement of nondiscrimination violates its free exercise of religion and its freedom of speech.
One issue, upon which certiorari has been granted, is whether the court should “revisit” Employment Division Department of Human Resources of Oregon v. Smith. In that 1990 decision, the court, in an opinion by Justice Antonin Scalia, held that the free exercise clause of the First Amendment does not provide a basis for a religious exemption from a general law. Now, though, conservatives favor such exemptions, and there well may be five votes to overrule Employment Division. In 2019’s Kennedy v. Bremerton School District, Justice Samuel A. Alito wrote an opinion respecting the denial of certiorari, joined by Justices Clarence Thomas, Neil M. Gorsuch and Brett M. Kavanaugh, and suggested that they might be open to overruling Employment Division.
If Barrett has been confirmed by the time the case is heard on Nov. 4, there could be five votes to do so and to dramatically expand the protection of free exercise of religion, including as a basis for an exemption from anti-discrimination laws.
From: https://www.abajournal.com/columns/article/chemerinsky-the-supreme-court-returns-to-a-term-like-no-other
May people and businesses, based on their religious beliefs, discriminate against gays and lesbians? This was the central issue, but not decided, in 2018 in Masterpiece Cakeshop v. Colorado Civil Rights Commission, which involved whether a bakery could be held liable for refusing to design and bake a cake to celebrate a same-sex marriage. It is a question that the court identified but did not answer in June 2020, when it held in Bostock v. Clayton County, Georgia that Title VII of the 1964 Civil Rights Act prohibits employment discrimination based on sexual orientation or gender identity. The court left open the issue of whether an employer could discriminate based on religious beliefs.
The city of Philadelphia contracts with private social service agencies to place children in foster homes. The city insists that the agencies not discriminate, including on the basis of sexual orientation. Catholic Social Services challenges this and says that it could not certify a same-sex married couple as foster parents because its religion does not recognize same-sex marriage as marriage. It claims that the requirement of nondiscrimination violates its free exercise of religion and its freedom of speech.
One issue, upon which certiorari has been granted, is whether the court should “revisit” Employment Division Department of Human Resources of Oregon v. Smith. In that 1990 decision, the court, in an opinion by Justice Antonin Scalia, held that the free exercise clause of the First Amendment does not provide a basis for a religious exemption from a general law. Now, though, conservatives favor such exemptions, and there well may be five votes to overrule Employment Division. In 2019’s Kennedy v. Bremerton School District, Justice Samuel A. Alito wrote an opinion respecting the denial of certiorari, joined by Justices Clarence Thomas, Neil M. Gorsuch and Brett M. Kavanaugh, and suggested that they might be open to overruling Employment Division.
If Barrett has been confirmed by the time the case is heard on Nov. 4, there could be five votes to do so and to dramatically expand the protection of free exercise of religion, including as a basis for an exemption from anti-discrimination laws.
From: https://www.abajournal.com/columns/article/chemerinsky-the-supreme-court-returns-to-a-term-like-no-other
Justice Alito: Pandemic Has Brought 'Unimaginable Restrictions' On Freedoms
Supreme Court Justice Samuel Alito says the COVID-19 pandemic has brought "previously unimaginable restrictions on individual liberty," warning of an important shift in the views of essential rights on several fronts, from religious freedom to free speech.Alito's remarks came Thursday in a keynote speech at the Federalist Society's annual National Lawyers Convention, which is being held virtually this week. The event's theme is to examine how the coronavirus is affecting the rule of law.The COVID-19 crisis has "highlighted constitutional fault lines," Alito said.
He cautioned that his statements shouldn't be taken as a judgment on whether numerous coronavirus restrictions reflect good public policy."All that I'm saying is this, and I think it is an indisputable statement of fact," the justice said. "We have never before seen restrictions as severe, extensive and prolonged as those experienced for most of 2020."
"Think of all the live events that would otherwise be protected by the right to freedom of speech," from lectures and meetings to religious services, Alito said. He also noted that the pandemic has affected access to the courts and the constitutional right to a speedy trial.
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"The COVID crisis has served as a sort of constitutional stress test," Alito said. "And in doing so, it has highlighted disturbing trends that were already present before the virus struck."
Shifting attitudes
The Supreme Court justice then ran down a list of examples that, in his view, reflect shifting attitudes toward long-held rights in the United States.
First on the list was what Alito called "the dominance of lawmaking by executive fiat rather than legislation" – actions that he said range from agencies' broad use of regulatory power to the use of executive discretion to impose sweeping restrictions in the name of fighting a pandemic.
Alito later cited a legal case in Nevada, saying the governor's emergency orders in that state have given leeway and support to casinos hosting gamblers at up to 50% capacity while forcing houses of worship to cap their attendance at 50 people.
"Take a quick look at the Constitution," Alito said. "You will see the free exercise clause of the First Amendment, which protects religious liberty. You will not find a craps clause or a blackjack clause or a slot machine clause."
"It pains me to say this, but in certain quarters, religious liberty is fast becoming a disfavored right," Alito said. He ran through several religion-related Supreme Court rulings, including the Little Sisters of the Poor (over providing birth control to employees) to Masterpiece Cakeshop in Colorado (over the refusal to make a wedding cake for a gay couple).
Alito made a direct connection between America's ongoing "culture wars" and the pandemic crisis, citing a 2016 blog entry by Harvard Law School professor Mark Tushnet.
"He candidly wrote, quote, The culture wars are over; they lost, we won," Alito said.
He went on to quote from Tushnet's much-discussed stance that "[m]y own judgment is that taking a hard line ('You lost, live with it') is better than trying to accommodate the losers. ... And taking a hard line seemed to work reasonably well in Germany and Japan after 1945."
Alito went on to quote Bob Dylan: "Is our country going to follow that course? To quote a popular Nobel laureate, 'It's not dark yet, but it's getting there.' "
'Hostility to ... unfashionable views'
The justice described what he called a "growing hostility to the expression of unfashionable views." As an example, he cited the Supreme Court's landmark shift on same-sex marriage.
"You can't say that marriage is a union between one man and one woman," Alito said. "Until very recently, that's what the vast majority of Americans thought. Now it's considered bigotry."
Protecting freedom of speech will be one of the Supreme Court's greatest challenges, Alito said.
"Although that freedom is falling out of favor in some circles, we need to do whatever we can to prevent it from becoming a second-tier constitutional right."
Alito also called out a group of Democratic senators who weighed in on a gun-rights case in New York, saying they had attempted to bully the Supreme Court. The group filed an amicus brief calling the court "a sick institution" that might need to be restructured. Alito said he viewed it as "an affront to the Constitution and the rule of law."
The article: https://www.npr.org/2020/11/13/934666499/justice-alito-pandemic-has-brought-unimaginable-restrictions-on-freedoms
Alito speech URL: https://youtu.be/tYLZL4GZVbA
The Huffington Post's take on the speech:
https://www.youtube.com/watch?v=k0sqj1iTUB8
- November 13, 20203:56 PM ET Bill Chappell
- DAR Comment: I am struck by Alito's comments on "culture war," and what he refers to as "growing hostility to the expression of unfashionable views." There may be a connection between Alito's comments on "culture war" and Alito's decisions as a Supreme Court Justice. The implication of his comments may be that judges on one side of the culture war will decide differently from judges on the other side of the culture war on questions such as whether a commercial baker can refuse to make a wedding cake for a gay couple. I'd prefer to think that is not so, and that decisions are based on some combination of Constitutional scholarship and common sense.
"We have never before seen restrictions as severe, extensive and prolonged as those experienced for most of 2020," Alito said in a speech this week to the Federalist Society's National Lawyers Convention.
Supreme Court Justice Samuel Alito says the COVID-19 pandemic has brought "previously unimaginable restrictions on individual liberty," warning of an important shift in the views of essential rights on several fronts, from religious freedom to free speech.Alito's remarks came Thursday in a keynote speech at the Federalist Society's annual National Lawyers Convention, which is being held virtually this week. The event's theme is to examine how the coronavirus is affecting the rule of law.The COVID-19 crisis has "highlighted constitutional fault lines," Alito said.
He cautioned that his statements shouldn't be taken as a judgment on whether numerous coronavirus restrictions reflect good public policy."All that I'm saying is this, and I think it is an indisputable statement of fact," the justice said. "We have never before seen restrictions as severe, extensive and prolonged as those experienced for most of 2020."
"Think of all the live events that would otherwise be protected by the right to freedom of speech," from lectures and meetings to religious services, Alito said. He also noted that the pandemic has affected access to the courts and the constitutional right to a speedy trial.
Article continues after sponsor message
"The COVID crisis has served as a sort of constitutional stress test," Alito said. "And in doing so, it has highlighted disturbing trends that were already present before the virus struck."
Shifting attitudes
The Supreme Court justice then ran down a list of examples that, in his view, reflect shifting attitudes toward long-held rights in the United States.
First on the list was what Alito called "the dominance of lawmaking by executive fiat rather than legislation" – actions that he said range from agencies' broad use of regulatory power to the use of executive discretion to impose sweeping restrictions in the name of fighting a pandemic.
Alito later cited a legal case in Nevada, saying the governor's emergency orders in that state have given leeway and support to casinos hosting gamblers at up to 50% capacity while forcing houses of worship to cap their attendance at 50 people.
"Take a quick look at the Constitution," Alito said. "You will see the free exercise clause of the First Amendment, which protects religious liberty. You will not find a craps clause or a blackjack clause or a slot machine clause."
"It pains me to say this, but in certain quarters, religious liberty is fast becoming a disfavored right," Alito said. He ran through several religion-related Supreme Court rulings, including the Little Sisters of the Poor (over providing birth control to employees) to Masterpiece Cakeshop in Colorado (over the refusal to make a wedding cake for a gay couple).
Alito made a direct connection between America's ongoing "culture wars" and the pandemic crisis, citing a 2016 blog entry by Harvard Law School professor Mark Tushnet.
"He candidly wrote, quote, The culture wars are over; they lost, we won," Alito said.
He went on to quote from Tushnet's much-discussed stance that "[m]y own judgment is that taking a hard line ('You lost, live with it') is better than trying to accommodate the losers. ... And taking a hard line seemed to work reasonably well in Germany and Japan after 1945."
Alito went on to quote Bob Dylan: "Is our country going to follow that course? To quote a popular Nobel laureate, 'It's not dark yet, but it's getting there.' "
'Hostility to ... unfashionable views'
The justice described what he called a "growing hostility to the expression of unfashionable views." As an example, he cited the Supreme Court's landmark shift on same-sex marriage.
"You can't say that marriage is a union between one man and one woman," Alito said. "Until very recently, that's what the vast majority of Americans thought. Now it's considered bigotry."
Protecting freedom of speech will be one of the Supreme Court's greatest challenges, Alito said.
"Although that freedom is falling out of favor in some circles, we need to do whatever we can to prevent it from becoming a second-tier constitutional right."
Alito also called out a group of Democratic senators who weighed in on a gun-rights case in New York, saying they had attempted to bully the Supreme Court. The group filed an amicus brief calling the court "a sick institution" that might need to be restructured. Alito said he viewed it as "an affront to the Constitution and the rule of law."
The article: https://www.npr.org/2020/11/13/934666499/justice-alito-pandemic-has-brought-unimaginable-restrictions-on-freedoms
Alito speech URL: https://youtu.be/tYLZL4GZVbA
The Huffington Post's take on the speech:
https://www.youtube.com/watch?v=k0sqj1iTUB8
NYT catalog of Trump Era Financial Regulation Rollbacks
Here’s a look at some of the changes under President Trump.
Skimping on consumer protections
Payday lending: In late 2017, the Consumer Financial Protection Bureau finalized tough new restrictions on payday lending that would have prevented most customers from repeatedly re-borrowing, a pattern that can trap borrowers in a cycle of debt. But a director appointed by Mr. Trump, Kathleen Kraninger, took over the bureau in 2018 and delayed the new restrictions from taking effect. This year, she rescinded them. A coalition of consumer advocates filed a lawsuit last week challenging the legality of Ms. Kraninger’s actions.
Rent-a-bank rules: Many states have caps on the interest rate that lenders can charge on loans. But there’s a catch: Lenders can skirt the rule by partnering with a bank in another state — one without rate caps — and having that bank issue its loans. The bank then sells the loan to the lender. The tactic, often used by online lenders, is known as “rent-a-bank,” and the Office of the Comptroller of the Currency — under Brian P. Brooks, the acting head of the office — finalized two rules this year, one in May and one last week, affirming that the maneuver is legal. The Federal Deposit Insurance Corporation also issued a rule in June giving the arrangement a green light. (Both the F.D.I.C. action and the O.C.C.’s May rule have been challenged by state attorneys general in lawsuits that are pending.)
Fiduciary rule rollback: The Obama-era Labor Department imposed a rule that would have forced financial advisers and brokers handling retirement and 401(k) accounts to act as “fiduciaries,” a legal standard that requires putting customers’ interests first. But in 2018, a federal appeals court ruled that the agency had overstepped its authority, and the Trump administration didn’t challenge the decision, which killed the rule. One silver lining for consumers: Some economic research has found signs that the high-profile fight over the rule, and the increased attention it brought to how brokers are compensated, led the financial-services industry to alter its behavior and reduce brokers’ incentives to push costly retirement products.
Debt collection rules: The C.F.P.B. finalized new debt-collection rules last week that will, for the first time, let collectors contact borrowers through text messages, emails and social media direct messages. Electronic messages will be required to include an opt-out option. Collectors say the long-sought change will make it easier for them to reach borrowers; consumer advocates fear it will unleash a fresh barrage of intrusive communications. The new rules added one new protection for consumers: Collectors, who are notorious for their deluge of phone calls, will be limited to seven calls per week to a borrower.
Reversing anti-discrimination policiesTracking bias in home loans: This spring, citing the “operational challenges” banks and other mortgage lenders were facing as a result of the coronavirus pandemic, the C.F.P.B. announced that it would stop collecting detailed data on new mortgages, including information about the borrower’s race and location, which researchers and community groups say is crucial to ferreting out discrimination in home lending. Democratic lawmakers have asked the agency to start collecting the data again, but so far it has not done so.
The Community Reinvestment Act: In May, the O.C.C., which regulates banks, revised its requirements for those institutions to do business in low-income and minority communities, despite objections from Fed officials and a refusal by another bank regulator, the F.D.I.C., to sign on to the new rules. It was a rare regulatory split caused chiefly by a concern that the new methods did not make sense and could allow banks to win credit for activities that had little meaningful impact on the communities they are required to serve.
locking discrimination claims: The Department of Housing and Urban Development makes the rules for identifying and stopping discrimination by landlords and mortgage providers. One such rule governs the concept of “disparate impact,” where the policies of a landlord or a bank may unintentionally disadvantage a Black or Latino person seeking a home loan or trying to rent an apartment. In August, H.U.D. finalized a rewrite of the requirements for bringing “disparate impact” claims that critics said would immediately invalidate almost all potential claims. The change, although meant to benefit financial firms, was so drastic that banks, insurance companies and other big firms took the unprecedented step of asking the department not to go through with it.
Increasing room for risky business
Volcker Rule: The Volcker Rule was created as part of the Dodd-Frank law to prevent banks from taking risky bets in the financial markets for the sake of profit. It stipulated that banks could trade only on behalf of their customers and required them to start keeping records to prove their compliance. This year, the Fed and its fellow regulatory agencies changed the rule to allow banks to invest heavily in venture capital funds — which make bets on start-ups or high-growth businesses that are risky by nature — and credit funds, which invest in corporate debt. Critics said the change represented the first step toward letting banks make their own risky bets again, even if no customers were asking them to do so.
Capital requirements: Banks are required under Dodd-Frank to hold a certain amount of capital in reserve as a buffer against crisis. Bank executives dislike high capital requirements, which force them to limit stock buybacks and dividend payments, both of which can help lift share prices. Mr. Quarles, the Fed vice chair for supervision and a Trump appointee, has favored regulatory tweaks that give banks more certainty about their future capital requirements. Critics say that over time, having that certainty could allow banks to reduce the amount of capital they actually hold, since many had held extra capital to avoid big swings from year to year.
Last year, Mr. Quarles, a former private equity investor, instituted greater transparency around bank stress tests, which assess how their capital would hold up against a shock. More recently, the Fed streamlined the process for setting capital requirements, including tweaks that Governor Lael Brainard said might allow some banks to lower their buffers.
https://www.nytimes.com/2020/11/06/business/trump-administration-financial-regulations.html
Professor Andy Gavil, Congress, and antitrust reform
By Don Allen Resnikoff
A major and well publicized recent antitrust development is investigation by States and the U.S. against perceived platform monopolies Google, Facebook, Apple, Amazon, and filing of a Complaint against Google by USDOJ and eleven Republican States. The Google case and other investigation of platform companies seem likely to go forward.
Another important recent antitrust development is consideration of legislative reform, which may also go forward even in the absence of an election day "Blue wave." The recent Congressional report on competition in digital markets, issued by a House of Representatives committee, discusses the possibility of legislation that would change the antitrust laws. See https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
The Democratic majority’s portion of the House Report alone is 450 pages. It offers detailed discussion of the structure and conduct of the big platform companies. The Congressional report’s perception is that traditional antitrust law may not be able to meet the challenges posed by the platform monopolies.
The Democratic majority report offers an array of recommendations for reform, including structural and conduct proposals. It is interesting and important reading, but the complexity of the Report seems not helpful in the effort to secure reform from sometimes reluctant legislators in a divided Congress.
Professor Andy Gavil recently wrote a brief article on antitrust reform focused on monopolization law (https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/) that was certainly not intended as a comment on the Congressional Report, but I find that it has that effect.
Gavil’s suggestions have the virtue of simplicity. That simplicity would seem to increase the possibility that his particular focused suggestions might be acted on. Here is an excerpt from the Gavil article:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of Section 2. Such a modern framework could:
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
By Don Allen Resnikoff
A major and well publicized recent antitrust development is investigation by States and the U.S. against perceived platform monopolies Google, Facebook, Apple, Amazon, and filing of a Complaint against Google by USDOJ and eleven Republican States. The Google case and other investigation of platform companies seem likely to go forward.
Another important recent antitrust development is consideration of legislative reform, which may also go forward even in the absence of an election day "Blue wave." The recent Congressional report on competition in digital markets, issued by a House of Representatives committee, discusses the possibility of legislation that would change the antitrust laws. See https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
The Democratic majority’s portion of the House Report alone is 450 pages. It offers detailed discussion of the structure and conduct of the big platform companies. The Congressional report’s perception is that traditional antitrust law may not be able to meet the challenges posed by the platform monopolies.
The Democratic majority report offers an array of recommendations for reform, including structural and conduct proposals. It is interesting and important reading, but the complexity of the Report seems not helpful in the effort to secure reform from sometimes reluctant legislators in a divided Congress.
Professor Andy Gavil recently wrote a brief article on antitrust reform focused on monopolization law (https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/) that was certainly not intended as a comment on the Congressional Report, but I find that it has that effect.
Gavil’s suggestions have the virtue of simplicity. That simplicity would seem to increase the possibility that his particular focused suggestions might be acted on. Here is an excerpt from the Gavil article:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of Section 2. Such a modern framework could:
- Embrace today’s structured approach to the rule of reason, as did the Court in Microsoft
- Fully integrate a more sophisticated understanding of exclusionary conduct, market power, and anti-competitive effects.
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
Excerpt of Article on Epic-Apple by Jonathan Rubin: Apple Allowed to Continue to Ban Epic’s Fortnite From Store, But May Not Retaliate Against Epic Affiliates
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
Excerpt:
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
From Venturebeat: Epic v. Apple
from https://venturebeat.com/2020/09/11/the-deanbeat-apple-v-epic-a-briefing-on-the-antitrust-arguments-and-interesting-facts/
Epic markets programming is available on Apple and Android (Google) platforms. The charge from Apple to Epic customers is 30% of what Epic charges the customer (Google is similar). Epic started charging customers 30% outside of the Apple app, which led Apple to drop Epic from its platform. Epic then brought suit against Apple.
Epic argues that Apple is a monopolist in two respects: its control of app distribution on the App Store and its requirement that users pay through its payment processing system.
Epic also argues that because Apple has monopoly power, antitrust laws say Apple can’t use that power to shut competition out of the market for either the app store or the payment system. Epic does, however, acknowledge that Apple created value with the App Store.
“To be clear, Epic does not seek to force Apple to provide distribution and processing services for free, nor does Epic seek to enjoy Apple’s services without paying for them. What Epic wants is the freedom not to use Apple’s App Store or IAP (in-app purchase), and instead to use and offer competing service,” Epic said.
Apple has asserted its store isn’t a separate product, but Epic argues app distribution is an “aftermarket” derived from the primary market of the smartphone platform. Epic says the courts should view the relevant antitrust market as the aftermarket, which has a unique brand and a unique market and is not part of a larger single product. Epic isn’t challenging Apple’s rights on the smartphone platform, only in the aftermarket, where Epic alleges Apple is behaving in a monopolistic manner. It argues that Apple cuts off choices (such as downloading apps from websites) that are available to consumers in other markets. The U.S. Supreme Court examines this issue of the aftermarket in a the case Apple vs. Pepper.
While Apple doesn’t have a monopoly in the presence of Google’s Android, Epic argues that the duopoly has negative effects on the market and that Apple, rather than Google, has the most valuable users. Epic noted that two-thirds of the profits are on Apple’s platform and that Apple has a virtual lock on a billion highly desirable users who spend more than those on Android.
In his testimony, economist David Evans argued on Epic’s behalf that the cost of switching is very high for anyone thinking about moving from iOS to Android. It’s basically like starting over.
Pleadings:
August 13 Epic Complaint: https://www.courtlistener.com/docket/17442392/1/epic-games-inc-v-apple-inc/
August 17 Motion for TRO: https://www.courtlistener.com/docket/17442392/17/epic-games-inc-v-apple-inc/
August 21 Opposition to Motion: https://www.courtlistener.com/docket/17442392/36/epic-games-inc-v-apple-inc/
August 23 Reply to Opposition: https://www.courtlistener.com/docket/17442392/43/epic-games-inc-v-apple-inc/
August 24 Court Order, TRO: https://www.courtlistener.com/docket/17442392/48/epic-games-inc-v-apple-inc/
Sept 4 Motion for PI: https://www.courtlistener.com/docket/17442392/61/epic-games-inc-v-apple-inc/
Sept 8 Answer of Apple to Complaint, Counterclaim: https://www.courtlistener.com/docket/17442392/66/epic-games-inc-v-apple-inc/
Sept 15 Opposition to PI Motion: https://www.courtlistener.com/docket/17442392/73/epic-games-inc-v-apple-inc/
Sept 18 Epic Reply on PI Motion: https://www.courtlistener.com/docket/17442392/90/epic-games-inc-v-apple-inc/
Oct 9, 2020 ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR PRELIMINARY INJUNCTION https://www.courtlistener.com/docket/17442392/118/epic-games-inc-v-apple-inc/
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
Excerpt:
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
From Venturebeat: Epic v. Apple
from https://venturebeat.com/2020/09/11/the-deanbeat-apple-v-epic-a-briefing-on-the-antitrust-arguments-and-interesting-facts/
Epic markets programming is available on Apple and Android (Google) platforms. The charge from Apple to Epic customers is 30% of what Epic charges the customer (Google is similar). Epic started charging customers 30% outside of the Apple app, which led Apple to drop Epic from its platform. Epic then brought suit against Apple.
Epic argues that Apple is a monopolist in two respects: its control of app distribution on the App Store and its requirement that users pay through its payment processing system.
Epic also argues that because Apple has monopoly power, antitrust laws say Apple can’t use that power to shut competition out of the market for either the app store or the payment system. Epic does, however, acknowledge that Apple created value with the App Store.
“To be clear, Epic does not seek to force Apple to provide distribution and processing services for free, nor does Epic seek to enjoy Apple’s services without paying for them. What Epic wants is the freedom not to use Apple’s App Store or IAP (in-app purchase), and instead to use and offer competing service,” Epic said.
Apple has asserted its store isn’t a separate product, but Epic argues app distribution is an “aftermarket” derived from the primary market of the smartphone platform. Epic says the courts should view the relevant antitrust market as the aftermarket, which has a unique brand and a unique market and is not part of a larger single product. Epic isn’t challenging Apple’s rights on the smartphone platform, only in the aftermarket, where Epic alleges Apple is behaving in a monopolistic manner. It argues that Apple cuts off choices (such as downloading apps from websites) that are available to consumers in other markets. The U.S. Supreme Court examines this issue of the aftermarket in a the case Apple vs. Pepper.
While Apple doesn’t have a monopoly in the presence of Google’s Android, Epic argues that the duopoly has negative effects on the market and that Apple, rather than Google, has the most valuable users. Epic noted that two-thirds of the profits are on Apple’s platform and that Apple has a virtual lock on a billion highly desirable users who spend more than those on Android.
In his testimony, economist David Evans argued on Epic’s behalf that the cost of switching is very high for anyone thinking about moving from iOS to Android. It’s basically like starting over.
Pleadings:
August 13 Epic Complaint: https://www.courtlistener.com/docket/17442392/1/epic-games-inc-v-apple-inc/
August 17 Motion for TRO: https://www.courtlistener.com/docket/17442392/17/epic-games-inc-v-apple-inc/
August 21 Opposition to Motion: https://www.courtlistener.com/docket/17442392/36/epic-games-inc-v-apple-inc/
August 23 Reply to Opposition: https://www.courtlistener.com/docket/17442392/43/epic-games-inc-v-apple-inc/
August 24 Court Order, TRO: https://www.courtlistener.com/docket/17442392/48/epic-games-inc-v-apple-inc/
Sept 4 Motion for PI: https://www.courtlistener.com/docket/17442392/61/epic-games-inc-v-apple-inc/
Sept 8 Answer of Apple to Complaint, Counterclaim: https://www.courtlistener.com/docket/17442392/66/epic-games-inc-v-apple-inc/
Sept 15 Opposition to PI Motion: https://www.courtlistener.com/docket/17442392/73/epic-games-inc-v-apple-inc/
Sept 18 Epic Reply on PI Motion: https://www.courtlistener.com/docket/17442392/90/epic-games-inc-v-apple-inc/
Oct 9, 2020 ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR PRELIMINARY INJUNCTION https://www.courtlistener.com/docket/17442392/118/epic-games-inc-v-apple-inc/
NY TIMES: Uber and Lyft shares surge after California voters affirm how they classify drivers.
By Kevin Granville
Uber shares gained as much as 9 percent, and Lyft rose more than 12 percent.
Both companies help draft the ballot measure, known as Proposition 22, which exempts them from a new state labor law that would have forced them to employ drivers and pay for health care. Uber is expected to pursue federal legislation that would protect it and other gig economy companies from similar employment laws in other states.
The battle over Prop. 22 became hugely expensive, with backers contributing $200 million to a campaign that pitted Uber, Lyft, DoorDash and similar gig economy companies against labor groups and state lawmakers.
READ THE FULL STORY
Uber and Lyft drivers in California will remain independent
https://www.nytimes.com/2020/11/04/technology/california-uber-lyft-prop-22.html?action=click&module=RelatedLinks&pgtype=Article
By Kevin Granville
- Nov. 4, 2020Updated 9:47 a.m. ETShare prices in Uber and Lyft jumped in early trading on Wednesday after California voters approved a measure that will allow the ride-hailing companies to continue treating drivers as independent contractors.
Uber shares gained as much as 9 percent, and Lyft rose more than 12 percent.
Both companies help draft the ballot measure, known as Proposition 22, which exempts them from a new state labor law that would have forced them to employ drivers and pay for health care. Uber is expected to pursue federal legislation that would protect it and other gig economy companies from similar employment laws in other states.
The battle over Prop. 22 became hugely expensive, with backers contributing $200 million to a campaign that pitted Uber, Lyft, DoorDash and similar gig economy companies against labor groups and state lawmakers.
READ THE FULL STORY
Uber and Lyft drivers in California will remain independent
https://www.nytimes.com/2020/11/04/technology/california-uber-lyft-prop-22.html?action=click&module=RelatedLinks&pgtype=Article
How Google Misappropriated Third-Party Content from Yelp
from: https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
Comment by DAR: The recently released House Committee majority report on competition in digital markets runs 450 pages. It resembles the kind of industry report economists like Leonard Weiss might have written a generation ago. It is anecdotal in the sense that the industry stories it tells are based in large part on testimony from industry participants and documents that are publicly available. The Committee relied on voluntary cooperation from targets like Amazon. The Report complains that cooperation from companies like Amazon was limited.
The factual issues addressed by the Report deserve attention. Following is a very brief snippet from the Report about Google and Yelp. It illustrates the detail and style of the Report:
In the years following 2005, Google invested in building out its own vertical services. Documents reveal that Google partly did so through lifting content directly from third-party providers to bootstrap Google’s own vertical services. In the process, Google leveraged its search dominance—demanding that third parties permit Google to take their content, or else be removed from Google’s search results entirely. 184
For example, after identifying local search as a “particularly important” vertical to develop, Google built Google Local, which licensed content from local providers, including Yelp. [fn. 1103] In 2010 Google rolled out a service directly competing with Yelp, even as Google continued to license Yelp’s content—prompting Yelp’s CEO to request that Google immediately remove Yelp’s proprietary content from Google’s own service. [fn 1104] At a time when Google Local was failing to gain momentum, Google told Yelp that the only way to have its content removed from Google’s competing product was to be removed from Google’s general results entirely.[fn 1105] Yelp relied so heavily on Google for user traffic that the company could not afford to be delisted—a fact that Google likely knew. [fn1106] In short, Google weaponized its search dominance, demanding that Yelp surrender valuable content to Google’s competing product or else risk heavy losses in traffic and revenue.
from: https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
Comment by DAR: The recently released House Committee majority report on competition in digital markets runs 450 pages. It resembles the kind of industry report economists like Leonard Weiss might have written a generation ago. It is anecdotal in the sense that the industry stories it tells are based in large part on testimony from industry participants and documents that are publicly available. The Committee relied on voluntary cooperation from targets like Amazon. The Report complains that cooperation from companies like Amazon was limited.
The factual issues addressed by the Report deserve attention. Following is a very brief snippet from the Report about Google and Yelp. It illustrates the detail and style of the Report:
In the years following 2005, Google invested in building out its own vertical services. Documents reveal that Google partly did so through lifting content directly from third-party providers to bootstrap Google’s own vertical services. In the process, Google leveraged its search dominance—demanding that third parties permit Google to take their content, or else be removed from Google’s search results entirely. 184
For example, after identifying local search as a “particularly important” vertical to develop, Google built Google Local, which licensed content from local providers, including Yelp. [fn. 1103] In 2010 Google rolled out a service directly competing with Yelp, even as Google continued to license Yelp’s content—prompting Yelp’s CEO to request that Google immediately remove Yelp’s proprietary content from Google’s own service. [fn 1104] At a time when Google Local was failing to gain momentum, Google told Yelp that the only way to have its content removed from Google’s competing product was to be removed from Google’s general results entirely.[fn 1105] Yelp relied so heavily on Google for user traffic that the company could not afford to be delisted—a fact that Google likely knew. [fn1106] In short, Google weaponized its search dominance, demanding that Yelp surrender valuable content to Google’s competing product or else risk heavy losses in traffic and revenue.
Supreme Court Laying Out Path to Help Trump Win a Contested Race?
Greg Stohr
Excerpt from Bloomberg article:
(Bloomberg) -- The U.S. Supreme Court’s conservatives started carving a path that could let President Donald Trump win a contested election, issuing a far-reaching set of opinions just as Amy Coney Barrett was getting Senate confirmation to provide what could be a crucial additional vote.
In a 5-3 decision released minutes before the Senate vote Monday night, the court rejected Democratic calls to reinstate a six-day extension for the receipt of mail ballots in Wisconsin, a hotly contested state that is experiencing a surge of Covid-19 cases. The Supreme Court as a whole gave no explanation for the decision.
The outcome was bad enough for Democrats, but an opinion by Trump-appointed Justice Brett Kavanaugh bordered on catastrophic. Kavanaugh suggested sympathy for Trump’s unsubstantiated contentions that votes received after Election Day would be tainted by fraud, warning that “charges of a rigged election could explode” if late-arriving ballots change the perceived outcome.
Most states “want to avoid the chaos and suspicions of impropriety that can ensue if thousands of absentee ballots flow in after election day and potentially flip the results of an election,” Kavanaugh wrote. “And those states also want to be able to definitively announce the results of the election on election night, or as soon as possible thereafter.”
Although Trump is trailing Democrat Joe Biden in national polls, the race is tighter in Wisconsin and other swing states that will determine who wins and are the focus of the two campaigns. Two other pivotal states, Pennsylvania and North Carolina, are awaiting Supreme Court action in cases raising similar issues.
Kavanaugh’s vote -- and those of fellow Trump appointees Barrett and Neil Gorsuch -- could be crucial in any post-election dispute. With Chief Justice John Roberts showing less willingness to second-guess state election decisions, Trump could need the support of all three of his appointed justices to overturn election results that seem to favor Biden.
All three Democratic appointees dissented Monday night. Writing for the group, Justice Elena Kagan blasted Kavanaugh’s word choice, as well as his reasoning.
There are no results to ‘flip’ until all valid votes are counted,” Kagan wrote for herself and Justices Stephen Breyer and Sonia Sotomayor. “And nothing could be more suspicious or improper than refusing to tally votes once the clock strikes 12 on election night.”
The court’s decision Monday means ballots must be received by Election Day to count in Wisconsin. Democrats were seeking to revive an extension that had been ordered by a federal trial judge because of the Covid outbreak and then blocked by an appeals court.
Kagan said the worsening pandemic in Wisconsin means that without without the extension voters would have to “opt between braving the polls, with all the risk that entails, and losing their right to vote.” Kavanaugh countered that the high court order wouldn’t disenfranchise any voter who had adequately planned ahead.
The dueling opinions, however, went well beyond the Wisconsin circumstances. Kavanaugh embraced a legal theory that could let Republican-controlled state legislatures override results certified by Democratic officials. That argument, developed by three conservative justices in the 2000 Bush v. Gore case, says the Supreme Court should intervene in a presidential election dispute even when a state court is interpreting its own laws.
Dueling ElectorsCiting that opinion, Kavanaugh pointed to a constitutional provision that says state legislatures get to determine how electors are appointed to the Electoral College, the body that formally selects the U.S. president.
“The text of the Constitution requires federal courts to ensure that state courts do not rewrite state election laws,” Kavanaugh wrote. He was one of three current justices, including Roberts and Barrett, who worked as lawyers for Republican George W. Bush in the 2000 election fight
From: https://www.msn.com/en-us/news/politics/supreme-court-lays-out-path-to-help-trump-win-a-contested-race/ar-BB1asZSx?ocid=msedgdhp
Greg Stohr
Excerpt from Bloomberg article:
(Bloomberg) -- The U.S. Supreme Court’s conservatives started carving a path that could let President Donald Trump win a contested election, issuing a far-reaching set of opinions just as Amy Coney Barrett was getting Senate confirmation to provide what could be a crucial additional vote.
In a 5-3 decision released minutes before the Senate vote Monday night, the court rejected Democratic calls to reinstate a six-day extension for the receipt of mail ballots in Wisconsin, a hotly contested state that is experiencing a surge of Covid-19 cases. The Supreme Court as a whole gave no explanation for the decision.
The outcome was bad enough for Democrats, but an opinion by Trump-appointed Justice Brett Kavanaugh bordered on catastrophic. Kavanaugh suggested sympathy for Trump’s unsubstantiated contentions that votes received after Election Day would be tainted by fraud, warning that “charges of a rigged election could explode” if late-arriving ballots change the perceived outcome.
Most states “want to avoid the chaos and suspicions of impropriety that can ensue if thousands of absentee ballots flow in after election day and potentially flip the results of an election,” Kavanaugh wrote. “And those states also want to be able to definitively announce the results of the election on election night, or as soon as possible thereafter.”
Although Trump is trailing Democrat Joe Biden in national polls, the race is tighter in Wisconsin and other swing states that will determine who wins and are the focus of the two campaigns. Two other pivotal states, Pennsylvania and North Carolina, are awaiting Supreme Court action in cases raising similar issues.
Kavanaugh’s vote -- and those of fellow Trump appointees Barrett and Neil Gorsuch -- could be crucial in any post-election dispute. With Chief Justice John Roberts showing less willingness to second-guess state election decisions, Trump could need the support of all three of his appointed justices to overturn election results that seem to favor Biden.
All three Democratic appointees dissented Monday night. Writing for the group, Justice Elena Kagan blasted Kavanaugh’s word choice, as well as his reasoning.
There are no results to ‘flip’ until all valid votes are counted,” Kagan wrote for herself and Justices Stephen Breyer and Sonia Sotomayor. “And nothing could be more suspicious or improper than refusing to tally votes once the clock strikes 12 on election night.”
The court’s decision Monday means ballots must be received by Election Day to count in Wisconsin. Democrats were seeking to revive an extension that had been ordered by a federal trial judge because of the Covid outbreak and then blocked by an appeals court.
Kagan said the worsening pandemic in Wisconsin means that without without the extension voters would have to “opt between braving the polls, with all the risk that entails, and losing their right to vote.” Kavanaugh countered that the high court order wouldn’t disenfranchise any voter who had adequately planned ahead.
The dueling opinions, however, went well beyond the Wisconsin circumstances. Kavanaugh embraced a legal theory that could let Republican-controlled state legislatures override results certified by Democratic officials. That argument, developed by three conservative justices in the 2000 Bush v. Gore case, says the Supreme Court should intervene in a presidential election dispute even when a state court is interpreting its own laws.
Dueling ElectorsCiting that opinion, Kavanaugh pointed to a constitutional provision that says state legislatures get to determine how electors are appointed to the Electoral College, the body that formally selects the U.S. president.
“The text of the Constitution requires federal courts to ensure that state courts do not rewrite state election laws,” Kavanaugh wrote. He was one of three current justices, including Roberts and Barrett, who worked as lawyers for Republican George W. Bush in the 2000 election fight
From: https://www.msn.com/en-us/news/politics/supreme-court-lays-out-path-to-help-trump-win-a-contested-race/ar-BB1asZSx?ocid=msedgdhp
Werden and Froeb: Possible Problems in the Google Case
-
October 26, 2020By Gregory J. Werden & Luke M. Froeb1
Google invented neither the search engine nor the Internet browser, but it made them better. Competing on the merits, Google overcame Microsoft’s substantial incumbency advantages and displaced it as the dominant incumbent. At a cost of billions of dollars each year, Google provides and improves services that make it the third most trusted brand in American (behind the United States Postal Service and Amazon). To give up all on-line search and maps, the median American (in 2017) must be paid $21,178 per year.
The complaint filed by the Department of Justice and 11 states echoes the Microsoft case by alleging that Google has monopoly positions in search and search advertising which Google protects with anticompetitive tactics. The complaint has been criticized for not going further, but it states a case that seeks to take advantage of a causation standard for monopoly maintenance so low that the D.C. Circuit’s liability opinion in Microsoft described it as “edentulous.” Even so, Judge Mehta could get hung up on some points.
The complaint stresses the inability of small rivals to compete because they lack scale, and it alleges that Google’s practices block small rivals from achieving scale. But the complaint does not allege that Google’s small rivals had a plausible path to obtaining scale in the absence of all the challenged practices. If every computer and mobile device were preloaded with every search engine and browser, the vast majority of users likely would choose Google’s search engine and browser.
Among other things, the complaint alleges that Google pays makers of mobile devices and mobile service providers to promote usage of Google search. A striking allegation in the complaint is that Apple charges Google $8-12 billion per year to use its search engine. One might wonder whether Apple is the real gatekeeper and Google is just paying the price of admission.
The foundational allegation of the complaint is that “For both mobile and computer search access points, being preset as the default is the most effective way for general search engines to reach users, develop scale or remain competitive.” And the complaint acknowledges that Microsoft takes advantage of its monopoly in PC operating systems to promote its Edge browser and Bing search engine. Yet statcounter reports that Google has an 81.5 percent share in U.S. desktop search engines, while Bing has just a 12.1 percent share. Being preset as a default either does confer a big advantage on Bing, or Google overcomes that advantage through competition on the merits.
The obvious remedy would bar Google from buying distribution. The big loser could be Apple, and the loss of Google’s payments would act like a cost increase throughout the mobile device supply chain, so consumer prices likely would rise. Microsoft stands to benefit significantly, as it has the second most popular search engine and browser. The impact on Google is least clear, but it could come out ahead: Google could save billions of dollars a year in payments yet experience only a modest decline in usage.
The complaint asserts that “Google’s practices are anticompetitive under long-established antitrust law,” but antitrust law has not come to grips with monopolies in free services. An earlier monopoly claim against Google brought by KinderStart.com was dismissed, in part, on the basis that free Internet search could not be a monopoly under antitrust law. But conventional antitrust principles can be applied to free search with careful modification to account for monetization through advertising.
The complaint misapprehends application of the hypothetical monopolist test (“HMT”) to free search. The HMT made market delineation into a market power inquiry. Because market power normally is exercised by raising prices, the HMT asks whether a profit-maximizing monopolist would raise price, or perhaps whether an actual monopolist already did. Although a search monopolist would maximize profits by charging monopoly prices for advertising, the complaint omits the profit maximization and alleges that a hypothetical monopolist “would be able to maintain quality below the level that would prevail in a competitive market.”
A curious aspect of the government’s complaint is the public bemoaning of the fact that Google instructed employees not to use language that the government otherwise would have quoted. Antitrust plaintiffs love to invite the inference of anticompetitive motivation from small snippets taken from memos and emails. But the government cannot be inviting the inference of anticompetitive motivation from the absence of the usual snippets, so what is the point?
It also is unclear what the government hopes to achieve. History suggests that, no matter what is accomplished, the Biden Administration can be accused of selling out the American people in the 2024 election campaign. As President, William Howard Taft presided over the breakups of American Tobacco and Standard Oil in 1911. In the 1912 presidential election campaign, both Wilson and Roosevelt lambasted Taft for selling out the American people, and Taft got just 8 electoral votes (compared to 321 in 1908).
While any remedy is unlikely to satisfy the public, any rationale in the liability ruling is unlikely to satisfy the antitrust bar. In the platform context, legitimate competitive practices can look like illegitimate anticompetitive practices because network expansion lowers cost and improves quality. According to the complaint, Google increases the quality of it services by enlarging its user base and the best way to do that is through the sort of arrangement the government challenges. No one should expect the legal guidance from this case to be either clear or clearly in the consumer’s interest.
https://www.competitionpolicyinternational.com/possible-problems-in-the-google-case/
-
October 26, 2020By Gregory J. Werden & Luke M. Froeb1
Google invented neither the search engine nor the Internet browser, but it made them better. Competing on the merits, Google overcame Microsoft’s substantial incumbency advantages and displaced it as the dominant incumbent. At a cost of billions of dollars each year, Google provides and improves services that make it the third most trusted brand in American (behind the United States Postal Service and Amazon). To give up all on-line search and maps, the median American (in 2017) must be paid $21,178 per year.
The complaint filed by the Department of Justice and 11 states echoes the Microsoft case by alleging that Google has monopoly positions in search and search advertising which Google protects with anticompetitive tactics. The complaint has been criticized for not going further, but it states a case that seeks to take advantage of a causation standard for monopoly maintenance so low that the D.C. Circuit’s liability opinion in Microsoft described it as “edentulous.” Even so, Judge Mehta could get hung up on some points.
The complaint stresses the inability of small rivals to compete because they lack scale, and it alleges that Google’s practices block small rivals from achieving scale. But the complaint does not allege that Google’s small rivals had a plausible path to obtaining scale in the absence of all the challenged practices. If every computer and mobile device were preloaded with every search engine and browser, the vast majority of users likely would choose Google’s search engine and browser.
Among other things, the complaint alleges that Google pays makers of mobile devices and mobile service providers to promote usage of Google search. A striking allegation in the complaint is that Apple charges Google $8-12 billion per year to use its search engine. One might wonder whether Apple is the real gatekeeper and Google is just paying the price of admission.
The foundational allegation of the complaint is that “For both mobile and computer search access points, being preset as the default is the most effective way for general search engines to reach users, develop scale or remain competitive.” And the complaint acknowledges that Microsoft takes advantage of its monopoly in PC operating systems to promote its Edge browser and Bing search engine. Yet statcounter reports that Google has an 81.5 percent share in U.S. desktop search engines, while Bing has just a 12.1 percent share. Being preset as a default either does confer a big advantage on Bing, or Google overcomes that advantage through competition on the merits.
The obvious remedy would bar Google from buying distribution. The big loser could be Apple, and the loss of Google’s payments would act like a cost increase throughout the mobile device supply chain, so consumer prices likely would rise. Microsoft stands to benefit significantly, as it has the second most popular search engine and browser. The impact on Google is least clear, but it could come out ahead: Google could save billions of dollars a year in payments yet experience only a modest decline in usage.
The complaint asserts that “Google’s practices are anticompetitive under long-established antitrust law,” but antitrust law has not come to grips with monopolies in free services. An earlier monopoly claim against Google brought by KinderStart.com was dismissed, in part, on the basis that free Internet search could not be a monopoly under antitrust law. But conventional antitrust principles can be applied to free search with careful modification to account for monetization through advertising.
The complaint misapprehends application of the hypothetical monopolist test (“HMT”) to free search. The HMT made market delineation into a market power inquiry. Because market power normally is exercised by raising prices, the HMT asks whether a profit-maximizing monopolist would raise price, or perhaps whether an actual monopolist already did. Although a search monopolist would maximize profits by charging monopoly prices for advertising, the complaint omits the profit maximization and alleges that a hypothetical monopolist “would be able to maintain quality below the level that would prevail in a competitive market.”
A curious aspect of the government’s complaint is the public bemoaning of the fact that Google instructed employees not to use language that the government otherwise would have quoted. Antitrust plaintiffs love to invite the inference of anticompetitive motivation from small snippets taken from memos and emails. But the government cannot be inviting the inference of anticompetitive motivation from the absence of the usual snippets, so what is the point?
It also is unclear what the government hopes to achieve. History suggests that, no matter what is accomplished, the Biden Administration can be accused of selling out the American people in the 2024 election campaign. As President, William Howard Taft presided over the breakups of American Tobacco and Standard Oil in 1911. In the 1912 presidential election campaign, both Wilson and Roosevelt lambasted Taft for selling out the American people, and Taft got just 8 electoral votes (compared to 321 in 1908).
While any remedy is unlikely to satisfy the public, any rationale in the liability ruling is unlikely to satisfy the antitrust bar. In the platform context, legitimate competitive practices can look like illegitimate anticompetitive practices because network expansion lowers cost and improves quality. According to the complaint, Google increases the quality of it services by enlarging its user base and the best way to do that is through the sort of arrangement the government challenges. No one should expect the legal guidance from this case to be either clear or clearly in the consumer’s interest.
https://www.competitionpolicyinternational.com/possible-problems-in-the-google-case/
From Mother Jones: Payday Lenders Gave Trump Millions. Then He Helped Them Cash In on the Working Poor.
The investment in Trump has continued paying off during the pandemic.
https://www.motherjones.com/politics/2020/10/payday-lenders-gave-trump-millions-then-he-helped-them-cash-in-on-the-working-poor/
The investment in Trump has continued paying off during the pandemic.
https://www.motherjones.com/politics/2020/10/payday-lenders-gave-trump-millions-then-he-helped-them-cash-in-on-the-working-poor/
WSJ- Ant Group to Raise More Than $34 Billion in Record IPO
Excerpts:
HONG KONG—Chinese financial-technology giant Ant Group Co. is set to raise at least $34.4 billion from the world’s biggest-ever initial public offering, fillings showed Monday, in a blockbuster deal that will bypass U.S. stock exchanges.
Ant Group's coming initial public offering is set to be the largest ever IPO of all time.
The price values the Hangzhou-based group at about $313 billion, after including the new capital raised but before any greenshoe. In comparison, Mastercard Inc. was worth about $330 billion as of Friday’s close.
DAR Comment: Ant's vast electronic payment networks in China amd elsewhere have provoked concerns about invasive data collection to which the Chinese government would be privy.
Posted by Don Allen Resnikoff
Excerpts:
HONG KONG—Chinese financial-technology giant Ant Group Co. is set to raise at least $34.4 billion from the world’s biggest-ever initial public offering, fillings showed Monday, in a blockbuster deal that will bypass U.S. stock exchanges.
Ant Group's coming initial public offering is set to be the largest ever IPO of all time.
The price values the Hangzhou-based group at about $313 billion, after including the new capital raised but before any greenshoe. In comparison, Mastercard Inc. was worth about $330 billion as of Friday’s close.
DAR Comment: Ant's vast electronic payment networks in China amd elsewhere have provoked concerns about invasive data collection to which the Chinese government would be privy.
Posted by Don Allen Resnikoff
FTC Vote Pending As Commissioners Weigh Facebook Antitrust Suit
CPI
-
October 23, 2020
While the five commissioners of the Federal Trade Commission (FTC) debate if an antitrust lawsuit against Facebook should be pursued, FTC staffers are in favor of moving forward with the case, according to a Wall Street Journal report (WSJ) on Friday (Oct. 23), citing sources familiar with the matter.
It has been over a year since the FTC started investigating complaints that the social media giant stifled competition. The sources told the WSJ that the commission is expected to vote and hand down a decision in a few weeks.
Even though the investigation has been in progress for more than 12 months, Facebook is still “making its case to the commission.”
The sources told WSJ that FTC commissioners — three Republicans and two Democrats — held a virtual meeting among themselves to determine their next move. Per rules, the commissioners have to announce a formal meeting in order to discuss any enforcement actions as a group.
One part of the FTC investigation focuses on Facebook’s purchases of companies that could be considered possible rivals. Facebook bought Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion.
The FTC meeting comes on the heels of an antitrust filing against Google by the Department of Justice (DOJ). The suit says that Google uses anti-competitive measures to protect its search monopoly.
CPI
-
October 23, 2020
While the five commissioners of the Federal Trade Commission (FTC) debate if an antitrust lawsuit against Facebook should be pursued, FTC staffers are in favor of moving forward with the case, according to a Wall Street Journal report (WSJ) on Friday (Oct. 23), citing sources familiar with the matter.
It has been over a year since the FTC started investigating complaints that the social media giant stifled competition. The sources told the WSJ that the commission is expected to vote and hand down a decision in a few weeks.
Even though the investigation has been in progress for more than 12 months, Facebook is still “making its case to the commission.”
The sources told WSJ that FTC commissioners — three Republicans and two Democrats — held a virtual meeting among themselves to determine their next move. Per rules, the commissioners have to announce a formal meeting in order to discuss any enforcement actions as a group.
One part of the FTC investigation focuses on Facebook’s purchases of companies that could be considered possible rivals. Facebook bought Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion.
The FTC meeting comes on the heels of an antitrust filing against Google by the Department of Justice (DOJ). The suit says that Google uses anti-competitive measures to protect its search monopoly.
Harvard scholars on voter fraud disinformation
Benkler, Yochai, Casey Tilton, Bruce Etling, Hal Roberts, Justin Clark, et al. Mail-In Voter Fraud: Anatomy of a Disinformation Campaign, 2020.
Abstract
The claim that election fraud is a major concern with mail-in ballots has become the central threat to election participation during the Covid-19 pandemic and to the legitimacy of the outcome of the election across the political spectrum. President Trump has repeatedly cited his concerns over voter fraud associated with mail-in ballots as a reason that he may not abide by an adverse electoral outcome. Polling conducted in September 2020 suggests that nearly half of Republicans agree with the president that election fraud is a major concern associated with expanded mail-in voting during the pandemic. Few Democrats share that belief. Despite the consensus among independent academic and journalistic investigations that voter fraud is rare and extremely unlikely to determine a national election, tens of millions of Americans believe the opposite. This is a study of the disinformation campaign that led to widespread acceptance of this apparently false belief and to its partisan distribution pattern. Contrary to the focus of most contemporary work on disinformation, our findings suggest that this highly effective disinformation campaign, with potentially profound effects for both participation in and the legitimacy of the 2020 election, was an elite-driven, mass-media led process. Social media played only a secondary and supportive role.
Our results are based on analyzing over fifty-five thousand online media stories, five million tweets, and seventy-five thousand posts on public Facebook pages garnering millions of engagements. They are consistent with our findings about the American political media ecosystem from 2015-2018, published in Network Propaganda, in which we found that Fox News and Donald Trump’s own campaign were far more influential in spreading false beliefs than Russian trolls or Facebook clickbait artists. This dynamic appears to be even more pronounced in this election cycle, likely because Donald Trump’s position as president and his leadership of the Republican Party allow him to operate directly through political and media elites, rather than relying on online media as he did when he sought to advance his then-still-insurgent positions in 2015 and the first half of 2016.
Our findings here suggest that Donald Trump has perfected the art of harnessing mass media to disseminate and at times reinforce his disinformation campaign by using three core standard practices of professional journalism. These three are: elite institutional focus (if the President says it, it’s news); headline seeking (if it bleeds, it leads); and balance, neutrality, or the avoidance of the appearance of taking a side. He uses the first two in combination to summon coverage at will, and has used them continuously to set the agenda surrounding mail-in voting through a combination of tweets, press conferences, and television interviews on Fox News. He relies on the latter professional practice to keep audiences that are not politically pre-committed and have relatively low political knowledge confused, because it limits the degree to which professional journalists in mass media organizations are willing or able to directly call the voter fraud frame disinformation. The president is, however, not acting alone. Throughout the first six months of the disinformation campaign, the Republican National Committee (RNC) and staff from the Trump campaign appear repeatedly and consistently on message at the same moments, suggesting an institutionalized rather than individual disinformation campaign. The efforts of the president and the Republican Party are supported by the right-wing media ecosystem, primarily Fox News and talk radio functioning in effect as a party press. These reinforce the message, provide the president a platform, and marginalize or attack those Republican leaders or any conservative media personalities who insist that there is no evidence of widespread voter fraud associated with mail-in voting.
The primary cure for the elite-driven, mass media communicated information disorder we observe here is unlikely to be more fact checking on Facebook. Instead, it is likely to require more aggressive policing by traditional professional media, the Associated Press, the television networks, and local TV news editors of whether and how they cover Trump’s propaganda efforts, and how they educate their audiences about the disinformation campaign the president and the Republican Party have waged.
Terms of Use
This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page
https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37365484
Benkler, Yochai, Casey Tilton, Bruce Etling, Hal Roberts, Justin Clark, et al. Mail-In Voter Fraud: Anatomy of a Disinformation Campaign, 2020.
Abstract
The claim that election fraud is a major concern with mail-in ballots has become the central threat to election participation during the Covid-19 pandemic and to the legitimacy of the outcome of the election across the political spectrum. President Trump has repeatedly cited his concerns over voter fraud associated with mail-in ballots as a reason that he may not abide by an adverse electoral outcome. Polling conducted in September 2020 suggests that nearly half of Republicans agree with the president that election fraud is a major concern associated with expanded mail-in voting during the pandemic. Few Democrats share that belief. Despite the consensus among independent academic and journalistic investigations that voter fraud is rare and extremely unlikely to determine a national election, tens of millions of Americans believe the opposite. This is a study of the disinformation campaign that led to widespread acceptance of this apparently false belief and to its partisan distribution pattern. Contrary to the focus of most contemporary work on disinformation, our findings suggest that this highly effective disinformation campaign, with potentially profound effects for both participation in and the legitimacy of the 2020 election, was an elite-driven, mass-media led process. Social media played only a secondary and supportive role.
Our results are based on analyzing over fifty-five thousand online media stories, five million tweets, and seventy-five thousand posts on public Facebook pages garnering millions of engagements. They are consistent with our findings about the American political media ecosystem from 2015-2018, published in Network Propaganda, in which we found that Fox News and Donald Trump’s own campaign were far more influential in spreading false beliefs than Russian trolls or Facebook clickbait artists. This dynamic appears to be even more pronounced in this election cycle, likely because Donald Trump’s position as president and his leadership of the Republican Party allow him to operate directly through political and media elites, rather than relying on online media as he did when he sought to advance his then-still-insurgent positions in 2015 and the first half of 2016.
Our findings here suggest that Donald Trump has perfected the art of harnessing mass media to disseminate and at times reinforce his disinformation campaign by using three core standard practices of professional journalism. These three are: elite institutional focus (if the President says it, it’s news); headline seeking (if it bleeds, it leads); and balance, neutrality, or the avoidance of the appearance of taking a side. He uses the first two in combination to summon coverage at will, and has used them continuously to set the agenda surrounding mail-in voting through a combination of tweets, press conferences, and television interviews on Fox News. He relies on the latter professional practice to keep audiences that are not politically pre-committed and have relatively low political knowledge confused, because it limits the degree to which professional journalists in mass media organizations are willing or able to directly call the voter fraud frame disinformation. The president is, however, not acting alone. Throughout the first six months of the disinformation campaign, the Republican National Committee (RNC) and staff from the Trump campaign appear repeatedly and consistently on message at the same moments, suggesting an institutionalized rather than individual disinformation campaign. The efforts of the president and the Republican Party are supported by the right-wing media ecosystem, primarily Fox News and talk radio functioning in effect as a party press. These reinforce the message, provide the president a platform, and marginalize or attack those Republican leaders or any conservative media personalities who insist that there is no evidence of widespread voter fraud associated with mail-in voting.
The primary cure for the elite-driven, mass media communicated information disorder we observe here is unlikely to be more fact checking on Facebook. Instead, it is likely to require more aggressive policing by traditional professional media, the Associated Press, the television networks, and local TV news editors of whether and how they cover Trump’s propaganda efforts, and how they educate their audiences about the disinformation campaign the president and the Republican Party have waged.
Terms of Use
This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page
https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37365484
Apple Allowed to Continue to Ban Epic’s Fortnite From Store, But May Not Retaliate Against Epic Affiliates
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
(See related post, Pistacchio vs. Apple: Gamers Claim Anticompetitive Behavior in Subscription Game Market, a lawsuit filed the day before this ruling was handed down.)
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
(For additional background on the case, please read our previous post.)
After it was barred from Apple’s App Store, Epic asked the court to force Apple to reinstate Fortnite, despite acknowledging that it breached licensing agreements and operating guidelines in which Apple bars developers from circumventing the iPhone and iPad system (IAP) or distributing iOS apps outside the Apple Store. However, Epic launched the Epic Games Store and would like to create an iOS store independent of the Apple store, as well. “Apple maintains the iOS platform as a walled garden or closed platform model, whereby Apple has strict and exclusive control over the hardware, the operating system, the digital distribution, and the IAP system,” Judge Rogers wrote.
Epic also urged the court to stop Apple from terminating its affiliates’ access to developer tools for other applications, including Unreal Engine, while Epic litigates its claims. Epic Games International of Sweden hosts Unreal Engine, a widely used by third-party developers to create graphics for video games, as well as for Epic Inc. and Fortnite. Unreal Engine remains compatible with iOS. But rival graphics engine, Unity, is used by more iOS applications, including Fortnite rival PlayerUnknown’s Battlegrounds.
“Given the novelty and the magnitude of the issues, as well as the debate in both the academic community and society at large,” Judge Rogers wrote, “the Court is unwilling to tilt the playing field in favor of one party or the other with an early ruling of likelihood of success on the merits.”
Judge Rogers also noted the absence of guiding authority on the questions raised. One case cited by the court, however, was the Ninth Circuit’s ruling in FTC v. Qualcomm, which held that “novel business practices — especially in technology markets — should not be ‘conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.'”
Judge Rogers carefully recited some of the basic tenants of antitrust law, explaining that courts will not condemn monopoly power, if it exists, without proof of anticompetitive conduct. And to answer that question, a plaintiff must define the relevant market, something Epic failed to do, the judge held.
“The relevant market must include both a geographic market and a product market,” the court said. Epic maintained that the market is the marketing for distributing apps operating on the iOS platform – which only considers, the judge noted, “how iOS apps are distributed on the iOS platform.” Apple countered that the relevant market is much broader, including all competing platforms that distribute Fortnite, everything from Xbox to PlayStation to all makes of computers and tablets.
“The multiplatform nature of Fortnite suggests that these other platforms and their digital distributions may be economic substitutes that should be considered in any ‘relevant market’ definition because they are ‘reasonably interchangeable’ when used ‘for the same purposes,'” Judge Rogers wrote.
Epic argued that some of console platforms are different from the iOS platform because they are not mobile — players need to plug them in and they require separate screens. The judge dismissed this argument, saying Epic failed to include all the devices, like tablets and Nintendo Switch, which are mobile.
Epic argued, however, that whether these other platforms are economic substitutes has yet to been proven. To that, the judge said Apple’s definition also faces hurdles. “Antitrust law is not concerned with individual consumers or producers, like Epic Games; it is concerned with market aggregates. Substitutes may not deprive a monopolist of market power if they fail to affect enough consumers to make a price increase unprofitable … Alternatively, constraints among some consumers may not render the market as a whole narrow … Here both parties cite factors impacting the elasticity of their proposed markets. A final determination may depend on the magnitude of those effects.” The judge added not enough is known about the iOS market, such as how many iOS users own multiple devices or how many would switch to another device if the price goes up, or how many developers can afford to ignore iOS customers completely.
Turning to the allegations of illegal tying, the court again found the record wanting.
Apple claimed that it does not “tie” IAP to iOS app distribution, because developers may choose other business models. It does not dispute, however, that its App Store Review Guidelines require the IAP system’s use for IAPs as a condition of distribution.
“This requirement manifests the coercion, that is, developers who offer IAP must do so on Apple’s terms,” wrote Judge Rogers. “Apple also does not dispute that it holds market power in the iOS app distribution market and that the alleged tie affects a substantial volume of commerce in in-app payment processing. Accordingly, Epic Games raises serious questions with regard to per se tying, but fails to demonstrate the likelihood of success due to lack of evidence of ‘purchaser demand’ for IAP processing service separate from the ‘integrated service’ of app distribution.”
While competitors could provide equal or better services, Apple has established that its security features — which is a key selling point — is superior to competing platforms, the judge found, but still concluded the record isn’t sufficient to grant a preliminary injunction.
As for Epic’s claim of irreparable harm, the judge said Epic made the decision to breach its agreements with Apple and “self-inflicted wounds are not irreparable injury.” Epic argued the court shouldn’t enforce anticompetitive contracts, to which the court responded that Epic “cannot simply exclaim ‘monopoly’ to rewrite agreements giving itself unilateral benefit.”
With regard to Epic’s affiliated companies, namely Epic Games International, maker of the Unreal Engine, there would be irreparable harm if the Unreal Engine was removed from the Apple Store, the judge determined, noting Apple’s actions are already having a negative impact. While removing affiliates is consistent with Apple’s practice, Judge Rogers said this is an exception. She said Apple made good arguments, including the at-will nature of the agreements. But Epic argued persuasively, the judge found, that it and its affiliates have separate agreements that have not been breached. Further, the judge said Apple’s elimination of Unreal Engine and other affiliate agreements “appears to be retaliatory.”
Apple had also argued that Epic Games could use the Unreal Engine to carry malicious code designed to damage the iOS platform. The judge rejected this concern as exaggerated and not supported by any evidence.
The court entered a ruling against Epic’s request to force Apple to return Fortnite to the Apple Store, and in favor of the preliminary injunction stopping Apple from removing developer tools provided by Epic affiliates, notably Unreal Engine.
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
(See related post, Pistacchio vs. Apple: Gamers Claim Anticompetitive Behavior in Subscription Game Market, a lawsuit filed the day before this ruling was handed down.)
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
(For additional background on the case, please read our previous post.)
After it was barred from Apple’s App Store, Epic asked the court to force Apple to reinstate Fortnite, despite acknowledging that it breached licensing agreements and operating guidelines in which Apple bars developers from circumventing the iPhone and iPad system (IAP) or distributing iOS apps outside the Apple Store. However, Epic launched the Epic Games Store and would like to create an iOS store independent of the Apple store, as well. “Apple maintains the iOS platform as a walled garden or closed platform model, whereby Apple has strict and exclusive control over the hardware, the operating system, the digital distribution, and the IAP system,” Judge Rogers wrote.
Epic also urged the court to stop Apple from terminating its affiliates’ access to developer tools for other applications, including Unreal Engine, while Epic litigates its claims. Epic Games International of Sweden hosts Unreal Engine, a widely used by third-party developers to create graphics for video games, as well as for Epic Inc. and Fortnite. Unreal Engine remains compatible with iOS. But rival graphics engine, Unity, is used by more iOS applications, including Fortnite rival PlayerUnknown’s Battlegrounds.
“Given the novelty and the magnitude of the issues, as well as the debate in both the academic community and society at large,” Judge Rogers wrote, “the Court is unwilling to tilt the playing field in favor of one party or the other with an early ruling of likelihood of success on the merits.”
Judge Rogers also noted the absence of guiding authority on the questions raised. One case cited by the court, however, was the Ninth Circuit’s ruling in FTC v. Qualcomm, which held that “novel business practices — especially in technology markets — should not be ‘conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.'”
Judge Rogers carefully recited some of the basic tenants of antitrust law, explaining that courts will not condemn monopoly power, if it exists, without proof of anticompetitive conduct. And to answer that question, a plaintiff must define the relevant market, something Epic failed to do, the judge held.
“The relevant market must include both a geographic market and a product market,” the court said. Epic maintained that the market is the marketing for distributing apps operating on the iOS platform – which only considers, the judge noted, “how iOS apps are distributed on the iOS platform.” Apple countered that the relevant market is much broader, including all competing platforms that distribute Fortnite, everything from Xbox to PlayStation to all makes of computers and tablets.
“The multiplatform nature of Fortnite suggests that these other platforms and their digital distributions may be economic substitutes that should be considered in any ‘relevant market’ definition because they are ‘reasonably interchangeable’ when used ‘for the same purposes,'” Judge Rogers wrote.
Epic argued that some of console platforms are different from the iOS platform because they are not mobile — players need to plug them in and they require separate screens. The judge dismissed this argument, saying Epic failed to include all the devices, like tablets and Nintendo Switch, which are mobile.
Epic argued, however, that whether these other platforms are economic substitutes has yet to been proven. To that, the judge said Apple’s definition also faces hurdles. “Antitrust law is not concerned with individual consumers or producers, like Epic Games; it is concerned with market aggregates. Substitutes may not deprive a monopolist of market power if they fail to affect enough consumers to make a price increase unprofitable … Alternatively, constraints among some consumers may not render the market as a whole narrow … Here both parties cite factors impacting the elasticity of their proposed markets. A final determination may depend on the magnitude of those effects.” The judge added not enough is known about the iOS market, such as how many iOS users own multiple devices or how many would switch to another device if the price goes up, or how many developers can afford to ignore iOS customers completely.
Turning to the allegations of illegal tying, the court again found the record wanting.
Apple claimed that it does not “tie” IAP to iOS app distribution, because developers may choose other business models. It does not dispute, however, that its App Store Review Guidelines require the IAP system’s use for IAPs as a condition of distribution.
“This requirement manifests the coercion, that is, developers who offer IAP must do so on Apple’s terms,” wrote Judge Rogers. “Apple also does not dispute that it holds market power in the iOS app distribution market and that the alleged tie affects a substantial volume of commerce in in-app payment processing. Accordingly, Epic Games raises serious questions with regard to per se tying, but fails to demonstrate the likelihood of success due to lack of evidence of ‘purchaser demand’ for IAP processing service separate from the ‘integrated service’ of app distribution.”
While competitors could provide equal or better services, Apple has established that its security features — which is a key selling point — is superior to competing platforms, the judge found, but still concluded the record isn’t sufficient to grant a preliminary injunction.
As for Epic’s claim of irreparable harm, the judge said Epic made the decision to breach its agreements with Apple and “self-inflicted wounds are not irreparable injury.” Epic argued the court shouldn’t enforce anticompetitive contracts, to which the court responded that Epic “cannot simply exclaim ‘monopoly’ to rewrite agreements giving itself unilateral benefit.”
With regard to Epic’s affiliated companies, namely Epic Games International, maker of the Unreal Engine, there would be irreparable harm if the Unreal Engine was removed from the Apple Store, the judge determined, noting Apple’s actions are already having a negative impact. While removing affiliates is consistent with Apple’s practice, Judge Rogers said this is an exception. She said Apple made good arguments, including the at-will nature of the agreements. But Epic argued persuasively, the judge found, that it and its affiliates have separate agreements that have not been breached. Further, the judge said Apple’s elimination of Unreal Engine and other affiliate agreements “appears to be retaliatory.”
Apple had also argued that Epic Games could use the Unreal Engine to carry malicious code designed to damage the iOS platform. The judge rejected this concern as exaggerated and not supported by any evidence.
The court entered a ruling against Epic’s request to force Apple to return Fortnite to the Apple Store, and in favor of the preliminary injunction stopping Apple from removing developer tools provided by Epic affiliates, notably Unreal Engine.
Art Wilmarth will be speaking about his recently-published book, Taming the Megabanks: Why We Need a New Glass-Steagall Act, during a virtual program hosted by the Peterson Institute for International Economics on Wednesday, Oct. 28th, at 9 a.m.
Here's the link to PIIE's announcement and registration information: https://lnkd.in/dkUJQy
Here's the link to PIIE's announcement and registration information: https://lnkd.in/dkUJQy
Biotech supports Fauci
Supporting US public health experts
Jeremy Levin
CEO, Ovid Therapeutics
Published Oct 22, 2020
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Share https://bioengineeringcommunity.nature.com/posts/supporting-us-public-health-experts-dd8a3fc2-f5df-437a-aec5-e66df7441516#share
To the editor:
As CEOs of biotechnology companies, we are writing this letter in support of US National Institutes of Allergy and Infectious Disease (NIAID) director Anthony Fauci and the institutions and organizations that are working tirelessly to combat the COVID-19 pandemic.
The biotechnology industry is the world’s greatest innovation engine for creating new medicines and vaccines that improve the human condition. It is a strategic asset to the nation. The past few decades have shown extraordinary progress in our ability to fight disease. This year, our industry has risen to the challenge of overcoming the deadly pandemic that has gripped the world, putting that engine to work at miraculous speed to develop therapies and vaccines.
To do so most effectively requires close collaboration among biopharmaceutical companies, regulatory authorities such as the US Food and Drug Administration (FDA), public health authorities such as the US Centers for Disease Control and Prevention (CDC), federal, state and local government authorities, scientific and medical institutions, such as the US National Institutes of Health (NIH), and world experts in epidemiology and infectious disease, most prominently, Anthony Fauci. As we come ever closer to producing safe, effective therapies for COVID-19, it is critical that all of these institutions and experts work together to ensure the best, most rapid possible outcomes for all Americans and, indeed, for people worldwide.
The institutions of the CDC, the FDA and NIH comprise tens of thousands of men and women who care deeply about society and making the world a better place. These nameless individuals represent our ‘United Armed Forces’ against COVID-19. They fight with brains instead of weapons, displaying the same courage and dedication as our armed forces in times of war, and they deserve our eternal gratitude. We and the associates of our companies consider that we fight alongside these individuals as part of the same cause, wielding science against our common adversary.
However, we are concerned that various parties in this critical coalition have come under politically motivated attacks. Targets have included, among others, the FDA, the CDC and Fauci; in Fauci’s case this has occurred to the point where he now requires a security detail. Not only are these attacks completely unjustified, they risk intimidating and demoralizing the very people we all are relying on to help end the COVID-19 nightmare. As such, they are irresponsible and a pose danger to us all.
Fauci is a giant of epidemiology, one of the world’s most respected scientists in infectious diseases, and an American hero who has served multiple administrations—both Republican and Democratic—for decades. He has recommended measures that have saved likely scores of thousands of lives in our country. Had his counsel been taken more widely, even more lives could have been saved. Unfortunately, the United States today has experienced the largest number of deaths from COVID-19 of any country in the world.
When a public servant of Fauci’s caliber is attacked, it puts our collective efforts, and the safety of the American public, at risk. Senator Lamar Alexander (R-Tennessee) posted on Twitter: “Dr. Fauci is one of our country’s most distinguished public servants,” and “If more Americans paid attention to his advice, we’d have fewer cases of COVID-19, & it would be safer to go back to school & back to work & out to eat.”
This is the sort of responsible, truthful support that is needed from our public officials. Many of our colleagues and friends are working as part of Operation Warp Speed; we stand united with them, with the many good people at FDA, CDC and NIH, and with Dr. Fauci, in upholding the high scientific, medical and ethical principles that will allow us to defeat COVID-19.
Acknowledgments
This letter represents solely the individual and personal views of the authors and signatories, and not those of their company.
Authors
Ron Cohen, President and CEO, Acorda Therapeutics; Cedric Francois, President and CEO, Apellis Pharmaceuticals; John Crowley, Chairman and CEO, Amicus Therapeutics; Paul Hastings, President and CEO, Nkarta Therapeutics; Rachel King, CEO, GlycoMimetics; Ted W. Love, President and CEO, Global Blood Therapeutics; John Maraganore, CEO, Alnylam Pharmaceuticals; Michelle McMurry-Heath, President and CEO, Biotechnology Innovation Organization; Jeremy Levin, Chairman and CEO, Ovid Therapeutics, and Chairman, Biotechnology Innovation Organization
Jeremy Levin
Supporting US public health experts
Jeremy Levin
CEO, Ovid Therapeutics
Published Oct 22, 2020
Like Comment
Share https://bioengineeringcommunity.nature.com/posts/supporting-us-public-health-experts-dd8a3fc2-f5df-437a-aec5-e66df7441516#share
To the editor:
As CEOs of biotechnology companies, we are writing this letter in support of US National Institutes of Allergy and Infectious Disease (NIAID) director Anthony Fauci and the institutions and organizations that are working tirelessly to combat the COVID-19 pandemic.
The biotechnology industry is the world’s greatest innovation engine for creating new medicines and vaccines that improve the human condition. It is a strategic asset to the nation. The past few decades have shown extraordinary progress in our ability to fight disease. This year, our industry has risen to the challenge of overcoming the deadly pandemic that has gripped the world, putting that engine to work at miraculous speed to develop therapies and vaccines.
To do so most effectively requires close collaboration among biopharmaceutical companies, regulatory authorities such as the US Food and Drug Administration (FDA), public health authorities such as the US Centers for Disease Control and Prevention (CDC), federal, state and local government authorities, scientific and medical institutions, such as the US National Institutes of Health (NIH), and world experts in epidemiology and infectious disease, most prominently, Anthony Fauci. As we come ever closer to producing safe, effective therapies for COVID-19, it is critical that all of these institutions and experts work together to ensure the best, most rapid possible outcomes for all Americans and, indeed, for people worldwide.
The institutions of the CDC, the FDA and NIH comprise tens of thousands of men and women who care deeply about society and making the world a better place. These nameless individuals represent our ‘United Armed Forces’ against COVID-19. They fight with brains instead of weapons, displaying the same courage and dedication as our armed forces in times of war, and they deserve our eternal gratitude. We and the associates of our companies consider that we fight alongside these individuals as part of the same cause, wielding science against our common adversary.
However, we are concerned that various parties in this critical coalition have come under politically motivated attacks. Targets have included, among others, the FDA, the CDC and Fauci; in Fauci’s case this has occurred to the point where he now requires a security detail. Not only are these attacks completely unjustified, they risk intimidating and demoralizing the very people we all are relying on to help end the COVID-19 nightmare. As such, they are irresponsible and a pose danger to us all.
Fauci is a giant of epidemiology, one of the world’s most respected scientists in infectious diseases, and an American hero who has served multiple administrations—both Republican and Democratic—for decades. He has recommended measures that have saved likely scores of thousands of lives in our country. Had his counsel been taken more widely, even more lives could have been saved. Unfortunately, the United States today has experienced the largest number of deaths from COVID-19 of any country in the world.
When a public servant of Fauci’s caliber is attacked, it puts our collective efforts, and the safety of the American public, at risk. Senator Lamar Alexander (R-Tennessee) posted on Twitter: “Dr. Fauci is one of our country’s most distinguished public servants,” and “If more Americans paid attention to his advice, we’d have fewer cases of COVID-19, & it would be safer to go back to school & back to work & out to eat.”
This is the sort of responsible, truthful support that is needed from our public officials. Many of our colleagues and friends are working as part of Operation Warp Speed; we stand united with them, with the many good people at FDA, CDC and NIH, and with Dr. Fauci, in upholding the high scientific, medical and ethical principles that will allow us to defeat COVID-19.
Acknowledgments
This letter represents solely the individual and personal views of the authors and signatories, and not those of their company.
Authors
Ron Cohen, President and CEO, Acorda Therapeutics; Cedric Francois, President and CEO, Apellis Pharmaceuticals; John Crowley, Chairman and CEO, Amicus Therapeutics; Paul Hastings, President and CEO, Nkarta Therapeutics; Rachel King, CEO, GlycoMimetics; Ted W. Love, President and CEO, Global Blood Therapeutics; John Maraganore, CEO, Alnylam Pharmaceuticals; Michelle McMurry-Heath, President and CEO, Biotechnology Innovation Organization; Jeremy Levin, Chairman and CEO, Ovid Therapeutics, and Chairman, Biotechnology Innovation Organization
Jeremy Levin
A D.C. State-level case decision puts a surprise crimp in federal designs to control public broadcasting
The Voice of America and Corporation for Public Broadcasting are the entities established to provide federally supported public broadcasting. The VOA focuses overseas, while CPB operates domestically.
Recent successful litigation by the D.C. Attorney General suggests that State law on not-for profit corporations can provide a basis for limiting federal executive power to interfere with the independence of public broadcasting. In a case addressing the authority of Voice of America executives to replace directors of the not-for-profit Open Technology Fund, D.C. Superior Court Judge Matini held that efforts by VOA executives to replace Fund board members were precluded by Fund by-laws, which “contains the only clear mechanism for removal of directors.”
The D.C. State-level case decision is also relevant to local PBS stations, which are set up as not-for-profit corporations. So, the D.C. case comes out of left field to put a crimp in possible future federal designs to control public broadcasting content. That is important in avoiding concerns that, as the Guardian newspaper put it, the U.S. executive branch will try to turm public broadcasting, including domestic public broadcasting "into a loyal state broadcaster of the kind normally found in authoritarian societies.”
An article on the case, and the case opinion, are at https://www.techdirt.com/articles/20201016/00123345515/court-says-trump-appointee-had-no-authority-to-fire-open-technology-fund-board-says-they-remain-place.shtml
I am preparing a longer article on the topic for future publication.
Don Resnikoff
The Voice of America and Corporation for Public Broadcasting are the entities established to provide federally supported public broadcasting. The VOA focuses overseas, while CPB operates domestically.
Recent successful litigation by the D.C. Attorney General suggests that State law on not-for profit corporations can provide a basis for limiting federal executive power to interfere with the independence of public broadcasting. In a case addressing the authority of Voice of America executives to replace directors of the not-for-profit Open Technology Fund, D.C. Superior Court Judge Matini held that efforts by VOA executives to replace Fund board members were precluded by Fund by-laws, which “contains the only clear mechanism for removal of directors.”
The D.C. State-level case decision is also relevant to local PBS stations, which are set up as not-for-profit corporations. So, the D.C. case comes out of left field to put a crimp in possible future federal designs to control public broadcasting content. That is important in avoiding concerns that, as the Guardian newspaper put it, the U.S. executive branch will try to turm public broadcasting, including domestic public broadcasting "into a loyal state broadcaster of the kind normally found in authoritarian societies.”
An article on the case, and the case opinion, are at https://www.techdirt.com/articles/20201016/00123345515/court-says-trump-appointee-had-no-authority-to-fire-open-technology-fund-board-says-they-remain-place.shtml
I am preparing a longer article on the topic for future publication.
Don Resnikoff
Ingram on the Google case
Excerpt:
Recently the House subcommittee on antitrust released a 400-plus page report detailing the anti-competitive practices of the four major digital platforms — Google, Amazon, Apple, and Facebook — and called for the Department of Justice (among others) to take action. And this week, the government did exactly that, filing a landmark antitrust case against Google, one the DoJ has reportedly been working on for some time. Depending on whom you ask, it is either a cravenly political gambit by Attorney General Bill Barr designed to make the Trump administration look tough, a legal quagmire that is significantly weaker than the 1998 Microsoft case and almost certain to fail, or a sign that the government is finally taking strong action to correct some of the blatant antitrust failures of the past two decades. It’s even possible that it may be all three of those things simultaneously.
What it is almost certain to be if it survives the election (and there’s good reason to believe it will continue even if Joe Biden becomes president) is a full-employment program for antitrust lawyers both inside the DoJ and elsewhere. The Microsoft case generated work for thousands of lawyers for the more than five years it took to reach a conclusion. As a number of experts have pointed out since the Google case was filed, it also ended with a negotiated settlement and a series of fairly modest restrictions on Microsoft’s conduct, a deal the Justice Department was forced to reach after its proposed remedy — breaking the company into two parts -- was rejected by the courts. That said, however, some tech veterans believe the case was successful despite its weak conclusion, because it tied Microsoft up in legal knots, and made the company hyper-sensitive to criticism, and therefore leery of being too aggressive. (This actually helped the rise of Google.)
Those who subscribe to the theory that the case was rushed to make Trump look good point to reports before the indictment’s release that suggested Barr was pressuring the DoJ to launch the case before the election, and that some members of the staff had balked, saying it wasn’t ready. Barry Lynn, executive director of the Open Markets Institute, doesn’t buy this theory: he told CJR during a discussion on our Galley platform Wednesday that “it’s actually a very strong case, and a well-written case. So this was anything but a rush job”. Zephyr Teachout, a professor of law at Fordham University and a former Democratic candidate for governor of New York, said in a similar discussion that while she believes Barr “should be impeached, and I don’t trust him for a second”, the case is well-grounded, and should have been brought years ago. Both Lynn and Teachout said that despite the appearance of political divisions in the House report that preceded the Google case, there is more agreement than disagreement about the necessity for regulation.
Google, unsurprisingly, disagrees. In a blog post, the company called the Justice Department’s case “deeply flawed”. Google said the money it pays Apple -- estimated by the DoJ at between $8 billion and $12 billion a year — to make its search engine the default choice is similar to the way cereal makers pay grocery chains for preferred locations on their store shelves. It’s an appealing analogy, but as antitrust expert Gary Reback noted, “It’s not just Google has a better shelf and its competitor is on the next shelf, it’s that Google has all the shelves and its competitor is in a different store in a bad neighborhood 400 miles away”. Analogies aside, Google and its defenders argue that the case is doomed to fail because the company provides its services for free, and people freely choose to use its search engine. Antitrust law for the past 40 years or so has been based around the concept of consumer harm, and it’s difficult to see how Google’s free services harm consumers in any tangible way.
In order to win their case, in other words, the government has to either convince the courts to ignore several decades of judicial precedent, or come up with a novel definition of consumer harm that covers what Google does. The closest it can probably get are the deals that the company makes with phone makers, where it forces them to install all of Google’s apps if they want to use its free Android operating system. But even that makes smartphones significantly cheaper than they otherwise would be, which looks a lot like a win for consumers, and therefore a tough argument for traditional antitrust. That’s a fairly slim branch to be hanging a landmark case on. But if experts are right about the lessons of the Microsoft case, it might be enough to just tie Google up for awhile, and make it less aggressive. And then we might see new competitors emerge in the same way Google itself did 25 years ago.
https://www.cjr.org/the_media_today/the-google-case-is-a-stew-of-technology-law-and-politics.php
Excerpt:
Recently the House subcommittee on antitrust released a 400-plus page report detailing the anti-competitive practices of the four major digital platforms — Google, Amazon, Apple, and Facebook — and called for the Department of Justice (among others) to take action. And this week, the government did exactly that, filing a landmark antitrust case against Google, one the DoJ has reportedly been working on for some time. Depending on whom you ask, it is either a cravenly political gambit by Attorney General Bill Barr designed to make the Trump administration look tough, a legal quagmire that is significantly weaker than the 1998 Microsoft case and almost certain to fail, or a sign that the government is finally taking strong action to correct some of the blatant antitrust failures of the past two decades. It’s even possible that it may be all three of those things simultaneously.
What it is almost certain to be if it survives the election (and there’s good reason to believe it will continue even if Joe Biden becomes president) is a full-employment program for antitrust lawyers both inside the DoJ and elsewhere. The Microsoft case generated work for thousands of lawyers for the more than five years it took to reach a conclusion. As a number of experts have pointed out since the Google case was filed, it also ended with a negotiated settlement and a series of fairly modest restrictions on Microsoft’s conduct, a deal the Justice Department was forced to reach after its proposed remedy — breaking the company into two parts -- was rejected by the courts. That said, however, some tech veterans believe the case was successful despite its weak conclusion, because it tied Microsoft up in legal knots, and made the company hyper-sensitive to criticism, and therefore leery of being too aggressive. (This actually helped the rise of Google.)
Those who subscribe to the theory that the case was rushed to make Trump look good point to reports before the indictment’s release that suggested Barr was pressuring the DoJ to launch the case before the election, and that some members of the staff had balked, saying it wasn’t ready. Barry Lynn, executive director of the Open Markets Institute, doesn’t buy this theory: he told CJR during a discussion on our Galley platform Wednesday that “it’s actually a very strong case, and a well-written case. So this was anything but a rush job”. Zephyr Teachout, a professor of law at Fordham University and a former Democratic candidate for governor of New York, said in a similar discussion that while she believes Barr “should be impeached, and I don’t trust him for a second”, the case is well-grounded, and should have been brought years ago. Both Lynn and Teachout said that despite the appearance of political divisions in the House report that preceded the Google case, there is more agreement than disagreement about the necessity for regulation.
Google, unsurprisingly, disagrees. In a blog post, the company called the Justice Department’s case “deeply flawed”. Google said the money it pays Apple -- estimated by the DoJ at between $8 billion and $12 billion a year — to make its search engine the default choice is similar to the way cereal makers pay grocery chains for preferred locations on their store shelves. It’s an appealing analogy, but as antitrust expert Gary Reback noted, “It’s not just Google has a better shelf and its competitor is on the next shelf, it’s that Google has all the shelves and its competitor is in a different store in a bad neighborhood 400 miles away”. Analogies aside, Google and its defenders argue that the case is doomed to fail because the company provides its services for free, and people freely choose to use its search engine. Antitrust law for the past 40 years or so has been based around the concept of consumer harm, and it’s difficult to see how Google’s free services harm consumers in any tangible way.
In order to win their case, in other words, the government has to either convince the courts to ignore several decades of judicial precedent, or come up with a novel definition of consumer harm that covers what Google does. The closest it can probably get are the deals that the company makes with phone makers, where it forces them to install all of Google’s apps if they want to use its free Android operating system. But even that makes smartphones significantly cheaper than they otherwise would be, which looks a lot like a win for consumers, and therefore a tough argument for traditional antitrust. That’s a fairly slim branch to be hanging a landmark case on. But if experts are right about the lessons of the Microsoft case, it might be enough to just tie Google up for awhile, and make it less aggressive. And then we might see new competitors emerge in the same way Google itself did 25 years ago.
https://www.cjr.org/the_media_today/the-google-case-is-a-stew-of-technology-law-and-politics.php
Antitrust v. Regulation (NYT)
“The mechanism of antitrust is not working to protect competition,” said Fiona Scott Morton, an official in the Justice Department’s antitrust division in the Obama administration, who is an economist at the Yale University School of Management. “So let’s do something else — use a different tool.”
Ms. Scott Morton led an expert panel on antitrust in a report last year on digital platforms by the Stigler Center at the University of Chicago’s Booth School of Business. The report recommended the creation of a regulatory authority. (Ms. Scott Morton has been a forceful critic of Google, but also a consultant to Apple and Amazon.)
Such a regulatory approach carries the risk of government’s meddling in a fast-moving industry that could hobble innovation, some antitrust experts warned. While antitrust law reacts to alleged anticompetitive behavior and can thus be slow, that shortcoming is preferable to prescriptive government rules and regulations, they said.
“I’m very uncomfortable with the regulatory path, especially if it means things like getting government approval for product changes,” said Herbert Hovenkamp, a professor at the University of Pennsylvania Law School. “The history of regulation shows that it is an innovation killer.”
From https://www.nytimes.com/2020/10/22/technology/antitrust-laws-tech-new-regulator.html
“The mechanism of antitrust is not working to protect competition,” said Fiona Scott Morton, an official in the Justice Department’s antitrust division in the Obama administration, who is an economist at the Yale University School of Management. “So let’s do something else — use a different tool.”
Ms. Scott Morton led an expert panel on antitrust in a report last year on digital platforms by the Stigler Center at the University of Chicago’s Booth School of Business. The report recommended the creation of a regulatory authority. (Ms. Scott Morton has been a forceful critic of Google, but also a consultant to Apple and Amazon.)
Such a regulatory approach carries the risk of government’s meddling in a fast-moving industry that could hobble innovation, some antitrust experts warned. While antitrust law reacts to alleged anticompetitive behavior and can thus be slow, that shortcoming is preferable to prescriptive government rules and regulations, they said.
“I’m very uncomfortable with the regulatory path, especially if it means things like getting government approval for product changes,” said Herbert Hovenkamp, a professor at the University of Pennsylvania Law School. “The history of regulation shows that it is an innovation killer.”
From https://www.nytimes.com/2020/10/22/technology/antitrust-laws-tech-new-regulator.html
The Babylon Bee on electronic money security risks
Recently President Trump was widely ridiculed when he retweeted a satirical news article from the conservative-leaning Babylon Bee humor site, which suggested that Twitter shut down its “entire network” to slow the spread of a contested New York Post story about Hunter Biden.
A characteristic of effective satire is often that it has some recognizable if distorted relationship to reality. It’s like a carnival distortion mirror.
The Babylon Bee recently published an extraordinarily long-winded tongue-in-cheek joke article about how elimination of paper money and reliance on electronic money will give the government intrusive access into everyone's finances. The Bee’s joke is to suggest that there is a conspiracy led by Nancy Pelosi to do that. The long-windedness and tedious detail of the article seems to be part of the joke.
The idea of a Pelosi led conspiracy against paper money is obviously a joke. But the idea that there is likely to be greater reliance on electronic money in the future is not a joke, nor is the idea that broad use of electronic money potentially gives government intrusive access into people’s financial affairs. To paraphrase the once-famous words of Molly McGee to husband Fibber McGee, it’s not funny.
On point, the Economist has an article about a Chinese fintech firm, Ant, that suggests something of the potential for government intrusion based on electronic money, although the focus is on China. The idea is that the ubiquity of electronic money gives companies and potentially the government invasive access to everyone's finances.
It may be a little weird that the Bee and the Economist have parallel ideas about potential government intrusion facilitated by electronic money, but the concern about privacy invasion seems real. And, of course, concerns about intrusive behavior by the Chinese government hold out the possibility that a U.S. government could go down the same path.
Here is an excerpt from The Economist article about the fintech firm Ant (emphasis added):
Digitisation also promises to broaden the spread of finance. Reaching customers will be easier and data will make loan underwriting more accurate. Firms like Square and Stripe help small businesses connect to the digital economy. In India and Africa digital finance can free people from dodgy moneylenders and decrepit banks. By creating their own digital currencies, governments may be able to bypass the conventional banking system and tax, take deposits from, and make payments to citizens at the touch of a button. Compare that with the palaver of Uncle Sam posting stimulus cheques this year.
Yet the fintech conquest also brings two risks. The first is that it could destabilise the financial system. Fintech firms swarm to the most profitable parts of the industry, often leaving less profit and most of the risk with traditional lenders. Fully 98% of loans issued through Ant in China ultimately sit on the books of banks, which pay it a fee. Ant is eventually expected to capture a tenth or more of Chinese banking’s profits. Lumbering lenders in the rich world are already crushed by low interest rates, legacy it systems and huge compliance costs. If they are destabilised it could spell trouble, because banks still perform crucial economic functions, including holding people’s deposits and transforming these short-term liabilities into long-term loans for others.
The second danger is that the state and fintech “platform” firms could grab more power from individuals. Network effects are integral to the fintech model—the more people use a platform the more useful it is and likely that others feel drawn to it. So the industry is prone towards monopoly. And if fintech gives even more data to governments and platforms, the potential for surveillance, manipulation and cyber-hacks will rise. In China Ant is a cog in the Communist Party’s apparatus of control—one reason it is often unwelcome abroad. When Facebook, a firm not known for its ethical conduct, launched a digital currency, Libra, last year, it caused a global backlash.
As the fintech surge continues, governments should take a holistic view of financial risk that includes banks and fintech firms—Chinese regulators rightly snuffed out Ant’s booming business in loan securitisation, which had echoes of the subprime fiasco. Governments should also lower barriers to entry so as to boost competition. Singapore and India have cheap, open, bank-to-bank payment systems which America could learn from. Europe has flexible banking that lets customers switch accounts easily. Last, the rise of fintech must be tied to a renewed effort to protect people’s privacy from giant companies and the state. So long as fintech can be made safer, open and respectful of individual rights, then a monetary innovation led by China will once again change the world for the better.
Recently President Trump was widely ridiculed when he retweeted a satirical news article from the conservative-leaning Babylon Bee humor site, which suggested that Twitter shut down its “entire network” to slow the spread of a contested New York Post story about Hunter Biden.
A characteristic of effective satire is often that it has some recognizable if distorted relationship to reality. It’s like a carnival distortion mirror.
The Babylon Bee recently published an extraordinarily long-winded tongue-in-cheek joke article about how elimination of paper money and reliance on electronic money will give the government intrusive access into everyone's finances. The Bee’s joke is to suggest that there is a conspiracy led by Nancy Pelosi to do that. The long-windedness and tedious detail of the article seems to be part of the joke.
The idea of a Pelosi led conspiracy against paper money is obviously a joke. But the idea that there is likely to be greater reliance on electronic money in the future is not a joke, nor is the idea that broad use of electronic money potentially gives government intrusive access into people’s financial affairs. To paraphrase the once-famous words of Molly McGee to husband Fibber McGee, it’s not funny.
On point, the Economist has an article about a Chinese fintech firm, Ant, that suggests something of the potential for government intrusion based on electronic money, although the focus is on China. The idea is that the ubiquity of electronic money gives companies and potentially the government invasive access to everyone's finances.
It may be a little weird that the Bee and the Economist have parallel ideas about potential government intrusion facilitated by electronic money, but the concern about privacy invasion seems real. And, of course, concerns about intrusive behavior by the Chinese government hold out the possibility that a U.S. government could go down the same path.
Here is an excerpt from The Economist article about the fintech firm Ant (emphasis added):
Digitisation also promises to broaden the spread of finance. Reaching customers will be easier and data will make loan underwriting more accurate. Firms like Square and Stripe help small businesses connect to the digital economy. In India and Africa digital finance can free people from dodgy moneylenders and decrepit banks. By creating their own digital currencies, governments may be able to bypass the conventional banking system and tax, take deposits from, and make payments to citizens at the touch of a button. Compare that with the palaver of Uncle Sam posting stimulus cheques this year.
Yet the fintech conquest also brings two risks. The first is that it could destabilise the financial system. Fintech firms swarm to the most profitable parts of the industry, often leaving less profit and most of the risk with traditional lenders. Fully 98% of loans issued through Ant in China ultimately sit on the books of banks, which pay it a fee. Ant is eventually expected to capture a tenth or more of Chinese banking’s profits. Lumbering lenders in the rich world are already crushed by low interest rates, legacy it systems and huge compliance costs. If they are destabilised it could spell trouble, because banks still perform crucial economic functions, including holding people’s deposits and transforming these short-term liabilities into long-term loans for others.
The second danger is that the state and fintech “platform” firms could grab more power from individuals. Network effects are integral to the fintech model—the more people use a platform the more useful it is and likely that others feel drawn to it. So the industry is prone towards monopoly. And if fintech gives even more data to governments and platforms, the potential for surveillance, manipulation and cyber-hacks will rise. In China Ant is a cog in the Communist Party’s apparatus of control—one reason it is often unwelcome abroad. When Facebook, a firm not known for its ethical conduct, launched a digital currency, Libra, last year, it caused a global backlash.
As the fintech surge continues, governments should take a holistic view of financial risk that includes banks and fintech firms—Chinese regulators rightly snuffed out Ant’s booming business in loan securitisation, which had echoes of the subprime fiasco. Governments should also lower barriers to entry so as to boost competition. Singapore and India have cheap, open, bank-to-bank payment systems which America could learn from. Europe has flexible banking that lets customers switch accounts easily. Last, the rise of fintech must be tied to a renewed effort to protect people’s privacy from giant companies and the state. So long as fintech can be made safer, open and respectful of individual rights, then a monetary innovation led by China will once again change the world for the better.
DOJ To File Google Antitrust Suit Without Dem Support
-
October 18, 2020
The US Department of Justice is reportedly likely to file its highly-anticipated antitrust suit against Google early next week without the support of any Democratic state attorneys general.
The first major monopolization case in decades comes as both sides of the aisle have hammered Google and other tech companies like Facebook and Amazon about their influence over the US economy.
According to Politico, the Trump administration had hoped to enlist bipartisan support for its case.
For months, the Justice Department has been negotiating with a group of attorneys general from 48 states, the District of Columbia, and Puerto Rico — who have conducted separate investigations, hoping to form a unified complaint over the world’s largest search engine, Politico reported.
Republican attorneys general have joined both the Justice Department and a coalition of their Democratic colleagues, sources familiar with the suit told Politico.
The bipartisan group — led by Democratic attorneys general in Colorado and Iowa along with Nebraska’s Republican attorney general — expects to file an antitrust complaint challenging Google at a later date.
-
October 18, 2020
The US Department of Justice is reportedly likely to file its highly-anticipated antitrust suit against Google early next week without the support of any Democratic state attorneys general.
The first major monopolization case in decades comes as both sides of the aisle have hammered Google and other tech companies like Facebook and Amazon about their influence over the US economy.
According to Politico, the Trump administration had hoped to enlist bipartisan support for its case.
For months, the Justice Department has been negotiating with a group of attorneys general from 48 states, the District of Columbia, and Puerto Rico — who have conducted separate investigations, hoping to form a unified complaint over the world’s largest search engine, Politico reported.
Republican attorneys general have joined both the Justice Department and a coalition of their Democratic colleagues, sources familiar with the suit told Politico.
The bipartisan group — led by Democratic attorneys general in Colorado and Iowa along with Nebraska’s Republican attorney general — expects to file an antitrust complaint challenging Google at a later date.
DOJ Adds Six New Defendants to Price-Fixing Boiler Chicken Conspiracy
by Michael Volkov · October 13, 2020
The Justice Department announced a major expansion of its ongoing investigation and prosecution of executives and employees in the boiler chicken price-fixing conspiracy. https://www.justice.gov/opa/pr/six-additional-individuals-indicted-antitrust-charges-ongoing-broiler-chicken-investigation
DOJ recently returned a superseding indictment adding six new defendants to the boiler chicken conspiracy indictment, and expanding the scope of the charged conspiracy. (Here for earlier Posting on conspiracy).
The new indictment charges ten (10) executives and employees at boiler chicken producers for their role in a conspiracy to fix prices and rig bids for chicken products. The six additional individuals are Timothy Mulrenin, William Kantola, Jimmie Little, William Lovette, Gary Roberts and Rickie Blake.
The new indictment adds six defendants to the price-fixing conspiracy in the $65 billion poultry industry. In addition, the new indictment expands the period of the charged conspiracy to 2012 to 2019.
The new defendants include Bill Lovette, the former CEO of Pilgrim’s Pride, the second largest US chicken supplier. Jason Penn, Pilgrim’s current CEO, was charged in the original indictment in June. Pilgrim’s Vice President Roger Austin and Claxton’s President Mikell Fries and Scott Brady, a President, were also charged in the original June 2020 indictment.
The new defendants include executives and employees from companies involved in the price-fixing conspiracy: Timothy Mulrenin is a sales executive at Perdue Farms, who previously worked at Tyson; William Kantola is a sales executive at Koch Foods, Inc.; Jimmie Little is former sales director at Pilgrim’s Pride; Gary Brian Roberts is an employee at Case Farms who previously worked at Tyson; and Rickie Blake, a former director and manager at George’s Inc. Jimmie Little is also charged with making false statements to law enforcement agents and obstruction of justice.
The price-fixing conspiracy operated in the chicken industry responsible for supplying billions of pounds of chicken nuggets, breast filets, thighs and wings to US restaurant chains and grocery stores.
The six additional defendants join four senior industry executives from Pilgrim’s Pride and Claxton Poultry Farms who were allegedly engaged in a long-running conspiracy to exchange pricing information and agree on bids submitted for chicken supply deals for major restaurant chains.
Tyson Foods was one of the earliest cooperators in the government investigation and reported the conspiracy after DOJ initiated an investigation in response to a then-pending civil proceeding. Tyson is cooperating under DOJ’s antitrust criminal leniency program.
DOJ’s criminal investigation began in 2019 after it intervened in a price-fixing lawsuit filed in 2016. The class action lawsuit accuses chicken producers, including Pilgrim’s Pride, Perdue Farms, Tyson Foods and Sanderson Farms, of engaging in conspiracy to fix and increase chicken prices.
The new indictment details incidents where the defendants communicated with each other and discussed pricing information and agreed on responses to negotiations with chicken customers.
If convicted, each defendant faces a maximum term of imprisonment of ten (10) years imprisonment and a fine of $1 million.
https://blog.volkovlaw.com/2020/10/doj-adds-six-new-defendants-to-price-fixing-boiler-chicken-conspiracy/
by Michael Volkov · October 13, 2020
The Justice Department announced a major expansion of its ongoing investigation and prosecution of executives and employees in the boiler chicken price-fixing conspiracy. https://www.justice.gov/opa/pr/six-additional-individuals-indicted-antitrust-charges-ongoing-broiler-chicken-investigation
DOJ recently returned a superseding indictment adding six new defendants to the boiler chicken conspiracy indictment, and expanding the scope of the charged conspiracy. (Here for earlier Posting on conspiracy).
The new indictment charges ten (10) executives and employees at boiler chicken producers for their role in a conspiracy to fix prices and rig bids for chicken products. The six additional individuals are Timothy Mulrenin, William Kantola, Jimmie Little, William Lovette, Gary Roberts and Rickie Blake.
The new indictment adds six defendants to the price-fixing conspiracy in the $65 billion poultry industry. In addition, the new indictment expands the period of the charged conspiracy to 2012 to 2019.
The new defendants include Bill Lovette, the former CEO of Pilgrim’s Pride, the second largest US chicken supplier. Jason Penn, Pilgrim’s current CEO, was charged in the original indictment in June. Pilgrim’s Vice President Roger Austin and Claxton’s President Mikell Fries and Scott Brady, a President, were also charged in the original June 2020 indictment.
The new defendants include executives and employees from companies involved in the price-fixing conspiracy: Timothy Mulrenin is a sales executive at Perdue Farms, who previously worked at Tyson; William Kantola is a sales executive at Koch Foods, Inc.; Jimmie Little is former sales director at Pilgrim’s Pride; Gary Brian Roberts is an employee at Case Farms who previously worked at Tyson; and Rickie Blake, a former director and manager at George’s Inc. Jimmie Little is also charged with making false statements to law enforcement agents and obstruction of justice.
The price-fixing conspiracy operated in the chicken industry responsible for supplying billions of pounds of chicken nuggets, breast filets, thighs and wings to US restaurant chains and grocery stores.
The six additional defendants join four senior industry executives from Pilgrim’s Pride and Claxton Poultry Farms who were allegedly engaged in a long-running conspiracy to exchange pricing information and agree on bids submitted for chicken supply deals for major restaurant chains.
Tyson Foods was one of the earliest cooperators in the government investigation and reported the conspiracy after DOJ initiated an investigation in response to a then-pending civil proceeding. Tyson is cooperating under DOJ’s antitrust criminal leniency program.
DOJ’s criminal investigation began in 2019 after it intervened in a price-fixing lawsuit filed in 2016. The class action lawsuit accuses chicken producers, including Pilgrim’s Pride, Perdue Farms, Tyson Foods and Sanderson Farms, of engaging in conspiracy to fix and increase chicken prices.
The new indictment details incidents where the defendants communicated with each other and discussed pricing information and agreed on responses to negotiations with chicken customers.
If convicted, each defendant faces a maximum term of imprisonment of ten (10) years imprisonment and a fine of $1 million.
https://blog.volkovlaw.com/2020/10/doj-adds-six-new-defendants-to-price-fixing-boiler-chicken-conspiracy/
DAR Comment on the news about the antibody treatment that apparently worked well for President Trump:
The therapy is very promising. Availability is sharply limited. Regeneron has applied for emergency FDA authorization for the product. Astrazenica and others will follow.
Regeneron's stock has risen based on the success of its antibody therapy. 80% of the the cost of develop reportedly was carried by the US government.
It is a puzzle why the therapy is not widely and cheaply available.
More detail follows:
The therapy is very promising. Availability is sharply limited. Regeneron has applied for emergency FDA authorization for the product. Astrazenica and others will follow.
Regeneron's stock has risen based on the success of its antibody therapy. 80% of the the cost of develop reportedly was carried by the US government.
It is a puzzle why the therapy is not widely and cheaply available.
More detail follows:
Gottlieb: antibody drugs are good, but not widely available
Dr. Scott Gottlieb told CNBC on Friday that antibody drugs are likely to be important treatments for the coronavirus, but he cautioned against considering them a panacea for the nation’s Covid-19 outbreak.
The former U.S. Food and Drug Administration commissioner said the lack of supply means not every person who becomes diagnosed with the coronavirus will be able to receive an antibody treatment — should the FDA grant emergency use authorization to the two companies that recently applied.
“I think these drugs will make a meaningful difference for people who are the highest risk of having a bad outcome,” Gottlieb said on “Closing Bell.” “But this is not going to end the epidemic. This is not going to be widely available to everyone,” he added.
Priority would probably be given to Covid-19 patients who are over the age of 65, given they are more likely to become severely ill or die, according to Gottlieb.
People who have significant underlying medical conditions also would be higher on the list of patients to receive an antibody treatment, he said.
“We’re not going to have this available in the kind of volumes where you’d want to give it to everyone who is at risk and maybe even as a prophylaxis for people who are at high risk of contracting the infection like people in nursing homes, front-line health-care providers, front-line workers.” he said.
Dr. Scott Gottlieb told CNBC on Friday that antibody drugs are likely to be important treatments for the coronavirus, but he cautioned against considering them a panacea for the nation’s Covid-19 outbreak.
The former U.S. Food and Drug Administration commissioner said the lack of supply means not every person who becomes diagnosed with the coronavirus will be able to receive an antibody treatment — should the FDA grant emergency use authorization to the two companies that recently applied.
“I think these drugs will make a meaningful difference for people who are the highest risk of having a bad outcome,” Gottlieb said on “Closing Bell.” “But this is not going to end the epidemic. This is not going to be widely available to everyone,” he added.
Priority would probably be given to Covid-19 patients who are over the age of 65, given they are more likely to become severely ill or die, according to Gottlieb.
People who have significant underlying medical conditions also would be higher on the list of patients to receive an antibody treatment, he said.
“We’re not going to have this available in the kind of volumes where you’d want to give it to everyone who is at risk and maybe even as a prophylaxis for people who are at high risk of contracting the infection like people in nursing homes, front-line health-care providers, front-line workers.” he said.
The U.S. government has awarded $486 million to AstraZeneca Plc to develop and secure supplies of up to 100,000 doses of Covid-19 antibody treatment
This is similar to the antibody drug that was used in treating President Donald Trump.
The agreement, under the Trump administration’s Operation Warp Speed, is for developing a monoclonal antibody cocktail that can prevent Covid-19, especially in high-risk population like those over 80 years old, the U.S. Department of Health and Human Services said.
The treatment has come under the spotlight after Trump was treated with Regeneron Pharmaceuticals’ antibody drug last week. The president has also released a video on Twitter touting its benefits.
In a call earlier on Friday, a top U.S. health official said the government was expecting to provide more than 1 million free doses of antibody treatments to Covid-19 patients, similar to the one that was administered to Trump.
Regeneron and Eli Lilly have both applied to the U.S. Food and Drug Administration for emergency use authorizations of their antibody treatments.
AstraZeneca said it was planning to supply up to 100,000 doses starting toward the end of 2020 and that the U.S. government could acquire up to an additional one million doses in 2021 under a separate agreement.
Regeneron signed a $450 million deal in July to sell Operation Warp Speed enough doses of its antibody treatment, REGN-COV2, to treat around 300,000 people.
Eli Lilly said on Friday it had not signed an agreement with Operation Warp Speed.
AstraZeneca plans to evaluate the treatment, AZD7442, which is a cocktail of two monoclonal antibodies, in two studies.
One trial will evaluate the safety and efficacy of the experimental treatment to prevent infection for up to 12 months in about 5,000 participants, while the second will evaluate post-exposure preventative and pre-emptive treatment in roughly 1,100 participants.
https://www.cnbc.com/2020/10/12/us-astrazeneca-strike-deal-for-covid-19-antibody-treatment.html
This is similar to the antibody drug that was used in treating President Donald Trump.
The agreement, under the Trump administration’s Operation Warp Speed, is for developing a monoclonal antibody cocktail that can prevent Covid-19, especially in high-risk population like those over 80 years old, the U.S. Department of Health and Human Services said.
The treatment has come under the spotlight after Trump was treated with Regeneron Pharmaceuticals’ antibody drug last week. The president has also released a video on Twitter touting its benefits.
In a call earlier on Friday, a top U.S. health official said the government was expecting to provide more than 1 million free doses of antibody treatments to Covid-19 patients, similar to the one that was administered to Trump.
Regeneron and Eli Lilly have both applied to the U.S. Food and Drug Administration for emergency use authorizations of their antibody treatments.
AstraZeneca said it was planning to supply up to 100,000 doses starting toward the end of 2020 and that the U.S. government could acquire up to an additional one million doses in 2021 under a separate agreement.
Regeneron signed a $450 million deal in July to sell Operation Warp Speed enough doses of its antibody treatment, REGN-COV2, to treat around 300,000 people.
Eli Lilly said on Friday it had not signed an agreement with Operation Warp Speed.
AstraZeneca plans to evaluate the treatment, AZD7442, which is a cocktail of two monoclonal antibodies, in two studies.
One trial will evaluate the safety and efficacy of the experimental treatment to prevent infection for up to 12 months in about 5,000 participants, while the second will evaluate post-exposure preventative and pre-emptive treatment in roughly 1,100 participants.
https://www.cnbc.com/2020/10/12/us-astrazeneca-strike-deal-for-covid-19-antibody-treatment.html
Regeneron’s stock price rose after the company submitted an “emergency use authorization” request to the U.S. Food and Drug Administration for its Covid-19 antibody treatment.
Its REGN-COV2 monoclonal antibody coronavirus therapy is what President Donald Trump took last week after being diagnosed with Covid-19. He has since described it as a “cure” even though there’s no such scientific proof.
The biotech company published a statement Wednesday noting that “if an EUA is granted the government has committed to making these doses available to the American people at no cost and would be responsible for their distribution.”
At this time, there are doses available for approximately 50,000 patients, Regeneron said, “and we expect to have doses available for 300,000 patients in total within the next few months.”
REGN-COV2 is a combination of two monoclonal antibodies and was “designed specifically to block infectivity” of the virus (SARS-CoV-2) that causes Covid-19.
Trump was given an 8 gram dose of the antibody cocktail early in the course of his Covid-19 infection, despite it not being authorized by the FDA.
https://www.cnbc.com/2020/10/08/regeneron-requests-eua-from-the-fda-for-coronavirus-treatment.html
Its REGN-COV2 monoclonal antibody coronavirus therapy is what President Donald Trump took last week after being diagnosed with Covid-19. He has since described it as a “cure” even though there’s no such scientific proof.
The biotech company published a statement Wednesday noting that “if an EUA is granted the government has committed to making these doses available to the American people at no cost and would be responsible for their distribution.”
At this time, there are doses available for approximately 50,000 patients, Regeneron said, “and we expect to have doses available for 300,000 patients in total within the next few months.”
REGN-COV2 is a combination of two monoclonal antibodies and was “designed specifically to block infectivity” of the virus (SARS-CoV-2) that causes Covid-19.
Trump was given an 8 gram dose of the antibody cocktail early in the course of his Covid-19 infection, despite it not being authorized by the FDA.
https://www.cnbc.com/2020/10/08/regeneron-requests-eua-from-the-fda-for-coronavirus-treatment.html
Taxpayers are subsidizing 80 percent of Regeneron’s COVID-19 treatment’s R&D costs
Posted on October 8, 2020 by Kathryn Ardizzone https://www.keionline.org/author/kathryn-ardizzone
See: https://www.keionline.org/34126
Regeneron Pharmaceutical recently applied for Emergency Use Authorization of its investigational COVID-19 treatment, REGN-COV2, after Donald Trump said that it cured him of COVID-19, suggesting that Regeneron expects to cash in on the treatment. Taxpayers, however, are funding 80 percent of the costs of developing REGN-COV2.
Regeneron’s May 5, 2020 SEC filing [https://www.sec.gov/Archives/edgar/data/872589/000180422020000011/regn-033120x10q.htm] states as follows (emphasis added):
We are using our end-to-end antibody technologies to discover and develop brand new therapeutic antibodies for COVID-19. The Company is advancing REGN-COV2, a novel investigational antibody “cocktail” treatment designed to prevent and treat infection from the SARS-CoV-2 virus. In April, the Company moved its leading neutralizing antibodies into pre-clinical and clinical-scale cell production lines and plans to have supply available for clinical studies, which are expected to begin in June 2020.
The Company is also working to rapidly scale-up manufacturing.The Company also announced an expansion of its Other Transaction Agreement (“OTA”) with BARDA, pursuant to which HHS is obligated to fund 80% of our costs incurred for certain research and development activities related to COVID-19 treatments.
Regeneron should open license the IP rights, data, know-how, and cell lines necessary to manufacture the COVID-19 treatment to the World Health Organization COVID-19 Technology Access Pool (C-TAP), a global framework for the voluntary licensing of rights in COVID-19 medical technologies. A deep technology transfer to C-TAP, i.e., one that enables other qualified companies to manufacture the licensed technologies, is the best way to ensure that any treatment or vaccine deemed safe and effective is distributed as widely and quickly as possible.
Posted on October 8, 2020 by Kathryn Ardizzone https://www.keionline.org/author/kathryn-ardizzone
See: https://www.keionline.org/34126
Regeneron Pharmaceutical recently applied for Emergency Use Authorization of its investigational COVID-19 treatment, REGN-COV2, after Donald Trump said that it cured him of COVID-19, suggesting that Regeneron expects to cash in on the treatment. Taxpayers, however, are funding 80 percent of the costs of developing REGN-COV2.
Regeneron’s May 5, 2020 SEC filing [https://www.sec.gov/Archives/edgar/data/872589/000180422020000011/regn-033120x10q.htm] states as follows (emphasis added):
We are using our end-to-end antibody technologies to discover and develop brand new therapeutic antibodies for COVID-19. The Company is advancing REGN-COV2, a novel investigational antibody “cocktail” treatment designed to prevent and treat infection from the SARS-CoV-2 virus. In April, the Company moved its leading neutralizing antibodies into pre-clinical and clinical-scale cell production lines and plans to have supply available for clinical studies, which are expected to begin in June 2020.
The Company is also working to rapidly scale-up manufacturing.The Company also announced an expansion of its Other Transaction Agreement (“OTA”) with BARDA, pursuant to which HHS is obligated to fund 80% of our costs incurred for certain research and development activities related to COVID-19 treatments.
Regeneron should open license the IP rights, data, know-how, and cell lines necessary to manufacture the COVID-19 treatment to the World Health Organization COVID-19 Technology Access Pool (C-TAP), a global framework for the voluntary licensing of rights in COVID-19 medical technologies. A deep technology transfer to C-TAP, i.e., one that enables other qualified companies to manufacture the licensed technologies, is the best way to ensure that any treatment or vaccine deemed safe and effective is distributed as widely and quickly as possible.
Regeneron conference call and press release on its COVID-19 antibody cocktail
Regeneron COVID-19 Conference call
https://edge.media-server.com/mmc/p/bgwc5r8v
Regeneron 9-29-20 press release:
https://investor.regeneron.com/news-releases/news-release-details/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and
FROM THE PRESS RELEASE:
September 29, 2020 at 4:01 PM EDT
REGENERON'S REGN-COV2 ANTIBODY COCKTAIL REDUCED VIRAL LEVELS AND IMPROVED SYMPTOMS IN NON-HOSPITALIZED COVID-19 PATIENTSTARRYTOWN, N.Y., Sept. 29, 2020 /PRNewswire/ --
Greatest improvements in patients who had not mounted their own effective immune response prior to treatment
Plan rapidly to discuss results with regulatory authorities
Regeneron to host investor and media webcast to discuss results at 4:30 pm ET today
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced the first data from a descriptive analysis of a seamless Phase 1/2/3 trial of its investigational antibody cocktail REGN-COV2 showing it reduced viral load and the time to alleviate symptoms in non-hospitalized patients with COVID-19. REGN-COV2 also showed positive trends in reducing medical visits. The ongoing, randomized, double-blind trial measures the effect of adding REGN-COV2 to usual standard-of-care, compared to adding placebo to standard-of-care.
This trial is part of a larger program that also includes studies of REGN-COV2 for the treatment of hospitalized patients, and for prevention of infection in people who have been exposed to COVID-19 patients.
"After months of incredibly hard work by our talented team, we are extremely gratified to see that Regeneron's antibody cocktail REGN-COV2 rapidly reduced viral load and associated symptoms in infected COVID-19 patients," said George D. Yancopoulos, M.D., Ph.D., President and Chief Scientific Officer of Regeneron. "The greatest treatment benefit was in patients who had not mounted their own effective immune response, suggesting that REGN-COV2 could provide a therapeutic substitute for the naturally-occurring immune response. These patients were less likely to clear the virus on their own, and were at greater risk for prolonged symptoms. We are highly encouraged by the robust and consistent nature of these initial data, as well as the emerging well-tolerated safety profile, and we have begun discussing our findings with regulatory authorities while continuing our ongoing trials. In addition to having positive implications for REGN-COV2 trials and those of other antibody therapies, these data also support the promise of vaccines targeting the SARS-CoV-2 spike protein."
The descriptive analysis included the first 275 patients enrolled in the trial and was designed to evaluate anti-viral activity with REGN-COV2 and identify patients most likely to benefit from treatment; the next cohort, which could be used to rapidly and prospectively confirm these results, has already been enrolled. Patients in the trial were randomized 1:1:1 to receive a one-time infusion of 8 grams of REGN-COV2 (high dose), 2.4 grams of REGN-COV2 (low dose) or placebo. All patients entering the trial had laboratory-confirmed COVID-19 that was being treated in the outpatient setting. Patients were prospectively characterized prior to treatment by serology tests to see if they had already generated antiviral antibodies on their own and were classified as seronegative (no measurable antiviral antibodies) or seropositive (measurable antiviral antibodies). Approximately 45% of patients were seropositive, 41% were seronegative and 14% were categorized as "other" due to unclear or unknown serology status.
Key data findings include:
Note that since this analysis was considered descriptive, all p-values are nominal.
"Thank you to the global investigators, sites and patients who continue to work with us to conduct REGN-COV2 trials, especially given the unique challenges posed by the pandemic," said David Weinreich, M.D., Senior Vice President and Head of Global Clinical Development at Regeneron. "We plan rapidly to submit detailed results from this analysis for publication in order to share insights with the public health and medical communities. Regeneron continues to enroll patients in this trial and all other ongoing late-stage trials evaluating REGN-COV2."
Additional Trial Background
Among the first 275 patients, approximately 56% were Hispanic, 13% were African American and 64% had one or more underlying risk factors for severe COVID-19, including obesity (more than 40%). On average, patients were 44 years of age. In total, 49% of participants were male and 51% were female.
At least 1,300 patients will be recruited into the Phase 2/3 portion of the outpatient trial overall. Patients will be followed for 29 days, with viral shedding in the upper respiratory tract assessed approximately every 2-3 days in the Phase 2 portion of the trial and clinical endpoints assessed via investigator and patient-reported data throughout.
In addition to this trial in non-hospitalized patients, REGN-COV2 is currently being studied in a Phase 2/3 clinical trial for the treatment of COVID-19 in hospitalized patients, the Phase 3 open-label RECOVERY trial of hospitalized patients in the UK and a Phase 3 trial for the prevention of COVID-19 in household contacts of infected individuals. Recruitment in all 4 trials is ongoing.
Investor and Media Webcast Information
Regeneron will host a conference call and simultaneous webcast to share updates on REGN-COV2 today September 29, 2020 at 4:30 pm ET. To access the call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International). A link to the webcast may be accessed from the "Investors and Media" page of Regeneron's website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company's website and will be available for at least 30 days.
About REGN-COV2
REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block infectivity of SARS-CoV-2, the virus that causes COVID-19.
To develop REGN-COV2, Regeneron scientists evaluated thousands of fully-human antibodies produced by the company's VelocImmune® mice, which have been genetically modified to have a human immune system, as well as antibodies identified from humans who have recovered from COVID-19. The two potent, virus-neutralizing antibodies that form REGN-COV2 bind non-competitively to the critical receptor binding domain of the virus's spike protein, which diminishes the ability of mutant viruses to escape treatment and protects against spike variants that have arisen in the human population, as detailed in Science. Preclinical studies have shown that REGN-COV2 reduced the amount of virus and associated damage in the lungs of non-human primates.
REGN-COV2's development and manufacturing has been funded in part with federal funds from the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services under OT number: HHSO100201700020C. Regeneron has recently partnered with Roche to increase the global supply of REGN-COV2. If REGN-COV2 proves safe and effective in clinical trials and regulatory approvals are granted, Regeneron will manufacture and distribute it in the U.S. and Roche will develop, manufacture and distribute it outside the U.S.
About Regeneron [omitted]
For additional information about the company, please visit www.regeneron.com or follow @Regeneron on Twitter.
Forward-Looking Statements and Use of Digital Media [omitted]
Contacts:
Media Relations
Alexandra Bowie
Tel: +1 (914) 847-3407
[email protected]
Investor Relations
Mark Hudson
Tel: +1 (914) 847-3482
[email protected]
View original content:http://www.prnewswire.com/news-releases/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and-improved-symptoms-in-non-hospitalized-covid-19-patients-301140336.html
SOURCE Regeneron Pharmaceuticals, Inc.
Investor Relations
914.847.7741
[email protected]
Media Relations
Regeneron COVID-19 Conference call
https://edge.media-server.com/mmc/p/bgwc5r8v
Regeneron 9-29-20 press release:
https://investor.regeneron.com/news-releases/news-release-details/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and
FROM THE PRESS RELEASE:
September 29, 2020 at 4:01 PM EDT
REGENERON'S REGN-COV2 ANTIBODY COCKTAIL REDUCED VIRAL LEVELS AND IMPROVED SYMPTOMS IN NON-HOSPITALIZED COVID-19 PATIENTSTARRYTOWN, N.Y., Sept. 29, 2020 /PRNewswire/ --
Greatest improvements in patients who had not mounted their own effective immune response prior to treatment
Plan rapidly to discuss results with regulatory authorities
Regeneron to host investor and media webcast to discuss results at 4:30 pm ET today
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced the first data from a descriptive analysis of a seamless Phase 1/2/3 trial of its investigational antibody cocktail REGN-COV2 showing it reduced viral load and the time to alleviate symptoms in non-hospitalized patients with COVID-19. REGN-COV2 also showed positive trends in reducing medical visits. The ongoing, randomized, double-blind trial measures the effect of adding REGN-COV2 to usual standard-of-care, compared to adding placebo to standard-of-care.
This trial is part of a larger program that also includes studies of REGN-COV2 for the treatment of hospitalized patients, and for prevention of infection in people who have been exposed to COVID-19 patients.
"After months of incredibly hard work by our talented team, we are extremely gratified to see that Regeneron's antibody cocktail REGN-COV2 rapidly reduced viral load and associated symptoms in infected COVID-19 patients," said George D. Yancopoulos, M.D., Ph.D., President and Chief Scientific Officer of Regeneron. "The greatest treatment benefit was in patients who had not mounted their own effective immune response, suggesting that REGN-COV2 could provide a therapeutic substitute for the naturally-occurring immune response. These patients were less likely to clear the virus on their own, and were at greater risk for prolonged symptoms. We are highly encouraged by the robust and consistent nature of these initial data, as well as the emerging well-tolerated safety profile, and we have begun discussing our findings with regulatory authorities while continuing our ongoing trials. In addition to having positive implications for REGN-COV2 trials and those of other antibody therapies, these data also support the promise of vaccines targeting the SARS-CoV-2 spike protein."
The descriptive analysis included the first 275 patients enrolled in the trial and was designed to evaluate anti-viral activity with REGN-COV2 and identify patients most likely to benefit from treatment; the next cohort, which could be used to rapidly and prospectively confirm these results, has already been enrolled. Patients in the trial were randomized 1:1:1 to receive a one-time infusion of 8 grams of REGN-COV2 (high dose), 2.4 grams of REGN-COV2 (low dose) or placebo. All patients entering the trial had laboratory-confirmed COVID-19 that was being treated in the outpatient setting. Patients were prospectively characterized prior to treatment by serology tests to see if they had already generated antiviral antibodies on their own and were classified as seronegative (no measurable antiviral antibodies) or seropositive (measurable antiviral antibodies). Approximately 45% of patients were seropositive, 41% were seronegative and 14% were categorized as "other" due to unclear or unknown serology status.
Key data findings include:
Note that since this analysis was considered descriptive, all p-values are nominal.
- As hypothesized, patients in the study consisted of two different populations: those who had already mounted an effective immune response, and those whose immune response was not yet adequate. These populations could be identified serologically by the presence (seropositive) or absence (seronegative) of SARS-CoV-2 antibodies, and/or by high viral loads at baseline.
- Serological status highly correlated with baseline viral load (p<0.0001). Seropositive patients had much lower levels of virus at baseline, and rapidly achieved viral loads approaching lowest levels quantifiable (LLQ), even without treatment. In contrast, seronegative patients had substantially higher viral levels at baseline, and cleared virus more slowly in the absence of treatment.
- Serological status at baseline also predicted how rapidly patients had alleviation of their COVID-19 clinical symptoms. In the untreated (placebo) patients, seropositive patients had a median time to alleviation of symptoms of 7 days, compared to seronegative patients who had a median time to alleviation of symptoms of 13 days.
- REGN-COV2 rapidly reduced viral load through Day 7 in seronegative patients (key virologic endpoint). The mean time-weighted-average change from baseline nasopharyngeal (NP) viral load through Day 7 in the seronegative group was a 0.60 log10 copies/mL greater reduction (p=0.03) in patients treated with high dose, and a 0.51 log10 copies/mL greater reduction (p=0.06) in patients treated with low dose, compared to placebo. In the overall population, there was a 0.51 log10 copies/mL greater reduction (p=0.0049) in patients treated with high dose, and a 0.23 log10 copies/mL greater reduction (p= 0.20) in patients treated with low dose, compared to placebo.
- Patients with increasingly higher baseline viral levels had correspondingly greater reductions in viral load at Day 7 with REGN-COV2 treatment. The mean log10 copies/mL reduction in viral load compared to placebo were as follows:
- Viral load higher than 105 copies/mL: high dose (-0.93); low dose (-0.86) (p=0.03 for both); approximately 50-60% reduction compared to placebo
- Viral load higher than 106 copies/mL: high dose (-1.55); low dose (-1.65) (p<0.002 for both); approximately 95% reduction compared to placebo
- Viral load higher than 107 copies/mL: high dose (-1.79); low dose (-2.00) (p<0.0015 for both); approximately 99% reduction compared to placebo - Patients who were seronegative and/or had higher baseline viral levels also had greater benefits in terms of symptom alleviation. Among seronegative patients, median time to symptom alleviation (defined as symptoms becoming mild or absent) was 13 days in placebo, 8 days in high dose (p=0.22), and 6 days in low dose (p=0.09). Patients with increasing viral loads at baseline had correspondingly increasing benefit in time to symptom alleviation.
- There were a small number of medically-attended visits given that most non-hospitalized patients recover well at home. Patients in the seronegative group were at higher risk of medically-attended visits: 10 of the 12 medically-attended visits (defined as hospitalizations, or emergency room, urgent care or telemedicine visits for COVID-19) occurred in patients who were seronegative at baseline. In the seronegative group, 15.2% of placebo-treated patients, 7.7% of patients treated with high dose and 4.9% of patients treated with low dose required additional medical visits.
- Both doses were well-tolerated. Infusion reactions were seen in 4 patients (2 on placebo and 2 on REGN-COV2). Serious adverse events occurred in 2 placebo patients, 1 low dose patient and no high dose patients. There were no deaths in the trial.
"Thank you to the global investigators, sites and patients who continue to work with us to conduct REGN-COV2 trials, especially given the unique challenges posed by the pandemic," said David Weinreich, M.D., Senior Vice President and Head of Global Clinical Development at Regeneron. "We plan rapidly to submit detailed results from this analysis for publication in order to share insights with the public health and medical communities. Regeneron continues to enroll patients in this trial and all other ongoing late-stage trials evaluating REGN-COV2."
Additional Trial Background
Among the first 275 patients, approximately 56% were Hispanic, 13% were African American and 64% had one or more underlying risk factors for severe COVID-19, including obesity (more than 40%). On average, patients were 44 years of age. In total, 49% of participants were male and 51% were female.
At least 1,300 patients will be recruited into the Phase 2/3 portion of the outpatient trial overall. Patients will be followed for 29 days, with viral shedding in the upper respiratory tract assessed approximately every 2-3 days in the Phase 2 portion of the trial and clinical endpoints assessed via investigator and patient-reported data throughout.
In addition to this trial in non-hospitalized patients, REGN-COV2 is currently being studied in a Phase 2/3 clinical trial for the treatment of COVID-19 in hospitalized patients, the Phase 3 open-label RECOVERY trial of hospitalized patients in the UK and a Phase 3 trial for the prevention of COVID-19 in household contacts of infected individuals. Recruitment in all 4 trials is ongoing.
Investor and Media Webcast Information
Regeneron will host a conference call and simultaneous webcast to share updates on REGN-COV2 today September 29, 2020 at 4:30 pm ET. To access the call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International). A link to the webcast may be accessed from the "Investors and Media" page of Regeneron's website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company's website and will be available for at least 30 days.
About REGN-COV2
REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block infectivity of SARS-CoV-2, the virus that causes COVID-19.
To develop REGN-COV2, Regeneron scientists evaluated thousands of fully-human antibodies produced by the company's VelocImmune® mice, which have been genetically modified to have a human immune system, as well as antibodies identified from humans who have recovered from COVID-19. The two potent, virus-neutralizing antibodies that form REGN-COV2 bind non-competitively to the critical receptor binding domain of the virus's spike protein, which diminishes the ability of mutant viruses to escape treatment and protects against spike variants that have arisen in the human population, as detailed in Science. Preclinical studies have shown that REGN-COV2 reduced the amount of virus and associated damage in the lungs of non-human primates.
REGN-COV2's development and manufacturing has been funded in part with federal funds from the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services under OT number: HHSO100201700020C. Regeneron has recently partnered with Roche to increase the global supply of REGN-COV2. If REGN-COV2 proves safe and effective in clinical trials and regulatory approvals are granted, Regeneron will manufacture and distribute it in the U.S. and Roche will develop, manufacture and distribute it outside the U.S.
About Regeneron [omitted]
For additional information about the company, please visit www.regeneron.com or follow @Regeneron on Twitter.
Forward-Looking Statements and Use of Digital Media [omitted]
Contacts:
Media Relations
Alexandra Bowie
Tel: +1 (914) 847-3407
[email protected]
Investor Relations
Mark Hudson
Tel: +1 (914) 847-3482
[email protected]
View original content:http://www.prnewswire.com/news-releases/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and-improved-symptoms-in-non-hospitalized-covid-19-patients-301140336.html
SOURCE Regeneron Pharmaceuticals, Inc.
Investor Relations
914.847.7741
[email protected]
Media Relations
Reprise: Tony Picadio on gun rights
and the US Supreme Court
by DAR: Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency. The connection between private "militia" activity and gun ownership is of concern.
An article by Anthony Picadio criticizes the U.S. Supreme Court's decision in District of Columbia v.Heller, which expanded gun ownership rights. Picadio points out that the history of the Second Amendment in the lower courts since the Heller decision does in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.”
Mr. Picadio suggests that perhaps one of the reasons that expansive treatment of the Second Amendment has been so disfavored by the lower courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a government connected militia.
Moreover, Justice Scalia’s opinion “is based on an erroneous reading of colonial history and the drafting history of the Second Amendment,’’ Mr. Picadio wrote. “If the Second Amendment had been understood to have the meaning given to it by Justice Scalia, it would not have been ratified by Virginia and the other slave states.”
The amendment began with the phrase “a well regulated Militia’’ because the Virginian founders wanted to be sure guns didn’t get into the hands of enslaved black Virginians or free black Virginians, Mr. Picadio argues. With the state’s all-white militia, this amendment helped do just that.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the Picadio article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
and the US Supreme Court
by DAR: Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency. The connection between private "militia" activity and gun ownership is of concern.
An article by Anthony Picadio criticizes the U.S. Supreme Court's decision in District of Columbia v.Heller, which expanded gun ownership rights. Picadio points out that the history of the Second Amendment in the lower courts since the Heller decision does in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.”
Mr. Picadio suggests that perhaps one of the reasons that expansive treatment of the Second Amendment has been so disfavored by the lower courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a government connected militia.
Moreover, Justice Scalia’s opinion “is based on an erroneous reading of colonial history and the drafting history of the Second Amendment,’’ Mr. Picadio wrote. “If the Second Amendment had been understood to have the meaning given to it by Justice Scalia, it would not have been ratified by Virginia and the other slave states.”
The amendment began with the phrase “a well regulated Militia’’ because the Virginian founders wanted to be sure guns didn’t get into the hands of enslaved black Virginians or free black Virginians, Mr. Picadio argues. With the state’s all-white militia, this amendment helped do just that.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the Picadio article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
Douglas Ginsburg explains Constitutional originalism on PBS
By Don Allen Resnikoff
Amy Coney Barrett, the president’s choice for the U.S. Supreme Court, is often described as a disciple of Justice Antonin Scalia and an advocate of an interpretation of the Constitution known as originalism.
For those interested in a popular TV presentation explaining and defending Constitutional originalism, Public Broadcasting Service’s (PBS) fits the bill. “A More or Less Perfect Union, A Personal Exploration,” featuring Judge Douglas Ginsburg, offers an interesting, albeit mostly one-sided presentation.
PBS is admirable because of its independence from direct political control of content, but independence does not mean that particular PBS programs will meet standards of objectivity and balance that are suggested by the Corporation for Public Broadcasting’s enabling statute. The Ginsburg series, particularly the last of the series, called “Our Constitution at Risk,” veers sharply in the direction of supporting the Constitutional originalist ideas of Justice Scalia[i]
The Ginsburg PBS show is excellent in the sense that it is intelligently presented and interesting. But it is also an advocacy piece supporting a political viewpoint that includes a narrow “originalist” view of the Constitution, and strong condemnation of government action (such as action in support of labor unions) that many defend as highly desirable.
An article describing the video program for the American Bar Association Journal accurately explains that “Ginsburg, who is an originalist in his interpretation of the Constitution, points out how the balance of powers has shifted over the years. He contends elected officials have degraded the Constitution, and now there are agencies that do the work of all three governmental branches.” [ii] Ginsburg’s opinion is that regulatory agencies often act inappropriately in taking on the multiple tasks of making law, judging whether law violations occurred, and prescribing punishment.
Judge Ginsburg explains his “originalist” views of Constitutional interpretation in a companion book to the PBS video series called Voices of Our Republic.:[iii] The Constitution has also been “interpreted” by the Supreme Court to make certain clauses meaningless and to give other clauses new meaning. That evolution at the hands of the Court has been celebrated by many as a testament to the needed flexibility of the Constitution to respond to new circumstances, and lamented by others, myself included, as a betrayal of the ideals and principles that animated the Constitution in the first place. It also gave rise to the debate . . . : Should a court read the words of the Constitution as those who wrote and ratified them understood them? Or is a court authorized to give those words a new and different meaning in response to new and different circumstances?
The PBS show on the Constitution focuses at length on examples of government regulatory overreach into the business of very small entrepreneurs, such as easily criticized stringent city rules for licensing of tour guides. The show also refers to the history of the Tennessee Valley Authority as an example of government overreach, a bigger and more politically controversial story. The TVA was part of a regional development authority, famously including building of a huge hydroelectric dam that supplied electricity to a large geographic area. It was a centerpiece of Franklin D. Roosevelt’s New Deal programs, and was later opposed by politicians such as Ronald Reagan and Barry Goldwater.
Judge Ginsburg opposes FDR’s New Deal programs and its successors based on the Constitutional interpretation points explained in the PBS program.
Ginsburg explains in an earlier article that “the Great Depression and the determination of the Roosevelt Administration placed the Supreme Court’s commitment to the Constitution as written under severe stress in the 1930s, and it was then that the wheels began to come off [of correct commitment to the Constitution as written].” [iv]
Judge Ginsburg’s examples of the “wheels coming off” the Court’s interpretation of the Constitution include the New Deal era court decision NLRB v. Jones & Laughlin Steel Corp., [v] upholding the power of the Congress under the Constitution’s Commerce Clause to require companies to recognize labor unions. Ginsburg says that the Supreme Court thereby wrongly “threw open the door to national regulation of employment relations—and much more. Not only interstate commerce but anything that affects interstate commerce came within the reach of the Congress.” [vi]
Judge Ginsburg’s views are politically controversial. Financial and intellectual support for the Ginsburg presentation comes from groups that are themselves controversial. The PBS website for the television program on the Constitution credits production to “Free to Choose Media, in association with Thirteen [the New York PBS station WNET].” The Free to Choose website explains that the Freedom to Choose media efforts evolved from a broadcasting collaboration with economist Milton Friedman.[vii]
Milton Freidman is frequently associated with the political arguments that the Great Depression of the 1930s was a consequence of inept monetary policies of the Federal Reserve, and that the large bureaucracies of the Roosevelt New Deal were unneeded and inappropriate as a matter of Constitutional policy. [viii]
Media watchdog Sourcewatch’s characterizations of Free to Choose Media as “right-wing” and “extremist,” and “partisan” suggest, at minimum, that Free to Choose is associated with controversial political views. [ix]
If views expressed in the PBS show “ A More Or Less Perfect Union” are politically controversial, it seems fair to ask whether public broadcasting network PBS and its local affiliate WNET could do more to protect objectivity and balance. I think that the answer is yes, they could do more.
PBS and WNET do not make it clear that the views expressed in the program on the Constitution are the responsibility of the producer, and not PBS. Instead, PBS affiliate WNET appears to take shared credit for the content. As mentioned earlier, a PBS website for the show credits production to “Free to Choose Media, in association with Thirteen,” “Thirteen” being the New York PBS station WNET.
The PBS promotional material for the program is mainly an endorsement of Judge Ginsburg’s views: “Judge Ginsburg skillfully weaves the story of . . .how we may risk freedom today by ignoring the words of the Framers. . . .Business owners and American citizens relate stories both of protection and of overreach by the government – as with the USDA regulating the care of Hemingway’s cats! The Bill of Rights is explored . . . [including] momentous issues surrounding the freedom of speech, religion, press, and assembly, the Second Amendment [guns], eminent domain, the separation of powers, and civil rights.”
How could PBS do better? The answer is simple: Where a program advocates politically controversial positions, PBS should provide context for viewers. That need for context applies to the recent PBS program on the Constitution featuring Judge Ginsburg, if only because the Constitutional originalist ideas the program advocates are controversial. Those originalist ideas are in opposition to regulations and government agencies that many people believe necessary, including regulations necessary to save our country from the ravages of financial depression and Covid.
Don Allen Resnikoff 10-1-20
[i] A video preview is at https://www.pbs.org/video/our-constitution-risk-preview-z4ai48/
[ii] See https://www.abajournal.com/web/article/pbs-a-more-or-less-perfect-union-aims-to-boost-understanding-of-the-Constitution
[iii] Simon and Schuster, Jan 28, 2020
[iv] Cato Supreme Court Review, 2002-2003, James L. Swanson, Cato Institute, Oct 25, 2003
[v] 301 U.S. 1 (1937), a United States Supreme Court case that upheld the constitutionality of the National Labor Relations Act of 1935, also known as the Wagner Act.
[vi] https://www.cato.org/sites/cato.org/files/serials/files/supreme-court-review/2003/9/constitutional.pdf
[vii] https://www.freetochoosenetwork.org/about/
[viii] Franklin Roosevelt and Presidential Power, John Yoo, Chapman Law Review, Vol. 21, No. 1, 2018
[ix] See https://www.sourcewatch.org/index.php/Free_to_Choose_Network
From The Hill: To restore financial stability, bring back Glass-Steagall
By Arthur E. Wilmarth, Jr
Excerpts:
The global response to the pandemic confirms that we have not solved the problems that brought us the Great Recession more than a decade ago.
To break the global doom loop and restore financial stability, we must adopt a new Glass-Steagall Act. The original Glass-Steagall Act of 1933 supported stable financial markets and prevented systemic financial crises for more than three decades after World War II. Glass-Steagall separated banks from the capital markets and prohibited nonbanks from accepting deposits. It established risk buffers that prevented financial disruptions occurring in one sector of the financial markets from spreading to other sectors and triggering systemic crises. Regulators could respond to problems arising in one sector without being forced to bail out the entire financial system. Regulators could also encourage strong financial institutions in one sector to support troubled institutions in another sector. The undermining and repeal of Glass-Steagall’s prudential buffers helped to ignite the subprime mortgage boom that led to the Great Recession.
A new Glass-Steagall Act would greatly improve financial stability. It would prevent banks from using government-protected deposits to finance speculative trading in the capital markets. It would prohibit banks from underwriting securities other than government bonds. It would stop nonbanks from offering short-term financial instruments (like money market mutual funds) that masquerade as “deposits” but are not covered by deposit insurance and other banking regulations.
A new Glass-Steagall Act would reestablish risk buffers and prevent contagion across financial sectors. It would improve market discipline by preventing banks from transferring their public subsidies to affiliates engaged in capital market activities. Regulators would no longer be compelled to prop up securities markets because of concerns about massive securities exposures held by banks. Shadow banks would shrink substantially, as they could no longer finance their operations with short-term financial instruments. Bank regulators could more effectively monitor and control levels of short-term claims in financial markets because those claims would be issued only by banks.
A new Glass-Steagall Act would create a more diverse and competitive banking system by breaking up universal banks. Banks would return to their traditional roles of providing deposit, credit, fiduciary and payment services to businesses and consumers. Banks would have much stronger incentives to serve all segments of business and society, instead of focusing their efforts on Wall Street speculators, multinational corporations and the wealthy.
Securities markets would once again become true markets because they would not be linked to the fortunes of “too big to fail” universal banks and shadow banks. Our political, regulatory and monetary policies would no longer be held hostage by financial giants. Banks and securities firms would return to their proper roles as servants – not masters – of commerce, industry and society.
In 1914, Louis Brandeis warned the American public, “We must break the Money Trust or the Money Trust will break us.” Congress acted on his advice in 1933 by enacting the Glass-Steagall Act. Brandeis’s warning is just as timely today as it was in 1914 and 1933.
Arthur E. Wilmarth, Jr. is a professor emeritus of law at George Washington University in Washington, D.C. This op-ed is based on his book, “Taming the Megabanks: Why We Need a New Glass-Steagall Act (Oxford University Press),” which will be published on October 2.
https://www.msn.com/en-us/money/savingandinvesting/to-restore-financial-stability-bring-back-glass-steagall/ar-BB19A4L3
A&P:
September 2020
California’s Mini CFPB Among Innovations in a Trifecta of New Consumer Protection Laws
September 25, 2020 was a momentous day for the regulation of consumer finance in California—Governor Newsom signed into law three important bills: the California Consumer Financial Protection Law, the Debt Collection Licensing Act and the Student Borrower Bill of Rights.
In doing so, the Department of Business Oversight once again has a new name. Formerly the Department of Corporations, the Department of Business Oversight will now be renamed the Department of Financial Protection and Innovation. Some are calling it a "mini-CFPB"—meaning a California version of the federal Consumer Financial Protection Bureau. The new name and the establishment of a new Financial Technology Innovation Office signals California's renewed focus on financial innovation in the state and commitment to regulatory enforcement.
Read Advisory;https://comms.arnoldporter.com/e/niuiw04bwlagbha/e83a538d-6b1b-4475-afb5-5780d31ea1ab
September 2020
California’s Mini CFPB Among Innovations in a Trifecta of New Consumer Protection Laws
September 25, 2020 was a momentous day for the regulation of consumer finance in California—Governor Newsom signed into law three important bills: the California Consumer Financial Protection Law, the Debt Collection Licensing Act and the Student Borrower Bill of Rights.
In doing so, the Department of Business Oversight once again has a new name. Formerly the Department of Corporations, the Department of Business Oversight will now be renamed the Department of Financial Protection and Innovation. Some are calling it a "mini-CFPB"—meaning a California version of the federal Consumer Financial Protection Bureau. The new name and the establishment of a new Financial Technology Innovation Office signals California's renewed focus on financial innovation in the state and commitment to regulatory enforcement.
Read Advisory;https://comms.arnoldporter.com/e/niuiw04bwlagbha/e83a538d-6b1b-4475-afb5-5780d31ea1ab
PBS: Voice of America politicized?--could U.S. public TV be next?
https://www.pbssocal.org/programs/pbs-newshour/controlling-the-message-1600974186/
Michael Pack, CEO of the U.S. Agency for Global Media, ignored a congressional subpoena over concerns he has politicized and mismanaged media outlets that helped the U.S. win the Cold War. One of those outlets is Voice of America. Nick Schifrin reports.
DAR Comment:
The Voice of America story is that the Trump Administration installed Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America. Press reports indicate that Pack previously ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon. Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired the heads of three other networks — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund.
Pack reportedly dissolved the networks’ bipartisan advisory boards and replaced them with new panels composed of people widely considered to be Trump loyalists.
The Guardian newspaper opined that “The action by Michael Pack appeared to confirm fears that Trump wanted to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
The statute relevant to the Voice of America is the International Broadcasting Act, which critics argue was weakened in several ways by Congress in 2016, including weakening job security of broadcast network heads.
Is there reason for concern that public broadcasting could in the future be made a tool of a partisan or narrow ideological point of view? To use the language of the Guardian newspaper editorial, could the U.S. Public Broadcasting Service stations at some future point be turned into loyal state broadcasters of the kind normally found in authoritarian societies?
Past experience suggests reason for concern. The Voice of America experience in particular suggests that public broadcasting can be an attractive target for aggressive politicians who wish to take control of the information available to the public.
Another source of concern lies in constitutional requirements articulated by the U.S. Supreme Court in its 2020 decision in the case of SEILA LAW LLC v. CONSUMER FINANCIAL PROTECTION BUREAU. The case concerns the status of the CFPB as an independent regulatory agency. The U.S. Supreme Court explained in SEILA that as a general matter, leaders of federal agencies serve at the discretion of the President. The Court then applied that principle to the CFPB.
Commenters have pointed out that in clipping the independence of the Consumer Financial Protection Bureau, a conservative majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. Cass Sunstein says that “The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.”
That constitutional cloud applies as well to the independence of the Corporation for Public Broadcasting, which is responsible for public broadcasting in the United States.
Posting by Don Allen Resnikoff, who is responsible for the content.
https://www.pbssocal.org/programs/pbs-newshour/controlling-the-message-1600974186/
Michael Pack, CEO of the U.S. Agency for Global Media, ignored a congressional subpoena over concerns he has politicized and mismanaged media outlets that helped the U.S. win the Cold War. One of those outlets is Voice of America. Nick Schifrin reports.
DAR Comment:
The Voice of America story is that the Trump Administration installed Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America. Press reports indicate that Pack previously ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon. Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired the heads of three other networks — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund.
Pack reportedly dissolved the networks’ bipartisan advisory boards and replaced them with new panels composed of people widely considered to be Trump loyalists.
The Guardian newspaper opined that “The action by Michael Pack appeared to confirm fears that Trump wanted to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
The statute relevant to the Voice of America is the International Broadcasting Act, which critics argue was weakened in several ways by Congress in 2016, including weakening job security of broadcast network heads.
Is there reason for concern that public broadcasting could in the future be made a tool of a partisan or narrow ideological point of view? To use the language of the Guardian newspaper editorial, could the U.S. Public Broadcasting Service stations at some future point be turned into loyal state broadcasters of the kind normally found in authoritarian societies?
Past experience suggests reason for concern. The Voice of America experience in particular suggests that public broadcasting can be an attractive target for aggressive politicians who wish to take control of the information available to the public.
Another source of concern lies in constitutional requirements articulated by the U.S. Supreme Court in its 2020 decision in the case of SEILA LAW LLC v. CONSUMER FINANCIAL PROTECTION BUREAU. The case concerns the status of the CFPB as an independent regulatory agency. The U.S. Supreme Court explained in SEILA that as a general matter, leaders of federal agencies serve at the discretion of the President. The Court then applied that principle to the CFPB.
Commenters have pointed out that in clipping the independence of the Consumer Financial Protection Bureau, a conservative majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. Cass Sunstein says that “The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.”
That constitutional cloud applies as well to the independence of the Corporation for Public Broadcasting, which is responsible for public broadcasting in the United States.
Posting by Don Allen Resnikoff, who is responsible for the content.
PBS's Hacking Your Mind
The official "teaser" for the three part series is here:
https://www.youtube.com/watch?v=Hs0lEP6r2Ig
DAR comment: The show offers an interesting analysis of how behavioral manipulation strategies are used to persuade consumers concerning products like antacids, and voters concerning support for particular parties and candidates.
A consumer product example is the advertising campaign that successfully persuaded people to switch from Prilosec to the more expensive prescription-only Nexium, even though the two are functionally very similar.
In the world of politics, similar strategies are on steroids because of Facebook, which profits by selling information on user interests. The PBS program suggests that strategies of politicians and those wishing to influence politics are often the result of careful research on voter biases, rather than random off-the-cuff thinking.
For example, "us v them" biases are exploited by groups seeking to influence political thinking. One illustration offered by the PBS program involves a Russia troll group that created two different web sites in the U.S. -- one anti-Muslim, and the other promoting defense of Muslim interests. The troll group used both websites to announce a public demonstration for both groups at the same time and place, which succeeded in creating a real world large and angry crowd confrontation between anti-Muslim people and Muslim defenders. The Russian political goal? To promote political discord in the U.S.
Broad use of behavioral manipulation techniques is more than a little concerning, both with regard to consumer product promotion and politics. I recommend the PBS series.
-Posting by Don Allen Resnikoff, who is responsible for the content.
The official "teaser" for the three part series is here:
https://www.youtube.com/watch?v=Hs0lEP6r2Ig
DAR comment: The show offers an interesting analysis of how behavioral manipulation strategies are used to persuade consumers concerning products like antacids, and voters concerning support for particular parties and candidates.
A consumer product example is the advertising campaign that successfully persuaded people to switch from Prilosec to the more expensive prescription-only Nexium, even though the two are functionally very similar.
In the world of politics, similar strategies are on steroids because of Facebook, which profits by selling information on user interests. The PBS program suggests that strategies of politicians and those wishing to influence politics are often the result of careful research on voter biases, rather than random off-the-cuff thinking.
For example, "us v them" biases are exploited by groups seeking to influence political thinking. One illustration offered by the PBS program involves a Russia troll group that created two different web sites in the U.S. -- one anti-Muslim, and the other promoting defense of Muslim interests. The troll group used both websites to announce a public demonstration for both groups at the same time and place, which succeeded in creating a real world large and angry crowd confrontation between anti-Muslim people and Muslim defenders. The Russian political goal? To promote political discord in the U.S.
Broad use of behavioral manipulation techniques is more than a little concerning, both with regard to consumer product promotion and politics. I recommend the PBS series.
-Posting by Don Allen Resnikoff, who is responsible for the content.
From New America:
Protecting the Vote
RSVP
Following the 2016 U.S. presidential election, internet platforms have come under increased scrutiny for how they tackle the spread of election-related misinformation and disinformation, particularly content that aims to suppress voter engagement and that targets communities of color. As the 2020 U.S. presidential election draws near, concerns that these platforms are being used by both foreign and domestic actors to exploit users and spread misleading information are growing, especially given that this election is taking place amid an unprecedented pandemic.
Join New America’s Open Technology Institute (OTI) for a virtual panel that will explore how internet platforms are addressing the spread of election-related misinformation and disinformation on their services, and how these efforts can be improved.
This event builds off of OTI’s work which evaluates how companies are tackling the spread of COVID-19 related misinformation and disinformation, and our forthcoming report on how platforms are addressing the spread of election-related disinformation.
Speakers:
David Brody
Counsel & Senior Fellow for Privacy and Technology, Lawyer’s Committee for Civil Rights Under Law
Yosef Getachew, @ygetachew2
Director, Media & Democracy Program, Common Cause
Spandi Singh, @spandi_s
Policy Analyst, New America’s Open Technology Institute
Ian Vandewalker, @IanVandewalker
Senior Counsel, Brennan Center for Justice
Moderator:
Sam Sabin, @samsabin923
Tech Policy Reporter, Morning Consult
Protecting The Vote: How Internet Platforms Are Addressing Election-Related Misinformation And Disinformation Online
THURSDAY, OCTOBER 1, 2020
1:30 PM – 2:30 PM ET
ONLINE
LINK: https://newamerica.cvent.com/events/protecting-the-vote-how-internet-platforms-are-addressing-election-related-misinformation-and-disinf/registration-359054d33cc24f58b053175983cd898e.aspx?i=06bb9732-d58b-421e-baa1-9304dc065010&fqp=true
RSV
Rand Paul v. Dr. Fauci at Senate hearing
From The Hill
https://thehill.com/policy/healthcare/517801-fauci-rand-paul-is-not-listening-to-the-cdc-director-about-covid-19-data
Paul, who has frequently criticized lockdowns aimed at preventing the spread of the coronavirus while questioning their effectiveness, asked Fauci if he had second thoughts over his support for such measures given statistics in other countries.
He claimed mitigation measures like closing movie theaters, bars and limiting restaurant capacity had no impact, because the New York tri-state area had the highest coronavirus death rate in the country.
"It's important that we the people not simply acquiesce to authoritarian mandates on our behavior without first making the nanny state prove their hypothesis," Paul said. "What we do know is that New York and New Jersey and Connecticut and Rhode Island still allowed the highest death rates in the world."
Fauci said New York got hit "pretty badly" but the state has managed to bring its positivity down to about 1 percent because New Yorkers have been following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors.
When Paul floated the theory that New Yorkers have now developed enough immunity that they are no longer at risk, Fauci appeared irritated and said the senator was completely off base.
"I challenge that, senator," Fauci said, before asking for more time to finish his response "because this happens with Senator Rand all the time."
"You are not listening to what the director of the CDC [Centers for Disease Control and Prevention] said, that in New York [the infection rate is] about 22 percent. If you believe 22 percent is herd immunity, I believe you're alone in that," Fauci said.
DAR Comment: The debate is about a libertarian approach to government regulation, the "nanny state" concern. For Paul, the "nanny state" must prove very strong justification before imposing lockdown mandates. Fauci does not argue with the point that justfication is needed, but does argue with the idea that justification has not been strongly shown. He points out that New York has brought its positivity rate down by following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors. As a matter of fact, what Dr. Fauci refers to as New York recommendations were mandates. See https://www.nytimes.com/2020/04/15/nyregion/coronavirus-face-masks-andrew-cuomo.html
From The Hill
https://thehill.com/policy/healthcare/517801-fauci-rand-paul-is-not-listening-to-the-cdc-director-about-covid-19-data
Paul, who has frequently criticized lockdowns aimed at preventing the spread of the coronavirus while questioning their effectiveness, asked Fauci if he had second thoughts over his support for such measures given statistics in other countries.
He claimed mitigation measures like closing movie theaters, bars and limiting restaurant capacity had no impact, because the New York tri-state area had the highest coronavirus death rate in the country.
"It's important that we the people not simply acquiesce to authoritarian mandates on our behavior without first making the nanny state prove their hypothesis," Paul said. "What we do know is that New York and New Jersey and Connecticut and Rhode Island still allowed the highest death rates in the world."
Fauci said New York got hit "pretty badly" but the state has managed to bring its positivity down to about 1 percent because New Yorkers have been following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors.
When Paul floated the theory that New Yorkers have now developed enough immunity that they are no longer at risk, Fauci appeared irritated and said the senator was completely off base.
"I challenge that, senator," Fauci said, before asking for more time to finish his response "because this happens with Senator Rand all the time."
"You are not listening to what the director of the CDC [Centers for Disease Control and Prevention] said, that in New York [the infection rate is] about 22 percent. If you believe 22 percent is herd immunity, I believe you're alone in that," Fauci said.
DAR Comment: The debate is about a libertarian approach to government regulation, the "nanny state" concern. For Paul, the "nanny state" must prove very strong justification before imposing lockdown mandates. Fauci does not argue with the point that justfication is needed, but does argue with the idea that justification has not been strongly shown. He points out that New York has brought its positivity rate down by following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors. As a matter of fact, what Dr. Fauci refers to as New York recommendations were mandates. See https://www.nytimes.com/2020/04/15/nyregion/coronavirus-face-masks-andrew-cuomo.html
From the Daily Beast: "Red State" troll of Fauci worked in Fauci's agency
The managing editor of the prominent conservative website RedState has spent months trashing U.S. officials tasked with combating COVID-19, dubbing White House coronavirus task force member Dr. Anthony Fauci a “mask nazi,” and intimating that government officials responsible for the pandemic response should be executed.
But that writer, who goes by the pseudonym “streiff,” isn’t just another political blogger. The Daily Beast has discovered that he actually works in the public affairs shop of the very agency that Fauci leads.
William B. Crews is, by day, a public affairs specialist for the National Institute of Allergy and Infectious Diseases. But for years he has been writing for RedState under the streiff pseudonym. And in that capacity he has been contributing to the very same disinformation campaign that his superiors at the NIAID say is a major challenge to widespread efforts to control a pandemic that has claimed roughly 200,000 U.S. lives
.
Under his pseudonym, Crews has derided his own colleagues as part of a left-wing anti-Trump conspiracy and vehemently criticized the man who leads his agency, whom he described as the “attention-grubbing and media-whoring Anthony Fauci.” He has gone after other public health officials at the state and federal levels, as well—“the public health Karenwaffen,'' as he’s called them—over measures such as the closures of businesses and other public establishments and the promotion of social distancing and mask-wearing. Those policies, Crews insists, have no basis in science and are simply surreptitious efforts to usurp Americans’ rights, destroy the U.S. economy, and damage President Donald Trump’s reelection effort.
“I think we’re at the point where it is safe to say that the entire Wuhan virus scare was nothing more or less than a massive fraud perpetrated upon the American people by ‘experts’ who were determined to fundamentally change the way the country lives and is organized and governed,” Crews wrote in a June post on RedState.
“If there were justice,” he added, “we’d send and [sic] few dozen of these fascists to the gallows and gibbet their tarred bodies in chains until they fall apart.”
After The Daily Beast brought those and other quotes from Crews to NIAID’s attention, the agency said in an emailed statement that Crews would “retire” from his position.
From https://www.thedailybeast.com/redstate-covid-troll-streiff-is-actually-bill-crews-and-he-actually-works-for-dr-anthony-fauci
The managing editor of the prominent conservative website RedState has spent months trashing U.S. officials tasked with combating COVID-19, dubbing White House coronavirus task force member Dr. Anthony Fauci a “mask nazi,” and intimating that government officials responsible for the pandemic response should be executed.
But that writer, who goes by the pseudonym “streiff,” isn’t just another political blogger. The Daily Beast has discovered that he actually works in the public affairs shop of the very agency that Fauci leads.
William B. Crews is, by day, a public affairs specialist for the National Institute of Allergy and Infectious Diseases. But for years he has been writing for RedState under the streiff pseudonym. And in that capacity he has been contributing to the very same disinformation campaign that his superiors at the NIAID say is a major challenge to widespread efforts to control a pandemic that has claimed roughly 200,000 U.S. lives
.
Under his pseudonym, Crews has derided his own colleagues as part of a left-wing anti-Trump conspiracy and vehemently criticized the man who leads his agency, whom he described as the “attention-grubbing and media-whoring Anthony Fauci.” He has gone after other public health officials at the state and federal levels, as well—“the public health Karenwaffen,'' as he’s called them—over measures such as the closures of businesses and other public establishments and the promotion of social distancing and mask-wearing. Those policies, Crews insists, have no basis in science and are simply surreptitious efforts to usurp Americans’ rights, destroy the U.S. economy, and damage President Donald Trump’s reelection effort.
“I think we’re at the point where it is safe to say that the entire Wuhan virus scare was nothing more or less than a massive fraud perpetrated upon the American people by ‘experts’ who were determined to fundamentally change the way the country lives and is organized and governed,” Crews wrote in a June post on RedState.
“If there were justice,” he added, “we’d send and [sic] few dozen of these fascists to the gallows and gibbet their tarred bodies in chains until they fall apart.”
After The Daily Beast brought those and other quotes from Crews to NIAID’s attention, the agency said in an emailed statement that Crews would “retire” from his position.
From https://www.thedailybeast.com/redstate-covid-troll-streiff-is-actually-bill-crews-and-he-actually-works-for-dr-anthony-fauci
From Buzzfeed: secret government documents reveal how the giants of Western banking move trillions of dollars in suspicious transactions, facilitating the work of terrorists, kleptocrats, and drug kingpins.
And the US government, despite its vast powers, fails to stop it.
Today, the FinCEN Files — thousands of “suspicious activity reports” and other US government documents — offer an unprecedented view of global financial corruption, the banks enabling it, and the government agencies that watch as it flourishes. BuzzFeed News has shared these reports with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries.
These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks’ own employees.
Money laundering is a crime that makes other crimes possible. It can accelerate economic inequality, drain public funds, undermine democracy, and destabilize nations — and the banks play a key role. “Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world,” said Martin Woods, a former suspicious transactions investigator for Wachovia.
“Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world.”
Laws that were meant to stop financial crime have instead allowed it to flourish. So long as a bank files a notice that it may be facilitating criminal activity, it all but immunizes itself and its executives from criminal prosecution. The suspicious activity alert effectively gives them a free pass to keep moving the money and collecting the fees.
The Financial Crimes Enforcement Network, or FinCEN, is the agency within the Treasury Department charged with combating money laundering, terrorist financing, and other financial crimes. It collects millions of these suspicious activity reports, known as SARs. It makes them available to US law enforcement agencies and other nations’ financial intelligence operations. It even compiles a report called “Kleptocracy Weekly” that summarizes the dealings of foreign leaders such as Russian President Vladimir Putin.
What it does not do is force the banks to shut the money laundering down.
In the rare instances when the US government does crack down on banks, it often relies on sweetheart deals called deferred prosecution agreements, which include fines but no high-level arrests. The Trump administration has made it even harder to hold executives personally accountable, under guidance by former deputy attorney general Rod Rosenstein that warned government agencies against “piling on.”
But the FinCEN Files investigation shows that even after they were prosecuted or fined for financial misconduct, banks such as JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon continued to move money for suspected criminals.
Suspicious payments flow around the world and into countless industries, from international sports to Hollywood entertainment to luxury real estate to Nobu sushi restaurants. They filter into the companies that make familiar items from people’s lives, from the gas in their car to the granola in their cereal bowl.
The FinCEN Files expose an underlying truth of the modern era: The networks through which dirty money traverse the world have become vital arteries of the global economy. They enable a shadow financial system so wide-ranging and so unchecked that it has become inextricable from the so-called legitimate economy. Banks with household names have helped to make it so.
From: https://www.buzzfeednews.com/article/jasonleopold/fincen-files-financial-scandal-criminal-networks?ref=hpsplash&origin=spl
And the US government, despite its vast powers, fails to stop it.
Today, the FinCEN Files — thousands of “suspicious activity reports” and other US government documents — offer an unprecedented view of global financial corruption, the banks enabling it, and the government agencies that watch as it flourishes. BuzzFeed News has shared these reports with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries.
These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks’ own employees.
Money laundering is a crime that makes other crimes possible. It can accelerate economic inequality, drain public funds, undermine democracy, and destabilize nations — and the banks play a key role. “Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world,” said Martin Woods, a former suspicious transactions investigator for Wachovia.
“Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world.”
Laws that were meant to stop financial crime have instead allowed it to flourish. So long as a bank files a notice that it may be facilitating criminal activity, it all but immunizes itself and its executives from criminal prosecution. The suspicious activity alert effectively gives them a free pass to keep moving the money and collecting the fees.
The Financial Crimes Enforcement Network, or FinCEN, is the agency within the Treasury Department charged with combating money laundering, terrorist financing, and other financial crimes. It collects millions of these suspicious activity reports, known as SARs. It makes them available to US law enforcement agencies and other nations’ financial intelligence operations. It even compiles a report called “Kleptocracy Weekly” that summarizes the dealings of foreign leaders such as Russian President Vladimir Putin.
What it does not do is force the banks to shut the money laundering down.
In the rare instances when the US government does crack down on banks, it often relies on sweetheart deals called deferred prosecution agreements, which include fines but no high-level arrests. The Trump administration has made it even harder to hold executives personally accountable, under guidance by former deputy attorney general Rod Rosenstein that warned government agencies against “piling on.”
But the FinCEN Files investigation shows that even after they were prosecuted or fined for financial misconduct, banks such as JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon continued to move money for suspected criminals.
Suspicious payments flow around the world and into countless industries, from international sports to Hollywood entertainment to luxury real estate to Nobu sushi restaurants. They filter into the companies that make familiar items from people’s lives, from the gas in their car to the granola in their cereal bowl.
The FinCEN Files expose an underlying truth of the modern era: The networks through which dirty money traverse the world have become vital arteries of the global economy. They enable a shadow financial system so wide-ranging and so unchecked that it has become inextricable from the so-called legitimate economy. Banks with household names have helped to make it so.
From: https://www.buzzfeednews.com/article/jasonleopold/fincen-files-financial-scandal-criminal-networks?ref=hpsplash&origin=spl
Daimler AG and Mercedes Benz Settle with US for $1.5 Billion for Emissions Cheating
by Michael Volkov · September 21, 2020
The Justice Department, the Environmental Protection Agency and the California Resources Board announced a joint settlement totaling roughly $1.5 billion with Daimler AG and its US subsidiary Mercedes Benz to resolve violations of the Clean Air Act and California law from the emissions cheating scandal.
The EPA and CARB discovered the violations by conducting tests in the wake of the original Volkswagen emissions cheating scandal. The Mercedes emissions systems included defeat devices and were intended to increase fuel mileage and performance and boost sales to the detriment of compliance with applicable emissions standards.
Daimler agreed to recall and repair the emissions systems in Mercedes diesel vehicles sold in the US between 2009 and 2016 and pay approximately $945,300 in penalties. Also, Daimler agreed to extend the warranty period for parts in the repaired vehicles, perform projects to mitigate excess ozone-creating nitrogen oxide (NOx) emitted from the vehicles and implement new internal audit procedures to prevent a recurrence of the cheating scandal. The recall program and federal mitigation project are expected to cost Daimler around $436 million.
Daimler also will pay another $110 million to fund mitigation projects in California. Added together, the settlement is valued at approximately $1.5 billion.
From 2009 to 2016, Daimler manufactured, imported and sold more than 250,000 diesel vans and cars with undisclosed emission control devices and defeat devices designed to circumvent emissions standards set by the EPA. These devices caused the vehicles to generate results that complied with emissions tests. However, when not being tested, the vehicles had programmed emissions controls to operate differently, and less effectively, resulting in an increase in NOx emissions above the mandated maximum standard.
NOx emissions play a significant role in ground-level ozone production and cause harm to human health. Breathing ozone may damage lung tissue in children and adults, and cause further harm to humans with conditions like asthma, emphysema and bronchitis. recent scientific studies indicate that the direct health effects of NOx are worse than previously understood, including respiratory problems, damage to lung tissue, and premature death.
Under the settlement, Daimler will implement a recall and repair program to remove all emissions defeat devices at no cost to consumers. The repair includes a software update and replacement of hardware for different years and models. Mercedes vehicles will be brought into compliance with Clear Air Act requirements.
Daimler is subject to a requirement that it repair at least 85 percent of the vehicles within two years and 85 percent of certain vans within three years. Daimler has to extend the warranty for the new software and hardware, and it must test repaired vehicles each year for the next five years to ensure compliance with the emissions standards. Daimler will face set penalties if it fails to meet the applicable recall rates.
As part of the settlement, Daimler has to implement systemic corporate compliance enhancements to detect and prevent eliminate violations in the future. These reforms include use of a portable emissions measurement system, install a robust whistleblower program, enhance training and perform internal audits subject to review by an external compliance consultant.
From: https://blog.volkovlaw.com/2020/09/daimler-ag-and-mercedes-benz-settle-with-us-for-benz-1-5-billion-for-emissions-cheating/
by Michael Volkov · September 21, 2020
The Justice Department, the Environmental Protection Agency and the California Resources Board announced a joint settlement totaling roughly $1.5 billion with Daimler AG and its US subsidiary Mercedes Benz to resolve violations of the Clean Air Act and California law from the emissions cheating scandal.
The EPA and CARB discovered the violations by conducting tests in the wake of the original Volkswagen emissions cheating scandal. The Mercedes emissions systems included defeat devices and were intended to increase fuel mileage and performance and boost sales to the detriment of compliance with applicable emissions standards.
Daimler agreed to recall and repair the emissions systems in Mercedes diesel vehicles sold in the US between 2009 and 2016 and pay approximately $945,300 in penalties. Also, Daimler agreed to extend the warranty period for parts in the repaired vehicles, perform projects to mitigate excess ozone-creating nitrogen oxide (NOx) emitted from the vehicles and implement new internal audit procedures to prevent a recurrence of the cheating scandal. The recall program and federal mitigation project are expected to cost Daimler around $436 million.
Daimler also will pay another $110 million to fund mitigation projects in California. Added together, the settlement is valued at approximately $1.5 billion.
From 2009 to 2016, Daimler manufactured, imported and sold more than 250,000 diesel vans and cars with undisclosed emission control devices and defeat devices designed to circumvent emissions standards set by the EPA. These devices caused the vehicles to generate results that complied with emissions tests. However, when not being tested, the vehicles had programmed emissions controls to operate differently, and less effectively, resulting in an increase in NOx emissions above the mandated maximum standard.
NOx emissions play a significant role in ground-level ozone production and cause harm to human health. Breathing ozone may damage lung tissue in children and adults, and cause further harm to humans with conditions like asthma, emphysema and bronchitis. recent scientific studies indicate that the direct health effects of NOx are worse than previously understood, including respiratory problems, damage to lung tissue, and premature death.
Under the settlement, Daimler will implement a recall and repair program to remove all emissions defeat devices at no cost to consumers. The repair includes a software update and replacement of hardware for different years and models. Mercedes vehicles will be brought into compliance with Clear Air Act requirements.
Daimler is subject to a requirement that it repair at least 85 percent of the vehicles within two years and 85 percent of certain vans within three years. Daimler has to extend the warranty for the new software and hardware, and it must test repaired vehicles each year for the next five years to ensure compliance with the emissions standards. Daimler will face set penalties if it fails to meet the applicable recall rates.
As part of the settlement, Daimler has to implement systemic corporate compliance enhancements to detect and prevent eliminate violations in the future. These reforms include use of a portable emissions measurement system, install a robust whistleblower program, enhance training and perform internal audits subject to review by an external compliance consultant.
From: https://blog.volkovlaw.com/2020/09/daimler-ag-and-mercedes-benz-settle-with-us-for-benz-1-5-billion-for-emissions-cheating/
Antitrust Experts Assess New Data on Private U.S. Antitrust Enforcement, Highlight Trends in Compensating Victims and Deterring Illegal Conduct
September 21, 2020
Private Enforcement , Section 1 of the Sherman Act , Competition Policy
The American Antitrust Institute (AAI) and the University of San Francisco School of Law (USF Law) released a commentary (Commentary) on a new annual report examining antitrust class actions in federal court from 2009 to 2019. The 2019 Antitrust Annual Report (2019 Report) finds that cases settled since 2009 have recovered more than $24 billion on behalf of victims of antitrust violations. The 2019 Report, which expands on last year’s 2018 Antitrust Annual Report (2018 Report) was jointly produced by USF Law and Huntington National Bank.
Private enforcement actions are brought under two main federal statutes—the Sherman Antitrust Act and the Clayton Antitrust Act—and various states’ laws. The laws prohibit collusive agreements, monopolization, and mergers that are likely substantially to lessen competition. Federal courts oversee many private enforcement actions.
“With increasing concerns over the ill effects of high market concentration in critical sectors and markets, private enforcement is more important than ever,” said AAI President Diana Moss. “We see strong evidence of increased filings and recoveries in antitrust class actions from 2009-2019, and at the same time we see federal antitrust enforcement action, particularly against illegal conspiracies, in decline. Private enforcement remains a critical tool in the U.S. enforcement system and can deliver meaningful compensation to victims and deter future illegal conduct. The 2019 Report and Commentary together highlight the significant results achieved through private antitrust enforcement,” explained Moss.
“The 2019 Antitrust Annual Report is the second installment in this pioneering annual research effort,” Professor Joshua Davis, Director of the Center for Law and Ethics, University of San Francisco School of Law, noted. “The law firms prosecuting private antitrust enforcement actions play a crucial role in the public interest as private attorneys general, particularly when enforcement by federal agencies is waning. The U.S. system relies almost entirely on private enforcement to compensate victims. Moreover, private damages often dwarf the sanctions imposed by government actors, providing a critical deterrent to wrongdoers,” Professor Davis explained.
“The depth and breadth of the data assembled in the 2019 Report provides critical perspective for understanding trends in public and private enforcement over time,” said Laura Alexander, AAI’s Vice President of Policy. “With this report, we can better understand the real impact of pivotal court decisions on the ability of private enforcers to bring cases and recover compensation for victims illegal anticompetitive conduct.”
The AAI-USF Law Commentary highlights a number of key takeaways from the 2019 Report’s data on antitrust actions over the period 2009-2019. These collectively signal the efficiency and effectiveness of private enforcement — and the antitrust class action in particular.
- Private enforcement resources are focused efficiently on violations that harm victims, such as consumers and businesses. The 2019 Report reflects, among other things, considerable overlap between the industries where private and public enforcers find misconduct. “The data demonstrate that the congressional plan for parallel private and public enforcement works efficiently, often against well-resourced defendants,” commented AAI’s Moss.
- Private antitrust enforcement continues to be effective. From to 2009 to 2019, there was robust growth in total annual settlement amounts, with smaller settlement providing the backbone for private antitrust enforcement. Total settlement amounts showed robust growth over the period, which was particularly driven by an increase in very large settlements (around or above $1 billion). But smaller settlements of up to $50 million per case also held steady over the period, notwithstanding increasingly challenging law and procedure facing enforcers. “This growth in recoveries overall signals that private enforcement is effective, and that smaller settlements continue as the strong core of private enforcement” noted Moss.
- Private enforcement focused on victims directly harmed by large, often global antitrust conspiracies remains critical, but enforcement on behalf of indirect purchasers and victims of illegal monopolization also plays a crucial role. While the vast majority of the recoveries over the period 2009-2019 came from conspiracy cases brought by direct purchasers, both indirect purchaser cases and monopolization cases played an important role. “Monopolization and attempted monopolization cases—so-called conduct cases—are often thought to be unicorns. This data shows that, far from it, these cases result in substantial recoveries and may represent an overlooked area where more enforcement would be fruitful,” observed Professor Davis.
“The Commentary uses the occasion of the 2019 Report to step back and observe the U.S. private enforcement system and the antitrust class action device through a broader lens, both empirically and qualitatively,” Alexander stated. Davis noted further that the 2019 Report “Highlights fruitful areas for further academic work in studying private antitrust enforcement actions, their deterrence effect, and compensation for victims of illegal activity.”
###
Based in Washington, D.C., the American Antitrust Institute is an independent, nonprofit organization devoted to promoting competition that protects consumers, businesses, and society. It serves the public through research, education, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy.
Founded in 1912, the University of San Francisco School of Law provides a rigorous education – from intellectual property law to litigation and more — with a global perspective in a diverse, supportive community. It is fully accredited by the American Bar Association and a member of the Association of American Law Schools.
From PBS: Doctors who are musicians, and play together virtually and in person in socially distanced settings
See https://www.facebook.com/newshour/videos/385047986220855
Among other things, the PBS shows physician-musicians playing together outdoors is small, socially distanced groups. The doctors have often experienced the stress of treating very ill patients in the time of COVID. They well understand the current rules and principles of social distancing, but they have found ways of participating in happy activities. It can be done, and playing in socially distanced music groups is something happy I've done myself (although I am not a physician). Don Resnikoff
See https://www.facebook.com/newshour/videos/385047986220855
Among other things, the PBS shows physician-musicians playing together outdoors is small, socially distanced groups. The doctors have often experienced the stress of treating very ill patients in the time of COVID. They well understand the current rules and principles of social distancing, but they have found ways of participating in happy activities. It can be done, and playing in socially distanced music groups is something happy I've done myself (although I am not a physician). Don Resnikoff
From PBS: Wired's Nick Thompson on Tik-Tok and WeChat
The Trump administration is going ahead with plans to ban two popular Chinese social media apps. Soon Americans will no longer be able to download TikTok or WeChat from Apple or Google app stores, although current versions of TikTok will still be usable. Nick Thompson, editor-in-chief of WIRED Magazine, joins PBS's William Brangham to discuss.
In this observer's opinion, Thompson (who is skillfully questioned by Brangham) is adept at explaining the relevant technology of protecting the privacy of personal information, and the problem of Chinese Government access to personal data. Also, he puts the privacy protection issues in the broader context of a long term tech rivalry between U.S. and China.
Thompson suggests the value of a broader set of U.S. policies and rules on tech issues with China rather than seemingly ad hoc attacks like that on Tik-Tok.
From a lawyer's perspective, Thompson's suggestion of well formulated and generally applicable policies and rules connects well with the due process idea that the Government's expectations on questions of legality be well laid out in advance, not developed on an ad hoc basis or after the fact.
Proceedings of the relevant government agency The Committee on Foreign Investment in the United States (CFIUS)
tend to be quick and carried out without great transparency, and do not typically involve court review. There are reasons for the difference between the quick procedures the government follows in CFIUS national security matters and the more complex and slower procedures that apply in ordinary competition policy matters -- national security matters can be emergencies requiring particularly swift resolution. But Thompson's suggestion of generally applicable and clearly articulated policies and rules on matters like media privacy rights seems a sensible one.
Posting by Don Resnikoff, who is responsible for the content
The Thompson interview is here: https://www.youtube.com/watch?v=Q49RO2kd1u8
The Trump administration is going ahead with plans to ban two popular Chinese social media apps. Soon Americans will no longer be able to download TikTok or WeChat from Apple or Google app stores, although current versions of TikTok will still be usable. Nick Thompson, editor-in-chief of WIRED Magazine, joins PBS's William Brangham to discuss.
In this observer's opinion, Thompson (who is skillfully questioned by Brangham) is adept at explaining the relevant technology of protecting the privacy of personal information, and the problem of Chinese Government access to personal data. Also, he puts the privacy protection issues in the broader context of a long term tech rivalry between U.S. and China.
Thompson suggests the value of a broader set of U.S. policies and rules on tech issues with China rather than seemingly ad hoc attacks like that on Tik-Tok.
From a lawyer's perspective, Thompson's suggestion of well formulated and generally applicable policies and rules connects well with the due process idea that the Government's expectations on questions of legality be well laid out in advance, not developed on an ad hoc basis or after the fact.
Proceedings of the relevant government agency The Committee on Foreign Investment in the United States (CFIUS)
tend to be quick and carried out without great transparency, and do not typically involve court review. There are reasons for the difference between the quick procedures the government follows in CFIUS national security matters and the more complex and slower procedures that apply in ordinary competition policy matters -- national security matters can be emergencies requiring particularly swift resolution. But Thompson's suggestion of generally applicable and clearly articulated policies and rules on matters like media privacy rights seems a sensible one.
Posting by Don Resnikoff, who is responsible for the content
The Thompson interview is here: https://www.youtube.com/watch?v=Q49RO2kd1u8
PBS Newshour, Solman, Rosenthal: US paying twice for COVID vaccines?
https://www.pbs.org/newshour/show/is-the-u-s-government-paying-twice-for-coronavirus-vaccine
Excerpt:
https://www.pbs.org/newshour/show/is-the-u-s-government-paying-twice-for-coronavirus-vaccine
Excerpt:
- Osaremen Okolo:
There is no reason that private pharmaceutical companies should be profiteering off of a pandemic. - Paul Solman:
Osaremen Okolo is the chief health policy aide for Illinois Democrat Jan Schakowsky. - Rep. Jan Schakowsky, D-Ill.:
Yes or no, will you sell your vaccine at cost, so that we can verify you aren't making a profit? - Paul Solman:
Merck's vaccine has received $38 million in government funding.
Julie Gerberding is executive vice president. - Julie Gerberding:
No, we will not be selling vaccine at cost, although it's very premature for us, since we're a long way from really understanding the cost basis of what will end up. - Rep. Jan Schakowsky:
So, Dr. Hoge, yes or no? - Paul Solman:
Stephen Hoge is president of Moderna, which, by some measures, has gotten nearly $1.5 billion in federal funding, all the money it's put into the vaccine, and will get another $1.5 if it succeeds. - Stephen Hoge:
We will not sell it at cost, no ma'am.
Tyson, Perdue, Escape Antitrust Suit Over Immigrant Wages
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September 17, 2020
Tyson Foods and other top poultry processors tentatively escaped a lawsuit alleging an industrywide scheme to depress the wages of their largely immigrant workforce, although the Maryland federal judge hearing the case signaled she might revive it if the workers can offer more specifics, reported Bloomberg Law.
Despite the suit’s “smoking gun” conspiracy allegations, including a statement by a Tyson executive “fretting about the propriety of wage discussions at the secret meetings” and “admitting to the inappropriateness of its conduct” it suffers from a fatal flaw, Judge Stephanie A. Gallagher wrote.
Full Content: Bloomberg https://news.bloomberglaw.com/mergers-and-antitrust/tyson-perdue-others-dodge-antitrust-suit-over-immigrant-wages
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September 17, 2020
Tyson Foods and other top poultry processors tentatively escaped a lawsuit alleging an industrywide scheme to depress the wages of their largely immigrant workforce, although the Maryland federal judge hearing the case signaled she might revive it if the workers can offer more specifics, reported Bloomberg Law.
Despite the suit’s “smoking gun” conspiracy allegations, including a statement by a Tyson executive “fretting about the propriety of wage discussions at the secret meetings” and “admitting to the inappropriateness of its conduct” it suffers from a fatal flaw, Judge Stephanie A. Gallagher wrote.
Full Content: Bloomberg https://news.bloomberglaw.com/mergers-and-antitrust/tyson-perdue-others-dodge-antitrust-suit-over-immigrant-wages
Cass Sunstein: More than at any time since the 1930s, the administrative state is under constitutional assault.
Some judges, lawyers and legal academics are calling into question the very structure of modern government.
Four members of the U.S. Supreme Court, and possibly five, have indicated that they would like to revive the “nondelegation doctrine,” which would forbid Congress from granting excessively broad or uncabined discretion to administrative agencies such as the Environmental Protection Agency, the Department of Labor and the Department of Transportation. Under their approach, important parts of the Clean Air Act and the Occupational Safety and Health Act might be invalidated.
So too, in eliminating the independence of the Consumer Financial Protection Bureau in June, a majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.
These developments are just two of a large number of emerging efforts within the federal courts to limit the power of administrative agencies or perhaps even to abolish them, at least in their current form. We are witnessing the flowering of a longstanding attempt to see the administrative state as fundamentally illegitimate. (The legal assault on the administrative state has political resonance, too; think of the former Trump adviser Steve Bannon’s call for the “deconstruction of the administrative state.”)
Excerpt from: https://www.nytimes.com/2020/09/15/opinion/us-government-constitution.html
Some judges, lawyers and legal academics are calling into question the very structure of modern government.
Four members of the U.S. Supreme Court, and possibly five, have indicated that they would like to revive the “nondelegation doctrine,” which would forbid Congress from granting excessively broad or uncabined discretion to administrative agencies such as the Environmental Protection Agency, the Department of Labor and the Department of Transportation. Under their approach, important parts of the Clean Air Act and the Occupational Safety and Health Act might be invalidated.
So too, in eliminating the independence of the Consumer Financial Protection Bureau in June, a majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.
These developments are just two of a large number of emerging efforts within the federal courts to limit the power of administrative agencies or perhaps even to abolish them, at least in their current form. We are witnessing the flowering of a longstanding attempt to see the administrative state as fundamentally illegitimate. (The legal assault on the administrative state has political resonance, too; think of the former Trump adviser Steve Bannon’s call for the “deconstruction of the administrative state.”)
Excerpt from: https://www.nytimes.com/2020/09/15/opinion/us-government-constitution.html
The US Justice Department has ordered Al Jazeera’s affiliate youth channel AJ+ to register as a foreign agent for engaging in “political activities” on behalf of the Qatari government
The move comes a few months after US Congress members demanded that Al Jazeera itself be registered and subject to the Foreign Agents Registration Act (FARA).
AJ+, a youth network only found on social media channels, produces short videos in English Arabic, French and Spanish.
The Justice Department stated in a letter dated Monday that Qatar provides the channel with funding and appoints its board of directors.
“Journalism designed to influence American perceptions of a domestic policy issue or a foreign nation’s activities or its leadership qualifies as ‘political activities’ under the statutory definition, even if it views itself as ‘balanced’,” stated the letter, which was signed by Jay I. Bratt, head of the department’s counterintelligence division, and first obtained by American magazine Mother Jones.
Al Jazeera has been called a useful tool for Qatar’s ruling elite, which sympathizes with the Muslim Brotherhood and other terrorist and extremist groups.
From: https://www.arabnews.com/node/1735401/media
The move comes a few months after US Congress members demanded that Al Jazeera itself be registered and subject to the Foreign Agents Registration Act (FARA).
AJ+, a youth network only found on social media channels, produces short videos in English Arabic, French and Spanish.
The Justice Department stated in a letter dated Monday that Qatar provides the channel with funding and appoints its board of directors.
“Journalism designed to influence American perceptions of a domestic policy issue or a foreign nation’s activities or its leadership qualifies as ‘political activities’ under the statutory definition, even if it views itself as ‘balanced’,” stated the letter, which was signed by Jay I. Bratt, head of the department’s counterintelligence division, and first obtained by American magazine Mother Jones.
Al Jazeera has been called a useful tool for Qatar’s ruling elite, which sympathizes with the Muslim Brotherhood and other terrorist and extremist groups.
From: https://www.arabnews.com/node/1735401/media
Ohio businesses get state protection from COVID related liability
Ohio has joined the list of states where legislation offering businesses protection from Covid-19-related liabilities has been approved. The bill signed by Ohio Gov. Mike DeWine gives individuals, schools, health-care providers, businesses and other entities civil immunity from lawsuits stemming from the exposure, transmission or contraction of Covid-19 as long as organizations are not blatantly disregarding health and safety guidelines. The legislation take effect later this year and runs through September 2021.
From https://connect.bizjournals.com/index.php/email/emailWebview
Comcast Wants SCOTUS to Shut Down A Monopolization Suit Over TV Ads
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September 14, 2020
Comcast claims that the US Supreme Court should step in and shut down a monopolization lawsuit over the TV ad placement market, arguing a federal appeals court improperly gave a green light to claims it illegally refused to do business with rival Viamedia, reported Bloomberg.
“Compelled cooperation between rivals contradicts antitrust law’s goal of encouraging competition, and courts are ill-suited to policing the rare exceptions to the general rule,” the company says. “The Seventh Circuit’s expansive approach to refusal-to-deal liability upends this court’s intentional limits on such claims.”
The suit accuses Comcast of leveraging its control over its “interconnect,” a regional clearinghouse for TV advertising availabilities, to force a boycott of Viamedia, its sole competitor in the market for ad placement services in Chicago, Detroit, and Hartford, Conn.
Comcast also refused to let Viamedia use the interconnect at all, the suit states. The “tying” tactic and outright refusal to deal allegedly combined to drive Viamedia out of the three regional markets.
After a federal judge in Chicago threw out the case in 2018, a divided US Court of Appeals for the Seventh Circuit revived it in February.
https://news.bloomberglaw.com/antitrust/comcast-tells-scotus-viamedia-ruling-would-upend-antitrust-law
-
September 14, 2020
Comcast claims that the US Supreme Court should step in and shut down a monopolization lawsuit over the TV ad placement market, arguing a federal appeals court improperly gave a green light to claims it illegally refused to do business with rival Viamedia, reported Bloomberg.
“Compelled cooperation between rivals contradicts antitrust law’s goal of encouraging competition, and courts are ill-suited to policing the rare exceptions to the general rule,” the company says. “The Seventh Circuit’s expansive approach to refusal-to-deal liability upends this court’s intentional limits on such claims.”
The suit accuses Comcast of leveraging its control over its “interconnect,” a regional clearinghouse for TV advertising availabilities, to force a boycott of Viamedia, its sole competitor in the market for ad placement services in Chicago, Detroit, and Hartford, Conn.
Comcast also refused to let Viamedia use the interconnect at all, the suit states. The “tying” tactic and outright refusal to deal allegedly combined to drive Viamedia out of the three regional markets.
After a federal judge in Chicago threw out the case in 2018, a divided US Court of Appeals for the Seventh Circuit revived it in February.
https://news.bloomberglaw.com/antitrust/comcast-tells-scotus-viamedia-ruling-would-upend-antitrust-law
The future of gambling is being shaped by a 2018 Supreme Court decision that struck down a 1992 federal limit on sports betting to four states.
In addition to the 40 plus states that allow daily fantasy sports, nine now have legal sports betting and three have iGaming, or online casino betting. A DraftKings customer can use a single online wallet for all three in a state such as New Jersey.
DraftKings estimates that the total addressable U.S. market for online betting and gaming could be $40 billion annually. Flutter says online represents just 12% of the gambling market globally and is growing at 10% a year.
https://www.osga.com/online_gaming_articles.php?Making-Sense-Of-DraftKings-Multi-Billion-Dollar-Valuation-26055
In addition to the 40 plus states that allow daily fantasy sports, nine now have legal sports betting and three have iGaming, or online casino betting. A DraftKings customer can use a single online wallet for all three in a state such as New Jersey.
DraftKings estimates that the total addressable U.S. market for online betting and gaming could be $40 billion annually. Flutter says online represents just 12% of the gambling market globally and is growing at 10% a year.
https://www.osga.com/online_gaming_articles.php?Making-Sense-Of-DraftKings-Multi-Billion-Dollar-Valuation-26055
President Trump signed an executive order that he says lowers prescription drug prices "by putting America first," but experts say the move is unlikely to have any immediate impact.
The move comes nearly two months after the president signed a different executive order with the exact same name, but held it back to see if he could negotiate a better deal with drug companies. "If these talks are successful, we may not need to implement the fourth executive order, which is a very tough order for them," Trump said at the time.
The new executive order repeals the original and expands the drugs covered by Trump's proposed "most favored nations" pricing scheme to include both Medicare Part B and Medicare Part D. The idea is that Medicare would refuse to pay more for drugs than the lower prices paid by other developed nations.
excerpt from https://www.npr.org/2020/09/13/912545090/trump-signs-new-executive-order-on-prescription-drug-prices
A copy of the Order is here: https://www.whitehouse.gov/presidential-actions/executive-order-lowering-drug-prices-putting-america-first-2/e
The move comes nearly two months after the president signed a different executive order with the exact same name, but held it back to see if he could negotiate a better deal with drug companies. "If these talks are successful, we may not need to implement the fourth executive order, which is a very tough order for them," Trump said at the time.
The new executive order repeals the original and expands the drugs covered by Trump's proposed "most favored nations" pricing scheme to include both Medicare Part B and Medicare Part D. The idea is that Medicare would refuse to pay more for drugs than the lower prices paid by other developed nations.
excerpt from https://www.npr.org/2020/09/13/912545090/trump-signs-new-executive-order-on-prescription-drug-prices
A copy of the Order is here: https://www.whitehouse.gov/presidential-actions/executive-order-lowering-drug-prices-putting-america-first-2/e
Why Apple’s antitracking strategy hurts everyone but Apple
https://apple.news/ANDTY_1e_St26rypFUHfJ4A
Steve Latham September 12, 2020
Excerpt:
Apple recently announced a new privacy feature that will ask iPhone and iPad users to opt in or opt out of tracking for in-app advertising. While most applaud Apple for its pro-privacy stance, there’s much more to the story. As I’ll explain below, Apple’s move will hurt publishers and consumers for its own financial gain. The truth is that Apple’s virtue-signaling is masking anti-competitive behavior that needs to be called out.
The first domino
Apple announced in June that iOS14 (due later this month) would prompt users to opt in out of tracking by advertisers in third-party apps on their iPhones and iPads. It’s not hard to see why most expect users to opt-out en masse. How ominous is this warning?
When a user selects “Ask App Not to Track,” it disables an anonymous identifier known as the ID for Advertisers (IDFA). Once the IDFA is disabled, app developers and publishers can no longer make that identifier available to advertisers seeking to deliver relevant ads to users. While it seems rather innocuous, it will set off a chain of events that will end badly for everyone but Apple and Google.
Harm to publishers and developers
Articles have covered how this will hurt advertisers. While few will take pity on advertisers, what about your favorite news, weather, music, fitness, gaming, or meditation app? Disabling the IDFA will devastate ad-supported apps because it’s the IDFA that makes their media valuable to advertisers. If you’re a luxury apparel brand for women, you’re targeting a very narrow set of users, and you’re willing to pay more to reach them. In this example, apps that serve ads to affluent females (anonymously identified by their IDFA) can charge a 2-3x premium for that ad. Without IDFAs to target ads to relevant audiences, prices will plummet by 50-70%, making ad-supported models untenable.
Of the 2.2 million apps in the Apple store, many will fail as ad revenue nosedives. Apps that are able to migrate to subscription models will pay a high price. Aside from the costly development work and the inevitable loss of users, publishers will have to pay Apple a 30% tax on new subscription revenue. This is where Apple crosses the line into monopolistic behavior – more on that below.
Harm to consumers
When ad supported content is no longer viable, consumers will have to pay for content. While very few say they like ads, most realize we need them. A recent NAI study found that 75% of consumers are aware that free content is enabled by advertising. Moreover, 64% of consumers believe online content should be free. So we expect free ad-supported content, but we don’t want to share data that makes ad models work? Actually the problem isn’t advertisers. The NAI study also found that the #1 privacy concern is data collection by hackers, not publishers. Guess who else knows this and stands to benefit from the death of the free content? Well … you know the answer.
So to recap: Apple knows that disabling IDFAs will kill ad models and force publishers to migrate to subscriptions for which Apple will collect 30%. Apple also knows this will require us to pay for content (such as Apple News+ at $9.99/month) that we fundamentally expect for free. Are you getting the picture yet?
Goldman in the Lancet: Exaggerated risk of transmission of COVID-19 by fomites [hard surfaces and objects]
"In my opinion, the chance of transmission through inanimate surfaces is very small, and only in instances where an infected person coughs or sneezes on the surface, and someone else touches that surface soon after the cough or sneeze (within 1–2 h). I do not disagree with erring on the side of caution, but this can go to extremes not justified by the data. Although periodically disinfecting surfaces and use of gloves are reasonable precautions especially in hospitals, I believe that fomites that have not been in contact with an infected carrier for many hours do not pose a measurable risk of transmission in non-hospital settings. A more balanced perspective is needed to curb excesses that become counterproductive."
https://www.thelancet.com/pdfs/journals/laninf/PIIS1473-3099(20)30561-2.pdf
DAR Comment: This article in the Lancet has drawn the attention of journalist Ed Yong in the Atlantic Magazine, and others. Their takeaway point is that the most important strategy for avoiding COVID exposure is avoiding airborne transmission. Social distancing and avoiding crowded places are part of that strategy. Hard surfaces and objects that have been exposed to virus are less likely to cause a problem, according to Goldman. He says that after a few hours the viruses that may have landed on hard surfaces pose a diminished threat. The suggestion of the journalists is that elaborate cleaning of surfaces at commercial establishments is a theatrical exercise intended to create comfort among patrons who should be discomfited by proximity of other people. The greater threat to a restaurant patron is the close presence of other people sending out airborne particles, not a table top that has not been disinfected. Which is not to say that table tops should not be disinfected.
"In my opinion, the chance of transmission through inanimate surfaces is very small, and only in instances where an infected person coughs or sneezes on the surface, and someone else touches that surface soon after the cough or sneeze (within 1–2 h). I do not disagree with erring on the side of caution, but this can go to extremes not justified by the data. Although periodically disinfecting surfaces and use of gloves are reasonable precautions especially in hospitals, I believe that fomites that have not been in contact with an infected carrier for many hours do not pose a measurable risk of transmission in non-hospital settings. A more balanced perspective is needed to curb excesses that become counterproductive."
https://www.thelancet.com/pdfs/journals/laninf/PIIS1473-3099(20)30561-2.pdf
DAR Comment: This article in the Lancet has drawn the attention of journalist Ed Yong in the Atlantic Magazine, and others. Their takeaway point is that the most important strategy for avoiding COVID exposure is avoiding airborne transmission. Social distancing and avoiding crowded places are part of that strategy. Hard surfaces and objects that have been exposed to virus are less likely to cause a problem, according to Goldman. He says that after a few hours the viruses that may have landed on hard surfaces pose a diminished threat. The suggestion of the journalists is that elaborate cleaning of surfaces at commercial establishments is a theatrical exercise intended to create comfort among patrons who should be discomfited by proximity of other people. The greater threat to a restaurant patron is the close presence of other people sending out airborne particles, not a table top that has not been disinfected. Which is not to say that table tops should not be disinfected.
Learning Pods and Inequality: Issues and Ideas to Combat Unfair Treatment
08/10/2020 Maria Airth
Learning pods are small groups of students learning together normally independent of a traditional school system. In times of forced school closures due to public health emergencies, learning pods can be a welcome alternative to individual remote learning at home.
Unfortunately, learning pods tend to create inequality and unfair educational experiences for students. Let's look at the characteristics required for families to create a learning pod:
Due to the need for geographic proximity to create a learning pod, especially during times of public health crises, learning pods can create unintentional segregation in education.
Knowing how inequalities in education can come about when learning pods are created in response to school closures is the first part of the battle. Addressing these inequalities is the most important part of winning the battle against unfair treatment in education.
One main issue with many learning pods is a lack of diversity in the pod. Minority students and children from low-income families may not have the resources to participate in learning pods.
A method to address this issue is school involvement in the creation of pods. If a teacher knows that some parents from the class are intending to create a learning pod, the teacher can approach those parents and ask that disadvantaged students be included in the group. The teacher can facilitate communication between parents intending to create pods and parents with children who would benefit from being included in such a learning environment.
Another option might be for teachers to divide their students into diverse learning pods and offer ideas and resources to assist the parents of these students to form and implement the pods. While parents can't be forced to create learning pods with specific children, they may be more willing to include disadvantaged students if it is suggested by their child's teacher.
Another area that separates disadvantaged students from other students is their access to resources. Students in learning pods formed by affluent families will likely have plenty of access to technology devices and learning tools to support their students.
When schools are forcibly closed, it might be plausible for the government to subsidize low-income and disadvantaged student access to resources in a number of ways:
Some learning pods include a paid private tutor to offer students excellent, high-quality instruction during their school day. Students from low-income families cannot often afford this luxury but should not be disadvantaged academically.
How can teachers help students in learning pods have access to a high level of education? Implementing online instruction in a flipped classroom model could be the most efficient use of teacher and student time. In a flipped classroom, students preview recorded instructional information prior to a live teacher facilitating discussion on the topic. In this way, students would be somewhat familiar with the concepts prior to their teacher's live instruction, through Zoom or a similar platform, to answer any questions and address any issues students have. The flipped classroom method would allow teachers to spread their time between multiple learning pods due to students being prepared with alternative instruction methods prior to the teacher making contact.
SummaryI
t is not possible to address every inequality or unfairness that stems from the creation of learning pods in a time when schools are closed due to a public health crisis. No single learning environment is going to be perfect for every student nor is it going to be implemented the same for every student.
Best efforts should be made to increase the equality of the educational experience for all students in a crisis. This may mean that the government should subsidize learning space, resources (such as devices and internet access) and instruction time. Schools can encourage diversity when parents are forming learning pods. Using alternative instructional methods such as the flipped classroom method, each teacher may be able to effectively offer instruction to multiple learning pods daily.
https://study.com/academy/popular/learning-pods-and-inequality-issues-and-ideas-to-combat-unfair-treatment.html
08/10/2020 Maria Airth
Learning pods are small groups of students learning together normally independent of a traditional school system. In times of forced school closures due to public health emergencies, learning pods can be a welcome alternative to individual remote learning at home.
Unfortunately, learning pods tend to create inequality and unfair educational experiences for students. Let's look at the characteristics required for families to create a learning pod:
- Affluent enough to afford resources for multiple students.
- Affluent enough to have space for multiple students to work.
- Access to a facilitator (either parents in the group or privately sourced) with educational credentials sufficient to assist students with their learning objectives.
- Ability for a parent/guardian to remain home to facilitate the learning pod.
- Geographic proximity to other members of a learning pod.
- Access to experts to facilitate students with special needs.
- It is clear from this list that many students who live in socio-economic hardship would not be able to participate in a typical learning pod.
Due to the need for geographic proximity to create a learning pod, especially during times of public health crises, learning pods can create unintentional segregation in education.
Knowing how inequalities in education can come about when learning pods are created in response to school closures is the first part of the battle. Addressing these inequalities is the most important part of winning the battle against unfair treatment in education.
One main issue with many learning pods is a lack of diversity in the pod. Minority students and children from low-income families may not have the resources to participate in learning pods.
A method to address this issue is school involvement in the creation of pods. If a teacher knows that some parents from the class are intending to create a learning pod, the teacher can approach those parents and ask that disadvantaged students be included in the group. The teacher can facilitate communication between parents intending to create pods and parents with children who would benefit from being included in such a learning environment.
Another option might be for teachers to divide their students into diverse learning pods and offer ideas and resources to assist the parents of these students to form and implement the pods. While parents can't be forced to create learning pods with specific children, they may be more willing to include disadvantaged students if it is suggested by their child's teacher.
Another area that separates disadvantaged students from other students is their access to resources. Students in learning pods formed by affluent families will likely have plenty of access to technology devices and learning tools to support their students.
When schools are forcibly closed, it might be plausible for the government to subsidize low-income and disadvantaged student access to resources in a number of ways:
- Allow libraries to loan out computers, laptops and other learning devices to learning pods with disadvantaged students.
- Pay teachers and/or substitute teachers to attend some learning pods (safely, using social distancing restrictions) to ensure that the students are progressing.
- Offer space in libraries or schools to learning pods that include disadvantaged students.
- Ensure that all students on an IEP, or special education plan, have internet access and devices with which to access the internet so that they can contact specialists to assist with their individual educational needs.
- Offer internet access to learning pods with disadvantaged students.
Some learning pods include a paid private tutor to offer students excellent, high-quality instruction during their school day. Students from low-income families cannot often afford this luxury but should not be disadvantaged academically.
How can teachers help students in learning pods have access to a high level of education? Implementing online instruction in a flipped classroom model could be the most efficient use of teacher and student time. In a flipped classroom, students preview recorded instructional information prior to a live teacher facilitating discussion on the topic. In this way, students would be somewhat familiar with the concepts prior to their teacher's live instruction, through Zoom or a similar platform, to answer any questions and address any issues students have. The flipped classroom method would allow teachers to spread their time between multiple learning pods due to students being prepared with alternative instruction methods prior to the teacher making contact.
SummaryI
t is not possible to address every inequality or unfairness that stems from the creation of learning pods in a time when schools are closed due to a public health crisis. No single learning environment is going to be perfect for every student nor is it going to be implemented the same for every student.
Best efforts should be made to increase the equality of the educational experience for all students in a crisis. This may mean that the government should subsidize learning space, resources (such as devices and internet access) and instruction time. Schools can encourage diversity when parents are forming learning pods. Using alternative instructional methods such as the flipped classroom method, each teacher may be able to effectively offer instruction to multiple learning pods daily.
https://study.com/academy/popular/learning-pods-and-inequality-issues-and-ideas-to-combat-unfair-treatment.html
Oversight group says SBA misled public on disaster loan fraud
Internal emails show the agency was scrambling to clamp down on fraudulent loans from the Economic Injury Disaster Loan program.
A government watchdog group said in a report published Wednesday that the Small Business Administration misled the public about its ability to prevent fraud in a disaster business loan program.
The Project on Government Oversight (POGO), citing internal emails said the SBA was scrambling through mid-August to clamp down on fraudulent loans from the Economic Injury Disaster Loan (EIDL) program. That counters assertions from SBA Administrator Jovita Carranza to the agency's inspector general in late July that solutions to reported problems were already in place, the group says.
https://www.pogo.org/investigation/2020/09/a-disaster-small-business-administration-scrambling-to-stop-pandemic-loan-fraud/
Internal emails show the agency was scrambling to clamp down on fraudulent loans from the Economic Injury Disaster Loan program.
A government watchdog group said in a report published Wednesday that the Small Business Administration misled the public about its ability to prevent fraud in a disaster business loan program.
The Project on Government Oversight (POGO), citing internal emails said the SBA was scrambling through mid-August to clamp down on fraudulent loans from the Economic Injury Disaster Loan (EIDL) program. That counters assertions from SBA Administrator Jovita Carranza to the agency's inspector general in late July that solutions to reported problems were already in place, the group says.
https://www.pogo.org/investigation/2020/09/a-disaster-small-business-administration-scrambling-to-stop-pandemic-loan-fraud/
A new report outlines the efforts of a team paid by the Centers for Medicare and Medicaid Services to enhance Administrator Verma’s personal image, obtain profiles and coverage from friendly reporters
https://drive.google.com/file/d/1nezMXLk6auFtFn4bzLy26k0P5CVI1Zow/view
https://drive.google.com/file/d/1nezMXLk6auFtFn4bzLy26k0P5CVI1Zow/view
Fishy Price Fixing Leads to 40-month Jail Stint
By Darley Maw on June 30, 2020POSTED IN PRICE-FIXING
On June 16, following a monthlong trial, Christopher Lischewski, former CEO and president of Bumble Bee Foods LLC, was sentenced by Judge Edward Chen of the Northern District of California to 40 months in prison plus a $100,000 fine for orchestrating a canned tuna price-fixing conspiracy. Lischewski’s sentence demonstrates the punishment individuals should be prepared to face if involved in price fixing and that such criminal behavior cannot be shielded by any corporate protections. Assistant Attorney General Makan Delrahim, head of the Department of Justice’s Antitrust Division, remarked that “[t]he sentence imposed … will serve as a significant deterrent in the C-suite and the boardroom.”[1] Indeed, Chen himself stated that Lischewski’s sentence was intended to send a message of general deterrence, particularly where a basic food staple relied upon by many households is concerned.
After a lengthy government investigation, Lischewski, along with other senior executives in the packaged seafood industry, was charged in 2018 with one count of price fixing. During his trial, the government showed evidence of Lischewski’s involvement with competitors and colleagues in the conspiracy, such as sharing pricing information with other executives in the canned tuna industry, including at Chicken of the Sea and Starkist, and their efforts to keep such meetings and communications covert. Lischewski’s defense argued that the government failed to show that consumers were harmed by any such price fixing, an element required in this kind of criminal case. Ultimately, however, the jury found Lischewski guilty of one count of price fixing. His attorneys have indicated they plan on filing an appeal.
Lischewski’s trial and sentence serve as an example to show compliance officers and in-house counsel what could happen without an effective and robust compliance program in place. Here, Bumble Bee had pleaded guilty for its role in a price-fixing conspiracy and already had agreed to pay a $25 million fine. Though when this sort of anticompetitive action happens, typically no one gets a prison sentence. And for many corporations, while a multimillion-dollar fine definitely hurts, it may not be enough of a deterrent (though in Bumble Bee’s situation, it did hurt, as the company had to file for Chapter 11 bankruptcy protection at the end of last year). But seeing Lischewski face prison time for more than three years, the punishment of breaking the law seems much more palpable. And in addition to the criminal punishment, Lischewski also now faces susceptibility to civil lawsuits.
The pursuit of Lischewski – from investigation to sentencing – must put all executives and business leaders on high alert that individuals who are involved in price fixing or other anticompetitive conduct will be held accountable by the government. Corporate heads should refrain from sharing pricing information with competitors and, likewise, should not take the bait when such information is requested. Pun intended.
[1] https://www.justice.gov/opa/pr/former-bumble-bee-ceo-sentenced-prison-fixing-prices-canned-tuna.
https://www.antitrustadvocate.com/2020/06/30/fishy-price-fixing-leads-to-40-month-jail-stint/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_campaign=7aa08c09dc-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_a95f379648-7aa08c09dc-70980973
By Darley Maw on June 30, 2020POSTED IN PRICE-FIXING
On June 16, following a monthlong trial, Christopher Lischewski, former CEO and president of Bumble Bee Foods LLC, was sentenced by Judge Edward Chen of the Northern District of California to 40 months in prison plus a $100,000 fine for orchestrating a canned tuna price-fixing conspiracy. Lischewski’s sentence demonstrates the punishment individuals should be prepared to face if involved in price fixing and that such criminal behavior cannot be shielded by any corporate protections. Assistant Attorney General Makan Delrahim, head of the Department of Justice’s Antitrust Division, remarked that “[t]he sentence imposed … will serve as a significant deterrent in the C-suite and the boardroom.”[1] Indeed, Chen himself stated that Lischewski’s sentence was intended to send a message of general deterrence, particularly where a basic food staple relied upon by many households is concerned.
After a lengthy government investigation, Lischewski, along with other senior executives in the packaged seafood industry, was charged in 2018 with one count of price fixing. During his trial, the government showed evidence of Lischewski’s involvement with competitors and colleagues in the conspiracy, such as sharing pricing information with other executives in the canned tuna industry, including at Chicken of the Sea and Starkist, and their efforts to keep such meetings and communications covert. Lischewski’s defense argued that the government failed to show that consumers were harmed by any such price fixing, an element required in this kind of criminal case. Ultimately, however, the jury found Lischewski guilty of one count of price fixing. His attorneys have indicated they plan on filing an appeal.
Lischewski’s trial and sentence serve as an example to show compliance officers and in-house counsel what could happen without an effective and robust compliance program in place. Here, Bumble Bee had pleaded guilty for its role in a price-fixing conspiracy and already had agreed to pay a $25 million fine. Though when this sort of anticompetitive action happens, typically no one gets a prison sentence. And for many corporations, while a multimillion-dollar fine definitely hurts, it may not be enough of a deterrent (though in Bumble Bee’s situation, it did hurt, as the company had to file for Chapter 11 bankruptcy protection at the end of last year). But seeing Lischewski face prison time for more than three years, the punishment of breaking the law seems much more palpable. And in addition to the criminal punishment, Lischewski also now faces susceptibility to civil lawsuits.
The pursuit of Lischewski – from investigation to sentencing – must put all executives and business leaders on high alert that individuals who are involved in price fixing or other anticompetitive conduct will be held accountable by the government. Corporate heads should refrain from sharing pricing information with competitors and, likewise, should not take the bait when such information is requested. Pun intended.
[1] https://www.justice.gov/opa/pr/former-bumble-bee-ceo-sentenced-prison-fixing-prices-canned-tuna.
https://www.antitrustadvocate.com/2020/06/30/fishy-price-fixing-leads-to-40-month-jail-stint/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_campaign=7aa08c09dc-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_a95f379648-7aa08c09dc-70980973
DOJ’s Antitrust Division Targets Commercial Flooring Industry for Criminal Cartel Activity
BY MICHAEL VOLKOV · SEPTEMBER 8, 2020
EXCERPT:
DOJ’s Antitrust Division is increasing criminal antitrust enforcement. After two relatively slow years of criminal enforcement, the Antitrust Division’s criminal enforcement program is steadily increasing. The next five years promises to be a time of aggressive criminal cartel enforcement.
DOJ’s Antitrust Division has been racking up indictments and guilty pleas in a long-time cartel operating in the commercial flooring and services industry in the Chicago area. Nine companies were involved in the long-running conspiracy involving bid-rigging for flooring contracts.
DOJ has identified at least 15 instances of bid-rigging for certain jobs valued from $11,000 to more than $3.3 million. The contracts involved not only public schools but also hospitals, an electronics company, a professional services firm and a broadband provider.
From https://blog.volkovlaw.com/2020/09/dojs-antitrust-division-targets-commercial-flooring-industry-for-criminal-cartel-activity/
BY MICHAEL VOLKOV · SEPTEMBER 8, 2020
EXCERPT:
DOJ’s Antitrust Division is increasing criminal antitrust enforcement. After two relatively slow years of criminal enforcement, the Antitrust Division’s criminal enforcement program is steadily increasing. The next five years promises to be a time of aggressive criminal cartel enforcement.
DOJ’s Antitrust Division has been racking up indictments and guilty pleas in a long-time cartel operating in the commercial flooring and services industry in the Chicago area. Nine companies were involved in the long-running conspiracy involving bid-rigging for flooring contracts.
DOJ has identified at least 15 instances of bid-rigging for certain jobs valued from $11,000 to more than $3.3 million. The contracts involved not only public schools but also hospitals, an electronics company, a professional services firm and a broadband provider.
From https://blog.volkovlaw.com/2020/09/dojs-antitrust-division-targets-commercial-flooring-industry-for-criminal-cartel-activity/
Protection of low wage workers declines during coronavirus recession
https://equitablegrowth.org/research-paper/maintaining-effective-u-s-labor-standards-enforcement-through-the-coronavirus-recession/
https://equitablegrowth.org/research-paper/maintaining-effective-u-s-labor-standards-enforcement-through-the-coronavirus-recession/
USDOJ filing taking over Trump's defamation defense in Carroll rape denial case
https://int.nyt.com/data/documenttools/trump-justice-department-e-jean-carroll/cc7606ac221ce832/full.pdf
https://int.nyt.com/data/documenttools/trump-justice-department-e-jean-carroll/cc7606ac221ce832/full.pdf
DAR Note: The following is by an apparent Biden partisan, but the topic is of broader interest, and is suggestive for Trump partisans as well
Fed Paper's Inadvertent Antitrust Policy Questions For Biden
By Christopher Kelly
Excerpt, footnotes omitted:
No one confuses the Federal Reserve Board with the American Antitrust Institute. The Fed's concern is financial stability, not competition. But a recent working paper from two Fed staff economists[1] points up a potentially major role for antitrust enforcement in a Joe Biden administration, one well beyond heightened merger scrutiny and tougher standards for platform industries.
By identifying increased market power as a cause of the income and wealth inequality that has become a subject of intense public debate and, not coincidentally, a key issue for Democratic presidential candidate Biden's campaign, the paper implicitly raises the possibility that antitrust enforcement could take on urgency and aggressiveness well beyond what the predictable campaign positions have suggested and be used to address a core societal issue.
The paper's focus is narrow: Consistent with the Fed's mission to "foster the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems and to promote optimal economic performance,"[2] it examines a collective increase in firms' market power over the past 40 years as a cause of an increased risk of financial crises like that of 2008 (defined as "events during which a country's banking sector experiences bank runs, sharp increases in default rates accompanied by large losses of capital that result in public intervention, bankruptcy, or forced merger of financial institutions").[3]
But the paper concludes that the market-power increase raised that risk by triggering a chain reaction of noncyclical (in economics terms, "secular") trends that themselves are major policy hot buttons. To simplify the paper's chain reaction:
From the Fed's standpoint, the critical policy concern is that the rise of market power has made financial crises like that of 2008 more likely. But the findings that, along the way, market power led to increased income and wealth inequality play directly into the broader discussions of economic equity that have become part of this year's presidential campaign.
The paper's implications for antitrust enforcement seem inadvertent. The word "antitrust" appears only once, in a sidelong mention in a footnote, so antitrust law does not appear as a potential solution to the problem.
To the contrary, the authors propose a back-end fix: They suggest redistributing the market-power-driven profits back to the working class through an income tax specifically because the tax (unlike antitrust enforcement) would not distort marketplace decisions. But no one interested in shaping antitrust policy in a potential Biden administration would miss the underlying questions of whether antitrust law's retreat at the outset of this 40-year period into "a mild constraint on a relatively small set of practices that pose a threat to allocative efficiency"[4] contributed to these secular trends and, if so, whether shifting antitrust law's goal from mere allocative efficiency to economic equity could be an important part of the solution.
Christopher J. Kelly is a partner at Mayer Brown LLP.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] Isabel Cairó & Jae Sim (2020). Market Power, Inequality, and Financial Instability, Finance and Economics Discussion Series 2020-057. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2020.057.
From https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2020/09/law360--fed-papers-inadvertent-antitrust-policy-questions-for-biden.pdf
Fed Paper's Inadvertent Antitrust Policy Questions For Biden
By Christopher Kelly
Excerpt, footnotes omitted:
No one confuses the Federal Reserve Board with the American Antitrust Institute. The Fed's concern is financial stability, not competition. But a recent working paper from two Fed staff economists[1] points up a potentially major role for antitrust enforcement in a Joe Biden administration, one well beyond heightened merger scrutiny and tougher standards for platform industries.
By identifying increased market power as a cause of the income and wealth inequality that has become a subject of intense public debate and, not coincidentally, a key issue for Democratic presidential candidate Biden's campaign, the paper implicitly raises the possibility that antitrust enforcement could take on urgency and aggressiveness well beyond what the predictable campaign positions have suggested and be used to address a core societal issue.
The paper's focus is narrow: Consistent with the Fed's mission to "foster the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems and to promote optimal economic performance,"[2] it examines a collective increase in firms' market power over the past 40 years as a cause of an increased risk of financial crises like that of 2008 (defined as "events during which a country's banking sector experiences bank runs, sharp increases in default rates accompanied by large losses of capital that result in public intervention, bankruptcy, or forced merger of financial institutions").[3]
But the paper concludes that the market-power increase raised that risk by triggering a chain reaction of noncyclical (in economics terms, "secular") trends that themselves are major policy hot buttons. To simplify the paper's chain reaction:
- The increased market power, in both product and labor markets, has reduced the labor income share and, to a much lesser degree, the capital share of total output.
- The reduced labor and capital shares necessarily increase the profit share of output.
- The increased profit share increases income inequality by raising the income of the most wealthy households, whose income is driven by stock ownership, relative to the less wealthy, whose income is based primarily on wages.
- Because the wealthy have a relatively high marginal propensity to save, the skewed income also increases wealth inequality between wealthy and less wealthy households.
- Less wealthy households respond to their decreasing relative income and wealth by increasing borrowing (from, in effect, the wealthy households).
- The resulting increased credit-to-GDP ratio leads in turn to a significantly increased probability of a financial crisis.
From the Fed's standpoint, the critical policy concern is that the rise of market power has made financial crises like that of 2008 more likely. But the findings that, along the way, market power led to increased income and wealth inequality play directly into the broader discussions of economic equity that have become part of this year's presidential campaign.
The paper's implications for antitrust enforcement seem inadvertent. The word "antitrust" appears only once, in a sidelong mention in a footnote, so antitrust law does not appear as a potential solution to the problem.
To the contrary, the authors propose a back-end fix: They suggest redistributing the market-power-driven profits back to the working class through an income tax specifically because the tax (unlike antitrust enforcement) would not distort marketplace decisions. But no one interested in shaping antitrust policy in a potential Biden administration would miss the underlying questions of whether antitrust law's retreat at the outset of this 40-year period into "a mild constraint on a relatively small set of practices that pose a threat to allocative efficiency"[4] contributed to these secular trends and, if so, whether shifting antitrust law's goal from mere allocative efficiency to economic equity could be an important part of the solution.
Christopher J. Kelly is a partner at Mayer Brown LLP.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] Isabel Cairó & Jae Sim (2020). Market Power, Inequality, and Financial Instability, Finance and Economics Discussion Series 2020-057. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2020.057.
From https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2020/09/law360--fed-papers-inadvertent-antitrust-policy-questions-for-biden.pdf
Biopharma leaders unite to stand with science
- Nine CEOs sign pledge to continue to make the safety and well-being of vaccinated individuals the top priority in development of the first COVID-19 vaccines
NEW YORK – September 8, 2020 – The CEOs of AstraZeneca (LSE/STO/NYSE: AZN), BioNTech (NASDAQ: BNTX), GlaxoSmithKline plc (LSE/NYSE: GSK), Johnson & Johnson (NYSE: JNJ), Merck (NYSE: MRK), known as MSD outside the United States and Canada, Moderna, Inc. (Nasdaq: MRNA), Novavax, Inc. (Nasdaq: NVAX), Pfizer Inc. (NYSE: PFE), and Sanofi (NASDAQ: SNY) today announced a historic pledge, outlining a united commitment to uphold the integrity of the scientific process as they work towards potential global regulatory filings and approvals of the first COVID-19 vaccines.
All nine CEOs signed the following pledge:
We, the undersigned biopharmaceutical companies, want to make clear our on-going commitment to developing and testing potential vaccines for COVID-19 in accordance with high ethical standards and sound scientific principles.
The safety and efficacy of vaccines, including any potential vaccine for COVID-19, is reviewed and determined by expert regulatory agencies around the world, such as the United States Food and Drug Administration (FDA). FDA has established clear guidance for the development of COVID-19 vaccines and clear criteria for their potential authorization or approval in the US. FDA’s guidance and criteria are based on the scientific and medical principles necessary to clearly demonstrate the safety and efficacy of potential COVID-19 vaccines. More specifically, the agency requires that scientific evidence for regulatory approval must come from large, high quality clinical trials that are randomized and observer-blinded, with an expectation of appropriately designed studies with significant numbers of participants across diverse populations.
Following guidance from expert regulatory authorities such as FDA regarding the development of COVID-19 vaccines, consistent with existing standards and practices, and in the interest of public health, we pledge to:
From: http://www.news.sanofi.us/2020-09-08-Biopharma-leaders-unite-to-stand-with-science
- Nine CEOs sign pledge to continue to make the safety and well-being of vaccinated individuals the top priority in development of the first COVID-19 vaccines
NEW YORK – September 8, 2020 – The CEOs of AstraZeneca (LSE/STO/NYSE: AZN), BioNTech (NASDAQ: BNTX), GlaxoSmithKline plc (LSE/NYSE: GSK), Johnson & Johnson (NYSE: JNJ), Merck (NYSE: MRK), known as MSD outside the United States and Canada, Moderna, Inc. (Nasdaq: MRNA), Novavax, Inc. (Nasdaq: NVAX), Pfizer Inc. (NYSE: PFE), and Sanofi (NASDAQ: SNY) today announced a historic pledge, outlining a united commitment to uphold the integrity of the scientific process as they work towards potential global regulatory filings and approvals of the first COVID-19 vaccines.
All nine CEOs signed the following pledge:
We, the undersigned biopharmaceutical companies, want to make clear our on-going commitment to developing and testing potential vaccines for COVID-19 in accordance with high ethical standards and sound scientific principles.
The safety and efficacy of vaccines, including any potential vaccine for COVID-19, is reviewed and determined by expert regulatory agencies around the world, such as the United States Food and Drug Administration (FDA). FDA has established clear guidance for the development of COVID-19 vaccines and clear criteria for their potential authorization or approval in the US. FDA’s guidance and criteria are based on the scientific and medical principles necessary to clearly demonstrate the safety and efficacy of potential COVID-19 vaccines. More specifically, the agency requires that scientific evidence for regulatory approval must come from large, high quality clinical trials that are randomized and observer-blinded, with an expectation of appropriately designed studies with significant numbers of participants across diverse populations.
Following guidance from expert regulatory authorities such as FDA regarding the development of COVID-19 vaccines, consistent with existing standards and practices, and in the interest of public health, we pledge to:
- Always make the safety and well-being of vaccinated individuals our top priority.
- Continue to adhere to high scientific and ethical standards regarding the conduct of clinical trials and the rigor of manufacturing processes.
- Only submit for approval or emergency use authorization after demonstrating safety and efficacy through a Phase 3 clinical study that is designed and conducted to meet requirements of expert regulatory authorities such as FDA.[emphasis added by DAR]
- Work to ensure a sufficient supply and range of vaccine options, including those suitable for global access.
From: http://www.news.sanofi.us/2020-09-08-Biopharma-leaders-unite-to-stand-with-science
A group of drug companies competing with one another to be among the first to develop coronavirus vaccines are planning to pledge early next week that they will not release any vaccines that do not follow rigorous efficacy and safety standards, according to representatives of three of the companies.
The statement, which has not yet been finalized, is meant to reassure the public that the companies will not seek a premature approval of vaccines under political pressure from the Trump administration. A New York Times headline calls the agreement a "Joint Pledge on Vaccine Safety."
President Trump has pushed for a vaccine to be available by October — just before the presidential election — and a growing number of scientists, regulators and public health experts have expressed concern over what they see as a pattern of political arm-twisting by the Trump administration in its efforts to combat the virus.
The companies’ joint statement was planned for early next week, but it may be released before then after its existence was made public on Friday by The Wall Street Journal. The manufacturers that are said to have signed the letter include Pfizer, Moderna, Johnson & Johnson, GlaxoSmithKline and Sanofi.
The pharmaceutical companies are not the only ones pushing back. Senior regulators at the Food and Drug Administration have been discussing making their own joint public statement about the need to rely on proven science, according to two senior administration officials, a move that would breach their usual reticence as civil servants.
From: https://www.nytimes.com/2020/09/04/science/covid-vaccine-pharma-pledge.html?action=click&module=Top%20Stories&pgtype=Homepage
DAR Comment: The expected collaboration announcement by Pfizer, Moderna, Johnson & Johnson, GlaxoSmithKline and Sanofi causes some consternation among antitrust experts. Even collaborations for ostensibly good public interest purposes cause worry that other and darker collaborative actions might be facilitated. Here the companies pledge that they will not ask government regulators to approve new vaccines as safe and effective unless the vaccines actually have proven to be safe and effective. The joint pledge seems to include agreeing that no one company will rush ahead to ask emergency approval, a risky but possibly profitable step depending on real world experience with the vaccine. The collaboration is a response to perceived government disfunction -- government arm twisting to release vaccines before election day even if they are not proven safe and effective.
Over time many collaborators have justified their collusive conduct by calling on public interest justifications. On the other hand, this may be a situation where one's broad view of the politics and the public interest trumps parsing the relevant antitrust law. Avoiding premature release of a vaccine that turns out after election day to be unsafe or ineffective may seem more important than resolving antitrust issues like rule of reason or procompetitive effects versus anticompetitive effects.
PS. I am grateful that someone suggested comparison to Georgia restaurants that agreed to stay closed despite the Governor's order allowing them to open. See https://thehill.com/changing-america/well-being/prevention-cures/495712-more-than-120-atlanta-restaurants-refuse-to-open
Russian government sponsored voting propaganda in plain sight
By Don Allen Resnikoff:
The media suggests that Russian operatives are spreading disinformation in order to influence the Presidential election. The disinformation effort is said to frequently be surreptitious, known to U.S. intelligence people, but largely hidden from the general public.
Recently an acquaintance sent me a YouTube link featuring a “comedian” in the John Oliver mold who was leading a discussion on the perils of mail in ballots for the Trump v. Biden Presidential vote. The main peril, briefly put, is that the mail-in ballots won’t be counted. The YouTube link is here. https://www.youtube.com/watch?v=qT8YUyNuirE
After a little searching I found that Wikopedia says of the interviewer-comedian Lee Camp that:
he is host and head writer of the weekly comedy news show Redacted Tonight with Lee Camp, which airs every Friday at 8pm EST on the Russian-financed RT America. Jason Zinoman wrote in The New York Times that his appearance on the channel: "raises questions about the comedian’s independence."[cites omitted] He told Rachel Manteuffel of The Washington Post Magazine that the Russian government funds his show, explaining "One of the reasons I'm at RT America is because there’s no advertising. If there were advertising, no channel really wants someone who goes after corporations as much as I do."[cite omitted]
So it may be that the video I was sent is an example of Russian Government sponsored propaganda in plain sight.
That doesn't necessarily mean that all the points about unreliability of mail-in ballots in the video are wrong, but knowing the possible Russian government propaganda link is concerning. It suggests that viewers need to take the information offered with the proverbial grain of salt, or perhaps many grains of salt. It is not unusual for propaganda to start from actual facts and real concerns and spin a further web that includes disinformation.
Following is a link to Bloomberg's coverage of the same topic, which there is reason to hope is relatively objective, fair, and balanced:
https://www.bloomberg.com/news/videos/2020-08-07/2020-year-in-crisis-vote-from-home-video
Posting is by Don Allen Resnikoff, who is responsible for its content.
By Don Allen Resnikoff:
The media suggests that Russian operatives are spreading disinformation in order to influence the Presidential election. The disinformation effort is said to frequently be surreptitious, known to U.S. intelligence people, but largely hidden from the general public.
Recently an acquaintance sent me a YouTube link featuring a “comedian” in the John Oliver mold who was leading a discussion on the perils of mail in ballots for the Trump v. Biden Presidential vote. The main peril, briefly put, is that the mail-in ballots won’t be counted. The YouTube link is here. https://www.youtube.com/watch?v=qT8YUyNuirE
After a little searching I found that Wikopedia says of the interviewer-comedian Lee Camp that:
he is host and head writer of the weekly comedy news show Redacted Tonight with Lee Camp, which airs every Friday at 8pm EST on the Russian-financed RT America. Jason Zinoman wrote in The New York Times that his appearance on the channel: "raises questions about the comedian’s independence."[cites omitted] He told Rachel Manteuffel of The Washington Post Magazine that the Russian government funds his show, explaining "One of the reasons I'm at RT America is because there’s no advertising. If there were advertising, no channel really wants someone who goes after corporations as much as I do."[cite omitted]
So it may be that the video I was sent is an example of Russian Government sponsored propaganda in plain sight.
That doesn't necessarily mean that all the points about unreliability of mail-in ballots in the video are wrong, but knowing the possible Russian government propaganda link is concerning. It suggests that viewers need to take the information offered with the proverbial grain of salt, or perhaps many grains of salt. It is not unusual for propaganda to start from actual facts and real concerns and spin a further web that includes disinformation.
Following is a link to Bloomberg's coverage of the same topic, which there is reason to hope is relatively objective, fair, and balanced:
https://www.bloomberg.com/news/videos/2020-08-07/2020-year-in-crisis-vote-from-home-video
Posting is by Don Allen Resnikoff, who is responsible for its content.
Amazon Is Spying on Its Workers in Closed Facebook Groups, Internal Reports Show
The company is surveilling dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet.
By Lauren Kaori Gurley
By Joseph Cox
September 1, 2020, 7:53pm
Amazon is monitoring the conversations of Amazon Flex drivers in dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet and viewed by Motherboard. According to the files left online, Amazon corporate employees are getting regular reports about the social media posts of its Flex drivers on nominally private pages, and are using these reports to diagnose problems as well as monitor, for example, drivers "planning for any strike or protest against Amazon."
Among the files left online is a document called “social media monitoring” that lists closed Amazon Flex Driver Facebook groups and websites across the world, as well as open Flex driver Subreddits, and the Twitter keyword "Amazon Flex." Forty three of the Facebook groups are run by drivers in different cities in the United States.
“The following social forums mentioned in the table are to be monitored during the Social media process,” the document reads. Facebook groups being monitored include “Amazon Flex Drivers of Los Angeles,” “Amazon Flex Drivers,” “deactivated Amazon Drivers,” and dozens of others.
Amazon seemingly asked employees to keep this monitoring secret.
https://www.vice.com/en_ca/article/3azegw/amazon-is-spying-on-its-workers-in-closed-facebook-groups-internal-reports-show
The company is surveilling dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet.
By Lauren Kaori Gurley
By Joseph Cox
September 1, 2020, 7:53pm
Amazon is monitoring the conversations of Amazon Flex drivers in dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet and viewed by Motherboard. According to the files left online, Amazon corporate employees are getting regular reports about the social media posts of its Flex drivers on nominally private pages, and are using these reports to diagnose problems as well as monitor, for example, drivers "planning for any strike or protest against Amazon."
Among the files left online is a document called “social media monitoring” that lists closed Amazon Flex Driver Facebook groups and websites across the world, as well as open Flex driver Subreddits, and the Twitter keyword "Amazon Flex." Forty three of the Facebook groups are run by drivers in different cities in the United States.
“The following social forums mentioned in the table are to be monitored during the Social media process,” the document reads. Facebook groups being monitored include “Amazon Flex Drivers of Los Angeles,” “Amazon Flex Drivers,” “deactivated Amazon Drivers,” and dozens of others.
Amazon seemingly asked employees to keep this monitoring secret.
https://www.vice.com/en_ca/article/3azegw/amazon-is-spying-on-its-workers-in-closed-facebook-groups-internal-reports-show
10th Circuit nixes Oklahoma City panhandling restrictions
The US Court of Appeals for the 10th Circuit has held that an anti-panhandling law in Oklahoma City runs afoul of constitutional free speech protections. The ordinance prohibited pedestrians in roadway medians, which the court said "share fundamental characteristics with public streets, sidewalks and parks, which are quintessential public fora."
Full Story: https://apnews.com/dd2c9484747abf5e2347d6bb182c03ec
The US Court of Appeals for the 10th Circuit has held that an anti-panhandling law in Oklahoma City runs afoul of constitutional free speech protections. The ordinance prohibited pedestrians in roadway medians, which the court said "share fundamental characteristics with public streets, sidewalks and parks, which are quintessential public fora."
Full Story: https://apnews.com/dd2c9484747abf5e2347d6bb182c03ec
California's proposal for its own CFPB is back on track
...https://www.housingwire.com/articles/californias...Aug 18, 2020 ·
The proposal to create a “mini-CFPB” in the state was added to a pending budget bill after being dropped in June.
...https://www.housingwire.com/articles/californias...Aug 18, 2020 ·
The proposal to create a “mini-CFPB” in the state was added to a pending budget bill after being dropped in June.
Michael Kades on antitrust enforcement:
The curious case of the federal prosecutor who sided with defendants
Excerpt:
Let’s look at three cases that are emblematic of this antitrust tilt toward defendants in antitrust cases brought by other antitrust agencies. As Equitable Growth recently reiterated, the United States has a monopoly power problem. During this critical moment, however, the Trump administration’s antitrust legacy at the Department Justice may be to limit the ability of the antitrust laws to combat that problem. Rather than criticizing other agencies for bringing cases, the leadership at the Department of Justice and its Antitrust Division would better serve the country by enforcing the law.
Peabody-Arch Coal: The most recent intervention
Let’s start with the most recent action. Back in February 2020, in a 4-1 vote, the Federal Trade Commission sought to block a joint venture (a form of coordination that is less than a full merger but still subject to the antitrust laws) between Peabody Energy Corporation and Arch Coal, Inc. According to the complaint, the two companies are combining their coal mines located in the Southern Powder River Basin in Wyoming. They are the two largest coal mines in the Southern Powder River Basin and fierce, direct competitors.
According to the Commission’s complaint, coal from this region is different than other coal. It is cheaper to mine, being close to the surface. It is cleaner to burn. And it boasts a higher heat content. This is why the Federal Trade Commission argues that the proposed post-merger joint venture would be able to increase the price of its coal—it won’t be profitable for utilities to shift to other types of coal or other types of energy. Currently, the agency is seeking a preliminary judgement in federal court to prevent the joint venture.
If granted, that injunction would block the deal until the FTC’s litigation on the full merits is concluded, which is an administrative trial. The federal court held a 9-day hearing on the request for a preliminary injunction, with the parties now awaiting the court’s judgment. The administrative trial is scheduled to start on December 1, 2020, before the FTC’s administrative law judge.
So far, this is a pretty standard antitrust complaint. It includes high market shares, direct competitors, and limited alternatives. Could the Federal Trade Commission be wrong? Maybe, which is why the agency has to go to court and convince a judge that the evidence supports its case.
Here is what is not so standard. After meeting with Wyoming Gov. Mark Gordon (R), who supports the merger, Attorney General Barr announced he was going to review the FTC’s case: “If I reach a conclusion in which I feel like the merger would benefit competition,” he explained, “then I will try to use whatever authority I have to rectify the situation.”
A judge will decide the merits of the Peabody-Arch Coal case, so let’s focus on Government 101. The Federal Trade Commission is an independent agency. It was created to be separate from the U.S. Department of Justice. Neither the Department of Justice nor Attorney General Barr have any formal authority over the FTC’s decision to bring an antitrust case. But the Department of Justice can interfere. It can file statements of interest in the case or intervene in an ongoing litigation.
The parties will almost certainly quote as often as possible Attorney General Barr’s statement: “It sounds to me like the whole picture wasn’t looked at here.” Why interfere in this case? It is not as though the agency has a reputation for being overly aggressive. It currently has three Republican commissioners, two of whom—Chairman Joe Simmons and Commissioner Noah Phillips—supported the action. Both a majority of the Commission and a majority of the majority party at the agency supported blocking the joint venture.
Qualcomm: Opposing monopolization cases
Next up is the semiconductor monopoly case involving Qualcomm Inc. In 2017, the Federal Trade Commission alleged that Qualcomm used licensing and supply terms to maintain its monopoly on semiconductors necessary for cell phones to work. After the trial and before the judge issued her decision, the Antitrust Division of the Department of Justice filed a statement of interest, requesting that the judge hold additional hearings on remedy if she were to rule for the FTC.
When the judge did rule in the FTC’s favor and rejected the need for more hearings, the Division sided with Qualcomm in seeking a stay of the order and asking the federal Ninth Circuit Court of Appeals to vacate the lower court’s decision. The Ninth Circuit granted the stay and recently ruled in favor of Qualcomm.
The current administration’s Antitrust Division has not brought a single monopolization case (to be fair, the Division has brought only one monopolization case this century). But it opposes this monopolization case against Qualcomm brought by the Federal Trade Commission.
Although the Justice Department (along with the Departments of Defense and Energy) raised legal issues with the district court’s decision, it also mentioned national security 17 times in one brief, an argument the Justice Department itself had to refute when it sought to break up AT&T almost 40 years ago.
T-Mobile Sprint: Defending consolidation
Then, there is the case challenging T-Mobile US Inc.’s acquisition of Sprint Corporation. In November of last year, a group of state attorneys general sued to block the deal that would reduce the number of mobile phone carriers in the United States from four to three. The Antitrust Division had entered a settlement with the two companies, agreeing not to challenge the transaction in exchange for a remedy that the Division believed would resolve any competitive concerns.
The Antitrust Division filed a Statement of Interest in the states’ case defending the merger. In its view, “The Litigating States’ strong interest in this merger does not justify their attempt to substitute their judgment for the nationwide perspective of the United States.” The Assistant Attorney General Makan Delrahim even went so far as to encourage Dish Network Corporation, which would benefit from the settlement as a buyer of some of the merging parties’ assets, to lobby lawmakers to the settlement.
In short, the Antitrust Division was asking for the very deference it had failed to show the Federal Trade Commission in the first two cases detailed above. The district court ruled against the states.
Excerpt from https://equitablegrowth.org/the-curious-case-of-the-federal-prosecutor-who-sided-with-defendants/
The curious case of the federal prosecutor who sided with defendants
Excerpt:
Let’s look at three cases that are emblematic of this antitrust tilt toward defendants in antitrust cases brought by other antitrust agencies. As Equitable Growth recently reiterated, the United States has a monopoly power problem. During this critical moment, however, the Trump administration’s antitrust legacy at the Department Justice may be to limit the ability of the antitrust laws to combat that problem. Rather than criticizing other agencies for bringing cases, the leadership at the Department of Justice and its Antitrust Division would better serve the country by enforcing the law.
Peabody-Arch Coal: The most recent intervention
Let’s start with the most recent action. Back in February 2020, in a 4-1 vote, the Federal Trade Commission sought to block a joint venture (a form of coordination that is less than a full merger but still subject to the antitrust laws) between Peabody Energy Corporation and Arch Coal, Inc. According to the complaint, the two companies are combining their coal mines located in the Southern Powder River Basin in Wyoming. They are the two largest coal mines in the Southern Powder River Basin and fierce, direct competitors.
According to the Commission’s complaint, coal from this region is different than other coal. It is cheaper to mine, being close to the surface. It is cleaner to burn. And it boasts a higher heat content. This is why the Federal Trade Commission argues that the proposed post-merger joint venture would be able to increase the price of its coal—it won’t be profitable for utilities to shift to other types of coal or other types of energy. Currently, the agency is seeking a preliminary judgement in federal court to prevent the joint venture.
If granted, that injunction would block the deal until the FTC’s litigation on the full merits is concluded, which is an administrative trial. The federal court held a 9-day hearing on the request for a preliminary injunction, with the parties now awaiting the court’s judgment. The administrative trial is scheduled to start on December 1, 2020, before the FTC’s administrative law judge.
So far, this is a pretty standard antitrust complaint. It includes high market shares, direct competitors, and limited alternatives. Could the Federal Trade Commission be wrong? Maybe, which is why the agency has to go to court and convince a judge that the evidence supports its case.
Here is what is not so standard. After meeting with Wyoming Gov. Mark Gordon (R), who supports the merger, Attorney General Barr announced he was going to review the FTC’s case: “If I reach a conclusion in which I feel like the merger would benefit competition,” he explained, “then I will try to use whatever authority I have to rectify the situation.”
A judge will decide the merits of the Peabody-Arch Coal case, so let’s focus on Government 101. The Federal Trade Commission is an independent agency. It was created to be separate from the U.S. Department of Justice. Neither the Department of Justice nor Attorney General Barr have any formal authority over the FTC’s decision to bring an antitrust case. But the Department of Justice can interfere. It can file statements of interest in the case or intervene in an ongoing litigation.
The parties will almost certainly quote as often as possible Attorney General Barr’s statement: “It sounds to me like the whole picture wasn’t looked at here.” Why interfere in this case? It is not as though the agency has a reputation for being overly aggressive. It currently has three Republican commissioners, two of whom—Chairman Joe Simmons and Commissioner Noah Phillips—supported the action. Both a majority of the Commission and a majority of the majority party at the agency supported blocking the joint venture.
Qualcomm: Opposing monopolization cases
Next up is the semiconductor monopoly case involving Qualcomm Inc. In 2017, the Federal Trade Commission alleged that Qualcomm used licensing and supply terms to maintain its monopoly on semiconductors necessary for cell phones to work. After the trial and before the judge issued her decision, the Antitrust Division of the Department of Justice filed a statement of interest, requesting that the judge hold additional hearings on remedy if she were to rule for the FTC.
When the judge did rule in the FTC’s favor and rejected the need for more hearings, the Division sided with Qualcomm in seeking a stay of the order and asking the federal Ninth Circuit Court of Appeals to vacate the lower court’s decision. The Ninth Circuit granted the stay and recently ruled in favor of Qualcomm.
The current administration’s Antitrust Division has not brought a single monopolization case (to be fair, the Division has brought only one monopolization case this century). But it opposes this monopolization case against Qualcomm brought by the Federal Trade Commission.
Although the Justice Department (along with the Departments of Defense and Energy) raised legal issues with the district court’s decision, it also mentioned national security 17 times in one brief, an argument the Justice Department itself had to refute when it sought to break up AT&T almost 40 years ago.
T-Mobile Sprint: Defending consolidation
Then, there is the case challenging T-Mobile US Inc.’s acquisition of Sprint Corporation. In November of last year, a group of state attorneys general sued to block the deal that would reduce the number of mobile phone carriers in the United States from four to three. The Antitrust Division had entered a settlement with the two companies, agreeing not to challenge the transaction in exchange for a remedy that the Division believed would resolve any competitive concerns.
The Antitrust Division filed a Statement of Interest in the states’ case defending the merger. In its view, “The Litigating States’ strong interest in this merger does not justify their attempt to substitute their judgment for the nationwide perspective of the United States.” The Assistant Attorney General Makan Delrahim even went so far as to encourage Dish Network Corporation, which would benefit from the settlement as a buyer of some of the merging parties’ assets, to lobby lawmakers to the settlement.
In short, the Antitrust Division was asking for the very deference it had failed to show the Federal Trade Commission in the first two cases detailed above. The district court ruled against the states.
Excerpt from https://equitablegrowth.org/the-curious-case-of-the-federal-prosecutor-who-sided-with-defendants/
Artist Rights Alliance Calls Out ‘Secretive Agreements’ Between Streaming Services and Major Music Publishers
Dylan Smith
August 31, 2020
1
In comments forwarded to the U.S. Copyright Office, the Artist Rights Alliance (ARA) has called out “secretive agreements” between streaming services and music publishers.
Artist Rights Alliance officials voiced their criticism of the “secretive agreements” this morning, and the corresponding statement was shared with Digital Music News. Delivered in response to the Copyright Office’s Unpaid Royalties Study (and “Notice of Inquiry” requesting expert opinions and feedback), the ARA’s statement arrives exactly four weeks after questions surfaced over whether the overarching “Black Box” initiative is doomed to fail.
While the latter comments centered on the pitfalls associated with a disproportionate degree of music industry influence upon the Mechanical Licensing Collective’s royalty-matching procedures, the ARA’s latest message takes aim at “secret, private agreements” between streaming services and publishers.
Specifically, these behind-closed-doors arrangements enable the involved parties to forego identifying and paying rightsholders based upon their number of plays, per the ARA. Instead, they serve to divvy up the mechanical royalties to major publishers by market share.
“Using market share to distribute royalties is a terrible substitute for actual matching — since market share leaders are least likely to have any unclaimed royalties of their own in the pool because they have the greatest ability and incentives to find and claim their work,” the Artist Rights Alliance’s formal inquiry to the Copyright Office continues.
From there, the ARA calls on the Copyright Office and the MLC “to aggressively investigate” agreements that circumvent the MLC and utilize market share as a benchmark for the distribution of royalties. The system should be used “as a very last resort,” according to the Washington, D.C.-based non-profit organization.
The ARA then touches on a few points aside from agreements between streaming services and major publishers. Concurring with a suggestion from the Recording Academy, ARA higher-ups recommend that the MLC delay royalty payments in order to improve their match rate – even if the process “takes more time than initially hoped.” Similarly, the entity lends support to the idea that the Music Modernization Act’s Digital Licensee Coordinator should join the MLC in identifying unmatched royalties.
“Digital services… must be required to be part of the solution, not a cause of further problems in this area,” the document indicates.
Lastly, the entity emphasizes that the purpose of eliminating Black Box royalties isn’t to simply pay out the funds to any party that will accept them, but rather, is to afford publishers and songwriters their due compensation.
Dylan Smith
August 31, 2020
1
In comments forwarded to the U.S. Copyright Office, the Artist Rights Alliance (ARA) has called out “secretive agreements” between streaming services and music publishers.
Artist Rights Alliance officials voiced their criticism of the “secretive agreements” this morning, and the corresponding statement was shared with Digital Music News. Delivered in response to the Copyright Office’s Unpaid Royalties Study (and “Notice of Inquiry” requesting expert opinions and feedback), the ARA’s statement arrives exactly four weeks after questions surfaced over whether the overarching “Black Box” initiative is doomed to fail.
While the latter comments centered on the pitfalls associated with a disproportionate degree of music industry influence upon the Mechanical Licensing Collective’s royalty-matching procedures, the ARA’s latest message takes aim at “secret, private agreements” between streaming services and publishers.
Specifically, these behind-closed-doors arrangements enable the involved parties to forego identifying and paying rightsholders based upon their number of plays, per the ARA. Instead, they serve to divvy up the mechanical royalties to major publishers by market share.
“Using market share to distribute royalties is a terrible substitute for actual matching — since market share leaders are least likely to have any unclaimed royalties of their own in the pool because they have the greatest ability and incentives to find and claim their work,” the Artist Rights Alliance’s formal inquiry to the Copyright Office continues.
From there, the ARA calls on the Copyright Office and the MLC “to aggressively investigate” agreements that circumvent the MLC and utilize market share as a benchmark for the distribution of royalties. The system should be used “as a very last resort,” according to the Washington, D.C.-based non-profit organization.
The ARA then touches on a few points aside from agreements between streaming services and major publishers. Concurring with a suggestion from the Recording Academy, ARA higher-ups recommend that the MLC delay royalty payments in order to improve their match rate – even if the process “takes more time than initially hoped.” Similarly, the entity lends support to the idea that the Music Modernization Act’s Digital Licensee Coordinator should join the MLC in identifying unmatched royalties.
“Digital services… must be required to be part of the solution, not a cause of further problems in this area,” the document indicates.
Lastly, the entity emphasizes that the purpose of eliminating Black Box royalties isn’t to simply pay out the funds to any party that will accept them, but rather, is to afford publishers and songwriters their due compensation.
NIJ: The Use-of-Force Continuum
https://nij.ojp.gov/topics/articles/use-force-continuum (USDOJ)
Date Published
August 3, 2009
Most law enforcement agencies have policies that guide their use of force. These policies describe a escalating series of actions an officer may take to resolve a situation. This continuum generally has many levels, and officers are instructed to respond with a level of force appropriate to the situation at hand, acknowledging that the officer may move from one part of the continuum to another in a matter of seconds.
An example of a use-of-force continuum follows:
https://nij.ojp.gov/topics/articles/use-force-continuum (USDOJ)
Date Published
August 3, 2009
Most law enforcement agencies have policies that guide their use of force. These policies describe a escalating series of actions an officer may take to resolve a situation. This continuum generally has many levels, and officers are instructed to respond with a level of force appropriate to the situation at hand, acknowledging that the officer may move from one part of the continuum to another in a matter of seconds.
An example of a use-of-force continuum follows:
- Officer Presence — No force is used. Considered the best way to resolve a situation.
- The mere presence of a law enforcement officer works to deter crime or diffuse a situation.
- Officers' attitudes are professional and nonthreatening.
- Verbalization — Force is not-physical.
- Officers issue calm, nonthreatening commands, such as "Let me see your identification and registration."
- Officers may increase their volume and shorten commands in an attempt to gain compliance. Short commands might include "Stop," or "Don't move."
- Empty-Hand Control — Officers use bodily force to gain control of a situation.
- Soft technique. Officers use grabs, holds and joint locks to restrain an individual.
- Hard technique. Officers use punches and kicks to restrain an individual.
- Less-Lethal Methods — Officers use less-lethal technologies to gain control of a situation.
- Blunt impact. Officers may use a baton or projectile to immobilize a combative person.
- Chemical. Officers may use chemical sprays or projectiles embedded with chemicals to restrain an individual (e.g., pepper spray).
- Conducted Energy Devices (CEDs). Officers may use CEDs to immobilize an individual. CEDs discharge a high-voltage, low-amperage jolt of electricity at a distance.
- Lethal Force — Officers use lethal weapons to gain control of a situation. Should only be used if a suspect poses a serious threat to the officer or another individual.
- Officers use deadly weapons such as firearms to stop an individual's actions.
Product Liability's Amazon Problem
Posted: 9 Jul 2020
Sean Bender
University of Pennsylvania Law School
Date Written: June 16, 2020
From the Abstract:
As Amazon has reinvented retail, tort law has struggled to keep up. Modern product liability doctrines were developed at a time when supply chains were linear and actors could be neatly cabined into roles like “seller” or “manufacturer.” By design, Amazon’s marketplace disrupts that model, removing the middlemen between manufacturers and consumers while reducing the friction that might keep foreign (or otherwise judgment-proof) manufacturers from putting dangerous products on the market. And while courts have readily held its third-party merchants strictly liable when they sell defective products through Amazon’s website, Amazon’s own role in these transactions is far less clear.
This Article proceeds in three parts. Part I begins with an overview of contemporary product liability law, discussing the origins of the strict liability rule and the rise of the Restatement (Second)’s approach to no fault recovery. Part II focuses on the doctrine’s application to Amazon, tracking the outcome of every product liability lawsuit filed against the company between 2015 and 2020. Finally, Part III is prescriptive, discussing both why and how courts should respond to Amazon’s disruption of product liability law.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3628921
Posted: 9 Jul 2020
Sean Bender
University of Pennsylvania Law School
Date Written: June 16, 2020
From the Abstract:
As Amazon has reinvented retail, tort law has struggled to keep up. Modern product liability doctrines were developed at a time when supply chains were linear and actors could be neatly cabined into roles like “seller” or “manufacturer.” By design, Amazon’s marketplace disrupts that model, removing the middlemen between manufacturers and consumers while reducing the friction that might keep foreign (or otherwise judgment-proof) manufacturers from putting dangerous products on the market. And while courts have readily held its third-party merchants strictly liable when they sell defective products through Amazon’s website, Amazon’s own role in these transactions is far less clear.
This Article proceeds in three parts. Part I begins with an overview of contemporary product liability law, discussing the origins of the strict liability rule and the rise of the Restatement (Second)’s approach to no fault recovery. Part II focuses on the doctrine’s application to Amazon, tracking the outcome of every product liability lawsuit filed against the company between 2015 and 2020. Finally, Part III is prescriptive, discussing both why and how courts should respond to Amazon’s disruption of product liability law.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3628921
Should the US border wall contract comply with competitive procurement practices that reward efficiency?
DAR comment: The Bannon border wall indictment story is related to another story where the issue is more mundane: whether government contracts for the Mexico/US border wall went to the most qualified company based on routine competitive procurement practices. Forbes and the Washington Post are among the media sources for the point that Tommy Fisher and his Fisher Industries are politically-connected and helping the Bannon We Build The Wall project. Reportedly Fisher also won US Government wall building work after repeatedly being "touted" by Trump. That touting does not mean that usual government procurement procedures were not followed, but it would be interesting to know whether Fisher's company was subjected to routine government contract vetting, as opposed to being helped into the contract by political favoritism.
Following are excerpts from Forbes:
Trump also “personally and repeatedly” lobbied for the U.S. Army Corps of Engineers to award a $1.28 billion wall-building contract to Fisher Industries, a politically-connected firm that was also helping We Build The Wall build a private portion of the wall, according to the Washington Post.
The company, which is not mentioned in the indictment, is run by GOP donor and frequent Fox News guest Tommy Fisher and won the contract after it “captured Trump's attention” and was “repeatedly touted” by him, according to CNN.
The White House declined to comment on whether Trump knew of the connection between Fisher and We Build The Wall.
The White House insisted at the time that Trump’s interest in Fisher was due to their cost efficiency. “The President is one of the country’s most successful builders and knows better than anyone how to negotiate the best deals,” White House press secretary Sarah Sanders told the Washington Post. “He wants to make sure we get the job done under budget and ahead of schedule.”
https://www.forbes.com/sites/andrewsolender/2020/08/20/trump-reportedly-gave-we-build-the-wall-his-blessing-and-tried-to-steer-1b-contract-to-its-builder/#592043263904
DAR comment: The Bannon border wall indictment story is related to another story where the issue is more mundane: whether government contracts for the Mexico/US border wall went to the most qualified company based on routine competitive procurement practices. Forbes and the Washington Post are among the media sources for the point that Tommy Fisher and his Fisher Industries are politically-connected and helping the Bannon We Build The Wall project. Reportedly Fisher also won US Government wall building work after repeatedly being "touted" by Trump. That touting does not mean that usual government procurement procedures were not followed, but it would be interesting to know whether Fisher's company was subjected to routine government contract vetting, as opposed to being helped into the contract by political favoritism.
Following are excerpts from Forbes:
Trump also “personally and repeatedly” lobbied for the U.S. Army Corps of Engineers to award a $1.28 billion wall-building contract to Fisher Industries, a politically-connected firm that was also helping We Build The Wall build a private portion of the wall, according to the Washington Post.
The company, which is not mentioned in the indictment, is run by GOP donor and frequent Fox News guest Tommy Fisher and won the contract after it “captured Trump's attention” and was “repeatedly touted” by him, according to CNN.
The White House declined to comment on whether Trump knew of the connection between Fisher and We Build The Wall.
The White House insisted at the time that Trump’s interest in Fisher was due to their cost efficiency. “The President is one of the country’s most successful builders and knows better than anyone how to negotiate the best deals,” White House press secretary Sarah Sanders told the Washington Post. “He wants to make sure we get the job done under budget and ahead of schedule.”
https://www.forbes.com/sites/andrewsolender/2020/08/20/trump-reportedly-gave-we-build-the-wall-his-blessing-and-tried-to-steer-1b-contract-to-its-builder/#592043263904
Steve Bannon and Three Defendants Indicted for $25 Million “We Build The Wall” Fraud Scheme
BY MICHAEL VOLKOV · AUGUST 24, 2020
In a surprise indictment, the US Attorney’s Office for the Southern District of New York announced that Steve Bannon, Brian Kolfage, Andrew Badolato and Timothy Shea were indicted for defrauding hundreds of thousands of donors in response to the “We Build The Wall” online fundraising campaign. The indictment charges the defendants in defrauding donors from more than $25 million.
As charged, the defendants defrauded hundreds of thousands of donors under the false pretense that all the money would be spent on the construction of the border wall between Mexico and the United States.
All four defendants were charged with conspiracy to commit wire fraud, and conspiracy to engage in money laundering. In an ironic twist (you cannot make this up), the case was investigated by the United States Postal Inspection Services, and the defendants were arrested by USPIS agents.
Kolfage, a disabled war veteran, was the founder and public face of We Build The Wall, and repeatedly assured donors would not be paid a penny. Notwithstanding this reassurance, the defendants secretly schemed to funnel hundreds of thousands of dollars to Kolfage, which he used to pay for his lavish lifestyle. To hide the scheme, the defendants not only lied to donors, they created sham invoices and accounts to launder donations and cover up the financial transaction trail.
The scheme was launched in December 2018 when the defendants launched a website for an online crowdfunding campaign, We Build The Wall. According to statements on the crowdfunding webpage, the campaign was raising funds to donate to the federal government for construction of a wall on the southern border of the United States. The website included an assurance that “100 % of your donations” would be given to the government for the construction of a wall, and if the campaign could not attain its goal, it would “refund every single penny.”
Kolfage is quoted as repeatedly and falsely stating to the public that he would “not take a penny in salary or compensation” and that “100% of the funds raised . . . will be used in the execution of our mission and purpose.” Bannon was quoted on numerous occasions as stating “we’re a volunteer organization.”
The “We Build The Wall” online campaign was an instant success. Within the first week, the site raised $17 million. Based on this success, the campaign drew scrutiny, including questions concerning Kolfage’s background and the plan to give the money to the federal government.
Later in December 2018, the crowdfunding website suspended the campaign, which by that time had raised $20 million. The website operator warned Kolfage that unless he identified a legitimate non-profit organization into which those funds could be transferred, the website would return the funds to the donors.
Kolfage enlisted Bannon and Badolato to lead the campaign. Bannon and Badolato already maintained and operated a non-profit organization to promote economic nationalism and American sovereignty. Bannon and Badolato took control of the fundraising organization and day-to-day activities, including its finances, messaging, donor outreach and operations. They created a new non-profit organization, We Build the Wall Inc., to which they proposed to transfer the money raised on the crowdfunding website., and resume operation of the fundraising activities with a modified purpose – to fund the private construction of a wall along the southern border. They also announced that donors would need to “opt in” to transfer their previous donations to the new We Build the Wall, and in effect “re-raise” the $20 million previously donated.
Starting in 2019, the defendants mislead donors and the crowdfunding website. promising them that “100 percent” of the funds would be used for construction of a wall and that Kolfage would not take a salary or compensation from the new organization.
These false representations were made in solicitations, public statements, social media posts and press appearances by Kolfage and Bannon, and others acting at their direction. In fact, Kolfage issued statements that were false and misleading and reviewed and approved by Bannon and Botolato.
To reinforce these false representations, the defendants adopted bylaws for the non-profit organization that contained false representations that none of the defendants could or would receive any compensation from the funds raised. The defendants also promoted communications that none of the Advisory Board members, which was chaired by Bannon, would receive any compensation for their services. Bannon publicly stated that he and other principals were volunteers.
Bannon and Botalato text each other that the false public statements were important to drive donations and since it “removes all taint of self-interest.”
The false representations were important to many donors and repeated to reassure donors.
All four of the defendants worked together to misappropriate hundreds of thousands of dollars for their personal use. Kolfage took more than $350,000 for personal use, including home renovations, payments for a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and credit card debt. Bannon received over $1 million from We Build The Wall through a non-profit organization under his control, which he used for personal purposes.
The four defendants employed a scheme to route payments from We Build The Wall to Kolfage through Bannon’s non-profit organization and a shell company under Shea’s control. The defendants prepared fake invoices and sham “vendor” arrangements to ensure that the pay arrangement as Kolfage noted in a text message to Badolato remained “confidential” and kept on a “need to know” basis.
Kolfage specifically requested that a specific payment be routed to his spouse. Subsequently a false 1099 was issued to his spouse and listed the services provided as “media.”
In October 2019, the defendants learned they may be under criminal investigation. They switched to encrypted text messaging, revised the website to remove the representation that Kolfage would not be compensated and added a statement that Kolfage would receive a salary beginning in January 2020.
https://blog.volkovlaw.com/
BY MICHAEL VOLKOV · AUGUST 24, 2020
In a surprise indictment, the US Attorney’s Office for the Southern District of New York announced that Steve Bannon, Brian Kolfage, Andrew Badolato and Timothy Shea were indicted for defrauding hundreds of thousands of donors in response to the “We Build The Wall” online fundraising campaign. The indictment charges the defendants in defrauding donors from more than $25 million.
As charged, the defendants defrauded hundreds of thousands of donors under the false pretense that all the money would be spent on the construction of the border wall between Mexico and the United States.
All four defendants were charged with conspiracy to commit wire fraud, and conspiracy to engage in money laundering. In an ironic twist (you cannot make this up), the case was investigated by the United States Postal Inspection Services, and the defendants were arrested by USPIS agents.
Kolfage, a disabled war veteran, was the founder and public face of We Build The Wall, and repeatedly assured donors would not be paid a penny. Notwithstanding this reassurance, the defendants secretly schemed to funnel hundreds of thousands of dollars to Kolfage, which he used to pay for his lavish lifestyle. To hide the scheme, the defendants not only lied to donors, they created sham invoices and accounts to launder donations and cover up the financial transaction trail.
The scheme was launched in December 2018 when the defendants launched a website for an online crowdfunding campaign, We Build The Wall. According to statements on the crowdfunding webpage, the campaign was raising funds to donate to the federal government for construction of a wall on the southern border of the United States. The website included an assurance that “100 % of your donations” would be given to the government for the construction of a wall, and if the campaign could not attain its goal, it would “refund every single penny.”
Kolfage is quoted as repeatedly and falsely stating to the public that he would “not take a penny in salary or compensation” and that “100% of the funds raised . . . will be used in the execution of our mission and purpose.” Bannon was quoted on numerous occasions as stating “we’re a volunteer organization.”
The “We Build The Wall” online campaign was an instant success. Within the first week, the site raised $17 million. Based on this success, the campaign drew scrutiny, including questions concerning Kolfage’s background and the plan to give the money to the federal government.
Later in December 2018, the crowdfunding website suspended the campaign, which by that time had raised $20 million. The website operator warned Kolfage that unless he identified a legitimate non-profit organization into which those funds could be transferred, the website would return the funds to the donors.
Kolfage enlisted Bannon and Badolato to lead the campaign. Bannon and Badolato already maintained and operated a non-profit organization to promote economic nationalism and American sovereignty. Bannon and Badolato took control of the fundraising organization and day-to-day activities, including its finances, messaging, donor outreach and operations. They created a new non-profit organization, We Build the Wall Inc., to which they proposed to transfer the money raised on the crowdfunding website., and resume operation of the fundraising activities with a modified purpose – to fund the private construction of a wall along the southern border. They also announced that donors would need to “opt in” to transfer their previous donations to the new We Build the Wall, and in effect “re-raise” the $20 million previously donated.
Starting in 2019, the defendants mislead donors and the crowdfunding website. promising them that “100 percent” of the funds would be used for construction of a wall and that Kolfage would not take a salary or compensation from the new organization.
These false representations were made in solicitations, public statements, social media posts and press appearances by Kolfage and Bannon, and others acting at their direction. In fact, Kolfage issued statements that were false and misleading and reviewed and approved by Bannon and Botolato.
To reinforce these false representations, the defendants adopted bylaws for the non-profit organization that contained false representations that none of the defendants could or would receive any compensation from the funds raised. The defendants also promoted communications that none of the Advisory Board members, which was chaired by Bannon, would receive any compensation for their services. Bannon publicly stated that he and other principals were volunteers.
Bannon and Botalato text each other that the false public statements were important to drive donations and since it “removes all taint of self-interest.”
The false representations were important to many donors and repeated to reassure donors.
All four of the defendants worked together to misappropriate hundreds of thousands of dollars for their personal use. Kolfage took more than $350,000 for personal use, including home renovations, payments for a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and credit card debt. Bannon received over $1 million from We Build The Wall through a non-profit organization under his control, which he used for personal purposes.
The four defendants employed a scheme to route payments from We Build The Wall to Kolfage through Bannon’s non-profit organization and a shell company under Shea’s control. The defendants prepared fake invoices and sham “vendor” arrangements to ensure that the pay arrangement as Kolfage noted in a text message to Badolato remained “confidential” and kept on a “need to know” basis.
Kolfage specifically requested that a specific payment be routed to his spouse. Subsequently a false 1099 was issued to his spouse and listed the services provided as “media.”
In October 2019, the defendants learned they may be under criminal investigation. They switched to encrypted text messaging, revised the website to remove the representation that Kolfage would not be compensated and added a statement that Kolfage would receive a salary beginning in January 2020.
https://blog.volkovlaw.com/
AAI filed an amicus brief on August 21 urging the Ninth Circuit Court of Appeals to apply proper standards to class plaintiffs seeking to rely on statistical analysis as common evidence of antitrust impact in satisfying Rule 23’s predominance requirement for class certification.
The brief was written by AAI Vice President of Advocacy Randy Stutz, with assistance from AAI Board Member Ellen Meriwether of Cafferty Clobes Meriwether & Sprengel and AAI Research Fellow Henry Visser Melville.
Here is the AAI's statement about the brief:
AAI filed an amicus brief on August 21 urging the Ninth Circuit Court of Appeals to apply proper standards to class plaintiffs seeking to rely on statistical analysis as common evidence of antitrust impact in satisfying Rule 23’s predominance requirement for class certification.
In In re Packaged Seafood Antitrust Litig., a district court certified three classes of purchasers, including direct purchasers and two groups of indirect purchasers, seeking to recover for the confessed price fixing of the three leading producers of packaged tuna, Bumble Bee Foods LLC, Starkist, and Chicken of the Sea. The defendants had either sought leniency or pled guilty after a Department of Justice Investigation, and several of their executives have been sentenced to prison.
Unable to contest liability given their admissions, the defendants focused extensive resources and attention on defeating class certification. In district court proceedings, they introduced rebuttal experts seeking to counter plaintiffs’ economic experts, which had introduced statistical analysis attempting to show that the price fixing caused widespread injury across the respective classes. The district court, after a three-day evidentiary hearing, found plaintiffs’ experts more persuasive and held that the plaintiffs’ common statistical evidence of impact was sufficient to help satisfy Rule 23’s predominance requirement, though it allowed that defendants could still challenge the admissibility and probative value of the common statistical evidence at trial.
On interlocutory appeal, the defendants, supported by the U.S. Chamber of Commerce and the Washington Legal Foundation, argued that the district court erred by refusing to definitively resolve the battle of the experts at class certification, and that plaintiffs’ expert statistical analysis was inherently problematic because it relied on the average overcharges to the classes, thereby masking the possibility that some of the class members were uninjured by the price fixing. The defendants maintained that, because plaintiffs’ expert evidence could not necessarily sustain a jury finding for every class member, it should not be a permissible means of establishing that common questions would predominate at a class trial.
The AAI brief argued that the defendants’ and their amici’s arguments must be rejected under binding precedent and sound principles of competition policy. First, the defendants conflated proof of actual impact to each class member with the required Rule 23 showing, which is satisfied by evidence that is capable of supporting a prima facie showing of impact. Under binding Supreme Court precedent, such evidence need only be relevant and reliable to be admissible; it does not have to assure that each plaintiff would prevail on the merits of impact in an individual action.
Second, in the Ninth Circuit, the plain meaning canon applies to the Federal Rules. And the plain meaning of Rule 23’s requirement that common “questions” must predominate over individual questions at trial cannot be read to suggest that the questions’ answers must be determined to permit class certification.
Finally, any uninjured class members, which the district court found to be de minimis, may be identified after trial, and longstanding case law prevents defendants from capitalizing on the uncertainty created by their own illegal conduct, including uncertain damages calculations.
The AAI brief also argued that the court should unequivocally reject the defendants’ effort to cast categorical doubt on statistical analysis, and specifically regression modeling, in antitrust cases. Regression models frequently rely on averaging techniques, but that is not where they begin and end. Such models are routinely accepted as reliable methods of proving widespread injury to antitrust classes because econometric techniques can control for price changes caused by supply and demand factors and then focus on the uniformity of differences across class members to reliably show common impact.
Read the brief here: https://www.antitrustinstitute.org/work-product/aai-asks-ninth-circuit-for-proper-predominance-and-evidentiary-standards-in-antitrust-class-actions-in-re-packaged-seafood-antitrust-litig
The brief was written by AAI Vice President of Advocacy Randy Stutz, with assistance from AAI Board Member Ellen Meriwether of Cafferty Clobes Meriwether & Sprengel and AAI Research Fellow Henry Visser Melville.
Here is the AAI's statement about the brief:
AAI filed an amicus brief on August 21 urging the Ninth Circuit Court of Appeals to apply proper standards to class plaintiffs seeking to rely on statistical analysis as common evidence of antitrust impact in satisfying Rule 23’s predominance requirement for class certification.
In In re Packaged Seafood Antitrust Litig., a district court certified three classes of purchasers, including direct purchasers and two groups of indirect purchasers, seeking to recover for the confessed price fixing of the three leading producers of packaged tuna, Bumble Bee Foods LLC, Starkist, and Chicken of the Sea. The defendants had either sought leniency or pled guilty after a Department of Justice Investigation, and several of their executives have been sentenced to prison.
Unable to contest liability given their admissions, the defendants focused extensive resources and attention on defeating class certification. In district court proceedings, they introduced rebuttal experts seeking to counter plaintiffs’ economic experts, which had introduced statistical analysis attempting to show that the price fixing caused widespread injury across the respective classes. The district court, after a three-day evidentiary hearing, found plaintiffs’ experts more persuasive and held that the plaintiffs’ common statistical evidence of impact was sufficient to help satisfy Rule 23’s predominance requirement, though it allowed that defendants could still challenge the admissibility and probative value of the common statistical evidence at trial.
On interlocutory appeal, the defendants, supported by the U.S. Chamber of Commerce and the Washington Legal Foundation, argued that the district court erred by refusing to definitively resolve the battle of the experts at class certification, and that plaintiffs’ expert statistical analysis was inherently problematic because it relied on the average overcharges to the classes, thereby masking the possibility that some of the class members were uninjured by the price fixing. The defendants maintained that, because plaintiffs’ expert evidence could not necessarily sustain a jury finding for every class member, it should not be a permissible means of establishing that common questions would predominate at a class trial.
The AAI brief argued that the defendants’ and their amici’s arguments must be rejected under binding precedent and sound principles of competition policy. First, the defendants conflated proof of actual impact to each class member with the required Rule 23 showing, which is satisfied by evidence that is capable of supporting a prima facie showing of impact. Under binding Supreme Court precedent, such evidence need only be relevant and reliable to be admissible; it does not have to assure that each plaintiff would prevail on the merits of impact in an individual action.
Second, in the Ninth Circuit, the plain meaning canon applies to the Federal Rules. And the plain meaning of Rule 23’s requirement that common “questions” must predominate over individual questions at trial cannot be read to suggest that the questions’ answers must be determined to permit class certification.
Finally, any uninjured class members, which the district court found to be de minimis, may be identified after trial, and longstanding case law prevents defendants from capitalizing on the uncertainty created by their own illegal conduct, including uncertain damages calculations.
The AAI brief also argued that the court should unequivocally reject the defendants’ effort to cast categorical doubt on statistical analysis, and specifically regression modeling, in antitrust cases. Regression models frequently rely on averaging techniques, but that is not where they begin and end. Such models are routinely accepted as reliable methods of proving widespread injury to antitrust classes because econometric techniques can control for price changes caused by supply and demand factors and then focus on the uniformity of differences across class members to reliably show common impact.
Read the brief here: https://www.antitrustinstitute.org/work-product/aai-asks-ninth-circuit-for-proper-predominance-and-evidentiary-standards-in-antitrust-class-actions-in-re-packaged-seafood-antitrust-litig
The Tik-Tok Complaint against the US
You can read the Complaint here:
https://www.scribd.com/document/473516538/Tiktok-Trump-Complaint#from_embed?
A useful and skeptical analysis of the Tik-Tok Complaint is here:
Will TikTok Win Its Lawsuit Against Trump?
By Robert Chesney https://www.lawfareblog.com/will-tiktok-win-its-lawsuit-against-trump
DAR Comment: Chesney finds that some Tik-Tok arguments are stronger than others, but doubts that any will prevail. CFIUS is about national security, and the arguments that can prevail in the CFIUS context are narrow.
CFIUS proceedings tend to be quick and carried out without great transparency. The CFIUS process does not typically involve court review. There is a difference between the quick procedures the government follows in CFIUS national security matters and the more complex and slower procedures that apply in ordinary competition policy matters.
A point of the TikTok Complaint is that CFUIS rules and procedures and the government's use of them are unfair and unreasonable. It is a policy point worth pondering, but there is reason to doubt the effectiveness of that point in a court proceeding where the context involves allegations about national security.
Tik-Tok's public statement about its Complaint is here:
https://newsroom.tiktok.com/en-us/tiktok-files-lawsuit
Excerpts:
In our complaint we make clear that we believe the Administration ignored our extensive efforts to address its concerns, which we conducted fully and in good faith even as we disagreed with the concerns themselves:
"The executive order seeks to ban TikTok purportedly because of the speculative possibility that the application could be manipulated by the Chinese government. But, as the U.S. government is well aware, Plaintiffs have taken extraordinary measures to protect the privacy and security of TikTok’s U.S. user data, including by having TikTok store such data outside of China (in the United States and Singapore) and by erecting software barriers that help ensure that TikTok stores its U.S. user data separately from the user data of other ByteDance products. These actions were made known to the U.S. government during a recent U.S. national security review of ByteDance’s 2017 acquisition of a China-based company, Musical.ly. As part of that review, Plaintiffs provided voluminous documentation to the U.S. government documenting TikTok's security practices and made commitments that were more than sufficient to address any conceivable U.S. government privacy or national security concerns..."
* * *
Further, as we note in our complaint, not only does the Executive Order ignore due process, it also authorizes the prohibition of activities that have not been found to be "an unusual and extraordinary threat," as required by the International Emergency Economic Powers Act (IEEPA), under which the Administration is purportedly acting:
"By banning TikTok with no notice or opportunity to be heard (whether before or after the fact), the executive order violates the due process protections of the Fifth Amendment.
"The order is ultra vires because it is not based on a bona fide national emergency and authorizes the prohibition of activities that have not been found to pose 'an unusual and extraordinary threat.'"
In the complaint we also point to the fact that the August 6 Executive Order is a misuse of IEEPA:
"...the actions directed in the August 6 executive order are not supported by the emergency declared a year earlier in Executive Order 13873.
"That previous executive order was designed to address asserted U.S. national security concerns about certain telecommunications companies’ ability to abuse access to 'information and communications technology and services' that 'store and communicate vast amounts of sensitive information, facilitate the digital economy, and support critical infrastructure and vital emergency services, in order to commit malicious cyber-enabled actions, including economic and industrial espionage against the United States and its people.'
"TikTok Inc. is not a telecommunications provider and it does not provide the types of technology and services contemplated by the 2019 executive order. Specifically, TikTok Inc. does not provide the hardware backbone to 'facilitate the digital economy,' and TikTok Inc. has no role in providing 'critical infrastructure and vital emergency services.'"
In the complaint we also go into significant detail about the nearly year-long effort we made in good faith to provide the Committee on Foreign Investment in the United States (“CFIUS”) the voluminous information requested – was disregarded – and the numerous steps we offered to take in our commitment to transparency and cooperation:
"In 2019, CFIUS contacted ByteDance to consider whether to review its acquisition of Musical.ly, a China-based video-sharing platform—even though Musical.ly was based in China and had very limited assets in the United States. This review was highly unusual in that ByteDance had acquired Musical.ly two years earlier in 2017, Musical.ly was previously Chinese-owned and based in China, and ByteDance had predominantly abandoned Musical.ly’s limited U.S. assets by the time of CFIUS’s outreach in 2019.
"During this period, and through the course of the CFIUS review, ByteDance provided voluminous documentation and information in response to CFIUS’s questions. Among other evidence, ByteDance submitted detailed documentation to CFIUS demonstrating TikTok’s security measures to help ensure U.S. user data is safeguarded in storage and in transit and cannot be accessed by unauthorized persons—including any government—outside the United States.
"CFIUS never articulated any reason why TikTok’s security measures were inadequate to address any national security concerns, and effectively terminated formal communications with Plaintiffs well before the conclusion of the initial statutory review period. Notwithstanding the U.S. government's failure to identify any security risk, in an effort to address any conceivable concerns that the U.S. government may have and to assure continuity for the U.S. users who had come to value and cherish the platform that TikTok provides, Plaintiffs took the extraordinary step of offering to restructure their U.S. business...
"Despite these repeated efforts and concrete proposals to alleviate any national security concerns, the agency record reflects that CFIUS repeatedly refused to engage with ByteDance and its counsel about CFIUS’s concerns."
* * *
Likewise, in the August 6 Executive Order issued under IEEPA, the Administration failed to follow due process and act in good faith, neither providing evidence that TikTok was an actual threat, nor justification for its punitive actions. We believe the Administration's decisions were heavily politicized, and industry experts have said the same. As the complaint explains:
"The executive order is not rooted in bona fide national security concerns. Independent national security and information security experts have criticized the political nature of this executive order, and expressed doubt as to whether its stated national security objective is genuine...
"The President’s demands for payments have no relationship to any conceivable national security concern and serve only to underscore that Defendants failed to provide Plaintiffs with the due process required by law."
A three-judge Ninth Circuit panel upheld a lower court’s June 2018 ruling refusing to dismiss Oakland’s claims for lost property tax revenue under the Fair Housing Act.
However, the panel also upheld the dismissal of claims over increased city spending to tackle blight and unsafe conditions at abandoned homes.
Additionally, the panel ordered the lower court to reevaluate if Wells Fargo is inflicting an ongoing injury on Oakland that would justify the city’s request for an injunction to change the bank’s lending practices in the city going forward.
Oakland sued Wells Fargo in September 2015 claiming the bank steered minority homebuyers into predatory loans that caused hundreds of foreclosures, lost tax revenue, and increased costs of addressing problems with abandoned properties.
In June 2018, U.S. District Judge Edward Chen advanced Oakland’s claims for injunctive relief and lost tax revenue, finding Oakland’s proposed statistical analysis offered a “clear quantifiable link between [Wells Fargo’s] challenged practice and foreclosure rates and consequent harm to the city.”
The Ninth Circuit opinion is here:
https://www.courthousenews.com/wp-content/uploads/2020/08/OaklandWellsFargo-9CA.pdf
Case: 19-15169, 08/26/2020, ID: 11802959, DktEntry: 73-1
Excerpt:
The panel held that the allegations in Oakland’s amended complaint were sufficient to plead that its reduced property-tax revenues, but not its increased municipal expenses, were proximately caused by Wells Fargo’s discriminatory lending practices. Construing the amended complaint’s allegations in the light most favorable to the City, including the City’s proposed statistical regression analyses, the panel held that Oakland had plausibly alleged that its decrease in property-tax revenues had some direct and continuous relation to Wells Fargo’s discriminatory lending practices throughout much of the City.
However, the panel also upheld the dismissal of claims over increased city spending to tackle blight and unsafe conditions at abandoned homes.
Additionally, the panel ordered the lower court to reevaluate if Wells Fargo is inflicting an ongoing injury on Oakland that would justify the city’s request for an injunction to change the bank’s lending practices in the city going forward.
Oakland sued Wells Fargo in September 2015 claiming the bank steered minority homebuyers into predatory loans that caused hundreds of foreclosures, lost tax revenue, and increased costs of addressing problems with abandoned properties.
In June 2018, U.S. District Judge Edward Chen advanced Oakland’s claims for injunctive relief and lost tax revenue, finding Oakland’s proposed statistical analysis offered a “clear quantifiable link between [Wells Fargo’s] challenged practice and foreclosure rates and consequent harm to the city.”
The Ninth Circuit opinion is here:
https://www.courthousenews.com/wp-content/uploads/2020/08/OaklandWellsFargo-9CA.pdf
Case: 19-15169, 08/26/2020, ID: 11802959, DktEntry: 73-1
Excerpt:
The panel held that the allegations in Oakland’s amended complaint were sufficient to plead that its reduced property-tax revenues, but not its increased municipal expenses, were proximately caused by Wells Fargo’s discriminatory lending practices. Construing the amended complaint’s allegations in the light most favorable to the City, including the City’s proposed statistical regression analyses, the panel held that Oakland had plausibly alleged that its decrease in property-tax revenues had some direct and continuous relation to Wells Fargo’s discriminatory lending practices throughout much of the City.
NYPD's Terrorism Official Says Anarchist Groups Planned George Floyd Protest Violence in Advance
By Tom Winter, Andrew Blankstein and Jonathan Dienst • Published May 31, 2020 • Updated on June 1, 2020 at 9:05 am
Excerpts:
New York's top terrorism official says there's evidence that members of anarchist groups from outside the city intentionally planned to incite violence at protests calling for justice in the death of George Floyd.
Deputy Commissioner for Intelligence and Counterterrorism John Miller said there is a high level of confidence within the NYPD that these unnamed groups had organized scouts, medics, and supply routes of rocks, bottles and accelerants for breakaway groups to commit vandalism and violence. There are strong indicators they planned for violence in advance using at times encrypted communications, he said.
One out of every seven arrests, of 686 so far since May 28, has been people from out of state, according to Miller. He said those arrested came from Massachusettes, Connecticut, Pennsylvania, New Jersey, Iowa, Nevada, Virginia, Maryland, Texas and St. Paul, Minnesota.
"Before the protests began, organizers of certain anarchists groups set out to raise bail money and people who would be responsible to be raising bail money, they set out to recruit medics and medical teams with gear to deploy in anticipation of violent interactions with police," Miller said.
He added, "They prepared to commit property damage and directed people who were following them that this should be done selectively and only in wealthier areas or at high-end stores run by corporate entities."
Without specifying who "they" are, Miller said the agitators "developed a complex network of bicycle scouts to move ahead of demonstrators in different directions of where police were and where police were not for purposes of being able to direct groups from the larger group to places where they could commit acts of vandalism including the torching of police vehicles and Molotov cocktails where they thought officers would not be."
Mayor Bill de Blasio said Sunday morning that the members of the anarchist movement plan together online and that "they have explicit rules, and we're going to make all this information available today and in the days ahead."
Among the out-of-area instigators were two sisters from upstate New York. They were detained after one threw a Molotov cocktail at a police van. The woman who threw the Molotov cocktail will face federal charges from prosecutors in Brooklyn, law enforcement source said.
https://www.nbcnewyork.com/news/local/nypds-terrorism-chief-says-unnamed-groups-planned-protest-violence-in-advance/2440722/
By Tom Winter, Andrew Blankstein and Jonathan Dienst • Published May 31, 2020 • Updated on June 1, 2020 at 9:05 am
Excerpts:
New York's top terrorism official says there's evidence that members of anarchist groups from outside the city intentionally planned to incite violence at protests calling for justice in the death of George Floyd.
Deputy Commissioner for Intelligence and Counterterrorism John Miller said there is a high level of confidence within the NYPD that these unnamed groups had organized scouts, medics, and supply routes of rocks, bottles and accelerants for breakaway groups to commit vandalism and violence. There are strong indicators they planned for violence in advance using at times encrypted communications, he said.
One out of every seven arrests, of 686 so far since May 28, has been people from out of state, according to Miller. He said those arrested came from Massachusettes, Connecticut, Pennsylvania, New Jersey, Iowa, Nevada, Virginia, Maryland, Texas and St. Paul, Minnesota.
"Before the protests began, organizers of certain anarchists groups set out to raise bail money and people who would be responsible to be raising bail money, they set out to recruit medics and medical teams with gear to deploy in anticipation of violent interactions with police," Miller said.
He added, "They prepared to commit property damage and directed people who were following them that this should be done selectively and only in wealthier areas or at high-end stores run by corporate entities."
Without specifying who "they" are, Miller said the agitators "developed a complex network of bicycle scouts to move ahead of demonstrators in different directions of where police were and where police were not for purposes of being able to direct groups from the larger group to places where they could commit acts of vandalism including the torching of police vehicles and Molotov cocktails where they thought officers would not be."
Mayor Bill de Blasio said Sunday morning that the members of the anarchist movement plan together online and that "they have explicit rules, and we're going to make all this information available today and in the days ahead."
Among the out-of-area instigators were two sisters from upstate New York. They were detained after one threw a Molotov cocktail at a police van. The woman who threw the Molotov cocktail will face federal charges from prosecutors in Brooklyn, law enforcement source said.
https://www.nbcnewyork.com/news/local/nypds-terrorism-chief-says-unnamed-groups-planned-protest-violence-in-advance/2440722/
DC AG on home improvement abuse
DAR Comment: When I've helped as a volunteer attorney with the DC Bar pro bono clinic, I've been impressed by the many instances when property owners failed to take basic steps to protect themselves from home improvement abuse. The consumer guide on the DC AG's website talks about those steps, some of which are copied below:
HOME IMPROVEMENT ABUSE
Remodeling or performing construction on your home may require a contractor. There are a few things you can do to ensure that you find someone reputable:
Research contractors before hiring them. Find out whether a contractor’s license is valid and up to date. To verify a D.C. contractor’s license, call the Department of Consumer and Regulatory Affairs at (202) 442-4311. You can also call Office of the Attorney General’s Office of Consumer Protection or check online to see if there are complaints against a particular contractor. Request written estimates from several contractors.
Request a copy of the contractor’s personal liability, worker’s compensation, and property damage coverage insurance.
Obtain a written contract describing the work to be performed and make sure the contract states that it is the contractor’s obligation to get all necessary permits.
Keep a record of all meetings, phone conversations, and payments.
Do not obtain a home equity loan from your contractor unless you have shopped around for a loan first and compared rates and terms. For a list of approved lenders in your area, visit http://www.hud.gov/ll/code/ llslcrit.cfm or call (800) 225-5342. CONSUMER HOTLINE — (202) 442-9828 15
Be wary of a contractor who claims to have “leftover” material from another job or who “just happens to be in the neighborhood.”
Do not hire a contractor who only accepts cash.
Avoid paying the full price up front. You can ask to pay only a deposit at the beginning of a job and withhold the final payment until the work is completed and passes any required inspection.
See https://oag.dc.gov/sites/default/files/2019-04/2016-06-30%20Consumer%20Protection%20Guide%20FINAL_06_15_17_SinglePage.pdf
DAR Comment: When I've helped as a volunteer attorney with the DC Bar pro bono clinic, I've been impressed by the many instances when property owners failed to take basic steps to protect themselves from home improvement abuse. The consumer guide on the DC AG's website talks about those steps, some of which are copied below:
HOME IMPROVEMENT ABUSE
Remodeling or performing construction on your home may require a contractor. There are a few things you can do to ensure that you find someone reputable:
Research contractors before hiring them. Find out whether a contractor’s license is valid and up to date. To verify a D.C. contractor’s license, call the Department of Consumer and Regulatory Affairs at (202) 442-4311. You can also call Office of the Attorney General’s Office of Consumer Protection or check online to see if there are complaints against a particular contractor. Request written estimates from several contractors.
Request a copy of the contractor’s personal liability, worker’s compensation, and property damage coverage insurance.
Obtain a written contract describing the work to be performed and make sure the contract states that it is the contractor’s obligation to get all necessary permits.
Keep a record of all meetings, phone conversations, and payments.
Do not obtain a home equity loan from your contractor unless you have shopped around for a loan first and compared rates and terms. For a list of approved lenders in your area, visit http://www.hud.gov/ll/code/ llslcrit.cfm or call (800) 225-5342. CONSUMER HOTLINE — (202) 442-9828 15
Be wary of a contractor who claims to have “leftover” material from another job or who “just happens to be in the neighborhood.”
Do not hire a contractor who only accepts cash.
Avoid paying the full price up front. You can ask to pay only a deposit at the beginning of a job and withhold the final payment until the work is completed and passes any required inspection.
See https://oag.dc.gov/sites/default/files/2019-04/2016-06-30%20Consumer%20Protection%20Guide%20FINAL_06_15_17_SinglePage.pdf
NYT: Concierge care, which offers personalized medical services for people who can afford it, has grown fast in the pandemic as patients seek direct access to physicians.
Basic telemedicine can bring with it cumbersome insurance protocols and hard-to-navigate health care portals. Concierge care, which is typically not covered by insurance, gets around restrictions placed on doctors and other health care providers. But it comes at a steep cost: Prices for services can be two to three times higher, and that comes on top of annual fees.
When more than 173,000 people in the United States have died from the coronavirus and millions of Americans remain out of work, the growing interest in concierge medical services may seem out of touch with the devastation the pandemic has inflicted.
But the concept is expanding in other areas. The affluent are able to pay a premium for a luxury pursuit that was relatively affordable before the coronavirus crisis, like pampering themselves with a private manicure or hiring a personal trainer for a home workout.
Doctors say they have had to expand their services or create new ones to meet the expectations of their wealthy patients.
From: https://www.nytimes.com/2020/08/24/business/doctors-are-offering-direct-access-in-the-pandemic-for-those-who-can-afford-it.html
Basic telemedicine can bring with it cumbersome insurance protocols and hard-to-navigate health care portals. Concierge care, which is typically not covered by insurance, gets around restrictions placed on doctors and other health care providers. But it comes at a steep cost: Prices for services can be two to three times higher, and that comes on top of annual fees.
When more than 173,000 people in the United States have died from the coronavirus and millions of Americans remain out of work, the growing interest in concierge medical services may seem out of touch with the devastation the pandemic has inflicted.
But the concept is expanding in other areas. The affluent are able to pay a premium for a luxury pursuit that was relatively affordable before the coronavirus crisis, like pampering themselves with a private manicure or hiring a personal trainer for a home workout.
Doctors say they have had to expand their services or create new ones to meet the expectations of their wealthy patients.
From: https://www.nytimes.com/2020/08/24/business/doctors-are-offering-direct-access-in-the-pandemic-for-those-who-can-afford-it.html
AG Barr says he’ll review stalled Wyoming coal merger
DAR Comment: The local Wyoming press report below indicates that AG Barr will review the proposed joint venture between Arch Coal and Peabody Energy that has been challenged by the FTC. A number of antitrust lawyers and economists who support strong enforcement have complained about Barr’s role, for several reasons. For one, some antitrust experts think it is inappropriate for the head of the USDOJ to comment on the work of the FTC (although in the past Barr’s USDOJ has actually filed in court against the FTC’s challenge to Qualcomm). Also, Barr’s support of an Arch/Peabody joint venture for the purpose of stabilizing production in response to changing demand is contrary to established case law. The Arch/Peabody position in some ways resembles the argument of book publishers that they should be allowed to coordinate on price in order to provide a counter to Amazon as the dominant force in electronic book distribution. Some critics see Barr’s position as influenced by political considerations in support of the President, rather than antitrust law principles. The President has promised support for the coal industry.
https://trib.com/news/state-and-regional/attorney-general-says-he-will-look-into-stalled-wyoming-coal-venture/article_3b20f273-5d9c-5908-92da-ab2d89619f4a.html
by Nick Reynolds
Aug 13, 2020 Updated Aug 14, 2020
– U.S. Attorney General William Barr said he would look into stalled joint venture between two of Wyoming’s largest coal operators after meeting with Gov. Mark Gordon on Thursday morning.
The joint venture between Arch Coal and Peabody Energy was pitched by the two companies last year as a way to improve price stability and keep two of the state’s largest coal mines viable as the industry continues to suffer from bankruptcies spurred by massive declines coal demand following a decade of coal plant closures in favor of new natural gas plants.
The Federal Trade Commission, however, rejected the deal, saying it would reduce competition in coal markets. That left both companies in a precarious financial position at a time when the Trump administration has pushed for a resurgence in coal within the United States’ efforts for energy independence.
DAR Comment: Following is the FTC press release explaining the agencies challenge to the joint venture:
FTC Files Suit to Block Joint Venture between Coal Mining Companies Peabody Energy Corporation and Arch Coal
February 26, 2020
For Release
The Federal Trade Commission has filed an administrative complaint challenging a proposed joint venture between Peabody Energy Corporation and Arch Coal. The transaction would combine their coal mining operations in the Southern Powder River Basin, located in northeastern Wyoming.
The complaint [ https://www.ftc.gov/system/files/documents/cases/d09391_peabody_energy-arch_coal_administrative_complaint_0.pdf ] alleges that the transaction will eliminate competition between Peabody and Arch Coal, which are the two major competitors in the market for thermal coal in the Southern Powder River Basin, or SPRB, and the two largest coal-mining companies in the United States.
The FTC has also authorized staff to file a complaint for a temporary restraining order and preliminary injunction in the U.S. District Court for the Eastern District of Missouri, to maintain the status quo pending an administrative trial on the merits.
“Whatever the product, the antitrust laws protect customers from mergers that lead to higher prices. This joint venture would eliminate the substantial head-to-head competition between the two largest coal miners in the United States, and that loss of competition would likely raise coal prices to power-generating utilities that provide electricity to millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition.
The complaint alleges that, in 2018, Peabody and Arch Coal produced more than 60 percent of all SPRB coal mined. The complaint also states that these firms collectively control more than 60 percent of SPRB coal reserves. SPRB coal is attractive to electric power producers in the central United States and upper Midwest because the deposits are relatively inexpensive to extract compared to deposits elsewhere, according to the complaint. The deposits’ sulfur and sodium content allow electric power plants to burn significant quantities without violating environmental regulations. The complaint alleges that owners of power generation units designed to burn SPRB coal have high fixed costs, and these units cannot readily replace SPRB coal with natural gas, wind, sun, or nuclear fuels.
DAR Comment: The following news report concerns the position of the State of Wyoming concerning the Arch/Peabody joint venture:
Wyoming sides with Peabody-Arch over proposed coal venture
The state of Wyoming once again threw its support behind a proposed joint venture involving two of its leading coal operators this week.
In an amicus curiae brief filed Tuesday in the U.S. District Court for the Eastern District of Missouri, state attorneys opposed the Federal Trade Commission’s recent move to block the joint venture proposed by coal firms Peabody Energy Corp. and Arch Resources Inc.
In February, the FTC filed a preliminary injunction to stop Peabody and Arch’s attempt to combine their coal operations under one roof. The two companies operate five coal mines in Wyoming and hoped to join ventures and reduce costs. But the FTC, charged with protecting consumers, is concerned the move could stifle competition and hurt the public by hiking up prices for coal.
The two coal firms control about two-thirds of the southern Powder River Basin’s coal reserves, making them the biggest players in the basin.
In response to the federal agency’s decision to halt the venture and take the coal operators to court, Gov. Mark Gordon and the Wyoming Attorney General’s Office reaffirmed their support of the coal companies’ plan.
“In Wyoming’s view, the benefits of the proposed joint venture to the public plainly outweigh the unlikely anti-competitive effects,” Deputy Attorney General James Kaste wrote in court documents. “It just does not make sense to Wyoming that the merged entity can or will raise prices; effectively cutting off its nose to spite its face. Nor does it makes sense to Wyoming to conclude that a reduction in production is anti-competitive rather than a reasonable and necessary response to reduced demand. A healthy, albeit consolidated, coal production industry benefits the mines, the miners, the State, its citizens, and the public at large.”
The coal operators have said the joint venture would increase their cost competitiveness and help them survive. Coal’s ranking in the power generation market has been under siege in recent years with the expansion of affordable natural gas and renewable energy.
In response to these rapidly changing conditions, coal operators, including Peabody and Arch, have been hunting for ways to cut costs and keep their foothold in the electricity markets. The joint venture would save the companies roughly $120 million each year for the next decade during a time when the firms must operate amidst thermal coal’s brutal market conditions, the firms argue.
Peabody owns the North Antelope Rochelle mine, the largest coal mine in the country. Arch Resources owns neighboring Black Thunder. In addition to these two mammoth mines, the joint venture would include the Rawhide, Caballo and Coal Creek mines in the Powder River Basin, as well as a pair of mines in Colorado.
Gov. Mark Gordon immediately opposed the FTC’s decision back in February too, calling the decision “a nail into an industry which is struggling to adapt to a rapidly changing marketplace.” He also cited the potential job losses at coal mines in the basin if controlled consolidation does not occur.
Production losses in coal country have significant consequences for the state — heightening unemployment and exacerbating revenue shortfalls. One in 10 jobs in the Powder River Basin depends on coal, according to research conducted by University of Wyoming economist Rob Godby in 2015. Last quarter, the coal industry supported some 4,500 jobs.
A combined Peabody and Arch venture would likely translate into more stability and certainty for the coal-dependent state, the Attorney General’s Office outlined in court documents. Overcapacity in the basin (or too many coal operators vying for too few customers) has sent five firms operating in the Powder River Basin into bankruptcy since 2015.
Posting on Arch/Peabody by Don Allen Resnikoff
DAR Comment: The local Wyoming press report below indicates that AG Barr will review the proposed joint venture between Arch Coal and Peabody Energy that has been challenged by the FTC. A number of antitrust lawyers and economists who support strong enforcement have complained about Barr’s role, for several reasons. For one, some antitrust experts think it is inappropriate for the head of the USDOJ to comment on the work of the FTC (although in the past Barr’s USDOJ has actually filed in court against the FTC’s challenge to Qualcomm). Also, Barr’s support of an Arch/Peabody joint venture for the purpose of stabilizing production in response to changing demand is contrary to established case law. The Arch/Peabody position in some ways resembles the argument of book publishers that they should be allowed to coordinate on price in order to provide a counter to Amazon as the dominant force in electronic book distribution. Some critics see Barr’s position as influenced by political considerations in support of the President, rather than antitrust law principles. The President has promised support for the coal industry.
https://trib.com/news/state-and-regional/attorney-general-says-he-will-look-into-stalled-wyoming-coal-venture/article_3b20f273-5d9c-5908-92da-ab2d89619f4a.html
by Nick Reynolds
Aug 13, 2020 Updated Aug 14, 2020
– U.S. Attorney General William Barr said he would look into stalled joint venture between two of Wyoming’s largest coal operators after meeting with Gov. Mark Gordon on Thursday morning.
The joint venture between Arch Coal and Peabody Energy was pitched by the two companies last year as a way to improve price stability and keep two of the state’s largest coal mines viable as the industry continues to suffer from bankruptcies spurred by massive declines coal demand following a decade of coal plant closures in favor of new natural gas plants.
The Federal Trade Commission, however, rejected the deal, saying it would reduce competition in coal markets. That left both companies in a precarious financial position at a time when the Trump administration has pushed for a resurgence in coal within the United States’ efforts for energy independence.
DAR Comment: Following is the FTC press release explaining the agencies challenge to the joint venture:
FTC Files Suit to Block Joint Venture between Coal Mining Companies Peabody Energy Corporation and Arch Coal
February 26, 2020
For Release
The Federal Trade Commission has filed an administrative complaint challenging a proposed joint venture between Peabody Energy Corporation and Arch Coal. The transaction would combine their coal mining operations in the Southern Powder River Basin, located in northeastern Wyoming.
The complaint [ https://www.ftc.gov/system/files/documents/cases/d09391_peabody_energy-arch_coal_administrative_complaint_0.pdf ] alleges that the transaction will eliminate competition between Peabody and Arch Coal, which are the two major competitors in the market for thermal coal in the Southern Powder River Basin, or SPRB, and the two largest coal-mining companies in the United States.
The FTC has also authorized staff to file a complaint for a temporary restraining order and preliminary injunction in the U.S. District Court for the Eastern District of Missouri, to maintain the status quo pending an administrative trial on the merits.
“Whatever the product, the antitrust laws protect customers from mergers that lead to higher prices. This joint venture would eliminate the substantial head-to-head competition between the two largest coal miners in the United States, and that loss of competition would likely raise coal prices to power-generating utilities that provide electricity to millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition.
The complaint alleges that, in 2018, Peabody and Arch Coal produced more than 60 percent of all SPRB coal mined. The complaint also states that these firms collectively control more than 60 percent of SPRB coal reserves. SPRB coal is attractive to electric power producers in the central United States and upper Midwest because the deposits are relatively inexpensive to extract compared to deposits elsewhere, according to the complaint. The deposits’ sulfur and sodium content allow electric power plants to burn significant quantities without violating environmental regulations. The complaint alleges that owners of power generation units designed to burn SPRB coal have high fixed costs, and these units cannot readily replace SPRB coal with natural gas, wind, sun, or nuclear fuels.
DAR Comment: The following news report concerns the position of the State of Wyoming concerning the Arch/Peabody joint venture:
Wyoming sides with Peabody-Arch over proposed coal venture
- Camille Erickson
- Jul 10, 2020 Updated Aug 14, 2020
The state of Wyoming once again threw its support behind a proposed joint venture involving two of its leading coal operators this week.
In an amicus curiae brief filed Tuesday in the U.S. District Court for the Eastern District of Missouri, state attorneys opposed the Federal Trade Commission’s recent move to block the joint venture proposed by coal firms Peabody Energy Corp. and Arch Resources Inc.
In February, the FTC filed a preliminary injunction to stop Peabody and Arch’s attempt to combine their coal operations under one roof. The two companies operate five coal mines in Wyoming and hoped to join ventures and reduce costs. But the FTC, charged with protecting consumers, is concerned the move could stifle competition and hurt the public by hiking up prices for coal.
The two coal firms control about two-thirds of the southern Powder River Basin’s coal reserves, making them the biggest players in the basin.
In response to the federal agency’s decision to halt the venture and take the coal operators to court, Gov. Mark Gordon and the Wyoming Attorney General’s Office reaffirmed their support of the coal companies’ plan.
“In Wyoming’s view, the benefits of the proposed joint venture to the public plainly outweigh the unlikely anti-competitive effects,” Deputy Attorney General James Kaste wrote in court documents. “It just does not make sense to Wyoming that the merged entity can or will raise prices; effectively cutting off its nose to spite its face. Nor does it makes sense to Wyoming to conclude that a reduction in production is anti-competitive rather than a reasonable and necessary response to reduced demand. A healthy, albeit consolidated, coal production industry benefits the mines, the miners, the State, its citizens, and the public at large.”
The coal operators have said the joint venture would increase their cost competitiveness and help them survive. Coal’s ranking in the power generation market has been under siege in recent years with the expansion of affordable natural gas and renewable energy.
In response to these rapidly changing conditions, coal operators, including Peabody and Arch, have been hunting for ways to cut costs and keep their foothold in the electricity markets. The joint venture would save the companies roughly $120 million each year for the next decade during a time when the firms must operate amidst thermal coal’s brutal market conditions, the firms argue.
Peabody owns the North Antelope Rochelle mine, the largest coal mine in the country. Arch Resources owns neighboring Black Thunder. In addition to these two mammoth mines, the joint venture would include the Rawhide, Caballo and Coal Creek mines in the Powder River Basin, as well as a pair of mines in Colorado.
Gov. Mark Gordon immediately opposed the FTC’s decision back in February too, calling the decision “a nail into an industry which is struggling to adapt to a rapidly changing marketplace.” He also cited the potential job losses at coal mines in the basin if controlled consolidation does not occur.
Production losses in coal country have significant consequences for the state — heightening unemployment and exacerbating revenue shortfalls. One in 10 jobs in the Powder River Basin depends on coal, according to research conducted by University of Wyoming economist Rob Godby in 2015. Last quarter, the coal industry supported some 4,500 jobs.
A combined Peabody and Arch venture would likely translate into more stability and certainty for the coal-dependent state, the Attorney General’s Office outlined in court documents. Overcapacity in the basin (or too many coal operators vying for too few customers) has sent five firms operating in the Powder River Basin into bankruptcy since 2015.
Posting on Arch/Peabody by Don Allen Resnikoff
The Decline of College Free Speech Zones
Jul 2, 2020
Nicole Divers
The term “free speech zone” can be misleading. While the name implies a policy that promotes free expression, free speech zones do the opposite. They confine political demonstrations to a small, often secluded, area on campus and typically require students to get advance permission to demonstrate.
In Oregon, a pro-life group, Students for Life, filed a lawsuit [http://www.adfmedia.org/files/ChemeketaComplaint.pdf] against Chemeketa Community College in May to challenge the college’s free speech zone policy.
The college restricts outdoor speech to two small “free speech areas” and requires a two-week notice to use them. Students for Life claims that the policy violates their right to free speech and that the required notice prevents them from engaging in spontaneous political expression.
Even at schools that claim to have eliminated their free speech zone policies, though, colleges still restrict speech. In 2003, Western Illinois University said that it would eliminate its free speech area policy. However, when students protested to legalize marijuana in 2019, campus police told them to stop because they were outside the school’s free speech zone.
Thankfully, colleges have been cleaning up their act in recent years: free speech zones are on the decline. According to FIRE’s 2020 Spotlight on Speech Codes, only 8.3 percent of surveyed schools enforced free speech zone policies, down from 10.5 percent in 2019.
State legislatures have also acted against free speech zones. Seventeen states have passed legislation preventing free speech zone policies: Virginia, Missouri, Arizona, Kentucky, Colorado, Utah, North Carolina, Tennessee, Florida, Georgia, Louisiana, Arkansas, South Dakota, Iowa, Alabama, Oklahoma, and Texas.
Those annoying limitations on students exercising their Constitutional rights on campus may soon be a relic of the past.
Nicole Divers is a Martin Center intern and a senior at the University of North Carolina at Chapel Hill.
Source: https://www.jamesgmartin.center/2020/07/did-you-know-the-decline-of-free-speeech-zones/
Jul 2, 2020
Nicole Divers
The term “free speech zone” can be misleading. While the name implies a policy that promotes free expression, free speech zones do the opposite. They confine political demonstrations to a small, often secluded, area on campus and typically require students to get advance permission to demonstrate.
In Oregon, a pro-life group, Students for Life, filed a lawsuit [http://www.adfmedia.org/files/ChemeketaComplaint.pdf] against Chemeketa Community College in May to challenge the college’s free speech zone policy.
The college restricts outdoor speech to two small “free speech areas” and requires a two-week notice to use them. Students for Life claims that the policy violates their right to free speech and that the required notice prevents them from engaging in spontaneous political expression.
Even at schools that claim to have eliminated their free speech zone policies, though, colleges still restrict speech. In 2003, Western Illinois University said that it would eliminate its free speech area policy. However, when students protested to legalize marijuana in 2019, campus police told them to stop because they were outside the school’s free speech zone.
Thankfully, colleges have been cleaning up their act in recent years: free speech zones are on the decline. According to FIRE’s 2020 Spotlight on Speech Codes, only 8.3 percent of surveyed schools enforced free speech zone policies, down from 10.5 percent in 2019.
State legislatures have also acted against free speech zones. Seventeen states have passed legislation preventing free speech zone policies: Virginia, Missouri, Arizona, Kentucky, Colorado, Utah, North Carolina, Tennessee, Florida, Georgia, Louisiana, Arkansas, South Dakota, Iowa, Alabama, Oklahoma, and Texas.
Those annoying limitations on students exercising their Constitutional rights on campus may soon be a relic of the past.
Nicole Divers is a Martin Center intern and a senior at the University of North Carolina at Chapel Hill.
Source: https://www.jamesgmartin.center/2020/07/did-you-know-the-decline-of-free-speeech-zones/
Consumer advocates call for investigation of Paypal on student loans
https://protectborrowers.org/wp-content/uploads/2020/08/PayPal-Credit-letter-Regulators.pdf
Excerpt:
[T]he results of an investigation by the Student Borrower Protection Center (SBPC) indicate that PayPal Credit is currently providing its products as high cost education financing options that can leave borrowers in significant distress with few protections. Further, PayPal Credit is being used to prop up a wide range of for-profit educational institutions, many of them bearing the hallmarks of schools that have cheated or failed borrowers in the past. We write today to warn of the significant consumer harm that PayPal Credit may be driving and to call for an immediate investigation into PayPal, Synchrony Bank, and their business practices related to PayPal Credit.
https://protectborrowers.org/wp-content/uploads/2020/08/PayPal-Credit-letter-Regulators.pdf
Excerpt:
[T]he results of an investigation by the Student Borrower Protection Center (SBPC) indicate that PayPal Credit is currently providing its products as high cost education financing options that can leave borrowers in significant distress with few protections. Further, PayPal Credit is being used to prop up a wide range of for-profit educational institutions, many of them bearing the hallmarks of schools that have cheated or failed borrowers in the past. We write today to warn of the significant consumer harm that PayPal Credit may be driving and to call for an immediate investigation into PayPal, Synchrony Bank, and their business practices related to PayPal Credit.
WSJ: Community development financial institutions, or CDFIs, are community-based banks, credit unions and investment funds that lend to home buyers, small businesses and others in rural, impoverished and minority communities.
Earlier this year, Congress and the Trump administration earmarked billions of dollars for CDFIs to issue Paycheck Protection Program loans to small businesses. Meanwhile, CDFIs have received multimillion-dollar investments from traditional lenders such as Goldman Sachs Group Inc. GS -0.87% and Bank of America Corp., BAC -1.43% and new corporate supporters such as Netflix Inc. NFLX 1.97% and Google Inc.
Google joined with the Opportunity Finance Network, a membership group for CDFIs, to launch a $125 million fund for the industry. Goldman, Bank of America, Morgan Stanley, Citigroup Inc. and Wells Fargo & Co., all of which had existing relationships with CDFIs, have in recent months announced investments—in the form of grants or capital to fund PPP and other loans—ranging from $5 million to $750 million.
There are about 1,100 CDFIs nationwide. Under a program created in 1994, the Treasury Department’s CDFI Fund certifies CDFIs and provides them with grants, low-cost credit and operational support. Demand for CDFI Fund grants and support typically far exceeds Congress’s yearly appropriations.
CDFIs are meant to redress racial and economic disparities. For example, the Opportunity Finance Network, based on a 2018 survey, estimates 58% of the clients served by its roughly 300 members are people of color, 85% are low-income and 48% are women.
From: https://www.wsj.com/articles/renewed-focus-on-race-triggers-surge-of-interest-in-community-based-lenders-11597743000?mod=business_major_pos4
Earlier this year, Congress and the Trump administration earmarked billions of dollars for CDFIs to issue Paycheck Protection Program loans to small businesses. Meanwhile, CDFIs have received multimillion-dollar investments from traditional lenders such as Goldman Sachs Group Inc. GS -0.87% and Bank of America Corp., BAC -1.43% and new corporate supporters such as Netflix Inc. NFLX 1.97% and Google Inc.
Google joined with the Opportunity Finance Network, a membership group for CDFIs, to launch a $125 million fund for the industry. Goldman, Bank of America, Morgan Stanley, Citigroup Inc. and Wells Fargo & Co., all of which had existing relationships with CDFIs, have in recent months announced investments—in the form of grants or capital to fund PPP and other loans—ranging from $5 million to $750 million.
There are about 1,100 CDFIs nationwide. Under a program created in 1994, the Treasury Department’s CDFI Fund certifies CDFIs and provides them with grants, low-cost credit and operational support. Demand for CDFI Fund grants and support typically far exceeds Congress’s yearly appropriations.
CDFIs are meant to redress racial and economic disparities. For example, the Opportunity Finance Network, based on a 2018 survey, estimates 58% of the clients served by its roughly 300 members are people of color, 85% are low-income and 48% are women.
From: https://www.wsj.com/articles/renewed-focus-on-race-triggers-surge-of-interest-in-community-based-lenders-11597743000?mod=business_major_pos4
When antitrust prosecutors act on political motives: judicial review of antitrust consent decrees under the Tunney Act
There is a growing perception that U.S. Government antitrust prosecutors are acting improperly and pursuing political rather than impartial goals. A question that follows is whether the courts can step in and restrain such behavior. As discussed in this brief note, an important judicial role in response to abuse of prosecutorial discretion is for the courts to more aggressively review antitrust settlements, using sometimes neglected settlement review provisions of the decades-old Tunney Act
Law professor Chris Sagers recently opined that President Trump’s U.S. Antitrust chief enforcer Delrahim “briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks." See https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
Among other things, Sagers talks about USDOJ’s challenge to the AT&T/Time Warner merger. Sagers discusses the allegations that the USDOJ action was pursued to punish President Trump’s political enemy, Time Warner’s CNN. Sagers now finds the allegations “hard to doubt.”
Spencer Waller’s article The Political Misuse of Antitrust https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/ , helpfully reviews the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Among them is the USDOJ’s own guidance on the impropriety of government prosecutorial decisions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
Waller supports the thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
Requiring antitrust prosecutors to be clear in explaining prosecutorial decisions reduces the opportunity for furtive pursuit of narrow and partisan political goals. A further and more difficult question is whether courts should have any role to play in reviewing USDOJ exercise of prosecutorial discretion.
An important opportunity for the courts to play a reviewing role occurs when the USDOJ elects to settle an antitrust matter and enter a consent decree. The Tunney Act, passed in 1974, and amended in 2004, requires a public interest showing before a consent decree can be accepted by the court.
Darren Bush explains in his article The Death of the Tunney Act at the Hands of an Activist D.C. Circuit (April 11, 2018). Antitrust Bulletin, Vol. 63, No. 1, 2018, Available at SSRN: https://ssrn.com/abstract=3161181 that some courts, particularly D.C. courts, have limited the Tunney Act because of Constitutional concerns about separation of powers – the courts don’t want to overrule prosecutor’s judgments and decide what cases should or should not be prosecuted. Bush calls that view “disingenuous,” pointing out that separation of powers is really not in issue in the context of a consent decree. The court’s acceptance or rejection of a consent decree does not supplant exercise of prosecutorial discretion about whether and how to move forward with a matter. Bush also points out that concerns about separation of powers do not block the courts’ traditional role in reviewing sufficiency of remedies proposed by government prosecutors.
A thought provoking and relevant story about judicial review of questionable prosecutorial action recently arose in a context removed from antitrust. That is the extraordinary story of USDOJ’s request to United States District Judge Emmet G. Sullivan to dismiss the felony charge against President Trump’s former National Security Advisor, Michael T. Flynn. The unusual circumstance that Flynn had pled guilty and was awaiting sentencing gave the trial court a strong reason to be interested in the government’s motives. Despite the circumstances, the Government urged that Judge Sullivan had little choice but to grant the motion to dismiss, notwithstanding that the relevant Court rule requires “leave of court.” (Rule 48(a))
Commenters have pointed out that the Rule 48(a) “leave of court” requirement for government dismissal of a criminal action was purposefully added by the U.S. Supreme Court in 1944 with the goal of arming district judges with a powerful tool to halt corrupt or politically motivated dismissals of cases. See https://www.stanfordlawreview.org/online/why-do-rule-48a-dismissals-require-leave-of-court/
Judge Griffith at the August 11, 2020 en banc federal circuit court hearing concerning the Flynn case posed questions suggesting that the district court’s role in reviewing the government dismissal motion is more than ministerial. (See the video of the hearing at https://www.c-span.org/video/?474473-1/michael-flynn-perjury-dismissal-case-rehearing , beginning at approximately minute 18.) Judge Griffith says at one point about the court’s Rule 48(a) decision: “It’s not ministerial, you know that. … The judge has to do some thinking about it. He’s not simply a rubber stamp.”
Judge Robert Wilkins asked Flynn’s defense attorney Sidney Powell a hypothetical: If a group of nuns approached the court to say they had video footage of a prosecutor taking a bribe from a defendant to dismiss a case, should that judge be allowed to investigate a motion to dismiss? Powell said that no, even in such a case the trial judge “cannot go behind the prosecutors’ decision to dismiss a case.”
Returning to Chris Sagers’ comments about political misuse by prosecutors in antitrust cases, are there ways to apply to antitrust cases the very serious concern expressed in the Flynn matter: that the courts not be a rubber stamp for bad prosecutorial behavior? One way is vigorous application of Tunney Act review procedures for settlement consent decrees as advocated in Darren Bush’s article. Heightened concerns about political misuse of antitrust provide a rationale for reviving and strengthening the original Tunney Act idea that in appropriate situations the courts should have more than a ministerial role in reviewing case settlements. It is worth remembering that Tunney Act judicial review of USDOJ antitrust settlements came about because of what Senator Tunney decried as “a massive behind-closed-doors campaign [that] resulted in halting of the prosecution of the ITT case and its hasty settlement favorable to the Company.”
By Don Allen Resnikoff, who takes full responsibility for the content
There is a growing perception that U.S. Government antitrust prosecutors are acting improperly and pursuing political rather than impartial goals. A question that follows is whether the courts can step in and restrain such behavior. As discussed in this brief note, an important judicial role in response to abuse of prosecutorial discretion is for the courts to more aggressively review antitrust settlements, using sometimes neglected settlement review provisions of the decades-old Tunney Act
Law professor Chris Sagers recently opined that President Trump’s U.S. Antitrust chief enforcer Delrahim “briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks." See https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
Among other things, Sagers talks about USDOJ’s challenge to the AT&T/Time Warner merger. Sagers discusses the allegations that the USDOJ action was pursued to punish President Trump’s political enemy, Time Warner’s CNN. Sagers now finds the allegations “hard to doubt.”
Spencer Waller’s article The Political Misuse of Antitrust https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/ , helpfully reviews the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Among them is the USDOJ’s own guidance on the impropriety of government prosecutorial decisions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
Waller supports the thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
Requiring antitrust prosecutors to be clear in explaining prosecutorial decisions reduces the opportunity for furtive pursuit of narrow and partisan political goals. A further and more difficult question is whether courts should have any role to play in reviewing USDOJ exercise of prosecutorial discretion.
An important opportunity for the courts to play a reviewing role occurs when the USDOJ elects to settle an antitrust matter and enter a consent decree. The Tunney Act, passed in 1974, and amended in 2004, requires a public interest showing before a consent decree can be accepted by the court.
Darren Bush explains in his article The Death of the Tunney Act at the Hands of an Activist D.C. Circuit (April 11, 2018). Antitrust Bulletin, Vol. 63, No. 1, 2018, Available at SSRN: https://ssrn.com/abstract=3161181 that some courts, particularly D.C. courts, have limited the Tunney Act because of Constitutional concerns about separation of powers – the courts don’t want to overrule prosecutor’s judgments and decide what cases should or should not be prosecuted. Bush calls that view “disingenuous,” pointing out that separation of powers is really not in issue in the context of a consent decree. The court’s acceptance or rejection of a consent decree does not supplant exercise of prosecutorial discretion about whether and how to move forward with a matter. Bush also points out that concerns about separation of powers do not block the courts’ traditional role in reviewing sufficiency of remedies proposed by government prosecutors.
A thought provoking and relevant story about judicial review of questionable prosecutorial action recently arose in a context removed from antitrust. That is the extraordinary story of USDOJ’s request to United States District Judge Emmet G. Sullivan to dismiss the felony charge against President Trump’s former National Security Advisor, Michael T. Flynn. The unusual circumstance that Flynn had pled guilty and was awaiting sentencing gave the trial court a strong reason to be interested in the government’s motives. Despite the circumstances, the Government urged that Judge Sullivan had little choice but to grant the motion to dismiss, notwithstanding that the relevant Court rule requires “leave of court.” (Rule 48(a))
Commenters have pointed out that the Rule 48(a) “leave of court” requirement for government dismissal of a criminal action was purposefully added by the U.S. Supreme Court in 1944 with the goal of arming district judges with a powerful tool to halt corrupt or politically motivated dismissals of cases. See https://www.stanfordlawreview.org/online/why-do-rule-48a-dismissals-require-leave-of-court/
Judge Griffith at the August 11, 2020 en banc federal circuit court hearing concerning the Flynn case posed questions suggesting that the district court’s role in reviewing the government dismissal motion is more than ministerial. (See the video of the hearing at https://www.c-span.org/video/?474473-1/michael-flynn-perjury-dismissal-case-rehearing , beginning at approximately minute 18.) Judge Griffith says at one point about the court’s Rule 48(a) decision: “It’s not ministerial, you know that. … The judge has to do some thinking about it. He’s not simply a rubber stamp.”
Judge Robert Wilkins asked Flynn’s defense attorney Sidney Powell a hypothetical: If a group of nuns approached the court to say they had video footage of a prosecutor taking a bribe from a defendant to dismiss a case, should that judge be allowed to investigate a motion to dismiss? Powell said that no, even in such a case the trial judge “cannot go behind the prosecutors’ decision to dismiss a case.”
Returning to Chris Sagers’ comments about political misuse by prosecutors in antitrust cases, are there ways to apply to antitrust cases the very serious concern expressed in the Flynn matter: that the courts not be a rubber stamp for bad prosecutorial behavior? One way is vigorous application of Tunney Act review procedures for settlement consent decrees as advocated in Darren Bush’s article. Heightened concerns about political misuse of antitrust provide a rationale for reviving and strengthening the original Tunney Act idea that in appropriate situations the courts should have more than a ministerial role in reviewing case settlements. It is worth remembering that Tunney Act judicial review of USDOJ antitrust settlements came about because of what Senator Tunney decried as “a massive behind-closed-doors campaign [that] resulted in halting of the prosecution of the ITT case and its hasty settlement favorable to the Company.”
By Don Allen Resnikoff, who takes full responsibility for the content
Statement by Secretary Steven T. Mnuchin on the President’s Decision Regarding the Acquisition by ByteDance Ltd. of the U.S. Business of musical.ly
https://home.treasury.gov/news/press-releases/sm1094
August 14, 2020WASHINGTON – As chair of the Committee on Foreign Investment in the United States (CFIUS), U.S. Treasury Secretary Steven T. Mnuchin today issued the following statement:
“Today the President issued an order prohibiting the transaction that resulted in the acquisition of Musical.ly, now known as TikTok, by the Chinese company ByteDance. The order directs ByteDance to divest all interests and rights in any assets or property used to enable or support the operation of TikTok in the United States, and any data obtained or derived from TikTok or Musical.ly users in the United States.
“CFIUS conducted an exhaustive review of the case and unanimously recommended this action to the President in order to protect U.S. users from exploitation of their personal data.”
View a copy of the President’s order.https://home.treasury.gov/system/files/136/EO-on-TikTok-8-14-20.pdf
https://home.treasury.gov/news/press-releases/sm1094
August 14, 2020WASHINGTON – As chair of the Committee on Foreign Investment in the United States (CFIUS), U.S. Treasury Secretary Steven T. Mnuchin today issued the following statement:
“Today the President issued an order prohibiting the transaction that resulted in the acquisition of Musical.ly, now known as TikTok, by the Chinese company ByteDance. The order directs ByteDance to divest all interests and rights in any assets or property used to enable or support the operation of TikTok in the United States, and any data obtained or derived from TikTok or Musical.ly users in the United States.
“CFIUS conducted an exhaustive review of the case and unanimously recommended this action to the President in order to protect U.S. users from exploitation of their personal data.”
View a copy of the President’s order.https://home.treasury.gov/system/files/136/EO-on-TikTok-8-14-20.pdf
From Law.com: The developer of popular video game Fortnite is suing Apple and Google for allegedly monopolizing their app distribution stores and in-app payment processing markets after the tech giants booted the online game.
Attorneys from Faegre Drinker Biddle & Reath in San Francisco and Cravath, Swaine & Moore in New York filed the complaints against Apple and Google on behalf of Epic Games Inc. on Thursday in the U.S. District Court for the Northern District of California.
In the lawsuits, Epic claims the companies removed Fortnite from their iOS and Google Play app stores after the gaming company added an alternative payment option for in-app purchases. As part of license agreements with both companies, developers agree to only use their in-store payment processing tool and not even mention that users can buy the same content outside the apps.
The Complaint in Epic Games v Apple is here:
https://cdn2.unrealengine.com/apple-complaint-734589783.pdf?ref=hvper.com
Excerpt:
NATURE OF THE ACTION
1. In 1984, the fledgling Apple computer company released the Macintosh—the first mass-market, consumer-friendly home computer. The product launch was announced with a breathtaking advertisement evoking George Orwell’s 1984 that cast Apple as a beneficial, revolutionary force breaking IBM’s monopoly over the computing technology market. Apple’s founder Steve Jobs introduced the first showing of the 1984 advertisement by explaining, “it appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money . . . . Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?”
2. Fast forward to 2020, and Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear. At a market cap of nearly $2 trillion, Apple’s size and reach far exceeds that of any technology monopolist in history.
3. This case concerns Apple’s use of a series of anti-competitive restraints and monopolistic practices in markets for (i) the distribution of software applications (“apps”) to users of mobile computing devices like smartphones and tablets, and (ii) the processing of consumers’ payments for digital content used within iOS mobile apps (“in-app content”). Apple imposes unreasonable and unlawful restraints to completely monopolize both markets and prevent software developers from reaching the over one billion users of its mobile devices (e.g., iPhone and iPad) unless they go through a single store controlled by Apple, the App Store, where Apple exacts an oppressive 30% tax on the sale of every app. Apple also requires software developers who wish to sell digital in-app content to those consumers to use a single payment processing option offered by Apple, In-App Purchase, which likewise carries a 30% tax.
4. In contrast, software developers can make their products available to users of an Apple personal computer (e.g., Mac or MacBook) in an open market, through a variety of stores or even through direct downloads from a developer’s website, with a variety of payment options and competitive processing fees that average 3%, a full ten times lower than the exorbitant 30% fees Apple applies to its mobile device in-app purchases.
5. The anti-competitive consequences of Apple’s conduct are pervasive. Mobile computing devices (like smartphones and tablets)—and the apps that run on those devices—have become an integral part of people’s daily lives; as a primary source for news, a place for entertainment, a tool for business, a means to connect with friends and family, and more. For many consumers, mobile devices are their primary computers to stay connected to the digital world, as they may not even own a personal computer. When these devices are unfairly restricted and extortionately “taxed” by Apple, the consumers who rely on these mobile devices to stay connected in the digital age are directly harmed.
6. Epic brings this suit to end Apple’s unfair and anti-competitive actions that Apple undertakes to unlawfully maintain its monopoly in two distinct, multibillion dollar markets: (i) the iOS App Distribution Market, and (ii) the iOS In-App Payment Processing Market (each as defined below). Epic is not seeking monetary compensation from this Court for the injuries it has suffered. Nor is Epic seeking favorable treatment for itself, a single company. Instead, Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers.
7. Apple imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS App Distribution Market. To live up to its promise to users that “there’s an app for that”, Apple, after a short initial attempt to go it alone, opened up and invited third-party app developers to develop a wide array of apps for the iOS ecosystem. Those apps contribute immense value to that ecosystem and are one of the primary marketing features for iPhones and iPads. But Apple completely bans innovation in a central part of this ecosystem, namely, any app that could compete with Apple for the distribution of apps in iOS. Through its control over iOS, and through a variety of unlawful contractual restrictions that it forces app developers to accept, Apple prevents iOS users from downloading any apps from any source other than Apple’s own storefront, the App Store.
8. The result is that developers are prevented from selling or distributing iOS apps unless they use Apple’s App Store, and accede to Apple’s oppressive terms and conditions for doing so (some of which are discussed further below). For example, as the sole distributor of iOS apps, Apple collects the money from every iOS user’s app purchase, remits only 70% of that payment to the app developer, and retains a 30% tax for itself. iOS developers are thus forced to increase the prices they charge consumers in order to pay Apple’s app tax. There is no method app developers can use to avoid this tax, as Apple has foreclosed any alternative ways to reach the over one billion users of iOS devices. As Representative Hank Johnson aptly summed up at a recent Congressional hearing on technology monopolies: “developers have no choice but to go along with [Apple’s policies] or they must leave the App Store. That’s an enormous amount of power.”
9. Apple’s anti-competitive conduct with respect to iOS app distribution results in sweeping harms to (i) app distributors, who are foreclosed from competing with Apple and innovating new methods of distributing iOS apps to users outside the App Store (such as, for example, curated app stores targeting particular categories of apps, like gaming or travel); (ii) app developers, who are denied choice on how to distribute their apps, are forced to fork over more of their revenue on paid apps than they would if Apple faced competition, and on occasion have to abandon their apps altogether if they cannot earn a profit given Apple’s 30% tax; and (iii) consumers, who are likewise denied choice and innovation in app distribution channels and are forced to pay higher prices and suffer inferior customer service from Apple, the unwelcome middleman.
0. Apple also imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS In-App Payment Processing Market. Among the oppressive terms that app developers have to accept, Apple coerces all app developers who wish to use its App Store—the only means with which to distribute apps to iOS users—to use exclusively Apple’s own payment processing platform for all in-app purchases of in-app content. Apple thus requires third-party app developers to agree they will not even offer iOS users the choice of additional payment processing options alongside Apple’s. And Apple goes as far as to gag app developers, preventing them from even mentioning to users the option of buying the same content outside of the app—for example, by purchasing content directly from the app developer, or using a web browser. Because Apple has a monopoly over the distribution of iOS apps, app developers have no choice but to assent to this anti-competitive tie; it is Apple’s way or the highway.
11. In this market too, Apple thus stands as the monopolist middleman, positioning itself between developers and consumers. As the sole payment processor, Apple is able to take an exorbitant 30% fee on all in-app purchases of in-app content.
12. Apple’s anti-competitive conduct with respect to iOS in-app payment processing harms: (i) other payment processors, who are foreclosed from competing with Apple on price and innovating new methods of in-app payment processing (such as, for example, rewards points or payment through carrier billing); (ii) app developers, who are denied choice on how to process payments and the benefits of innovation in payment processing, and are forced to pay Apple’s tax—set by fiat—rather than by competitive market forces; and (iii) consumers, who are also denied choice and innovation in payment processing and suffer higher prices and inferior service. (Part II.)
13. Apple’s anti-competitive conduct in these markets is unchecked; Apple faces little, if any, constraint on its monopoly power in both the iOS App Distribution and iOS In-App Payment Processing Markets, as Apple has foreclosed all 5 Complaint for Injunctive Relief 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 direct competition in these markets. And Apple stands as the sole middleman between a vast and dispersed group of iOS users, and a vast and dispersed group of app developers, each with little power individually to constrain Apple.
14. Further, competition in the sale of mobile devices does not limit Apple’s market power. The threat of users switching to non-iOS devices does not constrain Apple’s anti-competitive conduct because Apple’s mobile device customers face significant switching costs and lock-in to the Apple iOS ecosystem, which serves to perpetuate Apple’s substantial market power. This power manifests itself in the data, as Apple is able to gobble up over two thirds of the total global smartphone operating profits. Furthermore, when making mobile device purchases, consumers are either unaware of, or cannot adequately account for, Apple’s anti-competitive conduct in the downstream app distribution and payment processing markets. The cost of app downloads and in-app purchases will play an insignificant (if any) role in swaying a consumer’s smartphone purchase decision.
15. Epic is one of the many app developers affected by Apple’s anticompetitive conduct. Epic is a developer of entertainment software for personal computers, smart mobile devices and gaming consoles. The most popular game Epic currently makes is Fortnite, which has connected hundreds of millions of people in a colorful, virtual world where they meet, play, talk, compete, dance, and even attend concerts and other cultural events. Fortnite is beloved by its millions of users. In the first year after Fortnite’s release in 2017, the game attracted over 125 million players; in the years since, Fortnite has topped 350 million players and has become a global cultural phenomenon.
16. Epic—and Fortnite’s users—are directly harmed by Apple’s anticompetitive conduct. But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool. Apple’s anti-competitive conduct has also injured Epic in its capacity as an app developer by forcing Epic to distribute its app exclusively through the App Store and exclusively use Apple’s payment processing services. As a result, Epic is forced, like so many other developers, to charge higher prices on its users’ in-app purchases on Fortnite in order to pay Apple’s 30% tax.
17. Contrast this anti-competitive harm with how similar markets operate on Apple’s own Mac computers. Mac users can download virtually any software they like, from any source they like. Developers are free to offer their apps through the Mac computer App Store, a third-party store, through direct download from the developer’s website, or any combination thereof. Indeed, on Macs, Epic distributes Fortnite through its own storefront, which competes with other third-party storefronts available to Mac users. App developers are free to use Apple’s payment processing services, the payment processing services of third parties, or the developers’ own payment processing service; users are offered their choice of different payment processing options (e.g., PayPal, Amazon, and Apple). The result is that consumers and developers alike have choices, competition is thriving, prices drop, and innovation is enhanced. The process should be no different for Apple’s mobile devices. But Apple has chosen to make it different by imposing contractual and technical restrictions that prevent any competition and increase consumer costs for every app and in-app content purchase—restrictions that it could never impose on Macs, where it does not enjoy the same dominance in the sale of devices. It doesn’t have to be like this.
18. Epic has approached Apple and asked to negotiate relief that would stop Apple’s unlawful and unreasonable restrictions. Epic also has publicly advocated that Apple cease the anti-competitive conduct addressed in this Complaint. Apple has refused to let go of its stranglehold on the iOS ecosystem.
19. On the morning of August 13, 2020, for the first time, Apple mobile device users were offered competitive choice. Epic added a direct payment option to Fortnite, giving players the option to continue making purchases using Apple’s payment processor or to use Epic’s direct payment system. Fortnite users on iOS, for the first time, had a competitive alternative to Apple’s payment solution, which in turn enabled Epic to pass along its cost savings by offering its users a 20% reduction in in-app prices as shown below:
20. Rather than tolerate this healthy competition and compete on the merits of its offering, Apple responded by removing Fortnite from sale on the App Store, which means that new users cannot download the app, and users who have already downloaded prior versions of the app from the App Store cannot update it to the latest version. This also means that Fortnite players who downloaded their app from the App Store will not receive updates to Fortnite through the App Store, either automatically or by searching the App Store for the update. Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market.
21. Accordingly, Epic seeks injunctive relief in court to end Apple’s unreasonable and unlawful practices. Apple’s conduct has caused and continues to cause Epic financial harm, but as noted above, Epic is not bringing this case to recover these damages; Epic is not seeking any monetary damages. Instead, Epic seeks to end Apple’s dominance over key technology markets, open up the space for progress and ingenuity, and ensure that Apple mobile devices are open to the same competition as Apple’s personal computers. As such, Epic respectfully requests this Court to enjoin Apple from continuing to impose its anti-competitive restrictions on the iOS ecosystem and ensure 2020 is not like “1984”
Attorneys from Faegre Drinker Biddle & Reath in San Francisco and Cravath, Swaine & Moore in New York filed the complaints against Apple and Google on behalf of Epic Games Inc. on Thursday in the U.S. District Court for the Northern District of California.
In the lawsuits, Epic claims the companies removed Fortnite from their iOS and Google Play app stores after the gaming company added an alternative payment option for in-app purchases. As part of license agreements with both companies, developers agree to only use their in-store payment processing tool and not even mention that users can buy the same content outside the apps.
The Complaint in Epic Games v Apple is here:
https://cdn2.unrealengine.com/apple-complaint-734589783.pdf?ref=hvper.com
Excerpt:
NATURE OF THE ACTION
1. In 1984, the fledgling Apple computer company released the Macintosh—the first mass-market, consumer-friendly home computer. The product launch was announced with a breathtaking advertisement evoking George Orwell’s 1984 that cast Apple as a beneficial, revolutionary force breaking IBM’s monopoly over the computing technology market. Apple’s founder Steve Jobs introduced the first showing of the 1984 advertisement by explaining, “it appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money . . . . Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?”
2. Fast forward to 2020, and Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear. At a market cap of nearly $2 trillion, Apple’s size and reach far exceeds that of any technology monopolist in history.
3. This case concerns Apple’s use of a series of anti-competitive restraints and monopolistic practices in markets for (i) the distribution of software applications (“apps”) to users of mobile computing devices like smartphones and tablets, and (ii) the processing of consumers’ payments for digital content used within iOS mobile apps (“in-app content”). Apple imposes unreasonable and unlawful restraints to completely monopolize both markets and prevent software developers from reaching the over one billion users of its mobile devices (e.g., iPhone and iPad) unless they go through a single store controlled by Apple, the App Store, where Apple exacts an oppressive 30% tax on the sale of every app. Apple also requires software developers who wish to sell digital in-app content to those consumers to use a single payment processing option offered by Apple, In-App Purchase, which likewise carries a 30% tax.
4. In contrast, software developers can make their products available to users of an Apple personal computer (e.g., Mac or MacBook) in an open market, through a variety of stores or even through direct downloads from a developer’s website, with a variety of payment options and competitive processing fees that average 3%, a full ten times lower than the exorbitant 30% fees Apple applies to its mobile device in-app purchases.
5. The anti-competitive consequences of Apple’s conduct are pervasive. Mobile computing devices (like smartphones and tablets)—and the apps that run on those devices—have become an integral part of people’s daily lives; as a primary source for news, a place for entertainment, a tool for business, a means to connect with friends and family, and more. For many consumers, mobile devices are their primary computers to stay connected to the digital world, as they may not even own a personal computer. When these devices are unfairly restricted and extortionately “taxed” by Apple, the consumers who rely on these mobile devices to stay connected in the digital age are directly harmed.
6. Epic brings this suit to end Apple’s unfair and anti-competitive actions that Apple undertakes to unlawfully maintain its monopoly in two distinct, multibillion dollar markets: (i) the iOS App Distribution Market, and (ii) the iOS In-App Payment Processing Market (each as defined below). Epic is not seeking monetary compensation from this Court for the injuries it has suffered. Nor is Epic seeking favorable treatment for itself, a single company. Instead, Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers.
7. Apple imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS App Distribution Market. To live up to its promise to users that “there’s an app for that”, Apple, after a short initial attempt to go it alone, opened up and invited third-party app developers to develop a wide array of apps for the iOS ecosystem. Those apps contribute immense value to that ecosystem and are one of the primary marketing features for iPhones and iPads. But Apple completely bans innovation in a central part of this ecosystem, namely, any app that could compete with Apple for the distribution of apps in iOS. Through its control over iOS, and through a variety of unlawful contractual restrictions that it forces app developers to accept, Apple prevents iOS users from downloading any apps from any source other than Apple’s own storefront, the App Store.
8. The result is that developers are prevented from selling or distributing iOS apps unless they use Apple’s App Store, and accede to Apple’s oppressive terms and conditions for doing so (some of which are discussed further below). For example, as the sole distributor of iOS apps, Apple collects the money from every iOS user’s app purchase, remits only 70% of that payment to the app developer, and retains a 30% tax for itself. iOS developers are thus forced to increase the prices they charge consumers in order to pay Apple’s app tax. There is no method app developers can use to avoid this tax, as Apple has foreclosed any alternative ways to reach the over one billion users of iOS devices. As Representative Hank Johnson aptly summed up at a recent Congressional hearing on technology monopolies: “developers have no choice but to go along with [Apple’s policies] or they must leave the App Store. That’s an enormous amount of power.”
9. Apple’s anti-competitive conduct with respect to iOS app distribution results in sweeping harms to (i) app distributors, who are foreclosed from competing with Apple and innovating new methods of distributing iOS apps to users outside the App Store (such as, for example, curated app stores targeting particular categories of apps, like gaming or travel); (ii) app developers, who are denied choice on how to distribute their apps, are forced to fork over more of their revenue on paid apps than they would if Apple faced competition, and on occasion have to abandon their apps altogether if they cannot earn a profit given Apple’s 30% tax; and (iii) consumers, who are likewise denied choice and innovation in app distribution channels and are forced to pay higher prices and suffer inferior customer service from Apple, the unwelcome middleman.
0. Apple also imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS In-App Payment Processing Market. Among the oppressive terms that app developers have to accept, Apple coerces all app developers who wish to use its App Store—the only means with which to distribute apps to iOS users—to use exclusively Apple’s own payment processing platform for all in-app purchases of in-app content. Apple thus requires third-party app developers to agree they will not even offer iOS users the choice of additional payment processing options alongside Apple’s. And Apple goes as far as to gag app developers, preventing them from even mentioning to users the option of buying the same content outside of the app—for example, by purchasing content directly from the app developer, or using a web browser. Because Apple has a monopoly over the distribution of iOS apps, app developers have no choice but to assent to this anti-competitive tie; it is Apple’s way or the highway.
11. In this market too, Apple thus stands as the monopolist middleman, positioning itself between developers and consumers. As the sole payment processor, Apple is able to take an exorbitant 30% fee on all in-app purchases of in-app content.
12. Apple’s anti-competitive conduct with respect to iOS in-app payment processing harms: (i) other payment processors, who are foreclosed from competing with Apple on price and innovating new methods of in-app payment processing (such as, for example, rewards points or payment through carrier billing); (ii) app developers, who are denied choice on how to process payments and the benefits of innovation in payment processing, and are forced to pay Apple’s tax—set by fiat—rather than by competitive market forces; and (iii) consumers, who are also denied choice and innovation in payment processing and suffer higher prices and inferior service. (Part II.)
13. Apple’s anti-competitive conduct in these markets is unchecked; Apple faces little, if any, constraint on its monopoly power in both the iOS App Distribution and iOS In-App Payment Processing Markets, as Apple has foreclosed all 5 Complaint for Injunctive Relief 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 direct competition in these markets. And Apple stands as the sole middleman between a vast and dispersed group of iOS users, and a vast and dispersed group of app developers, each with little power individually to constrain Apple.
14. Further, competition in the sale of mobile devices does not limit Apple’s market power. The threat of users switching to non-iOS devices does not constrain Apple’s anti-competitive conduct because Apple’s mobile device customers face significant switching costs and lock-in to the Apple iOS ecosystem, which serves to perpetuate Apple’s substantial market power. This power manifests itself in the data, as Apple is able to gobble up over two thirds of the total global smartphone operating profits. Furthermore, when making mobile device purchases, consumers are either unaware of, or cannot adequately account for, Apple’s anti-competitive conduct in the downstream app distribution and payment processing markets. The cost of app downloads and in-app purchases will play an insignificant (if any) role in swaying a consumer’s smartphone purchase decision.
15. Epic is one of the many app developers affected by Apple’s anticompetitive conduct. Epic is a developer of entertainment software for personal computers, smart mobile devices and gaming consoles. The most popular game Epic currently makes is Fortnite, which has connected hundreds of millions of people in a colorful, virtual world where they meet, play, talk, compete, dance, and even attend concerts and other cultural events. Fortnite is beloved by its millions of users. In the first year after Fortnite’s release in 2017, the game attracted over 125 million players; in the years since, Fortnite has topped 350 million players and has become a global cultural phenomenon.
16. Epic—and Fortnite’s users—are directly harmed by Apple’s anticompetitive conduct. But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool. Apple’s anti-competitive conduct has also injured Epic in its capacity as an app developer by forcing Epic to distribute its app exclusively through the App Store and exclusively use Apple’s payment processing services. As a result, Epic is forced, like so many other developers, to charge higher prices on its users’ in-app purchases on Fortnite in order to pay Apple’s 30% tax.
17. Contrast this anti-competitive harm with how similar markets operate on Apple’s own Mac computers. Mac users can download virtually any software they like, from any source they like. Developers are free to offer their apps through the Mac computer App Store, a third-party store, through direct download from the developer’s website, or any combination thereof. Indeed, on Macs, Epic distributes Fortnite through its own storefront, which competes with other third-party storefronts available to Mac users. App developers are free to use Apple’s payment processing services, the payment processing services of third parties, or the developers’ own payment processing service; users are offered their choice of different payment processing options (e.g., PayPal, Amazon, and Apple). The result is that consumers and developers alike have choices, competition is thriving, prices drop, and innovation is enhanced. The process should be no different for Apple’s mobile devices. But Apple has chosen to make it different by imposing contractual and technical restrictions that prevent any competition and increase consumer costs for every app and in-app content purchase—restrictions that it could never impose on Macs, where it does not enjoy the same dominance in the sale of devices. It doesn’t have to be like this.
18. Epic has approached Apple and asked to negotiate relief that would stop Apple’s unlawful and unreasonable restrictions. Epic also has publicly advocated that Apple cease the anti-competitive conduct addressed in this Complaint. Apple has refused to let go of its stranglehold on the iOS ecosystem.
19. On the morning of August 13, 2020, for the first time, Apple mobile device users were offered competitive choice. Epic added a direct payment option to Fortnite, giving players the option to continue making purchases using Apple’s payment processor or to use Epic’s direct payment system. Fortnite users on iOS, for the first time, had a competitive alternative to Apple’s payment solution, which in turn enabled Epic to pass along its cost savings by offering its users a 20% reduction in in-app prices as shown below:
20. Rather than tolerate this healthy competition and compete on the merits of its offering, Apple responded by removing Fortnite from sale on the App Store, which means that new users cannot download the app, and users who have already downloaded prior versions of the app from the App Store cannot update it to the latest version. This also means that Fortnite players who downloaded their app from the App Store will not receive updates to Fortnite through the App Store, either automatically or by searching the App Store for the update. Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market.
21. Accordingly, Epic seeks injunctive relief in court to end Apple’s unreasonable and unlawful practices. Apple’s conduct has caused and continues to cause Epic financial harm, but as noted above, Epic is not bringing this case to recover these damages; Epic is not seeking any monetary damages. Instead, Epic seeks to end Apple’s dominance over key technology markets, open up the space for progress and ingenuity, and ensure that Apple mobile devices are open to the same competition as Apple’s personal computers. As such, Epic respectfully requests this Court to enjoin Apple from continuing to impose its anti-competitive restrictions on the iOS ecosystem and ensure 2020 is not like “1984”
The EU on control issues and Apple and Google
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a “gatekeeper” role when it comes to the distribution of apps and content to users of Apple's popular devices. We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules.”
iPhone and iPad users can only download native (non web-based) apps via the App Store.
The Commission will investigate in particular two restrictions imposed by Apple in its agreements with companies that wish to distribute apps to users of Apple devices:
(i) The mandatory use of Apple's own proprietary in-app purchase system “IAP” for the distribution of paid digital content. Apple charges app developers a 30% commission on all subscription fees through IAP.
(ii) Restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps. While Apple allows users to consume content such as music, e-books and audiobooks purchased elsewhere (e.g. on the website of the app developer) also in the app, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper.
From https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1073
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a “gatekeeper” role when it comes to the distribution of apps and content to users of Apple's popular devices. We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules.”
iPhone and iPad users can only download native (non web-based) apps via the App Store.
The Commission will investigate in particular two restrictions imposed by Apple in its agreements with companies that wish to distribute apps to users of Apple devices:
(i) The mandatory use of Apple's own proprietary in-app purchase system “IAP” for the distribution of paid digital content. Apple charges app developers a 30% commission on all subscription fees through IAP.
(ii) Restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps. While Apple allows users to consume content such as music, e-books and audiobooks purchased elsewhere (e.g. on the website of the app developer) also in the app, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper.
From https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1073
Market Power, Inequality, and Financial Instability
Isabel Cair
Jae Sim
July 2020
Abstract
Over the last four decades, the U.S. economy has experienced a few secular trends, each of which may be considered undesirable in some aspects: declining labor share; rising profit share; rising income and wealth inequalities; and rising household sector leverage, and associated financial instability. We develop a real business cycle model and show that the rise of market power of the firms in both product and labor markets over the last four decades can generate all of these secular trends. We derive macroprudential policy implications for financial stability.
https://www.federalreserve.gov/econres/feds/files/2020057pap.pdf
Isabel Cair
Jae Sim
July 2020
Abstract
Over the last four decades, the U.S. economy has experienced a few secular trends, each of which may be considered undesirable in some aspects: declining labor share; rising profit share; rising income and wealth inequalities; and rising household sector leverage, and associated financial instability. We develop a real business cycle model and show that the rise of market power of the firms in both product and labor markets over the last four decades can generate all of these secular trends. We derive macroprudential policy implications for financial stability.
https://www.federalreserve.gov/econres/feds/files/2020057pap.pdf
Linda Greenhouse writes about the status of abortion rights law:
Excerpt:
When I wrapped up the Supreme Court term in a column last month, I observed that in his separate opinion providing a crucial fifth vote to overturn a Louisiana abortion law, Chief Justice John Roberts had been “careful to leave the door open to continued attacks on the right to abortion.”
What I intended as a cleareyed warning to my fellow abortion-rights supporters to hold the cheers for the outcome in June Medical Services v. Russo turns out to have been quite an understatement. It turns out that the door, with the chief justice holding it, opened wide enough to drive an entire federal appeals court through.
Last week, the famously anti-abortion United States Court of Appeals for the Eighth Circuit invoked the chief justice’s separate opinion to justify reinstating four Arkansas anti-abortion laws that a federal district judge had invalidated more than three years ago.
https://www.nytimes.com/2020/08/13/opinion/arkansas-abortion-laws.html
Excerpt:
When I wrapped up the Supreme Court term in a column last month, I observed that in his separate opinion providing a crucial fifth vote to overturn a Louisiana abortion law, Chief Justice John Roberts had been “careful to leave the door open to continued attacks on the right to abortion.”
What I intended as a cleareyed warning to my fellow abortion-rights supporters to hold the cheers for the outcome in June Medical Services v. Russo turns out to have been quite an understatement. It turns out that the door, with the chief justice holding it, opened wide enough to drive an entire federal appeals court through.
Last week, the famously anti-abortion United States Court of Appeals for the Eighth Circuit invoked the chief justice’s separate opinion to justify reinstating four Arkansas anti-abortion laws that a federal district judge had invalidated more than three years ago.
https://www.nytimes.com/2020/08/13/opinion/arkansas-abortion-laws.html
Bloomberg on Russian COVID vaccine: there are questions around other vaccine candidates, too.
Moderna Inc., which reached a $1.5 billion deal with the Trump administration this week to supply 100 million doses, is one of several companies pushing a novel technology called mRNA. Its shot produced side effects among participants in clinical trials.Other early vaccines, possibly including one from the University of Oxford and AstraZeneca Plc, may not stop you from catching or spreading the virus though might prevent severe illness or death. [See https://www.bloomberg.com/news/articles/2020-06-15/the-first-covid-vaccines-may-not-prevent-you-from-getting-covid?] That’s a huge step, but still imperfect in the world of vaccines.
Moderna Inc., which reached a $1.5 billion deal with the Trump administration this week to supply 100 million doses, is one of several companies pushing a novel technology called mRNA. Its shot produced side effects among participants in clinical trials.Other early vaccines, possibly including one from the University of Oxford and AstraZeneca Plc, may not stop you from catching or spreading the virus though might prevent severe illness or death. [See https://www.bloomberg.com/news/articles/2020-06-15/the-first-covid-vaccines-may-not-prevent-you-from-getting-covid?] That’s a huge step, but still imperfect in the world of vaccines.
THE EVICTION CRISIS AND STEVEN MNUCHIN
There is a current housing eviction crisis connected to COVID-19 and widespread unemployment. See https://nlihc.org/sites/default/files/The_Eviction_Crisis_080720.pdf
We can hope that the U.S. Government will not repeat errors that occurred after the 2008 financial crisis. According to many observers, at that time large investors were subsidized by the Government as they foreclosed on many home mortgages that should have been modified so that homeowners could pay the modified mortgages and stay in their homes.
The flawed U.S. Government’s response to the 2008 housing crisis is discussed in the recent book The Homewreckers, by Aaron Glantz. One topic of the book is how big investors worked with the US Government in a manner that, in Glantz’s view, unfairly enriched big investors and harmed struggling homeowners. A summary version is presented in Glantz’s Congressional testimony, which can be found at https://www.revealnews.org/article/reveal-submits-testimony-to-congress/
Here is part of the story: In 2007 Steven Mnuchin formed a consortium of five investors, including Michael Dell, John Paulson, and George Soros, and acquired the struggling IndyMac Bank. The Bank was struggling because of the many shaky loans it had made.
According to Glantz, the F.D.I.C. imposed some weak conditions on IndyMac’s new owners—a particularly important one wass that they had to modify, rather than foreclose on, as many mortgages as possible. But Mnuchin and his colleagues were free to keep any profits they made, and the F.D.I.C. agreed to cover most losses on deteriorating mortgage loans that they had inherited.
IndyMac, renamed OneWest, soon had big profits, while the FDIC paid billions of dollars to the bank. In the course of five years, the F.D.I.C. paid out more than a billion dollars, during which time OneWest foreclosed on thirty-six thousand homes in California, many of them in low-income neighborhoods. Approximately seventy per cent of OneWest’s foreclosures were in neighborhoods where most of the residents were people of color, according to some sources. Such trends were playing out nationwide, but, according to Aaron Glantz, OneWest was one of the worst offenders.
When a New Yorker magazine reporter recently asked Mnuchin about the controversy surrounding IndyMac and OneWest, he said, “I think this whole thing about me and mortgage foreclosures isn’t fair.” Many of the souring home loans that IndyMac was servicing couldn’t be modified, he said, leaving the bank with no choice but to foreclose on owners who stopped paying. “I never wanted to foreclose on those people,” Mnuchin said. “Having someone’s home foreclosed upon is a terrible experience.” See https://www.newyorker.com/magazine/2020/07/20/the-high-finance-mogul-in-charge-of-our-economic-recovery?
There is a point about the 2008 housing crisis that may be more important than the politically charged questions of whether or not an elite group of investors including current US Secretary of the Treasury Mnuchin gained unfairly from widespread mortgage foreclosures, or whether or not the Obama Administration and California State government provided sufficient protection for homeowners. It is that the government should do better for financially struggling homeowners in the current financial crisis.
What that means is a system for struggling homeowners where mortgage modification rather than mortgage foreclosure is really the preferred solution for as many mortgages as possible. That means lowering monthly payments to reflect the real underlying values of the homes or adding years to the mortgages to make the monthly payments more manageable. If a home owner misses mortgage payments, there should be an effort to avoid immediate foreclosure. Wholesale mortgage foreclosures without individual modification negotiations should be avoided. Many foreclosures by OneWest on particular homes reportedly yielded less for the Bank than the return that would have been received from modified mortgages.
Posted by Don Allen Resnikoff, who is responsible for the content
There is a current housing eviction crisis connected to COVID-19 and widespread unemployment. See https://nlihc.org/sites/default/files/The_Eviction_Crisis_080720.pdf
We can hope that the U.S. Government will not repeat errors that occurred after the 2008 financial crisis. According to many observers, at that time large investors were subsidized by the Government as they foreclosed on many home mortgages that should have been modified so that homeowners could pay the modified mortgages and stay in their homes.
The flawed U.S. Government’s response to the 2008 housing crisis is discussed in the recent book The Homewreckers, by Aaron Glantz. One topic of the book is how big investors worked with the US Government in a manner that, in Glantz’s view, unfairly enriched big investors and harmed struggling homeowners. A summary version is presented in Glantz’s Congressional testimony, which can be found at https://www.revealnews.org/article/reveal-submits-testimony-to-congress/
Here is part of the story: In 2007 Steven Mnuchin formed a consortium of five investors, including Michael Dell, John Paulson, and George Soros, and acquired the struggling IndyMac Bank. The Bank was struggling because of the many shaky loans it had made.
According to Glantz, the F.D.I.C. imposed some weak conditions on IndyMac’s new owners—a particularly important one wass that they had to modify, rather than foreclose on, as many mortgages as possible. But Mnuchin and his colleagues were free to keep any profits they made, and the F.D.I.C. agreed to cover most losses on deteriorating mortgage loans that they had inherited.
IndyMac, renamed OneWest, soon had big profits, while the FDIC paid billions of dollars to the bank. In the course of five years, the F.D.I.C. paid out more than a billion dollars, during which time OneWest foreclosed on thirty-six thousand homes in California, many of them in low-income neighborhoods. Approximately seventy per cent of OneWest’s foreclosures were in neighborhoods where most of the residents were people of color, according to some sources. Such trends were playing out nationwide, but, according to Aaron Glantz, OneWest was one of the worst offenders.
When a New Yorker magazine reporter recently asked Mnuchin about the controversy surrounding IndyMac and OneWest, he said, “I think this whole thing about me and mortgage foreclosures isn’t fair.” Many of the souring home loans that IndyMac was servicing couldn’t be modified, he said, leaving the bank with no choice but to foreclose on owners who stopped paying. “I never wanted to foreclose on those people,” Mnuchin said. “Having someone’s home foreclosed upon is a terrible experience.” See https://www.newyorker.com/magazine/2020/07/20/the-high-finance-mogul-in-charge-of-our-economic-recovery?
There is a point about the 2008 housing crisis that may be more important than the politically charged questions of whether or not an elite group of investors including current US Secretary of the Treasury Mnuchin gained unfairly from widespread mortgage foreclosures, or whether or not the Obama Administration and California State government provided sufficient protection for homeowners. It is that the government should do better for financially struggling homeowners in the current financial crisis.
What that means is a system for struggling homeowners where mortgage modification rather than mortgage foreclosure is really the preferred solution for as many mortgages as possible. That means lowering monthly payments to reflect the real underlying values of the homes or adding years to the mortgages to make the monthly payments more manageable. If a home owner misses mortgage payments, there should be an effort to avoid immediate foreclosure. Wholesale mortgage foreclosures without individual modification negotiations should be avoided. Many foreclosures by OneWest on particular homes reportedly yielded less for the Bank than the return that would have been received from modified mortgages.
Posted by Don Allen Resnikoff, who is responsible for the content
Chris Sagers: Trump and Delrahim have left the Antitrust Division a corrupted and misbegotten shambles.
"Makan Delrahim briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks."
https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
"Makan Delrahim briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks."
https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
The Ninth Circuit on Tuesday reversed the Federal Trade Commission's win in the agency's case accusing Qualcomm of violating antitrust law through its licensing practices for standard-essential patents covering cellular technology.
The Ninth Circuit on Tuesday reversed the FTC's win in its case alleging Qualcomm's licensing practices violate antitrust law. (AP Photo/Richard Drew)
The panel found that if Qualcomm did breach its obligations to license its SEPs on fair, reasonable and non-discriminatory terms, it would be a breach of contract issue, not an antitrust problem. It also found that the company's "no license, no chips" policy did not impose a surcharge on the sales of chips by rivals, as the lower court had found.
Writing for the panel, U.S. Circuit Judge Consuelo M. Callahan said that the district court had issued a worldwide injunction barring several of Qualcomm's core business practices and that the appellate court had stayed the order at Qualcomm's request, which was backed by the U.S. Department of Justice and other federal agencies.
"At that time, we characterized the district court's order and injunction as either 'a trailblazing application of the antitrust laws' or 'an improper excursion beyond the outer limits of the Sherman Act,'" the opinion said. "We now hold that the district court went beyond the scope of the Sherman Act, and we reverse."
Read more at: https://www.law360.com/competition/articles/1300307?copied=1
The court opinion is here: https://www.scribd.com/document/472126232/20-08-11-9th-Cir-Opinion-Reversing-FTC-v-Qualcomm-Ruling
The Ninth Circuit on Tuesday reversed the FTC's win in its case alleging Qualcomm's licensing practices violate antitrust law. (AP Photo/Richard Drew)
The panel found that if Qualcomm did breach its obligations to license its SEPs on fair, reasonable and non-discriminatory terms, it would be a breach of contract issue, not an antitrust problem. It also found that the company's "no license, no chips" policy did not impose a surcharge on the sales of chips by rivals, as the lower court had found.
Writing for the panel, U.S. Circuit Judge Consuelo M. Callahan said that the district court had issued a worldwide injunction barring several of Qualcomm's core business practices and that the appellate court had stayed the order at Qualcomm's request, which was backed by the U.S. Department of Justice and other federal agencies.
"At that time, we characterized the district court's order and injunction as either 'a trailblazing application of the antitrust laws' or 'an improper excursion beyond the outer limits of the Sherman Act,'" the opinion said. "We now hold that the district court went beyond the scope of the Sherman Act, and we reverse."
Read more at: https://www.law360.com/competition/articles/1300307?copied=1
The court opinion is here: https://www.scribd.com/document/472126232/20-08-11-9th-Cir-Opinion-Reversing-FTC-v-Qualcomm-Ruling
The D.C. Circuit overrules the Copyright Royalty Board's ruling hiking the rates that streaming services must pay songwriters and publishers.
Exactly how much it disagrees isn't clear — the panel sealed its Friday opinion vacating part of the ruling.
All that was public of the three-judge panel's decision as of Friday afternoon was a brief summary noting that the appeals court affirmed in part, vacated in part and remanded the case to the copyright board for a consistent decision.
When the panel was hearing arguments in the case in March — before the court system switched to largely virtual and telephone proceedings — at least two judges on the panel seemed concerned that record labels might pull their content from streaming services should they be pushed to accept a smaller slice of the royalty pie.
At dispute in the case is the Copyright Royalty Board's decision in February 2019 to usher in a new era of royalty rates after several years of contentious proceedings over the matter, and essentially everyone with a finger in the pie is unhappy with some part of its decision.
Copyrightowners and songwriters are displeased — particularly one George D. Johnson, who represented himself pro se and was praised by the court for his performance — because they believe the royalty hike was too little, too late.
Source: https://www.law360.com/articles/1299549/dc-circ-breathes-new-life-into-copyright-royalty-hike-fight?copied=1 [pay wall]
Exactly how much it disagrees isn't clear — the panel sealed its Friday opinion vacating part of the ruling.
All that was public of the three-judge panel's decision as of Friday afternoon was a brief summary noting that the appeals court affirmed in part, vacated in part and remanded the case to the copyright board for a consistent decision.
When the panel was hearing arguments in the case in March — before the court system switched to largely virtual and telephone proceedings — at least two judges on the panel seemed concerned that record labels might pull their content from streaming services should they be pushed to accept a smaller slice of the royalty pie.
At dispute in the case is the Copyright Royalty Board's decision in February 2019 to usher in a new era of royalty rates after several years of contentious proceedings over the matter, and essentially everyone with a finger in the pie is unhappy with some part of its decision.
Copyrightowners and songwriters are displeased — particularly one George D. Johnson, who represented himself pro se and was praised by the court for his performance — because they believe the royalty hike was too little, too late.
Source: https://www.law360.com/articles/1299549/dc-circ-breathes-new-life-into-copyright-royalty-hike-fight?copied=1 [pay wall]
Federal Court Terminates Paramount Consent Decrees
A federal court in the Southern District of New York terminated the Paramount Consent Decrees, which for over seventy years have regulated how certain movie studios distribute films to movie theatres. The review and termination of these Decrees were part of the Department of Justice’s review of legacy antitrust judgments that dated back to the 1890’s and has resulted in the termination of nearly 800 perpetual decrees.
“We appreciate the Court’s thoughtful opinion and ruling today granting our motion to terminate these outdated Paramount Decrees,” said Makan Delrahim, Assistant Attorney General for the Justice Department’s Antitrust Division. “As the Court points out, Gone with the Wind, The Wizard of Oz, and It’s a Wonderful Life were the blockbusters when these Decrees were litigated; the movie industry and how Americans enjoy their movies have changed leaps and bounds in these intervening years. Without these restraints on the market, American ingenuity is again free to experiment with different business models that can benefit consumers.”
In summary, the Court concluded that the government had offered a persuasive explanation for why termination of the Paramount Decrees serves the public interest in free and unfettered competition. The conspiracy and practices that existed decades ago no longer exist. New technology has created many different movie platforms that did not exist when the Decrees were entered into, including cable and broadcast television, DVDs, and streaming and download services.
https://www.justice.gov/opa/pr/federal-court-terminates-paramount-consent-decrees
A federal court in the Southern District of New York terminated the Paramount Consent Decrees, which for over seventy years have regulated how certain movie studios distribute films to movie theatres. The review and termination of these Decrees were part of the Department of Justice’s review of legacy antitrust judgments that dated back to the 1890’s and has resulted in the termination of nearly 800 perpetual decrees.
“We appreciate the Court’s thoughtful opinion and ruling today granting our motion to terminate these outdated Paramount Decrees,” said Makan Delrahim, Assistant Attorney General for the Justice Department’s Antitrust Division. “As the Court points out, Gone with the Wind, The Wizard of Oz, and It’s a Wonderful Life were the blockbusters when these Decrees were litigated; the movie industry and how Americans enjoy their movies have changed leaps and bounds in these intervening years. Without these restraints on the market, American ingenuity is again free to experiment with different business models that can benefit consumers.”
In summary, the Court concluded that the government had offered a persuasive explanation for why termination of the Paramount Decrees serves the public interest in free and unfettered competition. The conspiracy and practices that existed decades ago no longer exist. New technology has created many different movie platforms that did not exist when the Decrees were entered into, including cable and broadcast television, DVDs, and streaming and download services.
https://www.justice.gov/opa/pr/federal-court-terminates-paramount-consent-decrees
Antitrust & Corruption: Overruling Noerr
-
August 3, 2020By Tim Wu, (Columbia University)
We live in a time when concerns about influence over the American political process by powerful private interests have reached an apogee, both on the left and the right. Among the laws originally intended to fight excessive private influence over republican institutions were the antitrust laws, whose sponsors were concerned not just with monopoly, but also its influence over legislatures and politicians. While no one would claim that the antitrust laws were meant to be comprehensive anti-corruption laws, there can be little question that they were passed with concerns about the political influence of powerful firms and industry cartels.
Since the 1960s, however, antitrust law’s scrutiny of corrupt and deceptive political practices has been sharply limited by the Noerr-Pennington doctrine, which provides immunity to antitrust liability for conduct that can be described as political or legal advocacy. The doctrine was created through apparent First Amendment avoidance, based on the premise that the Sherman Act could not have been intended to interfere with a right to petition government.
The Noerr decision, dating from 1961, was strained when it was decided and has not aged well. As an interpretation of the antitrust laws, it ignored Congressional concern with political mischief undertaken by conspiracy or monopoly. Its legitimacy has always rested on avoidance of the First Amendment, and while Noerr itself may have legitimately reflected such avoidance, the subsequent growth of a Noerr immunity has blown past any First Amendment-driven defense of its existence. For that reason, others have suggested a reformulation of the doctrine. The better answer is that, lacking constitutional or statutory foundation, Noerr should be overruled.
The First Amendment guarantees freedom of speech, assembly, and “to petition the government for a redress of grievances.” It therefore protects efforts to influence political debate as well as legitimate petitioning in the legislative, judicial or administrative processes. The First Amendment does not, however create a right to bribe government officials, deceive agencies, file false statements, or abuse government process through repeated filings designed only to injure a competitor. Nonetheless, each of these activities has, in some courts at least, been granted immunity under the overgrown Noerr immunity. It is an extra-constitutional outlier ripe for reexamination.
Overruling Noerr would not make political petitioning illegal. It would, instead, require defendants to rely on the First Amendment when seeking to defend what would otherwise be conduct that is illegal under the antitrust laws. Doctrinally, this is to force courts to address whether conduct in question is actually an antitrust violation, and if, so whether it is protected by the First Amendment or not, drawing on an established jurisprudence for some of the problems presented in the Noerr context.
Continue Reading https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3630610
-
August 3, 2020By Tim Wu, (Columbia University)
We live in a time when concerns about influence over the American political process by powerful private interests have reached an apogee, both on the left and the right. Among the laws originally intended to fight excessive private influence over republican institutions were the antitrust laws, whose sponsors were concerned not just with monopoly, but also its influence over legislatures and politicians. While no one would claim that the antitrust laws were meant to be comprehensive anti-corruption laws, there can be little question that they were passed with concerns about the political influence of powerful firms and industry cartels.
Since the 1960s, however, antitrust law’s scrutiny of corrupt and deceptive political practices has been sharply limited by the Noerr-Pennington doctrine, which provides immunity to antitrust liability for conduct that can be described as political or legal advocacy. The doctrine was created through apparent First Amendment avoidance, based on the premise that the Sherman Act could not have been intended to interfere with a right to petition government.
The Noerr decision, dating from 1961, was strained when it was decided and has not aged well. As an interpretation of the antitrust laws, it ignored Congressional concern with political mischief undertaken by conspiracy or monopoly. Its legitimacy has always rested on avoidance of the First Amendment, and while Noerr itself may have legitimately reflected such avoidance, the subsequent growth of a Noerr immunity has blown past any First Amendment-driven defense of its existence. For that reason, others have suggested a reformulation of the doctrine. The better answer is that, lacking constitutional or statutory foundation, Noerr should be overruled.
The First Amendment guarantees freedom of speech, assembly, and “to petition the government for a redress of grievances.” It therefore protects efforts to influence political debate as well as legitimate petitioning in the legislative, judicial or administrative processes. The First Amendment does not, however create a right to bribe government officials, deceive agencies, file false statements, or abuse government process through repeated filings designed only to injure a competitor. Nonetheless, each of these activities has, in some courts at least, been granted immunity under the overgrown Noerr immunity. It is an extra-constitutional outlier ripe for reexamination.
Overruling Noerr would not make political petitioning illegal. It would, instead, require defendants to rely on the First Amendment when seeking to defend what would otherwise be conduct that is illegal under the antitrust laws. Doctrinally, this is to force courts to address whether conduct in question is actually an antitrust violation, and if, so whether it is protected by the First Amendment or not, drawing on an established jurisprudence for some of the problems presented in the Noerr context.
Continue Reading https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3630610
From: https://www.whitehouse.gov/presidential-actions/executive-order-addressing-threat-posed-tiktok/
Executive Order on Addressing the Threat Posed by TikTok
Infrastructure & Technology
Issued on: August 6, 2020
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code,
I, DONALD J. TRUMP, President of the United States of America, find that additional steps must be taken to deal with the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873 of May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain). Specifically, the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States. At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.
TikTok, a video-sharing mobile application owned by the Chinese company ByteDance Ltd., has reportedly been downloaded over 175 million times in the United States and over one billion times globally. TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.
TikTok also reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China’s treatment of Uyghurs and other Muslim minorities. This mobile application may also be used for disinformation campaigns that benefit the Chinese Communist Party, such as when TikTok videos spread debunked conspiracy theories about the origins of the 2019 Novel Coronavirus.
These risks are real. The Department of Homeland Security, Transportation Security Administration, and the United States Armed Forces have already banned the use of TikTok on Federal Government phones. The Government of India recently banned the use of TikTok and other Chinese mobile applications throughout the country; in a statement, India’s Ministry of Electronics and Information Technology asserted that they were “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India.” American companies and organizations have begun banning TikTok on their devices. The United States must take aggressive action against the owners of TikTok to protect our national security.
Accordingly, I hereby order:
Section 1. (a) The following actions shall be prohibited beginning 45 days after the date of this order, to the extent permitted under applicable law: any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd. (a.k.a. Zìjié Tiàodòng), Beijing, China, or its subsidiaries, in which any such company has any interest, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order.
(b) The prohibition in subsection (a) of this section applies except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.
(c) 45 days after the date of this order, the Secretary shall identify the transactions subject to subsection (a) of this section.
Sec. 2. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
Sec. 3. For the purposes of this order:
(a) the term “person” means an individual or entity;
(b) the term “entity” means a government or instrumentality of such government, partnership, association, trust, joint venture, corporation, group, subgroup, or other organization, including an international organization; and
(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.
Sec. 4. The Secretary is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA as may be necessary to implement this order. The Secretary may, consistent with applicable law, redelegate any of these functions within the Department of Commerce. All departments and agencies of the United States shall take all appropriate measures within their authority to implement this order.
Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department, agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
DONALD J. TRUMP
THE WHITE HOUSE,
August 6, 2020.
Executive Order on Addressing the Threat Posed by TikTok
Infrastructure & Technology
Issued on: August 6, 2020
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code,
I, DONALD J. TRUMP, President of the United States of America, find that additional steps must be taken to deal with the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873 of May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain). Specifically, the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States. At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.
TikTok, a video-sharing mobile application owned by the Chinese company ByteDance Ltd., has reportedly been downloaded over 175 million times in the United States and over one billion times globally. TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.
TikTok also reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China’s treatment of Uyghurs and other Muslim minorities. This mobile application may also be used for disinformation campaigns that benefit the Chinese Communist Party, such as when TikTok videos spread debunked conspiracy theories about the origins of the 2019 Novel Coronavirus.
These risks are real. The Department of Homeland Security, Transportation Security Administration, and the United States Armed Forces have already banned the use of TikTok on Federal Government phones. The Government of India recently banned the use of TikTok and other Chinese mobile applications throughout the country; in a statement, India’s Ministry of Electronics and Information Technology asserted that they were “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India.” American companies and organizations have begun banning TikTok on their devices. The United States must take aggressive action against the owners of TikTok to protect our national security.
Accordingly, I hereby order:
Section 1. (a) The following actions shall be prohibited beginning 45 days after the date of this order, to the extent permitted under applicable law: any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd. (a.k.a. Zìjié Tiàodòng), Beijing, China, or its subsidiaries, in which any such company has any interest, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order.
(b) The prohibition in subsection (a) of this section applies except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.
(c) 45 days after the date of this order, the Secretary shall identify the transactions subject to subsection (a) of this section.
Sec. 2. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
Sec. 3. For the purposes of this order:
(a) the term “person” means an individual or entity;
(b) the term “entity” means a government or instrumentality of such government, partnership, association, trust, joint venture, corporation, group, subgroup, or other organization, including an international organization; and
(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.
Sec. 4. The Secretary is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA as may be necessary to implement this order. The Secretary may, consistent with applicable law, redelegate any of these functions within the Department of Commerce. All departments and agencies of the United States shall take all appropriate measures within their authority to implement this order.
Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department, agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
DONALD J. TRUMP
THE WHITE HOUSE,
August 6, 2020.
NYT: The nation’s leading health insurers are experiencing an embarrassment of profits.
Some of the largest companies, including Anthem, Humana and UnitedHealth Group, are reporting second-quarter earnings that are double what they were a year ago. And while insurance profits are capped under the Affordable Care Act, with the requirement that consumers should benefit from such excesses in the form of rebates, no one should expect an immediate windfall.
But the amounts that insurers are retaining have caught the attention of the Trump administration. The Health and Human Services Department advised companies to consider speeding up rebates, and on Tuesday suggested that they reduce premiums to help consumers through the economic downturn caused by the pandemic.
The US Government advisory is here: https://www.cms.gov/newsroom/press-releases/cms-announces-temporary-policy-premium-reductions
NYT credit: https://www.nytimes.com/2020/08/05/health/covid-insurance-profits.html?action=click&module=Latest&pgtype=Homepage
Some of the largest companies, including Anthem, Humana and UnitedHealth Group, are reporting second-quarter earnings that are double what they were a year ago. And while insurance profits are capped under the Affordable Care Act, with the requirement that consumers should benefit from such excesses in the form of rebates, no one should expect an immediate windfall.
But the amounts that insurers are retaining have caught the attention of the Trump administration. The Health and Human Services Department advised companies to consider speeding up rebates, and on Tuesday suggested that they reduce premiums to help consumers through the economic downturn caused by the pandemic.
The US Government advisory is here: https://www.cms.gov/newsroom/press-releases/cms-announces-temporary-policy-premium-reductions
NYT credit: https://www.nytimes.com/2020/08/05/health/covid-insurance-profits.html?action=click&module=Latest&pgtype=Homepage
AGs letter to Facebook
[Not all AG signatures are shown]
[Not all AG signatures are shown]
Multistate AGs' letter to HHS seeking remedy against Gilead for Remdesivir shortage
https://www.oag.ca.gov/system/files/attachments/press-docs/Remdesivir%20Letter%2020200804.pdf
Excerpts:
Remdesivir has benefited from millions of dollars of public funding, including a $30- million NIH-funded clinical trial estimated for this fiscal year alone.11 But despite the large infusion of taxpayer monies, Gilead is unable to guarantee a supply of remdesivir sufficient to alleviate the health and safety needs of the country amid the pandemic.
***
Aside from production issues, the large infusion of taxpayer dollars into remdesivir has not resulted in the product being made available at a reasonable price. A study from four institutions, including the University of Liverpool and Howard University, found that remdesivir can be manufactured at $0.93 per day or $12.50 per patient.16 Yet, in June, Gilead announced that the company will charge government programs, including the U.S. government’s Indian Health Services and the Department of Veterans Affairs, $2,340 for a six-vial, five-day treatment course ($390 per vial).17 For patients with private insurance, as well as Medicare and Medicaid, Gilead will charge 33% more or $3,120 (the equivalent of $520 per vial) for the exact same treatment.18 Gilead did not announce the pricing structure for the uninsured.19
It is unfortunate that Gilead has chosen to place its profit margins over the interests of Americans suffering in this pandemic. Record unemployment and ongoing financial troubles will prevent many Americans from paying for remdesivir. Even for the insured, Gilead’s excessive pricing makes copayments and out-of-pocket expenses cost-prohibitive. Moreover, Gilead’s pricing will challenge the growing numbers of Americans that lack health coverage as a result of the pandemic.20 If Americans who need remdesivir find themselves unable to afford a treatment course, then federal agencies have sufficient reason to require Gilead to “license both the background patents and the patents stemming from the contract work” under the Bayh-Dole Act.21
In light of the unprecedented COVID-19 crisis, we request the NIH and FDA exercise their march-in rights under the Bayh-Dole Act. Failing that, we ask that the NIH and FDA assign to the states these rights to ensure that drug manufacturers are licensed to meet the market demand during this health crisis. Alongside either exercise, we urge you to make full and immediate use of your legal authority under the Defense Production Act to put the weight of the federal government behind a rapid scaling up of remdesivir production and distribution. Under the authority already delegated to Secretary Azar of HHS under the Executive Order of March 18th, 2020, the Secretary has the power to invoke the Defense Production Act to identify specific health and medical resources needed to respond to the COVID-19 crisis, and to require performance of contracts or orders to meet the needs of the country over other priorities.22
Critically, this delegation of power to the HHS Secretary already extends to drugs—not just to PPE and ventilators—and can help states.23 Now more than ever, the American public needs the support of the federal government in helping them afford COVID-19-related treatment. This is not the time for any company to extract large corporate profits from uninsured and underinsured Americans—nor can we allow the individual market priorities and weaknesses of one company to determine the fates of hundreds of thousands of people. Gilead should not profit from the pandemic and it should be pushed to do more to help more people.
We look forward to a prompt response in bringing relief to millions of COVID-19 patients and working with our federal partners to rapidly scale up remdesivir production and distribution.
Sincerely,
Xavier Becerra California Attorney General
Jeff Landry Louisiana Attorney General
[and 28 other AGs, including Karl Racine DC AG]
https://www.oag.ca.gov/system/files/attachments/press-docs/Remdesivir%20Letter%2020200804.pdf
Excerpts:
Remdesivir has benefited from millions of dollars of public funding, including a $30- million NIH-funded clinical trial estimated for this fiscal year alone.11 But despite the large infusion of taxpayer monies, Gilead is unable to guarantee a supply of remdesivir sufficient to alleviate the health and safety needs of the country amid the pandemic.
***
Aside from production issues, the large infusion of taxpayer dollars into remdesivir has not resulted in the product being made available at a reasonable price. A study from four institutions, including the University of Liverpool and Howard University, found that remdesivir can be manufactured at $0.93 per day or $12.50 per patient.16 Yet, in June, Gilead announced that the company will charge government programs, including the U.S. government’s Indian Health Services and the Department of Veterans Affairs, $2,340 for a six-vial, five-day treatment course ($390 per vial).17 For patients with private insurance, as well as Medicare and Medicaid, Gilead will charge 33% more or $3,120 (the equivalent of $520 per vial) for the exact same treatment.18 Gilead did not announce the pricing structure for the uninsured.19
It is unfortunate that Gilead has chosen to place its profit margins over the interests of Americans suffering in this pandemic. Record unemployment and ongoing financial troubles will prevent many Americans from paying for remdesivir. Even for the insured, Gilead’s excessive pricing makes copayments and out-of-pocket expenses cost-prohibitive. Moreover, Gilead’s pricing will challenge the growing numbers of Americans that lack health coverage as a result of the pandemic.20 If Americans who need remdesivir find themselves unable to afford a treatment course, then federal agencies have sufficient reason to require Gilead to “license both the background patents and the patents stemming from the contract work” under the Bayh-Dole Act.21
In light of the unprecedented COVID-19 crisis, we request the NIH and FDA exercise their march-in rights under the Bayh-Dole Act. Failing that, we ask that the NIH and FDA assign to the states these rights to ensure that drug manufacturers are licensed to meet the market demand during this health crisis. Alongside either exercise, we urge you to make full and immediate use of your legal authority under the Defense Production Act to put the weight of the federal government behind a rapid scaling up of remdesivir production and distribution. Under the authority already delegated to Secretary Azar of HHS under the Executive Order of March 18th, 2020, the Secretary has the power to invoke the Defense Production Act to identify specific health and medical resources needed to respond to the COVID-19 crisis, and to require performance of contracts or orders to meet the needs of the country over other priorities.22
Critically, this delegation of power to the HHS Secretary already extends to drugs—not just to PPE and ventilators—and can help states.23 Now more than ever, the American public needs the support of the federal government in helping them afford COVID-19-related treatment. This is not the time for any company to extract large corporate profits from uninsured and underinsured Americans—nor can we allow the individual market priorities and weaknesses of one company to determine the fates of hundreds of thousands of people. Gilead should not profit from the pandemic and it should be pushed to do more to help more people.
We look forward to a prompt response in bringing relief to millions of COVID-19 patients and working with our federal partners to rapidly scale up remdesivir production and distribution.
Sincerely,
Xavier Becerra California Attorney General
Jeff Landry Louisiana Attorney General
[and 28 other AGs, including Karl Racine DC AG]
Maryland is working with six other states to negotiate the purchase of so-called antigen tests for the coronavirus that will return results more quickly, Gov. Larry Hogan said Tuesday.
Maryland formed an alliance with the states of Louisiana, Massachusetts, Michigan, Ohio and Virginia as well as the Rockefeller Foundation to negotiate to buy 500,000 tests for each state, Hogan said Tuesday morning. By the end of the day, North Carolina joined the pact, bringing the potential joint purchase to 3.5 million tests.
From https://www.baltimoresun.com/coronavirus/bs-md-hogan-antigen-20200804-n564sfbyjrbpplkdmhg6d6cwbe-story.html
Maryland formed an alliance with the states of Louisiana, Massachusetts, Michigan, Ohio and Virginia as well as the Rockefeller Foundation to negotiate to buy 500,000 tests for each state, Hogan said Tuesday morning. By the end of the day, North Carolina joined the pact, bringing the potential joint purchase to 3.5 million tests.
From https://www.baltimoresun.com/coronavirus/bs-md-hogan-antigen-20200804-n564sfbyjrbpplkdmhg6d6cwbe-story.html
WSJ on China reaction after Trump intervention in Microsoft/Tik-Tok Acwuisition talks
In China, talk of a TikTok sale has gone down badly. The Global Times, a Communist Party tabloid, derided the situation as “the hunting and looting of TikTok by the U.S. government in conjunction with U.S. high-tech companies.” One risk for Microsoft is that the Chinese government retaliates over the company’s role in a TikTok deal, political analysts have suggested, such as by targeting the Chinese versions of its Bing search engine or LinkedIn, the business-focused social-media platform that Microsoft bought in 2016.
From https://www.wsj.com/articles/microsoft-ceo-nadella-wades-into-u-s-china-tensions-in-tiktok-pursuit-11596569063?mod=hp_lead_pos4 [pay wall]
In China, talk of a TikTok sale has gone down badly. The Global Times, a Communist Party tabloid, derided the situation as “the hunting and looting of TikTok by the U.S. government in conjunction with U.S. high-tech companies.” One risk for Microsoft is that the Chinese government retaliates over the company’s role in a TikTok deal, political analysts have suggested, such as by targeting the Chinese versions of its Bing search engine or LinkedIn, the business-focused social-media platform that Microsoft bought in 2016.
From https://www.wsj.com/articles/microsoft-ceo-nadella-wades-into-u-s-china-tensions-in-tiktok-pursuit-11596569063?mod=hp_lead_pos4 [pay wall]
See the filed Trump Campaign Complaint against Nevada mail voting bill, and a copy of the bill
The complaint:
https://thenevadaindependent.com/article/trump-campaign-sues-nevada-over-bill-expanding-mail-in-voting-for-general-election
The bill:
https://www.leg.state.nv.us/App/NELIS/REL/32nd2020Special/Bill/7150/Overview
Excerpts from the Complaint:
“The RNC has a vital interest in protecting the ability of Republican voters to cast, and Republican candidates to receive, effective votes in Nevada elections and elsewhere . . . . “Major or hasty changes confuse voters, undermine confidence in the electoral process, and create incentive to remain away from the polls.”
The bill, AB4 “upends Nevada’s election laws and requires massive changes in election procedures and processes, makes voter fraud and other ineligible voting inevitable.”
The complaint:
https://thenevadaindependent.com/article/trump-campaign-sues-nevada-over-bill-expanding-mail-in-voting-for-general-election
The bill:
https://www.leg.state.nv.us/App/NELIS/REL/32nd2020Special/Bill/7150/Overview
Excerpts from the Complaint:
“The RNC has a vital interest in protecting the ability of Republican voters to cast, and Republican candidates to receive, effective votes in Nevada elections and elsewhere . . . . “Major or hasty changes confuse voters, undermine confidence in the electoral process, and create incentive to remain away from the polls.”
The bill, AB4 “upends Nevada’s election laws and requires massive changes in election procedures and processes, makes voter fraud and other ineligible voting inevitable.”
From Maryland Consumer Rights Coalition
The Trump Administration has taken bold action to….
Extend protections and expand support for debt collectors and payday lenders.
CFPB. First, the Consumer Financial Protection Bureau (CFPB) is proposing disclosures on time barred debt that will confuse consumers and may lead them to pay debts that they do not owe. Time-barred debt (otherwise known as “zombie” debt) is a debt that is so old that it is no longer legally collectible. However, if a person pays something on the debt, even though it is no longer collectible, this can restart the clock and the debt rises from the dead and is a ‘live' debt again. Confused? So are many many consumers.
Rather than bar these kinds of debts across the country, the CFPB is creating greater confusion requiring that debt collectors tell consumers: (1) they must pay a debt, and (2) nothing will happen to them if they do not, and in fact making a payment could harm them by giving the collector renewed permission to sue them.
While Maryland bans filing a debt collection action, if this proposal is implemented, there will likely be attempts to weaken laws in Maryland.
Consumer advocates believe that the CFPB should, instead, ban these kinds of debts completely. The National Consumer Law Center is circulating a sign-on letter for nonprofit organizations. The letter will close on August 3.
True Lender. The Office of the Comptroller of the Currency (OCC) has proposed a new rule to determine who is the ‘true lender’ in the relationship between a bank and a third party. While this may sound innocuous, in fact, this would undermine state rate caps-like the 33% rate cap MCRC and partners fought to maintain two years ago-to keep predatory payday lenders out of Maryland. This proposal creates a massive loophole that would allow payday lenders to ignore state rate caps if the high-cost lender partnered with a bank on the loans. This is similar to the rent-a-bank scheme that Maryland rejected years ago but under this new proposal, it would be much harder to reject this model. MCRC will be sharing a sign-on letter for organizations and a separate one for individuals in the next few weeks. I
The Trump Administration has taken bold action to….
Extend protections and expand support for debt collectors and payday lenders.
CFPB. First, the Consumer Financial Protection Bureau (CFPB) is proposing disclosures on time barred debt that will confuse consumers and may lead them to pay debts that they do not owe. Time-barred debt (otherwise known as “zombie” debt) is a debt that is so old that it is no longer legally collectible. However, if a person pays something on the debt, even though it is no longer collectible, this can restart the clock and the debt rises from the dead and is a ‘live' debt again. Confused? So are many many consumers.
Rather than bar these kinds of debts across the country, the CFPB is creating greater confusion requiring that debt collectors tell consumers: (1) they must pay a debt, and (2) nothing will happen to them if they do not, and in fact making a payment could harm them by giving the collector renewed permission to sue them.
While Maryland bans filing a debt collection action, if this proposal is implemented, there will likely be attempts to weaken laws in Maryland.
Consumer advocates believe that the CFPB should, instead, ban these kinds of debts completely. The National Consumer Law Center is circulating a sign-on letter for nonprofit organizations. The letter will close on August 3.
True Lender. The Office of the Comptroller of the Currency (OCC) has proposed a new rule to determine who is the ‘true lender’ in the relationship between a bank and a third party. While this may sound innocuous, in fact, this would undermine state rate caps-like the 33% rate cap MCRC and partners fought to maintain two years ago-to keep predatory payday lenders out of Maryland. This proposal creates a massive loophole that would allow payday lenders to ignore state rate caps if the high-cost lender partnered with a bank on the loans. This is similar to the rent-a-bank scheme that Maryland rejected years ago but under this new proposal, it would be much harder to reject this model. MCRC will be sharing a sign-on letter for organizations and a separate one for individuals in the next few weeks. I
Trump says TikTok sale can go through but only if the US gets a cut
By Rishi Iyengar, Oliver Effron and Nikki Carvajal, CNN Business
Updated 5:22 PM ET, Mon August 3, 2020
(CNN Business)After days of whiplash over the future of TikTok, President Donald Trump said he would allow an American company to acquire the short-form video app — with a catch.
Trump on Monday set September 15 as the deadline for TikTok to find a US buyer, failing which he said he will shut down the app in the country. In an unusual declaration, Trump also said any deal would have to include a "substantial amount of money" coming to the US Treasury.
"Right now they don't have any rights unless we give it to them. So if we're going to give them the rights, then ... it has to come into this country," Trump said. "It's a great asset, but it's not a great asset in the United States unless they have approval in the United States."
The President's requirement that some of the money from the deal go to the US Treasury doesn't have a basis in antitrust law, according to Gene Kimmelman, a former chief counsel for the US Department of Justice's Antitrust Division and currently a senior adviser to the policy group Public Knowledge.
"This is quite unusual, this is out of the norm," Kimmelman said. "It's actually quite hard to understand what the president is actually talking about here. ... It's not unheard of for transactions to have broader geopolitical implications between countries, but it's quite remarkable to think about some kind of money being on the table in connection with a transaction."
continue reading the article at CNN https://www.msn.com/en-us/news/politics/trump-says-tiktok-sale-can-go-through-but-only-if-the-us-gets-a-cut/ar-BB17woF9?ocid=msedgdhp
By Rishi Iyengar, Oliver Effron and Nikki Carvajal, CNN Business
Updated 5:22 PM ET, Mon August 3, 2020
(CNN Business)After days of whiplash over the future of TikTok, President Donald Trump said he would allow an American company to acquire the short-form video app — with a catch.
Trump on Monday set September 15 as the deadline for TikTok to find a US buyer, failing which he said he will shut down the app in the country. In an unusual declaration, Trump also said any deal would have to include a "substantial amount of money" coming to the US Treasury.
"Right now they don't have any rights unless we give it to them. So if we're going to give them the rights, then ... it has to come into this country," Trump said. "It's a great asset, but it's not a great asset in the United States unless they have approval in the United States."
The President's requirement that some of the money from the deal go to the US Treasury doesn't have a basis in antitrust law, according to Gene Kimmelman, a former chief counsel for the US Department of Justice's Antitrust Division and currently a senior adviser to the policy group Public Knowledge.
"This is quite unusual, this is out of the norm," Kimmelman said. "It's actually quite hard to understand what the president is actually talking about here. ... It's not unheard of for transactions to have broader geopolitical implications between countries, but it's quite remarkable to think about some kind of money being on the table in connection with a transaction."
continue reading the article at CNN https://www.msn.com/en-us/news/politics/trump-says-tiktok-sale-can-go-through-but-only-if-the-us-gets-a-cut/ar-BB17woF9?ocid=msedgdhp
The Political Misuse of Antitrust
By Spencer Waller
https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/
Review and Comment by Don Allen Resnikoff
Some believe that the Trump administration has politically misused antitrust actions. For example, there were rumors of a politically motivated White House direction to challenge the AT&T-Time Warner merger. Some see political hostility as the reason for Administration encouragement of antitrust action against Google and other social media and tech giants. Some have found politics at play with regard to the outcomes of the Sprint-T Mobile merger investigation. And, there has been whistleblower testimony to Congress from USDOJ staffers alleging politically motivated interference in antitrust investigations.
Such allegations raise disturbing questions for the general public. For the non-lawyer, it may suffice to say that antitrust agencies should rise above partisan politics in the pursuit of justice, and that those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
But Spencer Waller and his writing partner Jacob Morse are lawyers and antitrust scholars, so they have written an article focusing on the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Their analysis will be useful to lawyers for future litigants who may feel their clients are targets of political misuse.
Waller starts with the USDOJ’s nonbinding guidance on the impropriety of government prosecutions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
The Antitrust Division has worked on international agreements about due process principles, including some about conflict of interest principles that may relate to political bias.
Turning to case law, Waller reports that the closest the question of political bias or animus has come to being part of an antitrust case law decision was in the ATT-Time Warner litigation. There the defendants sought discovery of potential communications between the White House and the Justice Department about political influence in the decision to challenge the merger. District Court Judge Richard Leon denied the requested discovery, holding that defendants did not make a credible showing that they were singled out by the DOJ]. Waller wonders: “Even it turned out that there were no such communications, how would one ever know whether officials eager to please their bosses brought a plausible antitrust (or other kind of case) because they believed it would make the White House happy? And what should one do (or conclude) if such information became available? “
Turning to analogies from various more remote areas of the law, Waller observes that the law often deals with questions of purpose versus effect, objectively baseless claims versus claims with evidentiary and factual merit but improper purpose, and cases where these issues of mixed motives and biases are intertwined.
Examples include issues of selective prosecution. Waller suggests that the selective prosecution analogy does not offer a fruitful path for antitrust defendants: “ The defendants would have to establish most of the facts necessary for the claim before obtaining disclosure or discovery on this topic from the government in litigation, a burden even well-heeled defendants like AT&T and Time Warner could not meet. Finally, even the most egregious of political favoritism would do nothing to attack a biased decision not to enforce the antitrust laws to benefit an ally.”
Another analogy is offered by Federal Rule of Civil Procedure (FRCP) 11, which requires attorneys to sign pleadings, motions, and most other writings, attesting that they have made an investigation reasonable under the circumstances and certifying that the pleadings and other matters have a reasonable basis in both law and fact and are not being brought for an improper purpose. But the limitations of the Rule are great, Waller explains, such as that the Rule only states that the court “may” impose “appropriate” sanctions for violations of the rule. Moreover, “sanctions are limited to what is sufficient to deter repeated violations by the party or those in similar circumstances. The court also has wide discretion as to the type of sanctions that can be imposed.”
Model Rules of Professional Responsibility, variants of which are followed in many states, say that “In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.” But the rules only allow for the subsequent initiation of disciplinary proceedings with the relevant state bar authorities and those courts where the attorney in question is admitted to practice. Waller says that provides “little comfort to the litigants in the moment of responding to improperly motivated proceedings.”
Turning to administrative law for analogies, Waller observes that the cases generally preclude judicial inquiry into the mental processes of administrative decision makers. The cases do allow an inquiry and extra-record discovery in the exceptional circumstance where there is a strong showing of bad faith or improper behavior.
Employment discrimination law cases deal with allegations of surreptitious discriminatory motives analogous to surreptitious political motives in antitrust cases, generally requiring that the plaintiff must first establish a prima facie case of discrimination. The defendant (employer) must then produce evidence of a legitimate non-discriminatory reason for its actions. If this occurs, then there is no presumption of discrimination. The plaintiff must then be afforded a fair opportunity to present additional facts to show discrimination. Those cases suggest difficult procedural hurdles for the target of surreptitious conduct.
Tort law with regard to malicious prosecution and abuse of process is yet another area of law that offers analogies to misuse of antitrust for political purposes that Waller finds relevant.
I recommend reading the Waller piece to get a fuller sense of his observations and conclusions. An important part of his conclusion tracks what a non-lawyer observer might say about politics and antitrust: antitrust agencies should rise above partisan politics in the pursuit of justice, and those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
Waller observes that the decision of USDOJ to settle an antitrust matter already has some procedural protections from political influence. The Tunney Act,(which dates from 1974, requires a public interest showing before a settlement can be accepted by the court. However, the courts have made Tunney Act requirements a mere formality, limiting the inquiry to matching the nature of the relief to the civil complaint actually filed, rather than the scope of the case that should have been filed or the reasons why the agency acted or refrained from acting. Plainly, protections from improper political action would be enhanced if those limits were removed.
The issue of a decision not filed because of political considerations is one where US law is silent, but EU law provides a partial answer. There is no mechanism in current US law for judicial review of a decision not to proceed with a civil or criminal matter, but plainly there could be. Waller supports a commenter’s thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
In other words, requiring antitrust prosecutors to be articulate about public policy goals and purposes for either prosecuting or not prosecuting cases reduces the opportunity for furtive prosecutorial pursuit of narrow and partisan political goals.
Spencer Waller deserves great credit for moving forward the discussion of political misuse of antitrust. It is, of course, a topic of great interest for the general public as well as antitrust specialists with the ability to parse the array of available legal precedents and guides.
DR
By Spencer Waller
https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/
Review and Comment by Don Allen Resnikoff
Some believe that the Trump administration has politically misused antitrust actions. For example, there were rumors of a politically motivated White House direction to challenge the AT&T-Time Warner merger. Some see political hostility as the reason for Administration encouragement of antitrust action against Google and other social media and tech giants. Some have found politics at play with regard to the outcomes of the Sprint-T Mobile merger investigation. And, there has been whistleblower testimony to Congress from USDOJ staffers alleging politically motivated interference in antitrust investigations.
Such allegations raise disturbing questions for the general public. For the non-lawyer, it may suffice to say that antitrust agencies should rise above partisan politics in the pursuit of justice, and that those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
But Spencer Waller and his writing partner Jacob Morse are lawyers and antitrust scholars, so they have written an article focusing on the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Their analysis will be useful to lawyers for future litigants who may feel their clients are targets of political misuse.
Waller starts with the USDOJ’s nonbinding guidance on the impropriety of government prosecutions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
The Antitrust Division has worked on international agreements about due process principles, including some about conflict of interest principles that may relate to political bias.
Turning to case law, Waller reports that the closest the question of political bias or animus has come to being part of an antitrust case law decision was in the ATT-Time Warner litigation. There the defendants sought discovery of potential communications between the White House and the Justice Department about political influence in the decision to challenge the merger. District Court Judge Richard Leon denied the requested discovery, holding that defendants did not make a credible showing that they were singled out by the DOJ]. Waller wonders: “Even it turned out that there were no such communications, how would one ever know whether officials eager to please their bosses brought a plausible antitrust (or other kind of case) because they believed it would make the White House happy? And what should one do (or conclude) if such information became available? “
Turning to analogies from various more remote areas of the law, Waller observes that the law often deals with questions of purpose versus effect, objectively baseless claims versus claims with evidentiary and factual merit but improper purpose, and cases where these issues of mixed motives and biases are intertwined.
Examples include issues of selective prosecution. Waller suggests that the selective prosecution analogy does not offer a fruitful path for antitrust defendants: “ The defendants would have to establish most of the facts necessary for the claim before obtaining disclosure or discovery on this topic from the government in litigation, a burden even well-heeled defendants like AT&T and Time Warner could not meet. Finally, even the most egregious of political favoritism would do nothing to attack a biased decision not to enforce the antitrust laws to benefit an ally.”
Another analogy is offered by Federal Rule of Civil Procedure (FRCP) 11, which requires attorneys to sign pleadings, motions, and most other writings, attesting that they have made an investigation reasonable under the circumstances and certifying that the pleadings and other matters have a reasonable basis in both law and fact and are not being brought for an improper purpose. But the limitations of the Rule are great, Waller explains, such as that the Rule only states that the court “may” impose “appropriate” sanctions for violations of the rule. Moreover, “sanctions are limited to what is sufficient to deter repeated violations by the party or those in similar circumstances. The court also has wide discretion as to the type of sanctions that can be imposed.”
Model Rules of Professional Responsibility, variants of which are followed in many states, say that “In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.” But the rules only allow for the subsequent initiation of disciplinary proceedings with the relevant state bar authorities and those courts where the attorney in question is admitted to practice. Waller says that provides “little comfort to the litigants in the moment of responding to improperly motivated proceedings.”
Turning to administrative law for analogies, Waller observes that the cases generally preclude judicial inquiry into the mental processes of administrative decision makers. The cases do allow an inquiry and extra-record discovery in the exceptional circumstance where there is a strong showing of bad faith or improper behavior.
Employment discrimination law cases deal with allegations of surreptitious discriminatory motives analogous to surreptitious political motives in antitrust cases, generally requiring that the plaintiff must first establish a prima facie case of discrimination. The defendant (employer) must then produce evidence of a legitimate non-discriminatory reason for its actions. If this occurs, then there is no presumption of discrimination. The plaintiff must then be afforded a fair opportunity to present additional facts to show discrimination. Those cases suggest difficult procedural hurdles for the target of surreptitious conduct.
Tort law with regard to malicious prosecution and abuse of process is yet another area of law that offers analogies to misuse of antitrust for political purposes that Waller finds relevant.
I recommend reading the Waller piece to get a fuller sense of his observations and conclusions. An important part of his conclusion tracks what a non-lawyer observer might say about politics and antitrust: antitrust agencies should rise above partisan politics in the pursuit of justice, and those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
Waller observes that the decision of USDOJ to settle an antitrust matter already has some procedural protections from political influence. The Tunney Act,(which dates from 1974, requires a public interest showing before a settlement can be accepted by the court. However, the courts have made Tunney Act requirements a mere formality, limiting the inquiry to matching the nature of the relief to the civil complaint actually filed, rather than the scope of the case that should have been filed or the reasons why the agency acted or refrained from acting. Plainly, protections from improper political action would be enhanced if those limits were removed.
The issue of a decision not filed because of political considerations is one where US law is silent, but EU law provides a partial answer. There is no mechanism in current US law for judicial review of a decision not to proceed with a civil or criminal matter, but plainly there could be. Waller supports a commenter’s thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
In other words, requiring antitrust prosecutors to be articulate about public policy goals and purposes for either prosecuting or not prosecuting cases reduces the opportunity for furtive prosecutorial pursuit of narrow and partisan political goals.
Spencer Waller deserves great credit for moving forward the discussion of political misuse of antitrust. It is, of course, a topic of great interest for the general public as well as antitrust specialists with the ability to parse the array of available legal precedents and guides.
DR
Why does Medicare pay $100 per COVID test to Quest for too-slow 7 day test turnaround?
Excerpt from https://www.usatoday.com/story/news/health/2020/07/18/covid-testing-delays-worsen-labs-struggle-keep-pace-demand/5415468002/
In mid-April, when labs completed about 150,000 COVID-19 tests a day, the federal government dangled a major incentive to increase testing output. Medicare would pay labs $100 for each “high-throughput” test, nearly double the $51 per test paid in the early days of the pandemic, as a way to get labs with machines that process lots of tests to increase capacity and deliver faster results to combat the spread of the virus.
The labs reached an all-time high of more than 831,900 COVID tests Thursday, according to the COVID Tracking Project, but the prolific expansion has led to a bottleneck, slowing results for families such as the Julians.
Quest Diagnostics said this week the average turnaround time for nonpriority patients was seven days or more. Patients in hospitals, those preparing for acute surgery and health care workers with symptoms get results within a day.
Posting by Don Allen Resnikoff
Excerpt from https://www.usatoday.com/story/news/health/2020/07/18/covid-testing-delays-worsen-labs-struggle-keep-pace-demand/5415468002/
In mid-April, when labs completed about 150,000 COVID-19 tests a day, the federal government dangled a major incentive to increase testing output. Medicare would pay labs $100 for each “high-throughput” test, nearly double the $51 per test paid in the early days of the pandemic, as a way to get labs with machines that process lots of tests to increase capacity and deliver faster results to combat the spread of the virus.
The labs reached an all-time high of more than 831,900 COVID tests Thursday, according to the COVID Tracking Project, but the prolific expansion has led to a bottleneck, slowing results for families such as the Julians.
Quest Diagnostics said this week the average turnaround time for nonpriority patients was seven days or more. Patients in hospitals, those preparing for acute surgery and health care workers with symptoms get results within a day.
Posting by Don Allen Resnikoff
'I'm fighting a war against COVID-19 and a war against stupidity,' says CMO of Houston hospital
Molly Gamble (Twitter) -
After two hours of sleep a night for four months and seeing a member of his team contract the virus, Joseph Varon, MD, is growing exasperated.
"I'm pretty much fighting two wars: A war against COVID and a war against stupidity," Dr. Varon, MD, CMO and chief of critical care at United Memorial Medical Center in Houston, told NBC News. "And the problem is the first one, I have some hope about winning. But the second one is becoming more and more difficult."
Dr. Varon noted that whether it's information backed by science or common sense, people throughout the U.S. are not listening. "The thing that annoys me the most is that we keep on doing our best to save all these people, and then you get another batch of people that are doing exactly the opposite of what you're telling them to do."
From:
https://www.beckershospitalreview.com/hospital-physician-relationships/i-m-fighting-a-war-against-covid-19-and-a-war-against-stupidity-says-cmo-of-houston-hospital.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_source=BHRE&utm_medium=email&oly_enc_id=8431J4722801B7S'I'm fighting a war against COVID-19 and a war against stupidity,' says CMO of Houston hospital Molly Gamble (Twitter) - 2 hours ago Print | Email
Antitrust and Platform Monopoly -
By Herbert Hovenkamp (University of Pennsylvania)
This article first considers an often-discussed question about large internet platforms that deal directly with consumers: Are they “winner take all,” or natural monopoly, firms? That question is complex and does not produce the same answer for every platform. The closer one looks at digital platforms they less they seem to be winner-take-all. As a result, we can assume that competition can be made to work in most of them.
Second, assuming that an antitrust violation is found, what should be the appropriate remedy? Breaking up large firms subject to extensive scale economies or positive network effects is generally thought to be unwise. The resulting entities will be unable to behave competitively. Inevitably, they will either merge or collude, or else one will drive the others out of business. Even if a platform is not a natural monopoly but does experience significant economies of scale in production or consumption, a breakup can be socially costly. In the past, structural relief of this type has led to higher prices or business firm failure. If breakup is not the answer, then what are the best antitrust remedies? One possibility is to break up ownership and management rather than assets. The history of antitrust law is replete with firms that are organized as single entities under corporate law, but that function as competitors and treated that way by antitrust law. This permits productive assets to remain intact, but forces decision makers to behave competitively.
Finally, this paper takes a look at the problem of platform acquisition of nascent firms, where the biggest threat is not from horizontal mergers but rather from acquisitions of complements or differentiated technologies. For these, the tools we currently use in merger law are poorly suited. Here I offer some suggestions.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3639142
By Herbert Hovenkamp (University of Pennsylvania)
This article first considers an often-discussed question about large internet platforms that deal directly with consumers: Are they “winner take all,” or natural monopoly, firms? That question is complex and does not produce the same answer for every platform. The closer one looks at digital platforms they less they seem to be winner-take-all. As a result, we can assume that competition can be made to work in most of them.
Second, assuming that an antitrust violation is found, what should be the appropriate remedy? Breaking up large firms subject to extensive scale economies or positive network effects is generally thought to be unwise. The resulting entities will be unable to behave competitively. Inevitably, they will either merge or collude, or else one will drive the others out of business. Even if a platform is not a natural monopoly but does experience significant economies of scale in production or consumption, a breakup can be socially costly. In the past, structural relief of this type has led to higher prices or business firm failure. If breakup is not the answer, then what are the best antitrust remedies? One possibility is to break up ownership and management rather than assets. The history of antitrust law is replete with firms that are organized as single entities under corporate law, but that function as competitors and treated that way by antitrust law. This permits productive assets to remain intact, but forces decision makers to behave competitively.
Finally, this paper takes a look at the problem of platform acquisition of nascent firms, where the biggest threat is not from horizontal mergers but rather from acquisitions of complements or differentiated technologies. For these, the tools we currently use in merger law are poorly suited. Here I offer some suggestions.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3639142
Warren letter to Fed's Quarles objecting to reduced bank capital requirements
https://www.warren.senate.gov/imo/media/doc/2020.07.30%20Letter%20to%20Quarles.pdf
Excerpt:
Dear Vice Chair Quarles,
Your requests for Congress to weaken the rules put in place after the 2008 financial crisis to protect our financial system are outrageous and irresponsible, and we are writing to seek an explanation for why – during a historic economic crisis – you are seeking to hand out regulatory favors to big banks that would harm the economy and increase systemic risks. Your efforts to weaken key safeguards of our nation's financial system at a time when millions of families' livelihoods are at risk is an abdication of your agency's mission of "foster[ing] the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems." 1 Congress is right now in the process of crafting legislation that will determine, among other things, whether millions of Americans are able to keep their homes, whether critical financial support for people out of work will continue, and whether families across the nation will be able to pay their bills on time and keep food on the table.
With the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress appropriated half a trillion dollars for the Federal Reserve System to stabilize our economy by providing support to struggling businesses and state and local governments; you have proven unable or unwilling to fully utilize these tools. Instead of using your authority to assist our most vulnerable communities, you have apparently chosen to press for changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) – signed into law by President Obama ten years ago this month – that Wall Street's army of lawyers and bank lobbyists have long sought and that would put our financial system in jeopardy. According to recent reports, the stimulus bill now being drafted is "expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, . . .
https://www.warren.senate.gov/imo/media/doc/2020.07.30%20Letter%20to%20Quarles.pdf
Excerpt:
Dear Vice Chair Quarles,
Your requests for Congress to weaken the rules put in place after the 2008 financial crisis to protect our financial system are outrageous and irresponsible, and we are writing to seek an explanation for why – during a historic economic crisis – you are seeking to hand out regulatory favors to big banks that would harm the economy and increase systemic risks. Your efforts to weaken key safeguards of our nation's financial system at a time when millions of families' livelihoods are at risk is an abdication of your agency's mission of "foster[ing] the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems." 1 Congress is right now in the process of crafting legislation that will determine, among other things, whether millions of Americans are able to keep their homes, whether critical financial support for people out of work will continue, and whether families across the nation will be able to pay their bills on time and keep food on the table.
With the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress appropriated half a trillion dollars for the Federal Reserve System to stabilize our economy by providing support to struggling businesses and state and local governments; you have proven unable or unwilling to fully utilize these tools. Instead of using your authority to assist our most vulnerable communities, you have apparently chosen to press for changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) – signed into law by President Obama ten years ago this month – that Wall Street's army of lawyers and bank lobbyists have long sought and that would put our financial system in jeopardy. According to recent reports, the stimulus bill now being drafted is "expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, . . .
DMN: Congress Asks Jeff Bezos — ‘Shouldn’t Twitch License Music?’
Congress asked Jeff Bezos during historic antitrust hearings why Twitch doesn’t pay music royalties. Bezos replied, “I don’t know.”
The story continues here. https://www.digitalmusicnews.com/2020/07/30/jeff-bezos-congress-twitch-music-licensing/
Congress asked Jeff Bezos during historic antitrust hearings why Twitch doesn’t pay music royalties. Bezos replied, “I don’t know.”
The story continues here. https://www.digitalmusicnews.com/2020/07/30/jeff-bezos-congress-twitch-music-licensing/
Qualcomm Signs Patent Licensing Deal With Huawei
-
July 30, 2020Qualcomm Incorporated reached a deal with Chinese telecom business Huawei to settle a patent dispute, the company announced Thursday, July 30.
The global licensing agreement grants Huawei back rights to some of the San Diego-based tech company’s patents effective January 1, 2020, according to Qualcomm.
Qualcomm expects about US$1.8 billion from Huawei as part of the back-dated agreement.
“As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins,” Qualcomm CEO Steve Mollenkopf said in a statement.
The agreement was unexpected given the backdrop of an increasingly acrimonious political battle between Washington and Beijing over technologies broadly and Huawei in particular. The Trump administration has accused China of stealing trade secrets and using technology, including Huawei’s, as a vehicle to potentially conduct espionage. China and Huawei have denied those charges.
As part of that tussle, the administration and China have imposed tariffs on each other, including on electronics. In 2018, President Trump blocked the US$117 billion takeover bid of Qualcomm by rival chip maker Broadcom, which was previously based in Singapore. The administration saw the deal as a threat to US leadership over China in technological arenas such as the emerging field of superfast 5G communications.
Full Content: Wall Street Journal
-
July 30, 2020Qualcomm Incorporated reached a deal with Chinese telecom business Huawei to settle a patent dispute, the company announced Thursday, July 30.
The global licensing agreement grants Huawei back rights to some of the San Diego-based tech company’s patents effective January 1, 2020, according to Qualcomm.
Qualcomm expects about US$1.8 billion from Huawei as part of the back-dated agreement.
“As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins,” Qualcomm CEO Steve Mollenkopf said in a statement.
The agreement was unexpected given the backdrop of an increasingly acrimonious political battle between Washington and Beijing over technologies broadly and Huawei in particular. The Trump administration has accused China of stealing trade secrets and using technology, including Huawei’s, as a vehicle to potentially conduct espionage. China and Huawei have denied those charges.
As part of that tussle, the administration and China have imposed tariffs on each other, including on electronics. In 2018, President Trump blocked the US$117 billion takeover bid of Qualcomm by rival chip maker Broadcom, which was previously based in Singapore. The administration saw the deal as a threat to US leadership over China in technological arenas such as the emerging field of superfast 5G communications.
Full Content: Wall Street Journal
Big banks may get a big gift in the stimulus bill being drafted by Senate Republicans -- lower capital requirements.
Lawmakers are expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, according to three people familiar with the effort.
The push is the culmination of a monthslong effort by industry lobbyists and a top Federal Reserve official to change a restriction put in place in the wake of the 2008 financial crisis to prevent banks from engaging in risky behavior.
From https://www.nytimes.com/2020/07/27/business/bank-regulations-rollback-stimulus-bill.html
Comment: On the need for capital requirements to discourage risky bank behavior (among many other sourcess) : “Ending Too Big to Fail," produced by the Federal Reserve Bank of Minneapolis (2016). The report proposes a substantial increase in the capital requirements
of the U.S. banking system, and it argues that this increase would improve the resiliency of financial institutions in the face of a severe financial shock, such as the 2008 crisis. Improving the resiliency of these institutions in turn makes the need for another public bailout of the financial system less likely.
Lawmakers are expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, according to three people familiar with the effort.
The push is the culmination of a monthslong effort by industry lobbyists and a top Federal Reserve official to change a restriction put in place in the wake of the 2008 financial crisis to prevent banks from engaging in risky behavior.
From https://www.nytimes.com/2020/07/27/business/bank-regulations-rollback-stimulus-bill.html
Comment: On the need for capital requirements to discourage risky bank behavior (among many other sourcess) : “Ending Too Big to Fail," produced by the Federal Reserve Bank of Minneapolis (2016). The report proposes a substantial increase in the capital requirements
of the U.S. banking system, and it argues that this increase would improve the resiliency of financial institutions in the face of a severe financial shock, such as the 2008 crisis. Improving the resiliency of these institutions in turn makes the need for another public bailout of the financial system less likely.
Moderna is talking to governments about pricing its COVID-19 vaccine between $50 and $60 per course in the U.S. and other high-income countries, the Financial Times reported, citing anonymous sources.
If the report proves true, that would put the cost of Moderna’s vaccine, mRNA-1273, at $25 to $30 per shot, well above the price of the vaccine being developed by Pfizer and BioNTech. They struck a deal with the U.S. government for a dose price of $19.50 last week.
A spokesperson for Moderna declined to comment on the company’s pricing plans, citing in an email to Fierce Pharma the confidentiality of “discussions with a number of governments and governmental entities about potential supply of mRNA-1273.”
Source: https://www.fiercepharma.com/pharma/moderna-s-rumored-50-plus-price-covid-19-vaccine-draws-ire-as-company-touts-new-animal-data?
If the report proves true, that would put the cost of Moderna’s vaccine, mRNA-1273, at $25 to $30 per shot, well above the price of the vaccine being developed by Pfizer and BioNTech. They struck a deal with the U.S. government for a dose price of $19.50 last week.
A spokesperson for Moderna declined to comment on the company’s pricing plans, citing in an email to Fierce Pharma the confidentiality of “discussions with a number of governments and governmental entities about potential supply of mRNA-1273.”
Source: https://www.fiercepharma.com/pharma/moderna-s-rumored-50-plus-price-covid-19-vaccine-draws-ire-as-company-touts-new-animal-data?
Generic Drugmakers Lose Bid To Block New California Antitrust Law
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July 26, 2020 A California law that punishes drugmakers who pay to keep generic competitors off the market will stand after the Ninth Circuit ruled the generic companies challenging the law failed to show it would harm them.
The Association for Accessible Medicines, a lobbying group for the generic drug industry, sought to overturn a lower court decision denying an injunction to block the law. But the US Court of Appeals for the Ninth Circuit ruled Friday, July 24, that the district court must dismiss the case without prejudice, July 24, reported Bloomberg.
The California law AB 824, combats illegal, secretive deals between pharmaceutical companies in which one drug company pays its competitor to delay the competitor’s research, production, or sale of a competing version of its drug. These collusive agreements, known as “pay-for-delay” agreements, stifle competition and hike the price patients and employers pay for prescription medicines. AB 824 is the first state law in the nation to tackle pay-for-delay agreements.
Full Content: Bloomberg
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July 26, 2020 A California law that punishes drugmakers who pay to keep generic competitors off the market will stand after the Ninth Circuit ruled the generic companies challenging the law failed to show it would harm them.
The Association for Accessible Medicines, a lobbying group for the generic drug industry, sought to overturn a lower court decision denying an injunction to block the law. But the US Court of Appeals for the Ninth Circuit ruled Friday, July 24, that the district court must dismiss the case without prejudice, July 24, reported Bloomberg.
The California law AB 824, combats illegal, secretive deals between pharmaceutical companies in which one drug company pays its competitor to delay the competitor’s research, production, or sale of a competing version of its drug. These collusive agreements, known as “pay-for-delay” agreements, stifle competition and hike the price patients and employers pay for prescription medicines. AB 824 is the first state law in the nation to tackle pay-for-delay agreements.
Full Content: Bloomberg
NYT op-ed: Fix the Remdesivir Supply problem:
By Amy Kapczynski, Paul Biddinger and Rochelle Walensky
Ms. Kapczynski is a professor at Yale Law School. Dr. Biddinger and Dr. Walensky practice at Massachusetts General Hospital.
Excerpt:
The Department of Health and Human Services can build a transparent system that ensures remdesivir quickly gets to where it does the greatest good — and can be redistributed, making sure that hospitals that share now won’t be harmed down the line for doing so. Having more available doses would also help with logistics, because hospitals’ needs are not fully predictable.
Beyond the distribution problem, we are facing a supply problems as well. Gilead Sciences, which holds the key patents on remdesivir, announced last month that it had only about 500,000 treatment courses through September — for the entire world. The company has sold almost all of it to the United States, and other countries are already experiencing serious shortages.
Gilead attributes its supply problems to the complexities of manufacturing the drug. But small-molecule drugs like remdesivir are usually pretty simple to reverse-engineer. In fact, companies in India, Bangladesh and China are already making it.
Some of those companies are licensed by Gilead, and history suggests that those deals include provisions meant to lock up all available supply. But some companies are producing remdesivir independently, and if the United States were willing to put out a competitive tender, there could be a greater supply.
Indeed, isn’t that what we usually would expect any government or any business to do if its main supplier falls short? The barrier is Gilead’s patents, which allow it to prevent others from selling the drug.
Fortunately, there is a remedy for this. Health and Human Services can offer to buy the drug from any company that can supply it (or give hospitals the right to do the same) and then pay Gilead a royalty in return. The solution, called “government patent use,” was legally codified in the two world wars to prevent price gouging and shortages, and has been used for medicines before.
Government patent use is especially appropriate now, given the risk of shortages and the government’s substantial contributions to its development (so substantial in fact that it may be entitled to co-ownership credit, though it has not asserted these rights).
Remdesivir is also, arguably, overpriced. Gilead sells it for $2,340 to $3,120 per five-day treatment, even though an independent group estimated that a fair price could be substantially lower, and generic versions are selling for about $320 per treatment.
Fixing the remdesivir supply lines would do right by hundreds of thousands of patients and help us flex the kind of muscle we will need for the next Covid-19 treatment or the next vaccine. If we can create a thousand-bed Covid hospital in a matter of days, if we can ramp up telemedicine programs overnight, if we can swiftly transform the way we live, learn and work, then surely we can tackle a remdesivir shortage too.
https://www.nytimes.com/2020/07/28/opinion/remdesivir-shortage-coronavirus.html?action=click&module=Opinion&pgtype=Homepage#after-story-ad-2
Read the testimony being submitted to Congress on behalf of:
Amazon https://www.washingtonpost.com/context/jeff-bezos-statement-to-the-u-s-house-committee-on-the-judiciary/ec8c99a0-e2cc-4a35-bff5-e796e2a6fd0d/?itid=lb_big-tech-battles-congress_9
Facebook https://www.washingtonpost.com/context/mark-zuckerberg-s-statement-to-a-house-judiciary-panel/9edb5481-5825-477d-bba0-f510055b0c4e/?itid=lb_big-tech-battles-congress_10
Google https://www.washingtonpost.com/context/sundar-pichai-s-statement-to-a-house-judiciary-panel/f45ffdda-49c0-4ffe-9bfc-9095f7eddea2/?itid=lb_big-tech-battles-congress_11
Apple https://www.washingtonpost.com/context/tim-cook-s-statement-to-a-house-judiciary-panel/89c15175-1055-4d72-aa10-86619b2525c9/?itid=lb_big-tech-battles-congress_12
Amazon https://www.washingtonpost.com/context/jeff-bezos-statement-to-the-u-s-house-committee-on-the-judiciary/ec8c99a0-e2cc-4a35-bff5-e796e2a6fd0d/?itid=lb_big-tech-battles-congress_9
Facebook https://www.washingtonpost.com/context/mark-zuckerberg-s-statement-to-a-house-judiciary-panel/9edb5481-5825-477d-bba0-f510055b0c4e/?itid=lb_big-tech-battles-congress_10
Google https://www.washingtonpost.com/context/sundar-pichai-s-statement-to-a-house-judiciary-panel/f45ffdda-49c0-4ffe-9bfc-9095f7eddea2/?itid=lb_big-tech-battles-congress_11
Apple https://www.washingtonpost.com/context/tim-cook-s-statement-to-a-house-judiciary-panel/89c15175-1055-4d72-aa10-86619b2525c9/?itid=lb_big-tech-battles-congress_12
9th Circuit: State Unfair Competition claims against pet food company may go forward; class action claims not
https://cdn.ca9.uscourts.gov/datastore/memoranda/2020/07/28/18-15026.pdf
https://cdn.ca9.uscourts.gov/datastore/memoranda/2020/07/28/18-15026.pdf
From DMN
Major Labels Face Legal Action for Issuing ‘False, Deceptive, and Misleading’ Copyright Claims
Charter Communications-owned internet service provider (ISP) Bright House has fired back against leading record labels’ far-reaching copyright infringement lawsuit, alleging in a counterclaim that the plaintiffs issued “false, deceptive, and misleading” DMCA takedown notices.
The story continues here. https://www.digitalmusicnews.com/2020/07/28/major-labels-legal-action/
Neil Young Threatens Legal Action Against Donald Trump — Again
Neil Young has asked Trump to stop using his music at his rallies and campaign events. Now the singer may be looking to take legal action.
The story continues here.https://www.digitalmusicnews.com/2020/07/28/neil-young-threatens-to-sue-trump/
Major Labels Face Legal Action for Issuing ‘False, Deceptive, and Misleading’ Copyright Claims
Charter Communications-owned internet service provider (ISP) Bright House has fired back against leading record labels’ far-reaching copyright infringement lawsuit, alleging in a counterclaim that the plaintiffs issued “false, deceptive, and misleading” DMCA takedown notices.
The story continues here. https://www.digitalmusicnews.com/2020/07/28/major-labels-legal-action/
Neil Young Threatens Legal Action Against Donald Trump — Again
Neil Young has asked Trump to stop using his music at his rallies and campaign events. Now the singer may be looking to take legal action.
The story continues here.https://www.digitalmusicnews.com/2020/07/28/neil-young-threatens-to-sue-trump/
Antitrust lobbying: The Global Antitrust Institute
A New York Times article about The Global Antitrust Institute explains that the Institute is bankrolled in large part by tech companies — corporate donors like Google, Amazon and Qualcomm — that are facing antitrust scrutiny from some of the regulators who attended its programs.
The Times reports that the Institute’s leaders, including Joshua Wright, who has longstanding ties to Google, have worked closely with tech companies to fend off antitrust criticism. The institute has reportedly cultivated relationships with top competition officials and sitting judges.
“This [financial support for the Global Antitrust Institute] is not a significant expenditure for these companies. And the potential benefits, even making it moderately less likely to be on the losing end of an ambitious antitrust case, is worth that price many times over,” said Michael Carrier, a professor at Rutgers University’s law school.
There are entities that provide a counter to the Global Antitrust Institute, particularly the American Antitrust Institute. The AAI website says “The American Antitrust Institute (AAI) is an independent, nonprofit organization devoted to promoting competition that protects consumers, businesses, and society. We serve the public through research, education, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy.
Posted by Don Allen Resnikoff
Source: https://www.nytimes.com/2020/07/24/technology/global-antitrust-institute-google-amazon-qualcomm.html
A New York Times article about The Global Antitrust Institute explains that the Institute is bankrolled in large part by tech companies — corporate donors like Google, Amazon and Qualcomm — that are facing antitrust scrutiny from some of the regulators who attended its programs.
The Times reports that the Institute’s leaders, including Joshua Wright, who has longstanding ties to Google, have worked closely with tech companies to fend off antitrust criticism. The institute has reportedly cultivated relationships with top competition officials and sitting judges.
“This [financial support for the Global Antitrust Institute] is not a significant expenditure for these companies. And the potential benefits, even making it moderately less likely to be on the losing end of an ambitious antitrust case, is worth that price many times over,” said Michael Carrier, a professor at Rutgers University’s law school.
There are entities that provide a counter to the Global Antitrust Institute, particularly the American Antitrust Institute. The AAI website says “The American Antitrust Institute (AAI) is an independent, nonprofit organization devoted to promoting competition that protects consumers, businesses, and society. We serve the public through research, education, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy.
Posted by Don Allen Resnikoff
Source: https://www.nytimes.com/2020/07/24/technology/global-antitrust-institute-google-amazon-qualcomm.html
SDOJ Press release: USDOJ OKs proposed efforts by Eli Lilly and Company, AbCellera Biologics, Amgen, AstraZeneca, Genentech, and GlaxoSmithKline to share information about manufacturing facilities and other information that could enable them to expedite the production of monoclonal antibody treatments
JUSTICE NEWS
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, July 23, 2020
Department Of Justice Issues Business Review Letter To Monoclonal Antibody Manufacturers To Expedite And Increase The Production Of Covid-19 Mab Treatments
The United States Department of Justice announced today that it will not challenge proposed efforts by Eli Lilly and Company, AbCellera Biologics, Amgen, AstraZeneca, Genentech, and GlaxoSmithKline (together, the Requesting Parties) to share information about manufacturing facilities and other information that could enable them to expedite the production of monoclonal antibody treatments that are determined to be safe and effective to treat COVID-19.
As the letter explains, the demand for monoclonal antibodies targeting COVID-19 is likely to exceed what any one firm could produce on its own. Moreover, waiting until regulators approve specific treatments before scaling up manufacturing might delay access to these potentially life-saving medicines by many months, which adversely could affect the nation’s efforts to fight COVID-19. The Requesting Parties aim to address both problems by sharing information about their manufacturing facilities, capacity, raw materials and supplies that could be used to produce successful COVID-19 monoclonal antibody treatments subject to important safeguards and limits, so that facilities can be ready to manufacture treatments once they prove safe and effective. Among other competitive safeguards, they have committed that they will not exchange information related to the prices of those treatments or the costs of inputs for or production of those treatments. Their efforts likely will expedite and expand the overall production of monoclonal antibody treatments targeting COVID-19 in a way that is unlikely to lessen competition.
“This critical collaboration will help Americans get access to potentially life-saving therapeutics sooner than otherwise would be possible,” Assistant Attorney General Makan Delrahim said. “It also will help preserve Americans’ ability to benefit from the free market competition that drives innovation and access to drugs in the biotech and pharmaceutical industry.”
The Requesting Parties submitted their business review request pursuant to the expedited, temporary review procedure detailed in the Joint Antitrust Statement Regarding COVID-19 (the “Joint Statement”) issued on March 24 by both the Department and the Federal Trade Commission. According to the Joint Statement, the Department will aim to resolve COVID-19-related business review requests like this one within seven (7) calendar days of receiving all necessary information.
Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure. Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at [email protected].
JUSTICE NEWS
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, July 23, 2020
Department Of Justice Issues Business Review Letter To Monoclonal Antibody Manufacturers To Expedite And Increase The Production Of Covid-19 Mab Treatments
The United States Department of Justice announced today that it will not challenge proposed efforts by Eli Lilly and Company, AbCellera Biologics, Amgen, AstraZeneca, Genentech, and GlaxoSmithKline (together, the Requesting Parties) to share information about manufacturing facilities and other information that could enable them to expedite the production of monoclonal antibody treatments that are determined to be safe and effective to treat COVID-19.
As the letter explains, the demand for monoclonal antibodies targeting COVID-19 is likely to exceed what any one firm could produce on its own. Moreover, waiting until regulators approve specific treatments before scaling up manufacturing might delay access to these potentially life-saving medicines by many months, which adversely could affect the nation’s efforts to fight COVID-19. The Requesting Parties aim to address both problems by sharing information about their manufacturing facilities, capacity, raw materials and supplies that could be used to produce successful COVID-19 monoclonal antibody treatments subject to important safeguards and limits, so that facilities can be ready to manufacture treatments once they prove safe and effective. Among other competitive safeguards, they have committed that they will not exchange information related to the prices of those treatments or the costs of inputs for or production of those treatments. Their efforts likely will expedite and expand the overall production of monoclonal antibody treatments targeting COVID-19 in a way that is unlikely to lessen competition.
“This critical collaboration will help Americans get access to potentially life-saving therapeutics sooner than otherwise would be possible,” Assistant Attorney General Makan Delrahim said. “It also will help preserve Americans’ ability to benefit from the free market competition that drives innovation and access to drugs in the biotech and pharmaceutical industry.”
The Requesting Parties submitted their business review request pursuant to the expedited, temporary review procedure detailed in the Joint Antitrust Statement Regarding COVID-19 (the “Joint Statement”) issued on March 24 by both the Department and the Federal Trade Commission. According to the Joint Statement, the Department will aim to resolve COVID-19-related business review requests like this one within seven (7) calendar days of receiving all necessary information.
Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure. Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at [email protected].
The problem of litigants without lawyers
The DC Access to Justice Commission’s 2019 Report contains some remarkable information on the number of litigants in the D.C. Courts without lawyer representation.
The Report says that in 2017, the D.C. Court of Appeals saw unrepresented pro se participation at the time of case filing ranging from 50% to 90% depending on case type.
In D.C. Superior Court, pro se participation rates of cases disposed of in 2017 included: 97% of plaintiffs in small estate matters in the Probate Division, 88% of petitioners and 95% of respondents in the Domestic Violence Division, 83% of plaintiffs and 93% of respondents in divorce/ custody/miscellaneous cases in Family Court, 97% of respondents in paternity and child support cases in Family Court, 88% of designated respondents in the Landlord and Tenant Branch of the Civil Division ( in contrast to the 95% of plaintiffs who were represented), 75% of plaintiffs in Housing Conditions cases in the Civil Division.
The D.C. Office of Administrative Proceedings saw a comparably high percentage of cases where no party is represented in student discipline appeals (88%), appeals related to public benefits determinations (86%), and disputes concerning unemployment compensation benefits (91%)
The numbers are unlikely to have changed in recent years.
The Commission Report lauds the considerable efforts to help litigants made by D.C. government, the Courts, not-for-profit entities, law schools, the organized bar, and law firms and lawyers. But the problem of unrepresented litigants is a big one.
The Commission Report data suggests a need for additional support for helping organizations.
The Commission report is at https://www.dcaccesstojustice.org/assets/pdf/Delivering_Justice_2019.pdf
The DC Access to Justice Commission’s 2019 Report contains some remarkable information on the number of litigants in the D.C. Courts without lawyer representation.
The Report says that in 2017, the D.C. Court of Appeals saw unrepresented pro se participation at the time of case filing ranging from 50% to 90% depending on case type.
In D.C. Superior Court, pro se participation rates of cases disposed of in 2017 included: 97% of plaintiffs in small estate matters in the Probate Division, 88% of petitioners and 95% of respondents in the Domestic Violence Division, 83% of plaintiffs and 93% of respondents in divorce/ custody/miscellaneous cases in Family Court, 97% of respondents in paternity and child support cases in Family Court, 88% of designated respondents in the Landlord and Tenant Branch of the Civil Division ( in contrast to the 95% of plaintiffs who were represented), 75% of plaintiffs in Housing Conditions cases in the Civil Division.
The D.C. Office of Administrative Proceedings saw a comparably high percentage of cases where no party is represented in student discipline appeals (88%), appeals related to public benefits determinations (86%), and disputes concerning unemployment compensation benefits (91%)
The numbers are unlikely to have changed in recent years.
The Commission Report lauds the considerable efforts to help litigants made by D.C. government, the Courts, not-for-profit entities, law schools, the organized bar, and law firms and lawyers. But the problem of unrepresented litigants is a big one.
The Commission Report data suggests a need for additional support for helping organizations.
The Commission report is at https://www.dcaccesstojustice.org/assets/pdf/Delivering_Justice_2019.pdf
Whistleblower Law Collaborative: States Join Lawsuit Against Mallinckrodt
26 states plus Puerto Rico have intervened in The Whistleblower Law Collaborative’s False Claims Act suit against Mallinckrodt, in which the federal government intervened in March. The complaint alleges that Mallinckrodt violated federal and state False Claims Acts by failing to pay hundreds of millions of dollars in Medicaid rebates for its high-priced drug Acthar.
https://www.whistleblowerllc.com/states-join-clients-lawsuit-against-mallinckrodt/?
So, how are you and your kids coping with school shutdowns?
Probably not as well as the Maryland Mom who gave her teenage sons the homework assignment of developing recipes for mambo sauce. The result was a commercial product that has had a substantial measure of financial success.
Posted by Don Allen Resnikoff
Source: https://www.nbcwashington.com/?s=mambo+sauce
Probably not as well as the Maryland Mom who gave her teenage sons the homework assignment of developing recipes for mambo sauce. The result was a commercial product that has had a substantial measure of financial success.
Posted by Don Allen Resnikoff
Source: https://www.nbcwashington.com/?s=mambo+sauce
Knowledge Ecology International finds the US Government has bargained away public rights concerning COVID therapeutics funded by the US
KEI received a series of heavily redacted US Government contracts with pharmaceutical companies relevant to COVID therapeutics in response to a Freedom of Information Act request.
Brief excerpts from a much longer report follow:
While heavily redacted, the contracts shed considerable light on the extent to which the federal government has limited or eliminated altogether its rights in intellectual and data arising from the COVID-19 research and development that it is funding.
Five of the contracts we received are designated as “Other Transaction Agreements” (OTAs). . . .[F]ederal agencies, including the DOD, BARDA and the NIH, are using Other Transactions Authority to limit or eliminate the government’s rights in inventions and data that were funded by taxpayers.
Under the OTAs, several provisions of the Bayh-Dole Act and the Federal Acquisition Regulation on rights in data are being disregarded. The contracts generally involve a renegotiation of such basic public interest provisions as the federal royalty-free right, the grounds for march-ins, the ownership of patent rights, and the definition of “practical application,” typically in order to eliminate the Bayh-Dole obligation to make products available “to the public on reasonable terms” — language that authorizes the federal government to intervene if pharmaceutical companies charge unreasonable prices for federally-funded drugs, biologics, vaccines, and other medical products.
See
https://www.keionline.org/covid19-ota-contracts
The KEI report is discussed at https://www.axios.com/federal-government-barda-contracts-moderna-regeneron-aaf9fde2-2ee1-46fb-8465-0d573e6af1ed.html
FROM NPR: Bowser Says Proposed Cuts To Her Police Spending Plan Are 'Not Sound Budgeting'
July 20, 2020 Jenny Gathright
D.C. Mayor Muriel Bowser claims the council's proposed police budget will reduce the number of MPD officers by more than 250 and incur additional overtime costs.
D.C. Mayor Muriel Bowser is criticizing the D.C. Council's proposed budget reductions to the Metropolitan Police Department, saying that they could lead to an increase in costs and should be examined by the city's chief financial officer.
Bowser wrote in a letter over the weekend that the D.C. Council's proposed budget, which it approved unanimously last week, is expected to result in a reduction of more than 250 police officers. That reduction, she claimed, would cause "a significant pressure on overtime." The council is scheduled to take additional votes on the budget and accompanying laws on Tuesday, July 21 and Tuesday, July 28.
D.C. Chief Financial Officer Jeffrey DeWitt must certify the city's budget as part of its approval process. Bowser wrote in her letter that she believed the overtime costs were an issue that could prevent DeWitt from signing off on the spending plan.
"It's one thing to say that you're going to reduce something," Bowser said in a press conference on Monday. "But if we discover eight months from now that it just caused an increase somewhere else — i.e. overtime — it's not sound budgeting."
In her budget proposal, Bowser increased MPD's budget by $18 million, or 3% over the previous year. The council's budget cut $9.6 million of the mayor's proposed increase. As it stands in the council's proposal, MPD will get $568 million dollars, or a 1.6% increase from last year's proposed budget. Ward 6 Council member Charles Allen, who chairs the committee that oversees MPD, has said this actually represents a decrease in police department funding because the mayor revised police spending upwards in the middle of this fiscal year.
The council's changes to the police budget followed an outpouring of testimony from residents and activists who wanted to see significant cuts to MPD's budget and reinvestment in other programs, including violence interruption programs and social services. The council's proposed budget takes the cuts from MPD and funnels them toward violence interruption programs, restorative justice initiatives and victims services work.
Activists who are pushing for greater cuts to policing and echoing calls from Black Lives Matter demonstrators across the country to "defund the police," said the council's proposal was an improvement from the mayor's original budget. But they say it does not go far enough to meet their goals.
"We saw the restoration of funding for violence interruption," Dominique Hazzard, an organizer with Black Youth Project 100, told DCist/WAMU last week. "We saw some funding put in for health support in our schools. But at the same time, you know, that's half of what we were asking for."
Activists with Black Lives Matter's D.C. chapter and other groups have repeatedly said that they want to see the city address violence by tackling its root causes, not through policing.
Allen told DCist/WAMU recently that he believed investments in violence interruption programs led by the Office of Neighborhood Safety and Engagement (ONSE) and the Office of the Attorney General could help alleviate gun violence.
"We know most violent crime is committed by a small percentage of vulnerable residents," Allen said. "If we can reach these folks and offer them a way out, we will prevent more senseless gun violence."
On the other hand, Bowser on Sunday raised concerns she has already brought up about the public safety consequences of reversing her proposed increases to police funding.
"I understand the Council's goal of responding to recent incidents involving excessive force by police officers in other jurisdictions and the national public sentiment regarding the need to reform police operations," Bowser wrote. "But changes to the MPD budget should be made in a more thoughtful and coordinated manner, and I am concerned that the Council's proposed cuts will make District residents less safe."
As part of its cuts, the council eliminated a $1.7 million increase to the police department's cadet program, a reduction Bowser's letter called "inexplicable." Bowser said the cadet program was an important tool for recruiting officers "of diverse racial backgrounds," who are "precisely the officers that we want in MPD to continue our focus on community policing."
In her letter, Bowser said she also had "significant concerns" with several other proposals from the D.C. Council, including tax changes that the Council agreed upon last week.
Bowser wrote that a proposed advertising tax was "ill-advised" because of its potential impact on local newspapers and Black-owned newspapers in particular — a concern that several councilmembers also raised during debate last week. She added that a proposed gas tax could disproportionately impact D.C. residents who have taken on rideshare and delivery gigs as new sources of income during the pandemic and resulting economic crisis. And Bowser opposed the council's decision to further cut a controversial tax credit for tech companies, saying that it would "negatively impact the District's ability to attract future businesses."
Councilmembers have argued for increasing revenues to bring more equity into the budget and to allocate additional resources for programs that target economically vulnerable residents hit hardest by the pandemic. (A majority of the council voted down last week a proposal to increase taxes modestly on wealthy residents.) The council used funds freed up from the tax changes to add money for a fund for undocumented workers, school-based mental health, affordable housing and rental assistance.
Bowser also questioned whether several spending increases proposed by the council, including some money set aside for the Cherry Blossom Festival and an arts project on New York Avenue, were advisable.
"Our fiscal outlook has not changed and the impacts of COVID-19 are still unfolding," Bowser wrote. "Many of the Council's proposed increases are offering District residents a false hope that the additional spending can be maintained."
Source: https://www.npr.org/local/305/2020/07/20/893117369/bowser-says-proposed-cuts-to-her-police-spending-plan-are-not-sound-budgeting
July 20, 2020 Jenny Gathright
D.C. Mayor Muriel Bowser claims the council's proposed police budget will reduce the number of MPD officers by more than 250 and incur additional overtime costs.
D.C. Mayor Muriel Bowser is criticizing the D.C. Council's proposed budget reductions to the Metropolitan Police Department, saying that they could lead to an increase in costs and should be examined by the city's chief financial officer.
Bowser wrote in a letter over the weekend that the D.C. Council's proposed budget, which it approved unanimously last week, is expected to result in a reduction of more than 250 police officers. That reduction, she claimed, would cause "a significant pressure on overtime." The council is scheduled to take additional votes on the budget and accompanying laws on Tuesday, July 21 and Tuesday, July 28.
D.C. Chief Financial Officer Jeffrey DeWitt must certify the city's budget as part of its approval process. Bowser wrote in her letter that she believed the overtime costs were an issue that could prevent DeWitt from signing off on the spending plan.
"It's one thing to say that you're going to reduce something," Bowser said in a press conference on Monday. "But if we discover eight months from now that it just caused an increase somewhere else — i.e. overtime — it's not sound budgeting."
In her budget proposal, Bowser increased MPD's budget by $18 million, or 3% over the previous year. The council's budget cut $9.6 million of the mayor's proposed increase. As it stands in the council's proposal, MPD will get $568 million dollars, or a 1.6% increase from last year's proposed budget. Ward 6 Council member Charles Allen, who chairs the committee that oversees MPD, has said this actually represents a decrease in police department funding because the mayor revised police spending upwards in the middle of this fiscal year.
The council's changes to the police budget followed an outpouring of testimony from residents and activists who wanted to see significant cuts to MPD's budget and reinvestment in other programs, including violence interruption programs and social services. The council's proposed budget takes the cuts from MPD and funnels them toward violence interruption programs, restorative justice initiatives and victims services work.
Activists who are pushing for greater cuts to policing and echoing calls from Black Lives Matter demonstrators across the country to "defund the police," said the council's proposal was an improvement from the mayor's original budget. But they say it does not go far enough to meet their goals.
"We saw the restoration of funding for violence interruption," Dominique Hazzard, an organizer with Black Youth Project 100, told DCist/WAMU last week. "We saw some funding put in for health support in our schools. But at the same time, you know, that's half of what we were asking for."
Activists with Black Lives Matter's D.C. chapter and other groups have repeatedly said that they want to see the city address violence by tackling its root causes, not through policing.
Allen told DCist/WAMU recently that he believed investments in violence interruption programs led by the Office of Neighborhood Safety and Engagement (ONSE) and the Office of the Attorney General could help alleviate gun violence.
"We know most violent crime is committed by a small percentage of vulnerable residents," Allen said. "If we can reach these folks and offer them a way out, we will prevent more senseless gun violence."
On the other hand, Bowser on Sunday raised concerns she has already brought up about the public safety consequences of reversing her proposed increases to police funding.
"I understand the Council's goal of responding to recent incidents involving excessive force by police officers in other jurisdictions and the national public sentiment regarding the need to reform police operations," Bowser wrote. "But changes to the MPD budget should be made in a more thoughtful and coordinated manner, and I am concerned that the Council's proposed cuts will make District residents less safe."
As part of its cuts, the council eliminated a $1.7 million increase to the police department's cadet program, a reduction Bowser's letter called "inexplicable." Bowser said the cadet program was an important tool for recruiting officers "of diverse racial backgrounds," who are "precisely the officers that we want in MPD to continue our focus on community policing."
In her letter, Bowser said she also had "significant concerns" with several other proposals from the D.C. Council, including tax changes that the Council agreed upon last week.
Bowser wrote that a proposed advertising tax was "ill-advised" because of its potential impact on local newspapers and Black-owned newspapers in particular — a concern that several councilmembers also raised during debate last week. She added that a proposed gas tax could disproportionately impact D.C. residents who have taken on rideshare and delivery gigs as new sources of income during the pandemic and resulting economic crisis. And Bowser opposed the council's decision to further cut a controversial tax credit for tech companies, saying that it would "negatively impact the District's ability to attract future businesses."
Councilmembers have argued for increasing revenues to bring more equity into the budget and to allocate additional resources for programs that target economically vulnerable residents hit hardest by the pandemic. (A majority of the council voted down last week a proposal to increase taxes modestly on wealthy residents.) The council used funds freed up from the tax changes to add money for a fund for undocumented workers, school-based mental health, affordable housing and rental assistance.
Bowser also questioned whether several spending increases proposed by the council, including some money set aside for the Cherry Blossom Festival and an arts project on New York Avenue, were advisable.
"Our fiscal outlook has not changed and the impacts of COVID-19 are still unfolding," Bowser wrote. "Many of the Council's proposed increases are offering District residents a false hope that the additional spending can be maintained."
Source: https://www.npr.org/local/305/2020/07/20/893117369/bowser-says-proposed-cuts-to-her-police-spending-plan-are-not-sound-budgeting
Ala. voter ID requirement upheld by 11th Circuit
The US Court of Appeals for the 11th Circuit has ruled in favor of an Alabama law requiring photo identification to vote in person or absentee, saying that the law "was driven by the need to address well-documented and public cases of voter fraud that occurred in Alabama." Opponents argued that the measure was racially discriminatory and unconstitutional, but the court held that the law is not overly burdensome.
Full Story: Courthouse News Service (7/21) https://www.courthousenews.com/naacp-loses-11th-circuit-fight-against-alabama-voter-id-law/
The US Court of Appeals for the 11th Circuit has ruled in favor of an Alabama law requiring photo identification to vote in person or absentee, saying that the law "was driven by the need to address well-documented and public cases of voter fraud that occurred in Alabama." Opponents argued that the measure was racially discriminatory and unconstitutional, but the court held that the law is not overly burdensome.
Full Story: Courthouse News Service (7/21) https://www.courthousenews.com/naacp-loses-11th-circuit-fight-against-alabama-voter-id-law/
Ore. DOJ files lawsuit over feds' response to protests
The Oregon Justice Department has filed a lawsuit alleging that the civil rights of protesters in Portland have been violated by the US Department of Homeland Security, US Customs and Border Protection, the US Marshals Service and the Federal Protective Service. The Oregon DOJ said the federal agencies are detaining protesters without probable cause, and it is seeking a temporary restraining order. It seems likely that the key issue in the litigation is simply whether or not probable cause standards are met, not whether federal officers are exempt from probable cause standards. DR
A copy of the Complaint is here:
http://opb-imgserve-production.s3-website-us-west-2.amazonaws.com/original/ag_rosenblum_xxxx_updated_complaint_1595086491349.pdf
Excerpt:
On information and belief, federal law enforcement officers including John Does 1-10 have been using unmarked vehicles to drive around downtown Portland, detain protesters, and place them into the officers’ unmarked vehicles, removing them from public without either arresting them or stating the basis for an arrest, since at least Tuesday, July 14. The identity of the officers is not known, nor is their agency affiliation, according to videos and reports that the officers in question wear military fatigues with patches simply reading “POLICE,” with no other identifying information.
In one widely reported incident, in the early hours of Wednesday, July 15, Mark Pettibone alleges that he was confronted by armed men dressed in camouflage who took him off the street, pushed him into a van, and drove him through downtown until unloading him into a building, which is believed to have been the Mark O. Hatfield United States Courthouse. Pettibone alleges that he was put into a cell and read his Miranda rights, but was not told why he was arrested, nor was he provided with a lawyer. He alleges that he was released without any paperwork, citation, or record of his arrest. U.S. Customs and Border Protection has been reported by the Washington Post to have taken responsibility for pulling Mr. Pettibone off the streets of Portland and detaining him.
On information and belief, unidentified federal officers including John Does 1-10 have likewise detained other citizens off the Portland streets, without warning or explanation, without a warrant, and without providing any way to determine who is directing this action. There is no way of knowing, in the absence of those officers identifying themselves, whether only U.S. Customs and Border Protection is engaging in these actions. The Marshals Service and other Homeland Security agencies reportedly have been sent to Portland to respond to the protests against racial inequality.
Oregonians have the right to walk through downtown Portland at night, and in the early hours of the morning. Ordinarily, a person exercising his right to walk through the streets of Portland who is confronted by anonymous men in military-type fatigues and ordered into an unmarked van can reasonably assume that he is being kidnapped and is the victim of a crime.
Defendants are injuring the occupants of Portland by taking away citizens’ ability to determine whether they are being kidnapped by militia or other malfeasants dressed in paramilitary gear (such that they may engage in self-defense to the fullest extent permitted by law) or are being arrested (such that resisting might amount to a crime).
State law enforcement officers are not being consulted or coordinated with on these federal detentions, and could expend unnecessary resources responding to reports of an abduction, when federal agents snatch people walking through downtown Portland without explanation or identification.
Defendants’ tactics violate the rights of all people detained without a warrant or a basis for arrest, and violate the state’s sovereign interests in enforcing its laws and in protecting people within its borders from kidnap and false arrest, without serving any legitimate federal law enforcement purpose.
The Oregon Justice Department has filed a lawsuit alleging that the civil rights of protesters in Portland have been violated by the US Department of Homeland Security, US Customs and Border Protection, the US Marshals Service and the Federal Protective Service. The Oregon DOJ said the federal agencies are detaining protesters without probable cause, and it is seeking a temporary restraining order. It seems likely that the key issue in the litigation is simply whether or not probable cause standards are met, not whether federal officers are exempt from probable cause standards. DR
A copy of the Complaint is here:
http://opb-imgserve-production.s3-website-us-west-2.amazonaws.com/original/ag_rosenblum_xxxx_updated_complaint_1595086491349.pdf
Excerpt:
On information and belief, federal law enforcement officers including John Does 1-10 have been using unmarked vehicles to drive around downtown Portland, detain protesters, and place them into the officers’ unmarked vehicles, removing them from public without either arresting them or stating the basis for an arrest, since at least Tuesday, July 14. The identity of the officers is not known, nor is their agency affiliation, according to videos and reports that the officers in question wear military fatigues with patches simply reading “POLICE,” with no other identifying information.
In one widely reported incident, in the early hours of Wednesday, July 15, Mark Pettibone alleges that he was confronted by armed men dressed in camouflage who took him off the street, pushed him into a van, and drove him through downtown until unloading him into a building, which is believed to have been the Mark O. Hatfield United States Courthouse. Pettibone alleges that he was put into a cell and read his Miranda rights, but was not told why he was arrested, nor was he provided with a lawyer. He alleges that he was released without any paperwork, citation, or record of his arrest. U.S. Customs and Border Protection has been reported by the Washington Post to have taken responsibility for pulling Mr. Pettibone off the streets of Portland and detaining him.
On information and belief, unidentified federal officers including John Does 1-10 have likewise detained other citizens off the Portland streets, without warning or explanation, without a warrant, and without providing any way to determine who is directing this action. There is no way of knowing, in the absence of those officers identifying themselves, whether only U.S. Customs and Border Protection is engaging in these actions. The Marshals Service and other Homeland Security agencies reportedly have been sent to Portland to respond to the protests against racial inequality.
Oregonians have the right to walk through downtown Portland at night, and in the early hours of the morning. Ordinarily, a person exercising his right to walk through the streets of Portland who is confronted by anonymous men in military-type fatigues and ordered into an unmarked van can reasonably assume that he is being kidnapped and is the victim of a crime.
Defendants are injuring the occupants of Portland by taking away citizens’ ability to determine whether they are being kidnapped by militia or other malfeasants dressed in paramilitary gear (such that they may engage in self-defense to the fullest extent permitted by law) or are being arrested (such that resisting might amount to a crime).
State law enforcement officers are not being consulted or coordinated with on these federal detentions, and could expend unnecessary resources responding to reports of an abduction, when federal agents snatch people walking through downtown Portland without explanation or identification.
Defendants’ tactics violate the rights of all people detained without a warrant or a basis for arrest, and violate the state’s sovereign interests in enforcing its laws and in protecting people within its borders from kidnap and false arrest, without serving any legitimate federal law enforcement purpose.
Administration on Portland: From Press Briefing by Press Secretary Kayleigh McEnany
Issued on: July 21, 2020
"And 40 U.S. Code 1315 gives DHS the ability to deputize officers in any department or agency, like ICE, Customs and Border Patrol, and Secret Service. Quote, “As officers and agents,” they can be deputized for the duty of — “in connection with the protection of property owned or occupied by the federal government and persons on that property.” And when a federal courthouse is being lit on fire, commercial fireworks being shot at it, being shot at the officers, I think that that falls pretty well within the limits of 40 U.S. Code 1315."
https://www.whitehouse.gov/briefings-statements/press-briefing-press-secretary-kayleigh-mcenany-072120/
Administration on Portland: From Statement by Homeland Security Chief Wolf
Wolf pointed out that there have been “over 50 nights of violent activity targeting federal facilities and federal law enforcement officers,” and added that “it needs to stop.”
“DHS is not going to back down from our responsibilities,” he continued. “We are not escalating, we are protecting … federal facilities.”
He noted that “it's our job” to protect federal property.
“It’s what Congress told us to do time and time again and so we're going to do that,” Wolf said. “We're going to investigate and we're going to hold those accountable. We’re going to arrest them and hold those accountable that are doing this destruction.”
Source: https://www.foxnews.com/media/dhs-chad-wolf-portland-mayor-feds-unrest
Issued on: July 21, 2020
"And 40 U.S. Code 1315 gives DHS the ability to deputize officers in any department or agency, like ICE, Customs and Border Patrol, and Secret Service. Quote, “As officers and agents,” they can be deputized for the duty of — “in connection with the protection of property owned or occupied by the federal government and persons on that property.” And when a federal courthouse is being lit on fire, commercial fireworks being shot at it, being shot at the officers, I think that that falls pretty well within the limits of 40 U.S. Code 1315."
https://www.whitehouse.gov/briefings-statements/press-briefing-press-secretary-kayleigh-mcenany-072120/
Administration on Portland: From Statement by Homeland Security Chief Wolf
Wolf pointed out that there have been “over 50 nights of violent activity targeting federal facilities and federal law enforcement officers,” and added that “it needs to stop.”
“DHS is not going to back down from our responsibilities,” he continued. “We are not escalating, we are protecting … federal facilities.”
He noted that “it's our job” to protect federal property.
“It’s what Congress told us to do time and time again and so we're going to do that,” Wolf said. “We're going to investigate and we're going to hold those accountable. We’re going to arrest them and hold those accountable that are doing this destruction.”
Source: https://www.foxnews.com/media/dhs-chad-wolf-portland-mayor-feds-unrest
From the DC AG:
Major Environmental Protection Win:
Last week, our office announced its largest environmental recovery to date: Monsanto, an agrochemical company, will pay $52 million to clean up toxic pollution in the District.
We sued Monsanto in May to hold the company accountable for toxic polychlorinated biphenyls (PCBs) that damaged our natural resources—including the Anacostia and Potomac Rivers—and put the health of residents at risk. Monsanto manufactured over 99 percent of the PCBs ever used in the U.S. before the chemical was banned in 1979. We alleged the company knowingly produced, promoted, and sold toxic and harmful products and misled consumers and regulators to maximize profits.
Over the last two years and with support from the D.C. Council, OAG has deployed additional resources to protect our environment and the health of District residents. OAG is deeply involved in the District’s ongoing cleanup of the Anacostia River and recovered $2.5 million from a fossil fuel energy company that illegally polluted the river.
Every District resident deserves clean air to breathe, clean water to drink, and a healthy environment to live in. If you are aware of violations of the District’s environmental laws, please report it to the District’s Department of Energy and Environment by calling 311 or using the 311 mobile app.
Karl A. Racine
Attorney General
Holding Neglectful Landlords Accountable
Forest Ridge/The Vista Apartments in Ward 8.
Last week, OAG secured several settlements against neglectful D.C. landlords in Wards 8 and 4 for unsafe and unhealthy housing conditions. Castle Management will pay $3.5 million to D.C. and Ward 8 tenants who were forced to live with vermin infestations, water damage and mold, and security defects that led to persistent gun violence. Ward 8’s Good Hope Laundromat is also required to implement more security measures and pay up to $24k in fines to address rampant drug-related activity on the property. The owners and property managers of Ward 4’s 220 Hamilton St. apartment complex are required to make property repairs and pay a combined total of $50k as a penalty for violating D.C. housing code.
Cure the Streets Spotlight:
OAG is launching a new series called “Cure the Streets Spotlight” where we will highlight Cure the Streets staff who are interrupting violence to make their communities safer. Cotey Wynn is a lifelong Trinidad resident and a Program Supervisor in Ward 5. Read about the challenges that Cotey has overcome and his commitment to being a respected professional, a loving father, a devoted friend, and a pillar to the community. Read about Cotey.
WIN: Stopping Deportation of International Students
AG Racine and a coalition of Attorneys General sued the Trump administration last week to stop a new rule that would have forced thousands of students to leave the U.S. if their all of their classes were online. One day after the lawsuit was filed, the Administration rescinded its policy. This reckless and unlawful rule would have upended months of planning by colleges and universities in D.C. and across the country to limit in-person classes during COVID-19 and put the health and safety of students and educators at risk.
Major Environmental Protection Win:
Last week, our office announced its largest environmental recovery to date: Monsanto, an agrochemical company, will pay $52 million to clean up toxic pollution in the District.
We sued Monsanto in May to hold the company accountable for toxic polychlorinated biphenyls (PCBs) that damaged our natural resources—including the Anacostia and Potomac Rivers—and put the health of residents at risk. Monsanto manufactured over 99 percent of the PCBs ever used in the U.S. before the chemical was banned in 1979. We alleged the company knowingly produced, promoted, and sold toxic and harmful products and misled consumers and regulators to maximize profits.
Over the last two years and with support from the D.C. Council, OAG has deployed additional resources to protect our environment and the health of District residents. OAG is deeply involved in the District’s ongoing cleanup of the Anacostia River and recovered $2.5 million from a fossil fuel energy company that illegally polluted the river.
Every District resident deserves clean air to breathe, clean water to drink, and a healthy environment to live in. If you are aware of violations of the District’s environmental laws, please report it to the District’s Department of Energy and Environment by calling 311 or using the 311 mobile app.
Karl A. Racine
Attorney General
Holding Neglectful Landlords Accountable
Forest Ridge/The Vista Apartments in Ward 8.
Last week, OAG secured several settlements against neglectful D.C. landlords in Wards 8 and 4 for unsafe and unhealthy housing conditions. Castle Management will pay $3.5 million to D.C. and Ward 8 tenants who were forced to live with vermin infestations, water damage and mold, and security defects that led to persistent gun violence. Ward 8’s Good Hope Laundromat is also required to implement more security measures and pay up to $24k in fines to address rampant drug-related activity on the property. The owners and property managers of Ward 4’s 220 Hamilton St. apartment complex are required to make property repairs and pay a combined total of $50k as a penalty for violating D.C. housing code.
Cure the Streets Spotlight:
OAG is launching a new series called “Cure the Streets Spotlight” where we will highlight Cure the Streets staff who are interrupting violence to make their communities safer. Cotey Wynn is a lifelong Trinidad resident and a Program Supervisor in Ward 5. Read about the challenges that Cotey has overcome and his commitment to being a respected professional, a loving father, a devoted friend, and a pillar to the community. Read about Cotey.
WIN: Stopping Deportation of International Students
AG Racine and a coalition of Attorneys General sued the Trump administration last week to stop a new rule that would have forced thousands of students to leave the U.S. if their all of their classes were online. One day after the lawsuit was filed, the Administration rescinded its policy. This reckless and unlawful rule would have upended months of planning by colleges and universities in D.C. and across the country to limit in-person classes during COVID-19 and put the health and safety of students and educators at risk.
TikTok Plans to Hire 10,000 Employees In America
Ashley King
July 22, 2020
TikTok’s meteoric growth around the globe has brought concerns over censorship and moderation. TikTok has been caught red-handed censoring things China deems inappropriate – like fat, ugly, poor, and gay people. Since then, ByteDance has continued its mission to separate TikTok.
Kevin Mayer, who Peter Navarro called an “American puppet,” recently joined the company as CEO. Mayer previously managed Disney’s streaming division and the launch of Disney+. As part of its stateside takeover, the company has launched splashy offices in Los Angeles and Times Square in New York City. Now, a TikTok spokesperson says the company plans to hire 10,000 employees in the U.S. over the next three years.
“In 2020, TikTok tripled the number of employees working in the U.S., and we plan to add another 10,000 jobs here over the next three years,” the TikTok spokesperson confirmed. “These are good-paying jobs that will help us continue to build a fun and safe experience and protect our community’s privacy.”
Back in March, ByteDance said it hopes to have 100,000 global employees on its payroll by the end of 2020. By comparison, Facebook employs 44,942 people, and Google employs 118,899, according to 2019 data.
ByteDance likely hopes the jobs announcement will deter the Trump admin from following through with a TikTok ban.
The United States is clamping down on Chinese technology companies like ByteDance and Huawei. The Trump administration says it is “looking at” a TikTok ban and whether that’s feasible in the U.S. The administration has also taken drastic steps against Huawei, banning it from selling equipment to the U.S. telecoms. Huawei is also subject to strict sanctions due to allegations of spying.
The U.S. government is also conducting a national security review of the acquisition of Musical.ly. ByteDance acquired Musical.ly back in 2017 and merged it with TikTok. Government officials are concerned that ByteDance may be censoring politically-sensitive content. Officials have also announced concerns about China’s access to user data.
Several branches of the U.S. military, including the Army, Navy, and Marines, have a TikTok ban in place already. There’s even a bill pitched in Congress to extend that ban to all government-owned devices.
ByteDance’s plan to create more American jobs may throw a wrench in the Trump admin’s plans for a TikTok ban. The president is eager to be seen as a job creator in the U.S., and banning TikTok, of course, will do the opposite of that.
Source: https://www.digitalmusicnews.com/2020/07/22/tiktok-hiring-despite-ban/
Ashley King
July 22, 2020
TikTok’s meteoric growth around the globe has brought concerns over censorship and moderation. TikTok has been caught red-handed censoring things China deems inappropriate – like fat, ugly, poor, and gay people. Since then, ByteDance has continued its mission to separate TikTok.
Kevin Mayer, who Peter Navarro called an “American puppet,” recently joined the company as CEO. Mayer previously managed Disney’s streaming division and the launch of Disney+. As part of its stateside takeover, the company has launched splashy offices in Los Angeles and Times Square in New York City. Now, a TikTok spokesperson says the company plans to hire 10,000 employees in the U.S. over the next three years.
“In 2020, TikTok tripled the number of employees working in the U.S., and we plan to add another 10,000 jobs here over the next three years,” the TikTok spokesperson confirmed. “These are good-paying jobs that will help us continue to build a fun and safe experience and protect our community’s privacy.”
Back in March, ByteDance said it hopes to have 100,000 global employees on its payroll by the end of 2020. By comparison, Facebook employs 44,942 people, and Google employs 118,899, according to 2019 data.
ByteDance likely hopes the jobs announcement will deter the Trump admin from following through with a TikTok ban.
The United States is clamping down on Chinese technology companies like ByteDance and Huawei. The Trump administration says it is “looking at” a TikTok ban and whether that’s feasible in the U.S. The administration has also taken drastic steps against Huawei, banning it from selling equipment to the U.S. telecoms. Huawei is also subject to strict sanctions due to allegations of spying.
The U.S. government is also conducting a national security review of the acquisition of Musical.ly. ByteDance acquired Musical.ly back in 2017 and merged it with TikTok. Government officials are concerned that ByteDance may be censoring politically-sensitive content. Officials have also announced concerns about China’s access to user data.
Several branches of the U.S. military, including the Army, Navy, and Marines, have a TikTok ban in place already. There’s even a bill pitched in Congress to extend that ban to all government-owned devices.
ByteDance’s plan to create more American jobs may throw a wrench in the Trump admin’s plans for a TikTok ban. The president is eager to be seen as a job creator in the U.S., and banning TikTok, of course, will do the opposite of that.
Source: https://www.digitalmusicnews.com/2020/07/22/tiktok-hiring-despite-ban/
The DC Council’s Coronavirus Support Emergency Amendment Act of 2020 and landlord- tenant rights
Rent Payment Program. Effective as of May 19th, for the remaining period of the Emergency and one year thereafter (program period), all landlords (no matter the number of units leased) are required to (i) notify their residential and commercial retail tenants of the availability, terms and application process for a rent payment program and (ii) make the program available to eligible tenants.
Evictions. Effective as of March 11th until 60 days after the end of the Emergency, no landlord may file complaints for evictions of residential or commercial tenants.
Credit: https://www.arnoldporter.com/en/perspectives/publications/2020/06/dc-council-provisions-for-the-real-estate
Rent Payment Program. Effective as of May 19th, for the remaining period of the Emergency and one year thereafter (program period), all landlords (no matter the number of units leased) are required to (i) notify their residential and commercial retail tenants of the availability, terms and application process for a rent payment program and (ii) make the program available to eligible tenants.
- Eligible tenants include residential and commercial retail tenants (excluding franchisees of non-District residents).
- To qualify, eligible tenants must demonstrate that they are suffering a financial hardship resulting directly or indirectly from the Emergency and that such hardship would make the tenant unable to qualify to rent the space based on the same criteria that were applied at the time the tenant was approved to rent the space.
- The program must grant a deferral of "gross rent" due until the earlier of the end of the program period or the end of the lease term. In other words, this seems to grant tenants the right to defer rent for at least 13 months.
- The payback period must be for at least one year unless the tenant requests a shorter period, with payments in equal monthly installments unless a different schedule is requested by the tenant. The legislation leaves unclear what happens if a tenant's lease term expires between May 19, 2020 and the end of the payback period.
- During the program period, unless the landlord has offered and approved a rent payment plan pursuant to the Consolidated Bill (and the tenant defaults on such plan), the landlord is prohibited from filing any collection lawsuit or eviction for non-payment of rent against a tenant in default.
Evictions. Effective as of March 11th until 60 days after the end of the Emergency, no landlord may file complaints for evictions of residential or commercial tenants.
Credit: https://www.arnoldporter.com/en/perspectives/publications/2020/06/dc-council-provisions-for-the-real-estate
How has China grown to dominate the market for rare earth metals even though it only possesses one-third of known global deposits?
https://www.nbr.org/publication/chinas-control-of-rare-earth-metals/
Excerpt:
China has dominated the production of rare earth metals since the 1990s, driven largely by two factors: low prices and state-backed investment in infrastructure and technology. In prior decades, the United States had dominated this market, largely through production at the Mountain Pass mine in California. However, as Chinese output began to reach levels that could fulfill global demand at a much lower price point, the United States was unable to compete. By the 2000s, China had near complete domination of rare earths production.
This dominance was not achieved by prices alone. The Chinese party-state also used industrial policy starting in the 1980s to develop expertise in the extraction, separation, and refinement of rare earths. Chinese industrial policy in fact mirrored the U.S. approach in the 1950s and 1960s, when the Ames Laboratory and Rare-earth Information Center (RIC) used state investment to bolster the efforts of the private sector.
https://www.nbr.org/publication/chinas-control-of-rare-earth-metals/
Excerpt:
China has dominated the production of rare earth metals since the 1990s, driven largely by two factors: low prices and state-backed investment in infrastructure and technology. In prior decades, the United States had dominated this market, largely through production at the Mountain Pass mine in California. However, as Chinese output began to reach levels that could fulfill global demand at a much lower price point, the United States was unable to compete. By the 2000s, China had near complete domination of rare earths production.
This dominance was not achieved by prices alone. The Chinese party-state also used industrial policy starting in the 1980s to develop expertise in the extraction, separation, and refinement of rare earths. Chinese industrial policy in fact mirrored the U.S. approach in the 1950s and 1960s, when the Ames Laboratory and Rare-earth Information Center (RIC) used state investment to bolster the efforts of the private sector.
In honor of John Lewis: John Lewis’ speech at the March on Washington - "complete the revolution of 1776." https://www.youtube.com/watch?v=tFs1eTsokJg&feature=youtu.be
The March on Washington was held in Washington, D.C. on August 28, 1963 to advocate for the civil and economic rights of African Americans. At the march, Martin Luther King Jr. delivered his historic “I Have a Dream” speech in which he called for an end to racism. John Lewis of SNCC also spoke at the event. His speech pointed out the injustices visited on African Americans and focused on the need of government to expand the civil and economic rights and opportunities of all Americans.
The March on Washington was held in Washington, D.C. on August 28, 1963 to advocate for the civil and economic rights of African Americans. At the march, Martin Luther King Jr. delivered his historic “I Have a Dream” speech in which he called for an end to racism. John Lewis of SNCC also spoke at the event. His speech pointed out the injustices visited on African Americans and focused on the need of government to expand the civil and economic rights and opportunities of all Americans.
U.S. to pay Pfizer, BioNTech $1.95 billion for 100 million COVID-19 vaccine doses
Michael Erman and Ankur Banerjee
ReutersJuly 22, 2020
(Reuters) - The U.S. government will pay $1.95 billion to buy 100 million doses of a COVID-19 vaccine being developed by Pfizer Inc <PFE.N> and German biotech BioNTech SE if it proves to be safe and effective, the companies said on Wednesday.
The contract is the most the United States has agreed to spend on a vaccine, although previous deals with other vaccine makers were intended to also help pay for development costs.
Pfizer and BioNTech will not receive any money from the government unless their vaccine succeeds in large clinical trials and can be successfully manufactured, according to a Pfizer spokeswoman.
Under the agreement, the government would also have an option to procure an additional 500 million doses. Pfizer said the price for the additional doses if ordered would be negotiated separately if the U.S. orders them.
The vaccine, if successful, will be made available to Americans at no cost, although their health insurance may be charged, the U.S. department of Health and Human Services (HHS) said.
The vaccine has already shown promise in early-stage small studies in humans, producing the type of neutralizing antibodies needed to fight the virus. In those trials, subjects received two doses of the vaccine. That means a 100 million doses would be enough to vaccinate 50 million Americans.
The deal suggests a U.S. price of $39 for a two-dose regimen.
The Pfizer/BioNTech candidate is one of the most advanced of over 150 vaccines being developed against COVID-19, which has claimed more than 600,000 lives globally and crippled economies.
The vaccine utilizes the chemical messenger RNA to instruct cells to make proteins that mimic the surface of the coronavirus, which the immune system sees as a foreign invader and mounts an attack. Although the technology has been around for years, there has never been an approved messenger RNA (mRNA)vaccine.
The aim is to produce vaccines that can end the pandemic by protecting billions of people from infection or severe illness, and governments have signed deals with drugmakers to secure supplies of various candidates. Whether any will succeed remains far from clear.
The Trump administration has agreed to spend billions of dollars for the development and procurement of potential vaccines under its Operation Warp Speed program.
Other vaccine makers that have signed deals to receive U.S. government funding for their efforts include Moderna Inc , AstraZeneca Plc .L> and Novavax Inc .
Pfizer said it will deliver the doses if the product receives emergency use authorization or U.S. approval after demonstrating safety and efficacy in a large Phase III clinical trial involving up to 30,000 subjects that could begin as early as later this month.
The companies said they could be ready to seek some form of regulatory approval as early as October if trials are successful.
Pfizer and BioNTech currently expect to manufacture up to 100 million doses globally by the end of 2020, and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.
On Monday, the companies agreed to supply the United Kingdom with 30 million doses of the vaccine candidate, but did not disclose a price.
Pfizer shares were up 4%, while BioNTech's U.S.-listed shares were up 13%.
Source: https://finance.yahoo.com/news/u-government-engages-pfizer-produce-111948798.html
Michael Erman and Ankur Banerjee
ReutersJuly 22, 2020
(Reuters) - The U.S. government will pay $1.95 billion to buy 100 million doses of a COVID-19 vaccine being developed by Pfizer Inc <PFE.N> and German biotech BioNTech SE if it proves to be safe and effective, the companies said on Wednesday.
The contract is the most the United States has agreed to spend on a vaccine, although previous deals with other vaccine makers were intended to also help pay for development costs.
Pfizer and BioNTech will not receive any money from the government unless their vaccine succeeds in large clinical trials and can be successfully manufactured, according to a Pfizer spokeswoman.
Under the agreement, the government would also have an option to procure an additional 500 million doses. Pfizer said the price for the additional doses if ordered would be negotiated separately if the U.S. orders them.
The vaccine, if successful, will be made available to Americans at no cost, although their health insurance may be charged, the U.S. department of Health and Human Services (HHS) said.
The vaccine has already shown promise in early-stage small studies in humans, producing the type of neutralizing antibodies needed to fight the virus. In those trials, subjects received two doses of the vaccine. That means a 100 million doses would be enough to vaccinate 50 million Americans.
The deal suggests a U.S. price of $39 for a two-dose regimen.
The Pfizer/BioNTech candidate is one of the most advanced of over 150 vaccines being developed against COVID-19, which has claimed more than 600,000 lives globally and crippled economies.
The vaccine utilizes the chemical messenger RNA to instruct cells to make proteins that mimic the surface of the coronavirus, which the immune system sees as a foreign invader and mounts an attack. Although the technology has been around for years, there has never been an approved messenger RNA (mRNA)vaccine.
The aim is to produce vaccines that can end the pandemic by protecting billions of people from infection or severe illness, and governments have signed deals with drugmakers to secure supplies of various candidates. Whether any will succeed remains far from clear.
The Trump administration has agreed to spend billions of dollars for the development and procurement of potential vaccines under its Operation Warp Speed program.
Other vaccine makers that have signed deals to receive U.S. government funding for their efforts include Moderna Inc , AstraZeneca Plc .L> and Novavax Inc .
Pfizer said it will deliver the doses if the product receives emergency use authorization or U.S. approval after demonstrating safety and efficacy in a large Phase III clinical trial involving up to 30,000 subjects that could begin as early as later this month.
The companies said they could be ready to seek some form of regulatory approval as early as October if trials are successful.
Pfizer and BioNTech currently expect to manufacture up to 100 million doses globally by the end of 2020, and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.
On Monday, the companies agreed to supply the United Kingdom with 30 million doses of the vaccine candidate, but did not disclose a price.
Pfizer shares were up 4%, while BioNTech's U.S.-listed shares were up 13%.
Source: https://finance.yahoo.com/news/u-government-engages-pfizer-produce-111948798.html
Elisabeth Rosenthal on why COVID-19 vaccines are likely to yield high profit to pharmaceutical companies, and be expensive
Health care industry expert Elisabeth Rosenthal warns that a future COVID-19 vaccine is likely to be a high profit and high priced product for pharmaceutical companies. The consequences are likely to be high prices charged to individuals, health insurers, and government, with distribution that will be inefficient from a public health perspective. See www.nytimes.com/2020/07/06/opinion/...
Rosenthal points out that a COVID-19 vaccine will be high priced because it will be covered by patent protection, and very likely pharmaceutical companies will follow the strategy of high prices that has become the industry standard for vaccines. Examples are meningitis B vaccine and shingles vaccine, which have a retail cost of $300 to $400 for a full course.
The potential for commercial profiteering from a COVID-19 vaccine is in contrast to what happened with the crucial polio vaccine of an earlier era. In the mid-1950s the developer of the successful polio vaccine, Jonas Salk, did not take a patent on the vaccine. The March of Dimes Foundation covered the drug cost for a free national vaccination program.
Rosenthal discusses several ways in which high COVID-19 vaccine prices could be moderated. She mentions recent legislative proposals to limit prices. They are the Make Medications Affordable by Preventing Pandemic Price Gouging Act (MMAPPP) Act of 2020, sponsored by Rep. Jan Schakowsky (D-Ill.), and Taxpayer Research and Coronavirus Knowledge (TRACK) Act, sponsored by Rep. Lloyd Doggett (D-Texas). According to a press release, these proposals establish "comprehensive protections against drug price gouging" of COVID-19 treatments. The bills would prohibit monopolies by pharmaceutical companies for taxpayer-funded COVID-19 drugs, require the federal government to mandate affordable pricing for treatments and vaccines, and require drug makers to reveal their total expenditures on a COVID-19 drug, including what percentage were derived from federal funds.
These recent legislative proposals mix two approaches to controlling pricing. One approach focuses on regulation of price gouging. Another approach focuses on the role of the federal government as the source of crucial research and funding. The thought is that since the federal government and taxpayers have provided funding for the development of pharmaceuticals, they should be repaid by the pharmaceutical companies that market the final commercial product.
This issue is not new, and the statutory law already provides some authority for the federal government to assert pricing authority where the government has provided funding or intellectual property. A relevant controversy from the past involved Zidovudine (AZT, Retrovir) an anti-HIV drug. These drugs were developed with substantial federal government participation but initially were sold by pharmaceutical companies at high prices that were unaffordable for many. Advocates argued that anti- HIV drugs should not be too scarce or too expensive. They were concerned that private commercialization of government supported drug development was unfair.
As Elisabeth Rosenthal points out, the federal government has some existing authority to protect its rights as an investor by asserting "march-in" authority under the Bayh-Dole Act of 2000. That statutory authority permits the government to insist that federally developed vaccine technology be more freely and inexpensively available to others, including the federal government. See the article on march-in authority by Linlin Tian at www.jdsupra.com/legalnews/...
As Rosenthal says, the federal government's "march in'' authority is seldom used, and may have already been waived with regard to some pharmaceutical companies developing COVID-19 vaccines. That would be unfortunate; it would be better if the statutory authority to protect the public interest were wisely used.
By Don Allen Resnikoff, who takes responsibility for opinions expressed
Health care industry expert Elisabeth Rosenthal warns that a future COVID-19 vaccine is likely to be a high profit and high priced product for pharmaceutical companies. The consequences are likely to be high prices charged to individuals, health insurers, and government, with distribution that will be inefficient from a public health perspective. See www.nytimes.com/2020/07/06/opinion/...
Rosenthal points out that a COVID-19 vaccine will be high priced because it will be covered by patent protection, and very likely pharmaceutical companies will follow the strategy of high prices that has become the industry standard for vaccines. Examples are meningitis B vaccine and shingles vaccine, which have a retail cost of $300 to $400 for a full course.
The potential for commercial profiteering from a COVID-19 vaccine is in contrast to what happened with the crucial polio vaccine of an earlier era. In the mid-1950s the developer of the successful polio vaccine, Jonas Salk, did not take a patent on the vaccine. The March of Dimes Foundation covered the drug cost for a free national vaccination program.
Rosenthal discusses several ways in which high COVID-19 vaccine prices could be moderated. She mentions recent legislative proposals to limit prices. They are the Make Medications Affordable by Preventing Pandemic Price Gouging Act (MMAPPP) Act of 2020, sponsored by Rep. Jan Schakowsky (D-Ill.), and Taxpayer Research and Coronavirus Knowledge (TRACK) Act, sponsored by Rep. Lloyd Doggett (D-Texas). According to a press release, these proposals establish "comprehensive protections against drug price gouging" of COVID-19 treatments. The bills would prohibit monopolies by pharmaceutical companies for taxpayer-funded COVID-19 drugs, require the federal government to mandate affordable pricing for treatments and vaccines, and require drug makers to reveal their total expenditures on a COVID-19 drug, including what percentage were derived from federal funds.
These recent legislative proposals mix two approaches to controlling pricing. One approach focuses on regulation of price gouging. Another approach focuses on the role of the federal government as the source of crucial research and funding. The thought is that since the federal government and taxpayers have provided funding for the development of pharmaceuticals, they should be repaid by the pharmaceutical companies that market the final commercial product.
This issue is not new, and the statutory law already provides some authority for the federal government to assert pricing authority where the government has provided funding or intellectual property. A relevant controversy from the past involved Zidovudine (AZT, Retrovir) an anti-HIV drug. These drugs were developed with substantial federal government participation but initially were sold by pharmaceutical companies at high prices that were unaffordable for many. Advocates argued that anti- HIV drugs should not be too scarce or too expensive. They were concerned that private commercialization of government supported drug development was unfair.
As Elisabeth Rosenthal points out, the federal government has some existing authority to protect its rights as an investor by asserting "march-in" authority under the Bayh-Dole Act of 2000. That statutory authority permits the government to insist that federally developed vaccine technology be more freely and inexpensively available to others, including the federal government. See the article on march-in authority by Linlin Tian at www.jdsupra.com/legalnews/...
As Rosenthal says, the federal government's "march in'' authority is seldom used, and may have already been waived with regard to some pharmaceutical companies developing COVID-19 vaccines. That would be unfortunate; it would be better if the statutory authority to protect the public interest were wisely used.
By Don Allen Resnikoff, who takes responsibility for opinions expressed
Does Chief US Supreme Court Justice Roberts want to get the government out of the business of counting by race?
That's what respected US Supreme Court journalist Linda Greenhouse suggests in a recent column at https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage Her brief comments about racial equity issues are part of an article focused largely on cases about religion. Her comments about racial equity issues are based on some earlier cases, but they resonate at our current moment of broadened attention to racial justice issues:
She writes that one of Roberts' goals as Chief Justice concerning racial issues is:
getting the government out of the business of counting by race by rejecting both affirmative action that increases opportunity for racial minorities and federally policed guardrails to prevent the suppression of minority votes. His early years on the job reflected this deep commitment, first with the Parents Involved case in 2006, overturning efforts by two school districts to maintain integration through race-conscious school assignment measures [see https://www.oyez.org/cases/2006/05-908] , and, six years later, with Shelby County v. Holder, which cut the heart out of the Voting Rights Act of 1965. [see https://www.oyez.org/cases/2012/12-96]
https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage
That's what respected US Supreme Court journalist Linda Greenhouse suggests in a recent column at https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage Her brief comments about racial equity issues are part of an article focused largely on cases about religion. Her comments about racial equity issues are based on some earlier cases, but they resonate at our current moment of broadened attention to racial justice issues:
She writes that one of Roberts' goals as Chief Justice concerning racial issues is:
getting the government out of the business of counting by race by rejecting both affirmative action that increases opportunity for racial minorities and federally policed guardrails to prevent the suppression of minority votes. His early years on the job reflected this deep commitment, first with the Parents Involved case in 2006, overturning efforts by two school districts to maintain integration through race-conscious school assignment measures [see https://www.oyez.org/cases/2006/05-908] , and, six years later, with Shelby County v. Holder, which cut the heart out of the Voting Rights Act of 1965. [see https://www.oyez.org/cases/2012/12-96]
https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage
Complaint in states' lawsuit against education department over borrower defense
https://int.nyt.com/data/documenttools/states-lawsuit-against-education-department-over-borrower-defense/59a7f80eac022971/full.pdf
Excerpt from the Complaint (lightly edited for convenient display):
In 2019, ED issued new regulations (the “2019 Rule”) governing the defenses borrowers may assert to the repayment of their federal student loans. The 2019 Rule for the first time completely eliminated violations of applicable state consumer protection law as a viable defense to repayment of federal student loans.
In fact, ED eliminated all available defenses, except just one: “a misrepresentation . . . of material fact upon which the borrower reasonably relied in deciding to obtain” a federal student loan. 84 Fed. Reg. 49,803.
Even after drastically limiting available defenses, ED [the Department of Education] imposed additional requirements on a viable misrepresentation defense that are so onerous that they make this defense impossible for a student loan borrower to assert successfully.
Amongst other arbitrary impediments, the 2019 Rule requires borrowers to prove by a preponderance of the evidence not merely that their school misrepresented a material fact, but that the school did so knowingly or with reckless disregard for the truth. A school may misrepresent the job or earnings prospects of its graduates, the likelihood of completing its program, even the vocational licensing requirements of state law—but a borrower cannot assert these misrepresentations as a defense unless he or she can prove that the school did not simply make a mistake.
Moreover, the 2019 Rule requires each and every borrower to meet this insurmountable burden on their own. Notwithstanding the fact that borrower defense claims frequently involve common issues of fact, the 2019 Rule arbitrarily eliminates any group discharge process.
In reality, the 2019 Rule eliminates all viable defenses to repayment, contrary to Congress’s mandate to ED. ED does not even fully deny this fact, and states that one of the primary purposes of the 2019 Rule is to diminish successful borrower defense claims even where, as ED concedes, the school has engaged in actionable misconduct.
https://int.nyt.com/data/documenttools/states-lawsuit-against-education-department-over-borrower-defense/59a7f80eac022971/full.pdf
Excerpt from the Complaint (lightly edited for convenient display):
In 2019, ED issued new regulations (the “2019 Rule”) governing the defenses borrowers may assert to the repayment of their federal student loans. The 2019 Rule for the first time completely eliminated violations of applicable state consumer protection law as a viable defense to repayment of federal student loans.
In fact, ED eliminated all available defenses, except just one: “a misrepresentation . . . of material fact upon which the borrower reasonably relied in deciding to obtain” a federal student loan. 84 Fed. Reg. 49,803.
Even after drastically limiting available defenses, ED [the Department of Education] imposed additional requirements on a viable misrepresentation defense that are so onerous that they make this defense impossible for a student loan borrower to assert successfully.
Amongst other arbitrary impediments, the 2019 Rule requires borrowers to prove by a preponderance of the evidence not merely that their school misrepresented a material fact, but that the school did so knowingly or with reckless disregard for the truth. A school may misrepresent the job or earnings prospects of its graduates, the likelihood of completing its program, even the vocational licensing requirements of state law—but a borrower cannot assert these misrepresentations as a defense unless he or she can prove that the school did not simply make a mistake.
Moreover, the 2019 Rule requires each and every borrower to meet this insurmountable burden on their own. Notwithstanding the fact that borrower defense claims frequently involve common issues of fact, the 2019 Rule arbitrarily eliminates any group discharge process.
In reality, the 2019 Rule eliminates all viable defenses to repayment, contrary to Congress’s mandate to ED. ED does not even fully deny this fact, and states that one of the primary purposes of the 2019 Rule is to diminish successful borrower defense claims even where, as ED concedes, the school has engaged in actionable misconduct.
Texas AG Sends Another Round Of Questions To Google -
July 13, 2020Texas Attorney General Ken Paxton sent another round of questions to Google seeking detailed answers about the company’s advertising technology.
The 53-page civil investigative demand, dated June 22 and obtained by POLITICO through a public records request, zeroes in on changes the search giant has made in recent years to how online ads are sold. Google must respond by July 22.
Among the Google product changes targeted by investigators is the company’s decision in 2016 to require advertisers to buy YouTube ads through Google’s products; the adoption of accelerated mobile pages, known as AMP, a technology that stores mobile websites on Google servers; and the January announcement that the tech giant will eliminate third-party cookies from the Chrome web browser.
All three changes have drawn complaints from advertisers. Subscription news service MLex first reported on the query. Google said it will “continue to engage” with the investigation.
Full Content: Politico
July 13, 2020Texas Attorney General Ken Paxton sent another round of questions to Google seeking detailed answers about the company’s advertising technology.
The 53-page civil investigative demand, dated June 22 and obtained by POLITICO through a public records request, zeroes in on changes the search giant has made in recent years to how online ads are sold. Google must respond by July 22.
Among the Google product changes targeted by investigators is the company’s decision in 2016 to require advertisers to buy YouTube ads through Google’s products; the adoption of accelerated mobile pages, known as AMP, a technology that stores mobile websites on Google servers; and the January announcement that the tech giant will eliminate third-party cookies from the Chrome web browser.
All three changes have drawn complaints from advertisers. Subscription news service MLex first reported on the query. Google said it will “continue to engage” with the investigation.
Full Content: Politico
Should the government force prudence on novice stock investors?
Market observers worry that a new group of largely inexperienced stock investors is at risk for great financial harm.
Commenters like Jim Cramer have remarked that many novice investors use recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel stocks. These stocks have been pummeled by COVID concerns, but rebounded from very low prices to somewhat higher prices. The rebound was partly in response to infusions of federal cash and credit. Jim Cramer and others fretted that novice traders who relied on the recent upward trajectory of COVID vulnerable stocks risked disaster because of market ignorance.
Casey Primozic, whose company Robintrack follows behavior of novice investors, suggested in a CNBC interview that novice investors will often join what they sense is a growth trend in a stock, without worrying about business fundamentals like profitability.
Novice investors are subject to manipulation by sophisticated investors, according to Jim Cramer. He says that professionals on Wall Street have taken advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Many observers saw a ploy to snare gullible novice stock traders when Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares destined to be wiped out when Hertz’ bankruptcy case is finished. Investors promptly bid up Hertz by 68%. Hertz halted stock sales when staff members at the U.S. Securities and Exchange Commission raised legal issues.
A New York Times article explains that millions of individuals without stock trading experience have recently begun investing through a company called Robinhood, which has an “app” that makes trading particularly easy and cheap. The article says that “More than at any other retail brokerage firm, Robinhood’s users trade the riskiest products and at the fastest pace . . . .”
A Bankrate review of Robinhood says that “While investors can find free stock and ETF trades at most brokerages, the real differentiator for Robinhood is its free options trading. . . . Robinhood charges no per-contract fee.” Also, “Robinhood allows you to trade some cryptocurrencies commission-free, too.”
The New York Times article explains that Robinhood software coaches its investors on how to avoid government regulatory strictures that block the inexperienced from trading in options. The Robinhood app is organized so that customers who want to trade options answer just a few multiple-choice questions. The Times explains that “Beginners are legally barred from trading options, but those who click that they have no investing experience are coached by the app on how to change the answer to ‘not much’ experience. Then people can immediately begin trading.”
Such egging on of inexperienced investors by Robinhood and others seems undesirable, particularly since there are many unfortunate stories of novice investors who have been brought to financial ruin. It is hard not to agree with Jim Cramer’s conclusion that novice investors are subject to exploitation by unscrupulous people. Sometimes such exploitation will attract the attention of regulators, as happened with the Hertz offering. But it seems likely that much exploitative behavior will escape government scrutiny. And, of course, not all examples of aggressive selling to novice investors deserve government action: Novice investors have at least some obligation to exercise common sense.
Possible government action against exploitation of novice investors may be supplemented by industry self-regulation. In addition to being subject to SEC regulation, most brokerage firms voluntarily participate in self-regulatory organizations (SROs) like the Financial Industry Regulatory Authority (FINRA). Brokerages that are FINRA members submit to the organization's rules and regulations, which includes a transparent disclosure framework that protects investors. In an article which asks whether Robinhood is safe for investors, Investopedia points out that Robinhood maintains membership in FINRA.
By Don Allen Resnikoff
Citations:
https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html?searchResultPosition=1
https://www.cnbc.com/video/2020/07/08/robintrack-founder-casey-primozic-parses-through-latest-trading-trends.html
https://www.bankrate.com/investing/brokerage-reviews/robinhood/
https://www.investopedia.com/investing/is-robinhood-safe/
Bloomberg:
Amateur investors who loaded up on J.C. Penney Co. shares as the retailer went bankrupt are now pleading with a judge to spare them from a complete wipeout.
“I hope and pray for you to consider the shareholders,” wrote 50-year-old individual investor John Hardt in a letter dated May 25, one of dozens sent to the Corpus Christi, Texas-based court overseeing the case in recent months.
Hardt is part of a growing number of retail traders -- many driven by lockdown boredom and free online trading -- who have piled into the stock market. Speculation by amateurs is nothing new, but for the first time experts can recall, investors are buying shares of even bankrupt companies. Hertz Global Holdings Inc., oil driller Whiting Petroleum Corp. and J.C. Penney have all seen their stock price surge in recent sessions, despite being in Chapter 11.
Those gains almost always prove fleeting, leaving retail traders with little to show for their stakes other than an expensive lesson in the U.S. corporate bankruptcy process -- where shareholder value disappears almost as a rule. That’s because all creditors have to be made whole before equity owners get anything. For J.C. Penney investors, there’s little to suggest this time will prove any different.
A representative for the company declined to comment on the shareholder letters. An unrelated hearing scheduled for Monday may yield an update about extending the deadline for lenders to approve its turnaround plan.
“If there is any possible way -- any way -- to give a meaningful recovery to shareholders, we will fight for it,” Joshua Sussberg of Kirkland & Ellis, J.C. Penney’s bankruptcy lawyer, said at a June 9 hearing.
Mom-and-pop investors who insist on betting on struggling companies would be well advised to stay away from those in or near bankruptcy, said Fred Ringel, a partner and co-chair of the bankruptcy department at law firm Robinson Brog Leinwand Greene Genovese & Gluck.
“People who buy equity hoping that they’re not going to get wiped out in a bankruptcy just don’t understand the process,” Ringel said.
He added he’s been baffled to see retail investors putting cash into bankrupt stocks given the complexity of the restructuring process. “I don’t understand this phenomenon at all,” he said.
J.C. Penney filed for Chapter 11 in mid-May. After climbing as high as 67.9 cents last month, the company’s stock is trading at around 30 cents. Some of the retailer’s most junior debt -- which still ranks ahead of shares in the repayment line -- is quoted at less than 2 cents on the dollar. This implies extremely thin odds that bondholders will get repaid, and in turn that nothing will be left over for stockholders.
Hardt, when contacted by Bloomberg last week, said he had “zero knowledge of the bankruptcy process” before buying about 10,000 J.C. Penney shares. The Plano, Texas native said he’s already sold the position.
Several of the letters from J.C. Penney shareholders criticize the company’s failure so far to announce a buyer, after media reports cited several potential bidders, including Amazon.com Inc. Bloomberg reported in May on talks between Authentic Brands Group LLC and mall landlords Simon Property Group Inc. and Brookfield Property Partners LP to acquire the chain.
Retail investors hoping for a sale may have thought a buyer would pay cash for outstanding shares. Yet that’s practically unheard of in bankruptcy, where any asset value that remains after court costs belongs to lenders with senior collateral claims. Once they’re made whole, other creditors, including unsecured lenders and vendors are next in line. J.C. Penney entered bankruptcy with more than $2 billion in secured debt and $8 billion in total debt.
Some recent J.C. Penney investors said in interviews that that they bought shares on the expectation that the company would be able to rebound once stores shuttered by the Covid-19 outbreak were able to reopen, and therefore the retailer would be able to secure better terms in its restructuring negotiations than the typical Chapter 11 debtor.
The company has struggled for years, but analysts generally expected before the pandemic that it could hold out until at least 2021.
Some of the letters also criticize the decisions of corporate management and claim that Chief Executive Officer Jill Soltau offered false hope to investors. The company maintained in public statements through the end of March that it remained “optimistic about J.C. Penney’s ability to weather this pandemic.”
“I saw no bankruptcy coming only the promise of turnaround and great news,” wrote shareholder David Dean of Baltimore, who submitted a letter to the court on June 3. “Now this bankruptcy filing. Who could have known.”
The case is J.C. Penney Company Inc., 20-20182, U.S. Bankruptcy Court for the Southern District of Texas (Corpus Christi)
— With assistance by Jeremy Hill
https://www.bloomberg.com/markets/fixed-income
Market observers worry that a new group of largely inexperienced stock investors is at risk for great financial harm.
Commenters like Jim Cramer have remarked that many novice investors use recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel stocks. These stocks have been pummeled by COVID concerns, but rebounded from very low prices to somewhat higher prices. The rebound was partly in response to infusions of federal cash and credit. Jim Cramer and others fretted that novice traders who relied on the recent upward trajectory of COVID vulnerable stocks risked disaster because of market ignorance.
Casey Primozic, whose company Robintrack follows behavior of novice investors, suggested in a CNBC interview that novice investors will often join what they sense is a growth trend in a stock, without worrying about business fundamentals like profitability.
Novice investors are subject to manipulation by sophisticated investors, according to Jim Cramer. He says that professionals on Wall Street have taken advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Many observers saw a ploy to snare gullible novice stock traders when Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares destined to be wiped out when Hertz’ bankruptcy case is finished. Investors promptly bid up Hertz by 68%. Hertz halted stock sales when staff members at the U.S. Securities and Exchange Commission raised legal issues.
A New York Times article explains that millions of individuals without stock trading experience have recently begun investing through a company called Robinhood, which has an “app” that makes trading particularly easy and cheap. The article says that “More than at any other retail brokerage firm, Robinhood’s users trade the riskiest products and at the fastest pace . . . .”
A Bankrate review of Robinhood says that “While investors can find free stock and ETF trades at most brokerages, the real differentiator for Robinhood is its free options trading. . . . Robinhood charges no per-contract fee.” Also, “Robinhood allows you to trade some cryptocurrencies commission-free, too.”
The New York Times article explains that Robinhood software coaches its investors on how to avoid government regulatory strictures that block the inexperienced from trading in options. The Robinhood app is organized so that customers who want to trade options answer just a few multiple-choice questions. The Times explains that “Beginners are legally barred from trading options, but those who click that they have no investing experience are coached by the app on how to change the answer to ‘not much’ experience. Then people can immediately begin trading.”
Such egging on of inexperienced investors by Robinhood and others seems undesirable, particularly since there are many unfortunate stories of novice investors who have been brought to financial ruin. It is hard not to agree with Jim Cramer’s conclusion that novice investors are subject to exploitation by unscrupulous people. Sometimes such exploitation will attract the attention of regulators, as happened with the Hertz offering. But it seems likely that much exploitative behavior will escape government scrutiny. And, of course, not all examples of aggressive selling to novice investors deserve government action: Novice investors have at least some obligation to exercise common sense.
Possible government action against exploitation of novice investors may be supplemented by industry self-regulation. In addition to being subject to SEC regulation, most brokerage firms voluntarily participate in self-regulatory organizations (SROs) like the Financial Industry Regulatory Authority (FINRA). Brokerages that are FINRA members submit to the organization's rules and regulations, which includes a transparent disclosure framework that protects investors. In an article which asks whether Robinhood is safe for investors, Investopedia points out that Robinhood maintains membership in FINRA.
By Don Allen Resnikoff
Citations:
https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html?searchResultPosition=1
https://www.cnbc.com/video/2020/07/08/robintrack-founder-casey-primozic-parses-through-latest-trading-trends.html
https://www.bankrate.com/investing/brokerage-reviews/robinhood/
https://www.investopedia.com/investing/is-robinhood-safe/
Bloomberg:
Amateur investors who loaded up on J.C. Penney Co. shares as the retailer went bankrupt are now pleading with a judge to spare them from a complete wipeout.
“I hope and pray for you to consider the shareholders,” wrote 50-year-old individual investor John Hardt in a letter dated May 25, one of dozens sent to the Corpus Christi, Texas-based court overseeing the case in recent months.
Hardt is part of a growing number of retail traders -- many driven by lockdown boredom and free online trading -- who have piled into the stock market. Speculation by amateurs is nothing new, but for the first time experts can recall, investors are buying shares of even bankrupt companies. Hertz Global Holdings Inc., oil driller Whiting Petroleum Corp. and J.C. Penney have all seen their stock price surge in recent sessions, despite being in Chapter 11.
Those gains almost always prove fleeting, leaving retail traders with little to show for their stakes other than an expensive lesson in the U.S. corporate bankruptcy process -- where shareholder value disappears almost as a rule. That’s because all creditors have to be made whole before equity owners get anything. For J.C. Penney investors, there’s little to suggest this time will prove any different.
A representative for the company declined to comment on the shareholder letters. An unrelated hearing scheduled for Monday may yield an update about extending the deadline for lenders to approve its turnaround plan.
“If there is any possible way -- any way -- to give a meaningful recovery to shareholders, we will fight for it,” Joshua Sussberg of Kirkland & Ellis, J.C. Penney’s bankruptcy lawyer, said at a June 9 hearing.
Mom-and-pop investors who insist on betting on struggling companies would be well advised to stay away from those in or near bankruptcy, said Fred Ringel, a partner and co-chair of the bankruptcy department at law firm Robinson Brog Leinwand Greene Genovese & Gluck.
“People who buy equity hoping that they’re not going to get wiped out in a bankruptcy just don’t understand the process,” Ringel said.
He added he’s been baffled to see retail investors putting cash into bankrupt stocks given the complexity of the restructuring process. “I don’t understand this phenomenon at all,” he said.
J.C. Penney filed for Chapter 11 in mid-May. After climbing as high as 67.9 cents last month, the company’s stock is trading at around 30 cents. Some of the retailer’s most junior debt -- which still ranks ahead of shares in the repayment line -- is quoted at less than 2 cents on the dollar. This implies extremely thin odds that bondholders will get repaid, and in turn that nothing will be left over for stockholders.
Hardt, when contacted by Bloomberg last week, said he had “zero knowledge of the bankruptcy process” before buying about 10,000 J.C. Penney shares. The Plano, Texas native said he’s already sold the position.
Several of the letters from J.C. Penney shareholders criticize the company’s failure so far to announce a buyer, after media reports cited several potential bidders, including Amazon.com Inc. Bloomberg reported in May on talks between Authentic Brands Group LLC and mall landlords Simon Property Group Inc. and Brookfield Property Partners LP to acquire the chain.
Retail investors hoping for a sale may have thought a buyer would pay cash for outstanding shares. Yet that’s practically unheard of in bankruptcy, where any asset value that remains after court costs belongs to lenders with senior collateral claims. Once they’re made whole, other creditors, including unsecured lenders and vendors are next in line. J.C. Penney entered bankruptcy with more than $2 billion in secured debt and $8 billion in total debt.
Some recent J.C. Penney investors said in interviews that that they bought shares on the expectation that the company would be able to rebound once stores shuttered by the Covid-19 outbreak were able to reopen, and therefore the retailer would be able to secure better terms in its restructuring negotiations than the typical Chapter 11 debtor.
The company has struggled for years, but analysts generally expected before the pandemic that it could hold out until at least 2021.
Some of the letters also criticize the decisions of corporate management and claim that Chief Executive Officer Jill Soltau offered false hope to investors. The company maintained in public statements through the end of March that it remained “optimistic about J.C. Penney’s ability to weather this pandemic.”
“I saw no bankruptcy coming only the promise of turnaround and great news,” wrote shareholder David Dean of Baltimore, who submitted a letter to the court on June 3. “Now this bankruptcy filing. Who could have known.”
The case is J.C. Penney Company Inc., 20-20182, U.S. Bankruptcy Court for the Southern District of Texas (Corpus Christi)
— With assistance by Jeremy Hill
https://www.bloomberg.com/markets/fixed-income
WSJ article on business fat cats who received PPP money
Excerpt:
By Cezary Podkul
, Juliet Chung
and Will Parker
July 7, 2020 7:33 am ET
The former U.S. operations of a sanctioned Russian bank, a hedge fund partly owned by one of the biggest private-equity firms in the world and a real-estate developer behind two of Manhattan’s most expensive condominium towers were among the financial firms that benefited from a government program designed to help small businesses weather the coronavirus pandemic.
The entities all received loans under the federal government’s Paycheck Protection Program. Since March, the program has extended about $521 billion out of more than $650 billion in authorized loans, but until now, the public hasn’t gotten a detailed look at who was benefitting from the cash.
That changed on Monday, when the Small Business Administration published the names of businesses that accounted for about three-fourths of the loan dollars distributed. While small family-owned businesses and nonprofits benefited from the aid, so did many Wall Street firms that potentially have other sources of cash and didn’t suffer like restaurants and retailers.
The Extell development Central Park Tower of luxury condos and a department store while it was being constructed last year; Extell said the recent federal Paycheck Protection Program allowed the firm to continue paying its employees.PHOTO: RICHARD B. LEVINE/ZUMA PRESS
“The PPP program was designed for small businesses that had to shut down and lose revenues because of the crisis,” said Marcus Stanley, policy director for Americans for Financial Reform, which advocates for tighter financial regulations. “The markets never shut down at any point.”
Loan recipients say they were justified to seek the aid and did so within the spirit and guidelines of the program. Xtellus Capital Partners, the former U.S. operations of Russian bank VTB Capital, said the pandemic hurt trading volumes, which made its effort to diversify after its 2018 spinoff riskier. VTB has been under U.S. sanctions for several years. Xtellus got a loan between $150,000 to $350,000, according to the SBA, which only disclosed loan amount ranges.
“It’s been a big help. We haven’t had to let anyone go,” Xtellus Chief Executive Paul Swigart said in an interview.
More than a dozen floor brokerages at the New York Stock Exchange got loans of at least $150,000, Monday’s disclosures showed. NYSE floor brokers, who often work for smaller firms of a few dozen employees, were unable to work for about two months starting in March when the exchange shut down floor trading to prevent the spread of the virus.
Excerpt:
By Cezary Podkul
, Juliet Chung
and Will Parker
July 7, 2020 7:33 am ET
The former U.S. operations of a sanctioned Russian bank, a hedge fund partly owned by one of the biggest private-equity firms in the world and a real-estate developer behind two of Manhattan’s most expensive condominium towers were among the financial firms that benefited from a government program designed to help small businesses weather the coronavirus pandemic.
The entities all received loans under the federal government’s Paycheck Protection Program. Since March, the program has extended about $521 billion out of more than $650 billion in authorized loans, but until now, the public hasn’t gotten a detailed look at who was benefitting from the cash.
That changed on Monday, when the Small Business Administration published the names of businesses that accounted for about three-fourths of the loan dollars distributed. While small family-owned businesses and nonprofits benefited from the aid, so did many Wall Street firms that potentially have other sources of cash and didn’t suffer like restaurants and retailers.
The Extell development Central Park Tower of luxury condos and a department store while it was being constructed last year; Extell said the recent federal Paycheck Protection Program allowed the firm to continue paying its employees.PHOTO: RICHARD B. LEVINE/ZUMA PRESS
“The PPP program was designed for small businesses that had to shut down and lose revenues because of the crisis,” said Marcus Stanley, policy director for Americans for Financial Reform, which advocates for tighter financial regulations. “The markets never shut down at any point.”
Loan recipients say they were justified to seek the aid and did so within the spirit and guidelines of the program. Xtellus Capital Partners, the former U.S. operations of Russian bank VTB Capital, said the pandemic hurt trading volumes, which made its effort to diversify after its 2018 spinoff riskier. VTB has been under U.S. sanctions for several years. Xtellus got a loan between $150,000 to $350,000, according to the SBA, which only disclosed loan amount ranges.
“It’s been a big help. We haven’t had to let anyone go,” Xtellus Chief Executive Paul Swigart said in an interview.
More than a dozen floor brokerages at the New York Stock Exchange got loans of at least $150,000, Monday’s disclosures showed. NYSE floor brokers, who often work for smaller firms of a few dozen employees, were unable to work for about two months starting in March when the exchange shut down floor trading to prevent the spread of the virus.
About Joseph Corcoran, developer of mixed use housing in Boston
Mr. Corcoran is the subject of a recent obituary in the Wall Street Journal that talks of Mr. Corcoran's role in developing mixed use housing in Boston.
The article explains that the mixed use project Harbor Point was completed in 1990 at a cost of more than $250 million. Harbor Point created a neighborhood where lawyers and graduate students lived alongside people qualifying for subsidized rent. They shared swimming pools, a gym and views of Boston’s harbor and skyline.
Mr. Corcoran died June 3 of congestive heart failure at his home in Milton, Mass. He was 84. Over nearly five decades, his firm built and managed more than 20,000 housing units in 15 states, his family said.
His mixed-income projects relied on government rental subsidies and tax credits, as well as his patience in negotiating with local, state and federal officials. Perhaps most crucial was his ability to persuade poor residents of neighborhoods he was proposing to redevelop that they wouldn’t be pushed out. At Harbor Point, they were at the table as redevelopment plans were worked out.
“The political establishment can ignore us as money-hungry developers, but they can’t ignore the plight of these people who want something better,” he told Jane Roessner, author of “A Decent Place to Live,” a history of the Columbia Point makeover.
The Wall Street Journal article [paywalled] is at https://www.wsj.com/articles/joseph-corcoran-rescued-a-squalid-boston-housing-project-11592485201?mod=lead_feature_below_a_pos1 Author Roessner was a speaker on a panel that put the Columbia Point project in a broader context. A video of the panel presentation is at https://www.youtube.com/watch?reload=9&time_continue=8&v=QYiVxfSlPFU&feature=emb_logo
Mr. Corcoran is the subject of a recent obituary in the Wall Street Journal that talks of Mr. Corcoran's role in developing mixed use housing in Boston.
The article explains that the mixed use project Harbor Point was completed in 1990 at a cost of more than $250 million. Harbor Point created a neighborhood where lawyers and graduate students lived alongside people qualifying for subsidized rent. They shared swimming pools, a gym and views of Boston’s harbor and skyline.
Mr. Corcoran died June 3 of congestive heart failure at his home in Milton, Mass. He was 84. Over nearly five decades, his firm built and managed more than 20,000 housing units in 15 states, his family said.
His mixed-income projects relied on government rental subsidies and tax credits, as well as his patience in negotiating with local, state and federal officials. Perhaps most crucial was his ability to persuade poor residents of neighborhoods he was proposing to redevelop that they wouldn’t be pushed out. At Harbor Point, they were at the table as redevelopment plans were worked out.
“The political establishment can ignore us as money-hungry developers, but they can’t ignore the plight of these people who want something better,” he told Jane Roessner, author of “A Decent Place to Live,” a history of the Columbia Point makeover.
The Wall Street Journal article [paywalled] is at https://www.wsj.com/articles/joseph-corcoran-rescued-a-squalid-boston-housing-project-11592485201?mod=lead_feature_below_a_pos1 Author Roessner was a speaker on a panel that put the Columbia Point project in a broader context. A video of the panel presentation is at https://www.youtube.com/watch?reload=9&time_continue=8&v=QYiVxfSlPFU&feature=emb_logo
SBA changes course, will reveal some PPP loan data
The U.S. Small Business Administration and Treasury Department announced Friday that they would release a data set showing which businesses received many taxpayer-funded Paycheck Protection Program loans, walking back an earlier stance that all of the business names would remain hidden because the Trump administration considered them proprietary.
The disclosures will include the names of recipients who received loans of more than $150,000 and it will also reveal a dollar range for each loan, such as whether it was between $1 million and $2 million. Precise dollar amounts will not be disclosed, the Trump administration said. Borrowers who obtained loans of less than $150,000 will not have their identities disclosed. The administration said nearly 75 percent of all loans were for $150,000 or more, so most borrowers would be revealed.
https://www.washingtonpost.com/business/2020/06/19/treasury-sba-ppp-disclosure/
The U.S. Small Business Administration and Treasury Department announced Friday that they would release a data set showing which businesses received many taxpayer-funded Paycheck Protection Program loans, walking back an earlier stance that all of the business names would remain hidden because the Trump administration considered them proprietary.
The disclosures will include the names of recipients who received loans of more than $150,000 and it will also reveal a dollar range for each loan, such as whether it was between $1 million and $2 million. Precise dollar amounts will not be disclosed, the Trump administration said. Borrowers who obtained loans of less than $150,000 will not have their identities disclosed. The administration said nearly 75 percent of all loans were for $150,000 or more, so most borrowers would be revealed.
https://www.washingtonpost.com/business/2020/06/19/treasury-sba-ppp-disclosure/
News Media Cartels are Bad News for Consumers
By John M. Yun (George Mason University)
The Journalism Competition and Preservation Act was introduced with the professed objective of allowing small newspaper publishers to band together in negotiations with Facebook and Google in order to secure a more fair and equitable distribution of profits from online advertising. As virtuous as that may sound, the reality is quite different. The bill would allow all online newspaper publishers (including conglomerates such as the News Corporation, AT&T, and Viacom) to form a cartel to fix prices and other terms of trade. This is not a bill aimed at small publishers, nor is it a bill aimed at ensuring “quality” (which is often a red herring in antitrust as it invokes a desire for incumbents to create artificial barriers to entry). Rather, the bill would create antitrust immunity for colluding media conglomerates. In this short article, we first describe precisely what is in the bill. Next, we describe the structure of the online news market, and the role that online platforms play in distributing news content. Finally, we detail the impact that such collusion would have on the market.
Drawn from https://www.competitionpolicyinternational.com/wp-content/uploads/2019/04/North-America-Column-April-2019-5-Full.pdf
By John M. Yun (George Mason University)
The Journalism Competition and Preservation Act was introduced with the professed objective of allowing small newspaper publishers to band together in negotiations with Facebook and Google in order to secure a more fair and equitable distribution of profits from online advertising. As virtuous as that may sound, the reality is quite different. The bill would allow all online newspaper publishers (including conglomerates such as the News Corporation, AT&T, and Viacom) to form a cartel to fix prices and other terms of trade. This is not a bill aimed at small publishers, nor is it a bill aimed at ensuring “quality” (which is often a red herring in antitrust as it invokes a desire for incumbents to create artificial barriers to entry). Rather, the bill would create antitrust immunity for colluding media conglomerates. In this short article, we first describe precisely what is in the bill. Next, we describe the structure of the online news market, and the role that online platforms play in distributing news content. Finally, we detail the impact that such collusion would have on the market.
Drawn from https://www.competitionpolicyinternational.com/wp-content/uploads/2019/04/North-America-Column-April-2019-5-Full.pdf
Hertz Global Holdings Inc. suspended plans to raise cash by selling new shares that the bankrupt car renter described as potentially “worthless,” after its proposal failed to pass muster with regulators.
The company halted sales while it deals with issues brought up by staff members at the U.S. Securities and Exchange Commission, according to a filing. The stock, whose trading had been halted earlier in the day, ended the regular trading session up 5 cents at $2, while ilts bonds tumbled.
From: https://www.msn.com/en-us/money/topstocks/hertz-suspends-sale-of-worthless-stock-amid-sec-scrutiny/ar-BB15CODb
The company halted sales while it deals with issues brought up by staff members at the U.S. Securities and Exchange Commission, according to a filing. The stock, whose trading had been halted earlier in the day, ended the regular trading session up 5 cents at $2, while ilts bonds tumbled.
From: https://www.msn.com/en-us/money/topstocks/hertz-suspends-sale-of-worthless-stock-amid-sec-scrutiny/ar-BB15CODb
Is Hertz using bankruptcy Court to exploit gullible investors?
Commenters like Jim Cramer have remarked that many novice investors are taking advantage of recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel sector stocks. These stocks have been pummeled by COVID concerns; but rebounded from very low prices to somewhat higher prices. The rebound is partly in response to infusions of federal cash and credit. Jim Cramer and others have fretted that novice traders who rely on the recent upward trajectory of COVID vulnerable stocks risk disaster because of market ignorance.
Also, novice investors are subject to manipulation by sophisticated investors, according to Cramer. He says that professionals on Wall Street are taking advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Now, in what Cramer and some others see as yet another ploy to snare gullible novice stock traders, Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares. Hertz readily concedes those might wind up worthless, too. The stock appears destined to be wiped out when its bankruptcy case is finished. Investors promptly bid up Hertz by 68%.
The car rental company wants to take advantage of the quixotic rally in its stock by offering as many as 246.78 million common shares, according to a court filing. The proceeds would provide some much-needed working capital while Hertz tries to dig out from massive debts that forced it into court protection.
The filing explains that “The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the Debtors to raise capital on terms that are far superior to any debtor-in-possession financing.”
On Friday, June 12, the bankruptcy court approved Hertz’s request to sell up to $1 billion in stock.
But the risk to novice investors plainly is great. Investors who own stock in bankrupt firms are last in line as the company pays back creditors like banks and bondholders. Shares of a bankrupt company are typically wiped out, and if new stock is issued there is no guarantee the prior shareholders will receive new shares.
Commenters have not been sympathetic. One said: “Failing rental car company Hertz‘s latest Hail Mary might be its most dastardly yet: Exploit newly-found popularity among Robinhood traders to sell $1 billion worth of potentially worthless stock.” [i]
According to Marketwatch, Amy Lynch, a former U.S. Securities and Exchange Commission staffer, said that the proposed stock sale needs to spell out that “any money put into this company could be a total loss.” She explained that “The disclosures would have to be air tight in order to avoid lawsuits in the future.”
CNBC’s Jim Cramer was even more apoplectic than usual, comparing Hertz promoters to P.T. Barnum.
Cramer warns new investors about the serious risk of buying the stock of companies that filed for bankruptcy such as Hertz.
“You may think a stock like Hertz . . .looks like a steal at these levels, but the only people being robbed here are you the buyers,” he said.
Cramer said it is “highly unlikely” that Hertz, as a business, goes away in its bankruptcy. But the company’s bondholders will be the first in line to get a piece of the post-bankruptcy Hertz. Owners of the common stock, on the other hand, “are at the bottom of the bankruptcy pecking order,” Cramer said.
“[Y]ou’re buying the old Hertz with $19 billion in debt that it can’t repay,” Cramer explained. “Since the creditors can’t collect, they’re going to seize the collateral, which is the business. So this $4 stock will most likely just be cancelled.”
That is a reality well-known by people like legendary activist investor Carl Icahn, Cramer said. Icahn held a nearly 39% stake in Hertz but dumped it last month after the company filed for bankruptcy.
“Believe me, if there was a real chance the common stock would be worth anything, Icahn would’ve stuck around. He didn’t,” Cramer said.
Cramer also said if he were running the bankruptcy court, he would prevent shares of Hertz from being traded, helping “keep inexperienced investors from losing money on it.”
-by Don Allen Resnikoff
A copy of the Hertz filing is here:
https://restructuring.primeclerk.com/hertz/Home-DownloadPDF?id1=NDE4NzYy&id2=0
[i] https://usa-newsposts.com/technology/bankrupt-hertz-targets-robinhood-traders-in-plot-to-dump-1-billion-in-stock/
Commenters like Jim Cramer have remarked that many novice investors are taking advantage of recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel sector stocks. These stocks have been pummeled by COVID concerns; but rebounded from very low prices to somewhat higher prices. The rebound is partly in response to infusions of federal cash and credit. Jim Cramer and others have fretted that novice traders who rely on the recent upward trajectory of COVID vulnerable stocks risk disaster because of market ignorance.
Also, novice investors are subject to manipulation by sophisticated investors, according to Cramer. He says that professionals on Wall Street are taking advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Now, in what Cramer and some others see as yet another ploy to snare gullible novice stock traders, Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares. Hertz readily concedes those might wind up worthless, too. The stock appears destined to be wiped out when its bankruptcy case is finished. Investors promptly bid up Hertz by 68%.
The car rental company wants to take advantage of the quixotic rally in its stock by offering as many as 246.78 million common shares, according to a court filing. The proceeds would provide some much-needed working capital while Hertz tries to dig out from massive debts that forced it into court protection.
The filing explains that “The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the Debtors to raise capital on terms that are far superior to any debtor-in-possession financing.”
On Friday, June 12, the bankruptcy court approved Hertz’s request to sell up to $1 billion in stock.
But the risk to novice investors plainly is great. Investors who own stock in bankrupt firms are last in line as the company pays back creditors like banks and bondholders. Shares of a bankrupt company are typically wiped out, and if new stock is issued there is no guarantee the prior shareholders will receive new shares.
Commenters have not been sympathetic. One said: “Failing rental car company Hertz‘s latest Hail Mary might be its most dastardly yet: Exploit newly-found popularity among Robinhood traders to sell $1 billion worth of potentially worthless stock.” [i]
According to Marketwatch, Amy Lynch, a former U.S. Securities and Exchange Commission staffer, said that the proposed stock sale needs to spell out that “any money put into this company could be a total loss.” She explained that “The disclosures would have to be air tight in order to avoid lawsuits in the future.”
CNBC’s Jim Cramer was even more apoplectic than usual, comparing Hertz promoters to P.T. Barnum.
Cramer warns new investors about the serious risk of buying the stock of companies that filed for bankruptcy such as Hertz.
“You may think a stock like Hertz . . .looks like a steal at these levels, but the only people being robbed here are you the buyers,” he said.
Cramer said it is “highly unlikely” that Hertz, as a business, goes away in its bankruptcy. But the company’s bondholders will be the first in line to get a piece of the post-bankruptcy Hertz. Owners of the common stock, on the other hand, “are at the bottom of the bankruptcy pecking order,” Cramer said.
“[Y]ou’re buying the old Hertz with $19 billion in debt that it can’t repay,” Cramer explained. “Since the creditors can’t collect, they’re going to seize the collateral, which is the business. So this $4 stock will most likely just be cancelled.”
That is a reality well-known by people like legendary activist investor Carl Icahn, Cramer said. Icahn held a nearly 39% stake in Hertz but dumped it last month after the company filed for bankruptcy.
“Believe me, if there was a real chance the common stock would be worth anything, Icahn would’ve stuck around. He didn’t,” Cramer said.
Cramer also said if he were running the bankruptcy court, he would prevent shares of Hertz from being traded, helping “keep inexperienced investors from losing money on it.”
-by Don Allen Resnikoff
A copy of the Hertz filing is here:
https://restructuring.primeclerk.com/hertz/Home-DownloadPDF?id1=NDE4NzYy&id2=0
[i] https://usa-newsposts.com/technology/bankrupt-hertz-targets-robinhood-traders-in-plot-to-dump-1-billion-in-stock/
California & Washington Are Scrutinizing Amazon For Abuse Of Power
June 14, 2020
State investigators in California and Washington have been looking into whether Amazon abuses its power over sellers on the tech giant’s site, according to people involved with the inquiry.
In the last several months, California has asked about the company’s private label products and whether it uses data from sellers to determine which products it sells, according to two people, who spoke on condition of anonymity out of fear of retribution by the company.
The Washington attorney general’s office has also been interested in whether Amazon makes it harder for sellers to list their products on other websites, according to correspondence viewed by The New York Times.
See https://www.nytimes.com/2020/06/12/technology/state-inquiry-antitrust-amazon.html
June 14, 2020
State investigators in California and Washington have been looking into whether Amazon abuses its power over sellers on the tech giant’s site, according to people involved with the inquiry.
In the last several months, California has asked about the company’s private label products and whether it uses data from sellers to determine which products it sells, according to two people, who spoke on condition of anonymity out of fear of retribution by the company.
The Washington attorney general’s office has also been interested in whether Amazon makes it harder for sellers to list their products on other websites, according to correspondence viewed by The New York Times.
See https://www.nytimes.com/2020/06/12/technology/state-inquiry-antitrust-amazon.html
Bumblebee tuna Chris Lischewski sentenced to 40 months in prison, USD 100,000 fine
By
Chris Chase
June 16, 2020
Former Bumble Bee President and CEO Chris Lischewski was sentenced to 40 months in prison and given a USD 100,000 fine (EUR 88,000) as part of his role in a conspiracy to fix the prices of canned tuna sold in the United States from 2011 to 2013.
The sentence comes after a three-week-long trial in December ended with a jury finding Lischewski guilty of being involved in a scheme between Bumble Bee, StarKist, and Chicken of the Sea to fix the price of tuna. Lischewski was facing a maximum penalty of 10 years in prison and a fine of USD 1 million (EUR 887,500).
The sentence, according to U.S. District Court Judge Edward M. Chen, is in accordance to the severity of the conspiracy, which was “widespread, pervasive, and affecting the entire industry.”
“The conduct was deliberate, it was planned, it was sustained, over a three-year period,” Chen said. “This was not a rash act of having to commit a crime under distress, under episodic circumstances as we see sometimes, this was a contemplated and deliberate plan.”
The sentencing came after an over two-hour hearing, in which part of the sentencing hinged on the qualitative affect that the price-fixing conspiracy had on the economy. California’s penal code includes stipulations on how sentencing should be calculated based on its financial impact.
Excerpt from https://www.seafoodsource.com/news/business-finance/chris-lischewski-sentenced-to-40-months-in-prison-usd-100-000-fine
By
Chris Chase
June 16, 2020
Former Bumble Bee President and CEO Chris Lischewski was sentenced to 40 months in prison and given a USD 100,000 fine (EUR 88,000) as part of his role in a conspiracy to fix the prices of canned tuna sold in the United States from 2011 to 2013.
The sentence comes after a three-week-long trial in December ended with a jury finding Lischewski guilty of being involved in a scheme between Bumble Bee, StarKist, and Chicken of the Sea to fix the price of tuna. Lischewski was facing a maximum penalty of 10 years in prison and a fine of USD 1 million (EUR 887,500).
The sentence, according to U.S. District Court Judge Edward M. Chen, is in accordance to the severity of the conspiracy, which was “widespread, pervasive, and affecting the entire industry.”
“The conduct was deliberate, it was planned, it was sustained, over a three-year period,” Chen said. “This was not a rash act of having to commit a crime under distress, under episodic circumstances as we see sometimes, this was a contemplated and deliberate plan.”
The sentencing came after an over two-hour hearing, in which part of the sentencing hinged on the qualitative affect that the price-fixing conspiracy had on the economy. California’s penal code includes stipulations on how sentencing should be calculated based on its financial impact.
Excerpt from https://www.seafoodsource.com/news/business-finance/chris-lischewski-sentenced-to-40-months-in-prison-usd-100-000-fine
From DCAG Racine's budget request memo:
This week, I testified before the Council in support of OAG’s fiscal year 2021 budget proposal. I made clear that OAG—an agency that not only saves revenue but also generates revenue—is committed to helping the District weather a significant budget deficit. In fiscal year 2019, for example, OAG recovered over $10.8 million in settlements and contributed an additional $184.1 million in tax revenue preserved and collections for District children. To cut back on budget expenses, I ordered $1.5 million of OAG’s 2020 budget to be returned to the District’s General Fund and voluntarily imposed a spending freeze on our agency. These measures reflect OAG’s commitment to the District’s financial well-being.
OAG has also been working around the clock to educate residents about their rights, respond to a surge of nearly 800 COVID-related consumer complaints, enforce protections against price gouging, stand up for tenants and vulnerable residents, fight wage theft, enforce the District’s environmental laws, and protect public safety. Our Cure the Streets team continues to mitigate violence in their neighborhoods, while also partnering with community organizations to deliver food and educational materials to underserved residents. As the nation cries out for new approaches to public safety, funding these community-based violence interruption efforts is more important than ever.
I hope you'll support OAG’s budget that promotes the public interest by submitting comments to the Council’s Committee on the Judiciary and Public Safety by June 16, 2020.
This week, I testified before the Council in support of OAG’s fiscal year 2021 budget proposal. I made clear that OAG—an agency that not only saves revenue but also generates revenue—is committed to helping the District weather a significant budget deficit. In fiscal year 2019, for example, OAG recovered over $10.8 million in settlements and contributed an additional $184.1 million in tax revenue preserved and collections for District children. To cut back on budget expenses, I ordered $1.5 million of OAG’s 2020 budget to be returned to the District’s General Fund and voluntarily imposed a spending freeze on our agency. These measures reflect OAG’s commitment to the District’s financial well-being.
OAG has also been working around the clock to educate residents about their rights, respond to a surge of nearly 800 COVID-related consumer complaints, enforce protections against price gouging, stand up for tenants and vulnerable residents, fight wage theft, enforce the District’s environmental laws, and protect public safety. Our Cure the Streets team continues to mitigate violence in their neighborhoods, while also partnering with community organizations to deliver food and educational materials to underserved residents. As the nation cries out for new approaches to public safety, funding these community-based violence interruption efforts is more important than ever.
I hope you'll support OAG’s budget that promotes the public interest by submitting comments to the Council’s Committee on the Judiciary and Public Safety by June 16, 2020.
AGs v.Generics; 3rd Price-Fixing Complaint
State enforcers added to their price-fixing case against generic drugmakers with a third complaint n Connecticut federal court accusing 26 companies and 10 individuals of "rampant" collusion on topically applied treatments.
View Complaint: https://www.nj.gov/oag/newsreleases20/Public-Derm_Complaint.pdf
State enforcers added to their price-fixing case against generic drugmakers with a third complaint n Connecticut federal court accusing 26 companies and 10 individuals of "rampant" collusion on topically applied treatments.
View Complaint: https://www.nj.gov/oag/newsreleases20/Public-Derm_Complaint.pdf
Utah AG Joins Calls For Meatpacking Probe
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June 9, 2020
Utah’s state Attorney General Sean Reyes wants the Department of Justice to join Utah and other states to investigate suspected price fixing in the beleaguered meatpacking industry.
In a letter to US Attorney General Willam Barr, Reyes wrote that the state has become aware of complaints from beef growers and feeders regarding apparent manipulation of cattle pricing by processing and packing plants.
“Especially now, we need to encourage fair competition in the meatpacking industry and protect consumers,” Reyes wrote.
The Utah AG's letter is here: https://attorneygeneral.utah.gov/wp-content/uploads/2020/06/2020-05-21-Beef-Packing-Industry-Ltr-to-Attorney-General-William-Barr.pdf
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June 9, 2020
Utah’s state Attorney General Sean Reyes wants the Department of Justice to join Utah and other states to investigate suspected price fixing in the beleaguered meatpacking industry.
In a letter to US Attorney General Willam Barr, Reyes wrote that the state has become aware of complaints from beef growers and feeders regarding apparent manipulation of cattle pricing by processing and packing plants.
“Especially now, we need to encourage fair competition in the meatpacking industry and protect consumers,” Reyes wrote.
The Utah AG's letter is here: https://attorneygeneral.utah.gov/wp-content/uploads/2020/06/2020-05-21-Beef-Packing-Industry-Ltr-to-Attorney-General-William-Barr.pdf
Food accessibility challenges are growing.
In Georgia, the number of residents now living in "food insecure" areas has jumped 69% since the beginning of the pandemic, according to data firm Urban Footprint. The firm uses an index, including jobless claims, pre-existing health conditions, and access to grocery stores and healthy food, to measure food security — or "reliable access to a sufficient quantity of affordable, nutritionally adequate food."
In Louisiana, Mississippi and Kentucky the number of residents living in food insecure areas has spiked 43%, 36% and 118% respectively, driven by the rise in unemployment, according to the analysis.
From https://www.cnn.com/2020/06/09/business/food-deserts-coronavirus-grocery-stores/index.html
In Georgia, the number of residents now living in "food insecure" areas has jumped 69% since the beginning of the pandemic, according to data firm Urban Footprint. The firm uses an index, including jobless claims, pre-existing health conditions, and access to grocery stores and healthy food, to measure food security — or "reliable access to a sufficient quantity of affordable, nutritionally adequate food."
In Louisiana, Mississippi and Kentucky the number of residents living in food insecure areas has spiked 43%, 36% and 118% respectively, driven by the rise in unemployment, according to the analysis.
From https://www.cnn.com/2020/06/09/business/food-deserts-coronavirus-grocery-stores/index.html
COVID-19 pandemic hazard pay has started to disappear for workers.
New research by the New York-based not-for-profit Just Capital found that 12% of companies gave their workers this extra bit of cash, because the employees were working on the frontlines during the height of spread of COVID-19. Since then, four of the biggest employers—Walmart, Kroger, Lowe’s, and Costco—have stopped doing so.
From https://www.fastcompany.com/90514509/what-happened-to-covid-19-hazard-pay-walmart-kroger-and-others-called-out-in-new-report
New research by the New York-based not-for-profit Just Capital found that 12% of companies gave their workers this extra bit of cash, because the employees were working on the frontlines during the height of spread of COVID-19. Since then, four of the biggest employers—Walmart, Kroger, Lowe’s, and Costco—have stopped doing so.
From https://www.fastcompany.com/90514509/what-happened-to-covid-19-hazard-pay-walmart-kroger-and-others-called-out-in-new-report
Oil and gas materials manufacturer NRI ATM accused a rival company of poaching two of its essential employees and using them to steal intellectual property in a complaint filed Friday in a Texas federal court.
Read more at: https://www.law360.com/articles/1280408/energy-tools-co-says-rival-poached-employees-stole-ip?copied=
Read more at: https://www.law360.com/articles/1280408/energy-tools-co-says-rival-poached-employees-stole-ip?copied=
AG Racine Sues Predatory Online Lender For Illegal High-Interest Loans To District Consumers
June 5, 2020
Elevate Misleadingly Marketed High-Cost Loans, Ensnared 2,500+ Residents with Interest Rates Well in Excess of District’s Cap
WASHINGTON, D.C. — Attorney General Karl A. Racine today filed a lawsuit against Elevate, an online lender, for deceptively marketing high-cost loans carrying interest rates far above the District’s cap on interest rates. Elevate is not a licensed moneylender in the District, but offered two kinds of short-term loan products carrying interest rates of between 99 and 251 percent, or up to 42 times the legal limit. District law sets the maximum interest rates that lenders can charge at 6 percent or 24 percent per year, depending on the type of loan contract. Although the company touted its product as less expensive than payday loans, payday loans are illegal in the District. Over roughly two years, Elevate made 2,551 loans to District consumers and collected millions of dollars in interest. Following a cease and desist letter sent to the company in April 2020, OAG has filed suit to permanently stop Elevate from engaging in misleading business practices, require Elevate to void the loans made to District residents, return interest paid by consumers as restitution, and pay civil penalties.
“District law sets maximum interest rates that lenders can charge to protect residents from falling prey to unscrupulous, exploitative lenders,” said AG Racine. “Elevate misrepresented the nature of their loans—which had interest rates that ran up to 42 times over the District’s interest caps. By actively encouraging and participating in making loans at illegally high interest rates, Elevate unlawfully burdened over 2,500 financially vulnerable District residents with millions of dollars of debt. We’re suing to protect DC residents from being on the hook for these illegal loans and to ensure that Elevate permanently ceases its business activities in the District.”
A copy of the complaint is available at: https://oag.dc.gov/sites/default/files/2020-06/Elevate-Complaint.pdf
From https://oag.dc.gov/release/ag-racine-sues-predatory-online-lender-illegal
June 5, 2020
Elevate Misleadingly Marketed High-Cost Loans, Ensnared 2,500+ Residents with Interest Rates Well in Excess of District’s Cap
WASHINGTON, D.C. — Attorney General Karl A. Racine today filed a lawsuit against Elevate, an online lender, for deceptively marketing high-cost loans carrying interest rates far above the District’s cap on interest rates. Elevate is not a licensed moneylender in the District, but offered two kinds of short-term loan products carrying interest rates of between 99 and 251 percent, or up to 42 times the legal limit. District law sets the maximum interest rates that lenders can charge at 6 percent or 24 percent per year, depending on the type of loan contract. Although the company touted its product as less expensive than payday loans, payday loans are illegal in the District. Over roughly two years, Elevate made 2,551 loans to District consumers and collected millions of dollars in interest. Following a cease and desist letter sent to the company in April 2020, OAG has filed suit to permanently stop Elevate from engaging in misleading business practices, require Elevate to void the loans made to District residents, return interest paid by consumers as restitution, and pay civil penalties.
“District law sets maximum interest rates that lenders can charge to protect residents from falling prey to unscrupulous, exploitative lenders,” said AG Racine. “Elevate misrepresented the nature of their loans—which had interest rates that ran up to 42 times over the District’s interest caps. By actively encouraging and participating in making loans at illegally high interest rates, Elevate unlawfully burdened over 2,500 financially vulnerable District residents with millions of dollars of debt. We’re suing to protect DC residents from being on the hook for these illegal loans and to ensure that Elevate permanently ceases its business activities in the District.”
A copy of the complaint is available at: https://oag.dc.gov/sites/default/files/2020-06/Elevate-Complaint.pdf
From https://oag.dc.gov/release/ag-racine-sues-predatory-online-lender-illegal
Read COVID tracing employee lawsuit against Amazon
https://www.publicjustice.net/wp-content/uploads/2020/06/Palmer-v.-Amazon-filed-complaint.pdf
"This case is about Amazon’s failures to comply with New York law and state and federal public health guidance during the COVID-19 pandemic at the JFK8 facility. "
https://www.publicjustice.net/wp-content/uploads/2020/06/Palmer-v.-Amazon-filed-complaint.pdf
"This case is about Amazon’s failures to comply with New York law and state and federal public health guidance during the COVID-19 pandemic at the JFK8 facility. "
CNBC's Jim Cramer explains that the rising stock market is about the strength of large dominant companies, and does not reflect the poorly performing main street economy of struggling small businesses
https://www.youtube.com/watch?v=PKGDdvRBezQ
Martha White makes a similar point:
The divide between Wall Street and Main Street has grown sharply in recent weeks, amid the coronavirus pandemic and widespread civil unrest. To many, the market’s rise appeared as both cause and symptom of the widening gap between the country's haves and have-nots.
The Dow Jones Industrial Average rose by more than 400 points on Wednesday, with the S&P 500 now recovering a full 40 percent from its March lows. Yet millions of workers and small business owners are struggling to cope with the one-two punch of an economically devastating pandemic and unrest following the death of George Floyd at the hands of Minneapolis police that have filled America’s TV screens and news feeds with images of burned police cars, smashed store windows and looting in cities across the country.
“The stock market represents the fortunes of the fortunate… consolidating their power over the economy,” said Mark Zandi, chief economist at Moody’s Analytics. “As long as they feel like the economy isn't going to be disrupted significantly by the riots, they’re not going to price that in the stock market,” he said.
From https://www.nbcnews.com/business/markets/why-wall-street-soaring-while-main-street-burning-n1223506
Linda Greenhouse on a politically partisan US Supreme Court
Excerpt from Greenhouse opinion oiece at https://www.nytimes.com/2020/06/04/opinion/supreme-court-religion-coronavirus.html?action=click&module=Opinion&pgtype=Homepage:
The Supreme Court made the indisputably right call last week when it refused to block California from limiting attendance at religious services in an effort to control the spread of Covid-19.
A Southern California church, represented by a Chicago-based organization, the Thomas More Society, which most often defends anti-abortion activists, had sought the justices’ intervention with the argument that by limiting worshipers to the lesser of 25 percent of building capacity or 100 people, while setting a 50 percent occupancy cap on retail stores, California was discriminating against religion in violation of the Constitution’s Free Exercise Clause.
Given the obvious difference between walking through a store and sitting among fellow worshipers for an hour or more, as well as the documented spread of the virus through church attendance in such places as Sacramento (71 cases), Seattle (32 cases) and South Korea (over 5,000 cases traced to one person at a religious service), California’s limits are both sensitive and sensible, hardly the basis for constitutional outrage or judicial second-guessing.
So why did the court’s order, issued as midnight approached on Friday night, fill me with dread rather than relief?
It was because in a ruling that should have been unanimous, the vote was 5 to 4. And it was because of who the four dissenters were: the four most conservative justices, . . .
* * *
The U.S. Supreme Court Order Greenhouse discusses is here: https://www.supremecourt.gov/opinions/19pdf/19a1044_pok0.pdf
Excerpt from Greenhouse opinion oiece at https://www.nytimes.com/2020/06/04/opinion/supreme-court-religion-coronavirus.html?action=click&module=Opinion&pgtype=Homepage:
The Supreme Court made the indisputably right call last week when it refused to block California from limiting attendance at religious services in an effort to control the spread of Covid-19.
A Southern California church, represented by a Chicago-based organization, the Thomas More Society, which most often defends anti-abortion activists, had sought the justices’ intervention with the argument that by limiting worshipers to the lesser of 25 percent of building capacity or 100 people, while setting a 50 percent occupancy cap on retail stores, California was discriminating against religion in violation of the Constitution’s Free Exercise Clause.
Given the obvious difference between walking through a store and sitting among fellow worshipers for an hour or more, as well as the documented spread of the virus through church attendance in such places as Sacramento (71 cases), Seattle (32 cases) and South Korea (over 5,000 cases traced to one person at a religious service), California’s limits are both sensitive and sensible, hardly the basis for constitutional outrage or judicial second-guessing.
So why did the court’s order, issued as midnight approached on Friday night, fill me with dread rather than relief?
It was because in a ruling that should have been unanimous, the vote was 5 to 4. And it was because of who the four dissenters were: the four most conservative justices, . . .
* * *
The U.S. Supreme Court Order Greenhouse discusses is here: https://www.supremecourt.gov/opinions/19pdf/19a1044_pok0.pdf
Workers Fearful of the Coronavirus Are Getting Fired and Losing Their Benefits
Thousands who refuse to return to work are being reported to the state to have their unemployment benefits potentially revoked
https://www.nytimes.com/2020/06/04/us/virus-unemployment-fired.html?action=click&module=Top%20Stories&pgtype=Homepage
Thousands who refuse to return to work are being reported to the state to have their unemployment benefits potentially revoked
https://www.nytimes.com/2020/06/04/us/virus-unemployment-fired.html?action=click&module=Top%20Stories&pgtype=Homepage
The Senate approved a broad set of changes to the Small Business Administration's Paycheck Protection Program Wednesday evening, making the program's lending terms more favorable to restaurants, retailers and other businesses.
Among the changes, the legislation extends the “covered period” under which small businesses can spend PPP loan proceeds from eight weeks to 24 weeks. The bipartisan bill, titled the Paycheck Protection Program Flexibility Act of 2020, was passed by the House of Representatives on May 28. It now heads to President Trump for his signature.
Details are here: https://www.bizjournals.com/bizjournals/news/2020/06/03/congress-ppp-loan-change-bill-passes.html?
The US is No Longer the Authority Figure for Multinational Mergers
Excerpt from https://moginrubin.com/end-of-an-era-the-u-s-is-no-longer-the-authority-figure-for-multinational-mergers/:
Unlike other forms of international cooperation grounded in notions of comity and geopolitical realities, leadership in international merger clearance defaults to the jurisdiction with the most restrictive policy. For decades, the U.S. served in this role; merger clearance by the FTC or DOJ would practically ensure worldwide approval. But the E.C.’s decision to block the GE-Honeywell acquisition marked something of an inflection point in the path of global enforcement.
The actions by the DOJ and CMA regarding the Cengage/McGraw-Hill merger exemplify the simultaneous weakening in the U.S. and strengthening in Europe of substantive merger clearance standards and demands. The CMA applied the more restrictive standard and therefore led the clearance process. The CMA not only required the parties to propose remedies to the competition problems it identified, but then rejected those remedies as insufficient. Cengage and McGraw-Hill called off the merger roughly one month later, strongly implying the CMA’s rejection played a key role in stopping the deal. The DOJ, on the other hand, was reportedly poised to approve the merger with relatively minor divestitures, largely ignoring competition concerns raised by lawmakers and advocacy groups.
The CMA again took the lead in the Illumina/PacBio merger review. The CMA was first to conclude Illumina and PacBio operated in a single dynamic market and that the merger was an attempt by Illumina to eliminate a nascent competitor. The CMA also indicated it would attempt to block the merger, as it did not see an alternative that would protect competition from a patent-protected monopolist in a market for an extremely important technology. Although the DOJ eventually reached similar conclusions and challenged the merger, it was not until months after the CMA.
But global divergence in substantive standards and expedience is only half the story, as the Sabre/Farelogix debacle demonstrates that jurisdictions have differing procedural requirements as well. In that case the U.S. government challenged a significant consolidation in a complex, high-tech sub-market in the airline industry only to be confronted with seemingly insurmountable procedural hurdles. Judge Stark’s mechanical and misguided interpretation of the Supreme Court’s holding in Amex—that the competitive effects in any antitrust case involving a transaction platform must be analyzed within a two-sided market definition—created an impossible legal hurdle for the government since only two-sided transaction platforms could compete against Sabre, a qualification Farelogix did not meet.
Putting aside the wrong-headedness of the court’s interpretation of Amex (examples abound of anticompetitive conduct by a two-sided transaction platform that does not require defining a two-sided market), the greater sin may have been to elevate formalism over substance. It is well known that substantive rights can be rolled back through purely procedural maneuvers. In the Sabre-Farelogix case, the court created an excessively inflexible market definition requirement and reached a conclusion seemingly at odds with the evidence largely because the government failed to offer a prima facie case. In other words, the merging parties needn’t have bothered presenting their unreliable and misleading evidence. The court ruled the DOJ failed to make out its case in chief, so all the merging parties had to do was show up.
By contrast, the CMA satisfied its market definition and elemental requirements through overwhelming evidence that demonstrated Farelogix represented the most likely source of industry innovation and, as such, the most significant competitive constraint on Sabre’s market leadership. The U.S. court was aware of this, having noted that Farelogix represents the only real threat to Sabre and the testimony of one airline executive who said it would cost $40 million for an airline to develop its own platform and more than $20 million a year to maintain. An innovator like Farelogix could be easily and/or intentionally stymied if controlled by Sabre, a proposition that seemed self-evident to the CMA but was swallowed whole by the procedural obstacles erected by the U.S. court.
Indeed, the U.S.-European procedural divergence in merger control is institutional. U.S. authorities must prove a case in court to obtain an injunction whereas agencies like the E.C. can impose injunctions without judicial intervention, placing the onus on the merging parties to challenge the injunction in court. One can have no quarrel with the U.S. system and a deep suspicion of the European approach, but the U.S. institutional structure should not be used as an instrument to roll back substantive antitrust law, as the court did in the Sabre-Farelogix case.
In terms of both substantive competition law standards and the procedural requirements for merger control, the U.S and Europe appear headed in opposite directions. And, based on the three deals discussed above, the adjustment necessary to realign the world’s competition merger policies should be made in Washington – not in London or Brussels.
Excerpt from https://moginrubin.com/end-of-an-era-the-u-s-is-no-longer-the-authority-figure-for-multinational-mergers/:
Unlike other forms of international cooperation grounded in notions of comity and geopolitical realities, leadership in international merger clearance defaults to the jurisdiction with the most restrictive policy. For decades, the U.S. served in this role; merger clearance by the FTC or DOJ would practically ensure worldwide approval. But the E.C.’s decision to block the GE-Honeywell acquisition marked something of an inflection point in the path of global enforcement.
The actions by the DOJ and CMA regarding the Cengage/McGraw-Hill merger exemplify the simultaneous weakening in the U.S. and strengthening in Europe of substantive merger clearance standards and demands. The CMA applied the more restrictive standard and therefore led the clearance process. The CMA not only required the parties to propose remedies to the competition problems it identified, but then rejected those remedies as insufficient. Cengage and McGraw-Hill called off the merger roughly one month later, strongly implying the CMA’s rejection played a key role in stopping the deal. The DOJ, on the other hand, was reportedly poised to approve the merger with relatively minor divestitures, largely ignoring competition concerns raised by lawmakers and advocacy groups.
The CMA again took the lead in the Illumina/PacBio merger review. The CMA was first to conclude Illumina and PacBio operated in a single dynamic market and that the merger was an attempt by Illumina to eliminate a nascent competitor. The CMA also indicated it would attempt to block the merger, as it did not see an alternative that would protect competition from a patent-protected monopolist in a market for an extremely important technology. Although the DOJ eventually reached similar conclusions and challenged the merger, it was not until months after the CMA.
But global divergence in substantive standards and expedience is only half the story, as the Sabre/Farelogix debacle demonstrates that jurisdictions have differing procedural requirements as well. In that case the U.S. government challenged a significant consolidation in a complex, high-tech sub-market in the airline industry only to be confronted with seemingly insurmountable procedural hurdles. Judge Stark’s mechanical and misguided interpretation of the Supreme Court’s holding in Amex—that the competitive effects in any antitrust case involving a transaction platform must be analyzed within a two-sided market definition—created an impossible legal hurdle for the government since only two-sided transaction platforms could compete against Sabre, a qualification Farelogix did not meet.
Putting aside the wrong-headedness of the court’s interpretation of Amex (examples abound of anticompetitive conduct by a two-sided transaction platform that does not require defining a two-sided market), the greater sin may have been to elevate formalism over substance. It is well known that substantive rights can be rolled back through purely procedural maneuvers. In the Sabre-Farelogix case, the court created an excessively inflexible market definition requirement and reached a conclusion seemingly at odds with the evidence largely because the government failed to offer a prima facie case. In other words, the merging parties needn’t have bothered presenting their unreliable and misleading evidence. The court ruled the DOJ failed to make out its case in chief, so all the merging parties had to do was show up.
By contrast, the CMA satisfied its market definition and elemental requirements through overwhelming evidence that demonstrated Farelogix represented the most likely source of industry innovation and, as such, the most significant competitive constraint on Sabre’s market leadership. The U.S. court was aware of this, having noted that Farelogix represents the only real threat to Sabre and the testimony of one airline executive who said it would cost $40 million for an airline to develop its own platform and more than $20 million a year to maintain. An innovator like Farelogix could be easily and/or intentionally stymied if controlled by Sabre, a proposition that seemed self-evident to the CMA but was swallowed whole by the procedural obstacles erected by the U.S. court.
Indeed, the U.S.-European procedural divergence in merger control is institutional. U.S. authorities must prove a case in court to obtain an injunction whereas agencies like the E.C. can impose injunctions without judicial intervention, placing the onus on the merging parties to challenge the injunction in court. One can have no quarrel with the U.S. system and a deep suspicion of the European approach, but the U.S. institutional structure should not be used as an instrument to roll back substantive antitrust law, as the court did in the Sabre-Farelogix case.
In terms of both substantive competition law standards and the procedural requirements for merger control, the U.S and Europe appear headed in opposite directions. And, based on the three deals discussed above, the adjustment necessary to realign the world’s competition merger policies should be made in Washington – not in London or Brussels.
- Michael Carrier's primer:
Georgetown Journal of International Affairs (Jan. 2020)
4 Pages Posted: 27 May 2020
AbstractBig Tech is in the news. At the center of our political and economic dialogue is the effect that Amazon, Apple, Facebook, and Google have on our lives and what, if anything, governments should do about it.
In this short piece, I explain how Big Tech has come under scrutiny, the antitrust implications of the industry’s behavior, and the potential remedy of breaking up the companies.
Keywords: antitrust, Big Tech, Amazon, Apple, Facebook, Google
JEL Classification: K21, L40, L41, L63, O34
Suggested Citation:
Carrier, Michael A., Big Tech, Antitrust, and Breakup (January 14, 2020). Georgetown Journal of International Affairs (Jan. 2020). Available at SSRN: https://ssrn.com/abstract=3593863
In at least a dozen states, health departments have inflated testing numbers or deflated death tallies by changing criteria for who counts as a coronavirus victim and what counts as a coronavirus test
Some states have shifted the metrics for a “safe” reopening; Arizona sought to clamp down on bad news at one point by simply shuttering its pandemic modeling. About a third of the states aren’t even reporting hospital admission data — a big red flag for the resurgence of the virus.
Excerpt from https://www.msn.com/en-us/news/us/bad-state-data-hides-coronavirus-threat-as-trump-pushes-reopening/ar-BB14GGZj?ocid=msedgdhp
Some states have shifted the metrics for a “safe” reopening; Arizona sought to clamp down on bad news at one point by simply shuttering its pandemic modeling. About a third of the states aren’t even reporting hospital admission data — a big red flag for the resurgence of the virus.
Excerpt from https://www.msn.com/en-us/news/us/bad-state-data-hides-coronavirus-threat-as-trump-pushes-reopening/ar-BB14GGZj?ocid=msedgdhp
Goldman Sachs Forecloses on 10,000 Homes for ‘Consumer Relief’
A federal settlement over the 2008 financial crisis required the bank to offer homeowners $1.8 billion in relief. In the process, it became a big buyer of distressed mortgages.
To make amends for its part in the collapse of the housing market during the 2008 financial crisis, Goldman Sachs promised $1.8 billion in consumer relief to struggling homeowners.
That penance was also a business opportunity.
Four years after agreeing to help homeowners in a civil settlement with federal prosecutors, the Wall Street firm has become one of the biggest buyers of distressed mortgages, an area of investing that deals in loan modifications and foreclosures for borrowers who can’t make their payments.
And while Goldman has reworked loans to make it possible for thousands of homeowners to avoid foreclosure, it has also taken back more than 10,000 homes — properties it has started to sell to help offset the cost of the assistance it provides, a review of data shows.
“They are profiting off of this,” said George Daly, who almost lost his home in Millville, N.J., to Goldman after it bought his mortgage as part of the consumer relief program.
Excerpt from https://www.nytimes.com/2020/05/22/business/goldman-sachs-mortgage-foreclosure.html?action=click&algo=bandit-story&block=more_in_recirc&fellback=false&imp_id=301303615&impression_id=130080462&index=3&pgtype=Article®ion=footer
A federal settlement over the 2008 financial crisis required the bank to offer homeowners $1.8 billion in relief. In the process, it became a big buyer of distressed mortgages.
To make amends for its part in the collapse of the housing market during the 2008 financial crisis, Goldman Sachs promised $1.8 billion in consumer relief to struggling homeowners.
That penance was also a business opportunity.
Four years after agreeing to help homeowners in a civil settlement with federal prosecutors, the Wall Street firm has become one of the biggest buyers of distressed mortgages, an area of investing that deals in loan modifications and foreclosures for borrowers who can’t make their payments.
And while Goldman has reworked loans to make it possible for thousands of homeowners to avoid foreclosure, it has also taken back more than 10,000 homes — properties it has started to sell to help offset the cost of the assistance it provides, a review of data shows.
“They are profiting off of this,” said George Daly, who almost lost his home in Millville, N.J., to Goldman after it bought his mortgage as part of the consumer relief program.
Excerpt from https://www.nytimes.com/2020/05/22/business/goldman-sachs-mortgage-foreclosure.html?action=click&algo=bandit-story&block=more_in_recirc&fellback=false&imp_id=301303615&impression_id=130080462&index=3&pgtype=Article®ion=footer
Read the Court Ruling Against NCAA Restrictions on Athlete Pay
By Greta Anderson
May 19, 2020
A California federal appeals court has concluded that rules set by the National Collegiate Athletic Association to limit education-related compensation for athletes violate antitrust law.
The opinion issued May 18 by a three-judge panel [https://cdn.ca9.uscourts.gov/datastore/opinions/2020/05/18/19-15566.pdf click to read] in the United States Court of Appeals for the Ninth Circuit upheld a district court’s decision that the NCAA cannot restrict colleges from granting “non-cash education-related benefits” to athletes in Division I of the Football Bowl Subdivision, which encompass the nation’s most successful football, men’s basketball and women’s basketball programs.
Institutions are permitted to give money to athletes to pay for computers, musical instruments and other products and services used for academic pursuits, beyond the cost of attendance, or COA, which includes tuition, room and board, meals, and textbooks, the panel said. The NCAA also may not bar scholarships to athletes for study abroad programs or financial aid given after athletes have exhausted their eligibility to compete, according to the ruling.
The case, Alston v. NCAA, was originally ruled on by the U.S. District Court for the Northern District of California in March 2019 and was partly favorable to the NCAA, which argued that allowing certain types of athlete pay would eliminate distinctions between professional and college athletics. The panel agreed that the NCAA’s restrictions on athlete pay unrelated to education, and a requirement that athletic scholarships not exceed COA, were essential for “preserving amateurism and thus improving consumer choice by maintaining a distinction between college and professional sports,” according to the Ninth Circuit ruling.
The panel also addressed the enactment of the Fair Pay for Play Act in California last October. The law goes into effect in January 2023 and will allow college athletes in the state to be paid for use of their name, image and likeness, or NIL. Athletes who brought the Alston case to court argued that the NCAA’s creation of a working group to explore allowing NIL benefits nullifies the association’s argument that such benefits would diminish the amateurism model. But the Ninth Circuit panel said this argument is “premature” and “the NCAA has not endorsed cash compensation untethered to education.”
Judge Milan Smith concurred with the panel’s decision to focus on education-related expenses rather than payments unrelated to academics because of precedent set during a previous case in the Ninth Circuit, O’Bannon v. NCAA, but Smith also expressed concern that the court’s interpretation of antitrust law is damaging to athletes. He said the court relies on the NCAA’s argument that the compensation differences between college and professional sports are what “drive consumer demand” and strengthen the sports entertainment market, however, the same considerations aren’t made for the higher education market, where athletes could benefit from having greater choice over where they compete and the compensation they receive for their athletic success.
“The treatment of Student-Athletes is not the result of free market competition,” Smith wrote. “To the contrary, it is the result of a cartel of buyers acting in concert to artificially depress the price that sellers could otherwise receive for their services. Our antitrust laws were originally meant to prohibit exactly this sort of distortion.”
Credit: https://www.insidehighered.com/quicktakes/2020/05/19/court-panel-rules-against-ncaa-restrictions-athlete-pay
By Greta Anderson
May 19, 2020
A California federal appeals court has concluded that rules set by the National Collegiate Athletic Association to limit education-related compensation for athletes violate antitrust law.
The opinion issued May 18 by a three-judge panel [https://cdn.ca9.uscourts.gov/datastore/opinions/2020/05/18/19-15566.pdf click to read] in the United States Court of Appeals for the Ninth Circuit upheld a district court’s decision that the NCAA cannot restrict colleges from granting “non-cash education-related benefits” to athletes in Division I of the Football Bowl Subdivision, which encompass the nation’s most successful football, men’s basketball and women’s basketball programs.
Institutions are permitted to give money to athletes to pay for computers, musical instruments and other products and services used for academic pursuits, beyond the cost of attendance, or COA, which includes tuition, room and board, meals, and textbooks, the panel said. The NCAA also may not bar scholarships to athletes for study abroad programs or financial aid given after athletes have exhausted their eligibility to compete, according to the ruling.
The case, Alston v. NCAA, was originally ruled on by the U.S. District Court for the Northern District of California in March 2019 and was partly favorable to the NCAA, which argued that allowing certain types of athlete pay would eliminate distinctions between professional and college athletics. The panel agreed that the NCAA’s restrictions on athlete pay unrelated to education, and a requirement that athletic scholarships not exceed COA, were essential for “preserving amateurism and thus improving consumer choice by maintaining a distinction between college and professional sports,” according to the Ninth Circuit ruling.
The panel also addressed the enactment of the Fair Pay for Play Act in California last October. The law goes into effect in January 2023 and will allow college athletes in the state to be paid for use of their name, image and likeness, or NIL. Athletes who brought the Alston case to court argued that the NCAA’s creation of a working group to explore allowing NIL benefits nullifies the association’s argument that such benefits would diminish the amateurism model. But the Ninth Circuit panel said this argument is “premature” and “the NCAA has not endorsed cash compensation untethered to education.”
Judge Milan Smith concurred with the panel’s decision to focus on education-related expenses rather than payments unrelated to academics because of precedent set during a previous case in the Ninth Circuit, O’Bannon v. NCAA, but Smith also expressed concern that the court’s interpretation of antitrust law is damaging to athletes. He said the court relies on the NCAA’s argument that the compensation differences between college and professional sports are what “drive consumer demand” and strengthen the sports entertainment market, however, the same considerations aren’t made for the higher education market, where athletes could benefit from having greater choice over where they compete and the compensation they receive for their athletic success.
“The treatment of Student-Athletes is not the result of free market competition,” Smith wrote. “To the contrary, it is the result of a cartel of buyers acting in concert to artificially depress the price that sellers could otherwise receive for their services. Our antitrust laws were originally meant to prohibit exactly this sort of distortion.”
Credit: https://www.insidehighered.com/quicktakes/2020/05/19/court-panel-rules-against-ncaa-restrictions-athlete-pay
Bloomberg TV Interview: Economist Stiglitz on Covid-19 Impact on Jobs, Government Stimulus, Supply and Demand
May 18th, 2020
Joseph Stiglitz says the U.S. will likely have double-digit unemployment for an extended period. He worries that large and dominant companies will become even more dominant. He worries that government support for small U.S. businesses and workers has been inefficient. He wishes for government support of essential industries like health care. DAR
https://www.bloomberg.com/news/videos/2020-05-18/economist-stiglitz-on-covid-19-impact-on-jobs-government-stimulus-supply-and-demand-video
May 18th, 2020
Joseph Stiglitz says the U.S. will likely have double-digit unemployment for an extended period. He worries that large and dominant companies will become even more dominant. He worries that government support for small U.S. businesses and workers has been inefficient. He wishes for government support of essential industries like health care. DAR
https://www.bloomberg.com/news/videos/2020-05-18/economist-stiglitz-on-covid-19-impact-on-jobs-government-stimulus-supply-and-demand-video
NY Post: Health Department hits NYC nursing home with violations after Post report
By Melissa Klein
May 23, 2020 |
Investigators slapped the Hebrew Home in Riverdale with several violations after a Post report revealed scores of coronavirus deaths there went uncounted by state officials.
The state Department of Health said it issued a “statement of deficiencies” to the nursing home with violations that included “infection control concerns, failure to report accurately upon request by the department, and failure to communicate with families and residents in a timely fashion regarding COVID-19 deaths.”
The 751-bed nursing home has to submit a correction plan to be reviewed by the DOH. It could face fines ranging up to $10,000 if any violation directly resulted in patient harm, the DOH said.
The agency’s probe came after The Post reported that 119 people had died at the home from March 1 through early May, although the home said it had just 14 COVID-19 related deaths at the facility and another 11 residents who died in the hospital.
After the DOH launched its probe, the Hebrew Home was forced to go through the records of everyone who died and substantially revised its count. It said as of Monday 28 deaths were reclassified as possibly COVID-19 related bringing the total to 63 since March 1.
A Hebrew Home spokesman said the DOH found only “minor deficiencies” after its inspection, including problems related to signs on residents’ doors and the types of questions asked of staff about exposure to COVID-19.
The communication lapses were tied to the reclassification of the COVID-19 deaths, spokeswoman Wendy Steinberg said.
“Since these were not classified as COVID-related cases, we did not communicate about them at the time. All reclassified residents have been reported,” she said.
She said the home had been adhering to federal regulations to notify families of COVID-19 deaths at the facility, which took effect on May 8.
https://nypost.com/2020/05/23/nyc-nursing-home-hit-with-health-department-violations/?
By Melissa Klein
May 23, 2020 |
Investigators slapped the Hebrew Home in Riverdale with several violations after a Post report revealed scores of coronavirus deaths there went uncounted by state officials.
The state Department of Health said it issued a “statement of deficiencies” to the nursing home with violations that included “infection control concerns, failure to report accurately upon request by the department, and failure to communicate with families and residents in a timely fashion regarding COVID-19 deaths.”
The 751-bed nursing home has to submit a correction plan to be reviewed by the DOH. It could face fines ranging up to $10,000 if any violation directly resulted in patient harm, the DOH said.
The agency’s probe came after The Post reported that 119 people had died at the home from March 1 through early May, although the home said it had just 14 COVID-19 related deaths at the facility and another 11 residents who died in the hospital.
After the DOH launched its probe, the Hebrew Home was forced to go through the records of everyone who died and substantially revised its count. It said as of Monday 28 deaths were reclassified as possibly COVID-19 related bringing the total to 63 since March 1.
A Hebrew Home spokesman said the DOH found only “minor deficiencies” after its inspection, including problems related to signs on residents’ doors and the types of questions asked of staff about exposure to COVID-19.
The communication lapses were tied to the reclassification of the COVID-19 deaths, spokeswoman Wendy Steinberg said.
“Since these were not classified as COVID-related cases, we did not communicate about them at the time. All reclassified residents have been reported,” she said.
She said the home had been adhering to federal regulations to notify families of COVID-19 deaths at the facility, which took effect on May 8.
https://nypost.com/2020/05/23/nyc-nursing-home-hit-with-health-department-violations/?
Judge dismisses OAN’s $10M defamation lawsuit against Rachel Maddow, MSNBC
: City News Service
Posted: May 22, 2020 / 01:01 PM PDT / Updated: May 22, 2020 / 01:04 PM PDT
SAN DIEGO (CNS) – A federal judge Friday dismissed a $10 million defamation lawsuit filed by the owners and operators of the San Diego-based One America News Network against MSNBC and political commentator Rachel Maddow for telling her viewers last summer that the conservative network “really literally is paid Russian propaganda.”
U.S. District Judge Cynthia Bashant dismissed Herring Networks’ suit with prejudice, ruling “there is no set of facts that could support a claim for defamation based on Maddow’s statement,” which was made during a July 22, 2019, segment of her show.
In that segment, Maddow cited a Daily Beast article stating that an OAN on-air reporter was “on the payroll for the Kremlin.”
Herring Networks’ court papers say the reporter, Kristian Rouz, is originally from the Ukraine and started his journalism career by writing articles for Sputnik News, which is affiliated with the Russian government. According to Herring Networks, Rouz was merely a freelancer for Sputnik who selected his own article topics for submission, and his work there had no significance toward his work for OAN.
Herring Networks alleged in the lawsuit filed last fall that Maddow made “utterly and completely false” statements because OAN “is wholly financed by the Herrings, an American family” and “has never been paid or received a penny from Russia or the Russian government.”
Bashant ruled that Maddow’s statement “is an opinion that cannot serve as the basis for a defamation claim,” and thus is protected under the First Amendment.
The San Diego-based judge ruled that most viewers would be able to conclude that Maddow was forwarding her opinion when she made the July 22 statements.
“For her to exaggerate the facts and call OAN Russian propaganda was consistent with her tone up to that point, and the court finds a reasonable viewer would not take the statement as factual given this context,” Bashant wrote. “The context of Maddow’s statement shows reasonable viewers would consider the contested statement to be opinion.”
In a motion to dismiss the case, Maddow’s attorneys allege Herrings Networks was not objecting to anything from the Daily Beast article, and conceded that Rouz worked for an organization affiliated with the Russian government.
Maddow’s attorneys maintained that her comments during the segment were opinions based entirely on the Daily Beast story, and “she nowhere indicates that she has separate knowledge about Mr. Rouz or the funding of OAN other than from that article.”
Bashant agreed, writing that viewers would “follow the facts of the Daily Beast article; that OAN and Sputnik share a reporter and both pay this reporter to write articles. Anything beyond this is Maddow’s opinion or her exaggeration of the facts.”
https://fox5sandiego.com/author/city-news-service/
A copy of the opinion is here: https://www.courthousenews.com/wp-content/uploads/2020/05/OAN-Maddow-DISMISSAL.pdf
Note: OAN has announced plans to appeal
: City News Service
Posted: May 22, 2020 / 01:01 PM PDT / Updated: May 22, 2020 / 01:04 PM PDT
SAN DIEGO (CNS) – A federal judge Friday dismissed a $10 million defamation lawsuit filed by the owners and operators of the San Diego-based One America News Network against MSNBC and political commentator Rachel Maddow for telling her viewers last summer that the conservative network “really literally is paid Russian propaganda.”
U.S. District Judge Cynthia Bashant dismissed Herring Networks’ suit with prejudice, ruling “there is no set of facts that could support a claim for defamation based on Maddow’s statement,” which was made during a July 22, 2019, segment of her show.
In that segment, Maddow cited a Daily Beast article stating that an OAN on-air reporter was “on the payroll for the Kremlin.”
Herring Networks’ court papers say the reporter, Kristian Rouz, is originally from the Ukraine and started his journalism career by writing articles for Sputnik News, which is affiliated with the Russian government. According to Herring Networks, Rouz was merely a freelancer for Sputnik who selected his own article topics for submission, and his work there had no significance toward his work for OAN.
Herring Networks alleged in the lawsuit filed last fall that Maddow made “utterly and completely false” statements because OAN “is wholly financed by the Herrings, an American family” and “has never been paid or received a penny from Russia or the Russian government.”
Bashant ruled that Maddow’s statement “is an opinion that cannot serve as the basis for a defamation claim,” and thus is protected under the First Amendment.
The San Diego-based judge ruled that most viewers would be able to conclude that Maddow was forwarding her opinion when she made the July 22 statements.
“For her to exaggerate the facts and call OAN Russian propaganda was consistent with her tone up to that point, and the court finds a reasonable viewer would not take the statement as factual given this context,” Bashant wrote. “The context of Maddow’s statement shows reasonable viewers would consider the contested statement to be opinion.”
In a motion to dismiss the case, Maddow’s attorneys allege Herrings Networks was not objecting to anything from the Daily Beast article, and conceded that Rouz worked for an organization affiliated with the Russian government.
Maddow’s attorneys maintained that her comments during the segment were opinions based entirely on the Daily Beast story, and “she nowhere indicates that she has separate knowledge about Mr. Rouz or the funding of OAN other than from that article.”
Bashant agreed, writing that viewers would “follow the facts of the Daily Beast article; that OAN and Sputnik share a reporter and both pay this reporter to write articles. Anything beyond this is Maddow’s opinion or her exaggeration of the facts.”
https://fox5sandiego.com/author/city-news-service/
A copy of the opinion is here: https://www.courthousenews.com/wp-content/uploads/2020/05/OAN-Maddow-DISMISSAL.pdf
Note: OAN has announced plans to appeal
Federal banking regulator pushes through rule changes that weaken Community Reinvestment Act investment incentives in low-income communities.
Excerpt:
In a statement, National Community Reinvestment Coalition CEO Jesse Van Tol laid out the high stakes: “The timing is shocking, in the middle of a pandemic that has been hardest on lower-income communities this law is supposed to protect. What an insulting and cruel moment to unleash new rules that will in some cases help banks to do less for some poor communities and communities of color. Those are the communities hit hardest by COVID-19.”
Read More Here: https://nonprofitquarterly.org/under-cover-of-covid-regulator-rolls-back-community-reinvestment-act-rules/
Excerpt:
In a statement, National Community Reinvestment Coalition CEO Jesse Van Tol laid out the high stakes: “The timing is shocking, in the middle of a pandemic that has been hardest on lower-income communities this law is supposed to protect. What an insulting and cruel moment to unleash new rules that will in some cases help banks to do less for some poor communities and communities of color. Those are the communities hit hardest by COVID-19.”
Read More Here: https://nonprofitquarterly.org/under-cover-of-covid-regulator-rolls-back-community-reinvestment-act-rules/
The Trump administration is supporting a lawsuit challenging the Illinois governor's stay-at-home order.
The legal maneuver marks the first time the U.S. Department of Justice has weighed in on state level COVID-19 policies that are unrelated to religious matters.
The department on Friday filed a statement of interest in the case against Democratic Gov. J.B. Pritzker, saying the protective coronavirus measures in place exceed the limits of his office.
"In response to the COVID-19 pandemic, the Governor of Illinois has, over the past two months, sought to rely on authority under the Illinois Emergency Management Agency Act to impose sweeping limitations on nearly all aspects of life for citizens of Illinois, significantly impairing in some instances their ability to maintain their economic livelihoods," the department said in a statement.
The government is siding with Republican state Rep. Darren Bailey who filed the initial suit in state court earlier this month. He argued that Pritzker's executive order violates a 30-day limit on the governor's emergency powers put in place by the state legislature.
Pritzker was ordered to respond to Bailey's motion for summary judgement by Thursday. But instead, he removed the case to federal district court.
Assistant Attorney General Eric Dreiband for the Civil Rights Division said Pritzker "owes it to the people of Illinois to allow his state's courts to adjudicate the question of whether Illinois law authorizes orders he issued to respond to COVID-19."
See https://www.npr.org/sections/coronavirus-live-updates/2020/05/22/861413069/justice-department-backs-challenge-to-illinois-stay-at-home-order
The legal maneuver marks the first time the U.S. Department of Justice has weighed in on state level COVID-19 policies that are unrelated to religious matters.
The department on Friday filed a statement of interest in the case against Democratic Gov. J.B. Pritzker, saying the protective coronavirus measures in place exceed the limits of his office.
"In response to the COVID-19 pandemic, the Governor of Illinois has, over the past two months, sought to rely on authority under the Illinois Emergency Management Agency Act to impose sweeping limitations on nearly all aspects of life for citizens of Illinois, significantly impairing in some instances their ability to maintain their economic livelihoods," the department said in a statement.
The government is siding with Republican state Rep. Darren Bailey who filed the initial suit in state court earlier this month. He argued that Pritzker's executive order violates a 30-day limit on the governor's emergency powers put in place by the state legislature.
Pritzker was ordered to respond to Bailey's motion for summary judgement by Thursday. But instead, he removed the case to federal district court.
Assistant Attorney General Eric Dreiband for the Civil Rights Division said Pritzker "owes it to the people of Illinois to allow his state's courts to adjudicate the question of whether Illinois law authorizes orders he issued to respond to COVID-19."
See https://www.npr.org/sections/coronavirus-live-updates/2020/05/22/861413069/justice-department-backs-challenge-to-illinois-stay-at-home-order
Non-Compete Agreements: Might They be Procompetitive in Healthcare?
By Paul Wong, Yun Ling, Emily Walden
There have been recent calls for nationwide bans on non-compete agreements. Such sentiment is no surprise in healthcare, particularly in physician labor markets. And yet there are many procompetitive justifications for non-compete agreements where they are an important tool to encourage investment. It is well-recognized that these agreements protect investments that would otherwise be expropriated due to hold-up, including trade secrets, customer relationships, recruitment of unique employees, specific training, and specialized capital investment.
The full article:
https://www.competitionpolicyinternational.com/non-compete-agreements-might-they-be-procompetitive-in-healthcare/Non-Compete
The FTC and States’ Complaint Regarding Daraprim--preventing generic competitionI
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May 18, 2020By Brendan Coffman, Thu Hoang & Nathan Mendelsohn (Wilson Sonsini Goodrich & Rosati)1
On January 27, 2020, the Federal Trade Commission (“FTC”) and the State of New York (“NY AG”) (collectively “Plaintiffs”) filed a Complaint against Phoenixus AG and Vyera Pharmaceuticals, LLC (collectively “Turing”), Martin Shkreli, and Kevin Mulleady. On April 14, 2020, Plaintiffs filed an amended Complaint, adding the states of California, Illinois, North Carolina, Ohio, and the commonwealths of Pennsylvania and Virginia.2 Plaintiffs allege an anticompetitive scheme to prevent generic versions of pyrimethamine (brand name Daraprim®) from launching. Specifically, Plaintiffs allege that Defendants are preventing generic manufacturers from launching by: (1) restricting sales of reference listed drug samples to generic manufacturers by instituting a restricted distribution program with distributors, (2) restricting sales of pyrimethamine API to generic manufacturers, and (3) agreeing with distributors to withhold sales data to prevent generic manufacturers from having a sense of Daraprim’s financial viability.
Full article, including access to Complaint https://www.competitionpolicyinternational.com/turing-the-screws-on-illegal-comprehensive-schemes-the-ftc-and-states-bold-complaint-regarding-daraprim/
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May 18, 2020By Brendan Coffman, Thu Hoang & Nathan Mendelsohn (Wilson Sonsini Goodrich & Rosati)1
On January 27, 2020, the Federal Trade Commission (“FTC”) and the State of New York (“NY AG”) (collectively “Plaintiffs”) filed a Complaint against Phoenixus AG and Vyera Pharmaceuticals, LLC (collectively “Turing”), Martin Shkreli, and Kevin Mulleady. On April 14, 2020, Plaintiffs filed an amended Complaint, adding the states of California, Illinois, North Carolina, Ohio, and the commonwealths of Pennsylvania and Virginia.2 Plaintiffs allege an anticompetitive scheme to prevent generic versions of pyrimethamine (brand name Daraprim®) from launching. Specifically, Plaintiffs allege that Defendants are preventing generic manufacturers from launching by: (1) restricting sales of reference listed drug samples to generic manufacturers by instituting a restricted distribution program with distributors, (2) restricting sales of pyrimethamine API to generic manufacturers, and (3) agreeing with distributors to withhold sales data to prevent generic manufacturers from having a sense of Daraprim’s financial viability.
Full article, including access to Complaint https://www.competitionpolicyinternational.com/turing-the-screws-on-illegal-comprehensive-schemes-the-ftc-and-states-bold-complaint-regarding-daraprim/
Facebook, YouTube remove viral 'Plandemic' video
BY ALICIA COHN - 05/08/20 08:34 AM EDT
Facebook, YouTube and other social media platforms have removed a viral documentary-style video titled "Plandemic" that promoted conspiracy theories about the coronavirus.
The 26-minute video, which was framed as part of a longer documentary on the coronavirus pandemic, promoted several false claims, including that wearing a face mask makes it easier to get the virus and that shelter-in-place orders hurt the immune system.
It also claimed without evidence that the coronavirus was invented in a laboratory in order to promote vaccinations. Judy Mikovits, an anti-vaccination activist, makes many of the claims in the video.
The video received more than 1 million videos on multiple platforms before it was removed, according to reports. It went viral on Thursday and was shared by users with large follower counts, including NFL players and Instagram influencers, according to NBC.
“Suggesting that wearing a mask can make you sick could lead to imminent harm, so we’re removing the video,” Facebook told Reuters.
YouTube told CNBC the video was removed for making claims about a cure for COVID-19 that is not backed by health officials.
Vimeo told The Washington Post the company “stands firm in keeping our platform safe from content that spreads harmful and misleading health information. The video in question has been removed ... for violating these very policies.”
Twitter also blocked the hashtags #PlagueofCorruption and #PlandemicMovie from trends and search and labeled the URL to the video as “unsafe," according to CNBC.
https://thehill.com/policy/technology/496757-facebook-and-youtube-remove-viral-plandemic-video-that-links-face-masks-to#bottom-story-socials
Labor activism against unsafe working conditions as obstacle to factory production
There’s been a surge in labor activism as people made to work in unsafe conditions stage strikes, walkouts and sickouts. “It sounds corny, but we’re moving towards a worker rebellion,” Ron Herrera, president of the Los Angeles County Federation of Labor, told The Los Angeles Times.
Meatpacking workers have been sickened with coronavirus at wildly disproportionate rates, and all over the country there have been protests outside of meatpacking plants demanding that they be temporarily closed, sometimes by the workers’ own children.
See https://www.nytimes.com/2020/05/18/opinion/coronavirus-reopen-workers.html?action=click&module=Opinion&pgtype=Homepage
Several states have been pushing employers to disclose when laid-off employees refuse to return to work.
About two weeks ago, the Vermont Labor Department launched a webpage for businesses to report employees who decline offers to return to work.
Several other states have set up similar websites for reporting employees, including Montana, Oklahoma, Tennessee and South Carolina.
It’s left some business owners, managers and workers in a difficult position where workers fear for their safety on the job.
https://www.marketplace.org/2020/05/14/should-employers-report-employees-who-dont-go-back-to-work
About two weeks ago, the Vermont Labor Department launched a webpage for businesses to report employees who decline offers to return to work.
Several other states have set up similar websites for reporting employees, including Montana, Oklahoma, Tennessee and South Carolina.
It’s left some business owners, managers and workers in a difficult position where workers fear for their safety on the job.
https://www.marketplace.org/2020/05/14/should-employers-report-employees-who-dont-go-back-to-work
Retailers Phase Out Coronavirus Hazard Pay for Essential Workers
Kroger and Rite Aid are among the firms paring back, as unions and employees say they still face risk
Some of the biggest U.S. retailers are ending the extra pay they gave to front-line workers as coronavirus-related costs pile up and the ranks of unemployed Americans surge.
Amazon.com Inc., Kroger Co. and Rite Aid Corp. are among the major companies that have ended or plan to stop paying higher wages for tens of thousands of workers in stores and warehouses and on the road.
Credit: WSJ 5-19 (paywall)
Kroger and Rite Aid are among the firms paring back, as unions and employees say they still face risk
Some of the biggest U.S. retailers are ending the extra pay they gave to front-line workers as coronavirus-related costs pile up and the ranks of unemployed Americans surge.
Amazon.com Inc., Kroger Co. and Rite Aid Corp. are among the major companies that have ended or plan to stop paying higher wages for tens of thousands of workers in stores and warehouses and on the road.
Credit: WSJ 5-19 (paywall)
Has Tyson’s been price gouging on beef?
State AGs have connected concerns about great market power and beef price gouging during the pandemic: "Given the concentrated market structure of the beef industry, it may be particularly susceptible to market manipulation, particularly during times of food insecurity, such as the current COVID-19 crisis." See the letter of multiple State AGs at https://www.azag.gov/sites/default/files/docs/press-releases/2020/letters/2020_05_05_Barr_AG_William.pdf
The backstory (see MSN news) is that since the beginning of March, coronavirus outbreaks among meatpacking workers forced the temporary closure of about two dozen major U.S. meat processing plants. The U.S. Department of Agriculture estimated that nationwide production of beef, pork and other red meat last week was about 28% lower than the same period last year, and the agency projected Tuesday that beef production in the second quarter of this year would be one-fifth below first-quarter levels.
Grocery stores and restaurants were paying more as a result. Wholesale ground-beef prices recently topped $6.21 a pound, according to the USDA, more than triple their cost at the beginning of March. Some steak prices doubled.
Tyson and other beef processors also have faced government scrutiny over their pricing. Despite beef growing more expensive in supermarkets, cattle prices have tumbled in the U.S. Plains states, prompting federal officials to investigate the way companies like Tyson price and purchase cattle.
Tyson most recently cut prices to supermarkets and other retailers by 20 to 30 percent. That may make beef more affordable for consumers, an admirable goal. But the move could be am effort by Tyson to deflect allegations of manipulating food prices in a time of food insecurity caused by the COVID pandemic. That would be, some have pointed out, an indication that Tyson has great market power.
By Don Allen Resnikoff
State AGs have connected concerns about great market power and beef price gouging during the pandemic: "Given the concentrated market structure of the beef industry, it may be particularly susceptible to market manipulation, particularly during times of food insecurity, such as the current COVID-19 crisis." See the letter of multiple State AGs at https://www.azag.gov/sites/default/files/docs/press-releases/2020/letters/2020_05_05_Barr_AG_William.pdf
The backstory (see MSN news) is that since the beginning of March, coronavirus outbreaks among meatpacking workers forced the temporary closure of about two dozen major U.S. meat processing plants. The U.S. Department of Agriculture estimated that nationwide production of beef, pork and other red meat last week was about 28% lower than the same period last year, and the agency projected Tuesday that beef production in the second quarter of this year would be one-fifth below first-quarter levels.
Grocery stores and restaurants were paying more as a result. Wholesale ground-beef prices recently topped $6.21 a pound, according to the USDA, more than triple their cost at the beginning of March. Some steak prices doubled.
Tyson and other beef processors also have faced government scrutiny over their pricing. Despite beef growing more expensive in supermarkets, cattle prices have tumbled in the U.S. Plains states, prompting federal officials to investigate the way companies like Tyson price and purchase cattle.
Tyson most recently cut prices to supermarkets and other retailers by 20 to 30 percent. That may make beef more affordable for consumers, an admirable goal. But the move could be am effort by Tyson to deflect allegations of manipulating food prices in a time of food insecurity caused by the COVID pandemic. That would be, some have pointed out, an indication that Tyson has great market power.
By Don Allen Resnikoff
Opinion from Lancet: The Trump administration has chipped away at the CDC's capacity to combat infectious diseases.
CDC staff in China were cut back with the last remaining CDC officer recalled home from the China CDC in July, 2019, leaving an intelligence vacuum when COVID-19 began to emerge. In a press conference on Feb 25, Nancy Messonnier, director of the CDC's National Center for Immunization and Respiratory Diseases, warned US citizens to prepare for major disruptions to movement and everyday life. Messonnier subsequently no longer appeared at White House briefings on COVID-19. More recently, the Trump administration has questioned guidelines that the CDC has provided. These actions have undermined the CDC's leadership and its work during the COVID-19 pandemic.
From https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31140-5/fulltext
CDC staff in China were cut back with the last remaining CDC officer recalled home from the China CDC in July, 2019, leaving an intelligence vacuum when COVID-19 began to emerge. In a press conference on Feb 25, Nancy Messonnier, director of the CDC's National Center for Immunization and Respiratory Diseases, warned US citizens to prepare for major disruptions to movement and everyday life. Messonnier subsequently no longer appeared at White House briefings on COVID-19. More recently, the Trump administration has questioned guidelines that the CDC has provided. These actions have undermined the CDC's leadership and its work during the COVID-19 pandemic.
From https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31140-5/fulltext
The effect of mail-in balloting on the California special Congressional election in CA won by Mike Garcia
Every registered voter in the CA district received a postage-paid, mail-in ballot.
Voters who returned the mail-in ballot skewed overwhelmingly old, white and Republican, according to an analysis by the firm Political Data Inc., The younger the voter, the less likely to vote. Fewer than 20 percent of 18- to 34-year-olds cast ballots; twice as many voted who were between 50 and 65; and only among the oldest voters did turnout exceed 50 percent. Latinos were least likely to vote (21 percent), while 40 percent of whites cast ballots. The Political Data Analysis is at https://tableau.the-pdi.com/t/CampaignTools/views/25thCDSpecialAVTracker/2020SpecialElectionTrackerVB?%3AisGuestRedirectFromVizportal=y&%3Aembed=yO
Every registered voter in the CA district received a postage-paid, mail-in ballot.
Voters who returned the mail-in ballot skewed overwhelmingly old, white and Republican, according to an analysis by the firm Political Data Inc., The younger the voter, the less likely to vote. Fewer than 20 percent of 18- to 34-year-olds cast ballots; twice as many voted who were between 50 and 65; and only among the oldest voters did turnout exceed 50 percent. Latinos were least likely to vote (21 percent), while 40 percent of whites cast ballots. The Political Data Analysis is at https://tableau.the-pdi.com/t/CampaignTools/views/25thCDSpecialAVTracker/2020SpecialElectionTrackerVB?%3AisGuestRedirectFromVizportal=y&%3Aembed=yO
With regard to the conflict between the perceived personal right to do whatever, and the social obligation to protect others by wearing a face mask: Washington Metro will ask train and bus passengers to wear a mask starting Monday. But, if they don't, it's also unlikely there will be any kind of penalty
WMATA officials have suggested riders use masks for some time now, said Paul Wiedefeld, the system's general manager. He said he expects most people will follow the new policy, per general guidelines across Greater Washington to stymie the spread of Covid-19.
Though, when pressed by board members on how the system would carry out such a requirement, Wiedefeld acknowledged the challenge in enforcing it, describing it as more of an ask than a mandate.
"It's extremely difficult to enforce — we've all seen the videos on how this goes bad," Wiedefeld said at the board meeting. "We want to encourage to everyone that it's a social responsibility."
Metro workers won't specifically ask it of bus and train riders, and police likely won't write citations, he said. But WMATA might dig into its own stockpile of masks so officers can hand some out to commuters not wearing one. But Wiedefeld said it was unclear if the agency has the supply to provide such a service.
The requirements have varied across the region's borders. The District requires people to wear a mask or face covering while using public transit. Montgomery County has a similar rule for shoppers. While some Virginia counties have encouraged masks while in public, the state has not made that requirement for public transportation, to the chagrin of Metro's largest union, ATU Local 689.
From: https://www.bizjournals.com/washington/news/2020/05/14/metro-to-require-passengers-to-wear-masks.html?
WMATA officials have suggested riders use masks for some time now, said Paul Wiedefeld, the system's general manager. He said he expects most people will follow the new policy, per general guidelines across Greater Washington to stymie the spread of Covid-19.
Though, when pressed by board members on how the system would carry out such a requirement, Wiedefeld acknowledged the challenge in enforcing it, describing it as more of an ask than a mandate.
"It's extremely difficult to enforce — we've all seen the videos on how this goes bad," Wiedefeld said at the board meeting. "We want to encourage to everyone that it's a social responsibility."
Metro workers won't specifically ask it of bus and train riders, and police likely won't write citations, he said. But WMATA might dig into its own stockpile of masks so officers can hand some out to commuters not wearing one. But Wiedefeld said it was unclear if the agency has the supply to provide such a service.
The requirements have varied across the region's borders. The District requires people to wear a mask or face covering while using public transit. Montgomery County has a similar rule for shoppers. While some Virginia counties have encouraged masks while in public, the state has not made that requirement for public transportation, to the chagrin of Metro's largest union, ATU Local 689.
From: https://www.bizjournals.com/washington/news/2020/05/14/metro-to-require-passengers-to-wear-masks.html?
The Justice Department is considering whether to file criminal charges against pharmaceutical giant Teva for allegedly colluding with rivals to inflate the prices of widely used drugs, but Teva is betting that in the middle of a deadly pandemic, the Trump administration won’t dare to come down hard on the largest supplier of generic drugs in the United States.
According to the NY Times:oLawyers for Teva, which prosecutors believe was deeply involved in the conspiracy, until recently had been holding settlement negotiations with officials in the Justice Department’s antitrust division. But in April, the company all but walked away from the talks, essentially daring the Trump administration to file charges, according to people on both sides of the discussions.
The Times article is at https://www.nytimes.com/2020/05/15/us/politics/teva-antitrust-hydroxychloroquine-settlement.html
According to the NY Times:oLawyers for Teva, which prosecutors believe was deeply involved in the conspiracy, until recently had been holding settlement negotiations with officials in the Justice Department’s antitrust division. But in April, the company all but walked away from the talks, essentially daring the Trump administration to file charges, according to people on both sides of the discussions.
The Times article is at https://www.nytimes.com/2020/05/15/us/politics/teva-antitrust-hydroxychloroquine-settlement.html
The nonprofit organization run by President Donald Trump’s nominee to lead the federal agency with oversight of Voice of America is under investigation by the District of Columbia attorney general’s office.
The DC attorney general’s office is investigating whether Michael Pack’s use of funds from his nonprofit, Public Media Lab, was unlawful and whether he improperly used those funds to benefit himself.
The U.S. Agency for Global Media, the agency Pack is nominated to head, is the agency that oversees U.S. government broadcasting, including the Voice of America, among others.
New Jersey Senator Menendez said that since Pack's confirmation hearing in September, “Mr. Pack has refused to provide the Senate Foreign Relations Committee with documents it requested that get to the heart of the matter that the OAG (Office of Attorney General) is now investigating, or to correct false statements he made to the IRS.”
From https://www.voanews.com/usa/nominee-lead-us-media-agency-under-investigation
The DC attorney general’s office is investigating whether Michael Pack’s use of funds from his nonprofit, Public Media Lab, was unlawful and whether he improperly used those funds to benefit himself.
The U.S. Agency for Global Media, the agency Pack is nominated to head, is the agency that oversees U.S. government broadcasting, including the Voice of America, among others.
New Jersey Senator Menendez said that since Pack's confirmation hearing in September, “Mr. Pack has refused to provide the Senate Foreign Relations Committee with documents it requested that get to the heart of the matter that the OAG (Office of Attorney General) is now investigating, or to correct false statements he made to the IRS.”
From https://www.voanews.com/usa/nominee-lead-us-media-agency-under-investigation
From Public Citizen
Senate Judiciary Committee holds hearing on proposal to eliminate business liability to consumers for infecting them with Covid-19
Posted: 13 May 2020 09:22 AM PDT
by Jeff Sovern
The video and prepared testimony is here. If you have time to read only one, I recommend David Vladeck's excellent statement.
Though Senate Majority Leader Mitch McConnell has described this terrible proposal as a "red line" for future coronavirus bills, it appears he does not have the full support of his caucus. Republican Senator Mike Lee expressed concerns about the intrusion of a federal law into the state torts domain.
Senate Judiciary Committee holds hearing on proposal to eliminate business liability to consumers for infecting them with Covid-19
Posted: 13 May 2020 09:22 AM PDT
by Jeff Sovern
The video and prepared testimony is here. If you have time to read only one, I recommend David Vladeck's excellent statement.
Though Senate Majority Leader Mitch McConnell has described this terrible proposal as a "red line" for future coronavirus bills, it appears he does not have the full support of his caucus. Republican Senator Mike Lee expressed concerns about the intrusion of a federal law into the state torts domain.
Business Journal: How much liability should companies bear from workers and from customers by reopening in the midst of the pandemic?
The National Federation of Independent Business has proposed Liability Protection Principles that address coronavirus-related claims with employees through the worker's compensation system. The group proposes protections from customer claims unless a customer can prove injury and that a business knowingly neglected to develop a reasonable plan for reducing exposure to the coronavirus. NFIB also suggests that only those hospitalized with Covid-19 should be allowed to sue, with fines for “unscrupulous trial attorneys bringing frivolous Covid-19-related lawsuits.”
Worker and consumer advocates have cautioned against such measures. A coalition of labor unions, consumer rights groups and legal organizations strongly opposes any legislation that would grant nationwide immunity for businesses “that operate in an unreasonably unsafe manner” during the pandemic, according to a letter sent by a coalition of groups to U.S. House and Senate leaders. [The letter is at https://centerjd.org/content/group-letter-congress-opposing-business-immunity?]
Credit: Business Journal National Observer
An estimated 27 million Americans have lost employer-based health coverage during the pandemic
That is according to an analysis from the Kaiser Family Foundation. The estimate includes Americans who lost their employer-based health insurance and those whose family member lost their job and accompanying insurance. KFF estimates that 12.7 million people — nearly half of those who recently lost coverage — are eligible for Medicaid. Another 8.4 million are eligible for ACA marketplace subsidies. KFF also projects that 19 million people will switch to coverage offered by their partner's employer.
That is according to an analysis from the Kaiser Family Foundation. The estimate includes Americans who lost their employer-based health insurance and those whose family member lost their job and accompanying insurance. KFF estimates that 12.7 million people — nearly half of those who recently lost coverage — are eligible for Medicaid. Another 8.4 million are eligible for ACA marketplace subsidies. KFF also projects that 19 million people will switch to coverage offered by their partner's employer.
From DMN: Will Giants Rule the Post-COVID Music Industry? Artist Rights Alliance, Future of Music Coalition Support the Pandemic Anti-Monopoly Act
Amid widespread fiscal tumult and economic uncertainty, 25 organizations, including the Artist Rights Alliance (ARA), the Future of Music Coalition, and MoveOn, have sent a letter to Congress in support of the Pandemic Anti-Monopoly Act.
The story continues here. https://www.digitalmusicnews.com/2020/05/08/post-covid-music-industry/
From DMN: 46 Music and Film Organizations Tell Congress: ‘The Reality of Our Situation Is Dire’
46 film and music organizations have submitted a letter to Congress highlighting perceived shortcomings in the $2.2 trillion CARES Act, as well as possible ways to address these points in future economic-aid legislation. The letter points to a seriously dire financial situation for creative professionals.
The story continues here. https://www.digitalmusicnews.com/2020/05/08/music-film-organizations-call-on-congress/
Amid widespread fiscal tumult and economic uncertainty, 25 organizations, including the Artist Rights Alliance (ARA), the Future of Music Coalition, and MoveOn, have sent a letter to Congress in support of the Pandemic Anti-Monopoly Act.
The story continues here. https://www.digitalmusicnews.com/2020/05/08/post-covid-music-industry/
From DMN: 46 Music and Film Organizations Tell Congress: ‘The Reality of Our Situation Is Dire’
46 film and music organizations have submitted a letter to Congress highlighting perceived shortcomings in the $2.2 trillion CARES Act, as well as possible ways to address these points in future economic-aid legislation. The letter points to a seriously dire financial situation for creative professionals.
The story continues here. https://www.digitalmusicnews.com/2020/05/08/music-film-organizations-call-on-congress/
More from Washington Business Journal: Covid-19 lawsuits? Battle lines form over whether businesses should be liable.
By Andy Medici / As economies and businesses reopen, the potential grounds for lawsuits will become a defining debate during the next congressional stimulus discussions.
Read Full Article https://www.bizjournals.com/washington/news/2020/05/08/worried-about-covid-19-lawsuits-battle-lines-form.html?
By Andy Medici / As economies and businesses reopen, the potential grounds for lawsuits will become a defining debate during the next congressional stimulus discussions.
Read Full Article https://www.bizjournals.com/washington/news/2020/05/08/worried-about-covid-19-lawsuits-battle-lines-form.html?
Much-anticipated CDC guidelines advising businesses and schools how they should reopen reportedly remain in limbo
Many companies reportedly are seeking out other sources for assistance on how to operate through an unprecedented crisis.
Click to read the leaked CDC "draft" guidelines: https://www.mercurynews.com/2020/05/07/read-full-text-of-cdc-reopening-guidelines-that-white-house-rejected/
Many companies reportedly are seeking out other sources for assistance on how to operate through an unprecedented crisis.
Click to read the leaked CDC "draft" guidelines: https://www.mercurynews.com/2020/05/07/read-full-text-of-cdc-reopening-guidelines-that-white-house-rejected/
To save their music venue businesses, more than 1,200 venues and promoters have formed an advocacy group, the National Independent Venue Association, with Dayna Frank as its board president.
The group does not include any venues owned by AEG or Live Nation.
Like other small companies, the venue operators say that Congress’s initial relief bills, like the $2 trillion CARES Act, were ill-suited to their business. Three-quarters of loan funds, for example, must go to payroll expenses within two months — though many promoters have had to furlough their employees, and worry it may be half a year before they have another show to staff. The new trade group has retained Akin Gump Strauss Hauer & Feld, the powerhouse lobbying firm, and its requests for lawmakers include tax relief and more flexible loan programs.
From https://www.nytimes.com/2020/05/06/arts/music/independent-venues-coronavirus.html
The group does not include any venues owned by AEG or Live Nation.
Like other small companies, the venue operators say that Congress’s initial relief bills, like the $2 trillion CARES Act, were ill-suited to their business. Three-quarters of loan funds, for example, must go to payroll expenses within two months — though many promoters have had to furlough their employees, and worry it may be half a year before they have another show to staff. The new trade group has retained Akin Gump Strauss Hauer & Feld, the powerhouse lobbying firm, and its requests for lawmakers include tax relief and more flexible loan programs.
From https://www.nytimes.com/2020/05/06/arts/music/independent-venues-coronavirus.html
WSJ video: slow consumer spending=possible slow recovery
https://www.wsj.com/video/the-latest-consumer-spending-report-explained/14661D9B-8251-43EB-B082-EDDE09187E2F.html
https://www.wsj.com/video/the-latest-consumer-spending-report-explained/14661D9B-8251-43EB-B082-EDDE09187E2F.html
EU Consumer Group Says Amazon/eBay Should Be Liable For Faulty Goods
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May 5, 2020Online marketplaces such as Amazon and eBay should be liable for any faulty and unsafe goods they sell, claimed the EU’s biggest consumer group, as Brussels prepares to overhaul its rules for internet platforms, reported the Financial Times.
The EU consumers’ organization (Beuc), which represents consumer bodies across 32 countries, accused online platforms of selling a wide range of goods that do not comply with EU safety standards.
In a test in February of 250 electrical goods, toys, cosmetics, and other products from Amazon, AliExpress, eBay, and Wish, two-thirds failed European safety laws. “The consequences for consumers, including children, of buying such failing products could range from electric shock, to fire or suffocation,” stated Beuc.
Platforms also needed to take more responsibility during the coronavirus crisis for the “numerous products with untenable health claims being marketed online.” Maryant Fernández, senior digital policy officer at Beuc, said the pandemic illustrated perfectly “the power and influence that online platforms can have on our society and our economy.”
“E-commerce shops have become more relevant than ever during the pandemic and we need to hold them accountable,” she said. “It cannot continue to be the case that it’s very easy for a platform to make money from illegal online sales, but that it’s very difficult to put an end to them.”
Full Content: Financ
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May 5, 2020Online marketplaces such as Amazon and eBay should be liable for any faulty and unsafe goods they sell, claimed the EU’s biggest consumer group, as Brussels prepares to overhaul its rules for internet platforms, reported the Financial Times.
The EU consumers’ organization (Beuc), which represents consumer bodies across 32 countries, accused online platforms of selling a wide range of goods that do not comply with EU safety standards.
In a test in February of 250 electrical goods, toys, cosmetics, and other products from Amazon, AliExpress, eBay, and Wish, two-thirds failed European safety laws. “The consequences for consumers, including children, of buying such failing products could range from electric shock, to fire or suffocation,” stated Beuc.
Platforms also needed to take more responsibility during the coronavirus crisis for the “numerous products with untenable health claims being marketed online.” Maryant Fernández, senior digital policy officer at Beuc, said the pandemic illustrated perfectly “the power and influence that online platforms can have on our society and our economy.”
“E-commerce shops have become more relevant than ever during the pandemic and we need to hold them accountable,” she said. “It cannot continue to be the case that it’s very easy for a platform to make money from illegal online sales, but that it’s very difficult to put an end to them.”
Full Content: Financ
California sue Uber and Lyft, alleging the ride-hailing companies have illegally treated their drivers as independent contractors
Misclassification is alleged to deprive drivers of worker protections and benefits such as minimum wage and unemployment insurance.
The lawsuit, brought by state Atty. Gen. Xavier Becerra and the city attorneys of Los Angeles, San Diego and San Francisco, seeks restitution for unpaid wages it says are owed to drivers, and it requests that the court force the companies to immediately classify their drivers as employees.
Full article: https://www.latimes.com/business/technology/story/2020-05-05/california-sues-uber-lyft-alleging-ab5-worker-misclassification
Misclassification is alleged to deprive drivers of worker protections and benefits such as minimum wage and unemployment insurance.
The lawsuit, brought by state Atty. Gen. Xavier Becerra and the city attorneys of Los Angeles, San Diego and San Francisco, seeks restitution for unpaid wages it says are owed to drivers, and it requests that the court force the companies to immediately classify their drivers as employees.
Full article: https://www.latimes.com/business/technology/story/2020-05-05/california-sues-uber-lyft-alleging-ab5-worker-misclassification
The consensus of investment gurus is that the stock market is overvalued, suggesting future problems for the rest of us.
By Don Allen Resnikoff
For those of us who pay some attention to financial news, Bloomberg and CNBC on TV, The WSJ Journal, etc., it is hard not to notice that most investment gurus think that the stock market is overvalued. The stories noted below are illustrative.
Here's what the Marketwatch piece has to say, in part:
An environment of low interest rates has set off a search for yield and created stretched valuations in risk assets, including the U.S. equity market, according to an International Monetary Fund report released Wednesday.
“Equity markets appear to be overvalued in Japan and the United States,” the IMF said, in its latest Global Financial Stability report.
The U.S. stock market just became overvalued since the spring. When markets have stretched valuations, it raises the possibility of sharp sudden adjustments, the report warned.
The IMF said investors seem to believe that the Federal Reserve and other central banks will respond quickly to sharp tightening in financial conditions, “hence implicitly providing insurance against significant declines in stock prices.”
If the stock market is overvalued, then what may follow is a correction, obviously. For those whose money comes from wages, and not stockholdings, the problems that may follow are similarly obvious. In the 2008 meltdown, a serious stock market correction was a companion to a recession that was very painful for ordinary consumers. The number of jobless workers more than doubled in the aftermath while the stock market lost more than half its value.
The New York Times reports that some veterans of that 2008 tailspin — the worst since the Great Depression — say today’s epidemic is hammering the economy in complex ways that could prove even more difficult to combat. “The problem is everyone in America is cutting back their consumption,” said Jason Furman, who led the Council of Economic Advisers during the Obama administration. “A lot of sectors are being hit, especially the services sector. A lot of income and spending is being reduced. That’s just an enormous shock to the economy.”
https://www.forbes.com/sites/garrettgunderson/2020/03/10/the-stock-market-is-overvalued-heres-why/#54814edefb7e
https://www.marketwatch.com/story/us-stock-market-is-overvalued-imf-says-2019-10-16
https://www.fool.com/investing/2020/04/29/the-market-is-overvalued-these-two-stocks-prove-it.aspx
By Don Allen Resnikoff
For those of us who pay some attention to financial news, Bloomberg and CNBC on TV, The WSJ Journal, etc., it is hard not to notice that most investment gurus think that the stock market is overvalued. The stories noted below are illustrative.
Here's what the Marketwatch piece has to say, in part:
An environment of low interest rates has set off a search for yield and created stretched valuations in risk assets, including the U.S. equity market, according to an International Monetary Fund report released Wednesday.
“Equity markets appear to be overvalued in Japan and the United States,” the IMF said, in its latest Global Financial Stability report.
The U.S. stock market just became overvalued since the spring. When markets have stretched valuations, it raises the possibility of sharp sudden adjustments, the report warned.
The IMF said investors seem to believe that the Federal Reserve and other central banks will respond quickly to sharp tightening in financial conditions, “hence implicitly providing insurance against significant declines in stock prices.”
If the stock market is overvalued, then what may follow is a correction, obviously. For those whose money comes from wages, and not stockholdings, the problems that may follow are similarly obvious. In the 2008 meltdown, a serious stock market correction was a companion to a recession that was very painful for ordinary consumers. The number of jobless workers more than doubled in the aftermath while the stock market lost more than half its value.
The New York Times reports that some veterans of that 2008 tailspin — the worst since the Great Depression — say today’s epidemic is hammering the economy in complex ways that could prove even more difficult to combat. “The problem is everyone in America is cutting back their consumption,” said Jason Furman, who led the Council of Economic Advisers during the Obama administration. “A lot of sectors are being hit, especially the services sector. A lot of income and spending is being reduced. That’s just an enormous shock to the economy.”
https://www.forbes.com/sites/garrettgunderson/2020/03/10/the-stock-market-is-overvalued-heres-why/#54814edefb7e
https://www.marketwatch.com/story/us-stock-market-is-overvalued-imf-says-2019-10-16
https://www.fool.com/investing/2020/04/29/the-market-is-overvalued-these-two-stocks-prove-it.aspx
D.C. is getting a pair of new hospitals
Excerpt of article by By Sara Gilgore and Drew Hansen – Washington Business Journal May 1, 2020, 2:39pm EDT
While two new D.C. hospitals aren’t done deals just yet, the District’s agreements for both projects bring more clarity to two situations that have been riddled with unknowns.
The new hospitals — a Ward 8 facility at the St. Elizabeths East campus in Southeast, to be run by George Washington University Hospital majority owner Universal Health Services Inc. (NYSE: UHS), and a new hospital on Howard University’s campus in Northwest — would create a comprehensive and integrated system of care for some of the city’s most vulnerable residents, a need only underscored by the coronavirus pandemic and health disparities that stand to further worsen patient outcomes.
See for full article: https://www.bizjournals.com/washington/news/2020/05/01/d-c-is-getting-a-pair-of-new-hospitals-here-are-5.html?ana=e_wash_bn_editorschoice_editorschoice&j=90506553&t=Breaking%20News&mkt_tok=eyJpIjoiTVRReFlUSTBZelprTkRreCIsInQiOiJGaDRwVVwvTEdlaWt2cnE3UGt5WGhDZDkwS0F5dm94MUdIa2pHVE9rOG5IVk5ERmFWMWwxaFlJY1E4MUVPMVhGV1h3SU1qNExlZFcwUE0zbktnUDVGNXZZN1JSQ0x0bjBpV3RiTUNLcmJDS1NSZUtPVUpRTU5sM3F2NEZ2QWpoeUlEd3YwNndzV29Yb0JvcmNrOTdMWG5nPT0ifQ%3D%3D
Excerpt of article by By Sara Gilgore and Drew Hansen – Washington Business Journal May 1, 2020, 2:39pm EDT
While two new D.C. hospitals aren’t done deals just yet, the District’s agreements for both projects bring more clarity to two situations that have been riddled with unknowns.
The new hospitals — a Ward 8 facility at the St. Elizabeths East campus in Southeast, to be run by George Washington University Hospital majority owner Universal Health Services Inc. (NYSE: UHS), and a new hospital on Howard University’s campus in Northwest — would create a comprehensive and integrated system of care for some of the city’s most vulnerable residents, a need only underscored by the coronavirus pandemic and health disparities that stand to further worsen patient outcomes.
See for full article: https://www.bizjournals.com/washington/news/2020/05/01/d-c-is-getting-a-pair-of-new-hospitals-here-are-5.html?ana=e_wash_bn_editorschoice_editorschoice&j=90506553&t=Breaking%20News&mkt_tok=eyJpIjoiTVRReFlUSTBZelprTkRreCIsInQiOiJGaDRwVVwvTEdlaWt2cnE3UGt5WGhDZDkwS0F5dm94MUdIa2pHVE9rOG5IVk5ERmFWMWwxaFlJY1E4MUVPMVhGV1h3SU1qNExlZFcwUE0zbktnUDVGNXZZN1JSQ0x0bjBpV3RiTUNLcmJDS1NSZUtPVUpRTU5sM3F2NEZ2QWpoeUlEd3YwNndzV29Yb0JvcmNrOTdMWG5nPT0ifQ%3D%3D
From Andy Medici – Washington Business Journal
Apr 30, 2020, 12:11pm EDT Updated Apr 30, 2020, 1:59pm EDT
The Federal Reserve has expanded its $600 billion Main Street Lending Program to serve much smaller businesses.
The move, announced Thursday, comes after the Federal Reserve accepted more than 2,200 comments about the proposed lending program from people, businesses and nonprofits. And while the program was first announced April 9, the Fed has yet to set a start date, saying that will be "announced soon."
As for the expanded program, here's what you need to know:
The Main Street Lending Program is funded by $75 billion from the the $2.3 trillion CARES Act signed into law March 27 and is part of a larger $454 billion in CARES Act funding earmarked for the Fed to help backstop programs meant to help businesses. The money bolsters the Fed’s ability to add credit to the existing monetary system, thus increasing the overall amount of dollars available to lend and fuels a slate of new programs meant to combat the economic damage caused by Covid-19 and social distancing measures put in place in recent weeks.
The other Federal Reserve programs include a loan facility for the PPP to allow banks to lend more to their customers by using existing loans as collateral for fresh money, as well as a new Municipal Liquidity Facility that will buy up to $500 billion in state and local governments' debt to allow them to continue to borrow at reasonable rates — and avoid drastic cuts in services and jobs when citizens and small businesses need them most.
The changes also come as hundreds of thousands of small businesses rush to claim a portion of the hundreds of billions of dollars set aside for the second round of the SBA's PPP, a forgivable loan in which most of the proceeds must go to payroll expenses. That money is expected to be fully authorized in the next few days.
Apr 30, 2020, 12:11pm EDT Updated Apr 30, 2020, 1:59pm EDT
The Federal Reserve has expanded its $600 billion Main Street Lending Program to serve much smaller businesses.
The move, announced Thursday, comes after the Federal Reserve accepted more than 2,200 comments about the proposed lending program from people, businesses and nonprofits. And while the program was first announced April 9, the Fed has yet to set a start date, saying that will be "announced soon."
As for the expanded program, here's what you need to know:
- The minimum loan amount under the program will now be $500,000 for new loans and priority loans, down from the originally proposed $1 million, opening up the program to smaller businesses. The "expanded" loan type will be a minimum of $10 million, designed for larger businesses.
- The ceiling for loans will also be raised to companies with up to 15,000 employees or up to $5 billion in annual revenue, compared with original thresholds of 10,000 employees or $2.5 billion in revenue when the program was first announced. That means much larger companies will now qualify for the program.
- There will be a new type of "priority loan" in which the Federal Reserve will buy 85% of the loan made by a bank, as opposed to the 95% the Fed will buy through its Main Street New Loan Facility and Main Street Expanded Loan Facility, announced earlier this month.
- All the loans will be for four-year terms with an adjustable rate of the London Interbank Offered Rate, or Libor, plus 3%,which means a range of around 2.5% to 4%, with interest and payments deferred for a year.
- Companies that have received funding from the Small Business Administration's Paycheck Protection Program can still be eligible for Main Street funding provided they meet the latter program's criteria.
- For qualifying businesses, the process is the same as with the PPP: Go through partner banks to either take out new Main Street loans or receive boosts to existing loans. The businesses must “commit to make reasonable efforts” to maintain staffs and payroll.
The Main Street Lending Program is funded by $75 billion from the the $2.3 trillion CARES Act signed into law March 27 and is part of a larger $454 billion in CARES Act funding earmarked for the Fed to help backstop programs meant to help businesses. The money bolsters the Fed’s ability to add credit to the existing monetary system, thus increasing the overall amount of dollars available to lend and fuels a slate of new programs meant to combat the economic damage caused by Covid-19 and social distancing measures put in place in recent weeks.
The other Federal Reserve programs include a loan facility for the PPP to allow banks to lend more to their customers by using existing loans as collateral for fresh money, as well as a new Municipal Liquidity Facility that will buy up to $500 billion in state and local governments' debt to allow them to continue to borrow at reasonable rates — and avoid drastic cuts in services and jobs when citizens and small businesses need them most.
The changes also come as hundreds of thousands of small businesses rush to claim a portion of the hundreds of billions of dollars set aside for the second round of the SBA's PPP, a forgivable loan in which most of the proceeds must go to payroll expenses. That money is expected to be fully authorized in the next few days.
PBS Newshour presents Main Street Alliance's Amanda Ballantyne and Brad Close of the National Federation of Independent Businesses and others on shortfalls of CARES Act help to very small businesses and non-profits
https://www.youtube.com/watch?v=hgjoYlrxLW8
The distribution of CARES Act that money continues to be a source of controversy, and the program has been mired with technical problems. PBS reports and talks to the Main Street Alliance's Amanda Ballantyne and Brad Close of the National Federation of Independent Businesses.
The discussants do a good job of pointing out shortfalls in the CARES Act.
Postin by DAR-- opinon expressed is his responsibility
https://www.youtube.com/watch?v=hgjoYlrxLW8
The distribution of CARES Act that money continues to be a source of controversy, and the program has been mired with technical problems. PBS reports and talks to the Main Street Alliance's Amanda Ballantyne and Brad Close of the National Federation of Independent Businesses.
The discussants do a good job of pointing out shortfalls in the CARES Act.
Postin by DAR-- opinon expressed is his responsibility
It is bad but it could be even worse: Because farmers have been plowing under vegetable fields, dumping milk and smashing eggs that cannot be sold because the coronavirus pandemic has shut down restaurants, hotels and schools, there is action by the Trump administration and state governments, as well as grass-roots efforts.
Over the next few weeks, the Department of Agriculture will begin spending $300 million a month to buy surplus vegetables, fruit, milk and meat from distributors and ship them to food banks. The federal grants will also subsidize boxing up the purchases and transporting them to charitable groups — tasks that farmers have said they cannot afford, giving them few options other than to destroy the food.
Gov. Andrew M. Cuomo’s office has said New York will give food banks $25 million to buy products made from excess milk on farms in the state; the state is working with manufacturers like Chobani, Hood and Cabot to turn the milk into cheese, yogurt and butter. Some of the state subsidy can also be used to buy apples, potatoes and other produce that farms have in storage.
Nationally, the Dairy Farmers of America, the largest dairy co-op in the United States, has diverted almost a quarter of a million gallons of milk to food banks.
“It’s just a drop in the bucket,” said Jackie Klippenstein, a senior vice president at the co-op. “But we had to do something.”
* * *
“These are not insolvable problems,” said Marion Nestle, a food studies professor at New York University. “These are problems that require a lot of people, sums of money and some thought. If the government were really interested in making sure that hungry people got fed and farmers were supported, they would figure out a way to do it.”
From https://www.msn.com/en-us/news/us/we-had-to-do-something-trying-to-prevent-massive-food-waste/ar-BB13wa4I?ocid=msedgdhp
Private school Sidwell Friends decision to accept Federal Cares Act fund makes the news
On Wednesday, the board of trustees at Sidwell Friends, Chelsea Clinton’s alma mater, said in a memo to the school community that it would accept a $5.2 million loan “in light of actual and anticipated shortfalls, mounting uncertainty” and “the importance of maintaining employment levels.”
“We recognize that our decision to accept this loan may draw criticism from some quarters of the community,” said the school, which has a $53.4 million endowment, “but are fully united in our decision.”
Continue reading the story https://www.nytimes.com/2020/04/29/us/prep-schools-coronavirus-loans.html#after-story-ad-2
Sidwell Friends Philosophy Statement-- https://www.sidwell.edu/about
Sidwell Friends School is a dynamic educational community grounded in the Quaker belief that there is “that of God in everyone.” Individually and collectively, we challenge ourselves to pursue excellence in academic, athletic, and artistic realms. We are committed to the joys of exploration and discovery. Differences among us enhance intellectual inquiry, expand understanding, and deepen empathy. The Quaker pillars of the School inspire active engagement in environmental stewardship, global citizenship, and service. We find strength in reflection and shared silence. At the heart of each endeavor, we strive to discern deeper truths about ourselves and our common humanity, preparing students and adults to “let their lives speak.”
Board of Trustees
Approved September 10, 2015
On Wednesday, the board of trustees at Sidwell Friends, Chelsea Clinton’s alma mater, said in a memo to the school community that it would accept a $5.2 million loan “in light of actual and anticipated shortfalls, mounting uncertainty” and “the importance of maintaining employment levels.”
“We recognize that our decision to accept this loan may draw criticism from some quarters of the community,” said the school, which has a $53.4 million endowment, “but are fully united in our decision.”
Continue reading the story https://www.nytimes.com/2020/04/29/us/prep-schools-coronavirus-loans.html#after-story-ad-2
Sidwell Friends Philosophy Statement-- https://www.sidwell.edu/about
Sidwell Friends School is a dynamic educational community grounded in the Quaker belief that there is “that of God in everyone.” Individually and collectively, we challenge ourselves to pursue excellence in academic, athletic, and artistic realms. We are committed to the joys of exploration and discovery. Differences among us enhance intellectual inquiry, expand understanding, and deepen empathy. The Quaker pillars of the School inspire active engagement in environmental stewardship, global citizenship, and service. We find strength in reflection and shared silence. At the heart of each endeavor, we strive to discern deeper truths about ourselves and our common humanity, preparing students and adults to “let their lives speak.”
Board of Trustees
Approved September 10, 2015
Maryland cancels a $12.5 million order of masks and other personal protective equipment from a politically connected firm, and had asked the state attorney general’s office to investigate whether the company misrepresented its ability to deliver the badly needed supplies.
The state signed a purchase order on April 1 to buy the supplies from Blue Flame Medical, a recently launched firm led by John Thomas, a Republican political strategist, and Mike Gula, a Republican fund-raiser, according to a state official. Maryland paid the firm a 50 percent down payment of $6,271,000, the official said.
The shipping date for the order was April 14, and Maryland’s Department of General Services issued a warning letter to the company on Thursday, when there was no indication that the supplies were on their way, the official said. State officials then moved to cancel the order.
“We have determined that since it has been one month since the order was placed with no confirmation of shipment, we are in the process of canceling the order and have referred this matter to the attorney general,” said Nick Cavey, a spokesman for the Maryland Department of General Services.
From: https://www.nytimes.com/2020/05/02/us/coronavirus-updates.html
The state signed a purchase order on April 1 to buy the supplies from Blue Flame Medical, a recently launched firm led by John Thomas, a Republican political strategist, and Mike Gula, a Republican fund-raiser, according to a state official. Maryland paid the firm a 50 percent down payment of $6,271,000, the official said.
The shipping date for the order was April 14, and Maryland’s Department of General Services issued a warning letter to the company on Thursday, when there was no indication that the supplies were on their way, the official said. State officials then moved to cancel the order.
“We have determined that since it has been one month since the order was placed with no confirmation of shipment, we are in the process of canceling the order and have referred this matter to the attorney general,” said Nick Cavey, a spokesman for the Maryland Department of General Services.
From: https://www.nytimes.com/2020/05/02/us/coronavirus-updates.html
The text of the CDC recommendations affected by the President's Executive Order that meat plants open
https://covid.sd.gov/docs/smithfield_recs.pdf
Court orders Smithfield Foods to comply with health guidelines
See https://www.meatpoultry.com/articles/23035-court-orders-smithfield-foods-to-comply-with-health-guidelines
Washington Post: President's Executive Order attempts to countermand the Court Order and CDC directives on safety in meat plants affected by COVID-19
https://www.washingtonpost.com/business/2020/04/28/trump-meat-plants-dpa/
https://covid.sd.gov/docs/smithfield_recs.pdf
Court orders Smithfield Foods to comply with health guidelines
See https://www.meatpoultry.com/articles/23035-court-orders-smithfield-foods-to-comply-with-health-guidelines
Washington Post: President's Executive Order attempts to countermand the Court Order and CDC directives on safety in meat plants affected by COVID-19
https://www.washingtonpost.com/business/2020/04/28/trump-meat-plants-dpa/
US Chamber of Commerce warns of impending harmful coronavirus lawsuit epidemic
April 24, 2020The world has not seen a pandemic like the coronavirus in a century. It will cost millions of Americans their jobs and tens of thousands of Americans their lives. While our nation struggles to address this pandemic and the recession it has created, we also face the possibility of a “lawsuit epidemic,” according to an editorial in The Wall Street Journal.
As the Journal writes, due to COVID-19 related stay at home orders, media consumption is at an all-time high, and the plaintiff bar is using that to their advantage by airing thousands of advertisements seeking clients. With America being inundated with these ads, it is likely that we will see a wave of COVID-19 related lawsuits. These lawsuits will cripple our nation’s economic recovery, and so it falls to Congress to ensure those businesses and healthcare workers operating in good faith aren’t rewarded with a lawsuit.
https://www.instituteforlegalreform.com/resource/the-wall-street-journal--stopping-a-lawsuit-epidemic
On the other hand, some say that Congressional action to limit company liability is a bad idea:
Unions and labor groups are concerned that any congressional action to limit company liability could put workers at risk. Jona Rosen, associate general counsel for the AFL-CIO, said the union opposes such proposals as they diminish employers' responsibility to provide a safe environment for workers during the crisis. She said the deadly outbreaks among meatpacking workers and transit workers reveal the "insufficient protections and insufficient concerns about the health and safety of people working in these jobs."
https://www.cnn.com/2020/04/29/business/business-liability-congress/index.html
April 24, 2020The world has not seen a pandemic like the coronavirus in a century. It will cost millions of Americans their jobs and tens of thousands of Americans their lives. While our nation struggles to address this pandemic and the recession it has created, we also face the possibility of a “lawsuit epidemic,” according to an editorial in The Wall Street Journal.
As the Journal writes, due to COVID-19 related stay at home orders, media consumption is at an all-time high, and the plaintiff bar is using that to their advantage by airing thousands of advertisements seeking clients. With America being inundated with these ads, it is likely that we will see a wave of COVID-19 related lawsuits. These lawsuits will cripple our nation’s economic recovery, and so it falls to Congress to ensure those businesses and healthcare workers operating in good faith aren’t rewarded with a lawsuit.
https://www.instituteforlegalreform.com/resource/the-wall-street-journal--stopping-a-lawsuit-epidemic
On the other hand, some say that Congressional action to limit company liability is a bad idea:
Unions and labor groups are concerned that any congressional action to limit company liability could put workers at risk. Jona Rosen, associate general counsel for the AFL-CIO, said the union opposes such proposals as they diminish employers' responsibility to provide a safe environment for workers during the crisis. She said the deadly outbreaks among meatpacking workers and transit workers reveal the "insufficient protections and insufficient concerns about the health and safety of people working in these jobs."
https://www.cnn.com/2020/04/29/business/business-liability-congress/index.html
Leading Cancer Treatment Center Admits to Antitrust Crime and Agrees to Pay $100 Million Criminal Penalty -- Florida Cancer Specialists & Research
Institute LLC (FCS), an oncology group headquartered in Fort Myers, Florida, was charged with conspiring to allocate medical and radiation oncology treatments for cancer patients in Southwest Florida, the Department of Justice announced. This charge is the first in the department’s ongoing investigation into market allocation in the oncology industry.
According to a one-count felony charge filed today in the U.S. District Court in Fort Myers, Florida, FCS participated in a criminal antitrust conspiracy with a competing oncology group in Collier, Lee, and Charlotte counties (Southwest Florida). FCS and its co-conspirators agreed not to compete to provide chemotherapy and radiation treatments to cancer patients in Southwest Florida. Beginning as early as 1999 and continuing until at least 2016, FCS entered into an illegal agreement that allocated chemotherapy treatments to FCS and radiation treatments to a competing oncology group. This conspiracy allowed FCS to operate with minimal competition in Southwest Florida and limited valuable integrated care options and choices for cancer patients.
The Antitrust Division also announced a deferred prosecution agreement (DPA) resolving the charge against FCS, under which the company admitted to conspiring to allocate chemotherapy and radiation treatments for cancer patients. FCS has agreed to pay a $100 million criminal penalty —the statutory maximum— and to cooperate fully with the Antitrust Division’s ongoing investigation. FCS has also agreed to maintain an effective compliance program designed to prevent and detect criminal antitrust violations.
From: https://www.justice.gov/opa/pr/leading-cancer-treatment-center-admits-antitrust-crime-and-agrees-pay-100-million-criminal
Robert Connolly, Former Antitrust Division prosecutor, published the following comment:.
Interesting, but sad to see case. Market Allocation. Another Deferred Prosecution Agreement. A continuing investigation. And very sad to see collusion against cancer patients. Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division said "For almost two decades, FCS and its co-conspirators agreed to cheat by limiting treatment options available to cancer patients in order to line their pockets. The Antitrust Division is continuing its investigation to ensure that all responsible participants are held accountable to the maximum extent possible.”
Institute LLC (FCS), an oncology group headquartered in Fort Myers, Florida, was charged with conspiring to allocate medical and radiation oncology treatments for cancer patients in Southwest Florida, the Department of Justice announced. This charge is the first in the department’s ongoing investigation into market allocation in the oncology industry.
According to a one-count felony charge filed today in the U.S. District Court in Fort Myers, Florida, FCS participated in a criminal antitrust conspiracy with a competing oncology group in Collier, Lee, and Charlotte counties (Southwest Florida). FCS and its co-conspirators agreed not to compete to provide chemotherapy and radiation treatments to cancer patients in Southwest Florida. Beginning as early as 1999 and continuing until at least 2016, FCS entered into an illegal agreement that allocated chemotherapy treatments to FCS and radiation treatments to a competing oncology group. This conspiracy allowed FCS to operate with minimal competition in Southwest Florida and limited valuable integrated care options and choices for cancer patients.
The Antitrust Division also announced a deferred prosecution agreement (DPA) resolving the charge against FCS, under which the company admitted to conspiring to allocate chemotherapy and radiation treatments for cancer patients. FCS has agreed to pay a $100 million criminal penalty —the statutory maximum— and to cooperate fully with the Antitrust Division’s ongoing investigation. FCS has also agreed to maintain an effective compliance program designed to prevent and detect criminal antitrust violations.
From: https://www.justice.gov/opa/pr/leading-cancer-treatment-center-admits-antitrust-crime-and-agrees-pay-100-million-criminal
Robert Connolly, Former Antitrust Division prosecutor, published the following comment:.
Interesting, but sad to see case. Market Allocation. Another Deferred Prosecution Agreement. A continuing investigation. And very sad to see collusion against cancer patients. Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division said "For almost two decades, FCS and its co-conspirators agreed to cheat by limiting treatment options available to cancer patients in order to line their pockets. The Antitrust Division is continuing its investigation to ensure that all responsible participants are held accountable to the maximum extent possible.”
AG James' Statement on Firing of Amazon Worker Who Organized Walkout
NEW YORK – New York Attorney General Letitia James tonight released the following statement in response to news that Amazon employee Chris Smalls was terminated today after he organized a walkout to protest health conditions at his workplace, amidst the coronavirus disease 2019 (COVID-19) outbreak:
“It is disgraceful that Amazon would terminate an employee who bravely stood up to protect himself and his colleagues. At the height of a global pandemic, Chris Smalls and his colleagues publicly protested the lack of precautions that Amazon was taking to protect them from COVID-19. Today, Chris Smalls was fired. In New York, the right to organize is codified into law, and any retaliatory action by management related thereto is strictly prohibited. At a time when so many New Yorkers are struggling and are deeply concerned about their safety, this action was also immoral and inhumane. The Office of the Attorney General is considering all legal options, and I am calling on the National Labor Relations Board to investigate this incident.”
Employees that believe their employers are in violation of either existing labor laws or recently issued New York State executive orders should contact the Office of the Attorney General by emailing [email protected] or calling (212) 416-8700 to file a complaint.
https://ag.ny.gov/press-release/2020/ag-james-statement-firing-amazon-worker-who-organized-walkout
NEW YORK – New York Attorney General Letitia James tonight released the following statement in response to news that Amazon employee Chris Smalls was terminated today after he organized a walkout to protest health conditions at his workplace, amidst the coronavirus disease 2019 (COVID-19) outbreak:
“It is disgraceful that Amazon would terminate an employee who bravely stood up to protect himself and his colleagues. At the height of a global pandemic, Chris Smalls and his colleagues publicly protested the lack of precautions that Amazon was taking to protect them from COVID-19. Today, Chris Smalls was fired. In New York, the right to organize is codified into law, and any retaliatory action by management related thereto is strictly prohibited. At a time when so many New Yorkers are struggling and are deeply concerned about their safety, this action was also immoral and inhumane. The Office of the Attorney General is considering all legal options, and I am calling on the National Labor Relations Board to investigate this incident.”
Employees that believe their employers are in violation of either existing labor laws or recently issued New York State executive orders should contact the Office of the Attorney General by emailing [email protected] or calling (212) 416-8700 to file a complaint.
https://ag.ny.gov/press-release/2020/ag-james-statement-firing-amazon-worker-who-organized-walkout
Fixing the CARES Act and its Payroll Protection Plan to help really small businesses, and non-profits
Posting by Don Allen Resnikoff
The media is full of sorrowful stories of very small business owners who have applied for help under the CARES Act and its Payroll Protection Plan (PPP) and been rejected. The media also reports stories of large public companies that qualified as small under the Cares Act and received large sums of money.
The New York Times reports that the average PPP loan size was about $200,000, but 4 percent of the loans accounted for 43 percent of the dollars. Nearly three-quarters of the loans made were for less than $150,000, but those loans accounted for only 17 percent of the funds. That report is based on government data at https://www.sba.gov/sites/default/files/2020-04/PPP%20Deck%20copy.pdf
The skew of lending to bigger businesses has fueled an outcry against companies like Ruth’s Chris Steak House, which got $20 million, and Shake Shack, which received $10 million. They were part of the 0.25 percent of the 1.66 million applicants that each received more than $5 million. Both companies have public-relations concerns and later announced that they would return the money, but many other similarly large companies that are less concerned with public relations did not return money.
There has also been an outcry against banks that gave CARES Act lending priority to relatively large businesses that were established bank customers, while giving short shrift to very small businesses. The experience of JPMorgan Chase customers, as recounted by the Philadephia Enquirer, tells the story. JPMorgan said it approved only 26,500 loans out of the 300,000 PPP applications, or about 9%. Of those, about 8,500 went to clients of JPMorgan’s elite wealth management and corporate banking departments. Most who applied through those bank departments were approved, unlike those who applied without that edge.
Some small businesses went so far as to bring litigation challenging Bank of America’s shutting them out, based on a Bank requirement that PPP applicants have a previous relationship with the Bank and have no lending relationship with any other bank. (See https://www.reuters.com/article/us-otc-ppp-idUSKCN21V20K)
Arguably the most important complaints about the CARES Act are not about business practices by banks that exclude very small business borrowers, or greed of big company borrowers like Shake Shack and Ruth’s Chris. As important as these are, the more important complaints may be about shortfalls in the legislative drafting of the CARES Act, particularly shortfalls not remedied by the April 23 Congressional statute providing more than $300 billion in new funding for the PPP. The April 23 statute did include some reforms, including broadening of lending institutions who can make PPP loans. The April 23 statute includes $60 billion of set-asides for issuance of PPP loans by community development lenders, credit unions and certain other smaller lenders.
It is important to focus on further needed improvements that will allow the CARES Act to better achieve its announced purpose, because the statute passed by the House on April 23, 2020 may not be the last.
Proposals discussed here for further improving the CARES Act simply reflect a few of the reform proposals previously raised by industry players. They illustrate the need for more discussion of improvements.
Perhaps the most obvious suggestion for improvement concerns the amounts of money available for small business and non-profit relief. The amounts made available in the new legislation are likely to run out well before all qualified small businesses and non-profits receive money. More money is likely to be needed.
Another obvious suggestion concerns the sort of legislative loopholes that allowed Ruth's Chis and Shake Shack to get money. The government has since published new guidance discouraging public companies from using the government program and urging those that did take the money to return it. But that guidance may not be a sufficient cure; better legislative drafting might help. It should be clear that large companies do not qualify for PPP loans.
Also, the entities chosen to administer the CARES program might be further improved -- the most recent statute's broadening of lending institutions that administer the PPP may not be enough. Alternatives include administering the CARES Act programs through strengthened government entities, and further expanding the list of private entities that can administer PPP loans.
With regard to financial institutions authorized to administer the PPP program, a major proposal is eliminating or reducing the requirement of the CARES Act that lenders apply the Bank Secrecy Act (BSA) provisions that require the lending institution to have a robust anti-money laundering (AML) and Know-Your-Customer (KYC) compliance program. The thought is that eliminating or reducing those requirements will facilitate lending to very small businesses and non-profits that are not well known to the lender. (See the April 21 commentary by Manatt, Phelps & Phillips, LLP at https://www.jdsupra.com/legalnews/bank-secrecy-act-compliance-issues-for-79714/)
A recent American Bankers Association letter reflected the concern that mandatory Know-Your-Customer (KYC) and anti-money laundering (AML) requirements impede CARES Act PPP loan process for small business applicants. The letter suggested the legislative improvement that banks be “exempt from collecting, identifying, verifying and certifying KYC/AMLinformation for accounts set up to accept funds provided under the CARES Act. This can easily be accomplished by exempting these loans from the definition of new accounts for the purposes of FinCEN requirements.” See https://www.aba.com/-/media/documents/letters-to-congress-and-regulators/aba-response-to-senators-kaine-coons-and-king-04132020.pdf?rev=2e24478b58c244cc8bf433d9eb3d7d7f
The perceived need for lending institutions to reach out into the broader community is not a new idea. The Community Reinvestment Act (CRA (12 U.S.C. 2901 et seq.) is a decades old statute designed to encourage regulated financial institutions to help meet the credit needs of their entire communities. CRA regulations require relevant government agencies to assess lending institutions’ record of helping to meet the credit needs of its community, including in low- and moderate-income neighborhoods.
Some have questioned the basic concept of keying small business loans to payroll costs. They suggest that the current focus on payroll prejudices businesses whose major expenses lie elsewhere, such as in storefront rent. One publication wrote: “PPP is a good start, but there's more to a business than meeting payroll . . . . The SBA has allowed PPP recipients some discretion in using loans to support overhead such as utilities, rent and debt service. But if, as the Business Journals survey suggests, most of those funds will be used for salaries and health care benefits for workers, then many PPP recipients will still be needing cash for other operating needs.”
Finally, with regard to regulatory agency implementation, some have wondered whether application requirements could be simplified so that forms like the one at https://home.treasury.gov/system/files/136/PPP-Borrower-Application-Form-Fillable.pdf could be more accessible to small businesses and non-profits that lack sophisticated accounting help. One suggestion would allow applicants to rely on IRS and other previously filed forms that contain needed information such as employee payroll data.
In summary, it is important to focus on further needed improvements that will allow the CARES Act to better achieve its announced purpose, because the statute passed by the House on April 23, 2020 may not be the last. Proposals discussed here for further improving the CARES Act simply reflect a few of the reform proposals previously raised by industry players. They illustrate the need for more discussion of improvements.
Don Allen Resnikoff takes full responsibility for the content of his posting
_
Posting by Don Allen Resnikoff
The media is full of sorrowful stories of very small business owners who have applied for help under the CARES Act and its Payroll Protection Plan (PPP) and been rejected. The media also reports stories of large public companies that qualified as small under the Cares Act and received large sums of money.
The New York Times reports that the average PPP loan size was about $200,000, but 4 percent of the loans accounted for 43 percent of the dollars. Nearly three-quarters of the loans made were for less than $150,000, but those loans accounted for only 17 percent of the funds. That report is based on government data at https://www.sba.gov/sites/default/files/2020-04/PPP%20Deck%20copy.pdf
The skew of lending to bigger businesses has fueled an outcry against companies like Ruth’s Chris Steak House, which got $20 million, and Shake Shack, which received $10 million. They were part of the 0.25 percent of the 1.66 million applicants that each received more than $5 million. Both companies have public-relations concerns and later announced that they would return the money, but many other similarly large companies that are less concerned with public relations did not return money.
There has also been an outcry against banks that gave CARES Act lending priority to relatively large businesses that were established bank customers, while giving short shrift to very small businesses. The experience of JPMorgan Chase customers, as recounted by the Philadephia Enquirer, tells the story. JPMorgan said it approved only 26,500 loans out of the 300,000 PPP applications, or about 9%. Of those, about 8,500 went to clients of JPMorgan’s elite wealth management and corporate banking departments. Most who applied through those bank departments were approved, unlike those who applied without that edge.
Some small businesses went so far as to bring litigation challenging Bank of America’s shutting them out, based on a Bank requirement that PPP applicants have a previous relationship with the Bank and have no lending relationship with any other bank. (See https://www.reuters.com/article/us-otc-ppp-idUSKCN21V20K)
Arguably the most important complaints about the CARES Act are not about business practices by banks that exclude very small business borrowers, or greed of big company borrowers like Shake Shack and Ruth’s Chris. As important as these are, the more important complaints may be about shortfalls in the legislative drafting of the CARES Act, particularly shortfalls not remedied by the April 23 Congressional statute providing more than $300 billion in new funding for the PPP. The April 23 statute did include some reforms, including broadening of lending institutions who can make PPP loans. The April 23 statute includes $60 billion of set-asides for issuance of PPP loans by community development lenders, credit unions and certain other smaller lenders.
It is important to focus on further needed improvements that will allow the CARES Act to better achieve its announced purpose, because the statute passed by the House on April 23, 2020 may not be the last.
Proposals discussed here for further improving the CARES Act simply reflect a few of the reform proposals previously raised by industry players. They illustrate the need for more discussion of improvements.
Perhaps the most obvious suggestion for improvement concerns the amounts of money available for small business and non-profit relief. The amounts made available in the new legislation are likely to run out well before all qualified small businesses and non-profits receive money. More money is likely to be needed.
Another obvious suggestion concerns the sort of legislative loopholes that allowed Ruth's Chis and Shake Shack to get money. The government has since published new guidance discouraging public companies from using the government program and urging those that did take the money to return it. But that guidance may not be a sufficient cure; better legislative drafting might help. It should be clear that large companies do not qualify for PPP loans.
Also, the entities chosen to administer the CARES program might be further improved -- the most recent statute's broadening of lending institutions that administer the PPP may not be enough. Alternatives include administering the CARES Act programs through strengthened government entities, and further expanding the list of private entities that can administer PPP loans.
With regard to financial institutions authorized to administer the PPP program, a major proposal is eliminating or reducing the requirement of the CARES Act that lenders apply the Bank Secrecy Act (BSA) provisions that require the lending institution to have a robust anti-money laundering (AML) and Know-Your-Customer (KYC) compliance program. The thought is that eliminating or reducing those requirements will facilitate lending to very small businesses and non-profits that are not well known to the lender. (See the April 21 commentary by Manatt, Phelps & Phillips, LLP at https://www.jdsupra.com/legalnews/bank-secrecy-act-compliance-issues-for-79714/)
A recent American Bankers Association letter reflected the concern that mandatory Know-Your-Customer (KYC) and anti-money laundering (AML) requirements impede CARES Act PPP loan process for small business applicants. The letter suggested the legislative improvement that banks be “exempt from collecting, identifying, verifying and certifying KYC/AMLinformation for accounts set up to accept funds provided under the CARES Act. This can easily be accomplished by exempting these loans from the definition of new accounts for the purposes of FinCEN requirements.” See https://www.aba.com/-/media/documents/letters-to-congress-and-regulators/aba-response-to-senators-kaine-coons-and-king-04132020.pdf?rev=2e24478b58c244cc8bf433d9eb3d7d7f
The perceived need for lending institutions to reach out into the broader community is not a new idea. The Community Reinvestment Act (CRA (12 U.S.C. 2901 et seq.) is a decades old statute designed to encourage regulated financial institutions to help meet the credit needs of their entire communities. CRA regulations require relevant government agencies to assess lending institutions’ record of helping to meet the credit needs of its community, including in low- and moderate-income neighborhoods.
Some have questioned the basic concept of keying small business loans to payroll costs. They suggest that the current focus on payroll prejudices businesses whose major expenses lie elsewhere, such as in storefront rent. One publication wrote: “PPP is a good start, but there's more to a business than meeting payroll . . . . The SBA has allowed PPP recipients some discretion in using loans to support overhead such as utilities, rent and debt service. But if, as the Business Journals survey suggests, most of those funds will be used for salaries and health care benefits for workers, then many PPP recipients will still be needing cash for other operating needs.”
Finally, with regard to regulatory agency implementation, some have wondered whether application requirements could be simplified so that forms like the one at https://home.treasury.gov/system/files/136/PPP-Borrower-Application-Form-Fillable.pdf could be more accessible to small businesses and non-profits that lack sophisticated accounting help. One suggestion would allow applicants to rely on IRS and other previously filed forms that contain needed information such as employee payroll data.
In summary, it is important to focus on further needed improvements that will allow the CARES Act to better achieve its announced purpose, because the statute passed by the House on April 23, 2020 may not be the last. Proposals discussed here for further improving the CARES Act simply reflect a few of the reform proposals previously raised by industry players. They illustrate the need for more discussion of improvements.
Don Allen Resnikoff takes full responsibility for the content of his posting
_
Bill Baer: Antitrust enforcers must be vigilant in attacking efforts by firms to limit competition in a time of crisis.
Baer writes: Those of us involved over the years in investigating and prosecuting price fixing and bid rigging know well that the urge to cartelize markets is strongest in the face of falling prices triggered by reduced demand. Although it is often rationalized during tough economic times as “not raising prices, just stabilizing them,” or “just protecting our margins, not increasing them,” agreements between companies that restrict competition are per se unlawful and subject the companies and their executives to criminal prosecution. Consumers deserve the benefit of market competition regardless of where we are in the economic cycle.
Excerpt from: https://www.brookings.edu/blog/techtank/2020/04/22/why-we-need-antitrust-enforcement-during-the-covid-19-pandemic/
Baer writes: Those of us involved over the years in investigating and prosecuting price fixing and bid rigging know well that the urge to cartelize markets is strongest in the face of falling prices triggered by reduced demand. Although it is often rationalized during tough economic times as “not raising prices, just stabilizing them,” or “just protecting our margins, not increasing them,” agreements between companies that restrict competition are per se unlawful and subject the companies and their executives to criminal prosecution. Consumers deserve the benefit of market competition regardless of where we are in the economic cycle.
Excerpt from: https://www.brookings.edu/blog/techtank/2020/04/22/why-we-need-antitrust-enforcement-during-the-covid-19-pandemic/
New Visa and MasterCard coding procedures increase the price of mobile payment apps drawing on your credit card
To use an app for cash transfers, customers typically connect it to an outside payment source. Most users link their debit card or a bank account, since in most cases that lets them transfer money without charge. A few apps, however, also give customers the option to link to a credit card and pay a small fee (about 3 percent) for “peer to peer” payments, like splitting the dinner tab. Those apps include PayPal and its Venmo arm, as well as Cash App, which is owned by Square. (Zelle, the app backed by traditional banks, doesn’t accept credit cards.)
But there has been a change in the way the money transfers are coded as they move through the Visa and Mastercard payment networks. That change enables banks to also charge their own, separate cash advance fees — typically $10 but sometimes much more — for payments made using credit cards on those networks. The fees don’t apply when customers make a purchase.
Card-issuing banks now ask that the apps and payment networks code cash transfers to distinguish them from purchases, and put higher fees on cash transfers. The coding change formally took effect in September.
Source: https://www.nytimes.com/2020/04/24/your-money/fees-mobile-app-payments.html DAR Comment: There is no indication in the NYT article concerning whether Visa and MasterCard or client banks coordinated the coding changes, or whether all or most banks follow similar fee practices for transactions newly coded as money transfers.
To use an app for cash transfers, customers typically connect it to an outside payment source. Most users link their debit card or a bank account, since in most cases that lets them transfer money without charge. A few apps, however, also give customers the option to link to a credit card and pay a small fee (about 3 percent) for “peer to peer” payments, like splitting the dinner tab. Those apps include PayPal and its Venmo arm, as well as Cash App, which is owned by Square. (Zelle, the app backed by traditional banks, doesn’t accept credit cards.)
But there has been a change in the way the money transfers are coded as they move through the Visa and Mastercard payment networks. That change enables banks to also charge their own, separate cash advance fees — typically $10 but sometimes much more — for payments made using credit cards on those networks. The fees don’t apply when customers make a purchase.
Card-issuing banks now ask that the apps and payment networks code cash transfers to distinguish them from purchases, and put higher fees on cash transfers. The coding change formally took effect in September.
Source: https://www.nytimes.com/2020/04/24/your-money/fees-mobile-app-payments.html DAR Comment: There is no indication in the NYT article concerning whether Visa and MasterCard or client banks coordinated the coding changes, or whether all or most banks follow similar fee practices for transactions newly coded as money transfers.
Bank Secrecy Act Compliance Issues for Small-Business Lending Under the CARES Act
With many banks and credit unions electing to limit Paycheck Protection Program (PPP) loans to existing customers, many nonbank lenders are scrambling to fill the gap and take part in the $349 billion program prior to the end of the application period on June 30, 2020. There is, however, at least one major obstacle preventing many nonbank lenders from qualifying to lend under the PPP—the requirement under Section 1102 of the CARES Act that they apply “the [Bank Secrecy Act (BSA)] requirements of an equivalent federally regulated financial institution,” which requires having a robust anti-money laundering (AML) and Know-Your-Customer (KYC) compliance program.
Basic Elements of BSA Compliance for Nonbank Financial Institutions
Compliance with the BSA requires financial institutions to, among other things, maintain an adequate AML and KYC program, which must be founded upon the well-known “five pillars” of BSA compliance: (1) a system of internal controls to ensure ongoing compliance, (2) independent testing for compliance, (3) a designated AML officer to coordinate and monitor day-to-day compliance, (4) ongoing training for applicable personnel, and (5) procedures for ongoing customer due diligence that include, among other things, procedures for identifying the “beneficial ownership” of legal entity customers.
Compliance with the BSA also requires that the institution file currency transaction reports (CTRs) for cash transactions involving more than $10,000, and file suspicious activity reports (SARs) when the institution “knows, suspects, or has reason to suspect that the transaction (or pattern of transactions of which the transaction is a part)” involves money laundering, is designed to evade the requirements of the BSA, serves no apparent lawful purpose, or facilitates criminal activity.
Developing and maintaining an adequate AML and KYC compliance program can be both time-consuming and expensive, which is why many fintechs and other prospective nonbank lenders have been effectively shut out of PPP lending (fintechs with payments businesses are a notable exception, as they already have these programs in place). Developing an AML program can take many weeks, if not months, making it unlikely that a prospective PPP lender without an existing compliant program could qualify well enough in advance of the program’s application deadline of June 30, 2020. Additionally, becoming BSA compliant may be cost-prohibitive for many prospective PPP lenders when weighed against the risks of making loans with a 1% interest rate and no payments for six months, even with processing fees of up to 5% of the loan amount.
The time commitment and expense of conducting KYC diligence into customer identity and beneficial ownership explains in part many banks’ reluctance or refusal to accept PPP applications from new small-business customers. Recognizing the urgency of facilitating PPP lending and the growing regulatory bottleneck over BSA compliance, the Financial Crimes Enforcement Network (FinCEN) issued guidance on April 3, 2020, relaxing beneficial ownership information collection for existing small-business customers and suspending implementation of a February 6, 2020 ruling on CTR filing obligations when reporting transactions involving sole proprietorships and entities operating under a “doing business as” name. FinCEN also set up a new online contact mechanism for institutions to communicate to FinCEN COVID-19-related concerns, including delays in the filing of BSA reports. In response to FinCEN’s April 3 notice, and to assure banks that its regulator is on board, the Office of the Comptroller of the Currency (OCC) issued a bulletin on April 7, 2020, expressing support for FinCEN’s guidance. Should BSA compliance obligations continue to inhibit the flow of PPP loan applications for bank and nonbank financial institutions, FinCEN and the prudential regulators may need to issue further guidance relaxing certain BSA requirements.
Source: https://www.jdsupra.com/legalnews/bank-secrecy-act-compliance-issues-for-79714/ April 21, 2020
With many banks and credit unions electing to limit Paycheck Protection Program (PPP) loans to existing customers, many nonbank lenders are scrambling to fill the gap and take part in the $349 billion program prior to the end of the application period on June 30, 2020. There is, however, at least one major obstacle preventing many nonbank lenders from qualifying to lend under the PPP—the requirement under Section 1102 of the CARES Act that they apply “the [Bank Secrecy Act (BSA)] requirements of an equivalent federally regulated financial institution,” which requires having a robust anti-money laundering (AML) and Know-Your-Customer (KYC) compliance program.
Basic Elements of BSA Compliance for Nonbank Financial Institutions
Compliance with the BSA requires financial institutions to, among other things, maintain an adequate AML and KYC program, which must be founded upon the well-known “five pillars” of BSA compliance: (1) a system of internal controls to ensure ongoing compliance, (2) independent testing for compliance, (3) a designated AML officer to coordinate and monitor day-to-day compliance, (4) ongoing training for applicable personnel, and (5) procedures for ongoing customer due diligence that include, among other things, procedures for identifying the “beneficial ownership” of legal entity customers.
Compliance with the BSA also requires that the institution file currency transaction reports (CTRs) for cash transactions involving more than $10,000, and file suspicious activity reports (SARs) when the institution “knows, suspects, or has reason to suspect that the transaction (or pattern of transactions of which the transaction is a part)” involves money laundering, is designed to evade the requirements of the BSA, serves no apparent lawful purpose, or facilitates criminal activity.
Developing and maintaining an adequate AML and KYC compliance program can be both time-consuming and expensive, which is why many fintechs and other prospective nonbank lenders have been effectively shut out of PPP lending (fintechs with payments businesses are a notable exception, as they already have these programs in place). Developing an AML program can take many weeks, if not months, making it unlikely that a prospective PPP lender without an existing compliant program could qualify well enough in advance of the program’s application deadline of June 30, 2020. Additionally, becoming BSA compliant may be cost-prohibitive for many prospective PPP lenders when weighed against the risks of making loans with a 1% interest rate and no payments for six months, even with processing fees of up to 5% of the loan amount.
The time commitment and expense of conducting KYC diligence into customer identity and beneficial ownership explains in part many banks’ reluctance or refusal to accept PPP applications from new small-business customers. Recognizing the urgency of facilitating PPP lending and the growing regulatory bottleneck over BSA compliance, the Financial Crimes Enforcement Network (FinCEN) issued guidance on April 3, 2020, relaxing beneficial ownership information collection for existing small-business customers and suspending implementation of a February 6, 2020 ruling on CTR filing obligations when reporting transactions involving sole proprietorships and entities operating under a “doing business as” name. FinCEN also set up a new online contact mechanism for institutions to communicate to FinCEN COVID-19-related concerns, including delays in the filing of BSA reports. In response to FinCEN’s April 3 notice, and to assure banks that its regulator is on board, the Office of the Comptroller of the Currency (OCC) issued a bulletin on April 7, 2020, expressing support for FinCEN’s guidance. Should BSA compliance obligations continue to inhibit the flow of PPP loan applications for bank and nonbank financial institutions, FinCEN and the prudential regulators may need to issue further guidance relaxing certain BSA requirements.
Source: https://www.jdsupra.com/legalnews/bank-secrecy-act-compliance-issues-for-79714/ April 21, 2020
Excerpt from American Bankers Association letter expressing concern that mandatory Know-Your-Customer (KYC) and anti-money laundering (AML) requirements impede CARES Act PPP loan process for small business applicants
[Excerpt from letter of Rob Nichols, ABA President and CEO]
I want to assure you that bankers share your frustration with the PPP loan process, yet they are committed to ensuring that all small businesses--both current business banking customers and non-customers--have access to the SBA program. However, the overwhelming demand for the program, along with mandatory Know-Your-Customer (KYC) and anti-money laundering (AML) requirements, have led many banks to initially limit the application process to existing customers for whom banks have previously conducted the bank’s Customer Due Diligence (CDD) process. While the CARES Act calls for speed, other existing banking laws require banks to take the time to verify important borrower information.
The key to speeding up the process for all financial institutions is the temporary –and appropriate –adjustment of KYC/AML requirements. As noted by former Treasury Secretary Jacob Lew, during this very unusual time, it is important to introduce flexibility into the program to ensure that funds flow to where they are needed, particularly to borrowers that do not traditionally borrow from banks.
The clock is ticking to distribute –fairly –an unprecedented amount of funding through agency infrastructure built for much smaller volumes. Forthis reason, we urge policymakers to identify the appropriate balance between KYC/AML requirements and the urgent need to get funds into the communities. SenatorsKaine, Coons, and KingApril13, 2020Page 2
This situation is further complicated by the ongoing pandemic. Due to social distancing requirements, bank personnel, including their anti-money laundering staffs, are working from home. Not only do they face challenges handling normal day-to-day operations, but they also have no present capacity to devise, implement and test new methods for identifying fraud in these new government programs, and operational errors in authenticating borrowers.
Accordingly, former Federal Reserve Board Chair Yellen recently urged policymakers to address “...banks’ concern about liability [that] could cause them to restrict the loans they initiate andengage in due diligence that could slow down payments,” possibly through creation of a safe harbor.
Building on Chair Yellen’s comments, we recommend that FinCEN and the banking agencies issue joint guidance stating that:
• Banks are exempt from collecting, identifying, verifying and certifying KYC/AMLinformation for accounts set up to accept funds provided under the CARES Act. This can easily beaccomplished by exempting theseloans from the definition of new accounts for the purposes of FinCEN requirements.
• Similarly, for any renewals, modifications or extensions of existing loans or lines of credit, banks may rely on the CDDalready on file without taking further steps.
• For any new account opened during thenational emergency for a current legal entity customer and for which the institution already has beneficial owner information on file, the bank can rely on the existing information with no further expectation that the bank will examine or confirm that theinformation is still current.
• Similarly, for any account opened for a new customer during the national emergency, the bank will be permitted to collect beneficial ownership information after the account is established, similar to current requirements forCustomer Identification Programs established under Section 326 of the USA PATRIOT Act
.• For any account opened for a new customer during the national emergency by a business that already has an established bank account with any other financial institution, it will be presumed by law that the customer has been examined for the appropriate due diligence.
• A bank may rely on the information submitted by any loan applicant on one of the Small Business Administration forms provided for the purpose of these loans. Absent a reason to suspect otherwise evident on the face of the application, the bank may take the information provided as accurate.
•A bank shall not be required to conduct a KYC/AML risk assessment for any customer applying to open an account for disbursement of these funds. The bank shall have a reasonable time after the loan is established to conduct a risk assessment of the customer.
ABA believes that these modest changes will streamline the process and help banks get much needed funds into the small businesses that serve their local communities.
Excerpt from https://www.aba.com/-/media/documents/letters-to-congress-and-regulators/aba-response-to-senators-kaine-coons-and-king-04132020.pdf?rev=2e24478b58c244cc8bf433d9eb3d7d7f
[Excerpt from letter of Rob Nichols, ABA President and CEO]
I want to assure you that bankers share your frustration with the PPP loan process, yet they are committed to ensuring that all small businesses--both current business banking customers and non-customers--have access to the SBA program. However, the overwhelming demand for the program, along with mandatory Know-Your-Customer (KYC) and anti-money laundering (AML) requirements, have led many banks to initially limit the application process to existing customers for whom banks have previously conducted the bank’s Customer Due Diligence (CDD) process. While the CARES Act calls for speed, other existing banking laws require banks to take the time to verify important borrower information.
The key to speeding up the process for all financial institutions is the temporary –and appropriate –adjustment of KYC/AML requirements. As noted by former Treasury Secretary Jacob Lew, during this very unusual time, it is important to introduce flexibility into the program to ensure that funds flow to where they are needed, particularly to borrowers that do not traditionally borrow from banks.
The clock is ticking to distribute –fairly –an unprecedented amount of funding through agency infrastructure built for much smaller volumes. Forthis reason, we urge policymakers to identify the appropriate balance between KYC/AML requirements and the urgent need to get funds into the communities. SenatorsKaine, Coons, and KingApril13, 2020Page 2
This situation is further complicated by the ongoing pandemic. Due to social distancing requirements, bank personnel, including their anti-money laundering staffs, are working from home. Not only do they face challenges handling normal day-to-day operations, but they also have no present capacity to devise, implement and test new methods for identifying fraud in these new government programs, and operational errors in authenticating borrowers.
Accordingly, former Federal Reserve Board Chair Yellen recently urged policymakers to address “...banks’ concern about liability [that] could cause them to restrict the loans they initiate andengage in due diligence that could slow down payments,” possibly through creation of a safe harbor.
Building on Chair Yellen’s comments, we recommend that FinCEN and the banking agencies issue joint guidance stating that:
• Banks are exempt from collecting, identifying, verifying and certifying KYC/AMLinformation for accounts set up to accept funds provided under the CARES Act. This can easily beaccomplished by exempting theseloans from the definition of new accounts for the purposes of FinCEN requirements.
• Similarly, for any renewals, modifications or extensions of existing loans or lines of credit, banks may rely on the CDDalready on file without taking further steps.
• For any new account opened during thenational emergency for a current legal entity customer and for which the institution already has beneficial owner information on file, the bank can rely on the existing information with no further expectation that the bank will examine or confirm that theinformation is still current.
• Similarly, for any account opened for a new customer during the national emergency, the bank will be permitted to collect beneficial ownership information after the account is established, similar to current requirements forCustomer Identification Programs established under Section 326 of the USA PATRIOT Act
.• For any account opened for a new customer during the national emergency by a business that already has an established bank account with any other financial institution, it will be presumed by law that the customer has been examined for the appropriate due diligence.
• A bank may rely on the information submitted by any loan applicant on one of the Small Business Administration forms provided for the purpose of these loans. Absent a reason to suspect otherwise evident on the face of the application, the bank may take the information provided as accurate.
•A bank shall not be required to conduct a KYC/AML risk assessment for any customer applying to open an account for disbursement of these funds. The bank shall have a reasonable time after the loan is established to conduct a risk assessment of the customer.
ABA believes that these modest changes will streamline the process and help banks get much needed funds into the small businesses that serve their local communities.
Excerpt from https://www.aba.com/-/media/documents/letters-to-congress-and-regulators/aba-response-to-senators-kaine-coons-and-king-04132020.pdf?rev=2e24478b58c244cc8bf433d9eb3d7d7f
Congressional summary of the 4/21/20 coronavirus relief bill passed by the House on 4/24:
The text of the Senate’s 4/21/20 coronavirus relief bill (additional small business funding and more), passed by the House on 4/24 is available here, along with the NPR summary:
https://www.npr.org/2020/04/22/838870536/read-whats-in-the-latest-coronavirus-relief-bill … pic.twitter.com/662ZBR3CUp
Summary: $484 billion Phase 3.5 PackagePaycheck Protection Program Increase Act of 2020:
Source: https://www.akingump.com/en/experience/industries/national-security/covid-19-resource-center/covid-19-policy-update-april-21-2020.html
https://www.npr.org/2020/04/22/838870536/read-whats-in-the-latest-coronavirus-relief-bill … pic.twitter.com/662ZBR3CUp
Summary: $484 billion Phase 3.5 PackagePaycheck Protection Program Increase Act of 2020:
- Provides an additional $310 billion for the PPP, including $30 billion that must be set aside for PPP loans made by Insured Depository Institutions and Credit Unions that have assets between $10 billion and $50 billion, and $30 billion for loans made by Community Financial Institutions, Small Insured Depository Institutions and Credit Unions with assets less than $10 billion.
- Provides an additional $10 billion for the Emergency Economic Injury Disaster (EIDL) Grants.
- Allows agricultural enterprises with fewer than 500 employees to receive EIDL grants and loans.
- Provides an additional $2.1 billion for the Salaries and Expenses account.
- Provides an additional $50 billion for the Disaster Loans Program Account.
- Provides an additional $10 billion for Emergency EIDL Grants.
- Provides $75 billion for reimbursement to hospitals and healthcare providers to support the need for COVID-19 related expenses and lost revenue.
- Provides $25 billion to research, develop, validate, manufacture, purchase, administer and expand capacity for COVID-19 tests.
- Includes $6 million for HHS Office of Inspector General for oversight activities.
- Requires plan from States, localities, territories and tribes on how resources will be used for testing and easing COVID-19 community mitigation policies.
- Requires strategic plan related to providing assistance to States for testing and increasing testing capacity.
Source: https://www.akingump.com/en/experience/industries/national-security/covid-19-resource-center/covid-19-policy-update-april-21-2020.html
The growing shadow over a hydroxychloroquine Covid cure
The odds of success for President Donald Trump’s favored coronavirus treatment keep getting longer. On Tuesday, it was the U.S. government that erected new obstacles.
First, a panel of medical experts assembled by the National Institutes of Health recommended against using hydroxychloroquine, a malaria treatment, in combination with the antibiotic azithromycin to treat Covid-19. Though a few small, early studies raised hopes that the drug could help patients fight off coronavirus infections, hydroxychloroquine can also cause heart issues. Doctors, pharmacy experts and government researchers and officials advising NIH warned that taking the two potent medications together could lead to harm.
Trump had touted hydroxychloroquine as a potential “game-changer” in spite of the scant scientific evidence to support his claims. Dozens of other therapies are also being explored for treating the coronavirus, but Trump’s backing for the malaria drug has made it a cause celebre among his most ardent supporters. Some doctors have taken it as a prophylactic to ward off the disease, and hospitals have rushed to stockpile it. That’s left patients who need hydroxychloroquine to treat chronic diseases like lupus and rheumatoid arthritis searching for alternatives.
The second blow to hydroxychloroquine was delivered by an analysis of 368 patients from the Veterans Administration that looked at how people with Covid-19 fared after getting the standard of care, hydroxychloroquine alone, or the combination. In that study, which hasn’t yet been published or subjected to peer review, patients who got hydroxychloroquine alone had a higher death rate than those not getting it.
There is a long way to go. Other studies of the drug are continuing around the world. But the results so far underline how slippery science can be, most especially when the immediate health hopes of millions of people—and the political fortunes of a potential cure’s most enthusiastic partisans—are riding on it.--Tim Annett
Credit: Bloomberg coronavirus daily
The odds of success for President Donald Trump’s favored coronavirus treatment keep getting longer. On Tuesday, it was the U.S. government that erected new obstacles.
First, a panel of medical experts assembled by the National Institutes of Health recommended against using hydroxychloroquine, a malaria treatment, in combination with the antibiotic azithromycin to treat Covid-19. Though a few small, early studies raised hopes that the drug could help patients fight off coronavirus infections, hydroxychloroquine can also cause heart issues. Doctors, pharmacy experts and government researchers and officials advising NIH warned that taking the two potent medications together could lead to harm.
Trump had touted hydroxychloroquine as a potential “game-changer” in spite of the scant scientific evidence to support his claims. Dozens of other therapies are also being explored for treating the coronavirus, but Trump’s backing for the malaria drug has made it a cause celebre among his most ardent supporters. Some doctors have taken it as a prophylactic to ward off the disease, and hospitals have rushed to stockpile it. That’s left patients who need hydroxychloroquine to treat chronic diseases like lupus and rheumatoid arthritis searching for alternatives.
The second blow to hydroxychloroquine was delivered by an analysis of 368 patients from the Veterans Administration that looked at how people with Covid-19 fared after getting the standard of care, hydroxychloroquine alone, or the combination. In that study, which hasn’t yet been published or subjected to peer review, patients who got hydroxychloroquine alone had a higher death rate than those not getting it.
There is a long way to go. Other studies of the drug are continuing around the world. But the results so far underline how slippery science can be, most especially when the immediate health hopes of millions of people—and the political fortunes of a potential cure’s most enthusiastic partisans—are riding on it.--Tim Annett
Credit: Bloomberg coronavirus daily
From NCLC: Are There Special Limits on Judgment Creditors’ Garnishment of Stimulus Payments? (With cite to DC statute)
The CARES Act protects stimulus payments from certain offsets to collect debts owed to federal and state governments. The Act does not address either private creditors’ seizure of the checks from bank accounts to satisfy outstanding court judgments or the banks’ ability to seize the funds to pay other debts owed the bank or for overdrawn accounts. While advocacy efforts are ongoing to change the federal law or the way Treasury treats these payments [DAR: see next posting], as of the time the first set of payments were distributed (in mid-April 2020), these efforts have not been successful.
In a few states (such as New York), a certain dollar value in funds in a bank account is automatically protected from seizure, without requiring consumers to take any affirmative action.
Every state provides a method by which consumers can assert to a court that bank account funds are exempt under state law, but only after the account is frozen. Depending on the state, an exemption can be based on deposits up to a certain dollar amount, for public assistance benefits, under a “wild card” exemption which goes up to a certain dollar amount, or some similar category. See NCLC’s Collection Actions Appendix G (now open to all readers even without a subscription through May 3, 2020). But in a frustrating situation with constitutional due process implications, consumers may not have an opportunity to raise these rights. Many state courts are closed for most proceedings and consumers are unable to reach the courts in any event.
In a number of states and counties, orders are being issued to prevent garnishments of bank accounts. Examples include:
- • District of Columbia Act 23-286 http://lims.dccouncil.us/Download/44543/B23-0733-SignedAct.pdf [DR: see in particular Section 207]
From US PIRG: Debt collectors and CARES Act payments
Posted: 15 Apr 2020 09:34 AM PDT
This week, the Treasury Department will begin to send out the $1,200 CARES Act payments that Congress approved in response to the coronavirus crisis. The money will be wired to eligible recipients who previously authorized the IRS to post their refunds through direct deposit. The American Prospect reports, though that "Congress did not exempt CARES Act payments from private debt collection, and the Treasury Department has been reluctant to exempt them through its rulemaking authority. This means that individuals could see their payments transferred from their hands into the hands of their creditors, potentially leaving them with nothing."
The full article is here. And a follow-up article about the Department of Treasury allowing the debt collection is here.
From Washington Business Journal:
A guide to local resources for Greater Washington businesses
By Michael Neibauer
– Managing Editor, Washington Business Journal
Mar 24, 2020, 3:16pm EDT
Updated Apr 9, 2020, 5:38pm EDT
These are uncertain times for Greater Washington business, as the COVID-19 virus continues to spread rampantly throughout our region. As its effects grow — thousands of people losing their jobs and many others setting up at home offices — state and local leaders, nonprofits and corporations are stepping up with support of varying types, from emergency loans and grants to counseling and resource guides, free access to services and the basic necessities of life.
The Washington Business Journal is compiling a list of these resources to support our region's business community.
Keep checking back as this list will only grow. If you have something we should add, please email [email protected].
A guide to local resources for Greater Washington businesses
By Michael Neibauer
– Managing Editor, Washington Business Journal
Mar 24, 2020, 3:16pm EDT
Updated Apr 9, 2020, 5:38pm EDT
These are uncertain times for Greater Washington business, as the COVID-19 virus continues to spread rampantly throughout our region. As its effects grow — thousands of people losing their jobs and many others setting up at home offices — state and local leaders, nonprofits and corporations are stepping up with support of varying types, from emergency loans and grants to counseling and resource guides, free access to services and the basic necessities of life.
The Washington Business Journal is compiling a list of these resources to support our region's business community.
Keep checking back as this list will only grow. If you have something we should add, please email [email protected].
- See more resources from the federal government.https://www.bizjournals.com/washington/news/2020/03/27/federal-resources-small-businesses.html
- See more resources from the D.C., Virginia and Maryland state governments.https://www.bizjournals.com/washington/news/2020/03/27/state-resources-for-small-businesses-navigating.html
- See more resources from local governments across the D.C. region.https://www.bizjournals.com/washington/news/2020/03/27/local-resources-for-small-business-navigating-the.html
CNBC’s Jim Cramer on the paradox of a stock market that is heating up while the state of the economy appears to be crumbling
“At the end of the day, the stock market’s made up of big, huge companies, not the small- to medium-sized businesses that are the backbone of our economy,” the “Mad Money” host said. “You don’t have to like it — I know I don’t — but it’s the big dogs with pristine balance sheets and gigantic scale that can survive this lockdown.”
Cramer made the comments in response to a viral screenshot of a scene from his Thursday show that circulated online.
“There’s a seething anger sweeping this country and it’s directed point-blank at Wall Street,” Cramer said after the market staged another rally in Tuesday’s session. “This relentless rally seems unfair, it seems senseless and it seems heartless” amid a deadly coronavirus emergency.
The image, which juxtaposed a strong weekly gain for the Dow Jones index against multiple weeks of record job losses, was shared widely on social media platforms, including in a tweet by Rep. Alexandria Ocasio Cortez, D-New York, who sought to highlight a contradiction between Wall Street and Main Street.
https://www.cnbc.com/2020/04/14/jim-cramer-on-mad-money-viral-pic-seething-anger-for-wall-street.html?recirc=taboolainternal
“At the end of the day, the stock market’s made up of big, huge companies, not the small- to medium-sized businesses that are the backbone of our economy,” the “Mad Money” host said. “You don’t have to like it — I know I don’t — but it’s the big dogs with pristine balance sheets and gigantic scale that can survive this lockdown.”
Cramer made the comments in response to a viral screenshot of a scene from his Thursday show that circulated online.
“There’s a seething anger sweeping this country and it’s directed point-blank at Wall Street,” Cramer said after the market staged another rally in Tuesday’s session. “This relentless rally seems unfair, it seems senseless and it seems heartless” amid a deadly coronavirus emergency.
The image, which juxtaposed a strong weekly gain for the Dow Jones index against multiple weeks of record job losses, was shared widely on social media platforms, including in a tweet by Rep. Alexandria Ocasio Cortez, D-New York, who sought to highlight a contradiction between Wall Street and Main Street.
https://www.cnbc.com/2020/04/14/jim-cramer-on-mad-money-viral-pic-seething-anger-for-wall-street.html?recirc=taboolainternal
Avoiding Price Gouging, Price Fixing and Other Antitrust Risks During the COVID-19 Pandemic
Carl Hittinger, Ann Marie O'Brien
-
April 15, 2020
By Carl Hittinger & Ann O’Brien (BakerHostetler)1
The COVID-19 global pandemic has upended typical supply and demand in unprecedented ways. As the world struggles to contain the pandemic and faces tragic human suffering, the resulting states of emergency, need for medical supplies, and panic buying have caused overnight changes in supply and demand on an unparalleled global scale. Businesses face increased antitrust risk as they struggle to continue operations and meet historic demand. The Department of Justice (“DOJ”) has actively enforced the antitrust laws in response to previous natural disasters2 and financial crises,3 and federal and state antitrust authorities are again paying close attention as this global pandemic unfolds.
On March 9, 2020, the DOJ announced that it would ensure resources were available to enforce antitrust laws against “bad actors” that might take advantage of the current emergency situation.4 And as the pandemic has worsened, the DOJ announced recent changes that ramp up enforcement against hoarding of essential supplies, price gouging, price fixing, bid rigging and fraud, while working with the Federal Trade Commission (“FTC”) to increase flexibility in certain areas, such as competitor collaborations. Meanwhile, as demand and prices spike, so has state and local price-gouging enforcement.
This article discusses some of the evolving areas of antitrust risk during the COVID-19 crisis and contains information and best practices on how to avoid them.
The article is at https://www.competitionpolicyinternational.com/avoiding-price-gouging-price-fixing-and-other-antitrust-risks-during-the-covid-19-pandemic/
Carl Hittinger, Ann Marie O'Brien
-
April 15, 2020
By Carl Hittinger & Ann O’Brien (BakerHostetler)1
The COVID-19 global pandemic has upended typical supply and demand in unprecedented ways. As the world struggles to contain the pandemic and faces tragic human suffering, the resulting states of emergency, need for medical supplies, and panic buying have caused overnight changes in supply and demand on an unparalleled global scale. Businesses face increased antitrust risk as they struggle to continue operations and meet historic demand. The Department of Justice (“DOJ”) has actively enforced the antitrust laws in response to previous natural disasters2 and financial crises,3 and federal and state antitrust authorities are again paying close attention as this global pandemic unfolds.
On March 9, 2020, the DOJ announced that it would ensure resources were available to enforce antitrust laws against “bad actors” that might take advantage of the current emergency situation.4 And as the pandemic has worsened, the DOJ announced recent changes that ramp up enforcement against hoarding of essential supplies, price gouging, price fixing, bid rigging and fraud, while working with the Federal Trade Commission (“FTC”) to increase flexibility in certain areas, such as competitor collaborations. Meanwhile, as demand and prices spike, so has state and local price-gouging enforcement.
This article discusses some of the evolving areas of antitrust risk during the COVID-19 crisis and contains information and best practices on how to avoid them.
The article is at https://www.competitionpolicyinternational.com/avoiding-price-gouging-price-fixing-and-other-antitrust-risks-during-the-covid-19-pandemic/
WSJ on investor sentiment about economic recovery
Comment by DAR: President Trump and State governors are planning to revive the US economy in a manner that involves contention and uncertainty. According to the WSJ piece excerpted below, investors share that uncertainty. There is some suggestion from financial experts that investors are too optimistic about economic revival.
Safer assets from gold to Treasurys are rising alongside major indexes, a sign that the stock-market rebound hasn’t assuaged investors’ fears about the world economy.
The S&P 500 has rebounded 24% from its March 23 multiyear low. At the same time, gold on Tuesday climbed to its highest level in nearly 7½ years, bringing its gains for the year to 15%. Billions of dollars have flowed into gold exchange-traded funds, and sales of physical bars and coins have soared.'
Treasurys prices have joined the rally, pushing the yield on the benchmark 10-year U.S. Treasury note down to 0.64% from 1.26% on March 18. The Swiss franc and Japanese yen also have posted gains.
This is a reversal from mid-March, when investors sold a range of risky and safe assets to raise cash. Analysts attributed part of the widespread selling to banks demanding repayment from investors who had used their stock portfolios as collateral to buy other securities. Those margin calls then forced investors to sell unrelated assets.
But stocks and havens have risen in tandem since the Federal Reserve slashed interest rates near zero last month and stepped up lending programs and asset purchases. A roughly $2 trillion stimulus package passed by Congress last month—and discussions about more stimulus programs—also have helped markets stabilize despite the broad economic damage caused by the coronavirus.
Still, some analysts view the simultaneous rebounds as evidence of investors’ excessive optimism about how quickly the economy can rebound. Stock prices suggest a short recession with a swift rebound in corporate profits, while gains in havens signal worries about a longer downturn.
Tony Roth, chief investment officer at Wilmington Trust Investment Advisors, said the firm is holding a smaller position in stocks than the benchmark it tracks, believing it will take longer than expected to restart global commerce.
“We are seeing an increasing disconnect between how we expect the economy to perform and what stocks are doing,” he said.
From WSJ 4-16-2020
Comment by DAR: President Trump and State governors are planning to revive the US economy in a manner that involves contention and uncertainty. According to the WSJ piece excerpted below, investors share that uncertainty. There is some suggestion from financial experts that investors are too optimistic about economic revival.
Safer assets from gold to Treasurys are rising alongside major indexes, a sign that the stock-market rebound hasn’t assuaged investors’ fears about the world economy.
The S&P 500 has rebounded 24% from its March 23 multiyear low. At the same time, gold on Tuesday climbed to its highest level in nearly 7½ years, bringing its gains for the year to 15%. Billions of dollars have flowed into gold exchange-traded funds, and sales of physical bars and coins have soared.'
Treasurys prices have joined the rally, pushing the yield on the benchmark 10-year U.S. Treasury note down to 0.64% from 1.26% on March 18. The Swiss franc and Japanese yen also have posted gains.
This is a reversal from mid-March, when investors sold a range of risky and safe assets to raise cash. Analysts attributed part of the widespread selling to banks demanding repayment from investors who had used their stock portfolios as collateral to buy other securities. Those margin calls then forced investors to sell unrelated assets.
But stocks and havens have risen in tandem since the Federal Reserve slashed interest rates near zero last month and stepped up lending programs and asset purchases. A roughly $2 trillion stimulus package passed by Congress last month—and discussions about more stimulus programs—also have helped markets stabilize despite the broad economic damage caused by the coronavirus.
Still, some analysts view the simultaneous rebounds as evidence of investors’ excessive optimism about how quickly the economy can rebound. Stock prices suggest a short recession with a swift rebound in corporate profits, while gains in havens signal worries about a longer downturn.
Tony Roth, chief investment officer at Wilmington Trust Investment Advisors, said the firm is holding a smaller position in stocks than the benchmark it tracks, believing it will take longer than expected to restart global commerce.
“We are seeing an increasing disconnect between how we expect the economy to perform and what stocks are doing,” he said.
From WSJ 4-16-2020
SCOTUS Shows Interest in NFL Sunday Ticket Antitrust Case
-
April 16, 2020The US Supreme Court signaled interest in the NFL’s bid to shut down an antitrust challenge to its “Sunday Ticket” DirecTV package, asking the plaintiffs to respond to the league’s petition after they initially declined the opportunity, reported Bloomberg.
The justices had been set to discuss whether to review the case at their April 24 conference. The request Monday, April 13, gave the sports bars leading the lawsuit a May 15 deadline to respond.
It came about a week after the US Chamber of Commerce and two groups of experts urged the high court to reverse the US Court of Appeals decision.
The NFL Sunday Ticket subscription package allows customers to watch every out-of-market game, rather than just the two or three broadcast free each Sunday.
The lawsuit challenges the licensing deals that make Sunday Ticket possible: an agreement among the teams to pool their broadcast rights, and the NFL’s sale of those rights to DirecTV. Teams would otherwise market their rights on competitive terms, giving out-of-town viewers better and cheaper options than subscribing to Sunday Ticket on an all-or-nothing basis, the suit claims.
A federal judge dismissed those claims in 2017. The deal between the league and DirecTV is exempt from antitrust scrutiny under the Sports Broadcasting Act, she said. The rights-pooling agreement isn’t, but it’s an “upstream” deal shielded by the federal bar on antitrust damages for “indirect purchasers,” the judge found.
A divided Ninth Circuit revived the case, saying the licensing deals fall within the indirect purchaser rule’s “co-conspirator” exception. The suit alleges that both agreements are part of “a single conspiracy to limit the output of NFL telecasts,” the majority noted.
But the dissent got it right, according to the Supreme Court petition filed by the NFL, its teams, and DirecTV. The Ninth Circuit also wrongly treated the teams as pure competitors, rather than participants in a joint venture, they argued.
Full Content: Bloomberg
-
April 16, 2020The US Supreme Court signaled interest in the NFL’s bid to shut down an antitrust challenge to its “Sunday Ticket” DirecTV package, asking the plaintiffs to respond to the league’s petition after they initially declined the opportunity, reported Bloomberg.
The justices had been set to discuss whether to review the case at their April 24 conference. The request Monday, April 13, gave the sports bars leading the lawsuit a May 15 deadline to respond.
It came about a week after the US Chamber of Commerce and two groups of experts urged the high court to reverse the US Court of Appeals decision.
The NFL Sunday Ticket subscription package allows customers to watch every out-of-market game, rather than just the two or three broadcast free each Sunday.
The lawsuit challenges the licensing deals that make Sunday Ticket possible: an agreement among the teams to pool their broadcast rights, and the NFL’s sale of those rights to DirecTV. Teams would otherwise market their rights on competitive terms, giving out-of-town viewers better and cheaper options than subscribing to Sunday Ticket on an all-or-nothing basis, the suit claims.
A federal judge dismissed those claims in 2017. The deal between the league and DirecTV is exempt from antitrust scrutiny under the Sports Broadcasting Act, she said. The rights-pooling agreement isn’t, but it’s an “upstream” deal shielded by the federal bar on antitrust damages for “indirect purchasers,” the judge found.
A divided Ninth Circuit revived the case, saying the licensing deals fall within the indirect purchaser rule’s “co-conspirator” exception. The suit alleges that both agreements are part of “a single conspiracy to limit the output of NFL telecasts,” the majority noted.
But the dissent got it right, according to the Supreme Court petition filed by the NFL, its teams, and DirecTV. The Ninth Circuit also wrongly treated the teams as pure competitors, rather than participants in a joint venture, they argued.
Full Content: Bloomberg
American Antitrust Institute’s Unsure Trump Can Tackle Big Tech Issues-
April 16, 2020The American Antitrust Institute doesn’t have a lot of hope for the Trump Administration addressing concerns about whether Big Tech companies buying up potential competitors is an antitrust problem, reported John Eggerton.
.
Both the Justice Department and Federal Trade Commission have been looking into how Big Tech got that way, and whether any anticompetitive red flags were missed in the series of mergers, often with smaller start-ups fueled by venture capital, that allowed edge providers to become mammoth players in the US and world economy.
In a new analysis, “Antitrust Enforcement and Competition Policy in the US,” which suggests the Trump Administration antitrust enforcement has been lax, the institute claimed the urge to break up or regulate Big Tech has been a reaction to Trump Administration antitrust inaction, and that without aggressive action using a variety of antitrust enforcement tools, neither Congress not the Administration are likely to address concerns about the size and power of Big Tech.
According to Eggerton, it suggests that had the Administration had a more balanced antitrust toolkit that included competition, regulatory, interoperability, and intellectual property policies, the blunter instrument of breakup might not take such a potentially “outsized” role to solving the “economic, social, and even political problems” the institute concedes are raised by digital tech companies.
Full Content: Broadcasting Cable
April 16, 2020The American Antitrust Institute doesn’t have a lot of hope for the Trump Administration addressing concerns about whether Big Tech companies buying up potential competitors is an antitrust problem, reported John Eggerton.
.
Both the Justice Department and Federal Trade Commission have been looking into how Big Tech got that way, and whether any anticompetitive red flags were missed in the series of mergers, often with smaller start-ups fueled by venture capital, that allowed edge providers to become mammoth players in the US and world economy.
In a new analysis, “Antitrust Enforcement and Competition Policy in the US,” which suggests the Trump Administration antitrust enforcement has been lax, the institute claimed the urge to break up or regulate Big Tech has been a reaction to Trump Administration antitrust inaction, and that without aggressive action using a variety of antitrust enforcement tools, neither Congress not the Administration are likely to address concerns about the size and power of Big Tech.
According to Eggerton, it suggests that had the Administration had a more balanced antitrust toolkit that included competition, regulatory, interoperability, and intellectual property policies, the blunter instrument of breakup might not take such a potentially “outsized” role to solving the “economic, social, and even political problems” the institute concedes are raised by digital tech companies.
Full Content: Broadcasting Cable
What Issues Will Uninsured People Face with Testing and Treatment for COVID-19?
Jennifer Tolbert
Published: Mar 16, 2020
With COVID-19 cases rising in the US, issues surrounding access to testing and treatment for uninsured individuals have taken on heightened importance. Efforts to limit the spread of the coronavirus in the United States are dependent on people who may have been exposed to the virus or who are sick getting tested and seeking medical treatment. However, the uninsured are likely to face significant barriers to testing for COVID-19 and any care they may need should they contract the virus.
In 2018, there were nearly 28 million nonelderly people in the US who lacked health insurance. States that have not expanded Medicaid under the ACA generally have higher uninsured rates than states that did. Adults, low-income individuals and people of color are at greater risk of being uninsured. Most uninsured lack coverage because of high cost or because of a recent change in their situation that led to a loss of coverage, such as a loss of a job. Though most uninsured people have a full time worker (72%) or part-time worker (11%) in their family, many people do not have access to coverage through a job, and some people, particularly poor adults in states that did not expand Medicaid, remain ineligible for financial assistance for coverage.
Many uninsured adults work in jobs that may increase their risk of exposure to COVID-19. Most uninsured adults are working. Because of the jobs they have, uninsured workers may be at greater risk of exposure to the disease. Among the top ten occupations reported by the uninsured, many are service-oriented, such as drivers, cashiers, restaurant servers and cooks, and retail sales that cannot be performed through telework and bring the uninsured into regular contact with the public (Figure 1). In addition, data analysis finds that nearly six million adults who are at higher risk of getting a serious illness if they become infected with coronavirus are uninsured.
Uninsured workers who must take off work because they or family members are sick could face significant financial consequences. The U.S. does not have a federal law guaranteeing paid sick leave, and only 11 states and DC currently require paid sick leave. The burden of the lack of paid sick leave falls more heavily on low-wage and uninsured workers. In 2018, just over a quarter (26%) of uninsured workers said they had paid sick leave. Facing the risk of not getting paid or possibly losing their position if they do not show up for work, uninsured workers who are not provided sick leave may be reluctant to take time off, which could put their health at risk and could undermine efforts to control the spread of coronavirus.
Congress enacted legislation that would require certain employers to provide paid sick leave during this public health crisis; however, this new policy will not reach all uninsured workers. Under the emergency paid sick leave provisions in the Families First Coronavirus Response Act, workers in all public agencies as well as at some private firms with between 50 and 500 employees must be compensated at least a portion of their regular pay for 14 days if they take time off to address health needs for themselves or family members or to care for children due to school closures. If workers need more than 14 days off work to care for children due to school closures, they may be able to obtain up to 2/3 of their typical compensation for up to three months, but this policy does not extend to all workers and excludes employees at businesses with more than 500 employees. These new leave policies take effect two weeks after enactment of the legislation and the benefits are not retroactive, which means that uninsured workers who already took leave due to coronavirus would not be compensated for that time.
People who are uninsured will likely face unique barriers accessing COVID-19 testing and treatment services. Over half of the uninsured do not have a usual place to go when they need medical care, and one in five uninsured adults in 2018 went without needed medical care due to cost (Figure 2). Studies repeatedly demonstrate that uninsured people are less likely than those with insurance to receive services for major health conditions and chronic diseases. Without a usual source of care, the uninsured may not know where to go to get tested if they think they have been exposed to the virus and may forego testing or care out of fear of having to pay out-of-pocket for the test. The Emergency Medical Treatment and Labor Act requires hospitals to screen and stabilize patients with emergent conditions, however, they are not required to provide the care at no cost for patients who cannot pay, and they are not required to provide treatment for non-emergent conditions. As a result, uninsured individuals are less likely to use the emergency department than people with insurance, and the high costs of ED care may dissuade those without coverage from seeking care in that setting.
Uninsured individuals who contract COVID-19 and need medical care will likely receive large medical bills, even if they have low incomes and are unable to pay. When uninsured individuals need medical care, the costs can be prohibitive. Uninsured people pay the full cost of care, often at higher rates than those with insurance whose coverage may negotiate lower rates than a hospital otherwise charges. While some uninsured can get care at community health centers and other safety net providers, these providers have limited resources and capacity, and not all uninsured have geographic access to a safety net provider. Because the U.S. lacks a comprehensive hospital charity care policy, uninsured individuals who use hospital care will be billed for the services. Uninsured individuals who meet certain criteria may qualify for a hospital’s charity care program to reduce any hospital bills; however, not all hospitals are required to offer charity care programs, and among those that do, the eligibility criteria can vary widely. Fear of large and unaffordable medical bills can deter uninsured individuals from getting the care they need. In the context of a public health emergency, decisions to forego care because of costs can have devastating consequences.
Federal legislation enacted in response to the coronavirus crisis ensures free testing for uninsured individuals. The Families First Coronavirus Response Act signed into law on March 18, 2020 includes a provision that gives states the option to expand Medicaid coverage to uninsured individuals in their state to provide coverage for COVID-19 diagnosis and testing with 100% federal financing. Although the coverage is limited to testing services, it will ensure more uninsured can access free testing, since the legislation also requires state Medicaid programs to cover diagnosis and testing for COVID-19 with no cost sharing. The legislation also appropriates $1 billion to the National Disaster Medical System to provide reimbursement to providers for the costs associated with diagnosis and testing of uninsured individuals. However, the legislation does not address coverage of COVID-19 treatment costs for people who are uninsured.
While the federal legislation will reduce barriers to COVID-19 testing, additional steps will be required to reduce barriers to accessing treatment for uninsured individuals who get sick. Expanding comprehensive coverage options to the uninsured would facilitate access to COVID-19 treatment for those who need it. Decisions by states that have not yet adopted the Medicaid expansion to do so would provide eligibility for coverage to the 2.3 million nonelderly uninsured adults in the coverage gap. In addition to adopting the Medicaid expansion, the federal government could provide flexibility to states to use Medicaid Section 1115 waiver and/or Section 1135 waiver authority to cover individuals who would not otherwise be eligible for coverage during the public health crisis, and potentially beyond. These waivers have been used in past emergencies to expand coverage. Additionally, states that operate their own health insurance marketplaces could provide a special enrollment period (SEP) in response to the coronavirus outbreak to allow uninsured individuals to enroll in coverage. Washington, Massachusetts, and Maryland recently announced coronavirus-related SEPs for uninsured residents. The federal government could also establish a national special enrollment period that would apply across all states, allowing many more uninsured to sign up for coverage.
In lieu of expanding coverage, providing funding to providers to expand COVID-19 services to uninsured individuals or to reimburse them for uncompensated costs they incur could also facilitate access to needed care. The supplemental appropriations legislation to finance the response to coronavirus included $100 million to community health centers to support increased access to testing and primary care services in medically underserved areas. However, this funding does not address costs to hospitals for treatment of infected individuals. Congress could appropriate additional funds to cover hospital costs related to treating uninsured individuals who contract the disease and need hospital care. Programs such as the National Disaster Medical System (NDMS) or Disproportionate Share Hospital (DSH) program could be used to reimburse hospitals for uncompensated costs; however, additional funding would be needed to cover the treatment costs related to COVID-19. Democratic Presidential candidate, Joe Biden, has proposed utilizing the NDMS by expanding its authority to reimburse providers for the costs of testing, treatment, and vaccines associated with COVID-19 for uninsured individuals and by providing full funding of those costs.
From KFF: https://www.kff.org/uninsured/fact-sheet/what-issues-will-uninsured-people-face-with-testing-and-treatment-for-covid-19/
(See KFF document for graphics that are omitted here)
Jennifer Tolbert
Published: Mar 16, 2020
With COVID-19 cases rising in the US, issues surrounding access to testing and treatment for uninsured individuals have taken on heightened importance. Efforts to limit the spread of the coronavirus in the United States are dependent on people who may have been exposed to the virus or who are sick getting tested and seeking medical treatment. However, the uninsured are likely to face significant barriers to testing for COVID-19 and any care they may need should they contract the virus.
In 2018, there were nearly 28 million nonelderly people in the US who lacked health insurance. States that have not expanded Medicaid under the ACA generally have higher uninsured rates than states that did. Adults, low-income individuals and people of color are at greater risk of being uninsured. Most uninsured lack coverage because of high cost or because of a recent change in their situation that led to a loss of coverage, such as a loss of a job. Though most uninsured people have a full time worker (72%) or part-time worker (11%) in their family, many people do not have access to coverage through a job, and some people, particularly poor adults in states that did not expand Medicaid, remain ineligible for financial assistance for coverage.
Many uninsured adults work in jobs that may increase their risk of exposure to COVID-19. Most uninsured adults are working. Because of the jobs they have, uninsured workers may be at greater risk of exposure to the disease. Among the top ten occupations reported by the uninsured, many are service-oriented, such as drivers, cashiers, restaurant servers and cooks, and retail sales that cannot be performed through telework and bring the uninsured into regular contact with the public (Figure 1). In addition, data analysis finds that nearly six million adults who are at higher risk of getting a serious illness if they become infected with coronavirus are uninsured.
Uninsured workers who must take off work because they or family members are sick could face significant financial consequences. The U.S. does not have a federal law guaranteeing paid sick leave, and only 11 states and DC currently require paid sick leave. The burden of the lack of paid sick leave falls more heavily on low-wage and uninsured workers. In 2018, just over a quarter (26%) of uninsured workers said they had paid sick leave. Facing the risk of not getting paid or possibly losing their position if they do not show up for work, uninsured workers who are not provided sick leave may be reluctant to take time off, which could put their health at risk and could undermine efforts to control the spread of coronavirus.
Congress enacted legislation that would require certain employers to provide paid sick leave during this public health crisis; however, this new policy will not reach all uninsured workers. Under the emergency paid sick leave provisions in the Families First Coronavirus Response Act, workers in all public agencies as well as at some private firms with between 50 and 500 employees must be compensated at least a portion of their regular pay for 14 days if they take time off to address health needs for themselves or family members or to care for children due to school closures. If workers need more than 14 days off work to care for children due to school closures, they may be able to obtain up to 2/3 of their typical compensation for up to three months, but this policy does not extend to all workers and excludes employees at businesses with more than 500 employees. These new leave policies take effect two weeks after enactment of the legislation and the benefits are not retroactive, which means that uninsured workers who already took leave due to coronavirus would not be compensated for that time.
People who are uninsured will likely face unique barriers accessing COVID-19 testing and treatment services. Over half of the uninsured do not have a usual place to go when they need medical care, and one in five uninsured adults in 2018 went without needed medical care due to cost (Figure 2). Studies repeatedly demonstrate that uninsured people are less likely than those with insurance to receive services for major health conditions and chronic diseases. Without a usual source of care, the uninsured may not know where to go to get tested if they think they have been exposed to the virus and may forego testing or care out of fear of having to pay out-of-pocket for the test. The Emergency Medical Treatment and Labor Act requires hospitals to screen and stabilize patients with emergent conditions, however, they are not required to provide the care at no cost for patients who cannot pay, and they are not required to provide treatment for non-emergent conditions. As a result, uninsured individuals are less likely to use the emergency department than people with insurance, and the high costs of ED care may dissuade those without coverage from seeking care in that setting.
Uninsured individuals who contract COVID-19 and need medical care will likely receive large medical bills, even if they have low incomes and are unable to pay. When uninsured individuals need medical care, the costs can be prohibitive. Uninsured people pay the full cost of care, often at higher rates than those with insurance whose coverage may negotiate lower rates than a hospital otherwise charges. While some uninsured can get care at community health centers and other safety net providers, these providers have limited resources and capacity, and not all uninsured have geographic access to a safety net provider. Because the U.S. lacks a comprehensive hospital charity care policy, uninsured individuals who use hospital care will be billed for the services. Uninsured individuals who meet certain criteria may qualify for a hospital’s charity care program to reduce any hospital bills; however, not all hospitals are required to offer charity care programs, and among those that do, the eligibility criteria can vary widely. Fear of large and unaffordable medical bills can deter uninsured individuals from getting the care they need. In the context of a public health emergency, decisions to forego care because of costs can have devastating consequences.
Federal legislation enacted in response to the coronavirus crisis ensures free testing for uninsured individuals. The Families First Coronavirus Response Act signed into law on March 18, 2020 includes a provision that gives states the option to expand Medicaid coverage to uninsured individuals in their state to provide coverage for COVID-19 diagnosis and testing with 100% federal financing. Although the coverage is limited to testing services, it will ensure more uninsured can access free testing, since the legislation also requires state Medicaid programs to cover diagnosis and testing for COVID-19 with no cost sharing. The legislation also appropriates $1 billion to the National Disaster Medical System to provide reimbursement to providers for the costs associated with diagnosis and testing of uninsured individuals. However, the legislation does not address coverage of COVID-19 treatment costs for people who are uninsured.
While the federal legislation will reduce barriers to COVID-19 testing, additional steps will be required to reduce barriers to accessing treatment for uninsured individuals who get sick. Expanding comprehensive coverage options to the uninsured would facilitate access to COVID-19 treatment for those who need it. Decisions by states that have not yet adopted the Medicaid expansion to do so would provide eligibility for coverage to the 2.3 million nonelderly uninsured adults in the coverage gap. In addition to adopting the Medicaid expansion, the federal government could provide flexibility to states to use Medicaid Section 1115 waiver and/or Section 1135 waiver authority to cover individuals who would not otherwise be eligible for coverage during the public health crisis, and potentially beyond. These waivers have been used in past emergencies to expand coverage. Additionally, states that operate their own health insurance marketplaces could provide a special enrollment period (SEP) in response to the coronavirus outbreak to allow uninsured individuals to enroll in coverage. Washington, Massachusetts, and Maryland recently announced coronavirus-related SEPs for uninsured residents. The federal government could also establish a national special enrollment period that would apply across all states, allowing many more uninsured to sign up for coverage.
In lieu of expanding coverage, providing funding to providers to expand COVID-19 services to uninsured individuals or to reimburse them for uncompensated costs they incur could also facilitate access to needed care. The supplemental appropriations legislation to finance the response to coronavirus included $100 million to community health centers to support increased access to testing and primary care services in medically underserved areas. However, this funding does not address costs to hospitals for treatment of infected individuals. Congress could appropriate additional funds to cover hospital costs related to treating uninsured individuals who contract the disease and need hospital care. Programs such as the National Disaster Medical System (NDMS) or Disproportionate Share Hospital (DSH) program could be used to reimburse hospitals for uncompensated costs; however, additional funding would be needed to cover the treatment costs related to COVID-19. Democratic Presidential candidate, Joe Biden, has proposed utilizing the NDMS by expanding its authority to reimburse providers for the costs of testing, treatment, and vaccines associated with COVID-19 for uninsured individuals and by providing full funding of those costs.
From KFF: https://www.kff.org/uninsured/fact-sheet/what-issues-will-uninsured-people-face-with-testing-and-treatment-for-covid-19/
(See KFF document for graphics that are omitted here)
Ticket buyers and sellers say StubHub owes them after widespread event cancellations
WA public letter from StubHub explains:
When an event is canceled:
• You don’t need to contact us; we’ll email you to confirm
• We’ll add a coupon worth 120% of your original order to your StubHub account. You can apply this coupon to one or multiple StubHub orders in the same currency until Dec. 31, 2021. Just choose the coupon at checkout when you order.
See http://stubhub.custhelp.com/app/answers/answer_view/a_id/1001856/categoryRecordID/RN_CATEGORY_429/categorySelected/RN_CATEGORY_429
The problem is that the coupon offer is an alternative to a refund.
That refusal of a refund has led to a class action lawsuit. The Complaint is at https://www.courthousenews.com/wp-content/uploads/2020/04/StubHub.pdf The Complaint says in its opening paragraphs:
In the midst of the greatest public health and economic crisis in living memory, Defendants, which constitute a four-billion dollar enterprise, have sought to surreptitiously shift their losses onto their innocent customers. . . .
WA public letter from StubHub explains:
When an event is canceled:
• You don’t need to contact us; we’ll email you to confirm
• We’ll add a coupon worth 120% of your original order to your StubHub account. You can apply this coupon to one or multiple StubHub orders in the same currency until Dec. 31, 2021. Just choose the coupon at checkout when you order.
See http://stubhub.custhelp.com/app/answers/answer_view/a_id/1001856/categoryRecordID/RN_CATEGORY_429/categorySelected/RN_CATEGORY_429
The problem is that the coupon offer is an alternative to a refund.
That refusal of a refund has led to a class action lawsuit. The Complaint is at https://www.courthousenews.com/wp-content/uploads/2020/04/StubHub.pdf The Complaint says in its opening paragraphs:
In the midst of the greatest public health and economic crisis in living memory, Defendants, which constitute a four-billion dollar enterprise, have sought to surreptitiously shift their losses onto their innocent customers. . . .
Comment: Solutions needed for non-profit organizations eligible for CARES Act help
The Cares Act includes help for non-profits, a legislative innovation with positive potential. But, banks that are administering the Cares Act are reported to be giving priority to established bank customers, particularly customers with existing business loans. Non-profits are particularly unlikely to have the relationships with banks required to get to the head of the help line. The following article from the Non-Profit Quarterly offers some proposals to improve the situation for non-profits. [Comment by DAR]
The Cares Act includes help for non-profits, a legislative innovation with positive potential. But, banks that are administering the Cares Act are reported to be giving priority to established bank customers, particularly customers with existing business loans. Non-profits are particularly unlikely to have the relationships with banks required to get to the head of the help line. The following article from the Non-Profit Quarterly offers some proposals to improve the situation for non-profits. [Comment by DAR]
CARES Act: New Nonprofit Provisions Needed for Next Round of Relief Money
Ruth McCambridge
April 9, 2020
As many readers know, the Paycheck Protection Program of the Cares Act, which is supposed to relieve serious COVID-19 related financial pressures on small for-profit and nonprofit employers through $349 billion in forgivable loans, got off to a rocky start last Friday, as nonprofits by the thousands flocked to lenders only to get turned away in many cases. It appears the banks were largely unprepared to process applications, in large part because the Small Business Administration did not get either the applications or the guidelines to them before Thursday night.
But for nonprofits, there were even more fundamental problems, often related to tenuous or unformed relationships between lenders and nonprofits. This led to a lot of time wasted by nonprofits stalking bank officers who were giving priority to longstanding and more robust organizations (a problem when you advertise the program as “first come, first served”) or blocked by being unable to fill out some of the application questions that did not quite fit the nonprofit corporate structure.
Many small businesses, nonprofits and for-profits alike, ended up in a kind of limbo, listening to reports about the billions being approved yet having no idea where in the process their own applications were, or even if they were in the system yet. As far as we know, such dynamics also apply to small businesses that may not be frequent users of debt. So, while the country was promised an admittedly inconceivable one-day approval and payout process, a week out, many nonprofits are still wondering whether or not they made it into the queue in time. (We will address these issues tomorrow in a longer piece by Steve Dubb.)
A new set of unemployment figures came out today, documenting that another 6.6 million are unemployed, bringing the total added to the unemployment rolls over the past four weeks to an unfathomable 17 million. Talks have begun for a CARES Act 2.0, otherwise known as Phase 4 of Congress’s response to the coronavirus, and in light of this, national advocates are requesting some extra provisions for this next round of stimulus capital to make sure sufficient money is available to nonprofits. A Nonprofit Community Letter posted on the National Council of Nonprofits website and circulated to Congress yesterday lays out these potential provisions in detail.
Among the changes proposed by the more than 200 national signatories is “expanded nonprofit access to credit.” Funding exclusive to nonprofits would be made available within the two principal loan programs established in the CARES Act. Doing so would ensure that organizations dedicated to addressing immediate pandemic-related problems were included in relief efforts and not excluded or pushed to the back of the line.
In terms of the Paycheck Protection Program, they want the bill to “provide incentives to private lenders to prioritize processing of applications of small nonprofits and expand the eligibility for nonprofits to participate in the Paycheck Protection Program by modifying the current 500-employee cap or by other means.”
We like the first half of that proposition, but if the purpose is to open access to nonprofits unused to borrowing from banks, we are not completely sure how that cause would be advanced by the inclusion of nonprofits with more than 500 employees. While we are aware that some networks, like YMCAs, have been hit profoundly hard, in that they depend upon sites where people congregate, employ more part-time workers, and have laid off sometimes thousands within weeks of this crisis, we would rather see that category addressed more distinctly, excluding those large organizations that do not fit in that category. This is a provision that should be better defined to extend eligibility just to nonprofits on the cusp between the small-employer program and the mid-size employer loans contemplated in the CARES Act.
The entire sector should also be grateful for the quick work of this coalition, which has pushed for new provisions to:
https://nonprofitquarterly.org/cares-act-new-nonprofit-provisions-pushed-for-next-round-of-relief-money/
Ruth McCambridge
April 9, 2020
As many readers know, the Paycheck Protection Program of the Cares Act, which is supposed to relieve serious COVID-19 related financial pressures on small for-profit and nonprofit employers through $349 billion in forgivable loans, got off to a rocky start last Friday, as nonprofits by the thousands flocked to lenders only to get turned away in many cases. It appears the banks were largely unprepared to process applications, in large part because the Small Business Administration did not get either the applications or the guidelines to them before Thursday night.
But for nonprofits, there were even more fundamental problems, often related to tenuous or unformed relationships between lenders and nonprofits. This led to a lot of time wasted by nonprofits stalking bank officers who were giving priority to longstanding and more robust organizations (a problem when you advertise the program as “first come, first served”) or blocked by being unable to fill out some of the application questions that did not quite fit the nonprofit corporate structure.
Many small businesses, nonprofits and for-profits alike, ended up in a kind of limbo, listening to reports about the billions being approved yet having no idea where in the process their own applications were, or even if they were in the system yet. As far as we know, such dynamics also apply to small businesses that may not be frequent users of debt. So, while the country was promised an admittedly inconceivable one-day approval and payout process, a week out, many nonprofits are still wondering whether or not they made it into the queue in time. (We will address these issues tomorrow in a longer piece by Steve Dubb.)
A new set of unemployment figures came out today, documenting that another 6.6 million are unemployed, bringing the total added to the unemployment rolls over the past four weeks to an unfathomable 17 million. Talks have begun for a CARES Act 2.0, otherwise known as Phase 4 of Congress’s response to the coronavirus, and in light of this, national advocates are requesting some extra provisions for this next round of stimulus capital to make sure sufficient money is available to nonprofits. A Nonprofit Community Letter posted on the National Council of Nonprofits website and circulated to Congress yesterday lays out these potential provisions in detail.
Among the changes proposed by the more than 200 national signatories is “expanded nonprofit access to credit.” Funding exclusive to nonprofits would be made available within the two principal loan programs established in the CARES Act. Doing so would ensure that organizations dedicated to addressing immediate pandemic-related problems were included in relief efforts and not excluded or pushed to the back of the line.
In terms of the Paycheck Protection Program, they want the bill to “provide incentives to private lenders to prioritize processing of applications of small nonprofits and expand the eligibility for nonprofits to participate in the Paycheck Protection Program by modifying the current 500-employee cap or by other means.”
We like the first half of that proposition, but if the purpose is to open access to nonprofits unused to borrowing from banks, we are not completely sure how that cause would be advanced by the inclusion of nonprofits with more than 500 employees. While we are aware that some networks, like YMCAs, have been hit profoundly hard, in that they depend upon sites where people congregate, employ more part-time workers, and have laid off sometimes thousands within weeks of this crisis, we would rather see that category addressed more distinctly, excluding those large organizations that do not fit in that category. This is a provision that should be better defined to extend eligibility just to nonprofits on the cusp between the small-employer program and the mid-size employer loans contemplated in the CARES Act.
The entire sector should also be grateful for the quick work of this coalition, which has pushed for new provisions to:
- Strengthen Charitable Giving Incentives to encourage all Americans to help their communities through charitable donations during these challenging times by making donations on and after March 13 (date of national emergency declaration) and before July 16 to claim the deductions on their 2019 tax filings (applicable to itemized and above-the-line deductions) and improving the Above-the-Line Deduction in CARES Act Section 2204.
- Treat Self-Funded Nonprofits Fairly by increasing the federal unemployment insurance reimbursement for self-funded nonprofits to 100 percent of costs in CARES Act Section 2103.
- Increase Emergency Funding by appropriating funds for targeted state formula grants and programs that can provide a rapid infusion of cash to nonprofit organizations that are partnering with state and local governments to protect vulnerable families and frontline responders.
https://nonprofitquarterly.org/cares-act-new-nonprofit-provisions-pushed-for-next-round-of-relief-money/
For very small businesses that can't find a bank to help with a CARES Act loan
Very small businesses and not-for-profits without a history of bank lending are having trouble finding banks to make CARES Act Payroll Protection loans. Its a big problem that should be addressed by the SBA.
There are a number of on-line and other sources of pragmatic advice, although all are handicapped by problems of uncertainty and lack of resources in the government programs.
See, for example:
https://www.inc.com/video/what-you-need-to-know-to-get-your-stimulus-loan-faster.html
https://raskin.house.gov/coronavirus/federal-legislation-faqs-fact-sheets
Also, the NYT suggests that some lenders have said they will work with new customers. They include Ready Capital (a nonbank lender that already had approval to make S.B.A. loans) and Kabbage (an online lender that teamed up with a bank).
https://www.nytimes.com/article/small-business-loans-stimulus-grants-freelancers-coronavirus.html
Very small businesses and not-for-profits without a history of bank lending are having trouble finding banks to make CARES Act Payroll Protection loans. Its a big problem that should be addressed by the SBA.
There are a number of on-line and other sources of pragmatic advice, although all are handicapped by problems of uncertainty and lack of resources in the government programs.
See, for example:
https://www.inc.com/video/what-you-need-to-know-to-get-your-stimulus-loan-faster.html
https://raskin.house.gov/coronavirus/federal-legislation-faqs-fact-sheets
Also, the NYT suggests that some lenders have said they will work with new customers. They include Ready Capital (a nonbank lender that already had approval to make S.B.A. loans) and Kabbage (an online lender that teamed up with a bank).
https://www.nytimes.com/article/small-business-loans-stimulus-grants-freelancers-coronavirus.html
Rachel Carson Council: COVID and food insecurity
What COVID-19 is revealing is what some of us already knew — 40 million Americans were food insecure before the pandemic; now the numbers are rapidly rising. The people that were most vulnerable to food insecurity in this country are more vulnerable than ever before. With the economy getting worse and people unable to work, we need to call on our policy makers and legislators to ensure safety and security for our most at-risk populations. Just a few months before COVID-19, President Trump was creating new, restrictive SNAP eligibility requirements that were scheduled to go into effect on April 1st, excluding 700,000 people from the program. The pandemic has at least shown that SNAP is a basic necessity for many Americans. With public pressure, the newly-passed $2 trillion-dollar COVID-19 bill includes extra funding for federal food distribution and blocks any new SNAP requirements. And, most importantly, the Senate’s stimulus bill now includes $16 billion dollars’ worth of SNAP food assistance (Lisa Held, 2020).
Excerpt from https://rachelcarsoncouncil.org/covid-19-revealing-americas-food-insecurity/?eType=EmailBlastContent&eId=4bb8a44a-523a-4cc1-b610-1f069a663701
From JAMA Viewpoint
March 27, 2020
The Importance of Addressing Advance Care Planning and Decisions About Do-Not-Resuscitate Orders During Novel Coronavirus 2019 (COVID-19)
J. Randall Curtis, MD, MPH1,2; Erin K. Kross, MD1,2; Renee D. Stapleton, MD, PhD3
Published online March 27, 2020. doi:10.1001/jama.2020.4894
EXCERPT:
The novel coronavirus disease 2019 (COVID-19) pandemic is challenging health care systems worldwide and raising important ethical issues, especially regarding the potential need for rationing health care in the context of scarce resources and crisis capacity. Even if capacity to provide care is sufficient, one priority should be addressing goals of care in the setting of acute life-threatening illness, especially for patients with chronic, life-limiting disease.
Clinicians should ensure patients receive the care they want, aligning the care that is delivered with patients’ values and goals. The importance of goal-concordant care is not new or even substantially different in the context of this pandemic, but the importance of providing goal-concordant care is now heightened in several ways. Patients most likely to develop severe illness will be older and have greater burden of chronic illness—exactly those who may wish to forgo prolonged life support and who may find their quality of life unacceptable after prolonged life support.1 In addition, recent reports suggest that survival may be substantially lower when acute respiratory distress syndrome is associated with COVID-19 vs when it is associated with other etiologies.2,3
In this context, advance care planning prior to serious acute illness and discussions about goals of care at the onset of serious acute illness should be a high priority for 3 reasons.
First, clinicians should always strive to avoid intensive life-sustaining treatments when unwanted by patients.
Second, avoiding nonbeneficial or unwanted high-intensity care becomes especially important in times of stress on health care capacity.
Third, provision of nonbeneficial or unwanted high-intensity care may put other patients, family members, and health care workers at higher risk of transmission of severe acute respiratory syndrome coronavirus.
Now is the time to implement advance care planning to ensure patients do not receive care they would not want if they become too severely ill to make their own decisions. As eloquently pointed out by an intensivist, “If you do not talk with [your family] about this now, you may have to have a much more difficult conversation with me later.”4
Several online resources can guide these advance care planning discussions.5-7
Full article: https://jamanetwork.com/journals/jama/fullarticle/2763952?guestAccessKey=9207f0d4-7bcd-477b-9957-2e3c074d13a3&utm_content=weekly_highlights&utm_term=040420&utm_source=silverchair&utm_campaign=jama_network&cmp=1&utm_medium=email
March 27, 2020
The Importance of Addressing Advance Care Planning and Decisions About Do-Not-Resuscitate Orders During Novel Coronavirus 2019 (COVID-19)
J. Randall Curtis, MD, MPH1,2; Erin K. Kross, MD1,2; Renee D. Stapleton, MD, PhD3
Published online March 27, 2020. doi:10.1001/jama.2020.4894
EXCERPT:
The novel coronavirus disease 2019 (COVID-19) pandemic is challenging health care systems worldwide and raising important ethical issues, especially regarding the potential need for rationing health care in the context of scarce resources and crisis capacity. Even if capacity to provide care is sufficient, one priority should be addressing goals of care in the setting of acute life-threatening illness, especially for patients with chronic, life-limiting disease.
Clinicians should ensure patients receive the care they want, aligning the care that is delivered with patients’ values and goals. The importance of goal-concordant care is not new or even substantially different in the context of this pandemic, but the importance of providing goal-concordant care is now heightened in several ways. Patients most likely to develop severe illness will be older and have greater burden of chronic illness—exactly those who may wish to forgo prolonged life support and who may find their quality of life unacceptable after prolonged life support.1 In addition, recent reports suggest that survival may be substantially lower when acute respiratory distress syndrome is associated with COVID-19 vs when it is associated with other etiologies.2,3
In this context, advance care planning prior to serious acute illness and discussions about goals of care at the onset of serious acute illness should be a high priority for 3 reasons.
First, clinicians should always strive to avoid intensive life-sustaining treatments when unwanted by patients.
Second, avoiding nonbeneficial or unwanted high-intensity care becomes especially important in times of stress on health care capacity.
Third, provision of nonbeneficial or unwanted high-intensity care may put other patients, family members, and health care workers at higher risk of transmission of severe acute respiratory syndrome coronavirus.
Now is the time to implement advance care planning to ensure patients do not receive care they would not want if they become too severely ill to make their own decisions. As eloquently pointed out by an intensivist, “If you do not talk with [your family] about this now, you may have to have a much more difficult conversation with me later.”4
Several online resources can guide these advance care planning discussions.5-7
Full article: https://jamanetwork.com/journals/jama/fullarticle/2763952?guestAccessKey=9207f0d4-7bcd-477b-9957-2e3c074d13a3&utm_content=weekly_highlights&utm_term=040420&utm_source=silverchair&utm_campaign=jama_network&cmp=1&utm_medium=email
Strategy For Small Business Owners Frustrated With Troubled Paycheck Protection Program Launch
by Ryan Guina, Forbes Contributor
DAR editorial comment: I like the Guina piece excerpted below because it moves beyond complaining about the serious deficiencies to the Government's roleout of small business assistance to suggesting possible small business strategies.
The recently passed the Coronavirus Aid, Relief and Economic Security (CARES) Act included a potential lifeline for small businesses, a $349 billion loan program called the Paycheck Protection Program (PPP). The PPP Loan is designed to help small businesses keep their doors open during a time of social distancing and mandatory business closures.
Unfortunately, the program was rushed through the implementation process and was pushed live before banks had the ability to create stable processes for accepting and funding these loan applications.
The CARES Act was signed into law on Friday, March 27, 2020. The Small Business Administration (SBA) and Treasury announced that the first day banks would accept PPP Loan applications would be Friday, April 3, 2020, just one week after the Act was passed. The Interim Final Rule, which provides guidelines for how the program will be run, was released the evening of Thursday, April 2, 2020, only hours before the deadline banks were given to begin accepting loans.
Many Banks Simply Weren’t Ready to Handle This Program
While some smaller banks began accepting PPP Loan applications right away, many of the larger commercial banks informed their customers they were not currently accepting applications. Many other banks were limiting applications to current customers only.
Some banks even went so far as to limit applications to customers that had both an established bank account, and an existing loan product, such as a small business loan, business credit card or business line of credit.
This latter limitation is especially frustrating for small business owners.
* * *
Where Can Small Business Turn if Their Bank Isn’t Accepting PPP Loan Applications?
The SBA has announced that business owners can apply at any participating SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, or Farm Credit System institution.
However, many banks are currently limiting PP Loan applications to current customers.
If this describes your bank, then you have several choices:
There are pros and cons to each of these options.
Should Small Business Owners Wait Until Their Bank Begins Accepting Applications?
While the program is open through June 30, 2020, funds are limited. The CARES Act included $349 billion toward helping small businesses. Midway through the first day, Steven Mnuchin, the Secretary of the Treasury, tweeted that over $1.8 billion in PPP Loans had already been processed, primarily from community banks. Some big banks had already taken in large amounts as well, but were not included in those numbers.
Waiting is an option, but it is not without risk. The SBA expects this program to be oversubscribed and funds may run out in the next few weeks.
Should Small Business Owners Open an Account Elsewhere?
With many banks limiting access to current customers, opening a new business bank account is an option. However, this can take time, as opening a business bank account can take more time than opening a personal account, which can be opened online in just a few minutes.
In addition, some banks are limiting loan applications to clients that were already customers prior to the loan being announced. If you decide to open a new bank account, be sure to clarify whether or not you will be able to apply for the PPP loan.
Finding Another Participating SBA 7(a) Lender is Another Option
The SBA isn’t limiting the PPP Loan funding to banks. You can try finding another lender that will fund these loans. The SBA website has a list of the top 100 most active SBA 7(a) lenders.
At this point, it may be worth working through that list to see which lenders are accepting applications at this time.
Will The PPP Loan Program Run Out of Funds?
At this point, it is almost a given that the funds will run out. The question is when? And right now, no one knows when that will happen.
In addition to the numbers tweeted by Steven Mnuchin, Bank of America tweeted they processed over $6 billion in PPP loans in just the first day of the program.
* * *
Full article: https://www.forbes.com/sites/ryanguina/2020/04/04/small-business-owners-frustrated-with-failed-paycheck-protection-program-launch/#5bd4c3546500
by Ryan Guina, Forbes Contributor
DAR editorial comment: I like the Guina piece excerpted below because it moves beyond complaining about the serious deficiencies to the Government's roleout of small business assistance to suggesting possible small business strategies.
The recently passed the Coronavirus Aid, Relief and Economic Security (CARES) Act included a potential lifeline for small businesses, a $349 billion loan program called the Paycheck Protection Program (PPP). The PPP Loan is designed to help small businesses keep their doors open during a time of social distancing and mandatory business closures.
Unfortunately, the program was rushed through the implementation process and was pushed live before banks had the ability to create stable processes for accepting and funding these loan applications.
The CARES Act was signed into law on Friday, March 27, 2020. The Small Business Administration (SBA) and Treasury announced that the first day banks would accept PPP Loan applications would be Friday, April 3, 2020, just one week after the Act was passed. The Interim Final Rule, which provides guidelines for how the program will be run, was released the evening of Thursday, April 2, 2020, only hours before the deadline banks were given to begin accepting loans.
Many Banks Simply Weren’t Ready to Handle This Program
While some smaller banks began accepting PPP Loan applications right away, many of the larger commercial banks informed their customers they were not currently accepting applications. Many other banks were limiting applications to current customers only.
Some banks even went so far as to limit applications to customers that had both an established bank account, and an existing loan product, such as a small business loan, business credit card or business line of credit.
This latter limitation is especially frustrating for small business owners.
* * *
Where Can Small Business Turn if Their Bank Isn’t Accepting PPP Loan Applications?
The SBA has announced that business owners can apply at any participating SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, or Farm Credit System institution.
However, many banks are currently limiting PP Loan applications to current customers.
If this describes your bank, then you have several choices:
- You can wait until your bank starts accepting PPP Loan applications;
- You can try to open a new bank account elsewhere;
- or you can apply through another participating SBA 7(a) lender. There are some companies that specialize in small business loans that have already streamlined the application process for this program.
There are pros and cons to each of these options.
Should Small Business Owners Wait Until Their Bank Begins Accepting Applications?
While the program is open through June 30, 2020, funds are limited. The CARES Act included $349 billion toward helping small businesses. Midway through the first day, Steven Mnuchin, the Secretary of the Treasury, tweeted that over $1.8 billion in PPP Loans had already been processed, primarily from community banks. Some big banks had already taken in large amounts as well, but were not included in those numbers.
Waiting is an option, but it is not without risk. The SBA expects this program to be oversubscribed and funds may run out in the next few weeks.
Should Small Business Owners Open an Account Elsewhere?
With many banks limiting access to current customers, opening a new business bank account is an option. However, this can take time, as opening a business bank account can take more time than opening a personal account, which can be opened online in just a few minutes.
In addition, some banks are limiting loan applications to clients that were already customers prior to the loan being announced. If you decide to open a new bank account, be sure to clarify whether or not you will be able to apply for the PPP loan.
Finding Another Participating SBA 7(a) Lender is Another Option
The SBA isn’t limiting the PPP Loan funding to banks. You can try finding another lender that will fund these loans. The SBA website has a list of the top 100 most active SBA 7(a) lenders.
At this point, it may be worth working through that list to see which lenders are accepting applications at this time.
Will The PPP Loan Program Run Out of Funds?
At this point, it is almost a given that the funds will run out. The question is when? And right now, no one knows when that will happen.
In addition to the numbers tweeted by Steven Mnuchin, Bank of America tweeted they processed over $6 billion in PPP loans in just the first day of the program.
* * *
Full article: https://www.forbes.com/sites/ryanguina/2020/04/04/small-business-owners-frustrated-with-failed-paycheck-protection-program-launch/#5bd4c3546500
Trump Administration Plans to Pay Hospitals to Treat Uninsured Coronavirus Patients--Update
By Stephanie Armour
The Trump administration is expected to use a federal stimulus package to pay hospitals that treat uninsured people with the new coronavirus as long as they agree not to bill the patients or issue unexpected charges, according to two people familiar with the planning.
The plan, which could be released Friday, comes as the White House faces mounting criticism for not launching a special enrollment period for people seeking coverage under the Affordable Care Act. Congressional Democrats also are pressuring the administration and insurers to waive treatment costs for the growing number of Americans who are losing employer-provided health coverage as job losses mount.
Hospitals treating the uninsured often bill patients for the difference between the amount they get from the government and the cost of care. The uninsured also may get bills for care provided by doctors who aren't directly employed by the hospital. Both would be barred under the administration proposal, and hospitals would likely be reimbursed at current Medicare rates, people familiar with the planning said.
Hospitals are eager to get funding and administration officials are working now to determine how the money will be divided, according to one of the people familiar with the planning. It will go toward revenue assistance, covering the costs of the uninsured, and the needs of hospitals. For example, needs may be higher for hospitals in hotspots hard-hit by the pandemic.
Hospitals, which typically bear the brunt of costs for uncompensated care, have been bracing for an influx of patients. Hospitals of all types provided more than $38 billion in uncompensated care in 2017, according to the American Hospital Association.
Full article: https://ih.advfn.com/stock-market/stock-news/82165041/trump-administration-plans-to-pay-hospitals-to-tre
By Stephanie Armour
The Trump administration is expected to use a federal stimulus package to pay hospitals that treat uninsured people with the new coronavirus as long as they agree not to bill the patients or issue unexpected charges, according to two people familiar with the planning.
The plan, which could be released Friday, comes as the White House faces mounting criticism for not launching a special enrollment period for people seeking coverage under the Affordable Care Act. Congressional Democrats also are pressuring the administration and insurers to waive treatment costs for the growing number of Americans who are losing employer-provided health coverage as job losses mount.
Hospitals treating the uninsured often bill patients for the difference between the amount they get from the government and the cost of care. The uninsured also may get bills for care provided by doctors who aren't directly employed by the hospital. Both would be barred under the administration proposal, and hospitals would likely be reimbursed at current Medicare rates, people familiar with the planning said.
Hospitals are eager to get funding and administration officials are working now to determine how the money will be divided, according to one of the people familiar with the planning. It will go toward revenue assistance, covering the costs of the uninsured, and the needs of hospitals. For example, needs may be higher for hospitals in hotspots hard-hit by the pandemic.
Hospitals, which typically bear the brunt of costs for uncompensated care, have been bracing for an influx of patients. Hospitals of all types provided more than $38 billion in uncompensated care in 2017, according to the American Hospital Association.
Full article: https://ih.advfn.com/stock-market/stock-news/82165041/trump-administration-plans-to-pay-hospitals-to-tre
Open Technology Institute
Easing the Home Connectivity Crunch
Wi-Fi's Role in the 5G Wireless Ecosystem
RSVP
The widespread work and school closures that are disrupting daily life and the economy have highlighted how critical it is to have affordable, high-capacity internet connectivity throughout every home. Stay-at-home orders are turning homes into classrooms and offices, with parents and kids sharing available bandwidth on multiple laptops, tablets, and smartphones.
Even homes with gigabit-capable fiber or cable service are discovering that today’s Wi-Fi is constrained in supporting multiple users engaged in video conferencing, streaming video, and other high-bandwidth applications.
Beyond the current crisis, future 5G applications, such as virtual and augmented reality, will require more and more bandwidth. Smart homes and enterprises need affordable bandwidth to connect the emerging Internet of Things (IoT). In rural and small town areas, more unlicensed spectrum will allow wireless internet service providers (WISPs) to provide higher-capacity service. And in lower-income areas, enhanced Wi-Fi can help narrow the digital divide.
FCC Chairman Ajit Pai will join us to discuss the importance of Next Generation Wi-Fi (Wi-Fi 6) as a complement to 5G mobile networks and as a pillar of a world-leading 5G wireless ecosystem.
The FCC is considering two proposals to open more than 1200 megahertz of unlicensed spectrum in the 5 and 6 GHz bands capable of supporting the very wide channels of spectrum for Wi-Fi 6 and Wi-Fi 7 (160 megahertz and beyond) and paving the way for a new era of wireless innovation.
Responding to the Chairman’s remarks, a panel discussion featuring experts with a variety of perspectives on future use cases for Wi-Fi and wireless connectivity will join us.
Keynote Discussion:
Chairman Ajit Pai, Federal Communications Commission, @AjitPaiFCC
Discussion Panel:
Ross Marchand, @RossAMarchand
Policy Director, Taxpayer Protection Alliance
Christina Mason, @WISPAnews
Vice President for Legislative Affairs, Wireless Internet Service Providers Association (WISPA)
John Windhausen, @shlbcoalition
Executive Director, Schools, Health & Libraries Broadband (SHLB) Coalition
Audrey Connors, @CharterGOV
Vice President, Government Affairs, Charter Communications
Chris Szymanski, @C_Szymanski
Director, Product Marketing & Global Government Affairs, Broadcom Inc.
Michael Calabrese, @MCalabreseNAF (Moderator)
Director, Wireless Future Project, New America’s Open Technology Institute
Please note that this event will be online only.
You can register for the event via Zoom by clicking here.
If you have any questions about accessing the webcast, please reach out to [email protected].
This event is co-sponsored by the Taxpayers Protection Alliance.
Easing the Home Connectivity Crunch: Wi-Fi’s Role in the 5G Wireless Ecosystem
Monday, April 6, 2020
1:00 PM – 2:15 PM ET
ONLINE
RSVP
Tweet about mergers and ventilators by Michael Carrier -- Rutgers Law School
https://www.linkedin.com/in/michael-carrier-7029b81?miniProfileUrn=urn%3Ali%3Afs_miniProfile%3AACoAAABTcPIBXTA3LBC9u5ZoPTkDJWFXxmKxY20
We don’t have enough ventilators. A decade ago, the gov’t chose small company Newport to supply it with inexpensive versions. But Newport was swallowed up by Covidien to protect its existing ventilator business. Textbook example of consolidation harms, Innovator’s Dilemma (company protects its business), killer acquisitions (acquire/quash rival to maintain existing model).
* * *
The Carrier tweet refers to this NYT article
The U.S. Tried to Build a New Fleet of Ventilators. The Mission Failed. nytimes.com https://www.nytimes.com/2020/03/29/business/coronavirus-us-ventilator-shortage.html?referringSource=articleShare
The Federal Government's clouded crystal ball revisited
“I don’t think corona is as big a threat as people make it out to be,” the acting chairman of the Council of Economic Advisers, Tomas Philipson, told reporters during a Feb. 18 briefing
"I have all this data about I.C.U. capacity . . . . "I'm doing my own projections, and I've gotten a lot smarter about this. New York doesn't need all the ventilators." Jared Kushner
Posting by DAR
“I don’t think corona is as big a threat as people make it out to be,” the acting chairman of the Council of Economic Advisers, Tomas Philipson, told reporters during a Feb. 18 briefing
"I have all this data about I.C.U. capacity . . . . "I'm doing my own projections, and I've gotten a lot smarter about this. New York doesn't need all the ventilators." Jared Kushner
Posting by DAR
Advice for small businesses and not-for-profits seeking CARES Act loan help
With $2 trillion allocated for businesses, not-for-profits, individuals, federal agencies, and state and local governments, the CARES Act has been designed to distribute capital broadly. There are a number of provisions that impact small businesses and not-for-profits. It’s early to expect regulations and procedural advice from the federal Small Business Administration or banks that will help administer the CARES Act. But we have found some information that may help with early planning.
There is useful information in the U.S. Chamber of Commerce Guide to the recently passed Coronavirus Aid, Relief, and Economic Security Act (https://www.uschamber.com/co/start/strategy/cares-act-small-business-guide ) (see the statute at https://www.govinfo.gov/content/pkg/CREC-2020-03-27/pdf/CREC-2020-03-27.pdf)
The Chamber’s Guide to the CARES Act explains that currently, the SBA guarantees small business loans that are given out by a network of more than 800 lenders across the U.S. The new CARES Paycheck Protection Program creates a type of emergency loan that can be forgiven when used to maintain payroll through June and expands the network beyond SBA so that more banks, credit unions and lenders can issue those loans. The basic purpose is to incentivize small businesses to not lay off workers and to rehire laid-off workers that lost jobs due to COVID-19 disruptions.
The Guide explains that the Paycheck Protection Program, one of the largest sections of the CARES Act, is the most important provision in the new stimulus bill for most small businesses. This new program sets aside $350 billion in government-backed loans, and it is modeled after the existing SBA 7(a) loan program (see https://www.uschamber.com/co/run/business-financing/guide-to-sba-loans)
The Paycheck Protection Program offers loans for small businesses with fewer than 500 employees, select types of businesses with fewer than 1,500 employees, 501(c)(3) non-profits with fewer than 500 workers and some 501(c)(19) veteran organizations. Additionally, the self-employed, sole proprietors, and freelance and gig economy workers are also eligible to apply. Businesses, even without a personal guarantee or collateral, can get a loan as long as they were operational on February 15, 2020.
The maximum loan amount under the Paycheck Protection Act is $10 million, with an interest rate no higher than 4%. No personal guarantee or collateral is required for the loan. The lenders, including banks that will work in cooperation with the federal government, are expected to defer fees, principal and interest for no less than six months and no more than one year.
Small businesses that take out these loans can get some or all of their loans forgiven. The Guide explains that, generally speaking, as long as employers continue paying employees at normal levels during the eight weeks following the origination of the loan, then the amount they spent on payroll costs (excluding costs for any compensation above $100,000 annually), mortgage interest, rent payments and utility payments can be combined and that portion of the loan will be forgiven.
The Chamber Guide points out that another important aspect of the CARES Act for small businesses is that it expands eligibility for the SBA’s Economic Injury Disaster Loans (EIDLs). [See https://www.uschamber.com/co/start/strategy/applying-for-sba-disaster-relief-loan] In early March, prior to passage of the CARES Act, the SBA’s disaster loan program was extended to all small businesses affected by COVID-19, but the CARES Act opens this program up further and makes it easier to apply.
The Guide points out the following changes worked by the CARES Act concerning the the SBA’s Economic Injury Disaster Loans (EIDLs):
In the meanwhile, there is some additional pragmatic advice available, including advice from Peter Reilly at https://www.forbes.com/sites/peterjreilly/2020/03/28/paycheck-protection-programdevilish-detailssome-uncertainty/#5ba2051f652f).
Reilly emphasizes that the new CARES Act Paycheck Protection Program is an extension of the Small Business Administration 7(a) program. Reilly further points out that the SBA needs to make up the exact rules and then the rules have to be implemented by the 1,800 banks that are part of the program. Reilly recommends that “to participate you need to contact a bank.” Reilly helpfully advises that “US Bank has a pre-application you can do on-line and they will get back to you.” [https://apply.usbank.com/applications/business/InquiryForm] Reilly says that he did not get anywhere with the other large banks he contacted. He says that “If you have an existing banking relationship, you should contact that bank first thing.”
Reilly offers useful advice on what borrowers will need to demonstrate to lenders. Besides promising that you are only going to take out one loan under the Payroll Protection Program, you have to certify two things. One is that you intend to use the money to retain workers, maintain payroll or make mortgage lease or utility payments. The other thing you have to certify is that “uncertainty of current economic conditions makes necessary the loan request” to support your ongoing operations.
Another point emphasized by Reilly is that no collateral or personal guaranty is required. Interest is no more than 4% and repayment, if required, can be over a period as long as ten years. You don’t have to show that you can’t borrow the money elsewhere.
Finally, here is an excerpt from the Reilly/Forbes article that includes useful comment on aspects of the CARES Act that will require further clarification:
There are three important things that people want to know about this program. How much can you borrow? How are you supposed to spend the money? And how much of the loan will be forgiven?
It can be somewhat confusing because each set of rules uses some of the same elements, but they are different in how they are combined.
“Payroll costs” is the most important concept and thankfully is defined the same way throughout.
“Payroll costs” is defined very broadly and includes salary, wage, commission, or similar compensation, payment of cash tip or equivalent, payment for vacation, parental, family, medical, or sick leave, allowance for dismissal or separation, payment required for the provisions of group health care benefits, including insurance premiums, payment of any retirement benefit, and payment of State or local tax assessed on the compensation of employees.
And there is one more thing included in payroll costs that I find pretty puzzling:
“the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in 1 year, as prorated for the covered period”
Now I am not sure exactly what that last item means. I read it to mean that you also include the people you are paying as independent contractors and if you are a sole proprietor whatever your schedule C profit was (up to $100,000) and something similar for partnerships.
Including your Schedule C profit would put you in a similar position (slightly better maybe) as an S corporation owner who paid himself a reasonable salary. An S corporation owner that did not pay himself salary might be worse off.
Excluded from payroll costs are amounts attributable to payroll over $100,000 and amounts for which you are getting credit under the Families First Coronavirus Response Act.
How Much Can You Borrow?
This is a little confusing. There are things that you can use the loan for besides “payroll costs”, but the maximum loan computation is based solely on “payroll costs”. It is 2.5 times the average monthly amount from “ the 1-year period before the date on which the loan is made” unless the Administrator, whoever that is, says that you are seasonal. If you are seasonal it is the amount you paid in 2019 for the 12 week period beginning February 15, 2019 or at your election March 1 to June 30.
And there is a $10,000,000 limit, but if your payroll is that large, you should have staff figuring this out for you.
“The 1-year period before the date on which the loan is made” strikes me as something of a moving target.
What Can You Use The Loan For?
Besides payroll costs you can use the loan funds for:
“(II) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
“(III) employee salaries, commissions, or similar compensations;
“(IV) payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
“(V) rent (including rent under a lease agreement);
“(VI) utilities; and
“(VII) interest on any other debt obligations that were incurred before the covered period.
There does seem to be some redundancy there.
I would recommend that you seriously consider opening an account where you deposit the loan proceeds and using that account to pay permitted expenses. That would give you a very easy audit trail.
How Much Can Be Forgiven?
This gets very tricky, because the forgiveness section uses the term “covered period”, but defines it differently than the loan amount section. It is the eight-week period beginning with the origination of the loan.
Here is the actual language:
“Forgiveness.—An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the covered period:
(1) Payroll costs.
(2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
(3) Any payment on any covered rent obligation.
(4) Any covered utility payment.”
It would seem that you are on a kind of hybrid accounting method in measuring the forgiveness amount. Things that you paid during the covered period that you incurred before and things that you incur during the period that you pay after seem to count. I wouldn’t plan on that being the right interpretation, but keep it in mind.
But then there is a reduction in the forgiveness amount based on a headcount fraction.
“ (A) IN GENERAL.—The amount of loan forgiveness under this section shall be reduced, but not increased, by multiplying the amount described in subsection (b) by the quotient obtained by dividing--
(i) the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period; by
(ii) (I) at the election of the borrower--
(aa) the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019; or
(bb) the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 2020; or
(II) in the case of an eligible recipient that is seasonal employer, as determined by the Administrator, the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019.
(B) CALCULATION OF AVERAGE NUMBER OF EMPLOYEES.—For purposes of subparagraph (A), the average number of full-time equivalent employees shall be determined by calculating the average number of full-time equivalent employees for each pay period falling within a month.”
There is also a carve-back in the forgiveness amount if there is a reduction in pay of more than 25% of any individual full-time employee.
These reductions, however, are not implemented if you are fully staffed up by June 30.
All Might Not Be Forgiven
Even if you spend all the money on permitted expenses, the difference in the definition of “covered period” might mean that you won’t have the full amount forgiven. And then there is that headcount problem.
[end of the Reilly excerpt from Forbes]
This posting is by Don Allen Resnikoff
With $2 trillion allocated for businesses, not-for-profits, individuals, federal agencies, and state and local governments, the CARES Act has been designed to distribute capital broadly. There are a number of provisions that impact small businesses and not-for-profits. It’s early to expect regulations and procedural advice from the federal Small Business Administration or banks that will help administer the CARES Act. But we have found some information that may help with early planning.
There is useful information in the U.S. Chamber of Commerce Guide to the recently passed Coronavirus Aid, Relief, and Economic Security Act (https://www.uschamber.com/co/start/strategy/cares-act-small-business-guide ) (see the statute at https://www.govinfo.gov/content/pkg/CREC-2020-03-27/pdf/CREC-2020-03-27.pdf)
The Chamber’s Guide to the CARES Act explains that currently, the SBA guarantees small business loans that are given out by a network of more than 800 lenders across the U.S. The new CARES Paycheck Protection Program creates a type of emergency loan that can be forgiven when used to maintain payroll through June and expands the network beyond SBA so that more banks, credit unions and lenders can issue those loans. The basic purpose is to incentivize small businesses to not lay off workers and to rehire laid-off workers that lost jobs due to COVID-19 disruptions.
The Guide explains that the Paycheck Protection Program, one of the largest sections of the CARES Act, is the most important provision in the new stimulus bill for most small businesses. This new program sets aside $350 billion in government-backed loans, and it is modeled after the existing SBA 7(a) loan program (see https://www.uschamber.com/co/run/business-financing/guide-to-sba-loans)
The Paycheck Protection Program offers loans for small businesses with fewer than 500 employees, select types of businesses with fewer than 1,500 employees, 501(c)(3) non-profits with fewer than 500 workers and some 501(c)(19) veteran organizations. Additionally, the self-employed, sole proprietors, and freelance and gig economy workers are also eligible to apply. Businesses, even without a personal guarantee or collateral, can get a loan as long as they were operational on February 15, 2020.
The maximum loan amount under the Paycheck Protection Act is $10 million, with an interest rate no higher than 4%. No personal guarantee or collateral is required for the loan. The lenders, including banks that will work in cooperation with the federal government, are expected to defer fees, principal and interest for no less than six months and no more than one year.
Small businesses that take out these loans can get some or all of their loans forgiven. The Guide explains that, generally speaking, as long as employers continue paying employees at normal levels during the eight weeks following the origination of the loan, then the amount they spent on payroll costs (excluding costs for any compensation above $100,000 annually), mortgage interest, rent payments and utility payments can be combined and that portion of the loan will be forgiven.
The Chamber Guide points out that another important aspect of the CARES Act for small businesses is that it expands eligibility for the SBA’s Economic Injury Disaster Loans (EIDLs). [See https://www.uschamber.com/co/start/strategy/applying-for-sba-disaster-relief-loan] In early March, prior to passage of the CARES Act, the SBA’s disaster loan program was extended to all small businesses affected by COVID-19, but the CARES Act opens this program up further and makes it easier to apply.
The Guide points out the following changes worked by the CARES Act concerning the the SBA’s Economic Injury Disaster Loans (EIDLs):
- EIDLs are now also available to ESOPs with fewer than 500 employees. (An employee stock ownership plan (ESOP) is an employee benefit plan that gives workers ownership interest in the company.) They are also available to all non-profit organizations, including 501(c)(6)s, and to individuals operating as sole proprietors or independent contractors.
- EIDLs can be approved by the SBA based solely on an applicant’s credit score.
- EIDLs that are smaller than $200,000 can be approved without a personal guarantee.
- Borrowers can receive a $10,000 emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue losses.
In the meanwhile, there is some additional pragmatic advice available, including advice from Peter Reilly at https://www.forbes.com/sites/peterjreilly/2020/03/28/paycheck-protection-programdevilish-detailssome-uncertainty/#5ba2051f652f).
Reilly emphasizes that the new CARES Act Paycheck Protection Program is an extension of the Small Business Administration 7(a) program. Reilly further points out that the SBA needs to make up the exact rules and then the rules have to be implemented by the 1,800 banks that are part of the program. Reilly recommends that “to participate you need to contact a bank.” Reilly helpfully advises that “US Bank has a pre-application you can do on-line and they will get back to you.” [https://apply.usbank.com/applications/business/InquiryForm] Reilly says that he did not get anywhere with the other large banks he contacted. He says that “If you have an existing banking relationship, you should contact that bank first thing.”
Reilly offers useful advice on what borrowers will need to demonstrate to lenders. Besides promising that you are only going to take out one loan under the Payroll Protection Program, you have to certify two things. One is that you intend to use the money to retain workers, maintain payroll or make mortgage lease or utility payments. The other thing you have to certify is that “uncertainty of current economic conditions makes necessary the loan request” to support your ongoing operations.
Another point emphasized by Reilly is that no collateral or personal guaranty is required. Interest is no more than 4% and repayment, if required, can be over a period as long as ten years. You don’t have to show that you can’t borrow the money elsewhere.
Finally, here is an excerpt from the Reilly/Forbes article that includes useful comment on aspects of the CARES Act that will require further clarification:
There are three important things that people want to know about this program. How much can you borrow? How are you supposed to spend the money? And how much of the loan will be forgiven?
It can be somewhat confusing because each set of rules uses some of the same elements, but they are different in how they are combined.
“Payroll costs” is the most important concept and thankfully is defined the same way throughout.
“Payroll costs” is defined very broadly and includes salary, wage, commission, or similar compensation, payment of cash tip or equivalent, payment for vacation, parental, family, medical, or sick leave, allowance for dismissal or separation, payment required for the provisions of group health care benefits, including insurance premiums, payment of any retirement benefit, and payment of State or local tax assessed on the compensation of employees.
And there is one more thing included in payroll costs that I find pretty puzzling:
“the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in 1 year, as prorated for the covered period”
Now I am not sure exactly what that last item means. I read it to mean that you also include the people you are paying as independent contractors and if you are a sole proprietor whatever your schedule C profit was (up to $100,000) and something similar for partnerships.
Including your Schedule C profit would put you in a similar position (slightly better maybe) as an S corporation owner who paid himself a reasonable salary. An S corporation owner that did not pay himself salary might be worse off.
Excluded from payroll costs are amounts attributable to payroll over $100,000 and amounts for which you are getting credit under the Families First Coronavirus Response Act.
How Much Can You Borrow?
This is a little confusing. There are things that you can use the loan for besides “payroll costs”, but the maximum loan computation is based solely on “payroll costs”. It is 2.5 times the average monthly amount from “ the 1-year period before the date on which the loan is made” unless the Administrator, whoever that is, says that you are seasonal. If you are seasonal it is the amount you paid in 2019 for the 12 week period beginning February 15, 2019 or at your election March 1 to June 30.
And there is a $10,000,000 limit, but if your payroll is that large, you should have staff figuring this out for you.
“The 1-year period before the date on which the loan is made” strikes me as something of a moving target.
What Can You Use The Loan For?
Besides payroll costs you can use the loan funds for:
“(II) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
“(III) employee salaries, commissions, or similar compensations;
“(IV) payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
“(V) rent (including rent under a lease agreement);
“(VI) utilities; and
“(VII) interest on any other debt obligations that were incurred before the covered period.
There does seem to be some redundancy there.
I would recommend that you seriously consider opening an account where you deposit the loan proceeds and using that account to pay permitted expenses. That would give you a very easy audit trail.
How Much Can Be Forgiven?
This gets very tricky, because the forgiveness section uses the term “covered period”, but defines it differently than the loan amount section. It is the eight-week period beginning with the origination of the loan.
Here is the actual language:
“Forgiveness.—An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the covered period:
(1) Payroll costs.
(2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
(3) Any payment on any covered rent obligation.
(4) Any covered utility payment.”
It would seem that you are on a kind of hybrid accounting method in measuring the forgiveness amount. Things that you paid during the covered period that you incurred before and things that you incur during the period that you pay after seem to count. I wouldn’t plan on that being the right interpretation, but keep it in mind.
But then there is a reduction in the forgiveness amount based on a headcount fraction.
“ (A) IN GENERAL.—The amount of loan forgiveness under this section shall be reduced, but not increased, by multiplying the amount described in subsection (b) by the quotient obtained by dividing--
(i) the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period; by
(ii) (I) at the election of the borrower--
(aa) the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019; or
(bb) the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 2020; or
(II) in the case of an eligible recipient that is seasonal employer, as determined by the Administrator, the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019.
(B) CALCULATION OF AVERAGE NUMBER OF EMPLOYEES.—For purposes of subparagraph (A), the average number of full-time equivalent employees shall be determined by calculating the average number of full-time equivalent employees for each pay period falling within a month.”
There is also a carve-back in the forgiveness amount if there is a reduction in pay of more than 25% of any individual full-time employee.
These reductions, however, are not implemented if you are fully staffed up by June 30.
All Might Not Be Forgiven
Even if you spend all the money on permitted expenses, the difference in the definition of “covered period” might mean that you won’t have the full amount forgiven. And then there is that headcount problem.
[end of the Reilly excerpt from Forbes]
This posting is by Don Allen Resnikoff
Coronavirus stimulus bill designates D.C. as a territory
The $2 trillion coronavirus stimulus legislation designates Washington, D.C., as a territory, meaning the District is poised to get $500 million while states will receive at least $1.25 billion apiece. Mayor Muriel Bowser said the funding level is "unconscionable ... especially given the unique challenges we take on as the seat of the federal government," and Sen. Chris Van Hollen, D-Md., said he aims to provide the additional money to the District retroactively.
Full Story: The Washington Post (tiered subscription model) (3/26), CNN (3/26)
The $2 trillion coronavirus stimulus legislation designates Washington, D.C., as a territory, meaning the District is poised to get $500 million while states will receive at least $1.25 billion apiece. Mayor Muriel Bowser said the funding level is "unconscionable ... especially given the unique challenges we take on as the seat of the federal government," and Sen. Chris Van Hollen, D-Md., said he aims to provide the additional money to the District retroactively.
Full Story: The Washington Post (tiered subscription model) (3/26), CNN (3/26)
The DC attorney general's office has sent out five cease-and-desist letters warning area stores and an online seller to stop price gouging,
news release at https://thedcline.org/2020/03/26/press-release-ag-racine-sends-cease-and-desist-letters-to-stop-price-gouging-by-district-stores-and-online-sellers/
One Southeast store reportedly upped the price for an eight-ounce bottle of hand sanitizer to $15; another charged $19.99 for a container of Lysol. "D.C. residents who are seeking scarce and essential goods to protect their health should not have to worry about paying illegally inflated prices," said AG Karl Racine.
news release at https://thedcline.org/2020/03/26/press-release-ag-racine-sends-cease-and-desist-letters-to-stop-price-gouging-by-district-stores-and-online-sellers/
One Southeast store reportedly upped the price for an eight-ounce bottle of hand sanitizer to $15; another charged $19.99 for a container of Lysol. "D.C. residents who are seeking scarce and essential goods to protect their health should not have to worry about paying illegally inflated prices," said AG Karl Racine.
Politics and the virus: Ohio and Texas have moved to make abortion inaccessible under directives seeking to free up hospital beds by postponing “elective” and “nonessential” procedures.
The American College of Obstetricians and Gynecologists and the American Board of Obstetrics and Gynecology issued a statement saying that abortion should not fall into the category of procedures that can be delayed during the coronavirus outbreak, calling it “an essential component of comprehensive health care. The statement is at https://www.acog.org/news/news-releases/2020/03/joint-statement-on-abortion-access-during-the-covid-19-outbreak
State AGs Ask Amazon, Facebook & Others To Help With COVID-19 Price Gouging
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A group of 33 attorneys general from U.S. states and territories called on Amazon, eBay, Facebook, Walmart and Craigslist to prevent price gouging on coronavirus-related products.
The coalition, led by Pennsylvania’s Democratic Attorney General Josh Shapiro, sent a letter to the companies saying they “have an ethical obligation and patriotic duty to help your fellow citizens in this time of need by doing everything in your power to stop price gouging in real-time.” Attorneys general from California, Colorado and the District of Columbia were among those involved in the effort.
https://www.cnbc.com/2020/03/25/state-ags-call-on-amazon-and-others-to-prevent-coronavirus-price-gouging.html
-
A group of 33 attorneys general from U.S. states and territories called on Amazon, eBay, Facebook, Walmart and Craigslist to prevent price gouging on coronavirus-related products.
The coalition, led by Pennsylvania’s Democratic Attorney General Josh Shapiro, sent a letter to the companies saying they “have an ethical obligation and patriotic duty to help your fellow citizens in this time of need by doing everything in your power to stop price gouging in real-time.” Attorneys general from California, Colorado and the District of Columbia were among those involved in the effort.
https://www.cnbc.com/2020/03/25/state-ags-call-on-amazon-and-others-to-prevent-coronavirus-price-gouging.html
Drivers Say Uber and Lyft Are Blocking Unemployment Pay
States like New York and California have made gig workers eligible for jobless benefits and sick days. But the companies have resisted complying.
See https://www.nytimes.com/2020/03/24/business/economy/coronavirus-uber-lyft-drivers-unemployment.html
States like New York and California have made gig workers eligible for jobless benefits and sick days. But the companies have resisted complying.
See https://www.nytimes.com/2020/03/24/business/economy/coronavirus-uber-lyft-drivers-unemployment.html
From DMN: Spinrilla Sues the RIAA for Issuing False Takedown Notices
Independent hip-hop discovery app Spinrilla is suing the Recording Industry Association of America (RIAA) for allegedly issuing false DMCA takedown notices.
The story continues here.https://www.digitalmusicnews.com/2020/03/23/spinrilla-sues-riaa-for-false-takedown-notices/
Independent hip-hop discovery app Spinrilla is suing the Recording Industry Association of America (RIAA) for allegedly issuing false DMCA takedown notices.
The story continues here.https://www.digitalmusicnews.com/2020/03/23/spinrilla-sues-riaa-for-false-takedown-notices/
DOJ moves against ‘despicable scammers’ operating fake Covid-19 vaccine website
In the first federal action against fraud involving the coronavirus outbreak, the DOJ obtained a temporary restraining order against a website selling a bogus vaccine.
The DOJ said Sunday that operators of the website “coronavirusmedicalkit.com” were engaging in an alleged wire fraud scheme to profit from the confusion and fear surrounding Covid-19.
Full article:https://fcpablog.com/2020/03/23/doj-moves-against-dispicable-scammers-operating-fake-covid-19-vaccine-website/
In the first federal action against fraud involving the coronavirus outbreak, the DOJ obtained a temporary restraining order against a website selling a bogus vaccine.
The DOJ said Sunday that operators of the website “coronavirusmedicalkit.com” were engaging in an alleged wire fraud scheme to profit from the confusion and fear surrounding Covid-19.
Full article:https://fcpablog.com/2020/03/23/doj-moves-against-dispicable-scammers-operating-fake-covid-19-vaccine-website/
Amazon Accused of Monopolization, Massive Price-Fixing Scheme
Amazon.com Inc. was hit with antitrust claims in Seattle federal court over an alleged “pricing scheme that broadly and anti-competitively impacts virtually all products offered for sale in the U.S. retail e-commerce market.”
“Amazon’s horizontal price-fixing agreement with its two million sellers is a per se violation of antitrust law,” the lawsuit says.
The proposed consumer class action targeting the e-commerce giant, which is responsible for 49% of U.S. online retail sales, was filed late Thursday in the U.S. District Court for the Western District of Washington.
The suit accuses Amazon of continuing to enforce de facto “most favored nation” pricing terms against 2 million third-party sellers offering 600 million products, despite promising the Federal Trade Commission last year that it would stop.
When the mega-retailer abandoned that policy, it was supposed to begin permitting merchants to offer lower prices through cheaper competing platforms, like eBay or their own websites, according to the complaint.
From https://news.bloomberglaw.com/mergers-and-antitrust/amazon-accused-of-monopolization-massive-price-fixing-scheme
Amazon.com Inc. was hit with antitrust claims in Seattle federal court over an alleged “pricing scheme that broadly and anti-competitively impacts virtually all products offered for sale in the U.S. retail e-commerce market.”
“Amazon’s horizontal price-fixing agreement with its two million sellers is a per se violation of antitrust law,” the lawsuit says.
The proposed consumer class action targeting the e-commerce giant, which is responsible for 49% of U.S. online retail sales, was filed late Thursday in the U.S. District Court for the Western District of Washington.
The suit accuses Amazon of continuing to enforce de facto “most favored nation” pricing terms against 2 million third-party sellers offering 600 million products, despite promising the Federal Trade Commission last year that it would stop.
When the mega-retailer abandoned that policy, it was supposed to begin permitting merchants to offer lower prices through cheaper competing platforms, like eBay or their own websites, according to the complaint.
From https://news.bloomberglaw.com/mergers-and-antitrust/amazon-accused-of-monopolization-massive-price-fixing-scheme
DNEW YORK/WASHINGTON (Reuters) - https://www.reuters.com/article/us-health-coronavirus-usa-amazon-com/amazon-asks-shoppers-to-cooperate-with-u-s-probe-of-coronavirus-price-gouging-idUSKBN21636U
Amazon.com Inc notified a customer about a Department of Justice criminal investigation of price-gouging by third-party sellers on its e-commerce marketplace.
The email was sent by Joell Parks, a senior law enforcement response specialist at Amazon to a Reuters editor, who is also an Amazon customer.
“We wanted to notify you directly about this matter in the event that you are contacted by the Department of Justice in connection with its investigation,” Parks said in his email.
The company has come under pressure from lawmakers to nab sellers engaged in price-gouging amid the coronavirus outbreak.
DC OAG issues price gouging alert
OFFICE OF THE ATTORNEY GENERAL:
REPORT PRICE GOUGING: Submit a complaint: OAG has established a rapid-response team to investigate consumer complaints about price gouging. If you believe you have been overcharged, you can report price gouging to OAG by calling(202) 442-9828, emailing[email protected], submitting a complaint online at oag.dc.gov/ConsumerComplaint. Scammers may attempt to defraud consumers by selling products that are ineffective at preventing the disease and spreading misinformation through social media and other channels. Other scammers may pretend to solicit donations to help coronavirus victims, but instead are stealing consumers’ money and personal information. Here are some tips to protect yourself from these scams: The District's price gouging consumer protection law is now in effect during the state of emergency. District law prevents any individual or company from overcharging for similar goods or services that were sold in the 90 days before the Mayor’s emergency declaration (e.g., overcharging for products such as sanitizer, tissue paper, cleaning and disinfecting products, among others). Individuals and companies that break the law are subject to $5,000 fines per violation and the revocation of licenses and permits.
PROTECT YOURSELF FROM SCAMS AND FRAUD Coronavirus (COVID-19):Know Your Rights The Office of the Attorney General (OAG) is closely monitoring the Coronavirus (COVID-19) public health situation and following the Mayor’s emergency declaration. To ensure that District residents know their rights, here are some important tips for consumers about scams, frauds, and price gouging; tips for workers about paid sick leave; and free health resources about Coronavirus (COVID-19). For the latest information, visitoag.dc.gov/coronavirus.
Beware of emails claiming to be from the CDC or experts saying that they have information about the virus. For the most up-to-date information about the Coronavirus and prevention tips, visit the Centers for DiseaseControl and Prevention (CDC) and the World Health Organization (WHO).
Consult a medical professional for questions about prevention and treatment. Ignore offers for vaccinations and be wary of advertisements for cures or treatments for the disease. While the best way to prevent this illness is to avoid exposure to the virus, the CDC and the DC Department of Health have tips to prevent the spread of respiratory illnesses.
Do your own research before donating to a charity. Remember that an organization may not be authentic just because it uses words like “CDC” or “government” in its name or has reputable looking seals or logos on its materials. There are a number of independent online sources you can use to verify that a charity is legitimate.
Use OAG’s free resource to learn more tips on how to avoid falling victim to charity scams. Report scams to the Office of the Attorney General (OAG): If you believe you have been the victim of a scam, contact OAG by calling 202-442-9828, emailing [email protected], or submitting a complaint online atoag.dc.gov/ConsumerComplaint.
Amazon.com Inc notified a customer about a Department of Justice criminal investigation of price-gouging by third-party sellers on its e-commerce marketplace.
The email was sent by Joell Parks, a senior law enforcement response specialist at Amazon to a Reuters editor, who is also an Amazon customer.
“We wanted to notify you directly about this matter in the event that you are contacted by the Department of Justice in connection with its investigation,” Parks said in his email.
The company has come under pressure from lawmakers to nab sellers engaged in price-gouging amid the coronavirus outbreak.
DC OAG issues price gouging alert
OFFICE OF THE ATTORNEY GENERAL:
REPORT PRICE GOUGING: Submit a complaint: OAG has established a rapid-response team to investigate consumer complaints about price gouging. If you believe you have been overcharged, you can report price gouging to OAG by calling(202) 442-9828, emailing[email protected], submitting a complaint online at oag.dc.gov/ConsumerComplaint. Scammers may attempt to defraud consumers by selling products that are ineffective at preventing the disease and spreading misinformation through social media and other channels. Other scammers may pretend to solicit donations to help coronavirus victims, but instead are stealing consumers’ money and personal information. Here are some tips to protect yourself from these scams: The District's price gouging consumer protection law is now in effect during the state of emergency. District law prevents any individual or company from overcharging for similar goods or services that were sold in the 90 days before the Mayor’s emergency declaration (e.g., overcharging for products such as sanitizer, tissue paper, cleaning and disinfecting products, among others). Individuals and companies that break the law are subject to $5,000 fines per violation and the revocation of licenses and permits.
PROTECT YOURSELF FROM SCAMS AND FRAUD Coronavirus (COVID-19):Know Your Rights The Office of the Attorney General (OAG) is closely monitoring the Coronavirus (COVID-19) public health situation and following the Mayor’s emergency declaration. To ensure that District residents know their rights, here are some important tips for consumers about scams, frauds, and price gouging; tips for workers about paid sick leave; and free health resources about Coronavirus (COVID-19). For the latest information, visitoag.dc.gov/coronavirus.
Beware of emails claiming to be from the CDC or experts saying that they have information about the virus. For the most up-to-date information about the Coronavirus and prevention tips, visit the Centers for DiseaseControl and Prevention (CDC) and the World Health Organization (WHO).
Consult a medical professional for questions about prevention and treatment. Ignore offers for vaccinations and be wary of advertisements for cures or treatments for the disease. While the best way to prevent this illness is to avoid exposure to the virus, the CDC and the DC Department of Health have tips to prevent the spread of respiratory illnesses.
Do your own research before donating to a charity. Remember that an organization may not be authentic just because it uses words like “CDC” or “government” in its name or has reputable looking seals or logos on its materials. There are a number of independent online sources you can use to verify that a charity is legitimate.
Use OAG’s free resource to learn more tips on how to avoid falling victim to charity scams. Report scams to the Office of the Attorney General (OAG): If you believe you have been the victim of a scam, contact OAG by calling 202-442-9828, emailing [email protected], or submitting a complaint online atoag.dc.gov/ConsumerComplaint.
Open Markets Calls for Ban on Takeovers by Large Corporation and Funds for Duration of Crisis
As Congress continues to debate its response to the COVID-19 outbreak, Open Markets Institute released the statement below, calling for an immediate ban on all mergers and acquisitions by any corporation with more than $100 million in annual revenue.
The Open Markets Institute calls on Congress, the Trump administration, and federal and state law enforcement agencies to use their various powers to impose an immediate ban on all mergers and acquisitions by any corporation with more than $100 million in annual revenue, and by any financial institution or equity fund with more than $100 million in capitalization. The ban should remain in place for the duration of the present crisis.
The immediate reason for this ban is the present inability of the Antitrust Division of the Department of Justice (DOJ), the Federal Trade Commission (FTC), and other competition law enforcement agencies to effectively evaluate mergers, given the semi-closure of government due to the present crisis. According to Politico, the DOJ has already asked for more time to review existing proposals for mergers, even in advance of any potential surge in deals.
More fundamentally, the ban is needed to prevent a wholesale concentration of additional power by corporations that already dominate or largely dominate their industries, especially in ways that may significantly worsen the crisis that now threatens America’s health, social, and economic systems. The history of the Panic of 2008 and the subsequent Great Recession instructs us that such a massive, uncontrolled consolidation will result in the unnecessary firing of millions of employees, the unnecessary bankrupting of innumerable independent businesses, a dramatic slowing of innovation in vital industries such as pharmaceuticals, and a further concentration of power and control dangerous both to our democracy and our open commercial systems. [1]
Excerpt from posting at https://openmarketsinstitute.org/
As Congress continues to debate its response to the COVID-19 outbreak, Open Markets Institute released the statement below, calling for an immediate ban on all mergers and acquisitions by any corporation with more than $100 million in annual revenue.
The Open Markets Institute calls on Congress, the Trump administration, and federal and state law enforcement agencies to use their various powers to impose an immediate ban on all mergers and acquisitions by any corporation with more than $100 million in annual revenue, and by any financial institution or equity fund with more than $100 million in capitalization. The ban should remain in place for the duration of the present crisis.
The immediate reason for this ban is the present inability of the Antitrust Division of the Department of Justice (DOJ), the Federal Trade Commission (FTC), and other competition law enforcement agencies to effectively evaluate mergers, given the semi-closure of government due to the present crisis. According to Politico, the DOJ has already asked for more time to review existing proposals for mergers, even in advance of any potential surge in deals.
More fundamentally, the ban is needed to prevent a wholesale concentration of additional power by corporations that already dominate or largely dominate their industries, especially in ways that may significantly worsen the crisis that now threatens America’s health, social, and economic systems. The history of the Panic of 2008 and the subsequent Great Recession instructs us that such a massive, uncontrolled consolidation will result in the unnecessary firing of millions of employees, the unnecessary bankrupting of innumerable independent businesses, a dramatic slowing of innovation in vital industries such as pharmaceuticals, and a further concentration of power and control dangerous both to our democracy and our open commercial systems. [1]
Excerpt from posting at https://openmarketsinstitute.org/
From Open Markets: Coronavirus and the Fragility of Industrial and Financial Systems - An Open Markets Primer
In recent weeks, people around the world have watched in horror as key supply systems have failed or come close to failing, in ways that have greatly exacerbated both the health and economic threats posed by the coronavirus pandemic. Problems include a severe shortage of masks and respirators to protect front-line medical workers and the public at large, and a likely shortage of ventilators for people suffering from the disease. Problems also include the cascading shutdown of many large-scale production systems, such as automobile manufacturing, because of the shutdown of highly concentrated parts production systems, with tens of thousands of manufacturing workers joining the ranks of the unemployed.
These are issues that the Open Markets team knows a lot about. Indeed, our work grew out of a book that Barry Lynn published in 2005, called End of the Line: The Rise and Coming Fall of the Global Corporation (Doubleday), which in turn was based on a 2002 article in Harper’s Magazine, “Unmade in America.” In those works, Lynn provided pioneering research and reporting on how how concentration of capacity made vital production systems subject to cascading and potentially catastrophic collapse because of any of a variety of shocks, including pandemics.
In the years since, the Open Markets team has covered this topic in greater depth than any other group of researchers and thinkers, whether in academia, government, or the private sector, with the partial exception of Yossi Sheffi at MIT and the University of Minnesota epidemiologist Michael Osterholm. This includes pioneering analyses of the effects on international supply systems of the 2008 Lehman Brothers crash, of the 2011 Tohoku disaster in Japan, and of Superstorm Sandy in 2012. It also includes extensive discussions of the complicated and highly dangerous political dimensions of such extreme industrial interdependence.
At Open Markets, we understand that Americans are still in the very early stages of making sense of the threats posed by the coronavirus pandemic and the resulting crash of stock markets around the world. But for those who seek to understand why these events have proven to be so disruptive, and what we can do to prevent a repetition in the future, we have created a new primer on our website, here, which includes links to a number of pioneering articles and papers on these issues.
And read a recent interview of Lynn by David Dayen of The American Prospect here. https://prospect.org/economy/the-man-who-knew/
In recent weeks, people around the world have watched in horror as key supply systems have failed or come close to failing, in ways that have greatly exacerbated both the health and economic threats posed by the coronavirus pandemic. Problems include a severe shortage of masks and respirators to protect front-line medical workers and the public at large, and a likely shortage of ventilators for people suffering from the disease. Problems also include the cascading shutdown of many large-scale production systems, such as automobile manufacturing, because of the shutdown of highly concentrated parts production systems, with tens of thousands of manufacturing workers joining the ranks of the unemployed.
These are issues that the Open Markets team knows a lot about. Indeed, our work grew out of a book that Barry Lynn published in 2005, called End of the Line: The Rise and Coming Fall of the Global Corporation (Doubleday), which in turn was based on a 2002 article in Harper’s Magazine, “Unmade in America.” In those works, Lynn provided pioneering research and reporting on how how concentration of capacity made vital production systems subject to cascading and potentially catastrophic collapse because of any of a variety of shocks, including pandemics.
In the years since, the Open Markets team has covered this topic in greater depth than any other group of researchers and thinkers, whether in academia, government, or the private sector, with the partial exception of Yossi Sheffi at MIT and the University of Minnesota epidemiologist Michael Osterholm. This includes pioneering analyses of the effects on international supply systems of the 2008 Lehman Brothers crash, of the 2011 Tohoku disaster in Japan, and of Superstorm Sandy in 2012. It also includes extensive discussions of the complicated and highly dangerous political dimensions of such extreme industrial interdependence.
At Open Markets, we understand that Americans are still in the very early stages of making sense of the threats posed by the coronavirus pandemic and the resulting crash of stock markets around the world. But for those who seek to understand why these events have proven to be so disruptive, and what we can do to prevent a repetition in the future, we have created a new primer on our website, here, which includes links to a number of pioneering articles and papers on these issues.
And read a recent interview of Lynn by David Dayen of The American Prospect here. https://prospect.org/economy/the-man-who-knew/
March 21, 2020 01:42 PM
Providers warn Senate GOP coronavirus funding proposal will not be enough
Hospitals, physicians, nurses and community health centers are warning that funding proposed by Senate Republicans for a third coronavirus response package will not be enough to prepare for an onslaught of COVID-19 patients and critical shortage of medical supplies.
Senate Republicans included a Medicare payment bump and a hospital add-on payment in their first draft of an economic stimulus package. But comments by Senate leaders indicate direct funding for hospitals, money to purchase more medical supplies and increase testing capacity could be left for later.
It's unclear when Congress would get to major legislation after it passes this third response package. Providers are saying they can't wait.
"This is very urgent and I don't know that we can wait for a fourth package," American Hospital Association President and CEO Rick Pollack told reporters Saturday. "We need to make sure that it is in this package."
The AHA, American Medical Association and American Nurses Association asked Congress for a $100 billion to provide an emergency fund for hospitals' COVID-19 costs, childcare for frontline healthcare workers and money to bolster surge capacity.
AHA also suggested ensuring that hospitals were eligible for low-cost loans, as many small and mid-sized hospitals have faced cashflow concerns. Most hospitals would not be eligible for the small business loan assistance outlined in the Senate GOP proposal, the AHA said.
Washington Gov. Jay Inslee (D) on Thursday called for a halt to elective surgeries and dental services. That followed a March 18 guidance from the CMS recommending that hospitals postpone all non-essential medical and surgical procedures until the pandemic subsides. J. Scott Graham, the CEO of Three Rivers and North Valley rural hospitals in Brewster, Wash.,, said he fears having to close if he can't make payroll or pay suppliers for protective equipment.
"In terms of planning, we know we need to ramp up, but we are concerned that we will not be able to be around by the time the surge hits," Graham said Saturday.
AHA Executive Vice President Tom Nickels said he expects the Senate GOP's opening offer will be "massaged and improved," and believes more funding for providers will be added during negotiations.
The Federation of American Hospitals on Friday hiked its funding request for hospital aid to $225 billion, including $90 billion for bi-weekly supplemental payments to help with hospitals' cashflow, and $100 billion loan backstop program.
"The truth is the care will not be there without Congress ensuring hospitals are properly funded. It's never been more important that policymakers take bold action now to assure care and save lives," said FAH President and CEO Chip Kahn.
Community health centers were set to receive $1.3 billion in new payments under Senate Republicans' initial offer, but the National Association of Community Health Centers ripped the funding as inadequate. Ongoing federal funding for the centers will expire May 22, and the group has agitated for $3 billion in emergency funds and a longer longer-term funding guarantee.
"The COVID-19 crisis demands health centers stay on the front lines, but their mandatory funding runs out on May 22 and not a single dollar of emergency funds has reached them yet," NACHC President and CEO Tom Van Coverden.
Physician groups, including the AMA, American College of Physicians, American Academy of Family Physicians, American College of Surgeons, and Medical Group Management Association, called for tax relief, no-interest loans, and additional steps to accelerate telehealth services.
The draft text would allow the HHS secretary to develop and implement a new payment rule for federally qualified health centers and rural health clinics that provide telehealth services to eligible patients. Payment rates would be based on payment that currently applies to comparable telehealth services under the physician fee schedule, according to the text.
It's a continuation of recent efforts from lawmakers and the Trump administration to reduce telehealth restrictions in the wake of the COVID-19 outbreak.
AMA also asked Congress for additional medical supplies and workforce support to expand paid family, medical and sick leave. Healthcare workers could be exempted from paid leave provided in Congress' second aid package.
AMA President Dr. Patrice Harris, who participated in a virtual meeting with President Donald Trump and Vice President Mike Pence on March 18, said she told them that alleviating personal protective equipment shortages and testing shortages are the group's top priorities. A March 19 MGMA survey found that 89% of physician practices surveyed reported experiencing shortages of critical PPE.
"The funding that Congress has already approved must be increased, and all possible actions must be taken to increase the capacity to manufacture, acquire, and distribute PPE," AMA Executive Vice President and CEO Dr. James Madara wrote in a letter to congressional leaders.
https://www.modernhealthcare.com/politics-policy/providers-warn-senate-gop-coronavirus-funding-proposal-will-not-be-enough
COVID-19 poses long-term impact to not-for-profit hospitals
A myriad of factors will buffet hospitals as they scramble to deal with COVID-19, Moody's Investors Service analysts project as they adjust not-for-profits' outlook from stable to negative.
Read More https://www.modernhealthcare.com/providers/covid-19-poses-long-term-impact-not-profit-hospitals?utm_source=modern-healthcare-covid-19-coverage&utm_medium=email&utm_campaign=20200320&utm_content=article1-readmore
A myriad of factors will buffet hospitals as they scramble to deal with COVID-19, Moody's Investors Service analysts project as they adjust not-for-profits' outlook from stable to negative.
Read More https://www.modernhealthcare.com/providers/covid-19-poses-long-term-impact-not-profit-hospitals?utm_source=modern-healthcare-covid-19-coverage&utm_medium=email&utm_campaign=20200320&utm_content=article1-readmore
Hospital beds in short supply
from https://thehill.com/homenews/state-watch/487869-maryland-ny-move-to-boost-hospital-capacity-ahead-of-coronavirus-wave
In separate announcements, Maryland Gov. Larry Hogan (R) and New York Gov. Andrew Cuomo (D) said they had ordered state health officials to reopen closed hospitals and to convert other facilities in order to accommodate patients.
In an interview, Hogan said the projected number of cases he has seen in scenarios developed by the state's health experts show the need to bolster capacity. Maryland has about 8,000 hospital beds, and Hogan's order will boost capacity by an additional 6,000.
"We don't have exact numbers, but it goes from really bad to terrible," Hogan said of the projections he has seen. "None of [the projections] look good. What we're really all working on, we're all trying to bend the curve down. If we can stretch this out and slow it down by social distancing and all these unprecedented actions we're taking, then it looks a lot different."
In New York, Cuomo's order will add an additional 9,000 beds to the 53,000 beds already available around the state.
"I need, first and foremost, to find available facilities that can be converted. I'm asking local governments, especially in the most dense area, to immediately identify a number of beds in facilities that are available," Cuomo said Monday. "This is very expensive and I don't want to pay money for acquisition of property and real estate. But we need the communities that are most effected to begin finding available beds."
Cuomo said New York City would need an estimated 5,000 additional beds by itself. Nassau and Suffolk counties likely need another 1,000 beds each, and Westchester County — at the heart of the state's outbreak in New Rochelle — needs 2,000 new beds.
Since the beginning of the outbreak in late January, health officials and elected officials have worried about overwhelming the existing health care system. The nation has about 924,000 hospital beds, according to the American Hospital Association, including just under 100,000 that can serve people in intensive care.
Without action, Cuomo said at a Monday news conference, "you overwhelm the hospitals. You have people on gurneys in hallways. That is what is going to happen now if we do nothing. That is what is going to happen now if we do nothing. And that, my friends, will be a tragedy."
from https://thehill.com/homenews/state-watch/487869-maryland-ny-move-to-boost-hospital-capacity-ahead-of-coronavirus-wave
In separate announcements, Maryland Gov. Larry Hogan (R) and New York Gov. Andrew Cuomo (D) said they had ordered state health officials to reopen closed hospitals and to convert other facilities in order to accommodate patients.
In an interview, Hogan said the projected number of cases he has seen in scenarios developed by the state's health experts show the need to bolster capacity. Maryland has about 8,000 hospital beds, and Hogan's order will boost capacity by an additional 6,000.
"We don't have exact numbers, but it goes from really bad to terrible," Hogan said of the projections he has seen. "None of [the projections] look good. What we're really all working on, we're all trying to bend the curve down. If we can stretch this out and slow it down by social distancing and all these unprecedented actions we're taking, then it looks a lot different."
In New York, Cuomo's order will add an additional 9,000 beds to the 53,000 beds already available around the state.
"I need, first and foremost, to find available facilities that can be converted. I'm asking local governments, especially in the most dense area, to immediately identify a number of beds in facilities that are available," Cuomo said Monday. "This is very expensive and I don't want to pay money for acquisition of property and real estate. But we need the communities that are most effected to begin finding available beds."
Cuomo said New York City would need an estimated 5,000 additional beds by itself. Nassau and Suffolk counties likely need another 1,000 beds each, and Westchester County — at the heart of the state's outbreak in New Rochelle — needs 2,000 new beds.
Since the beginning of the outbreak in late January, health officials and elected officials have worried about overwhelming the existing health care system. The nation has about 924,000 hospital beds, according to the American Hospital Association, including just under 100,000 that can serve people in intensive care.
Without action, Cuomo said at a Monday news conference, "you overwhelm the hospitals. You have people on gurneys in hallways. That is what is going to happen now if we do nothing. That is what is going to happen now if we do nothing. And that, my friends, will be a tragedy."
A pre-Covid-19 warning from 2018:
Safety-Net Health Systems At Risk: Who Bears The Burden Of Uncompensated Care?
May 10, 2018 10.1377/hblog20180503.138516 Safety-net health systems play an essential role in the US health care system by providing care to low-income and vulnerable populations, including the uninsured and individuals with Medicaid. Even after coverage expansions under the Affordable Care Act (ACA), about 27 million Americans remain uninsured and millions more underinsured, for whom safety-net health systems play a major role in providing inpatient, emergency, and ambulatory services.
The financial viability of safety-net health systems may be increasingly in peril given the recent elimination of the individual mandate penalty—which the Congressional Budget Office estimates may lead to 13 million additional uninsured people by 2027—and cuts to disproportionate-share hospital (DSH) payments. DSH payments offset the cost of caring for low-income patients. Although the Centers for Medicare and Medicaid Services (CMS) did recently signal a year-on-year increase of $1.6 billion in Medicare DSH payments, anticipating an increase in uninsured patients, overall DSH funding is set to fall by $44 billion in the coming decade. Many of the most affected hospitals are in weak financial condition. The recently passed budget bill delays cuts until 2020 but increases the annual reduction thereafter: $4 billion in 2020, followed by $8 billion per year through 2025.
Growing financial challenges faced by safety-net health systems should concern not just system administrators and low-income patients but also neighboring hospitals and state governments, for which safety-net systems help defray the costs of uncompensated and undercompensated care. When uninsured patients receive care, health systems often bear the cost: In 2016, hospitals alone provided $38.3 billion in uncompensated care, and by some estimates, government funding offsets only 65 percent of such costs. While policy debates focus on overall insurance coverage, less attention is paid to heterogeneous effects of coverage changes when considering the varying payer mix across providers. Hospital margins on average have risen to 30-year highs, driven by commercial prices, but hospitals with fewer commercially insured patients face a different reality.
Effects Of Safety-Net Hospital Closures
Recent years have brought a wave of hospital closures, especially in rural and suburban areas where hospitals are struggling financially. What happens when a safety-net health system closes? Evidence suggests that the total demand for uncompensated care in a health care market does not change and that there is nearly complete spillover of uncompensated care to remaining hospitals. Each newly uninsured individual is associated with a $900 increase in uncompensated care annually, and some recent Medicaid disenrollment has likely resulted in even larger per capita uncompensated cost growth. While it is widely believed that commercial insurers subsidize care for Medicaid and uninsured patients, research suggests that hospitals cannot fully shift increased costs onto commercially insured patients. Medicaid expansion appears to have helped hospitals; reductions in uncompensated care through state Medicaid expansions were associated with substantially lower likelihood of hospital closures, especially in rural areas and in those with large numbers of uninsured patients.
Historical examples of safety-net hospital closures or privatization are telling. In the 1990s, Milwaukee, Wisconsin, Boston, Massachusetts, and Tampa, Florida, all experienced restructuring or mergers of their major safety-net hospitals amid fiscal pressures. In each case, local uncompensated care cost growth exceeded public funding. The situation in Milwaukee was particularly stark: The percentage of countywide uncompensated care delivered at the safety-net hospital post-merger declined from 45 percent to 19 percent, while the share delivered at the next two largest area hospitals increased from 19 percent to 40 percent.
Safety-net health systems thus provide financial protection not only to the patients they serve but also to neighboring hospitals that would otherwise be required to take on an increased uncompensated care burden. Federal law requires that hospitals treat patients regardless of their ability to pay—even though the federal government does not ensure that all individuals have insurance. Programs such as Emergency Medicaid provide some payment for lifesaving treatments and limited recovery services, but longer-term care—including negative-margin services such as psychiatric care—is also disproportionately delivered by safety-net health systems.
Steps To Protect The Safety Net
What can be done to protect the viability of safety-net health systems and the health of the populations they serve?
First, Congress should revisit whether DSH cuts should not just be delayed but also curtailed. The ACA’s DSH payment reductions were designed to be offset by insurance expansions. However, the decline in uncompensated care has not been proportionate with proposed DSH reductions in part because many states have chosen not to expand Medicaid. States that expanded Medicaid have experienced a greater decline in uncompensated care costs compared to non-expansion states, but they too struggle to provide care to low-income populations. These challenges may be exacerbated by elimination of the individual mandate penalty and the expected rise in the uninsured population. Neighboring providers should also organize against DSH cuts because they will likely shoulder a larger burden of uncompensated care if safety-net health systems are no longer able to do so.
Second, states should consider more targeted distribution of DSH funding. Currently, states have wide latitude in how they can distribute DSH funding. They are required to make payments to “deemed-DSH” hospitals—those with a Medicaid utilization rate one standard deviation above the mean or with a low-income inpatient utilization rate higher than 25 percent—but may distribute funding much more broadly if they choose. While only a few hospitals in some states receive DSH funding, other states disburse this funding to nearly all hospitals, and those with the greatest need may receive a small fraction of the funding. The consequences of DSH cuts may be most salient in states such as Texas and Georgia that did not expand Medicaid and that distribute DSH funding across a relatively large group of hospitals.
Third, nonprofit hospitals’ community benefit obligations could be leveraged to decrease the burden on safety net health systems. While all nonprofit health systems enjoy tax-exempt status if they engage in activities that benefit their communities, there is broad variation in what constitutes “community benefit” and how much health systems spend on such activities. As one suggestion, nonprofit hospitals that are not safety-net systems could be expected to assume longer-term responsibility for patients they care for in emergency and inpatient settings as part of their community benefit requirements. Currently, many uninsured patients stabilized at non-safety-net hospitals are referred to safety-net hospitals for follow-up care. Requiring non-safety-net health systems to make accommodations for ongoing management after acute episodes would help ease this burden on safety-net health systems.
Finally, for the sake of their constituent providers and low-income populations, state Medicaid agencies and CMS should re-evaluate Section 1115 waivers that impose work requirements and other strategies to restrict Medicaid eligibility. Kentucky’s recently approved waiver, for example, may result in a 15 percent decrease in Medicaid enrollment by its fifth year, which may negatively affect the financial stability of safety-net providers and have underappreciated spillover effects on non-safety-net providers. Kentucky’s waiver—similar to those proposed in Indiana, Arkansas, and several other states—also terminates retroactive Medicaid coverage, which allows providers to receive payment for care delivered to patients who were eligible for, but not enrolled in, Medicaid at the time of care. Retroactive coverage helps increase financial stability for safety-net providers and, importantly, protects other providers from bearing these costs.
Policies that threaten the viability of safety-net health systems may harm vulnerable populations and have underappreciated spillover effects for neighboring hospitals and state governments. When patients are uninsured or underinsured, safety-net health systems often bear the cost—and their closure or downscaling may have downstream consequences for the payer mix and financial stability of other area providers, and the health of both privately and publicly insured patients.
https://www.healthaffairs.org/do/10.1377/hblog20180503.138516/full/
- The Coming Bailout Is a Moral Failure
- Congress has leverage to rebalance the economy, but so far, it isn’t using it.
Franklin Foer
From The Atlantic
This is the story of an unnatural disaster.
In the meantime, the lobbyists are set to plunder. This morning I heard Nicholas Calio on the radio. During George W. Bush’s administration, he was the White House’s smooth operator on the Hill, a kibitzer and arm-twister who advanced its legislative agenda. Now he works for the airline industry, and he was pleading on its behalf. Of course, there’s every reason to keep vital industries afloat. A vibrant economy needs a transit system. But the injustice of spending $50 billion on the airlines should drive the public to apoplexy. The companies that used their fat profits to buy back stocks as they constricted the distance between seats, that only managed to innovate by charging new fees, will be the ones the government chooses to salvage.
The coming bailout is a familiar moral catastrophe. During the financial crisis, the government saved the banking industry’s bacon, while asking exceedingly little of the culprits. When the government spends billions of dollars to save industries, it has enormous leverage. This is the moment when Congress can shape an economy. It should demand, for instance, that the airlines keep their workers in their jobs; it should place hard caps on executive pay and prohibit stock buybacks; it can demand that airlines take steps to reduce their Sasquatch-size carbon footprint. (And, damnit, Congress should require that their seats actually recline!) If the industry wants the public’s money, it will have to deal with it.
In a crisis, the government can’t save everything. Just as hospitals must ration ventilators, the government must make choices. These choices are excruciating because every industry that perishes will take down workers and investors with it. But just because choices are excruciating doesn’t mean that they shouldn’t be made. Rather, if the public doesn’t make moral demands of its politicians, then the politicians will protect the well connected; they will siphon money to cronies: The Trump administration is considering billions in aid to casino magnates like Steve Wynn and Sheldon Adelson. While casinos are important employers, they also preside over a gambling industry that addicts and abuses citizens—why should they get pulled from the fire while independent booksellers and local florists wither and die?
Mitt Romney had the best idea for how to stimulate the economy and get through the next few months: The government should pay $1,000 to every household in America. (Or even more than that, as Michael Bennet, Cory Booker, and Sherrod Brown have proposed.) That’s a stimulus with immediate impact. Some vital parts of the American economy, like the airlines, might need help bridging the gap until demand returns, since their failure carries systemic risks. But the reconstruction of the American economy isn’t something that should happen in a back room, as the rest of the country fears for its life. Lobbyists shouldn’t be rewarded at a moment like this one, when protesting their greed in the streets would carry mortal risk. Even before this crisis, American capitalism desperately needed rebalancing. What emerges from this economic collapse should be shaped by political choices and moral thinking, not by crony capitalists seeking to jam a sick nation.
Franklin Foer is a staff writer for The Atlantic. He is the author of World Without Mind and How Soccer Explains the World: An Unlikely Theory of Globalization.
COMPETITION POLICY IN TROUBLED TIMES
By John Fingleton[59]
CEO, Office of Fair Trading
20 January 2009
SUMMARY
While recent years have witnessed growing public confidence in the ability of competitive markets to deliver positive outcomes, the credit crunch and the recession have shocked markets, policy-makers and the general public and risk damaging that confidence.
Recession is potentially hostile towards competition policy: the less visible and less immediate costs of restricting competition can look more attractive to policy-makers faced with a range of unpalatable options. Policies to relax competition in the US in the 1930s and in Japan in the 1990s arguably added to the duration of recession in both countries. Learning from history and the robust economic evidence linking competition to productivity growth, we need to ensure that today's solutions do not inadvertently become tomorrow's problems.
It is essential that the causes of the credit crunch are properly diagnosed so that the policy response is targeted "micro-surgery" rather than drastic amputation. If we mistake regulatory failure for market failure, we risk undermining the source of much of the wealth creation that came from the opening of markets to competition.
Intervention to rescue the financial system from systemic collapse in exceptional circumstances can be crucial, but should not be seen as a reason to suspend the importance of competition in other sectors, either via State aid, anti-competitive mergers or cartels.
Subsidies are rarely ideal: they are costly for the taxpayer, can prop-up less efficient firms, create dependency, and ultimately damage competitive incentives. Restrictions on competition are worse. In addition to higher consumer prices and the inefficiency, they are less transparent and can result in permanent changes to market structure. Ad hoc changes to the competition rules can also remove consistency and predictability for business, with additional harm to efficiency. Naturally, incumbent business will rarely object to subsidies or restrictions on competition.
The OFT—and other competition agencies—need to be able to respond quickly to changing priorities, and display a degree of pragmatism in recognising times when other policy interests may over-ride competition policy. At the same time, our role as advocates of competition, within government, with fair-dealing businesses and beyond has never been more important; supporting governments in tackling powerful private vested interests whose solutions would cost us dearly well into the future.
The full article is at https://publications.parliament.uk/pa/cm200809/cmselect/cmdereg/329/329we12.htm
Frequent Uber and Lyft Foe Says Misclassification of Drivers Is Worsening the Global Health Crisis
In a pair of emergency motions for preliminary injunction, lawyers from Lichten & Liss Riordan who represent classes of Uber and Lyft employees are asking the U.S. District Court for the Northern District of California to find that they should be classified as employees, so that they can take advantage of state-mandated sick leave.
https://www.law.com/therecorder/2020/03/20/frequent-uber-and-lyft-foe-says-miclassification-of-drivers-is-worsening-the-global-health-crisis/?kw=Frequent%20Uber%20and%20Lyft%20Foe%20Says%20Misclassification%20of%20Drivers%20is%20Worsening%20the%20Global%20Health%20Crisis&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20200320&utm_term=ca
In a pair of emergency motions for preliminary injunction, lawyers from Lichten & Liss Riordan who represent classes of Uber and Lyft employees are asking the U.S. District Court for the Northern District of California to find that they should be classified as employees, so that they can take advantage of state-mandated sick leave.
https://www.law.com/therecorder/2020/03/20/frequent-uber-and-lyft-foe-says-miclassification-of-drivers-is-worsening-the-global-health-crisis/?kw=Frequent%20Uber%20and%20Lyft%20Foe%20Says%20Misclassification%20of%20Drivers%20is%20Worsening%20the%20Global%20Health%20Crisis&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20200320&utm_term=ca
Steve Pearlstein on the novel virus and political cynicism
Steve Pearlstein, the contrarian Washington Post commenter on economic and political issues, is willing to say the obvious, and say it plainly: politicians’ response to the corona virus tends to the cynical. Cynical in this context means self-serving as opposed to serving the public.
What may be open to debate is the detail of particular political actions that may be viewed as cynical. Pearlstein finds it to be cynical that both Republican and Democrat Congressional leaders are ready to send out large checks, including large numbers of recipients who do not need it, such as people who have not been laid off their jobs, and pensioners. He writes: “It is yet another sign of our political dysfunction that a government that dithered for weeks before getting serious about fighting a global pandemic now can’t take a few days for thoughtful debate about how to spend a trillion dollars to deal with the economic fallout.”
Government dithering has led to other cynical political behavior that Pearlstein does not talk about, but that is discussed elsewhere in the same newspaper. The hard news is that “Health officials in New York, California and other hard-hit parts of the country are restricting coronavirus testing to health care workers and the severely ill, saying the battle to contain the virus is lost and the country is moving into a new phase of the pandemic response. As cases spike sharply in those places, they are bracing for an onslaught and directing scarce resources where they are needed most to save people’s lives. Instead of encouraging broad testing of the public, they’re focused on conserving masks, ventilators and intensive care beds — and on getting still-limited tests to health-care workers and the most vulnerable. The shift is further evidence that rising levels of infection and illness have begun to overwhelm the health care system.”
Politicians put a political spin on the bad news that the U.S. health care system has been allowed to wither over recent decades, to the extent that it is easily overwhelmed, and that dithering has caused failure in the effort to contain the novel corona virus. Our political leaders do not present themselves as Monty Python characters leading a frantic retreat in a battle they failed to engage at an early point when disease containment was possible. No, they say they are courageous and far sighted war-time leaders, boldly directing business closures and stay-at-home rules. Necessary perhaps; heroic no.
The words of Vice-president Pence: “Thank you, Mr. President. It is . . .an inspiration to every American, because thanks to your leadership from early on, not only are we bringing a whole-of-government approach to confronting the coronavirus, we’re bringing and all-of-America approach. Mr. President, from early on, you took decisive action.”
Posting by Don Allen Resnikoff, who takes full responsibility for the content
Steve Pearlstein, the contrarian Washington Post commenter on economic and political issues, is willing to say the obvious, and say it plainly: politicians’ response to the corona virus tends to the cynical. Cynical in this context means self-serving as opposed to serving the public.
What may be open to debate is the detail of particular political actions that may be viewed as cynical. Pearlstein finds it to be cynical that both Republican and Democrat Congressional leaders are ready to send out large checks, including large numbers of recipients who do not need it, such as people who have not been laid off their jobs, and pensioners. He writes: “It is yet another sign of our political dysfunction that a government that dithered for weeks before getting serious about fighting a global pandemic now can’t take a few days for thoughtful debate about how to spend a trillion dollars to deal with the economic fallout.”
Government dithering has led to other cynical political behavior that Pearlstein does not talk about, but that is discussed elsewhere in the same newspaper. The hard news is that “Health officials in New York, California and other hard-hit parts of the country are restricting coronavirus testing to health care workers and the severely ill, saying the battle to contain the virus is lost and the country is moving into a new phase of the pandemic response. As cases spike sharply in those places, they are bracing for an onslaught and directing scarce resources where they are needed most to save people’s lives. Instead of encouraging broad testing of the public, they’re focused on conserving masks, ventilators and intensive care beds — and on getting still-limited tests to health-care workers and the most vulnerable. The shift is further evidence that rising levels of infection and illness have begun to overwhelm the health care system.”
Politicians put a political spin on the bad news that the U.S. health care system has been allowed to wither over recent decades, to the extent that it is easily overwhelmed, and that dithering has caused failure in the effort to contain the novel corona virus. Our political leaders do not present themselves as Monty Python characters leading a frantic retreat in a battle they failed to engage at an early point when disease containment was possible. No, they say they are courageous and far sighted war-time leaders, boldly directing business closures and stay-at-home rules. Necessary perhaps; heroic no.
The words of Vice-president Pence: “Thank you, Mr. President. It is . . .an inspiration to every American, because thanks to your leadership from early on, not only are we bringing a whole-of-government approach to confronting the coronavirus, we’re bringing and all-of-America approach. Mr. President, from early on, you took decisive action.”
Posting by Don Allen Resnikoff, who takes full responsibility for the content
On the destruction of trees when developers tear down small suburban houses and replace them with mini-mansions
Posting by Don Allen Resnikoff
Recently a neighbor in my suburban Bethesda, MD neighborhood wrote to say she had a heavy heart because of the recent removal of two gorgeous, healthy, “specimen” trees in our neighborhood. The removal was incidental to teardown of a small residence to make room for a larger one that would occupy more of the building lot. “The one at the very corner edge of the property was a splendid sweet gum tree whose gorgeous fall foliage and fruit in spring feed birds and wildlife and whose comforting shade is critical in the midst of a climate crisis. The other, a tulip poplar with a diameter of more than 7 feet, is one of the most important pollinating trees and is the sequoia of the east coast.”
It is easy to share my neighbor’s regrets, but it seems very likely that the property developer is in compliance with the relevant law. Local law provides for “mitigation” when a residential developer destroys trees, but the penalties for non-compliance are minimal. That makes it a law that expresses a conservationist’s goals, but is ineffective. The law requires reform if it is to accomplish its stated goal of mitigation.
Specifically, Montgomery County, Maryland has a Tree Canopy Law that requires mitigation for the area disturbed during development activity. Mitigation for felled trees is required in the form of shade trees planted on the same property where the disturbance occurred. Alternatively, applicants for sediment control permits can choose, for any reason, to pay a fee into the Tree Canopy Conservation Account. The Tree Canopy Law sets the fee at $250.
It is hard to imagine that a $250 fine for cutting down a tree is much of a deterrent on projects involving a property worth a million dollars or more. Advocating for the mitigation law to be more rigorous and costly to the developer might be something for Bethesda suburbanites to consider.
See https://www.montgomerycountymd.gov/DEP/Resources/Files/ReportsandPublications/Trees%20%26%20Air/Trees/County%20Reports/2017-Annual-Report.pdf
Posting by Don Allen Resnikoff
Recently a neighbor in my suburban Bethesda, MD neighborhood wrote to say she had a heavy heart because of the recent removal of two gorgeous, healthy, “specimen” trees in our neighborhood. The removal was incidental to teardown of a small residence to make room for a larger one that would occupy more of the building lot. “The one at the very corner edge of the property was a splendid sweet gum tree whose gorgeous fall foliage and fruit in spring feed birds and wildlife and whose comforting shade is critical in the midst of a climate crisis. The other, a tulip poplar with a diameter of more than 7 feet, is one of the most important pollinating trees and is the sequoia of the east coast.”
It is easy to share my neighbor’s regrets, but it seems very likely that the property developer is in compliance with the relevant law. Local law provides for “mitigation” when a residential developer destroys trees, but the penalties for non-compliance are minimal. That makes it a law that expresses a conservationist’s goals, but is ineffective. The law requires reform if it is to accomplish its stated goal of mitigation.
Specifically, Montgomery County, Maryland has a Tree Canopy Law that requires mitigation for the area disturbed during development activity. Mitigation for felled trees is required in the form of shade trees planted on the same property where the disturbance occurred. Alternatively, applicants for sediment control permits can choose, for any reason, to pay a fee into the Tree Canopy Conservation Account. The Tree Canopy Law sets the fee at $250.
It is hard to imagine that a $250 fine for cutting down a tree is much of a deterrent on projects involving a property worth a million dollars or more. Advocating for the mitigation law to be more rigorous and costly to the developer might be something for Bethesda suburbanites to consider.
See https://www.montgomerycountymd.gov/DEP/Resources/Files/ReportsandPublications/Trees%20%26%20Air/Trees/County%20Reports/2017-Annual-Report.pdf
Trump Administration Is Relaxing Oversight of Nursing Homes
A proposal would loosen federal rules meant to control infections, just as the coronavirus rips through nursing homes.
https://www.nytimes.com/2020/03/14/business/trump-administration-nursing-homes.html
A proposal would loosen federal rules meant to control infections, just as the coronavirus rips through nursing homes.
https://www.nytimes.com/2020/03/14/business/trump-administration-nursing-homes.html
Former U.S. Treasury Secretary Larry Summers warns of US economic stagnation threat
Former U.S. Treasury Secretary Larry Summers said the world’s largest economy now confronts a stagnation like Japan’s as government bond yields plunge to ultra-low levels.
“We’re essentially at the Japanese place,” Summers said in a Bloomberg Television interview Thursday. “That’s a place that’s very hard to get out of, as the Japanese experience suggests, and increasingly the European experience suggests.”
The spreading pandemic demands more aggressive action to avoid repeating the mistake of not injecting sufficient fiscal stimulus into the economy after Lehman Brothers failed.
https://www.bing.com/videos/search?q=larry+sommers+&view=detail&mid=52EE5C9825A76EF0BC5952EE5C9825A76EF0BC59&FORM=VIRE
Former U.S. Treasury Secretary Larry Summers said the world’s largest economy now confronts a stagnation like Japan’s as government bond yields plunge to ultra-low levels.
“We’re essentially at the Japanese place,” Summers said in a Bloomberg Television interview Thursday. “That’s a place that’s very hard to get out of, as the Japanese experience suggests, and increasingly the European experience suggests.”
The spreading pandemic demands more aggressive action to avoid repeating the mistake of not injecting sufficient fiscal stimulus into the economy after Lehman Brothers failed.
https://www.bing.com/videos/search?q=larry+sommers+&view=detail&mid=52EE5C9825A76EF0BC5952EE5C9825A76EF0BC59&FORM=VIRE
Klobuchar Presents New Antitrust Bill
Sen. Amy Klobuchar, ranking member of the Judiciary Committee, has introduced a bill that could give antitrust authorities more tools to pursue potentially anticompetitive edge giants, including by fining them up to 15% of revenues for violations.
The bill focuses on various forms of exclusionary behavior, and seeks to modify permissive standards often applied by courts. The text of the bill is at https://www.klobuchar.senate.gov/public/_cache/files/f/8/f81f969e-1c81-4d10-90aa-178a6cb4f159/3A75B8609ADDE8D20C57297DA5B687D7.aecpa.pdf
US Lawmakers Concern About College Textbook Merger
Two US lawmakers expressed serious concern on Tuesday about the effect of a planned merger of college textbook publishers Cengage Learning Holdings and McGraw-Hill Education, saying the deal would create a new industry leader with nearly half the market.
According to Reuters, [https://www.reuters.com/article/us-mcgrawhill-m-a-cengage/college-textbook-merger-raises-serious-concern-among-u-s-lawmakers-idUSKBN20X31R] Representatives David Cicilline, chair of the House Judiciary Committee’s antitrust panel, and Jan Schakowsky, chair of an Energy and Commerce consumer protection panel, urged the Justice Department to scrutinize the merger to ensure it is legal under antitrust law.
In a letter, Cicilline and Schakowsky noted how few college textbook makers were left in the market and that prices had risen 184% since 1998.
“It has also been reported that the merging companies are working to convert the market to all-digital course materials through an ‘inclusive access’ model, in which students are automatically billed for subscription access to textbooks,” the lawmakers wrote.
They said an all-digital model would prevent students from shopping around to get cheaper prices, and “destroy” the used book market.
California AG Drops Challenge To T-Mobile Sprint Merger
T-Mobile’s proposed $26 billion acquisition of Sprint inched closer Wednesday, when California’s Attorney General Xavier Becerra dropped his opposition to the deal in exchange for concessions from the telecoms.
From the AG's press release:
California Attorney General Xavier Becerra today announced a settlement with T-Mobile, resolving the state's challenge to the company's merger with Sprint. The settlement includes terms to protect low-income subscribers, extend access to underserved communities, protect current T-Mobile and Sprint employees, and create jobs in California. T-Mobile will reimburse California for the costs and fees of its investigation and its litigation challenging the merger. This settlement ends the legal challenge brought by Attorney General Becerra leading a multistate coalition, which alleged that the merger was unlawful and would lead to reduced competition and increased prices for consumers.
Our coalition vigorously challenged the T-Mobile/Sprint telecom merger over concerns that it would thwart competition and leave consumers with higher prices,said Attorney General Becerra. We took our case to court to ensure that, no matter its outcome, we'd protect innovation and fair prices. Though the district court approved the merger, its decision also made clear to companies that local markets matter in assessing the competitive impact of a merger and that no one should underestimate the role of state enforcers. Most importantly, today's settlement locks in new jobs and protections for vulnerable consumers, and it extends access to telecom services for our most underserved and rural communities."
As required by the settlement, the merged company is required to:
Sen. Amy Klobuchar, ranking member of the Judiciary Committee, has introduced a bill that could give antitrust authorities more tools to pursue potentially anticompetitive edge giants, including by fining them up to 15% of revenues for violations.
The bill focuses on various forms of exclusionary behavior, and seeks to modify permissive standards often applied by courts. The text of the bill is at https://www.klobuchar.senate.gov/public/_cache/files/f/8/f81f969e-1c81-4d10-90aa-178a6cb4f159/3A75B8609ADDE8D20C57297DA5B687D7.aecpa.pdf
US Lawmakers Concern About College Textbook Merger
Two US lawmakers expressed serious concern on Tuesday about the effect of a planned merger of college textbook publishers Cengage Learning Holdings and McGraw-Hill Education, saying the deal would create a new industry leader with nearly half the market.
According to Reuters, [https://www.reuters.com/article/us-mcgrawhill-m-a-cengage/college-textbook-merger-raises-serious-concern-among-u-s-lawmakers-idUSKBN20X31R] Representatives David Cicilline, chair of the House Judiciary Committee’s antitrust panel, and Jan Schakowsky, chair of an Energy and Commerce consumer protection panel, urged the Justice Department to scrutinize the merger to ensure it is legal under antitrust law.
In a letter, Cicilline and Schakowsky noted how few college textbook makers were left in the market and that prices had risen 184% since 1998.
“It has also been reported that the merging companies are working to convert the market to all-digital course materials through an ‘inclusive access’ model, in which students are automatically billed for subscription access to textbooks,” the lawmakers wrote.
They said an all-digital model would prevent students from shopping around to get cheaper prices, and “destroy” the used book market.
California AG Drops Challenge To T-Mobile Sprint Merger
T-Mobile’s proposed $26 billion acquisition of Sprint inched closer Wednesday, when California’s Attorney General Xavier Becerra dropped his opposition to the deal in exchange for concessions from the telecoms.
From the AG's press release:
California Attorney General Xavier Becerra today announced a settlement with T-Mobile, resolving the state's challenge to the company's merger with Sprint. The settlement includes terms to protect low-income subscribers, extend access to underserved communities, protect current T-Mobile and Sprint employees, and create jobs in California. T-Mobile will reimburse California for the costs and fees of its investigation and its litigation challenging the merger. This settlement ends the legal challenge brought by Attorney General Becerra leading a multistate coalition, which alleged that the merger was unlawful and would lead to reduced competition and increased prices for consumers.
Our coalition vigorously challenged the T-Mobile/Sprint telecom merger over concerns that it would thwart competition and leave consumers with higher prices,said Attorney General Becerra. We took our case to court to ensure that, no matter its outcome, we'd protect innovation and fair prices. Though the district court approved the merger, its decision also made clear to companies that local markets matter in assessing the competitive impact of a merger and that no one should underestimate the role of state enforcers. Most importantly, today's settlement locks in new jobs and protections for vulnerable consumers, and it extends access to telecom services for our most underserved and rural communities."
As required by the settlement, the merged company is required to:
- Make low-cost plans available in California for at least 5 years, including a plan offering 2 GB of high-speed data at $15 per month and 5 GB of high speed data at $25 per month;
- Extend for at least an additional two years the rate plans offered by T-Mobile pursuant to its earlier FCC commitment, ensuring Californians can retain T-Mobile plans held in February 2019 for a total of five years;
- Offer 100 GB of no-cost broadband internet service per year for five years and a free mobile Wi-Fi hotspot device to 10 million qualifying low-income households not currently connected to broadband nationwide, as well as the option to purchase select Wi-Fi enabled tablets at the company’s cost for each qualifying household;
- Protect California jobs by offering all California T-Mobile and Sprint retail employees in good standing an offer of substantially similar employment. T-Mobile also commits that three years after the closing date, the total number of new T-Mobile employees will be equal to or greater than the total number of employees of the unmerged Sprint and T-Mobile companies;
- Create approximately 1,000 new jobs in California with a customer service center in Kingsburg;
- Increase diversity by increasing the participation rate in its employee Diversity and Inclusion program to 60 percent participation within three years; and
- Reimburse California and other coalition states up to $15 million for the costs of the investigation and litigation challenging the merger.
The US Soccer Federation faced a barrage of public criticism after its lawyers wrote in a legal brief that players on the U.S. Women's National Team "do not perform equal work requiring equal skill, effort, and responsibility under similar working conditions."
Here is what the lawyers wrote (see https://www.courtlistener.com/recap/gov.uscourts.cacd.739234/gov.uscourts.cacd.739234.186.0.pdf):
C. WNT and MNT Players Do Not Perform Equal Work Requiring Equal Skill, Effort, and Responsibility Under Similar Working Conditions.
Even Plaintiffs acknowledge that the level of “skill” required for each job in question (WNT player and MNT player) must be “measured by the experience, ability, education, and training required to perform a job.” (Dkt. 170 at 15 (emphasis added), citing 29 C.F.R. § 1620.15.) The overall soccer-playing ability required to compete at the senior men’s national team level is materially influenced by the level of certain physical attributes, such as speed and strength, required for the job. (Morgan Dep. 212-13; Ellis Dep. 291-92.) As Plaintiff Carli Lloyd’s testimony admits, the WNT could not compete successfully against senior men’s national teams because competing against 16- or 17year-old boys “is about as old as [the WNT] can go.” (Lloyd Dep. 103-04, 106-07; Lloyd Dep. Ex. 15.) Plaintiffs ask the Court to conclude that the ability required of an WNT player is equal to the ability required of an MNT player, as a relative matter, by ignoring the materially higher level of speed and strength required to perform the job of an MNT player. The EPA does not allow this. Sims-Fingers v. City of Indianapolis, 493 F.3d 768, 771 (7th Cir. 2007) (EPA does not ensure equal pay for jobs requiring “proportional” skill level). Nor is it a “sexist stereotype” to recognize the different levels of speed and strength required for the two jobs, as Plaintiffs’ counsel contend. On the contrary, it is indisputable “science,” as even Plaintiff Lloyd described it in her testimony. (Lloyd Dep. 103-05.) See also Doraine Lambert Coleman, Sex in Sport,80LAW AND CONTEMPORARY PROBLEMS 63-126(2017)(available at: https://scholarship.law.duke.edu/lcp/vol80/iss4/5) (describing the scientific basis for “the average 10-12% performance gap between elite male and elite female athletes,” which includes differences between males and females in “skeletal structure, muscle composition, heart and lung capacity including VO2 max, red blood cell count, body fat, and the absolute ability to process carbohydrates,” and noting, by way of example, that “no matter how great the great Katie Ledecky gets . . . she will never beat Michael Phelps or his endurance counterparts in the pool”).
Here is what the lawyers wrote (see https://www.courtlistener.com/recap/gov.uscourts.cacd.739234/gov.uscourts.cacd.739234.186.0.pdf):
C. WNT and MNT Players Do Not Perform Equal Work Requiring Equal Skill, Effort, and Responsibility Under Similar Working Conditions.
Even Plaintiffs acknowledge that the level of “skill” required for each job in question (WNT player and MNT player) must be “measured by the experience, ability, education, and training required to perform a job.” (Dkt. 170 at 15 (emphasis added), citing 29 C.F.R. § 1620.15.) The overall soccer-playing ability required to compete at the senior men’s national team level is materially influenced by the level of certain physical attributes, such as speed and strength, required for the job. (Morgan Dep. 212-13; Ellis Dep. 291-92.) As Plaintiff Carli Lloyd’s testimony admits, the WNT could not compete successfully against senior men’s national teams because competing against 16- or 17year-old boys “is about as old as [the WNT] can go.” (Lloyd Dep. 103-04, 106-07; Lloyd Dep. Ex. 15.) Plaintiffs ask the Court to conclude that the ability required of an WNT player is equal to the ability required of an MNT player, as a relative matter, by ignoring the materially higher level of speed and strength required to perform the job of an MNT player. The EPA does not allow this. Sims-Fingers v. City of Indianapolis, 493 F.3d 768, 771 (7th Cir. 2007) (EPA does not ensure equal pay for jobs requiring “proportional” skill level). Nor is it a “sexist stereotype” to recognize the different levels of speed and strength required for the two jobs, as Plaintiffs’ counsel contend. On the contrary, it is indisputable “science,” as even Plaintiff Lloyd described it in her testimony. (Lloyd Dep. 103-05.) See also Doraine Lambert Coleman, Sex in Sport,80LAW AND CONTEMPORARY PROBLEMS 63-126(2017)(available at: https://scholarship.law.duke.edu/lcp/vol80/iss4/5) (describing the scientific basis for “the average 10-12% performance gap between elite male and elite female athletes,” which includes differences between males and females in “skeletal structure, muscle composition, heart and lung capacity including VO2 max, red blood cell count, body fat, and the absolute ability to process carbohydrates,” and noting, by way of example, that “no matter how great the great Katie Ledecky gets . . . she will never beat Michael Phelps or his endurance counterparts in the pool”).
Press Release: AG Racine Announces Victory for the District in LED Digital Sign Lawsuit
Press Release On Mar 10, 2020 Last updated Mar 10, 2020
Court Ruling Resolves 2016 Lawsuit Against Lumen Eight Media Group LLC for Illegal Outdoor LED Digital Signs
WASHINGTON, D.C. – Attorney General Karl A. Racine today issued the following statement announcing that Superior Court Judge Florence Pan has ruled in the District’s favor, granting its motion for summary judgment in a lawsuit against digital sign company Lumen Eight Media Group LLC (formerly known as Digi Media Communications LLC). The District sued the company in August 2016 because it flagrantly violated District law by erecting large Light-Emitting Diode (LED) digital signs without first obtaining the required licenses. Doubling down on its illegal action, the company ignored multiple stop-work orders directing it to cease and desist any further installation of digital LED signs without obtaining the required permits. AG Racine’s statement is below.
“Lumen Eight’s entire business model was based on its flagrant disregard of District law. This ruling is a major victory for the District. Judge Pan’s opinion affirmed that the company intentionally did not seek approval from District government for its signs, mischaracterized the nature of its work to avoid scrutiny, and then ignored DCRA’s stop-work orders altogether.”
“Most companies that conduct business in the District of Columbia follow the law, and achieve business success on the merits of the goods and services that they sell. Lawbreakers, including companies that regularly contribute money to D.C. politicians, are on notice that the Office of the Attorney General will investigate and prosecute, without fear nor favor, companies and individuals who violate the law. I am thankful to the Committee of 100 on the Federal City and industry competitors for bringing this matter to our attention and to our talented OAG attorneys that brought home this win for District residents.”
Image of Lumen Eight’s digital Light-Emitting Diode (LED) signs: https://oag.dc.gov/sites/default/files/2020-03/Sign-1-image.pdf
A copy of the judge’s ruling is at: https://oag.dc.gov/sites/default/files/2020-03/Lumen-Eight-Digi-Media-Opinion.pdf
Press Release On Mar 10, 2020 Last updated Mar 10, 2020
Court Ruling Resolves 2016 Lawsuit Against Lumen Eight Media Group LLC for Illegal Outdoor LED Digital Signs
WASHINGTON, D.C. – Attorney General Karl A. Racine today issued the following statement announcing that Superior Court Judge Florence Pan has ruled in the District’s favor, granting its motion for summary judgment in a lawsuit against digital sign company Lumen Eight Media Group LLC (formerly known as Digi Media Communications LLC). The District sued the company in August 2016 because it flagrantly violated District law by erecting large Light-Emitting Diode (LED) digital signs without first obtaining the required licenses. Doubling down on its illegal action, the company ignored multiple stop-work orders directing it to cease and desist any further installation of digital LED signs without obtaining the required permits. AG Racine’s statement is below.
“Lumen Eight’s entire business model was based on its flagrant disregard of District law. This ruling is a major victory for the District. Judge Pan’s opinion affirmed that the company intentionally did not seek approval from District government for its signs, mischaracterized the nature of its work to avoid scrutiny, and then ignored DCRA’s stop-work orders altogether.”
“Most companies that conduct business in the District of Columbia follow the law, and achieve business success on the merits of the goods and services that they sell. Lawbreakers, including companies that regularly contribute money to D.C. politicians, are on notice that the Office of the Attorney General will investigate and prosecute, without fear nor favor, companies and individuals who violate the law. I am thankful to the Committee of 100 on the Federal City and industry competitors for bringing this matter to our attention and to our talented OAG attorneys that brought home this win for District residents.”
Image of Lumen Eight’s digital Light-Emitting Diode (LED) signs: https://oag.dc.gov/sites/default/files/2020-03/Sign-1-image.pdf
A copy of the judge’s ruling is at: https://oag.dc.gov/sites/default/files/2020-03/Lumen-Eight-Digi-Media-Opinion.pdf
Antitrust Standing after Apple v. Pepper: Application to the Sports Betting Data Market
Ryan M. Rodenberg, FSU describes Antitrust Standing after Apple v. Pepper: Application to the Sports Betting Data Market.
ABSTRACT: In Apple v. Pepper, the U.S. Supreme Court expressed a largely permissive view about whether certain potential plaintiffs have legal standing to pursue antitrust lawsuits in federal court. The Apple v. Pepper ruling provided important clarity about the scope of the so-called indirect purchaser rule set forth forty-plus years earlier in Illinois Brick. This paper first summarizes the key takeaways from the Apple v. Pepper decision released on May 13, 2019, positioning the ruling vis-à-vis other standing-related cases that have sometimes closed the courtroom doors to plaintiffs alleging anticompetitive conduct under the Sherman Act and Clayton Act. This paper then applies the lessons from Apple v. Pepper to sports betting data, an emerging tech-focused market. This paper concludes by outlining how—and why—this market will likely be subject to antitrust scrutiny soon.
https://lawprofessors.typepad.com/antitrustprof_blog/2020/03/antitrust-standing-after-apple-v-pepper-application-to-the-sports-betting-data-market.html?
Ryan M. Rodenberg, FSU describes Antitrust Standing after Apple v. Pepper: Application to the Sports Betting Data Market.
ABSTRACT: In Apple v. Pepper, the U.S. Supreme Court expressed a largely permissive view about whether certain potential plaintiffs have legal standing to pursue antitrust lawsuits in federal court. The Apple v. Pepper ruling provided important clarity about the scope of the so-called indirect purchaser rule set forth forty-plus years earlier in Illinois Brick. This paper first summarizes the key takeaways from the Apple v. Pepper decision released on May 13, 2019, positioning the ruling vis-à-vis other standing-related cases that have sometimes closed the courtroom doors to plaintiffs alleging anticompetitive conduct under the Sherman Act and Clayton Act. This paper then applies the lessons from Apple v. Pepper to sports betting data, an emerging tech-focused market. This paper concludes by outlining how—and why—this market will likely be subject to antitrust scrutiny soon.
https://lawprofessors.typepad.com/antitrustprof_blog/2020/03/antitrust-standing-after-apple-v-pepper-application-to-the-sports-betting-data-market.html?
Yelp Tells Senators Why Google Needs To Be Broken Up
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March 10, 2020
Yelp, one of Google’s most enduring critics, got to share its grievances with senators on the Antitrust Subcommittee on Tuesday, reported CNBC. https://www.cnbc.com/2020/03/10/yelp-testifies-against-google-in-antitrust-senate-hearing.html
At a hearing dedicated to “Examining Self-Preferencing by Digital Platforms,” Luther Lowe, Yelp’s senior vice president of public policy, laid out the company’s long-standing claims against Google. Yelp, which delivers local search results for consumers looking for restaurants or other businesses, has persistently complained that Google favors its own products and services in search, often at the expense to consumers in terms of quality.
Now, Yelp isn’t the only one paying attention. Regulators and lawmakers across the political spectrum are raising concerns about the power Big Tech companies wield over competitors who also rely on their services. Tuesday’s hearing was another demonstration that Yelp’s complaints are finally resonating in the U.S. as lawmakers introduce new policies and ramp up oversight.
Google didn’t always try to stifle competition, according to Lowe, who acknowledged co-founder Larry Page’s 2004 claimthat, “We want to get you out of Google and to the right place as fast as possible.” But Lowe said Google’s approach later shifted from this model around 2007 when it added answer boxes or “OneBoxes” that surfaced what Google seemed to determine would be the most relevant result for a user.
Because Google displayed the answer boxes at the top of search results, Lowe argued in his prepared testimony, “it had conditioned consumers to expect for the best or most relevant results from around the web — even though they no longer were. By doing so, Google physically demoted non-Google results even if they contained information with higher quality scores than the information Google.” Some of those non-Google results included Yelp, which Lowe said gets about 80% of its web traffic from Google.
“We build Google Search for our users,” a Google spokesperson said in an emailed statement. “People want quick access to information and we’re constantly improving Search to help people easily find what they’re looking for, whether it’s information on a web page, directions on a map, products for sale or a translation.”
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March 10, 2020
Yelp, one of Google’s most enduring critics, got to share its grievances with senators on the Antitrust Subcommittee on Tuesday, reported CNBC. https://www.cnbc.com/2020/03/10/yelp-testifies-against-google-in-antitrust-senate-hearing.html
At a hearing dedicated to “Examining Self-Preferencing by Digital Platforms,” Luther Lowe, Yelp’s senior vice president of public policy, laid out the company’s long-standing claims against Google. Yelp, which delivers local search results for consumers looking for restaurants or other businesses, has persistently complained that Google favors its own products and services in search, often at the expense to consumers in terms of quality.
Now, Yelp isn’t the only one paying attention. Regulators and lawmakers across the political spectrum are raising concerns about the power Big Tech companies wield over competitors who also rely on their services. Tuesday’s hearing was another demonstration that Yelp’s complaints are finally resonating in the U.S. as lawmakers introduce new policies and ramp up oversight.
Google didn’t always try to stifle competition, according to Lowe, who acknowledged co-founder Larry Page’s 2004 claimthat, “We want to get you out of Google and to the right place as fast as possible.” But Lowe said Google’s approach later shifted from this model around 2007 when it added answer boxes or “OneBoxes” that surfaced what Google seemed to determine would be the most relevant result for a user.
Because Google displayed the answer boxes at the top of search results, Lowe argued in his prepared testimony, “it had conditioned consumers to expect for the best or most relevant results from around the web — even though they no longer were. By doing so, Google physically demoted non-Google results even if they contained information with higher quality scores than the information Google.” Some of those non-Google results included Yelp, which Lowe said gets about 80% of its web traffic from Google.
“We build Google Search for our users,” a Google spokesperson said in an emailed statement. “People want quick access to information and we’re constantly improving Search to help people easily find what they’re looking for, whether it’s information on a web page, directions on a map, products for sale or a translation.”
Federal rules centralize medical data online
The goal is to help doctors get a fuller picture of patient health and enabling patients to make more informed treatment choices.
One of the rules requires vendors of electronic health records to adopt software — known as application programming interfaces, or A.P.I.s. — to enable providers to send medical record data directly to patient-authorized apps. Another rule similarly requires Medicare and Medicaid plans to adopt A.P.I.s. That software will enable people to use apps to get their insurance claims and benefit information.
Health providers and health record vendors will have two years to comply with the A.P.I. requirements. Electronic health record vendors that impede such data-sharing — a practice called “information blocking” — could be fined up to $1 million per violation. Doctors accused of information blocking could be subject to federal investigation.
More at https://www.nytimes.com/2020/03/09/business/medical-app-patients-data-privacy.html
The goal is to help doctors get a fuller picture of patient health and enabling patients to make more informed treatment choices.
One of the rules requires vendors of electronic health records to adopt software — known as application programming interfaces, or A.P.I.s. — to enable providers to send medical record data directly to patient-authorized apps. Another rule similarly requires Medicare and Medicaid plans to adopt A.P.I.s. That software will enable people to use apps to get their insurance claims and benefit information.
Health providers and health record vendors will have two years to comply with the A.P.I. requirements. Electronic health record vendors that impede such data-sharing — a practice called “information blocking” — could be fined up to $1 million per violation. Doctors accused of information blocking could be subject to federal investigation.
More at https://www.nytimes.com/2020/03/09/business/medical-app-patients-data-privacy.html
Bloomberg News opinion:
Why testing matters
Uncertainty. It's as bad for public health as it is for markets.
Since the U.S.'s top health official announced plans in mid-February for wider testing of the coronavirus, there's been report after report of diagnostic kits malfunctioning or being shipped out late, and of symptomatic patients being told they don't fit the criteria to be tested.
That failure has hamstrung the U.S. government's response and doesn't make for good medicine. It's also stoking a deeper sense of unease that's eroding confidence in everything from the stock market to authorities' ability to handle a wider outbreak.
Checking large numbers of people would let the Trump administration back up its claims that it has the outbreak in hand. If more cases are found, health workers can take action to stop the virus from spreading. If only a few are, officials could reassure the public that the risk is less than feared.
Instead, we're left in the dark. At a Monday evening White House press conference, Health and Human Services Secretary Alex Azar couldn't say how many tests had been performed in the U.S. The Trump administration has repeatedly said the risk of Americans remains low, and that may be true.
But without good surveillance, it's still an educated guess.
That uncertainty is as detrimental to an effective public-health response as it is to rational behavior. If you worry about whether your family is safe, you panic-buy toilet paper and canned food, stop booking airline tickets, and quit going out. If you don't know whether an outbreak will cripple the economy, you get out of stocks.
Give people good information—even if it's a little scary—and they'll make better decisions. If you don't, they'll make worse, irrational ones. That goes for investors, government leaders, and the person next to you at the grocery store buying a shelf's worth of bleach. -- Drew Armstrong
Why testing matters
Uncertainty. It's as bad for public health as it is for markets.
Since the U.S.'s top health official announced plans in mid-February for wider testing of the coronavirus, there's been report after report of diagnostic kits malfunctioning or being shipped out late, and of symptomatic patients being told they don't fit the criteria to be tested.
That failure has hamstrung the U.S. government's response and doesn't make for good medicine. It's also stoking a deeper sense of unease that's eroding confidence in everything from the stock market to authorities' ability to handle a wider outbreak.
Checking large numbers of people would let the Trump administration back up its claims that it has the outbreak in hand. If more cases are found, health workers can take action to stop the virus from spreading. If only a few are, officials could reassure the public that the risk is less than feared.
Instead, we're left in the dark. At a Monday evening White House press conference, Health and Human Services Secretary Alex Azar couldn't say how many tests had been performed in the U.S. The Trump administration has repeatedly said the risk of Americans remains low, and that may be true.
But without good surveillance, it's still an educated guess.
That uncertainty is as detrimental to an effective public-health response as it is to rational behavior. If you worry about whether your family is safe, you panic-buy toilet paper and canned food, stop booking airline tickets, and quit going out. If you don't know whether an outbreak will cripple the economy, you get out of stocks.
Give people good information—even if it's a little scary—and they'll make better decisions. If you don't, they'll make worse, irrational ones. That goes for investors, government leaders, and the person next to you at the grocery store buying a shelf's worth of bleach. -- Drew Armstrong
“Sewer-service” in the District of Columbia’s Landlord-Tenant Court means that defendants do not appear for court because they do not know about their case
– blog entry by Don Allen Resnikoff
A few years ago, Adrian Gottshall wrote: "Years have passed since the first day that I observed ‘roll call’ in the District of Columbia Landlord and Tenant Branch, and I no longer wonder why some tenants in default fail to appear. I unequivocally know that service practices are unreliable and unfair. There are systemic due process violations occurring in the form of improper and ineffective service of process. Most troubling is that many defendants do not appear for court simply because they do not know about their case. Unreliable and unfair service practices are a national problem. They are not unique to the District of Columbia. At least three jurisdictions have recently attempted to address sewer service through litigation, resulting in multimillion dollar settlements for victims."[i]
Recently, litigation was filed alleging sewer service in the District of Columbia Landlord and Tenant Branch. The Complaint was filed in the U.S. District Court in the District of Columbia against Metropolitan Process Services, LLC and service person Stephens.[ii]
The Complaint in the D.C. litigation alleges that Defendant Stephens knowingly submitted false affidavits of service. The false affidavits asserted that he had attempted to serve and actually served process on Plaintiffs when in fact he did not.
The Complaint explains that Defendant Stephens and/or his company, Defendant Metropolitan Process Services, are the process servers of record for the vast majority of eviction cases filed in the Landlord-Tenant Branch of the District of Columbia Superior Court. “[F]or a significant percentage of the process they are retained to serve, Stephens and Metropolitan resort to “sewer service,” simply completing false affidavits to be used in L&T Court in which Defendants allege attempts at service that did not actually occur.”
The Plaintiffs’ allegations depend on looking at more than one affidavit of service in isolation: “Each of the affidavits of service submitted by Defendants, standing alone and viewed in the context of a single case, appears to be in order. However, when these affidavits of
service are reviewed together, obvious irregularities appear. For example: In most cases, Stephens did not even individually sign and swear to the affidavits. Hundreds of his affidavits, purportedly completed months apart, have the exact same signature in the exact same spot on the signature line, with the exact same notary seal, with the exact same smudge in the exact same
place on the seal, and in many cases with the exact same purported notary
signature.”
The Complaint promises statistical and other evidence of wrongdoing, such as Stephens’ filing affidavits in cases showing him to be in two distant places at the same time: “Examples abound of Stephens signing affidavits placing him in two different places at the same time. Indeed, on information and belief, Stephens submitted affidavits of service swearing to attempts at personal service on D.C. tenants at their residences at a time when he was physically present in Maryland state court for a hearing related to his arrest for drunk driving.”
The Plaintiffs in the U.S. District Court case allege that they are victims of Defendants’ sewer service, because Defendants falsified affidavits of service in connection with Plaintiffs’ eviction cases to falsely allege that Defendants had posted papers on Plaintiffs’ doors, when in fact there was no attempt at service at all.
Of course, the allegations of false affidavits and sewer service in the D.C. Landlord-Tenant Branch made in the U.S. District Court litigation are also a source of concern for the D.C. Superior Court, the D.C. Bar, and other groups interested in procedural fairness in the courts.
DAR
[i] January 2018 Solving Sewer Service: Fighting Fraud with Technology Adrian Gottshall University of the District of Columbia , https://scholarworks.uark.edu/cgi/viewcontent.cgi?article=1034&context=alr
[ii] Whitlock, et al, v. Metropolitan Process Services, LLC, et al., Case 1:20-cv-00339, assigned to Judge Leon
– blog entry by Don Allen Resnikoff
A few years ago, Adrian Gottshall wrote: "Years have passed since the first day that I observed ‘roll call’ in the District of Columbia Landlord and Tenant Branch, and I no longer wonder why some tenants in default fail to appear. I unequivocally know that service practices are unreliable and unfair. There are systemic due process violations occurring in the form of improper and ineffective service of process. Most troubling is that many defendants do not appear for court simply because they do not know about their case. Unreliable and unfair service practices are a national problem. They are not unique to the District of Columbia. At least three jurisdictions have recently attempted to address sewer service through litigation, resulting in multimillion dollar settlements for victims."[i]
Recently, litigation was filed alleging sewer service in the District of Columbia Landlord and Tenant Branch. The Complaint was filed in the U.S. District Court in the District of Columbia against Metropolitan Process Services, LLC and service person Stephens.[ii]
The Complaint in the D.C. litigation alleges that Defendant Stephens knowingly submitted false affidavits of service. The false affidavits asserted that he had attempted to serve and actually served process on Plaintiffs when in fact he did not.
The Complaint explains that Defendant Stephens and/or his company, Defendant Metropolitan Process Services, are the process servers of record for the vast majority of eviction cases filed in the Landlord-Tenant Branch of the District of Columbia Superior Court. “[F]or a significant percentage of the process they are retained to serve, Stephens and Metropolitan resort to “sewer service,” simply completing false affidavits to be used in L&T Court in which Defendants allege attempts at service that did not actually occur.”
The Plaintiffs’ allegations depend on looking at more than one affidavit of service in isolation: “Each of the affidavits of service submitted by Defendants, standing alone and viewed in the context of a single case, appears to be in order. However, when these affidavits of
service are reviewed together, obvious irregularities appear. For example: In most cases, Stephens did not even individually sign and swear to the affidavits. Hundreds of his affidavits, purportedly completed months apart, have the exact same signature in the exact same spot on the signature line, with the exact same notary seal, with the exact same smudge in the exact same
place on the seal, and in many cases with the exact same purported notary
signature.”
The Complaint promises statistical and other evidence of wrongdoing, such as Stephens’ filing affidavits in cases showing him to be in two distant places at the same time: “Examples abound of Stephens signing affidavits placing him in two different places at the same time. Indeed, on information and belief, Stephens submitted affidavits of service swearing to attempts at personal service on D.C. tenants at their residences at a time when he was physically present in Maryland state court for a hearing related to his arrest for drunk driving.”
The Plaintiffs in the U.S. District Court case allege that they are victims of Defendants’ sewer service, because Defendants falsified affidavits of service in connection with Plaintiffs’ eviction cases to falsely allege that Defendants had posted papers on Plaintiffs’ doors, when in fact there was no attempt at service at all.
Of course, the allegations of false affidavits and sewer service in the D.C. Landlord-Tenant Branch made in the U.S. District Court litigation are also a source of concern for the D.C. Superior Court, the D.C. Bar, and other groups interested in procedural fairness in the courts.
DAR
[i] January 2018 Solving Sewer Service: Fighting Fraud with Technology Adrian Gottshall University of the District of Columbia , https://scholarworks.uark.edu/cgi/viewcontent.cgi?article=1034&context=alr
[ii] Whitlock, et al, v. Metropolitan Process Services, LLC, et al., Case 1:20-cv-00339, assigned to Judge Leon
Local government needs more Coronavirus test kits
https://techcrunch.com/2020/03/08/u-s-response-to-the-covid-19-coronavirus-moves-from-containment-to-mitigation/
https://techcrunch.com/2020/03/08/u-s-response-to-the-covid-19-coronavirus-moves-from-containment-to-mitigation/
The Economist on politics and Coronavirus in China:
The virus outbreak could end swiftly, amid worldwide praise for the bravery of China’s doctors and nurses, the self-discipline of the public and the resolve of Chinese leaders, albeit after a slow start. If the crisis does not end well, scapegoats will be found, and underlings punished. That alone would not have to shake Mr Xi’s authority, which can always be shored up with repression, still greater ideological discipline and nationalist propaganda. But a botched response to the virus would lay bare tensions inherent in the party’s hybrid claims to legitimacy.
Mr Xi’s China is two things at once. It is a secretive, techno-authoritarian one-party state, ruled by grey men in unaccountable councils and secretive committees. It also claims to be a nation-sized family headed by a patriarch of unique wisdom and virtue, in a secular, 21st-century version of the mandate of Heaven. If forced to choose between those competing models, bet on cold, bureaucratic control to win out.
From https://www.economist.com/china/2020/01/30/xi-jinping-wants-to-be-both-feared-and-loved-by-chinas-people?cid1=cust/ednew/n/bl/n/2020/02/29n/owned/n/n/nwl/n/n/NA/415278/n
Posting by Don Resnikoff
The virus outbreak could end swiftly, amid worldwide praise for the bravery of China’s doctors and nurses, the self-discipline of the public and the resolve of Chinese leaders, albeit after a slow start. If the crisis does not end well, scapegoats will be found, and underlings punished. That alone would not have to shake Mr Xi’s authority, which can always be shored up with repression, still greater ideological discipline and nationalist propaganda. But a botched response to the virus would lay bare tensions inherent in the party’s hybrid claims to legitimacy.
Mr Xi’s China is two things at once. It is a secretive, techno-authoritarian one-party state, ruled by grey men in unaccountable councils and secretive committees. It also claims to be a nation-sized family headed by a patriarch of unique wisdom and virtue, in a secular, 21st-century version of the mandate of Heaven. If forced to choose between those competing models, bet on cold, bureaucratic control to win out.
From https://www.economist.com/china/2020/01/30/xi-jinping-wants-to-be-both-feared-and-loved-by-chinas-people?cid1=cust/ednew/n/bl/n/2020/02/29n/owned/n/n/nwl/n/n/NA/415278/n
Posting by Don Resnikoff
Are China’s Coronavirus Figures Reliable? China reports that new virus cases are declining, but the data may be tied to party politics.
BY JAMES PALMER
| FEBRUARY 19, 2020, 3:18 PM
In China, the death toll from the coronavirus has now topped 2,000, with over 70,000 cases confirmed. But if you follow Chinese state media, the tone is increasingly optimistic: Victory in the people’s war against the virus, led by President Xi Jinping, is coming! The official figures seem to bear this out: New infections outside of Hubei province, the virus epicenter, have dropped for more than 10 days straight, and the number of new cases inside Hubei has slowed to under 2,000 per day.
* * *
Party politics. One suspicious element is how consistent the drop in new virus cases has been. While there was a jump in numbers last Thursday, it was the result of changes in testing standards in Hubei—moving nearly 15,000 cases from “suspected” to “confirmed.” The announcement came as Hubei’s top officials were removed from their jobs—and Xi’s close ally Ying Yong, the former mayor of Shanghai, installed as the province’s party boss. As often happens, it seems the new boss wanted to blame the bad news on the old one.
* * *
Downward trend. The straight decline in new cases of the virus could be good news, or it could be statistical manipulation. Outside of Hubei, diagnostic test kits are in short supply, and other provinces haven’t switched to using the symptomatic diagnosis now accepted in Hubei. The kits are only being used to test people who came from Hubei and not for cases of transmission, so it’s unsurprising the numbers are dropping. Chinese doctors report that dozens of other hospital patients are being quarantined and treated but not officially diagnosed.
https://foreignpolicy.com/2020/02/19/china-coronavirus-figures-reliable-communist-party-politics-xi-jinping-quarantine-hubei/
Posting by Don Resnikoff
BY JAMES PALMER
| FEBRUARY 19, 2020, 3:18 PM
In China, the death toll from the coronavirus has now topped 2,000, with over 70,000 cases confirmed. But if you follow Chinese state media, the tone is increasingly optimistic: Victory in the people’s war against the virus, led by President Xi Jinping, is coming! The official figures seem to bear this out: New infections outside of Hubei province, the virus epicenter, have dropped for more than 10 days straight, and the number of new cases inside Hubei has slowed to under 2,000 per day.
* * *
Party politics. One suspicious element is how consistent the drop in new virus cases has been. While there was a jump in numbers last Thursday, it was the result of changes in testing standards in Hubei—moving nearly 15,000 cases from “suspected” to “confirmed.” The announcement came as Hubei’s top officials were removed from their jobs—and Xi’s close ally Ying Yong, the former mayor of Shanghai, installed as the province’s party boss. As often happens, it seems the new boss wanted to blame the bad news on the old one.
* * *
Downward trend. The straight decline in new cases of the virus could be good news, or it could be statistical manipulation. Outside of Hubei, diagnostic test kits are in short supply, and other provinces haven’t switched to using the symptomatic diagnosis now accepted in Hubei. The kits are only being used to test people who came from Hubei and not for cases of transmission, so it’s unsurprising the numbers are dropping. Chinese doctors report that dozens of other hospital patients are being quarantined and treated but not officially diagnosed.
https://foreignpolicy.com/2020/02/19/china-coronavirus-figures-reliable-communist-party-politics-xi-jinping-quarantine-hubei/
Posting by Don Resnikoff
Ride-Hailing Isn’t Really GreenThe Union of Concerned Scientists estimates that the environmental impact of Uber and Lyft rides is 69% worse than the transportation modes they replace.
Uber and Lyft have consumed a vast amount of attention since they arrived a decade ago. But in many ways, we’re just beginning to understand what ride-hailing is doing. A growing cache of research by academics and policymakers points to a host of negative impacts associated with the explosive popularity of on-demand rides, including increased traffic congestion, declines in public transit ridership and upticks in traffic fatalities.
A new report by the Union of Concerned Scientists evaluates another, less-examined ramification of the ride-hailing sector: its environmental toll. Read more at Citylab
Uber and Lyft have consumed a vast amount of attention since they arrived a decade ago. But in many ways, we’re just beginning to understand what ride-hailing is doing. A growing cache of research by academics and policymakers points to a host of negative impacts associated with the explosive popularity of on-demand rides, including increased traffic congestion, declines in public transit ridership and upticks in traffic fatalities.
A new report by the Union of Concerned Scientists evaluates another, less-examined ramification of the ride-hailing sector: its environmental toll. Read more at Citylab
Researchers who have examined the genomes of two coronavirus infections in Washington State say the similarities between the cases suggest that the virus may have been spreading in the state for weeks.
* * *
State and local health officials have been hamstrung in their ability to test widely for the coronavirus. Until very recently, the C.D.C. had insisted that only its test could be used, and only on patients who met specific criteria — those who had traveled to China within 14 days of developing symptoms or had contact with a known coronavirus case.
from: https://www.nytimes.com/2020/03/01/health/coronavirus-washington-spread.html
Posting by Don Resnikoff
* * *
State and local health officials have been hamstrung in their ability to test widely for the coronavirus. Until very recently, the C.D.C. had insisted that only its test could be used, and only on patients who met specific criteria — those who had traveled to China within 14 days of developing symptoms or had contact with a known coronavirus case.
from: https://www.nytimes.com/2020/03/01/health/coronavirus-washington-spread.html
Posting by Don Resnikoff
NYT Opinion: We Don’t Really Know How Many People Have Coronavirus. In an era when we get flash-flood warnings on phones, why is data on the new coronavirus so limited?
By Elisabeth Rosenthal
Ms. Rosenthal, a journalist and physician, is a contributing opinion writer.
In recent weeks, a smattering of scientific papers and government statements have begun to sketch the outlines of the epidemic. The Chinese national health commission has reported that more than 1,700 medical workers in the country had contracted the virus as of Feb 14. (That’s alarming). The Chinese Center for Disease Control and Prevention estimates that some 80 percent of those infected have a mild illness. (That’s comforting). Earlier this week, a joint W.H.O.-China mission announced that the death rate in Wuhan was 2 to 4 percent, but only .7 percent in the rest of China — a difference that makes little scientific sense.
In recent days the W.H.O. has complained that China has not been sharing data on infections in health care workers. Earlier this month, the editors of the journal Nature called on researchers to “ensure that their work on this outbreak is shared rapidly and openly.”
Much more could be known and, in all likelihood, some scientists out there have good, if not definitive, answers. And yet, the lack of consistent, reliable and regularly updated information on the key measures of this outbreak is startling. In an era when we get flash-flood warnings on phones and weekly influenza statistics from every state, why is data on the new coronavirus so limited?
Science, politics and pride have all, in various ways, conspired to keep potentially vital, lifesaving knowledge under wraps. That is problematic at a time when more information is needed to be strategic about preparedness.
It began early in the course of the epidemic. On Dec. 30, a Chinese doctor, Li Wenliang posted about a small number of people with an unusual pneumonia on social media. Though scientists in labs were already sequencing the virus, he was “warned and reprimanded” by local officials for rumor-mongering and the “illegal activity of publishing false information online.” (Dr. Li later died of the illness.)
There is a tradition in China (and likely much of the world) for local authorities not to report bad news to their superiors. During the Great Leap Forward, local officials reported exaggerated harvest yields even as millions were starving. More recently, officials in Henan Province denied there was an epidemic of AIDS spread through unsanitary blood collection practices.
Indeed, even when Beijing urges greater attention to scientific reality, compliance is mixed. On Feb. 13, the Communist Party secretaries of Wuhan and Hubei Province lost their jobs over their botched initial handling of the crisis. But damage had been done. As the virus was taking hold, doctors were not wearing proper protective equipment. Sick people, thinking they just had a cold, didn’t seek medical attention. And travelers continued to board cruise ships spreading a new pathogen.
“Early on, management was less than optimal in Hubei and they’re paying for that now,” Dr. Ian Lipkin, a professor of epidemiology at Columbia’s Mailman School of Public Health who has been working in China and advising the Chinese government since the SARS outbreak, told me.
There were, of course, some genuine barriers to understanding what exactly was happening in Wuhan: Pneumonias are not unusual in winter, and there was no way to know that there was a novel virus. (Dr. Lipkin’s group is working on building a new test that distinguishes between different cause of viral pneumonias, with a researcher headed to China next week for testing.)
Lest Americans feel that it could never happen here, Dr. Lipkin points out that it took many months for health officials in the United States to acknowledge and recognize H.I.V. as a new virus, despite the fact that gay men were turning up at alarming rates with unusual pneumonias and skin cancers.
Scientific competition has also slowed reaction and response, experts fear — leading to the extraordinary editors’ plea in Nature. For a young researcher, a paper in Nature or the New England Journal of Medicine is gold in career currency. Scientific prestige may encourage perfecting data for peer review, but preparedness requires rapid dissemination of information.
While federal officials in the United States warn Americans to be ready for the virus, there are some important aspects of its spread about which we have little information — even though they have likely already been studied by scientists and officials, in China, in Japan and elsewhere.
Scientists in various countries are presumably gathering large amounts of data day by day and the world deserves to see more of it.
“Were there patterns around infections, places, procedures? Maybe that is being collected and readied for the medical literature. But it would be hugely important to know,” said Dr. Tom Inglesby, director of the Center for Health Security of the Johns Hopkins Bloomberg School of Public Health, which studies epidemics.
For example: Of the more than 1,700 health workers who were infected in China, did those infections occur before they knew to wear protective equipment? Were they doing procedures that might lead to exposure? Those answers would quell fears about how the virus spreads and how to protect front line workers.
Likewise, there were hundreds of people who tested positive aboard the Diamond Princess cruise ship and were transferred to the hospital. But there has been little public information released about what shape they were in. How many in the cohort were really sick, how many just had minor symptoms and how many just needed isolation? Does the pattern of infection suggest a role for transmission via plumbing on the ship?
Finally, the world’s public health researchers need much more transparency about how officials are monitoring this epidemic. What exactly is
China’s surveillance strategy among the general population? To gauge the actual death rate of Covid-19, researchers would need to know how
many people actually have it, even if they have only mild symptoms. In-country surveillance may reveal a very large pool of people with mild or no symptoms at all.
Dr. Lipkin noted that because cases noted early in an epidemic are the most severe, early mortality estimates tend to be high. As more information comes out, the death rates are likely to fall. “We’re probably six months out from having a good picture and when we do I’d guess the mortality will drop dramatically,” he said.
Compared with the situation in 2003, when it took about five months for the Chinese central government to publicly acknowledge a deadly crisis associated with SARS, the flow of information has clearly improved. But since then, travel and commerce between China and the rest of the world has increased manifold. The spread of information about emerging infectious diseases needs to keep up with that new reality.
From: https://www.nytimes.com/2020/02/28/opinion/coronavirus-death-rate.html?action=click&module=Opinion&pgtype=Homepage
Elisabeth Rosenthal worked as an emergency room physician before becoming a journalist. A former New York Times correspondent, she is the author of “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back” and editor-in-chief of Kaiser Health News. @RosenthalHealth
By Elisabeth Rosenthal
Ms. Rosenthal, a journalist and physician, is a contributing opinion writer.
- Feb. 28, 2020
In recent weeks, a smattering of scientific papers and government statements have begun to sketch the outlines of the epidemic. The Chinese national health commission has reported that more than 1,700 medical workers in the country had contracted the virus as of Feb 14. (That’s alarming). The Chinese Center for Disease Control and Prevention estimates that some 80 percent of those infected have a mild illness. (That’s comforting). Earlier this week, a joint W.H.O.-China mission announced that the death rate in Wuhan was 2 to 4 percent, but only .7 percent in the rest of China — a difference that makes little scientific sense.
In recent days the W.H.O. has complained that China has not been sharing data on infections in health care workers. Earlier this month, the editors of the journal Nature called on researchers to “ensure that their work on this outbreak is shared rapidly and openly.”
Much more could be known and, in all likelihood, some scientists out there have good, if not definitive, answers. And yet, the lack of consistent, reliable and regularly updated information on the key measures of this outbreak is startling. In an era when we get flash-flood warnings on phones and weekly influenza statistics from every state, why is data on the new coronavirus so limited?
Science, politics and pride have all, in various ways, conspired to keep potentially vital, lifesaving knowledge under wraps. That is problematic at a time when more information is needed to be strategic about preparedness.
It began early in the course of the epidemic. On Dec. 30, a Chinese doctor, Li Wenliang posted about a small number of people with an unusual pneumonia on social media. Though scientists in labs were already sequencing the virus, he was “warned and reprimanded” by local officials for rumor-mongering and the “illegal activity of publishing false information online.” (Dr. Li later died of the illness.)
There is a tradition in China (and likely much of the world) for local authorities not to report bad news to their superiors. During the Great Leap Forward, local officials reported exaggerated harvest yields even as millions were starving. More recently, officials in Henan Province denied there was an epidemic of AIDS spread through unsanitary blood collection practices.
Indeed, even when Beijing urges greater attention to scientific reality, compliance is mixed. On Feb. 13, the Communist Party secretaries of Wuhan and Hubei Province lost their jobs over their botched initial handling of the crisis. But damage had been done. As the virus was taking hold, doctors were not wearing proper protective equipment. Sick people, thinking they just had a cold, didn’t seek medical attention. And travelers continued to board cruise ships spreading a new pathogen.
“Early on, management was less than optimal in Hubei and they’re paying for that now,” Dr. Ian Lipkin, a professor of epidemiology at Columbia’s Mailman School of Public Health who has been working in China and advising the Chinese government since the SARS outbreak, told me.
There were, of course, some genuine barriers to understanding what exactly was happening in Wuhan: Pneumonias are not unusual in winter, and there was no way to know that there was a novel virus. (Dr. Lipkin’s group is working on building a new test that distinguishes between different cause of viral pneumonias, with a researcher headed to China next week for testing.)
Lest Americans feel that it could never happen here, Dr. Lipkin points out that it took many months for health officials in the United States to acknowledge and recognize H.I.V. as a new virus, despite the fact that gay men were turning up at alarming rates with unusual pneumonias and skin cancers.
Scientific competition has also slowed reaction and response, experts fear — leading to the extraordinary editors’ plea in Nature. For a young researcher, a paper in Nature or the New England Journal of Medicine is gold in career currency. Scientific prestige may encourage perfecting data for peer review, but preparedness requires rapid dissemination of information.
While federal officials in the United States warn Americans to be ready for the virus, there are some important aspects of its spread about which we have little information — even though they have likely already been studied by scientists and officials, in China, in Japan and elsewhere.
Scientists in various countries are presumably gathering large amounts of data day by day and the world deserves to see more of it.
“Were there patterns around infections, places, procedures? Maybe that is being collected and readied for the medical literature. But it would be hugely important to know,” said Dr. Tom Inglesby, director of the Center for Health Security of the Johns Hopkins Bloomberg School of Public Health, which studies epidemics.
For example: Of the more than 1,700 health workers who were infected in China, did those infections occur before they knew to wear protective equipment? Were they doing procedures that might lead to exposure? Those answers would quell fears about how the virus spreads and how to protect front line workers.
Likewise, there were hundreds of people who tested positive aboard the Diamond Princess cruise ship and were transferred to the hospital. But there has been little public information released about what shape they were in. How many in the cohort were really sick, how many just had minor symptoms and how many just needed isolation? Does the pattern of infection suggest a role for transmission via plumbing on the ship?
Finally, the world’s public health researchers need much more transparency about how officials are monitoring this epidemic. What exactly is
China’s surveillance strategy among the general population? To gauge the actual death rate of Covid-19, researchers would need to know how
many people actually have it, even if they have only mild symptoms. In-country surveillance may reveal a very large pool of people with mild or no symptoms at all.
Dr. Lipkin noted that because cases noted early in an epidemic are the most severe, early mortality estimates tend to be high. As more information comes out, the death rates are likely to fall. “We’re probably six months out from having a good picture and when we do I’d guess the mortality will drop dramatically,” he said.
Compared with the situation in 2003, when it took about five months for the Chinese central government to publicly acknowledge a deadly crisis associated with SARS, the flow of information has clearly improved. But since then, travel and commerce between China and the rest of the world has increased manifold. The spread of information about emerging infectious diseases needs to keep up with that new reality.
From: https://www.nytimes.com/2020/02/28/opinion/coronavirus-death-rate.html?action=click&module=Opinion&pgtype=Homepage
Elisabeth Rosenthal worked as an emergency room physician before becoming a journalist. A former New York Times correspondent, she is the author of “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back” and editor-in-chief of Kaiser Health News. @RosenthalHealth
NYT:New York City May Crack Down on Grubhub and Other Food Delivery Apps
The City Council will consider a package of bills aimed at limiting how much food delivery apps can charge restaurants.
Legislation to regulate food delivery apps in New York is expected to be broadly supported in the City Council. Credit...Jeenah Moon for The New York TimesBy Jeffery C. Mays and David Yaffe-Bellany
For almost a year, the City Council has warned major food delivery apps like Grubhub and Uber Eats that their business practices were hurting local restaurants in New York, and that legislation to regulate the industry might be in order.
Restaurants were being charged commissions ranging from 15 to 30 percent, and Grubhub was routinely billing restaurants for calls that did not result in orders.
Grubhub, facing scrutiny from its investors, responded by revising its phone ordering system to reduce errant charges, and ending its practice of creating competing websites for restaurants that used its service.
The changes were not enough.
The City Council will soon consider a package of bills that is believed to be the first local effort to regulate commissions, phone fees or some
other aspect of the on-demand food delivery economy.
From
The City Council will consider a package of bills aimed at limiting how much food delivery apps can charge restaurants.
Legislation to regulate food delivery apps in New York is expected to be broadly supported in the City Council. Credit...Jeenah Moon for The New York TimesBy Jeffery C. Mays and David Yaffe-Bellany
For almost a year, the City Council has warned major food delivery apps like Grubhub and Uber Eats that their business practices were hurting local restaurants in New York, and that legislation to regulate the industry might be in order.
Restaurants were being charged commissions ranging from 15 to 30 percent, and Grubhub was routinely billing restaurants for calls that did not result in orders.
Grubhub, facing scrutiny from its investors, responded by revising its phone ordering system to reduce errant charges, and ending its practice of creating competing websites for restaurants that used its service.
The changes were not enough.
The City Council will soon consider a package of bills that is believed to be the first local effort to regulate commissions, phone fees or some
other aspect of the on-demand food delivery economy.
From
U.S. consumer watchdog agrees to implement minority-lending protections after lawsuit
Katanga Johnson
WASHINGTON (Reuters) - The U.S. Consumer Financial Protection Bureau (CFPB) has agreed to enforce data-collection requirements that aim to guard against discriminatory lending practices after being sued by a Washington-based advocacy group, the group said on Wednesday.
Democracy Forward sued the agency in May 2019 alleging it had flouted laws introduced following the 2007-2009 financial crisis that require it to collect and disclose data on lending to women-owned, minority-owned and small businesses.Excerpt from
Under the settlement filed in the U.S. District Court in the Northern District of California, the CFPB agreed by September to outline a proposed rule for collecting the data and to create a panel of small-business advocates to feed in to the process.
Excerpt from https://www.reuters.com/article/us-usa-cfpb-minoritybusinesses/u-s-consumer-watchdog-agrees-to-implement-minority-lending-protections-after-lawsuit-idUSKCN20K2OF
Katanga Johnson
WASHINGTON (Reuters) - The U.S. Consumer Financial Protection Bureau (CFPB) has agreed to enforce data-collection requirements that aim to guard against discriminatory lending practices after being sued by a Washington-based advocacy group, the group said on Wednesday.
Democracy Forward sued the agency in May 2019 alleging it had flouted laws introduced following the 2007-2009 financial crisis that require it to collect and disclose data on lending to women-owned, minority-owned and small businesses.Excerpt from
Under the settlement filed in the U.S. District Court in the Northern District of California, the CFPB agreed by September to outline a proposed rule for collecting the data and to create a panel of small-business advocates to feed in to the process.
Excerpt from https://www.reuters.com/article/us-usa-cfpb-minoritybusinesses/u-s-consumer-watchdog-agrees-to-implement-minority-lending-protections-after-lawsuit-idUSKCN20K2OF
Garrett speaks on lack of US coronavirus preparation
https://www.msnbc.com/rachel-maddow/watch/u-s-unready-to-deal-with-potential-coronavirus-spread-79446085581
https://www.msnbc.com/rachel-maddow/watch/u-s-unready-to-deal-with-potential-coronavirus-spread-79446085581
From Consumer Law & Policy Blog
Libel tourism in Virginia again used to seek to identify anonymous Twitter users
Posted: 24 Feb 2020 03:03 PM PST
Late last year, I wrote about an abusive subpoena that California Congressman Devin Nunes was pursuing in Virginia state court, seeking to identify the owner of a satirical Twitter account that makes fun of Nunes, referring to his family history in dairy farming, by using the Twitter handle “@Devin Cow” and including various puns referring to cow body parts, cow noises, and cowboys. We filed an amicus brief urging the state court judge to use the Dendrite standard to decide whether to compel Twitter to identify Nunes’ online detractor, and arguing that there was no basis for overcoming the Cow’s right to parody anonymously. The motion to quash that subpoena is still pending.
Nunes’ lawyer, Steven Biss, has recently tried another route to achieve the same objective. He is representing a communications specialist based in North Carolina named Trevor Fitzgibbon, who has been engaged in a protracted dispute with a Washington, D.C. lawyer named Jesselyn Radack who is, in turn, one of several women who have accused Fitzgibbon of untoward sexual conduct. Their first round of litigation, filed in the Eastern District of Virginia even though neither side lives there, ended in a harsh settlement that included a six-figure payment by Radack to Fitzgibbon as well as a clause forbidding each to talk about the other publicly. Fitzgibbon has again sued Radack in the Eastern District of Virginia, accusing her of breaching the settlement agreement, of fraudulently inducing him to sign that agreement in the first place, and of defamation. The complaint charges Radack with conspiring with various other people to defame Fitzgibbon, but only Radack is named as a defendant. Radack has counterclaimed against Fitzgibbon, making much the same accusations of breach of contract, fraudulent inducement, and defamation.
Although Fitzgibbon and Radack are entitled to their mutual antagonism, and to slug it out in federal court if they must, it is the abuse of the subpoena power that engages our attention. Supposedly for the purpose of pursuing his claims against Radack, Biss has served yet another subpoena on Twitter, claiming the right to be provided with identifying information about the owners of some twenty-two Twitter accounts.
Most of these accounts have been used to take part in the online discussion of the Fitzgibbon/Radack charges and countercharges, but the Twitter account holders are not named as defendants in the litigation. Fitzgibbon’s papers strongly suggest that he resents the participation of these Twitter users, and that he believes that some tweets have wrongly taken Radack’s side against him. However, but the asserted purpose of the subpoena is not to bring them into the litigation as defendants but only to ascertain whether they have information that he can use to establish Radack’s liability or to increase the level of damages he can seek.
The 2theMart Standard
Given that stated purpose, his subpoena is not subject to the Dendrite standard, but rather to a somewhat older, but less used standard, first adopted in a federal court decision from Seattle called Doe v. 2theMart, that governs subpoenas seeking to identify anonymous online speakers so that they may be asked to provide evidence in cases in which they have not, themselves, been accused of wrongdoing. The question presented by this new subpoena is whether a party to an online controversy can, simply by suing one detractor whose online statements are strongest and, perhaps, most susceptible to litigation, successfully sweep into the maw of the litigation everyone else who discusses the controversy online, just by saying that they are potential witnesses who must be interrogated about how they came to form their online opinions and whether they ever have communicated with each other privately. Needless to say, if that were enough reason to compel the identification of online speakers, the result could be a significant level of deterrence against participation in online discussions. An exhibit to our filing is an affidavit from one the Twitter account holders sought by the subpoena, explaining why she is afraid of having her information revealed.
Yet another one of subpoena targets, though, is @DevinCow, who has never said anything about Fitzgibbon, at least so far as we could see from Fitzgibbon’s brief. That Twitter user’s only involvement with the controversy appears to be Radack’s having expressed appreciation for something that @DevinCow said in a tweet; Radack's having listed the lawsuit against @DevinCow as one of a large number of lawsuits filed by Steven Biss that she considers abusive; and Radack’s speculation that a conservative Silicon Valley investor may be financing all of Biss’s litigation campaign. Considering the limited basis for identifying @DevinCow as a witness in the Fitzgibbon/Radack litigation, there is a good reason to infer that Biss maybe abusing his ready access to the federal court discovery process to attempt an end run around the roadblocks he has encountered to identifying @DevinCow in the state court litigation. And the 2theMart standard, unlike Dendrite, calls for explicit consideration of whether the subpoena has been served in good faith.
We have now filed an amicus brief urging that the very fact that Fitzgibbon’s attorney has included a demand for identification of @Devin Cow who seems to have little bearing on the Fitzgibbon / Radack quarrel, but who is a defendant in another lawsuit entirely, could be reason enough to condemn the subpoena as a product of bad faith. We also explain why the trial court should adopt the 2theMart standard and explain how it should be applied in this case even apart from the highly suspicious aspect of the subpoena aimed at @DevinCow.
As with our previous amicus brief in the Nnnes litigation itself, I am grateful to Matt Kelley of Ballard Spahr for participating as Virginia co-counsel on the amicus brief.
Read NCLC's critique of the CFPB's proposed debt-collection rule
Posted: 24 Feb 2020 09:30 AM PST
The National Consumer Law Center has issued this press release, entitled "CFPB Fails to Protect Consumers From Abusive Collection of Time-Barred Debts (Again)," which, among other things, castigates the CFPB for failing to flat-out "ban collection of time-barred debt in and out of court."
Libel tourism in Virginia again used to seek to identify anonymous Twitter users
Posted: 24 Feb 2020 03:03 PM PST
Late last year, I wrote about an abusive subpoena that California Congressman Devin Nunes was pursuing in Virginia state court, seeking to identify the owner of a satirical Twitter account that makes fun of Nunes, referring to his family history in dairy farming, by using the Twitter handle “@Devin Cow” and including various puns referring to cow body parts, cow noises, and cowboys. We filed an amicus brief urging the state court judge to use the Dendrite standard to decide whether to compel Twitter to identify Nunes’ online detractor, and arguing that there was no basis for overcoming the Cow’s right to parody anonymously. The motion to quash that subpoena is still pending.
Nunes’ lawyer, Steven Biss, has recently tried another route to achieve the same objective. He is representing a communications specialist based in North Carolina named Trevor Fitzgibbon, who has been engaged in a protracted dispute with a Washington, D.C. lawyer named Jesselyn Radack who is, in turn, one of several women who have accused Fitzgibbon of untoward sexual conduct. Their first round of litigation, filed in the Eastern District of Virginia even though neither side lives there, ended in a harsh settlement that included a six-figure payment by Radack to Fitzgibbon as well as a clause forbidding each to talk about the other publicly. Fitzgibbon has again sued Radack in the Eastern District of Virginia, accusing her of breaching the settlement agreement, of fraudulently inducing him to sign that agreement in the first place, and of defamation. The complaint charges Radack with conspiring with various other people to defame Fitzgibbon, but only Radack is named as a defendant. Radack has counterclaimed against Fitzgibbon, making much the same accusations of breach of contract, fraudulent inducement, and defamation.
Although Fitzgibbon and Radack are entitled to their mutual antagonism, and to slug it out in federal court if they must, it is the abuse of the subpoena power that engages our attention. Supposedly for the purpose of pursuing his claims against Radack, Biss has served yet another subpoena on Twitter, claiming the right to be provided with identifying information about the owners of some twenty-two Twitter accounts.
Most of these accounts have been used to take part in the online discussion of the Fitzgibbon/Radack charges and countercharges, but the Twitter account holders are not named as defendants in the litigation. Fitzgibbon’s papers strongly suggest that he resents the participation of these Twitter users, and that he believes that some tweets have wrongly taken Radack’s side against him. However, but the asserted purpose of the subpoena is not to bring them into the litigation as defendants but only to ascertain whether they have information that he can use to establish Radack’s liability or to increase the level of damages he can seek.
The 2theMart Standard
Given that stated purpose, his subpoena is not subject to the Dendrite standard, but rather to a somewhat older, but less used standard, first adopted in a federal court decision from Seattle called Doe v. 2theMart, that governs subpoenas seeking to identify anonymous online speakers so that they may be asked to provide evidence in cases in which they have not, themselves, been accused of wrongdoing. The question presented by this new subpoena is whether a party to an online controversy can, simply by suing one detractor whose online statements are strongest and, perhaps, most susceptible to litigation, successfully sweep into the maw of the litigation everyone else who discusses the controversy online, just by saying that they are potential witnesses who must be interrogated about how they came to form their online opinions and whether they ever have communicated with each other privately. Needless to say, if that were enough reason to compel the identification of online speakers, the result could be a significant level of deterrence against participation in online discussions. An exhibit to our filing is an affidavit from one the Twitter account holders sought by the subpoena, explaining why she is afraid of having her information revealed.
Yet another one of subpoena targets, though, is @DevinCow, who has never said anything about Fitzgibbon, at least so far as we could see from Fitzgibbon’s brief. That Twitter user’s only involvement with the controversy appears to be Radack’s having expressed appreciation for something that @DevinCow said in a tweet; Radack's having listed the lawsuit against @DevinCow as one of a large number of lawsuits filed by Steven Biss that she considers abusive; and Radack’s speculation that a conservative Silicon Valley investor may be financing all of Biss’s litigation campaign. Considering the limited basis for identifying @DevinCow as a witness in the Fitzgibbon/Radack litigation, there is a good reason to infer that Biss maybe abusing his ready access to the federal court discovery process to attempt an end run around the roadblocks he has encountered to identifying @DevinCow in the state court litigation. And the 2theMart standard, unlike Dendrite, calls for explicit consideration of whether the subpoena has been served in good faith.
We have now filed an amicus brief urging that the very fact that Fitzgibbon’s attorney has included a demand for identification of @Devin Cow who seems to have little bearing on the Fitzgibbon / Radack quarrel, but who is a defendant in another lawsuit entirely, could be reason enough to condemn the subpoena as a product of bad faith. We also explain why the trial court should adopt the 2theMart standard and explain how it should be applied in this case even apart from the highly suspicious aspect of the subpoena aimed at @DevinCow.
As with our previous amicus brief in the Nnnes litigation itself, I am grateful to Matt Kelley of Ballard Spahr for participating as Virginia co-counsel on the amicus brief.
Read NCLC's critique of the CFPB's proposed debt-collection rule
Posted: 24 Feb 2020 09:30 AM PST
The National Consumer Law Center has issued this press release, entitled "CFPB Fails to Protect Consumers From Abusive Collection of Time-Barred Debts (Again)," which, among other things, castigates the CFPB for failing to flat-out "ban collection of time-barred debt in and out of court."
AG voids hundreds of predatory loans, orders $2.2M in restitution
By: Heather Cobun Daily Record Legal Affairs Writer February 21, 2020
A loan business was ordered recently to pay $2.2 million to consumers for making unlicensed and predatory title loans.
Cash-N-Go Inc. and its owner, Brent M. Jackson, were charged by the Maryland Office of the Attorney General last year with violations of the Maryland Consumer Protection Act. The office announced Friday that it had issued a final order against Jackson and his businesses making all Cash-N-Go loans void and unenforceable.
“The Cash-N-Go companies and their owner, Brent Jackson, preyed on Maryland consumers in financial distress,” Attorney General Brian E. Frosh said in a statement. “Jackson victimized vulnerable people for his personal financial benefit.”
The final order requires Cash-N-Go to pay more than $2.2 million in restitution to consumers and a $1.2 million penalty to the state.
The defendants were represented by Douglas Gansler, partner at Cadwalader, Wickersham & Taft LLP in Washington. Gansler, the Maryland Attorney General from 2007 to 2015, did not respond to a call seeking comment Friday.
The various Cash-N-Go businesses offered short-term, high-interest loans secured by a customer’s vehicle, purporting to be a pawn transaction, according to the release. Cash-N-Go kept the title and the vehicle would be repossessed if a customer failed to make a payment.
So-called title loans or title pawns are consumer loans under Maryland law and are subject to loan licensing requirements and interest rate caps, but Jackson’s companies were never licensed and charged more than 10 times the maximum legal rate of interest, which is 33%, according to the release.
Under the final order, Cash-N-Go is prohibited from collecting any money related to the loans or repossessing vehicles, according to the release. The companies must also return any previously repossessed vehicles to their owners. They can continue operating as a check cashing businesses and pawn brokers, according to the release.
The businesses allegedly made more than 1,700 title loans to Maryland consumers between 2007 and 2016 for amounts ranging from several hundred dollars to $6,000, according to the charges, filed in April 2019. They collected more than $2.2 million from consumers in repayment and tens of thousands of dollars from sales of repossessed vehicles.
AG Racine Announces Real Estate Company to Pay $900K for Discriminating Against Low-Income District Renters
OAG press release: Largest OAG Civil Rights Settlement Resolves Lawsuit Against Curtis Investment Group for Refusing to Rent to Housing Voucher Recipients
https://oag.dc.gov/release/ag-racine-announces-real-estate-company-pay-900k
OAG press release: Largest OAG Civil Rights Settlement Resolves Lawsuit Against Curtis Investment Group for Refusing to Rent to Housing Voucher Recipients
https://oag.dc.gov/release/ag-racine-announces-real-estate-company-pay-900k
Delrahim: T-Mobile/Sprint Ruling Will Make It Harder For States To Challenge Mergers
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February 19, 2020The court ruling in favor of the T-Mobile/Sprint merger last week sets a high bar for state challenges and prevents highly decentralized antitrust enforcement, said Makan Delrahim, assistant attorney general of the Department of Justice’s (DOJ) Antitrust Division, reported CNBC.
“Had that gone the other way, you would have had 53 antitrust agencies,” Delrahim said in an interview Wednesday on CNBC’s “Squawk Box,” adding that it would have allowed every state to have “whacks of the pinata.”
Attorneys general from 13 states and the District of Columbia sued to block the US$26 billion telecom merger after the DOJ and Federal Communications Commission cleared the deal with certain remedies. The states argued that combining the No. 3 and No. 4 US carriers would result in higher prices for consumers due to limited competition. The companies countered that the merger would enable them to effectively compete against top players AT&Tand Verizon.
In his decision, Judge Victor Marrero wrote, “The resulting stalemate leaves the Court lacking sufficiently impartial and objective ground on which to rely in basing a sound forecast of the likely competitive effects of a merger.”
The ruling could open the door for future mergers in the industry and has also raised fears of a chilling effect on state actions. New York Attorney General Letitia James, who helped lead the states’ effort, said Sunday, February 16, that she would not move forward with an appeal.
Full Content: CNBC
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February 19, 2020The court ruling in favor of the T-Mobile/Sprint merger last week sets a high bar for state challenges and prevents highly decentralized antitrust enforcement, said Makan Delrahim, assistant attorney general of the Department of Justice’s (DOJ) Antitrust Division, reported CNBC.
“Had that gone the other way, you would have had 53 antitrust agencies,” Delrahim said in an interview Wednesday on CNBC’s “Squawk Box,” adding that it would have allowed every state to have “whacks of the pinata.”
Attorneys general from 13 states and the District of Columbia sued to block the US$26 billion telecom merger after the DOJ and Federal Communications Commission cleared the deal with certain remedies. The states argued that combining the No. 3 and No. 4 US carriers would result in higher prices for consumers due to limited competition. The companies countered that the merger would enable them to effectively compete against top players AT&Tand Verizon.
In his decision, Judge Victor Marrero wrote, “The resulting stalemate leaves the Court lacking sufficiently impartial and objective ground on which to rely in basing a sound forecast of the likely competitive effects of a merger.”
The ruling could open the door for future mergers in the industry and has also raised fears of a chilling effect on state actions. New York Attorney General Letitia James, who helped lead the states’ effort, said Sunday, February 16, that she would not move forward with an appeal.
Full Content: CNBC
Opinion: be mad about your internet bill
In 2019, New York University economist Thomas Philippon did a deep dive into market concentration and monopolies in The Great Reversal: How America Gave Up on Free Markets. And one of his touchpoints for the book is the internet. Looking at the data, he found that the United States has fallen behind other developed economies in broadband penetration and that prices are significantly higher. In 2017, the average monthly cost of broadband in America was $66.17; in France, it was $38.10, in Germany, $35.71, and in South Korea, $29.90. How did this happen? In his view, a lot of it comes down to competition — or, rather, lack thereof.
To a certain extent, telecommunications companies and internet service providers are a sort of natural monopoly, meaning high infrastructure costs and other barriers to entry give early entrants a significant advantage. It costs money to install a cable system because you have to dig up streets, access buildings, etc., and once one company does that, there’s not a ton of incentive to do it all over again. On top of that, telecom companies paid what were often super-low fees -- maybe enough to create a public access studio — to wire up cities and towns in exchange for, essentially, getting a monopoly.
But that’s where the government could come in by regulating the network or forcing the company that built it to lease out parts of it to rivals. As Philippon notes, that’s what happened in France: An incumbent carrier was compelled to lease out the “last mile” of its network — basically, the last bit of cable that gets to your house or apartment building — and therefore let competitors have a chance at also appealing to customers.
IN 2017, THE AVERAGE MONTHLY COST OF BROADBAND IN AMERICA WAS $66.17; IN FRANCE, IT WAS $38.10, AND IN SOUTH KOREA, $29.90In the US, however, just a few big companies, often without overlap, control much of the telecom industry, and the result is high prices and uneven connectivity.
In 2018, Harvard law professor Susan Crawford examined the case of, what do you know, New York City in an article for Wired. The city was supposed to be “a model for big-city high-speed internet,” she explained, after then-Mayor Mike Bloomberg struck a deal with Verizon to install its FiOS fiber service in residential buildings in 2008, ending what was then Time Warner Cable’s local monopoly. In 2015, a quarter of New York City’s residential blocks still didn’t have FiOS, and one in five New Yorkers still don’t have internet access at home.
“New York City could be in a very different position today if those Bloomberg officials had called for a city-overseen fiber network. The creation of a neutral, unlit ‘last mile’ network that reaches every building in the city, like a street grid, would have allowed the city to ensure fiber access to everyone,” Crawford wrote.
Instead, multiple states (though not New York) have put up roadblocks to municipal broadband to keep cities from providing alternatives to and competing with local entities. It’s an example of lobbying at its finest, so that powerful corporations can keep competitors out and charge whatever they want.
Excerpt from article by Emily Stewart at https://www.vox.com/the-goods/2020/2/18/21126347/antitrust-monopolies-internet-telecommunications-cheerleading
DC educators target white racial bias in social studies standards as State Board launches rewrite
By Graham Vyse on Dec 3, 2019 Last updated Dec 12, 2019
Excerpt:
The DC State Board of Education is launching a three-year effort to change how public schools teach social studies, rewriting state academic standards to improve civics learning and promote more culturally relevant instruction for students in the nation’s capital.
The board is partnering with the Office of the State Superintendent of Education (OSSE) on the first update of these standards since 2006, and DC Public Schools (DCPS) hopes the process will address perceptions of white, Western bias in curricula.
“We frequently hear from teachers and students that our standards are not culturally relevant, sustaining or affirming,” Lindsey McCrea, the DCPS manager for social studies content and curriculum, told the State Board at its Nov. 20 monthly meeting. “The dominant narrative of Western European powers and the decisions of white Americans are the primary focus of the standards from kindergarten through 12th grade, while the experiences of marginalized people continue to be marginalized in DC state standards. All of our students deserve to see their own cultural, racial and social backgrounds reflected in the curriculum.”
https://thedcline.org/2019/12/03/dcps-targets-white-racial-bias-in-social-studies-education-standards-as-state-board-launches-rewrite/
By Graham Vyse on Dec 3, 2019 Last updated Dec 12, 2019
Excerpt:
The DC State Board of Education is launching a three-year effort to change how public schools teach social studies, rewriting state academic standards to improve civics learning and promote more culturally relevant instruction for students in the nation’s capital.
The board is partnering with the Office of the State Superintendent of Education (OSSE) on the first update of these standards since 2006, and DC Public Schools (DCPS) hopes the process will address perceptions of white, Western bias in curricula.
“We frequently hear from teachers and students that our standards are not culturally relevant, sustaining or affirming,” Lindsey McCrea, the DCPS manager for social studies content and curriculum, told the State Board at its Nov. 20 monthly meeting. “The dominant narrative of Western European powers and the decisions of white Americans are the primary focus of the standards from kindergarten through 12th grade, while the experiences of marginalized people continue to be marginalized in DC state standards. All of our students deserve to see their own cultural, racial and social backgrounds reflected in the curriculum.”
https://thedcline.org/2019/12/03/dcps-targets-white-racial-bias-in-social-studies-education-standards-as-state-board-launches-rewrite/
On Watergate, Nixon, and USDOJ independence from political interference
After President Richard Nixon resigned, Attorney General Griffin Bell gathered Justice Department lawyers in the department's elaborate Great Hall to address their independence in the post-Watergate world.
"The partisan activities of some attorneys general ... combined with the unfortunate legacy of Watergate, have given rise to the understandable public concern that some decisions at Justice may be the products of favor, or pressure, or politics," he said in the September 6, 1978 address. https://www.justice.gov/sites/default/files/ag/legacy/2011/08/23/09-06-1978b.pdf
Resulting Justice Department rules limited White House involvement with law enforcement decisions. The reforms emerged from Nixon's use of the department to conceal his administration's involvement in the break-in at the Democratic National Committee in the Watergate building.
The regulations that were put into place were intended to insulate the USDoJ from political interference. US attorneys were to be independent.
White House officials and justice department lawyers weren’t supposed to exchange information about ongoing criminal investigations or civil enforcement actions. A 2007 memorandum allowed the department to advise the White House of criminal or civil enforcement matters “only where it is important for the performance of the president’s duties and where appropriate from a law enforcement perspective”.
Recent events, very well reported in the press, create worry about political misuse of the USDOJ. Recently, more than 2000 former USDOJ attorneys publicly expressed their concern, and a national association of federal judges has called an emergency meeting Tuesday to address growing concerns about the intervention of Justice Department officials and President Donald Trump in politically sensitive cases,. https://www.msn.com/en-us/news/politics/federal-judges-association-calls-emergency-meeting-after-doj-intervenes-in-case-of-trump-ally-roger-stone/ar-BB1068Le
Posted by Don Allen Resnikoff, who takes full responsibility for the content
https://www.msn.com/en-us/news/politics/federal-judges-association-calls-emergency-meeting-after-doj-intervenes-in-case-of-trump-ally-roger-stone/ar-BB1068Le
After President Richard Nixon resigned, Attorney General Griffin Bell gathered Justice Department lawyers in the department's elaborate Great Hall to address their independence in the post-Watergate world.
"The partisan activities of some attorneys general ... combined with the unfortunate legacy of Watergate, have given rise to the understandable public concern that some decisions at Justice may be the products of favor, or pressure, or politics," he said in the September 6, 1978 address. https://www.justice.gov/sites/default/files/ag/legacy/2011/08/23/09-06-1978b.pdf
Resulting Justice Department rules limited White House involvement with law enforcement decisions. The reforms emerged from Nixon's use of the department to conceal his administration's involvement in the break-in at the Democratic National Committee in the Watergate building.
The regulations that were put into place were intended to insulate the USDoJ from political interference. US attorneys were to be independent.
White House officials and justice department lawyers weren’t supposed to exchange information about ongoing criminal investigations or civil enforcement actions. A 2007 memorandum allowed the department to advise the White House of criminal or civil enforcement matters “only where it is important for the performance of the president’s duties and where appropriate from a law enforcement perspective”.
Recent events, very well reported in the press, create worry about political misuse of the USDOJ. Recently, more than 2000 former USDOJ attorneys publicly expressed their concern, and a national association of federal judges has called an emergency meeting Tuesday to address growing concerns about the intervention of Justice Department officials and President Donald Trump in politically sensitive cases,. https://www.msn.com/en-us/news/politics/federal-judges-association-calls-emergency-meeting-after-doj-intervenes-in-case-of-trump-ally-roger-stone/ar-BB1068Le
Posted by Don Allen Resnikoff, who takes full responsibility for the content
https://www.msn.com/en-us/news/politics/federal-judges-association-calls-emergency-meeting-after-doj-intervenes-in-case-of-trump-ally-roger-stone/ar-BB1068Le
From AAI:
District Court Opinion in State’s Challenge to Sprint-T-Mobile Marks New Low in Weak Merger Control; Consumers Will Bear the Burden
Today, a U.S. district court in New York issued its opinion rejecting the challenge brought by a coalition of state Attorneys General seeking to block the merger of Sprint and T-Mobile. The decision clears the way for the proposed merger to proceed. Separately, a U.S. district court in Washington, D.C. has yet to decide whether to approve the proposed settlement between the merging parties and the U.S. Department of Justice (DOJ). Approval of the settlement would push the deal toward completion.
“The States deserve enormous credit for bringing this case in the wake of failed federal enforcement,” said American Antitrust Institute (AAI) President Diana Moss. “Consumers will bear the ultimate burden of this disappointing decision through higher prices, lower quality, and diminished innovation in essential wireless telecommunications services,” she added.
AAI expressed alarm that the opinion ignores the basic economic reality that, in a market with only three remaining players, incentives to compete are substantially weakened. AAI’s past analysis of the Sprint-T-Mobile merger highlights the considerable economic evidence demonstrating that four-to-three mergers increase incentives for firms to collude and harm consumers.
Read More
District Court Opinion in State’s Challenge to Sprint-T-Mobile Marks New Low in Weak Merger Control; Consumers Will Bear the Burden
Today, a U.S. district court in New York issued its opinion rejecting the challenge brought by a coalition of state Attorneys General seeking to block the merger of Sprint and T-Mobile. The decision clears the way for the proposed merger to proceed. Separately, a U.S. district court in Washington, D.C. has yet to decide whether to approve the proposed settlement between the merging parties and the U.S. Department of Justice (DOJ). Approval of the settlement would push the deal toward completion.
“The States deserve enormous credit for bringing this case in the wake of failed federal enforcement,” said American Antitrust Institute (AAI) President Diana Moss. “Consumers will bear the ultimate burden of this disappointing decision through higher prices, lower quality, and diminished innovation in essential wireless telecommunications services,” she added.
AAI expressed alarm that the opinion ignores the basic economic reality that, in a market with only three remaining players, incentives to compete are substantially weakened. AAI’s past analysis of the Sprint-T-Mobile merger highlights the considerable economic evidence demonstrating that four-to-three mergers increase incentives for firms to collude and harm consumers.
Read More
DOJ & FTC Argue Opposite Sides Of Qualcomm Suit
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February 9, 2020According to the Financial Times, https://www.ft.com/content/adbca366-49d3-11ea-aeb3-955839e06441 [oaywall] the Trump administration is set for an unusual courtroom showdown on Thursday, February 13, between lawyers of two federal antitrust agencies who will argue opposite sides of a Qualcomm case that could help shape the race to develop 5G technology.
The Department of Justice (DOJ) has taken the US chipmaker’s side as Qualcomm tries to overturn its loss at trial last year in a Federal Trade Commission (FTC) lawsuit filed in the final days of the Obama administration.
Lawyers for the DOJ’s antitrust division, headed by Makan Delrahim, a former Qualcomm lobbyist recused from the case, have argued that US national security is at stake, while FTC attorneys have accused the DOJ of interfering with antitrust enforcement.
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February 9, 2020According to the Financial Times, https://www.ft.com/content/adbca366-49d3-11ea-aeb3-955839e06441 [oaywall] the Trump administration is set for an unusual courtroom showdown on Thursday, February 13, between lawyers of two federal antitrust agencies who will argue opposite sides of a Qualcomm case that could help shape the race to develop 5G technology.
The Department of Justice (DOJ) has taken the US chipmaker’s side as Qualcomm tries to overturn its loss at trial last year in a Federal Trade Commission (FTC) lawsuit filed in the final days of the Obama administration.
Lawyers for the DOJ’s antitrust division, headed by Makan Delrahim, a former Qualcomm lobbyist recused from the case, have argued that US national security is at stake, while FTC attorneys have accused the DOJ of interfering with antitrust enforcement.
From Ars Technica
https://arstechnica.com/information-technology/2020/02/att-lost-1-2b-by-preventing-time-warner-shows-from-airing-on-netflix/
AT&T withholds content to give its own planned service, HBO Max, exclusivity:
"AT&T's actual Q4 2019 revenue was $46.8 billion, but the company said it would have been $48 billion if not for "HBO Max investments in the form of foregone WarnerMedia content licensing revenues."
"An AT&T spokesperson told Ars that the $1.2 billion in lost revenue was primarily caused by the decision "not to sell existing content—mainly Friends, The Big Bang Theory, and Fresh Prince—to third parties such as Netflix." As we've previously reported, AT&T took Time Warner shows off Netflix in order to give the exclusive streaming rights to AT&T's HBO Max, which is scheduled to debut in May 2020 for $14.99 a month."
DAR comment (attention DC and other AGs): A possible candidate for State or Federal enforcement?
https://arstechnica.com/information-technology/2020/02/att-lost-1-2b-by-preventing-time-warner-shows-from-airing-on-netflix/
AT&T withholds content to give its own planned service, HBO Max, exclusivity:
"AT&T's actual Q4 2019 revenue was $46.8 billion, but the company said it would have been $48 billion if not for "HBO Max investments in the form of foregone WarnerMedia content licensing revenues."
"An AT&T spokesperson told Ars that the $1.2 billion in lost revenue was primarily caused by the decision "not to sell existing content—mainly Friends, The Big Bang Theory, and Fresh Prince—to third parties such as Netflix." As we've previously reported, AT&T took Time Warner shows off Netflix in order to give the exclusive streaming rights to AT&T's HBO Max, which is scheduled to debut in May 2020 for $14.99 a month."
DAR comment (attention DC and other AGs): A possible candidate for State or Federal enforcement?
NYT: Bill Barr’s striking plan to counter Huawei
President Trump has made it very clear that he is worried about Huawei’s leading role in 5G wireless technology. Now his attorney general, Bill Barr, has offered a radical solution: having the U.S. invest in the Chinese company’s European counterparts.
The U.S. doesn’t have a homegrown competitor to Huawei, Mr. Barr noted in a speech yesterday. The only viable rivals are Ericsson of Sweden and Nokia of Finland.
“Our economic future is at stake,” Mr. Barr said. “The risk of losing the 5G struggle with China should vastly outweigh other considerations.”
So he has an idea:
• “Some propose that these concerns could be met by the United States aligning itself with Nokia and/or Ericsson through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies.”
• “Putting our large market and financial muscle behind one or both of these firms would make it a more formidable competitor and eliminate concerns over its staying power,” Mr. Barr adds. “We and our closest allies certainly need to be actively considering this approach.”
https://www.nytimes.com/2020/02/07/business/dealbook/bill-barr-huawei-nokia-ericsson.html
Mr. Barr's speech is at https://www.justice.gov/opa/speech/attorney-general-william-p-barr-delivers-keynote-address-department-justices-china
President Trump has made it very clear that he is worried about Huawei’s leading role in 5G wireless technology. Now his attorney general, Bill Barr, has offered a radical solution: having the U.S. invest in the Chinese company’s European counterparts.
The U.S. doesn’t have a homegrown competitor to Huawei, Mr. Barr noted in a speech yesterday. The only viable rivals are Ericsson of Sweden and Nokia of Finland.
“Our economic future is at stake,” Mr. Barr said. “The risk of losing the 5G struggle with China should vastly outweigh other considerations.”
So he has an idea:
• “Some propose that these concerns could be met by the United States aligning itself with Nokia and/or Ericsson through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies.”
• “Putting our large market and financial muscle behind one or both of these firms would make it a more formidable competitor and eliminate concerns over its staying power,” Mr. Barr adds. “We and our closest allies certainly need to be actively considering this approach.”
https://www.nytimes.com/2020/02/07/business/dealbook/bill-barr-huawei-nokia-ericsson.html
Mr. Barr's speech is at https://www.justice.gov/opa/speech/attorney-general-william-p-barr-delivers-keynote-address-department-justices-china
Texas AG Accuses Google Of Delaying Antitrust Investigation
The state attorney general leading a broad antitrust investigation into Google is accusing the tech giant of delaying the case and vowed to see it through to the end.
https://www.cnbc.com/2020/02/05/texas-ag-paxton-says-google-delaying-antitrust-investigation.html
AAI Says DOJ Missed the Opportunity to Bust a Monopoly: Letter Unpacks Government’s Response to Live Nation-Ticketmaster’s Violations of the 2010 Merger Settlement
Today, AAI submitted a letter to the U.S. Department of Justice, Antitrust Division regarding its recent enforcement action in U.S v. Ticketmaster Entertainment, Inc., and Live Nation Entertainment, Inc. The decade-old merger of Live Nation and Ticketmaster melded together artist management, concert promotion, venue operation, and ticketing in a monolithic, multi-level supply chain in the live music business.
Read More https://www.antitrustinstitute.org/work-product/aai-says-doj-missed-the-opportunity-to-bust-a-monopoly-letter-unpacks-governments-response-to-live-nation-ticketmasters-violations-of-the-2010-merger-settlement/
Today, AAI submitted a letter to the U.S. Department of Justice, Antitrust Division regarding its recent enforcement action in U.S v. Ticketmaster Entertainment, Inc., and Live Nation Entertainment, Inc. The decade-old merger of Live Nation and Ticketmaster melded together artist management, concert promotion, venue operation, and ticketing in a monolithic, multi-level supply chain in the live music business.
Read More https://www.antitrustinstitute.org/work-product/aai-says-doj-missed-the-opportunity-to-bust-a-monopoly-letter-unpacks-governments-response-to-live-nation-ticketmasters-violations-of-the-2010-merger-settlement/
Laurie Garrett: Trump Has Sabotaged America’s Coronavirus Response
As it improvises its way through a public health crisis, the United States has never been less prepared for a pandemic.
BY LAURIE GARRETT
| JANUARY 31, 2020, 11:07 AM
When Tedros Adhanom Ghebreyesus, the director-general of the World Health Organization (WHO), declared the Wuhan coronavirus a public health emergency of international concern on Thursday, he praised China for taking “unprecedented” steps to control the deadly virus. “I have never seen for myself this kind of mobilization,” he noted. “China is actually setting a new standard for outbreak response.”
The epidemic control efforts unfolding today in China—including placing some 100 million citizens on lockdown, shutting down a national holiday, building enormous quarantine hospitals in days’ time, and ramping up 24-hour manufacturing of medical equipment—are indeed gargantuan. It’s impossible to watch them without wondering, “What would we do? How would my government respond if this virus spread across my country?”
For the United States, the answers are especially worrying because the government has intentionally rendered itself incapable. In 2018, the Trump administration fired the government’s entire pandemic response chain of command, including the White House management infrastructure. In numerous phone calls and emails with key agencies across the U.S. government, the only consistent response I encountered was distressed confusion. If the United States still has a clear chain of command for pandemic response, the White House urgently needs to clarify what it is
If the United States still has a clear chain of command for pandemic response, the White House urgently needs to clarify what it is
—not just for the public but for the government itself, which largely finds itself in the dark.
When Ebola broke out in West Africa in 2014, President Barack Obama recognized that responding to the outbreak overseas, while also protecting Americans at home, involved multiple U.S. government departments and agencies, none of which were speaking to one another. Basically, the U.S. pandemic infrastructure was an enormous orchestra full of talented, egotistical players, each jockeying for solos and fame, refusing to rehearse, and demanding higher salaries—all without a conductor. To bring order and harmony to the chaos, rein in the agency egos, and create a coherent multiagency response overseas and on the homefront, Obama anointed a former vice presidential staffer, Ronald Klain, as a sort of “epidemic czar” inside the White House, clearly stipulated the roles and budgets of various agencies, and placed incident commanders in charge in each Ebola-hit country and inside the United States. The orchestra may have still had its off-key instruments, but it played the same tune.
Building on the Ebola experience, the Obama administration set up a permanent epidemic monitoring and command group inside the White House National Security Council (NSC) and another in the Department of Homeland Security (DHS)—both of which followed the scientific and public health leads of the National Institutes of Health (NIH) and the Centers for Disease Control and Prevention (CDC) and the diplomatic advice of the State Department.
On the domestic front, the real business of assuring public health and safety is a local matter, executed by state, county, and city departments that operate under a mosaic of laws and regulations that vary jurisdiction by jurisdiction. Some massive cities, such as New York City or Boston, have large budgets, clear regulations, and epidemic experiences that have left deep benches of medical and public health talent. But much of the United States is less fortunate on the local level, struggling with underfunded agencies, understaffing, and no genuine epidemic experience. Large and small, America’s localities rely in times of public health crisis on the federal government.
Bureaucracy matters. Without it, there’s nothing to coherently manage an alphabet soup of agencies housed in departments ranging from Defense to Commerce, Homeland Security to Health and Human Services (HHS).
But that’s all gone now.
In the spring of 2018, the White House pushed Congress to cut funding for Obama-era disease security programs, proposing to eliminate $252 million in previously committed resources for rebuilding health systems in Ebola-ravaged Liberia, Sierra Leone, and Guinea. Under fire from both sides of the aisle, President Donald Trump dropped the proposal to eliminate Ebola funds a month later. But other White House efforts included reducing $15 billion in national health spending and cutting the global disease-fighting operational budgets of the CDC, NSC, DHS, and HHS. And the government’s $30 million Complex Crises Fund was eliminated.
REIn May 2018, Trump ordered the NSC’s entire global health security unit shut down, calling for reassignment of Rear Adm. Timothy Ziemer and dissolution of his team inside the agency. The month before, then-White House National Security Advisor John Bolton pressured Ziemer’s DHS counterpart, Tom Bossert, to resign along with his team. Neither the NSC nor DHS epidemic teams have been replaced. The global health section of the CDC was so drastically cut in 2018 that much of its staff was laid off and the number of countries it was working in was reduced from 49 to merely 10. Meanwhile, throughout 2018, the U.S. Agency for International Development and its director, Mark Green, came repeatedly under fire from both the White House and Secretary of State Mike Pompeo. And though Congress has so far managed to block Trump administration plans to cut the U.S. Public Health Service Commissioned Corps by 40 percent, the disease-fighting cadres have steadily eroded as retiring officers go unreplaced.
Public health advocates have been ringing alarm bells to no avail.
Public health advocates have been ringing alarm bells to no avail.
Klain has been warning for two years that the United States was in grave danger should a pandemic emerge. In 2017 and 2018, the philanthropist billionaire Bill Gates met repeatedly with Bolton and his predecessor, H.R. McMaster, warning that ongoing cuts to the global health disease infrastructure would render the United States vulnerable to, as he put it, the “significant probability of a large and lethal modern-day pandemic occurring in our lifetimes.” And an independent, bipartisan panel formed by the Center for Strategic and International Studies concluded that lack of preparedness was so acute in the Trump administration that the “United States must either pay now and gain protection and security or wait for the next epidemic and pay a much greater price in human and economic costs.”
The next epidemic is now here; we’ll soon know the costs imposed by the Trump administration’s early negligence and present panic. On Jan. 29, Trump announced the creation of the President’s Coronavirus Task Force, an all-male group of a dozen advisors, five from the White House staff. Chaired by Secretary of Health and Human Services Alex Azar, the task force includes men from the CDC, State Department, DHS, the Office of Management and Budget, and the Transportation Department. It’s not clear how this task force will function or when it will even convene.
In the absence of a formal structure, the government has resorted to improvisation. In practical terms, the U.S. government’s public health effort is led by Daniel Jernigan, the incident commander for the Wuhan coronavirus response at the CDC. Jernigan is responsible for convening meetings of the nation’s state health commissioners and briefing CDC Director Robert Redfield and his boss, Azar. Meanwhile, state-level health leaders told me that they have been sharing information with one another and deciding how best to prepare their medical and public health workers without waiting for instructions from federal leadership. The most important federal program for local medical worker and hospital epidemic training, however, will run out of money in May, as Congress has failed to vote on its funding. The HHS Office of the Assistant Secretary for Preparedness and Response (ASPR) is the bulwark between hospitals and health departments versus pandemic threats; last year HHS requested $2.58 billion, but Congress did not act.
On Thursday, the CDC confirmed the first human-to-human spread of the Wuhan coronavirus inside the United States, between a husband and wife in Chicago. While the wife acquired her infection traveling in China, she passed the virus to her husband on return to the United States. Though only six Wuhan coronavirus cases have been confirmed in the United States, with no deaths, Nancy Messonnier of the CDC told reporters on Thursday: “Moving forward, we can expect to see more cases, and more cases mean the potential for more person-to-person spread.”
As the number of coronavirus cases increases, Americans are growing more fearful, which is creating new problems that the government is leaving unaddressed.
As the number of coronavirus cases increases, Americans are growing more fearful, which is creating new problems that the government is leaving unaddressed.
Surveying the largest drug store chains in New York City on Wednesday, I found that all were sold out of medical face masks and latex gloves, as is Amazon. Searching online for protective masks reveals that dozens of products intended for use to block dust and particles far larger than viruses are garnering brisk sales—and none available that can actually prevent viral exposure. The surge in mask and glove sales to worried citizens all over the world needs refereeing. Bona fide anti-viral masks should be prioritized to front-line medical and public health staff, and the populace shouldn’t be misled into purchasing and wearing products that offer no genuine protection.
Countering misinformation, conspiracy theories, rumormongering, and discriminatory behavior against people believed to be disease spreaders requires thoughtful communication from leadership at the highest levels of government. None is in evidence. Instead, Commerce Secretary Wilbur Ross appeared on Fox Business on Thursday to fan the flames of fear for the sake of hypothetical business opportunities. “It does give businesses yet another thing to consider when they go through their review of their supply chain,” Ross said. “It’s another risk factor that people need to take into account. So, I think it will help accelerate the return of jobs to North America, some to the U.S., probably some to Mexico as well.” Meanwhile, Trump, asked at the recent World Economic Forum gathering in Davos, Switzerland how he intended to respond to the epidemic, said the situation was under control and a world away from the United States.
In a statement released this week, Pompeo sought to calm Americans, saying, “People should know that there are enormous efforts underway by the United States government to make sure that we do everything we can to protect the American people and to reduce the risk all around the globe.” But late Thursday night, the secretary—in clear defiance of WHO’s admonishment against restricting travel to and from China--issued an advisory saying, “Those currently in China should consider departing.”
In recent days, a handful of policy leaders have been shifted from government positions focused on weapons of mass destruction and bioterrorism to the slowly emerging epidemic response infrastructure, such as Matthew Pottinger, Philip Ferro, and David Wade on the NSC and the bioterrorism expert Anthony Ruggiero. It’s not at all clear how they would handle an explosion of coronavirus cases, were such a dreadful thing to occur in the United States. “The full weight of the US Government is working on this,” a senior administration official told CNN on Tuesday. “As with any interagency effort of this scale, the National Security Council works closely with the whole of government to ensure a coordinated and unified effort.”
The last time the U.S. government and its many local and state counterparts faced an explosive pandemic on American soil was 2009, with the spread of H1N1, or swine flu. The then-new Obama administration was still filling key positions across the executive branch when the epidemic emerged that spring, and it struggled to set the proper tone in reaction to what turned out to be an exceptionally contagious, but not unusually virulent, form of influenza. The challenge revealed enormous gaps in America’s ability to swiftly manufacture vaccines, stock-outs of face masks and vital hospital supplies, and serious difficulty in keeping ahead of outright lies, conspiracy theories, and rumormongering on cable TV and social media. The much more deadly pandemic test came in 1981, with the arrival of HIV: It did not go well, as history has well established, because homophobia was so pervasive in the country and within government that gay men, rather than the virus killing them, were treated as a national scourge.
Since the great influenza pandemic of 1918, the United States has been spared terrifying epidemics. Americans now are epidemic voyeurs. They watch YouTube videos of China’s struggles. They see the government attack its epidemic by building a 1,000-bed quarantine hospital in a single week, lock down cities larger than New York or Los Angeles, ramp up 24/7 manufacture of face masks and protective gear, deploy its armed forces medical corps to treat ailing citizens, send enormous convoys of food and supplies to anxious citizens of Wuhan, and release terrifying, growing tallies daily of its swelling patient populations. They look in horror at panicked lines of masked people waiting to learn if their fevers are caused by the deadly disease, at bodies lying on cold floors in overcrowded hospitals, and at people crying out from behind their masks for help. And they ask, “What would the United States do? What would the White House do?” The answers are not reassuring.
Laurie Garrett is a former senior fellow for global health at the Council on Foreign Relations and a Pulitzer Prize winning science writer. https://foreignpolicy.com/2020/01/31/coronavirus-china-trump-united-states-public-health-emergency-response/
February 6, 2020
Adventist HealthCare officially takes over Howard University Hospital
.
By Sara Gilgore / Per their new management services agreement, Adventist takes over the D.C. facility later this month, opening the door to potential major changes down the road, including perhaps a relocation.
Read Full Article https://www.bizjournals.com/washington/news/2020/02/06/exclusive-adventist-healthcare-officially-takes.html?
Adventist HealthCare officially takes over Howard University Hospital
.
By Sara Gilgore / Per their new management services agreement, Adventist takes over the D.C. facility later this month, opening the door to potential major changes down the road, including perhaps a relocation.
Read Full Article https://www.bizjournals.com/washington/news/2020/02/06/exclusive-adventist-healthcare-officially-takes.html?
Paige W. Cunningham on Healthcare and the 2020 Election; notes variations in health care policy among States
In the presidential election, healthcare is the number one issue for voters in both parties. Paige Winfield Cunningham is a national reporter at the Washington Post, focusing specifically on healthcare policy. Despite the healthcare wars within the Democratic Party—and between Democrats and the GOP—Cunningham tells Hari that neither party will make major changes.
READ TRANSCRIPT: https://www.pbs.org/wnet/amanpour-and-company/video/paige-w-cunningham-on-healthcare-and-the-2020-election/
WATCH FULL EPISODE https://www.pbs.org/wnet/amanpour-and-company/video/february-3-2020-gdj4hf/
In the presidential election, healthcare is the number one issue for voters in both parties. Paige Winfield Cunningham is a national reporter at the Washington Post, focusing specifically on healthcare policy. Despite the healthcare wars within the Democratic Party—and between Democrats and the GOP—Cunningham tells Hari that neither party will make major changes.
READ TRANSCRIPT: https://www.pbs.org/wnet/amanpour-and-company/video/paige-w-cunningham-on-healthcare-and-the-2020-election/
WATCH FULL EPISODE https://www.pbs.org/wnet/amanpour-and-company/video/february-3-2020-gdj4hf/
NYT recap of U.S. policies on Huawei
“Our economic future is at stake,” Mr. Barr said in a speech delivered during a conference in Washington on threats that China poses to the United States. “The risk of losing the 5G struggle with China should vastly outweigh other considerations.”
Mr. Barr noted that two Chinese telecom giants, Huawei and ZTE, account for about 40 percent of the global 5G infrastructure market, which is expected to serve as the backbone for trillions of dollars’ worth of economic and industrial activity in an increasingly digital global economy. 5G networks promise substantially faster network speeds and prospects for new commercial applications in multiple industries like transportation and health care.
Mr. Barr said it was the first time in history that the United States was not the leader in a major technological sector that will underpin future innovation.
The next generation of telecom networks — and the equipment for them that is currently being built — has emerged as a key fight in the battle between the United States and China for technology supremacy. American intelligence officials also say that equipment made by Chinese telecom companies could pose a threat to national security and have urged allies not to use it in their systems.
The White House and American national security experts have said that companies including Huawei are too closely tied to the Chinese government, and that their equipment could give Chinese officials unlawful access to data and communications if networks across the world decide to use it. The companies have long denied that they are beholden to the government.
“No country poses a greater threat than communist China,” John Brown, the assistant director of the F.B.I.’s counterintelligence division, said during separate remarks at the conference. He said that the world must decide whether its communications will go through China or the United States.
But the Trump administration has taken an inconsistent approach toward Huawei and ZTE and those companies continue to play an essential role in the new, 5G telecom networks being built around the globe.
A proposed rule change that would restrict sales of American computer processing chips to Huawei was placed on hold after Defense Department officials argued that such a move could undermine national security by discouraging the use of American components abroad.
Mr. Trump’s response to the security issues posed by 5G has been mixed. Last summer he said that “Huawei is something that is very dangerous.” But during the same remarks, he raised the prospect of including Huawei in a trade deal with China. “If we made a deal, I can imagine Huawei being included in some form or some part,” he said.
And in 2018, Mr. Trump lifted tough sanctions that the United States had imposed on ZTE, which had violated sanctions on Iran and North Korea and that defense advisers said posed a threat to national security. President Xi Jinping of China had personally asked Mr. Trump to intervene.
Intelligence officials and Republican lawmakers decried the move, saying that ZTE had not only failed to remedy its sanctions issues but had also lied about its efforts.
Nevertheless, the Trump administration has asked allies not to use equipment made by Huawei, in some cases threatening to withhold intelligence from countries that do not ban the company. But that pressure campaign has had limited success. China has threatened to economically retaliate against countries that ban equipment made by its technology companies.
Last month, Britain, one of the United States’ closest allies and part of the so-called Five Eyes intelligence-sharing alliance, decided to allow Huawei on its new 5G wireless network.
The British government said that it would only use Huawei in the parts of its new wireless network that would not compromise its national security. Officials also said it had to use Huawei because — after years of mergers and industry consolidation — there are too few competitors in the network-equipment space. It asked allies to work with the private sector to foster more competition.
Mr. Barr agreed that too few companies were making 5G equipment; Nokia and Ericsson are the only other global competitors. He said that proposals had already been floated to address this problem, including the possibility that a consortium of private American and allied companies could put financial might “behind one or both of those firms” to make them more competitive and guarantee their staying power.
“It’s all very well to tell our friends and allies that they shouldn't install Huawei, but whose infrastructure are they going to install?” Mr. Barr said.
https://www.nytimes.com/2020/02/06/us/politics/barr-5g.html
“Our economic future is at stake,” Mr. Barr said in a speech delivered during a conference in Washington on threats that China poses to the United States. “The risk of losing the 5G struggle with China should vastly outweigh other considerations.”
Mr. Barr noted that two Chinese telecom giants, Huawei and ZTE, account for about 40 percent of the global 5G infrastructure market, which is expected to serve as the backbone for trillions of dollars’ worth of economic and industrial activity in an increasingly digital global economy. 5G networks promise substantially faster network speeds and prospects for new commercial applications in multiple industries like transportation and health care.
Mr. Barr said it was the first time in history that the United States was not the leader in a major technological sector that will underpin future innovation.
The next generation of telecom networks — and the equipment for them that is currently being built — has emerged as a key fight in the battle between the United States and China for technology supremacy. American intelligence officials also say that equipment made by Chinese telecom companies could pose a threat to national security and have urged allies not to use it in their systems.
The White House and American national security experts have said that companies including Huawei are too closely tied to the Chinese government, and that their equipment could give Chinese officials unlawful access to data and communications if networks across the world decide to use it. The companies have long denied that they are beholden to the government.
“No country poses a greater threat than communist China,” John Brown, the assistant director of the F.B.I.’s counterintelligence division, said during separate remarks at the conference. He said that the world must decide whether its communications will go through China or the United States.
But the Trump administration has taken an inconsistent approach toward Huawei and ZTE and those companies continue to play an essential role in the new, 5G telecom networks being built around the globe.
A proposed rule change that would restrict sales of American computer processing chips to Huawei was placed on hold after Defense Department officials argued that such a move could undermine national security by discouraging the use of American components abroad.
Mr. Trump’s response to the security issues posed by 5G has been mixed. Last summer he said that “Huawei is something that is very dangerous.” But during the same remarks, he raised the prospect of including Huawei in a trade deal with China. “If we made a deal, I can imagine Huawei being included in some form or some part,” he said.
And in 2018, Mr. Trump lifted tough sanctions that the United States had imposed on ZTE, which had violated sanctions on Iran and North Korea and that defense advisers said posed a threat to national security. President Xi Jinping of China had personally asked Mr. Trump to intervene.
Intelligence officials and Republican lawmakers decried the move, saying that ZTE had not only failed to remedy its sanctions issues but had also lied about its efforts.
Nevertheless, the Trump administration has asked allies not to use equipment made by Huawei, in some cases threatening to withhold intelligence from countries that do not ban the company. But that pressure campaign has had limited success. China has threatened to economically retaliate against countries that ban equipment made by its technology companies.
Last month, Britain, one of the United States’ closest allies and part of the so-called Five Eyes intelligence-sharing alliance, decided to allow Huawei on its new 5G wireless network.
The British government said that it would only use Huawei in the parts of its new wireless network that would not compromise its national security. Officials also said it had to use Huawei because — after years of mergers and industry consolidation — there are too few competitors in the network-equipment space. It asked allies to work with the private sector to foster more competition.
Mr. Barr agreed that too few companies were making 5G equipment; Nokia and Ericsson are the only other global competitors. He said that proposals had already been floated to address this problem, including the possibility that a consortium of private American and allied companies could put financial might “behind one or both of those firms” to make them more competitive and guarantee their staying power.
“It’s all very well to tell our friends and allies that they shouldn't install Huawei, but whose infrastructure are they going to install?” Mr. Barr said.
https://www.nytimes.com/2020/02/06/us/politics/barr-5g.html
From New York's Street Vendor Project
http://streetvendor.org/
There are as many as 20,000 street vendors in New York City — hot dog vendors, flower vendors, t-shirt vendors, street artists, fancy food trucks, and many others. They are small businesspeople struggling to make ends meet. Most are immigrants and people of color. Some are US military veterans who served their country. They work long hours under harsh conditions, asking for nothing more than a chance to sell their goods on the public sidewalk.
Yet, in recent years, vendors have been victims of New York’s aggressive “quality of life” crackdown. They have been denied access to vending licenses. Many streets have been closed to them at the urging of powerful business groups. They receive exorbitant tickets for minor violations like vending too close to a crosswalk — more than any big businesses are required to pay for similar violations.
The Street Vendor Project is a membership-based project with more than 2,000 vendor members who are working together to create a vendors’ movement for permanent change. We reach out to vendors in the streets and storage garages and teach them about their legal rights and responsibilities. We hold meetings where we plan collective actions for getting our voices heard. We publish reports and file lawsuits to raise public awareness about vendors and the enormous contribution they make to our city.
Finally, we help vendors grow their businesses by linking them with small business training and loans.The Street Vendor Project is part of the Urban Justice Center, a non-profit organization that provides legal representation and advocacy to various marginalized groups of New Yorkers.
http://streetvendor.org/
There are as many as 20,000 street vendors in New York City — hot dog vendors, flower vendors, t-shirt vendors, street artists, fancy food trucks, and many others. They are small businesspeople struggling to make ends meet. Most are immigrants and people of color. Some are US military veterans who served their country. They work long hours under harsh conditions, asking for nothing more than a chance to sell their goods on the public sidewalk.
Yet, in recent years, vendors have been victims of New York’s aggressive “quality of life” crackdown. They have been denied access to vending licenses. Many streets have been closed to them at the urging of powerful business groups. They receive exorbitant tickets for minor violations like vending too close to a crosswalk — more than any big businesses are required to pay for similar violations.
The Street Vendor Project is a membership-based project with more than 2,000 vendor members who are working together to create a vendors’ movement for permanent change. We reach out to vendors in the streets and storage garages and teach them about their legal rights and responsibilities. We hold meetings where we plan collective actions for getting our voices heard. We publish reports and file lawsuits to raise public awareness about vendors and the enormous contribution they make to our city.
Finally, we help vendors grow their businesses by linking them with small business training and loans.The Street Vendor Project is part of the Urban Justice Center, a non-profit organization that provides legal representation and advocacy to various marginalized groups of New Yorkers.
Press release:AG Racine Joins Multistate Lawsuit Challenging Trump Administration Attack on Health Care Access and Reproductive Rights
January 30, 2020 New HHS Rule Threatens Abortion Coverage Provided by ACA Insurance Plans to 20K+ DC Residents
WASHINGTON, D.C. – Attorney General Karl A. Racine today joined six other Attorneys General in filing a lawsuit to stop the Trump administration from threatening access to safe and legal abortion care for individuals who purchase health insurance through state health care exchanges. This coalition, led by California and New York, is challenging a new rule issued by the Department of Health and Human Services (HHS) which unlawfully reinterprets part of the Affordable Care Act (ACA). The new rule imposes expensive and confusing billing requirements on health plans that cover abortion care and are sold through state insurance exchanges. This change creates major burdens for state insurance exchanges and puts millions of consumers at risk of accidentally losing health insurance coverage. The lawsuit is seeking to stop the rule’s implementation.
“The Trump administration’s relentless attack on safe and accessible abortion care puts tens of thousands of District residents and workers in jeopardy of losing their health care access through our exchange,” said AG Racine. “If this rule is implemented, it would dramatically increase health care costs for residents and the District—and the burdens it imposes could mean that insurance companies stop offering abortion care entirely. We filed this lawsuit to stand up for the rights of District women and families to make their own reproductive decisions.”
From https://oag.dc.gov/release/ag-racine-joins-multistate-lawsuit-challenging
HHS Secretary Alex Azar voiced frustration over stakeholders who are "fiercely" pushing back against the department's proposed interoperability rules.
"Health records today are stored in a segmented, balkanized system," Azar said during keynote remarks at the 2020 annual meeting of the department's Office of the National Coordinator for Health Information Technology in Washington, D.C. "Unfortunately, some are defending the balkanized, outdated status quo and fighting our proposals fiercely."
But defending the current system is "a pretty unpopular place to be," he added.
The two interoperability proposals, released by the ONC and the CMS early last year, are a core component of the Trump administration's larger vision of "putting patients at the center of American healthcare," Azar said.
From https://www.modernhealthcare.com/information-technology/azar-scare-tactics-wont-stall-interoperability-rules?utm_source=modern-healthcare-am-tuesday&utm_medium=email&utm_campaign=20200127&utm_content=article1-readmore
"Health records today are stored in a segmented, balkanized system," Azar said during keynote remarks at the 2020 annual meeting of the department's Office of the National Coordinator for Health Information Technology in Washington, D.C. "Unfortunately, some are defending the balkanized, outdated status quo and fighting our proposals fiercely."
But defending the current system is "a pretty unpopular place to be," he added.
The two interoperability proposals, released by the ONC and the CMS early last year, are a core component of the Trump administration's larger vision of "putting patients at the center of American healthcare," Azar said.
From https://www.modernhealthcare.com/information-technology/azar-scare-tactics-wont-stall-interoperability-rules?utm_source=modern-healthcare-am-tuesday&utm_medium=email&utm_campaign=20200127&utm_content=article1-readmore
Epic, Cerner & 5 more health IT stakeholders react to HHS' interoperability rule
Jackie Drees - Tuesday, January 28th, 2020 Print | Email
Epic, Cerner, Microsoft and other prominent health IT companies and executives are speaking up about HHS' proposed interoperability rule ahead of its anticipated finalization next month.
The regulations, which were issued by CMS and ONC last year to support the MyHealthEData and 21st Century Cures Act, would require the health IT industry to adopt application programming interfaces to help patients more easily access their health data. The rule would also prohibit healthcare organizations from employing information blocking practices.
The rule is currently under review by the Office of Management and Budget and is expected to be finalized in February.
Here are reactions from seven health IT companies and executives about the rules:
1. Epic. The EHR giant has voiced its opposition of the proposed rule, citing privacy concerns relating to third-party use of patient data. The company released a statement on Jan. 27 saying that while it supports HHS' effort to improve data sharing for patients, the rule presents "serious risks to patient privacy."
Earlier this month, Epic CEO Judy Faulkner sent emails to some of the company's largest U.S. hospital clients, urging them to voice their opposition of the proposed interoperability rules. Ms. Faulkner also said Epic may consider suing HHS if the finalized version of the interoperability rule does not support adequate safety regulations.
2. Cerner. Epic's largest EHR competitor appears to be in favor of the rule. Cerner CEO Brent Shafer on Jan. 27 tweeted the following statement about ONC's proposed information blocking rule: "Let me be abundantly clear: [Cerner] embraces interoperability and the flow of information across disparate systems and healthcare entities. We fully support the proposed rule and the rulemaking process."
Cerner is also a member of the CARIN Alliance, a multi-sector alliance that aims to work with the government to overhaul barriers to consumer-directed data exchange. Representatives from the EHR vendor reportedly attended the organization's Jan. 27 event to discuss initiatives to give patients more access to their health data.
3. CARIN Alliance. The organization, which comprises more than 85 members including Google, Apple and Microsoft, met with OMB on Jan. 27 to discuss HHS' proposed rules. In its key request, the alliance asked the federal government to finalize and release the rules immediately.
"Although we may slightly differ in the specific details regarding how the proposed rules should be implemented, we are united regarding consumer access sections of the two proposed rules and in our belief that both proposed rules should be finalized and released immediately," the alliance said in a statement.
4. Microsoft Healthcare. Peter Lee, corporate vice president of Microsoft Healthcare, said the technology giant endorses the proposed rules, adding that the regulations "are correct because they're based on modern data standards."
5. Tommy Thompson. The former HHS secretary and Wisconsin governor argued that the proposed interoperability rule would force Epic to hand over its trade secrets to competitors and "unfairly harm" the state's economy, according to a Jan. 10 op-ed he wrote for the Wisconsin State Journal.
6. Aneesh Chopra. In response to Epic CEO Judy Faulkner's emailed letter to hospital and health system execs, the former White House CTO told CNBC it was "unfortunate to see this much effort placed at stalling the important, bipartisan progress we have made to open up health information — at a minimum to consumers and institutions they trust."
7. Stephanie Reel. CIO of Baltimore-based Johns Hopkins University and Health System and a member of ONC's Health IT Policy Committee’s Information Exchange Workgroup told Becker's Hospital Review: "We are committed and continue to be focused on interoperability, and we are also focused on privacy and confidentiality of the patient information and protection of all of our information assets. It is one of the most challenging times as we think about the right balance in each of these areas. The angst that I feel about the recent interoperability conversation is around the risk to innovation. I think we need to find a balance that allows us to protect each individual patient, wisely leverage our data assets, while being equally cautious about the protection of intellectual property.
I worry a bit about too much control or reluctance to expand our thinking in an innovative way. The next big discovery will come from the very creative and innovative use of technology and information. I don't want us to err on the side of being too careful and too controlling because I think there is some risk that we will not make that next big discovery or cure that dreadful form of cancer."
https://www.beckershospitalreview.com/ehrs/epic-cerner-4-more-health-it-stakeholders-react-to-hhs-interoperability-rule.html?origin=bhre&utm_source=bhre&oly_enc_id=
Why electronic patient record interoperability matters: the March 10, 2014 submission of DCCRC to the FTC
The purpose of the attached comment letter of the DC Consumer Rights Coalition is to highlight competition-related policy issues likely to arise in emerging technology markets that are subject to "network" effects, such as the growing markets for Health Information Technology ("HIT") products, including Electronic Health Records ("EHR") products. We believe that the FTC should be cognizant of the potential danger to competition should healthcare providers adopt software and other technology that incorporates exclusionary proprietary standards. The danger is that the company that offers such technology may use it to disadvantage competitors by denying them access to the proprietary standards. Such problematic situations have arisen in other markets in the past, involving, for example, AT&T, IBM, and, more recently, Microsoft. Antitrust issues raised by such exclusionary conduct may be addressed through antitrust enforcement after the fact, of course. But we believe that a preferable approach is proactive government engagement that avoids the antitrust problem by facilitating and encouraging interoperability among products of competitors in the HIT markets.
The DCCRC comment (by Don Allen Resnikoff and Katherine Jones) is here:
00020-88806.pdf (78.25 KB)
The purpose of the attached comment letter of the DC Consumer Rights Coalition is to highlight competition-related policy issues likely to arise in emerging technology markets that are subject to "network" effects, such as the growing markets for Health Information Technology ("HIT") products, including Electronic Health Records ("EHR") products. We believe that the FTC should be cognizant of the potential danger to competition should healthcare providers adopt software and other technology that incorporates exclusionary proprietary standards. The danger is that the company that offers such technology may use it to disadvantage competitors by denying them access to the proprietary standards. Such problematic situations have arisen in other markets in the past, involving, for example, AT&T, IBM, and, more recently, Microsoft. Antitrust issues raised by such exclusionary conduct may be addressed through antitrust enforcement after the fact, of course. But we believe that a preferable approach is proactive government engagement that avoids the antitrust problem by facilitating and encouraging interoperability among products of competitors in the HIT markets.
The DCCRC comment (by Don Allen Resnikoff and Katherine Jones) is here:
00020-88806.pdf (78.25 KB)
Big tech giants Apple and Microsoft are joining health IT vendors and health plans to meet with federal officials today to voice strong support for efforts to give patients access to their health data.
The Carin Alliance, a private sector collaboration made up of major health insurers, providers, health IT companies and tech giants, announced last week that it is meeting with the Office of Management and Budget (OMB) OMB to request the agency to finalize and release the proposed interoperability rules "without further delay."
It came just days after the head of electronic health record (EHR) vendor Epic emailed CEOs and presidents of hospital systems urging recipients to sign a letter alongside Epic that voices disapproval for proposed interoperability rules from the Department of Health and Human Services (HHS).
Carin Alliance released a list of attendees for the Monday meeting and talking points (PDF) on its website Friday. Among the attendees are representatives from Apple, Microsoft, Humana, Walgreens, Blue Shield of California, Salesforce, Omada Health, major health information exchange Manifest MedEx, and Mount Sinai Health System. Also on the list were representatives of Cerner, an EHR vendor and competitor to Epic.
RELATED: Epic CEO emails hospital customers urging them to speak out against ONC interoperability rule
About 40 people representing some of the biggest companies in the industry are planning to attend, either in person or by phone.
Many of the organizations are members of the Carin Alliance.
"Although we may slightly differ in the specific details regarding how the proposed rules should be implemented, we are united regarding the consumer access sections of the two proposed rules and in our belief that both proposed rules should be finalized and released immediately," the Carin Alliance said in the talking points. "It will be to the benefit of all stakeholders to finalize the rules so the industry can work on implementation while continuing to work with the public sector to improve the rules over time."
In February 2019, the Office of the National Coordinator for Health IT (ONC) issued a proposed interoperability and information-blocking rule (PDF) that defines the demands on healthcare providers and electronic health record (EHR) vendors for data sharing. The rule also outlines exceptions to the prohibition against information blocking and provides standardized criteria for application programming interface development.
The ONC rule is currently under review by the OMB, the last step before publication. The Centers for Medicare & Medicaid Services' proposed interoperability rule (PDF) also is under review at OMB.
RELATED: Anthem, Humana along with Apple and Google testing API for patient access to claims data
During the ONC Annual Meeting in Washington D.C. Monday morning, Steve Posnack, Deputy National Coordinator for Health IT, said ONC's data-sharing rule would not be released during the annual meeting, taking place today and Tuesday.
The Carin Alliance said the organizations support the timely release of the interoperability rules "with the understanding that CMS and ONC have incorporated the consensus recommendations made by the public during the comment period and with the assumption the public and private sectors can work together to improve and build upon the rules after they are released."
Google was not listed as a meeting attendee, but the tech giant is among 20 organizations—including Apple, Anthem, Blue Cross Blue Shield, Cambia Health Solutions, and Humana—involved in an initiative to do “real-world testing” of an application programming interface (API) to standardize claims data sharing.
From: https://www.fiercehealthcare.com/tech/apple-microsoft-cerner-and-major-health-plans-call-for-omb-to-release-interoperability-rules?mkt_tok=eyJpIjoiTkdSbVl6SmxNV0l5WVdReiIsInQiOiJ6ZE5UR0VHSG50K3ZIZXJIY1N1NWRld1Q1REJ3K1VzeURGRDJcL0JPN3ZpQ1U0eVRIWjJ2NERhU1pweFFTMHhBd3JjRXpQNkNGOEtsSmJXcjBnMGx3aXNKcjRESGdzcjJzVXVOeGNFVFpQaDhxQWpsNkt5OWdQa0ZwZ1hyNXlCTXoifQ%3D%3D&mrkid=730008
The Carin Alliance, a private sector collaboration made up of major health insurers, providers, health IT companies and tech giants, announced last week that it is meeting with the Office of Management and Budget (OMB) OMB to request the agency to finalize and release the proposed interoperability rules "without further delay."
It came just days after the head of electronic health record (EHR) vendor Epic emailed CEOs and presidents of hospital systems urging recipients to sign a letter alongside Epic that voices disapproval for proposed interoperability rules from the Department of Health and Human Services (HHS).
Carin Alliance released a list of attendees for the Monday meeting and talking points (PDF) on its website Friday. Among the attendees are representatives from Apple, Microsoft, Humana, Walgreens, Blue Shield of California, Salesforce, Omada Health, major health information exchange Manifest MedEx, and Mount Sinai Health System. Also on the list were representatives of Cerner, an EHR vendor and competitor to Epic.
RELATED: Epic CEO emails hospital customers urging them to speak out against ONC interoperability rule
About 40 people representing some of the biggest companies in the industry are planning to attend, either in person or by phone.
Many of the organizations are members of the Carin Alliance.
"Although we may slightly differ in the specific details regarding how the proposed rules should be implemented, we are united regarding the consumer access sections of the two proposed rules and in our belief that both proposed rules should be finalized and released immediately," the Carin Alliance said in the talking points. "It will be to the benefit of all stakeholders to finalize the rules so the industry can work on implementation while continuing to work with the public sector to improve the rules over time."
In February 2019, the Office of the National Coordinator for Health IT (ONC) issued a proposed interoperability and information-blocking rule (PDF) that defines the demands on healthcare providers and electronic health record (EHR) vendors for data sharing. The rule also outlines exceptions to the prohibition against information blocking and provides standardized criteria for application programming interface development.
The ONC rule is currently under review by the OMB, the last step before publication. The Centers for Medicare & Medicaid Services' proposed interoperability rule (PDF) also is under review at OMB.
RELATED: Anthem, Humana along with Apple and Google testing API for patient access to claims data
During the ONC Annual Meeting in Washington D.C. Monday morning, Steve Posnack, Deputy National Coordinator for Health IT, said ONC's data-sharing rule would not be released during the annual meeting, taking place today and Tuesday.
The Carin Alliance said the organizations support the timely release of the interoperability rules "with the understanding that CMS and ONC have incorporated the consensus recommendations made by the public during the comment period and with the assumption the public and private sectors can work together to improve and build upon the rules after they are released."
Google was not listed as a meeting attendee, but the tech giant is among 20 organizations—including Apple, Anthem, Blue Cross Blue Shield, Cambia Health Solutions, and Humana—involved in an initiative to do “real-world testing” of an application programming interface (API) to standardize claims data sharing.
From: https://www.fiercehealthcare.com/tech/apple-microsoft-cerner-and-major-health-plans-call-for-omb-to-release-interoperability-rules?mkt_tok=eyJpIjoiTkdSbVl6SmxNV0l5WVdReiIsInQiOiJ6ZE5UR0VHSG50K3ZIZXJIY1N1NWRld1Q1REJ3K1VzeURGRDJcL0JPN3ZpQ1U0eVRIWjJ2NERhU1pweFFTMHhBd3JjRXpQNkNGOEtsSmJXcjBnMGx3aXNKcjRESGdzcjJzVXVOeGNFVFpQaDhxQWpsNkt5OWdQa0ZwZ1hyNXlCTXoifQ%3D%3D&mrkid=730008
The Fed Wants to Loosen Rules Around Big Banks and Venture Capital
Proposed tweaks to the Volcker Rule, which curbs bank risk-taking, would allow firms to invest heavily in funds backing start-ups.
https://www.nytimes.com/2020/01/30/business/economy/volcker-rule-banks-venture-capital.html
Proposed tweaks to the Volcker Rule, which curbs bank risk-taking, would allow firms to invest heavily in funds backing start-ups.
https://www.nytimes.com/2020/01/30/business/economy/volcker-rule-banks-venture-capital.html
La. Supreme Court reviews life sentence for conviction in $30 marijuana sale
Some justices on the Louisiana Supreme Court expressed doubts regarding Derek Harris's life sentence for his conviction in a $30 marijuana sale. Harris -- who had previously been convicted of charges including dealing cocaine and simple robbery -- says ineffective counsel resulted in his lack of a challenge to the constitutionality of his conviction, although state court precedent has prevented such challenges once direct appeals are exhausted.
The Times-Picayune | The New Orleans Advocate (1/27) https://www.nola.com/news/courts/article_0e00a78a-4156-11ea-90fc-eb90a76b692f.html
Some justices on the Louisiana Supreme Court expressed doubts regarding Derek Harris's life sentence for his conviction in a $30 marijuana sale. Harris -- who had previously been convicted of charges including dealing cocaine and simple robbery -- says ineffective counsel resulted in his lack of a challenge to the constitutionality of his conviction, although state court precedent has prevented such challenges once direct appeals are exhausted.
The Times-Picayune | The New Orleans Advocate (1/27) https://www.nola.com/news/courts/article_0e00a78a-4156-11ea-90fc-eb90a76b692f.html
From DMN: British Government Refuses to Implement the EU Copyright Directive
With Brexit rapidly approaching, the United Kingdom has decided it will not enforce the EU’s Copyright Directive.
The story continues here. https://www.digitalmusicnews.com/2020/01/27/copyright-directive-british-government-eu/
From DMN: Fender Fined $6 Million for Illegal Price-Fixing Scheme
Fender has been fined 4.5 million pounds (nearly $6 million) in the UK after admitting to price-fixing. The move breaks competition laws and prevents retailers from discounting instruments.
The story continues here.
With Brexit rapidly approaching, the United Kingdom has decided it will not enforce the EU’s Copyright Directive.
The story continues here. https://www.digitalmusicnews.com/2020/01/27/copyright-directive-british-government-eu/
From DMN: Fender Fined $6 Million for Illegal Price-Fixing Scheme
Fender has been fined 4.5 million pounds (nearly $6 million) in the UK after admitting to price-fixing. The move breaks competition laws and prevents retailers from discounting instruments.
The story continues here.
DC AG announces "wage theft and worker misclassification" case win
The AG press release:
In a big win for District workers, our office announced that Power Design—a major electrical contractor—will pay $2.75 million to resolve a wage theft and worker misclassification case. The settlement will return nearly $880,000 to workers, provide $50,000 to support workforce development programs, and require a $1.8 million payment to the District. This settlement is our office’s largest wage theft recovery to date, both in value and the number of affected workers it will help.
In our 2018 lawsuit, we alleged Power Design misclassified over 500 electrical workers as independent contractors instead of employees to cut costs and avoid legal responsibilities, like overtime, paid sick leave, and taxes. This form of payroll fraud is especially common in the construction industry and allows companies to gain an unfair advantage over law-abiding competitors.
'
This is the latest effort in OAG’s fight to protect District workers. In 2017, OAG worked with the D.C. Council to obtain independent authority to investigate and bring wage theft cases. Since then, we have launched over 30 investigations and recovered millions of dollars from businesses that have stolen wages from D.C. workers. We also recently testified before Congress about our new economic report on how misclassification hurts workers, undercuts law-abiding businesses, and cheats taxpayers.
If you believe your rights have been violated by your employer, report it to OAG at (202) 727-3400 or submit a complaint to the District’s Department of Employment Services. Workers can also learn more about their rights under District law by accessing our resources.
Karl A. Racine
Attorney General
https://outlook.live.com/mail/0/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgADHkpl1QAAAA%3D%3D
The AG press release:
In a big win for District workers, our office announced that Power Design—a major electrical contractor—will pay $2.75 million to resolve a wage theft and worker misclassification case. The settlement will return nearly $880,000 to workers, provide $50,000 to support workforce development programs, and require a $1.8 million payment to the District. This settlement is our office’s largest wage theft recovery to date, both in value and the number of affected workers it will help.
In our 2018 lawsuit, we alleged Power Design misclassified over 500 electrical workers as independent contractors instead of employees to cut costs and avoid legal responsibilities, like overtime, paid sick leave, and taxes. This form of payroll fraud is especially common in the construction industry and allows companies to gain an unfair advantage over law-abiding competitors.
'
This is the latest effort in OAG’s fight to protect District workers. In 2017, OAG worked with the D.C. Council to obtain independent authority to investigate and bring wage theft cases. Since then, we have launched over 30 investigations and recovered millions of dollars from businesses that have stolen wages from D.C. workers. We also recently testified before Congress about our new economic report on how misclassification hurts workers, undercuts law-abiding businesses, and cheats taxpayers.
If you believe your rights have been violated by your employer, report it to OAG at (202) 727-3400 or submit a complaint to the District’s Department of Employment Services. Workers can also learn more about their rights under District law by accessing our resources.
Karl A. Racine
Attorney General
https://outlook.live.com/mail/0/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgADHkpl1QAAAA%3D%3D
From NYT
Tougher Huawei Restrictions Stall After Defense Department Objects
Proposed changes to further limit U.S. shipments to Huawei have been delayed amid arguments they could backfire.
By Ana Swanson
· Jan. 24, 2020, 8:47 a.m. ET
WASHINGTON — The Trump administration has put on hold a proposed rule change that would further restrict American sales to Huawei, the Chinese telecom giant, after some officials in the Department of Defense and other agencies argued that the measure, which was intended to protect national security, could backfire and actually harm it, according to people familiar with the matter.
The rule change, which is currently being reviewed, would close a loophole that allowed technology companies like Intel and Micron to continue shipping some products to Huawei, even after the Chinese firm was placed on a blacklist that prevented it from buying some American products last May.
But some officials have objected to the change, arguing that it would encourage foreign companies to stop using American components, ultimately weakening American firms and the country’s technological competitiveness.
Excerpt from:https://www.nytimes.com/2020/01/24/business/economy/huawei-restrictions.html
Tougher Huawei Restrictions Stall After Defense Department Objects
Proposed changes to further limit U.S. shipments to Huawei have been delayed amid arguments they could backfire.
By Ana Swanson
· Jan. 24, 2020, 8:47 a.m. ET
WASHINGTON — The Trump administration has put on hold a proposed rule change that would further restrict American sales to Huawei, the Chinese telecom giant, after some officials in the Department of Defense and other agencies argued that the measure, which was intended to protect national security, could backfire and actually harm it, according to people familiar with the matter.
The rule change, which is currently being reviewed, would close a loophole that allowed technology companies like Intel and Micron to continue shipping some products to Huawei, even after the Chinese firm was placed on a blacklist that prevented it from buying some American products last May.
But some officials have objected to the change, arguing that it would encourage foreign companies to stop using American components, ultimately weakening American firms and the country’s technological competitiveness.
Excerpt from:https://www.nytimes.com/2020/01/24/business/economy/huawei-restrictions.html
Attorney General Karl A. Racine has announced a lawsuit against the 58th Presidential Inaugural Committee and two entities that own or control the Trump International Hotel in Washington, D.C. for abusing nonprofit funds to enrich the Trump family.
In its lawsuit, the Office of the Attorney General (OAG) alleges that the Inaugural Committee, a nonprofit corporation, coordinated with the Trump family to grossly overpay for event space in the Trump International Hotel. Although the Inaugural Committee was aware that it was paying far above market rates, it never considered less expensive alternatives, and even paid for space on days when it did not hold events. The Committee also improperly used non-profit funds to throw a private party for the Trump family costing several hundred thousand dollars. OAG’s lawsuit seeks to recover the amount improperly paid to the Trump Hotel, and to direct those funds to suitable nonprofit purposes.
“District law requires nonprofits to use their funds for their stated public purpose, not to benefit private individuals or companies,” said AG Racine. “In this case, we are seeking to recover the nonprofit funds that were improperly funneled directly to the Trump family business.”
A copy of the complaint is available at: https://oag.dc.gov/sites/default/files/2020-01/Trump-PIC-Complaint.pdf
A copy of the supplemental investigation documents is available at: http://bit.ly/Trump-PIC-Complaint-Supporting-Documents
In its lawsuit, the Office of the Attorney General (OAG) alleges that the Inaugural Committee, a nonprofit corporation, coordinated with the Trump family to grossly overpay for event space in the Trump International Hotel. Although the Inaugural Committee was aware that it was paying far above market rates, it never considered less expensive alternatives, and even paid for space on days when it did not hold events. The Committee also improperly used non-profit funds to throw a private party for the Trump family costing several hundred thousand dollars. OAG’s lawsuit seeks to recover the amount improperly paid to the Trump Hotel, and to direct those funds to suitable nonprofit purposes.
“District law requires nonprofits to use their funds for their stated public purpose, not to benefit private individuals or companies,” said AG Racine. “In this case, we are seeking to recover the nonprofit funds that were improperly funneled directly to the Trump family business.”
A copy of the complaint is available at: https://oag.dc.gov/sites/default/files/2020-01/Trump-PIC-Complaint.pdf
A copy of the supplemental investigation documents is available at: http://bit.ly/Trump-PIC-Complaint-Supporting-Documents
Maryland bill would allow auto dealers to advertise a price below manufacturers Minimum Advertised Price requirement
Currently, if a dealer advertises a price below the manufacturer's MAP, the dealer loses advertising or other support that the manufacturer gives to dealers who comply with the MAP advertised prices. The amount of manufacturer money that's at stake is so high that dealers will comply. That creates a problem for consumers who want to compare prices online, from the comfort of their home. If dealers are allowed to advertise low low prices for a vehicle, other sellers of that brand have to compete on price –a benefit for consumers.
The bill is SB 178, which is coming up for a hearing before the Judicial Proceedings Committee in the Maryland Senate this coming Tuesday (Jan. 28) at 1pm. Supporters of the bill include Maryland Consumer Rights Coalition and the Consumer Federation of America.
Posting by Don Allen Resnikoff
Currently, if a dealer advertises a price below the manufacturer's MAP, the dealer loses advertising or other support that the manufacturer gives to dealers who comply with the MAP advertised prices. The amount of manufacturer money that's at stake is so high that dealers will comply. That creates a problem for consumers who want to compare prices online, from the comfort of their home. If dealers are allowed to advertise low low prices for a vehicle, other sellers of that brand have to compete on price –a benefit for consumers.
The bill is SB 178, which is coming up for a hearing before the Judicial Proceedings Committee in the Maryland Senate this coming Tuesday (Jan. 28) at 1pm. Supporters of the bill include Maryland Consumer Rights Coalition and the Consumer Federation of America.
Posting by Don Allen Resnikoff
Michigan, Tesla Cut Deal Ending Direct Sale Suit
Tesla Inc. and the Michigan Attorney General's Office have reached an agreement that will end the electric car manufacturer's federal suit attacking a 2014 law that prevented it from selling vehicles directly to consumers in the state. But -- The deal requires Michigan buyers to title their cars elsewhere, even though they'll be able to purchase them without leaving the state.
Currently, it’s tough to buy and own a Tesla in Michigan. For starters, there aren't any places allowed to sell you one; you have to physically go to another state to buy the car. But the new settlement between Tesla and the state of Michigan, reportedly about to be finalized in U.S. District Court, should allow the California EV carmaker to directly sell to customers in Michigan.
Tesla Buying (and Updating)
Credit: https://www.reuters.com/article/us-tesla-michigan/michigan-tesla-reach-agreement-for-direct-car-sales-source-idUSKBN1ZK2LP
Tesla Inc. and the Michigan Attorney General's Office have reached an agreement that will end the electric car manufacturer's federal suit attacking a 2014 law that prevented it from selling vehicles directly to consumers in the state. But -- The deal requires Michigan buyers to title their cars elsewhere, even though they'll be able to purchase them without leaving the state.
Currently, it’s tough to buy and own a Tesla in Michigan. For starters, there aren't any places allowed to sell you one; you have to physically go to another state to buy the car. But the new settlement between Tesla and the state of Michigan, reportedly about to be finalized in U.S. District Court, should allow the California EV carmaker to directly sell to customers in Michigan.
Tesla Buying (and Updating)
Credit: https://www.reuters.com/article/us-tesla-michigan/michigan-tesla-reach-agreement-for-direct-car-sales-source-idUSKBN1ZK2LP
New vertical merger guidelines disappoint antitrust experts
Excerpt from article by HARRIS MEYER at https://www.modernhealthcare.com/mergers-acquisitions/new-vertical-merger-guidelines-disappoint-antitrust-experts?utm_source=modern-healthcare-am-wednesday&utm_medium=email&utm_campaign=20200121&utm_content=article1-readmoreMany healthcare antitrust experts are disappointed that the federal government's new proposed guidelines on vertical mergers give little detail on how the government will analyze deals between firms at different levels in the supply chain, such as hospitals and physician groups.
While the Federal Trade Commission and U.S. Justice Department highlighted potential competition risks from vertical mergers in the long-anticipated guidelines, the first update since 1984, some elected officials and antitrust attorneys say the release still doesn't give enough information to step up oversight of physician practice acquisitions by hospitals, insurers and private-equity firms.
"The guidelines are short and don't say much," said Douglas Ross, a veteran antitrust attorney at Davis Wright Tremaine in Seattle. "They don't really do much new, and they don't refer at all to healthcare or use any healthcare-related examples."
Vertical mergers create some specific competitive risks including preventing rivals from accessing products from the downstream merger partner, sharing sensitive business information about competitors and enabling coordinated interaction that hobbles rival firms.
The guidance update, released on Jan. 10, comes as concerns mount over the growing consolidation of hospitals and physician practices and the impact on prices and total health spending. There is also concern about more unorthodox vertical deals like those between CVS and Aetna and between UnitedHealth Group and DaVita.
The federal government has rarely challenged vertical mergers in any industry, in contrast to its more aggressive policy toward horizontal mergers between firms competing head to head. Antitrust enforcers and courts traditionally have viewed vertical mergers as much less likely to threaten competition than horizontal mergers. They often consider such deals pro-competitive.
But the new guidance included some surprises, according to Debbie Feinstein, a former top FTC official who heads Arnold & Porter's global antitrust group.
It proposed a safe harbor for vertical mergers if the merging firms have a combined share in the relevant market of less than 20%, and the "related product" produced by the downstream partner is used in less than 20% of the relevant market.
That's widely seen as an unusually low threshold, given that antitrust enforcers generally rule out action on mergers affecting less than 30% of a market at the very least.
Second, Feinstein said the draft has "no real discussion" of the standards by which the agencies will evaluate the ability of merging companies to reduce or cut off the supply of downstream products to rival firms, known as foreclosure.
That is what the agencies, as well as state attorneys general, have examined in recent vertical transactions. Those cases involved claims that acquisition of physician groups by insurers or hospitals may foreclose competition by making it more difficult or costly for rivals to obtain physician services.
Excerpt from article by HARRIS MEYER at https://www.modernhealthcare.com/mergers-acquisitions/new-vertical-merger-guidelines-disappoint-antitrust-experts?utm_source=modern-healthcare-am-wednesday&utm_medium=email&utm_campaign=20200121&utm_content=article1-readmoreMany healthcare antitrust experts are disappointed that the federal government's new proposed guidelines on vertical mergers give little detail on how the government will analyze deals between firms at different levels in the supply chain, such as hospitals and physician groups.
While the Federal Trade Commission and U.S. Justice Department highlighted potential competition risks from vertical mergers in the long-anticipated guidelines, the first update since 1984, some elected officials and antitrust attorneys say the release still doesn't give enough information to step up oversight of physician practice acquisitions by hospitals, insurers and private-equity firms.
"The guidelines are short and don't say much," said Douglas Ross, a veteran antitrust attorney at Davis Wright Tremaine in Seattle. "They don't really do much new, and they don't refer at all to healthcare or use any healthcare-related examples."
Vertical mergers create some specific competitive risks including preventing rivals from accessing products from the downstream merger partner, sharing sensitive business information about competitors and enabling coordinated interaction that hobbles rival firms.
The guidance update, released on Jan. 10, comes as concerns mount over the growing consolidation of hospitals and physician practices and the impact on prices and total health spending. There is also concern about more unorthodox vertical deals like those between CVS and Aetna and between UnitedHealth Group and DaVita.
The federal government has rarely challenged vertical mergers in any industry, in contrast to its more aggressive policy toward horizontal mergers between firms competing head to head. Antitrust enforcers and courts traditionally have viewed vertical mergers as much less likely to threaten competition than horizontal mergers. They often consider such deals pro-competitive.
But the new guidance included some surprises, according to Debbie Feinstein, a former top FTC official who heads Arnold & Porter's global antitrust group.
It proposed a safe harbor for vertical mergers if the merging firms have a combined share in the relevant market of less than 20%, and the "related product" produced by the downstream partner is used in less than 20% of the relevant market.
That's widely seen as an unusually low threshold, given that antitrust enforcers generally rule out action on mergers affecting less than 30% of a market at the very least.
Second, Feinstein said the draft has "no real discussion" of the standards by which the agencies will evaluate the ability of merging companies to reduce or cut off the supply of downstream products to rival firms, known as foreclosure.
That is what the agencies, as well as state attorneys general, have examined in recent vertical transactions. Those cases involved claims that acquisition of physician groups by insurers or hospitals may foreclose competition by making it more difficult or costly for rivals to obtain physician services.
STATEMENT OF FTC COMMISSIONER ROHIT CHOPRA Regarding the Request for Comment on Vertical Merger Guidelines
Summary
• The 1984 Non-Horizontal Merger Guidelines should be rescinded, as they represent an antiquated, narrow, and overly permissive mode of thinking that is not reflective of today’s economy or the current approach to enforcement.
• The U.S. economy is far different than it was forty years ago. Increasing concentration, declining new firm formation, and other market trends necessitate a modernization of vertical merger review.
• The draft guidelines released for public comment miss the mark. They are not supported by an analysis of past enforcement decisions, perpetuate an overdependence on theoretical models, and do not reflect all of the ways that competition can be harmed.
• Any new guidelines must establish a comprehensive framework for assessing the modern threats to competition posed by prospective vertical mergers. I agree with rescinding the outdated and permissive 1984 Non-Horizontal Merger Guidelines1 and engaging the public in the process of putting into place a new framework. I share the objective of my colleague Chairman Simons that we must “…make clear that anticompetitive vertical mergers are not unicorns, and there should not be a presumption that all vertical mergers are benign.” However, I disagree with proposing the draft guidelines published today because they are not comprehensive or reflective of modern economic realities.
Read the full statement at https://www.ftc.gov/system/files/documents/public_statements/1561727/p810034chopravmgabstain.pdf
Summary
• The 1984 Non-Horizontal Merger Guidelines should be rescinded, as they represent an antiquated, narrow, and overly permissive mode of thinking that is not reflective of today’s economy or the current approach to enforcement.
• The U.S. economy is far different than it was forty years ago. Increasing concentration, declining new firm formation, and other market trends necessitate a modernization of vertical merger review.
• The draft guidelines released for public comment miss the mark. They are not supported by an analysis of past enforcement decisions, perpetuate an overdependence on theoretical models, and do not reflect all of the ways that competition can be harmed.
• Any new guidelines must establish a comprehensive framework for assessing the modern threats to competition posed by prospective vertical mergers. I agree with rescinding the outdated and permissive 1984 Non-Horizontal Merger Guidelines1 and engaging the public in the process of putting into place a new framework. I share the objective of my colleague Chairman Simons that we must “…make clear that anticompetitive vertical mergers are not unicorns, and there should not be a presumption that all vertical mergers are benign.” However, I disagree with proposing the draft guidelines published today because they are not comprehensive or reflective of modern economic realities.
Read the full statement at https://www.ftc.gov/system/files/documents/public_statements/1561727/p810034chopravmgabstain.pdf
Is Current Medicare Working For Patients When Doctors "Opt Out"? Will Medicare For All Work Better?
My wife and I, who are both over 65, recently received a letter from our primary care physician informing us that she and her office will be "opting out" of the Medicare program. We did a little research and learned that "opting out" of Medicare means that a physician will no longer have any contractual relationship with Medicare. More specifically, Medicare will not cover any portion of the physician's fees or pay for any services provided by the practice. The practice cannot submit any claims to Medicare. The patient also cannot submit any claims to Medicare for the services provided by the practice.
Furthermore, if you are a Medicare beneficiary and decide to continue using the practice, Medicare requires that you enter into a contract with the practice. The required contract says that the patient understands that Medicare payments will not be made for any services provided by the practice and that the patient cannot submit any claims to Medicare for services provided by the "opt- out" provider.
As a practical matter the physician's "opt out" gives us no other choice than to leave the practice, and find a doctor who has not "opted-out" of Medicare.
My wife and I have lots of insurance coverage: primary coverage from Medicare A and B, and secondary coverage from an Aetna plan. In spite of all of this coverage the contract agreement required of us by our physician will leave us with zero reimbursement for any of her services. The "Medicare Private Contract" with the physician precludes us from seeking a Medicare B denial that would be needed so we could submit a claim to Aetna as secondary insurer.
We are in the world of Catch 22. Even if we would be willing to forgo reimbursement from Medicare B and then pay the physician and then chase our Aetna insurance reimbursement, the contract language the doctor’s opt-out letter requires simply does not permit that. And our Aetna insurer will not pay a claim until there is a denial from Medicare B.
We recognize that our doctor thinks she can profitably opt out of Medicare because we are in a wealthy zip code where some people can pay medical bills without relying on Medicare, or even without private insurance. And, perhaps our doctor’s business judgment on the opt-out point is misguided. But we do not see this story as an example of Medicare working smoothly. Would Medicare for All work better? It could, but the answer does not lie in soaring rhetoric suggesting Medicare for All as a panacea.
My wife and I would like to be insured so that we receive reimbursement to see a primary care physician who will be a thoughtful helper with health problems, not merely a person who spends brief periods of time with us and relies on sending us to specialists. As older people we have had our share of serious illnesses and chronic conditions. During the past decade we have relied on our trusted primary care physician. She has provided each of us with quality information that has helped us maintain our health. We had hoped that we would continue seeing her as we age.
It strikes us that the Catch 22 problem we face applies prospectively to any patient who plans to reach age 65 and go on Medicare. At that point, age 65, they can lose all coverage for the opt-out physician’s services - a discouraging prospect for her patients of all ages.
Again, would Medicare for All work better? It could, I suppose.
Posting is by Don Allen Resnikoff, who takes full responsibility for the content
My wife and I, who are both over 65, recently received a letter from our primary care physician informing us that she and her office will be "opting out" of the Medicare program. We did a little research and learned that "opting out" of Medicare means that a physician will no longer have any contractual relationship with Medicare. More specifically, Medicare will not cover any portion of the physician's fees or pay for any services provided by the practice. The practice cannot submit any claims to Medicare. The patient also cannot submit any claims to Medicare for the services provided by the practice.
Furthermore, if you are a Medicare beneficiary and decide to continue using the practice, Medicare requires that you enter into a contract with the practice. The required contract says that the patient understands that Medicare payments will not be made for any services provided by the practice and that the patient cannot submit any claims to Medicare for services provided by the "opt- out" provider.
As a practical matter the physician's "opt out" gives us no other choice than to leave the practice, and find a doctor who has not "opted-out" of Medicare.
My wife and I have lots of insurance coverage: primary coverage from Medicare A and B, and secondary coverage from an Aetna plan. In spite of all of this coverage the contract agreement required of us by our physician will leave us with zero reimbursement for any of her services. The "Medicare Private Contract" with the physician precludes us from seeking a Medicare B denial that would be needed so we could submit a claim to Aetna as secondary insurer.
We are in the world of Catch 22. Even if we would be willing to forgo reimbursement from Medicare B and then pay the physician and then chase our Aetna insurance reimbursement, the contract language the doctor’s opt-out letter requires simply does not permit that. And our Aetna insurer will not pay a claim until there is a denial from Medicare B.
We recognize that our doctor thinks she can profitably opt out of Medicare because we are in a wealthy zip code where some people can pay medical bills without relying on Medicare, or even without private insurance. And, perhaps our doctor’s business judgment on the opt-out point is misguided. But we do not see this story as an example of Medicare working smoothly. Would Medicare for All work better? It could, but the answer does not lie in soaring rhetoric suggesting Medicare for All as a panacea.
My wife and I would like to be insured so that we receive reimbursement to see a primary care physician who will be a thoughtful helper with health problems, not merely a person who spends brief periods of time with us and relies on sending us to specialists. As older people we have had our share of serious illnesses and chronic conditions. During the past decade we have relied on our trusted primary care physician. She has provided each of us with quality information that has helped us maintain our health. We had hoped that we would continue seeing her as we age.
It strikes us that the Catch 22 problem we face applies prospectively to any patient who plans to reach age 65 and go on Medicare. At that point, age 65, they can lose all coverage for the opt-out physician’s services - a discouraging prospect for her patients of all ages.
Again, would Medicare for All work better? It could, I suppose.
Posting is by Don Allen Resnikoff, who takes full responsibility for the content
Opinion: Is Obamacare Really Unconstitutional?
https://www.nejm.org/doi/full/10.1056/NEJMp1917063
On December 18, 2019, just 3 days after the close of open enrollment on the exchanges and on the same day the House of Representatives impeached President Donald Trump, a conservative appeals court handed the President a major victory in his crusade against the Affordable Care Act (ACA). Over a stern dissent, the U.S. Court of Appeals for the Fifth Circuit declared that the law’s individual mandate is unconstitutional and that the entire rest of the law might therefore be invalid.
The full consequences of the ruling are not yet clear. Instead of deciding for itself how much or how little of the ACA could stand, the appeals court asked the Texas judge who originally decided the case to take a second look at the question. In the meantime, a consortium of Democrat-led states may ask the Supreme Court to intervene. But it’s by no means assured that the Court will take up the invitation.
We’re in for a long period of uncertainty, and it’s unlikely that we’ll know the fate of the ACA before the 2020 election. At risk are the law’s protections for people with preexisting conditions, its prohibitions on abusive insurance practices, the Medicaid expansion, subsidies for private coverage, and much more. And whether the law survives this latest brush with death may depend on whether Trump secures a second term in office.
The lawsuit arose out of congressional Republicans’ failure to repeal the ACA after Trump’s election. They didn’t have the votes for that, but they did have enough to eliminate the ACA’s penalty for going without insurance. At the time, Trump crowed that “the very unfair and unpopular Individual Mandate has been terminated.”1
The Fifth Circuit, however, saw matters differently. For the court, it was constitutionally significant that Congress, when it repealed the penalty, hadn’t actually repealed the part of the law that says that people “shall” buy insurance. The instruction was still on the books, though it was now completely unenforceable.
Why did that matter? Back in 2012, the Supreme Court held that the individual mandate would be unconstitutional if that “shall” were read as a command.2 Congress didn’t have the power to force people to buy insurance. But the Supreme Court reasoned that “shall” didn’t have to be read as a command. To avoid constitutional difficulties, the Court read the ACA as imposing a tax: either buy insurance or pay a penalty. You’ve got a choice. Since Congress undeniably has the power to levy taxes, the individual mandate — that “shall” language — was perfectly constitutional.
Once Congress wiped out the penalty, however, the law looked less like a tax: after all, it would no longer raise any revenue. And so the Fifth Circuit said that the only way to read “shall” is as a coercive command — the sort of law that, under the Supreme Court’s 2012 decision, is unconstitutional.
Lawyers of all political stripes have derided the court’s conclusion. When Congress eliminated the penalty for going without insurance, it made the individual mandate less coercive, not more so. And the Supreme Court, in 2012, already interpreted “shall” as affording people “a lawful choice.” Congress didn’t revisit that conclusion when it eliminated the penalty. The appeals court is bound by the Supreme Court’s conclusion, whether it likes it or not.
On its face, too, the decision betrays just how partisan the litigation over the ACA has become. The opinion reports, for example, that “some opponents” think “that the entire law was enacted as part of a fraud on the American people.” That kind of gratuitous jab may help to explain why the opinion is so difficult to defend in traditional legal terms. It reads, instead, as an exercise of raw political power.
What does the constitutional holding mean for the rest of the ACA? The judge who first heard the case held that the mandate’s unconstitutionality required the invalidation of the entire ACA — to use the legal jargon, that it could not be “severed” from the rest of the law. In his view, the same Congress that wiped out the tax penalty also believed that the mandate — even without a penalty — was an essential part of the entire law. No part could be saved.
On that, the appeals court disagreed. Severability analysis, it held, requires a court to use a “finer-toothed comb” when reviewing legislation. The court reasoned that parts of the ACA — including, for example, the part requiring chain restaurants to post calorie counts on their menus — don’t have much to do with the mandate at all. They could perhaps be salvaged, even if the mandate is struck down. So the Fifth Circuit sent the case back to the judge and told him to try again. Yet the court offered no guidance about “how fine-toothed that comb should be.” It was even open to the possibility that the judge could reach exactly the same conclusion: “it may still be that none of the ACA is severable from the individual mandate, even after this inquiry is concluded.”
Here, too, the Fifth Circuit’s decision is difficult to defend. As the dissenting judge wrote, if Congress in 2017 had viewed the mandate “as so essential to the rest of the ACA that it intended the entire statute to rise and fall with the coverage requirement, it is inconceivable that Congress would have declawed [it] as it did.” A hortatory instruction to buy insurance can’t be essential to anything.
With that in mind, the Fifth Circuit could simply have struck down the mandate and kept the rest of the ACA intact. Had it done so, the case, for all practical purposes, would be over: no one cares whether an unenforceable instruction to buy insurance remains on the books. Instead, the court sent the case back down to a judge with a partisan reputation who had previously invalidated the entire law. He is likely to make a similarly expansive decision the second time around.
But the process will take time — perhaps another 2 years for the Fifth Circuit to decide the inevitable appeal from the judge’s do-over, followed by another high-stakes Supreme Court case. It’s hard to resist the conclusion that the delay is strategic: declaring all or part of the ACA invalid would probably have been bad for Republicans in the 2020 election. Many parts of the ACA are quite popular, especially the protections for people with preexisting conditions and the Medicaid expansion. Invalidating those parts might have provoked a political backlash. Punting to the district court gives Republicans a little more breathing room.
Unless, of course, the Supreme Court chooses to intervene at this stage. And it might do so: the validity of the ACA is an issue of national importance, and the Fifth Circuit’s decision is absurd. Plus, it takes only four votes for the Supreme Court to agree to hear a case, and the four liberal justices can probably count on Chief Justice John Roberts, who has twice turned back more substantial challenges to the law and is unlikely to embrace a lawsuit as weak as this one. The liberal justices might opt to hear the case now instead of running the risk that Trump will be reelected and will stack the Court with hard-liners.
That said, the justices generally dislike hearing cases before they’re final. They may be especially disinclined given that the ACA will remain intact during the additional proceedings on severability. Roberts may look like a safe bet, but you never know. And the Court may prefer to avoid such a politically salient case during an election year. Perhaps the more prudent course is to wait.
Regardless, the ACA will have a cloud over it for the foreseeable future. Republicans haven’t been able to repeal the ACA through Congress. But they’re still working hard to repeal it in the courts.
- Nicholas Bagley, J.D.
https://www.nejm.org/doi/full/10.1056/NEJMp1917063
On December 18, 2019, just 3 days after the close of open enrollment on the exchanges and on the same day the House of Representatives impeached President Donald Trump, a conservative appeals court handed the President a major victory in his crusade against the Affordable Care Act (ACA). Over a stern dissent, the U.S. Court of Appeals for the Fifth Circuit declared that the law’s individual mandate is unconstitutional and that the entire rest of the law might therefore be invalid.
The full consequences of the ruling are not yet clear. Instead of deciding for itself how much or how little of the ACA could stand, the appeals court asked the Texas judge who originally decided the case to take a second look at the question. In the meantime, a consortium of Democrat-led states may ask the Supreme Court to intervene. But it’s by no means assured that the Court will take up the invitation.
We’re in for a long period of uncertainty, and it’s unlikely that we’ll know the fate of the ACA before the 2020 election. At risk are the law’s protections for people with preexisting conditions, its prohibitions on abusive insurance practices, the Medicaid expansion, subsidies for private coverage, and much more. And whether the law survives this latest brush with death may depend on whether Trump secures a second term in office.
The lawsuit arose out of congressional Republicans’ failure to repeal the ACA after Trump’s election. They didn’t have the votes for that, but they did have enough to eliminate the ACA’s penalty for going without insurance. At the time, Trump crowed that “the very unfair and unpopular Individual Mandate has been terminated.”1
The Fifth Circuit, however, saw matters differently. For the court, it was constitutionally significant that Congress, when it repealed the penalty, hadn’t actually repealed the part of the law that says that people “shall” buy insurance. The instruction was still on the books, though it was now completely unenforceable.
Why did that matter? Back in 2012, the Supreme Court held that the individual mandate would be unconstitutional if that “shall” were read as a command.2 Congress didn’t have the power to force people to buy insurance. But the Supreme Court reasoned that “shall” didn’t have to be read as a command. To avoid constitutional difficulties, the Court read the ACA as imposing a tax: either buy insurance or pay a penalty. You’ve got a choice. Since Congress undeniably has the power to levy taxes, the individual mandate — that “shall” language — was perfectly constitutional.
Once Congress wiped out the penalty, however, the law looked less like a tax: after all, it would no longer raise any revenue. And so the Fifth Circuit said that the only way to read “shall” is as a coercive command — the sort of law that, under the Supreme Court’s 2012 decision, is unconstitutional.
Lawyers of all political stripes have derided the court’s conclusion. When Congress eliminated the penalty for going without insurance, it made the individual mandate less coercive, not more so. And the Supreme Court, in 2012, already interpreted “shall” as affording people “a lawful choice.” Congress didn’t revisit that conclusion when it eliminated the penalty. The appeals court is bound by the Supreme Court’s conclusion, whether it likes it or not.
On its face, too, the decision betrays just how partisan the litigation over the ACA has become. The opinion reports, for example, that “some opponents” think “that the entire law was enacted as part of a fraud on the American people.” That kind of gratuitous jab may help to explain why the opinion is so difficult to defend in traditional legal terms. It reads, instead, as an exercise of raw political power.
What does the constitutional holding mean for the rest of the ACA? The judge who first heard the case held that the mandate’s unconstitutionality required the invalidation of the entire ACA — to use the legal jargon, that it could not be “severed” from the rest of the law. In his view, the same Congress that wiped out the tax penalty also believed that the mandate — even without a penalty — was an essential part of the entire law. No part could be saved.
On that, the appeals court disagreed. Severability analysis, it held, requires a court to use a “finer-toothed comb” when reviewing legislation. The court reasoned that parts of the ACA — including, for example, the part requiring chain restaurants to post calorie counts on their menus — don’t have much to do with the mandate at all. They could perhaps be salvaged, even if the mandate is struck down. So the Fifth Circuit sent the case back to the judge and told him to try again. Yet the court offered no guidance about “how fine-toothed that comb should be.” It was even open to the possibility that the judge could reach exactly the same conclusion: “it may still be that none of the ACA is severable from the individual mandate, even after this inquiry is concluded.”
Here, too, the Fifth Circuit’s decision is difficult to defend. As the dissenting judge wrote, if Congress in 2017 had viewed the mandate “as so essential to the rest of the ACA that it intended the entire statute to rise and fall with the coverage requirement, it is inconceivable that Congress would have declawed [it] as it did.” A hortatory instruction to buy insurance can’t be essential to anything.
With that in mind, the Fifth Circuit could simply have struck down the mandate and kept the rest of the ACA intact. Had it done so, the case, for all practical purposes, would be over: no one cares whether an unenforceable instruction to buy insurance remains on the books. Instead, the court sent the case back down to a judge with a partisan reputation who had previously invalidated the entire law. He is likely to make a similarly expansive decision the second time around.
But the process will take time — perhaps another 2 years for the Fifth Circuit to decide the inevitable appeal from the judge’s do-over, followed by another high-stakes Supreme Court case. It’s hard to resist the conclusion that the delay is strategic: declaring all or part of the ACA invalid would probably have been bad for Republicans in the 2020 election. Many parts of the ACA are quite popular, especially the protections for people with preexisting conditions and the Medicaid expansion. Invalidating those parts might have provoked a political backlash. Punting to the district court gives Republicans a little more breathing room.
Unless, of course, the Supreme Court chooses to intervene at this stage. And it might do so: the validity of the ACA is an issue of national importance, and the Fifth Circuit’s decision is absurd. Plus, it takes only four votes for the Supreme Court to agree to hear a case, and the four liberal justices can probably count on Chief Justice John Roberts, who has twice turned back more substantial challenges to the law and is unlikely to embrace a lawsuit as weak as this one. The liberal justices might opt to hear the case now instead of running the risk that Trump will be reelected and will stack the Court with hard-liners.
That said, the justices generally dislike hearing cases before they’re final. They may be especially disinclined given that the ACA will remain intact during the additional proceedings on severability. Roberts may look like a safe bet, but you never know. And the Court may prefer to avoid such a politically salient case during an election year. Perhaps the more prudent course is to wait.
Regardless, the ACA will have a cloud over it for the foreseeable future. Republicans haven’t been able to repeal the ACA through Congress. But they’re still working hard to repeal it in the courts.
The USDOJ’s Antitrust Division is asking to take part in legal arguments at Qualcomm’s February 13 appeals court hearing.
The USDOJ wishes to support Qualcomm’s attempt to overturn a ruling requiring the remedy of compulsory licensing.
The antitrust fight between the USDOJ and the FTC is unusual, particularly since the USDOJ’s position is based on a concern that is generally considered outside of the realm of antitrust: the concern is that forced licensing will compromise U.S. national security and harm an important U.S. company.
The back-story is that when the Federal Trade Commission, an independent regulatory agency, obtained a trial court level order requiring compulsory licensing of certain patents by Qualcomm, the US Department of Justice, an executive branch agency, pushed back. The USDOJ filing at document/file/1183936/download , is styled UNITED STATES’ STATEMENT OF INTEREST CONCERNING QUALCOMM’S MOTION FOR PARTIAL STAY OF INJUNCTION PENDING APPEAL.
USDOJ concern about Chinese commercial rivalry in 5G is a prominent part of the story.
The USDOJ filing explains: “Immediate implementation of the remedy could put our nation’s security at risk, potentially undermining U.S. leadership in 5G technology and standard-setting, which is vital to military readiness and other critical national interests. . . . According to the Committee on Foreign Investment in the United States (CFIUS), Qualcomm is ‘the current leading company in 5G technology development and standard setting’ due primarily to ‘its unmatched expertise and research and development (‘R&D’) expenditure. . . . [A] reduction in Qualcomm’s leadership in 5G innovation and standard-setting, ‘even in the short-term,’ could ‘significantly impact U.S. national security’ by enabling foreign-owned firms to expand their influence. [citation omitted] This is a ‘critical period of time,’ and allowing foreign-aligned firms to drive the development of 5G standards could have long-term ramifications, including cyberespionage.’”
There are complexities with regard to the contract and antitrust rationale for the FTC’s concerns about Qualcomm’s licensing practices. But we do not need to get deeply into those complexities here. For further analysis of the FTC position see https://www.essentialpatentblog.com/2019/08/ninth-circuit-stays-judge-kohs-injuncton-in-the-ftc-v-doj-competition-brawl-ftc-v-qualcomm/ Important elements of the story of the FTC prosecution and USDOJ opposition can be found in the USDOJ “STATEMENT OF INTEREST filing” cited earlier. See also BRIEF FOR THE AMERICAN ANTITRUST INSTITUTE AND PUBLIC KNOWLEDGE AS AMICI CURIAE IN SUPPORT OF PLAINTIFF-APPELLEE, filed with the Ninth Circuit Court of Appeals,[ file:///C:/Users/resni/Downloads/TSAC%20Amicus%20Br.%20of%20AAI-PK_FTC%20v.%20Qualcomm%20-%20Corrected.pdf]
Posting by Don Allen Resnikoff, who is responsible for the content
The USDOJ wishes to support Qualcomm’s attempt to overturn a ruling requiring the remedy of compulsory licensing.
The antitrust fight between the USDOJ and the FTC is unusual, particularly since the USDOJ’s position is based on a concern that is generally considered outside of the realm of antitrust: the concern is that forced licensing will compromise U.S. national security and harm an important U.S. company.
The back-story is that when the Federal Trade Commission, an independent regulatory agency, obtained a trial court level order requiring compulsory licensing of certain patents by Qualcomm, the US Department of Justice, an executive branch agency, pushed back. The USDOJ filing at document/file/1183936/download , is styled UNITED STATES’ STATEMENT OF INTEREST CONCERNING QUALCOMM’S MOTION FOR PARTIAL STAY OF INJUNCTION PENDING APPEAL.
USDOJ concern about Chinese commercial rivalry in 5G is a prominent part of the story.
The USDOJ filing explains: “Immediate implementation of the remedy could put our nation’s security at risk, potentially undermining U.S. leadership in 5G technology and standard-setting, which is vital to military readiness and other critical national interests. . . . According to the Committee on Foreign Investment in the United States (CFIUS), Qualcomm is ‘the current leading company in 5G technology development and standard setting’ due primarily to ‘its unmatched expertise and research and development (‘R&D’) expenditure. . . . [A] reduction in Qualcomm’s leadership in 5G innovation and standard-setting, ‘even in the short-term,’ could ‘significantly impact U.S. national security’ by enabling foreign-owned firms to expand their influence. [citation omitted] This is a ‘critical period of time,’ and allowing foreign-aligned firms to drive the development of 5G standards could have long-term ramifications, including cyberespionage.’”
There are complexities with regard to the contract and antitrust rationale for the FTC’s concerns about Qualcomm’s licensing practices. But we do not need to get deeply into those complexities here. For further analysis of the FTC position see https://www.essentialpatentblog.com/2019/08/ninth-circuit-stays-judge-kohs-injuncton-in-the-ftc-v-doj-competition-brawl-ftc-v-qualcomm/ Important elements of the story of the FTC prosecution and USDOJ opposition can be found in the USDOJ “STATEMENT OF INTEREST filing” cited earlier. See also BRIEF FOR THE AMERICAN ANTITRUST INSTITUTE AND PUBLIC KNOWLEDGE AS AMICI CURIAE IN SUPPORT OF PLAINTIFF-APPELLEE, filed with the Ninth Circuit Court of Appeals,[ file:///C:/Users/resni/Downloads/TSAC%20Amicus%20Br.%20of%20AAI-PK_FTC%20v.%20Qualcomm%20-%20Corrected.pdf]
Posting by Don Allen Resnikoff, who is responsible for the content
Opinion from Public Citizen: Revised NAFTA Cements New Floor for Trade PactsPharma Giveaways, Extreme Investor Rights in Past Pacts Are Out, Better Labor and Environmental Terms In After Democrats Forced Trump to Redo His 2018 NAFTA 2.0 Deal
Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch
Note: The U.S. Senate today passed the revised North American Free Trade Agreement (NAFTA) by a margin of 89 to 10. This follows passage in the U.S. House of Representatives by a margin of 385 to 41 in December 2019.
The unusually large, bipartisan votes in the Senate and House on the revised NAFTA set a new standard that to be politically viable, U.S. trade pacts no longer can include extreme corporate investor privileges or broad monopoly protections for Big Pharma and must have enforceable labor and environmental standards, in contrast to the 2016 Trans-Pacific Partnership, which never got close to congressional majority support.
Renegotiating the existing NAFTA to try to reduce its ongoing damage is not the same as creating a good trade agreement that creates jobs, raises wages and protects the environment and public health. That would additionally require climate provisions, stronger labor and environmental terms, and truly enforceable currency disciplines, and not limit consumer protections for food and product safety and labeling, the service sector, online platforms and more.
The NAFTA 2.0 deal that President Donald Trump initially signed in 2018 betrayed his campaign promise to fix NAFTA: It included new Big Pharma giveaways that lock in high drug prices, making it worse than the original, and its labor and environmental terms were too weak to counteract NAFTA’s outsourcing of jobs and pollution.
However, after congressional Democrats, unions and consumer groups forced Trump to remove Big Pharma giveaways and improve labor and environmental terms, the final revised deal is better than the original and might reduce some of NAFTA’s ongoing damage to workers and the environment. Although the new deal still includes problematic terms, the alternative is status quo NAFTA, not a more improved deal.
But this new NAFTA won’t bring back hundreds of thousands of manufacturing jobs, as Trump nonsensically claims. Nothing makes that clearer than U.S. auto manufacturers’ recent announcements that they plan to increase production in Mexico – from Ford’s decision to make its new Mustang electric SUV in Mexico to GM closing U.S. auto plants while expanding production in Mexico.
One clear and important win for consumers, workers and the environment is the gutting of NAFTA’s Investor-State Dispute Settlement (ISDS) regime. ISDS empowers multinational corporations to go before panels of three corporate lawyers to demand unlimited compensation from taxpayers over claims that domestic laws, regulations and court rulings violate special investor privileges. The lawyers can award the corporations unlimited sums to be paid by taxpayers, including for the loss of expected future profits. To date, corporations have extracted almost $400 million from North American taxpayers after attacks on energy, water, timber and toxics policies. Largely eliminating ISDS will foreclose numerous corporate attacks on environmental, health and other public interest policies and send a signal worldwide to the many countries also eager to exit the illegitimate ISDS regime.
The new NAFTA is not a template for future agreements; rather, it sets the floor from which we will fight for good trade policies that put working people and the planet first.
Source: https://www.citizen.org/news/broad-bipartisan-congressional-votes-on-revised-nafta-cement-new-floor-for-trade-pacts-pharma-giveaways-extreme-investor-rights-in-past-pacts-are-out-better-labor-and-environmental-terms-in-after/
Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch
Note: The U.S. Senate today passed the revised North American Free Trade Agreement (NAFTA) by a margin of 89 to 10. This follows passage in the U.S. House of Representatives by a margin of 385 to 41 in December 2019.
The unusually large, bipartisan votes in the Senate and House on the revised NAFTA set a new standard that to be politically viable, U.S. trade pacts no longer can include extreme corporate investor privileges or broad monopoly protections for Big Pharma and must have enforceable labor and environmental standards, in contrast to the 2016 Trans-Pacific Partnership, which never got close to congressional majority support.
Renegotiating the existing NAFTA to try to reduce its ongoing damage is not the same as creating a good trade agreement that creates jobs, raises wages and protects the environment and public health. That would additionally require climate provisions, stronger labor and environmental terms, and truly enforceable currency disciplines, and not limit consumer protections for food and product safety and labeling, the service sector, online platforms and more.
The NAFTA 2.0 deal that President Donald Trump initially signed in 2018 betrayed his campaign promise to fix NAFTA: It included new Big Pharma giveaways that lock in high drug prices, making it worse than the original, and its labor and environmental terms were too weak to counteract NAFTA’s outsourcing of jobs and pollution.
However, after congressional Democrats, unions and consumer groups forced Trump to remove Big Pharma giveaways and improve labor and environmental terms, the final revised deal is better than the original and might reduce some of NAFTA’s ongoing damage to workers and the environment. Although the new deal still includes problematic terms, the alternative is status quo NAFTA, not a more improved deal.
But this new NAFTA won’t bring back hundreds of thousands of manufacturing jobs, as Trump nonsensically claims. Nothing makes that clearer than U.S. auto manufacturers’ recent announcements that they plan to increase production in Mexico – from Ford’s decision to make its new Mustang electric SUV in Mexico to GM closing U.S. auto plants while expanding production in Mexico.
One clear and important win for consumers, workers and the environment is the gutting of NAFTA’s Investor-State Dispute Settlement (ISDS) regime. ISDS empowers multinational corporations to go before panels of three corporate lawyers to demand unlimited compensation from taxpayers over claims that domestic laws, regulations and court rulings violate special investor privileges. The lawyers can award the corporations unlimited sums to be paid by taxpayers, including for the loss of expected future profits. To date, corporations have extracted almost $400 million from North American taxpayers after attacks on energy, water, timber and toxics policies. Largely eliminating ISDS will foreclose numerous corporate attacks on environmental, health and other public interest policies and send a signal worldwide to the many countries also eager to exit the illegitimate ISDS regime.
The new NAFTA is not a template for future agreements; rather, it sets the floor from which we will fight for good trade policies that put working people and the planet first.
Source: https://www.citizen.org/news/broad-bipartisan-congressional-votes-on-revised-nafta-cement-new-floor-for-trade-pacts-pharma-giveaways-extreme-investor-rights-in-past-pacts-are-out-better-labor-and-environmental-terms-in-after/
Excerpts from Remarks of Commissioner Rebecca Kelly Slaughter As Prepared for Delivery at FTC Workshop on Non-Compete Clauses in the Workplace Washington, DC January 9, 2020
https://www.ftc.gov/system/files/documents/public_statements/1561475/slaughter_-_noncompete_clauses_workshop_remarks_1-9-20.pdf
Addressing Non-Competes and Other Labor Competition Issues
A handful of states have exhibited great leadership in enforcing against unjust non-compete restrictions and legislating to limit their usage and enforcement. This is significant and important work, but it is still only a patchwork solution to a problem that is rampant throughout much of the country. Proposed federal legislation, particularly the bill introduced by Senators Murphy and Young, is a positive development, but we need not wait for legislation to tackle this issue head-on.
The workshop we are having today is a valuable mechanism for the FTC to gather information and learn more about the impact non-compete provisions have on firms, workers, and the economy. But information gathering should not be the end of this exercise; we should also take action. Without prejudging the outcome of a rulemaking proceeding on non-competes, I strongly support the FTC’s undertaking such an endeavor. And I want to acknowledge and express gratitude to Commissioner Chopra for his white-paper calling for the FTC to take advantage of our statutory authority to engage in rulemaking on unfair methods of competition. I also want to credit the many advocacy groups who came together to petition the Commission to undertake a non-compete rulemaking specifically.
* * *
Surveys have estimated that 16 to 18 percent of all U.S. workers are currently covered by a noncompete provision, meaning that they have restrictions on where they can work after they leave, lose, or are let go from their current job. This includes 12 percent of workers who earn less than $20,000 per year and 15 percent of those who make $20,000 to $40,000 per year.5 Sandwich makers at Jimmy John’s sandwich shops were prevented for a period of two years from working at competing businesses that earn 10 percent of their revenue from selling sandwiches.
One Jimmy John’s assistant manager left her job and transitioned to a completely different industry, where she did not make as much money as she could have in the restaurant business, out of fear that Jimmy John’s would sue her over the non-compete.6 Illinois Attorney General Madigan sued and obtained a settlement where Jimmy John’s agreed to eliminate this indefensible non-compete provision in its employment contracts, which notably applied not only to the three mile radius around the Jimmy John’s where the worker was employed but also to any sandwich business located within three miles of any Jimmy John’s shop anywhere in the country.
https://www.ftc.gov/system/files/documents/public_statements/1561475/slaughter_-_noncompete_clauses_workshop_remarks_1-9-20.pdf
Addressing Non-Competes and Other Labor Competition Issues
A handful of states have exhibited great leadership in enforcing against unjust non-compete restrictions and legislating to limit their usage and enforcement. This is significant and important work, but it is still only a patchwork solution to a problem that is rampant throughout much of the country. Proposed federal legislation, particularly the bill introduced by Senators Murphy and Young, is a positive development, but we need not wait for legislation to tackle this issue head-on.
The workshop we are having today is a valuable mechanism for the FTC to gather information and learn more about the impact non-compete provisions have on firms, workers, and the economy. But information gathering should not be the end of this exercise; we should also take action. Without prejudging the outcome of a rulemaking proceeding on non-competes, I strongly support the FTC’s undertaking such an endeavor. And I want to acknowledge and express gratitude to Commissioner Chopra for his white-paper calling for the FTC to take advantage of our statutory authority to engage in rulemaking on unfair methods of competition. I also want to credit the many advocacy groups who came together to petition the Commission to undertake a non-compete rulemaking specifically.
* * *
Surveys have estimated that 16 to 18 percent of all U.S. workers are currently covered by a noncompete provision, meaning that they have restrictions on where they can work after they leave, lose, or are let go from their current job. This includes 12 percent of workers who earn less than $20,000 per year and 15 percent of those who make $20,000 to $40,000 per year.5 Sandwich makers at Jimmy John’s sandwich shops were prevented for a period of two years from working at competing businesses that earn 10 percent of their revenue from selling sandwiches.
One Jimmy John’s assistant manager left her job and transitioned to a completely different industry, where she did not make as much money as she could have in the restaurant business, out of fear that Jimmy John’s would sue her over the non-compete.6 Illinois Attorney General Madigan sued and obtained a settlement where Jimmy John’s agreed to eliminate this indefensible non-compete provision in its employment contracts, which notably applied not only to the three mile radius around the Jimmy John’s where the worker was employed but also to any sandwich business located within three miles of any Jimmy John’s shop anywhere in the country.
NYT: Big banks having a ball
JPMorgan Chase, the country’s largest bank, reported record profits on Tuesday, and Citigroup posted its best results since before the 2008 financial crisis.
Chase earned $36.4 billion last year, up from $32.5 billion in 2018. It earned $8.5 billion in the final three months of last year, also a record. Citi could not quite match that performance, but its $19.4 billion profit for 2019 beat the previous year, and its $5 billion result for the year’s final quarter surpassed the profit it earned in the same period in 2018.
One reason for their success: the 2019 turnaround in the financial markets. The end of 2018 seemed to portend a reckoning as investors fretted over the trade war and the Federal Reserve’s plans to drain cash from the financial system. But rate cuts by the Fed last year helped markets creep steadily to new highs.
JPMorgan’s fixed-income trading revenues in the final quarter of 2019, for example, were 86 percent higher than in the same period a year earlier.
From: https://www.nytimes.com/2020/01/14/business/jpmorgan-citigroup-wells-fargo-earnings.html
JPMorgan Chase, the country’s largest bank, reported record profits on Tuesday, and Citigroup posted its best results since before the 2008 financial crisis.
Chase earned $36.4 billion last year, up from $32.5 billion in 2018. It earned $8.5 billion in the final three months of last year, also a record. Citi could not quite match that performance, but its $19.4 billion profit for 2019 beat the previous year, and its $5 billion result for the year’s final quarter surpassed the profit it earned in the same period in 2018.
One reason for their success: the 2019 turnaround in the financial markets. The end of 2018 seemed to portend a reckoning as investors fretted over the trade war and the Federal Reserve’s plans to drain cash from the financial system. But rate cuts by the Fed last year helped markets creep steadily to new highs.
JPMorgan’s fixed-income trading revenues in the final quarter of 2019, for example, were 86 percent higher than in the same period a year earlier.
From: https://www.nytimes.com/2020/01/14/business/jpmorgan-citigroup-wells-fargo-earnings.html
Reuters: Product liability case secrecy hurts consumers
Excerpt:
As Reuters has documented in earlier articles in this series, a thick blanket of secrecy covers product-liability litigation in the United States. In just a handful of cases over the past several decades, hundreds of thousands of people were killed or injured by defective products – cars, drugs, guns – while information about the risks was hidden from consumers and regulators, sometimes for years, behind broad protective orders.
These orders, though meant to protect specific information such as medical records and trade secrets, often give companies wide latitude to designate as confidential material exchanged between litigants in the pretrial discovery process – internal emails, data, research, meeting minutes, sworn depositions and the like. The secrecy typically persists for the life of the case, and long after, though court documents are, by law, presumed to be public.
In an analysis of some of the largest mass defective-product cases consolidated in federal courts over the past 20 years, Reuters found 55 in which judges sealed information concerning public health and safety. And among those, only three had protective orders containing language specifically allowing information exchanged by the litigants to be shared with regulators.
https://www.reuters.com/investigates/special-report/usa-courts-secrecy-regulators/
Excerpt:
As Reuters has documented in earlier articles in this series, a thick blanket of secrecy covers product-liability litigation in the United States. In just a handful of cases over the past several decades, hundreds of thousands of people were killed or injured by defective products – cars, drugs, guns – while information about the risks was hidden from consumers and regulators, sometimes for years, behind broad protective orders.
These orders, though meant to protect specific information such as medical records and trade secrets, often give companies wide latitude to designate as confidential material exchanged between litigants in the pretrial discovery process – internal emails, data, research, meeting minutes, sworn depositions and the like. The secrecy typically persists for the life of the case, and long after, though court documents are, by law, presumed to be public.
In an analysis of some of the largest mass defective-product cases consolidated in federal courts over the past 20 years, Reuters found 55 in which judges sealed information concerning public health and safety. And among those, only three had protective orders containing language specifically allowing information exchanged by the litigants to be shared with regulators.
https://www.reuters.com/investigates/special-report/usa-courts-secrecy-regulators/
DMN: Major Radio Broadcasters Lambast the DOJ for Siding with Irving Azoff’s GMR
In response to the Department of Justice (DOJ) filing an amicus brief in support of Irving Azoff and his long-standing legal battle with the Radio Music License Committee (RMLC), the National Association of Broadcasters (NAB) has filed a motion to issue their own amicus brief, which criticizes the DOJ’s brief.
The story continues here. https://www.digitalmusicnews.com/2020/01/16/radio-broadcasters-lambaste-doj-siding-irving-azoff/
In response to the Department of Justice (DOJ) filing an amicus brief in support of Irving Azoff and his long-standing legal battle with the Radio Music License Committee (RMLC), the National Association of Broadcasters (NAB) has filed a motion to issue their own amicus brief, which criticizes the DOJ’s brief.
The story continues here. https://www.digitalmusicnews.com/2020/01/16/radio-broadcasters-lambaste-doj-siding-irving-azoff/
Two views on proposed antitrust exemption for newspapers
H.R.2054 – The “Journalism Competition and Preservation Act of 2019” has the goal of providing “a temporary safe harbor for the publishers of online content to collectively negotiate with dominant online platforms regarding the terms on which their content may be distributed.” See https://www.congress.gov/bill/116th-congress/house-bill/2054/text?q=%7B%22search%22%3A%5B%22Hr+2054%22%5D%7D&r=1
Opinion is divided, even among journalists, about whether the legislation is a good idea of bad.
Politico editorializes against, at https://www.politico.com/magazine/story/2019/06/10/newspapers-embarrassing-lobbying-campaign-227100.
Here is an excerpt:
The newspaper industry has crawled up Capitol Hill once again to beg for an antitrust exemption it thinks it needs in its fight with Google and Facebook for advertising dollars.
Currently, Google and Facebook collect 73 percent of all digital advertising. Members of the news industry believe that the two tech giants have exploited their dominance of the web to unfairly collect digital dollars that rightfully belong to the news organizations. The Journalism Competition and Preservation Act of 2019, introduced in the House in April, and its Senate version, would allow print and online news companies to cartelize into a united front against Google and Facebook. Washington Post media columnist Margaret Sullivan cheered the bill last week and other newspapers (Chicago Tribune, Cleveland Plain Dealer, Columbus Dispatch, and others) have editorialized in favor of the exemption. Under the new law, which would sunset in four years, the cartel could collectively withhold content from Google, Facebook and other sites and negotiate the terms under which the two tech giants could use their work. Anti-trust law currently prohibits such industrywide collusion.
This proposed antitrust exemption—being pushed by the 2,000-plus member News Media Alliance trade group—is misguided on several levels. For one thing, it would be wrong to pass a law that would prop up one media sector by selectively bestowing special competitive privileges on it. The bill would not allow broadcasters to join the new cartel. The bill’s supporters also falsely blame Google and Facebook for the newspaper industry’s decay when circulation declines—especially when measured per capita—predate the emergence of the web.
Margaret Sullivan of the Washington Post disagrees, at https://www.washingtonpost.com/lifestyle/style/google-and-facebook-sucked-profits-from-newspapers-publishers-are-finally-resisting/2019/06/04/d5fa2aaa-86de-11e9-98c1-e945ae5db8fb_story.html. Here is an excerpt:
But a temporary waiver — while newspapers try to right themselves at a critical time — is more than a good idea. It’s essential.
When local newspapers fail, all kinds of bad things happen. Various studies have shown that civic engagement falls off, government spending goes up, and unreliable or made-up stories get a stronger foothold. We lose our village squares, our ways of making sense of the world with shared facts, and our ability to hold public officials to account.
Before more of the remaining papers turn into “toast,” as Buffett prophesied, they need some serious, immediate help.
As for Google and Facebook, if fewer ad dollars go their way in the service of local journalism’s survival, I’m confident they will manage somehow.
H.R.2054 – The “Journalism Competition and Preservation Act of 2019” has the goal of providing “a temporary safe harbor for the publishers of online content to collectively negotiate with dominant online platforms regarding the terms on which their content may be distributed.” See https://www.congress.gov/bill/116th-congress/house-bill/2054/text?q=%7B%22search%22%3A%5B%22Hr+2054%22%5D%7D&r=1
Opinion is divided, even among journalists, about whether the legislation is a good idea of bad.
Politico editorializes against, at https://www.politico.com/magazine/story/2019/06/10/newspapers-embarrassing-lobbying-campaign-227100.
Here is an excerpt:
The newspaper industry has crawled up Capitol Hill once again to beg for an antitrust exemption it thinks it needs in its fight with Google and Facebook for advertising dollars.
Currently, Google and Facebook collect 73 percent of all digital advertising. Members of the news industry believe that the two tech giants have exploited their dominance of the web to unfairly collect digital dollars that rightfully belong to the news organizations. The Journalism Competition and Preservation Act of 2019, introduced in the House in April, and its Senate version, would allow print and online news companies to cartelize into a united front against Google and Facebook. Washington Post media columnist Margaret Sullivan cheered the bill last week and other newspapers (Chicago Tribune, Cleveland Plain Dealer, Columbus Dispatch, and others) have editorialized in favor of the exemption. Under the new law, which would sunset in four years, the cartel could collectively withhold content from Google, Facebook and other sites and negotiate the terms under which the two tech giants could use their work. Anti-trust law currently prohibits such industrywide collusion.
This proposed antitrust exemption—being pushed by the 2,000-plus member News Media Alliance trade group—is misguided on several levels. For one thing, it would be wrong to pass a law that would prop up one media sector by selectively bestowing special competitive privileges on it. The bill would not allow broadcasters to join the new cartel. The bill’s supporters also falsely blame Google and Facebook for the newspaper industry’s decay when circulation declines—especially when measured per capita—predate the emergence of the web.
Margaret Sullivan of the Washington Post disagrees, at https://www.washingtonpost.com/lifestyle/style/google-and-facebook-sucked-profits-from-newspapers-publishers-are-finally-resisting/2019/06/04/d5fa2aaa-86de-11e9-98c1-e945ae5db8fb_story.html. Here is an excerpt:
But a temporary waiver — while newspapers try to right themselves at a critical time — is more than a good idea. It’s essential.
When local newspapers fail, all kinds of bad things happen. Various studies have shown that civic engagement falls off, government spending goes up, and unreliable or made-up stories get a stronger foothold. We lose our village squares, our ways of making sense of the world with shared facts, and our ability to hold public officials to account.
Before more of the remaining papers turn into “toast,” as Buffett prophesied, they need some serious, immediate help.
As for Google and Facebook, if fewer ad dollars go their way in the service of local journalism’s survival, I’m confident they will manage somehow.
Gottshall on sewer service in DC Landlord-Tenant Court
"Years have passed since the first day that I observed “roll call” in the District of Columbia Landlord and Tenant Branch, and I no longer wonder why some tenants in default fail to appear. I unequivocally know that service practices are unreliable and unfair. There are systemic due process violations occurring in the form of improper and ineffective service of process. Most troubling is that many defendants do not appear for court simply because they do not know about their case. Unreliable and unfair service practices are a national problem. They are not unique to the District of Columbia. At least three jurisdictions have recently attempted to address sewer service through litigation, resulting in multimillion dollar settlements for victims."
From: January 2018 Solving Sewer Service: Fighting Fraud with Technology Adrian Gottshall University of the District of Columbia , https://scholarworks.uark.edu/cgi/viewcontent.cgi?article=1034&context=alr
PBS NewsHour on new state laws going into effect across the country.
From NCAA athlete reimbursement, legalization of sports betting, legalization of marijuana and criminal justice reform to raising minimum wage and the cost of electric cars, state legislatures are having a major impact on the nation’s laws. The Hill’s Reid Wilson joins Lisa Desjardins to discuss specific changes as well as three broader trends to watch going forward.
https://www.youtube.com/watch?v=LAtFe9RnXgM
From NCAA athlete reimbursement, legalization of sports betting, legalization of marijuana and criminal justice reform to raising minimum wage and the cost of electric cars, state legislatures are having a major impact on the nation’s laws. The Hill’s Reid Wilson joins Lisa Desjardins to discuss specific changes as well as three broader trends to watch going forward.
https://www.youtube.com/watch?v=LAtFe9RnXgM
NYT on the travails for Huawei
Huawei is the world’s leading maker of equipment that powers cellphone networks and a champion of Beijing’s ambitions to build new, cutting-edge technology companies. Officials in the United States have long been worried that China’s government could use Huawei’s products to gather intelligence, an accusation the company has repeatedly denied.
Huawei’s year went from bad to worse when the United States added the company to an export blacklist in May. The move effectively restricted its ability to purchase American products crucial to its smartphones and telecom gear, weighing on revenue growth.
The blocks, though, have proven somewhat porous. The Trump administration has permitted sales to Huawei that are used to maintain existing mobile networks. Some of its American suppliers determined they could lawfully continue selling nonsensitive products to the company. In October, the Trump administration said it would issue export licenses to certain United States companies selling to Huawei, further easing pressures on its supply chain.
Even so, Mr. Xu indicated that the confrontation with the United States would continue to dampen growth and said he expected Huawei to remain on the blacklist in 2020.
“Difficulty is the prelude to greater success, and adversity the whetstone of an iron-willed team. The U.S. government’s campaign against Huawei is strategic and long-term,” he wrote.
Huawei, he said, will “need to go all out” to develop software and services that work with its smartphones. Analysts have worried about whether the company’s smartphones would remain competitive since it was blocked from working with Google. Huawei had to release its latest flagship smartphone, the Mate 30 series, without regular access to Google’s apps.
Mr. Xu said the company shipped a total of 240 million smartphones in 2019, an increase of almost 17 percent over the 206 million units it sold in 2018.
From https://www.nytimes.com/2019/12/30/business/huawei-revenue-growth.html
Huawei is the world’s leading maker of equipment that powers cellphone networks and a champion of Beijing’s ambitions to build new, cutting-edge technology companies. Officials in the United States have long been worried that China’s government could use Huawei’s products to gather intelligence, an accusation the company has repeatedly denied.
Huawei’s year went from bad to worse when the United States added the company to an export blacklist in May. The move effectively restricted its ability to purchase American products crucial to its smartphones and telecom gear, weighing on revenue growth.
The blocks, though, have proven somewhat porous. The Trump administration has permitted sales to Huawei that are used to maintain existing mobile networks. Some of its American suppliers determined they could lawfully continue selling nonsensitive products to the company. In October, the Trump administration said it would issue export licenses to certain United States companies selling to Huawei, further easing pressures on its supply chain.
Even so, Mr. Xu indicated that the confrontation with the United States would continue to dampen growth and said he expected Huawei to remain on the blacklist in 2020.
“Difficulty is the prelude to greater success, and adversity the whetstone of an iron-willed team. The U.S. government’s campaign against Huawei is strategic and long-term,” he wrote.
Huawei, he said, will “need to go all out” to develop software and services that work with its smartphones. Analysts have worried about whether the company’s smartphones would remain competitive since it was blocked from working with Google. Huawei had to release its latest flagship smartphone, the Mate 30 series, without regular access to Google’s apps.
Mr. Xu said the company shipped a total of 240 million smartphones in 2019, an increase of almost 17 percent over the 206 million units it sold in 2018.
From https://www.nytimes.com/2019/12/30/business/huawei-revenue-growth.html
Free representation for low income tenants facing eviction
Just two years ago, New York City became the first city in the nation to guarantee free representation to low-income residents facing eviction. Now, six other cities have followed suit, and several more jurisdictions, including the state of Massachusetts, have versions of such a law under consideration. This month alone, headlines in the Wall Street Journal, Next City, and CityLab tell the story:
These pieces amplify and give national context to the significant local coverage emanating from cities where this civil justice solution has been adopted. This fall, Philadelphia and Cleveland became the two most recent examples.
As Jared Brey wrote for Next City, “The laws are meant to correct a common imbalance in landlord-tenant courts, where the vast majority of landlords benefit from legal representation while tenants are left on their own to figure out what rights they have in trying to avoid being evicted.”
John Pollock of the National Coalition for a Civil Right to Counsel (NCCRC), and a source in the piece, cited the litany of common problems: “The eviction mill problem, the unfairness of the results, and most importantly the dire circumstances people face…You can lose virtually everything if you lose your house: Your kids, your job, you could wind up in jail. It just keeps going.”
To learn more about the civil right to counsel movement, including links to additional media coverage and a map showing the status of the movement by-issue and by-state, visit the NCCRC website.
Just two years ago, New York City became the first city in the nation to guarantee free representation to low-income residents facing eviction. Now, six other cities have followed suit, and several more jurisdictions, including the state of Massachusetts, have versions of such a law under consideration. This month alone, headlines in the Wall Street Journal, Next City, and CityLab tell the story:
- Is Tenants’ Right to Counsel On Its Way to Becoming Standard Practice?, Jared Brey in Next City, December 10, 2019.
- The Right to Eviction Counsel Is Gaining Momentum, Kriston Capps in CityLab, December 13, 2019.
- As Rents Rise, Cities Strengthen Tenants’ Ability to Fight Eviction, Laura Kusisto in The Wall Street Journal, December 26, 2019.
These pieces amplify and give national context to the significant local coverage emanating from cities where this civil justice solution has been adopted. This fall, Philadelphia and Cleveland became the two most recent examples.
As Jared Brey wrote for Next City, “The laws are meant to correct a common imbalance in landlord-tenant courts, where the vast majority of landlords benefit from legal representation while tenants are left on their own to figure out what rights they have in trying to avoid being evicted.”
John Pollock of the National Coalition for a Civil Right to Counsel (NCCRC), and a source in the piece, cited the litany of common problems: “The eviction mill problem, the unfairness of the results, and most importantly the dire circumstances people face…You can lose virtually everything if you lose your house: Your kids, your job, you could wind up in jail. It just keeps going.”
To learn more about the civil right to counsel movement, including links to additional media coverage and a map showing the status of the movement by-issue and by-state, visit the NCCRC website.
Amazon's Ring sued over 'lax security standards' leading to hacks
BY EMILY BIRNBAUM
Amazon and its home security subsidiary Ring are facing a federal lawsuit in California over allegations that its "lax security standards" led to a series of invasive and frightening hacks over the past year.
Read the full story here
Amazon's Ring sued over 'lax security standards' leading to hacks
BY EMILY BIRNBAUM
Amazon and its home security subsidiary Ring are facing a federal lawsuit in California over allegations that its "lax security standards" led to a series of invasive and frightening hacks over the past year.
Read the full story here
President Trump's tariffs on imports led to job losses and higher prices, a new study from the Federal Reserve has found.
See https://www.marketwatch.com/story/fed-study-finds-trump-tariffs-backfired-2019-12-27
"We find that tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices," the report by Fed economists Aaron Flaaen and Justin Pierce reads.
MarketWatch first reported the study, noting that 10 primary industries were hit by retaliatory tariffs and higher prices, including producers of magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, sawmills, audio and video equipment, pesticide, and computer equipment.
See https://www.marketwatch.com/story/fed-study-finds-trump-tariffs-backfired-2019-12-27
"We find that tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices," the report by Fed economists Aaron Flaaen and Justin Pierce reads.
MarketWatch first reported the study, noting that 10 primary industries were hit by retaliatory tariffs and higher prices, including producers of magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, sawmills, audio and video equipment, pesticide, and computer equipment.
William Greider died recently at age 83.
The following essay, originally published in 1981, is widely considered his most famous piece of writing. It caused a firestorm of controversy when it first appeared. David A. Stockman, the budget director for the incoming Reagan administration, spoke too freely with Greider about his doubts over Reagan’s supply-side theory of economics. Stockman was then, in his words, “taken to the woodshed” by the president.
The essay is here: https://www.theatlantic.com/magazine/archive/1981/12/the-education-of-david-stockman/305760/
The following essay, originally published in 1981, is widely considered his most famous piece of writing. It caused a firestorm of controversy when it first appeared. David A. Stockman, the budget director for the incoming Reagan administration, spoke too freely with Greider about his doubts over Reagan’s supply-side theory of economics. Stockman was then, in his words, “taken to the woodshed” by the president.
The essay is here: https://www.theatlantic.com/magazine/archive/1981/12/the-education-of-david-stockman/305760/
Housing Trust Funds and affordable housing in Virginia and Maryland
Housing advocates hope for larger cash infusions to the Virginia Housing Trust Fund, a low-interest loan program designed to create or preserve new affordable housing around the state.
Since lawmakers created it in 2013, they’ve generally only seeded it with a few million dollars each year. The latest biennial budget allocates about $9 million annually.
Activists have considered that insufficient to meet needs around the entire state, especially considering that some Northern Virginia localities manage much larger loan programs on their own. And Virginia lags behind many other states, including neighboring Maryland, where the “Rental Housing Works” program regularly approaches $20 million annually.
From: https://www.bizjournals.com/washington/news/2019/11/19/affordable-housing-hopes-abound-in-northern-va-as.html?ana=e_wash_bn_editorschoice&j=90400451&t=Breaking%20News&mkt_tok=eyJpIjoiWkdWbE5UQTROR000T0RVNCIsInQiOiJTaWNNT05ocXlZWWtSNko5VXZiSXgzZExkTG9vMmhyaHpkTEhDbGoyTE1xOE1tdlZ3SStQNGVVZlpUdDJSNTRqM2toWlwvb2JYZVliM3RZZnN0Q1A5MHhNWHpBYUVoUHpqXC9aOTlqUUlXVmdKNUd1dmg5NnBoeEY2cWozVkhVTVBXQU1KWk9QUmEwTDlmQnVPaDNjRmF0Zz09In0%3D
Housing advocates hope for larger cash infusions to the Virginia Housing Trust Fund, a low-interest loan program designed to create or preserve new affordable housing around the state.
Since lawmakers created it in 2013, they’ve generally only seeded it with a few million dollars each year. The latest biennial budget allocates about $9 million annually.
Activists have considered that insufficient to meet needs around the entire state, especially considering that some Northern Virginia localities manage much larger loan programs on their own. And Virginia lags behind many other states, including neighboring Maryland, where the “Rental Housing Works” program regularly approaches $20 million annually.
From: https://www.bizjournals.com/washington/news/2019/11/19/affordable-housing-hopes-abound-in-northern-va-as.html?ana=e_wash_bn_editorschoice&j=90400451&t=Breaking%20News&mkt_tok=eyJpIjoiWkdWbE5UQTROR000T0RVNCIsInQiOiJTaWNNT05ocXlZWWtSNko5VXZiSXgzZExkTG9vMmhyaHpkTEhDbGoyTE1xOE1tdlZ3SStQNGVVZlpUdDJSNTRqM2toWlwvb2JYZVliM3RZZnN0Q1A5MHhNWHpBYUVoUHpqXC9aOTlqUUlXVmdKNUd1dmg5NnBoeEY2cWozVkhVTVBXQU1KWk9QUmEwTDlmQnVPaDNjRmF0Zz09In0%3D
COMMENTARY
Gig Worker Law: Not as Simple as ABC
By Eve Wagner
AB 5, the bill whose purported mission was to restore protections to workers such as ride-share drivers and freelance writers, is now being decried by some as a job-killer.
Read More https://link.law.com/click/18979364.13524/aHR0cHM6Ly93d3cubGF3LmNvbS90aGVyZWNvcmRlci8yMDE5LzEyLzIzL2dpZy13b3JrZXItbGF3LW5vdC1hcy1zaW1wbGUtYXMtYWJjLz9rdz1HaWclMjBXb3JrZXIlMjBMYXc6JTIwTm90JTIwYXMlMjBTaW1wbGUlMjBhcyUyMEFCQyZ1dG1fc291cmNlPWVtYWlsJnV0bV9tZWRpdW09ZW5sJnV0bV9jYW1wYWlnbj1pbnByYWN0aWNlYWxlcnQmdXRtX2NvbnRlbnQ9MjAxOTEyMjYmdXRtX3Rlcm09Y2E/593aad6e24b2d66c428b4da1De9aa56f8
Gig Worker Law: Not as Simple as ABC
By Eve Wagner
AB 5, the bill whose purported mission was to restore protections to workers such as ride-share drivers and freelance writers, is now being decried by some as a job-killer.
Read More https://link.law.com/click/18979364.13524/aHR0cHM6Ly93d3cubGF3LmNvbS90aGVyZWNvcmRlci8yMDE5LzEyLzIzL2dpZy13b3JrZXItbGF3LW5vdC1hcy1zaW1wbGUtYXMtYWJjLz9rdz1HaWclMjBXb3JrZXIlMjBMYXc6JTIwTm90JTIwYXMlMjBTaW1wbGUlMjBhcyUyMEFCQyZ1dG1fc291cmNlPWVtYWlsJnV0bV9tZWRpdW09ZW5sJnV0bV9jYW1wYWlnbj1pbnByYWN0aWNlYWxlcnQmdXRtX2NvbnRlbnQ9MjAxOTEyMjYmdXRtX3Rlcm09Y2E/593aad6e24b2d66c428b4da1De9aa56f8
At a time when germs are growing more resistant to common antibiotics, many companies that are developing new versions of the drugs are hemorrhaging money and going out of business, gravely undermining efforts to contain the spread of deadly, drug-resistant bacteria.
Antibiotic start-ups like Achaogen and Aradigm have gone belly up in recent months, pharmaceutical behemoths like Novartis and Allergan have abandoned the sector and many of the remaining American antibiotic companies are teetering toward insolvency. One of the biggest developers of antibiotics, Melinta Therapeutics, recently warned regulators it was running out of cash.
Experts say the grim financial outlook for the few companies still committed to antibiotic research is driving away investors and threatening to strangle the development of new lifesaving drugs at a time when they are urgently needed.
From: https://www.nytimes.com/2019/12/25/health/antibiotics-new-resistance.html
Antibiotic start-ups like Achaogen and Aradigm have gone belly up in recent months, pharmaceutical behemoths like Novartis and Allergan have abandoned the sector and many of the remaining American antibiotic companies are teetering toward insolvency. One of the biggest developers of antibiotics, Melinta Therapeutics, recently warned regulators it was running out of cash.
Experts say the grim financial outlook for the few companies still committed to antibiotic research is driving away investors and threatening to strangle the development of new lifesaving drugs at a time when they are urgently needed.
From: https://www.nytimes.com/2019/12/25/health/antibiotics-new-resistance.html
Re: Air B&B:
The Third Court of Appeals found the City of Austin’s Short Term Rental Ordinance unconstitutional for retroactively banning Type II “non-owner occupied vacation rentals” and by violating the fundamental right to assembly guaranteed under the Texas Constitution.
To read the Third Court of Appeals opinion in full, please visit:
https://files.texaspolicy.com/uploads/2019/11/27091358/STR-Opinion.pdf
The Third Court of Appeals found the City of Austin’s Short Term Rental Ordinance unconstitutional for retroactively banning Type II “non-owner occupied vacation rentals” and by violating the fundamental right to assembly guaranteed under the Texas Constitution.
To read the Third Court of Appeals opinion in full, please visit:
https://files.texaspolicy.com/uploads/2019/11/27091358/STR-Opinion.pdf
Lawsuit alleges turkey companies conspired to keep prices high
By Leah Douglas, December 19, 2019
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A new class-action lawsuit brought by two food distributors alleges that the country’s top turkey companies conspired for most of the past decade to raise turkey prices. The allegations mirror those brought in recent years against beef, pork, and chicken companies, and all revolve around the use of reports on industry production and pricing made by a secretive data company called Agri Stats.
This latest complaint, filed Wednesday in U.S. District Court in the Northern District of Illinois, alleges that between 2010 and 2017, the country’s largest turkey companies conspired to artificially raise turkey prices by coordinating production cuts. As a result, turkey prices reached an “unprecedented level.”
The suit was brought by Olean Wholesale Grocery Cooperative and John Gross and Company, two food distributors and wholesalers based in New York and Pennsylvania, respectively, who bought turkey from the defendants during the time period covered by the suit.
The defendants in the case control approximately 80 percent of the market for turkeys, and the top four — Cargill, Hormel, Butterball, and Farbest — control more than half the market, according to the complaint. Other defendants include Agri Stats, Foster Farms, Kraft Heinz, Hormel Foods, and Tyson Foods.
According to the complaint, the companies coordinated to raise prices at industry conventions, through public discussion of production cuts, and by analyzing competitor data contained in Agri Stats reports. Those reports, which are available only on a subscription basis to industry insiders, can contain proprietary information about sales, production levels and capacity, and wages paid to farmers.
From https://thefern.org/ag_insider/lawsuit-alleges-turkey-companies-conspired-to-keep-prices-high/
By Leah Douglas, December 19, 2019
FacebookTwitterEmail
A new class-action lawsuit brought by two food distributors alleges that the country’s top turkey companies conspired for most of the past decade to raise turkey prices. The allegations mirror those brought in recent years against beef, pork, and chicken companies, and all revolve around the use of reports on industry production and pricing made by a secretive data company called Agri Stats.
This latest complaint, filed Wednesday in U.S. District Court in the Northern District of Illinois, alleges that between 2010 and 2017, the country’s largest turkey companies conspired to artificially raise turkey prices by coordinating production cuts. As a result, turkey prices reached an “unprecedented level.”
The suit was brought by Olean Wholesale Grocery Cooperative and John Gross and Company, two food distributors and wholesalers based in New York and Pennsylvania, respectively, who bought turkey from the defendants during the time period covered by the suit.
The defendants in the case control approximately 80 percent of the market for turkeys, and the top four — Cargill, Hormel, Butterball, and Farbest — control more than half the market, according to the complaint. Other defendants include Agri Stats, Foster Farms, Kraft Heinz, Hormel Foods, and Tyson Foods.
According to the complaint, the companies coordinated to raise prices at industry conventions, through public discussion of production cuts, and by analyzing competitor data contained in Agri Stats reports. Those reports, which are available only on a subscription basis to industry insiders, can contain proprietary information about sales, production levels and capacity, and wages paid to farmers.
From https://thefern.org/ag_insider/lawsuit-alleges-turkey-companies-conspired-to-keep-prices-high/
As States open the door to sports betting, the betting market has grown, and DraftKings Inc. has an agreement that would take the sports-betting company public
Best known for its fantasy-sports games, DraftKings said Monday it will merge with Diamond Eagle Acquisition Corp., which trades on the Nasdaq and is backed by former MGM movie studio Chief Executive Harry Sloan. Diamond Eagle is what is known as a blank-check company, formed in part to find another company that it would combine with or acquire.
DraftKings also struck a deal to merge with gambling-technology provider SBTech. Both combinations are expected to be completed in the first half of next year, the company said.
Several investors, including funds managed by Capital Research & Management Co., Wellington Management Co. and Franklin Templeton, have agreed to invest $304 million in a class of the combined company’s stock.
DraftKings expects the combined company to have a market value of $3.3 billion at closing and said it would have more than $500 million in unrestricted cash on hand.
A number of states have moved to authorize wagers on sports after a Supreme Court decision last year opened the door to those bets. Twenty states and the District of Columbia have legalized sports betting.
DraftKings estimates the size of the market for online sports betting and other games, such as those typically found in casinos, could reach about $40 billion in the U.S., according to a recent investor presentation. It expects a potential revenue opportunity from online gambling of $2.9 billion to $4.7 billion, the presentation showed.
From: https://www.wsj.com/articles/draftkings-to-go-public-following-merger-with-diamond-eagle-sbtech-11577109747?mod=business_lead_pos13
Best known for its fantasy-sports games, DraftKings said Monday it will merge with Diamond Eagle Acquisition Corp., which trades on the Nasdaq and is backed by former MGM movie studio Chief Executive Harry Sloan. Diamond Eagle is what is known as a blank-check company, formed in part to find another company that it would combine with or acquire.
DraftKings also struck a deal to merge with gambling-technology provider SBTech. Both combinations are expected to be completed in the first half of next year, the company said.
Several investors, including funds managed by Capital Research & Management Co., Wellington Management Co. and Franklin Templeton, have agreed to invest $304 million in a class of the combined company’s stock.
DraftKings expects the combined company to have a market value of $3.3 billion at closing and said it would have more than $500 million in unrestricted cash on hand.
A number of states have moved to authorize wagers on sports after a Supreme Court decision last year opened the door to those bets. Twenty states and the District of Columbia have legalized sports betting.
DraftKings estimates the size of the market for online sports betting and other games, such as those typically found in casinos, could reach about $40 billion in the U.S., according to a recent investor presentation. It expects a potential revenue opportunity from online gambling of $2.9 billion to $4.7 billion, the presentation showed.
From: https://www.wsj.com/articles/draftkings-to-go-public-following-merger-with-diamond-eagle-sbtech-11577109747?mod=business_lead_pos13
WSJ investigation says Huawei Staff Help Uganda Government Spy on People
Could Huawei similarly aid malign forces in the U.S.?
WSJ reporters on the ground in Uganda uncover how Chinese telecom giant Huawei is providing surveillance tools that African governments use to stifle dissent. Techniques include street cameras, cell phone hacking, and encryption breaking, all involving support from Huawei staff. The implication is that Huawei could similarly help malign forces in the U.S. In the U.S. the malign force could be China itself. DAR
The WSJ video is here: https://www.wsj.com/video/wsj-investigation-huawei-staff-help-governments-to-spy-on-people/0CE986A8-9975-4CB6-BB9C-031A24540E93.html
Could Huawei similarly aid malign forces in the U.S.?
WSJ reporters on the ground in Uganda uncover how Chinese telecom giant Huawei is providing surveillance tools that African governments use to stifle dissent. Techniques include street cameras, cell phone hacking, and encryption breaking, all involving support from Huawei staff. The implication is that Huawei could similarly help malign forces in the U.S. In the U.S. the malign force could be China itself. DAR
The WSJ video is here: https://www.wsj.com/video/wsj-investigation-huawei-staff-help-governments-to-spy-on-people/0CE986A8-9975-4CB6-BB9C-031A24540E93.html
NY Times editorial critique of USDOJ Antitrust Division's Delrahim:
Why Is the Justice Department Treating T-Mobile Like a Client?
Antitrust officials are supposed to prevent problematic corporate mergers. Instead, they’re helping shepherd deals.
By The Editorial Board https://www.nytimes.com/2019/12/20/opinion/justice-department-antitrust-sprint-tmobile.html?searchResultPosition=3
From the editorial:
The Times reported on Thursday that Mr. Delrahim worked assiduously this past summer to clear the way for the merger of two rival mobile phone companies, T-Mobile and Sprint, by helping to arrange for the two companies to sell some assets to a third company, Dish. Mr. Delrahim behaved like a man who wanted to make a deal. In text messages, which were disclosed as part of a related court case, he repeatedly coaxed and cajoled executives at the three companies, as well as federal officials who had the ability to block the merger.
Mr. Delrahim has cast his actions as a defense of the public interest. In announcing that the Justice Department had approved the merger in July, he said that he had been prepared to go to court to block the merger had Dish not participated in the agreement. The asset sales are intended to allow Dish to emerge as a viable new mobile phone company, filling the void when Sprint departs the marketplace.
But Mr. Delrahim was negotiating with himself. His campaign to secure Dish’s participation amounted to a concerted effort to satisfy his own objections to the proposed deal. Rather than defending the public interest, he was working to defend T-Mobile’s interests.
And the deeper problem is that Mr. Delrahim’s behavior was not exceptional.
FCC quizzed over Sprint, T-Mobile merger approval
CPI
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December 17, 2019The Democratic chairmen of two key House committees are questioning whether the government flouted “appropriate” procedures when it recently approved the $26 billion merger between T-Mobile and Sprint, green-lighting one of the largest telecom deals in recent history.
House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) and Judiciary Committee Chairman Jerold Nadler (D-N.Y.) on Monday accused the Federal Communications Commission (FCC) of engaging in shady and potentially rule-breaking behavior ahead of its decision to approve the merger along party lines earlier this year.
“We have serious concerns regarding the troubling lack of transparency and an apparent lack of appropriate process leading up to the Federal Communications Commission’s approval of T-Mobile U.S., Inc.’s purchase of Sprint Corporation,” Pallone and Nadler said in a letter to FCC Chairman Ajit Pai, a Republican.
Several critics, including Democratic FCC Commissioner Jessica Rosenworcel and a coalition of advocacy groups, have claimed the FCC should have opened up the deal to public comment before voting for it 3-2 in October, a few months after the Department of Justice (DOJ) approved of the merger under an array of new conditions. And the Democrats, citing Rosenworcel, are accusing the agency of replacing initial evidence with analysis that “downplay[ed] the competitive harms of the merger” at the last minute.
“To the extent that changes were made to the draft decision based on data supplied by the parties after the draft was first circulated to the Commissioners, we are concerned that there was insufficient notice and opportunity for public review and comment,” Pallone and Nadler wrote.
Industry watchers have said the FCC’s process around approving the T-Mobile-Sprint merger was abnormal, with the Republicans offering their blessing even before any public proposal had been circulated.
Pallone and Nadler wrote that the FCC should have opened up their proposal to review after DOJ had substantially changed the terms of the deal. But the Republican-controlled agency did not seek any additional comment.
They’re further accusing the FCC of failing to disclose details about conversations during that period of time between T-Mobile representatives and FCC commissioners.
T-Mobile representatives met with FCC commissioners 25 times between July and October, but the agency has not offered a detailed account of what was discussed in those “ex-parte” meetings, according to the letter.
The Democrats are asking the FCC to produce documents about a potential public comment period and questioning whether the agency is investigating T-Mobile’s compliance with its “ex-parte” rules.
Full Content: The Hill https://thehill.com/policy/technology/474776-key-house-dems-question-whether-t-mobile-sprint-merger-went-through
DAR Comment: USDOJ policy published in 2004 on "fix-it-first" merger remedies
From https://www.justice.gov/atr/page/file/1175136/download [footnotes not included]
A Fix-It-First Remedy Is Acceptable if It Eliminates the Competitive Harm
A fix-it-first remedy is a structural remedy that the parties implement and the Division accepts before a merger is consummated.36 A fix-it-first remedy eliminates the Division’s antitrust concerns and therefore the need to file a case.37
The Division does not discourage acceptable fix-it-first remedies. If parties express an interest in pursuing a fix-it-first remedy that satisfies the conditions discussed below, the Division will consider the proposal. Indeed, in certain circumstances, a fix-it-first remedy may restore competition to the market more quickly and effectively than would a decree. This would be particularly important, for example, where a rapid divestiture would prevent asset dissipation or ensure the resolution of competitive concerns before an upcoming bid.
If an acceptable fix-it-first remedy can be implemented, the Division will exercise its Executive Branch prerogative to forego filing a case and conclude its investigation without imposing additional obligations on the parties.
A fix-it-first remedy restores premerger competition, removes the need for litigation, allows the Division to use its resources more efficiently, and saves society from incurring real costs. Moreover, a fix-it-first remedy may provide more flexibility in fashioning the appropriate divestiture.
Because different purchasers may require different sets of assets to be competitive, a fix-it-first remedy allows the assets to be tailored to a specific proposed purchaser. A consent decree, in contrast, must identify all of the assets necessary for effective competition by any potentially acceptable purchaser.
The Division will accept a fix-it-first remedy when it eliminates the competitive harm otherwise arising from the proposed merger. The same internal review is given to fix-it-first remedies as is given to consent decrees. Before exercising its prerogative not to file a case, the Division must be satisfied that the fix-it-first remedy will protect the market from any adverse competitive effects attributable to the proposed transaction.
A fix-it-first remedy will not eliminate the Division’s concerns unless the Division is confident that the proposed fix will indeed preserve the premerger level of competition. In addition, Antitrust Division attorneys reviewing fix-it-first remedies should carefully screen the proposed divestiture for any relationships between the seller and the purchaser, since the parties have, in essence, self selected the purchaser.
An acceptable fix-it-first remedy should contain no less substantive relief than would be sought if a case were filed.38 The Division, therefore, needs to conduct an investigation sufficient to determine both the nature and extent of the likely competitive harm and whether the proposed fix-it-first remedy will resolve it.39
The ACLU on the FISA Court, circa 2013
[T]he record suggests that the government has felt free to make bolder, less-supportable arguments before the secret FISA Court than it’s willing to make before real courts that are open to the public.
It has often been pointed out that the FISA Court is not a normal court, a big reason being that all of its proceedings are ex parte (that is, there is no adversarial proceeding, the court only hears from one side) and that it operates within an ocean of secrecy and compartmentalization.
From: https://www.aclu.org/blog/national-security/privacy-and-surveillance/fisa-courts-problems-run-deep-and-more-tinkering
(November, 2013)
[T]he record suggests that the government has felt free to make bolder, less-supportable arguments before the secret FISA Court than it’s willing to make before real courts that are open to the public.
It has often been pointed out that the FISA Court is not a normal court, a big reason being that all of its proceedings are ex parte (that is, there is no adversarial proceeding, the court only hears from one side) and that it operates within an ocean of secrecy and compartmentalization.
From: https://www.aclu.org/blog/national-security/privacy-and-surveillance/fisa-courts-problems-run-deep-and-more-tinkering
(November, 2013)
Government tax policies that help small business? Two views:
US Senate Passes 1-Year Extension of Excise Tax Relief for craft brewers, Legislation Advances to President Trump
The U.S. Senate today passed a tax extender package that includes a one-year extension of the tax relief in the Craft Beverage Modernization and Tax Reform Act (CMBTRA) that was slated to expire at the end of 2019.
Passage through the Senate comes a couple of days after the tax package passed the House of Representatives and in the final hours of the legislative year. The legislation now awaits President Donald Trump to sign it into law.
“We are pleased Congress has come together to prevent a $130 million tax increase on our nation’s thriving beer industry, which supports more than 2.1 million good-paying jobs,” Jim McGreevy, president and CEO of the Beer Institute, wrote in an email to the trade group’s members. “As we enter 2020, we will continue fighting for excise tax relief permanency with the popular bipartisan, bicameral Craft Beverage Modernization and Tax Relief Act.”
The extension of CBMTRA — which was passed into law in 2017 as part of the Tax Cuts and Jobs Act but scheduled to sunset at the end of 2019 — had been a priority for alcohol industry trade groups such as the BI, Brewers Association (BA), Distilled Spirits Council of the United States (DISCUS), the American Craft Spirits Association, Wine America, the Wine Institute, and the U.S. Association of Cider Makers.
If signed by President Trump, the extender would keep in place through December 31, 2020, an excise tax rate of $3.50 per barrel (a reduction from $7 per barrel) on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually.
The legislation also sets the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and beer importers, while maintaining the $18 per barrel excise tax for brewers producing more than 6 million barrels.
The savings can be significant, especially for companies who are struggling with slowing growth. For example, a beer company making 20,000 barrels annually, its federal excise tax bill would be cut in half from $140,000 to $70,000.
From: https://www.brewbound.com/news/us-senate-passes-1-year-extension-of-excise-tax-relief-legislation-advances-to-president-trump
US Senate Passes 1-Year Extension of Excise Tax Relief for craft brewers, Legislation Advances to President Trump
- Justin Kendall
- Dec. 19, 2019 at 3:04 PM
The U.S. Senate today passed a tax extender package that includes a one-year extension of the tax relief in the Craft Beverage Modernization and Tax Reform Act (CMBTRA) that was slated to expire at the end of 2019.
Passage through the Senate comes a couple of days after the tax package passed the House of Representatives and in the final hours of the legislative year. The legislation now awaits President Donald Trump to sign it into law.
“We are pleased Congress has come together to prevent a $130 million tax increase on our nation’s thriving beer industry, which supports more than 2.1 million good-paying jobs,” Jim McGreevy, president and CEO of the Beer Institute, wrote in an email to the trade group’s members. “As we enter 2020, we will continue fighting for excise tax relief permanency with the popular bipartisan, bicameral Craft Beverage Modernization and Tax Relief Act.”
The extension of CBMTRA — which was passed into law in 2017 as part of the Tax Cuts and Jobs Act but scheduled to sunset at the end of 2019 — had been a priority for alcohol industry trade groups such as the BI, Brewers Association (BA), Distilled Spirits Council of the United States (DISCUS), the American Craft Spirits Association, Wine America, the Wine Institute, and the U.S. Association of Cider Makers.
If signed by President Trump, the extender would keep in place through December 31, 2020, an excise tax rate of $3.50 per barrel (a reduction from $7 per barrel) on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually.
The legislation also sets the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and beer importers, while maintaining the $18 per barrel excise tax for brewers producing more than 6 million barrels.
The savings can be significant, especially for companies who are struggling with slowing growth. For example, a beer company making 20,000 barrels annually, its federal excise tax bill would be cut in half from $140,000 to $70,000.
From: https://www.brewbound.com/news/us-senate-passes-1-year-extension-of-excise-tax-relief-legislation-advances-to-president-trump
Brookings opinion: Who benefits from the “craft beverage” tax cuts? Mostly foreign and industrial producers.Adam LooneyWednesday, January 3, 2018
Adam LooneyJoseph A. Pechman Senior Fellow - Economic Studies, Urban-Brookings Tax Policy Center
The Republican tax bill includes deep cuts to alcohol excise taxes that are widely described as benefiting small “craft” brewers and distillers. In fact, most of the tax cuts go not to the little guys, but to big producers.
According to the Joint Committee on Taxation, these tax cuts, which are rolled up in a part of the bill called the “Craft Beverage Modernization and Tax Reform Act,” reduce total alcohol revenues by $4.2 billion over the two years they are in effect, a cut equal to about 20 percent of total alcohol excise tax revenues in those years.
The frequent assertion that the tax cut is for craft brewers and distillers is misleading.
The new law reduces the excise tax rate on the first 60,000 barrels of beer by 50 percent (from $7 to $3.50) no matter how small or large the brewer. It cuts the tax on the first 100,000 proof gallons of distilled spirits by 80 percent (from $13.50 to $2.70), and by 40 percent on the first 30,000 gallons of most wine (from $0.17 to $0.07 after the increased wine credit). Because these small producers are targeted with the biggest cuts, they must represent most of the revenue, right? Not true.
Small brewers (those producing less than 60,000 barrels) only produced 4.6 percent of all U.S.-made beer in 2016 (about 8 million barrels). And because they already benefited from a lower $7 per barrel tax, while most beer was taxed at $18/barrel, they accounted for only about $56 million in taxes or 1.5 percent of total beer tax revenues (including imports).[1] Cutting their taxes in half should only cost about $28 million.
The story is similar for distilled spirits. Small producers that make less than 100,000 proof gallons per year represent only 1.5 percent of all domestic taxable distilled spirits production. Collectively, they paid about 1 percent of all taxes on distilled spirits in 2016—or about $61 million in excise taxes.[2] Even with an 80 percent tax cut, that’s only $49 million.
https://www.brookings.edu/research/who-benefits-from-the-craft-beverage-tax-cuts-mostly-foreign-and-industrial-producers/
Adam LooneyJoseph A. Pechman Senior Fellow - Economic Studies, Urban-Brookings Tax Policy Center
The Republican tax bill includes deep cuts to alcohol excise taxes that are widely described as benefiting small “craft” brewers and distillers. In fact, most of the tax cuts go not to the little guys, but to big producers.
According to the Joint Committee on Taxation, these tax cuts, which are rolled up in a part of the bill called the “Craft Beverage Modernization and Tax Reform Act,” reduce total alcohol revenues by $4.2 billion over the two years they are in effect, a cut equal to about 20 percent of total alcohol excise tax revenues in those years.
The frequent assertion that the tax cut is for craft brewers and distillers is misleading.
- For every $20 of alcohol tax cuts in the legislation, only about $1 actually goes to the true craft brewers or small distillers.
- Most of the revenue—the other $19—goes to larger producers and to importers. This is largely because of new or expanded opportunities to evade or avoid the limits on what qualifies for the lowest tax rates. For instance, it’s plausible that a third to one half of all distilled spirits sold in the U.S. will qualify for the reduced rate.
- By allowing alcohol from foreign and large domestic producers to be passed off as “craft,” certain parts of the legislation may put America’s real small brewers and distillers at a competitive disadvantage.
The new law reduces the excise tax rate on the first 60,000 barrels of beer by 50 percent (from $7 to $3.50) no matter how small or large the brewer. It cuts the tax on the first 100,000 proof gallons of distilled spirits by 80 percent (from $13.50 to $2.70), and by 40 percent on the first 30,000 gallons of most wine (from $0.17 to $0.07 after the increased wine credit). Because these small producers are targeted with the biggest cuts, they must represent most of the revenue, right? Not true.
Small brewers (those producing less than 60,000 barrels) only produced 4.6 percent of all U.S.-made beer in 2016 (about 8 million barrels). And because they already benefited from a lower $7 per barrel tax, while most beer was taxed at $18/barrel, they accounted for only about $56 million in taxes or 1.5 percent of total beer tax revenues (including imports).[1] Cutting their taxes in half should only cost about $28 million.
The story is similar for distilled spirits. Small producers that make less than 100,000 proof gallons per year represent only 1.5 percent of all domestic taxable distilled spirits production. Collectively, they paid about 1 percent of all taxes on distilled spirits in 2016—or about $61 million in excise taxes.[2] Even with an 80 percent tax cut, that’s only $49 million.
https://www.brookings.edu/research/who-benefits-from-the-craft-beverage-tax-cuts-mostly-foreign-and-industrial-producers/
FOR IMMEDIATE RELEASE
Thursday, December 19, 2019
Justice Department Will Move to Significantly Modify and Extend Consent Decree with Live Nation/Ticketmaster
Justice Department and Live Nation Agree to a Number of Significant Changes, To Extend by Five and Half Years the 2010 Live Nation/Ticketmaster Final Judgment; Live Nation to Pay Costs and Fees to Taxpayers for EnforcementThe Department of Justice’s Antitrust Division will file a petition asking the court to clarify and extend by five and a half years the Final Judgment entered by the Court in United States v. Ticketmaster Entertainment, Inc., et al., Case No. 1:10-cv-00139-RMC (July 30, 2010). This is the most significant enforcement action of an existing antitrust decree by the Department in 20 years.
The 2010 Final Judgment permitted Live Nation to merge with Ticketmaster but prohibited the company from retaliating against concert venues for using another ticketing company, threatening concert venues, or undertaking other specified actions against concert venues for ten years.
Despite the prohibitions in the Final Judgment, Live Nation repeatedly and over the course of several years engaged in conduct that, in the Department’s view, violated the Final Judgment. To put a stop to this conduct and to remove any doubt about defendants’ obligations under the Final Judgment going forward, the Department and Live Nation have agreed to modify the Final Judgment to make clear that such conduct is prohibited. In addition, Live Nation has agreed to extend the term of the Final Judgment by five and a half years, which will allow concert venues and American consumers to get the benefit of the relief the Department bargained for in the original settlement. The proposed modifications to the Final Judgment will also help deter additional violations and allow for easier detection and enforcement if future violations occur.
“When Live Nation and Ticketmaster merged in 2010, the Department of Justice and the federal court imposed conditions on the company in order to preserve and promote ticketing competition.” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Today’s enforcement action including the addition of language on retaliation and conditioning will ensure that American consumers get the benefit of the bargain that the United States and Live Nation agreed to in 2010. Merging parties will be held to their promises and the Department will not tolerate transgressions that hurt the American consumer.”
The Department today filed a motion in the U..S. District Court for the District of Columbia to reopen the docket in the underlying action, a necessary step towards filing the petition to clarify and extend the Final Judgment. The Department will file that petition once leave is granted by the court.
The clarifications to the Final Judgment the parties will seek include provisions that:
- Live Nation may not threaten to withhold concerts from a venue if the venue chooses a ticketer other than Ticketmaster;
- A threat by Live Nation to withhold any concerts because a venue chooses another ticketer is a violation of the Final Judgment;
- Withholding any concerts in response to a venue choosing a ticketer other than Ticketmaster is a violation by Live Nation of the Final Judgment;
- The Antitrust Division will appoint an independent monitor to investigate and report on Live Nation’s compliance with the Final Judgment;
- Live Nation will appoint an internal antitrust compliance officer and conduct regular internal training to ensure its employees fully comply with the Final Judgment;
- Live Nation will provide notice to current or potential venue customers of its ticketing services of the clarified and extended Final Judgment; and
- Live Nation is subject to an automatic penalty of $1,000,000 for each violation of the Final Judgment.
- Live Nation will pay costs and fees for the Department’s investigation and enforcement.
Along with the provisions described above, the proposed modifications to the Final Judgment, if approved by the court, include additional safeguards to ensure Live Nation does not punish venues that want to work with competing ticketers, and importantly, extends the term of the Final Judgment for five and half years.
Live Nation Entertainment Inc. is a Delaware corporation headquartered in Beverly Hills, California. It claims to be the largest live entertainment company in the world, active in three principal segments: concert promotion, ticketing services, and sponsorship & advertising. In 2018, Live Nation’s revenues were approximately $10..8 billion.
DAR comment: There has been a lot of expert comment criticizing the USDOJ actions as insufficient.
Feel free to use gaslight or incandescent bulbs:
From the NYT:
The Trump administration announced that it would block a rule designed to phase out older incandescent bulbs and require Americans to use energy-efficient light bulbs.
In announcing the move, the secretary of energy, Dan Brouillette, who is a former auto lobbyist, said the administration had chosen “to protect consumer choice by ensuring that the American people do not pay the price for unnecessary overregulation from the federal government.” The new rule was unnecessary, he said, because innovation and technology are already “increasing the efficiency and affordability of light bulbs without federal government intervention.”
The rule, which would have gone into effect on Jan. 1, was required under a law passed in 2007 during the administration of President George W. Bush.
https://www.nytimes.com/2019/12/20/climate/trump-light-bulb-rollback.html?action=click&module=Latest&pgtype=Homepage
From the NYT:
The Trump administration announced that it would block a rule designed to phase out older incandescent bulbs and require Americans to use energy-efficient light bulbs.
In announcing the move, the secretary of energy, Dan Brouillette, who is a former auto lobbyist, said the administration had chosen “to protect consumer choice by ensuring that the American people do not pay the price for unnecessary overregulation from the federal government.” The new rule was unnecessary, he said, because innovation and technology are already “increasing the efficiency and affordability of light bulbs without federal government intervention.”
The rule, which would have gone into effect on Jan. 1, was required under a law passed in 2007 during the administration of President George W. Bush.
https://www.nytimes.com/2019/12/20/climate/trump-light-bulb-rollback.html?action=click&module=Latest&pgtype=Homepage
Modern Healthcase opinion:
December 19, 2019 05:06 PM UPDATED 15 HOURS AGO
ACA's continued uncertain fate seen as a Republican win
opinion by SHELBY LIVINGSTON
The 5th Circuit Court of Appeals' reluctance to decide the fate of the Affordable Care Act cuts a break for the Republican lawmakers who sought to topple it while sowing uncertainty into healthcare markets that only recently found their footing.
The 5th Circuit ruled 2-1 on Wednesday that the already toothless individual mandate is unconstitutional but remanded the case back to a federal judge in Texas to determine how much of the landmark healthcare law must fall along with it. U.S. District Judge Reed O'Connor previously struck down the ACA in entirety.
What some observers saw as the appellate court's unwillingness to get its hands dirty ensures that the lawsuit, known as Texas v. U.S., will drag on beyond the 2020 presidential election. While the ACA remains the law of the land, the uncertainty around its future could once again wreak havoc on the individual health insurance exchanges.
"That means more uncertainty in the healthcare markets about the ACA's future, and it also means that it will be less evident to the voters what's going on, which will make the voters less able to hold the administration accountable at the polls for its efforts to undermine the law," said Abbe Gluck, a Yale University law professor.
What happens next is up in the air. California Attorney General Xavier Becerra said Wednesday that his state is prepared to appeal to the Supreme Court, but Thursday suggested the coalition of 20 Democratic states that defended the ACA in the face of the Republican state challenge would decide next steps as a team.
Some legal experts doubt that the high court would take the case right away. If the Supreme Court decided to hear the case before Judge O'Connor gets another swing at it, it's unlikely the justices would hold arguments before October. A decision would come down in 2021 in that situation, multiple experts said.
David Coale, a Texas-based appellate attorney at law firm Lynn Pinker Cox & Hurst, said it's more likely that the Supreme Court would want the
5th Circuit to first hear the case en banc. The Republicans, Democrats or individual plaintiffs in the lawsuit could ask for a hearing before all of the 5th Circuit judges, or one of the appellate judges themselves could move for one, he said.
If the case instead returns to the district court in Texas, it could be another year before Judge O'Connor issues a second decision. The 5th Circuit tasked him to "to employ a finer-toothed comb on remand" as he analyzes what ACA provisions could be severed from the individual mandate. Once he decides, the case would be appealed to the 5th Circuit again.
In the meantime, health insurers, hospitals and patients are stuck in limbo. Risk-averse health insurers could hike premiums or leave the individual market, as they did previously when the ACA's status was uncertain.
"When (insurers) get nervous they want to charge more because of the uncertainty and the risk they perceive of being in the market," Washington Insurance Commissioner Mike Kreidler said during a press conference on Thursday. "We have a competitive market, but at the same time they are not going to throw good money after bad if they think the risk has increased or is getting worse. That's what this court decision has done. It has raised the temperature right now."
Average ACA exchange premiums decreased for the first time in 2019, as insurers who left the market came crawling back.
Even though the 5th Circuit left the bulk of the healthcare law standing for now, most ACA supporters viewed the decision as a loss by sending the case back to a judge who already moved once to axe the law.
"The court sent the case to an extreme right-wing judge who has already made his intentions clear: to strike down as much of the ACA as possible," said Topher Spiro, vice president of health policy at the liberal Center for American Progress.
But there are bright spots for ACA supporters in the 5th Circuit's decision. Conservative and left-leaning legal experts alike had complained that Judge O'Connor did not apply a settled legal doctrine called "severability" correctly when he ruled the ACA invalid in December 2018. That doctrine holds the decision to scrap a piece of a law or destroy the whole thing rests on what Congress would have wanted.
U.S Circuit Judge Jennifer Elrod, a Republican appointee who wrote the majority opinion, noted that the lower court paid too much attention to the 2010 Congress's description of the mandate as "essential" and not enough to the 2017 Congress' intent when it got rid of the mandate but left the rest of the law on the books.
"It effectively told the district court: the test here is what the 2017 Congress wanted to do," Gluck said.
Many legal experts, including Gluck, have argued there's no question of what the 2017 Congress would have wanted because it's clear what it did: it zeroed out the individual mandate and chose to keep the rest of the ACA. Whether the lower court changes its mind based on that legal test is unclear. "I'm not optimistic," she said.
The 5th Circuit's decision to remand to the lower court also suggests that it doesn't believe the entire ACA must fall. While the court wrote that Judge O'Connor "cogently explains" why some major provisions, such as the protections for patients with pre-existing conditions, are linked to the individual mandate, he didn't explain how other provisions concerning restaurant menu guidelines and healthcare fraud were intended to work with the individual mandate.
"The basis of the decision suggests that, yes, they think some things are inseverable," said Katie Keith, a Georgetown University law professor. "But clearly they are open to some things being severed alongside the ACA. It's not entirely clear what, but they give us a couple of hints."
https://www.modernhealthcare.com/legal/acas-continued-uncertain-fate-seen-republican-win?_ptid=%7Bjcx%7DH4sIAAAAAAAAAI2QW2-CQBCF_8s-u2YvXHZ9s4ZaUwnFGquPy7LAGgRkQa1N_3uB1DYmfei8zXznTGbOBxA6BhPQLLUx4fG4isEIVCJVG63Oi54QhDnEBBIEEYM2gYhARhzoWcF1S1kSui7ZlaEPBbcj4mJO7RjbHNkqoVxZDpJcJIkro26xulSq1qqQaljtbS0WPPPF-pXv7qh3UbJtdFkMMhxZqD4wJBhEXZG6ojqLZE5jvmfSZLQoE3Pnn8ofs8nK81odqlw0auaHvodesb1CK8w6RybMjYFJU7dqBJrvfjAH68cXlz75wWxOwS_biFqLouklRZvnIyDFoRI6LcxtcNJGDxyc4J8BUgQduazf52nFr2_bh2B__E-AuurzQGxM8ZjYaEyGN1qj6mmqiqaD8Vn2lzY5mGDbdTh1KMGfXyWrCzLnAQAA&CSAuthResp=1%3A%3A303359%3A0%3A24%3Asuccess%3A8C031B8D453364BB9FE68E7A071730EB
December 19, 2019 05:06 PM UPDATED 15 HOURS AGO
ACA's continued uncertain fate seen as a Republican win
opinion by SHELBY LIVINGSTON
The 5th Circuit Court of Appeals' reluctance to decide the fate of the Affordable Care Act cuts a break for the Republican lawmakers who sought to topple it while sowing uncertainty into healthcare markets that only recently found their footing.
The 5th Circuit ruled 2-1 on Wednesday that the already toothless individual mandate is unconstitutional but remanded the case back to a federal judge in Texas to determine how much of the landmark healthcare law must fall along with it. U.S. District Judge Reed O'Connor previously struck down the ACA in entirety.
What some observers saw as the appellate court's unwillingness to get its hands dirty ensures that the lawsuit, known as Texas v. U.S., will drag on beyond the 2020 presidential election. While the ACA remains the law of the land, the uncertainty around its future could once again wreak havoc on the individual health insurance exchanges.
"That means more uncertainty in the healthcare markets about the ACA's future, and it also means that it will be less evident to the voters what's going on, which will make the voters less able to hold the administration accountable at the polls for its efforts to undermine the law," said Abbe Gluck, a Yale University law professor.
What happens next is up in the air. California Attorney General Xavier Becerra said Wednesday that his state is prepared to appeal to the Supreme Court, but Thursday suggested the coalition of 20 Democratic states that defended the ACA in the face of the Republican state challenge would decide next steps as a team.
Some legal experts doubt that the high court would take the case right away. If the Supreme Court decided to hear the case before Judge O'Connor gets another swing at it, it's unlikely the justices would hold arguments before October. A decision would come down in 2021 in that situation, multiple experts said.
David Coale, a Texas-based appellate attorney at law firm Lynn Pinker Cox & Hurst, said it's more likely that the Supreme Court would want the
5th Circuit to first hear the case en banc. The Republicans, Democrats or individual plaintiffs in the lawsuit could ask for a hearing before all of the 5th Circuit judges, or one of the appellate judges themselves could move for one, he said.
If the case instead returns to the district court in Texas, it could be another year before Judge O'Connor issues a second decision. The 5th Circuit tasked him to "to employ a finer-toothed comb on remand" as he analyzes what ACA provisions could be severed from the individual mandate. Once he decides, the case would be appealed to the 5th Circuit again.
In the meantime, health insurers, hospitals and patients are stuck in limbo. Risk-averse health insurers could hike premiums or leave the individual market, as they did previously when the ACA's status was uncertain.
"When (insurers) get nervous they want to charge more because of the uncertainty and the risk they perceive of being in the market," Washington Insurance Commissioner Mike Kreidler said during a press conference on Thursday. "We have a competitive market, but at the same time they are not going to throw good money after bad if they think the risk has increased or is getting worse. That's what this court decision has done. It has raised the temperature right now."
Average ACA exchange premiums decreased for the first time in 2019, as insurers who left the market came crawling back.
Even though the 5th Circuit left the bulk of the healthcare law standing for now, most ACA supporters viewed the decision as a loss by sending the case back to a judge who already moved once to axe the law.
"The court sent the case to an extreme right-wing judge who has already made his intentions clear: to strike down as much of the ACA as possible," said Topher Spiro, vice president of health policy at the liberal Center for American Progress.
But there are bright spots for ACA supporters in the 5th Circuit's decision. Conservative and left-leaning legal experts alike had complained that Judge O'Connor did not apply a settled legal doctrine called "severability" correctly when he ruled the ACA invalid in December 2018. That doctrine holds the decision to scrap a piece of a law or destroy the whole thing rests on what Congress would have wanted.
U.S Circuit Judge Jennifer Elrod, a Republican appointee who wrote the majority opinion, noted that the lower court paid too much attention to the 2010 Congress's description of the mandate as "essential" and not enough to the 2017 Congress' intent when it got rid of the mandate but left the rest of the law on the books.
"It effectively told the district court: the test here is what the 2017 Congress wanted to do," Gluck said.
Many legal experts, including Gluck, have argued there's no question of what the 2017 Congress would have wanted because it's clear what it did: it zeroed out the individual mandate and chose to keep the rest of the ACA. Whether the lower court changes its mind based on that legal test is unclear. "I'm not optimistic," she said.
The 5th Circuit's decision to remand to the lower court also suggests that it doesn't believe the entire ACA must fall. While the court wrote that Judge O'Connor "cogently explains" why some major provisions, such as the protections for patients with pre-existing conditions, are linked to the individual mandate, he didn't explain how other provisions concerning restaurant menu guidelines and healthcare fraud were intended to work with the individual mandate.
"The basis of the decision suggests that, yes, they think some things are inseverable," said Katie Keith, a Georgetown University law professor. "But clearly they are open to some things being severed alongside the ACA. It's not entirely clear what, but they give us a couple of hints."
https://www.modernhealthcare.com/legal/acas-continued-uncertain-fate-seen-republican-win?_ptid=%7Bjcx%7DH4sIAAAAAAAAAI2QW2-CQBCF_8s-u2YvXHZ9s4ZaUwnFGquPy7LAGgRkQa1N_3uB1DYmfei8zXznTGbOBxA6BhPQLLUx4fG4isEIVCJVG63Oi54QhDnEBBIEEYM2gYhARhzoWcF1S1kSui7ZlaEPBbcj4mJO7RjbHNkqoVxZDpJcJIkro26xulSq1qqQaljtbS0WPPPF-pXv7qh3UbJtdFkMMhxZqD4wJBhEXZG6ojqLZE5jvmfSZLQoE3Pnn8ofs8nK81odqlw0auaHvodesb1CK8w6RybMjYFJU7dqBJrvfjAH68cXlz75wWxOwS_biFqLouklRZvnIyDFoRI6LcxtcNJGDxyc4J8BUgQduazf52nFr2_bh2B__E-AuurzQGxM8ZjYaEyGN1qj6mmqiqaD8Vn2lzY5mGDbdTh1KMGfXyWrCzLnAQAA&CSAuthResp=1%3A%3A303359%3A0%3A24%3Asuccess%3A8C031B8D453364BB9FE68E7A071730EB
From the Obamacare 5th Circuit appellate ruling striking down mandate provisions; URL for the decision
[T]he individual mandate injures both the individual plaintiffs, by requiring them to buy insurance that they do not want, and the state plaintiffs,by increasing their costs of complying with the reporting requirements that accompany the individual mandate. . . . .[T]he individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power. . . . [O]n the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.
Excerpt from https://int.nyt.com/data/documenthelper/6610-obamacare-ruling/a6560c9831a0af845a00/optimized/full.pdf#page=1
[T]he individual mandate injures both the individual plaintiffs, by requiring them to buy insurance that they do not want, and the state plaintiffs,by increasing their costs of complying with the reporting requirements that accompany the individual mandate. . . . .[T]he individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power. . . . [O]n the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.
Excerpt from https://int.nyt.com/data/documenthelper/6610-obamacare-ruling/a6560c9831a0af845a00/optimized/full.pdf#page=1
From the Food and Power advocacy group:
Booker Bill Would Phase Out Factory Farms and Revive the Packers and Stockyards Act
Presidential candidate Sen. Cory Booker introduced a bill on Monday to radically reform an animal agriculture system that currently puts independent producers, rural communities, and consumers at risk.
The Farm System Reform Act would halt construction of new concentrated animal feeding operations (CAFOs) and phase out all large CAFOs by 2040, while also holding corporate meatpackers more accountable for environmental degradation and farmer exploitation.
“Our independent family farmers and ranchers are continuing to be squeezed by large, multinational corporations that, because of their buying power and size, run roughshod over the marketplace,” said Booker in a press release. “We need to fix the broken system – that means protecting family farmers and ranchers and holding corporate integrators responsible for the harm they are causing.”
While the vast majority of meat in the U.S. today comes from large-scale animal farms, this wasn’t always the case. Antitrust enforcement during the past four decades enabled meatpackers to corner livestock markets, while broader agricultural policies both directly and indirectly subsidized critical operation costs for industrial livestock operations, namely feed and manure management. Shifts to highly consolidated and contract agriculture drove 70 percent of hog farms out of business between 1992 and 2007 and doubled the number of dairy cows on factory farms between 1997 and 2012, among other changes.
These large farms introduce high concentrations of manure that pollute ground and surface water, diminish air quality, and release greenhouse gases. Many rural communities have organized to oppose new CAFO construction, and nearly two-thirds of Iowa voters support greater oversight of industrial animal agriculture, according to a new national poll by the Johns Hopkins Center for a Livable Future. About 43 percent of respondents support a ban on new CAFOs.
Booker Bill Would Phase Out Factory Farms and Revive the Packers and Stockyards Act
Presidential candidate Sen. Cory Booker introduced a bill on Monday to radically reform an animal agriculture system that currently puts independent producers, rural communities, and consumers at risk.
The Farm System Reform Act would halt construction of new concentrated animal feeding operations (CAFOs) and phase out all large CAFOs by 2040, while also holding corporate meatpackers more accountable for environmental degradation and farmer exploitation.
“Our independent family farmers and ranchers are continuing to be squeezed by large, multinational corporations that, because of their buying power and size, run roughshod over the marketplace,” said Booker in a press release. “We need to fix the broken system – that means protecting family farmers and ranchers and holding corporate integrators responsible for the harm they are causing.”
While the vast majority of meat in the U.S. today comes from large-scale animal farms, this wasn’t always the case. Antitrust enforcement during the past four decades enabled meatpackers to corner livestock markets, while broader agricultural policies both directly and indirectly subsidized critical operation costs for industrial livestock operations, namely feed and manure management. Shifts to highly consolidated and contract agriculture drove 70 percent of hog farms out of business between 1992 and 2007 and doubled the number of dairy cows on factory farms between 1997 and 2012, among other changes.
These large farms introduce high concentrations of manure that pollute ground and surface water, diminish air quality, and release greenhouse gases. Many rural communities have organized to oppose new CAFO construction, and nearly two-thirds of Iowa voters support greater oversight of industrial animal agriculture, according to a new national poll by the Johns Hopkins Center for a Livable Future. About 43 percent of respondents support a ban on new CAFOs.
The Food and Drug Administration issued a proposed rule that would allow states to pursue pilot programs to import drugs from Canada and a draft guidance that would allow drugmakers to import their own products and sell them under different drug codes.
Several states are already preparing importation program applications, and Florida and Vermont have already submitted concept papers to HHS. Florida's Republican Gov. Ron DeSantis has been a key figure in pushing President Donald Trump to allow drug importation, and he signed a state law creating an importation program in June.
Vermont, Colorado and Maine have also passed drug importation laws, and HHS officials said they worked with New Hampshire's governor on the regulatory action.
It could be years before patients would actually see imported drugs even if all steps of the plan proceed, but HHS Secretary Alex Azar said the administration is moving as quickly as possible to finalize the regulatory actions.
States wouldn't be allowed to import biologics including insulin.
From: https://www.modernhealthcare.com/law-regulation/hhs-moves-forward-prescription-drug-import-plan?utm_source=modern-healthcare-alert&utm_medium=email&utm_campaign=20191218&utm_content=hero-readmore
Several states are already preparing importation program applications, and Florida and Vermont have already submitted concept papers to HHS. Florida's Republican Gov. Ron DeSantis has been a key figure in pushing President Donald Trump to allow drug importation, and he signed a state law creating an importation program in June.
Vermont, Colorado and Maine have also passed drug importation laws, and HHS officials said they worked with New Hampshire's governor on the regulatory action.
It could be years before patients would actually see imported drugs even if all steps of the plan proceed, but HHS Secretary Alex Azar said the administration is moving as quickly as possible to finalize the regulatory actions.
States wouldn't be allowed to import biologics including insulin.
From: https://www.modernhealthcare.com/law-regulation/hhs-moves-forward-prescription-drug-import-plan?utm_source=modern-healthcare-alert&utm_medium=email&utm_campaign=20191218&utm_content=hero-readmore
Small Business and the Fight for $15: A new study shows how a rising minimum wage hurts little companies.
Wall Street Journal ^ | December 15, 2019
Here’s another volley in the debate over the “Fight for $15”: As the federal minimum wage rose from 1989-2013, small businesses in affected states suffered “lower bank credit, higher loan defaults, lower employment, a lower entry and a higher exit rate.”
That’s according to a study last week from the National Bureau of Economic Research. The analysis by three professors at the Georgia Institute of Technology exploits the fact that many states—now more than half—set their own minimum wages higher than the federal standard. This provides a natural control group. When the nationwide minimum goes up, how do the states where it applies fare in comparison?
Start with data on one million loans, averaging around $100,000, made through the Small Business Administration. For each $1 increase in the minimum wage, the authors estimate that loan amounts dropped 9% more in the affected states. The risk of default was 12% higher. The average credit score for small companies in those states showed “a sharp decline.” Business entries fell 4% in the year the minimum wage went up. A year later, business exits rose 5%.
These results, the authors say, hold throughout various statistical analyses, such as while controlling for local economic conditions. The effects are stronger in businesses like restaurants and retail, which rely on low-skilled labor. Smaller and younger companies are more severely affected as well. In short, the authors conclude: “We find that increases in the federal minimum wage worsen the financial health of small businesses in the affected states.”
By now some readers are probably thinking: Well, duh. It does not take a University of Chicago Ph.D. to suspect that raising the price of labor will make it harder to sustain a small, labor-intensive business. Don’t forget that there’s no cost-of-living adjustment
(Excerpt) Read more at wsj.com ...
Editor note: This article is included because it is interesting, not because it reflects an editorial judgment favoring a low minimum wage. DAR
Wall Street Journal ^ | December 15, 2019
Here’s another volley in the debate over the “Fight for $15”: As the federal minimum wage rose from 1989-2013, small businesses in affected states suffered “lower bank credit, higher loan defaults, lower employment, a lower entry and a higher exit rate.”
That’s according to a study last week from the National Bureau of Economic Research. The analysis by three professors at the Georgia Institute of Technology exploits the fact that many states—now more than half—set their own minimum wages higher than the federal standard. This provides a natural control group. When the nationwide minimum goes up, how do the states where it applies fare in comparison?
Start with data on one million loans, averaging around $100,000, made through the Small Business Administration. For each $1 increase in the minimum wage, the authors estimate that loan amounts dropped 9% more in the affected states. The risk of default was 12% higher. The average credit score for small companies in those states showed “a sharp decline.” Business entries fell 4% in the year the minimum wage went up. A year later, business exits rose 5%.
These results, the authors say, hold throughout various statistical analyses, such as while controlling for local economic conditions. The effects are stronger in businesses like restaurants and retail, which rely on low-skilled labor. Smaller and younger companies are more severely affected as well. In short, the authors conclude: “We find that increases in the federal minimum wage worsen the financial health of small businesses in the affected states.”
By now some readers are probably thinking: Well, duh. It does not take a University of Chicago Ph.D. to suspect that raising the price of labor will make it harder to sustain a small, labor-intensive business. Don’t forget that there’s no cost-of-living adjustment
(Excerpt) Read more at wsj.com ...
Editor note: This article is included because it is interesting, not because it reflects an editorial judgment favoring a low minimum wage. DAR
JUSTICE NEWS Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Wednesday, November 20, 2019
Former Trader for Major Multinational Bank Convicted for Price Fixing and Bid Rigging in FX Market
A former currency trader was convicted today in New York for his participation in an antitrust conspiracy to manipulate prices for emerging market currencies in the global foreign currency exchange (FX) market, the Justice Department announced today.
Following a three-week trial in the U.S. District Court for the Southern District of New York, a jury convicted Akshay Aiyer (former Executive Director at a major multinational bank) of conspiring to fix prices and rig bids in Central and Eastern European, Middle Eastern and African (CEEMEA) currencies, which were generally traded against the U.S. dollar and the euro, from at least October 2010 through at least January 2013.
Full release: https://www.justice.gov/opa/pr/former-trader-major-multinational-bank-convicted-price-fixing-and-bid-rigging-fx-market
Office of Public Affairs
FOR IMMEDIATE RELEASE
Wednesday, November 20, 2019
Former Trader for Major Multinational Bank Convicted for Price Fixing and Bid Rigging in FX Market
A former currency trader was convicted today in New York for his participation in an antitrust conspiracy to manipulate prices for emerging market currencies in the global foreign currency exchange (FX) market, the Justice Department announced today.
Following a three-week trial in the U.S. District Court for the Southern District of New York, a jury convicted Akshay Aiyer (former Executive Director at a major multinational bank) of conspiring to fix prices and rig bids in Central and Eastern European, Middle Eastern and African (CEEMEA) currencies, which were generally traded against the U.S. dollar and the euro, from at least October 2010 through at least January 2013.
Full release: https://www.justice.gov/opa/pr/former-trader-major-multinational-bank-convicted-price-fixing-and-bid-rigging-fx-market
CVS subsidiary accused by USDOJ of fraudulent billing
The federal government has joined a lawsuit alleging that Omnicare, a subsidiary of CVS Health, fraudulently billed Medicare, TRICARE and Medicaid for thousands of drugs.
https://www.fiercehealthcare.com/payer/doj-accuses-cvs-subsidiary-omnicare-fraudulent-billing?mkt_tok=eyJpIjoiT0RabU1qRXpabUV5WWpBNCIsInQiOiJHa1wvSk93bkEzVkdIOVgyd1lOcHE1dDEyRUU3cFpwTVJrdjl4ekxNNWNwTTViU2F0Z2Q0XC9Bdzl1SUx3MnI1dXcySCtGc2tXZU1ZNmcwM0o2R1wvNWNEODZQbFUwcytYQ2M5SFlNYnF0aG54anduVElQZ2ZaMHY1K1M4MGFEVEhYZyJ9&mrkid=730008
The federal government has joined a lawsuit alleging that Omnicare, a subsidiary of CVS Health, fraudulently billed Medicare, TRICARE and Medicaid for thousands of drugs.
https://www.fiercehealthcare.com/payer/doj-accuses-cvs-subsidiary-omnicare-fraudulent-billing?mkt_tok=eyJpIjoiT0RabU1qRXpabUV5WWpBNCIsInQiOiJHa1wvSk93bkEzVkdIOVgyd1lOcHE1dDEyRUU3cFpwTVJrdjl4ekxNNWNwTTViU2F0Z2Q0XC9Bdzl1SUx3MnI1dXcySCtGc2tXZU1ZNmcwM0o2R1wvNWNEODZQbFUwcytYQ2M5SFlNYnF0aG54anduVElQZ2ZaMHY1K1M4MGFEVEhYZyJ9&mrkid=730008
Tech companies file appeal over net neutrality ruling
Tech companies Etsy and Mozilla, along with 22 state governments and some other entities, are appealing a federal court decision upholding the Federal Communications Commission's repeal of the Obama-era open-internet rules. "[W]e look forward to continuing the fight to preserve net neutrality as a fundamental digital right," says Amy Keating, Mozilla's chief legal officer.
CNET (12/13), ZDNet (12/13)
Robin Hood companies use donations to buy up uncollected medical debt for pennies on the dollar, and then can tell the debtors they no longer have the debt
By Don Allen Resnikoff
PBS Newshour recently reported on an unusual company’s effort to relieve the burden of medical debt for those in need. See https://www.pbs.org/video/making-sense-rip-medical-debt-1576194798/
PBS focused on RIP Medical Debt, a group that functions as a Robin Hood debt buyer, negotiating cheap rates on large portfolios of anonymous consumer debt, and using donated money to pay the discounted price. Once they purchase the debt, they send letters to every account holder informing them that their debt has been wiped clean.
The Robin Hood idea works because most debt collectors are secondary debt-buying companies that have purchased the consumer's debt for pennies on the dollar. The largest debt-buying companies buy huge portfolios of such debt with millions of individual accounts. These same companies can turn around and collect the full amount from consumers, often through aggressive and even illegal tactics.
The Robin Hood companies buy accounts that the secondary debt-buying companies consider virtually worthless – like debts where a year of collection efforts have been unavailing. The Robin Hood companies can buy up such indebtedness for a penny or two on the dollar.
RIP Medical Debt was a struggling venture until it was the subject of a TV feature by John Oliver, who the PBS program describes as a “comedian advocate.” (It is meant as a compliment as applied to him.) Oliver popularized the Robin Hood debt collection idea when he televised his purchase of $15 million of medical debt owed by 9,000 Americans and forgave it on national television. Oliver and his "Last Week Tonight" producers paid less than $60,000 to buy a portfolio containing millions of dollars of consumer debt. You can see Oliver’s debt collection show at https://youtu.be/hxUAntt1z2c
But can the Robin Hood idea work for the individual consumer as it works for RIP Medical Debt? Not likely, according to an article at https://money.howstuffworks.com/can-you-buy-your-own-debt-pennies-the-dollar.htm Following is part of what the article says:
Unfortunately, individual consumers don't have the same access to deeply discounted debt as debt buyers purchasing thousands of accounts, explains April Kuehnhoff, staff attorney at the National Consumer Law Center. No one would sell just one uncollected debt to a person.
"Even if consumers could afford to purchase whole portfolios of debt, they wouldn't know which portfolios contain their individual account," says Kuehnhoff. "Consumer can certainly call up the original creditor or debt collector and try to negotiate a better rate or a payment plan. But they are unlikely to accept pennies on the dollar as payment for the debt."
Once debt has been resold to a debt buyer, it's almost impossible to track. Even debt-buying companies don't know the details of the accounts they're buying — names, individual debt amounts, types of debt — until they've bought them. And often the information associated with the accounts is outdated or incorrect.
Further, the type of very cheap debt that you hear about is generally old (no payment has been made on it for at least a year) and has been sold at least a couple of times. Credit.com points out that the benefits of buying your own debt (like not reporting yourself to a credit agency or adding interest to the amount owed) could also be had by trying to negotiate with your creditors at the earliest stages of debt collection.
By Don Allen Resnikoff
PBS Newshour recently reported on an unusual company’s effort to relieve the burden of medical debt for those in need. See https://www.pbs.org/video/making-sense-rip-medical-debt-1576194798/
PBS focused on RIP Medical Debt, a group that functions as a Robin Hood debt buyer, negotiating cheap rates on large portfolios of anonymous consumer debt, and using donated money to pay the discounted price. Once they purchase the debt, they send letters to every account holder informing them that their debt has been wiped clean.
The Robin Hood idea works because most debt collectors are secondary debt-buying companies that have purchased the consumer's debt for pennies on the dollar. The largest debt-buying companies buy huge portfolios of such debt with millions of individual accounts. These same companies can turn around and collect the full amount from consumers, often through aggressive and even illegal tactics.
The Robin Hood companies buy accounts that the secondary debt-buying companies consider virtually worthless – like debts where a year of collection efforts have been unavailing. The Robin Hood companies can buy up such indebtedness for a penny or two on the dollar.
RIP Medical Debt was a struggling venture until it was the subject of a TV feature by John Oliver, who the PBS program describes as a “comedian advocate.” (It is meant as a compliment as applied to him.) Oliver popularized the Robin Hood debt collection idea when he televised his purchase of $15 million of medical debt owed by 9,000 Americans and forgave it on national television. Oliver and his "Last Week Tonight" producers paid less than $60,000 to buy a portfolio containing millions of dollars of consumer debt. You can see Oliver’s debt collection show at https://youtu.be/hxUAntt1z2c
But can the Robin Hood idea work for the individual consumer as it works for RIP Medical Debt? Not likely, according to an article at https://money.howstuffworks.com/can-you-buy-your-own-debt-pennies-the-dollar.htm Following is part of what the article says:
Unfortunately, individual consumers don't have the same access to deeply discounted debt as debt buyers purchasing thousands of accounts, explains April Kuehnhoff, staff attorney at the National Consumer Law Center. No one would sell just one uncollected debt to a person.
"Even if consumers could afford to purchase whole portfolios of debt, they wouldn't know which portfolios contain their individual account," says Kuehnhoff. "Consumer can certainly call up the original creditor or debt collector and try to negotiate a better rate or a payment plan. But they are unlikely to accept pennies on the dollar as payment for the debt."
Once debt has been resold to a debt buyer, it's almost impossible to track. Even debt-buying companies don't know the details of the accounts they're buying — names, individual debt amounts, types of debt — until they've bought them. And often the information associated with the accounts is outdated or incorrect.
Further, the type of very cheap debt that you hear about is generally old (no payment has been made on it for at least a year) and has been sold at least a couple of times. Credit.com points out that the benefits of buying your own debt (like not reporting yourself to a credit agency or adding interest to the amount owed) could also be had by trying to negotiate with your creditors at the earliest stages of debt collection.
Gov. Gavin Newsom rejects PG&E Corp. plan to pay Northern California wildfire victims and exit bankruptcy.
In a letter to PG&E Chief Executive Bill Johnson, the governor declared that the company’s proposal doesn’t go far enough to make it “positioned to provide safe, reliable and affordable service.”
“The resolution of this bankruptcy must yield a radically restructured and transformed utility that is responsible and accountable,” he wrote. Among other things, he demanded an entirely new slate of directors who are subject to state approval, and a structure that would allow PG&E’s operating license to be transferred “to the state or a third-party when circumstances warrant.”
Just a week ago, PG&E announced what it believed was a breakthrough that would ease its way out of bankruptcy: a $13.5 billion settlement agreement with lawyers for more than 70,000 wildfire victims.
But the utility wasn’t home free after all. It still needed Newsom’s approval of its bankruptcy plan. Now it will have to overhaul the proposal, and quickly.
According to AB 1054, which creates a $21 billion insurance pool to help utilities pay for damages from future wildfires, PG&E needs to exit Chapter 11 by June 30 in order to participate in the fund..
AB 1054 says PG&E’s bankruptcy plan, besides compensating fire victims, must include a ramped-up program for preventing new fires, as well as other changes in how it does business. Newsom said PG&E’s proposals “do not comply with AB 1054.”
Responding to Newsom’s rejection, PG&E insisted its plan “is the best course forward for all stakeholders. We’ve welcomed feedback from all stakeholders ... and will continue to work diligently in the coming days to resolve any issues that may arise.”
Excerpt from https://www.sacbee.com/news/california/fires/article238350708.html
Some background to the California situation is in this excerpt from a PBS presentation on electricity company regulaton:
In 1992 Congress passed President Bush's Energy Policy Act (EPACT), which opened access to transmission networks to non-utility generators. EPACT further facilitated the development of a competitive market by creating another category of qualifying facilities known as exempt wholesale generators (EWGs), which were exempted from regulations faced by the traditional utilities. To assist in the implementation of PURPA and EPACT, FERC issued Order No. 888 and Order No. 889 in April 1996. The two orders provided guidelines on how to open electricity transmission networks on a nondiscriminatory basis in interstate commerce.
The passage of EPACT led states which had historically high electricity prices, such as California, to investigate whether competitive deregulated markets would benefit their consumers. In 1996, both California and Rhode Island passed deregulation legislation, giving the consumer the right to choose his electricity supplier. As of May 2001, 24 states and the District of Columbia either have passed legislation or issued a comprehensive order to restructure their electric power industry. Eighteen states currently are investigating deregulation. View the Department of Energy map depicting the status of state electricity industry restructuring activity.
As a result of the deregulation movement of the 1990s, the electric power industry is changing from a structure of regulated, local, vertically-integrated monopolies, to one in which competitive companies generate electricity, while the utilities maintain transmission and distribution networks. In the face of increased competition, investor-owned utilities (IOUs) have sought to make themselves more competitive through mergers, acquisitions and asset divestitures, leading to the industry becoming much more concentrated. By 1998, the ten largest IOUs owned almost 40% of IOU-held electricity generation-capacity.[6] Increased competition has also led to the rise of two new participants in the electric power marketplace, who buy and sell electricity without owning or operating transmission or distribution operations: power marketers, which are considered to be utilities and therefore regulated by FERC, and power brokers, which are unregulated.
From https://www.pbs.org/wgbh/pages/frontline/shows/blackout/regulation/timeline.html
In a letter to PG&E Chief Executive Bill Johnson, the governor declared that the company’s proposal doesn’t go far enough to make it “positioned to provide safe, reliable and affordable service.”
“The resolution of this bankruptcy must yield a radically restructured and transformed utility that is responsible and accountable,” he wrote. Among other things, he demanded an entirely new slate of directors who are subject to state approval, and a structure that would allow PG&E’s operating license to be transferred “to the state or a third-party when circumstances warrant.”
Just a week ago, PG&E announced what it believed was a breakthrough that would ease its way out of bankruptcy: a $13.5 billion settlement agreement with lawyers for more than 70,000 wildfire victims.
But the utility wasn’t home free after all. It still needed Newsom’s approval of its bankruptcy plan. Now it will have to overhaul the proposal, and quickly.
According to AB 1054, which creates a $21 billion insurance pool to help utilities pay for damages from future wildfires, PG&E needs to exit Chapter 11 by June 30 in order to participate in the fund..
AB 1054 says PG&E’s bankruptcy plan, besides compensating fire victims, must include a ramped-up program for preventing new fires, as well as other changes in how it does business. Newsom said PG&E’s proposals “do not comply with AB 1054.”
Responding to Newsom’s rejection, PG&E insisted its plan “is the best course forward for all stakeholders. We’ve welcomed feedback from all stakeholders ... and will continue to work diligently in the coming days to resolve any issues that may arise.”
Excerpt from https://www.sacbee.com/news/california/fires/article238350708.html
Some background to the California situation is in this excerpt from a PBS presentation on electricity company regulaton:
In 1992 Congress passed President Bush's Energy Policy Act (EPACT), which opened access to transmission networks to non-utility generators. EPACT further facilitated the development of a competitive market by creating another category of qualifying facilities known as exempt wholesale generators (EWGs), which were exempted from regulations faced by the traditional utilities. To assist in the implementation of PURPA and EPACT, FERC issued Order No. 888 and Order No. 889 in April 1996. The two orders provided guidelines on how to open electricity transmission networks on a nondiscriminatory basis in interstate commerce.
The passage of EPACT led states which had historically high electricity prices, such as California, to investigate whether competitive deregulated markets would benefit their consumers. In 1996, both California and Rhode Island passed deregulation legislation, giving the consumer the right to choose his electricity supplier. As of May 2001, 24 states and the District of Columbia either have passed legislation or issued a comprehensive order to restructure their electric power industry. Eighteen states currently are investigating deregulation. View the Department of Energy map depicting the status of state electricity industry restructuring activity.
As a result of the deregulation movement of the 1990s, the electric power industry is changing from a structure of regulated, local, vertically-integrated monopolies, to one in which competitive companies generate electricity, while the utilities maintain transmission and distribution networks. In the face of increased competition, investor-owned utilities (IOUs) have sought to make themselves more competitive through mergers, acquisitions and asset divestitures, leading to the industry becoming much more concentrated. By 1998, the ten largest IOUs owned almost 40% of IOU-held electricity generation-capacity.[6] Increased competition has also led to the rise of two new participants in the electric power marketplace, who buy and sell electricity without owning or operating transmission or distribution operations: power marketers, which are considered to be utilities and therefore regulated by FERC, and power brokers, which are unregulated.
From https://www.pbs.org/wgbh/pages/frontline/shows/blackout/regulation/timeline.html
NYT's Bradsher's opinion on China/US trade war:
President Trump’s initial retreat from his trade-war threats has handed hard-liners in China a victory
A longer, pricklier trade war and stiff Chinese resistance to economic reforms could result.
Mr. Trump on Friday outlined a partial trade deal that deferred new tariffs on $160 billion a year in Chinese-made goods, a move that would have had him taxing virtually everything China sells to the United States. He also agreed for the first time to broadly reduce tariffs he had already imposed on Chinese goods, halving tariffs on more than $100 billion a year worth of products like clothing and lawn mowers — a striking about-face for a protectionist president who last year described himself as a “tariff man.”
The White House called the deal a win. It said China had agreed to buy large quantities of American agricultural goods, giving farmers hit by the trade war some needed relief. It also means the United States economy will not suffer from new tariffs threatened for Sunday on Chinese-made goods that Americans love to buy, like toys and smartphones.
But the deal may be seen by Xi Jinping, China’s top leader, and his hard-line supporters as vindication of the intransigent stance they have taken since the spring, when a previous pact struck by Chinese moderates fell apart. Since then, China has asked that even a partial deal include tariff rollbacks. American officials resisted, debated, then relented.
In essence, a year and a half into the trade war, China seems to have hit on a winning strategy: Stay tough and let the Trump administration negotiate with itself.
From https://www.nytimes.com/2019/12/14/business/china-trade-hardliners.html
President Trump’s initial retreat from his trade-war threats has handed hard-liners in China a victory
A longer, pricklier trade war and stiff Chinese resistance to economic reforms could result.
Mr. Trump on Friday outlined a partial trade deal that deferred new tariffs on $160 billion a year in Chinese-made goods, a move that would have had him taxing virtually everything China sells to the United States. He also agreed for the first time to broadly reduce tariffs he had already imposed on Chinese goods, halving tariffs on more than $100 billion a year worth of products like clothing and lawn mowers — a striking about-face for a protectionist president who last year described himself as a “tariff man.”
The White House called the deal a win. It said China had agreed to buy large quantities of American agricultural goods, giving farmers hit by the trade war some needed relief. It also means the United States economy will not suffer from new tariffs threatened for Sunday on Chinese-made goods that Americans love to buy, like toys and smartphones.
But the deal may be seen by Xi Jinping, China’s top leader, and his hard-line supporters as vindication of the intransigent stance they have taken since the spring, when a previous pact struck by Chinese moderates fell apart. Since then, China has asked that even a partial deal include tariff rollbacks. American officials resisted, debated, then relented.
In essence, a year and a half into the trade war, China seems to have hit on a winning strategy: Stay tough and let the Trump administration negotiate with itself.
From https://www.nytimes.com/2019/12/14/business/china-trade-hardliners.html
Open Markets press release:
White Paper: The Role of Monopoly in America’s Prescription Drug Crisis
Bipartisan reform efforts to combat high drug prices often fail to recognize how pharmaceutical corporations suppress fair market competition through various forms of monopoly. In a newly published white paper by the Open Markets Institute, The Role of Monopoly in America’s Prescription Drug Crisis, we detail how increasing corporate concentration in the pharmaceutical industry, and the monopoly markets for individual drugs created by a deeply flawed and increasingly abused patent and regulatory system, are the root causes of the problem.
Drug manufacturers engage in a variety of anti-competitive practices, such as abusing the patent system, various FDA regulations, filing sham citizen petitions with the FDA, and tactics to eliminate competition. These practices are used to extend and protect monopolies and to stifle competition—and they wind up needlessly costing consumers millions of dollars each year.
These practices ultimately drive up drug prices, decrease innovation, and cause shortages and disruptions of the supply of many key drugs. They also imperil drug safety.
Brand drug manufacturers also stifle competition and gain monopoly profits by offering substantial rebates or discounts to large-scale buyers—but only if the purchasers refuse to buy a competing generic drug that might erode the brand drug’s market dominance.
Many of these problems can be solved or ameliorated through better competition policy, which can involve the application and enforcement of our antitrust laws. Other policy solutions include the forced licensing of patents, cash prizes for innovation, or price regulation, among other recommendations.
In each instance, we are looking for public policies that will reset the terms of competition and the balances of power in drug markets so that they serve the public good. Read our entire report here. https://openmarketsinstitute.org/releases/open-markets-releases-new-policy-paper-role-monopoly-americas-prescription-drug-crisis/
White Paper: The Role of Monopoly in America’s Prescription Drug Crisis
Bipartisan reform efforts to combat high drug prices often fail to recognize how pharmaceutical corporations suppress fair market competition through various forms of monopoly. In a newly published white paper by the Open Markets Institute, The Role of Monopoly in America’s Prescription Drug Crisis, we detail how increasing corporate concentration in the pharmaceutical industry, and the monopoly markets for individual drugs created by a deeply flawed and increasingly abused patent and regulatory system, are the root causes of the problem.
Drug manufacturers engage in a variety of anti-competitive practices, such as abusing the patent system, various FDA regulations, filing sham citizen petitions with the FDA, and tactics to eliminate competition. These practices are used to extend and protect monopolies and to stifle competition—and they wind up needlessly costing consumers millions of dollars each year.
These practices ultimately drive up drug prices, decrease innovation, and cause shortages and disruptions of the supply of many key drugs. They also imperil drug safety.
Brand drug manufacturers also stifle competition and gain monopoly profits by offering substantial rebates or discounts to large-scale buyers—but only if the purchasers refuse to buy a competing generic drug that might erode the brand drug’s market dominance.
Many of these problems can be solved or ameliorated through better competition policy, which can involve the application and enforcement of our antitrust laws. Other policy solutions include the forced licensing of patents, cash prizes for innovation, or price regulation, among other recommendations.
In each instance, we are looking for public policies that will reset the terms of competition and the balances of power in drug markets so that they serve the public good. Read our entire report here. https://openmarketsinstitute.org/releases/open-markets-releases-new-policy-paper-role-monopoly-americas-prescription-drug-crisis/
The NFL predicament: is there such a thing as a helmet that actually protects the brain?
A NYT article discusses the possibly futile scientific effort to create a better helmet
From the NYT: These are strange and contentious times for football. It remains America’s most popular sport. The National Football League remains a mint, pumping out revenues that have reached $15 billion annually. At the same time, youth and high school football participation has fallen steadily,[https://www.nytimes.com/interactive/2019/11/08/sports/falling-football-participation-in-america.html] driven, in part, by broad parental concern about the brutal damage wreaked by hits that shake and rattle the gray mass of mystery that is the human brain.Their worry is based in fact. When a 310-pound man who runs a 40-yard dash in five seconds flat slams into a running back, that runner’s neck and head accelerate, and the brain and its fibers twist and stretch and tear. A particularly rough hit could jar open the blood-brain barrier, the semipermeable wall that prevents bacterial pathogens from entering the brain.
The full article: https://www.nytimes.com/2019/12/12/sports/concussions-football-helmet.html
A NYT article discusses the possibly futile scientific effort to create a better helmet
From the NYT: These are strange and contentious times for football. It remains America’s most popular sport. The National Football League remains a mint, pumping out revenues that have reached $15 billion annually. At the same time, youth and high school football participation has fallen steadily,[https://www.nytimes.com/interactive/2019/11/08/sports/falling-football-participation-in-america.html] driven, in part, by broad parental concern about the brutal damage wreaked by hits that shake and rattle the gray mass of mystery that is the human brain.Their worry is based in fact. When a 310-pound man who runs a 40-yard dash in five seconds flat slams into a running back, that runner’s neck and head accelerate, and the brain and its fibers twist and stretch and tear. A particularly rough hit could jar open the blood-brain barrier, the semipermeable wall that prevents bacterial pathogens from entering the brain.
The full article: https://www.nytimes.com/2019/12/12/sports/concussions-football-helmet.html
Paul Volcker's parting shot: preserve Fed independence, and faith in U.S. institutions
Excerpt from Volcker article at https://www.ft.com/content/2389d7ec-1b3c-11ea-97df-cc63de1d73f4
Increasingly, by design or not, there appears to be a movement to undermine Americans’ faith in our government and its policies and institutions. We’ve moved well beyond former president Ronald Reagan’s credo that “government is the problem”, with its aim of reversing decades of federal expansion. Today we see something very different and far more sinister. Nihilistic forces are dismantling policies to protect our air, water, and climate. And they seek to discredit the pillars of our democracy: voting rights and fair elections, the rule of law, the free press, the separation of powers, the belief in science, and the concept of truth itself. . . .
Not since just after the second world war have we seen a president so openly seek to dictate policy to the Fed. That is a matter of great concern, given that the central bank is one of our key governmental institutions, carefully designed to be free of purely partisan attacks. I trust that the members of the Federal Reserve Board itself, the members of Congress responsible for Fed oversight, and indeed the public at large, will maintain the Fed’s ability to act in the nation’s interest, free of partisan political purposes. Monetary policy is important, but it cannot by itself sustain global leadership. We need open markets and strong allies to support economic growth and the prospects for peace.
Those constructive American policies have been a large part of my life. Instead, confidence in the US is under siege.
Excerpt from Volcker article at https://www.ft.com/content/2389d7ec-1b3c-11ea-97df-cc63de1d73f4
Increasingly, by design or not, there appears to be a movement to undermine Americans’ faith in our government and its policies and institutions. We’ve moved well beyond former president Ronald Reagan’s credo that “government is the problem”, with its aim of reversing decades of federal expansion. Today we see something very different and far more sinister. Nihilistic forces are dismantling policies to protect our air, water, and climate. And they seek to discredit the pillars of our democracy: voting rights and fair elections, the rule of law, the free press, the separation of powers, the belief in science, and the concept of truth itself. . . .
Not since just after the second world war have we seen a president so openly seek to dictate policy to the Fed. That is a matter of great concern, given that the central bank is one of our key governmental institutions, carefully designed to be free of purely partisan attacks. I trust that the members of the Federal Reserve Board itself, the members of Congress responsible for Fed oversight, and indeed the public at large, will maintain the Fed’s ability to act in the nation’s interest, free of partisan political purposes. Monetary policy is important, but it cannot by itself sustain global leadership. We need open markets and strong allies to support economic growth and the prospects for peace.
Those constructive American policies have been a large part of my life. Instead, confidence in the US is under siege.
America’s Dairy Farmers Are Hurting. A Giant Merger Could Make Things Worse.The largest dairy co-op in the United States is in talks to acquire Dean Foods, a milk processing company that sought bankruptcy protection last month.
AAmerica’s Dairy Farmers Are Hurting. A Giant Merger Could Make Things Worse. dairy co-op in the United States is in talks tThe largest dairy co-op in the United States is in talks to acquire Dean Foods, a milk processing company that sought bankruptcy protection last month.
See https://www.nytimes.com/2019/12/11/business/dean-foods-dairy-farmers-antitrust.html
See https://www.nytimes.com/2019/12/11/business/dean-foods-dairy-farmers-antitrust.html
New York Court finds that New York AG has failed to establish by a preponderance of the evidence that ExxonMobil violated the law in connection with its public disclosures concerning how ExxonMobil accounted for past, present and future climate change risks.
INDEX NO . 452044 / 2018
NYSCEF DOC. NO . 567 RECEIVED NYSCEF : 12 / 10/ 2019
SUPREME COURTOF THE STATE OF NEW YORK
NEW YORK COUNTY
PEOPLE OF THE STATE OF NEW YORK, BY LETITIA
JAMES, ATTORNEYGENERAL OF THE STATEOF NEW
YORK
Plaintiff,
- V
EXXONMOBIL CORPORATION,
Defendant.
DECISION AFTER TRIAL
OSTRAGER, J.
Following twelve days of trial and testimony from eighteen witnesses, the Court finds
that the Office of the Attorney General has failed to establish by a preponderance of the evidence
that ExxonMobil either violated the Martin Act or Executive Law 63( 12 ) in connection with its
public disclosures concerning how ExxonMobil accounted for past, present and future climate
change risks.
full opinion:
https://int.nyt.com/data/documenthelper/6569-new-york-vs-exxonmobil/eb27e49cb4cdbb4add80/optimized/full.pdf#page=1
INDEX NO . 452044 / 2018
NYSCEF DOC. NO . 567 RECEIVED NYSCEF : 12 / 10/ 2019
SUPREME COURTOF THE STATE OF NEW YORK
NEW YORK COUNTY
PEOPLE OF THE STATE OF NEW YORK, BY LETITIA
JAMES, ATTORNEYGENERAL OF THE STATEOF NEW
YORK
Plaintiff,
- V
EXXONMOBIL CORPORATION,
Defendant.
DECISION AFTER TRIAL
OSTRAGER, J.
Following twelve days of trial and testimony from eighteen witnesses, the Court finds
that the Office of the Attorney General has failed to establish by a preponderance of the evidence
that ExxonMobil either violated the Martin Act or Executive Law 63( 12 ) in connection with its
public disclosures concerning how ExxonMobil accounted for past, present and future climate
change risks.
full opinion:
https://int.nyt.com/data/documenthelper/6569-new-york-vs-exxonmobil/eb27e49cb4cdbb4add80/optimized/full.pdf#page=1
Representative García and Senator Warren Announce Introduction of the Bank Merger Review Modernization Act
The Press Release appears below, after comment by DAR
DAR Comment:
It can be argued that one reason that the Antitrust Division has enabled consolidation in banking is too much focus on narrowly defined
and local geographic and product markets. Arguably the USDOJ has not focused enough on broader national and international markets.
For example, two merging giants may have few competing retail branches in a particular locality, suggesting no competitive problem for retail banking in the locality.
But a big competition problem remains if the banks are the two most important players in a national or international market in investment banking.
It is hard to say whether the Warren press release really means to focus on the importance of local rather than broader markets, but the press release does say that the Warren legislation "requires regulators to examine how the merger would impact market concentration for individual banking products, such as commercial deposits, home mortgage lending, and small business lending rather than just the general availability of banking products in local markets."
Moving from this particular local v. broader market competition question:
As you may know, the procedure that now applies to bank mergers is that the acquiring bank first files an application with the Federal Reserve
(or one of the other regulatory agencies, as applicable), which will then pass the application on to the Antitrust Division for review.
The Federal Reserve or other regulatory agency then reviews the application concurrently with the Antitrust Division.
There is a strong argument that there is already sufficient flexibility in existing
antitrust law and regulators' "public interest" jurisdiction on which to base efforts by the USDOJ, the Federal Reserve Board (Fed), and other U.S.
government agencies to address merger enforcement more aggressively.
The great policy question raised by the Warren proposals is whether it is better to simply strengthen existing bank merger enforcement mechanisms, which take advantage of a large body of case law, or to more drastically revise the regulatory framework. My guess is that
many experienced antitrust enforcers will pick the more cautious approach.
I agree with the thoughts in the American Antitrust Institute's discussion at
https://www.antitrustinstitute.org/wp-content/uploads/2018/08/Banking-and-Financial-Services.7.22.16.pdf
Some of the thoughts there include giving the USDOJ Antitrust Division a stronger role in bank merger review, and encouraging
the Antitrust Division to be more aggressive in challenging bank mergers.
Don Allen Resnikoff
Press Release
Bicameral legislation would require bank regulators to seriously consider how the merger affects consumers and communities and whether it presents risks to financial stability
Washington, DC - Congressman Jesús "Chuy" García (D-Ill.), member of the House of Representatives Committee on Financial Services and United States Senator Elizabeth Warren (D-Mass.), member of the Senate Banking, Housing, and Urban Affairs Committee, today announced the introduction of the Bank Merger Review Modernization Act. The legislation would restrict harmful consolidation in the banking industry and protect consumers and the financial system from "Too Big to Fail" institutions, like those that caused the 2008 financial crisis. The upcoming merger between SunTrust Banks, Inc. (SunTrust) and BB&T Corporation (BB&T) will create the sixth-largest U.S. bank and first new Too Big to Fail bank since the financial crisis. Representatives Jan Schakowsky (D-Ill.) and Rashida Tlaib (D-Mich.) are original House cosponsors of the bill.
"When big banks get bigger, consumers and taxpayers usually lose. We must protect our financial system by slowing down bank consolidation. This bill will help address this, taking the Fed and FDIC off autopilot and giving consumers a voice in reviewing bank mergers," said Congressman García.
"Nearly two years ago, Chairman Powell confirmed my worst suspicions that the Fed has not declined a single merger request since before the financial crisis," said Senator Warren. "The bill Congressman García and I are announcing today would ensure that regulators do their jobs by stopping mergers that deprive communities of the banking services they need, reward banks that cheat or discriminate against their customers, and risk another financial crisis.
Before banks merge, they need approval from regulators, including the Federal Reserve ("Fed"), the Federal Deposit Insurance Corporation (FDIC), or the Office of the Comptroller of the Currency (OCC), but the review process for bank mergers is fundamentally broken. Voluntary bank mergers have driven a rapid decline in the number of banks since the financial crisis. Studies show that bank mergers can result in higher costs to consumers and decreased access to financial products, especially in rural areas. And when two large banks merge, it has even greater risks, potentially creating a bank that's too big to manage effectively or creating a new Too Big to Fail bank that could threaten financial stability.
When regulators consider a merger they are supposed to evaluate a number of factors, including: (1) whether the merger will create local monopolies for banking services; (2) whether the merged bank will be well managed; (3) whether the new bank creates risk to the financial system; and (4) the merger's effects on the public, including consumers. In practice, financial agencies almost exclusively focus their analyses on the impact of the merger on competitiveness and often pre-review the merger in secret with banks before they announce it publicly. As a result, the merger review practice lacks analytical rigor, and regulators serve as rubber stamps. Of the 3,819 bank merger applications the Fed received between 2006 and 2017, it did not decline a single one.
The Bank Merger Review Modernization Act strengthens and modernizes the statutory standards under which federal regulators analyze bank merger applications by:
https://chuygarcia.house.gov/media/press-releases/representative-garc-and-senator-warren-announce-introduction-bank-merger-review
The Press Release appears below, after comment by DAR
DAR Comment:
It can be argued that one reason that the Antitrust Division has enabled consolidation in banking is too much focus on narrowly defined
and local geographic and product markets. Arguably the USDOJ has not focused enough on broader national and international markets.
For example, two merging giants may have few competing retail branches in a particular locality, suggesting no competitive problem for retail banking in the locality.
But a big competition problem remains if the banks are the two most important players in a national or international market in investment banking.
It is hard to say whether the Warren press release really means to focus on the importance of local rather than broader markets, but the press release does say that the Warren legislation "requires regulators to examine how the merger would impact market concentration for individual banking products, such as commercial deposits, home mortgage lending, and small business lending rather than just the general availability of banking products in local markets."
Moving from this particular local v. broader market competition question:
As you may know, the procedure that now applies to bank mergers is that the acquiring bank first files an application with the Federal Reserve
(or one of the other regulatory agencies, as applicable), which will then pass the application on to the Antitrust Division for review.
The Federal Reserve or other regulatory agency then reviews the application concurrently with the Antitrust Division.
There is a strong argument that there is already sufficient flexibility in existing
antitrust law and regulators' "public interest" jurisdiction on which to base efforts by the USDOJ, the Federal Reserve Board (Fed), and other U.S.
government agencies to address merger enforcement more aggressively.
The great policy question raised by the Warren proposals is whether it is better to simply strengthen existing bank merger enforcement mechanisms, which take advantage of a large body of case law, or to more drastically revise the regulatory framework. My guess is that
many experienced antitrust enforcers will pick the more cautious approach.
I agree with the thoughts in the American Antitrust Institute's discussion at
https://www.antitrustinstitute.org/wp-content/uploads/2018/08/Banking-and-Financial-Services.7.22.16.pdf
Some of the thoughts there include giving the USDOJ Antitrust Division a stronger role in bank merger review, and encouraging
the Antitrust Division to be more aggressive in challenging bank mergers.
Don Allen Resnikoff
Press Release
Bicameral legislation would require bank regulators to seriously consider how the merger affects consumers and communities and whether it presents risks to financial stability
Washington, DC - Congressman Jesús "Chuy" García (D-Ill.), member of the House of Representatives Committee on Financial Services and United States Senator Elizabeth Warren (D-Mass.), member of the Senate Banking, Housing, and Urban Affairs Committee, today announced the introduction of the Bank Merger Review Modernization Act. The legislation would restrict harmful consolidation in the banking industry and protect consumers and the financial system from "Too Big to Fail" institutions, like those that caused the 2008 financial crisis. The upcoming merger between SunTrust Banks, Inc. (SunTrust) and BB&T Corporation (BB&T) will create the sixth-largest U.S. bank and first new Too Big to Fail bank since the financial crisis. Representatives Jan Schakowsky (D-Ill.) and Rashida Tlaib (D-Mich.) are original House cosponsors of the bill.
"When big banks get bigger, consumers and taxpayers usually lose. We must protect our financial system by slowing down bank consolidation. This bill will help address this, taking the Fed and FDIC off autopilot and giving consumers a voice in reviewing bank mergers," said Congressman García.
"Nearly two years ago, Chairman Powell confirmed my worst suspicions that the Fed has not declined a single merger request since before the financial crisis," said Senator Warren. "The bill Congressman García and I are announcing today would ensure that regulators do their jobs by stopping mergers that deprive communities of the banking services they need, reward banks that cheat or discriminate against their customers, and risk another financial crisis.
Before banks merge, they need approval from regulators, including the Federal Reserve ("Fed"), the Federal Deposit Insurance Corporation (FDIC), or the Office of the Comptroller of the Currency (OCC), but the review process for bank mergers is fundamentally broken. Voluntary bank mergers have driven a rapid decline in the number of banks since the financial crisis. Studies show that bank mergers can result in higher costs to consumers and decreased access to financial products, especially in rural areas. And when two large banks merge, it has even greater risks, potentially creating a bank that's too big to manage effectively or creating a new Too Big to Fail bank that could threaten financial stability.
When regulators consider a merger they are supposed to evaluate a number of factors, including: (1) whether the merger will create local monopolies for banking services; (2) whether the merged bank will be well managed; (3) whether the new bank creates risk to the financial system; and (4) the merger's effects on the public, including consumers. In practice, financial agencies almost exclusively focus their analyses on the impact of the merger on competitiveness and often pre-review the merger in secret with banks before they announce it publicly. As a result, the merger review practice lacks analytical rigor, and regulators serve as rubber stamps. Of the 3,819 bank merger applications the Fed received between 2006 and 2017, it did not decline a single one.
The Bank Merger Review Modernization Act strengthens and modernizes the statutory standards under which federal regulators analyze bank merger applications by:
- Guaranteeing that the Merger is in the Public Interest. The legislation clarifies and strengthens the public interest aspect of the merger review by:
- Requiring Consumer Financial Protection Bureau approval when at least one applicant offers consumer financial products;
- Strengthening the Community Reinvestment Act (CRA) by only allowing institutions with the highest rating in two out of three of their last CRA exams to merge; and
- Requiring transparent disclosure of discussions between the institutions and regulators before the merger application is filed.
- Safeguarding the Stability of the Financial System. The legislation requires regulators to use a quantifiable metric developed by the Basel Committee on Banking Supervision to evaluate systemic risk. The score is based on the size, interconnectedness, substitutability, complexity, and cross-jurisdictional activity of the institution.
- Requiring that Regulators Examine the Anticompetitive Effects on Individual Banking Products. The legislation requires regulators to examine how the merger would impact market concentration for individual banking products, such as commercial deposits, home mortgage lending, and small business lending rather than just the general availability of banking products in local markets.
- Ensuring that the Merged Bank has Adequate Financial and Managerial Resources. The legislation requires regulators to review the leadership of the merged institution to ensure that the selected individuals have strong records with respect to risk management. Larger institutions would also have their balance sheets examined to ensure that they will be on solid financial footing.
https://chuygarcia.house.gov/media/press-releases/representative-garc-and-senator-warren-announce-introduction-bank-merger-review
Huawei sues FCC over “unconstitutional” ban on the use of federal subsidies to buy its equipment
Catherine Shu@catherineshu / 1:15 am EST • December 5, 2019
Huawei said today it is suing the Federal Communications Commission, asking to overturn a ban on carriers from using money from the Universal Service Fund (USF) to buy equipment from Huawei and ZTE.
The $8.5 billion USF supports the purchase of equipment to build communications infrastructure, especially in rural communities. Huawei is asking the United States Court of Appeals for the Fifth Circuit to overrule the FCC’s order, passed on Nov. 22.
Small carriers buy equipment from Huawei and ZTE because it is dependable and cheap. According to a Reuters report, some carriers are considering Nokia and Ericsson for replacements, but their equipment is priced less competitively.
During a press conference in Shenzhen today, Glen Nager, Huawei’s lead counsel for the lawsuit, claimed the ban goes beyond the FCC’s authority and violates the constitution. “The order fails to give Huawei constitutionally required due process before stigmatizing it as a national security threat, such as an opportunity to confront supposed evidence and witnesses, and a fair and neutral hearing process,” he said.
Huawei chief legal officer Song Liuping claims that FCC chairman and Ajit Pai and other commissioners did not present evidence to back its claim that Huawei is a security threat.
“This is a common trend in Washington these days. ‘Huawei is a Chinese company.’ That’s his only excuse,” Song said. He also claimed that the FCC ignored 21 rounds of “detailed comments” submitted by Huawei to explain how the order would harm businesses in rural areas, adding “This decision, just like the Entity List decision in May, is based on politics, not security.”
In March, Huawei also cited the Constitution in another lawsuit filed against the U.S. government arguing that a ban on the use of its products by federal agencies and contractors violate due process.
From: https://techcrunch.com/2019/12/04/huawei-sues-fcc-over-unconstitutional-ban-the-use-of-federal-subsidies-to-buy-its-equipment/
Catherine Shu@catherineshu / 1:15 am EST • December 5, 2019
Huawei said today it is suing the Federal Communications Commission, asking to overturn a ban on carriers from using money from the Universal Service Fund (USF) to buy equipment from Huawei and ZTE.
The $8.5 billion USF supports the purchase of equipment to build communications infrastructure, especially in rural communities. Huawei is asking the United States Court of Appeals for the Fifth Circuit to overrule the FCC’s order, passed on Nov. 22.
Small carriers buy equipment from Huawei and ZTE because it is dependable and cheap. According to a Reuters report, some carriers are considering Nokia and Ericsson for replacements, but their equipment is priced less competitively.
During a press conference in Shenzhen today, Glen Nager, Huawei’s lead counsel for the lawsuit, claimed the ban goes beyond the FCC’s authority and violates the constitution. “The order fails to give Huawei constitutionally required due process before stigmatizing it as a national security threat, such as an opportunity to confront supposed evidence and witnesses, and a fair and neutral hearing process,” he said.
Huawei chief legal officer Song Liuping claims that FCC chairman and Ajit Pai and other commissioners did not present evidence to back its claim that Huawei is a security threat.
“This is a common trend in Washington these days. ‘Huawei is a Chinese company.’ That’s his only excuse,” Song said. He also claimed that the FCC ignored 21 rounds of “detailed comments” submitted by Huawei to explain how the order would harm businesses in rural areas, adding “This decision, just like the Entity List decision in May, is based on politics, not security.”
In March, Huawei also cited the Constitution in another lawsuit filed against the U.S. government arguing that a ban on the use of its products by federal agencies and contractors violate due process.
From: https://techcrunch.com/2019/12/04/huawei-sues-fcc-over-unconstitutional-ban-the-use-of-federal-subsidies-to-buy-its-equipment/
NFL Heads to the Supreme Court In TV Rights Case
A significant antitrust battle could upset how the league sells game telecasts for billions of dollars and usher in an era when teams would compete for licensing deals. ... NFL teams currently pool telecast rights to all live games and collectively negotiate licensing packages.
https://www.hollywoodreporter.com/thr-esq/nfl-tv-rights-why-league-aims-a-block-an-upheaval-1258901
The case of Boise v. Martin, a decade-old lawsuit, is examining whether it’s a crime for someone to sleep outside when they have nowhere else to go.
The case is now a step away from the Supreme Court.
The suit arose when a half-dozen homeless people claimed that local rules prohibiting camping on public property violated the Eighth Amendment protection against cruel and unusual punishment. The plaintiffs prevailed at the appellate level last year, putting the city at the center of a national debate on how to tackle homelessness. Now Boise — after hiring a powerhouse legal team that includes Theodore B. Olson and Theane Evangelis of Gibson, Dunn & Crutcher — has asked the Supreme Court to take the case, a decision that could come within days.
https://www.nytimes.com/2019/12/03/business/homeless-boise.html
In Utah (and perhaps some other places), high interest, small dollar loans are a big part of local small claims court matters
In Utah, payday lenders and similar companies that offer high-interest, small-dollar loans dominate small claims court. Loans for Less, for example, filed 95% of the small claims cases in South Ogden, a suburban city of 17,000 about a half-hour north of Salt Lake City on the interstate, in fiscal year 2018, according to state data.
Across Utah, high-interest lenders filed 66% of all small claims cases heard between September 2017 and September 2018, according to a new analysis of court records conducted by a team led by Christopher Peterson, a law professor at the University of Utah and the financial services director at the Consumer Federation of America, and David McNeill, a legal data consultant and CEO of Docket Reminder.
Companies can sue for up to $11,000 in Utah’s small claims courts, which are stripped of certain formalities: There are rarely lawyers, judges are not always legally trained and the rules of evidence don’t apply.
from: https://www.propublica.org/article/they-loan-you-money-then-they-get-a-warrant-for-your-arrest
In Utah, payday lenders and similar companies that offer high-interest, small-dollar loans dominate small claims court. Loans for Less, for example, filed 95% of the small claims cases in South Ogden, a suburban city of 17,000 about a half-hour north of Salt Lake City on the interstate, in fiscal year 2018, according to state data.
Across Utah, high-interest lenders filed 66% of all small claims cases heard between September 2017 and September 2018, according to a new analysis of court records conducted by a team led by Christopher Peterson, a law professor at the University of Utah and the financial services director at the Consumer Federation of America, and David McNeill, a legal data consultant and CEO of Docket Reminder.
Companies can sue for up to $11,000 in Utah’s small claims courts, which are stripped of certain formalities: There are rarely lawyers, judges are not always legally trained and the rules of evidence don’t apply.
from: https://www.propublica.org/article/they-loan-you-money-then-they-get-a-warrant-for-your-arrest
Bernie Sanders Slams MLB Over Minor League Contraction
by Kevin Reichard on November 26, 2019
DAR comment: Some media outlets are treating Bernie Sanders' comments on Major League Baseball as random fuming of an old guy from Brooklyn. Some people, like Senator Cruz, simply disagree with him. In fact, Sanders is commenting on the controversial issue of the great and sometimes misused power over employees that derives from government granted or sanctioned monopoly power of sports entities like MLB, the NFL, and the NCAA. Sanders suggests re-examining government policy on sports and antitrust.
The back story on the minor league contraction is that minor league player litigants won a significant procedural victory this past August in their litigation against Major League Baseball. That litigation alleged that illegally low wages were being paid to minor league players. See the article at https://ballparkdigest.com/2019/08/19/appeals-court-expands-scope-of-class-action-milb-player-wage-lawsuit/ The reaction from MLB apparently is to take away minor league balls and bats and partially close the minor league fields. The 11-26-2019 Kevin Reichard article, excerpts of which appear below, tells the story.
Presidential candidate and U.S. Senator Bernie Sanders (I-VT) took to Twitter to oppose Major League Baseball’s proposal to contract 42 Minor League Baseball teams, saying the move would “destroy thousands of jobs and devastate local economies.”
In negotiations for the next Professional Baseball Agreement (PBA) between Major League Baseball and Minor League Baseball, set to replace the current PBA that expires at the end of the 2020 season, MLB has put forth a series of proposals culminating in a current plan to eliminate 42 teams, restructure specific leagues, move the player draft back by two months and delay the first year of player signings by a season, and upgrade player facilities. In our coverage, we’ve outlined the proposals as well as the teams targeted for contraction, documented early political opposition to the proposal, and outlined what Minor League Baseball can do to address MLB concerns.
The arguments here are related to the economic impact of eliminating 42 teams and how local communities past the MiLB operators will be affected, along with the need to pay MiLB players a living wage. All true enough. But the real power in Sanders’ letter isn’t economic justice: it’s in the threats to examine the anti-trust exemption and revise exemptions for MLB that avoid overtime:
In other words, instead of paying Minor League Baseball players a living wage, it appears that the multi-millionaire and billionaire owners of Major League Baseball would rather throw them out on the street no matter how many fans, communities and workers get hurt in the process. If this is the type of attitude that Major League Baseball and its owners have then I think it’s time for Congress and the executive branch to seriously rethink and reconsider all the benefits it has bestowed to the league including, but not limited to, its anti-trust exemption.
The Sanders tweet and letter can be viewed here: https://twitter.com/BernieSanders/status/1199027511604260870
The 11-26-2019 Richards article is at https://ballparkdigest.com/2019/11/26/sanders-slams-mlb-over-contraction-everything-to-do-with-greed/
by Kevin Reichard on November 26, 2019
DAR comment: Some media outlets are treating Bernie Sanders' comments on Major League Baseball as random fuming of an old guy from Brooklyn. Some people, like Senator Cruz, simply disagree with him. In fact, Sanders is commenting on the controversial issue of the great and sometimes misused power over employees that derives from government granted or sanctioned monopoly power of sports entities like MLB, the NFL, and the NCAA. Sanders suggests re-examining government policy on sports and antitrust.
The back story on the minor league contraction is that minor league player litigants won a significant procedural victory this past August in their litigation against Major League Baseball. That litigation alleged that illegally low wages were being paid to minor league players. See the article at https://ballparkdigest.com/2019/08/19/appeals-court-expands-scope-of-class-action-milb-player-wage-lawsuit/ The reaction from MLB apparently is to take away minor league balls and bats and partially close the minor league fields. The 11-26-2019 Kevin Reichard article, excerpts of which appear below, tells the story.
Presidential candidate and U.S. Senator Bernie Sanders (I-VT) took to Twitter to oppose Major League Baseball’s proposal to contract 42 Minor League Baseball teams, saying the move would “destroy thousands of jobs and devastate local economies.”
In negotiations for the next Professional Baseball Agreement (PBA) between Major League Baseball and Minor League Baseball, set to replace the current PBA that expires at the end of the 2020 season, MLB has put forth a series of proposals culminating in a current plan to eliminate 42 teams, restructure specific leagues, move the player draft back by two months and delay the first year of player signings by a season, and upgrade player facilities. In our coverage, we’ve outlined the proposals as well as the teams targeted for contraction, documented early political opposition to the proposal, and outlined what Minor League Baseball can do to address MLB concerns.
The arguments here are related to the economic impact of eliminating 42 teams and how local communities past the MiLB operators will be affected, along with the need to pay MiLB players a living wage. All true enough. But the real power in Sanders’ letter isn’t economic justice: it’s in the threats to examine the anti-trust exemption and revise exemptions for MLB that avoid overtime:
In other words, instead of paying Minor League Baseball players a living wage, it appears that the multi-millionaire and billionaire owners of Major League Baseball would rather throw them out on the street no matter how many fans, communities and workers get hurt in the process. If this is the type of attitude that Major League Baseball and its owners have then I think it’s time for Congress and the executive branch to seriously rethink and reconsider all the benefits it has bestowed to the league including, but not limited to, its anti-trust exemption.
The Sanders tweet and letter can be viewed here: https://twitter.com/BernieSanders/status/1199027511604260870
The 11-26-2019 Richards article is at https://ballparkdigest.com/2019/11/26/sanders-slams-mlb-over-contraction-everything-to-do-with-greed/
Delrahim says Big Tech probe focused on abuse of dataI
-
November 26, 2019
The Department of Justice’s investigation into online platforms is focused on the possibility that tech firms could use data they’ve gathered from customers to block competitors from markets they manage, according to the agency’s top antitrust official.
“If we found that they had market power in a specific, you know, in a defined market, and they have data that they could use to prevent a competitor from challenging that market? Then that could be a violation, yes, absolutely,” Assistant Attorney General Makan Delrahim told the Washington Examiner, referring to big tech corporations such as Facebook and Google.
The “defined markets” in question, Delrahim said, could be the search industry or social media. “Our investigation is focused on” the potential abuse of data by online platforms, he said.
Delrahim also noted that the DOJ was “trying to identify what other [harmful] conduct could go on in any of these, by any of these companies.”
The investigation on the use of data could put increased scrutiny on big tech companies that are already under significant pressure from Congress, regulatory agencies, and the public at large.
“This definitely seems like a trend emerging, of a focus by [Delrahim] and others on zero-price markets and the value of data,” said John Newman, a DOJ antitrust lawyer during the Obama administration and an associate professor of law at the University of Miami. “I think it’s a good sign, and I hope to see future development.”
Full Content: Washington Examiner https://www.washingtonexaminer.com/policy/economy/big-tech-investigation-focused-on-abuse-of-data-doj-antitrust-chief-says
Apple, Square Apply Early for Tariff Exemptions as List 4A Process Opens
Sounce: http://www.ftz9.org/wp-content/uploads/2019/11/TRADE-NEWS-WEEKLY-2019-November-4-November-8.pdf
DAR Comment: The 67% success rate reported for Apple suggests that Apple is doing well in exempting Chinese made components from tariffs; we lack information about whether Apple rivals are doing equally well.
The U.S. government has opened the process to request exemptions from “List 4A” tariffs on Chinese exports that were applied in September. As of November 3, 148 exemptions had been filed – on the basis of List 3 applications that could eventually reach 16,000. Given only 7.1% of List 3 filings have been assessed, List 4A applicants could be waiting a long time for a decision.
Among early List 4A filers is Apple, with 11 applications covering its iMac, Apple Watch and Airpod ranges. Apple had a 67% success rate in its List 3 applications.
Other filers in the electronics sector for List 4A include Square and Specialty Technologies. The bulk of List 4A filings by number so far though are in the leisure sector including shipments by Sea Eagle Boats which has had a 38.9% success rate in List 3 requests.
Sounce: http://www.ftz9.org/wp-content/uploads/2019/11/TRADE-NEWS-WEEKLY-2019-November-4-November-8.pdf
DAR Comment: The 67% success rate reported for Apple suggests that Apple is doing well in exempting Chinese made components from tariffs; we lack information about whether Apple rivals are doing equally well.
The U.S. government has opened the process to request exemptions from “List 4A” tariffs on Chinese exports that were applied in September. As of November 3, 148 exemptions had been filed – on the basis of List 3 applications that could eventually reach 16,000. Given only 7.1% of List 3 filings have been assessed, List 4A applicants could be waiting a long time for a decision.
Among early List 4A filers is Apple, with 11 applications covering its iMac, Apple Watch and Airpod ranges. Apple had a 67% success rate in its List 3 applications.
Other filers in the electronics sector for List 4A include Square and Specialty Technologies. The bulk of List 4A filings by number so far though are in the leisure sector including shipments by Sea Eagle Boats which has had a 38.9% success rate in List 3 requests.
WIlliam Morris Endeavor v. Writers Guild of America
The lawsuit was filed this past summer by William Morris Endeavor, Creative Artists Agency, and United Talent Agency, who argue that the guild is participating in an “illegal boycott” by having thousands of its writers terminate their representation in order to pressure the agencies to eliminate packaging fees. The WGA argues that antitrust laws preventing illegal boycotts do not apply to them, citing labor laws that allow for unions to improve their working conditions through self-organizing.
But in a legal brief filed Tuesday, November 26, the USDOJ argued that use of labor exemptions in this case is “not so facile” as the WGA membership’s mass termination of agency representation included TV showrunners who can hold other roles on a project, most commonly as a producer.
“While any construction of the labor exemptions must allow unions to restrict competition in labor markets in pursuit of legitimate labor law goals, courts must also be careful to circumscribe the application of these exemptions lest unions be ‘giv[en] free rein to extend their substantial economic power into markets for goods and services other than labor.’”
Full Content: The Wrap, Forbes https://www.forbes.com/sites/jillgoldsmith/2019/11/27/doj-antitrust-chief-boosts-talent-agencies-in-court-battle-with-wga/#353d81594f81
The lawsuit was filed this past summer by William Morris Endeavor, Creative Artists Agency, and United Talent Agency, who argue that the guild is participating in an “illegal boycott” by having thousands of its writers terminate their representation in order to pressure the agencies to eliminate packaging fees. The WGA argues that antitrust laws preventing illegal boycotts do not apply to them, citing labor laws that allow for unions to improve their working conditions through self-organizing.
But in a legal brief filed Tuesday, November 26, the USDOJ argued that use of labor exemptions in this case is “not so facile” as the WGA membership’s mass termination of agency representation included TV showrunners who can hold other roles on a project, most commonly as a producer.
“While any construction of the labor exemptions must allow unions to restrict competition in labor markets in pursuit of legitimate labor law goals, courts must also be careful to circumscribe the application of these exemptions lest unions be ‘giv[en] free rein to extend their substantial economic power into markets for goods and services other than labor.’”
Full Content: The Wrap, Forbes https://www.forbes.com/sites/jillgoldsmith/2019/11/27/doj-antitrust-chief-boosts-talent-agencies-in-court-battle-with-wga/#353d81594f81
Dentists’ Group joins antitrust suits against Delta Dental
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November 28, 2019
The American Dental Association accused Delta Dental Insurance of monopolizing dental insurance, entering a dispute in Chicago federal court that began with a wave of lawsuits filed by dental practices last month.
The antitrust suits target Delta and its independent affiliates, which form a nationwide insurance network analogous to the Blue Cross Blue Shield Association led by Anthem.
The Delta entities are accused of undermining competition by illegally dividing the country into 39 separate geographic markets, according to the proposed class actions filed in the US District Court for the Northern District of Illinois.
Full Content: Law 360
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November 28, 2019
The American Dental Association accused Delta Dental Insurance of monopolizing dental insurance, entering a dispute in Chicago federal court that began with a wave of lawsuits filed by dental practices last month.
The antitrust suits target Delta and its independent affiliates, which form a nationwide insurance network analogous to the Blue Cross Blue Shield Association led by Anthem.
The Delta entities are accused of undermining competition by illegally dividing the country into 39 separate geographic markets, according to the proposed class actions filed in the US District Court for the Northern District of Illinois.
Full Content: Law 360
The Maryland Consumer Rights Coalition Guide to Buying a Used Car
The MCRC offers a booklet of value to consumers interested in buying a used car. It's value extends beyond Maryland borders.
For lawyers who are interested in reaching out to lay people and offering consumer buying guidance, the booklet is a good teaching tool that could be used in community settings like libraries or churches.
The booklet can be found here: http://www.marylandconsumers.org/penn_station/folders/issues/auto/new__used/How_to_Buy_a_Used_Car.pdf?eType=EmailBlastContent&eId=2c326cc9-d3c7-4af3-894f-ba7202928d0b
The MCRC offers a booklet of value to consumers interested in buying a used car. It's value extends beyond Maryland borders.
For lawyers who are interested in reaching out to lay people and offering consumer buying guidance, the booklet is a good teaching tool that could be used in community settings like libraries or churches.
The booklet can be found here: http://www.marylandconsumers.org/penn_station/folders/issues/auto/new__used/How_to_Buy_a_Used_Car.pdf?eType=EmailBlastContent&eId=2c326cc9-d3c7-4af3-894f-ba7202928d0b
From PBS: Reveal investigation suggests that Indiana government may have side-tracked investigation of Amazon management's role in death of employee injured by a fork lift in an Amazon warehouse
"One particular incident in Indiana raises questions about how regulators and government officials deal with potential safety violations at the global company. Will Evans of Reveal from The Center for Investigative Reporting reports."
From the PBS Newshour program transcript:
https://www.pbs.org/newshour/show/investigation-raises-alarm-about-handling-of-worker-fatality-at-indiana-amazon-facility
"One particular incident in Indiana raises questions about how regulators and government officials deal with potential safety violations at the global company. Will Evans of Reveal from The Center for Investigative Reporting reports."
From the PBS Newshour program transcript:
- Reporter Will Evans:
[Former Indiana investigator] Stallone believes the way regulators bent over backwards to help Amazon just makes accidents more likely to happen in the future. - John Stallone:
You are gambling with people's lives every day. And that doesn't seem like you should get a pass. You have to hold people's feet to the fire. You have to be accountable for what they did or didn't provide.
https://www.pbs.org/newshour/show/investigation-raises-alarm-about-handling-of-worker-fatality-at-indiana-amazon-facility
Amazon admits to Congress that it uses ‘aggregated’ data from third-party sellers to come up with its own products
CNBC – In newly released answers to a House panel investigating four Big Tech firms, Amazon maintained it does not use data from individual third-party sellers to come up with its own products. But it does use “aggregated data” to inform its private label brands, the company said.
http://maestro.abanet.org/trk/click?ref=z11aidwdq5_0-3e8e4x3e6f10x0249&
The NFL monopoly v. Kaepernick
Recently, TMZ Sports reported that Rep. Hank Johnson (Democrat from Georgia says he believes Kaepernick is the "victim" ... because the NFL orchestrated a league-wide ban on the QB because he "exercised his 1st Amendment right."
"It's possible that Congress can do something," Johnson says . . . "Congress oversees the anti-trust exemption that we gave the NFL. The NFL is doing quite well with that anti-trust exemption, maybe it's time for us to take a fresh look at it."
The anti-trust exemption is the law President Kennedy signed back in the day which allows the individual teams to work together as a monopoly to negotiate more lucrative broadcasting deals.
See https://www.tmz.com/2019/11/19/hank-johnson-nfl-congress-anti-trust-exemption-colin-kaepernick/
NBC Sports columnist Mike Florio believes that the NFL flexed its monopolist’s muscle when it arranged a display work-out for Kaepernick to which team scouts were invited. Florio argues that the waiver the NFL wanted Kaepernick to sign, and that Kaepernick refused, was prejudicial to Kaepernick. Florio writes:
In their statement from Saturday afternoon, Kaepernick’s representatives said that “the NFL has demanded that as a precondition to the workout, Mr. Kaepernick sign an unusual liability waiver that addresses employment-related issues and rejected the standard liability waiver from physical injury proposed by Mr. Kaepernick’s representatives.” Based on the language of the waiver, that’s an overstatement of its specific contents.
That said, there’s enough language in the waiver to give a prudent, careful lawyer legitimate concern that an aggressive litigator would later argue that signing the document defeats all potential employment claims that Kaepernick could have made.
Are Johnson and Florio right? Here’s a link to the proposed waiver. You decide: https://nbcprofootballtalk.files.wordpress.com/2019/11/nov-16-workout-release-and-waiver.pdf
Posting by Don Allen Resnikoff, who is responsible for the content
Recently, TMZ Sports reported that Rep. Hank Johnson (Democrat from Georgia says he believes Kaepernick is the "victim" ... because the NFL orchestrated a league-wide ban on the QB because he "exercised his 1st Amendment right."
"It's possible that Congress can do something," Johnson says . . . "Congress oversees the anti-trust exemption that we gave the NFL. The NFL is doing quite well with that anti-trust exemption, maybe it's time for us to take a fresh look at it."
The anti-trust exemption is the law President Kennedy signed back in the day which allows the individual teams to work together as a monopoly to negotiate more lucrative broadcasting deals.
See https://www.tmz.com/2019/11/19/hank-johnson-nfl-congress-anti-trust-exemption-colin-kaepernick/
NBC Sports columnist Mike Florio believes that the NFL flexed its monopolist’s muscle when it arranged a display work-out for Kaepernick to which team scouts were invited. Florio argues that the waiver the NFL wanted Kaepernick to sign, and that Kaepernick refused, was prejudicial to Kaepernick. Florio writes:
In their statement from Saturday afternoon, Kaepernick’s representatives said that “the NFL has demanded that as a precondition to the workout, Mr. Kaepernick sign an unusual liability waiver that addresses employment-related issues and rejected the standard liability waiver from physical injury proposed by Mr. Kaepernick’s representatives.” Based on the language of the waiver, that’s an overstatement of its specific contents.
That said, there’s enough language in the waiver to give a prudent, careful lawyer legitimate concern that an aggressive litigator would later argue that signing the document defeats all potential employment claims that Kaepernick could have made.
Are Johnson and Florio right? Here’s a link to the proposed waiver. You decide: https://nbcprofootballtalk.files.wordpress.com/2019/11/nov-16-workout-release-and-waiver.pdf
Posting by Don Allen Resnikoff, who is responsible for the content
Warren vows to conduct antitrust investigation of electronic health records (EHR) market
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November 19, 2019As part of her healthcare plan for the first 100 days in office, Democratic presidential hopeful Sen. Elizabeth Warren of Massachusetts zeroed in on the electronic health records (EHR) industry for its lack of interoperability and competition, she reported on her website. [https://elizabethwarren.com/plans/m4a-transition]
“Congress spent $36 billion to get every doctor in America using EHRs, but we still do not have adequate digital information flow in healthcare — in part because two big companies make up about 85 percent of the market for medical records at big hospitals,” she wrote in her healthcare transition plan.
Ms. Warren pledged to go after health systems and IT companies that engage in information blocking. She also said she will launch an antitrust probe of the EHR market, led by the Federal Trade Commission and the Department of Justice.
Full Content: Elizabeth Warrenhttps://www.pymnts.com/antitrust/2019/big-tech-antitrust-examination-by-ags-gathers-steam/
-
November 19, 2019As part of her healthcare plan for the first 100 days in office, Democratic presidential hopeful Sen. Elizabeth Warren of Massachusetts zeroed in on the electronic health records (EHR) industry for its lack of interoperability and competition, she reported on her website. [https://elizabethwarren.com/plans/m4a-transition]
“Congress spent $36 billion to get every doctor in America using EHRs, but we still do not have adequate digital information flow in healthcare — in part because two big companies make up about 85 percent of the market for medical records at big hospitals,” she wrote in her healthcare transition plan.
Ms. Warren pledged to go after health systems and IT companies that engage in information blocking. She also said she will launch an antitrust probe of the EHR market, led by the Federal Trade Commission and the Department of Justice.
Full Content: Elizabeth Warrenhttps://www.pymnts.com/antitrust/2019/big-tech-antitrust-examination-by-ags-gathers-steam/
Norwegian salmon giants receive US subpoenas in price-fixing probe
By
CPI
-
November 17, 2019
The US Department of Justice (DOJ) will subpoena Mowi as part of a criminal investigation into alleged price-fixing of Atlantic salmon markets, the company disclosed.
Fellow salmon farmers Grieg Seafood and its sales arm Ocean Quality, which is co-owned with Bremnes Seashore, another Norwegian farmer, also received subpoenas, those companies stated. SalMar also confirmed a subpoena, but Leroy Seafood Group has not yet.
According to a press release, Mowi was informed it will receive a subpoena from the DOJ’s Antitrust Division “in the USA where they are opening a criminal investigation involving allegations of similar conduct,” reported Yahoo.
The news follows a previous investigation opened by the European Commission and related civil lawsuits alleging price-fixing from US consumers.
From:https://finance.yahoo.com/news/u-joins-antitrust-push-against-065644141.html
By
CPI
-
November 17, 2019
The US Department of Justice (DOJ) will subpoena Mowi as part of a criminal investigation into alleged price-fixing of Atlantic salmon markets, the company disclosed.
Fellow salmon farmers Grieg Seafood and its sales arm Ocean Quality, which is co-owned with Bremnes Seashore, another Norwegian farmer, also received subpoenas, those companies stated. SalMar also confirmed a subpoena, but Leroy Seafood Group has not yet.
According to a press release, Mowi was informed it will receive a subpoena from the DOJ’s Antitrust Division “in the USA where they are opening a criminal investigation involving allegations of similar conduct,” reported Yahoo.
The news follows a previous investigation opened by the European Commission and related civil lawsuits alleging price-fixing from US consumers.
From:https://finance.yahoo.com/news/u-joins-antitrust-push-against-065644141.html
New Bill to Shine a Light on the Hidden Causes of Foodborne Illness Outbreaks
Consumer Groups Applaud Effort to Give Food Safety Regulators Critically Needed Authority to Collect Microbiological Samples
November 22, 2019 | Press Release
Washington D.C. — Senator Kirsten Gillibrand yesterday introduced a bill that would give federal investigators at the U.S. Food and Drug Administration (FDA) a new tool to solve foodborne illness outbreaks. Members of the Safe Food Coalition say the bill is more important than ever in light of yet another outbreak linked to romaine lettuce, which today led FDA to advise consumers not to eat, and retailers not to sell, any romaine lettuce harvested from the Salinas, California growing region.
Titled the Expanded Food Safety Investigation Act of 2019, the bill would give FDA the authority to conduct microbiological sampling on concentrated animal feeding operations (CAFOs) so that foodborne illness outbreak investigators can trace back the source of pathogens like the E. coli O157:H7 bacteria linked to Romaine lettuce produced in the Yuma growing region, which killed five people last year. Congresswoman DeLauro, chair of the Congressional Food Safety Caucus, is expected to introduce a companion bill in the House later this year.
Members of the Safe Food Coalition welcomed the introduction of the bill. Under current law, federal authorities need permission to enter the premises of a CAFO to conduct sampling in connection with a foodborne illness outbreak investigation. This limitation came to the forefront during last year’s Yuma Romaine lettuce E. coli O157:H7 outbreak. Samples taken from canal water in the area suggested that the source of the outbreak may have been a large concentrated animal feeding operation in the area. Investigators were permitted to take only limited samples on the operation and were not able to identify the outbreak strain among these.
from https://consumerfed.org/press_release/new-bill-to-shine-a-light-on-the-hidden-causes-of-foodborne-illness-outbreaks/
Consumer Groups Applaud Effort to Give Food Safety Regulators Critically Needed Authority to Collect Microbiological Samples
November 22, 2019 | Press Release
Washington D.C. — Senator Kirsten Gillibrand yesterday introduced a bill that would give federal investigators at the U.S. Food and Drug Administration (FDA) a new tool to solve foodborne illness outbreaks. Members of the Safe Food Coalition say the bill is more important than ever in light of yet another outbreak linked to romaine lettuce, which today led FDA to advise consumers not to eat, and retailers not to sell, any romaine lettuce harvested from the Salinas, California growing region.
Titled the Expanded Food Safety Investigation Act of 2019, the bill would give FDA the authority to conduct microbiological sampling on concentrated animal feeding operations (CAFOs) so that foodborne illness outbreak investigators can trace back the source of pathogens like the E. coli O157:H7 bacteria linked to Romaine lettuce produced in the Yuma growing region, which killed five people last year. Congresswoman DeLauro, chair of the Congressional Food Safety Caucus, is expected to introduce a companion bill in the House later this year.
Members of the Safe Food Coalition welcomed the introduction of the bill. Under current law, federal authorities need permission to enter the premises of a CAFO to conduct sampling in connection with a foodborne illness outbreak investigation. This limitation came to the forefront during last year’s Yuma Romaine lettuce E. coli O157:H7 outbreak. Samples taken from canal water in the area suggested that the source of the outbreak may have been a large concentrated animal feeding operation in the area. Investigators were permitted to take only limited samples on the operation and were not able to identify the outbreak strain among these.
from https://consumerfed.org/press_release/new-bill-to-shine-a-light-on-the-hidden-causes-of-foodborne-illness-outbreaks/
From DMN:There’s Hope for Radio Reform, After All — Congress Introduces the ‘AM-FM Act’ to Overhaul Terrestrial Copyright Laws
US-based terrestrial radio stations don’t pay royalties on the broadcast of recordings. The newly-introduced ‘AM-FM Act’ is aiming to change that.
The story continues here. https://www.digitalmusicnews.com/2019/11/21/am-fm-act-terrestrial-radio/
US-based terrestrial radio stations don’t pay royalties on the broadcast of recordings. The newly-introduced ‘AM-FM Act’ is aiming to change that.
The story continues here. https://www.digitalmusicnews.com/2019/11/21/am-fm-act-terrestrial-radio/
Amid National Dairy Crisis, Milk Monopolists Discuss Fire-Sale Merger
Dean Foods, America’s largest dairy processor, filed for Chapter 11 bankruptcy last week, citing declining milk consumption. The producer of Dairy Pure, TruMoo, Land O’ Lakes, and more than 50 other brands also announced that it is in advanced talks to sell to Dairy Farmers of America (DFA), a cooperative that handles roughly 30 percent of all raw milk in the United States.
The merger raises concerns for dairy farmers, who have brought several class-action antitrust suits against DFA for its monopolistic control over raw milk markets and for collusion… with Dean Foods.
A Dean Foods-DFA merger would expand DFA’s control over raw milk markets and put the co-op in a dominant position to raise milk prices for consumers and lower prices paid to farmers, at a time when dairy farms are going under at a historic clip.
Read Claire Kelloway’s full story in the Washington Monthly here.https://openmarketsinstitute.cmail20.com/t/j-l-ctykylk-jldufuylr-h/
Dean Foods, America’s largest dairy processor, filed for Chapter 11 bankruptcy last week, citing declining milk consumption. The producer of Dairy Pure, TruMoo, Land O’ Lakes, and more than 50 other brands also announced that it is in advanced talks to sell to Dairy Farmers of America (DFA), a cooperative that handles roughly 30 percent of all raw milk in the United States.
The merger raises concerns for dairy farmers, who have brought several class-action antitrust suits against DFA for its monopolistic control over raw milk markets and for collusion… with Dean Foods.
A Dean Foods-DFA merger would expand DFA’s control over raw milk markets and put the co-op in a dominant position to raise milk prices for consumers and lower prices paid to farmers, at a time when dairy farms are going under at a historic clip.
Read Claire Kelloway’s full story in the Washington Monthly here.https://openmarketsinstitute.cmail20.com/t/j-l-ctykylk-jldufuylr-h/
Federal attorneys do pro bono work
A brief excerpt from an article in the November/December Washington Lawyer Magazine
By Sarah Kellogg
Pro bono service is deeply embedded in the legal profession in the UnitedStates, from Big Law to solo prac tices to federa l agencies. The work is more passion than occu pat ion, an inclination toward public service, whether
an attorney coun sels a nonprofit organizat ion, a fledgling small business, or a vulnerable individual in need of legal help.
Today, some 50 federal departments and agencies are part of the Federal Government Pro Bono Program, which operates out of the Justic e Department and administers govern ment-wide pro bone activities not only in Washington, D.C., but also in Chicago, New York City, San Francisco, Denver, and Dallas. In most agencies, a pro bono coordinator works with
a committee to oversee the processand recruit volunteers.
That this human resource went untapped - or severely underu tilized- for many years is
unfortunate.
http://washingtonlawyer.dcbar.org/november2019/index.php#/4
A brief excerpt from an article in the November/December Washington Lawyer Magazine
By Sarah Kellogg
Pro bono service is deeply embedded in the legal profession in the UnitedStates, from Big Law to solo prac tices to federa l agencies. The work is more passion than occu pat ion, an inclination toward public service, whether
an attorney coun sels a nonprofit organizat ion, a fledgling small business, or a vulnerable individual in need of legal help.
Today, some 50 federal departments and agencies are part of the Federal Government Pro Bono Program, which operates out of the Justic e Department and administers govern ment-wide pro bone activities not only in Washington, D.C., but also in Chicago, New York City, San Francisco, Denver, and Dallas. In most agencies, a pro bono coordinator works with
a committee to oversee the processand recruit volunteers.
That this human resource went untapped - or severely underu tilized- for many years is
unfortunate.
http://washingtonlawyer.dcbar.org/november2019/index.php#/4
Tim Wu's Antitrust Revival Reading List
by Tim Wu
Nov 18 · 3 min read
The following are books, articles and study that make up the antitrust revival. I include here work both belonging to the so-called New Brandeis school, and also the Neo-Arnoldian, or Post-Chicago schools.
This list is a work in progress and certainly not meant to be definitive. If there’s something missing, please email me and I’ll add it.
Books in Print
The Curse of Bigness, Tim Wu
Goliath, Matt Stoller
The Antitrust Paradigm, Restoring a Competitive Economy, Jonathan B. Baker
Radical Markets: Uprooting Capitalism and Democracy for a Just Society, Eric Posner, Glen Weyl
People, Power, and Profits: Progressive Capitalism for an Age of Discontent, Joseph E. Stiglitz
The Myth of Capitalism: Monopolies and the Death of Competition, Jonathan Tepper, Denise Hearn
Big Data and Competition Policy, Maurice Stucke & Allen Grunes
Cornered: The New Monopoly Capitalism and the Economics of Destruction, Barry Lynn
Coming Soon
Competition Overdose: How Free Market Mythology Transformed Us from Citizen Kings to Market Servants, Ariel Ezrachi, Maurice E. Stucke
Break ’Em Up: Recovering Our Freedom from Big Ag, Big Tech, and Big Money, Zephyr Teachout
Articles, Studies & Symposia
Amazon’s Antitrust Paradox, Lina Khan
The Separation of Platforms and Commerce, Lina Khan
Are U.S. Industries Becoming More Concentrated?, Gustavo Grullon, Yelena Larkin, Roni Michaely
Antitrust’s Democracy Deficit, Harry First & Spencer Weber Waller
Reassessing the Chicago School of Antitrust Symposium, forthcoming 2020, Pennsylvania Law Review.
Unlocking Antitrust Enforcement, Symposium, Yale Law Journal
The Profound Nonsense of Consumer Welfare Antitrust, Sandeep Vaheesan
Market Power & Inequality, Lina Khan & Sandeep Vaheesan
The Ideological Roots of America’s Market Power Problem, Lina Khan
The New Brandeis Movement, Lina Khan
The Unsound Theory Behind the Consumer (and Total) Welfare Goal in Antitrust, Mark Glick
American Gothic: How Chicago School Economics Distorts ‘Consumer Welfare’ in Antitrust, Mark Glick
Does the Rule of Reason Violate the Rule of Law?, Maurice Stucke
The Battle for the Soul of Antitrust, Eleanor Fox
Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged, Robert Lande
After Consumer Welfare, Now What?, Tim Wu
Blind Spot: The Attention Economy and the Law, Tim Wu
The New Utilities: Private Power, Social Infrastructure, and the Revival of the Public Utility Concept, K Sabeel Rahman
Horizontal Shareholding, Einer Elhauge
Tying, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, Einer Elhaughe
Horizontal Shareholding and Antitrust Policy, Fiona Morton Scott, Herbert Hovenkamp
A Proposal to Limit the Anti-Competitive Power of Institutional Investors, Eric Posner, Fiona Morton Scott, E. Glen Weyl
Powerless, Marshall Steinbaum, Eric Bernstein, John Sturm
Concentration in US Labor Markets, José Azar, Ioana Marinescu, Marshall Steinbaum, Bledi Taska
Accommodating Capital and Policing Labor: Antitrust in the Two Gilded Ages, Sandeep Vaheesan
Predatory Pricing and Recoupment, Christopher R. Leslie
The Effective Competition Standard, Marshall Steinbaum, Maurice E. Stucke
Artificial Intelligence & Collusion: When Computers Inhibit Competition, Maurice Stucke
Reconsidering Competition, Maurice Stucke
America’s Concentration Crisis, Open Markets Institute
The Worst Opinion in Living Memory: AT&T/Time Warner and America’s Broken Merger Law, Chris Sagers
Market Structure and Political Law: A Taxonomy of Power, Zephyr Teachout, Lina Khan
Corporate Rules and Political Rules: Antitrust as Campaign Finance Reform, Zephyr Teachout
Antitrust Remedies for Labor Market Power, Suresh Naidu, Eric Posner, E. Glen Weyl
The Antitrust Consumer Welfare Paradox, Barak Orbach
Antitrust Populism, Barak Orbach
Antitrust As Allocator of Coordination Rights, Sanjukta Paul
by Tim Wu
Nov 18 · 3 min read
The following are books, articles and study that make up the antitrust revival. I include here work both belonging to the so-called New Brandeis school, and also the Neo-Arnoldian, or Post-Chicago schools.
This list is a work in progress and certainly not meant to be definitive. If there’s something missing, please email me and I’ll add it.
Books in Print
The Curse of Bigness, Tim Wu
Goliath, Matt Stoller
The Antitrust Paradigm, Restoring a Competitive Economy, Jonathan B. Baker
Radical Markets: Uprooting Capitalism and Democracy for a Just Society, Eric Posner, Glen Weyl
People, Power, and Profits: Progressive Capitalism for an Age of Discontent, Joseph E. Stiglitz
The Myth of Capitalism: Monopolies and the Death of Competition, Jonathan Tepper, Denise Hearn
Big Data and Competition Policy, Maurice Stucke & Allen Grunes
Cornered: The New Monopoly Capitalism and the Economics of Destruction, Barry Lynn
Coming Soon
Competition Overdose: How Free Market Mythology Transformed Us from Citizen Kings to Market Servants, Ariel Ezrachi, Maurice E. Stucke
Break ’Em Up: Recovering Our Freedom from Big Ag, Big Tech, and Big Money, Zephyr Teachout
Articles, Studies & Symposia
Amazon’s Antitrust Paradox, Lina Khan
The Separation of Platforms and Commerce, Lina Khan
Are U.S. Industries Becoming More Concentrated?, Gustavo Grullon, Yelena Larkin, Roni Michaely
Antitrust’s Democracy Deficit, Harry First & Spencer Weber Waller
Reassessing the Chicago School of Antitrust Symposium, forthcoming 2020, Pennsylvania Law Review.
Unlocking Antitrust Enforcement, Symposium, Yale Law Journal
The Profound Nonsense of Consumer Welfare Antitrust, Sandeep Vaheesan
Market Power & Inequality, Lina Khan & Sandeep Vaheesan
The Ideological Roots of America’s Market Power Problem, Lina Khan
The New Brandeis Movement, Lina Khan
The Unsound Theory Behind the Consumer (and Total) Welfare Goal in Antitrust, Mark Glick
American Gothic: How Chicago School Economics Distorts ‘Consumer Welfare’ in Antitrust, Mark Glick
Does the Rule of Reason Violate the Rule of Law?, Maurice Stucke
The Battle for the Soul of Antitrust, Eleanor Fox
Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged, Robert Lande
After Consumer Welfare, Now What?, Tim Wu
Blind Spot: The Attention Economy and the Law, Tim Wu
The New Utilities: Private Power, Social Infrastructure, and the Revival of the Public Utility Concept, K Sabeel Rahman
Horizontal Shareholding, Einer Elhauge
Tying, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, Einer Elhaughe
Horizontal Shareholding and Antitrust Policy, Fiona Morton Scott, Herbert Hovenkamp
A Proposal to Limit the Anti-Competitive Power of Institutional Investors, Eric Posner, Fiona Morton Scott, E. Glen Weyl
Powerless, Marshall Steinbaum, Eric Bernstein, John Sturm
Concentration in US Labor Markets, José Azar, Ioana Marinescu, Marshall Steinbaum, Bledi Taska
Accommodating Capital and Policing Labor: Antitrust in the Two Gilded Ages, Sandeep Vaheesan
Predatory Pricing and Recoupment, Christopher R. Leslie
The Effective Competition Standard, Marshall Steinbaum, Maurice E. Stucke
Artificial Intelligence & Collusion: When Computers Inhibit Competition, Maurice Stucke
Reconsidering Competition, Maurice Stucke
America’s Concentration Crisis, Open Markets Institute
The Worst Opinion in Living Memory: AT&T/Time Warner and America’s Broken Merger Law, Chris Sagers
Market Structure and Political Law: A Taxonomy of Power, Zephyr Teachout, Lina Khan
Corporate Rules and Political Rules: Antitrust as Campaign Finance Reform, Zephyr Teachout
Antitrust Remedies for Labor Market Power, Suresh Naidu, Eric Posner, E. Glen Weyl
The Antitrust Consumer Welfare Paradox, Barak Orbach
Antitrust Populism, Barak Orbach
Antitrust As Allocator of Coordination Rights, Sanjukta Paul
UN leads bid for cheaper insulin, expanding access for diabetics worldwide
13 November 2019
Health
Overly expensive insulin could be a thing of the past – and life-changing news – for millions of diabetics under a plan launched by the World Health Organization (WHO) on Wednesday to diversify production globally, just ahead of World Diabetes Day.
Announcing the initiative in Geneva, the UN agency said that it had already had informal expressions of interest from pharmaceutical companies looking to produce insulin and have WHO assess whether it is safe for people to use.
“The simple fact is, that the prevalence of diabetes is growing, the amount of insulin available to treat diabetes is too low, the prices are too high, so we need to do something,” said Emer Cooke, Director of Regulation of Medicines and other Health Technologies at WHO.
Coinciding with the project launch, which comes ahead of World Diabetes Day marked each 14 November, UN Secretary-General António Guterres highlighted the impact of “catastrophic” medical expenses on sufferers.
“Diabetes damages health and undermines educational and employment aspirations for many, affecting communities and forcing families into economic hardship”, he said, particularly in low and middle-income countries.
The WHO’s two-year pilot project, unveiled on Wednesday, involves the evaluation of insulin developed by manufacturers to ensure their quality, safety, efficacy and affordability.
Room for expansion of diabetic care
Assuming there is enough interest from manufacturers and, crucially, more insulin available for diabetics, the scheme could be expanded more widely.
“We’re going to look at the number of companies that will apply, we’re going to look at how long it takes, we’re going to look at the outcomes and we’re going to see whether this makes sense and it really is increasing access”, Ms. Cooke said.
The procedure is known as prequalification and WHO has done it in the past for non-brand vaccines, including those used to treat TB, malaria and HIV.
This had resulted in massive savings for sufferers around the world, with 80 per cent of HIV patients now relying on generic products, Ms. Cooke said.
She noted too that some companies had already committed to lowering prices.
HIV drug price plunge led the way
“When (HIV) anti-retrovirals were first produced, the cost per patient per year was $10,000,” she said. “Once we opened prequalification for generic HIV products, the price went down to $300 per year.”
She added: “We’re also confident that competition will bring prices down. That way, countries will have a greater choice of products that are more affordable.”
Today, three manufacturers control most of the global market for insulin, which was discovered as a treatment for diabetes in 1921.
The medicine works by lowering blood glucose levels, a task that is usually carried out by natural insulin, which is produced by the pancreas whenever we eat.
The quadrupling in the number of people with diabetes since 1980 – to around 420 million today, mostly in low and middle-income countries - is widely attributed to poor diet and a lack of exercise.
Those with type one diabetes – around 20 million people - need insulin injections to survive, while only around half of the 65 million type-two sufferers who need insulin are able to get it, WHO said.
Diabetics forced to ration insulin
In some countries, prices are so prohibitive that some people are forced to ration their insulin.
This leaves them susceptible to heart attacks, stroke, kidney failure, blindness and lower limb amputations.
And while diabetes was the seventh leading cause of death globally in 2016, the finding is only worrying because the disease kills people prematurely, said Dr Gojka Roglic, WHO medical officer and diabetes expert.
“We all have to die of something and why not of diabetes - but (only) after celebrating our 90th birthday,” she joked. “The problem with diabetes is that it accounts for a large proportion of premature diabetes – almost half of them occur before 70.”
In low and middle-income countries, the percentage rises to around 60 per cent, Dr Roglic added.
Data collected by WHO from 24 countries on four continents showed that human insulin was available only in 61 per cent of health facilities.
The data from 2016-2019 also showed that a month’s supply of insulin costs a worker in Accra, Ghana, more than a fifth of their take-home pay.
https://news.un.org/en/story/2019/11/1051241
13 November 2019
Health
Overly expensive insulin could be a thing of the past – and life-changing news – for millions of diabetics under a plan launched by the World Health Organization (WHO) on Wednesday to diversify production globally, just ahead of World Diabetes Day.
Announcing the initiative in Geneva, the UN agency said that it had already had informal expressions of interest from pharmaceutical companies looking to produce insulin and have WHO assess whether it is safe for people to use.
“The simple fact is, that the prevalence of diabetes is growing, the amount of insulin available to treat diabetes is too low, the prices are too high, so we need to do something,” said Emer Cooke, Director of Regulation of Medicines and other Health Technologies at WHO.
Coinciding with the project launch, which comes ahead of World Diabetes Day marked each 14 November, UN Secretary-General António Guterres highlighted the impact of “catastrophic” medical expenses on sufferers.
“Diabetes damages health and undermines educational and employment aspirations for many, affecting communities and forcing families into economic hardship”, he said, particularly in low and middle-income countries.
The WHO’s two-year pilot project, unveiled on Wednesday, involves the evaluation of insulin developed by manufacturers to ensure their quality, safety, efficacy and affordability.
Room for expansion of diabetic care
Assuming there is enough interest from manufacturers and, crucially, more insulin available for diabetics, the scheme could be expanded more widely.
“We’re going to look at the number of companies that will apply, we’re going to look at how long it takes, we’re going to look at the outcomes and we’re going to see whether this makes sense and it really is increasing access”, Ms. Cooke said.
The procedure is known as prequalification and WHO has done it in the past for non-brand vaccines, including those used to treat TB, malaria and HIV.
This had resulted in massive savings for sufferers around the world, with 80 per cent of HIV patients now relying on generic products, Ms. Cooke said.
She noted too that some companies had already committed to lowering prices.
HIV drug price plunge led the way
“When (HIV) anti-retrovirals were first produced, the cost per patient per year was $10,000,” she said. “Once we opened prequalification for generic HIV products, the price went down to $300 per year.”
She added: “We’re also confident that competition will bring prices down. That way, countries will have a greater choice of products that are more affordable.”
Today, three manufacturers control most of the global market for insulin, which was discovered as a treatment for diabetes in 1921.
The medicine works by lowering blood glucose levels, a task that is usually carried out by natural insulin, which is produced by the pancreas whenever we eat.
The quadrupling in the number of people with diabetes since 1980 – to around 420 million today, mostly in low and middle-income countries - is widely attributed to poor diet and a lack of exercise.
Those with type one diabetes – around 20 million people - need insulin injections to survive, while only around half of the 65 million type-two sufferers who need insulin are able to get it, WHO said.
Diabetics forced to ration insulin
In some countries, prices are so prohibitive that some people are forced to ration their insulin.
This leaves them susceptible to heart attacks, stroke, kidney failure, blindness and lower limb amputations.
And while diabetes was the seventh leading cause of death globally in 2016, the finding is only worrying because the disease kills people prematurely, said Dr Gojka Roglic, WHO medical officer and diabetes expert.
“We all have to die of something and why not of diabetes - but (only) after celebrating our 90th birthday,” she joked. “The problem with diabetes is that it accounts for a large proportion of premature diabetes – almost half of them occur before 70.”
In low and middle-income countries, the percentage rises to around 60 per cent, Dr Roglic added.
Data collected by WHO from 24 countries on four continents showed that human insulin was available only in 61 per cent of health facilities.
The data from 2016-2019 also showed that a month’s supply of insulin costs a worker in Accra, Ghana, more than a fifth of their take-home pay.
https://news.un.org/en/story/2019/11/1051241
Uber Fined $649 Million for Saying Drivers Aren’t Employees
The move by New Jersey could reverberate across the gig economy.
New Jersey’s move against Uber reflects an intensifying national debate over how app-based companies treat their work force.
New Jersey has demanded that Uber pay $649 million for years of unpaid employment taxes for its drivers, arguing that the ride-hailing company has misclassified the workers as independent contractors and not as employees.
The state’s Department of Labor and Workforce Development issued the request this week to Uber and a subsidiary, Raiser, after an audit uncovered $530 million in back taxes that had not been paid for unemployment and disability insurance from 2014 to 2018.
Because of the nonpayment, the state is seeking another $119 million in interest.
The case represents a major escalation in how states nationwide view the employment practices at the core of many app-based companies, and the first time that a local government has sought back payroll taxes from Uber, which has hundreds of thousands of drivers in the United States.
A spokeswoman at Uber said the company disputed the state’s findings.
Excerpt from https://www.nytimes.com/2019/11/14/nyregion/uber-new-jersey-drivers.html
DC AG Racine takes lead in challenging perceived arbitration abuses
D.C. Attorney General Karl Racine, along with the AGs of 11 other states, has written a hard hitting letter to the arbitration providers asking them to provide detailed information on practices perceived as abusive, and pressuring them to stop the abuses. Here’s a link to their letter: https://oag.dc.gov/release/ag-racine-leads-12-state-coalition-ensure-workers
A press release explains: “Employees are entitled to a fair process to vindicate their workplace rights, including when they are required to do so through arbitration,” said AG Racine. “We are concerned about reports that workers in the District have encountered high costs and prolonged delays in arbitration that have prevented them from reaching resolutions. That’s why our coalition of Attorneys General has requested data from the leading arbitration firms to better understand how we can protect workers and ensure they have a fair shot at resolving disputes.”
D.C. Attorney General Karl Racine, along with the AGs of 11 other states, has written a hard hitting letter to the arbitration providers asking them to provide detailed information on practices perceived as abusive, and pressuring them to stop the abuses. Here’s a link to their letter: https://oag.dc.gov/release/ag-racine-leads-12-state-coalition-ensure-workers
A press release explains: “Employees are entitled to a fair process to vindicate their workplace rights, including when they are required to do so through arbitration,” said AG Racine. “We are concerned about reports that workers in the District have encountered high costs and prolonged delays in arbitration that have prevented them from reaching resolutions. That’s why our coalition of Attorneys General has requested data from the leading arbitration firms to better understand how we can protect workers and ensure they have a fair shot at resolving disputes.”
Mowi, SalMar ASA and Grieg Seafood ASA, three of Norway's biggest farmed salmon producers, said in separate statements on Thursday that they had either received or would get a subpoena from the U.S. Department of Justice’s Antitrust Division and that investigations would be opened.
The development in the U.S. follows raids by the European Commission in February in member states against those companies’ sites. The Commission said at the time it had concerns that they had violated EU antitrust rules prohibiting price fixing cartels and restrictive business practices. The companies were also among salmon farmers cited in a class-action lawsuit in the U.S. in April.
From: https://finance.yahoo.com/news/u-joins-antitrust-push-against-065644141.html
Note: Norwegian salmon farmers have previously received public attention because the food pellets used for the fish cause the fish to have elevated levels of PCBs, which some experts believe to be healthy. DR
The development in the U.S. follows raids by the European Commission in February in member states against those companies’ sites. The Commission said at the time it had concerns that they had violated EU antitrust rules prohibiting price fixing cartels and restrictive business practices. The companies were also among salmon farmers cited in a class-action lawsuit in the U.S. in April.
From: https://finance.yahoo.com/news/u-joins-antitrust-push-against-065644141.html
Note: Norwegian salmon farmers have previously received public attention because the food pellets used for the fish cause the fish to have elevated levels of PCBs, which some experts believe to be healthy. DR
Why Aren’t We All Buying Houses on the Internet?
Because the one thing startups can’t disrupt is the real estate agent.By HENRY GRABAR
JUNE 07, 20185:51 AM
____
DAR comment: Real estate sales enabled by web technology seems like a fertile area for disruptive business innovation. But the recent travails of the Compass real estate company and its Softbank financial sponsor suggest that the disruptions are slow in coming. The author Henry Graber suggests why -- customers like old style real estate brokering, even if it is costly. Time will tell whether Mr. Graber is right.
___________________
Between the housing crash, the subsequent housing crisis, and the unshakeable ascent of real estate reality TV, the past decade has so fundamentally changed the way Americans think about buying and selling homes that it’s easy to forget that the way we actually buy and sell homes is the same as it ever was.
For sellers: hire an agent, do a little renovation, list, and wait. For buyers: hire an agent, traverse open houses, make an offer, and wait. If you’re selling, expect to pay at least a 5 percent commission on one of the biggest financial transactions of your life.
Nearly 9 in 10 Americans use an agent to buy and sell their homes. Last year, residential commission revenue was somewhere in the range of $75 billion. And the market remains fragmented, with even the biggest brokerages managing just a tiny fraction of transactions—at least for now. “Wall Street and Silicon Valley are infatuated with the idea there isn’t an industry in the world they can’t blow to shreds with money and technology,” says Steve Murray, the president of real estate analysis firm Real Trends. There are signs that real estate’s time has come. “We’re going to see an infinite variety of changes to the way people buy and sell homes.”
According to PitchBook, an analysis firm owned by Morningstar, the amount of venture capital invested in real estate technology companies was up to $1.2 billion in 2017 from just $31 million in 2012. In May, Zillow, the online listings behemoth that also owns Trulia and StreetEasy, announced it would start buying and selling homes. Newer startups will buy houses sight unseen, or with a lifelong contract that allows the seller to remain living there until death.
There’s a general sense that the internet should do more than entertain window shoppers and generate leads for agents. It should actually make it easier and cheaper to sell a house. There’s just one issue: No one has figured out how to bypass the flesh-and-blood real estate agent.
“The old idea that real estate is never going to change, that we’re going to pay 6 percent, is completely untrue,” argues Glenn Kelman, the CEO of Seattle-based Redfin, a publicly traded brokerage whose calling card is lower commissions. For Kelman, the rush of cash into real estate startups feels like vindication for a corporate model that investors have regarded with skepticism. Redfin’s low-fee model relies on an army of in-house agents who trade typical commissions for the volume that’s possible with internet-generated leads. A Redfin world isn’t a world without real estate agents, but it is one where fewer agents do more. The nation’s 1.4 million working real estate agents do not particularly like Redfin.
Zillow has a different approach. The company hasn’t disrupted the traditional agent model; on the contrary, it’s dependent on it. In the first quarter of 2018, Zillow raked in $300 million in revenue (Redfin’s revenue for all of 2017 was $370 million); more than 70 percent of that came from the company’s “Premier Agents,” who pay for prime placement on the site to generate leads. In becoming an iBuyer (the industry’s term of art, short for “instant buyer”), the company won’t bite the real estate–brokering hand that feeds it. If anything, the pivot provides a lucrative opportunity for local agents to cement their relationships with a company that is trying to become an industrial-scale homebuyer.
You’ll wind up banking less from Zillow than you would have from a traditional sale through a local real estate agent. But the company believes there’s a big tranche of sellers who will take convenience in exchange for a smaller sum for their house. “That’s not what most consumers care about,” surmises Jeremy Wacksman, the company’s chief marketing officer. “What they care about is pushing the button and making magic happen.” Magic, in this case, means selling your house in a matter of days, even at a small discount.
Zillow aims to finish the year with 300 to 1,000 houses in its inventory. In the long term, the company imagines using its extensive reach to make it possible for families to easily coordinate sales and purchases, even across cities, eliminating the uncertainty that accompanies a move. If a new job at Disney World draws your family from Las Vegas to Orlando, Zillow might help you on both ends of the move, making sure there’s just a few days downtime between sale and purchase.
There’s another trend that explains Zillow’s logic—and that of a handful of other startups willing to engage (and able to secure funding) in the capital-intensive business of buying houses. Driven by a national, yearlong homebuilding shortage, home prices have recovered and surpassed their pre-recession value, while the homeownership rate remains just ticks above a 50-year low—a housing recovery without homeowners. This gives investors confidence in the market: There really aren’t enough places for Americans to live. Relatedly, it has created a new and prominent force in homebuying, the single-family home investor, which can be a good partner for startups looking to make quick transactions. Before Zillow announced its big push into flipping this spring, it ran a trial program called “instant offers” in Las Vegas and Orlando, working exclusively to sell houses to investor-buyers like Invitation Homes, one of the country’s largest single-family landlords.
Zillow also isn’t the first company to try acting as a middleman. San Francisco–based Opendoor has made tens of thousands of offers on homes, mostly in Sun Belt cities like Phoenix and Dallas. These places are an easier market than New York or San Francisco: The housing stock is newer, cheaper, and more suburban—which is to say, self-similar. Transactions taxes tend to be lower. The company sees itself as competing against seller uncertainty. “[Zillow] keep[s] the agents at the center of the transaction, which is in line with their business model,” says Cristin Culver, head of communications for Opendoor. “And we keep the customer at the center, which is really our North Star, and that’s the difference.” The company’s rapid appraisals make it possible for sellers to skip agents on the first transaction, and after doing some small renovations (paint, HVAC, basic repairs), Opendoor’s “All Day Open House” allows buyers to find and unlock the house themselves with a smartphone. Easy, right?
And yet most of them come with an agent, and the company says it’s one of the biggest payers of commissions in its markets today.*
Why hasn’t the internet cut out the agent, even as houses sell to internet companies with the click of a button? In part because consumers aren’t really trying to inject any startup pizzazz into the largest (and most complex) transaction of their lives. Local knowledge remains invaluable. That, and it’s hard to develop regular clients. This isn’t Seamless. In real estate, a satisfied customer isn’t coming back anytime soon.
https://slate.com/technology/2018/06/redfin-zillow-and-opendoor-cant-disrupt-real-estate-agents-and-may-not-want-to.html
Because the one thing startups can’t disrupt is the real estate agent.By HENRY GRABAR
JUNE 07, 20185:51 AM
____
DAR comment: Real estate sales enabled by web technology seems like a fertile area for disruptive business innovation. But the recent travails of the Compass real estate company and its Softbank financial sponsor suggest that the disruptions are slow in coming. The author Henry Graber suggests why -- customers like old style real estate brokering, even if it is costly. Time will tell whether Mr. Graber is right.
___________________
Between the housing crash, the subsequent housing crisis, and the unshakeable ascent of real estate reality TV, the past decade has so fundamentally changed the way Americans think about buying and selling homes that it’s easy to forget that the way we actually buy and sell homes is the same as it ever was.
For sellers: hire an agent, do a little renovation, list, and wait. For buyers: hire an agent, traverse open houses, make an offer, and wait. If you’re selling, expect to pay at least a 5 percent commission on one of the biggest financial transactions of your life.
Nearly 9 in 10 Americans use an agent to buy and sell their homes. Last year, residential commission revenue was somewhere in the range of $75 billion. And the market remains fragmented, with even the biggest brokerages managing just a tiny fraction of transactions—at least for now. “Wall Street and Silicon Valley are infatuated with the idea there isn’t an industry in the world they can’t blow to shreds with money and technology,” says Steve Murray, the president of real estate analysis firm Real Trends. There are signs that real estate’s time has come. “We’re going to see an infinite variety of changes to the way people buy and sell homes.”
According to PitchBook, an analysis firm owned by Morningstar, the amount of venture capital invested in real estate technology companies was up to $1.2 billion in 2017 from just $31 million in 2012. In May, Zillow, the online listings behemoth that also owns Trulia and StreetEasy, announced it would start buying and selling homes. Newer startups will buy houses sight unseen, or with a lifelong contract that allows the seller to remain living there until death.
There’s a general sense that the internet should do more than entertain window shoppers and generate leads for agents. It should actually make it easier and cheaper to sell a house. There’s just one issue: No one has figured out how to bypass the flesh-and-blood real estate agent.
“The old idea that real estate is never going to change, that we’re going to pay 6 percent, is completely untrue,” argues Glenn Kelman, the CEO of Seattle-based Redfin, a publicly traded brokerage whose calling card is lower commissions. For Kelman, the rush of cash into real estate startups feels like vindication for a corporate model that investors have regarded with skepticism. Redfin’s low-fee model relies on an army of in-house agents who trade typical commissions for the volume that’s possible with internet-generated leads. A Redfin world isn’t a world without real estate agents, but it is one where fewer agents do more. The nation’s 1.4 million working real estate agents do not particularly like Redfin.
Zillow has a different approach. The company hasn’t disrupted the traditional agent model; on the contrary, it’s dependent on it. In the first quarter of 2018, Zillow raked in $300 million in revenue (Redfin’s revenue for all of 2017 was $370 million); more than 70 percent of that came from the company’s “Premier Agents,” who pay for prime placement on the site to generate leads. In becoming an iBuyer (the industry’s term of art, short for “instant buyer”), the company won’t bite the real estate–brokering hand that feeds it. If anything, the pivot provides a lucrative opportunity for local agents to cement their relationships with a company that is trying to become an industrial-scale homebuyer.
You’ll wind up banking less from Zillow than you would have from a traditional sale through a local real estate agent. But the company believes there’s a big tranche of sellers who will take convenience in exchange for a smaller sum for their house. “That’s not what most consumers care about,” surmises Jeremy Wacksman, the company’s chief marketing officer. “What they care about is pushing the button and making magic happen.” Magic, in this case, means selling your house in a matter of days, even at a small discount.
Zillow aims to finish the year with 300 to 1,000 houses in its inventory. In the long term, the company imagines using its extensive reach to make it possible for families to easily coordinate sales and purchases, even across cities, eliminating the uncertainty that accompanies a move. If a new job at Disney World draws your family from Las Vegas to Orlando, Zillow might help you on both ends of the move, making sure there’s just a few days downtime between sale and purchase.
There’s another trend that explains Zillow’s logic—and that of a handful of other startups willing to engage (and able to secure funding) in the capital-intensive business of buying houses. Driven by a national, yearlong homebuilding shortage, home prices have recovered and surpassed their pre-recession value, while the homeownership rate remains just ticks above a 50-year low—a housing recovery without homeowners. This gives investors confidence in the market: There really aren’t enough places for Americans to live. Relatedly, it has created a new and prominent force in homebuying, the single-family home investor, which can be a good partner for startups looking to make quick transactions. Before Zillow announced its big push into flipping this spring, it ran a trial program called “instant offers” in Las Vegas and Orlando, working exclusively to sell houses to investor-buyers like Invitation Homes, one of the country’s largest single-family landlords.
Zillow also isn’t the first company to try acting as a middleman. San Francisco–based Opendoor has made tens of thousands of offers on homes, mostly in Sun Belt cities like Phoenix and Dallas. These places are an easier market than New York or San Francisco: The housing stock is newer, cheaper, and more suburban—which is to say, self-similar. Transactions taxes tend to be lower. The company sees itself as competing against seller uncertainty. “[Zillow] keep[s] the agents at the center of the transaction, which is in line with their business model,” says Cristin Culver, head of communications for Opendoor. “And we keep the customer at the center, which is really our North Star, and that’s the difference.” The company’s rapid appraisals make it possible for sellers to skip agents on the first transaction, and after doing some small renovations (paint, HVAC, basic repairs), Opendoor’s “All Day Open House” allows buyers to find and unlock the house themselves with a smartphone. Easy, right?
And yet most of them come with an agent, and the company says it’s one of the biggest payers of commissions in its markets today.*
Why hasn’t the internet cut out the agent, even as houses sell to internet companies with the click of a button? In part because consumers aren’t really trying to inject any startup pizzazz into the largest (and most complex) transaction of their lives. Local knowledge remains invaluable. That, and it’s hard to develop regular clients. This isn’t Seamless. In real estate, a satisfied customer isn’t coming back anytime soon.
https://slate.com/technology/2018/06/redfin-zillow-and-opendoor-cant-disrupt-real-estate-agents-and-may-not-want-to.html
AGs meet in Colorado to discuss Google antitrust probe
By CPI
-
November 12, 2019
State officials investigating Alphabet’s Google met Monday, November 11, to dive into competition issues surrounding the search giant as they press forward with an investigation into whether the company is violating antitrust laws, Reuters reported.
The officials met privately in Denver with outside experts with the goal of gaining a deeper understanding of Google’s businesses and the dynamics of the markets it operates in, including digital advertising.
The gathering comes two months after all but two states opened an antitrust investigation into Google with an initial focus on its advertising. Perhaps about a dozen states sent representatives to the meeting, Reuters reported.
The gathering was similar to one held in New York in October, where state and federal enforcers from the Justice Department and Federal Trade Commission discussed their probe of Facebook.
The probe of Google, a unit of Alphabet, is being led by the Texas attorney general’s office. Google had no comment about the meeting in Colorado, but pointed to a blog post from September in which an executive, Kent Walker, said that the company has “always worked constructively with regulators and will continue to do so.”
Texas sent the search and advertising giant a subpoena on September 9 asking for information about its online digital advertising business, which generates most of Google’s revenue and where Google is a dominant player.
Full Content: Reuters
By CPI
-
November 12, 2019
State officials investigating Alphabet’s Google met Monday, November 11, to dive into competition issues surrounding the search giant as they press forward with an investigation into whether the company is violating antitrust laws, Reuters reported.
The officials met privately in Denver with outside experts with the goal of gaining a deeper understanding of Google’s businesses and the dynamics of the markets it operates in, including digital advertising.
The gathering comes two months after all but two states opened an antitrust investigation into Google with an initial focus on its advertising. Perhaps about a dozen states sent representatives to the meeting, Reuters reported.
The gathering was similar to one held in New York in October, where state and federal enforcers from the Justice Department and Federal Trade Commission discussed their probe of Facebook.
The probe of Google, a unit of Alphabet, is being led by the Texas attorney general’s office. Google had no comment about the meeting in Colorado, but pointed to a blog post from September in which an executive, Kent Walker, said that the company has “always worked constructively with regulators and will continue to do so.”
Texas sent the search and advertising giant a subpoena on September 9 asking for information about its online digital advertising business, which generates most of Google’s revenue and where Google is a dominant player.
Full Content: Reuters
Assistant Attorney General Makan Delrahim addresses an antitrust conference at Harvard Law School, November 8, 2019
The headline news for the media is that the antitrust chief warned big tech companies that the government could pursue them for anticompetitive behavior related to their troves of data about users, including for cutting off data access to competitors.
As the New York Times reports, Delrahim said that "Antitrust enforcers cannot turn a blind eye to the serious competition questions that digital markets have raised." Also, he discussed "the ways market power can manifest in industries where data plays a key role," particularly when large amounts of data are amassed that are "quite personal and unique in nature" and offers insight into "the most intimate aspects of human choice and behavior, including personal health, emotional well-being, civic engagement and financial fitness. That, said Delrahim, can create "avenues for abuse."
Further, Delrahim explained that the acquisition of such data is especially valuable for companies in the business of selling predictions about human behavior, he said. That's how Google and Facebook — which dominate global search and social media — attract targeted advertising.
He cited Harvard Business School professor emerita Shoshana Zuboff's theory of "surveillance capitalism," which holds that the "behavioral data" those companies acquire through their nominally free services is a wholly new kind of product. Zuboff considers it massively invasive and exploitative.
Delrahim said that "although privacy fits primarily within the realm of consumer protection law, it would be a grave mistake to believe that privacy concerns can never play a role in antitrust analysis."
Delrahim said that USDOJ staff would expand to deal with high tech antitrust issues.
I was in the audience for the Delrahim talk, and I heard not just a warning to high tech businesses, but caution about the permissible scope of antitrust action. Delrahim has made similar cautious comments in the past, including in Delrahim’s address at the University of Chicago's Antitrust and Competition Conference in April of 2018.
At the earlier conference, as at the recent November 8, 2019 conference, Delrahim was respectful of what he called “evidence-based enforcement.” That is, enforcement built on credible evidence that a practice harms competition and the American consumer, or in the case of merger enforcement, that it creates an unacceptable risk of doing so.
In 2018 Delrahim explained that “Outside the realm of naked horizontal restraints such as price fixing, bid rigging, and market allocation, antitrust demands evidence of harm or likely harm to competition, often weighed against efficiencies or procompetitive justifications.”
He also said in 2018: “Taking an evidence-based approach to antitrust law should not be mistaken for an unwillingness to bring enforcement actions. In fact, where there is clear evidence of harm to competition, it is the duty of enforcers to promptly and vigorously prosecute the antitrust laws, and to refuse to settle for ineffective behavioral band-aids that fall short of curing the underlying threat to competition and consumers. . . . Evidence-based enforcement also requires a readiness to adapt our existing antitrust framework and tools to new or emerging threats to competition. It is an approach of openness to persuasion, and is adaptable to new business models and emerging technologies that create novel threats to competition and consumer welfare.”
So, where do Delrahim’s comments leave us with regard to expectations of USDOJ antitrust enforcement against big tech companies, and particularly Google, Facebook, and Amazon. It is hard to say, particularly given political forces at play that Delrahim did not address. It does seem clear that cautious and evidence based antitrust enforcement is a key part of Delrahim’s thinking. It is unlikely that Makan Delrahim and antitrust reform advocates like Tim Wu and Lina Khan are in perfect agreement.
Sources: https://www.nytimes.com/aponline/2019/11/08/business/bc-us-justice-department-antitrust-speech.html?action=click&module=editorContent&pgtype=Article®ion=CompanionColumn&contentCollection=Trending#after-pp_edpick
file:///F:/Expansion%20Drive/Antitrust%20schoarship/Assistant%20Attorney%20General%20Makan%20Delrahim%20Delivers%20Keynote%20Address%20at%20the%20University%20of%20Chicago's%20Antitrust%20and%20Competition%20Conference%20_%20OPA%20_%20Department%20of%20Justice.html
THIS POSTING IS BY DON ALLEN RESNIKOFF, WHO TAKES FULL RESPONSIBILITY FOR ITS CONTENT
Addendum, 11-14-19: A transcript of the AAG's talk is now available: https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-harvard-law-school-competition
The headline news for the media is that the antitrust chief warned big tech companies that the government could pursue them for anticompetitive behavior related to their troves of data about users, including for cutting off data access to competitors.
As the New York Times reports, Delrahim said that "Antitrust enforcers cannot turn a blind eye to the serious competition questions that digital markets have raised." Also, he discussed "the ways market power can manifest in industries where data plays a key role," particularly when large amounts of data are amassed that are "quite personal and unique in nature" and offers insight into "the most intimate aspects of human choice and behavior, including personal health, emotional well-being, civic engagement and financial fitness. That, said Delrahim, can create "avenues for abuse."
Further, Delrahim explained that the acquisition of such data is especially valuable for companies in the business of selling predictions about human behavior, he said. That's how Google and Facebook — which dominate global search and social media — attract targeted advertising.
He cited Harvard Business School professor emerita Shoshana Zuboff's theory of "surveillance capitalism," which holds that the "behavioral data" those companies acquire through their nominally free services is a wholly new kind of product. Zuboff considers it massively invasive and exploitative.
Delrahim said that "although privacy fits primarily within the realm of consumer protection law, it would be a grave mistake to believe that privacy concerns can never play a role in antitrust analysis."
Delrahim said that USDOJ staff would expand to deal with high tech antitrust issues.
I was in the audience for the Delrahim talk, and I heard not just a warning to high tech businesses, but caution about the permissible scope of antitrust action. Delrahim has made similar cautious comments in the past, including in Delrahim’s address at the University of Chicago's Antitrust and Competition Conference in April of 2018.
At the earlier conference, as at the recent November 8, 2019 conference, Delrahim was respectful of what he called “evidence-based enforcement.” That is, enforcement built on credible evidence that a practice harms competition and the American consumer, or in the case of merger enforcement, that it creates an unacceptable risk of doing so.
In 2018 Delrahim explained that “Outside the realm of naked horizontal restraints such as price fixing, bid rigging, and market allocation, antitrust demands evidence of harm or likely harm to competition, often weighed against efficiencies or procompetitive justifications.”
He also said in 2018: “Taking an evidence-based approach to antitrust law should not be mistaken for an unwillingness to bring enforcement actions. In fact, where there is clear evidence of harm to competition, it is the duty of enforcers to promptly and vigorously prosecute the antitrust laws, and to refuse to settle for ineffective behavioral band-aids that fall short of curing the underlying threat to competition and consumers. . . . Evidence-based enforcement also requires a readiness to adapt our existing antitrust framework and tools to new or emerging threats to competition. It is an approach of openness to persuasion, and is adaptable to new business models and emerging technologies that create novel threats to competition and consumer welfare.”
So, where do Delrahim’s comments leave us with regard to expectations of USDOJ antitrust enforcement against big tech companies, and particularly Google, Facebook, and Amazon. It is hard to say, particularly given political forces at play that Delrahim did not address. It does seem clear that cautious and evidence based antitrust enforcement is a key part of Delrahim’s thinking. It is unlikely that Makan Delrahim and antitrust reform advocates like Tim Wu and Lina Khan are in perfect agreement.
Sources: https://www.nytimes.com/aponline/2019/11/08/business/bc-us-justice-department-antitrust-speech.html?action=click&module=editorContent&pgtype=Article®ion=CompanionColumn&contentCollection=Trending#after-pp_edpick
file:///F:/Expansion%20Drive/Antitrust%20schoarship/Assistant%20Attorney%20General%20Makan%20Delrahim%20Delivers%20Keynote%20Address%20at%20the%20University%20of%20Chicago's%20Antitrust%20and%20Competition%20Conference%20_%20OPA%20_%20Department%20of%20Justice.html
THIS POSTING IS BY DON ALLEN RESNIKOFF, WHO TAKES FULL RESPONSIBILITY FOR ITS CONTENT
Addendum, 11-14-19: A transcript of the AAG's talk is now available: https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-harvard-law-school-competition
From the NY Times: https://www.nytimes.com/2019/11/10/opinion/big-business-consumer-prices.html#after-story-ad-1
A new book, “The Great Reversal: How America Gave Up on Free Markets.”
In one industry after another, Thomas Phillipon writes, a few companies have grown so large that they have the power to keep prices high and wages low. It’s great for those corporations — and bad for almost everyone else.
Many Americans have a choice between only two internet providers. The airline industry is dominated by four large carriers. Amazon, Apple, Facebook and Google are growing ever larger. One or two hospital systems control many local markets. Home Depot and Lowe’s have displaced local hardware stores. Regional pharmacy chains like Eckerd and Happy Harry’s have been swallowed by national giants.
Other researchers have also documented rising corporate concentration. Philippon’s biggest contribution is to explain that it isn’t some natural result of globalization and technological innovation. If it were, the trends would be similar around the world. But they’re not. Big companies have become only slightly larger in Europe this century — rather than much larger, as in the United States.
What explains the difference? Politics.
The European economy certainly has its problems, but antitrust policy isn’t one of them. The European Union has kept competition alive by blocking mergers and insisting that established companies make room for new entrants. In telecommunications, smaller companies often have the right to use infrastructure built by the giants. That’s why Philippon’s parents can choose among five internet providers, including a low-cost company that brought down prices for everyone.
In air travel, European discount carriers like easyJet have received better access to the gate slots they need to operate. The largest four European airlines control only about 40 percent of the market. In the United States, that share is 80 percent, and, as you’d expect, airfares are higher. Even Southwest Airlines has begun to behave less like a low-fare carrier.
The irony is that Europe is implementing market-based ideas — like telecommunications deregulation and low-cost airlines — that Americans helped pioneer. “E.U. consumers are better off than American consumers today,” Philippon writes, “because the E.U. has adopted the U.S. playbook, which the U.S. itself has abandoned.”
A new book, “The Great Reversal: How America Gave Up on Free Markets.”
In one industry after another, Thomas Phillipon writes, a few companies have grown so large that they have the power to keep prices high and wages low. It’s great for those corporations — and bad for almost everyone else.
Many Americans have a choice between only two internet providers. The airline industry is dominated by four large carriers. Amazon, Apple, Facebook and Google are growing ever larger. One or two hospital systems control many local markets. Home Depot and Lowe’s have displaced local hardware stores. Regional pharmacy chains like Eckerd and Happy Harry’s have been swallowed by national giants.
Other researchers have also documented rising corporate concentration. Philippon’s biggest contribution is to explain that it isn’t some natural result of globalization and technological innovation. If it were, the trends would be similar around the world. But they’re not. Big companies have become only slightly larger in Europe this century — rather than much larger, as in the United States.
What explains the difference? Politics.
The European economy certainly has its problems, but antitrust policy isn’t one of them. The European Union has kept competition alive by blocking mergers and insisting that established companies make room for new entrants. In telecommunications, smaller companies often have the right to use infrastructure built by the giants. That’s why Philippon’s parents can choose among five internet providers, including a low-cost company that brought down prices for everyone.
In air travel, European discount carriers like easyJet have received better access to the gate slots they need to operate. The largest four European airlines control only about 40 percent of the market. In the United States, that share is 80 percent, and, as you’d expect, airfares are higher. Even Southwest Airlines has begun to behave less like a low-fare carrier.
The irony is that Europe is implementing market-based ideas — like telecommunications deregulation and low-cost airlines — that Americans helped pioneer. “E.U. consumers are better off than American consumers today,” Philippon writes, “because the E.U. has adopted the U.S. playbook, which the U.S. itself has abandoned.”
Class Actions 101 for the year 2019: If you are an attorney wondering whether it is a good idea to bring a class action against Juul, dozens of other attorneys have gotten ahead of you. Maybe hundreds. DAR
Judge Orrick Picks Team of 4 as Interim Leaders in Juul MDL
By Ross Todd | November 08, 2019 at 08:04 PM
Interim leadership includes Sarah London, of Lieff Cabraser, Dena Sharp of Girard Sharp, Ellen Relkin of Weitz & Luxenberg, and Dean Kawamoto of Keller Rohrback, but the appointment doesn’t necessarily cement their place in the final leadership structure.
The federal judge overseeing a batch of cases against e-cigarette maker Juul has chosen four plaintiffs lawyers to lead the case in its early stages.
At the end of a marathon hearing Friday where more than 40 lawyers gave two-minute pitches for leadership positions in the multidistrict litigation, U.S. District Judge William Orrick III appointed four lawyers to handle preliminary matters for plaintiffs: Sarah London, a partner at San Francisco’s Lieff Cabraser Heimann & Bernstein, Dena Sharp, of Girard Sharp in San Francisco, Ellen Relkin of Weitz & Luxenberg in New York, and Dean Kawamoto of Keller Rohrback in Seattle.
Orrick indicated in an order issued in the run-up to Friday’s initial case management conference that he wanted to have an interim team in place to handle logistics until he can complete an “initial census” of the cases before him in the multidistrict litigation. An “initial census” refers to the idea, increasingly floated by the defense bar, that judges should vet cases early on in multidistrict litigation in order to weed out meritless claims and to determine the different sorts of plaintiffs and claims within a particular MDL.
“I feel a great sense of urgency to deal with the issues in this case because of the seriousness of the allegations and the need for us to be collectively involved to search for truth and resolution in this matter,” Orrick told a packed courtroom at the top of Friday’s hearing.
Orrick has called on Jaime Dodge, the founding director of Emory University School of Law’s Institute for Complex Litigation and Mass Claims, for help with the initial census.
Orrick indicated in his pre-hearing order that appointment to the initial team would not be a guarantee of inclusion on the final leadership structure of the cases, which focus on Juul’s marketing, particularly to children, and alleged injuries caused by its products—including addiction, pulmonary disease, and seizures. Juul faces a mix of personal injury and addiction cases as well as proposed class actions brought on behalf of consumers, school districts and state and local governments, as well as cases seeking medical monitoring for Juul users going forward.
A line of lawyers trailed outside the courtroom door ahead of the hearing.
Orrick allowed most attorneys only two minutes to express why they or their firm should be chosen for leadership and to pitch ways to expedite a resolution to the case. Lieff Cabraser’s London, whom Orrick had previously tapped to coordinate some preliminary issues with defendants, spoke first and was allowed about five minutes to outline the universe of 163 cases in the MDL so far.
London encouraged the judge to ultimately pick a slate of 22 lawyers on a proposed leadership team that pitches alongside proposed co-lead counsel at San Francisco’s Gutride Safier and New York’s Douglas & London.
“We need a sizable group of lawyers who can work well together,” said London, whose group had proposed that class actions, personal injury cases, and the municipal cases proceed together, rather than on separate tracks. London said that plaintiffs needed to be able to adapt to developing circumstances.
Friday’s hearing came as Juul in October agreed to stop selling fruit-flavored e-cigarettes. The company also reached a legal settlement with California’s Center for Environmental Health that limits how the company can market its product to minors.
“We need be able to take our formation and direct it in the direction to get the job done,” London said.
Girard Sharp name partner Dena Sharp, who had backed a rival leadership structure advocating for separate tracks for different types of cases, said Friday that it was obvious that there “was not a whole lot of difference” between the groups and that everyone on the plaintiffs side of the room had a shared interest.
“It surely is if nothing else a public health emergency at this point,” Sharp said. She said that the proposal for different tracks was directed at giving clients and the court someone specific they could call on and hold accountable.
Orrick indicated in his pre-hearing order that the group chosen Friday would “address preliminary discovery issues, such as the Protective Order, ESI Protocol, selection of necessary vendors, and discovery planning that can occur before the final leadership team is in place.”
Orrick said Friday that he wanted to make sure to get the structure of the case right and to get the results of the case census would help him do that.
“I want this case to move forward in a speedy and collaborative and efficient way,” Orrick said.
Source: https://www.law.com/therecorder/2019/11/08/judge-orrick-picks-team-of-4-as-interim-leaders-in-juul-mdl/?kw=Judge%20Orrick%20Picks%20Team%20of%204%20as%20Interim%20Leaders%20in%20Juul%20MDL&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20191108&utm_term=ca&slreturn=20191010220052
Judge Orrick Picks Team of 4 as Interim Leaders in Juul MDL
By Ross Todd | November 08, 2019 at 08:04 PM
Interim leadership includes Sarah London, of Lieff Cabraser, Dena Sharp of Girard Sharp, Ellen Relkin of Weitz & Luxenberg, and Dean Kawamoto of Keller Rohrback, but the appointment doesn’t necessarily cement their place in the final leadership structure.
The federal judge overseeing a batch of cases against e-cigarette maker Juul has chosen four plaintiffs lawyers to lead the case in its early stages.
At the end of a marathon hearing Friday where more than 40 lawyers gave two-minute pitches for leadership positions in the multidistrict litigation, U.S. District Judge William Orrick III appointed four lawyers to handle preliminary matters for plaintiffs: Sarah London, a partner at San Francisco’s Lieff Cabraser Heimann & Bernstein, Dena Sharp, of Girard Sharp in San Francisco, Ellen Relkin of Weitz & Luxenberg in New York, and Dean Kawamoto of Keller Rohrback in Seattle.
Orrick indicated in an order issued in the run-up to Friday’s initial case management conference that he wanted to have an interim team in place to handle logistics until he can complete an “initial census” of the cases before him in the multidistrict litigation. An “initial census” refers to the idea, increasingly floated by the defense bar, that judges should vet cases early on in multidistrict litigation in order to weed out meritless claims and to determine the different sorts of plaintiffs and claims within a particular MDL.
“I feel a great sense of urgency to deal with the issues in this case because of the seriousness of the allegations and the need for us to be collectively involved to search for truth and resolution in this matter,” Orrick told a packed courtroom at the top of Friday’s hearing.
Orrick has called on Jaime Dodge, the founding director of Emory University School of Law’s Institute for Complex Litigation and Mass Claims, for help with the initial census.
Orrick indicated in his pre-hearing order that appointment to the initial team would not be a guarantee of inclusion on the final leadership structure of the cases, which focus on Juul’s marketing, particularly to children, and alleged injuries caused by its products—including addiction, pulmonary disease, and seizures. Juul faces a mix of personal injury and addiction cases as well as proposed class actions brought on behalf of consumers, school districts and state and local governments, as well as cases seeking medical monitoring for Juul users going forward.
A line of lawyers trailed outside the courtroom door ahead of the hearing.
Orrick allowed most attorneys only two minutes to express why they or their firm should be chosen for leadership and to pitch ways to expedite a resolution to the case. Lieff Cabraser’s London, whom Orrick had previously tapped to coordinate some preliminary issues with defendants, spoke first and was allowed about five minutes to outline the universe of 163 cases in the MDL so far.
London encouraged the judge to ultimately pick a slate of 22 lawyers on a proposed leadership team that pitches alongside proposed co-lead counsel at San Francisco’s Gutride Safier and New York’s Douglas & London.
“We need a sizable group of lawyers who can work well together,” said London, whose group had proposed that class actions, personal injury cases, and the municipal cases proceed together, rather than on separate tracks. London said that plaintiffs needed to be able to adapt to developing circumstances.
Friday’s hearing came as Juul in October agreed to stop selling fruit-flavored e-cigarettes. The company also reached a legal settlement with California’s Center for Environmental Health that limits how the company can market its product to minors.
“We need be able to take our formation and direct it in the direction to get the job done,” London said.
Girard Sharp name partner Dena Sharp, who had backed a rival leadership structure advocating for separate tracks for different types of cases, said Friday that it was obvious that there “was not a whole lot of difference” between the groups and that everyone on the plaintiffs side of the room had a shared interest.
“It surely is if nothing else a public health emergency at this point,” Sharp said. She said that the proposal for different tracks was directed at giving clients and the court someone specific they could call on and hold accountable.
Orrick indicated in his pre-hearing order that the group chosen Friday would “address preliminary discovery issues, such as the Protective Order, ESI Protocol, selection of necessary vendors, and discovery planning that can occur before the final leadership team is in place.”
Orrick said Friday that he wanted to make sure to get the structure of the case right and to get the results of the case census would help him do that.
“I want this case to move forward in a speedy and collaborative and efficient way,” Orrick said.
Source: https://www.law.com/therecorder/2019/11/08/judge-orrick-picks-team-of-4-as-interim-leaders-in-juul-mdl/?kw=Judge%20Orrick%20Picks%20Team%20of%204%20as%20Interim%20Leaders%20in%20Juul%20MDL&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20191108&utm_term=ca&slreturn=20191010220052
Amazon’s China business is bigger than ever.
That is because it has aggressively recruited Chinese manufacturers and merchants to sell to consumers outside the country. And these sellers, in turn, represent a high proportion of problem listings found on the site, according to a Wall Street Journal investigation.
The Journal earlier this year uncovered 10,870 items for sale between May and August that have been declared unsafe by federal agencies, are deceptively labeled, lacked federally-required warnings, or are banned by federal regulators. Amazon said it investigated the items, and some listings were taken down after the Journal’s reporting.
Of 1,934 sellers whose addresses could be determined, 54% were based in China, according to a Journal analysis of data from research firm Marketplace Pulse.
Amazon’s China recruiting is one reason why its platform increasingly resembles an unruly online flea market. A new product listing is uploaded to Amazon from China every 1/50th of a second, according to slides its officials showed a December conference in the industrial port city of Ningbo.
Chinese factories are squeezing profit margins for middlemen who sell on Amazon’s third-party platform. Some U.S. sellers fear the next step will be to cut them out entirely.
Excert from https://www.wsj.com/articles/amazons-heavy-recruitment-of-chinese-sellers-puts-consumers-at-risk-11573489075 [paywall]
________________________
That is because it has aggressively recruited Chinese manufacturers and merchants to sell to consumers outside the country. And these sellers, in turn, represent a high proportion of problem listings found on the site, according to a Wall Street Journal investigation.
The Journal earlier this year uncovered 10,870 items for sale between May and August that have been declared unsafe by federal agencies, are deceptively labeled, lacked federally-required warnings, or are banned by federal regulators. Amazon said it investigated the items, and some listings were taken down after the Journal’s reporting.
Of 1,934 sellers whose addresses could be determined, 54% were based in China, according to a Journal analysis of data from research firm Marketplace Pulse.
Amazon’s China recruiting is one reason why its platform increasingly resembles an unruly online flea market. A new product listing is uploaded to Amazon from China every 1/50th of a second, according to slides its officials showed a December conference in the industrial port city of Ningbo.
Chinese factories are squeezing profit margins for middlemen who sell on Amazon’s third-party platform. Some U.S. sellers fear the next step will be to cut them out entirely.
Excert from https://www.wsj.com/articles/amazons-heavy-recruitment-of-chinese-sellers-puts-consumers-at-risk-11573489075 [paywall]
________________________
Mark Steinbach has provided an article from the Daily Record (a newspaper covering Baltimore's legal, real estate and business communities). It described a program in which pro bono and Legal Aid lawyers provide pro bono advice to people at multiple library branches once a week for a couple of hours.
Here's a link to info on Maryland's program: https://www.prattlibrary.org/lawyer/
Here's the article from the Daily Record:
Lawyer in the Library program offers free aid in city neighborhoods
By: Louis Krauss November 5, 2019
When Shantelle Middleton walked into the Enoch Pratt Free Library on Pennsylvania Avenue Tuesday, she didn’t expect to discover lawyers ready to provide information to help with her longstanding divorce and tax issues.
“I was actually coming to get my son some PlayStation games, and the lady informed me at the door about this program, so I figured why not kill two birds with one stone,” Middleton said.
Each Tuesday, Maryland Legal Aid sends a team of lawyers to the library as part of its Lawyer in the Library program. The program started with just one lawyer in 2015, immediately after the riots following Freddie Gray’s death in police custody.
This week, six attorneys were on hand at the Pennsylvania Avenue branch, each at a booth in the library’s basement. Half were Maryland Legal Aid staff attorneys, while the rest were lawyers working pro bono. Three of the booths were devoted to consultations about expunging criminal records and the rest focused on matters related to housing assistance, family law and public benefits.
Middleton, who waited for her consultation along with her elementary school-aged son, said she was surprised at how many attorneys were on hand to offer help.
“I was kind of shocked, given the type of urban community we’re in,” Middleton said. “I didn’t know we had so much at our disposal. It was a big relief.”
After hearing each client’s case, the attorneys confer with other Legal Aid staff before deciding if — and how — they can help or whether they should direct the client to other pro bono services.
Following the 2015 riots, which took place near the Pennsylvania Avenue branch of the library, Legal Aid attorney Todd Cagwin said the organization decided to start the free legal consultation service knowing it would help city residents, particularly those looking to expunge their records of minor offenses.
Since then the service has expanded and now operates in six city library branches, according to the Maryland Legal Aid website. Cagwin said the organization recently hired a lawyer to offer legal services in city public schools.
In recent weeks, the library also has added free wellness checks, administered by a Johns Hopkins doctor.
With the Legal Aid program running only from 1 to 3 p.m. on Tuesdays, there’s often a long line of people waiting for legal help. On Tuesday, about a dozen people waited to meet with a lawyer.
Wendy Thomas Wolock, a volunteer attorney for the Maryland Legal Aid program, said she came out of retirement to help review expungement cases. She said it’s more fun to practice law when she doesn’t have to do it for a living.
“Kids make stupid mistakes, some more so than others,” Wolock said, explaining what motivated her to help with expungements. “Everyone deserves a second chance, and so I wanted to help facilitate this.”
More information about the Lawyer in the Library program can be found here.https://www.prattlibrary.org/lawyer/
-----
Here's a link to info on Maryland's program: https://www.prattlibrary.org/lawyer/
Here's the article from the Daily Record:
Lawyer in the Library program offers free aid in city neighborhoods
By: Louis Krauss November 5, 2019
When Shantelle Middleton walked into the Enoch Pratt Free Library on Pennsylvania Avenue Tuesday, she didn’t expect to discover lawyers ready to provide information to help with her longstanding divorce and tax issues.
“I was actually coming to get my son some PlayStation games, and the lady informed me at the door about this program, so I figured why not kill two birds with one stone,” Middleton said.
Each Tuesday, Maryland Legal Aid sends a team of lawyers to the library as part of its Lawyer in the Library program. The program started with just one lawyer in 2015, immediately after the riots following Freddie Gray’s death in police custody.
This week, six attorneys were on hand at the Pennsylvania Avenue branch, each at a booth in the library’s basement. Half were Maryland Legal Aid staff attorneys, while the rest were lawyers working pro bono. Three of the booths were devoted to consultations about expunging criminal records and the rest focused on matters related to housing assistance, family law and public benefits.
Middleton, who waited for her consultation along with her elementary school-aged son, said she was surprised at how many attorneys were on hand to offer help.
“I was kind of shocked, given the type of urban community we’re in,” Middleton said. “I didn’t know we had so much at our disposal. It was a big relief.”
After hearing each client’s case, the attorneys confer with other Legal Aid staff before deciding if — and how — they can help or whether they should direct the client to other pro bono services.
Following the 2015 riots, which took place near the Pennsylvania Avenue branch of the library, Legal Aid attorney Todd Cagwin said the organization decided to start the free legal consultation service knowing it would help city residents, particularly those looking to expunge their records of minor offenses.
Since then the service has expanded and now operates in six city library branches, according to the Maryland Legal Aid website. Cagwin said the organization recently hired a lawyer to offer legal services in city public schools.
In recent weeks, the library also has added free wellness checks, administered by a Johns Hopkins doctor.
With the Legal Aid program running only from 1 to 3 p.m. on Tuesdays, there’s often a long line of people waiting for legal help. On Tuesday, about a dozen people waited to meet with a lawyer.
Wendy Thomas Wolock, a volunteer attorney for the Maryland Legal Aid program, said she came out of retirement to help review expungement cases. She said it’s more fun to practice law when she doesn’t have to do it for a living.
“Kids make stupid mistakes, some more so than others,” Wolock said, explaining what motivated her to help with expungements. “Everyone deserves a second chance, and so I wanted to help facilitate this.”
More information about the Lawyer in the Library program can be found here.https://www.prattlibrary.org/lawyer/
-----
From DMN
After Receiving Just $98 in Soundtrack Royalties, the Creators of Spinal Tap Settle Their $400 Million Lawsuit Against Vivendi Marsha Silva
November 5, 2019
The creators of the legendary rock mockumentary This Is Spinal Tap have settled their dispute with Universal Music Group (UMG) parent Vivendi relating to the soundtrack of the film and related recordings.The film’s creators include Harry Shearer, Christopher Guest, Michael McKean and Rob Reiner.
Under the terms of the agreement, UMG will continue to distribute recordings relating to This Is Spinal Tap. Though eventually these rights will return to the creators. Previously, it was reported that, between 1989 and 2006, they received only $98 in royalties from the soundtrack.
In 2016, the four filed a broader $400 million lawsuit against UMG’s parent Vivendi, alleging breach of contract, fraud and anti-competitive business practices against Studio Canal, which is another subsidiary of Vivendi. This suit related to all intellectual properties related to the film, including merchandising, and would seem to be only partially resolved by the settlement.
Like with music royalties, the creators of the film have received little in terms of merchandising royalty: $81 since 1984.Made with little budget, This Is Spinal Tap spawned the mockumentary genre and has been included in many lists of the greatest movies of all time. This includes the New York Times Guide to the Best 1,000 Movies Ever Made, Entertainment Weekly’s 100 Greatest Movies of All Time and Total Film’s the 100 Greatest Movies of All Time.
In the decades after the film’s release, hundreds of thousands of Spinal Tap recordings have sold around the world, and they are still available in both physical and digital formats.
In response to the settlement, Harry Shearer said, “I must admit, from the moment we first began mediation with them to now, I’ve been impressed by UMG’s respect for creatives and their distinctive desire to seek a prompt and equitable solution to the issues.”ly' to Pay Nearly $10 Million Owed to Artists, Bank-Appointed Administrator Says
Christopher Guest also commented on the agreement. He said, “It was refreshing to be treated so constructively and with such courtesy by UMG and I’m pleased we have been able to resolve this.
https://www.digitalmusicnews.com/2019/10/23/pledgemusic-unlikely-to-pay-artists/
Editorial comment by DAR: Linking this article to broader issues, a 52 second video of a legendary and brilliant Spinal Tap drummer spontaneously exploding is here: https://www.youtube.com/watch?v=TW6W9iOjTKM
After Receiving Just $98 in Soundtrack Royalties, the Creators of Spinal Tap Settle Their $400 Million Lawsuit Against Vivendi Marsha Silva
November 5, 2019
The creators of the legendary rock mockumentary This Is Spinal Tap have settled their dispute with Universal Music Group (UMG) parent Vivendi relating to the soundtrack of the film and related recordings.The film’s creators include Harry Shearer, Christopher Guest, Michael McKean and Rob Reiner.
Under the terms of the agreement, UMG will continue to distribute recordings relating to This Is Spinal Tap. Though eventually these rights will return to the creators. Previously, it was reported that, between 1989 and 2006, they received only $98 in royalties from the soundtrack.
In 2016, the four filed a broader $400 million lawsuit against UMG’s parent Vivendi, alleging breach of contract, fraud and anti-competitive business practices against Studio Canal, which is another subsidiary of Vivendi. This suit related to all intellectual properties related to the film, including merchandising, and would seem to be only partially resolved by the settlement.
Like with music royalties, the creators of the film have received little in terms of merchandising royalty: $81 since 1984.Made with little budget, This Is Spinal Tap spawned the mockumentary genre and has been included in many lists of the greatest movies of all time. This includes the New York Times Guide to the Best 1,000 Movies Ever Made, Entertainment Weekly’s 100 Greatest Movies of All Time and Total Film’s the 100 Greatest Movies of All Time.
In the decades after the film’s release, hundreds of thousands of Spinal Tap recordings have sold around the world, and they are still available in both physical and digital formats.
In response to the settlement, Harry Shearer said, “I must admit, from the moment we first began mediation with them to now, I’ve been impressed by UMG’s respect for creatives and their distinctive desire to seek a prompt and equitable solution to the issues.”ly' to Pay Nearly $10 Million Owed to Artists, Bank-Appointed Administrator Says
Christopher Guest also commented on the agreement. He said, “It was refreshing to be treated so constructively and with such courtesy by UMG and I’m pleased we have been able to resolve this.
https://www.digitalmusicnews.com/2019/10/23/pledgemusic-unlikely-to-pay-artists/
Editorial comment by DAR: Linking this article to broader issues, a 52 second video of a legendary and brilliant Spinal Tap drummer spontaneously exploding is here: https://www.youtube.com/watch?v=TW6W9iOjTKM
CMS may not have power to make hospitals disclose negotiated prices
The Trump administration wants hospitals to tell the public how much they get paid for healthcare services, but many experts don't think the CMS has the authority to force those disclosures.
READ MORE >https://www.modernhealthcare.com/law-regulation/cms-may-not-have-power-make-hospitals-disclose-negotiated-prices?utm_source=modern-healthcare-am-wednesday&utm_medium=email&utm_campaign=20191105&utm_content=article1-readmore
The Trump administration wants hospitals to tell the public how much they get paid for healthcare services, but many experts don't think the CMS has the authority to force those disclosures.
READ MORE >https://www.modernhealthcare.com/law-regulation/cms-may-not-have-power-make-hospitals-disclose-negotiated-prices?utm_source=modern-healthcare-am-wednesday&utm_medium=email&utm_campaign=20191105&utm_content=article1-readmore
Hacked voting machines and registration rolls
A few months ago Senate Intelligence Committee released a 67-page report [https://www.intelligence.senate.gov/sites/default/files/documents/Report_Volume1.pdf] concluding that, leading up to the 2016 election, Russians hacked voting machines and registration rolls in all 50 states, and they are likely still doing so.
From a Slate article:
J. Alex Halderman, a computer scientist who has tested vulnerabilities for more than a decade, testified to the Senate committee that he and his team “created attacks that can spread from machine to machine, like a computer virus, and silently change election outcomes.” They studied touch-screen and optical-scan systems, and “in every single case,” he said, “we found ways for attackers to sabotage machines and steal votes.”
Another way to throw an election might be to attack systems that manage voter-registration lists, which the hackers also did in some states. Remove people from the lists—focusing on areas dominated by members of the party that the hacker wants to lose—and they won’t be able to vote.
One former senior intelligence official told me, “If I was going to hack such a system, I’d leave the records alone and corrupt the tally software”—the programs that count the votes and transmit results to a central headquarters. The transmission is done through a network, which is vulnerable to hackers. Some data are transmitted from the voting machines via USB ports, which are also easy to hack.
In the past decade, many states have installed voting machines with paper backups. (One of the measures blocked in the Senate this week would have required them.) But the Senate report notes that 19 states do not conduct complete postelection audits to compare these ballots to the electronic results; five of them do not audit at all. Paper backups mean little if nobody looks at them.
Computerized voting might be inherently vulnerable. Matt Blaze, who holds the McDevitt Chair of Computer Science at Georgetown Law, said at a hacking conference in Washington earlier this year, “Voting security is by far the hardest problem I have ever encountered.”
The American system compounds the difficulties. The voting process must be transparent but also secret. Every vote must be counted, but no one should be able to trace a specific ballot back to a specific person—thus making verification impossible. More daunting, states, counties, and even local election districts set and enforce their own rules and standards. The Senate report notes that when President Barack Obama tried to declare elections to be “critical infrastructure,” which would have allowed intelligence and law enforcement agencies to offer technical assistance on security, many states resisted, fearing a “federal takeover.”
Finally, even if someone found a solution to the problem and convinced every election district to comply, some hacker might find a way around it. The offense-defense race in cyberspace will probably never end.
However, there is a solution to this problem, and it’s maddeningly simple: Take presidential elections out of cyberspace. In other words, go back to the paper ballot.
From: slate.com/news-and-politics/2019/07/elections-hacking-russia-senate-intelligence-committee.html
Google’s $2.1 billion acquisition of Fitbit Inc.
The acquisition means that means two of the largest technology companies will now dominate the U.S. market for fitness tracking devices and data, and the purchase is already coming under fire from U.S. lawmakers.
Google and Fitbit expect the deal to face protracted regulatory review in light of the current political focus on competition and privacy issues in the tech industry, a person familiar with the transaction said.
And two of the company’s major critics in Congress urged regulators to conduct just such a thorough review.
“Why should Google be permitted to acquire even more companies while they’re under DOJ antitrust investigation?” Josh Hawley, a Republican U.S. senator from Missouri, said on Twitter referring to the Justice Department. Representative David Cicilline, who heads the House antitrust investigation into the big tech companies, also criticized the deal.
“Google is signaling that it will continue to flex and expand its power in spite of this immense scrutiny,” said Cicilline, a Democrat from Rhode Island. “Google’s proposed acquisition of Fitbit would also give the company deep insights into Americans’ most sensitive information -- such as their health and location data -- threatening to further entrench its market power online.”
Excerpt from https://www.bloomberg.com/news/articles/2019-11-01/google-s-fitbit-acquisition-likely-to-face-antitrust-scrutiny
The acquisition means that means two of the largest technology companies will now dominate the U.S. market for fitness tracking devices and data, and the purchase is already coming under fire from U.S. lawmakers.
Google and Fitbit expect the deal to face protracted regulatory review in light of the current political focus on competition and privacy issues in the tech industry, a person familiar with the transaction said.
And two of the company’s major critics in Congress urged regulators to conduct just such a thorough review.
“Why should Google be permitted to acquire even more companies while they’re under DOJ antitrust investigation?” Josh Hawley, a Republican U.S. senator from Missouri, said on Twitter referring to the Justice Department. Representative David Cicilline, who heads the House antitrust investigation into the big tech companies, also criticized the deal.
“Google is signaling that it will continue to flex and expand its power in spite of this immense scrutiny,” said Cicilline, a Democrat from Rhode Island. “Google’s proposed acquisition of Fitbit would also give the company deep insights into Americans’ most sensitive information -- such as their health and location data -- threatening to further entrench its market power online.”
Excerpt from https://www.bloomberg.com/news/articles/2019-11-01/google-s-fitbit-acquisition-likely-to-face-antitrust-scrutiny
John Feinstein's cynical take on NCAA allowing student athletes to be paid
"They were like the robber coming out of a bank who is surrounded by the police. And they held up their hands and said, we give up. . . .Yes, I'm really sorry. And now let's negotiate."
The full interview of Feinstein is here: https://www.pbs.org/newshour/show/after-ncaa-announcement-is-allowing-compensation-for-student-athletes-inevitable
"They were like the robber coming out of a bank who is surrounded by the police. And they held up their hands and said, we give up. . . .Yes, I'm really sorry. And now let's negotiate."
The full interview of Feinstein is here: https://www.pbs.org/newshour/show/after-ncaa-announcement-is-allowing-compensation-for-student-athletes-inevitable
NBCWashington
Washington DC and e-scooter safety
By Jodie Fleischer, Rick Yarborough and Steve Jones
A man riding this e-scooter at was struck and killed by an SUV at Dupont Circle Sept. 18, 2018.
The News4 I-Team found at least 16 people around the country have died using rented e-scooters since September 2018.
And despite city leaders efforts to get a handle on this growing trend, the I-Team found the decision-makers often have little hard data to consider.
"I need data of all kinds," D.C. Councilmember Mary Cheh told the I-Team.ties Trying to Curb E-Scooter Injuries
She oversees the District's committee on transportation and says she's researching how other cities have curbed their scooter situation.
For example, Portland, Oregon, requires all riders to wear helmets. In Nashville, e-scooter riders must be 18 and have a driver's license. Atlanta banned scooter-riding on sidewalks. Beverly Hills, California, banned e-scooters all together.
"I'm not interested in banning them, but I do think we need to have some better regulation," Cheh said.
She's hosting a public hearing Monday 11-4-2019 to get input from scooter riders as well as pedestrians and drivers who've been impacted. Cheh has proposed halting scooter use overnight when it's harder to see riders, but she's open to many ideas.
Excerpt from https://www.nbcwashington.com/investigations/Cities-Look-for-Ways-to-Curb-E-Scooter-Injuries-564127151.html
NYT: TikTok v. Silicon Valley
TikTok, which is run by a seven-year-old company in Beijing called ByteDance, allows people to create short, snappy videos and share them around the world. That simple concept has fueled its rise to quickly become one of the world’s largest social networks and to mount the most direct incursion yet by a Chinese company into Silicon Valley’s turf.
Now the American internet companies are pushing back. Through knockoffs, potential acquisitions and not-so-subtle references to Chinese censorship, TikTok’s competitors have been trying to protect their home turf from the service’s advancement. They haven’t had much luck so far.
Over the past 12 months, TikTok’s app has been downloaded more than 750 million times, compared with 715 million for Facebook, 450 million for Instagram, 300 million for YouTube and 275 million for Snapchat, according to the research firm Sensor Tower.
But TikTok’s American competitors could still get some help from their government. The Committee on Foreign Investment in the United States, a federal panel that reviews foreign acquisitions of American firms, is now reviewing ByteDance’s two-year-old acquisition of Musical.ly, the American company that became TikTok, The New York Times and Reuters reported on Friday. Members of Congress had asked for a review last month.
From: https://www.nytimes.com/2019/11/03/technology/tiktok-facebook-youtube.html?action=click&auth=login-email&login=email&module=News&pgtype=Homepage
TikTok, which is run by a seven-year-old company in Beijing called ByteDance, allows people to create short, snappy videos and share them around the world. That simple concept has fueled its rise to quickly become one of the world’s largest social networks and to mount the most direct incursion yet by a Chinese company into Silicon Valley’s turf.
Now the American internet companies are pushing back. Through knockoffs, potential acquisitions and not-so-subtle references to Chinese censorship, TikTok’s competitors have been trying to protect their home turf from the service’s advancement. They haven’t had much luck so far.
Over the past 12 months, TikTok’s app has been downloaded more than 750 million times, compared with 715 million for Facebook, 450 million for Instagram, 300 million for YouTube and 275 million for Snapchat, according to the research firm Sensor Tower.
But TikTok’s American competitors could still get some help from their government. The Committee on Foreign Investment in the United States, a federal panel that reviews foreign acquisitions of American firms, is now reviewing ByteDance’s two-year-old acquisition of Musical.ly, the American company that became TikTok, The New York Times and Reuters reported on Friday. Members of Congress had asked for a review last month.
From: https://www.nytimes.com/2019/11/03/technology/tiktok-facebook-youtube.html?action=click&auth=login-email&login=email&module=News&pgtype=Homepage
Australia Says Google Misled Consumers Over Location Tracking
The company did not disclose the need to disable two different Android settings to stop data collection, regulators said in a lawsuit.
Isabella Kwai
SYDNEY, Australia — Australian regulators on Tuesday accused Google of misleading consumers about its collection of their personal location information through its Android mobile operating system, the latest government action against a tech company over its handling of vast quantities of user data.
The Australian Competition and Consumer Commission alleged in a lawsuit that Google falsely led users to believe that disabling the “Location History” setting on Android phones would stop the company from collecting their location data. But users were actually required to also turn off a second setting, “Web and App Activity,” that was enabled by default.
Excerpt from https://www.nytimes.com/2019/10/29/world/australia/australia-google-location.html
The company did not disclose the need to disable two different Android settings to stop data collection, regulators said in a lawsuit.
Isabella Kwai
SYDNEY, Australia — Australian regulators on Tuesday accused Google of misleading consumers about its collection of their personal location information through its Android mobile operating system, the latest government action against a tech company over its handling of vast quantities of user data.
The Australian Competition and Consumer Commission alleged in a lawsuit that Google falsely led users to believe that disabling the “Location History” setting on Android phones would stop the company from collecting their location data. But users were actually required to also turn off a second setting, “Web and App Activity,” that was enabled by default.
Excerpt from https://www.nytimes.com/2019/10/29/world/australia/australia-google-location.html
DMN: U.S. Appeals Court Revives Taylor Swift ‘Shake It Off’ Copyright Infringement Lawsuit
A federal court has reversed a lower court decision to dismiss a lawsuit against superstar Taylor Swift, which accuses her of plagiarizing the chorus from her song “Shake It Off.”
The story continues here.
A federal court has reversed a lower court decision to dismiss a lawsuit against superstar Taylor Swift, which accuses her of plagiarizing the chorus from her song “Shake It Off.”
The story continues here.
WSJ: Credit rating company conflicts of interest unresolved
After the financial crisis, Washington focused on the credit-ratings firms and the conflict of interest that made them “essential cogs in the wheel of financial destruction,” according to the federal government’s report on the crisis.
But the government didn’t eliminate the conflict, where the firms are paid by the entities whose bonds they rate. Instead, the Securities and Exchange Commission decided that enabling ratings firms to publish unsolicited ratings on securities they weren’t hired to analyze would be the best solution. The agency crafted a rule to give them access to deal data to publish such ratings.
A decade later, the verdict on that plan is in: The program was a failure.
Since the plan’s enactment in 2010, there is little evidence of any unsolicited ratings being published under the program, according to the ratings firms, a trade association, the SEC and a committee of bond investors advising the agency.
The SEC declined to answer questions about the program, but said in response to a public records request that, after a “thorough search” of its records, it “did not locate or identify” any examples of unsolicited ratings published by ratings firms under the program.
Moody’s, S&P Global, Fitch Ratings and Kroll Bond Rating Agency all said their respective firms haven’t produced any unsolicited ratings under the SEC’s rule. DBRS and Morningstar, which recently merged, said they didn’t produce any unsolicited ratings in 2019 and aren’t expecting to do so in the future.
The reason is simple: Ratings firms don’t get paid for unsolicited grades. And if they do issue them, they run the risk of upsetting issuers who don’t want lower ratings assigned to their deals.
For a longer version of this story online, click here.
After the financial crisis, Washington focused on the credit-ratings firms and the conflict of interest that made them “essential cogs in the wheel of financial destruction,” according to the federal government’s report on the crisis.
But the government didn’t eliminate the conflict, where the firms are paid by the entities whose bonds they rate. Instead, the Securities and Exchange Commission decided that enabling ratings firms to publish unsolicited ratings on securities they weren’t hired to analyze would be the best solution. The agency crafted a rule to give them access to deal data to publish such ratings.
A decade later, the verdict on that plan is in: The program was a failure.
Since the plan’s enactment in 2010, there is little evidence of any unsolicited ratings being published under the program, according to the ratings firms, a trade association, the SEC and a committee of bond investors advising the agency.
The SEC declined to answer questions about the program, but said in response to a public records request that, after a “thorough search” of its records, it “did not locate or identify” any examples of unsolicited ratings published by ratings firms under the program.
Moody’s, S&P Global, Fitch Ratings and Kroll Bond Rating Agency all said their respective firms haven’t produced any unsolicited ratings under the SEC’s rule. DBRS and Morningstar, which recently merged, said they didn’t produce any unsolicited ratings in 2019 and aren’t expecting to do so in the future.
The reason is simple: Ratings firms don’t get paid for unsolicited grades. And if they do issue them, they run the risk of upsetting issuers who don’t want lower ratings assigned to their deals.
For a longer version of this story online, click here.
State AGs, experts mull legal grounds for building Facebook case
By
CPI
-
October 22, 2019
State attorneys general and federal investigators gathered Monday with public policy and antitrust experts to explore the legal grounds on which they could build an antitrust case against social media giant Facebook Inc., according to people familiar with the matter.
New York Attorney General Letitia James, who has emerged as a lead figure in investigations of Facebook by more than 40 attorneys general, organized the event at her office. A spokesman for Ms. James declined to discuss it with The Wall Street Journal.
Representatives of at least 10 state attorneys general attended the meeting, according to a person familiar with it. Current and former Justice Department and Federal Trade Commission staffers, as well as academics, were also present, according to a meeting agenda viewed by the Journal. There is no formal working relationship between the attorneys general and the speakers who were at the meeting.
Full Content: Wall Street Journal
By
CPI
-
October 22, 2019
State attorneys general and federal investigators gathered Monday with public policy and antitrust experts to explore the legal grounds on which they could build an antitrust case against social media giant Facebook Inc., according to people familiar with the matter.
New York Attorney General Letitia James, who has emerged as a lead figure in investigations of Facebook by more than 40 attorneys general, organized the event at her office. A spokesman for Ms. James declined to discuss it with The Wall Street Journal.
Representatives of at least 10 state attorneys general attended the meeting, according to a person familiar with it. Current and former Justice Department and Federal Trade Commission staffers, as well as academics, were also present, according to a meeting agenda viewed by the Journal. There is no formal working relationship between the attorneys general and the speakers who were at the meeting.
Full Content: Wall Street Journal
ExxonMobil went on trial Tuesday in New York, where the oil giant stands accused by the NY AG of defrauding investors by misleading them about the risks it faces from future climate regulations.
The civil case is the first major climate change lawsuit to reach trial in the United States, and it is the culmination of four years of investigation by the New York state attorney general's office.
The central allegation is that Exxon fraudulently used two sets of books to estimate the risks it faces as governments take steps to cut greenhouse gas emissions: one that was shared with investors and another that was used only internally. The public estimate was higher, suggesting a future with stricter limits on emissions, while the internal figures were lower, reflecting more lenient regulations.
Lawyers for Attorney General Letitia James, who took office this year, a few months after the lawsuit was filed, have argued that this practice exposed investors to greater risks than Exxon had disclosed and inflated the company's value.
Excerpt from https://insideclimatenews.org/news/22102019/exxon-climate-fraud-trial-starts-new-york-letitia-james-tar-sands
The civil case is the first major climate change lawsuit to reach trial in the United States, and it is the culmination of four years of investigation by the New York state attorney general's office.
The central allegation is that Exxon fraudulently used two sets of books to estimate the risks it faces as governments take steps to cut greenhouse gas emissions: one that was shared with investors and another that was used only internally. The public estimate was higher, suggesting a future with stricter limits on emissions, while the internal figures were lower, reflecting more lenient regulations.
Lawyers for Attorney General Letitia James, who took office this year, a few months after the lawsuit was filed, have argued that this practice exposed investors to greater risks than Exxon had disclosed and inflated the company's value.
Excerpt from https://insideclimatenews.org/news/22102019/exxon-climate-fraud-trial-starts-new-york-letitia-james-tar-sands
TikTok app poses potential national security risk, says senior DemocratChuck Schumer and Tom Cotton urged inquiry, noting app reportedly censors material such as Hong Kong protest content
@adamgabbattThu 24 Oct 2019 13.18 EDTLast modified on Thu 24 Oct 2019 13.49 EDT
Chuck Schumer, the most senior Democrat in the Senate, has urged the government to investigate TikTok, describing the China-owned social media app as “a potential counter-intelligence threat we cannot ignore” and warning it could be used to interfere in US elections.TikTok, which allows users to share short videos online, has enjoyed wild success since it launched in 2017, and has been downloaded more than 1bn times.
Schumer and Tom Cotton, the Republican senator from Arkansas, co-wrote a letter to the acting director of national intelligence on Wednesday. The pair said they were writing “to express our concerns about TikTok … and the national security risks posed by its growing use in the United States”.
They wrote: “TikTok reportedly censors materials deemed politically sensitive to the Chinese Communist party, including content related to the recent Hong Kong protests, as well as references to Tiananmen Square, Tibetan and Taiwanese independence, and the treatment of the Uighurs.
The platform is also a potential target of foreign influence campaigns like those carried out during the 2016 election on US-based social media platforms.”
Credit: The Guardian
The letter is here:
NYT: Pentagon and the tech industry are collaborating on secure supply chains for essential components and software
DAR editorial comment: US military coordination with US tech companies is not new. But collaboration between the US military and US tech companies has taken on heightened significance as tensions between the US and China increase. Those tensions raise security issues with regard to certain electronic components and software. In addition, US-China rivalry drives government interest in supporting US companies as they compete with rival Chinese companies.
Without denigrating the policy arguments for US military support and collaboration with domestic tech companies, those arguments can run counter to ordinary competition practices. If security concerns and international commercial rivalries can be put to one side, the vendor with the best and cheapest product ordinarily wins the purchase order.
It is, however, unlikely that security concerns and international commercial rivalries can be put to one side. That being the case, it seems that for a number of products and services the usual competition practices that would otherwise apply will not apply. As a consequence, usual competition enforcement policies will be affected. Enforcement may be reduced. Merger enforcement agencies is an example. See https://www.nytimes.com/2018/03/12/technology/trump-broadcom-qualcomm-merger.html
Excerpt follows from NYT article at https://www.nytimes.com/2019/10/25/technology/pentagon-taiwan-tsmc-chipmaker.html?login=email&auth=login-email#after-story-ad-2
Federal agencies are grappling with a deep-rooted technology conundrum. The United States has long fielded the most advanced weaponry by exploiting electronic components once exclusively produced in the country. Chips help tanks, aircraft, rockets and ships navigate, communicate with one another and engage enemy targets.
But domestic production lines of many chips have long since moved overseas, raising questions about supply interruptions in the event of political or military crises abroad. Those fears have been exacerbated by the increasing importance of particular components — such as programmable chips that figure prominently in the F-35 fighter jet, which are designed by the Silicon Valley company Xilinx and mainly fabricated in Taiwan.
Some chips, such as the wireless baseband processors needed for new 5G communications abilities that Pentagon officials covet, require advanced manufacturing technology that has become a key selling point of TSMC.
“We in the Defense Department cannot afford to be shut out of all of those capabilities,” said Lisa Porter, deputy under secretary for research and engineering, in remarks at an event in July that were later widely circulated among chip makers.
Dr. Porter, at a technology event in Los Angeles on Wednesday, said secure supply chains for both essential components and software were a “macro” issue that the Pentagon and the tech industry had to collaborate on. She declined to discuss specific efforts to bolster American chip production. A Defense Department spokesman also declined to comment.
It is all up to when we can close the cost gap,” said Mark Liu, the chairman of TSMC.
In another sign of action, Skywater Technology, a Minnesota chip manufacturing service, said this week that the Defense Department would invest up to $170 million to increase its production and enhance technologies, such as the ability to produce chips that can withstand radiation in space.
The Skywater investment illustrates how the Pentagon is also wrestling with how to upgrade aging technology at domestic companies that make small volumes of classified chips tailored for the military. Such “trusted” factories, as they are called, operate under Pentagon rules aimed at preventing sabotage or data theft.
DAR editorial comment: US military coordination with US tech companies is not new. But collaboration between the US military and US tech companies has taken on heightened significance as tensions between the US and China increase. Those tensions raise security issues with regard to certain electronic components and software. In addition, US-China rivalry drives government interest in supporting US companies as they compete with rival Chinese companies.
Without denigrating the policy arguments for US military support and collaboration with domestic tech companies, those arguments can run counter to ordinary competition practices. If security concerns and international commercial rivalries can be put to one side, the vendor with the best and cheapest product ordinarily wins the purchase order.
It is, however, unlikely that security concerns and international commercial rivalries can be put to one side. That being the case, it seems that for a number of products and services the usual competition practices that would otherwise apply will not apply. As a consequence, usual competition enforcement policies will be affected. Enforcement may be reduced. Merger enforcement agencies is an example. See https://www.nytimes.com/2018/03/12/technology/trump-broadcom-qualcomm-merger.html
Excerpt follows from NYT article at https://www.nytimes.com/2019/10/25/technology/pentagon-taiwan-tsmc-chipmaker.html?login=email&auth=login-email#after-story-ad-2
Federal agencies are grappling with a deep-rooted technology conundrum. The United States has long fielded the most advanced weaponry by exploiting electronic components once exclusively produced in the country. Chips help tanks, aircraft, rockets and ships navigate, communicate with one another and engage enemy targets.
But domestic production lines of many chips have long since moved overseas, raising questions about supply interruptions in the event of political or military crises abroad. Those fears have been exacerbated by the increasing importance of particular components — such as programmable chips that figure prominently in the F-35 fighter jet, which are designed by the Silicon Valley company Xilinx and mainly fabricated in Taiwan.
Some chips, such as the wireless baseband processors needed for new 5G communications abilities that Pentagon officials covet, require advanced manufacturing technology that has become a key selling point of TSMC.
“We in the Defense Department cannot afford to be shut out of all of those capabilities,” said Lisa Porter, deputy under secretary for research and engineering, in remarks at an event in July that were later widely circulated among chip makers.
Dr. Porter, at a technology event in Los Angeles on Wednesday, said secure supply chains for both essential components and software were a “macro” issue that the Pentagon and the tech industry had to collaborate on. She declined to discuss specific efforts to bolster American chip production. A Defense Department spokesman also declined to comment.
It is all up to when we can close the cost gap,” said Mark Liu, the chairman of TSMC.
In another sign of action, Skywater Technology, a Minnesota chip manufacturing service, said this week that the Defense Department would invest up to $170 million to increase its production and enhance technologies, such as the ability to produce chips that can withstand radiation in space.
The Skywater investment illustrates how the Pentagon is also wrestling with how to upgrade aging technology at domestic companies that make small volumes of classified chips tailored for the military. Such “trusted” factories, as they are called, operate under Pentagon rules aimed at preventing sabotage or data theft.
Is the market for real estate agents broken?
A recent study suggests it is. The study is “Can Free Entry Be Inefficient? Fixed Commissions and Social Waste in the Real Estate Industry,” by the economists Chang-Tai Hsieh, a professor at the University of Chicago, and Enrico Moretti, a professor at the University of California, Berkeley. https://faculty.chicagobooth.edu/chang-tai.hsieh/research/jpe%20real%20estate.pdf
As explained in a recent NYT article, the authors point out that the total in commissions paid for selling a home — as much as 6 percent, when agents for both sellers and buyers are taken into account — appears to be stuck at a high rate.
That’s said to be because the house seller typically sets and pays the commission that goes to the buyer’s agent. This arrangement appears to have neutered competition over commission rates. It ensures that relatively few individual sellers deviate from the norm of paying high commission rates, because if they did, buyers’ agents might respond by steering clients toward someone else’s house. So while sellers would like to cut commission rates, it’s generally not in an individual’s interests to be the first to do so.
Some homeowners opt out of the whole system and sell their homes without agents, but most stick with the high-commission norm. As a result, competition has done little to reduce real estate commissions.
But the high commissions haven’t made most real estate agents rich: The median agent earned $48,690 in 2018, according to the Bureau of Labor Statistics.
Instead, the commissions have created a bloated and unproductive sector. That’s because the possibility of earning enormous commissions is so powerful an incentive that it has led thousands of people to become real estate agents.
When lots of agents chase a limited number of deals, many of them end up underemployed, working on only a handful of deals annually.
Credit: https://www.nytimes.com/2019/10/24/business/real-estate-fee-for-service.html?login=email&auth=login-email&login=google&auth=login-google
A recent study suggests it is. The study is “Can Free Entry Be Inefficient? Fixed Commissions and Social Waste in the Real Estate Industry,” by the economists Chang-Tai Hsieh, a professor at the University of Chicago, and Enrico Moretti, a professor at the University of California, Berkeley. https://faculty.chicagobooth.edu/chang-tai.hsieh/research/jpe%20real%20estate.pdf
As explained in a recent NYT article, the authors point out that the total in commissions paid for selling a home — as much as 6 percent, when agents for both sellers and buyers are taken into account — appears to be stuck at a high rate.
That’s said to be because the house seller typically sets and pays the commission that goes to the buyer’s agent. This arrangement appears to have neutered competition over commission rates. It ensures that relatively few individual sellers deviate from the norm of paying high commission rates, because if they did, buyers’ agents might respond by steering clients toward someone else’s house. So while sellers would like to cut commission rates, it’s generally not in an individual’s interests to be the first to do so.
Some homeowners opt out of the whole system and sell their homes without agents, but most stick with the high-commission norm. As a result, competition has done little to reduce real estate commissions.
But the high commissions haven’t made most real estate agents rich: The median agent earned $48,690 in 2018, according to the Bureau of Labor Statistics.
Instead, the commissions have created a bloated and unproductive sector. That’s because the possibility of earning enormous commissions is so powerful an incentive that it has led thousands of people to become real estate agents.
When lots of agents chase a limited number of deals, many of them end up underemployed, working on only a handful of deals annually.
Credit: https://www.nytimes.com/2019/10/24/business/real-estate-fee-for-service.html?login=email&auth=login-email&login=google&auth=login-google
The actress Rose McGowan has sued Harvey Weinstein and the lawyers David Boies and Lisa Bloom, accusing them of directing a campaign of covert and illegal measures meant to discredit her and prevent her from going public with her rape accusation against him
The lawsuit includes Ms. McGowan’s account of attempts to interfere with her plan to publish a memoir, “Brave,” including sending an undercover agent to befriend her and then steal a copy of the manuscript. It also describes efforts to derail the reporting by The New York Times and The New Yorker that ultimately exposed decades of accusations against Mr. Weinstein and helped ignite the #MeToo movement.
The lawsuit, filed in Federal District Court in Los Angeles, said that Mr. Weinstein tapped into a team of professionals whose goal was to “ensure that Ms. McGowan’s story never saw the light of day, and — if it did — that no one would believe her.”
Besides Mr. Weinstein, Mr. Boies and Ms. Bloom, the lawsuit names the lawyers’ firms as defendants, as well as Black Cube, a private intelligence firm that used undercover agents to approach women who had accused Mr. Weinstein of sexual misconduct.
See https://www.nytimes.com/2019/10/23/arts/rose-mcgowan-harvey-weinstein-lawsuit.html
A copy of the federal court Complaint ROSE MCGOWAN, Plaintiff, vs. HARVEY WEINSTEIN, DAVID BOIES, BOIES SCHILLER FLEXNER LLP, LISA BLOOM, THE BLOOM FIRM, B.C. STRATEGIES LTD. D/B/A BLACK CUBE, Defendants. is here: https://www.scribd.com/document/431737010/McGowan-v-Weinstein#fullscreen&from_embed
The lawsuit includes Ms. McGowan’s account of attempts to interfere with her plan to publish a memoir, “Brave,” including sending an undercover agent to befriend her and then steal a copy of the manuscript. It also describes efforts to derail the reporting by The New York Times and The New Yorker that ultimately exposed decades of accusations against Mr. Weinstein and helped ignite the #MeToo movement.
The lawsuit, filed in Federal District Court in Los Angeles, said that Mr. Weinstein tapped into a team of professionals whose goal was to “ensure that Ms. McGowan’s story never saw the light of day, and — if it did — that no one would believe her.”
Besides Mr. Weinstein, Mr. Boies and Ms. Bloom, the lawsuit names the lawyers’ firms as defendants, as well as Black Cube, a private intelligence firm that used undercover agents to approach women who had accused Mr. Weinstein of sexual misconduct.
See https://www.nytimes.com/2019/10/23/arts/rose-mcgowan-harvey-weinstein-lawsuit.html
A copy of the federal court Complaint ROSE MCGOWAN, Plaintiff, vs. HARVEY WEINSTEIN, DAVID BOIES, BOIES SCHILLER FLEXNER LLP, LISA BLOOM, THE BLOOM FIRM, B.C. STRATEGIES LTD. D/B/A BLACK CUBE, Defendants. is here: https://www.scribd.com/document/431737010/McGowan-v-Weinstein#fullscreen&from_embed
More on Attorney David Boies and Private Espionage for clients
David Boies Pleads Not Guilty
The superlawyer in such cases as Bush v. Gore and the fight for gay marriage rights makes no apologies for representing Harvey Weinstein and Theranos with zeal.
https://www.nytimes.com/2018/09/21/business/david-boies-pleads-not-guilty.html
Techdirt doesn't buy it
Shut Up David Boies . . . . by Mike Masnick (8-23-19)
NPR has an incredible story about the media and Jeffrey Epstein. You should read the whole damn thing, because no summary here will do it justice. It covers multiple attempts by various large media organizations, including Vanity Fair, the NY Times and ABC to report on Jeffrey Epstein over the years, and how Epstein, intimidated, coaxed and even potentially bought off reporters to get more favorable coverage, or to kill stories outright. It's horrific and awful and everything along those lines. Go read it.
But, I'm going to focus on the fact that NPR quotes David Boies throughout the piece, acting horrified at how the media fell down on this. He's 100% correct about that, but he's the wrong fucking messenger given his own long history doing pretty much exactly what Epstein is reported to have done regarding the media in this particular piece. Boies is defending some of Epstein's victims, and good on him to be a strong advocate for his clients and against Epstein. But this quote is not one David Boies should be making:
"We count on the press to uncover problems, not merely to report on when problems have been prosecuted and when people have been indicted, but to uncover problems before they reach that stage," says David Boies, an attorney for several of Epstein's accusers. "And here you had a terrible problem. A horrific series of abuses."
Shall we review some of the record on David Boies and his attempts to intimidate and silence the press when they tried to "uncover problems before they reach that stage"? As you may recall, one of David Boies' big clients was... Harvey Weinstein. And, as Ronan Farrow at the New Yorker reported in great detail, Boies and his firm seemed to work very, very hard to stop anyone from revealing Weinstein's problems with multiple women.
Excerpt from https://www.techdirt.com/articles/20190822/23204542844/shut-up-david-boies-you-hypocritical-censorial-oaf.shtml
David Boies and Alan Dershowitz
As the Washington Post put it, "as they reach an age when other esteemed elder statesmen of the bar might be basking in acclaim for their life’s work, the 78-year-old Boies and the 80-year-old Dershowitz are brutally yoked in a subplot of the Jeffrey Epstein sex trafficking case." The melodrama that has played out between the men includes a Florida Bar complaint filed by Dershpwiz.
See: https://www.washingtonpost.com/lifestyle/style/its-alan-dershowitz-vs-david-boies-again-and-again/2019/08/13/925bcb60-b798-11e9-a091-6a96e67d9cce_story.html
David Boies Pleads Not Guilty
The superlawyer in such cases as Bush v. Gore and the fight for gay marriage rights makes no apologies for representing Harvey Weinstein and Theranos with zeal.
https://www.nytimes.com/2018/09/21/business/david-boies-pleads-not-guilty.html
Techdirt doesn't buy it
Shut Up David Boies . . . . by Mike Masnick (8-23-19)
NPR has an incredible story about the media and Jeffrey Epstein. You should read the whole damn thing, because no summary here will do it justice. It covers multiple attempts by various large media organizations, including Vanity Fair, the NY Times and ABC to report on Jeffrey Epstein over the years, and how Epstein, intimidated, coaxed and even potentially bought off reporters to get more favorable coverage, or to kill stories outright. It's horrific and awful and everything along those lines. Go read it.
But, I'm going to focus on the fact that NPR quotes David Boies throughout the piece, acting horrified at how the media fell down on this. He's 100% correct about that, but he's the wrong fucking messenger given his own long history doing pretty much exactly what Epstein is reported to have done regarding the media in this particular piece. Boies is defending some of Epstein's victims, and good on him to be a strong advocate for his clients and against Epstein. But this quote is not one David Boies should be making:
"We count on the press to uncover problems, not merely to report on when problems have been prosecuted and when people have been indicted, but to uncover problems before they reach that stage," says David Boies, an attorney for several of Epstein's accusers. "And here you had a terrible problem. A horrific series of abuses."
Shall we review some of the record on David Boies and his attempts to intimidate and silence the press when they tried to "uncover problems before they reach that stage"? As you may recall, one of David Boies' big clients was... Harvey Weinstein. And, as Ronan Farrow at the New Yorker reported in great detail, Boies and his firm seemed to work very, very hard to stop anyone from revealing Weinstein's problems with multiple women.
Excerpt from https://www.techdirt.com/articles/20190822/23204542844/shut-up-david-boies-you-hypocritical-censorial-oaf.shtml
David Boies and Alan Dershowitz
As the Washington Post put it, "as they reach an age when other esteemed elder statesmen of the bar might be basking in acclaim for their life’s work, the 78-year-old Boies and the 80-year-old Dershowitz are brutally yoked in a subplot of the Jeffrey Epstein sex trafficking case." The melodrama that has played out between the men includes a Florida Bar complaint filed by Dershpwiz.
See: https://www.washingtonpost.com/lifestyle/style/its-alan-dershowitz-vs-david-boies-again-and-again/2019/08/13/925bcb60-b798-11e9-a091-6a96e67d9cce_story.html
Ronan Farrow on attorney David Boies and private espionage
In his new book Catch and Kill, Ronan Farrow reports that accused sexual predator Harvey Weinstein engaged David Boies as his attorney. Boies is a liberal icon who represented Al Gore in Bush v Gore. Farrow reports that Boies signed off on a contract with a private espionage company, Black Cube. Black Cube then tracked complainants in an effort to discourage efforts to bring Weinstein to account. Black Cube’s private espionage included a successful effort by a female Black Cube spy to befriend a complainant, Rose McGowan, and pump her for information.
One of Weinstein’s goals was to stop publication of a story in the New York Times that was unfavorable to Weinstein — even though Boies’ law firm represented the Times.
Like John Careyrou, the author of the book Bad Blood, which tells the story of fraud by promoters of a medical blood testing device, Farrow expresses strong disapproval of the Boies firm’s behavior. (See my earlier discussion of the Careyrou book.) But, like Careyrou, Farrow is careful not to suggest illegal or actionably unethical behavior. There is an apparent reason. The private espionage activities of the operatives engaged by the Boies firm are not too different from the sort of investigative activity that routinely occurs in divorce cases where an aggrieved spouse seeks evidence of bad behavior by the other. But both authors Farrow and Careyrou think that further discussion is warranted about the appropriate bounds for private espionage.
Farrow put a fine point on his concerns when he recently appeared on the PBS Newshour:
But there is a point at which when sophisticated lawyers, in this case, Harvey Weinstein's attorney, David Boies, something of a liberal hero, hired some of these former Mossad agents, who in turn hired subcontractors who were chasing me, chasing other reporters, staking us out.
There were multiple secret agents with false identities following accusers, following reporters. The question is, as you say, where's the line? And I think that, correctly, there's a conversation happening now in response to this reporting in this book about maybe a need for more accountability.
See https://www.pbs.org/newshour/show/what-ronan-farrow-discovered-about-the-systems-that-cover-up-sexual-misconduct
For readers interested in more detail, excerpts from Catch and Kill that focus on Black Cube espionage can be located at https://www.newyorker.com/news/annals-of-espionage/the-black-cube-chronicles-the-double-agent
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
In his new book Catch and Kill, Ronan Farrow reports that accused sexual predator Harvey Weinstein engaged David Boies as his attorney. Boies is a liberal icon who represented Al Gore in Bush v Gore. Farrow reports that Boies signed off on a contract with a private espionage company, Black Cube. Black Cube then tracked complainants in an effort to discourage efforts to bring Weinstein to account. Black Cube’s private espionage included a successful effort by a female Black Cube spy to befriend a complainant, Rose McGowan, and pump her for information.
One of Weinstein’s goals was to stop publication of a story in the New York Times that was unfavorable to Weinstein — even though Boies’ law firm represented the Times.
Like John Careyrou, the author of the book Bad Blood, which tells the story of fraud by promoters of a medical blood testing device, Farrow expresses strong disapproval of the Boies firm’s behavior. (See my earlier discussion of the Careyrou book.) But, like Careyrou, Farrow is careful not to suggest illegal or actionably unethical behavior. There is an apparent reason. The private espionage activities of the operatives engaged by the Boies firm are not too different from the sort of investigative activity that routinely occurs in divorce cases where an aggrieved spouse seeks evidence of bad behavior by the other. But both authors Farrow and Careyrou think that further discussion is warranted about the appropriate bounds for private espionage.
Farrow put a fine point on his concerns when he recently appeared on the PBS Newshour:
But there is a point at which when sophisticated lawyers, in this case, Harvey Weinstein's attorney, David Boies, something of a liberal hero, hired some of these former Mossad agents, who in turn hired subcontractors who were chasing me, chasing other reporters, staking us out.
There were multiple secret agents with false identities following accusers, following reporters. The question is, as you say, where's the line? And I think that, correctly, there's a conversation happening now in response to this reporting in this book about maybe a need for more accountability.
See https://www.pbs.org/newshour/show/what-ronan-farrow-discovered-about-the-systems-that-cover-up-sexual-misconduct
For readers interested in more detail, excerpts from Catch and Kill that focus on Black Cube espionage can be located at https://www.newyorker.com/news/annals-of-espionage/the-black-cube-chronicles-the-double-agent
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
FROM DMN:
House of Representatives Passes Small Claims Copyright Bill for Infringements Under $30,000
There’s big news on the copyright front — for small infractions.
The story continues here. https://www.digitalmusicnews.com/2019/10/23/small-claims-copyright-bill-house/
House of Representatives Passes Small Claims Copyright Bill for Infringements Under $30,000
There’s big news on the copyright front — for small infractions.
The story continues here. https://www.digitalmusicnews.com/2019/10/23/small-claims-copyright-bill-house/
NY AG on multistate investigation of Facebook
“After continued bipartisan conversations with attorneys general from around the country, today I am announcing that we have vastly expanded the list of states, districts, and territories investigating Facebook for potential antitrust violations. . . . Our investigation now has the support of 47 attorneys general from around the nation, who are all concerned that Facebook may have put consumer data at risk, reduced the quality of consumers’ choices, and increased the price of advertising. As we continue our investigation, we will use every investigative tool at our disposal to determine whether Facebook’s actions stifled competition and put users at risk.”
https://ag.ny.gov/press-release/2019/attorney-general-james-gives-update-facebook-antitrust-investigation
Low energy FTC enforcement?
NYT:
The popular skin care brand Sunday Riley has agreed to settle complaints filed by the Federal Trade Commission that the company posted fake reviews of its products online.
The settlement, which was announced on Monday, does not provide consumers with refunds, and it does not force Sunday Riley to admit any wrongdoing: The company simply agreed not to break the law in the future.
https://www.nytimes.com/2019/10/22/us/sunday-riley-fake-reviews.html
NYT:
The popular skin care brand Sunday Riley has agreed to settle complaints filed by the Federal Trade Commission that the company posted fake reviews of its products online.
The settlement, which was announced on Monday, does not provide consumers with refunds, and it does not force Sunday Riley to admit any wrongdoing: The company simply agreed not to break the law in the future.
https://www.nytimes.com/2019/10/22/us/sunday-riley-fake-reviews.html
NYT: Deed theft fraud in Brooklyn
A booming real estate market in Brooklyn is fueling a crime that law enforcement authorities say has taken hold in largely African-American neighborhoods that are being gentrified — deed theft, which involves deceiving or sometimes coercing a homeowner into signing forms that transfer ownership of a property.
In many cases, a homeowner is made to believe the documents involve some type of financial assistance, but in fact turn out to be the property deed.
Bedford-Stuyvesant and Crown Heights, both known for their collection of largely intact townhouses that cost a fraction of what similar homes sell for in Manhattan, have become hotbeds for deed theft, according to law enforcement authorities. Homeowners in Prospect Heights, Brownsville and East New York have also been targeted.
Of the nearly 3,000 deed fraud complaints recorded by the city since 2014, 1,350 — about 45 percent — have come from Brooklyn, according to data compiled by the city’s Department of Finance. (The borough accounts for roughly 30 percent of the city’s housing units.)
The authorities believe the problem may be more widespread since homeowners may not realize right away that they have been victimized.
“It’s just a drop in the bucket,” Eric Gonzalez, the Brooklyn district attorney, said at a recent town hall meeting in Bedford-Stuyvesant. “It’s really hot in the real estate market in Brooklyn. People want to steal our homes.”
Excerpt from https://www.nytimes.com/2019/10/21/nyregion/deed-theft-brooklyn.html?action=click&module=Top%20Stories&pgtype=Homepage
A booming real estate market in Brooklyn is fueling a crime that law enforcement authorities say has taken hold in largely African-American neighborhoods that are being gentrified — deed theft, which involves deceiving or sometimes coercing a homeowner into signing forms that transfer ownership of a property.
In many cases, a homeowner is made to believe the documents involve some type of financial assistance, but in fact turn out to be the property deed.
Bedford-Stuyvesant and Crown Heights, both known for their collection of largely intact townhouses that cost a fraction of what similar homes sell for in Manhattan, have become hotbeds for deed theft, according to law enforcement authorities. Homeowners in Prospect Heights, Brownsville and East New York have also been targeted.
Of the nearly 3,000 deed fraud complaints recorded by the city since 2014, 1,350 — about 45 percent — have come from Brooklyn, according to data compiled by the city’s Department of Finance. (The borough accounts for roughly 30 percent of the city’s housing units.)
The authorities believe the problem may be more widespread since homeowners may not realize right away that they have been victimized.
“It’s just a drop in the bucket,” Eric Gonzalez, the Brooklyn district attorney, said at a recent town hall meeting in Bedford-Stuyvesant. “It’s really hot in the real estate market in Brooklyn. People want to steal our homes.”
Excerpt from https://www.nytimes.com/2019/10/21/nyregion/deed-theft-brooklyn.html?action=click&module=Top%20Stories&pgtype=Homepage
From the SF Fed: Healthy Aging: A Conceptual Model of Community-based Solutions in the Face of Climate Change and Global Demographic Changes
Climate change and shifting demographic patterns require innovative ideas about how to build and adapt community infrastructure that helps older individuals thrive. Urban planners, and community investors will need to consider aging populations as they think about how the built environment can promote healthy local communities in the face of a changing climate that has acute and unique consequences for individuals aged 65 and over.
Seciah Aquino, Josefina Flores Morales, Max Aung, Mary Keovisai, and Jennifer K. McGee-Avila
The article is here:
https://www.frbsf.org/community-development/publications/community-development-investment-review/2019/october/healthy-aging-a-conceptual-model-of-community-based-solutions-in-the-face-of-climate-change-and-global-demographic-changes/
Climate change and shifting demographic patterns require innovative ideas about how to build and adapt community infrastructure that helps older individuals thrive. Urban planners, and community investors will need to consider aging populations as they think about how the built environment can promote healthy local communities in the face of a changing climate that has acute and unique consequences for individuals aged 65 and over.
Seciah Aquino, Josefina Flores Morales, Max Aung, Mary Keovisai, and Jennifer K. McGee-Avila
The article is here:
https://www.frbsf.org/community-development/publications/community-development-investment-review/2019/october/healthy-aging-a-conceptual-model-of-community-based-solutions-in-the-face-of-climate-change-and-global-demographic-changes/
Mississippi exits AGs' T-Mobile Suit
The coalition of 18 state attorneys general suing to block the Sprint-T-Mobile merger lost Mississippi, which departed the lawsuit. Mississippi struck a settlement deal securing additional mobile coverage commitments in return for support for the merger.
The coalition of 18 state attorneys general suing to block the Sprint-T-Mobile merger lost Mississippi, which departed the lawsuit. Mississippi struck a settlement deal securing additional mobile coverage commitments in return for support for the merger.
Pay to Delay’ Generic Drug Arrangements Banned in California (1)
Oct. 7, 2019,
California is the first U.S. state to ban drugmakers from brokering agreements that delay generic drugs from reaching the market with a bill signed by Gov. Gavin Newsom (D).
“California will use our market power and our moral power to take on big drug companies and prevent them from keeping affordable generic drugs out of the hands of people who need them,” Newsom said. “Competition in the pharmaceutical industry helps lower prices for Californians who rely on life-saving treatments.”
California Attorney General Xavier Becerra (D) backed the measure, A.B. 824, [https://src.bna.com/LKm] to target settlements in drug patent infringement lawsuits between brand-name and generic drug companies.
Excerpt Credit: Bloomberg (paywall)
Oct. 7, 2019,
California is the first U.S. state to ban drugmakers from brokering agreements that delay generic drugs from reaching the market with a bill signed by Gov. Gavin Newsom (D).
“California will use our market power and our moral power to take on big drug companies and prevent them from keeping affordable generic drugs out of the hands of people who need them,” Newsom said. “Competition in the pharmaceutical industry helps lower prices for Californians who rely on life-saving treatments.”
California Attorney General Xavier Becerra (D) backed the measure, A.B. 824, [https://src.bna.com/LKm] to target settlements in drug patent infringement lawsuits between brand-name and generic drug companies.
Excerpt Credit: Bloomberg (paywall)
Pacific Gas and Electric Co. bondholders and wildfire victims have joined forces and proposed their own reorganization plan as they try to wrest control of the bankrupt company from its stockholders.
The two groups told PG&E’s bankruptcy judge Thursday their proposal would include a $24 billion settlement to pay everyone owed money because of fires started by the company’s power lines in recent years, the San Francisco Chronicle reported.
PG&E has offered to pay individual victims from a trust capped at $8.4 billion and reached settlements with insurers and local governments of $11 billion and $1 billion, respectively.
The bondholders’ proposal would invest $28.4 billion in exchange for a 58.8% stake in the utility’s parent PG&E Corp., diluting the firms who currently own shares of the company. The investment would fund creation of a $24 billion trust, in cash and stock, to pay claims from various fires in which the company was involved.
The trust would be acceptable to wildfire victims because they would designate someone to “manage the process,” attorneys for the committees of wildfire victims and bondholders involved in the PG&E case said in their joint filing.
https://www.sfchronicle.com/business/article/PG-E-fire-victims-bondholders-team-up-in-attempt-14453810.php
The two groups told PG&E’s bankruptcy judge Thursday their proposal would include a $24 billion settlement to pay everyone owed money because of fires started by the company’s power lines in recent years, the San Francisco Chronicle reported.
PG&E has offered to pay individual victims from a trust capped at $8.4 billion and reached settlements with insurers and local governments of $11 billion and $1 billion, respectively.
The bondholders’ proposal would invest $28.4 billion in exchange for a 58.8% stake in the utility’s parent PG&E Corp., diluting the firms who currently own shares of the company. The investment would fund creation of a $24 billion trust, in cash and stock, to pay claims from various fires in which the company was involved.
The trust would be acceptable to wildfire victims because they would designate someone to “manage the process,” attorneys for the committees of wildfire victims and bondholders involved in the PG&E case said in their joint filing.
https://www.sfchronicle.com/business/article/PG-E-fire-victims-bondholders-team-up-in-attempt-14453810.php
Washington is adding 28 Chinese companies, government offices and security bureaus to a United States blacklist over their alleged role in facilitating human rights abuses in China's Xinjiang region.
Monday's announcement targets some of China's top artificial intelligence companies in a similar way to the US move against smartphone giant Huawei earlier this year, and comes just days before crucial trade talks between the two sides.
In a statement, the US Commerce Department said "these entities have been implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, and high-technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups in [Xinjiang].
"https://www.cnn.com/2019/10/08/business/us-china-xinjiang-black-list-intl-hnk/index.html
Monday's announcement targets some of China's top artificial intelligence companies in a similar way to the US move against smartphone giant Huawei earlier this year, and comes just days before crucial trade talks between the two sides.
In a statement, the US Commerce Department said "these entities have been implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, and high-technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups in [Xinjiang].
"https://www.cnn.com/2019/10/08/business/us-china-xinjiang-black-list-intl-hnk/index.html
Playing Both Sides: Branded Sales, Generic Drugs, and Antitrust Policy
CPI
-
October 7, 2019By Michael A. Carrier (Rutgers Law School),Mark A. Lemley (Stanford Law School) & Shawn P. Miller(University of San Diego)
The issue of high drug prices has recently exploded into public consciousness. And while many potential explanations have been offered, one has avoided scrutiny. Why has the growth in generic drugs not resulted in lower drug prices?
In this article, we explore a phenomenon we call “playing both sides”: companies that participate in pharmaceutical markets as both brand owners and generics. We hypothesize that companies that earn a significant amount of their revenue from patented drugs may have less incentive to aggressively pursue a generic agenda, since patented drugs generate far more revenue for firms than generic drugs do.
To investigate this phenomenon, we built a comprehensive database of all major pharmaceutical companies, evaluating where their revenue comes from, how that has changed over time, and how it relates to their behavior in court. Despite broad industry trends toward specialization, about one third of the firms we study have opted for a mixed business model over time. And those firms behave differently than pure generic firms. Our data show that when companies with significant generic sales play both sides, they behave differently than firms with a purer generic revenue stream. Dollar for dollar, the pure generic firms in our study challenged more patents as invalid or not infringed than the mixed firms. Further, “mixed generic” companies with growing brand sales (or a growing share of their revenue from brand sales) are more likely to settle the patent challenges they bring; companies with growing generic share are less likely to settle and more likely to take those cases to judgment. And when they do go to judgment, patent challengers with a greater generic share are more likely to win those challenges while companies with higher brand sales are less likely to win.
In short, we find evidence to support the hypothesis that generic companies that make more of their revenue from patented drugs are less likely to pursue challenges to judgment and less likely to win when they do. Playing both sides may reduce the incentive of generic challengers to fight as hard as possible to win the case before them. That may be especially true of the sorts of challenges that affect not just the patent in the instant case but might change legal doctrines that may ultimately hurt the generic challenger’s brand business.
Our article’s findings suggest a more nuanced antitrust analysis of mergers involving generic companies and patent settlements in which generics delay entering the market. In challenging more patents, settling fewer cases by agreeing to delay entry, and winning more of the cases they do bring, pure generic companies promise to unleash the generic competition that they were intended to. In the wide-ranging effort to lower drug prices, we must pay attention not only to whether a drug is patented but also to who is, or is not, challenging that patent and why.
Continue Reading… https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=3350629
CPI
-
October 7, 2019By Michael A. Carrier (Rutgers Law School),Mark A. Lemley (Stanford Law School) & Shawn P. Miller(University of San Diego)
The issue of high drug prices has recently exploded into public consciousness. And while many potential explanations have been offered, one has avoided scrutiny. Why has the growth in generic drugs not resulted in lower drug prices?
In this article, we explore a phenomenon we call “playing both sides”: companies that participate in pharmaceutical markets as both brand owners and generics. We hypothesize that companies that earn a significant amount of their revenue from patented drugs may have less incentive to aggressively pursue a generic agenda, since patented drugs generate far more revenue for firms than generic drugs do.
To investigate this phenomenon, we built a comprehensive database of all major pharmaceutical companies, evaluating where their revenue comes from, how that has changed over time, and how it relates to their behavior in court. Despite broad industry trends toward specialization, about one third of the firms we study have opted for a mixed business model over time. And those firms behave differently than pure generic firms. Our data show that when companies with significant generic sales play both sides, they behave differently than firms with a purer generic revenue stream. Dollar for dollar, the pure generic firms in our study challenged more patents as invalid or not infringed than the mixed firms. Further, “mixed generic” companies with growing brand sales (or a growing share of their revenue from brand sales) are more likely to settle the patent challenges they bring; companies with growing generic share are less likely to settle and more likely to take those cases to judgment. And when they do go to judgment, patent challengers with a greater generic share are more likely to win those challenges while companies with higher brand sales are less likely to win.
In short, we find evidence to support the hypothesis that generic companies that make more of their revenue from patented drugs are less likely to pursue challenges to judgment and less likely to win when they do. Playing both sides may reduce the incentive of generic challengers to fight as hard as possible to win the case before them. That may be especially true of the sorts of challenges that affect not just the patent in the instant case but might change legal doctrines that may ultimately hurt the generic challenger’s brand business.
Our article’s findings suggest a more nuanced antitrust analysis of mergers involving generic companies and patent settlements in which generics delay entering the market. In challenging more patents, settling fewer cases by agreeing to delay entry, and winning more of the cases they do bring, pure generic companies promise to unleash the generic competition that they were intended to. In the wide-ranging effort to lower drug prices, we must pay attention not only to whether a drug is patented but also to who is, or is not, challenging that patent and why.
Continue Reading… https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=3350629
The Trump administration has begun inserting legal protections into recent trade agreements that shield online platforms like Facebook, Twitter and YouTube from lawsuits,
a move that could help lock in America’s tech-friendly regulations around the world even as they are being newly questioned at home.
The protections, which stem from a 1990s law, have already been tucked into the administration’s two biggest trade deals — the United States-Mexico-Canada Agreement and a pact with Japan that President Trump signed on Monday. American negotiators have proposed including the language in other prospective deals, including with the European Union, Britain and members of the World Trade Organization.
From: https://www.nytimes.com/2019/10/07/business/tech-shield-trade-deals.html?action=click&module=Top%20Stories&pgtype=Homepage
a move that could help lock in America’s tech-friendly regulations around the world even as they are being newly questioned at home.
The protections, which stem from a 1990s law, have already been tucked into the administration’s two biggest trade deals — the United States-Mexico-Canada Agreement and a pact with Japan that President Trump signed on Monday. American negotiators have proposed including the language in other prospective deals, including with the European Union, Britain and members of the World Trade Organization.
From: https://www.nytimes.com/2019/10/07/business/tech-shield-trade-deals.html?action=click&module=Top%20Stories&pgtype=Homepage
Sellers and former employees familiar with Amazon’s internal strategy say the company is increasingly focused on boosting its profits on the backs of its sellers — often without any clear upside for customers.
The services include charging sellers thousands of dollars to speak to account managers, as well as making it necessary to purchase ads to guarantee the top spot on a search page. Plus, Amazon is aggressively pushing its own brands — something that may be cheaper for consumers in the short run, but demonstrates its overall power over pricing and merchandise on the site. That gives it an advantage over rival products and sellers who rely on Amazon for their livelihood and have few alternatives if they want to thrive selling online.
Amazon says its success is dependent on those sellers and insists it always prioritizes shoppers.
From:
https://www.washingtonpost.com/technology/2019/10/01/amazon-sellers-say-online-retail-giant-is-trying-help-itself-not-consumers/?arc404=true
The services include charging sellers thousands of dollars to speak to account managers, as well as making it necessary to purchase ads to guarantee the top spot on a search page. Plus, Amazon is aggressively pushing its own brands — something that may be cheaper for consumers in the short run, but demonstrates its overall power over pricing and merchandise on the site. That gives it an advantage over rival products and sellers who rely on Amazon for their livelihood and have few alternatives if they want to thrive selling online.
Amazon says its success is dependent on those sellers and insists it always prioritizes shoppers.
From:
https://www.washingtonpost.com/technology/2019/10/01/amazon-sellers-say-online-retail-giant-is-trying-help-itself-not-consumers/?arc404=true
The NY AG's Complaint against a New York student loan servicer
https://ag.ny.gov/sites/default/files/pheaa_complaint_with_file_stamp.pdf
Excerpt:
7. PHEAA, operating under the name FedLoan Servicing (“FedLoan”), services loans held by the U.S. Department of Education originated under the federal Direct Loan program, including those of New Yorkers, and those Federal Family Education Loan Program (“FFEL”) loans owned by the federal government. PHEAA also services privately-owned FFEL loans and private student loans for tens of thousands of borrowers in New York and nationwide.4
8. FedLoan also has an exclusive contract with the U.S. Department of Education to service the accounts of borrowers seeking PSLF. 5 2 153 Cong. Rec. 9540 (2007) (statement of Sen. Harkin), https://www.congress.gov/crec/2007/07/19/CREC-2007- 07-19-pt1-PgS9534.pdf. 3 Bayliss Fiddiman et al., Student Debt: An Overlooked Barrier to Increasing Teacher Diversity 3, 9 (2019), https://www.americanprogress.org/issues/education-postsecondary/reports/2019/07/09/471850/student-debtoverlooked-barrier-increasing-teacher-diversity/. 4 PHEAA conducts its student loan servicing business both as American Education Services (“AES”) and FedLoan Servicing (“FedLoan”) (collectively referred to as “PHEAA”). AES services private (non-federally guaranteed) loans and federally-guaranteed loans originated under the (now-discontinued) Federal Family Education Loan Program (“FFEL”) that are owned by private companies. FedLoan services Direct loans (loans made directly by the federal government under the current program) and FFEL loans that are owned by the federal government. The majority of the NYAG’s claims relate to PHEAA’s conduct under the FedLoan name. To the extent that this Complaint refers to conduct by the company under both names, it will refer to the company as PHEAA. 5 This includes all borrowers who file a form indicating an intention to participate in PSLF and meet certain initial eligibility requirements, even if they later decide not to pursue PSLF. Case 1:19-cv-09155 Document 1 Filed 10/03/19 Page 5 of 70 3
9. Because FedLoan is the exclusive servicer of PSLF, borrowers have no choice but to rely on FedLoan to administer PSLF fairly and correctly.
10. FedLoan has, however, failed miserably in its administration of PSLF.
11. FedLoan has proven itself unwilling or unable to perform its most fundamental task as exclusive PSLF servicer—accurately counting the qualifying payments borrowers make towards the 120 required for forgiveness. FedLoan’s failure to accurately count eligible payments drives up the cost of borrowers’ loans, extends the time that they are in repayment, and leads to improper denials when borrowers apply for loan forgiveness.
12. To add insult to injury, borrowers who attempt to question FedLoan’s counts are left waiting for months to over a year for an explanation.
13. Furthermore, FedLoan places the burden of identifying and correcting its multitude of errors on the borrowers themselves; fails to apply policies consistently; and fails to inform borrowers of options to seek appeals or “overrides” to fix FedLoan’s mistakes or undo their consequences.
14. FedLoan’s failure to properly administer the program is a significant contributor to the shockingly high rate of rejection of PSLF forgiveness applications—more than 98% of all PSLF applications have been rejected as ineligible for forgiveness. Fewer than 900 out of more than 90,000 applicants have had loan discharges processed as of June 2019.
15. FedLoan promises borrowers that it has “one goal: to help you successfully repay your loans” and that “[w]e are here to help you with every step of the [PSLF] process.”
16. But, in fact, one of the biggest obstacles borrowers face in obtaining the forgiveness they have earned is FedLoan itself. Case 1:19-cv-09155 Document 1 Filed 10/03/19 Page 6 of 70 4
17. PHEAA also fails to fairly and correctly administer income-driven repayment (“IDR”) plans, which are intended to help struggling borrowers avoid delinquency and default by limiting monthly payments based on income and household size. Among other issues, FedLoan fails to timely process IDR applications and fails to accurately calculate monthly payments.6 These delays and mistakes harm struggling borrowers and drive up the cost of their loans.
18. PHEAA’s deceptive, unfair, and abusive practices (as both FedLoan and AES) also include steering borrowers to less beneficial repayment options such as forbearance or consolidation instead of IDR plans and making false statements to borrowers with cancer about their eligibility for a special deferment.
19. PHEAA has consistently demonstrated that it is unwilling to devote the resources required to carry out its servicing obligations in a timely and competent way.
20. Student loan borrowers have no choice of servicer. PHEAA borrowers are thus trapped with a company that disregards its responsibilities and leaves them stuck with the consequences of its errors—often thousands of dollars’ worth.
21. Ultimately, PHEAA’s cavalier approach to its responsibilities has meant it has deprived borrowers of benefits which they have earned and which Congress intended them to have. Faced with PHEAA’s incompetent and indifferent servicing, borrowers report simply giving up on their hopes of ever achieving loan forgiveness or other benefits. One borrower struggling with PHEAA’s errors echoed many other complaints when she lamented, “I feel that I have no recourse in dealing with this situation since [FedLoan] is the exclusive servicer for PSLF and that [FedLoan] can do whatever they want on whatever timetable they want.”
Judge prolongs order blocking D.C.'s online sports betting contract
The District of Columbia's plan to allow online sports betting remains on hold after a D.C. Superior Court judge extended his restraining order against the awarding of a $215 million contract to Intralot, a Greek company. Judge John Campbell says he plans to rule soon on a lawsuit that claims the District's awarding of a no-bid contract runs afoul of federal law.
The Washington Post (tiered subscription model) (10/1)
The District of Columbia's plan to allow online sports betting remains on hold after a D.C. Superior Court judge extended his restraining order against the awarding of a $215 million contract to Intralot, a Greek company. Judge John Campbell says he plans to rule soon on a lawsuit that claims the District's awarding of a no-bid contract runs afoul of federal law.
The Washington Post (tiered subscription model) (10/1)
Should the public get free access to published State laws and annotations?
Georgia is suing Public.Resource.Org for disseminating the state’s Official Code of Georgia Annotated for free on the Internet. Georgia argues that while its laws can’t be copyrighted, the same isn’t true for annotations—such as the summaries of judicial interpretations of the laws—which are prepared by a private contractor. The Eleventh Circuit opinion putting them in the public domain “threatens to upend the longstanding arrangements of Georgia and numerous other states,” counsel of record Joshua Johnson of Vinson & Elkins argues in Georgia v. Public.Resource.Org.
The U.S. Government, Matthew Bender & Co. and The Software and Information Industry Association argue that only government edicts that carry the force of law should be exempt from copyright.
Public.Resource.Org is a nonprofit dedicated to improving public access to all sources of the law. It hasn’t filed its merits brief yet, but at the cert stage it acknowledged the uncertain state of the government edict doctrine and invited the court to take the case. It argues that the Georgia General Assembly “is the driving force behind the annotations’ creation” and that the Georgia Code Revision Commission “directly supervises and controls” their preparation.
Excerpt from https://www.law.com/therecorder/2019/09/27/scotus-2019-ip-cases-wont-be-boring-law-professors-say/?kw=SCOTUS%27%202019%20IP%20Cases%20Won%27t%20Be%20Boring%2C%20Law%20Professors%20Say&utm_source=email&utm_medium=enl&utm_campaign=newsupdate&utm_content=20190930&utm_term=ca
Georgia is suing Public.Resource.Org for disseminating the state’s Official Code of Georgia Annotated for free on the Internet. Georgia argues that while its laws can’t be copyrighted, the same isn’t true for annotations—such as the summaries of judicial interpretations of the laws—which are prepared by a private contractor. The Eleventh Circuit opinion putting them in the public domain “threatens to upend the longstanding arrangements of Georgia and numerous other states,” counsel of record Joshua Johnson of Vinson & Elkins argues in Georgia v. Public.Resource.Org.
The U.S. Government, Matthew Bender & Co. and The Software and Information Industry Association argue that only government edicts that carry the force of law should be exempt from copyright.
Public.Resource.Org is a nonprofit dedicated to improving public access to all sources of the law. It hasn’t filed its merits brief yet, but at the cert stage it acknowledged the uncertain state of the government edict doctrine and invited the court to take the case. It argues that the Georgia General Assembly “is the driving force behind the annotations’ creation” and that the Georgia Code Revision Commission “directly supervises and controls” their preparation.
Excerpt from https://www.law.com/therecorder/2019/09/27/scotus-2019-ip-cases-wont-be-boring-law-professors-say/?kw=SCOTUS%27%202019%20IP%20Cases%20Won%27t%20Be%20Boring%2C%20Law%20Professors%20Say&utm_source=email&utm_medium=enl&utm_campaign=newsupdate&utm_content=20190930&utm_term=ca
Resnikoff review of Chris Sagers' new book in DC Bar magazine
Commentary by Don Resnikoff
Please see my review of Chris SAgers' book at http://washingtonlawyer.dcbar.org/october2019/index.php#/38
The book is
United States v. Apple: Competition in America
Publisher: Harvard University Press
Publication date: September, 2019
In my brief commentary I suggest that there is great wisdom in Chris’s decision to look at antitrust history and policy from the perspective of a particular antitrust case that has generated a lot of public discussion. One great benefit is that his writing is likely to be accessible to nonexpert readers.
The book is well timed, coming at a moment of great uncertainty about the goals of antitrust law. Political figures like Elizabeth Warren and Bernie Sanders argue for bigger and bolder antitrust enforcement against large companies with the goal of reducing their political influence. And looming trade disputes with China appear to encourage US government engagement in industry planning and protection of non-Chinese companies engaged in product areas like 5G telecom. Daniel Sokol and others have pointed out that such industry planning undermines traditional open competition goals.
Chris seems to regret the uncertainties of current antitrust thinking: For reasons he explains in his book, he is a strong supporter of the traditional antitrust rationale that drove the prosecutors who challenged the price-fixing behavior of the book publishers and Apple’s connivance with them.
Posted by Don Allen Resnikoff, who is responsible for the content
Commentary by Don Resnikoff
Please see my review of Chris SAgers' book at http://washingtonlawyer.dcbar.org/october2019/index.php#/38
The book is
United States v. Apple: Competition in America
Publisher: Harvard University Press
Publication date: September, 2019
In my brief commentary I suggest that there is great wisdom in Chris’s decision to look at antitrust history and policy from the perspective of a particular antitrust case that has generated a lot of public discussion. One great benefit is that his writing is likely to be accessible to nonexpert readers.
The book is well timed, coming at a moment of great uncertainty about the goals of antitrust law. Political figures like Elizabeth Warren and Bernie Sanders argue for bigger and bolder antitrust enforcement against large companies with the goal of reducing their political influence. And looming trade disputes with China appear to encourage US government engagement in industry planning and protection of non-Chinese companies engaged in product areas like 5G telecom. Daniel Sokol and others have pointed out that such industry planning undermines traditional open competition goals.
Chris seems to regret the uncertainties of current antitrust thinking: For reasons he explains in his book, he is a strong supporter of the traditional antitrust rationale that drove the prosecutors who challenged the price-fixing behavior of the book publishers and Apple’s connivance with them.
Posted by Don Allen Resnikoff, who is responsible for the content
Maryland gas station becomes first in U.S. to ditch oil for 100% EV charging
By John Elkin September 27, 2019 4:54PM PST
RS Automotive of Takoma Park, a suburb of Washington, D.C., opened as a local gas station in 1958.
Depeswar Doley, owner of the station since 1997, said he was already unhappy with the way oil and gasoline companies structure contracts. They can limit the use of multiple suppliers, includ clauses that extend contracts when a certain volume of sales is not met, and limit maintenance support. These business factors were pushing him to consider other options.
A public works manager for the city of Takoma Park, Maryland, first suggested to Doley a conversation with the Electric Vehicle Institute (EVI).
With help from the institute and the Maryland Energy Administration, Doley secured a $786,000 grant to convert the station. There are more than 20,700 registered EVs in Maryland, and the area also has an electric taxi service in need of more chargers for their business.
Matthew Wade, EVI CEO, said the area has had issues with the supply of charging stations not meeting the demand of EVs. Takoma Park had just two chargers, one in a community center parking lot and the other at a street location.
“They were fully utilized throughout the day; people were lining up,” Wade said. “The city was happy they were being used, but then they said, ‘Wait, no one can get in this parking lot, because these taxis are using these chargers.” Wade says the gas station layout, which is designed for traffic flow, will help alleviate that problem.
The station will feature four dispensers that connect to a high-powered, 200-kilowatt system. The system will allow four vehicles to charge simultaneously and reach 80% battery charge in 20 to 30 minutes. Drivers can go inside and sit in an automated convenience store with screens that allow drivers to track their vehicle’s charging progress.
Doley stated: “You notice there are not too many electric vehicles on the road,” he said. “So it’s not something that I expect to become rich overnight or something like that, but it’s a good cause [and] good for the environment.
https://www.digitaltrends.com/cars/maryland-gas-station-eschews-fossil-fuel-or-electric-charging/
Controvery: California Bar Proposals for Fee-Sharing, Nonattorney Ownership
"This is madness. Why are we even contemplating allowing non-attorneys to practice law and provide legal advice?" one Big Law partner said in a letter to the California bar. Here's a snapshot of some of the other comments.
By Cheryl Miller | September 23, 2019 at 10:25 PM
Hundreds of responses received over the last two months about various California bar proposals that could alter fee-sharing and open a door to nonattorney ownership of firms reveal a common thread: Most of those who shared their thoughts don’t support a wholesale reshaping of how legal clients are served in the Golden State.
The bar asked for opinions on 16 concepts under consideration by the Task Force on Access Through Innovation of Legal Services, a panel charged with proposing ways to increase the availability of legal help. The concepts under consideration range from promoting greater use of technology to allowing different forms of fee-sharing.
Many of the respondents are solo practitioners or lawyers at small firms, although several Big Law names responded, too. The deadline for submitting comments on the state bar committee’s ideas for restructuring legal services in California ended Monday.
“This is madness. Why are we even contemplating allowing non-attorneys to practice law and provide legal advice? There are attorneys admitted to the bar of this state who are barely competent and provide questionable advice. They also commit ethical malfeasance,” Los Angeles-based Alston & Bird partner Elizabeth Sperling said in a letter. “How much worse will it be for people who are not even attorneys?”
The task force is expected to send its final recommendations to the bar’s board of trustees in January. Changes will need the approval of the California Supreme Court and possibly the Legislature.
Excerpt from: https://www.law.com/therecorder/2019/09/23/california-lawyers-slam-bar-proposals-for-fee-sharing-non-attorney-ownership/?kw=California%20Lawyers%20Slam%20Bar%20Proposals%20for%20Fee-Sharing%2C%20Non-Attorney%20Ownership&utm_source=email&utm_medium=enl&utm_campaign=newsupdate&utm_content=20190924&utm_term=ca
"This is madness. Why are we even contemplating allowing non-attorneys to practice law and provide legal advice?" one Big Law partner said in a letter to the California bar. Here's a snapshot of some of the other comments.
By Cheryl Miller | September 23, 2019 at 10:25 PM
Hundreds of responses received over the last two months about various California bar proposals that could alter fee-sharing and open a door to nonattorney ownership of firms reveal a common thread: Most of those who shared their thoughts don’t support a wholesale reshaping of how legal clients are served in the Golden State.
The bar asked for opinions on 16 concepts under consideration by the Task Force on Access Through Innovation of Legal Services, a panel charged with proposing ways to increase the availability of legal help. The concepts under consideration range from promoting greater use of technology to allowing different forms of fee-sharing.
Many of the respondents are solo practitioners or lawyers at small firms, although several Big Law names responded, too. The deadline for submitting comments on the state bar committee’s ideas for restructuring legal services in California ended Monday.
“This is madness. Why are we even contemplating allowing non-attorneys to practice law and provide legal advice? There are attorneys admitted to the bar of this state who are barely competent and provide questionable advice. They also commit ethical malfeasance,” Los Angeles-based Alston & Bird partner Elizabeth Sperling said in a letter. “How much worse will it be for people who are not even attorneys?”
The task force is expected to send its final recommendations to the bar’s board of trustees in January. Changes will need the approval of the California Supreme Court and possibly the Legislature.
Excerpt from: https://www.law.com/therecorder/2019/09/23/california-lawyers-slam-bar-proposals-for-fee-sharing-non-attorney-ownership/?kw=California%20Lawyers%20Slam%20Bar%20Proposals%20for%20Fee-Sharing%2C%20Non-Attorney%20Ownership&utm_source=email&utm_medium=enl&utm_campaign=newsupdate&utm_content=20190924&utm_term=ca
FROM DMN:
U.S. Judiciary Committee Urges the Removal of DMCA-Style Safe Harbor Provisions from Global Trade Treaties
Marsha Silva
September 23, 2019
On September 23rd the U.S. House Judiciary Committee wrote a letter to the U.S. Trade Representative, who is currently negotiating a new free trade agreement between the United States, Mexico and Canada.
The letter expressed concerns about the inclusion of a safe harbor provision that is similar to the one that exists in the Digital Millennium Copyright Act (DMCA).
The safe harbor provision in the DMCA protects internet service providers (ISPs) and user-generated platforms from the copyright infringements of their users — as long as they remove such infringements and take action against those who repeatedly violate the law. The first draft of the new trade agreement includes this provision and the music industry is not happy about it.
“The effects of Section 512 and the appropriate role of a copyright safe harbor have become the subject of much attention in recent years,” the letter declares. “Some have called on Congress to update these very provisions, enacted in the days of a dial-up Internet.”
Mitch Glazier, president of the Recording Industry Association of America (RIAA), said in response to the provision’s inclusion that trade treaties should encourage “more accountability on public platforms” for copyright infringements and not less of it.
The RIAA has been repeatedly lobbying Congress in regards to this issue. That pressure may be the source of the letter, in which the Judiciary Committee specifically pointed out that the safe harbor provision has been a topic of debate. It also mentions that a number of parties would like to see it changed as it relates to U.S. law.
Interestingly, the anti-DMCA move comes amidst a growing backlash against tech giants like Alphabet/Google and Facebook.
Of the pair, Google remains notorious for exploiting DMCA provisions, both on its core search results and YouTube. Across the country, California has already taken steps to clampdown on ‘gig economy’ tech giants Uber and Lyft, though it’s unclear how that spills into broader anti-tech legislation nationwide.
The letter also made note of the fact that the U.S. Government has been reviewing the safe harbor provision for a number of years. Lawmakers are expected to announce policy decisions by the end of this year.
The letter further mentioned the new Copyright Directive issued by the European Union. The Directive has dramatically increased liabilities for service providers and may affect the debate over the provisions in the United States.
While the Judiciary Committee insists that it is not taking an official stand on the safe harbor provision, it believes that adding the provision to new trade treaties would not be wise.
Of course, service providers don’t concur with this sentiment.
Here’s a full copy of the letter. https://www.digitalmusicnews.com/wp-content/uploads/2019/09/Ambassador-Lighthizer-USMCA-letter-9.17.19.pdf
U.S. Judiciary Committee Urges the Removal of DMCA-Style Safe Harbor Provisions from Global Trade Treaties
Marsha Silva
September 23, 2019
On September 23rd the U.S. House Judiciary Committee wrote a letter to the U.S. Trade Representative, who is currently negotiating a new free trade agreement between the United States, Mexico and Canada.
The letter expressed concerns about the inclusion of a safe harbor provision that is similar to the one that exists in the Digital Millennium Copyright Act (DMCA).
The safe harbor provision in the DMCA protects internet service providers (ISPs) and user-generated platforms from the copyright infringements of their users — as long as they remove such infringements and take action against those who repeatedly violate the law. The first draft of the new trade agreement includes this provision and the music industry is not happy about it.
“The effects of Section 512 and the appropriate role of a copyright safe harbor have become the subject of much attention in recent years,” the letter declares. “Some have called on Congress to update these very provisions, enacted in the days of a dial-up Internet.”
Mitch Glazier, president of the Recording Industry Association of America (RIAA), said in response to the provision’s inclusion that trade treaties should encourage “more accountability on public platforms” for copyright infringements and not less of it.
The RIAA has been repeatedly lobbying Congress in regards to this issue. That pressure may be the source of the letter, in which the Judiciary Committee specifically pointed out that the safe harbor provision has been a topic of debate. It also mentions that a number of parties would like to see it changed as it relates to U.S. law.
Interestingly, the anti-DMCA move comes amidst a growing backlash against tech giants like Alphabet/Google and Facebook.
Of the pair, Google remains notorious for exploiting DMCA provisions, both on its core search results and YouTube. Across the country, California has already taken steps to clampdown on ‘gig economy’ tech giants Uber and Lyft, though it’s unclear how that spills into broader anti-tech legislation nationwide.
The letter also made note of the fact that the U.S. Government has been reviewing the safe harbor provision for a number of years. Lawmakers are expected to announce policy decisions by the end of this year.
The letter further mentioned the new Copyright Directive issued by the European Union. The Directive has dramatically increased liabilities for service providers and may affect the debate over the provisions in the United States.
While the Judiciary Committee insists that it is not taking an official stand on the safe harbor provision, it believes that adding the provision to new trade treaties would not be wise.
Of course, service providers don’t concur with this sentiment.
Here’s a full copy of the letter. https://www.digitalmusicnews.com/wp-content/uploads/2019/09/Ambassador-Lighthizer-USMCA-letter-9.17.19.pdf
Boeing US$4.7B Embraer deal faces EU antitrust probe
-
Boeing is set to face an EU antitrust investigation into its bid for a controlling stake in the commercial aircraft arm of Brazil’s Embraer, Reuters reported on Monday, September 23.
According to Reuters, the deal would reshape a global passenger jet duopoly and reinforce Western plane-makers against newcomers from China, Russia, and Japan.
It would give Boeing a foothold in the lower end of the market, enabling it to better compete with the CSeries jets designed by Canada’s Bombardier and backed by European rival Airbus.
The European Commission, which has set an October 4 deadline for its preliminary review of the deal, did not respond to a request for immediate comment.
The EU competition enforcer will launch a full-scale investigation following the end of its review, which could take up to five months and raises pressure on Boeing to offer concessions to address competition concerns.
Full Content: Reuters https://www.reuters.com/article/us-embraer-m-a-boeing-eu-exclusive/exclusive-boeing-bid-for-embraer-unit-faces-eu-antitrust-probe-sources-idUSKBN1W8127
-
Boeing is set to face an EU antitrust investigation into its bid for a controlling stake in the commercial aircraft arm of Brazil’s Embraer, Reuters reported on Monday, September 23.
According to Reuters, the deal would reshape a global passenger jet duopoly and reinforce Western plane-makers against newcomers from China, Russia, and Japan.
It would give Boeing a foothold in the lower end of the market, enabling it to better compete with the CSeries jets designed by Canada’s Bombardier and backed by European rival Airbus.
The European Commission, which has set an October 4 deadline for its preliminary review of the deal, did not respond to a request for immediate comment.
The EU competition enforcer will launch a full-scale investigation following the end of its review, which could take up to five months and raises pressure on Boeing to offer concessions to address competition concerns.
Full Content: Reuters https://www.reuters.com/article/us-embraer-m-a-boeing-eu-exclusive/exclusive-boeing-bid-for-embraer-unit-faces-eu-antitrust-probe-sources-idUSKBN1W8127
California leads two-dozen states and cities suing the Trump administration over blocking of stricter state emissions standards
The lawsuit complaint is here: https://drive.google.com/file/d/1W2MIlMOr9Sc_5WSESoed09tJuvaKEnW9/view
Excerpt:
State Plaintiffs respectfully request that the Preemption Regulation be declared unlawful and set aside because it
exceeds NHTSA’s authority, contravenes Congressional intent, and is arbitrary and capricious,
and because NHTSA has failed to conduct the analysis required under the National
Environmental Policy Act (“NEPA”).
2. The Preemption Regulation declares that the federal Energy Policy and
Conservation Act of 1975, Pub. L. No. 94-163, 89 Stat. 871 (“EPCA”), preempts state laws that
regulate greenhouse gas emissions from new passenger cars and light trucks. The Preemption
Regulation targets by name the greenhouse gas emission and zero-emission vehicle standards
promulgated by the State of California (“the California standards”) and adopted by twelve other
states.
3. California has had emissions standards for light-duty vehicles for 60 years.
And the California standards at issue in this case are longstanding and fundamental parts of
many State Plaintiffs’ efforts to protect public health and welfare in their states, to meet state
goals for the reduction of harmful air pollution including greenhouse gases, and to attain or
maintain federal air quality standards. Indeed, the California standards are one of the most
effective state policies to reduce greenhouse gases and other pollutant emissions from the
transportation sector. The California standards are projected to result in more than 2 million
additional zero-emission vehicles on the road by 2025 and, in the absence of the existing federal
standards, to reduce greenhouse emissions by more than 66 million metric tons per year by 2030,
greater than the amount emitted by all power plants in California.
4. The federal government has repeatedly approved several State Plaintiffs’ use
of the California standards as necessary for a wide variety of purposes. It has granted waivers of
preemption under section 209(b) of the Clean Air Act for both the greenhouse gas (GHG)
standards (which set limits for greenhouse gas emissions from new vehicles) and the zero-
emission vehicle (“ZEV”) standards (which require that a certain percentage of new vehicles be
ZEVs). The federal government has also approved both the GHG standards and ZEV standards
as necessary components of several State Plaintiffs’ plans to attain National Ambient Air Quality
Standards under the Clean Air Act. And it has approved state reliance on the ZEV standards in
determining the pollution impacts of transportation planning decisions. Moreover, for the last
decade, the federal government has harmonized its own greenhouse gas emissions standards and
its fuel economy standards with the California standards.
5. California has been regulating vehicle emissions since 1959. Its authority to do
so has been repeatedly recognized, reaffirmed, and even expanded by Congress. In a series of
statutes and amendments adopted over five decades, including in EPCA itself and bills enacted
both before and after its passage, Congress has preserved California’s authority to adopt vehicle
emissions standards and relied on those standards as a model for the federal government and for
other states.
6. NHTSA’s Preemption Regulation flies in the face of this history. It purports to
declare that both California’s GHG standards and its ZEV standards are expressly preempted
because, in NHTSA’s current view, they are “related to fuel economy standards” within the
meaning of EPCA’s preemption provision, 49 U.S.C. § 32919. The Preemption Regulation also
purports to declare the California standards conflict-preempted under EPCA.
7. The United States Environmental Protection Agency (EPA) expressly relies on
the Preemption Regulation in its separate action withdrawing a waiver of preemption for the
California standards that EPA previously granted under Section 209(b) of the Clean Air Act.
Before this action, neither EPA nor NHTSA had ever taken final action premised on the notion
that EPCA preempts emissions standards for which California has a waiver of preemption under
the Clean Air Act.
8. Nowhere does Congress, in EPCA or any other statute, authorize NHTSA to
issue a regulation declaring that state laws are preempted by EPCA.
9. The Preemption Regulation is not only in excess of NHTSA’s jurisdiction, it is
also wrong as a matter of law. NHTSA’s position that the California standards—which regulate
vehicle emissions, not fuel economy—are preempted by EPCA contravenes EPCA itself, the
Clean Air Act, and various amendments to both statutes. It directly conflicts with the decisions
of the two federal courts that considered this question and held that California’s standards are not
preempted by EPCA. It also contradicts the Supreme Court’s decision in Massachusetts v. EPA,
549 U.S. 497 (2007), which rejected the federal government’s argument that greenhouse gas
emissions standards under the Clean Air Act interfered with NHTSA’s ability to set fuel
economy standards under EPCA.
10. Other flaws with the Preemption Regulation are evident on its face. The
Preemption Regulation declares that California’s GHG standards conflict with federal fuel
economy standards—despite the fact that California’s standards provide that manufacturers may
(and many in fact do) comply by meeting federal GHG standards issued in conjunction with
federal fuel economy standards.
11. The Preemption Regulation also declares that California’s decades-old ZEV
standards are both “related to fuel economy standards” and in conflict with them. Preemption
Regulation, p. 50. But EPCA itself demonstrates the opposite. In EPCA, Congress has not
authorized NHTSA to set fuel economy standards for vehicles, including ZEVs, that run
exclusively on alternative fuels like electricity. And it has prohibited NHTSA from taking the
availability of ZEVs into account when setting federal fuel economy standards, meaning that
ZEVs do not affect fuel economy standards. 49 U.S.C. § 32902(h)(1).
12. In addition, NHTSA has failed to consider the damage the Preemption
Regulation will inflict on the environment and public health and welfare, flouting the
Case 1:19-cv-02826 Document 1 Filed 09/20/19 Page 7 of 51
8
requirements of NEPA, 42 U.S.C. §§ 4321-4347. Remarkably, NHTSA has conducted no
analysis at all of the environmental impacts of a regulation that purports to preempt air pollution
laws in effect in states that represent more than a third of the nation’s automobile market.
13. For all of these and other reasons, State Plaintiffs respectfully request that this
Court declare the Preemption Regulation unlawful, set it aside, and enjoin its implementation.
The lawsuit complaint is here: https://drive.google.com/file/d/1W2MIlMOr9Sc_5WSESoed09tJuvaKEnW9/view
Excerpt:
State Plaintiffs respectfully request that the Preemption Regulation be declared unlawful and set aside because it
exceeds NHTSA’s authority, contravenes Congressional intent, and is arbitrary and capricious,
and because NHTSA has failed to conduct the analysis required under the National
Environmental Policy Act (“NEPA”).
2. The Preemption Regulation declares that the federal Energy Policy and
Conservation Act of 1975, Pub. L. No. 94-163, 89 Stat. 871 (“EPCA”), preempts state laws that
regulate greenhouse gas emissions from new passenger cars and light trucks. The Preemption
Regulation targets by name the greenhouse gas emission and zero-emission vehicle standards
promulgated by the State of California (“the California standards”) and adopted by twelve other
states.
3. California has had emissions standards for light-duty vehicles for 60 years.
And the California standards at issue in this case are longstanding and fundamental parts of
many State Plaintiffs’ efforts to protect public health and welfare in their states, to meet state
goals for the reduction of harmful air pollution including greenhouse gases, and to attain or
maintain federal air quality standards. Indeed, the California standards are one of the most
effective state policies to reduce greenhouse gases and other pollutant emissions from the
transportation sector. The California standards are projected to result in more than 2 million
additional zero-emission vehicles on the road by 2025 and, in the absence of the existing federal
standards, to reduce greenhouse emissions by more than 66 million metric tons per year by 2030,
greater than the amount emitted by all power plants in California.
4. The federal government has repeatedly approved several State Plaintiffs’ use
of the California standards as necessary for a wide variety of purposes. It has granted waivers of
preemption under section 209(b) of the Clean Air Act for both the greenhouse gas (GHG)
standards (which set limits for greenhouse gas emissions from new vehicles) and the zero-
emission vehicle (“ZEV”) standards (which require that a certain percentage of new vehicles be
ZEVs). The federal government has also approved both the GHG standards and ZEV standards
as necessary components of several State Plaintiffs’ plans to attain National Ambient Air Quality
Standards under the Clean Air Act. And it has approved state reliance on the ZEV standards in
determining the pollution impacts of transportation planning decisions. Moreover, for the last
decade, the federal government has harmonized its own greenhouse gas emissions standards and
its fuel economy standards with the California standards.
5. California has been regulating vehicle emissions since 1959. Its authority to do
so has been repeatedly recognized, reaffirmed, and even expanded by Congress. In a series of
statutes and amendments adopted over five decades, including in EPCA itself and bills enacted
both before and after its passage, Congress has preserved California’s authority to adopt vehicle
emissions standards and relied on those standards as a model for the federal government and for
other states.
6. NHTSA’s Preemption Regulation flies in the face of this history. It purports to
declare that both California’s GHG standards and its ZEV standards are expressly preempted
because, in NHTSA’s current view, they are “related to fuel economy standards” within the
meaning of EPCA’s preemption provision, 49 U.S.C. § 32919. The Preemption Regulation also
purports to declare the California standards conflict-preempted under EPCA.
7. The United States Environmental Protection Agency (EPA) expressly relies on
the Preemption Regulation in its separate action withdrawing a waiver of preemption for the
California standards that EPA previously granted under Section 209(b) of the Clean Air Act.
Before this action, neither EPA nor NHTSA had ever taken final action premised on the notion
that EPCA preempts emissions standards for which California has a waiver of preemption under
the Clean Air Act.
8. Nowhere does Congress, in EPCA or any other statute, authorize NHTSA to
issue a regulation declaring that state laws are preempted by EPCA.
9. The Preemption Regulation is not only in excess of NHTSA’s jurisdiction, it is
also wrong as a matter of law. NHTSA’s position that the California standards—which regulate
vehicle emissions, not fuel economy—are preempted by EPCA contravenes EPCA itself, the
Clean Air Act, and various amendments to both statutes. It directly conflicts with the decisions
of the two federal courts that considered this question and held that California’s standards are not
preempted by EPCA. It also contradicts the Supreme Court’s decision in Massachusetts v. EPA,
549 U.S. 497 (2007), which rejected the federal government’s argument that greenhouse gas
emissions standards under the Clean Air Act interfered with NHTSA’s ability to set fuel
economy standards under EPCA.
10. Other flaws with the Preemption Regulation are evident on its face. The
Preemption Regulation declares that California’s GHG standards conflict with federal fuel
economy standards—despite the fact that California’s standards provide that manufacturers may
(and many in fact do) comply by meeting federal GHG standards issued in conjunction with
federal fuel economy standards.
11. The Preemption Regulation also declares that California’s decades-old ZEV
standards are both “related to fuel economy standards” and in conflict with them. Preemption
Regulation, p. 50. But EPCA itself demonstrates the opposite. In EPCA, Congress has not
authorized NHTSA to set fuel economy standards for vehicles, including ZEVs, that run
exclusively on alternative fuels like electricity. And it has prohibited NHTSA from taking the
availability of ZEVs into account when setting federal fuel economy standards, meaning that
ZEVs do not affect fuel economy standards. 49 U.S.C. § 32902(h)(1).
12. In addition, NHTSA has failed to consider the damage the Preemption
Regulation will inflict on the environment and public health and welfare, flouting the
Case 1:19-cv-02826 Document 1 Filed 09/20/19 Page 7 of 51
8
requirements of NEPA, 42 U.S.C. §§ 4321-4347. Remarkably, NHTSA has conducted no
analysis at all of the environmental impacts of a regulation that purports to preempt air pollution
laws in effect in states that represent more than a third of the nation’s automobile market.
13. For all of these and other reasons, State Plaintiffs respectfully request that this
Court declare the Preemption Regulation unlawful, set it aside, and enjoin its implementation.
USDOJ's antitrust chief's defense of antitrust concerns with automaker agreement to adhere to California auto emission policies:
When competitors agree with each other on how to act in the marketplace, antitrust law enforcers have to step in, writes Assistant AG Makan Delrahim.
The loftiest of purported motivations do not excuse anti-competitive collusion among rivals. That’s long-standing antitrust law.
The law recognizes that when companies compete, consumers win. It deems competition to be intrinsically good, because rivalry, particularly in the form of free markets, benefits consumers by offering them both better prices and products. In turn, antitrust law negatively views conduct that harms competition.
Indeed, the Supreme Court has made it clear that in seeking to cultivate competition, antitrust laws should not render judgment on the “moral” aspirations behind the conduct.
While companies are free to make any individual public commitments or set any sales or technical limits for themselves, when competitors agree with each other on how they should act in the marketplace, antitrust law enforcers have stepped in and taken a good, hard look. Anti-competitive agreements among competitors — regardless of the purported beneficial goal — are outlawed because they reduce the incentives for companies to compete vigorously, which in turn can raise prices, reduce innovation and ultimately harm consumers.
Indeed, in multiple instances, the Supreme Court has struck down collective efforts by engineers to enhance “public safety” as well as a collective effort by criminal defense lawyers with the goal of improving quality of representation for “indigent criminal defendants.” Even laudable ends do not justify collusive means in our chosen system of laws.
This is why the nonpartisan nature of antitrust enforcement remains of utmost importance. Antitrust enforcement must prioritize protecting competition. And we do so.
The Antitrust Division’s decisions to look into an industry are based on whether the underlying conduct has the potential to harm competition. It does not look into industries because of political objectives, nor can it refrain from examining possible anti-competitive conduct because it would be politically unpopular.
Nevertheless, media personalities and politicians recently have levied the charge of “politicization” of antitrust in light of enforcement scrutiny that may not align with their political objectives. Fortunately for all Americans, the Department of Justice’s sole consideration is the law.
No goal, well-intentioned or otherwise, is an excuse for collusion or other anti-competitive behavior that runs afoul of the antitrust laws. Those who criticize even the prospect of an antitrust investigation should know that, when it comes to antitrust, politically popular ends should not justify turning a blind eye to the competition laws.
Makan Delrahim is Assistant Attorney General of the Antitrust Division, U.S. Department of Justice.
https://www.usatoday.com/story/opinion/2019/09/12/doj-antitrust-division-popular-ends-dont-justify-collusion-editorials-debates/2306078001/
When competitors agree with each other on how to act in the marketplace, antitrust law enforcers have to step in, writes Assistant AG Makan Delrahim.
The loftiest of purported motivations do not excuse anti-competitive collusion among rivals. That’s long-standing antitrust law.
The law recognizes that when companies compete, consumers win. It deems competition to be intrinsically good, because rivalry, particularly in the form of free markets, benefits consumers by offering them both better prices and products. In turn, antitrust law negatively views conduct that harms competition.
Indeed, the Supreme Court has made it clear that in seeking to cultivate competition, antitrust laws should not render judgment on the “moral” aspirations behind the conduct.
While companies are free to make any individual public commitments or set any sales or technical limits for themselves, when competitors agree with each other on how they should act in the marketplace, antitrust law enforcers have stepped in and taken a good, hard look. Anti-competitive agreements among competitors — regardless of the purported beneficial goal — are outlawed because they reduce the incentives for companies to compete vigorously, which in turn can raise prices, reduce innovation and ultimately harm consumers.
Indeed, in multiple instances, the Supreme Court has struck down collective efforts by engineers to enhance “public safety” as well as a collective effort by criminal defense lawyers with the goal of improving quality of representation for “indigent criminal defendants.” Even laudable ends do not justify collusive means in our chosen system of laws.
This is why the nonpartisan nature of antitrust enforcement remains of utmost importance. Antitrust enforcement must prioritize protecting competition. And we do so.
The Antitrust Division’s decisions to look into an industry are based on whether the underlying conduct has the potential to harm competition. It does not look into industries because of political objectives, nor can it refrain from examining possible anti-competitive conduct because it would be politically unpopular.
Nevertheless, media personalities and politicians recently have levied the charge of “politicization” of antitrust in light of enforcement scrutiny that may not align with their political objectives. Fortunately for all Americans, the Department of Justice’s sole consideration is the law.
No goal, well-intentioned or otherwise, is an excuse for collusion or other anti-competitive behavior that runs afoul of the antitrust laws. Those who criticize even the prospect of an antitrust investigation should know that, when it comes to antitrust, politically popular ends should not justify turning a blind eye to the competition laws.
Makan Delrahim is Assistant Attorney General of the Antitrust Division, U.S. Department of Justice.
https://www.usatoday.com/story/opinion/2019/09/12/doj-antitrust-division-popular-ends-dont-justify-collusion-editorials-debates/2306078001/
Five Years Later, Led Zeppelin’s “Stairway to Heaven” Copyright Lawsuit Is Still Going
Marsha Silva
September 20, 2019
For years, rock legends Led Zeppelin have had to battle in court to fight charges of widespread plagiarism during their illustrious recording career in the 1970s.The latest battle has been over their classic song “Stairway to Heaven,” and amazingly, court proceedings are now in their fifth year. On September 23rd, the battle continues — once again — in federal court.
That’s when the full ‘en banc’ panel of the U.S. Court of Appeals for the Ninth Circuit is scheduled to hear oral arguments in the copyright infringement lawsuit that the descendants of Randy Wolfe initially filed against Led Zeppelin. The descendants insist that the opening cords of “Stairway to Heaven” were stolen from a song that the late guitarist wrote called “Taurus,” which was performed by the band Spirit.
After an initial complaint in 2014, the case went to trial in California, and a jury ultimately found in favor of Led Zeppelin. But the plaintiffs in the case appealed the verdict and a 3-member panel of the Ninth Circuit unanimously overturned the verdict because the judge gave jurors erroneous information about U.S. copyright law.
The lawsuit raises a number of questions relating to what exactly is protected by U.S. copyright law. Many believe that the outcome of the case could affect other pending copyright infringement cases, such as the one pitting Marvin Gaye’s “Let’s Get It On” against Ed Sheeran and his “Thinking Out Loud”. It could also spur other cases if the lawsuit proves successful.
Unlike in previous copyright infringement cases involving Led Zeppelin, the music industry is firmly behind the band.In August, more than 120 music artists filed an amicus brief in support of the band. The artists have said that if the lawsuit against Led Zeppelin succeeds, it could seriously hamper creativity in music. Even more impressively, the U.S. government also filed an amicus brief on behalf of Led Zeppelin, citing the need to “foster innovation and creative expression.”
https://www.digitalmusicnews.com/2019/09/20/led-zeppelin-stairway-to-heaven-copyright-lawsuit-resumes/#comments
Marsha Silva
September 20, 2019
For years, rock legends Led Zeppelin have had to battle in court to fight charges of widespread plagiarism during their illustrious recording career in the 1970s.The latest battle has been over their classic song “Stairway to Heaven,” and amazingly, court proceedings are now in their fifth year. On September 23rd, the battle continues — once again — in federal court.
That’s when the full ‘en banc’ panel of the U.S. Court of Appeals for the Ninth Circuit is scheduled to hear oral arguments in the copyright infringement lawsuit that the descendants of Randy Wolfe initially filed against Led Zeppelin. The descendants insist that the opening cords of “Stairway to Heaven” were stolen from a song that the late guitarist wrote called “Taurus,” which was performed by the band Spirit.
After an initial complaint in 2014, the case went to trial in California, and a jury ultimately found in favor of Led Zeppelin. But the plaintiffs in the case appealed the verdict and a 3-member panel of the Ninth Circuit unanimously overturned the verdict because the judge gave jurors erroneous information about U.S. copyright law.
The lawsuit raises a number of questions relating to what exactly is protected by U.S. copyright law. Many believe that the outcome of the case could affect other pending copyright infringement cases, such as the one pitting Marvin Gaye’s “Let’s Get It On” against Ed Sheeran and his “Thinking Out Loud”. It could also spur other cases if the lawsuit proves successful.
Unlike in previous copyright infringement cases involving Led Zeppelin, the music industry is firmly behind the band.In August, more than 120 music artists filed an amicus brief in support of the band. The artists have said that if the lawsuit against Led Zeppelin succeeds, it could seriously hamper creativity in music. Even more impressively, the U.S. government also filed an amicus brief on behalf of Led Zeppelin, citing the need to “foster innovation and creative expression.”
https://www.digitalmusicnews.com/2019/09/20/led-zeppelin-stairway-to-heaven-copyright-lawsuit-resumes/#comments
DMN: CA statute protecting Uber gig workers hits music industry (and probably others)
California’s AB5 was signed into law this week without any exemptions or concessions for the music industry. So what happened?
California’s AB5 is designed to curtail contractor abuse by tech giants like Uber, Lyft, and GrubHub. But the law generated disastrous implications for a number of other industries reliant upon temporary contractors.
Talk to the Recording Industry Association of America (RIAA), American Association of Independent Musicians (A2IM), and the Music Artists Coalition (MAC), and California’s AB5 has the power to destroy the state’s music industry. Richard Burgess, president of A2IM, told DMN that the bill would single-handedly“gut the music industry” by making it impossible to hire the ad-hoc teams required to produce music and collaborate creatively.
Yet despite aggressive protests and consultations with California lawmakers, the bill was recently signed into law by Governor Gavin Newsom without any music industry exemptions — without even a mention of the industry at all. Meanwhile, a raft of other industries and professionals, including lawyers, fisherman, plumbers, barbers, tutors, and even newspapers won special exemptions and considerations from lawmakers.
So what happened?According to California Assemblywoman Lorena Gonzalez, the lead sponsor of AB5, the music industry simply couldn’t craft a workable set of compromises. Instead, they chose to fight the legislation entirely. “We were hopeful they would reach an agreement, but once language was drafted to chart a path forward… the recording industry preferred no legislation at all,” Gonzalez said.
Excerpt from https://www.digitalmusicnews.com/2019/09/19/music-industry-infighting-ab5/
California’s AB5 was signed into law this week without any exemptions or concessions for the music industry. So what happened?
California’s AB5 is designed to curtail contractor abuse by tech giants like Uber, Lyft, and GrubHub. But the law generated disastrous implications for a number of other industries reliant upon temporary contractors.
Talk to the Recording Industry Association of America (RIAA), American Association of Independent Musicians (A2IM), and the Music Artists Coalition (MAC), and California’s AB5 has the power to destroy the state’s music industry. Richard Burgess, president of A2IM, told DMN that the bill would single-handedly“gut the music industry” by making it impossible to hire the ad-hoc teams required to produce music and collaborate creatively.
Yet despite aggressive protests and consultations with California lawmakers, the bill was recently signed into law by Governor Gavin Newsom without any music industry exemptions — without even a mention of the industry at all. Meanwhile, a raft of other industries and professionals, including lawyers, fisherman, plumbers, barbers, tutors, and even newspapers won special exemptions and considerations from lawmakers.
So what happened?According to California Assemblywoman Lorena Gonzalez, the lead sponsor of AB5, the music industry simply couldn’t craft a workable set of compromises. Instead, they chose to fight the legislation entirely. “We were hopeful they would reach an agreement, but once language was drafted to chart a path forward… the recording industry preferred no legislation at all,” Gonzalez said.
Excerpt from https://www.digitalmusicnews.com/2019/09/19/music-industry-infighting-ab5/
CFPB explains its position that statute provision protecting Director from Removal is unconstitutional:
NCAA response to California Senate Bill 206--Measure would upend level playing field for all student-athletes
The NCAA Board of Governors sent a letter to California Gov. Gavin Newsom, making clear its belief that this bill would wipe out the distinction between college and professional athletics and eliminate the element of fairness that supports all of college sports. Text of the letter follows:
Governor Newsom:
The 1,100 schools that make up the NCAA have always, in everything we do, supported a level playing field for all student-athletes. This core belief extends to each member college and university in every state across the nation.
California Senate Bill 206 would upend that balance. If the bill becomes law and California’s 58 NCAA schools are compelled to allow an unrestricted name, image and likeness scheme, it would erase the critical distinction between college and professional athletics and, because it gives those schools an unfair recruiting advantage, would result in them eventually being unable to compete in NCAA competitions. These outcomes are untenable and would negatively impact more than 24,000 California student-athletes across three divisions.
Right now, nearly half a million student-athletes in all 50 states compete under the same rules. This bill would remove that essential element of fairness and equal treatment that forms the bedrock of college sports.
The NCAA continues to focus on the best interests of all student-athletes nationwide. NCAA member schools already are working on changing rules for all student-athletes to appropriately use their name, image and likeness in accordance with our values — but not pay them to play. The
NCAA has consistently stood by its belief that student-athletes are students first, and they should not be employees of the university.
It isn’t possible to resolve the challenges of today’s college sports environment in this way — by one state taking unilateral action. With more than 1,100 schools and nearly 500,000 student-athletes across the nation, the rules and policies of college sports must be established through the Association’s collaborative governance system. A national model of collegiate sport requires mutually agreed upon rules.
We urge the state of California to reconsider this harmful and, we believe, unconstitutional bill and hope the state will be a constructive partner in our efforts to develop a fair name, image and likeness approach for all 50 states.
Sincerely,
Members of the NCAA Board of Governors
- Stevie Baker-Watson, DePauw University
- M. Grace Calhoun, University of Pennsylvania
- Ken Chenault, General Catalyst
- Mary Sue Coleman, Association of American Universities
- John DeGioia, Georgetown University
- Michael Drake, The Ohio State University
- Philip DiStefano, University of Colorado, Boulder
- Mark Emmert, NCAA
- Sue Henderson, New Jersey City University
- Grant Hill, CBS/Warner and The Atlanta Hawks
- Sandra Jordan, University of South Carolina Aiken
- Renu Khator, University of Houston
- Laura Liesman, Georgian Court University
- Ronald Machtley, Bryant University
- The Rev. James Maher, Niagara University
- Denis McDonough, Former White House Chief of Staff
- Tori Murden McClure, Spalding University
- Gary Olson, Daemen College
- Denise Trauth, Texas State University
- Satish Tripathi, University at Buffalo, the State University of New York
- David Wilson, Morgan State University
- Randy Woodson, North Carolina State University
Media Contact
Stacey
Osburn
NCAA Director of Public and Media Relations
NCAA
317-917-6117
https://mail.yahoo.com/b/folders/1/messages/ABfzRqwJ-TciXYHiMQwZqCqmxA4?.src=ym&reason=myc&folderType=INBOX&showImages=true&offset=0
Competition policy and U.S. efforts to constrain Chinese competition in rail passenger cars*
Congress is soon expected to approve legislation with bipartisan sponsorship that would effectively bar a Chinese company that manufactures railroad passenger cars for subways, CRRC Corporation, from competing for new contracts in the United States. Government entities like the city of Chicago would be denied federal financial support for contracts with the company. The White House has expressed its support for the effort [https://www.whitehouse.gov/wp-content/uploads/2019/09/Letter-to-the-Chairs-and-Ranking-Members-of-the-House-and-Senate-Armed-Services-Committees.pdf].
A New York Times article explains that the rationale for the legislation, an add-on to a military spending bill, is at least partly economic and political: the Chinese government has pumped money into building globally competitive businesses, often creating overcapacity in markets like steel, solar panels and trains.
The Times article explains that Chinese government support for Chinese companies has lowered prices for consumers — including American taxpayers who pay for subway cars. While a subway car has not been manufactured solely by an American company in decades, CRRC’s low prices have raised concerns among American freight train manufacturing companies that the CRRC company could ultimately move into — and demolish — their business.
The Times article says that CRRC has consistently underbid its competitors, winning over urban transit agencies that are saddled with aging infrastructure and tight budgets. For the Chicago L, CRRC’s Chicago subsidiary bid $1.55 million per car, compared with a bid of $1.82 million per car by Bombardier, the Canadian manufacturer. And CRRC also proposed to build a Chicago manufacturing facility and create 170 new jobs.
Legislators argue that Chinese state-owned companies are not pursuing profit, but the policy aims of the Chinese government to dominate key global industries like electric cars, robotics and rail.
“When you can subsidize, when you can wholly own an enterprise like China does, you can create a wholly unlevel playing field,” said Senator Tammy Baldwin, a Wisconsin Democrat who is a co-sponsor of the legislation. “We’re used to that unlevel playing field existing between the U.S. and China, but now it’s happening in our own backyard.”
From the perspective of competition policy, bipartisan support for legislation that handicaps particular Chinese competitors and favors non-Chinese competitors is an important development. It is a policy quite different from simply allowing municipal and other consumers to pick products based on price and quality.
The legislation directed at CRRC is not an isolated example of US government interest in industrial policy directed against Chinese companies. For example, Senator Marco Rubio’s recently published study on meeting the challenges of Chinese competition, particularly in the IT sector, endorses an industrial policy approach: “The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy [in China] with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
The bottom line point is that at the moment there is a growing tension between a competition policy that encourages consumers to buy based simply on considerations of price and quality, and an industrial policy based on disadvantaging Chinese companies perceived as competing unfairly.
For the purposes of this brief comment the point is not that industrial policy directed against Chinese companies and favoring other companies is necessarily wrong, or that it is novel to have such an industrial policy. Similar policies have been used by the U.S. government in the past. The point is simply that government efforts to disadvantage Chinese competition are currently increasing, with broadening bipartisan support, increasing the importance of dialogue among advocates who are skeptical of US government industrial policies that limit Chinese competition, and those who advocate for putting constraints on Chinese competitors.
*The views expressed are entirely the responsibility of Don Allen Resnikoff
Additional sources:
https://www.nytimes.com/2019/09/14/business/chinese-train-national-security.html
https://www.congress.gov/bill/116th-congress/house-bill/2500/text#toc-H3A11FD2AB8A744FD8678D9165826EF95 [at Section 896]
"Tensions between Antitrust and Industrial Policy" by D. Daniel ...
https://scholarship.law.ufl.edu › facultypub
by DD Sokol - 2015 - Cited by 22 - Related articles
Sound antitrust law and policy is in tension with industrial policy. Antitrust promotes consumer welfare whereas industrial policy promotes government intervention for privileged groups or industries.
Congress is soon expected to approve legislation with bipartisan sponsorship that would effectively bar a Chinese company that manufactures railroad passenger cars for subways, CRRC Corporation, from competing for new contracts in the United States. Government entities like the city of Chicago would be denied federal financial support for contracts with the company. The White House has expressed its support for the effort [https://www.whitehouse.gov/wp-content/uploads/2019/09/Letter-to-the-Chairs-and-Ranking-Members-of-the-House-and-Senate-Armed-Services-Committees.pdf].
A New York Times article explains that the rationale for the legislation, an add-on to a military spending bill, is at least partly economic and political: the Chinese government has pumped money into building globally competitive businesses, often creating overcapacity in markets like steel, solar panels and trains.
The Times article explains that Chinese government support for Chinese companies has lowered prices for consumers — including American taxpayers who pay for subway cars. While a subway car has not been manufactured solely by an American company in decades, CRRC’s low prices have raised concerns among American freight train manufacturing companies that the CRRC company could ultimately move into — and demolish — their business.
The Times article says that CRRC has consistently underbid its competitors, winning over urban transit agencies that are saddled with aging infrastructure and tight budgets. For the Chicago L, CRRC’s Chicago subsidiary bid $1.55 million per car, compared with a bid of $1.82 million per car by Bombardier, the Canadian manufacturer. And CRRC also proposed to build a Chicago manufacturing facility and create 170 new jobs.
Legislators argue that Chinese state-owned companies are not pursuing profit, but the policy aims of the Chinese government to dominate key global industries like electric cars, robotics and rail.
“When you can subsidize, when you can wholly own an enterprise like China does, you can create a wholly unlevel playing field,” said Senator Tammy Baldwin, a Wisconsin Democrat who is a co-sponsor of the legislation. “We’re used to that unlevel playing field existing between the U.S. and China, but now it’s happening in our own backyard.”
From the perspective of competition policy, bipartisan support for legislation that handicaps particular Chinese competitors and favors non-Chinese competitors is an important development. It is a policy quite different from simply allowing municipal and other consumers to pick products based on price and quality.
The legislation directed at CRRC is not an isolated example of US government interest in industrial policy directed against Chinese companies. For example, Senator Marco Rubio’s recently published study on meeting the challenges of Chinese competition, particularly in the IT sector, endorses an industrial policy approach: “The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy [in China] with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
The bottom line point is that at the moment there is a growing tension between a competition policy that encourages consumers to buy based simply on considerations of price and quality, and an industrial policy based on disadvantaging Chinese companies perceived as competing unfairly.
For the purposes of this brief comment the point is not that industrial policy directed against Chinese companies and favoring other companies is necessarily wrong, or that it is novel to have such an industrial policy. Similar policies have been used by the U.S. government in the past. The point is simply that government efforts to disadvantage Chinese competition are currently increasing, with broadening bipartisan support, increasing the importance of dialogue among advocates who are skeptical of US government industrial policies that limit Chinese competition, and those who advocate for putting constraints on Chinese competitors.
*The views expressed are entirely the responsibility of Don Allen Resnikoff
Additional sources:
https://www.nytimes.com/2019/09/14/business/chinese-train-national-security.html
https://www.congress.gov/bill/116th-congress/house-bill/2500/text#toc-H3A11FD2AB8A744FD8678D9165826EF95 [at Section 896]
"Tensions between Antitrust and Industrial Policy" by D. Daniel ...
https://scholarship.law.ufl.edu › facultypub
by DD Sokol - 2015 - Cited by 22 - Related articles
Sound antitrust law and policy is in tension with industrial policy. Antitrust promotes consumer welfare whereas industrial policy promotes government intervention for privileged groups or industries.
DMN:
Small Claims Copyright Court Is Getting Closer to Reality — A Full Congressional Vote On the ‘CASE Act’ Is Next
What if smaller copyright infringement cases could be quickly resolved in the U.S. legal system — just like Small Claims Court? That’s the idea behind the newly-revived CASE Act.
The story continues here. https://www.digitalmusicnews.com/2019/09/11/case-act-small-claims-copyright-court/
Small Claims Copyright Court Is Getting Closer to Reality — A Full Congressional Vote On the ‘CASE Act’ Is Next
What if smaller copyright infringement cases could be quickly resolved in the U.S. legal system — just like Small Claims Court? That’s the idea behind the newly-revived CASE Act.
The story continues here. https://www.digitalmusicnews.com/2019/09/11/case-act-small-claims-copyright-court/
NYT Opinion
A Cruel Parody of Antitrust Enforcement
The Justice Department is roughing up Mr. Trump’s political enemies and threatening the environment.
By The NYT Editorial Board
President Trump’s Justice Department — for it is increasingly clear that the department has been reduced to an arm of the White House — has opened an antitrust investigation of four auto companies that had the temerity to defy the president by voluntarily agreeing to reduce auto emissions below the level required by current federal law.
The investigation is an act of bullying, plain and simple: a nakedly political abuse of authority.
The department is supposed to prevent companies from acting in their own interest at the expense of the public. The four automakers, by contrast, are acting in the public interest.
That the government of the United States would fight to loosen emissions standards in the face of the growing threat posed by climate change also boggles the mind. Not content to fiddle while the planet burns, Mr. Trump is fanning the flames.
Ford, BMW North America, Volkswagen Group of America and Honda struck a deal with the State of California in July. They agreed to reach an average fuel efficiency standard of at least 51 miles per gallon by 2026. That falls short of an Obama administration rule that would have required average fuel efficiency of 54.5 miles per gallon by 2025. But it is certainly better than the goal of 37 miles per gallon favored by the Trump administration.
Mr. Trump reacted to the deal with predictable fury. The administration denounced it as a “P.R. stunt,” and threatened to end California’s longstanding authority to set its own tougher fuel efficiency standards — an attempt that would surely end up in court.
Now the administration has gone further, firing a shot across the bows of the automakers that signed the deal, and of those that might. The Times reported the German government warned Mercedes-Benz not to join the California agreement after learning of the federal investigation.
Antitrust law grants the government broad authority to police anticompetitive practices, and the Justice Department has dressed up its actions with the fig leaf that the companies may have colluded by collectively agreeing to the tougher standards, which could result in higher prices for new cars and light trucks.
The investigation is particularly striking because the department has shown little interest in preventing corporations from engaging in actual anticompetitive behavior.
From https://www.nytimes.com/section/opinion
o o o o o o o o o
LA Times opinion:
Editorial: Trump is trying to bully California and carmakers into giving up on climate change
(Los Angeles Times)
By THE TIMES EDITORIAL BOARD
SEP. 6, 2019
Sometimes it seems like the only consistent policy coming out of the White House these days is vindictiveness.
Case in point: Still seething over California’s end-run around its plan to roll back fuel economy and greenhouse gas emissions targets on new cars, the Trump administration has launched an antitrust investigation into four automakers that reached an agreement with the state to make their cars run cleaner.
The administration also sent a letter to California officials warning darkly of “legal consequences” if the state does not abandon the agreement. And it’s considering revoking California’s long-standing authority to set tougher auto pollution standards than those required by the federal government — an authority Congress has provided at least since 1967 in recognition of the state’s own efforts to clean its dirty air.
This is a blatant attempt to use the power of the federal government to bully companies that disagree with the president. It’s especially galling that the administration would use the threat of a Justice Department investigation to pressure automakers to make cars that are worse for consumers, worse for the environment and worse for a rapidly warming planet.
In July, Gov. Gavin Newsom announced that the four companies — Ford Motor Co., Volkswagen of America, Honda and BMW — had reached a deal with the state in which they agreed to ignore the Trump administration’s plan to relax tailpipe emissions standards. Instead they would continue making their fleets more fuel-efficient and cleaner, albeit at a slightly slower pace than the original Obama-era rules required.
The rationale behind the deal was straightforward and hardly the kind of nefarious backroom dealing suggested by the Trump administration. California has the unique authority under the Clean Air Act to set its own auto emissions standards, no matter the Trump rollback, and other states can then adopt California’s model.
Carmakers plan their fleets years in advance and don’t want to sell different cars to meet different standards state by state. They want one nationwide standard. Automakers pushed the Trump administration to forgo the rollback, saying it would hurt their bottom lines and produce “untenable” instability. They wanted a compromise with California. The administration refused. So a handful of companies volunteered to meet California’s standard.
Sources told the Wall Street Journal that the Justice Department’s antitrust enforcers had acted on their own initiative — really? — out of concern that the four major automakers had conspired to limit competition by agreeing to a tougher California standard. Under the department’s logic, consumers would be harmed by reducing the availability of lower-mileage vehicles in the state.
But it’s routine for regulators to get industry feedback on the rules they’re developing. And antitrust experts say there’s nothing illegal about industry figures banding together to support a public policy, even when members of that industry take opposing positions on what the policy should be. There’s so little legal justification for what the Justice Department is doing, Congress should conduct an inquiry into why it’s happening.
It’s laughable to think that the Justice Department is suddenly worried about cartels. According to the American Antitrust Institute, enforcement of federal antitrust law has taken a nosedive in the last two and a half years. Meanwhile, the administration’s torching of federal regulations has terminated countless pro-competitive policies adopted by its predecessors.
No, the Justice Department’s move fits into a pattern of the Trump administration bringing the hammer down on those who rile the onion-skinned president. Examples include the department’s lawsuit against AT&T’s acquisition of CNN’s owner, Time Warner (the lawsuit failed), its effort to deny local policing grants to states like California that don’t support the administration’s immigration policies, and the president’s threat to withhold disaster aid to California’s fire victims because of the state’s logging rules.
Now the president is mad that car companies don’t want the regulatory relief he’s proposed, and he’s mad that companies chose to side with California. Rather than admit he was wrong and accept defeat, his administration is willing to use its immense power to try to punish dissent.
https://www.latimes.com/opinion/story/2019-09-06/trump-administration-california-carmakers-climate-change
The California agreement language is here:
https://ww2.arb.ca.gov/news/california-and-major-automakers-reach-groundbreaking-framework-agreement-clean-emission
https://ww2.arb.ca.gov/sites/default/files/2019-07/Auto%20Terms%20Signed.pdf
The DOT warning letter follows. There is a letter from USDOJ, but we don't have access to it.
https://ww2.arb.ca.gov/news/california-and-major-automakers-reach-groundbreaking-framework-agreement-clean-emission
https://ww2.arb.ca.gov/sites/default/files/2019-07/Auto%20Terms%20Signed.pdf
The DOT warning letter follows. There is a letter from USDOJ, but we don't have access to it.
Law 360: Experts skeptical about USDOJ investigation of automaker conspiracy to lower emissions
Antitrust experts are skeptical that the DOJ will be able to make a case that the agreement unlawfully restricts competition.
"This is not price-fixing, it's not restriction of output, it's an agreement on stricter emissions standards," Cornell Law School antitrust law professor George Hay said. "At the end of the day, even if you prove the worst of how this agreement came about, there's still an issue of if it translates to an antitrust violation."
Competitors agreeing to a set of technological or legal standards doesn't say anything about how they'll compete with each other, Constantine Cannon LLP antitrust partner Ankur Kapoor said.
"They're not giving any sensitive business information to one another, they're not exchanging price information or cost information, or even information about how they're going to meet these standards," Kapoor said. "I would think that the DOJ will take a look and say, 'OK, we've seen it and there's no issue here.'"
Morrison & Foerster LLP antitrust partner Lisa Phelan said the DOJ could be implying that the automakers are effectively agreeing not to sell certain, higher-polluting cars and that reduces consumer choice.
"But the impact of that on the total number of cars still available is unlikely to be found to be significant to any relevant market," said Phelan, a former chief of the DOJ Antitrust Division's National Criminal Enforcement and Washington Criminal I sections.
Even if the automakers' actions are anti-competitive, experts say they have a pretty strong defense against an antitrust charge. If they're agreeing to comply with California regulations, the state-action immunity doctrine allows states to restrain competition as long as they actively supervise it and it's pursuant to a clearly articulated state policy.
There's also the so-called Noerr-Pennington doctrine, which immunizes private entities from antitrust suits if they're attempting to influence public policy, even if the resulting policy is anti-competitive.
"With those elements in mind, the whole exercise here smacks a little bit of political overreach," said Simpson Thacher & Bartlett LLP partner John Terzaken, a former criminal enforcement director of the Antitrust Division. "I know there was a suggestion that this isn't being driven politically, but you have to look at that with a bit of a jaundiced eye, if you've got two different executive branch agencies now reaching out to California on the very same issue."
New York University School of Law antitrust professor Harry First said the suspicion that DOJ antitrust enforcement is motivated by President Donald Trump's politics has hung over his administration since the litigation unsuccessfully challenging the AT&T-Time Warner merger.
"It's like alarm bells are going off on this," First said.
Read more at: https://www.law360.com/competition/articles/1196186/trump-doj-turn-up-heat-on-calif-car-emissions-deal?copied=1 [pay wall]
Antitrust experts are skeptical that the DOJ will be able to make a case that the agreement unlawfully restricts competition.
"This is not price-fixing, it's not restriction of output, it's an agreement on stricter emissions standards," Cornell Law School antitrust law professor George Hay said. "At the end of the day, even if you prove the worst of how this agreement came about, there's still an issue of if it translates to an antitrust violation."
Competitors agreeing to a set of technological or legal standards doesn't say anything about how they'll compete with each other, Constantine Cannon LLP antitrust partner Ankur Kapoor said.
"They're not giving any sensitive business information to one another, they're not exchanging price information or cost information, or even information about how they're going to meet these standards," Kapoor said. "I would think that the DOJ will take a look and say, 'OK, we've seen it and there's no issue here.'"
Morrison & Foerster LLP antitrust partner Lisa Phelan said the DOJ could be implying that the automakers are effectively agreeing not to sell certain, higher-polluting cars and that reduces consumer choice.
"But the impact of that on the total number of cars still available is unlikely to be found to be significant to any relevant market," said Phelan, a former chief of the DOJ Antitrust Division's National Criminal Enforcement and Washington Criminal I sections.
Even if the automakers' actions are anti-competitive, experts say they have a pretty strong defense against an antitrust charge. If they're agreeing to comply with California regulations, the state-action immunity doctrine allows states to restrain competition as long as they actively supervise it and it's pursuant to a clearly articulated state policy.
There's also the so-called Noerr-Pennington doctrine, which immunizes private entities from antitrust suits if they're attempting to influence public policy, even if the resulting policy is anti-competitive.
"With those elements in mind, the whole exercise here smacks a little bit of political overreach," said Simpson Thacher & Bartlett LLP partner John Terzaken, a former criminal enforcement director of the Antitrust Division. "I know there was a suggestion that this isn't being driven politically, but you have to look at that with a bit of a jaundiced eye, if you've got two different executive branch agencies now reaching out to California on the very same issue."
New York University School of Law antitrust professor Harry First said the suspicion that DOJ antitrust enforcement is motivated by President Donald Trump's politics has hung over his administration since the litigation unsuccessfully challenging the AT&T-Time Warner merger.
"It's like alarm bells are going off on this," First said.
Read more at: https://www.law360.com/competition/articles/1196186/trump-doj-turn-up-heat-on-calif-car-emissions-deal?copied=1 [pay wall]
Editorial comment (DAR): Compare threat to Alabama from Hurricane Dorian; threat to competition and consumers from automaker agreement to adhere to more stringent California emission standards. The answer may not be perfectly clear. Here is one theory of antitrust harm heard around the office Nespresso machine: The automaker/California agreement will harm pollution insensitive consumers wishing to get the lower price that may attach to higher polluting cars. The agreement not to produce cheaper higher emission cars will mean pollution insensitive consumers will be forced to pay more. On the other hand, maybe procompetitive justifications support the automaker actions. See the article below.
o o o o o o
More compare and contrast:
Procompetitive Justifications in Antitrust Law
94 Indiana Law Journal 501 (2019)
University of Memphis Legal Studies Research Paper No. 167
44 Pages Posted: 15 Aug 2017 Last revised: 9 Jun 2019
John M. NewmanUniversity of Miami - School of Law
Abstract
The Rule of Reason, which has come to dominate modern antitrust law, allows defendants the opportunity to justify their conduct by demonstrating “procompetitive” effects. Seizing the opportunity, defendants have begun offering increasingly numerous and creative explanations for their behavior.
But which of these myriad justifications are valid? To leading jurists and scholars, this remains an “open question," even an “absolute mystery." Examination of the relevant case law reveals a tangle of competing approaches and seemingly irreconcilable opinions. The ongoing lack of clarity in this area is inexcusable: procompetitive-justification analysis is absolutely vital to a properly functioning antitrust enterprise.
In response, this article provides answers and clarity. It identifies the “market failure” approach as doctrinally correct and economically optimal. The leading alternatives pose an unacceptably high risk of error, in the form of both false positives and false negatives. The article concludes by identifying the proper method for assessing procompetitive justifications. This three-step analytical framework increases transparency and minimizes errors, thereby maximizing societal welfare.
Yet More compare and contrast:
Four top Audi employees indicted in Dieselgate scandal19New charges shed more light on how the emissions cheating went down
By Sean O'Kane@sokane1 Jan 17, 2019,
A federal grand jury in Detroit has indicted four former Audi managers for their alleged role in the German automaker’s scheme to cheat US emissions testing on diesel-powered cars, according to a new court document published Thursday. Audi’s malfeasance was part of a larger effort from parent company Volkswagen Group to sell millions of cars with engines that were dirtier than regulations allowed, a scandal that was uncovered in 2015 and has since been dubbed “Dieselgate.”
Richard Bauder, Axel Eiser, Stefan Knirsch, and Carsten Nagel were charged with multiple counts of violating the Clean Air Act, committing wire fraud, and conspiracy to defraud the United States. All of them ran different parts of Audi’s engine development and testing divisions, and worked on the diesel engines that used “defeat devices” to cheat EPA emissions tests. None of the four are in custody, and all are believed to be in Germany, according to Reuters.
13 VOLKSWAGEN EMPLOYEES HAVE NOW BEEN CHARGED, BUT ONLY A FEW ARE IN PRISON
The total number of people who have been charged in the US over alleged involvement in Dieselgate is now 13. Volkswagen Group pled guilty in US court in 2017, and has agreed to pay back more than $20 billion to states, dealers, regulators, and individual owners. Multiple former executives are in prison, and Volkswagen’s CEO at the time — Martin Winterkorn — swiftly resigned when the news broke in 2015.
Ripple effects were still showing up, even before Thursday’s indictments. Audi’s CEO was forced out in October after he was arrested by German authorities. The European Union’s antitrust regulators are also investigating whether Volkswagen, BMW, and Daimler (the parent company of Mercedes-Benz) colluded to slow the rollout of better emissions technology. And Winterkorn has been indicted in the US on charges similar to the ones announced Thursday, though he remains in Germany.
The new indictment offers some of the clearest detail about how Audi’s scheme played out. Bauder and another diesel engine development lead, Zaccheo Giovanni Pamio (who was indicted in 2017), began designing a new 3.0 liter diesel engine in 2006 that was meant to be used in cars that would be marketed as “clean diesel,” according to the indictment. This engine was designed to use a technology that reduced emissions of harmful nitrogen dioxide, or NOx. The tradeoff, though, was that the cleaner the tailpipe emissions got, the worse the engine’s fuel economy became.
AUDI’S INSISTENCE ON LARGE TRUNK SPACE AND HIGH-END AUDIO SYSTEMS CONTRIBUTED TO THE MESS, ACCORDING TO THE INDICTMENT
According to the indictment, Bauder, Pamio, and the co-conspirators realized they “could not calibrate a diesel engine that would meet the strict NOx emissions standards in the United States” while also hitting high fuel economy targets — especially because of specific design constraints imposed by Audi, which called for a “large trunk and a high-end sound system.”
To get around this, prosecutors say that Bauder directed Audi employees to design the defeat device that made it possible to cheat emissions tests. In short, what they came up with was a piece of software that could recognize when a car was going through the EPA’s emissions tests. It would then restrict emissions to a level that complied with the standards. But when the car got back out onto the open road, it would emit up to 40 times as much NOx as was legally allowed.
From https://www.theverge.com/2019/1/17/18187558/audi-charges-dieselgate-scandal-indictment-cheating
Reminder: The editor, Don Resnikoff, is fully responsible for views that may be expressed or implied concerning the automaker/California agreement.
o o o o o o
More compare and contrast:
Procompetitive Justifications in Antitrust Law
94 Indiana Law Journal 501 (2019)
University of Memphis Legal Studies Research Paper No. 167
44 Pages Posted: 15 Aug 2017 Last revised: 9 Jun 2019
John M. NewmanUniversity of Miami - School of Law
Abstract
The Rule of Reason, which has come to dominate modern antitrust law, allows defendants the opportunity to justify their conduct by demonstrating “procompetitive” effects. Seizing the opportunity, defendants have begun offering increasingly numerous and creative explanations for their behavior.
But which of these myriad justifications are valid? To leading jurists and scholars, this remains an “open question," even an “absolute mystery." Examination of the relevant case law reveals a tangle of competing approaches and seemingly irreconcilable opinions. The ongoing lack of clarity in this area is inexcusable: procompetitive-justification analysis is absolutely vital to a properly functioning antitrust enterprise.
In response, this article provides answers and clarity. It identifies the “market failure” approach as doctrinally correct and economically optimal. The leading alternatives pose an unacceptably high risk of error, in the form of both false positives and false negatives. The article concludes by identifying the proper method for assessing procompetitive justifications. This three-step analytical framework increases transparency and minimizes errors, thereby maximizing societal welfare.
Yet More compare and contrast:
Four top Audi employees indicted in Dieselgate scandal19New charges shed more light on how the emissions cheating went down
By Sean O'Kane@sokane1 Jan 17, 2019,
A federal grand jury in Detroit has indicted four former Audi managers for their alleged role in the German automaker’s scheme to cheat US emissions testing on diesel-powered cars, according to a new court document published Thursday. Audi’s malfeasance was part of a larger effort from parent company Volkswagen Group to sell millions of cars with engines that were dirtier than regulations allowed, a scandal that was uncovered in 2015 and has since been dubbed “Dieselgate.”
Richard Bauder, Axel Eiser, Stefan Knirsch, and Carsten Nagel were charged with multiple counts of violating the Clean Air Act, committing wire fraud, and conspiracy to defraud the United States. All of them ran different parts of Audi’s engine development and testing divisions, and worked on the diesel engines that used “defeat devices” to cheat EPA emissions tests. None of the four are in custody, and all are believed to be in Germany, according to Reuters.
13 VOLKSWAGEN EMPLOYEES HAVE NOW BEEN CHARGED, BUT ONLY A FEW ARE IN PRISON
The total number of people who have been charged in the US over alleged involvement in Dieselgate is now 13. Volkswagen Group pled guilty in US court in 2017, and has agreed to pay back more than $20 billion to states, dealers, regulators, and individual owners. Multiple former executives are in prison, and Volkswagen’s CEO at the time — Martin Winterkorn — swiftly resigned when the news broke in 2015.
Ripple effects were still showing up, even before Thursday’s indictments. Audi’s CEO was forced out in October after he was arrested by German authorities. The European Union’s antitrust regulators are also investigating whether Volkswagen, BMW, and Daimler (the parent company of Mercedes-Benz) colluded to slow the rollout of better emissions technology. And Winterkorn has been indicted in the US on charges similar to the ones announced Thursday, though he remains in Germany.
The new indictment offers some of the clearest detail about how Audi’s scheme played out. Bauder and another diesel engine development lead, Zaccheo Giovanni Pamio (who was indicted in 2017), began designing a new 3.0 liter diesel engine in 2006 that was meant to be used in cars that would be marketed as “clean diesel,” according to the indictment. This engine was designed to use a technology that reduced emissions of harmful nitrogen dioxide, or NOx. The tradeoff, though, was that the cleaner the tailpipe emissions got, the worse the engine’s fuel economy became.
AUDI’S INSISTENCE ON LARGE TRUNK SPACE AND HIGH-END AUDIO SYSTEMS CONTRIBUTED TO THE MESS, ACCORDING TO THE INDICTMENT
According to the indictment, Bauder, Pamio, and the co-conspirators realized they “could not calibrate a diesel engine that would meet the strict NOx emissions standards in the United States” while also hitting high fuel economy targets — especially because of specific design constraints imposed by Audi, which called for a “large trunk and a high-end sound system.”
To get around this, prosecutors say that Bauder directed Audi employees to design the defeat device that made it possible to cheat emissions tests. In short, what they came up with was a piece of software that could recognize when a car was going through the EPA’s emissions tests. It would then restrict emissions to a level that complied with the standards. But when the car got back out onto the open road, it would emit up to 40 times as much NOx as was legally allowed.
From https://www.theverge.com/2019/1/17/18187558/audi-charges-dieselgate-scandal-indictment-cheating
Reminder: The editor, Don Resnikoff, is fully responsible for views that may be expressed or implied concerning the automaker/California agreement.
Mercado Little Spain chef Jose Andres blames payroll ‘glitch’ for underpaid staff
By Emily Saul
August 29, 2019 | 5:46pm
Mercado Little Spain chef accused of skimping stafferVictims of the $15 minimum wageJoe Biden’s no anti-racist champ and other commentaryCuomo aide rips de Blasio for touting $15 minimum wage at Dem debateRenowned chef José Andres claims a payroll defect is to blame for underpaid employees at his Hudson Yards eatery Mercado Little Spain — but employees aren’t swallowing it.
“We found a glitch in how we paid some wages in NYC- some underpaid, more overpaid. I apologize to everyone who was underpaid. We’re correcting it today,” Andres tweeted Wednesday, two days after bartender Tina Braunstein filed a suit against him and the restaurant in Manhattan federal court claiming she was paid below minimum wage.
Yet Braunstein’s attorney Maimon Kirschenbaum told The Post Andres’ statement was “farcical” — and said he’s been retained by another employee who was so disgusted with the tony chef’s payment practices that she quit just a few days into her job at the popular Mercado Little Spain.
An amended version of the class action lawsuit naming Cindy Martinez was filed Thursday.
“The violations are serious and far surpass a ‘glitch,'” Kirschenbaum wrote in the new document.
“Service employees were forced to perform hours of menial non-tipped work while being paid the ‘tip credit’ hourly rate of $10, which is less than the full minimum wage of $15,” the papers read. “Defendants’ blatant minimum wage violation has no relation to any alleged software glitch. Rather, Defendants saved money by having tipped employees perform non-tipped setup and breakdown work while illegally paying them as though they were receiving tips for that work.”
https://nypost.com/2019/08/29/mercado-little-spain-chef-jose-andres-blames-payroll-glitch-for-underpaid-staff/
Linda Greenhouse and Tony Picadio on gun rights
and the US Supreme Court
Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency.
Linda Greenhouse, a veteran New York Times journalist, commented a few weeks ago on what she called the “growing impatience of some members of the court for a chance to move the boundaries of the Second Amendment from the home — where its 2008 decision in District of Columbia v. Heller had located the amendment’s protection of the right to bear arms — out to the wider world.”
Recently, the U.S. supreme Court granted certiorari in order to consider the Second Amendment issues in New York State Rifle and Pistol Association, Inc., et al. v. The City of New York, et al. At issue is a New York City regulation that prohibited most licensed handgun owners from taking their guns out of the city, even to a second home or to a shooting range for target practice.
Greenhouse suggests that this New York case is potentially the vehicle that Justices Samuel Alito, Clarence Thomas, Neil Gorsuch and Brett Kavanaugh may have been waiting for — a chance to turn the ambiguous and quite narrow Heller decision into a broader constitutional charter for gun rights.
On July 22, New York City filed with the Supreme Court a “suggestion of mootness” and a request to suspend the briefing schedule. The city explained that two interlocking developments had occurred: In the session just ended, the State Legislature had amended the handgun licensing statute to require localities to allow licensed handgun owners to transport their guns to second homes and target ranges outside the city; and the New York City Police Department, which supervises gun licensing, had amended the prior regulation to permit the same activities. The city argued [https://www.supremecourt.gov/DocketPDF/18/18-280/108869/20190722151524926_18-280%20Suggestion%20of%20Mootness.pdf] that since the lawsuit had challenged only the second-home and shooting-range limitations, the plaintiffs now had everything they had asked for and there was nothing left for the Supreme Court to decide.
Greenhouse writes that “The Rifle & Pistol Association has fought back vigorously against mootness, arguing in a 33-page brief [https://www.supremecourt.gov/DocketPDF/18/18-280/110978/20190801121009552_18-280%20NYSRPA%20suggestion%20of%20mootness%20opposition.pdf] that ‘the city has not even tried to hide the fact that its paramount goal is to evade the prospect of a binding unfavorable decision from this court.’” Further, “the new regulation falls ‘far short’ of satisfying the plaintiffs and is ‘plainly designed to provide the bare minimum of what the city believes will suffice to moot this case, and not an inch more.’ . . . ‘The city manifestly has not altered its view that any possession of a handgun outside the home, even when the handgun is unloaded and stored away, is a privilege that the city can micromanage, rather than an individual right.’”
The justices have put the mootness dispute on the agenda for discussion at their first closed-door conference of the new term, on Oct. 1.
Linda Greenhouse’s editorial bottom line is this: if the court rules the way the plaintiffs’ lawyers are urging in the New York case and “adopts ‘strict scrutiny’ as the only valid judicial approach to assessing the constitutionality of any limitation, then the political branches will effectively lose the ability to enact what the emerging political consensus deems to be common-sense regulations.”
With regard to the underlying 2008 decision in District of Columbia v. Heller, attorney Anthony Picadio explained in his article discussing the case that while a 5 to 4 majority of the Supreme Court, in the opinion written by Justice Scalia, declared DC’s firearm regulatory scheme unconstitutional, it did so only to the extent that it prohibited possession of an operable handgun in a home for self-defense purposes.
Anthony Picadio’s article criticizes the Heller decision. He points out that the history of the Second Amendment in the lower courts since the Heller decision does in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.”
Mr. Picadio suggests that perhaps one of the reasons that expansive treatment of the Second Amendment has been so disfavored by the lower courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a militia.
Moreover, Justice Scalia’s opinion “is based on an erroneous reading of colonial history and the drafting history of the Second Amendment,’’ Mr. Picadio wrote. “If the Second Amendment had been understood to have the meaning given to it by Justice Scalia, it would not have been ratified by Virginia and the other slave states.”
The amendment began with the phrase “a well regulated Militia’’ because the Virginian founders wanted to be sure guns didn’t get into the hands of enslaved black Virginians or free black Virginians, Mr. Picadio argues. With the state’s all-white militia, this amendment helped do just that.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the Picadio article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
Mr. Picadio will speak at a luncheon program at the DC Bar on October 15.
Linda Greenhouse’s August 15, 2019 article on the Second Amendment is at https://www.nytimes.com/2019/08/15/opinion/guns-supreme-court.html
The editor, Don Allen Resnikoff, takes full responsibility for the content of this article and any opinions that may be implied.
and the US Supreme Court
Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency.
Linda Greenhouse, a veteran New York Times journalist, commented a few weeks ago on what she called the “growing impatience of some members of the court for a chance to move the boundaries of the Second Amendment from the home — where its 2008 decision in District of Columbia v. Heller had located the amendment’s protection of the right to bear arms — out to the wider world.”
Recently, the U.S. supreme Court granted certiorari in order to consider the Second Amendment issues in New York State Rifle and Pistol Association, Inc., et al. v. The City of New York, et al. At issue is a New York City regulation that prohibited most licensed handgun owners from taking their guns out of the city, even to a second home or to a shooting range for target practice.
Greenhouse suggests that this New York case is potentially the vehicle that Justices Samuel Alito, Clarence Thomas, Neil Gorsuch and Brett Kavanaugh may have been waiting for — a chance to turn the ambiguous and quite narrow Heller decision into a broader constitutional charter for gun rights.
On July 22, New York City filed with the Supreme Court a “suggestion of mootness” and a request to suspend the briefing schedule. The city explained that two interlocking developments had occurred: In the session just ended, the State Legislature had amended the handgun licensing statute to require localities to allow licensed handgun owners to transport their guns to second homes and target ranges outside the city; and the New York City Police Department, which supervises gun licensing, had amended the prior regulation to permit the same activities. The city argued [https://www.supremecourt.gov/DocketPDF/18/18-280/108869/20190722151524926_18-280%20Suggestion%20of%20Mootness.pdf] that since the lawsuit had challenged only the second-home and shooting-range limitations, the plaintiffs now had everything they had asked for and there was nothing left for the Supreme Court to decide.
Greenhouse writes that “The Rifle & Pistol Association has fought back vigorously against mootness, arguing in a 33-page brief [https://www.supremecourt.gov/DocketPDF/18/18-280/110978/20190801121009552_18-280%20NYSRPA%20suggestion%20of%20mootness%20opposition.pdf] that ‘the city has not even tried to hide the fact that its paramount goal is to evade the prospect of a binding unfavorable decision from this court.’” Further, “the new regulation falls ‘far short’ of satisfying the plaintiffs and is ‘plainly designed to provide the bare minimum of what the city believes will suffice to moot this case, and not an inch more.’ . . . ‘The city manifestly has not altered its view that any possession of a handgun outside the home, even when the handgun is unloaded and stored away, is a privilege that the city can micromanage, rather than an individual right.’”
The justices have put the mootness dispute on the agenda for discussion at their first closed-door conference of the new term, on Oct. 1.
Linda Greenhouse’s editorial bottom line is this: if the court rules the way the plaintiffs’ lawyers are urging in the New York case and “adopts ‘strict scrutiny’ as the only valid judicial approach to assessing the constitutionality of any limitation, then the political branches will effectively lose the ability to enact what the emerging political consensus deems to be common-sense regulations.”
With regard to the underlying 2008 decision in District of Columbia v. Heller, attorney Anthony Picadio explained in his article discussing the case that while a 5 to 4 majority of the Supreme Court, in the opinion written by Justice Scalia, declared DC’s firearm regulatory scheme unconstitutional, it did so only to the extent that it prohibited possession of an operable handgun in a home for self-defense purposes.
Anthony Picadio’s article criticizes the Heller decision. He points out that the history of the Second Amendment in the lower courts since the Heller decision does in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.”
Mr. Picadio suggests that perhaps one of the reasons that expansive treatment of the Second Amendment has been so disfavored by the lower courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a militia.
Moreover, Justice Scalia’s opinion “is based on an erroneous reading of colonial history and the drafting history of the Second Amendment,’’ Mr. Picadio wrote. “If the Second Amendment had been understood to have the meaning given to it by Justice Scalia, it would not have been ratified by Virginia and the other slave states.”
The amendment began with the phrase “a well regulated Militia’’ because the Virginian founders wanted to be sure guns didn’t get into the hands of enslaved black Virginians or free black Virginians, Mr. Picadio argues. With the state’s all-white militia, this amendment helped do just that.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the Picadio article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
Mr. Picadio will speak at a luncheon program at the DC Bar on October 15.
Linda Greenhouse’s August 15, 2019 article on the Second Amendment is at https://www.nytimes.com/2019/08/15/opinion/guns-supreme-court.html
The editor, Don Allen Resnikoff, takes full responsibility for the content of this article and any opinions that may be implied.
N.J. Division of Consumer Affairs Brings First Action to Enforce State’s Fantasy Sports Law
Minneapolis-Based “SportsHub” to Pay $30,000 for Unlawfully Operating a Fantasy Sports Site in New Jersey
Consent Order is here: https://www.nj.gov/oag/newsreleases19/SportsHub-Games-Network-Inc_Consent-Order.pdf
NEWARK – Attorney General Gurbir S. Grewal and the Division of Consumer Affairs (“the Division”) today announced that SportsHub Games Network, Inc. (“SportsHub”) has agreed to pay a $30,000 civil penalty for unlawfully operating an online fantasy sports site in New Jersey without a permit. The Minneapolis-based games provider also agreed to change its business practices to resolve allegations that its conduct violated the state’s consumer protection laws by, among other things, failing to clearly and conspicuously disclose that SportsHub collects personal information from consumers’ social media accounts and that it shares certain personal information with third parties.
SportsHub, which operates “Fanball,” “CDM Sports,” “National Fantasy Football Championships,” “Whatif Sports,” “Leaguesafe,” and other fantasy sports games, is the first operator to be penalized under New Jersey’s Fantasy Sports Act (“FSA”), a 2017 statute legalizing and regulating internet fantasy gaming activities in the state.
“New Jersey’s fantasy sports law offers fans an opportunity to fully immerse themselves in the sports they love, while ensuring a safe and enjoyable experience for all who participate,” said Attorney General Grewal. “As the settlement announced today illustrates, New Jersey enforces the laws in place to ensure transparency and protect consumers from hidden threats to their online privacy.”
https://www.nj.gov/oag/newsreleases19/pr20190827a.html
Minneapolis-Based “SportsHub” to Pay $30,000 for Unlawfully Operating a Fantasy Sports Site in New Jersey
Consent Order is here: https://www.nj.gov/oag/newsreleases19/SportsHub-Games-Network-Inc_Consent-Order.pdf
NEWARK – Attorney General Gurbir S. Grewal and the Division of Consumer Affairs (“the Division”) today announced that SportsHub Games Network, Inc. (“SportsHub”) has agreed to pay a $30,000 civil penalty for unlawfully operating an online fantasy sports site in New Jersey without a permit. The Minneapolis-based games provider also agreed to change its business practices to resolve allegations that its conduct violated the state’s consumer protection laws by, among other things, failing to clearly and conspicuously disclose that SportsHub collects personal information from consumers’ social media accounts and that it shares certain personal information with third parties.
SportsHub, which operates “Fanball,” “CDM Sports,” “National Fantasy Football Championships,” “Whatif Sports,” “Leaguesafe,” and other fantasy sports games, is the first operator to be penalized under New Jersey’s Fantasy Sports Act (“FSA”), a 2017 statute legalizing and regulating internet fantasy gaming activities in the state.
“New Jersey’s fantasy sports law offers fans an opportunity to fully immerse themselves in the sports they love, while ensuring a safe and enjoyable experience for all who participate,” said Attorney General Grewal. “As the settlement announced today illustrates, New Jersey enforces the laws in place to ensure transparency and protect consumers from hidden threats to their online privacy.”
https://www.nj.gov/oag/newsreleases19/pr20190827a.html
NYT: Sacklers vs. States: Settlement Talks Stumble Over Foreign Business
The Sackler family is willing to give up Purdue Pharma to settle all claims related to the opioid crisis, but is resisting a quick sale of its overseas drug company.
By Matthew Goldstein, Danny Hakim and Jan Hoffman
Purdue Pharma’s negotiations to settle thousands of lawsuits over the company’s role in the opioids crisis have turned into a standoff between members of the Sackler family, who own the company, and a group of state attorneys general over how much the family should pay and whether it can continue selling drugs abroad.
The Sacklers are deep in negotiations that, if finalized, would force them to give up ownership of Purdue, the company widely blamed for the onset of the opioid epidemic with its aggressive marketing of the prescription painkiller OxyContin. But they want to keep selling OxyContin and other drugs abroad for as many as seven more years, through another company they own, Mundipharma, based in Cambridge, England.
Some attorneys general, particularly in wealthier states like New York, Massachusetts and Connecticut, are resisting that and other issues related to the foreign business.
“Connecticut demands that the Sacklers and Purdue management be forced completely out of the opioid business, domestically and internationally, and that they never be allowed to return,” said Attorney General William Tong of Connecticut.
https://www.nytimes.com/2019/08/30/health/purdue-sacklers-opioids-settlement.html
The Sackler family is willing to give up Purdue Pharma to settle all claims related to the opioid crisis, but is resisting a quick sale of its overseas drug company.
By Matthew Goldstein, Danny Hakim and Jan Hoffman
Purdue Pharma’s negotiations to settle thousands of lawsuits over the company’s role in the opioids crisis have turned into a standoff between members of the Sackler family, who own the company, and a group of state attorneys general over how much the family should pay and whether it can continue selling drugs abroad.
The Sacklers are deep in negotiations that, if finalized, would force them to give up ownership of Purdue, the company widely blamed for the onset of the opioid epidemic with its aggressive marketing of the prescription painkiller OxyContin. But they want to keep selling OxyContin and other drugs abroad for as many as seven more years, through another company they own, Mundipharma, based in Cambridge, England.
Some attorneys general, particularly in wealthier states like New York, Massachusetts and Connecticut, are resisting that and other issues related to the foreign business.
“Connecticut demands that the Sacklers and Purdue management be forced completely out of the opioid business, domestically and internationally, and that they never be allowed to return,” said Attorney General William Tong of Connecticut.
https://www.nytimes.com/2019/08/30/health/purdue-sacklers-opioids-settlement.html
NYT:Streaming Video Will Soon Look Like the Bad Old Days of TV
As media monoliths bundle their offerings, consumers will once again have to pay for a bunch of shows they don’t want.
By Matthew Ball
https://www.nytimes.com/2019/08/22/opinion/netflix-hulu-cable.html
As media monoliths bundle their offerings, consumers will once again have to pay for a bunch of shows they don’t want.
By Matthew Ball
https://www.nytimes.com/2019/08/22/opinion/netflix-hulu-cable.html
California Authorities Investigating Amazon for Shadow Liquor Store as Prime Now Expands Alcohol Delivery
Last week, a wine industry publication and search engine, Wine-Searcher, claimed that Amazon violated California law to expand its alcohol delivery business.
In order to deliver alcohol in California, retailers need to have a brick-and-mortar store that’s open to the public for at least half as long as their delivery hours. But when Wine-Searcher visited one of Amazon’s alleged liquor stores in Los Angeles they found a warehouse, but no store.
Now the California Department of Alcoholic Beverage Control is investigatingwhether or not Amazon’s LA location meets state qualifications for a liquor store. Amazon has licenses for at least seven other warehouse “liquor stores"in California as it expands alcohol delivery through Prime Now.
Regardless of whether Amazon broke the law, it is apparent that they intend to focus on delivering alcohol, not running liquor stores in business parks. This gives Amazon a competitive advantage over other California alcohol retailers who must pay for staff, stocking, and real estate. The move threatens store owners as well as craft producers, and raises public health concerns about sales to minors.
Amazon offers two-hour delivery of beer, wine, and sometimes spirits in twelve cities through its Prime Now service. Depending on local law, Amazon customers may order booze from Whole Foods, a third-party alcohol retailer, or Amazon’s Prime Now warehouses. All three options are available in Los Angeles.
See http://www.foodandpower.net/2019/08/29/california-beverage-control-investigating-amazon-for-shadow-liquor-store-as-prime-now-expands-alcohol-delivery/
Last week, a wine industry publication and search engine, Wine-Searcher, claimed that Amazon violated California law to expand its alcohol delivery business.
In order to deliver alcohol in California, retailers need to have a brick-and-mortar store that’s open to the public for at least half as long as their delivery hours. But when Wine-Searcher visited one of Amazon’s alleged liquor stores in Los Angeles they found a warehouse, but no store.
Now the California Department of Alcoholic Beverage Control is investigatingwhether or not Amazon’s LA location meets state qualifications for a liquor store. Amazon has licenses for at least seven other warehouse “liquor stores"in California as it expands alcohol delivery through Prime Now.
Regardless of whether Amazon broke the law, it is apparent that they intend to focus on delivering alcohol, not running liquor stores in business parks. This gives Amazon a competitive advantage over other California alcohol retailers who must pay for staff, stocking, and real estate. The move threatens store owners as well as craft producers, and raises public health concerns about sales to minors.
Amazon offers two-hour delivery of beer, wine, and sometimes spirits in twelve cities through its Prime Now service. Depending on local law, Amazon customers may order booze from Whole Foods, a third-party alcohol retailer, or Amazon’s Prime Now warehouses. All three options are available in Los Angeles.
See http://www.foodandpower.net/2019/08/29/california-beverage-control-investigating-amazon-for-shadow-liquor-store-as-prime-now-expands-alcohol-delivery/
Pa. AG Can Bring Parallel Navient Claims, CFPB Tells 3rd Circ.
The Consumer Financial Protection Bureau has told the Third Circuit in an amicus brief that its governing statute allows for parallel enforcement by the agency and state attorneys general.
From DMN: U.S. Department of Justice Urged by Senators to Investigate Live Nation, Ticketmaster
Two Democratic U.S. Senators are asking the Department of Justice’s (DOJ) antitrust division to investigate online ticket markets, which they insist “are not working for American consumers.”
The story continues here.https://www.digitalmusicnews.com/2019/08/28/senate-department-of-justice-live-nation-ticketmaster/
Two Democratic U.S. Senators are asking the Department of Justice’s (DOJ) antitrust division to investigate online ticket markets, which they insist “are not working for American consumers.”
The story continues here.https://www.digitalmusicnews.com/2019/08/28/senate-department-of-justice-live-nation-ticketmaster/
Do mortgage lenders ever engage in bait-and-switch? Here is a story from the past --2014-- that suggests that the answer for some lenders is "yes."
-Amerisave to pay $19 million for alleged bait-and-switch mortgage scheme
By James R. Hood
08/12/2014 | ConsumerAffairs | Finance News
Amerisave.comAmerisave Mortgage Corp. will pay $14.8 million in refunds to consumers taken in by what the Consumer Financial Protection Bureau (CFPB) says was a deceptive bait-and-switch mortgage-lending scheme that harmed tens of thousands of consumers. It will also pay a $4.5 million penalty.
The Bureau will administer the refunds and the amount each eligible consumer will receive will vary based on how much that consumer paid Amerisave. A third-party settlement administrator will be contacting eligible consumers once a restitution process is established.
“Amerisave lured consumers in with deceptive advertising, trapped them with costly upfront fees, and then illegally overcharged them for services from an undisclosed affiliate,” said CFPB Director Richard Cordray. “By the time consumers could have discovered the advertised low rates were too good to be true, they had already committed to pay hundreds of dollars to Amerisave."
Patrick Markert, identified as the owner of both Amerisave and its affiliated Novo Appraisal Management Co., will pay a $1.5 million penalty.
The Bureau found that Amerisave lured consumers by advertising misleading interest rates, locked them in with costly up-front fees, failed to honor its advertised rates, and then illegally overcharged them for affiliated “third-party” services.
Amerisave, which operates in all 50 states, advertised its interest rates and terms heavily over the last several years, using banner ads and searchable rate tables in its Internet ads. But the Bureau charged that Amerisave posted inaccurate rates on these banner ads and rate tables.
When consumers were directed to Amerisave’s own website, Amerisave gave consumers quotes based on an 800 FICO score, even where consumers had previously entered a FICO score below 800 on the third-party website that led them to Amerisave. This resulted in Amerisave offering many consumers misleadingly low quotes.
Amerisave required consumers to order and give payment authorization information for an appraisal before it would provide a Good Faith Estimate (GFE) for the mortgage, and did not tell consumers until later that the appraisal orders were being referred to its own affiliated company, Novo.
At closing, Amerisave also charged consumers for “appraisal validation” reports, without disclosing that the service was provided by its affiliate Novo, which had marked up the fees by as much as 900%.
Penalties outlinedThe CFPB order requires Amerisave, Novo, and Markert to take the following actions:
· Pay $14.8 million in consumer refunds: Amerisave and Novo must provide $14.8 million in refunds to the consumers harmed by the false advertising, impermissible fees, and illegal referrals during the period covered by the order.
· Stop advertising unavailable mortgage rates: The order requires Amerisave to ensure that it will not engage in deceptive mortgage advertising practices. Those practices include, but are not limited to, advertising unavailable rates on third-party searchable rate tables, advertising deceptive rates in its banner ads, and giving consumers mortgage quotes based on an undisclosed 800 credit score.
· No longer charge illegal fees: Amerisave will not charge fees or make referrals to its affiliates before giving consumers the proper disclosure forms.
· Pay $6 million in fines: Amerisave will make a $4.5 million penalty payment, and Patrick Markert will make an additional $1.5 million penalty payment, to the Bureau’s Civil Penalty Fund.
https://www.consumeraffairs.com/news/amerisave-to-pay-19-million-for-bait-and-switch-mortgage-scheme-081214.html
Editor's note: The story was prompted by information about current bad bait and switch experiences by potential mortgage borrowers.
-Amerisave to pay $19 million for alleged bait-and-switch mortgage scheme
By James R. Hood
08/12/2014 | ConsumerAffairs | Finance News
Amerisave.comAmerisave Mortgage Corp. will pay $14.8 million in refunds to consumers taken in by what the Consumer Financial Protection Bureau (CFPB) says was a deceptive bait-and-switch mortgage-lending scheme that harmed tens of thousands of consumers. It will also pay a $4.5 million penalty.
The Bureau will administer the refunds and the amount each eligible consumer will receive will vary based on how much that consumer paid Amerisave. A third-party settlement administrator will be contacting eligible consumers once a restitution process is established.
“Amerisave lured consumers in with deceptive advertising, trapped them with costly upfront fees, and then illegally overcharged them for services from an undisclosed affiliate,” said CFPB Director Richard Cordray. “By the time consumers could have discovered the advertised low rates were too good to be true, they had already committed to pay hundreds of dollars to Amerisave."
Patrick Markert, identified as the owner of both Amerisave and its affiliated Novo Appraisal Management Co., will pay a $1.5 million penalty.
The Bureau found that Amerisave lured consumers by advertising misleading interest rates, locked them in with costly up-front fees, failed to honor its advertised rates, and then illegally overcharged them for affiliated “third-party” services.
Amerisave, which operates in all 50 states, advertised its interest rates and terms heavily over the last several years, using banner ads and searchable rate tables in its Internet ads. But the Bureau charged that Amerisave posted inaccurate rates on these banner ads and rate tables.
When consumers were directed to Amerisave’s own website, Amerisave gave consumers quotes based on an 800 FICO score, even where consumers had previously entered a FICO score below 800 on the third-party website that led them to Amerisave. This resulted in Amerisave offering many consumers misleadingly low quotes.
Amerisave required consumers to order and give payment authorization information for an appraisal before it would provide a Good Faith Estimate (GFE) for the mortgage, and did not tell consumers until later that the appraisal orders were being referred to its own affiliated company, Novo.
At closing, Amerisave also charged consumers for “appraisal validation” reports, without disclosing that the service was provided by its affiliate Novo, which had marked up the fees by as much as 900%.
Penalties outlinedThe CFPB order requires Amerisave, Novo, and Markert to take the following actions:
· Pay $14.8 million in consumer refunds: Amerisave and Novo must provide $14.8 million in refunds to the consumers harmed by the false advertising, impermissible fees, and illegal referrals during the period covered by the order.
· Stop advertising unavailable mortgage rates: The order requires Amerisave to ensure that it will not engage in deceptive mortgage advertising practices. Those practices include, but are not limited to, advertising unavailable rates on third-party searchable rate tables, advertising deceptive rates in its banner ads, and giving consumers mortgage quotes based on an undisclosed 800 credit score.
· No longer charge illegal fees: Amerisave will not charge fees or make referrals to its affiliates before giving consumers the proper disclosure forms.
· Pay $6 million in fines: Amerisave will make a $4.5 million penalty payment, and Patrick Markert will make an additional $1.5 million penalty payment, to the Bureau’s Civil Penalty Fund.
https://www.consumeraffairs.com/news/amerisave-to-pay-19-million-for-bait-and-switch-mortgage-scheme-081214.html
Editor's note: The story was prompted by information about current bad bait and switch experiences by potential mortgage borrowers.
Amazon responds to investigation revealing thousands of banned and unsafe items on its marketplace
BY NAT LEVY on August 23, 2019 at 10:17 am
Amazon’s marketplace for third-party sellers has become a huge part of its business, making up nearly 60 percent of gross merchandise sales last year. However, a new investigation by The Wall Street Journal shows that thousands of unsafe products have made their way onto the marketplace, the latest example of a tech giant struggling to police the platform it created.
WSJ found 4,152 items for sale on Amazon that had been banned or declared unsafe by federal regulators or were deceptively labeled. That included more than 2,000 listings for toys and medication that did not have warnings about health risks for children. Nearly half of those items were listed as shipping from Amazon warehouses.
After WSJ brought its findings to Amazon, 57 percent of the listings in question had their wording altered or were removed. Amazon told WSJ it reviewed and addressed the listings, and that company policies require all products to comply with laws and regulations.
Underscoring the challenges Amazon faces in policing the platform, more than 100 items that Amazon had previously removed popped up in new listings, WSJ found. Amazon then removed the items again and told WSJ it was refining its tools to make sure they wouldn’t re-appear.
The report was impactful enough that Amazon published a blog post in response, detailing the steps it takes to make sure products on its third-party marketplace are safe. The company spent more than $400 million in 2018 to protect its stores and customers and “ensure products offered are safe, compliant, and authentic.”
Amazon has a “dedicated global team of compliance specialists” that reviews product safety information. Amazon in 2018 “blocked more than three billion suspect listings for various forms of abuse, including non-compliance, before they were published to our store.”
Amazon uses automated tools to scan the items on its website for changes. And the company has systems in place to quickly look into any potential concerns.
“For example, if a customer reports a concern with a product, a customer service associate can instantly trigger an investigation,” according to the blog post. “Additionally, because of our direct relationships with customers, we are able to trace and directly notify customers who purchased a particular product online and alert them to a potential safety issue — our systems are far more effective than other online and offline retailers and customers can feel confident they’ll have the information they need.”
WSJ’s investigation comes after Amazon lauded 150 new tools it has built so far this year to help sellers grow their businesses on the third-party marketplace. Amazon said it is investing $15 billion this year to “empower” sellers on its platform.
Like many of its fellow tech giants, Amazon has drawn increased scrutiny from regulators recently, and the third-party marketplace is at the center of those inquiries. However, regulators are looking not at safety issues but potential anti-trust concerns on the marketplace.
Amazon’s issues are the latest indication of the industry-wide struggle among tech giants to control their massive platforms. Facebook and Twitter are at the center of yet another political disinformation campaign. Google’s YouTube is working to reverse a trend of hate speech and extremism populating its platform. And Microsoft’s LinkedIn is in a constant battle to catch and eliminate fake accounts.
From:https://www.geekwire.com/2019/amazon-responds-investigation-revealing-thousands-banned-unsafe-items-marketplace/
New York regulators have reached a settlement worth up to $2.7 million with a hedge fund that provided financing and assistance to a large rent-to-own home firm accused of engaging in predatory business practices.
The settlement announced Tuesday requires the hedge fund, Atalaya Capital Management, to provide at least $20,000 in restitution to the more than 100 state residents who thought they were entering into deals to ultimately buy homes from Vision Property Management.
Atalaya, a $5 billion hedge fund based in New York, also agreed to pay a $250,000 civil penalty under the settlement, reached with the state attorney general and the Department of Financial Services. The deal came less than a month after the agencies filed a lawsuit against Vision, [https://www.nytimes.com/2019/08/01/business/rent-to-own-vision-lawsuit.html?module=inline] saying the company had operated an “illegal, unlicensed mortgage lending” business by using deceptive rent-to-own agreements to sell often-rundown homes.
The consent decree is here:
https://www.dfs.ny.gov/system/files/documents/2019/08/ea190827_atalaya.pdf
Here is an excerpt from the decree:
5. As d_iscussed below, Atalaya provided financing to subsidiaries of Vision, a South Carolina company that buys distressed residential real properties at a discount and sells many of them at a substantial markup to lower income, working class consumers. The NY AG and the Department filed an action against Vision and its chief executive_ officer on August 1, 2019 in the Southern District ofNew York. The People of the State of New York, et al. v. Vision Property Management, LLC, et al., 19-cv-7191-JSR (Aug. 1, 2019). Vision's Seller Financing Business Model
6. The properties purchased and resold by Vision generally have been vacant for a long time and often require significant repairs to make them habitable and compliant with local building codes. The purchase price that Vision pays to acquire these properties, which are purchased in bulk from government entities or from private parties that have been unable to sell them via traditional channels, reflects that condition. Vision is not generally in the business of repairing or rehabilitating these properties. Rather, it typically passed the cost to repair the properties· to the consumer.
7. Vision targets consumers who want to own a home but, due to bad credit or other issues, could not qualify for a "traditional loan." Vision claims that it offers a "unique" program that can be their path to the "American dream of homeownership." Vision characterizes itself as a consumer-friendly alternative to larger irresponsible financial institutions.
8. Vision's "unique" business model is structured as seller financing. Seller financing simply means that the property seller, rather than a bank, provides the funding to finance a property purchase. Instead of advancing money to the purchaser as a typical mortgage lender would, the seller extends credit by deferring payment of the full purchase price in exchange for the purchaser making installment payments over a specified period of time and at a set interest rate until the loan is repaid. 3
9. Vision originally used a Contract for Deed ("CFD") agreement to carry out its seller financing transactions. A typical CFD agreement included a purchase agreement and a promissory note that obligated the consumer to pay principal and interest, at a rate between 7% and 10%, typically over a twenty or thirty-year period. The right to occupy, and the obligation to maintain and repair the property, transferred to the consumer upon the execution of the CFD agreement, but Vision retained record ownership until the consumer paid off the balance of the purchase price. Thus, instead of transferring title and filing a mortgage against the property, Vision retained title ownership as security on the purchaser's obligation to repay the loan.
10. While Vision's CFD agreements facialiy charged an interest rate between 7% and 10%, the agreements included financing charges that could raise the rate as high as 25% in certain circumstances where interest payments were capitalized.
The settlement announced Tuesday requires the hedge fund, Atalaya Capital Management, to provide at least $20,000 in restitution to the more than 100 state residents who thought they were entering into deals to ultimately buy homes from Vision Property Management.
Atalaya, a $5 billion hedge fund based in New York, also agreed to pay a $250,000 civil penalty under the settlement, reached with the state attorney general and the Department of Financial Services. The deal came less than a month after the agencies filed a lawsuit against Vision, [https://www.nytimes.com/2019/08/01/business/rent-to-own-vision-lawsuit.html?module=inline] saying the company had operated an “illegal, unlicensed mortgage lending” business by using deceptive rent-to-own agreements to sell often-rundown homes.
The consent decree is here:
https://www.dfs.ny.gov/system/files/documents/2019/08/ea190827_atalaya.pdf
Here is an excerpt from the decree:
5. As d_iscussed below, Atalaya provided financing to subsidiaries of Vision, a South Carolina company that buys distressed residential real properties at a discount and sells many of them at a substantial markup to lower income, working class consumers. The NY AG and the Department filed an action against Vision and its chief executive_ officer on August 1, 2019 in the Southern District ofNew York. The People of the State of New York, et al. v. Vision Property Management, LLC, et al., 19-cv-7191-JSR (Aug. 1, 2019). Vision's Seller Financing Business Model
6. The properties purchased and resold by Vision generally have been vacant for a long time and often require significant repairs to make them habitable and compliant with local building codes. The purchase price that Vision pays to acquire these properties, which are purchased in bulk from government entities or from private parties that have been unable to sell them via traditional channels, reflects that condition. Vision is not generally in the business of repairing or rehabilitating these properties. Rather, it typically passed the cost to repair the properties· to the consumer.
7. Vision targets consumers who want to own a home but, due to bad credit or other issues, could not qualify for a "traditional loan." Vision claims that it offers a "unique" program that can be their path to the "American dream of homeownership." Vision characterizes itself as a consumer-friendly alternative to larger irresponsible financial institutions.
8. Vision's "unique" business model is structured as seller financing. Seller financing simply means that the property seller, rather than a bank, provides the funding to finance a property purchase. Instead of advancing money to the purchaser as a typical mortgage lender would, the seller extends credit by deferring payment of the full purchase price in exchange for the purchaser making installment payments over a specified period of time and at a set interest rate until the loan is repaid. 3
9. Vision originally used a Contract for Deed ("CFD") agreement to carry out its seller financing transactions. A typical CFD agreement included a purchase agreement and a promissory note that obligated the consumer to pay principal and interest, at a rate between 7% and 10%, typically over a twenty or thirty-year period. The right to occupy, and the obligation to maintain and repair the property, transferred to the consumer upon the execution of the CFD agreement, but Vision retained record ownership until the consumer paid off the balance of the purchase price. Thus, instead of transferring title and filing a mortgage against the property, Vision retained title ownership as security on the purchaser's obligation to repay the loan.
10. While Vision's CFD agreements facialiy charged an interest rate between 7% and 10%, the agreements included financing charges that could raise the rate as high as 25% in certain circumstances where interest payments were capitalized.
Not everyone loves the public nuisance theory adopted by the Court in the Oklahoma AG's opioid case against Johnson and Johnson
Following is an excerpt from a dissenting view published at https://legalnewsline.com/stories/512627243-it-keeps-changing-oklahoma-s-opioid-strategy-is-a-700-year-old-english-law-that-used-to-regulate-wandering-sheep:
A prominent scholarly examination of the evolution of nuisance law suggests Ausness and the North Dakota judge are right – or were, depending on how nuisance law might change in the wake of the opioid litigation. In “Is Public Nuisance a Tort?” Professor Thomas W. Merrill of Columbia Law School wrote that efforts by environmentalists to retool nuisance law as a weapon against pollution and other social problems in the early 1970s had largely failed -- until state attorneys general rediscovered nuisance in the late 1990s with the help of private lawyers. [See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1829493]
Most of the tobacco lawsuits in the 1990s claimed the marketing of cigarettes was a public nuisance, for example, although the only court to decide the matter rejected that theory in a 1997 decision. A federal judge in New York rejected similar claims that the gasoline additive MTBE was a public nuisance, but in both cases lawyers negotiated lucrative settlements that showered them with fees.
Gun lawsuits may have been headed the same way until Congress passed a statute eliminating most liability for gun manufacturers over crimes committed with their products. Federal courts in New York and California also rejected lawsuits accusing gasoline manufacturers of causing the “public nuisance” of global warming.
The biggest success for public nuisance advocates so far was in California, where a state appeals court in California upheld a judgment requiring several manufacturers to “abate” lead paint in thousands of aging buildings because they advertised the product before World War II. The California and U.S. supreme courts refused to hear further appeals of that decision.
The main reason these cases have gained any traction may be a subtle change in the definition of “public nuisance” in the Restatement (Second) of Torts in 1972. Restatements are guidebooks to the common law for judges and attorneys published by the American Law Institute. After several fierce debates, ALI members supported broadening public nuisance law to address environmental damage, Merrill wrote, even though there was no case law to support the change.
- - - -
Also, See the WSJ comment at https://www.wsj.com/articles/an-oklahoma-opioid-stickup-11566861973
The WSJ points out that the public nuisance theories have been pressed by outside counsel engaged by states and paid on a contingent fee basis.
Editor's Note: The views of the Wall Street Journal editorial writers, Legal News Line and Professor Merrill are presented in the interests of presenting an array of views for discussion, and are not intended to represent views of DCCRC or the editor. DAR
D.C. AG sues Marriott for hidden "drip" pricing
From The D.C. Complaint:
COMPLAINT FOR VIOLATIONS OF THE CONSUMER PROTECTION PROCEDURES ACT
The District of Columbia (“District”), by the Office of the Attorney General, brings this action pursuant to D.C. Code § 28-3909 for injunctive relief, consumer restitution, costs, and civil penalties against Defendant Marriott International, Inc. (“Marriott”) for violations of the District’s Consumer Protection Procedures Act (“CPPA”), D.C. Code § 28-3901, et seq. In support of its claims, the District states as follows:
INTRODUCTION
1. This is a straight-forward price deception case. For at least the last decade, Marriott has used an unlawful trade practice called “drip pricing” in advertising its hotel rooms whereby Marriott initially hides a portion of a hotel room’s daily rate from consumers. Marriott calls this hidden portion of the room rate a number of terms, including a “resort fee,” “amenity fee” and a “destination fee.”
The full Complaint: https://oag.dc.gov/sites/default/files/2019-07/Marriott-Complaint.pdf
From The D.C. Complaint:
COMPLAINT FOR VIOLATIONS OF THE CONSUMER PROTECTION PROCEDURES ACT
The District of Columbia (“District”), by the Office of the Attorney General, brings this action pursuant to D.C. Code § 28-3909 for injunctive relief, consumer restitution, costs, and civil penalties against Defendant Marriott International, Inc. (“Marriott”) for violations of the District’s Consumer Protection Procedures Act (“CPPA”), D.C. Code § 28-3901, et seq. In support of its claims, the District states as follows:
INTRODUCTION
1. This is a straight-forward price deception case. For at least the last decade, Marriott has used an unlawful trade practice called “drip pricing” in advertising its hotel rooms whereby Marriott initially hides a portion of a hotel room’s daily rate from consumers. Marriott calls this hidden portion of the room rate a number of terms, including a “resort fee,” “amenity fee” and a “destination fee.”
The full Complaint: https://oag.dc.gov/sites/default/files/2019-07/Marriott-Complaint.pdf
Large telecom companies and attorneys general from every state forming a new pact for combating robocalls
Under the agreement, the companies are promising to work to prevent illegal robocalls on their networks and to work with state law enforcement investigating the calls’ origins, according to the office of North Carolina Attorney General Josh Stein.
The participating companies include AT&T Inc., Verizon Communications Inc., T-Mobile US Inc., Sprint Corp., CenturyLink Inc.and seven other large carriers, Mr. Stein’s office said.
Among the companies’ promises: to provide customers with free call-blocking technology, investigate and trace illegal calls and confirm the identity of their commercial customers as part of cooperation with law enforcement.
https://www.bloomberg.com/news/articles/2019-08-22/all-50-states-are-preparing-to-tackle-robocalls-in-telecom-deal?srnd=premium
Under the agreement, the companies are promising to work to prevent illegal robocalls on their networks and to work with state law enforcement investigating the calls’ origins, according to the office of North Carolina Attorney General Josh Stein.
The participating companies include AT&T Inc., Verizon Communications Inc., T-Mobile US Inc., Sprint Corp., CenturyLink Inc.and seven other large carriers, Mr. Stein’s office said.
Among the companies’ promises: to provide customers with free call-blocking technology, investigate and trace illegal calls and confirm the identity of their commercial customers as part of cooperation with law enforcement.
https://www.bloomberg.com/news/articles/2019-08-22/all-50-states-are-preparing-to-tackle-robocalls-in-telecom-deal?srnd=premium
Cnet: State attorneys general will reportedly kick off antitrust investigation into tech giants
A group of states will add its voices to the DOJ and FTC reviews into big tech companies, a report says.
BY
AUGUST 19, 2019 4:05 PM PDT
Another antitrust investigation will be kicked off against US tech giants, according to a report, this time coming from a group of state attorneys general. Citing sources, The Wall Street Journal reported Monday the probe could be launched in September and could look into whether companies like Google, Facebook and Amazon use their power to stifle competition in the market.
It follows the Department of Justice last month announcing its own antitrust review of how online platforms achieved market power and whether they are using that power to reduce competition and stifle innovation. And that investigation followed the Federal Trade Commission in February forming a task force to monitor competition among tech platforms.
"A dozen" state attorneys general met with officials from the Department of Justice in July to discuss the investigation, the report said.
From:
https://www.cnet.com/news/state-attorneys-general-will-reportedly-kick-off-antitrust-investigation-into-tech-giants/
A group of states will add its voices to the DOJ and FTC reviews into big tech companies, a report says.
BY
AUGUST 19, 2019 4:05 PM PDT
Another antitrust investigation will be kicked off against US tech giants, according to a report, this time coming from a group of state attorneys general. Citing sources, The Wall Street Journal reported Monday the probe could be launched in September and could look into whether companies like Google, Facebook and Amazon use their power to stifle competition in the market.
It follows the Department of Justice last month announcing its own antitrust review of how online platforms achieved market power and whether they are using that power to reduce competition and stifle innovation. And that investigation followed the Federal Trade Commission in February forming a task force to monitor competition among tech platforms.
"A dozen" state attorneys general met with officials from the Department of Justice in July to discuss the investigation, the report said.
From:
https://www.cnet.com/news/state-attorneys-general-will-reportedly-kick-off-antitrust-investigation-into-tech-giants/
From BizJournal: New restrictions on short-term rentals in the District through home-sharing services like Airbnb could finally go into effect in the coming months, as officials gear up to start enforcing a law passed by the D.C. Council last year.
The Zoning Commission has scheduled a hearing for Oct. 17 on proposed amendments to the city’s zoning rules to allow for home-sharing across many residential areas, according to online records. Lawmakers have been anxiously awaiting action from the commission on the matter, despite passing new short-term rental rules last November that prompted a clash with Mayor Muriel Bowser.
Most home-sharing is technically illegal in the city at the moment, though District inspectors have largely declined to police it too closely. The new law would officially legalize the practice, though it would be subject to a series of restrictions favored largely by hotel executives and workers designed to curb short-term rentals. For instance, property owners will be barred from renting out second homes, or renting spare rooms in their primary residence for more than 90 days a year.
Bowser fiercely opposed the council’s changes and warned that the law may be unconstitutional, arguing that home-sharing has thrived without the council’s interference. Nevertheless, the legislation passed unanimously.
The new rules are set to officially take effect on Oct. 1, but Council Chairman Phil Mendelson has repeatedly warned that the Zoning Commission will need to take action before the law can actually work, in practice. Namely, officials need to conform the District’s zoning code to make short-term rentals a permitted “accessory use” for many properties in the city.
The commission is set to consider a series of changes this fall, adding a definition of short-term rentals to the regulations and stipulating that they’ll be acceptable uses in a variety of areas zoned residential or mixed-use buildings.
Crucially, the proposed zoning changes come courtesy of Mendelson’s office, not anyone in Bowser’s administration.
The chairman has pressed for months for the Office of Planning to submit a report to the commission, outlining potential text amendments to the code instead. But staff there still have not done so, spokespeople for both Mendelson and the planning office confirmed.
Mendelson accused Bowser this spring of deliberately slow-walking that report in an attempt to stall the implementation of the Airbnb-focused rules, though District planners insisted they simply needed more time. The chairman didn’t find that argument convincing, and worked through the budget to compel the planning office to release the report.
At first he threatened to withhold any permits for new government buildings — when that attracted some push back, he settled instead for adding a provisionto the budget barring the city from issuing permits for any construction at the RFK stadium site or at Franklin Park, a downtown space that’s planned for a full renovation.
But instead of waiting on a report from OP, Mendelson decided to submit his own proposed changes, and invited planners to comment on them. Planning office spokeswoman Mekdy Alemayehu says staff there is working on something now, but they haven’t settled yet on whether they’ll submit a report before the Oct. 17 hearing.
Airbnb previously estimated that roughly 6,500 people in the District made use of the service in 2017, generating a total of $82 million in income.
https://www.bizjournals.com/washington/news/2019/08/21/new-d-c-airbnb-restrictions-could-soon-take-effect.html?ana=e_ae_set3&j=89840341&t=Afternoon&mkt_tok=eyJpIjoiWVRBM05qWm1aV1poTXprNCIsInQiOiJUcHlPUFFVTDlqcDVlQThRYnhWSlUwUUcwbEdwU0xJZ0gyYUJMTEh0ajJ0UGptdHpSSUZzMlNjNk9KZVl0dHJyQVNkeXlOU293WjZ6Q2cxemFIV2lQQWhvQ2tNc1cwSTZocU96RGlkZWlGaVJJVUNsT0tua3dcLzhEbzlZc1JaSkpKbzAwYllsUkJRNjBLK05DWDZON0VRPT0ifQ%3D%3D
The Zoning Commission has scheduled a hearing for Oct. 17 on proposed amendments to the city’s zoning rules to allow for home-sharing across many residential areas, according to online records. Lawmakers have been anxiously awaiting action from the commission on the matter, despite passing new short-term rental rules last November that prompted a clash with Mayor Muriel Bowser.
Most home-sharing is technically illegal in the city at the moment, though District inspectors have largely declined to police it too closely. The new law would officially legalize the practice, though it would be subject to a series of restrictions favored largely by hotel executives and workers designed to curb short-term rentals. For instance, property owners will be barred from renting out second homes, or renting spare rooms in their primary residence for more than 90 days a year.
Bowser fiercely opposed the council’s changes and warned that the law may be unconstitutional, arguing that home-sharing has thrived without the council’s interference. Nevertheless, the legislation passed unanimously.
The new rules are set to officially take effect on Oct. 1, but Council Chairman Phil Mendelson has repeatedly warned that the Zoning Commission will need to take action before the law can actually work, in practice. Namely, officials need to conform the District’s zoning code to make short-term rentals a permitted “accessory use” for many properties in the city.
The commission is set to consider a series of changes this fall, adding a definition of short-term rentals to the regulations and stipulating that they’ll be acceptable uses in a variety of areas zoned residential or mixed-use buildings.
Crucially, the proposed zoning changes come courtesy of Mendelson’s office, not anyone in Bowser’s administration.
The chairman has pressed for months for the Office of Planning to submit a report to the commission, outlining potential text amendments to the code instead. But staff there still have not done so, spokespeople for both Mendelson and the planning office confirmed.
Mendelson accused Bowser this spring of deliberately slow-walking that report in an attempt to stall the implementation of the Airbnb-focused rules, though District planners insisted they simply needed more time. The chairman didn’t find that argument convincing, and worked through the budget to compel the planning office to release the report.
At first he threatened to withhold any permits for new government buildings — when that attracted some push back, he settled instead for adding a provisionto the budget barring the city from issuing permits for any construction at the RFK stadium site or at Franklin Park, a downtown space that’s planned for a full renovation.
But instead of waiting on a report from OP, Mendelson decided to submit his own proposed changes, and invited planners to comment on them. Planning office spokeswoman Mekdy Alemayehu says staff there is working on something now, but they haven’t settled yet on whether they’ll submit a report before the Oct. 17 hearing.
Airbnb previously estimated that roughly 6,500 people in the District made use of the service in 2017, generating a total of $82 million in income.
https://www.bizjournals.com/washington/news/2019/08/21/new-d-c-airbnb-restrictions-could-soon-take-effect.html?ana=e_ae_set3&j=89840341&t=Afternoon&mkt_tok=eyJpIjoiWVRBM05qWm1aV1poTXprNCIsInQiOiJUcHlPUFFVTDlqcDVlQThRYnhWSlUwUUcwbEdwU0xJZ0gyYUJMTEh0ajJ0UGptdHpSSUZzMlNjNk9KZVl0dHJyQVNkeXlOU293WjZ6Q2cxemFIV2lQQWhvQ2tNc1cwSTZocU96RGlkZWlGaVJJVUNsT0tua3dcLzhEbzlZc1JaSkpKbzAwYllsUkJRNjBLK05DWDZON0VRPT0ifQ%3D%3D
From DMN: Taylor Swift and the complicated world of recording artists' IP rights:
Taylor Swift is about to make life very complicated for music industry heavyweights Scooter Braun and Scott Borchetta.
Earlier today (August 22nd), Taylor Swift confirmed during an interview with Robin Roberts on “Good Morning America” that she intends to re-record her first 5 albums so that she can gain control over the songs’ master recordings.
This follows earlier comments on “CBS Sunday Morning” indicating that re-recordings were happening.
During the “Good Morning America” interview, Swift indicated that her contract allows her to re-record the 5 albums beginning in November of next year, and this is when she plans to start the process. She further indicated that she’s pumped up about the effort — and damn serious about doing it.
The re-recordings would likely flood platforms like Apple Music and Spotify, resulting in duplicate versions and lots of confusion. The move, if successful, is almost guaranteed to diminish the value of the original catalog, and could spark legal warfare over Swift’s right to re-record.
Swift went on to say that she will be re-recording the music because she feels that music artists should have the right to their own music, which is currently not the case with her previous records.
Those recordings now belong to music manager Scooter Braun, whose Ithaca Holdings bought the rights to Swift’s recordings this past summer through the purchase of Scott Borchetta’s Big Machine Label Group. Ithaca Holdings reportedly paid $300 million for the purchase, with a large percentage of that price predicated on the long-term value of Swift’s intellectual property.
https://www.digitalmusicnews.com/2019/08/22/taylor-swift-re-record-albums-1-5/
Taylor Swift is about to make life very complicated for music industry heavyweights Scooter Braun and Scott Borchetta.
Earlier today (August 22nd), Taylor Swift confirmed during an interview with Robin Roberts on “Good Morning America” that she intends to re-record her first 5 albums so that she can gain control over the songs’ master recordings.
This follows earlier comments on “CBS Sunday Morning” indicating that re-recordings were happening.
During the “Good Morning America” interview, Swift indicated that her contract allows her to re-record the 5 albums beginning in November of next year, and this is when she plans to start the process. She further indicated that she’s pumped up about the effort — and damn serious about doing it.
The re-recordings would likely flood platforms like Apple Music and Spotify, resulting in duplicate versions and lots of confusion. The move, if successful, is almost guaranteed to diminish the value of the original catalog, and could spark legal warfare over Swift’s right to re-record.
Swift went on to say that she will be re-recording the music because she feels that music artists should have the right to their own music, which is currently not the case with her previous records.
Those recordings now belong to music manager Scooter Braun, whose Ithaca Holdings bought the rights to Swift’s recordings this past summer through the purchase of Scott Borchetta’s Big Machine Label Group. Ithaca Holdings reportedly paid $300 million for the purchase, with a large percentage of that price predicated on the long-term value of Swift’s intellectual property.
https://www.digitalmusicnews.com/2019/08/22/taylor-swift-re-record-albums-1-5/
Himes and Perez:
Blowing The Whistle on the Lack Of Antitrust Whistleblower Protection
By CPI on August 12, 2019No Comment
By Jay L. Himes & Matthew J. Perez –
With the Antitrust Criminal Penalty Enhancement and Reform Act (“ACPERA”) set to sunset in June 2020, legislators and relevant stakeholders will debate the law’s renewal and what changes, if any, should be made. A priority in the discussion should be whistleblower protection for individuals who disclose antitrust violations to the Department of Justice. Three protective features are appropriate. First, anti-retaliation protection for whistleblowers should be enacted. Second, a civil remedy for whistleblowers who suffer retaliation should be created. Finally, a bounty program to further incent whistleblowers to come forward should be adopted. The positive experiences of federal agencies with bounty programs confirm the adage: “money talks.”
Click here for the full article.https://www.competitionpolicyinternational.com/wp-content/uploads/2019/08/CPI-Himes-Perez.pdf
Blowing The Whistle on the Lack Of Antitrust Whistleblower Protection
By CPI on August 12, 2019No Comment
By Jay L. Himes & Matthew J. Perez –
With the Antitrust Criminal Penalty Enhancement and Reform Act (“ACPERA”) set to sunset in June 2020, legislators and relevant stakeholders will debate the law’s renewal and what changes, if any, should be made. A priority in the discussion should be whistleblower protection for individuals who disclose antitrust violations to the Department of Justice. Three protective features are appropriate. First, anti-retaliation protection for whistleblowers should be enacted. Second, a civil remedy for whistleblowers who suffer retaliation should be created. Finally, a bounty program to further incent whistleblowers to come forward should be adopted. The positive experiences of federal agencies with bounty programs confirm the adage: “money talks.”
Click here for the full article.https://www.competitionpolicyinternational.com/wp-content/uploads/2019/08/CPI-Himes-Perez.pdf
From DMN: Spotify, Apple, Pandora, Amazon, Google Warn Against Ditching the PRO Consent Decrees — “The Resulting Chaos Will Be Felt by Everyone in the Music Industry”
August 12, 2019
Should the Department of Justice really do away with the ASCAP and BMI Consent Decrees?Not according to major streaming services like Spotify, Apple Music, Pandora/Sirius, Amazon Music, and YouTube owner Google/Alphabet. As the U.S. Department of Justice deliberates over whether to trash the decades-old Decrees for the licensing of public performances, the streaming services — represented by DiMA — have issued a dire warning of a Decree-less future.
In a formal statement submitted to the DOJ ahead of the weekend — and subsequently emailed to Digital Music News — the message from DiMA was starkly clear. “We are living in a golden age of music in which fans and creators alike are benefiting from a highly competitive marketplace that allows any piece of music to be enjoyed wherever and whenever we want, all at the push of the button,” the blue-sky statement begins.
“This benefits music fans, artists, songwriters and all of us in the music ecosystem, which is why it is no surprise that everyone from small businesses and restaurants to the streaming platforms DiMA represents have had a singular message for the Justice Department: the ASCAP and BMI consent decrees are vital to ensuring a robust and competitive music marketplace today and for the future.”
Removing the Decrees, especially without any secondary licensing plan in place, would lead to outright chaos. “Terminating or choosing an arbitrary end date for these well-established decrees prior to a new legal framework being established would thrust the music marketplace into chaos,” the statement continues.
“And make no mistake, the resulting chaos will be felt by everyone in the music industry, but most of all by consumers: prices will rise, competition will deteriorate and the quality and variety of music readily available to music fans will decline.”
rner Chappell Music Inks a Stone Temple Pilots Worldwide Publishing Deal
Also joining DiMA in the warning was the Radio Music Licensing Committee, or RMLC, which also has a strong interest in maintaining regulated, low-cost performance licensing.Ironically, even though streaming platforms are slowly cannibalizing traditional radio and their attempts to transition online, both camps have a very similar interest when it comes to keeping publishing licensing costs low.
Here’s the complete statement, shared by DiMA CEO Garrett Levin to DMN:“We are living in a golden age of music in which fans and creators alike are benefiting from a highly competitive marketplace that allows any piece of music to be enjoyed wherever and whenever we want, all at the push of the button. This benefits music fans, artists, songwriters and all of us in the music ecosystem, which is why it is no surprise that everyone from small businesses and restaurants to the streaming platforms DiMA represents have had a singular message for the Justice Department: the ASCAP and BMI consent decrees are vital to ensuring a robust and competitive music marketplace today and for the future.
“The competitive protections provided by the decrees have been a cornerstone in the successful evolution of the U.S. music industry into the economic and cultural juggernaut it is today. Terminating or choosing an arbitrary end date for these well-established decrees prior to a new legal framework being established would thrust the music marketplace into chaos. And make no mistake, the resulting chaos will be felt by everyone in the music industry, but most of all by consumers: prices will rise, competition will deteriorate and the quality and variety of music readily available to music fans will decline.
“Given the paramount importance of maintaining these competitive protections, DiMA and the Radio Music License Committee today called on the Department of Justice to formally establish a blue-ribbon federal advisory committee to assist in the review process. Such a committee of industry stakeholders, including artist and consumer representatives, could fully study the decrees and provide helpful policy recommendations to DOJ and Congress. This is a critical step to guaranteeing a vibrant competitive music marketplace for today, tomorrow, and for generations to come.”
The groups also entered a more elaborated breakdown on the matter.That broadened statement delineates the arguments against the Decrees in greater depth, and includes a recommendation to create a Federal Advisory Committee instead of a ‘rushed comment period’. It also raises the reality that major publishers, as well as their ASCAP and BMI agents, will attempt to dramatically increase performance licensing fees if the
Consent Decrees are lifted
The Department of Justice first enacted the Consent Decrees in 1941 to prevent anti-competitive pricing in the performance licensing market. That licensing has been administered by two major groups, ASCAP and BMI, for which the Decrees remain in effect today.
The result of the Decrees was that any business in the United States could play virtually any song they pleased, so long as they paid relatively low-cost statutory fees. That also extended into traditional radio and online radio and even on-demand streaming formats, though publishers argue that the Decrees are out-of-date and run afoul of fair, open market practices.
Both ASCAP and BMI have been protesting the Consent Decrees for decades, and not one employee of either group has worked in an environment without the regulations in place. All of which makes it fairly exciting that the DOJ is seriously considering removing the statutes, though the removals would certainly introduce lots of uncertainties for all sides.
https://www.digitalmusicnews.com/2019/08/12/spotify-pandora-amazon-google-consent-decrees/
August 12, 2019
Should the Department of Justice really do away with the ASCAP and BMI Consent Decrees?Not according to major streaming services like Spotify, Apple Music, Pandora/Sirius, Amazon Music, and YouTube owner Google/Alphabet. As the U.S. Department of Justice deliberates over whether to trash the decades-old Decrees for the licensing of public performances, the streaming services — represented by DiMA — have issued a dire warning of a Decree-less future.
In a formal statement submitted to the DOJ ahead of the weekend — and subsequently emailed to Digital Music News — the message from DiMA was starkly clear. “We are living in a golden age of music in which fans and creators alike are benefiting from a highly competitive marketplace that allows any piece of music to be enjoyed wherever and whenever we want, all at the push of the button,” the blue-sky statement begins.
“This benefits music fans, artists, songwriters and all of us in the music ecosystem, which is why it is no surprise that everyone from small businesses and restaurants to the streaming platforms DiMA represents have had a singular message for the Justice Department: the ASCAP and BMI consent decrees are vital to ensuring a robust and competitive music marketplace today and for the future.”
Removing the Decrees, especially without any secondary licensing plan in place, would lead to outright chaos. “Terminating or choosing an arbitrary end date for these well-established decrees prior to a new legal framework being established would thrust the music marketplace into chaos,” the statement continues.
“And make no mistake, the resulting chaos will be felt by everyone in the music industry, but most of all by consumers: prices will rise, competition will deteriorate and the quality and variety of music readily available to music fans will decline.”
rner Chappell Music Inks a Stone Temple Pilots Worldwide Publishing Deal
Also joining DiMA in the warning was the Radio Music Licensing Committee, or RMLC, which also has a strong interest in maintaining regulated, low-cost performance licensing.Ironically, even though streaming platforms are slowly cannibalizing traditional radio and their attempts to transition online, both camps have a very similar interest when it comes to keeping publishing licensing costs low.
Here’s the complete statement, shared by DiMA CEO Garrett Levin to DMN:“We are living in a golden age of music in which fans and creators alike are benefiting from a highly competitive marketplace that allows any piece of music to be enjoyed wherever and whenever we want, all at the push of the button. This benefits music fans, artists, songwriters and all of us in the music ecosystem, which is why it is no surprise that everyone from small businesses and restaurants to the streaming platforms DiMA represents have had a singular message for the Justice Department: the ASCAP and BMI consent decrees are vital to ensuring a robust and competitive music marketplace today and for the future.
“The competitive protections provided by the decrees have been a cornerstone in the successful evolution of the U.S. music industry into the economic and cultural juggernaut it is today. Terminating or choosing an arbitrary end date for these well-established decrees prior to a new legal framework being established would thrust the music marketplace into chaos. And make no mistake, the resulting chaos will be felt by everyone in the music industry, but most of all by consumers: prices will rise, competition will deteriorate and the quality and variety of music readily available to music fans will decline.
“Given the paramount importance of maintaining these competitive protections, DiMA and the Radio Music License Committee today called on the Department of Justice to formally establish a blue-ribbon federal advisory committee to assist in the review process. Such a committee of industry stakeholders, including artist and consumer representatives, could fully study the decrees and provide helpful policy recommendations to DOJ and Congress. This is a critical step to guaranteeing a vibrant competitive music marketplace for today, tomorrow, and for generations to come.”
The groups also entered a more elaborated breakdown on the matter.That broadened statement delineates the arguments against the Decrees in greater depth, and includes a recommendation to create a Federal Advisory Committee instead of a ‘rushed comment period’. It also raises the reality that major publishers, as well as their ASCAP and BMI agents, will attempt to dramatically increase performance licensing fees if the
Consent Decrees are lifted
The Department of Justice first enacted the Consent Decrees in 1941 to prevent anti-competitive pricing in the performance licensing market. That licensing has been administered by two major groups, ASCAP and BMI, for which the Decrees remain in effect today.
The result of the Decrees was that any business in the United States could play virtually any song they pleased, so long as they paid relatively low-cost statutory fees. That also extended into traditional radio and online radio and even on-demand streaming formats, though publishers argue that the Decrees are out-of-date and run afoul of fair, open market practices.
Both ASCAP and BMI have been protesting the Consent Decrees for decades, and not one employee of either group has worked in an environment without the regulations in place. All of which makes it fairly exciting that the DOJ is seriously considering removing the statutes, though the removals would certainly introduce lots of uncertainties for all sides.
https://www.digitalmusicnews.com/2019/08/12/spotify-pandora-amazon-google-consent-decrees/
The ITT fraudulent student loan settlement
See it at https://files.consumerfinance.gov/f/documents/cfpb_ITT_proposed-stipulated-judgement_2019-08.pdf
"6. The Bureau alleges that the acts and practices described in its Complaint resulted in students enrolling in CUSO Loans that in many cases they did not want, did not understand, or did not even realize they were getting. The Bureau alleges that ITT students experienced substantial injury as a result of the CUSO Loans. "
See it at https://files.consumerfinance.gov/f/documents/cfpb_ITT_proposed-stipulated-judgement_2019-08.pdf
"6. The Bureau alleges that the acts and practices described in its Complaint resulted in students enrolling in CUSO Loans that in many cases they did not want, did not understand, or did not even realize they were getting. The Bureau alleges that ITT students experienced substantial injury as a result of the CUSO Loans. "
AAI Asks Ninth Circuit to Preserve Consumer Recoveries Under State Antitrust Law (Stromberg v. Qualcomm)
AAI has filed an amicus brief in the Ninth Circuit arguing that states that bar antitrust suits by indirect purchasers should not prevent indirect purchasers from recovering in states that allow such suits.
The AAI brief argues that Qualcomm and the DOJ have not shown a “conflict” under California choice-of-law rules for all the same reasons the Supreme Court did not find a conflict under the preemption doctrine in Arc America. The brief also explains why it is incorrect to presume that follower states have different interests than repealer states. Both are aligned on substantive antitrust policy, and both rely on private civil actions to compensate victims and deter future violations. They merely differ as to who they permit to sue, which does not create a conflict under choice-of-law rules.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-ninth-circuit-to-preserve-consumer-recoveries-under-state-antitrust-law-stromberg-v-qualcomm/
AAI has filed an amicus brief in the Ninth Circuit arguing that states that bar antitrust suits by indirect purchasers should not prevent indirect purchasers from recovering in states that allow such suits.
The AAI brief argues that Qualcomm and the DOJ have not shown a “conflict” under California choice-of-law rules for all the same reasons the Supreme Court did not find a conflict under the preemption doctrine in Arc America. The brief also explains why it is incorrect to presume that follower states have different interests than repealer states. Both are aligned on substantive antitrust policy, and both rely on private civil actions to compensate victims and deter future violations. They merely differ as to who they permit to sue, which does not create a conflict under choice-of-law rules.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-ninth-circuit-to-preserve-consumer-recoveries-under-state-antitrust-law-stromberg-v-qualcomm/
Baseball Minor League Class Action on Wages Allowed to Go Forward
Minor League Baseball players suing over wages won a victory as the Ninth Circuit upheld a lower court's decision to certify a national Fair Labor Standards Act collective and California class action certification. The opinion is here:
https://www.courthousenews.com/wp-content/uploads/2019/08/minorleague.pdf
Minor League Baseball players suing over wages won a victory as the Ninth Circuit upheld a lower court's decision to certify a national Fair Labor Standards Act collective and California class action certification. The opinion is here:
https://www.courthousenews.com/wp-content/uploads/2019/08/minorleague.pdf
Texas AG Press release: AG Paxton: Texas to Join Multistate Lawsuit Challenging the Sprint/T‑Mobile Merger
Today, Texas Attorney General Ken Paxton announced that Texas intends to join a coalition of 13 other states, and the District of Columbia, in challenging the proposed merger of Sprint and T-Mobile, the 3rd and 4th largest providers of mobile wireless telecommunications services in the United States. The merger, if consummated, would result in a substantial harm to competition in the market for mobile wireless telecommunications services, both nationwide, and specifically within the State of Texas.
“While we appreciate the time and effort that went into the agreement between the parties and the U.S. Dept. of Justice, the Texas Attorney General has an independent obligation to protect Texas consumers. After careful evaluation of the proposed merger and the settlement, we do not anticipate that the proposed new entrant will replace the competitive role of Sprint anytime soon,” Attorney General Paxton said. “It is the Attorney General’s responsibility to preserve free market competition, which has proven to result in lower prices and better quality for consumers. The bargain struck by the U.S. Dept. of Justice is not in the best interest of working Texans, who need affordable mobile wireless telecommunication services that are fit to match the speed and technological innovation demands of Texas’ growing economy.”
The New York and California co-led lawsuit was originally filed on June 11 and includes the attorneys general of Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, Virginia, Wisconsin, and the District of Columbia. Today, at a hearing in the U.S. District court for the Southern District of New York, counsel for New York advised the court that they will be seeking leave for Texas and possibly other states to join the lawsuit next week.
https://www.texasattorneygeneral.gov/news/releases/ag-paxton-texas-join-multistate-lawsuit-challenging-sprintt-mobile-merger
Today, Texas Attorney General Ken Paxton announced that Texas intends to join a coalition of 13 other states, and the District of Columbia, in challenging the proposed merger of Sprint and T-Mobile, the 3rd and 4th largest providers of mobile wireless telecommunications services in the United States. The merger, if consummated, would result in a substantial harm to competition in the market for mobile wireless telecommunications services, both nationwide, and specifically within the State of Texas.
“While we appreciate the time and effort that went into the agreement between the parties and the U.S. Dept. of Justice, the Texas Attorney General has an independent obligation to protect Texas consumers. After careful evaluation of the proposed merger and the settlement, we do not anticipate that the proposed new entrant will replace the competitive role of Sprint anytime soon,” Attorney General Paxton said. “It is the Attorney General’s responsibility to preserve free market competition, which has proven to result in lower prices and better quality for consumers. The bargain struck by the U.S. Dept. of Justice is not in the best interest of working Texans, who need affordable mobile wireless telecommunication services that are fit to match the speed and technological innovation demands of Texas’ growing economy.”
The New York and California co-led lawsuit was originally filed on June 11 and includes the attorneys general of Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, Virginia, Wisconsin, and the District of Columbia. Today, at a hearing in the U.S. District court for the Southern District of New York, counsel for New York advised the court that they will be seeking leave for Texas and possibly other states to join the lawsuit next week.
https://www.texasattorneygeneral.gov/news/releases/ag-paxton-texas-join-multistate-lawsuit-challenging-sprintt-mobile-merger
NY AG press release: Rent to own company sued by State
Attorney General James And DFS Superintendent Lacewell Take Action Against Fraudulent Mortgage LenderNEW YORK –
Attorney General Letitia James and New York Superintendent of Financial Services Linda A. Lacewell today filed suit in federal court [https://ag.ny.gov/sites/default/files/filed_-_ecf_stamp_-_nyag_nysdfs_v._vision_property_management_llc_et_al._-_19-cv-7191.pdf] against Vision Property Management, LLC; the company’s CEO, Alex Szkaradek; and a number of other companies affiliated with Vision for operating an illegal, deceptive, and unlicensed mortgage lending business in New York since at least 2011. By offering disguised, predatory subprime home loans and illegal finance-lease hybrid agreements, Vision and the other defendants took part in fraudulent activities that repeatedly targeted and took advantage of financially vulnerable New Yorkers.
“For nearly a decade, Vision put profits above people — fraudulently targeting, preying upon, and exploiting aspiring homeowners, including people with disabilities, the elderly, and those living on fixed income,” said Attorney General Letitia James. “These deceptive and abusive practices have trapped New Yorkers in mold-infested, dilapidated homes, and wrongfully placed the onus on consumers to pay the price. This behavior is unacceptable, which is why my office is aggressively prosecuting Vision and will do the same against any company or individual that tries to defraud New Yorkers.”
“As alleged in the complaint, Vision swindled vulnerable New Yorkers who wanted nothing more than the American dream of homeownership but instead got distressed properties with unsafe, squalid conditions and high-interest, predatory loans,” said Superintendent Linda A. Lacewell.
“We took this action to protect New York consumers by putting an end to these illegal, predatory and unconscionable business practices and holding Vision and its CEO accountable under New York State law and applicable federal laws. I am proud of the exemplary work of the DFS colleagues who investigated Vision’s activities for over two years, analyzed thousands of documents, and who worked to protect New Yorkers and bring this company to justice.”
The complaint alleges that Vision specializes in buying severely distressed properties and then markets those properties — at a substantial markup to consumers — without making any necessary repairs or renovations, and without fully disclosing to consumers the many conditions that exist and repairs that must be made for safe habitation. Vision targets low-income consumers eager to share in the “American dream” of homeownership, claiming that its “unique” business model provides this path to homeownership. But, in reality, Vision’s illegal business model has generated significant profits by skirting consumer protections and financial regulations and trapping vulnerable consumers with high cost mortgages for uninhabitable homes.
Vision’s deceptive tactics have left many of its consumers in dilapidated homes with unhealthy and hazardous conditions, while simultaneously requiring them to pay subprime, or high-cost, interest rates — in the range of 10% to 25% — on top of paying for extensive repairs and renovations just to make their homes habitable.
Vision has engaged in approximately 150 such transactions in New York since 2011 without possessing the legally required licenses to engage in mortgage lending. Furthermore, Vision entered into contracts with financially strained consumers that illegally required them to shoulder the burden of ensuring their properties were habitable. Often, consumers were deceived and trapped into paying for the treatment and repair of dangerous and unhealthy conditions in their new homes, including infestations, faulty electrical wiring, missing heaters and septic systems, mold, and asbestos, as well as severely damaged and rotted out, floors, walls, and roofs.
Vision has violated laws applicable to both mortgage lending and the leasing of residential properties, as well as numerous state and federal consumer protection laws.
In the suit — being filed in the Southern District of New York — Attorney General James and Superintendent Lacewell are seeking to end Vision’s ongoing illegal activity in New York, secure restitution and damages for all consumers injured by these practices, and obtain statutory penalties.
The matter is being handled by Assistant Attorney General Noah Popp of the Consumer Frauds and Protection Bureau, under the supervision of Jane M. Azia, Chief of the Consumer Frauds and Protection Bureau, and Chief Deputy Attorney General for Social Justice Meghan Faux. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo.
Additional attorneys at the Department of Financial Services involved with this litigation include Peter C. Dean of the Real Estate Finance Division and Cynthia M. Reed, Supervising Attorney in the Consumer Protection and Financial Enforcement Division.
https://ag.ny.gov/sites/default/files/filed_-_ecf_stamp_-_nyag_nysdfs_v._vision_property_management_llc_et_al._-_19-cv-7191.pdf
Attorney General James And DFS Superintendent Lacewell Take Action Against Fraudulent Mortgage LenderNEW YORK –
Attorney General Letitia James and New York Superintendent of Financial Services Linda A. Lacewell today filed suit in federal court [https://ag.ny.gov/sites/default/files/filed_-_ecf_stamp_-_nyag_nysdfs_v._vision_property_management_llc_et_al._-_19-cv-7191.pdf] against Vision Property Management, LLC; the company’s CEO, Alex Szkaradek; and a number of other companies affiliated with Vision for operating an illegal, deceptive, and unlicensed mortgage lending business in New York since at least 2011. By offering disguised, predatory subprime home loans and illegal finance-lease hybrid agreements, Vision and the other defendants took part in fraudulent activities that repeatedly targeted and took advantage of financially vulnerable New Yorkers.
“For nearly a decade, Vision put profits above people — fraudulently targeting, preying upon, and exploiting aspiring homeowners, including people with disabilities, the elderly, and those living on fixed income,” said Attorney General Letitia James. “These deceptive and abusive practices have trapped New Yorkers in mold-infested, dilapidated homes, and wrongfully placed the onus on consumers to pay the price. This behavior is unacceptable, which is why my office is aggressively prosecuting Vision and will do the same against any company or individual that tries to defraud New Yorkers.”
“As alleged in the complaint, Vision swindled vulnerable New Yorkers who wanted nothing more than the American dream of homeownership but instead got distressed properties with unsafe, squalid conditions and high-interest, predatory loans,” said Superintendent Linda A. Lacewell.
“We took this action to protect New York consumers by putting an end to these illegal, predatory and unconscionable business practices and holding Vision and its CEO accountable under New York State law and applicable federal laws. I am proud of the exemplary work of the DFS colleagues who investigated Vision’s activities for over two years, analyzed thousands of documents, and who worked to protect New Yorkers and bring this company to justice.”
The complaint alleges that Vision specializes in buying severely distressed properties and then markets those properties — at a substantial markup to consumers — without making any necessary repairs or renovations, and without fully disclosing to consumers the many conditions that exist and repairs that must be made for safe habitation. Vision targets low-income consumers eager to share in the “American dream” of homeownership, claiming that its “unique” business model provides this path to homeownership. But, in reality, Vision’s illegal business model has generated significant profits by skirting consumer protections and financial regulations and trapping vulnerable consumers with high cost mortgages for uninhabitable homes.
Vision’s deceptive tactics have left many of its consumers in dilapidated homes with unhealthy and hazardous conditions, while simultaneously requiring them to pay subprime, or high-cost, interest rates — in the range of 10% to 25% — on top of paying for extensive repairs and renovations just to make their homes habitable.
Vision has engaged in approximately 150 such transactions in New York since 2011 without possessing the legally required licenses to engage in mortgage lending. Furthermore, Vision entered into contracts with financially strained consumers that illegally required them to shoulder the burden of ensuring their properties were habitable. Often, consumers were deceived and trapped into paying for the treatment and repair of dangerous and unhealthy conditions in their new homes, including infestations, faulty electrical wiring, missing heaters and septic systems, mold, and asbestos, as well as severely damaged and rotted out, floors, walls, and roofs.
Vision has violated laws applicable to both mortgage lending and the leasing of residential properties, as well as numerous state and federal consumer protection laws.
In the suit — being filed in the Southern District of New York — Attorney General James and Superintendent Lacewell are seeking to end Vision’s ongoing illegal activity in New York, secure restitution and damages for all consumers injured by these practices, and obtain statutory penalties.
The matter is being handled by Assistant Attorney General Noah Popp of the Consumer Frauds and Protection Bureau, under the supervision of Jane M. Azia, Chief of the Consumer Frauds and Protection Bureau, and Chief Deputy Attorney General for Social Justice Meghan Faux. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo.
Additional attorneys at the Department of Financial Services involved with this litigation include Peter C. Dean of the Real Estate Finance Division and Cynthia M. Reed, Supervising Attorney in the Consumer Protection and Financial Enforcement Division.
https://ag.ny.gov/sites/default/files/filed_-_ecf_stamp_-_nyag_nysdfs_v._vision_property_management_llc_et_al._-_19-cv-7191.pdf
"Free Market" Coalition Letter to DOJ — Re: Antitrust Consent Decrees with the Two Largest Music Collectives August 7, 2019
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To: The Honorable William P. Barr
Dear Attorney General Barr,
The undersigned free market organizations write to raise serious concerns regarding the possible termination, sunset or significant changes to the antitrust consent decrees between the Department of Justice and the two largest music collectives: the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI).
The Department’s Antitrust Division is currently reviewing scores of legacy consent decrees for possible termination. Many of these decrees are outdated, governing industries that no longer exist or markets that no longer pose antitrust concerns. In those cases, such needless regulation should be eliminated. The ASCAP and BMI consent decrees, however, remain extremely relevant to a functioning marketplace. Millions of businesses across the country rely on the efficiencies and anticompetitive protections that these decrees provide.
The market for music licenses is inherently anticompetitive, and traditional free market principles do not necessarily translate. Rather than competing against one another to sell their products, the vast majority of songwriters and publishers have chosen instead to band together under the ASCAP and BMI umbrella (representing about ninety-five percent of all music) in order to collectively set a standard price for music.
This approach of music sellers colluding instead of competing recently led a Federal court to find that SESAC, the next largest music collective, with less than five percent of all music licenses, does possess market power. This finding resulted in the much smaller SESAC agreeing to an antitrust settlement with terms similar to the ASCAP and BMI consent decrees.
This sort of market power, collusion, and price fixing is antithetical to a traditional free market, yet it remains necessary for the music licensing market to operate efficiently. Most businesses, from restaurants to local radio stations, must license millions of songs to indemnify themselves from ruinous infringement damages. Rather than negotiate with thousands of individual rights holders, ASCAP and BMI offer a one-stop shop opportunity. Similarly, thousands of rights holders rely upon the scale of ASCAP and BMI to maximize the enforcement of their copyrights.
These benefits, however necessary to market efficiency, should not excuse ASCAP and BMI from the nation’s antitrust laws.
Given the anticompetitive nature of the music licensing market as a whole, ending the ASCAP and BMI consent decrees would assuredly necessitate some other form of government regulation over the market. Disrupting entire industries, potentially harming millions of individual businesses in the process, only to trade one form of regulation for another, is not in line with conservative, free market principles.
Sincerely,
George Landrith, President, Frontiers of Freedom
Rick Manning, President , Americans for Limited Government
Andrew Quinlan, President, Center for Freedom & Prosperity
Chuck Muth, President, Citizen Outreach
Chris Salcedo, Executive Director, The Conservative Hispanic Society
Mario Lopez, President, Hispanic Leadership Fund
Patrice Onwuka, Senior Policy Analyst, Independent Women’s Forum
Andrew Langer, President, Institute for Liberty
Hector V. Barreto, Chairman & CEO, The Latino Coalition
Seton Motley, President, Less Government
Peter Ferrara, Senior Policy Advisor, National Tax Limitation Committee
Tom Zawistowski, President, We the People Convention
https://www.ff.org/coalition-letter-to-doj/
Can a mortgage lender bypass mortgage foreclosure and sue directly on the underlying note?
That is what happened to a recent client at the DC Bar’s pro bono clinic. Her mortgage lender bypassed mortgage foreclosure and sued directly on the underlying promissory note. The client’s story had its own peculiarities, but brings to mind the question of whether such suits on the underlying note occur frequently instead of foreclosure, and if so why.
I found a helpful discussion in a posting by Alperlaw, a Florida law firm. The posting explains that a mortgagor’s suit directly on a note may dodge some consumer protections that apply to mortgage foreclosures.
The Alper posting explains that as a general matter when you buy a house you sign a promissory note to evidence the obligation to repay the house loan. The mortgage is a security instrument that gives the lender an interest in the house which he can foreclose if you default. Your personal obligation to the lender is based on the underlying note. A lender has the option to sue you for repayment under the note without foreclosing the mortgage. If the lender sues on the note, you, the borrower, will have a personal judgment against you for your default under the note, and the lender still retains his mortgage security in most jurisdictions.
So, why would a lender chose not to foreclose a mortgage on your home and sue you directly on the note. The Alper posting explains that, among other things:
1. The government has given homeowners more rights under the government mortgage modification program (HAMP) which regulations make foreclosures slower and more expensive for banks.
2. Banks who take back properties on foreclosure have to deal with delinquent HOA bills, unpaid taxes, and house repairs.
3. Legally, its much easier for a bank to get a personal judgment against the borrower through a suit on the note than it is to get a personal judgment in a deficiency claim after foreclosure.
4. Where there are environmental issues, banks do not want to foreclose and take over ownership of potential environmental liabilities.
Government programs designed to protect homeowners from foreclosure by requiring loan modifications may have in fact damaged homeowners by giving banks the incentive to sue for personal liability when they mostly have not to this point pursued large scale deficiency claims? The Alper comment suggests that it would not be the first time that government programs have had unintended consequences.
http://www.assetprotectionfl.com/2010/08/government-programs-and-market-conditions-may-lead-lenders-to-postpone-foreclosure-and-sue-homeowner-directly-on-underlying-note/
http://www.assetprotectionfl.com/2010/08/government-programs-and-market-conditions-may-lead-lenders-to-postpone-foreclosure-and-sue-homeowner-directly-on-underlying-note/
That is what happened to a recent client at the DC Bar’s pro bono clinic. Her mortgage lender bypassed mortgage foreclosure and sued directly on the underlying promissory note. The client’s story had its own peculiarities, but brings to mind the question of whether such suits on the underlying note occur frequently instead of foreclosure, and if so why.
I found a helpful discussion in a posting by Alperlaw, a Florida law firm. The posting explains that a mortgagor’s suit directly on a note may dodge some consumer protections that apply to mortgage foreclosures.
The Alper posting explains that as a general matter when you buy a house you sign a promissory note to evidence the obligation to repay the house loan. The mortgage is a security instrument that gives the lender an interest in the house which he can foreclose if you default. Your personal obligation to the lender is based on the underlying note. A lender has the option to sue you for repayment under the note without foreclosing the mortgage. If the lender sues on the note, you, the borrower, will have a personal judgment against you for your default under the note, and the lender still retains his mortgage security in most jurisdictions.
So, why would a lender chose not to foreclose a mortgage on your home and sue you directly on the note. The Alper posting explains that, among other things:
1. The government has given homeowners more rights under the government mortgage modification program (HAMP) which regulations make foreclosures slower and more expensive for banks.
2. Banks who take back properties on foreclosure have to deal with delinquent HOA bills, unpaid taxes, and house repairs.
3. Legally, its much easier for a bank to get a personal judgment against the borrower through a suit on the note than it is to get a personal judgment in a deficiency claim after foreclosure.
4. Where there are environmental issues, banks do not want to foreclose and take over ownership of potential environmental liabilities.
Government programs designed to protect homeowners from foreclosure by requiring loan modifications may have in fact damaged homeowners by giving banks the incentive to sue for personal liability when they mostly have not to this point pursued large scale deficiency claims? The Alper comment suggests that it would not be the first time that government programs have had unintended consequences.
http://www.assetprotectionfl.com/2010/08/government-programs-and-market-conditions-may-lead-lenders-to-postpone-foreclosure-and-sue-homeowner-directly-on-underlying-note/
http://www.assetprotectionfl.com/2010/08/government-programs-and-market-conditions-may-lead-lenders-to-postpone-foreclosure-and-sue-homeowner-directly-on-underlying-note/
No-deal Brexit: pause competition law to avoid food shortages, say manufacturers
Companies want guarantee they won’t be fined for working together to direct supplies
Jasper Jolly and Rebecca Smithers
Wed 7 Aug 2019 06.34 EDTLast modified on Wed 7 Aug 2019 16.00 EDT
The Food and Drink Federation said ministers had not yet confirmed that controls over collaboration would be lifted. Photograph: Nick Ansell/PA
Britain’s food and drinks industry has asked the government to suspend competition law in the event of a no-deal Brexit so that firms can work together to avert food shortages without facing large fines for collusion.
Collaboration between large companies is controlled to prevent cartels harming consumers’ interests. The Food and Drink Federation (FDF) told the BBC the government had not yet confirmed whether companies would be able to work together to direct food supplies to the areas of greatest need if there were delays as a result of crashing out of the EU.
Many trade experts, from the government’s own analysts to the Bank of England, expect a no-deal Brexit to cause severe disruption at ports, potentially delaying food imports. Boris Johnson has committed to leaving the EU on 31 October whatever the implications, and has put Michael Gove in charge of preparing to exit without a deal.
FDF members, including large companies such as Associated British Foods, Mondelēz and Nestlé, risked incurring large fines from the Competition and Markets Authority (CMA) if they collaborated, the industry body said.
“Competition law is important, but in the event of no-deal disruption, if the government wants the food supply chain to work together to tackle likely shortages – to decide where to prioritise shipments – they will have to provide cast-iron written reassurances that competition law will not be strictly applied to those discussions,” FDF’s chief operating officer, Tim Rycroft, said.
Full article: https://www.theguardian.com/business/2019/aug/07/no-deal-brexit-call-to-suspend-competition-law-to-avert-food-shortages
Companies want guarantee they won’t be fined for working together to direct supplies
Jasper Jolly and Rebecca Smithers
Wed 7 Aug 2019 06.34 EDTLast modified on Wed 7 Aug 2019 16.00 EDT
The Food and Drink Federation said ministers had not yet confirmed that controls over collaboration would be lifted. Photograph: Nick Ansell/PA
Britain’s food and drinks industry has asked the government to suspend competition law in the event of a no-deal Brexit so that firms can work together to avert food shortages without facing large fines for collusion.
Collaboration between large companies is controlled to prevent cartels harming consumers’ interests. The Food and Drink Federation (FDF) told the BBC the government had not yet confirmed whether companies would be able to work together to direct food supplies to the areas of greatest need if there were delays as a result of crashing out of the EU.
Many trade experts, from the government’s own analysts to the Bank of England, expect a no-deal Brexit to cause severe disruption at ports, potentially delaying food imports. Boris Johnson has committed to leaving the EU on 31 October whatever the implications, and has put Michael Gove in charge of preparing to exit without a deal.
FDF members, including large companies such as Associated British Foods, Mondelēz and Nestlé, risked incurring large fines from the Competition and Markets Authority (CMA) if they collaborated, the industry body said.
“Competition law is important, but in the event of no-deal disruption, if the government wants the food supply chain to work together to tackle likely shortages – to decide where to prioritise shipments – they will have to provide cast-iron written reassurances that competition law will not be strictly applied to those discussions,” FDF’s chief operating officer, Tim Rycroft, said.
Full article: https://www.theguardian.com/business/2019/aug/07/no-deal-brexit-call-to-suspend-competition-law-to-avert-food-shortages
Klobuchar press release:
Klobuchar Introduces Legislation to Crack Down on Monopolies that Violate Antitrust Law
August 2, 2019
WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced new legislation to crack down on monopolies that violate antitrust law. The Monopolization Deterrence Act would give the Justice Department and the Federal Trade Commission (FTC) the authority to seek civil penalties for monopolization offenses under the antitrust laws, a power they currently do not have. The bill was introduced with Senator Richard Blumenthal (D-CT) and cosponsored by Senators Dianne Feinstein (D-CA) and Ed Markey (D-MA).
“We have a major monopoly problem in this country. So when federal enforcers uncover illegal monopolistic conduct, they need to act decisively to make sure it stops. But the threat of an injunction isn’t always enough to deter this unlawful conduct from happening in the first place. Dominant companies need to be put on notice that there will be serious financial consequences for illegal monopolistic behavior,” Klobuchar said. “Our legislation will increase the ability of the Justice Department and the FTC to deter companies from engaging in monopolistic practices that hurt competition, consumers, and innovation in our economy.”
Specifically, the Monopolization Deterrence Act would:
“We need to make sure we have effective enforcement tools to deter dominant corporations from engaging in anti-competitive, monopolistic practices that harm the marketplace and consumers,” said George Slover, senior policy counsel at Consumer Reports. “Senator Klobuchar’s legislation will put new teeth into our antitrust laws by empowering enforcers and courts to impose significant financial penalties when a corporation abuses its dominance in the marketplace.”
“Section 2 monopolization cases are more difficult to bring than other cases, and if the government wins at court, it usually can do no more than stop the offending company from engaging in the same anticompetitive behavior in the future,” said Charlotte Slaiman, Competition Policy Counsel at Public Knowledge. “Adding monetary penalties as a percentage of a company’s U.S. revenue could help deter anticompetitive conduct and give the antitrust enforcement agencies more leverage to promote competition in these types of cases.”
“Senator Klobuchar has been a leader in smart and constructive legislative antitrust reforms. Her proposed bill to strengthen U.S. monopolization law provides for needed expansion of federal remedies to help deter anticompetitive abuses. This initiative should garner strong bipartisan support,” said American Antitrust Institute President Diana Moss.
In her role as Ranking Member of the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights, Klobuchar has championed efforts to protect consumers, promote competition, and fight consolidation in several industries including the telecommunications, agriculture, and pharmaceutical industries. In June, she led efforts to obtain details about possible FTC antitrust investigations into Amazon and Facebook and possible Justice Department antitrust investigations into Google and Apple. In the letters, the senators requested information regarding the existence and scope of the potential investigations. In April, Klobuchar and Senator Marsha Blackburn (R-TN) sent a letter to the FTC to take action in response to concerns regarding potential privacy, data security, and antitrust violations involving online platforms. They also called on the FTC to provide additional transparency into its ongoing investigations to ensure that consumers are protected from harmful conduct relating to digital markets.
Klobuchar has also been an outspoken voice in opposing anticompetitive mergers and has introduced legislation to help prevent them. In June, Klobuchar and Senator Chuck Grassley (R-IA) introduced new bipartisan legislation to ensure that antitrust authorities have the resources they need to protect consumers. The Merger Filing Fee Modernization Act would update merger filing fees for the first time since 2001, lower the burden on small and medium-sized businesses, ensure larger deals bring in more income, and raise enough revenue so that taxpayer dollars aren’t required to fund necessary increases to agency enforcement budgets.
Klobuchar leads the Consolidation Prevention and Competition Promotion Act to restore the original purpose of the Clayton Antitrust Act to promote competition and protect American consumers. The bill would strengthen the current legal standard to help stop harmful consolidation that may materially lessen competition. It would clarify that a merger could violate the statute if it gives a company “monopsony” power to unfairly lower the prices it pays or wages it offers because of lack of competition among buyers or employers. The bill further strengthens the law to guard against harmful “mega-mergers” and deals that substantially increase market concentration, shifting the burden to the merging companies to prove that their consolidation does not harm competition. She also introduced the Merger Enforcement Improvement Act which would update existing law to reflect the current economy and provide agencies with better information post-merger to ensure that merger enforcement is meeting its goals. This bill would modernize antitrust enforcement by improving the agencies’ ability to assess the impact of merger settlements, requiring studies of new issues, adjusting merger filing fees to reflect the 21st century economy, and providing adequate funding for antitrust agencies to meet their obligations to protect American consumers. She introduced both bills in February.
###
Permalink: https://www.klobuchar.senate.gov/public/index.cfm/2019/8/klobuchar-introduces-legislation-to-crack-down-on-monopolies-that-violate-antitrust-law
Klobuchar Introduces Legislation to Crack Down on Monopolies that Violate Antitrust Law
August 2, 2019
WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced new legislation to crack down on monopolies that violate antitrust law. The Monopolization Deterrence Act would give the Justice Department and the Federal Trade Commission (FTC) the authority to seek civil penalties for monopolization offenses under the antitrust laws, a power they currently do not have. The bill was introduced with Senator Richard Blumenthal (D-CT) and cosponsored by Senators Dianne Feinstein (D-CA) and Ed Markey (D-MA).
“We have a major monopoly problem in this country. So when federal enforcers uncover illegal monopolistic conduct, they need to act decisively to make sure it stops. But the threat of an injunction isn’t always enough to deter this unlawful conduct from happening in the first place. Dominant companies need to be put on notice that there will be serious financial consequences for illegal monopolistic behavior,” Klobuchar said. “Our legislation will increase the ability of the Justice Department and the FTC to deter companies from engaging in monopolistic practices that hurt competition, consumers, and innovation in our economy.”
Specifically, the Monopolization Deterrence Act would:
- Enable the Department of Justice and the FTC to seek civil monetary penalties, in addition to existing remedies, for violations of section 2 of the Sherman Act (15 U.S.C. 2);
- Deter future violations by providing for penalties of up to 15 percent of the violator’s total U.S. revenues or 30 percent of the violator’s U.S. revenues in the affected markets; and
- Ensure that the two agencies work together to create guidelines for how they would exercise their penalty authority considering a number of relevant factors.
“We need to make sure we have effective enforcement tools to deter dominant corporations from engaging in anti-competitive, monopolistic practices that harm the marketplace and consumers,” said George Slover, senior policy counsel at Consumer Reports. “Senator Klobuchar’s legislation will put new teeth into our antitrust laws by empowering enforcers and courts to impose significant financial penalties when a corporation abuses its dominance in the marketplace.”
“Section 2 monopolization cases are more difficult to bring than other cases, and if the government wins at court, it usually can do no more than stop the offending company from engaging in the same anticompetitive behavior in the future,” said Charlotte Slaiman, Competition Policy Counsel at Public Knowledge. “Adding monetary penalties as a percentage of a company’s U.S. revenue could help deter anticompetitive conduct and give the antitrust enforcement agencies more leverage to promote competition in these types of cases.”
“Senator Klobuchar has been a leader in smart and constructive legislative antitrust reforms. Her proposed bill to strengthen U.S. monopolization law provides for needed expansion of federal remedies to help deter anticompetitive abuses. This initiative should garner strong bipartisan support,” said American Antitrust Institute President Diana Moss.
In her role as Ranking Member of the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights, Klobuchar has championed efforts to protect consumers, promote competition, and fight consolidation in several industries including the telecommunications, agriculture, and pharmaceutical industries. In June, she led efforts to obtain details about possible FTC antitrust investigations into Amazon and Facebook and possible Justice Department antitrust investigations into Google and Apple. In the letters, the senators requested information regarding the existence and scope of the potential investigations. In April, Klobuchar and Senator Marsha Blackburn (R-TN) sent a letter to the FTC to take action in response to concerns regarding potential privacy, data security, and antitrust violations involving online platforms. They also called on the FTC to provide additional transparency into its ongoing investigations to ensure that consumers are protected from harmful conduct relating to digital markets.
Klobuchar has also been an outspoken voice in opposing anticompetitive mergers and has introduced legislation to help prevent them. In June, Klobuchar and Senator Chuck Grassley (R-IA) introduced new bipartisan legislation to ensure that antitrust authorities have the resources they need to protect consumers. The Merger Filing Fee Modernization Act would update merger filing fees for the first time since 2001, lower the burden on small and medium-sized businesses, ensure larger deals bring in more income, and raise enough revenue so that taxpayer dollars aren’t required to fund necessary increases to agency enforcement budgets.
Klobuchar leads the Consolidation Prevention and Competition Promotion Act to restore the original purpose of the Clayton Antitrust Act to promote competition and protect American consumers. The bill would strengthen the current legal standard to help stop harmful consolidation that may materially lessen competition. It would clarify that a merger could violate the statute if it gives a company “monopsony” power to unfairly lower the prices it pays or wages it offers because of lack of competition among buyers or employers. The bill further strengthens the law to guard against harmful “mega-mergers” and deals that substantially increase market concentration, shifting the burden to the merging companies to prove that their consolidation does not harm competition. She also introduced the Merger Enforcement Improvement Act which would update existing law to reflect the current economy and provide agencies with better information post-merger to ensure that merger enforcement is meeting its goals. This bill would modernize antitrust enforcement by improving the agencies’ ability to assess the impact of merger settlements, requiring studies of new issues, adjusting merger filing fees to reflect the 21st century economy, and providing adequate funding for antitrust agencies to meet their obligations to protect American consumers. She introduced both bills in February.
###
Permalink: https://www.klobuchar.senate.gov/public/index.cfm/2019/8/klobuchar-introduces-legislation-to-crack-down-on-monopolies-that-violate-antitrust-law
From Digital Music News:
In a rapid jury deliberation, Katy Perry, Capitol/UMG, Dr. Luke, Max Martin, Juicy J, and others have been hit with a $2.7 million fine.
That was fast.
After just two days of deliberations, a federal jury in California has ordered damages of $2.7 million against Katy Perry, her label, associated songwriters, and other collaborators on “Dark Horse”. The fine was calculated from a top-line figure of $41 million, with Capitol Records arguing that a large percentage of that revenue was utilized for promotional, marketing, production, and other costs.
The defending party of Katy Perry, Dr. Luke, Max Martin, Cirkut, Sarah Hudson, guest performer/rapper Juicy J, and Capitol Records (UMG) were saddled with the fine. Additionally, the jury ruled that publishing company Kasz Money Inc., Kobalt Music Publishing America Inc. and Warner Bros. Music Corp. would also share in the damages assessment.
The $2.7 million penalty amounts to roughly 6.5% of the initial $41 million ask. Still, that’s little consolation to Perry and the defendants, especially given the controversial nature of the infringement ruling.
The ruling, handed down earlier this week, found substantial, willing infringement involving the 2008 Christian rap song, “Joyful Noise,” as performed by Flame (aka Marcus Gray). The ruling was unanimous, despite testimony from multiple experts and musicologists that called the similarities ‘coincidental’ and involving ‘the basic building blocks of music’.
A quick comparison of the tracks reveals some striking similarities, though it’s entirely unclear if the ‘infringement’ was merely coincidental. The melodic loop shared by both tracks is relatively simple, and the resulting decision is heightening fears of increased music copyright trolling ahead.
In terms of who pays what, Katy Perry was ordered to pay roughly $550,000 of the $2.7 million fine, while Dr. Luke was ordered to pay nearly $61,000. Capitol Records was ordered to pay $1.2 million, while Warner was charged a relatively paltry $29,000.
The remaining fine would be distributed among the other defendants.
The 15-page damages decision was entered into the broader Gray et al. v. Perry et al., case number 2:15-cv-05642, deliberated in the U.S. District Court for the Central District of California.
From https://www.digitalmusicnews.com/2019/08/01/katy-perry-millions-damages/
In a rapid jury deliberation, Katy Perry, Capitol/UMG, Dr. Luke, Max Martin, Juicy J, and others have been hit with a $2.7 million fine.
That was fast.
After just two days of deliberations, a federal jury in California has ordered damages of $2.7 million against Katy Perry, her label, associated songwriters, and other collaborators on “Dark Horse”. The fine was calculated from a top-line figure of $41 million, with Capitol Records arguing that a large percentage of that revenue was utilized for promotional, marketing, production, and other costs.
The defending party of Katy Perry, Dr. Luke, Max Martin, Cirkut, Sarah Hudson, guest performer/rapper Juicy J, and Capitol Records (UMG) were saddled with the fine. Additionally, the jury ruled that publishing company Kasz Money Inc., Kobalt Music Publishing America Inc. and Warner Bros. Music Corp. would also share in the damages assessment.
The $2.7 million penalty amounts to roughly 6.5% of the initial $41 million ask. Still, that’s little consolation to Perry and the defendants, especially given the controversial nature of the infringement ruling.
The ruling, handed down earlier this week, found substantial, willing infringement involving the 2008 Christian rap song, “Joyful Noise,” as performed by Flame (aka Marcus Gray). The ruling was unanimous, despite testimony from multiple experts and musicologists that called the similarities ‘coincidental’ and involving ‘the basic building blocks of music’.
A quick comparison of the tracks reveals some striking similarities, though it’s entirely unclear if the ‘infringement’ was merely coincidental. The melodic loop shared by both tracks is relatively simple, and the resulting decision is heightening fears of increased music copyright trolling ahead.
In terms of who pays what, Katy Perry was ordered to pay roughly $550,000 of the $2.7 million fine, while Dr. Luke was ordered to pay nearly $61,000. Capitol Records was ordered to pay $1.2 million, while Warner was charged a relatively paltry $29,000.
The remaining fine would be distributed among the other defendants.
The 15-page damages decision was entered into the broader Gray et al. v. Perry et al., case number 2:15-cv-05642, deliberated in the U.S. District Court for the Central District of California.
From https://www.digitalmusicnews.com/2019/08/01/katy-perry-millions-damages/
State lawsuit charging generic pharma price fixing
In May, Connecticut Attorney General William Tong led a 44-state coalition in a lawsuit against Teva Pharmaceuticals and 19 of the nation's largest generic drug manufacturers alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs. The lawsuit, filed in U.S. District Court for the District of Connecticut, also names 15 individual senior executive defendants at the heart of the conspiracy who were responsible for sales, marketing, pricing and operations. The drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded healthcare programs like Medicare and Medicaid, and individuals who must pay artificially-inflated prices for their prescriptions drugs.
The complaint alleges that Teva, Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs. The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments, and classes, including statins, ace inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives, non-steroidal anti-inflammatory drugs, and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. In some instances, the coordinated price increases were over 1,000 percent.
The complaint lays out an interconnected web of industry executives where these competitors met with each other during industry dinners, "girls nights out", lunches, cocktail parties, golf outings and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements. Throughout the complaint, defendants use terms like "fair share," "playing nice in the sandbox," and "responsible competitor" to describe how they unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion.
The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.
The lawsuit complaint is here:
https://portal.ct.gov/-/media/AG/Downloads/GDMS%20Complaint%2051019%20FINAL%20REDACTED%20PUBLIC%20VERSIONpdf
In May, Connecticut Attorney General William Tong led a 44-state coalition in a lawsuit against Teva Pharmaceuticals and 19 of the nation's largest generic drug manufacturers alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs. The lawsuit, filed in U.S. District Court for the District of Connecticut, also names 15 individual senior executive defendants at the heart of the conspiracy who were responsible for sales, marketing, pricing and operations. The drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded healthcare programs like Medicare and Medicaid, and individuals who must pay artificially-inflated prices for their prescriptions drugs.
The complaint alleges that Teva, Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs. The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments, and classes, including statins, ace inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives, non-steroidal anti-inflammatory drugs, and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. In some instances, the coordinated price increases were over 1,000 percent.
The complaint lays out an interconnected web of industry executives where these competitors met with each other during industry dinners, "girls nights out", lunches, cocktail parties, golf outings and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements. Throughout the complaint, defendants use terms like "fair share," "playing nice in the sandbox," and "responsible competitor" to describe how they unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion.
The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.
The lawsuit complaint is here:
https://portal.ct.gov/-/media/AG/Downloads/GDMS%20Complaint%2051019%20FINAL%20REDACTED%20PUBLIC%20VERSIONpdf
Senator Mark Warner on concern about Chinese dominance of 5G telecom technology and other tech, and global security
On June 17, 2019, Senator Mark Warner (D-VA), vice chair of the Senate Intelligence Committee, spoke with PBS' Judy Woodruff about China’s 5G technological advances, and global security. Video is at https://www.c-span.org/video/?461800-1/senator-mark-warner-discusses-china-5g-technology-global-security&start=171
At approximately 3 minutes into the video, Senator Warner begins discussion of the national security and commercial threat posed by China and its centralized government control over technology and technology investment. The Senator uses 5G telecom as an example of the danger that the Chinese government will be able to use Chinese telecom equipment for spying in the US. Also, he uses 5G telecom as an example that the Chinese might take control of world-wide technological standards for telecom and other high tech products that have been the province of the US and other Western countries since the days of Kennedy and Sputnik.
Warner suggests several policy approaches for the US Government and industry. Warner’s proposals suggest a US government industrial policy – investing in technology research and supporting and protecting US and other Western companies rather than Chinese companies. That is quite different than a policy of supporting free global competition and letting the chips fall where they may with regard to which companies win and which companies lose competitive battles, without government intervention. Of course, Warner may be right about the need for US government support for US companies to counter the malign role of the Chinese government in support of Chinese companies. But the consequences of his proposals for usual competition policies are enormous.
Following are a few somewhat corrected excerpts from the machine made transcript, which contains lots of errors. The results are rough, and an imperfect substitute for listening to Warner in the video:
At 00:03:03
I HAVE TO SAY THAT IN THE LAST THREE OF FOUR YEARS AND MANY CLASSIFIED BRIEFINGS LATER, I HAVE FUNDAMENTALLY SHIFTED MY VIEWPOINTS. I BELIEVE THE PRESIDENT XI STARTED WITH THE MAJOR CONSOLIDATION OF POWER IN 2015 AND 2016 AND WE HAD COMMUNIST PARTY DOMINANCE IN CHINA ACROSS ALL BUSINESS SOCIETY, AND MILITARY. AND HE IS NOW USING THE CONSOLIDATED POWER TO BRING ABOUT BOTH STATE AND CIVIL SOCIETY TO ACTUALLY PROPOSE A ROLE FOR CHINA THAT WOULD DOMINATE THE WORLD. THAT DOMINATION WOULD LEAD TO DIMINISHMENT OF U.S. POWER AND INFLUENCE. THE CHINESE GOVERNMENT USES ALL THE TRADITIONAL TOOLS OF THE STATE TO EXERT INFLUENCE.
THERE IS tAGGRESSIVE DEPLOYMENT OF ESPIONAGE TO STEAL SECRETS. WE’VE ALSO SEEN FROM CHINA MORE CREATIVE MECHANISMS. IT TAKES ADVANTAGE OF THE AUTHORITARIAN MODEL TO FORCE CHINESE COMPANIES, RESEARCHERS AND OTHERS TO HACK ON BEHALF OF THE COMMONEST PARTY. ALL OF THIS HAS SET THE STAGE FOR THE CHINESE GOVERNMENT TO AGGRESSIVELY DISPLAY EVERY LEVER OF POWER TO SERVICE THE STATE AND THE SAME TIME EXPLOIT THE OPENNESS OF OUR SOCIETY TO TAKE AN ECONOMIC ADVANTAGE.
I BELIEVE OUR BEEF IS WITH THE COMMUNIST PARTY IN CHINA.
WHERE DO WE GO FROM HERE. FIRST WITH A FOCUS ON TECHNOLOGY. I WOULD ARGUE THAT SPUTNIK WAS THE LAST MOMENT WHEN AMERICA'S TECHNOLOGICAL PRIMACY WAS REALLY QUESTIONED. AND IT JOLTED AMERICA INTO ACTION AND KENNEDY TO PUT A MAN ON THE MOON. AND WE CHANGED OUR ACADEMIC INSTITUTIONS, WE CHANGED OUR RESEARCH AREAS, WE CHANGED THE MILITARY-INDUSTRIAL COMPLEX. AND WE WERE SUCCESSFUL. AND I WOULD ARGUE THAT THAT MOMENT IN TIME EVERY BIG MAJOR TECHNOLOGICAL ADVANCEMENT WITH THE TRANSISTOR, COMPUTING, TILT COMMUNICATIONS, WHETHER IT WAS AROUND THE INTERNET, WHETHER IT IS AROUND SOCIAL MEDIA, ALL OF THESE INNOVATIONS HAVE BEEN AMERICAN. OR WE ENDED UP SETTING THE STANDARDS AND BY SETTING THE STANDARDS AND BY HAVING THE WORLD'S LARGEST ECONOMIC POWER WE HAD A DEFAULT POSITION. WE HAD A SINGLE GOVERNANCE ROLE AROUND A LOT OF THE TECHNOLOGY.
I DON'T THINK IN MANY WAYS THAT WE AS A NATION APPRECIATED ALL OF THE ECONOMIC POLITICAL AND SOCIAL BENEFITS THAT OUR COUNTRY ENJOYED BY BEING A TECHNOLOGY CENTER AND A STANDARD SETTER. IN MANY WAYS, THAT IS ALL UP FOR GRABS NOW. I SEE THIS FIRSTHAND IN THE COMPETITION FOR 5G. AND THOSE OF YOU WHO ARE NOT TECHNOLOGY NERDS IN THE ROOM, IT IS EQUIVALENT IN THE WIRELESS WORLD OF MOVING FROM RADIO TO TELEVISION, AN ENORMOUS OPPORTUNITY.
CHINA IS PROVIDING EQUIPMENT VENDORS WITH 120% MORE FINANCING, FLOODING THE ZONE WITH ENGINEERS IN TERMS OF THE STANDARD-SETTING. AND IN MANY WAYS WHAT IS HAPPENING IN 5G COULD VERY WELL HAPPEN IN ARTIFICIAL INTELLIGENCE AND IN QUANTUM COMPUTING AND OTHERS. IF AMERICA DOES NOT TRY TO REASSERT INVESTMENT AND TECHNOLOGY LEADERSHIP AND WILLINGNESS TO SET THE STANDARDS.
WE NEED TO SOUND THE ALARM, OVER THE LAST YEAR BECAUSE I'VE HAD SO MUCH EVIDENCE AND IT'S BECOME OVERWHELMING. WE ARE NOT DOING OUR JOB IF WE DON'T FIND WAYS TO DECLASSIFY THIS INFORMATION AND GET IT OUT.
SECOND, WE NEED A SHORT-TERM STRATEGY. I WOULD ACKNOWLEDGE THAT THE TRUMP ADMINISTRATION HAS DONE THE RIGHT THING IN SAYING THE STATUS QUO IS NOT WORKING. I WOULD ARGUE THAT THE CHALLENGES OF EMERGING CHINA HAVE BEEN NOT ONLY COUNTER TO THE UNITED STATES BUT FRANKLY COUNTER TO ALL THE WEST. THERE WAS A MOMENT IN TIME WHERE WE COULD'VE BUILT A GRAND INTERNATIONAL COALITION. YOU GOTTA PLAY BY THE RULES AND THINK OF BUILDING THE GRAND COALITION.
FINALLY WE NEED A LONG-TERM STRATEGY. THE LONG-TERM STRATEGY REALLY GOES BACK TO WHAT KIND OF INVESTMENT WE ARE PREPARED TO MAKE IN THIS COUNTRY IN RESEARCH AND DEVELOPMENT. THAT IS $500 BILLION CHINA IS INVESTING IN 5G ARTIFICIAL INTELLIGENCE, AND A HOST OF OTHER AREAS. AGAIN, UNDER PRESIDENT XI JINPING, THE TREND IS THEY WILL DOMINATE. WE NEED TO MAKE THE RESEARCH INVESTMENTS. IF YOU GO BACK, THE US ACCOUNTED FOR 69% OF ANNUAL GLOBAL R&D AND WERE NOW DOWN TO 29%, CHINA IS ON AN UPWARD TREND, AND ON THAT TREND CHINA WILL PASS THE UNITED STATES AND ALL EXPECTATIONS BY 2020. I THINK WE CAN GET THIS RIGHT.
Posting by Dn Allen Resnikoff, who is fully responsible for the content
Chinese competition in quantum mechanics, an important future technology
In the global race to develop quantum technology, the U.S. is competing in an increasingly crowded field. China is a leader . See PBS NewsHour segment at https://www.youtube.com/watch?v=IJijqF8tkTU
In the global race to develop quantum technology, the U.S. is competing in an increasingly crowded field. China is a leader . See PBS NewsHour segment at https://www.youtube.com/watch?v=IJijqF8tkTU
WSJ on the political swamp and MiMedx
MiMedx drove sales of its tissue grafts through improper means to the Department of Veterans Affairs and other clients, according to former employees. Gretchen Morgenson of The Wall Street Journal investigates the alleged fraud and the help the company got from its friends in government.
https://www.wsj.com/articles/va-bans-injectable-wound-care-products-from-mimedx-and-other-companies-for-many-uses-11560529012#
MiMedx drove sales of its tissue grafts through improper means to the Department of Veterans Affairs and other clients, according to former employees. Gretchen Morgenson of The Wall Street Journal investigates the alleged fraud and the help the company got from its friends in government.
https://www.wsj.com/articles/va-bans-injectable-wound-care-products-from-mimedx-and-other-companies-for-many-uses-11560529012#
Erik Hovenkamp explains FTC v. Qualcomm
TC v. Qualcomm: New Frontiers in the Antitrust-IP InterfaceBy Erik Hovenkamp (Harvard)
The Federal Trade Commission recently scored a substantial victory in its antitrust suit against Qualcomm. The case represents a novel confluence of standard-setting and IP licensing issues with bedrock antitrust subjects: tying and exclusive dealing. It also takes a surprising turn in resuscitating the long-dormant doctrine of the antitrust “duty to deal.” In this short essay, I review and evaluate the court’s decision in FTC v. Qualcomm. The analysis of Qualcomm’s exclusive dealing is sound and very likely correct. However, the court’s duty-to-deal analysis sits on shakier ground, omitting consideration of potential immunity under the Patent Act and sidestepping thorny questions on the appropriate source of law.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3397312
TC v. Qualcomm: New Frontiers in the Antitrust-IP InterfaceBy Erik Hovenkamp (Harvard)
The Federal Trade Commission recently scored a substantial victory in its antitrust suit against Qualcomm. The case represents a novel confluence of standard-setting and IP licensing issues with bedrock antitrust subjects: tying and exclusive dealing. It also takes a surprising turn in resuscitating the long-dormant doctrine of the antitrust “duty to deal.” In this short essay, I review and evaluate the court’s decision in FTC v. Qualcomm. The analysis of Qualcomm’s exclusive dealing is sound and very likely correct. However, the court’s duty-to-deal analysis sits on shakier ground, omitting consideration of potential immunity under the Patent Act and sidestepping thorny questions on the appropriate source of law.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3397312
In case you hadn't noticed: This past December the USDA released the first national disclosure requirements for foods that have been altered in a way that doesn’t occur naturally.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-27283.pdf
The federal statute that authorizes the requirements also precludes competing State requirements.
CNBC explains that he guidelines, which use the term “bioengineered” instead of the more commonly used “genetically modified,” allow disclosure of bioengineered ingredients in several formats: in text, a symbol, a digital link printed on packaging or text message.
Companies can use a QR code with a statement like: “Scan here for more food information.” After scanning the code, consumers will be brought to a website where genetically modified foods will be disclosed. If a company provides a digital link disclosure, it must also provide a telephone number consumers can call for information. Critics say companies that use the QR code should be required to include the word “bioengineered” in their statement.
Advocates of multiple labeling options say it will be easier for companies to comply with the guidelines, but opponents fear it will confuse consumers or restrict access for those without smartphones.
https://www.cnbc.com/2018/12/20/usda-lays-out-the-rules-for-labeling-for-genetically-modified-foods.html
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-27283.pdf
The federal statute that authorizes the requirements also precludes competing State requirements.
CNBC explains that he guidelines, which use the term “bioengineered” instead of the more commonly used “genetically modified,” allow disclosure of bioengineered ingredients in several formats: in text, a symbol, a digital link printed on packaging or text message.
Companies can use a QR code with a statement like: “Scan here for more food information.” After scanning the code, consumers will be brought to a website where genetically modified foods will be disclosed. If a company provides a digital link disclosure, it must also provide a telephone number consumers can call for information. Critics say companies that use the QR code should be required to include the word “bioengineered” in their statement.
Advocates of multiple labeling options say it will be easier for companies to comply with the guidelines, but opponents fear it will confuse consumers or restrict access for those without smartphones.
https://www.cnbc.com/2018/12/20/usda-lays-out-the-rules-for-labeling-for-genetically-modified-foods.html
From the Commonwealth Fund
Can Germany’s Approach to Pricing New Drugs Work in the U.S.?
June 13, 2019
The German and U.S. health insurance systems are similar in many ways, but Germany has substantially lower drug prices. In a new To the Point post, James C. Robinson of the University of California, Berkeley, and colleagues look at how Germany prices drugs and consider whether its method could work here.
Prices for new drugs in Germany are negotiated between an umbrella organization representing insurers and the drug maker, and there is strong public and political pressure for the two parties to reach agreement.
For such a system to work in the U.S., the authors say assessments of new drugs’ incremental clinical benefits would be essential. That information would in turn be used to negotiate prices, with a “recognition by both buyers and sellers that the process is fair, financially sustainable, and supportive of continued investments in pharmaceutical innovation.”
Read the post https://www.commonwealthfund.org/blog/2019/how-drug-prices-are-negotiated-germany
Can Germany’s Approach to Pricing New Drugs Work in the U.S.?
June 13, 2019
The German and U.S. health insurance systems are similar in many ways, but Germany has substantially lower drug prices. In a new To the Point post, James C. Robinson of the University of California, Berkeley, and colleagues look at how Germany prices drugs and consider whether its method could work here.
Prices for new drugs in Germany are negotiated between an umbrella organization representing insurers and the drug maker, and there is strong public and political pressure for the two parties to reach agreement.
For such a system to work in the U.S., the authors say assessments of new drugs’ incremental clinical benefits would be essential. That information would in turn be used to negotiate prices, with a “recognition by both buyers and sellers that the process is fair, financially sustainable, and supportive of continued investments in pharmaceutical innovation.”
Read the post https://www.commonwealthfund.org/blog/2019/how-drug-prices-are-negotiated-germany
State AGs File to Block Merger of T-Mobile and Sprint
CA press release:
SACRAMENTO - California Attorney General Xavier Becerra, co-leading with New York a coalition of 10 attorneys general, today filed a lawsuit to block the proposed merger of telecommunications companies T-Mobile and Sprint. The companies – two of only four national wireless providers – offer wireless phone services to over 13 million California consumers. The lawsuit challenges the acquisition of Sprint by T-Mobile because it would lead to higher prices and fewer choices for consumers, particularly low-income subscribers of the companies’ services.
“Although T-Mobile and Sprint may be promising faster, better, and cheaper service with this merger, the evidence weighs against it,” said Attorney General Becerra. “This merger would hurt the most vulnerable Californians and result in a compressed market with fewer choices and higher prices. Today, along with New York and eight other partner states, we’ve filed a lawsuit to block this merger and protect the residents of our state.”
“When it comes to corporate power, bigger isn’t always better,” said Attorney General James. “The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country. That’s why we are going to court to stop this merger and protect our consumers, because this is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”
The current market includes four national network providers: T-Mobile, Sprint, Verizon and AT&T. Sprint and T-Mobile’s proposed union would consolidate these four provider options into three, by combining T-Mobile and Sprint’s market shares. In certain areas of California, the market share of the merged firm would be over 50 percent. Moreover, Sprint and T-Mobile have high market shares among low-income populations.
They would become the dominant network provider for prepaid mobile services, which are available without a credit check. Any merger would significantly hurt these communities by diminishing competition and increasing costs to consumers.
This is T-Mobile’s third merger attempt. Each previous attempt has been blocked or abandoned due to opposition from the government based on the same concerns laid out in the lawsuit filed today. In this attempt, T-Mobile and Sprint argue that the merger would allow them to more quickly roll out a next-generation 5G network and more broadly increase service to rural customers. However the companies are already planning to roll out 5G networks, and T-Mobile is already planning increased rural coverage, even without the merger.
A copy of the complaint can be found here, https://oag.ca.gov/system/files/attachments/press-docs/t-mobile-sprint-complaint-redacted-case-19-cv-5434.pdf
CA press release:
SACRAMENTO - California Attorney General Xavier Becerra, co-leading with New York a coalition of 10 attorneys general, today filed a lawsuit to block the proposed merger of telecommunications companies T-Mobile and Sprint. The companies – two of only four national wireless providers – offer wireless phone services to over 13 million California consumers. The lawsuit challenges the acquisition of Sprint by T-Mobile because it would lead to higher prices and fewer choices for consumers, particularly low-income subscribers of the companies’ services.
“Although T-Mobile and Sprint may be promising faster, better, and cheaper service with this merger, the evidence weighs against it,” said Attorney General Becerra. “This merger would hurt the most vulnerable Californians and result in a compressed market with fewer choices and higher prices. Today, along with New York and eight other partner states, we’ve filed a lawsuit to block this merger and protect the residents of our state.”
“When it comes to corporate power, bigger isn’t always better,” said Attorney General James. “The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country. That’s why we are going to court to stop this merger and protect our consumers, because this is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”
The current market includes four national network providers: T-Mobile, Sprint, Verizon and AT&T. Sprint and T-Mobile’s proposed union would consolidate these four provider options into three, by combining T-Mobile and Sprint’s market shares. In certain areas of California, the market share of the merged firm would be over 50 percent. Moreover, Sprint and T-Mobile have high market shares among low-income populations.
They would become the dominant network provider for prepaid mobile services, which are available without a credit check. Any merger would significantly hurt these communities by diminishing competition and increasing costs to consumers.
This is T-Mobile’s third merger attempt. Each previous attempt has been blocked or abandoned due to opposition from the government based on the same concerns laid out in the lawsuit filed today. In this attempt, T-Mobile and Sprint argue that the merger would allow them to more quickly roll out a next-generation 5G network and more broadly increase service to rural customers. However the companies are already planning to roll out 5G networks, and T-Mobile is already planning increased rural coverage, even without the merger.
A copy of the complaint can be found here, https://oag.ca.gov/system/files/attachments/press-docs/t-mobile-sprint-complaint-redacted-case-19-cv-5434.pdf
Sprint and T-Mobile Merger Approval, Said to Be Near, Could Undercut Challenge by States
The Justice Department is pushing Sprint and T-Mobile to sell Boost Mobile and wireless frequencies, people familiar with a potential agreement said.CreditBrittainy Newman/The New York Times
By Cecilia Kang
If such an arrangement is approved, it could weaken an effort by attorneys general from nine states and the District of Columbia to halt the blockbuster deal with a suit that they filed this week.
From:https://www.nytimes.com/2019/06/14/technology/t-mobile-sprint-merger.html?searchResultPosition=3
The Justice Department is pushing Sprint and T-Mobile to sell Boost Mobile and wireless frequencies, people familiar with a potential agreement said.CreditBrittainy Newman/The New York Times
By Cecilia Kang
- June 14, 2019
If such an arrangement is approved, it could weaken an effort by attorneys general from nine states and the District of Columbia to halt the blockbuster deal with a suit that they filed this week.
From:https://www.nytimes.com/2019/06/14/technology/t-mobile-sprint-merger.html?searchResultPosition=3
Sports gambling raises possible antitrust issues concerning league control of sports data
Excerpt from Forbes:
Now, with the rapid advent of new U.S. markets for sports gambling, certain U.S. professional sports leagues may find themselves facing yet another antitrust challenge, this one related to the centralization of purported “game data rights” and efforts to foreclose non-league parties from competing to collect and resell game-related data.
There are two sections of antitrust law under which the U.S. professional sports leagues have historically faced challenges. Section 1 of the Sherman Act, in pertinent part, states that “every contract, combination … or conspiracy, in the restraint of trade … is declared to be illegal.” Meanwhile, Section 2 of the Sherman Act states that “every person who shall monopolize, or attempt to monopolize …. shall be deemed guilty of a felony.”
The recent practices of Major League Baseball and the National Basketball Association to centralize “ownership” of sports league data on the league (rather than team) level and then attempt to require their business partners to use only their data (and not data collected by any third party) raises novel legal questions under both sections of the Sherman Act.
Continue Reading…https://www.forbes.com/sites/marcedelman/2019/06/10/sports-data-policies-could-provide-next-big-antitrust-challenge-for-pro-sports-leagues/#526481d83284
Excerpt from Forbes:
Now, with the rapid advent of new U.S. markets for sports gambling, certain U.S. professional sports leagues may find themselves facing yet another antitrust challenge, this one related to the centralization of purported “game data rights” and efforts to foreclose non-league parties from competing to collect and resell game-related data.
There are two sections of antitrust law under which the U.S. professional sports leagues have historically faced challenges. Section 1 of the Sherman Act, in pertinent part, states that “every contract, combination … or conspiracy, in the restraint of trade … is declared to be illegal.” Meanwhile, Section 2 of the Sherman Act states that “every person who shall monopolize, or attempt to monopolize …. shall be deemed guilty of a felony.”
The recent practices of Major League Baseball and the National Basketball Association to centralize “ownership” of sports league data on the league (rather than team) level and then attempt to require their business partners to use only their data (and not data collected by any third party) raises novel legal questions under both sections of the Sherman Act.
Continue Reading…https://www.forbes.com/sites/marcedelman/2019/06/10/sports-data-policies-could-provide-next-big-antitrust-challenge-for-pro-sports-leagues/#526481d83284
A nearly decade-long legal battle over the harm inflicted on tens of thousands of women by surgically implanted pelvic mesh is moving away from manufacturers and toward the lawyers who helped the women bring their cases.
In recent weeks, women who received some of roughly $8 billion in settlements have sued their lawyers, accusing them of improperly enriching themselves with excessive fees or stretching themselves too thin to properly handle the pelvic mesh cases.
A potential class action lawsuit filed on Monday in state court in New Jersey contends that the 40 percent fee a group of law firms charged about 1,400 clients violated state law, which caps fees in personal injury lawsuits at about 33 percent. A separate suit filed in federal court in Houston on Thursday alleges that another group of firms took on so many cases that they missed filing deadlines for hundreds of women, potentially reducing the value of their claims against the mesh manufacturers to virtually nothing.
From: https://www.nytimes.com/2019/06/14/business/pelvic-mesh-surgery-litigation.html
In recent weeks, women who received some of roughly $8 billion in settlements have sued their lawyers, accusing them of improperly enriching themselves with excessive fees or stretching themselves too thin to properly handle the pelvic mesh cases.
A potential class action lawsuit filed on Monday in state court in New Jersey contends that the 40 percent fee a group of law firms charged about 1,400 clients violated state law, which caps fees in personal injury lawsuits at about 33 percent. A separate suit filed in federal court in Houston on Thursday alleges that another group of firms took on so many cases that they missed filing deadlines for hundreds of women, potentially reducing the value of their claims against the mesh manufacturers to virtually nothing.
From: https://www.nytimes.com/2019/06/14/business/pelvic-mesh-surgery-litigation.html
USDOJ's Jeff Wilder suggests possible use of monopolization law to challenge serial mergers. (The suggestion may be relevant to Facebook)
On March 19, 2019, House Antitrust Subcommittee Chairman David N. Cicilline (RI-01) wrote to the Federal Trade Commission asking that they open an investigation into whether Facebook has broken antitrust laws. He pointed out, among other things, that since its founding, Facebook has acquired over 75 companies. Two of the most significant purchases were Instagram, which Facebook bought in 2012 for $1 billion, and WhatsApp, which Facebook purchased in 2014 for $19 billion. Through these acquisitions, Facebook now owns three of the top four, and four of the top eight, social media apps.
It is a question whether usual Clayton Act Section 7 merger theories work well where there are a series of relatively small mergers.
In an on-the-record speech delivered on June 10, 2019, Jeffrey M. Wilder, USDOJ Acting Deputy Assistant Attorney General for Antitrust, suggested the possibility of enforcers using Sherman Act monopolization law where there is a series of mergers that, taken together, lead to great market power.
The history of the connection between Sherman Act monopolization law and Clayton Act merger law is an interesting one. See Anthony D. Schlesinger, Merger Litigation under the Sherman Act - Choice or Echo, 18 Sw L.J. 712 (1964) https://scholar.smu.edu/smulr/vol18/iss4/5
There is some historical basis for applying monopolization theories apply to vertical mergers that may greatly enhance a firms market power. See United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586, 606-08 (1957)(condemned vertical merger on the theory that by acquiring a major purchaser of its fabrics and automobile finishes, Dupont would obtain unfair advantage over competing suppliers); see also Ford Motor Co. v. United States, 405 U.S. 562, 573-75 (1972) (condemning Ford’s acquisition of Autolite spark plug).
The history of using monopolization law in merger cases may be complex, but Wilder’s suggestion is intriguing: that Sherman Act monopolization law be considered as an enforcement tool where there is a series of mergers that lead to great market power. The suggestion seems relevant to the Ciliciline points about Facebook.
Comment by Don Allen Resnikoff, who takes full responsibility for the content
On March 19, 2019, House Antitrust Subcommittee Chairman David N. Cicilline (RI-01) wrote to the Federal Trade Commission asking that they open an investigation into whether Facebook has broken antitrust laws. He pointed out, among other things, that since its founding, Facebook has acquired over 75 companies. Two of the most significant purchases were Instagram, which Facebook bought in 2012 for $1 billion, and WhatsApp, which Facebook purchased in 2014 for $19 billion. Through these acquisitions, Facebook now owns three of the top four, and four of the top eight, social media apps.
It is a question whether usual Clayton Act Section 7 merger theories work well where there are a series of relatively small mergers.
In an on-the-record speech delivered on June 10, 2019, Jeffrey M. Wilder, USDOJ Acting Deputy Assistant Attorney General for Antitrust, suggested the possibility of enforcers using Sherman Act monopolization law where there is a series of mergers that, taken together, lead to great market power.
The history of the connection between Sherman Act monopolization law and Clayton Act merger law is an interesting one. See Anthony D. Schlesinger, Merger Litigation under the Sherman Act - Choice or Echo, 18 Sw L.J. 712 (1964) https://scholar.smu.edu/smulr/vol18/iss4/5
There is some historical basis for applying monopolization theories apply to vertical mergers that may greatly enhance a firms market power. See United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586, 606-08 (1957)(condemned vertical merger on the theory that by acquiring a major purchaser of its fabrics and automobile finishes, Dupont would obtain unfair advantage over competing suppliers); see also Ford Motor Co. v. United States, 405 U.S. 562, 573-75 (1972) (condemning Ford’s acquisition of Autolite spark plug).
The history of using monopolization law in merger cases may be complex, but Wilder’s suggestion is intriguing: that Sherman Act monopolization law be considered as an enforcement tool where there is a series of mergers that lead to great market power. The suggestion seems relevant to the Ciliciline points about Facebook.
Comment by Don Allen Resnikoff, who takes full responsibility for the content
Excerpts from NYT article:
Save Our Food. Free the Seed.
Behemoth agrochemical companies are failing to deliver what farmers need to grow and what people want to eat.
By Dan Barber
Just 50 years ago, some 1,000 small and family-owned seed companies were producing and distributing seeds in the United States; by 2009, there were fewer than 100. Thanks to a series of mergers and acquisitions over the last few years, four multinational agrochemical firms — Corteva, ChemChina, Bayer and BASF — now control over 60 percent of global seed sales.
Big Seed keeps getting bigger, doubling down on a system of monocultures and mass distribution.
The problem is not that these seed corporations are too big to fail. It’s that they are failing to deliver what growers need to grow and what we want to eat.
The knockout punch for farmer-controlled seed was the utility patent. In a landmark (and utterly bananas) decision in 1980, the Supreme Court ruled in favor of allowing patents on living organisms. It wasn’t long before the same protections were extended to crops. New advances in genetic engineering supported the argument, with companies claiming seeds as proprietary inventions rather than part of our shared commons. Utility patents restricted farmers’ freedom to save and exchange seed and breeders’ right to use the germplasm for research.
The slow march of seed consolidation suddenly turned into a sprint. Chemical and pharmaceutical companies with no historical interest in seed bought small regional and family-owned seed companies. Targeting cash crops like corn and soy, these companies saw seeds as part of a profitable package: They made herbicides and pesticides, and then engineered the seeds to produce crops that could survive that drench of chemicals. The same seed companies that now control more than 60 percent of seed sales also sell more than 60 percent of the pesticides. Not a bad business.
More than 90 percent of the 178 million acres of corn and soybeans planted last year in the United States were sown with genetically engineered seeds. It’s a vision as dispiriting as it is unappetizing.
Vegetables have been spared some of this genetic tinkering but are increasingly victim to the same aggressive corporate seed environment. Last year the pharmaceutical company Bayer acquired the world’s largest vegetable seed company, Monsanto.
For these megacompanies, capturing a large share of the vegetable seed market means capturing patentable genetics.
Full article: https://www.nytimes.com/interactive/2019/06/07/opinion/sunday/dan-barber-seed-companies.html?searchResultPosition=1
From USPIRG consumer blog:
Will New York catch up to Mississippi in protecting consumers?
Posted: 07 Jun 2019 07:03 AM PDT
by Jeff Sovern
Many states allow their consumers to sue misbehaving companies for unfair practices, including red and purple states like Mississippi, Georgia, North Carolina, Tennessee and West Virginia, states that we normally don't think of as being in the vanguard of consumer protection. This power can be important in protecting consumers. For example, the CFPB used its own ability to stop unfair practices when it pursued Wells Fargo for opening unauthorized accounts, rather than its power to block deception. But New York has lagged behind these states, as well as its neighbors like Connecticut, Pennsylvania, and Massachusetts, in leaving unfairness out of its UDAP statute. Thus, New Yorkers could not have sued Wells Fargo for unfair conduct in opening unauthorized accounts.
But now that may change. The New York legislature is considering a bill to put the U in its UDAP statute. The bill would also eliminate New York's requirement that plaintiffs in UDAP cases demonstrate that the offending conduct is "consumer-oriented," a requirement that no other state has adopted and that does not even appear in New York's statute; instead it was added by a court that evidently eschewed textualism as a method of statutory interpretation.
Unfortunately, but predictably, the bill is encountering heavy industry opposition. One argument made against the bill is that it "will open the flood gates for litigation." But many other states permit consumers to sue for unfair conduct and don't require consumer-oriented conduct and have not experienced a flood of litigation (even assuming there is something wrong with a flood of litigation against bad actors). The items I have listed merely bring the statute into conformity with other states.
The statute currently provides for only $50 in statutory damages. As a number of studies have demonstrated, consumers almost never bring claims for $50. It just isn't worth it to them. So preserving $50 as the amount of statutory damages would be essentially the same as having no statutory damages. The bill addresses this problem by increasing the amount of statutory damages to $2,000, an amount which is more likely to be enough to cause consumers to enforce the statute, though still less than the red state of Kansas, which allows statutory damages of fives times as much, or 200 times what the New York statute currently provides. Of course, businesses object to this too: they prefer that the amount be so low as to render private enforcement virtually nonexistent in the absence of large actual damages.
New York has a chance to offer its consumers not just the protection they need, but that they deserve. It should leap at the opportunity.
From USPIRG consumer blog:
Senators ask CFPB to reconsider debt collection proposal
Posted: 07 Jun 2019 06:04 AM PDT
More than 20 U.S. senators are calling on the Consumer Financial Protection Bureau to reconsider a proposal to allow debt collectors to send unlimited texts and emails to consumers, and to call consumers seven times a week per debt, USA Today reports. “By allowing debt collectors to send consumers unlimited text messages and emails without first receiving affirmative consent for such a method of communication, the proposed rule permits collectors to overwhelm consumers with intrusive communications,” the senators wrote.
The full article (which quotes the full text of the letter) is here.
Will New York catch up to Mississippi in protecting consumers?
Posted: 07 Jun 2019 07:03 AM PDT
by Jeff Sovern
Many states allow their consumers to sue misbehaving companies for unfair practices, including red and purple states like Mississippi, Georgia, North Carolina, Tennessee and West Virginia, states that we normally don't think of as being in the vanguard of consumer protection. This power can be important in protecting consumers. For example, the CFPB used its own ability to stop unfair practices when it pursued Wells Fargo for opening unauthorized accounts, rather than its power to block deception. But New York has lagged behind these states, as well as its neighbors like Connecticut, Pennsylvania, and Massachusetts, in leaving unfairness out of its UDAP statute. Thus, New Yorkers could not have sued Wells Fargo for unfair conduct in opening unauthorized accounts.
But now that may change. The New York legislature is considering a bill to put the U in its UDAP statute. The bill would also eliminate New York's requirement that plaintiffs in UDAP cases demonstrate that the offending conduct is "consumer-oriented," a requirement that no other state has adopted and that does not even appear in New York's statute; instead it was added by a court that evidently eschewed textualism as a method of statutory interpretation.
Unfortunately, but predictably, the bill is encountering heavy industry opposition. One argument made against the bill is that it "will open the flood gates for litigation." But many other states permit consumers to sue for unfair conduct and don't require consumer-oriented conduct and have not experienced a flood of litigation (even assuming there is something wrong with a flood of litigation against bad actors). The items I have listed merely bring the statute into conformity with other states.
The statute currently provides for only $50 in statutory damages. As a number of studies have demonstrated, consumers almost never bring claims for $50. It just isn't worth it to them. So preserving $50 as the amount of statutory damages would be essentially the same as having no statutory damages. The bill addresses this problem by increasing the amount of statutory damages to $2,000, an amount which is more likely to be enough to cause consumers to enforce the statute, though still less than the red state of Kansas, which allows statutory damages of fives times as much, or 200 times what the New York statute currently provides. Of course, businesses object to this too: they prefer that the amount be so low as to render private enforcement virtually nonexistent in the absence of large actual damages.
New York has a chance to offer its consumers not just the protection they need, but that they deserve. It should leap at the opportunity.
From USPIRG consumer blog:
Senators ask CFPB to reconsider debt collection proposal
Posted: 07 Jun 2019 06:04 AM PDT
More than 20 U.S. senators are calling on the Consumer Financial Protection Bureau to reconsider a proposal to allow debt collectors to send unlimited texts and emails to consumers, and to call consumers seven times a week per debt, USA Today reports. “By allowing debt collectors to send consumers unlimited text messages and emails without first receiving affirmative consent for such a method of communication, the proposed rule permits collectors to overwhelm consumers with intrusive communications,” the senators wrote.
The full article (which quotes the full text of the letter) is here.
Open Markets fund raising letter -- antitrust actions looming for big tech
Dear Friends:
When the Open Markets Institute launched in September 2017, the thought that in less than two years, a bipartisan effort would be underway in the halls of Congress, among federal antitrust enforcers, and from state Attorneys General to take on some of the world’s most dangerous monopolies -- Facebook, Google, Amazon -- never crossed our minds.
But this week marked a major turning point.
In the Washington Post: Big Tech’s Antitrust Problems are Just Beginning
In the New York Times: Antitrust Troubles Snowball for Tech Giants as Lawmakers Join In
In the Washington Times: Big Tech Unites Democrats, Republicans Behind Antitrust Crackdown
We’re writing to thank all of you for being a part of this effort, back when it was much lonelier that it is today. The progress we’ve made together has been historic. And momentum is on our side.
But Big Tech is gearing up for an epic fight -- and so should we.
Last year, tech monopolies spent $55 million on lobbyists alone. So we’re asking our community to chip in $55 to make a point -- and make sure we can continue to make progress in the fight to free our country from monopoly power.
DAR comment: There is momentum for antitrust action against big tech, as Open Markets fund raising letter says. But there are countervailing forces in play, as reflected in the articles that follow. The current aggressive international economic policies of the US noted in the Economist article are based on ideas of international business rivalry that are inconsistent with currently traditional antitrust enforcement policies. The opinion piece by Angela Merkel focuses on the inconsistencies. Don Allen Resnikoff
Dear Friends:
When the Open Markets Institute launched in September 2017, the thought that in less than two years, a bipartisan effort would be underway in the halls of Congress, among federal antitrust enforcers, and from state Attorneys General to take on some of the world’s most dangerous monopolies -- Facebook, Google, Amazon -- never crossed our minds.
But this week marked a major turning point.
In the Washington Post: Big Tech’s Antitrust Problems are Just Beginning
In the New York Times: Antitrust Troubles Snowball for Tech Giants as Lawmakers Join In
In the Washington Times: Big Tech Unites Democrats, Republicans Behind Antitrust Crackdown
We’re writing to thank all of you for being a part of this effort, back when it was much lonelier that it is today. The progress we’ve made together has been historic. And momentum is on our side.
But Big Tech is gearing up for an epic fight -- and so should we.
Last year, tech monopolies spent $55 million on lobbyists alone. So we’re asking our community to chip in $55 to make a point -- and make sure we can continue to make progress in the fight to free our country from monopoly power.
DAR comment: There is momentum for antitrust action against big tech, as Open Markets fund raising letter says. But there are countervailing forces in play, as reflected in the articles that follow. The current aggressive international economic policies of the US noted in the Economist article are based on ideas of international business rivalry that are inconsistent with currently traditional antitrust enforcement policies. The opinion piece by Angela Merkel focuses on the inconsistencies. Don Allen Resnikoff
The Economist: America is deploying a new economic arsenal to assert its power
Excerpts from https://www.economist.com/leaders/2019/06/06/america-is-deploying-a-new-economic-arsenal-to-assert-its-power
Outright enemies such as Iran and Venezuela face tighter sanctions—last year 1,500 people, firms and vessels were added to the list, a record figure. The rest of the world faces a new regime for tech and finance. An executive order prohibits transactions in semiconductors and software made by foreign adversaries, and a law passed last year known as firrmapolices foreign investment into Silicon Valley. If a firm is blacklisted, banks usually refuse to deal with it, cutting it off from the dollar payments system. That is crippling—as two firms, zte and Rusal, discovered, briefly, last year.
Such tools used to be reserved for times of war: the legal techniques used for surveillance of the payments system were developed to hunt al-Qaeda. Now a “national emergency” has been declared in tech. Officials have discretion to define what is a threat. Though they often clobber specific firms, such as Huawei, others are running scared (see article). If you run a global company, are you sure your Chinese clients are not about to be blacklisted?
The damage to America’s economy so far has been deceptively small. Tariffs cause agony in export hubs such as northern Mexico, but even if Mr Trump imposes all his threatened tariffs, the tax on imports would be worth only about 1% of America’s gdp. His poll ratings at home have held up, even as they have slumped abroad. His officials believe the experiment in weaponising America’s economic network has only just begun.
In fact, the bill is mounting. America could have built a global coalition to press China to reform its economy, but it has now squandered precious goodwill. Allies looking for new trade deals with America, including post-Brexit Britain, will worry that a presidential tweet could scupper it after it has been signed. Retaliation in kind has begun. China has begun its own blacklist of foreign firms. And the risk of a clumsy mistake that triggers a financial panic is high. Imagine if America banned the $1trn of Chinese shares trading in New York, or cut off foreign banks.
In the long run the American-led network is under threat. There are hints of mutiny—of America’s 35 European and Asian military allies, only three have so far agreed to ban Huawei. Efforts to build a rival global infrastructure will accelerate. China is creating its own courts to adjudicate commercial disputes with foreigners (see Chaguan). Europe is experimenting with building a new payments system to get round the Iran sanctions, which could in time be used elsewhere. China, and eventually India, will be keen to end their dependence on semiconductors from Silicon Valley. Mr Trump is right that America’s network gives it vast power. It will take decades, and cost a fortune, to replace it. But if you abuse it, ultimately you will lose it.◼
Excerpts from https://www.economist.com/leaders/2019/06/06/america-is-deploying-a-new-economic-arsenal-to-assert-its-power
Outright enemies such as Iran and Venezuela face tighter sanctions—last year 1,500 people, firms and vessels were added to the list, a record figure. The rest of the world faces a new regime for tech and finance. An executive order prohibits transactions in semiconductors and software made by foreign adversaries, and a law passed last year known as firrmapolices foreign investment into Silicon Valley. If a firm is blacklisted, banks usually refuse to deal with it, cutting it off from the dollar payments system. That is crippling—as two firms, zte and Rusal, discovered, briefly, last year.
Such tools used to be reserved for times of war: the legal techniques used for surveillance of the payments system were developed to hunt al-Qaeda. Now a “national emergency” has been declared in tech. Officials have discretion to define what is a threat. Though they often clobber specific firms, such as Huawei, others are running scared (see article). If you run a global company, are you sure your Chinese clients are not about to be blacklisted?
The damage to America’s economy so far has been deceptively small. Tariffs cause agony in export hubs such as northern Mexico, but even if Mr Trump imposes all his threatened tariffs, the tax on imports would be worth only about 1% of America’s gdp. His poll ratings at home have held up, even as they have slumped abroad. His officials believe the experiment in weaponising America’s economic network has only just begun.
In fact, the bill is mounting. America could have built a global coalition to press China to reform its economy, but it has now squandered precious goodwill. Allies looking for new trade deals with America, including post-Brexit Britain, will worry that a presidential tweet could scupper it after it has been signed. Retaliation in kind has begun. China has begun its own blacklist of foreign firms. And the risk of a clumsy mistake that triggers a financial panic is high. Imagine if America banned the $1trn of Chinese shares trading in New York, or cut off foreign banks.
In the long run the American-led network is under threat. There are hints of mutiny—of America’s 35 European and Asian military allies, only three have so far agreed to ban Huawei. Efforts to build a rival global infrastructure will accelerate. China is creating its own courts to adjudicate commercial disputes with foreigners (see Chaguan). Europe is experimenting with building a new payments system to get round the Iran sanctions, which could in time be used elsewhere. China, and eventually India, will be keen to end their dependence on semiconductors from Silicon Valley. Mr Trump is right that America’s network gives it vast power. It will take decades, and cost a fortune, to replace it. But if you abuse it, ultimately you will lose it.◼
Merkel Says EU Antitrust Rules Are Naive About Threat of China
By
Patrick Donahue
and
Aoife White
June 4, 2019, 6:19 AM EDT
“How can you say that China won’t engage in Europe in the next five years? I think such a claim is rash,” Merkel said on Tuesday to the BDI industry group. She called again for the EU to alter the rules “in order to be truly competitive.”
Excerpt from: https://www.bloomberg.com/news/articles/2019-06-04/merkel-says-eu-antitrust-rules-are-naive-about-threat-of-china
By
Patrick Donahue
and
Aoife White
June 4, 2019, 6:19 AM EDT
- German Chancellor Angela Merkel blasted the European Union’s merger rules for failing to take into account growing Chinese dominance and hampering efforts to compete on the global stage.
“How can you say that China won’t engage in Europe in the next five years? I think such a claim is rash,” Merkel said on Tuesday to the BDI industry group. She called again for the EU to alter the rules “in order to be truly competitive.”
Excerpt from: https://www.bloomberg.com/news/articles/2019-06-04/merkel-says-eu-antitrust-rules-are-naive-about-threat-of-china
Pro-enforcement editorial in the New York Times on Sprint T-Mobile.
https://www.nytimes.com/2019/06/01/opinion/sunday/t-mobile-sprint-merger-antitrust.html
"Allowing the mobile phone company to merge with Sprint would hurt customers, workers and the broader economy."
https://www.nytimes.com/2019/06/01/opinion/sunday/t-mobile-sprint-merger-antitrust.html
"Allowing the mobile phone company to merge with Sprint would hurt customers, workers and the broader economy."
Commentary: Qualcomm and the debate about monopolization and antitrust law enforcement
-- by Don Allen Resnikoff*
In her opinion in the FTC action against Qualcomm, Judge Loh finds that Qualcomm has monopoly power in the “CDMA and premium LTE modem chip markets,” and has used that power to engage in a wide variety of anticompetitive acts against rivals. The opinion can be read at https://www.scribd.com/document/411066615/19-05-21-FTC-v-Qualcomm-Judicial-Findings?campaign=SkimbitLtd&ad_group=3947X638757X31f5148c5fdf2b8e9de2462cbed96a17&keyword=660149026&source=hp_affiliate&medium=affiliate
Qualcomm is not alone in complaining about Judge Loh’s findings of monopoly power and anticompetitive acts. As a loyal reader of this blog has pointed out, the Wall Street Journal has published opinion pieces critical of Judge Loh’s decision, including the editorial that appears below. The opening sentence of the WSJ opinion piece below says: “The biggest threat to America’s 5G leadership isn’t China or Huawei, federal Judge Lucy Koh revealed in her sweeping 233-page ruling against Qualcomm Tuesday in a Federal Trade Commission lawsuit. It’s regulators and judges who try to control markets.”
There are antitrust enforcement advocates who worry about the power of political opposition to antitrust enforcement generally, and monopolization enforcement in particular. Those worries are reinforced by the WSJ editorial focus on American leadership in 5G telecommunications technology and the competitive threat from China. The WSJ message is not just that Judge Loh is unfairly critical of Qualcomm conduct, and overstates Qualcomm’s market power. The further suggestion is that America’s 5G leadership would be better served if the Judge’s decision against Qualcomm were reversed on appeal, so that Qualcomm would be free to deal with licensing issues in an less constrained manner, and government agencies other than the FTC and the judiciary would be less constrained in dealing with competitive threats from China and Huawei.
I read the WSJ editorial as suggesting that the FTC antitrust action against monopolization by Qualcomm is flawed because of a blindness to political and market realities. The FTC prosecution is perceived as naïve and counterproductive. My guess is that such criticism will persist: A continuing controversy will be about whether there should be political and popular support for antitrust enforcement that presumes to be independent of political issues such as international trade controversies. Is there political and popular support for antitrust enforcement that is in conflict with U.S. government industrial policies concerning the fairness of competition in 5G from Huawei as a Chinese government connected company?
*The opinions expressed are entirely the responsibility of Don Allen Resnikoff
The dissenting view from the WSJ editorial board:
Judge Koh’s Qualcomm Coup--Her sweeping antitrust ruling kneecaps the firm and 5G competition.
By
The WSJ Editorial Board
May 22, 2019 6:47 p.m. ET
The biggest threat to America’s 5G leadership isn’t China or Huawei, federal Judge Lucy Koh revealed in her sweeping 233-page ruling against Qualcomm Tuesday in a Federal Trade Commission lawsuit. It’s regulators and judges who try to control markets.
Last month Qualcomm and Apple settled their world-wide feud over royalties that the San Diego chipmaker charges for licensing its standard essential patents. Apple had earlier solicited intervention by the FTC, which during the waning days of the Obama Administration sued Qualcomm under the Sherman Antitrust Act.
According to the FTC, Qualcomm’s alleged “no license, no chip” practice of pegging patent royalties to the price of a device—3.25% with a $400 cap on the selling price—is anti-competitive. If smartphone makers reject its terms, Qualcomm could cut off their chip supply. By leveraging its dominance in modems, Qualcomm could charge higher royalties that would reinforce its chip monopoly.
At least that was the FTC’s theory, which hasn't borne out in economic reality. Qualcomm’s pricing practice, pioneered byNokia , Motorola and Ericsson during the 1990s, is standard in the industry. As industry experts noted during trial, chip rivals likeBroadcom and Texas Instruments lagged Qualcomm because they invested less or late in research and development, and they exited the business.
Qualcomm’s market share has also slipped amid increased competition. Apple uses Intel modems in newer iPhones, but the Silicon Valley chipmaker struggled to develop 5G chips. Intel chip delays could have cost Apple market share, which probably prompted its settlement with Qualcomm. Intel bowed out after Apple said Qualcomm would supply its 5G chips.
These facts were irrelevant to Judge Koh, who ruled in favor of the FTC on all counts. Despite scant evidence that Qualcomm’s pricing directly harmed competitors or consumers, Judge Koh opined that “courts should infer ‘causation’ from the fact that a defendant has engaged in anticompetitive conduct that ‘reasonably appear[s] capable of making a significant contribution to . . . maintaining monopoly power.’”
What’s the point of a trial then? After the Apple settlement, the Justice Department urged Judge Koh not to impose an overly broad remedy that “ultimately may cause harm to competition and consumers” and “could reduce competition and innovation in markets for 5G technology and downstream applications that rely on that technology.”
Forget Justice. Judge Koh ordered Qualcomm to renegotiate its contracts with smartphone manufacturers worldwide and license patents based on the chip price. She also ruled that Qualcomm must license patents to rival chipmakers, which would severely reduce royalties it uses to fund research and development. Her diktat could help Huawei and Samsung, which have developed chips.
But it also creates significant market uncertainty. Judge Koh has effectively torn up hundreds of business contracts and rewritten industry standards. Her legal findings could apply to chipmakers for other devices, so Broadcom, MediaTek and others should pay close attention. Businesses that support government intervention sooner or later become targets too.
Interventions by foreign regulators to kneecap Qualcomm and help domestic competitors were far more modest. China’s National Development and Reform Commission in 2015 ordered Qualcomm to cut royalty rates on handsets made and sold in China and pay a $150 million fine, which
Judge Koh dismissed as a bribe to the Chinese government to avoid a stiffer penalty.
In 2018 Qualcomm settled antitrust complaints with Samsung for $100 million. But Judge Koh laments: “Qualcomm’s pursuit of this and similar releases to extinguish antitrust claims threatens to impede the government’s ability to enforce the antitrust laws, and could enable future unlawful Qualcomm conduct to go unreported.”
In essence Judge Koh has barred Qualcomm from settling complaints with companies out of court to avoid government litigation. That’s right—the judge has forbidden businesses from trying to work out disagreements on their own. Qualcomm must also submit to FTC monitoring for seven years, which puts bureaucrats in charge of the company.
Qualcomm plans to ask the Ninth Circuit Court of Appeals to stay Judge Koh’s ruling. FTC Chairman Joseph Simons has recused himself from the case because of an ostensible conflict of interest. But even liberals on the Ninth Circuit and the commission should recognize the lawsuit’s threat to competitive markets and ultimately consumers.
Appeared in the May 23, 2019, print edition.
-- by Don Allen Resnikoff*
In her opinion in the FTC action against Qualcomm, Judge Loh finds that Qualcomm has monopoly power in the “CDMA and premium LTE modem chip markets,” and has used that power to engage in a wide variety of anticompetitive acts against rivals. The opinion can be read at https://www.scribd.com/document/411066615/19-05-21-FTC-v-Qualcomm-Judicial-Findings?campaign=SkimbitLtd&ad_group=3947X638757X31f5148c5fdf2b8e9de2462cbed96a17&keyword=660149026&source=hp_affiliate&medium=affiliate
Qualcomm is not alone in complaining about Judge Loh’s findings of monopoly power and anticompetitive acts. As a loyal reader of this blog has pointed out, the Wall Street Journal has published opinion pieces critical of Judge Loh’s decision, including the editorial that appears below. The opening sentence of the WSJ opinion piece below says: “The biggest threat to America’s 5G leadership isn’t China or Huawei, federal Judge Lucy Koh revealed in her sweeping 233-page ruling against Qualcomm Tuesday in a Federal Trade Commission lawsuit. It’s regulators and judges who try to control markets.”
There are antitrust enforcement advocates who worry about the power of political opposition to antitrust enforcement generally, and monopolization enforcement in particular. Those worries are reinforced by the WSJ editorial focus on American leadership in 5G telecommunications technology and the competitive threat from China. The WSJ message is not just that Judge Loh is unfairly critical of Qualcomm conduct, and overstates Qualcomm’s market power. The further suggestion is that America’s 5G leadership would be better served if the Judge’s decision against Qualcomm were reversed on appeal, so that Qualcomm would be free to deal with licensing issues in an less constrained manner, and government agencies other than the FTC and the judiciary would be less constrained in dealing with competitive threats from China and Huawei.
I read the WSJ editorial as suggesting that the FTC antitrust action against monopolization by Qualcomm is flawed because of a blindness to political and market realities. The FTC prosecution is perceived as naïve and counterproductive. My guess is that such criticism will persist: A continuing controversy will be about whether there should be political and popular support for antitrust enforcement that presumes to be independent of political issues such as international trade controversies. Is there political and popular support for antitrust enforcement that is in conflict with U.S. government industrial policies concerning the fairness of competition in 5G from Huawei as a Chinese government connected company?
*The opinions expressed are entirely the responsibility of Don Allen Resnikoff
The dissenting view from the WSJ editorial board:
Judge Koh’s Qualcomm Coup--Her sweeping antitrust ruling kneecaps the firm and 5G competition.
By
The WSJ Editorial Board
May 22, 2019 6:47 p.m. ET
The biggest threat to America’s 5G leadership isn’t China or Huawei, federal Judge Lucy Koh revealed in her sweeping 233-page ruling against Qualcomm Tuesday in a Federal Trade Commission lawsuit. It’s regulators and judges who try to control markets.
Last month Qualcomm and Apple settled their world-wide feud over royalties that the San Diego chipmaker charges for licensing its standard essential patents. Apple had earlier solicited intervention by the FTC, which during the waning days of the Obama Administration sued Qualcomm under the Sherman Antitrust Act.
According to the FTC, Qualcomm’s alleged “no license, no chip” practice of pegging patent royalties to the price of a device—3.25% with a $400 cap on the selling price—is anti-competitive. If smartphone makers reject its terms, Qualcomm could cut off their chip supply. By leveraging its dominance in modems, Qualcomm could charge higher royalties that would reinforce its chip monopoly.
At least that was the FTC’s theory, which hasn't borne out in economic reality. Qualcomm’s pricing practice, pioneered byNokia , Motorola and Ericsson during the 1990s, is standard in the industry. As industry experts noted during trial, chip rivals likeBroadcom and Texas Instruments lagged Qualcomm because they invested less or late in research and development, and they exited the business.
Qualcomm’s market share has also slipped amid increased competition. Apple uses Intel modems in newer iPhones, but the Silicon Valley chipmaker struggled to develop 5G chips. Intel chip delays could have cost Apple market share, which probably prompted its settlement with Qualcomm. Intel bowed out after Apple said Qualcomm would supply its 5G chips.
These facts were irrelevant to Judge Koh, who ruled in favor of the FTC on all counts. Despite scant evidence that Qualcomm’s pricing directly harmed competitors or consumers, Judge Koh opined that “courts should infer ‘causation’ from the fact that a defendant has engaged in anticompetitive conduct that ‘reasonably appear[s] capable of making a significant contribution to . . . maintaining monopoly power.’”
What’s the point of a trial then? After the Apple settlement, the Justice Department urged Judge Koh not to impose an overly broad remedy that “ultimately may cause harm to competition and consumers” and “could reduce competition and innovation in markets for 5G technology and downstream applications that rely on that technology.”
Forget Justice. Judge Koh ordered Qualcomm to renegotiate its contracts with smartphone manufacturers worldwide and license patents based on the chip price. She also ruled that Qualcomm must license patents to rival chipmakers, which would severely reduce royalties it uses to fund research and development. Her diktat could help Huawei and Samsung, which have developed chips.
But it also creates significant market uncertainty. Judge Koh has effectively torn up hundreds of business contracts and rewritten industry standards. Her legal findings could apply to chipmakers for other devices, so Broadcom, MediaTek and others should pay close attention. Businesses that support government intervention sooner or later become targets too.
Interventions by foreign regulators to kneecap Qualcomm and help domestic competitors were far more modest. China’s National Development and Reform Commission in 2015 ordered Qualcomm to cut royalty rates on handsets made and sold in China and pay a $150 million fine, which
Judge Koh dismissed as a bribe to the Chinese government to avoid a stiffer penalty.
In 2018 Qualcomm settled antitrust complaints with Samsung for $100 million. But Judge Koh laments: “Qualcomm’s pursuit of this and similar releases to extinguish antitrust claims threatens to impede the government’s ability to enforce the antitrust laws, and could enable future unlawful Qualcomm conduct to go unreported.”
In essence Judge Koh has barred Qualcomm from settling complaints with companies out of court to avoid government litigation. That’s right—the judge has forbidden businesses from trying to work out disagreements on their own. Qualcomm must also submit to FTC monitoring for seven years, which puts bureaucrats in charge of the company.
Qualcomm plans to ask the Ninth Circuit Court of Appeals to stay Judge Koh’s ruling. FTC Chairman Joseph Simons has recused himself from the case because of an ostensible conflict of interest. But even liberals on the Ninth Circuit and the commission should recognize the lawsuit’s threat to competitive markets and ultimately consumers.
Appeared in the May 23, 2019, print edition.
Is the U.S. Justice Department preparing an investigation of Alphabet Inc.’s Google to determine whether the tech giant broke antitrust law?
Officials from the Justice Department’s Antitrust Division and Federal Trade Commission, which both enforce antitrust law, met in recent weeks to give Justice jurisdiction over Google, said the sources, who sought anonymity because they were not authorized to speak on the record.
The potential investigation represents the latest attack on a tech company by the administration of U.S. President Donald Trump, who has accused social media companies and Google of suppressing conservative voices on their platforms online.
One source said the potential investigation, first reported by the Wall Street Journal, focused on accusations that Google gave preference to its own businesses in searches.
A spokesman for the Justice Department said he could not confirm or deny that an investigation was being considered.
Google declined comment.
FTC investigation
Early in 2013, the FTC closed a long-running investigation of Google, giving it a slap on the wrist. Under FTC pressure, Google agreed to end the practice of “scraping” reviews and other data from rivals’ websites for its own products, and to let advertisers export data to independently assess campaigns.
Google’s search, YouTube, reviews, maps and other businesses, which are largely free to consumers but financed through advertising, have catapulted it from a startup to one of the world’s richest companies in just two decades.
Along the way, it has made enemies in both the tech world, who have complained to law enforcers about its market dominance, and in Washington, where lawmakers have complained about issues from its alleged political bias to its plans for China.
Some welcome news
TripAdvisor chief executive and co-founder Stephen Kaufer welcomed news that Google could face Justice Department antitrust scrutiny.
“TripAdvisor remains concerned about Google’s practices in the United States, the EU and throughout the world,” Kaufer said in a statement. “For the good of consumers and competition on the internet, we welcome any renewed interest by U.S. regulators into Google’s anticompetitive behavior.”
Democratic presidential candidate Elizabeth Warren has pushed for action to break up Google, as well as other big tech companies. Senator Kamala Harris, who is also running for president on the Democratic ticket, has agreed.
“This is very big news, and overdue,” Sen. Josh Hawley, a Republican Google critic, said Twitter, regarding the investigation.
Excerpt from https://www.voanews.com/a/report-us-to-launch-google-antitrust-inquiry/4941585.html
Officials from the Justice Department’s Antitrust Division and Federal Trade Commission, which both enforce antitrust law, met in recent weeks to give Justice jurisdiction over Google, said the sources, who sought anonymity because they were not authorized to speak on the record.
The potential investigation represents the latest attack on a tech company by the administration of U.S. President Donald Trump, who has accused social media companies and Google of suppressing conservative voices on their platforms online.
One source said the potential investigation, first reported by the Wall Street Journal, focused on accusations that Google gave preference to its own businesses in searches.
A spokesman for the Justice Department said he could not confirm or deny that an investigation was being considered.
Google declined comment.
FTC investigation
Early in 2013, the FTC closed a long-running investigation of Google, giving it a slap on the wrist. Under FTC pressure, Google agreed to end the practice of “scraping” reviews and other data from rivals’ websites for its own products, and to let advertisers export data to independently assess campaigns.
Google’s search, YouTube, reviews, maps and other businesses, which are largely free to consumers but financed through advertising, have catapulted it from a startup to one of the world’s richest companies in just two decades.
Along the way, it has made enemies in both the tech world, who have complained to law enforcers about its market dominance, and in Washington, where lawmakers have complained about issues from its alleged political bias to its plans for China.
Some welcome news
TripAdvisor chief executive and co-founder Stephen Kaufer welcomed news that Google could face Justice Department antitrust scrutiny.
“TripAdvisor remains concerned about Google’s practices in the United States, the EU and throughout the world,” Kaufer said in a statement. “For the good of consumers and competition on the internet, we welcome any renewed interest by U.S. regulators into Google’s anticompetitive behavior.”
Democratic presidential candidate Elizabeth Warren has pushed for action to break up Google, as well as other big tech companies. Senator Kamala Harris, who is also running for president on the Democratic ticket, has agreed.
“This is very big news, and overdue,” Sen. Josh Hawley, a Republican Google critic, said Twitter, regarding the investigation.
Excerpt from https://www.voanews.com/a/report-us-to-launch-google-antitrust-inquiry/4941585.html
Kaspersky Lab reports 61% jump in mobile banking malware
May 30, 2019
Mobile banking Trojans are among the most rapidly developing, flexible and dangerous types of malware, according to Kaspersky Lab,
which found a 61% increase in the number of files (from 18,501 to 2,841) of this type of malware between Q4 2018 and Q1 2019.
Banking Trojans grew not only in terms of the number of different samples detected, but also in their share of the threat landscape, the company said in a press release. In Q4 2018, mobile banking Trojans accounted for 1.85% of all mobile malware; in Q1 2019, their share reached 3.24%.
The malware generally looks like a legitimate app, such as a banking application. When a victim tries to reach their genuine bank app, the attackers gain access to that too, the company said.
"The rapid rise of mobile financial malware is a troubling sign, especially since we see how criminals are perfecting their distribution mechanisms," Kaspersky Lab security research Victor Chebyshev said in the release.
Other online threat statistics from the Q1, 2019 report include:
Kaspersky Lab advised users to take a number of precautions to reduce the risk of infection with banking Trojans:
May 30, 2019
Mobile banking Trojans are among the most rapidly developing, flexible and dangerous types of malware, according to Kaspersky Lab,
which found a 61% increase in the number of files (from 18,501 to 2,841) of this type of malware between Q4 2018 and Q1 2019.
Banking Trojans grew not only in terms of the number of different samples detected, but also in their share of the threat landscape, the company said in a press release. In Q4 2018, mobile banking Trojans accounted for 1.85% of all mobile malware; in Q1 2019, their share reached 3.24%.
The malware generally looks like a legitimate app, such as a banking application. When a victim tries to reach their genuine bank app, the attackers gain access to that too, the company said.
"The rapid rise of mobile financial malware is a troubling sign, especially since we see how criminals are perfecting their distribution mechanisms," Kaspersky Lab security research Victor Chebyshev said in the release.
Other online threat statistics from the Q1, 2019 report include:
- Kaspersky Lab solutions detected and repelled 947,027,517 malicious attacks from online resources in 203 countries.
- Web antivirus components recognized 246,695,333 unique URLs as malicious.
- More than 305,000 user computers registered attempted infections by PC malware meant to steal money via online access to bank accounts.
Kaspersky Lab advised users to take a number of precautions to reduce the risk of infection with banking Trojans:
- Install applications only from trusted sources.
- Check permissions requested by the app — if they do not correspond with the app's task, this could be a sign of an unscrupulous app.
- Do not click on links in spam emails;
- Do not perform the rooting procedure on the device, which creates unlimited opportunities for cybercriminals.
From the NYT: This Boutique Bike Shop Shows How Tariffs Can Hit the Little Guy
By Jeanna Smialek
· May 29, 2019
WASHINGTON — Shane Cusick started his small business, Pello, in 2014 with the goal of making lightweight bikes for children. His experience over the past year is a case study in how a trade war can disrupt a fledgling enterprise.
Pello, in Richmond, Va., has met with early success, selling 400 to 500 bright orange two-wheelers a year. The company designs its bikes in the United States but imports them from China because domestic factories are not equipped to churn out tiny bike frames en masse.
“I love American-made products,” Mr. Cusick said. “There’s no other choice. It has to be done over there.”
But President Trump’s trade war with China has started to change the equation. Pello paid 10 percent in extra tariffs on its last batch of imports, a byproduct of Mr. Trump’s decision to impose a tax on $200 billion worth of Chinese goods. The president has now increased that to 25 percent, and Pello expects its next shipment will be hit with that heftier tariff.
Mr. Cusick and his business partner have so far been reluctant to charge more for their bikes, which cost $200 to $600, over worries that customers would opt for cheaper products. But the latest step-up in import taxes, combined with the prospect of an endless trade war, may leave Pello no choice. The factory that produces the bikes in China has razor-thin margins, so it cannot offer much of a discount.
Mr. Trump says his tariffs will hurt Chinese companies more than American firms, and he insists that they will either force Beijing to change its “unfair” trade practices or prompt companies to shift production away from China. But as the president considers imposing tariffs on another $300 billion worth of Chinese goods, companies like Pello highlight the toll Mr. Trump’s trade fight could have on small, young businesses that are reliant on China and unable to rapidly shift production to other, often more expensive, nations.
From https://www.nytimes.com/2019/05/29/business/pello-bikes-china-tariffs.html
brief comment: the tension in 2019 between industrial policy and antitrust law in telecommunications
—Don Allen Resnikoff*
In a article he wrote in 2015, antitrust scholar Daniel Sokol said that sound antitrust law and policy is in tension with industrial policy. Antitrust promotes consumer welfare whereas industrial policy promotes government intervention for particular groups or industries. He said, regretfully, that industrial policy seemed to be alive and well, affecting antitrust law and policy in the U.S. and worldwide.
In 2019, industrial policy is vigorously pressed by the Trump administration, including in telecommunications. A recent article by the American Enterprise Institute, generally viewed as "conservative," says, for example, that the Trump administration pressure on European governments to eliminate Huawei products from their 5G telecomminications rollout has led to resistance based on competitive concerns. Governments and telecom operators are resisting, in part because they want to retain Huawei as a competitor to Ericsson and Nokia. The GSMA, the international association of mobile operators, stated in a public letter: “Robust competition among network infrastructure suppliers is essential to European operators’ ability to deliver innovative services to European citizens.”
The AEI points out that T-Mobile and Sprint have made the 5G race and competition with China a central element of their defense of their proposed merger.
Qualcomm and the USDOJ have questioned remedies against Qualcomm pressed by the FTC, and adopted by a federal court, on the grounds that national security could be undermined by the FTC case if it hampers the company’s ability to compete with Huawei Technologies Co. as a supplier of 5G equipment.
Senator Rubio’s recently published study on meeting the challenges of Chinese competition endorses an industrial policy approach: “The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy [in China] with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
The tension between competition policy and industrial policy is not inconsistent with the ideas that national security concerns must be taken seriously, and that the success of U.S. companies is important to the U.S. economy. But the more weight that is given to national security and the need for successful U.S. companies, the more the pressure on antitrust advocates to justify the relevance and importance of antitrust policy, and the greater he difficulty of addressing the tensions between antitrust and industrial policy in a manner that will strike a broad spectrum of people as reasonable and persuasive.
Can antitrust retain a significant role in the discussion of national security and the need for strong American telecom? That remains to be seen.
*The views expressed are entirely the responsibility of Don Allen Resnikoff
—Don Allen Resnikoff*
In a article he wrote in 2015, antitrust scholar Daniel Sokol said that sound antitrust law and policy is in tension with industrial policy. Antitrust promotes consumer welfare whereas industrial policy promotes government intervention for particular groups or industries. He said, regretfully, that industrial policy seemed to be alive and well, affecting antitrust law and policy in the U.S. and worldwide.
In 2019, industrial policy is vigorously pressed by the Trump administration, including in telecommunications. A recent article by the American Enterprise Institute, generally viewed as "conservative," says, for example, that the Trump administration pressure on European governments to eliminate Huawei products from their 5G telecomminications rollout has led to resistance based on competitive concerns. Governments and telecom operators are resisting, in part because they want to retain Huawei as a competitor to Ericsson and Nokia. The GSMA, the international association of mobile operators, stated in a public letter: “Robust competition among network infrastructure suppliers is essential to European operators’ ability to deliver innovative services to European citizens.”
The AEI points out that T-Mobile and Sprint have made the 5G race and competition with China a central element of their defense of their proposed merger.
Qualcomm and the USDOJ have questioned remedies against Qualcomm pressed by the FTC, and adopted by a federal court, on the grounds that national security could be undermined by the FTC case if it hampers the company’s ability to compete with Huawei Technologies Co. as a supplier of 5G equipment.
Senator Rubio’s recently published study on meeting the challenges of Chinese competition endorses an industrial policy approach: “The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy [in China] with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
The tension between competition policy and industrial policy is not inconsistent with the ideas that national security concerns must be taken seriously, and that the success of U.S. companies is important to the U.S. economy. But the more weight that is given to national security and the need for successful U.S. companies, the more the pressure on antitrust advocates to justify the relevance and importance of antitrust policy, and the greater he difficulty of addressing the tensions between antitrust and industrial policy in a manner that will strike a broad spectrum of people as reasonable and persuasive.
Can antitrust retain a significant role in the discussion of national security and the need for strong American telecom? That remains to be seen.
*The views expressed are entirely the responsibility of Don Allen Resnikoff
Competition policy now vies with industrial and security policy/
From: http://www.aei.org/publication/in-the-5g-race-competition-policy-now-vies-with-industrial-and-security-policy/
As the Trump administration presses European governments to eliminate Huawei products from their 5G rollout, governments and telecoms operators are resisting, in part because they want to retain Huawei as a competitor to Ericsson and Nokia. In February, at the behest of the European operators, the GSMA, the international association of mobile operators, stated in a public letter: “Robust competition among network infrastructure suppliers is essential to European operators’ ability to deliver innovative services to European citizens.” In this case, national security warnings are being balanced against competitive imperatives.
Finally, closer to home, T-Mobile and Sprint have made the 5G race and competition with China a central element of their defense of a proposed merger. So far the Department of Justice is still skeptical, but in the end it will have to balance competitive pros and cons of reducing major US wireless operators from four to three, against Sprint’s dire (and contested) warning that it cannot achieve this goal on its own.
Welcome to the complex world of competition/industrial/security policy.
From: http://www.aei.org/publication/in-the-5g-race-competition-policy-now-vies-with-industrial-and-security-policy/
As the Trump administration presses European governments to eliminate Huawei products from their 5G rollout, governments and telecoms operators are resisting, in part because they want to retain Huawei as a competitor to Ericsson and Nokia. In February, at the behest of the European operators, the GSMA, the international association of mobile operators, stated in a public letter: “Robust competition among network infrastructure suppliers is essential to European operators’ ability to deliver innovative services to European citizens.” In this case, national security warnings are being balanced against competitive imperatives.
Finally, closer to home, T-Mobile and Sprint have made the 5G race and competition with China a central element of their defense of a proposed merger. So far the Department of Justice is still skeptical, but in the end it will have to balance competitive pros and cons of reducing major US wireless operators from four to three, against Sprint’s dire (and contested) warning that it cannot achieve this goal on its own.
Welcome to the complex world of competition/industrial/security policy.
Open Markets fellow Matthew Stoller published an op-ed on POLITICO Magazine encouraging Congressional Democrats to use their power to hold our federal regulators accountable with regard to Facebook.
DAR comment: Controversy over whether and how to regulate Facebook is heightened by Facebook's recent decision not to take down a doctored and distorted video of Nancy Pelosi which inaccurately suggests slowed and slurred speech.
Highlights from the article below. Read the article in full here.
If you are thinking about Facebook or questions of political economy, an important and telling hearing took place recently in the House Energy and Commerce Committee. Democratic leaders Frank Pallone and Jan Schakowsky did an oversight review of Facebook’s regulator, the Federal Trade Commission, with all five commissioners, including Chairman Joe Simons, advancing ideas on how to address privacy rules in America today. [...]
… The Democrats offered little criticism of the commission and actually called for the FTC to get more money and more authority. “Too often,” Pallone lamented, “the FTC can do little more than give a slap on the wrist to companies the first time they violate the law.” What Pallone ignored is that Facebook has broken the law, multiple times, and the FTC has authority to act. But the commission just won’t. Instead of acknowledging the unwillingness of regulators to do their jobs, Pallone is rewarding the agency for failure. [...]
The rationale for Pallone to avoid FTC failures is clear. For one thing, Democrats want to pass a federal privacy bill which would place rules on companies that handle personal data. They need new authorities and a regulator to implement such a bill, and the regulator on hand is the FTC. So they can’t very well acknowledge that the regulator is an institutional catastrophe, and at the same time call for more of it. (It brings to mind the old joke, “this restaurant’s terrible, and the portions are so small.”) The second reason Democrats have a problem pointing the finger at the FTC is because the failures at the agency largely happened under the Obama administration. [...]
The FTC is in charge of blocking anti-competitive mergers, and perhaps the most consequential failures had to do with the mergers that enabled Facebook to become a monopoly…. Joe Simons, when he was appointed to run the commission in May 2018 by President Donald Trump, pledged to look back at mergers, to see if the FTC’s merger policy made sense. So far, Simons hasn’t bothered to follow through on his promise, though the FTC does have economists who spend their time attacking critics who engage in merger retrospectives. [...]
The reason the FTC has done little is not because it lacks authority, but because its officials simply do not believe there is a problem to be solved… The FTC might kick a scam artist once in awhile, but when it comes to big companies, FTC officials don’t want to use the authority they have. They see themselves not as cops but as deal-makers. [...]
There’s a crisis right now, and Congress must step in.
… To address the problem the FTC won’t, Congress should break up Facebook through statute, or be detailed and explicit about what to do to the social networking space rather than deferring to failed regulators.
DAR comment: Controversy over whether and how to regulate Facebook is heightened by Facebook's recent decision not to take down a doctored and distorted video of Nancy Pelosi which inaccurately suggests slowed and slurred speech.
Highlights from the article below. Read the article in full here.
If you are thinking about Facebook or questions of political economy, an important and telling hearing took place recently in the House Energy and Commerce Committee. Democratic leaders Frank Pallone and Jan Schakowsky did an oversight review of Facebook’s regulator, the Federal Trade Commission, with all five commissioners, including Chairman Joe Simons, advancing ideas on how to address privacy rules in America today. [...]
… The Democrats offered little criticism of the commission and actually called for the FTC to get more money and more authority. “Too often,” Pallone lamented, “the FTC can do little more than give a slap on the wrist to companies the first time they violate the law.” What Pallone ignored is that Facebook has broken the law, multiple times, and the FTC has authority to act. But the commission just won’t. Instead of acknowledging the unwillingness of regulators to do their jobs, Pallone is rewarding the agency for failure. [...]
The rationale for Pallone to avoid FTC failures is clear. For one thing, Democrats want to pass a federal privacy bill which would place rules on companies that handle personal data. They need new authorities and a regulator to implement such a bill, and the regulator on hand is the FTC. So they can’t very well acknowledge that the regulator is an institutional catastrophe, and at the same time call for more of it. (It brings to mind the old joke, “this restaurant’s terrible, and the portions are so small.”) The second reason Democrats have a problem pointing the finger at the FTC is because the failures at the agency largely happened under the Obama administration. [...]
The FTC is in charge of blocking anti-competitive mergers, and perhaps the most consequential failures had to do with the mergers that enabled Facebook to become a monopoly…. Joe Simons, when he was appointed to run the commission in May 2018 by President Donald Trump, pledged to look back at mergers, to see if the FTC’s merger policy made sense. So far, Simons hasn’t bothered to follow through on his promise, though the FTC does have economists who spend their time attacking critics who engage in merger retrospectives. [...]
The reason the FTC has done little is not because it lacks authority, but because its officials simply do not believe there is a problem to be solved… The FTC might kick a scam artist once in awhile, but when it comes to big companies, FTC officials don’t want to use the authority they have. They see themselves not as cops but as deal-makers. [...]
There’s a crisis right now, and Congress must step in.
… To address the problem the FTC won’t, Congress should break up Facebook through statute, or be detailed and explicit about what to do to the social networking space rather than deferring to failed regulators.
EU's Vestager says breaking up Facebook would be a last resort
EU Competition Commissioner Margrethe Vestager said breaking up social media giant Facebook would be a last resort, according to a report by Reuters.
Vestager made her comments on Friday, May 17, at the VivaTech technology conference in Paris, after being asked about the subject following US politicians and a Facebook co-founder speaking out in favor of dismantling the company.
“Of course it would be a remedy of very last resort. I think it would keep us in court for maybe a decade. It is much more direct and maybe much more powerful to say we need access to data,” Vestager said.
Earlier in the week, Sen. Bernie Sanders, a 2020 presidential candidate, voiced his support for breaking up Facebook, according to reports, something fellow candidate Sen. Elizabeth Warren has called for as well.
Sanders shared his thoughts with Politico, and when asked if he supports Warren’s proposal for antitrust actions against Facebook, he responded, “The answer is yes of course.”
“We have a monopolistic — an increasingly monopolistic society where you have a handful of very large corporations having much too much power over consumers,” Sanders said.
His comments came on the heels of a much publicized New York Times op-ed piece by Facebook Co-Founder Chris Hughes (who no longer works for the social media giant) also calling for the breakup of Facebook.
“The government must hold Mark accountable. For too long, lawmakers have marveled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive. Any day now, the Federal Trade Commission is expected to impose a $5 billion fine on the company, but that is not enough; nor is Facebook’s offer to appoint some kind of privacy czar,” Hughes wrote.
“After Mark’s congressional testimony last year, there should have been calls for him to truly reckon with his mistakes. Instead the legislators who questioned him were derided as too old and out of touch to understand how tech works. That’s the impression Mark wanted Americans to have, because it means little will change.”
Full Content: PYMNTS
EU Competition Commissioner Margrethe Vestager said breaking up social media giant Facebook would be a last resort, according to a report by Reuters.
Vestager made her comments on Friday, May 17, at the VivaTech technology conference in Paris, after being asked about the subject following US politicians and a Facebook co-founder speaking out in favor of dismantling the company.
“Of course it would be a remedy of very last resort. I think it would keep us in court for maybe a decade. It is much more direct and maybe much more powerful to say we need access to data,” Vestager said.
Earlier in the week, Sen. Bernie Sanders, a 2020 presidential candidate, voiced his support for breaking up Facebook, according to reports, something fellow candidate Sen. Elizabeth Warren has called for as well.
Sanders shared his thoughts with Politico, and when asked if he supports Warren’s proposal for antitrust actions against Facebook, he responded, “The answer is yes of course.”
“We have a monopolistic — an increasingly monopolistic society where you have a handful of very large corporations having much too much power over consumers,” Sanders said.
His comments came on the heels of a much publicized New York Times op-ed piece by Facebook Co-Founder Chris Hughes (who no longer works for the social media giant) also calling for the breakup of Facebook.
“The government must hold Mark accountable. For too long, lawmakers have marveled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive. Any day now, the Federal Trade Commission is expected to impose a $5 billion fine on the company, but that is not enough; nor is Facebook’s offer to appoint some kind of privacy czar,” Hughes wrote.
“After Mark’s congressional testimony last year, there should have been calls for him to truly reckon with his mistakes. Instead the legislators who questioned him were derided as too old and out of touch to understand how tech works. That’s the impression Mark wanted Americans to have, because it means little will change.”
Full Content: PYMNTS
California SB 206 – Collegiate Athletics: Fair Pay to Play Act Moves Forward
Friday, May 24, 2019
The Fair Pay to Play Act, introduced by California State Senate Majority Whip Nancy Skinner, has passed an initial hurdle toward becoming law as the California State Senate passed the proposed legislation by a 31-4 vote total. The California Assembly will now consider the measure in the near future.
The proposed legislation (as discussed in our recent blog post on March 1, 2019) would prohibit a California public postsecondary educational institution, athletic association, conference, or any other organization with authority over intercollegiate athletics, from preventing student athletes from earning compensation in connection with the use of the student athlete’s name, image, or likeness. Specifically, any such compensation would no longer affect a student athlete’s scholarship eligibility. The proposed legislation would prohibit direct payments from schools to athletes and would become effective in 2023.
Excerpt from https://www.natlawreview.com/article/faces-and-names-modern-issues-athlete-publicity-licensing
Friday, May 24, 2019
The Fair Pay to Play Act, introduced by California State Senate Majority Whip Nancy Skinner, has passed an initial hurdle toward becoming law as the California State Senate passed the proposed legislation by a 31-4 vote total. The California Assembly will now consider the measure in the near future.
The proposed legislation (as discussed in our recent blog post on March 1, 2019) would prohibit a California public postsecondary educational institution, athletic association, conference, or any other organization with authority over intercollegiate athletics, from preventing student athletes from earning compensation in connection with the use of the student athlete’s name, image, or likeness. Specifically, any such compensation would no longer affect a student athlete’s scholarship eligibility. The proposed legislation would prohibit direct payments from schools to athletes and would become effective in 2023.
Excerpt from https://www.natlawreview.com/article/faces-and-names-modern-issues-athlete-publicity-licensing
Qualcomm, the world's largest maker of smartphone modems and microchips, illegally charges companies sky-high prices to license its technology, a federal judge ruled Tuesday.
In a case brought to court in 2017 by the US Federal Trade Commission, District Court Judge Lucy Koh said Qualcomm should not receive a percentage of sales of each phone a company sells; instead, it should receive a much smaller amount based on what Qualcomm technology exists inside the phone. It also must license its patents to rival chipmakers.
From https://www.cnn.com/2019/05/22/tech/qualcomm-antitrust/index.html
The full opinion is at https://www.scribd.com/document/411079122/FTC-v-Qualcomm-Findings-of-Fact-and-Conclusions-of-Law
FROM US Pirg Consumer Blog:
Opposition to CFPB's proposed rescission of protections for payday borrowers
Posted: 17 May 2019 10:34 AM PDT
Public Citizen, along with the Center for Responsible Lending and several other consumer-advocacy groups, submitted a lengthy comment objecting to the CFPB's proposal to rescind many aspects of the agency's own payday lending rule, issued in 2017 to protect consumers from harmful payday lending practices. The comment is here. If you are not up for reading the full 220-page document, the executive summary is available here.
Opposition to CFPB's proposed rescission of protections for payday borrowers
Posted: 17 May 2019 10:34 AM PDT
Public Citizen, along with the Center for Responsible Lending and several other consumer-advocacy groups, submitted a lengthy comment objecting to the CFPB's proposal to rescind many aspects of the agency's own payday lending rule, issued in 2017 to protect consumers from harmful payday lending practices. The comment is here. If you are not up for reading the full 220-page document, the executive summary is available here.
Nearly Seven in Ten Flunked California's February 2019 Bar Exam
By Cheryl Miller
Still, the success rate—31.4 percent—increased 4.1 percentage points from the historically low pass rate... Read More
By Cheryl Miller
Still, the success rate—31.4 percent—increased 4.1 percentage points from the historically low pass rate... Read More
From Rubio study on meeting the challenge of Chinese competition
As Chinese policymakers seek to draw level with the world in semiconductor production and dominate global telecommunications, it is also looking ahead to the next frontiers of technological innovation. The question for the U.S. is whether it can adequately respond not just to the immediate threats posed by individual Chinese technology companies, but to the long-term threats China’s policy poses to the American technology sector. To quote testimony from James Lewis of the Center for Strategic and International Studies to the U.S. Trade Representative:
“What is new is that unfair trade, security and industrial policies, tolerable in a smaller developing economy, are now combined with China’s immense, government-directed investment and regulatory policies to put foreign firms at a disadvantage…China now has the wealth, commercial sophistication and technical expertise to make its pursuit of technological leadership work. The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
https://www.rubio.senate.gov/public/_cache/files/d1c6db46-1a68-481a-b96e-356c8100f1b7/3EDECA923DB439A8E884C6229A4C6003.02.12.19-final-sbc-project-mic2025-report.pdf
Comment by Don Allen Resnikoff: The recommendations for a U.S. industrial policy in the Rubio Report dovetail with Trump Administration policies with regard to Huawei discussed in the articles below. It seems plain that security concerns and a policy favoring rivals of Huawei are important to current U.S. policy. The role of traditional antitrust enforcement policy may be eclipsed by current US industrial policies affecting semiconductors and telecommunications, but it does not follow that traditional antitrust policy is irrelevant. From an antitrust policy perspective, the fewer the constraints on competitors the greater the benefits to consumers with regard to price and quality. For that reason, limitations on competitors based on security and broader industrial policy concerns need to be weighed carefully. DR
As Chinese policymakers seek to draw level with the world in semiconductor production and dominate global telecommunications, it is also looking ahead to the next frontiers of technological innovation. The question for the U.S. is whether it can adequately respond not just to the immediate threats posed by individual Chinese technology companies, but to the long-term threats China’s policy poses to the American technology sector. To quote testimony from James Lewis of the Center for Strategic and International Studies to the U.S. Trade Representative:
“What is new is that unfair trade, security and industrial policies, tolerable in a smaller developing economy, are now combined with China’s immense, government-directed investment and regulatory policies to put foreign firms at a disadvantage…China now has the wealth, commercial sophistication and technical expertise to make its pursuit of technological leadership work. The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
https://www.rubio.senate.gov/public/_cache/files/d1c6db46-1a68-481a-b96e-356c8100f1b7/3EDECA923DB439A8E884C6229A4C6003.02.12.19-final-sbc-project-mic2025-report.pdf
Comment by Don Allen Resnikoff: The recommendations for a U.S. industrial policy in the Rubio Report dovetail with Trump Administration policies with regard to Huawei discussed in the articles below. It seems plain that security concerns and a policy favoring rivals of Huawei are important to current U.S. policy. The role of traditional antitrust enforcement policy may be eclipsed by current US industrial policies affecting semiconductors and telecommunications, but it does not follow that traditional antitrust policy is irrelevant. From an antitrust policy perspective, the fewer the constraints on competitors the greater the benefits to consumers with regard to price and quality. For that reason, limitations on competitors based on security and broader industrial policy concerns need to be weighed carefully. DR
From the South China Morning Post: Politics
Trump orders national emergency on information security; Commerce Department follows with Huawei restrictions
- Trump’s order bars the use of telecoms equipment made by companies deemed a threat to US national security, threatening Huawei
- Move would stymie Huawei’s efforts to expand into critical 5G market, giving US a chance to play catch-up
https://www.scmp.com/news/china/politics/article/3010396/donald-trump-signs-executive-order-laying-ground-us-ban-chinas
The Trump Administration war on Huawei 5G, as presented by the PBS Newshour
https://www.pbs.org/newshour/show/why-the-trump-administration-is-so-concerned-about-huawei
https://www.pbs.org/newshour/show/why-the-trump-administration-is-so-concerned-about-huawei
WSJ's take on USDOJ v. FTC on Qualcomm remedies
Excerpt from https://www.wsj.com/articles/justice-department-warns-against-broad-penalty-for-qualcomm-in-ftc-case-11556865004#
The move is the latest sign of the Trump administration’s concern about the fate of Qualcomm, the largest supplier of chips in smartphones and a leading developer of the next-generation 5G wireless technology that is beginning to roll out.
Qualcomm has told the government that American national security could be undermined by the FTC case if it hampers the company’s ability to compete with Huawei Technologies Co., a Chinese supplier of 5G equipment. That argument has received support in Washington, with representatives from the Defense and Energy departments meeting with FTC commissioners to encourage a settlement of the lawsuit, The Wall Street Journal reported in March.
Excerpt-- From http://www.fosspatents.com/2019/05/ftc-calls-doj-statement-in-qualcomm.html
FTC calls DOJ statement in Qualcomm antitrust case "untimely," says it "misconstrues applicable law and the record": this is an unusual inter-institutional quarrel
On Thursday, one week after the Department of Justice submitted its puzzling Statement of Interest in the FTC v. Qualcomm antitrust case awaiting Judge Lucy H. Koh's judgment in the Northern District of California, the Federal Trade Commission filed a response that is as concise as it is informative at different levels (this post continues below the document):
19-05-09 FTC Response to DO... by on Scribd
After the ninth word ("untimely" before "Statement of Interest") it's already clear that the FTC doesn't appreciate the DOJ's bewildering kind of intervention. The FTC doesn't talk about why the DOJ would make such a filing now (and not long before, if at all), but it's easy to see: after the Apple-Qualcomm settlement, Qualcomm's allies in the federal government such as DOJ antitrust chief Makan Delrahim (whose subordinates submitted the Statement of Interest) are now concerned that Judge Koh's impending decision might have an impact on the Apple-Qualcomm deal. The DOJ primarily expressed concerns over the FTC's request that the court order Qualcomm to renegotiate all patent license agreements, and who knows what clauses in the Apple-Qualcomm contract might provide for some adjustments based on the outcome of the FTC case. Within the universe of its own that is the FTC v. Qualcomm antitrust litigation, however, the separate and now-settled Apple-Qualcomm dispute is not an outcome-determinative or even just procedurally relevant factor.
What's funny is that the FTC clarifies it "did not participate in or request [the DOJ's] filing." It's a diplomatic way of saying that the filing is unwanted, unwarranted, and unhelpful.
FTC calls DOJ statement in Qualcomm antitrust case "untimely," says it "misconstrues applicable law and the record": this is an unusual inter-institutional quarrel
On Thursday, one week after the Department of Justice submitted its puzzling Statement of Interest in the FTC v. Qualcomm antitrust case awaiting Judge Lucy H. Koh's judgment in the Northern District of California, the Federal Trade Commission filed a response that is as concise as it is informative at different levels (this post continues below the document):
19-05-09 FTC Response to DO... by on Scribd
After the ninth word ("untimely" before "Statement of Interest") it's already clear that the FTC doesn't appreciate the DOJ's bewildering kind of intervention. The FTC doesn't talk about why the DOJ would make such a filing now (and not long before, if at all), but it's easy to see: after the Apple-Qualcomm settlement, Qualcomm's allies in the federal government such as DOJ antitrust chief Makan Delrahim (whose subordinates submitted the Statement of Interest) are now concerned that Judge Koh's impending decision might have an impact on the Apple-Qualcomm deal. The DOJ primarily expressed concerns over the FTC's request that the court order Qualcomm to renegotiate all patent license agreements, and who knows what clauses in the Apple-Qualcomm contract might provide for some adjustments based on the outcome of the FTC case. Within the universe of its own that is the FTC v. Qualcomm antitrust litigation, however, the separate and now-settled Apple-Qualcomm dispute is not an outcome-determinative or even just procedurally relevant factor.
What's funny is that the FTC clarifies it "did not participate in or request [the DOJ's] filing." It's a diplomatic way of saying that the filing is unwanted, unwarranted, and unhelpful.
FROM DMN: Canada Has a Solution for Growing Local Talent: Make Streaming Services Pay for It
Daniel Sanchez
May 16, 2019
The Standing Committee on Canadian Heritage has unveiled its report on the Copyright Act, and the local music industry is rejoicing.
The all-party committee of MPs (Member of Parliament) has recommended that the Canadian government set harsher rules for local content on foreign streaming services. This would force companies like Netflix, Amazon, and Apple, among others, to actively contribute to the creation of Canadian works.
According to the committee, Canada’s creative industries, broadcasters, digital services, commercial users and distributors have failed to “keep pace with technology and the digital marketplace for music.” The key recommendations would allegedly bolster a “functioning marketplace for creative works.”
Local MPs also recommended the government address Canada’s broad safe harbor laws, outright eliminating or narrowing Copyright Act exemptions to address the growing Value Gap in the country’s creative industries. This, the committee writes, would help creators receive fair compensation, combat modern forms of piracy (including stream-ripping), and strengthen the enforcement of Canadian copyright laws.
The committee noted that no policy currently exists forcing digital streaming services to fund the production of local content. Because of this, the system has “diverted wealth from creators to large digital intermediaries.” This has also led to the erosion of artists’ ability to earn a middle-class living.
In addition, the report – titled Shifting Paradigms – has pushed for a major government crackdown on internet piracy. Witnesses reportedly recommended higher punishments and fines. Should the Canadian government implement the recommendations, Canadian internet service providers would be held liable for the illegal distribution of content on their networks.
Hailing the report, Graham Henderson, Music Canada President and CEO, proclaimed,
“I applaud the Members of the Committee for listening to the voices of artists and the businesses who support music and for taking these critical first steps toward addressing the Value Gap in Canada.”
The report also calls for the end of artist and label payments to Canada’s largest broadcasters. The Radio Royalty Exemption should only apply to community and independent stations. In addition, the MPs recommended a clearer definition of “sound recording” in the Copyright Act. Recordings used in television programs and films must be eligible for public performance remuneration.
Speaking to the committee about the Radio Royalty Exemption and the redefinition of sound recording, Miranda Mulholland, Chair of Music Canada’s Advisory Council, explained,
“The changes recommended by the Heritage Committee in this report are the first step in ensuring artists receive fair remuneration for their work. The changes would end the unfair subsidies that artists have been paying large broadcasting corporations, and [would] mean more creators can earn a sustainable living from their music.”
Yet, not everyone remains excited about the recommendations.
Highlighting ‘inconsistencies’ in the report, MP Pierre Nantel lambasted the call for stricter regulation on digital streaming music services.
Daniel Sanchez
May 16, 2019
The Standing Committee on Canadian Heritage has unveiled its report on the Copyright Act, and the local music industry is rejoicing.
The all-party committee of MPs (Member of Parliament) has recommended that the Canadian government set harsher rules for local content on foreign streaming services. This would force companies like Netflix, Amazon, and Apple, among others, to actively contribute to the creation of Canadian works.
According to the committee, Canada’s creative industries, broadcasters, digital services, commercial users and distributors have failed to “keep pace with technology and the digital marketplace for music.” The key recommendations would allegedly bolster a “functioning marketplace for creative works.”
Local MPs also recommended the government address Canada’s broad safe harbor laws, outright eliminating or narrowing Copyright Act exemptions to address the growing Value Gap in the country’s creative industries. This, the committee writes, would help creators receive fair compensation, combat modern forms of piracy (including stream-ripping), and strengthen the enforcement of Canadian copyright laws.
The committee noted that no policy currently exists forcing digital streaming services to fund the production of local content. Because of this, the system has “diverted wealth from creators to large digital intermediaries.” This has also led to the erosion of artists’ ability to earn a middle-class living.
In addition, the report – titled Shifting Paradigms – has pushed for a major government crackdown on internet piracy. Witnesses reportedly recommended higher punishments and fines. Should the Canadian government implement the recommendations, Canadian internet service providers would be held liable for the illegal distribution of content on their networks.
Hailing the report, Graham Henderson, Music Canada President and CEO, proclaimed,
“I applaud the Members of the Committee for listening to the voices of artists and the businesses who support music and for taking these critical first steps toward addressing the Value Gap in Canada.”
The report also calls for the end of artist and label payments to Canada’s largest broadcasters. The Radio Royalty Exemption should only apply to community and independent stations. In addition, the MPs recommended a clearer definition of “sound recording” in the Copyright Act. Recordings used in television programs and films must be eligible for public performance remuneration.
Speaking to the committee about the Radio Royalty Exemption and the redefinition of sound recording, Miranda Mulholland, Chair of Music Canada’s Advisory Council, explained,
“The changes recommended by the Heritage Committee in this report are the first step in ensuring artists receive fair remuneration for their work. The changes would end the unfair subsidies that artists have been paying large broadcasting corporations, and [would] mean more creators can earn a sustainable living from their music.”
Yet, not everyone remains excited about the recommendations.
Highlighting ‘inconsistencies’ in the report, MP Pierre Nantel lambasted the call for stricter regulation on digital streaming music services.
Congress is considering privacy legislation – be afraid
Posted USPIRG Consumer Blog: 16 May 2019 01:19 PM PDT
by Jeff Sovern
That's the title of my latest essay for The Conversation, about how preemption of state privacy laws could harm consumers. Here's an excerpt:
[R]ather than circumventing state laws, a federal privacy law should work in partnership with them – just as federal laws regulating auto safety such as airbag requirements operate in tandem with state regulations that govern related issues such as how fast motorists can drive.
Industry advocates, however, don’t want federal and state laws to exist side by side because they say companies will have trouble following the rules of different states. Businesses had the same concerns about state data breach laws, and testimony from Marriott’s CEO suggests the company didn’t find it too troublesome to comply with them, however different.
It’s more likely, then, that companies realize that it will be easier for their lobbyists to win a victory in one legislature – Congress – than in 50 states.
Lobbyists have also argued consumers would be bewildered by such a patchwork of state privacy laws. They claimed, for example, that a consumer driving from Biloxi, Mississippi, to Bellevue, Washington, would be confused by the different privacy regimes she would encounter.
But that same person – during that same drive – copes with a wide variety of traffic laws. Drivers seem to be able to navigate those different laws just fine.
Dept of Education blocking CFPB oversight of student loan servicing
Posted USPIRG Consumer Blog: 16 May 2019 08:55 AM PDT
In a letter responding to an inquiry from Senator Warren, the director of the Consumer Financial Protection Bureau says that the Education Department is hampering the CFPB's efforts to protect borrowers by performing oversight of the student loan industry. The Senators' letter has asked whether the federal regulator had "abandoned its supervision and enforcement activities" related to more than $1 trillion in student loans.
The CFPB letter states that companies that student loan servicing companies are refusing to share information that the CFPB needs to perform oversight because the Department of Education has issued guidance telling them not to do so.
NPR has the story, here, along with a link to the CFPB's letter.
Posted USPIRG Consumer Blog: 16 May 2019 01:19 PM PDT
by Jeff Sovern
That's the title of my latest essay for The Conversation, about how preemption of state privacy laws could harm consumers. Here's an excerpt:
[R]ather than circumventing state laws, a federal privacy law should work in partnership with them – just as federal laws regulating auto safety such as airbag requirements operate in tandem with state regulations that govern related issues such as how fast motorists can drive.
Industry advocates, however, don’t want federal and state laws to exist side by side because they say companies will have trouble following the rules of different states. Businesses had the same concerns about state data breach laws, and testimony from Marriott’s CEO suggests the company didn’t find it too troublesome to comply with them, however different.
It’s more likely, then, that companies realize that it will be easier for their lobbyists to win a victory in one legislature – Congress – than in 50 states.
Lobbyists have also argued consumers would be bewildered by such a patchwork of state privacy laws. They claimed, for example, that a consumer driving from Biloxi, Mississippi, to Bellevue, Washington, would be confused by the different privacy regimes she would encounter.
But that same person – during that same drive – copes with a wide variety of traffic laws. Drivers seem to be able to navigate those different laws just fine.
Dept of Education blocking CFPB oversight of student loan servicing
Posted USPIRG Consumer Blog: 16 May 2019 08:55 AM PDT
In a letter responding to an inquiry from Senator Warren, the director of the Consumer Financial Protection Bureau says that the Education Department is hampering the CFPB's efforts to protect borrowers by performing oversight of the student loan industry. The Senators' letter has asked whether the federal regulator had "abandoned its supervision and enforcement activities" related to more than $1 trillion in student loans.
The CFPB letter states that companies that student loan servicing companies are refusing to share information that the CFPB needs to perform oversight because the Department of Education has issued guidance telling them not to do so.
NPR has the story, here, along with a link to the CFPB's letter.
San Diego approves new vehicle habitation restrictions
A San Diego ordinance that prohibits people from living in vehicles parked within 500 feet of a school or home has gained City Council approval. Disability Rights California attorney Ann Menasche, who challenged the city's prior restrictions on living in vehicles, said that "[i]f this issue comes before the court again, we can strike multiple holes into [the new] ordinance as unconstitutional and discriminatory."
From Courthouse News Service (5/15)
https://www2.smartbrief.com/uyd/editProfile.action;jsessionid=BB620E184F1F3485B618BA751495FA6A.web2.smartbrief.com?t1=63629357&t2=https%3A%2F%2Fwww.courthousenews.com%2Fsan-diego-revives-law-outlawing-living-in-vehicles%2F
Law enforcement authorities from dozens of states filed a federal complaint accusing 20 pharmaceutical companies – including Teva, Sandoz and Pfizer – of conspiring to hike generic drug prices, costing billions of dollars in overcharges and undermining government efforts to hold down medical costs.
The complaint (524 pages): https://assets.documentcloud.org/documents/5997931/TevComplaint.pdf
Excerpt:
I. SUMMARY OF THE CASE
1. For many years, the generic pharmaceutical industry has operated pursuant to an understanding among generic manufacturers not to compete with each other and to instead settle for what these competitors refer to as "fair share." This understanding has permeated every segment of the industry, and the purpose of the agreement was to avoid competition among generic manufacturers that would normally result in significant price erosion and great savings to the ultimate consumer. Rather than enter a particular generic drug market by competing on price in order to gain market share, competitors in the generic drug industry would systematically and routinely communicate with one another directly, divvy up customers to create an artificial equilibrium in the market, and then maintain anticompetitively high prices. This "fair share" understanding was not the result of independent decision making by individual companies to avoid competing with one another. Rather, it was a direct result of specific discussion, negotiation and collusion among industry participants over the course of many years.
2. By 2012, Teva and other co-conspirators decided to take this understanding to the next level. . . .
Are State's published statutes copyright protected?
But when Mr. Malamud’s group posted the Official Code of Georgia Annotated, the state sued for copyright infringement. Providing public access to the state’s laws and related legal materials, Georgia’s lawyers said, was part of a “strategy of terrorism.”
A federal appeals court ruled against the state, which has asked the Supreme Court to step in. On Friday, in an unusual move, Mr. Malamud’s group, Public.Resource.Org, also urged the court to hear the dispute, saying that the question of who owns the law is an urgent one, as about 20 other states have claimed that parts of similar annotated codes are copyrighted.
The issue, the group said, is whether citizens can have access to “the raw materials of our democracy.”
The case, Georgia v. Public.Resource.Org, No. 18-1150, concerns the 54 volumes of the Official Code of Georgia Annotated, which contain state statutes and related materials.
The state, through a legal publisher, makes the statutes themselves available online, and it has said it does not object to Mr. Malamud doing the same thing. But people who want to see other materials in the books, the state says, must pay the publisher.
This is part of a disturbing trend, according to a new law review article, “Who Owns the Law? Why We Must Restore Public Ownership of Legal Publishing,” by Leslie Street, a law professor and librarian at Mercer University in Macon, Ga., and David Hansen, a librarian at Duke. It will be published in The Journal of Intellectual Property Law.
States have struck deals with legal publishers, the article said, that have effectively privatized the law. “Publishers now use powerful legal tools to control who has access to the text of the law, how much they must pay and under what terms,” the article said.
Excerpt from https://www.nytimes.com/2019/05/13/us/politics/georgia-official-code-copyright.html?action=click&module=Top%20Stories&pgtype=Homepage
But when Mr. Malamud’s group posted the Official Code of Georgia Annotated, the state sued for copyright infringement. Providing public access to the state’s laws and related legal materials, Georgia’s lawyers said, was part of a “strategy of terrorism.”
A federal appeals court ruled against the state, which has asked the Supreme Court to step in. On Friday, in an unusual move, Mr. Malamud’s group, Public.Resource.Org, also urged the court to hear the dispute, saying that the question of who owns the law is an urgent one, as about 20 other states have claimed that parts of similar annotated codes are copyrighted.
The issue, the group said, is whether citizens can have access to “the raw materials of our democracy.”
The case, Georgia v. Public.Resource.Org, No. 18-1150, concerns the 54 volumes of the Official Code of Georgia Annotated, which contain state statutes and related materials.
The state, through a legal publisher, makes the statutes themselves available online, and it has said it does not object to Mr. Malamud doing the same thing. But people who want to see other materials in the books, the state says, must pay the publisher.
This is part of a disturbing trend, according to a new law review article, “Who Owns the Law? Why We Must Restore Public Ownership of Legal Publishing,” by Leslie Street, a law professor and librarian at Mercer University in Macon, Ga., and David Hansen, a librarian at Duke. It will be published in The Journal of Intellectual Property Law.
States have struck deals with legal publishers, the article said, that have effectively privatized the law. “Publishers now use powerful legal tools to control who has access to the text of the law, how much they must pay and under what terms,” the article said.
Excerpt from https://www.nytimes.com/2019/05/13/us/politics/georgia-official-code-copyright.html?action=click&module=Top%20Stories&pgtype=Homepage
Antitrust Issues Confronting Small Business and Professionals
Bar luncheon program:
Antitrust: it's not just for big business!
Presented by:
Antitrust Law Committee of the D.C. Bar Antitrust and Consumer Law Community
Thursday, May 16, 2019
12:00 p.m. to 2:00 p.m.
D.C. Bar
901 4th Street NW
IN-PERSON WEBCAST or in person
Antitrust: it's not just for big business! While your news feed is rife with chatter about the antitrust perils faced by the world's largest tech firms, it's important to know that antitrust risks confront a variety of professionals, corporate managers, and other regional/local businesses in many industries. And yet . . . these antitrust risks are often discounted or ignored altogether by those who think the law is concerned only with the market's largest, most dominant firms. In addition, small businesses and professionals need to be aware that they can be the victims of conduct that violates antitrust laws, and know what steps to take.
Learn more...
Presenters:SPEAKERS
Unsubsc
Bar luncheon program:
Antitrust: it's not just for big business!
Presented by:
Antitrust Law Committee of the D.C. Bar Antitrust and Consumer Law Community
Thursday, May 16, 2019
12:00 p.m. to 2:00 p.m.
D.C. Bar
901 4th Street NW
IN-PERSON WEBCAST or in person
Antitrust: it's not just for big business! While your news feed is rife with chatter about the antitrust perils faced by the world's largest tech firms, it's important to know that antitrust risks confront a variety of professionals, corporate managers, and other regional/local businesses in many industries. And yet . . . these antitrust risks are often discounted or ignored altogether by those who think the law is concerned only with the market's largest, most dominant firms. In addition, small businesses and professionals need to be aware that they can be the victims of conduct that violates antitrust laws, and know what steps to take.
Learn more...
Presenters:SPEAKERS
- Thomas Gilbertsen, The Gilbertsen Law Office
- Mark Woodward, Deputy Assistant Director, Federal Trade Commission
- Don Allen Resnikoff (Moderator)
Unsubsc
"The United States further submits that, in fashioning a remedy, the Court should take careful consideration of all relevant issues and effects of such a remedy. That includes the principle that, although a proper remedy must restore any competition lost due to actions found to have violated the antitrust laws, a remedy should work as little injury as possible to other public policies. The United States underscores, however, that it takes no position at this time on the underlying merits of the FTC’s claims or on any other issues related to the Court’s pending determination of liability. "
The USDOJ filing is here:https://essentialpatentblog.lexblogplatform.com/wp-content/uploads/sites/64/2019/05/2019-05-02-DOJ-Statement-dckt-1487_0.pdf
- USDOJ goes to Court to question remedies sought by FTC against Qualcomm
"The United States further submits that, in fashioning a remedy, the Court should take careful consideration of all relevant issues and effects of such a remedy. That includes the principle that, although a proper remedy must restore any competition lost due to actions found to have violated the antitrust laws, a remedy should work as little injury as possible to other public policies. The United States underscores, however, that it takes no position at this time on the underlying merits of the FTC’s claims or on any other issues related to the Court’s pending determination of liability. "
The USDOJ filing is here:https://essentialpatentblog.lexblogplatform.com/wp-content/uploads/sites/64/2019/05/2019-05-02-DOJ-Statement-dckt-1487_0.pdf
From USPIRG Blog: Opposition to the draft Restatement of the Law of Consumer Contracts
Posted: 02 May 2019 05:18 AM PDT
The members of the American Law Institute are poised to vote on May 21 on whether to adopt, for the first time, a Restatement of the Law of Consumer Contracts. That's right: A Restatement that would purport to state the law on, among other things, the take-or-leave-it contracts that we "agree to" every day and that seek to impose on us all manner of things that we know little or nothing about. [We've posted about this project several times before, including this warning posted nearly three years ago by law prof and consumer-law expert Dee Pridgen.]
The positions taken in Restatements are often highly influential with courts. For instance, most folks who litigate are aware of the influence Restatements have had on modern product-liability law.
Over at Credits Slips, Georgetown law prof Adam Levitin has posted this critique of the draft that the members will be voting on. I recommend reading Adam's post in full and taking a look at the links contained in it. In the meantime, check out these excerpts:
The draft Restatement of Consumer Contracts is founded on a set of six quantitative empirical studies about consumer contracts. This is a major and novel move for a Restatement; traditionally Restatements engaged in a qualitative distillation of the law. Professor Gregory Klass of Georgetown has [found] pervasive problems in the Reporters' coding. ... A draft version of Professor Klass's study inspired me and a number of other advisors to the Restatement project to attempt our own replication study of the empirical studies of contract modification and clickwrap enforcement. We found the same sort of pervasive problems as Professor Klass. While the ALI Council completely ignored our findings, we wrote them up into a companion article to Professor Klass's. * * *
For example, [the Restatement] would require findings of both procedural and substantive unconscionability for a contract to be unconscionable, while many states only require substantive unconscionability. Not surprisingly, I am unaware of any consumer law expert (other than the Reporters) who supports the project.
But the thing that should really be a wake up call that something is very, very off with this Restatement project is the presence of outside opposition, which is virtually unheard of in the ALI process. Every major consumer group (also here, here, and here), weighed in in opposition as well as 13 state attorneys general (and also here), and our former co-blogger (and also former ALI Vice-Chair), Senator Elizabeth Warren. Nor has the opposition been solely from consumer-minded groups. The US Chamber of Commerce and the major trade associations for banking, telecom, retailers, and insurers are also opposed (albeit with very different motivations). Simply put, it's hard to find anyone other than the Reporters (and the ALI Council, which has a strong tradition of deference to Reporters) who actually likes the draft Restatement.
From US PIRG Blog: The National Consumer Law Center on racial and ethnic disparities in buying and using cars
Posted: 01 May 2019 12:24 PM PDT
John Van Alst of the National Consumer Law Center has written this comprehensive report entitled Time to Stop Racing Cars: The Role of Race and Ethnicity in Buying and Using a Car.
Here is the executive summary:
For many in America, a car provides not only physical mobility but also economic mobility. Yet for years, studies have shown that the costs of buying, financing, and using a car can vary based on race or ethnicity. A consumer’s race or ethnicity can impact:
How much it costs to finance a car;
How much a consumer is charged for the car itself;
How much a consumer is charged for add-on products sold with the car;
The ability of consumers to successfully negotiate for better terms;
The rates paid to insure a car; and
The likelihood that civil fines or penalties will lead to suspensions of a driver’s license.
These disparities make cars more expensive for some races and ethnic groups and keep some families from getting a car at all. They contribute to the differences we see in the ability of families to get a car. For those at or below the poverty line, 13% of White households lack access to a car, compared to 31% of African American households and 20% of Hispanic households.
Many disparities arise because the market for cars is troublingly opaque and inconsistent. A more consistent and transparent marketplace would not only benefit consumers of color but all marketplace participants, including car dealers, finance entities, and insurers that want to
compete fairly and openly on price and quality on a level playing field.
Recommendations
To move toward this goal, federal and state policymakers should:
Ban dealer interest rate markups. Any compensation paid to the dealer as part of the financing process should not be based on the interest rate or other financing terms, and should be consistently applied to all transactions.
Amend the Equal Credit Opportunity Act (ECOA) regulations (Regulation B) to enable and require the collection and analysis of race and ethnicity data for auto financing transactions.
Prohibit discrimination in the pricing of goods and services.
Increase enforcement of the ECOA and state fair lending laws.
Increase enforcement against general abuses in the sale and financing of cars. Given the evidence of discrimination in the sale and finance of cars, it is likely that many other abuses, from yo-yo sales to failure to pay off existing liens, are more likely to affect people of color. Stepped-up enforcement against all abuses in the sale and finance of cars could help address disparities and level the playing field for everyone.
Take action on insurance rate setting to address disparities based upon race and ethnicity. End suspension of driver’s licenses for reasons beyond dangerous driving.
Posted: 02 May 2019 05:18 AM PDT
The members of the American Law Institute are poised to vote on May 21 on whether to adopt, for the first time, a Restatement of the Law of Consumer Contracts. That's right: A Restatement that would purport to state the law on, among other things, the take-or-leave-it contracts that we "agree to" every day and that seek to impose on us all manner of things that we know little or nothing about. [We've posted about this project several times before, including this warning posted nearly three years ago by law prof and consumer-law expert Dee Pridgen.]
The positions taken in Restatements are often highly influential with courts. For instance, most folks who litigate are aware of the influence Restatements have had on modern product-liability law.
Over at Credits Slips, Georgetown law prof Adam Levitin has posted this critique of the draft that the members will be voting on. I recommend reading Adam's post in full and taking a look at the links contained in it. In the meantime, check out these excerpts:
The draft Restatement of Consumer Contracts is founded on a set of six quantitative empirical studies about consumer contracts. This is a major and novel move for a Restatement; traditionally Restatements engaged in a qualitative distillation of the law. Professor Gregory Klass of Georgetown has [found] pervasive problems in the Reporters' coding. ... A draft version of Professor Klass's study inspired me and a number of other advisors to the Restatement project to attempt our own replication study of the empirical studies of contract modification and clickwrap enforcement. We found the same sort of pervasive problems as Professor Klass. While the ALI Council completely ignored our findings, we wrote them up into a companion article to Professor Klass's. * * *
For example, [the Restatement] would require findings of both procedural and substantive unconscionability for a contract to be unconscionable, while many states only require substantive unconscionability. Not surprisingly, I am unaware of any consumer law expert (other than the Reporters) who supports the project.
But the thing that should really be a wake up call that something is very, very off with this Restatement project is the presence of outside opposition, which is virtually unheard of in the ALI process. Every major consumer group (also here, here, and here), weighed in in opposition as well as 13 state attorneys general (and also here), and our former co-blogger (and also former ALI Vice-Chair), Senator Elizabeth Warren. Nor has the opposition been solely from consumer-minded groups. The US Chamber of Commerce and the major trade associations for banking, telecom, retailers, and insurers are also opposed (albeit with very different motivations). Simply put, it's hard to find anyone other than the Reporters (and the ALI Council, which has a strong tradition of deference to Reporters) who actually likes the draft Restatement.
From US PIRG Blog: The National Consumer Law Center on racial and ethnic disparities in buying and using cars
Posted: 01 May 2019 12:24 PM PDT
John Van Alst of the National Consumer Law Center has written this comprehensive report entitled Time to Stop Racing Cars: The Role of Race and Ethnicity in Buying and Using a Car.
Here is the executive summary:
For many in America, a car provides not only physical mobility but also economic mobility. Yet for years, studies have shown that the costs of buying, financing, and using a car can vary based on race or ethnicity. A consumer’s race or ethnicity can impact:
How much it costs to finance a car;
How much a consumer is charged for the car itself;
How much a consumer is charged for add-on products sold with the car;
The ability of consumers to successfully negotiate for better terms;
The rates paid to insure a car; and
The likelihood that civil fines or penalties will lead to suspensions of a driver’s license.
These disparities make cars more expensive for some races and ethnic groups and keep some families from getting a car at all. They contribute to the differences we see in the ability of families to get a car. For those at or below the poverty line, 13% of White households lack access to a car, compared to 31% of African American households and 20% of Hispanic households.
Many disparities arise because the market for cars is troublingly opaque and inconsistent. A more consistent and transparent marketplace would not only benefit consumers of color but all marketplace participants, including car dealers, finance entities, and insurers that want to
compete fairly and openly on price and quality on a level playing field.
Recommendations
To move toward this goal, federal and state policymakers should:
Ban dealer interest rate markups. Any compensation paid to the dealer as part of the financing process should not be based on the interest rate or other financing terms, and should be consistently applied to all transactions.
Amend the Equal Credit Opportunity Act (ECOA) regulations (Regulation B) to enable and require the collection and analysis of race and ethnicity data for auto financing transactions.
Prohibit discrimination in the pricing of goods and services.
Increase enforcement of the ECOA and state fair lending laws.
Increase enforcement against general abuses in the sale and financing of cars. Given the evidence of discrimination in the sale and finance of cars, it is likely that many other abuses, from yo-yo sales to failure to pay off existing liens, are more likely to affect people of color. Stepped-up enforcement against all abuses in the sale and finance of cars could help address disparities and level the playing field for everyone.
Take action on insurance rate setting to address disparities based upon race and ethnicity. End suspension of driver’s licenses for reasons beyond dangerous driving.
Peloton Fires Back At Music Publishers With Antitrust Allegations
Peloton Interactive Inc. isn’t going down without a fight in the face of an ongoing $150 million lawsuit. Only weeks after being accused of copyright infringement, the fitness and technology company has filed a countersuit against a group of music publishers and an industry trade organization.
In March, Peloton was hit with a massive copyright infringement lawsuit filed by the National Music Publishers’ Association (NMPA), which alleged that it has used thousands of songs in its workout videos without proper licensing. If found liable, Peloton could end up paying over $150 million in damages. According to the suit, “Peloton was fully aware that in order to lawfully embody copyrighted musical works in connection with visual images, copyright law required Peloton to obtain authorization from owners of the copyrighted works in the form of what is commonly referred to as a ‘synchronization’ or ‘sync’ license.”
In response, Peloton has claimed that it isn’t infringing at all. In today’s filing, the company states, “Peloton is not the bad actor the Plaintiffs portray it to be.” According to the countersuit, Peloton follows the law by paying all music publishers and PROs. “Peloton values the musical element of its service offering and respects – and pays – the music rightsholders associated with that offering,” the filing adds.
From: https://www.forbes.com/sites/legalentertainment/2019/04/30/peloton-fires-back-at-music-publishers-with-antitrust-allegations/#6a4e7d974aea
Peloton Interactive Inc. isn’t going down without a fight in the face of an ongoing $150 million lawsuit. Only weeks after being accused of copyright infringement, the fitness and technology company has filed a countersuit against a group of music publishers and an industry trade organization.
In March, Peloton was hit with a massive copyright infringement lawsuit filed by the National Music Publishers’ Association (NMPA), which alleged that it has used thousands of songs in its workout videos without proper licensing. If found liable, Peloton could end up paying over $150 million in damages. According to the suit, “Peloton was fully aware that in order to lawfully embody copyrighted musical works in connection with visual images, copyright law required Peloton to obtain authorization from owners of the copyrighted works in the form of what is commonly referred to as a ‘synchronization’ or ‘sync’ license.”
In response, Peloton has claimed that it isn’t infringing at all. In today’s filing, the company states, “Peloton is not the bad actor the Plaintiffs portray it to be.” According to the countersuit, Peloton follows the law by paying all music publishers and PROs. “Peloton values the musical element of its service offering and respects – and pays – the music rightsholders associated with that offering,” the filing adds.
From: https://www.forbes.com/sites/legalentertainment/2019/04/30/peloton-fires-back-at-music-publishers-with-antitrust-allegations/#6a4e7d974aea
From Bruce Johnson: 'We want our land back' | DC government wants Viacom to return land once leased by BET network
Viacom wants to lease land to Washington developer Douglas Jamaal and is taking the city to court.
Author: Bruce Johnson
Published: 2:33 PM EDT April 29, 2019
Updated: 9:08 PM EDT April 29, 2019WASHINGTON -- D.C. is locked in a court battle with entertainment cable channel BET over land the city practically gave away to help launch an African-American entertainment center in 1992.
The late Marion Barry was mayor at the time, and his friend Robert Johnson was co-founder of the Black Entertainment Television network. He started the company with a reported $15,000 personal loan.
Under Barry, the D.C. government agreed to lease nearly seven acres of commercial land it owned off New York Avenue in northeast to Johnson. BET would pay the city $100 per year and the city would kick in another $385,000 toward site development. The lease now calls for a payment of $300,000 a year. That's well under market value.
BET agreed to give city residents preference in hiring.The cable company created some notable national broadcasts over the years, including "Video Soul," "The BET Awards," "Video Gospel," "106 and Park" and more all originating from its studios in the D.C.
In 2002, Johnson and his wife at the time Sheila Johnson sold BET to Viacom for $2.3 billion. BET remained in D.C. But in 2017 Viacom closed the northeast campus and moved BET to New York. An estimated 500 jobs were lost in the move.
D.C.'s current Mayor Muriel Bowser wants the seven acres back. She said the deal with BET was contingent on the company remaining in D.C. as part of their economic development joint agreement.
She's refusing to sign off on Viacom's decision to assign the (BET) lease to Douglas Jamaal. He's one of Washington biggest developers.
Viacom is taking the city to court. The company is asking a superior court judge to issue a summary judgement requiring the city to abide by the original lease with BET.
https://www.wusa9.com/article/news/local/exclusive-we-want-our-land-back-dc-government-wants-viacom-to-return-land-once-leased-by-bet-network/65-0e76ee7e-b055-4f53-b89f-d46be3b267b0
Viacom wants to lease land to Washington developer Douglas Jamaal and is taking the city to court.
Author: Bruce Johnson
Published: 2:33 PM EDT April 29, 2019
Updated: 9:08 PM EDT April 29, 2019WASHINGTON -- D.C. is locked in a court battle with entertainment cable channel BET over land the city practically gave away to help launch an African-American entertainment center in 1992.
The late Marion Barry was mayor at the time, and his friend Robert Johnson was co-founder of the Black Entertainment Television network. He started the company with a reported $15,000 personal loan.
Under Barry, the D.C. government agreed to lease nearly seven acres of commercial land it owned off New York Avenue in northeast to Johnson. BET would pay the city $100 per year and the city would kick in another $385,000 toward site development. The lease now calls for a payment of $300,000 a year. That's well under market value.
BET agreed to give city residents preference in hiring.The cable company created some notable national broadcasts over the years, including "Video Soul," "The BET Awards," "Video Gospel," "106 and Park" and more all originating from its studios in the D.C.
In 2002, Johnson and his wife at the time Sheila Johnson sold BET to Viacom for $2.3 billion. BET remained in D.C. But in 2017 Viacom closed the northeast campus and moved BET to New York. An estimated 500 jobs were lost in the move.
D.C.'s current Mayor Muriel Bowser wants the seven acres back. She said the deal with BET was contingent on the company remaining in D.C. as part of their economic development joint agreement.
She's refusing to sign off on Viacom's decision to assign the (BET) lease to Douglas Jamaal. He's one of Washington biggest developers.
Viacom is taking the city to court. The company is asking a superior court judge to issue a summary judgement requiring the city to abide by the original lease with BET.
https://www.wusa9.com/article/news/local/exclusive-we-want-our-land-back-dc-government-wants-viacom-to-return-land-once-leased-by-bet-network/65-0e76ee7e-b055-4f53-b89f-d46be3b267b0
NY AG opens Facebook data probe
New York’s attorney general is launching an investigation into Facebook after it was reported last week that the company had scraped the email contacts of 1.5 million users without their consent, reported The Hill.
“It is time Facebook is held accountable for how it handles consumers’ personal information,” state Attorney General Letitia James said in a statement. “Facebook has repeatedly demonstrated a lack of respect for consumers’ information while at the same time profiting from mining that data.”
James added that the incident is the “latest demonstration that Facebook does not take seriously its role in protecting our personal information.”
A spokesperson for Facebook said it was “in touch with the New York State attorney general’s office” and that it would be “responding to their questions on this matter.”
The incident is just the latest in a series of crises for Facebook which is still facing regulatory blowback from its handling of the Cambridge Analytica scandal that was revealed a year ago.
On Wednesday, the company revealed that it had set aside $3 billion for a potential settlement with the Federal Trade Commission over the debacle, and that it anticipated a fine as high as $5 billion.
Full Content: The Hill https://thehill.com/policy/technology/440731-ny-ag-opens-investigation-into-facebook-for-harvesting-user-email-contacts
New York’s attorney general is launching an investigation into Facebook after it was reported last week that the company had scraped the email contacts of 1.5 million users without their consent, reported The Hill.
“It is time Facebook is held accountable for how it handles consumers’ personal information,” state Attorney General Letitia James said in a statement. “Facebook has repeatedly demonstrated a lack of respect for consumers’ information while at the same time profiting from mining that data.”
James added that the incident is the “latest demonstration that Facebook does not take seriously its role in protecting our personal information.”
A spokesperson for Facebook said it was “in touch with the New York State attorney general’s office” and that it would be “responding to their questions on this matter.”
The incident is just the latest in a series of crises for Facebook which is still facing regulatory blowback from its handling of the Cambridge Analytica scandal that was revealed a year ago.
On Wednesday, the company revealed that it had set aside $3 billion for a potential settlement with the Federal Trade Commission over the debacle, and that it anticipated a fine as high as $5 billion.
Full Content: The Hill https://thehill.com/policy/technology/440731-ny-ag-opens-investigation-into-facebook-for-harvesting-user-email-contacts
From DMN: Thousands of indie songwriters are now speaking out against major music publishers like Sony/ATV, Warner/Chappell, and Universal Music Publishing Group (UMPG) over a questionable ‘black box’ collection scheme.
As the U.S. Copyright Office mulls over competing bids to run the Mechanical Licensing Collective, indie songwriters and publishers are becoming increasingly vocal. Yesterday, the Copyright Office’s deadline for receiving comments on the selection of an MLC proposal lapsed, with hundreds of comments peppering the agency’s site.
Among the detailed commenters was the Nashville-based Songwriters Guild of America (SGA). The Guild is headed by songwriter and musician Rick Carnes and represents thousands of writers.
In a detailed filing submitted to the Copyright Office and Register of Copyrights, the SGA raised flags over plans by the major music publishers to claim hundreds of millions — if not billions — of dollars in unmatched and unclaimed royalties that likely belong to smaller songwriters.
The issue has been a serious sticking point since major publishers Warner/Chappell, Sony/ATV, and Universal Music Publishing Group (UMPG), among others, moved to control the Music Modernization Act’s Mechanical Licensing Collective, or MLC. Those publishers are represented by the National Music Publishers’ Association, or NMPA, which has remained silent on growing concerns about black box claiming processes.
The SGA emphatically underscored a serious conflict-of-interest problem. “As to the first criterion set forth in the prior section above, transparency and accountability, Congress had reasons for serious concern that certain inherent conflicts created by the MMA would require particularly intensive scrutiny of the Mechanical Collective at both the threshold of its designation, and over the later performance of its duties,” the SGA declared in its filing this week (full submission here).
Carnes is a board member of the AMLC, which opposes the NMPA-backed MLC submission. The group was largely formed to address perceived issues of unfair collusion among major music publishers.
Also chiming in: MusicAnswers, a group that has drawn more than 3,000 signatories for its ‘Declaration of Principles‘ surrounding fair music compensation and accounting transparency.
According to the group’s filing, major publishers are likely to claim more than a billion in unclaimed royalties, even though they have direct royalty-paying arrangements with major streaming companies like Spotify.
“A Board consisting largely of major music publishers, most of who have (or will have) direct licensing arrangements with digital music services, and whose royalties are therefore unlikely to flow through the MLC, strikes us as an inappropriate choice,” the group commented (full comment filing here).
“Moreover, because those same large publishers will receive the lion’s share of any distribution of unclaimed funds and would
have control over the distribution of those funds, it is a blatant conflict of interest for individuals representing those large publishers to occupy a significant number of the seats on the Board of Directors.”
Just yesterday, the highly-influential Recording Academy declined to endorse the NMPA-backed ‘consensus’ MLC, noting that the group needed time to vet through the competing proposals before making a decision.
From: https://www.digitalmusicnews.com/2019/04/23/indie-songwriters-nmpa-mlc/
From DMN:
In a Stunning Defeat, Madonna ‘Vogue’ Co-Writer Beats Warner Music Group in Court
Daniel Sanchez https://www.digitalmusicnews.com/2019/04/18/madonna-pettibone-v-warner-music-group/
April 18, 2019
A federal appeals court has found that Warner Music Group had wrongfully kept Madonna’s co-writer’s royalties – his livelihood – for years.
Two years ago, the co-writer behind Madonna’s ‘Vogue’ filed a lawsuit against a major music group.
Taking on Warner Music Group, Robert ‘Shep’ Pettibone claimed that the label group had withheld royalties from the 1990 hit.
He alleged both that WMG and publishing division Warner/Chappell “admittedly withheld and failed to pay Pettibone royalties owed to Plaintiff for its defense of the VMG Salsoul lawsuit, despite Plaintiff’s demand that they pay these royalties to him, and despite giving them notice of breach.”
VMG Salsoul had sued Madonna and Pettibone for allegedly infringing on a 1976 song, ‘Love Break.’ Siding with the pop singer and her songwriter, the 9th Circuit Court of Appeals upheld a lower court decision.
Yet, in overruling the lower court’s decision, the appeals court handed Pettibone some pretty bad news. He was no longer entitled to attorneys’ fees, which totaled over $500,000.
Now, Madonna’s co-writer has received a major victory in court.
How to take on a major label – and win.
When Pettibone challenged the ruling, WMG swiftly defended itself.
The major label group said it remained entitled to withhold royalties as part of “an indemnification agreement between the parties.” WMG had kept nearly $1 million in royalties.
Naturally, the songwriter disagreed. He stated that the indemnity clause doesn’t cover “a deductible under the errors-and-omissions policy.”
In another major setback for Pettibone, former Manhattan U.S. District Court Judge Richard J. Sullivan sided with WMG.
He ruled that the copyright administration contract granted the label group the right to withhold royalties.
“The agreement unambiguously requires Pettibone to indemnify Warner for the attorneys’ fees and costs it incurred.”
Following oral arguments late last month, Judge Sullivan’s now-fellow Circuit Judges Barrington D. Parker and Peter W. Hall disagreed.
Calling the contract language “tortured,” “garbled,” and “ambiguous,” both hinted that Judge Sullivan may have forced Pettibone to pay “enormous” legal fees just to defend his rights. After all, Warner Music Group had likely paid its own counsel, Alexander Kaplan, around $1 million for his services. So, why had he ruled WMG should keep Pettibone’s royalties?
Yesterday morning, the United States Court of Appeals for the Second Circuit in New York handed Warner Music Group a rare defeat.
In the summary order vacating the label’s previous win, the federal appeals court ordered Judge Sullivan to rule in favor of Pettibone.
The court found WMG’s agreement with Madonna’s songwriter was “pock-marked with ambiguity.” In fact, the agreement actually suggests each party would pay for their own legal fees.
“[T]o the extent Warner urges that it intended to bury…a highly unorthodox fee-shifting provision that is astonishing in its breadth, the contractual language undoubtedly ‘fails to disclose its purpose.’”
Thus, WMG had no right to withhold Pettibone’s royalties.
With Warner’s legal fees nearing $1 million, the federal appeals court ruled Pettibone shouldn’t have to pay the price.
“Warner would have us read the Agreement to shift attorneys’ fees of this magnitude to individual songwriters for any and all infringement claims brought against them, regardless of merit or frivolousness.
“Because the Agreement’s language does not come close to unambiguously requiring such an extraordinary result, we hold that Warner cannot enforce [the Agreement] against Pettibone.”
In a statement to Digital Music News, Richard Busch, Pettibone’s lawyer, hailed the ruling.
“I am thrilled for Shep. Warner literally wanted to apply the indemnification provision of their contract, even though Shep breached no warranty and we defeated the underlying claim of infringement.
“They have just kept his royalties that he relies on for years. This is a truly sweet victory, and will hopefully prevent others from trying to pull the same nonsense in the future.”
You can view the summary order here: https://www.scribd.com/document/406745256/Pettibone-v-WMG-Summary-Order#from_embed
In a Stunning Defeat, Madonna ‘Vogue’ Co-Writer Beats Warner Music Group in Court
Daniel Sanchez https://www.digitalmusicnews.com/2019/04/18/madonna-pettibone-v-warner-music-group/
April 18, 2019
A federal appeals court has found that Warner Music Group had wrongfully kept Madonna’s co-writer’s royalties – his livelihood – for years.
Two years ago, the co-writer behind Madonna’s ‘Vogue’ filed a lawsuit against a major music group.
Taking on Warner Music Group, Robert ‘Shep’ Pettibone claimed that the label group had withheld royalties from the 1990 hit.
He alleged both that WMG and publishing division Warner/Chappell “admittedly withheld and failed to pay Pettibone royalties owed to Plaintiff for its defense of the VMG Salsoul lawsuit, despite Plaintiff’s demand that they pay these royalties to him, and despite giving them notice of breach.”
VMG Salsoul had sued Madonna and Pettibone for allegedly infringing on a 1976 song, ‘Love Break.’ Siding with the pop singer and her songwriter, the 9th Circuit Court of Appeals upheld a lower court decision.
Yet, in overruling the lower court’s decision, the appeals court handed Pettibone some pretty bad news. He was no longer entitled to attorneys’ fees, which totaled over $500,000.
Now, Madonna’s co-writer has received a major victory in court.
How to take on a major label – and win.
When Pettibone challenged the ruling, WMG swiftly defended itself.
The major label group said it remained entitled to withhold royalties as part of “an indemnification agreement between the parties.” WMG had kept nearly $1 million in royalties.
Naturally, the songwriter disagreed. He stated that the indemnity clause doesn’t cover “a deductible under the errors-and-omissions policy.”
In another major setback for Pettibone, former Manhattan U.S. District Court Judge Richard J. Sullivan sided with WMG.
He ruled that the copyright administration contract granted the label group the right to withhold royalties.
“The agreement unambiguously requires Pettibone to indemnify Warner for the attorneys’ fees and costs it incurred.”
Following oral arguments late last month, Judge Sullivan’s now-fellow Circuit Judges Barrington D. Parker and Peter W. Hall disagreed.
Calling the contract language “tortured,” “garbled,” and “ambiguous,” both hinted that Judge Sullivan may have forced Pettibone to pay “enormous” legal fees just to defend his rights. After all, Warner Music Group had likely paid its own counsel, Alexander Kaplan, around $1 million for his services. So, why had he ruled WMG should keep Pettibone’s royalties?
Yesterday morning, the United States Court of Appeals for the Second Circuit in New York handed Warner Music Group a rare defeat.
In the summary order vacating the label’s previous win, the federal appeals court ordered Judge Sullivan to rule in favor of Pettibone.
The court found WMG’s agreement with Madonna’s songwriter was “pock-marked with ambiguity.” In fact, the agreement actually suggests each party would pay for their own legal fees.
“[T]o the extent Warner urges that it intended to bury…a highly unorthodox fee-shifting provision that is astonishing in its breadth, the contractual language undoubtedly ‘fails to disclose its purpose.’”
Thus, WMG had no right to withhold Pettibone’s royalties.
With Warner’s legal fees nearing $1 million, the federal appeals court ruled Pettibone shouldn’t have to pay the price.
“Warner would have us read the Agreement to shift attorneys’ fees of this magnitude to individual songwriters for any and all infringement claims brought against them, regardless of merit or frivolousness.
“Because the Agreement’s language does not come close to unambiguously requiring such an extraordinary result, we hold that Warner cannot enforce [the Agreement] against Pettibone.”
In a statement to Digital Music News, Richard Busch, Pettibone’s lawyer, hailed the ruling.
“I am thrilled for Shep. Warner literally wanted to apply the indemnification provision of their contract, even though Shep breached no warranty and we defeated the underlying claim of infringement.
“They have just kept his royalties that he relies on for years. This is a truly sweet victory, and will hopefully prevent others from trying to pull the same nonsense in the future.”
You can view the summary order here: https://www.scribd.com/document/406745256/Pettibone-v-WMG-Summary-Order#from_embed
Senator Elizabeth Warren of Massachusetts has offered legislation that would make it easier to prosecute corporate executives with the Corporate Executive Accountability Act.
The challenge with charging corporate executives is that they are often insulated from the decisions that violate the law. That can make it difficult, if not impossible, for prosecutors to prove they have the requisite intent. The former head of the Justice Department’s criminal division, Lanny A. Breuer, has defended the lack of prosecutions. In a PBS “Frontline” special, he said, “When we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases.” Former Attorney General Eric H. Holder Jr. told a Senate committee that some banks had become so big that prosecuting them would have negatively affected the economy. In other words, they had become “too big to jail.”
Ms. Warren’s bill would make it easier for federal prosecutors to pursue charges against individuals by holding executives liable if they “negligently permit or fail to prevent a violation of law.” The government often uses statutes like mail and wire fraud to pursue criminal cases. Those laws, however, require proving the defendant’s intent to defraud, which is unlikely when a senior executive has little to do with the actual misconduct. The new provision would allow punishment if the executive were merely negligent in overseeing the enterprise, which means the person acted in an objectively unreasonable manner.
The legislation has already drawn criticism. An article in Slate argued that “the proposal to put corporate executives in jail for acting negligently is a very bad idea.” The authors’ main objection is that negligence is a far lower standard, so executives with minimal culpability could end up in prison.
Holding business executives criminally responsible for violations by the company is not a new concept. In United States v. Park, decided in 1975, the Supreme Court upheld the conviction of the chief executive of Acme Markets for violating a provision of the Food, Drug and Cosmetic Act, which makes it a crime to ship adulterated or misbranded food. The court found that the statute imposed strict liability on the executive, which “reflected the view both that knowledge or intent were not required to be proved in prosecutions under its criminal provisions, and that responsible corporate agents could be subjected to the liability thereby imposed.”
In both the Clean Water Act and the Clean Air Act, Congress provided that a person who violates the law can include “any responsible corporate officer.” In United States v. Iverson, the federal appeals court in San Francisco held that a corporate officer can be held liable “only when the officer in fact exercises control over the activity causing the discharge or has an express corporate duty to oversee the activity.”
Ms. Warren’s proposal is much broader than the food and environmental laws, however. It would apply to any company with more than $1 billion in annual revenue, and the punishment for an executive would be up to one year in prison for a first violation, and as much as three years for a second offense. Those are much more severe penalties than typically imposed for crimes resulting from a lack of adequate oversight.
In addition, the proposal would apply if a company engaged in a civil violation of federal or state law that affected the “health, safety, finances or personal data” of 1 percent of the population of the United States or any individual state, including entering into a settlement agreement with regulators. That provision could encourage companies to fight regulatory claims rather than settling them, ratcheting up the cost of pursuing cases by civil regulators.
One potential limitation in the law is that it refers specifically to a Securities and Exchange Commission rule that defines an “executive officer” as the president of a company or any vice president in charge of a principal business unit or subsidiary. But that rule applies only to companies that have securities registered with the S.E.C., which means that privately held corporations could avoid the strictures of the new negligence standard by not selling securities to the general public. By using the S.E.C.’s definition of executive, the law would not apply to private companies. That may discourage companies from going public to avoid coming under the provision.
The proposal would add a powerful tool to the arsenal of federal prosecutors to pursue cases against corporate executives. But the key question is whether using negligence as the standard for criminal liability is the best means to police corporate leaders.
Proving negligence is a far lower bar than proving intent. If it is too low, then companies may do everything to fight any claims of a violation. Executives may even cover up violations rather than reporting them if they are more worried about personal exposure to a prison term than ensuring their companies are in compliance with the law.
And that would end up reducing compliance with the law.
Credit: https://www.nytimes.com/2019/04/22/business/dealbook/elizabeth-warren-finance-executives.html
The challenge with charging corporate executives is that they are often insulated from the decisions that violate the law. That can make it difficult, if not impossible, for prosecutors to prove they have the requisite intent. The former head of the Justice Department’s criminal division, Lanny A. Breuer, has defended the lack of prosecutions. In a PBS “Frontline” special, he said, “When we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases.” Former Attorney General Eric H. Holder Jr. told a Senate committee that some banks had become so big that prosecuting them would have negatively affected the economy. In other words, they had become “too big to jail.”
Ms. Warren’s bill would make it easier for federal prosecutors to pursue charges against individuals by holding executives liable if they “negligently permit or fail to prevent a violation of law.” The government often uses statutes like mail and wire fraud to pursue criminal cases. Those laws, however, require proving the defendant’s intent to defraud, which is unlikely when a senior executive has little to do with the actual misconduct. The new provision would allow punishment if the executive were merely negligent in overseeing the enterprise, which means the person acted in an objectively unreasonable manner.
The legislation has already drawn criticism. An article in Slate argued that “the proposal to put corporate executives in jail for acting negligently is a very bad idea.” The authors’ main objection is that negligence is a far lower standard, so executives with minimal culpability could end up in prison.
Holding business executives criminally responsible for violations by the company is not a new concept. In United States v. Park, decided in 1975, the Supreme Court upheld the conviction of the chief executive of Acme Markets for violating a provision of the Food, Drug and Cosmetic Act, which makes it a crime to ship adulterated or misbranded food. The court found that the statute imposed strict liability on the executive, which “reflected the view both that knowledge or intent were not required to be proved in prosecutions under its criminal provisions, and that responsible corporate agents could be subjected to the liability thereby imposed.”
In both the Clean Water Act and the Clean Air Act, Congress provided that a person who violates the law can include “any responsible corporate officer.” In United States v. Iverson, the federal appeals court in San Francisco held that a corporate officer can be held liable “only when the officer in fact exercises control over the activity causing the discharge or has an express corporate duty to oversee the activity.”
Ms. Warren’s proposal is much broader than the food and environmental laws, however. It would apply to any company with more than $1 billion in annual revenue, and the punishment for an executive would be up to one year in prison for a first violation, and as much as three years for a second offense. Those are much more severe penalties than typically imposed for crimes resulting from a lack of adequate oversight.
In addition, the proposal would apply if a company engaged in a civil violation of federal or state law that affected the “health, safety, finances or personal data” of 1 percent of the population of the United States or any individual state, including entering into a settlement agreement with regulators. That provision could encourage companies to fight regulatory claims rather than settling them, ratcheting up the cost of pursuing cases by civil regulators.
One potential limitation in the law is that it refers specifically to a Securities and Exchange Commission rule that defines an “executive officer” as the president of a company or any vice president in charge of a principal business unit or subsidiary. But that rule applies only to companies that have securities registered with the S.E.C., which means that privately held corporations could avoid the strictures of the new negligence standard by not selling securities to the general public. By using the S.E.C.’s definition of executive, the law would not apply to private companies. That may discourage companies from going public to avoid coming under the provision.
The proposal would add a powerful tool to the arsenal of federal prosecutors to pursue cases against corporate executives. But the key question is whether using negligence as the standard for criminal liability is the best means to police corporate leaders.
Proving negligence is a far lower bar than proving intent. If it is too low, then companies may do everything to fight any claims of a violation. Executives may even cover up violations rather than reporting them if they are more worried about personal exposure to a prison term than ensuring their companies are in compliance with the law.
And that would end up reducing compliance with the law.
Credit: https://www.nytimes.com/2019/04/22/business/dealbook/elizabeth-warren-finance-executives.html
New civil suits against opioid pharma distributors from the attorneys general in New York, Vermont and Washington State
The suits accuse distributors of devising systems to evade regulators. They allege that the companies warned many pharmacies at risk of being reported to the Drug Enforcement Administration, helped others to increase and circumvent limits on how many opioids they were allowed to buy, and often gave advance notice on the rare occasions they performed audits.
The complaints are here:
NY: https://www.documentcloud.org/documents/5817053-Unredacted-NYOAG-complaint.html
Vermont: https://www.documentcloud.org/documents/5793376-Vermont-vs-Opioid-Distributors.html
Washington State: https://www.documentcloud.org/documents/5793374-Wash-State-vs-Distributors.html
The suits accuse distributors of devising systems to evade regulators. They allege that the companies warned many pharmacies at risk of being reported to the Drug Enforcement Administration, helped others to increase and circumvent limits on how many opioids they were allowed to buy, and often gave advance notice on the rare occasions they performed audits.
The complaints are here:
NY: https://www.documentcloud.org/documents/5817053-Unredacted-NYOAG-complaint.html
Vermont: https://www.documentcloud.org/documents/5793376-Vermont-vs-Opioid-Distributors.html
Washington State: https://www.documentcloud.org/documents/5793374-Wash-State-vs-Distributors.html
NYT: Apple Inc. purges rivals from its store
Apple Cracks Down on Apps That Fight iPhone AddictionLast year, with much fanfare, the tech giant unveiled a screen-time tracker of its own. Then it quietly began purging competitors from its store.
By JACK NICAS
https://www.nytimes.com/2019/04/27/technology/apple-screen-time-trackers.html?rref=collection%2Ftimestopic%2FApple%20Inc
Apple Cracks Down on Apps That Fight iPhone AddictionLast year, with much fanfare, the tech giant unveiled a screen-time tracker of its own. Then it quietly began purging competitors from its store.
By JACK NICAS
https://www.nytimes.com/2019/04/27/technology/apple-screen-time-trackers.html?rref=collection%2Ftimestopic%2FApple%20Inc
NYT: The raisins mafia
Excerpt:
Mr. Overly [of Sun-Maid] attended a meeting of some raisin industry players in the back room of a restaurant in Fresno, Calif. This introduction left him shaken. “I’m not saying this lightly, because — you can read about this in different spots — people kind of think there’s this raisin mafia out there and that kind of stuff,” Mr. Overly said.
He said that he asked the group how they thought they could work together. “And the answer I got back was nothing short of collusion,” he said. While no one was proposing they take action, the anti-competitive tactics discussed in that back room, he said, were “completely illegal.”
As he tried to make changes in the raisin industry and at his own company, Mr. Overly said he faced intimidation, harassing phone calls and multiple death threats.
https://www.nytimes.com/2019/04/27/style/sun-maid-raisin-industry.html?searchResultPosition=1
Excerpt:
Mr. Overly [of Sun-Maid] attended a meeting of some raisin industry players in the back room of a restaurant in Fresno, Calif. This introduction left him shaken. “I’m not saying this lightly, because — you can read about this in different spots — people kind of think there’s this raisin mafia out there and that kind of stuff,” Mr. Overly said.
He said that he asked the group how they thought they could work together. “And the answer I got back was nothing short of collusion,” he said. While no one was proposing they take action, the anti-competitive tactics discussed in that back room, he said, were “completely illegal.”
As he tried to make changes in the raisin industry and at his own company, Mr. Overly said he faced intimidation, harassing phone calls and multiple death threats.
https://www.nytimes.com/2019/04/27/style/sun-maid-raisin-industry.html?searchResultPosition=1
1911 USDOJ decree against Standard Oil was terminated earlier this month
Until just a few days ago, Standard Oil was still the subject of a Justice Department decree forcing it to split into dozens of smaller chunks. A decree that came out of former President Theodore Roosevelt's lawsuit [https://supreme.justia.com/cases/federal/us/221/1/] against Standard Oil, which his government won 108 years ago.
Yet as The Wall Street Journal reports, [https://www.wsj.com/articles/justice-department-closes-book-on-landmark-standard-oil-breakup-11555418344?tesla=y&ns=prod/accounts-wsj] the government recently asked a St. Louis federal court to end the 1911 decree, officially declaring it was finished breaking up Standard Oil.
After winning what historian Daniel Yergin calls "the most famous antitrust case" in U.S. history, the government only tried enforcing its resulting decree once, the Journal notes. Standard Oil still split up into 34 smaller companies over the years, including today's behemoths Exxon and Chevron. But since the decree only applied to Standard and not the entire industry, the Justice Department recently moved to end it and let newer, broader laws run their course.
Until just a few days ago, Standard Oil was still the subject of a Justice Department decree forcing it to split into dozens of smaller chunks. A decree that came out of former President Theodore Roosevelt's lawsuit [https://supreme.justia.com/cases/federal/us/221/1/] against Standard Oil, which his government won 108 years ago.
Yet as The Wall Street Journal reports, [https://www.wsj.com/articles/justice-department-closes-book-on-landmark-standard-oil-breakup-11555418344?tesla=y&ns=prod/accounts-wsj] the government recently asked a St. Louis federal court to end the 1911 decree, officially declaring it was finished breaking up Standard Oil.
After winning what historian Daniel Yergin calls "the most famous antitrust case" in U.S. history, the government only tried enforcing its resulting decree once, the Journal notes. Standard Oil still split up into 34 smaller companies over the years, including today's behemoths Exxon and Chevron. But since the decree only applied to Standard and not the entire industry, the Justice Department recently moved to end it and let newer, broader laws run their course.
Jamie McAndrews on anonymous internet payments
Expert economist McAndrews' observation is startlingly simple: private companies do not have the incentive to agree to anonymous internet payments. Here is part of the otline of a talk he gave in 2017:
Conjecture: anonymity of internet payments will be underprovided by the private sector. Providers of internet payment, such as Visa, Paypal, Square, etc. face two impediments in providing sufficient anonymity:
1. The inability to commit not to utilize information gained during a transaction.
2. The usefulness of the information revealed is dependent on a host of related investments made by the parties.
An additional impediment relates to the consumer: The information revealed by a consumer in a transaction may have “external value.” Combined with information about other transactions, it can assist in forecasting demand of other consumers or an individual’s future actions. In this environment, Coasean bargaining is unlikely to result in an optimal contract, and anonymity will be underprovided.
Conclusion: Currency offers anonymity. This can be valuable to society in a variety of environments, not only in criminal or illicit transactions. The internet is an information-rich environment because of the ability to collect information cheaply. The private sector has insufficient incentives to provide anonymity of transactions. Public authorities have a role in promoting greater anonymity and privacy in Internet payments and transactions.
https://www.interdependence.org/wp-content/uploads/2017/02/Jamie-McAndrews.pdf
Expert economist McAndrews' observation is startlingly simple: private companies do not have the incentive to agree to anonymous internet payments. Here is part of the otline of a talk he gave in 2017:
Conjecture: anonymity of internet payments will be underprovided by the private sector. Providers of internet payment, such as Visa, Paypal, Square, etc. face two impediments in providing sufficient anonymity:
1. The inability to commit not to utilize information gained during a transaction.
2. The usefulness of the information revealed is dependent on a host of related investments made by the parties.
An additional impediment relates to the consumer: The information revealed by a consumer in a transaction may have “external value.” Combined with information about other transactions, it can assist in forecasting demand of other consumers or an individual’s future actions. In this environment, Coasean bargaining is unlikely to result in an optimal contract, and anonymity will be underprovided.
Conclusion: Currency offers anonymity. This can be valuable to society in a variety of environments, not only in criminal or illicit transactions. The internet is an information-rich environment because of the ability to collect information cheaply. The private sector has insufficient incentives to provide anonymity of transactions. Public authorities have a role in promoting greater anonymity and privacy in Internet payments and transactions.
https://www.interdependence.org/wp-content/uploads/2017/02/Jamie-McAndrews.pdf
Decoding the Cost of College: The Case for Transparent Financial Aid Award Letters
POLICY PAPER
By
Stephen Burd,Rachel Fishman,Laura Keane,Julie Habbert.Ben Barrett,Kim Dancy,Sophie Nguyen, Brendan Williams
June 5, 2018Executive SummaryStudents and families confront a detrimental lack of information and transparency when making one of the biggest financial decisions of their lives: paying for college.
New America and uAspire, a nonprofit leader on college affordability, analyzed thousands of financial aid award letters and found not only that financial aid is insufficient to cover the cost of college for many students, but also that award letters lack consistency and transparency. As a result, it is exceedingly difficult for students and families to make a financially-informed college decision. While solutions for tackling the cost barrier may be complex, solutions to improve award letter terminology and formatting are well within reach.
Through a quantitative analysis of over 11,000 financial aid award letters, we found that students who receive a Pell Grant are still left to cover a significant gap—an average of nearly $12,000. The gap persisted even when students made cost-saving decisions about where to attend (public versus private colleges and universities) or where to live (at home versus on campus). Given that financial aid falls short, clear and consistent communication on award letters is critical.
After a thorough qualitative review using a subset of 515 award letters from unique institutions, we emerged with seven key findings:
To read the entire report, please download it here. https://newamerica.org/documents/2301/Decoding_the_Cost_of_College_Final_6218.pdf
POLICY PAPER
By
Stephen Burd,Rachel Fishman,Laura Keane,Julie Habbert.Ben Barrett,Kim Dancy,Sophie Nguyen, Brendan Williams
June 5, 2018Executive SummaryStudents and families confront a detrimental lack of information and transparency when making one of the biggest financial decisions of their lives: paying for college.
New America and uAspire, a nonprofit leader on college affordability, analyzed thousands of financial aid award letters and found not only that financial aid is insufficient to cover the cost of college for many students, but also that award letters lack consistency and transparency. As a result, it is exceedingly difficult for students and families to make a financially-informed college decision. While solutions for tackling the cost barrier may be complex, solutions to improve award letter terminology and formatting are well within reach.
Through a quantitative analysis of over 11,000 financial aid award letters, we found that students who receive a Pell Grant are still left to cover a significant gap—an average of nearly $12,000. The gap persisted even when students made cost-saving decisions about where to attend (public versus private colleges and universities) or where to live (at home versus on campus). Given that financial aid falls short, clear and consistent communication on award letters is critical.
After a thorough qualitative review using a subset of 515 award letters from unique institutions, we emerged with seven key findings:
- Confusing Jargon and Terminology: Of the 455 colleges that offered an unsubsidized student loan, we found 136 unique terms for that loan, including 24 that did not include the word “loan.”
- Omission of the Complete Cost: Of our 515 letters, more than one-third did not include any cost information with which to contextualize the financial aid offered.
- Failure to Differentiate Types of Aid: Seventy percent of letters grouped all aid together and provided no definitions to indicate to students how grants and scholarships, loans, and work-study all differ.
- Misleading Packaging of Parent PLUS Loans: Nearly 15 percent of letters included a PLUS loan as an “award,” making the financial aid package appear far more generous than it really was.
- Vague Definitions and Poor Placement of Work-Study: Of institutions that offered work-study, 70 percent provided no explanation of work-study and how it differs from other types of aid.
- Inconsistent Bottom Line Calculations: In our sample, only 40 percent calculated what students would need to pay, and those 194 institutions had 23 different ways of calculating remaining costs.
- No Clear Next Steps: Only about half of letters provided information about what to do to accept or decline awards, and those that did had inconsistent policies.
To read the entire report, please download it here. https://newamerica.org/documents/2301/Decoding_the_Cost_of_College_Final_6218.pdf
From Public Citizen Consumer Blog
Sandy Hook, gun-maker liability, and state consumer-protection law
Posted: 17 Apr 2019 04:37 AM PDT
Take a good look at this easy-to-read, informative essay by law prof Heidi Li Feldman in the Harvard Law Review blog. In Why the Latest Ruling in the Sandy Hook Shooting Litigation Matters, Feldman explains that, among other things, the Connecticut Supreme Court's recent decision in Soto v. Bushmaster Firearms (concerning the prospect of liability for gun manufacturers, distributors, and direct sellers in the Sandy Hook massacre) is potentially important as a matter of state UDAP law.
NYT on the CFPB: "Mick Mulvaney’s Master Class in Destroying the Government From Within"
Posted: 16 Apr 2019 06:21 AM PDT
The New York Times has a lengthy article on Mick Mulvaney's tenure as acting director of the Consumer Financial Protection Bureau.
This account of Mulvaney’s tenure is based on interviews with more than 60 current or former bureau employees, current and former Mulvaney aides, consumer advocates and financial-industry executives and lobbyists, as well as hundreds of pages of internal bureau documents obtained by The New York Times and others. When Mulvaney took over, the fledgling C.F.P.B. was perhaps Washington’s most feared financial regulator: It announced dozens of cases annually against abusive debt collectors, sloppy credit agencies and predatory lenders, and it was poised to force sweeping changes on the $30 billion payday-loan industry, one of the few corners of the financial world that operates free of federal regulation. What he left behind is an agency whose very mission is now a matter of bitter dispute. “The bureau was constructed really deliberately to protect ordinary people,” says Lisa Donner, the head of Americans for Financial Reform. “He’s taken it apart — dismantled it, piece by piece, brick by brick.”
Although Mulvaney has move don to serve as White House Chief of Staff, he had a notable on the work of the CFPB.
Over the last year, Mulvaney’s temporary hiring freeze has turned into an indefinite one, slowly shrinking the C.F.P.B.’s staff by attrition. Bureau news releases, once packed with colorful details about abusive lending practices, have been toned down to dry legalese. According to a report by Christopher Peterson, a senior fellow at the Consumer Federation of America, enforcement at the bureau appears to have dwindled radically. In 2018, the bureau announced just 11 lawsuits or settlements, less than a third of the number during Cordray’s last year. In the months since Mulvaney reorganized the Office of Fair Lending, the bureau has not brought a single case alleging illegal discrimination. While Mulvaney pledged data-driven enforcement, his bureau brought only one case against debt collectors, who account for more complaints to the C.F.P.B. than almost any other industry. Where Mulvaney or his successor have allowed cases to go forward, lenders have often settled with lowered fines or none at all. When the bureau settled a three-year prosecution of a group of payday lenders called NDG Enterprise — which found that the group had falsely threatened American customers with arrest and imprisonment if they failed to repay loans — NDG walked away without paying a cent.
The full article is here.
Recent legislation overhauled CFIUS, known as the Foreign Investment Risk Review Modernization Act.
The measure emphasized the development of methods for the ongoing monitoring of merger and acquisition agreements for security concerns, and imposing sanctions.
The modernization act, which was signed into law in August, stipulated that CFIUS "shall develop and agree upon methods for evaluating compliance with any agreement entered into or condition imposed with respect to a covered transaction that will allow the committee to adequately ensure compliance without unnecessarily diverting Committee resources from assessing any new covered transaction."
A rcently announced penalty is also just one recent crackdown from CFIUS to make headlines in recent weeks.
Cybersecurity firm Cofense said April 11 that one of its minority investors, Pamplona Capital Management, will sell its stake following a yearlong review of its investment.
Virginia-headquartered Cofense, formerly known as PhishMe, had announced in February 2018 that it would be bought by a private equity consortium in a deal that valued the cybersecurity firm at $400 million. The buyer group included Pamplona, Adam Street Partners and Telstra Ventures.
The following month, CFIUS began taking a closer look at the involvement of Pamplona, which is reported to be partially backed by a Russian oligarch.
After Pamplona agreed to give up its board seats and sever communications with Cofense, the private equity firm in October agreed to sell its stake in the cybersecurty firm in a transaction being overseen by a CFIUS-approved trustee.
Toshiba Corp. also confirmed on April 11 that China's ENN Ecological Holdings Co. Ltd. had backed out of a planned 91.3 billion yen ($815 million) deal for the Japanese conglomerate's flagging U.S. liquid natural gas business after the transaction failed to secure regulatory approvals in the U.S. and China.
Tokyo-based Toshiba said at the time that ENN's board moved to terminate the planned acquisition of Toshiba America LNG Corp. as the deal had yet to secure clearance from CFIUS and China's State Administration of Foreign Exchange.
The Cofense and Toshiba matters came on the heels of a March report by The Wall Street Journal indicating that China's Beijing Kunlun Tech Co. Ltd. had been ordered to sell the majority stake in acquired in gay dating app Grindr in 2016 due to concerns about the Chinese government's potential access to users' data.
Despite the recent headlines, however, civil penalties — and blocked deals, for that matter — are still few and far between.
Read more at (Pay wall) : https://www.law360.com/mergersacquisitions/articles/1150189/-1m-cfius-fine-is-rare-public-enforcement-flex?nl_pk=fb4cbe8b-4906-46d6-b8e5-a9b207ebe544&utm_source=newsletter&utm_medium=email&utm_campaign=mergersacquisitions&read_more=1?copied=1dit.
The measure emphasized the development of methods for the ongoing monitoring of merger and acquisition agreements for security concerns, and imposing sanctions.
The modernization act, which was signed into law in August, stipulated that CFIUS "shall develop and agree upon methods for evaluating compliance with any agreement entered into or condition imposed with respect to a covered transaction that will allow the committee to adequately ensure compliance without unnecessarily diverting Committee resources from assessing any new covered transaction."
A rcently announced penalty is also just one recent crackdown from CFIUS to make headlines in recent weeks.
Cybersecurity firm Cofense said April 11 that one of its minority investors, Pamplona Capital Management, will sell its stake following a yearlong review of its investment.
Virginia-headquartered Cofense, formerly known as PhishMe, had announced in February 2018 that it would be bought by a private equity consortium in a deal that valued the cybersecurity firm at $400 million. The buyer group included Pamplona, Adam Street Partners and Telstra Ventures.
The following month, CFIUS began taking a closer look at the involvement of Pamplona, which is reported to be partially backed by a Russian oligarch.
After Pamplona agreed to give up its board seats and sever communications with Cofense, the private equity firm in October agreed to sell its stake in the cybersecurty firm in a transaction being overseen by a CFIUS-approved trustee.
Toshiba Corp. also confirmed on April 11 that China's ENN Ecological Holdings Co. Ltd. had backed out of a planned 91.3 billion yen ($815 million) deal for the Japanese conglomerate's flagging U.S. liquid natural gas business after the transaction failed to secure regulatory approvals in the U.S. and China.
Tokyo-based Toshiba said at the time that ENN's board moved to terminate the planned acquisition of Toshiba America LNG Corp. as the deal had yet to secure clearance from CFIUS and China's State Administration of Foreign Exchange.
The Cofense and Toshiba matters came on the heels of a March report by The Wall Street Journal indicating that China's Beijing Kunlun Tech Co. Ltd. had been ordered to sell the majority stake in acquired in gay dating app Grindr in 2016 due to concerns about the Chinese government's potential access to users' data.
Despite the recent headlines, however, civil penalties — and blocked deals, for that matter — are still few and far between.
Read more at (Pay wall) : https://www.law360.com/mergersacquisitions/articles/1150189/-1m-cfius-fine-is-rare-public-enforcement-flex?nl_pk=fb4cbe8b-4906-46d6-b8e5-a9b207ebe544&utm_source=newsletter&utm_medium=email&utm_campaign=mergersacquisitions&read_more=1?copied=1dit.
The Airbus and Boeing Duopoly: Would More Aggressive Antitrust Enforcement Benefit the Commercial Aviation Industry?
By Grant Petrosyan, Esq. (Constantine Cannon)1
Click here for a PDF version of the article https://www.competitionpolicyinternational.com/wp-content/uploads/2019/04/North-America-Column-April-2019-4-Full.pdf
It is no secret that Airbus SE (“Airbus”) and The Boeing Company (“Boeing”) dominate the commercial aircraft manufacturing industry. According to the Teal Group, an aerospace market analysis company, Airbus and Boeing make up 99 percent of global large aircraft orders.2 And large airplane orders comprise more than 90 percent of the total airplane market. As the numbers indicate, Airbus and Boeing do not have much, if any, competition other than between themselves. Further, in recent years, Airbus and Boeing have merged with their smaller competitors, namely, Canada’s Bombardier and Brazil’s Embraer. These mergers have not faced much, if any, resistance from global antitrust enforcement agencies despite the evident consolidation in an already under-competitive industry.
Boeing, founded in Seattle, Washington in 1916, has been one of the largest aviation companies for more than a century.3 Airbus is a European aerospace manufacturing company founded in 1970, tracing its roots to an agreement entered among the French, German, and British governments. The governments agreed that their collaboration was necessary to create an aircraft manufacturing company that could rival Boeing. Today, these two companies dominate an industry which, fifty years ago, had a number of competitors. In the mid-twentieth century, global airlines could choose from companies including Douglas Aircraft Company, Lockheed, Sud-Aviation, and Boeing.4
Until recently, Bombardier and Embraer were growing rivals to Boeing and Airbus. However, Bombardier was unable to sustain its operations and its commercial division was essentially absorbed by Airbus through a joint-venture agreement in 2018.5 The primary reason for Bombardier’s decision to enter into this agreement was its inability to meet financial obligations as its costs soared to $2 billion above budget. “Bombardier of Canada had the best hope of getting in but they simply ran out of cash and this year their jetliner was basically absorbed by Airbus…” stated Richard Aboulafia, Vice President of Analysis, Teal Group, in a CNBC report regarding the Airbus and Boeing duopoly. As a result, Airbus and Bombardier made a deal that gave Airbus a slightly more than 50 percent stake in Bombardier’s C Series. Shortly after, Airbus announced it would discontinue production of its A319 — a competing aircraft to Bombardier’s C Series.
A year after the Airbus-Bombardier deal was announced, Boeing began negotiations to purchase Embraer’s commercial aviation business. The Brazilian government owns a large stake in Embraer and, despite initial reservations, Brazil’s President Jair Bolsonaro approved the deal in January 2019.6 On February 25, Embraer’s shareholders voted to sell 80 percent of the company’s commercial plane division to Boeing for $4.2 billion. Although the transaction must still be approved by regulators, it is expected that the deal will close by the end of 2019. Once finalized, Boeing will have total control of the new venture.
Other countries are trying to enter the aircraft manufacturing space, but so far have been unable to make a significant impact in the industry. The Commercial Aircraft Corporation of China (Comac), the leading Chinese aircraft manufacturer, was founded in 2008 and is sponsored by the government of China. In response to CNBC’s inquiry regarding competition in the industry, a spokesperson for Airbus stated, “The Airbus-Boeing duopoly isn’t likely to last forever. In general, we see China as the next major competitor though in some 10 to 20 years from now.”7 However, considering the immense investment and time required from the conception of a new plane model to delivery to a customer, competing with Airbus and Boeing will prove to be a great challenge for the Russian and Chinese manufacturers. As a result, it is more than likely that the Airbus and Boeing duopoly will continue, and even strengthen, in the near future.
Building airplanes is not cheap. A single airplane can cost millions of dollars in construction fees alone. Considering the additional costs of safety and regulatory compliance as well as maintenance, operations, etc., it is no surprise that competitors in this industry are few and far between. “The barriers to entry in this business are huge in terms of capital requirements, in terms of technology, experience, customer support, customer finance,” stated Aboulafia.8 Such enormous overhead expenses make economies of scale critical to an aircraft manufacturer’s viability.
Because of their economies of scale, Airbus and Boeing today have tremendous advantages over potential new entrants to the market — even Comac, which is sponsored by the world’s second largest economy. Furthermore, Airbus and Boeing both have completed extensive research and development over the years, and have established production capability and network support.
Indeed, Airbus and Boeing report growth year after year. Airbus delivered 800 planes in 2018, an 11 percent increase from 2017. Boeing set a record of 806 planes in 2018, a 5.6 percent growth from the previous year. The consequences and implications of Airbus and Boeing’s dominance are vast and impactful. As the commercial aviation industry affects everyone from airline companies to passengers, such consolidation and market power could have long lasting effects on prices, quality, innovation, and choice. Boeing has already announced an increase for their commercial list prices by nearly 4 percent in 2019 compared to the previous year.9
Notwithstanding the evident market concentration that has led to the Boeing and Airbus duopoly, there is debate whether increased competition will ultimately benefit or harm airlines and passengers. On the one hand, competition is integral to any successful, productive market as it ensures lower prices for consumers and enhances quality and innovation. On the other hand, critics of stronger enforcement argue that while competition is preferable in most cases, the aviation industry is unique and basic economic and competition principles do not apply in this space as they would not only harm competition, but also harm airlines and passengers as well as entire countries’ economies.
One of the leading arguments against strict antitrust enforcement in the aircraft manufacturing industry is that, because Airbus and other aircraft manufacturers are either government-subsidized or state-owned, it is very difficult for private companies like Boeing to compete with wealthy governments. For instance, Robert D. Atkinson, President of the Information Technology and Innovation Foundation, a public policy think tank, discussed why more competition in the aircraft industry would result in negative consequences.10 He argued that increased competition by foreign companies will harm U.S. aerospace companies, U.S. consumers, and, ultimately, the U.S. economy.
According to Atkinson, those who view the Airbus and Boeing duopoly, including their recent mergers with Embraer and Bombardier, as anticompetitive are essentially following a simplistic approach to antitrust enforcement. He wrote, “When it comes to aviation, Economics 101 is a children’s fairy tale.” He explained that the aviation industry is unique, and that Boeing’s competitors are “deep-pocketed rivals backed by governments.”11 It is true that Airbus was formed by the governments of France, England, and Germany, and has received many government subsidies since its inception. Additionally, many European airlines purchase most of their airplanes from Airbus. In fact, Atkinson points out that in the early 2010s, Air France operated a fleet that was 71 percent Airbus; Lufthansa’s fleet was 62 percent Airbus; Alitalia’s 71 percent; and Iberia’s 100 percent.12 In comparison, the percentage of Airbus airplanes purchased by various non-European airlines was much lower – ranging from 13-29 percent.13
Another government-subsidized aircraft manufacturer is China’s Comac. Comac is a state-sponsored company that started with $2.8 billion in capital from the central government of China. To date, the company has received various subsidies and other benefits from state and regional governments.14 Financial and other assistance from the Chinese government will contribute greatly to the strength and growth of Comac. In his article, Atkinson states, “[t]he free market would never ever have funded the creation of Comac.”15
Those who oppose more competition in the aircraft manufacturing industry argue that Boeing will no longer be competitive in a market where its rivals are all supported by their respective governments. They further argue that consumers will be worse off because, as demand and therefore production decreases for Boeing, its prices will increase to compensate for the loss of economies of scale.16
Other opponents of more aggressive antitrust enforcement in the commercial aircraft manufacturing industry argue that consolidation is just simple economics. They claim that, because it requires enormous capital to design, plan, and build an airplane, and enormous scale to compete, the aircraft manufacturing industry is unique and antitrust enforcement agencies should not apply the same principles as are applied to other industries.17
The question thus remains the same: should antitrust enforcement agencies exercise more vigor in blocking mergers and in prosecuting other potentially anticompetitive conduct in the commercial aircraft manufacturing industry? Or will doing so leave domestic companies, consumers, and the economy worse off? One thing is for sure: Airbus and Boeing have strongholds in the market, at least for the foreseeable future. As discussed above, their duopoly has only strengthened in recent years as a result of their mergers with Bombardier and Embraer. As Aboulafia stated, the commercial aviation industry is “one of the most efficient duopolies ever in the history of manufacturing.”18
1 Grant Petrosyan is an attorney at the New York office of Constantine Cannon LLP. The views expressed in this article are the author’s own and not those of Constantine Cannon LLP or its clients.
2 Sprague, Kate, Why Airbus and Boeing Are the Only Two Companies to Dominate 99% of the Large Plane Market, CNBC Business News, (January 26, 2019), https://www.cnbc.com/2019/01/25/why-the-airbus-boeing-companies-dominate-99percent-of-the-large-plane-market.html.
3 Id.
4 Winship, William. Boeing & Douglas: A History of Customer Service, https://www.boeing.com/commercial/aeromagazine/aero_01/textonly/ps01txt.html (last visited February 15, 2019); L-1011: Luxury Among the Clouds, https://www.lockheedmartin.com/en-us/news/features/history/l-1011.html (last visited February 15, 2019); Sud-Aviation History, http://sudaviation.com/?page_id=65 (last visited February 15, 2019).
5 Airbus’ Majority Stake in C Series Partnership with Bombardier and Investissement Quebec Comes Into Effect, Airbus Newsroom, (July 1, 2018), https://www.airbus.com/newsroom/press-releases/en/2018/07/airbus–majority-stake-in-c-series-partnership-with-bombardier-a.html.
6 Schipani, Andres, Brazil’s Bolsonaro Approves Embraer-Boeing Tie-up, Financial Times, (January 10, 2019), https://www.ft.com/content/bf0e473e-1525-11e9-a581-4ff78404524e.
7 Sprague, Kate, Why Airbus and Boeing Are the Only Two Companies to Dominate 99% of the Large Plane Market, CNBC Business News, (January 26, 2019), https://www.cnbc.com/2019/01/25/why-the-airbus-boeing-companies-dominate-99percent-of-the-large-plane-market.html.
8 Id.
9 McCoy, Daniel, Boeing Hikes Commercial List Prices by Nearly 4 Percent (2019), The Business Journals. https://www.bizjournals.com/wichita/news/2019/02/22/boeing-hikes-commercial-list-prices-by-nearly-4.html.
10 Atkinson, Robert D., Why More Aircraft Competition Is Bad for the U.S. Economy, Not Good for Customers, Information Technology & Innovation Foundation, (May 1, 2018), https://itif.org/publications/2018/05/01/why-more-aircraft-competition-bad-us-economy-not-good-consumers.
11 Id.
12 Atkinson, Robert D., Innovation Economics: The Race for Global Advantage (2012).
13 Id.
14 Atkinson, Robert D., Why More Aircraft Competition Is Bad for the U.S. Economy, Not Good for Customers, Information Technology & Innovation Foundation, (May 1, 2018),https://itif.org/publications/2018/05/01/why-more-aircraft-competition-bad-us-economy-not-good-consumers.
15 Id.
16 Id.
17 Boyd, Michael, Only Two Global Airliner Manufacturers Left, And Lots of Fallout Coming, Forbes, (November 26, 2018), https://www.forbes.com/sites/mikeboyd/2018/11/26/only-two-global-airliner-manufacturers-left-and-lots-of-fallout-coming/#22c24c9c5f83.
18 Sprague, Kate, Why Airbus and Boeing Are the Only Two Companies to Dominate 99% of the Large Plane Market, CNBC Business News, (January 26, 2019), https://www.cnbc.com/2019/01/25/why-the-airbus-boeing-companies-dominate-99percent-of-the-large-plane-market.html.
"Integrity fee" to pro sports for Missouri sports betting advances
Adam Candee, Legal Sports Report · April 16, 2019 at 5:16 pmSave
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The Missouri House General Laws Committee amended H 119 Monday to include an integrity fee of 0.25% of handle to pro sports leagues and state universities. The NFL, MLB and NHL have franchises located in St. Louis and Kansas City.
The amendment inserting the integrity fee also creates a fee of 0.6% to fund maintenance and upkeep of Missouri sports stadiums. That fee would be delivered only to leagues with a presence in the state.
Committee members also voted to weaponize official data in Missouri in advancing the bill on a 7-3 vote. The bill allows leagues to require operators to use official data in settling any bet unrelated to the final score of a game.
Continue Reading.... https://www.legalsportsreport.com/31256/missouri-sports-betting-integrity-fee-mobile/
See also « 4/16 Tennessee sports betting bill looks to clear another hurdle in committee https://www.cdcgamingreports.com/tennessee-sports-betting-bill-looks-to-clear-another-hurdle-in-committee/
The Consumer Federation of America report on the decline of the CFPB as a consumer interest enforcer
Executive summary:
In the aftermath of the 2008 financial crisis, Congress created the Consumer Financial Protection Bureau (“CFPB”), and charged it with enforcing federal consumer financial law. The CFPB has a number of tools with which to fulfill this mandate, including the authority to bring legal action against companies who violate the law. Congress also gave the CFPB the authority to collect, investigate, and respond to complaints from consumers. In recent years, complaints involving credit reporting, debt collection, mortgages and student lending have topped the CFPB’s list of most frequent complaints. Historically, these complaints have helped to inform and prioritize areas of focus for enforcement activity.
This study analyzes whether the CFPB, under the Trump Administration, is delivering on its statutory law enforcement objectives and stated commitments to take aggressive action in the area of consumer law enforcement, particularly where complaint volume is the largest. To accomplish this, this study identifies and classifies every public enforcement action since the inception of the CFPB through the first three months of Director Kathleen Kraninger’s term in office. Overall, this study finds that under the leadership of Acting Director Mick Mulvaney, and more recently, Director Kathy Kraninger, enforcement activity at the CFPB has declined to levels that are either nonexistent or significantly below that of the prior Administration, even in the areas where consumer complaint activity is the highest.
The Bureau has announced only two cases each under authorities specifically given to the Bureau to address issues with credit reporting and mortgage lending, one case related to debt collection, and no cases related to student lending. Troublingly, the Bureau has also failed to announce or resolve a single antidiscrimination case. Further, in addition to a decline in the overall volume of enforcement actions, this study shows significantly less monetary relief going to consumers. The CFPB returned about $43 million in restitution to consumers for each week of the Bureau’s first Director’s term in office. In the relatively few cases resolved since, this amount has plummeted to about $6.4 million per week under Acting Director Mulvaney and most recently dropped again to about $925,000 per week under Director Kraninger.
The Bureau has not announced a single dollar Executive Summary Dormant: The CFPB’s Law Enforcement Program in Decline | Consumer Federation of America 3 of monetary relief in any of the high-volume complaint areas of credit reporting, debt collection, or student lending. Overall, enforcement activity and relief to the consumer has declined since the appointment of Mick Mulvaney in 2017. And, despite being touted as one of Director Kraninger’s initial priorities for her term of leadership, law enforcement activity continues to remain significantly below earlier levels since her confirmation.
Key Findings
• The number of public enforcement cases announced in 2018 declined by 80% from the Bureau’s peak productivity in 2015. In 2015, the CFPB announced 55 public law enforcement actions. In 2018, this number had declined to 11. • The average amount of monetary relief per case awarded to victims of illegal consumer financial practices has declined by approximately 96%. Under Director Cordray, the CFPB awarded an average of $59.6 million in consumer restitution per case. Under Director Kraninger, average consumer relief has declined to $2.4 million per case.
• Law enforcement addressing illegal credit reporting practices has declined sharply under the Trump Administration’s leadership. The CFPB has announced only two cases enforcing the Fair Credit Reporting Act and settled both without providing a single dollar of restitution to victims of illegal practices.
• Law enforcement addressing illegal debt collection practices has declined sharply under the Trump Administration’s leadership. Under Acting Director Mulvaney and Director Kraninger, the CFPB has announced only one case enforcing the Fair Debt Collection Practices Act. The CFPB agreed to settle this case without ordering a single dollar of restitution to victims of illegal debt collection practices.
• Law enforcement policing the home mortgage market has declined sharply under the Trump Administration’s leadership. Under Director Cordray, the CFPB announced 61 mortgage lending cases that returned nearly $3 billion in restitution to consumers at a pace of over $10 million per week. Under Acting Director Mulvaney, consumer relief in mortgage lending declined by over 99% to less than $5,000 per week for the entire nation. Under Director Kraninger, the Bureau has not announced a single mortgage-related case, nor any restitution for consumers. Dormant: The CFPB’s Law Enforcement Program in Decline | Consumer Federation of America 4
• Law Enforcement policing the student loan market has declined sharply under the Trump Administration’s leadership. Under Director Cordray, the CFPB announced 15 student lending related cases with an average of $47.5 million in consumer relief per case. Under the Trump Administration’s leadership, the CFPB has not announced or resolved a single student lending enforcement case and has provided no restitution to any consumers.
• Under the Trump Administration’s leadership, the CFPB has failed to enforce consumer protection laws prohibiting discrimination. Under Director Cordray, the CFPB announced 11 cases enforcing the Equal Credit Opportunity Act producing average consumer relief over $56 million per case. Under the Trump Administration’s leadership, the CFPB has not announced or resolved a single case alleging unlawful discrimination and has provided no restitution to any consumers.
• Under the Trump Administration’s leadership, the CFPB has failed to provide adequate restitution to victims of deceptive practices. Under Director Cordray, the CFPB announced 116 enforcement cases against consumer finance companies that used in deceptive or misleading practices producing average consumer relief of over $94 million per case. Director Kraninger has announced 3 cases alleging deceptive practices but agreed to settle each case without ordering any monetary restitution for victims.
From https://consumerfed.org/wp-content/uploads/2019/03/CFPB-Enforcement-in-Decline.pdf
Executive summary:
In the aftermath of the 2008 financial crisis, Congress created the Consumer Financial Protection Bureau (“CFPB”), and charged it with enforcing federal consumer financial law. The CFPB has a number of tools with which to fulfill this mandate, including the authority to bring legal action against companies who violate the law. Congress also gave the CFPB the authority to collect, investigate, and respond to complaints from consumers. In recent years, complaints involving credit reporting, debt collection, mortgages and student lending have topped the CFPB’s list of most frequent complaints. Historically, these complaints have helped to inform and prioritize areas of focus for enforcement activity.
This study analyzes whether the CFPB, under the Trump Administration, is delivering on its statutory law enforcement objectives and stated commitments to take aggressive action in the area of consumer law enforcement, particularly where complaint volume is the largest. To accomplish this, this study identifies and classifies every public enforcement action since the inception of the CFPB through the first three months of Director Kathleen Kraninger’s term in office. Overall, this study finds that under the leadership of Acting Director Mick Mulvaney, and more recently, Director Kathy Kraninger, enforcement activity at the CFPB has declined to levels that are either nonexistent or significantly below that of the prior Administration, even in the areas where consumer complaint activity is the highest.
The Bureau has announced only two cases each under authorities specifically given to the Bureau to address issues with credit reporting and mortgage lending, one case related to debt collection, and no cases related to student lending. Troublingly, the Bureau has also failed to announce or resolve a single antidiscrimination case. Further, in addition to a decline in the overall volume of enforcement actions, this study shows significantly less monetary relief going to consumers. The CFPB returned about $43 million in restitution to consumers for each week of the Bureau’s first Director’s term in office. In the relatively few cases resolved since, this amount has plummeted to about $6.4 million per week under Acting Director Mulvaney and most recently dropped again to about $925,000 per week under Director Kraninger.
The Bureau has not announced a single dollar Executive Summary Dormant: The CFPB’s Law Enforcement Program in Decline | Consumer Federation of America 3 of monetary relief in any of the high-volume complaint areas of credit reporting, debt collection, or student lending. Overall, enforcement activity and relief to the consumer has declined since the appointment of Mick Mulvaney in 2017. And, despite being touted as one of Director Kraninger’s initial priorities for her term of leadership, law enforcement activity continues to remain significantly below earlier levels since her confirmation.
Key Findings
• The number of public enforcement cases announced in 2018 declined by 80% from the Bureau’s peak productivity in 2015. In 2015, the CFPB announced 55 public law enforcement actions. In 2018, this number had declined to 11. • The average amount of monetary relief per case awarded to victims of illegal consumer financial practices has declined by approximately 96%. Under Director Cordray, the CFPB awarded an average of $59.6 million in consumer restitution per case. Under Director Kraninger, average consumer relief has declined to $2.4 million per case.
• Law enforcement addressing illegal credit reporting practices has declined sharply under the Trump Administration’s leadership. The CFPB has announced only two cases enforcing the Fair Credit Reporting Act and settled both without providing a single dollar of restitution to victims of illegal practices.
• Law enforcement addressing illegal debt collection practices has declined sharply under the Trump Administration’s leadership. Under Acting Director Mulvaney and Director Kraninger, the CFPB has announced only one case enforcing the Fair Debt Collection Practices Act. The CFPB agreed to settle this case without ordering a single dollar of restitution to victims of illegal debt collection practices.
• Law enforcement policing the home mortgage market has declined sharply under the Trump Administration’s leadership. Under Director Cordray, the CFPB announced 61 mortgage lending cases that returned nearly $3 billion in restitution to consumers at a pace of over $10 million per week. Under Acting Director Mulvaney, consumer relief in mortgage lending declined by over 99% to less than $5,000 per week for the entire nation. Under Director Kraninger, the Bureau has not announced a single mortgage-related case, nor any restitution for consumers. Dormant: The CFPB’s Law Enforcement Program in Decline | Consumer Federation of America 4
• Law Enforcement policing the student loan market has declined sharply under the Trump Administration’s leadership. Under Director Cordray, the CFPB announced 15 student lending related cases with an average of $47.5 million in consumer relief per case. Under the Trump Administration’s leadership, the CFPB has not announced or resolved a single student lending enforcement case and has provided no restitution to any consumers.
• Under the Trump Administration’s leadership, the CFPB has failed to enforce consumer protection laws prohibiting discrimination. Under Director Cordray, the CFPB announced 11 cases enforcing the Equal Credit Opportunity Act producing average consumer relief over $56 million per case. Under the Trump Administration’s leadership, the CFPB has not announced or resolved a single case alleging unlawful discrimination and has provided no restitution to any consumers.
• Under the Trump Administration’s leadership, the CFPB has failed to provide adequate restitution to victims of deceptive practices. Under Director Cordray, the CFPB announced 116 enforcement cases against consumer finance companies that used in deceptive or misleading practices producing average consumer relief of over $94 million per case. Director Kraninger has announced 3 cases alleging deceptive practices but agreed to settle each case without ordering any monetary restitution for victims.
From https://consumerfed.org/wp-content/uploads/2019/03/CFPB-Enforcement-in-Decline.pdf
A contrarian view: “The NCAA, Which Is Tied to Education, May Be a Necessary Monopoly”
The article, with the captioned title, discusses a recent successful challenge made to the NCAA’s governing policies on antitrust grounds. That ruling, now on appeal, upheld the plaintiffs’ argument that the NCAA has a monopoly on the college athletic market and has misused it.
Authors Hittinger and Mariani discuss the potential inequities of permitting player compensation and some of the scenarios that could arise and conclude: “The verdict is still out as to whether a drastic change is necessary or even better, but if the status quo of at least the operation of [Division 1] sports is optimal, then it may be that the NCAA’s monopoly presence remains necessary.”
Read the article. https://www.bakerlaw.com/webfiles/Litigation/2019/Articles/04-01-2019-Hittinger-NCAA.pdf
The article, with the captioned title, discusses a recent successful challenge made to the NCAA’s governing policies on antitrust grounds. That ruling, now on appeal, upheld the plaintiffs’ argument that the NCAA has a monopoly on the college athletic market and has misused it.
Authors Hittinger and Mariani discuss the potential inequities of permitting player compensation and some of the scenarios that could arise and conclude: “The verdict is still out as to whether a drastic change is necessary or even better, but if the status quo of at least the operation of [Division 1] sports is optimal, then it may be that the NCAA’s monopoly presence remains necessary.”
Read the article. https://www.bakerlaw.com/webfiles/Litigation/2019/Articles/04-01-2019-Hittinger-NCAA.pdf
GW Center for Extremism uses PACER court records to find otherwise hidden information
The nation's federal court system produces thousands of pages of documents every single week. The indictments, detention memos and criminal complaints can reveal plenty of important information. But the problem is, almost no one reads them.
Seamus Hughes does. He has found "scoops" like the otherwise unrevealed indictment against Julian Assange, and a planned domestic terror attack.
Hughes finds these scoops through a buggy government website called PACER that charges 10 cents per search.
"It's godawful. You can't use it unless you know how to use it right," Hughes said. "It is absolutely a quirky system. You know, if you search a certain way you're gonna get zero results. You search a different way you'll get 10,000 results."
Most of what Hughes finds – even the Julian Assange thing – doesn't much matter to him. Hughes studies extremism and is supported by a staff of eight at George Washington's Center for Extremism. Court filings are his best research material and he says he reads about 1,000 pages a day.
"You have to go through all of the haystack to get the needle," Hughes said. "Because you're dealing with a lot of stuff that is not talked about or possibly classified and you've got to break through that."
Source #1: https://www.cbsnews.com/news/seamus-hughes-uncovered-news-about-assange-a-kickback-scheme-and-an-isis-commander/
Source #2: https://extremism.gwu.edu/cases
The nation's federal court system produces thousands of pages of documents every single week. The indictments, detention memos and criminal complaints can reveal plenty of important information. But the problem is, almost no one reads them.
Seamus Hughes does. He has found "scoops" like the otherwise unrevealed indictment against Julian Assange, and a planned domestic terror attack.
Hughes finds these scoops through a buggy government website called PACER that charges 10 cents per search.
"It's godawful. You can't use it unless you know how to use it right," Hughes said. "It is absolutely a quirky system. You know, if you search a certain way you're gonna get zero results. You search a different way you'll get 10,000 results."
Most of what Hughes finds – even the Julian Assange thing – doesn't much matter to him. Hughes studies extremism and is supported by a staff of eight at George Washington's Center for Extremism. Court filings are his best research material and he says he reads about 1,000 pages a day.
"You have to go through all of the haystack to get the needle," Hughes said. "Because you're dealing with a lot of stuff that is not talked about or possibly classified and you've got to break through that."
Source #1: https://www.cbsnews.com/news/seamus-hughes-uncovered-news-about-assange-a-kickback-scheme-and-an-isis-commander/
Source #2: https://extremism.gwu.edu/cases
Johns Hopkins, Bristol-Myers Want Sanctions In Syphilis Class Action Suit
By Cara Salvatore
Law360 (April 10, 2019, 5:30 PM EDT) -- Johns Hopkins University and Bristol-Myers Squibb want sanctions imposed in a $1 billion lawsuit against them over experiments in which Guatemalan citizens were allegedly infected with syphilis without consent, saying Tuesday the lawyers behind the suit have exhibited a "pattern of litigation abuse."
According to the three defendants, which also include the Rockefeller Foundation, lies and deceit have driven the gathering of plaintiffs and the finding of expert and fact witnesses in the suit, which was filed in 2015 in Maryland federal court.
The suit concerns experiments done in the 1940s and 1950s in Guatemala in which more than 1,300 prisoners, soldiers and psychiatric patients were allegedly deceived and exposed to syphilis and other diseases without their informed consent. JHU and the Rockefeller Foundation allegedly supervised and participated; Bristol-Myers Squibb allegedly supplied the penicillin for the experiments.
The three defendants — the same people allegedly responsible for the Tuskegee Study, a well-known episode in which African-American sharecroppers in Alabama were allowed to suffer untreated syphilis for decades — acknowledge the experiments were "reprehensible" but say they were carried out mainly by the governments of the U.S. and Guatemala. More to the point, they say, this suit has been conducted in an indefensible way.
"Recent discovery has revealed that plaintiffs' claims are based on manufactured evidence, false sworn statements, and unsupportable allegations that even a cursory investigation would have shown were unfounded," the three said. Immediate punishment is needed to "address plaintiffs' counsel's bad faith abuse of the judicial process," they said in their brief.
Excerpt from https://www.law360.com/classaction/articles/1148396/johns-hopkins-bristol-myers-want-sanctions-in-syphilis-suit?nl_pk=81b89ec7-c689-4100-9061-0cc06106b24a&utm_source=newsletter&utm_medium=email&utm_campaign=classaction (paywall)
The brief is at https://www.law360.com/articles/1148396/attachments/0 (paywall)
By Cara Salvatore
Law360 (April 10, 2019, 5:30 PM EDT) -- Johns Hopkins University and Bristol-Myers Squibb want sanctions imposed in a $1 billion lawsuit against them over experiments in which Guatemalan citizens were allegedly infected with syphilis without consent, saying Tuesday the lawyers behind the suit have exhibited a "pattern of litigation abuse."
According to the three defendants, which also include the Rockefeller Foundation, lies and deceit have driven the gathering of plaintiffs and the finding of expert and fact witnesses in the suit, which was filed in 2015 in Maryland federal court.
The suit concerns experiments done in the 1940s and 1950s in Guatemala in which more than 1,300 prisoners, soldiers and psychiatric patients were allegedly deceived and exposed to syphilis and other diseases without their informed consent. JHU and the Rockefeller Foundation allegedly supervised and participated; Bristol-Myers Squibb allegedly supplied the penicillin for the experiments.
The three defendants — the same people allegedly responsible for the Tuskegee Study, a well-known episode in which African-American sharecroppers in Alabama were allowed to suffer untreated syphilis for decades — acknowledge the experiments were "reprehensible" but say they were carried out mainly by the governments of the U.S. and Guatemala. More to the point, they say, this suit has been conducted in an indefensible way.
"Recent discovery has revealed that plaintiffs' claims are based on manufactured evidence, false sworn statements, and unsupportable allegations that even a cursory investigation would have shown were unfounded," the three said. Immediate punishment is needed to "address plaintiffs' counsel's bad faith abuse of the judicial process," they said in their brief.
Excerpt from https://www.law360.com/classaction/articles/1148396/johns-hopkins-bristol-myers-want-sanctions-in-syphilis-suit?nl_pk=81b89ec7-c689-4100-9061-0cc06106b24a&utm_source=newsletter&utm_medium=email&utm_campaign=classaction (paywall)
The brief is at https://www.law360.com/articles/1148396/attachments/0 (paywall)
Citi Bike Pulls New Electric Bikes Off New York City Streets, Citing Safety Concerns (bad brakes)
https://www.nytimes.com/2019/04/15/nyregion/citi-bike-electric.html?action=click&module=Latest&pgtype=Homepage
https://www.nytimes.com/2019/04/15/nyregion/citi-bike-electric.html?action=click&module=Latest&pgtype=Homepage
DMN - “You Have Used Us” — Hit Songwriters Pen Open Letter Slamming Spotify’s CRB Appeal
Spotify is doing a great job of alienating the music industry right now.
The story continues here. https://www.digitalmusicnews.com/2019/04/10/songwriters-v-spotify-letter/
DMN - Apple Music Caught Taking Down Pro-Democracy Songs in China
The Chinese government may have forced Apple Music to take down songs celebrating democracy.
The story continues here. https://www.digitalmusicnews.com/2019/04/10/apple-music-democracy-takedown/
Spotify is doing a great job of alienating the music industry right now.
The story continues here. https://www.digitalmusicnews.com/2019/04/10/songwriters-v-spotify-letter/
DMN - Apple Music Caught Taking Down Pro-Democracy Songs in China
The Chinese government may have forced Apple Music to take down songs celebrating democracy.
The story continues here. https://www.digitalmusicnews.com/2019/04/10/apple-music-democracy-takedown/
No fee ATM cash access
Maryland CU partners with Allpoint to expand members' fee-free cash accessMarch 28, 2019State Employees Credit Union of Maryland, the state's largest credit union, serving more than 260,000 members, has expanded its relationship with Cardtronics PLC to provide fee-free cash access through thousands of retail ATMs on the company's Allpoint Network, according to a press release.
Cardtronics' Allpoint Network supplements the CU's current ATM options, which include its owned ATM fleet; participation in a credit union-shared ATM network; and existing SECU-branded retail ATMs with Cardtronics.
"Our focus throughout our 68-year history has been on continuing to improve and expand service to our members," Joseli Wright, SECU senior vice president of member and brand strategy, said in the release. "Members asked for expanded access beyond our existing footprint of SECU locations, a need that the Allpoint Network was uniquely able to satisfy. Joining Allpoint has maximized member convenience by giving members the cash they need in the stores they already visit in their neighborhoods and, now, when traveling out of state."
Topics: Bank / Credit Union, Branding, Networking / Connectivity, Retail / Off-Premises, Transaction Processing
Companies: Cardtronics
https://www.atmia.com/news/state-employees-cu-of-maryland-extends-members-fee-free-cash-access-with-allpoint/8324/
Maryland CU partners with Allpoint to expand members' fee-free cash accessMarch 28, 2019State Employees Credit Union of Maryland, the state's largest credit union, serving more than 260,000 members, has expanded its relationship with Cardtronics PLC to provide fee-free cash access through thousands of retail ATMs on the company's Allpoint Network, according to a press release.
Cardtronics' Allpoint Network supplements the CU's current ATM options, which include its owned ATM fleet; participation in a credit union-shared ATM network; and existing SECU-branded retail ATMs with Cardtronics.
"Our focus throughout our 68-year history has been on continuing to improve and expand service to our members," Joseli Wright, SECU senior vice president of member and brand strategy, said in the release. "Members asked for expanded access beyond our existing footprint of SECU locations, a need that the Allpoint Network was uniquely able to satisfy. Joining Allpoint has maximized member convenience by giving members the cash they need in the stores they already visit in their neighborhoods and, now, when traveling out of state."
Topics: Bank / Credit Union, Branding, Networking / Connectivity, Retail / Off-Premises, Transaction Processing
Companies: Cardtronics
https://www.atmia.com/news/state-employees-cu-of-maryland-extends-members-fee-free-cash-access-with-allpoint/8324/
Boeing as an antitrust issue
Some see Boeing as a corporate giant with too much political and economic muscle, allowing it to manipulate government policy and be lazy about safety issues. See https://www.thedailybeast.com/boeing-gets-300-tariff-on-competitor-after-cozying-up-to-trump?ref=scroll Others focus on Boeing’s market power, because Boeing shares with Airbus an international role as one of only two competitors in major commercial airplane markets.
Have antitrust enforcers done enough to control Boeing? A hard question about enforcement against Boeing is whether it should be broken up based on the sort of “no-fault” analysis offered by Elizabeth Warren with regard to Google, Amazon, and Facebook. She said that “my administration will make big, structural changes to the tech sector to promote more competition — including breaking up Amazon, Facebook, and Google.” See https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c
A short answer to the “no-fault” break up question is that U.S. enforcers do not have authority to break up large companies on a “no-fault” basis. U.S. enforcers must go to court and prove an antitrust violation before applying a remedy. New legislation of the kind proposed by Elizabeth Warren would change that, but even under a no-fault standard significant analysis of market facts would be required before imposing a remedy.
Merger enforcement is a different story. Whether antitrust enforcement agencies have taken sufficient action with regard to merger enforcement is a question that applies both to U.S. and European enforcers.
Respected Washington Post business analyst Steven Pearlstein pointed out some months ago that “Boeing and Airbus have done what desperate duopolists invariably try to do — buy up their potential competitors.” See https://www.washingtonpost.com/news/wonk/wp/2018/04/25/boeing-and-airbus-the-new-super-duopoly/?noredirect=on&utm_term=.3e773f3197c7
Pearlstein explains that there have been two duopolies in the commercial aircraft business. There is the market for large jets — roughly speaking, those with 140 to 400 seats and a range of 3,500 to 8,000 miles, dominated by Boeing and Airbus. And there is the market for smaller “regional” jets with 40 to 90 seats, used on shorter flights to secondary cities — a market dominated by Bombardier and Brazil’s Embraer: “Until recently, there was little or no overlap in the two markets and the duopolies had settled into a comfortable, at times cooperative, coexistence.
But when the world’s airlines started to show interest in buying planes with 100 to 150 seats, Bombardier and Embraer saw an opportunity to extend their product lines in ways that, for the first time, would put them in a position to steal business away from Boeing and Airbus, which had not fundamentally redesigned their smaller single-aisle planes in decades.”
Pearlstein says that Boeing wanted to prevent Bombardier from gaining a toehold in the American market, and Boeing did so by offering to sell the smallest version of its 737 for a very low price, edging out Bombardier and Embraer for some U.S. sales. Bombardier responded in kind with some very low prices, and snagged some U.S. orders.
After Boeing successfully brought to the U.S. Commerce Department a below-cost pricing complaint against Bombardier, Bombardier formed a joint venture with Airbus. As a result, “Not only could Bombardier now enter the U.S. market with a sleek new fuel-efficient plane against which Boeing could offer no alternative — at least not without undermining its pricing for its smallest 737s — but it also had unwittingly strengthened the market position of its archrival, Airbus.”
So Boeing responded in kind and began negotiations to buy the commercial aircraft division of Embraer. The deal creates a joint venture combining commercial jet operations in which Boeing would retain 80 percent control. Press reports indicate that in February, 2019, Embraer shareholders approved the deal. See https://www.upi.com/Embraer-shareholders-approve-sale-to-Boeing/4721551205060/
Pearlstein’s take is that what were once two duopolies in the global market for commercial jets will morph into one super duopoly. Pearlstein was not happy about the response of antitrust enforcers: “Antitrust laws, of course, are meant to prevent mergers that substantially reduce competition, particularly in industries such as this one where there are already only a few competitors and high barriers for any new players to enter. What’s missing in this case, as so many others, are regulators or judges willing to aggressively enforce those laws and adapt them to a globalized high-tech economy where winner-take-all competition is more the rule than the exception.”
Recent safety issues with Boeing aircraft bring Pearlstein’s questions about antitrust enforcement into sharper focus.
This posting is by Don Allen Resnikoff, who is responsible for its content
Some see Boeing as a corporate giant with too much political and economic muscle, allowing it to manipulate government policy and be lazy about safety issues. See https://www.thedailybeast.com/boeing-gets-300-tariff-on-competitor-after-cozying-up-to-trump?ref=scroll Others focus on Boeing’s market power, because Boeing shares with Airbus an international role as one of only two competitors in major commercial airplane markets.
Have antitrust enforcers done enough to control Boeing? A hard question about enforcement against Boeing is whether it should be broken up based on the sort of “no-fault” analysis offered by Elizabeth Warren with regard to Google, Amazon, and Facebook. She said that “my administration will make big, structural changes to the tech sector to promote more competition — including breaking up Amazon, Facebook, and Google.” See https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c
A short answer to the “no-fault” break up question is that U.S. enforcers do not have authority to break up large companies on a “no-fault” basis. U.S. enforcers must go to court and prove an antitrust violation before applying a remedy. New legislation of the kind proposed by Elizabeth Warren would change that, but even under a no-fault standard significant analysis of market facts would be required before imposing a remedy.
Merger enforcement is a different story. Whether antitrust enforcement agencies have taken sufficient action with regard to merger enforcement is a question that applies both to U.S. and European enforcers.
Respected Washington Post business analyst Steven Pearlstein pointed out some months ago that “Boeing and Airbus have done what desperate duopolists invariably try to do — buy up their potential competitors.” See https://www.washingtonpost.com/news/wonk/wp/2018/04/25/boeing-and-airbus-the-new-super-duopoly/?noredirect=on&utm_term=.3e773f3197c7
Pearlstein explains that there have been two duopolies in the commercial aircraft business. There is the market for large jets — roughly speaking, those with 140 to 400 seats and a range of 3,500 to 8,000 miles, dominated by Boeing and Airbus. And there is the market for smaller “regional” jets with 40 to 90 seats, used on shorter flights to secondary cities — a market dominated by Bombardier and Brazil’s Embraer: “Until recently, there was little or no overlap in the two markets and the duopolies had settled into a comfortable, at times cooperative, coexistence.
But when the world’s airlines started to show interest in buying planes with 100 to 150 seats, Bombardier and Embraer saw an opportunity to extend their product lines in ways that, for the first time, would put them in a position to steal business away from Boeing and Airbus, which had not fundamentally redesigned their smaller single-aisle planes in decades.”
Pearlstein says that Boeing wanted to prevent Bombardier from gaining a toehold in the American market, and Boeing did so by offering to sell the smallest version of its 737 for a very low price, edging out Bombardier and Embraer for some U.S. sales. Bombardier responded in kind with some very low prices, and snagged some U.S. orders.
After Boeing successfully brought to the U.S. Commerce Department a below-cost pricing complaint against Bombardier, Bombardier formed a joint venture with Airbus. As a result, “Not only could Bombardier now enter the U.S. market with a sleek new fuel-efficient plane against which Boeing could offer no alternative — at least not without undermining its pricing for its smallest 737s — but it also had unwittingly strengthened the market position of its archrival, Airbus.”
So Boeing responded in kind and began negotiations to buy the commercial aircraft division of Embraer. The deal creates a joint venture combining commercial jet operations in which Boeing would retain 80 percent control. Press reports indicate that in February, 2019, Embraer shareholders approved the deal. See https://www.upi.com/Embraer-shareholders-approve-sale-to-Boeing/4721551205060/
Pearlstein’s take is that what were once two duopolies in the global market for commercial jets will morph into one super duopoly. Pearlstein was not happy about the response of antitrust enforcers: “Antitrust laws, of course, are meant to prevent mergers that substantially reduce competition, particularly in industries such as this one where there are already only a few competitors and high barriers for any new players to enter. What’s missing in this case, as so many others, are regulators or judges willing to aggressively enforce those laws and adapt them to a globalized high-tech economy where winner-take-all competition is more the rule than the exception.”
Recent safety issues with Boeing aircraft bring Pearlstein’s questions about antitrust enforcement into sharper focus.
This posting is by Don Allen Resnikoff, who is responsible for its content
The 747-MAX problem as a design problem more than a software problem
Editor's note: A number of experts have commented publicly that the stability problem with the 747-max is primarily a design problem to which a problematical software patch was applied. Putting a larger and heavier (and more efficient) engine on the old 747 design was a problem because of lack of ground clearance if the engine was placed in the traditional position. The solution could have been a new design, as it was for the Airbus 320, but Boeing did not choose that solution. Instead it mounted the new bigger engine on the old design 747 further forward and higher to solve the ground clearance issue. The result was lowered stability, which was addressed with a software patch that has proved to be troublesome. Following is a published discussion that expresses that opinion in language that is relatively clear and free of engineering jargon. DAR
The new 737 MAX 8 and MAX 9 aircraft don’t fly quite like the old 737 Next Generation (737NG) series. Where the old planes were very stable in flight, the new 737 MAX is less so. This is the result of the placement of the new LEAP 1-B engines, which required an adjustment to the design of the plane to accommodate their increased physical size.
Simply put, the LEAP 1-B engines are larger, and they could not be simply swapped with the existing 737 engines. Boeing engineers had to move the point at which the engines attach to the wing, and this changes everything.
Moving the engine from its current position destabilizes the aircraft at in pitch (essentially the up and down movement of the nose). When the aircraft is in normal flight with a low pitch / angle of attack, it should fly basically just like the old 737s. However, when the pitch is increased, the engines themselves provide extra lift. The force of this lift is now applied forward of the center of gravity of the aircraft, due to the change in position of the engine, which in turn can cause the nose of the plane to pitch upward even more. This could cause the aircraft to swing into too high of an angle of attack and subsequently stall.
So it would appear that the 737 MAX 8 flies just fine in normal flight, but it is less stable in when flown at a high angle of attack, which is not good. This is a marked difference from its predecessor 737s.
The angle of attack (AOA) sensor and MCAS system in the 737 MAX is what Boeing designed to guard against a stall, kicking in an automatic “trim” if the aircraft begins to approach too high an AOA. But what if this sensor is faulty? This sensor failure is what contributed to the Lion Air crash back in October. Oddly, Boeing placed two sensors on the aircraft, one on each side of the nose, but the MCAS system only ever receives input from one at a time. If the one sensor fails, the whole system is in jeopardy.
Is Boeing using software to correct a flawed design?This is my biggest worry. As I mentioned, the old 737NG design is very stable, and the aircraft has proved to be incredibly safe over many, many years of operation and an insane number of operating cycles. It is no wonder that it is the most popular commercial jet aircraft ever manufactured.
But the new design isn’t as stable as the old design, with the previously mentioned change in the engine placement. My worry is that Boeing chose to bank on this design and a potential inherent flaw, providing a patch using a new software system rather than going back and changing the actual design of the aircraft itself. Banking on a software system that is unfamiliar to pilots (who are going to expect the new 737 flies just like the old one) was a very poor choice in my opinion. To top it off, the new MCAS system was not properly explained to pilots, and they received no training on it. Boeing provided little to no documentation on MCAS.
Taking a step back, I find that “fixing” an aircraft stability problem through the use of software is a dubious decision at best.
Excerpt from: https://www.pointswithacrew.com/can-boeing-fix-a-potentially-faulty-737-max-design-with-software/
The author is Dan Miller, who frequently writes on travel, and offers travel advice. His email: [email protected].
Editor's note: A number of experts have commented publicly that the stability problem with the 747-max is primarily a design problem to which a problematical software patch was applied. Putting a larger and heavier (and more efficient) engine on the old 747 design was a problem because of lack of ground clearance if the engine was placed in the traditional position. The solution could have been a new design, as it was for the Airbus 320, but Boeing did not choose that solution. Instead it mounted the new bigger engine on the old design 747 further forward and higher to solve the ground clearance issue. The result was lowered stability, which was addressed with a software patch that has proved to be troublesome. Following is a published discussion that expresses that opinion in language that is relatively clear and free of engineering jargon. DAR
The new 737 MAX 8 and MAX 9 aircraft don’t fly quite like the old 737 Next Generation (737NG) series. Where the old planes were very stable in flight, the new 737 MAX is less so. This is the result of the placement of the new LEAP 1-B engines, which required an adjustment to the design of the plane to accommodate their increased physical size.
Simply put, the LEAP 1-B engines are larger, and they could not be simply swapped with the existing 737 engines. Boeing engineers had to move the point at which the engines attach to the wing, and this changes everything.
Moving the engine from its current position destabilizes the aircraft at in pitch (essentially the up and down movement of the nose). When the aircraft is in normal flight with a low pitch / angle of attack, it should fly basically just like the old 737s. However, when the pitch is increased, the engines themselves provide extra lift. The force of this lift is now applied forward of the center of gravity of the aircraft, due to the change in position of the engine, which in turn can cause the nose of the plane to pitch upward even more. This could cause the aircraft to swing into too high of an angle of attack and subsequently stall.
So it would appear that the 737 MAX 8 flies just fine in normal flight, but it is less stable in when flown at a high angle of attack, which is not good. This is a marked difference from its predecessor 737s.
The angle of attack (AOA) sensor and MCAS system in the 737 MAX is what Boeing designed to guard against a stall, kicking in an automatic “trim” if the aircraft begins to approach too high an AOA. But what if this sensor is faulty? This sensor failure is what contributed to the Lion Air crash back in October. Oddly, Boeing placed two sensors on the aircraft, one on each side of the nose, but the MCAS system only ever receives input from one at a time. If the one sensor fails, the whole system is in jeopardy.
Is Boeing using software to correct a flawed design?This is my biggest worry. As I mentioned, the old 737NG design is very stable, and the aircraft has proved to be incredibly safe over many, many years of operation and an insane number of operating cycles. It is no wonder that it is the most popular commercial jet aircraft ever manufactured.
But the new design isn’t as stable as the old design, with the previously mentioned change in the engine placement. My worry is that Boeing chose to bank on this design and a potential inherent flaw, providing a patch using a new software system rather than going back and changing the actual design of the aircraft itself. Banking on a software system that is unfamiliar to pilots (who are going to expect the new 737 flies just like the old one) was a very poor choice in my opinion. To top it off, the new MCAS system was not properly explained to pilots, and they received no training on it. Boeing provided little to no documentation on MCAS.
Taking a step back, I find that “fixing” an aircraft stability problem through the use of software is a dubious decision at best.
Excerpt from: https://www.pointswithacrew.com/can-boeing-fix-a-potentially-faulty-737-max-design-with-software/
The author is Dan Miller, who frequently writes on travel, and offers travel advice. His email: [email protected].
Elizabeth Warren on antitrust for farmers
https://medium.com/@teamwarren/leveling-the-playing-field-for-americas-family-farmers-823d1994f067
Farmers are caught in a vise, but the squeeze on family farms isn’t inevitable. We can make better policy choices — and we can begin by leveling the playing field for America’s family farmers.
Tackling Consolidation
To start, we must address consolidation in the agriculture sector, which is leaving family farmers with fewer choices, thinner margins, and less independence.
Federal regulators have allowed multinational companies to crush competition and seize control over key markets. Over the last few decades, giant agribusinesses have grown bigger and bigger. They’ve merged horizontally, like Dow-Dupont and Syngenta-ChemChina. And they’ve expanded vertically.
Tyson, for example, controls just about every aspect of bringing chicken to market — feed, slaughter, trucking — everything except owning the farms themselves. Chicken farmers have gotten locked into a “contract farming” system in which they take on huge risks — loading up on debts to build and upgrade facilities — while remaining wholly dependent on Tyson for everything from receiving chicks to buying feed to selling the grown broilers.
The result of mergers and expansions is immense market power. The top four meat processing companies have 53% market share. The three big chicken companies have 90% market share. The two biggest seed companies, Monsanto and DuPont, had 71% of the corn seed market in 2015 — before Monsanto merged with Bayer and DuPont merged with Dow. According toconservative estimates, the newly merged Bayer-Monsanto by itself will control “more than 37 percent of the U.S. vegetable seed market” overall, and will control more than half of the market for some vegetables.
Mergers mean that farmers have fewer and fewer choices for buying and selling, while vertical integration has meant that big agribusinesses face less competition throughout the chain and thus capture more and more of the profits. The result is that farmers are getting a record-low amount of every dollar Americans spend on food, food prices aren’t going down, and agribusiness CEOs and other corporate executives are raking it in. The CEO of the Chinese group that owns Smithfield -- a massive meat processing company -- made $291 million in 2017 alone.
I will tackle consolidation in the agriculture and farming sector head on and break the stranglehold a handful of companies have over the market. Here’s how:
First, I will appoint trustbusters to review -- and reverse -- anti-competitive mergers, including the recent Bayer-Monsanto merger that should never have been approved. I opposed this merger from the start and was deeply disappointed to see the Trump Administration approve it earlier this year. l will appoint regulators at the Federal Trade Commission and the Department of Justice who are serious about using the tools they have to produce competitive markets and who are committed to reviewing recent mergers in the agriculture sector and breaking up companies where mergers have reduced competition.
Second, my team will be committed to breaking up big agribusinesses that have become vertically integrated and that control more and more of the market. The Department of Justice has not revised its guidelines on vertical mergers in 35 years. And in that time, we have seen merger after merger linking together every aspect of the chain in farming. We do not want to see other sectors come to resemble the chicken sector. My administration will bring vertical integration cases to break up integrated agribusinesses.
Consolidation in agriculture is just part of a broader trend of consolidation that has hurt family farmers. Consolidation in the transportation sector has made it harder for farmers to deliver their goods and harder for rural areas to compete economically. Consolidation in the banking sector has hurt community banks and made it more difficult for small businesses and farms to get loans. Consolidation in the healthcare sector has cut off many rural communities from high-quality and accessible care. My administration will prioritize competition and reverse these trends.
But it all starts with attacking consolidation in the agriculture sector head on. We must give family farmers more options and more bargaining power in the marketplace so they can build more economic security.
https://medium.com/@teamwarren/leveling-the-playing-field-for-americas-family-farmers-823d1994f067
Farmers are caught in a vise, but the squeeze on family farms isn’t inevitable. We can make better policy choices — and we can begin by leveling the playing field for America’s family farmers.
Tackling Consolidation
To start, we must address consolidation in the agriculture sector, which is leaving family farmers with fewer choices, thinner margins, and less independence.
Federal regulators have allowed multinational companies to crush competition and seize control over key markets. Over the last few decades, giant agribusinesses have grown bigger and bigger. They’ve merged horizontally, like Dow-Dupont and Syngenta-ChemChina. And they’ve expanded vertically.
Tyson, for example, controls just about every aspect of bringing chicken to market — feed, slaughter, trucking — everything except owning the farms themselves. Chicken farmers have gotten locked into a “contract farming” system in which they take on huge risks — loading up on debts to build and upgrade facilities — while remaining wholly dependent on Tyson for everything from receiving chicks to buying feed to selling the grown broilers.
The result of mergers and expansions is immense market power. The top four meat processing companies have 53% market share. The three big chicken companies have 90% market share. The two biggest seed companies, Monsanto and DuPont, had 71% of the corn seed market in 2015 — before Monsanto merged with Bayer and DuPont merged with Dow. According toconservative estimates, the newly merged Bayer-Monsanto by itself will control “more than 37 percent of the U.S. vegetable seed market” overall, and will control more than half of the market for some vegetables.
Mergers mean that farmers have fewer and fewer choices for buying and selling, while vertical integration has meant that big agribusinesses face less competition throughout the chain and thus capture more and more of the profits. The result is that farmers are getting a record-low amount of every dollar Americans spend on food, food prices aren’t going down, and agribusiness CEOs and other corporate executives are raking it in. The CEO of the Chinese group that owns Smithfield -- a massive meat processing company -- made $291 million in 2017 alone.
I will tackle consolidation in the agriculture and farming sector head on and break the stranglehold a handful of companies have over the market. Here’s how:
First, I will appoint trustbusters to review -- and reverse -- anti-competitive mergers, including the recent Bayer-Monsanto merger that should never have been approved. I opposed this merger from the start and was deeply disappointed to see the Trump Administration approve it earlier this year. l will appoint regulators at the Federal Trade Commission and the Department of Justice who are serious about using the tools they have to produce competitive markets and who are committed to reviewing recent mergers in the agriculture sector and breaking up companies where mergers have reduced competition.
Second, my team will be committed to breaking up big agribusinesses that have become vertically integrated and that control more and more of the market. The Department of Justice has not revised its guidelines on vertical mergers in 35 years. And in that time, we have seen merger after merger linking together every aspect of the chain in farming. We do not want to see other sectors come to resemble the chicken sector. My administration will bring vertical integration cases to break up integrated agribusinesses.
Consolidation in agriculture is just part of a broader trend of consolidation that has hurt family farmers. Consolidation in the transportation sector has made it harder for farmers to deliver their goods and harder for rural areas to compete economically. Consolidation in the banking sector has hurt community banks and made it more difficult for small businesses and farms to get loans. Consolidation in the healthcare sector has cut off many rural communities from high-quality and accessible care. My administration will prioritize competition and reverse these trends.
But it all starts with attacking consolidation in the agriculture sector head on. We must give family farmers more options and more bargaining power in the marketplace so they can build more economic security.
From DMN: AMLC Songwriters Blast Major Music Publishers Over Wrongful Royalty Claims — Here’s Their Statement
Once the MMA goes into effect, where will the $1.2 billion in ‘black box’ royalties go?
The story continues here. https://www.digitalmusicnews.com/2019/04/07/music-royalties-claims-publishers/
Once the MMA goes into effect, where will the $1.2 billion in ‘black box’ royalties go?
The story continues here. https://www.digitalmusicnews.com/2019/04/07/music-royalties-claims-publishers/
From DMN: Google/Alphabet Acquiring Spotify In $43.4 Billion Cash, Equity Deal
Google/Alphabet is announcing its acquisition of Spotify in a deal valued at $43.4 billion in cash and equity.
The story continues here. https://www.digitalmusicnews.com/2019/04/01/google-alphabet-spotify-acquisition/
Google/Alphabet is announcing its acquisition of Spotify in a deal valued at $43.4 billion in cash and equity.
The story continues here. https://www.digitalmusicnews.com/2019/04/01/google-alphabet-spotify-acquisition/
From DCRA: Understanding Tenant's Rights Workshop
Thursday, April 4, 2019
5:30 pm – 7:30 pm
Department of Consumer & Regulatory Affairs
1100 4th Street SW, 2nd Floor, Room E-200, Washington, DC 20024
Register: dcrasbrc.ecenterdirect.com/events/47232
Join us for a workshop on understanding tenant's rights. The following topics will be covered:
Thursday, April 4, 2019
5:30 pm – 7:30 pm
Department of Consumer & Regulatory Affairs
1100 4th Street SW, 2nd Floor, Room E-200, Washington, DC 20024
Register: dcrasbrc.ecenterdirect.com/events/47232
Join us for a workshop on understanding tenant's rights. The following topics will be covered:
- Overview of tenant rights
- Business licensing process
- Complaint/proactive based inspections
- Common Housing Code violations
- Scheduling an inspection process
- Enforcement process
- Rights when applying for an apartment
- Understanding Tenant Opportunity to Purchase Act (TOPA)
- Importance of tenants forming an association and rights under TOPA
- Landlord/Tenant Court - how and when to file
Aaron Judge, poster boy for MLB unfair control of young player's salaries
Aaron Judge may be the biggest star on the largest stage in baseball and the New York Yankees’ top box-office draw since Derek Jeter. He also happens to be one of the team's lowest-paid players. Judge will earn $684,300 this season, or about $300,000 less than Los Angeles Dodgers ace Clayton Kershaw will earn for each start.
The 26-year-old Judge has been in the big leagues for two full seasons. The Yankees have all the power the first three years he’s in the big leagues, an independent salary arbitrator takes care of the next three years, and then he hits free agency.
It’s why Tampa Bay Rays ace Blake Snell got a mere $15,500 raise – $10,000 of that built in with a league-wide increase in the minimum salary – to $573,700, even after winning last year’s Cy Young award. It’s why the New York Mets are paying closer Edwin Diaz just $607,425, after he led the majors in saves. It’s why the Milwaukee Brewers renewed reliever Josh Hader at $687,600, despite his setting a major-league strikeout record for left-handed relievers.
From: https://www.usatoday.com/story/sports/mlb/columnist/bob-nightengale/2019/03/11/aaron-judge-yankees-salary-mlb/3129226002/
Aaron Judge may be the biggest star on the largest stage in baseball and the New York Yankees’ top box-office draw since Derek Jeter. He also happens to be one of the team's lowest-paid players. Judge will earn $684,300 this season, or about $300,000 less than Los Angeles Dodgers ace Clayton Kershaw will earn for each start.
The 26-year-old Judge has been in the big leagues for two full seasons. The Yankees have all the power the first three years he’s in the big leagues, an independent salary arbitrator takes care of the next three years, and then he hits free agency.
It’s why Tampa Bay Rays ace Blake Snell got a mere $15,500 raise – $10,000 of that built in with a league-wide increase in the minimum salary – to $573,700, even after winning last year’s Cy Young award. It’s why the New York Mets are paying closer Edwin Diaz just $607,425, after he led the majors in saves. It’s why the Milwaukee Brewers renewed reliever Josh Hader at $687,600, despite his setting a major-league strikeout record for left-handed relievers.
From: https://www.usatoday.com/story/sports/mlb/columnist/bob-nightengale/2019/03/11/aaron-judge-yankees-salary-mlb/3129226002/
Raiders move from Oakland to Las Vegas as antitrust? Raiders ask judge to throw out Oakland antitrust suit
The Raiders and NFL are asking a judge to toss out a lawsuit filed by Oakland, arguing the city’s claims “turn antitrust on its head” and are a “striking perversion of antitrust law.”
Attorneys for the team, league and its 31 other franchises laid out their legal arguments for the first time in court papers filed March 1. Spero is expected to rule on June 7 whether to dismiss the lawsuit. Both sides met for the first time in San Francisco before U.S. District Judge Joseph C. Spero on Friday afternoon.
Oakland filed suit in December, alleging the NFL and Raiders violated antitrust laws by approving the move to Las Vegas, and said doing so amounted to a group boycott of Oakland. Outside attorneys have taken the city’s case on a contingency basis, meaning it comes at no cost to the city. The city also alleges in its suit that the Raiders violated the league’s relocation policy by not seriously negotiating with Oakland and Hall of Famer Ronnie Lott’s group, which proposed to help finance a new stadium at the Coliseum.
But attorneys for the Raiders and NFL wrote that the competition between Las Vegas and Oakland was not a violation of antitrust laws, which are designed to promote competition and prohibit monopolies. The city did not suffer antitrust injury, the attorneys said, but rather “the injury flows from an increase in competition” and “another community’s willingness to make an offer better than Oakland’s.”
Full Content: Sports Naut https://sportsnaut.com/2019/03/raiders-nfl-asks-judge-to-throw-out-oakland-antitrust-lawsuit/
The Raiders and NFL are asking a judge to toss out a lawsuit filed by Oakland, arguing the city’s claims “turn antitrust on its head” and are a “striking perversion of antitrust law.”
Attorneys for the team, league and its 31 other franchises laid out their legal arguments for the first time in court papers filed March 1. Spero is expected to rule on June 7 whether to dismiss the lawsuit. Both sides met for the first time in San Francisco before U.S. District Judge Joseph C. Spero on Friday afternoon.
Oakland filed suit in December, alleging the NFL and Raiders violated antitrust laws by approving the move to Las Vegas, and said doing so amounted to a group boycott of Oakland. Outside attorneys have taken the city’s case on a contingency basis, meaning it comes at no cost to the city. The city also alleges in its suit that the Raiders violated the league’s relocation policy by not seriously negotiating with Oakland and Hall of Famer Ronnie Lott’s group, which proposed to help finance a new stadium at the Coliseum.
But attorneys for the Raiders and NFL wrote that the competition between Las Vegas and Oakland was not a violation of antitrust laws, which are designed to promote competition and prohibit monopolies. The city did not suffer antitrust injury, the attorneys said, but rather “the injury flows from an increase in competition” and “another community’s willingness to make an offer better than Oakland’s.”
Full Content: Sports Naut https://sportsnaut.com/2019/03/raiders-nfl-asks-judge-to-throw-out-oakland-antitrust-lawsuit/
Opinion: The "new" Apple Card relies on old and expensive payment system technology, processing by MasterCard
Payments using the new Apple credit card, a cousin to phone-based ApplePay, will be processed by MasterCard. So, in an important sense it is just another credit card, reinforcing the payment system approach of MasterCard and the Visa. Visa and MasterCard are, of course, the dominant global payment players in payment systems.
There are payment systems alternatives to Visa and MasterCard that are less expensive to use, potentially saving money for consumers, but they have not gained broad market acceptance.
One alternative uses Quick Response codes, or QR, a bar code format comprised of patterns of black squares on white background, capable of holding 300 times more data than traditional bar codes.
QR is widely used in China and some other countries for payment systems that bypass intermediaries like Visa and MasterCard. It is on the phones of more than 700 million smartphone owners.
Another alternative is CurrentC.
CurrentC is a payment alternative that was developed by large U.S. retailers who wish to eliminate payment intermediary payment networks such as those owned by Visa and MasterCard.
CurrentC uses the technology of the paperless electronic check. It uses “ACH” payment system technology to move money directly from the consumer’s bank account to the merchant’s or other payee’s account. The ACH Network provides an electronic funds transfer network for direct account-to-account consumer, business, and government payments. The ACH Network is governed by the not-for-profit Electronic Payments Association (“NACHA’) Operating Rules. See https://www.nacha.org/ach-network
It would seem that ACH based payment systems or QR systems have the potential to undermine the considerable power to charge high prices for electronic transactions that Visa and MasterCard exercise through the use of their networks. But at present, there appears to be little evidence of this occurring.
The adoption by Apple of old MasterCard processing technology will not help move the new alternative technologies.
https://www.barrons.com/articles/apple-card-is-a-modest-win-for-mastercard-says-a-wedbush-analyst-51553620183
This posting is by Don Allen Resnikoff, who takes responsibility for its content
Payments using the new Apple credit card, a cousin to phone-based ApplePay, will be processed by MasterCard. So, in an important sense it is just another credit card, reinforcing the payment system approach of MasterCard and the Visa. Visa and MasterCard are, of course, the dominant global payment players in payment systems.
There are payment systems alternatives to Visa and MasterCard that are less expensive to use, potentially saving money for consumers, but they have not gained broad market acceptance.
One alternative uses Quick Response codes, or QR, a bar code format comprised of patterns of black squares on white background, capable of holding 300 times more data than traditional bar codes.
QR is widely used in China and some other countries for payment systems that bypass intermediaries like Visa and MasterCard. It is on the phones of more than 700 million smartphone owners.
Another alternative is CurrentC.
CurrentC is a payment alternative that was developed by large U.S. retailers who wish to eliminate payment intermediary payment networks such as those owned by Visa and MasterCard.
CurrentC uses the technology of the paperless electronic check. It uses “ACH” payment system technology to move money directly from the consumer’s bank account to the merchant’s or other payee’s account. The ACH Network provides an electronic funds transfer network for direct account-to-account consumer, business, and government payments. The ACH Network is governed by the not-for-profit Electronic Payments Association (“NACHA’) Operating Rules. See https://www.nacha.org/ach-network
It would seem that ACH based payment systems or QR systems have the potential to undermine the considerable power to charge high prices for electronic transactions that Visa and MasterCard exercise through the use of their networks. But at present, there appears to be little evidence of this occurring.
The adoption by Apple of old MasterCard processing technology will not help move the new alternative technologies.
https://www.barrons.com/articles/apple-card-is-a-modest-win-for-mastercard-says-a-wedbush-analyst-51553620183
This posting is by Don Allen Resnikoff, who takes responsibility for its content
Baltimore files antitrust suit against 10 major banks that allegedly inflated bond interest rates
Baltimore is suing 10 major banks, alleging they illegally inflated interest rates for particular bonds for public works, overcharging Baltimore and other municipalities by billions of dollars, reported Reuters.
The city is seeking class-action status for the federal antitrust lawsuit, claiming the banks inflated costs for the city and other local governments, which Baltimore seeks to represent. That takes money away that could be spent on schools, police, roads, sewer lines and the like.
Baltimore, which has issued more than US$260 million of the bonds, alleges the banks “conspired in a coordinated and confidential scheme” from at least August 2007 to June 2016 to collect billions in unearned fees from the city and others on the bonds, which are used to pay for major, long-term city infrastructure projects.
Full Content: Reuters https://www.reuters.com/article/usa-baltimore-banks/baltimore-alleges-big-banks-colluded-on-municipal-securities-rates-idUSL1N21D1WC
Baltimore is suing 10 major banks, alleging they illegally inflated interest rates for particular bonds for public works, overcharging Baltimore and other municipalities by billions of dollars, reported Reuters.
The city is seeking class-action status for the federal antitrust lawsuit, claiming the banks inflated costs for the city and other local governments, which Baltimore seeks to represent. That takes money away that could be spent on schools, police, roads, sewer lines and the like.
Baltimore, which has issued more than US$260 million of the bonds, alleges the banks “conspired in a coordinated and confidential scheme” from at least August 2007 to June 2016 to collect billions in unearned fees from the city and others on the bonds, which are used to pay for major, long-term city infrastructure projects.
Full Content: Reuters https://www.reuters.com/article/usa-baltimore-banks/baltimore-alleges-big-banks-colluded-on-municipal-securities-rates-idUSL1N21D1WC
Squire Patton Boggs on John Oliver rant on robocalls: laugh but verify
https://tcpaworld.com/2019/03/13/fact-checking-john-olivers-robocall-bit-it-was-hilarious-but-was-it-accurate-tcpaworld-com-breaks-it-down/
[If you disagree with the SPB critique, just give them a call, or many calls. DR]
https://tcpaworld.com/2019/03/13/fact-checking-john-olivers-robocall-bit-it-was-hilarious-but-was-it-accurate-tcpaworld-com-breaks-it-down/
[If you disagree with the SPB critique, just give them a call, or many calls. DR]
From Public Citizen
FTC and CFPB report on FDCPA activities
Posted: 26 Mar 2019 06:53 AM PDT
Last week, the Federal Trade Commission and the Consumer Financial Protection Bureau reported on their 2018 activities to administer the Fair Debt Collection Practices Act. The report highlights both agencies’ law enforcement, education and public outreach, and policy initiatives.
The report is here. https://files.consumerfinance.gov/f/documents/cfpb_fdcpa_annual-report-congress_03-2019.pdf
FTC and CFPB report on FDCPA activities
Posted: 26 Mar 2019 06:53 AM PDT
Last week, the Federal Trade Commission and the Consumer Financial Protection Bureau reported on their 2018 activities to administer the Fair Debt Collection Practices Act. The report highlights both agencies’ law enforcement, education and public outreach, and policy initiatives.
The report is here. https://files.consumerfinance.gov/f/documents/cfpb_fdcpa_annual-report-congress_03-2019.pdf
The Southern District Complaint against Michael Avenatti
https://www.documentcloud.org/documents/5780634-U-S-v-Michael-Avenatti-Complaint.html
https://www.documentcloud.org/documents/5780634-U-S-v-Michael-Avenatti-Complaint.html
West Virginia uses consumer law to sue Catholic Diocese
A copy of the Complaint is here:https://ago.wv.gov/Documents/Diocese%20complaint.PDF
An excerpt from the Complaint:
The State of West Virginia, by and through its duly elected Attorney General, Patrick Morrisey (hereinafter "the State"), brings this action pursuant to the provisions of the West Virginia Consumer Credit and Protection Act, West Virginia Code § 46A-1-101, et seq., to redress the above-named Defendants' violations of the Consumer Credit and Protection Act. PARTIES
1. The State, by and through the Attorney General, is authorized to bring this action pursuant to the Consumer Credit and Protection Act, W. Va. Code § 46A- 1-101, et seq.
2. Defendant Diocese of Wheeling-Charleston (hereinafter "Diocese") is a non-profit organization operating and doing business at 1322 Eoff Street, Wheeling, West Virginia. The entire state of West Virginia lies within the Diocese's territory. The Diocese is a subdivision of the Archdiocese of Baltimore, Maryland, and also of the Roman Catholic Church, which is headed worldwide by Pope Francis.
3. Defendant Michael J. Bransfield is an individual who was Bishop of the Diocese from early 2005 through September 2018, and is sued in his capacity as Bishop of the Diocese during this time period. Title to diocesan property is held in the name of the Bishop. JURISDICTION AND VENUE
4. This Court has jurisdiction to hear this matter pursuant to Article VIII, Section 6 of the West Virginia Constitution, W. Va. Code § 51-2-2, and W. Va. Code § 53-5-3.
5. Venue is proper in this Court pursuant to W. Va. Code § 46A-7-114 and W. Va. Code § 56-1 -1(a)(6).
I. FACTS COMMON TO ALL COUNTS A. Procedural Facts
6. A Statewide Grand Jury Report issued by the State of Pennsylvania on August 14, 2018 identified hundreds of Roman Catholic Church priests who had abused one thousand or more children in six dioceses in Pennsylvania. One or more of the identified priests had also been employed in the Diocese.
7. The State commenced an investigation in the fall of 2018 to determine if other Catholic priests who were active or had been employed in West Virginia had been accused of sexually abusing children. The preliminary investigation of the Attorney General disclosed that 2 priests other than the ones identified in the Pennsylvania Grand Jury Report had worked in West Virginia and had been accused of sexual abuse of children.
8. The Diocese currently operates six high schools and 19 elementary schools in West Virginia, but has operated more in the past. Some parishes also operate pre-kindergarten day care facilities.
9. Based upon the foregoing, the Attorney General issued two formal investigative subpoenas ("Subpoenas") to the Diocese on October 12, 2018, and February 14, 2019, as authorized by the West Virginia Consumer Credit and Protection Act, W. Va. Code § 46A-7- 104(1). The Diocese responded to the Subpoenas in part and withheld documents based upon objections.
10. Although the State has not fully completed its investigation, due, in part, to the lack of cooperation from the Diocese, the facts learned and the documents disclosed allege the Diocese has engaged in unfair or deceptive acts or practices by failing to disclose to consumers of its educational and recreational services that it employed priests and laity who have sexually abused children, including an admitted abuser who the Diocese nevertheless allowed to work in a Catholic elementary school, in violation of the West Virginia Consumer Credit and Protection Act. W. Va. Code § 46A-1-101 et seq. (the "WVCCPA").
A copy of the Complaint is here:https://ago.wv.gov/Documents/Diocese%20complaint.PDF
An excerpt from the Complaint:
The State of West Virginia, by and through its duly elected Attorney General, Patrick Morrisey (hereinafter "the State"), brings this action pursuant to the provisions of the West Virginia Consumer Credit and Protection Act, West Virginia Code § 46A-1-101, et seq., to redress the above-named Defendants' violations of the Consumer Credit and Protection Act. PARTIES
1. The State, by and through the Attorney General, is authorized to bring this action pursuant to the Consumer Credit and Protection Act, W. Va. Code § 46A- 1-101, et seq.
2. Defendant Diocese of Wheeling-Charleston (hereinafter "Diocese") is a non-profit organization operating and doing business at 1322 Eoff Street, Wheeling, West Virginia. The entire state of West Virginia lies within the Diocese's territory. The Diocese is a subdivision of the Archdiocese of Baltimore, Maryland, and also of the Roman Catholic Church, which is headed worldwide by Pope Francis.
3. Defendant Michael J. Bransfield is an individual who was Bishop of the Diocese from early 2005 through September 2018, and is sued in his capacity as Bishop of the Diocese during this time period. Title to diocesan property is held in the name of the Bishop. JURISDICTION AND VENUE
4. This Court has jurisdiction to hear this matter pursuant to Article VIII, Section 6 of the West Virginia Constitution, W. Va. Code § 51-2-2, and W. Va. Code § 53-5-3.
5. Venue is proper in this Court pursuant to W. Va. Code § 46A-7-114 and W. Va. Code § 56-1 -1(a)(6).
I. FACTS COMMON TO ALL COUNTS A. Procedural Facts
6. A Statewide Grand Jury Report issued by the State of Pennsylvania on August 14, 2018 identified hundreds of Roman Catholic Church priests who had abused one thousand or more children in six dioceses in Pennsylvania. One or more of the identified priests had also been employed in the Diocese.
7. The State commenced an investigation in the fall of 2018 to determine if other Catholic priests who were active or had been employed in West Virginia had been accused of sexually abusing children. The preliminary investigation of the Attorney General disclosed that 2 priests other than the ones identified in the Pennsylvania Grand Jury Report had worked in West Virginia and had been accused of sexual abuse of children.
8. The Diocese currently operates six high schools and 19 elementary schools in West Virginia, but has operated more in the past. Some parishes also operate pre-kindergarten day care facilities.
9. Based upon the foregoing, the Attorney General issued two formal investigative subpoenas ("Subpoenas") to the Diocese on October 12, 2018, and February 14, 2019, as authorized by the West Virginia Consumer Credit and Protection Act, W. Va. Code § 46A-7- 104(1). The Diocese responded to the Subpoenas in part and withheld documents based upon objections.
10. Although the State has not fully completed its investigation, due, in part, to the lack of cooperation from the Diocese, the facts learned and the documents disclosed allege the Diocese has engaged in unfair or deceptive acts or practices by failing to disclose to consumers of its educational and recreational services that it employed priests and laity who have sexually abused children, including an admitted abuser who the Diocese nevertheless allowed to work in a Catholic elementary school, in violation of the West Virginia Consumer Credit and Protection Act. W. Va. Code § 46A-1-101 et seq. (the "WVCCPA").
Did D.C. Central Kitchen lose part of its DC contract to feed homeless to a higher bidder?
By Justin Wm. Moyer
March 18
A nonprofit that has provided meals for homeless people in the District for three decades has lost part of its government contract to another vendor and is questioning the award process.
D.C. Central Kitchen, founded in 1989, provides 3 million meals for homeless shelters, schools and nonprofits each year, according to its website. The organization lost part of its contract — funded by the D.C. Department of Human Services through the nonprofit Community Partnership for the Prevention of Homelessness — to Henry’s Soul Cafe, a caterer with locations on U Street and in Prince George’s County.
Washington City Paper first reported the contract changes.
In a statement, D.C. Central Kitchen chief executive Mike Curtin Jr. said the organization has worked for 30 years to provide healthy meals to residents of the city’s shelters.
“While the upheaval around our shelter food service contract is extremely challenging for our organization, we are far more concerned about how this contracting process failed to uphold our community’s values around transparency, health, sustainability, and creating good jobs for District residents,” the statement said. “We will persevere, as always, and hope this unfortunate outcome will inspire much-needed and long-overdue progress in our city’s approach to shelter nutrition programs.”
In a statement, D.C. Department of Human Services spokeswoman Dora Taylor-Lowe called the November selection of food vendors “an open, competitive process.” The agency didn’t respond to a request for comment Monday beyond the statement.
D.C. Council member Brianne K. Nadeau (D-Ward 1), who chairs the Committee on Human Services, declined to comment, as did Community Partnership.
D.C. Central Kitchen chief development officer Alexander Moore said the change meant the nonprofit’s contract shrank from about $1.8 million to $1 million a year. It had delivered up to 2,500 meals to 10 shelters each day under the contract but now delivers 800 meals to five shelters.
Moore said D.C. Central Kitchen underbid Henry’s — requesting reimbursement of $3.50 for a supper, for example, while Henry’s gets $5.18. Moore speculated that Henry’s may have won the contract because it is a certified business enterprise — a local business that receives preference in procurement.
“This was done in the least responsible, least transparent way possible,” he said. “There’s no reason to disadvantage us against a for-profit company. . . . We’ve created jobs and are keeping money right here.”
Henry’s Soul Cafe didn’t respond to requests for comment.
https://www.washingtonpost.com/local/dc-central-kitchen-loses-part-of-contract-to-feed-homeless/2019/03/18/3e81b0f8-473c-11e9-a14c-e5844465ff8a_story.html?utm_term=.180182304e11
The GAO on the Federal Aviation Administration's (FAA) process for certifying designs of transport aircraft to meet safety standards
A 1993 report focused on whether FAA staff are: (1) effectively involved in the certification process; and (2) competent in assessing the latest technologies. The GAO found that:
(1) FAA ability to evaluate and certify new aircraft technologies is questionable because, in response to an escalating workload, FAA has increasingly relied on manufacturers for safety certification;
(2) FAA has not clearly defined staff responsibilities or performance standards to ensure that staff are effectively involved in the certification process;
(3) aircraft manufacturers' technical expertise and commitment to safety have kept the number of design-related safety problems to a minimum;
(4) FAA efforts to increase its technical expertise and build an in-house team of experts to oversee the certification process may be flawed because FAA has not defined when these experts are to be involved in the certification process;
(5) although FAA has previously identified and attempted to address its certification staff training deficiencies, inadequacies remain because training programs do not develop staff members' competence in specific fields and the availability of technical courses remains limited; and (6) FAA plans to improve training and staff retention include new technical certification training programs and plans to create technical career paths for certification engineers; however, these programs may not be adequate to overcome current training and staff limitations.
- View Report (PDF) https://www.gao.gov/assets/160/153711.pdf
Subsequent GAO reports are ambiguous on the question of whether inadequacies noticed in 1993 have been fully addressed. It may be that the FAA has continued to rely on manufacturers for safety certification analysis. See the 2017 GAO report at https://www.gao.gov/assets/690/683649.pdf which talks about "continued progress" at the FAA.
A recent Wall Street Journal article referred to the " FAA’s longstanding reliance on using thousands of designated industry employees–rather than agency officials—to sign off on some safety-related regulatory matters." https://www.wsj.com/articles/steve-dickson-is-white-house-pick-as-permanent-faa-head-11553024733?mod=hp_major_pos7 That of course suggests that the problems of delegation of safety issues by the FAA to regulated companies has persisted.
Similarly, another recent WSJ article says: " The agency [FAA] for some time has been moving to delegate more responsibility to plane and equipment manufacturers for conducting detailed risk assessments on new or derivative products. Congress has been pushing FAA leaders in the same direction, partly to save federal dollars and partly to speed and streamline regulatory requirements for industry.
The NYT reports:
The 737 Max was one of the first commercial jets approved under new rules, which delegated more authority to Boeing than had been the case when most previous planes were certified. And the software system did not raise warnings during the approval process. Top F.A.A. officials, who are briefed on significant safety issues, were not aware of the software system, according to three people with knowledge of the process.
https://www.nytimes.com/2019/03/19/business/boeing-elaine-chao.html?module=inline
Posted by Don Allen Resnikoff
NYT Editorial:Avoid the mistakes of the past that led to bank failures
Excerpt:
Barely a decade has passed since the recklessness of major financial institutions helped to catalyze the largest economic crisis since the Great Depression. Many Americans have yet to recover their losses. Yet somehow, the lessons of the crisis already appear to be fading.
The government has loosened a number of the key strictures imposed on banks and other financial firms in the wake of the 2008 crisis, and more leniencies are in the pipeline. In particular, the government is allowing large banks to rely more on borrowed money as a source of funding, even as it has reduced scrutiny of their lending decisions.
https://www.nytimes.com/2019/03/20/opinion/trump-bank-regulation.html?action=click&module=Opinion&pgtype=Homepage
Excerpt:
Barely a decade has passed since the recklessness of major financial institutions helped to catalyze the largest economic crisis since the Great Depression. Many Americans have yet to recover their losses. Yet somehow, the lessons of the crisis already appear to be fading.
The government has loosened a number of the key strictures imposed on banks and other financial firms in the wake of the 2008 crisis, and more leniencies are in the pipeline. In particular, the government is allowing large banks to rely more on borrowed money as a source of funding, even as it has reduced scrutiny of their lending decisions.
https://www.nytimes.com/2019/03/20/opinion/trump-bank-regulation.html?action=click&module=Opinion&pgtype=Homepage
AAI Asks Antitrust Division to Reconsider Its Reversal on Standard-Essential Patents
In a letter to Assistant Attorney General Makan Delrahim, the American Antitrust Institute (AAI) asked the Antitrust Division to reconsider its withdrawal from its 2013 Joint Policy Statement with the Patent & Trademark Office (PTO) on Remedies for Standard Essential Patents (SEPs). The Policy Statement endorsed sensible limits on the International Trade Commission's issuance of exclusion orders, which ban imports of products into the United States if the products infringe a U.S. patent. It cautioned against such orders when the alleged infringer's products are compliant with industry standards and the patent holder has voluntarily committed to a standard-setting organization (SSO) to license the patent on reasonable and non-discriminatory (RAND) terms. The AAI letter also objects to the Division's heightened scrutiny of SSOs that clarify the meaning of RAND commitments in ways that supposedly favor product manufacturers but that are entirely consistent with patent law.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-antitrust-division-to-reconsider-its-reversal-on-standard-essential-patents/
In a letter to Assistant Attorney General Makan Delrahim, the American Antitrust Institute (AAI) asked the Antitrust Division to reconsider its withdrawal from its 2013 Joint Policy Statement with the Patent & Trademark Office (PTO) on Remedies for Standard Essential Patents (SEPs). The Policy Statement endorsed sensible limits on the International Trade Commission's issuance of exclusion orders, which ban imports of products into the United States if the products infringe a U.S. patent. It cautioned against such orders when the alleged infringer's products are compliant with industry standards and the patent holder has voluntarily committed to a standard-setting organization (SSO) to license the patent on reasonable and non-discriminatory (RAND) terms. The AAI letter also objects to the Division's heightened scrutiny of SSOs that clarify the meaning of RAND commitments in ways that supposedly favor product manufacturers but that are entirely consistent with patent law.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-antitrust-division-to-reconsider-its-reversal-on-standard-essential-patents/
Electrical engineer institute's new WiFi measures won’t get American national standard designation -- the sticking point seems to be concerns of large patent holders
11 March 2019. By Leah Nylen.
Two WiFi standards proposed by the Institute of Electrical and Electronics Engineers have failed to win the backing of a non-profit that accredits US standards. The American National Standards Institute didn’t offer any public reasoning for its rare disapproval, but the standards are the first it has reviewed since IEEE controversially changed it patent policy in 2015 over the objections of companies like Ericsson, Nokia and Qualcomm.
ANSI is a non-governmental body composed of businesses, trade associations and US agencies that accredits standards groups and coordinates US standards. The group describes itself as a “neutral forum” to promote standards policies and a “watchdog” for standards development.
In its March 1 newsletter, ANSI said it had disapproved two standards proposed by IEEE. Both of the proposed standards are amendments to IEEE’s primary WiFi standard, 802.11.
Susanah Doucet, an ANSI spokeswoman, confirmed the disapproval.
“It is not an everyday occurrence, but it does happen from time to time,” she said, adding that IEEE can seek to appeal within ANSI or modify the standard and submit it again.
The two IEEE standards — 802.11ah and 802.11ai — were the products of years of work and finalized within the standards group in 2017. The 802.11ah standard focuses on lower-energy consumption and connectivity for Internet of Things devices, while 802.11ai focuses on improving connectivity in dense environments such as stadiums and shopping malls.
The two standards were the first finalized under IEEE’s new patent policy, adopted in 2015. Under the new policy, IEEE agreed to place limits on the ability of patent holders to obtain injunctions embedded in its standards. The policy also required patent holders to make their technology available to component makers — as opposed to licensing only to end-device manufacturers — and stipulated that royalties should be based on the “smallest salable unit.”
Companies such as Cisco and Intel were staunch supporters of the change, while those with large patent portfolios such as Qualcomm and Ericsson were opposed. The US Department of Justice reviewed the change and declined to object on antitrust grounds.
After IEEE adopted the policy change, however, a number of companies declined to agree to license under the new terms, providing what is known as a negative letter of assurance. On the 802.11ah standard, Ericsson, Nokia and the Dutch telecommunication company KPN said they wouldn’t provide licenses under IEEE’s new patent policy. Ericsson and Nokia also declined for 802.11ai, according to IEEE documents.
Without ANSI’s approval, the two standards aren’t considered “American National Standards” and the group won’t promote their usage within international standards bodies, such as the International Standards Organization, or ISO.
IEEE spokesperson Monika Stickel said the group is reviewing the information ANSI provided and declined to comment on whether it would seek an appeal.
Source: https://mlexmarketinsight.com/insights-center/editors-picks/antitrust/cross-jurisdiction/electrical-engineer-institutes-new-wifi-measures-wont-get-american-national-standard-designation
11 March 2019. By Leah Nylen.
Two WiFi standards proposed by the Institute of Electrical and Electronics Engineers have failed to win the backing of a non-profit that accredits US standards. The American National Standards Institute didn’t offer any public reasoning for its rare disapproval, but the standards are the first it has reviewed since IEEE controversially changed it patent policy in 2015 over the objections of companies like Ericsson, Nokia and Qualcomm.
ANSI is a non-governmental body composed of businesses, trade associations and US agencies that accredits standards groups and coordinates US standards. The group describes itself as a “neutral forum” to promote standards policies and a “watchdog” for standards development.
In its March 1 newsletter, ANSI said it had disapproved two standards proposed by IEEE. Both of the proposed standards are amendments to IEEE’s primary WiFi standard, 802.11.
Susanah Doucet, an ANSI spokeswoman, confirmed the disapproval.
“It is not an everyday occurrence, but it does happen from time to time,” she said, adding that IEEE can seek to appeal within ANSI or modify the standard and submit it again.
The two IEEE standards — 802.11ah and 802.11ai — were the products of years of work and finalized within the standards group in 2017. The 802.11ah standard focuses on lower-energy consumption and connectivity for Internet of Things devices, while 802.11ai focuses on improving connectivity in dense environments such as stadiums and shopping malls.
The two standards were the first finalized under IEEE’s new patent policy, adopted in 2015. Under the new policy, IEEE agreed to place limits on the ability of patent holders to obtain injunctions embedded in its standards. The policy also required patent holders to make their technology available to component makers — as opposed to licensing only to end-device manufacturers — and stipulated that royalties should be based on the “smallest salable unit.”
Companies such as Cisco and Intel were staunch supporters of the change, while those with large patent portfolios such as Qualcomm and Ericsson were opposed. The US Department of Justice reviewed the change and declined to object on antitrust grounds.
After IEEE adopted the policy change, however, a number of companies declined to agree to license under the new terms, providing what is known as a negative letter of assurance. On the 802.11ah standard, Ericsson, Nokia and the Dutch telecommunication company KPN said they wouldn’t provide licenses under IEEE’s new patent policy. Ericsson and Nokia also declined for 802.11ai, according to IEEE documents.
Without ANSI’s approval, the two standards aren’t considered “American National Standards” and the group won’t promote their usage within international standards bodies, such as the International Standards Organization, or ISO.
IEEE spokesperson Monika Stickel said the group is reviewing the information ANSI provided and declined to comment on whether it would seek an appeal.
Source: https://mlexmarketinsight.com/insights-center/editors-picks/antitrust/cross-jurisdiction/electrical-engineer-institutes-new-wifi-measures-wont-get-american-national-standard-designation
FROM DMN
YouTube has come under fire for its vague requirements for Content ID claims. Critics says the system has been getting abused for years. This month, YouTube is making changes to its ContentID claims process.
YouTube wants everyone to rely on its all-encompassing ContentID, an automated system that can reference millions of songs, films, TV shows, audiobooks, and more to find matching content. ContentID trawls YouTube looking for instances in which a copyrighted work might have been used and notifies the original owner.
The copyright owner then has a few choices, including removing a video or simply monetizing it.
The new change will prevent content owners from filing a manual claim if ContentID has already discovered a claim on the same video.
YouTube revealed the new changes in a Help Center post for the site, noting that the changes were necessary for several reasons.
Manual flagging is not available to everyone on YouTube. It is typically reserved for multi-channel networks (MCNs) and other large entities. In a post informing these networks of the policies, YouTube says the change addresses dispute queue times.
“This change is intended, in part, to address feedback that you’d like to spend less time managing your dispute queue.”
Manual copyright claims will now require the copyright owner to provide timestamps to the copyrighted content.
Creators who have their videos flagged can remove the video and re-upload it, or dispute the content owner’s claim. YouTube will then decide who is right in the dispute.
'
If YouTube favors the YouTuber, then the content will be left alone. If YouTube finds the content owner has a legitimate claim, the YouTuber will receive a copyright strike.
YouTube says the changes will help uploaders better understand any copyright claims they do receive, while minimizing bogus demands.
Despite announcing the new feature through a Help Center post, YouTube has not given a timeframe for when the timestamps feature will be released.
https://www.digitalmusicnews.com/2019/03/21/youtube-contentid-changes/
YouTube has come under fire for its vague requirements for Content ID claims. Critics says the system has been getting abused for years. This month, YouTube is making changes to its ContentID claims process.
YouTube wants everyone to rely on its all-encompassing ContentID, an automated system that can reference millions of songs, films, TV shows, audiobooks, and more to find matching content. ContentID trawls YouTube looking for instances in which a copyrighted work might have been used and notifies the original owner.
The copyright owner then has a few choices, including removing a video or simply monetizing it.
The new change will prevent content owners from filing a manual claim if ContentID has already discovered a claim on the same video.
YouTube revealed the new changes in a Help Center post for the site, noting that the changes were necessary for several reasons.
Manual flagging is not available to everyone on YouTube. It is typically reserved for multi-channel networks (MCNs) and other large entities. In a post informing these networks of the policies, YouTube says the change addresses dispute queue times.
“This change is intended, in part, to address feedback that you’d like to spend less time managing your dispute queue.”
Manual copyright claims will now require the copyright owner to provide timestamps to the copyrighted content.
Creators who have their videos flagged can remove the video and re-upload it, or dispute the content owner’s claim. YouTube will then decide who is right in the dispute.
'
If YouTube favors the YouTuber, then the content will be left alone. If YouTube finds the content owner has a legitimate claim, the YouTuber will receive a copyright strike.
YouTube says the changes will help uploaders better understand any copyright claims they do receive, while minimizing bogus demands.
Despite announcing the new feature through a Help Center post, YouTube has not given a timeframe for when the timestamps feature will be released.
https://www.digitalmusicnews.com/2019/03/21/youtube-contentid-changes/
Challenging Monopolies in Court
Can there be encouraging points about the future of antitrust enforcement against monopolization? The expert panelists at a conference of the American Antitrust Institute held in the District of Columbia on March 14 were able to identify some. Inevitably there were conference themes that were less upbeat: there haven’t been a lot of big courtroom challenges to monopolization recently, and challenging monopolies in court is difficult. But there were also upbeat points.
First, antitrust enforcement against monopolies is not entirely dormant.
NY AG cases
Elinor Hoffman, a highly respected antitrust enforcer with the New York AG’s office, was able to point out that her office has pursued a series of successful monopolization cases, either independently or in coordination with others. Following are details of just one example, drawn from a New York AG press release:
A 2015 press release from the NY AG explains that the office resolved an antitrust lawsuit it brought in September 2014, and successfully prevented pharmaceutical manufacturer Allergan plc (previously named Actavis plc) from forcing Alzheimer’s patients to switch medications as part of an anticompetitive strategy designed to maintain high drug prices.
The background is that in February 2014, Allergan’s subsidiary Forest Laboratories announced a plan designed to impede competition from low cost generic drugs for its blockbuster Alzheimer’s drug Namenda IR. Forest’s plan was to withdraw Namenda IR from the market a few months before generic versions became available, in order to force Alzheimer’s patients to switch to a very similar drug manufactured by Forest that had a longer lasting patent – Namenda XR. Forest knew that once patients were forced to switch to the new drug, they would likely remain on that medication even after generics for Namenda IR entered the market, due to the practical difficulties of switching back. The tactic was expected to dramatically curtail the ability of generics to compete in the market, and to cost the public hundreds of millions – if not billions – of dollars in unnecessary drug costs.
In December 2014, a federal judge granted New York’s request for an injunction and prohibited Allergan from engaging in the controversial tactic – sometimes called a “forced switch” – which would have needlessly disrupted the treatment plans of these patients solely to protect corporate profits. The injunction protected competition and allowed low cost generic drugs to enter the market unimpeded.
The FTC case against Qualcomm
There was some suggestion at the conference that Europeans are more active than U.S. enforcers on matters of monopolization, and use “abuse of dominant position” standards for prosecution in Europe are more flexible that U.S. monopolization standards.
Panelist Maria Coppola of the U.S. Federal Trade Commission defended her agencies record. She pointed out, among other things, that the FTC’s action against Qualcomm is much broader than the European’s action.
The following detail is from a 2017 FTC press release about the FTC action:
The Federal Trade Commission filed a complaint in federal district court charging Qualcomm Inc. with using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products. [https://www.ftc.gov/system/files/documents/cases/170117qualcomm_redacted_complaint.pdf]
Qualcomm is the world’s dominant supplier of baseband processors – devices that manage cellular communications in mobile products. The FTC alleges that Qualcomm has used its dominant position as a supplier of certain baseband processors to impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors.
Qualcomm also holds patents that it has declared essential to industry standards that enable cellular connectivity. These standards were adopted by standard-setting organizations for the telecommunications industry, which include Qualcomm and many of its competitors. In exchange for having their patented technologies included in the standards, participants typically commit to license their patents on what are known as fair, reasonable, and non-discriminatory, or “FRAND,” terms.
When a patent holder that has made a FRAND commitment negotiates a license, ordinarily it is constrained by the fact that if the parties are unable to reach agreement, the patent holder may have to establish reasonable royalties in court.
According to the complaint, by threatening to disrupt cell phone manufacturers’ supply of baseband processors, Qualcomm obtains elevated royalties and other license terms for its standard-essential patents that manufacturers would otherwise reject. These royalties amount to a tax on the manufacturers’ use of baseband processors manufactured by Qualcomm’s competitors, a tax that excludes these competitors and harms competition. Increased costs imposed by this tax are passed on to consumers, the complaint alleges.
By excluding competitors, Qualcomm impedes innovation that would offer significant consumer benefits, including those that foster the increased interconnectivity of consumer products, vehicles, buildings, and other items commonly referred to as the Internet of Things.
The FTC has charged Qualcomm with violating the FTC Act. The complaint alleges that Qualcomm:
The Commission vote to file the complaint was 2-1. Commissioner Maureen K. Ohlhausen dissented and issued a statement. Both a public and sealed version of the complaint were filed in the U.S. District Court for the Northern District of California on January 17, 2017.
Private Class action
Panelist Kalpana Srinivasn of Susman and Godfrey LLP was able to speak about her firm’s private class action against Qualcomm. In September of this past year a federal District Court judge certified the case to move forward, explaining:
In sum, the Court finds that the proposed class members' interests weigh in favor of having this case litigated as a class action. In particular, the nature of Qualcomm's alleged overarching conduct and the desirability of concentrating the litigation in one proceeding weigh heavily in favor of finding that class treatment is superior to other methods of adjudication of the controversy. See Zinser, 253 F.3d at 1190-92. Nor do manageability concerns favor another form of adjudication. Therefore, Plaintiffs have satisfied the superiority requirement. Because Plaintiffs have also satisfied the predominance requirement, the Court GRANTS Plaintiffs' motion for class certification under Rule 23(b)(3).
See the full opinion at https://casetext.com/case/in-re-qualcomm-antitrust-litig-1
Antitrust in Court and the world outside of Court
Recently, the world outside of the courts included Elizabeth Warren discussing breaking up companies without use of courtroom litigation. Here is part of what she said in a recent article at https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c:
In this tradition, my administration would restore competition to the tech sector by taking two major steps:
First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.
**
Second, my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.
Current antitrust laws empower federal regulators to break up mergers that reduce competition. I will appoint regulators who are committed to using existing tools to unwind anti-competitive mergers . . . .
Panelists at the AAI conference commented perceptively about alternatives to current courtroom efforts directed at monopolization, including proposals for “no-fault” break-up of monopolies following the Warren approach, proposals to adopt European abuse of dominant position standards, and others.
Among a number of interesting points made about alternatives was Richard Brunell’s point that proposals for “no-fault” enforcement from the 1970s were more nuanced than may now be commonly recognized.
Jon Liebowitz and others had interesting comments about potential for FTC Act Section 5, which broadly prohibits prohibits “unfair or deceptive acts or practices in or affecting commerce.”
Jon Baker, in a question from the floor, encouraged discussion comparing Elizabeth Warren’s proposals with courtroom litigation standards.
And, in an article discussing current antitrust reform proposals that was provided as part of the resource materials for the AAI conference, Harry First writes, in an open spirit purposefully and playfully evoking Woodstock (a large gathering of hippies that occurred some time ago):
Say what you will about Hipster antitrust, it has connected to broader political concerns, and that is for the good. A slogan of the Woodstock decade was “Power to the People.” It still works for antitrust, “Right On.”
Harry First’s article is at https://www.antitrustinstitute.org/wp-content/uploads/2018/12/Frist-Woodstock-Antitrust.pdf
Great credit for the excellent and interesting AAI program goes to organizers Randy Stutz and Richard Brunell
This posting is by Don Allen Resnikoff, who takes responsibility for its content.
Can there be encouraging points about the future of antitrust enforcement against monopolization? The expert panelists at a conference of the American Antitrust Institute held in the District of Columbia on March 14 were able to identify some. Inevitably there were conference themes that were less upbeat: there haven’t been a lot of big courtroom challenges to monopolization recently, and challenging monopolies in court is difficult. But there were also upbeat points.
First, antitrust enforcement against monopolies is not entirely dormant.
NY AG cases
Elinor Hoffman, a highly respected antitrust enforcer with the New York AG’s office, was able to point out that her office has pursued a series of successful monopolization cases, either independently or in coordination with others. Following are details of just one example, drawn from a New York AG press release:
A 2015 press release from the NY AG explains that the office resolved an antitrust lawsuit it brought in September 2014, and successfully prevented pharmaceutical manufacturer Allergan plc (previously named Actavis plc) from forcing Alzheimer’s patients to switch medications as part of an anticompetitive strategy designed to maintain high drug prices.
The background is that in February 2014, Allergan’s subsidiary Forest Laboratories announced a plan designed to impede competition from low cost generic drugs for its blockbuster Alzheimer’s drug Namenda IR. Forest’s plan was to withdraw Namenda IR from the market a few months before generic versions became available, in order to force Alzheimer’s patients to switch to a very similar drug manufactured by Forest that had a longer lasting patent – Namenda XR. Forest knew that once patients were forced to switch to the new drug, they would likely remain on that medication even after generics for Namenda IR entered the market, due to the practical difficulties of switching back. The tactic was expected to dramatically curtail the ability of generics to compete in the market, and to cost the public hundreds of millions – if not billions – of dollars in unnecessary drug costs.
In December 2014, a federal judge granted New York’s request for an injunction and prohibited Allergan from engaging in the controversial tactic – sometimes called a “forced switch” – which would have needlessly disrupted the treatment plans of these patients solely to protect corporate profits. The injunction protected competition and allowed low cost generic drugs to enter the market unimpeded.
The FTC case against Qualcomm
There was some suggestion at the conference that Europeans are more active than U.S. enforcers on matters of monopolization, and use “abuse of dominant position” standards for prosecution in Europe are more flexible that U.S. monopolization standards.
Panelist Maria Coppola of the U.S. Federal Trade Commission defended her agencies record. She pointed out, among other things, that the FTC’s action against Qualcomm is much broader than the European’s action.
The following detail is from a 2017 FTC press release about the FTC action:
The Federal Trade Commission filed a complaint in federal district court charging Qualcomm Inc. with using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products. [https://www.ftc.gov/system/files/documents/cases/170117qualcomm_redacted_complaint.pdf]
Qualcomm is the world’s dominant supplier of baseband processors – devices that manage cellular communications in mobile products. The FTC alleges that Qualcomm has used its dominant position as a supplier of certain baseband processors to impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors.
Qualcomm also holds patents that it has declared essential to industry standards that enable cellular connectivity. These standards were adopted by standard-setting organizations for the telecommunications industry, which include Qualcomm and many of its competitors. In exchange for having their patented technologies included in the standards, participants typically commit to license their patents on what are known as fair, reasonable, and non-discriminatory, or “FRAND,” terms.
When a patent holder that has made a FRAND commitment negotiates a license, ordinarily it is constrained by the fact that if the parties are unable to reach agreement, the patent holder may have to establish reasonable royalties in court.
According to the complaint, by threatening to disrupt cell phone manufacturers’ supply of baseband processors, Qualcomm obtains elevated royalties and other license terms for its standard-essential patents that manufacturers would otherwise reject. These royalties amount to a tax on the manufacturers’ use of baseband processors manufactured by Qualcomm’s competitors, a tax that excludes these competitors and harms competition. Increased costs imposed by this tax are passed on to consumers, the complaint alleges.
By excluding competitors, Qualcomm impedes innovation that would offer significant consumer benefits, including those that foster the increased interconnectivity of consumer products, vehicles, buildings, and other items commonly referred to as the Internet of Things.
The FTC has charged Qualcomm with violating the FTC Act. The complaint alleges that Qualcomm:
- Maintains a “no license, no chips” policy under which it will supply its baseband processors only on the condition that cell phone manufacturers agree to Qualcomm’s preferred license terms. The FTC alleges that this tactic forces cell phone manufacturers to pay elevated royalties to Qualcomm on products that use a competitor’s baseband processors. According to the Commission’s complaint, this is an anticompetitive tax on the use of rivals’ processors. “No license, no chips” is a condition that other suppliers of semiconductor devices do not impose. The risk of losing access to Qualcomm baseband processors is too great for a cell phone manufacturer to bear because it would preclude the manufacturer from selling phones for use on important cellular networks.
- Refuses to license standard-essential patents to competitors. Despite its commitment to license standard-essential patents on FRAND terms, Qualcomm has consistently refused to license those patents to competing suppliers of baseband processors.
- Extracted exclusivity from Apple in exchange for reduced patent royalties. Qualcomm precluded Apple from sourcing baseband processors from Qualcomm’s competitors from 2011 to 2016. Qualcomm recognized that any competitor that won Apple’s business would become stronger, and used exclusivity to prevent Apple from working with and improving the effectiveness of Qualcomm’s competitors.
The Commission vote to file the complaint was 2-1. Commissioner Maureen K. Ohlhausen dissented and issued a statement. Both a public and sealed version of the complaint were filed in the U.S. District Court for the Northern District of California on January 17, 2017.
Private Class action
Panelist Kalpana Srinivasn of Susman and Godfrey LLP was able to speak about her firm’s private class action against Qualcomm. In September of this past year a federal District Court judge certified the case to move forward, explaining:
In sum, the Court finds that the proposed class members' interests weigh in favor of having this case litigated as a class action. In particular, the nature of Qualcomm's alleged overarching conduct and the desirability of concentrating the litigation in one proceeding weigh heavily in favor of finding that class treatment is superior to other methods of adjudication of the controversy. See Zinser, 253 F.3d at 1190-92. Nor do manageability concerns favor another form of adjudication. Therefore, Plaintiffs have satisfied the superiority requirement. Because Plaintiffs have also satisfied the predominance requirement, the Court GRANTS Plaintiffs' motion for class certification under Rule 23(b)(3).
See the full opinion at https://casetext.com/case/in-re-qualcomm-antitrust-litig-1
Antitrust in Court and the world outside of Court
Recently, the world outside of the courts included Elizabeth Warren discussing breaking up companies without use of courtroom litigation. Here is part of what she said in a recent article at https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c:
In this tradition, my administration would restore competition to the tech sector by taking two major steps:
First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.
**
Second, my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.
Current antitrust laws empower federal regulators to break up mergers that reduce competition. I will appoint regulators who are committed to using existing tools to unwind anti-competitive mergers . . . .
Panelists at the AAI conference commented perceptively about alternatives to current courtroom efforts directed at monopolization, including proposals for “no-fault” break-up of monopolies following the Warren approach, proposals to adopt European abuse of dominant position standards, and others.
Among a number of interesting points made about alternatives was Richard Brunell’s point that proposals for “no-fault” enforcement from the 1970s were more nuanced than may now be commonly recognized.
Jon Liebowitz and others had interesting comments about potential for FTC Act Section 5, which broadly prohibits prohibits “unfair or deceptive acts or practices in or affecting commerce.”
Jon Baker, in a question from the floor, encouraged discussion comparing Elizabeth Warren’s proposals with courtroom litigation standards.
And, in an article discussing current antitrust reform proposals that was provided as part of the resource materials for the AAI conference, Harry First writes, in an open spirit purposefully and playfully evoking Woodstock (a large gathering of hippies that occurred some time ago):
Say what you will about Hipster antitrust, it has connected to broader political concerns, and that is for the good. A slogan of the Woodstock decade was “Power to the People.” It still works for antitrust, “Right On.”
Harry First’s article is at https://www.antitrustinstitute.org/wp-content/uploads/2018/12/Frist-Woodstock-Antitrust.pdf
Great credit for the excellent and interesting AAI program goes to organizers Randy Stutz and Richard Brunell
This posting is by Don Allen Resnikoff, who takes responsibility for its content.
Tim Wu on Warren breakup proposals
Excerpt from Wired article:
LAST WEEK, PRESIDENTIAL candidate Senator Elizabeth Warren (D-Massachusetts) announced an ambitious plan to break up big tech companies like Google, Facebook, and Amazon and block them from selling their own products on their platforms.
Warren called out Facebook's acquisitions of Instagram and WhatsApp and Google's acquisition of online advertising giant DoubleClick as examples of the deals she'd like to see reversed.
**
WIRED spoke with Wu about how antitrust enforcement all but died in the US, and how leaders could bring it back. An edited transcript follows:
WIRED: What do you think of Senator Elizabeth Warren's proposal?
Tim Wu: Her proposal is aggressive but not crazy, I think. A good hard look at the mergers of the past decade is a big priority.
WIRED: The biggest impediment to antitrust enforcement now though is the courts. The Department of Justice sued to block AT&T’s acquisition of Time Warner and lost. Is this outside of elected officials' control at this point?
Wu: One problem is the priorities of not just the Republican Party but the Democratic Party. The Democrats get a turn now and then; the problem is that antitrust hasn't been given any weight. They need to screen for judges that care about economic justice. They need judges who are believers in robust enforcement of antitrust laws. I can't think of many judges like that who were appointed by Obama. Antitrust hasn't been a Democratic priority at all, and I think that has to change.
Warren's proposal strikes me as evidence that breakups, monopoly, and corporate concentration will be a 2020 issue.
I don't think it's crazy for Republicans to want some people like that too. It hasn't been their thing, they usually want people who are conservative all the way across the line. But the Republican Party has historically had more of a concern with promoting competition and preventing monopoly. The AT&T breakup started under Nixon and was completed under Reagan. People have almost forgotten that tradition.
Full interview article: https://www.wired.com/story/tim-wu-says-us-must-enforce-antitrust-laws/?CNDID=22877431&CNDID=22877431&bxid=MjM5Njc3NTA1Mzg2S0&hasha=63818d37ef32527bc50fd7b3eeb62882&hashb=a080f322dd48fe799a8c7787d567429bd9281dfb&mbid=nl_031119_daily_list1_p2&source=DAILY_NEWSLETTER&utm_brand=wired&utm_mailing=WIRED%20NL%20031119%20(1)&utm_medium=email&utm_source=nl
EU: Spotify files antitrust complaint against Apple
According to a reporte from Reuters, Spotify has filed a complaint with EU antitrust regulators against Apple, saying the iPhone maker unfairly limits rivals to its own Apple Music streaming service.
Spotify, which launched a year after the 2007 launch of the iPhone, said on Wednesday that Apple’s control of its App store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music, which began in 2015.
“Apple operates a platform that, for over a billion people around the world, is the gateway to the internet,” Spotify CEO Daniel Ek wrote in a blog post on Wednesday. “Apple is both the owner of the iOS platform and the App Store, and a competitor to services like Spotify. In theory, this is fine. But in Apple’s case, they continue to give themselves an unfair advantage at every turn.”
One of Spotify’s complaints is that it must choose between paying the 30 percent fee that Apple imposes on purchases made through its app store — which Ek says would “artificially inflate” the price of Spotify’s premium service so that it costs more than Apple Music — or accept technical limitations imposed by Apple restricting how it can improve its app or interact with customers.
Full Content: The Hill & Reuter
According to a reporte from Reuters, Spotify has filed a complaint with EU antitrust regulators against Apple, saying the iPhone maker unfairly limits rivals to its own Apple Music streaming service.
Spotify, which launched a year after the 2007 launch of the iPhone, said on Wednesday that Apple’s control of its App store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music, which began in 2015.
“Apple operates a platform that, for over a billion people around the world, is the gateway to the internet,” Spotify CEO Daniel Ek wrote in a blog post on Wednesday. “Apple is both the owner of the iOS platform and the App Store, and a competitor to services like Spotify. In theory, this is fine. But in Apple’s case, they continue to give themselves an unfair advantage at every turn.”
One of Spotify’s complaints is that it must choose between paying the 30 percent fee that Apple imposes on purchases made through its app store — which Ek says would “artificially inflate” the price of Spotify’s premium service so that it costs more than Apple Music — or accept technical limitations imposed by Apple restricting how it can improve its app or interact with customers.
Full Content: The Hill & Reuter
Buy American – musical instruments
I cherish my made-in-America upright tuba, made by the Olds company in California many years ago. I also cherish my euphonium (which is like a small tuba) made by the Conn company in Elkhart, Indiana many years ago. The Conn euphonium is very similar to the one I played in the Plainfield (N.J.) High School band. Olds, and Conn are among a number of revered American musical instrument companies that abandoned manufacturing in North America many years ago.
When I recently wanted a large tuba more suitable for amateur orchestras I now play in, the main practical choices were instruments made in China. They have prices I can afford. Beginning players and older amateurs like myself with budgets of three thousand dollars or less who want new tubas are as a practical matter limited to Chinese manufactured instruments. Of course, some used antique horns like my Olds and Conn can be purchased at low prices, especially if they have lots of dents in them, and are a partial alternative.
Musical instruments are a poster child for the observation that for many products a trade war with China that is based on tariffs will not bring manufacturing back to the U.S. It will just make Chinese imports more expensive for the U.S. consumer – effectively a tax. Take my large Chinese made tuba as an example. A Chinese made tuba is often a good but imperfect copy of a tuba made by a European company such as Miraphone. The German made Miraphone tuba copied by the maker of my Chinese made tuba has a selling price of more than $10,000. The difference in price between a European made tuba and the Chinese copy is so great that most students and adult amateurs will not switch from Chinese to European tubas even if tariffs push up prices 10% to 25% or more, perhaps from $2,500 to $3,500 for a particular instrument. A Chinese tuba selling for $3,500 does not compete with a similar if somewhat better European tuba that costs $11,000.
A tariff-driven price increase to a consumer for the Chinese tuba from, say, $2,500 to $3,500 is unlikely to be enough to encourage more American manufacturing of relatively low priced tubas that compete with the Chinese models. U.S. labor costs are likely to be too high to allow profitable manufacture in the U.S. of a tuba that sells at retail for $3,500. Manufacturing a tuba in the U.S. is likely to result in a product roughly as expensive as those made in Germany or the Czech Republic, because labor costs are comparable. (Actually, Czech made tubas are a little cheaper than German made.) Just as $11,000 tubas made in Europe do not compete with Chinese tubas costing $3,500, neither will $11,000 tubas made in the U.S. compete with $3,500 Chinese tubas. Students and penurious old amateurs will stay with the Chinese tubas even with the tariff driven price increase. A proof of the point is offered by an American company named Kanstul that has taken up manufacturing tubas in Los Angeles, California. It’s products remind players of products once made by the old York company in North America, but buying a Kanstul is expensive. Kanstuls compete in price in quality with expensive European tubas, not low end Chinese instruments.
Several U.S. companies make a business of importing low end Chinese musical instruments, selling to students and penurious old amateurs, adding value and boosting price somewhat by providing some quality control. They do a brisk business. Examples are Musicians Friend, Jim Laabs Music, and Mack Brass. A UK company called Wessex has a similar business, and has an interesting industry story of moving from a role as small importer of Chinese instruments to a big importer and then taking on some limited manufacturing.
The Wessex story is similar to the story of several American importers, and is told in an interesting if sometimes wandering blog by Founder and CEO Jonathan Hodgetts that is on the company website -- https://wessex-tubas.com/blogs/news/a-message-from-our-founder Mr. Hodgetts’ story reinforces the observation that tariffs will not bring manufacturing of low priced musical instruments back to the U.S. in any significant way.
Posting by Don Resnikoff, who takes responsibility for the content
I cherish my made-in-America upright tuba, made by the Olds company in California many years ago. I also cherish my euphonium (which is like a small tuba) made by the Conn company in Elkhart, Indiana many years ago. The Conn euphonium is very similar to the one I played in the Plainfield (N.J.) High School band. Olds, and Conn are among a number of revered American musical instrument companies that abandoned manufacturing in North America many years ago.
When I recently wanted a large tuba more suitable for amateur orchestras I now play in, the main practical choices were instruments made in China. They have prices I can afford. Beginning players and older amateurs like myself with budgets of three thousand dollars or less who want new tubas are as a practical matter limited to Chinese manufactured instruments. Of course, some used antique horns like my Olds and Conn can be purchased at low prices, especially if they have lots of dents in them, and are a partial alternative.
Musical instruments are a poster child for the observation that for many products a trade war with China that is based on tariffs will not bring manufacturing back to the U.S. It will just make Chinese imports more expensive for the U.S. consumer – effectively a tax. Take my large Chinese made tuba as an example. A Chinese made tuba is often a good but imperfect copy of a tuba made by a European company such as Miraphone. The German made Miraphone tuba copied by the maker of my Chinese made tuba has a selling price of more than $10,000. The difference in price between a European made tuba and the Chinese copy is so great that most students and adult amateurs will not switch from Chinese to European tubas even if tariffs push up prices 10% to 25% or more, perhaps from $2,500 to $3,500 for a particular instrument. A Chinese tuba selling for $3,500 does not compete with a similar if somewhat better European tuba that costs $11,000.
A tariff-driven price increase to a consumer for the Chinese tuba from, say, $2,500 to $3,500 is unlikely to be enough to encourage more American manufacturing of relatively low priced tubas that compete with the Chinese models. U.S. labor costs are likely to be too high to allow profitable manufacture in the U.S. of a tuba that sells at retail for $3,500. Manufacturing a tuba in the U.S. is likely to result in a product roughly as expensive as those made in Germany or the Czech Republic, because labor costs are comparable. (Actually, Czech made tubas are a little cheaper than German made.) Just as $11,000 tubas made in Europe do not compete with Chinese tubas costing $3,500, neither will $11,000 tubas made in the U.S. compete with $3,500 Chinese tubas. Students and penurious old amateurs will stay with the Chinese tubas even with the tariff driven price increase. A proof of the point is offered by an American company named Kanstul that has taken up manufacturing tubas in Los Angeles, California. It’s products remind players of products once made by the old York company in North America, but buying a Kanstul is expensive. Kanstuls compete in price in quality with expensive European tubas, not low end Chinese instruments.
Several U.S. companies make a business of importing low end Chinese musical instruments, selling to students and penurious old amateurs, adding value and boosting price somewhat by providing some quality control. They do a brisk business. Examples are Musicians Friend, Jim Laabs Music, and Mack Brass. A UK company called Wessex has a similar business, and has an interesting industry story of moving from a role as small importer of Chinese instruments to a big importer and then taking on some limited manufacturing.
The Wessex story is similar to the story of several American importers, and is told in an interesting if sometimes wandering blog by Founder and CEO Jonathan Hodgetts that is on the company website -- https://wessex-tubas.com/blogs/news/a-message-from-our-founder Mr. Hodgetts’ story reinforces the observation that tariffs will not bring manufacturing of low priced musical instruments back to the U.S. in any significant way.
Posting by Don Resnikoff, who takes responsibility for the content
Judge orders CVS/Aetna merger hearing
Judge Richard Leon of the US District Court for the District of Columbia, who has been asked to sign off on a government agreement that allowed CVS Health to buy health insurer Aetna, has ordered a hearing for April 5 on the matter.
The Judge issued the order on Thursday, March 14, saying that he wanted the hearing to discuss which witnesses—if any—should testify before he decides whether to approve the government’s deal with the companies.
The Justice Department approved the merger of CVS, a US pharmacy chain and benefits manager, and Aetna in October on condition that Aetna sell its Medicare prescription drug plan business to WellCare Health Plans.
Judges usually approve merger agreements that the government strikes with companies with little fanfare, but Leon has balked. In December, he said he was “less convinced” than the government that the asset sale to WellCare would resolve antitrust concerns.
Full Content: Reuters
Judge Richard Leon of the US District Court for the District of Columbia, who has been asked to sign off on a government agreement that allowed CVS Health to buy health insurer Aetna, has ordered a hearing for April 5 on the matter.
The Judge issued the order on Thursday, March 14, saying that he wanted the hearing to discuss which witnesses—if any—should testify before he decides whether to approve the government’s deal with the companies.
The Justice Department approved the merger of CVS, a US pharmacy chain and benefits manager, and Aetna in October on condition that Aetna sell its Medicare prescription drug plan business to WellCare Health Plans.
Judges usually approve merger agreements that the government strikes with companies with little fanfare, but Leon has balked. In December, he said he was “less convinced” than the government that the asset sale to WellCare would resolve antitrust concerns.
Full Content: Reuters
Jon Baker on Restoring a Competitive Economy
At a moment when political progressives like Bernie Sanders, Elizabeth Warren, Amy Klobuchar, and Tim Wu are addressing the general public on the politics of antitrust and competition policy, respected American University Law Professor Jonathan Baker has authored a book coming out in May: “The Antitrust Paradigm; Restoring a Competitive Economy.” As the book’s title suggests, Baker shares the interest expressed by the politicians in making the American economy more competitive, but his focus includes a lot of attention to improving antitrust litigation. Baker brings authority to the discussion as a respected economist with substantial real life experience at the Federal Trade Commission and the Federal Communications Commission.
Recently Baker presided over an American University Law School panel of experts who were invited to react to an advance copy of his book. Baker previewed his book’s contents. Part 1 of the book will talk about antitrust enforcement history, including political disputes and arguments pressed in opposition to antitrust enforcement. Part 2 is about antitrust issues and standards in our time. Part 3 is about the future and the challenge of restoring a competitive economy.
Panelist William Kovacic offered a cynical context for the discussion, even as he joined the call for enhanced enforcement. He pointed out that antitrust enforcement has never actually had a “golden age.” Generally speaking the forces of industry concentration have checked the efforts of enforcers, so that enforcement efforts have often been more symbolic than effective. Kovacic’s cautionary comments seem particularly relevant given the often conservative attitudes toward antitrust enforcement of the current federal judiciary.
The closing speaker on the program, Joseph Simons, the FTC’s current Chair, argued that antitrust enforcement must focus on close knowledge of the economics of particular industries, rather than vague ideological or political thinking. He explained that good economics might point us toward more or less enforcement, depending on the facts. He said the alternative of basing enforcement decisions on an ideological viewpoint or political considerations, either from the left or the right, is a mistake. Simons would rather make policy and enforcement decisions based on the best evidence and analysis –including in particular, empirically grounded economic analyses that weighs the costs and benefits of enforcement.
The impression I took away from the recent forum is that Professor Baker agrees that antitrust enforcement, at least as pursued through litigation, should be focused and empirically grounded on economic analysis relevant to understanding market power as exercised in particular product markets. That is mainly consistent with Chairman Simons’ thinking. Where Professor Baker and Chairman Simons may differ is on whether the data supports litigation reforms Baker proposes, such as modifying particular presumptions and burdens of proof in courtroom enforcement proceedings.
Baker has long supported the utility of suitably crafted presumptions in court proceedings, because strong evidence is required to overcome presumptions. With regard to mergers, for example, he has pointed out that unless the government enforcement agencies have some simple and sensible way of establishing a presumption of harm to competition, which the merging parties must then overcome to persuade a court to permit the transaction, few proposed mergers will be subject to effective challenge. Baker emphasizes that litigation presumptions must have sound economic grounding. Presumptions must be based on observable features of market structure that economic understanding suggests correlate well with harm to competition.
It will be interesting to compare Jonathan Baker’s antitrust reform proposals in his new book with the proposals of progressive political activist Tim Wu with regard to the nuts and bolts of antitrust litigation. In his book “The Curse of Bigness: Antitrust in the New Gilded Age” Wu said that he would like to jettison the government prosecutor’s reliance in litigation on the “consumer welfare” standard for antitrust enforcement. Wu believes that the consumer welfare standard suffers from a preoccupation with avoiding high consumer prices. Instead, he believes prosecutors and courts should focus on finding antitrust violations based on whether the targeted conduct “promotes competition or whether it is such as may suppress or even destroy competition."
Wu’s revised litigation standard is not, however, necessarily inconsistent with the idea that in antitrust litigation case presumptions, burdens of proof, and outcomes should be consistent with empirical data concerning exercise of market power in particular markets.
Of course, there are difficult competition policy issues that are outside of questions about what standards and rules should apply in antitrust litigation. Debates about antitrust litigation reform occur in the context of broader political debates about competition policy among people who consider themselves progressives or conservatives, Democrats or Republicans. Topics for political debate include identifying and pursuing policies concerning firm size and conduct that promote and protect a political economy perceived as desirable from one point of view or another.
It would seem that politically oriented reformers who identify as progressives, like the people named at the outset of this note, can address broader political issues without conflict with advocates like Jonathan Baker, whose goals include promoting practical and effective proposals for antitrust litigation reform. But that is a topic for another occasion.
This posting is by Don Allen Resnikoff, who takes responsibility for its content
At a moment when political progressives like Bernie Sanders, Elizabeth Warren, Amy Klobuchar, and Tim Wu are addressing the general public on the politics of antitrust and competition policy, respected American University Law Professor Jonathan Baker has authored a book coming out in May: “The Antitrust Paradigm; Restoring a Competitive Economy.” As the book’s title suggests, Baker shares the interest expressed by the politicians in making the American economy more competitive, but his focus includes a lot of attention to improving antitrust litigation. Baker brings authority to the discussion as a respected economist with substantial real life experience at the Federal Trade Commission and the Federal Communications Commission.
Recently Baker presided over an American University Law School panel of experts who were invited to react to an advance copy of his book. Baker previewed his book’s contents. Part 1 of the book will talk about antitrust enforcement history, including political disputes and arguments pressed in opposition to antitrust enforcement. Part 2 is about antitrust issues and standards in our time. Part 3 is about the future and the challenge of restoring a competitive economy.
Panelist William Kovacic offered a cynical context for the discussion, even as he joined the call for enhanced enforcement. He pointed out that antitrust enforcement has never actually had a “golden age.” Generally speaking the forces of industry concentration have checked the efforts of enforcers, so that enforcement efforts have often been more symbolic than effective. Kovacic’s cautionary comments seem particularly relevant given the often conservative attitudes toward antitrust enforcement of the current federal judiciary.
The closing speaker on the program, Joseph Simons, the FTC’s current Chair, argued that antitrust enforcement must focus on close knowledge of the economics of particular industries, rather than vague ideological or political thinking. He explained that good economics might point us toward more or less enforcement, depending on the facts. He said the alternative of basing enforcement decisions on an ideological viewpoint or political considerations, either from the left or the right, is a mistake. Simons would rather make policy and enforcement decisions based on the best evidence and analysis –including in particular, empirically grounded economic analyses that weighs the costs and benefits of enforcement.
The impression I took away from the recent forum is that Professor Baker agrees that antitrust enforcement, at least as pursued through litigation, should be focused and empirically grounded on economic analysis relevant to understanding market power as exercised in particular product markets. That is mainly consistent with Chairman Simons’ thinking. Where Professor Baker and Chairman Simons may differ is on whether the data supports litigation reforms Baker proposes, such as modifying particular presumptions and burdens of proof in courtroom enforcement proceedings.
Baker has long supported the utility of suitably crafted presumptions in court proceedings, because strong evidence is required to overcome presumptions. With regard to mergers, for example, he has pointed out that unless the government enforcement agencies have some simple and sensible way of establishing a presumption of harm to competition, which the merging parties must then overcome to persuade a court to permit the transaction, few proposed mergers will be subject to effective challenge. Baker emphasizes that litigation presumptions must have sound economic grounding. Presumptions must be based on observable features of market structure that economic understanding suggests correlate well with harm to competition.
It will be interesting to compare Jonathan Baker’s antitrust reform proposals in his new book with the proposals of progressive political activist Tim Wu with regard to the nuts and bolts of antitrust litigation. In his book “The Curse of Bigness: Antitrust in the New Gilded Age” Wu said that he would like to jettison the government prosecutor’s reliance in litigation on the “consumer welfare” standard for antitrust enforcement. Wu believes that the consumer welfare standard suffers from a preoccupation with avoiding high consumer prices. Instead, he believes prosecutors and courts should focus on finding antitrust violations based on whether the targeted conduct “promotes competition or whether it is such as may suppress or even destroy competition."
Wu’s revised litigation standard is not, however, necessarily inconsistent with the idea that in antitrust litigation case presumptions, burdens of proof, and outcomes should be consistent with empirical data concerning exercise of market power in particular markets.
Of course, there are difficult competition policy issues that are outside of questions about what standards and rules should apply in antitrust litigation. Debates about antitrust litigation reform occur in the context of broader political debates about competition policy among people who consider themselves progressives or conservatives, Democrats or Republicans. Topics for political debate include identifying and pursuing policies concerning firm size and conduct that promote and protect a political economy perceived as desirable from one point of view or another.
It would seem that politically oriented reformers who identify as progressives, like the people named at the outset of this note, can address broader political issues without conflict with advocates like Jonathan Baker, whose goals include promoting practical and effective proposals for antitrust litigation reform. But that is a topic for another occasion.
This posting is by Don Allen Resnikoff, who takes responsibility for its content
Judge narrows NCAA cap on athlete compensation
A judge has ruled against the NCAA in a federal antitrust case, opening door for players to receive more compensation, but limited to education purposes. US District Judge Claudia Wilken said that the NCAA cannot “limit compensation or benefits related to education” for athletes playing Division I men’s or women’s basketball or Bowl Subdivision football.
Wilken said these athletes may receive are scholarships to complete undergraduate or graduate degrees at any school. The judge also appeared to open the possibility of athletes being able to receive cash or cash-equivalent awards based on academics or graduation, albeit under some constraints.
At the same time, however, her 104-page ruling prevents athletes from receiving unlimited benefits, as the plaintiffs had hoped.
The NCAA “may continue … to limit compensation and benefits that are unrelated to education,” Wilken ruled.
The New York Times article emphasized the shortfall for Plaintiffs:
So why doesn’t it feel as if the group of athletes who pursued the litigation to end the N.C.A.A.’s rule won the case? Why did they and their star sports labor lawyer Jeffrey Kessler not get the outcome they most fervently sought?
Despite finding that the N.C.A.A. was violating federal law, Wilken turned away the plaintiffs’ main proposed remedy, which was also the logical one: to lift the supposedly lawbreaking cap on compensation. That means the continuation of a status quo where so many players feel they are working basically for free. How’s that?
“When you apply a uniquely muddled set of laws to a unique industry, this is the kind of ruling you get,” said Gabe Feldman, who directs Tulane’s sports law program and teaches antitrust law (the unique muddle to which he was referring).
The upshot of Friday’s ruling, pending a likely appeal, is that the N.C.A.A. may continue to cap payments to athletes after all — with the limited exception of expenses that are educational in nature. Think computers, or costs related to internships, or postgraduate scholarships.
https://www.nytimes.com/2019/03/11/sports/ncaa-court-ruling-antitrust.html
A copy of the NCAA Court Opinion is here (paywall) https://www.law360.com/articles/1113787/attachments/0
A judge has ruled against the NCAA in a federal antitrust case, opening door for players to receive more compensation, but limited to education purposes. US District Judge Claudia Wilken said that the NCAA cannot “limit compensation or benefits related to education” for athletes playing Division I men’s or women’s basketball or Bowl Subdivision football.
Wilken said these athletes may receive are scholarships to complete undergraduate or graduate degrees at any school. The judge also appeared to open the possibility of athletes being able to receive cash or cash-equivalent awards based on academics or graduation, albeit under some constraints.
At the same time, however, her 104-page ruling prevents athletes from receiving unlimited benefits, as the plaintiffs had hoped.
The NCAA “may continue … to limit compensation and benefits that are unrelated to education,” Wilken ruled.
The New York Times article emphasized the shortfall for Plaintiffs:
So why doesn’t it feel as if the group of athletes who pursued the litigation to end the N.C.A.A.’s rule won the case? Why did they and their star sports labor lawyer Jeffrey Kessler not get the outcome they most fervently sought?
Despite finding that the N.C.A.A. was violating federal law, Wilken turned away the plaintiffs’ main proposed remedy, which was also the logical one: to lift the supposedly lawbreaking cap on compensation. That means the continuation of a status quo where so many players feel they are working basically for free. How’s that?
“When you apply a uniquely muddled set of laws to a unique industry, this is the kind of ruling you get,” said Gabe Feldman, who directs Tulane’s sports law program and teaches antitrust law (the unique muddle to which he was referring).
The upshot of Friday’s ruling, pending a likely appeal, is that the N.C.A.A. may continue to cap payments to athletes after all — with the limited exception of expenses that are educational in nature. Think computers, or costs related to internships, or postgraduate scholarships.
https://www.nytimes.com/2019/03/11/sports/ncaa-court-ruling-antitrust.html
A copy of the NCAA Court Opinion is here (paywall) https://www.law360.com/articles/1113787/attachments/0
More on Huawei as 5G industry leader and US security threat:
Excerpt from an article by By Tom Wheeler, Robert D. Williams
Wednesday, February 20, 2019, 4:18 PM https://www.lawfareblog.com/keeping-huawei-hardware-out-us-not-enough-secure-5g
American leadership on 5G must also be part of a comprehensive U.S. strategy for technology competition.
One element of such a strategy is pushing back on Chinese trade and investment practices that benefit companies such as Huawei but undermine fair competition for U.S. firms whose market share and innovation edge are eroded in the face of distortive Chinese industrial policies. This is both an economic and a national-security priority, given the importance of 5G-enabled technologies to the operation of the military and critical infrastructure. U.S. trade negotiators are pressing China to commit to structural reforms on everything from government subsidies to state-sponsored cyber espionage for exactly those reasons (among others).
There is, of course, the possibility that the crackdown on Huawei and related efforts to protect U.S. technology could reinforce views within China that Trump’s trade war merely serves a broader effort by Washington to thwart China’s rise. That reactioncould stimulate China to double down on aggressive state policies to reduce its dependence on American semiconductors and other technology. For this reason, as with the cybersecurity challenge, it’s crucial that the United States enlist the supportof like-minded allies who broadly share U.S. concerns about discriminatory and distortive Chinese trade practices. At the same time, it is also important for the U.S. to seek cooperation with China in areas where leveraging the two countries’ technological strengths can yield mutual benefits without undermining their legitimate security interests.
U.S. technology and trade policy cannot be merely reactionary. It must include aggressive leadership to both protect U.S. networks and promote U.S. technology. This includes redoubled government investments in basic research and regulatory expectations that the security of 5G will not be decided unilaterally by those who build the network. Any national effort must prioritize not only STEM skills but also cybersecurity skills, in particular through university and workforce-education programs.
Even as the United States takes legitimate steps to protect national security in 5G infrastructure and operations, it should not succumb to the impulse to close off the U.S. economy to the innovation-driving investment, capital and talent that have made the United States a technology leader. America’s open economic model—not China’s state-directed approach—offers the best chance to realize the enormous opportunities of 5G while mitigating its manifold risks.
Huawei lawsuit complaint against US is here:
https://www.wsj.com/public/resources/documents/huawei.pdf?mod=article_inline
Excerpt:
PRELIMINARY STATEMENT
1. The Framers of the United States Constitution were deeply concerned about the potential abuse of legislative power. They believed that “[t]he legislative department is everywhere extending the sphere of its activity, and drawing all power into its impetuous vortex,” and that as a result, “[i]t is against the enterprising ambition of this department that the people ought to indulge all their jealousy and exhaust all their precautions.” The Federalist No. 48 (James Madison). The Framers accordingly granted Congress only limited and enumerated legislative powers; divided these powers between a House of Representatives and a Senate; subjected the exercise of these powers to strict procedures; and vested the executive and judicial powers in separate, independent branches of the government.
2. One of the Framers’ particular concerns was that the legislature would use its power to target specific individuals for adverse treatment. The Framers believed that, if the legislature could itself sanction specific persons “without hearing or trial” conducted by the Executive or the courts, “no man can be safe, nor know when he may be the innocent victim of a prevailing faction.” The Papers of Alexander Hamilton, at 485–86 (Harold C. Syrett ed. 1961– - 3 - 1979). Thus, even where the Framers otherwise granted Congress enumerated legislative powers, they prohibited it from using those powers to enact bills of attainder that impose punishment on specific individuals identified by the legislature. Further, through the Due Process Clause, they prohibited legislation that would single out particular persons for deprivations of liberty. Finally, through the Vesting Clauses and the resulting separation of powers, the Framers prohibited legislation that, rather than simply enacting a general rule, applied a rule to an individual case or person.
3. Provisions of section 889 of the 2019 NDAA violate these constitutional limitations. In particular, section 889 specifically targets Plaintiff Huawei Technologies Co., Ltd., and its subsidiaries and affiliates, such as Plaintiff Huawei Technologies USA, Inc. Section 889 calls out Huawei by name, legislatively adjudicates it to be connected to the Government of the People’s Republic of China, and precludes U.S. government agencies not only from purchasing specified Huawei equipment and services, but also from contracting with or awarding grants or loans to third parties who purchase or use such equipment or services—regardless of whether the equipment or services have any impact on or connection to the government of the United States. The actual and intended effect of these prohibitions is to bar Huawei from significant segments of the U.S. market for telecommunications equipment and services, thereby inflicting immediate and ongoing economic, competitive, and reputational harms on Huawei.
4. Section 889 permanently imposes these burdens and sanctions on Huawei without giving it a fair hearing or the opportunity to rebut the allegations against it, and without opportunity for escape. The statute specifically and expressly applies these broad prohibitions and sanctions only to Huawei and one other named entity. In contrast, the statute gives the Secretary of Defense, in consultation with the FBI Director or the Director of National Intelligence, authority to determine whether other entities are owned or controlled by, or otherwise connected to, the Chinese government—determinations that are then subject to judicial review under the Administrative Procedure Act. The statute affords those Officers of the United States the discretion to change their determinations if they find, for example, that the facts about a particular entity have changed. But those Officers have no such discretion with respect to Huawei: even if those Officers definitively find that Huawei has no connection to the Chinese government, the prohibitions targeting, and sanctions imposed on, Huawei will remain in place. In short, section 889 blacklists Huawei and bars it from significant sectors of the U.S. telecommunications market, all without giving Huawei a fair hearing at which it could be informed of and confront the accusations made against it.
5. In so doing, section 889 violates at least three constitutional provisions: It violates the Bill of Attainder Clause by singling out Huawei for punishment—blacklisting it, impugning both its general reputation and its specific commitment to honoring the laws of the United States, and denying it any procedure through which it can clear its name and escape sanction. Section 889 also violates the Due Process Clause by selectively depriving Huawei of its liberty— severely curtailing its freedom to do business, stigmatizing it by effectively branding it a tool of the Chinese government and a risk to U.S. security, and denying it any pre-deprivation legal process to confront the congressional charges against it. And section 889 violates the Vesting Clauses and the resulting separation of powers by legislatively adjudicating Huawei to be “guilty” of an alleged connection to the Chinese government, and by implication a threat to U.S. security, rather than leaving it to the Executive and the courts to make and adjudicate any such charges.
6. Moreover, as a practical matter, section 889’s focus on Huawei (and one other company), apparently based on Huawei Technologies Co., Ltd.’s national origin, makes no sense. Section 889 permits manufacturers with extensive operations in China and joint venture agreements with the Chinese government to continue to sell equipment to the U.S. Government and its contractors and grant and loan recipients, while legislatively singling out Huawei—a private, non-government-owned company controlled by a private Board of Directors—and just one other entity for sweeping adverse treatment. Further, the government itself has recognized that virtually all manufacturers of telecommunications equipment in the world face cybersecurity risks as a result of vulnerabilities in the global supply chain. Yet section 889 does nothing to address these global supply chain risks. Thus, if the central purpose of section 889 is to prevent Chinese-origin equipment from being used, directly or indirectly, by the U.S. Government, the provision is ineffective on its face. Moreover, it is overbroad, because it bars use (by government contractors) or purchase (by government grant and loan recipients) of Huawei equipment and services even where Huawei equipment or services are not being used to support a governmentrelated function.
7. In short, Section 889 is not only contrary to the economic interests of the United States and its citizens, and ineffective at advancing U.S. security interests, it is also contrary to the Constitution of the United States. Huawei is a world-leading provider of information and communications technology products and services, offering more advanced equipment at lower costs than any other such company, and doing so in areas of the world and of the United States that other providers serve less effectively or not at all. Without Huawei equipment and services, consumers in the United States (particularly in rural and poor areas) will be deprived of access to the most advanced technologies, and will face higher prices and a significantly less competitive market. In the area of 5G mobile service in particular, American consumers will have reduced access to state-of-the art networks and suffer from inferior service. At the same time, Huawei equipment and services are subject to advanced security procedures, and no backdoors, implants, or other intentional security vulnerabilities have been documented in any of the more than 170 countries in the world where Huawei equipment and services are used. Moreover, while there are real risks in the global supply chain that can and should be addressed by comprehensive supply chain strategies and rules, those risks are not rationally or effectively addressed by singling out and blacklisting equipment of specific companies such as Huawei. Indeed, as noted, Huawei is a privately-owned company controlled by a private Board of Directors. While courts do not have the authority to protect the people from all the ill-advised aspects of the NDAA, they do have the duty to protect Huawei and others from its unconstitutional aspects—including its specific targeting of Huawei for punishment, its deprivation of Huawei’s liberty without a fair and impartial hearing, and its usurpation of the charging and adjudicative powers reserved by the Constitution to the executive and judicial branches. Plaintiffs respectfully request that the Court declare unconstitutional and enjoin enforcement of those discrete aspects of section 889 that violate the Constitution, while leaving all other aspects of the NDAA, and the remainder of section 889 itself, intact.
Excerpt from an article by By Tom Wheeler, Robert D. Williams
Wednesday, February 20, 2019, 4:18 PM https://www.lawfareblog.com/keeping-huawei-hardware-out-us-not-enough-secure-5g
American leadership on 5G must also be part of a comprehensive U.S. strategy for technology competition.
One element of such a strategy is pushing back on Chinese trade and investment practices that benefit companies such as Huawei but undermine fair competition for U.S. firms whose market share and innovation edge are eroded in the face of distortive Chinese industrial policies. This is both an economic and a national-security priority, given the importance of 5G-enabled technologies to the operation of the military and critical infrastructure. U.S. trade negotiators are pressing China to commit to structural reforms on everything from government subsidies to state-sponsored cyber espionage for exactly those reasons (among others).
There is, of course, the possibility that the crackdown on Huawei and related efforts to protect U.S. technology could reinforce views within China that Trump’s trade war merely serves a broader effort by Washington to thwart China’s rise. That reactioncould stimulate China to double down on aggressive state policies to reduce its dependence on American semiconductors and other technology. For this reason, as with the cybersecurity challenge, it’s crucial that the United States enlist the supportof like-minded allies who broadly share U.S. concerns about discriminatory and distortive Chinese trade practices. At the same time, it is also important for the U.S. to seek cooperation with China in areas where leveraging the two countries’ technological strengths can yield mutual benefits without undermining their legitimate security interests.
U.S. technology and trade policy cannot be merely reactionary. It must include aggressive leadership to both protect U.S. networks and promote U.S. technology. This includes redoubled government investments in basic research and regulatory expectations that the security of 5G will not be decided unilaterally by those who build the network. Any national effort must prioritize not only STEM skills but also cybersecurity skills, in particular through university and workforce-education programs.
Even as the United States takes legitimate steps to protect national security in 5G infrastructure and operations, it should not succumb to the impulse to close off the U.S. economy to the innovation-driving investment, capital and talent that have made the United States a technology leader. America’s open economic model—not China’s state-directed approach—offers the best chance to realize the enormous opportunities of 5G while mitigating its manifold risks.
Huawei lawsuit complaint against US is here:
https://www.wsj.com/public/resources/documents/huawei.pdf?mod=article_inline
Excerpt:
PRELIMINARY STATEMENT
1. The Framers of the United States Constitution were deeply concerned about the potential abuse of legislative power. They believed that “[t]he legislative department is everywhere extending the sphere of its activity, and drawing all power into its impetuous vortex,” and that as a result, “[i]t is against the enterprising ambition of this department that the people ought to indulge all their jealousy and exhaust all their precautions.” The Federalist No. 48 (James Madison). The Framers accordingly granted Congress only limited and enumerated legislative powers; divided these powers between a House of Representatives and a Senate; subjected the exercise of these powers to strict procedures; and vested the executive and judicial powers in separate, independent branches of the government.
2. One of the Framers’ particular concerns was that the legislature would use its power to target specific individuals for adverse treatment. The Framers believed that, if the legislature could itself sanction specific persons “without hearing or trial” conducted by the Executive or the courts, “no man can be safe, nor know when he may be the innocent victim of a prevailing faction.” The Papers of Alexander Hamilton, at 485–86 (Harold C. Syrett ed. 1961– - 3 - 1979). Thus, even where the Framers otherwise granted Congress enumerated legislative powers, they prohibited it from using those powers to enact bills of attainder that impose punishment on specific individuals identified by the legislature. Further, through the Due Process Clause, they prohibited legislation that would single out particular persons for deprivations of liberty. Finally, through the Vesting Clauses and the resulting separation of powers, the Framers prohibited legislation that, rather than simply enacting a general rule, applied a rule to an individual case or person.
3. Provisions of section 889 of the 2019 NDAA violate these constitutional limitations. In particular, section 889 specifically targets Plaintiff Huawei Technologies Co., Ltd., and its subsidiaries and affiliates, such as Plaintiff Huawei Technologies USA, Inc. Section 889 calls out Huawei by name, legislatively adjudicates it to be connected to the Government of the People’s Republic of China, and precludes U.S. government agencies not only from purchasing specified Huawei equipment and services, but also from contracting with or awarding grants or loans to third parties who purchase or use such equipment or services—regardless of whether the equipment or services have any impact on or connection to the government of the United States. The actual and intended effect of these prohibitions is to bar Huawei from significant segments of the U.S. market for telecommunications equipment and services, thereby inflicting immediate and ongoing economic, competitive, and reputational harms on Huawei.
4. Section 889 permanently imposes these burdens and sanctions on Huawei without giving it a fair hearing or the opportunity to rebut the allegations against it, and without opportunity for escape. The statute specifically and expressly applies these broad prohibitions and sanctions only to Huawei and one other named entity. In contrast, the statute gives the Secretary of Defense, in consultation with the FBI Director or the Director of National Intelligence, authority to determine whether other entities are owned or controlled by, or otherwise connected to, the Chinese government—determinations that are then subject to judicial review under the Administrative Procedure Act. The statute affords those Officers of the United States the discretion to change their determinations if they find, for example, that the facts about a particular entity have changed. But those Officers have no such discretion with respect to Huawei: even if those Officers definitively find that Huawei has no connection to the Chinese government, the prohibitions targeting, and sanctions imposed on, Huawei will remain in place. In short, section 889 blacklists Huawei and bars it from significant sectors of the U.S. telecommunications market, all without giving Huawei a fair hearing at which it could be informed of and confront the accusations made against it.
5. In so doing, section 889 violates at least three constitutional provisions: It violates the Bill of Attainder Clause by singling out Huawei for punishment—blacklisting it, impugning both its general reputation and its specific commitment to honoring the laws of the United States, and denying it any procedure through which it can clear its name and escape sanction. Section 889 also violates the Due Process Clause by selectively depriving Huawei of its liberty— severely curtailing its freedom to do business, stigmatizing it by effectively branding it a tool of the Chinese government and a risk to U.S. security, and denying it any pre-deprivation legal process to confront the congressional charges against it. And section 889 violates the Vesting Clauses and the resulting separation of powers by legislatively adjudicating Huawei to be “guilty” of an alleged connection to the Chinese government, and by implication a threat to U.S. security, rather than leaving it to the Executive and the courts to make and adjudicate any such charges.
6. Moreover, as a practical matter, section 889’s focus on Huawei (and one other company), apparently based on Huawei Technologies Co., Ltd.’s national origin, makes no sense. Section 889 permits manufacturers with extensive operations in China and joint venture agreements with the Chinese government to continue to sell equipment to the U.S. Government and its contractors and grant and loan recipients, while legislatively singling out Huawei—a private, non-government-owned company controlled by a private Board of Directors—and just one other entity for sweeping adverse treatment. Further, the government itself has recognized that virtually all manufacturers of telecommunications equipment in the world face cybersecurity risks as a result of vulnerabilities in the global supply chain. Yet section 889 does nothing to address these global supply chain risks. Thus, if the central purpose of section 889 is to prevent Chinese-origin equipment from being used, directly or indirectly, by the U.S. Government, the provision is ineffective on its face. Moreover, it is overbroad, because it bars use (by government contractors) or purchase (by government grant and loan recipients) of Huawei equipment and services even where Huawei equipment or services are not being used to support a governmentrelated function.
7. In short, Section 889 is not only contrary to the economic interests of the United States and its citizens, and ineffective at advancing U.S. security interests, it is also contrary to the Constitution of the United States. Huawei is a world-leading provider of information and communications technology products and services, offering more advanced equipment at lower costs than any other such company, and doing so in areas of the world and of the United States that other providers serve less effectively or not at all. Without Huawei equipment and services, consumers in the United States (particularly in rural and poor areas) will be deprived of access to the most advanced technologies, and will face higher prices and a significantly less competitive market. In the area of 5G mobile service in particular, American consumers will have reduced access to state-of-the art networks and suffer from inferior service. At the same time, Huawei equipment and services are subject to advanced security procedures, and no backdoors, implants, or other intentional security vulnerabilities have been documented in any of the more than 170 countries in the world where Huawei equipment and services are used. Moreover, while there are real risks in the global supply chain that can and should be addressed by comprehensive supply chain strategies and rules, those risks are not rationally or effectively addressed by singling out and blacklisting equipment of specific companies such as Huawei. Indeed, as noted, Huawei is a privately-owned company controlled by a private Board of Directors. While courts do not have the authority to protect the people from all the ill-advised aspects of the NDAA, they do have the duty to protect Huawei and others from its unconstitutional aspects—including its specific targeting of Huawei for punishment, its deprivation of Huawei’s liberty without a fair and impartial hearing, and its usurpation of the charging and adjudicative powers reserved by the Constitution to the executive and judicial branches. Plaintiffs respectfully request that the Court declare unconstitutional and enjoin enforcement of those discrete aspects of section 889 that violate the Constitution, while leaving all other aspects of the NDAA, and the remainder of section 889 itself, intact.
Reports that Trump asked Gary Cohn to block ATT merger with Time-Warner
https://www.competitionpolicyinternational.com/us-trump-reportedly-asked-gary-cohn-to-block-att-time-warner-merger/
From CPI: A new report about the close relationship between Fox News and President Donald Trump states the President personally asked a top White House aide to make sure the Justice Department (DOJ) stopped AT&T from purchasing Time Warner.
Ever since the DOJ sued in 2017 to block AT&T’s acquisition of Time Warner, theories and accusations of political animus has swirled around the antitrust case.
At the heart of the theories is Trump’s public dislike of CNN, which was a division of Time Warner. The company that has since been renamed WarnerMedia, which also includes networks such TNT and HBO, in addition to CNN.
In a new piece for the New Yorker, investigative journalist Jane Mayer reports that a few months before the DOJ filed its lawsuit, Trump pressured Gary Cohn, the former director of the National Economic Council, to tell the DOJ to block AT&T’s Time Warner deal.
According to Mayer’s source, Trump called Cohn and then Chief-of-Staff John Kelly into his office and said to Kelly, “I’ve been telling Cohn to get this lawsuit filed and nothing’s happened! I’ve mentioned it fifty times. And nothing’s happened. I want to make sure it’s filed. I want that deal blocked.”
After the two men walked out of the Oval Office meeting, Cohn told Kelly not to follow through with the president’s request, according to Mayer’s report.
Full Content: New Yorker -https://www.newyorker.com/magazine/2019/03/11/the-making-of-the-fox-news-white-house
https://www.competitionpolicyinternational.com/us-trump-reportedly-asked-gary-cohn-to-block-att-time-warner-merger/
From CPI: A new report about the close relationship between Fox News and President Donald Trump states the President personally asked a top White House aide to make sure the Justice Department (DOJ) stopped AT&T from purchasing Time Warner.
Ever since the DOJ sued in 2017 to block AT&T’s acquisition of Time Warner, theories and accusations of political animus has swirled around the antitrust case.
At the heart of the theories is Trump’s public dislike of CNN, which was a division of Time Warner. The company that has since been renamed WarnerMedia, which also includes networks such TNT and HBO, in addition to CNN.
In a new piece for the New Yorker, investigative journalist Jane Mayer reports that a few months before the DOJ filed its lawsuit, Trump pressured Gary Cohn, the former director of the National Economic Council, to tell the DOJ to block AT&T’s Time Warner deal.
According to Mayer’s source, Trump called Cohn and then Chief-of-Staff John Kelly into his office and said to Kelly, “I’ve been telling Cohn to get this lawsuit filed and nothing’s happened! I’ve mentioned it fifty times. And nothing’s happened. I want to make sure it’s filed. I want that deal blocked.”
After the two men walked out of the Oval Office meeting, Cohn told Kelly not to follow through with the president’s request, according to Mayer’s report.
Full Content: New Yorker -https://www.newyorker.com/magazine/2019/03/11/the-making-of-the-fox-news-white-house
Maryland car dealers fight minimum advertised price (“MAP”) restrictions
Unhappy car dealers in Maryland are pressing the Maryland legislature to pass a bill, MD HB610, that would limit minimum advertised price (“MAP”) restrictions. The proposed legislation would stop car manufacturers or distributors from forbidding dealers from advertising a vehicle for sale or lease below a specified price. Dealers say the advertising restrictions are designed to keep car prices higher, and should be stopped.
See: http://mgaleg.maryland.gov/webmga/frmMain.aspx?id=hb0610&stab=01&pid=billpage&tab=subject3&ys=2019rs
To understand the proposed bill, a little background is helpful. Retail price maintenance or “RPM” has been used by manufacturers and distributors to set a minimum retail price for products. For particular products, like cars, RPM keeps retail prices higher than they otherwise would be.
For many years retail price maintenance was found by the courts to violate the antitrust laws on its face – it was ruled “per se” illegal. But in Leegin Creative Leather Products, Inc., 551 U.S. 887 (2007), the U.S. Supreme Court overturned earlier case law saying that any agreement setting retail prices is illegal without any need to prove competitive harm. In Leegin the U.S. Supreme Court held that minimum resale price maintenance agreements are no longer per se illegal under federal law. Instead, the Court held that federal law requires that such agreements must be evaluated under a reasonableness standard. That is, if a price restriction has a reasonable business justification, perhaps guaranteeing the consumer great dealer service, then a restriction on retail price might be viewed by courts as reasonable.
In Maryland and some other states, particularly California, Illinois, Michigan, and New York, the legislature rejected the U.S. Supreme Court’s Leegin holding. In 2009, in response to the Leegin case, the Maryland General Assembly enacted Chapter 43 of the 2009 Laws of Maryland, which amended the Maryland Antitrust Act to provide that an agreement establishing a minimum retail price is an unreasonable restraint of trade and, thus, per se illegal in Maryland. Md. Code Ann., Com' Law $ 11-204(b). Such agreements, although no longer per se illegal under federal law, once again became per se illegal in Maryland. So, such a practice was much more likely to run afoul of Maryland antitrust law than it was to violate federal antitrust law. See http://www.marylandattorneygeneral.gov/News%20Documents/JJVC_COMPLAINT.pdf
Complaining Maryland car dealers believe that the use of MAP advertising restrictions provides manufacturers with a way to evade Retail Price Maintenance restrictions. While it is true that with MAP restrictions there is no agreement setting retail price, so the dealer can sell at any price, the concern is that prices actually paid by consumers will be higher where there is a restriction on how low a price the dealer can advertise. Some manufacturers encourage dealer cooperation on MAP advertising limits by offering dealers co-op advertising funds as an incentive. Some manufacturers go further, applying MAP policies to all resellers, and refusing to sell inventory to any dealer that refuses to comply.
Dealers believe that even though a MAP policy focuses on setting the price that resellers may advertise for their cars, and allows resellers to complete sales at prices determined by the resellers, MAP is a loophole for manufacturers that wish to limit retail price competition. The problem is that MAP advertising restrictions make an advertising “price war” much less likely, diminishing price competition.
The proposed legislation would plug this perceived loophole.
A question suggested by the dealer action is whether MAP policies for car dealers might be found to violate the antitrust laws, even in the absence of the proposed new Maryland State statute. Although there has not yet been a court case considering this issue, the answer appears to be “maybe,” depending on the facts of particular situations.
As a general matter, dealers can point out to a Court, persuasively, that consumers are likely to be harmed by MAP limitations, because actual retail prices paid will be higher. Also, muzzling dealers by preventing them from advertising low prices seems wrong in principle.
But these are tough times for antitrust enforcement. These days a MAP policy may be subject to the same sort of antitrust “rule of reason” that is applied by courts to RPM under federal law, perhaps applied with a bias toward the manufacturer. The conventional wisdom that may apply is that unless there is accompanying anti-competitive conduct or circumstances, the courts are likely to conclude that anti-competitive aspects of a MAP agreement won’t exceed the pro-competitive benefits, and there won’t be an antitrust problem.
But it is quite possible that if a court were to look into particular MAP arrangements, it might discover accompanying anti-competitive conduct or circumstances that could change its assessment of the legality of the practice. The agreement between manufacturer and dealer by its terms or as applied may in reality discourage a dealer from actually selling below a minimum price. Empirical investigation may reinforce the common-sense point that in the auto sales context (big ticket, relatively few brands) the limitations on ability of dealers to advertise low prices can cause prices to be higher than they would otherwise be. In reality the MAP arrangement between manufacturer and dealer may look and perform like an RPM agreement. In that case, the courts could take a closer look to see if consumers are actually being harmed. That is particular important in those state courts where resale price maintenance is per se illegal.
The FTC offers a relevant Guide at https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings-supply-chain/manufacturer-imposed
The FTC Guide offers a Q and A section, copied below. The Q and A focuses on manufacturer inducements of promotional money to encourage dealer agreement to MAP restrictions. Promotional money was important in the FTC’s cited music industry case. The unreasonable use of manufacturer inducements in the FTC’s music industry case is an instance where a MAP policy is transformed by manufacturer conduct into something more like a RPM program, causing more aggressive antitrust scrutiny. The FTC music industry case supports the thought that manufacturers should not limit dealers from advertising to consumers about discounts. But the mention at the end of the FTC Q and A of "new standards that allow more direct influence of retail prices" by manufacturers reflects the current shrinking antitrust enforcement environment.
The FTC Q and A
Q: My supplier offers a cooperative advertising program, but I can't participate if I advertise a price that is below the supplier's minimum advertised price. I think that's unfair.
A: The law allows a manufacturer considerable leeway in setting the terms for advertising that it helps to pay for. The manufacturer offers these promotional programs to better compete against the products of the other manufacturers. There are limited situations when these programs can have an unreasonable effect on price levels. For instance, the FTC challenged the Minimum Advertised Price (MAP) policies of five large distributors of pre-recorded music [Universal Music & Video Distribution Corp.and UMG Recordings, Inc. url https://www.ftc.gov/enforcement/cases-proceedings/9710070/universal-music-video-distribution-corpand-umg-recordings-inc] because the policies were unreasonable in their reach: they prohibited ads with discounted prices, even if the retailer paid for the ads with its own money; they applied to in-store advertising; and a single violation required the retailer to forfeit funds for all of its stores for up to 90 days. The FTC found that these policies, in effect for more than 85 percent of market sales, were unreasonable and prevented retailers from telling consumers about discounts on records and CDs. Issues involving advertising allowances may become of less practical concern as manufacturers adjust to new standards that allow more direct influence on retail prices.
Posting by Don Allen Resnikoff – thanks to KMJ and others for helping
Unhappy car dealers in Maryland are pressing the Maryland legislature to pass a bill, MD HB610, that would limit minimum advertised price (“MAP”) restrictions. The proposed legislation would stop car manufacturers or distributors from forbidding dealers from advertising a vehicle for sale or lease below a specified price. Dealers say the advertising restrictions are designed to keep car prices higher, and should be stopped.
See: http://mgaleg.maryland.gov/webmga/frmMain.aspx?id=hb0610&stab=01&pid=billpage&tab=subject3&ys=2019rs
To understand the proposed bill, a little background is helpful. Retail price maintenance or “RPM” has been used by manufacturers and distributors to set a minimum retail price for products. For particular products, like cars, RPM keeps retail prices higher than they otherwise would be.
For many years retail price maintenance was found by the courts to violate the antitrust laws on its face – it was ruled “per se” illegal. But in Leegin Creative Leather Products, Inc., 551 U.S. 887 (2007), the U.S. Supreme Court overturned earlier case law saying that any agreement setting retail prices is illegal without any need to prove competitive harm. In Leegin the U.S. Supreme Court held that minimum resale price maintenance agreements are no longer per se illegal under federal law. Instead, the Court held that federal law requires that such agreements must be evaluated under a reasonableness standard. That is, if a price restriction has a reasonable business justification, perhaps guaranteeing the consumer great dealer service, then a restriction on retail price might be viewed by courts as reasonable.
In Maryland and some other states, particularly California, Illinois, Michigan, and New York, the legislature rejected the U.S. Supreme Court’s Leegin holding. In 2009, in response to the Leegin case, the Maryland General Assembly enacted Chapter 43 of the 2009 Laws of Maryland, which amended the Maryland Antitrust Act to provide that an agreement establishing a minimum retail price is an unreasonable restraint of trade and, thus, per se illegal in Maryland. Md. Code Ann., Com' Law $ 11-204(b). Such agreements, although no longer per se illegal under federal law, once again became per se illegal in Maryland. So, such a practice was much more likely to run afoul of Maryland antitrust law than it was to violate federal antitrust law. See http://www.marylandattorneygeneral.gov/News%20Documents/JJVC_COMPLAINT.pdf
Complaining Maryland car dealers believe that the use of MAP advertising restrictions provides manufacturers with a way to evade Retail Price Maintenance restrictions. While it is true that with MAP restrictions there is no agreement setting retail price, so the dealer can sell at any price, the concern is that prices actually paid by consumers will be higher where there is a restriction on how low a price the dealer can advertise. Some manufacturers encourage dealer cooperation on MAP advertising limits by offering dealers co-op advertising funds as an incentive. Some manufacturers go further, applying MAP policies to all resellers, and refusing to sell inventory to any dealer that refuses to comply.
Dealers believe that even though a MAP policy focuses on setting the price that resellers may advertise for their cars, and allows resellers to complete sales at prices determined by the resellers, MAP is a loophole for manufacturers that wish to limit retail price competition. The problem is that MAP advertising restrictions make an advertising “price war” much less likely, diminishing price competition.
The proposed legislation would plug this perceived loophole.
A question suggested by the dealer action is whether MAP policies for car dealers might be found to violate the antitrust laws, even in the absence of the proposed new Maryland State statute. Although there has not yet been a court case considering this issue, the answer appears to be “maybe,” depending on the facts of particular situations.
As a general matter, dealers can point out to a Court, persuasively, that consumers are likely to be harmed by MAP limitations, because actual retail prices paid will be higher. Also, muzzling dealers by preventing them from advertising low prices seems wrong in principle.
But these are tough times for antitrust enforcement. These days a MAP policy may be subject to the same sort of antitrust “rule of reason” that is applied by courts to RPM under federal law, perhaps applied with a bias toward the manufacturer. The conventional wisdom that may apply is that unless there is accompanying anti-competitive conduct or circumstances, the courts are likely to conclude that anti-competitive aspects of a MAP agreement won’t exceed the pro-competitive benefits, and there won’t be an antitrust problem.
But it is quite possible that if a court were to look into particular MAP arrangements, it might discover accompanying anti-competitive conduct or circumstances that could change its assessment of the legality of the practice. The agreement between manufacturer and dealer by its terms or as applied may in reality discourage a dealer from actually selling below a minimum price. Empirical investigation may reinforce the common-sense point that in the auto sales context (big ticket, relatively few brands) the limitations on ability of dealers to advertise low prices can cause prices to be higher than they would otherwise be. In reality the MAP arrangement between manufacturer and dealer may look and perform like an RPM agreement. In that case, the courts could take a closer look to see if consumers are actually being harmed. That is particular important in those state courts where resale price maintenance is per se illegal.
The FTC offers a relevant Guide at https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings-supply-chain/manufacturer-imposed
The FTC Guide offers a Q and A section, copied below. The Q and A focuses on manufacturer inducements of promotional money to encourage dealer agreement to MAP restrictions. Promotional money was important in the FTC’s cited music industry case. The unreasonable use of manufacturer inducements in the FTC’s music industry case is an instance where a MAP policy is transformed by manufacturer conduct into something more like a RPM program, causing more aggressive antitrust scrutiny. The FTC music industry case supports the thought that manufacturers should not limit dealers from advertising to consumers about discounts. But the mention at the end of the FTC Q and A of "new standards that allow more direct influence of retail prices" by manufacturers reflects the current shrinking antitrust enforcement environment.
The FTC Q and A
Q: My supplier offers a cooperative advertising program, but I can't participate if I advertise a price that is below the supplier's minimum advertised price. I think that's unfair.
A: The law allows a manufacturer considerable leeway in setting the terms for advertising that it helps to pay for. The manufacturer offers these promotional programs to better compete against the products of the other manufacturers. There are limited situations when these programs can have an unreasonable effect on price levels. For instance, the FTC challenged the Minimum Advertised Price (MAP) policies of five large distributors of pre-recorded music [Universal Music & Video Distribution Corp.and UMG Recordings, Inc. url https://www.ftc.gov/enforcement/cases-proceedings/9710070/universal-music-video-distribution-corpand-umg-recordings-inc] because the policies were unreasonable in their reach: they prohibited ads with discounted prices, even if the retailer paid for the ads with its own money; they applied to in-store advertising; and a single violation required the retailer to forfeit funds for all of its stores for up to 90 days. The FTC found that these policies, in effect for more than 85 percent of market sales, were unreasonable and prevented retailers from telling consumers about discounts on records and CDs. Issues involving advertising allowances may become of less practical concern as manufacturers adjust to new standards that allow more direct influence on retail prices.
Posting by Don Allen Resnikoff – thanks to KMJ and others for helping
NYT on The TV Station Run by China’s Communist Party
In an environment where media consumers are frequently said to be beset by biased news, it is interesting to notice the more or less open efforts of foreign governments in US media. The NYT article focuses on a Chinese government sponsored US media effort.
The NYT explains that CGTN America, which is based in Washington and available in 30 million United States households, insists it does not do Beijing’s bidding. Some people are skeptical. The article suggests that while the goal of Russian propaganda is to divide people in the US, the focus of Chinese propaganda is to paint a cheery picture of Chinese life and politics.
The article is at https://www.nytimes.com/2019/02/28/business/cctv-china-usa-propaganda.html
The USDOJ letter requesting foreign agent registration for the station is at https://int.nyt.com/data/documenthelper/638-doj-letter-cgtn/b852f4eae0647820f27e/optimized/full.pdf#page=1
Posting by Don Allen Resnikoff
Illegal message businesses as a law enforcement issue
Illicit message businesses selling sexual services have been in the news recently. Polaris one of a number of organizations focused on eradication of illicit message businesses and human trafficking networks. Polaris points out that women who are trafficked and work at the illicit businesses are robbed of their lives and their freedom. Polaris "puts victims at the center of what we do — helping survivors restore their freedom, preventing more victims, and leveraging data and technology to pursue traffickers wherever they operate."
A Report from Polaris is at https://polarisproject.org/sites/default/files/Full_Report_Human_Trafficking_in_Illicit_Massage_Businesses.pdf
A significant focus of the report is on law enforcement needed to stop illicit message businesses (IMBs) and human trafficking. Recommendations include local, regional, and national law enforcement activities. Following is a brief excerpt:
Characteristics of a strong law will vary by location. Here are a few elements that many strong laws have in common:
• Regulating hours of operation. San Francisco city has used, among other things, a provision on hours of operation to successfully close more than 100 IMBs in two years.119
• Prohibiting structures like buzzercontrolled front doors and back-door entrances that obscure buyer behavior. Santa Clara County’s law, which includes provisions around entrances, was used to close down all IMBs in its unincorporated areas within one year.120
• Regulating massage businesses with other commercial licensed businesses. Within the past 10 years, Delaware has gone from regulating massage establishments as “sexually-oriented businesses” to having a robust, statewide law categorizing massage businesses as health businesses.
• Working with local massage therapists. North Carolina passed a new statewide law on massage establishments in July 2017. This law was passed with collaboration by Polaris, North Carolina’s American Massage Therapy Association chapter, and members of the Human Trafficking Task Force to ensure strong provisions against traffickers while protecting massage therapists. This kind of collaboration, both in the original passage of the law and in the aftermath to monitor and make changes accordingly, is the baseline for ensuring laws are written to succeed and amended as necessary as traffickers adapt to changing conditions.
Posting by Don Allen Resnikoff
Illicit message businesses selling sexual services have been in the news recently. Polaris one of a number of organizations focused on eradication of illicit message businesses and human trafficking networks. Polaris points out that women who are trafficked and work at the illicit businesses are robbed of their lives and their freedom. Polaris "puts victims at the center of what we do — helping survivors restore their freedom, preventing more victims, and leveraging data and technology to pursue traffickers wherever they operate."
A Report from Polaris is at https://polarisproject.org/sites/default/files/Full_Report_Human_Trafficking_in_Illicit_Massage_Businesses.pdf
A significant focus of the report is on law enforcement needed to stop illicit message businesses (IMBs) and human trafficking. Recommendations include local, regional, and national law enforcement activities. Following is a brief excerpt:
Characteristics of a strong law will vary by location. Here are a few elements that many strong laws have in common:
• Regulating hours of operation. San Francisco city has used, among other things, a provision on hours of operation to successfully close more than 100 IMBs in two years.119
• Prohibiting structures like buzzercontrolled front doors and back-door entrances that obscure buyer behavior. Santa Clara County’s law, which includes provisions around entrances, was used to close down all IMBs in its unincorporated areas within one year.120
• Regulating massage businesses with other commercial licensed businesses. Within the past 10 years, Delaware has gone from regulating massage establishments as “sexually-oriented businesses” to having a robust, statewide law categorizing massage businesses as health businesses.
• Working with local massage therapists. North Carolina passed a new statewide law on massage establishments in July 2017. This law was passed with collaboration by Polaris, North Carolina’s American Massage Therapy Association chapter, and members of the Human Trafficking Task Force to ensure strong provisions against traffickers while protecting massage therapists. This kind of collaboration, both in the original passage of the law and in the aftermath to monitor and make changes accordingly, is the baseline for ensuring laws are written to succeed and amended as necessary as traffickers adapt to changing conditions.
Posting by Don Allen Resnikoff
The US Justice Department has called for public input about reform or termination of the long-standing consent decrees that govern performing rights organizations ASCAP and BMI, but not their competitors, SESAC and Global Music Rights.
In an open letter, ASCAP CEO Elizabeth Matthews and BMI CEO Mike O’Neill outline the two organization’s position on the DOJ’s review and make initial recommendations for how the industry might transition to a world without the decrees. “The DOJ’s attention to this matter represents a clear opportunity to do what BMI and ASCAP have been trying to do for years – modernize music licensing to better reflect the transformative changes in the industry,” they write. “It’s why when we first heard about the possibility of the DOJ sunsetting the consent decrees, it came as welcome news.”
See https://www.digitalmusicnews.com/2019/02/28/consent-decree-ascap-bmi/
Democrats have introduced a bill that would block companies from forcing workers to sign mandatory arbitration clauses that take away their right to take employers to court
The Forced Arbitration Injustice Repeal Act, sponsored in the Senate by Sen. Richard Blumenthal, D-Conn., and in the House of Representatives by Rep. Hank Johnson, D-Ga., would bar mandatory arbitration agreements not only in employment disputes, but also for consumer, antitrust and civil rights claims. Additionally, it would block agreements that stop individuals, workers and businesses from joining or filing class actions.
A copy of the bill is here:https://www.congress.gov/bill/115th-congress/senate-bill/2591/text
The Forced Arbitration Injustice Repeal Act, sponsored in the Senate by Sen. Richard Blumenthal, D-Conn., and in the House of Representatives by Rep. Hank Johnson, D-Ga., would bar mandatory arbitration agreements not only in employment disputes, but also for consumer, antitrust and civil rights claims. Additionally, it would block agreements that stop individuals, workers and businesses from joining or filing class actions.
A copy of the bill is here:https://www.congress.gov/bill/115th-congress/senate-bill/2591/text
NYT on 5G and the continuing Huawei quandary
Huawei’s fate will hang over the wireless industry’s largest annual trade conference, MWC Barcelona, previously called Mobile World Congress, which starts on Monday. Typically a celebration of new handsets from Samsung, LG, Sony and other brands, this year’s conference in Spain is being overshadowed by less glamorous policy questions about how to safeguard the behind-the-scenes infrastructure that keeps those devices connected to the internet.
“Many operators are now delaying their 5G investments because there is so much uncertainty related to whether they can work with Huawei or not,” said Mikael Rautanen, an industry analyst with Inderes Oy, a research firm. “That affects the whole telecommunications sector.”
5G networks are considered critical to the future global economy, increasing mobile phone speeds by up to 20 times from the current 4G system, while also creating new applications in medicine, augmented reality and manufacturing. Telecom companies are starting to roll out the new systems this year, with wider adoption coming in 2020.
Huawei makes the antennas, base stations, switches and other gear that make the technology work.
The debate over Huawei is particularly intense in Europe, where network operators that have long relied on the company’s equipment are facing potential new regulations. Britain, Germany, France, Poland and the Czech Republic are among those considering new restrictions against Huawei.
British and German authorities have indicated that a complete ban is unlikely, but the United States-led campaign threatens to slow down construction of the new technology in Europe that governments and businesses believe is needed to stay competitive in a digitized economy. The head of T-Mobile in Poland warned this week that new restrictions could disrupt the introduction of 5G technology.
For a year, Trump administration officials have been working on an executive order that would effectively ban Chinese telecom companies, including Huawei, from American 5G networks. The order would block American companies from purchasing equipment from China and other “adversarial powers,” but would not stop purchases of European-made equipment.
The wireless industry’s global trade group, GSM Association, said a ban of Huawei equipment in Europe would disrupt the overall market and increase costs for consumers.
“The effects would be delay the roll out, delay the technology and very probably higher pricing,” said Boris Nemsic, chairman of Delta Partners, an advisory and investment firm focused on the telecommunications market.
Huawei has become a lightning rod in the broader trade war between the United States and China. The Trump administration argues that Huawei is beholden to the Chinese government, and that allowing its equipment into 5G networks will create a grave national security risk — a charge Huawei has vehemently denied.
The increased scrutiny of Huawei would appear to present an opportunity for rivals such as Ericsson and Nokia, but executives at the companies have said it risks creating a broader slowdown.
“All our customers are trying to work out what this means, and that is causing uncertainty,” Borje Ekholm, the chief executive of Ericsson, told The Financial Times this month.
Ericsson and Nokia, which declined to comment, have fallen behind Huawei in market share over the past decade, struggling to match its rival’s lower prices and large investments in 5G and other emerging technology. Many carriers say the Chinese company’s 5G technology is more advanced than that of its Western rivals.
Despite being blocked by the United States, Huawei is the largest seller of telecommunications equipment, accounting for about 28 percent of the global market, according to the Dell’Oro Group, a market research firm. Companies such as Cisco Systems provide equipment like routers used by carriers in other parts of their networks.
The new 5G networks represent a once-in-a-decade opportunity. In Europe, mobile carriers are expected to spend at least $340 billion by 2025 constructing the networks, according to GSMA.
Ericsson and Nokia have been careful not to appear to take advantage of Huawei’s misfortune, perhaps out of concern that China would retaliate against the European companies if new bans against Huawei were introduced.
The two companies each earn around $1.5 billion in revenue each year in China, according to an estimate by Pierre Ferragu, an analyst at New Street Research in New York. By contrast, Huawei earns $3.5 billion a year in Europe, Mr. Ferragu estimates.
Any company forced to replace Huawei equipment will have to shoulder heavy costs. “It would take time for the existing vendors to scale R&D, operations, sales, services and partner agreements to fill the void,” the Dell’Oro Group said in a recent report.
It may be for that reason wireless carriers that have long depended on Huawei are coming to its defense. Mr. Read of Vodafone urged governments to act carefully before imposing new restrictions, because much of the present debate was not “fact based.”
Source: https://www.nytimes.com/2019/02/22/technology/huawei-europe-mwc.html
Huawei’s fate will hang over the wireless industry’s largest annual trade conference, MWC Barcelona, previously called Mobile World Congress, which starts on Monday. Typically a celebration of new handsets from Samsung, LG, Sony and other brands, this year’s conference in Spain is being overshadowed by less glamorous policy questions about how to safeguard the behind-the-scenes infrastructure that keeps those devices connected to the internet.
“Many operators are now delaying their 5G investments because there is so much uncertainty related to whether they can work with Huawei or not,” said Mikael Rautanen, an industry analyst with Inderes Oy, a research firm. “That affects the whole telecommunications sector.”
5G networks are considered critical to the future global economy, increasing mobile phone speeds by up to 20 times from the current 4G system, while also creating new applications in medicine, augmented reality and manufacturing. Telecom companies are starting to roll out the new systems this year, with wider adoption coming in 2020.
Huawei makes the antennas, base stations, switches and other gear that make the technology work.
The debate over Huawei is particularly intense in Europe, where network operators that have long relied on the company’s equipment are facing potential new regulations. Britain, Germany, France, Poland and the Czech Republic are among those considering new restrictions against Huawei.
British and German authorities have indicated that a complete ban is unlikely, but the United States-led campaign threatens to slow down construction of the new technology in Europe that governments and businesses believe is needed to stay competitive in a digitized economy. The head of T-Mobile in Poland warned this week that new restrictions could disrupt the introduction of 5G technology.
For a year, Trump administration officials have been working on an executive order that would effectively ban Chinese telecom companies, including Huawei, from American 5G networks. The order would block American companies from purchasing equipment from China and other “adversarial powers,” but would not stop purchases of European-made equipment.
The wireless industry’s global trade group, GSM Association, said a ban of Huawei equipment in Europe would disrupt the overall market and increase costs for consumers.
“The effects would be delay the roll out, delay the technology and very probably higher pricing,” said Boris Nemsic, chairman of Delta Partners, an advisory and investment firm focused on the telecommunications market.
Huawei has become a lightning rod in the broader trade war between the United States and China. The Trump administration argues that Huawei is beholden to the Chinese government, and that allowing its equipment into 5G networks will create a grave national security risk — a charge Huawei has vehemently denied.
The increased scrutiny of Huawei would appear to present an opportunity for rivals such as Ericsson and Nokia, but executives at the companies have said it risks creating a broader slowdown.
“All our customers are trying to work out what this means, and that is causing uncertainty,” Borje Ekholm, the chief executive of Ericsson, told The Financial Times this month.
Ericsson and Nokia, which declined to comment, have fallen behind Huawei in market share over the past decade, struggling to match its rival’s lower prices and large investments in 5G and other emerging technology. Many carriers say the Chinese company’s 5G technology is more advanced than that of its Western rivals.
Despite being blocked by the United States, Huawei is the largest seller of telecommunications equipment, accounting for about 28 percent of the global market, according to the Dell’Oro Group, a market research firm. Companies such as Cisco Systems provide equipment like routers used by carriers in other parts of their networks.
The new 5G networks represent a once-in-a-decade opportunity. In Europe, mobile carriers are expected to spend at least $340 billion by 2025 constructing the networks, according to GSMA.
Ericsson and Nokia have been careful not to appear to take advantage of Huawei’s misfortune, perhaps out of concern that China would retaliate against the European companies if new bans against Huawei were introduced.
The two companies each earn around $1.5 billion in revenue each year in China, according to an estimate by Pierre Ferragu, an analyst at New Street Research in New York. By contrast, Huawei earns $3.5 billion a year in Europe, Mr. Ferragu estimates.
Any company forced to replace Huawei equipment will have to shoulder heavy costs. “It would take time for the existing vendors to scale R&D, operations, sales, services and partner agreements to fill the void,” the Dell’Oro Group said in a recent report.
It may be for that reason wireless carriers that have long depended on Huawei are coming to its defense. Mr. Read of Vodafone urged governments to act carefully before imposing new restrictions, because much of the present debate was not “fact based.”
Source: https://www.nytimes.com/2019/02/22/technology/huawei-europe-mwc.html
From Digital Music News
The American Mechanical Licensing Collective (AMLC) Wants Competition And Isn’t Going Away — Here’s Their Full Statement to the Music Industry
Paul Resnikoff
February 21, 2019
2https://www.digitalmusicnews.com/2019/02/21/amlc-american-mechanical-licensing-collective/#comments
The American Mechanical Licensing Collective (AMLC) says they represent the interests of independent songwriters and rights owners. In fact, they feel they’re addressing a bigger group than the major publisher-backed ‘MLC’.
Back in November, we first reported on a new mechanical licensing agency: the American Mechanical Licensing Collective, or AMLC. The group tossed their hat in the ring to administer mechanical licenses for the government-created Mechanical Licensing Collective, or MLC, as outlined by the now-passed Music Modernization Act.
In response, major publishers and other industry heavyweights assembled a broad consortium of industry players to back its own mechanical licensing contender. David Israelite, head of the National Music Publishers’ Association (NMPA), argued that the role of the MLC should not be filled by a competitive process, especially since his group already enjoyed an overwhelming consensus among industry players.
In fact, the NMPA-backed group has already called themselves the ‘MLC’, while also naming themselves the ‘consensus’ mechanical licensing organization. Additionally, Israelite has argued that his group was most responsible for passing the MMA, therefore, they should be the ones implementing its core function.
The AMLC, along with a long list of independent songwriters and producers, have sharply questioned that approach. They say this shouldn’t be a no-bid contract. And more importantly, they feel that they represent the real majority of rights owners, most of whom would be marginalized by the mainline MLC group.
Here’s the AMLC’s official statement on their position.
The Mechanical Licensing Collective will be a non-profit organization charged with the payment of songwriter and music publisher “mechanical” royalties to the rightful songwriter and music publishers. In addition, it must maintain a musical works database, providing blanket licenses to U.S. digital streaming services; hold onto earned but unpaid money; resolve conflicts; and more.
The Register of Copyrights will designate the MLC from submitted applications based on an entity proving itself able to achieve the goals of the MLC, as well as meeting all the legal requirements as stipulated in the MMA.
Last week it was reported in the press that an organization planning to apply to be designated as the MLC prematurely suggested that the competition among entities to become the MLC is all but over.
This suggestion was made despite the Register of Copyright making no such statement and still awaiting receipt of complete applications, which are not due until mid-March. If the suggestion is true, the selection process would at best not have been made — and, at worst, been compromised.
It is possible that the reported public press statement indicating their application is “the only one that meets the statutory definition” is inaccurate or perhaps rests on the role the traditional industry played in the passage of the Music Modernization Act. Although we recognize the role and importance those organizations played in getting the bill drafted and passed, we agree with the Copyright Office’s statement that “[s]ervice on the Board or its committees is not a reward for past actions, but is instead a serious responsibility that must not be underestimated.”
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements.
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements. In fact, to help encourage the needed competition, the Copyright Office publicly stated that “the Office does not read this clause as prohibiting a musical work copyright owner from endorsing multiple prospective MLCs.” The intent of the law is to clearly allow copyright owners to recognize and endorse multiple groups.
As the MLC will work for independent and major music publishers as well as all global music copyright owners, this ties into the MMA provision that clearly states, and logically requires, that the MLC have “substantial support” from “musical copyright owners” who together represent “the greatest percentage of the Licensor Market for uses.”
About 90 percent of the millions of global music copyright creators own and control their own copyrights. Each month alone in the U.S. there are over 500,000 new recordings of new songs from tens of thousands of DIY, self-owning copyright owners being delivered to U.S. music services and made available to stream. In just the last year, hundreds of thousands of DIY copyright owners have created and distributed at least 6 million works. In the past 10 years, estimates place that number closer to millions of copyright owners distributing over 20 million songs to streaming services. The majority of works being written, recorded, distributed and made available to stream overwhelmingly come from this constituency.
It is this constituency of millions of hard-working individuals, with a rising market share, that represents the majority of musical works copyright owners. These global copyright owners, combined with the legacy industry, make up the entire Licensor Market eligible to be streamed in the U.S. Surely the intent of the law is not to make them irrelevant in the process of establishing the MLC, particularly when there is a further important distinction between the two market segments: some of the biggest publishers in the traditional music industry are expected to bypass and not use the MLC due to their direct licensing deals with the digital streaming services, as compared to the millions of global copyright owners whom will rely on the MLC for licensing and payments.
This point further exacerbates the yet-to-be-resolved conflict of interest; that is, board members of the MLC can recommend other copyright owners’ money be liquidated and given to themselves through market share disbursements, all without actually having to use the MLC for their own copyrights. This outcome is most certainly not the intended application of the law.
This speaks as to why competition is needed.
The AMLC (American Mechanical License Collective) is competing to become the MLC. The AMLC’s board members are independent songwriters, technologists, entrepreneurs, music publishers and administrators, legal scholars, and business people who have profound and extensive knowledge in the areas of administration, technology, and identification of royalties without the same conflict of interest as the other.
The AMLC believes it serves all copyright owners including the independent writers and publishers as well as the major music publishers. It believes the companies and individuals of the board members of the MLC should use the MLC whenever possible. In addition, the AMLC directly addresses the importance of serving both the traditional industry as well as the independent writers and publisher, as it is their songs which will generate the vast majority of licenses and royalties flowing through the MLC.
In further contrast, the experience and credentials of the AMLC in the relatively new world of digital streaming are impressive and profound. This can be seen not just by examining the creation of the technology, innovation and success of its board members but also by the fact that many of the AMLC board members were hired by the traditional industry to build the systems
they needed to fix their data, resolve conflicts, audit statements, confirm splits, locate recordings and more (the very same needs of the MLC).
The AMLC has been forthright and has highlighted that its primary goals are to get all copyright owners and songwriters paid what they earned and reducing black box money by ensuring those funds go to its rightful owners and are not liquidated without intense due diligence. Finally, the AMLC is focused on keeping any perceived or actual conflict of interest to the lowest possible minimum and avoiding any activities that might give one group of copyright owners advantages over other groups of owners.
To that end, as we further expand our board, round out our committees and put forth an efficient one of a kind cutting edge technology solution we encourage the spirit and goal of the MMA to create competition, allowing the best entity possible to emerge and serve the world’s songwriters, publishers, and copyright owners under the requirements of the law.
The AMLC
The American Mechanical Licensing Collective (AMLC) Wants Competition And Isn’t Going Away — Here’s Their Full Statement to the Music Industry
Paul Resnikoff
February 21, 2019
2https://www.digitalmusicnews.com/2019/02/21/amlc-american-mechanical-licensing-collective/#comments
The American Mechanical Licensing Collective (AMLC) says they represent the interests of independent songwriters and rights owners. In fact, they feel they’re addressing a bigger group than the major publisher-backed ‘MLC’.
Back in November, we first reported on a new mechanical licensing agency: the American Mechanical Licensing Collective, or AMLC. The group tossed their hat in the ring to administer mechanical licenses for the government-created Mechanical Licensing Collective, or MLC, as outlined by the now-passed Music Modernization Act.
In response, major publishers and other industry heavyweights assembled a broad consortium of industry players to back its own mechanical licensing contender. David Israelite, head of the National Music Publishers’ Association (NMPA), argued that the role of the MLC should not be filled by a competitive process, especially since his group already enjoyed an overwhelming consensus among industry players.
In fact, the NMPA-backed group has already called themselves the ‘MLC’, while also naming themselves the ‘consensus’ mechanical licensing organization. Additionally, Israelite has argued that his group was most responsible for passing the MMA, therefore, they should be the ones implementing its core function.
The AMLC, along with a long list of independent songwriters and producers, have sharply questioned that approach. They say this shouldn’t be a no-bid contract. And more importantly, they feel that they represent the real majority of rights owners, most of whom would be marginalized by the mainline MLC group.
Here’s the AMLC’s official statement on their position.
The Mechanical Licensing Collective will be a non-profit organization charged with the payment of songwriter and music publisher “mechanical” royalties to the rightful songwriter and music publishers. In addition, it must maintain a musical works database, providing blanket licenses to U.S. digital streaming services; hold onto earned but unpaid money; resolve conflicts; and more.
The Register of Copyrights will designate the MLC from submitted applications based on an entity proving itself able to achieve the goals of the MLC, as well as meeting all the legal requirements as stipulated in the MMA.
Last week it was reported in the press that an organization planning to apply to be designated as the MLC prematurely suggested that the competition among entities to become the MLC is all but over.
This suggestion was made despite the Register of Copyright making no such statement and still awaiting receipt of complete applications, which are not due until mid-March. If the suggestion is true, the selection process would at best not have been made — and, at worst, been compromised.
It is possible that the reported public press statement indicating their application is “the only one that meets the statutory definition” is inaccurate or perhaps rests on the role the traditional industry played in the passage of the Music Modernization Act. Although we recognize the role and importance those organizations played in getting the bill drafted and passed, we agree with the Copyright Office’s statement that “[s]ervice on the Board or its committees is not a reward for past actions, but is instead a serious responsibility that must not be underestimated.”
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements.
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements. In fact, to help encourage the needed competition, the Copyright Office publicly stated that “the Office does not read this clause as prohibiting a musical work copyright owner from endorsing multiple prospective MLCs.” The intent of the law is to clearly allow copyright owners to recognize and endorse multiple groups.
As the MLC will work for independent and major music publishers as well as all global music copyright owners, this ties into the MMA provision that clearly states, and logically requires, that the MLC have “substantial support” from “musical copyright owners” who together represent “the greatest percentage of the Licensor Market for uses.”
About 90 percent of the millions of global music copyright creators own and control their own copyrights. Each month alone in the U.S. there are over 500,000 new recordings of new songs from tens of thousands of DIY, self-owning copyright owners being delivered to U.S. music services and made available to stream. In just the last year, hundreds of thousands of DIY copyright owners have created and distributed at least 6 million works. In the past 10 years, estimates place that number closer to millions of copyright owners distributing over 20 million songs to streaming services. The majority of works being written, recorded, distributed and made available to stream overwhelmingly come from this constituency.
It is this constituency of millions of hard-working individuals, with a rising market share, that represents the majority of musical works copyright owners. These global copyright owners, combined with the legacy industry, make up the entire Licensor Market eligible to be streamed in the U.S. Surely the intent of the law is not to make them irrelevant in the process of establishing the MLC, particularly when there is a further important distinction between the two market segments: some of the biggest publishers in the traditional music industry are expected to bypass and not use the MLC due to their direct licensing deals with the digital streaming services, as compared to the millions of global copyright owners whom will rely on the MLC for licensing and payments.
This point further exacerbates the yet-to-be-resolved conflict of interest; that is, board members of the MLC can recommend other copyright owners’ money be liquidated and given to themselves through market share disbursements, all without actually having to use the MLC for their own copyrights. This outcome is most certainly not the intended application of the law.
This speaks as to why competition is needed.
The AMLC (American Mechanical License Collective) is competing to become the MLC. The AMLC’s board members are independent songwriters, technologists, entrepreneurs, music publishers and administrators, legal scholars, and business people who have profound and extensive knowledge in the areas of administration, technology, and identification of royalties without the same conflict of interest as the other.
The AMLC believes it serves all copyright owners including the independent writers and publishers as well as the major music publishers. It believes the companies and individuals of the board members of the MLC should use the MLC whenever possible. In addition, the AMLC directly addresses the importance of serving both the traditional industry as well as the independent writers and publisher, as it is their songs which will generate the vast majority of licenses and royalties flowing through the MLC.
In further contrast, the experience and credentials of the AMLC in the relatively new world of digital streaming are impressive and profound. This can be seen not just by examining the creation of the technology, innovation and success of its board members but also by the fact that many of the AMLC board members were hired by the traditional industry to build the systems
they needed to fix their data, resolve conflicts, audit statements, confirm splits, locate recordings and more (the very same needs of the MLC).
The AMLC has been forthright and has highlighted that its primary goals are to get all copyright owners and songwriters paid what they earned and reducing black box money by ensuring those funds go to its rightful owners and are not liquidated without intense due diligence. Finally, the AMLC is focused on keeping any perceived or actual conflict of interest to the lowest possible minimum and avoiding any activities that might give one group of copyright owners advantages over other groups of owners.
To that end, as we further expand our board, round out our committees and put forth an efficient one of a kind cutting edge technology solution we encourage the spirit and goal of the MMA to create competition, allowing the best entity possible to emerge and serve the world’s songwriters, publishers, and copyright owners under the requirements of the law.
The AMLC
From the Complaint in
THE CITY OF PHILADELPHIA, Plaintiff,
vs.
BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANC OF AMERICA SECURITIES LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., CITIGROUP, INC., CITIBANK N.A., CITIGROUP GLOBAL MARKETS INC., CITIGROUP GLOBAL MARKETS LIMITED, THE GOLDMAN SACHS GROUP, INC., GOLDMAN SACHS & CO. LLC, JPMORGAN CHASE & CO., JPMORGAN CHASE BANK, N.A., J.P. MORGAN SECURITIES LLC, THE ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, WELLS FARGO & CO., WELLS FARGO BANK, N.A., WACHOVIA BANK, N.A., WELLS FARGO FUNDS MANAGEMENT, LLC, WELLS FARGO SECURITIES LLC, Defendants.
Case No.: 1:19-cv-01608, Southern District of New York
Plaintiff The City of Philadelphia, individually and on behalf of all persons and entities similarly situated, brings this class action under Section 1 of the Sherman Antitrust Act, Sections 4 and 16 of the Clayton Antitrust Act, and certain state laws, for actual damages, treble damages, punitive damages, declaratory and injunctive relief, costs of suit, pre- and post-judgment interest, and other relief, and alleges as follows:
NATURE OF THE ACTION
1. This is an antitrust class action charging the Defendant banks with conspiring to inflate the interest rates for a type of bonds often called “Variable Rate Demand Obligations” or “VRDOs.” 1 The City of Philadelphia (“Philadelphia” or “Plaintiff”) brings this action on behalf of itself and a proposed Class of VRDO issuers—mainly state and local public entities such as municipalities, agencies, public universities, and hospitals—to redress the harm inflicted by Defendants, which likely amounts to billions of dollars class-wide.
2. VRDOs are tax-exempt bonds with interest rates that are reset on a periodic basis, typically weekly. VDROs are issued by public entities to raise money to fund their operations, as well as critically important infrastructure and public services, such as neighborhood schools, water and wastewater systems, public power utilities, and transportation services. VRDOs are also issued by public entities on behalf of tax-exempt 501(c)(3) organizations—including schools, community organizations, and charities—which use the VRDOs to fund their operations and projects.
3. VRDOs allow issuers to borrow money for long periods of time while paying short-term interest rates. Investors find VRDOs attractive because the bonds include a built-in “put” feature that allows investors to redeem the bond at any periodic reset date, thus making VRDOs a low-risk and high-liquidity investment.
4. To manage the bond, VRDO issuers contract with banks—like Defendants here— to act as re-marketing agents (“RMAs”). RMAs have two primary jobs under the remarketing agreements. First, on each reset date, RMAs are required to reset the interest rate of the VRDO at the lowest possible rate that would permit the bonds to trade at par. For the vast majority of VRDOs, the reset date occurs on a weekly basis, typically every Tuesday or Wednesday. Second, when an existing investor exercises the “put” on the bonds and tenders the bond to RMAs, RMAs are required to “remarket” the VRDO to other investors at the lowest possible rate. For these ongoing services, issuers pay RMAs remarketing fees.
5. VRDO issuers are motivated to obtain the lowest interest rates for their debt. The higher the rates that VRDO issuers pay, the more costly it is for them to finance their operations and fund infrastructure projects. If an RMA cannot deliver low rates, issuers have the right to replace that RMA with another one who can. Thus, in a properly functioning market, RMAs would compete against each other for issuers’ business by actively working to set the best (i.e., the lowest) possible rate for their customers.
6. Defendants—which, collectively, served as RMAs for approximately 70% of all VRDOs in the United States from 2008 through 2016—did not work to set the lowest possible VRDO rates for Plaintiff and the Class, however.
7. Since about late 2015, various government authorities have been investigating Defendants’ practices in the market for VRDO remarketing services, based on facts that were first brought to their attention by a whistleblower. Among other things, the whistleblower alleges that RMAs (including Defendants here) were not actively and individually marketing and pricing VRDOs at the lowest possible interest rates, but instead were setting artificially high rates without regard to the individual characteristics of VRDOs, market conditions, or investor demand. The whistleblower also alleges that RMAs (including Defendants here) were improperly coordinating the rates they set for VRDOs. These allegations were based on the whistleblower’s extensive analysis of data available to the whistleblower due to that person’s role in the marketplace.
8. Starting in or about late 2015 and 2016, the whistleblower began to meet and share data and the whistleblower’s analysis of data with federal authorities, including the Antitrust Division of the U.S. Department of Justice (the “DOJ”). The DOJ subsequently opened a preliminary criminal investigation into Defendants’ remarketing practices in connection with VRDOs. That preliminary criminal investigation is ongoing.
9. Plaintiff counsel’s investigation of this matter has confirmed that there exists evidence of direct communications between competing banks concerning VRDO rate-setting. In these communications, senior personnel sitting within Defendants’ Municipal Securities Groups, which housed the Short-Term Products desks on which Defendants ran their VRDO operations, shared competitively sensitive information that was material to the setting and resetting of VRDO rates.
10. As a result of Plaintiff counsel’s investigation, Plaintiff has further learned that, as early as February 2008, Defendants were agreeing among themselves not to compete against each other in the market for remarketing services, and instead to keep VRDO rates artificially high, to the detriment of their customers, including Plaintiff here. Defendants conspired by communicating with each other in person, via telephone, and through electronic communications. In these inter-Defendant communications, they repeatedly shared highly sensitive information about the “base rates” that Defendants used to make initial determinations of the interest rates they set for VRDOs as well as the levels of VRDO inventory Defendants held on their books.
11. Defendants’ overarching objective was to ensure that the cartel members would keep VRDO rates artificially high in order to prevent investors from “putting” the bonds back to Defendants. When investors tender VRDOs back to RMAs, it triggers the RMAs’ obligation to remarket the VRDOs while also forcing the RMAs to carry the bonds in their inventory. By keeping rates high, Defendants ensured that investors would not exercise their put options on the bonds on a widespread basis. This allowed Defendants to continue to collect remarketing fees for doing, essentially, nothing.
12. Economic analysis provides strong support for the existence of this conspiracy. As detailed below, Plaintiff’s preliminary economic analysis demonstrates that VRDO interest rates were artificially inflated for several years starting as early as 2008 and continuing until late 2015 to early 2016. This economic analysis also demonstrates the existence of several historical patterns in VRDO rates that are each indicative of an agreement among Defendants not to compete in the market for VRDO remarketing services that began to break up in late 2015 to early 2016, around the same time that government authorities began investigating Defendants’ practices in the market for VRDO remarketing services.
13. Defendants’ conspiracy restrained competition in the market for VRDO remarketing services and inflicted significant financial harm on Plaintiff and the Class. Plaintiff and the Class paid billions of dollars in inflated interest rates during the Class Period due to Defendants’ conspiracy. By artificially increasing the rates paid by Plaintiff and the Class, Defendants’ conduct necessarily decreased the amount of funding available for critical public projects and services, as well as the operations of 501(c)(3) organizations. At the same time, Defendants banked hundreds of millions of dollars in the form of remarketing fees charged for services that Defendants never provided.
14. Free-market competition is, and has long been, the fundamental economic policy of the United States. As the Supreme Court has explained, this policy is enshrined in the Sherman Act,2 which makes it per se illegal for competitors (like Defendants here) to conspire and coordinate with each other to limit competition. Defendants’ conspiracy offends the very core of the antitrust laws. Defendants were supposed to be aggressively competing with each other for the business of their customers, but they secretly conspired not to compete against each other and instead to work together to keep rates high. Accordingly, Plaintiff brings this class action to hold Defendants accountable for the injuries they have caused.
Full Complaint at https://images.law.com/contrib/content/uploads/documents/402/36507/2019.02.20-Philly-VRDO-complaint.pdf
THE CITY OF PHILADELPHIA, Plaintiff,
vs.
BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANC OF AMERICA SECURITIES LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., CITIGROUP, INC., CITIBANK N.A., CITIGROUP GLOBAL MARKETS INC., CITIGROUP GLOBAL MARKETS LIMITED, THE GOLDMAN SACHS GROUP, INC., GOLDMAN SACHS & CO. LLC, JPMORGAN CHASE & CO., JPMORGAN CHASE BANK, N.A., J.P. MORGAN SECURITIES LLC, THE ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, WELLS FARGO & CO., WELLS FARGO BANK, N.A., WACHOVIA BANK, N.A., WELLS FARGO FUNDS MANAGEMENT, LLC, WELLS FARGO SECURITIES LLC, Defendants.
Case No.: 1:19-cv-01608, Southern District of New York
Plaintiff The City of Philadelphia, individually and on behalf of all persons and entities similarly situated, brings this class action under Section 1 of the Sherman Antitrust Act, Sections 4 and 16 of the Clayton Antitrust Act, and certain state laws, for actual damages, treble damages, punitive damages, declaratory and injunctive relief, costs of suit, pre- and post-judgment interest, and other relief, and alleges as follows:
NATURE OF THE ACTION
1. This is an antitrust class action charging the Defendant banks with conspiring to inflate the interest rates for a type of bonds often called “Variable Rate Demand Obligations” or “VRDOs.” 1 The City of Philadelphia (“Philadelphia” or “Plaintiff”) brings this action on behalf of itself and a proposed Class of VRDO issuers—mainly state and local public entities such as municipalities, agencies, public universities, and hospitals—to redress the harm inflicted by Defendants, which likely amounts to billions of dollars class-wide.
2. VRDOs are tax-exempt bonds with interest rates that are reset on a periodic basis, typically weekly. VDROs are issued by public entities to raise money to fund their operations, as well as critically important infrastructure and public services, such as neighborhood schools, water and wastewater systems, public power utilities, and transportation services. VRDOs are also issued by public entities on behalf of tax-exempt 501(c)(3) organizations—including schools, community organizations, and charities—which use the VRDOs to fund their operations and projects.
3. VRDOs allow issuers to borrow money for long periods of time while paying short-term interest rates. Investors find VRDOs attractive because the bonds include a built-in “put” feature that allows investors to redeem the bond at any periodic reset date, thus making VRDOs a low-risk and high-liquidity investment.
4. To manage the bond, VRDO issuers contract with banks—like Defendants here— to act as re-marketing agents (“RMAs”). RMAs have two primary jobs under the remarketing agreements. First, on each reset date, RMAs are required to reset the interest rate of the VRDO at the lowest possible rate that would permit the bonds to trade at par. For the vast majority of VRDOs, the reset date occurs on a weekly basis, typically every Tuesday or Wednesday. Second, when an existing investor exercises the “put” on the bonds and tenders the bond to RMAs, RMAs are required to “remarket” the VRDO to other investors at the lowest possible rate. For these ongoing services, issuers pay RMAs remarketing fees.
5. VRDO issuers are motivated to obtain the lowest interest rates for their debt. The higher the rates that VRDO issuers pay, the more costly it is for them to finance their operations and fund infrastructure projects. If an RMA cannot deliver low rates, issuers have the right to replace that RMA with another one who can. Thus, in a properly functioning market, RMAs would compete against each other for issuers’ business by actively working to set the best (i.e., the lowest) possible rate for their customers.
6. Defendants—which, collectively, served as RMAs for approximately 70% of all VRDOs in the United States from 2008 through 2016—did not work to set the lowest possible VRDO rates for Plaintiff and the Class, however.
7. Since about late 2015, various government authorities have been investigating Defendants’ practices in the market for VRDO remarketing services, based on facts that were first brought to their attention by a whistleblower. Among other things, the whistleblower alleges that RMAs (including Defendants here) were not actively and individually marketing and pricing VRDOs at the lowest possible interest rates, but instead were setting artificially high rates without regard to the individual characteristics of VRDOs, market conditions, or investor demand. The whistleblower also alleges that RMAs (including Defendants here) were improperly coordinating the rates they set for VRDOs. These allegations were based on the whistleblower’s extensive analysis of data available to the whistleblower due to that person’s role in the marketplace.
8. Starting in or about late 2015 and 2016, the whistleblower began to meet and share data and the whistleblower’s analysis of data with federal authorities, including the Antitrust Division of the U.S. Department of Justice (the “DOJ”). The DOJ subsequently opened a preliminary criminal investigation into Defendants’ remarketing practices in connection with VRDOs. That preliminary criminal investigation is ongoing.
9. Plaintiff counsel’s investigation of this matter has confirmed that there exists evidence of direct communications between competing banks concerning VRDO rate-setting. In these communications, senior personnel sitting within Defendants’ Municipal Securities Groups, which housed the Short-Term Products desks on which Defendants ran their VRDO operations, shared competitively sensitive information that was material to the setting and resetting of VRDO rates.
10. As a result of Plaintiff counsel’s investigation, Plaintiff has further learned that, as early as February 2008, Defendants were agreeing among themselves not to compete against each other in the market for remarketing services, and instead to keep VRDO rates artificially high, to the detriment of their customers, including Plaintiff here. Defendants conspired by communicating with each other in person, via telephone, and through electronic communications. In these inter-Defendant communications, they repeatedly shared highly sensitive information about the “base rates” that Defendants used to make initial determinations of the interest rates they set for VRDOs as well as the levels of VRDO inventory Defendants held on their books.
11. Defendants’ overarching objective was to ensure that the cartel members would keep VRDO rates artificially high in order to prevent investors from “putting” the bonds back to Defendants. When investors tender VRDOs back to RMAs, it triggers the RMAs’ obligation to remarket the VRDOs while also forcing the RMAs to carry the bonds in their inventory. By keeping rates high, Defendants ensured that investors would not exercise their put options on the bonds on a widespread basis. This allowed Defendants to continue to collect remarketing fees for doing, essentially, nothing.
12. Economic analysis provides strong support for the existence of this conspiracy. As detailed below, Plaintiff’s preliminary economic analysis demonstrates that VRDO interest rates were artificially inflated for several years starting as early as 2008 and continuing until late 2015 to early 2016. This economic analysis also demonstrates the existence of several historical patterns in VRDO rates that are each indicative of an agreement among Defendants not to compete in the market for VRDO remarketing services that began to break up in late 2015 to early 2016, around the same time that government authorities began investigating Defendants’ practices in the market for VRDO remarketing services.
13. Defendants’ conspiracy restrained competition in the market for VRDO remarketing services and inflicted significant financial harm on Plaintiff and the Class. Plaintiff and the Class paid billions of dollars in inflated interest rates during the Class Period due to Defendants’ conspiracy. By artificially increasing the rates paid by Plaintiff and the Class, Defendants’ conduct necessarily decreased the amount of funding available for critical public projects and services, as well as the operations of 501(c)(3) organizations. At the same time, Defendants banked hundreds of millions of dollars in the form of remarketing fees charged for services that Defendants never provided.
14. Free-market competition is, and has long been, the fundamental economic policy of the United States. As the Supreme Court has explained, this policy is enshrined in the Sherman Act,2 which makes it per se illegal for competitors (like Defendants here) to conspire and coordinate with each other to limit competition. Defendants’ conspiracy offends the very core of the antitrust laws. Defendants were supposed to be aggressively competing with each other for the business of their customers, but they secretly conspired not to compete against each other and instead to work together to keep rates high. Accordingly, Plaintiff brings this class action to hold Defendants accountable for the injuries they have caused.
Full Complaint at https://images.law.com/contrib/content/uploads/documents/402/36507/2019.02.20-Philly-VRDO-complaint.pdf
Editorial from the CPPC: State AGs Must Protect Consumers and Fill The Void to Challenge PBM Misconduct
February 21, 2019
Last fall’s meeting between the Department of Justice and several State Attorneys General reminds us that sound antitrust enforcement is not just a federal affair. While the Department of Justice called the meeting to discuss the antitrust concerns regarding the consolidation of information and data on technology platforms, the State Attorneys Generals turned the focus of the meeting to consumer protection and data privacy issues. Although they did not see eye to eye on all the issues, the states were clear that they will not stand on the sidelines. Indeed, the states appear to be taking the lead and will coordinate a multi-state antitrust and consumer protection inquiry into the practices of the tech platforms.
Many of the seminal antitrust cases including cases creating key principles of monopolization and merger law were brought by state attorneys generals. State Attorneys Generals have used the power under federal and their own state statutes to protect consumers against anticompetitive and fraudulent conduct in credit card, pharmaceutical, computer and many other markets crucial to consumers.
Much of the recent attention to escalating drug prices has focused on Pharmacy Benefit Managers (“PBMs”), the drug middlemen, who are driving up drug prices and reducing consumer choice. Appropriately the President’s May 2018 Blueprint to Reduce Drug Prices is focusing attention on how the lack of PBM competition and transparency permits PBMs to use their market power to drive up drug prices. In many cases, PBM customers such as states, health plans and employers do not receive the full benefit of these rebates because PBMs do not always classify certain fees as rebates.
Unfortunately, federal antitrust enforcement has simply dropped the ball on PBM competition. The recent approval of the CVS/Aetna deal makes that crystal clear. Over the past decade, the PBM industry has gotten stronger as it has undergone significant horizontal and vertical consolidation, leaving the market with just three large participants – Express Scripts, CVS Health, and OptumRx – that cover more than 85 percent of the PBM market. And the FTC has opposed efforts by states to adopt sensible regulations.
PBM rebate schemes also interfere in the relationship between doctors and their patients. PBMs often prevent consumers from getting the drugs they need or force consumers to switch drugs so they can secure higher rebates. Consumers lose through higher prices, less choice and threatened health care.
In short, the current system is broken, federal enforcers are passive and we need strong enforcement by state attorneys generals to protect competition and consumers.
States have significant advantages over federal enforcers. They are closer to the market and recognize the direct harm to consumers. They have the ability to secure monetary damages. States are often customers and victims of anticompetitive schemes. State enforcers can bring combined antitrust and consumer protection cases. And although each state has limited antitrust and consumer protection resources, states increasingly are using multistate task forces to investigate and prosecute unlawful conduct.
The strategic advantages of State Attorneys General are substantial. They have the authority to investigate and challenge mergers as well as the practices of PBMs under various federal and state laws including the False Claims Act (most states have enacted analogous false claims acts), state law deceptive trade practices acts, and the antitrust laws.
The states have begun to take matters into their own hands. In 2018, over 80 bills related to PBM regulation were introduced in state legislatures across the country and dozens of them were signed into law. Some of this legislation relates to requiring PBMs to have a fiduciary duty to its health plans, prohibiting gag clauses or PBM contract provisions that limit a pharmacist’s ability to inform customers about the least expensive way for customers to purchase prescription drugs; prohibiting a PBM from setting patient copays at a higher level than the health plan’s cost of the drug; requiring rebate transparency; and limiting PBM requirements on independent pharmacies.
There are clear precedents for state action. In the past decade a coalition of over 20 State Attorneys General brought a series of cases against the three major PBMs for manipulating the rebate process – switching patients to less safe, more expensive drugs in order to secure greater rebates. Thousands of consumers were prevented from using the drugs they needed and that worked. Ultimately the state cases were settled with penalties and damages of over $370 million.
The orders in these cases have expired and it seems that the PBMs have returned to their playbooks of misleading consumers and preventing them from getting the drugs they need. State AGs can obtain huge healthcare fraud settlements and judgments, which can provide an additional source of revenue for the states. As PBMs are increasingly scrutinized by the federal and state authorities, State AG investigations and complaints are likely to increase.
While historically State AGs typically coordinate with the federal government, they can certainly act alone or along with other states. Some State AGs with active enforcement agendas have sought to elevate their enforcement levels during periods when they have anticipated or perceived a reduction in federal enforcement. The DOJ and FTC have had a light hand in terms of scrutinizing PBM conduct so State AGs seem to be filling the void. Such an uptick in state level PBM enforcement is now in play and PBMs should take note of the resulting enhanced risk.
Indeed, Ohio and other states are increasing their enforcement activities due to the slow progress by the federal government. In July, then Ohio Attorney General and current Ohio Governor Mike DeWine put “PBMs on notice that their conduct is being heavily scrutinized, and any action that can be taken and proven in court will be filed to protect Ohio taxpayers and the millions of Ohioans who rely on the pharmacy benefits provided.” Ohio’s investigation began at the end of 2017.
And just this week, the new Ohio Attorney General Dave Yost announced he is seeking repayment of nearly $16 million paid to the OptumRx by the Bureau of Workers’ Compensation. A report found that the PBM overcharged the state and violated its contract by failing to adhere to agreed discounts on generic drugs. Yost will take OptumRx to nonbinding mediation, and that fails, the dispute will be taken to court. He has also promised further action against PBMs, saying “they took our money.”
In February 2018, Arkansas Attorney General Leslie Rutledge opened an investigation into CVS Caremark’s reimbursement practices after reviewing complaints of plummeting prescription medication reimbursement rates paid to local pharmacies. She is concerned that the PBM’s “reimbursements do not cover the actual cost of the medications.” If the local pharmacies’ prescription reimbursement rates are lower than their costs to purchase the drugs, they may eventually have to close their doors, which in turn, harms patients.
Fortunately, state AGs are there to protect consumers and competition and they have tremendous interest in controlling drug spending. States are clearly victims of these PBM schemes as significant drug price increases take a substantial amount out of state budgets. State AGs have the tools and need to use their enforcement powers to stop the egregious practices that are currently harming consumers. They are essential to protecting consumers and making the market work. Other State AGs should follow the examples of Arkansas and Ohio, and launch investigations and enforcement actions to stop abuses and ensure that PBMs are actually lowering drug costs.
From:https://www.thecppc.com/single-post/2019/02/21/State-AGs-Must-Protect-Consumers-and-Fill-The-Void-to-Challenge-PBM-Misconduct?utm_campaign=4f29d95c-84d4-42a2-9746-c5c44d551d91&utm_source=so
February 21, 2019
Last fall’s meeting between the Department of Justice and several State Attorneys General reminds us that sound antitrust enforcement is not just a federal affair. While the Department of Justice called the meeting to discuss the antitrust concerns regarding the consolidation of information and data on technology platforms, the State Attorneys Generals turned the focus of the meeting to consumer protection and data privacy issues. Although they did not see eye to eye on all the issues, the states were clear that they will not stand on the sidelines. Indeed, the states appear to be taking the lead and will coordinate a multi-state antitrust and consumer protection inquiry into the practices of the tech platforms.
Many of the seminal antitrust cases including cases creating key principles of monopolization and merger law were brought by state attorneys generals. State Attorneys Generals have used the power under federal and their own state statutes to protect consumers against anticompetitive and fraudulent conduct in credit card, pharmaceutical, computer and many other markets crucial to consumers.
Much of the recent attention to escalating drug prices has focused on Pharmacy Benefit Managers (“PBMs”), the drug middlemen, who are driving up drug prices and reducing consumer choice. Appropriately the President’s May 2018 Blueprint to Reduce Drug Prices is focusing attention on how the lack of PBM competition and transparency permits PBMs to use their market power to drive up drug prices. In many cases, PBM customers such as states, health plans and employers do not receive the full benefit of these rebates because PBMs do not always classify certain fees as rebates.
Unfortunately, federal antitrust enforcement has simply dropped the ball on PBM competition. The recent approval of the CVS/Aetna deal makes that crystal clear. Over the past decade, the PBM industry has gotten stronger as it has undergone significant horizontal and vertical consolidation, leaving the market with just three large participants – Express Scripts, CVS Health, and OptumRx – that cover more than 85 percent of the PBM market. And the FTC has opposed efforts by states to adopt sensible regulations.
PBM rebate schemes also interfere in the relationship between doctors and their patients. PBMs often prevent consumers from getting the drugs they need or force consumers to switch drugs so they can secure higher rebates. Consumers lose through higher prices, less choice and threatened health care.
In short, the current system is broken, federal enforcers are passive and we need strong enforcement by state attorneys generals to protect competition and consumers.
States have significant advantages over federal enforcers. They are closer to the market and recognize the direct harm to consumers. They have the ability to secure monetary damages. States are often customers and victims of anticompetitive schemes. State enforcers can bring combined antitrust and consumer protection cases. And although each state has limited antitrust and consumer protection resources, states increasingly are using multistate task forces to investigate and prosecute unlawful conduct.
The strategic advantages of State Attorneys General are substantial. They have the authority to investigate and challenge mergers as well as the practices of PBMs under various federal and state laws including the False Claims Act (most states have enacted analogous false claims acts), state law deceptive trade practices acts, and the antitrust laws.
The states have begun to take matters into their own hands. In 2018, over 80 bills related to PBM regulation were introduced in state legislatures across the country and dozens of them were signed into law. Some of this legislation relates to requiring PBMs to have a fiduciary duty to its health plans, prohibiting gag clauses or PBM contract provisions that limit a pharmacist’s ability to inform customers about the least expensive way for customers to purchase prescription drugs; prohibiting a PBM from setting patient copays at a higher level than the health plan’s cost of the drug; requiring rebate transparency; and limiting PBM requirements on independent pharmacies.
There are clear precedents for state action. In the past decade a coalition of over 20 State Attorneys General brought a series of cases against the three major PBMs for manipulating the rebate process – switching patients to less safe, more expensive drugs in order to secure greater rebates. Thousands of consumers were prevented from using the drugs they needed and that worked. Ultimately the state cases were settled with penalties and damages of over $370 million.
The orders in these cases have expired and it seems that the PBMs have returned to their playbooks of misleading consumers and preventing them from getting the drugs they need. State AGs can obtain huge healthcare fraud settlements and judgments, which can provide an additional source of revenue for the states. As PBMs are increasingly scrutinized by the federal and state authorities, State AG investigations and complaints are likely to increase.
While historically State AGs typically coordinate with the federal government, they can certainly act alone or along with other states. Some State AGs with active enforcement agendas have sought to elevate their enforcement levels during periods when they have anticipated or perceived a reduction in federal enforcement. The DOJ and FTC have had a light hand in terms of scrutinizing PBM conduct so State AGs seem to be filling the void. Such an uptick in state level PBM enforcement is now in play and PBMs should take note of the resulting enhanced risk.
Indeed, Ohio and other states are increasing their enforcement activities due to the slow progress by the federal government. In July, then Ohio Attorney General and current Ohio Governor Mike DeWine put “PBMs on notice that their conduct is being heavily scrutinized, and any action that can be taken and proven in court will be filed to protect Ohio taxpayers and the millions of Ohioans who rely on the pharmacy benefits provided.” Ohio’s investigation began at the end of 2017.
And just this week, the new Ohio Attorney General Dave Yost announced he is seeking repayment of nearly $16 million paid to the OptumRx by the Bureau of Workers’ Compensation. A report found that the PBM overcharged the state and violated its contract by failing to adhere to agreed discounts on generic drugs. Yost will take OptumRx to nonbinding mediation, and that fails, the dispute will be taken to court. He has also promised further action against PBMs, saying “they took our money.”
In February 2018, Arkansas Attorney General Leslie Rutledge opened an investigation into CVS Caremark’s reimbursement practices after reviewing complaints of plummeting prescription medication reimbursement rates paid to local pharmacies. She is concerned that the PBM’s “reimbursements do not cover the actual cost of the medications.” If the local pharmacies’ prescription reimbursement rates are lower than their costs to purchase the drugs, they may eventually have to close their doors, which in turn, harms patients.
Fortunately, state AGs are there to protect consumers and competition and they have tremendous interest in controlling drug spending. States are clearly victims of these PBM schemes as significant drug price increases take a substantial amount out of state budgets. State AGs have the tools and need to use their enforcement powers to stop the egregious practices that are currently harming consumers. They are essential to protecting consumers and making the market work. Other State AGs should follow the examples of Arkansas and Ohio, and launch investigations and enforcement actions to stop abuses and ensure that PBMs are actually lowering drug costs.
From:https://www.thecppc.com/single-post/2019/02/21/State-AGs-Must-Protect-Consumers-and-Fill-The-Void-to-Challenge-PBM-Misconduct?utm_campaign=4f29d95c-84d4-42a2-9746-c5c44d551d91&utm_source=so
Rebecca Sandefur on access to justice. Her article: “Access to What?” https://www.mitpressjournals.org/doi/full/10.1162/daed_a_00534
Journalists tend to focus on Rebecca Sandefur’s observation that people seeking solutions to civil justice problems may do just as well on their own as with the help of a lawyer. See https://www.nytimes.com/2019/02/13/opinion/legal-issues.html
Sandefur does start her recent article with the point that “resolving justice problems lawfully does not always require lawyer assistance. . . .” But Sandefur’s main point is deeper, and thought provoking. It is that justice is about just resolutions, not necessarily about access to legal services. A broader understanding of what just resolutions entail will help lawyers to work with problem solvers who are not lawyers to craft an array of approaches to achieving just results.
Civil justice problems Sandefur has in mind for solution include a broad array: wage theft, eviction, debt collection, bankruptcy, domestic violence, foreclosure, access to medical treatment, and care and custody of children and dependent adults.
Following is an excerpt from Sandefur’s article (citations omitted):
When a system is broken, the solution is systemic reform. Consider consumer debt. Today, small-claims and lower-civil-court dockets are flooded with debt claims against consumers. These claims have usually been sold by the original debtor, such as a credit-card company, to a third-party debt buyer in a bundle of hundreds or thousands of debts. Such claims against consumers are often based on “bad paper,” insufficient documentation to sustain the debt owners’ claim to the amount demanded. Courts spend scarce time and money processing hundreds of thousands of baseless claims. This situation persists because, in most states, courts do not require creditor-plaintiffs to show that they have documentation of ownership for the debt when they file lawsuits; individual debtors must appear in court and contest the documentation for each debt. In 2014, New York State's then–Chief Judge Jonathan Lippman issued an order requiring debt-owners to produce documentation of the amount claimed at the time of filing. The number of debt lawsuits against New York consumers dropped dramatically.
These are just a few examples from growing evidence that the current course of focusing narrowly on lawyers’ services is wrong, whether the goal is understanding the access problem or taking action to fix it. Looking only at the civil justice activity processed by lawyers or the court system misses most of the action. Focusing on existing programs that deliver legal services and on court cases will never provide a picture of all of the other civil justice activity that never makes it to the justice system–and that is the majority of civil justice activity. Practically speaking, it would be impossible for the nation's existing courts, administrative agencies, and other forums that resolve disputes to process the estimated more than one hundred million justice problems that Americans experience every year. There is no reason to want them to. The rule of law means that most people can rely on most others to be basically compliant with legal norms most of the time, with a fair and accessible legal system as backup.
The access-to-justice crisis is a crisis of exclusion and inequality, for which legal services will sometimes provide a solution. At other times, lawyers’ services will be too expensive and much more than necessary. At other times still, systemic reforms will be the right solution, not providing costly and inefficient assistance to individuals. Lawyers and social scientists have a limited understanding of how to determine which justice problems of the public need lawyers’ services and which do not.
Journalists tend to focus on Rebecca Sandefur’s observation that people seeking solutions to civil justice problems may do just as well on their own as with the help of a lawyer. See https://www.nytimes.com/2019/02/13/opinion/legal-issues.html
Sandefur does start her recent article with the point that “resolving justice problems lawfully does not always require lawyer assistance. . . .” But Sandefur’s main point is deeper, and thought provoking. It is that justice is about just resolutions, not necessarily about access to legal services. A broader understanding of what just resolutions entail will help lawyers to work with problem solvers who are not lawyers to craft an array of approaches to achieving just results.
Civil justice problems Sandefur has in mind for solution include a broad array: wage theft, eviction, debt collection, bankruptcy, domestic violence, foreclosure, access to medical treatment, and care and custody of children and dependent adults.
Following is an excerpt from Sandefur’s article (citations omitted):
When a system is broken, the solution is systemic reform. Consider consumer debt. Today, small-claims and lower-civil-court dockets are flooded with debt claims against consumers. These claims have usually been sold by the original debtor, such as a credit-card company, to a third-party debt buyer in a bundle of hundreds or thousands of debts. Such claims against consumers are often based on “bad paper,” insufficient documentation to sustain the debt owners’ claim to the amount demanded. Courts spend scarce time and money processing hundreds of thousands of baseless claims. This situation persists because, in most states, courts do not require creditor-plaintiffs to show that they have documentation of ownership for the debt when they file lawsuits; individual debtors must appear in court and contest the documentation for each debt. In 2014, New York State's then–Chief Judge Jonathan Lippman issued an order requiring debt-owners to produce documentation of the amount claimed at the time of filing. The number of debt lawsuits against New York consumers dropped dramatically.
These are just a few examples from growing evidence that the current course of focusing narrowly on lawyers’ services is wrong, whether the goal is understanding the access problem or taking action to fix it. Looking only at the civil justice activity processed by lawyers or the court system misses most of the action. Focusing on existing programs that deliver legal services and on court cases will never provide a picture of all of the other civil justice activity that never makes it to the justice system–and that is the majority of civil justice activity. Practically speaking, it would be impossible for the nation's existing courts, administrative agencies, and other forums that resolve disputes to process the estimated more than one hundred million justice problems that Americans experience every year. There is no reason to want them to. The rule of law means that most people can rely on most others to be basically compliant with legal norms most of the time, with a fair and accessible legal system as backup.
The access-to-justice crisis is a crisis of exclusion and inequality, for which legal services will sometimes provide a solution. At other times, lawyers’ services will be too expensive and much more than necessary. At other times still, systemic reforms will be the right solution, not providing costly and inefficient assistance to individuals. Lawyers and social scientists have a limited understanding of how to determine which justice problems of the public need lawyers’ services and which do not.
From Paul Levy:
Consumer Warning: Copyright Trolling by Higbee and Associates
Excerpt:
Over the past few years, the law firm Higbee and Associates (based in Los Angeles, although it pretentiously labels itself a "National Law Firm") has become identified with a pattern of making aggressive and, in many cases, unsupportable demands for the payment of significant sums of money by individuals and nonprofits whose web sites feature copyrighted graphics, and especially photographs, that they saw online but have never tried to license. The firm’s principal, Mathew Higbee, revels in his reputation for aggressive enforcement. (The interview linked above, for example, is featured on his own firm’s web site.)
Either in concert with a specialized search firm or using his own firm’s software, this firm patrols the Internet looking for graphics (especially photographs) that have been copied improperly from online sources. The firm then sends a demand letter bearing Higbee's signature, threatening to seek up to $150,000 in statutory damages as well as attorney fees unless the target of the letter promptly agrees to pay a specified amount. Deploying a tactic that is all too familiar from the depredations of Evan Stone and Prenda Law, the specified amount is low enough – usually in the low four figures, but I have seen high three figures as well —that it is not likely to be cost-effective for the target to hire a knowledgeable copyright lawyer to litigate an infringement lawsuit, even if the claim is bunk or, at least, if there is good reason to believe that the claim can easily be defended. The letter encloses a document identifying the allegedly infringing use as well as the online location where the work was found; another document that purports to authorize the firm to represent the copyright holder in seeking damages in connection with the work; a proposed “settlement agreement”; and a credit card payment form. If the target of the letter does not respond, or responds without agreeing to pay, then the Higbee firm increases the pressure: a non-lawyer who calls herself a “claim resolution specialist” sends an email warning that the claim is going to be “escalated to the attorneys,” at which point “[t]claim gets more stressful and expensive,” and an assurance that “my goal is to not let that happen to you.”
The documents linked above all relate to a single Higbee demand to a single target, but I have seen a number of other demand letters and ensuing emails from this firm, and spoken to several other copyright lawyers who have helped clients respond to Higbee’s blustering and threats, and it appears to me that these are pretty standard exemplars. Indeed, when I was reaching out to some other copyright lawyers to try to get their sense of some of the documents I was reviewing, a number of them guessed that it was Higbee based only on what I said I wanted to ask about, based on work they had done for their clients trying to address his threats against them. Plainly, this is a copyright troll with an outsized reputation.
The Demand to Homeless United for Friendship and Freedom (“HUFF”)
As it happens, I had heard recently from colleagues in the copyright law community about threats that Higbee was making to nonprofits when I was contacted by Thomas Leavitt, a former client in a free speech case, about a Higbee demand to Homeless United for Friendship and Freedom (“HUFF”). HUFF is a loose-knit activist group in Santa Cruz, California, that addresses issues of poverty, with specific reference to homelessness. It maintains a blog which, among other things, shows media coverage related to homelessness. On August 6, 2012, the blog reposted an article from the New York Times about a mass detention of migrants in Greece. That article featured a photograph showing an immigrant in the hands of the Greek police. The photograph could be seen in the HUFF blog post, along with the photo credit “Angelos Tzortzinis/Agence France-Presse — Getty Images.” but although the text of the Times article was placed directly on the blog, the photograph appeared only by virtue of deep-linking to the graphic as it appeared on the Times’ own web site, at this address.
More than six years later, on January 2, 2019, Mathew Higbee sent HUFF his demand letter, accompanied by the other documents described above. Several things jumped out at me. First, instead of reciting that the copyright in the photograph had been registered, and either attaching the registration or at least citing the registration number, the letter recited the photo’s “PicRights Claim Number” – a matter of utterly no consequence for the recipient of the demand. The registration number, by contrast, is far more significant in this context, because, for most copyrighted works (the exception is discussed below), a copyright holder cannot bring suit for infringement until the copyright has been registered, and regardless of the exception, a copyright holder cannot seek statutory damages or attorney fees for infringements that take place before registration, or even for infringements that continue after registration unless the copyright was registered promptly after the work was first published. Because this photograph appeared in the New York Times within a day after the photo was taken, and more than six years before the demand letter was sent, a failure to register would have meant that the letter’s warning about statutory damages and attorney fees was an empty bluff meant to intimidate.
Second, the letter was plainly a boilerplate form, containing somewhat stilted language that was poorly adapted to the specifics of HUFF’s claimed infringement. For example, the letter varies back and forth between referring to the recipient in the second and third person singular, suggests that HUFF might have its wages garnished, warns of action against “the business owner,” and refers to “the attached exhibits” even though only one exhibit was attached. Indeed, the “representation agreement” that was provided along with the demand letter, purporting to show that Agence France-Presse, PicRights and a European version of PicRights had authorized Higbee to pursue claims on its behalf about HUFF’s alleged infringement with respect to this specific photograph, did not identify the photograph but simply indicated that Higbee was handling “a copyright infringement matter.”
Third, the exhibit revealed Higbee’s recognition that the “infringing location” for the copyrighted work was not HUFF’s own web site but rather the web site of the New York Times which, presumably had licensed the photograph (I was able to confirm that assumption by contacting the Times’ legal department). And the Court of Appeals for the Ninth Circuit has decided, in Perfect 10 v. Amazon, that Google does not infringe a photographer’s copyright by including images in its search results, because American copyright law does not prevent the “framing” of deep-linked images that actually sit on the server of a party that is entitled to display the photograph and serve copies of the image to visiting viewers; it is only displaying and distributing from the defendant’s own server that violates the copyright laws (the “server test”).
Higbee Retreats Rapidly When Challenged by a Lawyer
Consequently, I wrote back to Higbee, asking directly whether the copyright in the image had been registered, and pointing out some of the legal flaws in his demand letter as well as the bullying email that had been sent as a followup by his "claims resolution specialist," Rebecca Alvarado. I told him that he needed to issue a prompt retraction of the demand, else we would be seeking a declaratory judgment of non-infringement.
For the complete article, go to https://pubcit.typepad.com/clpblog/2019/02/consumer-warning-copyright-trolling-by-higbee-and-associates.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
Consumer Warning: Copyright Trolling by Higbee and Associates
Excerpt:
Over the past few years, the law firm Higbee and Associates (based in Los Angeles, although it pretentiously labels itself a "National Law Firm") has become identified with a pattern of making aggressive and, in many cases, unsupportable demands for the payment of significant sums of money by individuals and nonprofits whose web sites feature copyrighted graphics, and especially photographs, that they saw online but have never tried to license. The firm’s principal, Mathew Higbee, revels in his reputation for aggressive enforcement. (The interview linked above, for example, is featured on his own firm’s web site.)
Either in concert with a specialized search firm or using his own firm’s software, this firm patrols the Internet looking for graphics (especially photographs) that have been copied improperly from online sources. The firm then sends a demand letter bearing Higbee's signature, threatening to seek up to $150,000 in statutory damages as well as attorney fees unless the target of the letter promptly agrees to pay a specified amount. Deploying a tactic that is all too familiar from the depredations of Evan Stone and Prenda Law, the specified amount is low enough – usually in the low four figures, but I have seen high three figures as well —that it is not likely to be cost-effective for the target to hire a knowledgeable copyright lawyer to litigate an infringement lawsuit, even if the claim is bunk or, at least, if there is good reason to believe that the claim can easily be defended. The letter encloses a document identifying the allegedly infringing use as well as the online location where the work was found; another document that purports to authorize the firm to represent the copyright holder in seeking damages in connection with the work; a proposed “settlement agreement”; and a credit card payment form. If the target of the letter does not respond, or responds without agreeing to pay, then the Higbee firm increases the pressure: a non-lawyer who calls herself a “claim resolution specialist” sends an email warning that the claim is going to be “escalated to the attorneys,” at which point “[t]claim gets more stressful and expensive,” and an assurance that “my goal is to not let that happen to you.”
The documents linked above all relate to a single Higbee demand to a single target, but I have seen a number of other demand letters and ensuing emails from this firm, and spoken to several other copyright lawyers who have helped clients respond to Higbee’s blustering and threats, and it appears to me that these are pretty standard exemplars. Indeed, when I was reaching out to some other copyright lawyers to try to get their sense of some of the documents I was reviewing, a number of them guessed that it was Higbee based only on what I said I wanted to ask about, based on work they had done for their clients trying to address his threats against them. Plainly, this is a copyright troll with an outsized reputation.
The Demand to Homeless United for Friendship and Freedom (“HUFF”)
As it happens, I had heard recently from colleagues in the copyright law community about threats that Higbee was making to nonprofits when I was contacted by Thomas Leavitt, a former client in a free speech case, about a Higbee demand to Homeless United for Friendship and Freedom (“HUFF”). HUFF is a loose-knit activist group in Santa Cruz, California, that addresses issues of poverty, with specific reference to homelessness. It maintains a blog which, among other things, shows media coverage related to homelessness. On August 6, 2012, the blog reposted an article from the New York Times about a mass detention of migrants in Greece. That article featured a photograph showing an immigrant in the hands of the Greek police. The photograph could be seen in the HUFF blog post, along with the photo credit “Angelos Tzortzinis/Agence France-Presse — Getty Images.” but although the text of the Times article was placed directly on the blog, the photograph appeared only by virtue of deep-linking to the graphic as it appeared on the Times’ own web site, at this address.
More than six years later, on January 2, 2019, Mathew Higbee sent HUFF his demand letter, accompanied by the other documents described above. Several things jumped out at me. First, instead of reciting that the copyright in the photograph had been registered, and either attaching the registration or at least citing the registration number, the letter recited the photo’s “PicRights Claim Number” – a matter of utterly no consequence for the recipient of the demand. The registration number, by contrast, is far more significant in this context, because, for most copyrighted works (the exception is discussed below), a copyright holder cannot bring suit for infringement until the copyright has been registered, and regardless of the exception, a copyright holder cannot seek statutory damages or attorney fees for infringements that take place before registration, or even for infringements that continue after registration unless the copyright was registered promptly after the work was first published. Because this photograph appeared in the New York Times within a day after the photo was taken, and more than six years before the demand letter was sent, a failure to register would have meant that the letter’s warning about statutory damages and attorney fees was an empty bluff meant to intimidate.
Second, the letter was plainly a boilerplate form, containing somewhat stilted language that was poorly adapted to the specifics of HUFF’s claimed infringement. For example, the letter varies back and forth between referring to the recipient in the second and third person singular, suggests that HUFF might have its wages garnished, warns of action against “the business owner,” and refers to “the attached exhibits” even though only one exhibit was attached. Indeed, the “representation agreement” that was provided along with the demand letter, purporting to show that Agence France-Presse, PicRights and a European version of PicRights had authorized Higbee to pursue claims on its behalf about HUFF’s alleged infringement with respect to this specific photograph, did not identify the photograph but simply indicated that Higbee was handling “a copyright infringement matter.”
Third, the exhibit revealed Higbee’s recognition that the “infringing location” for the copyrighted work was not HUFF’s own web site but rather the web site of the New York Times which, presumably had licensed the photograph (I was able to confirm that assumption by contacting the Times’ legal department). And the Court of Appeals for the Ninth Circuit has decided, in Perfect 10 v. Amazon, that Google does not infringe a photographer’s copyright by including images in its search results, because American copyright law does not prevent the “framing” of deep-linked images that actually sit on the server of a party that is entitled to display the photograph and serve copies of the image to visiting viewers; it is only displaying and distributing from the defendant’s own server that violates the copyright laws (the “server test”).
Higbee Retreats Rapidly When Challenged by a Lawyer
Consequently, I wrote back to Higbee, asking directly whether the copyright in the image had been registered, and pointing out some of the legal flaws in his demand letter as well as the bullying email that had been sent as a followup by his "claims resolution specialist," Rebecca Alvarado. I told him that he needed to issue a prompt retraction of the demand, else we would be seeking a declaratory judgment of non-infringement.
For the complete article, go to https://pubcit.typepad.com/clpblog/2019/02/consumer-warning-copyright-trolling-by-higbee-and-associates.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
Press Release, House Committee on Financial Services:
Waters and Green request documents from Consumer Bureau on recent settlements that do not require companies that have violated the law to provide redress to consumers who have been harmed.
Washington DC, February 7, 2019
Tags: CFPBToday, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, and Congressman Al Green (D-TX), Chairman of the Subcommittee on Oversight and Investigations, wrote to Consumer Financial Protection Bureau Director Kathy Kraninger to request documents relating to recent settlements that do not require companies that have violated the law to provide redress to consumers who have been harmed.
“The Consumer Financial Protection Bureau (“Consumer Bureau”) has recently announced several settlements against entities for engaging in unlawful practices without requiring the payment of redress to consumers harmed by the illegal conduct,” the lawmakers wrote. “This stands in stark contrast to the Consumer Bureau’s practice under the leadership of former Director Cordray. During Director Cordray’s tenure, the Consumer Bureau recovered nearly $12 billion in relief for harmed consumers over its first six years.[1] American consumers deserve a Consumer Bureau that will fight to recover their hard-earned money when they are cheated.”
In the letter, the lawmakers requested documents regarding recent Consumer Bureau settlements with Sterling Jewelers Inc., Enova International, Inc, and NDG Financial Corp. et al.
See below for the full letter. [https://financialservices.house.gov/uploadedfiles/letter_to_cfpb_re_settlements_020719.pdf]
The Honorable Kathy Kraninger
Director
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, D.C. 20552
Dear Director Kraninger:
The Consumer Financial Protection Bureau (“Consumer Bureau”) has recently announced several settlements against entities for engaging in unlawful practices without requiring the payment of redress to consumers harmed by the illegal conduct. This stands in stark contrast to the Consumer Bureau’s practice under the leadership of former Director Cordray. During Director Cordray’s tenure, the Consumer Bureau recovered nearly $12 billion in relief for harmed consumers over its first six years.[1] American consumers deserve a Consumer Bureau that will fight to recover their hard-earned money when they are cheated.
On January 16, 2019, the Consumer Bureau announced it had reached a settlement with Sterling Jewelers Inc. (“Sterling”) for numerous claims, including that the company engaged in unfair practices by enrolling consumers who had a Sterling credit card in payment protection insurance without their consent.[2] Under the terms of the settlement, Sterling is required to pay a penalty to the Consumer Bureau of $10 million, but does not have to refund consumers any of the money paid for payment protection insurance.[3] According to the Consumer Bureau’s complaint against Sterling, payment protection insurance generated $60 million in revenue in 2016 alone.[4] The Consumer Bureau has previously required payments to consumers in similar cases where it found that consumers were enrolled in payment protection products without their consent.[5] The Committee is deeply troubled that the Consumer Bureau would allow a company to keep the profits they made from their illegal sales practices.
On January 25, 2019, the Consumer Bureau announced a settlement with Enova International, Inc. (“Enova”), an online lender, for engaging in unfair practices by debiting consumers’ bank accounts without authorization.[6] The settlement requires Enova to pay a $3.2 million civil money penalty to the Consumer Bureau, but contains no provision for paying redress to consumers.[7] The factual findings in the administrative consent order indicates that Enova debited payments on thousands of consumers’ outstanding loans where it did not have authorization and “extracted millions of dollars in unauthorized debits from consumers’ accounts.”[8]
On February 1, 2019, the Consumer Bureau announced a settlement with NDG Financial Corporation and other Defendants (“NDG Financial”) that did not require them to pay either a penalty or restitution to consumers.[9] The Consumer Bureau initiated its action against NDG Financial when the agency was still led by former Director Cordray. In its December 2015 amended complaint, the Consumer Bureau alleged that NDG Financial engaged in unfair, deceptive, and abusive practices by collecting on payday loans that were made in violation of state law.[10]The amended complaint specifically sought “damages and other monetary relief as the Court finds necessary to redress injury to consumers resulting from [NDG Financial’s] violations of federal consumer protection laws including but not limited to restitution and the refund of monies paid.”[11] Yet, the settlement agreement seeks no such relief for the wronged consumers.
Section 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”) explicitly authorizes the Consumer Bureau to obtain relief for consumers, including the refund of money, restitution, or the payment of damages or other monetary relief. 12 U.S.C. § 5565(a)(1)(2).
The Committee has serious concerns about how the Consumer Bureau is exercising its enforcement authority, especially how it is determining whether to require companies to pay redress to consumers that have been harmed. The fact that two of the three settlements involve online lending raises serious questions about the Consumer Bureau’s commitment to protecting America’s consumers from predatory online lending practices.
As part of the Committee’s oversight over the Consumer Bureau,[12] please provide the following records by no later than March 5, 2019:
Sincerely,
MAXINE WATERS
CHAIRWOMAN
AL GREEN
CHAIRMAN
Subcommittee on Oversight and Investigations
cc: The Honorable Patrick McHenry, Ranking Member
Waters and Green request documents from Consumer Bureau on recent settlements that do not require companies that have violated the law to provide redress to consumers who have been harmed.
Washington DC, February 7, 2019
Tags: CFPBToday, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, and Congressman Al Green (D-TX), Chairman of the Subcommittee on Oversight and Investigations, wrote to Consumer Financial Protection Bureau Director Kathy Kraninger to request documents relating to recent settlements that do not require companies that have violated the law to provide redress to consumers who have been harmed.
“The Consumer Financial Protection Bureau (“Consumer Bureau”) has recently announced several settlements against entities for engaging in unlawful practices without requiring the payment of redress to consumers harmed by the illegal conduct,” the lawmakers wrote. “This stands in stark contrast to the Consumer Bureau’s practice under the leadership of former Director Cordray. During Director Cordray’s tenure, the Consumer Bureau recovered nearly $12 billion in relief for harmed consumers over its first six years.[1] American consumers deserve a Consumer Bureau that will fight to recover their hard-earned money when they are cheated.”
In the letter, the lawmakers requested documents regarding recent Consumer Bureau settlements with Sterling Jewelers Inc., Enova International, Inc, and NDG Financial Corp. et al.
See below for the full letter. [https://financialservices.house.gov/uploadedfiles/letter_to_cfpb_re_settlements_020719.pdf]
The Honorable Kathy Kraninger
Director
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, D.C. 20552
Dear Director Kraninger:
The Consumer Financial Protection Bureau (“Consumer Bureau”) has recently announced several settlements against entities for engaging in unlawful practices without requiring the payment of redress to consumers harmed by the illegal conduct. This stands in stark contrast to the Consumer Bureau’s practice under the leadership of former Director Cordray. During Director Cordray’s tenure, the Consumer Bureau recovered nearly $12 billion in relief for harmed consumers over its first six years.[1] American consumers deserve a Consumer Bureau that will fight to recover their hard-earned money when they are cheated.
On January 16, 2019, the Consumer Bureau announced it had reached a settlement with Sterling Jewelers Inc. (“Sterling”) for numerous claims, including that the company engaged in unfair practices by enrolling consumers who had a Sterling credit card in payment protection insurance without their consent.[2] Under the terms of the settlement, Sterling is required to pay a penalty to the Consumer Bureau of $10 million, but does not have to refund consumers any of the money paid for payment protection insurance.[3] According to the Consumer Bureau’s complaint against Sterling, payment protection insurance generated $60 million in revenue in 2016 alone.[4] The Consumer Bureau has previously required payments to consumers in similar cases where it found that consumers were enrolled in payment protection products without their consent.[5] The Committee is deeply troubled that the Consumer Bureau would allow a company to keep the profits they made from their illegal sales practices.
On January 25, 2019, the Consumer Bureau announced a settlement with Enova International, Inc. (“Enova”), an online lender, for engaging in unfair practices by debiting consumers’ bank accounts without authorization.[6] The settlement requires Enova to pay a $3.2 million civil money penalty to the Consumer Bureau, but contains no provision for paying redress to consumers.[7] The factual findings in the administrative consent order indicates that Enova debited payments on thousands of consumers’ outstanding loans where it did not have authorization and “extracted millions of dollars in unauthorized debits from consumers’ accounts.”[8]
On February 1, 2019, the Consumer Bureau announced a settlement with NDG Financial Corporation and other Defendants (“NDG Financial”) that did not require them to pay either a penalty or restitution to consumers.[9] The Consumer Bureau initiated its action against NDG Financial when the agency was still led by former Director Cordray. In its December 2015 amended complaint, the Consumer Bureau alleged that NDG Financial engaged in unfair, deceptive, and abusive practices by collecting on payday loans that were made in violation of state law.[10]The amended complaint specifically sought “damages and other monetary relief as the Court finds necessary to redress injury to consumers resulting from [NDG Financial’s] violations of federal consumer protection laws including but not limited to restitution and the refund of monies paid.”[11] Yet, the settlement agreement seeks no such relief for the wronged consumers.
Section 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”) explicitly authorizes the Consumer Bureau to obtain relief for consumers, including the refund of money, restitution, or the payment of damages or other monetary relief. 12 U.S.C. § 5565(a)(1)(2).
The Committee has serious concerns about how the Consumer Bureau is exercising its enforcement authority, especially how it is determining whether to require companies to pay redress to consumers that have been harmed. The fact that two of the three settlements involve online lending raises serious questions about the Consumer Bureau’s commitment to protecting America’s consumers from predatory online lending practices.
As part of the Committee’s oversight over the Consumer Bureau,[12] please provide the following records by no later than March 5, 2019:
- All documents and communications referring or related to the issue of restitution in the settlement in Bureau of Consumer Financial Protection and the People of the State of New York, by Letitia James, Attorney General for the State of New York, v. Sterling Jewelers Inc., Case 1:19-cv-00448, including but not limited to, all memoranda (whether draft or final), any and all drafts of the proposed consent order, and all meeting minutes.
- All communications between the Bureau and Sterling or its representatives referring or related to the issue of restitution in the settlement in Bureau of Consumer Financial Protection and the People of the State of New York, by Letitia James, Attorney General for the State of New York, v. Sterling Jewelers Inc., Case 1:19-cv-00448, including but not limited to, any and all drafts of the proposed consent order.
- All documents and communications referring or related to the issue of restitution in the settlement in In the Matter of Enova International, Inc., 2019-CFPB-0003, including but not limited to, all memoranda (whether draft or final), any and all drafts of the proposed consent order, and all meeting minutes.
- All communications between the Bureau and Enova or its representatives referring or related to the issue of restitution in the settlement in In the Matter of Enova International, Inc., 2019-CFPB-0003, including but not limited to, any and all drafts of the proposed consent order.
- All documents and communications referring or related to the issue of restitution in the settlement in Consumer Financial Protection Bureau v. NDG Financial Corp. et al., Case 1:15-cv-05211, including but not limited to, all memoranda (whether draft or final), any and all drafts of the proposed consent order, and all meeting minutes.
- All communications between the Bureau and NDG (or any of the other Defendants named in the settlement) or their representatives referring or related to the issue of restitution in the settlement in Consumer Financial Protection Bureau v. NDG Financial Corp. et al., Case 1:15-cv-05211, including but not limited to, any and all drafts of the proposed consent order.
Sincerely,
MAXINE WATERS
CHAIRWOMAN
AL GREEN
CHAIRMAN
Subcommittee on Oversight and Investigations
cc: The Honorable Patrick McHenry, Ranking Member
Why The Sprint-T-Mobile Merger Epitomizes What Has Gone Wrong With U.S. Merger Enforcement
Diana Moss, President, American Antitrust Institute
Excerpt:
As Sprint and T-Mobile continue to hawk their proposed merger to antitrust enforcers, Congress, and the public, they face a growing tsunami of opposition from consumers, workers, and smaller competitors. This week, the companies go before another congressional committee to attempt to justify a deal that would combine the third and fourth wireless largest telecommunications carriers in the U.S.
The reality of a Sprint-T-Mobile merger is the elimination of the two "disruptive" competitors that have kept the big guys, AT&T and Verizon, on their toes. Worse, it would leave U.S. consumers with a cozy trio of national wireless carriers with strong incentives to collude rather than compete. The deal would virtually guarantee higher prices, less quality, and slower innovation for wireless services for millions of U.S. consumers.
So what is the justification for a combination that would fundamentally restructure the U.S. wireless industry? The deal will purportedly enable Sprint and T-Mobile to roll out 5G networks better and faster than if they did not combine forces. The companies have continued to dangle this enticing but elusive benefit before antitrust enforcers, Congress, and the public, even though both carriers are on record as ready, able, and willing to roll out 5G before they proposed to merge in early 2018.
The Sprint-T-Mobile story boils down to a fallacy that everyone can and should understand. That is, accepting significant harms to competition, consumers, and workers on the claim that the companies can deliver a benefit that both could achieve without the merger. We should not forget that it is the very competition between the existing four wireless carriers that drove Sprint and T-Mobile to begin rolling out 5G as independent wireless rivals.
The specter of Sprint and T-Mobile succeeding in justifying their merger should make every U.S. consumer hot under the collar. It prompted the American Antitrust Institute (AAI) to issue a commentary in June 2018, "Why the Sprint-T-Mobile Merger Should be DOA at the DOJ." AAI's piece laid out the facts: mergers that leave three competitors in a market are demonstrably some of the most virulently anticompetitive and anti-consumer deals because they create incentives to collude and weaken incentives to compete.
Full statement: https://www.antitrustinstitute.org/work-product/why-the-sprint-t-mobile-merger-epitomizes-what-has-gone-wrong-with-u-s-merger-enforcement/
Diana Moss, President, American Antitrust Institute
Excerpt:
As Sprint and T-Mobile continue to hawk their proposed merger to antitrust enforcers, Congress, and the public, they face a growing tsunami of opposition from consumers, workers, and smaller competitors. This week, the companies go before another congressional committee to attempt to justify a deal that would combine the third and fourth wireless largest telecommunications carriers in the U.S.
The reality of a Sprint-T-Mobile merger is the elimination of the two "disruptive" competitors that have kept the big guys, AT&T and Verizon, on their toes. Worse, it would leave U.S. consumers with a cozy trio of national wireless carriers with strong incentives to collude rather than compete. The deal would virtually guarantee higher prices, less quality, and slower innovation for wireless services for millions of U.S. consumers.
So what is the justification for a combination that would fundamentally restructure the U.S. wireless industry? The deal will purportedly enable Sprint and T-Mobile to roll out 5G networks better and faster than if they did not combine forces. The companies have continued to dangle this enticing but elusive benefit before antitrust enforcers, Congress, and the public, even though both carriers are on record as ready, able, and willing to roll out 5G before they proposed to merge in early 2018.
The Sprint-T-Mobile story boils down to a fallacy that everyone can and should understand. That is, accepting significant harms to competition, consumers, and workers on the claim that the companies can deliver a benefit that both could achieve without the merger. We should not forget that it is the very competition between the existing four wireless carriers that drove Sprint and T-Mobile to begin rolling out 5G as independent wireless rivals.
The specter of Sprint and T-Mobile succeeding in justifying their merger should make every U.S. consumer hot under the collar. It prompted the American Antitrust Institute (AAI) to issue a commentary in June 2018, "Why the Sprint-T-Mobile Merger Should be DOA at the DOJ." AAI's piece laid out the facts: mergers that leave three competitors in a market are demonstrably some of the most virulently anticompetitive and anti-consumer deals because they create incentives to collude and weaken incentives to compete.
Full statement: https://www.antitrustinstitute.org/work-product/why-the-sprint-t-mobile-merger-epitomizes-what-has-gone-wrong-with-u-s-merger-enforcement/
9th Circuit to reconsider decision on openly carrying guns in Hawaii
The 9th US Circuit Court of Appeals will re-examine a case concerning the open carrying of firearms in Hawaii. Last year, a panel of the court held that Hawaii violated a man's constitutional rights by denying him a permit to openly carry a firearm for self-defense in public.
https://www.reuters.com/article/us-usa-guns-court/us-appeals-court-to-revisit-open-carrying-of-guns-idUSKCN1PX2A9
9th Circuit to reconsider decision on openly carrying guns in Hawaii
The 9th US Circuit Court of Appeals will re-examine a case concerning the open carrying of firearms in Hawaii. Last year, a panel of the court held that Hawaii violated a man's constitutional rights by denying him a permit to openly carry a firearm for self-defense in public.
https://www.reuters.com/article/us-usa-guns-court/us-appeals-court-to-revisit-open-carrying-of-guns-idUSKCN1PX2A9
From DMN:
Live Nation Acquires Neste, Forming a New Live Joint Venture — Neste Live!
Daniel Sanchez
February 14, 2019
Neste marks the fourth acquisition Live Nation has made so far this year.
Live Nation Entertainment has made another important acquisition.
The live entertainment giant has acquired a majority stake in Neste, a full-service event marketing agency.
Live Nation plans to combine Neste’s expertise with its own extensive resources to launch Neste Live! The live joint venture will focus on talent buying and event production for US music festivals, fairs, and corporate clients.
With Neste Live!, Live Nation will service these markets combining Neste’s artist matching process with its own talent pool. The live joint venture will also combine event production expertise from both companies.
Neste Event Marketing first launched in 1995 as a corporate sponsorship and event marketing agency. The company first serviced the music festival marketplace. Neste eventually added talent buying and event production elements to its services. The event marketing agency has spearheaded and supported over 500 events. Its corporate clientele has included Jack Links, Jockey, Kansas City Life Insurance, Advisors Excel, and the NCAA College World Series.
Speaking about the majority acquisition and the new live joint venture, Gil Cunningham, President of Neste, said,
“We are looking forward to seeing the way Neste Live! unfolds and changes the talent buying process for clients of all kinds.”
Bob Roux, President of US Concerts at Live Nation, explained the live joint venture will help both companies work with even more events and clients in the live entertainment market.
“Gil and the team at Neste are amazing at what they do and make the perfect partners for this new endeavor.”
Based out of Tennessee, the Neste Live! team will report directly to Cunningham.
Neste marks Live Nation’s fourth acquisition so far this year. Last month, the live entertainment giant acquired One Production, a promoter in Singapore. This month, the company acquired Embrace Presents, a Canadian promoter, and Latin promoter Planet Events.
Source: https://www.digitalmusicnews.com/2019/02/14/live-nation-acquisition-neste-live/
Live Nation Acquires Neste, Forming a New Live Joint Venture — Neste Live!
Daniel Sanchez
February 14, 2019
Neste marks the fourth acquisition Live Nation has made so far this year.
Live Nation Entertainment has made another important acquisition.
The live entertainment giant has acquired a majority stake in Neste, a full-service event marketing agency.
Live Nation plans to combine Neste’s expertise with its own extensive resources to launch Neste Live! The live joint venture will focus on talent buying and event production for US music festivals, fairs, and corporate clients.
With Neste Live!, Live Nation will service these markets combining Neste’s artist matching process with its own talent pool. The live joint venture will also combine event production expertise from both companies.
Neste Event Marketing first launched in 1995 as a corporate sponsorship and event marketing agency. The company first serviced the music festival marketplace. Neste eventually added talent buying and event production elements to its services. The event marketing agency has spearheaded and supported over 500 events. Its corporate clientele has included Jack Links, Jockey, Kansas City Life Insurance, Advisors Excel, and the NCAA College World Series.
Speaking about the majority acquisition and the new live joint venture, Gil Cunningham, President of Neste, said,
“We are looking forward to seeing the way Neste Live! unfolds and changes the talent buying process for clients of all kinds.”
Bob Roux, President of US Concerts at Live Nation, explained the live joint venture will help both companies work with even more events and clients in the live entertainment market.
“Gil and the team at Neste are amazing at what they do and make the perfect partners for this new endeavor.”
Based out of Tennessee, the Neste Live! team will report directly to Cunningham.
Neste marks Live Nation’s fourth acquisition so far this year. Last month, the live entertainment giant acquired One Production, a promoter in Singapore. This month, the company acquired Embrace Presents, a Canadian promoter, and Latin promoter Planet Events.
Source: https://www.digitalmusicnews.com/2019/02/14/live-nation-acquisition-neste-live/
From DMN:
Sprint Is Suing AT&T Over ‘Fake’ 5G Advertising Claims
Ashley King
February 8, 2019
Sprint has filed a lawsuit against AT&T for its 5G Evolution branding.AT&T rolled out the branding on phones that still use 4G LTE Advanced technology, which is not true 5G.
Both T-Mobile and Verizon have mocked the branding through social media, but Sprint is the first to respond with litigation. In federal court filings, Sprint is seeking an injunction against AT&T to prevent them from using 5GE tags on devices or in advertising.
The claim filed by Sprint says the network performed a survey and found people believed 5G Evolution was the same thing as actual 5G.
54% of respondents believed 5GE networks were the same or better than true 5G. 43% of people said they believed that buying an AT&T phone in 2019 would be 5G capable.
Sprint argues that AT&T is damaging the reputation of true 5G, which is many times faster than 4G LTE.
AT&T says they will fight the lawsuit while continuing to deploy more 5G Evolution areas across the United States.
They see no problem with the advertising because — according to AT&T — most customers don’t see a problem with it. Sprint proved as much with their consumer survey, AT&T claims.
AT&T clapped back at the lawsuit in a statement to Engadget [ https://www.engadget.com/2019/02/08/att-5g-sprint-lawsuit/ ], mentioning the potential merger with T-Mobile and the reliance on their 5G network.
“Sprint will have to reconcile its arguments to the FCC that it cannot deploy a widespread 5G network without T-Mobile while simultaneously claiming in this suit to be launching ‘legitimate 5G technology imminently’.”
When 4G technology was the new kid on the block, both AT&T and T-Mobile were branding HSPA+ technology as 4G. It’s not surprising to see them doing the same with 5G, though it will be interesting to see how this lawsuit turns out.
See https://www.digitalmusicnews.com/2019/02/08/sprint-att-fake-5g/ where a copy of the complaint filed in court can be found
Sprint Is Suing AT&T Over ‘Fake’ 5G Advertising Claims
Ashley King
February 8, 2019
Sprint has filed a lawsuit against AT&T for its 5G Evolution branding.AT&T rolled out the branding on phones that still use 4G LTE Advanced technology, which is not true 5G.
Both T-Mobile and Verizon have mocked the branding through social media, but Sprint is the first to respond with litigation. In federal court filings, Sprint is seeking an injunction against AT&T to prevent them from using 5GE tags on devices or in advertising.
The claim filed by Sprint says the network performed a survey and found people believed 5G Evolution was the same thing as actual 5G.
54% of respondents believed 5GE networks were the same or better than true 5G. 43% of people said they believed that buying an AT&T phone in 2019 would be 5G capable.
Sprint argues that AT&T is damaging the reputation of true 5G, which is many times faster than 4G LTE.
AT&T says they will fight the lawsuit while continuing to deploy more 5G Evolution areas across the United States.
They see no problem with the advertising because — according to AT&T — most customers don’t see a problem with it. Sprint proved as much with their consumer survey, AT&T claims.
AT&T clapped back at the lawsuit in a statement to Engadget [ https://www.engadget.com/2019/02/08/att-5g-sprint-lawsuit/ ], mentioning the potential merger with T-Mobile and the reliance on their 5G network.
“Sprint will have to reconcile its arguments to the FCC that it cannot deploy a widespread 5G network without T-Mobile while simultaneously claiming in this suit to be launching ‘legitimate 5G technology imminently’.”
When 4G technology was the new kid on the block, both AT&T and T-Mobile were branding HSPA+ technology as 4G. It’s not surprising to see them doing the same with 5G, though it will be interesting to see how this lawsuit turns out.
See https://www.digitalmusicnews.com/2019/02/08/sprint-att-fake-5g/ where a copy of the complaint filed in court can be found
District of Columbia gun control
(By DAR) D.C.’s current gun control regulations can be found at https://mpdc.dc.gov/firearms Qualifying adults may register rifles, shotguns,revolvers, or handguns. In general, carrying a firearm in the District is prohibited.
At an earlier time the District of Columbia had a firearm regulatory scheme that more broadly prohibited the possession of firearms, including possesion of an operable handgun in a home. In 2008 in the case of District of Columbia v. Heller, 128 S.Ct. 2783 (2008), a 5 to 4 majority of the Supreme Court, in an opinion written by Justice Scalia, declared DC’s firearm regulatory scheme unconstitutional to the extent that it prohibited possession of an operable handgun in a home for self-defense purposes.
In an article criticizing the Heller decision, Anthony Picadio points out that the U.S. Supreme has been reluctant to review lower court decisions putting restrictions on gun ownership, including restrictions analogous to those now applicable in the District of Columbia. Following is an excerpt from Mr. Picadio’s article, with footnotes omitted:
Since Heller was decided, and as of October 18, 2018, there have been over 1,310
Second Amendment cases nationwide, challenging restrictive gun laws, with the
overwhelming majority (93%) upholding these restrictions.37 The Supreme Court
was petitioned to accept an appeal in 88 of those cases and in each case the Court
declined to hear the appeal.
Among the cases left standing by the Supreme Court are the following:
Peruta v. California, in which the Ninth Circuit Court of Appeals held that the
Second Amendment does not protect the right to carry concealed firearms in
public;
United States v. Mahin, in which the Fourth Circuit Court of Appeals upheld a
federal law prohibiting persons subject to domestic violence restraining order
from possessing firearms;
Kolbe v. Hogan, in which the Fourth Circuit Court of Appeals held that assault
weapons and large capacity magazines are not protected by the Second
Amendment;
Justice v. Town of Cicero, in which the Seventh Circuit Court of Appeals upheld a
local law requiring registration of all firearms.
These are only a few of the many restrictive Second Amendment decisions the
Supreme Court has left stand after the Heller decision.
The history of the Second Amendment in the courts since the Heller decision does
in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.” Perhaps one of the reasons that the Amendment has been so disfavored by the courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a militia.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
(By DAR) D.C.’s current gun control regulations can be found at https://mpdc.dc.gov/firearms Qualifying adults may register rifles, shotguns,revolvers, or handguns. In general, carrying a firearm in the District is prohibited.
At an earlier time the District of Columbia had a firearm regulatory scheme that more broadly prohibited the possession of firearms, including possesion of an operable handgun in a home. In 2008 in the case of District of Columbia v. Heller, 128 S.Ct. 2783 (2008), a 5 to 4 majority of the Supreme Court, in an opinion written by Justice Scalia, declared DC’s firearm regulatory scheme unconstitutional to the extent that it prohibited possession of an operable handgun in a home for self-defense purposes.
In an article criticizing the Heller decision, Anthony Picadio points out that the U.S. Supreme has been reluctant to review lower court decisions putting restrictions on gun ownership, including restrictions analogous to those now applicable in the District of Columbia. Following is an excerpt from Mr. Picadio’s article, with footnotes omitted:
Since Heller was decided, and as of October 18, 2018, there have been over 1,310
Second Amendment cases nationwide, challenging restrictive gun laws, with the
overwhelming majority (93%) upholding these restrictions.37 The Supreme Court
was petitioned to accept an appeal in 88 of those cases and in each case the Court
declined to hear the appeal.
Among the cases left standing by the Supreme Court are the following:
Peruta v. California, in which the Ninth Circuit Court of Appeals held that the
Second Amendment does not protect the right to carry concealed firearms in
public;
United States v. Mahin, in which the Fourth Circuit Court of Appeals upheld a
federal law prohibiting persons subject to domestic violence restraining order
from possessing firearms;
Kolbe v. Hogan, in which the Fourth Circuit Court of Appeals held that assault
weapons and large capacity magazines are not protected by the Second
Amendment;
Justice v. Town of Cicero, in which the Seventh Circuit Court of Appeals upheld a
local law requiring registration of all firearms.
These are only a few of the many restrictive Second Amendment decisions the
Supreme Court has left stand after the Heller decision.
The history of the Second Amendment in the courts since the Heller decision does
in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.” Perhaps one of the reasons that the Amendment has been so disfavored by the courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a militia.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
FROM PBS WEEKEND NEWSHOUR: the Consumer Financial Protection Bureau is proposing changes to regulations that previously protected borrowers from being trapped in long-term debt
In a major win for the payday lending industry which gives quick loans at exorbitant interest rates, the Consumer Financial Protection Bureau is proposing changes to regulations that protect borrowers from being trapped in long-term debt. Kevin Sweet, Associated Press’ business reporter, joins Hari Sreenivasan for more.
Go to https://www.pbs.org/newshour/show/consumers-may-lose-protections-in-proposed-payday-lending-changes#audio
In a major win for the payday lending industry which gives quick loans at exorbitant interest rates, the Consumer Financial Protection Bureau is proposing changes to regulations that protect borrowers from being trapped in long-term debt. Kevin Sweet, Associated Press’ business reporter, joins Hari Sreenivasan for more.
Go to https://www.pbs.org/newshour/show/consumers-may-lose-protections-in-proposed-payday-lending-changes#audio
Abusive litigator and patent troll Shipping and Transit LLC files for bankruptcy
(By DAR) A complex legal system makes it possible for some companies and lawyers to misuse the legal process to make money. In a recent case involving Shipping and Transit LLC the Judge explained that:
"Plaintiff [Shipping and Transit LLC] 's business model involves filing hundreds of patent infringement lawsuits, mostly against small companies, and leveraging the high cost of litigation to extract settlements for amounts less than $50,000. These tactics present a compelling need for deterrence and to discourage exploitative litigation by patentees who have no intention of testing the merits of their claims. Based on the totality of the circumstances, the Court finds that this [a case by a Defendant who fought back and asked for attorney's fees] is an “exceptional” case. . . . Defendant’s Motion for Attorney Fees and Costs is GRANTED. The Court rules that Defendant is the prevailing party, that Defendant is entitled to recover its costs to the extent taxable under L.R. 54-3, and that Defendant is entitled to recover its reasonable attorney fees under 35 U.S.C. § 285, including fees associated with its motion for attorney fees and costs."
The case report is at https://www.eff.org/files/2017/07/07/shipping_transit_llc_v_hall_-_fee_order.pdf
Daniel Nazer of the Electronic Frontier Foundation reports that Shipping & Transit LLC, formerly known as Arrivalstar, was one of the most prolific patent trolls ever. It filed more than 500 lawsuits alleging patent infringement. Despite having filed so many cases, it never had a court rule on the validity of its patents. In recent years, Shipping & Transit’s usual practice was to dismiss its claims as soon as a defendant spends resources to fight back. A district court in California issued an order this week [see above] ordering Shipping & Transit to pay a defendant's attorney's fees. The court found that Shipping & Transit has engaged in a pattern of “exploitative litigation.” The fee award is from a case called Shipping & Transit LLC v. Hall Enterprises, Inc. After getting sued, Hall told Shipping & Transit that it should dismiss its claims because its patents are invalid under Alice v. CLS Bank. Shipping & Transit refused. Hall then went to the expense of preparing and filing a motion for judgment on the pleadings (PDF at https://www.eff.org/files/2017/07/07/shipping_transit_v_hall_-_motion_for_judgment_on_the_pleadings.pdf) arguing that Shipping & Transit’s patents are invalid. In response, Shipping & Transit voluntarily dismissed its claims. Hall then filed its successful motion for attorney’s fees.
Subsequently Shipping and Transit filed for bankruptcy, declaring the value of its patents to be $1. See https://www.techdirt.com/blog/?company=shipping+%26+transit+llc
(By DAR) A complex legal system makes it possible for some companies and lawyers to misuse the legal process to make money. In a recent case involving Shipping and Transit LLC the Judge explained that:
"Plaintiff [Shipping and Transit LLC] 's business model involves filing hundreds of patent infringement lawsuits, mostly against small companies, and leveraging the high cost of litigation to extract settlements for amounts less than $50,000. These tactics present a compelling need for deterrence and to discourage exploitative litigation by patentees who have no intention of testing the merits of their claims. Based on the totality of the circumstances, the Court finds that this [a case by a Defendant who fought back and asked for attorney's fees] is an “exceptional” case. . . . Defendant’s Motion for Attorney Fees and Costs is GRANTED. The Court rules that Defendant is the prevailing party, that Defendant is entitled to recover its costs to the extent taxable under L.R. 54-3, and that Defendant is entitled to recover its reasonable attorney fees under 35 U.S.C. § 285, including fees associated with its motion for attorney fees and costs."
The case report is at https://www.eff.org/files/2017/07/07/shipping_transit_llc_v_hall_-_fee_order.pdf
Daniel Nazer of the Electronic Frontier Foundation reports that Shipping & Transit LLC, formerly known as Arrivalstar, was one of the most prolific patent trolls ever. It filed more than 500 lawsuits alleging patent infringement. Despite having filed so many cases, it never had a court rule on the validity of its patents. In recent years, Shipping & Transit’s usual practice was to dismiss its claims as soon as a defendant spends resources to fight back. A district court in California issued an order this week [see above] ordering Shipping & Transit to pay a defendant's attorney's fees. The court found that Shipping & Transit has engaged in a pattern of “exploitative litigation.” The fee award is from a case called Shipping & Transit LLC v. Hall Enterprises, Inc. After getting sued, Hall told Shipping & Transit that it should dismiss its claims because its patents are invalid under Alice v. CLS Bank. Shipping & Transit refused. Hall then went to the expense of preparing and filing a motion for judgment on the pleadings (PDF at https://www.eff.org/files/2017/07/07/shipping_transit_v_hall_-_motion_for_judgment_on_the_pleadings.pdf) arguing that Shipping & Transit’s patents are invalid. In response, Shipping & Transit voluntarily dismissed its claims. Hall then filed its successful motion for attorney’s fees.
Subsequently Shipping and Transit filed for bankruptcy, declaring the value of its patents to be $1. See https://www.techdirt.com/blog/?company=shipping+%26+transit+llc
Warren questions Fed resolve on mergers after BB&T-SunTrust deal
By Excerpt:
WASHINGTON — After the proposed merger of BB&T and SunTrust Banks announced this week, Sen. Elizabeth Warren, D-Mass., said she is concerned about the Federal Reserve’s scrutiny of merger and acquisition applications.
“The board's record of summarily approving mergers raises doubts about whether it will serve as a meaningful check on this consolidation that creates a new too big to fail bank and has the potential to hurt consumers,” Warren said in a letter to Fed Chair Jerome Powell on Thursday, the same day the deal was announced.
Warren’s concerns about the merger come less than a year after she questioned the Fed and the Justice Department about how they have reviewed past bank mergers and how they intend to preserve competition and financial stability. She warned in April 2018 that a regulatory relief bill, which she and many other progressive Democrats opposed and which was signed into law in May, would lead to a “wave” of bank mergers
From https://www.americanbanker.com/news/elizabeth-warren-questions-fed-resolve-on-mergers-after-bb-t-suntrust-deal
By Excerpt:
WASHINGTON — After the proposed merger of BB&T and SunTrust Banks announced this week, Sen. Elizabeth Warren, D-Mass., said she is concerned about the Federal Reserve’s scrutiny of merger and acquisition applications.
“The board's record of summarily approving mergers raises doubts about whether it will serve as a meaningful check on this consolidation that creates a new too big to fail bank and has the potential to hurt consumers,” Warren said in a letter to Fed Chair Jerome Powell on Thursday, the same day the deal was announced.
Warren’s concerns about the merger come less than a year after she questioned the Fed and the Justice Department about how they have reviewed past bank mergers and how they intend to preserve competition and financial stability. She warned in April 2018 that a regulatory relief bill, which she and many other progressive Democrats opposed and which was signed into law in May, would lead to a “wave” of bank mergers
From https://www.americanbanker.com/news/elizabeth-warren-questions-fed-resolve-on-mergers-after-bb-t-suntrust-deal
Open Markets Press Release: The Podcast Market is Working and We Must Protect It
February 7, 2019
Spotify yesterday announced plans to buy podcast producer and network Gimlet Media for $230 million as well as podcast recording startup Anchor, two of the most important platforms in the podcast industry. The Open Markets Institute calls for the Federal Trade Commission and European enforcers to block the deals. The market for podcasts is one of the few news media markets that is growing, diverse, and successful, and antitrust enforcers should head off efforts by platform monopolists to take control over the industry.
The podcast market today includes a wide range of truly independent voices able to finance their operations with advertising revenue. Listeners, meanwhile, are able to download podcasts with little interference or personalized tracking by third-party software or advertising monopolists. And this old-school, open market system works. In 2017, US podcast ad revenues was $314 million dollars, and is forecast to hit $659 million by 2020.
This early stage market is, however, highly vulnerable to enclosure. Spotify CEO Daniel Ek has said he plans to spend some $500 million total to buy podcasts and podcast platforms just this year. Such a position would enable Spotify to begin to capture a significant amount of the advertising revenue that now goes straight to podcasters.
A takeover of Anchor, in particular, could also prove to be especially harmful to the industry. Anchor has provided a platform for start-up podcasters to produce, host, and sell advertising for their podcasts. If Spotify plans to change Anchor’s model, it may stifle new players, or lock them into a Spotify controlled system.
The present diversity in the Podcast industry is directly tied to market structure. There is vertical separation between the layers of the market, with software, production, and advertising done independently of one another. There is limited or no data collection, so there is no user-centric behavioral targeting or privacy breaches. This means podcast producers can still profit in a fair market for advertising sponsorships and compete fairly for an audience.
It is vital that the Federal Trade Commission and European anti-monopoly enforcers not only move to protect the podcast market, they should also study it closely for lessons to apply to other news media markets. The podcast market is a glowing example of what an open market looks like in America and the abundance it brings to both creators and listeners, and the political and civic dialogue it enables among citizens.
For media inquiries please contact Stella Roque, Communications Director at [email protected].
February 7, 2019
Spotify yesterday announced plans to buy podcast producer and network Gimlet Media for $230 million as well as podcast recording startup Anchor, two of the most important platforms in the podcast industry. The Open Markets Institute calls for the Federal Trade Commission and European enforcers to block the deals. The market for podcasts is one of the few news media markets that is growing, diverse, and successful, and antitrust enforcers should head off efforts by platform monopolists to take control over the industry.
The podcast market today includes a wide range of truly independent voices able to finance their operations with advertising revenue. Listeners, meanwhile, are able to download podcasts with little interference or personalized tracking by third-party software or advertising monopolists. And this old-school, open market system works. In 2017, US podcast ad revenues was $314 million dollars, and is forecast to hit $659 million by 2020.
This early stage market is, however, highly vulnerable to enclosure. Spotify CEO Daniel Ek has said he plans to spend some $500 million total to buy podcasts and podcast platforms just this year. Such a position would enable Spotify to begin to capture a significant amount of the advertising revenue that now goes straight to podcasters.
A takeover of Anchor, in particular, could also prove to be especially harmful to the industry. Anchor has provided a platform for start-up podcasters to produce, host, and sell advertising for their podcasts. If Spotify plans to change Anchor’s model, it may stifle new players, or lock them into a Spotify controlled system.
The present diversity in the Podcast industry is directly tied to market structure. There is vertical separation between the layers of the market, with software, production, and advertising done independently of one another. There is limited or no data collection, so there is no user-centric behavioral targeting or privacy breaches. This means podcast producers can still profit in a fair market for advertising sponsorships and compete fairly for an audience.
It is vital that the Federal Trade Commission and European anti-monopoly enforcers not only move to protect the podcast market, they should also study it closely for lessons to apply to other news media markets. The podcast market is a glowing example of what an open market looks like in America and the abundance it brings to both creators and listeners, and the political and civic dialogue it enables among citizens.
For media inquiries please contact Stella Roque, Communications Director at [email protected].
From Bloomberg: Pilgrim’s Pride Sued Over ‘Natural’ Chicken Marketing: The litigation follows a complaint filed in December with the Federal Trade Commission about its “humane” animal treatment claims.
By Lydia Mulvany
and Deena Shanker
February 7, 2019,
American consumers willingly pay more for foods advertised as “natural,” “organic” or “humane.” Food companies took notice long ago, adding such pledges to all manner of products. But it can be challenging for shoppers to figure out whether those promises are real or empty branding.
A lawsuit against chicken giant Pilgrim’s Pride Corp., filed by advocacy groups Food & Water Watch Inc. and Organic Consumers Association, turns on this very question. And they filed it in what’s arguably one of the most consumer-friendly courts in America.
At issue is the Greeley, Colorado-based company’s marketing claims that its birds are fed “only natural ingredients,” treated humanely and produced in an environmentally responsible way, according to a complaint filed on Wednesday in the Superior Court of the District of Columbia in Washington.
The company’s practices don’t live up to those claims, the plaintiffs alleged. The birds live in crowded, unsanitary warehouses, are abused by employees and have debilitating health conditions due to their breed, which was developed to grow fast, according to court papers. They’re raised with the help of routine use of antibiotics to promote growth and fed genetically modified organisms, the advocacy groups alleged in the filing.
“Contrary to Pilgrim’s Pride’s representations, the chickens who become these products are, as a matter of standard business practices, treated in unnatural, cruel, and inhumane manners, from hatching through slaughter,” according to the complaint. The plaintiffs, represented by Richman Law Group and Animal Equality, are seeking an injunction and corrective advertising.
“We strongly disagree with these allegations and look forward to defending our approach to animal welfare and sustainability,” said Misty Barnes, a spokeswoman for Pilgrim’s Pride.
“It’s a tough position that the company finds itself in.”
Pilgrim’s Pride now faces challenges about its marketing on multiple fronts. In December the company was the subject of a complaint filed by the Humane Society of the United States with the Federal Trade Commission, which said Pilgrim’s Pride was “scalding fully conscious chickens” as a result of its methods for slaughter, yet stating on its website at the time that its birds were being produced “as humanely as possible. ”
At the time, Cameron Bruett, a spokesman for Pilgrim’s Pride, a subsidiary of Brazilian meat processing giant JBS SA, rejected the Humane Society’s allegations.
“Pilgrim’s is committed to the well-being of the poultry under our care,” Bruett wrote in an email. “We welcome the opportunity to defend our approach to animal welfare against these false allegations.”
The language cited by the Humane Society subsequently disappeared from multiple places on the company’s website. Pilgrim’s Pride said at the time that the change in language was part of a long-planned update.
“It’s a tough position that the company finds itself in,” said attorney John E. Villafranco, who practices advertising law at Kelley Drye & Warren LLP. The district where the lawsuit was filed has “maybe the most permissive consumer protection statute in the country.”
https://www.bloomberg.com/news/articles/2019-02-07/pilgrim-s-pride-sued-over-natural-chicken-labels?
From DMN: Five Artists File Two Class-Action Lawsuits Against Sony Music and UMG
Daniel Sanchez, February 6, 2019
Will Sony Music and Universal Music Group willingly return copyrights to artists?
Two major labels have now come under fire in a New York courtroom.
Five musicians have filed two separate class-action lawsuits against Sony Music Entertainment and Universal Music Group (UMG) at the US District Court in the Southern District of New York.
he New York Dolls’ David Johansen along with John Lyon and Paul Collins filed the lawsuit against Sony Music. John Waite and Joe Ely are taking UMG to court.
According to both lawsuits, Sony and UMG have violated Section 203 of the Copyright Act, better known as the ’35-Year-Law.’ The termination law states that creators who assign their copyright to a company or person have the right to reclaim their rights after 35 years.
In violation of that law, enacted in 1976, both major labels have allegedly refused to acknowledge Notices of Termination sent by the artists.
The actions, if successful, could seriously impact the catalog cash-cows enjoyed by the major recording labels.
Evan S. Cohen, an LA music attorney representing the artists, explained,
“Our copyright law provides recording artists and songwriters with a valuable, once-in-a-lifetime chance to terminate old deals and regain their creative works after 35 years. This ‘second chance’ has always been a part of our copyright law.
“Sony and UMG have refused to acknowledge the validity of any of the Notices, and have completely disregarded the artists’ ownership rights by continuing to exploit those recordings and infringing upon our clients’ copyrights.
“This behavior must stop. The legal issues in these class action suits have never been decided by a court, and are of paramount importance to the music industry.”
Cohen also represents over one hundred recording artists who have sent major labels similar Notices of Termination along with Maryann R. Marzano, the LA attorney who successfully brought class-action lawsuits against SiriusXM and Spotify. In addition, Blank Rome LLP’s Gregory M. Bordo, David C. Kistler, and David M. Perry will represent the artists against the major labels. Reportedly Delayed Until February or March
The lawsuit court filings are posted with the DMN article
https://www.digitalmusicnews.com/2019/02/06/sony-music-umg-class-action-lawsuits/
Daniel Sanchez, February 6, 2019
Will Sony Music and Universal Music Group willingly return copyrights to artists?
Two major labels have now come under fire in a New York courtroom.
Five musicians have filed two separate class-action lawsuits against Sony Music Entertainment and Universal Music Group (UMG) at the US District Court in the Southern District of New York.
he New York Dolls’ David Johansen along with John Lyon and Paul Collins filed the lawsuit against Sony Music. John Waite and Joe Ely are taking UMG to court.
According to both lawsuits, Sony and UMG have violated Section 203 of the Copyright Act, better known as the ’35-Year-Law.’ The termination law states that creators who assign their copyright to a company or person have the right to reclaim their rights after 35 years.
In violation of that law, enacted in 1976, both major labels have allegedly refused to acknowledge Notices of Termination sent by the artists.
The actions, if successful, could seriously impact the catalog cash-cows enjoyed by the major recording labels.
Evan S. Cohen, an LA music attorney representing the artists, explained,
“Our copyright law provides recording artists and songwriters with a valuable, once-in-a-lifetime chance to terminate old deals and regain their creative works after 35 years. This ‘second chance’ has always been a part of our copyright law.
“Sony and UMG have refused to acknowledge the validity of any of the Notices, and have completely disregarded the artists’ ownership rights by continuing to exploit those recordings and infringing upon our clients’ copyrights.
“This behavior must stop. The legal issues in these class action suits have never been decided by a court, and are of paramount importance to the music industry.”
Cohen also represents over one hundred recording artists who have sent major labels similar Notices of Termination along with Maryann R. Marzano, the LA attorney who successfully brought class-action lawsuits against SiriusXM and Spotify. In addition, Blank Rome LLP’s Gregory M. Bordo, David C. Kistler, and David M. Perry will represent the artists against the major labels. Reportedly Delayed Until February or March
The lawsuit court filings are posted with the DMN article
https://www.digitalmusicnews.com/2019/02/06/sony-music-umg-class-action-lawsuits/
Opinion: How to Stop Facebook’s Dangerous App Integration Ploy
Its plan to combine Instagram, WhatsApp and Facebook Messenger entrenches its monopoly power, and the F.T.C. should step in.
By Sally Hubbard
Ms. Hubbard is an editor at The Capitol Forum.
Feb. 5, 2019
In response to calls that Facebook be forced to divest itself of WhatsApp and Instagram, Mark Zuckerberg has instead made a strategic power grab: He intends to put Instagram, WhatsApp and Facebook Messenger onto a unified technical infrastructure. The integrated apps are to be encrypted to protect users from hackers. But who’s going to protect users from Facebook?
Ideally, that would be the Federal Trade Commission, the agency charged with enforcing the antitrust laws and protecting consumers from unfair business practices. But the F.T.C. has looked the other way for far too long, failing to enforce its own 2011 consent decree under which Facebook was ordered to stop deceiving users about its privacy claims. The F.T.C. has also allowed Facebook to gobble up any company that could possibly compete against it, including Instagram and WhatsApp.
Not that blocking these acquisitions would have been easy for the agency under the current state of antitrust law. Courts require antitrust enforcers to prove that a merger will raise prices or reduce production of a particular product or service. But proving that prices will increase is nearly impossible in a digital world where consumers pay not with money but with their personal data and by viewing ads.
The integration Mr. Zuckerberg plans would immunize Facebook’s monopoly power from attack. It would make breaking Instagram and WhatsApp off as independent and viable competitors much harder, and thus demands speedy action by the government before it’s too late to take the pieces apart. Mr. Zuckerberg might be betting that he can integrate these three applications faster than any antitrust case could proceed — and he would be right, because antitrust cases take years.
https://www.nytimes.com/2019/02/05/opinion/facebook-integration.html?action=click&module=Opinion&pgtype=Homepage
Its plan to combine Instagram, WhatsApp and Facebook Messenger entrenches its monopoly power, and the F.T.C. should step in.
By Sally Hubbard
Ms. Hubbard is an editor at The Capitol Forum.
Feb. 5, 2019
In response to calls that Facebook be forced to divest itself of WhatsApp and Instagram, Mark Zuckerberg has instead made a strategic power grab: He intends to put Instagram, WhatsApp and Facebook Messenger onto a unified technical infrastructure. The integrated apps are to be encrypted to protect users from hackers. But who’s going to protect users from Facebook?
Ideally, that would be the Federal Trade Commission, the agency charged with enforcing the antitrust laws and protecting consumers from unfair business practices. But the F.T.C. has looked the other way for far too long, failing to enforce its own 2011 consent decree under which Facebook was ordered to stop deceiving users about its privacy claims. The F.T.C. has also allowed Facebook to gobble up any company that could possibly compete against it, including Instagram and WhatsApp.
Not that blocking these acquisitions would have been easy for the agency under the current state of antitrust law. Courts require antitrust enforcers to prove that a merger will raise prices or reduce production of a particular product or service. But proving that prices will increase is nearly impossible in a digital world where consumers pay not with money but with their personal data and by viewing ads.
The integration Mr. Zuckerberg plans would immunize Facebook’s monopoly power from attack. It would make breaking Instagram and WhatsApp off as independent and viable competitors much harder, and thus demands speedy action by the government before it’s too late to take the pieces apart. Mr. Zuckerberg might be betting that he can integrate these three applications faster than any antitrust case could proceed — and he would be right, because antitrust cases take years.
https://www.nytimes.com/2019/02/05/opinion/facebook-integration.html?action=click&module=Opinion&pgtype=Homepage
Heavy local pushback to AMAZON hq in NYC
Company executives have bristled at the intense criticism and, last week at a City Council hearing, seemed to float the notion that Amazon could reconsider its commitment to New York.
The ability of a local legislator to block the deal to bring a major new Amazon campus to Long Island City was exactly what Mr. Cuomo and Mayor Bill de Blasio had tried to avoid when they decided to use a state development process and to bypass more onerous city rules. Opposition, while vocal, seemed futile.
But now, with the insistence of Senate Democrats on appointing Mr. Gianaris to the little-known Public Authorities Control Board, those who want to stop Amazon from coming to Queens have gotten their most tangible boost yet. The board will have to decide on the development plan for Amazon, Mr. Cuomo has said, and could veto it.
From: https://www.nytimes.com/2019/02/04/nyregion/amazon-hq2-board-veto.html?action=click&module=Well&pgtype=Homepage§ion=New%20York
Company executives have bristled at the intense criticism and, last week at a City Council hearing, seemed to float the notion that Amazon could reconsider its commitment to New York.
The ability of a local legislator to block the deal to bring a major new Amazon campus to Long Island City was exactly what Mr. Cuomo and Mayor Bill de Blasio had tried to avoid when they decided to use a state development process and to bypass more onerous city rules. Opposition, while vocal, seemed futile.
But now, with the insistence of Senate Democrats on appointing Mr. Gianaris to the little-known Public Authorities Control Board, those who want to stop Amazon from coming to Queens have gotten their most tangible boost yet. The board will have to decide on the development plan for Amazon, Mr. Cuomo has said, and could veto it.
From: https://www.nytimes.com/2019/02/04/nyregion/amazon-hq2-board-veto.html?action=click&module=Well&pgtype=Homepage§ion=New%20York
Baltimore State’s Attorney Marilyn Mosby announces that her office will no longer prosecute arrests for marijuana possession
MARILYN MOSBY: As an office, I’ve instructed my attorneys that we will no longer be prosecuting the possession of marijuana, regardless of weight, and regardless of criminal history.
TAYA GRAHAM: Which is why Baltimore State’s Attorney Marilyn Mosby has decided to do something about it. This week she announced her office would no longer prosecute arrests for marijuana possession–a sweeping policy change that would apply to possession of unlimited amounts.
MARILYN MOSBY: We are going to continue to proceed upon possession with intent to distribute and distribution charges if there is an articulation of evidence which would indicate some sort of indicia of distribution.
TAYA GRAHAM: And aligns Mosby with progressive prosecutors across the country who have made similar commitments to not prosecute marijuana crimes. Mosby cited the same statistics, that marijuana arrests target people of color.
One of the reasons why we came to the conclusion that we were ultimately not going to prosecute possession of marijuana is because of the statistics and the disparate sort of enforcement of these laws on communities of color, and not the disparate use. The statistics, the data shows that the use among black and white people are the same. Yet in the city of Baltimore it has been an extreme problem, and for a very long time. In 2010 the ACLU put out a report in which, you know, nationally, if you are a black person, you were four times more likely to be arrested for mere possession of marijuana. In the city of Baltimore you were six times more likely to be arrested for possession of marijuana.
Excerpt is from therealnews.com/stories/prosecutor-refuses-to-try-pot-cases-but-police-pledge-to-continue-to-arrest See also foxbaltimore.com/news/local/mosby-to-stop-prosecuting-marijuana-possession-in-baltimore
MARILYN MOSBY: As an office, I’ve instructed my attorneys that we will no longer be prosecuting the possession of marijuana, regardless of weight, and regardless of criminal history.
TAYA GRAHAM: Which is why Baltimore State’s Attorney Marilyn Mosby has decided to do something about it. This week she announced her office would no longer prosecute arrests for marijuana possession–a sweeping policy change that would apply to possession of unlimited amounts.
MARILYN MOSBY: We are going to continue to proceed upon possession with intent to distribute and distribution charges if there is an articulation of evidence which would indicate some sort of indicia of distribution.
TAYA GRAHAM: And aligns Mosby with progressive prosecutors across the country who have made similar commitments to not prosecute marijuana crimes. Mosby cited the same statistics, that marijuana arrests target people of color.
One of the reasons why we came to the conclusion that we were ultimately not going to prosecute possession of marijuana is because of the statistics and the disparate sort of enforcement of these laws on communities of color, and not the disparate use. The statistics, the data shows that the use among black and white people are the same. Yet in the city of Baltimore it has been an extreme problem, and for a very long time. In 2010 the ACLU put out a report in which, you know, nationally, if you are a black person, you were four times more likely to be arrested for mere possession of marijuana. In the city of Baltimore you were six times more likely to be arrested for possession of marijuana.
Excerpt is from therealnews.com/stories/prosecutor-refuses-to-try-pot-cases-but-police-pledge-to-continue-to-arrest See also foxbaltimore.com/news/local/mosby-to-stop-prosecuting-marijuana-possession-in-baltimore
Editor’s note: The article below tells an interesting story of the use of default judgments by RIAA lawyers against remote actors as an aspect of copyright enforcement in the music industry. It reflects the view of the Digital Music News author and others that the RIAA lawyers abuse litigation procedures when they use default judgments to enhance client rights. It may be that many lawyers would be less offended, and some might feel that securing default judgments against remote bad actors advances good public copyright policy, but the critical view of a number of music industry experts seems worth noting.
A copy of the relevant court opinion is here: https://torrentfreak.com/images/ripperdismiss.pdf
Don Allen Resnikoff, Editor
From Digital Music News: RIAA Lawyers Botched a Big One Against FLVTO.biz — So What’s Next?
by Paul Resnikoff
January 25, 2019
The RIAA received a stunning defeat at the hands of Russian stream-ripper, FLVTO.biz. The decision could have far-reaching implications for US-based music, film, TV, fashion, and other IP-focused industries.
This was sort of like the Los Angeles Rams losing 45-0 to the Arizona Cardinals. Not impossible, of course. Just very unlikely — unless the Rams showed up hungover and skipped practice all week.
Which brings us to the Recording Industry Association of America (RIAA), which represents major label goliaths Sony Music Entertainment, Warner Music Group, and Universal Music Group. In its latest battle, the well-funded RIAA squared off against a little-known site operator from Russia, and prepared for an easy victory.
The RIAA, aside from its own highly-paid executives and attorneys, contracted the pricey services of law firm Jenner & Block, a self-described ‘litigation powerhouse‘. The collective legal army went to war against tiny FLVTO.biz, as well as 2conv.com, both sites apparently owned by a guy living in Russia, Tofig Kurbanov.
Who?
At first, the RIAA and Jenner weren’t even sure that Kurbanov was a real person. Apparently that’s the name the RIAA’s lawyers found on some DNS registrations, and that seemed to be the extent of the investigation. The legal team filed against the shadowy operator — along with some mysterious ‘John Does’ — in the U.S. District Court for the Eastern District of Virginia.
The court is conveniently located a few miles away from the RIAA’s F Street offices in downtown Washington, D.C.
According to filings, it looked like the RIAA was trying to serve Mr. Kurbanov by email, instead of actually chasing him down. The whole thing seems a little half-baked, until you realize the strategy at play. Instead of hunting down Kurbanov, or whomever was actually operating these sites, the RIAA was [it seems to the author] actually hoping that nobody would respond.
Why?
Without a response, the RIAA would have scored a quick, default judgment against their overseas John Doe defendant. Decisive decision in hand, the trade group could then force site blocks from ISPs, DNS providers, and search engines, and even recruit assistance from federal agencies like the FBI and Department of Homeland Security.
The resulting decision could then be used to intimidate other YouTube stream-rippers, many of whom are also operating overseas.
This isn’t a brand-new legal tactic. Far from it. And the results are glorious — at least from the perspective of the RIAA. In effect, the plaintiff — in this case the major labels — get pretty much everything they ask for from a federal judge.
Mitch Stoltz, an attorney with the Electronic Frontier Foundation, described the strategy this way:
“These sites, run from outside the U.S., don’t bother appearing in U.S. court to defend themselves—and the labels know this. When one party doesn’t show up to court and the other wins by default, judges often grant the winning party everything they ask for. Record labels, along with luxury brands and other frequent filers of copyright and trademark suits, have been using this tactic to write sweeping orders that claim to bind every kind of Internet intermediary: hosting providers, DNS registrars and registries, CDNs, Internet service providers, and more. Some of these requested orders claim to cover payment providers, search engines, and even Web browsers. Judges often sign these orders without much scrutiny.”
But what if the ‘John Doe’ defendant actually responds?
That would never happen — or so the RIAA and Jenner attorneys [apparently] thought. After all, is a shadowy individual (or group) in Russia (or wherever) really going to fight back, much less show up in a US-based courtroom?
Of course not.
Unless, of course, they do. Which is essentially what happened with FLVTO.biz (technically, Mr. Kurbanov never appeared in person, because he doesn’t have a visa to travel to the United States).
It turns out that Tofig Kurbanov is not only a real person living in Rostov-on-Don, Russia. He was also keenly aware of the legal action against him. Despite the obvious jurisdictional issues — or maybe because of them — Kurbanov decided to respond.
And he responded in full force. Kurbanov did his research, and ultimately hired three different law firms. That included Val Gurvits of Boston Law Group, PC, who started scrappily fighting this case against the polished pros at Jenner.
Gurvitz, along with a team that included Virginia-based Sands Anderson PC and Boston-based Ciampa Fray-Witzer, LLP, immediately started going for the jugular. They argued that this case was filed in the wrong jurisdiction, given that FLVTO and 2conv are based in Russia.
Virginia’s a nice state, but it’s connection to FLVTO is tenuous, at best, according to the defense.
Gurvitz’s team quickly moved to toss the case, suggesting that perhaps California would be the better venue given its proximity to YouTube and the music industry’s nerve center. Jenner & Block fought back, arguing that somehow Virginia was an important market for Kurbanov, and beyond that, targeted by Kurbanov’s sites.
It was a stretch. And it didn’t work.
Not only was Kurbanov ‘showing up,’ he came out swinging. And the RIAA got knocked out in the first round.
Earlier this week, Eastern District Court of Virginia judge Claude M. Hilton ruled that the case simply lacked jurisdiction. But Hilton not only tossed the case from the District Court of Virginia, he also disqualified it from being refiled anywhere else in the United States — California or otherwise.
“Due to the Court’s finding that personal jurisdiction is absent… the Court need not address whether transfer to the Central District of California would be appropriate as that venue would also be without jurisdiction,” Hilton opined.
The RIAA was stunned. The group’s PR person, Jonathan Lamy, was still on vacation. Another exec, Cara Duckworth, told us that the organization hadn’t decided their next step. She was just digesting the decision herself.
Gurvitz said he expects the trade group to appeal. But instead of a slam dunk, the RIAA is now battling to protect a major litigation weapon against alleged copyright infringers. The decision not only dims the RIAA’s hopes of defeating FLVTO.biz, it also raises serious questions about whether other industries can use the same absentee tactic.
That includes the film, TV, gaming, adult, fashion, or any other IP-related industry facing copyright infringement threats from shadowy overseas operators.
“All too often, plaintiffs file actions in US courts against foreign defendants that have no connections with the US – and all too often foreign defendants are subjected to default judgments for failure to appear in a US court,” Gurvitz told us. “We are happy we were able to defend our client from having to defend this action in a US court thousands of miles away from where the relevant business activities take place.”
In the short term, Kurbanov is now free to operate FLVTO.biz and 2conv.com with impunity in the United States, and pretty much anywhere else in the world. But the RIAA’s expected appeal is now far more important than a pair of YouTube stream-rippers, thanks to an extremely inconvenient jurisdictional precedent.
Aside from the ethical qualms, the problem with the RIAA’s legal tactic is that there was a small chance that the shadowy Kurbanov would fight back.
Now, that little miscalculation could change the face of anti-copyright litigation forever.
A copy of the relevant court opinion is here: https://torrentfreak.com/images/ripperdismiss.pdf
Don Allen Resnikoff, Editor
From Digital Music News: RIAA Lawyers Botched a Big One Against FLVTO.biz — So What’s Next?
by Paul Resnikoff
January 25, 2019
The RIAA received a stunning defeat at the hands of Russian stream-ripper, FLVTO.biz. The decision could have far-reaching implications for US-based music, film, TV, fashion, and other IP-focused industries.
This was sort of like the Los Angeles Rams losing 45-0 to the Arizona Cardinals. Not impossible, of course. Just very unlikely — unless the Rams showed up hungover and skipped practice all week.
Which brings us to the Recording Industry Association of America (RIAA), which represents major label goliaths Sony Music Entertainment, Warner Music Group, and Universal Music Group. In its latest battle, the well-funded RIAA squared off against a little-known site operator from Russia, and prepared for an easy victory.
The RIAA, aside from its own highly-paid executives and attorneys, contracted the pricey services of law firm Jenner & Block, a self-described ‘litigation powerhouse‘. The collective legal army went to war against tiny FLVTO.biz, as well as 2conv.com, both sites apparently owned by a guy living in Russia, Tofig Kurbanov.
Who?
At first, the RIAA and Jenner weren’t even sure that Kurbanov was a real person. Apparently that’s the name the RIAA’s lawyers found on some DNS registrations, and that seemed to be the extent of the investigation. The legal team filed against the shadowy operator — along with some mysterious ‘John Does’ — in the U.S. District Court for the Eastern District of Virginia.
The court is conveniently located a few miles away from the RIAA’s F Street offices in downtown Washington, D.C.
According to filings, it looked like the RIAA was trying to serve Mr. Kurbanov by email, instead of actually chasing him down. The whole thing seems a little half-baked, until you realize the strategy at play. Instead of hunting down Kurbanov, or whomever was actually operating these sites, the RIAA was [it seems to the author] actually hoping that nobody would respond.
Why?
Without a response, the RIAA would have scored a quick, default judgment against their overseas John Doe defendant. Decisive decision in hand, the trade group could then force site blocks from ISPs, DNS providers, and search engines, and even recruit assistance from federal agencies like the FBI and Department of Homeland Security.
The resulting decision could then be used to intimidate other YouTube stream-rippers, many of whom are also operating overseas.
This isn’t a brand-new legal tactic. Far from it. And the results are glorious — at least from the perspective of the RIAA. In effect, the plaintiff — in this case the major labels — get pretty much everything they ask for from a federal judge.
Mitch Stoltz, an attorney with the Electronic Frontier Foundation, described the strategy this way:
“These sites, run from outside the U.S., don’t bother appearing in U.S. court to defend themselves—and the labels know this. When one party doesn’t show up to court and the other wins by default, judges often grant the winning party everything they ask for. Record labels, along with luxury brands and other frequent filers of copyright and trademark suits, have been using this tactic to write sweeping orders that claim to bind every kind of Internet intermediary: hosting providers, DNS registrars and registries, CDNs, Internet service providers, and more. Some of these requested orders claim to cover payment providers, search engines, and even Web browsers. Judges often sign these orders without much scrutiny.”
But what if the ‘John Doe’ defendant actually responds?
That would never happen — or so the RIAA and Jenner attorneys [apparently] thought. After all, is a shadowy individual (or group) in Russia (or wherever) really going to fight back, much less show up in a US-based courtroom?
Of course not.
Unless, of course, they do. Which is essentially what happened with FLVTO.biz (technically, Mr. Kurbanov never appeared in person, because he doesn’t have a visa to travel to the United States).
It turns out that Tofig Kurbanov is not only a real person living in Rostov-on-Don, Russia. He was also keenly aware of the legal action against him. Despite the obvious jurisdictional issues — or maybe because of them — Kurbanov decided to respond.
And he responded in full force. Kurbanov did his research, and ultimately hired three different law firms. That included Val Gurvits of Boston Law Group, PC, who started scrappily fighting this case against the polished pros at Jenner.
Gurvitz, along with a team that included Virginia-based Sands Anderson PC and Boston-based Ciampa Fray-Witzer, LLP, immediately started going for the jugular. They argued that this case was filed in the wrong jurisdiction, given that FLVTO and 2conv are based in Russia.
Virginia’s a nice state, but it’s connection to FLVTO is tenuous, at best, according to the defense.
Gurvitz’s team quickly moved to toss the case, suggesting that perhaps California would be the better venue given its proximity to YouTube and the music industry’s nerve center. Jenner & Block fought back, arguing that somehow Virginia was an important market for Kurbanov, and beyond that, targeted by Kurbanov’s sites.
It was a stretch. And it didn’t work.
Not only was Kurbanov ‘showing up,’ he came out swinging. And the RIAA got knocked out in the first round.
Earlier this week, Eastern District Court of Virginia judge Claude M. Hilton ruled that the case simply lacked jurisdiction. But Hilton not only tossed the case from the District Court of Virginia, he also disqualified it from being refiled anywhere else in the United States — California or otherwise.
“Due to the Court’s finding that personal jurisdiction is absent… the Court need not address whether transfer to the Central District of California would be appropriate as that venue would also be without jurisdiction,” Hilton opined.
The RIAA was stunned. The group’s PR person, Jonathan Lamy, was still on vacation. Another exec, Cara Duckworth, told us that the organization hadn’t decided their next step. She was just digesting the decision herself.
Gurvitz said he expects the trade group to appeal. But instead of a slam dunk, the RIAA is now battling to protect a major litigation weapon against alleged copyright infringers. The decision not only dims the RIAA’s hopes of defeating FLVTO.biz, it also raises serious questions about whether other industries can use the same absentee tactic.
That includes the film, TV, gaming, adult, fashion, or any other IP-related industry facing copyright infringement threats from shadowy overseas operators.
“All too often, plaintiffs file actions in US courts against foreign defendants that have no connections with the US – and all too often foreign defendants are subjected to default judgments for failure to appear in a US court,” Gurvitz told us. “We are happy we were able to defend our client from having to defend this action in a US court thousands of miles away from where the relevant business activities take place.”
In the short term, Kurbanov is now free to operate FLVTO.biz and 2conv.com with impunity in the United States, and pretty much anywhere else in the world. But the RIAA’s expected appeal is now far more important than a pair of YouTube stream-rippers, thanks to an extremely inconvenient jurisdictional precedent.
Aside from the ethical qualms, the problem with the RIAA’s legal tactic is that there was a small chance that the shadowy Kurbanov would fight back.
Now, that little miscalculation could change the face of anti-copyright litigation forever.
Does Starbucks rip off coffee farmers?
Some reports suggests that the answer is yes, and has been for years. In contrast, the Starbucks website describes its policies as supportive of the economic interests of farmers. Following is an excerpt from an article at https://www.dailysabah.com/economy/2017/01/18/ethiopias-coffee-farmers-eye-more-fair-trade-amid-rising-share-in-global-market
For every kilogram of coffee beans an Ethiopian farmer sells for $3, it is estimated that people up in the supply chain make around $200.
There are an estimated 15 million farmers who produce 270,000 tons (297,600 tons) of coffee in Ethiopia, the fifth-largest producer in the world after Brazil, Vietnam, Columbia and Indonesia.
Around 95 percent of the coffee is produced by small farmers like 68-year-old Selkamo Kemissa, who work in their own farms and sell their produce to middlemen. These intermediaries are widely suspected of short changing them on the huge profit margins.
Kemissa told Anadolu Agency the Arabica coffee produced on his farm near the small town of Shebedino Woreda - located around 315 kilometers (196 miles) southeast of capital Addis Ababa - ends up in multinational chains like Starbucks, where a single cup of coffee could cost as much as what he gets for a kilogram or even more.
Some reports suggests that the answer is yes, and has been for years. In contrast, the Starbucks website describes its policies as supportive of the economic interests of farmers. Following is an excerpt from an article at https://www.dailysabah.com/economy/2017/01/18/ethiopias-coffee-farmers-eye-more-fair-trade-amid-rising-share-in-global-market
For every kilogram of coffee beans an Ethiopian farmer sells for $3, it is estimated that people up in the supply chain make around $200.
There are an estimated 15 million farmers who produce 270,000 tons (297,600 tons) of coffee in Ethiopia, the fifth-largest producer in the world after Brazil, Vietnam, Columbia and Indonesia.
Around 95 percent of the coffee is produced by small farmers like 68-year-old Selkamo Kemissa, who work in their own farms and sell their produce to middlemen. These intermediaries are widely suspected of short changing them on the huge profit margins.
Kemissa told Anadolu Agency the Arabica coffee produced on his farm near the small town of Shebedino Woreda - located around 315 kilometers (196 miles) southeast of capital Addis Ababa - ends up in multinational chains like Starbucks, where a single cup of coffee could cost as much as what he gets for a kilogram or even more.
The FDA may be backsliding on quality control just as it’s approving more generics
The FDA approved a record 971 generic drugs in the fiscal year ending Sept. 30, according to a report from the accounting firm PricewaterhouseCoopers. That was a 94 percent increase over fiscal 2014, when 500 were approved.
Yet the number of so-called surveillance inspections done globally by the FDA—meant to ensure existing drug-making plants meet U.S. standards—dropped 11 percent, to 1,471, in fiscal 2018 from fiscal 2017. Those inspection numbers also decreased in fiscal 2017, which included Gottlieb’s first few months in office, falling 13 percent from the prior year. The figures were obtained through a public-records request.
Surveillance inspections of just U.S. drug factories declined 11 percent, to 693, from fiscal 2017 to fiscal 2018, the lowest going back for at least a decade, the data show. Such inspections have been falling since 2011, as the agency began focusing more on foreign manufacturers.
Meanwhile, from fiscal 2017 to fiscal 2018, surveillance inspections of foreign factories fell 10 percent, to 778. This was the second year-over-year decline, after surveillance inspections of foreign factories dropped 9 percent from fiscal 2016 to fiscal 2017, reversing a trend of rising inspections over most of the previous decade.
Excerpt from https://www.bloomberg.com/news/features/2019-01-29/america-s-love-affair-with-cheap-drugs-has-a-hidden-cost?cmpid=BBD020119_WKND&utm_medium=email&utm_source=newsletter&utm_term=190201&utm_campaign=weekendreading
The FDA approved a record 971 generic drugs in the fiscal year ending Sept. 30, according to a report from the accounting firm PricewaterhouseCoopers. That was a 94 percent increase over fiscal 2014, when 500 were approved.
Yet the number of so-called surveillance inspections done globally by the FDA—meant to ensure existing drug-making plants meet U.S. standards—dropped 11 percent, to 1,471, in fiscal 2018 from fiscal 2017. Those inspection numbers also decreased in fiscal 2017, which included Gottlieb’s first few months in office, falling 13 percent from the prior year. The figures were obtained through a public-records request.
Surveillance inspections of just U.S. drug factories declined 11 percent, to 693, from fiscal 2017 to fiscal 2018, the lowest going back for at least a decade, the data show. Such inspections have been falling since 2011, as the agency began focusing more on foreign manufacturers.
Meanwhile, from fiscal 2017 to fiscal 2018, surveillance inspections of foreign factories fell 10 percent, to 778. This was the second year-over-year decline, after surveillance inspections of foreign factories dropped 9 percent from fiscal 2016 to fiscal 2017, reversing a trend of rising inspections over most of the previous decade.
Excerpt from https://www.bloomberg.com/news/features/2019-01-29/america-s-love-affair-with-cheap-drugs-has-a-hidden-cost?cmpid=BBD020119_WKND&utm_medium=email&utm_source=newsletter&utm_term=190201&utm_campaign=weekendreading
From Brookings: UPCOMING EVENT
WEBINAR – The Flint water crisis: Lessons learned
Tuesday, Feb 05, 2019 1:00 PM-2:30 PM EST
Online only
REGISTER FOR WEBCAST here: https://attendee.gotowebinar.com/register/7825849173049604365
The Flint water crisis, involving lead contamination of the city’s drinking water and an outbreak of Legionnaires’ disease, has been on the national radar for years—but there are still unanswered questions. What happened, and how? What are the health, political, and economic implications for the city and its people? How widespread is the lead problem in America’s water supplies? How are water utilities and governments responding? What are the possible solutions to address this public health problem?
Join us on Tuesday, February 5, 1:00-2:30 pm EST for a webinar on these topics. We’ll begin with presentations by Anna Clark (Author, Poisoned City: Flint’s Water and the American Urban Tragedy) on Flint and Douglas Farquhar (Program Director, Environmental Health, National Conference of State Legislatures) on what’s happening in other communities.
The presentations will be followed by a discussion with webinar participants.
WEBINAR – The Flint water crisis: Lessons learned
Tuesday, Feb 05, 2019 1:00 PM-2:30 PM EST
Online only
REGISTER FOR WEBCAST here: https://attendee.gotowebinar.com/register/7825849173049604365
The Flint water crisis, involving lead contamination of the city’s drinking water and an outbreak of Legionnaires’ disease, has been on the national radar for years—but there are still unanswered questions. What happened, and how? What are the health, political, and economic implications for the city and its people? How widespread is the lead problem in America’s water supplies? How are water utilities and governments responding? What are the possible solutions to address this public health problem?
Join us on Tuesday, February 5, 1:00-2:30 pm EST for a webinar on these topics. We’ll begin with presentations by Anna Clark (Author, Poisoned City: Flint’s Water and the American Urban Tragedy) on Flint and Douglas Farquhar (Program Director, Environmental Health, National Conference of State Legislatures) on what’s happening in other communities.
The presentations will be followed by a discussion with webinar participants.
Phil the dog’s answer to Punxatawny Phil the groundhog’s spring weather forecast
Phil the dog believes in the science of global warming. He believes that shifting seasons are directly linked to warmer global temperatures. A slight change in temperature is enough to push the spring thaw earlier, and delay the first frost until later in the fall. These environmental changes will cause many trees and spring wildflowers to bloom earlier than in the past. As a result, winter will be shorter, spring earlier, summer longer, and fall arrives later.
Phil the dog relies on EPA data discussed at http://climatechange.lta.org/climate-impacts/shifting-seasons
Phil the dog believes in the science of global warming. He believes that shifting seasons are directly linked to warmer global temperatures. A slight change in temperature is enough to push the spring thaw earlier, and delay the first frost until later in the fall. These environmental changes will cause many trees and spring wildflowers to bloom earlier than in the past. As a result, winter will be shorter, spring earlier, summer longer, and fall arrives later.
Phil the dog relies on EPA data discussed at http://climatechange.lta.org/climate-impacts/shifting-seasons
Tim Wu disccusses his "Curse of Bigness" book on PBS NewsHour
https://www.pbs.org/newshour/show/why-tech-industry-monopolies-could-be-a-curse-for-society
https://www.pbs.org/newshour/show/why-tech-industry-monopolies-could-be-a-curse-for-society
Competition issues in Health Information Technology
In 2014, Katherine Jones and I wrote about competition policy issues affecting health information technology (HIT) businesses, particularly issues involving difficulties in sharing of electronic patient information among systems of competing companies. See https://www.ftc.gov/system/files/documents/public_comments/2014/03/00020-88806.pdf
A business relevant to such competition issues is Epic Systems, an industry leader in health information technology. The company has been criticized for using proprietary software that puts competitors at a disadvantage because it obstructs sharing of patient data. An effect of reduced competition can be higher prices for users of HIT, such as large hospitals.
Sharing of patient data may be relatively simple among hospitals if they all use Epic proprietary software, but more difficult if one of the hospitals uses different proprietary software of a competitor.
In our earlier article we pointed out that in the past companies using proprietary technologies in other so-called “platform” markets such as computer software have achieved and maintained a dominant position in a developing market by limiting competitor access to their proprietary technology. The U.S. government’s action against Microsoft made such allegations of exclusionary conduct.
We pointed out that exclusionary conduct may be addressed through antitrust enforcement after the fact, as it was in the Microsoft case. But we suggested that a preferable approach is proactive government engagement that avoids the antitrust problem by facilitating and encouraging interoperability among products of competitors in the health information technology (HIT) markets. By “interoperability” we meant the extent to which HIT systems of different manufacturers can exchange data, and interpret that shared data.
To the extent that HIT systems are interoperable, so that HIT systems of different manufacturers can easily exchange data, there is less danger that network effects will lead to the dominance of the market by a single large firm. The consequences include lower prices for consumers of HIT, such as hospitals.
Interoperability in HIT markets has been an important component of announced federal healthcare policy. The U.S. Government has been actively involved in both promoting the use of HIT and encouraging the interoperability of HIT products. The use of HIT has been incentivized by federal legislation and reimbursement policies. A goal of the legislation has been to foster the “development of a nationwide health information technology infrastructure” to promote “a more effective marketplace, greater competition . . . [and] increased consumer choice.”
Federal legislation called on the Secretary of Health and Human Services (“HHS”) to invest in and take an active role in: “(1) Health information technology architecture that will support the nationwide electronic exchange and use of health information in a secure, private, and accurate manner. . . .” and “(5) Promotion of the interoperability of clinical data repositories or registries.”
So, what has happened since 2014?
A review of trade press suggests that the U.S. government has not taken strong steps to promote interoperability standards. The CEO of Epic Systems, Judy Faulkner, recently gave a speech in which she promoted Epic’s role in facilitating interoperability standards. She pointed out that her company’s role in promoting standards filled a gap left by lack of government action. There are no public indications of government antitrust scrutiny.
A recent trade press article by Margaret Rouse discusses the business of today’s Epic Systems in a helpful way. See https://searchhealthit.techtarget.com/definition/Epic-Systems-Corp?vgnextfmt=print
Ms. Rouse explains that Epic Systems remains one of the largest providers of health information technology, used primarily by large U.S. hospitals and health systems to access, organize, store and share electronic medical records. The company has a reputation as both a technological leader and one that comes with an expensive price -- sometimes more than $1 billion -- for its products and related installations.
Ms. Rouse says that since the federal government established electronic health record incentive programs in 2009 to promote the adoption of electronic health records through meaningful use of the technology, Epic has seen its client base grow. In 2017, the Milwaukee Journal Sentinel reported that Epic employed 9,700 people and earned revenue of $2.5 billion in 2016. Epic states that 190 million people across the world use its technology. Meanwhile, Forbes has estimated that at least 40% of the U.S. population has medical data stored on an Epic electronic health records (EHR) system, and Epic's clients include some of the biggest names in healthcare.
KLAS Research concluded in 2017 that Epic had the largest EHR market share in acute care hospitals at 25.8%. Epic's top competitor, Cerner Corp., took 24.6% of the market, showing the close tug of war between the two companies for customers. Other competitors include Allscripts (which in 2017 bought McKesson Corp.'s EHR technology), Meditech and AthenaHealth.
Ms. Rouse tells us that “Due to its influence, product costs and, in some cases, practices, the company is often criticized. One of the chief complaints, historically, has been against its EHR systems' lack of interoperability with other vendors' products. Epic seems to have recognized this problem and is taking steps to change.” Also,”The company was also not as fast as smaller EHR vendors to embrace cloud-based medical records systems.”
A recent American Hospital Association report complains about the continuing need to improve interoperability among HIT systems. See https://www.aha.org/system/files/2019-01/Report01_18_19-Sharing-Data-Saving-Lives_FINAL.pdf
The Report suggests, among other things, there needs to be improvement in “consistent use of standards, common vocabulary and 'rules of the road' to connect information-sharing networks. . . .” That improvement will also “improve the ability to distribute information within and across settings, between providers of care, with individuals and within the marketplace. . . .The end goal is complete data sharing via a non-proprietary, vendor-neutral data exchange platform, similar to how the country is served by cable technology.
According to the Report, “The current standards supporting our information sharing infrastructure are incomplete, implemented inconsistently, and may differ between systems. They may not be up to the task of seamless sharing of information. There is an urgent need to coalesce around improved standards that overcome the significant gaps making communication difficult between systems.”
So, in 2019 is there a continued need for government involvement in setting interoperability standards for HIT systems, despite some industry initiatives that have occurred? Is there a need for continuing antitrust scrutiny? Probably yes. The reasons include the goal of bringing down the costs of HIT to users, such as hospitals, and to the end users -- patients.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
From The New York Times: Mentally Ill Prisoners Are Held Past Release Dates, Lawsuit Claims
New York keeps mentally ill people in prison after they have finished their sentences because of a lack of supportive housing for them, a lawsuit filed on their behalf argues.
https://www.nytimes.com/2019/01/23/nyregion/prisoners-mentally-ill-lawsuit.html
DC's Bread for the City Opens Its Doors to Furloughed Federal Employees and Contractors
January 10, 2019 by BFC in BFC Updates In the Community https://breadforthecity.org/blog-cat/bfc-updates
For nearly 45 years, Bread for the City has shown up for D.C., and D.C. has shown up for us. With help from our community, we assist tens of thousands of D.C. residents living with low income each and every year. As the government shutdown enters its third week, it’s time for us to show up again. We want furloughed workers to know that Bread for the City is here for you, too.
Beginning Monday, January 14, if you are a District of Columbia resident and are a furloughed federal worker or federal contractor currently out of work because of the furlough, you can visit our NW or SE Centers for a five day supply of groceries. In addition, our medical clinic, located in our NW Center is currently accepting new patients. Visit our services page for more information including hours of operation and documents we will need you to bring in.
To current clients: Bread for the City will continue to be here for you too.
But I also need to say something to our federal elected officials — and one in particular. At the heart of what we do is our sense of equity. When we have economic downturns or man-made crises such as this shutdown, people living with low incomes suffer most. One of the reasons this game of chicken is easy for the powers that be is that those in charge don’t suffer. The people who suffer most are the ones who already struggling to get by.
When our leaders make these kinds of decisions, it impacts everyday people. The ripple effect extends far beyond talking points and news cycles. This bickering over billions for a border wall is now threatening food stamps, housing subsidies and more.
But even in these stressful times, there are glimmers of hope, and our hope is always YOU.
To our donors and volunteers: When the government does not meet its obligations to the people, organizations like ours are all the more important. If this shutdown continues and more people have no choice but to seek help from organizations like Bread for the City, our existing resources — particularly the food program — may be pushed to their limit. In these trying times for so many, if you’re able to give just a little more to help your neighbors, please do. Visit https://www.breadforthecity.org/govshutdown.
And if you’re a furloughed worker looking for something positive to do in the midst of this crisis, we’re always looking for volunteers. Visit https://breadforthecity.org/volunteer/ to find out how you can help.
January 10, 2019 by BFC in BFC Updates In the Community https://breadforthecity.org/blog-cat/bfc-updates
For nearly 45 years, Bread for the City has shown up for D.C., and D.C. has shown up for us. With help from our community, we assist tens of thousands of D.C. residents living with low income each and every year. As the government shutdown enters its third week, it’s time for us to show up again. We want furloughed workers to know that Bread for the City is here for you, too.
Beginning Monday, January 14, if you are a District of Columbia resident and are a furloughed federal worker or federal contractor currently out of work because of the furlough, you can visit our NW or SE Centers for a five day supply of groceries. In addition, our medical clinic, located in our NW Center is currently accepting new patients. Visit our services page for more information including hours of operation and documents we will need you to bring in.
To current clients: Bread for the City will continue to be here for you too.
But I also need to say something to our federal elected officials — and one in particular. At the heart of what we do is our sense of equity. When we have economic downturns or man-made crises such as this shutdown, people living with low incomes suffer most. One of the reasons this game of chicken is easy for the powers that be is that those in charge don’t suffer. The people who suffer most are the ones who already struggling to get by.
When our leaders make these kinds of decisions, it impacts everyday people. The ripple effect extends far beyond talking points and news cycles. This bickering over billions for a border wall is now threatening food stamps, housing subsidies and more.
But even in these stressful times, there are glimmers of hope, and our hope is always YOU.
To our donors and volunteers: When the government does not meet its obligations to the people, organizations like ours are all the more important. If this shutdown continues and more people have no choice but to seek help from organizations like Bread for the City, our existing resources — particularly the food program — may be pushed to their limit. In these trying times for so many, if you’re able to give just a little more to help your neighbors, please do. Visit https://www.breadforthecity.org/govshutdown.
And if you’re a furloughed worker looking for something positive to do in the midst of this crisis, we’re always looking for volunteers. Visit https://breadforthecity.org/volunteer/ to find out how you can help.
Rising Drug Prices Linked to Older Products, Not Just Newer, Better Medications
PITTSBURGH (Jan. 7, 2019) – It’s no secret that drug prices are increasing, but to what extent are rising costs explained by the advent of newer, better drugs? A study from the University of Pittsburgh and the UPMC Center for High-Value Health Care found that new drugs entering the market do drive up prices, but drug companies are also hiking prices on older drugs.
The paper, published in the January issue of Health Affairs, shows that for specialty and generic drugs, new product entry accounted for most of the rising costs, whereas for brand-name drugs, existing products explained most of the cost increases.
“It makes sense to pay more for new drugs because sometimes new drugs are more effective, safer or treat a new disease you didn’t have a treatment for. Sometimes new drugs do bring more value,” said lead author Inmaculada Hernandez, Ph.D., assistant professor at the Pitt School of Pharmacy. “But the high year-over-year increases in costs of existing products do not reflect improved value.”
The researchers examined the list price of tens of thousands of drug codes from a national database between 2005 and 2016 and UPMC Health Plan pharmacy claims over the same time period. Drugs were considered “new” for the first three years they were available, or in the case of generics, the first three years after patent expiration.
What they saw was that each year the price of brand-name oral medications increased by about 9 percent – nearly five times the rate of general inflation over the same time period – and the price of brand-name injectables increased by 15 percent. In both cases, soaring prices were overwhelmingly attributable to existing drugs.
For instance, the list price for Sanofi’s Lantus brand insulin increased by 49 percent in 2014. Lantus had been on the market for more than a decade.
“These types of insulin have been around for a while,” Hernandez said. “Whereas the original patent for Lantus expired in 2015, dozens of secondary patents prevent competition, and it is this lack of competition that allows manufacturers to keep increasing prices much faster than inflation.”
Excerpt from: https://www.upmchealthplan.com/pdf/ReleasePdf/2019_01_07.html
Justice Department’s Reversal on Online Gambling Tracked Memo From Adelson Lobbyists
“The legal reasoning behind the Justice Department’s unusual reversal this week of an opinion that paved the way for online gambling hewed closely to arguments made by lobbyists for casino magnate and top Republican donor Sheldon Adelson. In April 2017, one of the lobbyists sent a memo to top officials in the Justice Department, arguing that a 2011 opinion that benefited online gambling was wrong.
“Officials in the department’s Criminal Division, in turn, forwarded it to the Office of Legal Counsel, which had issued the opinion, and asked attorneys there to re-examine their stance that a law on the books for decades didn’t prohibit online gambling, according to documents and interviews with people familiar with the matter. ... The department’s new position was a victory for Mr. Adelson, who has poured millions into a multiyear lobbying campaign on the matter.”
WSJ https://www.wsj.com/articles/justice-departments-reversal-on-online-gambling-tracked-memo-from-adelson-lobbyists-11547854137?mod=hp_lead_pos4 (paywall) WSJ’S BYRON TAU in D.C. and ALEXANDRA BERZON in Los Angeles:
“The legal reasoning behind the Justice Department’s unusual reversal this week of an opinion that paved the way for online gambling hewed closely to arguments made by lobbyists for casino magnate and top Republican donor Sheldon Adelson. In April 2017, one of the lobbyists sent a memo to top officials in the Justice Department, arguing that a 2011 opinion that benefited online gambling was wrong.
“Officials in the department’s Criminal Division, in turn, forwarded it to the Office of Legal Counsel, which had issued the opinion, and asked attorneys there to re-examine their stance that a law on the books for decades didn’t prohibit online gambling, according to documents and interviews with people familiar with the matter. ... The department’s new position was a victory for Mr. Adelson, who has poured millions into a multiyear lobbying campaign on the matter.”
WSJ https://www.wsj.com/articles/justice-departments-reversal-on-online-gambling-tracked-memo-from-adelson-lobbyists-11547854137?mod=hp_lead_pos4 (paywall) WSJ’S BYRON TAU in D.C. and ALEXANDRA BERZON in Los Angeles:
Anatomy of a big- payout class action:
$2.3M Fee Award in $6.9M Citigroup ERISA Class Action
January 7, 2019 | Posted in : Class Action, Expenses / Costs, Fee Award
A recent Law 360 story by Emily Brill, “Attys Get $2.3M Fee for $6.9M Citigroup ERISA Class Deal,” reports that a New York federal judge has awarded $2.3 million to the attorneys for a class of over 300,000 Citigroup Inc. 401(k) plan participants who negotiated a $6.9 million settlement in a long-running Employee Retirement Income Security Act suit in August. U.S. District Judge Sidney Stein granted final approval to the settlement and fee award closing the book on claims that a Citigroup committee stuffed the company’s 401(k) plan with Citigroup-affiliated funds even though other funds charged lower fees.
The case has been pending since 2007, and its closure came as a relief to class attorney James A. Moore of McTigue Law LLP. “The case was hard-fought for over a decade, and we think the result is an excellent one for plan participants,” Moore said. “Citigroup stopped offering through its 401(k) plan the high cost proprietary funds that were the subject of the lawsuit.” Moore added that he thinks the nearly $7 million recovery “sends a message to other employers that, under the law, they must manage retirement plans in the best interest of employees.”
The Citigroup 401(k) Plan Investment Committee and the class — a group of current and former Citigroup employees — told Judge Stein in August that they had reached a deal to end the case. Soon, Citigroup workers, former workers and retirees who invested in certain funds in the 401(k) plan between Oct. 18, 2001, and Dec. 1, 2005, will be notified of the money headed their way. Judge Stein signed off on the settlement notice.
He also signed an order awarding $2.3 million to the plaintiffs’ attorneys and $15,000 to each of the two class representatives. The order also approved devoting $374,100 of the settlement to case-related expenses, leaving roughly $4.2 million left for the class after all the deductions — attorneys’ fees, class representative fees and expenses — are made.
The settlement notice tells Citigroup workers that the class’s three attorneys and two representatives “have devoted many hours to investigating the claims, bringing this case, and pursuing it for almost 11 years” and that the attorneys “have not been paid for their time and expenses while the case has been pending.”
The class sued Citigroup and its 401(k) plan committee in October 2007, accusing them of putting the bank’s interests ahead of workers’ when stocking the employee retirement plan. The company and plan committee allegedly failed to remove or replace subpar, expensive Citigroup funds from the 401(k) plan’s lineup, allowing Citigroup to reap “substantial revenues” at plan participants’ expense while violating the Employee Retirement Income Security Act, which requires fiduciaries to make decisions in participants’ best interests, according to the complaint.
Citigroup was dropped as a defendant in 2010, leaving the 401(k) investment committee, another committee called the Benefit Plans Investment Committee of Citigroup Inc. and various individual committee members and officers to defend the suit. The class won certification in November 2017. Moore said Monday that the class has more than 300,000 members.
The case is Leber et al. v. The Citigroup 401(k) Plan Investment Committee et al., case number 1:07-cv-09329, in the U.S. District Court for the Southern District of New York.
Article source: http://www.thenalfa.org/blog/2-3m-fee-award-in-6-9m-citigroup-erisa-class-action/
$2.3M Fee Award in $6.9M Citigroup ERISA Class Action
January 7, 2019 | Posted in : Class Action, Expenses / Costs, Fee Award
A recent Law 360 story by Emily Brill, “Attys Get $2.3M Fee for $6.9M Citigroup ERISA Class Deal,” reports that a New York federal judge has awarded $2.3 million to the attorneys for a class of over 300,000 Citigroup Inc. 401(k) plan participants who negotiated a $6.9 million settlement in a long-running Employee Retirement Income Security Act suit in August. U.S. District Judge Sidney Stein granted final approval to the settlement and fee award closing the book on claims that a Citigroup committee stuffed the company’s 401(k) plan with Citigroup-affiliated funds even though other funds charged lower fees.
The case has been pending since 2007, and its closure came as a relief to class attorney James A. Moore of McTigue Law LLP. “The case was hard-fought for over a decade, and we think the result is an excellent one for plan participants,” Moore said. “Citigroup stopped offering through its 401(k) plan the high cost proprietary funds that were the subject of the lawsuit.” Moore added that he thinks the nearly $7 million recovery “sends a message to other employers that, under the law, they must manage retirement plans in the best interest of employees.”
The Citigroup 401(k) Plan Investment Committee and the class — a group of current and former Citigroup employees — told Judge Stein in August that they had reached a deal to end the case. Soon, Citigroup workers, former workers and retirees who invested in certain funds in the 401(k) plan between Oct. 18, 2001, and Dec. 1, 2005, will be notified of the money headed their way. Judge Stein signed off on the settlement notice.
He also signed an order awarding $2.3 million to the plaintiffs’ attorneys and $15,000 to each of the two class representatives. The order also approved devoting $374,100 of the settlement to case-related expenses, leaving roughly $4.2 million left for the class after all the deductions — attorneys’ fees, class representative fees and expenses — are made.
The settlement notice tells Citigroup workers that the class’s three attorneys and two representatives “have devoted many hours to investigating the claims, bringing this case, and pursuing it for almost 11 years” and that the attorneys “have not been paid for their time and expenses while the case has been pending.”
The class sued Citigroup and its 401(k) plan committee in October 2007, accusing them of putting the bank’s interests ahead of workers’ when stocking the employee retirement plan. The company and plan committee allegedly failed to remove or replace subpar, expensive Citigroup funds from the 401(k) plan’s lineup, allowing Citigroup to reap “substantial revenues” at plan participants’ expense while violating the Employee Retirement Income Security Act, which requires fiduciaries to make decisions in participants’ best interests, according to the complaint.
Citigroup was dropped as a defendant in 2010, leaving the 401(k) investment committee, another committee called the Benefit Plans Investment Committee of Citigroup Inc. and various individual committee members and officers to defend the suit. The class won certification in November 2017. Moore said Monday that the class has more than 300,000 members.
The case is Leber et al. v. The Citigroup 401(k) Plan Investment Committee et al., case number 1:07-cv-09329, in the U.S. District Court for the Southern District of New York.
Article source: http://www.thenalfa.org/blog/2-3m-fee-award-in-6-9m-citigroup-erisa-class-action/
Question To what extent is pharmaceutical industry marketing of opioids to physicians associated with subsequent mortality from prescription opioid overdoses?
Findings In this population-based, cross-sectional study, $39.7 million in opioid marketing was targeted to 67 507 physicians across 2208 US counties between August 1, 2013, and December 31, 2015. Increased county-level opioid marketing was associated with elevated overdose mortality 1 year later, an association mediated by opioid prescribing rates; per capita, the number of marketing interactions with physicians demonstrated a stronger association with mortality than the dollar value of marketing.
Meaning The potential role of pharmaceutical industry marketing in contributing to opioid prescribing and mortality from overdoses merits ongoing examination.
For full report: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2720914
Findings In this population-based, cross-sectional study, $39.7 million in opioid marketing was targeted to 67 507 physicians across 2208 US counties between August 1, 2013, and December 31, 2015. Increased county-level opioid marketing was associated with elevated overdose mortality 1 year later, an association mediated by opioid prescribing rates; per capita, the number of marketing interactions with physicians demonstrated a stronger association with mortality than the dollar value of marketing.
Meaning The potential role of pharmaceutical industry marketing in contributing to opioid prescribing and mortality from overdoses merits ongoing examination.
For full report: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2720914
from Public Citizen Consumer Law & Policy Blog
CFPB and NY settle with Sterling Jewelers over enrolling customers in credit cards without the customers' consent
Posted: 17 Jan 2019 01:05 PM PST
The State of New York and the Consumer Financial Protection Bureau (which is not shut down) yesterday settled claims against Sterling Jewelers, based on findings that that the company violated the Consumer Financial Protection Act of 2010 by opening store credit-card accounts without customer consent; enrolling customers in payment-protection insurance without their consent; and misrepresenting to consumers the financing terms associated with the credit-card accounts. The CFPB also found Truth in Lending Act violations, based on Sterling signing customers up for credit-card accounts without having received an oral or written request or application from them.
Under the settlement, the company will pay a $10 million civil money penalty to the CFPB and a $1 million civil money penalty to New York. The settlement also includes injunctive relief designed to prevent the continuation of the wrongdoing.
The consent order is here. https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/bcfp_sterling-jewelers_proposed-consent-order.pdf
So apparently Wells Fargo is not the only company to sign people up for accounts without consent. The scope of wrongdoing by Wells Fargo, and the penalty, were of course much larger.
Source: https://pubcit.typepad.com/clpblog/2019/01/cfpb-and-ny-settle-with-sterling-jewelers-over-enrolling-customers-in-credit-cards-without-the-custo.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
CFPB and NY settle with Sterling Jewelers over enrolling customers in credit cards without the customers' consent
Posted: 17 Jan 2019 01:05 PM PST
The State of New York and the Consumer Financial Protection Bureau (which is not shut down) yesterday settled claims against Sterling Jewelers, based on findings that that the company violated the Consumer Financial Protection Act of 2010 by opening store credit-card accounts without customer consent; enrolling customers in payment-protection insurance without their consent; and misrepresenting to consumers the financing terms associated with the credit-card accounts. The CFPB also found Truth in Lending Act violations, based on Sterling signing customers up for credit-card accounts without having received an oral or written request or application from them.
Under the settlement, the company will pay a $10 million civil money penalty to the CFPB and a $1 million civil money penalty to New York. The settlement also includes injunctive relief designed to prevent the continuation of the wrongdoing.
The consent order is here. https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/bcfp_sterling-jewelers_proposed-consent-order.pdf
So apparently Wells Fargo is not the only company to sign people up for accounts without consent. The scope of wrongdoing by Wells Fargo, and the penalty, were of course much larger.
Source: https://pubcit.typepad.com/clpblog/2019/01/cfpb-and-ny-settle-with-sterling-jewelers-over-enrolling-customers-in-credit-cards-without-the-custo.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
Attorney General nominee William Barr testifies on antitrust
Excerpt from article By TED JOHNSON
WASHINGTON — William Barr, President Donald Trump’s nominee for the next attorney general, said that it was “more important” that the Department of Justice get involved in questions of how effective antitrust enforcers have been in protecting competition amid the growth of tech giants.
“I would like to weigh in on some of these issues,” Barr said at his confirmation hearing on Tuesday, adding that privacy and data gathering were other areas of concern.
Earlier in the day, Barr said he is “sort of interested in stepping back and reassessing or learning more about how the Antitrust Division has been functioning and what their priorities are.”
“I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of antitrust enforcers.”
He added that there was a way “to win in that marketplace without violating antitrust laws, but I want to find out more about that dynamic.”
Barr expressed his concerns amid increased scrutiny in Washington over the growth of tech companies like Facebook, Google, and Amazon. The Federal Trade Commission has been examining the effectiveness of antitrust laws in a series of hearings, but it is unclear if that will ultimately lead to any changes in legislation.
Barr also said that he would “absolutely” recuse himself from the Justice Department’s antitrust lawsuit against the AT&T-Time Warner merger. A three-judge panel is considering the the DOJ’s appeal.
Sen. Amy Klobuchar (D-Minn.) asked Barr about his prior criticism of the Justice Department’s decision to try to block the transaction. When he was a board member of Time Warner, Barr wrote an affidavit in support of AT&T-Time Warner’s contention that the merger was politically motivated. He wrote in the affidavit that cited Trump’s “prior public animus toward this merger” as a reason many would view the lawsuit as political motivated.
But at the confirmation hearing, Barr toned down his criticsm. He said that his affidavit “speaks for itself,” and that he was expressing concern that the Antitrust Division “wasn’t engaging in some of our arguments…I am not sure why they acted the way they did.”
Makan Delrahim, the chief of the DOJ’s Antitrust Division, has denied that the White House influenced the decision to challenge the merger.
from https://variety.com/2019/politics/news/william-barr-antitrust-impact-tech-giants-1203108418/
Excerpt from article By TED JOHNSON
WASHINGTON — William Barr, President Donald Trump’s nominee for the next attorney general, said that it was “more important” that the Department of Justice get involved in questions of how effective antitrust enforcers have been in protecting competition amid the growth of tech giants.
“I would like to weigh in on some of these issues,” Barr said at his confirmation hearing on Tuesday, adding that privacy and data gathering were other areas of concern.
Earlier in the day, Barr said he is “sort of interested in stepping back and reassessing or learning more about how the Antitrust Division has been functioning and what their priorities are.”
“I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of antitrust enforcers.”
He added that there was a way “to win in that marketplace without violating antitrust laws, but I want to find out more about that dynamic.”
Barr expressed his concerns amid increased scrutiny in Washington over the growth of tech companies like Facebook, Google, and Amazon. The Federal Trade Commission has been examining the effectiveness of antitrust laws in a series of hearings, but it is unclear if that will ultimately lead to any changes in legislation.
Barr also said that he would “absolutely” recuse himself from the Justice Department’s antitrust lawsuit against the AT&T-Time Warner merger. A three-judge panel is considering the the DOJ’s appeal.
Sen. Amy Klobuchar (D-Minn.) asked Barr about his prior criticism of the Justice Department’s decision to try to block the transaction. When he was a board member of Time Warner, Barr wrote an affidavit in support of AT&T-Time Warner’s contention that the merger was politically motivated. He wrote in the affidavit that cited Trump’s “prior public animus toward this merger” as a reason many would view the lawsuit as political motivated.
But at the confirmation hearing, Barr toned down his criticsm. He said that his affidavit “speaks for itself,” and that he was expressing concern that the Antitrust Division “wasn’t engaging in some of our arguments…I am not sure why they acted the way they did.”
Makan Delrahim, the chief of the DOJ’s Antitrust Division, has denied that the White House influenced the decision to challenge the merger.
from https://variety.com/2019/politics/news/william-barr-antitrust-impact-tech-giants-1203108418/
The NTEU lawsuit on behalf of unpaid federal workers--cite to Complaint
Excerpt from filed Complaint:
This is a collective action lawsuit, brought by Eleazar Avalos and James Davis, on behalf of themselves and all similarly situated individuals. The complaint makes two central allegations. First, it alleges that the government’s failure to timely pay overtime wages earned on December 22, 2018, to Fair Labor Standards Act (FLSA) nonexempt employees like Mr. Avalos and Mr. Davis is illegal. Second, the complaint further alleges an FLSA violation based upon the expected government failure to pay a minimum wage and overtime wages earned for the pay period beginning December 23, 2018 and ending on January 5, 2019. They seek payment of the owed wages, an equal amount of liquidated damages, and other appropriate remedies.
The Complaint is here: https://www.nteu.org/~/media/Files/nteu/docs/public/letters/2018/nteu-shutdown-flsa-complaint.pdf?la=en
Excerpt from filed Complaint:
This is a collective action lawsuit, brought by Eleazar Avalos and James Davis, on behalf of themselves and all similarly situated individuals. The complaint makes two central allegations. First, it alleges that the government’s failure to timely pay overtime wages earned on December 22, 2018, to Fair Labor Standards Act (FLSA) nonexempt employees like Mr. Avalos and Mr. Davis is illegal. Second, the complaint further alleges an FLSA violation based upon the expected government failure to pay a minimum wage and overtime wages earned for the pay period beginning December 23, 2018 and ending on January 5, 2019. They seek payment of the owed wages, an equal amount of liquidated damages, and other appropriate remedies.
The Complaint is here: https://www.nteu.org/~/media/Files/nteu/docs/public/letters/2018/nteu-shutdown-flsa-complaint.pdf?la=en
NYT opinion: Opinion
Can States Fix the Disaster of American Health Care?
The governor of California has proposed some big ideas. Who knows whether he can pull them off, but there’s reason for hope.
By Elisabeth Rosenthal
See the Op-Ed at Opinion https://www.nytimes.com/pages/opinion/index.html
Can States Fix the Disaster of American Health Care?
The governor of California has proposed some big ideas. Who knows whether he can pull them off, but there’s reason for hope.
By Elisabeth Rosenthal
See the Op-Ed at Opinion https://www.nytimes.com/pages/opinion/index.html
From USDOJ:
Reconsidering Whether the Wire Act Applies to Non-Sports Gambling
This [USDOJ] Office concluded in 2011 that the prohibitions of the Wire Act in 18 U.S.C. § 1084(a) are limited to sports gambling. Having been asked to reconsider, we now conclude that the statutory prohibitions are not uniformly limited to gambling on sporting events or contests. Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting “information assisting in the placing of bets or wagers on any sporting event or contest,” is so limited. The other prohibitions apply to non-sportsrelated betting or wagering that satisfy the other elements of section 1084(a)
Full USDOJ Statement: https://www.justice.gov/olc/file/1121531 [the URL is there at the bottom of the page, despite the shut down warning]
Reconsidering Whether the Wire Act Applies to Non-Sports Gambling
This [USDOJ] Office concluded in 2011 that the prohibitions of the Wire Act in 18 U.S.C. § 1084(a) are limited to sports gambling. Having been asked to reconsider, we now conclude that the statutory prohibitions are not uniformly limited to gambling on sporting events or contests. Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting “information assisting in the placing of bets or wagers on any sporting event or contest,” is so limited. The other prohibitions apply to non-sportsrelated betting or wagering that satisfy the other elements of section 1084(a)
Full USDOJ Statement: https://www.justice.gov/olc/file/1121531 [the URL is there at the bottom of the page, despite the shut down warning]
THE FTC THINKS YOU PAY TOO MUCH FOR SMARTPHONES. THEY BLAME QUALCOMM
Excerpt from: https://www.wired.com/story/ftc-thinks-you-pay-too-much-smartphones-heres-why/?
Qualcomm CEO Steven Mollenkopf told a federal court Friday that the company requires buyers of its chips to also license its patents, but it argued that it does so for legitimate business reasons.
THE FEDERAL TRADE Commission thinks you're paying too much for smartphones. But it doesn’t blame handset makers like Apple and Samsung or wireless carriers. Instead, the agency blames Qualcomm, which owns key wireless technology patents and makes chips that can be found in most high-end Android phones and many iPhones.
Qualcomm charges companies like Apple a set percentage of the total price of a phone in exchange for the right to use its technology, according to the antitrust suit filed by the FTC. The percentages vary, but Qualcomm generally charges 5 percent of the value of a device, up to a maximum of about $20 per device, according to a legal brief filed by Qualcomm.
Phone makers like Apple and Huawei argue that Qualcomm demands a larger cut of each phone sale than is fair, but that they pay because Qualcomm essentially threatens to cut off their supply of important wireless chips if they don’t. The FTC describes this as a "tax" on cellular phones that drives up prices and hurts competition.
In court Friday, Apple executive Tony Blevins accused the chipmaker of strong-arm tactics. Blevins said that during negotiations in 2013, Qualcomm president Cristiano Amon told him, "I'm your only choice, and I know Apple can afford to pay it,” CNET reports.
Excerpt from: https://www.wired.com/story/ftc-thinks-you-pay-too-much-smartphones-heres-why/?
Qualcomm CEO Steven Mollenkopf told a federal court Friday that the company requires buyers of its chips to also license its patents, but it argued that it does so for legitimate business reasons.
THE FEDERAL TRADE Commission thinks you're paying too much for smartphones. But it doesn’t blame handset makers like Apple and Samsung or wireless carriers. Instead, the agency blames Qualcomm, which owns key wireless technology patents and makes chips that can be found in most high-end Android phones and many iPhones.
Qualcomm charges companies like Apple a set percentage of the total price of a phone in exchange for the right to use its technology, according to the antitrust suit filed by the FTC. The percentages vary, but Qualcomm generally charges 5 percent of the value of a device, up to a maximum of about $20 per device, according to a legal brief filed by Qualcomm.
Phone makers like Apple and Huawei argue that Qualcomm demands a larger cut of each phone sale than is fair, but that they pay because Qualcomm essentially threatens to cut off their supply of important wireless chips if they don’t. The FTC describes this as a "tax" on cellular phones that drives up prices and hurts competition.
In court Friday, Apple executive Tony Blevins accused the chipmaker of strong-arm tactics. Blevins said that during negotiations in 2013, Qualcomm president Cristiano Amon told him, "I'm your only choice, and I know Apple can afford to pay it,” CNET reports.
You pay $4 for a cup of coffee, but farmers earn less than a cent a cup
* A crisis is brewing after green coffee prices slide
* Calls for more value to be added in producing countries
Excerpts from article by Aaron Maasho, Nigel Hunt
Now, a slump in global coffee prices to their lowest in nearly 13 years in September is raising questions about whether it’s worth growing beans at all in some of the traditional coffee heartlands of Central America, Colombia and Ethiopia.
The industry has seen a wave of acquisitions as companies such as Nestle, JAB Holding and Coca-Cola spend billions to boost their market share.
For struggling farmers, though, times are tough. Growers around the world have warned coffee company executives in the West of a growing “social catastrophe”, unless they can help to raise farmers’ incomes.
In a letter last year to chief executives at companies such as Starbucks, Jacobs Douwe Egberts (JDE) and Nestle, a group representing growers in more than 30 countries said there was a risk farms would be abandoned, fuelling social and political unrest as well as more illegal migration.
Some companies are responding. Starbucks, for example, has committed $20 million to help smallholders they do business with in Central America until coffee prices rise above their cost of production. “For us that is an initial step, acknowledging we need to do something helpful in the near term in the countries that need it most,” said Michelle Burns, head of coffee at Starbucks, which buys about 3 percent of the world’s coffee.
One problem for Ethiopian farmers is that most of their coffee is exported in bulk as green, unroasted beans, with most of the processes that add the greatest value taking place afterwards in the countries that consume the coffee.
“There hasn’t been a really significant change in how coffee has been transported, purchased or produced in many decades. It has always just been extracted from the country,” said Rob Terenzi, co-founder of Vega Coffee in the United States.
Fair Trade arrangements for farmers are seen by Terenzi and some other observers as insufficient.
See article at https://www.reuters.com/article/coffee-farmers/coffee-price-slump-leaves-farmers-earning-less-than-a-cent-a-cup-idUSL8N1YJ4D2?te=1&nl=dealbook&emc=edit_dk_20190115
* A crisis is brewing after green coffee prices slide
* Calls for more value to be added in producing countries
Excerpts from article by Aaron Maasho, Nigel Hunt
Now, a slump in global coffee prices to their lowest in nearly 13 years in September is raising questions about whether it’s worth growing beans at all in some of the traditional coffee heartlands of Central America, Colombia and Ethiopia.
The industry has seen a wave of acquisitions as companies such as Nestle, JAB Holding and Coca-Cola spend billions to boost their market share.
For struggling farmers, though, times are tough. Growers around the world have warned coffee company executives in the West of a growing “social catastrophe”, unless they can help to raise farmers’ incomes.
In a letter last year to chief executives at companies such as Starbucks, Jacobs Douwe Egberts (JDE) and Nestle, a group representing growers in more than 30 countries said there was a risk farms would be abandoned, fuelling social and political unrest as well as more illegal migration.
Some companies are responding. Starbucks, for example, has committed $20 million to help smallholders they do business with in Central America until coffee prices rise above their cost of production. “For us that is an initial step, acknowledging we need to do something helpful in the near term in the countries that need it most,” said Michelle Burns, head of coffee at Starbucks, which buys about 3 percent of the world’s coffee.
One problem for Ethiopian farmers is that most of their coffee is exported in bulk as green, unroasted beans, with most of the processes that add the greatest value taking place afterwards in the countries that consume the coffee.
“There hasn’t been a really significant change in how coffee has been transported, purchased or produced in many decades. It has always just been extracted from the country,” said Rob Terenzi, co-founder of Vega Coffee in the United States.
Fair Trade arrangements for farmers are seen by Terenzi and some other observers as insufficient.
See article at https://www.reuters.com/article/coffee-farmers/coffee-price-slump-leaves-farmers-earning-less-than-a-cent-a-cup-idUSL8N1YJ4D2?te=1&nl=dealbook&emc=edit_dk_20190115
A Pennsylvania federal judge issued a nationwide injunction last Monday blocking Trump administration carve-outs to the Affordable Care Act's birth control mandate from taking effect
From the Opinion:
Plaintiffs, the Commonwealth of Pennsylvania and the State of New Jersey (collectively “the States”), have sued the United States of America, President Donald J. Trump, the United States Secretary of Health and Human Services Alex M. Azar II, the United States Secretary of the Treasury Steven T. Mnuchin, and the United States Secretary of Labor Rene Alexander Acosta in their official capacities, as well as each of their agencies (collectively “Defendants”), seeking to enjoin enforcement of two Final Rules that grant exemptions to the Affordable Care Act’s requirement that health plans cover women’s preventive services. The Final Rules “finalize” two Interim Final Rules, which Defendants issued in October 2017 and which this Court enjoined soon thereafter, see Pennsylvania v. Trump, 281 F. Supp.3d 553, 585 (E.D. Pa. 2017). On November 15, 2018, while their appeal of that preliminary injunction was pending, Defendants promulgated the Final Rules currently before the Court. The States move to enjoin enforcement of the Final Rules arguing that, like the IFRs before them, the Final Rules violate a variety of constitutional and statutory provisions. For the reasons set forth below, Plaintiffs’ Case 2:17-cv-04540-WB Document 136 Filed 01/14/19 Page 2 of 65 3 Second Motion for a Preliminary Injunction shall be granted.
From the Order:
ORDERED that Defendants Alex M. Azar II, as Secretary of the United States Department of Health and Human Service; the United States Department of Health Case 2:17-cv-04540-WB Document 135 Filed 01/14/19 Page 1 of 2 2 and Human Services; Steven T. Mnuchin, as Secretary of the United States Department of Treasury; the United States Department of Treasury; Rene Alexander Acosta, as Secretary of the United States Department of Labor; and the United States Department of Labor;1 and their officers, agents, servants, employees, attorneys, designees, and subordinates, as well as any person acting in concert or participation with them, are hereby ENJOINED from enforcing the following Final Rules across the Nation, pending further order of this Court: 1. Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,536 (Nov. 15, 2018); and 2. Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,592 (Nov. 15, 2018).
The Order and Opinion are here:
https://www.attorneygeneral.gov/wp-content/uploads/2019/01/2019-01-14-Order.pdf
https://www.courthousenews.com/wp-content/uploads/2019/01/injunction-opinion.pdf
From the Opinion:
Plaintiffs, the Commonwealth of Pennsylvania and the State of New Jersey (collectively “the States”), have sued the United States of America, President Donald J. Trump, the United States Secretary of Health and Human Services Alex M. Azar II, the United States Secretary of the Treasury Steven T. Mnuchin, and the United States Secretary of Labor Rene Alexander Acosta in their official capacities, as well as each of their agencies (collectively “Defendants”), seeking to enjoin enforcement of two Final Rules that grant exemptions to the Affordable Care Act’s requirement that health plans cover women’s preventive services. The Final Rules “finalize” two Interim Final Rules, which Defendants issued in October 2017 and which this Court enjoined soon thereafter, see Pennsylvania v. Trump, 281 F. Supp.3d 553, 585 (E.D. Pa. 2017). On November 15, 2018, while their appeal of that preliminary injunction was pending, Defendants promulgated the Final Rules currently before the Court. The States move to enjoin enforcement of the Final Rules arguing that, like the IFRs before them, the Final Rules violate a variety of constitutional and statutory provisions. For the reasons set forth below, Plaintiffs’ Case 2:17-cv-04540-WB Document 136 Filed 01/14/19 Page 2 of 65 3 Second Motion for a Preliminary Injunction shall be granted.
From the Order:
ORDERED that Defendants Alex M. Azar II, as Secretary of the United States Department of Health and Human Service; the United States Department of Health Case 2:17-cv-04540-WB Document 135 Filed 01/14/19 Page 1 of 2 2 and Human Services; Steven T. Mnuchin, as Secretary of the United States Department of Treasury; the United States Department of Treasury; Rene Alexander Acosta, as Secretary of the United States Department of Labor; and the United States Department of Labor;1 and their officers, agents, servants, employees, attorneys, designees, and subordinates, as well as any person acting in concert or participation with them, are hereby ENJOINED from enforcing the following Final Rules across the Nation, pending further order of this Court: 1. Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,536 (Nov. 15, 2018); and 2. Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,592 (Nov. 15, 2018).
The Order and Opinion are here:
https://www.attorneygeneral.gov/wp-content/uploads/2019/01/2019-01-14-Order.pdf
https://www.courthousenews.com/wp-content/uploads/2019/01/injunction-opinion.pdf
NYT: Gavin Newsom dives into the highly charged debate over prescription drug prices in his first week as California’s governor
His idea: Find strength in numbers. Within hours of taking office on Monday, Mr. Newsom signed an executive order proposing a plan that would allow California to directly negotiate with drug manufacturers.
The state would bring to the bargaining table not just the 13 million beneficiaries of Medi-Cal (California’s version of Medicaid), but also other state agencies that purchase drugs, including coverage for state workers and prisoners. Down the road, the plan could possibly allow private insurers and employers to join in the savings.
“We think this is a significant step forward,” Mr. Newsom said in a video address. “It’s the right thing to do, and I recognize deeply the anxiety so many of you feel around the issues related to the cost of prescription drugs, and I hope California’s efforts here can lead the way for other states to consider the same.”
https://www.nytimes.com/2019/01/11/health/drug-prices-california.html
His idea: Find strength in numbers. Within hours of taking office on Monday, Mr. Newsom signed an executive order proposing a plan that would allow California to directly negotiate with drug manufacturers.
The state would bring to the bargaining table not just the 13 million beneficiaries of Medi-Cal (California’s version of Medicaid), but also other state agencies that purchase drugs, including coverage for state workers and prisoners. Down the road, the plan could possibly allow private insurers and employers to join in the savings.
“We think this is a significant step forward,” Mr. Newsom said in a video address. “It’s the right thing to do, and I recognize deeply the anxiety so many of you feel around the issues related to the cost of prescription drugs, and I hope California’s efforts here can lead the way for other states to consider the same.”
https://www.nytimes.com/2019/01/11/health/drug-prices-california.html
The Supreme Court has declined to hear an appeal from ExxonMobil regarding Massachusetts Attorney General Maura Healey’s climate change investigation
The Court’s decision requiring production of documents could have implications beyond the state of Massachusetts as Exxon is forced to hand over documents detailing what it knew about climate change and when.
Healey isn't alone in investigating ExxonMobil. In October, former Democratic New York Attorney General Barbara Underwood announced a lawsuit against Exxon Mobil alleging the company misled investors regarding the risk that climate change regulations posed to its business. The probe had been initiated by her predecessor, former Democratic New York Attorney General Eric Schneiderman.
Other States are potential litigants against ExxonMobil.
To find court filings and documents related to the Mass. AGO's investigation of Exxon Mobil: https://www.mass.gov/lists/attorney-generals-office-exxon-investigation
The Court’s decision requiring production of documents could have implications beyond the state of Massachusetts as Exxon is forced to hand over documents detailing what it knew about climate change and when.
Healey isn't alone in investigating ExxonMobil. In October, former Democratic New York Attorney General Barbara Underwood announced a lawsuit against Exxon Mobil alleging the company misled investors regarding the risk that climate change regulations posed to its business. The probe had been initiated by her predecessor, former Democratic New York Attorney General Eric Schneiderman.
Other States are potential litigants against ExxonMobil.
To find court filings and documents related to the Mass. AGO's investigation of Exxon Mobil: https://www.mass.gov/lists/attorney-generals-office-exxon-investigation
From Elizabeth Warren's letter to Comerica on direct deposit fraud issues:
I am writing to seek information regarding security breaches in Comerica's Direct Express debit card program which led to hundreds of Americans becoming victims of fraud when their Social Security, disability, or other federal benefit payments were stolen. This program was managed by Comerica via the now discontinued Direct Express Cardless Benefit Access Service.
Complaints from my constituents, confirmed by detailed reporting in the American Banker, described your company's security vulnerabilities, your mismanaged responses to data breaches, and your misleading and cruel customer service tactics when harmed consumers sought help. I am particularly concerned about the lack of transparency about the security breaches and subsequent fraud schemes that compromised Americans' federal benefits.
The Department of Treasury partners with Comerica and other financial agents to distribute monthly federal benefit payments on behalf of the Social Security Administration, the VA, and at least five other federal agencies. 1 Comerica has administered the Direct Express program since 2008 and provides prepaid debit cards that allow recipients without bank accounts to electronically access Social Security, and other federal benefits, without relying on physical checks. But according to reports "criminals .... stole Direct Express card numbers, addresses and three-digit card identifiers, enabling them to make fraudulent online purchases. In some cases, criminals also called Direct Express to report cards as lost or stolen, or to have PIN numbers changed, and had payments routed to MoneyGram locations where they could pick up a check and cash it."
The letter is at https://www.warren.senate.gov/imo/media/doc/2018.10.16%20Letter%20to%20Comerica%20Bank%20re%20Direct%20Express.pdf
I am writing to seek information regarding security breaches in Comerica's Direct Express debit card program which led to hundreds of Americans becoming victims of fraud when their Social Security, disability, or other federal benefit payments were stolen. This program was managed by Comerica via the now discontinued Direct Express Cardless Benefit Access Service.
Complaints from my constituents, confirmed by detailed reporting in the American Banker, described your company's security vulnerabilities, your mismanaged responses to data breaches, and your misleading and cruel customer service tactics when harmed consumers sought help. I am particularly concerned about the lack of transparency about the security breaches and subsequent fraud schemes that compromised Americans' federal benefits.
The Department of Treasury partners with Comerica and other financial agents to distribute monthly federal benefit payments on behalf of the Social Security Administration, the VA, and at least five other federal agencies. 1 Comerica has administered the Direct Express program since 2008 and provides prepaid debit cards that allow recipients without bank accounts to electronically access Social Security, and other federal benefits, without relying on physical checks. But according to reports "criminals .... stole Direct Express card numbers, addresses and three-digit card identifiers, enabling them to make fraudulent online purchases. In some cases, criminals also called Direct Express to report cards as lost or stolen, or to have PIN numbers changed, and had payments routed to MoneyGram locations where they could pick up a check and cash it."
The letter is at https://www.warren.senate.gov/imo/media/doc/2018.10.16%20Letter%20to%20Comerica%20Bank%20re%20Direct%20Express.pdf
Hospice care and "Do not resuscitate" orders for people with advanced dementia?
Advances in health care can mean an increase in the number of older people suffering from dementia. It may not be obvious that advanced dementia is a terminal illness, but some medical people see it that way. The issue that follows from that point of view is whether a “do not resuscitate” policy and hospice care are appropriate for people with advanced dementia. The issue can be controversial. Some will see the withholding of medical care from a person with advanced dementia as cruel, or even immoral. Others will think that withholding of care is humans, allowing the patient to die with dignity. An NIH article at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4396757/
helpfully reviews the issues. It discusses care options for patients with advanced dementia, including family counseling issues.
Posting by Don Allen Resnikoff
Advances in health care can mean an increase in the number of older people suffering from dementia. It may not be obvious that advanced dementia is a terminal illness, but some medical people see it that way. The issue that follows from that point of view is whether a “do not resuscitate” policy and hospice care are appropriate for people with advanced dementia. The issue can be controversial. Some will see the withholding of medical care from a person with advanced dementia as cruel, or even immoral. Others will think that withholding of care is humans, allowing the patient to die with dignity. An NIH article at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4396757/
helpfully reviews the issues. It discusses care options for patients with advanced dementia, including family counseling issues.
Posting by Don Allen Resnikoff
From DMN:
RCA Records Faces Heavy Pressure to Drop R. Kelly — So Far, No Response
In the wake of the #MeToo movement, pressure continues to build around R. Kelly.
In the past week, Lifetime has aired a six-part documentary featuring women describing sexual misconduct from the singer. The damning biopic, Surviving R. Kelly, chronicles numerous issues involving allegations of sexual assault involving multiple women.
After that documentary aired, the Rape, Abuse and Incest National Network’s sexual crisis hotline received 20% more calls. RAINN president Scott Berkowitz says this is common after high-profile cases.
The story continues here. https://www.digitalmusicnews.com/2019/01/09/rca-records-faces-heavy-pressure-to-drop-r-kelly-no-response-yet/
RCA Records Faces Heavy Pressure to Drop R. Kelly — So Far, No Response
In the wake of the #MeToo movement, pressure continues to build around R. Kelly.
In the past week, Lifetime has aired a six-part documentary featuring women describing sexual misconduct from the singer. The damning biopic, Surviving R. Kelly, chronicles numerous issues involving allegations of sexual assault involving multiple women.
After that documentary aired, the Rape, Abuse and Incest National Network’s sexual crisis hotline received 20% more calls. RAINN president Scott Berkowitz says this is common after high-profile cases.
The story continues here. https://www.digitalmusicnews.com/2019/01/09/rca-records-faces-heavy-pressure-to-drop-r-kelly-no-response-yet/
From Public Citizen
The Growing Rise of Megacompanies Hurts Consumers and Damages Our Democracy
REMINGTON A. GREGG --Consumer & Worker Safeguards--, -Antitrust & Competition Laws-
This month, Apple became the first publicly-traded American company to reach $1 trillion in market value. It is now one of the most powerful companies in the world both in revenue and in the share of the market that it holds. In 2017, Apple took home 79% of the global profit share for smartphones. What does this milestone mean for American consumers?
Megacompany monopolization is not unique to Apple, or even the tech industry. Five banks control half of all assets in the American financial system. Thirty publicly traded companies collect half of the profits produced by all publicly traded companies in the market. According to Business Insider, the difference between how much it costs American companies to make products and how much they make selling products—a mechanism that experts use to measure how much power companies have in the marketplace—is at the highest level since 1950.
When companies consolidate, it makes it harder for plucky startups to gain a foothold as a competitor. As a result, consumers have fewer options, which can drive prices up and innovation down.
Apple has spent decades fostering a consumer-invested ecosystem where users become so familiar and comfortable with its products that it’s difficult to switch another company. This ecosystem is so strong that other companies struggle to create similar systems, effectively allowing Apple to monopolize the market. However, Apple is not the only tech titan set to monopolize the market. Only about 1% of smartphone consumers use an operating system that is not made by Apple or Google.
In industries where corporate consolidation is rampant, such as the tech field, workers’ share of the overall pie is shrinking because these merged companies are focused on efficiency and need fewer workers to perform the necessary jobs, which means fewer people employed in quality, high paying jobs. This leads to an overall decline of the share of the nation’s wealth that goes to workers. In addition, while Apple’s valuation soared to new heights this week, it is aggressively outsourcing its workforce out of the country, taking advantage of poorly-paid workers in other countries and robbing Americans of good jobs.
U.S. Supreme Court Justice Louis Brandeis long ago warned against the “curse of bigness” in corporate power. During the Progressive Era of the 1910s and 1920s, American trustbusters sought to rein-in excessive corporate power by enacting bold laws such as the Clayton and Sherman Act, and the Federal Trade Commission Act, which created the Federal Trade Commission (FTC), to protect competition. However federal antitrust enforcement, the Department of Justice and the FTC, have not used their enforcement powers robustly to curb excessive concentration. Market commentators may argue that stopping companies like Apple, Google, and Amazon from driving out their competitors from the marketplace is impossible. But they are wrong. Congress can fix our antitrust laws to stop companies from growing so big that they stamp out all competition, and Public Citizen will continue to advocate for strong antitrust laws and enforcement that protects consumers against corporate monopolies.
https://citizenvox.org/2018/08/15/the-growing-rise-of-megacompanies-hurts-consumers-and-damages-our-democracy/
The Growing Rise of Megacompanies Hurts Consumers and Damages Our Democracy
REMINGTON A. GREGG --Consumer & Worker Safeguards--, -Antitrust & Competition Laws-
This month, Apple became the first publicly-traded American company to reach $1 trillion in market value. It is now one of the most powerful companies in the world both in revenue and in the share of the market that it holds. In 2017, Apple took home 79% of the global profit share for smartphones. What does this milestone mean for American consumers?
Megacompany monopolization is not unique to Apple, or even the tech industry. Five banks control half of all assets in the American financial system. Thirty publicly traded companies collect half of the profits produced by all publicly traded companies in the market. According to Business Insider, the difference between how much it costs American companies to make products and how much they make selling products—a mechanism that experts use to measure how much power companies have in the marketplace—is at the highest level since 1950.
When companies consolidate, it makes it harder for plucky startups to gain a foothold as a competitor. As a result, consumers have fewer options, which can drive prices up and innovation down.
Apple has spent decades fostering a consumer-invested ecosystem where users become so familiar and comfortable with its products that it’s difficult to switch another company. This ecosystem is so strong that other companies struggle to create similar systems, effectively allowing Apple to monopolize the market. However, Apple is not the only tech titan set to monopolize the market. Only about 1% of smartphone consumers use an operating system that is not made by Apple or Google.
In industries where corporate consolidation is rampant, such as the tech field, workers’ share of the overall pie is shrinking because these merged companies are focused on efficiency and need fewer workers to perform the necessary jobs, which means fewer people employed in quality, high paying jobs. This leads to an overall decline of the share of the nation’s wealth that goes to workers. In addition, while Apple’s valuation soared to new heights this week, it is aggressively outsourcing its workforce out of the country, taking advantage of poorly-paid workers in other countries and robbing Americans of good jobs.
U.S. Supreme Court Justice Louis Brandeis long ago warned against the “curse of bigness” in corporate power. During the Progressive Era of the 1910s and 1920s, American trustbusters sought to rein-in excessive corporate power by enacting bold laws such as the Clayton and Sherman Act, and the Federal Trade Commission Act, which created the Federal Trade Commission (FTC), to protect competition. However federal antitrust enforcement, the Department of Justice and the FTC, have not used their enforcement powers robustly to curb excessive concentration. Market commentators may argue that stopping companies like Apple, Google, and Amazon from driving out their competitors from the marketplace is impossible. But they are wrong. Congress can fix our antitrust laws to stop companies from growing so big that they stamp out all competition, and Public Citizen will continue to advocate for strong antitrust laws and enforcement that protects consumers against corporate monopolies.
https://citizenvox.org/2018/08/15/the-growing-rise-of-megacompanies-hurts-consumers-and-damages-our-democracy/
Ocasio-Cortez reportedly in line for banking post, and that could be bad news for Wall Street
See https://www.cnbc.com/2019/01/11/ocasio-cortez-in-line-for-banking-post-and-that-could-be-bad-news-for-wall-street.html
- Freshman Rep. Alexandria Ocasio-Cortez is in line to be appointed to the House Financial Services Committee, according to a Politico report.
- The New York democratic socialist would be a thorn in the side of Wall Street, which has seen its regulatory burden lowered since Donald Trump became president.
- Ocasio-Cortez also could be an important ally for committee Chairwoman Maxine Waters.
See https://www.cnbc.com/2019/01/11/ocasio-cortez-in-line-for-banking-post-and-that-could-be-bad-news-for-wall-street.html
Big Vaping Companies v. regulators:
F.D.A. Accuses Juul and Altria of Backing Off Plan to Stop Youth Vaping
By Sheila Kaplan
Jan. 4, 2019
WASHINGTON — The Food and Drug Administration is accusing Juul and Altria of reneging on promises they made to the government to keep e-cigarettes away from minors.
Dr. Scott Gottlieb, the agency’s commissioner, is drafting letters to both companies that will criticize them for publicly pledging to remove nicotine flavor pods from store shelves, while secretly negotiating a financial partnership that seems to do the opposite. He plans to summon top executives of the companies to F.D.A. headquarters to explain how they will stick to their agreements given their new arrangement.
Dr. Gottlieb was disconcerted by the commitments the companies made in the deal announced Dec. 19, under which Altria, the nation’s largest maker of traditional cigarettes, agreed to purchase a 35 percent — $13 billion — stake in Juul, the rapidly growing e-cigarette start-up whose products have become hugely popular with teenagers. Public health officials, as well as teachers and parents, fear that e-cigarettes have created a new generation of nicotine addicts.
“Juul and Altria made very specific assertions in their letters and statements to the F.D.A. about the drivers of the youth epidemic,” Dr. Gottlieb said in an interview. “Their recent actions and statements appear to be inconsistent with those commitments.”
In October, after meeting with Dr. Gottlieb, Altria had agreed to stop selling pod-based e-cigarettes until it received F.D.A. permission or until the youth problem was otherwise addressed. In doing so, Howard A. Willard III, Altria’s chief executive, sent the F.D.A. a letter agreeing that pod-based products significantly contribute to the rise in youth vaping.
But the new deal commits the tobacco giant to dramatically expanding the reach of precisely those types of products, by giving Juul access to shelf space in 230,000 retail outlets where Marlboro cigarettes and other Altria tobacco products are sold. (Juul currently sells in 90,000 stores.)
It is a development that startled the F.D.A., which in September had threatened to pull e-cigarettes off the market if companies could not prove within 60 days that they could keep the products away from minors. Altria, Juul and three tobacco companies sent the detailed plans spelling out how they would comply with the agency’s request. Now, those plans appear in jeopardy, Dr. Gottlieb said.
“I’m reaching out to both companies to ask them to come in and explain to me why they seem to be deviating from the representation that they already made to the agency about steps they are taking to restrict their products in a way that will decrease access to kids,” Dr. Gottlieb said.
Dr. Scott Gottlieb, the F.D.A. commissioner, has accused both companies of negotiating with him in bad faith. It is possible that the F.D.A. will pressure Altria to keep Juul flavor pods off its shelf space, but the tobacco company is not likely to consent.
https://www.nytimes.com/2019/01/04/health/fda-juul-altria-youth-vaping.html
F.D.A. Accuses Juul and Altria of Backing Off Plan to Stop Youth Vaping
By Sheila Kaplan
Jan. 4, 2019
WASHINGTON — The Food and Drug Administration is accusing Juul and Altria of reneging on promises they made to the government to keep e-cigarettes away from minors.
Dr. Scott Gottlieb, the agency’s commissioner, is drafting letters to both companies that will criticize them for publicly pledging to remove nicotine flavor pods from store shelves, while secretly negotiating a financial partnership that seems to do the opposite. He plans to summon top executives of the companies to F.D.A. headquarters to explain how they will stick to their agreements given their new arrangement.
Dr. Gottlieb was disconcerted by the commitments the companies made in the deal announced Dec. 19, under which Altria, the nation’s largest maker of traditional cigarettes, agreed to purchase a 35 percent — $13 billion — stake in Juul, the rapidly growing e-cigarette start-up whose products have become hugely popular with teenagers. Public health officials, as well as teachers and parents, fear that e-cigarettes have created a new generation of nicotine addicts.
“Juul and Altria made very specific assertions in their letters and statements to the F.D.A. about the drivers of the youth epidemic,” Dr. Gottlieb said in an interview. “Their recent actions and statements appear to be inconsistent with those commitments.”
In October, after meeting with Dr. Gottlieb, Altria had agreed to stop selling pod-based e-cigarettes until it received F.D.A. permission or until the youth problem was otherwise addressed. In doing so, Howard A. Willard III, Altria’s chief executive, sent the F.D.A. a letter agreeing that pod-based products significantly contribute to the rise in youth vaping.
But the new deal commits the tobacco giant to dramatically expanding the reach of precisely those types of products, by giving Juul access to shelf space in 230,000 retail outlets where Marlboro cigarettes and other Altria tobacco products are sold. (Juul currently sells in 90,000 stores.)
It is a development that startled the F.D.A., which in September had threatened to pull e-cigarettes off the market if companies could not prove within 60 days that they could keep the products away from minors. Altria, Juul and three tobacco companies sent the detailed plans spelling out how they would comply with the agency’s request. Now, those plans appear in jeopardy, Dr. Gottlieb said.
“I’m reaching out to both companies to ask them to come in and explain to me why they seem to be deviating from the representation that they already made to the agency about steps they are taking to restrict their products in a way that will decrease access to kids,” Dr. Gottlieb said.
Dr. Scott Gottlieb, the F.D.A. commissioner, has accused both companies of negotiating with him in bad faith. It is possible that the F.D.A. will pressure Altria to keep Juul flavor pods off its shelf space, but the tobacco company is not likely to consent.
https://www.nytimes.com/2019/01/04/health/fda-juul-altria-youth-vaping.html
About shooting deer in Rock Creek Park
My 11 year old granddaughter was upset by a bright pink sign near the Rock Creek Park Nature Center announcing planned sharpshooting of deer. My granddaughter complained that birth control by sterilizing deer would be the more humane approach.
Several organized groups support birth control for deer as a way to control population. They have the same view as my granddaughter: they believe that sterilization is more humane than shooting deer. The groups include the Humane Society, In Defense of Animals, and the National Parks Conservation Association.
I’ve told my granddaughter that I applaud her taking a stand in opposition to shooting deer, and I encouraged her to support the Human Society, In Defense of Animals, and the National Parks Conservation Association as they encourage sterilization rather than shooting.
Pasted in below is part of an article published by people at the National Parks Conservation Association. Among other things, It discusses an unsuccessful law suit against the Park Service brought a few years ago:
The move [to shoot deer] has upset those who prefer birth control over bullets. They want deer to live out their normal lifespans in places where hunting is off limits. Sometimes they sue to prevent the cull.
This happened to Rock Creek Park when a handful of private D.C. citizens, and In Defense of Animals, a national animal-protection nonprofit, filed a lawsuit in 2012. They alleged that the Park Service is cherry-picking its science, and that the park’s plan is inhumane and unnecessary because successful reproductive control exists.
“We love both the deer and the national park, but the decision to kill the deer has affected the public’s ability to enjoy the park and has ruined the Park Service’s reputation here,” says Carol Grunewald, a plaintiff whose property is near the park. “Our scientists show that Rock Creek Park can easily support 300 deer. But regardless of the numbers, the public will no longer stand for the routine, mass extermination of animals.”
Their legal petition included a scientific analysis by Oswald Schmitz, a professor at Yale’s School of Forestry and Environmental Studies, stating that deer don’t have an adverse impact on the park’s vegetation because forests are self-thinning. That is, seedlings compete for sunlight and other resources, most die, and in the end, a thousand seedlings in an area, for example, may produce only 20 trees with or without deer present.
Their action delayed the park’s cull by a year, but ultimately a court dismissed the case on the grounds that Congress granted the Park Service the authority to act in Rock Creek Park’s interest.
Although not a plaintiff in the lawsuit, the Humane Society of the United States (HSUS) also criticized the park’s plan during the public comment period, championing the nonlethal solution of using a fertility-control vaccine on the herd as an alternative.
“We think Rock Creek’s plan is a wasteful killing program and a lost opportunity to repress the growth rate,” says Stephanie Boyles Griffin, senior director of innovative wildlife management and services at HSUS. The group offered to pay 50 percent of the cost of sterilizing the park’s deer. “We asked park officials to give fertility control a chance, to show they had explored and exhausted all methods before resorting to lethal control,” she says. “The problem wasn’t created overnight, so why does it have to be solved overnight?”
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
My 11 year old granddaughter was upset by a bright pink sign near the Rock Creek Park Nature Center announcing planned sharpshooting of deer. My granddaughter complained that birth control by sterilizing deer would be the more humane approach.
Several organized groups support birth control for deer as a way to control population. They have the same view as my granddaughter: they believe that sterilization is more humane than shooting deer. The groups include the Humane Society, In Defense of Animals, and the National Parks Conservation Association.
I’ve told my granddaughter that I applaud her taking a stand in opposition to shooting deer, and I encouraged her to support the Human Society, In Defense of Animals, and the National Parks Conservation Association as they encourage sterilization rather than shooting.
Pasted in below is part of an article published by people at the National Parks Conservation Association. Among other things, It discusses an unsuccessful law suit against the Park Service brought a few years ago:
The move [to shoot deer] has upset those who prefer birth control over bullets. They want deer to live out their normal lifespans in places where hunting is off limits. Sometimes they sue to prevent the cull.
This happened to Rock Creek Park when a handful of private D.C. citizens, and In Defense of Animals, a national animal-protection nonprofit, filed a lawsuit in 2012. They alleged that the Park Service is cherry-picking its science, and that the park’s plan is inhumane and unnecessary because successful reproductive control exists.
“We love both the deer and the national park, but the decision to kill the deer has affected the public’s ability to enjoy the park and has ruined the Park Service’s reputation here,” says Carol Grunewald, a plaintiff whose property is near the park. “Our scientists show that Rock Creek Park can easily support 300 deer. But regardless of the numbers, the public will no longer stand for the routine, mass extermination of animals.”
Their legal petition included a scientific analysis by Oswald Schmitz, a professor at Yale’s School of Forestry and Environmental Studies, stating that deer don’t have an adverse impact on the park’s vegetation because forests are self-thinning. That is, seedlings compete for sunlight and other resources, most die, and in the end, a thousand seedlings in an area, for example, may produce only 20 trees with or without deer present.
Their action delayed the park’s cull by a year, but ultimately a court dismissed the case on the grounds that Congress granted the Park Service the authority to act in Rock Creek Park’s interest.
Although not a plaintiff in the lawsuit, the Humane Society of the United States (HSUS) also criticized the park’s plan during the public comment period, championing the nonlethal solution of using a fertility-control vaccine on the herd as an alternative.
“We think Rock Creek’s plan is a wasteful killing program and a lost opportunity to repress the growth rate,” says Stephanie Boyles Griffin, senior director of innovative wildlife management and services at HSUS. The group offered to pay 50 percent of the cost of sterilizing the park’s deer. “We asked park officials to give fertility control a chance, to show they had explored and exhausted all methods before resorting to lethal control,” she says. “The problem wasn’t created overnight, so why does it have to be solved overnight?”
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
From Public Citizen:
CFPB Complaint Database Scores Win for Times Columnist
Posted: 04 Jan 2019 12:21 PM PST
by Jeff Sovern
The CFPB's former acting director, Mick Mulvaney, compared the Bureau's public database to Yelp and threatened to take it private, though he never did so. Director Kraninger has not made public her plans for the database, to the best of my knowledge, and so public access to the complaints may still be at risk. We have reported before how the database has helped even a consumer law expert. Now Pulitzer-Prize winning NY Times columnist Michelle Goldberg reports how the database helped her secure an $11,000 refund after her own efforts to work things out with her bank had failed:
I’d been signed up for a dubious program that purported to protect users’ credit in certain emergency situations. My bank had been accused of fraudulent practices in connection with it and fined $700 million by the Consumer Financial Protection Bureau, * * * I tried, maddeningly, to seek redress from the bank — cycling through phone trees, screaming at automated operators. No one could tell me how I’d been enrolled in the program, or for how long.
Eventually, I turned to the C.F.P.B. itself, filling out a simple form on its website. A few weeks later, I was notified that the bank had been deducting money from my account for years, and I was being refunded more than $11,000.
I wonder how many consumers have a similar story to tell. House Financial Services Chair Maxine Waters has said she will focus on the Bureau. This seems like one of many topics worth congressional attention.
CFPB Complaint Database Scores Win for Times Columnist
Posted: 04 Jan 2019 12:21 PM PST
by Jeff Sovern
The CFPB's former acting director, Mick Mulvaney, compared the Bureau's public database to Yelp and threatened to take it private, though he never did so. Director Kraninger has not made public her plans for the database, to the best of my knowledge, and so public access to the complaints may still be at risk. We have reported before how the database has helped even a consumer law expert. Now Pulitzer-Prize winning NY Times columnist Michelle Goldberg reports how the database helped her secure an $11,000 refund after her own efforts to work things out with her bank had failed:
I’d been signed up for a dubious program that purported to protect users’ credit in certain emergency situations. My bank had been accused of fraudulent practices in connection with it and fined $700 million by the Consumer Financial Protection Bureau, * * * I tried, maddeningly, to seek redress from the bank — cycling through phone trees, screaming at automated operators. No one could tell me how I’d been enrolled in the program, or for how long.
Eventually, I turned to the C.F.P.B. itself, filling out a simple form on its website. A few weeks later, I was notified that the bank had been deducting money from my account for years, and I was being refunded more than $11,000.
I wonder how many consumers have a similar story to tell. House Financial Services Chair Maxine Waters has said she will focus on the Bureau. This seems like one of many topics worth congressional attention.
From the Minnesota AG press release (October 2018) on its litigation against drug companies concerning insulin pricing
Press ReleaseTuesday, October 16, 2018
Attorney General Lori Swanson Files Lawsuit Against Pharmaceutical Companies Over Deceptive Price Spikes For Insulin
Price Hikes More Than Doubled the Cost Of Diabetes Medication
Minnesota Attorney General Lori Swanson today filed a lawsuit against the nation’s three major manufacturers of insulin used to treat diabetes after prices more than doubled in recent years. The lawsuit alleges that the drug companies—Sanofi-Aventis U.S. LLC, Novo Nordisk, Inc., and Eli Lilly and Co.—deceptively raised the list prices of insulin, making it less affordable to patients in high deductible health plans, the uninsured, and senior citizens on Medicare.
“Insulin is a life-or-death drug for people with diabetes. Many people can’t afford the price hikes but can’t afford to stop taking the medication either,” said Attorney General Swanson.
The list price of some insulin products has more than doubled since 2011 and tripled since 2002. For example, the cost of Levemir increased from $120.64 for 100 units/ml vial in 2012 to $293.75 in 2018; HumaLog increased from $122.60 for 100 units/ml vial in 2011 to $274.70 in 2017; and Lantus increased from $99.35 in 2010 when it first entered the market to $269.54 in 2018.
The lawsuit alleges that the drug companies fraudulently set an artificially high “list” price for their insulin products but then negotiated a lower actual price by paying rebates to pharmacy benefit managers (PBMs). A PBM is a company retained by a health plan to negotiate prices with drug companies and develop “formularies” of approved drugs that policyholders may take. Drug companies want their drugs to be on the formulary because if a drug is not on the formulary, it is not covered by the health plan or costs more. Pharmaceutical companies obtain favorable placement of their products on PBM formularies by artificially raising their list prices and then offering rebates to the PBM in exchange for favorable formulary placements.
PBMs normally get paid in part based on the “spread” between the list price of a drug and the net price paid by the health plan after the rebates (i.e. the greater the “spread,” the higher the compensation.) Because drug companies want their drugs to be on the formulary, they raise list prices so they can offer higher “rebates” or “spreads” to PBMs than their competitors. This causes the “list price” of the drugs to spiral upward. Health insurers receive a portion of the rebates from the PBM and do not pay the list price. Patients who are in high deductible health plans, who are uninsured, or who are on Medicare, however, may end up paying the artificial list price because they do not get the rebates.
Thus, the drug companies establish two prices for their insulin products: a higher artificial list price and the much lower, secret net price that insurance companies pay, which is confidential. PBMs and manufacturers do not disclose the rebates paid for favorable formulary placement, claiming this information is a “trade secret.” In most industries, competitors normally compete with one another to offer lower prices but here, the drug companies compete with each other by raising their prices so they can give larger rebates to the PBMs who are responsible for the placement of their products.
The “spread” between the list and net prices paid by PBMs has increased dramatically in recent years. For example, Lantus’s spread increased seven-fold between 2009 and 2015; HumaLog’s spread nearly tripled between 2009 and 2015; and Levemir’s spread nearly doubled between 2011 and 2014.
The lawsuit alleges that the list prices the drug companies set are so far from their net prices that they are not an accurate approximation of the true cost of insulin and are deceptive and misleading.
Underinsured and uninsured patients who purchase insulin at a pharmacy are unaware of the product’s net price and do not benefit from the rebates or discounts negotiated by PBMs, but instead make payments based on the deceptive list price published by the manufacturers. There are currently nearly 350,000 Minnesotans without health coverage.
The products included in the lawsuit include Sanofi’s Lantus, Novo Nordisk’s NovoLog, and Eli Lilly’s HumaLog, among others.
See https://www.ag.state.mn.us/Office/PressRelease/20181016_InsulinPriceHikes.asp
Press ReleaseTuesday, October 16, 2018
Attorney General Lori Swanson Files Lawsuit Against Pharmaceutical Companies Over Deceptive Price Spikes For Insulin
Price Hikes More Than Doubled the Cost Of Diabetes Medication
Minnesota Attorney General Lori Swanson today filed a lawsuit against the nation’s three major manufacturers of insulin used to treat diabetes after prices more than doubled in recent years. The lawsuit alleges that the drug companies—Sanofi-Aventis U.S. LLC, Novo Nordisk, Inc., and Eli Lilly and Co.—deceptively raised the list prices of insulin, making it less affordable to patients in high deductible health plans, the uninsured, and senior citizens on Medicare.
“Insulin is a life-or-death drug for people with diabetes. Many people can’t afford the price hikes but can’t afford to stop taking the medication either,” said Attorney General Swanson.
The list price of some insulin products has more than doubled since 2011 and tripled since 2002. For example, the cost of Levemir increased from $120.64 for 100 units/ml vial in 2012 to $293.75 in 2018; HumaLog increased from $122.60 for 100 units/ml vial in 2011 to $274.70 in 2017; and Lantus increased from $99.35 in 2010 when it first entered the market to $269.54 in 2018.
The lawsuit alleges that the drug companies fraudulently set an artificially high “list” price for their insulin products but then negotiated a lower actual price by paying rebates to pharmacy benefit managers (PBMs). A PBM is a company retained by a health plan to negotiate prices with drug companies and develop “formularies” of approved drugs that policyholders may take. Drug companies want their drugs to be on the formulary because if a drug is not on the formulary, it is not covered by the health plan or costs more. Pharmaceutical companies obtain favorable placement of their products on PBM formularies by artificially raising their list prices and then offering rebates to the PBM in exchange for favorable formulary placements.
PBMs normally get paid in part based on the “spread” between the list price of a drug and the net price paid by the health plan after the rebates (i.e. the greater the “spread,” the higher the compensation.) Because drug companies want their drugs to be on the formulary, they raise list prices so they can offer higher “rebates” or “spreads” to PBMs than their competitors. This causes the “list price” of the drugs to spiral upward. Health insurers receive a portion of the rebates from the PBM and do not pay the list price. Patients who are in high deductible health plans, who are uninsured, or who are on Medicare, however, may end up paying the artificial list price because they do not get the rebates.
Thus, the drug companies establish two prices for their insulin products: a higher artificial list price and the much lower, secret net price that insurance companies pay, which is confidential. PBMs and manufacturers do not disclose the rebates paid for favorable formulary placement, claiming this information is a “trade secret.” In most industries, competitors normally compete with one another to offer lower prices but here, the drug companies compete with each other by raising their prices so they can give larger rebates to the PBMs who are responsible for the placement of their products.
The “spread” between the list and net prices paid by PBMs has increased dramatically in recent years. For example, Lantus’s spread increased seven-fold between 2009 and 2015; HumaLog’s spread nearly tripled between 2009 and 2015; and Levemir’s spread nearly doubled between 2011 and 2014.
The lawsuit alleges that the list prices the drug companies set are so far from their net prices that they are not an accurate approximation of the true cost of insulin and are deceptive and misleading.
Underinsured and uninsured patients who purchase insulin at a pharmacy are unaware of the product’s net price and do not benefit from the rebates or discounts negotiated by PBMs, but instead make payments based on the deceptive list price published by the manufacturers. There are currently nearly 350,000 Minnesotans without health coverage.
The products included in the lawsuit include Sanofi’s Lantus, Novo Nordisk’s NovoLog, and Eli Lilly’s HumaLog, among others.
See https://www.ag.state.mn.us/Office/PressRelease/20181016_InsulinPriceHikes.asp
WSJ: CVS, UnitedHealth, Humana and other health insurers’ bids to manage Part D prescription-drug plans for seniors have been consistently off in ways that benefit the companies at the expense of taxpayers
1
Joseph Walker and
Christopher Weaver
January 4, 2019
Excerpts from https://www.wsj.com/articles/the-9-billion-upcharge-how-insurers-kept-extra-cash-from-medicare-11546617082?mod=hp_lead_pos1 (Paywall)
Each June, health insurers send the government detailed cost forecasts for providing prescription-drug benefits to more than 40 million people on Medicare.
Year after year, most of those estimates have turned out to be wrong in the particular way that, thanks to Medicare’s arcane payment rules, results in more revenue for the health insurers, a Wall Street Journal investigation has found. As a consequence, the insurers kept $9.1 billion more in taxpayer funds than they would have had their estimates been accurate from 2006 to 2015, according to Medicare data obtained by the Journal.
Those payments have largely been hidden from view since Medicare’s prescription-drug program was launched more than a decade ago, and are an example of how the secrecy of the $3.5 trillion U.S. health-care system promotes and obscures higher spending.
Overdoing ItHealth insurers reaped $9 billion in additional revenue from 2006 to 2015 byoverestimating drug costs to Medicare and keeping a share of the extra money.Extra revenue kept by insurersSource: Centers for Medicare and Medicaid Services
.billion2006’07’08’09’10’11’12’13’14’150.00.20.40.60.81.01.21.4$1.62009x$1.08 billion
Medicare’s prescription-drug benefit, called Part D, was designed to help hold down drug costs by having insurers manage the coverage efficiently. Instead, Part D spending has accelerated faster than all other components of Medicare in recent years, rising 49% from $62.9 billion in 2010 to $93.8 billion in 2017. Medicare experts say the program’s design is contributing to that increase. Total spending for Part D from 2006-15 was about $652 billion.
The cornerstone of Part D is a system in which private insurers such as CVS Health Corp. , UnitedHealth Group Inc. and Humana Inc.submit “bids” estimating how much it will cost them to provide the benefit. The bids include their own profits and administrative costs for each plan. Then Medicare uses the estimates to make monthly payments to the plans.
After the year ends, Medicare compares the plans’ bids to the actual spending. If the insurer overestimated its costs, it pockets a chunk of the extra money it received from Medicare—sometimes all of it—and this can often translate into more profit for the insurer, in addition to the profit built into the approved bid. If the extra money is greater than 5% of the insurer’s original bid, it has to pay some of it back to Medicare.
For instance, in 2015, insurers overestimated costs by about $2.2 billion, and kept about $1.06 billion of it after paying back $1.1 billion to the government, according to the data reviewed by the Journal.
1
Joseph Walker and
Christopher Weaver
January 4, 2019
Excerpts from https://www.wsj.com/articles/the-9-billion-upcharge-how-insurers-kept-extra-cash-from-medicare-11546617082?mod=hp_lead_pos1 (Paywall)
Each June, health insurers send the government detailed cost forecasts for providing prescription-drug benefits to more than 40 million people on Medicare.
Year after year, most of those estimates have turned out to be wrong in the particular way that, thanks to Medicare’s arcane payment rules, results in more revenue for the health insurers, a Wall Street Journal investigation has found. As a consequence, the insurers kept $9.1 billion more in taxpayer funds than they would have had their estimates been accurate from 2006 to 2015, according to Medicare data obtained by the Journal.
Those payments have largely been hidden from view since Medicare’s prescription-drug program was launched more than a decade ago, and are an example of how the secrecy of the $3.5 trillion U.S. health-care system promotes and obscures higher spending.
Overdoing ItHealth insurers reaped $9 billion in additional revenue from 2006 to 2015 byoverestimating drug costs to Medicare and keeping a share of the extra money.Extra revenue kept by insurersSource: Centers for Medicare and Medicaid Services
.billion2006’07’08’09’10’11’12’13’14’150.00.20.40.60.81.01.21.4$1.62009x$1.08 billion
Medicare’s prescription-drug benefit, called Part D, was designed to help hold down drug costs by having insurers manage the coverage efficiently. Instead, Part D spending has accelerated faster than all other components of Medicare in recent years, rising 49% from $62.9 billion in 2010 to $93.8 billion in 2017. Medicare experts say the program’s design is contributing to that increase. Total spending for Part D from 2006-15 was about $652 billion.
The cornerstone of Part D is a system in which private insurers such as CVS Health Corp. , UnitedHealth Group Inc. and Humana Inc.submit “bids” estimating how much it will cost them to provide the benefit. The bids include their own profits and administrative costs for each plan. Then Medicare uses the estimates to make monthly payments to the plans.
After the year ends, Medicare compares the plans’ bids to the actual spending. If the insurer overestimated its costs, it pockets a chunk of the extra money it received from Medicare—sometimes all of it—and this can often translate into more profit for the insurer, in addition to the profit built into the approved bid. If the extra money is greater than 5% of the insurer’s original bid, it has to pay some of it back to Medicare.
For instance, in 2015, insurers overestimated costs by about $2.2 billion, and kept about $1.06 billion of it after paying back $1.1 billion to the government, according to the data reviewed by the Journal.
FDA on fraudulent diet medications
We checked the FDA web site for advice on fraudulent diet drugs after a reader sent us a suspicious looking ad.
The main point of the FDA video and text posting below is that many dietary supplements that promise weight loss contain hidden and dangerous ingredients. The FDA ability to regulate dietary supplements is limited.
See https://www.fda.gov/drugs/resourcesforyou/consumers/buyingusingmedicinesafely/medicationhealthfraud/ucm234592.htm
We checked the FDA web site for advice on fraudulent diet drugs after a reader sent us a suspicious looking ad.
The main point of the FDA video and text posting below is that many dietary supplements that promise weight loss contain hidden and dangerous ingredients. The FDA ability to regulate dietary supplements is limited.
See https://www.fda.gov/drugs/resourcesforyou/consumers/buyingusingmedicinesafely/medicationhealthfraud/ucm234592.htm
Cardless ATMs expand despite security risks
Jan. 3, 2019
Cardless ATMs are on the rise, driven partially by the perception that they are safer to use than physical debit cards for withdrawing cash, according to bankrate.com. Besides allowing for faster cash withdrawals, cardless ATMs, combined with mobile wallets, could make cash unnecessary.
Last year, Chase and Fifth Third allowed card-free ATM access, while PNC followed suit at select terminals. In addition, 3,500 credit unions allowed members to use cardless ATMs via the Co-op Financial Services network.
Cardless ATMs remove the risk of card skimming, the biggest type of fraud afflicting ATMs, but they are not immune to theft, according to the report.
Fraudsters reportedly stole more than $106,000 through a phishing scam from Fifth Third Bank customers after it began offering cardless ATM access. The fraudsters sent a text message to customers and tricked them into visiting a fake website where they provided personal information, which allowed the thieves to initiate cardless ATM transactions.
One Chase Bank customer was robbed after her password and username were stolen. Thieves added a phone number to her account and used a cardless ATM to withdraw funds which they had transferred from her savings account to her checking account.
Mike Byrnes, a product marketing manager at Entust Datacard, said the security aspect of cardless ATMs has not been fully thought through.
Credit: https://www.atmmarketplace.com/news/cardless-atms-expand-despite-security-risks/?utm_source=AMC&utm_medium=email&utm_campaign=Week+In+Review&utm_content=2019-01-04
Jan. 3, 2019
Cardless ATMs are on the rise, driven partially by the perception that they are safer to use than physical debit cards for withdrawing cash, according to bankrate.com. Besides allowing for faster cash withdrawals, cardless ATMs, combined with mobile wallets, could make cash unnecessary.
Last year, Chase and Fifth Third allowed card-free ATM access, while PNC followed suit at select terminals. In addition, 3,500 credit unions allowed members to use cardless ATMs via the Co-op Financial Services network.
Cardless ATMs remove the risk of card skimming, the biggest type of fraud afflicting ATMs, but they are not immune to theft, according to the report.
Fraudsters reportedly stole more than $106,000 through a phishing scam from Fifth Third Bank customers after it began offering cardless ATM access. The fraudsters sent a text message to customers and tricked them into visiting a fake website where they provided personal information, which allowed the thieves to initiate cardless ATM transactions.
One Chase Bank customer was robbed after her password and username were stolen. Thieves added a phone number to her account and used a cardless ATM to withdraw funds which they had transferred from her savings account to her checking account.
Mike Byrnes, a product marketing manager at Entust Datacard, said the security aspect of cardless ATMs has not been fully thought through.
Credit: https://www.atmmarketplace.com/news/cardless-atms-expand-despite-security-risks/?utm_source=AMC&utm_medium=email&utm_campaign=Week+In+Review&utm_content=2019-01-04
Los Angeles Sues the Weather Channel
January 4, 2019CNS
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TLOS ANGELES (CN) — Los Angeles’ city attorney sued The Weather Channel on Thursday, claiming it fraudulently and deceptively uses its Weather Channel App “to amass its users’ private, personal geolocation data,” not, as advertised — “to provide them with ‘personalized local weather data’”— but to monetize the information by selling it to third parties.
Suing on behalf of the People of California, City Attorney Michael Feuer asked the superior court to enjoin the deceptive and unfair business practices, and fine the company $2,500 for each violation, doubled if committed against elderly or disabled people.
Defendant TWC Product and Technology LLC owns and operates The Weather Channel App, which can be downloaded on Apple and Android products. TWC is a subsidiary of IBM.
Excerpt from https://www.courthousenews.com/los-angeles-sues-the-weather-channel%EF%BB%BF/
January 4, 2019CNS
FacebookTwitterGoogle+Email
TLOS ANGELES (CN) — Los Angeles’ city attorney sued The Weather Channel on Thursday, claiming it fraudulently and deceptively uses its Weather Channel App “to amass its users’ private, personal geolocation data,” not, as advertised — “to provide them with ‘personalized local weather data’”— but to monetize the information by selling it to third parties.
Suing on behalf of the People of California, City Attorney Michael Feuer asked the superior court to enjoin the deceptive and unfair business practices, and fine the company $2,500 for each violation, doubled if committed against elderly or disabled people.
Defendant TWC Product and Technology LLC owns and operates The Weather Channel App, which can be downloaded on Apple and Android products. TWC is a subsidiary of IBM.
Excerpt from https://www.courthousenews.com/los-angeles-sues-the-weather-channel%EF%BB%BF/
AZ Police have responded to dozens of calls regarding people threatening and harassing self-driving Waymo vans.
- One man aimed a gun at a Waymo to scare the emergency driver
- One Jeep ran six Waymo vans off the road
The Indian government announced new regulations that appear to limit Walmart and Amazon bundling of its platform business with sales promotion
The regulation will block the companies from selling products supplied by affiliated companies, and also precludes offering their customers special discounts or exclusive products.
The steps taken by India appear to reflect suggestions of some for structural limitations or break-up of Amazon, such as Stacy Mitchel, the co-director of Institute for Local Self-Reliance. Earlier this year she wrote an article for The Nation called, “Amazon doesn’t just want to dominate the market — it wants to become the market.” In the Podcast below from public radio station WNYC, Mitchell describes the history of regulation of corporate concentration. She then explains why she thinks that the government should forcibly separate Amazon's platform business from its other businesses.
This Podcast is at https://www.wnycstudios.org/story/making-america-antitrust-again
Posting by Don Allen Resnikoff, who is responsible for its content
The regulation will block the companies from selling products supplied by affiliated companies, and also precludes offering their customers special discounts or exclusive products.
The steps taken by India appear to reflect suggestions of some for structural limitations or break-up of Amazon, such as Stacy Mitchel, the co-director of Institute for Local Self-Reliance. Earlier this year she wrote an article for The Nation called, “Amazon doesn’t just want to dominate the market — it wants to become the market.” In the Podcast below from public radio station WNYC, Mitchell describes the history of regulation of corporate concentration. She then explains why she thinks that the government should forcibly separate Amazon's platform business from its other businesses.
This Podcast is at https://www.wnycstudios.org/story/making-america-antitrust-again
Posting by Don Allen Resnikoff, who is responsible for its content
Revisiting two influential books on big business and agriculture: Reposting of an earlier review from 2014
The Meat Racket: The Secret Takeover of America's Food Business
By Christopher Leonard
Simon & Schuster, 2014
Foodopoly: The Battle Over the Future of Food and Farming in America
By Wenonah Hauter
The New Press, 2012
Review by Don Allen Resnikoff
The Meat Racket author Christopher Leonard and Foodopoly author Wenonah Hauter both describe a scenario of American agriculture where large wholesale and retail companies bully farmers and misuse consumers while the government stands by and does little to help. They advocate for stronger government action against big companies to help small farmers and consumers. Both authors emphasize the need for policy reform to increase the number of competitors in the business of distributing farm products. Both believe that current antitrust enforcement and relevant legislative mechanisms work poorly.
Their books are addressed to broad audiences, not expert economists or antitrust lawyers, and the reason is plain: The authors hope that informing the masses will lead to public pressure for government action, and that pressure will turn the tide against big companies and improve the future of food and farming in America.
In The Meat Racket, Leonard offers clear and forceful reform recommendations that support the interests of small farmers, although much of the book’s space is devoted to stories of the growth of Tyson Foods, Inc. and other giant wholesale agribusiness companies that act as middlemen between farmers and consumers. Often the companies started as small family businesses, developing innovative, efficient, and often cruel-to-animals factory farming techniques as they grew. As these agribusinesses expanded, their exploitation of farmers also increased.
Leonard’s bottom line on public policy reform is that the government, including antitrust enforcers, needs to better protect farmers as well as the consuming public from the clutches of huge, vertically integrated agribusiness companies. The executive branch of government should, among other things, more vigorously enforce antitrust laws, and Congress should take effective legislative action.
Leonard tells us that large wholesale-level agribusinesses use their great market power to bully farmers into contracts that allow the companies to decree the price of animals, making competitive wholesale market pricing of chicken, pork, and beef virtually irrelevant. The result is impoverished farmers. Farmers have little bargaining power, are hardly entrepreneurs, and are reduced to “a state of indebted servitude, living like modern-day sharecroppers on the ragged edge of bankruptcy.” In past years there were small wholesale meat buyers that competed on price, allowing farmers to bargain on price and make some money, but those wholesalers mainly are now gone.
While large companies like Tyson Foods benefit financially from contract farming arrangements that cause poverty to farmers, the benefits to consumers are dubious. Threshold concerns are the ethical and human health issues of factory-style farming being promoted by companies like Cargill, ConAgra Foods, JBS, Smithfield Foods, and Tyson Foods. Further, large agribusinesses can use their market power to limit supply to and raise prices on consumers without worrying about significant competitive constraints. There are some powerful buyers like McDonalds and Walmart, but Leonard sees them as incidental to the main story of the stranglehold of big agribusiness over ordinary consumers.
Since Leonard’s story is about the extraordinary market power of large agribusiness companies, a reader may wonder why antitrust remedies haven’t been effective. Leonard is judicious in addressing the failures of antitrust enforcement. He recognizes that recent antitrust enforcement is restrained and timid, and that government is unlikely to pursue strong action. Leonard wishes for a more vigorous government response, but he accepts that in the world of real politics, it is not going to happen.
Similarly, if farmers and consumers are being misused by a few big companies, and antitrust enforcement is not working to fix the problem, why hasn’t Congress stepped in yet? Again, Leonard recognizes how things work in the political world.
Leonard tells us the back stories about the political realities that explain the Obama administration’s or Congress’s action, or lack of it. He writes that the transition from the Bush presidency to the Obama presidency in 2008 promised important political change for farmers. Many politically engaged farmer advocates had hoped that an Obama administration would bring tougher antitrust enforcement and congressional action. When Barack Obama campaigned in Democratic primaries against Hillary Clinton in states like Iowa, he rallied great support among farmers who did not follow the urban-based notion that rural people don’t recognize or assert their political interests. Farmers often do. Leonard reports that farmers were impressed by Obama’s push for farm policy reform and unimpressed by Clinton’s apparent lack of interest, as well as by her political ties to Arkansas agribusiness, particularly Tyson Foods. Leonard quotes an Iowa Democratic Party operative as saying about Clinton, “I don’t know a single farmer who would vote for her!”
The Iowa caucus left Clinton in third place, and put Obama first, which some saw as a turning point in his successful quest for nomination and, ultimately, the presidency.
Initially, the new Obama presidency promised important reforms in U.S. agricultural policy. Obama appointed former Iowa governor Tom Vilsack as secretary of agriculture. As governor, Vilsack had been a leading advocate for farmers in his state, and many expected him to successfully continue that advocacy at the national level.
Obama also appointed Christine Varney as head of the Antitrust Division of the U.S. Department of Justice. She quickly became known for her strong rhetoric, promising a new day for antitrust enforcement generally, including helping farmers and food consumers. Varney complained that antitrust enforcement had been all but abandoned, and she vowed to change that under her watch. “[T]here is no adequate substitute for a competitive market, particularly during times of economic distress. . . . [V]igorous antitrust enforcement must play a significant role in the government’s response to economic crises to ensure that markets remain competitive,” Varney said in 2009.
In 2010 the Justice Department’s Antitrust Division and the U.S. Department of Agriculture joined to sponsor a series of hearings around the country on the state of competition in the agriculture sector. It is interesting to reach beyond the Leonard book and into the transcripts and summary report of the hearings, which bring us the comments of people with feet-on-the-ground knowledge of agricultural markets in the United States. The 2012 report is titled “Competition and Agriculture: Voices From the Workshops on Agriculture and Antitrust Enforcement in Our 21st Century Economy and Thoughts on the Way Forward.”
The government report presents testimony by producers of cattle, hogs, poultry, and dairy, as well as growers of fruits and vegetables, about problems of concentration in wholesale food processing and retail. Many who testified specifically raised the issue of monopsony power—market power on the buying side of a market as opposed to the selling side. For example, in Iowa one panelist expressed concern that “larger companies are able to exert more buyer power . . . over farmers.”
Some testified that existing antitrust laws are inattentive to a persistent monopsony problem. During a hearing in Washington, D.C., a farmer remarked that “it’s the monopsony power of these concentrated purchases of farm goods that are stressing the people and the natural systems that are producing food,” and that “[r]ight now antitrust jurisprudence isn’t solving the problem.” Similarly, at a hearing held in Alabama, a union member argued that “[i]n competition we all know the word monopoly. . . . But I want us to learn a new word today. It’s monopsony.”
While the hearings allowed farmers and their supporters to speak out, follow-up action by the government was weak. Promises of reform by the Obama administration faded away when they faced political opposition. The consequence is that today large agribusinesses continue to hold great power over farmers and consumers, and are largely unaffected by antitrust enforcement.
The 2012 report includes language explaining the Obama administration’s lack of action. Leonard points out that while the report enumerates problems and abuses in agricultural markets, including an unprecedented level of market concentration caused by a wave of company mergers, it also says that not much can be done about it. In its concluding analysis, the report mostly focuses on why the Justice Department can’t do much to solve the problems. The report says that antitrust laws weren’t made to solve many of the problems identified during the hearings. It also did not point to any major antitrust case filed by the Obama administration. At a public conference where Leonard’s book was being discussed, Bert Foer, president of the American Antitrust Institute, agreed that antitrust enforcement has failed to meet the challenges of agricultural markets.
While there has been some congressional legislation to improve the lot of farmers, it has been much weaker than originally offered by the Obama administration. Leonard explains that while new coalitions of interest groups have formed to press for legislation favorable to farmers, the pro-farmer interest groups have been outmatched and outmaneuvered by industry lobbyists in Washington. The White House has backed off its initially aggressive stance, and the odds of Congress passing new legislation seem increasingly remote at this point.
The stories Leonard tells in his book reflect the skills of a practiced writer who simply and directly explains agricultural markets and the market power of big companies. He takes us on a straight line, from the fascinating stories of agribusiness industry development to powerful arguments of antitrust and legislative policy.
In contrast, the organizational structure of Hauter’s book is more diffuse, partly because it is a loose cobbling together of her short writings on a number of different topics. Hauter is a political activist who supports an array of causes and groups that are linked only loosely by conventional notions of antitrust and related policy. She offers discussions of diverse topics such as the importance of small family farms, local food sourcing, the undermining of organic farming principles by Whole Foods Market, and grassroots opposition to retailer Walmart for a number of behaviors, including low worker pay. What brings these topics together is that they are all relevant to broad issues of social and political policy linked to big companies.
As mentioned earlier, Hauter’s book focuses on retailers like Walmart and Whole Foods as particular sources of harm, which makes her emphasis different than Leonard’s. Hauter sees giant retailers, particularly Walmart, as pernicious, influencing behavior throughout the supply chain and using great market power to force suppliers to compromise on quality and production standards.
Hauter’s loosely associated points fit with her views about grassroots political action against giant companies like Walmart. It is plain to see from the subtitle of her book that the battle she has in mind is political in a broad sense, and not a battle that accepts the constraints of conventional politics or policy.
Hauter’s book is optimistic in tone, upbeat about the prospect that the reforms she advocates for will be adopted. But it is difficult for a reader to conclude that the political struggle Hauter contemplates is going very well thus far. A striking aspect of both the government hearings about agriculture at the national level and the local political battles against Walmart over low wages is the extent to which Walmart, like other large companies, is able to successfully defend itself and avoid regulation or antitrust enforcement. Big company strategies include very public reasoned rebuttals against a broad array of “big is bad” arguments.
Walmart has launched a counter-campaign to the issues raised in Foodopoly: market power, promotion of highly processed junk food, Tyson Foods-style, corporate-dominated factory farms, low wages, and harm to local businesses. Foodopoly proffers a formidable indictment of Walmart, but the retailer uses skilled public relations techniques and excellent media access to convey its well-honed messages. It points out that it helps the disadvantaged by charging low prices and by providing employment. It claims that it promotes and popularizes organic food and healthy eating. Walmart presents these and other arguments to the public through mass media in a manner intended to develop broad support. Mass media, on the other hand, tends to present the views of Walmart opponents as mere counterpoints, suggesting two evenly balanced sides of an argument.
I see little indication that the government will soon adopt enforcement proposals discussed by Leonard or Hauter and those who agree with them. It seems unlikely, for example, that Tyson Foods or Walmart will soon be dismantled by government enforcers. (The Justice Department’s response to Tyson Foods’ recent plan to buy rival Hillshire Brands was to file a complaint and settle it the same day, August 27, 2014, based on Tyson’s selling its sow purchasing division to a third party.)
But that is not a reason to criticize the efforts of Leonard and Hauter to reach out to a wider audience, nor to demean Hauter’s vision of a multifaceted struggle of mobilizing people against large companies like Walmart or Tyson Foods. On the contrary, big companies may be winning now, but what antitrust and other business regulation will look like decades from now depends a great deal on what the public wants it to be. What the public wants may be influenced by messages like Hauter’s or Leonard’s. The idea of democracy includes political visionaries who reach out and successfully catch the attention of the public, and make a difference.
This positing is by Don Allen Resnikoff who takes full responsibility for its content.
California Court of Appeals' first Muslim judge
Published on Dec 30, 2018
Justice Halim Dhanidina was recently elevated to California’s Courts of Appeal, making him the state’s most senior judge of Muslim faith. The PBS NewsHour Weekend Edition offers an interesting piece with Special Correspondent David Tereshchuk talking with Dhanidina about engaging with supporters and critics alike, and setting an example for what it looks like to be a "Muslim judge" in the United States. The Judge believes in acceptance for people of all religions, and would like to educate those who imagine, without a basis, that he will apply Sharia law. (13 States have passed legislation banning Sharia law, solving what some would say is a non-problem. Other States are considering such legislation.)
The video is at: https://www.youtube.com/watch?reload=9&v=27m2iEdfYv0
Published on Dec 30, 2018
Justice Halim Dhanidina was recently elevated to California’s Courts of Appeal, making him the state’s most senior judge of Muslim faith. The PBS NewsHour Weekend Edition offers an interesting piece with Special Correspondent David Tereshchuk talking with Dhanidina about engaging with supporters and critics alike, and setting an example for what it looks like to be a "Muslim judge" in the United States. The Judge believes in acceptance for people of all religions, and would like to educate those who imagine, without a basis, that he will apply Sharia law. (13 States have passed legislation banning Sharia law, solving what some would say is a non-problem. Other States are considering such legislation.)
The video is at: https://www.youtube.com/watch?reload=9&v=27m2iEdfYv0
Cannabis-related bank reform legislation falls short in Senate
Dec. 27, 2018
A new attempt to give cannabis firms access to legal banking services has failed in the U.S. Senate, according to a new report.https://www.fool.com/investing/2018/12/22/mitch-mcconnell-blocks-marijuana-banking-reform-am.aspx
Sen. Cory Gardner last week reintroduced the States Act, which called for an easing of laws in the cannabis business, in a bid to make sure financial institutions could offer banking services to these firms without being liable for drug trafficking. The act, which was reintroduced as an amendment to the First Step Act, a criminal justice reform bill, failed in the Senate.
If passed, the legislation would free legal cannabis states to directly address creating legal financial services for cannabis industry companies.
Big tobacco companies are reportedly interested in cannabis as a business, so banking issues are a problem for the tobacco companies.
Credit: Motley Fool
Dec. 27, 2018
A new attempt to give cannabis firms access to legal banking services has failed in the U.S. Senate, according to a new report.https://www.fool.com/investing/2018/12/22/mitch-mcconnell-blocks-marijuana-banking-reform-am.aspx
Sen. Cory Gardner last week reintroduced the States Act, which called for an easing of laws in the cannabis business, in a bid to make sure financial institutions could offer banking services to these firms without being liable for drug trafficking. The act, which was reintroduced as an amendment to the First Step Act, a criminal justice reform bill, failed in the Senate.
If passed, the legislation would free legal cannabis states to directly address creating legal financial services for cannabis industry companies.
Big tobacco companies are reportedly interested in cannabis as a business, so banking issues are a problem for the tobacco companies.
Credit: Motley Fool
From DMN:
A Fed Up Musician Demands That YouTube Fix Its Broken Content ID System. More Than 100,000 People Have Signed His Petition.
YouTube’s Content ID has a major copyright infringement problem. Now, people have urged Google to fix it.
As part of the video platform’s large-scale protest against the EU’s Copyright Directive, YouTube has pointed to its Content ID as an existing viable solution.
According to YouTube CEO Susan Wojcicki and YouTube Music chief Lyor Cohen, Content ID already does enough to protect owners.
The story continues here. https://www.digitalmusicnews.com/2018/12/27/christian-buettner-thefatrat-youtube-content-id-petition/
A Fed Up Musician Demands That YouTube Fix Its Broken Content ID System. More Than 100,000 People Have Signed His Petition.
YouTube’s Content ID has a major copyright infringement problem. Now, people have urged Google to fix it.
As part of the video platform’s large-scale protest against the EU’s Copyright Directive, YouTube has pointed to its Content ID as an existing viable solution.
According to YouTube CEO Susan Wojcicki and YouTube Music chief Lyor Cohen, Content ID already does enough to protect owners.
The story continues here. https://www.digitalmusicnews.com/2018/12/27/christian-buettner-thefatrat-youtube-content-id-petition/
Federal regs on added coloring will delay supermarket sales of "bloody" uncooked vegetarian burgers
Impossible Foods, the Silicon Valley-based maker of the eponymous burger, uses genetically modified yeast to mass produce its central ingredient, soy leghemoglobin, or “heme.” It’s heme that gives the Impossible Burger its essential meat-like flavor, the company said. The substance was ready to break out this summer after the U.S. Food and Drug Administration, following years of back-and-forth, declined to challenge findings voluntarily presented by the company that the cooked product is “Generally Recognized as Safe,” or GRAS. Such a “no questions” letter means the FDA found the information provided to be sufficient.
Heme is “responsible for the flavor of blood,” Impossible Foods CEO Patrick Brown said in an interview earlier this year. “It catalyzes reactions in your mouth that generate these very potent odor molecules that smell bloody and metallic.”
It’s how the burger looks that’s now at issue, though. An FDA spokesman said heme, which is red in hue, needs to be formally approved as a color additive before individual consumers can purchase the uncooked product.
“If the firm wishes to sell the uncooked, red-colored ground beef analogue to consumers, pre-market approval of the soy leghemoglobin as a color additive is required,” FDA spokesman Peter Cassell told Bloomberg in a Dec. 17 email. Impossible Foods filed a petition Nov. 5 seeking heme’s formal approval as a color additive, the FDA said. The agency has 90 days to respond, and the timeline can be extended.
Impossible Foods says heme isn’t a color additive as currently used in cooked Impossible Burgers sold in restaurants. However, other future uses might qualify as a color additive, company spokeswoman Rachel Konrad said in an email. The company submitted the FDA petition to retain “maximum flexibility as our products and business continue to evolve.” Konrad declined to say whether uncooked heme-containing products to be sold in supermarkets were one of those contemplated future uses.
Excerpt from: https://www.bloomberg.com/news/articles/2018-12-26/why-the-bloody-impossible-burger-faces-another-fda-hurdle?cmpid=BBD122618_BIZ&utm_medium=email&utm_source=newsletter&utm_term=181226&utm_campaign=bloombergdaily
Impossible Foods, the Silicon Valley-based maker of the eponymous burger, uses genetically modified yeast to mass produce its central ingredient, soy leghemoglobin, or “heme.” It’s heme that gives the Impossible Burger its essential meat-like flavor, the company said. The substance was ready to break out this summer after the U.S. Food and Drug Administration, following years of back-and-forth, declined to challenge findings voluntarily presented by the company that the cooked product is “Generally Recognized as Safe,” or GRAS. Such a “no questions” letter means the FDA found the information provided to be sufficient.
Heme is “responsible for the flavor of blood,” Impossible Foods CEO Patrick Brown said in an interview earlier this year. “It catalyzes reactions in your mouth that generate these very potent odor molecules that smell bloody and metallic.”
It’s how the burger looks that’s now at issue, though. An FDA spokesman said heme, which is red in hue, needs to be formally approved as a color additive before individual consumers can purchase the uncooked product.
“If the firm wishes to sell the uncooked, red-colored ground beef analogue to consumers, pre-market approval of the soy leghemoglobin as a color additive is required,” FDA spokesman Peter Cassell told Bloomberg in a Dec. 17 email. Impossible Foods filed a petition Nov. 5 seeking heme’s formal approval as a color additive, the FDA said. The agency has 90 days to respond, and the timeline can be extended.
Impossible Foods says heme isn’t a color additive as currently used in cooked Impossible Burgers sold in restaurants. However, other future uses might qualify as a color additive, company spokeswoman Rachel Konrad said in an email. The company submitted the FDA petition to retain “maximum flexibility as our products and business continue to evolve.” Konrad declined to say whether uncooked heme-containing products to be sold in supermarkets were one of those contemplated future uses.
Excerpt from: https://www.bloomberg.com/news/articles/2018-12-26/why-the-bloody-impossible-burger-faces-another-fda-hurdle?cmpid=BBD122618_BIZ&utm_medium=email&utm_source=newsletter&utm_term=181226&utm_campaign=bloombergdaily
Huawei Rivals Nokia and Ericsson Struggle to Capitalize on U.S. Scrutiny
Nokia and Ericsson have been slow to release telecom equipment as advanced as Huawei’s, major wireless providers say
By
Stu Woo
Updated Dec. 31, 2018 10:17 a.m. ET
U.S.-led scrutiny of Huawei Technologies Co. should have been good news for its two biggest competitors in the telecommunications-equipment business, Finland’s Nokia Corp. NOK -0.43% and EricssonERIC +0.79% AB of Sweden.
It isn’t turning out to be so simple.
Major European wireless providers—big customers of all three—say Nokia and Ericsson have been slow to release equipment that is as advanced as Huawei’s.
Nokia and Ericsson also face a new, deep-pocketed challenger inSamsung Electronics Co . , the South Korean smartphone giant that is aiming to quickly grow its nascent cellular-infrastructure business.
And there is another big pitfall for the two: Both Nokia and Ericsson fear that if they are seen trying to take advantage, Beijing could retaliate by cutting off access to the massive Chinese market, people familiar with the matter said.
In recent years, Huawei has surpassed the Nordic companies to become the world’s biggest maker of cellular-tower hardware, internet routers and related telecom equipment. For the first three quarters of 2018, Huawei had a 28% share of the global telecom-equipment market, Nokia had 17% and Ericsson 13.4%, according to research-firm Dell’Oro Group. That compares with market shares in 2017 of 27.1% for Huawei, 16.8% for Nokia and 13.2% for Ericsson.
Huawei has dominated the world-wide industry despite being essentially barred from the U.S. over concerns that Beijing could order Huawei to spy on or disable communications networks. Recently, the U.S. has been urging allies to enact similar bans.
Excerpt from WSJ (paywall): https://www.wsj.com/articles/huawei-rivals-nokia-and-ericsson-struggle-to-capitalize-on-u-s-scrutiny-11546252247?mod=hp_lead_pos4
Nokia and Ericsson have been slow to release telecom equipment as advanced as Huawei’s, major wireless providers say
By
Stu Woo
Updated Dec. 31, 2018 10:17 a.m. ET
U.S.-led scrutiny of Huawei Technologies Co. should have been good news for its two biggest competitors in the telecommunications-equipment business, Finland’s Nokia Corp. NOK -0.43% and EricssonERIC +0.79% AB of Sweden.
It isn’t turning out to be so simple.
Major European wireless providers—big customers of all three—say Nokia and Ericsson have been slow to release equipment that is as advanced as Huawei’s.
Nokia and Ericsson also face a new, deep-pocketed challenger inSamsung Electronics Co . , the South Korean smartphone giant that is aiming to quickly grow its nascent cellular-infrastructure business.
And there is another big pitfall for the two: Both Nokia and Ericsson fear that if they are seen trying to take advantage, Beijing could retaliate by cutting off access to the massive Chinese market, people familiar with the matter said.
In recent years, Huawei has surpassed the Nordic companies to become the world’s biggest maker of cellular-tower hardware, internet routers and related telecom equipment. For the first three quarters of 2018, Huawei had a 28% share of the global telecom-equipment market, Nokia had 17% and Ericsson 13.4%, according to research-firm Dell’Oro Group. That compares with market shares in 2017 of 27.1% for Huawei, 16.8% for Nokia and 13.2% for Ericsson.
Huawei has dominated the world-wide industry despite being essentially barred from the U.S. over concerns that Beijing could order Huawei to spy on or disable communications networks. Recently, the U.S. has been urging allies to enact similar bans.
Excerpt from WSJ (paywall): https://www.wsj.com/articles/huawei-rivals-nokia-and-ericsson-struggle-to-capitalize-on-u-s-scrutiny-11546252247?mod=hp_lead_pos4
NYT editorial: State AGs have gone light on big pharma and opioids
Public officials and plaintiffs’ lawyers, by failing to use lawsuits to hold the opioid industry to account, have allowed a containable crisis to mushroom into catastrophe. Repeatedly, they ended lawsuits quickly for the sake of political and financial expediency rather than digging out information that would have alerted the public to the dangers of these drugs.
Consider the case of Florida, which in 2001 became one of the first states to investigate Purdue Pharma. Its attorney general at the time, Robert Butterworth, pointing to a growing number of overdose deaths, declared that he would discover when Purdue Pharma first knew about OxyContin’s abuse.
That never happened. Instead, state investigators interviewed only a single former OxyContin sales representative, and Mr. Butterworth, who was running for a State Senate seat, ended the case soon after it was filed.
He lost his election and the case’s settlement proved empty. While Purdue Pharma agreed to pay $2 million to fund a system that would monitor how Florida doctors prescribed opioids, state legislators blocked its creation. David Aronberg, the state attorney for Palm Beach County, told me that nearly all of the $2 million was returned to the drug company and Florida went on become a major center of the opioid crisis.
The decision by Justice Department officials in 2007 to forgo felony charges against the executives of Purdue Pharma also resulted in the loss of a critical chance to slow the epidemic’s trajectory. Without a public trial, doctors remained unaware about the extent of Purdue Pharma’s deceptions and increasingly prescribe opioids. During the five years that followed the Justice Department settlement, 80,000 people died from overdoses involving pain pills, federal data shows.
Also, in striking these settlements, government officials have agreed to demands by drug companies that information gathered during legal discovery about corporate practices be sealed. Three years after Kentucky settled its lawsuit against Purdue Pharma, a media organization that covers health care, STAT, won a court order this month that will result in the release of records from that case. Those records include the pretrial testimony of Richard Sackler, the son of a founder of Purdue Pharma and the company’s president when the abuse of OxyContin was becoming rampant.
Excerpt from https://www.nytimes.com/2018/12/26/opinion/opioids-lawsuits-purdue-pharma.html?action=click&module=Opinion&pgtype=Homepage
Public officials and plaintiffs’ lawyers, by failing to use lawsuits to hold the opioid industry to account, have allowed a containable crisis to mushroom into catastrophe. Repeatedly, they ended lawsuits quickly for the sake of political and financial expediency rather than digging out information that would have alerted the public to the dangers of these drugs.
Consider the case of Florida, which in 2001 became one of the first states to investigate Purdue Pharma. Its attorney general at the time, Robert Butterworth, pointing to a growing number of overdose deaths, declared that he would discover when Purdue Pharma first knew about OxyContin’s abuse.
That never happened. Instead, state investigators interviewed only a single former OxyContin sales representative, and Mr. Butterworth, who was running for a State Senate seat, ended the case soon after it was filed.
He lost his election and the case’s settlement proved empty. While Purdue Pharma agreed to pay $2 million to fund a system that would monitor how Florida doctors prescribed opioids, state legislators blocked its creation. David Aronberg, the state attorney for Palm Beach County, told me that nearly all of the $2 million was returned to the drug company and Florida went on become a major center of the opioid crisis.
The decision by Justice Department officials in 2007 to forgo felony charges against the executives of Purdue Pharma also resulted in the loss of a critical chance to slow the epidemic’s trajectory. Without a public trial, doctors remained unaware about the extent of Purdue Pharma’s deceptions and increasingly prescribe opioids. During the five years that followed the Justice Department settlement, 80,000 people died from overdoses involving pain pills, federal data shows.
Also, in striking these settlements, government officials have agreed to demands by drug companies that information gathered during legal discovery about corporate practices be sealed. Three years after Kentucky settled its lawsuit against Purdue Pharma, a media organization that covers health care, STAT, won a court order this month that will result in the release of records from that case. Those records include the pretrial testimony of Richard Sackler, the son of a founder of Purdue Pharma and the company’s president when the abuse of OxyContin was becoming rampant.
Excerpt from https://www.nytimes.com/2018/12/26/opinion/opioids-lawsuits-purdue-pharma.html?action=click&module=Opinion&pgtype=Homepage
Barry Lynn's end-of-year list of best anti-monopoly books
The early days of winter are a great time to catch up on your anti-monopoly studies. The days are cold and drear, and the nights dark and long, which make smoldering anger and fiery prose a welcome addition to the home of any true believer in liberty and democracy. A few of our favorites:
The Curse of Bigness: Antitrust in the New Gilded Age, Columbia Global Reports, Tim Wu
An elegant primer for all to understand the thinking that underlays America’s anti-monopoly traditions and the many dangers of concentrated corporate power.
The Myth of Capitalism: Monopolies and the Death of Competition, Wiley, Jonathan Tepper with Denise Hearn
Tepper and Hearn use the growing body of social science research, indicating that America’s economy is structured to favor fewer and fewer corporations, to show how monopolies and oligopolies exacerbate inequality, cut growth and wages, and hurt entrepreneurs.
Globalists: The End of Empire and the Birth of Neoliberalism, Harvard University Press, Quinn Slobodian
A strong history of neoliberalism, including a chronicle of the post-World War I origins of the Geneva School of neoliberal thought. Slobodian details how the ultimate goal of neoliberalism is not to establish market relations and market logic, but to shield markets and private property from democracy.
The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power, PublicAffairs, Shoshana Zuboff (January 15, 2019)
Zuboff coined the term "surveillance capitalism" and in this book she details how platform monopolists use their systems to control and exploit an extensive range of human behavior, information, and experience for private gain.
Winners Take All: The Elite Charade of Changing the World, Alfred A. Knopf, Anand Giridharadas
A powerful critique of elite “thought leaders” who spend their professional careers consolidating power and control in the hands of the few, then pretend to make the world a better place through extracurricular activities like philanthropy.
From: https://outlook.live.com/mail/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgACGgVq4gAAAA%3D%3D
The early days of winter are a great time to catch up on your anti-monopoly studies. The days are cold and drear, and the nights dark and long, which make smoldering anger and fiery prose a welcome addition to the home of any true believer in liberty and democracy. A few of our favorites:
The Curse of Bigness: Antitrust in the New Gilded Age, Columbia Global Reports, Tim Wu
An elegant primer for all to understand the thinking that underlays America’s anti-monopoly traditions and the many dangers of concentrated corporate power.
The Myth of Capitalism: Monopolies and the Death of Competition, Wiley, Jonathan Tepper with Denise Hearn
Tepper and Hearn use the growing body of social science research, indicating that America’s economy is structured to favor fewer and fewer corporations, to show how monopolies and oligopolies exacerbate inequality, cut growth and wages, and hurt entrepreneurs.
Globalists: The End of Empire and the Birth of Neoliberalism, Harvard University Press, Quinn Slobodian
A strong history of neoliberalism, including a chronicle of the post-World War I origins of the Geneva School of neoliberal thought. Slobodian details how the ultimate goal of neoliberalism is not to establish market relations and market logic, but to shield markets and private property from democracy.
The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power, PublicAffairs, Shoshana Zuboff (January 15, 2019)
Zuboff coined the term "surveillance capitalism" and in this book she details how platform monopolists use their systems to control and exploit an extensive range of human behavior, information, and experience for private gain.
Winners Take All: The Elite Charade of Changing the World, Alfred A. Knopf, Anand Giridharadas
A powerful critique of elite “thought leaders” who spend their professional careers consolidating power and control in the hands of the few, then pretend to make the world a better place through extracurricular activities like philanthropy.
From: https://outlook.live.com/mail/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgACGgVq4gAAAA%3D%3D
Rent-A-Center, perennial Christmas grinch
In a current California class-action lawsuit against Rent-A-Center, lawyers argue that the company’s customers, a disproportionate number of whom are people of color, are charged prices that violate the state’s rent-to-own pricing laws. The legal documents say that a Rent-A-Center in Northern California ultimately charged, after installments, $1,379.54 for an Xbox that normally retails at $299.99, and $2,834.19 for a television that sells for $717.60.
The docket and Court filings are at https://dockets.justia.com/docket/california/candce/3:2017cv02335/310704
The FTC and State AGs have been active concerning the company's pricing a credit practices. See https://www.nerdwallet.com/blog/finance/rent-a-center-complaints-lawsuits/
In a current California class-action lawsuit against Rent-A-Center, lawyers argue that the company’s customers, a disproportionate number of whom are people of color, are charged prices that violate the state’s rent-to-own pricing laws. The legal documents say that a Rent-A-Center in Northern California ultimately charged, after installments, $1,379.54 for an Xbox that normally retails at $299.99, and $2,834.19 for a television that sells for $717.60.
The docket and Court filings are at https://dockets.justia.com/docket/california/candce/3:2017cv02335/310704
The FTC and State AGs have been active concerning the company's pricing a credit practices. See https://www.nerdwallet.com/blog/finance/rent-a-center-complaints-lawsuits/
The Complaint recently filed by DC AG Racine against Facebook is here :
http://oag.dc.gov/sites/default/files/2018-12/Facebook-Complaint.pdf
“Facebook failed to protect the privacy of its users and deceived them about who had access to their data and how it was used,” AG Racine said in a statement.
New York City council members railed against Amazon in a December 12 hearing
From article By Shirin Ghaffary Dec 12, 2018
Members of a New York City council committee denounced terms of the recent Amazon HQ2 deal in the first of three public hearings being held about the plans.
“We are not in the business of corporate welfare here at the city council,” said City Council Speaker Corey Johnson, referencing the up to $3 billion in government subsidiesthe company will receive. Johnson, one of the fiercest critics of the deal, spoke at the council’s Committee on Economic Development hearing on Wednesday at City Hall.
Amazon says the move will bring at least 25,000 jobs to the city over the next decade and $27.5 billion in state and city revenue in the next 25 years. Johnson contested these numbers at the hearing, saying they warrant an outside independent verification beyond the report the state commissioned.
Johnson and other council members were upset about being denied oversight of the plan — but that wasn’t on Amazon alone. Both New York City Mayor Bill de Blasio and New York Governor Andrew Cuomo worked together with Amazon to bypass the standard review processes that would have given the city council a chance to veto or even review the deal. The hearing was the first opportunity council members had to publicly and directly vent their frustrations to key people behind the negotiations.
While city council members have threatened to throw a wrench in the process, they’re limited in what they can do. A five-member state board is expected to vote on some aspects of the deal in the new year. Some council members are hoping they can influence new appointees to the board to vote against the plan, but it’s not clear how realistic that outcome is.
One leader from the city’s Economic Development Corporation, James Patchett, who helped work on the deal, took the brunt of the tough questions.
From https://www.recode.net/2018/12/12/18137488/new-york-amazon-hq2-deal-hearing
From article By Shirin Ghaffary Dec 12, 2018
Members of a New York City council committee denounced terms of the recent Amazon HQ2 deal in the first of three public hearings being held about the plans.
“We are not in the business of corporate welfare here at the city council,” said City Council Speaker Corey Johnson, referencing the up to $3 billion in government subsidiesthe company will receive. Johnson, one of the fiercest critics of the deal, spoke at the council’s Committee on Economic Development hearing on Wednesday at City Hall.
Amazon says the move will bring at least 25,000 jobs to the city over the next decade and $27.5 billion in state and city revenue in the next 25 years. Johnson contested these numbers at the hearing, saying they warrant an outside independent verification beyond the report the state commissioned.
Johnson and other council members were upset about being denied oversight of the plan — but that wasn’t on Amazon alone. Both New York City Mayor Bill de Blasio and New York Governor Andrew Cuomo worked together with Amazon to bypass the standard review processes that would have given the city council a chance to veto or even review the deal. The hearing was the first opportunity council members had to publicly and directly vent their frustrations to key people behind the negotiations.
While city council members have threatened to throw a wrench in the process, they’re limited in what they can do. A five-member state board is expected to vote on some aspects of the deal in the new year. Some council members are hoping they can influence new appointees to the board to vote against the plan, but it’s not clear how realistic that outcome is.
One leader from the city’s Economic Development Corporation, James Patchett, who helped work on the deal, took the brunt of the tough questions.
From https://www.recode.net/2018/12/12/18137488/new-york-amazon-hq2-deal-hearing
Is the Altria acquisition of an interest in Juul an antitrust issue?
There are press reports, particularly from Financial Times, that the recent Altria cigarette company's acquisition of some of e-gigarette company Juul's stock includes a standstill provision blocking further acquisition of Juul stock until antitrust issues are cleared with government.
Why the antitrust concern?
Perhaps because, as the FDA's head has explained (see below), five e-cigarette manufacturers represent more than 97 percent of the current market for e-cigs — JUUL, Vuse, MarkTen, Blu, and Logic. As the Huffington Post/Healthline reported last year, large cigarette companies have big interests in e-cigarettes, a rapidly growing market. E-cigarette brand VUSE is owned by R.J. Reynolds Vapor Company, a subsidiary of the tobacco giant Reynolds America. British American Tobacco (BAT), the largest tobacco company in the Europe, owns e-cigarette brand Vype. Blu e-cigarette is owned by Imperial Tobacco, and Altria (formerly Phillip Morris) already owns MarkTen.
So, the acquisition of Juul stock by Altria increases market concentration in e-cigarettes,. But it is not clear whether for antitrust enforcement purposes e-cigarettes are a relevant market and whether the increase in concentration within that market (or a broader market for all tobacco products, or even a possible future market) is significant to antitrust agencies.
But regulatory concern about the consequences of big-company influence on e-cigarette use is not limited to the intellectual silo of antitrust enforcement. Recent FDA information requests about consumer use of e-cigarettes have focused on five large manufacturers, and reflect concerns about the market influence of large companies that are familiar to antitrust enforcers. The FDA, like federal bank regulators, operate on the idea that the largest industry players deserve the closest regulatory scrutiny.
A speech by the FDA head reflects the focus on large manufacturers:
Today, we sent letters to five e-cigarette manufacturers whose products were sold to kids during the enforcement blitz and that, collectively, represent more than 97 percent of the current market for e-cigs — JUUL, Vuse, MarkTen, blu e-cigs, and Logic. These brands will be the initial focus of our attention when it comes to protecting kids. They’re now on notice by the FDA of how their products are being used by youth at disturbing rates. Given the magnitude of the problem, we’re requesting that the manufacturers of these brands and products come back to the FDA in 60 days with robust plans on how they’ll convincingly address the widespread use of their products by minors, or we’ll revisit the FDA’s exercise of enforcement discretion for products currently on the market.
See https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm620185.htm
Posted by Don Allen Resnikoff
From the WSJ: The Food and Drug Administration is backing off a proposal that would have opened up generic companies to possible product-liability lawsuits over drug safety.The FDA had proposed a new federal rule in 2013 that would have allowed people to hold generic-drug companies legally liable for the side effects of medicines. Thursday’s action by the agency withdrew the proposed rule, and keeps generic companies largely impervious to lawsuits.
At issue in the complex matter is whether generic-drug companies are allowed, like brand-name drug companies, to change their drug labels to reflect new safety concerns. Currently, generic-drug companies must follow the labels written by the brand-name companies.
The otherwise arcane issue of drug labels became a major practical issue beginning with a 2011 Supreme Court decision that an injured person can’t bring a claim against generic makers over failure to warn about a drug’s adverse side effects. The court reasoned that generic companies—unlike brand-name companies—shouldn’t be liable because they have no authority to modify their labels.
In 2013, the FDA proposed the rule that would have allowed generic makers to change labels, a step the generic industry largely opposed. Thursday the agency dropped its plans to pursue the new rule.
FDA Commissioner Scott Gottlieb and the FDA’s drug-center director Janet Woodcock said in a statement, “We heard from manufacturers that they believed this change would have imposed on them significant new burdens and liabilities” and that the measure “might have raised the price of generic drugs to patients.”
Excerpt from https://www.wsj.com/articles/fda-withdraws-proposed-rule-that-would-have-exposed-generic-drug-makers-to-liability-11544726478 (paywall)
At issue in the complex matter is whether generic-drug companies are allowed, like brand-name drug companies, to change their drug labels to reflect new safety concerns. Currently, generic-drug companies must follow the labels written by the brand-name companies.
The otherwise arcane issue of drug labels became a major practical issue beginning with a 2011 Supreme Court decision that an injured person can’t bring a claim against generic makers over failure to warn about a drug’s adverse side effects. The court reasoned that generic companies—unlike brand-name companies—shouldn’t be liable because they have no authority to modify their labels.
In 2013, the FDA proposed the rule that would have allowed generic makers to change labels, a step the generic industry largely opposed. Thursday the agency dropped its plans to pursue the new rule.
FDA Commissioner Scott Gottlieb and the FDA’s drug-center director Janet Woodcock said in a statement, “We heard from manufacturers that they believed this change would have imposed on them significant new burdens and liabilities” and that the measure “might have raised the price of generic drugs to patients.”
Excerpt from https://www.wsj.com/articles/fda-withdraws-proposed-rule-that-would-have-exposed-generic-drug-makers-to-liability-11544726478 (paywall)
You think real estate dealings in the US can be rough? Here are real estate sales fraud stories from Russia, told by NYT:
In one common scheme, agents collude with property owners to sell homes and then race to petition judges that the sale should be invalidated because the seller was temporarily insane. Buyers lose their cash, sellers keep the homes and sales agents — and judges who may be in on the scheme — pocket millions of rubles. Buyers may sue to reclaim their money, but the asset that may be the most lucrative for recompense is the apartment, and that is out of reach. Laws routinely protect homeowners in these kind of disputes.
This fraud is prevalent enough that nearly all of the roughly 140,000 transactions annually in Moscow have required sellers to show certificates of sanity in recent years, real estate agents say.
Most fraud involves buildings that are still under construction, where builders offer discounts for prepurchases but often steal the money and declare bankruptcy. The Ministry of Construction reported in August that it has 34,085 open complaints from such transactions.
https://www.nytimes.com/2018/12/25/business/moscow-russia-real-estate.html
In one common scheme, agents collude with property owners to sell homes and then race to petition judges that the sale should be invalidated because the seller was temporarily insane. Buyers lose their cash, sellers keep the homes and sales agents — and judges who may be in on the scheme — pocket millions of rubles. Buyers may sue to reclaim their money, but the asset that may be the most lucrative for recompense is the apartment, and that is out of reach. Laws routinely protect homeowners in these kind of disputes.
This fraud is prevalent enough that nearly all of the roughly 140,000 transactions annually in Moscow have required sellers to show certificates of sanity in recent years, real estate agents say.
Most fraud involves buildings that are still under construction, where builders offer discounts for prepurchases but often steal the money and declare bankruptcy. The Ministry of Construction reported in August that it has 34,085 open complaints from such transactions.
https://www.nytimes.com/2018/12/25/business/moscow-russia-real-estate.html
In the spirit of the holiday season in the USA, 2018:
President Trump questions the existence of Santa Claus, creating doubt about the practice of leaving out milk and cookies on Christmas eve :
https://www.cnn.com/2018/12/25/politics/trump-santa-phone-call/index.html
Some somber seasonal music from Handel's Messiah:
https://www.youtube.com/watch?v=H5-yTzY1dn4
Is the decision of the Texas judge who struck down the ACA a partisan decision?
The New York Times says yes:
https://www.nytimes.com/2018/12/15/opinion/obamacare-unconstitutional-texas-judge.html?action=click&module=Opinion&pgtype=Homepage
The Trump administration, which has long sought to repeal the ACA, applauded Friday’s ruling.
“Wow, but not surprisingly, ObamaCare was just ruled UNCONSTITUTIONAL by a highly respected judge in Texas. Great news for America!” President Trump wrote on Twitter. In a statement, the White House elaborated, saying, “Once again, the President calls on Congress to replace Obamacare and act to protect people with preexisting conditions and provide Americans with quality affordable healthcare.”
The Georgia State AG agrees with the Trump Administration opinion:
https://www.ajc.com/news/opinion/opinion-lawsuit-rule-aca-unconstitutional-will-aid-georgia/1PP6RcRlTNHRGDjDKF0S0J/
The Texas Court's opinion and Order is here:
https://www.documentcloud.org/documents/5629711-Texas-v-US-Partial-Summary-Judgment.html
Simon Johnson on the political power of U.S. banks
Simon Johnson is a leader in bringing competition issues in banking to the attention of the American people. He argues to diverse audiences that banking is controlled by a small number of banks that have outsized political influence. He would like to see big banks controlled by aggressive antitrust enforcement as well as regulatory constraints.
Johnson has an impressive resume. Currently, he is a professor at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. He is a cofounder of the BaselineScenario.com, and a member of the FDIC’s Systemic Resolution Advisory Committee. In 2012, he became a member of the private sector systemic risk council founded by Sheila Bair. In July 2014, he joined the Financial Research Advisory Committee of the US Treasury’s Office of Financial Research (OFR). Also, he served as member of the Congressional Budget Office’s Panel of Economic Advisers from April 2009-April 2015.
Johnson was active in opposing the regulatory rollback that occurred in May, 2018, when Congress rolled back some of the restraints imposed on banks after the 2007-2009 global financial crisis. The rollback included reducing federal oversight of banks with between $50 billion and $250 billion in assets.
Johnson testified in opposition to regulatory rollback legislation. He said that $50 billion, as earlier defined under the Dodd-Frank financial reform legislation, is a sensible threshold at which the Federal Reserve should pay more attention to financial institutions.
Johnson’s recent testimony is illustrative of his broader concerns about the structure of our financial system. As part of earlier testimony to Congress in 2016 [https://financialservices.house.gov/uploadedfiles/hhrg-114-ba19-wstate-sjohnson-20161207.pdf] Johnson argued that the nature and structure of our financial system led to the deep crisis of 2008 and 2009, and still poses real risks to our collective economic future. He argued for overall strengthening rather than weakening financial regulation, with a particular focus on capital requirements. He said:
We should be attempting to strengthen the safeguards in the Dodd-Frank financial reform legislation. Repealing or rolling back that legislation poses a major fiscal risk. . . . [A] financial system with dangerously low capital levels – hence prone to major collapses – creates a nontransparent contingent liability for the federal budget in the United States.
Simon Johnson is author of several influential books. An important book concerning the power of bank and bankers to coopt legislators and regulators, written with co-author Jame Kwak, is 13 Bankers – The Wall Street Takeover and the Next Financial Meltdown.
The Johnson/Kwak book offers an excellent discussion of the run-up to the 2008 financial crisis and government efforts to resolve it, emphasizing problems caused by banks that grew to be very big.
The authors invoke the spirit of U.S. antitrust enforcement of the early 1900s, and urge government regulatory policies that limit bank assets.
Johnson and Kwak argue in their book that U.S. government regulatory policy affecting financial institutions has effectively been captured and controlled by people associated with large banks. Government regulators are portrayed as enablers of the country’s 2008 financial crisis. “The U.S. financial elite . . . constituted an oligarchy – a group that gained political power because of its economic power. . . .[T]he major banks engineered a regulatory climate that allowed them to embark on an orgy of product innovation and risk-taking that would create the largest bubble in modern economic history . . . .”
Johnson and Kwak tell us in 13 Bankers that just a few very large banks dominate the U.S. financial system – hence the book title. When CEOs of the largest U.S. banks were called to Washington in March of 2009 to meet with President Obama and senior government officials to discuss the financial meltdown, there were just thirteen. We learn that at the time of the meeting Bank of America’s assets were 16.4 percent of gross domestic product; J.P. Morgan Chase had 14.7; Citigroup 12.9. As of the end of the third quarter of 2010 Johnson and Kwak believed there were six banks that together have assets in excess of 64% of U.S. GDP.
The authors complain that in the dark days of 2008 and 2009 the government chose to rescue the financial system “by extending a blank check to the largest, most powerful banks in their moment of greatest need. The government chose not to impose conditions [on bail-outs] that could reform the industry or even to replace the management of large failed banks.”
Much has happened since 2010, including passage of Dodd-Frank bank reform legislation – elements of which have been under attack in 2018. It is clear, however, that Simon Johnson continues to be concerned about the continuing great size and political power of U.S. Banks.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Simon Johnson is a leader in bringing competition issues in banking to the attention of the American people. He argues to diverse audiences that banking is controlled by a small number of banks that have outsized political influence. He would like to see big banks controlled by aggressive antitrust enforcement as well as regulatory constraints.
Johnson has an impressive resume. Currently, he is a professor at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. He is a cofounder of the BaselineScenario.com, and a member of the FDIC’s Systemic Resolution Advisory Committee. In 2012, he became a member of the private sector systemic risk council founded by Sheila Bair. In July 2014, he joined the Financial Research Advisory Committee of the US Treasury’s Office of Financial Research (OFR). Also, he served as member of the Congressional Budget Office’s Panel of Economic Advisers from April 2009-April 2015.
Johnson was active in opposing the regulatory rollback that occurred in May, 2018, when Congress rolled back some of the restraints imposed on banks after the 2007-2009 global financial crisis. The rollback included reducing federal oversight of banks with between $50 billion and $250 billion in assets.
Johnson testified in opposition to regulatory rollback legislation. He said that $50 billion, as earlier defined under the Dodd-Frank financial reform legislation, is a sensible threshold at which the Federal Reserve should pay more attention to financial institutions.
Johnson’s recent testimony is illustrative of his broader concerns about the structure of our financial system. As part of earlier testimony to Congress in 2016 [https://financialservices.house.gov/uploadedfiles/hhrg-114-ba19-wstate-sjohnson-20161207.pdf] Johnson argued that the nature and structure of our financial system led to the deep crisis of 2008 and 2009, and still poses real risks to our collective economic future. He argued for overall strengthening rather than weakening financial regulation, with a particular focus on capital requirements. He said:
We should be attempting to strengthen the safeguards in the Dodd-Frank financial reform legislation. Repealing or rolling back that legislation poses a major fiscal risk. . . . [A] financial system with dangerously low capital levels – hence prone to major collapses – creates a nontransparent contingent liability for the federal budget in the United States.
Simon Johnson is author of several influential books. An important book concerning the power of bank and bankers to coopt legislators and regulators, written with co-author Jame Kwak, is 13 Bankers – The Wall Street Takeover and the Next Financial Meltdown.
The Johnson/Kwak book offers an excellent discussion of the run-up to the 2008 financial crisis and government efforts to resolve it, emphasizing problems caused by banks that grew to be very big.
The authors invoke the spirit of U.S. antitrust enforcement of the early 1900s, and urge government regulatory policies that limit bank assets.
Johnson and Kwak argue in their book that U.S. government regulatory policy affecting financial institutions has effectively been captured and controlled by people associated with large banks. Government regulators are portrayed as enablers of the country’s 2008 financial crisis. “The U.S. financial elite . . . constituted an oligarchy – a group that gained political power because of its economic power. . . .[T]he major banks engineered a regulatory climate that allowed them to embark on an orgy of product innovation and risk-taking that would create the largest bubble in modern economic history . . . .”
Johnson and Kwak tell us in 13 Bankers that just a few very large banks dominate the U.S. financial system – hence the book title. When CEOs of the largest U.S. banks were called to Washington in March of 2009 to meet with President Obama and senior government officials to discuss the financial meltdown, there were just thirteen. We learn that at the time of the meeting Bank of America’s assets were 16.4 percent of gross domestic product; J.P. Morgan Chase had 14.7; Citigroup 12.9. As of the end of the third quarter of 2010 Johnson and Kwak believed there were six banks that together have assets in excess of 64% of U.S. GDP.
The authors complain that in the dark days of 2008 and 2009 the government chose to rescue the financial system “by extending a blank check to the largest, most powerful banks in their moment of greatest need. The government chose not to impose conditions [on bail-outs] that could reform the industry or even to replace the management of large failed banks.”
Much has happened since 2010, including passage of Dodd-Frank bank reform legislation – elements of which have been under attack in 2018. It is clear, however, that Simon Johnson continues to be concerned about the continuing great size and political power of U.S. Banks.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Regulation shortfall for dementia care
Assisted living facilities were originally designed for people who were largely independent but required help bathing, eating or other daily tasks. Unlike nursing homes, the facilities generally do not provide skilled medical care or therapy, and stays are not paid for by Medicare or Medicaid.
Dementia care is the fastest-growing segment of assisted living. But as these residences market themselves to people with Alzheimer’s and other types of dementia, facilities across the country are straining to deliver on their promises of security and attentive care, according to a Kaiser Health News analysis of inspection records in the three most populous states.
In California, 45 percent of assisted living facilities have violated one or more state dementia regulations during the last five years. Three of the 12 most common California citations in 2017 were related to dementia care.
In Florida, one in every 11 assisted living facilities has been cited since 2013 for not meeting state rules designed to prevent residents from wandering away.
And in Texas, nearly a quarter of the facilities that accept residents with Alzheimer’s have violated one or more state rules related to dementia care, such as tailoring a plan for each resident upon admission or ensuring that staff members have completed special training, according to nearly six years of records.
“There is a belief in our office that many facilities do not staff to the level” necessary to meet the unanticipated “needs of residents, especially medical needs,” said Fred Steele, Oregon’s long-term-care ombudsman. “Many of these are for-profit entities. They are setting staffing ratios that maybe aren’t being set because of the care needs of the residents but are more about the bottom line of their profits.”
Uneven Regulation
These concerns, though particularly acute for people with dementia, apply to all assisted living residents. They are older and frailer than assisted living residents were a generation ago. Within a year, one in five has a fall, one in eight has an emergency room visit and one in 12 has an overnight hospital stay, according to the Centers for Disease Control and Prevention. Half are over 85.
“Assisted living was created to be an alternative to nursing homes, but if you walk into some of the big assisted living facilities, they sure feel like a nursing home,” said Doug Pace, director for mission partnerships with the Alzheimer’s Association.
Yet the rules for assisted living remain looser than for nursing homes. The federal government does not license or oversee assisted living facilities, and states set minimal rules.
From https://www.nytimes.com/2018/12/13/business/assisted-living-violations-dementia-alzheimers.html
Assisted living facilities were originally designed for people who were largely independent but required help bathing, eating or other daily tasks. Unlike nursing homes, the facilities generally do not provide skilled medical care or therapy, and stays are not paid for by Medicare or Medicaid.
Dementia care is the fastest-growing segment of assisted living. But as these residences market themselves to people with Alzheimer’s and other types of dementia, facilities across the country are straining to deliver on their promises of security and attentive care, according to a Kaiser Health News analysis of inspection records in the three most populous states.
In California, 45 percent of assisted living facilities have violated one or more state dementia regulations during the last five years. Three of the 12 most common California citations in 2017 were related to dementia care.
In Florida, one in every 11 assisted living facilities has been cited since 2013 for not meeting state rules designed to prevent residents from wandering away.
And in Texas, nearly a quarter of the facilities that accept residents with Alzheimer’s have violated one or more state rules related to dementia care, such as tailoring a plan for each resident upon admission or ensuring that staff members have completed special training, according to nearly six years of records.
“There is a belief in our office that many facilities do not staff to the level” necessary to meet the unanticipated “needs of residents, especially medical needs,” said Fred Steele, Oregon’s long-term-care ombudsman. “Many of these are for-profit entities. They are setting staffing ratios that maybe aren’t being set because of the care needs of the residents but are more about the bottom line of their profits.”
Uneven Regulation
These concerns, though particularly acute for people with dementia, apply to all assisted living residents. They are older and frailer than assisted living residents were a generation ago. Within a year, one in five has a fall, one in eight has an emergency room visit and one in 12 has an overnight hospital stay, according to the Centers for Disease Control and Prevention. Half are over 85.
“Assisted living was created to be an alternative to nursing homes, but if you walk into some of the big assisted living facilities, they sure feel like a nursing home,” said Doug Pace, director for mission partnerships with the Alzheimer’s Association.
Yet the rules for assisted living remain looser than for nursing homes. The federal government does not license or oversee assisted living facilities, and states set minimal rules.
From https://www.nytimes.com/2018/12/13/business/assisted-living-violations-dementia-alzheimers.html
Lina Khan on Radical Antitrust and the Consumer Welfare Standard
Lina Khan spoke at "Charles River Associate's Annual Brussels Conference: Economic Developments in Competition Policy, 2018" on a panel which asked "Do We Need a 'Radical Antitrust' Answer to 'Populist Antitrust?'" Khan discussed some criticisms of the consumer welfare standard, how competition policy extends beyond antitrust law, and how the legal structure of antitrust enforcement could benefit from more active competition rulemaking from the FTC.
See https://www.youtube.com/watch?v=GVw6HR5duPk&feature=youtu.be
Lina Khan spoke at "Charles River Associate's Annual Brussels Conference: Economic Developments in Competition Policy, 2018" on a panel which asked "Do We Need a 'Radical Antitrust' Answer to 'Populist Antitrust?'" Khan discussed some criticisms of the consumer welfare standard, how competition policy extends beyond antitrust law, and how the legal structure of antitrust enforcement could benefit from more active competition rulemaking from the FTC.
See https://www.youtube.com/watch?v=GVw6HR5duPk&feature=youtu.be
Jack Bogle’s warning about dominant index funds
Bogle, who founded The Vanguard Group in 1974, wrote Thursday in The Wall Street Journal [https://www.wsj.com/articles/bogle-sounds-a-warning-on-index-funds-1543504551] that if current trends continue, index funds will soon own half of all U.S. stocks. He thinks that could lead to a dangerous vacuum in corporate governance – with nobody to effectively police the corporate executives who run America’s largest companies.
“Public policy cannot ignore this growing dominance, and consider its impact on the financial markets, corporate governance, and regulation,” he wrote. “These will be major issues in the coming era.”
Over the past few decades indexing’s popularity has soared. Holdings have trended steadily upwards, from 4.5% of total U.S. stock market value in 2002 to 9% by 2009. Stock index fund assets now total $4.6 trillion, and their overall percentage of total stock market value has almost doubled again in the last decade to 17%.
Index funds’ growth has had some unintended consequences. As Bogle points out, there are three index fund managers who dominate the field: Vanguard has a 51% share of the market, followed by BlackRock with 21%, and State Street Global with 9%.
There are significant obstacles to becoming a major player, however, so it’s not likely any new competitors will reduce the huge concentration enjoyed by these big powerhouses.
While most economists expect the share of corporate ownership by index funds to increase further over the next decade, index mutual funds will no doubt rise above 50% of total market value – between 2021 and 2024, according to Moody’s. [https://www.reuters.com/article/us-funds-passive/index-funds-to-surpass-active-fund-assets-in-u-s-by-2024-moodys-idUSKBN15H1PN ] That means the so-called ‘Big Three’ would own over 30% of the U.S. stock market, which Bogle says gives them effective control. “I do not believe that such concentration would serve the national interest.”
If historical patterns hold, index funds’ popularity could soon become a problem, Bogle argues. “A handful of giant institutional investors will one day hold voting control of virtually every large U.S. corporation.”
That might leave a power vacuum, leaving corporate chieftains unaccountable. CEOs who run companies supposed to answer to boards of directors, who are in turn elected by shareholders. Index funds are the biggest shareholders at most companies though. In theory, funds are supposed to vote their shares on behalf of their own investors – everyday workers who own fund shares in a 401(k) or IRA account. But there’s a wrinkle: Index funds’ investing strategy revolves around passively buying every stock in the market, while holding cost down as low as possible. The upshot is that they have little wherewithal or incentive to keep tabs on CEOs or other corporate managers.
Excerpts above are from: http://time.com/money/5468239/jack-bogle-index-funds-problem/
Thanks to Newsletter reader Gary Sunden for pointing out the WSJ article. DR
Bogle, who founded The Vanguard Group in 1974, wrote Thursday in The Wall Street Journal [https://www.wsj.com/articles/bogle-sounds-a-warning-on-index-funds-1543504551] that if current trends continue, index funds will soon own half of all U.S. stocks. He thinks that could lead to a dangerous vacuum in corporate governance – with nobody to effectively police the corporate executives who run America’s largest companies.
“Public policy cannot ignore this growing dominance, and consider its impact on the financial markets, corporate governance, and regulation,” he wrote. “These will be major issues in the coming era.”
Over the past few decades indexing’s popularity has soared. Holdings have trended steadily upwards, from 4.5% of total U.S. stock market value in 2002 to 9% by 2009. Stock index fund assets now total $4.6 trillion, and their overall percentage of total stock market value has almost doubled again in the last decade to 17%.
Index funds’ growth has had some unintended consequences. As Bogle points out, there are three index fund managers who dominate the field: Vanguard has a 51% share of the market, followed by BlackRock with 21%, and State Street Global with 9%.
There are significant obstacles to becoming a major player, however, so it’s not likely any new competitors will reduce the huge concentration enjoyed by these big powerhouses.
While most economists expect the share of corporate ownership by index funds to increase further over the next decade, index mutual funds will no doubt rise above 50% of total market value – between 2021 and 2024, according to Moody’s. [https://www.reuters.com/article/us-funds-passive/index-funds-to-surpass-active-fund-assets-in-u-s-by-2024-moodys-idUSKBN15H1PN ] That means the so-called ‘Big Three’ would own over 30% of the U.S. stock market, which Bogle says gives them effective control. “I do not believe that such concentration would serve the national interest.”
If historical patterns hold, index funds’ popularity could soon become a problem, Bogle argues. “A handful of giant institutional investors will one day hold voting control of virtually every large U.S. corporation.”
That might leave a power vacuum, leaving corporate chieftains unaccountable. CEOs who run companies supposed to answer to boards of directors, who are in turn elected by shareholders. Index funds are the biggest shareholders at most companies though. In theory, funds are supposed to vote their shares on behalf of their own investors – everyday workers who own fund shares in a 401(k) or IRA account. But there’s a wrinkle: Index funds’ investing strategy revolves around passively buying every stock in the market, while holding cost down as low as possible. The upshot is that they have little wherewithal or incentive to keep tabs on CEOs or other corporate managers.
Excerpts above are from: http://time.com/money/5468239/jack-bogle-index-funds-problem/
Thanks to Newsletter reader Gary Sunden for pointing out the WSJ article. DR
Einer Elhauge:
HOW HORIZONTAL SHAREHOLDING HARMS OUR ECONOMY—AND WHY ANTITRUST LAW CAN FIX IT
When the leading shareholders of horizontal competitors overlap, horizontal shareholding exists. In Elhauge’s earlier Harvard Law Review article on horizontal shareholding, he argued that economic theory and two industry studies indicated that high levels of horizontal shareholding in concentrated product markets can have anticompetitive effects, even when each individual horizontal shareholder has a minority stake.
Elhauge argued that those anticompetitive effects could help explain high executive compensation rewards executives despite lack of performance, and the historic increase in the gap between corporate profits and investment, and the recent rise in economic inequality.
He also argued that when horizontal shareholding has likely anticompetitive effects, it can be remedied under Clayton Act §7. He recommended that antitrust agencies should investigate any horizontal stock acquisitions that result in high product market concentration.
In a new article, Elhauge argues that new proofs and empirical evidence strongly confirm his earlier claims.
The new article can be found at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3293822
Note from Editor Don Allen Resnikoff: Following is the first of several posts reviewing books by advocates for antitrust enforcement reform who were leaders in a movement to bring the political significance of antitrust enforcement to the attention of the general public
Cornered – the New Monopoly Capitalism and the Economics of Destruction ,
Barry Lynn, John Wiley & Sons, Inc., 2010, 311 pages
Lynn’s background is as a business journalist who is comfortable speaking to a broad audience, clearly and persuasively. He studies industries with a journalist’s eye for detail, but is not bound by conventional wisdom of antitrust lawyers and economists. Currently he directs the Open Markets Institute, and is active researching and writing about big company power. Lynn’s work has gotten much public attention. His work has been profiled on CBS and in the New York Times, and his articles have appeared in publications including Harper’s, the Financial Times, Harvard Business Review, and Foreign Policy. He frequently addresses public forums.
In his 2010 Cornered book Lynn presents a theme that he has since forcefully pressed: concentrated power of big companies in the U.S. economy is causing great harm. The harm he sees ranges from the broadly political – loss of individual liberties -- to physical injury of consumers. He advocates drastic reform of antitrust enforcement, and broad political reform.
Lynn’s book includes many points of continuing relevance. Lynn addresses the entrenched consumer welfare oriented view of antitrust enforcement litigation that focuses on efficiency and prices to consumers. He argues for a return to antitrust enforcement based on social and political values.
Barry Lynn would like to see antitrust enforcement revised, but he wants more. He also would like broad reform of politics in the United States, because “our political economy is run by a compact elite that is able to fuse the power of our public government with the power of private corporate governments . . . .”
Cornered supports Franklin Roosevelt era New Deal reforms: “In instance after instance, the reforms aimed not to lower prices for consumers but to fortify systems of checks and balances, create systems of personal and local ownership, and force large governmental institutions, both public and private, to compete.” New Deal reformers worked to create “a political framework that successfully protected the individual citizen from being crushed” by concentrated industrial forces. A key is a political system organized around “open markets.”
But, Lynn explains, the New Deal reform efforts have been largely squelched. Power is “concentrated once more in the capitalist alone, who is the one actor . . . served . . . by reducing the number of workers . . . and by stripping out the various forms of wealth . . . .” Control over important property interests is “shared among an immensely powerful class [of people] that has largely communalized all its holdings . . . [T]he interest remains only to maximize capital and hence power, even if this means tossing another factory or two full of perfectly necessary machines on the scrap heap.” The author tells us that a financier class holds great power and doesn't care much about preserving domestic factory production.
Lynn worried about concentration in various industries that remain a problem today, even if some details have changed.
One problematic industry is poultry production. Lynn was concerned that in poultry farming, as in pig, dairy, and some other areas of farming, a few large companies effectively control the business of the farmers that provide the relevant product. In addition, Lynn said that the giant poultry companies respect each other’s market territories and avoid competition with each other.
Health insurance is another industry that concerned Lynn: “A 2006 study revealed that in 166 of the top 294 metropolitan areas, a single insurer controls more than half of the HMO and preferred provider business.”
Lynn also complained about mergers of large financial institutions, the “too big to fail,” banks that led to the financial crisis of 2008. Lynn complains that even following the financial “meltdown” of 2008 the U.S. government “responded to the collapse of our financial system in most instances by accelerating consolidation. . . .” Government money was used “to broker and subsidize such whopping mergers as the Wells Fargo takeover of Wachovia, the JPMorgan Chase acquisition of Washington Mutual and Bear Stearns, and Bank of America’s absorption of Countrywide Financial and Merrill Lynch . . . .”
Cornered presents some unconventional approaches to antitrust and political policy. Lynn worries that U.S. industry is not only highly monopolized, but dangerously reliant on systems involving extensive outsourcing and fragile supply chains. The Cornered book explains that fragile supply chains result in products of unpredictable availability and poor quality.
The author explains that even as much industrial production shifts away from the United States to China and other places, some American companies may control the bottleneck of supplying U.S. and other consumers. These companies may sit atop a hierarchy of power, in the manner Lynn ascribed to Wal-Mart: Wal-Mart “sits atop the entire system [of product distribution], where it determines . . . who shall make what and how much they shall earn, and who shall buy what and how much they shall pay.”
The Cornered book tells us that some other U.S. companies, including manufacturers, import products that they “snap together” or otherwise organize for resale. For example, Boeing has applied an import and assemble manufacturing philosophy in construction of passenger aircraft.
Some industry facts have changed since 2010, such as the rise of Amazon. But Lynn’s factual observations concerning outsourcing and fragile supply chains continue to challenge antitrust enforcers to take a fresh look at how modern industries work. His observations about industry systems suggest that antitrust enforcers need to examine the relationships among companies at different levels in the distribution chain. In examining the competitive impact of Wal-Mart conduct, for example, its relations with suppliers can be important.
Some antitrust analysts have discussed outsourcing and supply chain issues like those presented in Cornered. Their comments often tend to suggest that the supply chain issues Lynn identifies are not within the scope of antitrust enforcement. But Bert Foer wrote an article some years ago that takes Lynn’s supply chain points seriously. The article is called Mr. Magoo Visits Wal-Mart: Finding the Right Lens for Antitrust. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1103609
Foer’s article explains that “Wal-Mart is the leading example of a firm whose scale and strategy give it the ability to exercise extraordinary influence over its supply chain.” The article asks “to what extent are the criticized actions [of Wal-Mart] susceptible to treatment under the antitrust laws?” Referring to material in Lynn’s book End of the Line, Foer says that “The transformation of supply lines that Lynn describes can be seen as part of a movement toward tighter and relatively more closed systems which is rapidly changing the way business is done. It should lead antitrust experts to question whether the tools that were developed during a long era of more independent companies acting competitively rather than as integrated segments of large networks, are still adequate.” See also Bert Foer’s comments at URL https://www.ftc.gov/policy/public-comments/2018/08/19/comment-ftc-2018-0054-d-0007 (“The evidence and analysis of monopsony power, including but not limited to, in labor markets”)
Lynn closes his Cornered book with an upbeat if general suggestion that the American people have the ability to reverse the consolidation of power he describes, and “retake control of our political economy.” While It is not clear precisely what actions he expects his audience to take, he does invite us to look at competition issues from outside of the Chicago-Harvard consumer welfare, efficiency, price-oriented enforcement consensus. He asks us to embrace the idea that antitrust enforcement properly has social and political goals. He invites us to study closely the facts of industries, and politics, and encourages us to work to fix what he sees as broken.
In 2010 Lynn worried about a lack of public awareness of much recent industry concentration: “The making of monopoly . . . is once again the business of business in America. Increasingly, it seems, everyone knows this except the American people.” It is fair to say that since then Barry Lynn is one of the people who has done much to increase public awareness.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Cornered – the New Monopoly Capitalism and the Economics of Destruction ,
Barry Lynn, John Wiley & Sons, Inc., 2010, 311 pages
Lynn’s background is as a business journalist who is comfortable speaking to a broad audience, clearly and persuasively. He studies industries with a journalist’s eye for detail, but is not bound by conventional wisdom of antitrust lawyers and economists. Currently he directs the Open Markets Institute, and is active researching and writing about big company power. Lynn’s work has gotten much public attention. His work has been profiled on CBS and in the New York Times, and his articles have appeared in publications including Harper’s, the Financial Times, Harvard Business Review, and Foreign Policy. He frequently addresses public forums.
In his 2010 Cornered book Lynn presents a theme that he has since forcefully pressed: concentrated power of big companies in the U.S. economy is causing great harm. The harm he sees ranges from the broadly political – loss of individual liberties -- to physical injury of consumers. He advocates drastic reform of antitrust enforcement, and broad political reform.
Lynn’s book includes many points of continuing relevance. Lynn addresses the entrenched consumer welfare oriented view of antitrust enforcement litigation that focuses on efficiency and prices to consumers. He argues for a return to antitrust enforcement based on social and political values.
Barry Lynn would like to see antitrust enforcement revised, but he wants more. He also would like broad reform of politics in the United States, because “our political economy is run by a compact elite that is able to fuse the power of our public government with the power of private corporate governments . . . .”
Cornered supports Franklin Roosevelt era New Deal reforms: “In instance after instance, the reforms aimed not to lower prices for consumers but to fortify systems of checks and balances, create systems of personal and local ownership, and force large governmental institutions, both public and private, to compete.” New Deal reformers worked to create “a political framework that successfully protected the individual citizen from being crushed” by concentrated industrial forces. A key is a political system organized around “open markets.”
But, Lynn explains, the New Deal reform efforts have been largely squelched. Power is “concentrated once more in the capitalist alone, who is the one actor . . . served . . . by reducing the number of workers . . . and by stripping out the various forms of wealth . . . .” Control over important property interests is “shared among an immensely powerful class [of people] that has largely communalized all its holdings . . . [T]he interest remains only to maximize capital and hence power, even if this means tossing another factory or two full of perfectly necessary machines on the scrap heap.” The author tells us that a financier class holds great power and doesn't care much about preserving domestic factory production.
Lynn worried about concentration in various industries that remain a problem today, even if some details have changed.
One problematic industry is poultry production. Lynn was concerned that in poultry farming, as in pig, dairy, and some other areas of farming, a few large companies effectively control the business of the farmers that provide the relevant product. In addition, Lynn said that the giant poultry companies respect each other’s market territories and avoid competition with each other.
Health insurance is another industry that concerned Lynn: “A 2006 study revealed that in 166 of the top 294 metropolitan areas, a single insurer controls more than half of the HMO and preferred provider business.”
Lynn also complained about mergers of large financial institutions, the “too big to fail,” banks that led to the financial crisis of 2008. Lynn complains that even following the financial “meltdown” of 2008 the U.S. government “responded to the collapse of our financial system in most instances by accelerating consolidation. . . .” Government money was used “to broker and subsidize such whopping mergers as the Wells Fargo takeover of Wachovia, the JPMorgan Chase acquisition of Washington Mutual and Bear Stearns, and Bank of America’s absorption of Countrywide Financial and Merrill Lynch . . . .”
Cornered presents some unconventional approaches to antitrust and political policy. Lynn worries that U.S. industry is not only highly monopolized, but dangerously reliant on systems involving extensive outsourcing and fragile supply chains. The Cornered book explains that fragile supply chains result in products of unpredictable availability and poor quality.
The author explains that even as much industrial production shifts away from the United States to China and other places, some American companies may control the bottleneck of supplying U.S. and other consumers. These companies may sit atop a hierarchy of power, in the manner Lynn ascribed to Wal-Mart: Wal-Mart “sits atop the entire system [of product distribution], where it determines . . . who shall make what and how much they shall earn, and who shall buy what and how much they shall pay.”
The Cornered book tells us that some other U.S. companies, including manufacturers, import products that they “snap together” or otherwise organize for resale. For example, Boeing has applied an import and assemble manufacturing philosophy in construction of passenger aircraft.
Some industry facts have changed since 2010, such as the rise of Amazon. But Lynn’s factual observations concerning outsourcing and fragile supply chains continue to challenge antitrust enforcers to take a fresh look at how modern industries work. His observations about industry systems suggest that antitrust enforcers need to examine the relationships among companies at different levels in the distribution chain. In examining the competitive impact of Wal-Mart conduct, for example, its relations with suppliers can be important.
Some antitrust analysts have discussed outsourcing and supply chain issues like those presented in Cornered. Their comments often tend to suggest that the supply chain issues Lynn identifies are not within the scope of antitrust enforcement. But Bert Foer wrote an article some years ago that takes Lynn’s supply chain points seriously. The article is called Mr. Magoo Visits Wal-Mart: Finding the Right Lens for Antitrust. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1103609
Foer’s article explains that “Wal-Mart is the leading example of a firm whose scale and strategy give it the ability to exercise extraordinary influence over its supply chain.” The article asks “to what extent are the criticized actions [of Wal-Mart] susceptible to treatment under the antitrust laws?” Referring to material in Lynn’s book End of the Line, Foer says that “The transformation of supply lines that Lynn describes can be seen as part of a movement toward tighter and relatively more closed systems which is rapidly changing the way business is done. It should lead antitrust experts to question whether the tools that were developed during a long era of more independent companies acting competitively rather than as integrated segments of large networks, are still adequate.” See also Bert Foer’s comments at URL https://www.ftc.gov/policy/public-comments/2018/08/19/comment-ftc-2018-0054-d-0007 (“The evidence and analysis of monopsony power, including but not limited to, in labor markets”)
Lynn closes his Cornered book with an upbeat if general suggestion that the American people have the ability to reverse the consolidation of power he describes, and “retake control of our political economy.” While It is not clear precisely what actions he expects his audience to take, he does invite us to look at competition issues from outside of the Chicago-Harvard consumer welfare, efficiency, price-oriented enforcement consensus. He asks us to embrace the idea that antitrust enforcement properly has social and political goals. He invites us to study closely the facts of industries, and politics, and encourages us to work to fix what he sees as broken.
In 2010 Lynn worried about a lack of public awareness of much recent industry concentration: “The making of monopoly . . . is once again the business of business in America. Increasingly, it seems, everyone knows this except the American people.” It is fair to say that since then Barry Lynn is one of the people who has done much to increase public awareness.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Tweets about CFPB, retweeted by Jeff Sovern
Christopher Peterson, @PetersonLawProf
Today @CFPB settled a case against State Farm Bank for illegal credit report practices. Instead of holding the bank accountable, @CFPB imposed no fines or restitution at all. ZERO. The multi-billion dollar bank paid less than a parking ticket.
Ed Mierzwinski, @edmpirg
We [at USPIRG]anticipated @senatemajldr would force a vote to make the unqualified @KathyKraninger the @CFPB director so we have a new report offering ideas for states, counties and cities to fill the #ProtectConsumers gap.
Christopher Peterson, @PetersonLawProf
Today @CFPB settled a case against State Farm Bank for illegal credit report practices. Instead of holding the bank accountable, @CFPB imposed no fines or restitution at all. ZERO. The multi-billion dollar bank paid less than a parking ticket.
Ed Mierzwinski, @edmpirg
We [at USPIRG]anticipated @senatemajldr would force a vote to make the unqualified @KathyKraninger the @CFPB director so we have a new report offering ideas for states, counties and cities to fill the #ProtectConsumers gap.
Tim Wu: Antitrust’s 10 Most Wanted
Excerpts from Medium.com article (URL below)
An increasing number of industries are dominated by oligopolies and monopolies. Compiled here are firms or industries that are ripe for investigation.
1. Amazon
Amazon has taken a dominant share of online retail in part through the acquisition of competitors. Its practice of aggressively copying successful marketplace products has similarly raised questions as has its bullying of smaller brands, its efforts to control pricing on competing platforms through “most favored nation” contracts, and aggressive use of 18-month noncompete agreements.
2. AT&T/WarnerMedia
AT&T, the one-time telephone monopolist broken up in the 1980s, has moved into television. Since acquiring Time Warner and HBO for $85.4 billion this year, AT&T has begun using HBO as a club against Dish and Dish Sling.
3. Big Agriculture
Over the last five years, the agricultural seed, fertilizer, and chemical industry has consolidated into four global giants: BASF, Bayer, DowDuPont, and ChemChina. According to the U.S. Department of Agriculture, seed prices have tripled since the 1990s, and since the mergers, fertilizer prices are up as well.
4. Big Pharma
The pharmaceutical industry has a long track record of anticompetitive and extortionary practices, including the abuse of patent rights for anticompetitive purposes and various forms of price gouging.
Can something be done about pharmaceutical price gouging on drugs that are out of patent or, perhaps more broadly, the extortionate increases in the prices of prescription drugs?
5. Facebook
Should the Instagram and WhatsApp mergers be retroactively dissolved (effectively breaking up the company)? Did Facebook use its market power and control of Instagram and Instagram Stories to illegally diminish Snapchat from 2016–2018?
6. Google
On its way to becoming the search monopoly, Google acquired advertising competitors iMob and DoubleClick along with rival Waze and other potential competitors. Has Google anticompetitively excluded its rivals?
7. Ticketmaster/Live Nation
Has Live Nation used its power as a promoter to protect Ticketmaster’s monopoly on sales? Was Songkick the victim of an illegal exclusion campaign? Should the Ticketmaster/Live Nation union be dissolved?
8. T-Mobile/Sprint
In what appears to be a straightforward anticompetitive merger, the two carriers are attempting to merge to reduce the wireless market to three major firms (AT&T, Verizon, and Sprint/T-Mobile).
9. U.S. Airline Industry Over the 2010s, the agencies allowed it to consolidate to three major players (four airlines control 85% of the industry), yielding tiny seats, packed cabins, regular overbooking, higher fees, and other well-known unpleasantries?
10. U.S. HospitalsAfter years of consolidation, the number of independent hospitals in most cities and towns has decreased significantly. A series of retrospective studies have found that post-merger, prices increased while the quality of service, measured by mortality rate, decreased.
The preceding excerpts are from the article: https://medium.com/s/story/antitrusts-most-wanted-6c05388bdfb7 (paywall)
Excerpts from Medium.com article (URL below)
An increasing number of industries are dominated by oligopolies and monopolies. Compiled here are firms or industries that are ripe for investigation.
1. Amazon
Amazon has taken a dominant share of online retail in part through the acquisition of competitors. Its practice of aggressively copying successful marketplace products has similarly raised questions as has its bullying of smaller brands, its efforts to control pricing on competing platforms through “most favored nation” contracts, and aggressive use of 18-month noncompete agreements.
2. AT&T/WarnerMedia
AT&T, the one-time telephone monopolist broken up in the 1980s, has moved into television. Since acquiring Time Warner and HBO for $85.4 billion this year, AT&T has begun using HBO as a club against Dish and Dish Sling.
3. Big Agriculture
Over the last five years, the agricultural seed, fertilizer, and chemical industry has consolidated into four global giants: BASF, Bayer, DowDuPont, and ChemChina. According to the U.S. Department of Agriculture, seed prices have tripled since the 1990s, and since the mergers, fertilizer prices are up as well.
4. Big Pharma
The pharmaceutical industry has a long track record of anticompetitive and extortionary practices, including the abuse of patent rights for anticompetitive purposes and various forms of price gouging.
Can something be done about pharmaceutical price gouging on drugs that are out of patent or, perhaps more broadly, the extortionate increases in the prices of prescription drugs?
5. Facebook
Should the Instagram and WhatsApp mergers be retroactively dissolved (effectively breaking up the company)? Did Facebook use its market power and control of Instagram and Instagram Stories to illegally diminish Snapchat from 2016–2018?
6. Google
On its way to becoming the search monopoly, Google acquired advertising competitors iMob and DoubleClick along with rival Waze and other potential competitors. Has Google anticompetitively excluded its rivals?
7. Ticketmaster/Live Nation
Has Live Nation used its power as a promoter to protect Ticketmaster’s monopoly on sales? Was Songkick the victim of an illegal exclusion campaign? Should the Ticketmaster/Live Nation union be dissolved?
8. T-Mobile/Sprint
In what appears to be a straightforward anticompetitive merger, the two carriers are attempting to merge to reduce the wireless market to three major firms (AT&T, Verizon, and Sprint/T-Mobile).
9. U.S. Airline Industry Over the 2010s, the agencies allowed it to consolidate to three major players (four airlines control 85% of the industry), yielding tiny seats, packed cabins, regular overbooking, higher fees, and other well-known unpleasantries?
10. U.S. HospitalsAfter years of consolidation, the number of independent hospitals in most cities and towns has decreased significantly. A series of retrospective studies have found that post-merger, prices increased while the quality of service, measured by mortality rate, decreased.
The preceding excerpts are from the article: https://medium.com/s/story/antitrusts-most-wanted-6c05388bdfb7 (paywall)
Advocate Marcia Bernbaum reports progress on implementation of DC public toilets proposal
On Tuesday, December 4 the DC City Council, as part of a Consent Agenda (packaging proposed legislation with which the attending Council members had no problems) voted 12 - 0 in favor of Bill 22 -223, Public Restroom Facilities & Installation Act of 2018 [https://pffcdc.org/wp-content/uploads/2018/12/B22-223-Public-Restroom-Facilities-Installation-Act-of-2018-Com.-on-Health..pdf]
On Tuesday, December 18 there is a second vote. Assuming that at a minimum 7 of the 13 Council Members vote in favor the Bill will be passed.
Next steps:
This Bill, and any others passed by the DC Council on Dec. 18 will next go to Congress for a 30 day period. Assuming there are no objections on the Hill the Bill goes to the Mayor to be signed.
The Executive will implement the guidelines included in the Bill, including two pilots included in the Bill:
The Kojo Show on NPR recently interviewed public toilet advocates: See The plan to bring public restrooms to DC [https://thekojonnamdishow.org/shows/2018-12-03/the-plan-to-bring-public-restrooms-to-d-c] runs 28 minutes.
On Tuesday, December 4 the DC City Council, as part of a Consent Agenda (packaging proposed legislation with which the attending Council members had no problems) voted 12 - 0 in favor of Bill 22 -223, Public Restroom Facilities & Installation Act of 2018 [https://pffcdc.org/wp-content/uploads/2018/12/B22-223-Public-Restroom-Facilities-Installation-Act-of-2018-Com.-on-Health..pdf]
On Tuesday, December 18 there is a second vote. Assuming that at a minimum 7 of the 13 Council Members vote in favor the Bill will be passed.
Next steps:
This Bill, and any others passed by the DC Council on Dec. 18 will next go to Congress for a 30 day period. Assuming there are no objections on the Hill the Bill goes to the Mayor to be signed.
The Executive will implement the guidelines included in the Bill, including two pilots included in the Bill:
- One or two stand-alone public restrooms open 24/7;
- A pilot of a program where businesses are provided incentives to open their restrooms to the public.
The Kojo Show on NPR recently interviewed public toilet advocates: See The plan to bring public restrooms to DC [https://thekojonnamdishow.org/shows/2018-12-03/the-plan-to-bring-public-restrooms-to-d-c] runs 28 minutes.
From DigitalMusicNews
As litigation pressure mounts, FCC chairman Ajit Pai has admitted that Russians interfered with the agency’s open commenting process related to the repeal of net neutrality.
An extremely contentious battle over net neutrality in the United States has a familiar interloper: Russia. Earlier this week, Federal Communications Commission (FCC) chairman Ajit Pai flatly admitted that Russian operatives were actively attempting to persuade the agency to repeal net neutrality, with the agency’s open commenting period gamed with thousands of fake comments from Russian accounts.
In a court filing issued this week, Pai admitted that it was a “fact” that a “half-million comments [were] submitted from Russian e-mail addresses and… nearly eight million comments [were] filed by e-mail addresses from e-mail domains associated with FakeMailGenerator.com…”
(The full statement from Pai is here).
The admission marks a strong shift for Pai, who previously denied or negated the importance of fake comments during the FCC’s open commenting period.
The filing itself is part of a broader lawsuit against the FCC by The New York Times and Buzzfeed, both of whom are seeking access to FCC documents under the Freedom of Information Act (FOIA). The FCC, led by Pai, has pushed back on those requests, arguing that the release of sensitive internal documents could open the agency to security threats.
An earlier report found that nearly 100 percent of verified comments from actual citizens were in favor of preserving net neutrality.
Separately, FCC chairwoman Jessica Rosenworcel has sharply criticized her own agency, while calling for the release of the documents in question. She also pointed to extreme spamming of the FCC’s comment system, with Russian interference a major contributing factor.
“As many as nine and a half million people had their identities stolen and used to file fake comments, which is a crime under both federal and state laws,” Rosenworcel declared. “Nearly eight million comments were filed from e-mail domains associated with FakeMailGenerator.com. On top of this, roughly half a million comments were filed from Russian e-mail addresses.
“Something here is rotten — and it’s time for the FCC to come clean.”
The open commenting period occurred in 2017, ahead of the FCC’s momentous rollback of net neutrality rules.Since that point, a number of U.S. states have fiercely fought back against the FCC’s decision, with California leading the charge. Earlier this year, California passed a strong net neutrality protection law, setting the stage for a major showdown against the FCC and the U.S. Department of Justice.
Within moments of passing its neutrality-protecting SB 822, the U.S. Department of Justice filed a lawsuit. Soon thereafter, several major ISPs filed their own lawsuits.
Just recently, California agreed to stay the implementation of its neutrality protection law, pending a ruling by the D.C. Circuit Court in early 2019. The FCC’s rollback prohibits any “state or local measures that would effectively impose rules or requirements that we have repealed,” though California legislators argue that the FCC lacks jurisdiction to enforce its provisions.
The DOJ’s lawsuit, perhaps symbolically, has been filed as United States v. State of California.
Credit: https://www.digitalmusicnews.com/2018/12/05/fcc-ajit-pai-russia-net-neutrality/
As litigation pressure mounts, FCC chairman Ajit Pai has admitted that Russians interfered with the agency’s open commenting process related to the repeal of net neutrality.
An extremely contentious battle over net neutrality in the United States has a familiar interloper: Russia. Earlier this week, Federal Communications Commission (FCC) chairman Ajit Pai flatly admitted that Russian operatives were actively attempting to persuade the agency to repeal net neutrality, with the agency’s open commenting period gamed with thousands of fake comments from Russian accounts.
In a court filing issued this week, Pai admitted that it was a “fact” that a “half-million comments [were] submitted from Russian e-mail addresses and… nearly eight million comments [were] filed by e-mail addresses from e-mail domains associated with FakeMailGenerator.com…”
(The full statement from Pai is here).
The admission marks a strong shift for Pai, who previously denied or negated the importance of fake comments during the FCC’s open commenting period.
The filing itself is part of a broader lawsuit against the FCC by The New York Times and Buzzfeed, both of whom are seeking access to FCC documents under the Freedom of Information Act (FOIA). The FCC, led by Pai, has pushed back on those requests, arguing that the release of sensitive internal documents could open the agency to security threats.
An earlier report found that nearly 100 percent of verified comments from actual citizens were in favor of preserving net neutrality.
Separately, FCC chairwoman Jessica Rosenworcel has sharply criticized her own agency, while calling for the release of the documents in question. She also pointed to extreme spamming of the FCC’s comment system, with Russian interference a major contributing factor.
“As many as nine and a half million people had their identities stolen and used to file fake comments, which is a crime under both federal and state laws,” Rosenworcel declared. “Nearly eight million comments were filed from e-mail domains associated with FakeMailGenerator.com. On top of this, roughly half a million comments were filed from Russian e-mail addresses.
“Something here is rotten — and it’s time for the FCC to come clean.”
The open commenting period occurred in 2017, ahead of the FCC’s momentous rollback of net neutrality rules.Since that point, a number of U.S. states have fiercely fought back against the FCC’s decision, with California leading the charge. Earlier this year, California passed a strong net neutrality protection law, setting the stage for a major showdown against the FCC and the U.S. Department of Justice.
Within moments of passing its neutrality-protecting SB 822, the U.S. Department of Justice filed a lawsuit. Soon thereafter, several major ISPs filed their own lawsuits.
Just recently, California agreed to stay the implementation of its neutrality protection law, pending a ruling by the D.C. Circuit Court in early 2019. The FCC’s rollback prohibits any “state or local measures that would effectively impose rules or requirements that we have repealed,” though California legislators argue that the FCC lacks jurisdiction to enforce its provisions.
The DOJ’s lawsuit, perhaps symbolically, has been filed as United States v. State of California.
Credit: https://www.digitalmusicnews.com/2018/12/05/fcc-ajit-pai-russia-net-neutrality/
Documents released in a British parliamentary committee inquiry suggests that Facebook and CEO Mark Zuckerberg may have given select developers special access to user data and deliberated on whether to sell that data.
A WSJ video (behind a paywall) is interesting in that it shows the documents:
https://www.wsj.com/articles/u-k-releases-internal-facebook-emails-deliberating-data-access-1544022496?mod=cx_picks&cx_navSource=cx_picks&cx_tag=video&cx_artPos=1#cxrecs_s
A WSJ video (behind a paywall) is interesting in that it shows the documents:
https://www.wsj.com/articles/u-k-releases-internal-facebook-emails-deliberating-data-access-1544022496?mod=cx_picks&cx_navSource=cx_picks&cx_tag=video&cx_artPos=1#cxrecs_s
Bloomberg: Exchange-traded funds are making stock markets dumber -- and more expensive.
That’s the finding of researchers at Stanford University, Emory University and the Interdisciplinary Center of Herzliya in Israel. They’ve uncovered evidence that higher ownership of individual stocks by ETFs widens the bid-ask spreads in those shares, making them more expensive to trade and therefore less attractive.
This phenomenon eventually turns stocks into drones that move in lockstep with their industry. It makes life harder for traders seeking informational edges by offering fewer opportunities to capitalize on insights into earnings and other signals.
The study is the latest to point out signs of diminished efficiency in markets increasingly overrun by the funds.
Excerpt from https://www.bloomberg.com/news/articles/2017-04-19/etfs-seen-creating-market-that-s-both-mindless-and-too-expensive
That’s the finding of researchers at Stanford University, Emory University and the Interdisciplinary Center of Herzliya in Israel. They’ve uncovered evidence that higher ownership of individual stocks by ETFs widens the bid-ask spreads in those shares, making them more expensive to trade and therefore less attractive.
This phenomenon eventually turns stocks into drones that move in lockstep with their industry. It makes life harder for traders seeking informational edges by offering fewer opportunities to capitalize on insights into earnings and other signals.
The study is the latest to point out signs of diminished efficiency in markets increasingly overrun by the funds.
Excerpt from https://www.bloomberg.com/news/articles/2017-04-19/etfs-seen-creating-market-that-s-both-mindless-and-too-expensive
Gerrymandering in Wisconsin
Recent news reports discuss whether the legislature in Wisconsin remains dominated by Republicans despite a majority Democratic party vote in the state, arguably because of gerrymandering. Without expressing any opinion on that issue, here is Scotusblog's history of litigation on the gerrymandering issue in Wisconsin:
Gill v. Whitford (U.S. Supreme Court)
Docket No.Op. Below16-1161W.D. Wis. Oct 3, 2017
Tr.Aud.Jun 18, 2018- Roberts OT 2017Holding: Plaintiffs -- Wisconsin Democratic voters who rested their claim of unconstitutional partisan gerrymandering on statewide injury -- have failed to demonstrate Article III standing.
Judgment: Vacated and remanded, 9-0, in an opinion by Chief Justice Roberts on June 18, 2018. Thomas and Gorsuch joined the opinion except as to Part III. Justice Kagan filed a concurring opinion, in which Justices Ginsburg, Breyer, and Sotomayor joined. Justice Thomas filed an opinion concurring in part and concurring in the judgment, in which Justice Gorsuch joined.
Excerpt of SCOTUSblog Coverage:
Symposium: The Supremes put off deciding whether politics violates the Constitution (Hans von Spakovsky)
Symposium: The elections clause as a structural constraint on partisan gerrymandering of Congress (Richard Pildes)
Symposium: Back to the drawing board for political gerrymandering plaintiffs (John Phillippe)
Posting by Don Allen Resnikoff
A brief book review by Don Allen Resnikoff:
The Curse of Bigness: Antitrust in the New Gilded Age
by Tim Wu, Columbia Global Reports, RRP, 170 pages.
Tim Wu’s short new book argues for a return to a more aggressive style of antitrust law enforcement in the U.S.
Wu makes his argument in a way that is accessible to a broad array of people, not just antitrust litigators and scholars. His book has drawn a lot of attention in popular media.
What has gone wrong with antitrust law? Wu explains in his introductory chapter that the law is suffering from the ideas of Robert Bork and the Chicago School of thinking: “Bork contended, implausibly, that the Congress of 1890 exclusively intended the antitrust law to deal with one very narrow type of harm: higher prices to consumers. That theory, the ‘consumer welfare’ approach, has enfeebled the law.”
An example of enfeeblement is abandonment by the government of big monopolization cases like those pursued in the past. In the distant past the Teddy Roosevelt, William Howard Taft, and Woodrow Wilson Administrations pressed monopolization cases against Standard Oil, Morgan banking interests, and others. More recently, federal and state governments have pressed monopolization cases against IBM, AT&T, and Microsoft.
The IBM, AT&T, and Microsoft cases focused on exclusionary and other anti-competitive conduct, and Wu praises them as doing some good in promoting competition. The prosecution of each case was disabled to some extent by wavering support from government. The Reagan Administration dismissed the U.S. v. IBM prosecution as “without merit.” The Bush Administration agreed to a consent decree for the U.S. Microsoft case that many found to be too mild. The Microsoft decree did have some important provisions that aided competition, such as requiring Microsoft to share information that permits competitor’s products to successfully interface with Microsoft products. The AT&T decree was strong in breaking up AT&T when it was entered in 1982, but the government has since permitted mergers which have in effect largely put the AT&T Humpty-Dumpty back together again.
Despite the disabilities of the recent monopolization cases, Wu describes what followed in recent years as much worse. Some examples: The government permission for reassembly of the AT&T monopoly; merger of airlines to just a few players; consolidation of the cable and pharmaceutical industries, and an array of permitted mergers in beer, seed and pesticides (Monsanto/Bayer), and other industries.
Perhaps most concerning to Wu is the emergence of dominant tech firms like Google, Ebay, Facebook, and Amazon. These companies, once disruptive upstarts, have become defensive behemoths that discourage new disruptive upstart companies, often by simply merging with them. Government enforcers have done little to discourage the mergers.
Wu has suggestions for reform of antitrust enforcement. He would like to see more vigorous merger enforcement. He would also like to see a return to government prosecution of big monopoly cases in the style of the cases against IBM, AT&T, and Microsoft, but with strong remedies like the break-up remedy initially used for AT&T. He would like more proactive government investigations into companies that have long-lasting dominant market power.
And, Wu would like to see the jettisoning of government prosecutor’s reliance on the “consumer welfare” standard for antitrust enforcement and its preoccupation with avoiding high consumer prices. Instead, he believes prosecutors and courts should focus on finding antitrust violations based on whether the targeted conduct is that which “promotes competition or whether it is such as may suppress or even destroy competition”—the standard prescribed by Justice Brandeis in his Chicago Board of Trade opinion of 1918.
Wu explains that a Brandeisian “protection of competition” test has the advantage of being focused on conduct and a process, as opposed to an abstract value such as maximization of consumer welfare. He argues that a protection of competition test will be practical and predictable, contrary to the complaints of critics. His analysis of recent big monopolization cases supports his argument. In those cases defendants like Microsoft beat down rivals in products like the web browser by pressing coercive arrangements on the industry. Deciding that such arrangements are anti-competitive need not turn on whether the prosecutor can prove what the price of browsers would be in a but-for world where browser rivals are not forced out of business.
I admire Wu’s ability to explain his points about reforming antitrust enforcement in a way that is understandable for a non-technical audience. But I think it is fair to say that Wu oversimplifies a bit for his non-technical book audience.
Some of the complexity of discussion about antitrust enforcement standards was on display at a recent FTC panel discussion on the consumer welfare standard, in which Wu participated. The session can be seen at https://www.ftc.gov/news-events/audio-video/video/ftc-hearing-5-nov-1-alternatives-consumer-welfare-standard-consumer
Some FTC panelists argued that the consumer welfare standard can be used in a flexible way, as it was in the Microsoft litigation. There the main focus was on anti-competitive behavior by Microsoft executives, not on consumer prices in a but-for world. Part of Tim Wu’s response to the argument that the consumer welfare standard can be used flexibly is his observation that frequently courts are using the consumer welfare standard in a narrow and inflexible way. That has led to many unfortunate case decisions that permit anti-competitive outcomes.
Some panelists at the FTC discussion raised questions about the relationship between Tim Wu’s reform proposals and political activism. One panelist referred to Tim Wu’s views as “left-wing.” I don’t think that suggestion is fair, at least in relation to the Gilded Age book, for reasons Wu explained at a recent book-store talk (at the Politics & Prose shop in D.C.). He explained that his core goal is to reinvigorate antitrust enforcement and broaden the goal of prosecutions so that they encompass traditional antitrust goals of protecting competition. The book does not address broader political reform proposals.
The discussion in Tim Wu’s Gilded Age book of the political corruption caused by large companies is so compelling that the reader is left hoping that there are political reform solutions bigger and broader than fixing the standards for antitrust investigations and prosecutions. A critical comment is possible about the limited scope of Wu’s suggestions for reform of a sort that Wu refers to in another context as “external.” It is like criticizing the Star Wars movie because it fails to explain the science of intergalactic travel. Similarly, it is true that Wu’s Gilded Age book does not suggest a broad political program for curing the political corruption caused by large and powerful companies, but that is not what the book is about.
This review is by Don Allen Resnikoff, who takes full responsibility for its content
The Curse of Bigness: Antitrust in the New Gilded Age
by Tim Wu, Columbia Global Reports, RRP, 170 pages.
Tim Wu’s short new book argues for a return to a more aggressive style of antitrust law enforcement in the U.S.
Wu makes his argument in a way that is accessible to a broad array of people, not just antitrust litigators and scholars. His book has drawn a lot of attention in popular media.
What has gone wrong with antitrust law? Wu explains in his introductory chapter that the law is suffering from the ideas of Robert Bork and the Chicago School of thinking: “Bork contended, implausibly, that the Congress of 1890 exclusively intended the antitrust law to deal with one very narrow type of harm: higher prices to consumers. That theory, the ‘consumer welfare’ approach, has enfeebled the law.”
An example of enfeeblement is abandonment by the government of big monopolization cases like those pursued in the past. In the distant past the Teddy Roosevelt, William Howard Taft, and Woodrow Wilson Administrations pressed monopolization cases against Standard Oil, Morgan banking interests, and others. More recently, federal and state governments have pressed monopolization cases against IBM, AT&T, and Microsoft.
The IBM, AT&T, and Microsoft cases focused on exclusionary and other anti-competitive conduct, and Wu praises them as doing some good in promoting competition. The prosecution of each case was disabled to some extent by wavering support from government. The Reagan Administration dismissed the U.S. v. IBM prosecution as “without merit.” The Bush Administration agreed to a consent decree for the U.S. Microsoft case that many found to be too mild. The Microsoft decree did have some important provisions that aided competition, such as requiring Microsoft to share information that permits competitor’s products to successfully interface with Microsoft products. The AT&T decree was strong in breaking up AT&T when it was entered in 1982, but the government has since permitted mergers which have in effect largely put the AT&T Humpty-Dumpty back together again.
Despite the disabilities of the recent monopolization cases, Wu describes what followed in recent years as much worse. Some examples: The government permission for reassembly of the AT&T monopoly; merger of airlines to just a few players; consolidation of the cable and pharmaceutical industries, and an array of permitted mergers in beer, seed and pesticides (Monsanto/Bayer), and other industries.
Perhaps most concerning to Wu is the emergence of dominant tech firms like Google, Ebay, Facebook, and Amazon. These companies, once disruptive upstarts, have become defensive behemoths that discourage new disruptive upstart companies, often by simply merging with them. Government enforcers have done little to discourage the mergers.
Wu has suggestions for reform of antitrust enforcement. He would like to see more vigorous merger enforcement. He would also like to see a return to government prosecution of big monopoly cases in the style of the cases against IBM, AT&T, and Microsoft, but with strong remedies like the break-up remedy initially used for AT&T. He would like more proactive government investigations into companies that have long-lasting dominant market power.
And, Wu would like to see the jettisoning of government prosecutor’s reliance on the “consumer welfare” standard for antitrust enforcement and its preoccupation with avoiding high consumer prices. Instead, he believes prosecutors and courts should focus on finding antitrust violations based on whether the targeted conduct is that which “promotes competition or whether it is such as may suppress or even destroy competition”—the standard prescribed by Justice Brandeis in his Chicago Board of Trade opinion of 1918.
Wu explains that a Brandeisian “protection of competition” test has the advantage of being focused on conduct and a process, as opposed to an abstract value such as maximization of consumer welfare. He argues that a protection of competition test will be practical and predictable, contrary to the complaints of critics. His analysis of recent big monopolization cases supports his argument. In those cases defendants like Microsoft beat down rivals in products like the web browser by pressing coercive arrangements on the industry. Deciding that such arrangements are anti-competitive need not turn on whether the prosecutor can prove what the price of browsers would be in a but-for world where browser rivals are not forced out of business.
I admire Wu’s ability to explain his points about reforming antitrust enforcement in a way that is understandable for a non-technical audience. But I think it is fair to say that Wu oversimplifies a bit for his non-technical book audience.
Some of the complexity of discussion about antitrust enforcement standards was on display at a recent FTC panel discussion on the consumer welfare standard, in which Wu participated. The session can be seen at https://www.ftc.gov/news-events/audio-video/video/ftc-hearing-5-nov-1-alternatives-consumer-welfare-standard-consumer
Some FTC panelists argued that the consumer welfare standard can be used in a flexible way, as it was in the Microsoft litigation. There the main focus was on anti-competitive behavior by Microsoft executives, not on consumer prices in a but-for world. Part of Tim Wu’s response to the argument that the consumer welfare standard can be used flexibly is his observation that frequently courts are using the consumer welfare standard in a narrow and inflexible way. That has led to many unfortunate case decisions that permit anti-competitive outcomes.
Some panelists at the FTC discussion raised questions about the relationship between Tim Wu’s reform proposals and political activism. One panelist referred to Tim Wu’s views as “left-wing.” I don’t think that suggestion is fair, at least in relation to the Gilded Age book, for reasons Wu explained at a recent book-store talk (at the Politics & Prose shop in D.C.). He explained that his core goal is to reinvigorate antitrust enforcement and broaden the goal of prosecutions so that they encompass traditional antitrust goals of protecting competition. The book does not address broader political reform proposals.
The discussion in Tim Wu’s Gilded Age book of the political corruption caused by large companies is so compelling that the reader is left hoping that there are political reform solutions bigger and broader than fixing the standards for antitrust investigations and prosecutions. A critical comment is possible about the limited scope of Wu’s suggestions for reform of a sort that Wu refers to in another context as “external.” It is like criticizing the Star Wars movie because it fails to explain the science of intergalactic travel. Similarly, it is true that Wu’s Gilded Age book does not suggest a broad political program for curing the political corruption caused by large and powerful companies, but that is not what the book is about.
This review is by Don Allen Resnikoff, who takes full responsibility for its content
Bloomberg reports:
A federal judge in Washington warned CVS Health Corp. and Aetna Inc. not to integrate operations after learning CVS closed its acquisition of the health insurer before obtaining court approval of an antitrust settlement the companies reached with the government.
U.S. District Judge Richard Leon blasted the companies and the Justice Department at a court hearing Thursday for treating him like a “rubber stamp.” He complained he was “being kept in the dark, kind of like a mushroom.”
“You need to slow this down,” Leon told Justice Department lawyer Jay Owen. “You’re like a freight train out of control. And you’re operating as if this is just some rubber-stamp operation. It is not, and it will not be.”
(Related: CVS Health Now Owns Aetna -- https://www.thinkadvisor.com/2018/11/28/cvs-health-now-owns-aetna/?slreturn=20181101133907)
CVS closed the $68 billion Aetna acquisition on Wednesday after receiving final regulatory approvals. The combination will create a health care giant with a hand in insurance, prescription-drug benefits and drugstores across the U.S.
The Justice Department cleared the deal in October after requiring the sale of Aetna’s Medicare prescription-drug plans to WellCare Health Plans Inc. The sale is intended to address the government’s concerns that the merger would otherwise harm competition between CVS and Aetna.
DOJ Consent
CVS, based in Woonsocket, Rhode Island, said in a statement the closing of the deal was done with the “full knowledge and consent” of the Justice Department and was in compliance with the federal law governing court approvals of merger settlements, known as the Tunney Act.
Merger settlements negotiated between the Justice Department and companies require court approval. The process can take months, and it’s routine for merging companies to close their deals before a judge signs off.
Nonetheless, the move irked Leon, who has previously taken issue with companies that treat their merger as a fait accompli. He said he probably won’t consider final approval to the settlement until the summer, at which point the companies will be far along in their integration. That will make it difficult to unwind the merger if he doesn’t approve the settlement, he said.
“The risk is on the public that I can unwind it and that we can recoup whatever negative consequences there were on the public in that interim seven months, and that’s going to be a big problem for me, if it should come out that way,” he said.
It’s not the first time the Justice Department’s antitrust division has faced Leon’s wrath. Leon oversaw the division’s unsuccessful challenge to AT&T Inc.’s takeover of Time Warner. During the trial, he criticized the government’s lawyers for their handling of the case.
From: https://www.thinkadvisor.com/2018/11/30/cvs-aetna-closed-their-deal-a-judge-is-not-happy/
A federal judge in Washington warned CVS Health Corp. and Aetna Inc. not to integrate operations after learning CVS closed its acquisition of the health insurer before obtaining court approval of an antitrust settlement the companies reached with the government.
U.S. District Judge Richard Leon blasted the companies and the Justice Department at a court hearing Thursday for treating him like a “rubber stamp.” He complained he was “being kept in the dark, kind of like a mushroom.”
“You need to slow this down,” Leon told Justice Department lawyer Jay Owen. “You’re like a freight train out of control. And you’re operating as if this is just some rubber-stamp operation. It is not, and it will not be.”
(Related: CVS Health Now Owns Aetna -- https://www.thinkadvisor.com/2018/11/28/cvs-health-now-owns-aetna/?slreturn=20181101133907)
CVS closed the $68 billion Aetna acquisition on Wednesday after receiving final regulatory approvals. The combination will create a health care giant with a hand in insurance, prescription-drug benefits and drugstores across the U.S.
The Justice Department cleared the deal in October after requiring the sale of Aetna’s Medicare prescription-drug plans to WellCare Health Plans Inc. The sale is intended to address the government’s concerns that the merger would otherwise harm competition between CVS and Aetna.
DOJ Consent
CVS, based in Woonsocket, Rhode Island, said in a statement the closing of the deal was done with the “full knowledge and consent” of the Justice Department and was in compliance with the federal law governing court approvals of merger settlements, known as the Tunney Act.
Merger settlements negotiated between the Justice Department and companies require court approval. The process can take months, and it’s routine for merging companies to close their deals before a judge signs off.
Nonetheless, the move irked Leon, who has previously taken issue with companies that treat their merger as a fait accompli. He said he probably won’t consider final approval to the settlement until the summer, at which point the companies will be far along in their integration. That will make it difficult to unwind the merger if he doesn’t approve the settlement, he said.
“The risk is on the public that I can unwind it and that we can recoup whatever negative consequences there were on the public in that interim seven months, and that’s going to be a big problem for me, if it should come out that way,” he said.
It’s not the first time the Justice Department’s antitrust division has faced Leon’s wrath. Leon oversaw the division’s unsuccessful challenge to AT&T Inc.’s takeover of Time Warner. During the trial, he criticized the government’s lawyers for their handling of the case.
From: https://www.thinkadvisor.com/2018/11/30/cvs-aetna-closed-their-deal-a-judge-is-not-happy/
From DigitalMusicNews 11/20/18
Multiple AMLC Board Members Quit as a Post-MMA Turf War Breaks Out
Donald Trump signed the Music Modernization Act at on October 11th.
Last week, DMN first reported on the formation of the American Music Licensing Collective, or AMLC, which is focused on fulfilling the duties the the MMA’s Mechanical Licensing Collective (MLC).
Now, that group has quickly lost a pair of board members, for reasons that remain suspicious. Others are also rumored to be departing.
The AMLC was the first to declare its intentions of handling the responsibilities of the Mechanical Licensing Collective, or MLC, which is a collective mandated by the now-passed Music Modernization Act (MMA). Interestingly, the AMLC beat a consortium of major publishers to the punch, a group that was largely expected to assume the MLC’s responsibilities with no competition.
But at least two AMLC heavy-hitters have contracted a quick case of cold feet, according to details confirmed by Digital Music News.Among the quickly-departed are George Howard and Larry Mestel, with neither offering a reason for their exits.
Both are extremely qualified to help manage the MLC’s charter of administering digital mechanical licenses. George Howard is the cofounder of both Music Audience Exchange and TuneCore, and CIO of Riptide Publishing. Mestel is the founder of independent publishing and entertainment company Primary Wave.
But earlier this week, the profiles of both Howard and Mestel were removed from the AMLC site with no explanation. Howard didn’t respond to an email sent on Monday, and the AMLC did not offer a reason for the departures.
Other names were also floated as either exiting or opting not to sign onto the AMLC at the last minute. We’ll report more departures as we confirm them.
Separately, a source close to the AMLC claimed that the departures were directly tied to threats by major publishers, with the National Music Publishers’ Association (NMPA) and at least one highly-influential publishing executive cited.
That group may be unhappy to be battling an MLC contender, though government-created agencies and contracts typically involve bidding processes. In fact, ‘no bid contracts’ are often regarded as an unfair, and a sign of corruption.
We reached out to NMPA president David Israelite on Monday morning to discuss the allegations, but have yet to receive a response.
Separately, AMLC cofounder Jeff Price confirmed to DMN that threats had been issued, but declined to name names. Price, who cofounded TuneCore and more recently founded Audiam, remains a board member of the AMLC but noted that he has “received threats that I recuse myself from the board or suffer repercussions to my career.”
Beyond that, Price was uncertain if other board members had received similar threats, but strongly suggested the possibility. “If there is a coordinated effort, and a colluded or orchestrated effort occurring to remove people from the AMLC, the question is why?”
“Is there something with the core mission statement they want to change? Otherwise what could it possibly be?”
That ‘core mission’ is likely a contentious one to the NMPA, which has been accused — by Price and others — of creating an MLC structure that unfairly enriches major publishers at the expense of independent songwriters.
Indeed, the formation of the AMLC appears to be motivated by issues related to MLC conflicts of interest, specifically those tied to the treatment of ‘unallocated funds’.
According to the MMA’s language, mechanical licenses that remain unclaimed after just one year will be largely mopped up by major publishers according to marketshare, an arrangement that has drawn protest. The value of the initial unclaimed tranche of funds has been estimated to be as high as $1.5 billion, at least according to a report by Variety.
But at least one other AMLC member says that there haven’t been threats — and the rest are remaining with the organization.
That includes AMLC board member Benji Rogers, who says he’s received largely positive feedback. “I intend to stay and have had no pressure to leave,” Rogers emailed DMN.
“Actually the opposite. People seem to be excited about it.”
Ricardo Ordoñez, who aims to rectify longstanding problems with international mechanical licensing payment flows via the AMLC, also said he’s staying put. “I am still on the board and not planning to leave,” Ordoñez told us on Monday.
Prodigious multi-platinum songwriter Rick Carnes is also remaining on the board: “Yes I will be remaining on the AMLC board….” Carnes emailed. “It is important that ALL of the potential MLC boards have qualified and dedicated Songwriter board members. It is in that interest that I agreed to serve on the AMLC.”
Also staying put is Stewart Copeland, former drummer of The Police and the highest-profile AMLC member.
Separately, there’s been no MLC-related announcement from the NMPA or its members.
That group, which helped to mastermind the passage of the Music Modernization Act through Congress, has been rumored to have pre-selected SoundExchange to oversee MLC mechanical administration. Prominent members of that group are expected to include Sony/ATV, Warner/Chappell, and Universal Music Publishing Group (UMPG), among others.
Multiple AMLC Board Members Quit as a Post-MMA Turf War Breaks Out
Donald Trump signed the Music Modernization Act at on October 11th.
Last week, DMN first reported on the formation of the American Music Licensing Collective, or AMLC, which is focused on fulfilling the duties the the MMA’s Mechanical Licensing Collective (MLC).
Now, that group has quickly lost a pair of board members, for reasons that remain suspicious. Others are also rumored to be departing.
The AMLC was the first to declare its intentions of handling the responsibilities of the Mechanical Licensing Collective, or MLC, which is a collective mandated by the now-passed Music Modernization Act (MMA). Interestingly, the AMLC beat a consortium of major publishers to the punch, a group that was largely expected to assume the MLC’s responsibilities with no competition.
But at least two AMLC heavy-hitters have contracted a quick case of cold feet, according to details confirmed by Digital Music News.Among the quickly-departed are George Howard and Larry Mestel, with neither offering a reason for their exits.
Both are extremely qualified to help manage the MLC’s charter of administering digital mechanical licenses. George Howard is the cofounder of both Music Audience Exchange and TuneCore, and CIO of Riptide Publishing. Mestel is the founder of independent publishing and entertainment company Primary Wave.
But earlier this week, the profiles of both Howard and Mestel were removed from the AMLC site with no explanation. Howard didn’t respond to an email sent on Monday, and the AMLC did not offer a reason for the departures.
Other names were also floated as either exiting or opting not to sign onto the AMLC at the last minute. We’ll report more departures as we confirm them.
Separately, a source close to the AMLC claimed that the departures were directly tied to threats by major publishers, with the National Music Publishers’ Association (NMPA) and at least one highly-influential publishing executive cited.
That group may be unhappy to be battling an MLC contender, though government-created agencies and contracts typically involve bidding processes. In fact, ‘no bid contracts’ are often regarded as an unfair, and a sign of corruption.
We reached out to NMPA president David Israelite on Monday morning to discuss the allegations, but have yet to receive a response.
Separately, AMLC cofounder Jeff Price confirmed to DMN that threats had been issued, but declined to name names. Price, who cofounded TuneCore and more recently founded Audiam, remains a board member of the AMLC but noted that he has “received threats that I recuse myself from the board or suffer repercussions to my career.”
Beyond that, Price was uncertain if other board members had received similar threats, but strongly suggested the possibility. “If there is a coordinated effort, and a colluded or orchestrated effort occurring to remove people from the AMLC, the question is why?”
“Is there something with the core mission statement they want to change? Otherwise what could it possibly be?”
That ‘core mission’ is likely a contentious one to the NMPA, which has been accused — by Price and others — of creating an MLC structure that unfairly enriches major publishers at the expense of independent songwriters.
Indeed, the formation of the AMLC appears to be motivated by issues related to MLC conflicts of interest, specifically those tied to the treatment of ‘unallocated funds’.
According to the MMA’s language, mechanical licenses that remain unclaimed after just one year will be largely mopped up by major publishers according to marketshare, an arrangement that has drawn protest. The value of the initial unclaimed tranche of funds has been estimated to be as high as $1.5 billion, at least according to a report by Variety.
But at least one other AMLC member says that there haven’t been threats — and the rest are remaining with the organization.
That includes AMLC board member Benji Rogers, who says he’s received largely positive feedback. “I intend to stay and have had no pressure to leave,” Rogers emailed DMN.
“Actually the opposite. People seem to be excited about it.”
Ricardo Ordoñez, who aims to rectify longstanding problems with international mechanical licensing payment flows via the AMLC, also said he’s staying put. “I am still on the board and not planning to leave,” Ordoñez told us on Monday.
Prodigious multi-platinum songwriter Rick Carnes is also remaining on the board: “Yes I will be remaining on the AMLC board….” Carnes emailed. “It is important that ALL of the potential MLC boards have qualified and dedicated Songwriter board members. It is in that interest that I agreed to serve on the AMLC.”
Also staying put is Stewart Copeland, former drummer of The Police and the highest-profile AMLC member.
Separately, there’s been no MLC-related announcement from the NMPA or its members.
That group, which helped to mastermind the passage of the Music Modernization Act through Congress, has been rumored to have pre-selected SoundExchange to oversee MLC mechanical administration. Prominent members of that group are expected to include Sony/ATV, Warner/Chappell, and Universal Music Publishing Group (UMPG), among others.
Rapper/business mogul Jay-Z (Shawn Carter) asks NY Court to block arbitration because of lack of arbitrator panel racial diversity
Excerpts from the filed Complaint:
he AAA’s lack of African-American arbitrators came as a surprise to Petitioners,
in part because of the AAA’s advertising touting its diversity. This blatant failure of the AAA to
ensure a diverse slate of arbitrators is particularly shocking given the prevalence of mandatory
arbitration provisions in commercial contracts across nearly all industries. It would stand to
reason that prospective litigants—which undoubtedly include minority owned and operated
businesses—expect there to be the possibility that the person who stands in the shoes of both
judge and jury reflects the diverse population.
By virtue of the increasing prevalence of arbitrations in commercial contracts,
arbitrators have gained unprecedented power to oversee and make decisions regarding significant
business disputes. The AAA’s arbitration procedures, and specifically its roster of neutrals for
large and complex cases in New York, deprive Mr. Carter and his companies of the equal
protection of the laws, equal access to public accommodations, and mislead consumers into
believing that they will receive a fair and impartial adjudication.
When a contract violates New York law, New York courts do not hesitate to
invalidate that contract provision as void as against public policy, notwithstanding the fact that
the parties willingly agreed to the provision. The AAA’s failure to provide a venire of arbitrators
that includes more than a token number of African-Americans renders the arbitration provision
in the contract void as against public policy. Accordingly, Petitioners seek a preliminary
injunction staying the pending arbitration under CPLR 7503(b) for a minimum of ninety days, so
that Petitioners may work with AAA to include sufficient African-American arbitrators from
which the parties may choose.
FILED: NEW YORK COUNTY CLERK 11/28/2018 10:32 AM
INDEX NO. 655894/2018
NYSCEF DOC. NO. 1
URL: https://dlbjbjzgnk95t.cloudfront.net/1105000/1105807/655894_2018_shawn_c_carter_et_al_v_shawn_c_carter_et_al_petition_1.pdf
Excerpts from the filed Complaint:
he AAA’s lack of African-American arbitrators came as a surprise to Petitioners,
in part because of the AAA’s advertising touting its diversity. This blatant failure of the AAA to
ensure a diverse slate of arbitrators is particularly shocking given the prevalence of mandatory
arbitration provisions in commercial contracts across nearly all industries. It would stand to
reason that prospective litigants—which undoubtedly include minority owned and operated
businesses—expect there to be the possibility that the person who stands in the shoes of both
judge and jury reflects the diverse population.
By virtue of the increasing prevalence of arbitrations in commercial contracts,
arbitrators have gained unprecedented power to oversee and make decisions regarding significant
business disputes. The AAA’s arbitration procedures, and specifically its roster of neutrals for
large and complex cases in New York, deprive Mr. Carter and his companies of the equal
protection of the laws, equal access to public accommodations, and mislead consumers into
believing that they will receive a fair and impartial adjudication.
When a contract violates New York law, New York courts do not hesitate to
invalidate that contract provision as void as against public policy, notwithstanding the fact that
the parties willingly agreed to the provision. The AAA’s failure to provide a venire of arbitrators
that includes more than a token number of African-Americans renders the arbitration provision
in the contract void as against public policy. Accordingly, Petitioners seek a preliminary
injunction staying the pending arbitration under CPLR 7503(b) for a minimum of ninety days, so
that Petitioners may work with AAA to include sufficient African-American arbitrators from
which the parties may choose.
FILED: NEW YORK COUNTY CLERK 11/28/2018 10:32 AM
INDEX NO. 655894/2018
NYSCEF DOC. NO. 1
URL: https://dlbjbjzgnk95t.cloudfront.net/1105000/1105807/655894_2018_shawn_c_carter_et_al_v_shawn_c_carter_et_al_petition_1.pdf
Part of GM's recent product announcement suggests that the electric hybrid car may be on its way out, to be replaced by the electric-only car
In GM’s recent announcement “unallocating” a number of GM car plants, this sentence appears: ” GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures.”
Industry analysts suggest that the day of the hybrid electric car is over, and the future belongs to all-electric cars. Following is an excerpt from an article in Quartz: https://qz.com/1474677/gm-kills-the-chevrolet-volt-as-plug-in-hybrids-lose-market-share/
Plug-in hybrid cars, originally designed to be the transition between conventional cars and their electric successors, are looking more like a dead-end in automotive evolution. Likely, they won’t be missed.
The latest line in their epitaph was written by General Motors today (Nov. 26) when the automaker announced it was killing off its Chevrolet Volt, which arrived in 2011, along with five other models. The company is shuttering seven factories worldwide and shedding more than 14,000 salaried staff and factory jobs by the end of 2019 as the company retools for the future. “GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures,” GM Chairman and CEO Mary Barra said in a statement. The company will still build its popular all-electric Bolt sedan.
GM’s decision marks the latest transition in automobiles from combustion engines to electric. This quarter the sales of battery electric (BEV) and plug-in hybrid vehicles, which have tracked each other closely since 2014, finally diverged. The sales of battery electric cars soared 120%, outselling plug-in hybrids 3-to-1 in the third quarter, reports (paywall) Bloomberg New Energy Finance. BEV sales hit more than 77,000, thanks to Tesla’s red-hot Model 3, compared 29,000 plug-in hybrids, a 6% decline from a year earlier.
What happened? Plug-in hybrids tried to be everything to everyone. Electric drive and gasoline range? Check. Recharge at home, work or while driving? Covered. But they were always a compromise because they’re dragging around two drivetrains, rather than optimizing for one. As a result, they tended to have slightly higher prices (the Volt is $5,000 more than the all-electric Nissan Leaf) without the full high-octane performance or cachet of their all-electric cousins. While buyers claimed they want a hybrid option, just as they might pick a car with a sunroof, it seems many would rather plug-in, or fill up, but not both.
Before car companies committed to electric vehicles, almost all were waiting until batteries had improved, and buyers demanded electric vehicles (only 1.2% of US car sales were EVs last year). Well, batteries have improved and Tesla has proved you can make one of the most popular cars on the market powered only on batteries.
Since 2014, lithium-ion battery prices have fallen more than 50% while the median EV range now exceeds 100 miles, enough to cover the vast majority of drivers’ needs. After accounting for the reduced cost in fuel and maintenance, BEVs are winning over those who might have once favored the plug-in hybrid middle-ground.
In GM’s recent announcement “unallocating” a number of GM car plants, this sentence appears: ” GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures.”
Industry analysts suggest that the day of the hybrid electric car is over, and the future belongs to all-electric cars. Following is an excerpt from an article in Quartz: https://qz.com/1474677/gm-kills-the-chevrolet-volt-as-plug-in-hybrids-lose-market-share/
Plug-in hybrid cars, originally designed to be the transition between conventional cars and their electric successors, are looking more like a dead-end in automotive evolution. Likely, they won’t be missed.
The latest line in their epitaph was written by General Motors today (Nov. 26) when the automaker announced it was killing off its Chevrolet Volt, which arrived in 2011, along with five other models. The company is shuttering seven factories worldwide and shedding more than 14,000 salaried staff and factory jobs by the end of 2019 as the company retools for the future. “GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures,” GM Chairman and CEO Mary Barra said in a statement. The company will still build its popular all-electric Bolt sedan.
GM’s decision marks the latest transition in automobiles from combustion engines to electric. This quarter the sales of battery electric (BEV) and plug-in hybrid vehicles, which have tracked each other closely since 2014, finally diverged. The sales of battery electric cars soared 120%, outselling plug-in hybrids 3-to-1 in the third quarter, reports (paywall) Bloomberg New Energy Finance. BEV sales hit more than 77,000, thanks to Tesla’s red-hot Model 3, compared 29,000 plug-in hybrids, a 6% decline from a year earlier.
What happened? Plug-in hybrids tried to be everything to everyone. Electric drive and gasoline range? Check. Recharge at home, work or while driving? Covered. But they were always a compromise because they’re dragging around two drivetrains, rather than optimizing for one. As a result, they tended to have slightly higher prices (the Volt is $5,000 more than the all-electric Nissan Leaf) without the full high-octane performance or cachet of their all-electric cousins. While buyers claimed they want a hybrid option, just as they might pick a car with a sunroof, it seems many would rather plug-in, or fill up, but not both.
Before car companies committed to electric vehicles, almost all were waiting until batteries had improved, and buyers demanded electric vehicles (only 1.2% of US car sales were EVs last year). Well, batteries have improved and Tesla has proved you can make one of the most popular cars on the market powered only on batteries.
Since 2014, lithium-ion battery prices have fallen more than 50% while the median EV range now exceeds 100 miles, enough to cover the vast majority of drivers’ needs. After accounting for the reduced cost in fuel and maintenance, BEVs are winning over those who might have once favored the plug-in hybrid middle-ground.
In first for the organization Housing Rights Initiative, two NYC landlord lawsuits achieve class certification
The Upper Manhattan and Bronx J-51 cases are the group's first to reach the milestone
From: https://therealdeal.com/2018/10/08/in-first-for-housing-rights-initiative-two-landlord-lawsuits-achieve-class-certification/
By Will Parker | October 08, 2018 12:31PM
It’s been a slow march in the state courts, but as of last week, two class action lawsuits generated by the Housing Rights Initiative achieved class certification — the first of the group’s cases to reach this milestone.
Over the last two years HRI has organized more than 40 lawsuits against landlords, most alleging “schemes” to up rents more than prevailing laws allow.
The first of the two landlords in the class actions, Scharfman Organization, is alleged to have defrauded tenants of 260 Convent Avenue in Hamilton Heights. In the second, Richard Albert is similarly accused by his tenants at 3045 Godwin Terrace in the Bronx.
Both lawsuits allege the landlords’ companies broke the law by accepting the J-51 property tax benefit while deregulating rent-stabilized apartments. Keeping apartments rent-stabilized is a required condition of tax program, according to state law.
Should they win their cases, the more than 100 current and former tenants of both buildings could receive rent overcharge refunds and damages.
“My constituents living at 3045 Godwin Terrace deserve better!” Bronx City Council member Andrew Cohen said in a statement. “They deserve to have their rent-stabilized leases rightfully restored to their apartments.”
Albert was not reachable by phone and Mark Scharfman declined to comment. This is the ninth complaint HRI has helped put together against Scharfman’s companies.
Apart from J-51 cases, HRI has ventured into less tested waters by filing class actions against landlords alleged to have overcharged on rent by exaggerating the cost of apartment renovations, or “Individual Apartment Improvements.” A couple of these cases were dismissed by lower courts and then refiled. One, against Harlem property owner Big City Realty, faced an appeals court panel in July. The majority of the panel decided the complaint should have survived a motion to dismiss so that discovery could first be granted to the tenant plaintiffs to help prove their claims.
The Upper Manhattan and Bronx J-51 cases are the group's first to reach the milestone
From: https://therealdeal.com/2018/10/08/in-first-for-housing-rights-initiative-two-landlord-lawsuits-achieve-class-certification/
By Will Parker | October 08, 2018 12:31PM
It’s been a slow march in the state courts, but as of last week, two class action lawsuits generated by the Housing Rights Initiative achieved class certification — the first of the group’s cases to reach this milestone.
Over the last two years HRI has organized more than 40 lawsuits against landlords, most alleging “schemes” to up rents more than prevailing laws allow.
The first of the two landlords in the class actions, Scharfman Organization, is alleged to have defrauded tenants of 260 Convent Avenue in Hamilton Heights. In the second, Richard Albert is similarly accused by his tenants at 3045 Godwin Terrace in the Bronx.
Both lawsuits allege the landlords’ companies broke the law by accepting the J-51 property tax benefit while deregulating rent-stabilized apartments. Keeping apartments rent-stabilized is a required condition of tax program, according to state law.
Should they win their cases, the more than 100 current and former tenants of both buildings could receive rent overcharge refunds and damages.
“My constituents living at 3045 Godwin Terrace deserve better!” Bronx City Council member Andrew Cohen said in a statement. “They deserve to have their rent-stabilized leases rightfully restored to their apartments.”
Albert was not reachable by phone and Mark Scharfman declined to comment. This is the ninth complaint HRI has helped put together against Scharfman’s companies.
Apart from J-51 cases, HRI has ventured into less tested waters by filing class actions against landlords alleged to have overcharged on rent by exaggerating the cost of apartment renovations, or “Individual Apartment Improvements.” A couple of these cases were dismissed by lower courts and then refiled. One, against Harlem property owner Big City Realty, faced an appeals court panel in July. The majority of the panel decided the complaint should have survived a motion to dismiss so that discovery could first be granted to the tenant plaintiffs to help prove their claims.
What is the law on genetic modifications of babies?
None in China, where media reports a recent unprecedented use of gene modification technology on human babies.
In the US, two crucial sentences inside a federal spending bill in 2015 (https://www.congress.gov/bill/114th-congress/house-bill/2029/text), the U.S. Congress effectively banned the human testing of gene-editing techniques that could produce genetically modified babies.
The language in the bill is a clear reference to the use of techniques like CRISPR to modify the human germline (see “Engineering the Perfect Baby”). Most scientists agree that testing germline editing in humans is irresponsible at this point. But regulators have decided that the description also fits mitochondrial replacement therapy, which entails removing the nucleus from a human egg and transplanting it into one from a different person to prevent the transmission of debilitating or even deadly mitochondrial disorders to children.
See https://www.technologyreview.com/s/602219/the-unintended-consequence-of-congresss-ban-on-designer-babies/ for more detail, and for the argument that the U.S. ban is too broad.
None in China, where media reports a recent unprecedented use of gene modification technology on human babies.
In the US, two crucial sentences inside a federal spending bill in 2015 (https://www.congress.gov/bill/114th-congress/house-bill/2029/text), the U.S. Congress effectively banned the human testing of gene-editing techniques that could produce genetically modified babies.
The language in the bill is a clear reference to the use of techniques like CRISPR to modify the human germline (see “Engineering the Perfect Baby”). Most scientists agree that testing germline editing in humans is irresponsible at this point. But regulators have decided that the description also fits mitochondrial replacement therapy, which entails removing the nucleus from a human egg and transplanting it into one from a different person to prevent the transmission of debilitating or even deadly mitochondrial disorders to children.
See https://www.technologyreview.com/s/602219/the-unintended-consequence-of-congresss-ban-on-designer-babies/ for more detail, and for the argument that the U.S. ban is too broad.
Gas Stations Shouldn't Delay Card Swipe Fee Deal, Court Told
By Christopher Cole
Excerpt from Law360 (paywall) https://www.law360.com/articles/1104678?ta_id=758500&utm_source=targeted-alerts&utm_medium=email&utm_campaign=case-article-alert
-- A tentative deal to end a class action over credit card swipe fees shouldn’t get delayed because brand gasoline retailers are locked in disputes with the oil companies whose fuel they sell, class lawyers have told a New York federal judge.
Merchants that are suing banks and major credit card issuers including Visa and Mastercard are trying to gain court approval to seal a $900 million addition to roughly $5.3 billion already set aside to pay out claims that the retailers were overcharged fees that they pay when they run credit cards. The class action claims the card issuers set up network rules that led to higher fees than merchants would pay in a competitive market.
But so-called “branded operators” — primarily gas stations and convenience stores that sell fuel from oil companies like Shell — are objecting to the settlement (https://www.law360.com/articles/1104187) , saying they are concerned that retailers will be counted as class members in name only and get left out of any financial claims. The class attorneys said those disputes are with the oil companies and the settlement should be approved before the disputes are resolved.
The Robins, Kaplan letter defending the settlement is here: https://dlbjbjzgnk95t.cloudfront.net/1104000/1104678/https-ecf-nyed-uscourts-gov-doc1-123114910718.pdf
By Christopher Cole
Excerpt from Law360 (paywall) https://www.law360.com/articles/1104678?ta_id=758500&utm_source=targeted-alerts&utm_medium=email&utm_campaign=case-article-alert
-- A tentative deal to end a class action over credit card swipe fees shouldn’t get delayed because brand gasoline retailers are locked in disputes with the oil companies whose fuel they sell, class lawyers have told a New York federal judge.
Merchants that are suing banks and major credit card issuers including Visa and Mastercard are trying to gain court approval to seal a $900 million addition to roughly $5.3 billion already set aside to pay out claims that the retailers were overcharged fees that they pay when they run credit cards. The class action claims the card issuers set up network rules that led to higher fees than merchants would pay in a competitive market.
But so-called “branded operators” — primarily gas stations and convenience stores that sell fuel from oil companies like Shell — are objecting to the settlement (https://www.law360.com/articles/1104187) , saying they are concerned that retailers will be counted as class members in name only and get left out of any financial claims. The class attorneys said those disputes are with the oil companies and the settlement should be approved before the disputes are resolved.
The Robins, Kaplan letter defending the settlement is here: https://dlbjbjzgnk95t.cloudfront.net/1104000/1104678/https-ecf-nyed-uscourts-gov-doc1-123114910718.pdf
How to use IRS data to evaluate charities
There are many excellent tools and organizations to help you determine which organizations might be putting your money to good uses vs. spending your money on administrative overhead. One organization that can help you is CharityWatch (https://www.charitywatch.org/home) a nonprofit charity watchdog and information service. In rating charities they try and help you maximize the effectiveness of every dollar you contribute to a charity by providing donors with the information they need to make more informed giving decisions.
If you want to do some investigating on your own, most charities must file a 990 tax return with the IRS. These forms contain a wealth of information about charities, but like most tax forms, they can be difficult to digest. But you only need to focus on a few pages. The first page will give you a summary of the organization’s revenue and expenses during the most recent two years. Charities are required to make their 990 forms available through their websites or by calling.
Page 7 gives you a list of the organization’s officers, directors, key employees, highest compensated employees and independent contractors (though only those receiving more than $100,000 from the organization). Page 9 and 10 are important. Page 9 tells you the source of the organization's revenue. Page 10 breaks down the organization’s expenses, in two ways. First it lists amounts spent on different types of expenses, such as program, salaries and wages, office expenses, information technology, travel, etc. Second it divides up each of these expenses according to whether it was a program-service expense, management expense or fundraising expense.
By focusing on line 25 (Total Functional Expenses) you can figure out the percentage of its revenue that a charity spends on its services vs. its fundraising and management (overhead). You can use a simple formula to figure out overhead:
Line 25C (management) plus 25D (fundraising) divided by line 25A (total expenses).
For a more complete description of how to read a 990 see: https://www.charitychoices.com/page/how-read-charity-990-tax-form
Thanks to Betsy Carrier for this information
There are many excellent tools and organizations to help you determine which organizations might be putting your money to good uses vs. spending your money on administrative overhead. One organization that can help you is CharityWatch (https://www.charitywatch.org/home) a nonprofit charity watchdog and information service. In rating charities they try and help you maximize the effectiveness of every dollar you contribute to a charity by providing donors with the information they need to make more informed giving decisions.
If you want to do some investigating on your own, most charities must file a 990 tax return with the IRS. These forms contain a wealth of information about charities, but like most tax forms, they can be difficult to digest. But you only need to focus on a few pages. The first page will give you a summary of the organization’s revenue and expenses during the most recent two years. Charities are required to make their 990 forms available through their websites or by calling.
Page 7 gives you a list of the organization’s officers, directors, key employees, highest compensated employees and independent contractors (though only those receiving more than $100,000 from the organization). Page 9 and 10 are important. Page 9 tells you the source of the organization's revenue. Page 10 breaks down the organization’s expenses, in two ways. First it lists amounts spent on different types of expenses, such as program, salaries and wages, office expenses, information technology, travel, etc. Second it divides up each of these expenses according to whether it was a program-service expense, management expense or fundraising expense.
By focusing on line 25 (Total Functional Expenses) you can figure out the percentage of its revenue that a charity spends on its services vs. its fundraising and management (overhead). You can use a simple formula to figure out overhead:
Line 25C (management) plus 25D (fundraising) divided by line 25A (total expenses).
For a more complete description of how to read a 990 see: https://www.charitychoices.com/page/how-read-charity-990-tax-form
Thanks to Betsy Carrier for this information
Comment by Don Allen Resnikoff:
Tim Wu on US v. IBM
In his short book The Curse of Bigness: Antitrust in the New Gilded Age, Columbia Global Reports, RRP, 170 pages, Tim Wu argues for a return to an earlier and more aggressive interpretation of U.S. antitrust law. Tim Wu would like antitrust enforcement to focus on reducing the economic and political power of large companies. He argues vehemently for reviving the kind of big anti-monopoly cases the USDOJ pursued in the past.
At one point in his book Tim Wu focuses on the last series of monopoly cases pursued by the federal government, including the cases against IBM, Microsoft, and AT&T.
Wu’s focus on the US v. IBM case is particularly interesting to me. He is one of relatively few commenters who describe the case as having merit, and doing some good.
I worked on the US. v. IBM case during its last few years before the Reagan administration dismissed the case in 1982. My agreement with Wu is based on that experience. I participated in the moot-court like inquiry that USDOJ antitrust chief William Baxter conducted before he decided to abandon the case. As first assistant to the US v. IBM trial chief I was the senior trial staff person on hand in New York when the phone call came in from one of Baxter’s assistants in Washington directing me to hotfoot it over to the nearby Cravath, Swaine, & Moore offices and meet with IBM’s lawyer Tom Barr. My chore was to deal with papers terminating the litigation. The papers described the case as “without merit.” I recall walking over to the Cravath offices very slowly, after talking with the staff.
Wu believes that the US v IBM case was important for holding a regulatory gun to the head of IBM for many years, even if at the end the Reagan administration dropped the case. Wu attributes the success of then upstarts Microsoft and Apple to the restraints IBM placed on itself to avoid government action. For example, IBM dropped its practice of tying (“bundling”) hardware and software, which facilitated an independent software industry, and development of personal computers. Wu promises a deeper dive into the IBM case in a forthcoming article called “Tech Dominance and the Policeman at the Elbow.”
I hope that Wu’s new article will go into more detail on the merits of the US v. IBM case. The allegations and proofs in the government’s case support Wu’s focus on the concern that companies like IBM and Microsoft may seek to squelch competitors by creating barriers to entry. The barriers can be effective and anti-competitive whether or not they are viewed that way by “Chicago school” critics.
With regard to the allegations and proofs in the US v. IBM case, a brief but fair summary can be found in a USDOJ brief filed in 1995 in connection with a tangentially related IBM court action. See https://www.justice.gov/atr/case-document/united-states-memorandum-1969-case
The 1995 USDOJ summary explains that the US v. IBM action that ended in 1982 alleged that IBM had undertaken exclusionary and predatory conduct with the aim and effect of eliminating competition so that IBM could maintain its monopoly position in general purpose digital computers. Specifically, the Government contended that IBM engaged in anticompetitive practices "for the purpose or with the effect of restraining or attempting to restrain actual or potential competitors from entering" the relevant markets.
The Government alleged that IBM's bundling of software with "related computer hardware equipment" for a single price was anti-competitive. A related allegation addressed the IBM practice of insisting on proprietary rather than industry standard interfaces between elements of the computer systems, and then arbitrarily shifting the standards in a way that created barriers for competitors.
Another allegation was that IBM predatorily priced and preannounced specialized computer systems that the Government termed "fighting machines." IBM allegedly introduced the specialized computer systems "knowing [the products] had unusually low profit expectations." Allegedly, IBM "developed and announced" the products "primarily for the purpose or with the effect of discouraging actual and potential customers from acquiring [competing products] " A goal was to discourage successful manufacturers of specialized computer systems from expanding into the general purpose systems that were IBM’s core business.
Also, in an effort to deter entry and injure competition, IBM allegedly "announced future production and marketing [of certain products] when it believed or had reason to believe that it was unlikely to be able to produce and market such products within the announced time frame . . . ."
To remedy these alleged violations, the Government sought, inter alia, divestiture.
The decision to dismiss the US v. IBM case was made in 1982 by USDOJ’s new antitrust chief, William Baxter. It is clear that the Reagan administration gave Baxter the job of antitrust chief with the expectation that he would rigorously apply Chicago School antitrust principles to USDOJ enforcement. He did that. The goal-posts set by Baxter for evaluating the US v. IBM case were narrow.
Baxter’s reasons for dismissal did include case management problems: the case went on for 13 years, and was not concisely presented. But the reasons for dismissal went far beyond that. From a narrow Chicago School point of view the allegations of IBM conduct creating barriers to competition did not pass muster. Baxter appeared to agree with Robert Bork’s often-quoted assessment that “There was no sensible explanation for IBM’s dominance . . . other than superior efficiency . . .”
But arguably IBM’s conduct would be found to be effectively anti-competitive if more assertive standards for antitrust illegality were applied. It is instructive that in August of 1984 the European Commission reached a settlement agreement with IBM that required IBM to facilitate interchangeability of complementary computer system products. For example, IBM was required to reveal hardware and software interface specifications to allow rivals to achieve compatibility. Also, IBM was required to cooperate with a European agency working to establish standardized interface standards.
The later USDOJ settlement in the US v. Microsoft case addressed similar concerns. In US v. Microsoft, for example, a focus was on computer code used to integrate the Internet Explorer with Windows. The government’s concern was about “middleware,” software that fits in the middle between applications and an operating system. The worry was that Microsoft integrated code in a way that was opaque to rivals, so that removing Microsoft middleware and substituting rival middleware would cause Windows to crash.
The US cases against IBM and Microsoft reinforce a basic point of Tim Wu’s Curse of Bigness book: A goal for the prosecutor and Court in a monopolization case is to maintain an open mind and carefully examine the facts to determine whether the main effect of product design and marketing practices of a monopolist is to block competitors and thereby deprive customers of choice.
This posting is by Don Allen Resnikoff, who is wholly responsible for the views expressed.
Tim Wu on US v. IBM
In his short book The Curse of Bigness: Antitrust in the New Gilded Age, Columbia Global Reports, RRP, 170 pages, Tim Wu argues for a return to an earlier and more aggressive interpretation of U.S. antitrust law. Tim Wu would like antitrust enforcement to focus on reducing the economic and political power of large companies. He argues vehemently for reviving the kind of big anti-monopoly cases the USDOJ pursued in the past.
At one point in his book Tim Wu focuses on the last series of monopoly cases pursued by the federal government, including the cases against IBM, Microsoft, and AT&T.
Wu’s focus on the US v. IBM case is particularly interesting to me. He is one of relatively few commenters who describe the case as having merit, and doing some good.
I worked on the US. v. IBM case during its last few years before the Reagan administration dismissed the case in 1982. My agreement with Wu is based on that experience. I participated in the moot-court like inquiry that USDOJ antitrust chief William Baxter conducted before he decided to abandon the case. As first assistant to the US v. IBM trial chief I was the senior trial staff person on hand in New York when the phone call came in from one of Baxter’s assistants in Washington directing me to hotfoot it over to the nearby Cravath, Swaine, & Moore offices and meet with IBM’s lawyer Tom Barr. My chore was to deal with papers terminating the litigation. The papers described the case as “without merit.” I recall walking over to the Cravath offices very slowly, after talking with the staff.
Wu believes that the US v IBM case was important for holding a regulatory gun to the head of IBM for many years, even if at the end the Reagan administration dropped the case. Wu attributes the success of then upstarts Microsoft and Apple to the restraints IBM placed on itself to avoid government action. For example, IBM dropped its practice of tying (“bundling”) hardware and software, which facilitated an independent software industry, and development of personal computers. Wu promises a deeper dive into the IBM case in a forthcoming article called “Tech Dominance and the Policeman at the Elbow.”
I hope that Wu’s new article will go into more detail on the merits of the US v. IBM case. The allegations and proofs in the government’s case support Wu’s focus on the concern that companies like IBM and Microsoft may seek to squelch competitors by creating barriers to entry. The barriers can be effective and anti-competitive whether or not they are viewed that way by “Chicago school” critics.
With regard to the allegations and proofs in the US v. IBM case, a brief but fair summary can be found in a USDOJ brief filed in 1995 in connection with a tangentially related IBM court action. See https://www.justice.gov/atr/case-document/united-states-memorandum-1969-case
The 1995 USDOJ summary explains that the US v. IBM action that ended in 1982 alleged that IBM had undertaken exclusionary and predatory conduct with the aim and effect of eliminating competition so that IBM could maintain its monopoly position in general purpose digital computers. Specifically, the Government contended that IBM engaged in anticompetitive practices "for the purpose or with the effect of restraining or attempting to restrain actual or potential competitors from entering" the relevant markets.
The Government alleged that IBM's bundling of software with "related computer hardware equipment" for a single price was anti-competitive. A related allegation addressed the IBM practice of insisting on proprietary rather than industry standard interfaces between elements of the computer systems, and then arbitrarily shifting the standards in a way that created barriers for competitors.
Another allegation was that IBM predatorily priced and preannounced specialized computer systems that the Government termed "fighting machines." IBM allegedly introduced the specialized computer systems "knowing [the products] had unusually low profit expectations." Allegedly, IBM "developed and announced" the products "primarily for the purpose or with the effect of discouraging actual and potential customers from acquiring [competing products] " A goal was to discourage successful manufacturers of specialized computer systems from expanding into the general purpose systems that were IBM’s core business.
Also, in an effort to deter entry and injure competition, IBM allegedly "announced future production and marketing [of certain products] when it believed or had reason to believe that it was unlikely to be able to produce and market such products within the announced time frame . . . ."
To remedy these alleged violations, the Government sought, inter alia, divestiture.
The decision to dismiss the US v. IBM case was made in 1982 by USDOJ’s new antitrust chief, William Baxter. It is clear that the Reagan administration gave Baxter the job of antitrust chief with the expectation that he would rigorously apply Chicago School antitrust principles to USDOJ enforcement. He did that. The goal-posts set by Baxter for evaluating the US v. IBM case were narrow.
Baxter’s reasons for dismissal did include case management problems: the case went on for 13 years, and was not concisely presented. But the reasons for dismissal went far beyond that. From a narrow Chicago School point of view the allegations of IBM conduct creating barriers to competition did not pass muster. Baxter appeared to agree with Robert Bork’s often-quoted assessment that “There was no sensible explanation for IBM’s dominance . . . other than superior efficiency . . .”
But arguably IBM’s conduct would be found to be effectively anti-competitive if more assertive standards for antitrust illegality were applied. It is instructive that in August of 1984 the European Commission reached a settlement agreement with IBM that required IBM to facilitate interchangeability of complementary computer system products. For example, IBM was required to reveal hardware and software interface specifications to allow rivals to achieve compatibility. Also, IBM was required to cooperate with a European agency working to establish standardized interface standards.
The later USDOJ settlement in the US v. Microsoft case addressed similar concerns. In US v. Microsoft, for example, a focus was on computer code used to integrate the Internet Explorer with Windows. The government’s concern was about “middleware,” software that fits in the middle between applications and an operating system. The worry was that Microsoft integrated code in a way that was opaque to rivals, so that removing Microsoft middleware and substituting rival middleware would cause Windows to crash.
The US cases against IBM and Microsoft reinforce a basic point of Tim Wu’s Curse of Bigness book: A goal for the prosecutor and Court in a monopolization case is to maintain an open mind and carefully examine the facts to determine whether the main effect of product design and marketing practices of a monopolist is to block competitors and thereby deprive customers of choice.
This posting is by Don Allen Resnikoff, who is wholly responsible for the views expressed.
Sackler family members face mass litigation and criminal investigations over Purdue conduct and opioids crisis:
Suffolk county in Long Island has sued several family members, and Connecticut and New York are considering criminal fraud and racketeering charges against leading family members
Joanna Walters in New York
@Joannawalters13
Members of the multibillionaire philanthropic Sackler family that owns the maker of prescription painkiller OxyContin are facing mass litigation and likely criminal investigation over the opioids crisis still ravaging America.
Some of the Sacklers wholly own Connecticut-based Purdue Pharma, the company that created and sells the legal narcotic OxyContin, a drug at the center of the opioid epidemic that now kills almost 200 people a day across the US.
Suffolk county on Long Island, New York, recently sued several family members personally over the overdose deaths and painkiller addiction blighting local communities. Now lawyers warn that action will be a catalyst for hundreds of other US cities, counties and states to follow suit.
At the same time, prosecutors in Connecticut and New York are understood to be considering criminal fraud and racketeering charges against leading family members over the way OxyContin has allegedly been dangerouslyoverprescribed and deceptively marketed to doctors and the public over the years, legal sources told the Guardian last week.
“This is essentially a crime family … drug dealers in nice suits and dresses,” said Paul Hanly, a New York city lawyer who represents Suffolk county and is also a lead attorney in a huge civil action playing out in federal court in Cleveland, Ohio, involving opioid manufacturers and distributors.
Source: Excerpt is from https://www.theguardian.com/us-news/2018/nov/19/sackler-family-members-face-mass-litigation-criminal-investigations-over-opioids-crisis
Suffolk county in Long Island has sued several family members, and Connecticut and New York are considering criminal fraud and racketeering charges against leading family members
Joanna Walters in New York
@Joannawalters13
Members of the multibillionaire philanthropic Sackler family that owns the maker of prescription painkiller OxyContin are facing mass litigation and likely criminal investigation over the opioids crisis still ravaging America.
Some of the Sacklers wholly own Connecticut-based Purdue Pharma, the company that created and sells the legal narcotic OxyContin, a drug at the center of the opioid epidemic that now kills almost 200 people a day across the US.
Suffolk county on Long Island, New York, recently sued several family members personally over the overdose deaths and painkiller addiction blighting local communities. Now lawyers warn that action will be a catalyst for hundreds of other US cities, counties and states to follow suit.
At the same time, prosecutors in Connecticut and New York are understood to be considering criminal fraud and racketeering charges against leading family members over the way OxyContin has allegedly been dangerouslyoverprescribed and deceptively marketed to doctors and the public over the years, legal sources told the Guardian last week.
“This is essentially a crime family … drug dealers in nice suits and dresses,” said Paul Hanly, a New York city lawyer who represents Suffolk county and is also a lead attorney in a huge civil action playing out in federal court in Cleveland, Ohio, involving opioid manufacturers and distributors.
Source: Excerpt is from https://www.theguardian.com/us-news/2018/nov/19/sackler-family-members-face-mass-litigation-criminal-investigations-over-opioids-crisis
AAI Asks First Circuit to Preserve Pharma Antitrust Class Actions Targeting Generic Exclusion (In re Asacol Antitrust Litigation)
AAI filed an amicus brief in the First Circuit Court of Appeals warning that unreasonable class action standards threaten to harm competition and consumers in the critically important pharmaceutical sector.
In In re Asacol Antitrust Litig., a class of indirect purchasers challenged an alleged "product hopping" scheme whereby brand-drug manufacturer Warner Chilcott pulled an ulcerative colitis drug from the market just as its patent was set to expire, only to substitute a replacement, patented drug and thereby stave off generic entry that would have benefitted consumers.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-first-circuit-to-preserve-pharma-antitrust-class-actions-targeting-generic-exclusion-in-re-asacol-antitrust-litigation/
AAI filed an amicus brief in the First Circuit Court of Appeals warning that unreasonable class action standards threaten to harm competition and consumers in the critically important pharmaceutical sector.
In In re Asacol Antitrust Litig., a class of indirect purchasers challenged an alleged "product hopping" scheme whereby brand-drug manufacturer Warner Chilcott pulled an ulcerative colitis drug from the market just as its patent was set to expire, only to substitute a replacement, patented drug and thereby stave off generic entry that would have benefitted consumers.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-first-circuit-to-preserve-pharma-antitrust-class-actions-targeting-generic-exclusion-in-re-asacol-antitrust-litigation/
Facebook on Thanksgiving eve took responsibility for hiring a Washington-based lobbying company, Definers Public Affairs, that pushed negative stories about Facebook’s critics, including the philanthropist George Soros.
Facebook’s communications and policy chief, Elliot Schrage, said in a memo posted Wednesday that he was responsible for hiring the group, and had done so to help protect the company’s image and conduct research about high-profile individuals who spoke critically about the social media platform. Mr. Schrage will be leaving the company, a move planned before the memo was released.
Facebook fired Definers last week, after a New York Times investigation published on Nov. 14.
“Did we ask them to do work on George Soros?” Mr. Schrage wrote in the memo, a draft of which had circulated online earlier in the week. “Yes.”
***
The Shrage memo is here: https://newsroom.fb.com/news/2018/11/elliot-schrage-on-definers/
Source: https://www.nytimes.com/2018/11/22/business/on-thanksgiving-eve-facebook-acknowledges-details-of-times-investigation.html?action=click&module=Latest&pgtype=Homepage
Facebook’s communications and policy chief, Elliot Schrage, said in a memo posted Wednesday that he was responsible for hiring the group, and had done so to help protect the company’s image and conduct research about high-profile individuals who spoke critically about the social media platform. Mr. Schrage will be leaving the company, a move planned before the memo was released.
Facebook fired Definers last week, after a New York Times investigation published on Nov. 14.
“Did we ask them to do work on George Soros?” Mr. Schrage wrote in the memo, a draft of which had circulated online earlier in the week. “Yes.”
***
The Shrage memo is here: https://newsroom.fb.com/news/2018/11/elliot-schrage-on-definers/
Source: https://www.nytimes.com/2018/11/22/business/on-thanksgiving-eve-facebook-acknowledges-details-of-times-investigation.html?action=click&module=Latest&pgtype=Homepage
The total value of the incentive package New York is using to lure Amazon could top $2.8 billion.
Amazon announced Tuesday that it would build new headquarters in New York City and Washington D.C.’s Virginia suburbs, each of which would host around 25,000 workers.
The New York City headquarters, built on the East River waterfront in Queens, would vault Amazon into the ranks of the city’s top private-sector employers while transforming a site now mostly occupied by industrial buildings and parking lots.
Snagging the online retailer, though, comes at a cost.
In addition to nearly $1.53 billion in tax credits and grants offered by the state, Amazon would also qualify for two big tax breaks from the city.
If it creates 25,000 jobs, as promised, Amazon would qualify for a city corporate income tax credit worth nearly $900 million over 12 years. On top of that, it would get a 15-year property-tax abatement worth an estimated $386 million.
Those city tax credits aren’t unique to the Amazon deal. They have long been available to other companies, too, as a way of incentivizing growth and development outside Manhattan’s crowded business districts.
Gov. Andrew Cuomo and New York City Mayor Bill de Blasio said they expect to more than recoup that amount in the form of personal income taxes paid by Amazon’s employees, sales tax and economic activity generated by the company’s presence.
Cuomo on Tuesday predicted that the project would eventually bring in $27.5 billion in new state revenue over the next 25 years, though that figure would depend on Amazon creating 40,000 new jobs in New York City — far more than the initial 25,000 it has promised. State budget director Robert Mujica said that calculation also includes an assumption that other businesses not connected to Amazon will have to hire as many as 67,000 workers to serve the needs of the company and its employees.
Some experts say that revenue projection, which includes ancillary jobs like a food vendor who sells sandwiches to Amazon workers, may overestimate the company’s impact.
“I’m not a big fan of counting the indirect jobs,” said Nicole Gelinas, a senior fellow at the Manhattan Institute. She said vendors would likely sell to someone else if Amazon weren’t there.
Source: https://www.washingtonpost.com/business/incentives-to-amazon-could-top-28-billion-in-nyc/2018/11/14/86ecfc8a-e85a-11e8-8449-1ff263609a31_story.html?utm_term=.283684e6726c
Democrats have captured state AG offices from Republicans in four states — Colorado, Michigan, Nevada and Wisconsin — while maintaining control of AG seats in New York, California, Illinois, Maryland, and eight other states, plus the District of Columbia.
Combined with the eight states where current Democratic AGs were not up for election and the two states where Democrats have been or will likely soon be appointed as AGs, those results mean that a Democrat will soon be the top prosecutor in a majority of U.S. states — including Iowa, Massachusetts and Maryland, where Republicans will control the governors’ mansions.
“Compared to the last few cycles, this was a resurgence on the Democratic attorney general side,” said Joe Jacquot, a Foley & Lardner LLP partner and former chief deputy attorney general of Florida. “I think those AGs — not only the ones that won in significant states, like Michigan, Wisconsin and Nevada, but also as a whole — feel a new motivation, and I think you’re going to see them press that in enforcement actions.”
The increased enforcement could include banking and financial issues.
Credit: Joe Hill, Law 360 (paywall)
Posting by Don Allen Resnikoff, who is responsible for the content
A Brief Book Review, by Don Allen Resnikoff:
THE FIXER: MY ADVENTURES SAVING STARTUPS FROM DEATH BY POLITICS,
by Bradley Tusk (Portfolio/Penguin, 2018)
Bradley Tusk’s short book reads like a promotional piece for his business. He is a consultant for businesses that need to fight political battles to survive. Successful clients have included the taxi app company, Uber, a fantasy sports company, FanDuel, and on-line insurer Lemonade.
Tusk wants you to know that he is pragmatic about politics, and tough minded. He describes politicians as motivated largely by self interest and the wishes of “pay-to-play” money donors. Politicians seldom do what is right for their broader constituency simply because it is the right thing to do.
Tusk’s book is worth reading for its war stories. The stories convey insights about the realities of interactions between competition and local politics.
Tusk’s stories have a common thread. The new businesses Tusk represents are disruptive, typically depending on modern internet technology. The new businesses challenge large commercial interests that are protected by favorable regulation. The businesses challenged by Tusk’s clients are well-connected politically, because they make large money contributions to politicians. For that reason the entrenched businesses are in a good position to preserve regulations that protect them.
Tusk’s strategy for his clients is to develop a campaign that puts pressure on politicians to dismantle the regulations that favor entrenched market players. That will clear a path for his clients.
Tusk’s first big client was Uber. When Tusk represented Uber it was a disruptive upstart, not the 800 pound gorilla it has become. Uber had not yet compromised its ability to charm the public. Uber’s innovative app-based business model challenged local government regulated and protected “yellow cabs.” Local governments regulated the cabs, but not necessarily in a way that made them cheap or efficient. Local governments often limited taxi competition by limiting the number of licenses, called “medallions,” that issued.
Local yellow cab interests were politically important in holding on to protective regulation, although the cab industry story differs from the FanDuel and Lemonade stories in that many yellow cab drivers are individual or otherwise small enterprises.
Tusk’s strategies for Uber involved mobilizing Uber customers to complain to legislators, and using lobbying firms to persuade regulators. A public relations campaign was launched as well. A key to Uber’s success was that customers disliked the traditional yellow cabs, but liked Uber.
Early victories for Uber were achieved in the District of Columbia and New York City, where regulations that blocked Uber were dismantled. The New York City victory marked a turning point for Uber. Here is an excerpt from the book outlining the New York strategy:
A memo I wrote [Uber’s] Travis in mid-2011 laying out my initial thoughts on how Uber should deal with its New York City problem ended up encompassing many of the same tactics we’d use over the next five years to fight the taxi industry: In every jurisdiction, make taxi’s opposition all about their own corrupt, entrenched needs, and not about the good of drivers or riders; align Uber with any elected official who really cared about technology and innovation; draw attention to taxi’s long and ugly history of racism; posit Uber as a way to fundamentally change that; and demonstrate that Uber drivers were all individual small businesses and this was a new and different type of opportunity for them. Taxi’s strength was their political influence. We needed to make it their weakness.
For the purposes of this brief review we will not explore in detail Tusk’s additional strategies for Uber, Fanduel, and Lemonade. They are, of course, available in Tusk’s book.
Like Tusk, the FTC and USDOJ have engaged in challenges to local regulations that favor particular entrenched businesses. But that is regulatory action that is tangential to Tusk’s business activity, which involves a lot of grass-roots effort and lobbying of politicians. Tusk’s approach is mostly about political campaigns that involve customer support and action, in addition to employing lobbyists. Tusk’s activity for his clients carries the spirit of street fighting.
The Tusk stories are useful in a way that is reminiscent of the industry studies economists have traditionally done to provide insight into particular markets. The stories help us understand app based taxi service, fantasy sports, and on-line insurance, all of which rely on the internet. Knowledge about particular markets is obviously a useful predicate for considering the need for market regulation.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
THE FIXER: MY ADVENTURES SAVING STARTUPS FROM DEATH BY POLITICS,
by Bradley Tusk (Portfolio/Penguin, 2018)
Bradley Tusk’s short book reads like a promotional piece for his business. He is a consultant for businesses that need to fight political battles to survive. Successful clients have included the taxi app company, Uber, a fantasy sports company, FanDuel, and on-line insurer Lemonade.
Tusk wants you to know that he is pragmatic about politics, and tough minded. He describes politicians as motivated largely by self interest and the wishes of “pay-to-play” money donors. Politicians seldom do what is right for their broader constituency simply because it is the right thing to do.
Tusk’s book is worth reading for its war stories. The stories convey insights about the realities of interactions between competition and local politics.
Tusk’s stories have a common thread. The new businesses Tusk represents are disruptive, typically depending on modern internet technology. The new businesses challenge large commercial interests that are protected by favorable regulation. The businesses challenged by Tusk’s clients are well-connected politically, because they make large money contributions to politicians. For that reason the entrenched businesses are in a good position to preserve regulations that protect them.
Tusk’s strategy for his clients is to develop a campaign that puts pressure on politicians to dismantle the regulations that favor entrenched market players. That will clear a path for his clients.
Tusk’s first big client was Uber. When Tusk represented Uber it was a disruptive upstart, not the 800 pound gorilla it has become. Uber had not yet compromised its ability to charm the public. Uber’s innovative app-based business model challenged local government regulated and protected “yellow cabs.” Local governments regulated the cabs, but not necessarily in a way that made them cheap or efficient. Local governments often limited taxi competition by limiting the number of licenses, called “medallions,” that issued.
Local yellow cab interests were politically important in holding on to protective regulation, although the cab industry story differs from the FanDuel and Lemonade stories in that many yellow cab drivers are individual or otherwise small enterprises.
Tusk’s strategies for Uber involved mobilizing Uber customers to complain to legislators, and using lobbying firms to persuade regulators. A public relations campaign was launched as well. A key to Uber’s success was that customers disliked the traditional yellow cabs, but liked Uber.
Early victories for Uber were achieved in the District of Columbia and New York City, where regulations that blocked Uber were dismantled. The New York City victory marked a turning point for Uber. Here is an excerpt from the book outlining the New York strategy:
A memo I wrote [Uber’s] Travis in mid-2011 laying out my initial thoughts on how Uber should deal with its New York City problem ended up encompassing many of the same tactics we’d use over the next five years to fight the taxi industry: In every jurisdiction, make taxi’s opposition all about their own corrupt, entrenched needs, and not about the good of drivers or riders; align Uber with any elected official who really cared about technology and innovation; draw attention to taxi’s long and ugly history of racism; posit Uber as a way to fundamentally change that; and demonstrate that Uber drivers were all individual small businesses and this was a new and different type of opportunity for them. Taxi’s strength was their political influence. We needed to make it their weakness.
For the purposes of this brief review we will not explore in detail Tusk’s additional strategies for Uber, Fanduel, and Lemonade. They are, of course, available in Tusk’s book.
Like Tusk, the FTC and USDOJ have engaged in challenges to local regulations that favor particular entrenched businesses. But that is regulatory action that is tangential to Tusk’s business activity, which involves a lot of grass-roots effort and lobbying of politicians. Tusk’s approach is mostly about political campaigns that involve customer support and action, in addition to employing lobbyists. Tusk’s activity for his clients carries the spirit of street fighting.
The Tusk stories are useful in a way that is reminiscent of the industry studies economists have traditionally done to provide insight into particular markets. The stories help us understand app based taxi service, fantasy sports, and on-line insurance, all of which rely on the internet. Knowledge about particular markets is obviously a useful predicate for considering the need for market regulation.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
DAR Commentary: Deltrahim tells CNBC he ignores the President’s opinions on Antitrust –
From https://www.investorideas.com/news/2018/main/11133CNBC-MakanDelrahim.asp
Interview excerpt:
FABER: But when the president writes, and this is from this summer, "In my opinion, The Washington Post is nothing more than an expensive lobbyist for Amazon as it uses protection against anti-trust claims, which many feel should be brought." Again, as the man who runs enforcement for the anti-trust division, when you hear something like that from the executive, is there a response that you have?
DELRAHIM: Well, we hear that from executive and legislative. I mean, by the way, these types of concerns raised about Amazon are bipartisan. And Senators raise them, the president has raised it. It's -- again, I think it's great that we have such a debate about free markets and the anti-trust laws there to protect the free markets. As far as what we do in our enforcement, you know, we need the evidence, we need the economics, we go to court. And politics, you know, that goes on between various aspects of the government don't affect our decisions to make these cases.
Could that be true? Is it consistent with past USDOJ deference to Presidential opinion?
Teddy Roosevelt famously was an active participant in antitrust enforcement. Writers Johnson and Kwak tell us that:
In late February 1902, J.P. Morgan, the leading financier of his day, went to the White House to meet with President Theodore Roosevelt and Attorney General Philander Knox. The government had just announced an antitrust suit -- the first of its kind -- against Morgan's recently formed railroad monopoly, Northern Securities, and this was a tense moment for the stock market. Morgan argued strongly that his industrial trusts were essential to American prosperity and competitiveness.
The banker wanted a deal. "If we have done anything wrong, send your man to my man and they can fix it up," he offered. But the president was blunt: "That can't be done." And Knox succinctly summarized Roosevelt's philosophy. "We don't want to fix it up," he told Morgan, "we want to stop it."
Johnson and Kwak make it clear that, more recently, Barack Obama was much more than a passive commenter on USDOJ enforcement. When leading bankers visited the White House in 2008, at the height on the banking crisis, the President was not shy in expressing himself:
"My administration is the only thing between you and the pitchforks," he famously told the bankers.
Johnson and Kwak complain that the enforcement that followed the Obama statement was weak, but that is not because President Obama was not engaged in the process of enforcement (or lack of it).
Perhaps Delrahim’s characterization of President Trump as a political commenter on USDOJ policy without much effect is less than fully persuasive.
Posted by Don Allen Resnikoff, who takes full responsibility for the content.
From https://www.investorideas.com/news/2018/main/11133CNBC-MakanDelrahim.asp
Interview excerpt:
FABER: But when the president writes, and this is from this summer, "In my opinion, The Washington Post is nothing more than an expensive lobbyist for Amazon as it uses protection against anti-trust claims, which many feel should be brought." Again, as the man who runs enforcement for the anti-trust division, when you hear something like that from the executive, is there a response that you have?
DELRAHIM: Well, we hear that from executive and legislative. I mean, by the way, these types of concerns raised about Amazon are bipartisan. And Senators raise them, the president has raised it. It's -- again, I think it's great that we have such a debate about free markets and the anti-trust laws there to protect the free markets. As far as what we do in our enforcement, you know, we need the evidence, we need the economics, we go to court. And politics, you know, that goes on between various aspects of the government don't affect our decisions to make these cases.
Could that be true? Is it consistent with past USDOJ deference to Presidential opinion?
Teddy Roosevelt famously was an active participant in antitrust enforcement. Writers Johnson and Kwak tell us that:
In late February 1902, J.P. Morgan, the leading financier of his day, went to the White House to meet with President Theodore Roosevelt and Attorney General Philander Knox. The government had just announced an antitrust suit -- the first of its kind -- against Morgan's recently formed railroad monopoly, Northern Securities, and this was a tense moment for the stock market. Morgan argued strongly that his industrial trusts were essential to American prosperity and competitiveness.
The banker wanted a deal. "If we have done anything wrong, send your man to my man and they can fix it up," he offered. But the president was blunt: "That can't be done." And Knox succinctly summarized Roosevelt's philosophy. "We don't want to fix it up," he told Morgan, "we want to stop it."
Johnson and Kwak make it clear that, more recently, Barack Obama was much more than a passive commenter on USDOJ enforcement. When leading bankers visited the White House in 2008, at the height on the banking crisis, the President was not shy in expressing himself:
"My administration is the only thing between you and the pitchforks," he famously told the bankers.
Johnson and Kwak complain that the enforcement that followed the Obama statement was weak, but that is not because President Obama was not engaged in the process of enforcement (or lack of it).
Perhaps Delrahim’s characterization of President Trump as a political commenter on USDOJ policy without much effect is less than fully persuasive.
Posted by Don Allen Resnikoff, who takes full responsibility for the content.
Stacy Mitchell advocates break-up of Amazon
Mitchell is the co-director of Institute for Local Self-Reliance. Earlier this year she wrote an article for The Nation called, “Amazon doesn’t just want to dominate the market — it wants to become the market.” In the Podcast below from public radio station WNYC, Mitchell describes the history of regulation of corporate concentration in a manner reminiscent of Tim Wu. She then explains why she thinks that the government should forcibly separate Amazon's platform business from its other businesses.
This Podcast is at https://www.wnycstudios.org/story/making-america-antitrust-again
Mitchell is the co-director of Institute for Local Self-Reliance. Earlier this year she wrote an article for The Nation called, “Amazon doesn’t just want to dominate the market — it wants to become the market.” In the Podcast below from public radio station WNYC, Mitchell describes the history of regulation of corporate concentration in a manner reminiscent of Tim Wu. She then explains why she thinks that the government should forcibly separate Amazon's platform business from its other businesses.
This Podcast is at https://www.wnycstudios.org/story/making-america-antitrust-again
AAI Files Comments in FTC Competition Hearings
On November 15, the AAI submitted comments in response to the Federal Trade Commission's request for public comments for Hearing #2 On Competition and Consumer Protection in the 21st Century. The FTC sought feedback on eleven wide-ranging topics, including the propriety of the consumer welfare standard, how antitrust law should account for public policy concerns, evidence of increasing concentration and changing price-cost margins, reform priorities, international convergence, error costs, out-of-market benefits, and monopsony and buyer power.
Read More - https://www.antitrustinstitute.org/work-product/aai-files-comments-in-ftc-competition-hearings/
On November 15, the AAI submitted comments in response to the Federal Trade Commission's request for public comments for Hearing #2 On Competition and Consumer Protection in the 21st Century. The FTC sought feedback on eleven wide-ranging topics, including the propriety of the consumer welfare standard, how antitrust law should account for public policy concerns, evidence of increasing concentration and changing price-cost margins, reform priorities, international convergence, error costs, out-of-market benefits, and monopsony and buyer power.
Read More - https://www.antitrustinstitute.org/work-product/aai-files-comments-in-ftc-competition-hearings/
Tim Wu: Competition policy as politics
Tim Wu’s Op-ed in Sunday’s NY Times anticipates his forthcoming book “The Curse of Bigness: Antitrust in the New Gilded Age.” Wu presents competition policy as a political issue. The dominance of big companies leads to totalitarianism. Former FTC Commissioner Robert Pitofsky warned in 1979 that “massively concentrated economic power, or state intervention induced by that level of concentration, is incompatible with liberal, constitutional democracy.” Antitrust has more than an economic goal. It is a check against the political dangers of unaccountable private power.
Tim Wu’s book, which will be available shortly (I do not have access to a preview copy), is likely to discuss details of how government should enforce the antitrust laws. In earlier writing, Wu has argued for antitrust enforcement that reaches beyond the current “consumer welfare” standard. He argues for post-consumer welfare antitrust that will be practical and predictable. (See https://www.competitionpolicyinternational.com/wp-content/uploads/2018/04/CPI-Wu.pdf)
Wu’s new book comes at a moment when it has become plain that the political importance of antitrust is known not only to devotees of Brandeis and Pitofsky, but also to Donald Trump.
President Donald Trump recently said that his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
In a video interview with Axios' Jonathan Swan and Jim VandeHei, Trump said he's "not looking to hurt" the U.S. tech giants but is considering action.
"We are looking at [antitrust] very seriously," Trump said. "Look, that doesn't mean we're doing it, but we're certainly looking and I think most people surmise that, I would imagine."
Trump says administration is looking into antitrust violations by Amazon, other tech giants
- President Donald Trump says his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
- In an interview with Axios, Trump says he's "not looking to hurt" the U.S. tech giants but is considering action.
Berkeley Lovelace Jr. | @BerkeleyJr
Published 7:02 AM ET Mon, 5 Nov 2018 Updated 2:20 PM ET Mon, 5 Nov 2018 CNBC.com
Rex Curry | Reuters
Jeff Bezos, Chairman and CEO of Amazon, speaks at the George W. Bush Presidential Center's Forum on Leadership in Dallas, Texas, U.S., April 20, 2018.
President Donald Trump said his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
In a video interview with Axios' Jonathan Swan and Jim VandeHei that aired on Sunday, Trump said he's "not looking to hurt" the U.S. tech giants but is considering action.
"We are looking at [antitrust] very seriously," Trump said. "Look, that doesn't mean we're doing it, but we're certainly looking and I think most people surmise that, I would imagine."
Trump said others have also considered action against tech companies but a "previous administration" stopped that. "They were talking about this years ago. You know they were actually talking about this same subject — monopoly."
Shares of the three tech companies were essentially flat in premarket trading on Monday.
The president has repeatedly attacked Amazon, saying without evidence that package deliveries by the U.S. Postal Service for Amazon were costing the service money.
Trump has also been critical of Amazon CEO Jeff Bezos, who owns The Washington Post.
Mike Allen, co-founder and executive editor of Axios, told CNBC on Monday he thinks Trump was being serious about this inquiry into big tech.
"The president has been talking about this for a long time," Allen said in a "Squawk Box" interview. He also mentioned Trump's "obsession" with Amazon.
Tech companies have been under the microscope in Washington recently on efforts to prevent foreign meddling in U.S. elections.
Source: https://www.cnbc.com/2018/11/05/trump-looking-into-antitrust-violations-against-amazon-other-tech-giants.html
Watch: CNBC's Is Google a monopoly?
Is Google a monopoly? https://www.cnbc.com/video/2018/11/01/is-google-a-monopoly.html
Tim Wu's "told you so" on AT&T --Time Warner
From his NYT Op-Ed:
Last week, HBO went dark for both DISH and DISH-Sling, the main competitors to DirecTV and DirecTV Now, AT&T’s television services. This brazenly anticompetitive strategy does not portend a happy future for the viewing public, or for HBO itself.
At the risk of saying “we told you so,” it was widely predicted before the merger that AT&T would use HBO and other Time Warner media properties in just this way. When the Justice Department sued (unsuccessfully) to block the merger last year, its case was premised on the idea that AT&T would use its ownership of such properties to hurt its rivals in telecommunications. And now it is doing so.
Post-merger, AT&T has the means and the incentive to raise prices on valuable content (like HBO or the coverage of the N.C.A.A. “March Madness” basketball tournament) for cheaper, “unintegrated” telecom competitors that have been saving consumers money. If its rivals refuse to pay up, it can withhold the content entirely, diminishing them as competitors.
Full Op-ed: https://www.nytimes.com/2018/11/07/opinion/att-hbo-antitrust.html?action=click&module=Opinion&pgtype=Homepagewww.nytimes.com/2018/11/07/opinion/att-hbo-antitrust.html?action=click&module=Opinion&pgtype=Homepage
Concentration in Cardiology Markets Associated with Higher Prices and Lower Quality of Care
Study by: Thomas Koch, Brett Wendling, and Nathan E. Wilson
In recent years local markets for physician services have become increasingly concentrated. A new study uses Medicare claims and enrollment data to examine the effect of cardiology market structure on utilization and health outcomes for four patient populations—those treated for hypertension, a chronic cardiac condition, an acute cardiac condition, or an acute myocardial infarction (AMI). The study found that higher market concentration is associated with higher total expenditures and worse health outcomes. In three of the sample populations, patients residing in a zip code at the 75th percentile of cardiology market concentration were found to have a 5 to 7 percent greater chance of risk-adjusted mortality as compared with identical patients in a zip code at the 25th percentile of market concentration.
Researchers also found that there was a 7 to 11 percent increase in expenditures when moving from the 25th percentile to the 75th percentile of market concentration. The negative correlation between concentration and quality of care found in this study indicates that antitrust agencies have reason to be concerned about the effects of consolidation in physician markets on the price and quality of healthcare services.
Full study here. http://www.hsr.org/hsr/abstract.jsp?aid=53913902447
Study by: Thomas Koch, Brett Wendling, and Nathan E. Wilson
In recent years local markets for physician services have become increasingly concentrated. A new study uses Medicare claims and enrollment data to examine the effect of cardiology market structure on utilization and health outcomes for four patient populations—those treated for hypertension, a chronic cardiac condition, an acute cardiac condition, or an acute myocardial infarction (AMI). The study found that higher market concentration is associated with higher total expenditures and worse health outcomes. In three of the sample populations, patients residing in a zip code at the 75th percentile of cardiology market concentration were found to have a 5 to 7 percent greater chance of risk-adjusted mortality as compared with identical patients in a zip code at the 25th percentile of market concentration.
Researchers also found that there was a 7 to 11 percent increase in expenditures when moving from the 25th percentile to the 75th percentile of market concentration. The negative correlation between concentration and quality of care found in this study indicates that antitrust agencies have reason to be concerned about the effects of consolidation in physician markets on the price and quality of healthcare services.
Full study here. http://www.hsr.org/hsr/abstract.jsp?aid=53913902447
NYT: A strike by antiquarian booksellers against Amazon succeedsIt was a rare concerted uprising against any part of Amazon by any of its millions of suppliers, leading to an even rarer capitulation. Even the book dealers said they were surprised at the sudden reversal by AbeBooks, the company’s secondhand and rare bookselling network.
The uprising, which involved nearly 600 booksellers in 27 countries removing about four million books, was set off by the retailer’s decision to cut off stores in five countries: the Czech Republic, Poland, Hungary, South Korea and Russia. AbeBooks never explained its actions beyond saying it was related to payment processing.
“[Amazon sub] AbeBooks was saying entire countries were expendable to its plans,” said Scott Brown, a Eureka, Calif., bookseller who was an organizer of the strike. “Booksellers everywhere felt they might be next.”
The matter was apparently resolved when Sally Burdon, an Australian bookseller who is president of the International League of Antiquarian Booksellers, spoke with Arkady Vitrouk, chief executive of AbeBooks. In a Wednesday email to her members after their talk, Ms. Burdon said Mr. Vitrouk apologized for the platform’s behavior “a number of times” and said booksellers in the affected countries would not be dropped as scheduled on Nov. 30.
From: https://www.nytimes.com/2018/11/07/technology/amazon-bookseller-protest-strike.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=9&pgtype=sectionfront
The uprising, which involved nearly 600 booksellers in 27 countries removing about four million books, was set off by the retailer’s decision to cut off stores in five countries: the Czech Republic, Poland, Hungary, South Korea and Russia. AbeBooks never explained its actions beyond saying it was related to payment processing.
“[Amazon sub] AbeBooks was saying entire countries were expendable to its plans,” said Scott Brown, a Eureka, Calif., bookseller who was an organizer of the strike. “Booksellers everywhere felt they might be next.”
The matter was apparently resolved when Sally Burdon, an Australian bookseller who is president of the International League of Antiquarian Booksellers, spoke with Arkady Vitrouk, chief executive of AbeBooks. In a Wednesday email to her members after their talk, Ms. Burdon said Mr. Vitrouk apologized for the platform’s behavior “a number of times” and said booksellers in the affected countries would not be dropped as scheduled on Nov. 30.
From: https://www.nytimes.com/2018/11/07/technology/amazon-bookseller-protest-strike.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=9&pgtype=sectionfront
After mid-terms, MD Consumer Rights Coalition is cautiously optimistic about what the future holds in both Maryland and in Congress.
From a recent email letter to supporters:
In Congress, a number of candidates who support economic rights, affordable healthcare, and consumer protections won their elections. Deb Haaland, a Native American woman, was elected to Congress from New Mexico on a platform of economic fairness and immigration rights. Haaland and Sharice Davids (D-KS) are the first two Native American women elected to Congress. Ilhan Omar, the first Somali-American woman (and one of the first Muslim women) elected to Congress, won her race in Minnesota on a detailed economic rights platform including a federal jobs guarantee and increasing taxes on the wealthy. Alexandria Ocasio-Cortez (D-NY) became the youngest woman elected to Congress and ran a strong campaign centered on strong proposals for economic equity.
Shared themes of economic justice, Medicare for All, debt-free college,and reducing income inequality and the racial wealth gap vaulted Rashida Talib (D-MI), a Muslim woman, Ayanna Pressely (D-MA), an African-American former City Councilwoman, and Veronica Escobar (D-TX), a Latina former county judge, to Congress.
In January, there will be 223 Democrats and 197 Republicans in the House of Representatives. As Democrats ascend to leadership in House Congressional committees, several economic rights and consumer protection champions will chair committees including Maxine Waters (D-CA), who will chair the House Financial Services Committee, and Maryland’s own Elijah Cummings (D-MD), who will helm the House Oversight Committee. This means that it will be far more difficult for Members of Congress who oppose economic rights and consumer protections to attempt to overturn Obama-era regulations.
In the U.S. Senate, there will be 51 Republicans and 46 Democrats. This means that there may be strong differences between the Senate and House as they work towards passage of consumer protection legislation.
The Maryland Consumer Rights Coalition believes that consumer protection is a bipartisan issue: regulations help businesses and consumers both know the rules and operate from the same rule book in the marketplace. We look forward to working with members of Congress on both sides of the aisle to pass strong consumer protection legislation.
In Maryland, Governor Larry Hogan was re-elected, becoming only the second Republican governor to win a second term in Maryland. In the State House, Democrats held onto a super-majority in the House and Senate-meaning they can override a veto by the Governor. A number of new legislators elected to both the House and Senate ran on campaigns highlighting economic equity and inclusion issues.
Governor Hogan has already laid out his agenda highlighting tax cuts and greater accountability and oversight of schools, among other issues. What does these policies mean for public education and for low-income and working families?
What do these elections mean for us – and for the issues we care about – in Congress and in Annapolis? How can we take the energy and enthusiasm that so many individuals demonstrated in their work around the midterm elections and translate that momentum into the legislative session and federal advocacy?
Step one: join us at our Economic Summit & Consumer Celebration on November 15th when Congressman Jamie Raskin will share his thoughts on are his thoughts on how we should move forward and articulate, expand, and deepen the movement for economic rights in Maryland and Congress in this new political landscape. Congressman Raskin is one of the nation’s strongest progressive voices and strategists, and we’re delighted to present him with our Federal Champion of the Year award. You can buy tickets by clicking here.
From a recent email letter to supporters:
In Congress, a number of candidates who support economic rights, affordable healthcare, and consumer protections won their elections. Deb Haaland, a Native American woman, was elected to Congress from New Mexico on a platform of economic fairness and immigration rights. Haaland and Sharice Davids (D-KS) are the first two Native American women elected to Congress. Ilhan Omar, the first Somali-American woman (and one of the first Muslim women) elected to Congress, won her race in Minnesota on a detailed economic rights platform including a federal jobs guarantee and increasing taxes on the wealthy. Alexandria Ocasio-Cortez (D-NY) became the youngest woman elected to Congress and ran a strong campaign centered on strong proposals for economic equity.
Shared themes of economic justice, Medicare for All, debt-free college,and reducing income inequality and the racial wealth gap vaulted Rashida Talib (D-MI), a Muslim woman, Ayanna Pressely (D-MA), an African-American former City Councilwoman, and Veronica Escobar (D-TX), a Latina former county judge, to Congress.
In January, there will be 223 Democrats and 197 Republicans in the House of Representatives. As Democrats ascend to leadership in House Congressional committees, several economic rights and consumer protection champions will chair committees including Maxine Waters (D-CA), who will chair the House Financial Services Committee, and Maryland’s own Elijah Cummings (D-MD), who will helm the House Oversight Committee. This means that it will be far more difficult for Members of Congress who oppose economic rights and consumer protections to attempt to overturn Obama-era regulations.
In the U.S. Senate, there will be 51 Republicans and 46 Democrats. This means that there may be strong differences between the Senate and House as they work towards passage of consumer protection legislation.
The Maryland Consumer Rights Coalition believes that consumer protection is a bipartisan issue: regulations help businesses and consumers both know the rules and operate from the same rule book in the marketplace. We look forward to working with members of Congress on both sides of the aisle to pass strong consumer protection legislation.
In Maryland, Governor Larry Hogan was re-elected, becoming only the second Republican governor to win a second term in Maryland. In the State House, Democrats held onto a super-majority in the House and Senate-meaning they can override a veto by the Governor. A number of new legislators elected to both the House and Senate ran on campaigns highlighting economic equity and inclusion issues.
Governor Hogan has already laid out his agenda highlighting tax cuts and greater accountability and oversight of schools, among other issues. What does these policies mean for public education and for low-income and working families?
What do these elections mean for us – and for the issues we care about – in Congress and in Annapolis? How can we take the energy and enthusiasm that so many individuals demonstrated in their work around the midterm elections and translate that momentum into the legislative session and federal advocacy?
Step one: join us at our Economic Summit & Consumer Celebration on November 15th when Congressman Jamie Raskin will share his thoughts on are his thoughts on how we should move forward and articulate, expand, and deepen the movement for economic rights in Maryland and Congress in this new political landscape. Congressman Raskin is one of the nation’s strongest progressive voices and strategists, and we’re delighted to present him with our Federal Champion of the Year award. You can buy tickets by clicking here.
Grass-roots campaigner Desmond Meade on the successful Florida ballot initiative on ex-felons' right to vote
For those engaged in local campaigns concerning consumer and other citizen rights, there is encouragement in the success of the grass roots campaign to restore voting rights to ex-felons in the state of Florida. At least 1.4 million people have regained the right to vote in Florida, following the passage of Amendment 4, a statewide initiative to re-enfranchise people with felony convictions who have completed their sentences, excluding people convicted of murder or sex offenses. The amendment passed with 64.5 percent of the vote. It needed 60 percent to pass.
There has been a lot of media coverage, but left-leaning Democracy Now's reporting includes a touching video interview with Desmond Meade, a convicted felon who spearheaded the fight for Amendment 4. Desmond Meade is the president of the Florida Rights Restoration Coalition. He’s also chair of Floridians for a Fair Democracy. DAR
The Democracy Now video, including the interview with Desmond Meade, is here: https://www.democracynow.org/2018/11/7/love_prevails_floridians_celebrate_massive_restoration
Posting by Don Allen Resnikoff, who is responsible for the content
For those engaged in local campaigns concerning consumer and other citizen rights, there is encouragement in the success of the grass roots campaign to restore voting rights to ex-felons in the state of Florida. At least 1.4 million people have regained the right to vote in Florida, following the passage of Amendment 4, a statewide initiative to re-enfranchise people with felony convictions who have completed their sentences, excluding people convicted of murder or sex offenses. The amendment passed with 64.5 percent of the vote. It needed 60 percent to pass.
There has been a lot of media coverage, but left-leaning Democracy Now's reporting includes a touching video interview with Desmond Meade, a convicted felon who spearheaded the fight for Amendment 4. Desmond Meade is the president of the Florida Rights Restoration Coalition. He’s also chair of Floridians for a Fair Democracy. DAR
The Democracy Now video, including the interview with Desmond Meade, is here: https://www.democracynow.org/2018/11/7/love_prevails_floridians_celebrate_massive_restoration
Posting by Don Allen Resnikoff, who is responsible for the content
Medicaid expansion scores election wins and losses across the country
By Harris Meyer | November 7, 2018
Updated at 2:40 a.m. ET
From the Rocky Mountains to the Great Plains to New England, Medicaid expansion got a big boost Tuesday from ballot initiatives that appeared headed for passage and from gubernatorial victories by Democrats in several states who made expansion a central issue.
Vvoters in Nebraska and Utah approved mandatory ballot initiatives to extend Medicaid coverage under the Affordable Care Act to adults with incomes under 138% of the federal poverty level. Republican governors and lawmakers in those states had repeatedly refused to pass it.
Democratic gubernatorial candidates who campaigned on expansion won contests in Kansas and Maine, both states where Republican governors have rejected it. Those victories made expansion much more likely.
On the other hand, a Republican who either oppose expansion or favor imposing limits on eligibility, such as work requirements, won in Florida, and a Republican may win in Georgia. Their Democratic opponents had made Medicaid expansion central to their campaigns.
In Michigan, a state that already expanded Medicaid, the Democratic gubernatorial candidate prevailed against a GOP opponent who favored work requirements. Gretchen Whitmer now will have to convince GOP lawmakers not to move forward with those eligibility limits, which likely would reduce enrollment.
But in Ohio, former U.S. Senator and current Attorney General Mike DeWine, who supported work requirements for the state's expansion program, beat the Democrat, Richard Cordray, who opposed a work mandate.
From: https://www.modernhealthcare.com/article/20181107/NEWS/181109942?utm_source=modernhealthcare&utm_campaign=am&utm_medium=email&utm_content=20181107-NEWS-181109942
DAR comment: The outcome of Tuesday's Medicaid ballot initiatives and some of the governor and Senate races underlines the obvious point that health care and other consumer advocacy points require buy-in of voters; there are many voters who would seem to be helped by expanded government support for health care and other government benefits who vote against because of other issues, such as those emphacized in the rhetoric of Donald Trump. Obviously, consumer benefit policy advocacy and political advocacy are linked.
Policy as politics: McCaskill's focus on health care and wage issues did not carry the day in Missouri
McCaskill's campaign focused primarily on pocketbook issues, like health care. She backed a ballot initiative raising Missouri's minimum wage and a union-led referendum on the Republican-backed right to work law passed by the Missouri General Assembly.
In Kansas City, voters turned out overwhelmingly for McCaskill, but it wasn't enough to carry her to victory. And while Greene County, which contains Springfield, turned out for Hawley, McCaskill fared better than Hillary Clinton did in the 2016 presidential election.
While McCaskill insisted she's a moderate, Hawley sought to tie her to national Democratic leaders, including U.S. Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif.
During the campaign, McCaskill said she supported increased border security and she touted an endorsement by the union that represents Border Patrol agents, while Hawley accused her of supporting a "radical" immigration bill. The bill McCaskill is co-sponsoring would halt family separations at the border.
McCaskill tried to focus the race on protecting parts of former President Barack Obama's Affordable Care Act -- the same one Trump campaigned on repealing. Hawley is part of a Republican lawsuit that would undo the health care law.
Hawley, in response, said he supported a stand-alone law requiring that insurance companies provide coverage for those with pre-existing conditions. His campaign released an ad featuring his son, who he said has a rare chronic bone condition.
https://www.msn.com/en-us/news/politics/republican-hawley-beats-mccaskill-to-capture-us-senate-seat-in-missouri/ar-BBPqKtI?ocid=spartandhp
McCaskill's campaign focused primarily on pocketbook issues, like health care. She backed a ballot initiative raising Missouri's minimum wage and a union-led referendum on the Republican-backed right to work law passed by the Missouri General Assembly.
In Kansas City, voters turned out overwhelmingly for McCaskill, but it wasn't enough to carry her to victory. And while Greene County, which contains Springfield, turned out for Hawley, McCaskill fared better than Hillary Clinton did in the 2016 presidential election.
While McCaskill insisted she's a moderate, Hawley sought to tie her to national Democratic leaders, including U.S. Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif.
During the campaign, McCaskill said she supported increased border security and she touted an endorsement by the union that represents Border Patrol agents, while Hawley accused her of supporting a "radical" immigration bill. The bill McCaskill is co-sponsoring would halt family separations at the border.
McCaskill tried to focus the race on protecting parts of former President Barack Obama's Affordable Care Act -- the same one Trump campaigned on repealing. Hawley is part of a Republican lawsuit that would undo the health care law.
Hawley, in response, said he supported a stand-alone law requiring that insurance companies provide coverage for those with pre-existing conditions. His campaign released an ad featuring his son, who he said has a rare chronic bone condition.
https://www.msn.com/en-us/news/politics/republican-hawley-beats-mccaskill-to-capture-us-senate-seat-in-missouri/ar-BBPqKtI?ocid=spartandhp
"Trump Administration Spares Corporate Wrongdoers Billions in Penalties"
The New York Times reports:
Across the corporate landscape, the Trump administration has presided over a sharp decline in financial penalties against banks and big companies accused of malfeasance, according to analyses of government data and interviews with more than 60 former and current federal officials. The approach mirrors the administration’s aggressive deregulatory agenda throughout the federal government.
The New York Times and outside experts tallied enforcement activity at the S.E.C. and the Justice Department, the two most powerful agencies policing the corporate and financial sectors. Comparing cases filed during the first 20 months of the Trump presidency with the final 20 months of the Obama administration, the review found:
• A 62 percent drop in penalties imposed and illicit profits ordered returned by the S.E.C., to $1.9 billion under the Trump administration from $5 billion under the Obama administration;
• A 72 percent decline in corporate penalties from the Justice Department’s criminal prosecutions, to $3.93 billion from $14.15 billion, and a similar percent drop in civil penalties against financial institutions, to $7.4 billion;
• A lighter touch toward the banking industry, with the S.E.C. ordering banks to pay $1.7 billion during the Obama period, nearly four times as much as in the Trump era, and Mr. Trump’s Justice Department bringing 17 such cases, compared with 71.
The full article is here. https://www.nytimes.com/2018/11/03/us/trump-sec-doj-corporate-penalties.html
The New York Times reports:
Across the corporate landscape, the Trump administration has presided over a sharp decline in financial penalties against banks and big companies accused of malfeasance, according to analyses of government data and interviews with more than 60 former and current federal officials. The approach mirrors the administration’s aggressive deregulatory agenda throughout the federal government.
The New York Times and outside experts tallied enforcement activity at the S.E.C. and the Justice Department, the two most powerful agencies policing the corporate and financial sectors. Comparing cases filed during the first 20 months of the Trump presidency with the final 20 months of the Obama administration, the review found:
• A 62 percent drop in penalties imposed and illicit profits ordered returned by the S.E.C., to $1.9 billion under the Trump administration from $5 billion under the Obama administration;
• A 72 percent decline in corporate penalties from the Justice Department’s criminal prosecutions, to $3.93 billion from $14.15 billion, and a similar percent drop in civil penalties against financial institutions, to $7.4 billion;
• A lighter touch toward the banking industry, with the S.E.C. ordering banks to pay $1.7 billion during the Obama period, nearly four times as much as in the Trump era, and Mr. Trump’s Justice Department bringing 17 such cases, compared with 71.
The full article is here. https://www.nytimes.com/2018/11/03/us/trump-sec-doj-corporate-penalties.html
AAI Asks Seventh Circuit for Better Monopolization Standards (Viamedia v. Comcast)
The American Antitrust Institute (AAI) and Public Knowledge have filed an amicus brief in the Seventh Circuit Court of Appeals (Link: https://www.antitrustinstitute.org/wp-content/uploads/2018/11/Viamedia-v.-Comcast-11.1.18.pdf) urging the court to reverse a district court's dismissal of refusal-to-deal and tying claims based on overly demanding monopolization standards.
Among other things, the brief argues that the district court improperly extended the defendant-friendly Trinko decision to mean that a refusal-to-deal claim can only be brought if a plaintiff shows that the monopolist's conduct had no potential rational purpose. And it improperly extended the defendant-friendly Masushita decision to mean that a plaintiff cannot avoid summary judgment unless it presents evidence that "tends to exclude" the possibility that the monopolist's conduct was lawful.
Read More - URL https://www.antitrustinstitute.org/work-product/aai-asks-seventh-circuit-for-better-monopolization-standards-viamedia-v-comcast/
The American Antitrust Institute (AAI) and Public Knowledge have filed an amicus brief in the Seventh Circuit Court of Appeals (Link: https://www.antitrustinstitute.org/wp-content/uploads/2018/11/Viamedia-v.-Comcast-11.1.18.pdf) urging the court to reverse a district court's dismissal of refusal-to-deal and tying claims based on overly demanding monopolization standards.
Among other things, the brief argues that the district court improperly extended the defendant-friendly Trinko decision to mean that a refusal-to-deal claim can only be brought if a plaintiff shows that the monopolist's conduct had no potential rational purpose. And it improperly extended the defendant-friendly Masushita decision to mean that a plaintiff cannot avoid summary judgment unless it presents evidence that "tends to exclude" the possibility that the monopolist's conduct was lawful.
Read More - URL https://www.antitrustinstitute.org/work-product/aai-asks-seventh-circuit-for-better-monopolization-standards-viamedia-v-comcast/
20 minutes of John Oliver on State Attorneys General
Many State AGs are elected, and if that is true in your state then John Oliver wants you to do some research and vote. Many State AGs, Republican and Democrat are highly partisan, and spend great effort challenging the federal government, for better or worse. Oliver seems able to focus on worse.
The YouTube video URL follows. WARNING: Oliver uses profanity, and jokes.
https://www.youtube.com/watch?v=UpdMYOtAmKY
Many State AGs are elected, and if that is true in your state then John Oliver wants you to do some research and vote. Many State AGs, Republican and Democrat are highly partisan, and spend great effort challenging the federal government, for better or worse. Oliver seems able to focus on worse.
The YouTube video URL follows. WARNING: Oliver uses profanity, and jokes.
https://www.youtube.com/watch?v=UpdMYOtAmKY
From NYT:
Letitia James and Keith H. Wofford faced off on Tuesday in their only debate for New York attorney general
Mr. Wofford, a Republican, had called for multiple debates, but Ms. James, a Democrat who is handily leading in public polls, agreed to just this debate at the Manhattan studios of Spectrum NY1 — and it nearly did not happen.
The New York attorney general’s office currently has dozens of actions against Mr. Trump and his administration, including a lawsuit against the president’s charitable foundation and another challenging efforts to ask a citizenship question on the census.
Ms. James has vowed to continue the efforts against Mr. Trump and his policies, and she continued to embrace that role on Tuesday. “Attorneys general across this country have been the firmest pillars of our democracy,” she said.
Her one question to Mr. Wofford was why he had voted for Mr. Trump for president in 2016.
From: https://www.nytimes.com/2018/10/31/nyregion/letitia-james-keith-wofford-debate.html?fallback=0&recId=1CLKskjlCJ60b6AUG479Co1il2n&locked=0&geoContinent=NA&geoRegion=DC&recAlloc=contextual-bandit-home-geo&geoCountry=US&blockId=midterm-elections&imp_id=267963940&action=click&module=Election%202018&pgtype=Homepage
Christy McDonald of Detroit Public Television shares a look at a close Attorney General race in Michigan, where Democratic candidate Dana Nessel is running against Republican candidate Tom Leonard.
The video is here: https://www.youtube.com/watch?v=uhCb11aq3RI
Pence speech suggests full bore US government conflict with China -- so resolution of trade and tariff issues affecting US consumers may be difficult
Vice President Mike Pence's speech blasting China was a "wake up call," according to CNBC's Jim Cramer.
Pence's Oct. 4 address at Washington's Hudson Institute accused China of "malign" efforts to undermine President Donald Trump and sway the November midterm elections from Republicans — a charge China has denied.
Cramer described the tone of the Pence speech as not just hawkish but a "declaration of economic war."
Cramer said: "It was a recognition that it's a communist country" and not really an ally of the U.S. because it "has none of the protections that democracies afford," he added.The U.S. and China are currently locked in a trade war that's seen each side imposing tariffs on each other's products.
However, Cramer said the divide between the world's two largest economic superpowers is bigger than trade.
Source: https://www.cnbc.com/2018/10/24/cramer-pence-speech-on-china-most-important-of-trump-administration.html
The Pence speech is here: https://www.whitehouse.gov/briefings-statements/remarks-vice-president-pence-administrations-policy-toward-china/
Excerpt from Pence speech:
But I come before you today because the American people deserve to know that, as we speak, Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States.
China is also applying this power in more proactive ways than ever before, to exert influence and interfere in the domestic policy and politics of this country.
Under President Trump’s leadership, the United States has taken decisive action to respond to China with American action, applying the principles and the policies long advocated in these halls.
In our National Security Strategy that the President Trump released last December, he described a new era of “great power competition.” Foreign nations have begun to, as we wrote, “reassert their influence regionally and globally,” and they are “contesting [America’s] geopolitical advantages and trying [in essence] to change the international order in their favor.”
Vice President Mike Pence's speech blasting China was a "wake up call," according to CNBC's Jim Cramer.
Pence's Oct. 4 address at Washington's Hudson Institute accused China of "malign" efforts to undermine President Donald Trump and sway the November midterm elections from Republicans — a charge China has denied.
Cramer described the tone of the Pence speech as not just hawkish but a "declaration of economic war."
Cramer said: "It was a recognition that it's a communist country" and not really an ally of the U.S. because it "has none of the protections that democracies afford," he added.The U.S. and China are currently locked in a trade war that's seen each side imposing tariffs on each other's products.
However, Cramer said the divide between the world's two largest economic superpowers is bigger than trade.
Source: https://www.cnbc.com/2018/10/24/cramer-pence-speech-on-china-most-important-of-trump-administration.html
The Pence speech is here: https://www.whitehouse.gov/briefings-statements/remarks-vice-president-pence-administrations-policy-toward-china/
Excerpt from Pence speech:
But I come before you today because the American people deserve to know that, as we speak, Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States.
China is also applying this power in more proactive ways than ever before, to exert influence and interfere in the domestic policy and politics of this country.
Under President Trump’s leadership, the United States has taken decisive action to respond to China with American action, applying the principles and the policies long advocated in these halls.
In our National Security Strategy that the President Trump released last December, he described a new era of “great power competition.” Foreign nations have begun to, as we wrote, “reassert their influence regionally and globally,” and they are “contesting [America’s] geopolitical advantages and trying [in essence] to change the international order in their favor.”
NY Judge says fantasy sports is gambling
The opinion is here:
https://dlbjbjzgnk95t.cloudfront.net/1096000/1096870/fantasyruling-2-29.pdf
White, et al. v. Cuomo
IndexNo.: 5851-16
Excerpt:
Accordingly, it is hereby
ORDERED,ADJUDGED AND DECLARED that Plaintiff's motion for Summary Judgment is granted herein (and Defendant's cross-motion denied) as follows: that Chapter 237 of the Laws of the State of N ew York, to the extent that it authorizes and regulates IFS within the State of New York, is found null arid void as in violation of Article I, §9 of the New York State Constitution; and it is further
ORDERED, ADIDDGED and DECLARED that Defendant's cross-motion for summary judgment granting dismissal of the within action is granted herein (and plaintiffs motion denied) as follows; Chapter 237 of the Laws of the State of New York, to the extent that it excludes IFS from the scope of the New York State Penal Law definition of "gambling" at Article 225, is not in violation of Article I, §9 of the New York State Constitution,
The opinion is here:
https://dlbjbjzgnk95t.cloudfront.net/1096000/1096870/fantasyruling-2-29.pdf
White, et al. v. Cuomo
IndexNo.: 5851-16
Excerpt:
Accordingly, it is hereby
ORDERED,ADJUDGED AND DECLARED that Plaintiff's motion for Summary Judgment is granted herein (and Defendant's cross-motion denied) as follows: that Chapter 237 of the Laws of the State of N ew York, to the extent that it authorizes and regulates IFS within the State of New York, is found null arid void as in violation of Article I, §9 of the New York State Constitution; and it is further
ORDERED, ADIDDGED and DECLARED that Defendant's cross-motion for summary judgment granting dismissal of the within action is granted herein (and plaintiffs motion denied) as follows; Chapter 237 of the Laws of the State of New York, to the extent that it excludes IFS from the scope of the New York State Penal Law definition of "gambling" at Article 225, is not in violation of Article I, §9 of the New York State Constitution,
Following is the study that is the source for many media articles:
Advertising in Young Children's Apps: A Content Analysis
Meyer, Marisa*; Adkins, Victoria, MSW†; Yuan, Nalingna, MS*; Weeks, Heidi M., PhD‡; Chang, Yung-Ju, PhD§; Radesky, Jenny, MD*
Journal of Developmental & Behavioral Pediatrics: October 26, 2018 - Volume Publish Ahead of Print - Issue - p
Objective: Young children use mobile devices on average 1 hour/day, but no studies have examined the prevalence of advertising in children's apps. The objective of this study was to describe the advertising content of popular children's apps.
Methods: To create a coding scheme, we downloaded and played 39 apps played by children aged 12 months to 5 years in a pilot study of a mobile sensing app; 2 researchers played each app, took detailed notes on the design of advertisements, and iteratively refined the codebook (interrater reliability 0.96). Codes were then applied to the 96 most downloaded free and paid apps in the 5 And Under category on the Google Play app store.
Results: Of the 135 apps reviewed, 129 (95%) contained at least 1 type of advertising. These included use of commercial characters (42%); full-app teasers (46%); advertising videos interrupting play (e.g., pop-ups [35%] or to unlock play items [16%]); in-app purchases (30%); prompts to rate the app (28%) or share on social media (14%); distracting ads such as banners across the screen (17%) or hidden ads with misleading symbols such as “$” or camouflaged as gameplay items (7%). Advertising was significantly more prevalent in free apps (100% vs 88% of paid apps), but occurred at similar rates in apps labeled as “educational” versus other categories.
Conclusion: In this exploratory study, we found high rates of mobile advertising through manipulative and disruptive methods. These results have implications for advertising regulation, parent media choices, and apps' educational value.
Advertising in Young Children's Apps: A Content Analysis
Meyer, Marisa*; Adkins, Victoria, MSW†; Yuan, Nalingna, MS*; Weeks, Heidi M., PhD‡; Chang, Yung-Ju, PhD§; Radesky, Jenny, MD*
Journal of Developmental & Behavioral Pediatrics: October 26, 2018 - Volume Publish Ahead of Print - Issue - p
- Abstract -https://journals.lww.com/jrnldbp/Abstract/publishahead/Advertising_in_Young_Children_s_Apps___A_Content.99257.aspx#article-abstract-content1
Objective: Young children use mobile devices on average 1 hour/day, but no studies have examined the prevalence of advertising in children's apps. The objective of this study was to describe the advertising content of popular children's apps.
Methods: To create a coding scheme, we downloaded and played 39 apps played by children aged 12 months to 5 years in a pilot study of a mobile sensing app; 2 researchers played each app, took detailed notes on the design of advertisements, and iteratively refined the codebook (interrater reliability 0.96). Codes were then applied to the 96 most downloaded free and paid apps in the 5 And Under category on the Google Play app store.
Results: Of the 135 apps reviewed, 129 (95%) contained at least 1 type of advertising. These included use of commercial characters (42%); full-app teasers (46%); advertising videos interrupting play (e.g., pop-ups [35%] or to unlock play items [16%]); in-app purchases (30%); prompts to rate the app (28%) or share on social media (14%); distracting ads such as banners across the screen (17%) or hidden ads with misleading symbols such as “$” or camouflaged as gameplay items (7%). Advertising was significantly more prevalent in free apps (100% vs 88% of paid apps), but occurred at similar rates in apps labeled as “educational” versus other categories.
Conclusion: In this exploratory study, we found high rates of mobile advertising through manipulative and disruptive methods. These results have implications for advertising regulation, parent media choices, and apps' educational value.
NYT: Rural Hospitals are closing: State Medicaid expansion choices have an effect
In its June report to Congress, the Medicare Payment Advisory Commission found that of the 67 rural hospitals that closed since 2013, about one-third were more than 20 miles from the next closest hospital.
A study published last year in Health Affairs by researchers from the University of Minnesota found that over half of rural counties now lack obstetric services. Another study, published in Health Services Research, showed that such closures increase the distance pregnant women must travel for delivery.
And another published earlier this year in JAMA found that higher-risk, preterm births are more likely in counties without obstetric units. (Some hospitals close obstetric units without closing the entire hospital.)
Ms. Kozhimannil, a co-author of all three studies, said, “What’s left are maternity care deserts in some of the most vulnerable communities, putting pregnant women and their babies at risk.”
Many factors can underlie the financial decision to close a hospital. Rural populations are shrinking, and the trend of hospital mergers and acquisitions can contribute to closures as services are consolidated.
Another factor: Over the long term, we are using less hospital care as more services are shifted to outpatient settings and as inpatient care is performed more rapidly. In 1960, an average appendectomy required over six days in the hospital; today one to two days is the norm.
Part of the story is political: the decision by many red states not to take advantage of federal funding to expand Medicaid as part of the Affordable Care Act. Some states cited fiscal concerns for their decisions, but ideological opposition to Obamacare was another factor.
In rural areas, lower incomes and higher rates of uninsured people contribute to higher levels of uncompensated hospital care — meaning many people are unable to pay their hospital bills. Uncompensated care became less of a problem in hospitals in states that expanded Medicaid.
In a Commonwealth Fund Issue Brief, researchers from Northwestern Kellogg School of Management found that hospitals in Medicaid expansion states saved $6.2 billion in uncompensated care, with the largest reductions in states with the highest proportion of low-income and uninsured patients. Consistent with these findings, the vast majority of recent hospital closings have been in states that have not expanded Medicaid.
Richard Lindrooth, a professor at the University of Colorado School of Public Health, led a study in Health Affairs on the relationship between Medicaid expansion and hospitals’ financial health. Hospitals in nonexpansion states took a financial hit and were far more likely to close. In the continuing battle within some states about whether or not to expand Medicaid, “hospitals’ futures hang in the balance,” he said.
Excerpts are from: https://www.nytimes.com/2018/10/29/upshot/a-sense-of-alarm-as-rural-hospitals-keep-closing.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=6&pgtype=sectionfront
Objecting class members' counsel's petition to U.S. Supreme Court in opposition to "cy pres" remedies; Public Citizen response
The introduction of the Petition follows:
INTRODUCTION
Petitioners, as class members, challenge an $8.5 million class settlement negotiated between class counsel and the defendant that pays the class no money, but instead directs millions to class counsel and funnels the remainder to third parties, including class counsel's alma maters and nonprofits to which the defendant already contributes. This is a clear abuse and must be curtailed.
This Court has long recognized that Rule 23(b)(3) opt-out class actions are an "adventuresome" innova tion fraught with potential conflicts. E.g., Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614, 625-26 (1997). Rule 23 must be "applied with the interests of absent class members in close view." Id. at 629. The Court has consistently rejected the use of proce dural tactics by plaintiffs or defendants to game class actions. E.g., China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018); Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017); Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016); Standard Fire Ins. Co. v. Knowles, 568 U.S. 588 (2013).
Because of conflicts of interest inherent in the class-action process-especially with regard to settlements-careful judicial scrutiny is necessary lest class counsel and the defendant bargain away the rights of the class members on terms that minimize payoff by the defendant, maximize benefit to class counsel, and leave injured class members out in the cold. Yet the Ninth Circuit below took the opposite approach, declaring that close scrutiny of the terms of a cy pres settlement would be "an intrusion into the private parties' negotiations" and therefore "improper and disruptive to the settlement process." Pet. App. 15.
The majority of class actions that survive motions to dismiss are resolved by settlement. As one court has noted, "Inequitable settlements are an unfortunate recurring bug in our system of class litigation." Pearson v. Target Corp., - F.3d -, 2018 WL 3117848, at *1 (7th Cir. Jun. 26, 2018) (Wood, C.J.) ("Pearson II"). In the absence oflegal rules providing proper incentives, the negotiating parties' preferences readily achieved even in the absence of explicit collusion-are to structure a settlement that maximizes the class attorneys' share of the settlement value of the case while minimizing cost to the defendant, all at the expense of absent class members. In re Dry Max Pampers Litig., 724 F.3d 713, 717-18 (6th Cir. 2013) (Kethledge, J.); see generally Howard M. Erichson, Aggregation as Disempowerment: Red Flags in Class Action Settlements, 92 Notre Dame L. Rev. 859, 874-903 (2016) ("Erichson"). Parties structure settlements to hide the economic reality, create the appearance of a larger recovery, and thus support a larger claim for attorneys' fees. This case involves one of the most notorious devices used to create the "illusion of compensation," so-called cy pres recovery. Martin H. Redish et al., Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis, 62 Fla. L. Rev. 617 (2010) ("Redish").
The Ninth Circuit treated the cy pres arrangement here as equivalent to a class settlement paying $8.5 million to class members. In fact they got zero. All the money went to class counsel and to favored non profit organizations affiliated with class counsel and the defendant. It is not fair or reasonable under Rule 23(e) for class attorneys to arrogate millions for themselves and nothing for their clients. In ratifying the district court's approval of this settlement, the Ninth Circuit adopted several holdings that create perverse incentives that encourage both gamesman ship at the expense of absent class members and meritless class actions designed to benefit only attor neys. If this Court affirms the Ninth Circuit's approach, cy pres settlements like this one, previously substantially deterred by other appellate courts' re fusal to endorse them, will become dramatically more common, even supplanting settlements that currently directly pay class members tens of millions of dollars. The Court should reverse the judgment below, thereby making clear that class counsel has a fiduciary duty to class members, and that Rule 23(e) requires courts to align the interests of class counsel with the interests of their clients.
From https://www.supremecourt.gov/DocketPDF/17/17-961/52594/20180709130345481_17-961BriefForPetitioners.pdf
Public Citizen's brief is here:
- Amicus Curiae Brief (09/05/2018) https://www.citizen.org/system/files/case_documents/frank_v_gaos_amicus_curiae.pdf
Following is a Case Description posted by Public Citizen:
The plaintiffs in this case brought a class action against Google for violating users’ privacy by disclosing their Internet search terms to third-party websites. The complaint alleged claims for violation of the Stored Communications Act and several state-law causes of action. The class includes approximately 129 million people. Following mediation, the parties entered into a settlement providing for injunctive relief, an $8.5 million settlement fund, and attorney’s fees. Because distribution to the individual class members was infeasible, the settlement provided for cy pres distribution of the fund to organizations dedicated to protecting Internet privacy. In accordance with federal Rule of Civl Procedure 23(e), the district court then evaluated the settlement to assess whether it was fair, reasonable, and adequate, and held that it was. Two objectors to the settlement appealed and, after losing the appeal, petitioned for Supreme Court review. The Court accepted the case to consider whether distributing the settlement fund as cy pres rather than directly to class members complies with Rule 23(e).
Public Citizen filed an amicus brief in support of the settling parties. The brief explained that, to allow appropriate use of cy pres settlements while preventing their misuse, the federal appellate courts have articulated a consistent set of standards to assess cy pres awards. The courts allow settlements involving cy pres payments when distributions to individual class members are impracticable or when class members to whom distributions are practicable have been fully compensated for their losses. And the courts agree that proposed cy pres awards must be carefully scrutinized to ensure that they adequately benefit class members in ways that have a sufficient relationship to the claims asserted by the class.
In this case, the courts properly applied these broadly accepted standards. The brief also explained that, contrary to the suggestion in the amicus brief of the Solicitor General, Article III neither limits the ability of parties to settle a case nor addresses the form of distribution of compensatory relief.
California Net Neutrality Law Put on Hold Until Federal Lawsuit Is ResolvedBy Ted Johnson
WASHINGTON — California’s net neutrality law, signed last month by Gov. Jerry Brown, will be put on hold until federal litigation over the FCC’s role is resolved.
The state’s attorney general, Xavier Becerra, agreed to pause the implementation of the law, which includes the strongest net neutrality protections of any state measure that has passed recently. The same day that Brown signed the law, the Justice Department sued to stop it, arguing that only the federal government can regulate interstate commerce.
California’s passage of the law was in response to the FCC’s decision late last year to repeal many of the net neutrality rules it had in place, including ones that ban internet providers from blocking or throttling traffic, or engaging in paid privatization.
After that action, a number of public interest groups and state attorneys general sued to challenge the FCC’s action, including a provision to preempt any state-level attempts to implement their own net neutrality rules. Oral arguments in the D.C. Circuit Court of Appeals case are scheduled for Feb. 1.
FCC chairman Ajit Pai called California’s agreement to pause its law a “substantial concession” that “reflects the strength of the case made by the United States earlier this month. It also demonstrates, contrary to the claims of the law’s supporters, that there is no urgent problem that these regulations are needed to address.”
State Sen. Scott Wiener, who authored California’s law, said, “of course, I very much want to see California’s net neutrality law go into effect immediately, in order to protect access to the internet. Yet I also understand and support the Attorney General’s rationale for allowing the DC circuit appeal to be resolved before we move forward to defend our net neutrality law in court.”
California’s law was due to go into effect on Jan. 1.
From: https://variety.com/2018/politics/politics/california-net-neutrality-law-on-hold-1202999031/
WASHINGTON — California’s net neutrality law, signed last month by Gov. Jerry Brown, will be put on hold until federal litigation over the FCC’s role is resolved.
The state’s attorney general, Xavier Becerra, agreed to pause the implementation of the law, which includes the strongest net neutrality protections of any state measure that has passed recently. The same day that Brown signed the law, the Justice Department sued to stop it, arguing that only the federal government can regulate interstate commerce.
California’s passage of the law was in response to the FCC’s decision late last year to repeal many of the net neutrality rules it had in place, including ones that ban internet providers from blocking or throttling traffic, or engaging in paid privatization.
After that action, a number of public interest groups and state attorneys general sued to challenge the FCC’s action, including a provision to preempt any state-level attempts to implement their own net neutrality rules. Oral arguments in the D.C. Circuit Court of Appeals case are scheduled for Feb. 1.
FCC chairman Ajit Pai called California’s agreement to pause its law a “substantial concession” that “reflects the strength of the case made by the United States earlier this month. It also demonstrates, contrary to the claims of the law’s supporters, that there is no urgent problem that these regulations are needed to address.”
State Sen. Scott Wiener, who authored California’s law, said, “of course, I very much want to see California’s net neutrality law go into effect immediately, in order to protect access to the internet. Yet I also understand and support the Attorney General’s rationale for allowing the DC circuit appeal to be resolved before we move forward to defend our net neutrality law in court.”
California’s law was due to go into effect on Jan. 1.
From: https://variety.com/2018/politics/politics/california-net-neutrality-law-on-hold-1202999031/
NYT: Service providers drop Gab
Pittsburgh shooter Bowers’s affiliation with Gab has already cost the company dearly. On Saturday, the company’s web hosting provider, Joyent, said it would stop hosting the site, according to an email posted by Gab on Twitter. Gab’s website went offline Sunday night and was replaced with a statement saying that its service would be temporarily inaccessible while it switched to a new hosting provider.
In addition, GoDaddy, the domain name provider, told Gab it had 24 hours to move its domain name to another service, after finding content on the site that promoted violence.
The payment processing platform Stripe, which Gab has used to receive fees for its paid Gab Pro membership level, and which froze Gab’s account this month for violating its terms of service, said it was suspending transfers to the company’s bank account pending an investigation, according to another email posted to Twitter by Gab. PayPal, another payment processor, canceled Gab’s account, saying it had been closely monitoring the site even before Saturday’s massacre.
Source: https://www.nytimes.com/2018/10/28/us/gab-robert-bowers-pittsburgh-synagogue-shootings.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Pittsburgh shooter Bowers’s affiliation with Gab has already cost the company dearly. On Saturday, the company’s web hosting provider, Joyent, said it would stop hosting the site, according to an email posted by Gab on Twitter. Gab’s website went offline Sunday night and was replaced with a statement saying that its service would be temporarily inaccessible while it switched to a new hosting provider.
In addition, GoDaddy, the domain name provider, told Gab it had 24 hours to move its domain name to another service, after finding content on the site that promoted violence.
The payment processing platform Stripe, which Gab has used to receive fees for its paid Gab Pro membership level, and which froze Gab’s account this month for violating its terms of service, said it was suspending transfers to the company’s bank account pending an investigation, according to another email posted to Twitter by Gab. PayPal, another payment processor, canceled Gab’s account, saying it had been closely monitoring the site even before Saturday’s massacre.
Source: https://www.nytimes.com/2018/10/28/us/gab-robert-bowers-pittsburgh-synagogue-shootings.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Kavanaugh, Gorsuch, and Thomas v FDR New Deal style regulation?
The early phase of the Congressional hearings for Justice Kavanaugh involved some focus on his views about the power of administrative agencies. Democratic Senators in particular worried that Kavanaugh's judicial opinions were restrictive of the power of administrative agencies that carry out various government regulatory functions. Op-ed writer Eric Posner shares that concern, worrying that a conservative U.S. Supreme Court could bring us back to the kind of judicial thinking that prevailed prior to the FDR New Deal.
We recall that antipathy to regulations intended to protect workers and consumers dates back to at least 1905. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
But Eric Posner is worried that a new Lochner era may soon be upon us. Following is an excerpt from his Op-Ed. DAR
The conservative assault on the administrative state has four elements.
First, Justices Gorsuch and Thomas want to revive a discredited legal rule that was invoked by the Supreme Court in 1935 and then abandoned. The “nondelegation doctrine” says that Congress may not “delegate” its legislative power to administrative agencies — in other words, authorize agencies to make policy through regulation. That doctrine is at issue again in the Gundy case, where the challengers argue that Congress gave the attorney general too much discretion to set the rules for sex offenders.
Second, Justices Gorsuch, Kavanaugh and Thomas want to undermine a rule called the Chevron doctrine, after a 1984 Supreme Court case. That rule says that when an agency regulation is based on a reasonable interpretation of a statute, courts should “defer” to the agency. The Chevron rule codified existing judicial recognition of the core idea of the administrative state. Specialists — in environmental hazards, in credit markets, in workplace safety — should regulate. Generalist judges, who end up disagreeing with one another and causing administrative confusion, should keep their hands off. The Chevron doctrine is at issue in the Nielsen case, where the challengers have urged the court not to defer to the government’s interpretation of the immigration statute.
Third, the conservative justices dislike the principle of agency autonomy and have looked askance at job protections for agency officials.
Fourth, the conservative justices have endorsed a novel interpretation of the First Amendment that protects businesses from regulation — from campaign finance regulation, labor regulation and even regulations that require them to disclose information to consumers.
What is the basis for this radical change in the law? Justices Kavanaugh, Gorsuch and Thomas claim to be “originalists,” who believe that the court should strike down laws that violate the original understanding of the Constitution. But the founders did not bar Congress from creating administrative agencies or think that the First Amendment protected businesses from commercial regulation.
Many liberals think that the conservative justices are cat’s paws of business. But their claims to the contrary, businesses do not oppose regulation. Businesses constantly beseech the agencies to regulate — not themselves, but the other businesses that they compete with or depend on, and are harmed by. The new conservative jurisprudence may help some businesses in the short run but ultimately will undermine the legal structure in which they flourish.
The answer is both obvious and depressing. The modern conservative jurisprudence is an exercise in nostalgia, a yearning for pre-New Deal America when, supposedly, government was less oppressive and people were freer than they are today. You can see this nostalgia in the homilies to olden times in Justices Gorsuch’s and Kavanaugh’s lectures — and their insistence that answers to today’s challenges can be found in a theory of government invented in the 18th century by men wearing breeches and powdered wigs.
https://www.nytimes.com/2018/10/23/opinion/supreme-court-brett-kavanaugh-trump-.html?action=click&module=Opinion&pgtype=Homepage
The early phase of the Congressional hearings for Justice Kavanaugh involved some focus on his views about the power of administrative agencies. Democratic Senators in particular worried that Kavanaugh's judicial opinions were restrictive of the power of administrative agencies that carry out various government regulatory functions. Op-ed writer Eric Posner shares that concern, worrying that a conservative U.S. Supreme Court could bring us back to the kind of judicial thinking that prevailed prior to the FDR New Deal.
We recall that antipathy to regulations intended to protect workers and consumers dates back to at least 1905. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
But Eric Posner is worried that a new Lochner era may soon be upon us. Following is an excerpt from his Op-Ed. DAR
The conservative assault on the administrative state has four elements.
First, Justices Gorsuch and Thomas want to revive a discredited legal rule that was invoked by the Supreme Court in 1935 and then abandoned. The “nondelegation doctrine” says that Congress may not “delegate” its legislative power to administrative agencies — in other words, authorize agencies to make policy through regulation. That doctrine is at issue again in the Gundy case, where the challengers argue that Congress gave the attorney general too much discretion to set the rules for sex offenders.
Second, Justices Gorsuch, Kavanaugh and Thomas want to undermine a rule called the Chevron doctrine, after a 1984 Supreme Court case. That rule says that when an agency regulation is based on a reasonable interpretation of a statute, courts should “defer” to the agency. The Chevron rule codified existing judicial recognition of the core idea of the administrative state. Specialists — in environmental hazards, in credit markets, in workplace safety — should regulate. Generalist judges, who end up disagreeing with one another and causing administrative confusion, should keep their hands off. The Chevron doctrine is at issue in the Nielsen case, where the challengers have urged the court not to defer to the government’s interpretation of the immigration statute.
Third, the conservative justices dislike the principle of agency autonomy and have looked askance at job protections for agency officials.
Fourth, the conservative justices have endorsed a novel interpretation of the First Amendment that protects businesses from regulation — from campaign finance regulation, labor regulation and even regulations that require them to disclose information to consumers.
What is the basis for this radical change in the law? Justices Kavanaugh, Gorsuch and Thomas claim to be “originalists,” who believe that the court should strike down laws that violate the original understanding of the Constitution. But the founders did not bar Congress from creating administrative agencies or think that the First Amendment protected businesses from commercial regulation.
Many liberals think that the conservative justices are cat’s paws of business. But their claims to the contrary, businesses do not oppose regulation. Businesses constantly beseech the agencies to regulate — not themselves, but the other businesses that they compete with or depend on, and are harmed by. The new conservative jurisprudence may help some businesses in the short run but ultimately will undermine the legal structure in which they flourish.
The answer is both obvious and depressing. The modern conservative jurisprudence is an exercise in nostalgia, a yearning for pre-New Deal America when, supposedly, government was less oppressive and people were freer than they are today. You can see this nostalgia in the homilies to olden times in Justices Gorsuch’s and Kavanaugh’s lectures — and their insistence that answers to today’s challenges can be found in a theory of government invented in the 18th century by men wearing breeches and powdered wigs.
https://www.nytimes.com/2018/10/23/opinion/supreme-court-brett-kavanaugh-trump-.html?action=click&module=Opinion&pgtype=Homepage
From Public Citizen
Sant'Ambrogio: Federal government filed only eight consumer protection cases in federal court in a recent year (click title for Public Citizen website)
Posted: 27 Oct 2018 09:58 AM PDT
by Jeff Sovern
According to Private Enforcement in Administrative Courts, 72 Vanderbilt Law Review, (Forthcoming), [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3246738] by Michael Sant'Ambrogio of Michigan State, in the year ending March 31, 2017, the government filed only eight consumer protection cases in federal court, which contrasts with the 9,706 cases filed by private plaintiffs. Sometimes we see the argument that we don't need private enforcement of consumer laws because public enforcement is sufficient. If the numbers Sant'Ambrogio reports are accurate, they make that claim harder to make; indeed, they make it ludicrous. To be sure, many government cases are resolved short of filing in federal court, some government cases are resolved in internal administrative proceedings, and state agencies--especially AG's offices--also file consumer protection cases, but those categories are unlikely to come close to solving underenforcement problems.
Opinion: Patent Thickets Blocks More Affordable Drugs: The Case of Humira
October 23, 2018
From: https://www.thecppc.com/single-post/2018/10/23/How-Patent-Thickets-Blocks-More-Affordable-Drugs-The-Case-of-Humira?utm_campaign=06332353-a8ee-4aba-b739-ad057a76f56a&utm_source=so
The drug manufacturer AbbieVie Inc. has thrown up a formidable shield of patents around its drug Humira, preventing cheaper versions of the medicine from coming to market. This patent abuse should not be allowed to stand, and Congress, the Department of Health and Human Services, and the Food and Drug Administration should stop this manipulation and enact reforms to combat further abuses.
Humira has been around for over fifteen years and is one of the world's best selling drugs, with over $18 billion in global sales. It is used to treat inflammatory diseases-everything from rheumatoid arthritis to gut disorders-and it is extremely expensive, with a list price of over $50,000 per patient. Humira is also a biologic medicine, meaning it is made from living cells in a process similar to brewing. It accounts for over 60% of AbbieVie's revenue.
The main patent for Humira (which gives the drug manufacturer a monopoly on the drug) expired in 2016, so you would think that consumers could now benefit from biosimilars (cheaper versions of this medicine analogous to generic drugs). But AbbieVie has obtained over one hundred additional patents for Humira, an incredibly number for a single drug, and these patents extend into the 2020s and 2030s. They have 22 patents for various treatments, 14 patents for the drug's formulation, 24 patents on its manufacturing practices, and 15 other patents. Moreover, the company has filed suit to block two biosimilar versions approved by the FDA.
This is a prime example of what FDA Commissioner Scott Gottlieb criticized as "patent thickets" that block biosimilars and generic drugs and thwart competition, making consumers pay much higher prices. The biosimilar versions of Humira would sell at a 10% to 25% discount, which could help a lot of people struggling to afford their medicines.
As a result, AbbieVie still has a monopoly on Humira, and its price has risen to over $60,000 annually for some patients, and that earns over $12 billion in sales in the United States. And they are not the only company doing this. The drug company Johnson & Johnson has also created a thicket of over 100 patents around the anti-inflammatory drug Remicade to block cheaper generic drugs and increase its profits. Evidence shows that patent abuse, where companies file many different patents and make small changes to drugs to extend their exclusivity, is a serious and growing problem.
In Europe, where the legal environment is more friendly to patent challenges, over 20 biosimilar drugs have been approved since 2006, with immense benefits for patients. In the United States, these "patent thickets" have choked off much of the market, and only five versions are available.
One way to reduce patent abuse would be to pass the CREATES Act, a bipartisan bill that would make it easier for medicines whose patents have expired to be sold as cheaper generic versions. It allows generic drug companies to sue patented drug companies to compel them to provide samples they need to make these cheaper versions.
Patents should be used to reward substantive research and real innovation, not to maintain a monopoly and force consumers to pay skyrocketing prices.
October 23, 2018
From: https://www.thecppc.com/single-post/2018/10/23/How-Patent-Thickets-Blocks-More-Affordable-Drugs-The-Case-of-Humira?utm_campaign=06332353-a8ee-4aba-b739-ad057a76f56a&utm_source=so
The drug manufacturer AbbieVie Inc. has thrown up a formidable shield of patents around its drug Humira, preventing cheaper versions of the medicine from coming to market. This patent abuse should not be allowed to stand, and Congress, the Department of Health and Human Services, and the Food and Drug Administration should stop this manipulation and enact reforms to combat further abuses.
Humira has been around for over fifteen years and is one of the world's best selling drugs, with over $18 billion in global sales. It is used to treat inflammatory diseases-everything from rheumatoid arthritis to gut disorders-and it is extremely expensive, with a list price of over $50,000 per patient. Humira is also a biologic medicine, meaning it is made from living cells in a process similar to brewing. It accounts for over 60% of AbbieVie's revenue.
The main patent for Humira (which gives the drug manufacturer a monopoly on the drug) expired in 2016, so you would think that consumers could now benefit from biosimilars (cheaper versions of this medicine analogous to generic drugs). But AbbieVie has obtained over one hundred additional patents for Humira, an incredibly number for a single drug, and these patents extend into the 2020s and 2030s. They have 22 patents for various treatments, 14 patents for the drug's formulation, 24 patents on its manufacturing practices, and 15 other patents. Moreover, the company has filed suit to block two biosimilar versions approved by the FDA.
This is a prime example of what FDA Commissioner Scott Gottlieb criticized as "patent thickets" that block biosimilars and generic drugs and thwart competition, making consumers pay much higher prices. The biosimilar versions of Humira would sell at a 10% to 25% discount, which could help a lot of people struggling to afford their medicines.
As a result, AbbieVie still has a monopoly on Humira, and its price has risen to over $60,000 annually for some patients, and that earns over $12 billion in sales in the United States. And they are not the only company doing this. The drug company Johnson & Johnson has also created a thicket of over 100 patents around the anti-inflammatory drug Remicade to block cheaper generic drugs and increase its profits. Evidence shows that patent abuse, where companies file many different patents and make small changes to drugs to extend their exclusivity, is a serious and growing problem.
In Europe, where the legal environment is more friendly to patent challenges, over 20 biosimilar drugs have been approved since 2006, with immense benefits for patients. In the United States, these "patent thickets" have choked off much of the market, and only five versions are available.
One way to reduce patent abuse would be to pass the CREATES Act, a bipartisan bill that would make it easier for medicines whose patents have expired to be sold as cheaper generic versions. It allows generic drug companies to sue patented drug companies to compel them to provide samples they need to make these cheaper versions.
Patents should be used to reward substantive research and real innovation, not to maintain a monopoly and force consumers to pay skyrocketing prices.
From The ABA
DoNotPay app aims to help users sue anyone in small claims court--without a lawyer
By Jason Tashea
A new update to an existing chatbot app promises to allow users to "sue anyone in small claims court for up to $25,000 without the help of a lawyer," though early users warn of technical bugs and legal and ethical concerns.
Launched Wednesday, new updates to DoNotPay, a company that first made a splash by automating challenges to parking tickets in court without an attorney, will allow a user to sue anyone in small claims court in any county in all 50 states—without the need for retaining a lawyer. Previously only a web tool, the new product is also available for iPhone and will also include new features allowing users to find deals on prescription and over-the-counter drugs; make an appointment at the California Department of Motor Vehicles; and see if they are eligible to opt-in to various class-action settlements. The app also aims to fight unfair bank fees; earn refunds from ride-hailing companies; fix errors in a credit report; and dispute bank transactions.
An Android version is in the works.
“I want people to be addicted to fighting for their rights,” says Josh Browder, CEO of DoNotPay, who hopes his revamped app will be a one-stop shop for consumer protection issues.
The idea for the new app was born out of a project the company released last year, which helped people sue Equifax for up to $25,000 after the credit company’s 2017 data breach affecting 143 million people.
“Although lots of lawyers said it wasn’t possible,” said Browder in a statement reported by Yahoo Finance, “I was shocked when people won $9,000, $10,000 and $11,000 judgments. Even when Equifax appealed, the average person still prevailed.”
The new small claims suit feature, which Browder demoed at the Clio Cloud Conference last week in New Orleans, asks a user for their name and address and what the claim size is to determine whether it complies with a state’s limit, among other factors. It then generates a demand letter, creates a filing, helps serve notice of the suit and provides other support to usher users through the trial process. The app even generates suggested scripts and questions pro se litigants can use when they go to court. Parties are often not represented by an attorney in a small claim proceeding because it is either not permitted by law or because the amount in controversy is too low to justify the cost of an attorney.
Browder says the new application has three goals: Getting users what’s owed, fighting corporations and fighting bureaucracy.
Not just a small claims app, DoNotPay acquired Visabot to assist in the application of green cards and other visa applications. Previously, Visabot charged for many of its services (a green card application was $150, for example). All features on DoNotPay, including immigration, are free to users.
This isn’t to say that the new app won’t make money. While the revenue model is still a work in progress, Browder sees a future where after helping someone challenge a cellphone bill, they offer deals to switch carriers and take a commission based on conversions. While the app will require extensive user data to function, Browder says the venture-backed DoNotPay will not store or sell user data.
Of course, many of these features raise the specter of the unlicensed practice of law, a criminal offense in California, where Browder is based.
For his part, Browder is “a bit worried” about potential challenges. However, he believes that he can avoid some of these issues since his product is free to users. Further, he argues that the app is a free speech issue because its underlying code is speech. Code has been found to be speech on issues as broad as publishing encryption source code to the sharing of digital blueprints of 3-D printed guns.
“If you can 3-D print a gun,” he says, “you should be able to print a few documents.”
The legal profession is only one possible group to take issue with the new tool—the other are the users themselves. While the automated process was set up with the assistance of lawyers and paralegals, there’s no lawyer oversight of the app’s final products.
Asked how users should manage their dissatisfaction towards the product, Browder says it’s easy. “They can sue us with the app.”
In the day after the app’s release, several Twitter users took issue with technical and legal aspects of the tool. Nicole Bradick, a 2012 ABA Journal Legal Rebel, noted that the tool did not work properly. Gabriel Teninbaum, director of Suffolk University Law School’s Institute on Legal Innovation & Technology in Boston, said that he was given bad, inaccurate advice on Massachusetts law. Chase Hertel, counsel and deputy director for the ABA Center for Innovation, expressed concerns that the immigration feature did not fully inform people of various ongoing and evolving issues.
For his part, Browder says DoNotPay has pushed numerous updates to handle some of the technical issues.
Regarding the immigration feature, Browder defends it as the same tool it was before acquisition, which had “extremely positive reviews.” He adds that “we not only plan to maintain it, but also expand it.”
“While I can understand the skepticism of the legal establishment, I worked with public defenders in [Massachusetts] in detail to ensure it’s accurate,” says Browder over email regarding criticisms coming from Massachusetts. “Accuracy is an objective term and not opinion. Unless they can point to a precise and specific contradiction between the demand letter [DoNotPay] provides and [Massachusetts] law, it is false and defamatory to suggest it’s inaccurate.”
Updated on Oct. 11 after the app’s launch to add details about the issues users were reporting and Browder’s response.
Source: http://www.abajournal.com/news/article/file_a_smalls_claims_suit_anywhere_in_the_country_through_an_app
DoNotPay app aims to help users sue anyone in small claims court--without a lawyer
By Jason Tashea
A new update to an existing chatbot app promises to allow users to "sue anyone in small claims court for up to $25,000 without the help of a lawyer," though early users warn of technical bugs and legal and ethical concerns.
Launched Wednesday, new updates to DoNotPay, a company that first made a splash by automating challenges to parking tickets in court without an attorney, will allow a user to sue anyone in small claims court in any county in all 50 states—without the need for retaining a lawyer. Previously only a web tool, the new product is also available for iPhone and will also include new features allowing users to find deals on prescription and over-the-counter drugs; make an appointment at the California Department of Motor Vehicles; and see if they are eligible to opt-in to various class-action settlements. The app also aims to fight unfair bank fees; earn refunds from ride-hailing companies; fix errors in a credit report; and dispute bank transactions.
An Android version is in the works.
“I want people to be addicted to fighting for their rights,” says Josh Browder, CEO of DoNotPay, who hopes his revamped app will be a one-stop shop for consumer protection issues.
The idea for the new app was born out of a project the company released last year, which helped people sue Equifax for up to $25,000 after the credit company’s 2017 data breach affecting 143 million people.
“Although lots of lawyers said it wasn’t possible,” said Browder in a statement reported by Yahoo Finance, “I was shocked when people won $9,000, $10,000 and $11,000 judgments. Even when Equifax appealed, the average person still prevailed.”
The new small claims suit feature, which Browder demoed at the Clio Cloud Conference last week in New Orleans, asks a user for their name and address and what the claim size is to determine whether it complies with a state’s limit, among other factors. It then generates a demand letter, creates a filing, helps serve notice of the suit and provides other support to usher users through the trial process. The app even generates suggested scripts and questions pro se litigants can use when they go to court. Parties are often not represented by an attorney in a small claim proceeding because it is either not permitted by law or because the amount in controversy is too low to justify the cost of an attorney.
Browder says the new application has three goals: Getting users what’s owed, fighting corporations and fighting bureaucracy.
Not just a small claims app, DoNotPay acquired Visabot to assist in the application of green cards and other visa applications. Previously, Visabot charged for many of its services (a green card application was $150, for example). All features on DoNotPay, including immigration, are free to users.
This isn’t to say that the new app won’t make money. While the revenue model is still a work in progress, Browder sees a future where after helping someone challenge a cellphone bill, they offer deals to switch carriers and take a commission based on conversions. While the app will require extensive user data to function, Browder says the venture-backed DoNotPay will not store or sell user data.
Of course, many of these features raise the specter of the unlicensed practice of law, a criminal offense in California, where Browder is based.
For his part, Browder is “a bit worried” about potential challenges. However, he believes that he can avoid some of these issues since his product is free to users. Further, he argues that the app is a free speech issue because its underlying code is speech. Code has been found to be speech on issues as broad as publishing encryption source code to the sharing of digital blueprints of 3-D printed guns.
“If you can 3-D print a gun,” he says, “you should be able to print a few documents.”
The legal profession is only one possible group to take issue with the new tool—the other are the users themselves. While the automated process was set up with the assistance of lawyers and paralegals, there’s no lawyer oversight of the app’s final products.
Asked how users should manage their dissatisfaction towards the product, Browder says it’s easy. “They can sue us with the app.”
In the day after the app’s release, several Twitter users took issue with technical and legal aspects of the tool. Nicole Bradick, a 2012 ABA Journal Legal Rebel, noted that the tool did not work properly. Gabriel Teninbaum, director of Suffolk University Law School’s Institute on Legal Innovation & Technology in Boston, said that he was given bad, inaccurate advice on Massachusetts law. Chase Hertel, counsel and deputy director for the ABA Center for Innovation, expressed concerns that the immigration feature did not fully inform people of various ongoing and evolving issues.
For his part, Browder says DoNotPay has pushed numerous updates to handle some of the technical issues.
Regarding the immigration feature, Browder defends it as the same tool it was before acquisition, which had “extremely positive reviews.” He adds that “we not only plan to maintain it, but also expand it.”
“While I can understand the skepticism of the legal establishment, I worked with public defenders in [Massachusetts] in detail to ensure it’s accurate,” says Browder over email regarding criticisms coming from Massachusetts. “Accuracy is an objective term and not opinion. Unless they can point to a precise and specific contradiction between the demand letter [DoNotPay] provides and [Massachusetts] law, it is false and defamatory to suggest it’s inaccurate.”
Updated on Oct. 11 after the app’s launch to add details about the issues users were reporting and Browder’s response.
Source: http://www.abajournal.com/news/article/file_a_smalls_claims_suit_anywhere_in_the_country_through_an_app
Restaurants, food allergies, and the law
For some, food allergies can mean that a take-out restaurant meal is a killer. Web-MD advises that people with serious food allergies should pick large corporate restaurants that are systematic about choosing food ingredients and providing information to customers. Small mom-and-pop operations have legal responsibilities to be careful, but are less likely to be systematic about knowing their ingredients and communicating with vulnerable customers. A recent prosecution for criminal negligence in the UK illustrates the problem. Owners of a small Indian-food carry out were convicted of criminally negligent manslaughter after the tragic death of a 15 year old customer with a serious peanut allergy.
Sources:
https://www.webmd.com/allergies/features/food-allergies-tips-for-eating-out#4
https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.itv.com%2Fnews%2F2018-10-26%2Ftakeaway-bosses-guilty-of-manslaughter-by-gross-negligence-after-nut-allergy-death-of-15-year-old-megan-lee%2F&data=02%7C01%7C%7C589861fef4f44c85de5f08d63cc610ce%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636763218705484378&sdata=oFXNuFG8U9aqiobR8Ct7g3yBRBaUfnTu1ZJVL8n90Hk%3D&reserved=0
Posted by Don Allen Resnikoff
For some, food allergies can mean that a take-out restaurant meal is a killer. Web-MD advises that people with serious food allergies should pick large corporate restaurants that are systematic about choosing food ingredients and providing information to customers. Small mom-and-pop operations have legal responsibilities to be careful, but are less likely to be systematic about knowing their ingredients and communicating with vulnerable customers. A recent prosecution for criminal negligence in the UK illustrates the problem. Owners of a small Indian-food carry out were convicted of criminally negligent manslaughter after the tragic death of a 15 year old customer with a serious peanut allergy.
Sources:
https://www.webmd.com/allergies/features/food-allergies-tips-for-eating-out#4
https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.itv.com%2Fnews%2F2018-10-26%2Ftakeaway-bosses-guilty-of-manslaughter-by-gross-negligence-after-nut-allergy-death-of-15-year-old-megan-lee%2F&data=02%7C01%7C%7C589861fef4f44c85de5f08d63cc610ce%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636763218705484378&sdata=oFXNuFG8U9aqiobR8Ct7g3yBRBaUfnTu1ZJVL8n90Hk%3D&reserved=0
Posted by Don Allen Resnikoff
David Boies, attorney for Elizabeth Holmes and her company Theranos: information on aggressive lawyering that you won’t learn in a law school
In his book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf), Wall Street Journal reporter John Carreyrou reviews his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
In his book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf), Wall Street Journal reporter John Carreyrou reviews his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
Theodore Frank, professional class action settlement objector
On October 31, attorney Theodore Frank will argue his own case before the U.S. Supreme Court. The case concerns objection by Mr. Frank and the non-profit he heads, Center for Class Action Fairness, to a class action settlement involving Google as Defendant.
The Google class action settlement is one of many class action settlements Mr. Frank has objected to. Objecting to class action settlements is Mr. Frank’s profession.
Mr. Frank’s Google class action settlement case arises from an $8.5 million settlement between Google and class action lawyers. The class action complaint says that Google violated users’ privacy rights.
Under the settlement, the lawyers are to be paid more than $2 million, but members of the class they represented get nothing. Instead Google agreed to make contributions to institutions concerned with privacy on the internet, including centers at Harvard, Stanford and Chicago-Kent College of Law.
A divided three-judge panel of the United States Court of Appeals for the Ninth Circuit, in San Francisco, upheld the settlement. The opinion can be found at http://www.scotusblog.com/wp-content/uploads/2018/04/17-961-opinion-below.pdf In dissent, Judge J.Clifford Wallace expressed concerns about the payments.
Google’s position is that while class action settlements can be bad, the particular settlement is good. The Google brief on the Writ of Certiorari to the Supreme Court is at https://www.supremecourt.gov/DocketPDF/17/17-961/61166/20180829194522714_17-961%20bs.pdf
The story of Mr. Frank as objector to the Google settlement draws attention to the role that professional class action settlement objectors play as class action spoilers. Not surprisingly, there are those who are highly critical of the objectors’ spoiler role, and others who see at least some objectors as a force for good, limiting class actions that lack social value.
Commenters have observed that there is a cottage industry of professional objectors: attorneys who earn a livelihood by opposing settlements on behalf of unnamed class members. Professional objectors may threaten to file meritless appeals of final judgments merely to extract a payoff. Class attorneys have a strong incentive to pay objectors to withdraw their appeal to avoid the cost of delay.
Professional objectors are widely unpopular, “perhaps the least popular parties in the history of civil procedure,” according to one observer. A judge has observed that “[f]ederal courts are increasingly weary of professional objectors.”
Theodore Frank’s legal practice is unusual in that he and the non-profit he heads do not take payments from Plaintiffs’ counsel. A Bloomberg-BNA article explains that he does not accept “green mail,” a name for payments demanded by, and made to, an objector to drop an objection to a settlement.
“That’s always been the position of the Center for Class Action Fairness,” Frank said to Bloomberg-BNA about his organization. “Not only is that the position, but we’re looking for opportunities for courts to order divestments of green mail payments.”
“We lose money on every objection,” Frank told Bloomberg BNA. “If we weren’t doing it as a non-profit, we couldn’t do it. And if we didn’t have generous donors, and attorneys taking 50-, 60- and 70-percent pay cuts, we couldn’t do what we do.”
The bottom line point is that there can be great value in legitimate and well grounded objections to class action settlements made in good faith. It polices the settlement process. The policy challenge is to allow such beneficial objections while suppressing extortionate green mail objections made in bad faith.
Credits: Much of the content of this comment is drawn from The New York Times story at https://www.nytimes.com/2018/10/15/us/politics/theodore-frank-supreme-court.html Also, the article by Lopatka-Smith, which is at https://judicialstudies.duke.edu/sites/default/files/centers/judicialstudies/class-action_objectors_0.pdf Also, The Bloomberg-BNA article at https://www.bna.com/ted-frank-lightning-n57982069046/
This comment is posted by Don Allen Resnikoff, who takes full responsibility for its content
On October 31, attorney Theodore Frank will argue his own case before the U.S. Supreme Court. The case concerns objection by Mr. Frank and the non-profit he heads, Center for Class Action Fairness, to a class action settlement involving Google as Defendant.
The Google class action settlement is one of many class action settlements Mr. Frank has objected to. Objecting to class action settlements is Mr. Frank’s profession.
Mr. Frank’s Google class action settlement case arises from an $8.5 million settlement between Google and class action lawyers. The class action complaint says that Google violated users’ privacy rights.
Under the settlement, the lawyers are to be paid more than $2 million, but members of the class they represented get nothing. Instead Google agreed to make contributions to institutions concerned with privacy on the internet, including centers at Harvard, Stanford and Chicago-Kent College of Law.
A divided three-judge panel of the United States Court of Appeals for the Ninth Circuit, in San Francisco, upheld the settlement. The opinion can be found at http://www.scotusblog.com/wp-content/uploads/2018/04/17-961-opinion-below.pdf In dissent, Judge J.Clifford Wallace expressed concerns about the payments.
Google’s position is that while class action settlements can be bad, the particular settlement is good. The Google brief on the Writ of Certiorari to the Supreme Court is at https://www.supremecourt.gov/DocketPDF/17/17-961/61166/20180829194522714_17-961%20bs.pdf
The story of Mr. Frank as objector to the Google settlement draws attention to the role that professional class action settlement objectors play as class action spoilers. Not surprisingly, there are those who are highly critical of the objectors’ spoiler role, and others who see at least some objectors as a force for good, limiting class actions that lack social value.
Commenters have observed that there is a cottage industry of professional objectors: attorneys who earn a livelihood by opposing settlements on behalf of unnamed class members. Professional objectors may threaten to file meritless appeals of final judgments merely to extract a payoff. Class attorneys have a strong incentive to pay objectors to withdraw their appeal to avoid the cost of delay.
Professional objectors are widely unpopular, “perhaps the least popular parties in the history of civil procedure,” according to one observer. A judge has observed that “[f]ederal courts are increasingly weary of professional objectors.”
Theodore Frank’s legal practice is unusual in that he and the non-profit he heads do not take payments from Plaintiffs’ counsel. A Bloomberg-BNA article explains that he does not accept “green mail,” a name for payments demanded by, and made to, an objector to drop an objection to a settlement.
“That’s always been the position of the Center for Class Action Fairness,” Frank said to Bloomberg-BNA about his organization. “Not only is that the position, but we’re looking for opportunities for courts to order divestments of green mail payments.”
“We lose money on every objection,” Frank told Bloomberg BNA. “If we weren’t doing it as a non-profit, we couldn’t do it. And if we didn’t have generous donors, and attorneys taking 50-, 60- and 70-percent pay cuts, we couldn’t do what we do.”
The bottom line point is that there can be great value in legitimate and well grounded objections to class action settlements made in good faith. It polices the settlement process. The policy challenge is to allow such beneficial objections while suppressing extortionate green mail objections made in bad faith.
Credits: Much of the content of this comment is drawn from The New York Times story at https://www.nytimes.com/2018/10/15/us/politics/theodore-frank-supreme-court.html Also, the article by Lopatka-Smith, which is at https://judicialstudies.duke.edu/sites/default/files/centers/judicialstudies/class-action_objectors_0.pdf Also, The Bloomberg-BNA article at https://www.bna.com/ted-frank-lightning-n57982069046/
This comment is posted by Don Allen Resnikoff, who takes full responsibility for its content
An Interview with Diana Moss (American Antitrust Institute)
by Jon Baker (American University)
Ahead of the inaugural conference on Challenges to Antitrust in a Changing Economy, at Harvard Law School on November 9th, CPI reached out to Jon Baker (Professor, American University) and Diana Moss (President, American Antitrust Institute). They will participate in “The Consumer Welfare Standard” panel, together with Rob Atkinson (President, Information Technology and Innovation Foundation), Renata Hesse (Partner, Sullivan & Cromwell), and Einer Elhauge (Professor, Harvard Law School).
In this exclusive interview, Diana Moss has responded to three questions asked by Professor Baker on the consumer welfare standard and its current application in US antitrust law.
This conference is co-organized by CPI and CCIA. To see the full program and register free, please click here.
Following is Q and A # 1. For the other 2, see
https://www.competitionpolicyinternational.com/cpi-talks-on-the-consumer-welfare-standard/?utm_source=CPI+Subscribers&utm_campaign=b47147cbd9-EMAIL_CAMPAIGN_2018_10_20_07_01&utm_medium=email&utm_term=0_0ea61134a5-b47147cbd9-236508653
Some progressives say that antitrust rules pay insufficient attention to harms to suppliers, including workers; harms along competitive dimensions other than price and output, such as quality or innovation; and the ways that the exercise of market power may undermine non-economic values, as by creating anti-democratic political pressures or limiting the opportunity of small businesses to compete. To what extent are these concerns justified?
Today’s debate over the role of antitrust has generated a lot of blue sky thinking about the state of U.S. antitrust. I think of this debate as a very different process from that of crafting constructive reform proposals. Actual reform requires knowledge of how the laws and standard have been and can be applied by enforcers and the courts. For example, we know that the consumer welfare standard can address the price and non-price dimensions (e.g., quality and innovation) of competition. The standard also reaches to the harms resulting from the exercise of market power anywhere along the supply chain (e.g., consumers and workers). The control of economic power serves to limit barriers to entry and exclusionary conduct that targets smaller innovative rivals and in stemming the growth of political power.
In sum, if enforcers and courts used the full scope of the law and standard, antitrust would today be more effective in defending and promoting our markets. The reality has been different, namely, a narrow interpretation of the consumer welfare standard under the conservative ideology has held sway for decades. In response to this, some proposals advocate for wholesale reforms that would essentially do away with any standard. This risks reforms that divert the antitrust laws to purposes for which they are not designed and could exacerbate the current state of under-enforcement.
As a progressive (as I will articulate more in my panel remarks), I think of constructive reform as including a more nuanced approach through a package of complementary proposals. These include: (1) legislative clarification of the full scope of the law and increased appropriations for the agencies for enforcement; (2) guidance from the agencies that articulates a “dynamic and symmetric” consumer welfare standard (describes in #2 below) and requirements for implementing it; and (3) efforts to strengthen or introduce presumptions of illegality in mergers and some forms of conduct.
by Jon Baker (American University)
Ahead of the inaugural conference on Challenges to Antitrust in a Changing Economy, at Harvard Law School on November 9th, CPI reached out to Jon Baker (Professor, American University) and Diana Moss (President, American Antitrust Institute). They will participate in “The Consumer Welfare Standard” panel, together with Rob Atkinson (President, Information Technology and Innovation Foundation), Renata Hesse (Partner, Sullivan & Cromwell), and Einer Elhauge (Professor, Harvard Law School).
In this exclusive interview, Diana Moss has responded to three questions asked by Professor Baker on the consumer welfare standard and its current application in US antitrust law.
This conference is co-organized by CPI and CCIA. To see the full program and register free, please click here.
Following is Q and A # 1. For the other 2, see
https://www.competitionpolicyinternational.com/cpi-talks-on-the-consumer-welfare-standard/?utm_source=CPI+Subscribers&utm_campaign=b47147cbd9-EMAIL_CAMPAIGN_2018_10_20_07_01&utm_medium=email&utm_term=0_0ea61134a5-b47147cbd9-236508653
Some progressives say that antitrust rules pay insufficient attention to harms to suppliers, including workers; harms along competitive dimensions other than price and output, such as quality or innovation; and the ways that the exercise of market power may undermine non-economic values, as by creating anti-democratic political pressures or limiting the opportunity of small businesses to compete. To what extent are these concerns justified?
Today’s debate over the role of antitrust has generated a lot of blue sky thinking about the state of U.S. antitrust. I think of this debate as a very different process from that of crafting constructive reform proposals. Actual reform requires knowledge of how the laws and standard have been and can be applied by enforcers and the courts. For example, we know that the consumer welfare standard can address the price and non-price dimensions (e.g., quality and innovation) of competition. The standard also reaches to the harms resulting from the exercise of market power anywhere along the supply chain (e.g., consumers and workers). The control of economic power serves to limit barriers to entry and exclusionary conduct that targets smaller innovative rivals and in stemming the growth of political power.
In sum, if enforcers and courts used the full scope of the law and standard, antitrust would today be more effective in defending and promoting our markets. The reality has been different, namely, a narrow interpretation of the consumer welfare standard under the conservative ideology has held sway for decades. In response to this, some proposals advocate for wholesale reforms that would essentially do away with any standard. This risks reforms that divert the antitrust laws to purposes for which they are not designed and could exacerbate the current state of under-enforcement.
As a progressive (as I will articulate more in my panel remarks), I think of constructive reform as including a more nuanced approach through a package of complementary proposals. These include: (1) legislative clarification of the full scope of the law and increased appropriations for the agencies for enforcement; (2) guidance from the agencies that articulates a “dynamic and symmetric” consumer welfare standard (describes in #2 below) and requirements for implementing it; and (3) efforts to strengthen or introduce presumptions of illegality in mergers and some forms of conduct.
DC public restrooms legislation proposed
Marcy Bernbaum, a retired USAID official, and a D.C. resident, has a mission of providing help to the most disadvantaged citizens. A particular campaign she has focused on is providing access to public toilets in the District of Columbia.
Her efforts, and the efforts of many others, have now resulted in a legislative proposal: D.C. Council Bill 22-0223 has the goal of installing and maintaining clean, safe, and available public restrooms. Support has come from churches, advocacy organizations, community associations and others.
Here is an excerpt from Marcy Bernbaum’s op-ed in the Washington Post. https://www.washingtonpost.com/opinions/why-does-dc-have-so-few-public-restrooms/2017/12/15/951e3fde-cfcf-11e7-9d3a-bcbe2af58c3a_story.html?utm_term=.33069c2c8867
We did an inventory of restrooms in private facilities in five D.C. neighborhoods: Gallery Place, Dupont Circle, Georgetown, the K Street corridor and Columbia Heights. And we carried out a comprehensive search to identify public restrooms open during the day as well as those open 24/7.
To our amazement, we found that there are only three public restrooms in all of the District that are open 24/7: those at Union Station, the Lincoln Memorial and the Jefferson Memorial — and there are no signs telling you how to get to them. Imagine it is late at night. You are walking down the street and urgently have to go to the bathroom. If you can't make it and experience the misfortune of having no choice but to "go" outside and are caught by a police officer, you risk receiving a fine of up to $500, up to 90 days in jail or both. During the day, off the Mall there are only six public restrooms in downtown Washington, their hours are limited, and there are no signs to tell you where they are.
The situation isn't much better when it comes to finding private facilities with restroom access. Forty-two of the 85 private facilities we visited in early 2015 permitted people who weren't patrons to use their restrooms. When we visited the same facilities in early 2016, the number had dwindled to 28. And when we returned to the same facilities in mid-2017, only 11 (or 13 percent) permitted entry to non-patrons.
In April, D.C. Council members Brianne K. Nadeau (D-Ward 1), David Grosso (I-At Large), Elissa Silverman (I-At Large) and Robert C. White Jr. (D-At Large) introduced Bill 22-0223, the Public Restroom Facilities Installation and Promotion Act of 2017.
The bill would work toward creating public restrooms and establish an incentive for private businesses to make their restrooms available to the public.
Marcy Bernbaum, a retired USAID official, and a D.C. resident, has a mission of providing help to the most disadvantaged citizens. A particular campaign she has focused on is providing access to public toilets in the District of Columbia.
Her efforts, and the efforts of many others, have now resulted in a legislative proposal: D.C. Council Bill 22-0223 has the goal of installing and maintaining clean, safe, and available public restrooms. Support has come from churches, advocacy organizations, community associations and others.
Here is an excerpt from Marcy Bernbaum’s op-ed in the Washington Post. https://www.washingtonpost.com/opinions/why-does-dc-have-so-few-public-restrooms/2017/12/15/951e3fde-cfcf-11e7-9d3a-bcbe2af58c3a_story.html?utm_term=.33069c2c8867
We did an inventory of restrooms in private facilities in five D.C. neighborhoods: Gallery Place, Dupont Circle, Georgetown, the K Street corridor and Columbia Heights. And we carried out a comprehensive search to identify public restrooms open during the day as well as those open 24/7.
To our amazement, we found that there are only three public restrooms in all of the District that are open 24/7: those at Union Station, the Lincoln Memorial and the Jefferson Memorial — and there are no signs telling you how to get to them. Imagine it is late at night. You are walking down the street and urgently have to go to the bathroom. If you can't make it and experience the misfortune of having no choice but to "go" outside and are caught by a police officer, you risk receiving a fine of up to $500, up to 90 days in jail or both. During the day, off the Mall there are only six public restrooms in downtown Washington, their hours are limited, and there are no signs to tell you where they are.
The situation isn't much better when it comes to finding private facilities with restroom access. Forty-two of the 85 private facilities we visited in early 2015 permitted people who weren't patrons to use their restrooms. When we visited the same facilities in early 2016, the number had dwindled to 28. And when we returned to the same facilities in mid-2017, only 11 (or 13 percent) permitted entry to non-patrons.
In April, D.C. Council members Brianne K. Nadeau (D-Ward 1), David Grosso (I-At Large), Elissa Silverman (I-At Large) and Robert C. White Jr. (D-At Large) introduced Bill 22-0223, the Public Restroom Facilities Installation and Promotion Act of 2017.
The bill would work toward creating public restrooms and establish an incentive for private businesses to make their restrooms available to the public.
A business tax measure to fund homelessness services
is on the ballot for San Francisco voters in San Francisco County, California, on November 6, 2018.
A yes vote is a vote in favor of authorizing the city and county of San Francisco to fund housing and homelessness services by taxing certain businesses at the following rates:
A no vote is a vote against authorizing the city and county of San Francisco to tax businesses at the above rates to fund housing and homelessness services.
Credit: balletopedia.org
Not all businesses support the San Francisco tax proposal. See https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=2ahUKEwiClq2V9pPeAhXSwFkKHfoWCqEQFjAFegQIBRAB&url=https%3A%2F%2Fwww.businessinsider.com%2Fmarc-benioff-and-jack-dorsey-clash-over-san-francisco-homeless-measure-prop-c-2018-10&usg=AOvVaw0j7wtU1oE5T-AnRBnwaD3Q
is on the ballot for San Francisco voters in San Francisco County, California, on November 6, 2018.
A yes vote is a vote in favor of authorizing the city and county of San Francisco to fund housing and homelessness services by taxing certain businesses at the following rates:
- 0.175 percent to 0.69 percent on gross receipts for businesses with over $50 million in gross annual receipts, or
- 1.5 percent of payroll expenses for certain businesses with over $1 billion in gross annual receipts and administrative offices in San Francisco.
A no vote is a vote against authorizing the city and county of San Francisco to tax businesses at the above rates to fund housing and homelessness services.
Credit: balletopedia.org
Not all businesses support the San Francisco tax proposal. See https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=2ahUKEwiClq2V9pPeAhXSwFkKHfoWCqEQFjAFegQIBRAB&url=https%3A%2F%2Fwww.businessinsider.com%2Fmarc-benioff-and-jack-dorsey-clash-over-san-francisco-homeless-measure-prop-c-2018-10&usg=AOvVaw0j7wtU1oE5T-AnRBnwaD3Q
Regulators have been cracking down on abusive rent-to-own deals
offered by operators of manufactured home communities, otherwise known as trailer parks, in which people shell out thousands of dollars for run-down homes that they never actually get to buy
The New York attorney general’s office is expected to announce a settlement that could give hundreds of people who signed rent-to-own leases with a trailer park the right to tear up those deals and recoup any deposits they paid, according to two people briefed on the matter who were not authorized to speak publicly.
The settlement is with eight trailer park operators, including two publicly traded “real estate investment trusts,” that run more than 100 parks from Long Island to upstate New York. The settlement would end a yearlong investigation by the attorney general’s office, which had received dozens of complaints from renters about misleading sales pitches by park operators, the people said.
Private equity firms and large real estate investors have been looking to buy trailer parks and combine them into larger companies. They are attractive investments because prefabricated homes are relatively cheap to produce and maintain. New manufactured homes often sell for as little as $70,000.
One of the companies settling with New York is Sun Communities, which has a market value of $9 billion and whose shares have soared nearly a thousand percent in the last decade. Sun operates more than 300 parks for manufactured homes and recreational vehicles.
Sun representatives didn’t respond to a phone message seeking comment.
The contracts, which typically last seven to 10 years, sometimes referred to rent payments as “mortgage payments,” even though the tenants would take possession of the property only if they made a large payment at the end of the contract.
The state negotiated some of the settlement terms with the New York Housing Association, which represents manufactured home parks in New York. Mark Glaser, a lawyer for the association, said the group had “cooperated with the attorney general’s office and was pleased to help facilitate a resolution of the issues under review.”
The terms are similar to ones that led a number of state attorneys general, including those in Wisconsin and Pennsylvania, to sue rent-to-own housing firms. Regulators in those states have said the rent-to-own contracts were deceptive.
From https://www.nytimes.com/2018/10/18/business/trailer-park-rent-settlement.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
offered by operators of manufactured home communities, otherwise known as trailer parks, in which people shell out thousands of dollars for run-down homes that they never actually get to buy
The New York attorney general’s office is expected to announce a settlement that could give hundreds of people who signed rent-to-own leases with a trailer park the right to tear up those deals and recoup any deposits they paid, according to two people briefed on the matter who were not authorized to speak publicly.
The settlement is with eight trailer park operators, including two publicly traded “real estate investment trusts,” that run more than 100 parks from Long Island to upstate New York. The settlement would end a yearlong investigation by the attorney general’s office, which had received dozens of complaints from renters about misleading sales pitches by park operators, the people said.
Private equity firms and large real estate investors have been looking to buy trailer parks and combine them into larger companies. They are attractive investments because prefabricated homes are relatively cheap to produce and maintain. New manufactured homes often sell for as little as $70,000.
One of the companies settling with New York is Sun Communities, which has a market value of $9 billion and whose shares have soared nearly a thousand percent in the last decade. Sun operates more than 300 parks for manufactured homes and recreational vehicles.
Sun representatives didn’t respond to a phone message seeking comment.
The contracts, which typically last seven to 10 years, sometimes referred to rent payments as “mortgage payments,” even though the tenants would take possession of the property only if they made a large payment at the end of the contract.
The state negotiated some of the settlement terms with the New York Housing Association, which represents manufactured home parks in New York. Mark Glaser, a lawyer for the association, said the group had “cooperated with the attorney general’s office and was pleased to help facilitate a resolution of the issues under review.”
The terms are similar to ones that led a number of state attorneys general, including those in Wisconsin and Pennsylvania, to sue rent-to-own housing firms. Regulators in those states have said the rent-to-own contracts were deceptive.
From https://www.nytimes.com/2018/10/18/business/trailer-park-rent-settlement.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
The campaign for Proposition 10, a ballot initiative that would loosen California state restraints on local rent control laws.
The effort has stoked a battle that has already consumed close to $60 million in political spending, a sizable figure even in a state known for heavily funded campaigns.
Depending on which side is talking, Proposition 10 is either a much-needed tool to help cities solve a housing crisis or a radically misguided idea that will only make things worse. Specifically, it would repeal the Costa-Hawkins Rental Housing Act, which prevents cities from applying rent control laws to single-family homes and apartments built after 1995.
The initiative drive builds on the growing momentum of local efforts to expand tenant protections.
From: https://www.nytimes.com/2018/10/12/business/economy/california-rent-control-tenants.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
The effort has stoked a battle that has already consumed close to $60 million in political spending, a sizable figure even in a state known for heavily funded campaigns.
Depending on which side is talking, Proposition 10 is either a much-needed tool to help cities solve a housing crisis or a radically misguided idea that will only make things worse. Specifically, it would repeal the Costa-Hawkins Rental Housing Act, which prevents cities from applying rent control laws to single-family homes and apartments built after 1995.
The initiative drive builds on the growing momentum of local efforts to expand tenant protections.
From: https://www.nytimes.com/2018/10/12/business/economy/california-rent-control-tenants.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Washington Post says dark money from both left and right groups participated in Kavanaugh public advocacy campaigns
From the Post article:
Judicial Crisis Network is a 501(c)(4) advocacy organization — a “dark money” group that is not required to disclose the sources of its funding, regardless of the industry groups or individual donors behind them. It poured at least $5.3 million into its pro-Kavanaugh advertising campaign, much of it targeting vulnerable Senate Democrats in red and swing states. At least $1.5 million of that was spent defending Kavanaugh after Christine Blasey Ford went public with her allegation of sexual assault against him.
A liberal group of a similar stripe, Demand Justice, spent at least $700,000 of a planned $5 million campaign trying to scuttle Kavanaugh’s nomination.
https://www.msn.com/en-us/news/politics/collins-blasted-‘dark-money’-groups-in-kavanaugh-fight-one-just-paid-to-thank-her-for-her-vote/ar-BBOkLwr?ocid=spartandhp
From the Post article:
Judicial Crisis Network is a 501(c)(4) advocacy organization — a “dark money” group that is not required to disclose the sources of its funding, regardless of the industry groups or individual donors behind them. It poured at least $5.3 million into its pro-Kavanaugh advertising campaign, much of it targeting vulnerable Senate Democrats in red and swing states. At least $1.5 million of that was spent defending Kavanaugh after Christine Blasey Ford went public with her allegation of sexual assault against him.
A liberal group of a similar stripe, Demand Justice, spent at least $700,000 of a planned $5 million campaign trying to scuttle Kavanaugh’s nomination.
https://www.msn.com/en-us/news/politics/collins-blasted-‘dark-money’-groups-in-kavanaugh-fight-one-just-paid-to-thank-her-for-her-vote/ar-BBOkLwr?ocid=spartandhp
From DC AG Racine: OAG's "Cure the Streets" program
Earlier this summer, the District saw a tragic spike in violence where 13 people were shot in 11 separate incidents over Memorial Day weekend. In response, the Council gave OAG funds to set up a pilot program for violence interruption. In just four months, OAG has launched “Cure the Streets” in the District and it’s already showing some signs of progress.
Cure the Streets is operating in two pilot sites in Wards 5 and 8, which have some of the highest rates of gun violence in the city. This pilot program uses a proven, public-health approach to treat violence as a disease, focusing on three main actions:
Interrupt: Interrupt potentially violent conflicts by preventing retaliation and mediating simmering disputes;
- Treat: Identify and treat individuals at the highest risk for conflict by providing support services and changing behavior; and
- Change: Engage communities in changing norms around violence.
Although Cure the Streets is just getting started, it’s already making a positive difference in these communities. We must continue investing in these data-driven, proven solutions to stop violence before it happens and save lives in the District.
Karl A. Racine
Attorney General
AAI Statement: DOJ's Approval of CVS-Aetna Merger Imperils Competition and Consumers in Critical Parts of Healthcare Supply Chain
Today [10/10/2018] , the U.S. Department of Justice (DOJ) approved the vertical merger of leading retail pharmacy and pharmacy benefits manager (PBM) CVS with major health insurer Aetna. "While the DOJ obtained divestitures to address the horizontal overlap in CVS's and Aetna's Medicare Part D individual prescription drug plans, it did nothing to address the significant vertical competitive problems raised by the combination," said AAI President Diana Moss.
The approval of CVS-Aetna comes on the heels of the DOJ's recent approval of a similar vertical merger of PBM Express Scripts and heath insurer Cigna.
"Within a short period of time, antitrust enforcers have green-lighted a fundamental restructuring of important segments of the healthcare industry in the U.S.," said Moss. "Competition now depends almost entirely on having 'enough' rivalry between integrated PBM-insurers. This 'roll-the-dice' model of competition stands in stark contrast to a model of standalone PBMs competing hard to gain insurers' drug plan business and insurers aggressively seeking out competitive PBM services."
In a March 26, 2018 letter to the DOJ, AAI raised serious concerns about the competitive effects of the proposed merger. The deal creates a large, vertically integrated PBM-insurer that operates in upstream and downstream markets featuring only a few rivals. AAI also provided testimony at the California Department of Insurance hearings on the proposed merger.
"We are disappointed that the DOJ did not address a merged CVS-Aetna's enhanced incentives to use their market positions to disadvantage rival PBMs, independent pharmacies, and rival health insurers," said Moss. "Competition will undoubtedly suffer, as will consumers through higher prices, lower quality, less innovation, and less choice," Moss added, noting that any efficiencies claims would have to be monumentally large to overcome significant competitive concerns. AAI says the DOJ's decision highlights the need for new guidelines on vertical mergers.
AAI's advocacy against the CVS-Aetna merger explains that giant PBM-insurer organizations created by the recent swath of merger approvals will make it harder for companies with more innovative business models to enter markets. Because of widespread vertical integration, new entrants will be forced to enter at both the PBM and insurer levels to be viable competitors.
"If ever there were a vertical merger that should have been challenged by antitrust enforcers, this would be it," said Moss. High levels of concentration in the PBM and insurer markets, demonstrated exclusionary conduct by one of the merging parties, and past enforcement actions involving consolidation in these important markets are all powerful indicators that the deal should have been deemed illegal.
Wash Post Op-Ed on Pay to Protest
By Mara Verheyden-Hilliard and
Carl Messineo
September 11
Mara Verheyden-Hilliard is executive director of the Partnership for Civil Justice Fund. Carl Messineo is the group’s legal director.
For the first time, the U.S. government wants demonstrators to pay to use our parks, sidewalks and streets to engage in free speech in the nation’s capital. This should be called what it is: a protest tax.
This is a bold effort by the Trump administration to burden and restrict access to public spaces for First Amendment activities in Washington. If enacted, it would fundamentally alter participatory democracy in the United States.
Last month, Interior Secretary Ryan Zinke announced the administration’s radical, anti-democratic rewriting of regulations governing free speech and demonstrations on public lands under federal jurisdiction in Washington. Under the proposal, which is open to public comment, the National Park Service (NPS) would charge protesters “event management” costs. This would include the cost of barricades and fencing erected at the discretion of police, the salaries of personnel deployed to monitor the protest, trash removal and sanitation charges, permit application charges and costs assessed on “harm to turf” — the effects of engaging in free speech on grass, as if our public green spaces are for ornamental viewing.
And it goes beyond just the Mall. Want to protest in front of the Trump hotel on Pennsylvania Avenue? Under this proposal, you’ll have to take out your checkbook, because the NPS maintains control over the broad sidewalks of Pennsylvania Avenue. In addition to the upfront costs to even request a permit, you may be billed for the cost of barricades erected around the hotel — fencing you didn’t ask for but that the hotel wants.
Such a “pay to protest” plan will probably be challenged in court. The right to petition the government for a redress of grievances cannot be burdened by such charges. And discretionary fees or measures that can serve as a proxy for content-based discrimination are unconstitutional.
This is just one element of a larger initiative to close off public space to silence dissent by both financial and physical restriction. The NPS has, at the same time, quietly sneaked into its new regulatory proposal a plan to essentially close the iconic White House sidewalk to protest, leaving only five feet for a narrow pedestrian walkway.
During the Vietnam War, the Nixon White House was surrounded by buses to block protesters from approaching the sidewalk. Now, the government seeks to remove the protests by taking the public spaces out from under our feet. What’s next, closing Lafayette Square?
The NPS describes our democratic rights as too costly for our democracy. An NPS spokeswoman justified the measure as cost recovery, pointing to last year’s Women’s March as having imposed “a pretty heavy cost” on the government.
Free speech is not a cost. It is a value. It is a fundamental pillar of democracy.
For the full op-ed, see https://www.washingtonpost.com/opinions/the-trump-administration-wants-to-tax-protests-what-happened-to-free-speech/2018/09/11/70f08bfa-b5e1-11e8-b79f-f6e31e555258_story.html?noredirect=on&utm_term=.8d0af0c6ddc1
By Mara Verheyden-Hilliard and
Carl Messineo
September 11
Mara Verheyden-Hilliard is executive director of the Partnership for Civil Justice Fund. Carl Messineo is the group’s legal director.
For the first time, the U.S. government wants demonstrators to pay to use our parks, sidewalks and streets to engage in free speech in the nation’s capital. This should be called what it is: a protest tax.
This is a bold effort by the Trump administration to burden and restrict access to public spaces for First Amendment activities in Washington. If enacted, it would fundamentally alter participatory democracy in the United States.
Last month, Interior Secretary Ryan Zinke announced the administration’s radical, anti-democratic rewriting of regulations governing free speech and demonstrations on public lands under federal jurisdiction in Washington. Under the proposal, which is open to public comment, the National Park Service (NPS) would charge protesters “event management” costs. This would include the cost of barricades and fencing erected at the discretion of police, the salaries of personnel deployed to monitor the protest, trash removal and sanitation charges, permit application charges and costs assessed on “harm to turf” — the effects of engaging in free speech on grass, as if our public green spaces are for ornamental viewing.
And it goes beyond just the Mall. Want to protest in front of the Trump hotel on Pennsylvania Avenue? Under this proposal, you’ll have to take out your checkbook, because the NPS maintains control over the broad sidewalks of Pennsylvania Avenue. In addition to the upfront costs to even request a permit, you may be billed for the cost of barricades erected around the hotel — fencing you didn’t ask for but that the hotel wants.
Such a “pay to protest” plan will probably be challenged in court. The right to petition the government for a redress of grievances cannot be burdened by such charges. And discretionary fees or measures that can serve as a proxy for content-based discrimination are unconstitutional.
This is just one element of a larger initiative to close off public space to silence dissent by both financial and physical restriction. The NPS has, at the same time, quietly sneaked into its new regulatory proposal a plan to essentially close the iconic White House sidewalk to protest, leaving only five feet for a narrow pedestrian walkway.
During the Vietnam War, the Nixon White House was surrounded by buses to block protesters from approaching the sidewalk. Now, the government seeks to remove the protests by taking the public spaces out from under our feet. What’s next, closing Lafayette Square?
The NPS describes our democratic rights as too costly for our democracy. An NPS spokeswoman justified the measure as cost recovery, pointing to last year’s Women’s March as having imposed “a pretty heavy cost” on the government.
Free speech is not a cost. It is a value. It is a fundamental pillar of democracy.
For the full op-ed, see https://www.washingtonpost.com/opinions/the-trump-administration-wants-to-tax-protests-what-happened-to-free-speech/2018/09/11/70f08bfa-b5e1-11e8-b79f-f6e31e555258_story.html?noredirect=on&utm_term=.8d0af0c6ddc1
A second look at The Case Against the Supreme Court, the 2014 book by Erwin Chemerinsky
This seems like a good moment to take down from the bookshelf Erwin Chemerinsky’s 2014 book, The Case Against the Supreme Court (Viking, 386 pages).
The book argues that over time the U.S. Supreme Court’s decisions have frequently been wrong. The wrong case decisions are often a product of the ideology of the Justices who decide the cases. For Chemerinsky, ideology means the “values, views, and prejudices” of the Justices. Those values, views and prejudices are not necessarily the same as those of a particular political party, but often overlap. There have been some moments when the Court’s wrong decisions were partisan in the sense of favoring a particular political party’s agenda.
The author’s suggestions for structural reform of the Court are mild. He does not, for example, advocate doing away with the Court's power to review laws for their constitutionality. He would have Congress impose term limits, perhaps 18 years, so that the prevailing ideologies of a particular moment in history are less likely to persist for decades.
But Chemerinsky would like to see Justices appointed who share his own strongly felt ideological views, which he is not reluctant to express. He believes, for example, that the Justices should permit latitude so the government can use regulations to aid workers and consumers. He believes the Justices should allow the government to protect ethnic minorities. He opposes “originalist” approaches to construing the Constitution.
Chemerinsky is not recommending that operatives for a particular political party he favors be appointed as Justices – very few people have that point. But it seems likely that he would subscribe to the popular observation that elections matter.
Turning to some of the history recounted by the author, one point of ideology that has caused harm concerns race. The “separate but equal” doctrine justifying racial separation was the law of the land for many decades. The doctrine was abandoned by the U.S. Supreme Court only in 1954, in Brown v. Board of Education, which Chemerinsky hails as a high point of good Supreme Court decision making. But it took the Court a long time to get there -- decades. And Chemerinsky finds the Court’s follow-up on the Brown decision to be less than perfect.
And, Chemerinsky points out, the ideology of the judges deciding Brown was crucial. The deciding judges believed in racial equality and were not “originalists.” They did not limit interpretation of the Constitution to what the framers originally intended. Recall that framer Thomas Jefferson (who wrote "all men are created equal") owned slaves, and engaged in sexual predation.
Among other points of ideology that have caused harm is hostility to ethnic minorities such as the Japanese. In Korematsu v. United States, the Court, in a 6-3 decision, upheld evacuation and internment of Japanese-American citizens. Chemerinsky points out that the decision was highly offensive in its reliance on ethnicity alone to decide who is a threat to national security.
Another important point of ideology is antipathy to regulations intended to protect workers and consumers. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
This article is posted by Don Allen Resnikoff, who takes entire responsibility for the views expressed.
This seems like a good moment to take down from the bookshelf Erwin Chemerinsky’s 2014 book, The Case Against the Supreme Court (Viking, 386 pages).
The book argues that over time the U.S. Supreme Court’s decisions have frequently been wrong. The wrong case decisions are often a product of the ideology of the Justices who decide the cases. For Chemerinsky, ideology means the “values, views, and prejudices” of the Justices. Those values, views and prejudices are not necessarily the same as those of a particular political party, but often overlap. There have been some moments when the Court’s wrong decisions were partisan in the sense of favoring a particular political party’s agenda.
The author’s suggestions for structural reform of the Court are mild. He does not, for example, advocate doing away with the Court's power to review laws for their constitutionality. He would have Congress impose term limits, perhaps 18 years, so that the prevailing ideologies of a particular moment in history are less likely to persist for decades.
But Chemerinsky would like to see Justices appointed who share his own strongly felt ideological views, which he is not reluctant to express. He believes, for example, that the Justices should permit latitude so the government can use regulations to aid workers and consumers. He believes the Justices should allow the government to protect ethnic minorities. He opposes “originalist” approaches to construing the Constitution.
Chemerinsky is not recommending that operatives for a particular political party he favors be appointed as Justices – very few people have that point. But it seems likely that he would subscribe to the popular observation that elections matter.
Turning to some of the history recounted by the author, one point of ideology that has caused harm concerns race. The “separate but equal” doctrine justifying racial separation was the law of the land for many decades. The doctrine was abandoned by the U.S. Supreme Court only in 1954, in Brown v. Board of Education, which Chemerinsky hails as a high point of good Supreme Court decision making. But it took the Court a long time to get there -- decades. And Chemerinsky finds the Court’s follow-up on the Brown decision to be less than perfect.
And, Chemerinsky points out, the ideology of the judges deciding Brown was crucial. The deciding judges believed in racial equality and were not “originalists.” They did not limit interpretation of the Constitution to what the framers originally intended. Recall that framer Thomas Jefferson (who wrote "all men are created equal") owned slaves, and engaged in sexual predation.
Among other points of ideology that have caused harm is hostility to ethnic minorities such as the Japanese. In Korematsu v. United States, the Court, in a 6-3 decision, upheld evacuation and internment of Japanese-American citizens. Chemerinsky points out that the decision was highly offensive in its reliance on ethnicity alone to decide who is a threat to national security.
Another important point of ideology is antipathy to regulations intended to protect workers and consumers. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
This article is posted by Don Allen Resnikoff, who takes entire responsibility for the views expressed.
- States have important role in CFPB suit against student lender Navient
The states’ lawsuits will take on increased importance if the federal consumer bureau pursues its case in a weak manner, or drops its case against Navient.
See: https://www.nytimes.com/2018/10/07/business/student-loans-navient.html
From: DMN:
Ticketmaster Is Now In the Crosshairs of the U.S. Federal Trade Commission
Weeks after an explosive undercover report revealed that Ticketmaster works closely with scalpers to sell their second-hand tickets; the FTC has announced a workshop to investigate how online ticketing is handled.
Ticketmaster parent company Live Nation witnessed its stock price drop as much as 5.5% after the report of the workshop. But a little damage control helped to recover some of those losses.
So what’s the FTC doing, exactly?
The story continues here. -- https://www.digitalmusicnews.com/2018/10/05/ticketmaster-scalper-federal-trade-commission-ftc/
Ticketmaster Is Now In the Crosshairs of the U.S. Federal Trade Commission
Weeks after an explosive undercover report revealed that Ticketmaster works closely with scalpers to sell their second-hand tickets; the FTC has announced a workshop to investigate how online ticketing is handled.
Ticketmaster parent company Live Nation witnessed its stock price drop as much as 5.5% after the report of the workshop. But a little damage control helped to recover some of those losses.
So what’s the FTC doing, exactly?
The story continues here. -- https://www.digitalmusicnews.com/2018/10/05/ticketmaster-scalper-federal-trade-commission-ftc/
Chinese ride-share company Didi is at the center of the ride-hailing web that it and its investor SoftBank have spun.
Truces and alliances between regional players may follow.
Didi has invested in Lyft, Uber through the deal they cut in August 2016, Southeast Asia’s Grab, India’s Ola, and the Middle East’s Careem. It put $100 million into and later acquired Brazil’s 99. Didi was last valued at $57 billion during its $4.6 billion financing in December 2017, and is reportedly in talks with South Korea’s Mirae Asset Financial Group to raise an additional $263 million.
SoftBank also has a stake in most of these ride-hailing companies, positioning it to broker truces and alliances between regional players, like Uber’s recent sale of its Southeast Asia operations to Grab. According to data from industry research firm PitchBook, SoftBank has invested five times in Ola, four times in Didi, four times in Grab, once in Uber, and once in 99. It’s unclear how much these investments total, but they are well into the billions. SoftBank is playing the ride-hailing version of Risk, but it also owns a piece of all the players. So long as a single company controls a country or region, so that it’s not burning money to compete, SoftBank seems likely to be happy with the outcome.
That said, insofar as SoftBank has picked a single winner, it seems like Didi. It’s notable that Didi has continued to expand globally even as Uber has now repeatedly withdrawn from key international markets, first in China, then Russia and most recently in Southeast Asia. SoftBank has also not-so-subtly hinted that it would like to see Uber retreat. Rajeev Misra, a SoftBank board director who also sits on Uber’s board, told the Financial Times in January that Uber should focus on its core markets, which he identified as the US, Europe, Latin America, and Australia. Uber CEO Dara Khosrowshahi said Uber would “invest aggressively” in the Southeast Asia business about a month before it sold to Grab.
From https://qz.com/1261177/softbanks-winner-in-ride-hailing-is-chinas-didi-chuxing-not-uber/
Truces and alliances between regional players may follow.
Didi has invested in Lyft, Uber through the deal they cut in August 2016, Southeast Asia’s Grab, India’s Ola, and the Middle East’s Careem. It put $100 million into and later acquired Brazil’s 99. Didi was last valued at $57 billion during its $4.6 billion financing in December 2017, and is reportedly in talks with South Korea’s Mirae Asset Financial Group to raise an additional $263 million.
SoftBank also has a stake in most of these ride-hailing companies, positioning it to broker truces and alliances between regional players, like Uber’s recent sale of its Southeast Asia operations to Grab. According to data from industry research firm PitchBook, SoftBank has invested five times in Ola, four times in Didi, four times in Grab, once in Uber, and once in 99. It’s unclear how much these investments total, but they are well into the billions. SoftBank is playing the ride-hailing version of Risk, but it also owns a piece of all the players. So long as a single company controls a country or region, so that it’s not burning money to compete, SoftBank seems likely to be happy with the outcome.
That said, insofar as SoftBank has picked a single winner, it seems like Didi. It’s notable that Didi has continued to expand globally even as Uber has now repeatedly withdrawn from key international markets, first in China, then Russia and most recently in Southeast Asia. SoftBank has also not-so-subtly hinted that it would like to see Uber retreat. Rajeev Misra, a SoftBank board director who also sits on Uber’s board, told the Financial Times in January that Uber should focus on its core markets, which he identified as the US, Europe, Latin America, and Australia. Uber CEO Dara Khosrowshahi said Uber would “invest aggressively” in the Southeast Asia business about a month before it sold to Grab.
From https://qz.com/1261177/softbanks-winner-in-ride-hailing-is-chinas-didi-chuxing-not-uber/
States Urge Justices To Flip Illinois Brick In Apple Case -- See briefs below:
Brief for states:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/states.pdf
Excerpt:
This case presents a rare opportunity to revisit the controversial holding in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). The Court can overrule its precedents based on briefing by amici, and it has done so before. The Court should do so again here.
I. Section 4 of the Clayton Act directs that “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained.” 15 U.S.C. § 15(a). It is widely accepted that consumers can be injured when manufacturers take concerted action to fix supracompetitive prices and distributors of the overpriced products pass on some or all of the overcharges to end users.
Before 1977, when this Court decided Illinois Brick, lower courts generally allowed consumers who purchased goods made by an antitrust violator to prove that they had been harmed by overcharges passed on to them by intermediaries in the distribution chain. Illinois Brick, however, held that an “indirect purchaser” is categorically forbidden from attempting to prove damages from an antitrust violation. 431 U.S. at 726. Instead, “the overcharged direct purchaser should be deemed for purposes of section 4 to have suffered the full injury from the overcharge.” Id.
The Court admitted that this conclusive presumption “denies recovery to those indirect purchasers who may have been actually injured by antitrust violations.” Id. at 746. The Court did not identify any statutory text denying recovery to “any person who shall be injured,” 15 U.S.C. § 15(a), by an antitrust violation. Instead, the Court reasoned that “the legislative purpose” of “encouraging vigorous private enforcement of the antitrust laws” was “better served” by a ban on “attempting to apportion the overcharge among all that may have absorbed a part of it.” Ill. Brick, 431 U.S. at 745-46.
Brief for AAI:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/americanantitrust.pdf
Brief for Open Markets:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/http-www-supremecourt-gov-docketpdf-17-17-204-65344-20181001145735965_17-204-20amicus-20bom-pdfa-pdf.pdf
Brief for states:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/states.pdf
Excerpt:
This case presents a rare opportunity to revisit the controversial holding in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). The Court can overrule its precedents based on briefing by amici, and it has done so before. The Court should do so again here.
I. Section 4 of the Clayton Act directs that “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained.” 15 U.S.C. § 15(a). It is widely accepted that consumers can be injured when manufacturers take concerted action to fix supracompetitive prices and distributors of the overpriced products pass on some or all of the overcharges to end users.
Before 1977, when this Court decided Illinois Brick, lower courts generally allowed consumers who purchased goods made by an antitrust violator to prove that they had been harmed by overcharges passed on to them by intermediaries in the distribution chain. Illinois Brick, however, held that an “indirect purchaser” is categorically forbidden from attempting to prove damages from an antitrust violation. 431 U.S. at 726. Instead, “the overcharged direct purchaser should be deemed for purposes of section 4 to have suffered the full injury from the overcharge.” Id.
The Court admitted that this conclusive presumption “denies recovery to those indirect purchasers who may have been actually injured by antitrust violations.” Id. at 746. The Court did not identify any statutory text denying recovery to “any person who shall be injured,” 15 U.S.C. § 15(a), by an antitrust violation. Instead, the Court reasoned that “the legislative purpose” of “encouraging vigorous private enforcement of the antitrust laws” was “better served” by a ban on “attempting to apportion the overcharge among all that may have absorbed a part of it.” Ill. Brick, 431 U.S. at 745-46.
Brief for AAI:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/americanantitrust.pdf
Brief for Open Markets:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/http-www-supremecourt-gov-docketpdf-17-17-204-65344-20181001145735965_17-204-20amicus-20bom-pdfa-pdf.pdf
Could you be seated next to someone's service horse on your next Alaska Airlines flight?
Alaska Airlines News release
The updated policy aligns with recent airline industry changes and provides clear guidance and a consistent and safe travel experience for guests and employees. This change is being made to protect the health and safety of passengers and crew while maintaining a safe and orderly operation.
Summary of the new policy, which goes into effect for all travel occurring on or after Oct. 1, 2018, regardless of when booked:
Customers traveling with one or more emotional support animals after Oct. 1 have the option to limit their travel to only one emotional support animal, to travel without their animal, or to receive a full refund if they no longer wish to travel.
Learn more about the support animal policy at alaskaair.com.
CONTACT: Media Relations, (206) 304-0008, [email protected]
URL: https://newsroom.alaskaair.com/news-releases?item=123851
Alaska Airlines News release
The updated policy aligns with recent airline industry changes and provides clear guidance and a consistent and safe travel experience for guests and employees. This change is being made to protect the health and safety of passengers and crew while maintaining a safe and orderly operation.
Summary of the new policy, which goes into effect for all travel occurring on or after Oct. 1, 2018, regardless of when booked:
- May bring only one emotional support animal on the flight.
- Emotional support animals will be limited to either a dog or cat. No other species of animal will be permitted.
- For the safety of other passengers, all emotional support animals must be in a carrier or leashed at all times.
- Must provide appropriate documentation and 48-hours advance notice, per our existing policy.uests traveling with an emotional support animal:
- Guests traveling with a trained service animal:
- Service animals (now includes psychiatric service animals) will be limited to either a dog, cat or miniature horse.
- Service animals must be under the control of their owner at all times.
- Alaska Airlines accepts fully trained psychiatric service animals as trained service animals—no documentation is required for service animals.
Customers traveling with one or more emotional support animals after Oct. 1 have the option to limit their travel to only one emotional support animal, to travel without their animal, or to receive a full refund if they no longer wish to travel.
Learn more about the support animal policy at alaskaair.com.
CONTACT: Media Relations, (206) 304-0008, [email protected]
URL: https://newsroom.alaskaair.com/news-releases?item=123851
- From Health Affairs Blog
September 13, 2018
URL: 10.1377/hblog20180907.685440
- erpt from article:
Limited access to reliable transportation causes millions of Americans to forgo important medical care every year. Transportation barriers are most prominent among the poor, elderly, and chronically ill—populations for whom routine access to ambulatory and preventive care is most important.
Payers that focus on vulnerable populations have taken steps to address transportation barriers by providing non-emergency medical transportation (NEMT) benefits to select beneficiaries. A majority of Medicare Advantage (MA) plans and state Medicaid programs currently provide NEMT benefits.
NEMT benefits are typically administered by specialized brokers that coordinate and dispatch private cars, taxis, or specialized vehicles to bring patients to medical appointments. Multiple reports have highlighted challenges with traditional approaches to NEMT delivery, including poor customer service, inadequate responsiveness, and fraud and abuse. In the face of these challenges, payers and health care delivery organizations have been experimenting with new strategies for delivering NEMT.
An approach that has attracted considerable attention is the use of transportation network companies (TNCs)—such as Uber or Lyft—to provide NEMT services. NEMT brokers such as such as American Logistics Corporation, National MedTrans, American Medical Response, and Access2Care are all now piloting TNC-based rides. New companies, such as Circulation and RoundTrip, have emerged to help hospitals and health plans offer TNC-based rides. And both Lyft and Uber are contracting directly with health plans and delivery organizations to provide NEMT services.
Despite the proliferation of these programs, there is scant data regarding their impact. Here we report the results from a large-scale, system-wide implementation of Lyft-based NEMT services at CareMore Health.
As is typical for MA plans, CareMore contracts with brokers to administer its NEMT benefits. Historically, these NEMT brokers arranged for rides using private car services. In 2016, CareMore launched a pilot program to evaluate the impact of Lyft-based C2C rides on patient experience and costs. The pilot ran for two months at select CareMore locations in Southern California, during which a total of 479 rides were provided. Results were encouraging: wait times decreased by 30 percent and per-ride costs decreased by 32 percent, and satisfaction rates were 80 percent.
California just passed its net neutrality law. The DOJ is already suing
https://money.cnn.com/2018/09/30/technology/california-net-neutrality-law/index.html
by Heather Kelly @heatherkellySeptember 30, 2018: 11:58 PM ET
The Department of Justice said it is filing a lawsuit against the state of California over its new net neutrality protections, hours after Gov. Jerry Brown signed the bill into law on Sunday.The California law would be the strictest net neutrality protections in the country, and could serve as a blueprint for other states. Under the law, internet service providers will not be allowed to block or slow specific types of content or applications, or charge apps or companies fees for faster access to customers.
The Department of Justice says the California law is illegal and that the state is "attempting to subvert the Federal Government's deregulatory approach" to the internet.
"Under the Constitution, states do not regulate interstate commerce—the federal government does," Attorney General Jeff Sessions said in a statement. "Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order."
As the largest economy in the United States and the fifth largest economy in the world, California has significant influence over how other states regulate businesses and even federal laws and regulations. That power is being tested under the Trump administration, which is currently battling the state in court over multiple issues, including emissions standards, immigration laws and the sale of federal lands..
"It's critically important for states to step in," state senator Scott Wiener, who co-authored the bill, told CNNMoney. "What California does definitely impacts the national conversation. I do believe that this bill ... will move us in a positive direction nationally on net neutrality."
For that to happen, the law will likely have to survive a legal battle. In addition to the lawsuit from the Department of Justice, ISPs may sue California over the bill. Major broadband companies, including AT&T and Comcast, have lobbied heavily against the California bill. (AT&T is the parent company of CNN.) They say the new rules will result in higher prices for consumers.
Jonathan Spalter, president of USTelecom -- a trade group representing broadband providers -- said while the group supports "strong and enforceable net neutrality protections for every American," the bill was "neither the way to get there nor will it help advance the promise and potential of California's innovation DNA."
"Rather than 50 states stepping in with their own conflicting open internet solutions, we need Congress to step up with a national framework for the whole internet ecosystem and resolve this issue once and for all," Spalter said.
Broadband providers lobbied against the California law, but were also for the repeal of the most recent federal regulations.
"The broadband providers say they don't want state laws, they want federal laws," said Gigi Sohn, a fellow at the Georgetown Law Institute for Technology and a former lawyer at the FCC, in an interview. "But they were the driving force behind the federal rules being repealed ... The federal solution they want is nothing, or extremely weak."
The FCC is fighting California over a pre-exemption clause included in its 2017 order repealing net neutrality protections. The FCC holds that it can preempt state-level laws because broadband service crosses state lines. Legal experts are split over whether or not the FCC can challenge a state net neutrality law, but Wiener believes the clause is unenforceable.
"We don't think the FCC has the power to preempt state action," said Wiener. "We are prepared to defend this law. We believe that California has the power to protect the internet and to protect our residents and businesses."
Barbara van Schewick, a professor at Stanford Law School, says the California bill is on solid legal ground and that California is within its legal rights.
"An agency that has no power to regulate has no power to preempt the states, according to case law. When the FCC repealed the 2015 Open Internet Order, it said it had no power to regulate broadband internet access providers. That means the FCC cannot prevent the states from adopting net neutrality protections because the FCC's repeal order removed its authority to adopt such protections," said van Schewick.
The bill was approved by lawmakers in early September, but it had been unclear if Brown would veto or approve the comprehensive measure, even though it had broad support from state Democrats.
California is the third state to pass its own net neutrality regulations, following Washington and Oregon. However, it is the first to match the thorough level of protections that had been provided by the Obama-era federal net neutrality regulations repealed by the Federal Communications Commission in June. At least some other states are expected to model future net neutrality laws on California's.
The original FCC rules included a two page summary and more than 300 additional pages with additional protections and clarifications on how they worked. While other states mostly replicated the two-page summary, California took longer crafting its law in order to match the details in the hundreds of supporting pages, said van Schewick.
"Most people don't understand how hard it is to do a solid net neutrality law," said van Schewick. "What's so special about California is that it includes not just two pages of rules, but all of the important protections from the text of the order and as a result closes the loopholes."
Loopholes addressed in California's new law include a prohibition on "zero rating," which allows carriers to exempt content from certain companies (like their own streaming services) from counting against a customer's data usage. The prohibition would not apply if a carrier wanted to exempt an entire category of content, like all streaming services. It also bans interconnection fees, which are charges a company pays when its data enters the internet provider's network.
The FCC says those rules will hurt consumers.
"The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits. They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them," said Ajit Pai, chairman of the FCC, in a statement.
The authors of the bill did have support from consumer and labor groups, grassroots activists, and small and mid-sized tech companies including Twilio, Etsy and Sonos. Larger technology companies, like Apple, Google, and Facebook, have stayed quietly on the sidelines.
Sohn and van Schewick believe states with legislatures controlled by Democrats are the ones most likely to pass strong net neutrality protections. Other states have already started working on similar bills, including New York and New Mexico.
From DMN:
California Passes Its Strict Net Neutrality Bill Into Law
— Setting the Stage for a Fight Against Trump’s FCC
California’s tough net neutrality bill is now state law, thanks to a signature from governor Jerry Brown on Sunday (September 30th).
It’s easily the toughest net neutrality measure in the nation. Now, it’s the law in the country’s most populous and economically powerful state, thanks to a signature from governor Jerry Brown.
The ratification happened late Sunday (September 30th), with Brown approving SB 822, which was simply titled ‘Communications: broadband Internet access service.’ The bill, which places strict limitations on ISPs like Verizon, AT&T, and Comcast, was led by California Senator Scott Wiener (D-San Francisco).
The story continues here: https://www.digitalmusicnews.com/2018/09/30/california-net-neutrality-law/
https://money.cnn.com/2018/09/30/technology/california-net-neutrality-law/index.html
by Heather Kelly @heatherkellySeptember 30, 2018: 11:58 PM ET
The Department of Justice said it is filing a lawsuit against the state of California over its new net neutrality protections, hours after Gov. Jerry Brown signed the bill into law on Sunday.The California law would be the strictest net neutrality protections in the country, and could serve as a blueprint for other states. Under the law, internet service providers will not be allowed to block or slow specific types of content or applications, or charge apps or companies fees for faster access to customers.
The Department of Justice says the California law is illegal and that the state is "attempting to subvert the Federal Government's deregulatory approach" to the internet.
"Under the Constitution, states do not regulate interstate commerce—the federal government does," Attorney General Jeff Sessions said in a statement. "Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order."
As the largest economy in the United States and the fifth largest economy in the world, California has significant influence over how other states regulate businesses and even federal laws and regulations. That power is being tested under the Trump administration, which is currently battling the state in court over multiple issues, including emissions standards, immigration laws and the sale of federal lands..
"It's critically important for states to step in," state senator Scott Wiener, who co-authored the bill, told CNNMoney. "What California does definitely impacts the national conversation. I do believe that this bill ... will move us in a positive direction nationally on net neutrality."
For that to happen, the law will likely have to survive a legal battle. In addition to the lawsuit from the Department of Justice, ISPs may sue California over the bill. Major broadband companies, including AT&T and Comcast, have lobbied heavily against the California bill. (AT&T is the parent company of CNN.) They say the new rules will result in higher prices for consumers.
Jonathan Spalter, president of USTelecom -- a trade group representing broadband providers -- said while the group supports "strong and enforceable net neutrality protections for every American," the bill was "neither the way to get there nor will it help advance the promise and potential of California's innovation DNA."
"Rather than 50 states stepping in with their own conflicting open internet solutions, we need Congress to step up with a national framework for the whole internet ecosystem and resolve this issue once and for all," Spalter said.
Broadband providers lobbied against the California law, but were also for the repeal of the most recent federal regulations.
"The broadband providers say they don't want state laws, they want federal laws," said Gigi Sohn, a fellow at the Georgetown Law Institute for Technology and a former lawyer at the FCC, in an interview. "But they were the driving force behind the federal rules being repealed ... The federal solution they want is nothing, or extremely weak."
The FCC is fighting California over a pre-exemption clause included in its 2017 order repealing net neutrality protections. The FCC holds that it can preempt state-level laws because broadband service crosses state lines. Legal experts are split over whether or not the FCC can challenge a state net neutrality law, but Wiener believes the clause is unenforceable.
"We don't think the FCC has the power to preempt state action," said Wiener. "We are prepared to defend this law. We believe that California has the power to protect the internet and to protect our residents and businesses."
Barbara van Schewick, a professor at Stanford Law School, says the California bill is on solid legal ground and that California is within its legal rights.
"An agency that has no power to regulate has no power to preempt the states, according to case law. When the FCC repealed the 2015 Open Internet Order, it said it had no power to regulate broadband internet access providers. That means the FCC cannot prevent the states from adopting net neutrality protections because the FCC's repeal order removed its authority to adopt such protections," said van Schewick.
The bill was approved by lawmakers in early September, but it had been unclear if Brown would veto or approve the comprehensive measure, even though it had broad support from state Democrats.
California is the third state to pass its own net neutrality regulations, following Washington and Oregon. However, it is the first to match the thorough level of protections that had been provided by the Obama-era federal net neutrality regulations repealed by the Federal Communications Commission in June. At least some other states are expected to model future net neutrality laws on California's.
The original FCC rules included a two page summary and more than 300 additional pages with additional protections and clarifications on how they worked. While other states mostly replicated the two-page summary, California took longer crafting its law in order to match the details in the hundreds of supporting pages, said van Schewick.
"Most people don't understand how hard it is to do a solid net neutrality law," said van Schewick. "What's so special about California is that it includes not just two pages of rules, but all of the important protections from the text of the order and as a result closes the loopholes."
Loopholes addressed in California's new law include a prohibition on "zero rating," which allows carriers to exempt content from certain companies (like their own streaming services) from counting against a customer's data usage. The prohibition would not apply if a carrier wanted to exempt an entire category of content, like all streaming services. It also bans interconnection fees, which are charges a company pays when its data enters the internet provider's network.
The FCC says those rules will hurt consumers.
"The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits. They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them," said Ajit Pai, chairman of the FCC, in a statement.
The authors of the bill did have support from consumer and labor groups, grassroots activists, and small and mid-sized tech companies including Twilio, Etsy and Sonos. Larger technology companies, like Apple, Google, and Facebook, have stayed quietly on the sidelines.
Sohn and van Schewick believe states with legislatures controlled by Democrats are the ones most likely to pass strong net neutrality protections. Other states have already started working on similar bills, including New York and New Mexico.
From DMN:
California Passes Its Strict Net Neutrality Bill Into Law
— Setting the Stage for a Fight Against Trump’s FCC
California’s tough net neutrality bill is now state law, thanks to a signature from governor Jerry Brown on Sunday (September 30th).
It’s easily the toughest net neutrality measure in the nation. Now, it’s the law in the country’s most populous and economically powerful state, thanks to a signature from governor Jerry Brown.
The ratification happened late Sunday (September 30th), with Brown approving SB 822, which was simply titled ‘Communications: broadband Internet access service.’ The bill, which places strict limitations on ISPs like Verizon, AT&T, and Comcast, was led by California Senator Scott Wiener (D-San Francisco).
The story continues here: https://www.digitalmusicnews.com/2018/09/30/california-net-neutrality-law/
Nobel Prize-winning economist Joseph Stiglitz says it’s time for the US to update its antitrust laws
Nobel Prize-winning economist Joseph Stiglitz says it’s time for the US to update its antitrust laws
By Richard Feloni & Andy Kiersz
There are plenty of companies that may feel too big to you, whether it’s trillion-dollar monoliths Apple and Amazon, or even the cable company you’re forced to deal with every day.
But the question of whether they’ve got so much power that they’re harming the economy is the subject of a debate in the spotlight once again.
For Nobel Prize-winning economist Joseph Stiglitz of Columbia University, there is indeed a monopoly and monopsony problem in the United States, and it’s high time to address it with new antitrust laws.
At a recent Federal Trade Commission hearing on the subject, Stiglitz said, “The point is, if our standard competitive analysis tools don’t show that there is a problem, it suggests something may be wrong with the tools themselves.”
The bedrock of America’s antitrust law was primarily built in the late 19th and early 20th century, during the democratic and reform-minded Progressive Era that followed the Gilded Age’s reign of robber barons and progression of inequality.
Even Adam Smith, the father of capitalism himself, warned in “The Wealth of Nations” against the consolidation of market power in the hands of a few. This is represented on the selling side by monopoly and on the buying side by monopsony, a term coined in the 20th century that refers to firms using their size to push down suppliers’ prices (Walmart is arguably an example).
Years of economic research has found that when market power is highly concentrated, barriers to entry prevent new competitors from building businesses, consumers have fewer options, and employees receive lower wages. This in turn slows overall economic growth.
Even before data on market power was routinely gathered, the federal government established the definition for an illegal monopoly and an illegal merger with the Sherman Act of 1890 and the Clayton Act of 1914. It also created the FTC in 1914 to enforce these rules.
Continue reading…https://www.businessinsider.com/economist-joseph-stiglitz-us-must-update-antitrust-laws-2018-9
Nobel Prize-winning economist Joseph Stiglitz says it’s time for the US to update its antitrust laws
By Richard Feloni & Andy Kiersz
There are plenty of companies that may feel too big to you, whether it’s trillion-dollar monoliths Apple and Amazon, or even the cable company you’re forced to deal with every day.
But the question of whether they’ve got so much power that they’re harming the economy is the subject of a debate in the spotlight once again.
For Nobel Prize-winning economist Joseph Stiglitz of Columbia University, there is indeed a monopoly and monopsony problem in the United States, and it’s high time to address it with new antitrust laws.
At a recent Federal Trade Commission hearing on the subject, Stiglitz said, “The point is, if our standard competitive analysis tools don’t show that there is a problem, it suggests something may be wrong with the tools themselves.”
The bedrock of America’s antitrust law was primarily built in the late 19th and early 20th century, during the democratic and reform-minded Progressive Era that followed the Gilded Age’s reign of robber barons and progression of inequality.
Even Adam Smith, the father of capitalism himself, warned in “The Wealth of Nations” against the consolidation of market power in the hands of a few. This is represented on the selling side by monopoly and on the buying side by monopsony, a term coined in the 20th century that refers to firms using their size to push down suppliers’ prices (Walmart is arguably an example).
Years of economic research has found that when market power is highly concentrated, barriers to entry prevent new competitors from building businesses, consumers have fewer options, and employees receive lower wages. This in turn slows overall economic growth.
Even before data on market power was routinely gathered, the federal government established the definition for an illegal monopoly and an illegal merger with the Sherman Act of 1890 and the Clayton Act of 1914. It also created the FTC in 1914 to enforce these rules.
Continue reading…https://www.businessinsider.com/economist-joseph-stiglitz-us-must-update-antitrust-laws-2018-9
Website USAReally is based in Moscow and has received funding from the Federal News Agency, a Russian media conglomerate with ties to the Internet Research Agency, the “troll farm” whose employees were indicted by the special counsel, Robert S. Mueller III, for interfering in the 2016 presidential election.
Caught flat-footed by the influence campaigns of 2016, intelligence agencies and tech companies in the United States have spent months looking for hidden Russian footprints ahead of the midterm elections.
USAReally’s website, which began publishing in May, does not advertise its Russian roots. But in many ways, it is operating in plain sight.
Its founder, Alexander Malkevich, is a Russian journalist with little previous experience in American media. Its domain was registered through a Russian company, and its formation was announced in a news release on the Federal News Agency’s website. The project, originally known as “USAReally, Wake Up Americans,” was intended to promote “information and problems that are hushed up by major American publications controlled by the political elite of the United States,” according to the release.
Today, USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Full article: https://www.nytimes.com/2018/09/25/technology/usareally-russian-news-site-propaganda.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Caught flat-footed by the influence campaigns of 2016, intelligence agencies and tech companies in the United States have spent months looking for hidden Russian footprints ahead of the midterm elections.
USAReally’s website, which began publishing in May, does not advertise its Russian roots. But in many ways, it is operating in plain sight.
Its founder, Alexander Malkevich, is a Russian journalist with little previous experience in American media. Its domain was registered through a Russian company, and its formation was announced in a news release on the Federal News Agency’s website. The project, originally known as “USAReally, Wake Up Americans,” was intended to promote “information and problems that are hushed up by major American publications controlled by the political elite of the United States,” according to the release.
Today, USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Full article: https://www.nytimes.com/2018/09/25/technology/usareally-russian-news-site-propaganda.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Russia-sponsored US TV
Clandestine Russian government efforts to spread disruptive information in the US have gotten great attention, but other Russian government sponsored efforts are in plain sight. One example is website USAReally, as discussed in the NY Times article above. The NY Times says that USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Another Russian government sponsored media outlet in plain site is RT. Wikipedia says that RT is a Russian international television network funded by the Russian government. It operates cable and satellite television channels directed to audiences outside of Russia, as well as providing Internet content in English, Spanish, French, German, Arabic and Russian.
Here is an interesting example of RT content, a segment explaining how US voting machines can be hacked. See https://www.youtube.com/watch?v=fmM2xkeyPI0
In some ways the RT segment resembles the NY Times discussion of vulnerable US voting machines that appears below, but the RT piece is different. It is more alarmist in tone, and arguably exaggerates the likelihood of people physically engaging with voting machines to insert compromising devices.
The RT voting machine story reflects a propaganda strategy of some interest and complexity. The story suggests that the US government is fumbling in its efforts to protect voting rights, which has the ring of a Russian propaganda point. But the story is not stupid, working from concerns that have a basis in a reality of voting machine problems, as discussed by the New York Times article that follows.
Posting by Don Allen Resnikoff, who is entirely responsible for the content
Clandestine Russian government efforts to spread disruptive information in the US have gotten great attention, but other Russian government sponsored efforts are in plain sight. One example is website USAReally, as discussed in the NY Times article above. The NY Times says that USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Another Russian government sponsored media outlet in plain site is RT. Wikipedia says that RT is a Russian international television network funded by the Russian government. It operates cable and satellite television channels directed to audiences outside of Russia, as well as providing Internet content in English, Spanish, French, German, Arabic and Russian.
Here is an interesting example of RT content, a segment explaining how US voting machines can be hacked. See https://www.youtube.com/watch?v=fmM2xkeyPI0
In some ways the RT segment resembles the NY Times discussion of vulnerable US voting machines that appears below, but the RT piece is different. It is more alarmist in tone, and arguably exaggerates the likelihood of people physically engaging with voting machines to insert compromising devices.
The RT voting machine story reflects a propaganda strategy of some interest and complexity. The story suggests that the US government is fumbling in its efforts to protect voting rights, which has the ring of a Russian propaganda point. But the story is not stupid, working from concerns that have a basis in a reality of voting machine problems, as discussed by the New York Times article that follows.
Posting by Don Allen Resnikoff, who is entirely responsible for the content
NYT: Vulnerable US voting machines
There are roughly 350,000 voting machines in use in the country today, all of which fall into one of two categories: optical-scan machines or direct-recording electronic machines. Each of them suffers from significant security problems.
With optical-scan machines, voters fill out paper ballots and feed them into a scanner, which stores a digital image of the ballot and records the votes on a removable memory card. The paper ballot, in theory, provides an audit trail that can be used to verify digital tallies. But not all states perform audits, and many that do simply run the paper ballots through a scanner a second time. Fewer than half the states do manual audits, and they typically examine ballots from randomly chosen precincts in a county, instead of a percentage of ballots from all precincts. If the randomly chosen precincts aren’t ones where hacking occurred or where machines failed to accurately record votes, an audit won’t reveal anything — nor will it always catch problems with early-voting, overseas or absentee ballots, all of which are often scanned in county election offices, not in precincts.
Direct-recording electronic machines, or D.R.E.s, present even more auditing problems. Voters use touch screens or other input devices to make selections on digital-only ballots, and votes are stored electronically. Many D.R.E.s have printers that produce what’s known as a voter-verifiable paper audit trail — a scroll of paper, behind a window, that voters can review before casting their ballots. But the paper trail doesn’t provide the same integrity as full-size ballots and optical-scan machines, because a hacker could conceivably rig the machine to print a voter’s selections correctly on the paper while recording something else on the memory card. About 80 percent of voters today cast ballots either on D.R.E.s that produce a paper trail or on scanned paper ballots. But five states still use paperless D.R.E.s exclusively, and an additional 10 states use paperless D.R.E.s in some jurisdictions.
The voting-machine industry — an estimated $300-million-a-year business — has long been as troubling as the machines it makes, known for its secrecy, close political ties (overwhelmingly to the Republican Party) and a revolving door between vendors and election offices. More than a dozen companies currently sell voting equipment, but a majority of machines used today come from just four — Diebold Election Systems, Election Systems & Software (ES&S), Hart InterCivic and Sequoia Voting Systems. Diebold (later renamed Premier) and Sequoia are now out of business. Diebold’s machines and customer contracts were sold to ES&S and a Canadian company called Dominion, and Dominion also acquired Sequoia. This means that more than 80 percent of the machines in use today are under the purview of three companies — Dominion, ES&S and Hart InterCivic.
Many of the products they make have documented vulnerabilities and can be subverted in multiple ways. Hackers can access voting machines via the cellular modems used to transmit unofficial results at the end of an election, or subvert back-end election-management systems — used to program the voting machines and tally votes — and spread malicious code to voting machines through them. Attackers could design their code to bypass pre-election testing and kick in only at the end of an election or under specific conditions — say, when a certain candidate appears to be losing — and erase itself afterward to avoid detection. And they could make it produce election results with wide margins to avoid triggering automatic manual recounts in states that require them when results are close.
From: https://www.nytimes.com/2018/09/26/magazine/election-security-crisis-midterms.html?action=click&module=Top%20Stories&pgtype=Homepage
There are roughly 350,000 voting machines in use in the country today, all of which fall into one of two categories: optical-scan machines or direct-recording electronic machines. Each of them suffers from significant security problems.
With optical-scan machines, voters fill out paper ballots and feed them into a scanner, which stores a digital image of the ballot and records the votes on a removable memory card. The paper ballot, in theory, provides an audit trail that can be used to verify digital tallies. But not all states perform audits, and many that do simply run the paper ballots through a scanner a second time. Fewer than half the states do manual audits, and they typically examine ballots from randomly chosen precincts in a county, instead of a percentage of ballots from all precincts. If the randomly chosen precincts aren’t ones where hacking occurred or where machines failed to accurately record votes, an audit won’t reveal anything — nor will it always catch problems with early-voting, overseas or absentee ballots, all of which are often scanned in county election offices, not in precincts.
Direct-recording electronic machines, or D.R.E.s, present even more auditing problems. Voters use touch screens or other input devices to make selections on digital-only ballots, and votes are stored electronically. Many D.R.E.s have printers that produce what’s known as a voter-verifiable paper audit trail — a scroll of paper, behind a window, that voters can review before casting their ballots. But the paper trail doesn’t provide the same integrity as full-size ballots and optical-scan machines, because a hacker could conceivably rig the machine to print a voter’s selections correctly on the paper while recording something else on the memory card. About 80 percent of voters today cast ballots either on D.R.E.s that produce a paper trail or on scanned paper ballots. But five states still use paperless D.R.E.s exclusively, and an additional 10 states use paperless D.R.E.s in some jurisdictions.
The voting-machine industry — an estimated $300-million-a-year business — has long been as troubling as the machines it makes, known for its secrecy, close political ties (overwhelmingly to the Republican Party) and a revolving door between vendors and election offices. More than a dozen companies currently sell voting equipment, but a majority of machines used today come from just four — Diebold Election Systems, Election Systems & Software (ES&S), Hart InterCivic and Sequoia Voting Systems. Diebold (later renamed Premier) and Sequoia are now out of business. Diebold’s machines and customer contracts were sold to ES&S and a Canadian company called Dominion, and Dominion also acquired Sequoia. This means that more than 80 percent of the machines in use today are under the purview of three companies — Dominion, ES&S and Hart InterCivic.
Many of the products they make have documented vulnerabilities and can be subverted in multiple ways. Hackers can access voting machines via the cellular modems used to transmit unofficial results at the end of an election, or subvert back-end election-management systems — used to program the voting machines and tally votes — and spread malicious code to voting machines through them. Attackers could design their code to bypass pre-election testing and kick in only at the end of an election or under specific conditions — say, when a certain candidate appears to be losing — and erase itself afterward to avoid detection. And they could make it produce election results with wide margins to avoid triggering automatic manual recounts in states that require them when results are close.
From: https://www.nytimes.com/2018/09/26/magazine/election-security-crisis-midterms.html?action=click&module=Top%20Stories&pgtype=Homepage
Low price association health plans spark tussle between state regulators, business groups
By Harris Meyer | September 27, 2018
Some business associations and insurers are plunging ahead in launching a cheaper type of health plan newly permitted by the Trump administration, while others are holding back due to big regulatory and legal uncertainties about the future of these products.
Since the U.S. Department of Labor issued a final rule in June allowing small employers and self-employers to band together across state lines and form to association health plans (AHPs), there have been intensive discussions between business groups, state insurance commissioners and Labor Department officials about how states can regulate these plans.
Pennsylvania Insurance Commissioner Jessica Altman has taken the position that AHPs must comply with state laws and Affordable Care Act provisions governing individual and small group plans. The Labor Department wrote to Altman last month to say the rule "does not modify the states' existing authority to regulate AHPs under state insurance laws."
She and other state insurance regulators fret that the growth of AHPs will destabilize their ACA-regulated individual and small-group markets, leave consumers uncovered for healthcare services they need and lead to a spike in insurance fraud and insolvencies associated with lightly regulated AHPs in the past.
But a coalition of 10 business associations, including the National Federation of Independent Business, argue that federal law does not allow states to bar groups of employers from forming association health plans together.
Association plans are deemed large-group plans exempt from state regulation under the federal Employee Retirement Income Security Act.
Earlier this month, the Nebraska Farm Bureau and Medica announced they were teaming up to offer a menu of association health plans in 2019 for individual farmers, ranchers and small agriculture-related businesses. The plans will have essentially the same benefits as ACA market plans with premium savings of up to 25%, they say. Rates will vary based on age, geographic location, and type of business.
"We hear stories every day about how farmers and ranchers are struggling to provide affordable coverage for their families," said Steve Nelson, president of the Nebraska Farm Bureau. "That's what drove us to put this together."
The Nebraska Department of Insurance said other business groups also have applied to start AHPs.
In August, three chambers of commerce in Nevada announced they would offer an association health plan through UnitedHealth Group that will aggregate small firms into one large-group plan, though they initially aren't making it available to sole proprietor businesses.
But other associations say they're taking a wait-and-see stance, citing resistance to the AHP rule from many state insurance commissioners, combined with a federal lawsuit filed in July by 12 Democratic attorneys general to block the rule.
"We wanted to jump on it fast, and then the states sued," said Chris Paulitz, senior vice president of membership and marketing for the Financial Services Institute, an association representing nearly 30,000 self-employed individual financial advisers. "There's too much up in the air from a legal standpoint."
Since the rule was issued, a number of state insurance departments have issued emergency rules and bulletins limiting AHPs or highlighting existing state laws that prohibit key features of plans allowed under the new federal rule.
Several states, including Connecticut, Massachusetts, New York, Oregon and Pennsylvania, have said they will look at the small employers and individuals signing up for AHPs and apply state and ACA rules for small-group and individual coverage to them, essentially nullifying the AHP structure.
In a Sept. 10 bulletin, the Oregon Division of Financial Regulation said it would follow more demanding federal guidelines issued in 2011 for determining bona fide association plans that qualify for an ERISA exemption from state insurance requirements.
Regulators in Connecticut, Maryland, Massachusetts and New York are taking an even harder line. They say their state laws permit no exception for bona fide association plans, meaning that none qualify for an ERISA exemption.
In contrast, the Nebraska Department of Insurance fully recognizes the Trump administration's new AHP rule, including allowing sole proprietors to join association plans. Its officials say they aren't worried about AHPs drawing younger and healthier people out of the Affordable Care Act market and driving up premiums because the new plans likely will attract mostly consumers who already have dropped out of the ACA market due to high premiums.
Laura Arp, the department's life and health administrator, noted that consumer protection provisions in the Affordable Care Act and state law still apply to AHPs, including rules prohibiting annual and lifetime benefit caps and discrimination against people with pre-existing medical conditions.
From: http://www.modernhealthcare.com/article/20180927/NEWS/180929912?utm_source=modernhealthcare&utm_medium=email&utm_content=20180927-NEWS-180929912&utm_campaign=am
From: Department of Justice
U.S. Attorney’s Office
Eastern District of New York
FOR IMMEDIATE RELEASE
Tuesday, September 25, 2018
Queens Attorney and Second Individual Indicted For Scheme to Bribe a Witness in Double Homicide Trial on Long Island
A superseding indictment was unsealed today in federal court in Brooklyn charging Queens-based criminal defense attorney John Scarpa, Jr., and Charles Gallman, also known as “T.A.,” with violating the Travel Act by bribing a witness who testified in a double-homicide trial in Suffolk County Supreme Court. Scarpa was arrested earlier today and will be arraigned this afternoon in federal court in Brooklyn before United States Magistrate Judge Steven L. Tiscione. Gallman will be arraigned at a later date.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Richard A. Brown, District Attorney of Queens County, announced the charges.
“As alleged, the defendants bribed a witness to commit perjury in an effort to help Scarpa’s client, who had committed two execution-style murders, escape justice,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will never tolerate the rigging of a trial and will vigorously prosecute attorneys or anyone else who seeks to undermine the integrity of the judicial process by witness tampering.” Mr. Donoghue also expressed his grateful appreciation to the Office of the Suffolk County District Attorney for its assistance during the investigation.
“Defense attorneys do all they can to help their clients fight criminal charges, which is everyone’s right by law,” stated FBI Assistant Director-in-Charge Sweeney. “However, Mr. Scarpa allegedly broke the law trying to get his client off the hook for murder charges by bribing a witness. Everyone accused deserves the best defense, but attorneys cannot use illegal methods to win in court.”
“We will continue to work with our federal partners to root out corruption in the criminal justice system wherever it is found,” stated Queens District Attorney Brown. “I will say again that integrity is the foundation of our criminal justice system. These allegations go to the core of that foundation and are prejudicial to the administration of justice. The charges today send a strong message to those who would undermine that integrity that they will be held accountable. I commend the United States Attorney’s Office for the Eastern District and the Federal Bureau of Investigation, the Suffolk County District Attorney’s Office and my Rackets, Special Victims and District Attorney’s Detective Bureaus for their vigorous pursuit of justice in this matter.”
As alleged in the indictment and detailed in court filings, the charges stem from an investigation conducted by the Queens County District Attorney’s Office. Court-authorized intercepted communication between Scarpa and Gallman showed how the two men plotted to bribe a witness, Luis Cherry, in a Suffolk County criminal trial against Reginald Ross. Scarpa represented Ross, who was ultimately convicted of the unrelated murders of two men: Raymond Hirt, a road crew flagman killed at his jobsite in May 2010 because Ross was upset about traffic, and John Williams, whom he shot to death in October 2010 as Williams was going to work, mistaking Williams for his brother. Cherry participated in the Williams murder, and had pleaded guilty to that murder as well as another.
On January 13, 2015, Gallman visited Cherry at Downstate Correctional Facility and spoke to him about testifying at Ross’s trial. Thereafter, Gallman reported to Scarpa: “Anything we need, he’s willing. Whichever way you wanna play it, he’s willing.” Later in the conversation Scarpa asked, “So this guy is willing to do whatever?” And Gallman confirmed, “Whatever you need, John. Whatever you need.” Gallman added that there was a “bunch of stuff I wrote down that [Cherry] wants.”
Scarpa called Cherry as a defense witness at trial and led Cherry through perjurious testimony relevant to the Williams murder. For example, Cherry claimed that he had committed the murder alone after he crawled from the driver’s seat and exited through the passenger side of his vehicle with firearms in both hands despite physical evidence that clearly indicated two gunmen were involved. When asked on cross-examination about meeting Gallman, Cherry falsely denied that they had talked about the murder case.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Scarpa and Gallman face up to five years’ imprisonment on each count.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Lindsay K. Gerdes and Andrey Spektor are in charge of the prosecution.
from https://www.justice.gov/usao-edny/pr/queens-attorney-and-second-individual-indicted-scheme-bribe-witness-double-homicide
U.S. Attorney’s Office
Eastern District of New York
FOR IMMEDIATE RELEASE
Tuesday, September 25, 2018
Queens Attorney and Second Individual Indicted For Scheme to Bribe a Witness in Double Homicide Trial on Long Island
A superseding indictment was unsealed today in federal court in Brooklyn charging Queens-based criminal defense attorney John Scarpa, Jr., and Charles Gallman, also known as “T.A.,” with violating the Travel Act by bribing a witness who testified in a double-homicide trial in Suffolk County Supreme Court. Scarpa was arrested earlier today and will be arraigned this afternoon in federal court in Brooklyn before United States Magistrate Judge Steven L. Tiscione. Gallman will be arraigned at a later date.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Richard A. Brown, District Attorney of Queens County, announced the charges.
“As alleged, the defendants bribed a witness to commit perjury in an effort to help Scarpa’s client, who had committed two execution-style murders, escape justice,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will never tolerate the rigging of a trial and will vigorously prosecute attorneys or anyone else who seeks to undermine the integrity of the judicial process by witness tampering.” Mr. Donoghue also expressed his grateful appreciation to the Office of the Suffolk County District Attorney for its assistance during the investigation.
“Defense attorneys do all they can to help their clients fight criminal charges, which is everyone’s right by law,” stated FBI Assistant Director-in-Charge Sweeney. “However, Mr. Scarpa allegedly broke the law trying to get his client off the hook for murder charges by bribing a witness. Everyone accused deserves the best defense, but attorneys cannot use illegal methods to win in court.”
“We will continue to work with our federal partners to root out corruption in the criminal justice system wherever it is found,” stated Queens District Attorney Brown. “I will say again that integrity is the foundation of our criminal justice system. These allegations go to the core of that foundation and are prejudicial to the administration of justice. The charges today send a strong message to those who would undermine that integrity that they will be held accountable. I commend the United States Attorney’s Office for the Eastern District and the Federal Bureau of Investigation, the Suffolk County District Attorney’s Office and my Rackets, Special Victims and District Attorney’s Detective Bureaus for their vigorous pursuit of justice in this matter.”
As alleged in the indictment and detailed in court filings, the charges stem from an investigation conducted by the Queens County District Attorney’s Office. Court-authorized intercepted communication between Scarpa and Gallman showed how the two men plotted to bribe a witness, Luis Cherry, in a Suffolk County criminal trial against Reginald Ross. Scarpa represented Ross, who was ultimately convicted of the unrelated murders of two men: Raymond Hirt, a road crew flagman killed at his jobsite in May 2010 because Ross was upset about traffic, and John Williams, whom he shot to death in October 2010 as Williams was going to work, mistaking Williams for his brother. Cherry participated in the Williams murder, and had pleaded guilty to that murder as well as another.
On January 13, 2015, Gallman visited Cherry at Downstate Correctional Facility and spoke to him about testifying at Ross’s trial. Thereafter, Gallman reported to Scarpa: “Anything we need, he’s willing. Whichever way you wanna play it, he’s willing.” Later in the conversation Scarpa asked, “So this guy is willing to do whatever?” And Gallman confirmed, “Whatever you need, John. Whatever you need.” Gallman added that there was a “bunch of stuff I wrote down that [Cherry] wants.”
Scarpa called Cherry as a defense witness at trial and led Cherry through perjurious testimony relevant to the Williams murder. For example, Cherry claimed that he had committed the murder alone after he crawled from the driver’s seat and exited through the passenger side of his vehicle with firearms in both hands despite physical evidence that clearly indicated two gunmen were involved. When asked on cross-examination about meeting Gallman, Cherry falsely denied that they had talked about the murder case.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Scarpa and Gallman face up to five years’ imprisonment on each count.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Lindsay K. Gerdes and Andrey Spektor are in charge of the prosecution.
from https://www.justice.gov/usao-edny/pr/queens-attorney-and-second-individual-indicted-scheme-bribe-witness-double-homicide
Proposal to Limit the Anti-Competitive Power of Institutional Investors
Last revised: 1 Nov 2017
Eric A. Posner University of Chicago - Law School
Fiona M. Scott Morton Yale School of Management; National Bureau of Economic Research (NBER)
E. Glen Weyl Microsoft Research New York City; Princeton University - Julis Rabinowitz Center for Public Policy and Finance
Abstract
Recent scholarship has shown that institutional investors may cause softer competition among product market rivals because of their significant ownership stakes in competing firms in concentrated industries. However, while calls for litigation against them under Section 7 of the Clayton Act are understandable, private or indiscriminate government litigation could also cause significant disruption to equity markets because of its inherent unpredictability and would fail to eliminate most of the harms from common ownership.
To minimize this disruption while achieving competitive conditions in oligopolistic markets, the Department of Justice and the Federal Trade Commission should take the lead by adopting a public enforcement policy of the Clayton Act against institutional investors. Investors in firms in well-defined oligopolistic industries would benefit from a safe harbor from government enforcement of the Clayton Act if they either limit their holdings of an industry to a small stake (no more than 1% of the total size of the industry) or hold the shares of only a single “effective firm” per industry. Free-standing index funds that commit to pure passivity would not be limited in size.
Using simulations based on empirical evidence, we show that under broad assumptions this policy would generate many times larger competitive gains than harms to diversification and other values. The policy would also improve corporate governance by institutional investors.
Citation:
Posner, Eric A. and Scott Morton, Fiona M. and Weyl, E. Glen, A Proposal to Limit the Anti-Competitive Power of Institutional Investors (March 22, 2017). Antitrust Law Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2872754 or http://dx.doi.org/10.2139/ssrn.2872754
Last revised: 1 Nov 2017
Eric A. Posner University of Chicago - Law School
Fiona M. Scott Morton Yale School of Management; National Bureau of Economic Research (NBER)
E. Glen Weyl Microsoft Research New York City; Princeton University - Julis Rabinowitz Center for Public Policy and Finance
Abstract
Recent scholarship has shown that institutional investors may cause softer competition among product market rivals because of their significant ownership stakes in competing firms in concentrated industries. However, while calls for litigation against them under Section 7 of the Clayton Act are understandable, private or indiscriminate government litigation could also cause significant disruption to equity markets because of its inherent unpredictability and would fail to eliminate most of the harms from common ownership.
To minimize this disruption while achieving competitive conditions in oligopolistic markets, the Department of Justice and the Federal Trade Commission should take the lead by adopting a public enforcement policy of the Clayton Act against institutional investors. Investors in firms in well-defined oligopolistic industries would benefit from a safe harbor from government enforcement of the Clayton Act if they either limit their holdings of an industry to a small stake (no more than 1% of the total size of the industry) or hold the shares of only a single “effective firm” per industry. Free-standing index funds that commit to pure passivity would not be limited in size.
Using simulations based on empirical evidence, we show that under broad assumptions this policy would generate many times larger competitive gains than harms to diversification and other values. The policy would also improve corporate governance by institutional investors.
Citation:
Posner, Eric A. and Scott Morton, Fiona M. and Weyl, E. Glen, A Proposal to Limit the Anti-Competitive Power of Institutional Investors (March 22, 2017). Antitrust Law Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2872754 or http://dx.doi.org/10.2139/ssrn.2872754
Do Institutional Investors Suppress Competition?
By Vito J. Racanelli
Can institutional investing have anticompetitive effects? I’m still not convinced.
The idea, known as the common-ownership theory, received another airing at a panel debate at the Harvard Club Monday. As Barron’s recently wrote, the model is based on studies of airlines and banks that suggest when groups of big investors such as index or mutual funds hold material equity stakes in several companies in the same industry, they can foster behavior such as consumer price increases that improves the profits of the companies they own.
Panelist Douglas H. Ginsburg, a judge on the District of Columbia US Court of Appeals and a well-known critic of the theory, said that those who argue common ownership runs afoul of antitrust regulation are “opportunistically naïve” to believe laws such as the Sherman Ant-Trust Act and the Clayton Act are aimed at ownership by large asset managers. Those who argue the contrary, he said, aren’t interpreting the law consistently with what it intends.
Continue reading…https://www.barrons.com/articles/do-big-investors-push-the-antitrust-envelope-1537220418
By Vito J. Racanelli
Can institutional investing have anticompetitive effects? I’m still not convinced.
The idea, known as the common-ownership theory, received another airing at a panel debate at the Harvard Club Monday. As Barron’s recently wrote, the model is based on studies of airlines and banks that suggest when groups of big investors such as index or mutual funds hold material equity stakes in several companies in the same industry, they can foster behavior such as consumer price increases that improves the profits of the companies they own.
Panelist Douglas H. Ginsburg, a judge on the District of Columbia US Court of Appeals and a well-known critic of the theory, said that those who argue common ownership runs afoul of antitrust regulation are “opportunistically naïve” to believe laws such as the Sherman Ant-Trust Act and the Clayton Act are aimed at ownership by large asset managers. Those who argue the contrary, he said, aren’t interpreting the law consistently with what it intends.
Continue reading…https://www.barrons.com/articles/do-big-investors-push-the-antitrust-envelope-1537220418
From NYT and ProPublica:
Sloan Kettering’s Cozy Deal With Start-Up
At Memorial Sloan Kettering Cancer Center in Manhattan, doctors and staff objected to a for-profit venture that could be lucrative for a few leading researchers and board members
The company, Paige.AI, is one in a burgeoning field of start-ups that are applying artificial intelligence to health care, yet it has an advantage over many competitors: The company has an exclusive deal to use the cancer center’s vast archive of 25 million patient tissue slides, along with decades of work by its world-renowned pathologists.
Memorial Sloan Kettering holds an equity stake in Paige.AI, as does a member of the cancer center’s executive board, the chairman of its pathology department and the head of one of its research laboratories. Three other board members are investors.
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The arrangement has sparked considerable turmoil among doctors and scientists at Memorial Sloan Kettering, which has intensified in the wake of an investigation by ProPublica and The New York Times into the failures of its chief medical officer, Dr. José Baselga, to disclose some of his financial ties to the health and drug industries in dozens of research articles. He resigned last week, and Memorial Sloan Kettering’s chief executive, Dr. Craig B. Thompson, announced a new task force on Monday to review the center’s conflict-of-interest policies.
Article at https://www.nytimes.com/2018/09/20/health/memorial-sloan-kettering-cancer-paige-ai.html?action=click&module=Top%20Stories&pgtype=Homepage
Sloan Kettering’s Cozy Deal With Start-Up
At Memorial Sloan Kettering Cancer Center in Manhattan, doctors and staff objected to a for-profit venture that could be lucrative for a few leading researchers and board members
- An artificial intelligence start-up founded by three insiders at Memorial Sloan Kettering Cancer Center debuted with great fanfare in February, with $25 million in venture capital and the promise that it might one day transform how cancer is diagnosed.
The company, Paige.AI, is one in a burgeoning field of start-ups that are applying artificial intelligence to health care, yet it has an advantage over many competitors: The company has an exclusive deal to use the cancer center’s vast archive of 25 million patient tissue slides, along with decades of work by its world-renowned pathologists.
Memorial Sloan Kettering holds an equity stake in Paige.AI, as does a member of the cancer center’s executive board, the chairman of its pathology department and the head of one of its research laboratories. Three other board members are investors.
Advertisement
The arrangement has sparked considerable turmoil among doctors and scientists at Memorial Sloan Kettering, which has intensified in the wake of an investigation by ProPublica and The New York Times into the failures of its chief medical officer, Dr. José Baselga, to disclose some of his financial ties to the health and drug industries in dozens of research articles. He resigned last week, and Memorial Sloan Kettering’s chief executive, Dr. Craig B. Thompson, announced a new task force on Monday to review the center’s conflict-of-interest policies.
Article at https://www.nytimes.com/2018/09/20/health/memorial-sloan-kettering-cancer-paige-ai.html?action=click&module=Top%20Stories&pgtype=Homepage
The EU is checking how Amazon gathers information on sales made by competitors on Amazon Marketplace
The concern is that the information gives Amazon an edge when it sells to customers, EU Competition Commissioner Margrethe Vestager told reporters at a press conference in Brussels.
While she stressed that the EU investigation of Amazon is at a very early stage, she said her team is “trying to understand this issue in full."
“The question here is about the data” Amazon collects from smaller merchants on its site, Vestager said. “Do you then also use this data to do your own calculations, as to what is the new big thing, what is it that people want, what kind of offers do they like to receive, what makes them buy things? That has made us start a preliminary” investigation, she said.
From https://www.bloomberg.com/news/articles/2018-09-19/amazon-probed-by-eu-on-data-collection-from-rival-retailers
From DMN:
Ticketmaster Is Working Hand-In-Hand With Scalpers, Undercover Investigation Reveals
A new undercover investigation from CBC News and the Toronto Star has revealed what customers have long-suspected: Ticketmaster is working hand-in-hand with scalpers.
Back in July, the CBC sent reporters undercover to Ticket Summit 2018 in Las Vegas, which is a convention designed for live entertainment industry executives. The reporters posed as scalpers with hidden cameras attached to their bodies while recording themselves being pitched on Ticketmaster’s professional reseller program.
That members-only program is called TradeDesk, billed as ‘The Most Power Ticket Sales Tool. Ever.”
The story continues here: .https://www.digitalmusicnews.com/2018/09/19/ticketmaster-supports-scalpers/
Ticketmaster Is Working Hand-In-Hand With Scalpers, Undercover Investigation Reveals
A new undercover investigation from CBC News and the Toronto Star has revealed what customers have long-suspected: Ticketmaster is working hand-in-hand with scalpers.
Back in July, the CBC sent reporters undercover to Ticket Summit 2018 in Las Vegas, which is a convention designed for live entertainment industry executives. The reporters posed as scalpers with hidden cameras attached to their bodies while recording themselves being pitched on Ticketmaster’s professional reseller program.
That members-only program is called TradeDesk, billed as ‘The Most Power Ticket Sales Tool. Ever.”
The story continues here: .https://www.digitalmusicnews.com/2018/09/19/ticketmaster-supports-scalpers/
Statement of the Department of Justice Antitrust Division on the Closing of Its Investigation of the Cigna–Express Scripts Merger
September 17, 2018
Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice issued the following statement today in connection with the closing of the Division’s investigation into Cigna Corporation’s $67 billion proposed acquisition of Express Scripts Holding Co. (“ESI”):
“Quality healthcare and competitive pricing for healthcare services and pharmaceutical drugs is critical to U.S. consumers. After a thorough review of the proposed transaction, the Antitrust Division has determined that the combination of Cigna, a health insurance company, and ESI, a pharmacy benefit management (“PBM”) company, is unlikely to result in harm to competition or consumers.”
During the Antitrust Division’s comprehensive, six-month investigation, it received over two million documents, analyzed transactional data from the merging companies and other industry firms, and interviewed over 100 knowledgeable industry participants.
In particular, the Division analyzed whether the merger would: (1) substantially lessen competition in the sale of PBM services or (2) raise the cost of PBM services to Cigna’s health insurance rivals. PBM services are sold to employers and health insurance companies to manage their pharmacy benefits, which can include designing formularies, processing prescription claims, and providing access to pharmacy networks and pharmaceutical rebates.
The merger is unlikely to lessen competition substantially in the sale of PBM services because Cigna’s PBM business nationwide is small. The Division also determined that the proposed transaction is unlikely to lessen competition substantially in markets for customers because at least two other large PBM companies and several smaller PBM companies will remain in the market post-merger.
In evaluating whether the merger may harm competition for the sale of PBM services, the Division understands that Cigna intends to use ESI for PBM services and that Cigna’s current PBM services provider, UnitedHealthcare’s subsidiary Optum, will be free to compete for PBM customers that purchase medical insurance from Cigna upon closing of the transaction.
The Division also considered how the merger would affect ESI’s incentives to provide competitive PBM services to Cigna’s health insurance rivals. ESI currently sells PBM services to some of Cigna’s rivals. The merger is unlikely to enable Cigna to increase costs to Cigna’s health insurance rivals due to competition from vertically-integrated and other PBMs. The merger is unlikely to lead ESI to raise PBM prices to Cigna’s rivals because that likely would result in the merged company losing PBM customers and not result in Cigna’s gaining a sufficient volume of additional health insurance business to offset the loss of PBM customers.
Updated September 17, 2018
https://www.justice.gov/atr/closing-statement
September 17, 2018
Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice issued the following statement today in connection with the closing of the Division’s investigation into Cigna Corporation’s $67 billion proposed acquisition of Express Scripts Holding Co. (“ESI”):
“Quality healthcare and competitive pricing for healthcare services and pharmaceutical drugs is critical to U.S. consumers. After a thorough review of the proposed transaction, the Antitrust Division has determined that the combination of Cigna, a health insurance company, and ESI, a pharmacy benefit management (“PBM”) company, is unlikely to result in harm to competition or consumers.”
During the Antitrust Division’s comprehensive, six-month investigation, it received over two million documents, analyzed transactional data from the merging companies and other industry firms, and interviewed over 100 knowledgeable industry participants.
In particular, the Division analyzed whether the merger would: (1) substantially lessen competition in the sale of PBM services or (2) raise the cost of PBM services to Cigna’s health insurance rivals. PBM services are sold to employers and health insurance companies to manage their pharmacy benefits, which can include designing formularies, processing prescription claims, and providing access to pharmacy networks and pharmaceutical rebates.
The merger is unlikely to lessen competition substantially in the sale of PBM services because Cigna’s PBM business nationwide is small. The Division also determined that the proposed transaction is unlikely to lessen competition substantially in markets for customers because at least two other large PBM companies and several smaller PBM companies will remain in the market post-merger.
In evaluating whether the merger may harm competition for the sale of PBM services, the Division understands that Cigna intends to use ESI for PBM services and that Cigna’s current PBM services provider, UnitedHealthcare’s subsidiary Optum, will be free to compete for PBM customers that purchase medical insurance from Cigna upon closing of the transaction.
The Division also considered how the merger would affect ESI’s incentives to provide competitive PBM services to Cigna’s health insurance rivals. ESI currently sells PBM services to some of Cigna’s rivals. The merger is unlikely to enable Cigna to increase costs to Cigna’s health insurance rivals due to competition from vertically-integrated and other PBMs. The merger is unlikely to lead ESI to raise PBM prices to Cigna’s rivals because that likely would result in the merged company losing PBM customers and not result in Cigna’s gaining a sufficient volume of additional health insurance business to offset the loss of PBM customers.
Updated September 17, 2018
https://www.justice.gov/atr/closing-statement
What makes a monopoly in the age of Amazon?
By Lydia DePillis
It’s not often that a government agency decides to do a wholesale rethink of how to do its job. But that’s what’s happening at the Federal Trade Commission.
On Thursday, the federal watchdog tasked with protecting consumers from fraud and anti-competitive behavior kicked off a months-long series of hearings. The goal: Figuring out whether regulators need to be tougher on companies that have staked out ever-larger chunks of the markets they serve.
+ READ MORE at https://nam03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcompetitionpolicyinternational.us2.list-manage.com%2Ftrack%2Fclick%3Fu%3D66710f1b2f6afb55512135556%26id%3D620bb40a4f%26e%3Dc9725fdc15&data=02%7C01%7C%7C00eb2b99a2af4b41a8ca08d61c8f0e41%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636727798071942816&sdata=3Oz8xE%2B0X8d1FIb2IbSWJrlHgWu1SS8xjsbaCN9r2lE%3D&reserved=0
Investor expert Ray Dalio traces connection between government policies to fix the 2008 financial crash and resulting wealth disparities and political unrest that will complicate government strategies for future debt crises
In an interesting interview for Bloomberg TV, Dalio explains that recovery from the 2008 crisis involved such government policies as low interest rates and "quantitative easing," asset buying, that increase wealth disparities between rich and poor, and create political discord. That discord may interfere with government efforts to deal with a future economic crisis. Needless to say, not all experts agree with Dalio's analysis, but it is thought provoking. The URL for the interview follows.
Posted by Don Allen Resnikoff
https://www.bloomberg.com/view/articles/2018-09-12/ray-dalio-spells-out-america-s-worst-nightmare
In an interesting interview for Bloomberg TV, Dalio explains that recovery from the 2008 crisis involved such government policies as low interest rates and "quantitative easing," asset buying, that increase wealth disparities between rich and poor, and create political discord. That discord may interfere with government efforts to deal with a future economic crisis. Needless to say, not all experts agree with Dalio's analysis, but it is thought provoking. The URL for the interview follows.
Posted by Don Allen Resnikoff
https://www.bloomberg.com/view/articles/2018-09-12/ray-dalio-spells-out-america-s-worst-nightmare
The FTC is holding hearings of great interest to antitrust and consumer advocates. Here is what the FTC says it is interested in:
The Commission is especially interested in new empirical research that indicates (or contraindicates) a causal relationship with respect to any of the topics identified for comment. Upon review and consideration of a public comment highlighting such research, the Commission may request the voluntary sharing of the data and models underlying the comment, in accordance with general principles of peer review of social scientific inquiry, and consistent with confidentiality or other limitations on the sharing of such data.
Commenters are invited to address one or more of the following topics generally, or with respect to a specific industry, such as the health care,5 high-tech6, or energy7 industries.
1) The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings. Of particular interest to the Commission: (a) the continued viability of the consumer welfare standard for antitrust law enforcement and policy; (b) economic analysis and evidence on market competitiveness, enforcement policy, and the effects of past FTC enforcement decisions; (c) the identification of new developments in markets and in business-to-business or business-to-consumer relationships; (d) the benefits and costs associated with the growth of international competition and consumer protection enforcement regimes; and (e) the advisory and advocacy role of the FTC regarding enforcement efforts by competition and consumer protection
agencies outside the United States, when such efforts have a direct effect on important U.S. interests. Comments filed in electronic form should be submitted using this link.
2) Competition and consumer protection issues in communication, information, and media technology networks. FTC staff’s 1996 Competition Policy in the New High-Tech Global Marketplace report8 discussed the competitive analysis of both unilateral and joint conduct in industries subject to network effects; and FTC staff’s 2007 Broadband Connectivity and Competition Policy report9 addressed similar issues in the broadband internet access service market. Of particular interest to the Commission: (a) whether contemporary industry practices in networked industries continue to present competition and consumer protection concerns like those discussed in the prior reports; (b) the welfare effects of regulatory intervention to promote standardization and interoperability; (c) the application of the FTC’s Section 5 authority to the broadband internet access service business; and (d) unique competition and consumer protection issues associated with internet and online commerce. Comments filed in electronic form should be submitted using this link.
3) The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses.10 Of particular interest to the Commission: (a) whether the platform business model has unique implications for antitrust and consumer protection law enforcement and policy; and (b) whether and how the presence of “network effects” should affect the Commission’s analysis of competition and consumer protection issues in these markets. Comments filed in electronic form should be submitted using this link.
4) The intersection between privacy, big data, and competition.11 Of particular interest to the Commission: (a) data as a dimension of competition, and/or as an impediment to entry into or expansion within a relevant market; (b) competition on privacy and data security attributes (between, for example, social media companies or app developers), and the importance of this competition to consumers and users; (c) whether consumers prefer free/ad-supported products to products offering similar services or capabilities but that are neither free nor adsupported; (d) the benefits and costs of privacy laws and regulations, including the effect of such regulations on innovation, product offerings, and other dimensions of competition and consumer protection; (e) the benefits and costs of varying state, federal and international privacy laws and regulations, including the conflicts associated with those standards; and (f) competition and consumer protection implications of use and location tracking mechanisms. Comments filed in electronic form should be submitted using this link.
5) The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters. Of particular interest to the Commission: (a) the efficacy of the Commission’s use of its current remedial authority; and (b) the identification of any additional tools or authorities the Commission may need to adequately deter unfair and deceptive conduct related to privacy and data security. Comments filed in electronic form should be submitted using this link.
6) Evaluating the competitive effects of corporate acquisitions and mergers. Of particular interest to the Commission: (a) the economic and legal analysis of vertical and conglomerate mergers; (b) whether the doctrine of potential competition is sufficient to identify and analyze the competitive effects (if any) associated with the acquisition of a firm that may be a nascent competitive threat; (c) the analysis of acquisitions and holding of a non-controlling ownership interest in competing companies; (d) the identification and evaluation of the exercise of monopsony power and buyer-power as arising from consolidation; (e) the identification and evaluation of differentiated but potentially competing technologies, and of disruptive or generational changes in technology, and how such technologies affect competitive effects analysis; and (f) empirical validation of the analytical tools used to evaluate acquisitions and mergers (e.g., models of upward pricing pressure, gross upward pricing pressure, net innovation pressure, critical loss analysis, compensating marginal cost reduction, merger simulation, natural experiments, and empirical estimation of demand systems). Comments filed in electronic form should be submitted using this link.
7) The evidence and analysis of monopsony power, including but not limited to, in labor markets. Of particular interest to the Commission: (a) the analytic framework applied to conduct and transactions that negatively or positively affect competition between employers as buyers in labor markets; (b) evidence regarding the existence and exercise of buyer monopsony or market power in properly defined markets, including by employers in labor markets; (c) the exercise of monopsony power through collusion, including in labor markets through employer collusion; and (d) the use of non-competition agreements and the conditions under which their use may be inconsistent with the antitrust laws. Comments filed in electronic form should be submitted using this link.
8) The role of intellectual property and competition policy in promoting innovation. The Commission has taken a dual-pronged approach to issues arising at the intersection of intellectual property and antitrust law: (1) antitrust enforcement against harmful business conduct involving intellectual property; and (2) competition advocacy regarding the development of intellectual property law. The Commission has articulated its enforcement positions in a number of public documents, including the joint Commission and Department of Justice 2017 Antitrust Guidelines for the Licensing of Intellectual Property12 and 2007 Antitrust Enforcement and Intellectual Property Rights report.13 The Commission has engaged in substantial competition advocacy with respect to the legal and policy regime related to intellectual property rights, including its three “IP” reports: the 2003 To Promote Innovation14 report, the 2011 Evolving IP Marketplace15 report, and the 2016 Patent Assertion Entity Activity16 report. Of particular interest to the Commission: (a) the adoption and utilization of novel business practices (beyond those addressed in the Commission’s prior guidance and actions)17 with respect to obtaining or enforcing intellectual property rights, where such practices may be inconsistent with the antitrust laws; (b) identification of contemporary patent doctrine that substantially affects innovation and raises the greatest challenges for competition policy; (c) evaluation of intellectual property litigation in competitive effects analysis; and (d) evaluation of efficiencies and entry considerations in technology markets in merger analysis. Comments filed in electronic form should be submitted using this link.
9) The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics. Of particular interest to the Commission: (a) the welfare effects and privacy implications associated with the application of these technologies to consumer advertising and marketing campaigns; (b) the welfare implications associated with use of these technologies in the determination of a firm’s pricing and output decisions; and (c) whether restrictions on the use of computer and machine learning and data analytics affect innovation or consumer rights and opportunities in existing or future markets, or in the development of new business models. Comments filed in electronic form should be submitted using this link.
10) The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices. Of particular interest to the Commission: (a) whether and to what extent other enforcement entities authorized to prosecute unfair or deceptive acts and practices apply FTC precedent in their enforcement efforts; and (b) whether the Commission can, and to what extent it should, take steps to promote harmonization between the FTC Act and similar statutes. Comments filed in electronic form should be submitted using this link.
11) The agency’s investigation, enforcement and remedial processes. Of particular interest to the Commission: (a) whether the agency’s investigative process can be improved without diminishing the ability of the Commission to identify and prosecute prohibited conduct; (b) the extent to which the Commission’s Part 3 process facilitates timely and efficient administrative litigation; (c) the efficacy of the Commission’s current use of its remedial authority; and (d) willingness of affected parties to cooperate with the Commission in conducting postinvestigation and enforcement retrospectives. Comments filed in electronic form should be submitted using this link.
From:https://www.ftc.gov/system/files/attachments/hearings-competition-consumer-protection-21st-century/hearings-announcement_0.pdf
Broadcast email from DC AG Racine: student loan litigation
Last year, I sued the U.S. Department of Education for delaying a rule that would make it easier for students to get their loans forgiven when their school is proven to have defrauded students. This week, a federal judge ruled that the Trump administration’s move to delay this student protection was illegal.
This ruling is a victory for student borrowers, especially here in the District which has the highest student debts in the nation. On average, District borrowers owe more than $46,000 in federal student loans and more than 1-in-4 student borrowers owe over $80,000. With soaring debt here and across the nation, our struggling borrowers need robust protections against predatory schools that try to cheat them.
To preserve another critical student borrower protection, I’m also suing the Department of Education for delaying the Gainful Employment Rule. This rule would require for-profit schools to disclose to students the costs, average debt load, and job prospects of their programs. Enacting this rule is important because predatory schools commonly exaggerate job placement rates to prospective students.
When the federal government fails to do its job, I believe we have a responsibility to step up to protect our residents. I won’t stand idly by while the Trump Administration slashes student borrower protections.
Karl A. Racine
Attorney General
Last year, I sued the U.S. Department of Education for delaying a rule that would make it easier for students to get their loans forgiven when their school is proven to have defrauded students. This week, a federal judge ruled that the Trump administration’s move to delay this student protection was illegal.
This ruling is a victory for student borrowers, especially here in the District which has the highest student debts in the nation. On average, District borrowers owe more than $46,000 in federal student loans and more than 1-in-4 student borrowers owe over $80,000. With soaring debt here and across the nation, our struggling borrowers need robust protections against predatory schools that try to cheat them.
To preserve another critical student borrower protection, I’m also suing the Department of Education for delaying the Gainful Employment Rule. This rule would require for-profit schools to disclose to students the costs, average debt load, and job prospects of their programs. Enacting this rule is important because predatory schools commonly exaggerate job placement rates to prospective students.
When the federal government fails to do its job, I believe we have a responsibility to step up to protect our residents. I won’t stand idly by while the Trump Administration slashes student borrower protections.
Karl A. Racine
Attorney General
Prosecutors from the US Department of Justice (DOJ) have asked a California judge to delay a grocery wholesaler's lawsuit against former Bumble Bee Foods CEO Chris Lischewski over concerns that it could complicate the criminal case against him.
Lischewski, who was indicted on criminal price-fixing charges in May 2018 and subsequently stepped down to focus on his defense, is also the defendant in a civil lawsuit from Associated Wholesale Grocers (AWG) that claims the company was harmed by the tuna canner's price-fixing.
Prosecutor Leslie Wulff wrote in a filing that allowing the AWG lawsuit to proceed, which could involve depositions of witnesses including Lischewski, could potentially interfere with the prosecution and run the risk of violating the former CEO's fifth amendment right prohibiting self-incrimination.
From the filing:
"The government’s proposed stay balances the government’s interest in protecting the integrity of the criminal proceedings, Mr. Lischewski’s fifth amendment rights, and the victims’ interest in conducting discovery and seeking restitution for the price-fixing scheme."
From: https://www.undercurrentnews.com/2018/09/10/prosecutors-want-suit-against-lischewski-stalled-due-to-criminal-case/
A bill, introduced by Rep. Darrell Issa, proposes dividing the Ninth Circuit into three regionally based divisions
—The text of the bill is at https://judiciary.house.gov/wp-content/uploads/2018/09/HR-6730.pdf
The three divisions would be a Northern Division composed of the district courts in Alaska, Idaho, Montana, Oregon and Washington’s Eastern and Western districts of Washington; a Middle Division made up of the courts in Guam, Hawaii, Nevada and the Northern Mariana Islands, as well as California’s Eastern and Northern districts; and a Southern Division including Arizona and the Southern and Central districts of California.
Ross Todd of Law.com's Recorder periodical reports that Brian Fitzpatrick of Vanderbilt University Law School, who advocated splitting the Ninth Circuit at a subcommittee hearing chaired by Issa last year [see https://www.law.com/therecorder/almID/1202781463210/house-panel-restarts-debate-on-splitting-ninth-circuit/], said that he wasn’t sure that the representative’s proposal would address his central concern—that the size of the circuit leads to three-judge panels that are more likely to be made up of ideological outliers: “I think we would expect fewer outliers within each of the three regional divisions relative to the makeup of the divisions because each division will have only 11 judges,” he said. “I am not sure if that conclusion carries over to the ‘circuit’ division, however,” said Fitzpatrick, noting that the ratio of judges on the circuit division compared to the court’s total—13 of 24—closely mirrors the makeup of current Ninth Circuit en banc panels—11 of the court’s 29 current active judges.
Todd's full article is at https://www.law.com/therecorder/2018/09/12/house-committee-to-take-up-measure-to-reconfigure-the-ninth-circuit/?kw=House%20Committee%20to%20Take%20Up%20Measure%20to%20Reconfigure%20the%20Ninth%20Circuit&et=editorial&bu=TheRecorder&cn=20180912&src=EMC-Email&pt=AfternoonUpdate
The DCist: These Are Some Of The Areas Most Susceptible To Flooding In D.C.
While it may be that the worst effects of Hurricane Florence will have stayed south of D.C., the storm provided an occasion for reporter by Natalie Delgadillo to review areas in DC most susceptible to flooding. Here are some excerpts from her suggestions:
The National Mall
Areas around the National Mall are some of the lowest points in the city. Flooding from the Potomac River in 1936 and 1942 overwhelmed the National Mall, stranding the Jefferson Memorial like an island. In 2006, persistent rain flooded the National Archives building, the Internal Revenue Service, the Commerce Department, the Justice Department, and several museums on the mall.
That's why the Army Corp of Engineers installed a levee across 17th Street in 2014. It's meant to keep all of downtown D.C. safe from flooding off the Potomac—though it wouldn't be much help if, as in the 2006 storm, the rainwater just became too much for the city's storm drains to bear.
The Wharf
The new businesses on the Wharf have been there open for less than a year, and already they're facing the test of floods. Back in 2003, when rains from Hurricane Isabel hit the District, the Southwest waterfront was inundated.
The Capitol Riverfront/Yards Park
Hurricane Isabel also caused major tidal flooding in Navy Yard in 2003, and too much water this weekend could cause flooding again.
Georgetown Harbour
In 2011, Georgetown Harbour officials failed to deploy a levee to protect the area from flooding, and the boardwalk area was inundated. Restaurants and businesses had to be evacuated, the gas and water turned off.
Rock Creek Park
Here's one everybody knows: Rock Creek Park is always flooding. The trails running along the creek often become unusable for bikers during heavy or persistent rains.
Alexandria
Alexandria has already been dealing with a lot of flooding this week from high tide conditions and lots of rain.
The city has been giving out sand bags since Monday.
DAR comment: It seems an obvious question whether global warming and rising sea levels are relevant to hurricane Florence and the flooding travails of DC, as is also true in Miami and other near sea level cities, although that isn't discussed in the DCist story.
Expert Marshall Shepherd recently addressed that point in an article that appears in The Verge:
We do have higher sea level because of climate change. So whenever we have these types of storms, you’re probably dealing with a more significant storm surge because of that than you would perhaps 100 years ago. The literature certainly suggests that on a global, average sense, we would start to see more intense storms because of the warming oceans perhaps, and changing upper level wind patterns. The jury is still out on whether you’re going to see more or less of them.
In fact, most of the literature I have seen has suggested that you might not see them as frequently — but when you do they’ll be stronger. Yes there’s likely some connection between climate change and hurricanes, but I think it’s irresponsible to conclusively start linking individual storms to climate change, particularly as the storm is unfolding. I’m more concerned about the immediate impacts of the hazard.
See https://www.theverge.com/2018/9/10/17844258/hurricane-florence-atlantic-storm-category-four-intensity-unusual
Posting by Don Allen Resnikoff
Four national healthcare organizations sue HHS over delay of its final rule on price ceilings in the 340B drug discount program.
The 340B program is intended to help hospitals to provide pharmaceuticals to needy patients. The expected rule would set price ceilings and impose civil penalties on pharmaceutical companies that knowingly overcharge hospitals in the program. The Department of Health and Human Services delayed the rule for a fifth time in June, [see https://www.fiercehealthcare.com/payer/for-fifth-time-hhs-delays-340b-drug-ceiling-prices-and-penalitiesafter it was initially issued in January 2017.]
The American Hospital Association, America’s Essential Hospitals, 340B Health and the Association of American Medical Colleges are signed on to the lawsuit (PDF). The lawsuit Complaint can be viewed at https://www.aha.org/system/files/2018-09/180911-340b-delay-suit-complaint.pdf In it, they argue that the nearly two-year delay is unlawful under the Administration Procedure Act.
The 340B program is intended to help hospitals to provide pharmaceuticals to needy patients. The expected rule would set price ceilings and impose civil penalties on pharmaceutical companies that knowingly overcharge hospitals in the program. The Department of Health and Human Services delayed the rule for a fifth time in June, [see https://www.fiercehealthcare.com/payer/for-fifth-time-hhs-delays-340b-drug-ceiling-prices-and-penalitiesafter it was initially issued in January 2017.]
The American Hospital Association, America’s Essential Hospitals, 340B Health and the Association of American Medical Colleges are signed on to the lawsuit (PDF). The lawsuit Complaint can be viewed at https://www.aha.org/system/files/2018-09/180911-340b-delay-suit-complaint.pdf In it, they argue that the nearly two-year delay is unlawful under the Administration Procedure Act.
The Economics Of Amateurism: Breaking Down The Latest Lawsuit Against The NCAA
By Thomas Baker In what could prove to be a battle of economic experts, the NCAA is back in court and must once again defend its amateurism regulations from its own student-athletes. The current case is In Re: Grant-in-Aid Cap Antitrust Litigation and was initiated in the United States District Court for the Northern District of California by former NCAA student-athletes Shawne Alston and Justine Hartman.
Read the article at
https://competitionpolicyinternational.us2.list-manage.com/track/click?u=66710f1b2f6afb55512135556&id=0a7c194709&e=b23ef9e519
FTC Commissioner proposes FTC rule making as supplement to antitrust litigation
From: https://www.ftc.gov/system/files/documents/public_statements/1408196/chopra_-_comment_to_hearing_1_9-6-18.pdf
Excerpt of statement by FTC Commissioner Chopra, who credits Lina Kahn for her help
I see three major benefits to the FTC engaging in rulemaking under “unfair methods of competition,” even if the conduct could be condemned under predecessor antitrust laws. As I describe above, the current approach generates ambiguity, is unduly burdensome, and suffers from a democratic participation deficit. Rulemaking can create value for the marketplace and benefit the public on all of these fronts.
First, rulemaking would enable the Commission to issue clear rules to give market participants sufficient notice about what the law is and is not, helping ensure that enforcement is predictable.30 The APA requires agencies engaging in rulemaking to provide the public with adequate notice of a proposed rule. The notice must include the substance of the rule, the legal authority under which the agency has proposed the rule, and the date the rule will come into effect.31 An agency must publish the final rule in the Federal Register, at least 30 days before the rule becomes effective.
These procedural requirements promote clear rules and clear notice. As the Supreme Court has stated, a “fundamental principle” in our legal system is that “laws which regulate persons or entities must give fair notice of conduct that is forbidden or required.”32 Clear rules also help deliver consistent enforcement and predictable results. Reducing ambiguity about what the law is will enable market participants to channel their resources and behavior more productively, and will allow market entrants and entrepreneurs to compete on more of a level playing field. Second, establishing rules could help relieve antitrust enforcement of steep costs and prolonged trials. Establishing through rulemaking that certain conduct constitutes an “unfair method of competition” would obviate the need to establish the same through adjudication. Targeting conduct through rulemaking, rather than adjudication, might lessen the burden of expert fees or protracted litigation, potentially saving significant resources on a present-value basis.33 Moreover, establishing a rule through APA rulemaking can be faster than litigating multiple cases on a similar subject matter. For taxpayers and market participants, the present value of net benefits through the promulgation of a clear rule that reduces the need for litigation is higher than pursuing multiple, protracted matters through litigation.
At the same time, rulemaking is not
so fast that it surprises market participants. Establishing a rule through participatory rulemaking can often be far more efficient. This is particularly important in the context of declining government enforcement relative to economic activity, as documented by the American Bar Association.34
And third, rulemaking would enable the Commission to establish rules through a transparent and participatory process, ensuring that everyone who may be affected by a new rule has the opportunity to weigh in on it. APA procedures require that an agency provide the public with meaningful opportunity to comment on the rule’s content through the submission of written “data, views, or arguments.”35 The agency must then consider and address all submitted comments before issuing the final rule. If an agency adopts a rule without observing these procedures, a court may strike down the rule.36
This process is far more participatory than adjudication. Unlike judges, who are confined to the trial record when developing precedent-setting rules and standards, the Commission can put forth rules after considering a comprehensive set of information and analysis.37 Notably, this would also allow the FTC to draw on its own informational advantage – namely, its ability to collect and aggregate information and to study market trends and industry practices over the long term and outside the context of litigation.38 Drawing on this expertise to develop standards will help antitrust enforcement and policymaking better reflect empirical realities and better keep pace with evolving business practices.
From: https://www.ftc.gov/system/files/documents/public_statements/1408196/chopra_-_comment_to_hearing_1_9-6-18.pdf
Excerpt of statement by FTC Commissioner Chopra, who credits Lina Kahn for her help
I see three major benefits to the FTC engaging in rulemaking under “unfair methods of competition,” even if the conduct could be condemned under predecessor antitrust laws. As I describe above, the current approach generates ambiguity, is unduly burdensome, and suffers from a democratic participation deficit. Rulemaking can create value for the marketplace and benefit the public on all of these fronts.
First, rulemaking would enable the Commission to issue clear rules to give market participants sufficient notice about what the law is and is not, helping ensure that enforcement is predictable.30 The APA requires agencies engaging in rulemaking to provide the public with adequate notice of a proposed rule. The notice must include the substance of the rule, the legal authority under which the agency has proposed the rule, and the date the rule will come into effect.31 An agency must publish the final rule in the Federal Register, at least 30 days before the rule becomes effective.
These procedural requirements promote clear rules and clear notice. As the Supreme Court has stated, a “fundamental principle” in our legal system is that “laws which regulate persons or entities must give fair notice of conduct that is forbidden or required.”32 Clear rules also help deliver consistent enforcement and predictable results. Reducing ambiguity about what the law is will enable market participants to channel their resources and behavior more productively, and will allow market entrants and entrepreneurs to compete on more of a level playing field. Second, establishing rules could help relieve antitrust enforcement of steep costs and prolonged trials. Establishing through rulemaking that certain conduct constitutes an “unfair method of competition” would obviate the need to establish the same through adjudication. Targeting conduct through rulemaking, rather than adjudication, might lessen the burden of expert fees or protracted litigation, potentially saving significant resources on a present-value basis.33 Moreover, establishing a rule through APA rulemaking can be faster than litigating multiple cases on a similar subject matter. For taxpayers and market participants, the present value of net benefits through the promulgation of a clear rule that reduces the need for litigation is higher than pursuing multiple, protracted matters through litigation.
At the same time, rulemaking is not
so fast that it surprises market participants. Establishing a rule through participatory rulemaking can often be far more efficient. This is particularly important in the context of declining government enforcement relative to economic activity, as documented by the American Bar Association.34
And third, rulemaking would enable the Commission to establish rules through a transparent and participatory process, ensuring that everyone who may be affected by a new rule has the opportunity to weigh in on it. APA procedures require that an agency provide the public with meaningful opportunity to comment on the rule’s content through the submission of written “data, views, or arguments.”35 The agency must then consider and address all submitted comments before issuing the final rule. If an agency adopts a rule without observing these procedures, a court may strike down the rule.36
This process is far more participatory than adjudication. Unlike judges, who are confined to the trial record when developing precedent-setting rules and standards, the Commission can put forth rules after considering a comprehensive set of information and analysis.37 Notably, this would also allow the FTC to draw on its own informational advantage – namely, its ability to collect and aggregate information and to study market trends and industry practices over the long term and outside the context of litigation.38 Drawing on this expertise to develop standards will help antitrust enforcement and policymaking better reflect empirical realities and better keep pace with evolving business practices.
The New York Times:
Amazon’s Antitrust Antagonist Has a Breakthrough Idea
By David Streitfeld
The dead books are on the top floor of Southern Methodist University’s law library.
“Antitrust Dilemma.” “The Antitrust Impulse.” “Antitrust in an Expanding Economy.” Shelf after shelf of volumes ignored for decades. There are a dozen fat tomes with transcripts of the congressional hearings on monopoly power in 1949, when the world was in ruins and the Soviets on the march. Lawmakers believed economic concentration would make America more vulnerable.
At the end of the antitrust stacks is a table near the window. “This is my command post,” said Lina Khan.
It’s nothing, really. A few books are piled up haphazardly next to a bottle with water and another with tea. Ms. Khan was in Dallas quite a bit over the last year, refining an argument about monopoly power that takes aim at one of the most admired, secretive and feared companies of our era: Amazon.
The retailer overwhelmingly dominates online commerce, employs more than half a million people and powers much of the internet itself through its cloud computing division. On Tuesday, it briefly became the second company to be worth a trillion dollars.
If competitors tremble at Amazon’s ambitions, consumers are mostly delighted by its speedy delivery and low prices. They stream its Oscar-winning movies and clamor for the company to build a second headquarters in their hometowns. Few of Amazon’s customers, it is safe to say, spend much time thinking they need to be protected from it.
But then, until recently, no one worried about Facebook, Google or Twitter either. Now politicians, the media, academics and regulators are kicking around ideas that would, metaphorically or literally, cut them down to size. Members of Congress grilled social media executives on Wednesday in yet another round of hearings on Capitol Hill. Not since the Department of Justice took on Microsoft in the mid-1990s has Big Tech been scrutinized like this.
Amazon has more revenue than Facebook, Google and Twitter put together, but it has largely escaped sustained examination. That is beginning to change, and one significant reason is Ms. Khan.
In early 2017, when she was an unknown law student, Ms. Khan published “Amazon’s Antitrust Paradox” in the Yale Law Journal. Her argument went against a consensus in antitrust circles that dates back to the 1970s — the moment when regulation was redefined to focus on consumer welfare, which is to say price. Since Amazon is renowned for its cut-rate deals, it would seem safe from federal intervention.
Continue reading…https://www.nytimes.com/2018/09/07/technology/monopoly-antitrust-lina-khan-amazon.html
Klobuchar questions Kavanaugh on antitrust
By CPI on September 6, 2018No Comment
Senator Amy Klobuchar (D – MN) joined fellow Democrats Wednesday in grilling Supreme Court nominee Brett Kavanaugh over his views on antitrust issues.
Klobuchar, ranking member on the Senate Judiciary Antitrust Subcommittee, said that Supreme Court decisions on antitrust issues in recent years, including the decisions in Ohio v. American Express, Leegin Creative Leather Products v. PSKS and Bell Atlantic v. Twombly, have made it harder to enforce our antitrust laws.
Klobuchar: “Senator Lee and I run the Antitrust Subcommittee…and in recent years…the Supreme Court has made it harder to enforce our antitrust laws in cases like Trinco, Twombly, Leegin, and most recently Ohio v. American Express. This could not be happening at a more troubling time. We’re experiencing a wave of industry consolidation. Annual merger filings increased by more than 50% between 2010 and 2016. I’m concerned that the Court, the Roberts Court, is going down the wrong path and your major antitrust opinions would have rejected challenges to mergers that majorities found to be anticompetitive. I’m afraid you’re going to move it even further down the path. Starting with 2008, in the Whole Foods case, where Whole Foods attempted to buy Wild Oats Market. Very complicated. I’m going to go to the guts of it from my opinion. The majority of courts and…what happened is the Republican majority FTC challenges a deal, and you dissent and you apply your own pricing test to the merger. My simple question is: where did you get this pricing test?”
Kavanaugh: “I would have affirmed the decision by the district judge in that case which allowed the merger and the district judge is Judge Friedman, an appointee of President Clinton’s to the district court. I was following his analysis of the merger. The case is very fact specific…it really turns on whether the larger supermarket sells organic food or not.”
Klobuchar: “Where did you get the pricing test…? You used different tests. I’m trying to figure that out. What legal authority actually requires a government to satisfy your standard to block a merger? …I remember in our discussion you cited these non-binding horizontal merger guidelines that you used to come up with this test.”
Kavanaugh: “You’re looking at the effect on competition and what the Supreme Court has told us, at least from the late 1970s, is to look at the effect on consumers and what’s the effect on the prices for consumers and the theory of the district court and Judge Friedman in this case was that the merger would not cause an increase in prices because they were competing in a broader market that included larger supermarkets that also sold organic food. The question is whether there an organic food market solely or a broader supermarket market.”
Klobuchar also asked Kavanaugh questions about net neutrality, consumer regulation and other issues. She suggested that the public may be focused more on economic issues than the Supreme Court, but “it’s our case to make that it does matter.”
Klobuchar: “Or in another case you wrote a dissent against the rules [that] protect net neutrality, rules that help all citizens, and small businesses have an even playing field when it comes to accessing the Internet. Another example that seems mired in legalese, but is critical for Americans, antitrust law. In recent years the conservative majority on the Supreme Court has made it harder and harder to enforce the nation’s antitrust laws, ruling in favor of consolidation and market dominance. Yet two of Judge Kavanaugh’s major antitrust opinions suggest that he would push the court even further down this pro-merger path. We should have more competition and not less.”
From: https://www.competitionpolicyinternational.com/us-sen-klobuchar-questions-kavanaugh-on-antitrust/?utm_source=CPI+Subscribers&utm_campaign=ac38616102-EMAIL_CAMPAIGN_2018_09_07_06_39&utm_medium=email&utm_term=0_0ea61134a5-ac38616102-236474137
By CPI on September 6, 2018No Comment
Senator Amy Klobuchar (D – MN) joined fellow Democrats Wednesday in grilling Supreme Court nominee Brett Kavanaugh over his views on antitrust issues.
Klobuchar, ranking member on the Senate Judiciary Antitrust Subcommittee, said that Supreme Court decisions on antitrust issues in recent years, including the decisions in Ohio v. American Express, Leegin Creative Leather Products v. PSKS and Bell Atlantic v. Twombly, have made it harder to enforce our antitrust laws.
Klobuchar: “Senator Lee and I run the Antitrust Subcommittee…and in recent years…the Supreme Court has made it harder to enforce our antitrust laws in cases like Trinco, Twombly, Leegin, and most recently Ohio v. American Express. This could not be happening at a more troubling time. We’re experiencing a wave of industry consolidation. Annual merger filings increased by more than 50% between 2010 and 2016. I’m concerned that the Court, the Roberts Court, is going down the wrong path and your major antitrust opinions would have rejected challenges to mergers that majorities found to be anticompetitive. I’m afraid you’re going to move it even further down the path. Starting with 2008, in the Whole Foods case, where Whole Foods attempted to buy Wild Oats Market. Very complicated. I’m going to go to the guts of it from my opinion. The majority of courts and…what happened is the Republican majority FTC challenges a deal, and you dissent and you apply your own pricing test to the merger. My simple question is: where did you get this pricing test?”
Kavanaugh: “I would have affirmed the decision by the district judge in that case which allowed the merger and the district judge is Judge Friedman, an appointee of President Clinton’s to the district court. I was following his analysis of the merger. The case is very fact specific…it really turns on whether the larger supermarket sells organic food or not.”
Klobuchar: “Where did you get the pricing test…? You used different tests. I’m trying to figure that out. What legal authority actually requires a government to satisfy your standard to block a merger? …I remember in our discussion you cited these non-binding horizontal merger guidelines that you used to come up with this test.”
Kavanaugh: “You’re looking at the effect on competition and what the Supreme Court has told us, at least from the late 1970s, is to look at the effect on consumers and what’s the effect on the prices for consumers and the theory of the district court and Judge Friedman in this case was that the merger would not cause an increase in prices because they were competing in a broader market that included larger supermarkets that also sold organic food. The question is whether there an organic food market solely or a broader supermarket market.”
Klobuchar also asked Kavanaugh questions about net neutrality, consumer regulation and other issues. She suggested that the public may be focused more on economic issues than the Supreme Court, but “it’s our case to make that it does matter.”
Klobuchar: “Or in another case you wrote a dissent against the rules [that] protect net neutrality, rules that help all citizens, and small businesses have an even playing field when it comes to accessing the Internet. Another example that seems mired in legalese, but is critical for Americans, antitrust law. In recent years the conservative majority on the Supreme Court has made it harder and harder to enforce the nation’s antitrust laws, ruling in favor of consolidation and market dominance. Yet two of Judge Kavanaugh’s major antitrust opinions suggest that he would push the court even further down this pro-merger path. We should have more competition and not less.”
From: https://www.competitionpolicyinternational.com/us-sen-klobuchar-questions-kavanaugh-on-antitrust/?utm_source=CPI+Subscribers&utm_campaign=ac38616102-EMAIL_CAMPAIGN_2018_09_07_06_39&utm_medium=email&utm_term=0_0ea61134a5-ac38616102-236474137
U.S. is expected to let lapse $600 million in funding to combat global disease outbreaks
From: http://centerforpolicyimpact.org/2018/02/09/penny-wise-pandemic-foolish/
The money was appropriated in 2014 at the height of a catastrophic Ebola outbreak in West Africa. Yet there is considerable evidence that this emergency funding worked. In West Africa and other parts of the world, the CDC has trained disease detectives to diagnose, prevent and contain outbreaks.
When Ebola again began to spread in the Democratic Republic of the Congo last year, health officials, including those trained and supported by the CDC, were able to act swiftly to contain the virus, saving lives and preventing what could have been a massive disaster.
To end this funding now would be like a homeowner, having just been spared from a fire by a smoke alarm, deciding to disconnect the alarm.
We’ve made this mistake before. It’s relatively easy to garner support to fight infectious diseases when they are rampant and capturing our attention, but too often the motivation to sustain funding wanes when the infection appears to be under control. Peter Sands, executive director of The Global Fund, argues that our approach to fighting infections is characterized by “cycles of panic followed by neglect.”
Global health history is full of such examples. In a study that I co-authored, we found 75 episodes of malaria resurgence, where in most cases countries had successfully controlled malaria, only to have it come roaring back once they cut their malaria programs.
This is why the findings by Summers and colleagues are so urgent. When economic losses from a pandemic are expected to exceed $500 billon per year, penny-pinching on our funding to prevent outbreaks is glaringly short-sighted.
Perhaps most curious is the CDC’s reported plan to deal with dwindling resources by downscaling efforts in 39 of the 49 countries where this funding is currently deployed. Most pandemics begin with a spark — a pathogen jumps from domesticated or wild animals to humans. And yet the CDC plans to lessen its vigilance in some of the most likely places in the world for that spark to occur, countries such as China, Pakistan, Haiti, Rwanda and the Congo.
Pandemics know no boundaries. That is especially true now, when factors such as international travel, climate change, deforestation and human-animal interactions are accelerating the spread of infectious diseases. In our modern age, when an outbreak in a far-off land can quickly reach our backyard, there is no room for territorial thinking. Like ships on an ocean, we rise and fall together.
We cannot make the world safe from pandemic diseases by looking away after an emergency fades, nor by hoping that infectious diseases stay within the borders of far-away nations. It is time for us to end the cycles of panic and neglect and invest reasonably and rationally in outbreak preparedness every day and everywhere. The human and economic costs of inaction are intolerable.
From: http://centerforpolicyimpact.org/2018/02/09/penny-wise-pandemic-foolish/
The money was appropriated in 2014 at the height of a catastrophic Ebola outbreak in West Africa. Yet there is considerable evidence that this emergency funding worked. In West Africa and other parts of the world, the CDC has trained disease detectives to diagnose, prevent and contain outbreaks.
When Ebola again began to spread in the Democratic Republic of the Congo last year, health officials, including those trained and supported by the CDC, were able to act swiftly to contain the virus, saving lives and preventing what could have been a massive disaster.
To end this funding now would be like a homeowner, having just been spared from a fire by a smoke alarm, deciding to disconnect the alarm.
We’ve made this mistake before. It’s relatively easy to garner support to fight infectious diseases when they are rampant and capturing our attention, but too often the motivation to sustain funding wanes when the infection appears to be under control. Peter Sands, executive director of The Global Fund, argues that our approach to fighting infections is characterized by “cycles of panic followed by neglect.”
Global health history is full of such examples. In a study that I co-authored, we found 75 episodes of malaria resurgence, where in most cases countries had successfully controlled malaria, only to have it come roaring back once they cut their malaria programs.
This is why the findings by Summers and colleagues are so urgent. When economic losses from a pandemic are expected to exceed $500 billon per year, penny-pinching on our funding to prevent outbreaks is glaringly short-sighted.
Perhaps most curious is the CDC’s reported plan to deal with dwindling resources by downscaling efforts in 39 of the 49 countries where this funding is currently deployed. Most pandemics begin with a spark — a pathogen jumps from domesticated or wild animals to humans. And yet the CDC plans to lessen its vigilance in some of the most likely places in the world for that spark to occur, countries such as China, Pakistan, Haiti, Rwanda and the Congo.
Pandemics know no boundaries. That is especially true now, when factors such as international travel, climate change, deforestation and human-animal interactions are accelerating the spread of infectious diseases. In our modern age, when an outbreak in a far-off land can quickly reach our backyard, there is no room for territorial thinking. Like ships on an ocean, we rise and fall together.
We cannot make the world safe from pandemic diseases by looking away after an emergency fades, nor by hoping that infectious diseases stay within the borders of far-away nations. It is time for us to end the cycles of panic and neglect and invest reasonably and rationally in outbreak preparedness every day and everywhere. The human and economic costs of inaction are intolerable.
Creating Effective Health Care Markets
September 7, 2018
by David Blumenthal, M.D.
Toplines:
The conditions underlying the effective functioning of market economies do not currently exist in health care
Supporters of market-based approaches to health care should seek to promote competition and develop better information on provider prices and quality
Article intro:
Disagreement about the role of markets lies at the root of many of our fiercest health care controversies. One side believes that unleashing market forces will rescue our health care system. From this viewpoint, government involvement is inherently destructive, except in rare circumstances. Many opponents of the Affordable Care Act share this opinion.
The other side believes that health care markets are deeply flawed and that government must play a major role in achieving a higher-performing health system. These people point out that markets make no claim to ensuring equity in the use of health care resources, only improved efficiency. Supporters of the ACA tend to hold this view.
Given this fundamental divide, it’s worth considering the conditions underlying the effective functioning of market economies, whether those conditions currently prevail in health care and, if not, what changes would be required to establish them.
www.commonwealthfund.org/blog/2018/creating-effective-health-care-markets?omnicid
What can the Trump Administration do to rein in Google, Twitter, and Facebook?
Wired has some ideas. It asked some antitrust experts for their thoughts. A main theme is that the government's options are limited, but antitrust enforcers could do more to stop mergers with anti-competitive potential. DR
https://www.wired.com/story/how-to-curb-silicon-valley-power-even-with-weak-antitrust-laws/
Is Apple-Shazam an example of a tech merger that should be blocked? Did the EU get it wrong?Or are the findings of no likely harm to competition well founded?
European Commission - Press release
http://europa.eu/rapid/press-release_IP-18-5662_en.htm
Mergers: Commission clears Apple's acquisition of ShazamBrussels, 6 September 2018
The European Commission has approved under the EU Merger Regulation the proposed acquisition of Shazam by Apple. The Commission concluded that the merger would not adversely affect competition in the European Economic Area or any substantial part of it.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Data is key in the digital economy. We must therefore carefully review transactions which lead to the acquisition of important sets of data, including potentially commercially sensitive ones, to ensure they do not restrict competition. After thoroughly analysing Shazam's user and music data, we found that their acquisition by Apple would not reduce competition in the digital music streaming market."
Today's decision follows an in-depth [http://europa.eu/rapid/press-release_IP-18-3505_en.htm] investigation of Apple's proposed acquisition of Shazam. Apple operates "Apple Music", which is the second largest music streaming service in Europe, after Spotify. Shazam offers a leading music recognition application ("app") in the European Economic Area (EEA) and worldwide.
The Commission's investigation
Apple and Shazam mainly offer complementary services and do not compete with each other. The Commission opened an in-depth investigation to assess:
- whether Apple would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services in the EEA, and whether such data could allow Apple to directly target its competitors' customers and encourage them to switch to Apple Music. As a result, competing music streaming services could have been put at a competitive disadvantage.
- considering Shazam's strong position in the market for music recognition apps, whether Apple Music's competitors would be harmed if Apple, after the transaction, were to discontinue referrals from the Shazam app to them.
The Commission found that:
- the merged entity would not be able to shut out competing providers of digital music streaming services by accessing commercially sensitive information about their customers. In particular, access to Shazam's data would not materially increase Apple's ability to target music enthusiasts and any conduct aimed at making customers switch would only have a negligible impact. As a result, competing providers of digital music streaming services would not be shut out of the market;
- the merged entity would not be able to shut out competing providers of digital music streaming services by restricting access to the Shazam app. This reflects the fact the app has a limited importance as an entry point to the music streaming services of Apple Music's competitors; and
- the integration of Shazam's and Apple's datasets on user data would not confer a unique advantage to the merged entity in the markets on which it operates. Any concerns in that respect were dismissed because Shazam's data is not unique and Apple's competitors would still have the opportunity to access and use similar databases.
Companies and products
Apple is a US based global technology company which designs, manufactures and sells mobile communication, media devices, portable digital music players and personal computers. It also sells and delivers digital content online and offers the music and video streaming service ''Apple Music''.
Shazam is a UK based developer and distributor of music recognition applications for smartphones, tablets and PCs. It mainly generates revenues from online advertising, and commissions earned on referrals of users to digital music streaming and download services, such as Apple Music, Spotify and Deezer.
__._,_.___
9th Circuit: "We consider whether the Eighth Amendment’s prohibition on cruel and unusual punishment bars a city from prosecuting people criminally for sleeping outside on public property when those people have no home or other shelter to go to. We conclude that it does."
http://cdn.ca9.uscourts.gov/datastore/opinions/2018/09/04/15-35845.pdf
http://cdn.ca9.uscourts.gov/datastore/opinions/2018/09/04/15-35845.pdf
NYT: The Government’s New Strategy to Crack Down on ‘Stock Trader Spoofing’
The Justice Department charged two former Deutsche Bank traders late last month with wire fraud for placing and quickly canceling orders to move markets.
By Peter J. Henning
The Justice Department has tried to crack down on traders who try to move markets by entering and quickly canceling orders, conduct that goes by the catchy moniker “spoofing.”
But the government’s early prosecution of the crime has faced a big setback. In just the second trial for spoofing, which the Dodd-Frank Act outlawed, a Connecticut jury acquitted a former trader at UBS of spoofing this spring. That raised questions about whether prosecutors can pursue these cases.
Late July the Justice Department took a new tack. Rather than use the spoofing law, prosecutors charged two former Deutsche Bank traders, James Vorley and Cedric Chanu, with wire fraud. The government claims the pair placed and quickly canceled orders for precious metals futures contracts to create the impression that there was greater supply or demand.
https://www.nytimes.com/2018/09/04/business/dealbook/government-strategy-crack-down-on-spoofing.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=4&pgtype=sectionfront
The Justice Department charged two former Deutsche Bank traders late last month with wire fraud for placing and quickly canceling orders to move markets.
By Peter J. Henning
The Justice Department has tried to crack down on traders who try to move markets by entering and quickly canceling orders, conduct that goes by the catchy moniker “spoofing.”
But the government’s early prosecution of the crime has faced a big setback. In just the second trial for spoofing, which the Dodd-Frank Act outlawed, a Connecticut jury acquitted a former trader at UBS of spoofing this spring. That raised questions about whether prosecutors can pursue these cases.
Late July the Justice Department took a new tack. Rather than use the spoofing law, prosecutors charged two former Deutsche Bank traders, James Vorley and Cedric Chanu, with wire fraud. The government claims the pair placed and quickly canceled orders for precious metals futures contracts to create the impression that there was greater supply or demand.
https://www.nytimes.com/2018/09/04/business/dealbook/government-strategy-crack-down-on-spoofing.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=4&pgtype=sectionfront
President Trump says tech firms may be in a “very antitrust situation”
Referring to Google, Amazon, and Facebook, he repeatedly said he can’t comment publicly on whether they should be broken up.
“I won’t comment on the breaking up, of whether it’s that or Amazon or Facebook,” Trump said in an Oval Office interview Thursday with Bloomberg News. “As you know, many people think it is a very antitrust situation, the three of them [including Google]. But I just, I won’t comment on that.”
Note: Our angry comment translator is unavailable to explain Trump's antitrust thinking. DR
https://www.bloomberg.com/news/articles/2018-08-30/google-under-fire-again-on-search-as-hatch-calls-for-ftc-probe
Referring to Google, Amazon, and Facebook, he repeatedly said he can’t comment publicly on whether they should be broken up.
“I won’t comment on the breaking up, of whether it’s that or Amazon or Facebook,” Trump said in an Oval Office interview Thursday with Bloomberg News. “As you know, many people think it is a very antitrust situation, the three of them [including Google]. But I just, I won’t comment on that.”
Note: Our angry comment translator is unavailable to explain Trump's antitrust thinking. DR
https://www.bloomberg.com/news/articles/2018-08-30/google-under-fire-again-on-search-as-hatch-calls-for-ftc-probe
California abolishes cash bail, aiming to treat rich and poor defendants equally
SMARTINEZ, Calif. —California has abolished bail as a condition of pretrial release, a controversial move to address inequities in the justice system that have often allowed those with personal wealth to walk free while poor defendants, unable to pay, have been incarcerated.
The measure, signed into law by Gov. Jerry Brown (D) on Tuesday, puts California at the head of a small group of states that have made bail reform a priority amid rising incarceration rates and increasing concerns about the justice system’s economic and racial biases.
From https://www.msn.com/en-us/news/crime/california-abolishes-cash-bail-aiming-to-treat-rich-and-poor-defendants-equally/ar-BBMDdn3?ocid=spartandhp
SMARTINEZ, Calif. —California has abolished bail as a condition of pretrial release, a controversial move to address inequities in the justice system that have often allowed those with personal wealth to walk free while poor defendants, unable to pay, have been incarcerated.
The measure, signed into law by Gov. Jerry Brown (D) on Tuesday, puts California at the head of a small group of states that have made bail reform a priority amid rising incarceration rates and increasing concerns about the justice system’s economic and racial biases.
From https://www.msn.com/en-us/news/crime/california-abolishes-cash-bail-aiming-to-treat-rich-and-poor-defendants-equally/ar-BBMDdn3?ocid=spartandhp
DMN: California’s ‘Gold Standard’ Net Neutrality Bill Moves Towards a Final Vote
California’s stringent net neutrality bill, SB 822, has been overwhelmingly approved by the State Assembly.
The California State Assembly has overwhelmingly passed net neutrality bill SB 822, 58-17. The lopsided decision, issued Thursday (August 30th), will send the tough provision to the California Senate before it hits the desk of state governor Jerry Brown.
Both are widely expected to pass the measure.
The story continues here. https://www.digitalmusicnews.com/2018/08/30/california-net-neutrality-final-vote/
Copy of Statement of Arbitrator -- Kaepernick:
The Justice Department's filed "statement of interest" that sides with a group of students rejected for admission by Harvard University who allege the school discriminates against Asian-American applicants.
The URL for the filing appears below. In the "statement of interest" the Justice Department says that Harvard can't show it is following legal restrictions established to limit how race is used as a factor in admissions, essentially agreeing with the plaintiffs in the case, Students for Fair Admissions.
https://www.justice.gov/opa/press-release/file/1090856/download?utm_medium=email&utm_source=govdelivery
The University responded Thursday.
"We are deeply disappointed that the Department of Justice has taken the side of Edward Blum and Students for Fair Admissions, recycling the same misleading and hollow arguments that prove nothing more than the emptiness of the case against Harvard. This decision is not surprising given the highly irregular investigation the DOJ has engaged in thus far, and its recent action to repeal Obama-era guidelines on the consideration of race in admission," the Harvard statement said.
"Harvard does not discriminate against applicants from any group, and will continue to vigorously defend the legal right of every college and university to consider race as one factor among many in college admissions, which the Supreme Court has consistently upheld for more than 40 years. Colleges and universities must have the freedom and flexibility to create the diverse communities that are vital to the learning experience of every student, and Harvard is proud to stand with the many organizations and individuals who are filing briefs in support of this position today," the statement continued.
The URL for Harvard's 8/27/2018 filed Reply is here: https://admissionscase.harvard.edu/files/adm-case/files/harvards_reply_brief_iso_summary_judgment.pdf
A number of amicus briefs have been filed in support of Harvard. URLs can be found at https://admissionscase.harvard.edu/supporting-documents
The initial Kaepernick grievance filing by the Geragos firm is here: http://a.espncdn.com/pdf/2017/1015/KaepernickGrievance_r.pdf
From DC AG Racine's recent newsletter-- short term residential rentals (like Air BnB):
Last week, I demanded landlords at 33 apartment buildings detail how their commercial short-term rentals work. This action was in response to residents who claim they were not informed about hotel-like businesses operating in their apartment buildings and worry that the rowdy guests pose safety concerns. Under the law, landlords must disclose their operation of these hotel-like units to their residents. These requests for information will help us determine if the landlords misled their long-standing residents about the short-term rentals and if they violated District consumer protection or rent control laws.
I will continue to use all the tools at my disposal to ensure that commercialized short-term apartment rentals do not endanger District residents or our supply of affordable housing.
Last week, I demanded landlords at 33 apartment buildings detail how their commercial short-term rentals work. This action was in response to residents who claim they were not informed about hotel-like businesses operating in their apartment buildings and worry that the rowdy guests pose safety concerns. Under the law, landlords must disclose their operation of these hotel-like units to their residents. These requests for information will help us determine if the landlords misled their long-standing residents about the short-term rentals and if they violated District consumer protection or rent control laws.
I will continue to use all the tools at my disposal to ensure that commercialized short-term apartment rentals do not endanger District residents or our supply of affordable housing.
In July The New York City Council voted in favor of a new law requiring Airbnb and similar home-share companies to share data on their users with NYC government
The law was characterized by the council as one that would “provide the City with an additional tool to enforce the laws against illegal short term rentals.” “This bill is about transparency and bringing accountability to billion-dollar companies who are not being good neighbors,” explained NYC Councilwoman Carlina Rivera.
You can read the text here --legistar.council.nyc.gov/ViewReport.ashx?M=R&N=Text&GID=61&ID=3143400&GUID=AB36F650-AAE2-444B-A300-8CF56C056E99&Title=Legislation+Text
The law was characterized by the council as one that would “provide the City with an additional tool to enforce the laws against illegal short term rentals.” “This bill is about transparency and bringing accountability to billion-dollar companies who are not being good neighbors,” explained NYC Councilwoman Carlina Rivera.
You can read the text here --legistar.council.nyc.gov/ViewReport.ashx?M=R&N=Text&GID=61&ID=3143400&GUID=AB36F650-AAE2-444B-A300-8CF56C056E99&Title=Legislation+Text
Three editorials (pointed out by Consumer Law and Policy Blog)
The Washington Post, addressing the current work of the CFPB and the Department of Education, had editorials yesterday and today pertinent to student loans and higher education: Read "The Trump administration’s scandalous handling of student loans," here. Read "How Betsy DeVos could trigger another financial meltdown," here.
The New York Times, addressing proposed changes by the Office of the Comptroller of the Currency to the rules for banks compliance with the Community Reinvestment Act, writes "A Green Light for Banks to Start ‘Redlining’ Again," here.
The Washington Post, addressing the current work of the CFPB and the Department of Education, had editorials yesterday and today pertinent to student loans and higher education: Read "The Trump administration’s scandalous handling of student loans," here. Read "How Betsy DeVos could trigger another financial meltdown," here.
The New York Times, addressing proposed changes by the Office of the Comptroller of the Currency to the rules for banks compliance with the Community Reinvestment Act, writes "A Green Light for Banks to Start ‘Redlining’ Again," here.
Email from Solar United Neighbors (excerpt): As part of a settlement agreement with Solar United Neighbors, the DC government, Pepco, and other stakeholders, last week the DC Public Service Commission (PSC) rejected Pepco’s proposal to increase residential demand charges in our electric bills.
Residential demand charges are a particularly unfair, confusing, and unpredictable rate increase because of how they are calculated and how they can impact your bill for the rest of the year. Typically, demand charges have been applied to large commercial operations, where the impact of the energy use—say to run a factory full of equipment—would materially impact the amount of energy the grid needed to supply. Residential demand charges, on the other hand, make no sense and are punitive to those who try to lower their bills by using less energy and installing solar panels on their roofs.One of the important factors in the settlement was the strong public outcry against the rate increase.
Residential demand charges are a particularly unfair, confusing, and unpredictable rate increase because of how they are calculated and how they can impact your bill for the rest of the year. Typically, demand charges have been applied to large commercial operations, where the impact of the energy use—say to run a factory full of equipment—would materially impact the amount of energy the grid needed to supply. Residential demand charges, on the other hand, make no sense and are punitive to those who try to lower their bills by using less energy and installing solar panels on their roofs.One of the important factors in the settlement was the strong public outcry against the rate increase.
A U.S. federal judge authorizes the seizure of Citgo Petroleum Corp. to satisfy a Venezuelan government debt
The ruling that could set off a scramble among Venezuela’s many unpaid creditors to wrest control of its only obviously seizable U.S. asset.
Judge Leonard P. Stark of the U.S. District Court in Wilmington, Del., issued the ruling.
The court order raises the likelihood that Venezuela’s state oil company, Petróleos de Venezuela SA, will lose control of a valuable external asset amid the country’s deepening economic and political crisis. The decision could still be appealed to a higher, federal court.
Excerpts from https://www.wsj.com/articles/u-s-judge-authorizes-seizure-of-venezuelas-citgo-1533853734 (paywall)
The ruling that could set off a scramble among Venezuela’s many unpaid creditors to wrest control of its only obviously seizable U.S. asset.
Judge Leonard P. Stark of the U.S. District Court in Wilmington, Del., issued the ruling.
The court order raises the likelihood that Venezuela’s state oil company, Petróleos de Venezuela SA, will lose control of a valuable external asset amid the country’s deepening economic and political crisis. The decision could still be appealed to a higher, federal court.
Excerpts from https://www.wsj.com/articles/u-s-judge-authorizes-seizure-of-venezuelas-citgo-1533853734 (paywall)
What is the effect on US automobile consumers of the Trump Administration's new trade deal with Mexico? Not much, according to Bloomberg -- Washington selling tweaks to existing treaties as historic victories
By
David Fickling
and
Anjani Trivedi
August 28, 2018, 3:20 AM
A car can look like a fantastic bargain on the lot, only to reveal itself as a lemon when you drive it away. It’s not so different with trade agreements.
Take the deal hammered out Monday between the U.S. and Mexico on automotive imports, which the two countries hope to extend to Canada, the third member of the North American Free Trade Agreement.
The key elements certainly look dramatic: lifting rules-of-origin requirements to 75 percent to avoid import tariffs, and a separate rule that 40 percent to 45 percent of content come from factories paying more than $16 an hour. The wage rule in particular is about twice what Mexican assembly-line workers make, and four times the average at parts companies there.
When you take a look under the hood, though, there’s a lot less than meets the eye.
Take those rules-of-origin requirments. These specify the share of a car’s content that must be made within Nafta, and have been at 62.5 percent for 16 years. Usefully, the National Highway Traffic Safety Administration already produces data on rules of origin so that U.S. consumers can buy local, and these show which cars would be affected by the change.
Big Deal
Just three Mexican-made cars that don't currently attract Nafta tariffs will do so under the revised agreement, according to NHTSA data
Based on the NHTSA’s data, there are just three models made in Mexico that are currently exempt but would attract tariffs under the new regime: Nissan Motor Co.’s Versa Sedan, Audi AG’s SQ5, and Fiat Chrysler Automobiles NV’s Fiat 500. Of these, only the Versa sells more than a handful of models in the U.S., with 106,772 vehicles shipped in 2017.
The wage rules are likely to be tougher, though even there the devil is in the detail. Almost all non-Nafta content in Mexican-made cars sold in the U.S. comes from Germany, Japan or South Korea, where total compensation typically takes pay well above $16 an hour. So unless the requirement relates solely to Nafta workers earning at least $16 per hour (full details haven’t been released yet), the rules will only really affect vehicles that are at least 55 percent made in Mexico.
That’s a similarly small group. Excluding Ford Motor Co.’s Fusion and Fiesta, General Motors Co.’s Chevrolet City Express, and Mazda Motor Corp.’s Mazda2 — which are already off the U.S. market or heading that way — they sold a collective 658,640 units in 2017, according to our calculations. That compares with total imports from Mexico of about 2.44 million cars.
There’s still likely to be some pain at the margins. The impact of the rules on parts supply chains could reduce earnings at Mazda and Nissan by 5 billion yen ($45 million) and 15 billion yen, respectively, or 4 percent and 2 percent of operating profits, according to Nomura Holdings Inc.’s estimates. With automakers continuing to battle rising costs from President Donald Trump’s other tariffs, any additional pressure won’t help.
Still, the small list of affected vehicles chimes with the equanimity with which the agreement is being greeted in Mexico.
About 70 percent of the country’s light-vehicle exports to the U.S. would be compliant under the new rules, with the remaining 30 percent getting a five-year phase-in period running through 2024, Economy Minister Ildefonso Guajardo told a press conference Monday. Even those that fall short would only receive the usual tariff of 2.5 percent for cars and 25 percent for trucks — levels that Volkswagen AG, Hyundai Motor Co., Kia Motors Corp. and others consider worth paying on swathes of models in return for Mexico’s drastically cheaper labor costs.
It’s likely to be a similar story with Canada, which shouldn’t be affected at all by the wage rules. “Canada should find it relatively simple to join the U.S.-Mexico consensus” and the agreement is a “fundamentally positive development” that should reduce perceptions of risks around Nafta, Brett House, deputy chief economist at Bank of Nova Scotia, wrote in a note after the announcement.
The Honda CR-V and two-door Civic, the Ford Flex, and three Lincoln and Cadillac models are the only Canada-produced cars that would be swept up in an extended version of the U.S-Mexico deal
It shouldn’t be all that surprising that this deal is more limited than it first appears. Mexico is scarcely going to agree to devastate its domestic industry to please President Trump.
Indeed, its modest nature should be considered a virtue, and global equity markets are quite right to be rallying in relief that this element of uncertainty has been lifted.
If Washington can sell tweaks to existing treaties as historic victories that merit a ratcheting-down of global tensions, that’s good news for the other seemingly intractable trade disputes rumbling around the world.
https://www.bloomberg.com/view/articles/2018-08-28/trump-s-mexico-trade-deal-looks-like-a-lemon?cmpid=BBD082818_BIZ&utm_medium=email&utm_source=newsletter&utm_term=180828&utm_campaign=bloombergdaily
A slightly different take on trade deal and auto prices from CBS News:
Maybe higher wage requirements and higher local content requirements (aluminum and steel) will cause auto prices to rise
https://www.msn.com/en-us/money/markets/if-trump-slaps-auto-tariffs-on-canada-heres-what-itll-cost-the-us/ar-BBMDZO3?ocid=spartandhp
Maybe higher wage requirements and higher local content requirements (aluminum and steel) will cause auto prices to rise
https://www.msn.com/en-us/money/markets/if-trump-slaps-auto-tariffs-on-canada-heres-what-itll-cost-the-us/ar-BBMDZO3?ocid=spartandhp
WSJ Editors worry that "Half-Nafta" means higher auto prices
Excerpt:
The deal also imposes new red tape and costs on the auto industry to punish
imports. The deal says that to get tariff-free treatment cars sold in North
America must have 75% of their content made here, up from 62.5%, and at
least 40% of the content must be made with workers who earn $16 an hour.
This is politically managed trade, and its economic logic is the opposite of Mr.
Trump’s domestic deregulation agenda. Ford and GM seem to have made
their peace with this intrusion into their management, but car makers with
assembly plants in Tennessee, Alabama and other GOP-leaning U.S. states
could suffer if they import more than 25% of their parts.
This auto gambit is part of the Trump-Lighthizer strategy to blow up global
supply chains, and it is a political strategy to get a revised deal through
Congress. That also explains the deal’s new labor provisions that go far to
imposing U.S.-style labor laws on Mexico. The details still aren’t clear, but Mr.
Lighthizer said Monday those rules will be “enforceable” on Mexico as part of
the new deal.
https://www.wsj.com/articles/half-a-nafta-1535413208?mod=searchresults&page=1&pos=9 (pay wall)
Excerpt:
The deal also imposes new red tape and costs on the auto industry to punish
imports. The deal says that to get tariff-free treatment cars sold in North
America must have 75% of their content made here, up from 62.5%, and at
least 40% of the content must be made with workers who earn $16 an hour.
This is politically managed trade, and its economic logic is the opposite of Mr.
Trump’s domestic deregulation agenda. Ford and GM seem to have made
their peace with this intrusion into their management, but car makers with
assembly plants in Tennessee, Alabama and other GOP-leaning U.S. states
could suffer if they import more than 25% of their parts.
This auto gambit is part of the Trump-Lighthizer strategy to blow up global
supply chains, and it is a political strategy to get a revised deal through
Congress. That also explains the deal’s new labor provisions that go far to
imposing U.S.-style labor laws on Mexico. The details still aren’t clear, but Mr.
Lighthizer said Monday those rules will be “enforceable” on Mexico as part of
the new deal.
https://www.wsj.com/articles/half-a-nafta-1535413208?mod=searchresults&page=1&pos=9 (pay wall)
Is Judge Kavanaugh a Fan of Antitrust Laws?
By CPI on August 27, 2018
Posted by The Legal Intelligencer
By Carl W. Hittinger and Tyson Y. Herrold
We know Judge Brett Kavanaugh is a fan of the Washington Nationals. But is he also a fan of the antitrust laws? On July 9, 2018, President Donald Trump nominated Kavanaugh, who currently sits on the U.S. Court of Appeals for the District of Columbia Circuit, to replace retiring justice and long-time swing voter Anthony Kennedy. Judge Kavanaugh is sure to be the subject of exacting congressional scrutiny on any number of topics. But the Senate Judiciary Committee should not overlook Kavanuagh’s antitrust jurisprudence. As of this writing, Kavanaugh’s Senate Judiciary Committee hearing is scheduled to begin on Sept. 4.
Unlike Justice Neil Gorsuch, who practiced antitrust law in the private sector and authored three unanimous antitrust opinions while on the U.S. Court of Appeals for the Tenth Circuit, Judge Kavanaugh has no private antitrust experience. Kavanaugh has authored two antitrust dissents while on the D.C. Circuit, both of which drew sharp criticism from fellow judicial panel members. Despite his limited antitrust experience, these dissents shed some light on Kavanaugh’s antitrust and economic persuasion and provide fertile ground for congressional examination.
‘FTC v. Whole Foods Market’
In the 2008 case of FTC v. Whole Foods, the FTC filed a motion for preliminary injunction challenging Whole Foods’ merger with Wild Oats, which the district court denied. The ensuing appeal to the D.C. Circuit turned on the appropriate definition of the relevant product market. The FTC defined the market as “premium, natural, and organic supermarkets,” called “PNOS” for short. According to the FTC, these stores “focus on high-quality perishables,” “generally have high levels of customer services,” “target affluent and well educated customers,” and “emphasi[ze] … social and environmental responsibility.”
D.C. Circuit Judge Janice Brown, with Judge David Tatel concurring in the judgement, agreed with the FTC’s narrow PNOS market definition and rejected Whole Foods’ proposed alternative market, which included so-called “conventional” supermarkets. In support, Judge Brown pointed to evidence of lower profits on “high-quality perishables” where Whole Foods and Wild Oats competed, compared to where they did not. Further economic data from the FTC showed that, although PNOSs competed with conventional supermarkets for “dry grocery” goods, conventional supermarkets had little to no effect on margins for the “high-quality perishables” sold by PNOSs. Judge Brown also relied on Whole Foods’ proprietary “internal projections” that a majority of Wild Oats’ consumers would switch to Whole Foods if the former chain closed, as well as “pseudonymous blog postings” by Whole Foods’ CEO that conventional supermarkets were “unable to compete” with PNOSs.
Dissenting, Kavanaugh branded the FTC’s case “weak” and, by extension, the court’s decision to preliminarily enjoin the merger (according to him), “a relic of a bygone era when antitrust law was divorced from basic economic principles.”
First, Kavanaugh criticized the court for “diluting the standard for preliminary injunction relief.” He argued that its purportedly lenient application of that standard allowed the “FTC to just snap its fingers and temporarily block a merger.” Citing Robert Bork’s famous (or infamous) book “The Antitrust Paradox,” Kavanaugh explained, “the FTC’s position … calls to mind the bad old days when mergers were viewed with suspicion regardless of their economic benefits.”
In turn, in his concurrence, Judge Tatel called Kavanaugh’s criticism “baffling” and noted that the court “scrupulously followed … the likelihood of success standard.” He rebuked Kavanaugh for his “zeal to reach the merits and preempt the FTC” and reminded him that the preliminary injunction standard was designed by Congress to maintain the status quo pending the FTC’s administrative review of mergers within its jurisdiction.
Second, throwing binding case authority to the winds (not to mention stare decisis), Kavanaugh criticized the court for relying too heavily on the Supreme Court’s Brown Shoe v. United States decision, which framed “practical indicia,” or factors, used to identify discrete product submarkets in merger cases. He called that binding decision “free-wheeling,” and commented that it “has not stood the test of time.” Kavanaugh again approvingly quoted a passage from Bork’s “Antitrust Paradox,” contending that, while it would be “overhasty to say that the Brown Shoe opinion is the worst antitrust essay ever written, … [it] has considerable claim to the title.”
Third, Kavanaugh rejected the court’s PNOS product market, citing Whole Foods’ economic expert. Kavanaugh applauded that expert for relying on “all-but-dispositive price evidence” that prices were uniform across Whole Foods’ stores, regardless of whether there was a competing PNOS like Wild Oats in the area. This observation drew further sharp criticism from Judge Tatel who, calling Kavanaugh’s “all-but-dispositive” price evidence “all-but-meaningless,” pointed out that Whole Foods’ expert testimony only showed pricing on a single day and only after “Whole Foods announced its intent to acquire Wild Oats.” This made the data susceptible, according to Judge Tatel, to “manipulation” and “gave Whole Foods every incentive to eliminate any price differences that may have previously existed between its stores … not only to avoid antitrust liability, but also because the company was no longer competing with Wild Oats.”
Continue reading…https://www.law.com/thelegalintelligencer/2018/08/24/is-judge-kavanaugh-a-fan-of-antitrust-laws-lets-take-a-look/
By CPI on August 27, 2018
Posted by The Legal Intelligencer
By Carl W. Hittinger and Tyson Y. Herrold
We know Judge Brett Kavanaugh is a fan of the Washington Nationals. But is he also a fan of the antitrust laws? On July 9, 2018, President Donald Trump nominated Kavanaugh, who currently sits on the U.S. Court of Appeals for the District of Columbia Circuit, to replace retiring justice and long-time swing voter Anthony Kennedy. Judge Kavanaugh is sure to be the subject of exacting congressional scrutiny on any number of topics. But the Senate Judiciary Committee should not overlook Kavanuagh’s antitrust jurisprudence. As of this writing, Kavanaugh’s Senate Judiciary Committee hearing is scheduled to begin on Sept. 4.
Unlike Justice Neil Gorsuch, who practiced antitrust law in the private sector and authored three unanimous antitrust opinions while on the U.S. Court of Appeals for the Tenth Circuit, Judge Kavanaugh has no private antitrust experience. Kavanaugh has authored two antitrust dissents while on the D.C. Circuit, both of which drew sharp criticism from fellow judicial panel members. Despite his limited antitrust experience, these dissents shed some light on Kavanaugh’s antitrust and economic persuasion and provide fertile ground for congressional examination.
‘FTC v. Whole Foods Market’
In the 2008 case of FTC v. Whole Foods, the FTC filed a motion for preliminary injunction challenging Whole Foods’ merger with Wild Oats, which the district court denied. The ensuing appeal to the D.C. Circuit turned on the appropriate definition of the relevant product market. The FTC defined the market as “premium, natural, and organic supermarkets,” called “PNOS” for short. According to the FTC, these stores “focus on high-quality perishables,” “generally have high levels of customer services,” “target affluent and well educated customers,” and “emphasi[ze] … social and environmental responsibility.”
D.C. Circuit Judge Janice Brown, with Judge David Tatel concurring in the judgement, agreed with the FTC’s narrow PNOS market definition and rejected Whole Foods’ proposed alternative market, which included so-called “conventional” supermarkets. In support, Judge Brown pointed to evidence of lower profits on “high-quality perishables” where Whole Foods and Wild Oats competed, compared to where they did not. Further economic data from the FTC showed that, although PNOSs competed with conventional supermarkets for “dry grocery” goods, conventional supermarkets had little to no effect on margins for the “high-quality perishables” sold by PNOSs. Judge Brown also relied on Whole Foods’ proprietary “internal projections” that a majority of Wild Oats’ consumers would switch to Whole Foods if the former chain closed, as well as “pseudonymous blog postings” by Whole Foods’ CEO that conventional supermarkets were “unable to compete” with PNOSs.
Dissenting, Kavanaugh branded the FTC’s case “weak” and, by extension, the court’s decision to preliminarily enjoin the merger (according to him), “a relic of a bygone era when antitrust law was divorced from basic economic principles.”
First, Kavanaugh criticized the court for “diluting the standard for preliminary injunction relief.” He argued that its purportedly lenient application of that standard allowed the “FTC to just snap its fingers and temporarily block a merger.” Citing Robert Bork’s famous (or infamous) book “The Antitrust Paradox,” Kavanaugh explained, “the FTC’s position … calls to mind the bad old days when mergers were viewed with suspicion regardless of their economic benefits.”
In turn, in his concurrence, Judge Tatel called Kavanaugh’s criticism “baffling” and noted that the court “scrupulously followed … the likelihood of success standard.” He rebuked Kavanaugh for his “zeal to reach the merits and preempt the FTC” and reminded him that the preliminary injunction standard was designed by Congress to maintain the status quo pending the FTC’s administrative review of mergers within its jurisdiction.
Second, throwing binding case authority to the winds (not to mention stare decisis), Kavanaugh criticized the court for relying too heavily on the Supreme Court’s Brown Shoe v. United States decision, which framed “practical indicia,” or factors, used to identify discrete product submarkets in merger cases. He called that binding decision “free-wheeling,” and commented that it “has not stood the test of time.” Kavanaugh again approvingly quoted a passage from Bork’s “Antitrust Paradox,” contending that, while it would be “overhasty to say that the Brown Shoe opinion is the worst antitrust essay ever written, … [it] has considerable claim to the title.”
Third, Kavanaugh rejected the court’s PNOS product market, citing Whole Foods’ economic expert. Kavanaugh applauded that expert for relying on “all-but-dispositive price evidence” that prices were uniform across Whole Foods’ stores, regardless of whether there was a competing PNOS like Wild Oats in the area. This observation drew further sharp criticism from Judge Tatel who, calling Kavanaugh’s “all-but-dispositive” price evidence “all-but-meaningless,” pointed out that Whole Foods’ expert testimony only showed pricing on a single day and only after “Whole Foods announced its intent to acquire Wild Oats.” This made the data susceptible, according to Judge Tatel, to “manipulation” and “gave Whole Foods every incentive to eliminate any price differences that may have previously existed between its stores … not only to avoid antitrust liability, but also because the company was no longer competing with Wild Oats.”
Continue reading…https://www.law.com/thelegalintelligencer/2018/08/24/is-judge-kavanaugh-a-fan-of-antitrust-laws-lets-take-a-look/
NYT: Central bankers are wrestling with the idea that how companies compete and exert power affects the overall well-being of the economy.
From the NYT: While these topics more commonly show up in debates around antitrust policy or how the labor market is regulated, it may have implications for the work of central banks as well. For example, if concentrated corporate power is depressing wage growth, the Fed may be able to keep interest rates lower for longer without inflation breaking out. If online retail makes prices jump around more than they once did, policymakers should be more reluctant to make abrupt policy changes based on short-term swings in consumer prices.
Alan Krueger, a Princeton economist, argues that monopsony power is most likely part of the apparent puzzle of why wage growth is low. By his estimates, wages should be rising 1 to 1.5 percentage points faster than they are, given recent inflation levels and the unemployment rate. His paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180824kruegerremarks.pdf?la=en
Nicolas Crouzet and Janice Eberly of Northwestern University presented a paper pointing out that more of the investment of modern corporations takes the form of intangible capital, like software and patents, rather than machines and other physical goods. That may be a reason low interest rate policies by central banks over the past decade didn’t prompt more capital spending. Banks are generally disinclined to treat intellectual property or other intangible items as collateral against loans, which could mean interest rate cuts by a central bank have less power to generate increased investment spending. The Crouzet-Eberly paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=enwww.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=en
The NYT article is at https://www.nytimes.com/2018/08/25/upshot/big-corporations-influence-economy-central-bank.html?action=click&module=Well&pgtype=Homepage§ion=The%20Upshot
From the NYT: While these topics more commonly show up in debates around antitrust policy or how the labor market is regulated, it may have implications for the work of central banks as well. For example, if concentrated corporate power is depressing wage growth, the Fed may be able to keep interest rates lower for longer without inflation breaking out. If online retail makes prices jump around more than they once did, policymakers should be more reluctant to make abrupt policy changes based on short-term swings in consumer prices.
Alan Krueger, a Princeton economist, argues that monopsony power is most likely part of the apparent puzzle of why wage growth is low. By his estimates, wages should be rising 1 to 1.5 percentage points faster than they are, given recent inflation levels and the unemployment rate. His paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180824kruegerremarks.pdf?la=en
Nicolas Crouzet and Janice Eberly of Northwestern University presented a paper pointing out that more of the investment of modern corporations takes the form of intangible capital, like software and patents, rather than machines and other physical goods. That may be a reason low interest rate policies by central banks over the past decade didn’t prompt more capital spending. Banks are generally disinclined to treat intellectual property or other intangible items as collateral against loans, which could mean interest rate cuts by a central bank have less power to generate increased investment spending. The Crouzet-Eberly paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=enwww.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=en
The NYT article is at https://www.nytimes.com/2018/08/25/upshot/big-corporations-influence-economy-central-bank.html?action=click&module=Well&pgtype=Homepage§ion=The%20Upshot
Companies and advocacy groups file amicus brief asking appeals court to review the FCC decision to end net neutrality rules.
Software developer Mozilla Corp., video-sharing service Vimeo LLC, and e-commerce site Etsy Inc., and other technology advocacy groups and media companies filed the brief Monday in the U.S. Court of Appeals for the District of Columbia Circuit [#18-1051], joining a petition by attorneys general of 22 states and D.C. against the FCC order ending net neutrality.
The brief is at https://blog.mozilla.org/wp-content/uploads/2018/08/As-filed-Initial-NG-Petitioners-Brief-Mozilla-v-FCC-20Aug2018-1.pdf
Software developer Mozilla Corp., video-sharing service Vimeo LLC, and e-commerce site Etsy Inc., and other technology advocacy groups and media companies filed the brief Monday in the U.S. Court of Appeals for the District of Columbia Circuit [#18-1051], joining a petition by attorneys general of 22 states and D.C. against the FCC order ending net neutrality.
The brief is at https://blog.mozilla.org/wp-content/uploads/2018/08/As-filed-Initial-NG-Petitioners-Brief-Mozilla-v-FCC-20Aug2018-1.pdf
PBS Newshour segment suggests that stock buybacks artificially limit supply and raise price of stocks
www.pbs.org/newshour/show/why-recent-stock-market-gains-might-not-benefit-the-economy
Excerpt:
Irene Tung:
By buying back a company’s stock, the company is removing from the open market a number of shares, creating an artificial scarcity of shares, which then temporarily drives up the price.
www.pbs.org/newshour/show/why-recent-stock-market-gains-might-not-benefit-the-economy
Excerpt:
Irene Tung:
By buying back a company’s stock, the company is removing from the open market a number of shares, creating an artificial scarcity of shares, which then temporarily drives up the price.
From NYT: Opinion about negative effects of stock buybacks
By William Lazonick and Ken Jacobson
Excerpt:
In 2003, the S.E.C. revealed that it was aware of the use of buybacks to manipulate the stock market. The agency acknowledged, in amending Rule 10b-18 to include block trades, that “during the late 1990s, it was reported that many companies were spending more than half their net income on massive buyback programs that were intended to boost share prices — often supporting their share price at levels far above where they would otherwise trade.” But its 2003 amendment was hardly a solution.
From 2003 to 2007, the value of buybacks by companies in the S.&P. 500 Index quadrupled, reaching almost $600 billion in 2007. With their cash reserves depleted by this orgy of buyback activity, these companies were more vulnerable when the downturn came. Having wasted billions on buybacks, many of them incurred huge losses and required mass layoffs to avoid bankruptcy.
After plummeting in 2008 and 2009, buybacks have again soared: A record $800 billion in buybacks by S.&P. 500 companies is predicted for this year.
Democrats have argued that the Republican tax cuts have funded increased buybacks. While this is true, the damage done by corporate stock buybacks over the past decades has been systemic.
Short of a Congressional ban on buybacks, as Ms. Baldwin proposes, the S.E.C. should immediately rescind Rule 10b-18, and confront the reality of stock market manipulation that open market repurchases entail. If Congress and regulators do not take action to rein in buybacks, the rampant economic inequality that already afflicts the United States will only get worse.
www.nytimes.com/2018/08/23/opinion/ban-stock-buybacks.html?action=click&module=Opinion&pgtype=Homepage
By William Lazonick and Ken Jacobson
Excerpt:
In 2003, the S.E.C. revealed that it was aware of the use of buybacks to manipulate the stock market. The agency acknowledged, in amending Rule 10b-18 to include block trades, that “during the late 1990s, it was reported that many companies were spending more than half their net income on massive buyback programs that were intended to boost share prices — often supporting their share price at levels far above where they would otherwise trade.” But its 2003 amendment was hardly a solution.
From 2003 to 2007, the value of buybacks by companies in the S.&P. 500 Index quadrupled, reaching almost $600 billion in 2007. With their cash reserves depleted by this orgy of buyback activity, these companies were more vulnerable when the downturn came. Having wasted billions on buybacks, many of them incurred huge losses and required mass layoffs to avoid bankruptcy.
After plummeting in 2008 and 2009, buybacks have again soared: A record $800 billion in buybacks by S.&P. 500 companies is predicted for this year.
Democrats have argued that the Republican tax cuts have funded increased buybacks. While this is true, the damage done by corporate stock buybacks over the past decades has been systemic.
Short of a Congressional ban on buybacks, as Ms. Baldwin proposes, the S.E.C. should immediately rescind Rule 10b-18, and confront the reality of stock market manipulation that open market repurchases entail. If Congress and regulators do not take action to rein in buybacks, the rampant economic inequality that already afflicts the United States will only get worse.
www.nytimes.com/2018/08/23/opinion/ban-stock-buybacks.html?action=click&module=Opinion&pgtype=Homepage
Nearly a decade after the crisis, the country's biggest banks are starting to raise their Washington profile.
from Bloomberg News article:
A prime example: the push for the Federal Reserve to reconsider its capital surcharge for global systemically important banks, an additional capital requirement for the country’s eight largest banks.
While Fed officials have not indicated that they have any immediate plans to recalibrate the surcharge, the fight is one that solely affects the industry’s largest institutions — a constituency that has garnered little traction in policymaking circles in recent years.
It’s a sign, observers say, that the biggest banks are starting to reassert themselves, after absorbing much of the blame for the financial crisis a decade ago. While moving legislation through Congress is likely to remain an uphill battle given ongoing suspicion of Wall Street on both sides of the aisle, the banks are now raising the profile of key issues they would like President Trump’s regulators to tackle at the banking agencies.
“They’ve come out of the shadows,” said Camden Fine, president and chief executive of Calvert Advisors and the former head of the Independent Community Bankers of America. “They’re becoming more vocal, more aggressive, more strident about the issues that are top priorities to them.”
Legislation to benefit the biggest banks would likely still prove difficult. But in some notable cases even lawmakers are starting to feel more comfortable supporting initiatives to help Wall Street institutions — especially now that regulatory relief for smaller institutions has passed Congress. Republican lawmakers in the House and Senate have both recently sent letters to the Fed asking it to reconsider the capital surcharge, a move backed by the industry. And just last week, seven Republican senators asked the Fed to consider further tailoring prudential standards for those above the $250 billion asset threshold as well as for those with assets between $100 billion and $250 billion.
The shift can also be seen in the fight over the Volcker Rule, a ban on proprietary trading that mostly affects the biggest institutions. As reported by The Wall Street Journal, representatives from more than half a dozen of the biggest banks have raised alarms about the Fed’s proposed revision to the rule, which they argue could make compliance even harder. The biggest banks have largely opposed the Volcker Rule since its creation under the Dodd-Frank Act.
As larger banks seek to re-enter the public debate, they’re bolstered by the support of two industry groups that have recently been revamped: The Financial Services Forum, which now represents eight major banks, is under new leadership, and the Bank Policy Institute, which speaks for large and regional institutions, is the byproduct of a merger between The Clearing House Association and the Financial Services Roundtable. The two groups recently collaborated on a joint blog post about the capital surcharge.
“There is a desire to have more of a voice in the conversation,” said Barbara Hagenbaugh, executive vice president and head of communications for the Financial Services Forum. “We think it is important and appropriate to address the issues of unique importance to our members and to convey the vital role they play in the economy.”
from Bloomberg News article:
A prime example: the push for the Federal Reserve to reconsider its capital surcharge for global systemically important banks, an additional capital requirement for the country’s eight largest banks.
While Fed officials have not indicated that they have any immediate plans to recalibrate the surcharge, the fight is one that solely affects the industry’s largest institutions — a constituency that has garnered little traction in policymaking circles in recent years.
It’s a sign, observers say, that the biggest banks are starting to reassert themselves, after absorbing much of the blame for the financial crisis a decade ago. While moving legislation through Congress is likely to remain an uphill battle given ongoing suspicion of Wall Street on both sides of the aisle, the banks are now raising the profile of key issues they would like President Trump’s regulators to tackle at the banking agencies.
“They’ve come out of the shadows,” said Camden Fine, president and chief executive of Calvert Advisors and the former head of the Independent Community Bankers of America. “They’re becoming more vocal, more aggressive, more strident about the issues that are top priorities to them.”
Legislation to benefit the biggest banks would likely still prove difficult. But in some notable cases even lawmakers are starting to feel more comfortable supporting initiatives to help Wall Street institutions — especially now that regulatory relief for smaller institutions has passed Congress. Republican lawmakers in the House and Senate have both recently sent letters to the Fed asking it to reconsider the capital surcharge, a move backed by the industry. And just last week, seven Republican senators asked the Fed to consider further tailoring prudential standards for those above the $250 billion asset threshold as well as for those with assets between $100 billion and $250 billion.
The shift can also be seen in the fight over the Volcker Rule, a ban on proprietary trading that mostly affects the biggest institutions. As reported by The Wall Street Journal, representatives from more than half a dozen of the biggest banks have raised alarms about the Fed’s proposed revision to the rule, which they argue could make compliance even harder. The biggest banks have largely opposed the Volcker Rule since its creation under the Dodd-Frank Act.
As larger banks seek to re-enter the public debate, they’re bolstered by the support of two industry groups that have recently been revamped: The Financial Services Forum, which now represents eight major banks, is under new leadership, and the Bank Policy Institute, which speaks for large and regional institutions, is the byproduct of a merger between The Clearing House Association and the Financial Services Roundtable. The two groups recently collaborated on a joint blog post about the capital surcharge.
“There is a desire to have more of a voice in the conversation,” said Barbara Hagenbaugh, executive vice president and head of communications for the Financial Services Forum. “We think it is important and appropriate to address the issues of unique importance to our members and to convey the vital role they play in the economy.”
Opinion from DMN:
You Can’t ‘Remaster’ a Brand-New Copyright, U.S. Court of Appeals Rules
August 21, 2018
Remastered oldies sound better. But they’re ultimately technical improvements that don’t constitute a brand-new copyright, the 9th Circuit Court of Appeals just ruled.The complexity of U.S. Copyright Law is now becoming outright absurd, especially as it relates to ‘pre-1972’ oldies recordings. For those just tuning in, federal copyright law in the United States only covers recorded works released after February 15th, 1972, with earlier works defaulting to a patchwork of state laws.
That, of course, has created a giant gray area for rights owners, as well as licensees. Unfortunately, those gray areas have translated into years of expensive litigation and confusion. And, some frankly absurd results.
A reversal of an earlier absurdity just happened in Pasadena, California, where the 9th Circuit Court of Appeals ruled that a remastered song doesn’t create a new copyright.
Why would a remastering create a brand-new copyright, you ask? Well, back in 2016, a lower court ruled that a remastering introduces substantially new elements into the recording, making it a brand-new work. That argument was cleverly posited by CBS Radio, which is fending off a lawsuit alleging that it should pay royalties for pre-1972 recordings.
The lawsuit was lodged by ABS Entertainment, which owns the recording copyrights of Al Green and other ‘oldies’ performers.
In a nutshell, CBS argued that it technically was never playing the old vinyl LPs of pre-1972 tracks. Instead, the station played digitally remastered CDs and digital files, which were released after 1972. Therefore, they should only be liable for post-1972 statutory rates under federal law, which are much lower.
The lower District Court agreed, opening up a number of strange possibilities. Read literally, the ruling meant that any recording copyright could theoretically be extended forever, as long as it was remixed before its expiration date. Other theoretical possibilities were equally hair-raising, though the 9th Circuit ruling has now slammed the door on a myriad of remastering loopholes.
Instead, the 9th Circuit has rejected the idea that a remaster is a substantially unique work deserving for new protections.“It should be evident that a remastered sound recording is not eligible for independent copyright protection as a derivative work unless its essential character and identity reflect a level of independent sound recording authorship that makes it a variation distinguishable from the underlying work,” 9th Circuit Court judge Richard Linn opined.
“That is so even if the digital version would be perceived by a listener to be a brighter or cleaner rendition.”
Accordingly, this case is now headed back to the lower District Court for reconsideration — and perhaps a more sane ruling.
The strange ruling is rooted in arcane U.S. Copyright Law, and this particular wrinkle isn’t quite getting fixed by the Music Modernization Act.Sadly, the Music Modernization Act (MMA) is threatening to further complicate oldies copyrights, in different ways. Under the CLASSICS sub-bill, pre-1972 oldies recordings would enjoy longer copyright terms and broader protections, but also be subject to a patchwork of state laws. That would give copyright owners the greatest level of protection and royalties, simply because states often carry stronger laws and payment requirements for pre-1972 works.
Perhaps predictably, CLASSICS has drawn a counter-proposal in the form of a competing bill. The ACCESS to Recordings Act, introduced by Oregon Democratic Senator Ron Wyden, would place pre-1972 recordings on the same copyright footing as every other recording, pre- or post-1972, a structure that would vastly simplify recording copyright in the US.
At this stage, it’s unclear if ACCESS will hamper the MMA’s chances of passage in the Senate (and ultimately into law).
Here’s the 9th Circuit Court Appeals ruling in ABS Entertainment Inc. v. CBS Corp. et al. [https://www.digitalmusicnews.com/wp-content/uploads/2011/07/9th_circuit_pre_1972_remaster.pdf]
See https://www.digitalmusicnews.com/2018/08/21/remaster-copyright-district-court-appeals/
You Can’t ‘Remaster’ a Brand-New Copyright, U.S. Court of Appeals Rules
August 21, 2018
Remastered oldies sound better. But they’re ultimately technical improvements that don’t constitute a brand-new copyright, the 9th Circuit Court of Appeals just ruled.The complexity of U.S. Copyright Law is now becoming outright absurd, especially as it relates to ‘pre-1972’ oldies recordings. For those just tuning in, federal copyright law in the United States only covers recorded works released after February 15th, 1972, with earlier works defaulting to a patchwork of state laws.
That, of course, has created a giant gray area for rights owners, as well as licensees. Unfortunately, those gray areas have translated into years of expensive litigation and confusion. And, some frankly absurd results.
A reversal of an earlier absurdity just happened in Pasadena, California, where the 9th Circuit Court of Appeals ruled that a remastered song doesn’t create a new copyright.
Why would a remastering create a brand-new copyright, you ask? Well, back in 2016, a lower court ruled that a remastering introduces substantially new elements into the recording, making it a brand-new work. That argument was cleverly posited by CBS Radio, which is fending off a lawsuit alleging that it should pay royalties for pre-1972 recordings.
The lawsuit was lodged by ABS Entertainment, which owns the recording copyrights of Al Green and other ‘oldies’ performers.
In a nutshell, CBS argued that it technically was never playing the old vinyl LPs of pre-1972 tracks. Instead, the station played digitally remastered CDs and digital files, which were released after 1972. Therefore, they should only be liable for post-1972 statutory rates under federal law, which are much lower.
The lower District Court agreed, opening up a number of strange possibilities. Read literally, the ruling meant that any recording copyright could theoretically be extended forever, as long as it was remixed before its expiration date. Other theoretical possibilities were equally hair-raising, though the 9th Circuit ruling has now slammed the door on a myriad of remastering loopholes.
Instead, the 9th Circuit has rejected the idea that a remaster is a substantially unique work deserving for new protections.“It should be evident that a remastered sound recording is not eligible for independent copyright protection as a derivative work unless its essential character and identity reflect a level of independent sound recording authorship that makes it a variation distinguishable from the underlying work,” 9th Circuit Court judge Richard Linn opined.
“That is so even if the digital version would be perceived by a listener to be a brighter or cleaner rendition.”
Accordingly, this case is now headed back to the lower District Court for reconsideration — and perhaps a more sane ruling.
The strange ruling is rooted in arcane U.S. Copyright Law, and this particular wrinkle isn’t quite getting fixed by the Music Modernization Act.Sadly, the Music Modernization Act (MMA) is threatening to further complicate oldies copyrights, in different ways. Under the CLASSICS sub-bill, pre-1972 oldies recordings would enjoy longer copyright terms and broader protections, but also be subject to a patchwork of state laws. That would give copyright owners the greatest level of protection and royalties, simply because states often carry stronger laws and payment requirements for pre-1972 works.
Perhaps predictably, CLASSICS has drawn a counter-proposal in the form of a competing bill. The ACCESS to Recordings Act, introduced by Oregon Democratic Senator Ron Wyden, would place pre-1972 recordings on the same copyright footing as every other recording, pre- or post-1972, a structure that would vastly simplify recording copyright in the US.
At this stage, it’s unclear if ACCESS will hamper the MMA’s chances of passage in the Senate (and ultimately into law).
Here’s the 9th Circuit Court Appeals ruling in ABS Entertainment Inc. v. CBS Corp. et al. [https://www.digitalmusicnews.com/wp-content/uploads/2011/07/9th_circuit_pre_1972_remaster.pdf]
See https://www.digitalmusicnews.com/2018/08/21/remaster-copyright-district-court-appeals/
Court decides: Constitution does not require State to require access to minimum level of education by which the child can attain literacy
The decision is here:http://mediad.publicbroadcasting.net/p/michigan/files/opinion_-_gary_b_vs_richard_snyder__16-13292.pdf [UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ]
Language from the opinion:
The conditions and outcomes of Plaintiffs' schools, as alleged, are nothing short of devastating. When a child who could be taught to read goes untaught, the child suffers a lasting injury—and so does society. But the Court is faced with a discrete question: does the Due Process Clause demand that a State affirmatively provide each child with a minimum level of education by which the child can attain literacy? Based on the foregoing analysis, the answer to the question is no.
The decision is here:http://mediad.publicbroadcasting.net/p/michigan/files/opinion_-_gary_b_vs_richard_snyder__16-13292.pdf [UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ]
Language from the opinion:
The conditions and outcomes of Plaintiffs' schools, as alleged, are nothing short of devastating. When a child who could be taught to read goes untaught, the child suffers a lasting injury—and so does society. But the Court is faced with a discrete question: does the Due Process Clause demand that a State affirmatively provide each child with a minimum level of education by which the child can attain literacy? Based on the foregoing analysis, the answer to the question is no.
The Trump Administration's National Park Service proposes fees for free speech demonstrations on federal land
A DCist article explains that NPS released a list of 14 proposed rule changes to the permitting process. One of the new rules under consideration is a requirement for permit applicants to pay fees for free speech demonstrations, to help NPS recover some of the costs of managing the events and providing security. NPS already requires people to pay for special event permits.
“The federal government and taxpayers shouldn’t be required to underwrite the cost of somebody’s special event, whether it’s a concert, wedding, or gathering of some sort,” said NPS spokesman Mike Litterst. “We’re just asking the question,” he said of the proposal to apply the same reasoning to demonstrations. He said there has been no discussion yet of what the fees would be.
The Park Service said the “volume and complexity” of permit requests for the National Mall and White House have increased over the years. NPS issues around 750 permits for First Amendment demonstrations and an additional 1,500 permits for special events in and around D.C. each year.
The NPS proposal URL is https://www.nps.gov/nama/learn/news/upload/TPM-Proposed-Rule-Regs-Draft-08-06-18.pdf
One proposal is: "Consider requiring permit applicants to pay fees to allow the NPS to recover some of the costs of administering permitted activities that contain protected speech."
A DCist article explains that NPS released a list of 14 proposed rule changes to the permitting process. One of the new rules under consideration is a requirement for permit applicants to pay fees for free speech demonstrations, to help NPS recover some of the costs of managing the events and providing security. NPS already requires people to pay for special event permits.
“The federal government and taxpayers shouldn’t be required to underwrite the cost of somebody’s special event, whether it’s a concert, wedding, or gathering of some sort,” said NPS spokesman Mike Litterst. “We’re just asking the question,” he said of the proposal to apply the same reasoning to demonstrations. He said there has been no discussion yet of what the fees would be.
The Park Service said the “volume and complexity” of permit requests for the National Mall and White House have increased over the years. NPS issues around 750 permits for First Amendment demonstrations and an additional 1,500 permits for special events in and around D.C. each year.
The NPS proposal URL is https://www.nps.gov/nama/learn/news/upload/TPM-Proposed-Rule-Regs-Draft-08-06-18.pdf
One proposal is: "Consider requiring permit applicants to pay fees to allow the NPS to recover some of the costs of administering permitted activities that contain protected speech."
Ninth Circuit Says Remastered Songs Not Original in Win for Pre-1972 Artists
Even if engineers make the sound brighter or cleaner, they do not alter the expressive character and identity of the original recording. The decision wipes away a creative defense mounted by broadcasting companies.
https://www.law.com/therecorder/2018/08/20/ninth-circuit-says-remastered-songs-not-original-in-win-for-pre-1972-artists/?kw=Ninth%20Circuit%20Says%20Remastered%20Songs%20Not%20Original%20in%20Win%20for%20Pre-1972%20Artists
Even if engineers make the sound brighter or cleaner, they do not alter the expressive character and identity of the original recording. The decision wipes away a creative defense mounted by broadcasting companies.
https://www.law.com/therecorder/2018/08/20/ninth-circuit-says-remastered-songs-not-original-in-win-for-pre-1972-artists/?kw=Ninth%20Circuit%20Says%20Remastered%20Songs%20Not%20Original%20in%20Win%20for%20Pre-1972%20Artists
Who knew? There is a theme song for those who don't like competition: The Too Much Competition Blues
https://www.youtube.com/watch?v=VR717pSC5Kc
https://www.youtube.com/watch?v=VR717pSC5Kc
Grunes and Stucke on terminating ASCAP and BMI decrees
In their article at https://www.competitionpolicyinternational.com/potential-legal-issues-in-terminating-the-ascap-and-bmi-decrees/?utm_source=CPI+Subscribers&utm_campaign=afe405147d-EMAIL_CAMPAIGN_2018_08_17_03_46&utm_medium=email&utm_term=0_0ea61134a5-afe405147d-236508653
Grunes and Stucke point out, among other things, that the decrees have played an important role in mitigating the antitrust risks from ASCAP and BMI while promoting the efficiencies from collective licensing; and that it is a problem that if the ASCAP and BMI consent decrees were terminated, the duopoly would remain, and licensees and consumers would bear the risk of unduly restrictive anticompetitive practices.
A related problem pointed out by the authors is the difficulty the DOJ would likely face in convincing the court that terminating the decrees would benefit the public, given that it reached the opposite conclusion a couple of years ago. Moreover, the concerns the DOJ heard during its review process from licensees, such as Netflix, Pandora, and religious broadcasters, would undercut the argument that the public would somehow benefit from the decrees’ termination.
In their article at https://www.competitionpolicyinternational.com/potential-legal-issues-in-terminating-the-ascap-and-bmi-decrees/?utm_source=CPI+Subscribers&utm_campaign=afe405147d-EMAIL_CAMPAIGN_2018_08_17_03_46&utm_medium=email&utm_term=0_0ea61134a5-afe405147d-236508653
Grunes and Stucke point out, among other things, that the decrees have played an important role in mitigating the antitrust risks from ASCAP and BMI while promoting the efficiencies from collective licensing; and that it is a problem that if the ASCAP and BMI consent decrees were terminated, the duopoly would remain, and licensees and consumers would bear the risk of unduly restrictive anticompetitive practices.
A related problem pointed out by the authors is the difficulty the DOJ would likely face in convincing the court that terminating the decrees would benefit the public, given that it reached the opposite conclusion a couple of years ago. Moreover, the concerns the DOJ heard during its review process from licensees, such as Netflix, Pandora, and religious broadcasters, would undercut the argument that the public would somehow benefit from the decrees’ termination.
NYT: NY State's ethical horrors
A NYT editorial on an AG candidate mentions in passing that "Albany has long been a chamber of ethical horrors." It then provides the following litany:
n March, Gov. Andrew Cuomo’s former senior aide Joseph Percoco was convicted on corruption charges.
In May, former Assembly Speaker Sheldon Silver, a Democrat, was also convicted of corruption.
In July, the former Republican Senate majority leader, Dean Skelos, was convicted of bribery, extortion and conspiracy. Prosecutors said he used his office to pressure businesses to pay his son $300,000 for no-show jobs.
The same month, Alain Kaloyeros, a key figure behind Mr. Cuomo’s “Buffalo Billion” economic initiative, was convicted in a bid-rigging scheme.
And: Not to be forgotten are the allegations against former Attorney General Eric Schneiderman, who resigned in disgrace earlier this year after women who dated him accused him of choking them and beating them up.
See https://www.nytimes.com/2018/08/19/opinion/zephyr-teachout-new-york-attorney-general.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
A NYT editorial on an AG candidate mentions in passing that "Albany has long been a chamber of ethical horrors." It then provides the following litany:
n March, Gov. Andrew Cuomo’s former senior aide Joseph Percoco was convicted on corruption charges.
In May, former Assembly Speaker Sheldon Silver, a Democrat, was also convicted of corruption.
In July, the former Republican Senate majority leader, Dean Skelos, was convicted of bribery, extortion and conspiracy. Prosecutors said he used his office to pressure businesses to pay his son $300,000 for no-show jobs.
The same month, Alain Kaloyeros, a key figure behind Mr. Cuomo’s “Buffalo Billion” economic initiative, was convicted in a bid-rigging scheme.
And: Not to be forgotten are the allegations against former Attorney General Eric Schneiderman, who resigned in disgrace earlier this year after women who dated him accused him of choking them and beating them up.
See https://www.nytimes.com/2018/08/19/opinion/zephyr-teachout-new-york-attorney-general.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
NYT: To fight shoplifting, some big retail companies are employing aggressive legal tactics — sometimes against people who didn’t do anything wrong.
But those strategies disproportionately harm low-income shoppers, who say they’re unmatched in the legal fight against the world’s largest retailers.
See NYT at https:// www.nytimes.com/2018/08/17/business/falsely-accused-of-shoplifting-but-retailers-demand-they-pay.html?WT.nav=top-news&action=click&=&=&=&=&=&=&clickSource=story-heading&emc=edit_ne_20180817&hp=&module=second-column-region&nl=evening-briefing&nlid=67075843ng-briefing&pgtype=Homepage®ion=top-news&te=1
But those strategies disproportionately harm low-income shoppers, who say they’re unmatched in the legal fight against the world’s largest retailers.
See NYT at https:// www.nytimes.com/2018/08/17/business/falsely-accused-of-shoplifting-but-retailers-demand-they-pay.html?WT.nav=top-news&action=click&=&=&=&=&=&=&clickSource=story-heading&emc=edit_ne_20180817&hp=&module=second-column-region&nl=evening-briefing&nlid=67075843ng-briefing&pgtype=Homepage®ion=top-news&te=1
Does Airbnb suppress some bad reviews by renters? Some customers complain that their negative reviews are suppressed and never appear publicly.
An acquaintance says she recently complained to Airbnb about a rental that was misdescribed as to condition, size, and convenience. She received a partial refund, but her critical review was never published. The property listing shows only the positive reviews my acquaintance relied on when booking.
The Airbnb website says “To promote trust and transparency in our community, we won't delete reviews unless they violate our content policy.”
That may be true, but some on-line bloggers have a different impression.
One wrote:
“I recently concluded my second stay in two months, and for the second time, my review has not appeared on my host's page, nor have I received any feedback.”
Another wrote:
“Same thing here. Only can see my review in My reviews column but it is not publish on the host page and can't even contact the Airbnb helpline or their email.”
Yet another:
“I have the same problem and cant contact Airbnb! One of my reviews for a host does not appear on their page ( it was there for only 2 days) it was not a bad review at all, quite the contrery. However, i did deduct stars due to bad communication on the day of check in and problems accessing their property (Our host did not communicate with us and did not reply to our message the day before or on the day of check in and we couldn't get into her house. even so, I did not make this public but only told her in the private feedback) . I have noticed that this host has full stars and my review is now not on her page, which makes me feel that hosts can manipulate their ratings. Im trying to get answers to this as it makes me very weary to trust airbnb reviews in the future.”
Yet another:
“I am wondering the same thing. Are negative reviews not published? I didn't post any feelings in my review, only facts. Therefore I believe it's important for others to know how terrible this host was. Despite me calling AirBandB for help with the matter, nothing was resolved. And now, the only recourse I have is to review the place and it won't publish.”
DAR comment: I can’t vouch for any of these complaints, except for the first cited above. What is your experience? It does seem that it is misleading if a property has negative reviews that are not disclosed to prospective renters.
Posted by Don Allen Resnikoff
An acquaintance says she recently complained to Airbnb about a rental that was misdescribed as to condition, size, and convenience. She received a partial refund, but her critical review was never published. The property listing shows only the positive reviews my acquaintance relied on when booking.
The Airbnb website says “To promote trust and transparency in our community, we won't delete reviews unless they violate our content policy.”
That may be true, but some on-line bloggers have a different impression.
One wrote:
“I recently concluded my second stay in two months, and for the second time, my review has not appeared on my host's page, nor have I received any feedback.”
Another wrote:
“Same thing here. Only can see my review in My reviews column but it is not publish on the host page and can't even contact the Airbnb helpline or their email.”
Yet another:
“I have the same problem and cant contact Airbnb! One of my reviews for a host does not appear on their page ( it was there for only 2 days) it was not a bad review at all, quite the contrery. However, i did deduct stars due to bad communication on the day of check in and problems accessing their property (Our host did not communicate with us and did not reply to our message the day before or on the day of check in and we couldn't get into her house. even so, I did not make this public but only told her in the private feedback) . I have noticed that this host has full stars and my review is now not on her page, which makes me feel that hosts can manipulate their ratings. Im trying to get answers to this as it makes me very weary to trust airbnb reviews in the future.”
Yet another:
“I am wondering the same thing. Are negative reviews not published? I didn't post any feelings in my review, only facts. Therefore I believe it's important for others to know how terrible this host was. Despite me calling AirBandB for help with the matter, nothing was resolved. And now, the only recourse I have is to review the place and it won't publish.”
DAR comment: I can’t vouch for any of these complaints, except for the first cited above. What is your experience? It does seem that it is misleading if a property has negative reviews that are not disclosed to prospective renters.
Posted by Don Allen Resnikoff
A lesson to politicians everywhere: Italy’s governing right wing party wrote off safety fears about the motorway bridge that collapsed in Genoa as a children’s “fairy story”
The "fairy tale" jibe at the regional president and other officials was on the party’s website, but is now deleted
The Five Star Movement (M5S), which has been leading the country’s government since earlier this year, has made political capital out of opposing major construction and infrastructure projects, which often draw opposition in Italy because they can be disruptive to local residents.
In 2013 a statement on the party’s website described warnings of “the imminent collapse of the Morandi Bridge” as a “favoletta”, an Italian word meaning a children’s fantasy tale or fairy story. The bridge collapsed on Tuesday killing at least 39 people and severing the country’s A10 motorway.
The statement has since been deleted from the party’s website, but a cached version is still visible online. It was drawn up in opposition to the “Gronda di Genova”, a major infrastructure project to improve the motorways in the city region that included work on the now collapsed bridge.
Some architects and engineers had warned that the bridge, built by Italian civil engineer Riccardo Morandi in the 1960s, suffered from fatal design flaws; reinforcement work was carried out on it in 2016 in an attempt to shore it up. A complete rebuild was not carried out to avoid disruption, however.
The statement on the M5S website accuses the regional president who backed the reinforcement work of not having read a public inquiry report into the state of the bridge, and says the party “asks ourselves what credibility those who support the great works can still have”.
Other infrastructure projects opposed by the M5S include a new high-speed rail line from Turin to the south France, which was also the subject of protests and which has been put under review by the incoming transport ministry and similarly described as a waste of money.
Improvements to the bridge were also included by the M5S on a list of infrastructure projects which could be scrapped subject to a review of the costs and benefits.
Bridges designed by the late civil engineer Mr Morandi tend to be unusual because the planner used reinforced concrete instead of steel cables for the stays of the bridge, and used relatively few cables compared to most other designs.
The story is from https://www.independent.co.uk/news/world/europe/genoa-bridge-collapse-safety-issues-italy-government-five-star-movement-league-populists-a8492201.html
The "fairy tale" jibe at the regional president and other officials was on the party’s website, but is now deleted
The Five Star Movement (M5S), which has been leading the country’s government since earlier this year, has made political capital out of opposing major construction and infrastructure projects, which often draw opposition in Italy because they can be disruptive to local residents.
In 2013 a statement on the party’s website described warnings of “the imminent collapse of the Morandi Bridge” as a “favoletta”, an Italian word meaning a children’s fantasy tale or fairy story. The bridge collapsed on Tuesday killing at least 39 people and severing the country’s A10 motorway.
The statement has since been deleted from the party’s website, but a cached version is still visible online. It was drawn up in opposition to the “Gronda di Genova”, a major infrastructure project to improve the motorways in the city region that included work on the now collapsed bridge.
Some architects and engineers had warned that the bridge, built by Italian civil engineer Riccardo Morandi in the 1960s, suffered from fatal design flaws; reinforcement work was carried out on it in 2016 in an attempt to shore it up. A complete rebuild was not carried out to avoid disruption, however.
The statement on the M5S website accuses the regional president who backed the reinforcement work of not having read a public inquiry report into the state of the bridge, and says the party “asks ourselves what credibility those who support the great works can still have”.
Other infrastructure projects opposed by the M5S include a new high-speed rail line from Turin to the south France, which was also the subject of protests and which has been put under review by the incoming transport ministry and similarly described as a waste of money.
Improvements to the bridge were also included by the M5S on a list of infrastructure projects which could be scrapped subject to a review of the costs and benefits.
Bridges designed by the late civil engineer Mr Morandi tend to be unusual because the planner used reinforced concrete instead of steel cables for the stays of the bridge, and used relatively few cables compared to most other designs.
The story is from https://www.independent.co.uk/news/world/europe/genoa-bridge-collapse-safety-issues-italy-government-five-star-movement-league-populists-a8492201.html
Twitter CEO Jack Dorsey interviewed about Alex Jones "time out" decision
Dors
D Dorsey addresses the company’s decision to give Alex Jones, the controversial conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. to tweet for seven days.
https://www.nbcnews.com/nightly-news/video/exclusive-twitter-ceo-jack-dorsey-addresses-alex-jones-timeout-decision-1299834435689
Dors
D Dorsey addresses the company’s decision to give Alex Jones, the controversial conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. to tweet for seven days.
https://www.nbcnews.com/nightly-news/video/exclusive-twitter-ceo-jack-dorsey-addresses-alex-jones-timeout-decision-1299834435689
ConAgra seeks US Supreme Court cert of lead-paint judgment it says is "retroactively imposing massive liability based on a defendant’s nearly century-old promotion of its then-lawful products without requiring proof of reliance thereon or injury therefrom. . . ."
The cert petition is here: http://www.leadlawsuits.com/wp-content/uploads/2018/07/ConAgra-cert-petition.pdf
The cert petition statement of questions presented:
Petitioners (or their predecessors) are two of the dozens of companies that promoted lead pigments for use in house paints from the late-nineteenth to midtwentieth centuries, when interior residential use of lead paint was both lawful and widespread. Now, decades later, the decision below has deemed those lawful activities a “public nuisance,” and has ordered petitioners to pay hundreds of millions of dollars to remedy the continued existence of lead paint inside residences constructed before 1951 in ten of the most populous counties in California.
This massive judgment was not imposed because petitioners’ paint was traced to any such residence. Instead, the linchpin for imposing this massive liability was petitioners’ speech, not their paint. Yet plaintiffs were expressly relieved of any need to demonstrate that anyone relied on the speech for which petitioners were held liable. In fact, plaintiffs stipulated that they had no proof of reliance, and the trial court expressly held that no such proof was required. Instead, under the legal ruling below, it was enough that petitioners (or their predecessors) promoted lead paint for interior residential use during the first half of the twentieth century. In short, petitioners were ordered to pay hundreds of millions of dollars to remediate a decades-old problem that plaintiffs were not required to trace to either petitioners’ paint or their speech.
The questions presented are:
1. Whether imposing massive and retroactive “public nuisance” liability without requiring proof that the defendant’s nearly century-old conduct caused any ii individual plaintiff any injury violates the Due Process Clause.
2. Whether retroactively imposing massive liability based on a defendant’s nearly century-old promotion of its then-lawful products without requiring proof of reliance thereon or injury therefrom violates the First Amendment.
Santa Clara county provides its summary of the case history in April, at https://www.sccgov.org/sites/cco/leadpaint/Documents/Fact%20Sheet%20Re%20Lawsuit.pdf
The Santa Clara summary follows:
In 2000, the County of Santa Clara filed this landmark case to hold former lead paint manufacturers responsible for promoting lead paint for use in homes despite their knowledge that the product was highly toxic. Young children are especially vulnerable to lead poisoning, and lead paint is the predominance source of lead poisoning. There is no known level of exposure to lead that is considered safe, and the effects of lead poisoning are irreversible. Lower level exposure can result in reduced IQ and attention, and high level exposure can result in coma, convulsions and death.
Nine other California cities and counties joined the lawsuit, with the County of Santa Clara taking the lead role in prosecuting the case on behalf of the People of the State of California. The other cities and counties involved are the City and County of San Francisco, the Cities of Oakland and San Diego, and the Counties of Alameda, Los Angeles, Monterey, San Mateo, Solano, and Ventura.
In 2014, the Santa Clara County Superior Court issued a lengthy decision holding The SherwinWilliams Company, ConAgra Grocery Products Company, and NL Industries, Inc. (collectively, “Manufacturers”) accountable for creating a public nuisance in the ten cities and counties involved in the lawsuit. The public nuisance created by these Manufacturers consists of the collective presence of lead paint in the interiors of homes in the ten cities and counties.1 The 1 Notably, the court did not find that lead paint on any individual property is a public nuisance.
Manufacturers were ordered to pay $1.15 billion to fund (1) inspection for, and abatement of, lead paint and lead-contaminated dust from the interiors of homes and lead-contaminated soil around homes built in 1980 or earlier in the ten cities and counties, (2) remediation of any structural deficiencies in the homes that would cause the lead control measures to fail, and (3) public education and outreach necessary for the program. The ten cities and counties were designated to oversee the lead inspection and abatement program in their respective jurisdictions. Property owners’ participation would be entirely voluntary, and any unspent funds after four years would revert back to the Manufacturers.
In 2017, the Court of Appeal upheld the Superior Court’s determination that the Manufacturers were liable for creating a public nuisance in the ten cities and counties. (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51.) However, the Court of Appeal limited their responsibility to homes built before 1951 in the ten jurisdictions. In February 2018, the California Superior Court announced that it would not review the Court of Appeal’s decision. The Manufacturers plan to further appeal the decision to the U.S. Supreme Court. In the meantime, however, the case is returning to the Superior Court to (1) calculate the amount that the Manufacturers must pay for pre-1951 homes only and (2) decide on a receiver to administer the fund and distribute.
The cert petition is here: http://www.leadlawsuits.com/wp-content/uploads/2018/07/ConAgra-cert-petition.pdf
The cert petition statement of questions presented:
Petitioners (or their predecessors) are two of the dozens of companies that promoted lead pigments for use in house paints from the late-nineteenth to midtwentieth centuries, when interior residential use of lead paint was both lawful and widespread. Now, decades later, the decision below has deemed those lawful activities a “public nuisance,” and has ordered petitioners to pay hundreds of millions of dollars to remedy the continued existence of lead paint inside residences constructed before 1951 in ten of the most populous counties in California.
This massive judgment was not imposed because petitioners’ paint was traced to any such residence. Instead, the linchpin for imposing this massive liability was petitioners’ speech, not their paint. Yet plaintiffs were expressly relieved of any need to demonstrate that anyone relied on the speech for which petitioners were held liable. In fact, plaintiffs stipulated that they had no proof of reliance, and the trial court expressly held that no such proof was required. Instead, under the legal ruling below, it was enough that petitioners (or their predecessors) promoted lead paint for interior residential use during the first half of the twentieth century. In short, petitioners were ordered to pay hundreds of millions of dollars to remediate a decades-old problem that plaintiffs were not required to trace to either petitioners’ paint or their speech.
The questions presented are:
1. Whether imposing massive and retroactive “public nuisance” liability without requiring proof that the defendant’s nearly century-old conduct caused any ii individual plaintiff any injury violates the Due Process Clause.
2. Whether retroactively imposing massive liability based on a defendant’s nearly century-old promotion of its then-lawful products without requiring proof of reliance thereon or injury therefrom violates the First Amendment.
Santa Clara county provides its summary of the case history in April, at https://www.sccgov.org/sites/cco/leadpaint/Documents/Fact%20Sheet%20Re%20Lawsuit.pdf
The Santa Clara summary follows:
In 2000, the County of Santa Clara filed this landmark case to hold former lead paint manufacturers responsible for promoting lead paint for use in homes despite their knowledge that the product was highly toxic. Young children are especially vulnerable to lead poisoning, and lead paint is the predominance source of lead poisoning. There is no known level of exposure to lead that is considered safe, and the effects of lead poisoning are irreversible. Lower level exposure can result in reduced IQ and attention, and high level exposure can result in coma, convulsions and death.
Nine other California cities and counties joined the lawsuit, with the County of Santa Clara taking the lead role in prosecuting the case on behalf of the People of the State of California. The other cities and counties involved are the City and County of San Francisco, the Cities of Oakland and San Diego, and the Counties of Alameda, Los Angeles, Monterey, San Mateo, Solano, and Ventura.
In 2014, the Santa Clara County Superior Court issued a lengthy decision holding The SherwinWilliams Company, ConAgra Grocery Products Company, and NL Industries, Inc. (collectively, “Manufacturers”) accountable for creating a public nuisance in the ten cities and counties involved in the lawsuit. The public nuisance created by these Manufacturers consists of the collective presence of lead paint in the interiors of homes in the ten cities and counties.1 The 1 Notably, the court did not find that lead paint on any individual property is a public nuisance.
Manufacturers were ordered to pay $1.15 billion to fund (1) inspection for, and abatement of, lead paint and lead-contaminated dust from the interiors of homes and lead-contaminated soil around homes built in 1980 or earlier in the ten cities and counties, (2) remediation of any structural deficiencies in the homes that would cause the lead control measures to fail, and (3) public education and outreach necessary for the program. The ten cities and counties were designated to oversee the lead inspection and abatement program in their respective jurisdictions. Property owners’ participation would be entirely voluntary, and any unspent funds after four years would revert back to the Manufacturers.
In 2017, the Court of Appeal upheld the Superior Court’s determination that the Manufacturers were liable for creating a public nuisance in the ten cities and counties. (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51.) However, the Court of Appeal limited their responsibility to homes built before 1951 in the ten jurisdictions. In February 2018, the California Superior Court announced that it would not review the Court of Appeal’s decision. The Manufacturers plan to further appeal the decision to the U.S. Supreme Court. In the meantime, however, the case is returning to the Superior Court to (1) calculate the amount that the Manufacturers must pay for pre-1951 homes only and (2) decide on a receiver to administer the fund and distribute.
Opinion from Sanchez of DMN:
If Sony’s acquisition for EMI Music Publishing goes through, will it really harm the music market?
The Independent Music Companies Association (IMPALA) has filed two complaints with the European Commission. The organization, which represents the indie music community in Europe, fears Sony will eclipse the competition in the European digital music space.
IMPALA’s complaints come as Sony has prepared the process for lawmakers to approve its acquisition bid of EMI Music Publishing.
Sony, which already held a 30% EMI stake, completed its ownership across two transactions. First, it agreed to purchase 60% of EMI from a consortium led primarily by Mubadala for $2.3 billion earlier this year. Then, it acquired the remaining 10% stake from the Michael Jackson Estate for $287.5 million.
According to IMPALA, the number of songs the company controls would double from 2.16 million to 4.21 million. This would make Sony “the biggest and most formidable music company in the world.”
In addition, the independent organization argues that the Commission had previously approved Sony’s initial stake in EMI, but on a partial basis. The European Commission ruled the company couldn’t combine EMI with its own current publishing and recording operations.
IMPALA explains,
“When Sony became a shareholder in the consortium structure which acquired EMI Music Publishing in 2012, the European Commission said Sony would control too much music and insisted on divestments. It only approved the transaction on the basis that EMI would be run separately and would not be combined with Sony’s own publishing or recording operations. This was reconfirmed in 2016, when the Commission allowed [the company] to buy out the proportion of Sony/ATV that it did not already own.”
Railing against the potential acquisition, Helen Smith, Executive Chair of IMPALA, argues,
“It cannot be overemphasized that this is completely different to an ordinary change from joint to sole control. It’s like seeking to merge two majors. That would never be allowed and neither should this. Sony’s latest financial results confirm that ‘EMI will become a wholly-owned subsidiary…’”
But has IMPALA simply exaggerated Sony’s potential market reach with EMI?
For starters, Sony’s acquisition of EMI Music Publishing wouldn’t create the largest music company in the world. That would still be Universal Music Group. Though strictly on a publishing basis, Smith is correct: Sony+EMI would become the largest music publisher in the world.
Sony already negotiates on behalf of EMI Music Publishing as its administrator. In fact, some of EMI’s staff already serve at Sony/ATV.
Billboard notes the music company currently uses “the combined clout to strike deals with digital services.” Sony/ATV staff also “run the two catalogs as one portfolio.” That structure may contradict Smith’s worst-case scenario.
Yet, she continues on.
“If permitted, this transaction would also harm collecting societies, songwriters and composers, and consumers who would face higher charges for music services.”
But, has it really?
Smith adds,
“Our view is that the transaction has to be blocked. EMI would have a better future as a stand-alone operation or combined with another smaller music company to make a more effective competitor to the majors.”
So, what’s next?
First, Sony has to file the necessary paperwork for approval. The European Commission will then review the transaction. The independent organization writes the company’s competitors and other market participants will receive questionnaires to answer.
The European Commission will finally assess the transaction and decide whether it would lead to a ‘significant impediment.’
If so, it would decide whether to block the transaction or stipulate certain acquisition conditions.
Source: https://www.digitalmusicnews.com/2018/08/14/sony-emi-music-publishing-acquisition-impala/
If Sony’s acquisition for EMI Music Publishing goes through, will it really harm the music market?
The Independent Music Companies Association (IMPALA) has filed two complaints with the European Commission. The organization, which represents the indie music community in Europe, fears Sony will eclipse the competition in the European digital music space.
IMPALA’s complaints come as Sony has prepared the process for lawmakers to approve its acquisition bid of EMI Music Publishing.
Sony, which already held a 30% EMI stake, completed its ownership across two transactions. First, it agreed to purchase 60% of EMI from a consortium led primarily by Mubadala for $2.3 billion earlier this year. Then, it acquired the remaining 10% stake from the Michael Jackson Estate for $287.5 million.
According to IMPALA, the number of songs the company controls would double from 2.16 million to 4.21 million. This would make Sony “the biggest and most formidable music company in the world.”
In addition, the independent organization argues that the Commission had previously approved Sony’s initial stake in EMI, but on a partial basis. The European Commission ruled the company couldn’t combine EMI with its own current publishing and recording operations.
IMPALA explains,
“When Sony became a shareholder in the consortium structure which acquired EMI Music Publishing in 2012, the European Commission said Sony would control too much music and insisted on divestments. It only approved the transaction on the basis that EMI would be run separately and would not be combined with Sony’s own publishing or recording operations. This was reconfirmed in 2016, when the Commission allowed [the company] to buy out the proportion of Sony/ATV that it did not already own.”
Railing against the potential acquisition, Helen Smith, Executive Chair of IMPALA, argues,
“It cannot be overemphasized that this is completely different to an ordinary change from joint to sole control. It’s like seeking to merge two majors. That would never be allowed and neither should this. Sony’s latest financial results confirm that ‘EMI will become a wholly-owned subsidiary…’”
But has IMPALA simply exaggerated Sony’s potential market reach with EMI?
For starters, Sony’s acquisition of EMI Music Publishing wouldn’t create the largest music company in the world. That would still be Universal Music Group. Though strictly on a publishing basis, Smith is correct: Sony+EMI would become the largest music publisher in the world.
Sony already negotiates on behalf of EMI Music Publishing as its administrator. In fact, some of EMI’s staff already serve at Sony/ATV.
Billboard notes the music company currently uses “the combined clout to strike deals with digital services.” Sony/ATV staff also “run the two catalogs as one portfolio.” That structure may contradict Smith’s worst-case scenario.
Yet, she continues on.
“If permitted, this transaction would also harm collecting societies, songwriters and composers, and consumers who would face higher charges for music services.”
But, has it really?
Smith adds,
“Our view is that the transaction has to be blocked. EMI would have a better future as a stand-alone operation or combined with another smaller music company to make a more effective competitor to the majors.”
So, what’s next?
First, Sony has to file the necessary paperwork for approval. The European Commission will then review the transaction. The independent organization writes the company’s competitors and other market participants will receive questionnaires to answer.
The European Commission will finally assess the transaction and decide whether it would lead to a ‘significant impediment.’
If so, it would decide whether to block the transaction or stipulate certain acquisition conditions.
Source: https://www.digitalmusicnews.com/2018/08/14/sony-emi-music-publishing-acquisition-impala/
Harvard study on water pollution across the US -- PFAs
A two year old but still relevant study of levels of a widely used class of industrial chemicals linked with cancer and other health problems—polyfluoroalkyl and perfluoroalkyl substances (PFASs)—shows federally recommended safety levels exceeded in public drinking water supplies for six million people in the U.S. The study was led by researchers from Harvard T.H. Chan School of Public Health and the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS).
The study is published in Environmental Science & Technology Letters. http://pubs.acs.org/doi/pdf/10.1021/acs.estlett.6b00260
“For many years, chemicals with unknown toxicities, such as PFASs, were allowed to be used and released to the environment, and we now have to face the severe consequences,” said lead author Xindi Hu, a doctoral student in the Department of Environmental Health at Harvard Chan School and Environmental Science and Engineering at SEAS. “In addition, the actual number of people exposed may be even higher than our study found, because government data for levels of these compounds in drinking water is lacking for almost a third of the U.S. population—about 100 million people.”
PFASs have been used over the past 60 years in industrial and commercial products ranging from food wrappers to clothing to pots and pans. They have been linked with cancer, hormone disruption, high cholesterol, and obesity. Although several major manufacturers have discontinued the use of some PFASs, the chemicals continue to persist in people and wildlife. Drinking water is one of the main routes through which people can be exposed.
The researchers looked at concentrations of six types of PFASs in drinking water supplies, using data from more than 36,000 water samples collected nationwide by the U.S. Environmental Protection Agency (EPA) from 2013–2015. They also looked at industrial sites that manufacture or use PFASs; at military fire training sites and civilian airports where fire-fighting foam containing PFASs is used; and at wastewater treatment plants. Discharges from these plants—which are unable to remove PFASs from wastewater by standard treatment methods—could contaminate groundwater. So could the sludge that the plants generate and which is frequently used as fertilizer.
Source: https://www.hsph.harvard.edu/news/press-releases/toxic-chemicals-drinking-water/
A two year old but still relevant study of levels of a widely used class of industrial chemicals linked with cancer and other health problems—polyfluoroalkyl and perfluoroalkyl substances (PFASs)—shows federally recommended safety levels exceeded in public drinking water supplies for six million people in the U.S. The study was led by researchers from Harvard T.H. Chan School of Public Health and the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS).
The study is published in Environmental Science & Technology Letters. http://pubs.acs.org/doi/pdf/10.1021/acs.estlett.6b00260
“For many years, chemicals with unknown toxicities, such as PFASs, were allowed to be used and released to the environment, and we now have to face the severe consequences,” said lead author Xindi Hu, a doctoral student in the Department of Environmental Health at Harvard Chan School and Environmental Science and Engineering at SEAS. “In addition, the actual number of people exposed may be even higher than our study found, because government data for levels of these compounds in drinking water is lacking for almost a third of the U.S. population—about 100 million people.”
PFASs have been used over the past 60 years in industrial and commercial products ranging from food wrappers to clothing to pots and pans. They have been linked with cancer, hormone disruption, high cholesterol, and obesity. Although several major manufacturers have discontinued the use of some PFASs, the chemicals continue to persist in people and wildlife. Drinking water is one of the main routes through which people can be exposed.
The researchers looked at concentrations of six types of PFASs in drinking water supplies, using data from more than 36,000 water samples collected nationwide by the U.S. Environmental Protection Agency (EPA) from 2013–2015. They also looked at industrial sites that manufacture or use PFASs; at military fire training sites and civilian airports where fire-fighting foam containing PFASs is used; and at wastewater treatment plants. Discharges from these plants—which are unable to remove PFASs from wastewater by standard treatment methods—could contaminate groundwater. So could the sludge that the plants generate and which is frequently used as fertilizer.
Source: https://www.hsph.harvard.edu/news/press-releases/toxic-chemicals-drinking-water/
California jury awards $289 million to man who claimed Monsanto's Roundup pesticide caused cancer
www.latimes.com/business/la-fi-roundup-verdict-20180810-story.html
A civil jury in San Francisco granted a $289 judgment to a groundskeeper who said his lymphoma resulted from years of applying Monsanto's
Roundup pesticide. From the LA Times article:
Scott Partridge, Monsanto’s vice president of global strategy: “Today’s decision does not change the fact that more than 800 scientific studies and reviews — and conclusions by the U.S. Environmental Protection Agency, the U.S. National Institutes of Health and regulatory authorities around the world — support the fact that glyphosate does not cause cancer, and did not cause Mr. Johnson’s cancer.”
****
Having inherited a company long vilified by environmental activists as “Monsatan,” Bayer faces high potential liabilities from hundreds of similar lawsuits, along with a battle over adding a cancer warning label on products sold in California.
A U.S. District Court judge earlier this year temporarily halted moves by California to require a cancer warning label under Proposition 65, the Safe Drinking Water and Toxic Enforcement Act, passed by voters in 1986.
California’s decision to include [Rounndup ingredient] glyphosate on its list of chemicals linked to cancer followed a 2015 ruling by the Europe-based International Agency for Research on Cancer that the chemical is a “probable” carcinogen.
The U.S. EPA as well as its counterpart agencies in the European Union have disagreed with the conclusion reached by that panel, which is part of the World Health Organization. Last December, the U.S. EPA ruled that glyphosate was “not likely” to cause cancer.
DAR comment: It is striking that the jury declined to follow the views of federal government agencies, the EPA and NIH
www.latimes.com/business/la-fi-roundup-verdict-20180810-story.html
A civil jury in San Francisco granted a $289 judgment to a groundskeeper who said his lymphoma resulted from years of applying Monsanto's
Roundup pesticide. From the LA Times article:
Scott Partridge, Monsanto’s vice president of global strategy: “Today’s decision does not change the fact that more than 800 scientific studies and reviews — and conclusions by the U.S. Environmental Protection Agency, the U.S. National Institutes of Health and regulatory authorities around the world — support the fact that glyphosate does not cause cancer, and did not cause Mr. Johnson’s cancer.”
****
Having inherited a company long vilified by environmental activists as “Monsatan,” Bayer faces high potential liabilities from hundreds of similar lawsuits, along with a battle over adding a cancer warning label on products sold in California.
A U.S. District Court judge earlier this year temporarily halted moves by California to require a cancer warning label under Proposition 65, the Safe Drinking Water and Toxic Enforcement Act, passed by voters in 1986.
California’s decision to include [Rounndup ingredient] glyphosate on its list of chemicals linked to cancer followed a 2015 ruling by the Europe-based International Agency for Research on Cancer that the chemical is a “probable” carcinogen.
The U.S. EPA as well as its counterpart agencies in the European Union have disagreed with the conclusion reached by that panel, which is part of the World Health Organization. Last December, the U.S. EPA ruled that glyphosate was “not likely” to cause cancer.
DAR comment: It is striking that the jury declined to follow the views of federal government agencies, the EPA and NIH
"District Dig" blog reports on allegations that lobbyists were influential in DCRA’s sign regulation enforcement effort against the Digi company
www.districtdig.com/2018/08/07/inside-game/
The publiication reports AG Racines's response, which includes the following: “I hold our attorneys at the Office of the Attorney General to very high professional standards. While the actions of the DCRA lawyer fell short of professional obligations, no one alleged—nor did the Court find—that any attorney employed by OAG acted improperly."
Posting by Don Allen Resnikoff
www.districtdig.com/2018/08/07/inside-game/
The publiication reports AG Racines's response, which includes the following: “I hold our attorneys at the Office of the Attorney General to very high professional standards. While the actions of the DCRA lawyer fell short of professional obligations, no one alleged—nor did the Court find—that any attorney employed by OAG acted improperly."
Posting by Don Allen Resnikoff
From David Balto: PBM 101
My testimony makes the following points:
PBMs are one of the least regulated sectors of the health care system. There is no federal regulation and only a modest level of state regulation.
The PBM market lacks the essential elements for a competitive market: (1) transparency, (2) choice and (3) a lack of conflicts of interest.
The lack of enforcement, regulation, and competition has created a witches brew in which PBMs reign free to engage in anticompetitive, deceptive and fraudulent conduct that harms consumers, employers and unions, and pharmacists. The profits of the major PBMs are increasing at a rapid pace, exceeding $6 billion annually. As drug prices increase rapidly, PBMs are not adequately fulfilling their function in controlling costs
– indeed PBM profits are increasing at the same time drug costs increase because they secure higher rebates from these cost increases. Plan sponsors (employers and unions) cannot attack this problem because PBMs fail to provide adequate transparency.
See http://www.dcantitrustlaw.com/assets/content/documents/testimony/PBM%20Testimony.Balto.pdf
My testimony makes the following points:
PBMs are one of the least regulated sectors of the health care system. There is no federal regulation and only a modest level of state regulation.
The PBM market lacks the essential elements for a competitive market: (1) transparency, (2) choice and (3) a lack of conflicts of interest.
The lack of enforcement, regulation, and competition has created a witches brew in which PBMs reign free to engage in anticompetitive, deceptive and fraudulent conduct that harms consumers, employers and unions, and pharmacists. The profits of the major PBMs are increasing at a rapid pace, exceeding $6 billion annually. As drug prices increase rapidly, PBMs are not adequately fulfilling their function in controlling costs
– indeed PBM profits are increasing at the same time drug costs increase because they secure higher rebates from these cost increases. Plan sponsors (employers and unions) cannot attack this problem because PBMs fail to provide adequate transparency.
See http://www.dcantitrustlaw.com/assets/content/documents/testimony/PBM%20Testimony.Balto.pdf
New NewsHour video: Michael Carrier explains PBM pricing -- video
https://www.youtube.com/watch?v=_4_WNFPnmO8
https://www.youtube.com/watch?v=_4_WNFPnmO8
Source documents on NYC crackdown on Uber
The legislative package: One will stop the TLC from issuing new licenses for FHVs for one year, with the exception of wheelchair-accessible vehicles, while the city studies how the services impact traffic. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3331789&GUID=6647E630-2992-461F-B3E3-F5103DED0653&Options=ID%7cText%7c&Search=144
Another will enact new regulations on high-volume FHV services like Uber and Lyft, requiring them to provide data on usage and charges, as well as impose a fine of $10,000 for those who do not comply.http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3479666&GUID=01C67FF7-C56D-474A-BA53-E83A23173FA7&Options=ID%7cText%7c&Search=838
Geographic restrictions, as well as a minimum wage for FHV drivers, will also be implemented through other measures. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3487613&GUID=E47BF280-2CAC-45AE-800F-ED5BE846EFF4&Options=&Search=
Members of the City Council also support “driver assistance centers” that would help struggling cab drivers. http://www.nydailynews.com/news/politics/ny-pol-taxi-bills-20180806-story.html
The legislative package: One will stop the TLC from issuing new licenses for FHVs for one year, with the exception of wheelchair-accessible vehicles, while the city studies how the services impact traffic. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3331789&GUID=6647E630-2992-461F-B3E3-F5103DED0653&Options=ID%7cText%7c&Search=144
Another will enact new regulations on high-volume FHV services like Uber and Lyft, requiring them to provide data on usage and charges, as well as impose a fine of $10,000 for those who do not comply.http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3479666&GUID=01C67FF7-C56D-474A-BA53-E83A23173FA7&Options=ID%7cText%7c&Search=838
Geographic restrictions, as well as a minimum wage for FHV drivers, will also be implemented through other measures. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3487613&GUID=E47BF280-2CAC-45AE-800F-ED5BE846EFF4&Options=&Search=
Members of the City Council also support “driver assistance centers” that would help struggling cab drivers. http://www.nydailynews.com/news/politics/ny-pol-taxi-bills-20180806-story.html
Graying of U.S.-- Bankruptcy: Fallout from Life in a Risk Society
Deborah ThorneUniversity of Idaho
Pamela FooheyIndiana University Maurer School of Law
Robert M. LawlessUniversity of Illinois College of Law
Katherine M. PorterUniversity of California - Irvine School of Law
Date Written: August 5, 2018
Abstract:
The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net. As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers. For an increasing number of older Americans, their golden years are fraught with economic risks, the result of which is often bankruptcy.
Citation:
Thorne, Deborah and Foohey, Pamela and Lawless, Robert M. and Porter, Katherine M., Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society (August 5, 2018). Available at SSRN: https://ssrn.com/abstract=3226574
Deborah ThorneUniversity of Idaho
Pamela FooheyIndiana University Maurer School of Law
Robert M. LawlessUniversity of Illinois College of Law
Katherine M. PorterUniversity of California - Irvine School of Law
Date Written: August 5, 2018
Abstract:
The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net. As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers. For an increasing number of older Americans, their golden years are fraught with economic risks, the result of which is often bankruptcy.
Citation:
Thorne, Deborah and Foohey, Pamela and Lawless, Robert M. and Porter, Katherine M., Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society (August 5, 2018). Available at SSRN: https://ssrn.com/abstract=3226574
From Public Citizen Consumer Blog
Will the OCC Try to Preempt State Consumer Protection Rules in FinTech, as It Once Did for Predatory Lending?
by Jeff Sovern
That's the question David Dayen raises in an important essay in InTheseTimes, Trump Appointees Are Pushing a Deregulation Plan That Could Dramatically Erode Consumer Protections. As Dayen points out, in the run-up to the Great Recession, the OCC proclaimed that state anti-predatory lending laws were preempted as to national banks. We know how that ended. Now the OCC has announced that it will accept national bank charters from FinTech companies. When states try to regulate FinTech, will the OCC attempt to preempt their efforts too? For example, will the OCC enable nationally-chartered FinTech companies to skirt state limits on payday lending? That would be an ironic twist from lawmakers usually quick to claim the mantle of states' rights, and any such effort is likely to be subject to court challenges, but we could be headed there. Under the Dodd-Frank Act, section 1044, it is probably going to depend on whether the state "law prevents or significantly interferes with the exercise by the national bank of its powers." I haven't looked into that issue enough to know whether this would qualify. But if, as seems likely for the next five or so years, we can't count on the CFPB to protect consumers, and state efforts to protect them can be preempted, consumers could be in trouble when it comes to predatory lending.
Posted by Jeff Sovern on Saturday, August 04, 2018 at 04:33 PM in Predatory Lending | Permalink
NYT:Steel Giants With Ties to Trump Officials Block Tariff Relief for Hundreds of Firms
Nucor and United States Steel have exercised veto power, so far without fail, over other companies, forcing them to buy their products instead of steel from abroad.
https://www.nytimes.com/2018/08/05/us/politics/nucor-us-steel-tariff-exemptions.html?rref=collection%2Fsectioncollection%2Fbusiness
From the International Steel Institute's litigation challenging the Constitutionality of the President's imposition of tariffs
MEMORANDUM IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT: INTRODUCTION AND SUMMARY OF ARGUMENT
This is an action seeking a declaratory judgment and an injunction against the enforcement of section 232 of the Trade Expansion Act of 1962, as amended, 19 U.S.C. § 1862 (“section 232”), on the ground that it constitutes an improper delegation of legislative authority to the President, in violation of Article I, section 1 of the Constitution and the doctrine of separation of powers and the system of checks and balances that the Constitution protects. The specific claim before this Court arises from the actions of the President, through proclamations issued under section 232, in which he imposed a 25% ad valorem tariff on steel products imported into the United States from most, but not all, countries (“the 25% tariff”).
As a facial challenge to section 232, this case should be decided on cross-motions for summary judgment. To demonstrate the injuries caused them by section 232 and the 25% tariff, Plaintiffs have submitted the declarations of Richard Chriss, President of Plaintiff American Institute for International Steel, Inc. (“AIIS”); John Foster, President of Plaintiff Kurt Orban Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 10 of 54 2 Partners, LLC (“Orban”); and Charles Scianna, President of Plaintiff Sim-Tex, LP (“Sim-Tex”).
In further support of their motion, Plaintiffs cite to the four proclamations of the President that imposed the 25% tariff and then modified the countries whose steel products are subject to it, as well as to the procedures that the Secretary of Commerce (the “Secretary”) issued to respond to individual requests by U.S. companies for product-specific exclusions from the 25% tariff.
Finally, this memorandum includes citations to the Steel Report prepared by the Secretary in support of his finding for the President that steel imports may threaten to impair the national security, as that term is broadly defined in section 232. Included as an appendix to the Steel Report are the written statements submitted by 37 witnesses who testified before the Department of Commerce (“Commerce”) on May 24, 2017. The Steel Report also contains a link to the written statements submitted by more than 200 other interested persons to the Secretary for his consideration, some of which will also be cited herein. The citations to these statements are not to establish the truth of what they assert, but to establish the many ways that those who rely on imported steel in their businesses informed Commerce that the tariffs would affect them. Those statements are significant because they are the kind of effects that a 25% steel tariff would be expected to produce, and yet, most pertinent to this challenge, section 232 does not (a) require the President to take them into account in selecting the means to respond to the perceived threat that imported steel products may impair the national security, (b) forbid him from taking them into account, (c) forbid him to take some into account, but not others; or most importantly (d) provide him with any guidance on whether and how to take these factors into account. Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 11 of 54 3
This case challenges the constitutionality of section 232 because Congress has essentially turned over to the President the constitutional authority “[t]o lay and collect [t]axes, [d]uties, [i]mposts and [e]xcises,” expressly given in Article I, section 8 of the Constitution to Congress. U.S. CONST., art. 1, § 8, cl. 1. Section 232 does that without providing the kind of “intelligible principle” required by the Supreme Court in J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409 (1928), to satisfy the nondelegation doctrine and the mandate of Article I that the legislature, not the President, make the laws.
Section 232, like most statutes challenged on nondelegation grounds, has two components, each of which must contain an intelligible principle to guide its application. First, there is a trigger, which is the finding needed to make the statute operative, in this case a conclusion that imports may “threaten to impair the national security.” 19 U.S.C. § 1862(b)(3)(A). Second, once the trigger has been found, the statute gives the designated official the authority to select the remedies (or means of implementation).
Specifically, section 232 allows the President, in his unbridled discretion, to “determine the nature and duration of the action that, in the judgment of the President, must be taken to adjust the imports of the [imported] article and its derivatives so that such imports will not threaten to impair the national security.” 19 U.S.C. § 1862(c)(1)(A)(ii). As we describe below, section 232 provides no restraints that limit the President’s invoking the trigger or in his choice of remedies—tariffs, quotas, or something else—in what amounts, as applied to which products, and to which countries.
In essence, in section 232 Congress has transferred to the President the ability to make the essential policy choices that the Constitution assigns to Congress and Congress is required to retain under our Constitution and the principles of separation of powers that animate it. For that Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 12 of 54 4 reason, section 232 is like the Line Item Veto Act, which was condemned by the Supreme Court in Clinton v. City of New York, 524 U.S. 417 (1998), because that Act purported to permit the President to use the “cancellation” process in that Act to reject the policy choices made by Congress in the parts of a law that he “canceled.”
To be sure, the Court in Clinton did not rely on the nondelegation doctrine on which Plaintiffs rely here, but the structural flaw of presidential versus congressional lawmaking is present in both. There is another aspect of section 232 that reinforces the conclusion that it is unconstitutional. When today so much of the power to implement the laws has been assigned to the President or administrative agencies, Congress has provided important checks on their use of those powers to assure that the laws are carried out as Congress provided. But section 232 contains none of the procedural safeguards found in rulemakings governed by the Administrative Procedure Act.
Moreover, section 232 has no provision for judicial review, and because discretionary decisions like that imposing the 25% tariff here are made by the President, they are not subject to judicial review under the Administrative Procedure Act. The result is that Congress created an unconstitutional regime in section 232, in which there are essentially no limits or guidelines on the trigger or the remedies available to the President, and no alternative protections to assure that the President stays within the law, instead of making the law himself.
The motion papers are at http://www.aiis.org/wp-content/uploads/2018/07/2018.07.19-Plaintiffs-Motion-Proposed-Order-Memo-for-Summary-Judgment-MMM-from-docket.pdf
The WSJ's Greg Ip explains Donald Trump's policy of picking industry winners and losers
Greg Ip says that President Donald Trump is steering U.S. economic policy in a radically new direction. From trying to revive steelmakers with tariffs to vetoing Chinese technology investments, he is using the federal government to direct which industries prosper and which don’t.
Ip explains that many countries have long tilted the playing field toward favored companies and industries, a practice economists call industrial policy. American presidents have traditionally resisted this as “picking winners.”
The president has broken with that tradition, unveiling a series of actions on trade, foreign investment and energy he hopes will revive favored industries and beat back the competitive challenge of other countries—but which risk creating domestic losers.
Ip's point is that whether it is imposing tariffs to protect the steel industry at the expense of industries that use steel, propping up the dying coal industry or seeking to raise postal rates on Amazon, Trump has become a practitioner of industrial policy of the type conservatives traditionally have shunned. DAR
Drawn from https://www.wsj.com/articles/trumps-emerging-economic-policy-picking-winners-and-losers-1532100935# (paywall)
From Open Markets Institute:
As Independent Grocery Stores Wane and Amazon Looms, Wholesale Middlemen Merge
DAR comment: This article focuses on the supply chain issues relevant to independent groceries. Supply seems crucial to survival of independent groceries, whether their goal is healthy food or providing alternatives in poor neighborhood food deserts.
Last week, organic and natural foods distributor, United Natural Foods Inc. (UNFI) announced plans to buy the largest publicly traded grocery wholesaler, Supervalu, for just under $3 billion. The deal is largely a defensive move by UNFI after Amazon bought their largest customer, Whole Foods.
The takeover is the latest step in a larger trend of grocery consolidation that has greatly reduced the ranks of independent regional groceries and the wholesalers that supply them. As supermarkets and wholesalers try to “get big or get out,” producers at the end of the supply chain feel the squeeze from fewer and bigger buyers.
Between 1992 and 2013, the market share of America’s top twenty grocery stores increased from 39 percent to 64 percent, while the share of just the top four chains more than doubled, from 17 percent to 36 percent. This shifted the majority of the grocery business from smaller regional chains to increasingly large national brands. Today, independent grocers represent only 25 percent of all grocery sales.
The larger a grocer becomes, the more likely they are to cut out the middleman. “Once you get to a certain level it’s easier to have your own warehouses and be self-supplied,” explains grocery analyst David Livingston of DJL Research. WalMart, Kroger, Costco, and Publix are among the chains that increasingly rely on in-house distribution networks.
“There are fewer big wholesalers left today,” says Neil Stern, Senior Partner for retail analysts, McMillan Doolittle. Indeed, between 1997 and 2000 alone, there were 105 grocery wholesaler mergers and acquisitions. In ten years, the market share of the four largest independent grocery wholesalers went from 52 percent in 1997 to 87 percent in 2007. This consolidation has continued. In just the past two years, Supervalu acquired regional wholesalers Central Grocers, Associated Grocers of Florida, and Unified Grocers.
Even though Supervalu bought many of its rivals, the wholesaler’s customer base continued to shrink. “Supervalu’s customers include small- to mid-sized supermarket chains,” Stern says. These are precisely the grocers that have lost the most market share over the past three decades.
To compensate, Supervalu began to vertically integrate into retail in the 1970s, through the buying of regional grocery chains. In 2006, Supervalu briefly became the third largest grocery retailer in the US, when it bought national grocery leader, Albertson’s, taking in their network of 2,150 stores.
But this takeover strategy left Supervalu heavily burdened by debt, and after just seven years the wholesaler sold Albertson’s and started divesting the rest of its retail business. The company ended up with over $1.5 billion in debt and lost 90 percent of its stock value in the process.
UNFI, meanwhile, since 2000 has acquired 19 distributors, manufacturers, and private label suppliers, and their sales have grown at a compounded rate of 12.9 percent each year. They primarily supply organic and natural foods to conventional supermarkets and independent natural chains. But, like Supervalu, in recent years UNFI has come under more pressure as their customer base has consolidated.
In the case of UNFI’s largest customer, Whole Foods, the corporation started to consolidate the organic grocery market in 1988, acquiring thirteen natural grocery chains in 20 years. Today, Whole Foods has 487 locations and accounts for a third of UNFI’s revenue. UNFI’s reliance on Whole Foods was not a major liability until the e-commerce goliath, Amazon, absorbed the chain. Some analysts believe Amazon may soon move to cut UNFI out of the business, much the way other major grocery chains have done.
“They’ve gotten a huge threat from Amazon,” explains Livingston. “They’re probably going to develop their own ways of distribution and kick UNFI to the curb.”
As UNFI and Supervalu combine their supply chains some suppliers, from packaged food companies to produce aggregators, stand to lose. “There might be some overlap in suppliers,” Stern explains, and redundant suppliers could lose contracts. But because UNFI and Supervalu generally fill different niches, Stern argues that many suppliers may benefit from access to new markets. “More scale and size…, could allow suppliers to expand their business,” Stern says.
In general, studies show that as the number of food buyers shrinks, suppliers face greater price pressure. As early as 2000, agricultural economists at UC Davis reported that growing concentration in grocery retail and wholesale created “fewer but larger buyers” for produce growers and shippers, and argued that such big “buyers may enjoy an unfair advantage in bargaining with suppliers.”
If UNFI’s big bet fails, the playing field could shrink further still. “What they’re taking on is risky,” says Livingston, “it’s not a simple acquisition.”
Can voter gerrymandering be fixed by ballot initiative and State constitutional amendment?
The Michigan Voters Not Politicians group thinks so. Here is material from their website: https://www.votersnotpoliticians.com/thesolution:
Let's end Gerrymandering in Michigan
Michigan voters can end gerrymandering in Michigan before 2021 when the next election maps are redrawn.
Voters Not Politicians’ mission is to end gerrymandering by 2018 through a citizen led ballot initiative. We have collected the required 315,654 valid signatures in 180 days, that will secure a spot in the November 6, 2018 election as a ballot measure. With a simple majority vote from the voters of Michigan, we will amend Michigan’s constitution to place an Independent Citizens Redistricting Commission in charge of redistricting, ensuring that voters will choose their politicians, not the other way around.
The proposal to end gerrymandering in Michigan
Instead of giving politicians the power to draw our voting districts - who ultimately stand to benefit from their decisions - we propose an Independent Citizens Redistricting Commission of registered Michigan voters to draw voting districts using guidelines that ensure fairness to all. We believe that the voters of Michigan - not politicians - should be entrusted with this important and monumental task.
Our proposal will eliminate political influence and bias in the redistricting process through a fair, transparent, and nonpartisan solution. Here’s how:
The proposal takes redistricting out of the backroom and ends the conflict of interest that festers when politicians have the power to choose their voters. The Independent Citizens Redistricting Commission will ensure voters choose their politicians, instead of the other way around, so that Michigan votes count and Michiganders’ voices are heard.
Amending Michigan’s constitution
In order to adopt the Independent Citizens Redistricting Commission, we must pass a constitutional amendment through a ballot initiative. Here’s how we do it:
Take Action
People across Michigan who value their votes are taking action to reform redistricting rules. If you're ready, find out how you can get involved.
The Michigan Voters Not Politicians group thinks so. Here is material from their website: https://www.votersnotpoliticians.com/thesolution:
Let's end Gerrymandering in Michigan
Michigan voters can end gerrymandering in Michigan before 2021 when the next election maps are redrawn.
Voters Not Politicians’ mission is to end gerrymandering by 2018 through a citizen led ballot initiative. We have collected the required 315,654 valid signatures in 180 days, that will secure a spot in the November 6, 2018 election as a ballot measure. With a simple majority vote from the voters of Michigan, we will amend Michigan’s constitution to place an Independent Citizens Redistricting Commission in charge of redistricting, ensuring that voters will choose their politicians, not the other way around.
The proposal to end gerrymandering in Michigan
Instead of giving politicians the power to draw our voting districts - who ultimately stand to benefit from their decisions - we propose an Independent Citizens Redistricting Commission of registered Michigan voters to draw voting districts using guidelines that ensure fairness to all. We believe that the voters of Michigan - not politicians - should be entrusted with this important and monumental task.
Our proposal will eliminate political influence and bias in the redistricting process through a fair, transparent, and nonpartisan solution. Here’s how:
- Voters, Not Politicians: An Independent Citizens Redistricting Commission (ICRC) will be in charge of the redistricting process. The Commission will be made up of 4 Democrats, 4 Republicans, and 5 voters who affiliate with neither party with representation from across the state. Political insiders (politicians, consultants, lobbyists) will be banned from serving on the Commission. Read more about how the Commissioners are selected here.
- Transparency: Instead of secret closed door meetings, the ICRC is required to conduct its business in public hearings that are open to input from across the state. All proposed maps and the methodology/data to create them must be submitted as public reports. Everything down to the variables used by the computers to draw the maps will be available to the public. Read more about how the proposal maximizes transparency, promotes meaningful public participation, and ensures independent decision-making here.
- Fairness: The fairness of any idea to reform partisan voting maps comes down to how the maps themselves end up being drawn. The ICRC is required to follow a prioritized set of criteria and standards when drawing the maps. A minimum of 2 Democrats, 2 Republicans, and 2 voters who affiliate with neither party on the Commission must approve the final maps. This prevents one political party from controlling the process. Read more about how maps are drawn here.
The proposal takes redistricting out of the backroom and ends the conflict of interest that festers when politicians have the power to choose their voters. The Independent Citizens Redistricting Commission will ensure voters choose their politicians, instead of the other way around, so that Michigan votes count and Michiganders’ voices are heard.
Amending Michigan’s constitution
In order to adopt the Independent Citizens Redistricting Commission, we must pass a constitutional amendment through a ballot initiative. Here’s how we do it:
- Create and submit a proposal to amend Michigan’s constitution.
- Collect 315,654 valid signatures on paper petitions in 180 consecutive days.
- Obtain a simple majority "yes" vote in the November 2018 general election.
Take Action
People across Michigan who value their votes are taking action to reform redistricting rules. If you're ready, find out how you can get involved.
The D.C. Palisades Citizens Association on Airplane Noise Updates
Updated April 10, 2018
Editorial note by DAR: When citizens have a complaint about private or government action, they may first try complaining, and if that fails they may turn to litigation. The available litigation procedures should be transparent, fair, and expedient. It is plain from the following report that the writers find the litigation procedures to be none of those things. DR
To file a noise complaint, click here.
Click here to see Pierre Oury's slides from his recent presentation at the library, A Pilot's Perspective
DC Fair Skies - AIRCRAFT NOISE LEGAL FIGHT UPDATE:
Unfortunately, the Court did not reach the merits of the case and dismissed the Petition for Review as untimely. Despite the lack of notice to any elected DC Government Official and the efforts by the FAA to ensure no one in DC was aware of the plan to make the LAZIR route the flight path for all northbound departures, the Court found that two small adds in the Washington Post of the intent to do an EA [Environmental Assessment] of the entire DC Metroplex and the fact that one had been completed were adequate notice. The only support for that decision is an old Supreme Court Clean Water case which sanctioned publication as a means of providing notice but did not state that it was sufficient to satisfy NEPA’s [National Environmental Policy Act] requirements that agencies make “diligent efforts to involve the public”. In this case the FAA made diligent efforts to ensure no one in DC was aware of the new flight path we challenged until it was an accomplished fact. We need to consider what if any steps we need to consider taking at this point, but pursuing our Administrative Petition with the FAA is one possible alternative to further litigation. The Opinion is found here.
Click here for the latest summary on our involvement in the Fair Skies Coalition.
Click here to listen to the Oral Argument in DC Fair Skies vs FAA that look place in the Federal Court of Appeals on January 11, 2018.
Neighborhood associations file reply brief. The Reply Brief lambasts the FAA over increased aircraft noise created by the new northern departure flight path.Click here to read it.
New report says noise complaints are up at National, Dulles airports. Click here to read the recent The Washington Post article.
Click here to read about the brief filed to challenge disruptive new aircraft noise created by the FAA’s new northern departure flight path. The brief filed represents many weeks of working through the record to find the holes in the FAA’s argument. Fair Skies then had to prepare motions to expand the record to include materials it wanted included, create statutory addendums to the brief required by the Court, and provide case and record citations for its arguments-all of which took many hours of his time.
Check out this story on jet noise that aired on WAMU in October 2016.
From: http://www.palisadesdc.org/
Updated April 10, 2018
Editorial note by DAR: When citizens have a complaint about private or government action, they may first try complaining, and if that fails they may turn to litigation. The available litigation procedures should be transparent, fair, and expedient. It is plain from the following report that the writers find the litigation procedures to be none of those things. DR
To file a noise complaint, click here.
Click here to see Pierre Oury's slides from his recent presentation at the library, A Pilot's Perspective
DC Fair Skies - AIRCRAFT NOISE LEGAL FIGHT UPDATE:
Unfortunately, the Court did not reach the merits of the case and dismissed the Petition for Review as untimely. Despite the lack of notice to any elected DC Government Official and the efforts by the FAA to ensure no one in DC was aware of the plan to make the LAZIR route the flight path for all northbound departures, the Court found that two small adds in the Washington Post of the intent to do an EA [Environmental Assessment] of the entire DC Metroplex and the fact that one had been completed were adequate notice. The only support for that decision is an old Supreme Court Clean Water case which sanctioned publication as a means of providing notice but did not state that it was sufficient to satisfy NEPA’s [National Environmental Policy Act] requirements that agencies make “diligent efforts to involve the public”. In this case the FAA made diligent efforts to ensure no one in DC was aware of the new flight path we challenged until it was an accomplished fact. We need to consider what if any steps we need to consider taking at this point, but pursuing our Administrative Petition with the FAA is one possible alternative to further litigation. The Opinion is found here.
Click here for the latest summary on our involvement in the Fair Skies Coalition.
Click here to listen to the Oral Argument in DC Fair Skies vs FAA that look place in the Federal Court of Appeals on January 11, 2018.
Neighborhood associations file reply brief. The Reply Brief lambasts the FAA over increased aircraft noise created by the new northern departure flight path.Click here to read it.
New report says noise complaints are up at National, Dulles airports. Click here to read the recent The Washington Post article.
Click here to read about the brief filed to challenge disruptive new aircraft noise created by the FAA’s new northern departure flight path. The brief filed represents many weeks of working through the record to find the holes in the FAA’s argument. Fair Skies then had to prepare motions to expand the record to include materials it wanted included, create statutory addendums to the brief required by the Court, and provide case and record citations for its arguments-all of which took many hours of his time.
Check out this story on jet noise that aired on WAMU in October 2016.
From: http://www.palisadesdc.org/
Steve Calkins on: How Might A Justice Kavanaugh Impact Antitrust Jurisprudence?
Posted on July 20, 2018 by Stephen Calkins on pro-arket.org
Throughout his judicial career, the US president’s latest nominee to the Supreme Court, Brett Kavanaugh, has written three antitrust opinions. Here, Stephen Calkins of Wayne State University Law School reviews the trends that emerge from those opinions.
'A Justice Kavanaugh—this comment simply assumes that he will be confirmed—would become the second Trump-appointed aggressively conservative, pro-business justice. Nominated at age 53, he could be expected to serve for decades.
This commentary reviews Judge Kavanaugh’s antitrust opinions.1) He has dissented from two D.C. Circuit decisions that acceded to government requests to block mergers: United States v. Anthem, Inc.;2) and FTC v. Whole Foods Market, Inc.3)The first, preventing a 4-3 merger of health insurance carriers, turned largely on arguable efficiencies. The second, objecting to the merger of the two largest “premium, natural, and organic supermarkets,” turned principally on market definition. Judge Kavanaugh also addressed antitrust in his concurring opinion in Comcast Cable Communications, LLC v. FCC,4) in which the Court rebuffed the FCC’s order requiring Comcast to carry the Tennis Channel on equal terms with comparable Comcast-owned offerings. The Court reached this result on narrow grounds. Judge Kavanaugh separately wrote a sweeping opinion disagreeing with the FCC and saying that statutory language authorizing regulations to prevent conduct that “unreasonably restrain[s]” a rival from “compet[ing] fairly by discriminating . . . on the basis of affiliation or nonaffiliation” (a) must have meant (no citation of Chevron) to allow only duplication of antitrust law, and (b) must have meant that all vertical restraints are per se protected at least absent proof of market power – which he concluded that Comcast did not have — and (c) that’s a good thing, because the First Amendment protects Comcast’s “editorial discretion” about whether to carry the Tennis Chanel.
Several themes emerge from the three opinions:
Posted on July 20, 2018 by Stephen Calkins on pro-arket.org
Throughout his judicial career, the US president’s latest nominee to the Supreme Court, Brett Kavanaugh, has written three antitrust opinions. Here, Stephen Calkins of Wayne State University Law School reviews the trends that emerge from those opinions.
'A Justice Kavanaugh—this comment simply assumes that he will be confirmed—would become the second Trump-appointed aggressively conservative, pro-business justice. Nominated at age 53, he could be expected to serve for decades.
This commentary reviews Judge Kavanaugh’s antitrust opinions.1) He has dissented from two D.C. Circuit decisions that acceded to government requests to block mergers: United States v. Anthem, Inc.;2) and FTC v. Whole Foods Market, Inc.3)The first, preventing a 4-3 merger of health insurance carriers, turned largely on arguable efficiencies. The second, objecting to the merger of the two largest “premium, natural, and organic supermarkets,” turned principally on market definition. Judge Kavanaugh also addressed antitrust in his concurring opinion in Comcast Cable Communications, LLC v. FCC,4) in which the Court rebuffed the FCC’s order requiring Comcast to carry the Tennis Channel on equal terms with comparable Comcast-owned offerings. The Court reached this result on narrow grounds. Judge Kavanaugh separately wrote a sweeping opinion disagreeing with the FCC and saying that statutory language authorizing regulations to prevent conduct that “unreasonably restrain[s]” a rival from “compet[ing] fairly by discriminating . . . on the basis of affiliation or nonaffiliation” (a) must have meant (no citation of Chevron) to allow only duplication of antitrust law, and (b) must have meant that all vertical restraints are per se protected at least absent proof of market power – which he concluded that Comcast did not have — and (c) that’s a good thing, because the First Amendment protects Comcast’s “editorial discretion” about whether to carry the Tennis Chanel.
Several themes emerge from the three opinions:
- Judge Kavanaugh is smart, energetic, and well-informed;
- He shows considerable respect for the views of defense expert witnesses;
- He is a firm believer in what he repeatedly calls “modern” antitrust law;
- Judges in the majority suggest (with some justification) that he treats the law as he wishes it were, rather than as it is; and
- He sometimes takes a concept and pushes it further than it deserves.
To see the continuation of the Calkins analysis, go to: https://promarket.org/might-justice-kavanaugh-impact-antitrust-jurisprudence/
Bid rigging at public foreclosure auctions: A Too Familiar DOJ Press Release with a Sad Detail
By Robert E. Connolly
The DOJ issued a standard press release yesterday announcing yet another individual guilty plea in its long running real estate foreclosure auction collusion investigation: Seventh Mississippi Real Estate Investor Pleads Guilty to Conspiring to Rig Bids at Public Foreclosure Auctions. According to the press release to date there have been “convictions of well over 100 other individuals who rigged foreclosure auctions all across the country.” Many of those convicted have been sentenced to prison.
What jumped out at me about the press release was that the individual is pleading guilty to rigging auctions “from at least as early as August 20, 2009 through at least as late as December 14, 2016.” In other words, while the DOJ investigation, prosecution and sentencing of others to prison, this defendant continued to collude at auctions. And you can’t collude by yourself, so others were still joining in. I suppose it is more sad than surprising. [People still rob banks.] The temptation for a quick (and illegal) buck by colluding at auctions is too great for some to pass up. After all, this the real estate foreclosure auction investigation is by no means the first widespread auction collusion investigation the Antitrust Division has had with large numbers of criminal prosecutions. When I was the Chief of the Philadelphia office we prosecuted auction “rings” in antiques, jewelry, various types of commercial equipment and Department of Defense surplus auctions. In every investigation we learned was that collusion at auctions was a “way of life” in that business. The individuals prosecuted had excuses for their behavior: “it’s the only way to make money” “there were still other bidders we had to compete against” “the auctioneers pulled phantom bids” “it was a cloudy day” “it was a sunny day” and on and on. But, each person I dealt with understood that what they were doing was a fraud. One guy even remarked in answer to a question about the collusion: “You mean the combination?” I remember that many years later because I had never heard the Sherman Act term “combination” actually used by someone who was in one. [Auction conspirators frequently use the term “the ring.”]
Like many white-collar criminals, auction collusion defendants have not had previous encounters with the law. The entire lengthy process of the investigation, prosecution, and jail sentence if there is one, is usually an absolutely devastating experience to the individuals’ business, family life and self. It can be tempting get involved in an auction ring if you compete against the same individuals/businesses time after time. But, in my experience, auctions rings were by far the easiest bid rigging crime to prosecute. The payoffs to the ring members leave a detailed road map of who was involved and what the scam was.
I don’t know who reads Cartel Capers. Probably not many in the auction business. But, if you are and you are invited into an auction ring, RUN. Be conspicuous that you are not part of the group. If you are in an auction ring, GET OUT. You may want to speak with an attorney and consider the Antitrust Division’s Leniency Program. If it’s the only way to make money, find another line of work. (But don’t rob banks.)
Thanks for reading. Bob Connolly
This post originally appeared on the Cartel Capers blog. https://wklawbusiness.us6.list-manage.com/track/click?u=752026a04d2007135a2ab4662&id=88fe73100b&e=84837a780d
AG Racine on Enhancing Safety through Justice Reform from Karl Racine:
Across the country, reform-minded prosecutors are simultaneously making our communities safer and rehabilitating young offenders through evidence-based, age-sensitive solutions. In a recent article in USA Today, I highlight how prosecutors are implementing reforms tailored to juveniles, such as developing youth-centered facilities that keep young people out of jail and raising the age at which someone can be tried as an adult. These reforms have succeeded in increasing public safety, keeping youth out of the justice system, and saving taxpayers money.
Recently, in partnership with Fair and Just Prosecution and Georgetown University’s Center for Juvenile Justice Reform, I convened prosecutors from across the country to share ideas that can help reform the juvenile justice system. I highlighted two OAG programs that have shown early success in the District: (1) the Alternatives to Court Experience (ACE) Diversion program which provides support services for offenders as an alternative to incarceration and (2) a first-in-the-nation Restorative Justice program which uses mediated conferences between victims and offenders to repair the victim’s harm instead of traditional prosecution. Both programs have shown similar success with approximately 80 percent of participants not being re-arrested after completing either program.
Prosecutors are gatekeepers to the justice system and I strongly believe we can use our positions to change practices and advocate for evidence-based juvenile justice reforms. At OAG, I will continue to implement and advocate for strategies that keep our communities safe, make financial sense, and give young people a shot at a brighter future.
Sincerely,
Karl A. Racine
Attorney General
Across the country, reform-minded prosecutors are simultaneously making our communities safer and rehabilitating young offenders through evidence-based, age-sensitive solutions. In a recent article in USA Today, I highlight how prosecutors are implementing reforms tailored to juveniles, such as developing youth-centered facilities that keep young people out of jail and raising the age at which someone can be tried as an adult. These reforms have succeeded in increasing public safety, keeping youth out of the justice system, and saving taxpayers money.
Recently, in partnership with Fair and Just Prosecution and Georgetown University’s Center for Juvenile Justice Reform, I convened prosecutors from across the country to share ideas that can help reform the juvenile justice system. I highlighted two OAG programs that have shown early success in the District: (1) the Alternatives to Court Experience (ACE) Diversion program which provides support services for offenders as an alternative to incarceration and (2) a first-in-the-nation Restorative Justice program which uses mediated conferences between victims and offenders to repair the victim’s harm instead of traditional prosecution. Both programs have shown similar success with approximately 80 percent of participants not being re-arrested after completing either program.
Prosecutors are gatekeepers to the justice system and I strongly believe we can use our positions to change practices and advocate for evidence-based juvenile justice reforms. At OAG, I will continue to implement and advocate for strategies that keep our communities safe, make financial sense, and give young people a shot at a brighter future.
Sincerely,
Karl A. Racine
Attorney General
Lina Khan, a critic of Amazon on antitrust grounds, joins the FTC
One of Amazon's most prominent critics on antitrust grounds, Lina Khan, has been hired at the Federal Trade Commission. The FTC will hold hearings on competition and consumer protection this fall. "Ms. Khan is one of the leading proponents of the idea that conventional antitrust enforcement needs to be rethought in the era of giant tech platforms like Amazon," reports Priya Anand of The Information.
One of Amazon's most prominent critics on antitrust grounds, Lina Khan, has been hired at the Federal Trade Commission. The FTC will hold hearings on competition and consumer protection this fall. "Ms. Khan is one of the leading proponents of the idea that conventional antitrust enforcement needs to be rethought in the era of giant tech platforms like Amazon," reports Priya Anand of The Information.
From Open Markets Institute: Colluding Pork Packers Accused of Pigging Out On Fixed Prices
Since roughly 2009, Americans may have been paying too much for their pork chops, barbeque, hams, and trotters.
That’s the claim of two law firms that filed separate class action suits on behalf of consumers and food distributors charging eight major pork packers and an industry data sharing service, Agri Stats, with colluding to manipulate prices.
The case comes more than a year after dominant chicken packers were charged with an identical crime. In both cases, the suits argue that Agri Stats’ detailed, company-specific, and forward-looking data made it possible for pork processing companies to coordinate the supply of pork, and critically, monitor one another’s behavior to ensure no one in the cartel deviated from their conspiracy.
Hormel and Smithfield have denied the price-fixing allegations. A representative from Tyson, also a defendant in the poultry case, said in an email, “We intend to vigorously defend against the allegations in court.” Other defendants have not commented.
The suits allege that collusion began around 2008 when Agri Stats started to market pork “benchmarking” reports, which compare data from pork meat packers on everything from total profits and hogs slaughtered, to farm-level data about feed ratios, mortality rates, piglet weaning costs, and so on. By 2016, Agri Stats benchmarking reports collected and internally audited information from over 90 percent of the pork industry.
“Once Agri Stats got everyone in the pork industry to put their card on the table, there was no competition,” said Steve Berman, managing partner at Hagens Berman, one of the firms suing pork producers, in a public statement.
Pork production stagnated and prices increased almost immediately after pork corporations began using Agri Stats benchmarking data. Between 1998 and 2009 the year average price per hundredweight of pork was never more than $50. But from 2009 to 2014, prices rose over 50 percent to $76.30. This was true even though the price of other agricultural commodities started to fall around 2012 and 2013. Annual pork production fell in 2009, 2010, and again in 2013 (with another dip in 2014 due to disease).
The plaintiffs argue that pork corporations coordinated changes in production with the help of Agri Stats. However, this claim raises the question, what makes Agri Stats different from other industry data service companies or market information provided by the USDA?
Darren Tristano, the CEO of a foodservice and hospitality data research service, CHD Expert, says market reports with un-aggregated, company-level information are “very rare.” Indeed, the pork suit claims that “Agri Stats’ reports are unlike those of other lawful industry reports,” in that they provide “current and forward-looking sensitive information” broken down by company and even farm. All of this data is anonymous, but the suit contends that Agri Stats reports contain “the keys to deciphering which data belongs to which producers.”
This key difference, in turn, could allow conspirators to tie specific data back to individual companies and identify any one who tried to cheat the others by not adhering to their price-fixing plan. Without frequent, audited, and disaggregated data from Agri Stats, the suits argue, large pork companies could not be sure that all conspirators were cooperating.
Furthermore, in a decentralized market of many independent pork producers, collusion on the scale in question would be almost impossible to coordinate, even with the help of an especially detailed data service. Yet today, four companies sell just under 70 percent of all pork, making collusion comparatively easy.
Pork packers also have unprecedented ownership over all steps in the supply chain, from breeding to feed production and slaughter, while individual farmers take on the risk of raising hogs on contract for large corporations.
While the new suits focus on the impact of the conspiracy on pork buyers, Agri Stats data-sharing also raises questions about potential harms to hog growers. A 2017 lawsuit filed on behalf of poultry growers claims that poultry processors used Agri Stats to share data on farmer compensation. The suit argues that poultry processors worked together to “[depress] Grower compensation below competitive levels.”
Such a suit has not been filed on behalf of hog farmers, and neither of the current pork price-fixing suits makes mention of Agri Stats providing data on hog grower compensation.
The pork suits do argue that hog farmers bore the brunt of price variations over the course of the alleged conspiracy. Hog farmer earnings plummeted in 2014, and have since failed to bounce back to 2010-2013 levels. Meanwhile, pork packer earnings grew precipitously from 2012 onward, with only a slight dip this past year.
Intentional wage suppression or not, these cases highlight the immense power that a handful of vertically integrated meat companies have to force farmers to assume all the risk, to increase prices for consumers, and to hog the benefits for themselves.
Since roughly 2009, Americans may have been paying too much for their pork chops, barbeque, hams, and trotters.
That’s the claim of two law firms that filed separate class action suits on behalf of consumers and food distributors charging eight major pork packers and an industry data sharing service, Agri Stats, with colluding to manipulate prices.
The case comes more than a year after dominant chicken packers were charged with an identical crime. In both cases, the suits argue that Agri Stats’ detailed, company-specific, and forward-looking data made it possible for pork processing companies to coordinate the supply of pork, and critically, monitor one another’s behavior to ensure no one in the cartel deviated from their conspiracy.
Hormel and Smithfield have denied the price-fixing allegations. A representative from Tyson, also a defendant in the poultry case, said in an email, “We intend to vigorously defend against the allegations in court.” Other defendants have not commented.
The suits allege that collusion began around 2008 when Agri Stats started to market pork “benchmarking” reports, which compare data from pork meat packers on everything from total profits and hogs slaughtered, to farm-level data about feed ratios, mortality rates, piglet weaning costs, and so on. By 2016, Agri Stats benchmarking reports collected and internally audited information from over 90 percent of the pork industry.
“Once Agri Stats got everyone in the pork industry to put their card on the table, there was no competition,” said Steve Berman, managing partner at Hagens Berman, one of the firms suing pork producers, in a public statement.
Pork production stagnated and prices increased almost immediately after pork corporations began using Agri Stats benchmarking data. Between 1998 and 2009 the year average price per hundredweight of pork was never more than $50. But from 2009 to 2014, prices rose over 50 percent to $76.30. This was true even though the price of other agricultural commodities started to fall around 2012 and 2013. Annual pork production fell in 2009, 2010, and again in 2013 (with another dip in 2014 due to disease).
The plaintiffs argue that pork corporations coordinated changes in production with the help of Agri Stats. However, this claim raises the question, what makes Agri Stats different from other industry data service companies or market information provided by the USDA?
Darren Tristano, the CEO of a foodservice and hospitality data research service, CHD Expert, says market reports with un-aggregated, company-level information are “very rare.” Indeed, the pork suit claims that “Agri Stats’ reports are unlike those of other lawful industry reports,” in that they provide “current and forward-looking sensitive information” broken down by company and even farm. All of this data is anonymous, but the suit contends that Agri Stats reports contain “the keys to deciphering which data belongs to which producers.”
This key difference, in turn, could allow conspirators to tie specific data back to individual companies and identify any one who tried to cheat the others by not adhering to their price-fixing plan. Without frequent, audited, and disaggregated data from Agri Stats, the suits argue, large pork companies could not be sure that all conspirators were cooperating.
Furthermore, in a decentralized market of many independent pork producers, collusion on the scale in question would be almost impossible to coordinate, even with the help of an especially detailed data service. Yet today, four companies sell just under 70 percent of all pork, making collusion comparatively easy.
Pork packers also have unprecedented ownership over all steps in the supply chain, from breeding to feed production and slaughter, while individual farmers take on the risk of raising hogs on contract for large corporations.
While the new suits focus on the impact of the conspiracy on pork buyers, Agri Stats data-sharing also raises questions about potential harms to hog growers. A 2017 lawsuit filed on behalf of poultry growers claims that poultry processors used Agri Stats to share data on farmer compensation. The suit argues that poultry processors worked together to “[depress] Grower compensation below competitive levels.”
Such a suit has not been filed on behalf of hog farmers, and neither of the current pork price-fixing suits makes mention of Agri Stats providing data on hog grower compensation.
The pork suits do argue that hog farmers bore the brunt of price variations over the course of the alleged conspiracy. Hog farmer earnings plummeted in 2014, and have since failed to bounce back to 2010-2013 levels. Meanwhile, pork packer earnings grew precipitously from 2012 onward, with only a slight dip this past year.
Intentional wage suppression or not, these cases highlight the immense power that a handful of vertically integrated meat companies have to force farmers to assume all the risk, to increase prices for consumers, and to hog the benefits for themselves.
Transcript: Dan Coats warns the lights are 'blinking red' on Russian cyberattacks - including attacks on infrastructure crucial to consumers
NPR July 19, 2018 5:57 a.m.
Director of National Intelligence Dan Coats warned a think tank last week that cyberattacks from Russia and others are ongoing: "The warning lights are blinking red again."
The director of National Intelligence spoke before the Hudson Institute, a D.C.-based conservative think tank, on July 13. Transcript provided by the Hudson Institute.
Excerpts:
Every day, foreign actors — the worst offenders being Russia, China, Iran and North Korea — are penetrating our digital infrastructure and conducting a range of cyber intrusions and attacks against targets in the United States. The targets range from U.S. businesses to the federal government (including our military), to state and local governments, to academic and financial institutions and elements of our critical infrastructure — just to name a few. The attacks come in different forms. Some are tailored to achieve very tactical goals while others are implemented for strategic purpose, including the possibility of a crippling cyberattack against our critical infrastructure.
All of these disparate efforts share a common purpose: to exploit America’s openness in order to undermine our long-term competitive advantage.
* * *
But focusing on the potential impact of these actions on our midterm elections misses the more important point: these actions are persistent, they are pervasive, and they are meant to undermine America’s democracy on a daily basis, regardless of whether it is election time or not. Russian actors and others are exploring vulnerabilities in our critical infrastructure as well. The DHS and FBI — in coordination with international partners — have detected Russian government actors targeting government and businesses in the energy, nuclear, water, aviation and critical manufacturing sectors.
The warning signs are there, the system is blinking, and that is why I believe we are at a critical point. Today, unlike the status of our intelligence community in 2001, we’re much more integrated and much better at sharing information between agencies. But the evolving cyber threat is illuminating new daily challenges in how we treat information. We are dealing with information silos of a different kind, including between the public and private sector.
* * *
In many ways, the nature of the cyber threat requires that we — the national security community — treat the private sector and American people as intelligence customers. And that is why you will see us talking about this threat more vocally, and why you will continue to see us publish unclassified assessments and statements to inform the American people.
Full transcript: https://www.opb.org/news/article/npr-transcript-dan-coats-warning-on-continuing-russian-cyberattacks/
NPR July 19, 2018 5:57 a.m.
Director of National Intelligence Dan Coats warned a think tank last week that cyberattacks from Russia and others are ongoing: "The warning lights are blinking red again."
The director of National Intelligence spoke before the Hudson Institute, a D.C.-based conservative think tank, on July 13. Transcript provided by the Hudson Institute.
Excerpts:
Every day, foreign actors — the worst offenders being Russia, China, Iran and North Korea — are penetrating our digital infrastructure and conducting a range of cyber intrusions and attacks against targets in the United States. The targets range from U.S. businesses to the federal government (including our military), to state and local governments, to academic and financial institutions and elements of our critical infrastructure — just to name a few. The attacks come in different forms. Some are tailored to achieve very tactical goals while others are implemented for strategic purpose, including the possibility of a crippling cyberattack against our critical infrastructure.
All of these disparate efforts share a common purpose: to exploit America’s openness in order to undermine our long-term competitive advantage.
* * *
But focusing on the potential impact of these actions on our midterm elections misses the more important point: these actions are persistent, they are pervasive, and they are meant to undermine America’s democracy on a daily basis, regardless of whether it is election time or not. Russian actors and others are exploring vulnerabilities in our critical infrastructure as well. The DHS and FBI — in coordination with international partners — have detected Russian government actors targeting government and businesses in the energy, nuclear, water, aviation and critical manufacturing sectors.
The warning signs are there, the system is blinking, and that is why I believe we are at a critical point. Today, unlike the status of our intelligence community in 2001, we’re much more integrated and much better at sharing information between agencies. But the evolving cyber threat is illuminating new daily challenges in how we treat information. We are dealing with information silos of a different kind, including between the public and private sector.
* * *
In many ways, the nature of the cyber threat requires that we — the national security community — treat the private sector and American people as intelligence customers. And that is why you will see us talking about this threat more vocally, and why you will continue to see us publish unclassified assessments and statements to inform the American people.
Full transcript: https://www.opb.org/news/article/npr-transcript-dan-coats-warning-on-continuing-russian-cyberattacks/
WSJ: Counterfeit products of Amazon
Excerpts:
Amazon.com Inc. AMZN -1.16% has made it easy for small brands to sell their products to large numbers of customers, but that has also enabled some counterfeiters to cut into their business.
Counterfeiters, though, have been able to exploit Amazon’s drive to increase the site’s selection and offer lower prices. The company has made the process to list products on its website simple—sellers can register with little more than a business name, email and address, phone number, credit card, ID and bank account—but that also has allowed impostors to create ersatz versions of hot-selling items, according to small brands and seller consultants.
WSJ article at https://www.wsj.com/articles/on-amazon-fake-products-plague-smaller-brands-1532001601?mod=hp_lead_pos4 (pay wall)
The Center For Automotive Research says US car and car parts manufacturers will not benefit from tariffs
Produced By: Industry, Labor, & Economics Group
Categories: Economic Contribution Analysis, Employment, Forecasts, Trade
Download Now
Full Description:
The U.S. Department of Commerce is currently investigating whether U.S. automobiles and automotive parts constitute a national security threat under Section 232 of the Trade Expansion Act of 1962, as amended. The Center for Automotive Research (CAR) estimates that consumers will see the price of all new vehicles rise by $455 to $6,875 depending on the level of tariff or quota, where the vehicle was assembled, and whether the policy provides exemptions for automotive trade with Canada and Mexico. Used vehicle prices will also rise due to heightened demand and constricted supply, and higher automotive parts prices will drive up the price of vehicle maintenance and repair, so even holding on to an existing vehicle will become more expensive.
U.S. automotive and automotive parts manufacturers would not benefit from tariff or quota protection since all vehicles produced in the United States rely on imported content and a substantial share of U.S.-produced automotive parts and components are exported for assembly in vehicles built in other countries. CAR estimates that automotive demand will fall by between 493,600 to 2 million vehicles as a result of the implementation of tariffs or quotas. Declining demand is associated with employment losses ranging from over 82,000 to nearly 715,000 jobs and a $6.4 billion to $62.2 billion hit to U.S. Gross Domestic Product (GDP).
This briefing covers the economic, trade, employment, output, and price impacts of the potential Section 232 tariffs or quotas at a range of levels and levied against all trading partners or all non-NAFTA trading parnters.
Download at https://www.cargroup.org/wp-content/uploads/2018/07/NADA-Consumer-Impact-of-Auto-and-Parts-Tariffs-and-Quotas_July-2018.pdf
Produced By: Industry, Labor, & Economics Group
Categories: Economic Contribution Analysis, Employment, Forecasts, Trade
Download Now
Full Description:
The U.S. Department of Commerce is currently investigating whether U.S. automobiles and automotive parts constitute a national security threat under Section 232 of the Trade Expansion Act of 1962, as amended. The Center for Automotive Research (CAR) estimates that consumers will see the price of all new vehicles rise by $455 to $6,875 depending on the level of tariff or quota, where the vehicle was assembled, and whether the policy provides exemptions for automotive trade with Canada and Mexico. Used vehicle prices will also rise due to heightened demand and constricted supply, and higher automotive parts prices will drive up the price of vehicle maintenance and repair, so even holding on to an existing vehicle will become more expensive.
U.S. automotive and automotive parts manufacturers would not benefit from tariff or quota protection since all vehicles produced in the United States rely on imported content and a substantial share of U.S.-produced automotive parts and components are exported for assembly in vehicles built in other countries. CAR estimates that automotive demand will fall by between 493,600 to 2 million vehicles as a result of the implementation of tariffs or quotas. Declining demand is associated with employment losses ranging from over 82,000 to nearly 715,000 jobs and a $6.4 billion to $62.2 billion hit to U.S. Gross Domestic Product (GDP).
This briefing covers the economic, trade, employment, output, and price impacts of the potential Section 232 tariffs or quotas at a range of levels and levied against all trading partners or all non-NAFTA trading parnters.
Download at https://www.cargroup.org/wp-content/uploads/2018/07/NADA-Consumer-Impact-of-Auto-and-Parts-Tariffs-and-Quotas_July-2018.pdf
The EU press release on the Google fine:
http://europa.eu/rapid/press-release_IP-18-4581_en.htm
Excerpt:
Brussels, 18 July 2018
The European Commission has fined Google €4.34 billion for breaching EU antitrust rules. Since 2011, Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search.
Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules."
In particular, Google:
Google obtains the vast majority of its revenues via its flagship product, the Google search engine. The company understood early on that the shift from desktop PCs to mobile internet, which started in the mid-2000s, would be a fundamental change for Google Search. So, Google developed a strategy to anticipate the effects of this shift, and to make sure that users would continue to use Google Search also on their mobile devices.
In 2005, Google bought the original developer of the Android mobile operating system and has continued to develop Android ever since. Today, about 80% of smart mobile devices in Europe, and worldwide, run on Android.
When Google develops a new version of Android it publishes the source code online. This in principle allows third parties to download and modify this code to create Android forks. The openly accessible Android source code covers basic features of a smart mobile operating system but not Google's proprietary Android apps and services. Device manufacturers who wish to obtain Google's proprietary Android apps and services need to enter into contracts with Google, as part of which Google imposes a number of restrictions. Google also entered into contracts and applied some of these restrictions to certain large mobile network operators, who can also determine which apps and services are installed on devices sold to end users.
The Commission decision concerns three specific types of contractual restrictions that Google has imposed on device manufacturers and mobile network operators. These have enabled Google to use Android as a vehicle to cement the dominance of its search engine. In other words, the Commission decision does not question the open source model or the Android operating system as such.
http://europa.eu/rapid/press-release_IP-18-4581_en.htm
Excerpt:
Brussels, 18 July 2018
The European Commission has fined Google €4.34 billion for breaching EU antitrust rules. Since 2011, Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search.
Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules."
In particular, Google:
- has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store);
- made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and
- has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks").
Google obtains the vast majority of its revenues via its flagship product, the Google search engine. The company understood early on that the shift from desktop PCs to mobile internet, which started in the mid-2000s, would be a fundamental change for Google Search. So, Google developed a strategy to anticipate the effects of this shift, and to make sure that users would continue to use Google Search also on their mobile devices.
In 2005, Google bought the original developer of the Android mobile operating system and has continued to develop Android ever since. Today, about 80% of smart mobile devices in Europe, and worldwide, run on Android.
When Google develops a new version of Android it publishes the source code online. This in principle allows third parties to download and modify this code to create Android forks. The openly accessible Android source code covers basic features of a smart mobile operating system but not Google's proprietary Android apps and services. Device manufacturers who wish to obtain Google's proprietary Android apps and services need to enter into contracts with Google, as part of which Google imposes a number of restrictions. Google also entered into contracts and applied some of these restrictions to certain large mobile network operators, who can also determine which apps and services are installed on devices sold to end users.
The Commission decision concerns three specific types of contractual restrictions that Google has imposed on device manufacturers and mobile network operators. These have enabled Google to use Android as a vehicle to cement the dominance of its search engine. In other words, the Commission decision does not question the open source model or the Android operating system as such.
Insight into government subsidies to farmers: peanuts and peanut butter
Peanut growers where first financially helped by the government with the 1933 Agricultural Adjustment Act. Through federal policies, it increased overall income for peanut growers. However, consumers felt the hit as they were paying more for their everyday bag of peanuts. The Act later went through a bunch of changes; modifications were made in years 1937, 1941, 1948, and 1949 to justify poverty alleviation incentives.
In 2002, a quota system was introduced into the mix. This allowed peanut growers to obtain funds from US taxpayers versus from consumers. This also meant an increase in the price of consumer-oriented products, such as peanut butter. Around this time, lobbyists justified keeping the subsidies flowing based on the fact that the government had been providing them for so long, it would be unfair to suddenly take them away.
A couple of years later, peanuts were threatened to be kicked off of the 2014 Farm Bill. But, lobbyists fought back for favorable treatment made in a new Price Loss Coverage Program (PLC), which allows them protection from adverse market changes.
With these subsidies in place and the government having a strong control on market price with quotas, the unlikely consequence is huge stockpiles. This year, it is projected that American farmers will harvest 6.1 billion pounds of peanuts with 2.9 billion pounds in leftover. While stockpiles last, consumers will find themselves paying a bit less for their favorite peanut butter brands. However, taxpayers are expected to cover the $2 billion in subsidy payments by the government to farmers.
As mentioned, peanuts are now a lower price based on the stockpiles and the government's quotas for harvest. However, consumers pay for these "lowered prices" through taxes.
When peanut butter is made and marketed, it's sold at a lower price versus other nut spreads. The ingredients of a conventional jar of peanut butter do contain peanuts, but they may also contain other subsidized ingredients such as corn, soy, or sugar (this also ties into the reason of why a fast food salad is going to be more expensive than a cheeseburger). The more subsidized ingredients a product contains, the less it's going to cost. This is also why all-natural peanut butter will be more expensive than one with added sugars and preservatives.
Recently, there has been a big push to reduce the number of subsidies given to farmers. The current presidential administration has even proposed a $4.8 billion annual cut to the $23 billion currently given to farmers in hopes of fixing the issue. What will the future look like for the prices of peanut butter? It will certainly be one to keep an eye out for in the news- and the grocery shelves.
Excerpt from: https://www.msn.com/en-us/foodanddrink/foodnews/peanut-butter-is-subsidized-by-the-government-and-heres-what-that-means-for-you/ar-AAAhBOD?ocid=spartandhp
Peanut growers where first financially helped by the government with the 1933 Agricultural Adjustment Act. Through federal policies, it increased overall income for peanut growers. However, consumers felt the hit as they were paying more for their everyday bag of peanuts. The Act later went through a bunch of changes; modifications were made in years 1937, 1941, 1948, and 1949 to justify poverty alleviation incentives.
In 2002, a quota system was introduced into the mix. This allowed peanut growers to obtain funds from US taxpayers versus from consumers. This also meant an increase in the price of consumer-oriented products, such as peanut butter. Around this time, lobbyists justified keeping the subsidies flowing based on the fact that the government had been providing them for so long, it would be unfair to suddenly take them away.
A couple of years later, peanuts were threatened to be kicked off of the 2014 Farm Bill. But, lobbyists fought back for favorable treatment made in a new Price Loss Coverage Program (PLC), which allows them protection from adverse market changes.
With these subsidies in place and the government having a strong control on market price with quotas, the unlikely consequence is huge stockpiles. This year, it is projected that American farmers will harvest 6.1 billion pounds of peanuts with 2.9 billion pounds in leftover. While stockpiles last, consumers will find themselves paying a bit less for their favorite peanut butter brands. However, taxpayers are expected to cover the $2 billion in subsidy payments by the government to farmers.
As mentioned, peanuts are now a lower price based on the stockpiles and the government's quotas for harvest. However, consumers pay for these "lowered prices" through taxes.
When peanut butter is made and marketed, it's sold at a lower price versus other nut spreads. The ingredients of a conventional jar of peanut butter do contain peanuts, but they may also contain other subsidized ingredients such as corn, soy, or sugar (this also ties into the reason of why a fast food salad is going to be more expensive than a cheeseburger). The more subsidized ingredients a product contains, the less it's going to cost. This is also why all-natural peanut butter will be more expensive than one with added sugars and preservatives.
Recently, there has been a big push to reduce the number of subsidies given to farmers. The current presidential administration has even proposed a $4.8 billion annual cut to the $23 billion currently given to farmers in hopes of fixing the issue. What will the future look like for the prices of peanut butter? It will certainly be one to keep an eye out for in the news- and the grocery shelves.
Excerpt from: https://www.msn.com/en-us/foodanddrink/foodnews/peanut-butter-is-subsidized-by-the-government-and-heres-what-that-means-for-you/ar-AAAhBOD?ocid=spartandhp
Montenegro as a tourist destination
Montenegro has recently been in the news only as a place with an easily pushed aside prime minister, unimportant to the US Administration's NATO defense strategy. But it is an actual, not imaginary place. You might want to visit there as a tourist, while you still can. So, for perspective, here is what the country's tourist agency has to say:
The sea, the lakes, the canyons or the mountains enable everyone to decide on the best way to enjoy a quality vacation. In one day, the curious traveler can have a coffee on one of the numerous beaches of the Budva Riviera, eat lunch with the song of the birds on Skardar Lake and dine next to a fireplace on the slopes of the Durmitor Mountain. These are all characteristics of Montenegro as a tourist destination that has a lot to offer.
The turbulent history of this small country has left behind an invaluable treasure in numerous historic monuments throughout this proud country. The blue sea with endless beaches, restless waters of the clear rivers and beautiful mountain massifs, mixed with the spirit of the old times, have given Montenegro everything one needs for an unforgettable vacation.
Montenegro is an ecological state. This fact grants it one of the primary posts on the tourist maps. A large number of sunny days in summer and a large quantity of snow in winter determine the two most developed forms of tourism in Montenegro: the coastal one- in summer and the ski recreational one – in winter.
Montenegrin towns are rich in architecture, from various periods that take the breath away and bring one back to the time when the structures were created. Through the numerous event and festivals, the tourist gets the opportunity to learn more about the traditions and customs of this country.
In recent times, following the global trends, Montenegro is developing extreme sports that the tourists can enjoy, as well.
From: https://www.visit-montenegro.com/tourism/tourism-in-montenegro/
Montenegro has recently been in the news only as a place with an easily pushed aside prime minister, unimportant to the US Administration's NATO defense strategy. But it is an actual, not imaginary place. You might want to visit there as a tourist, while you still can. So, for perspective, here is what the country's tourist agency has to say:
The sea, the lakes, the canyons or the mountains enable everyone to decide on the best way to enjoy a quality vacation. In one day, the curious traveler can have a coffee on one of the numerous beaches of the Budva Riviera, eat lunch with the song of the birds on Skardar Lake and dine next to a fireplace on the slopes of the Durmitor Mountain. These are all characteristics of Montenegro as a tourist destination that has a lot to offer.
The turbulent history of this small country has left behind an invaluable treasure in numerous historic monuments throughout this proud country. The blue sea with endless beaches, restless waters of the clear rivers and beautiful mountain massifs, mixed with the spirit of the old times, have given Montenegro everything one needs for an unforgettable vacation.
Montenegro is an ecological state. This fact grants it one of the primary posts on the tourist maps. A large number of sunny days in summer and a large quantity of snow in winter determine the two most developed forms of tourism in Montenegro: the coastal one- in summer and the ski recreational one – in winter.
Montenegrin towns are rich in architecture, from various periods that take the breath away and bring one back to the time when the structures were created. Through the numerous event and festivals, the tourist gets the opportunity to learn more about the traditions and customs of this country.
In recent times, following the global trends, Montenegro is developing extreme sports that the tourists can enjoy, as well.
From: https://www.visit-montenegro.com/tourism/tourism-in-montenegro/
Shades of Barry Lynn: The Trump trade wars will be affected by need for rare metals supplied almost solely by China
From NYT: And in one of its more strategic weapons, Beijing could use its dominance [in rare metals] to cut off key parts of the global supply chain. China is the major supplier of a number of mundane but crucial materials and components needed to keep the world’s factories humming. They include obscure materials like arsenic metals, used to make semiconductors; cadmium, found in rechargeable batteries; and tungsten, found in light bulbs and heating elements.
See https://www.nytimes.com/2018/07/11/business/china-trade-war-rare-earths-lynas.html?
Barry Lynn argued in 2016 that the US leaves itself vulnerable when China is a sole source of supply, althouth the material he used to illustrate the point was ascorbic acid, not rare metals:
But to understand the full extent of the danger posed by the radical shift in trade policy in the mid 1990s we must also look at the structure of supply chains. We should study what exactly is made in China, and how much of any vital good comes from China. Looking at supply chains is what allows us to see the full extent of our vulnerabilities in a time of conflict, and a way to judge whether the Pivot to Asia was well designed. Twenty years ago the United States depended on China for nothing that we needed day to day. But the radical changes in U.S. trade policy in the 1990s freed China – often in alliance with large U.S. corporations – to use trade power to consolidate control over many assembly activities and industrial components. This includes the basic ingredients for some of the nation’s most important drugs, including antibiotics, and some of the most vital inputs in our industrial food system, such as ascorbic acid.
See https://docs.house.gov/meetings/FA/FA05/20161206/105445/HHRG-114-FA05-Wstate-LynnB-20161206.pdf
Posting by Don Allen Resnikoff
From NYT: And in one of its more strategic weapons, Beijing could use its dominance [in rare metals] to cut off key parts of the global supply chain. China is the major supplier of a number of mundane but crucial materials and components needed to keep the world’s factories humming. They include obscure materials like arsenic metals, used to make semiconductors; cadmium, found in rechargeable batteries; and tungsten, found in light bulbs and heating elements.
See https://www.nytimes.com/2018/07/11/business/china-trade-war-rare-earths-lynas.html?
Barry Lynn argued in 2016 that the US leaves itself vulnerable when China is a sole source of supply, althouth the material he used to illustrate the point was ascorbic acid, not rare metals:
But to understand the full extent of the danger posed by the radical shift in trade policy in the mid 1990s we must also look at the structure of supply chains. We should study what exactly is made in China, and how much of any vital good comes from China. Looking at supply chains is what allows us to see the full extent of our vulnerabilities in a time of conflict, and a way to judge whether the Pivot to Asia was well designed. Twenty years ago the United States depended on China for nothing that we needed day to day. But the radical changes in U.S. trade policy in the 1990s freed China – often in alliance with large U.S. corporations – to use trade power to consolidate control over many assembly activities and industrial components. This includes the basic ingredients for some of the nation’s most important drugs, including antibiotics, and some of the most vital inputs in our industrial food system, such as ascorbic acid.
See https://docs.house.gov/meetings/FA/FA05/20161206/105445/HHRG-114-FA05-Wstate-LynnB-20161206.pdf
Posting by Don Allen Resnikoff
Just what did Judge Kavanaugh opine about the CFPB?
That the CFPB single director structure is unconstitutional, but the remedy is simply to delete the "for cause" limitation on removable, so the President can remove the director at will. An exceprt from the Kavanaugh opinion follows: DR
The CFPB’s concentration of enormous executive power in a single, unaccountable, unchecked Director not only departs from settled historical practice, but also poses a far greater risk of arbitrary decisionmaking and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency. The overarching constitutional concern with independent agencies is that the agencies are unchecked by the President, the official who is accountable to the people and who is responsible under Article II for the exercise of executive power. Recognizing the broad and unaccountable power wielded by independent agencies, Congresses and Presidents of both political parties have therefore long endeavored to keep independent agencies in check through other statutory means. In particular, to check independent agencies, Congress has traditionally required multi-member bodies at the helm of every independent agency. In lieu of Presidential control, the multi-member structure of independent agencies acts as a critical substitute check on the excesses of any individual independent agency head – a check that helps to prevent arbitrary decisionmaking and thereby to protect individual liberty.
This new agency, the CFPB, lacks that critical check and structural constitutional protection, yet wields vast power over the U.S. economy. So “this wolf comes as a wolf.” Morrison v. Olson, 487 U.S. at 699 (Scalia, J., dissenting).
In light of the consistent historical practice under which independent agencies have been headed by multiple commissioners or board members, and in light of the threat to individual liberty posed by a single-Director independent agency, we conclude that Humphrey’s Executor cannot be
stretched to cover this novel agency structure. We therefore hold that the CFPB is unconstitutionally structured. [emphasis added by DR]
What is the remedy for that constitutional flaw? PHH contends that the constitutional flaw means that we must shut down the entire CFPB (if not invalidate the entire Dodd-Frank Act) until Congress, if it chooses, passes new legislation fixing the constitutional flaw. But Supreme Court precedent dictates a narrower remedy. To remedy the constitutional flaw, we follow the Supreme Court’s precedents, including Free Enterprise Fund, and simply sever the statute’s unconstitutional for-cause provision from the remainder of the statute. Here, that targeted remedy will not affect the ongoing operations of the CFPB. With the for-cause provision severed, the President now will have the power to remove the Director at will, and to supervise and direct the Director. The CFPB therefore will continue to operate and to perform its many duties, but will do so as an executive agency akin to other executive agencies headed by a single person, such as the Department of Justice and the Department of the Treasury. [emphasis added by DR]
Those executive agencies have traditionally been headed by a single person precisely because the agency head operates within the Executive Branch chain of command under the supervision and direction of the President. The President is a check on and accountable for the actions of those executive agencies, and the President now will be a check on and accountable for the actions of the CFPB as well.
Because the CFPB as remedied will continue operating, we must also address the statutory issues raised by PHH in its challenge to the $109 million order against it.
* * *
With apologies for the length of this opinion, we now turn to our detailed explanation and analysis of these important issues.
See the opinion at https://www.cadc.uscourts.gov/internet/opinions.nsf/AAC6BFFC4C42614C852580490053C38B/$file/15-1177-1640101.pdf
That the CFPB single director structure is unconstitutional, but the remedy is simply to delete the "for cause" limitation on removable, so the President can remove the director at will. An exceprt from the Kavanaugh opinion follows: DR
The CFPB’s concentration of enormous executive power in a single, unaccountable, unchecked Director not only departs from settled historical practice, but also poses a far greater risk of arbitrary decisionmaking and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency. The overarching constitutional concern with independent agencies is that the agencies are unchecked by the President, the official who is accountable to the people and who is responsible under Article II for the exercise of executive power. Recognizing the broad and unaccountable power wielded by independent agencies, Congresses and Presidents of both political parties have therefore long endeavored to keep independent agencies in check through other statutory means. In particular, to check independent agencies, Congress has traditionally required multi-member bodies at the helm of every independent agency. In lieu of Presidential control, the multi-member structure of independent agencies acts as a critical substitute check on the excesses of any individual independent agency head – a check that helps to prevent arbitrary decisionmaking and thereby to protect individual liberty.
This new agency, the CFPB, lacks that critical check and structural constitutional protection, yet wields vast power over the U.S. economy. So “this wolf comes as a wolf.” Morrison v. Olson, 487 U.S. at 699 (Scalia, J., dissenting).
In light of the consistent historical practice under which independent agencies have been headed by multiple commissioners or board members, and in light of the threat to individual liberty posed by a single-Director independent agency, we conclude that Humphrey’s Executor cannot be
stretched to cover this novel agency structure. We therefore hold that the CFPB is unconstitutionally structured. [emphasis added by DR]
What is the remedy for that constitutional flaw? PHH contends that the constitutional flaw means that we must shut down the entire CFPB (if not invalidate the entire Dodd-Frank Act) until Congress, if it chooses, passes new legislation fixing the constitutional flaw. But Supreme Court precedent dictates a narrower remedy. To remedy the constitutional flaw, we follow the Supreme Court’s precedents, including Free Enterprise Fund, and simply sever the statute’s unconstitutional for-cause provision from the remainder of the statute. Here, that targeted remedy will not affect the ongoing operations of the CFPB. With the for-cause provision severed, the President now will have the power to remove the Director at will, and to supervise and direct the Director. The CFPB therefore will continue to operate and to perform its many duties, but will do so as an executive agency akin to other executive agencies headed by a single person, such as the Department of Justice and the Department of the Treasury. [emphasis added by DR]
Those executive agencies have traditionally been headed by a single person precisely because the agency head operates within the Executive Branch chain of command under the supervision and direction of the President. The President is a check on and accountable for the actions of those executive agencies, and the President now will be a check on and accountable for the actions of the CFPB as well.
Because the CFPB as remedied will continue operating, we must also address the statutory issues raised by PHH in its challenge to the $109 million order against it.
* * *
With apologies for the length of this opinion, we now turn to our detailed explanation and analysis of these important issues.
See the opinion at https://www.cadc.uscourts.gov/internet/opinions.nsf/AAC6BFFC4C42614C852580490053C38B/$file/15-1177-1640101.pdf
DC Council majority backs repeal of ballot measure approved by voters -- initiative 77 -- forcing a higher minimum wage for hourly workers who rely on tips
A majority of the D.C. Council on Tuesday backed repeal of a ballot measure approved by voters last month that would force businesses to pay more to servers, bartenders, bellhops and other hourly workers who depend on tips.
Seven of the council’s 13 members co-introduced a bill that would overturn Initiative 77, which was passed by 56 percent of District voters in June’s primary election.
The initiative would stop businesses from counting the tips received by employees toward the minimum wage they must earn under law. The District’s minimum hourly wage is now $13.25 and is on track to reach $15 by 2020. Currently, employers are allowed to pay tipped workers just $3.89 per hour if tips make up the difference.
Initiative 77 was backed by liberal activists and some workers who argued that some workers did not receive enough in tips to earn the minimum wage and that their employers failed to fill the gap.
See: https://www.washingtonpost.com/local/dc-politics/majority-of-dc-council-moves-to-overturn-tipped-wage-ballot-measure/2018/07/10/5320f156-8458-11e8-9e80-403a221946a7_story.html?utm_term=.fa36efadc101
Question for readers: Should the Council follow the wishes of the voters? Is it OK for the Council to force a contrary approach?
The EU v. Google
For those who feel that US competition policy enforcement is too narrow and too meek in addressing use of economic power by big companies, the EU "abuse of dominant position" approach suggests an alternative. Currently (July, 2018) the media reports action by the EU against Google. Following is an earlier statement directly from the EU that explains some of the EU's analysis:
From: http://europa.eu/rapid/press-release_IP-16-1492_en.htm
Antitrust: Commission sends Statement of Objections to Google on Android operating system and applications Brussels, 20 April 2016
The European Commission has informed Google of its preliminary view that the company has, in breach of EU antitrust rules, abused its dominant position by imposing restrictions on Android device manufacturers and mobile network operators. The Commission's preliminary view is that Google has implemented a strategy on mobile devices to preserve and strengthen its dominance in general internet search.
First, the practices mean that Google Search is pre-installed and set as the default, or exclusive, search service on most Android devices sold in Europe.
Second, the practices appear to close off ways for rival search engines to access the market, via competing mobile browsers and operating systems.
In addition, they also seem to harm consumers by stifling competition and restricting innovation in the wider mobile space. The Commission's concerns are outlined in a Statement of Objections addressed to Google and its parent company, Alphabet. Sending a Statement of Objections does not prejudge the outcome of the investigation.
Commissioner Margrethe Vestager, in charge of competition policy, said: "A competitive mobile internet sector is increasingly important for consumers and businesses in Europe. Based on our investigation thus far, we believe that Google's behaviour denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players, in breach of EU antitrust rules. These rules apply to all companies active in Europe. Google now has the opportunity to reply to the Commission's concerns."
Smartphones and tablets account for more than half of global internet traffic, and are expected to account for even more in the future. About 80% of smart mobile devices in Europe and in the world run on Android, the mobile operating system developed by Google. Google licenses its Android mobile operating system to third party manufacturers of mobile devices.
The Commission opened proceedings in April 2015 concerning Google's conduct as regards the Android operating system and applications. At this stage, the Commission considers that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system. Google generally holds market shares of more than 90% in each of these markets in the European Economic Area (EEA).
In today's Statement of Objections, the Commission alleges that Google has breached EU antitrust rules by: requiring manufacturers to pre-install Google Search and Google's Chrome browser and requiring them to set Google Search as default search service on their devices, as a condition to license certain Google proprietary apps; preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code; giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.
The Commission believes that these business practices may lead to a further consolidation of the dominant position of Google Search in general internet search services. It is also concerned that these practices affect the ability of competing mobile browsers to compete with Google Chrome, and that they hinder the development of operating systems based on the Android open source code and the opportunities they would offer for the development of new apps and services. In the Commission's preliminary view, this conduct ultimately harms consumers because they are not given as wide a choice as possible and because it stifles innovation.
State inquiry letter on employee "no-poach" by fast food chains; targets promptly settle
from https://ag.ny.gov/sites/default/files/npnh_letter_redacted.pdf
Re: Request for Information Regarding Franchise Agreements
Dear ,
Our Offices have learned that certain franchise agreements used in our States and the District of Columbia (hereinafter collectively referred to as “States”) may contain provisions that impact some employees’ ability to obtain higher paying or more attractive positions with a different franchisee. These provisions are known by many terms, including “employee non-competition,” “no solicitation,” “no poach,” “no hire,” or “no switching” agreements (hereinafter referred to collectively as “No Poach Agreements”). As their names suggest, these agreements restrict a franchisee’s ability to recruit or hire employees of and other franchisees of . We have reason to believe that may be including such provisions in its franchise agreements.
As State Attorneys General, we have a common interest in the economic health of our residents and the communities in which they live. Many of us enforce laws that ensure basic worker protections, such as minimum wage, overtime, and anti-discrimination laws, in addition to consumer protection and antitrust laws. Given these roles, we are concerned about the use of No Poach Agreements among franchisees and the harmful impact that such agreements may have on employees in our States and our state economies generally.1 By limiting potential job opportunities, these agreements may restrict employees’ ability to improve their earning potential and the economic security of their families. These provisions also deprive other franchisees of the opportunity to benefit from the skills of workers covered by a No Poach Agreement whom
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1 “Non-compete Contracts: Economic Effects and Policy Implications,” report issued by the Office of Economic Policy, U.S. Department of the Treasury, March 2016. Available at: https://www.treasury.gov/resource-center/economic-policy/Documents/UST%20Noncompetes%20Report.pdf; and Alan B. Krueger and Orley Ashenfelter, Theory and Evidence on Employer Collusion in the Franchise Sector, (July 18, 2017) found that 80 percent of quick service restaurant franchise contracts (i.e., 32 out of 40) contained no poach provisions.
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they would otherwise wish to hire. When taken in the aggregate and replicated across our States, the economic consequences of these restrictions may be significant.
Given these potentially harmful impacts, we would like to gather information relating to the purpose and effects of No Poach Agreements. To that end, we request that you provide the following information and documents:
For the purposes of the below Request for Information and Request for Documents, the term “No Poach Agreement” refers to any and all language contained within franchise agreements or any other document which restricts or prevents franchisees from hiring or soliciting employees of and/or other franchisees for employment. Such language includes, but is not limited to, any “employee non-competition,” “no solicitation,” and/or “no hire” provisions. In addition, all requests for information and documents shall encompass the time period from January 1, 2015 to the present (“Relevant Period”).
Requests for Information
1. At any point during the Relevant Period, have franchise agreements included any language restricting employee hiring between franchise locations? If yes, when did first start including such language in its franchise agreements? Does this practice continue to the present? If this practice does not continue, when did stop the practice and why was it stopped?
2. What categories of employees have been subject to No Poach Agreements? Please provide in your response information about the types of positions (including job titles), whether full-time or part-time employees, as well as the hourly wage and salary ranges for such workers.
3. Have employees who are subject to No Poach Agreements been informed of this restriction on their mobility? If yes, when and how have they been informed?
4. What is the temporal scope of No Poach Agreements? What is the geographic scope?
5. Please identify the franchise locations currently subject to No Poach Agreements, the number and percentage of your franchises to which No Poach Agreements apply, and an estimate of the number of workers currently subject to such agreements in each of the following States: California, Illinois, Massachusetts, Maryland, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island and the District of Columbia.
6. Has or any of its franchisees been a party to litigation or binding arbitration involving No Poach Agreements? If yes, please provide the case name, case number, and a summary of the case status as well as resolution (if applicable).
Requests for Documents
1. A copy of any and all franchise or other agreements used by that include No Poach Agreements. Please provide sample franchise agreements or other documents containing the No Poach Agreements that have been used during the Relevant Period. If the terms or language of the No Poach Agreements have changed over the course of the Relevant Period, provide a copy of each version of the No Poach Agreements that have been used.
2. Any and all communications, including emails, correspondence and text messages, with franchisees, separate and apart from the franchise agreement, regarding No Poach Agreements, including any practices, rules, requirements, or contract provisions used within the past three years. This request includes, but is not limited to any and all documents related to training provided to franchisees or store management regarding No Poach Agreements.
3. Any and all documents demonstrating the business rationale and operational need for the No Poach Agreements.
4. Any and all communications, including emails, correspondence and text messages, by and between , employees, and/or franchisees relating to enforcement of the No Poach Agreements, such as for any employee subject to No Poach Agreements who requested a transfer from one franchisee to another, or a new job with a franchisee while employed at another franchisee, whether that request was granted or denied, and the reasoning for such a decision.
5. Any and all communications, including emails, correspondence and text messages, with other franchisors concerning No Poach Agreements, or related practices, policies, rules, requirements or provisions.
We request that you provide your responses on or before August 6, 2018. Please send all written communications via email to [email protected] and provide all responsive documents in an electronic format according to the delivery standards separately attached to this communication to Cynthia Mark at the address listed below.
Let us know if you have any questions, and thank you in advance for your prompt attention.
Sincerely,
Cynthia Mark, Chief, Fair Labor Division Massachusetts Office of the Attorney General One Ashburton Place Boston, MA 02108 (617) 963-2626 [email protected]
Satoshi Yanai Supervising Deputy Attorney General Underground Economy Unit California Department of Justice Office of the Attorney General 300 S. Spring Street, Suite 1702 Los Angeles, CA 90013 (213) 269-6400
Jane H. Lewis Section Chief, Office of Housing and Community Justice Office of the Attorney General for the District of Columbia 441 4th Street, Suite 630S Washington, DC 20001 Phone: (202) 727-1038 [email protected]
Jane R. Flanagan Chief, Workplace Rights Bureau Office of the Illinois Attorney General 100 W. Randolph Street, 11th Floor Chicago, IL 60601 (312) 814-4720
Leah J. Tulin Special Assistant to the Attorney General Office of the Attorney General State of Maryland 200 Saint Paul Place Baltimore, Maryland 21202 410-576-6962
Jacob Campion Assistant Attorney General Solicitor General’s Division Minnesota Attorney General’s Office 445 Minnesota Street, Suite 1100 St. Paul, Minnesota 55101-2128 (651) 757-1459
Jeremy M. Feigenbaum, Assistant Attorney General Counsel to the Attorney General Office of the New Jersey Attorney General Richard J. Hughes Justice Complex 25 Market Street, 8th Floor, West Wing Trenton, New Jersey 08625-0080 Desk: (609) 376-2690 | Cell: (609) 414-0197 [email protected]
ReNika Moore Labor Bureau Chief New York State Office of the Attorney General 28 Liberty Street New York, NY 10005 (212) 416-6280
Tim Nord, Special Counsel Oregon Department of Justice 1162 Court Street NE Salem, OR 97301 Tel: (503) 934-4400 Fax: (503) 373-7067 [email protected]
Nancy A. Walker, Chief Deputy Attorney General Fair Labor Section Pennsylvania Office of the Attorney General Strawberry Square Harrisburg, PA17120
Adam D. Roach Special Assistant Attorney General Rhode Island Attorney General’s Office 150 South Main Street Providence, RI 02903 (401) 274-4409, ext. 2490
Follow-up: Under agreements with Washington State announced on Thursday, the companies pledged to remove so-called no-poach clauses from their contracts with franchisees. Auntie Anne’s, Buffalo Wild Wings and Cinnabon also agreed to drop the clauses.
The provisions prohibit workers at, for example, one Carl’s Jr. franchise from going to another Carl’s Jr. They do not stop those workers from taking jobs at restaurants run by a different chain.
In addition to stripping the clauses from existing franchise contracts in Washington, the seven chains have also vowed not to enforce them nationwide. The clauses cannot be included in new and renewed contracts either.
Update from: https://www.nytimes.com/2018/07/12/business/fast-food-wages-no-poach-deal.html?
Are the poorest US citizens deprived of human rights? The UN says yes; the US government says no
More than three million Americans live in “extreme poverty,” according to a report from the United Nations, which ranked poverty in the U.S. alongside some of the poorest areas in the world, and argued the human rights are at stake. The US government vehemently disagrees.
The UN Special Rapporteur for Extreme Poverty paid a visit to the U.S. last year, drawing worldwide attention to his findings.
NewsHour Weekend Special Correspondent Simon Ostrovsky followed in his footsteps to report from Lowndes County, Alabama.
The PBS report is at https://www.pbs.org/newshour/show/the-story-of-american-poverty-as-told-by-one-alabama-county
The vehement US response is reported at https://www.theguardian.com/world/2018/jun/21/nikki-haley-un-poverty-report-misleading-politically-motivated
More than three million Americans live in “extreme poverty,” according to a report from the United Nations, which ranked poverty in the U.S. alongside some of the poorest areas in the world, and argued the human rights are at stake. The US government vehemently disagrees.
The UN Special Rapporteur for Extreme Poverty paid a visit to the U.S. last year, drawing worldwide attention to his findings.
NewsHour Weekend Special Correspondent Simon Ostrovsky followed in his footsteps to report from Lowndes County, Alabama.
The PBS report is at https://www.pbs.org/newshour/show/the-story-of-american-poverty-as-told-by-one-alabama-county
The vehement US response is reported at https://www.theguardian.com/world/2018/jun/21/nikki-haley-un-poverty-report-misleading-politically-motivated
From WaPo: CFPB drops "kickback" action against Zillow
By Ken Harney July 3
Excerpts from Washington Post article:
Zillow said in a statement that “we are pleased the [Consumer Financial Protection Bureau] has concluded their inquiry into our co-marketing program.”
Early last year, Zillow was informed by the CFPB that the bureau was considering legal action because of possible violations of the Real Estate Settlement Procedures Act (RESPA) and federal rules on unfair and deceptive practices. (Scott Eells/BLOOMBERG)
In a move with potentially significant implications for consumers, realty agents and lenders, the Trump administration has decided not to take legal action against online realty giant Zillow under federal anti-kickback and deceptive-practices rules.
The decision represents a departure from the direction the Consumer Financial Protection Bureau appeared to be headed under its previous director, Richard Cordray, an Obama appointee who resigned last November to run for governor of Ohio.
***
The focus of the bureau’s concerns was Zillow’s “co-marketing” plan, under which “premium” realty agents have portions of their advertising bills on Zillow sites paid for by mortgage lenders. (Some quick background here: When buyers visit Zillow’s website, which includes millions of home listings, they frequently see “premium” agents featured prominently, along with a photo and contact information.)
“Premium” agents often are not the listing agent for the property, nor are they necessarily among the most active or successful in the neighborhood. Instead, they are advertisers, paying Zillow hundreds, sometimes thousands of dollars per month for the placement, hoping that shoppers will contact them. Given these high costs for leads, Zillow instituted a “co-marketing” plan that allows mortgage lenders to be featured on the same page as the agent, along with contact information. In exchange for the placement, lenders pay as much as half of the realty agent’s Zillow bill. As with premium agents, “premium” lenders do not necessarily offer the best financial deal or the lowest interest rates to the shopper; they pay money to reduce the realty agent’s monthly expenses and market their own mortgages.
Among the key issues in the CFPB’s investigation, according to legal experts familiar with the case, was whether the Zillow plan violates federal prohibitions against paying compensation for referrals of business — kickbacks. RESPA bans “giving or receiving” anything of value in exchange for referrals of business related to real estate settlements. The rationale is that referral payments are anti-consumer: They add to overall costs, they frequently are unknown to the consumer, and they discourage shopping for the best available services or prices. Zillow insists its co-marketing plan does not entail referrals or endorsements, but on its website in an area designated for realty agents it touts the program as a way to “promote your favorite lenders to customers on Zillow.”
The full Washington Post article is at https://www.washingtonpost.com/realestate/consumer-agency-will-not-take-action-against-zillow/2018/07/02/d3eedaa8-7e15-11e8-b660-4d0f9f0351f1_story.html?noredirect=on&utm_term=.e16c29e973a9
Perspectives on Poverty Law from the Bench: DC Superior Court
From Washington Council of Lawyers:
Trial-court judges with busy dockets must treat each litigant fairly, give each person a chance to be heard, and still keep cases moving apace. Doing all three things is challenging, especially given how many cases most judges have and the number of parties who don't have lawyers.
It's a lot to juggle, and we'll find out how judges do it—and still try to deliver justice—at Perspectives on Poverty Law from the Bench: DC Superior Court. This brown-bag lunch and panel takes place on Tuesday, July 10, from noon to 1:30 at DLA Piper (500 8th Street NW).
The event is free, but space is limited. Register here. [ https://wclawyers.wildapricot.org/EmailTracker/LinkTracker.ashx?linkAndRecipientCode=UF9WJHIWLqH3bsV4TH0gAlMt3qmHEr3cID7O%2bBfBrUYtV5rm%2beGX%2bDyCvM8XEs6srLme594vR56IDDKxpwGk4TYdt2g1NvPxQygf%2fSWvdB0%3d]
Our panel includes D.C. Superior Court Associate Judges Robert Okun and Anita Josey-Herring and Magistrate Judge Noel Johnson. Associate Judge Julie Becker will moderate.
Bring your lunch and feel free to bring a friend; we'll supply drinks, desserts, and a lively, candid discussion.
Nancy Lopez (@NancyLopezWCL)
Executive Director, Washington Council of Lawyers
From Washington Council of Lawyers:
Trial-court judges with busy dockets must treat each litigant fairly, give each person a chance to be heard, and still keep cases moving apace. Doing all three things is challenging, especially given how many cases most judges have and the number of parties who don't have lawyers.
It's a lot to juggle, and we'll find out how judges do it—and still try to deliver justice—at Perspectives on Poverty Law from the Bench: DC Superior Court. This brown-bag lunch and panel takes place on Tuesday, July 10, from noon to 1:30 at DLA Piper (500 8th Street NW).
The event is free, but space is limited. Register here. [ https://wclawyers.wildapricot.org/EmailTracker/LinkTracker.ashx?linkAndRecipientCode=UF9WJHIWLqH3bsV4TH0gAlMt3qmHEr3cID7O%2bBfBrUYtV5rm%2beGX%2bDyCvM8XEs6srLme594vR56IDDKxpwGk4TYdt2g1NvPxQygf%2fSWvdB0%3d]
Our panel includes D.C. Superior Court Associate Judges Robert Okun and Anita Josey-Herring and Magistrate Judge Noel Johnson. Associate Judge Julie Becker will moderate.
Bring your lunch and feel free to bring a friend; we'll supply drinks, desserts, and a lively, candid discussion.
Nancy Lopez (@NancyLopezWCL)
Executive Director, Washington Council of Lawyers
The role of the States in monopolization cases
Some years ago I wrote about the role of the States in monopolization cases. My main point was that the States had played a role of significance to businesses and consumers. That demonstrated that States could do it again. Review of past and more recent State enforcement efforts provides a useful reminder of what the States can do in the future.
State Enforcement Activities Against Microsoft
The active role of States in the litigation against Microsoft is well known. It has now become an old story, but a useful reminder of the potential of the States. Briefly, in 1998 a group of States joined with the DOJ in filing a complaint against Microsoft alleging monopolization, and two years later Microsoft was found liable for maintaining an illegal monopoly in personal computer operating systems.
Following an appeal and several additional court hearings, the U.S. District Court for the District of Columbia issued judgments in 2002 prohibiting Microsoft from continuing certain unlawful conduct. In testimony before the Antitrust Modernization Commission, Steve Houck and Kevin O’Connor, the attorneys who represented plaintiff States at the Microsoft liability trial, emphasized the independent and aggressive role taken by States. They said that the States had decided to file a complaint against Microsoft before the DOJ did and were prepared to proceed without the DOJ. They said that after consolidation of the State and federal actions against Microsoft, the States made important contributions to the trial, and acted independently and assertively in pursuing settlement negotiations.
Some of the States that participated in the liability trial against Microsoft agreed to settlement in 2001, but not all. Non-settling States filed in court for additional relief. The results of their efforts were meager, as the litigated decree added little to the consent decree. Both the consent and litigated decrees provided for termination five years after entry, subject to the court later ordering an extension.
In October 2007, some States filed motions to extend the termination dates of the Final Judgments. Despite opposition by the DOJ, Judge Kollar-Kotelly partially granted the motions. The DOJ argued in part that “the California Movants do not provide any evidence that the goals of the expiring provisions of the Final Judgments have not been achieved.” Judge Kollar-Kotelly reached a different conclusion: Based upon the extreme and unforeseen delay in the availability of complete, accurate, and useable technical documentation, the Court required Microsoft to make such information available to licensees under the Final Judgments.
As a consequence of the court’s granting the States’ motion, significant portions of the Final Judgment were enforced by the States alone.
Recent State Enforcement
States have continued to be aggressive in initiating monopolization challenges in other industries, such as pharmaceuticals.
For example, in 2017 the states of Alaska, Maryland, New York, Texas and Washington joined in the FTC’s complaint and a $100 million settlement with Mallinckrodt ARD Inc.
The Complaint alleged that Mallinckrodt ARD Inc., formerly known as Questcor, violated the antitrust laws when Questcor acquired the rights to a drug that threatened its monopoly in the U.S. market for adrenocorticotropic hormone (ACTH) drugs. Acthar is a specialty drug used as a treatment for infantile spasms, a rare seizure disorder afflicting infants, as well a drug of last resort used to treat other serious medical conditions.
The Complaint alleges that, while benefitting from an existing monopoly over the only U.S. ACTH drug, Acthar, Questcor illegally acquired the U.S. rights to develop a competing drug, Synacthen Depot. The acquisition stifled competition by preventing any other company from using the Synacthen assets to develop a synthetic ACTH drug, preserving Questcor’s monopoly and allowing it to maintain extremely high prices for Acthar.
These stories suggest continuing reasons to believe that vigorous State prosecutors will in the future pursue monopolization cases based on a pragmatic and sometimes aggressive view of specific facts, and be independent about it if necessary. They can do it.
By Don Allen Resnikoff
When Scott Pruitt was Oklahoma’s Attorney General
Scott Pruitt has famously failed to survive ethical scrutiny as a big fish in national waters. But what was he like when he was Attorney General in the more local waters of Oklahoma? That is of interest to those of us interested in local law enforcement. Several publications, including the New York Times, have offered articles suggesting that his behavior then was similar. Here is an excerpt from an article in Mother Jones:
As attorney general of Oklahoma from 2011 to 2017, Pruitt fostered close ties with industry interests, including Koch-funded groups, oil and gas, and agriculture. He used his position as attorney general to advance these interests, copying their language to use against Barack Obama’s EPA, while he benefited from their political support and campaign donations. He targeted the Humane Society’s nonprofit tax status, which the group’s President Wayne Pascell said was motivated by its feud with the Oklahoma Farm Bureau, a Pruitt ally. The AG’s office was slow to release emails that detailed the full extent of Pruitt’s close ties with industry, only making some emails public after a court order that was issued the same day he was confirmed by the US Senate for the EPA.
* * *
At his Senate confirmation hearing last year, Sen. Cory Booker (D-N.J.) asked Pruitt if he used a private email as attorney general. Pruitt answered he did not. Shortly after, Oklahoma reporter Phil Cross found that Pruitt had used a non-government email address in publicly released records. On top of the private email, groups such as the Oklahoma chapter of the American Civil Liberties Union are still fighting for the remainder of Pruitt’s emails with industry groups like Devon Energy. An earlier batch of emails revealed that Pruitt’s Oklahoma office thanked a Devon staffer with messages like, “You are so amazingly helpful!!!” while adopting much of Devon’s language as its own for a letter opposing Obama’s attempt to rein in methane leaks from drilling operations.
Full article: https://www.motherjones.com/environment/2018/04/scott-pruitt-was-always-an-ethical-nightmare/
Here is an excerpt from an article in the New York Times:
During his six years as attorney general, Mr. Pruitt blazed a path of spending that holds new meaning now that his E.P.A. expenditures are the subject of investigations and growing political outrage.
[Photo caption] Early into Mr. Pruitt’s term as state attorney general, he and his wife paid $1.18 million for a 5,518-square-foot home in Tulsa.
Mr. Pruitt moved the attorney general’s outpost in Tulsa to a prime suite in the Bank of America tower, an almost $12,000-a-month space that quadrupled the annual rent. He required his staff to regularly drive him between Tulsa and Oklahoma City, according to several people familiar with his time as attorney general.
And he channeled state contracts to Mr. Wagner’s law firm, which was already doing business with the state.
From 2011 to 2017, state records show, the attorney general’s office awarded more than $600,000 in contracts to Mr. Wagner’s Tulsa-based law firm, Latham, Wagner Steele & Lehman — greatly increasing work with the firm, which had gotten a total of about $100,000 over the four years before that. These contracts are not competitively bid. The additional expenditures reflected an approach, contentious even among some fellow Republicans, to hire private lawyers for state business, often for cases challenging federal regulations.
“He said that these people had special expertise that his agency didn’t have,” said Paul Wesselhoft, a Republican former state representative. “He has an army of lawyers with expertise. He didn’t have to spend that extra tax money to hire another law firm. It didn’t seem frugal.”
Mr. Pruitt used the Bank of America building as a base for his growing political ambitions. Oklahoma Strong Leadership, a political action committee he formed in 2015 to help finance fellow Republicans’ campaigns, operated out of the building. The group shared a suite with another PAC tied to Mr. Pruitt, Liberty 2.0, as well as his campaign office.
Oklahoma Strong Leadership, funded by private donors and corporations, also appeared to support lavish travel and entertainment.
An analysis of expenditure disclosures by the Campaign Legal Center, a nonprofit that pushes for stricter rules governing money in politics, shows that just 9 percent of the PAC’s spending was devoted to other candidates. The group found that the PAC had disbursed more than $7,000 for trips to Hawaii in summer 2015 and 2016, $2,180 of which was spent at a Ritz-Carlton. The PAC also put $4,000 toward dining, including a $661 meal at the Cafe Pacific, a high-end seafood restaurant in Dallas.
The NYT article: https://www.nytimes.com/2018/04/21/us/politics/scott-pruitt-oklahoma-epa.html
Posting by Don Resnikoff
Scott Pruitt has famously failed to survive ethical scrutiny as a big fish in national waters. But what was he like when he was Attorney General in the more local waters of Oklahoma? That is of interest to those of us interested in local law enforcement. Several publications, including the New York Times, have offered articles suggesting that his behavior then was similar. Here is an excerpt from an article in Mother Jones:
As attorney general of Oklahoma from 2011 to 2017, Pruitt fostered close ties with industry interests, including Koch-funded groups, oil and gas, and agriculture. He used his position as attorney general to advance these interests, copying their language to use against Barack Obama’s EPA, while he benefited from their political support and campaign donations. He targeted the Humane Society’s nonprofit tax status, which the group’s President Wayne Pascell said was motivated by its feud with the Oklahoma Farm Bureau, a Pruitt ally. The AG’s office was slow to release emails that detailed the full extent of Pruitt’s close ties with industry, only making some emails public after a court order that was issued the same day he was confirmed by the US Senate for the EPA.
* * *
At his Senate confirmation hearing last year, Sen. Cory Booker (D-N.J.) asked Pruitt if he used a private email as attorney general. Pruitt answered he did not. Shortly after, Oklahoma reporter Phil Cross found that Pruitt had used a non-government email address in publicly released records. On top of the private email, groups such as the Oklahoma chapter of the American Civil Liberties Union are still fighting for the remainder of Pruitt’s emails with industry groups like Devon Energy. An earlier batch of emails revealed that Pruitt’s Oklahoma office thanked a Devon staffer with messages like, “You are so amazingly helpful!!!” while adopting much of Devon’s language as its own for a letter opposing Obama’s attempt to rein in methane leaks from drilling operations.
Full article: https://www.motherjones.com/environment/2018/04/scott-pruitt-was-always-an-ethical-nightmare/
Here is an excerpt from an article in the New York Times:
During his six years as attorney general, Mr. Pruitt blazed a path of spending that holds new meaning now that his E.P.A. expenditures are the subject of investigations and growing political outrage.
[Photo caption] Early into Mr. Pruitt’s term as state attorney general, he and his wife paid $1.18 million for a 5,518-square-foot home in Tulsa.
Mr. Pruitt moved the attorney general’s outpost in Tulsa to a prime suite in the Bank of America tower, an almost $12,000-a-month space that quadrupled the annual rent. He required his staff to regularly drive him between Tulsa and Oklahoma City, according to several people familiar with his time as attorney general.
And he channeled state contracts to Mr. Wagner’s law firm, which was already doing business with the state.
From 2011 to 2017, state records show, the attorney general’s office awarded more than $600,000 in contracts to Mr. Wagner’s Tulsa-based law firm, Latham, Wagner Steele & Lehman — greatly increasing work with the firm, which had gotten a total of about $100,000 over the four years before that. These contracts are not competitively bid. The additional expenditures reflected an approach, contentious even among some fellow Republicans, to hire private lawyers for state business, often for cases challenging federal regulations.
“He said that these people had special expertise that his agency didn’t have,” said Paul Wesselhoft, a Republican former state representative. “He has an army of lawyers with expertise. He didn’t have to spend that extra tax money to hire another law firm. It didn’t seem frugal.”
Mr. Pruitt used the Bank of America building as a base for his growing political ambitions. Oklahoma Strong Leadership, a political action committee he formed in 2015 to help finance fellow Republicans’ campaigns, operated out of the building. The group shared a suite with another PAC tied to Mr. Pruitt, Liberty 2.0, as well as his campaign office.
Oklahoma Strong Leadership, funded by private donors and corporations, also appeared to support lavish travel and entertainment.
An analysis of expenditure disclosures by the Campaign Legal Center, a nonprofit that pushes for stricter rules governing money in politics, shows that just 9 percent of the PAC’s spending was devoted to other candidates. The group found that the PAC had disbursed more than $7,000 for trips to Hawaii in summer 2015 and 2016, $2,180 of which was spent at a Ritz-Carlton. The PAC also put $4,000 toward dining, including a $661 meal at the Cafe Pacific, a high-end seafood restaurant in Dallas.
The NYT article: https://www.nytimes.com/2018/04/21/us/politics/scott-pruitt-oklahoma-epa.html
Posting by Don Resnikoff
Declaration filings from 18 state AG lawsuit challenging Trump administration immigrant family separation policies
From Washington State AG press release:
AG FERGUSON ASKS COURT TO ACCELERATE FAMILY SEPARATION CASE
Jul 2 2018AG’s motion includes declarations from families affected by separation policy
SEATTLE -- Attorney General Bob Ferguson today asked a federal judge to order the federal government to provide details about and access to victims of the Trump Administration’s family separation policy on an expedited schedule. Last week, Attorney General Ferguson led a coalition of 18 attorneys general in filing a lawsuit in Seattle seeking to end the family separation policy permanently.
The motion for expedited discovery is necessary because hundreds of separated parents are in federal custody and the Administration can move them to other facilities at any time without notice. The motion asks the court to order the federal government to cooperate in facilitating access to detained parents and to report to the court on the progress of such efforts.
In support of the motion, the states included declarations from parents and interviews with children [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%201-33.pdf ] separated by immigration officials as a result of the policy. The states also filed other declarations from immigration rights workers, elected officials and medical experts. The motion includes 99 declarations in all, and they can be found here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%201-33.pdf ], here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%2034-66.pdf ] and here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%2067-99.pdf ].
One migrant mother said her 14-month-old son was "full of dirt and lice" after being separated from his family for months by the Trump administration.
Another mother who fled Honduras after receiving death threats, currently held in Washington, described the experience of being separated from her 6-year-old son shortly after crossing the border: “From there, my son Jelsin and I were separated. I was not told where he was being taken. They only told me he would be a ward of the state. To calm my son down, I told him it would only be for three days, although I really did not know. We had never been apart.”
She was not able to speak to her son for almost a month. When she did contact him, she said, “He was only able to say a few words. He was just crying. … I cannot express the pain I have felt being apart from him.”
“The Trump Administration’s family separation policy is not over – it continues to harm thousands of parents and children,” said Ferguson. “The gut-wrenching stories we have heard from families demonstrate just how much it violates basic decency and fundamental American values. The policy also violates the Constitution, and I will continue to fight to put an end to it.”
"The federal government has an obligation to reunite children with their parents immediately, and an obligation to cease any and all policies that ignore the due process rights of families seeking asylum or refuge at any of our borders," Governor Jay Inslee said. "Washington will not cease nor desist until justice and fairness for every impacted child and parent in Washington state is restored."
The motion for expedited discovery [https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%207-2-18.pdf ], filed in the U.S. District Court for the Western District of Washington, requests that Judge Marsha Pechman order several actions to ensure that the Attorney General’s Office can collect information in a timely fashion.
If the judge grants the motion, it will require the federal government to respond to the states’ requests for information on an accelerated timeline and to cooperate with state requests to interview parents in federal detention. Some states have faced procedural difficulties or been denied access to federal detention centers and other federal locations that house affected immigrants.
Ferguson also requests weekly status conferences with the court during the period of expedited discovery.
Victims’ stories from Washington
In addition to the filing, the attorneys general included 99 declarations. Some declarations, given by experts in developmental psychology and public health, discuss the dangers of separating families and housing immigrant families together in barracks housing. Other declarations include those given directly by parents separated from their children and interviews with separated children.
Interviews and testimonies by parents and children voiced the sadness, distress and frustration the family separation policy has caused.
A 13-year-old girl was not able to say goodbye to her father when immigration officials separated them. The investigator wrote that the girl “reported that the guards threatened the people that they detained with separating them and sending them back home, she overheard them telling others they would be jailed for about 10 or 15 years, which scared her. The younger children were crying.”
In attempting to recount her experiences, the girl “had a hard time talking during most of the interview, was visibly upset and broke down in tears frequently.”
A 15-year-old girl identified as G and fleeing threats from a member of a criminal association in her home country, told the investigator “[Immigration officials] told her mother that G would be taken to another place where she would be able to visit her. G and her mother said goodbye to each other while crying, but G’s mother comforted her, saying she was going to visit her wherever she was going. Only later did G realize this was not true. As she recounted this moment, G was sobbing and visibly distraught.”
G also described seeing a 4-year-old girl crying inconsolably, and watching as an immigration official reprimanded the girl and turned her away.
Another girl in Washington is working with a therapist because she has nightmares. Immigration officials also separated her from her father shortly after she arrived in the United States.
Immigration officials took one mother’s children as she was in court. Upon returning and realizing this, she said, “I became physically unwell when I found out that my little boys had been taken away.”
Most parents related the difficulty they had had in contacting their children, and not receiving information on how to find their children from immigration officials. More than one parent relayed that after asking for weeks, their home country’s embassy was able to provide them with the location of their children.
A mother, fleeing death threats to her and her family, described the relief she had at finally contacting her daughter, but her daughter was unable to speak “because of how strongly she was sobbing.”
Though many families were seeking asylum, a number reported that immigration officials had never asked them why they sought refuge in the United States.
The motion includes costs the policy has imposed on states involved in the lawsuit, as well.
Ferguson and the states request that Judge Pechman consider their motion by July 13.
Ferguson leads a coalition of 17 states in the lawsuit: Massachusetts, California, Delaware, Iowa, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia.
The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.
Contacts:
Brionna Aho, Communications Director, (360) 753-2727; [email protected]
The California Supreme Court rules that Yelp did not need to remove negative comments posted by a user
In a 4-to-3 opinion, the court said that federal law protected internet companies from liability for statements written by others. The decision to remove posts is at the company’s discretion, the court said.
The Court's opinion is here: http://www.courts.ca.gov/opinions/documents/S235968.PDF
Excerpt from opinion:
In this case, we consider the validity of a court order, entered upon a default judgment in a defamation case, insofar as it directs appellant Yelp Inc. (Yelp) to remove certain consumer reviews posted on its website. Yelp was not named as a defendant in the underlying lawsuit, brought by plaintiffs Dawn Hassell and the Hassell Law Group, and did not participate in the judicial proceedings that led to the default judgment. Instead, Yelp became involved in this litigation only after being served with a copy of the aforementioned judgment and order. Yelp argues that, to the extent the removal order would impose upon it a duty to remove these reviews, the directive violates its right to due process under the federal and state Constitutions because it was issued without proper notice and an opportunity to be heard. Yelp also asserts that this aspect of the order is invalid under the Communications Decency Act of 1996, relevant provisions of which (found at 47 U.S.C. § 230, hereinafter referred to as section 230) relate, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider” (§ 230(c)(1)), and “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section” (§ 230(e)(3)). The Court of Appeal rejected Yelp’s arguments. We reverse. The Court of Appeal erred in regarding the order to Yelp as beyond the scope of section 230. That court reasoned that the judicial command to purge the challenged reviews does not impose liability on Yelp. But as explained below, the Court of Appeal adopted too narrow a construction of section 230.
In directing Yelp to remove the challenged reviews from its website, the removal order improperly treats Yelp as “the publisher or speaker of . . . information provided by another information content provider.” (§ 230(c)(1).) The order therefore must be revised to comply with section 230. I
In a 4-to-3 opinion, the court said that federal law protected internet companies from liability for statements written by others. The decision to remove posts is at the company’s discretion, the court said.
The Court's opinion is here: http://www.courts.ca.gov/opinions/documents/S235968.PDF
Excerpt from opinion:
In this case, we consider the validity of a court order, entered upon a default judgment in a defamation case, insofar as it directs appellant Yelp Inc. (Yelp) to remove certain consumer reviews posted on its website. Yelp was not named as a defendant in the underlying lawsuit, brought by plaintiffs Dawn Hassell and the Hassell Law Group, and did not participate in the judicial proceedings that led to the default judgment. Instead, Yelp became involved in this litigation only after being served with a copy of the aforementioned judgment and order. Yelp argues that, to the extent the removal order would impose upon it a duty to remove these reviews, the directive violates its right to due process under the federal and state Constitutions because it was issued without proper notice and an opportunity to be heard. Yelp also asserts that this aspect of the order is invalid under the Communications Decency Act of 1996, relevant provisions of which (found at 47 U.S.C. § 230, hereinafter referred to as section 230) relate, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider” (§ 230(c)(1)), and “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section” (§ 230(e)(3)). The Court of Appeal rejected Yelp’s arguments. We reverse. The Court of Appeal erred in regarding the order to Yelp as beyond the scope of section 230. That court reasoned that the judicial command to purge the challenged reviews does not impose liability on Yelp. But as explained below, the Court of Appeal adopted too narrow a construction of section 230.
In directing Yelp to remove the challenged reviews from its website, the removal order improperly treats Yelp as “the publisher or speaker of . . . information provided by another information content provider.” (§ 230(c)(1).) The order therefore must be revised to comply with section 230. I
GM's comments to the Commerce Department on the adverse effect of tariffs are here:
https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rJBrNbApznVU/v0
Excerpt:
Overly Broad and Steep Import Tariffs Undermine Our Ability to Compete
If import tariffs on automobiles are not tailored to specifically advance the objectives of the economic and national security goals of the United States, increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less—not more—U.S. jobs. The threat of steep tariffs on vehicle and auto component imports risks undermining GM’s competitiveness against foreign auto producers by erecting broad brush trade barriers that increase our global costs, remove a key means of competing with manufacturers in lower-wage countries, and promote a trade environment in which we could be retaliated against in other markets. The penalties we could incur from tariffs and increased costs will be detrimental to the future industrial strength and readiness of manufacturing operations in the United States, and could lead to negative consequences for our company and U.S. economic security.
Combined with the other trade actions currently being pursued by the U.S. Government—namely the 232 Steel and Aluminum tariffs and the Section 301 tariffs against Chinese imports—the threat of additional tariffs on automobile imports could be detrimental to our company. At some point, this tariff impact will be felt by customers. Based on historical experience, if cost is passed on to the consumer via higher vehicle prices, demand for new vehicles could be impacted. Moreover, it is likely that some of the vehicles that will be hardest hit by tariff-driven price increases—in the thousands of dollars—are often purchased by customers who can least afford to absorb a higher vehicle price point. The correlation between a decline in vehicle sales in the United States and the negative impact on our workforce here, which, in turn threatens jobs in the supply base and surrounding communities, cannot be ignored. Alternatively, if prices are not increased and we opt to bear the burden of tariffs or plant moves, this could still lead to less investment, fewer jobs, and lower wages for our employees. The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies and threaten U.S. leadership in the next generation of automotive technology.
https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rJBrNbApznVU/v0
Excerpt:
Overly Broad and Steep Import Tariffs Undermine Our Ability to Compete
If import tariffs on automobiles are not tailored to specifically advance the objectives of the economic and national security goals of the United States, increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less—not more—U.S. jobs. The threat of steep tariffs on vehicle and auto component imports risks undermining GM’s competitiveness against foreign auto producers by erecting broad brush trade barriers that increase our global costs, remove a key means of competing with manufacturers in lower-wage countries, and promote a trade environment in which we could be retaliated against in other markets. The penalties we could incur from tariffs and increased costs will be detrimental to the future industrial strength and readiness of manufacturing operations in the United States, and could lead to negative consequences for our company and U.S. economic security.
Combined with the other trade actions currently being pursued by the U.S. Government—namely the 232 Steel and Aluminum tariffs and the Section 301 tariffs against Chinese imports—the threat of additional tariffs on automobile imports could be detrimental to our company. At some point, this tariff impact will be felt by customers. Based on historical experience, if cost is passed on to the consumer via higher vehicle prices, demand for new vehicles could be impacted. Moreover, it is likely that some of the vehicles that will be hardest hit by tariff-driven price increases—in the thousands of dollars—are often purchased by customers who can least afford to absorb a higher vehicle price point. The correlation between a decline in vehicle sales in the United States and the negative impact on our workforce here, which, in turn threatens jobs in the supply base and surrounding communities, cannot be ignored. Alternatively, if prices are not increased and we opt to bear the burden of tariffs or plant moves, this could still lead to less investment, fewer jobs, and lower wages for our employees. The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies and threaten U.S. leadership in the next generation of automotive technology.
DC AG Racine's aggressive action against house-flippers that do shoddy renovations and rip off buyers.
From the report House flip couple to pay $1.6 Million in restitution - https://www.wusa9.com/article/news/local/house-flip-couple-to-pay-16-million-in-restitution/65-237254061
Virginia couple agrees to settle lawsuit filed by DC's Office of Attorney General
The AG's actions occurred some months ago, but reflect ongoing consumer protection issues. It seems that consumers often go into house purchases without realizing or dealing with risks from shoddy renovations. One ongoing consumer protection issue is education. Home buyers are not necessarily real estate experts, and may not know questions to ask and documents to demand.
Another ongoing issue is whether there should be a legal requirement that sellers provide disclosures to buyers when there has been recent renovation. Required disclosures might include whether the renovations were inspected by the City as being up to Code, and whether the work was done by properly licensed people.
Posted by Don Resnikoff
From the report House flip couple to pay $1.6 Million in restitution - https://www.wusa9.com/article/news/local/house-flip-couple-to-pay-16-million-in-restitution/65-237254061
Virginia couple agrees to settle lawsuit filed by DC's Office of Attorney General
The AG's actions occurred some months ago, but reflect ongoing consumer protection issues. It seems that consumers often go into house purchases without realizing or dealing with risks from shoddy renovations. One ongoing consumer protection issue is education. Home buyers are not necessarily real estate experts, and may not know questions to ask and documents to demand.
Another ongoing issue is whether there should be a legal requirement that sellers provide disclosures to buyers when there has been recent renovation. Required disclosures might include whether the renovations were inspected by the City as being up to Code, and whether the work was done by properly licensed people.
Posted by Don Resnikoff
NYT editorial says USDOJ approval of Fox-Disney deal looks political
Excerpts:
[I]t was stunning when the department announced on Wednesday — just six months after the deal was announced — that it had approved Disney’s $71 billion purchase of the entertainment assets of 21st Century Fox, one of Disney’s top rivals.
***
Mr. Trump and his aides have publicly criticized the AT&T-Time Warner deal — the president said last November that it’s “not good for the country.” And he regularly lambastes CNN, the news network owned by Time Warner.
But he’s all praise when it comes to 21st Century Fox and its executive chairman, Rupert Murdoch. In December, the White House press secretary, Sarah Huckabee Sanders, told reporters that the president congratulated Mr. Murdoch on the impending Disney deal. In addition, Mr. Trump praises Fox News and its hosts every chance he gets — and they regularly return the favor. While Disney will not acquire Fox News or the Fox network and stations as part of this deal, the acquisition will make the Murdoch family the largest individual shareholders in Disney, increasing their wealth by billions of dollars.
The Justice Department’s antitrust chief, Makan Delrahim, will surely argue that the president’s feelings about CNN and Fox News have no bearing on his decisions. But it is mystifying why Mr. Delrahim took such a hard line against AT&T-Time Warner, which legal experts argued would be a difficult case to bring because of the nature of the merger, while going so easy on Disney-Fox.
Full editorial: https://www.nytimes.com/2018/07/01/opinion/disney-fox-deal.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region
Excerpts:
[I]t was stunning when the department announced on Wednesday — just six months after the deal was announced — that it had approved Disney’s $71 billion purchase of the entertainment assets of 21st Century Fox, one of Disney’s top rivals.
***
Mr. Trump and his aides have publicly criticized the AT&T-Time Warner deal — the president said last November that it’s “not good for the country.” And he regularly lambastes CNN, the news network owned by Time Warner.
But he’s all praise when it comes to 21st Century Fox and its executive chairman, Rupert Murdoch. In December, the White House press secretary, Sarah Huckabee Sanders, told reporters that the president congratulated Mr. Murdoch on the impending Disney deal. In addition, Mr. Trump praises Fox News and its hosts every chance he gets — and they regularly return the favor. While Disney will not acquire Fox News or the Fox network and stations as part of this deal, the acquisition will make the Murdoch family the largest individual shareholders in Disney, increasing their wealth by billions of dollars.
The Justice Department’s antitrust chief, Makan Delrahim, will surely argue that the president’s feelings about CNN and Fox News have no bearing on his decisions. But it is mystifying why Mr. Delrahim took such a hard line against AT&T-Time Warner, which legal experts argued would be a difficult case to bring because of the nature of the merger, while going so easy on Disney-Fox.
Full editorial: https://www.nytimes.com/2018/07/01/opinion/disney-fox-deal.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region
DC Mayor Bowser on the DC Violence Interrupter program
We know that policing alone will not end violence in our communities,” said Mayor Bowser. “The organizations we selected have already done so much to strengthen our community, and these partnerships will serve as critical tools for engaging residents, preventing senseless violence, providing the supports and resources our most vulnerable neighbors need to succeed, and building a safer, stronger DC.
”The violence interruption program will cover all eight wards, with Training Grounds providing interruption services in Wards 6 and 7 and the Far Southeast Family Strengthening Collaborative providing services in Ward 8. Training Grounds is a District-based non-profit organization founded in 2005 with a mission to assist youth and adults with personal, career, and leadership development through neighborhood-based services. The Far Southeast Family Strengthening Collaborative, also District-based, is guided by its mission to act as a catalyst to develop, nurture, and sustain partnerships of residents, agencies, and institutions in the Southeast community and to create a healthy socioeconomic environment. The community partner serving Wards 1-5 will be announced tomorrow.
When choosing the providers, the Safer Stronger DC Office of Neighborhood Safety and Engagement sought providers that would be able to:
See also https://www.nbcwashington.com/news/local/DC-Using-Violence-Interrupters-to-Stop-Crime_Washington-DC-486501761.html
We know that policing alone will not end violence in our communities,” said Mayor Bowser. “The organizations we selected have already done so much to strengthen our community, and these partnerships will serve as critical tools for engaging residents, preventing senseless violence, providing the supports and resources our most vulnerable neighbors need to succeed, and building a safer, stronger DC.
”The violence interruption program will cover all eight wards, with Training Grounds providing interruption services in Wards 6 and 7 and the Far Southeast Family Strengthening Collaborative providing services in Ward 8. Training Grounds is a District-based non-profit organization founded in 2005 with a mission to assist youth and adults with personal, career, and leadership development through neighborhood-based services. The Far Southeast Family Strengthening Collaborative, also District-based, is guided by its mission to act as a catalyst to develop, nurture, and sustain partnerships of residents, agencies, and institutions in the Southeast community and to create a healthy socioeconomic environment. The community partner serving Wards 1-5 will be announced tomorrow.
When choosing the providers, the Safer Stronger DC Office of Neighborhood Safety and Engagement sought providers that would be able to:
- establish a strong presence in communities that have experienced high levels of violence;
- build partnerships with community members, local agencies, community-based organizations, and businesses to prevent violence and increase community efficacy;
- cultivate relationships with individuals and families most at-risk of participating or being victims of violence;
- connect high-risk individuals and families to resources needed to meet personal goals and objectives; and
- prevent retaliatory violence.
See also https://www.nbcwashington.com/news/local/DC-Using-Violence-Interrupters-to-Stop-Crime_Washington-DC-486501761.html
From PBS: Stockton's young mayor giving city’s youth more opportunities
Jun 30, 2018 4:54 PM EDT
By --Ivette Feliciano Ivette Feliciano --Zachary Green Zachary Green
Stockton, California has come a long way since 2012, when it became the largest U.S. city to declare bankruptcy. Now that it’s solvent, Mayor Michael Tubbs, who was sworn in as the youngest and first-ever black mayor last year, says that using philanthropy and other resources to fight inequality could help secure the city’s financial status.
Excerpt from video:
Jun 30, 2018 4:54 PM EDT
By --Ivette Feliciano Ivette Feliciano --Zachary Green Zachary Green
Stockton, California has come a long way since 2012, when it became the largest U.S. city to declare bankruptcy. Now that it’s solvent, Mayor Michael Tubbs, who was sworn in as the youngest and first-ever black mayor last year, says that using philanthropy and other resources to fight inequality could help secure the city’s financial status.
Excerpt from video:
- IVETTE FELICIANO:
Mayor Tubbs is spearheading a raft of programs addressing violence and inequality in Stockton. Each initiative receives philanthropic funding and is administered independently. One program launching next year is an eighteen-month experiment called the Stockton Economic Empowerment Demonstration–or “SEED”. One hundred recipients will receive five hundred dollars a month on top of what they earn through work. - MAYOR MICHAEL TUBBS:
When one in two Californians can’t afford one $500 emergency, I think that that tells us that, yes, $500 a month matters. - OUTREACH WORKER:
We connect and we talk to people. - IVETTE FELICIANO:
Another program in the works is called Advance Peace, which got its start in 2007 in the nearby city of Richmond. Homicides there have since fallen by more than half. Outreach workers make contact with young men who have had run-ins with law enforcement and then work with them on reforming criminal behavior. Participants may even earn cash stipends for meeting certain benchmarks–like holding down a job or going through drug rehabilitation. - MAYOR MICHAEL TUBBS:
The idea is to target and identify the guys who are currently driving our violent crime rate, which is less than 1% of the population. And to flood them with as much attention as the police used to give them.
URL: https://www.pbs.org/newshour/show/stocktons-young-mayor-giving-citys-youth-more-opportunities
WSJ on the connection between US sanctions on Iran and local gasoline prices
Oil’s recent rally has been undeterred by the prospect of higher production. Prices have gained 11% since OPEC gathered Friday and agreed to raise output. On Wednesday, U.S. oil futures rose to their highest level since November 2014, settling at $72.76 a barrel.
The shift in sentiment stems from a drop-off in Venezuelan production and concerns that harsher-than-anticipated U.S. sanctions on Iran could curb the country’s oil exports and exacerbate supply disruptions.
“If the administration is going to take as hard a line on Iranian exports as their statements would suggest, consumers are going to pay higher prices at the pump, even if OPEC and other countries produce as much as they can," said Jason Bordoff, director of Columbia University's Center on Global Energy Policy.
OPEC has faced pressure to increase supply as oil prices have soared, but analysts say major producers like Saudi Arabia and Russia may not be able to fill the gap left by other exporters.
"Saudi Arabia can't save you from an oil price spike if you sanction Iran,” said Bob McNally, president of Rapidan Energy Group, a consulting firm. “That’s what the market is telling you.”
Excerpt from WSJ article by Stephanie Yang. (paywall)
Oil’s recent rally has been undeterred by the prospect of higher production. Prices have gained 11% since OPEC gathered Friday and agreed to raise output. On Wednesday, U.S. oil futures rose to their highest level since November 2014, settling at $72.76 a barrel.
The shift in sentiment stems from a drop-off in Venezuelan production and concerns that harsher-than-anticipated U.S. sanctions on Iran could curb the country’s oil exports and exacerbate supply disruptions.
“If the administration is going to take as hard a line on Iranian exports as their statements would suggest, consumers are going to pay higher prices at the pump, even if OPEC and other countries produce as much as they can," said Jason Bordoff, director of Columbia University's Center on Global Energy Policy.
OPEC has faced pressure to increase supply as oil prices have soared, but analysts say major producers like Saudi Arabia and Russia may not be able to fill the gap left by other exporters.
"Saudi Arabia can't save you from an oil price spike if you sanction Iran,” said Bob McNally, president of Rapidan Energy Group, a consulting firm. “That’s what the market is telling you.”
Excerpt from WSJ article by Stephanie Yang. (paywall)
Quotation of the day: Judge Richard Posner on a politicized judiciary:
“We have a very crappy judicial system. That’s the long and short of it. And that contaminates much of government,” said Posner. “In England, judges up to the level of the Supreme Court are appointed by commissions which are composed of judges and professors, not politicians or Parliament. Our federal courts are instead appointed by politicians and the president, and confirmed by the Senate. Those politicians do not care about quality, beyond a very low minimum. They care about other things: tokens, political and religious leanings. So you end up with mediocre courts that are highly politicized."
URL: https://promarket.org/richard-posner-real-corruption-ownership-congress-rich/
Editorial comment: We take no position on Posner's observations, but offer them to provoke discussion. DAR
“We have a very crappy judicial system. That’s the long and short of it. And that contaminates much of government,” said Posner. “In England, judges up to the level of the Supreme Court are appointed by commissions which are composed of judges and professors, not politicians or Parliament. Our federal courts are instead appointed by politicians and the president, and confirmed by the Senate. Those politicians do not care about quality, beyond a very low minimum. They care about other things: tokens, political and religious leanings. So you end up with mediocre courts that are highly politicized."
URL: https://promarket.org/richard-posner-real-corruption-ownership-congress-rich/
Editorial comment: We take no position on Posner's observations, but offer them to provoke discussion. DAR
From SCOTUS BLOG: Beth Farmer, a very able reporter, summarizes the recent US Supreme Court decision in the Amex case:
Opinion analysis:
Divided court defines credit-card networks as single two-sided market, rejecting antitrust challenge to anti-steering provision
Posted Mon, June 25th, 2018 6:12 pm by Beth Farmer http://www.scotusblog.com/2018/06/opinion-analysis-divided-court-defines-credit-card-networks-as-single-two-sided-market-rejecting-antitrust-challenge-to-anti-steering-provision/
Today, the Supreme Court ruled that American Express’ anti-steering provisions do not violate the federal antitrust laws. In a 5-4 decision, Justice Clarence Thomas wrote that credit networks such as Amex provide services to cardholders and merchants in a “special type of two-sided platform known as a ‘transaction platform,’” and that this platform is a relevant market for the purposes of antitrust analysis in this vertical-restraints case.
According to the majority, the district court did not define the relevant market properly and the plaintiffs below, Ohio and 10 other states, failed to meet their burden of proving that the challenged anti-steering provision caused competitive harm in a properly defined market. Thomas was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Samuel Alito and Neil Gorsuch. Justice Stephen Breyer, joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan, dissented.
The case arose from a Sherman Act Section 1 complaint filed by the U.S. Department of Justice and 17 states that challenged provisions in contracts between American Express and merchants that accept Amex credit cards.
In credit-card transactions, a platform such as the one operated by Amex effectively connects cardholder buyers and merchant sellers, allowing the buyers to obtain the product or service immediately and pay later, and the merchant to receive prompt, guaranteed payment. Amex charges a fee to merchants for each transaction with an Amex card. Merchant fees can vary and the district court found in this case that the Amex merchant fees were historically higher than the fees of other networks. Because the price a buyer pays for the item does not change depending on the particular credit card used, merchants prefer to accept credit cards with lower merchant fees. The Amex anti-steering contract provision prohibited merchants from steering customers to use another credit card or means of payment at the moment of the purchase.
The issue in the case was whether Amex’s anti-steering contract provision was an unreasonable restraint of trade prohibited by the Sherman Act. As I explained in my preview, vertical price and non-price agreements are judged under the rule of reason, which provides that business practices only violate the antitrust law when their effect is to restrain trade unreasonably. Traditionally, plaintiffs have the burden of identifying and describing the challenged conduct and showing that it causes harm to competition. If they meet that burden, the burden shifts to the defendants to establish procompetitive benefits from the conduct. The district court found that the plaintiffs had met their burden, establishing a prima facie case by showing that there was an actual harm to competition in the market for cardholder services for merchants. The 2nd Circuit reversed, holding that the relevant market was the entire two-sided market, consisting of both merchants and cardholders, and that the plaintiffs had failed to show actual or predicted harm in that market. Today, the Supreme Court accepted the 2nd Circuit’s market definition for this particular type of market, and held that the plaintiffs had not proved that the anti-steering provision adversely affected competition.
The majority and dissent agreed on the burden-shifting structure of an antitrust rule of reason case, but little else. Citing a number of scholarly articles, Thomas described modern credit-card transactions as part of a “special type” of two-sided platform called “transaction” platforms. Two-sided markets in general involve sales of products or services to two different sets of buyers. For the majority, a transaction platform requires a simultaneous sale to both sides of the market — that is, the consumer cardholder and the merchant — facilitated by the credit-card platform. These two-sided platforms involve “indirect network effects” because the value of each side of the platform depends on the other side of the platform – the more consumers that use Amex cards, the more merchants are likely to accept Amex cards for payment. In a footnote, Thomas stated that, in competitive markets, these indirect network effects “encourage” firms to increase prices and profits on one side of the platform and divert them to the other side to increase the number of participants on that side of the market.
With that as background, the majority sketched out areas of agreement between the parties: The challenged anti-steering provisions are vertical agreements, the proper antitrust analysis involves a three-step burden-shifting rule of reason, and the plaintiff must prove a substantial anticompetitive effect to shift the burden of going forward with the evidence to the defendant. There was also agreement that the anticompetitive effects can be shown directly by actual harm to competition or by proof of market power and “some evidence” of harm. At this stage, the government is relying on direct evidence of competitive harm. However, the majority stated that market definition is required, even when plaintiffs assert direct evidence of actual anticompetitive effects. Distinguishing Federal Trade Commission v. Indiana Federation of Dentists because it involved horizontal agreements, the court stated that “vertical restraints are different” because there is usually no risk to competition absent market power, so the market and the defendant’s market shares must be identified.
Markets are usually defined by starting with the product at issue and then identifying reasonable substitutes from the buyers’ point of view. However, the majority stated, “commercial realities” may require inclusion of different products or services in a single market, citing United States v. Grinnell Corp. (1966) and Brown Shoe Company Inc. v. United States (1962). Accordingly, the majority wrote that price increases on the merchant side of the two-sided credit card platforms may not reflect either market power or competitive harm. Therefore, both sides of the platform must be included in credit-card markets. The majority took care to limit this rule, noting that “two-sided transaction platforms, like the credit-card market, are different,” so not every two-sided market constitutes a relevant market for antitrust purposes. The key distinction is that a credit-card platform is a transaction platform that facilitates a single, simultaneous transaction.
Having defined the relevant market, the majority stated that the competitive effects must include both the merchant side and the consumer/buyer side of the credit-card transaction. Credit card firms sell transactions, the majority stressed, so plaintiffs must prove that the anti-steering provision increased the cost of transactions or reduced the number of transactions as compared to competitive markets. In this case, they failed to do so. Higher merchant fees were not sufficient proof and, in any case, might indicate a competitive market in which the consumer side of the market was receiving benefits, such as rebates or airline miles. Finally, the majority observed that the credit-card market has expanded, offering a larger variety of cards to diverse consumers and more credit cards overall.
In dissent, Breyer began with a short history of the antitrust rule of reason. He noted that everyone agrees that step one of the analysis requires plaintiffs to show the fact or likelihood of anticompetitive effects and that the issue in this case is how to apply step one. Then the dissent diverged from the majority almost completely. Relying on Indiana Federation of Dentists, Breyer emphasized that market definition is not always required because it is merely a surrogate for actual competitive effects.
The dissent went on to fault the majority’s market definition for incorrectly conflating complementary products rather than using substitutes to define a relevant product market. Complementary products, Breyer argued, are those that function in tandem so that output likely increases together — for example, gasoline and car tires, tennis balls and tennis rackets, and so forth. Breyer found no support in antitrust law for treating customer- or buyer-related services and merchant-related services as a single market. Accordingly, using consumer substitution or, as in Grinnell, producer substitution, as the test, he argued that the market is merchant-related credit-card services, at least as part of step one of the rule of reason.
Breyer found no support in case law or economic literature for the majority’s definition of a market for “two-sided transaction platforms” that include four elements: different products or services, different groups of customers, connection by the platform and simultaneous transactions. Characterizing the definition as “novel,” the dissent failed to find adequate justification for a special rule of market definition, and concluded that traditional principles of market definition should apply to this industry.
Pointing to footnote 7 in the majority opinion, Breyer also noted that the majority “seems categorically to exempt vertical restraints from the ordinary ‘rule of reason’ analysis that has applied to them since the Sherman Act’s enactment in 1890.” He asserted that this would be a new development, because, although the majority cites Leegin Creative Leather Products Inc. v. PSKS Inc. in support, that case did not create such a “novel exemption.”
Finally, Breyer maintained that the government had proved its prima facie case even under the market definition employed by the 2nd Circuit and the majority. He concluded that the “majority’s decision in this case is contrary to basic principles of antitrust law, and it ignores and contradicts the District Court’s detailed factual findings, which were based on an extensive trial record.”
The case is important for the announcement of a new requirement of proof of market definition and market power at step one of the rule of reason in vertical-restraints cases, even when plaintiffs seek to prove competitive harm by direct evidence. It also appears to announce a new relevant market for transaction platforms, which may be distinguishable from other two-sided markets. From now on, plaintiffs may be required to prove total competitive harm summing both sides of the market at step one of a rule of reason case.
[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, is among the counsel on an amicus brief in support of the petitioners in this case. The author of this post is not affiliated with the firm.]
Appellate Court vacates "fiduciary rule."
The opinion is here: https://www.ca5.uscourts.gov/opinions/pub/17/17-10238-CV0.pdf
Excerpt from opinion:
Three business groups filed suits challenging the “Fiduciary Rule” promulgated by the Department of Labor (DOL) in April 2016. The Fiduciary Rule is a package of seven different rules that broadly reinterpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (ERISA), codified as amended at 29 U.S.C. § 1001 et seq, and the Internal Revenue Code, 26 U.S.C. § 4975. The stated purpose of the new rules is to regulate in an entirely new way hundreds of thousands of financial service providers and insurance companies in the trillion dollar markets for ERISA plans and individual retirement accounts (IRAs). The business groups’ challenge proceeds on multiple grounds, including (a) the Rule’s inconsistency with the governing statutes, (b) DOL’s overreaching to regulate services and providers beyond its authority, (c) DOL’s imposition of legally unauthorized contract terms to enforce the new regulations, (d) First Amendment violations, and (e) the Rule’s arbitrary and capricious treatment of variable and fixed indexed annuities. The district court rejected all of these challenges. Finding merit in several of these objections, we VACATE the Rule.
The opinion is here: https://www.ca5.uscourts.gov/opinions/pub/17/17-10238-CV0.pdf
Excerpt from opinion:
Three business groups filed suits challenging the “Fiduciary Rule” promulgated by the Department of Labor (DOL) in April 2016. The Fiduciary Rule is a package of seven different rules that broadly reinterpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (ERISA), codified as amended at 29 U.S.C. § 1001 et seq, and the Internal Revenue Code, 26 U.S.C. § 4975. The stated purpose of the new rules is to regulate in an entirely new way hundreds of thousands of financial service providers and insurance companies in the trillion dollar markets for ERISA plans and individual retirement accounts (IRAs). The business groups’ challenge proceeds on multiple grounds, including (a) the Rule’s inconsistency with the governing statutes, (b) DOL’s overreaching to regulate services and providers beyond its authority, (c) DOL’s imposition of legally unauthorized contract terms to enforce the new regulations, (d) First Amendment violations, and (e) the Rule’s arbitrary and capricious treatment of variable and fixed indexed annuities. The district court rejected all of these challenges. Finding merit in several of these objections, we VACATE the Rule.
What happened with the US trade war with Chinese phone company ZTE?
Excerpt from Jeff Spross article in THE WEEK -- URL http://theweek.com/articles/779687/trump-senates-cold-war-over-zte-about-turn-hot
Earlier this month, Commerce Secretary Wilbur Ross said an agreement had been reached with ZTE: In exchange for allowing the company to trade with America again, ZTE would pay a $1 billion fine, replace its management, and allow U.S. officials to conduct oversight of its operations.
This is where things get interesting.
Reaction to the deal from politicians on both sides of the aisle was angry and immediate. And it was the Senate, normally a staid and sober institution, that reacted the most forcefully: Sens. Chris Van Hollen (D-Md.) and Tom Cotton (R-Ark.), along with Senate Minority Leader Chuck Schumer (D-N.Y.), got an amendment added to the National Defense Authorization Act (NDAA) that would scuttle Commerce's deal and resurrect the ban on doing business with ZTE. It would require Trump to certify that ZTE is in compliance for a full year before lifting the bans. Cotton's involvement is especially noteworthy since he's been a long-time Trump ally. The senators also have support from other conservative stalwarts, like Sen. Marco Rubio (R-Fla.) and Sen. John Cornyn (R-Texas), the Republicans' second-in-command in the chamber.
In fact, they went further. The amendment not only went after ZTE, it also banned the U.S. government from doing any business with or giving loans to an even bigger Chinese telecommunications firm called Huawei. The latter is the world's third-largest supplier of smartphones, it brought in over $90 billion in 2017, and it employs 180,000 people. For years, suspicions have swirled that heavy American reliance on Huawei's products could allow the Chinese to spy on U.S. communications. The government hasn't nailed down evidence of misbehavior by the company the same way it has with ZTE, but previous reports at least raised concerns from industry experts and former Huawei employees that it's falling afoul of various U.S. laws.
The Senate passed the NDAA with the amendment Monday night.
Of course, support for the amendment is not universal in the Senate or the House, so it's conceivable the language could get watered down or eliminated in conference before it reaches Trump's desk. But the NDAA bill is considered must-pass legislation, which shows how serious the senators are about cracking down on both ZTE and Huawei: Should the amendment turn into a sticking point, or if the White House threatens to veto the NDAA over the amendment, the controversy would force a massive funding bill for U.S. defense back to the drawing board. "I talked to my colleagues on the Intelligence Committee and they are pretty dug in on this," said Sen. Bob Corker (R-Tenn.).
Ross went to Congress to lobby against the amendment. But it's unclear if the White House would actually go to the mat and threaten a veto over it. "I don't think the president cares about ZTE. Someone told me that he gave them a wink and a nod and told them he didn't care," Corker added. "I think [Trump] did what he did for the Chinese leader but doesn't really care what Congress does."
Nationalism has always played a big role in Republican politics. But cutting taxes and regulations for corporations is equally, if not more, important. The GOP has generally shied away from expressing nationalism through aggressive U.S. trade policies, and has instead focused on national security issues. That's certainly where the Republican senators amassed against ZTE and Huawei are coming from.
Trump, on the other hand, has been happy to deploy economic policy in defense of nationalism as well. Indeed, to the extent he's used laws meant for national security to slap tariffs on China and other countries, it's been a rather obvious pretext for starting trade fights in the name of jobs. But he also wants to be seen as America's dealmaker-in-chief, so if he ultimately forces other countries to the bargaining table — as seemed to happen with China on ZTE, initially — he's fine with that too.
All of which is how we've arrived at the odd impasse of the normally laissez-faire Senate trying to pick a trade fight with China, while the Trump administration pushes for comity and the cessation of hostilities.
Excerpt from Jeff Spross article in THE WEEK -- URL http://theweek.com/articles/779687/trump-senates-cold-war-over-zte-about-turn-hot
Earlier this month, Commerce Secretary Wilbur Ross said an agreement had been reached with ZTE: In exchange for allowing the company to trade with America again, ZTE would pay a $1 billion fine, replace its management, and allow U.S. officials to conduct oversight of its operations.
This is where things get interesting.
Reaction to the deal from politicians on both sides of the aisle was angry and immediate. And it was the Senate, normally a staid and sober institution, that reacted the most forcefully: Sens. Chris Van Hollen (D-Md.) and Tom Cotton (R-Ark.), along with Senate Minority Leader Chuck Schumer (D-N.Y.), got an amendment added to the National Defense Authorization Act (NDAA) that would scuttle Commerce's deal and resurrect the ban on doing business with ZTE. It would require Trump to certify that ZTE is in compliance for a full year before lifting the bans. Cotton's involvement is especially noteworthy since he's been a long-time Trump ally. The senators also have support from other conservative stalwarts, like Sen. Marco Rubio (R-Fla.) and Sen. John Cornyn (R-Texas), the Republicans' second-in-command in the chamber.
In fact, they went further. The amendment not only went after ZTE, it also banned the U.S. government from doing any business with or giving loans to an even bigger Chinese telecommunications firm called Huawei. The latter is the world's third-largest supplier of smartphones, it brought in over $90 billion in 2017, and it employs 180,000 people. For years, suspicions have swirled that heavy American reliance on Huawei's products could allow the Chinese to spy on U.S. communications. The government hasn't nailed down evidence of misbehavior by the company the same way it has with ZTE, but previous reports at least raised concerns from industry experts and former Huawei employees that it's falling afoul of various U.S. laws.
The Senate passed the NDAA with the amendment Monday night.
Of course, support for the amendment is not universal in the Senate or the House, so it's conceivable the language could get watered down or eliminated in conference before it reaches Trump's desk. But the NDAA bill is considered must-pass legislation, which shows how serious the senators are about cracking down on both ZTE and Huawei: Should the amendment turn into a sticking point, or if the White House threatens to veto the NDAA over the amendment, the controversy would force a massive funding bill for U.S. defense back to the drawing board. "I talked to my colleagues on the Intelligence Committee and they are pretty dug in on this," said Sen. Bob Corker (R-Tenn.).
Ross went to Congress to lobby against the amendment. But it's unclear if the White House would actually go to the mat and threaten a veto over it. "I don't think the president cares about ZTE. Someone told me that he gave them a wink and a nod and told them he didn't care," Corker added. "I think [Trump] did what he did for the Chinese leader but doesn't really care what Congress does."
Nationalism has always played a big role in Republican politics. But cutting taxes and regulations for corporations is equally, if not more, important. The GOP has generally shied away from expressing nationalism through aggressive U.S. trade policies, and has instead focused on national security issues. That's certainly where the Republican senators amassed against ZTE and Huawei are coming from.
Trump, on the other hand, has been happy to deploy economic policy in defense of nationalism as well. Indeed, to the extent he's used laws meant for national security to slap tariffs on China and other countries, it's been a rather obvious pretext for starting trade fights in the name of jobs. But he also wants to be seen as America's dealmaker-in-chief, so if he ultimately forces other countries to the bargaining table — as seemed to happen with China on ZTE, initially — he's fine with that too.
All of which is how we've arrived at the odd impasse of the normally laissez-faire Senate trying to pick a trade fight with China, while the Trump administration pushes for comity and the cessation of hostilities.
AAI Issues Part II in New White Paper Series on Competition in the Delivery and Payment of Healthcare Services — Experts Tim Greaney And Barak Richman Discuss Promoting Competition in Healthcare Enforcement And Policy: Framing an Active Competition Agenda
Jun 18 2018
Health and Pharma
Today, the AAI released the second part of its new White Paper series on Competition in the Delivery and Payment of Healthcare Services. Part II of this important and comprehensive analysis addresses “Promoting Competition in Healthcare Enforcement and Policy: Framing an Active Competition Agenda. The White Papers are co-authored by two of AAI's Advisory Board competition experts: Thomas Greaney, Visiting Professor at the University of California Hastings College of Law and Chester A. Myers Professor Emeritus at Saint Louis University School of Law; and Barak Richman, the Edgar P. & Elizabeth C. Bartlett Professor of Law and Business Administration at Duke University.
The policy community, albeit belatedly, now fully recognizes the economic dangers of highly concentrated healthcare markets. The Federal Trade Commission (FTC) and states continue to closely scrutinize hospital mergers. Recent successes by the U.S. Department of Justice (DOJ) in challenging mergers of health insurers are additional indications of invigorated enforcement in the healthcare payment sector. In addition, the FTC, DOJ, and State Attorneys General (AGs) have appropriately dedicated substantial resources to healthcare antitrust enforcement and have achieved significant victories in litigation.
Traditional merger review, however, will be inadequate to compensate for the policy failures of the past. In large part because failed antitrust interventions, overwhelmed enforcers, or mistaken beliefs that market dynamics or negotiated settlements will preserve market competition, both provider and insurer markets across the country are highly concentrated, and dominant providers currently enjoy enormous pricing power. To create the market dynamics that consumers desire, policymakers will need to pursue proactive approaches in healthcare markets that confront extant market power and aim to limit its damage. It will also require exploring innovative paths to stimulate lost or impeded competition. Over the past several years, the FTC has enhanced its advisory and advocacy efforts on healthcare competition issues in numerous forums, and its leadership will need to continue exploring its influence outside its traditional purview.
Antitrust policy, like many other policy areas, will have to be farsighted and proactive to maintain and enhance sorely needed competition in healthcare markets. While traditional antitrust measures can prevent the agglomeration of additional harmful market power, less traditional and more creative policies are necessary to police the harmful market power many healthcare entities have already amassed. Federal and state entities should therefore pursue an active competition agenda by deploying sufficient resources to both prevent the consummation of additional anticompetitive consolidation that enhances or entrenches monopoly power and to pursue multipronged policies to facilitate efficient, competitive markets in healthcare markets. These issues are complicated by the healthcare sector’s long history of state and federal regulatory interventions that impede rivalry, discourage entry and innovation, and advance professional and corporate interests over those of consumers, but they also present multiple opportunities to correct problematic policies and inject competition into previously insulated markets.
In addition, responsibilities and opportunities to promote pro-competition policies must stretch beyond traditional antitrust enforcers, as regulators across government have the capacity to promote competition in healthcare markets. Close attention to regulatory interventions is also important because the distinction between public and private healthcare is vanishing. Government-financed health services, including Medicare and Medicaid, are increasingly relying on privately managed care to provide services. Without robustly competitive markets, these changes will not achieve the goals of controlling costs and improving quality. Likewise, proposals to replace Medicare’s guaranteed benefits with premium support payments, block grant Medicaid, or force downward budgetary pressures on national healthcare spending are also highly dependent on competition between providers and between insurers.
Part I of the AAI White Paper series Competition in the Delivery and Payment of Healthcare Services provided an in-depth examination of the competition concerns and priorities in provider and insurer consolidation—both horizontal and vertical--that is sweeping the industry. Part II of the AAI White Paper Series advances the discussion to identify and define the policy responses needed to address extant market power and prospective issues raised by consolidated markets. These issues include employing antitrust and other measures to stem monopolistic provider practices, encouraging federal agencies to advocate in correcting anticompetitive state policies, and seeking alternative strategies to promote competition in healthcare provider and payer markets. We emphasize a growing need for advocacy in state policymaking, payment reform, and transparency, including issues such as scrutiny of state medical boards, state efforts to improve price and quality transparency, and encouraging precompetitive policies at the Center for Medicare & Medicaid Services (CMS). The final section concludes with policy recommendations.
America has chosen, wisely we think, to rely on competition to spur innovation, assure quality of care, and control costs in the healthcare sector. Where markets have been allowed to function under competitive conditions—free of anticompetitive regulations, cartels, and monopolies—competition has done its job. Much of the revolutionary change occurring today is designed to improve the function of healthcare markets and deal with problems of market failure and excessive regulation. In many areas however, problems persist. Many markets remain controlled by monopolies, constrained by outdated regulation, and foreclosed to new entrants and ideas from anticompetitive strategies from incumbents. We therefore believe the role of the federal antitrust agencies in making healthcare policy is a vital one, and they should be given the fullest support by Congress, the Executive branch and the States. In light of these observations, we offer a number of takeaways from the analysis that would help frame an active competition policy agenda that complements vigorous antitrust enforcement in healthcare. These include:
- Traditional antitrust measures can prevent the agglomeration of additional harmful market power. However, less traditional and more creative, farsighted, and proactive policies are necessary to police the harmful market power many healthcare entities have already amassed.
- COPA proceedings are unlikely to ascertain when consolidations will generate benefits that outweigh costs to competition. Given the weighty evidence that provider consolidations impose significant economic harm, COPA’s frequently amount to evasions of needed FTC scrutiny.
- To mitigate the anticompetitive consequences of bundling monopolized and unmonopolized hospital services, antitrust enforcers ought to require hospitals and other provider entities to unbundle, at a purchaser’s request, certain services so that the purchaser can negotiate prices. This offers a promising, proactive remedial approach to hospital mergers and would restore some lost competition from excessive consolidation.
- Contractual terms between providers and insurers such as MFNs and anti-steering provisions entrenches dominant providers and insurers, limiting competition and benefits to consumers. Antitrust rules can prohibit the use of such anticompetitive contractual terms and insurance regulators can bar such provisions wherever they threaten to preclude effective price competition.
- States should examine reducing barriers that prevent entry by upstart providers, from overly restrictive rules regarding facility licensure and CON. New outpatient surgery centers, retail clinics and urgent care facilities, and physicians are well positioned to offer alternatives to the traditional inpatient acute care facility.
- Insurance exchanges set up under the ACA offer a platform for effective price and quality comparisons across insurance products and are an important tool for combatting concentration in health insurance markets. While regulatory supervision is necessary in the health insurance markets, excessive regulation could undermine the viability of state insurance markets. The FTC and DOJ should monitor the development of these exchanges, help the states fine tune regulation, and encourage the promotion of pro-competitive regulatory strategies.
- The FTC and DOJ should invest in monitoring and advising state regulators regarding potential harms to competition arising from state regulations and policies. This includes advocating for liberalizing state licensure and scope-of-practice limitations. Where repeal is not feasible, states should consider clarifying standards for, and explicitly require consideration of the competitive impact of, CON determinations.
- State licensing boards dominated by market participants are prone to produce anticompetitive regulations. The FTC should take a proactive role in helping states craft regimes in which medical boards do not have inappropriate leeway without active state supervision. And because many states and Congress are considering how best to revise existing regulatory regimes, the FTC should monitor and guide how policymakers implement mechanisms to actively supervise their professional boards.
- The FTC and DOJ should monitor and support public and private initiatives to establish APCDs and similar databases that compile and disseminate healthcare quality and price data. Greater transparency in healthcare markets can enhance competition and expand informed consumer choice.
- Federal healthcare program regulation has a profound impact on competition. As such, we suggest that the Administration inaugurate an interagency health competition task force to advise CMS on policies that affect the competitiveness of provider and payer markets. The FTC and DOJ should use this task force and other opportunities to advocate and support policies affecting payment, conditions of participation, and quality measures for providers that promote entry and cost-effective delivery of care.
From The Nation: "The AT&T-Time Warner Merger Ruling Is Bad for the Country"
An excerpt from the Nation article by David Dayen follows the editorial comment.
Editorial comment (DAR): Dayen is an advocate of what is sometimes called "big is bad" antitrust. He complains that the Justice Department needed to make its case in the AT&T-Time Warner litigation while bound in the "straitjacket" of the traditional "consumer welfare" litigation standard: "Derived during the Reagan administration and now infecting virtually the entire judiciary, the consumer welfare standard puts antitrust law in the province of economists and models and dueling sets of numbers, when common sense clearly demonstrates the dangers of concentration." Dayen holds the consumer welfare litigation approach to blame for the government's reliance on economic witness Carl Shapiro's economic model unpersuasively showing consumer harm from the AT&T-Time Warner merger of less than a dollar a month for the average customer.
I personally have no problem with advocates like David Dayen who argue that "big is bad." On the contrary, I applaud advocates who reach out to the broad public to point out the economic and political problems caused by particular large companies. I would like advocates of "big is bad" thinking to get along well with courtroom advocates like the Justice Department Antitrust Division lawyers, who should be applauded for taking the AT&T-Time Warner merger to court. The DOJ lawyers certainly knew that they were fighting an uphill battle, and that it would be difficult to present facts that would persuade Judge Leon to depart from a judicial tradition of skepticism toward vertical merger challenges. USDOJ leaders showed great determination is pressing forward with a difficult but important case.
Is there a way to bridge the gap between David Dayen's advocacy of "common sense" and the antitrust law's current reliance on the consumer welfare standard in litigation? That gap could be narrowed somewhat by expanding the consumer welfare standard, or perhaps by using different litigation standards. But in American jurisprudence the tradition is that the standards for antitrust prosecution, somewhat like standards in ordinary criminal prosecutions, need to be reasonably precise and understandable to the potential targets of the prosecution. The requirements for litigation standards that will work well in the courtroom can be rigorous, but we can hope for constructive dialog between "big is bad" advocates and courtroom litigators on how standards for antitrust prosecutions can evolve.
Don Allen Resnikoff
- The Dayen article excerpt:
It’s hard to over-emphasize the impact of this ruling. First, the deal itself brings together one of America’s largest telecom and cable companies with a suite of valuable programming to distribute on those networks. HBO, TNT, CNN, Cartoon Network, Warner Brothers Studios, a stake in Hulu and much more will now be held by the owners of DirecTV, U-verse, AT&T mobile and broadband, Cricket wireless, and more. AT&T has already started bundling HBO for free for wireless users; the entire idea is to leverage things people want to watch by forcing them to watch it on AT&T services.
The Justice Department argued this would allow AT&T to raise the cost of Time Warner programming, whether for rival cable companies, online pay-TV services, or consumers. The trial mostly didn’t address other concerns, like narrowing the channels for artists to get their work out, concentrating the power to distribute news and information in too few self-interested hands, or stunting innovation by creating a barrier to competition. That’s because modern antitrust jurisprudence operates under the consumer welfare standard, a constrained method that only looks at costs to consumers to determine whether a merger should be granted.
In other words, the Justice Department needed to make its case while bound in a straitjacket. Derived during the Reagan administration and now infecting virtually the entire judiciary, the consumer welfare standard puts antitrust law in the province of economists and models and dueling sets of numbers, when common sense clearly demonstrates the dangers of concentration. UC Berkeley economics professor and Obama administration veteran Carl Shapiro put together a model for the government to prove consumer harm; it ended up showing less than a dollar a month for the average customer, and AT&T’s attorneys poked numerous holes in it (predictably so, as it was an inherently complex rendering of an uncertain future).
But we know that monopoly is the entire point of this merger. During the trial, the Justice Department revealed an internal document where an executive from Turner Broadcasting, now part of AT&T, stated outright that “Time Warner would be a weapon for AT&T because AT&T’s competitors need Time Warner programming.” But instead of recognizing that this desire to screw rivals obviously may “substantially lessen competition,” as the antitrust statute states, judges require economists to act as wizards and predict precise percentages of the market and markups in price.
So the courts can overlook very clear statements from executives running these companies that they need this merger to secure market power. The desire to monopolize is crystal clear, but as long as you can spin a theoretical model showing a pretense of consumer benefits, then market power is no hurdle.
***
Comcast will announce a bidding war for coveted Fox TV and movie assets, already pledged to Disney, as early as Wednesday. That’s just the first domino in a likely rush to close deals. Amazon could buy a movie studio like Lion’s Gate. Apple, Facebook and Google are dipping into producing video and can acquire more assets for that endeavor. Sprint has already announced a deal with T-Mobile, which has a partnership with Netflix. Sinclair Broadcasting, with an assist from the FCC, is morphing into an indomitable giant at the local news level. Verizon, the other big distribution network, waits in the wings. The media business is already deeply consolidated, and this merger will ramp that up.
The entire point of these mergers—indeed, a stated goal of AT&T’s deal—is to compete with the tech platforms in a war for your attention, enabling the sale of targeted ads using your personal data. Time Warner wants more of your information so they can keep your eyeballs glued to your screen as they serve up more ads. This is nothing less than a surveillance tax on every man, woman, and child: an endless sea of using your every waking thought to bombard you with corporate pitches. Targeted advertising serves no useful purpose, facilitates monopoly and magnifies the potential for abuse of consumers and our democracy. It ought to be banned; instead it will further entrench itself.
The ruling will also give a green light for more vertical deals—those between companies that don’t technically compete with one another. That was never actually true in this case; HBO had a distribution network for its programming that will now almost certainly be folded into AT&T’s offerings. But modern antitrust law has taken a hands-off approach to vertical mergers, despite the ability to use leverage in one market to stifle competition further down the supply chain (like using Time Warner content as a weapon against AT&T’s rival distributors, you know, like Time Warner executives said explicitly that AT&T would do). Judge Leon so thoroughly smacked down the government in this case, that vertical deals will likely be too hot to handle for a few years.
The full article is at https://www.thenation.com/article/att-time-warner-merger-ruling-bad-country/
AT&T, Time Warner, and the Future of Health Care
June 21, 2018
David Blumenthal, M.D.
The recent federal district court ruling allowing the merger of AT&T and Time Warner — a case of so-called vertical integration — will likely encourage similar unions throughout the U.S. economy, including in health care. Nevertheless, a close look at the court’s decision, and at the wide variety of vertical health care mergers under way, suggests that policymakers and private actors should not interpret the court’s ruling as an unconditional green light for vertical integration in health care, or any other sector.
***
Some antitrust experts question whether the analogy between manufactured products and health care delivery is accurate. Independent physicians, for example, often work within hospitals and help to produce their “products.” Nevertheless, there are clear differences between mergers across the same types of health care organizations, like hospitals, and those between different types of providers, like physicians and hospitals.
***
Evidence on the effects of horizontal health care mergers has grown considerably in recent years, and generally shows that they increase prices. But studies of vertical health care mergers are much less common. Perhaps the most relevant experience concerns long-standing integrated health systems, such as Kaiser Permanente, Intermountain, Geisinger, and a handful of similar organizations.
Full article: https://www.commonwealthfund.org/blog/2018/att-time-warner-and-future-health-care?omnicid=EALERT%25%25jobid%25%25&mid=%25%25emailaddr%25%25
FTC Announces Hearings On Competition and Consumer Protection in the 21st Century
The Federal Trade Commission announced that the agency will hold a series of public hearings on whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy. The multi-day, multi-part hearings, which will take place this fall and winter, will be similar in form and structure to the FTC’s 1995 “Global Competition and Innovation Hearings” under the leadership of then-Chairman Robert Pitofsky.
“The FTC has always been committed to self-examination and critical thinking, to ensure that our enforcement and policy efforts keep pace with changes in the economy,” FTC Chairman Joe Simons commented today. “When the FTC periodically engages in serious reflection and evaluation, we are better able to promote competition and innovation, protect consumers, and shape the law, so that free markets continue to thrive.”
The hearings and public comment process will provide opportunities for FTC staff and leadership to listen to interested persons and outside experts representing a broad and diverse range of viewpoints. Additionally, the hearings will stimulate thoughtful internal and external evaluation of the FTC’s near- and long-term law enforcement and policy agenda. The hearings may identify areas for enforcement and policy guidance, including improvements to the agency’s investigation and law enforcement processes, as well as areas that warrant additional study.
In advance of these hearings, public comments on any of the following topics may be submitted to the FTC:
The Commission will invite public comment in stages throughout the term of the hearings.
Public comments may address one or more of the above topics generally, or may address them with respect to a specific industry, such as the health care, high-tech, or energy industries. Any additional topics for comment will be identified in later notices.
The hearings will begin in September 2018 and are expected to continue through January 2019, and will consist of 15 to 20 public sessions. All hearings will be webcast, transcribed, and placed on the public record. A dedicated website for information about the hearings including the schedule as it evolves can be found at www.ftc.gov/ftc-hearings.
Public Comments: Interested parties are invited to submit written comments on the topics listed above to the FTC, either electronically at www.ftc.gov/ftc-hearings or in paper form. FTC staff may use these comments in any subsequent reports or policy papers. Comments should refer to “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201.” If an interested party wishes to comment on multiple topics, we encourage filing a separate comment for each topic. If an interested party wishes to make general comments about the hearings, we encourage filing a comment in response to Topic 1. For this stage of the public comment process, comments will be accepted until August 20, 2018.
If you prefer to file a comment in hard copy, write ‘‘Competition and Consumer Protection in the 21st Century Hearing, Project Number P181201,” on your comment and on the envelope and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex C), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex C), Washington, DC 20024.
The FTC Act and other laws that the Commission administers permit the collection of public comments. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, available at ftc.gov/site-information/privacy-policy.
For Further Information Contact: Derek Moore, Office of Policy Planning, 202-326-3367, John Dubiansky, Office of Policy Planning, 202-326-2182 or email us at [email protected] (link sends e-mail).
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook (link is external), follow us on Twitter (link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.
Contact InformationFTC Media Contact
Peter Kaplan (link sends e-mail)
Office of Public Affairs
202-326-2334
- For Release June 20, 2018
The Federal Trade Commission announced that the agency will hold a series of public hearings on whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy. The multi-day, multi-part hearings, which will take place this fall and winter, will be similar in form and structure to the FTC’s 1995 “Global Competition and Innovation Hearings” under the leadership of then-Chairman Robert Pitofsky.
“The FTC has always been committed to self-examination and critical thinking, to ensure that our enforcement and policy efforts keep pace with changes in the economy,” FTC Chairman Joe Simons commented today. “When the FTC periodically engages in serious reflection and evaluation, we are better able to promote competition and innovation, protect consumers, and shape the law, so that free markets continue to thrive.”
The hearings and public comment process will provide opportunities for FTC staff and leadership to listen to interested persons and outside experts representing a broad and diverse range of viewpoints. Additionally, the hearings will stimulate thoughtful internal and external evaluation of the FTC’s near- and long-term law enforcement and policy agenda. The hearings may identify areas for enforcement and policy guidance, including improvements to the agency’s investigation and law enforcement processes, as well as areas that warrant additional study.
In advance of these hearings, public comments on any of the following topics may be submitted to the FTC:
- The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings;
- Competition and consumer protection issues in communication, information, and media technology networks;
- The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses;
- The intersection between privacy, big data, and competition;
- The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters;
- Evaluating the competitive effects of corporate acquisitions and mergers;
- Evidence and analysis of monopsony power, including but not limited to, in labor markets;
- The role of intellectual property and competition policy in promoting innovation;
- The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics;
- The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices; and
- The agency’s investigation, enforcement, and remedial processes.
The Commission will invite public comment in stages throughout the term of the hearings.
- Through August 20, 2018, the Commission will accept public comment on the topics identified in the announcement. Each topic description includes issues of particular interest to the Commission, but comments need not be restricted to these subjects.
- Additionally, the Commission will invite comments on the topic of each hearing session. The FTC will issue a news release before each session to inform the public of the agenda, the date and location, and instructions on submitting comment.
- The Commission will also invite public comment upon completion of the entire series of hearings.
Public comments may address one or more of the above topics generally, or may address them with respect to a specific industry, such as the health care, high-tech, or energy industries. Any additional topics for comment will be identified in later notices.
The hearings will begin in September 2018 and are expected to continue through January 2019, and will consist of 15 to 20 public sessions. All hearings will be webcast, transcribed, and placed on the public record. A dedicated website for information about the hearings including the schedule as it evolves can be found at www.ftc.gov/ftc-hearings.
Public Comments: Interested parties are invited to submit written comments on the topics listed above to the FTC, either electronically at www.ftc.gov/ftc-hearings or in paper form. FTC staff may use these comments in any subsequent reports or policy papers. Comments should refer to “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201.” If an interested party wishes to comment on multiple topics, we encourage filing a separate comment for each topic. If an interested party wishes to make general comments about the hearings, we encourage filing a comment in response to Topic 1. For this stage of the public comment process, comments will be accepted until August 20, 2018.
If you prefer to file a comment in hard copy, write ‘‘Competition and Consumer Protection in the 21st Century Hearing, Project Number P181201,” on your comment and on the envelope and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex C), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex C), Washington, DC 20024.
The FTC Act and other laws that the Commission administers permit the collection of public comments. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, available at ftc.gov/site-information/privacy-policy.
For Further Information Contact: Derek Moore, Office of Policy Planning, 202-326-3367, John Dubiansky, Office of Policy Planning, 202-326-2182 or email us at [email protected] (link sends e-mail).
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook (link is external), follow us on Twitter (link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.
Contact InformationFTC Media Contact
Peter Kaplan (link sends e-mail)
Office of Public Affairs
202-326-2334
From NYT: Koch brothers affiliated group, Americans for Prosperity, focuses on local issues, opposes mass transit
Excerpt:
Last year Americans for Prosperity spent $711,000 on lobbying for various issues, a near 1,000-fold increase since 2011, when it spent $856. Overall, the group has spent almost $4 million on state-level lobbying the past seven years, according to disclosures compiled by the National Institute on Money in State Politics, a nonpartisan nonprofit that tracks political spending.
Broadly speaking, Americans for Prosperity campaigns against big government, but many of its initiatives target public transit. In Indiana, it marshaled opposition to a 2017 Republican gas-tax plan meant to raise roughly a billion dollars to invest in local buses and other projects. In New Jersey, the group ran an ad against a proposed gas-tax increase in 2016 that showed a father giving away his baby’s milk bottle, and also Sparky the family dog, to pay for transit improvements among other things. “Save Sparky,” the ad implores.
In Nashville, Americans for Prosperity played a major role: organizing door-to-door canvassing teams using iPads running the i360 software. Those in-kind contributions can be difficult to measure. According to A.F.P.’s campaign finance disclosure, the group made only one contribution, of $4,744, to the campaign for “canvassing expenses.”
Instead, a local group, NoTax4Tracks, led the Nashville fund-raising. Nearly three-quarters of the $1.1 million it raised came from a single nonprofit, Nashville Smart Inc., which is not required to disclose donors. The rest of the contributions to NoTax4Tracks came from wealthy local donors, including a local auto dealer.
Both NoTax4Tracks and Nashville Smart declined to fully disclose their funding.
Note: In Nashville, the anti-transit campaign succeeded -- voters failed to approve the City's mass transit plan
https://www.nytimes.com/2018/06/19/climate/koch-brothers-public-transit.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
Here is a blog post from a Koch bothers ally attacking the concept of mass transit for most urban areas:
https://www.cato.org/blog/nine-reasons-few-americans-use-transit
Excerpt:
Last year Americans for Prosperity spent $711,000 on lobbying for various issues, a near 1,000-fold increase since 2011, when it spent $856. Overall, the group has spent almost $4 million on state-level lobbying the past seven years, according to disclosures compiled by the National Institute on Money in State Politics, a nonpartisan nonprofit that tracks political spending.
Broadly speaking, Americans for Prosperity campaigns against big government, but many of its initiatives target public transit. In Indiana, it marshaled opposition to a 2017 Republican gas-tax plan meant to raise roughly a billion dollars to invest in local buses and other projects. In New Jersey, the group ran an ad against a proposed gas-tax increase in 2016 that showed a father giving away his baby’s milk bottle, and also Sparky the family dog, to pay for transit improvements among other things. “Save Sparky,” the ad implores.
In Nashville, Americans for Prosperity played a major role: organizing door-to-door canvassing teams using iPads running the i360 software. Those in-kind contributions can be difficult to measure. According to A.F.P.’s campaign finance disclosure, the group made only one contribution, of $4,744, to the campaign for “canvassing expenses.”
Instead, a local group, NoTax4Tracks, led the Nashville fund-raising. Nearly three-quarters of the $1.1 million it raised came from a single nonprofit, Nashville Smart Inc., which is not required to disclose donors. The rest of the contributions to NoTax4Tracks came from wealthy local donors, including a local auto dealer.
Both NoTax4Tracks and Nashville Smart declined to fully disclose their funding.
Note: In Nashville, the anti-transit campaign succeeded -- voters failed to approve the City's mass transit plan
https://www.nytimes.com/2018/06/19/climate/koch-brothers-public-transit.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
Here is a blog post from a Koch bothers ally attacking the concept of mass transit for most urban areas:
https://www.cato.org/blog/nine-reasons-few-americans-use-transit
Local DC area mass transit advocacy group launches Purple Line Newsletter
The Koch brothers may be supporting local advocacy against mass transit, but in the DC area there is an advocacy group that supports mass transit, particularly the new Purple line. The Purple Line NOW group has launched a newsletter. Their announcement follows. DAR
Welcome to the Debut of the Purple Line NOW Bi-weekly Newsletter!
We’re fast approaching the 1-year anniversary of the groundbreaking of the Purple Line and you may have noticed that construction activity is beginning to pick up across the corridor. The first year of construction has largely consisted of preparatory work such as tree clearing, utility relocation, staging areas, and demolition, but you’ll begin to see more visible signs of progress and changes to the built environment starting this month.
For that reason, we’ve decided to launch a new bi-weekly newsletter to keep the community up-to-date on the latest construction news and how it will impact getting around town, as well as important events, and general Purple Line information. Going forward, you can expect a new edition of this newsletter in your inbox every other Wednesday, provided, of course, that there is news to report.
See the full announcement at http://www.purplelinenow.com/
Here is language from the site's "Who we are" section:
Who We ArePurple Line NOW! is a coalition of business, labor, environment, neighborhood, and civic organizations that works with local, state, and federal government officials in pursuit of our mission to build the Purple Line.
"Our mission is ensure the completion of the light rail purple line from Bethesda to New Carrollton, integrated with a hiker/biker trail between Bethesda & Silver Spring."
Our Vision: The Purple Line will energize Maryland suburbs of the national capital region by integrating transportation systems including existing Metro and MARC lines and improved bycycle and pedestrian connections.
Our Board: PLN is governed by a Board of Directors with balanced representation from the environmental, civic, business and labor support for the Purple Line. The strength of our organization is in its diversity and we continue to work to expand our base of support. PLN Executive Director Christine Scott works at the direction of the Board to assist in coordinating the PLN advocacy efforts. Ms. Scott can be contacted at [email protected].
The Koch brothers may be supporting local advocacy against mass transit, but in the DC area there is an advocacy group that supports mass transit, particularly the new Purple line. The Purple Line NOW group has launched a newsletter. Their announcement follows. DAR
Welcome to the Debut of the Purple Line NOW Bi-weekly Newsletter!
We’re fast approaching the 1-year anniversary of the groundbreaking of the Purple Line and you may have noticed that construction activity is beginning to pick up across the corridor. The first year of construction has largely consisted of preparatory work such as tree clearing, utility relocation, staging areas, and demolition, but you’ll begin to see more visible signs of progress and changes to the built environment starting this month.
For that reason, we’ve decided to launch a new bi-weekly newsletter to keep the community up-to-date on the latest construction news and how it will impact getting around town, as well as important events, and general Purple Line information. Going forward, you can expect a new edition of this newsletter in your inbox every other Wednesday, provided, of course, that there is news to report.
See the full announcement at http://www.purplelinenow.com/
Here is language from the site's "Who we are" section:
Who We ArePurple Line NOW! is a coalition of business, labor, environment, neighborhood, and civic organizations that works with local, state, and federal government officials in pursuit of our mission to build the Purple Line.
"Our mission is ensure the completion of the light rail purple line from Bethesda to New Carrollton, integrated with a hiker/biker trail between Bethesda & Silver Spring."
Our Vision: The Purple Line will energize Maryland suburbs of the national capital region by integrating transportation systems including existing Metro and MARC lines and improved bycycle and pedestrian connections.
Our Board: PLN is governed by a Board of Directors with balanced representation from the environmental, civic, business and labor support for the Purple Line. The strength of our organization is in its diversity and we continue to work to expand our base of support. PLN Executive Director Christine Scott works at the direction of the Board to assist in coordinating the PLN advocacy efforts. Ms. Scott can be contacted at [email protected].
From CBS News: Lobbyists pay for access to state attorneys general at fancy resorts
A CBS video reports that State attorneys general, are playing an increasingly bigger role – and lobbyists are noticing. CBS News got an inside look at one lavish retreat at Kiawah Island, South Carolina, where businesses and trade groups paid for access. Some of the companies are under investigation by state attorneys general, but still give large donations so they can get one-on-one access to AGs to state their case.
The video is here:
https://www.msn.com/en-us/video/n/inside-a-lavish-retreat-where-lobbyists-pay-for-access-to-state-attorneys-general/vp-AAyQKhA
A CBS video reports that State attorneys general, are playing an increasingly bigger role – and lobbyists are noticing. CBS News got an inside look at one lavish retreat at Kiawah Island, South Carolina, where businesses and trade groups paid for access. Some of the companies are under investigation by state attorneys general, but still give large donations so they can get one-on-one access to AGs to state their case.
The video is here:
https://www.msn.com/en-us/video/n/inside-a-lavish-retreat-where-lobbyists-pay-for-access-to-state-attorneys-general/vp-AAyQKhA
DC proposition 77 and the tipped minimum wage issue
My wife and I recently joined friends at an upscale DC restaurant with lots of style, high prices, and weak fast-food quality menu offerings, where we chatted with the waitress about proposition 77. That is the proposal on the DC ballot that would change the current system where tips go to the wait staff, and the minimum wage for tipped wait staff is lower than for non-tipped workers. The waitress feels strongly about preserving the current tipping arrangement, and recommended that we consult Washington City Paper to learn more. DAR
Here is an excerpt from Washingtion City Paper:
On June 19, D.C. voters will decide whether the city should eliminate its two-tiered wage system. Tipped employees currently earn $3.33 an hour compared to the standard minimum wage of $12.50. All but seven states in the U.S. have this so-called “tip credit” that restaurateurs rely on to staff a robust team of employees and tame prices for customers.
Even with this tip credit, all workers in D.C. are entitled to the standard minimum wage. If a worker fails to reach $12.50 per hour with their base wage plus tips, the employer is required to make up the difference.
If 77 passes, the tipped minimum wage will go up eight increments until it equals the standard minimum wage in 2026. The standard minimum wage will reach $15 in 2020. Increases after that would be tied to inflation. If 77 doesn’t pass, the tipped minimum wage will still increase to $3.89 in July, $4.45 in 2019, and $5 in 2020.
Diners may have noticed servers and bartenders sporting “Save Our Tips” buttons that ask D.C. residents to vote no on 77. The initiative committee by the same name is one of several being bankrolled by industry leaders, operators, employees, and trade associations. National groups like Restaurant Workers of America (RWA) have also joined the local fight against 77.
Restaurant Opportunities Center United (ROC) is the national nonprofit that’s bringing 77 to the table. They advocate for workers rights and the elimination of the tip credit in favor of “One Fair Wage.” ROC tried and failed to do away with the tip credit when the D.C. Council approved increasing the standard minimum wage to $15 in June 2016, but after jumping a few more hurdles, including gathering enough signatures from voters, ROC succeeded in getting 77 on the ballot two years later. Now this monumental decision is in the hands of the voters, and early local and national polling suggests D.C. residents will vote yes on 77.
Full article at https://www.washingtoncitypaper.com/food/young-hungry/article/21004275/fear-mounts-in-restaurant-industry-as-dc-prepares-to-vote-on-the-tipped-minimum-wage
Court filing from lawsuit charging Harvard with systematically discriminating against Asian-Americans
See https://int.nyt.com/data/documenthelper/43-sffa-memo-for-summary-judgement/1a7a4880cb6a662b3b51/optimized/full.pdf#page=1
The suit says that Harvard imposes what is in effect a soft quota of “racial balancing.” This keeps the numbers of Asian-Americans artificially low, while advancing less qualified white, black and Hispanic applicants, the plaintiffs contend.
Tim Wu's Brandeisian "big is bad" antitrust v. "Chicago School" limited antitrust
Responding to Judge Lean's decision in the AT&T/Time Warner merger matter, Tim Wu writes:
Judge Leon’s decision shows just how far the law has wandered from congressional intent. The law has become a license for near-uncontrolled consolidation and concentration in almost every sector of economy. Whether involving airlines, hospitals, the pharmaceutical industry, cable television or the major tech platforms, mergers leading to oligopolies or monopolies have become commonplace.
Reading Judge Leon’s opinion makes it clear how this has happened. The decision barely touches on Congress’s concerns about excessive concentration of economic power or other guiding principles or values. Instead, the opinion is mostly a tedious dissection of whether customers might end up paying an extra 45 cents per month for pay-TV service.
***
The public cares about the aggregation of wealth in the top echelons, the suppression of wages and the shrinking of the middle class, all of which are linked to industry concentration. That’s why Congress, in the wake of repeated affirmations that the anti-merger laws no longer work, needs to act. It should reassert that Congress in 1950 really did intend to preserve a competitive economy — one that is free, if possible, from what the Supreme Court Justice Louis Brandeis once called the “curse of bigness.”
[NYT URL: https://www.nytimes.com/2018/06/14/opinion/time-warner-att-merger.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region]
Judge Leon's opinion has been widely criticized (another accessible critique is at https://www.washingtonpost.com/amphtml/news/wonk/wp/2018/06/15/how-judge-leon-blew-it-with-u-s-v-att/), but it seems fair to say that Judge Leon's opinion reflects a decades old judicial tradition that treats "vertical" mergers -- joining companies at different levels of distribution -- as unlikely to be an antitrust problem.
There is obviously a clash between the judicial tradition that is permissive to vertical mergers and the Brandeisian view urged by Tim Wu. Because of that clash, Tim Wu suggests that reconciliation requires Congressional action.
But it seems unlikely that a Congress that doesn't do much will take up Tim Wu's action proposal any time soon.
In the meanwhile, there are issues to wrestle with for lawyers and economists who earn their living as courtroom antitrust advocates. First, should courtroom advocates join Tim Wu in in supporting broad legal restraints against "aggregation of wealth in the top echelons." Many do not. To the extent that courtroom advocates agree with Tim Wu, they would need to deal with his observation that the courts generally get vertical cases wrong. To Tim Wu, getting it wrong may mean rejecting broad legal restraints against corporate behemoths. Court precedent broadly approving vertical mergers reduces the leeway for advocates successfully arguing against vertical mergers in court.
Can Tim Wu's "big is bad" thinking ever be reconciled with courtroom legal precedent in vertical cases, without recourse to Congress? Maybe yes, to some extent, if antitrust advocates can argue within the leeway allowed by legal precedent for judicially manageable legal standards that are less permissive toward vertical mergers.
--Don Allen Resnikoff
Responding to Judge Lean's decision in the AT&T/Time Warner merger matter, Tim Wu writes:
Judge Leon’s decision shows just how far the law has wandered from congressional intent. The law has become a license for near-uncontrolled consolidation and concentration in almost every sector of economy. Whether involving airlines, hospitals, the pharmaceutical industry, cable television or the major tech platforms, mergers leading to oligopolies or monopolies have become commonplace.
Reading Judge Leon’s opinion makes it clear how this has happened. The decision barely touches on Congress’s concerns about excessive concentration of economic power or other guiding principles or values. Instead, the opinion is mostly a tedious dissection of whether customers might end up paying an extra 45 cents per month for pay-TV service.
***
The public cares about the aggregation of wealth in the top echelons, the suppression of wages and the shrinking of the middle class, all of which are linked to industry concentration. That’s why Congress, in the wake of repeated affirmations that the anti-merger laws no longer work, needs to act. It should reassert that Congress in 1950 really did intend to preserve a competitive economy — one that is free, if possible, from what the Supreme Court Justice Louis Brandeis once called the “curse of bigness.”
[NYT URL: https://www.nytimes.com/2018/06/14/opinion/time-warner-att-merger.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region]
Judge Leon's opinion has been widely criticized (another accessible critique is at https://www.washingtonpost.com/amphtml/news/wonk/wp/2018/06/15/how-judge-leon-blew-it-with-u-s-v-att/), but it seems fair to say that Judge Leon's opinion reflects a decades old judicial tradition that treats "vertical" mergers -- joining companies at different levels of distribution -- as unlikely to be an antitrust problem.
There is obviously a clash between the judicial tradition that is permissive to vertical mergers and the Brandeisian view urged by Tim Wu. Because of that clash, Tim Wu suggests that reconciliation requires Congressional action.
But it seems unlikely that a Congress that doesn't do much will take up Tim Wu's action proposal any time soon.
In the meanwhile, there are issues to wrestle with for lawyers and economists who earn their living as courtroom antitrust advocates. First, should courtroom advocates join Tim Wu in in supporting broad legal restraints against "aggregation of wealth in the top echelons." Many do not. To the extent that courtroom advocates agree with Tim Wu, they would need to deal with his observation that the courts generally get vertical cases wrong. To Tim Wu, getting it wrong may mean rejecting broad legal restraints against corporate behemoths. Court precedent broadly approving vertical mergers reduces the leeway for advocates successfully arguing against vertical mergers in court.
Can Tim Wu's "big is bad" thinking ever be reconciled with courtroom legal precedent in vertical cases, without recourse to Congress? Maybe yes, to some extent, if antitrust advocates can argue within the leeway allowed by legal precedent for judicially manageable legal standards that are less permissive toward vertical mergers.
--Don Allen Resnikoff
The text of the NY AG lawsuit against the Trump Foundation is here:
https://int.nyt.com/data/documenthelper/38-lawsuit-against-the-trump-foundation/5e54a6bfd23e7b94fbad/optimized/full.pdf#page=1
The AG's concern about the Foundation and its Board includes extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
DAR
Excerpt from the Complaint:
PRELIMINARY STATEMENT
1. For more than a decade, the Donald J. Trump Foundation has operated in
persistent violation of state and federal law governing New York State charities. This pattern of
illegal conduct by the Foundation and its board members includes improper and extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
The Attorney General therefore brings this special proceeding to dissolve the Foundation for its
persistently illegal conduct, enjoin its board members from future service as a director of any
not-for-profit authorized by New York law, to obtain restitution and penalties, and to direct the
Foundation to cooperate with the Attorney General in the lawful distribution of its remaining
assets to qualified charitable entities.
2. In June 2016, the Attorney General began an investigation (the "Investigation") of
the Donald J. Trump Foundation (the "Foundation") "Foundation"
pursuant to the New York Not-for Profit Corporation Law ("N-PCL"), the New York Estates, Powers and Trusts Law ("EPTL"), the New
York Executive Law, and other applicable law governing New York State charities. The
Investigation found that the Foundation operated without any oversight by a functioning board of
directors. Decisions concerning the administration of the charitable assets entrusted to the care
of the Foundation were made without adequate consideration or oversight, and resulted in the
misuse of charitable assets for the benefit of Donald J. Trump ("Mr. Trump"
and his personal, political and/or business interests. In sum, the Investigation revealed that the Foundation was
little more than a checkbook for payments to not-for-profits from Mr. Trump or the Trump
Organization. This resulted in multiple violations of state and federal law because payments
were made using Foundation money regardless of the purpose of the payment. Mr. Trump used
charitable assets to pay off the legal obligations of entities he controlled, to promote Trump
hotels, to purchase personal items, and to support his presidential election campaign.
3. As set forth below, the Foundation and its directors and officers violated multiple
sections of the N-PCL, the EPTL, and the Executive Law, including provisions that prohibit
foundations from making false statements in filings with the Attorney General, engaging in self
dealing, wasting charitable assets, or violating the Internal Revenue Code by, among other
things, making expenditures to influence the outcome of an election. The Foundation's directors
failed to meet basic fiduciary duties and abdicated all responsibility for ensuring that the
Foundation's assets were used in compliance with the law. The violations that resulted were
significant and not only ran afoul of the applicable provisions of the N-PCL, the EPTL, and the
Executive Law, but also resulted in the Foundation failing to comply with the terms of its own
certificate of incorporation.
4. As a result of these persistent violations of law by the Respondents, the Attomey
General brings this special proceeding to dissolve the Foundation pursuant to Article 11 of the
N-PCL and New York Civil Practice Law and Rules ("CPLR") Article 4. In addition, pursuant
to the N-PCL, EPTL, Executive Law and CPLR Article 4, the Attorney General seeks an order
(i) directing Mr. Trump, Donald J. Trump, Jr., Ivanka Trump, and Eric Trump (together, the
"Individual Respondents") to make restitution and pay all penalties resulting from the breach of
fiduciary duties and their misuse of charitable assets for the benefit of Mr. Trump and his
interests; (ii) enjoining Mr. Trump from future service as an officer, director or trustee, or in any
other capacity as a fiduciary of any not-for-profit or charitable organization incorporated or
authorized to conduct business in the State of New York, or which solicits charitable donations
in the State of New York for a period of ten years, and enjoining the remaining Individual
Respondents from future service as an officer, director or trustee, or in any other capacity as a
fiduciary of any not-for-profit or charitable organization incorporated or authorized to conduct
business in the State of New York, or which solicits charitable donations in the State of New
York for a period of one year, subject to suspension in the event the remaining Individual
Respondents undergo adequate training on the fiduciary duties of directors of not-for-profit
corporations; (iii) directing Mr. Trump to pay an amount up to double the amount of benefits
improperly obtained through related party transactions entered into after July 1, 2014; (iv)
declaring that the Foundation has conducted its business in a persistently illegal manner and has
abused its powers contrary to the public policy of this state; (v) directing the Foundation to
cooperate with the Attorney General in the distribution of remaining assets to qualified charities;
(vi) restraining the Foundation, except by permission of the court, from exercising any corporate
powers; (vii) dissolving the Foundation; and (viii) granting such other and further relief as the
Court may deem just and proper.
FILED: NEW YORK COUNTY CLERK 06/14/2018 09:58 AM INDEX NO. 451130/2018 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/14/2018
3 of 41
https://int.nyt.com/data/documenthelper/38-lawsuit-against-the-trump-foundation/5e54a6bfd23e7b94fbad/optimized/full.pdf#page=1
The AG's concern about the Foundation and its Board includes extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
DAR
Excerpt from the Complaint:
PRELIMINARY STATEMENT
1. For more than a decade, the Donald J. Trump Foundation has operated in
persistent violation of state and federal law governing New York State charities. This pattern of
illegal conduct by the Foundation and its board members includes improper and extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
The Attorney General therefore brings this special proceeding to dissolve the Foundation for its
persistently illegal conduct, enjoin its board members from future service as a director of any
not-for-profit authorized by New York law, to obtain restitution and penalties, and to direct the
Foundation to cooperate with the Attorney General in the lawful distribution of its remaining
assets to qualified charitable entities.
2. In June 2016, the Attorney General began an investigation (the "Investigation") of
the Donald J. Trump Foundation (the "Foundation") "Foundation"
pursuant to the New York Not-for Profit Corporation Law ("N-PCL"), the New York Estates, Powers and Trusts Law ("EPTL"), the New
York Executive Law, and other applicable law governing New York State charities. The
Investigation found that the Foundation operated without any oversight by a functioning board of
directors. Decisions concerning the administration of the charitable assets entrusted to the care
of the Foundation were made without adequate consideration or oversight, and resulted in the
misuse of charitable assets for the benefit of Donald J. Trump ("Mr. Trump"
and his personal, political and/or business interests. In sum, the Investigation revealed that the Foundation was
little more than a checkbook for payments to not-for-profits from Mr. Trump or the Trump
Organization. This resulted in multiple violations of state and federal law because payments
were made using Foundation money regardless of the purpose of the payment. Mr. Trump used
charitable assets to pay off the legal obligations of entities he controlled, to promote Trump
hotels, to purchase personal items, and to support his presidential election campaign.
3. As set forth below, the Foundation and its directors and officers violated multiple
sections of the N-PCL, the EPTL, and the Executive Law, including provisions that prohibit
foundations from making false statements in filings with the Attorney General, engaging in self
dealing, wasting charitable assets, or violating the Internal Revenue Code by, among other
things, making expenditures to influence the outcome of an election. The Foundation's directors
failed to meet basic fiduciary duties and abdicated all responsibility for ensuring that the
Foundation's assets were used in compliance with the law. The violations that resulted were
significant and not only ran afoul of the applicable provisions of the N-PCL, the EPTL, and the
Executive Law, but also resulted in the Foundation failing to comply with the terms of its own
certificate of incorporation.
4. As a result of these persistent violations of law by the Respondents, the Attomey
General brings this special proceeding to dissolve the Foundation pursuant to Article 11 of the
N-PCL and New York Civil Practice Law and Rules ("CPLR") Article 4. In addition, pursuant
to the N-PCL, EPTL, Executive Law and CPLR Article 4, the Attorney General seeks an order
(i) directing Mr. Trump, Donald J. Trump, Jr., Ivanka Trump, and Eric Trump (together, the
"Individual Respondents") to make restitution and pay all penalties resulting from the breach of
fiduciary duties and their misuse of charitable assets for the benefit of Mr. Trump and his
interests; (ii) enjoining Mr. Trump from future service as an officer, director or trustee, or in any
other capacity as a fiduciary of any not-for-profit or charitable organization incorporated or
authorized to conduct business in the State of New York, or which solicits charitable donations
in the State of New York for a period of ten years, and enjoining the remaining Individual
Respondents from future service as an officer, director or trustee, or in any other capacity as a
fiduciary of any not-for-profit or charitable organization incorporated or authorized to conduct
business in the State of New York, or which solicits charitable donations in the State of New
York for a period of one year, subject to suspension in the event the remaining Individual
Respondents undergo adequate training on the fiduciary duties of directors of not-for-profit
corporations; (iii) directing Mr. Trump to pay an amount up to double the amount of benefits
improperly obtained through related party transactions entered into after July 1, 2014; (iv)
declaring that the Foundation has conducted its business in a persistently illegal manner and has
abused its powers contrary to the public policy of this state; (v) directing the Foundation to
cooperate with the Attorney General in the distribution of remaining assets to qualified charities;
(vi) restraining the Foundation, except by permission of the court, from exercising any corporate
powers; (vii) dissolving the Foundation; and (viii) granting such other and further relief as the
Court may deem just and proper.
FILED: NEW YORK COUNTY CLERK 06/14/2018 09:58 AM INDEX NO. 451130/2018 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/14/2018
3 of 41
From the NYT: Have patients been misled about the dangers of LASIK surgery?
Nearly half of all people who had healthy eyes before Lasik developed visual aberrations for the first time after the procedure, a recent FDA trial found. Nearly one-third developed dry eyes, a complication that can cause serious discomfort, for the first time.
The authors wrote that “patients undergoing Lasik surgery should be adequately counseled about the possibility of developing new visual symptoms after surgery before undergoing this elective procedure.”
Lack of precise information about complications is a problem that plagues many medical devices, which are tested by manufacturers and often gain F.D.A. approval before long-term outcomes are known, said Diana Zuckerman, president of the nonprofit National Center for Health Research in Washington.
Patients’ vision may regress after surgery, and they may need to use eyeglasses at times, some concede. But most Lasik surgeons maintain that soreness, dry eyes, double vision and other visual aberrations like those suffered by Mr. Ramirez subside within months for most patients.
Surgeons frequently point to the procedure’s popularity as evidence of its success: Lasik was performed on some 700,000 eyes last year, up from 628,724 in 2016, according to Market Scope, a market research company that focuses on the ophthalmic industry.
Dr. Donnenfeld wrote a frequently cited 2016 review paper that reported the vast majority of Lasik patients were satisfied. He counsels patients that symptoms like halos and excessive glare may get worse in the short term but improve over time, except in the “rare patient.”
Yet few studies have followed patients for more than a few months or a year, and many are authored by surgeons with financial ties to manufacturers that make the lasers.
One such study, written by the global medical director for a large laser eye-surgery provider, reported high satisfaction rates among patients five years after Lasik.
But the study also found that even after all those years, nearly half had dry eyes at least some of the time. Twenty percent had painful or sore eyes, 40 percent were sensitive to light, and one-third had difficulty driving at night or doing work that required seeing well up close.
A similar percentage experienced “severe or worse” glare, halos and problems driving at night.
Lasik surgeons say the procedure has improved over time, and one surgeon’s 2017 analysis of more recent data submitted to the F.D.A. by manufacturers concluded that for many patients, visual problems eventually resolved.
Still, a year after surgery, the percentage of the roughly 350 patients who had mild difficulties driving at night had increased slightly to 20 percent, while the percentage with mild glare and halos had more than doubled to about 20 percent in each category. The percentage with mild dryness more than doubled to 40 percent.
Now a vocal cadre of patient advocates is demanding the agency issue strong public warnings about Lasik.
The group is led by Morris Waxler, a retired senior F.D.A. official who regrets the role he played in Lasik’s approval over 20 years ago, and Paula Cofer, a patient-turned-advocate who says Lasik destroyed her eyesight and left her with chronic pain.
Ms. Cofer now runs a website, lasikcomplications.com, that features blog posts like “Top 10 Reasons Not to Have Lasik Surgery” and is dedicated to two men who committed suicide after suffering Lasik complications, including Max Burleson Cronin, a 27-year-old veteran.
The preceding is a series of excerpts from the full article, which is at https://www.nytimes.com/2018/06/11/well/lasik-complications-vision.html
Nearly half of all people who had healthy eyes before Lasik developed visual aberrations for the first time after the procedure, a recent FDA trial found. Nearly one-third developed dry eyes, a complication that can cause serious discomfort, for the first time.
The authors wrote that “patients undergoing Lasik surgery should be adequately counseled about the possibility of developing new visual symptoms after surgery before undergoing this elective procedure.”
Lack of precise information about complications is a problem that plagues many medical devices, which are tested by manufacturers and often gain F.D.A. approval before long-term outcomes are known, said Diana Zuckerman, president of the nonprofit National Center for Health Research in Washington.
Patients’ vision may regress after surgery, and they may need to use eyeglasses at times, some concede. But most Lasik surgeons maintain that soreness, dry eyes, double vision and other visual aberrations like those suffered by Mr. Ramirez subside within months for most patients.
Surgeons frequently point to the procedure’s popularity as evidence of its success: Lasik was performed on some 700,000 eyes last year, up from 628,724 in 2016, according to Market Scope, a market research company that focuses on the ophthalmic industry.
Dr. Donnenfeld wrote a frequently cited 2016 review paper that reported the vast majority of Lasik patients were satisfied. He counsels patients that symptoms like halos and excessive glare may get worse in the short term but improve over time, except in the “rare patient.”
Yet few studies have followed patients for more than a few months or a year, and many are authored by surgeons with financial ties to manufacturers that make the lasers.
One such study, written by the global medical director for a large laser eye-surgery provider, reported high satisfaction rates among patients five years after Lasik.
But the study also found that even after all those years, nearly half had dry eyes at least some of the time. Twenty percent had painful or sore eyes, 40 percent were sensitive to light, and one-third had difficulty driving at night or doing work that required seeing well up close.
A similar percentage experienced “severe or worse” glare, halos and problems driving at night.
Lasik surgeons say the procedure has improved over time, and one surgeon’s 2017 analysis of more recent data submitted to the F.D.A. by manufacturers concluded that for many patients, visual problems eventually resolved.
Still, a year after surgery, the percentage of the roughly 350 patients who had mild difficulties driving at night had increased slightly to 20 percent, while the percentage with mild glare and halos had more than doubled to about 20 percent in each category. The percentage with mild dryness more than doubled to 40 percent.
Now a vocal cadre of patient advocates is demanding the agency issue strong public warnings about Lasik.
The group is led by Morris Waxler, a retired senior F.D.A. official who regrets the role he played in Lasik’s approval over 20 years ago, and Paula Cofer, a patient-turned-advocate who says Lasik destroyed her eyesight and left her with chronic pain.
Ms. Cofer now runs a website, lasikcomplications.com, that features blog posts like “Top 10 Reasons Not to Have Lasik Surgery” and is dedicated to two men who committed suicide after suffering Lasik complications, including Max Burleson Cronin, a 27-year-old veteran.
The preceding is a series of excerpts from the full article, which is at https://www.nytimes.com/2018/06/11/well/lasik-complications-vision.html
The SEC's fraud complaint against Theranos principals is here:
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-41-theranos-holmes.pdf
Excerpt:
Plaintiff Securities and Exchange Commission (the “Commission”) alleges:
SUMMARY OF THE ACTION
1. This case involves the fraudulent offer and sale of securities by Theranos, Inc. (“Theranos”), a California company that aimed to revolutionize the diagnostics industry, its Chairman and Chief Executive Officer Elizabeth Holmes, and its former President and Chief Operating Officer, Ramesh “Sunny” Balwani. The Commission has filed a separate action against Balwani.
2. Holmes, Balwani, and Theranos raised more than $700 million from late 2013 to 2015 while deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer that could perform a full range of laboratory tests from a small sample of blood. They deceived investors by, among other things, making false and misleading statements to the media, hosting misleading technology demonstrations, and overstating the extent of Theranos’ relationships with commercial partners and government entities, to whom they had also made misrepresentations.
3. Holmes, Balwani, and Theranos also made false or misleading statements to investors about many aspects of Theranos’ business, including the capabilities of its proprietary analyzers, its commercial relationships, its relationship with the Department of Defense (“DOD”), its regulatory status with the U.S. Food and Drug Administration (“FDA”), and its financial condition. These statements were made with the intent to deceive or with reckless disregard for the truth.
4. Investors believed, based on these representations, that Theranos had successfully developed a proprietary analyzer that was capable of conducting a comprehensive set of blood tests from a few drops of blood from a finger. From Holmes’ and Balwani’s representations, investors understood Theranos offered a suite of technologies to (1) collect and transport a fingerstick sample of blood, (2) place the sample on a special cartridge which could be inserted into (3) Theranos’ proprietary analyzer, which would generate the results that Theranos could transmit to the patient or care provider. According to Holmes and Balwani, Theranos’ technology could provide blood testing that was faster, cheaper, and more accurate than existing blood testing laboratories, all in one analyzer that could be used outside traditional laboratory settings.
5. At all times, however, Holmes, Balwani, and Theranos were aware that, in its clinical laboratory, Theranos’ proprietary analyzer performed only approximately 12 tests of the over 200 tests on Theranos’ published patient testing menu, and Theranos used third-party
commercially available analyzers, some of which Theranos had modified to analyze fingerstick samples, to process the remainder of its patient tests.
6. In this action, the Commission seeks an order enjoining Holmes and Theranos from future violations of the securities laws, requiring Holmes to pay a civil monetary penalty, prohibiting Holmes from acting as an officer or director of any publicly-listed company, requiring Holmes to return all of the shares she obtained during this period, requiring Holmes to relinquish super-majority voting shares she obtained during this period, and providing other appropriate relief.
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-41-theranos-holmes.pdf
Excerpt:
Plaintiff Securities and Exchange Commission (the “Commission”) alleges:
SUMMARY OF THE ACTION
1. This case involves the fraudulent offer and sale of securities by Theranos, Inc. (“Theranos”), a California company that aimed to revolutionize the diagnostics industry, its Chairman and Chief Executive Officer Elizabeth Holmes, and its former President and Chief Operating Officer, Ramesh “Sunny” Balwani. The Commission has filed a separate action against Balwani.
2. Holmes, Balwani, and Theranos raised more than $700 million from late 2013 to 2015 while deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer that could perform a full range of laboratory tests from a small sample of blood. They deceived investors by, among other things, making false and misleading statements to the media, hosting misleading technology demonstrations, and overstating the extent of Theranos’ relationships with commercial partners and government entities, to whom they had also made misrepresentations.
3. Holmes, Balwani, and Theranos also made false or misleading statements to investors about many aspects of Theranos’ business, including the capabilities of its proprietary analyzers, its commercial relationships, its relationship with the Department of Defense (“DOD”), its regulatory status with the U.S. Food and Drug Administration (“FDA”), and its financial condition. These statements were made with the intent to deceive or with reckless disregard for the truth.
4. Investors believed, based on these representations, that Theranos had successfully developed a proprietary analyzer that was capable of conducting a comprehensive set of blood tests from a few drops of blood from a finger. From Holmes’ and Balwani’s representations, investors understood Theranos offered a suite of technologies to (1) collect and transport a fingerstick sample of blood, (2) place the sample on a special cartridge which could be inserted into (3) Theranos’ proprietary analyzer, which would generate the results that Theranos could transmit to the patient or care provider. According to Holmes and Balwani, Theranos’ technology could provide blood testing that was faster, cheaper, and more accurate than existing blood testing laboratories, all in one analyzer that could be used outside traditional laboratory settings.
5. At all times, however, Holmes, Balwani, and Theranos were aware that, in its clinical laboratory, Theranos’ proprietary analyzer performed only approximately 12 tests of the over 200 tests on Theranos’ published patient testing menu, and Theranos used third-party
commercially available analyzers, some of which Theranos had modified to analyze fingerstick samples, to process the remainder of its patient tests.
6. In this action, the Commission seeks an order enjoining Holmes and Theranos from future violations of the securities laws, requiring Holmes to pay a civil monetary penalty, prohibiting Holmes from acting as an officer or director of any publicly-listed company, requiring Holmes to return all of the shares she obtained during this period, requiring Holmes to relinquish super-majority voting shares she obtained during this period, and providing other appropriate relief.
Karl A. Racine's May 12, 2017 Washington Post writing on violence in DC
Karl A. Racine is the D.C. attorney general.
With the District’s coffers brimming with excess revenue, our officials and community leaders must devise, fund and competently implement a comprehensive strategy to treat the trauma that hurts our city’s most vulnerable young residents and breeds the violence that affects us all — violence described in the April 23 front-page article “‘Did your father die?.’ ” That article depicted the experiences of 8-year-old Tyshaun McPhatter and heartbreakingly described parts of the nation’s capital as places where children live in fear.
At the Office of the Attorney General, we come into contact with kids such as Tyshaun every day. Based on that experience, there are three steps we can take quickly.
First, we must invest in proven, data-based methods to interrupt violence and address it as a public-health crisis. Shootings and other violence cause long-term damage to whole communities, hampering prospects of economic development, traumatizing children and trapping families inside their homes out of fear. While heightened law enforcement is necessary, it is not sufficient to turn around high-crime communities.
Models such as Cure Violence are proven. This model has three main components.
● Detect and interrupt potentially violent conflicts by preventing retaliation and mediating simmering disputes.
● Identify and treat individuals at the highest risk for conflict by providing services and changing behavior.
● Engage communities in changing norms around violence (for instance, organize community responses to every shooting to counter normalization).
Multiple studies have shown that, where implemented, Cure Violence results in reductions in shootings and violent confrontations. New Orleans went 200 days without a murder in its Cure Violence sites; Philadelphia saw significant reductions in shootings in Cure Violence areas compared with similar districts; and Baltimore’s Cure Violence sites saw fewer homicides. We must fund a Cure Violence-based program in the District.
Second, the District must invest in strategies to reduce and prevent childhood trauma at home. Ongoing trauma puts a child’s brain in a constant fight-or-flight state, making it hard for other parts of the brain to develop properly. Children experience difficulty paying attention. Untreated trauma can lead to school failure, higher dropout rates, and aggression and other risky behavior. According to the National Kids Count Data Center, for children in the District, rates of abuse and neglect — major contributors to childhood trauma — are higher than the national average. In neighborhoods such as Tyshaun’s, they are dramatically higher.
The District should invest in evidence-based parenting programs that have been proved to reduce rates of child abuse and neglect, such as Triple P (for “Positive Parenting Program”). Triple P draws on extensive social science research to help parents and has the strongest evidence base of any such program in the country. For instance, a Centers for Disease Control and Prevention-funded randomized study showed a reduction in child-abuse and foster-care rates in counties using Triple P compared with control locations. This is the kind of support that should be available to every District family that needs it.
Third, the District must invest more resources in programs and services that treat the effects of trauma before children make contact with the court system. Therapeutic early interventions, when instituted in a comprehensive manner, have improved public safety. For instance, since I took office, we have increased the rate at which we divert low-level juvenile offenders into the D.C. Department of Human Services’ Alternatives to the Court Experience (ACE) program. This program offers intensive services for six months, tailored to an individual child’s needs. Of the approximately 1,000 kids who have completed the ACE program, more than 80 percent have not been rearrested. That’s an extraordinary success rate in juvenile justice.
The same approach should be used to provide quality psychiatric services for children, increase trauma-informed practices for schools and provide other supports to children before they find themselves in trouble.
My colleagues and I do not pretend to have all the answers. But we owe it to our young people to give them what they need to become resilient, thriving, contributing members of our community. We must focus our resources to meet the crisis facing our children. No child in this city should have to face the fear that young Tyshaun and his peers face every day.
***
Editor's comment: AG Racine's comment reflects the view that violence is much more than a police problem -- an array of social interventions is required. DAR
Karl A. Racine is the D.C. attorney general.
With the District’s coffers brimming with excess revenue, our officials and community leaders must devise, fund and competently implement a comprehensive strategy to treat the trauma that hurts our city’s most vulnerable young residents and breeds the violence that affects us all — violence described in the April 23 front-page article “‘Did your father die?.’ ” That article depicted the experiences of 8-year-old Tyshaun McPhatter and heartbreakingly described parts of the nation’s capital as places where children live in fear.
At the Office of the Attorney General, we come into contact with kids such as Tyshaun every day. Based on that experience, there are three steps we can take quickly.
First, we must invest in proven, data-based methods to interrupt violence and address it as a public-health crisis. Shootings and other violence cause long-term damage to whole communities, hampering prospects of economic development, traumatizing children and trapping families inside their homes out of fear. While heightened law enforcement is necessary, it is not sufficient to turn around high-crime communities.
Models such as Cure Violence are proven. This model has three main components.
● Detect and interrupt potentially violent conflicts by preventing retaliation and mediating simmering disputes.
● Identify and treat individuals at the highest risk for conflict by providing services and changing behavior.
● Engage communities in changing norms around violence (for instance, organize community responses to every shooting to counter normalization).
Multiple studies have shown that, where implemented, Cure Violence results in reductions in shootings and violent confrontations. New Orleans went 200 days without a murder in its Cure Violence sites; Philadelphia saw significant reductions in shootings in Cure Violence areas compared with similar districts; and Baltimore’s Cure Violence sites saw fewer homicides. We must fund a Cure Violence-based program in the District.
Second, the District must invest in strategies to reduce and prevent childhood trauma at home. Ongoing trauma puts a child’s brain in a constant fight-or-flight state, making it hard for other parts of the brain to develop properly. Children experience difficulty paying attention. Untreated trauma can lead to school failure, higher dropout rates, and aggression and other risky behavior. According to the National Kids Count Data Center, for children in the District, rates of abuse and neglect — major contributors to childhood trauma — are higher than the national average. In neighborhoods such as Tyshaun’s, they are dramatically higher.
The District should invest in evidence-based parenting programs that have been proved to reduce rates of child abuse and neglect, such as Triple P (for “Positive Parenting Program”). Triple P draws on extensive social science research to help parents and has the strongest evidence base of any such program in the country. For instance, a Centers for Disease Control and Prevention-funded randomized study showed a reduction in child-abuse and foster-care rates in counties using Triple P compared with control locations. This is the kind of support that should be available to every District family that needs it.
Third, the District must invest more resources in programs and services that treat the effects of trauma before children make contact with the court system. Therapeutic early interventions, when instituted in a comprehensive manner, have improved public safety. For instance, since I took office, we have increased the rate at which we divert low-level juvenile offenders into the D.C. Department of Human Services’ Alternatives to the Court Experience (ACE) program. This program offers intensive services for six months, tailored to an individual child’s needs. Of the approximately 1,000 kids who have completed the ACE program, more than 80 percent have not been rearrested. That’s an extraordinary success rate in juvenile justice.
The same approach should be used to provide quality psychiatric services for children, increase trauma-informed practices for schools and provide other supports to children before they find themselves in trouble.
My colleagues and I do not pretend to have all the answers. But we owe it to our young people to give them what they need to become resilient, thriving, contributing members of our community. We must focus our resources to meet the crisis facing our children. No child in this city should have to face the fear that young Tyshaun and his peers face every day.
***
Editor's comment: AG Racine's comment reflects the view that violence is much more than a police problem -- an array of social interventions is required. DAR
Massachusetts joins ranks of states guaranteeing counsel in fees/fines cases
Massachusetts now provides a right to counsel in fees and fines cases thanks to SB 2371, which was signed by the Governor in April. This provision added ALM GL ch. 127, § 145(b), which specifies that “A court shall not commit a person to a correctional facility for non-payment of money owed if such a person is not represented by counsel for the commitment proceeding, unless such person has waived counsel. A person deemed indigent for the purpose of being offered counsel and who is assigned counsel for the commitment portion of a proceeding solely for the nonpayment of money owed shall not be assessed a fee for such counsel.” This is a big win on the fees/fines front, and we expect to see other similar bills in the coming years.
Credit: The National Coalition for a Civil Right to Counsel. The Coalition " is an association of individuals and organizations committed to ensuring meaningful access to the courts for all. Our mission is to encourage, support and coordinate advocacy to expand recognition and implementation of a right to counsel in civil cases."
--From AAI:
AAI SAYS THE PROPOSED SPRINT-T-MOBILE MERGER SHOULD BE "DOA AT THE DOJ"
JUNE 05 2018
DIANA MOSS
WHITE PAPERS
DOJ, IP AND INNOVATION, TECHNOLOGY AND COMMUNICATIONSNew analysis from the American Antitrust Institute (AAI) concludes that the proposed merger of U.S. wireless carriers Sprint and T-Mobile should not survive a first look by the U.S. Department of Justice (DOJ). AAI says the government should move to block the deal to protect competition and consumers.
In less than a decade, consolidation has restructured the national U.S. wireless market. In 2002, the market featured seven major wireless carriers. By 2009, the number of significant national rivals fell to four. A Sprint-T-Mobile deal would further reduce the number of rivals from four to three, stoking even higher concentration in the national U.S. wireless market and contributing to growing concerns over a broader systemic decline in competition, market entry, and equality in the U.S. economy.
If approved, the Sprint-T-Mobile merger deal would complete the roll-up of the national U.S. wireless market. The 4-3 merger would create an oligopoly that would promote the market “stabilization” that is coveted by large players that grow tired of the rough and tumble of competition and the disruptive rivals that pressure them to compete. At the same time, the deal would eliminate important head-to-head competition between Sprint and T-Mobile, the two disruptive wireless carriers in the U.S. Either way, the competition eliminated by the merger would likely result in higher prices, less choice, lower quality, and slower innovation—to the detriment of U.S. wireless subscribers.
AAI’s analysis explains that a government complaint seeking to enjoin the merger should be based on five straightforward arguments:
Download AAI Spring-T-Mobile Analysis -- http://www.antitrustinstitute.org/sites/default/files/AAI_Sprint-T-Mobile.pdf
AAI SAYS THE PROPOSED SPRINT-T-MOBILE MERGER SHOULD BE "DOA AT THE DOJ"
JUNE 05 2018
DIANA MOSS
WHITE PAPERS
DOJ, IP AND INNOVATION, TECHNOLOGY AND COMMUNICATIONSNew analysis from the American Antitrust Institute (AAI) concludes that the proposed merger of U.S. wireless carriers Sprint and T-Mobile should not survive a first look by the U.S. Department of Justice (DOJ). AAI says the government should move to block the deal to protect competition and consumers.
In less than a decade, consolidation has restructured the national U.S. wireless market. In 2002, the market featured seven major wireless carriers. By 2009, the number of significant national rivals fell to four. A Sprint-T-Mobile deal would further reduce the number of rivals from four to three, stoking even higher concentration in the national U.S. wireless market and contributing to growing concerns over a broader systemic decline in competition, market entry, and equality in the U.S. economy.
If approved, the Sprint-T-Mobile merger deal would complete the roll-up of the national U.S. wireless market. The 4-3 merger would create an oligopoly that would promote the market “stabilization” that is coveted by large players that grow tired of the rough and tumble of competition and the disruptive rivals that pressure them to compete. At the same time, the deal would eliminate important head-to-head competition between Sprint and T-Mobile, the two disruptive wireless carriers in the U.S. Either way, the competition eliminated by the merger would likely result in higher prices, less choice, lower quality, and slower innovation—to the detriment of U.S. wireless subscribers.
AAI’s analysis explains that a government complaint seeking to enjoin the merger should be based on five straightforward arguments:
- Sprint-T-Mobile is a highly concentrative merger that is presumed to be illegal under longstanding U.S. merger law. If allowed, it would virtually guarantee harm to competition and consumers through higher retail and wholesale prices, lower quality and variety, less choice, and slower innovation.
- By reducing the field of rivals from four to three, the deal is a textbook set-up for anticompetitive coordination between the remaining Big 3 carriers: Verizon, AT&T, and Sprint-T-Mobile. The merged firm would undoubtedly find that maintaining a competitive “peace” with its rivals would be more profitable than trying to gain market share by competing aggressively on price, quality, and innovation.
- Compelling economic evidence from consummated mergers and enforcement in the U.S., together with experience in wireless sectors in other countries, strongly supports concerns over the anticompetitive and anti-consumer effects of highly concentrative 4-3 mergers.
- The merger eliminates head-to-head competition between the two disruptive rivals in the national U.S. wireless market. The proposed AT&T-T-Mobile merger failed in large part because it eliminated T-Mobile as a disruptive competitor, or a “maverick.” Sprint also competes hard on price to woo consumers away from rival carriers. Such competition, and the benefits it delivers to consumers, would be lost by the merger.
- No claimed cost savings or consumer benefits from the merger outweigh the merger’s likely harmful effects. The major “efficiency” claimed by Sprint and T-Mobile—that they need the merger to roll out 5G network technology—is meritless. Indeed, the potential difficulties of integrating the different Sprint and T-Mobile networks could actually increase costs and create inefficiencies for consumers.
Download AAI Spring-T-Mobile Analysis -- http://www.antitrustinstitute.org/sites/default/files/AAI_Sprint-T-Mobile.pdf
The NYC "Right to Counsel" Bill for Landlord-Tenant Court
The New York Times recently ran a series focusing on lack of access to justice in NYC courts dealing with landlord-tenant issues: The Eviction Machine Churning Through New York City-- https://www.nytimes.com/interactive/2018/05/20/nyregion/nyc-affordable-housing.html
In a letter to the NYT editor, a writer said:
While the article mentions the right to counsel, it misses the strength and potential of this law that the tenant movement won. It is so much more than funding for free attorneys; the law emboldens tenants to organize and fight for their rights as the threat of eviction becomes less powerful. The knowledge that tenants have a right to an attorney will be a deterrent to landlords who would otherwise harass tenants, deny services and repairs or charge illegal rents.
What is the law the letter writer refers to? Here's language from an article that explains it:
The "Right to Counsel" bill, passed by the City Council in July [2017, signed into law in August], funds housing court lawyers for New Yorkers facing eviction or foreclosure who earn up to double the federal poverty line — $49,200 annually for a family of four.
Higher-income people will also get legal consultation, but will not be represented in court.
In 2015, almost 22,000 New Yorkers were evicted, according to City Councilman Mark Levine's office. Only about 20 percent of people facing eviction are represented by an attorney. The law aims to level the playing field in housing courts, which have long been criticized for exacerbating inequities between landlords and tenants.
"For too long unscrupulous landlords have used housing court as a weapon to push out tenants by hauling them into court, often on the flimsiest of eviction grounds, knowing that the other side would not have an attorney," said Levine, who co-sponsored the bill.
"The era of any New Yorker losing their home because they simply didn't have an attorney ends today, for tenants in private housing and tenants in public housing as well."
Prior to the passing of the law, [Mayor] de Blasio said, low-income tenants facing of evictions were defenseless and would end up in shelters costing the city money.
"For a long time when that eviction notice came it felt like the ballgame was over," de Blasio said, adding that people felt "powerless." That, he said, was about to change.
"God forbid anyone gets that notice. The next thing they're gonna do is they're gonna reach for their phone and they're gonna call 3-1-1 and they're gonna get a lawyer to defend them. It's gonna be as simple as that," de Blasio said.
Levine said New York leading is the way for similar legislation in other cities, including Washington, D.C., Chicago and Philadelphia. De Blasio said the bill will impact hundreds of thousands of people.
Article cite: https://www.dnainfo.com/new-york/20170811/concourse/right-to-counsel-bill-law/
The New York Times recently ran a series focusing on lack of access to justice in NYC courts dealing with landlord-tenant issues: The Eviction Machine Churning Through New York City-- https://www.nytimes.com/interactive/2018/05/20/nyregion/nyc-affordable-housing.html
In a letter to the NYT editor, a writer said:
While the article mentions the right to counsel, it misses the strength and potential of this law that the tenant movement won. It is so much more than funding for free attorneys; the law emboldens tenants to organize and fight for their rights as the threat of eviction becomes less powerful. The knowledge that tenants have a right to an attorney will be a deterrent to landlords who would otherwise harass tenants, deny services and repairs or charge illegal rents.
What is the law the letter writer refers to? Here's language from an article that explains it:
The "Right to Counsel" bill, passed by the City Council in July [2017, signed into law in August], funds housing court lawyers for New Yorkers facing eviction or foreclosure who earn up to double the federal poverty line — $49,200 annually for a family of four.
Higher-income people will also get legal consultation, but will not be represented in court.
In 2015, almost 22,000 New Yorkers were evicted, according to City Councilman Mark Levine's office. Only about 20 percent of people facing eviction are represented by an attorney. The law aims to level the playing field in housing courts, which have long been criticized for exacerbating inequities between landlords and tenants.
"For too long unscrupulous landlords have used housing court as a weapon to push out tenants by hauling them into court, often on the flimsiest of eviction grounds, knowing that the other side would not have an attorney," said Levine, who co-sponsored the bill.
"The era of any New Yorker losing their home because they simply didn't have an attorney ends today, for tenants in private housing and tenants in public housing as well."
Prior to the passing of the law, [Mayor] de Blasio said, low-income tenants facing of evictions were defenseless and would end up in shelters costing the city money.
"For a long time when that eviction notice came it felt like the ballgame was over," de Blasio said, adding that people felt "powerless." That, he said, was about to change.
"God forbid anyone gets that notice. The next thing they're gonna do is they're gonna reach for their phone and they're gonna call 3-1-1 and they're gonna get a lawyer to defend them. It's gonna be as simple as that," de Blasio said.
Levine said New York leading is the way for similar legislation in other cities, including Washington, D.C., Chicago and Philadelphia. De Blasio said the bill will impact hundreds of thousands of people.
Article cite: https://www.dnainfo.com/new-york/20170811/concourse/right-to-counsel-bill-law/
Good News for Consumers: Free Credit Freezes - Consumer Reports
see https://www.consumerreports.org/credit-protection.../credit-freezes-are-now-free/
Article excerpts:
Credit reporting companies such as Equifax, Experian, and TransUnion will soon be required to let consumers freeze and unfreeze their credit files free of charge.
The provision is part of a bipartisan bill signed Thursday by President Donald Trump that rolls back certain Dodd-Frank financial rules that Congress approved after the 2008 financial crisis.
Currently, consumers could pay up to $10 to freeze their credit reports, depending on where they live. The new rules take effect in 120 days.
Along with the free credit freezes are some other benefits. Consumers now have the right to place a fraud alert on their credit file at no cost for one year—up from 90 days currently.
If you do that, businesses will be required to take steps to verify your identity before extending new credit, providing you with extra protection but possibly delaying the amount of time it takes for you to get a new credit card, say, or be approved for a mortgage. In addition, victims of identity theft are entitled to an extended fraud alert lasting seven years.
Each credit reporting agency will also be required to create a web page that allows consumers to request security freezes and fraud alerts, and opt out of the use of their information by companies marketing credit or insurance products.
“The new law has strengths and weaknesses regarding credit freezes,” says Anna Laitin, director of financial policy at Consumers Union, the advocacy division of Consumer Reports. “It would enable individuals across the country to freeze and unfreeze their credit at no cost, a right that consumers in only a few states now have. However, it also preempts the ability of states to provide greater protections to consumers. States have been the innovators on credit freezes, and this legislation would stop that innovation in its tracks.”
Laitin points to recent legislation in California that would make it so that if a consumer freezes his or her credit report at one of the main credit reporting agencies, it would be frozen at the others as well, creating a one-stop shop for consumers seeking to implement a credit freeze.
see https://www.consumerreports.org/credit-protection.../credit-freezes-are-now-free/
Article excerpts:
Credit reporting companies such as Equifax, Experian, and TransUnion will soon be required to let consumers freeze and unfreeze their credit files free of charge.
The provision is part of a bipartisan bill signed Thursday by President Donald Trump that rolls back certain Dodd-Frank financial rules that Congress approved after the 2008 financial crisis.
Currently, consumers could pay up to $10 to freeze their credit reports, depending on where they live. The new rules take effect in 120 days.
Along with the free credit freezes are some other benefits. Consumers now have the right to place a fraud alert on their credit file at no cost for one year—up from 90 days currently.
If you do that, businesses will be required to take steps to verify your identity before extending new credit, providing you with extra protection but possibly delaying the amount of time it takes for you to get a new credit card, say, or be approved for a mortgage. In addition, victims of identity theft are entitled to an extended fraud alert lasting seven years.
Each credit reporting agency will also be required to create a web page that allows consumers to request security freezes and fraud alerts, and opt out of the use of their information by companies marketing credit or insurance products.
“The new law has strengths and weaknesses regarding credit freezes,” says Anna Laitin, director of financial policy at Consumers Union, the advocacy division of Consumer Reports. “It would enable individuals across the country to freeze and unfreeze their credit at no cost, a right that consumers in only a few states now have. However, it also preempts the ability of states to provide greater protections to consumers. States have been the innovators on credit freezes, and this legislation would stop that innovation in its tracks.”
Laitin points to recent legislation in California that would make it so that if a consumer freezes his or her credit report at one of the main credit reporting agencies, it would be frozen at the others as well, creating a one-stop shop for consumers seeking to implement a credit freeze.
The DC judiciary on access to justice for all
The District of Columbia is fortunate that the DC Bar and DC’s judiciary are dedicated to the goal of access to justice for all. That includes the poor. But there will always be challenges to achieving that goal. The DC Court’s website says:
The Courts have a responsibility to eliminate barriers to meaningful participation in the judicial process and to accessing court services. Such barriers may include a lack of legal representation, limited literacy or limited English language skills, limited financial resources, and physical or mental disability. In collaboration with justice and community partners, the Courts will work to ensure full access to the justice system and court services.
With regard to legal assistance, the Court’s site says:
The Courts provide legal representation for eligible indigent defendants in criminal cases at the trial and appellate levels and to parents in child abuse and neglect matters. There is an urgent need for legal assistance for parties in our Courts who cannot afford legal representation for many types of civil disputes or appeals. In 2017, the Courts sought and received legislative authority to raise the monetary limit for matters that can be brought to small claims court, from $5,000 to $10,000, which will bring some needed relief to these residents. In addition, the Courts will continue to partner with the DC Bar, law firms and other local organizations to identify unmet needs for legal assistance and to expand the availability of free, pro bono or low-cost civil legal assistance in the District.
With regard to unrepresented litigants, the Court’s site says:
Many of the District’s residents who cannot afford an attorney must represent themselves in court, often against an opposing party with legal representation. Additionally, an increasing number of individuals who may be able to afford counsel are choosing to represent themselves. In partnership with the DC Bar, legal services providers and organizations, the Courts have created self-help centers where such litigants can obtain information and assistance in representing themselves. The Courts will continue to expand the availability of assistance and information at the self-help centers and resource centers. The Courts will expand the electronic filing program to enable self-represented litigants to file cases and documents online, saving time and costs incurred to visit the courthouse. The Courts will also develop informational videos and self-guided materials on key court processes and post them on the Courts’ website and electronic monitors in court buildings. Continuing efforts will be made to ensure that all court forms and documents are in plain language.
The Court recognizes the challenges of bringing justice to people of limited means. These challenges affect many lawyers, not just those who provide legal services to the poor. For example, attorneys in litigation where the opposing party is unrepresented may be challenged by an adversary who is ill-prepared for litigation but very angry. Of course, the unpresented litigant can be a challenge to the presiding judge.
The relevant DC Court website URL is https://www.dccourts.gov/about/organizational-performance/goal1
Posting by Don Allen Resnikoff
The District of Columbia is fortunate that the DC Bar and DC’s judiciary are dedicated to the goal of access to justice for all. That includes the poor. But there will always be challenges to achieving that goal. The DC Court’s website says:
The Courts have a responsibility to eliminate barriers to meaningful participation in the judicial process and to accessing court services. Such barriers may include a lack of legal representation, limited literacy or limited English language skills, limited financial resources, and physical or mental disability. In collaboration with justice and community partners, the Courts will work to ensure full access to the justice system and court services.
With regard to legal assistance, the Court’s site says:
The Courts provide legal representation for eligible indigent defendants in criminal cases at the trial and appellate levels and to parents in child abuse and neglect matters. There is an urgent need for legal assistance for parties in our Courts who cannot afford legal representation for many types of civil disputes or appeals. In 2017, the Courts sought and received legislative authority to raise the monetary limit for matters that can be brought to small claims court, from $5,000 to $10,000, which will bring some needed relief to these residents. In addition, the Courts will continue to partner with the DC Bar, law firms and other local organizations to identify unmet needs for legal assistance and to expand the availability of free, pro bono or low-cost civil legal assistance in the District.
With regard to unrepresented litigants, the Court’s site says:
Many of the District’s residents who cannot afford an attorney must represent themselves in court, often against an opposing party with legal representation. Additionally, an increasing number of individuals who may be able to afford counsel are choosing to represent themselves. In partnership with the DC Bar, legal services providers and organizations, the Courts have created self-help centers where such litigants can obtain information and assistance in representing themselves. The Courts will continue to expand the availability of assistance and information at the self-help centers and resource centers. The Courts will expand the electronic filing program to enable self-represented litigants to file cases and documents online, saving time and costs incurred to visit the courthouse. The Courts will also develop informational videos and self-guided materials on key court processes and post them on the Courts’ website and electronic monitors in court buildings. Continuing efforts will be made to ensure that all court forms and documents are in plain language.
The Court recognizes the challenges of bringing justice to people of limited means. These challenges affect many lawyers, not just those who provide legal services to the poor. For example, attorneys in litigation where the opposing party is unrepresented may be challenged by an adversary who is ill-prepared for litigation but very angry. Of course, the unpresented litigant can be a challenge to the presiding judge.
The relevant DC Court website URL is https://www.dccourts.gov/about/organizational-performance/goal1
Posting by Don Allen Resnikoff
Oncotype DX, a genetic test first marketed in 2004, will now be used to spare "intermediate risk" breast cancer patients from chemotherapy
Oncotype DX [URL http://www.oncotypeiq.com/en-US] first hit the market in 2004. The genomic test measures the expression of 21 genes in tumor tissue removed at the time of surgery and predicts risk of recurrence on a scale of 0 to 100.
Earlier research [URL https://www.nejm.org/doi/full/10.1056/NEJMoa1510764?query=recirc_curatedRelated_article] found that a patient with a high-risk case, or score of 26-100, would benefit from chemotherapy, while a patient at the lower end with a score of 10 and under would not. This left a lot of women, an estimated 65,000 in the U.S. each year, in a gray zone, unsure if they would benefit from chemo.
A new study, published Sunday in the New England Journal of Medicine,[URL http://dx.doi.org/10.1056/NEJMoa1804710] finds that patients who fall in the intermediate risk zone do as well with hormone therapy alone as with chemo plus hormone therapy after surgery. "[The findings] are both important and significant, and also practice-changing," says, Dr. José Baselga, a medical oncologist and physician in chief at Memorial Sloan Kettering Cancer Center in New York, who was not involved with this research. "Basically, it's going to spare a lot of unnecessary chemotherapy in patients with breast cancer."
Source: https://www.npr.org/sections/health-shots/2018/06/03/616298863/for-some-breast-cancer-patients-the-chemo-decision-just-got-easier
Oncotype DX [URL http://www.oncotypeiq.com/en-US] first hit the market in 2004. The genomic test measures the expression of 21 genes in tumor tissue removed at the time of surgery and predicts risk of recurrence on a scale of 0 to 100.
Earlier research [URL https://www.nejm.org/doi/full/10.1056/NEJMoa1510764?query=recirc_curatedRelated_article] found that a patient with a high-risk case, or score of 26-100, would benefit from chemotherapy, while a patient at the lower end with a score of 10 and under would not. This left a lot of women, an estimated 65,000 in the U.S. each year, in a gray zone, unsure if they would benefit from chemo.
A new study, published Sunday in the New England Journal of Medicine,[URL http://dx.doi.org/10.1056/NEJMoa1804710] finds that patients who fall in the intermediate risk zone do as well with hormone therapy alone as with chemo plus hormone therapy after surgery. "[The findings] are both important and significant, and also practice-changing," says, Dr. José Baselga, a medical oncologist and physician in chief at Memorial Sloan Kettering Cancer Center in New York, who was not involved with this research. "Basically, it's going to spare a lot of unnecessary chemotherapy in patients with breast cancer."
Source: https://www.npr.org/sections/health-shots/2018/06/03/616298863/for-some-breast-cancer-patients-the-chemo-decision-just-got-easier
The Trump Administration's leaked memo preserving unprofitable coal and nuclear power plants-- see it here: https://www.documentcloud.org/documents/4491203-Grid-Memo.html
The rationale is that coal and nuclear power plants are more stable than natural gas plants, because the fuel source is on site. That aids national security.
The rationale is that coal and nuclear power plants are more stable than natural gas plants, because the fuel source is on site. That aids national security.
Pending and recent federal and state government investigations and actions regarding for-profit colleges
Compiled by David Halperin, Attorney, Washington DC
UPDATED 05-23-18
This is a list of pending and recent significant federal and state civil and criminal law enforcement investigations of, and actions against, for-profit colleges. It also includes some major investigations and disciplinary actions by the U.S. Department of Education and Department of Defense. It does not include investigations or disciplinary actions by state education oversight boards. It also does not include (except for False Claims Act cases that resulted in payments to the United States) lawsuits prosecuted only by private parties — students, staff, etc.
To date, 37 state attorneys general [link: http://migration.kentucky.gov/newsroom/ag/conwaydurbin.htm ] are participating in a joint working group examining for-profit colleges. Many of those are actively investigating specific for-profit colleges in their states.
Some of the most-investigated for-profit colleges have now converted to non-profit status or are in the process of doing so, often through troubling transactions and arrangements. Schools will remain on this list, for-profit or not, if they have engaged in troubling behavior.
Please send corrections, additions, updates, and comments to [email protected]
Mr. Halperin's list is here: https://www.republicreport.org/2014/law-enforcement-for-profit-colleges/
Compiled by David Halperin, Attorney, Washington DC
UPDATED 05-23-18
This is a list of pending and recent significant federal and state civil and criminal law enforcement investigations of, and actions against, for-profit colleges. It also includes some major investigations and disciplinary actions by the U.S. Department of Education and Department of Defense. It does not include investigations or disciplinary actions by state education oversight boards. It also does not include (except for False Claims Act cases that resulted in payments to the United States) lawsuits prosecuted only by private parties — students, staff, etc.
To date, 37 state attorneys general [link: http://migration.kentucky.gov/newsroom/ag/conwaydurbin.htm ] are participating in a joint working group examining for-profit colleges. Many of those are actively investigating specific for-profit colleges in their states.
Some of the most-investigated for-profit colleges have now converted to non-profit status or are in the process of doing so, often through troubling transactions and arrangements. Schools will remain on this list, for-profit or not, if they have engaged in troubling behavior.
Please send corrections, additions, updates, and comments to [email protected]
Mr. Halperin's list is here: https://www.republicreport.org/2014/law-enforcement-for-profit-colleges/
Trump orders facilitating firing of federal employess are a threat to democracy, union says.
White House directives aim to strip federal workers of right to representation
NEWS PROVIDED BY
American Federation of Government Employees May 25, 2018, 16:49 ET
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"This is more than union busting – it's democracy busting," AFGE National President J. David Cox Sr.said. "These executive orders are a direct assault on the legal rights and protections that Congress has specifically guaranteed to the 2 million public-sector employees across the country who work for the federal government."
"Our government is built on a system of checks and balances to prevent any one person from having too much influence. President Trump's executive orders will undo all of that. This administration seems hellbent on replacing a civil service that works for all taxpayers with a political service that serves at its whim."
"Federal employees swear an oath to serve this country. The American people rightly expect that federal employees go to work every day and do the jobs they were hired to do – whether it's ensuring our food is safe to eat, caring for veterans who were injured while serving their country, preventing illegal weapons and drugs from crossing our borders, or helping communities recover from hurricanes and other disasters."
"President Trump's executive orders do nothing to help federal workers do their jobs better. In fact, they do the opposite by depriving workers of their rights to address and resolve workplace issues such as sexual harassment, racial discrimination, retaliation against whistleblowers, improving workplace health and safety, enforcing reasonable accommodations for workers with disabilities, and so much more."
"These executive orders strip agencies of their right to bargain terms and conditions of employment and replace it with a politically charged scheme to fire employees without due process," Cox said.
AFGE representatives have used official time in myriad ways that benefit taxpayers, including to:
"It's a policy that has saved taxpayers in the long run because it helps resolve isolated conflicts that arise in the workplace before they become costly, agency-wide problems. And contrary to some reports, official time is never used to conduct union-specific business, solicit members, hold internal union meetings, elect union officers, or engage in partisan political activities."
"By preventing problem solving, these executive orders will create inefficiencies and hinder the ability of dedicated federal employees to effectively deliver services to the American public."
The American Federation of Government Employees (AFGE) is the largest federal employee union, representing 700,000 workers in the federal government and the government of the District of Columbia.
For the latest AFGE news and information, visit the AFGE Media Center. Follow us on Facebook, Twitter, and YouTube.
SOURCE American Federation of Government Employees
Related Linkshttp://www.afge.org
White House directives aim to strip federal workers of right to representation
NEWS PROVIDED BY
American Federation of Government Employees May 25, 2018, 16:49 ET
SHARE THIS ARTICLE
"This is more than union busting – it's democracy busting," AFGE National President J. David Cox Sr.said. "These executive orders are a direct assault on the legal rights and protections that Congress has specifically guaranteed to the 2 million public-sector employees across the country who work for the federal government."
"Our government is built on a system of checks and balances to prevent any one person from having too much influence. President Trump's executive orders will undo all of that. This administration seems hellbent on replacing a civil service that works for all taxpayers with a political service that serves at its whim."
"Federal employees swear an oath to serve this country. The American people rightly expect that federal employees go to work every day and do the jobs they were hired to do – whether it's ensuring our food is safe to eat, caring for veterans who were injured while serving their country, preventing illegal weapons and drugs from crossing our borders, or helping communities recover from hurricanes and other disasters."
"President Trump's executive orders do nothing to help federal workers do their jobs better. In fact, they do the opposite by depriving workers of their rights to address and resolve workplace issues such as sexual harassment, racial discrimination, retaliation against whistleblowers, improving workplace health and safety, enforcing reasonable accommodations for workers with disabilities, and so much more."
"These executive orders strip agencies of their right to bargain terms and conditions of employment and replace it with a politically charged scheme to fire employees without due process," Cox said.
AFGE representatives have used official time in myriad ways that benefit taxpayers, including to:
- Blow the whistle on management's attempt to cover up an outbreak of Legionnaires disease that killed and sickened veterans in Pittsburgh;
- Address an incident in which a noose was placed on the chair of an African-American worker at the U.S. Mint in Philadelphia;
- Mitigate the impact of Army downsizing on employees and their families;
- Expedite the processing of benefits to veterans and their survivors; and
- Successfully negotiate equipping federal correctional officers with pepper spray to keep them safe on the job.
"It's a policy that has saved taxpayers in the long run because it helps resolve isolated conflicts that arise in the workplace before they become costly, agency-wide problems. And contrary to some reports, official time is never used to conduct union-specific business, solicit members, hold internal union meetings, elect union officers, or engage in partisan political activities."
"By preventing problem solving, these executive orders will create inefficiencies and hinder the ability of dedicated federal employees to effectively deliver services to the American public."
The American Federation of Government Employees (AFGE) is the largest federal employee union, representing 700,000 workers in the federal government and the government of the District of Columbia.
For the latest AFGE news and information, visit the AFGE Media Center. Follow us on Facebook, Twitter, and YouTube.
SOURCE American Federation of Government Employees
Related Linkshttp://www.afge.org
From the federal indictment concerning bribes and fraud in distribution of opioid Fentanyl:
"Beginning in or about May 2012 and continuing until in or about December 2015, the Company, KAPOOR, BABICH, BURLAKOFF, GURRY, SIMON, LEE, and ROWAN, the co-conspirator practitioners, . . .the co-conspirator pharmacies, and other persons and entities known and unknown to the Grand Jury, conspired with one another to profit from the illicit distribution of the Fentanyl Spray, by using bribes and fraud."
A copy of the unsealed federal indictment is here: https://www.scribd.com/document/362727686/Unsealed-Indictment-vs-Insys-Founder-John-Kapoor-others
The current NYT magazine article on the story is here: https://www.nytimes.com/interactive/2018/05/02/magazine/money-issue-insys-opioids-kickbacks.html
"Beginning in or about May 2012 and continuing until in or about December 2015, the Company, KAPOOR, BABICH, BURLAKOFF, GURRY, SIMON, LEE, and ROWAN, the co-conspirator practitioners, . . .the co-conspirator pharmacies, and other persons and entities known and unknown to the Grand Jury, conspired with one another to profit from the illicit distribution of the Fentanyl Spray, by using bribes and fraud."
A copy of the unsealed federal indictment is here: https://www.scribd.com/document/362727686/Unsealed-Indictment-vs-Insys-Founder-John-Kapoor-others
The current NYT magazine article on the story is here: https://www.nytimes.com/interactive/2018/05/02/magazine/money-issue-insys-opioids-kickbacks.html
NYT explains zoning practices in lava land
“Many people are willing to risk living next to a volcano because the living is cheap.”
When developers were carving up Puna back in the 1960s and 70s, many investors on the mainland bought lots in the lava lands sight unseen.
In some cases, public officials leveraged their power into cobbling together real estate deals on the Big Island from which they could benefit.
At the time, basic infrastructure — things like paved roads, sewage systems, running water and electricity — was lacking. Subdivisions such as Leilani now have some of those services, but many residents still rely on rain catchment tanks for water. Just a few miles away, many homeowners live entirely off the grid, on even cheaper land parcels.
In some parts of Puna, newcomers are building nearly directly on fields of hardened lava from eruptions that destroyed other communities. For instance, an eruption of Kilauea in 1990 destroyed about 100 homes in the community of Kalapana. Less than 30 years later, dozens of homes now stand atop the flow field that swallowed Kalapana. The homes, some built without heed to code, lack ties to the electricity grid and sewage systems. Residents collect water in catchment tanks.
Often, banks won’t issue a traditional mortgage on such properties, but those determined to come here have found other ways to finance their ventures.
DAR comment: Go figure.
From https://www.nytimes.com/2018/05/25/us/hawaii-volcano-housing.html?emc=edit_ne_20180525&nl=evening-briefing&nlid=6707584320180525&te=1
“Many people are willing to risk living next to a volcano because the living is cheap.”
When developers were carving up Puna back in the 1960s and 70s, many investors on the mainland bought lots in the lava lands sight unseen.
In some cases, public officials leveraged their power into cobbling together real estate deals on the Big Island from which they could benefit.
At the time, basic infrastructure — things like paved roads, sewage systems, running water and electricity — was lacking. Subdivisions such as Leilani now have some of those services, but many residents still rely on rain catchment tanks for water. Just a few miles away, many homeowners live entirely off the grid, on even cheaper land parcels.
In some parts of Puna, newcomers are building nearly directly on fields of hardened lava from eruptions that destroyed other communities. For instance, an eruption of Kilauea in 1990 destroyed about 100 homes in the community of Kalapana. Less than 30 years later, dozens of homes now stand atop the flow field that swallowed Kalapana. The homes, some built without heed to code, lack ties to the electricity grid and sewage systems. Residents collect water in catchment tanks.
Often, banks won’t issue a traditional mortgage on such properties, but those determined to come here have found other ways to finance their ventures.
DAR comment: Go figure.
From https://www.nytimes.com/2018/05/25/us/hawaii-volcano-housing.html?emc=edit_ne_20180525&nl=evening-briefing&nlid=6707584320180525&te=1
From DMN:
The newly launched YouTube Music's ’s payouts to artists are a tiny fraction of what Spotify delivers, thanks to clever loopholes in existing copyright law.
Just recently, Elon Musk blasted streaming music platforms for delivering ‘crazy low payouts,’ while presenting a depressing breakdown from Statista of what those payouts are. But on the ‘crazy low’ spectrum, perhaps YouTube would qualify as ‘psychotically bottom-scraping’.
The story continues here. [ https://www.digitalmusicnews.com/2018/05/23/youtube-music-threat-artist-livelihood/ ]
The newly launched YouTube Music's ’s payouts to artists are a tiny fraction of what Spotify delivers, thanks to clever loopholes in existing copyright law.
Just recently, Elon Musk blasted streaming music platforms for delivering ‘crazy low payouts,’ while presenting a depressing breakdown from Statista of what those payouts are. But on the ‘crazy low’ spectrum, perhaps YouTube would qualify as ‘psychotically bottom-scraping’.
The story continues here. [ https://www.digitalmusicnews.com/2018/05/23/youtube-music-threat-artist-livelihood/ ]
Comment of the DCConsumerRightsCoalition.org filed with the CFPB regarding limiting or reducing the CFPB's public consumer complaint database:
The mission of the Consumer Financial Protection Bureau (CFPB) is to identify dangerous and unfair financial practices, educate consumers about these practices, and regulate the financial institutions that perpetuate them.
To accomplish these goals, the CFPB created the public Consumer Complaint Database. The database tracks complaints made by consumers to the CFPB and how they are resolved. As USPIRG and others have pointed out, the database enables the CFPB to identify financial practices that threaten to harm consumers and enables the public to evaluate both the performance of the financial industry and of the CFPB. More importantly, a database which is also publicly available, also assist consumers in making choices. By reviewing complaints, and the responses, consumers can vet potential businesses and choose companies based on real track records rather than puffery and advertising.
If CFPB were to limit or reduce the public Consumer Complaint Database, that would impede the public's ability to evaluate the performance of financial industry participants and of the CFPB. For that reason we believe the public Consumer Database should be maintained in essentially the same manner as in the recent past.
The mission of the Consumer Financial Protection Bureau (CFPB) is to identify dangerous and unfair financial practices, educate consumers about these practices, and regulate the financial institutions that perpetuate them.
To accomplish these goals, the CFPB created the public Consumer Complaint Database. The database tracks complaints made by consumers to the CFPB and how they are resolved. As USPIRG and others have pointed out, the database enables the CFPB to identify financial practices that threaten to harm consumers and enables the public to evaluate both the performance of the financial industry and of the CFPB. More importantly, a database which is also publicly available, also assist consumers in making choices. By reviewing complaints, and the responses, consumers can vet potential businesses and choose companies based on real track records rather than puffery and advertising.
If CFPB were to limit or reduce the public Consumer Complaint Database, that would impede the public's ability to evaluate the performance of financial industry participants and of the CFPB. For that reason we believe the public Consumer Database should be maintained in essentially the same manner as in the recent past.
The recent US Supreme Court decision in Murphy v. NCAA opens the door to State policies permitting gambling. There are many questions that follow about the evolution of gambling as a business in the future. Which companies will play an important role? Will it be fantasy sports companies like Fanduel and DraftKings? Casino companies? What will be the reaction of the National Collegiate Athletic Association and others responsible for events and athletes likely to be the targets for gambling? How will issues of legality and ethics be dealt with? The statement recently issued by four State gambling regulators briefly suggests that State regulators can handle it. --DAR
FOUR STATE GAMBLING REGULATORS ISSUE STATEMENT IN DEFENSE OF STATE REGULATION
André Wilsenach Executive Director, International Center for Gaming Regulation, UNLV1MAY 22, 2018
This statement is issued by gaming regulatory leaders from four state gambling jurisdictions in response to the recent U.S. Supreme Court ruling to confirm and assert that states and tribal gaming regulatory agencies have the capacity, resources, and ability to oversee the regulation of legalized sports betting.
Sports betting in Nevada has already been regulated with integrity and success, and gaming jurisdictions across the United States, including tribal jurisdictions, have demonstrated their ability to oversee gaming of all sorts while adhering to the highest standards.
Since the opinion in Murphy v. National Collegiate Athletic Association was released last week, there has been an overwhelming response by the various interested parties, including states, leagues, federal congressional representatives, responsible gambling organizations, sports betting consumers, and gambling industry operators and affiliates. As we expect the dialogue to continue with substantial actions to be undertaken rapidly, it is important to assert and confirm our support for a rational, state-based and tribal government approach to an expansion of legal, regulated sports wagering in the United States.
For nearly two years, leading regulators from key state commercial gambling jurisdictions have been meeting under the auspices of the University of Nevada, Las Vegas’s International Center for Gaming Regulation (ICGR), to dialogue about current issues affecting the gambling industry and to further best regulatory practices.
As experienced gaming regulators who are part of the U.S. State Gaming Regulators Forum, we would encourage jurisdictions to establish and implement regulatory models that are not only adaptive and successful, but that remain flexible enough to be sturdy, yet encourage innovation.
This group looks forward to continuing to collaborate together while serving as a resource as the various states and tribal governments begin implementing sports betting in their jurisdictions. Nevada, having both the depth and experience with legalized, regulated sports wagering, serves as a leader to help guide us and other jurisdictions through this historical time.
As the regulators in different gambling jurisdictions, we have jointly concluded that the following simple guidelines will help with an initial approach to sports betting regulation. While we cannot personally commit our respective jurisdictions to any specific position or practice, we support all of these positions individually, will support them throughout our regulatory agencies, and will help provide guidance to other jurisdictions as to how these guidelines can be implemented.
1. Coordinated action among jurisdictions offering sports betting against illegal bookmaking, illegal gambling activities, and any unsuitable and unlawful associations, along with strong support from federal-level enforcement agencies, is the best way to eradicate illegal activities.
2. Another critical element of legalized sports betting is the establishment of structures and processes that will ensure a high level of integrity in all sports. Therefore, all of our jurisdictions and others that legalize and regulate sports wagering should aim to share real-time betting information, in an effort to detect, prevent, and eliminate match fixing.
3. Measures for responsible gambling in sports betting are important to help protect and maintain the credibility of the activity.
4. The history of legalized sports betting in both Nevada and the United Kingdom indicates that it is a very low-margin business compared to other forms of gambling. Reasonable tax rates and fees are essential for legal sports betting to be competitive until illegal providers can be eradicated.
5. Additional fees, including the so-called “integrity fee,” increase the costs of legal sports betting, siphon much needed tax revenues away from state coffers, and increase state regulatory burdens.
We encourage state legislatures that elect to legalize sports betting to consider these guidelines in order to promote a coherent regulatory environment.
We, as members of the U.S. State Gaming Regulators Forum, will look to immediately develop a Memorandum of Understanding between our jurisdictions to acknowledge support for implementation of these principles. We welcome other jurisdictions’ regulatory bodies sharing these values to join with us.
Becky Harris, Chairwoman, Nevada Gaming Control Board
Stephen P. Crosby, Chairman, Massachusetts Gaming Commission
Ronnie Jones, Chairman, Louisiana Gaming Control Board
Rick Kalm, Executive Director, Michigan Gaming Control Board
For further media inquiries, contact Jennifer Roberts, Associate Director of UNLV International Center for Gaming Regulation, at [email protected] or 702-895-2653.
FOUR STATE GAMBLING REGULATORS ISSUE STATEMENT IN DEFENSE OF STATE REGULATION
- Published on May 23, 2018
André Wilsenach Executive Director, International Center for Gaming Regulation, UNLV1MAY 22, 2018
This statement is issued by gaming regulatory leaders from four state gambling jurisdictions in response to the recent U.S. Supreme Court ruling to confirm and assert that states and tribal gaming regulatory agencies have the capacity, resources, and ability to oversee the regulation of legalized sports betting.
Sports betting in Nevada has already been regulated with integrity and success, and gaming jurisdictions across the United States, including tribal jurisdictions, have demonstrated their ability to oversee gaming of all sorts while adhering to the highest standards.
Since the opinion in Murphy v. National Collegiate Athletic Association was released last week, there has been an overwhelming response by the various interested parties, including states, leagues, federal congressional representatives, responsible gambling organizations, sports betting consumers, and gambling industry operators and affiliates. As we expect the dialogue to continue with substantial actions to be undertaken rapidly, it is important to assert and confirm our support for a rational, state-based and tribal government approach to an expansion of legal, regulated sports wagering in the United States.
For nearly two years, leading regulators from key state commercial gambling jurisdictions have been meeting under the auspices of the University of Nevada, Las Vegas’s International Center for Gaming Regulation (ICGR), to dialogue about current issues affecting the gambling industry and to further best regulatory practices.
As experienced gaming regulators who are part of the U.S. State Gaming Regulators Forum, we would encourage jurisdictions to establish and implement regulatory models that are not only adaptive and successful, but that remain flexible enough to be sturdy, yet encourage innovation.
This group looks forward to continuing to collaborate together while serving as a resource as the various states and tribal governments begin implementing sports betting in their jurisdictions. Nevada, having both the depth and experience with legalized, regulated sports wagering, serves as a leader to help guide us and other jurisdictions through this historical time.
As the regulators in different gambling jurisdictions, we have jointly concluded that the following simple guidelines will help with an initial approach to sports betting regulation. While we cannot personally commit our respective jurisdictions to any specific position or practice, we support all of these positions individually, will support them throughout our regulatory agencies, and will help provide guidance to other jurisdictions as to how these guidelines can be implemented.
1. Coordinated action among jurisdictions offering sports betting against illegal bookmaking, illegal gambling activities, and any unsuitable and unlawful associations, along with strong support from federal-level enforcement agencies, is the best way to eradicate illegal activities.
2. Another critical element of legalized sports betting is the establishment of structures and processes that will ensure a high level of integrity in all sports. Therefore, all of our jurisdictions and others that legalize and regulate sports wagering should aim to share real-time betting information, in an effort to detect, prevent, and eliminate match fixing.
3. Measures for responsible gambling in sports betting are important to help protect and maintain the credibility of the activity.
4. The history of legalized sports betting in both Nevada and the United Kingdom indicates that it is a very low-margin business compared to other forms of gambling. Reasonable tax rates and fees are essential for legal sports betting to be competitive until illegal providers can be eradicated.
5. Additional fees, including the so-called “integrity fee,” increase the costs of legal sports betting, siphon much needed tax revenues away from state coffers, and increase state regulatory burdens.
We encourage state legislatures that elect to legalize sports betting to consider these guidelines in order to promote a coherent regulatory environment.
We, as members of the U.S. State Gaming Regulators Forum, will look to immediately develop a Memorandum of Understanding between our jurisdictions to acknowledge support for implementation of these principles. We welcome other jurisdictions’ regulatory bodies sharing these values to join with us.
Becky Harris, Chairwoman, Nevada Gaming Control Board
Stephen P. Crosby, Chairman, Massachusetts Gaming Commission
Ronnie Jones, Chairman, Louisiana Gaming Control Board
Rick Kalm, Executive Director, Michigan Gaming Control Board
For further media inquiries, contact Jennifer Roberts, Associate Director of UNLV International Center for Gaming Regulation, at [email protected] or 702-895-2653.
Law.com provides copy of Complaint by Sandy Hook victims against conspiracy theorist Alex Jones
Law.com reports that trial lawyers from Bridgeport, Connecticut-based Koskoff Koskoff & Bieder filed suit Wednesday against media personality Alex Jones on behalf of an FBI agent and the families of six victims of the deadly Sandy Hook Elementary School shooting. The Complaint cites a campaign of inflammatory statements by Jones. Jones claims that the shooting was a fake. The Complaint says that:
“Time and again, Jones has accused Sandy Hook families, who are readily identifiable, of faking their loved ones’ deaths, and insisted that the children killed that day are actually alive.” The premise of the litigation is that the First Amendment does not protect such lies.
The Law.com article provides a copy of the Complaint
The Law.com article is at https://www.law.com/ctlawtribune/2018/05/23/connecticut-lawyers-sue-conspiracy-theorist-alex-jones-for-sandy-hook-families-fbi-agent/
Law.com reports that trial lawyers from Bridgeport, Connecticut-based Koskoff Koskoff & Bieder filed suit Wednesday against media personality Alex Jones on behalf of an FBI agent and the families of six victims of the deadly Sandy Hook Elementary School shooting. The Complaint cites a campaign of inflammatory statements by Jones. Jones claims that the shooting was a fake. The Complaint says that:
“Time and again, Jones has accused Sandy Hook families, who are readily identifiable, of faking their loved ones’ deaths, and insisted that the children killed that day are actually alive.” The premise of the litigation is that the First Amendment does not protect such lies.
The Law.com article provides a copy of the Complaint
The Law.com article is at https://www.law.com/ctlawtribune/2018/05/23/connecticut-lawyers-sue-conspiracy-theorist-alex-jones-for-sandy-hook-families-fbi-agent/
Court decision refusing to dismiss the NY AG's suit charged internet service provider Spectrum-TWC with false advertising of internet speeds
The decision is here: https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=dJY_PLUS_yretXYSY8msX1l3vXQ=='
A brief excerpt follows:
According to the complaint, Spectrum-TWC did not deliver the promised level of service (id., ¶¶ 75-76, 80-83, 178-241). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrum-TWC was responsible.
First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation modems they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ¶¶ 9, 76, 101-177) (the Modem Failures). These failures date back to early in the Covered Period, and intensified when Spectrum-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., 5 78). These failures were not resolved by the company's modem "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrum-TWC-provided modems (id., ¶¶ 121, 146, 151, 159).
Plaintiff alleges that, in fact, Spectrum-TWC knew that the modems it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ¶¶ 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ¶ 102).
Second, Spectrum-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., 55 178-200) (the Network Failures).
Plaintiff alleges that, although Spectrum-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ¶¶ 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrum-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ¶¶ 221-241) (the Wireless Failures). Plaintiff asserts that Spectrum-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrum-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrum-TWC to its subscribers for testing Internet speeds (Complaint, ¶¶ 196-213).
The decision is here: https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=dJY_PLUS_yretXYSY8msX1l3vXQ=='
A brief excerpt follows:
According to the complaint, Spectrum-TWC did not deliver the promised level of service (id., ¶¶ 75-76, 80-83, 178-241). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrum-TWC was responsible.
First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation modems they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ¶¶ 9, 76, 101-177) (the Modem Failures). These failures date back to early in the Covered Period, and intensified when Spectrum-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., 5 78). These failures were not resolved by the company's modem "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrum-TWC-provided modems (id., ¶¶ 121, 146, 151, 159).
Plaintiff alleges that, in fact, Spectrum-TWC knew that the modems it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ¶¶ 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ¶ 102).
Second, Spectrum-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., 55 178-200) (the Network Failures).
Plaintiff alleges that, although Spectrum-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ¶¶ 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrum-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ¶¶ 221-241) (the Wireless Failures). Plaintiff asserts that Spectrum-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrum-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrum-TWC to its subscribers for testing Internet speeds (Complaint, ¶¶ 196-213).
National Women’s Law Center announcement: launch of the TIME’S UP Legal Defense Fund.
From https://nwlc.org/times-up-legal-defense-fund/
The sexual harassment that has been reported in the last few months has been both horrific and illuminating. We stand with the brave individuals who have come forward, at great risk to themselves, to protect others from similar behavior.
The National Women’s Law Center is excited to announce the launch of the TIME’S UP Legal Defense Fund. The TIME’S UP Legal Defense Fund, which is housed at and administered by the National Women’s Law Center, connects those who experience sexual misconduct including assault, harassment, abuse and related retaliation in the workplace or in trying to advance their careers with legal and public relations assistance. The Fund will help defray legal and public relations costs in select cases based on criteria and availability of funds. Donations to the TIME’S UP Legal Defense Fund are tax deductible through the Direct Impact Fund, a 501(c)(3) nonprofit organization or through the National Women’s Law Center, a 501(c)(3) nonprofit organization. The initiative was spearheaded by actors and others in the entertainment industry, attorneys Tina Tchen and Roberta Kaplan, and top public relations professionals. Women in Hollywood came together around their own experience of harassment and assault, and were moved by the outpouring of support and solidarity against sexual harassment from women across sectors. This inspired them to help create a Fund to help survivors of sexual harassment and retaliation in all industries—especially low-income women and people of color. They worked together in an historic first to design a structure that would be both inclusive and effective. The Fund will be housed and administered by the National Women’s Law Center and the participating attorneys will be working with the Center’s Legal Network for Gender Equity. Access to prompt and comprehensive legal and communications help will empower individuals and help fuel long-term systemic change.
This Fund will enable more individuals to come forward and be connected with lawyers — regardless of industry, rank or role. Countless activists, celebrities, and other donors want to see an end to a culture that allows sexual harassment and retaliation of those who courageously step forward to go unpunished. This effort is not just to support women in Hollywood, but others in need – the factory worker, the waitress, the teacher, the office worker, and others subjected to this unacceptable behavior. Now is the time to finally stop the sexual harassment and retaliation that has often gone unchecked.
From https://nwlc.org/times-up-legal-defense-fund/
The sexual harassment that has been reported in the last few months has been both horrific and illuminating. We stand with the brave individuals who have come forward, at great risk to themselves, to protect others from similar behavior.
The National Women’s Law Center is excited to announce the launch of the TIME’S UP Legal Defense Fund. The TIME’S UP Legal Defense Fund, which is housed at and administered by the National Women’s Law Center, connects those who experience sexual misconduct including assault, harassment, abuse and related retaliation in the workplace or in trying to advance their careers with legal and public relations assistance. The Fund will help defray legal and public relations costs in select cases based on criteria and availability of funds. Donations to the TIME’S UP Legal Defense Fund are tax deductible through the Direct Impact Fund, a 501(c)(3) nonprofit organization or through the National Women’s Law Center, a 501(c)(3) nonprofit organization. The initiative was spearheaded by actors and others in the entertainment industry, attorneys Tina Tchen and Roberta Kaplan, and top public relations professionals. Women in Hollywood came together around their own experience of harassment and assault, and were moved by the outpouring of support and solidarity against sexual harassment from women across sectors. This inspired them to help create a Fund to help survivors of sexual harassment and retaliation in all industries—especially low-income women and people of color. They worked together in an historic first to design a structure that would be both inclusive and effective. The Fund will be housed and administered by the National Women’s Law Center and the participating attorneys will be working with the Center’s Legal Network for Gender Equity. Access to prompt and comprehensive legal and communications help will empower individuals and help fuel long-term systemic change.
This Fund will enable more individuals to come forward and be connected with lawyers — regardless of industry, rank or role. Countless activists, celebrities, and other donors want to see an end to a culture that allows sexual harassment and retaliation of those who courageously step forward to go unpunished. This effort is not just to support women in Hollywood, but others in need – the factory worker, the waitress, the teacher, the office worker, and others subjected to this unacceptable behavior. Now is the time to finally stop the sexual harassment and retaliation that has often gone unchecked.
The text of the US Supreme Court decision permitting workplace arbitration clauses precluding class actions:
https://www.supremecourt.gov/opinions/17pdf/16-285_q8l1.pdf
https://www.supremecourt.gov/opinions/17pdf/16-285_q8l1.pdf
Federal student loans to be made more expensive by Congress
Federal student loan rates are a few percent higher than benchmark rates like the interest rate on 10 year federal bonds. As those bond rates move up closer to 3%, student loan rates will go up in tandem. In addition, new "PROSPER" legislation in planned that -- surprise-- make student loans more expensive and students less prosperous. The legislation would eliminate variations among student loans and eliminate federal subsidies. The Forbes article, an excerpt of which appears below, provides more detail. -- DAR
From https://www.forbes.com/sites/andrewjosuweit/2018/01/17/student-loan-changes-you-need-to-know-for-2018-and-beyond/#11d9ebe6ba51 :
As we head into 2018, changes could be coming to student loans that could impact your borrowing beyond the coming year. Here’s what to watch out for:
Student Loan Rates Could Rise Again
In December, the Federal Reserve raised its Funds rate, and three rate hikes are expected in 2018. On top of that, the London Interbank Offered Rate (LIBOR), on which most private student loan interest rates are based, continues its rise. The LIBOR ended 2016 just under 1.00%, and as of December 15, 2017, the rate was at 1.61%.
Private student loans follow what’s happening with the Federal Reserve’s benchmark rate and LIBOR. On top of that, when setting federal student loan rates, members of Congress rely, in part, on what’s happening in the market and with 10-year Treasuries, which are also adding upward pressure on interest rates.
Even though they just raised rates for the 2017-18 academic year, there’s a possibility that our representatives will give them a bit of a further boost for 2018-2019. And, of course, continued increases in market rates means heftier interest rates on private student loans.
The Prosper Act Could Impact Student Loans In 2019 And Beyond
What you really have to watch for, though, is the passage of the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act.
Unlike many of the pieces of student loan legislation that often languish and die in committee, the PROSPER Act has a chance of being passed, thanks to the fact the bill also includes long-awaited reform of the Higher Education Act (HEA) of 1965, which hasn’t been reauthorized since 2008.
If not reauthorized, the HEA is automatically extended for a year. Work has been done on the issue, but nothing has managed to pass both the House of Representatives and the Senate in a decade. If the PROSPER Act does clear Congress in 2018 (as currently written), here are some of the changes you can expect to see, starting in 2019:
Taking The “Subsidized” Out Of Subsidized Federal Loans
Right now, the government pays the interest on some federal loans while borrowers are in school, during the grace period (usually the first six months after graduation), or during certain deferments. This program is based on need. However, if the PROSPER Act passes, no federal loans — no matter the need of the student — will be subsidized.
Federal student loan rates are a few percent higher than benchmark rates like the interest rate on 10 year federal bonds. As those bond rates move up closer to 3%, student loan rates will go up in tandem. In addition, new "PROSPER" legislation in planned that -- surprise-- make student loans more expensive and students less prosperous. The legislation would eliminate variations among student loans and eliminate federal subsidies. The Forbes article, an excerpt of which appears below, provides more detail. -- DAR
From https://www.forbes.com/sites/andrewjosuweit/2018/01/17/student-loan-changes-you-need-to-know-for-2018-and-beyond/#11d9ebe6ba51 :
As we head into 2018, changes could be coming to student loans that could impact your borrowing beyond the coming year. Here’s what to watch out for:
Student Loan Rates Could Rise Again
In December, the Federal Reserve raised its Funds rate, and three rate hikes are expected in 2018. On top of that, the London Interbank Offered Rate (LIBOR), on which most private student loan interest rates are based, continues its rise. The LIBOR ended 2016 just under 1.00%, and as of December 15, 2017, the rate was at 1.61%.
Private student loans follow what’s happening with the Federal Reserve’s benchmark rate and LIBOR. On top of that, when setting federal student loan rates, members of Congress rely, in part, on what’s happening in the market and with 10-year Treasuries, which are also adding upward pressure on interest rates.
Even though they just raised rates for the 2017-18 academic year, there’s a possibility that our representatives will give them a bit of a further boost for 2018-2019. And, of course, continued increases in market rates means heftier interest rates on private student loans.
The Prosper Act Could Impact Student Loans In 2019 And Beyond
What you really have to watch for, though, is the passage of the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act.
Unlike many of the pieces of student loan legislation that often languish and die in committee, the PROSPER Act has a chance of being passed, thanks to the fact the bill also includes long-awaited reform of the Higher Education Act (HEA) of 1965, which hasn’t been reauthorized since 2008.
If not reauthorized, the HEA is automatically extended for a year. Work has been done on the issue, but nothing has managed to pass both the House of Representatives and the Senate in a decade. If the PROSPER Act does clear Congress in 2018 (as currently written), here are some of the changes you can expect to see, starting in 2019:
Taking The “Subsidized” Out Of Subsidized Federal Loans
Right now, the government pays the interest on some federal loans while borrowers are in school, during the grace period (usually the first six months after graduation), or during certain deferments. This program is based on need. However, if the PROSPER Act passes, no federal loans — no matter the need of the student — will be subsidized.
A Catholic Church report discusses Credit Default Swaps -- as in "The Big Short"
The recent report from the Catholic Church is consistent with recent comments from the Pope: Banking is not necessarily immoral, but ethical standards are relevant. Government engagement is required to avoid ethical abuses. The Catholic Church report does not mention Barry Lynn, Tim Wu, or Simon Johnson by name, or explicitly refer to the book "The Big Short." But there is some similarity among them in opposing unregulated greed by financial industry people as a source of economic and social harm. DAR
Excerpt from “‘Oeconomicae et pecuniariae quaestiones’. Considerations for an ethical discernment regarding some aspects of the present economic-financial system” of the Congregation for the Doctrine of the Faith and the Dicastery for Promoting Integral Human Development, 17.05.2018,
found at http://press.vatican.va/content/salastampa/en/bollettino/pubblico/2018/05/17/180517a.html
26. Some financial products, among which the so called “derivatives”, are created for the purpose of guaranteeing an insurance on the inherent risks of certain operations often containing a gamble made on the basis of the presumed value attributed to those risks. At the foundation of such financial instruments lay contracts in which the parties are still able to reasonably evaluate the fundamental risk on which they want to insure.
However, in some types of derivatives (in the particular the so-called securitizations) it is noted that, starting with the original structures, and linked to identifiable financial investments, more and more complex structures were built (securitizations of securitizations) in which it is increasingly difficult, and after many of these transactions almost impossible, to stabilize in a reasonable and fair manner their fundamental value. This means that every passage in the trade of these shares, beyond the will of the parties, effects in fact a distortion of the actual value of the risk from that which the instrument must defend. All these have encouraged the rising of speculative bubbles, which have been the important contributive cause of the recent financial crisis.
It is obvious that the uncertainty surrounding these products, such as the steady decline of the transparency of that which is assured, still not appearing in the original operation, makes them continuously less acceptable from the perspective of ethics respectful of the truth and the common good, because it transforms them into a ticking time bomb ready sooner or later to explode, poisoning the health of the markets. It is noted that there is an ethical void which becomes more serious as these products are negotiated on the so-called markets with less regulation (over the counter) and are exposed more to the markets regulated by chance, if not by fraud, and thus take away vital life-lines and investments to the real economy.
A similar ethical assessment can be also applied for those uses of credit default swap (CDS: they are particular insurance contracts for the risk of bankruptcy) that permit gambling at the risk of the bankruptcy of a third party, even to those who haven’t taken any such risk of credit earlier, and really to repeat such operations on the same event, which is absolutely not consented to by the normal pact or insurance.
The market of CDS, in the wake of the economic crisis of 2007, was imposing enough to represent almost the equivalent of the GDP of the entire world. The spread of such a kind of contract without proper limits has encouraged the growth of a finance of chance, and of gambling on the failure of others, which is unacceptable from the ethical point of view.
In fact, the process of acquiring these instruments, by those who do not have any risk of credit already in existence, creates a unique case in which persons start to nurture interests for the ruin of other economic entities, and can even resolve themselves to do so.
It is evident that such a possibility, if, on the one hand, shapes an event particularly deplorable from the moral perspective, because the one who acts does so in view of a kind of economic cannibalism, and, on the other hand, ends up undermining that necessary basic trust without which the economic system would end up blocking itself. In this case, also, we can notice how a negative event, from the ethical point of view, also harms the healthy functioning of the economic system.
Therefore, it must be noted, that when from such gambling can derive enormous damage for entire nations and millions of families, we are faced with extremely immoral actions, it seems necessary to extend deterrents, already present in some nations, for such types of operations, sanctioning the infractions with maximum severity.
The recent report from the Catholic Church is consistent with recent comments from the Pope: Banking is not necessarily immoral, but ethical standards are relevant. Government engagement is required to avoid ethical abuses. The Catholic Church report does not mention Barry Lynn, Tim Wu, or Simon Johnson by name, or explicitly refer to the book "The Big Short." But there is some similarity among them in opposing unregulated greed by financial industry people as a source of economic and social harm. DAR
Excerpt from “‘Oeconomicae et pecuniariae quaestiones’. Considerations for an ethical discernment regarding some aspects of the present economic-financial system” of the Congregation for the Doctrine of the Faith and the Dicastery for Promoting Integral Human Development, 17.05.2018,
found at http://press.vatican.va/content/salastampa/en/bollettino/pubblico/2018/05/17/180517a.html
26. Some financial products, among which the so called “derivatives”, are created for the purpose of guaranteeing an insurance on the inherent risks of certain operations often containing a gamble made on the basis of the presumed value attributed to those risks. At the foundation of such financial instruments lay contracts in which the parties are still able to reasonably evaluate the fundamental risk on which they want to insure.
However, in some types of derivatives (in the particular the so-called securitizations) it is noted that, starting with the original structures, and linked to identifiable financial investments, more and more complex structures were built (securitizations of securitizations) in which it is increasingly difficult, and after many of these transactions almost impossible, to stabilize in a reasonable and fair manner their fundamental value. This means that every passage in the trade of these shares, beyond the will of the parties, effects in fact a distortion of the actual value of the risk from that which the instrument must defend. All these have encouraged the rising of speculative bubbles, which have been the important contributive cause of the recent financial crisis.
It is obvious that the uncertainty surrounding these products, such as the steady decline of the transparency of that which is assured, still not appearing in the original operation, makes them continuously less acceptable from the perspective of ethics respectful of the truth and the common good, because it transforms them into a ticking time bomb ready sooner or later to explode, poisoning the health of the markets. It is noted that there is an ethical void which becomes more serious as these products are negotiated on the so-called markets with less regulation (over the counter) and are exposed more to the markets regulated by chance, if not by fraud, and thus take away vital life-lines and investments to the real economy.
A similar ethical assessment can be also applied for those uses of credit default swap (CDS: they are particular insurance contracts for the risk of bankruptcy) that permit gambling at the risk of the bankruptcy of a third party, even to those who haven’t taken any such risk of credit earlier, and really to repeat such operations on the same event, which is absolutely not consented to by the normal pact or insurance.
The market of CDS, in the wake of the economic crisis of 2007, was imposing enough to represent almost the equivalent of the GDP of the entire world. The spread of such a kind of contract without proper limits has encouraged the growth of a finance of chance, and of gambling on the failure of others, which is unacceptable from the ethical point of view.
In fact, the process of acquiring these instruments, by those who do not have any risk of credit already in existence, creates a unique case in which persons start to nurture interests for the ruin of other economic entities, and can even resolve themselves to do so.
It is evident that such a possibility, if, on the one hand, shapes an event particularly deplorable from the moral perspective, because the one who acts does so in view of a kind of economic cannibalism, and, on the other hand, ends up undermining that necessary basic trust without which the economic system would end up blocking itself. In this case, also, we can notice how a negative event, from the ethical point of view, also harms the healthy functioning of the economic system.
Therefore, it must be noted, that when from such gambling can derive enormous damage for entire nations and millions of families, we are faced with extremely immoral actions, it seems necessary to extend deterrents, already present in some nations, for such types of operations, sanctioning the infractions with maximum severity.
Uber press release: No more forced arbitration in sexual misconduct cases
Perhaps the most offensive use of forced arbitration and confidentiality requirements involves sexual misconduct actions. Uber has responded to public campaigns on these topics by changing its announced policies. DAR
Excerpt:
First, we will no longer require mandatory arbitration for individual claims of sexual assault or sexual harassment by Uber riders, drivers or employees.
Arbitration has an important role in the American justice system and includes many benefits for individuals and companies alike. Arbitration is not a settlement (cases are decided on their merits), and, unless the parties agree to keep the process confidential, it does not prevent survivors from speaking out about their experience.
But we have learned it’s important to give sexual assault and harassment survivors control of how they pursue their claims. So moving forward, survivors will be free to choose to resolve their individual claims in the venue they prefer: in a mediation where they can choose confidentiality; in arbitration, where they can choose to maintain their privacy while pursuing their case; or in open court. Whatever they decide, they will be free to tell their story wherever and however they see fit.
Second, survivors will now have the option to settle their claims with Uber without a confidentiality provision that prevents them from speaking about the facts of the sexual assault or sexual harassment they suffered.
Confidentiality provisions in settlement agreements also have an appropriate role in resolving legal disputes. Often they help expedite resolution because they give both sides comfort that certain information (such as the settlement amount) will remain confidential. And frequently, survivors insist on broad confidentiality in order to preserve their privacy.
But divulging the details of what happened in a sexual assault or harassment should be up to the survivor, not us. So we’re making it clear that Uber will not require confidentiality provisions or non-disclosure agreements to prevent survivors from talking about the facts of what happened to them. Whether to find closure, seek treatment, or become advocates for change themselves, survivors will be in control of whether to share their stories. Enabling survivors to make this choice will help to end the culture of silence that surrounds sexual violence.
Third, we commit to publishing a safety transparency report that will include data on sexual assaults and other incidents that occur on the Uber platform.
We believe transparency fosters accountability. But truthfully, this was a decision we struggled to make, in part because data on safety and sexual assaults is sparse and inconsistent. In fact, there is no data to reliably or accurately compare reports against Uber drivers versus taxi drivers or limo drivers, or Uber versus buses, subways, airplanes or trains. And when it comes to categorizing this data for public release, no uniform industry standard for reporting exists today.
Making things even more complicated, sexual assault is a vastly underreported crime, with two out of three assaults going unreported to police.
But we decided we can’t let all of that hold us back. That’s why we’ve met more than 80 women’s groups and recruited advisors like Ebony Tucker of the National Alliance to End Sexual Violence, Cindy Southworth of the National Network to End Domestic Violence and Tina Tchen, one of the founders of the Time’s Up Legal Defense Fund and partner at Buckley Sandler LLP to advise us on these issues.
We’re working with experts in the field to develop a taxonomy to categorize the incidents that are reported to us. We hope to open-source this methodology so we can encourage others in the ridesharing, transportation and travel industries, both private and public, to join us in taking this step. We know that a project of this magnitude will take some time, but we pledge to keep you updated along the way.
Dara recently said that sexual predators often look for a dark corner. Our message to the world is that we need to turn the lights on. It starts with improving our product and policies, but it requires so much more, and we’re in it for the long haul. Together, we can make meaningful progress towards ending sexual violence. Our commitment to you is that when we say we stand for safety, we mean it.
Press release at https://www.uber.com/newsroom/turning-the-lights-on/
Perhaps the most offensive use of forced arbitration and confidentiality requirements involves sexual misconduct actions. Uber has responded to public campaigns on these topics by changing its announced policies. DAR
Excerpt:
First, we will no longer require mandatory arbitration for individual claims of sexual assault or sexual harassment by Uber riders, drivers or employees.
Arbitration has an important role in the American justice system and includes many benefits for individuals and companies alike. Arbitration is not a settlement (cases are decided on their merits), and, unless the parties agree to keep the process confidential, it does not prevent survivors from speaking out about their experience.
But we have learned it’s important to give sexual assault and harassment survivors control of how they pursue their claims. So moving forward, survivors will be free to choose to resolve their individual claims in the venue they prefer: in a mediation where they can choose confidentiality; in arbitration, where they can choose to maintain their privacy while pursuing their case; or in open court. Whatever they decide, they will be free to tell their story wherever and however they see fit.
Second, survivors will now have the option to settle their claims with Uber without a confidentiality provision that prevents them from speaking about the facts of the sexual assault or sexual harassment they suffered.
Confidentiality provisions in settlement agreements also have an appropriate role in resolving legal disputes. Often they help expedite resolution because they give both sides comfort that certain information (such as the settlement amount) will remain confidential. And frequently, survivors insist on broad confidentiality in order to preserve their privacy.
But divulging the details of what happened in a sexual assault or harassment should be up to the survivor, not us. So we’re making it clear that Uber will not require confidentiality provisions or non-disclosure agreements to prevent survivors from talking about the facts of what happened to them. Whether to find closure, seek treatment, or become advocates for change themselves, survivors will be in control of whether to share their stories. Enabling survivors to make this choice will help to end the culture of silence that surrounds sexual violence.
Third, we commit to publishing a safety transparency report that will include data on sexual assaults and other incidents that occur on the Uber platform.
We believe transparency fosters accountability. But truthfully, this was a decision we struggled to make, in part because data on safety and sexual assaults is sparse and inconsistent. In fact, there is no data to reliably or accurately compare reports against Uber drivers versus taxi drivers or limo drivers, or Uber versus buses, subways, airplanes or trains. And when it comes to categorizing this data for public release, no uniform industry standard for reporting exists today.
Making things even more complicated, sexual assault is a vastly underreported crime, with two out of three assaults going unreported to police.
But we decided we can’t let all of that hold us back. That’s why we’ve met more than 80 women’s groups and recruited advisors like Ebony Tucker of the National Alliance to End Sexual Violence, Cindy Southworth of the National Network to End Domestic Violence and Tina Tchen, one of the founders of the Time’s Up Legal Defense Fund and partner at Buckley Sandler LLP to advise us on these issues.
We’re working with experts in the field to develop a taxonomy to categorize the incidents that are reported to us. We hope to open-source this methodology so we can encourage others in the ridesharing, transportation and travel industries, both private and public, to join us in taking this step. We know that a project of this magnitude will take some time, but we pledge to keep you updated along the way.
Dara recently said that sexual predators often look for a dark corner. Our message to the world is that we need to turn the lights on. It starts with improving our product and policies, but it requires so much more, and we’re in it for the long haul. Together, we can make meaningful progress towards ending sexual violence. Our commitment to you is that when we say we stand for safety, we mean it.
Press release at https://www.uber.com/newsroom/turning-the-lights-on/
There there are just two relevant smartphone platforms left .
Devices running Android (85.9%) and iOS (14%) accounted for 99.9% of global smartphone sales to end users in 2017, according to market research firm Gartner. All other platforms, including former market leaders BlackBerry and Microsoft’s Windows Phone have been rendered completely irrelevant.See https://www.gartner.com/newsroom/id/3859963 (table 3)
Does that lack of competition raise competition/antitrust concerns? Of course. -- DAR
Devices running Android (85.9%) and iOS (14%) accounted for 99.9% of global smartphone sales to end users in 2017, according to market research firm Gartner. All other platforms, including former market leaders BlackBerry and Microsoft’s Windows Phone have been rendered completely irrelevant.See https://www.gartner.com/newsroom/id/3859963 (table 3)
Does that lack of competition raise competition/antitrust concerns? Of course. -- DAR
Internet connect speeds much slower than your carrier promised? Maybe your State AG can help: NY AG v. Charter Communications
NY's State AG sued carrier Charter Communications for failing to deliver promised internet communication speeds. In a recent slip opinion the Court allowed the suit to go forward. Here is an excerpt from the opinion:
Spectrum-TWC advertised specific Internet speeds, available in tiers ranging from 20 to 300 megabits per second (Mbps), and promised its subscribers that it would deliver such speeds in exchange for a fee, with higher fees for faster-speed tiers (id., ~~ 79-84). Spectrum-TWC assured subscribers not only that they could achieve the advertised speeds, but that subscribers were guaranteed "reliable Internet speeds," delivered "consistently," "without slowdowns," and otherwise without interruption (id., ~ ~ 83, 85-86). Spectrum-TWC assured subscribers that the promised speeds would be delivered anywhere in their homes, at any time, and on any number of devices, regardless of whether the subscriber connected by wire or wirelessly (see id.,~~ 74, 83, 89, 94-95)
According to the complaint, Spectrurn-TWC did not deliver the promised level of service (id., ,.rn 75-76, 80-83, 178-241 ). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrurn-TWC was responsible. First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation moderns they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ,-r ,-r 9, 76, 101-177) (the Modern Failures). These failures date back to early in the Covered Period, and intensified when Spectrurn-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., ,-r 78). These failures were not resolved by the company's modern "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrurn-TWC-provided moderns (id., ,-r ,-r 121, 146, 151, 159). Plaintiff alleges that, in fact, Spectrurn-TWC knew that the moderns it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ,-r,-r 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ,-r 102).
Second, Spectrurn-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., ,-r,-r 178-200) (the Network Failures). Plaintiff alleges that, although Spectrurn-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ,-r,-r 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrurn-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ,-r,-r 221-241) (the Wireless Failures).
Plaintiff asserts that Spectrurn-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrurn-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrurn-TWC to its subscribers for testing Internet speeds (Complaint, ,-r,-r 196-213).
The slip opinion is here: https://cases.justia.com/new-york/other-courts/2018-2018-ny-slip-op-30253-u.pdf?ts=1519251428
The NY AG initial pleading is here: https://ag.ny.gov/sites/default/files/summons_and_complaint.pdf
NY's State AG sued carrier Charter Communications for failing to deliver promised internet communication speeds. In a recent slip opinion the Court allowed the suit to go forward. Here is an excerpt from the opinion:
Spectrum-TWC advertised specific Internet speeds, available in tiers ranging from 20 to 300 megabits per second (Mbps), and promised its subscribers that it would deliver such speeds in exchange for a fee, with higher fees for faster-speed tiers (id., ~~ 79-84). Spectrum-TWC assured subscribers not only that they could achieve the advertised speeds, but that subscribers were guaranteed "reliable Internet speeds," delivered "consistently," "without slowdowns," and otherwise without interruption (id., ~ ~ 83, 85-86). Spectrum-TWC assured subscribers that the promised speeds would be delivered anywhere in their homes, at any time, and on any number of devices, regardless of whether the subscriber connected by wire or wirelessly (see id.,~~ 74, 83, 89, 94-95)
According to the complaint, Spectrurn-TWC did not deliver the promised level of service (id., ,.rn 75-76, 80-83, 178-241 ). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrurn-TWC was responsible. First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation moderns they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ,-r ,-r 9, 76, 101-177) (the Modern Failures). These failures date back to early in the Covered Period, and intensified when Spectrurn-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., ,-r 78). These failures were not resolved by the company's modern "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrurn-TWC-provided moderns (id., ,-r ,-r 121, 146, 151, 159). Plaintiff alleges that, in fact, Spectrurn-TWC knew that the moderns it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ,-r,-r 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ,-r 102).
Second, Spectrurn-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., ,-r,-r 178-200) (the Network Failures). Plaintiff alleges that, although Spectrurn-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ,-r,-r 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrurn-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ,-r,-r 221-241) (the Wireless Failures).
Plaintiff asserts that Spectrurn-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrurn-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrurn-TWC to its subscribers for testing Internet speeds (Complaint, ,-r,-r 196-213).
The slip opinion is here: https://cases.justia.com/new-york/other-courts/2018-2018-ny-slip-op-30253-u.pdf?ts=1519251428
The NY AG initial pleading is here: https://ag.ny.gov/sites/default/files/summons_and_complaint.pdf
Washington, DC has one of the highest per capita 911 calls for Emergency Medical Services (EMS) in the country, but a new program hopes to change that.
On April 19th, Washington, DC's EMS Department rolled out a new pilot program for handling non-emergency 911 calls. The goal of this program is to alleviate emergency room crowding and improve patient care. The “Right Care, Right Now” program will filter out non-emergency calls by redirecting them to a nurse triage line to assess the caller's symptoms. The hope is that the program will decrease the burden on the Emergency Medical system and reduce some of the overcrowding in local emergency rooms. This approach was adopted from some other jurisdictions' attempts to deal with the problem of how to handle non-emergency calls.
The medical director for Washington, DC EMS' system, Dr. Holman, explained, “About 25-percent of callers turn out to have lower acuity calls which could be better handled in an outpatient setting rather than an emergency department.” The nurse triage line will be tested for six months and is expected to route to a nurse 64 out of an estimated 500 emergency calls received daily.
DC Fire & EMS Chief Gregory Dean said that some non-emergency Medicaid callers will have appointments made for them at a clinic for treatment and would also be eligible for round-trip Lyft transportation in non-life-threatening situations.
The District has high hopes that the pilot program will work to improve care across the board, though some are skeptical of this new process as it is sometimes difficult to detect an emergency situation over the phone.
See https://www.washingtonpost.com/local/public-safety/nurses-will-be-in-dcs-911-center-in-latest-attempt-to-cut-emergency-call-volume/2018/04/18/6b40764c-4288-11e8-8569-26fda6b404c7_story.html?noredirect=on
On April 19th, Washington, DC's EMS Department rolled out a new pilot program for handling non-emergency 911 calls. The goal of this program is to alleviate emergency room crowding and improve patient care. The “Right Care, Right Now” program will filter out non-emergency calls by redirecting them to a nurse triage line to assess the caller's symptoms. The hope is that the program will decrease the burden on the Emergency Medical system and reduce some of the overcrowding in local emergency rooms. This approach was adopted from some other jurisdictions' attempts to deal with the problem of how to handle non-emergency calls.
The medical director for Washington, DC EMS' system, Dr. Holman, explained, “About 25-percent of callers turn out to have lower acuity calls which could be better handled in an outpatient setting rather than an emergency department.” The nurse triage line will be tested for six months and is expected to route to a nurse 64 out of an estimated 500 emergency calls received daily.
DC Fire & EMS Chief Gregory Dean said that some non-emergency Medicaid callers will have appointments made for them at a clinic for treatment and would also be eligible for round-trip Lyft transportation in non-life-threatening situations.
The District has high hopes that the pilot program will work to improve care across the board, though some are skeptical of this new process as it is sometimes difficult to detect an emergency situation over the phone.
See https://www.washingtonpost.com/local/public-safety/nurses-will-be-in-dcs-911-center-in-latest-attempt-to-cut-emergency-call-volume/2018/04/18/6b40764c-4288-11e8-8569-26fda6b404c7_story.html?noredirect=on
NY Times pickup of lack of zoning restrictions in Hawaii lava flow risk areas: There have been three lava flows in the Leilani Estates area since 1790.
From the NYT article:
The most recent eruption near the Leilani Estates area was in 1955, before subdivisions were built in the area. The volcano had long been dormant, until its eruption forced villagers in the area to flee.
Lava flow after1790 eruption: [graphic showing lava flows in Leilani Estates area omitted]: 1840, 1955, 2018
Source: Historic lava flows from the United States Geological Survey | Note: Lava areas for 2018 are through May 10
The construction of Leilani Estates was approved in 1960, according to Daryn Arai, deputy planning director at the Hawaii County Planning Department, and about 1,600 people live in the neighborhood today. It’s a rural neighborhood that has offered relatively affordable homes, in contrast with Hawaii’s more expensive real estate on Oahu and Maui.
Despite the neighborhood’s position in an area where lava flows are most likely to occur on the island, there are no building restrictions, Mr. Arai said.
https://www.nytimes.com/interactive/2018/05/12/us/kilauea-volcano-lava-leilani-estates-hawaii.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region®ion=top-news&WT.nav=top-news
From the NYT article:
The most recent eruption near the Leilani Estates area was in 1955, before subdivisions were built in the area. The volcano had long been dormant, until its eruption forced villagers in the area to flee.
Lava flow after1790 eruption: [graphic showing lava flows in Leilani Estates area omitted]: 1840, 1955, 2018
Source: Historic lava flows from the United States Geological Survey | Note: Lava areas for 2018 are through May 10
The construction of Leilani Estates was approved in 1960, according to Daryn Arai, deputy planning director at the Hawaii County Planning Department, and about 1,600 people live in the neighborhood today. It’s a rural neighborhood that has offered relatively affordable homes, in contrast with Hawaii’s more expensive real estate on Oahu and Maui.
Despite the neighborhood’s position in an area where lava flows are most likely to occur on the island, there are no building restrictions, Mr. Arai said.
https://www.nytimes.com/interactive/2018/05/12/us/kilauea-volcano-lava-leilani-estates-hawaii.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region®ion=top-news&WT.nav=top-news
Does Microsoft resist product repairs in order to promote product replacements that boost its sales?
Microsoft faces questions about how it handled the case of Eric Lundgren, facing 15 months in prison for duplicating freely available MS Windows restore software.
U.S. PIRG and iFixit noted the tough environment for repair and Microsoft’s role in other repair disputes, and called for Microsoft to come to the table to move repair forward.
Los Angeles – Microsoft is facing widespread criticism for the way it handled a dispute with recycling entrepreneur Eric Lundgren. Among the criticisms are that the company presented misleading testimony about the function of the software in question to increase the penalties—which is provided for free and can only be used to repair a computer with a valid Windows license. Microsoft’s testimony was the basis for the sentence.
The U.S. Public Interest Research Group (U.S. PIRG), a national advocacy organization which works to cut waste and advocate for repair, and iFixit, the world’s leading online repair manual, spoke out, noting other issues around with repair with Microsoft and other large tech companies, and calling for Microsoft to meet with advocates and discuss how repair can continue to move forward.
“Electronic waste is a rapidly growing problem and by far the best solution we have is repair and reuse,” said Nathan Proctor, Director of U.S. PIRG’s Right to Repair campaign. “Repair saves people money, extends the life of electronics and keep things off the scrap heap. Some 70 percent of the toxic waste produced now is electronic waste. But we face significant barriers to repair from a wide-range of large manufacturing companies, and that adds to how much waste we produce. Microsoft has a role to play in coming up with solutions, as one of the leading tech companies in the world.”
“I have a lot of friends at Microsoft, and know many people who have put in significant effort regarding their environmental record, but this was a setback,” said Kyle Wiens, CEO of iFixit.com. “We tried to broker a peace before this got out of hand. I like Microsoft and have a lot of respect for Satya Nadella, but their actions in this case were very discouraging. Across the board, recyclers are innovative and resourceful people who find that they can make more money repurposing hardware than shredding it. But they frequently run headlong into copyright issues. I’ve never seen tactics like those used by Microsoft in this case.”
The case against Mr. Lundgren is not the only example of Microsoft resisting repair. Microsoft lobbies against “Right to Repair” reforms which would give consumers and independent businesses access to tools, parts, manuals and diagnostics needed for repair.
Through the Entertainment Software Association, Microsoft and other gaming companies argue against changes to federal Copyright law to protect repair and address barriers to repair. And while some of their products are designed for serviceability, their Surface line is notorious for being almost impossible to repair.
The Surface’s glued-in battery design is so egregious that consumer protection legislators in Microsoft’s home state of Washington have discussed banning the practice altogether. iFixit recently awarded the Surface Laptop their lowest serviceability score ever, a 0 out of 10, for its completely unrepairable (and likely unrecyclable) design that both glues and welds the battery into the frame.
Furthermore, Microsoft has been one of the biggest offenders using illegal void if removed warranty stickers to prevent consumer repair. They were one of six companies that received letters from the FTC last month warning them to change the language in their warranties. Failure to comply could win them charges for “unfair or deceptive acts”.
“Companies have gotten too aggressive at pushing us to throw things away and buy new things. What we should be doing instead is reusing more, repairing more, and recycling the rest — ideas that Eric Lundgren has been pioneering,” added Proctor. “Microsoft has a chance to show they can be part of the solution, but they need to step up.”
“We welcome the chance to meet with Microsoft,” added Wiens.
U.S. PIRG has launched a petition calling for Microsoft to apologize and pledge to work with repair advocates moving forward.
From: https://ifixit.org/blog/10010/microsoft-eric-lundgren/
Microsoft faces questions about how it handled the case of Eric Lundgren, facing 15 months in prison for duplicating freely available MS Windows restore software.
U.S. PIRG and iFixit noted the tough environment for repair and Microsoft’s role in other repair disputes, and called for Microsoft to come to the table to move repair forward.
Los Angeles – Microsoft is facing widespread criticism for the way it handled a dispute with recycling entrepreneur Eric Lundgren. Among the criticisms are that the company presented misleading testimony about the function of the software in question to increase the penalties—which is provided for free and can only be used to repair a computer with a valid Windows license. Microsoft’s testimony was the basis for the sentence.
The U.S. Public Interest Research Group (U.S. PIRG), a national advocacy organization which works to cut waste and advocate for repair, and iFixit, the world’s leading online repair manual, spoke out, noting other issues around with repair with Microsoft and other large tech companies, and calling for Microsoft to meet with advocates and discuss how repair can continue to move forward.
“Electronic waste is a rapidly growing problem and by far the best solution we have is repair and reuse,” said Nathan Proctor, Director of U.S. PIRG’s Right to Repair campaign. “Repair saves people money, extends the life of electronics and keep things off the scrap heap. Some 70 percent of the toxic waste produced now is electronic waste. But we face significant barriers to repair from a wide-range of large manufacturing companies, and that adds to how much waste we produce. Microsoft has a role to play in coming up with solutions, as one of the leading tech companies in the world.”
“I have a lot of friends at Microsoft, and know many people who have put in significant effort regarding their environmental record, but this was a setback,” said Kyle Wiens, CEO of iFixit.com. “We tried to broker a peace before this got out of hand. I like Microsoft and have a lot of respect for Satya Nadella, but their actions in this case were very discouraging. Across the board, recyclers are innovative and resourceful people who find that they can make more money repurposing hardware than shredding it. But they frequently run headlong into copyright issues. I’ve never seen tactics like those used by Microsoft in this case.”
The case against Mr. Lundgren is not the only example of Microsoft resisting repair. Microsoft lobbies against “Right to Repair” reforms which would give consumers and independent businesses access to tools, parts, manuals and diagnostics needed for repair.
Through the Entertainment Software Association, Microsoft and other gaming companies argue against changes to federal Copyright law to protect repair and address barriers to repair. And while some of their products are designed for serviceability, their Surface line is notorious for being almost impossible to repair.
The Surface’s glued-in battery design is so egregious that consumer protection legislators in Microsoft’s home state of Washington have discussed banning the practice altogether. iFixit recently awarded the Surface Laptop their lowest serviceability score ever, a 0 out of 10, for its completely unrepairable (and likely unrecyclable) design that both glues and welds the battery into the frame.
Furthermore, Microsoft has been one of the biggest offenders using illegal void if removed warranty stickers to prevent consumer repair. They were one of six companies that received letters from the FTC last month warning them to change the language in their warranties. Failure to comply could win them charges for “unfair or deceptive acts”.
“Companies have gotten too aggressive at pushing us to throw things away and buy new things. What we should be doing instead is reusing more, repairing more, and recycling the rest — ideas that Eric Lundgren has been pioneering,” added Proctor. “Microsoft has a chance to show they can be part of the solution, but they need to step up.”
“We welcome the chance to meet with Microsoft,” added Wiens.
U.S. PIRG has launched a petition calling for Microsoft to apologize and pledge to work with repair advocates moving forward.
From: https://ifixit.org/blog/10010/microsoft-eric-lundgren/
The District of Columbia prevailed before the DC Court of Appeals in its case against ExxonMobil, Capitol Petroleum Group, et al.; In February, 2018 the Court docket shows "Filed Stipulation To Dismiss Appeal and withdrawal of petition for rehearing en banc (Appellee Exxonmobil Oil Corporation)"
Excerpts from the Court's docket:
11/09/2016 Filed Argued before Associate Judge Thompson, Associate Judge Easterly, and Senior Judge Reid. (Catherine A. Jackson, Esq. for appellant District of Columbia) (Alphonse M. Alfano, Esq. for appellee Capitol Petroleum Group LLC, Anacostia Reality LLC, Springfield Petroleum Realty LLC) (Robert M. Loeb, Esq. for appellee Exxonmobil Oil Corporation, et al)
11/02/2017 Filed Reversed And Remanded by OPINION
11/13/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc. (Appellee Exxonmobil Oil Corporation)
.
11/15/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)Granted
11/21/2017 Filed Order Granting Appellees's Motion For Extension Of Time to File petition for rehearing en banc to November 30, 2017. (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)
11/30/2017 Filed Petition For Rehearing En Banc (Appellee Exxonmobil Oil Corporation)
12/21/2017 Filed ORDERED that appellant, within 14 days from the date of this order, shall file a response thereto.
01/04/2018 Filed Motion For Extension Of Time to File response to the petition for rehearing en banc (Appellant)Granted
01/18/2018 Filed Motion For Extension Of Time to File Response to petition for rehearing en banc. (Appellant)Granted
01/26/2018 Filed Order Granting Appellant's Motions For Extensions Of Time to File a Response to appellees' petition for rehearing en banc to February 20, 2018.
02/14/2018 Filed Stipulation To Dismiss Appeal and withdrawal of petition for rehearing en banc (Appellee Exxonmobil Oil Corporation)
* * * *
Following is some explanatory language from the Appellate Court's opinion:
According to the District — and this is the gravamen of its complaint — “[t]he dealer franchise agreements, and later versions of these agreements” unlawfully “compel the independent retail dealers operating these stations to buy their Exxon-branded gasoline exclusively from – and at prices set by” Anacostia or Springfield or CPG. The complaint further alleges that Exxon continues to enforce the unlawful exclusive-supply requirement through its distribution agreements with Anacostia and Springfield, which “allow only one supplier to supply [Exxon-branded] gasoline to each Exxon-branded gasoline station in D.C.” As a result of the dealer-franchise and distribution agreements, the complaint alleges, the defendants/appellees “set the wholesale price[ ] paid for Exxon-branded gasoline in D.C.,” depriving retail dealers who sell Exxon-branded gasoline and “many thousands of consumers in D.C.” who purchase Exxon-branded gasoline in D.C. of “the benefits of competition in the wholesale supply of Exxon-branded gasoline.” The complaint asserts that independent retail Exxon stations cannot “purchase Exxon-branded gasoline at prices below the prices charged by” the Distributors. The complaint further asserts that of the thirty-one Exxon-branded gasoline stations in the District, all of which are owned by Anacostia or Springfield, twenty-seven are operated by independent retail dealer franchisees, all of which are subject to and restricted by the allegedly unlawful dealer-franchise and distribution agreements. According to the complaint, these independent franchisee-operated retail stations comprise about 25% of the gasoline stations in the District.
The complaint charges that the dealer-franchise agreements between the Distributors and independent retail service stations and the distribution agreements between Exxon and the Distributors (all of which the District asserts constitute “marketing agreements” as that term is defined in the RSSA) violate two provisions of Subchapter III of the RSSA: D.C. Code § 36-303.01 (a)(6) and (11). D.C. Code § 36-303.01 (a)(6) states that:
[No marketing agreement shall ․] [p]rohibit a retail dealer from purchasing or accepting delivery of, on consignment or otherwise, any motor fuels, petroleum products, automotive products, or other products from any person who is not a party to the marketing agreement or prohibit a retail dealer from selling such motor fuels or products, provided that if the marketing agreement permits the retail dealer to use the distributor's trademark, the marketing agreement may require such motor fuels, petroleum products, and automotive products to be of a reasonably similar quality to those of the distributor, and provided further that the retail dealer shall neither represent such motor fuels or products as having been procured from the distributor nor sell such motor fuels or products under the distributor's trademark[.]
D.C. Code § 36-303.01 (a)(11) states that “no marketing agreement shall” “[c]ontain any term or condition which, directly or indirectly, violates this subchapter.” The complaint asks for a declaration that defendants'/appellees' marketing agreements violate these provisions of District of Columbia law and for an injunction prohibiting enforcement of the agreements.
Excerpts from the Court's docket:
11/09/2016 Filed Argued before Associate Judge Thompson, Associate Judge Easterly, and Senior Judge Reid. (Catherine A. Jackson, Esq. for appellant District of Columbia) (Alphonse M. Alfano, Esq. for appellee Capitol Petroleum Group LLC, Anacostia Reality LLC, Springfield Petroleum Realty LLC) (Robert M. Loeb, Esq. for appellee Exxonmobil Oil Corporation, et al)
11/02/2017 Filed Reversed And Remanded by OPINION
11/13/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc. (Appellee Exxonmobil Oil Corporation)
.
11/15/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)Granted
11/21/2017 Filed Order Granting Appellees's Motion For Extension Of Time to File petition for rehearing en banc to November 30, 2017. (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)
11/30/2017 Filed Petition For Rehearing En Banc (Appellee Exxonmobil Oil Corporation)
12/21/2017 Filed ORDERED that appellant, within 14 days from the date of this order, shall file a response thereto.
01/04/2018 Filed Motion For Extension Of Time to File response to the petition for rehearing en banc (Appellant)Granted
01/18/2018 Filed Motion For Extension Of Time to File Response to petition for rehearing en banc. (Appellant)Granted
01/26/2018 Filed Order Granting Appellant's Motions For Extensions Of Time to File a Response to appellees' petition for rehearing en banc to February 20, 2018.
02/14/2018 Filed Stipulation To Dismiss Appeal and withdrawal of petition for rehearing en banc (Appellee Exxonmobil Oil Corporation)
* * * *
Following is some explanatory language from the Appellate Court's opinion:
According to the District — and this is the gravamen of its complaint — “[t]he dealer franchise agreements, and later versions of these agreements” unlawfully “compel the independent retail dealers operating these stations to buy their Exxon-branded gasoline exclusively from – and at prices set by” Anacostia or Springfield or CPG. The complaint further alleges that Exxon continues to enforce the unlawful exclusive-supply requirement through its distribution agreements with Anacostia and Springfield, which “allow only one supplier to supply [Exxon-branded] gasoline to each Exxon-branded gasoline station in D.C.” As a result of the dealer-franchise and distribution agreements, the complaint alleges, the defendants/appellees “set the wholesale price[ ] paid for Exxon-branded gasoline in D.C.,” depriving retail dealers who sell Exxon-branded gasoline and “many thousands of consumers in D.C.” who purchase Exxon-branded gasoline in D.C. of “the benefits of competition in the wholesale supply of Exxon-branded gasoline.” The complaint asserts that independent retail Exxon stations cannot “purchase Exxon-branded gasoline at prices below the prices charged by” the Distributors. The complaint further asserts that of the thirty-one Exxon-branded gasoline stations in the District, all of which are owned by Anacostia or Springfield, twenty-seven are operated by independent retail dealer franchisees, all of which are subject to and restricted by the allegedly unlawful dealer-franchise and distribution agreements. According to the complaint, these independent franchisee-operated retail stations comprise about 25% of the gasoline stations in the District.
The complaint charges that the dealer-franchise agreements between the Distributors and independent retail service stations and the distribution agreements between Exxon and the Distributors (all of which the District asserts constitute “marketing agreements” as that term is defined in the RSSA) violate two provisions of Subchapter III of the RSSA: D.C. Code § 36-303.01 (a)(6) and (11). D.C. Code § 36-303.01 (a)(6) states that:
[No marketing agreement shall ․] [p]rohibit a retail dealer from purchasing or accepting delivery of, on consignment or otherwise, any motor fuels, petroleum products, automotive products, or other products from any person who is not a party to the marketing agreement or prohibit a retail dealer from selling such motor fuels or products, provided that if the marketing agreement permits the retail dealer to use the distributor's trademark, the marketing agreement may require such motor fuels, petroleum products, and automotive products to be of a reasonably similar quality to those of the distributor, and provided further that the retail dealer shall neither represent such motor fuels or products as having been procured from the distributor nor sell such motor fuels or products under the distributor's trademark[.]
D.C. Code § 36-303.01 (a)(11) states that “no marketing agreement shall” “[c]ontain any term or condition which, directly or indirectly, violates this subchapter.” The complaint asks for a declaration that defendants'/appellees' marketing agreements violate these provisions of District of Columbia law and for an injunction prohibiting enforcement of the agreements.
Is it wise to buy a Hawaiian house in Zone 1 for volcano risk?
It hasn't worked out well for some who live in Leilani Estates, one of the areas evacuated recently because of volcanic eruption. That includes a man interviewed on TV who said he moved to Hawaii from California to avoid fires.
It turns out that the US Geological Survey categorizes areas by volcano lava riskiness. Apparently government regulations permit people to buy into high risk areas, and people are attracted to buy because home prices are lower where risk is higher. On the other hand, its harder to get insurance or financing in high risk areas. Luckily for people who need financing to buy a high risk home, the Federal government apparently does offer a lending program through Rural Housing development. A local real estate broker posting explains it [see: http://www.koarealty.com/buying-property/lava-zones/ ] -- DAR
Lava hazard zones:
Here on the island of Hawaii Lava hazards are a real part of the journey. Hawaii island is comprised of active volcanoes and as that is a real fact there are important issues to consider when looking at purchasing real estate in areas that are at higher risk of the flow of lava. The United States Geological Survey has broken up the island in 9 zones commonly known as lava hazard zones, and labeled them 1-9. Zone 1 is considered the highest risk zone based upon and according to the degree of the risk of hazard, historical flows, and the geographical lay of the land. Zone 2 is also a high-risk zone based upon the same criteria. As the hazard zone number increases in number the degree of risk decreases. In such lava zone 9 is considered a zone of least risk.
When it comes to purchasing real estate in these high risk areas one needs to be aware of the risks that come with owning in these areas as well as the costs associated on a level related to lending and insurance, as well as to the actual physical risk factor associated.
When choosing to purchase real estate here on the island, many buyer’s are attracted to lava zones 1 and 2. This is in part due to the weather and scenic beauty but along with this we cannot deny the affordable prices. It is true, land located in the lava hazard zones 1 & 2 is typically less expensive than any other areas on Hawaii island. In fact, the district of Puna and the district of Kau; both areas designated with lava hazard zones 1 & 2; offer some of the most affordable land in ALL of the island chain. When making a decision to purchase in these areas one must be aware and consider these variables:
1. Limited insurers for homeowners insurance and hazard insurance.
Currently there is the Hawaii Property insurance Association that offers insurance on homes up to a value of $350,000.00. Any replacement value amount above and beyond $350,000.00 would be provided by Lloyds of London. Typically insurance premiums are higher than what one would see on a property outside of these high-risk zones.
2. Limited financing for residential purchases or construction loans.
In recent times many lending institutions have completely eliminated programs that they once had for financing in these risk zones. At current, the Federal government does offer a program through Rural Housing development.
As for conventional financing, most institutions are requiring a minimum of 20% down in order to lend on a property in either of these two high-risk zones.
Which subdivisions are in each lava hazard zone?East side, covering Hilo to the district of Puna the following are
District of PUNA:
Lava Zone 1
Where can YOU get more information?
Go to the experts by following this site.
http://hvo.wr.usgs.gov/hazards/lavazones/main.html
It hasn't worked out well for some who live in Leilani Estates, one of the areas evacuated recently because of volcanic eruption. That includes a man interviewed on TV who said he moved to Hawaii from California to avoid fires.
It turns out that the US Geological Survey categorizes areas by volcano lava riskiness. Apparently government regulations permit people to buy into high risk areas, and people are attracted to buy because home prices are lower where risk is higher. On the other hand, its harder to get insurance or financing in high risk areas. Luckily for people who need financing to buy a high risk home, the Federal government apparently does offer a lending program through Rural Housing development. A local real estate broker posting explains it [see: http://www.koarealty.com/buying-property/lava-zones/ ] -- DAR
Lava hazard zones:
Here on the island of Hawaii Lava hazards are a real part of the journey. Hawaii island is comprised of active volcanoes and as that is a real fact there are important issues to consider when looking at purchasing real estate in areas that are at higher risk of the flow of lava. The United States Geological Survey has broken up the island in 9 zones commonly known as lava hazard zones, and labeled them 1-9. Zone 1 is considered the highest risk zone based upon and according to the degree of the risk of hazard, historical flows, and the geographical lay of the land. Zone 2 is also a high-risk zone based upon the same criteria. As the hazard zone number increases in number the degree of risk decreases. In such lava zone 9 is considered a zone of least risk.
When it comes to purchasing real estate in these high risk areas one needs to be aware of the risks that come with owning in these areas as well as the costs associated on a level related to lending and insurance, as well as to the actual physical risk factor associated.
When choosing to purchase real estate here on the island, many buyer’s are attracted to lava zones 1 and 2. This is in part due to the weather and scenic beauty but along with this we cannot deny the affordable prices. It is true, land located in the lava hazard zones 1 & 2 is typically less expensive than any other areas on Hawaii island. In fact, the district of Puna and the district of Kau; both areas designated with lava hazard zones 1 & 2; offer some of the most affordable land in ALL of the island chain. When making a decision to purchase in these areas one must be aware and consider these variables:
1. Limited insurers for homeowners insurance and hazard insurance.
Currently there is the Hawaii Property insurance Association that offers insurance on homes up to a value of $350,000.00. Any replacement value amount above and beyond $350,000.00 would be provided by Lloyds of London. Typically insurance premiums are higher than what one would see on a property outside of these high-risk zones.
2. Limited financing for residential purchases or construction loans.
In recent times many lending institutions have completely eliminated programs that they once had for financing in these risk zones. At current, the Federal government does offer a program through Rural Housing development.
As for conventional financing, most institutions are requiring a minimum of 20% down in order to lend on a property in either of these two high-risk zones.
Which subdivisions are in each lava hazard zone?East side, covering Hilo to the district of Puna the following are
District of PUNA:
Lava Zone 1
- Leilani Estates
- Kapoho (parts of it, not all — call for details)
- Kalapana Vacation Lots
- Royal Gardens
Where can YOU get more information?
Go to the experts by following this site.
http://hvo.wr.usgs.gov/hazards/lavazones/main.html
CRISPR gene-editing technology IP battles
CRISPR is a recent break-through technology that allows genes to be edited is a way that may potentially cure many illnesses with a genetic component. For example, blindness caused by retinitis pigmentosa might be curable by using CRISPR technology to fix the relevant genetic defect. It seems unfortunate that patent battles have developed which could cause scientists to compete in a commercial sense rather than coordinating research to accelerate scientific progress. The patent battles are going on now, but the article I've picked for your attention is an older one that provides a useful overview. What you see below is a brief excerpt, with a link to the original article. DAR
The battle to own the CRISPR–Cas9 gene-editing toolApril 2017
By Catherine Jewell, Communications Division, WIPO, and Vijay Shankar Balakrishnan, Science and Health Journalist
Millions suffer from devastating genetic disorders like cancer, muscular dystrophy, cystic fibrosis, sickle cell anaemia, Huntington’s disease and many others. Imagine the pain and suffering that could be avoided (not to mention the healthcare costs) if we could cure these diseases simply by rewriting the genetic code of patients. This is the promise of the CRISPR-Cas9 gene-editing technology.
Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene editing tool has huge scope to improve understanding of human and animal disease and its treatment (photo: iStock.com/cosmin4000).Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene-editing tool has huge scope to improve understanding of human and animal disease and its treatment. It has the potential to revolutionize medicine and agricultural research. The race to develop commercial applications of CRISPR-Cas9 in healthcare, agriculture and industry, however, has thrust the technology, its pioneers, the institutions they work for and a clutch of startups in which they are involved into a high-stakes legal battle over who actually invented it and when. The outcome will determine who controls the technology and where the highly lucrative economic benefits it promises to generate will flow.
The technology and how it came about:
Ever since Watson and Crick identified the DNA double helix, scientists have been searching for ways to better understand the role that DNA plays in the genetic make-up of living organisms. The CRISPR tool is a huge step forward. Compared to existing research tools, it offers a relatively quick, easy, reliable and cheap way to target and edit specific genetic sequences.
CRISPR stands for Clustered Regularly Interspaced Short Palindromic Repeats. It is a natural defence mechanism that allows bacterial cells to detect and destroy the viruses that attack them.
The CRISPR mechanism was first identified as a “general purpose gene-editing tool” in a scientific paper published by scientists Erik Sontheimer and Luciano Marrafinni from Northwestern University, Evanston, Illinois, USA in 2008. The scientists filed for a patent but their application was rejected because they were unable to reduce it to any practical application, Science’s Jon Cohen writes.
But CRISPR really began to create a buzz, with the publication in June 2012, of a scientific paper by Emmanuelle Charpentier, a French microbiologist then working at the University of Vienna and now at the Max Planck Institute for Infection Biology, Germany and Umeå University, Sweden, and Jennifer Doudna at the University of California, Berkeley, USA. Their paper outlined how CRISPR, with the help of an enzyme called Cas9, can be transformed into a tool to edit genes. Specifically, how CRISPR-Cas9 can be used to cut DNA in a test tube. They filed their first CRISPR-related patent application in May 2012. It is still under review.
Six months later, in January 2013, scientists at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, led by Feng Zhang, reported that they had found a way to use CRISPR-Cas9 to edit the cells of mammals, further fuelling interest in its potential to generate new and more effective medical treatments. The Broad researchers filed their first CRISPR-related patent application in December 2012 and paid for a fast-track review process. Eleven additional patent applications were filed to bolster the claim that they were the first to invent a CRISPR system to edit mammalian cells, Jon Cohen notes. In April 2014, the United States Patent and Trademark Office (USPTO) granted the Broad team a patent on their CRISPR technology.
Jennifer Doudna (top left) at the University of California, Berkeley, USA, and Feng Zhang (top right) at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, have each undertaken pioneering work in relation to CRISPR-Cas9. They and others are currently embroiled in a legal firestorm over who owns commercial or IP rights in the technology. (Photos: Keegan Houser/UC Berkeley and Justin Knight Photography).The battle for ownershipThe grant of the patent to the Broad team triggered a legal firestorm. Professor Jake Sherkow of the New York Law School characterizes it as “an absolutely humungous biotech patent dispute”.
The stakes are clearly very high. Whoever owns the commercial or IP rights to CRISPR-Cas9 has the potential to generate huge financial returns and to decide who gets to use it.
Each of the pioneering researchers and their respective institutions has a stake in a handful of start-ups which have attracted millions of investment dollars to translate CRISPR-Cas9 systems into new treatments for a broad range of genetic diseases. They include Intellia Therapeutics (UC Berkeley), Caribou Sciences (J. Doudna), CRISPR Therapeutics and ERS Genomics (E. Charpentier) and Editas Medicine (Broad Institute).
An analysis of the CRISPR-Cas9 commercial landscape by Science’s Jon Cohen reveals that a web of often overlapping licenses have already been granted by CRISPR startups for many applications in medicine, agriculture and industry.
Full article:http://www.wipo.int/wipo_magazine/en/2017/02/article_0005.html
CRISPR is a recent break-through technology that allows genes to be edited is a way that may potentially cure many illnesses with a genetic component. For example, blindness caused by retinitis pigmentosa might be curable by using CRISPR technology to fix the relevant genetic defect. It seems unfortunate that patent battles have developed which could cause scientists to compete in a commercial sense rather than coordinating research to accelerate scientific progress. The patent battles are going on now, but the article I've picked for your attention is an older one that provides a useful overview. What you see below is a brief excerpt, with a link to the original article. DAR
The battle to own the CRISPR–Cas9 gene-editing toolApril 2017
By Catherine Jewell, Communications Division, WIPO, and Vijay Shankar Balakrishnan, Science and Health Journalist
Millions suffer from devastating genetic disorders like cancer, muscular dystrophy, cystic fibrosis, sickle cell anaemia, Huntington’s disease and many others. Imagine the pain and suffering that could be avoided (not to mention the healthcare costs) if we could cure these diseases simply by rewriting the genetic code of patients. This is the promise of the CRISPR-Cas9 gene-editing technology.
Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene editing tool has huge scope to improve understanding of human and animal disease and its treatment (photo: iStock.com/cosmin4000).Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene-editing tool has huge scope to improve understanding of human and animal disease and its treatment. It has the potential to revolutionize medicine and agricultural research. The race to develop commercial applications of CRISPR-Cas9 in healthcare, agriculture and industry, however, has thrust the technology, its pioneers, the institutions they work for and a clutch of startups in which they are involved into a high-stakes legal battle over who actually invented it and when. The outcome will determine who controls the technology and where the highly lucrative economic benefits it promises to generate will flow.
The technology and how it came about:
Ever since Watson and Crick identified the DNA double helix, scientists have been searching for ways to better understand the role that DNA plays in the genetic make-up of living organisms. The CRISPR tool is a huge step forward. Compared to existing research tools, it offers a relatively quick, easy, reliable and cheap way to target and edit specific genetic sequences.
CRISPR stands for Clustered Regularly Interspaced Short Palindromic Repeats. It is a natural defence mechanism that allows bacterial cells to detect and destroy the viruses that attack them.
The CRISPR mechanism was first identified as a “general purpose gene-editing tool” in a scientific paper published by scientists Erik Sontheimer and Luciano Marrafinni from Northwestern University, Evanston, Illinois, USA in 2008. The scientists filed for a patent but their application was rejected because they were unable to reduce it to any practical application, Science’s Jon Cohen writes.
But CRISPR really began to create a buzz, with the publication in June 2012, of a scientific paper by Emmanuelle Charpentier, a French microbiologist then working at the University of Vienna and now at the Max Planck Institute for Infection Biology, Germany and Umeå University, Sweden, and Jennifer Doudna at the University of California, Berkeley, USA. Their paper outlined how CRISPR, with the help of an enzyme called Cas9, can be transformed into a tool to edit genes. Specifically, how CRISPR-Cas9 can be used to cut DNA in a test tube. They filed their first CRISPR-related patent application in May 2012. It is still under review.
Six months later, in January 2013, scientists at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, led by Feng Zhang, reported that they had found a way to use CRISPR-Cas9 to edit the cells of mammals, further fuelling interest in its potential to generate new and more effective medical treatments. The Broad researchers filed their first CRISPR-related patent application in December 2012 and paid for a fast-track review process. Eleven additional patent applications were filed to bolster the claim that they were the first to invent a CRISPR system to edit mammalian cells, Jon Cohen notes. In April 2014, the United States Patent and Trademark Office (USPTO) granted the Broad team a patent on their CRISPR technology.
Jennifer Doudna (top left) at the University of California, Berkeley, USA, and Feng Zhang (top right) at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, have each undertaken pioneering work in relation to CRISPR-Cas9. They and others are currently embroiled in a legal firestorm over who owns commercial or IP rights in the technology. (Photos: Keegan Houser/UC Berkeley and Justin Knight Photography).The battle for ownershipThe grant of the patent to the Broad team triggered a legal firestorm. Professor Jake Sherkow of the New York Law School characterizes it as “an absolutely humungous biotech patent dispute”.
The stakes are clearly very high. Whoever owns the commercial or IP rights to CRISPR-Cas9 has the potential to generate huge financial returns and to decide who gets to use it.
Each of the pioneering researchers and their respective institutions has a stake in a handful of start-ups which have attracted millions of investment dollars to translate CRISPR-Cas9 systems into new treatments for a broad range of genetic diseases. They include Intellia Therapeutics (UC Berkeley), Caribou Sciences (J. Doudna), CRISPR Therapeutics and ERS Genomics (E. Charpentier) and Editas Medicine (Broad Institute).
An analysis of the CRISPR-Cas9 commercial landscape by Science’s Jon Cohen reveals that a web of often overlapping licenses have already been granted by CRISPR startups for many applications in medicine, agriculture and industry.
Full article:http://www.wipo.int/wipo_magazine/en/2017/02/article_0005.html
AAI 19th Annual Conference "Antitrust at a Crossroads - Plotting the Course for the Next Decade"
DATE: JUNE 21, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DCOn Thursday June 21, 2018, the American Antitrust Institute will host its 19th Annual Conference “Antitrust at a Crossroads: Plotting the Policy Course for the Next Decade.” Experts from law, economics, and policy will offer insight via four panels:
Registration Fees:
Early Bird (until May 18): $450
Government and Academic Rate: $15
DATE: JUNE 21, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DCOn Thursday June 21, 2018, the American Antitrust Institute will host its 19th Annual Conference “Antitrust at a Crossroads: Plotting the Policy Course for the Next Decade.” Experts from law, economics, and policy will offer insight via four panels:
- Antitrust and Workers -- Agreements, Mergers, and Monopsony
As American workers struggle to navigate an economy characterized by increasing corporate concentration, experts have begun to focus greater attention on anticompetitive conduct in labor markets. This panel will explore applications of the antitrust laws to prohibit the exercise of buyer power that harms competition and suppresses wages and salaries. Among other things, panelists will discuss landmark civil cases challenging employer no-poaching and no-hiring agreements, the Department of Justice’s movement toward prosecuting naked wage-fixing and no-poaching agreements criminally, and recent scholarship addressing the role of merger enforcement in preserving buy-side competition. - Innovation and Antitrust — Sword or Shield?
Promoting innovation is widely recognized to be a critical, if not the most important, goal of antitrust law. In practice, however, harm to innovation is just as often used as a defense to antitrust claims, particularly where intellectual property rights are involved. This panel of experts will address several hot topics at the edge of this divide, including: antitrust claims involving product redesign and product hopping, developments in the Noerr-Pennington doctrine and sham litigation, the antitrust treatment of FRAND breaches and SSO rules, and the use of the potential competition doctrine as a means to protect nascent competition and promote innovation. - Vertical Merger Enforcement — Competitive Effects, Remedies, and Guidelines
Vertical merger proposals in key sectors such as telecommunications, media, agricultural biotechnology, and healthcare continue to pile up. Once a lower-profile area of enforcement, vertical mergers are now a hot topic that have generated debate over competitive effects and past remedies. This panel will take up three important, interrelated topics in vertical merger enforcement. Panelists will first discuss recent developments in framing theories of harm around bargaining leverage and exclusionary effects and anticompetitive coordination. In light of controversy in past vertical merger cases, panelists will then turn to how enforcement should address the question of effectiveness of conduct remedies. Finally, the panel will take up the question of whether more guidance on how the antitrust agencies will evaluate vertical mergers is warranted, through an update and/or formalization of the 1984 vertical merger guidelines. - Oyez! Antitrust and the Supreme Court
This term at the Supreme Court has been a busy one for antitrust cases and could be quite significant. The leading case, Ohio v. Amex, may have wide ramifications beyond its practical implications for credit-card merchant fees and two-sided markets. Fundamental antitrust issues of market definition and the operation of the rule of reason are at stake. Animal Science v. Hebei raises important questions involving international comity and export cartels. And Salt River v. Tesla indicates that the Court is poised to resolve a split in the circuits over the state-action doctrine. Our panel of leading Supreme Court advocates will address these cases and other antitrust developments at the Court, including potentially momentous cert petitions.
Registration Fees:
Early Bird (until May 18): $450
Government and Academic Rate: $15
AAI letter opposing "Smarter" Act modifying agency jurisdiction
AAI issued a letter opposing the SMARTER Act to the Ranking Member of the House Judiciary Committee, Jerry Nadler, and Ranking Member of the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, David Cicilline. The SMARTER Act proposes “[t]o amend the Clayton Act and the Federal Trade Commission Act to provide that the Federal Trade Commission shall exercise authority with respect to mergers only under the Clayton Act and only in the same procedural manner as the Attorney General exercises such authority.” AAI reviewed workload statistics compiled by the U.S. Department of Justice and Federal Trade Commission to examine whether the premise of the SMARTER Act is sound. The review indicates that the concerns of the bill’s sponsors are without foundation and that the SMARTER Act would not serve the interests of competition or consumers. The letter summarizes AAI’s analysis and findings.
Download AAI Letter Opposing SMARTER Act [ http://www.antitrustinstitute.org/sites/default/files/AAI%20Letter%20for%20Record_H.R.%205645_5.2.18.pdf ]
AAI issued a letter opposing the SMARTER Act to the Ranking Member of the House Judiciary Committee, Jerry Nadler, and Ranking Member of the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, David Cicilline. The SMARTER Act proposes “[t]o amend the Clayton Act and the Federal Trade Commission Act to provide that the Federal Trade Commission shall exercise authority with respect to mergers only under the Clayton Act and only in the same procedural manner as the Attorney General exercises such authority.” AAI reviewed workload statistics compiled by the U.S. Department of Justice and Federal Trade Commission to examine whether the premise of the SMARTER Act is sound. The review indicates that the concerns of the bill’s sponsors are without foundation and that the SMARTER Act would not serve the interests of competition or consumers. The letter summarizes AAI’s analysis and findings.
Download AAI Letter Opposing SMARTER Act [ http://www.antitrustinstitute.org/sites/default/files/AAI%20Letter%20for%20Record_H.R.%205645_5.2.18.pdf ]
Bloomberg on exploitation of the elderly
Excerpt:
The total number of victims is increasing as baby boomers retire and their ability to manage trillions of dollars in personal assets diminishes. One financial services firm estimates seniors lose as much as $36.5 billion a year. But assessments like that are “grossly underestimated,” according to a 2016 study by New York State’s Office of Children and Family Services. For every case reported to authorities, as many as 44 are not. The study found losses in New York alone could be as high as $1.5 billion.
The U.S. Centers for Disease Control and Prevention drew attention to elder exploitation as a public health problem in a 2016 report, citing groundbreaking research two decades earlier by Mark Lachs. Now co-chief of the Division of Geriatrics and Palliative Medicine at Weill Cornell Medicine and New York-Presbyterian Hospital, Lachs says elder abuse victims—including those who suffer financial exploitation--die at a rate three times faster than those who haven’t been abused. It’s a “public health crisis,” he warns.
“I knew these crimes were killing people,” says Elizabeth Loewy, who directed the elder abuse unit at the Manhattan District Attorney’s Office. As her exploitation cases steadily rose to hundreds per year, she says, “so many family members told me, ‘I can’t prove it, but this killed him.’”
Full article: https://www.bloomberg.com/news/features/2018-05-03/america-s-elderly-are-losing-37-billion-a-year-to-fraud
Excerpt:
The total number of victims is increasing as baby boomers retire and their ability to manage trillions of dollars in personal assets diminishes. One financial services firm estimates seniors lose as much as $36.5 billion a year. But assessments like that are “grossly underestimated,” according to a 2016 study by New York State’s Office of Children and Family Services. For every case reported to authorities, as many as 44 are not. The study found losses in New York alone could be as high as $1.5 billion.
The U.S. Centers for Disease Control and Prevention drew attention to elder exploitation as a public health problem in a 2016 report, citing groundbreaking research two decades earlier by Mark Lachs. Now co-chief of the Division of Geriatrics and Palliative Medicine at Weill Cornell Medicine and New York-Presbyterian Hospital, Lachs says elder abuse victims—including those who suffer financial exploitation--die at a rate three times faster than those who haven’t been abused. It’s a “public health crisis,” he warns.
“I knew these crimes were killing people,” says Elizabeth Loewy, who directed the elder abuse unit at the Manhattan District Attorney’s Office. As her exploitation cases steadily rose to hundreds per year, she says, “so many family members told me, ‘I can’t prove it, but this killed him.’”
Full article: https://www.bloomberg.com/news/features/2018-05-03/america-s-elderly-are-losing-37-billion-a-year-to-fraud
California's press release: California and States Representing Over 40 Percent of U.S. Car Market Sue to Defend National Clean Car Rules
May 1, 2018
See https://oag.ca.gov/news/press-releases/california-and-states-representing-over-40-percent-us-car-market-sue-defend
Excerpt:
SACRAMENTO – Moving to curb toxic air pollution and improve car gas mileage, California Attorney General Xavier Becerra, California Governor Edmund G. Brown Jr. and the California Air Resources Board today announced that they are leading a coalition of 17 states and the District of Columbia in suing the U.S. Environmental Protection Agency to preserve the nation’s single vehicle emission standard.
“The evidence is irrefutable: today’s clean car standards are achievable, science-based and a boon for hardworking American families. But the EPA and Administrator Scott Pruitt refuse to do their job and enforce these standards,” said Attorney General Becerra. “Enough is enough. We’re not looking to pick a fight with the Trump Administration, but when the stakes are this high for our families’ health and our economic prosperity, we have a responsibility to do what is necessary to defend them.”
“The states joining today’s lawsuit represent 140 million people who simply want cleaner and more efficient cars,” said Governor Brown. “This phalanx of states will defend the nation’s clean car standards to boost gas mileage and curb toxic air pollution.”
May 1, 2018
See https://oag.ca.gov/news/press-releases/california-and-states-representing-over-40-percent-us-car-market-sue-defend
Excerpt:
SACRAMENTO – Moving to curb toxic air pollution and improve car gas mileage, California Attorney General Xavier Becerra, California Governor Edmund G. Brown Jr. and the California Air Resources Board today announced that they are leading a coalition of 17 states and the District of Columbia in suing the U.S. Environmental Protection Agency to preserve the nation’s single vehicle emission standard.
“The evidence is irrefutable: today’s clean car standards are achievable, science-based and a boon for hardworking American families. But the EPA and Administrator Scott Pruitt refuse to do their job and enforce these standards,” said Attorney General Becerra. “Enough is enough. We’re not looking to pick a fight with the Trump Administration, but when the stakes are this high for our families’ health and our economic prosperity, we have a responsibility to do what is necessary to defend them.”
“The states joining today’s lawsuit represent 140 million people who simply want cleaner and more efficient cars,” said Governor Brown. “This phalanx of states will defend the nation’s clean car standards to boost gas mileage and curb toxic air pollution.”
Financial problems of new technology proton radiation medical treatment systems suggest that the market doesn't always correctly allocate resources
For years, health systems rushed enthusiastically into expensive medical technologies such as proton beam centers, robotic surgery devices and laser scalpels — potential cash cows in the one economic sector that was reliably growing. Developers got easy financing to purchase the latest multimillion-dollar machine, confident of generous reimbursement.
There are now 27 proton beam units in the U.S., up from about half a dozen a decade ago. More than 20 more are either under construction or in development.
But now that employers, insurers and government seem determined to curb growth in health care spending and to combat overcharges and wasteful procedures, such bets are less of a sure thing.
The problem is that the rollicking business of new medical machines often ignored or outpaced the science: Little research has shown that proton beam therapy reduces side effects or improves survival for common cancers compared with much cheaper, traditional treatment.
If the dot-com bubble and the housing bubble marked previous decades, something of a medical-equipment bubble may be showing itself now. And proton beam machines could become the first casualty.
“The biggest problem these guys have is extra capacity. They don’t have enough patients to fill the rooms” at many proton centers, said Dr. Peter Johnstone, who was CEO of a proton facility at Indiana University before it closed in 2014 and has published research on the industry. At that operation, he said, “we began to see that simply having a proton center didn’t mean people would come.”
Sometimes occupying as much space as a Walmart store and costing enough money to build a dozen elementary schools, the facilities zap cancer with beams of subatomic proton particles instead of conventional radiation. The treatment, which can cost $48,000 or more, affects surrounding tissue less than traditional radiation does because its beams stop at a tumor rather than passing through. But evidence is sparse that this matters.
And so, except in cases of childhood cancer or tumors near sensitive organs such as eyes, commercial insurers have largely balked at paying for proton therapy.
“Something that gets you the same clinical outcomes at a higher price is called inefficient,” said Dr. Ezekiel Emanuel, a health policy professor at the University of Pennsylvania and a longtime critic of the proton-center boom. “If investors have tried to make money off the inefficiency, I don’t think we should be upset that they’re losing money on it.”
Investors backing a surge of new facilities starting in 2009 counted on insurers approving proton therapy not just for children, but also for common adult tumors, especially prostate cancer. In many cases, nonprofit health systems such as Maryland’s partnered with for-profit investors seeking high returns.
Companies marketed proton machines under the assumption that advertising, doctors and insurers would ensure steady business involving patients with a wide variety of cancers. But the dollars haven’t flowed in as expected.
Indiana University’s center became the first proton-therapy facility to close following the investment boom, in 2014. An abandoned proton project in Dallas is in bankruptcy court.
California Protons, formerly associated with Scripps Health in San Diego, landed in bankruptcy last year.
A number of others, including Maryland’s, have missed financial targets or are hemorrhaging money, according to industry analysts, financial documents and interviews with executives.
From https://khn.org/news/as-proton-centers-struggle-a-sign-of-a-health-care-bubble/?utm_campaign=KHN%3A%20First%20Edition&utm_source=hs_email&utm_medium=email&utm_content=62610060&_hsenc=p2ANqtz-__oPaRRQbRgimaO9tY0aAr0CXq4FUiDbftmnl6HOdmdxv43-WsRmzkvSPvfIzsJktuXQIabIKJqEYahL5t1zNyp5-euQ&_hsmi=62610060
For years, health systems rushed enthusiastically into expensive medical technologies such as proton beam centers, robotic surgery devices and laser scalpels — potential cash cows in the one economic sector that was reliably growing. Developers got easy financing to purchase the latest multimillion-dollar machine, confident of generous reimbursement.
There are now 27 proton beam units in the U.S., up from about half a dozen a decade ago. More than 20 more are either under construction or in development.
But now that employers, insurers and government seem determined to curb growth in health care spending and to combat overcharges and wasteful procedures, such bets are less of a sure thing.
The problem is that the rollicking business of new medical machines often ignored or outpaced the science: Little research has shown that proton beam therapy reduces side effects or improves survival for common cancers compared with much cheaper, traditional treatment.
If the dot-com bubble and the housing bubble marked previous decades, something of a medical-equipment bubble may be showing itself now. And proton beam machines could become the first casualty.
“The biggest problem these guys have is extra capacity. They don’t have enough patients to fill the rooms” at many proton centers, said Dr. Peter Johnstone, who was CEO of a proton facility at Indiana University before it closed in 2014 and has published research on the industry. At that operation, he said, “we began to see that simply having a proton center didn’t mean people would come.”
Sometimes occupying as much space as a Walmart store and costing enough money to build a dozen elementary schools, the facilities zap cancer with beams of subatomic proton particles instead of conventional radiation. The treatment, which can cost $48,000 or more, affects surrounding tissue less than traditional radiation does because its beams stop at a tumor rather than passing through. But evidence is sparse that this matters.
And so, except in cases of childhood cancer or tumors near sensitive organs such as eyes, commercial insurers have largely balked at paying for proton therapy.
“Something that gets you the same clinical outcomes at a higher price is called inefficient,” said Dr. Ezekiel Emanuel, a health policy professor at the University of Pennsylvania and a longtime critic of the proton-center boom. “If investors have tried to make money off the inefficiency, I don’t think we should be upset that they’re losing money on it.”
Investors backing a surge of new facilities starting in 2009 counted on insurers approving proton therapy not just for children, but also for common adult tumors, especially prostate cancer. In many cases, nonprofit health systems such as Maryland’s partnered with for-profit investors seeking high returns.
Companies marketed proton machines under the assumption that advertising, doctors and insurers would ensure steady business involving patients with a wide variety of cancers. But the dollars haven’t flowed in as expected.
Indiana University’s center became the first proton-therapy facility to close following the investment boom, in 2014. An abandoned proton project in Dallas is in bankruptcy court.
California Protons, formerly associated with Scripps Health in San Diego, landed in bankruptcy last year.
A number of others, including Maryland’s, have missed financial targets or are hemorrhaging money, according to industry analysts, financial documents and interviews with executives.
From https://khn.org/news/as-proton-centers-struggle-a-sign-of-a-health-care-bubble/?utm_campaign=KHN%3A%20First%20Edition&utm_source=hs_email&utm_medium=email&utm_content=62610060&_hsenc=p2ANqtz-__oPaRRQbRgimaO9tY0aAr0CXq4FUiDbftmnl6HOdmdxv43-WsRmzkvSPvfIzsJktuXQIabIKJqEYahL5t1zNyp5-euQ&_hsmi=62610060
DCCRC Joins 132 Groups Urging SEC Not to Facilitate Forced Arbitration
133 organizations including DCCRC, sent a letter [ https://secureoursavings.com/wp-content/uploads/2018/04/SEC-Sign-on-Letter-Forced-Arbitration.pdf] urging the U.S. Securities and Exchange Commission (SEC) to stand by its mission and longstanding policy of empowering and protecting American investors, including retired servicemembers, first responders, and teachers, by safeguarding their right to join together to hold law-breaking corporations publicly accountable in a court of law.
In recent months, Chairman Clayton has fueled speculation about a dramatic policy shift at the SEC that would threaten the security of hardworking Americans’ retirement savings and gut their legal rights by allowing publicly traded corporations to use forced arbitration clauses against their investors. These “rip-off clauses” would force investors to give up their most effective tool to fight back against securities fraud that could decimate their savings – class action lawsuits.
The letter reads in part:
“Investors rely on the SEC to promote market integrity and deter and detect fraud. But the SEC cannot fulfill this role on its own. Private shareholder lawsuits serve as an essential supplement to Commission action…Recent high-profile examples of securities fraud illustrate the devastating effect this would have. In enforcement actions against Enron, WorldCom, Tyco, Bank of America and Global Crossing, for example, the SEC recovered penalties and fees totaling $1.8 billion, while private securities class actions were able to recover $19.4 billion for defrauded shareholders – more than ten times as much.”
In addition to the letter, more than 40 national and state-based organizations, led by the Consumer Federation of America, Public Justice, and the American Association for Justice, have joined together to form the Secure Our Savings (SOS) Coalition to keep up pressure on SEC leadership.
133 organizations including DCCRC, sent a letter [ https://secureoursavings.com/wp-content/uploads/2018/04/SEC-Sign-on-Letter-Forced-Arbitration.pdf] urging the U.S. Securities and Exchange Commission (SEC) to stand by its mission and longstanding policy of empowering and protecting American investors, including retired servicemembers, first responders, and teachers, by safeguarding their right to join together to hold law-breaking corporations publicly accountable in a court of law.
In recent months, Chairman Clayton has fueled speculation about a dramatic policy shift at the SEC that would threaten the security of hardworking Americans’ retirement savings and gut their legal rights by allowing publicly traded corporations to use forced arbitration clauses against their investors. These “rip-off clauses” would force investors to give up their most effective tool to fight back against securities fraud that could decimate their savings – class action lawsuits.
The letter reads in part:
“Investors rely on the SEC to promote market integrity and deter and detect fraud. But the SEC cannot fulfill this role on its own. Private shareholder lawsuits serve as an essential supplement to Commission action…Recent high-profile examples of securities fraud illustrate the devastating effect this would have. In enforcement actions against Enron, WorldCom, Tyco, Bank of America and Global Crossing, for example, the SEC recovered penalties and fees totaling $1.8 billion, while private securities class actions were able to recover $19.4 billion for defrauded shareholders – more than ten times as much.”
In addition to the letter, more than 40 national and state-based organizations, led by the Consumer Federation of America, Public Justice, and the American Association for Justice, have joined together to form the Secure Our Savings (SOS) Coalition to keep up pressure on SEC leadership.
Susan Crawford on the problems of a T-Mobile/Sprint merger
Excerpt from article in Wired:
The problem is not just that we’d have three instead of four wireless giants in the US, though that’s certainly a major issue. An even bigger threat to the consumer is what would happen next. As I see it, a Sprint/T-Mobile combination would inevitably end up being a wholesale partner for our giant cable companies (Comcast and Spectrum). The resulting business deals would allow those behemoths to neatly control many segments—wired, wireless, prepaid, post-paid—of the stagnant and expensive connectivity marketplace in America. That isn’t a future we should want.
Full article: https://www.wired.com/story/the-case-against-the-t-mobile-sprint-merger/
Excerpt from article in Wired:
The problem is not just that we’d have three instead of four wireless giants in the US, though that’s certainly a major issue. An even bigger threat to the consumer is what would happen next. As I see it, a Sprint/T-Mobile combination would inevitably end up being a wholesale partner for our giant cable companies (Comcast and Spectrum). The resulting business deals would allow those behemoths to neatly control many segments—wired, wireless, prepaid, post-paid—of the stagnant and expensive connectivity marketplace in America. That isn’t a future we should want.
Full article: https://www.wired.com/story/the-case-against-the-t-mobile-sprint-merger/
Philip Marsden on "Hipster" antitrust -- a European perspective
Marsden is Professor of Competition Law and Economics at the College of Europe, Bruges and Senior Director for Case Decision Groups at the Competition & Markets Authority, London.
Here is an excerpt from the concluding part of Marsden's article:
In many fast-moving and high tech markets, consumer engagement and data are key. It thus makes sense to divert loud but vague populist calls for action into joined-up assessments of how these markets work. Consumer law plays a crucial role here. So often we see consumer enforcement complementing competition enforcement, and vice versa. The complement is natural, since in both we are making sure that consumers can trust markets and helping them know that what they’re seeing is what they’re getting.
Online reviews, for example, bolster competition as people can make more informed choices, but this only works if reviews are trustworthy. Making sure that businesses abide by consumer protection law, that they treat their customers fairly, and in ways that engender trust, helps to create a more competitive marketplace. Firms have to work harder to offer better products, across all the competitive variables.
A CALL FOR EVIDENCE: Competition authorities can adapt further too. Competition laws are designed to adapt – but this doesn’t necessarily mean entirely new rules are required. The evolutionary process starts with deepening our understanding of how markets work. Can authorities stimulate this understanding, rather than always being on the back foot, or being presumed to be defending our corner from hipster and political intrusion?
As evidence-based authorities, is there not something blindingly obvious we could contribute to the calls for us to do more? Two things come to mind: a call for evidence, and at the same time, an enhancement of the tools we have to analyze evidence. This year, at the CMA, we are encouraging more fundamental research into trust in markets. This would likely be highly interdisciplinary in nature and would seek to identify which market practices are most likely to be considered unfair and to undermine trust in markets. We could, for example, test perceptions of the fairness of a range of practices, including those that are not transparent or where the consumer does not feel in control; practices that require undue effort or transactions costs to secure a good deal or practices that involve extreme forms of price discrimination. We want to understand the drivers of trust and mistrust in markets and improve our understanding of the challenges facing vulnerable groups of customers who are at high risk of experiencing poor outcomes in markets.
This could all be with a view to informing case selection, diagnosis of problems and the development of remedies. At the same time, we need to improve our ability to assess the evidence we will receive. All competition authorities need highly skilled economics and remedies teams to understand and examine markets and business models. To address the knowledge gaps regarding the use of data, though the CMA is creating a Data and Digital Insights team to help us understand better how online markets work, the importance of data in these markets, what are the barriers to entry, what drives consumer behavior, and when the transparent nature of the Internet might increase the scope for dominance to become entrenched.
This should enhance our understanding of the digital economy and make sure our interventions and capabilities keep pace with the evolution of business models and practices. This welcoming of new evidence and the ability to assess it will of course influence a range of thinking within authorities, on markets, consumer work, mergers or even antitrust. Until then though, I will close with some arguments about why I feel it is incredibly important to hold the line and not let wooly, non-evidence based, populist influences affect antitrust law enforcement itself.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2018/04/CPI-Marsden.pdf
Marsden is Professor of Competition Law and Economics at the College of Europe, Bruges and Senior Director for Case Decision Groups at the Competition & Markets Authority, London.
Here is an excerpt from the concluding part of Marsden's article:
In many fast-moving and high tech markets, consumer engagement and data are key. It thus makes sense to divert loud but vague populist calls for action into joined-up assessments of how these markets work. Consumer law plays a crucial role here. So often we see consumer enforcement complementing competition enforcement, and vice versa. The complement is natural, since in both we are making sure that consumers can trust markets and helping them know that what they’re seeing is what they’re getting.
Online reviews, for example, bolster competition as people can make more informed choices, but this only works if reviews are trustworthy. Making sure that businesses abide by consumer protection law, that they treat their customers fairly, and in ways that engender trust, helps to create a more competitive marketplace. Firms have to work harder to offer better products, across all the competitive variables.
A CALL FOR EVIDENCE: Competition authorities can adapt further too. Competition laws are designed to adapt – but this doesn’t necessarily mean entirely new rules are required. The evolutionary process starts with deepening our understanding of how markets work. Can authorities stimulate this understanding, rather than always being on the back foot, or being presumed to be defending our corner from hipster and political intrusion?
As evidence-based authorities, is there not something blindingly obvious we could contribute to the calls for us to do more? Two things come to mind: a call for evidence, and at the same time, an enhancement of the tools we have to analyze evidence. This year, at the CMA, we are encouraging more fundamental research into trust in markets. This would likely be highly interdisciplinary in nature and would seek to identify which market practices are most likely to be considered unfair and to undermine trust in markets. We could, for example, test perceptions of the fairness of a range of practices, including those that are not transparent or where the consumer does not feel in control; practices that require undue effort or transactions costs to secure a good deal or practices that involve extreme forms of price discrimination. We want to understand the drivers of trust and mistrust in markets and improve our understanding of the challenges facing vulnerable groups of customers who are at high risk of experiencing poor outcomes in markets.
This could all be with a view to informing case selection, diagnosis of problems and the development of remedies. At the same time, we need to improve our ability to assess the evidence we will receive. All competition authorities need highly skilled economics and remedies teams to understand and examine markets and business models. To address the knowledge gaps regarding the use of data, though the CMA is creating a Data and Digital Insights team to help us understand better how online markets work, the importance of data in these markets, what are the barriers to entry, what drives consumer behavior, and when the transparent nature of the Internet might increase the scope for dominance to become entrenched.
This should enhance our understanding of the digital economy and make sure our interventions and capabilities keep pace with the evolution of business models and practices. This welcoming of new evidence and the ability to assess it will of course influence a range of thinking within authorities, on markets, consumer work, mergers or even antitrust. Until then though, I will close with some arguments about why I feel it is incredibly important to hold the line and not let wooly, non-evidence based, populist influences affect antitrust law enforcement itself.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2018/04/CPI-Marsden.pdf
This Start-Up Says It Wants to Fight Poverty. A Food Stamp Giant Is Blocking It
April 23, 2018. From https://www.nytimes.com/2018/04/23/technology/start-up-fight-poverty-food-stamp-giant-blocking-it.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=8&pgtype=sectionfront Author Steve Lohr
Four years ago, Jimmy Chen left a lucrative perch as a product manager at Facebook to found Propel, what he calls an “anti-poverty software company.”
In 2016, the Brooklyn start-up released a smartphone app that lets food stamp recipients easily look up how much money was left in their accounts, rather than call an 800 number or keep paper receipts. Today, one million food stamp participants use Propel’s app, and the start-up has added features like links to food coupons, healthy recipes, budgeting tools and job opportunities.
But in the last few months, the Propel app has been hobbled or become unavailable in many states, sometimes for weeks. Behind the slowdown is a big government contractor, Conduent, which runs the food stamp networks in 25 states, including New York, California and Pennsylvania. In those states, where 60 percent of Propel’s users live, Conduent maintains the database that Propel’s app uses to let people check their accounts.
The Propel-Conduent conflict offers a textbook case of a digital newcomer running into resistance from the old order.
April 23, 2018. From https://www.nytimes.com/2018/04/23/technology/start-up-fight-poverty-food-stamp-giant-blocking-it.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=8&pgtype=sectionfront Author Steve Lohr
Four years ago, Jimmy Chen left a lucrative perch as a product manager at Facebook to found Propel, what he calls an “anti-poverty software company.”
In 2016, the Brooklyn start-up released a smartphone app that lets food stamp recipients easily look up how much money was left in their accounts, rather than call an 800 number or keep paper receipts. Today, one million food stamp participants use Propel’s app, and the start-up has added features like links to food coupons, healthy recipes, budgeting tools and job opportunities.
But in the last few months, the Propel app has been hobbled or become unavailable in many states, sometimes for weeks. Behind the slowdown is a big government contractor, Conduent, which runs the food stamp networks in 25 states, including New York, California and Pennsylvania. In those states, where 60 percent of Propel’s users live, Conduent maintains the database that Propel’s app uses to let people check their accounts.
The Propel-Conduent conflict offers a textbook case of a digital newcomer running into resistance from the old order.
Ford to cede sedan market to foreign imports
Protectionist efforts by the US government appear not to have saved Ford's sedan automobile business. Industry rumors suggest that Chevrolet will also abandon sedans.
Ford's recent financial report is at https://media.ford.com/content/dam/fordmedia/North%20America/US/2018/04/25/1q18-financials.pdf
The report includes the following language describing its strategy:
• Building a winning portfolio and focusing on products and markets where Ford can win. For example, by 2020, almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles. Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America. Over the next few years, the Ford car portfolio in North America will transition to two vehicles – the best-selling Mustang and the all-new Focus Active crossover coming out next year. The company is also exploring new “white space” vehicle silhouettes that combine the best attributes of cars and utilities, such as higher ride height, space and versatility.
Protectionist efforts by the US government appear not to have saved Ford's sedan automobile business. Industry rumors suggest that Chevrolet will also abandon sedans.
Ford's recent financial report is at https://media.ford.com/content/dam/fordmedia/North%20America/US/2018/04/25/1q18-financials.pdf
The report includes the following language describing its strategy:
• Building a winning portfolio and focusing on products and markets where Ford can win. For example, by 2020, almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles. Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America. Over the next few years, the Ford car portfolio in North America will transition to two vehicles – the best-selling Mustang and the all-new Focus Active crossover coming out next year. The company is also exploring new “white space” vehicle silhouettes that combine the best attributes of cars and utilities, such as higher ride height, space and versatility.
In Walmart’s home town
By Don Allen Resnikoff
Recently I visited Walmart’s home town, Bentonville, Arkamsas. It is where Sam Walton operated a small five and dime store that was the forerunner of his enormous Walmart retail chain.
The Walton legacy in Bentonville is a strong one, and there are many who will admiringly tell you the story of Sam Walton as a humble and innovative entrepreneur who succeeded because of ingenuity, hard work, and good ability to work with people.
Sam’s autobiography was on the bookshelf of the Bentonville bed and breakfast where my wife and I stayed. It reinforces the very American story of Sam Walton’s success achieved from humble beginnings.
The autobiography, written with a professional co-author shortly before Sam Walton’s death (Sam Walton:Made in America:My Story, 1992, Doubleday), includes some rebuttal of complaints about Walmart as a bad corporate citizen. Part of the defense is that Walmart disrupted the retail business in the same positive way that A&P once disupted the grocery business: It brought large scale efficiencies to a business that had been small scale and inefficient. The result benefited consumers.
The autobiography argues that Walmart did not have the advantage of artificial barriers to competition, so competitors have been free to challenge Walmart. Kmart, Sears, and others have been serious competitors, but fell by the wayside because of self-inflicted management problems.
The autobiography is written in a popular style and addressed to a largely admiring audience, so the rebuttal of complaints about Walmart is limited. Of course it does not address more recent complaints of critics like Barry Lynn, who point to the low wages paid by Walmart to employees, as well as low wages paid to employees by Walmart suppliers. Barry Lynn argues that Walmart causes an array of problems, including use of market power to degrade the quality of products provided by Walmart suppliers.
Whatever the complaints made about Walmart, the Sam Walton legacy includes transforming Bentonville from a rural backwater to a model of small town living. Many middle class people live in the Bentonville area, some of whom are either Walmart employees or employees of suppliers that work with Walmart and do business in Bentonville. In 1950 Bentonville was a shabby small town, but now its small town square is almost Disneyland perfect, surrounded by prosperous businesses and attractive residences, many in spruced-up vintage buildings. We had dinner at a restaurant on the square that offered an interesting menu at prices just a bit lower than similar upscale Washington, D.C. restaurants.
The town adjoins the Crystal Bridges development, an extensive park-like area of great beauty that contains the Crystal Bridges Art Museum. Walton largesse allows the museum admission to be free. Exhibits are beautifully curated in a manner reminiscent of the National Galleries in Washington DC, and tend to be grouped by socially relevant themes. For example, an exhibit shown in cooperation with the Tate Museum focuses on art by black artists relevant to black political issues.
The elegance of the architecture of the Bentonville town-park-museum complex sponsored by the Walton family stands out in comparison with nearby areas like Springdale, where Tyson operates its chicken plants. Springdale is close to areas of great natural beauty, but the Bentonville level of integration of town and open space and attractive visiting spots is lacking. Interestingly, because of Tyson there are substantial areas in Springdale where nearly all residents are Spanish speaking and primarily of Mexican descent. Points of interest in Springdale include the Tyson’s company store, and some great small Mexican food stands and restaurants.
Further reading: A 201l article about Crystal Bridges Museum and the Walton heir who is the museum’s moving force: https://www.newyorker.com/magazine/2011/06/27/alices-wonderland
PS: By way of full disclosure, I made several purchases at the Walmart Neighborhood Store on the main square in Bentonville. Purchases included a bottle of wine, a roasted half chicken for a picnic, and a few other items. I paid by credit card. On the last stay of my stay in Bentonville I received an email from Walmart inviting me to be an occasional paid secret shopper for the company and provide reports about store conditions. I have not accepted.
Posted by Don Allen Resnikoff
By Don Allen Resnikoff
Recently I visited Walmart’s home town, Bentonville, Arkamsas. It is where Sam Walton operated a small five and dime store that was the forerunner of his enormous Walmart retail chain.
The Walton legacy in Bentonville is a strong one, and there are many who will admiringly tell you the story of Sam Walton as a humble and innovative entrepreneur who succeeded because of ingenuity, hard work, and good ability to work with people.
Sam’s autobiography was on the bookshelf of the Bentonville bed and breakfast where my wife and I stayed. It reinforces the very American story of Sam Walton’s success achieved from humble beginnings.
The autobiography, written with a professional co-author shortly before Sam Walton’s death (Sam Walton:Made in America:My Story, 1992, Doubleday), includes some rebuttal of complaints about Walmart as a bad corporate citizen. Part of the defense is that Walmart disrupted the retail business in the same positive way that A&P once disupted the grocery business: It brought large scale efficiencies to a business that had been small scale and inefficient. The result benefited consumers.
The autobiography argues that Walmart did not have the advantage of artificial barriers to competition, so competitors have been free to challenge Walmart. Kmart, Sears, and others have been serious competitors, but fell by the wayside because of self-inflicted management problems.
The autobiography is written in a popular style and addressed to a largely admiring audience, so the rebuttal of complaints about Walmart is limited. Of course it does not address more recent complaints of critics like Barry Lynn, who point to the low wages paid by Walmart to employees, as well as low wages paid to employees by Walmart suppliers. Barry Lynn argues that Walmart causes an array of problems, including use of market power to degrade the quality of products provided by Walmart suppliers.
Whatever the complaints made about Walmart, the Sam Walton legacy includes transforming Bentonville from a rural backwater to a model of small town living. Many middle class people live in the Bentonville area, some of whom are either Walmart employees or employees of suppliers that work with Walmart and do business in Bentonville. In 1950 Bentonville was a shabby small town, but now its small town square is almost Disneyland perfect, surrounded by prosperous businesses and attractive residences, many in spruced-up vintage buildings. We had dinner at a restaurant on the square that offered an interesting menu at prices just a bit lower than similar upscale Washington, D.C. restaurants.
The town adjoins the Crystal Bridges development, an extensive park-like area of great beauty that contains the Crystal Bridges Art Museum. Walton largesse allows the museum admission to be free. Exhibits are beautifully curated in a manner reminiscent of the National Galleries in Washington DC, and tend to be grouped by socially relevant themes. For example, an exhibit shown in cooperation with the Tate Museum focuses on art by black artists relevant to black political issues.
The elegance of the architecture of the Bentonville town-park-museum complex sponsored by the Walton family stands out in comparison with nearby areas like Springdale, where Tyson operates its chicken plants. Springdale is close to areas of great natural beauty, but the Bentonville level of integration of town and open space and attractive visiting spots is lacking. Interestingly, because of Tyson there are substantial areas in Springdale where nearly all residents are Spanish speaking and primarily of Mexican descent. Points of interest in Springdale include the Tyson’s company store, and some great small Mexican food stands and restaurants.
Further reading: A 201l article about Crystal Bridges Museum and the Walton heir who is the museum’s moving force: https://www.newyorker.com/magazine/2011/06/27/alices-wonderland
PS: By way of full disclosure, I made several purchases at the Walmart Neighborhood Store on the main square in Bentonville. Purchases included a bottle of wine, a roasted half chicken for a picnic, and a few other items. I paid by credit card. On the last stay of my stay in Bentonville I received an email from Walmart inviting me to be an occasional paid secret shopper for the company and provide reports about store conditions. I have not accepted.
Posted by Don Allen Resnikoff
Southwest Airlines sought more time last year to inspect jet-engine fan blades like the one that snapped off during one of its flights Tuesday in an accident that left a passenger dead.
The airline opposed a recommendation by the engine manufacturer to require ultrasonic inspections of certain fan blades within 12 months. Southwest said it needed more time, and it raised concern over the number of engines it would need to inspect. Other airlines also voiced objections.
It wasn't until after Tuesday's accident that the Federal Aviation Administration announced that it will soon make the inspections mandatory. It is unclear how many planes will be affected by the FAA order. Airlines including Southwest say they have begun inspections anyway.
From http://www.omaha.com/news/nation/southwest-airlines-sought-more-time-for-engine-inspections/article_383c4093-b2c7-5b1d-ba1a-be5e90442e36.html
The airline opposed a recommendation by the engine manufacturer to require ultrasonic inspections of certain fan blades within 12 months. Southwest said it needed more time, and it raised concern over the number of engines it would need to inspect. Other airlines also voiced objections.
It wasn't until after Tuesday's accident that the Federal Aviation Administration announced that it will soon make the inspections mandatory. It is unclear how many planes will be affected by the FAA order. Airlines including Southwest say they have begun inspections anyway.
From http://www.omaha.com/news/nation/southwest-airlines-sought-more-time-for-engine-inspections/article_383c4093-b2c7-5b1d-ba1a-be5e90442e36.html
FCC opens process to step up offensive on Chinese companies Huawei, ZTE
18 APR 2018
The Federal Communications Commission (FCC) launched a consultation process on a proposal to block smaller operators from using government funds to purchase equipment and services from vendors deemed a national security risk.
The move, announced in a statement, comes after FCC chairman Ajit Pai confirmed in a briefing last month [ https://www.mobileworldlive.com/featured-content/home-banner/fcc-moves-to-ban-vendors-deemed-security-threats/ ] that the regulator had prepared a draft document outlining laws to restrict operators from using money in the FCC’s $8 billion Universal Service Fund (USF) to purchase equipment from vendors on a ban list.
Such a move forms part of a wider offensive instigated by the US government, stepping up regulations against Chinese vendors Huawei and ZTE. This week, the US Department of Commerce banned US companies from selling components to ZTE [ https://www.mobileworldlive.com/featured-content/top-three/us-clamps-down-on-zte/ ], while Huawei’s efforts to establish a foothold in the US have also been thwarted.
Operators accessing the USF tend to be the country’s tier two and three operators, which target rural parts of the US. The country’s big four operators (AT&T, Verizon, Sprint and T-Mobile US) are already barred from using ZTE and Huawei equipment.
Feedback
The FCC said it is now seeking comment on the proposal to prohibit the use of government funds, stating it “alone cannot safeguard our networks from these threats”.
Comments are being sought on “a number of issues”, including: how best to implement the proposal going forward; what types of equipment and services should be covered by the rule; how the FCC can identify, and USF recipients learn, which suppliers are covered by the proposed rule; and the cost and benefits of the move.
FCC commissioner Jessica Rosenworcel said in a statement that she would vote to approve the proposal as it supports Congress’ concerns “about the potential for supply chain vulnerability to undermine national security”.
She added communications networks also face “other security threats that we cannot continue to ignore”.
Credit:https://www.mobileworldlive.com/featured-content/home-banner/fcc-opens-process-to-step-up-offensive-on-huawei-zte/
18 APR 2018
The Federal Communications Commission (FCC) launched a consultation process on a proposal to block smaller operators from using government funds to purchase equipment and services from vendors deemed a national security risk.
The move, announced in a statement, comes after FCC chairman Ajit Pai confirmed in a briefing last month [ https://www.mobileworldlive.com/featured-content/home-banner/fcc-moves-to-ban-vendors-deemed-security-threats/ ] that the regulator had prepared a draft document outlining laws to restrict operators from using money in the FCC’s $8 billion Universal Service Fund (USF) to purchase equipment from vendors on a ban list.
Such a move forms part of a wider offensive instigated by the US government, stepping up regulations against Chinese vendors Huawei and ZTE. This week, the US Department of Commerce banned US companies from selling components to ZTE [ https://www.mobileworldlive.com/featured-content/top-three/us-clamps-down-on-zte/ ], while Huawei’s efforts to establish a foothold in the US have also been thwarted.
Operators accessing the USF tend to be the country’s tier two and three operators, which target rural parts of the US. The country’s big four operators (AT&T, Verizon, Sprint and T-Mobile US) are already barred from using ZTE and Huawei equipment.
Feedback
The FCC said it is now seeking comment on the proposal to prohibit the use of government funds, stating it “alone cannot safeguard our networks from these threats”.
Comments are being sought on “a number of issues”, including: how best to implement the proposal going forward; what types of equipment and services should be covered by the rule; how the FCC can identify, and USF recipients learn, which suppliers are covered by the proposed rule; and the cost and benefits of the move.
FCC commissioner Jessica Rosenworcel said in a statement that she would vote to approve the proposal as it supports Congress’ concerns “about the potential for supply chain vulnerability to undermine national security”.
She added communications networks also face “other security threats that we cannot continue to ignore”.
Credit:https://www.mobileworldlive.com/featured-content/home-banner/fcc-opens-process-to-step-up-offensive-on-huawei-zte/
A looming trade war between the United States and China has put Qualcomm, one of America’s largest technology companies, squarely in the middle of the battlefield.
A major supplier in both China and the United States, the San Diego-based chip maker has long managed to play the trading relationship between the world’s two largest economies to its advantage. But an escalating trade battle over which country will dominate the technologies of the future is now threatening Qualcomm’s business and its growth.
On Monday, Qualcomm lost the ability to export semiconductors [ https://www.nytimes.com/2018/04/16/technology/chinese-tech-company-blocked-from-buying-american-components.html ] to one of its biggest customers after the United States banned Chinese telecom equipment maker ZTE Corporation from purchasing American technology for seven years.
In China, Qualcomm’s plan to acquire NXP Semiconductors, a critical part of its growth strategy, has been stalled by a prolonged antitrust review, a move critics see as Chinese retaliation for President Trump’s aggressive trade moves.
The White House, which has already threatened tariffs on more than $150 billion in Chinese goods, is preparing new restrictions on Chinese investments in the United States and could limit American partnerships with Chinese firms abroad. Such a move could place further restraints on American companies with advanced technology, like Qualcomm, General Electric and Boeing, as they seek to form overseas partnerships. It would also likely incite more retaliation from the Chinese.
On Tuesday, the administration advanced a new rule
[ https://www.nytimes.com/2018/04/17/technology/china-huawei-washington.html ] that would limit the ability of Chinese telecommunications companies, including Huawei, one of Qualcomm’s competitors and a customer, to sell their products in America.
Credit: https://www.nytimes.com/2018/04/18/us/politics/qualcomm-us-china-trade-war.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
A major supplier in both China and the United States, the San Diego-based chip maker has long managed to play the trading relationship between the world’s two largest economies to its advantage. But an escalating trade battle over which country will dominate the technologies of the future is now threatening Qualcomm’s business and its growth.
On Monday, Qualcomm lost the ability to export semiconductors [ https://www.nytimes.com/2018/04/16/technology/chinese-tech-company-blocked-from-buying-american-components.html ] to one of its biggest customers after the United States banned Chinese telecom equipment maker ZTE Corporation from purchasing American technology for seven years.
In China, Qualcomm’s plan to acquire NXP Semiconductors, a critical part of its growth strategy, has been stalled by a prolonged antitrust review, a move critics see as Chinese retaliation for President Trump’s aggressive trade moves.
The White House, which has already threatened tariffs on more than $150 billion in Chinese goods, is preparing new restrictions on Chinese investments in the United States and could limit American partnerships with Chinese firms abroad. Such a move could place further restraints on American companies with advanced technology, like Qualcomm, General Electric and Boeing, as they seek to form overseas partnerships. It would also likely incite more retaliation from the Chinese.
On Tuesday, the administration advanced a new rule
[ https://www.nytimes.com/2018/04/17/technology/china-huawei-washington.html ] that would limit the ability of Chinese telecommunications companies, including Huawei, one of Qualcomm’s competitors and a customer, to sell their products in America.
Credit: https://www.nytimes.com/2018/04/18/us/politics/qualcomm-us-china-trade-war.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
Short-term dockless rental bikes may be a public nuisance, and they may also be unprofitable
See http://www.sandiegouniontribune.com/business/energy-green/sd-fi-dockless-profitable-20180415-story.html#nws=true
The San Diego Journal article shows a a picture that may be worth a thousand words. It shows a big pile of dockless bikes on a street in Beijng China, where dockless bikes have been around for a while. DR
See http://www.sandiegouniontribune.com/business/energy-green/sd-fi-dockless-profitable-20180415-story.html#nws=true
The San Diego Journal article shows a a picture that may be worth a thousand words. It shows a big pile of dockless bikes on a street in Beijng China, where dockless bikes have been around for a while. DR
Mirosoft forces obsolescence of Office 2007
Microsoft may not be dominant in many things as it was 20 years ago, but it is still a major force in word processing and related MS Office Suite products, and some others. That is simply because the applications are in common use. Other cheaper software offerings offer similar capabilities, like Apache Open Office, which is free. But Open Office word processing is not so convenient when colleagues are using Word.
As I recently discovered when trying to make an old laptop useful, in late 2017 Microsoft used its market position to make Office 2007 applications obsolete, or at least much less useful. No matter that Word 2007 and other applications work quite well, and that people around the world use them. Microsoft wishes you to switch to newer alternatives, which are not cheap. Following is a media piece from October 2017 describing the MS policy. DR
* * *
Microsoft is urging customers still on Outlook 2007 and Office 2007 to upgrade as each of the products ran out of extended support on Tuesday.
That means no more security updates, feature updates, support or technical notes for the products, which Microsoft has supported for the past decade.
Microsoft wants customers on Office 2007 to plan to migrate to Office 365 in the cloud or to upgrade to Office 2016.
Office 2007 introduced Microsoft's "ribbon" interface that brought a series of tabbed toolbars with each ribbon containing related buttons.
For customers that have already use Office 365 that still use Outlook 2007, it will be important to upgrade by the end of October [2017], after which the product won't allow users to access Exchange Online mailboxes though the Office 365 portal.
"Customers who use Office 365 will have noted that there is a change to the supported client connectivity methods. Outlook Anywhere is being replaced with MAPI/HTTP. Outlook 2007 does not support MAPI/HTTP, and as such will be unable to connect," Microsoft highlights in a send-off note for the email client.
Come October 31, Microsoft will drop support for the RPC over HTTP protocol, also known as Outlook Anywhere, for accessing mail data from Exchange Online. The new protocol, MAPI over HTTP, is sturdier and supports multi-factor authentication for Office 365, according to Microsoft.
Microsoft didn't backport the protocol to Outlook 2007 as it would be past its extended support date by the time it cut off Outlook Anywhere.
Microsoft has a full list of Office 2007 products and their exact cut off dates here and Outlook 2007 here.
Unlike previous years Microsoft is not offering enterprise customers extended support for Office 2007 through its custom support contracts. The same goes for its other Office products, including Exchange Server; Office Suites; SharePoint Server; Office Communications Server; Lync Server; Skype for Business Server; Project Server and Visio.
Microsoft said demand for custom support has declined with greater adoption of Office 365.
See https://www.zdnet.com/article/microsoft-just-ended-support-for-office-2007-and-outlook-2007/
Microsoft may not be dominant in many things as it was 20 years ago, but it is still a major force in word processing and related MS Office Suite products, and some others. That is simply because the applications are in common use. Other cheaper software offerings offer similar capabilities, like Apache Open Office, which is free. But Open Office word processing is not so convenient when colleagues are using Word.
As I recently discovered when trying to make an old laptop useful, in late 2017 Microsoft used its market position to make Office 2007 applications obsolete, or at least much less useful. No matter that Word 2007 and other applications work quite well, and that people around the world use them. Microsoft wishes you to switch to newer alternatives, which are not cheap. Following is a media piece from October 2017 describing the MS policy. DR
* * *
Microsoft is urging customers still on Outlook 2007 and Office 2007 to upgrade as each of the products ran out of extended support on Tuesday.
That means no more security updates, feature updates, support or technical notes for the products, which Microsoft has supported for the past decade.
Microsoft wants customers on Office 2007 to plan to migrate to Office 365 in the cloud or to upgrade to Office 2016.
Office 2007 introduced Microsoft's "ribbon" interface that brought a series of tabbed toolbars with each ribbon containing related buttons.
For customers that have already use Office 365 that still use Outlook 2007, it will be important to upgrade by the end of October [2017], after which the product won't allow users to access Exchange Online mailboxes though the Office 365 portal.
"Customers who use Office 365 will have noted that there is a change to the supported client connectivity methods. Outlook Anywhere is being replaced with MAPI/HTTP. Outlook 2007 does not support MAPI/HTTP, and as such will be unable to connect," Microsoft highlights in a send-off note for the email client.
Come October 31, Microsoft will drop support for the RPC over HTTP protocol, also known as Outlook Anywhere, for accessing mail data from Exchange Online. The new protocol, MAPI over HTTP, is sturdier and supports multi-factor authentication for Office 365, according to Microsoft.
Microsoft didn't backport the protocol to Outlook 2007 as it would be past its extended support date by the time it cut off Outlook Anywhere.
Microsoft has a full list of Office 2007 products and their exact cut off dates here and Outlook 2007 here.
Unlike previous years Microsoft is not offering enterprise customers extended support for Office 2007 through its custom support contracts. The same goes for its other Office products, including Exchange Server; Office Suites; SharePoint Server; Office Communications Server; Lync Server; Skype for Business Server; Project Server and Visio.
Microsoft said demand for custom support has declined with greater adoption of Office 365.
See https://www.zdnet.com/article/microsoft-just-ended-support-for-office-2007-and-outlook-2007/
FDA's Gottlieb warns drug companies: don't game the generics system
From the speech at https://www.fda.gov/NewsEvents/Speeches/ucm584195.htm:
One of the practices that concerns me the most is when branded firms “game” the system: taking advantage of certain rules, or exploiting loopholes in our system, to delay generic approval – and thereby extend a drug’s monopoly beyond what Congress intended.
I see this clearly, for example, in steps branded companies sometimes take to make it hard, or altogether impossible, for generic firms to get access to the doses of the branded drug needed in order to complete bioequivalence studies that FDA requires for a generic approval.
Consider this: FDA requires generic firms to complete certain bioequivalence and bioavailability studies as a condition of the approval of a generic drug. To do these studies, they need to purchase doses of the branded drug that they seek to copy, to prove that the generic copy performs the same way original medicine.
The generic companies are willing to go into the market and buy these branded doses at full market price. They’re not asking for a discount.
They’re just asking for the right to be able to buy the drug at its retail price, just like a pharmacy or a hospital can make these legal purchases.
But we know that branded companies sometimes adopt tactics to make it nearly impossible for the generic firms to accumulate the doses they need to run their studies. That’s a real concern of mine.
We have a system that relies on, and requires, the ability of generic firms to conduct certain studies for approval.
When drug manufacturers game the system in ways such as this, they upend the generic drug framework created by Hatch Waxman.
The effects of this gaming do not end within FDA or drug manufacturers. Medicare relies on this process working to help make sure its beneficiaries can get access to the benefits of low cost generics.
Patients depend on this system. So does innovation. I’ll say this plainly:
Our economic model, which rewards highly innovative drugs with the opportunity to hold monopolies for a limited period of time through patents and exclusivities, and to freely price their products to a measure of the value that a transformative drug offers, also depends on the generic approval process working as intended.
It depends on the ability to have vigorous competition once those patents and exclusivities have lapsed.
Our system would not have functioned so well for so long without this carefully crafted balance between access and innovation.
If innovators want the current structure to continue to work, but they actively prevent certain parts of the system from functioning as Congress intended, then at some point, they’ll find more advocacy for moving away from this incentive based model.
From the speech at https://www.fda.gov/NewsEvents/Speeches/ucm584195.htm:
One of the practices that concerns me the most is when branded firms “game” the system: taking advantage of certain rules, or exploiting loopholes in our system, to delay generic approval – and thereby extend a drug’s monopoly beyond what Congress intended.
I see this clearly, for example, in steps branded companies sometimes take to make it hard, or altogether impossible, for generic firms to get access to the doses of the branded drug needed in order to complete bioequivalence studies that FDA requires for a generic approval.
Consider this: FDA requires generic firms to complete certain bioequivalence and bioavailability studies as a condition of the approval of a generic drug. To do these studies, they need to purchase doses of the branded drug that they seek to copy, to prove that the generic copy performs the same way original medicine.
The generic companies are willing to go into the market and buy these branded doses at full market price. They’re not asking for a discount.
They’re just asking for the right to be able to buy the drug at its retail price, just like a pharmacy or a hospital can make these legal purchases.
But we know that branded companies sometimes adopt tactics to make it nearly impossible for the generic firms to accumulate the doses they need to run their studies. That’s a real concern of mine.
We have a system that relies on, and requires, the ability of generic firms to conduct certain studies for approval.
When drug manufacturers game the system in ways such as this, they upend the generic drug framework created by Hatch Waxman.
The effects of this gaming do not end within FDA or drug manufacturers. Medicare relies on this process working to help make sure its beneficiaries can get access to the benefits of low cost generics.
Patients depend on this system. So does innovation. I’ll say this plainly:
Our economic model, which rewards highly innovative drugs with the opportunity to hold monopolies for a limited period of time through patents and exclusivities, and to freely price their products to a measure of the value that a transformative drug offers, also depends on the generic approval process working as intended.
It depends on the ability to have vigorous competition once those patents and exclusivities have lapsed.
Our system would not have functioned so well for so long without this carefully crafted balance between access and innovation.
If innovators want the current structure to continue to work, but they actively prevent certain parts of the system from functioning as Congress intended, then at some point, they’ll find more advocacy for moving away from this incentive based model.
When the NHTSA tracked user compliance with auto safety recalls through Vehicle Identification Numbers (VIN), they found that just 61 percent of recalled vehicles get repaired.
Recall notices are typically sent out multiple times for a single recall over the course of 18 months.
“The results suggest a discrepancy between the good intentions of automobile owners and what they actually do when they receive a recall notice,” said Wayne Mitchell, Stericycle's Director of Automotive Solutions.
Traditional outreach methods may be failing when it comes to recalls. Only 46 percent of respondents stated they'd gotten between one and four auto recall notices, while 37 percent claim to have never received any.
“This is another example where communication techniques come into play,” said one commenterl. “A multichannel approach – including emails, text messages, and outbound calls – has been proven to raise repair rates, and it may be even more beneficial among millennials.”
From https://www.autocreditexpress.com/blog/new-survey-suggests-car-owners-don-t-act-on-recall-notices/
Editor's note: GM recently pointed out that State inspection systems could require inspections on cars subject to safety recalls, but that most States don't do it.
Recall notices are typically sent out multiple times for a single recall over the course of 18 months.
“The results suggest a discrepancy between the good intentions of automobile owners and what they actually do when they receive a recall notice,” said Wayne Mitchell, Stericycle's Director of Automotive Solutions.
Traditional outreach methods may be failing when it comes to recalls. Only 46 percent of respondents stated they'd gotten between one and four auto recall notices, while 37 percent claim to have never received any.
“This is another example where communication techniques come into play,” said one commenterl. “A multichannel approach – including emails, text messages, and outbound calls – has been proven to raise repair rates, and it may be even more beneficial among millennials.”
From https://www.autocreditexpress.com/blog/new-survey-suggests-car-owners-don-t-act-on-recall-notices/
Editor's note: GM recently pointed out that State inspection systems could require inspections on cars subject to safety recalls, but that most States don't do it.
From foodtruckoperators.com: DC food truck owners object to new system for assigning prime city locations
April 13, 2018
The D.C., Maryland and Virginia Food Truck Association has sent a letter to the Department of Consumer and Regulatory Affairs in Washington, D.C., stating its opposition to a change in the way the department decides which trucks get the best spots in the city.
The new policy limits every food truck business — no matter how many trucks it operates — to one lottery entry to win the prime locations.
When some of those businesses called DCRA to find out why policy change was made, they were informed that the regulations were changed this month to prevent multitruck businesses from entering more than one truck in the lottery, according to the letter.
The association claims the policy discourages growth in the food truck segment. It also claims that the policy discriminates against one group of small businesses in favor of another group; that there are better ways for the department to address the problems it has identified; and that the manner in which the policy was implemented violates the Administrative Procedure Act.
April 13, 2018
The D.C., Maryland and Virginia Food Truck Association has sent a letter to the Department of Consumer and Regulatory Affairs in Washington, D.C., stating its opposition to a change in the way the department decides which trucks get the best spots in the city.
The new policy limits every food truck business — no matter how many trucks it operates — to one lottery entry to win the prime locations.
When some of those businesses called DCRA to find out why policy change was made, they were informed that the regulations were changed this month to prevent multitruck businesses from entering more than one truck in the lottery, according to the letter.
The association claims the policy discourages growth in the food truck segment. It also claims that the policy discriminates against one group of small businesses in favor of another group; that there are better ways for the department to address the problems it has identified; and that the manner in which the policy was implemented violates the Administrative Procedure Act.
From American Antitrust Institute
Class Action Issues Update April 2018
The American Antitrust Institute seeks to preserve the effectiveness of antitrust class actions as a central component of ensuring the vitality of private antitrust enforcement. As part of its efforts, AAI issues periodic updates on developments in the courts and elsewhere that may affect this important device for protecting competition and consumers. This update covers developments since our Fall 2017 update.
Read More [http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohl5lsWX1y4C3sH8um18xz8XlQDZU3t6SYyKlsRa8uQER1EJh-igsLO9mdUBf_4MqVtQV18uHch_UU4nN5mBqmzBsxXcqGBnRPNMmIMoPcJu4XsEuxyvI3uqOYXddIzP9Ay104ZoYkbP6vngKOeo_aGmMA4Pdem9wCU_QKuIumWEQ6ieIZ-zCtT3Q==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
AAI Highlights Need to Realign Merger Remedies With the Goals of Antitrust
In a white paper released today "Realigning Merger Remedies with the Goals of Antitrust," [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ] the American Antitrust Institute makes the case for why remedies policy may be at an important inflection point. The paper notes that we do not yet know the full extent to which rising concentration, slowing rates of startups, and widening inequality gaps are the product of the lax antitrust enforcement that has prevailed in U.S. for three decades. But as the story continues to unfold, it remains clear that merger enforcement should be high on the antitrust agenda.
Read More [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
Class Action Issues Update April 2018
The American Antitrust Institute seeks to preserve the effectiveness of antitrust class actions as a central component of ensuring the vitality of private antitrust enforcement. As part of its efforts, AAI issues periodic updates on developments in the courts and elsewhere that may affect this important device for protecting competition and consumers. This update covers developments since our Fall 2017 update.
Read More [http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohl5lsWX1y4C3sH8um18xz8XlQDZU3t6SYyKlsRa8uQER1EJh-igsLO9mdUBf_4MqVtQV18uHch_UU4nN5mBqmzBsxXcqGBnRPNMmIMoPcJu4XsEuxyvI3uqOYXddIzP9Ay104ZoYkbP6vngKOeo_aGmMA4Pdem9wCU_QKuIumWEQ6ieIZ-zCtT3Q==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
AAI Highlights Need to Realign Merger Remedies With the Goals of Antitrust
In a white paper released today "Realigning Merger Remedies with the Goals of Antitrust," [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ] the American Antitrust Institute makes the case for why remedies policy may be at an important inflection point. The paper notes that we do not yet know the full extent to which rising concentration, slowing rates of startups, and widening inequality gaps are the product of the lax antitrust enforcement that has prevailed in U.S. for three decades. But as the story continues to unfold, it remains clear that merger enforcement should be high on the antitrust agenda.
Read More [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
The text of Zuckerberg's Facebook mea culpa testimony to Congress is here:
https://www.politico.com/story/2018/04/09/transcript-mark-zuckerberg-testimony-to-congress-on-cambridge-analytica-509978
https://www.politico.com/story/2018/04/09/transcript-mark-zuckerberg-testimony-to-congress-on-cambridge-analytica-509978
Towns cracking down on GPS app shortcuts; do apps risk legal liability when shortcuts cause harm?
- UPI.comhttps://www.upi.com/Towns-cracking-down-on-GPS-app.../4341517446997/
From the article:
When larger thoroughfares clog with heavy traffic, GPS apps like Waze, Google Maps and Apple Maps often will reroute drivers.
In the town of Leonia, N.J., a town with a population of just under 10,000 about a quarter-mile from the George Washington Bridge, a new ordinance went into effect there in January leveling a $200 fine against non-resident drivers who use the town as a shortcut.
"They should stay on the highway," resident Carlos Gomez told WCBS-TV in New York. "Why bother us?" Leonia Mayor Judah Zeigler said he hopes the legislation will inspire the app makers to remove the city's side streets from their rerouting algorithms.
"They will do that once this legislation takes effect," he said.
But with Google Maps, at least, those roads won't be removed from the apps so much as restrictions will be factored in.
"Municipalities and agencies responsible for managing roads and reducing traffic are free to take measures according to their individual needs (e.g. speed humps, changing speed limits, adding traffic lights)," a Google representative told UPI. "Google Maps will then strive to reflect that reality completely and accurately in our map model. And our automated routing optimization algorithm will inherently take those parameters into account in every route created in Google Maps."
Editor note: Does Google Maps and Wayz (now owned by Google) risk legal liability when the suggested shortcuts are dangerous and cause damage? See the report at https://www.cbsnews.com/news/los-angeles-baxter-street-accidents-waze-traffic/ showing accidents and damage caused by GPS induced shortcuts
- UPI.comhttps://www.upi.com/Towns-cracking-down-on-GPS-app.../4341517446997/
From the article:
When larger thoroughfares clog with heavy traffic, GPS apps like Waze, Google Maps and Apple Maps often will reroute drivers.
In the town of Leonia, N.J., a town with a population of just under 10,000 about a quarter-mile from the George Washington Bridge, a new ordinance went into effect there in January leveling a $200 fine against non-resident drivers who use the town as a shortcut.
"They should stay on the highway," resident Carlos Gomez told WCBS-TV in New York. "Why bother us?" Leonia Mayor Judah Zeigler said he hopes the legislation will inspire the app makers to remove the city's side streets from their rerouting algorithms.
"They will do that once this legislation takes effect," he said.
But with Google Maps, at least, those roads won't be removed from the apps so much as restrictions will be factored in.
"Municipalities and agencies responsible for managing roads and reducing traffic are free to take measures according to their individual needs (e.g. speed humps, changing speed limits, adding traffic lights)," a Google representative told UPI. "Google Maps will then strive to reflect that reality completely and accurately in our map model. And our automated routing optimization algorithm will inherently take those parameters into account in every route created in Google Maps."
Editor note: Does Google Maps and Wayz (now owned by Google) risk legal liability when the suggested shortcuts are dangerous and cause damage? See the report at https://www.cbsnews.com/news/los-angeles-baxter-street-accidents-waze-traffic/ showing accidents and damage caused by GPS induced shortcuts
From Open Markets Institute: Amazon poses many grave threats to the wellbeing of the American people
Editor's note: In the discussion and reading list that follows, OMI presents arguments that Amazon is a monopolist. The OMI discussion and many of the items on the reading list are controversial for some experienced antitrust enforcers. Some experienced antitrust enforcers feel it is painting with too broad a brush to say that the solution to Google, Facebook, and Amazon market power is a return to the politically popular antitrust enforcement spirit of an earlier day. Some enforcers take exception to antitrust approaches they see as more political than practical. They see politically oriented antitrust as ignoring antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results. My own opinion (for which I take full responsibility) is that there is room for OMI style politically oriented or popular antitrust to coexist with the more traditional sort of analysis that the USDOJ or private enforcers must use when they take cases to court. I see OMI as a force for good in the spirit of Barry Lynn, educating the public to the problems often caused by too-big companies. DR
The corporation was built to monopolize multiple markets vital to the functioning of our society and democracy. It uses its power in ways that harm the interests of workers, entrepreneurs, authors, musicians, and innovators, as well the public at large and communities from coast to coast. At Open Markets we began to shine a light on Amazon’s power a decade ago. As the following list of articles by our team and close allies details, over those years we helped Americans better understand the structure of Amazon and the nature of its power.
A steadily growing list of political leaders is speaking out against Amazon and its monopolies. This includes senators Elizabeth Warren (D-MA), Marco Rubio (S-FL), Bernie Sanders (D-VT), Cory Booker (D-NJ), and Orrin Hatch (R-UT). It also includes Representatives Keith Ellison (D-MN), Ro Khanna (D-CA) and many other members of Congress. Unfortunately, in recent years, antitrust law enforcers in the Department of Justice and the Federal Trade Commission not only ignored the pressing need to act, they sometimes used their power in ways that actually made Amazon more powerful.
During the last presidential campaign, then-candidate Donald Trump also began to target Amazon’s monopoly. He usually did so while also targeting the Washington Post, which has provided vitally important oversight of his candidacy and Administration, and which is personally owned by Amazon CEO Jeff Bezos. Until last week, the President’s comments had little practical effect. But when he began to threaten to use his power to raise the postal rates Amazon pays to deliver its packages, the corporation’s stock price fell suddenly and sharply.
At OMI we condemn the President’s targeting of specific newspapers and corporations in the strongest terms. Such comments are a threat to the rule of law. They are a threat to the freedom of the press. They have no place in the United States.
By the same reasoning, it is also vital that law enforcers and policymakers across America – at both the Federal and state levels – continue to move swiftly to address the clear and present threats posed by Amazon. To choose to ignore Amazon’s great and fast-growing threat to the American economy and the wellbeing of the American people – because Donald Trump verbally overstepped his constitutional bounds – obviously also amounts to a threat to the rule of law.
At OMI, we believe it is time for leaders in Congress to step up and fulfill their constitutional duty to provide a clear check on this Administration and thereby protect the integrity of America’s antimonopoly law enforcement regimes.
Recommended Articles for Understanding Amazon
Editor's note: In the discussion and reading list that follows, OMI presents arguments that Amazon is a monopolist. The OMI discussion and many of the items on the reading list are controversial for some experienced antitrust enforcers. Some experienced antitrust enforcers feel it is painting with too broad a brush to say that the solution to Google, Facebook, and Amazon market power is a return to the politically popular antitrust enforcement spirit of an earlier day. Some enforcers take exception to antitrust approaches they see as more political than practical. They see politically oriented antitrust as ignoring antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results. My own opinion (for which I take full responsibility) is that there is room for OMI style politically oriented or popular antitrust to coexist with the more traditional sort of analysis that the USDOJ or private enforcers must use when they take cases to court. I see OMI as a force for good in the spirit of Barry Lynn, educating the public to the problems often caused by too-big companies. DR
The corporation was built to monopolize multiple markets vital to the functioning of our society and democracy. It uses its power in ways that harm the interests of workers, entrepreneurs, authors, musicians, and innovators, as well the public at large and communities from coast to coast. At Open Markets we began to shine a light on Amazon’s power a decade ago. As the following list of articles by our team and close allies details, over those years we helped Americans better understand the structure of Amazon and the nature of its power.
A steadily growing list of political leaders is speaking out against Amazon and its monopolies. This includes senators Elizabeth Warren (D-MA), Marco Rubio (S-FL), Bernie Sanders (D-VT), Cory Booker (D-NJ), and Orrin Hatch (R-UT). It also includes Representatives Keith Ellison (D-MN), Ro Khanna (D-CA) and many other members of Congress. Unfortunately, in recent years, antitrust law enforcers in the Department of Justice and the Federal Trade Commission not only ignored the pressing need to act, they sometimes used their power in ways that actually made Amazon more powerful.
During the last presidential campaign, then-candidate Donald Trump also began to target Amazon’s monopoly. He usually did so while also targeting the Washington Post, which has provided vitally important oversight of his candidacy and Administration, and which is personally owned by Amazon CEO Jeff Bezos. Until last week, the President’s comments had little practical effect. But when he began to threaten to use his power to raise the postal rates Amazon pays to deliver its packages, the corporation’s stock price fell suddenly and sharply.
At OMI we condemn the President’s targeting of specific newspapers and corporations in the strongest terms. Such comments are a threat to the rule of law. They are a threat to the freedom of the press. They have no place in the United States.
By the same reasoning, it is also vital that law enforcers and policymakers across America – at both the Federal and state levels – continue to move swiftly to address the clear and present threats posed by Amazon. To choose to ignore Amazon’s great and fast-growing threat to the American economy and the wellbeing of the American people – because Donald Trump verbally overstepped his constitutional bounds – obviously also amounts to a threat to the rule of law.
At OMI, we believe it is time for leaders in Congress to step up and fulfill their constitutional duty to provide a clear check on this Administration and thereby protect the integrity of America’s antimonopoly law enforcement regimes.
Recommended Articles for Understanding Amazon
- Lina Khan, Amazon is a 21st-century railroad: Anti-trust expert, CNBC (2018)
- Stacy Mitchell, Amazon Doesn’t Just Want to Dominate the Market—It Wants to Become the Market, The Nation (2018)
- Matt Stoller, The Return of Monopoly, The New Republic (2017)
- Lina Khan, Amazon Bites Off Even More Monopoly Power, The New York Times (2017)
- David Dayen, The 238 Attempted Bribes of Amazon Should Be Illegal, The New Republic (2017)
- Lina Khan, Amazon's Antitrust Paradox, Yale Law Journal (2017)
- Stacy Mitchell and Olivia Lavecchia, How Amazon’s Tightening Grip on the Economy Is Stifling Competition, Eroding Jobs, and Threatening Communities, Institute for Local Self-Reliance (2016)
- Daniel Kolitz, Is Amazon Evil and Am I Evil for Using It?, Gizmodo(2016)
- David Streitfeld, Accusing Amazon of Antitrust Violations, Authors and Booksellers Demand Inquiry, The New York Times (2015)
- Lina Khan, What everyone’s getting wrong about Amazon, Quartz(2014)
- Frank Foer, Amazon Must Be Stopped, The New Republic (2014)
- Barry C. Lynn, The Real Bad Guy in the E-Book Price Fixing Case, Slate(2012)
- Barry C. Lynn, Killing the Competition, Harpers (2012)
California lawsuit says Toyota Prius cars have defects in the intelligent power modules (IPMs)
By David A. Wood
, CarComplaints.com February 5, 2018 — A Toyota Prius intelligent power module (IPM) recall and warranty extension weren't good enough for a California driver who filed a lawsuit against the automaker.
According to the lawsuit, 2010-2016 Toyota Prius cars have defects in the hybrid systems that cause the cars to stall, including while traveling at highway speeds.
The lawsuit references a 2014 Toyota warranty extension (ZE3) for about 711,000 model year 2010-2014 Prius cars nationwide. The extension involves the intelligent power module (IPM) located inside the inverter assembly and covers failure of the IPM and other internal inverter components potentially damaged by IPM failure.
This condition is indicated by diagnostic trouble codes P0A94, P324E, P3004 or P0A1A.
If any of those codes exist, Toyota says various warning lights will illuminate and the car will enter fail-safe mode, also called limp-home mode.
To qualify for the warranty extension, Prius owners must have had repairs made under a 2014 IPM recall.
Toyota recalled nearly 700,000 model year 2010-2014 Prius cars in 2014 because of the intelligent power modules (IPMs) with sensors that can become damaged by high temperatures.
As mentioned in the warranty extension, the recall described warning lights activating and the Prius going into limp-home mode. Toyota also said the hybrid system could completely shut down and cause the Prius to stall.
The recall, which began in March 2014, saw Toyota dealers update software for the motor/generator control and hybrid electronic control units. For a vehicle that had already experienced a failure of the inverter before the software update, the dealer replaced the inverter assembly.
The plaintiff says Toyota's previous actions didn't solve the IPM problems because the automaker wanted to save money on parts, and the software Toyota used allegedly did nothing but cause more problems.
According to the plaintiff, the software update affected the ability of the cars to accelerate properly. Calling the Toyota Prius recall a "sham," the plaintiff says drivers, occupants and others on the roads are at risk because the automaker took the cheap way out.
The California lawsuit also alleges replacing the IPM can cost thousands of dollars and replacing one bad module with another faulty IPM does nothing to help the car.
Included in the proposed class-action are current and former California owners and lessees of 2010-2016 Prius cars who paid their own money related to the intelligent power modules.
The Toyota Prius IPM lawsuit was filed in the Los Angeles County Superior Court of California - Jevdet Rexhepi, et al., v. Toyota Motor Sales USA Inc.
The plaintiff is represented by Beasley, Allen, Crow, Methvin, Portis, & Miles PC, Cuneo Gilbert & LaDuca LLP, DiCello Levitt & Casey, and Fazio Micheletti LLP.
CarComplaints.com has complaints submitted by owners of the Toyota Prius cars named in the IPM lawsuit.
By David A. Wood
, CarComplaints.com February 5, 2018 — A Toyota Prius intelligent power module (IPM) recall and warranty extension weren't good enough for a California driver who filed a lawsuit against the automaker.
According to the lawsuit, 2010-2016 Toyota Prius cars have defects in the hybrid systems that cause the cars to stall, including while traveling at highway speeds.
The lawsuit references a 2014 Toyota warranty extension (ZE3) for about 711,000 model year 2010-2014 Prius cars nationwide. The extension involves the intelligent power module (IPM) located inside the inverter assembly and covers failure of the IPM and other internal inverter components potentially damaged by IPM failure.
This condition is indicated by diagnostic trouble codes P0A94, P324E, P3004 or P0A1A.
If any of those codes exist, Toyota says various warning lights will illuminate and the car will enter fail-safe mode, also called limp-home mode.
To qualify for the warranty extension, Prius owners must have had repairs made under a 2014 IPM recall.
Toyota recalled nearly 700,000 model year 2010-2014 Prius cars in 2014 because of the intelligent power modules (IPMs) with sensors that can become damaged by high temperatures.
As mentioned in the warranty extension, the recall described warning lights activating and the Prius going into limp-home mode. Toyota also said the hybrid system could completely shut down and cause the Prius to stall.
The recall, which began in March 2014, saw Toyota dealers update software for the motor/generator control and hybrid electronic control units. For a vehicle that had already experienced a failure of the inverter before the software update, the dealer replaced the inverter assembly.
The plaintiff says Toyota's previous actions didn't solve the IPM problems because the automaker wanted to save money on parts, and the software Toyota used allegedly did nothing but cause more problems.
According to the plaintiff, the software update affected the ability of the cars to accelerate properly. Calling the Toyota Prius recall a "sham," the plaintiff says drivers, occupants and others on the roads are at risk because the automaker took the cheap way out.
The California lawsuit also alleges replacing the IPM can cost thousands of dollars and replacing one bad module with another faulty IPM does nothing to help the car.
Included in the proposed class-action are current and former California owners and lessees of 2010-2016 Prius cars who paid their own money related to the intelligent power modules.
The Toyota Prius IPM lawsuit was filed in the Los Angeles County Superior Court of California - Jevdet Rexhepi, et al., v. Toyota Motor Sales USA Inc.
The plaintiff is represented by Beasley, Allen, Crow, Methvin, Portis, & Miles PC, Cuneo Gilbert & LaDuca LLP, DiCello Levitt & Casey, and Fazio Micheletti LLP.
CarComplaints.com has complaints submitted by owners of the Toyota Prius cars named in the IPM lawsuit.
Analysts criticize Apple Pay nag, call it ‘antitrust behavior’
Excerpt from CPI on April 3, 2018, from WSJ article [https://www.competitionpolicyinternational.com/author/nancy-2/ ]
Apple is prompting users of its iPhone to enroll in Apple Pay. Critics said the strategy may give rivals some opportunity against the tech giant. Analysts and user-interface experts are criticizing this describing it as as “antitrust behavior.”
The prompts to enroll in Apple Pay are tied to the iPhone’s most recent operating system update. Users who do not enter their credit card information for Apple Pay upon setting up their phones will see a red circle that denotes incomplete setup. Some users also get notifications that stop only after entering the data.
Roger Kay, an analyst with Endpoint Technologies Associates, compared Apple Pay setup badges and notifications to Microsoft, bundling its Internet Explorer browser with Windows in the 1990s—a strategy the Justice Department successfully sued to stop on antitrust grounds saying it hurt rivals. “They used to have actual behavioral remedies and say you can’t do this,” Mr. Kay said.
The WSJ said only 34% of iPhone users link their cards to Apple Pay upon setup, with 18% having used the function in the past 90 days.
[DAR comment: the analogy to MS bundling is interesting, but arguably a stretch.]
Walmart's press release on new MoneyGram wire transfer service
Walmart Changes the Game Again with New Global Wire ServiceWalmart2World Offers Low Flat Fees to Send Money Anywhere in the World – Fast
BENTONVILLE, Ark. – WEBWIRE – Tuesday, April 3, 2018
Four years ago, Walmart changed the money transfer game with the introduction of Walmart2Walmart – a domestic money transfer service that offered dramatically lower costs that has since saved customers nearly $700 million in fees. Now, with MoneyGram International, Walmart is bringing its game-changing model to the global wire service market, with the launch of Walmart2World.
“We think sending money should cost the same regardless of where you send it; that’s why we’ve designed a brand new global wire service to send money to 200 countries with a consistently low fee,” said Kirsty Ward, vice president, Walmart Services. “There are millions of people sending money around the world to help loved ones with everyday needs or in times of emergency. Walmart2World, Powered by Moneygram helps customers get money to family and friends across the world in minutes, and the new low fees mean more of their hard-earned cash goes where it’s needed most.”
Scheduled to launch in all of Walmart’s 4,700 U.S. stores this month, three key features differentiate Walmart2World from other global wire service offerings:
In addition to saving money, customers using Walmart2World can also save time by using Mobile Express Money Services in the Walmart App. After a quick, one-time set-up, customers initiate their transfer from the Walmart App, and once at the store, fast-track through the Mobile Express Lane to quickly complete their transaction. Receipts and transaction details are saved electronically, helping to make future transactions even faster and easier.
Walmart Changes the Game Again with New Global Wire ServiceWalmart2World Offers Low Flat Fees to Send Money Anywhere in the World – Fast
BENTONVILLE, Ark. – WEBWIRE – Tuesday, April 3, 2018
Four years ago, Walmart changed the money transfer game with the introduction of Walmart2Walmart – a domestic money transfer service that offered dramatically lower costs that has since saved customers nearly $700 million in fees. Now, with MoneyGram International, Walmart is bringing its game-changing model to the global wire service market, with the launch of Walmart2World.
“We think sending money should cost the same regardless of where you send it; that’s why we’ve designed a brand new global wire service to send money to 200 countries with a consistently low fee,” said Kirsty Ward, vice president, Walmart Services. “There are millions of people sending money around the world to help loved ones with everyday needs or in times of emergency. Walmart2World, Powered by Moneygram helps customers get money to family and friends across the world in minutes, and the new low fees mean more of their hard-earned cash goes where it’s needed most.”
Scheduled to launch in all of Walmart’s 4,700 U.S. stores this month, three key features differentiate Walmart2World from other global wire service offerings:
- Unique Pricing Structure: Wherever you are in the United States, and to wherever you are sending money, the new, low fees for Walmart2World are the same – $4 to send up to $50, $8 to send $51 to $1,000, and $16 to send $1,001 to $2,500. This is unlike other international transfer services that change the fee to transfer money based on where sender and/or receiver are located.
- Highly Competitive Exchange Rates: Walmart is committed to ensuring customers receive a more competitive foreign exchange rate when transferring money using Walmart2World. The new Walmart2World low fees, combined with these great exchange rates deliver incredible value for international sends.
- Delivery Within Minutes to Worldwide Network: Compared to other international wire services that can take up to three days, Walmart2World will deliver funds in 10 minutes or less, whether the receiver opts to pick up the money at any one of MoneyGram’s agent locations in 200 countries, or an international bank or mobile wallet account.
In addition to saving money, customers using Walmart2World can also save time by using Mobile Express Money Services in the Walmart App. After a quick, one-time set-up, customers initiate their transfer from the Walmart App, and once at the store, fast-track through the Mobile Express Lane to quickly complete their transaction. Receipts and transaction details are saved electronically, helping to make future transactions even faster and easier.
Trump tweet seen as boost for Sinclair deal
By MARGARET HARDING MCGILL and JOHN HENDEL | 04/02/2018 05:47 PM EDT 4/5/2018
From - POLITICO https://www.politico.com/story/2018/04/02/trump-sinclair-merger-tweet-453014 3/7
President Donald Trump's tweet in support of Sinclair Broadcast Group leaves little question his administration will approve the conservative TV empire's bid for Tribune Media, according to the company's critics. Trump came to the broadcaster's defense after a viral video showing dozens of TV anchors at Sinclair-owned stations reciting the same Trump-like script bashing the media for spreading "fake news."
While the president didn't mention Sinclair's pending $3.9 billion acquisition of Tribune, opponents of the deal say Trump's comments send a message to regulators now reviewing the transaction. “If anybody didn’t understand that the green light was on for the Sinclair deal, I think it’s crystal clear now,” said Michael Copps, a former Democratic FCC commissioner who now serves as an adviser to public interest group Common Cause.
The Justice Department and the Federal Communications Commission are reviewing Sinclair’s bid to buy Tribune's stations, which would allow the company, known for injecting must-run conservative segments into local stations' programming, to reach nearly three out of every four households in the U.S.
By MARGARET HARDING MCGILL and JOHN HENDEL | 04/02/2018 05:47 PM EDT 4/5/2018
From - POLITICO https://www.politico.com/story/2018/04/02/trump-sinclair-merger-tweet-453014 3/7
President Donald Trump's tweet in support of Sinclair Broadcast Group leaves little question his administration will approve the conservative TV empire's bid for Tribune Media, according to the company's critics. Trump came to the broadcaster's defense after a viral video showing dozens of TV anchors at Sinclair-owned stations reciting the same Trump-like script bashing the media for spreading "fake news."
While the president didn't mention Sinclair's pending $3.9 billion acquisition of Tribune, opponents of the deal say Trump's comments send a message to regulators now reviewing the transaction. “If anybody didn’t understand that the green light was on for the Sinclair deal, I think it’s crystal clear now,” said Michael Copps, a former Democratic FCC commissioner who now serves as an adviser to public interest group Common Cause.
The Justice Department and the Federal Communications Commission are reviewing Sinclair’s bid to buy Tribune's stations, which would allow the company, known for injecting must-run conservative segments into local stations' programming, to reach nearly three out of every four households in the U.S.
US Chamber of Commerce criticizes White House attack on Amazon
By CPI on April 4, 2018 -- Full Content: PYMNTS [ https://www.pymnts.com/amazon/2018/chamber-of-commerce-criticizes-u-s-government-attack-amazon-trump-tweets/ ]
After President Donald Trump’s recent Twitter rants against eCommerce giant Amazon, the US Chamber of Commerce has criticized government officials for their attacks against American companies.
“It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, executive vice president and chief policy officer for the Chamber of Commerce, according to Reuters. “The U.S. economy is the world’s most powerful because it embraces the free enterprise system and the rule of law, whereby policy matters are handled through recognized policymaking processes. The record is clear: Deviating from those processes undermines economic growth and job creation.”
Trump criticized Amazon via Twitter on March 29, writing, “I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”
He followed up those comments a few days later, tweeting, “While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars.”
Trump’s comments come after an Axios report revealed that the president is apparently “obsessed” with Amazon and has wondered out loud if the government could go after the company from an antitrust or competition standpoint.
By CPI on April 4, 2018 -- Full Content: PYMNTS [ https://www.pymnts.com/amazon/2018/chamber-of-commerce-criticizes-u-s-government-attack-amazon-trump-tweets/ ]
After President Donald Trump’s recent Twitter rants against eCommerce giant Amazon, the US Chamber of Commerce has criticized government officials for their attacks against American companies.
“It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, executive vice president and chief policy officer for the Chamber of Commerce, according to Reuters. “The U.S. economy is the world’s most powerful because it embraces the free enterprise system and the rule of law, whereby policy matters are handled through recognized policymaking processes. The record is clear: Deviating from those processes undermines economic growth and job creation.”
Trump criticized Amazon via Twitter on March 29, writing, “I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”
He followed up those comments a few days later, tweeting, “While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars.”
Trump’s comments come after an Axios report revealed that the president is apparently “obsessed” with Amazon and has wondered out loud if the government could go after the company from an antitrust or competition standpoint.
NYT: Trump's public demeaning undermines US companies
Excerpt from https://www.nytimes.com/2018/04/03/us/politics/trump-amazon.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
President Trump once accused Verizon of making “a STUPID deal” for AOL. He ridiculed Coca-Cola as “garbage” — but said he would keep drinking it. He called both H&R Block and Nordstrom “terrible.” He said Sony had “really stupid leadership” and described executives at S&P Global, a financial firm, as “losers.”
Before and after he became president, Mr. Trump attacked tech firms, military contractors, carmakers, cellphone companies, financial firms, drug companies, air-conditioner makers, sports leagues, Wall Street giants — and many, many media companies, which he has labeled “shameful,” “dishonest,” “true garbage,” “really dumb,” “phony,” “failing” and, broadly, “the enemy of the American people.”
Lately, Mr. Trump’s antibusiness rants have become particularly menacing and caused the stocks of some companies to plunge. His Twitter posts have carried with them the threat, sometimes explicit, that he is prepared to use the power of the presidency to undermine the companies that anger him.
The U.S. Chamber of Commerce, long a booster of Republican presidents, is not happy. “It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, the executive vice president and chief policy officer of the chamber. Mr. Bradley, who did not specifically name Mr. Trump, added that criticism of companies from politicians “undermines economic growth and job creation.”
Excerpt from https://www.nytimes.com/2018/04/03/us/politics/trump-amazon.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
President Trump once accused Verizon of making “a STUPID deal” for AOL. He ridiculed Coca-Cola as “garbage” — but said he would keep drinking it. He called both H&R Block and Nordstrom “terrible.” He said Sony had “really stupid leadership” and described executives at S&P Global, a financial firm, as “losers.”
Before and after he became president, Mr. Trump attacked tech firms, military contractors, carmakers, cellphone companies, financial firms, drug companies, air-conditioner makers, sports leagues, Wall Street giants — and many, many media companies, which he has labeled “shameful,” “dishonest,” “true garbage,” “really dumb,” “phony,” “failing” and, broadly, “the enemy of the American people.”
Lately, Mr. Trump’s antibusiness rants have become particularly menacing and caused the stocks of some companies to plunge. His Twitter posts have carried with them the threat, sometimes explicit, that he is prepared to use the power of the presidency to undermine the companies that anger him.
The U.S. Chamber of Commerce, long a booster of Republican presidents, is not happy. “It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, the executive vice president and chief policy officer of the chamber. Mr. Bradley, who did not specifically name Mr. Trump, added that criticism of companies from politicians “undermines economic growth and job creation.”
Protect Democracy files amicus brief on political interference in law enforcement https://protectdemocracy.org/update/amicus-political-interference-law-enforcement/
From the Protect Democract statement:
Protect Democracy filed an amicus brief [https://www.scribd.com/document/373358295/US-vs-AT-T-BRIEF-OF-FORMER-DEPARTMENT-OF-JUSTICE-OFFICIALS-AS-AMICI-CURIAE-IN-SUPPORT-OF-NEITHER-PARTY ] in the USDOJ antitrust suit to block the AT&T/Time Warner merger. The brief was filed on behalf of a bipartisan group of former high-ranking DOJ officials, including former Nixon White House Counsel John Dean, former U.S. Attorneys Preet Bharara, Joyce Vance, and John McKay, and other former DOJ officials. Heidi Przybyla and Pete Williams at NBC reported on the brief late last night here [ https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036 ].
The brief is filed on behalf of neither party and takes no position on the underlying merits of the antitrust case. Rather, it explains that White House interference in law enforcement is likely unconstitutional in most circumstances. This principle applies generally, “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
In the specific case of the AT&T/Time Warner merger, President Trump’s repeated attacks on CNN for perceived unfavorable coverage and his pledge, made when he was a candidate for president, to block the merger has created a perception—at least by some—that DOJ brought this case at the behest of President Trump in order to punish CNN. If so, that would amount to a constitutional violation of the highest order. The amicus brief asks the Court to allow further inquiry into the issue and, if it turns out that the president did intervene in the matter, to remedy the resulting constitutional violation.
We are also releasing a White Paper (along with an executive summary) [ https://protectdemocracy.org/independent-law-enforcement/grounded-in-the-constitution/ ]that describes the constitutional principles that prohibit political interference in law enforcement. As detailed in the white paper — and a related post on Lawfare — with the exception of certain narrow types of circumstances, it will likely conflict with the Constitution for the White House to intervene in the Justice Department’s handling of an enforcement matter involving specific parties. And if the White House intervention is based on personal or corrupted interests, such interventions will always be unconstitutional. So for example, it would be unconstitutional for the President or the White House to interfere with the Mueller investigation or to pressure the Justice Department to prosecute a political opponent.
Protect Democracy is also releasing a list of examples of White House political interference in law enforcement here.
This is part of Protect Democracy’s project to Protect Independent Law Enforcement.
From the Protect Democract statement:
Protect Democracy filed an amicus brief [https://www.scribd.com/document/373358295/US-vs-AT-T-BRIEF-OF-FORMER-DEPARTMENT-OF-JUSTICE-OFFICIALS-AS-AMICI-CURIAE-IN-SUPPORT-OF-NEITHER-PARTY ] in the USDOJ antitrust suit to block the AT&T/Time Warner merger. The brief was filed on behalf of a bipartisan group of former high-ranking DOJ officials, including former Nixon White House Counsel John Dean, former U.S. Attorneys Preet Bharara, Joyce Vance, and John McKay, and other former DOJ officials. Heidi Przybyla and Pete Williams at NBC reported on the brief late last night here [ https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036 ].
The brief is filed on behalf of neither party and takes no position on the underlying merits of the antitrust case. Rather, it explains that White House interference in law enforcement is likely unconstitutional in most circumstances. This principle applies generally, “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
In the specific case of the AT&T/Time Warner merger, President Trump’s repeated attacks on CNN for perceived unfavorable coverage and his pledge, made when he was a candidate for president, to block the merger has created a perception—at least by some—that DOJ brought this case at the behest of President Trump in order to punish CNN. If so, that would amount to a constitutional violation of the highest order. The amicus brief asks the Court to allow further inquiry into the issue and, if it turns out that the president did intervene in the matter, to remedy the resulting constitutional violation.
We are also releasing a White Paper (along with an executive summary) [ https://protectdemocracy.org/independent-law-enforcement/grounded-in-the-constitution/ ]that describes the constitutional principles that prohibit political interference in law enforcement. As detailed in the white paper — and a related post on Lawfare — with the exception of certain narrow types of circumstances, it will likely conflict with the Constitution for the White House to intervene in the Justice Department’s handling of an enforcement matter involving specific parties. And if the White House intervention is based on personal or corrupted interests, such interventions will always be unconstitutional. So for example, it would be unconstitutional for the President or the White House to interfere with the Mueller investigation or to pressure the Justice Department to prosecute a political opponent.
Protect Democracy is also releasing a list of examples of White House political interference in law enforcement here.
This is part of Protect Democracy’s project to Protect Independent Law Enforcement.
President Harry Truman and limits on Presidential power to control the behavior of businesses
As people over the age of 85 may clearly recall, President Harry S Truman ordered the Secretary of Commerce on April 8, 1952, to seize and operate most of the country’s steel mills for the ostensible purpose of maintaining production of critical munitions. The Korean War required it, in the President's view.
Owners of the seized properties obtained a court injunction against the seizure, and an appeal of that injunction to the U.S. Supreme Court gave rise to one of the “great cases” in constitutional law, Youngstown Sheet & Tube Co. et al. v. Sawyer. (language drawn from Robert Higgs at http://www.independent.org/publications/article.asp?id=1394) The U.S. Supreme Court opinion is on line at https://supreme.justia.com/cases/federal/us/343/579/case.html#587
From the Youngstown opinion:
Nor can the seizure order be sustained because of the several constitutional provisions that grant executive power to the President. In the framework of our Constitution, the President's power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute. The first section of the first article says that "All legislative Powers herein granted shall be vested in a Congress of the United States. . . ." After granting many powers to the Congress, Article I goes on to provide that Congress may "make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."
The President's order does not direct that a congressional policy be executed in a manner prescribed by Congress -- it directs that a presidential policy be executed in a manner prescribed by the President. The preamble of the order itself, like that of many statutes, sets out reasons why the President believes certain policies should be adopted, proclaims these policies as rules of conduct to be followed, and again, like a statute, authorizes a government official to promulgate additional rules and regulations consistent with the policy proclaimed and needed to carry that policy into execution. The power of Congress to adopt such public policies as those proclaimed by the order is beyond question. It can authorize the taking of private property for public use. It can make laws regulating the relationships between employers and employees, prescribing rules designed to settle labor disputes, and fixing wages and working conditions in certain fields of our economy. The Constitution does not subject this lawmaking power of Congress to presidential or military supervision or control.
It is said that other Presidents, without congressional authority, have taken possession of private business enterprises in order to settle labor disputes. But even if this be true, Congress has not thereby lost its exclusive constitutional authority to make laws necessary and proper to carry out the powers vested by the Constitution "in the Government of the United States, or any Department or Officer thereof."
The Founders of this Nation entrusted the lawmaking power to the Congress alone in both good and bad times. It would do no good to recall the historical events, the fears of power, and the hopes for freedom that lay behind their choice. Such a review would but confirm our holding that this seizure order cannot stand.
Here is part of what the Protect Democracy amicus brief in the AT&T/Times-Warner antitrust case [see prior posting] says about the Youngstown case:
The Take Care Clause [of the Constitution] subjects the president to the rule of law. See Youngstown Sheet &Tube Co. v. Sawyer, 343 U.S. 579 (1952). In Youngstown, the Supreme Court held that the president lacked the power to effectively enact his own laws by taking over the nation’s steelmills during the Korean War. Justice Black began with the premise that “[t]he president’s power . . . must stem either from an act of Congress or from the Constitution itself.” 343 U.S. at585. Rather than taking care that the laws be faithfully executed, the president had become a law unto himself—and, as Justice Black explained, that conduct summoned up all “the fears of power and the hopes for freedom that lay behind” the decision to “entrust the law making power to theCongress alone in both good and bad times.” Id. at 589.
Justice Jackson’s famous Youngstown concurrence further bolsters the view that the Take Care Clause imposes constraints on presidential power. Justice Jackson rejected the argument that Article II’s Vesting Clause constitutes “a grant of all the executive powers of which the Government is capable.’” 343 U.S. at 640 (Jackson, J., concurring). . . . Justice Jackson further explained that any authority conferred by the Take Care Clause“ must be matched against words of the Fifth Amendment that ‘No person shall be . . . deprived of life, liberty, or property, without due process of law . . . .’ One gives a governmental authority that reaches so far as there is law, the other gives a private right that authority shall go no farther.” Id . at 646 (alterations in original). This approach envisions a president constrained by law and doubly checked by the right of private citizens to enforce the requirements of due process. These two provisions, Justice Jackson added, “signify . . . that ours is a government of laws, not of men,” and that “we submit ourselves to rulers only if under rules.” Id.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Hospitals fear that the potential merger between Walmart and Humana could significantly hurt their bottom lines.
Sources told The Wall Street Journal last week that Walmart, the nation's largest employer and retail giant, was in talks to purchase Humana. Walmart has dipped its toes into healthcare in the past, opening a series of primary care clinics in its stores.
A merger with Humana would accelerate the corporation's entry into the healthcare space, a prospect that's worrying to providers, according to an article from the WSJ. [ https://www.wsj.com/articles/hospitals-fear-competitive-threat-from-potential-walmart-humana-deal-1522587600 ] The deal "should be a concern to everybody in healthcare," Randy Oostra, CEO of Ohio-based health system ProMedica, told the publication.
Oostra said Walmart would likely join the retail healthcare options that are pulling patients away from outpatient care provided by traditional hospitals—which often helps cover the cost of more expensive inpatient services.
"What worries us is death by a thousand cuts," Oostra said. "Another deal and another deal."
The mega-merger between CVS and Aetna rang similar alarm bells for providers. If the deal goes through, CVS intends to expand its MinuteClinics to become a one-stop shop for patient needs including primary care, pharmacy services and vision care.
Hospitals haven't lowered costs enough to meet the prices offered by these retail clinics, which can make them a less attractive option for patients.
Retail healthcare is also a major threat to primary care providers, leading some PCPs to open their own walk-in clinics to stay competitive.
Another wrinkle in the potential Walmart-Humana deal that could worry providers is how Walmart currently operates its employee benefits, according to the WSJ. It has increasingly formed direct contacts with specific hospitals.
This practice, combined with Humana's infrastructure, could lead the combined entity to build employer health plans with narrow networks that leave many hospitals out in the cold. Geisinger Health System, for example, currently contracts with Walmart and is paid notably lower rates—but it attracts potential patients it might not otherwise, according to the article.
The CVS-Aetna merger and a similar deal planned between Cigna and Express Scripts have faced criticism
that they would be anticompetitive, and both are under scrutiny from lawmakers and the Department of Justice.
From: https://www.fiercehealthcare.com/hospitals-health-systems/walmart-humana-merger-hospital-finances-retail-healthcare-outpatient-care?mkt_tok=eyJpIjoiWkdVd1pHUmtZamd3WXpRMyIsInQiOiIxS2ZqSFNjXC9TNUlSRDc2Y01KZlRtTllmaTRPbGtjeFZ5Q1oyakNlRXRWMjYzVE1GcFdRS0tGYWxyMmdRSUVneE80Z1BuMVQ3b3I0d1RYVjlcL3RVK0d5cWd0TXJaeFVUMlwvTGNXUk9cL2lNUG9PNG9qM0Ywc3V4UHhIT0tGMVR5MDUifQ%3D%3D&mrkid=730008
Sources told The Wall Street Journal last week that Walmart, the nation's largest employer and retail giant, was in talks to purchase Humana. Walmart has dipped its toes into healthcare in the past, opening a series of primary care clinics in its stores.
A merger with Humana would accelerate the corporation's entry into the healthcare space, a prospect that's worrying to providers, according to an article from the WSJ. [ https://www.wsj.com/articles/hospitals-fear-competitive-threat-from-potential-walmart-humana-deal-1522587600 ] The deal "should be a concern to everybody in healthcare," Randy Oostra, CEO of Ohio-based health system ProMedica, told the publication.
Oostra said Walmart would likely join the retail healthcare options that are pulling patients away from outpatient care provided by traditional hospitals—which often helps cover the cost of more expensive inpatient services.
"What worries us is death by a thousand cuts," Oostra said. "Another deal and another deal."
The mega-merger between CVS and Aetna rang similar alarm bells for providers. If the deal goes through, CVS intends to expand its MinuteClinics to become a one-stop shop for patient needs including primary care, pharmacy services and vision care.
Hospitals haven't lowered costs enough to meet the prices offered by these retail clinics, which can make them a less attractive option for patients.
Retail healthcare is also a major threat to primary care providers, leading some PCPs to open their own walk-in clinics to stay competitive.
Another wrinkle in the potential Walmart-Humana deal that could worry providers is how Walmart currently operates its employee benefits, according to the WSJ. It has increasingly formed direct contacts with specific hospitals.
This practice, combined with Humana's infrastructure, could lead the combined entity to build employer health plans with narrow networks that leave many hospitals out in the cold. Geisinger Health System, for example, currently contracts with Walmart and is paid notably lower rates—but it attracts potential patients it might not otherwise, according to the article.
The CVS-Aetna merger and a similar deal planned between Cigna and Express Scripts have faced criticism
that they would be anticompetitive, and both are under scrutiny from lawmakers and the Department of Justice.
From: https://www.fiercehealthcare.com/hospitals-health-systems/walmart-humana-merger-hospital-finances-retail-healthcare-outpatient-care?mkt_tok=eyJpIjoiWkdVd1pHUmtZamd3WXpRMyIsInQiOiIxS2ZqSFNjXC9TNUlSRDc2Y01KZlRtTllmaTRPbGtjeFZ5Q1oyakNlRXRWMjYzVE1GcFdRS0tGYWxyMmdRSUVneE80Z1BuMVQ3b3I0d1RYVjlcL3RVK0d5cWd0TXJaeFVUMlwvTGNXUk9cL2lNUG9PNG9qM0Ywc3V4UHhIT0tGMVR5MDUifQ%3D%3D&mrkid=730008
Reporting from the NYT on the aftermath of the 2010 merger of Live Nation-Ticketmaster merger
The report highlights the limitations of behavioral remedies in vertical mergers.
https://www.nytimes.com/2018/04/01/arts/music/live-nation-ticketmaster.html
The Royal Opera House Gets Sued By Its Own Viola Player — for Hearing Damage
No, this isn’t an early April joke, but the editorial comment that the case is frivolous is owned by DMN, the source of the article. We don't offer an editorial comment, although your editor plays in amateur orchestras and has used ear stopples, particularly when sitting just behind the French horns. DR
Viola player Chris Goldscheider has successfully sued the Royal Opera House (ROH) in a case that takes frivolity to new heights. Goldscheider accused the venue of being liable for the hearing damage he sustained during a rehearsal six years ago.
Goldscheider cited the responsibility of ROH under UK Noise Regulations. He claimed to have suffered from “acoustic shock” while rehearsing Wagner’s ‘Die Walkure’ in 2012. This after sound levels of the performance reached 130 decibels.
Read the rest here.
No, this isn’t an early April joke, but the editorial comment that the case is frivolous is owned by DMN, the source of the article. We don't offer an editorial comment, although your editor plays in amateur orchestras and has used ear stopples, particularly when sitting just behind the French horns. DR
Viola player Chris Goldscheider has successfully sued the Royal Opera House (ROH) in a case that takes frivolity to new heights. Goldscheider accused the venue of being liable for the hearing damage he sustained during a rehearsal six years ago.
Goldscheider cited the responsibility of ROH under UK Noise Regulations. He claimed to have suffered from “acoustic shock” while rehearsing Wagner’s ‘Die Walkure’ in 2012. This after sound levels of the performance reached 130 decibels.
Read the rest here.
When is regulation appropriate? Deaths linked to a common paint stripper chemical go back decades ...https://www.ecowatch.com/methylene-chloride-epa-health-risks-2553228197.html
Excerpt:
By Jamie Smith Hopkins
It might be surprising to learn that simply removing paint could be fatal, but the key ingredient in many paint-stripping products has felled dozens of people engaged in this run-of-the-mill task. In the waning days of the Obama administration, the U.S. Environmental Protection Agency (EPA) proposed to largely ban paint strippers containing the chemical methylene chloride so they would no longer sit on store shelves, widely available for anyone to buy.
What's happened since should be no shock to close observers of the Trump administration's pattern of regulatory rollbacks. The EPA, after hearing from both Americans in support of a ban and companies opposed to it, pushed back its timeline for finishing the rule to an unspecified date, saying it needed more time to weigh the issue.
Excerpt:
By Jamie Smith Hopkins
It might be surprising to learn that simply removing paint could be fatal, but the key ingredient in many paint-stripping products has felled dozens of people engaged in this run-of-the-mill task. In the waning days of the Obama administration, the U.S. Environmental Protection Agency (EPA) proposed to largely ban paint strippers containing the chemical methylene chloride so they would no longer sit on store shelves, widely available for anyone to buy.
What's happened since should be no shock to close observers of the Trump administration's pattern of regulatory rollbacks. The EPA, after hearing from both Americans in support of a ban and companies opposed to it, pushed back its timeline for finishing the rule to an unspecified date, saying it needed more time to weigh the issue.
Federal Judge pressures local Orange County CA officials to provide for homeless people
An agreement brokered by a federal judge to provide motel rooms to the 400 homeless people estimated to still be living next to the Santa Ana River received its final approval with unanimous votes from the county Board of Supervisors to ratify and implement the agreement. [The Court filing is at http://bit.ly/2EGLZDV ]
The agreement was the result of two straight days of morning-to-night pressure from U.S. District Judge David O. Carter for the county and attorneys for homeless people to quickly find a solution, after years of slow action in dealing with the growing number of homeless living along the riverbed.
Carter acted in response to a lawsuit challenging the county’s evictions of homeless people from the riverbed. He temporarily halted the evictions, and told the county he would allow them to clear the riverbed starting Tuesday morning – but only if they worked with the homeless people’s attorneys to find shelter for the people living there.
Under the agreement, the county will provide motel rooms for at least 30 days to those now living along the riverbed. People at the riverbed will have a choice of moving to a motel, leaving the riverbed, or facing arrest if they stay after the 9 a.m. Tuesday deadline.
Additionally, as part of the court-brokered deal, the county is working to add separate shelter for 300 to 400 people by erecting tents or other structures on county land and adding beds at existing shelters. The new space potentially could house people after their 30 days in motels
See https://voiceofoc.org/2018/02/plan-to-move-riverbed-homeless-to-motels-approved-by-oc-supervisors/
* * *
Subsequent articles note strong opposition to resettlement of the Orange County homeless people from local residents
See: https://www.wsj.com/articles/orange-county-was-set-to-house-the-homeless-and-there-was-a-popular-revolt-1522324800
How not to do antitrust policy:
Amazon shares fall after report Trump wants to curb its power
According to Reuters, Amazon.com Inc (AMZN.O) shares fell almost 5 percent on Wednesday, wiping more than $30 billion off its market value, after news website Axios reported that U.S. President Donald Trump is obsessed with the world’s largest online retailer and wants to rein in its growing power.
On Easter Sunday Trump tweeted hostile views about Jeff Bezos and Amazon.
The issue of Trump's personal intervention on antitrust or regulatory issues came up recently concerning AT&T/Time Warner:
As NBC News reported [ see https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036], Trump’s outspoken criticism of CNN and its coverage of his campaign and White House sparked concerns about potential White House influence on the AT&T/Time Warner deal. During a 2016 campaign rally, Trump said any AT&T-Time Warner deal is “a deal we will not approve in my administration.”
The DOJ says it brought the case through its antitrust division because it believes the deal will harm consumers and that it has nothing to do with the president’s personal griping about CNN.
A group of former USDOJ officials recently wrote that “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
Late last month, a federal judge denied AT&T’s request for communications between the White House and the DOJ to determine if there was any inappropriate influence. The the former USDOJ attorneys quoted above insist the judge got it wrong, and have submitted a brief they hope will inform the AT&T/Time Warner trial.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Amazon shares fall after report Trump wants to curb its power
According to Reuters, Amazon.com Inc (AMZN.O) shares fell almost 5 percent on Wednesday, wiping more than $30 billion off its market value, after news website Axios reported that U.S. President Donald Trump is obsessed with the world’s largest online retailer and wants to rein in its growing power.
On Easter Sunday Trump tweeted hostile views about Jeff Bezos and Amazon.
The issue of Trump's personal intervention on antitrust or regulatory issues came up recently concerning AT&T/Time Warner:
As NBC News reported [ see https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036], Trump’s outspoken criticism of CNN and its coverage of his campaign and White House sparked concerns about potential White House influence on the AT&T/Time Warner deal. During a 2016 campaign rally, Trump said any AT&T-Time Warner deal is “a deal we will not approve in my administration.”
The DOJ says it brought the case through its antitrust division because it believes the deal will harm consumers and that it has nothing to do with the president’s personal griping about CNN.
A group of former USDOJ officials recently wrote that “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
Late last month, a federal judge denied AT&T’s request for communications between the White House and the DOJ to determine if there was any inappropriate influence. The the former USDOJ attorneys quoted above insist the judge got it wrong, and have submitted a brief they hope will inform the AT&T/Time Warner trial.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Maurice Stucke says a few big tech companies holding our data is bad, and antitrust enforcement is the remedy:
Here Are All the Reasons It’s a Bad Idea to Let a Few Tech Companies Monopolize Our Data
MARCH 27, 2018
“It’s no good fighting an election campaign on the facts,” Cambridge Analytica’s managing director told an undercover reporter, “because actually it’s all about emotion.” To target U.S. voters and appeal to their hopes, neuroses, and fears, the political consulting firm needed to train its algorithm to predict and map personality traits. That required lots of personal data. So, to build these psychographic profiles, Cambridge Analytica enlisted a Cambridge University professor, whose app collected data on about 50 million Facebook users and their friends. Facebook, at that time, allowed app developers to collect this personal data. Facebook argued that Cambridge Analytica and the professor violated its data polices. But this was not the first time its policies were violated. Nor is it likely to be the last.
This scandal came on the heels of Russia’s using Facebook, Google, and Twitter “to sow discord in the U.S. political system, including the 2016 U.S. presidential election.” It heightened concerns over today’s tech giants and the influence they have.
That influence comes in part from data. Facebook, Google, Amazon, and similar companies are “data-opolies.” By that I mean companies that control a key platform which, like a coral reef, attracts to its ecosystem users, sellers, advertisers, software developers, apps, and accessory makers. Apple and Google, for example, each control a popular mobile phone operating system platform (and key apps on that platform), Amazon controls the largest online merchant platform, and Facebook controls the largest social network platform. Through their leading platforms, a significant volume and variety of personal data flows. The velocity in acquiring and exploiting this personal data can help these companies obtain significant market power.
Is it OK for a few firms to possess so much data and thereby wield so much power? In the U.S., at least, antitrust officials so far seem ambivalent about these data-opolies. They’re free, the thinking goes, so what’s the harm? But that reasoning is misguided. Data-opolies pose tremendous risks, for consumers, workers, competition, and the overall health of our democracy. Here’s why.
Why U.S. Antitrust Isn’t Worried About Data-opoliesThe European competition authorities have recently brought actions against four data-opolies: Google, Apple, Facebook, and Amazon (or GAFA for short). The European Commission, for example, fined Google a record €2.42 billion for leveraging its monopoly in search to advance its comparative shopping service. The Commission also preliminarily found Google to have abused its dominant position with both its Android mobile operating system and with AdSense. Facebook, Germany’s competition agency preliminarily found, abused its dominant position “by making the use of its social network conditional on its being allowed to limitlessly amass every kind of data generated by using third-party websites and merge it with the user’s Facebook account.”
We will likely see more fines and other remedies in the next few years from the Europeans. But in the U.S., the data-opolies have largely escaped antitrust scrutiny, under both the Obama and Bush administrations. Notably, while the European Commission found Google’s search bias to be anticompetitive, the U.S. Federal Trade Commission did not. From 2000 onward, the Department of Justice brought only one monopolization case in total, against anyone. (In contrast, the DOJ, between 1970 and 1972, brought 39 civil and 3 criminal cases against monopolies and oligopolies.)
The current head of the DOJ’s Antitrust Division recognized the enforcement gap between the U.S. and Europe. He noted his agency’s “particular concerns in digital markets.” But absent “demonstrable harm to competition and consumers,” the DOJ is “reluctant to impose special duties on digital platforms, out of [its] concern that special duties might stifle the very innovation that has created dynamic competition for the benefit of consumers.”
So, the divergence in antitrust enforcement may reflect differences over these data-opolies’ perceived harms.
Full article: https://hbr.org/2018/03/here-are-all-the-reasons-its-a-bad-idea-to-let-a-few-tech-companies-monopolize-our-data
Here Are All the Reasons It’s a Bad Idea to Let a Few Tech Companies Monopolize Our Data
MARCH 27, 2018
- Excerpt:
“It’s no good fighting an election campaign on the facts,” Cambridge Analytica’s managing director told an undercover reporter, “because actually it’s all about emotion.” To target U.S. voters and appeal to their hopes, neuroses, and fears, the political consulting firm needed to train its algorithm to predict and map personality traits. That required lots of personal data. So, to build these psychographic profiles, Cambridge Analytica enlisted a Cambridge University professor, whose app collected data on about 50 million Facebook users and their friends. Facebook, at that time, allowed app developers to collect this personal data. Facebook argued that Cambridge Analytica and the professor violated its data polices. But this was not the first time its policies were violated. Nor is it likely to be the last.
This scandal came on the heels of Russia’s using Facebook, Google, and Twitter “to sow discord in the U.S. political system, including the 2016 U.S. presidential election.” It heightened concerns over today’s tech giants and the influence they have.
That influence comes in part from data. Facebook, Google, Amazon, and similar companies are “data-opolies.” By that I mean companies that control a key platform which, like a coral reef, attracts to its ecosystem users, sellers, advertisers, software developers, apps, and accessory makers. Apple and Google, for example, each control a popular mobile phone operating system platform (and key apps on that platform), Amazon controls the largest online merchant platform, and Facebook controls the largest social network platform. Through their leading platforms, a significant volume and variety of personal data flows. The velocity in acquiring and exploiting this personal data can help these companies obtain significant market power.
Is it OK for a few firms to possess so much data and thereby wield so much power? In the U.S., at least, antitrust officials so far seem ambivalent about these data-opolies. They’re free, the thinking goes, so what’s the harm? But that reasoning is misguided. Data-opolies pose tremendous risks, for consumers, workers, competition, and the overall health of our democracy. Here’s why.
Why U.S. Antitrust Isn’t Worried About Data-opoliesThe European competition authorities have recently brought actions against four data-opolies: Google, Apple, Facebook, and Amazon (or GAFA for short). The European Commission, for example, fined Google a record €2.42 billion for leveraging its monopoly in search to advance its comparative shopping service. The Commission also preliminarily found Google to have abused its dominant position with both its Android mobile operating system and with AdSense. Facebook, Germany’s competition agency preliminarily found, abused its dominant position “by making the use of its social network conditional on its being allowed to limitlessly amass every kind of data generated by using third-party websites and merge it with the user’s Facebook account.”
We will likely see more fines and other remedies in the next few years from the Europeans. But in the U.S., the data-opolies have largely escaped antitrust scrutiny, under both the Obama and Bush administrations. Notably, while the European Commission found Google’s search bias to be anticompetitive, the U.S. Federal Trade Commission did not. From 2000 onward, the Department of Justice brought only one monopolization case in total, against anyone. (In contrast, the DOJ, between 1970 and 1972, brought 39 civil and 3 criminal cases against monopolies and oligopolies.)
The current head of the DOJ’s Antitrust Division recognized the enforcement gap between the U.S. and Europe. He noted his agency’s “particular concerns in digital markets.” But absent “demonstrable harm to competition and consumers,” the DOJ is “reluctant to impose special duties on digital platforms, out of [its] concern that special duties might stifle the very innovation that has created dynamic competition for the benefit of consumers.”
So, the divergence in antitrust enforcement may reflect differences over these data-opolies’ perceived harms.
Full article: https://hbr.org/2018/03/here-are-all-the-reasons-its-a-bad-idea-to-let-a-few-tech-companies-monopolize-our-data
States face challenge in curbing premiums after stabilization package fails
By Susannah Luthi | March 23, 2018
This week, Congress left states holding the baton in a lonely sprint to curb 2019 Obamacare premiums, with just a couple of months to get creative with legislation, waiver requests, and regulations before insurers file their rate requests.
After opposing Republican efforts to expand federal abortion funding prohibitions to Affordable Care Act cost-sharing reduction payments and other measures, Senate Democrats opposed the GOP-led stabilization package with its funding for CSRs and a $30 billion reinsurance pool. Without Democratic support, the measure was dropped this week from the $1.3 trillion omnibus spending bill, the last must-pass legislation of the year. To insurers' dismay, it isn't likely to come back.
Although their time and options are limited, state officials and policy analysts agree the best immediate opportunity to stem 2019 rate hikes lies in states seeking ACA Section 1332 waivers to set up reinsurance funds. Otherwise, premiums for ACA-compliant individual-market plans are expected to rise by about 30%.
But for the states, the challenge lies in the details as they race against the calendar. Carriers will begin filing their proposed rates as soon as May, and most state legislatures that remain in session have to wrap up their legislative business in April. The 1332 waiver required for a reinsurance fund must be approved by state legislatures.
Excerpt from http://www.modernhealthcare.com/article/20180323/NEWS/180329946?utm_source=modernhealthcare&utm_medium=email&utm_content=20180323-NEWS-180329946&utm_campaign=am
By Susannah Luthi | March 23, 2018
This week, Congress left states holding the baton in a lonely sprint to curb 2019 Obamacare premiums, with just a couple of months to get creative with legislation, waiver requests, and regulations before insurers file their rate requests.
After opposing Republican efforts to expand federal abortion funding prohibitions to Affordable Care Act cost-sharing reduction payments and other measures, Senate Democrats opposed the GOP-led stabilization package with its funding for CSRs and a $30 billion reinsurance pool. Without Democratic support, the measure was dropped this week from the $1.3 trillion omnibus spending bill, the last must-pass legislation of the year. To insurers' dismay, it isn't likely to come back.
Although their time and options are limited, state officials and policy analysts agree the best immediate opportunity to stem 2019 rate hikes lies in states seeking ACA Section 1332 waivers to set up reinsurance funds. Otherwise, premiums for ACA-compliant individual-market plans are expected to rise by about 30%.
But for the states, the challenge lies in the details as they race against the calendar. Carriers will begin filing their proposed rates as soon as May, and most state legislatures that remain in session have to wrap up their legislative business in April. The 1332 waiver required for a reinsurance fund must be approved by state legislatures.
Excerpt from http://www.modernhealthcare.com/article/20180323/NEWS/180329946?utm_source=modernhealthcare&utm_medium=email&utm_content=20180323-NEWS-180329946&utm_campaign=am
Tim Wu discusses Facebook as a regulatory recidivist
VC Roger McNamee says:
"Google, Facebook, Amazon are increasingly just super-monopolies, especially Google and Facebook. The share of the markets they operate in is literally on the same scale that Standard Oil had ... more than 100 years ago — with the big differences that their reach is now global, not just within a single country," he said on "Squawk Alley." https://www.cnbc.com/squawk-alley/
The New York Times editorial writers say:
"We must demand that legislators and regulators get tougher. They should go after Facebook on antitrust grounds. Facebook is by far the dominant social platform in the United States, with 68 percent of American adults using it, according to the Pew Research Center. That means Facebook can gobble up potential competitors, as it already has with Instagram, and crowd out upstarts in fields such as artificial intelligence and virtual reality. The Department of Justice should consider severing WhatsApp, Instagram and Messenger from Facebook, much as it broke up AT&T in 1982. That breakup unleashed creativity, improved phone service and lowered prices. It also limited the political power of AT&T." https://www.nytimes.com/2018/03/24/opinion/sunday/delete-facebook-does-not-fix-problem.html?action=click
Comments like these upset some experienced antitrust enforcers. The upset is caused by broad-brush suggestions that the solution to the size and behavior of Google, Facebook, and Amazon is a return to the antitrust enforcement spirit of the Teddy Roosevelt era. To some enforcers such broad-brush comments look more poliical than practical. The commenters ignore antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results.
It may be that there is no one-size-fits-all solution to problems that may be caused by the Google, Facebook, and Amazon giants. It may be that what is needed from law enforcers is the approach of a scientist studying the characteristics of a previously unknown creature. As a 20th century poet once pointed out, the right way to start a study of the biology of a previously unknown species of animal is to carefully study a specimen of the animal. The wrong way is to believe, like the medieval scholar Pliny, that general principles of animalism will lead to useful conclusions. (Pliny reasoned that since there were animals in Africa with two horns, and others with none, therefore there must also be one-horned Unicorns.)
Tim Wu seems to be in the school of studying particular industry specimens before suggesting regulatory solutions, if some of his comments about Facebook are an indicator.
Here is what he wrote about Facebook in 2015 in the New Yorker ( https://www.newyorker.com/business/currency/facebook-should-pay-all-of-us ):
Businesses we are paying with attention or data are conflicted. We are their customers, but we are also their products, ultimately resold to others. We are unlikely to stop loving free stuff. But we always pay in the end—and it is worth asking how.
When Tim Wu appeared on the PBS News Hour a few days ago, he said that the FTC has imposed a tailored regulatory solution on Facebook addressing privacy issues some years ago, and that the problem was in lack of Facebook compliance. He suggested that the relevance of Facebook's great size and scope of operations is simply that lack of compliance -- recidivism --- carries a high cost for the public.
See more of Wu's comments at https://www.pbs.org/.../mark-zuckerberg-promises-change-but-facebook-has- failed-to-follow-through-in-the-past
With regard to Tim Wu's point that Facebook is a recidivist in failing to comply with the 2011 FTC order, the following article provides a number of source documents concerning the FTC order:
https://epic.org/privacy/ftc/facebook/
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
VC Roger McNamee says:
"Google, Facebook, Amazon are increasingly just super-monopolies, especially Google and Facebook. The share of the markets they operate in is literally on the same scale that Standard Oil had ... more than 100 years ago — with the big differences that their reach is now global, not just within a single country," he said on "Squawk Alley." https://www.cnbc.com/squawk-alley/
The New York Times editorial writers say:
"We must demand that legislators and regulators get tougher. They should go after Facebook on antitrust grounds. Facebook is by far the dominant social platform in the United States, with 68 percent of American adults using it, according to the Pew Research Center. That means Facebook can gobble up potential competitors, as it already has with Instagram, and crowd out upstarts in fields such as artificial intelligence and virtual reality. The Department of Justice should consider severing WhatsApp, Instagram and Messenger from Facebook, much as it broke up AT&T in 1982. That breakup unleashed creativity, improved phone service and lowered prices. It also limited the political power of AT&T." https://www.nytimes.com/2018/03/24/opinion/sunday/delete-facebook-does-not-fix-problem.html?action=click
Comments like these upset some experienced antitrust enforcers. The upset is caused by broad-brush suggestions that the solution to the size and behavior of Google, Facebook, and Amazon is a return to the antitrust enforcement spirit of the Teddy Roosevelt era. To some enforcers such broad-brush comments look more poliical than practical. The commenters ignore antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results.
It may be that there is no one-size-fits-all solution to problems that may be caused by the Google, Facebook, and Amazon giants. It may be that what is needed from law enforcers is the approach of a scientist studying the characteristics of a previously unknown creature. As a 20th century poet once pointed out, the right way to start a study of the biology of a previously unknown species of animal is to carefully study a specimen of the animal. The wrong way is to believe, like the medieval scholar Pliny, that general principles of animalism will lead to useful conclusions. (Pliny reasoned that since there were animals in Africa with two horns, and others with none, therefore there must also be one-horned Unicorns.)
Tim Wu seems to be in the school of studying particular industry specimens before suggesting regulatory solutions, if some of his comments about Facebook are an indicator.
Here is what he wrote about Facebook in 2015 in the New Yorker ( https://www.newyorker.com/business/currency/facebook-should-pay-all-of-us ):
Businesses we are paying with attention or data are conflicted. We are their customers, but we are also their products, ultimately resold to others. We are unlikely to stop loving free stuff. But we always pay in the end—and it is worth asking how.
When Tim Wu appeared on the PBS News Hour a few days ago, he said that the FTC has imposed a tailored regulatory solution on Facebook addressing privacy issues some years ago, and that the problem was in lack of Facebook compliance. He suggested that the relevance of Facebook's great size and scope of operations is simply that lack of compliance -- recidivism --- carries a high cost for the public.
See more of Wu's comments at https://www.pbs.org/.../mark-zuckerberg-promises-change-but-facebook-has- failed-to-follow-through-in-the-past
With regard to Tim Wu's point that Facebook is a recidivist in failing to comply with the 2011 FTC order, the following article provides a number of source documents concerning the FTC order:
https://epic.org/privacy/ftc/facebook/
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Increased privacy requirements looming for Facebook?
In interviews, Mr. Zuckerberg and Sheryl Sandberg, Facebook’s chief operating officer, seemed to accept the possibility of increased privacy regulation. See video at https://www.cnn.com/videos/cnnmoney/2018/03/22/zuckerberg-facebook-data-regulation-ac-sot.cnn
Zuckerberg: " I'm not sure we shouldn't be regulated . . . . The question is, what is the right regulation?"
It is not clear that Zuckerberg or Sandberg will like the regulation to come in the EU.In May, the European Union is instituting a comprehensive new privacy law, called the General Data Protection Regulation. The new rules treat personal data as proprietary, owned by an individual, and any use of that data must be accompanied by permission — opting in rather than opting out — after receiving a request written in clear language, not legalese. See https://www.eugdpr.org/key-changes.html A brief excerpt follows:
The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established. Although the key principles of data privacy still hold true to the previous directive, many changes have been proposed to the regulatory policies; the key points of the GDPR as well as information on the impacts it will have on business can be found below.
***
Consent
The conditions for consent have been strengthened, and companies will no longer be able to use long illegible terms and conditions full of legalese, as the request for consent must be given in an intelligible and easily accessible form, with the purpose for data processing attached to that consent. Consent must be clear and distinguishable from other matters and provided in an intelligible and easily accessible form, using clear and plain language. It must be as easy to withdraw consent as it is to give it.
In interviews, Mr. Zuckerberg and Sheryl Sandberg, Facebook’s chief operating officer, seemed to accept the possibility of increased privacy regulation. See video at https://www.cnn.com/videos/cnnmoney/2018/03/22/zuckerberg-facebook-data-regulation-ac-sot.cnn
Zuckerberg: " I'm not sure we shouldn't be regulated . . . . The question is, what is the right regulation?"
It is not clear that Zuckerberg or Sandberg will like the regulation to come in the EU.In May, the European Union is instituting a comprehensive new privacy law, called the General Data Protection Regulation. The new rules treat personal data as proprietary, owned by an individual, and any use of that data must be accompanied by permission — opting in rather than opting out — after receiving a request written in clear language, not legalese. See https://www.eugdpr.org/key-changes.html A brief excerpt follows:
The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established. Although the key principles of data privacy still hold true to the previous directive, many changes have been proposed to the regulatory policies; the key points of the GDPR as well as information on the impacts it will have on business can be found below.
***
Consent
The conditions for consent have been strengthened, and companies will no longer be able to use long illegible terms and conditions full of legalese, as the request for consent must be given in an intelligible and easily accessible form, with the purpose for data processing attached to that consent. Consent must be clear and distinguishable from other matters and provided in an intelligible and easily accessible form, using clear and plain language. It must be as easy to withdraw consent as it is to give it.
Does the internet fringe teach some people that Jews control the weather?
A few days ago the Washington Post reported on a A D.C. lawmaker who responded to a brief snowfall by publishing a video in which he espoused a conspiracy theory that Jewish financiers control the climate. See https://www.washingtonpost.com/local/dc-politics/dc-lawmaker-says-recent-snowfall-caused-byrothschilds-controlling-the-climate/2018/03/18/daeb0eae-2ae0-11e8-911f-ca7f68bff0fc_story.html
The Post article on this bizarre incident (most politicians would be more politic) points out that the internet can infect people's thinking with weird conspiracy theories.
An article in the Examiner put it this way:
It is unclear what White, currently the youngest representative on the 13-member D.C. Council, meant by "climate control," or where he picked up this narrative. But as the Washington Post, which was the first to report the video, points out, fringe Internet users have falsely linked the Rothschilds to weather changes.
Established by another dynastic family, the Rockefeller Foundation runs an initiative called 100 Resilient Cities to help cities adapt to major challenges. Conspiracies have also centered around the Rockefellers.
White has reportedly mused aloud about supposed connections between the Rothschilds and climate change before. At a February working breakfast between the D.C. Council and Mayor Muriel Bowser, he asked the Bowser administration about links between the Rothschilds, the Rockefellers, the World Bank, and D.C.'s recently created Office of Resilience, according to a District official who was present.
Weird and offensive conspiracy theories preceded the internet, but it seems that fringe internet users help spread them around.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Regulatory controversy over what makes a chicken egg organic
The U.S. Department of Agriculture finalized a plan under the Obama administration that required chickens laying organic eggs to have access to soil, not just porch enclosures attached to hen houses. But before the rule could be implemented under the Trump administration it was reversed, raising regulatory controversy, and litigation, over the legal meaning of "organic."
https://www.pbs.org/newshour/show/what-makes-eggs-organic-it-depends-on-who-you-ask
The U.S. Department of Agriculture finalized a plan under the Obama administration that required chickens laying organic eggs to have access to soil, not just porch enclosures attached to hen houses. But before the rule could be implemented under the Trump administration it was reversed, raising regulatory controversy, and litigation, over the legal meaning of "organic."
https://www.pbs.org/newshour/show/what-makes-eggs-organic-it-depends-on-who-you-ask
Mass. AG Healey announces investigation into Cambridge Analytica, the data
firm used by Trump campaign
- From The Boston Globe
https://www.bostonglobe.com/metro/2018/03/17/maura-healey-announces-investigation-into-data-firm-used-trump-campaign/Njq4PGzF1IQC3ahtVCW… 1/2
By Eric Moskowitz
Responding to reports that a data firm employed by the Trump presidential campaign improperly harvested information on 50 million Facebook users, Massachusetts Attorney General Maura Healey on Saturday launched a state investigation into the matter.
Citing a New York Times investigation into Cambridge Analytica — a British data-analysis outfit funded by New York billionaire Robert Mercer, a major underwriter of right-wing candidates and campaigns — Healey retweeted the story and announced the investigation Saturday afternoon.
“Massachusetts residents deserve answers immediately from Facebook and Cambridge Analytica,” Healey wrote on Twitter, leading it with the “#BREAKING” hashtag. “We are launching an investigation.”
The attorney general’s office confirmed by e-mail Saturday evening that they were opening acivil investigation and had been in touch with Facebook already to inform the social-media giant.
State investigators intend to learn more about what happened, when it happened, and whether Massachusetts residents were affected, Healey spokeswoman Emily Snyder said in the e-mail. The attorney general’s office will examine whether the reported breach violated Facebook policies while evaluating possible legal implications as well, she said.
firm used by Trump campaign
- From The Boston Globe
https://www.bostonglobe.com/metro/2018/03/17/maura-healey-announces-investigation-into-data-firm-used-trump-campaign/Njq4PGzF1IQC3ahtVCW… 1/2
By Eric Moskowitz
Responding to reports that a data firm employed by the Trump presidential campaign improperly harvested information on 50 million Facebook users, Massachusetts Attorney General Maura Healey on Saturday launched a state investigation into the matter.
Citing a New York Times investigation into Cambridge Analytica — a British data-analysis outfit funded by New York billionaire Robert Mercer, a major underwriter of right-wing candidates and campaigns — Healey retweeted the story and announced the investigation Saturday afternoon.
“Massachusetts residents deserve answers immediately from Facebook and Cambridge Analytica,” Healey wrote on Twitter, leading it with the “#BREAKING” hashtag. “We are launching an investigation.”
The attorney general’s office confirmed by e-mail Saturday evening that they were opening acivil investigation and had been in touch with Facebook already to inform the social-media giant.
State investigators intend to learn more about what happened, when it happened, and whether Massachusetts residents were affected, Healey spokeswoman Emily Snyder said in the e-mail. The attorney general’s office will examine whether the reported breach violated Facebook policies while evaluating possible legal implications as well, she said.
Should CFIUS (Committee on Foreign Investment in the United States) be reformed?
The U.S. Government's Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks. It recently and famously squelched the idea of a Qualcomm/Broadcom merger. It has taken similarly aggressive actions in the past. Reasons include protecting American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei.
There is a reason for CFIUS. Press reports indicate that the Chinese government keeps a tight reign on its companies. In February, the Chinese government seized Anbang Insurance, the owner of New York's Waldorf Astoria and other properties around the world. Chinese oil company CEFC is reportedly being constrained by the Chinese government because of its borrowing for foreign investments. The reasons for Chinese government constraints are not the point. The point is that Chinese companies appear to be subject to tight control by the Chinese Government.
CFIUS proceedings tend to be quick and lacking in transparency. The CFIUS process does not involve court review.
CFIUS market analysis can be superficial, as suggested by a recent Treasury letter to Qualcomm. The letter focuses on Qualcomm's role as a national champion and resource for the U.S. Government. The letter explains that “Qualcomm is a global leader in the development and commercialization of foundational technologies and products used in mobile devices and other wireless products. . . .” Further, that experience has “positioned Qualcomm as the current leading company in 5G technology development and standard setting.” The letter says that any diminishing of that role is a potential opening for China and, specifically, Huawei Technologies Co., a Chinese telecommunications-equipment maker that is also a big force in 5G. (The Wall Street Journal points out that Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology, and that Huawei and Samsung are the main companies with 5G cell phone offerings.)
One reform suggested by Bert Foer in a paper he will present to a Waseda University conference in Japan is that CFIUS should allow USDOJ to complete its antitrust review before stepping in to consider national security issues. If, for example, USDOJ had been allowed to complete its review and blocked the merger of Qualcomm and Broadcom -- which seems quite possible--then CFIUS would need to take no further action. If USDOJ approved a merger, CFIUS could step in and have the benefit of a thorough antitrust oriented investigation and a factual record that could be relatively transparent. In Bert Foer's words:
Other countries have their own methods for bringing national security concerns into what would otherwise be antitrust investigations, assuring that, for better or worse, more than traditional microeconomic effects will be taken into account. The lack of transparency in these national security contexts can open the door for unfortunate decisions. One might suggest that it would be better policy to have the antitrust authority carry out a normal investigation and only utilize CFIUS if the authority has concluded there is no antitrust reason to stop it.
There is an underlying question about the relationship between CFIUS protectionist policies said to advance national security interests and usual considerations of competition policy, including antitrust. One view is that policies of national security and encouragement of domestic industry are very different from and entirely trump and preclude usual competition and antitrust policy concerns. A reason for that view is that competition policy may prefer international competition when national security concerns suggest protecting U.S. companies.
I prefer the view that competition policy is a relevant and useful complement to national security policy, and that antitrust expertise could be usefully brought to bear, as Bert Foer suggests, by having the USDOJ carry out the usual antitrust review before CFIUS steps in.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Competition policy concerns and the US move to a protectionist industrial policy for American tech companies like Qualcomm
Currently developing U.S. government policy linked to national security seeks to protect established American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei. For example, U.S. officials reportedly pressed AT&T not to distribute Huawei 5G cell phones, and AT&T complied. Huawei and and Samsung are identified by the Wall Street Journal as the principal
companies developing 5G technology for cell phones.
The Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks. It recently and famously squelched the idea of a Qualcomm/Broadcom merger, and has taken similarly aggressive actions in the past. Reasons include protecting American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei.
Proposed legislation with bi-partisan support proposes expanding the jurisdiction of CFIUS. The legislation would give CFIUS jurisdiction over non-passive, minority position investments by a foreign person; also over joint ventures involving technology transfers in a foreign entity.
The CFIUS process does not involve court review. It does involve evaluation of competition in markets, as addressed in a recent Treasury letter to Qualcomm. As pointed out in a Wall Street Journal article, the letter says that “Qualcomm is a global leader in the development and commercialization of foundational technologies and products used in mobile devices and other wireless products, including network equipment, broadband gateway equipment, and consumer electronic devices.” Also, that experience has “positioned Qualcomm as the current leading company in 5G technology development and standard setting.” The letter says further that iQualcomm’s leadership role in the development of leading edge 5G technology is good for national security: “Qualcomm has become well-known to, and trusted by, the U.S. government. Having a well-known and trusted company hold the dominant role that Qualcomm does in the U.S. telecommunications infrastructure provides significant confidence in the integrity of such infrastructure as it relates to national security.” The letter says that any diminishing of that role is a potential opening for China and, specifically, Huawei Technologies Co., a Chinese telecommunications-equipment maker that is also a big force in 5G. The Wall Street Journal points out that Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology.
A point that has gotten little public comment is the relationship between protectionist policies said to advance national security interests and usual considerations of competition policy, including antitrust. National security and encouragement of domestic industry may be seen as trumping competition and antitrust policy interests, but it does not follow that competition policy is irrelevant or that application of antitrust expertise would not be useful.
There is some analogy to U.S government policy toward banks following the 2008 financial markets. Banks were pressured by the government to merge, and thereafter were regulated with scant attention to competition policy or antitrust expertise. It may be reasonably argued that even in a financial crisis competition policy considerations and antitrust expertise should have been brought to bear. Similarly, today's strong concerns about national security and protection of domestic industry should not foreclose consideration of competition policy considerations and antitrust expertise.
Generally, competition policy concerns will push for encouraging healthy international competition, and encouraging domestic industry through R & D and other support, rather than attempting to discourage rivals.
****
Following is a Treasury letter that presaged the U.S. Government decision to block the Qualcomm/Broadcom merger, and describes the relevant competition between U.S. and Chinese companies:
https://www.qcomvalue.com/wp-content/uploads/2018/03/Letter-from-Treasury-Department-to-Broadcom-and-Qualcomm-regarding-CFIUS.pdf
Following is part of a discussion from the Reed-Smith law form web site of proposed legislation to expand U.S. government review of foreign financial invests in the interests of national security:
Proposed Legislation Would Expand CFIUS Jurisdiction Over Foreign Investment
Authors: Michael J. Lowell Jill Ottenberg Paula A. Salamoun
On November 8, 2017, a bipartisan bill was proposed in the Senate to “modernize and strengthen the process by which the Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks.”1 Co-sponsored by Senators John Cornyn (R-TX), Dianne Feinstein (D-CA) and Richard Burr (R-NC), the Foreign Investment Risk Review Modernization Act (FIRRMA) is intended to “provide CFIUS with updated tools to address present and future security needs . . . [and] strengthen CFIUS by expanding its jurisdiction and moderniz[ing] its processes.” The legislative proposal follows a Senate hearing held in September before the Banking, Housing and Urban Affairs Committee, which sought to examine the CFIUS process and scope.
FIRRMA has been proposed as a means to address the “gaps in the current process [that] have allowed foreign adversaries to weaponize their investment in U.S. companies and transfer sensitive dual-use U.S. technologies, many of which have potential military applications.” FIRRMA comes at a time when there has been growing concern amongst Congress, the intelligence community, as well as the Trump administration, that the CFIUS process is outdated and in need of reform. Similar to Senator Cornyn’s concern, Secretary of Defense Jim Mattis has called the CFIUS process “outdated and overburdened”. The reform proposed by FIRRMA would serve to significantly alter the CFIUS process in a number of meaningful ways.
Background
CFIUS is an interagency organization that reviews inbound foreign investments for national security concerns, and advises the President on appropriate actions that may be necessary to suspend or prohibit foreign acquisitions, mergers, or takeovers which threaten to impair the national security of the United States. CFIUS has the authority to review all “covered transactions” for potential national security concerns. “Covered transaction” is a term of art defined by statute, and applies to any transaction that will result in “foreign control” of a U.S. business. A transaction will be found to result in foreign control of a U.S. business if the transaction will result in a foreign person or business having “power, direct or indirect, through the ownership of a majority or a dominant minority of the total outstanding voting interest in an entity, board representation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct, or decide important matters affecting an entity . . .” Under the current statutory construction governing CFIUS, a foreign person does not control an entity if it holds 10% or less of the voting interest in the entity and it holds that interest solely for the purpose of a passive investment.6 While the statute covering CFIUS does not define what constitutes a “national security concern,” it does include a list of factors that would contribute to a finding that a covered transaction has national security implications. These factors include, but are not limited to, whether the transaction will affect: national defense requirements; U.S. technological leadership in areas affecting national security; or U.S. critical technologies and infrastructure.
Under the current CFIUS process, parties to a covered transaction make a voluntary filing to begin CFIUS review of the transaction. CFIUS may also compel filings if it is determined that the transaction may pose a risk to national security. Following the filing of the initial notice, CFIUS will conduct an initial 30-day review, followed by an additional 45-day investigation period if it is determined that such an investigation is warranted. After the 45-day investigation, CFIUS may refer the transaction for a 15-day presidential review. The President makes the ultimate determination of whether to suspend or prohibit the transaction from proceeding. Even if CFIUS does not refer the transaction for presidential review, if it is determined that the transaction presents national security risks, CFIUS may impose mitigation measures as a condition of clearance.
FIRRMA Modifications to the CFIUS Process
If passed, FIRRMA will expand the scope of transactions that CFIUS has the authority to review, as well as alter the nature of the review process itself.
Expanding CFIUS’s Jurisdiction
FIRRMA would expand the definition of “covered transactions” to include a broader range of transactions that would be subject to CFIUS jurisdiction. Under FIRRMA, “covered transactions” would include:
FIRRMA would also expand the definition of “critical technology” to include “[o]ther emerging technologies that could be essential for maintaining or increasing the technological advantage of the United States over countries of special concern with respect to national defense, intelligence, or other areas of national security, or gaining such an advantage over such countries in areas where such an advantage may not currently exist.”
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Currently developing U.S. government policy linked to national security seeks to protect established American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei. For example, U.S. officials reportedly pressed AT&T not to distribute Huawei 5G cell phones, and AT&T complied. Huawei and and Samsung are identified by the Wall Street Journal as the principal
companies developing 5G technology for cell phones.
The Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks. It recently and famously squelched the idea of a Qualcomm/Broadcom merger, and has taken similarly aggressive actions in the past. Reasons include protecting American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei.
Proposed legislation with bi-partisan support proposes expanding the jurisdiction of CFIUS. The legislation would give CFIUS jurisdiction over non-passive, minority position investments by a foreign person; also over joint ventures involving technology transfers in a foreign entity.
The CFIUS process does not involve court review. It does involve evaluation of competition in markets, as addressed in a recent Treasury letter to Qualcomm. As pointed out in a Wall Street Journal article, the letter says that “Qualcomm is a global leader in the development and commercialization of foundational technologies and products used in mobile devices and other wireless products, including network equipment, broadband gateway equipment, and consumer electronic devices.” Also, that experience has “positioned Qualcomm as the current leading company in 5G technology development and standard setting.” The letter says further that iQualcomm’s leadership role in the development of leading edge 5G technology is good for national security: “Qualcomm has become well-known to, and trusted by, the U.S. government. Having a well-known and trusted company hold the dominant role that Qualcomm does in the U.S. telecommunications infrastructure provides significant confidence in the integrity of such infrastructure as it relates to national security.” The letter says that any diminishing of that role is a potential opening for China and, specifically, Huawei Technologies Co., a Chinese telecommunications-equipment maker that is also a big force in 5G. The Wall Street Journal points out that Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology.
A point that has gotten little public comment is the relationship between protectionist policies said to advance national security interests and usual considerations of competition policy, including antitrust. National security and encouragement of domestic industry may be seen as trumping competition and antitrust policy interests, but it does not follow that competition policy is irrelevant or that application of antitrust expertise would not be useful.
There is some analogy to U.S government policy toward banks following the 2008 financial markets. Banks were pressured by the government to merge, and thereafter were regulated with scant attention to competition policy or antitrust expertise. It may be reasonably argued that even in a financial crisis competition policy considerations and antitrust expertise should have been brought to bear. Similarly, today's strong concerns about national security and protection of domestic industry should not foreclose consideration of competition policy considerations and antitrust expertise.
Generally, competition policy concerns will push for encouraging healthy international competition, and encouraging domestic industry through R & D and other support, rather than attempting to discourage rivals.
****
Following is a Treasury letter that presaged the U.S. Government decision to block the Qualcomm/Broadcom merger, and describes the relevant competition between U.S. and Chinese companies:
https://www.qcomvalue.com/wp-content/uploads/2018/03/Letter-from-Treasury-Department-to-Broadcom-and-Qualcomm-regarding-CFIUS.pdf
Following is part of a discussion from the Reed-Smith law form web site of proposed legislation to expand U.S. government review of foreign financial invests in the interests of national security:
Proposed Legislation Would Expand CFIUS Jurisdiction Over Foreign Investment
Authors: Michael J. Lowell Jill Ottenberg Paula A. Salamoun
On November 8, 2017, a bipartisan bill was proposed in the Senate to “modernize and strengthen the process by which the Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks.”1 Co-sponsored by Senators John Cornyn (R-TX), Dianne Feinstein (D-CA) and Richard Burr (R-NC), the Foreign Investment Risk Review Modernization Act (FIRRMA) is intended to “provide CFIUS with updated tools to address present and future security needs . . . [and] strengthen CFIUS by expanding its jurisdiction and moderniz[ing] its processes.” The legislative proposal follows a Senate hearing held in September before the Banking, Housing and Urban Affairs Committee, which sought to examine the CFIUS process and scope.
FIRRMA has been proposed as a means to address the “gaps in the current process [that] have allowed foreign adversaries to weaponize their investment in U.S. companies and transfer sensitive dual-use U.S. technologies, many of which have potential military applications.” FIRRMA comes at a time when there has been growing concern amongst Congress, the intelligence community, as well as the Trump administration, that the CFIUS process is outdated and in need of reform. Similar to Senator Cornyn’s concern, Secretary of Defense Jim Mattis has called the CFIUS process “outdated and overburdened”. The reform proposed by FIRRMA would serve to significantly alter the CFIUS process in a number of meaningful ways.
Background
CFIUS is an interagency organization that reviews inbound foreign investments for national security concerns, and advises the President on appropriate actions that may be necessary to suspend or prohibit foreign acquisitions, mergers, or takeovers which threaten to impair the national security of the United States. CFIUS has the authority to review all “covered transactions” for potential national security concerns. “Covered transaction” is a term of art defined by statute, and applies to any transaction that will result in “foreign control” of a U.S. business. A transaction will be found to result in foreign control of a U.S. business if the transaction will result in a foreign person or business having “power, direct or indirect, through the ownership of a majority or a dominant minority of the total outstanding voting interest in an entity, board representation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct, or decide important matters affecting an entity . . .” Under the current statutory construction governing CFIUS, a foreign person does not control an entity if it holds 10% or less of the voting interest in the entity and it holds that interest solely for the purpose of a passive investment.6 While the statute covering CFIUS does not define what constitutes a “national security concern,” it does include a list of factors that would contribute to a finding that a covered transaction has national security implications. These factors include, but are not limited to, whether the transaction will affect: national defense requirements; U.S. technological leadership in areas affecting national security; or U.S. critical technologies and infrastructure.
Under the current CFIUS process, parties to a covered transaction make a voluntary filing to begin CFIUS review of the transaction. CFIUS may also compel filings if it is determined that the transaction may pose a risk to national security. Following the filing of the initial notice, CFIUS will conduct an initial 30-day review, followed by an additional 45-day investigation period if it is determined that such an investigation is warranted. After the 45-day investigation, CFIUS may refer the transaction for a 15-day presidential review. The President makes the ultimate determination of whether to suspend or prohibit the transaction from proceeding. Even if CFIUS does not refer the transaction for presidential review, if it is determined that the transaction presents national security risks, CFIUS may impose mitigation measures as a condition of clearance.
FIRRMA Modifications to the CFIUS Process
If passed, FIRRMA will expand the scope of transactions that CFIUS has the authority to review, as well as alter the nature of the review process itself.
Expanding CFIUS’s Jurisdiction
FIRRMA would expand the definition of “covered transactions” to include a broader range of transactions that would be subject to CFIUS jurisdiction. Under FIRRMA, “covered transactions” would include:
- Non-passive, minority-position investments by a foreign person in a critical technology or infrastructure company. Even if such an investment does not result in foreign control of the U.S. business, under FIRRMA, it will still be considered a covered transaction and subject to CFIUS review.
- Joint ventures involving technology transfers to a foreign entity. Under FIRRMA, an IP licensing arrangement that includes “associated support” (e.g. technical cooperation or training) will be a covered transaction, even if it does not result in foreign control of a U.S. business. This jurisdiction would seemingly create a parallel requirement for U.S. government approval when the IP involved is subject to export control requirements, which already require prior U.S. government approval in many cases.
- Real estate investments near military or other national security facilities. Covered transactions under FIRRMA would include foreign investments in real estate even if it does not host an existing U.S. business.
FIRRMA would also expand the definition of “critical technology” to include “[o]ther emerging technologies that could be essential for maintaining or increasing the technological advantage of the United States over countries of special concern with respect to national defense, intelligence, or other areas of national security, or gaining such an advantage over such countries in areas where such an advantage may not currently exist.”
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
J
Six top US intelligence chiefs caution against buying Huawei and other Chinese phones
Sara Salinas | @saracsalinas
Published 12:22 PM ET Tue, 13 Feb 2018 Updated 11:03 AM ET Thu, 15 Feb 2018CNBC.com
Six top U.S. intelligence chiefs told the Senate Intelligence Committee in February that they would not advise Americans to use products or services from Chinese smartphone maker Huawei.
The six — including the heads of the CIA, FBI, NSA and the director of national intelligence — first expressed their distrust of Apple-rival Huawei and fellow Chinese telecom company ZTE in reference to public servants and state agencies.
When prompted during the hearing, all six indicated they would not recommend private citizens use products from the Chinese companies.
"We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks," FBI Director Chris Wray testified.
"That provides the capacity to exert pressure or control over our telecommunications infrastructure," Wray said. "It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage."
In a response, Huawei said that it "poses no greater cybersecurity risk than any ICT vendor."
A spokesman said in a statement: "Huawei is aware of a range of U.S. government activities seemingly aimed at inhibiting Huawei's business in the U.S. market. Huawei is trusted by governments and customers in 170 countries worldwide and poses no greater cybersecurity risk than any ICT vendor, sharing as we do common global supply chains and production capabilities."
Huawei has been trying to enter the U.S. market, first through a partnership with AT&T that was ultimately called off. At the time, Huawei said its products would still launch on American markets.
Last month, Huawei CEO Richard Yu raged against American carriers, accusing them of depriving customers of choice. Reports said U.S. lawmakers urged AT&T to pull out of the deal.
ZTE said in a statement it "takes cybersecurity and privacy seriously" and that it remains a "trusted partner" to US suppliers and customers.
"As a publicly traded company, we are committed to adhering to all applicable laws and regulations of the United States, work with carriers to pass strict testing protocols, and adhere to the highest business standards," a ZTE spokesperson said.
At the hearing, the intelligence chiefs commended American telecom companies for their measured resistance to the Chinese companies.
"This is a challenge I think that is only going to increase, not lessen over time for us," said Adm. Michael Rogers, the NSA's director. "You need to look long and hard at companies like this."
https://www.cnbc.com/2018/02/13/chinas-hauwei-top-us-intelligence-chiefs-caution-americans-away.html
Another view: The WSJ editorializes, suggesting that the real reason for US government opposition to Huwei's 5G technology is fear that Huwei's technology advances will swamp less innovative US companies
3/9/2018 Why Washington Is So Obsessed With China’s Huawei - WSJ
Excerpts from WSJ article:
The world’s top cellular-equipment maker and a leading smartphone brand, Huawei in the past
three months has been the subject of a series of interventions, or attempted interventions, by
the Trump administration and Congress across the telecommunications industry.
***
5G is the next-generation mobile-network technology that the industry is preparing to roll out
around the world. American officials and some Western telecom companies worry that if China
gains widespread 5G before the U.S. does, it could have a head start in technologies that the new
networks’ speed and capacity are expected to kick-start, like self-driving cars.
Some Washington policy makers and industry executives have suggested a deeper worry that,
with Huawei’s help, China could displace Silicon Valley as the world’s innovation center and
lure top engineers there. Another concern: If Huawei extends its lead in the telecom-equipment
industry, these officials believe, American wireless carriers might have no choice but to use
Huawei gear in the future.
***
The extent to which the U.S. government shares that fear was laid bare in unusual clarity in the
CFIUS letter. The committee said it would probe whether a Broadcom-Qualcomm tie-up would
“leave an opening for China to expand its influence on the 5G standard setting process.” It cited
specifically Huawei’s 5G “engagement.”
***
Concern over Huawei isn’t new. Congress effectively barred major carriers from using the
company, after a 2012 report concluded Beijing could force Huawei to use knowledge of how its
own equipment is designed to spy or disable telecom networks.
***
Late last year, congressional pressure mounted on AT&T to drop plans to sell Huawei
smartphones in the U.S. In a surprise reversal, the company did just that in January; it declined
to cite a reason.
***
in December, President Donald Trump signed a defense-spending bill that will ban
equipment from Huawei and China’s ZTE Corp. from the Defense Department’s nuclear-weapon
infrastructure. Lawmakers in the House and Senate have also introduced separate bills to bar
the U.S. government and its contractors from using Huawei and ZTE equipment.
https://www.wsj.com/articles/why-washington-is-so-obsessed-with-chinas-huawei-1520373341
Six top US intelligence chiefs caution against buying Huawei and other Chinese phones
- The directors of the CIA, FBI, NSA and several other intelligence agencies express their distrust of Apple-rival Huawei and fellow Chinese telecom company ZTE.
- During a hearing, the intelligence chiefs commended American telecom companies for their measured resistance to the Chinese companies.
- Huawei has been trying to enter the U.S. market, first through a partnership with AT&T that was ultimately called off.
Sara Salinas | @saracsalinas
Published 12:22 PM ET Tue, 13 Feb 2018 Updated 11:03 AM ET Thu, 15 Feb 2018CNBC.com
Six top U.S. intelligence chiefs told the Senate Intelligence Committee in February that they would not advise Americans to use products or services from Chinese smartphone maker Huawei.
The six — including the heads of the CIA, FBI, NSA and the director of national intelligence — first expressed their distrust of Apple-rival Huawei and fellow Chinese telecom company ZTE in reference to public servants and state agencies.
When prompted during the hearing, all six indicated they would not recommend private citizens use products from the Chinese companies.
"We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks," FBI Director Chris Wray testified.
"That provides the capacity to exert pressure or control over our telecommunications infrastructure," Wray said. "It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage."
In a response, Huawei said that it "poses no greater cybersecurity risk than any ICT vendor."
A spokesman said in a statement: "Huawei is aware of a range of U.S. government activities seemingly aimed at inhibiting Huawei's business in the U.S. market. Huawei is trusted by governments and customers in 170 countries worldwide and poses no greater cybersecurity risk than any ICT vendor, sharing as we do common global supply chains and production capabilities."
Huawei has been trying to enter the U.S. market, first through a partnership with AT&T that was ultimately called off. At the time, Huawei said its products would still launch on American markets.
Last month, Huawei CEO Richard Yu raged against American carriers, accusing them of depriving customers of choice. Reports said U.S. lawmakers urged AT&T to pull out of the deal.
ZTE said in a statement it "takes cybersecurity and privacy seriously" and that it remains a "trusted partner" to US suppliers and customers.
"As a publicly traded company, we are committed to adhering to all applicable laws and regulations of the United States, work with carriers to pass strict testing protocols, and adhere to the highest business standards," a ZTE spokesperson said.
At the hearing, the intelligence chiefs commended American telecom companies for their measured resistance to the Chinese companies.
"This is a challenge I think that is only going to increase, not lessen over time for us," said Adm. Michael Rogers, the NSA's director. "You need to look long and hard at companies like this."
https://www.cnbc.com/2018/02/13/chinas-hauwei-top-us-intelligence-chiefs-caution-americans-away.html
Another view: The WSJ editorializes, suggesting that the real reason for US government opposition to Huwei's 5G technology is fear that Huwei's technology advances will swamp less innovative US companies
3/9/2018 Why Washington Is So Obsessed With China’s Huawei - WSJ
Excerpts from WSJ article:
The world’s top cellular-equipment maker and a leading smartphone brand, Huawei in the past
three months has been the subject of a series of interventions, or attempted interventions, by
the Trump administration and Congress across the telecommunications industry.
***
5G is the next-generation mobile-network technology that the industry is preparing to roll out
around the world. American officials and some Western telecom companies worry that if China
gains widespread 5G before the U.S. does, it could have a head start in technologies that the new
networks’ speed and capacity are expected to kick-start, like self-driving cars.
Some Washington policy makers and industry executives have suggested a deeper worry that,
with Huawei’s help, China could displace Silicon Valley as the world’s innovation center and
lure top engineers there. Another concern: If Huawei extends its lead in the telecom-equipment
industry, these officials believe, American wireless carriers might have no choice but to use
Huawei gear in the future.
***
The extent to which the U.S. government shares that fear was laid bare in unusual clarity in the
CFIUS letter. The committee said it would probe whether a Broadcom-Qualcomm tie-up would
“leave an opening for China to expand its influence on the 5G standard setting process.” It cited
specifically Huawei’s 5G “engagement.”
***
Concern over Huawei isn’t new. Congress effectively barred major carriers from using the
company, after a 2012 report concluded Beijing could force Huawei to use knowledge of how its
own equipment is designed to spy or disable telecom networks.
***
Late last year, congressional pressure mounted on AT&T to drop plans to sell Huawei
smartphones in the U.S. In a surprise reversal, the company did just that in January; it declined
to cite a reason.
***
in December, President Donald Trump signed a defense-spending bill that will ban
equipment from Huawei and China’s ZTE Corp. from the Defense Department’s nuclear-weapon
infrastructure. Lawmakers in the House and Senate have also introduced separate bills to bar
the U.S. government and its contractors from using Huawei and ZTE equipment.
https://www.wsj.com/articles/why-washington-is-so-obsessed-with-chinas-huawei-1520373341
NYT explains CFIUS and its ability to quash mergers on national security grounds
Qualcomm, one of the world’s largest chip makers, has spent the last four months fending off a hostile takeover from Broadcom, a Singaporean rival. The fate of the proposed takeover may now be in jeopardy because of a little-known committee of top administration officials who meet in secret, wielding power to kill the biggest multibillion-dollar global deals.
The Committee on Foreign Investment in the United States, or Cfius (pronounced Sif-e-us), investigates mergers that could result in control of an American business by a foreign individual or company, judging whether deals could threaten national interests. In a letter on Monday, the committee said that a deal for Qualcomm, whose semiconductors will be used in the next generation of ultrafast wireless networks known as 5G, could pose a risk to national security.
It appears to be the first time the committee has intervened on a deal before it has been finalized, a signal that Cfius may play a more prominent role in the Trump administration’s America First policymaking.
Cfius is the ‘ultimate regulatory bazooka’
The committee is made up of members of the State, Defense, Justice, Commerce, Energy and Homeland Security departments, and is led by the treasury secretary. These days, that means Steven Mnuchin.
When Cfius reviews a possible deal, the committee does not publicly disclose any information provided to it — nor does it even acknowledge that a party to a merger has submitted a deal to review. It also has the authority to intervene and review pending or completed transactions, without being asked by any of the companies involved, if members of the committee think a deal that could raise national security concerns.
The committee’s findings, which are not publicly announced, are sent to the president, who may suspend or prohibit the deal.
But cases do not often get that far: The rejection of a deal by the committee is usually enough to kill it.
Cfius “is the No. 1 weapon in the Trump administration’s protectionist arsenal, the ultimate regulatory bazooka,” said Hernan Cristerna, co-head of global mergers and acquisitions at JPMorgan Chase.
* * *
Cfius was empowered with reviewing mergers for potential threats.
China is a frequent element in the deals Cfius reviewsCfius reviews deals across a variety of industries and companies from dozens of different countries. It has often set its sites on deals involving Chinese companies, as the country’s economic might has grown in recent years. From 2013 to 2015, the latest years for which the committee has made data public, about 20 percent of the deals that Cfius reviewed involved investors from China.
Among the notable recent reviews were:
MONEYGRAM — ANT FINANCIAL Ant Financial, a Chinese electronic payments company, wanted to purchase MoneyGram, a money transfer company based in Dallas, for $1.2 billion. But the deal collapsed in January after both sides said Cfius refused to approve it. The collapse came despite a charm offensive by Jack Ma, the Chinese tycoon who controls Ant Financial, who had visited President-elect Donald Trump at Trump Tower and pledged to create one million American jobs. But he could not overcome the Trump administration’s concerns about Chinese acquisition of American know-how.
CANYON BRIDGE CAPITAL — LATTICE Canyon Bridge Capital, a private equity firm, wanted to acquire Lattice, a chip maker based in Portland, Ore. Canyon Bridge received investment from a group that included China Venture Capital Fund Corporation, which is owned by Chinese government-backed organizations. Lattice said Cfius objected to the deal, and the company tried to appeal to the president, offering to resolve national security concerns. But Mr. Trump formally blocked the deal in September 2017, prompting China’s commerce ministry to issue a statement saying countries should not push protectionism through security reviews.
GO SCALE — PHILIPS In 2015, the Dutch electronics giant Philips had an agreement to sell a controlling stake in its automotive and LED business for as much as $2.9 billion to GO Scale, an investment fund sponsored by GSR Ventures of China and Oak Investment Partners. Philips canceled the deal after it could not resolve Cfius’s concerns, and in December 2016 announced it would sell the unit to Apollo Global Management for $1.5 billion, almost half the amount of the earlier deal.
The Broadcom-Qualcomm deal does not involve China-based companies. But there has been concern that the acquisition could undermine the ability of the United States to compete with China in the race for telecommunications supremacy. Members of Cfius pointed to Broadcom’s statements that it would take a “‘private equity’-style” approach if it acquired Qualcomm, suggesting to the committee that Broadcom could reduce long-term investment on research and development in favor of focusing on short-term profits.
While the United States has remained a standard-bearer in mobile technology, the committee noted, “China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover.”
Lawmakers want to expand Cfius’s jurisdiction
A bipartisan group in Congress has proposed legislation that would greatly expand the number of deals reviewed by Cfius. In November, Senator John Cornyn, Republican of Texas, and Senator Dianne Feinstein, Democrat of California, introduced a bill that could add thousands of companies with foreign ties to the list of those reviewed each year by Cfius and provide more funding to deal with that increase. A similar House bill was also introduced by Representative Robert Pittenger, Republican of North Carolina. The measure would expand Cfius’s jurisdiction to include joint ventures, sales of minority stakes and real estate deals for property near military bases and other sensitive facilities.
“By exploiting gaps in the existing Cfius review process,” said Mr. Cornyn, “potential adversaries, such as China, have been effectively degrading our country’s military technological edge by acquiring, and otherwise investing in U.S. companies.”
The proposal has drawn objections from some businesses. IBM said the changes would limit “the ability of American firms to do business abroad while empowering foreign competitors to capture global markets.”
https://www.nytimes.com/2018/03/05/business/what-is-cfius.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
Qualcomm, one of the world’s largest chip makers, has spent the last four months fending off a hostile takeover from Broadcom, a Singaporean rival. The fate of the proposed takeover may now be in jeopardy because of a little-known committee of top administration officials who meet in secret, wielding power to kill the biggest multibillion-dollar global deals.
The Committee on Foreign Investment in the United States, or Cfius (pronounced Sif-e-us), investigates mergers that could result in control of an American business by a foreign individual or company, judging whether deals could threaten national interests. In a letter on Monday, the committee said that a deal for Qualcomm, whose semiconductors will be used in the next generation of ultrafast wireless networks known as 5G, could pose a risk to national security.
It appears to be the first time the committee has intervened on a deal before it has been finalized, a signal that Cfius may play a more prominent role in the Trump administration’s America First policymaking.
Cfius is the ‘ultimate regulatory bazooka’
The committee is made up of members of the State, Defense, Justice, Commerce, Energy and Homeland Security departments, and is led by the treasury secretary. These days, that means Steven Mnuchin.
When Cfius reviews a possible deal, the committee does not publicly disclose any information provided to it — nor does it even acknowledge that a party to a merger has submitted a deal to review. It also has the authority to intervene and review pending or completed transactions, without being asked by any of the companies involved, if members of the committee think a deal that could raise national security concerns.
The committee’s findings, which are not publicly announced, are sent to the president, who may suspend or prohibit the deal.
But cases do not often get that far: The rejection of a deal by the committee is usually enough to kill it.
Cfius “is the No. 1 weapon in the Trump administration’s protectionist arsenal, the ultimate regulatory bazooka,” said Hernan Cristerna, co-head of global mergers and acquisitions at JPMorgan Chase.
* * *
Cfius was empowered with reviewing mergers for potential threats.
China is a frequent element in the deals Cfius reviewsCfius reviews deals across a variety of industries and companies from dozens of different countries. It has often set its sites on deals involving Chinese companies, as the country’s economic might has grown in recent years. From 2013 to 2015, the latest years for which the committee has made data public, about 20 percent of the deals that Cfius reviewed involved investors from China.
Among the notable recent reviews were:
MONEYGRAM — ANT FINANCIAL Ant Financial, a Chinese electronic payments company, wanted to purchase MoneyGram, a money transfer company based in Dallas, for $1.2 billion. But the deal collapsed in January after both sides said Cfius refused to approve it. The collapse came despite a charm offensive by Jack Ma, the Chinese tycoon who controls Ant Financial, who had visited President-elect Donald Trump at Trump Tower and pledged to create one million American jobs. But he could not overcome the Trump administration’s concerns about Chinese acquisition of American know-how.
CANYON BRIDGE CAPITAL — LATTICE Canyon Bridge Capital, a private equity firm, wanted to acquire Lattice, a chip maker based in Portland, Ore. Canyon Bridge received investment from a group that included China Venture Capital Fund Corporation, which is owned by Chinese government-backed organizations. Lattice said Cfius objected to the deal, and the company tried to appeal to the president, offering to resolve national security concerns. But Mr. Trump formally blocked the deal in September 2017, prompting China’s commerce ministry to issue a statement saying countries should not push protectionism through security reviews.
GO SCALE — PHILIPS In 2015, the Dutch electronics giant Philips had an agreement to sell a controlling stake in its automotive and LED business for as much as $2.9 billion to GO Scale, an investment fund sponsored by GSR Ventures of China and Oak Investment Partners. Philips canceled the deal after it could not resolve Cfius’s concerns, and in December 2016 announced it would sell the unit to Apollo Global Management for $1.5 billion, almost half the amount of the earlier deal.
The Broadcom-Qualcomm deal does not involve China-based companies. But there has been concern that the acquisition could undermine the ability of the United States to compete with China in the race for telecommunications supremacy. Members of Cfius pointed to Broadcom’s statements that it would take a “‘private equity’-style” approach if it acquired Qualcomm, suggesting to the committee that Broadcom could reduce long-term investment on research and development in favor of focusing on short-term profits.
While the United States has remained a standard-bearer in mobile technology, the committee noted, “China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover.”
Lawmakers want to expand Cfius’s jurisdiction
A bipartisan group in Congress has proposed legislation that would greatly expand the number of deals reviewed by Cfius. In November, Senator John Cornyn, Republican of Texas, and Senator Dianne Feinstein, Democrat of California, introduced a bill that could add thousands of companies with foreign ties to the list of those reviewed each year by Cfius and provide more funding to deal with that increase. A similar House bill was also introduced by Representative Robert Pittenger, Republican of North Carolina. The measure would expand Cfius’s jurisdiction to include joint ventures, sales of minority stakes and real estate deals for property near military bases and other sensitive facilities.
“By exploiting gaps in the existing Cfius review process,” said Mr. Cornyn, “potential adversaries, such as China, have been effectively degrading our country’s military technological edge by acquiring, and otherwise investing in U.S. companies.”
The proposal has drawn objections from some businesses. IBM said the changes would limit “the ability of American firms to do business abroad while empowering foreign competitors to capture global markets.”
https://www.nytimes.com/2018/03/05/business/what-is-cfius.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
From Better Markets:Protecting Investors From Rip-Offs Must Be Priority for SECMarch 16, 2018
FOR IMMEDIATE RELEASE
Friday, March 16, 2018
Contact: Nick Jacobs, 202-618-6430 or [email protected]
Washington, D.C. – The executive directors of Public Citizen and Better Markets, two of the nation’s leading organizations protecting investors, called on U.S. Securities and Exchange Commission (SEC) Chair Jay Clayton to reject any proposals that would allow publicly traded companies to force their investors into mandatory arbitration, through obscure clauses in initial public offering (IPO) documents or otherwise. Such action would deprive investors of their right to access the justice system if they are scammed or cheated and would allow companies to pocket their ill-gotten gains, sometimes amounting to hundreds of millions of dollars.
“Corporations have invested a decade in a campaign to convince the SEC to permit them to slip forced arbitration clauses into IPOs, precisely because they know that only a tiny few will pursue cases on their own, before arbiters,” said Robert Weissman, president of Public Citizen.
Forced arbitration clauses, which use fine-print “take-it-or-leave it” agreements to rig the system, have become ubiquitous in modern society. These clauses deprive people of their day in court when they are harmed by violations of the law. Instead, people are forced into industry-biased, secretive arbitration proceedings with little right to appeal if arbitrators ignore the law or facts.
“Arbitration proceedings are like kangaroo courts where everything is stacked against the investor and the industry almost always wins. That’s why the industry has to force it on investors, who will be doubly victimized. First, when they are ripped off and, second, when they can’t get a fair hearing to recover their losses. Adding insult to injury, the company that rips them off will get to pocket a windfall of ill-gotten gains, often tens of millions of dollars. The SEC must not allow this,” stated Dennis M. Kelleher, president and CEO of Better Markets.
Industry and its allies, including at the regulatory agencies that are supposed to protect investors first and foremost, increasingly are pushing for this dramatic policy change.
Advocates for investors are resisting these attempts. Last month, U.S. Sen. Elizabeth Warren (D-Mass.) questioned Chairman Clayton on whether the SEC was prepared to allow companies to insert forced arbitration clauses into IPO documents. Also last month, SEC Commissioner Robert J. Jackson, Jr., and SEC Investor Advocate Rick Fleming both strongly and publicly cautioned the SEC against taking actions that would allow companies to force investors into arbitration.
The full letter to Clayton can be read here and here.
FOR IMMEDIATE RELEASE
Friday, March 16, 2018
Contact: Nick Jacobs, 202-618-6430 or [email protected]
Washington, D.C. – The executive directors of Public Citizen and Better Markets, two of the nation’s leading organizations protecting investors, called on U.S. Securities and Exchange Commission (SEC) Chair Jay Clayton to reject any proposals that would allow publicly traded companies to force their investors into mandatory arbitration, through obscure clauses in initial public offering (IPO) documents or otherwise. Such action would deprive investors of their right to access the justice system if they are scammed or cheated and would allow companies to pocket their ill-gotten gains, sometimes amounting to hundreds of millions of dollars.
“Corporations have invested a decade in a campaign to convince the SEC to permit them to slip forced arbitration clauses into IPOs, precisely because they know that only a tiny few will pursue cases on their own, before arbiters,” said Robert Weissman, president of Public Citizen.
Forced arbitration clauses, which use fine-print “take-it-or-leave it” agreements to rig the system, have become ubiquitous in modern society. These clauses deprive people of their day in court when they are harmed by violations of the law. Instead, people are forced into industry-biased, secretive arbitration proceedings with little right to appeal if arbitrators ignore the law or facts.
“Arbitration proceedings are like kangaroo courts where everything is stacked against the investor and the industry almost always wins. That’s why the industry has to force it on investors, who will be doubly victimized. First, when they are ripped off and, second, when they can’t get a fair hearing to recover their losses. Adding insult to injury, the company that rips them off will get to pocket a windfall of ill-gotten gains, often tens of millions of dollars. The SEC must not allow this,” stated Dennis M. Kelleher, president and CEO of Better Markets.
Industry and its allies, including at the regulatory agencies that are supposed to protect investors first and foremost, increasingly are pushing for this dramatic policy change.
Advocates for investors are resisting these attempts. Last month, U.S. Sen. Elizabeth Warren (D-Mass.) questioned Chairman Clayton on whether the SEC was prepared to allow companies to insert forced arbitration clauses into IPO documents. Also last month, SEC Commissioner Robert J. Jackson, Jr., and SEC Investor Advocate Rick Fleming both strongly and publicly cautioned the SEC against taking actions that would allow companies to force investors into arbitration.
The full letter to Clayton can be read here and here.
A California district attorney’s hiring of outside law firms on a contingency basis did not violate a defendant’s rights to due process, according to the first federal circuit court to address the issue.
In an opinion on Thursday, the U.S. Court of Appeals for the Ninth Circuit upheld the dismissal of a case that American Bankers Management Co. Inc. brought against the district attorney of Trinity County. The district attorney hired three law firms on contingency to pursue injunctive relief and civil penalties against the company under California consumer protection laws. The panel disagreed with American Bankers’ contention that the hiring of the law firms violated its due process rights under the Fourteenth Amendment.
The opinion is here:
https://images.law.com/contrib/content/uploads/documents/403/12061/Contingency-Ruling-3-16.pdf
Excerpt from The Recorder, Law.com
In an opinion on Thursday, the U.S. Court of Appeals for the Ninth Circuit upheld the dismissal of a case that American Bankers Management Co. Inc. brought against the district attorney of Trinity County. The district attorney hired three law firms on contingency to pursue injunctive relief and civil penalties against the company under California consumer protection laws. The panel disagreed with American Bankers’ contention that the hiring of the law firms violated its due process rights under the Fourteenth Amendment.
The opinion is here:
https://images.law.com/contrib/content/uploads/documents/403/12061/Contingency-Ruling-3-16.pdf
Excerpt from The Recorder, Law.com
From DMN: Mayors from 12 U.S. Cities Will Refuse Business from Any Company Opposed to Net Neutrality
“We will not do business with any vendor that does not honor net neutrality.”
— Bill de Blasio, mayor of New York City.
Now, there’s another front in the net neutrality rebellion: mayors from major U.S. cities. Already, twelve different mayors from some of the largest U.S. cities in America have vowed to sever business ties with any company that refuses to honor net neutrality provisions.
The just-formed Mayors for Net Neutrality Coalition already includes New York City mayor Bill de Blasio, San Francisco mayor Mark Farrell, Portland mayor Ted Wheeler, and San Jose mayor Sam Liccardo. The group just announced their existence at SXSW Interactive in Austin, drawing another layer of resistance for embattled Trump FCC chairman Ajit Pai.
The group is even talking about building certified ‘Net Neutrality Cities,’ and encouraging other mayors to sign their Cities Open Internet Pledge. That Pledge requires anyone doing business within the respective city to adhere to net neutrality principles — or take their business elsewhere. The end result is a net neutrality safe zone.
Read the rest here.
“We will not do business with any vendor that does not honor net neutrality.”
— Bill de Blasio, mayor of New York City.
Now, there’s another front in the net neutrality rebellion: mayors from major U.S. cities. Already, twelve different mayors from some of the largest U.S. cities in America have vowed to sever business ties with any company that refuses to honor net neutrality provisions.
The just-formed Mayors for Net Neutrality Coalition already includes New York City mayor Bill de Blasio, San Francisco mayor Mark Farrell, Portland mayor Ted Wheeler, and San Jose mayor Sam Liccardo. The group just announced their existence at SXSW Interactive in Austin, drawing another layer of resistance for embattled Trump FCC chairman Ajit Pai.
The group is even talking about building certified ‘Net Neutrality Cities,’ and encouraging other mayors to sign their Cities Open Internet Pledge. That Pledge requires anyone doing business within the respective city to adhere to net neutrality principles — or take their business elsewhere. The end result is a net neutrality safe zone.
Read the rest here.
A brief primer on bitcoin, blockchain, and banks
by Aziz Bin Zainuddin, founder and chief crypto officer, Master The Crypto
Some have dismissed blockchain and cryptocurrency as a fad that spells too much trouble for governments to become a mainstay in our everyday lives. Others believe it presents too many advantages for businesses and consumers for it to disappear.
Either way, the technology is too revolutionary for banks to ignore.
Here is a roundup of how blockchain works and how banks might utilize it in the future.
A brief history
Bitcoin is a borderless decentralized digital currency that was invented in 2008. Its founder, known only by the pseudonym Satoshi Nakamoto, cultivated it partly in response to the global financial crisis that unfolded in the same year.
One of Nakamoto's primary goals was to create a currency with a value that couldn't be affected by quantitative easing. To this end, he created an automated mining system that ensures there will only ever be 21 million bitcoins in existence. This means that the value of bitcoin will always be based on supply and demand.
Bitcoin transactions are stored in an immutable decentralized ledger called the blockchain. Instead of existing on a single server, it exists on every computer that can connect to the internet.
The decentralized nature of blockchain makes it more secure and reliable than traditional banking databases, as there is no single database that could to be compromised by hackers or suffer from system failure.
Blockchain transactions are pseudonymous and there is no central authority that can ban anyone from making bitcoin transactions.
The advantages of bitcoin over fiat currency have driven its remarkable growth in value since its creation.
The beauty of blockchain
Blockchain technology was invented simply as a ledger for bitcoin transactions. Eventually, though, it became clear that its decentralized, immutable, pseudonymous nature could be put to use in innumerable other industries.
The invention of Ethereum in 2015 was a historic moment for blockchain technology. This open-source platform allows developers to create any type of software on blockchain without limits.
Revolutionary blockchain technologies such as smart contracts and decentralized autonomous organizations seem to be poised to disrupt the banking industry in a major way.
How banks benefit
It is likely to be difficult for retail banks to ignore technology that is undeniably more secure and reliable than their current databases.
Firstly, its pseudonymous nature could help end identity fraud. Secondly, the decentralized nature of blockchain could help introduce faster payments than two centralized systems could ever manage.
While some blockchains (most notably bitcoin's) are notoriously slow, others that are lightning fast. Ripple, the second most-valuable cryptocurrency by market capitalization, can handle 1,500 transactions per second.
The use of smart contracts could improve the efficiency of banking transactions further still. Banks rely on contracts for all of their products, from credit cards to mortgages to checking and savings accounts.
Smart contracts can be applied to all of the processes detailed in these documents and, it is believed, massively reduce processing costs for banks. Indeed, smart contracts are expected to replace to replace the clunky and inefficient Know Your Customer identity management process soon rather than later.
Wasting no time
Several start-ups have received venture capital to develop the projects discussed above, but the majority of them are still just ideas at this stage.
However, several major banks have already moved to invest in and develop blockchain technology. A group of financial institutions led by Swiss bank UBS has agreed to use Ethereum to improve the quality of their reference data. Instead of entrusting it to a third party to review, they are happy to rely solely on blockchain.
Meanwhile, Santander will use Ripple to power its new mobile app and it has been widely predicted that central banks will hold bitcoin and Ether cryptocurrencies in their reserves for the first time this year.
The long view
Perhaps unsurprisingly, many central governments are doing their best to limit the growth of cryptocurrency on their shores.
This might be enough to halt the growth of bitcoin as the world's first truly global currency. It must overcome other hurdles as well, not least slow transaction times and wild fluctuations in value.
Whatever happens with bitcoin, though, it's difficult to dispute the advantages that blockchain is likely to bring to retail banking.
Aziz Bin Zainuddin is a blockchain expert and the founder and chief crypto officer of Master The Crypto (MasterTheCrypto.com), a knowledge hub and resource center for cryptocurrency investing and all things blockchain. In addition, Aziz runs C.M. Fund, a Singapore-based crypto hedge fund based that invests in cryptos with solid fundamentals and game-changing technology.
Credit: https://www.atmmarketplace.com/articles/could-bitcoin-and-blockchain-blow-up-banking-as-we-know-it/?utm_source=AMC&utm_medium=email&utm_campaign=EMNA&utm_content=2018-03-08%3Fstyle%3Dprint
by Aziz Bin Zainuddin, founder and chief crypto officer, Master The Crypto
Some have dismissed blockchain and cryptocurrency as a fad that spells too much trouble for governments to become a mainstay in our everyday lives. Others believe it presents too many advantages for businesses and consumers for it to disappear.
Either way, the technology is too revolutionary for banks to ignore.
Here is a roundup of how blockchain works and how banks might utilize it in the future.
A brief history
Bitcoin is a borderless decentralized digital currency that was invented in 2008. Its founder, known only by the pseudonym Satoshi Nakamoto, cultivated it partly in response to the global financial crisis that unfolded in the same year.
One of Nakamoto's primary goals was to create a currency with a value that couldn't be affected by quantitative easing. To this end, he created an automated mining system that ensures there will only ever be 21 million bitcoins in existence. This means that the value of bitcoin will always be based on supply and demand.
Bitcoin transactions are stored in an immutable decentralized ledger called the blockchain. Instead of existing on a single server, it exists on every computer that can connect to the internet.
The decentralized nature of blockchain makes it more secure and reliable than traditional banking databases, as there is no single database that could to be compromised by hackers or suffer from system failure.
Blockchain transactions are pseudonymous and there is no central authority that can ban anyone from making bitcoin transactions.
The advantages of bitcoin over fiat currency have driven its remarkable growth in value since its creation.
The beauty of blockchain
Blockchain technology was invented simply as a ledger for bitcoin transactions. Eventually, though, it became clear that its decentralized, immutable, pseudonymous nature could be put to use in innumerable other industries.
The invention of Ethereum in 2015 was a historic moment for blockchain technology. This open-source platform allows developers to create any type of software on blockchain without limits.
Revolutionary blockchain technologies such as smart contracts and decentralized autonomous organizations seem to be poised to disrupt the banking industry in a major way.
How banks benefit
It is likely to be difficult for retail banks to ignore technology that is undeniably more secure and reliable than their current databases.
Firstly, its pseudonymous nature could help end identity fraud. Secondly, the decentralized nature of blockchain could help introduce faster payments than two centralized systems could ever manage.
While some blockchains (most notably bitcoin's) are notoriously slow, others that are lightning fast. Ripple, the second most-valuable cryptocurrency by market capitalization, can handle 1,500 transactions per second.
The use of smart contracts could improve the efficiency of banking transactions further still. Banks rely on contracts for all of their products, from credit cards to mortgages to checking and savings accounts.
Smart contracts can be applied to all of the processes detailed in these documents and, it is believed, massively reduce processing costs for banks. Indeed, smart contracts are expected to replace to replace the clunky and inefficient Know Your Customer identity management process soon rather than later.
Wasting no time
Several start-ups have received venture capital to develop the projects discussed above, but the majority of them are still just ideas at this stage.
However, several major banks have already moved to invest in and develop blockchain technology. A group of financial institutions led by Swiss bank UBS has agreed to use Ethereum to improve the quality of their reference data. Instead of entrusting it to a third party to review, they are happy to rely solely on blockchain.
Meanwhile, Santander will use Ripple to power its new mobile app and it has been widely predicted that central banks will hold bitcoin and Ether cryptocurrencies in their reserves for the first time this year.
The long view
Perhaps unsurprisingly, many central governments are doing their best to limit the growth of cryptocurrency on their shores.
This might be enough to halt the growth of bitcoin as the world's first truly global currency. It must overcome other hurdles as well, not least slow transaction times and wild fluctuations in value.
Whatever happens with bitcoin, though, it's difficult to dispute the advantages that blockchain is likely to bring to retail banking.
Aziz Bin Zainuddin is a blockchain expert and the founder and chief crypto officer of Master The Crypto (MasterTheCrypto.com), a knowledge hub and resource center for cryptocurrency investing and all things blockchain. In addition, Aziz runs C.M. Fund, a Singapore-based crypto hedge fund based that invests in cryptos with solid fundamentals and game-changing technology.
Credit: https://www.atmmarketplace.com/articles/could-bitcoin-and-blockchain-blow-up-banking-as-we-know-it/?utm_source=AMC&utm_medium=email&utm_campaign=EMNA&utm_content=2018-03-08%3Fstyle%3Dprint
An elaborate system involving non-disclosure agreements has developed to silence women who level accusations against powerful men. One of those women is Stephanie Clifford, a pornographic actress who claims to have had an affair with Donald J. Trump.
On the NYT podcast (see URL below)
• Jim Rutenberg, The New York Times’s media columnist.
Background reading:
• President Trump’s lawyer secretly obtained a temporary restraining order to prevent a pornographic film actress from speaking out about her alleged affair with Mr. Trump.
• Beyond facilitating a $130,000 payment intended to silence Ms. Clifford, the lawyer, Michael D. Cohen, spent years making aggressive behind-the-scenes efforts to protect Mr. Trump.
Find the podcast here:
www.nytimes.com/2018/03/09/podcasts/the-daily/stormy-daniels-trump.html?rref=collection%2Fbyline%2Fjim-rutenberg&action=click&contentCollection=undefined®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
On the NYT podcast (see URL below)
• Jim Rutenberg, The New York Times’s media columnist.
Background reading:
• President Trump’s lawyer secretly obtained a temporary restraining order to prevent a pornographic film actress from speaking out about her alleged affair with Mr. Trump.
• Beyond facilitating a $130,000 payment intended to silence Ms. Clifford, the lawyer, Michael D. Cohen, spent years making aggressive behind-the-scenes efforts to protect Mr. Trump.
Find the podcast here:
www.nytimes.com/2018/03/09/podcasts/the-daily/stormy-daniels-trump.html?rref=collection%2Fbyline%2Fjim-rutenberg&action=click&contentCollection=undefined®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
From Public Citizen:
The problem of judges substituting their own opinions for facts
by Stephen Gardner
On February 27, the Northern District of California issued an opinion on a motion to dismiss in Becerra v. The Coca-Cola Company. The court got the law right, but then ruled based on incorrect conclusions on disputed facts.
There are two parts to the opinion. First, the court analyzed Coke’s various attempts to avoid liability under state law, based on preemption and safe harbor, and rejected each attempt. So far, so good.
But then the court turned to Rule 9(b). Here, too, the court was generally correct on the law, but ruled based on its own beliefs of what a reasonable consumer would think.
For example, the court said that “a reasonable consumer would simply not look at the brand name Diet Coke and assume that consuming it, absent any lifestyle change, would lead to weight loss.”
The court is wrong. Diet Coke’s name itself indeed suggests (really, outright says) that it’s part of a diet, and many consumers do not know that reduced calories alone will not likely lead to weight loss. Consumers are not nutrition scientists, and often turn (wrongly, but encouraged by companies like Coke) to quick fixes. The FTC’s many weight loss cases are evidence of this.
The court is expert on law, but not on consumer behavior, and it erred in substituting its opinion of the facts—at the motion to dismiss stage—for a disputed merits question.
The court compounded its error with the unsupported statement that “Reasonable consumers would understand that Diet Coke merely deletes the calories usually present in regular Coke, and that the caloric reduction will lead to weight loss only as part of an overall sensible diet and exercise regimen dependent on individual metabolism.”
Again, the court wrongfully draws its own conclusions as to how consumers reasonably behave. The court is also wrong on the facts—Diet Coke did not “merely delete[] the calories usually present in regular Coke.” It also added aspartame, which is an artificial non-nutritive sweetener.
Consumers are chary of artificial sweeteners, with good reason. The Center for Science in the Public Interest says, “Three key studies funded by an independent lab (rather than by a maker of aspartame) found that the sweetener caused lymphomas, leukemias, kidney, and other cancers in rats and mice. That should be reason enough for the Food and Drug Administration to ban aspartame from the food supply, says CSPI. In addition, aspartame might cause headaches or other neurological symptoms in a small number of people.” (For a longer discussion of risks, see this article from CSPI's excellent magazine Nutrition Action Healthletter.)
The court concluded, “In order to overcome the otherwise sensible view of reasonable consumers that Diet Coke consumption alone will not lead to weight loss, the complaint would need to cite far more powerful evidence than is now provided to make a claim of fraud plausible.”
The court gave plaintiff the chance to file an amended complaint, saying that “Plaintiff must plead her best case.”
Let’s hope she does.
Posted by Steve Gardner on Monday, March 05, 2018 at 04:45 PM Illustration of the problem of judges substituting their own opinions of factsby Stephen Gardner
http://pubcit.typepad.com/clpblog/2018/03/illustration-of-the-problem-of-judges-substituting-their-own-opinions-of-facts.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
From DMN: Washington has now become the first state in the nation to pass a law protecting net neutrality. Other states, including California and Oregon, are expected to follow suit.
In a bold statement against the Trump-led FCC, the State of Washington has officially passed a law protecting net neutrality. The bill, HB2282, received a lopsided 95-3 vote in the House earlier this month. Late today (Tuesday, Feb. 27th), the bill received a 35-14 vote in the state’s Senate.
Rep. Drew Hanson (D-Bainbridge Island), the bill’s prime sponsor, shared the development. “Today’s vote guarantees the net neutrality rules
that have protected a free and open internet will continue to remain in place in Washington state,” Hanson emailed. “Net neutrality is important to everyone – our constituents, small business owners, teachers, entrepreneurs, everyone. This is a cause with overwhelming bipartisan support; it’s always nice to see something where Democrats and Republicans can work together to maintain common-sense consumer protections.”
Hanson stressed that the bill was a bipartisan effort. Indeed, Republican Rep. Norma Smith (R-Clinton) was the bill’s co-sponsor.
Specifically, the bill makes it illegal for any ISP to:
Any ISP found violating any of those core tenets will face serious fines and penalties. Continued violations may result in a revocation of an ISP’s license to conduct business in the state.
Of course, those three tenets are expressly permitted by the FCC’s recent repeal of net neutrality. All of which sets the stage for a serious battle between Washington State and the FCC. In its rollback, the FCC attempted to make state laws protecting net neutrality null and void, though any ISP testing that power is likely to lose its business in Washington.
(Here’s the FCC’s Official 284-Page Order Repealing Net Neutrality — It’s Titled ‘Restoring Internet Freedom’)
Importantly, the Washington State law closely follows the FCC’s official submission of its net neutrality repeal into the Federal Register. That triggers a 60-day approval window before the rollback becomes federal law.
Meanwhile, Washington’s strong statement is likely to be followed by other powerful U.S. states. That includes California, whose House has already passed a net neutrality bill with passage likely from the Senate. In Oregon, a similar bill has also passed the lower House. Elsewhere, Nebraska recently introduced a bill, potentially making it the first red state to push back.
The developments in Washington are being cheered by the state’s considerable tech industry. “Today, Washington took a stand for internet freedoms and preserving an equal playing field for consumers and entrepreneurs,” remarked Sarah Bird, CEO of Seattle-based search engine optimization company MOZ. “Our internet economy is the envy of the world; Washington lawmakers are helping make sure that remains true.”
Governor Jay Inslee is expected to officially sign HB2282 this week.
A copy of the bill can be found here.
The DMN article is here: https://www.digitalmusicnews.com/2018/02/27/washington-state-law-net-neutrality/
In a bold statement against the Trump-led FCC, the State of Washington has officially passed a law protecting net neutrality. The bill, HB2282, received a lopsided 95-3 vote in the House earlier this month. Late today (Tuesday, Feb. 27th), the bill received a 35-14 vote in the state’s Senate.
Rep. Drew Hanson (D-Bainbridge Island), the bill’s prime sponsor, shared the development. “Today’s vote guarantees the net neutrality rules
that have protected a free and open internet will continue to remain in place in Washington state,” Hanson emailed. “Net neutrality is important to everyone – our constituents, small business owners, teachers, entrepreneurs, everyone. This is a cause with overwhelming bipartisan support; it’s always nice to see something where Democrats and Republicans can work together to maintain common-sense consumer protections.”
Hanson stressed that the bill was a bipartisan effort. Indeed, Republican Rep. Norma Smith (R-Clinton) was the bill’s co-sponsor.
Specifically, the bill makes it illegal for any ISP to:
- Block customers’ access to lawful content
- ‘Throttle’ or slowing down lawful content
- Favor certain content over others due to ‘paid prioritization’
Any ISP found violating any of those core tenets will face serious fines and penalties. Continued violations may result in a revocation of an ISP’s license to conduct business in the state.
Of course, those three tenets are expressly permitted by the FCC’s recent repeal of net neutrality. All of which sets the stage for a serious battle between Washington State and the FCC. In its rollback, the FCC attempted to make state laws protecting net neutrality null and void, though any ISP testing that power is likely to lose its business in Washington.
(Here’s the FCC’s Official 284-Page Order Repealing Net Neutrality — It’s Titled ‘Restoring Internet Freedom’)
Importantly, the Washington State law closely follows the FCC’s official submission of its net neutrality repeal into the Federal Register. That triggers a 60-day approval window before the rollback becomes federal law.
Meanwhile, Washington’s strong statement is likely to be followed by other powerful U.S. states. That includes California, whose House has already passed a net neutrality bill with passage likely from the Senate. In Oregon, a similar bill has also passed the lower House. Elsewhere, Nebraska recently introduced a bill, potentially making it the first red state to push back.
The developments in Washington are being cheered by the state’s considerable tech industry. “Today, Washington took a stand for internet freedoms and preserving an equal playing field for consumers and entrepreneurs,” remarked Sarah Bird, CEO of Seattle-based search engine optimization company MOZ. “Our internet economy is the envy of the world; Washington lawmakers are helping make sure that remains true.”
Governor Jay Inslee is expected to officially sign HB2282 this week.
A copy of the bill can be found here.
The DMN article is here: https://www.digitalmusicnews.com/2018/02/27/washington-state-law-net-neutrality/
5G Cell Service Is Coming. Who Decides Where It Goes?
There is a heated fight about when, where and how the next generation of cell service gets delivered. ... The prospect of their installation has many communities and their officials, from Woodbury, N.Y., to Olympia, Wash., insisting that local governments control the placement and look of the new equipment, not the federal government.
https://www.nytimes.com/2018/03/02/technology/5g-cellular-service.html (click title for link)
There is a heated fight about when, where and how the next generation of cell service gets delivered. ... The prospect of their installation has many communities and their officials, from Woodbury, N.Y., to Olympia, Wash., insisting that local governments control the placement and look of the new equipment, not the federal government.
https://www.nytimes.com/2018/03/02/technology/5g-cellular-service.html (click title for link)
D.C. Administration seeks to limit litigation opposing real estate development
From the Washington Post:
Activists seeking to thwart the breakneck speed of development across the District have turned with greater frequency to the city’s highest court, filing legal challenges that have delayed more than two dozen projects in the past two years and driven up their costs.
Now the Bowser administration wants to curtail those challenges, proposing to amend District policies in ways to reduce those avenues for protest.
District officials say that the changes would end nuisance legal challenges, reduce the cost of doing business in Washington, and expedite the construction of housing units that the city needs.
“We have thousands of new homes that are hung up in court, including hundreds of affordable homes,” said Cheryl Cort, policy director for the Coalition For Smarter Growth. “The courts seem much more willing to second-guess the process, and it has thrown everything into uncertainty.”
But activists counter that the city is making it more difficult to stave off gentrification. They say their ability to turn to the D.C. Court of Appeals is necessary to prevent District officials from violating their own policies to accommodate luxury projects that drive up housing prices in exchange for minimal benefits for neighborhoods.
“It’s the most basic part of our checks and review,” said Kirby Vining, an activist who successfully appealed the city’s approval of a project in his neighborhood. “Without it, we would have been stuck.” He called the administration’s proposals a “Christmas present for developers.”
The full article:
https://www.washingtonpost.com/local/dc-politics/dc-mayor-seeking-to-stop-costly-legal-delays-to-development-projects/2018/02/28/29855a06-1b14-11e8-b2d9-08e748f892c0_story.html?utm_term=.31ced0d73465
From the Washington Post:
Activists seeking to thwart the breakneck speed of development across the District have turned with greater frequency to the city’s highest court, filing legal challenges that have delayed more than two dozen projects in the past two years and driven up their costs.
Now the Bowser administration wants to curtail those challenges, proposing to amend District policies in ways to reduce those avenues for protest.
District officials say that the changes would end nuisance legal challenges, reduce the cost of doing business in Washington, and expedite the construction of housing units that the city needs.
“We have thousands of new homes that are hung up in court, including hundreds of affordable homes,” said Cheryl Cort, policy director for the Coalition For Smarter Growth. “The courts seem much more willing to second-guess the process, and it has thrown everything into uncertainty.”
But activists counter that the city is making it more difficult to stave off gentrification. They say their ability to turn to the D.C. Court of Appeals is necessary to prevent District officials from violating their own policies to accommodate luxury projects that drive up housing prices in exchange for minimal benefits for neighborhoods.
“It’s the most basic part of our checks and review,” said Kirby Vining, an activist who successfully appealed the city’s approval of a project in his neighborhood. “Without it, we would have been stuck.” He called the administration’s proposals a “Christmas present for developers.”
The full article:
https://www.washingtonpost.com/local/dc-politics/dc-mayor-seeking-to-stop-costly-legal-delays-to-development-projects/2018/02/28/29855a06-1b14-11e8-b2d9-08e748f892c0_story.html?utm_term=.31ced0d73465
Can CVS-Aetna merger squeeze hospitals by forcing customers to accept cheaper non-hospital care alternatives?
That is the premise of a Moody's study reported in a Modern Healthcare article titled: Hospitals pressured as insurers pursue more vertical integration
An article excerpt follows:
The artBy Alex Kacik | February 24, 2018
Hospitals that don't adapt could get squeezed out of the care continuum as insurers grow and direct more care to lower-cost settings, according to an analysis from Moody's Investors Service.
Both not-for-profit and for-profit hospitals are feeling the pressure of falling inpatient volumes and reimbursement levels from government payers along with rising drug costs and labor expenses, as well as regulatory changes to policies like the 340B drug discount program.
Those downward pressures on margins will continue if insurers' plans to vertically integrate with providers come to fruition, the ratings agency said. The Medicare Payment Advisory Commission estimated that hospital margins could sink to negative 10% in 2017, a drop from negative 7.1% in 2015.
Insurers have had to get creative since regulators blocked recent attempts to grow horizontally, including the thwarted mergers between Aetna and Humana, and Anthem and Cigna Corp. They now look to align with providers through proposed combinations between CVS Health and Aetna, UnitedHealth Group's Optum and DaVita Medical Group, and Humana and Kindred Healthcare—partnerships designed to prevent hospital visits through regular primary-care checkups and home healthcare.
Since they don't have to carry the hefty overhead of full-service hospitals, insurers that combine with physician groups and non-acute-care service providers can offer similar preventive, outpatient and post-acute care to their members at lower costs. Scale will also give them an upper hand in rate negotiations, denting providers' bottom lines.
The proposed deals could give insurers the power to direct care rather than doctors, said Juan Morado Jr., of counsel at law firm Benesch. But limiting patient choice is a risky proposition, he added.
As insurers grow their physician networks, they will be better able to carve out "high-cost" hospitals or certain services from contracts, which will mean lower volume and revenue for hospitals, Moody's said. Optum, which has been on a physician-acquisition binge, could funnel more care to cheaper, risk-bearing hospitals. Also, Anthem's policy to limit coverage of emergency visits in certain states will mean fewer patient visits, lower revenue and higher bad-debt rates for hospitals, the report said.
Full article: http://www.modernhealthcare.com/article/20180224/NEWS/180229944?utm_source=modernhealthcare&utm_medium=email&utm_content=20180224-NEWS-180229944&utm_campaign=am
_____________________________________________________
A related topic:
As Surgery Centers Boom, Patients Are Paying With Their LivesSIMPLE SURGERIES. TRAGIC RESULTSBy Christina Jewett, Kaiser Health News and Mark Alesia, USA TODAY Network
MARCH 2, 2018
This story also ran on USA Today. This story is at https://khn.org/news/medicare-certified-surgery-centers-are-expanding-but-deaths-question-safety/view/republish/
Excerpt:
The surgery went fine. Her doctors left for the day. Four hours later, Paulina Tam started gasping for air.
Internal bleeding was cutting off her windpipe, a well-known complication of the spine surgery she had undergone.
But a Medicare inspection report describing the event says that nobody who remained on duty that evening at the Northern California surgery center knew what to do.
How a push to cut costs and boost profits at surgery centers led to a trail of death.
A team of journalists based in California, Indiana, New Jersey, Florida, Washington, D.C., and Virginia worked to tell this story in a partnership between Kaiser Health News and USA TODAY Network.
Christina Jewett is a senior correspondent for Kaiser Health News. Mark Alesia is an investigative reporter for the Indianapolis Star.
Reporters pored through thousands of pages of court records and crisscrossed the U.S. to talk to injured patients or families of the deceased.
For more than a year, using federal and state open-records laws, reporters gathered more than 12,000 inspection records and 1,500 complaint reports, as well as autopsies and EMS documents and medical records, together forming the foundation for this report.
In desperation, a nurse did something that would not happen in a hospital.
She dialed 911.
By the time an ambulance delivered Tam to the emergency room, the 58-year-old mother of three was lifeless, according to the report.
If Tam had been operated on at a hospital, a few simple steps could have saved her life.
But like hundreds of thousands of other patients each year, Tam went to one of the nation’s 5,600-plus surgery centers.
Such centers started nearly 50 years ago as low-cost alternatives for minor surgeries. They now outnumber hospitals as federal regulators have signed off on an ever-widening array of outpatient procedures in an effort to cut federal health care costs.
Thousands of times each year, these centers call 911 as patients experience complications ranging from minor to fatal. Yet no one knows how many people die as a result, because no national authority tracks the tragic outcomes. An investigation by Kaiser Health News and the USA TODAY Network has discovered that more than 260 patients have died since 2013 after in-and-out procedures at surgery centers across the country. Dozens — some as young as 2 — have perished after routine operations, such as colonoscopies and tonsillectomies.
Reporters examined autopsy records, legal filings and more than 12,000 state and Medicare inspection records, and interviewed dozens of doctors, health policy experts and patients throughout the industry, in the most extensive examination of these records to date.
The investigation revealed:
Most operations done in surgery centers go off without a hitch. And surgery carries risk, no matter where it’s done. Some centers have state-of-the-art equipment and highly trained staff that are better prepared to handle emergencies.
But Kaiser Health News and the USA TODAY Network found more than a dozen cases where the absence of trained staff or emergency equipment appears to have put patients in peril.
That is the premise of a Moody's study reported in a Modern Healthcare article titled: Hospitals pressured as insurers pursue more vertical integration
An article excerpt follows:
The artBy Alex Kacik | February 24, 2018
Hospitals that don't adapt could get squeezed out of the care continuum as insurers grow and direct more care to lower-cost settings, according to an analysis from Moody's Investors Service.
Both not-for-profit and for-profit hospitals are feeling the pressure of falling inpatient volumes and reimbursement levels from government payers along with rising drug costs and labor expenses, as well as regulatory changes to policies like the 340B drug discount program.
Those downward pressures on margins will continue if insurers' plans to vertically integrate with providers come to fruition, the ratings agency said. The Medicare Payment Advisory Commission estimated that hospital margins could sink to negative 10% in 2017, a drop from negative 7.1% in 2015.
Insurers have had to get creative since regulators blocked recent attempts to grow horizontally, including the thwarted mergers between Aetna and Humana, and Anthem and Cigna Corp. They now look to align with providers through proposed combinations between CVS Health and Aetna, UnitedHealth Group's Optum and DaVita Medical Group, and Humana and Kindred Healthcare—partnerships designed to prevent hospital visits through regular primary-care checkups and home healthcare.
Since they don't have to carry the hefty overhead of full-service hospitals, insurers that combine with physician groups and non-acute-care service providers can offer similar preventive, outpatient and post-acute care to their members at lower costs. Scale will also give them an upper hand in rate negotiations, denting providers' bottom lines.
The proposed deals could give insurers the power to direct care rather than doctors, said Juan Morado Jr., of counsel at law firm Benesch. But limiting patient choice is a risky proposition, he added.
As insurers grow their physician networks, they will be better able to carve out "high-cost" hospitals or certain services from contracts, which will mean lower volume and revenue for hospitals, Moody's said. Optum, which has been on a physician-acquisition binge, could funnel more care to cheaper, risk-bearing hospitals. Also, Anthem's policy to limit coverage of emergency visits in certain states will mean fewer patient visits, lower revenue and higher bad-debt rates for hospitals, the report said.
Full article: http://www.modernhealthcare.com/article/20180224/NEWS/180229944?utm_source=modernhealthcare&utm_medium=email&utm_content=20180224-NEWS-180229944&utm_campaign=am
_____________________________________________________
A related topic:
As Surgery Centers Boom, Patients Are Paying With Their LivesSIMPLE SURGERIES. TRAGIC RESULTSBy Christina Jewett, Kaiser Health News and Mark Alesia, USA TODAY Network
MARCH 2, 2018
This story also ran on USA Today. This story is at https://khn.org/news/medicare-certified-surgery-centers-are-expanding-but-deaths-question-safety/view/republish/
Excerpt:
The surgery went fine. Her doctors left for the day. Four hours later, Paulina Tam started gasping for air.
Internal bleeding was cutting off her windpipe, a well-known complication of the spine surgery she had undergone.
But a Medicare inspection report describing the event says that nobody who remained on duty that evening at the Northern California surgery center knew what to do.
How a push to cut costs and boost profits at surgery centers led to a trail of death.
A team of journalists based in California, Indiana, New Jersey, Florida, Washington, D.C., and Virginia worked to tell this story in a partnership between Kaiser Health News and USA TODAY Network.
Christina Jewett is a senior correspondent for Kaiser Health News. Mark Alesia is an investigative reporter for the Indianapolis Star.
Reporters pored through thousands of pages of court records and crisscrossed the U.S. to talk to injured patients or families of the deceased.
For more than a year, using federal and state open-records laws, reporters gathered more than 12,000 inspection records and 1,500 complaint reports, as well as autopsies and EMS documents and medical records, together forming the foundation for this report.
In desperation, a nurse did something that would not happen in a hospital.
She dialed 911.
By the time an ambulance delivered Tam to the emergency room, the 58-year-old mother of three was lifeless, according to the report.
If Tam had been operated on at a hospital, a few simple steps could have saved her life.
But like hundreds of thousands of other patients each year, Tam went to one of the nation’s 5,600-plus surgery centers.
Such centers started nearly 50 years ago as low-cost alternatives for minor surgeries. They now outnumber hospitals as federal regulators have signed off on an ever-widening array of outpatient procedures in an effort to cut federal health care costs.
Thousands of times each year, these centers call 911 as patients experience complications ranging from minor to fatal. Yet no one knows how many people die as a result, because no national authority tracks the tragic outcomes. An investigation by Kaiser Health News and the USA TODAY Network has discovered that more than 260 patients have died since 2013 after in-and-out procedures at surgery centers across the country. Dozens — some as young as 2 — have perished after routine operations, such as colonoscopies and tonsillectomies.
Reporters examined autopsy records, legal filings and more than 12,000 state and Medicare inspection records, and interviewed dozens of doctors, health policy experts and patients throughout the industry, in the most extensive examination of these records to date.
The investigation revealed:
- Surgery centers have steadily expanded their business by taking on increasingly risky surgeries. At least 14 patients have died after complex spinal surgeries like those that federal regulators at Medicare recently approved for surgery centers. Even as the risks of doing such surgeries off a hospital campus can be great, so is the reward. Doctors who own a share of the center can earn their own fee and a cut of the facility’s fee, a meaningful sum for operations that can cost $100,000 or more.
- To protect patients, Medicare requires surgery centers to line up a local hospital to take their patients when emergencies arise. In rural areas, centers can be 15 or more miles away. Even when the hospital is close, 20 to 30 minutes can pass between a 911 call and arrival at an ER.
- Some surgery centers are accused of overlooking high-risk health problems and treat patients who experts say should be operated on only in hospitals, if at all. At least 25 people with underlying medical conditions have left surgery centers and died within minutes or days. They include an Ohio woman with out-of-control blood pressure, a 49-year-old West Virginia man awaiting a heart transplant and several children with sleep apnea.
- Some surgery centers risk patient lives by skimping on training or lifesaving equipment. Others have sent patients home before they were fully recovered. On their drives home, shocked family members in Arkansas, Oklahoma and Georgia discovered their loved ones were not asleep but on the verge of death. Surgery centers have been criticized in cases where staff didn’t have the tools to open a difficult airway or skills to save a patient from bleeding to death.
Most operations done in surgery centers go off without a hitch. And surgery carries risk, no matter where it’s done. Some centers have state-of-the-art equipment and highly trained staff that are better prepared to handle emergencies.
But Kaiser Health News and the USA TODAY Network found more than a dozen cases where the absence of trained staff or emergency equipment appears to have put patients in peril.
Data breach class action with small individual recoveries, many attorneys, and big fees = irritated judge
By Daniel R. Stoller - Bloomberg Law
February 6, 2018
• Federal judge orders more oversight of $37.95 million attorneys’ fees request
• Case grew out of 2015 Anthem breach that exposed 78.8 million consumers’ data
Anthem Inc. can’t dispose of consumer class claims stemming from a 2015 data breach for now, after a federal judge raised concerns about nearly $38 million in proposed attorneys’ fees.
A class counsel request for $37.95 million in attorneys’ fees, out of a $115 million settlement, is getting an extra layer of oversight, Judge Lucy Koh of the U.S. District Court for the Northern District of California wrote in a Feb. 2 order.
The court is concerned with the attorneys’ fee request because the class counsel assigned tasks “across 53 law firms and 331 billers,” wrote Koh, who granted a motion to appoint a special master to oversee the attorneys’ fees award.
Such billing could be “duplicative or inefficient,” Koh wrote. James Kleinberg, a retired California state judge, will likely be named special master to review the fee request because the parties didn’t object to his possible appointment, Koh said in her order. Although the settlement is beneficial to the class, Koh refused to give final approval before the special master’s decision on attorneys’ fees.
The case stems from a hacking attack in 2015 where cybercriminals were able to obtain data on 78.8 million Anthem customers, including Social Security numbers, birth dates, and health-care data. Anthem settled with consumers June 23 but didn’t acknowledge any wrongdoing.
After the settlement, plaintiffs filed a motion for the attorneys’ fees. But Jan. 4, class member objector Adam Shulman filed a motion to appoint a special master to oversee the fees award.
The special master will review “the extensive billing in the case” because the current attorneys’ fees and expenses request would account for 45 percent of the settlement class—higher than the 33 percent generally awarded, Koh wrote.
Hogan Lovells represents Anthem. Altshuler Berzon LLP and Cohen Milstein Sellers & Told Pllc are class counsel.
The case is In Re Anthem, Inc. Data Breach Litig., N.D. Cal., No. 15-md-02617, motion granted 2/2/18, link address http://www.bloomberglaw.com/public/document/In_re_Anthem_Inc_Data_Breach_Litigation_Docket_No_515md02617_ND_C/3?doc_id=X1Q6NUUSFT82
To contact the reporter on
By Daniel R. Stoller - Bloomberg Law
February 6, 2018
• Federal judge orders more oversight of $37.95 million attorneys’ fees request
• Case grew out of 2015 Anthem breach that exposed 78.8 million consumers’ data
Anthem Inc. can’t dispose of consumer class claims stemming from a 2015 data breach for now, after a federal judge raised concerns about nearly $38 million in proposed attorneys’ fees.
A class counsel request for $37.95 million in attorneys’ fees, out of a $115 million settlement, is getting an extra layer of oversight, Judge Lucy Koh of the U.S. District Court for the Northern District of California wrote in a Feb. 2 order.
The court is concerned with the attorneys’ fee request because the class counsel assigned tasks “across 53 law firms and 331 billers,” wrote Koh, who granted a motion to appoint a special master to oversee the attorneys’ fees award.
Such billing could be “duplicative or inefficient,” Koh wrote. James Kleinberg, a retired California state judge, will likely be named special master to review the fee request because the parties didn’t object to his possible appointment, Koh said in her order. Although the settlement is beneficial to the class, Koh refused to give final approval before the special master’s decision on attorneys’ fees.
The case stems from a hacking attack in 2015 where cybercriminals were able to obtain data on 78.8 million Anthem customers, including Social Security numbers, birth dates, and health-care data. Anthem settled with consumers June 23 but didn’t acknowledge any wrongdoing.
After the settlement, plaintiffs filed a motion for the attorneys’ fees. But Jan. 4, class member objector Adam Shulman filed a motion to appoint a special master to oversee the fees award.
The special master will review “the extensive billing in the case” because the current attorneys’ fees and expenses request would account for 45 percent of the settlement class—higher than the 33 percent generally awarded, Koh wrote.
Hogan Lovells represents Anthem. Altshuler Berzon LLP and Cohen Milstein Sellers & Told Pllc are class counsel.
The case is In Re Anthem, Inc. Data Breach Litig., N.D. Cal., No. 15-md-02617, motion granted 2/2/18, link address http://www.bloomberglaw.com/public/document/In_re_Anthem_Inc_Data_Breach_Litigation_Docket_No_515md02617_ND_C/3?doc_id=X1Q6NUUSFT82
To contact the reporter on
Private Equity Meets Antitrust….Complications Ensue
By CPI on February 27, 2018
Posted by Social Science Research Network
Private Equity Meets Antitrust….Complications Ensue
By Kent Bernard
Private Equity is simply a way in which an investment company is structured. What the term usually means, however, is an entity that seeks to make an investment, quickly make changes in the company, and then sell out. Antitrust gets involved to determine whether the acquisition of stock or assets leads to a lessening of competition in any market. As part of that process, potential acquirers must give notice to the antitrust agencies and observe a waiting period. The private equity business model seeks to minimize, or avoid, such waiting. The approaches taken by private equity investors, and the agencies’ responses, have created an interesting legal landscape.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3123183
By CPI on February 27, 2018
Posted by Social Science Research Network
Private Equity Meets Antitrust….Complications Ensue
By Kent Bernard
Private Equity is simply a way in which an investment company is structured. What the term usually means, however, is an entity that seeks to make an investment, quickly make changes in the company, and then sell out. Antitrust gets involved to determine whether the acquisition of stock or assets leads to a lessening of competition in any market. As part of that process, potential acquirers must give notice to the antitrust agencies and observe a waiting period. The private equity business model seeks to minimize, or avoid, such waiting. The approaches taken by private equity investors, and the agencies’ responses, have created an interesting legal landscape.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3123183
From the U.S. Office of Government Ethics: A Refresher on the Impartiality Rule
January 25, 2017
On January 1, 2017, new government ethics training regulations went into effect. These regulations now require agencies to train more employees than in the past. They also place a new emphasis on four core topics: conflicts of interest, impartiality, misuse of position, and gifts. Earlier “Director’s Notes” have discussedconflicts of interest, misuse of position, and gifts. To round out the set, this Director’s note focuses on the impartiality rule.
As explained in my most recentnote, executive branch employees are subject to an important set of ethics rules contained in the Standards of Ethical Conduct for Employees of the Executive Branch. Underlying these rules is a principle that employees must avoid even the appearance of impropriety. The impartiality rule breathes life into this principle.
Under the primary conflict of interest law, an employee must not participate in any particular matter affecting the employee’s financial interests, and the impartiality rule goes even further by focusing on appearance issues. This rule applies even when the employee is free of financial conflicts of interest.
Briefly stated, the impartiality rule requires an employee to consider appearance concerns before participating in a particular matter if someone close to the employee is involved as a party to that matter. This requirement to refrain from participating (or “recuse”) is designed to avoid the appearance of favoritism in government decision-making.
The rule is not implicated by everyone the employee knows, for example, mere friends and neighbors. Instead, the rule focuses on professional and family relationships. Among others, the rule arises based on the employee’s relationship with any member of the employee’s household, an outside employer, a spouse’s employer, any relative with whom the employee has a close personal relationship, or an outside organization in which the employee is an “active” member. The rule is also triggered by the employee’s relationship with individuals, clients, and organizations the employee has served professionally as an employee, attorney, contractor, etc., in the past year.
The duty to recuse comes up if one of these individuals and organizations is involved and if a reasonable person with knowledge of the relevant facts would be concerned about the employee’s impartiality. Because the rule is somewhat technical, employees should attend required ethics training to ensure that they understand how to make impartial decisions when performing their government jobs. Employees should also contact their agency ethics officials for assistance in applying the rule in specific cases.
See https://www.oge.gov/web/oge.nsf/Resources/A+Refresher+on+the+Impartiality+Rule
Editor's note: For a long-time federal employee, there is some poignancy in this reminder. A line attorney with a federal agency would risk serious jeopardy by participating in review of a bank merger involving a bank with which the employee had significant business dealings. For a long-time federal employee, it seems obvious that at least the same standard should apply to high level federal executives. Perhaps that will happen. DR
January 25, 2017
On January 1, 2017, new government ethics training regulations went into effect. These regulations now require agencies to train more employees than in the past. They also place a new emphasis on four core topics: conflicts of interest, impartiality, misuse of position, and gifts. Earlier “Director’s Notes” have discussed
As explained in my most recent
Under the primary conflict of interest law, an employee must not participate in any particular matter affecting the employee’s financial interests, and the impartiality rule goes even further by focusing on appearance issues. This rule applies even when the employee is free of financial conflicts of interest.
Briefly stated, the impartiality rule requires an employee to consider appearance concerns before participating in a particular matter if someone close to the employee is involved as a party to that matter. This requirement to refrain from participating (or “recuse”) is designed to avoid the appearance of favoritism in government decision-making.
The rule is not implicated by everyone the employee knows, for example, mere friends and neighbors. Instead, the rule focuses on professional and family relationships. Among others, the rule arises based on the employee’s relationship with any member of the employee’s household, an outside employer, a spouse’s employer, any relative with whom the employee has a close personal relationship, or an outside organization in which the employee is an “active” member. The rule is also triggered by the employee’s relationship with individuals, clients, and organizations the employee has served professionally as an employee, attorney, contractor, etc., in the past year.
The duty to recuse comes up if one of these individuals and organizations is involved and if a reasonable person with knowledge of the relevant facts would be concerned about the employee’s impartiality. Because the rule is somewhat technical, employees should attend required ethics training to ensure that they understand how to make impartial decisions when performing their government jobs. Employees should also contact their agency ethics officials for assistance in applying the rule in specific cases.
See https://www.oge.gov/web/oge.nsf/Resources/A+Refresher+on+the+Impartiality+Rule
Editor's note: For a long-time federal employee, there is some poignancy in this reminder. A line attorney with a federal agency would risk serious jeopardy by participating in review of a bank merger involving a bank with which the employee had significant business dealings. For a long-time federal employee, it seems obvious that at least the same standard should apply to high level federal executives. Perhaps that will happen. DR
Takata airbags settlement: After the array of legal proceedings and prodigious enforcement efforts that followed the bad behavior of auto makers and Takata: criminal proceedings, National Highway Traffic Safety Administration agreement, "darn good" class action settlements, and the State AG actions, were consumers well served?
Press reports, including one in the New York Times, indicate that State AGs that sued Takata over auto airbag defects have reached a settlement involved $650 million dollars and behavioral restraints.
Takata, which became the auto airbag supplier of choice for many car makers, has been the topic of a number of legal proceedings.
As part of a criminal plea agreement with the U.S. Justice Department, Takata agreed to pay $125 million to victims and $850 million in restitution to automakers who bought its inflaters and were stuck with recall and litigation costs.
Conduct restraints were included in an agreement by Takata with the National Highway Traffic Safety Administration.
In 2017 Japanese automaker Honda agreed to a $605 million class-action settlement covering economic losses suffered by the U.S. owners of vehicles fitted with Takata air bags. Particular Honda owners reportedly received a promise to be paid $500 each. The deal was similar to agreements between Takata air bag vehicle owners and Nissan, Toyota, BMW, Mazda and Subaru.
“It's a darn good settlement,” lead class counsel Peter Prieto of Podhurst Orseck PA said at the time about the class action deals reached with Toyota Motor Corp., BMW of North America LLC, Subaru of America Inc. and Mazda North American Operations, during the final fairness hearing in Miami. $166 million was to be reserved to pay the class attorneys, 22 percent of the total value.
Takata has been through a bankruptcy proceeding. Under a restructuring plan, Takata will sell most of its assets unrelated to airbags to a Chinese-owned rival for $1.6 billion.
The recent press release issued by the lead state AG, Alan Wilson of South Carolina, says, in part:
TK Holdings, Inc. has also agreed to reimburse the multistate for its investigative costs, and for the entry of stipulated civil penalty in the amount of 650 million dollars. Since the company has filed for bankruptcy protection and cannot pay its debts, the multistate agreed not to collect this civil penalty in order to maximize the recovery available to consumers who were the victims of this airbag defect.
http://www.scag.gov/archives/34760
At the end of this story is a question: After the array of legal proceedings and prodigious enforcement efforts that followed the bad behavior of auto makers and Takata: criminal proceedings, National Highway Traffic Safety Administration agreement, "darn good" class action settlements, and the State AG actions, were consumers well served?
Posted by Don Allen Resnikoff, who takes responsibility for the content.
Press reports, including one in the New York Times, indicate that State AGs that sued Takata over auto airbag defects have reached a settlement involved $650 million dollars and behavioral restraints.
Takata, which became the auto airbag supplier of choice for many car makers, has been the topic of a number of legal proceedings.
As part of a criminal plea agreement with the U.S. Justice Department, Takata agreed to pay $125 million to victims and $850 million in restitution to automakers who bought its inflaters and were stuck with recall and litigation costs.
Conduct restraints were included in an agreement by Takata with the National Highway Traffic Safety Administration.
In 2017 Japanese automaker Honda agreed to a $605 million class-action settlement covering economic losses suffered by the U.S. owners of vehicles fitted with Takata air bags. Particular Honda owners reportedly received a promise to be paid $500 each. The deal was similar to agreements between Takata air bag vehicle owners and Nissan, Toyota, BMW, Mazda and Subaru.
“It's a darn good settlement,” lead class counsel Peter Prieto of Podhurst Orseck PA said at the time about the class action deals reached with Toyota Motor Corp., BMW of North America LLC, Subaru of America Inc. and Mazda North American Operations, during the final fairness hearing in Miami. $166 million was to be reserved to pay the class attorneys, 22 percent of the total value.
Takata has been through a bankruptcy proceeding. Under a restructuring plan, Takata will sell most of its assets unrelated to airbags to a Chinese-owned rival for $1.6 billion.
The recent press release issued by the lead state AG, Alan Wilson of South Carolina, says, in part:
TK Holdings, Inc. has also agreed to reimburse the multistate for its investigative costs, and for the entry of stipulated civil penalty in the amount of 650 million dollars. Since the company has filed for bankruptcy protection and cannot pay its debts, the multistate agreed not to collect this civil penalty in order to maximize the recovery available to consumers who were the victims of this airbag defect.
http://www.scag.gov/archives/34760
At the end of this story is a question: After the array of legal proceedings and prodigious enforcement efforts that followed the bad behavior of auto makers and Takata: criminal proceedings, National Highway Traffic Safety Administration agreement, "darn good" class action settlements, and the State AG actions, were consumers well served?
Posted by Don Allen Resnikoff, who takes responsibility for the content.
See Judge Leon's opinion blocking AT&T's assertion of selective merger enforcement
From the opinion:
Defendants have fallen far short of establishing that this enforcement action was selective, that is, that there exist persons similarly situated who have not been prosecuted. . . . It is . . . difficult to even conceptualize how a selective enforcement claim applies in the antitrust context, where each merger must be functionally viewed in the context of its particular industry and in light of a variety of factors including the transaction's size, structure, and potential to generate efficiencies or enable evasion of rate regulation, are relevant in determining whether a transaction is likely to lessen competition.
See the full opinion here: https://www.nytimes.com/interactive/2018/02/20/technology/document-Court-Order-Re-TWX-T-Motion-Re-Political.html
From the opinion:
Defendants have fallen far short of establishing that this enforcement action was selective, that is, that there exist persons similarly situated who have not been prosecuted. . . . It is . . . difficult to even conceptualize how a selective enforcement claim applies in the antitrust context, where each merger must be functionally viewed in the context of its particular industry and in light of a variety of factors including the transaction's size, structure, and potential to generate efficiencies or enable evasion of rate regulation, are relevant in determining whether a transaction is likely to lessen competition.
See the full opinion here: https://www.nytimes.com/interactive/2018/02/20/technology/document-Court-Order-Re-TWX-T-Motion-Re-Political.html
Make rock music great again? Changing music tastes appear to be driving iconic Gibson Guitar toward bankruptcy
Only a few years ago Gibson and Fender were dominant as guitar manufacturers, and the FTC was concerned about price fixing in the musical instrument market place.
In 2010 Gibson was listed in 30 lawsuits and had been the subject of a Federal Trade Commission investigation involving Fender Musical Instruments Corp., the Guitar Center and the International Music Products Association, known as NAMM.
The FTC investigation spun off of a previous probe of NAMM, which the FTC accused of organizing meetings where various retailers worked out pricing strategies.
That investigation ended with NAMM admitting no wrongdoing, but being prohibited from working with retailers in any anti-competitive fashion.
At that time Gibson stated: "The allegation that Gibson participated in any scheme to artificially inflate or fix prices is wholly without merit."
But now Gibson may be going the way of the leather sole Hanover Shoe, and becoming obsolete as musical tastes turn away from guitar based music, and guitar sales decline.
For more details on the declining fortunes of Gibson, see
https://www.digitalmusicnews.com/2018/02/16/gibson-guitar-bankruptcy/
Only a few years ago Gibson and Fender were dominant as guitar manufacturers, and the FTC was concerned about price fixing in the musical instrument market place.
In 2010 Gibson was listed in 30 lawsuits and had been the subject of a Federal Trade Commission investigation involving Fender Musical Instruments Corp., the Guitar Center and the International Music Products Association, known as NAMM.
The FTC investigation spun off of a previous probe of NAMM, which the FTC accused of organizing meetings where various retailers worked out pricing strategies.
That investigation ended with NAMM admitting no wrongdoing, but being prohibited from working with retailers in any anti-competitive fashion.
At that time Gibson stated: "The allegation that Gibson participated in any scheme to artificially inflate or fix prices is wholly without merit."
But now Gibson may be going the way of the leather sole Hanover Shoe, and becoming obsolete as musical tastes turn away from guitar based music, and guitar sales decline.
For more details on the declining fortunes of Gibson, see
https://www.digitalmusicnews.com/2018/02/16/gibson-guitar-bankruptcy/
From Maryland Consumer Rights Coalition: de facto debtor prisons
Media contact: Marceline White, 410-624-8980
Maryland has created a system of de facto debtors prisons. Maryland's Constitution says that "no person shall be imprisoned for debt," but each month, the Maryland District Court issues about 130 arrest warrants for consumers who are being sued for debt.
The arrest warrant, or body attachment, is an order for law enforcement to arrest the person in question and bring him or her in front of a court or commissioner in order to address the debt for which they are being sued.
The average underlying debt in these cases is less than $4,400. However, the addition of attorneys’ fees (78% of the time), interest (56% of the time) and court costs add, on average one-fifth to the amount of the original debt. When arrested, defendants may be required to pay bail or a bond which ranges from $200 to $3,000. In one case, bail was set at $5,000 for a $2,800 debt. In another case, bail was set at $10,000. If a defendant cannot pay this bail, he or she can end up languishing in prison for days or weeks until she or he can arrange to pay the bail bond set in the case.
Today [2-21-2018], the House Judiciary and Senate Judicial Proceedings committees will hear HB 1081 and SB 1050, bills that would ensure low-income Marylanders are treated with respect and fairness within the debt collection process, while still allowing creditors to obtain the information they need to collect the debt.
Under this proposal, when Marylanders are picked up, they complete the required forms and are released. No one is jailed for debt. This reduces the burden on the sheriffs’ departments, jails, taxpayers, and judges and creates a more fundamentally fair process for indigent consumers.
Because many of the Marylanders who are being sued for debt never received court summons, which is a causal factor in body attachments, we are recommending amending HB 1081/ SB 1050 to strengthen the service requirements.
We need you to tell your Delegates and Senators: No Prison for Poverty. Click here, to check if your elected officials serve on the Judiciary or Judicial Proceedings committees, and shoot them a note telling them to support the bill and the amendment.
These de facto debtors prisons criminalize poverty and create a two-tiered system of justice: those who can afford to pay do not go to jail, while those who can’t afford to pay remain in jail. Jailing someone for an underlying debt serves no constructive purpose: the individual is not violent nor a danger to the community, will be harmed-possibly losing their job if they are incarcerated, thereby making it more difficult to repay a debt, has no need for rehabilitation nor for punishment.
Take three minutes today to make sure your representatives know you oppose debtor’s prisons, and support HB 1081 and SB 1050 with our amendments!
Best,
Marceline
Media contact: Marceline White, 410-624-8980
Maryland has created a system of de facto debtors prisons. Maryland's Constitution says that "no person shall be imprisoned for debt," but each month, the Maryland District Court issues about 130 arrest warrants for consumers who are being sued for debt.
The arrest warrant, or body attachment, is an order for law enforcement to arrest the person in question and bring him or her in front of a court or commissioner in order to address the debt for which they are being sued.
The average underlying debt in these cases is less than $4,400. However, the addition of attorneys’ fees (78% of the time), interest (56% of the time) and court costs add, on average one-fifth to the amount of the original debt. When arrested, defendants may be required to pay bail or a bond which ranges from $200 to $3,000. In one case, bail was set at $5,000 for a $2,800 debt. In another case, bail was set at $10,000. If a defendant cannot pay this bail, he or she can end up languishing in prison for days or weeks until she or he can arrange to pay the bail bond set in the case.
Today [2-21-2018], the House Judiciary and Senate Judicial Proceedings committees will hear HB 1081 and SB 1050, bills that would ensure low-income Marylanders are treated with respect and fairness within the debt collection process, while still allowing creditors to obtain the information they need to collect the debt.
Under this proposal, when Marylanders are picked up, they complete the required forms and are released. No one is jailed for debt. This reduces the burden on the sheriffs’ departments, jails, taxpayers, and judges and creates a more fundamentally fair process for indigent consumers.
Because many of the Marylanders who are being sued for debt never received court summons, which is a causal factor in body attachments, we are recommending amending HB 1081/ SB 1050 to strengthen the service requirements.
We need you to tell your Delegates and Senators: No Prison for Poverty. Click here, to check if your elected officials serve on the Judiciary or Judicial Proceedings committees, and shoot them a note telling them to support the bill and the amendment.
These de facto debtors prisons criminalize poverty and create a two-tiered system of justice: those who can afford to pay do not go to jail, while those who can’t afford to pay remain in jail. Jailing someone for an underlying debt serves no constructive purpose: the individual is not violent nor a danger to the community, will be harmed-possibly losing their job if they are incarcerated, thereby making it more difficult to repay a debt, has no need for rehabilitation nor for punishment.
Take three minutes today to make sure your representatives know you oppose debtor’s prisons, and support HB 1081 and SB 1050 with our amendments!
Best,
Marceline
PBS News hour on modern real estate loan redlining in Philadelphia and elsewhere
From PBS: Ten years since the economic recession, lending has returned for many Americans. Yet the gap between white and black homeownership is wider now than it was in 1960, with signs of modern-day redlining showing up across the country. Special correspondent Aaron Glantz reports as part of a year-long investigation by Reveal from The Center for Investigative Reporting.
Excerpt from the News hour report:
Go to: https://www.pbs.org/newshour/show/struggle-for-black-and-latino-mortgage-applicants-suggests-modern-day-redlining
From PBS: Ten years since the economic recession, lending has returned for many Americans. Yet the gap between white and black homeownership is wider now than it was in 1960, with signs of modern-day redlining showing up across the country. Special correspondent Aaron Glantz reports as part of a year-long investigation by Reveal from The Center for Investigative Reporting.
Excerpt from the News hour report:
- Emmanuel Martinez:
We looked at nearly 31 million mortgage records, nearly every loan application filed with the government in 2015 and 2016. In 61 metros across the country, applicants of color are more likely to be denied a conventional mortgage. - Aaron Glantz:
Banks don’t share credit scores. They say that is proprietary. But by using other information the government requires be disclosed, Reveal found statistically significant differences by race. - Emmanuel Martinez:
My analysis includes nine different factors. Among them are the applicant’s income, the size of the loan, and specific information about the neighborhood that they are looking to buy in.
Here, we have the likelihood of denial. So, black applicants in Philadelphia are almost three times as likely to be denied a conventional mortgage. - Aaron Glantz:
Reveal found this pattern in dozens of cities. Philadelphia was one of the largest. That means that a black applicant and a white one with similar financial profiles will likely have very different outcomes.
This wasn’t true for just for one bank, but for the lending industry as a whole. The Mortgage Bankers Association wouldn’t go on camera for this story, but in a statement, it said that the data available under the Home Mortgage Disclosure Act is not sufficient to make a determination regarding fair lending.
And the American Bankers Association said that without access to borrowers’ credit history, the data cannot paint a complete picture. - Emmanuel Martinez:
Unfortunately, credit score and an applicant’s total debt-to-income ratio aren’t part of this publicly available data set, but it’s those same financial institutions that have lobbied from keeping it away from researchers, from academics, from journalists like me, who want to study those disparities.
Go to: https://www.pbs.org/newshour/show/struggle-for-black-and-latino-mortgage-applicants-suggests-modern-day-redlining
Warren Buffett's real investment strategy: own companies with great power to charge high prices
From article in the Nation:
“The single most important decision in evaluating a business is pricing power,” Buffett said. “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.” The “big three” rating agencies—Moody’s, Standard & Poor’s, and Fitch--controlled 95 percent of the rating-agency market, an insurmountable advantage over would-be competitors. “If you’ve got a good enough business, if you have a monopoly newspaper or if you have a network television station,” Buffett concluded, “your idiot nephew could run it.”
For the article, and a podcast by the author: https://www.thenation.com/article/special-investigation-the-dirty-secret-behind-warren-buffetts-billions/
Warren Buffett's real investment strategy: own companies with great power to charge high prices
From article in the Nation:
“The single most important decision in evaluating a business is pricing power,” Buffett said. “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.” The “big three” rating agencies—Moody’s, Standard & Poor’s, and Fitch--controlled 95 percent of the rating-agency market, an insurmountable advantage over would-be competitors. “If you’ve got a good enough business, if you have a monopoly newspaper or if you have a network television station,” Buffett concluded, “your idiot nephew could run it.”
For the article, and a podcast by the author: https://www.thenation.com/article/special-investigation-the-dirty-secret-behind-warren-buffetts-billions/
Student Outcry on Guns; the Emma Gonzalez video
Students used Twitter, the news media and a courthouse rally to pressure lawmakers for gun control after a deadly shooting at a Florida high school.
Feb. 18, 2018FORT LAUDERDALE, Fla. — They shouted into a microphone until their voices became hoarse. They waved handmade signs. They chanted.
At the federal courthouse here on Saturday, students — including many of the very people who had to endure the trauma of a shooting on campus — continued to speak out about guns. Since Wednesday, when a gunman killed 14 students and three staff members at Marjory Stoneman Douglas High School in Parkland, Fla., their youthful voices have resonated where those of longtime politicians have largely fallen flat.
And on Saturday, another young woman’s words captivated the nation.
Speaking publicly at the rally, Emma González, a senior, pledged that her school would be the site of the nation’s last mass shooting. How could she know? Because, she said, she and her peers would take it upon themselves to “change the law.”
“The people in the government who are voted into power are lying to us,” she said. “And us kids seem to be the only ones who notice and are prepared to call B.S.”
“They say that tougher gun laws do not decrease gun violence — we call B.S.!” she continued as a chorus of supporters echoed her. “They say a good guy with a gun stops a bad guy with a gun — we call B.S.! They say guns are just tools like knives and are as dangerous as cars — we call B.S.! They say that no laws could have been able to prevent the hundreds of senseless tragedies that have occurred — we call B.S.! That us kids don’t know what we’re talking about, that we’re too young to understand how the government works — we call B.S.!”
She wiped her eyes aggressively. Then, she urged the people in the crowd to register to vote — and to give their elected officials “a piece of your mind.”
Just hours later, one video of the speech had been viewed more than 100,000 times.
The video is here: youtu.be/ZxD3o-9H1lY
NYT article: https://www.nytimes.com/2018/02/18/us/emma-gonzalez-florida-shooting.html?action=click&module=RelatedCoverage&pgtype=Article®ion=Footer&contentCollection=Related
Students used Twitter, the news media and a courthouse rally to pressure lawmakers for gun control after a deadly shooting at a Florida high school.
Feb. 18, 2018FORT LAUDERDALE, Fla. — They shouted into a microphone until their voices became hoarse. They waved handmade signs. They chanted.
At the federal courthouse here on Saturday, students — including many of the very people who had to endure the trauma of a shooting on campus — continued to speak out about guns. Since Wednesday, when a gunman killed 14 students and three staff members at Marjory Stoneman Douglas High School in Parkland, Fla., their youthful voices have resonated where those of longtime politicians have largely fallen flat.
And on Saturday, another young woman’s words captivated the nation.
Speaking publicly at the rally, Emma González, a senior, pledged that her school would be the site of the nation’s last mass shooting. How could she know? Because, she said, she and her peers would take it upon themselves to “change the law.”
“The people in the government who are voted into power are lying to us,” she said. “And us kids seem to be the only ones who notice and are prepared to call B.S.”
“They say that tougher gun laws do not decrease gun violence — we call B.S.!” she continued as a chorus of supporters echoed her. “They say a good guy with a gun stops a bad guy with a gun — we call B.S.! They say guns are just tools like knives and are as dangerous as cars — we call B.S.! They say that no laws could have been able to prevent the hundreds of senseless tragedies that have occurred — we call B.S.! That us kids don’t know what we’re talking about, that we’re too young to understand how the government works — we call B.S.!”
She wiped her eyes aggressively. Then, she urged the people in the crowd to register to vote — and to give their elected officials “a piece of your mind.”
Just hours later, one video of the speech had been viewed more than 100,000 times.
The video is here: youtu.be/ZxD3o-9H1lY
NYT article: https://www.nytimes.com/2018/02/18/us/emma-gonzalez-florida-shooting.html?action=click&module=RelatedCoverage&pgtype=Article®ion=Footer&contentCollection=Related
New York’s top regulator is planning to investigate insurance companies after a bombshell report showed that gay men were being denied life insurance coverage because they were taking HIV prevention medications
Dr. Philip J. Cheng, a Harvard-educated urologist, said he was denied a life insurance policy and was offered a five-year policy instead after telling his insurer that he used Truvada, a drug that prevents the transmission of HIV, according to the New York Times. [https://www.nytimes.com/2018/02/12/health/truvada-hiv-insurance.html]
The treatments, referred to as PrEP (short for pre-exposure prophylaxis), are nearly 100 percent effective, studies have shown — but that wasn’t good enough for some insurers.
Maria T. Vullo, superintendent of the state’s Department of Financial Services, said that the practice amounts to discrimination.
“Insurers cannot choose to deny life and disability insurance coverage based on discriminatory reasons,” she said.
“This is tantamount to penalizing applicants based on sexual orientation. DFS will not tolerate discriminatory treatment in the approval or denial of life, long-term care and disability insurance policies and will hold companies that discriminate accountable,” she added
Dr. Philip J. Cheng, a Harvard-educated urologist, said he was denied a life insurance policy and was offered a five-year policy instead after telling his insurer that he used Truvada, a drug that prevents the transmission of HIV, according to the New York Times. [https://www.nytimes.com/2018/02/12/health/truvada-hiv-insurance.html]
The treatments, referred to as PrEP (short for pre-exposure prophylaxis), are nearly 100 percent effective, studies have shown — but that wasn’t good enough for some insurers.
Maria T. Vullo, superintendent of the state’s Department of Financial Services, said that the practice amounts to discrimination.
“Insurers cannot choose to deny life and disability insurance coverage based on discriminatory reasons,” she said.
“This is tantamount to penalizing applicants based on sexual orientation. DFS will not tolerate discriminatory treatment in the approval or denial of life, long-term care and disability insurance policies and will hold companies that discriminate accountable,” she added
FTC press release:
FTC Sues Dental Products Distributors for Alleged Conspiracy Not to Provide Discounts to a Customer Segment
Complaint names nation’s three largest dental suppliers: Benco Dental Supply Company, Henry Schein, Inc. and Patterson Companies, Inc.
The Federal Trade Commission filed a complaint against the nation’s three largest dental supply companies, a public version of which will be linked to this news release shortly, alleging that they violated U.S. antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners. These buying groups sought lower prices for dental supplies and equipment on behalf of solo and small-group dental practices seeking to gain discounts by aggregating and leveraging the collective purchasing power and bargaining skills of the individual practices. The complaint also alleges an FTC Act Section 5 violation against Benco for inviting a fourth competing distributor to join the conspiracy.
The alleged agreement among Benco, Henry Schein and Patterson deprived independent dentists of the benefits of participating in buying groups that purchase dental supplies from national, full-service distributors. As full-service dental distributors, Benco, Henry Schein and Patterson offer gloves, cements, sterilization products and a range of other consumable supplies, as well as equipment, such as dental chairs and lights. Collectively, the big three control more than 85 percent of all distributor sales of dental products and services nationwide. The U.S. market for dental products is valued at approximately $10 billion. The dental practices that would have benefited from the discounts achieved by these buying groups were small businesses comprised of solo or small groups of dentists.
Benco and Henry Schein allegedly entered into an agreement refusing to provide discounts to or compete for the business of buying groups. The complaint details communications between executives of the two companies evidencing the agreement, as well as attempts to monitor and ensure compliance with the agreement. The complaint also asserts that Patterson joined the agreement. The complaint charges Benco, Henry Schein and Patterson of conspiring in violation of Section 5 of the FTC Act.
The complaint also alleges that on multiple occasions, Benco invited Burkhart Dental Supply – a regional distributor and the fourth largest full-service distributor in the United States – to refuse to provide discounts to buying groups. As a result of this conduct, the complaint separately charges Benco with a Section 5 invitation to collude count.
Based on the agreement among the distributors, the complaint contends that Benco, Henry Schein and Patterson unreasonably restrained price competition for dental products in the United States; distorted prices and undermined the ability of independent dentists to obtain lower prices and discounts for dental products; deprived independent dentists of the benefits of vigorous price and service competition among full-service, national dental distributors; unreasonably reduced output of dental products to dental buying groups; and eliminated or reduced the competitive bidding process for sales to these buying groups. This case reflects the Commission’s ongoing efforts to ensure competition in the healthcare industry.
The Commission vote to issue the administrative complaint was 2-0. The administrative trial is scheduled to begin on Oct. 16, 2018.
https://www.ftc.gov/news-events/press-releases/2018/02/ftc-sues-dental-products-distributors-alleged-conspiracy-not
FTC Sues Dental Products Distributors for Alleged Conspiracy Not to Provide Discounts to a Customer Segment
Complaint names nation’s three largest dental suppliers: Benco Dental Supply Company, Henry Schein, Inc. and Patterson Companies, Inc.
The Federal Trade Commission filed a complaint against the nation’s three largest dental supply companies, a public version of which will be linked to this news release shortly, alleging that they violated U.S. antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners. These buying groups sought lower prices for dental supplies and equipment on behalf of solo and small-group dental practices seeking to gain discounts by aggregating and leveraging the collective purchasing power and bargaining skills of the individual practices. The complaint also alleges an FTC Act Section 5 violation against Benco for inviting a fourth competing distributor to join the conspiracy.
The alleged agreement among Benco, Henry Schein and Patterson deprived independent dentists of the benefits of participating in buying groups that purchase dental supplies from national, full-service distributors. As full-service dental distributors, Benco, Henry Schein and Patterson offer gloves, cements, sterilization products and a range of other consumable supplies, as well as equipment, such as dental chairs and lights. Collectively, the big three control more than 85 percent of all distributor sales of dental products and services nationwide. The U.S. market for dental products is valued at approximately $10 billion. The dental practices that would have benefited from the discounts achieved by these buying groups were small businesses comprised of solo or small groups of dentists.
Benco and Henry Schein allegedly entered into an agreement refusing to provide discounts to or compete for the business of buying groups. The complaint details communications between executives of the two companies evidencing the agreement, as well as attempts to monitor and ensure compliance with the agreement. The complaint also asserts that Patterson joined the agreement. The complaint charges Benco, Henry Schein and Patterson of conspiring in violation of Section 5 of the FTC Act.
The complaint also alleges that on multiple occasions, Benco invited Burkhart Dental Supply – a regional distributor and the fourth largest full-service distributor in the United States – to refuse to provide discounts to buying groups. As a result of this conduct, the complaint separately charges Benco with a Section 5 invitation to collude count.
Based on the agreement among the distributors, the complaint contends that Benco, Henry Schein and Patterson unreasonably restrained price competition for dental products in the United States; distorted prices and undermined the ability of independent dentists to obtain lower prices and discounts for dental products; deprived independent dentists of the benefits of vigorous price and service competition among full-service, national dental distributors; unreasonably reduced output of dental products to dental buying groups; and eliminated or reduced the competitive bidding process for sales to these buying groups. This case reflects the Commission’s ongoing efforts to ensure competition in the healthcare industry.
The Commission vote to issue the administrative complaint was 2-0. The administrative trial is scheduled to begin on Oct. 16, 2018.
https://www.ftc.gov/news-events/press-releases/2018/02/ftc-sues-dental-products-distributors-alleged-conspiracy-not
Two states are scrutinizing Aetna's processes for approving or denying payment for medical care
The scrutiny cpmes after a former Aetna medical director admitted he never reviewed patient medical records when deciding whether to authorize treatment.
The states' inquiries and the medical director's admission, which drew scorn from the medical community, are a public relations nightmare for Hartford, Conn.-based Aetna, and puts a microscope on the insurance industry's pre-authorization and appeals processes. It could also hamper the national insurer's ability to merge with pharmacy giant CVS Health.
California Insurance Commissioner Dave Jones on Monday confirmed he is launching an investigation into Aetna's processes in denying claims and requests for prior authorization for care, as well as its utilization review process. Later that day, Colorado's insurance department said it would be asking questions about Aetna's compliance with state law regarding consumers' rights to appeal a coverage decision.
The two insurance departments were reacting to an October 2016 deposition of Dr. Jay Iinuma, who worked as Aetna's medical director for Southern California from 2012 to 2015, in a lawsuit concerning Aetna's denial of coverage for treatment of a patient's autoimmune disease in 2014.
In the deposition, Iinuma said that although he was responsible for overseeing the preauthorization of care, he never looked at patients' medical records during his tenure. Instead, he relied on nurses employed by Aetna to review the medical records and feed him pertinent information, such as lab values.
The deposition was first reported by Kaiser Health News in June 2017, but spurred an investigation after CNN showed the deposition to Jones.
"I wouldn't look at the medical records. I'd look at what the nurse provided, the information that the nurse provided," Iinuma said in his deposition. He also said Aetna trained him to make pre-authorization decisions this way.
In a statement, Aetna said its medical directors "review all necessary available medical information for cases that they are asked to evaluate. That is how they are trained, as physicians and as Aetna employees. In fact, adherence to those guidelines, which are based on health outcomes and not financial considerations, is an integral part of their yearly review process."
But state insurance departments worry that Aetna's pre-authorization and appeals processes could harm patients.
"If a health insurer is making decisions to deny coverage without a physician ever reviewing medical records that is a significant concern and could be a violation of the law," Jones said in a statement.
Iinuma's deposition drew scorn from the medical community, and the states' investigations into Aetna's internal processes are bad optics for a company hoping to merge with CVS Health. The U.S. Justice Department is now reviewing the proposed $69 billion merger.
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
The scrutiny cpmes after a former Aetna medical director admitted he never reviewed patient medical records when deciding whether to authorize treatment.
The states' inquiries and the medical director's admission, which drew scorn from the medical community, are a public relations nightmare for Hartford, Conn.-based Aetna, and puts a microscope on the insurance industry's pre-authorization and appeals processes. It could also hamper the national insurer's ability to merge with pharmacy giant CVS Health.
California Insurance Commissioner Dave Jones on Monday confirmed he is launching an investigation into Aetna's processes in denying claims and requests for prior authorization for care, as well as its utilization review process. Later that day, Colorado's insurance department said it would be asking questions about Aetna's compliance with state law regarding consumers' rights to appeal a coverage decision.
The two insurance departments were reacting to an October 2016 deposition of Dr. Jay Iinuma, who worked as Aetna's medical director for Southern California from 2012 to 2015, in a lawsuit concerning Aetna's denial of coverage for treatment of a patient's autoimmune disease in 2014.
In the deposition, Iinuma said that although he was responsible for overseeing the preauthorization of care, he never looked at patients' medical records during his tenure. Instead, he relied on nurses employed by Aetna to review the medical records and feed him pertinent information, such as lab values.
The deposition was first reported by Kaiser Health News in June 2017, but spurred an investigation after CNN showed the deposition to Jones.
"I wouldn't look at the medical records. I'd look at what the nurse provided, the information that the nurse provided," Iinuma said in his deposition. He also said Aetna trained him to make pre-authorization decisions this way.
In a statement, Aetna said its medical directors "review all necessary available medical information for cases that they are asked to evaluate. That is how they are trained, as physicians and as Aetna employees. In fact, adherence to those guidelines, which are based on health outcomes and not financial considerations, is an integral part of their yearly review process."
But state insurance departments worry that Aetna's pre-authorization and appeals processes could harm patients.
"If a health insurer is making decisions to deny coverage without a physician ever reviewing medical records that is a significant concern and could be a violation of the law," Jones said in a statement.
Iinuma's deposition drew scorn from the medical community, and the states' investigations into Aetna's internal processes are bad optics for a company hoping to merge with CVS Health. The U.S. Justice Department is now reviewing the proposed $69 billion merger.
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
NYT on the decline of EPA enforcement under Trump
Excerpt:
The data from the E.P.A. represented activity during the government’s 2017 fiscal year, which ended on Sept. 30, meaning the totals included the final three and half months of the Obama administration, when some of the E.P.A.’s biggest cases were settled. The data also reflected cases that were resolved during the Trump administration but had been initiated and largely handled under President Obama.
The New York Times in December did its own analysis of the E.P.A.’s civil enforcement action initiated in the first nine months under Scott Pruitt, the administrator appointed by President Trump. During that time frame, the agency sought civil penalties of about $50.4 million from polluters, which, adjusted for inflation, was about 39 percent of what the Obama administration sought in the same time period under its first E.P.A. director and about 70 percent of what the Bush administration sought in the same period.
The tally released Thursday showed a total of $1.6 billion in civil judicial and administrative penalties — money paid to punish polluters — the second largest amount in the last decade, with the single biggest amount of that coming from Volkswagen, which agreed to pay a $1.45 billion penalty at the end of the Obama administration. The prior peak was in fiscal year 2016, when BP agreed to pay $5.7 billion in penalties for the 2010 Deepwater Horizon disaster in the Gulf of Mexico.
In her statement, Ms. Bodine, who became enforcement director in December, said that the agency had focused its enforcement efforts during fiscal 2017 on speeding up the cleanup of contaminated sites, “deterring noncompliance” as well as a philosophy of “cooperative federalism,” which has meant turning over enforcement responsibilities to states.
The $20 billion in commitments by polluters to correct problems was up from $14 billion in 2016, the E.P.A. said.
But the analysis by The Times showed that during the first nine months of Mr. Pruitt’s tenure, demands for such fixes dropped sharply. The agency sought about $1.2 billion worth of fixes, known as injunctive relief, in civil cases initiated during that period. Adjusted for inflation, that was about 12 percent of what was sought under Mr. Obama and 48 percent under Mr. Bush. Overall, The Times’s analysis said, cases started under Mr. Pruitt’s leadership dropped significantly from both of the previous administrations.
Cynthia Giles, who was the assistant administrator for the E.P.A.’s enforcement office during the Obama administration, said the data released Thursday should not be interpreted as the Trump administration being tough on polluters.
“Nearly all of the large cases included in E.P.A.’s annual enforcement report were essentially over before the new administration arrived at E.P.A.,” said Ms. Giles, who had reviewed The Times’s analysis. “Without an unprecedented disavowal of an already negotiated and public agreement, there is nothing Administrator Pruitt’s team could have done to change the outcome. In no sense do these cases reflect the intentions or actions of the new administration.”
https://www.nytimes.com/2018/02/08/business/epa-penalties-polluters.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=16&pgtype=sectionfront
Excerpt:
The data from the E.P.A. represented activity during the government’s 2017 fiscal year, which ended on Sept. 30, meaning the totals included the final three and half months of the Obama administration, when some of the E.P.A.’s biggest cases were settled. The data also reflected cases that were resolved during the Trump administration but had been initiated and largely handled under President Obama.
The New York Times in December did its own analysis of the E.P.A.’s civil enforcement action initiated in the first nine months under Scott Pruitt, the administrator appointed by President Trump. During that time frame, the agency sought civil penalties of about $50.4 million from polluters, which, adjusted for inflation, was about 39 percent of what the Obama administration sought in the same time period under its first E.P.A. director and about 70 percent of what the Bush administration sought in the same period.
The tally released Thursday showed a total of $1.6 billion in civil judicial and administrative penalties — money paid to punish polluters — the second largest amount in the last decade, with the single biggest amount of that coming from Volkswagen, which agreed to pay a $1.45 billion penalty at the end of the Obama administration. The prior peak was in fiscal year 2016, when BP agreed to pay $5.7 billion in penalties for the 2010 Deepwater Horizon disaster in the Gulf of Mexico.
In her statement, Ms. Bodine, who became enforcement director in December, said that the agency had focused its enforcement efforts during fiscal 2017 on speeding up the cleanup of contaminated sites, “deterring noncompliance” as well as a philosophy of “cooperative federalism,” which has meant turning over enforcement responsibilities to states.
The $20 billion in commitments by polluters to correct problems was up from $14 billion in 2016, the E.P.A. said.
But the analysis by The Times showed that during the first nine months of Mr. Pruitt’s tenure, demands for such fixes dropped sharply. The agency sought about $1.2 billion worth of fixes, known as injunctive relief, in civil cases initiated during that period. Adjusted for inflation, that was about 12 percent of what was sought under Mr. Obama and 48 percent under Mr. Bush. Overall, The Times’s analysis said, cases started under Mr. Pruitt’s leadership dropped significantly from both of the previous administrations.
Cynthia Giles, who was the assistant administrator for the E.P.A.’s enforcement office during the Obama administration, said the data released Thursday should not be interpreted as the Trump administration being tough on polluters.
“Nearly all of the large cases included in E.P.A.’s annual enforcement report were essentially over before the new administration arrived at E.P.A.,” said Ms. Giles, who had reviewed The Times’s analysis. “Without an unprecedented disavowal of an already negotiated and public agreement, there is nothing Administrator Pruitt’s team could have done to change the outcome. In no sense do these cases reflect the intentions or actions of the new administration.”
https://www.nytimes.com/2018/02/08/business/epa-penalties-polluters.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=16&pgtype=sectionfront
Trump Council of Economic Advisors on lowering pharma prices
oThe Report is here: https://www.whitehouse.gov/wp-content/uploads/2017/11/CEA-Rx-White-Paper-Final2.pdf
The following excerpt discusses Medicaid and Medicare Policy:
To promote patient welfare, government policy should induce price competition. In the two primary U.S. insurance programs, Medicaid and Medicare, current policies dampen price competition, thereby artificially raising prices.
Medicaid Manufacturers that choose to enter the Medicaid Drug Rebate Program are required to offer state Medicaid programs their prescription medications at a price that either includes a minimum rebate of 23.1 percent of the average manufacturer price (AMP – the average price paid to manufacturers by wholesalers and retail pharmacies that buy direct net of prompt pay discounts) for brand drugs or, if lower, the “best price” the manufacturers offer to any other purchaser (“Medicaid Drug Rebate Program”). In exchange for these discounted rates, states are then required to cover the manufacturer's drugs in their Medicaid programs.
In fiscal year 2014, Medicaid programs spent $42 billion on prescription drugs and collected about $20 billion back in rebates so that net expenditures equaled about $22 billion (Baghdadi et al. 2017). The practice of mimicking public relative prices to private relative prices is partly beneficial because it allows the private market rather than bureaucrats to determine relative prices based on patient value.
While this basic approach of using market prices is sound, as currently implemented, the Medicaid Best Price program can create artificially high prices in the private sector under certain conditions. If a large share of a given drug’s market is enrolled in Medicaid (e.g., for HIV or mental health drugs), a pharmaceutical firm has an incentive to inflate prices in the private sector so that it can collect higher post-rebate prices from its large Medicaid customer base. Similarly, the mandated price discrimination implicit in this program prevents price discounts to lower-income patients in the private sector. Lower-income, private patient populations cannot be charged low prices as that jeopardizes the Medicaid price.
Reforms could help prevent the inflated private sector prices the program induces while at the same time allowing the government to use pricing information from the private sector to determine value. While CMS rules require that best prices be determined on a unit basis, Medicaid statutes do not (42 C.F.R. 477.506(e)(2)) (Sachs et al. 2017). CMS could revise rules to specify how manufacturers calculate best prices determined after the sale and the patient’s recovery. This may encourage competition and lower prices. It would also incentivize better adherence regimens and lower the risk to the government that it pays money for something that turns out to be less effective than expected. CMS could also provide more guidance on how value-based contracts and price reporting would affect other price regulations. This would encourage drug purchasers to negotiate, thus increasing competition and lowering prices.
Medicare Medicare Part B Physician Administered Drugs Medicare Part B drugs are those administered by physicians in their outpatient clinics to Medicare recipients. From 2006 through 2013, twenty-eight percent of this spending was for newly approved drugs that were concentrated among a small number of conditions, such as cancer, blood diseases, and ophthalmology (GAO 2015). According to the GAO, over time, expensive specialty drugs and biologics approved through expedited pathways have come to represent a higher proportion of newly approved drugs that are administered by physicians.
In the Medicare Part B program, through which many specialty drugs are reimbursed, drugs administered in physicians’ offices and hospital outpatient departments are reimbursed based on a 6 percent markup (now 4.3 percent due to the sequester) above the Average Sales Price (ASP), that manufacturers receive net of any price discounts. For example, with a 6 percent markup above ASP the doctor receives $600 for administering a $10,000 drug and $60 for a $1,000 drug. As is true in any cost-plus reimbursement environment, this leads to a lack of incentive to control costs and instead an incentive to raise costs. The current policy mutes the incentives for doctors to prescribe cheaper drugs and therefore for manufacturers to engage in price competition.
While there may be larger costs to providers for prescribing more expensive drugs, such as storing expensive drugs and the lower probability of collecting reimbursement or copays, these costs are routinely handled in other healthcare markets without resorting to distorted cost-plus reimbursements. While some private payers have responded to this type of perverse incentive problem through alternative reimbursement procedures for drugs delivered in clinics, similar reforms have not been made for the Medicare Part B program. The Medicare Payment Advisory Commission (MedPAC), the Government Accountability Office (GAO), the Department of Health and Human Services (HHS) Office of the Inspector General (OIG), and others have all proposed solutions for how Medicare could remove perverse incentives for prescribing higher-priced drugs and instead provide an incentive for doctors to prescribe cheaper drugs, putting competitive pressure on manufacturers to reduce their prices.
Options for reform include: i. Introducing physician reimbursement that is not tied to drug prices, ii. Moving Medicare Part B drug coverage into Medicare Part D, where price-competition over drug prices is better structured, and iii. Changing how pricing data is reported to increase transparency. By moving Part B coverage into Part D, the 71 percent of Medicare beneficiaries who participate in Part D would receive prescriptions that they would fill and their physicians would administer, thereby removing any economic incentive from prescribing decisions.
There are additional reforms to consider that increase price transparency and reduce incentives for more spending.
First, require better and more accurate sales data from drugs that are older than six months since launch. This is important because drug makers have an incentive to exclude discount prices from the sales price they report, since the higher the average sales price, the more they are paid.
Second, for new drugs that do not have much sales data, cut the doctor’s payment. This removes the incentive of prescribing a high-priced drug when physicians write prescriptions, and elevates clinical competition as a decision-making factor.
Medicare Part D Outpatient Drugs Medicare Part D reimburses outpatient drugs, and the program has several provisions that artificially raise costs for patients. The Social Security Act requires Medicare Part D plan formularies to include drugs within each category and class of covered drugs. CMS has previously interpreted the Social Security Act’s requirement to include drugs within each therapeutic category and class to mean the inclusion of at least two non-therapeutically equivalent drugs. This requirement eliminates the ability of Part D sponsors to negotiate for lower prices when there are only two drugs on the market since drug manufacturers know that CMS must cover both. The two-drug requirement leads to more spending.
Another problem resulting from Medicare Part D is the overpricing of low value drugs. The Social Security Act §1860D-14A stipulates cost-sharing amounts for low-income subsidy enrollees that vary by income and are adjusted by projected program cost growth. The use of formulary tier-based cost-sharing is prohibited, which eliminates the ability of sponsor plans to price and discount drugs according to value for patients. Low-income subsidy enrollees and sponsor plans should have incentives to use high value drugs. The Medicare Payment Advisory Commission (MedPAC 2016) has highlighted this problem by reporting that 17.3 percent of lowincome subsidy enrollees are high-cost compared to just 2.8 percent of other enrollees. The Medicare Part D Coverage Gap Discount Program requires drug manufacturers to provide a 50 percent discount to enrollees while in the coverage gap. The 50 percent discount is then counted toward the calculation of an enrollee’s true out-of-pocket cost, accelerating them through the coverage gap into the catastrophic phase of benefit where Medicare pays 80 percent of all drug costs and the sponsor and enrollee are responsible for the remaining 15 and 5 percent, respectively. With such discounts, enrollees may have an incentive to use brand drugs and reference biologics when less expensive generics and biosimilars are available, since the large discounted payment counts toward the true out-of-pocket cost. The overall Part D benefit structure creates perverse incentives for plan sponsors and pharmacy benefit managers (PBMs) to generate formularies that favor high-price, high-rebate drugs that speeds patients through the early phases of the benefit structure where plans are most liable for costs.
The Medicare Part D program has unintended consequences that have resulted in higher drug prices for consumers. MedPAC and OIG, among others, have each produced various policy CEA • Reforming Biopharmaceutical Pricing at Home and Abroad 9 options to address these misaligned incentives within the program. Solutions to overcome these problems could include:
i. Requiring plans to share drug manufacturer discounts with patients.;
ii. Allowing plans to manage formularies to negotiate better prices for patients;
iii. Lowering co-pays for generic drugs for patients; and
iv. Discouraging plan formulary design that speeds patients to the catastrophic coverage phase of benefit and increases overall spending.
oThe Report is here: https://www.whitehouse.gov/wp-content/uploads/2017/11/CEA-Rx-White-Paper-Final2.pdf
The following excerpt discusses Medicaid and Medicare Policy:
To promote patient welfare, government policy should induce price competition. In the two primary U.S. insurance programs, Medicaid and Medicare, current policies dampen price competition, thereby artificially raising prices.
Medicaid Manufacturers that choose to enter the Medicaid Drug Rebate Program are required to offer state Medicaid programs their prescription medications at a price that either includes a minimum rebate of 23.1 percent of the average manufacturer price (AMP – the average price paid to manufacturers by wholesalers and retail pharmacies that buy direct net of prompt pay discounts) for brand drugs or, if lower, the “best price” the manufacturers offer to any other purchaser (“Medicaid Drug Rebate Program”). In exchange for these discounted rates, states are then required to cover the manufacturer's drugs in their Medicaid programs.
In fiscal year 2014, Medicaid programs spent $42 billion on prescription drugs and collected about $20 billion back in rebates so that net expenditures equaled about $22 billion (Baghdadi et al. 2017). The practice of mimicking public relative prices to private relative prices is partly beneficial because it allows the private market rather than bureaucrats to determine relative prices based on patient value.
While this basic approach of using market prices is sound, as currently implemented, the Medicaid Best Price program can create artificially high prices in the private sector under certain conditions. If a large share of a given drug’s market is enrolled in Medicaid (e.g., for HIV or mental health drugs), a pharmaceutical firm has an incentive to inflate prices in the private sector so that it can collect higher post-rebate prices from its large Medicaid customer base. Similarly, the mandated price discrimination implicit in this program prevents price discounts to lower-income patients in the private sector. Lower-income, private patient populations cannot be charged low prices as that jeopardizes the Medicaid price.
Reforms could help prevent the inflated private sector prices the program induces while at the same time allowing the government to use pricing information from the private sector to determine value. While CMS rules require that best prices be determined on a unit basis, Medicaid statutes do not (42 C.F.R. 477.506(e)(2)) (Sachs et al. 2017). CMS could revise rules to specify how manufacturers calculate best prices determined after the sale and the patient’s recovery. This may encourage competition and lower prices. It would also incentivize better adherence regimens and lower the risk to the government that it pays money for something that turns out to be less effective than expected. CMS could also provide more guidance on how value-based contracts and price reporting would affect other price regulations. This would encourage drug purchasers to negotiate, thus increasing competition and lowering prices.
Medicare Medicare Part B Physician Administered Drugs Medicare Part B drugs are those administered by physicians in their outpatient clinics to Medicare recipients. From 2006 through 2013, twenty-eight percent of this spending was for newly approved drugs that were concentrated among a small number of conditions, such as cancer, blood diseases, and ophthalmology (GAO 2015). According to the GAO, over time, expensive specialty drugs and biologics approved through expedited pathways have come to represent a higher proportion of newly approved drugs that are administered by physicians.
In the Medicare Part B program, through which many specialty drugs are reimbursed, drugs administered in physicians’ offices and hospital outpatient departments are reimbursed based on a 6 percent markup (now 4.3 percent due to the sequester) above the Average Sales Price (ASP), that manufacturers receive net of any price discounts. For example, with a 6 percent markup above ASP the doctor receives $600 for administering a $10,000 drug and $60 for a $1,000 drug. As is true in any cost-plus reimbursement environment, this leads to a lack of incentive to control costs and instead an incentive to raise costs. The current policy mutes the incentives for doctors to prescribe cheaper drugs and therefore for manufacturers to engage in price competition.
While there may be larger costs to providers for prescribing more expensive drugs, such as storing expensive drugs and the lower probability of collecting reimbursement or copays, these costs are routinely handled in other healthcare markets without resorting to distorted cost-plus reimbursements. While some private payers have responded to this type of perverse incentive problem through alternative reimbursement procedures for drugs delivered in clinics, similar reforms have not been made for the Medicare Part B program. The Medicare Payment Advisory Commission (MedPAC), the Government Accountability Office (GAO), the Department of Health and Human Services (HHS) Office of the Inspector General (OIG), and others have all proposed solutions for how Medicare could remove perverse incentives for prescribing higher-priced drugs and instead provide an incentive for doctors to prescribe cheaper drugs, putting competitive pressure on manufacturers to reduce their prices.
Options for reform include: i. Introducing physician reimbursement that is not tied to drug prices, ii. Moving Medicare Part B drug coverage into Medicare Part D, where price-competition over drug prices is better structured, and iii. Changing how pricing data is reported to increase transparency. By moving Part B coverage into Part D, the 71 percent of Medicare beneficiaries who participate in Part D would receive prescriptions that they would fill and their physicians would administer, thereby removing any economic incentive from prescribing decisions.
There are additional reforms to consider that increase price transparency and reduce incentives for more spending.
First, require better and more accurate sales data from drugs that are older than six months since launch. This is important because drug makers have an incentive to exclude discount prices from the sales price they report, since the higher the average sales price, the more they are paid.
Second, for new drugs that do not have much sales data, cut the doctor’s payment. This removes the incentive of prescribing a high-priced drug when physicians write prescriptions, and elevates clinical competition as a decision-making factor.
Medicare Part D Outpatient Drugs Medicare Part D reimburses outpatient drugs, and the program has several provisions that artificially raise costs for patients. The Social Security Act requires Medicare Part D plan formularies to include drugs within each category and class of covered drugs. CMS has previously interpreted the Social Security Act’s requirement to include drugs within each therapeutic category and class to mean the inclusion of at least two non-therapeutically equivalent drugs. This requirement eliminates the ability of Part D sponsors to negotiate for lower prices when there are only two drugs on the market since drug manufacturers know that CMS must cover both. The two-drug requirement leads to more spending.
Another problem resulting from Medicare Part D is the overpricing of low value drugs. The Social Security Act §1860D-14A stipulates cost-sharing amounts for low-income subsidy enrollees that vary by income and are adjusted by projected program cost growth. The use of formulary tier-based cost-sharing is prohibited, which eliminates the ability of sponsor plans to price and discount drugs according to value for patients. Low-income subsidy enrollees and sponsor plans should have incentives to use high value drugs. The Medicare Payment Advisory Commission (MedPAC 2016) has highlighted this problem by reporting that 17.3 percent of lowincome subsidy enrollees are high-cost compared to just 2.8 percent of other enrollees. The Medicare Part D Coverage Gap Discount Program requires drug manufacturers to provide a 50 percent discount to enrollees while in the coverage gap. The 50 percent discount is then counted toward the calculation of an enrollee’s true out-of-pocket cost, accelerating them through the coverage gap into the catastrophic phase of benefit where Medicare pays 80 percent of all drug costs and the sponsor and enrollee are responsible for the remaining 15 and 5 percent, respectively. With such discounts, enrollees may have an incentive to use brand drugs and reference biologics when less expensive generics and biosimilars are available, since the large discounted payment counts toward the true out-of-pocket cost. The overall Part D benefit structure creates perverse incentives for plan sponsors and pharmacy benefit managers (PBMs) to generate formularies that favor high-price, high-rebate drugs that speeds patients through the early phases of the benefit structure where plans are most liable for costs.
The Medicare Part D program has unintended consequences that have resulted in higher drug prices for consumers. MedPAC and OIG, among others, have each produced various policy CEA • Reforming Biopharmaceutical Pricing at Home and Abroad 9 options to address these misaligned incentives within the program. Solutions to overcome these problems could include:
i. Requiring plans to share drug manufacturer discounts with patients.;
ii. Allowing plans to manage formularies to negotiate better prices for patients;
iii. Lowering co-pays for generic drugs for patients; and
iv. Discouraging plan formulary design that speeds patients to the catastrophic coverage phase of benefit and increases overall spending.
From Publtic Citizen: Jeff Sovern on the new CFPB and payday lending
How Mulvaney Can Sabotage the CFPB's Payday Lending Ruleby Jeff Sovern
Last month, Interim Director Mulvaney announced that the Bureau may reconsider the Bureau's payday lending rule. But he can't just rescind it. That would require a full notice-and-comment rulemaking, and that would take longer than Mulvaney will be at the CFPB (under the Vacancies Act, he is limited to 210 days). True, Mulvaney could start that process and a successor could finish it. But even then, the Bureau would have to to meet the requirements of the APA and not appear to be acting arbitrarily and capriciously, which would be hard to do after it already promulgated a rule on the subject.
But according to a Kate Berry article in the American Banker, Mulvaney can’t just kill CFPB payday rule, but here’s what he can do, Mulvaney could delay implementation of the existing rule and then a successor could amend the rule to make it less protective of consumers. One scenario would shift the rule from prohibiting a payday lender from making certain loans unless the lender verified that the consumer could repay the loan to a rule that obliged lenders to provide disclosures.
The problem with that approach is that consumers all too often ignore disclosures, as Omri Ben-Shahar and Carl E. Schneider demonstrated in their book, More Than You Wanted to Know: The Failure of Mandated Disclosure. For example, a study by Marianne Bertrand and Adair Morse, both of Chicago's Booth School of Business, Information Disclosure, Cognitive Biases and Payday Borrowing and Payday Borrowing, that displayed the image below to payday borrowers, found that it reduced payday borrowing by 11% in later pay cycles and the amount borrowed by 23%. That doesn't seem like much when you look at some of the comparisons below, such as that a three-month credit card loan would cost $15, versus $270 for a payday loan. So the difference between regulation and disclosure for some--perhaps many--consumers is the difference between being caught in a debt trap, or not.
[see original for graphic]
Posted by Jeff Sovern on Saturday, February 10, 2018 at 04:45 PM in Consumer Financial Protection Bureau, Predatory Lending |Permalink
How Mulvaney Can Sabotage the CFPB's Payday Lending Ruleby Jeff Sovern
Last month, Interim Director Mulvaney announced that the Bureau may reconsider the Bureau's payday lending rule. But he can't just rescind it. That would require a full notice-and-comment rulemaking, and that would take longer than Mulvaney will be at the CFPB (under the Vacancies Act, he is limited to 210 days). True, Mulvaney could start that process and a successor could finish it. But even then, the Bureau would have to to meet the requirements of the APA and not appear to be acting arbitrarily and capriciously, which would be hard to do after it already promulgated a rule on the subject.
But according to a Kate Berry article in the American Banker, Mulvaney can’t just kill CFPB payday rule, but here’s what he can do, Mulvaney could delay implementation of the existing rule and then a successor could amend the rule to make it less protective of consumers. One scenario would shift the rule from prohibiting a payday lender from making certain loans unless the lender verified that the consumer could repay the loan to a rule that obliged lenders to provide disclosures.
The problem with that approach is that consumers all too often ignore disclosures, as Omri Ben-Shahar and Carl E. Schneider demonstrated in their book, More Than You Wanted to Know: The Failure of Mandated Disclosure. For example, a study by Marianne Bertrand and Adair Morse, both of Chicago's Booth School of Business, Information Disclosure, Cognitive Biases and Payday Borrowing and Payday Borrowing, that displayed the image below to payday borrowers, found that it reduced payday borrowing by 11% in later pay cycles and the amount borrowed by 23%. That doesn't seem like much when you look at some of the comparisons below, such as that a three-month credit card loan would cost $15, versus $270 for a payday loan. So the difference between regulation and disclosure for some--perhaps many--consumers is the difference between being caught in a debt trap, or not.
[see original for graphic]
Posted by Jeff Sovern on Saturday, February 10, 2018 at 04:45 PM in Consumer Financial Protection Bureau, Predatory Lending |Permalink
The LA Times on what the Mick Mulvaney CFPB will do, and not do
Excerpt:
Between the bevy of recent moves by the bureau and the launch of a wide-ranging review of its practices ordered by Mulvaney, a picture is emerging of what a Trump-era CFPB will look like — and it appears it will not the resemble the agency that developed a pugnacious reputation over the last six years.
Mulvaney outlined his view in a memo [http://www.documentcloud.org/documents/4357880-Mulvaney-Memo.html], obtained by news site ProPublica, criticizing the bureau for being overly aggressive under Cordray and saying it would now serve not only consumers but the financial-services companies it was created to regulate.
"We don't just work for the government, we work for the people. And that means everyone: those who use credit cards and those who provide those cards; those who take loans and those who make them; those who buy cards and whose who sell them," wrote Mulvaney, a free-market advocate who once called the CFPB a "sad, sick joke."
For Lauren Saunders, associate director of the National Consumer Law Center, such a mission statement simply means unwinding consumer protections.
"I think we'll see a lot of rollbacks," she said.
For now, the practical implications of the pullback appear to be limited to the agency's more aggressive interpretations of consumer-protection law.
The lawsuit against Golden Valley Lending and other firms owned by the Habematolel Pomo of Upper Lake tribe is an example.
In that case and others, the agency relied on what industry attorneys have described as a novel argument: that lenders broke federal consumer protection laws that forbid unfair, deceptive or abusive practices by collecting on loans that carried interest rates higher than state laws allow, in some cases as high as 950%. In other words, the argument goes, the bureau piggybacked on state laws to allege a violation of federal laws.
Saunders said dropping the case looks to her like a clear sign that Mulvaney, who accepted contributions from high-interest lenders while serving in the House of Representatives, plans to go easy on players in that industry. Mulvaney in 2016 was one of a group of House members who argued in a 2016 letter to Cordray that federal regulation of the payday loan industry ignored states' rights and would cut off access to credit for many Americans.
http://www.latimes.com/business/la-fi-cfpb-overhaul-20180205-story.html
Excerpt:
Between the bevy of recent moves by the bureau and the launch of a wide-ranging review of its practices ordered by Mulvaney, a picture is emerging of what a Trump-era CFPB will look like — and it appears it will not the resemble the agency that developed a pugnacious reputation over the last six years.
Mulvaney outlined his view in a memo [http://www.documentcloud.org/documents/4357880-Mulvaney-Memo.html], obtained by news site ProPublica, criticizing the bureau for being overly aggressive under Cordray and saying it would now serve not only consumers but the financial-services companies it was created to regulate.
"We don't just work for the government, we work for the people. And that means everyone: those who use credit cards and those who provide those cards; those who take loans and those who make them; those who buy cards and whose who sell them," wrote Mulvaney, a free-market advocate who once called the CFPB a "sad, sick joke."
For Lauren Saunders, associate director of the National Consumer Law Center, such a mission statement simply means unwinding consumer protections.
"I think we'll see a lot of rollbacks," she said.
For now, the practical implications of the pullback appear to be limited to the agency's more aggressive interpretations of consumer-protection law.
The lawsuit against Golden Valley Lending and other firms owned by the Habematolel Pomo of Upper Lake tribe is an example.
In that case and others, the agency relied on what industry attorneys have described as a novel argument: that lenders broke federal consumer protection laws that forbid unfair, deceptive or abusive practices by collecting on loans that carried interest rates higher than state laws allow, in some cases as high as 950%. In other words, the argument goes, the bureau piggybacked on state laws to allege a violation of federal laws.
Saunders said dropping the case looks to her like a clear sign that Mulvaney, who accepted contributions from high-interest lenders while serving in the House of Representatives, plans to go easy on players in that industry. Mulvaney in 2016 was one of a group of House members who argued in a 2016 letter to Cordray that federal regulation of the payday loan industry ignored states' rights and would cut off access to credit for many Americans.
http://www.latimes.com/business/la-fi-cfpb-overhaul-20180205-story.html
The federal government lacks even basic information about the quality of assisted living services provided to low-income people on Medicaid, according to the Government Accountability Office
From the NYT:
.
Billions of dollars in government spending is flowing to the industry even as it operates under a patchwork of vague standards and limited supervision by federal and state authorities. States reported spending more than $10 billion a year in federal and state funds for assisted living services for more than 330,000 Medicaid beneficiaries, an average of more than $30,000 a person, the Government Accountability Office found in a survey of states.
States are supposed to keep track of cases involving the abuse, neglect, exploitation or unexplained death of Medicaid beneficiaries in assisted living facilities. But, the report said, more than half of the states were unable to provide information on the number or nature of such cases.
Just 22 states were able to provide data on “critical incidents — cases of potential or actual harm.” In one year, those states reported a total of more than 22,900 incidents, including the physical, emotional or sexual abuse of residents.
Many of those people are “particularly vulnerable,” the report said, like older adults and people with physical or intellectual disabilities. More than a third of residents are believed to have Alzheimer’s or other forms of dementia.
The report provides the most detailed look to date at the role of assisted living in Medicaid, one of the nation’s largest health care programs. Titled “Improved Federal Oversight of Beneficiary Health and Welfare Is Needed,” it grew out of a two-year study requested by a bipartisan group of four senators.
Assisted living communities are intended to be a bridge between living at home and living in a nursing home. Residents can live in apartments or houses, with a high degree of independence, but can still receive help managing their medications and performing daily activities like bathing, dressing and eating.
Nothing in the report disputes the fact that some assisted living facilities provide high-quality, compassionate care.
The National Center for Assisted Living, a trade group for providers, said states already had “a robust oversight system” to ensure proper care for residents. In the last two years, it said, several states, including California, Oregon, Rhode Island and Virginia, have adopted laws to enhance licensing requirements and penalties for poor performance.
Continue reading the NYT story at https://www.nytimes.com/2018/02/03/us/politics/assisted-living-gaps.html#story-continues-3
From the NYT:
.
Billions of dollars in government spending is flowing to the industry even as it operates under a patchwork of vague standards and limited supervision by federal and state authorities. States reported spending more than $10 billion a year in federal and state funds for assisted living services for more than 330,000 Medicaid beneficiaries, an average of more than $30,000 a person, the Government Accountability Office found in a survey of states.
States are supposed to keep track of cases involving the abuse, neglect, exploitation or unexplained death of Medicaid beneficiaries in assisted living facilities. But, the report said, more than half of the states were unable to provide information on the number or nature of such cases.
Just 22 states were able to provide data on “critical incidents — cases of potential or actual harm.” In one year, those states reported a total of more than 22,900 incidents, including the physical, emotional or sexual abuse of residents.
Many of those people are “particularly vulnerable,” the report said, like older adults and people with physical or intellectual disabilities. More than a third of residents are believed to have Alzheimer’s or other forms of dementia.
The report provides the most detailed look to date at the role of assisted living in Medicaid, one of the nation’s largest health care programs. Titled “Improved Federal Oversight of Beneficiary Health and Welfare Is Needed,” it grew out of a two-year study requested by a bipartisan group of four senators.
Assisted living communities are intended to be a bridge between living at home and living in a nursing home. Residents can live in apartments or houses, with a high degree of independence, but can still receive help managing their medications and performing daily activities like bathing, dressing and eating.
Nothing in the report disputes the fact that some assisted living facilities provide high-quality, compassionate care.
The National Center for Assisted Living, a trade group for providers, said states already had “a robust oversight system” to ensure proper care for residents. In the last two years, it said, several states, including California, Oregon, Rhode Island and Virginia, have adopted laws to enhance licensing requirements and penalties for poor performance.
Continue reading the NYT story at https://www.nytimes.com/2018/02/03/us/politics/assisted-living-gaps.html#story-continues-3
Federal Reserve documents on Wells Fargo
Press Release February 02, 2018
Responding to recent and widespread consumer abuses and other compliance breakdowns by Wells Fargo, the Federal Reserve Board on Friday announced that it would restrict the growth of the firm until it sufficiently improves its governance and controls. Concurrently with the Board's action, Wells Fargo will replace three current board members by April and a fourth board member by the end of the year.
In addition to the growth restriction, the Board's consent cease and desist order with Wells Fargo requires the firm to improve its governance and risk management processes, including strengthening the effectiveness of oversight by its board of directors. Until the firm makes sufficient improvements, it will be restricted from growing any larger than its total asset size as of the end of 2017. The Board required each current director to sign the cease and desist order.
"We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again," Chair Janet L. Yellen said. "The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers."
In recent years, Wells Fargo pursued a business strategy that prioritized its overall growth without ensuring appropriate management of all key risks. The firm did not have an effective firm-wide risk management framework in place that covered all key risks. This prevented the proper escalation of serious compliance breakdowns to the board of directors.
The Board's action will restrict Wells Fargo's growth until its governance and risk management sufficiently improves but will not require the firm to cease current activities, including accepting customer deposits or making consumer loans.
Emphasizing the need for improved director oversight of the firm, the Board has sent letters to each current Wells Fargo board member confirming that the firm's board of directors, during the period of compliance breakdowns, did not meet supervisory expectations. Letters were also sent to former Chairman and Chief Executive Officer John Stumpf and past lead independent director Stephen Sanger stating that their performance in those roles, in particular, did not meet the Federal Reserve's expectations.
See https://www.federalreserve.gov/newsevents/pressreleases/enforcement20180202a.htm
The consent cease and desist order and Fed letters are available at the same URL
WTF Independent repair geek rants on the planned obsolescence of Apple products
Louis Rossmann is an independent service technician in New York City who has repaired Apple products for years.
In this video, Rossman uses passionate and remarkably profane language to argue that Apple withholds crucial repair information from independent repair technicians, and refuses to do repairs itself, thereby forcing product replacement rather than repair. He points out that auto manufacturers face government regulations that discourage withholding of repair information. He then goes on to explain in great detail (maybe a lot more than you want) how he is able to effect particular repairs that Apple refuses to do -- notably, he can fix a common faulty sensor problem with $2 worth of parts, a repair that Apple charges $750 for (Rossman charges less than half of that, and in cheaper markets, you can get it done for as little as $75).
Rossman has testified to lawmakers in support of "right to repair" legislation. See https://repair.org/legislation/ for a description of the legislative proposals.
The video is at https://boingboing.net/2017/04/17/right-to-repair.html
This posting is by Don Allen Resnikoff, who takes responsibility for the content.
Louis Rossmann is an independent service technician in New York City who has repaired Apple products for years.
In this video, Rossman uses passionate and remarkably profane language to argue that Apple withholds crucial repair information from independent repair technicians, and refuses to do repairs itself, thereby forcing product replacement rather than repair. He points out that auto manufacturers face government regulations that discourage withholding of repair information. He then goes on to explain in great detail (maybe a lot more than you want) how he is able to effect particular repairs that Apple refuses to do -- notably, he can fix a common faulty sensor problem with $2 worth of parts, a repair that Apple charges $750 for (Rossman charges less than half of that, and in cheaper markets, you can get it done for as little as $75).
Rossman has testified to lawmakers in support of "right to repair" legislation. See https://repair.org/legislation/ for a description of the legislative proposals.
The video is at https://boingboing.net/2017/04/17/right-to-repair.html
This posting is by Don Allen Resnikoff, who takes responsibility for the content.
A Geek guide to the technology and economics supporting disinformation on the internet:
#DigitalDeceit: The Technologies Behind Precision Propaganda on the Internet
By Dipayan Ghosh, Shorenstein Fellow, and Ben Scott, Senior Advisor to the Open Technology Institute at New America. Co-published by the New America Foundation and the Shorenstein Center.
See https://shorensteincenter.org/digital-deceit-precision-propaganda/
The introduction to the piece:
Over the past year, there has been rising pressure on Facebook, Google and Twitter to account for how bad actors are exploiting their platforms. The catalyst of this so-called “tech-lash” was the revelation in summer 2017 that agents of the Russian government engaged in disinformation operations using these services to influence the 2016 presidential campaigns.
The investigation into the Russian operation pulled back the curtain on a modern Internet marketplace that enables widespread disinformation over online channels. Questionable digital advertisements, social media bots, and viral internet memes carrying toxic messages have featured heavily in the news. But we have only begun to scratch the surface of a much larger ecosystem of digital advertising and marketing technologies. To truly address the specter of future nefarious interventions in the American political process, we need to broaden the lens and assess all of the tools available to online commercial advertisers. Disinformation operators in the future will replicate all of these techniques, using the full suite of platforms and technologies. These tools grow more powerful all the time as new advances in algorithmic technologies and artificial intelligence are integrated into the marketplace for digital marketing and advertising.
The central problem of disinformation corrupting American political culture is not Russian spies or a particular social media platform. The central problem is that the entire industry is built to leverage sophisticated technology to aggregate user attention and sell advertising. There is an alignment of interests between advertisers and the platforms. And disinformation operators are typically indistinguishable from any other advertiser. Any viable policy solutions must start here.
To inform and support this important public debate, this paper analyzes the technologies of digital advertising and marketing in order to deepen our understanding of precision propaganda.
#DigitalDeceit: The Technologies Behind Precision Propaganda on the Internet
By Dipayan Ghosh, Shorenstein Fellow, and Ben Scott, Senior Advisor to the Open Technology Institute at New America. Co-published by the New America Foundation and the Shorenstein Center.
See https://shorensteincenter.org/digital-deceit-precision-propaganda/
The introduction to the piece:
Over the past year, there has been rising pressure on Facebook, Google and Twitter to account for how bad actors are exploiting their platforms. The catalyst of this so-called “tech-lash” was the revelation in summer 2017 that agents of the Russian government engaged in disinformation operations using these services to influence the 2016 presidential campaigns.
The investigation into the Russian operation pulled back the curtain on a modern Internet marketplace that enables widespread disinformation over online channels. Questionable digital advertisements, social media bots, and viral internet memes carrying toxic messages have featured heavily in the news. But we have only begun to scratch the surface of a much larger ecosystem of digital advertising and marketing technologies. To truly address the specter of future nefarious interventions in the American political process, we need to broaden the lens and assess all of the tools available to online commercial advertisers. Disinformation operators in the future will replicate all of these techniques, using the full suite of platforms and technologies. These tools grow more powerful all the time as new advances in algorithmic technologies and artificial intelligence are integrated into the marketplace for digital marketing and advertising.
The central problem of disinformation corrupting American political culture is not Russian spies or a particular social media platform. The central problem is that the entire industry is built to leverage sophisticated technology to aggregate user attention and sell advertising. There is an alignment of interests between advertisers and the platforms. And disinformation operators are typically indistinguishable from any other advertiser. Any viable policy solutions must start here.
To inform and support this important public debate, this paper analyzes the technologies of digital advertising and marketing in order to deepen our understanding of precision propaganda.
From Public Citizen Consumer Law & Policy Blog
CFPB Has No Update on Enforcement Freeze After Not Announcing Enforcement Action in More Than 2 MonthsPosted: 24 Jan 2018 11:45 AM PST
by Jeff Sovern
In response to my inquiry, a CFPB representative, Brenda Muniz, informed me today that "There are no updates with respect to the freeze on enforcement actions or the issuance of CIDs," and that the CFPB has not announced an enforcement action since its November 21 announcement about Citibank. Though the Bureau's press releases say that it is “consistently enforcing federal consumer financial law," and Mr. Mulvaney released a statement yesterday, which Allison linked to, in which he said the Bureau would enforce consumer laws on his watch, it's hard to find evidence of it, unless he means that the Bureau will continue to litigate cases Mulvaney's predecessor commenced, though even that is not always happening. Meanwhile, today the Bureau issued the promised Request for Information Regarding Bureau Civil Investigative Demands and Associated Processes.
CFPB Has No Update on Enforcement Freeze After Not Announcing Enforcement Action in More Than 2 MonthsPosted: 24 Jan 2018 11:45 AM PST
by Jeff Sovern
In response to my inquiry, a CFPB representative, Brenda Muniz, informed me today that "There are no updates with respect to the freeze on enforcement actions or the issuance of CIDs," and that the CFPB has not announced an enforcement action since its November 21 announcement about Citibank. Though the Bureau's press releases say that it is “consistently enforcing federal consumer financial law," and Mr. Mulvaney released a statement yesterday, which Allison linked to, in which he said the Bureau would enforce consumer laws on his watch, it's hard to find evidence of it, unless he means that the Bureau will continue to litigate cases Mulvaney's predecessor commenced, though even that is not always happening. Meanwhile, today the Bureau issued the promised Request for Information Regarding Bureau Civil Investigative Demands and Associated Processes.
The Post's View
Opinion
A D.C. statute bars redeveloping land with a gas station on it. That’s absurd.
By Editorial Board January 21
SELF-GOVERNMENT, alas, does not guarantee sensible government. Exhibit A: the District’s strange statute that effectively prohibits the redevelopment of any land containing a full-service gas station. If you own the ground under one of the city’s roughly four dozen such establishments, you’re stuck: You can’t tear the garage down and put up condos; you really can’t even reduce it to a leaner “gas-and-go” operation. Ostensibly intended to protect an urban amenity for car owners, the ban can be waived, case by case, by the mayor — but only with the prior approval of the Gas Station Advisory Board. Alas, this august body has no members. In fact, a succession of mayors has declined to appoint any for the past 11 years.
John C. Formant is tired of this Catch-22. He owns the site of a full-service Shell station at a major intersection in booming Petworth. He would like to sell the land for construction of a residential-commercial building, including 57 condos, and even has permission from a different part of the District bureaucracy for the plan. Unless and until he can get out from under the gas-station conversion ban, however, his plans are not worth the paper they’re printed on — and his land’s market value may be suffering, too. On Jan. 2, Mr. Formant filed a lawsuit asking the U.S. District Court for the District of Columbia to declare D.C.’s law unconstitutional, as an uncompensated “taking” of his property and a form of involuntary servitude, to boot.
Those are sweeping claims, regarding which we would not hazard a legal analysis. On the essential absurdity of the District’s law, however, Mr. Formant appears to have an open-and-shut case. There’s a long history to the D.C. Council’s micromanagement of the city’s gas stations, some of it reflecting council members’ well-intentioned but exaggerated concerns about preserving a balanced commercial landscape — and a lot of it involving petty political rivalries and rent-seeking business interests too arcane to enumerate.
Complete editorial: https://www.washingtonpost.com/opinions/a-dc-statute-bars-redeveloping-land-with-a-gas-station-on-it-thats-insensible/2018/01/21/ac496ef2-fc7c-11e7-a46b-a3614530bd87_story.html?utm_term=.dbec22d78342
A copy of the lawsuit Complaint is here: https://www.scribd.com/document/368429732/Gas-Station-Lawsuit
Opinion
A D.C. statute bars redeveloping land with a gas station on it. That’s absurd.
By Editorial Board January 21
SELF-GOVERNMENT, alas, does not guarantee sensible government. Exhibit A: the District’s strange statute that effectively prohibits the redevelopment of any land containing a full-service gas station. If you own the ground under one of the city’s roughly four dozen such establishments, you’re stuck: You can’t tear the garage down and put up condos; you really can’t even reduce it to a leaner “gas-and-go” operation. Ostensibly intended to protect an urban amenity for car owners, the ban can be waived, case by case, by the mayor — but only with the prior approval of the Gas Station Advisory Board. Alas, this august body has no members. In fact, a succession of mayors has declined to appoint any for the past 11 years.
John C. Formant is tired of this Catch-22. He owns the site of a full-service Shell station at a major intersection in booming Petworth. He would like to sell the land for construction of a residential-commercial building, including 57 condos, and even has permission from a different part of the District bureaucracy for the plan. Unless and until he can get out from under the gas-station conversion ban, however, his plans are not worth the paper they’re printed on — and his land’s market value may be suffering, too. On Jan. 2, Mr. Formant filed a lawsuit asking the U.S. District Court for the District of Columbia to declare D.C.’s law unconstitutional, as an uncompensated “taking” of his property and a form of involuntary servitude, to boot.
Those are sweeping claims, regarding which we would not hazard a legal analysis. On the essential absurdity of the District’s law, however, Mr. Formant appears to have an open-and-shut case. There’s a long history to the D.C. Council’s micromanagement of the city’s gas stations, some of it reflecting council members’ well-intentioned but exaggerated concerns about preserving a balanced commercial landscape — and a lot of it involving petty political rivalries and rent-seeking business interests too arcane to enumerate.
Complete editorial: https://www.washingtonpost.com/opinions/a-dc-statute-bars-redeveloping-land-with-a-gas-station-on-it-thats-insensible/2018/01/21/ac496ef2-fc7c-11e7-a46b-a3614530bd87_story.html?utm_term=.dbec22d78342
A copy of the lawsuit Complaint is here: https://www.scribd.com/document/368429732/Gas-Station-Lawsuit
The Supreme Court rules that D.C. police officers acted reasonably in arresting 21 people at a late-night house party a decade ago in a case that featured women in garter belts stuffed with cash and a mystery hostess named “Peaches.”
The court ruled unanimously that the officers could not be held liable for making the arrests after they came upon a scene of “utter Bacchanalia,” as Justice Clarence Thomas described it in announcing the decision, at a house party where the homeowner was not present and it was unclear whether the guests had been invited.
“Based on the vagueness and implausibility of the partygoers’ stories, the officers could have reasonably inferred that they were lying and that their lies suggested a guilty mind,” Thomas wrote in his decision for the court. At any rate, the officers had qualified immunity for their actions, the court said.
From U.S. Supreme Court opinion syllabus:
District of Columbia police officers responded to a complaint about loud music and illegal activities in a vacant house. Inside, they found the house nearly barren and in disarray. The officers smelled marijuana and observed beer bottles and cups of liquor on the floor, which was dirty. They found a make-shift strip club in the living room, and a naked woman and several men in an upstairs bedroom. Many partygoers scattered when they saw the uniformed officers, and some hid. The officers questioned everyone and got inconsistent stories. Two women identified “Peaches” as the house’s tenant and said that she had given the partygoers permission to have the party. But Peaches was not there. When the officers spoke by phone to Peaches, she was nervous, agitated, and evasive. At first, she claimed that she was renting the house and had given the partygoers permission to have the party, but she eventually admitted that she did not have permission to use the house. The owner confirmed that he had not given anyone permission to be there. The officers then arrested the partygoers for unlawful entry. Several partygoers sued for false arrest under the Fourth Amendment and District law. The District Court concluded that the officers lacked probable cause to arrest the partygoers for unlawful entry and that two of the officers, petitioners here, were not entitled to qualified immunity. A divided panel of the D. C. Circuit affirmed.
Held: 1. The officers had probable cause to arrest the partygoers.
The U.S. Supreme Court decision is here: https://www.supremecourt.gov/opinions/17pdf/15-1485_1qm2.pdf
The Washington Post story is here: https://www.washingtonpost.com/local/public-safety/supreme-court-rules-for-police-officers-in-dc-house-party-case-that-involved-mystery-hostess-called-peaches/2018/01/22/87e5eb4a-fed3-11e7-bb03-722769454f82_story.html?hpid=hp_local-news_court-1050a%3Ahomepage%2Fstory&utm_term=.a30451c8eedb
The court ruled unanimously that the officers could not be held liable for making the arrests after they came upon a scene of “utter Bacchanalia,” as Justice Clarence Thomas described it in announcing the decision, at a house party where the homeowner was not present and it was unclear whether the guests had been invited.
“Based on the vagueness and implausibility of the partygoers’ stories, the officers could have reasonably inferred that they were lying and that their lies suggested a guilty mind,” Thomas wrote in his decision for the court. At any rate, the officers had qualified immunity for their actions, the court said.
From U.S. Supreme Court opinion syllabus:
District of Columbia police officers responded to a complaint about loud music and illegal activities in a vacant house. Inside, they found the house nearly barren and in disarray. The officers smelled marijuana and observed beer bottles and cups of liquor on the floor, which was dirty. They found a make-shift strip club in the living room, and a naked woman and several men in an upstairs bedroom. Many partygoers scattered when they saw the uniformed officers, and some hid. The officers questioned everyone and got inconsistent stories. Two women identified “Peaches” as the house’s tenant and said that she had given the partygoers permission to have the party. But Peaches was not there. When the officers spoke by phone to Peaches, she was nervous, agitated, and evasive. At first, she claimed that she was renting the house and had given the partygoers permission to have the party, but she eventually admitted that she did not have permission to use the house. The owner confirmed that he had not given anyone permission to be there. The officers then arrested the partygoers for unlawful entry. Several partygoers sued for false arrest under the Fourth Amendment and District law. The District Court concluded that the officers lacked probable cause to arrest the partygoers for unlawful entry and that two of the officers, petitioners here, were not entitled to qualified immunity. A divided panel of the D. C. Circuit affirmed.
Held: 1. The officers had probable cause to arrest the partygoers.
The U.S. Supreme Court decision is here: https://www.supremecourt.gov/opinions/17pdf/15-1485_1qm2.pdf
The Washington Post story is here: https://www.washingtonpost.com/local/public-safety/supreme-court-rules-for-police-officers-in-dc-house-party-case-that-involved-mystery-hostess-called-peaches/2018/01/22/87e5eb4a-fed3-11e7-bb03-722769454f82_story.html?hpid=hp_local-news_court-1050a%3Ahomepage%2Fstory&utm_term=.a30451c8eedb
WSJ's Greg Ip on the future prospects of antitrust enforcement against Google and other similar companies
Greg Ip's front page Wall Street Journal article is remarkable for several reasons. One is that it is good journalism: The introductory paragraphs offer some of the flavor of the piece:
Standard Oil and Co. and American Telephone and Telegraph Co. were the technological titans of their day, commanding more than 80% of their markets.
Today's tech giants are just as dominant: In the U.S., Alphabet Inc.'s Google drives 89% of internet search; 95% of young adults on the internet use a Facebook Inc. product; and Amazon.com Inc. now accounts for 75% of electronic book sales. Those firms that aren't monopolists are duopolists: Google and Facebook absorbed 63% of online ad spending last year; Google and Apple Inc. provide 99% of mobile phone operating systems; while Apple and Microsoft Corp. supply 95% of desktop operating systems.
A growing number of critics think these tech giants need to be broken up or regulated as Standard Oil and AT&T once were. Their alleged sins run the gamut from disseminating fake news and fostering addiction to laying waste to small towns' shopping districts. But antitrust regulators have a narrow test: Does their size leave consumers worse off?
That may not be true in the future: if market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. "The impact on innovation can be the most important competitive effect" in an antitrust case, says Fiona Scott Morton, a Yale University economist who served in the Justice Department's antitrust division under Barack Obama.
The Ip article can be found behind a paywall at https://www.wsj.com/articles/the-antitrust-case-against-facebook-google-amazon-and-apple-1516121561
The article is available without a subscription at http://www.foxbusiness.com/features/2018/01/16/antitrust-case-against-facebook-google-2.html
Greg Ip has made several TV appearances to discuss his article. A video of his appearance on Fox News is here:
https://eblnews.com/video/antitrust-action-looms-over-techs-biggest-names-307425
The Greg Ip article is remarkable for another reason. It demonstrates that competition policy arguments raising concerns about Google and similar companies are no longer evangelical exhortations of a few. The idea that Google and Facebook can be harmful in a manner analogous to Standard Oil and AT&T in the past and be targets for future regulation has become mainstream, at least for those who would read the Wall Street Journal or watch Fox Business News.
The mainstream attention to market power issues concerning tech companies with product prices of zero is a reminder to antitrust insiders that antitrust law is not just something chiseled in stone in Chicago some time ago, or just the ideas that practicing lawyers can take to court today. Market power issues are public policy, and have a political dimension. What the public thinks about competition policy issues will influence future government action.
Some may think that discussions that touch on aspects of competition policy and antitrust with political overtones are "claptrap," either because they prefer that antitrust be static rather than dynamic, or they believe that antitrust and competition policy should exist in separate worlds. The Greg Ip article suggests that such retrograde views will not stop the progress of public debate of competition policy issues.
Posted by Don Allen Resnikoff, who takes personal responsibility for the content.
Greg Ip's front page Wall Street Journal article is remarkable for several reasons. One is that it is good journalism: The introductory paragraphs offer some of the flavor of the piece:
Standard Oil and Co. and American Telephone and Telegraph Co. were the technological titans of their day, commanding more than 80% of their markets.
Today's tech giants are just as dominant: In the U.S., Alphabet Inc.'s Google drives 89% of internet search; 95% of young adults on the internet use a Facebook Inc. product; and Amazon.com Inc. now accounts for 75% of electronic book sales. Those firms that aren't monopolists are duopolists: Google and Facebook absorbed 63% of online ad spending last year; Google and Apple Inc. provide 99% of mobile phone operating systems; while Apple and Microsoft Corp. supply 95% of desktop operating systems.
A growing number of critics think these tech giants need to be broken up or regulated as Standard Oil and AT&T once were. Their alleged sins run the gamut from disseminating fake news and fostering addiction to laying waste to small towns' shopping districts. But antitrust regulators have a narrow test: Does their size leave consumers worse off?
That may not be true in the future: if market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. "The impact on innovation can be the most important competitive effect" in an antitrust case, says Fiona Scott Morton, a Yale University economist who served in the Justice Department's antitrust division under Barack Obama.
The Ip article can be found behind a paywall at https://www.wsj.com/articles/the-antitrust-case-against-facebook-google-amazon-and-apple-1516121561
The article is available without a subscription at http://www.foxbusiness.com/features/2018/01/16/antitrust-case-against-facebook-google-2.html
Greg Ip has made several TV appearances to discuss his article. A video of his appearance on Fox News is here:
https://eblnews.com/video/antitrust-action-looms-over-techs-biggest-names-307425
The Greg Ip article is remarkable for another reason. It demonstrates that competition policy arguments raising concerns about Google and similar companies are no longer evangelical exhortations of a few. The idea that Google and Facebook can be harmful in a manner analogous to Standard Oil and AT&T in the past and be targets for future regulation has become mainstream, at least for those who would read the Wall Street Journal or watch Fox Business News.
The mainstream attention to market power issues concerning tech companies with product prices of zero is a reminder to antitrust insiders that antitrust law is not just something chiseled in stone in Chicago some time ago, or just the ideas that practicing lawyers can take to court today. Market power issues are public policy, and have a political dimension. What the public thinks about competition policy issues will influence future government action.
Some may think that discussions that touch on aspects of competition policy and antitrust with political overtones are "claptrap," either because they prefer that antitrust be static rather than dynamic, or they believe that antitrust and competition policy should exist in separate worlds. The Greg Ip article suggests that such retrograde views will not stop the progress of public debate of competition policy issues.
Posted by Don Allen Resnikoff, who takes personal responsibility for the content.
AAI Digital Platforms Roundtable
DATE: MARCH 22, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DC
Questions about the efficacy of the antitrust laws in overseeing large technology platforms are a prominent theme in public policy discourse. Many advocates contend that the antitrust laws are fully able to handle anticompetitive conduct or mergers that may arise in digital markets. Others question whether the existing laws and the prevailing consumer welfare standard are up to this important task.
AAI’s Digital Platforms Roundtable will address the growth of digital platforms and advance the state of thinking about competition in this important domain. The Roundtable will explore the central question: What does an analysis of digital platforms under the antitrust laws look like?
The Roundtable will bring together experts in competition law from government, industry, academia, and the public interest community. They will participate in discussions about the elements of antitrust approaches to mergers and strategic competitive conduct and advance the debate on the applicability of the antitrust laws to digital platforms. The half-day program will include opening remarks, two panels, and a roundtable discussion.
More information: http://www.antitrustinstitute.org/events/aai-digital-platforms-roundtable
DATE: MARCH 22, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DC
Questions about the efficacy of the antitrust laws in overseeing large technology platforms are a prominent theme in public policy discourse. Many advocates contend that the antitrust laws are fully able to handle anticompetitive conduct or mergers that may arise in digital markets. Others question whether the existing laws and the prevailing consumer welfare standard are up to this important task.
AAI’s Digital Platforms Roundtable will address the growth of digital platforms and advance the state of thinking about competition in this important domain. The Roundtable will explore the central question: What does an analysis of digital platforms under the antitrust laws look like?
The Roundtable will bring together experts in competition law from government, industry, academia, and the public interest community. They will participate in discussions about the elements of antitrust approaches to mergers and strategic competitive conduct and advance the debate on the applicability of the antitrust laws to digital platforms. The half-day program will include opening remarks, two panels, and a roundtable discussion.
More information: http://www.antitrustinstitute.org/events/aai-digital-platforms-roundtable
From DMN: 117 Colorado Cities & Counties Have Voted In Favor of Locally-Owned ISPs
Paul Resnikoff
January 17, 2018
Tech giants, Democrats in Congress, and more than 22 states are fighting the FCC to protect net neutrality. But the most powerful weapon could be municipal governments themselves. The FCC has been criticized for gutting net neutrality despite overwhelming demand to protect it. Even worse, FCC commissioner Ajit Pai has been assailed by accusations of cronyism and corruption, especially given his strong ties to mega-ISP Verizon.
But what if ISPs weren’t so easily controlled by the FCC?
Enter the State of Colorado, which could become ground zero for the net neutrality resistance. Earlier this month, the municipality of Fort Collins, CO approved a $150 million budget to initiate a homegrown, locally-controlled ISP network. That homegrown ISP, in turn, would determine rules like net neutrality, not to mention fees charged to its citizens.
But that looks like the tip of the iceberg.
Fort Collins is just one of dozens of municipalities in Colorado that voted to protect their ability to create a local ISP.
Amazingly, municipal internet networks are illegal in Colorado. Back in 2005, Senate Bill 152 was passed. It made it illegal to use taxpayer dollars to construct a local broadband network. Of course, that bill was largely created by the lobbying efforts of major ISPs like Comcast and CenturyLink, both entrenched Colorado broadband providers.
Now, a total of 117 communities within Colorado have successfully voted against Senate Bill 152. As a result, they have protected their ability to develop their own broadband networks.
Last November, as the FCC prepared to gut net neutrality, another 19 joined the group. Fort Collins is simply one of the first communities to seriously act on that right.
According to the Institute for Local Self-Reliance, the latest batch of votes were a landslide. More than 83 percent of voters wanted out of Senate Bill 152 in the November round. “These cities and counties recognize that they cannot count on Comcast and CenturyLink alone to meet local needs, which is why you see overwhelming support even in an off-year election,” said Christopher Mitchell, director of the Community Broadband Networks initiative at the Institute for Local Self-Reliance.
All of which spells a major problem for entrenched ISPs — in Colorado and beyond. Instead of enjoying outright monopolies and elevated rates, the presence of a local ‘utility ISP’ spells serious competition.
The biggest reason is that a municipally-created ISP is designed to meet the needs of its citizens, both in terms of service and price. That means that if a local community wants net neutrality and affordable speeds, then the locally-created network will strive to deliver just that.
It also means that citizens less capable of paying for internet access have a greater chance of receiving it.
Actually, there’s another Colorado municipality that offers its own broadband. Back in 2011, the town of Longmont started offering a high-speed, 1 gigabyte/second service for $49.95. That crushed the next competitor, which offers a 20Mbps connection.
As of last summer, the Longmont service had 90,000 takers. That’s more than half of all residents, according to the city.
So who’s next?
Importantly, voting against Senate Bill 152 merely gives cities and counties the right to build their own networks. But given enough outcry over issues like net neutrality, bad service, and high prices, it’s likely a few other homegrown ISPs will appear in the coming months and years.
Source: https://www.digitalmusicnews.com/2018/01/17/colorado-municipalities-net-neutrality/
New York and Connecticut sue EPA in New York federal court for failing to meet a Clean Air Act deadline for curbing smog pollution from other states
States Complaint: https://www.law360.com/articles/1002928/attachments/0
Law 360 article (paywall): https://www.law360.com/energy/articles/1002928/ny-conn-sue-epa-over-lax-upwind-smog-enforcement?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
States Complaint: https://www.law360.com/articles/1002928/attachments/0
Law 360 article (paywall): https://www.law360.com/energy/articles/1002928/ny-conn-sue-epa-over-lax-upwind-smog-enforcement?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
States, environmental groups asked the D.C. Circuit to restart litigation over Government Clean Power Plan
EPA asks to hold case in suspense.
States brief:
https://www.law360.com/articles/1002846/attachments/0
Environmental organizations brief:
https://www.law360.com/articles/1002846/attachments/1
Law 360 article (paywall) at https://www.law360.com/energy/articles/1002846/states-oppose-epa-bid-for-time-in-clean-power-plan-row?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
EPA asks to hold case in suspense.
States brief:
https://www.law360.com/articles/1002846/attachments/0
Environmental organizations brief:
https://www.law360.com/articles/1002846/attachments/1
Law 360 article (paywall) at https://www.law360.com/energy/articles/1002846/states-oppose-epa-bid-for-time-in-clean-power-plan-row?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
The legal fight against the Federal Communications Commission’s recent repeal of so-called net neutrality regulations began on Tuesday [1/16], with a flurry of lawsuits filed to block the agency’s action
One suit, filed by 21 state attorneys general, said the agency’s actions broke federal law. The commission’s rollback of net neutrality rules were “arbitrary and capricious,” the attorneys general said, and a reversal of the agency’s longstanding policy to prevent internet service providers from blocking or charging websites for faster delivery of content to consumers.
Mozilla, the nonprofit organization behind the Firefox web browser, said the new F.C.C. rules would harm internet entrepreneurs who could be forced to pay fees for faster delivery of their content and services to consumers. A similar argument was made by another group that filed a suit, the Open Technology Institute, a part of a liberal think tank, the New America Foundation.
Suits were also filed on Tuesday by Free Press and Public Knowledge, two public interest groups. Four of the suits were filed in the United States Court of Appeals for the District of Columbia Circuit. The Free Press suit was filed in the United States Court of Appeals for the First Circuit.
From https://www.nytimes.com/2018/01/16/technology/net-neutrality-lawsuit-attorneys-general.html?dlbk=&emc=edit_dk_20180117&nl=dealbook&nlid=67075843&te=1&_r=0
One suit, filed by 21 state attorneys general, said the agency’s actions broke federal law. The commission’s rollback of net neutrality rules were “arbitrary and capricious,” the attorneys general said, and a reversal of the agency’s longstanding policy to prevent internet service providers from blocking or charging websites for faster delivery of content to consumers.
Mozilla, the nonprofit organization behind the Firefox web browser, said the new F.C.C. rules would harm internet entrepreneurs who could be forced to pay fees for faster delivery of their content and services to consumers. A similar argument was made by another group that filed a suit, the Open Technology Institute, a part of a liberal think tank, the New America Foundation.
Suits were also filed on Tuesday by Free Press and Public Knowledge, two public interest groups. Four of the suits were filed in the United States Court of Appeals for the District of Columbia Circuit. The Free Press suit was filed in the United States Court of Appeals for the First Circuit.
From https://www.nytimes.com/2018/01/16/technology/net-neutrality-lawsuit-attorneys-general.html?dlbk=&emc=edit_dk_20180117&nl=dealbook&nlid=67075843&te=1&_r=0
From Wolters-Kluwer AntitrustConnect Blog:
Three Antitrust Cases To Be Heard by High Court
(CLICK TITLE FOR LINK)
JEFFREY MAY
January 15, 2018
It’s shaping up to be a busy term for antitrust issues at the U.S. Supreme Court. The Court on January 12 decided to review a third antitrust case.
In the context of a price fixing action against foreign vitamin C manufacturers, the Court will consider “whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law” or must defer to the foreign government’s legal statement. Earlier this term, the justices agreed to weigh in on the appealability of a denial of state action immunity, and consider a joint state effort to challenge so-called “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands.
Foreign compulsion, comity. The most recent issue to be taken up by the Court involves a Second Circuit decision that vacated a district court judgment against Chinese vitamin C manufacturers for fixing prices. Animal Science Products and other U.S. purchasers of vitamin C alleged that Hebei Welcome Pharmaceutical and other Chinese manufacturers and exporters of vitamin C conspired to fix the price and supply of vitamin C sold to U.S. companies on the international market in violation of the Sherman Act. The federal district court in New York City rejected the defendants’ motion for judgment as a matter of law, ruling that that the doctrines of act of state and international comity did not bar plaintiffs’ suit. After a jury trial, the court entered judgment, awarding the plaintiffs approximately $147 million in damages and enjoining the defendants from engaging in future anticompetitive behavior.
In September 2016, the U.S. Court of Appeals in New York City vacated the judgment and reversed the order denying the manufacturers’ motion to dismiss. It said that the case presented the question of what laws and standards control when U.S. antitrust laws are violated by foreign companies that claim to be acting at the express direction or mandate of a foreign government. The appellate court addressed how a federal court should respond when a foreign government, through its official agencies, appears before that court and represents that it has compelled an action that resulted in the violation of U.S. antitrust laws.
The Second Circuit concluded, that because the Chinese government had filed a formal statement in the district court asserting that Chinese law required the defendants to set prices and reduce quantities of vitamin C sold abroad and because the manufacturers could not simultaneously comply with Chinese law and U.S. antitrust laws, the principles of international comity required the district court to abstain from exercising jurisdiction in this case.
Animal Science petitioned the Supreme Court for review, arguing that the Chinese government had mischaracterized its own law in asserting that the Chinese companies’ anti-competitive behavior was required by Chinese law. The petitioners pointed to statements that the manufacturers’ anti-competitive agreement was self-regulated and voluntarily adopted without government intervention.
The petition presented three questions for the Supreme Court: (1) whether the Second Circuit, in conflict with decisions of three courts of appeals, erred in exercising jurisdiction under 28 U.S.C. §1291 over a pre-trial order denying a motion to dismiss following a full trial on the merits; (2) whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law (as held by the Fifth, Sixth, Seventh, Eleventh, and D.C. Circuits), or whether a court is “bound to defer” to a foreign government’s legal statement, as a matter of international comity, whenever the foreign government appears before the court (as held by the opinion below in accord with the Ninth Circuit); and (3) whether a court may abstain from exercising jurisdiction on a case-by-case basis, as a matter of discretionary international comity, over an otherwise valid Sherman Antitrust Act claim involving purely domestic injury.
The Court said that it would consider the second question presented. The U.S. Solicitor General filed an amicus brief in November 2017, arguing that the Court should grant the petition solely on the question of whether a federal court determining foreign law under Fed. R. Civ. P. 44.1 is required to treat as conclusive a submission from the foreign government characterizing its own law. The Solicitor General argued that a foreign government’s characterization of its own law is entitled to substantial weight, but was not conclusive. The government said that the case raised an important and recurring issue (Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd., Dkt. 16-1220).
State action immunity. The Supreme Court also agreed to review of a decision of the U.S. Court of Appeals in San Francisco rejecting an interlocutory appeal of a federal district court order denying a motion to dismiss monopolization charges on state action immunity grounds
because the collateral order doctrine did not allow immediate appeal of such an order as it was not considered a final decision.
The petition for certiorari asks whether orders denying state action immunity to public entities are immediately appealable under the collateral-order doctrine and highlights a split among the circuits on this issue. The Fifth and Eleventh Circuits have held that state action immunity is an immunity against suit rather than a mere defense against liability, and concluded that if a denial of state action immunity cannot be appealed immediately, then in effect it cannot be appealed at all. The Fourth and Sixth Circuits, and the Ninth Circuit in this case, have held that the interlocutory denial of state action immunity to a public entity is not immediately appealable (SolarCity Corp. v. Salt River Project Agricultural Improvement and Power District, Dkt. 17-368).
Anti-steering rules. In October 2017, the Court granted a petition brought by 11 states seeking a review of a Second Circuit ruling that the Department of Justice and the states failed to prove that “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands violated Section 1 of the Sherman Act.
In 2010, the Justice Department and 17 states filed suit against the country’s three largest credit and charge card transaction networks. A February 2015 decision of the federal district court in Brooklyn, New York, in favor of the Justice Department and the states, and an order prohibiting American Express (AmEx) from enforcing these nondiscriminatory provisions (NDPs) in contracts with merchants, were reversed and remanded by the Second Circuit in September 2016, with instructions to enter judgment in favor of AmEx.
The petition asked: “Under the ‘rule of reason,’ did the government’s showing that AmEx’s anti-steering provisions stifled price competition on the merchant side of the credit-card platform suffice to prove anticompetitive effects and thereby shift the burden of establishing any procompetitive benefits from the provisions?”
The Justice Department declined to participate in the appeal and initially asked the Supreme Court to reject the states’ petition, arguing that the case does not satisfy the Court’s traditional certiorari standards. While the Justice Department agreed with the states that the district court’s findings established a prima facie case that the anti-steering rules unreasonably restrain trade, and that the Second Circuit had erred in holding otherwise, it nevertheless argued against the Supreme Court taking the cases. Specifically, the Justice Department argued that the decision was based almost entirely on the “two-sided” nature of the credit-card industry, and neither the Supreme Court nor any other circuit had squarely considered the application of the antitrust laws to two-sided platforms, as such.
After the Court agreed to hear the case, the Justice Department filed a brief, contending that the Court should vacate the judgment holding that the government failed to establish a prima facie case. On remand, the appellate court could consider any challenges that Amex properly preserved to the district court’s holding that Amex failed to establish
sufficient procompetitive justifications for the anti-steering rules, according to the Justice Department.
The case is set for argument on February 26, 2018 (State of Ohio v. American ExpressCompany, Dkt. 16-1454).
Three Antitrust Cases To Be Heard by High Court
(CLICK TITLE FOR LINK)
JEFFREY MAY
January 15, 2018
It’s shaping up to be a busy term for antitrust issues at the U.S. Supreme Court. The Court on January 12 decided to review a third antitrust case.
In the context of a price fixing action against foreign vitamin C manufacturers, the Court will consider “whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law” or must defer to the foreign government’s legal statement. Earlier this term, the justices agreed to weigh in on the appealability of a denial of state action immunity, and consider a joint state effort to challenge so-called “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands.
Foreign compulsion, comity. The most recent issue to be taken up by the Court involves a Second Circuit decision that vacated a district court judgment against Chinese vitamin C manufacturers for fixing prices. Animal Science Products and other U.S. purchasers of vitamin C alleged that Hebei Welcome Pharmaceutical and other Chinese manufacturers and exporters of vitamin C conspired to fix the price and supply of vitamin C sold to U.S. companies on the international market in violation of the Sherman Act. The federal district court in New York City rejected the defendants’ motion for judgment as a matter of law, ruling that that the doctrines of act of state and international comity did not bar plaintiffs’ suit. After a jury trial, the court entered judgment, awarding the plaintiffs approximately $147 million in damages and enjoining the defendants from engaging in future anticompetitive behavior.
In September 2016, the U.S. Court of Appeals in New York City vacated the judgment and reversed the order denying the manufacturers’ motion to dismiss. It said that the case presented the question of what laws and standards control when U.S. antitrust laws are violated by foreign companies that claim to be acting at the express direction or mandate of a foreign government. The appellate court addressed how a federal court should respond when a foreign government, through its official agencies, appears before that court and represents that it has compelled an action that resulted in the violation of U.S. antitrust laws.
The Second Circuit concluded, that because the Chinese government had filed a formal statement in the district court asserting that Chinese law required the defendants to set prices and reduce quantities of vitamin C sold abroad and because the manufacturers could not simultaneously comply with Chinese law and U.S. antitrust laws, the principles of international comity required the district court to abstain from exercising jurisdiction in this case.
Animal Science petitioned the Supreme Court for review, arguing that the Chinese government had mischaracterized its own law in asserting that the Chinese companies’ anti-competitive behavior was required by Chinese law. The petitioners pointed to statements that the manufacturers’ anti-competitive agreement was self-regulated and voluntarily adopted without government intervention.
The petition presented three questions for the Supreme Court: (1) whether the Second Circuit, in conflict with decisions of three courts of appeals, erred in exercising jurisdiction under 28 U.S.C. §1291 over a pre-trial order denying a motion to dismiss following a full trial on the merits; (2) whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law (as held by the Fifth, Sixth, Seventh, Eleventh, and D.C. Circuits), or whether a court is “bound to defer” to a foreign government’s legal statement, as a matter of international comity, whenever the foreign government appears before the court (as held by the opinion below in accord with the Ninth Circuit); and (3) whether a court may abstain from exercising jurisdiction on a case-by-case basis, as a matter of discretionary international comity, over an otherwise valid Sherman Antitrust Act claim involving purely domestic injury.
The Court said that it would consider the second question presented. The U.S. Solicitor General filed an amicus brief in November 2017, arguing that the Court should grant the petition solely on the question of whether a federal court determining foreign law under Fed. R. Civ. P. 44.1 is required to treat as conclusive a submission from the foreign government characterizing its own law. The Solicitor General argued that a foreign government’s characterization of its own law is entitled to substantial weight, but was not conclusive. The government said that the case raised an important and recurring issue (Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd., Dkt. 16-1220).
State action immunity. The Supreme Court also agreed to review of a decision of the U.S. Court of Appeals in San Francisco rejecting an interlocutory appeal of a federal district court order denying a motion to dismiss monopolization charges on state action immunity grounds
because the collateral order doctrine did not allow immediate appeal of such an order as it was not considered a final decision.
The petition for certiorari asks whether orders denying state action immunity to public entities are immediately appealable under the collateral-order doctrine and highlights a split among the circuits on this issue. The Fifth and Eleventh Circuits have held that state action immunity is an immunity against suit rather than a mere defense against liability, and concluded that if a denial of state action immunity cannot be appealed immediately, then in effect it cannot be appealed at all. The Fourth and Sixth Circuits, and the Ninth Circuit in this case, have held that the interlocutory denial of state action immunity to a public entity is not immediately appealable (SolarCity Corp. v. Salt River Project Agricultural Improvement and Power District, Dkt. 17-368).
Anti-steering rules. In October 2017, the Court granted a petition brought by 11 states seeking a review of a Second Circuit ruling that the Department of Justice and the states failed to prove that “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands violated Section 1 of the Sherman Act.
In 2010, the Justice Department and 17 states filed suit against the country’s three largest credit and charge card transaction networks. A February 2015 decision of the federal district court in Brooklyn, New York, in favor of the Justice Department and the states, and an order prohibiting American Express (AmEx) from enforcing these nondiscriminatory provisions (NDPs) in contracts with merchants, were reversed and remanded by the Second Circuit in September 2016, with instructions to enter judgment in favor of AmEx.
The petition asked: “Under the ‘rule of reason,’ did the government’s showing that AmEx’s anti-steering provisions stifled price competition on the merchant side of the credit-card platform suffice to prove anticompetitive effects and thereby shift the burden of establishing any procompetitive benefits from the provisions?”
The Justice Department declined to participate in the appeal and initially asked the Supreme Court to reject the states’ petition, arguing that the case does not satisfy the Court’s traditional certiorari standards. While the Justice Department agreed with the states that the district court’s findings established a prima facie case that the anti-steering rules unreasonably restrain trade, and that the Second Circuit had erred in holding otherwise, it nevertheless argued against the Supreme Court taking the cases. Specifically, the Justice Department argued that the decision was based almost entirely on the “two-sided” nature of the credit-card industry, and neither the Supreme Court nor any other circuit had squarely considered the application of the antitrust laws to two-sided platforms, as such.
After the Court agreed to hear the case, the Justice Department filed a brief, contending that the Court should vacate the judgment holding that the government failed to establish a prima facie case. On remand, the appellate court could consider any challenges that Amex properly preserved to the district court’s holding that Amex failed to establish
sufficient procompetitive justifications for the anti-steering rules, according to the Justice Department.
The case is set for argument on February 26, 2018 (State of Ohio v. American ExpressCompany, Dkt. 16-1454).
French prosecutor launches probe into Apple planned obsolescence: judicial source
Reuters Staff
PARIS (Reuters) - A French prosecutor has launched a preliminary investigation of U.S. tech giant Apple (AAPL.O) over alleged deception and planned obsolescence of its products following a complaint by a consumer organization, a judicial source said on Monday.
The investigation, opened on Friday, will be led by French consumer fraud watchdog DGCCRF, part of the Economy Ministry, the source said.
Apple acknowledged last month that it takes some measures to reduce power demands - which can have the effect of slowing the processor - in some older iPhone models when a phone’s battery is having trouble supplying the peak current that the processor demands.
The French watchdog’s preliminary investigation could take months, and depending on its findings, the case could be dropped or handed to a judge for an in-depth investigation.
Under French law, companies risk fines of up to 5 percent of their annual sales for deliberately shortening the life of their products to spur demand to replace them.
An Apple spokeswoman in the United States declined to comment on the French investigation, pointing to a Dec. 28 statement in which the company apologized over its handling of the battery issue and said it would never do anything to intentionally shorten the life of any Apple product.
An Apple spokesman in France could not immediately be reached for comment.
* * * *
A French consumer association called “HOP” -- standing for “Stop Planned Obsolescence” -- filed a legal complaint against Apple.
Apple already faces lawsuits in the United States over accusations of defrauding iPhone users by slowing down devices without warning to compensate for poor battery performance.
Apple also said on Dec. 28 it was slashing prices for battery replacements and would change its software to show users whether their phone battery was good.
Reporting by Yann Le Guernigou; Additional reporting by Stephen Nellis in San Francisco; Writing by Bate Felix; Editing by Adrian Croft
From: https://www.reuters.com/article/us-apple-france-investigation/french-prosecutor-launches-probe-into-apple-planned-obsolescence-judicial-source-idUSKBN1EX27V
Reuters Staff
PARIS (Reuters) - A French prosecutor has launched a preliminary investigation of U.S. tech giant Apple (AAPL.O) over alleged deception and planned obsolescence of its products following a complaint by a consumer organization, a judicial source said on Monday.
The investigation, opened on Friday, will be led by French consumer fraud watchdog DGCCRF, part of the Economy Ministry, the source said.
Apple acknowledged last month that it takes some measures to reduce power demands - which can have the effect of slowing the processor - in some older iPhone models when a phone’s battery is having trouble supplying the peak current that the processor demands.
The French watchdog’s preliminary investigation could take months, and depending on its findings, the case could be dropped or handed to a judge for an in-depth investigation.
Under French law, companies risk fines of up to 5 percent of their annual sales for deliberately shortening the life of their products to spur demand to replace them.
An Apple spokeswoman in the United States declined to comment on the French investigation, pointing to a Dec. 28 statement in which the company apologized over its handling of the battery issue and said it would never do anything to intentionally shorten the life of any Apple product.
An Apple spokesman in France could not immediately be reached for comment.
* * * *
A French consumer association called “HOP” -- standing for “Stop Planned Obsolescence” -- filed a legal complaint against Apple.
Apple already faces lawsuits in the United States over accusations of defrauding iPhone users by slowing down devices without warning to compensate for poor battery performance.
Apple also said on Dec. 28 it was slashing prices for battery replacements and would change its software to show users whether their phone battery was good.
Reporting by Yann Le Guernigou; Additional reporting by Stephen Nellis in San Francisco; Writing by Bate Felix; Editing by Adrian Croft
From: https://www.reuters.com/article/us-apple-france-investigation/french-prosecutor-launches-probe-into-apple-planned-obsolescence-judicial-source-idUSKBN1EX27V
Sally Hubbard on the connection between market power issues and fake news problems
Excerpt:
I. INTRODUCTION
The public and political outcry over fake news — and what to do about it — has generated abundant commentary. Yet few commentators have focused on how concentrated market power in online platforms contributes to the crisis. This essay expands on my view, originally set forth in Washington Bytes in January, that fake news is, in part, an antitrust problem.2
Fake news can be challenging to define. In this essay, fake news means stories that are simply made up for profit or propaganda without using trained journalists, conducting research or expending resources. Articles written according to journalistic practices from a particular political perspective or containing factual errors do not meet the definition of fake news used here.
This essay will explore two primary reasons why fake news is an antitrust problem.
First, Facebook and Google compete against legitimate news publishers for user attention, data and advertising dollars. The tech platforms’ business incentives run counter to the interests of legitimate news publishers, and the platforms pull technological levers that harm publishers’ business models and advantage their own. Such levers keep users within Facebook’s and Google’s digital walls and reduce traffic to news publishers’ properties, depriving publishers of the revenue essential to fund legitimate journalism and to counter fake news.
Second, Facebook and Google lack meaningful competition in their primary spheres of social media and online search, respectively. As a result, their algorithms have an outsized impact on the flow of information, and fake news purveyors can deceive hundreds of millions of users simply by gaming a single algorithm. Weak competition in social media platforms means Facebook can tailor its news feed to serve its financial interests, prioritizing engagement on the platform over veracity. Lack of competition in online search means Google does not face competitive pressure to drastically change its algorithm to stem the spread of fake news. Consumers and advertisers unhappy about the spread of fake news on Facebook and Google, or publishers dissatisfied with the two platforms’ terms of dealing, have limited options for taking their business elsewhere. If eliminating fake news were necessary to keep users, advertisers and content creators from defecting to competitive platforms – if profits were at stake – Facebook and Google would find a way to truly fix the problem.3
Facebook and Google, like all corporations, have fiduciary duties to maximize profits for their shareholders. Distinguishing content based on quality or veracity runs counter to the platforms’ profit motives because any content they cannot advertise around is a lost revenue opportunity. And because fake news is more likely to gain attention and foster engagement, it better serves both platforms’ advertising-based business models. The problem is not that Facebook and Google are bad corporations, as corporations are designed to place profits over socio-political concerns, even democracy. The problem rather is that the normal checks and balances of a free, competitive market do not constrain Facebook and Google from pursuing profits.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2017/12/CPI-Hubbard.pdf
Excerpt:
I. INTRODUCTION
The public and political outcry over fake news — and what to do about it — has generated abundant commentary. Yet few commentators have focused on how concentrated market power in online platforms contributes to the crisis. This essay expands on my view, originally set forth in Washington Bytes in January, that fake news is, in part, an antitrust problem.2
Fake news can be challenging to define. In this essay, fake news means stories that are simply made up for profit or propaganda without using trained journalists, conducting research or expending resources. Articles written according to journalistic practices from a particular political perspective or containing factual errors do not meet the definition of fake news used here.
This essay will explore two primary reasons why fake news is an antitrust problem.
First, Facebook and Google compete against legitimate news publishers for user attention, data and advertising dollars. The tech platforms’ business incentives run counter to the interests of legitimate news publishers, and the platforms pull technological levers that harm publishers’ business models and advantage their own. Such levers keep users within Facebook’s and Google’s digital walls and reduce traffic to news publishers’ properties, depriving publishers of the revenue essential to fund legitimate journalism and to counter fake news.
Second, Facebook and Google lack meaningful competition in their primary spheres of social media and online search, respectively. As a result, their algorithms have an outsized impact on the flow of information, and fake news purveyors can deceive hundreds of millions of users simply by gaming a single algorithm. Weak competition in social media platforms means Facebook can tailor its news feed to serve its financial interests, prioritizing engagement on the platform over veracity. Lack of competition in online search means Google does not face competitive pressure to drastically change its algorithm to stem the spread of fake news. Consumers and advertisers unhappy about the spread of fake news on Facebook and Google, or publishers dissatisfied with the two platforms’ terms of dealing, have limited options for taking their business elsewhere. If eliminating fake news were necessary to keep users, advertisers and content creators from defecting to competitive platforms – if profits were at stake – Facebook and Google would find a way to truly fix the problem.3
Facebook and Google, like all corporations, have fiduciary duties to maximize profits for their shareholders. Distinguishing content based on quality or veracity runs counter to the platforms’ profit motives because any content they cannot advertise around is a lost revenue opportunity. And because fake news is more likely to gain attention and foster engagement, it better serves both platforms’ advertising-based business models. The problem is not that Facebook and Google are bad corporations, as corporations are designed to place profits over socio-political concerns, even democracy. The problem rather is that the normal checks and balances of a free, competitive market do not constrain Facebook and Google from pursuing profits.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2017/12/CPI-Hubbard.pdf
Industry complaints about Intel chips followed by class action filings
Meltdown and Spectre exploit an architectural flaw with the way processors handle speculative execution, a technique that most modern CPUs use to increase speed. Both classes of vulnerability could expose protected kernel memory, potentially allowing hackers to gain access to the inner workings of any unpatched system or penetrate security measures. The flaw can’t be fixed with a microcode update, meaning that developers for major OSes and platforms have had to devise workarounds that could seriously hurt performance.
In an email to a Linux list this week, Torvalds questioned the competence of Intel engineers and suggested that they were knowingly selling flawed products to the public. He also seemed particularly irritated that users could expect a five to 30 percent projected performance hit from the fixes.
“I think somebody inside of Intel needs to really take a long hard look at their CPU’s, and actually admit that they have issues instead of writing PR blurbs that say that everything works as designed,” Torvalds wrote. “.. and that really means that all these mitigation patches should be written with ‘not all CPU’s are crap’ in mind.”
“Or is Intel basically saying ‘we are committed to selling you shit forever and ever, and never fixing anything’?” he added. “Because if that’s the case, maybe we should start looking towards the ARM64 people more.”
“Please talk to management,” Torvalds concluded. “Because I really see exactly two possibibilities:—Intel never intends to fix anything OR—these workarounds should have a way to disable them. Which of the two is it?”
As Business Insider noted, as the person in charge of the open-source Linux kernel, Torvalds may be freer to share his opinion on Intel’s explanation for the issue than engineers working for the company’s business partners. Intel is currently being hit by a series of class action lawsuits citing the flaws and its handling of the security disclosure.
From: https://gizmodo.com/linus-torvalds-is-not-happy-about-intels-meltdown-and-s-1821845198
A copy of a California class action filing complaining about recent Intel CPU chip defects is here: https://images.law.com/contrib/content/uploads/documents/403/8058/GarciavIntel.pdf
Meltdown and Spectre exploit an architectural flaw with the way processors handle speculative execution, a technique that most modern CPUs use to increase speed. Both classes of vulnerability could expose protected kernel memory, potentially allowing hackers to gain access to the inner workings of any unpatched system or penetrate security measures. The flaw can’t be fixed with a microcode update, meaning that developers for major OSes and platforms have had to devise workarounds that could seriously hurt performance.
In an email to a Linux list this week, Torvalds questioned the competence of Intel engineers and suggested that they were knowingly selling flawed products to the public. He also seemed particularly irritated that users could expect a five to 30 percent projected performance hit from the fixes.
“I think somebody inside of Intel needs to really take a long hard look at their CPU’s, and actually admit that they have issues instead of writing PR blurbs that say that everything works as designed,” Torvalds wrote. “.. and that really means that all these mitigation patches should be written with ‘not all CPU’s are crap’ in mind.”
“Or is Intel basically saying ‘we are committed to selling you shit forever and ever, and never fixing anything’?” he added. “Because if that’s the case, maybe we should start looking towards the ARM64 people more.”
“Please talk to management,” Torvalds concluded. “Because I really see exactly two possibibilities:—Intel never intends to fix anything OR—these workarounds should have a way to disable them. Which of the two is it?”
As Business Insider noted, as the person in charge of the open-source Linux kernel, Torvalds may be freer to share his opinion on Intel’s explanation for the issue than engineers working for the company’s business partners. Intel is currently being hit by a series of class action lawsuits citing the flaws and its handling of the security disclosure.
From: https://gizmodo.com/linus-torvalds-is-not-happy-about-intels-meltdown-and-s-1821845198
A copy of a California class action filing complaining about recent Intel CPU chip defects is here: https://images.law.com/contrib/content/uploads/documents/403/8058/GarciavIntel.pdf
- Internet Association: Statement Announcing Intention To Intervene In Judicial Action To Preserve Net Neutrality Protections
Washington, DC -- Internet Association President & CEO Michael Beckerman issued the following statement on the publication of the “Restoring Internet Freedom Order” that will gut net neutrality protections for consumers, startups, and other stakeholders:
“The final version of Chairman Pai’s rule, as expected, dismantles popular net neutrality protections for consumers. This rule defies the will of a bipartisan majority of Americans and fails to preserve a free and open internet. IA intends to act as an intervenor in judicial action against this order and, along with our member companies, will continue our push to restore strong, enforceable net neutrality protections through a legislative solution.”
A longer statement of the Internet Association position is here:
https://internetassociation.org/reports/an-empirical-investigation-of-the-impacts-of-net-neutrality/
A judge has given preliminary approval of a class-action settlement with Southwest Airlines for $15 million and “significant cooperation” in proving a cartel case against co-defendants American, Delta and United airlines
The Court order is here, through ABA Journal: www.abajournal.com/images/main_images/Preliminary_Settlement.pdf
The lawsuit alleges that the nation’s top four carriers “participated in an unlawful conspiracy” to artificially hold down passenger capacity to increase fare prices.
Southwest was the first defendant to settle in this case, which was consolidated from 103 actions from around the country, according to a court order from December 2015, and is being heard in the U.S. District Court for the District of Columbia.
The Court order is here, through ABA Journal: www.abajournal.com/images/main_images/Preliminary_Settlement.pdf
The lawsuit alleges that the nation’s top four carriers “participated in an unlawful conspiracy” to artificially hold down passenger capacity to increase fare prices.
Southwest was the first defendant to settle in this case, which was consolidated from 103 actions from around the country, according to a court order from December 2015, and is being heard in the U.S. District Court for the District of Columbia.
From Public Citizen Consumer Law & Policy Blog:
Bank Trade Group Fears Industry Will Capture CFPB
Posted: 05 Jan 2018 11:22 AM PST
by Jeff Sovern
Camden R. Fine is the president and CEO of the Independent Community Bankers of America, a trade group for community bankers. The American Banker recently published his op-ed, Don’t let a credit union regulator run the CFPB, opposing the candidacy of National Credit Union Administration Chairman J. Mark McWatters to head the CFPB. Here's an excerpt:
[A]mid concerns that the CFPB lacks sufficient checks on its regulatory authority, the NCUA’s willingness to flout Congress in its rulemakings makes its chairman suspect for leading the bureau. McWatters and others at the NCUA have been strident advocates for expanding the credit union charter far beyond what Congress intended when it established the industry in the 1930s.
* * *
The CFPB should not be led by the head of an agency that has acted as a cheerleader for the industry under its oversight.
* * *
if Washington is willing to settle for single-director governance at the CFPB, then let’s advance a director with meaningful experience in the full range of regulations for which the CFPB is responsible. And let’s choose a leader not with a track record of cheerleading for the industry he is charged with overseeing and regulating, but rather a commitment to the laws by which our agencies are established by Congress.
Mr. Fine should be commended for pointing out that regulatory capture is a problem, especially when it comes to the CFPB (Mr. Fine's position appears to be rooted in the fact that credit unions compete with community banks). Regulatory capture has been endemic among banking regulators, most notably at the OCC. Indeed, it was the fear of regulatory capture that prompted Congress to structure the CFPB the way it did. It would be great if the next CFPB director, whomever that person may be, avoids regulatory capture, not only by credit unions, but also by banks and other financial institutions. One place the president could look for a director who would be unlikely to be captured by the industry, of course, would be among consumer advocates. Yes, I know, but a person's reach should exceed his grasp, or what's a heaven for?
Bank Trade Group Fears Industry Will Capture CFPB
Posted: 05 Jan 2018 11:22 AM PST
by Jeff Sovern
Camden R. Fine is the president and CEO of the Independent Community Bankers of America, a trade group for community bankers. The American Banker recently published his op-ed, Don’t let a credit union regulator run the CFPB, opposing the candidacy of National Credit Union Administration Chairman J. Mark McWatters to head the CFPB. Here's an excerpt:
[A]mid concerns that the CFPB lacks sufficient checks on its regulatory authority, the NCUA’s willingness to flout Congress in its rulemakings makes its chairman suspect for leading the bureau. McWatters and others at the NCUA have been strident advocates for expanding the credit union charter far beyond what Congress intended when it established the industry in the 1930s.
* * *
The CFPB should not be led by the head of an agency that has acted as a cheerleader for the industry under its oversight.
* * *
if Washington is willing to settle for single-director governance at the CFPB, then let’s advance a director with meaningful experience in the full range of regulations for which the CFPB is responsible. And let’s choose a leader not with a track record of cheerleading for the industry he is charged with overseeing and regulating, but rather a commitment to the laws by which our agencies are established by Congress.
Mr. Fine should be commended for pointing out that regulatory capture is a problem, especially when it comes to the CFPB (Mr. Fine's position appears to be rooted in the fact that credit unions compete with community banks). Regulatory capture has been endemic among banking regulators, most notably at the OCC. Indeed, it was the fear of regulatory capture that prompted Congress to structure the CFPB the way it did. It would be great if the next CFPB director, whomever that person may be, avoids regulatory capture, not only by credit unions, but also by banks and other financial institutions. One place the president could look for a director who would be unlikely to be captured by the industry, of course, would be among consumer advocates. Yes, I know, but a person's reach should exceed his grasp, or what's a heaven for?
The American Law Institute is engaged in a project to draft a Restatement of Consumer Contracts that takes arguably limited views related to unconscionability
From an advocacy letter to the ALI signed by a number of consumer groups, including DCCRC:
We are writing to express our deep concerns regarding the current Council Draft of this proposed Restatement. If followed by courts, it would tilt the marketplace dramatically toward businesses at the expense of consumers. Instead of respecting precedent, it undermines the well-accepted factors that courts and legislatures have developed to determine whether contract terms are procedurally unconscionable, and replaces them with a theory spun out in a law review article that cites not a single judicial decision in its support.
We write as organizations that work to protect consumers from unfairness in the marketplace every day. We have a keen on-the-ground feel for how some businesses treat consumers fairly and reasonably and how other businesses do not. We are also painfully aware of the dearth of legal resources available to consumers to defend themselves from mistreatment by businesses. The combined legal resources available to assist consumers are very limited and are able to help very few people.
We have a number of concerns about the assent, addition of new terms, and modification of terms provisions (Sections 2-4). These sections take an extremely loose view of the terms to which the consumer has agreed. Moreover, the Draft would allow a business to insert new terms after the fact as long as the consumer was told beforehand that it might do so, and the consumer has an opportunity to review the new terms and either continue under the existing terms or terminate the contract. Notably, the consumer is not given the same right to impose new terms upon the business.
The Draft justifies these lenient standards for courts to construct consumer assent on the ground that the doctrines of unconscionability and deception will act as a counterbalance to predatory terms, abuse, and overreaching by businesses. The entire premise of this proposed Restatement is that the unconscionability and deception doctrines are essential to “police” the market in light of the permissive assent rules found throughout. However, Sections 5 and 6 of the Draft undermine rather than strengthen these doctrines.
There are four primary problems with the Draft’s approach: (1) the definitions of procedural and substantive unconscionability are too restrictive; (2) the Draft fails to state that unconscionability and deception can be raised affirmatively to challenge the specific terms or the contract as a whole; (3) the Draft severely limits the remedies available once a court finds a term or contract to be unconscionable or that the business engaged in deception; and 4) the Draft places the burden of proof on consumers even though only businesses have access to most of that proof. In sum, the proposed Restatement embodies an expressly preferential treatment of businesses over consumers.
I. The Draft Undermines the Critically Important Doctrine of Unconscionability
Restatements consist of three parts: the “black letter,” which is intended to be the essential law on the subject; the Comments, which are regarded as an integral part of the section to which they belong and are consulted in order to understand the background and rationale of the black letter and the details of its application; and the Reporters’ Notes, which are regarded as the product of the Reporters (not the Institute) and discuss the legal and other sources they relied upon in formulating the black letter and the comments.
The black letter of the current Draft states that a term is procedurally unconscionable—i.e. that consumer’s agreement to the term was obtained in an unconscionable way—when it causes unfair surprise or results from the lack of meaningful choice of the part of the consumer.
Section 5(b)(2).
We do not object to this general statement. However, the Restatement also proposes to abandon—or drastically recast—the well-accepted set of factors that courts use to determine procedural unconscionability: (1) the consumer’s lack of financial sophistication (including cognitive biases); (2) the business’s exploitation of consumer disadvantages; (3) unequal bargaining power; (4) the use of incomprehensible language; (5) high pressure tactics and misrepresentations; and (5) whether economic, social, or practical duress compelled a party to execute the contract.
Comment 6 and the Reporters’ Notes seek to replace this set of factors with a new concept, “salience.”
The Reporters’ Notes define a contract term as salient “if it can affect the contracting decisions of a substantial number of consumers,” and then take the remarkable position that, if a term can affect the contracting decisions of a substantial number of consumers, then the market will police the term and the courts need not evaluate whether it was imposed on the consumer in an unconscionable way. The Reporters, however, do not cite any judicial decisions that define or apply the concept of “salience” in the unconscionability context, and there is not one reported or unreported decision on Westlaw that takes this approach. Instead, the Reporters’ Comments appear to rely entirely on a law review article that spins out this theory, again without citing any judicial decisions that support it.
This attempt to inject an entirely new approach contravenes the methodology that ALI claims to follow of ascertaining the majority and minority rules, determining which rule is the better one, and providing the rationale for choosing it. But of greater concern is its unfounded reliance on the marketplace to prevent overreaching and unfairness toward consumers. Recent history, including the vast wave of irresponsible lending that caused the mortgage meltdown ten years ago, demonstrates that overreaching and unfairness flourish in the marketplace.
The Draft also expresses an overly restrictive standard for whether a contract term is substantively unconscionable. While Section 5(b)(1) states that a term is substantively unconscionable if it is “fundamentally unfair” or “unreasonably one-sided,” the Comments state that: “the doctrine is to be used only when the one-sidedness of a term in the contract is extreme.” This test sets an overly high standard. Many fine print terms in consumer contracts today are unreasonable and unfair, but might not be viewed as “unconscionable” under this definition. For example, a fine print $35 charge might not seem “fundamentally” unfair in isolation. But when a $35 charge is repeatedly imposed, is high when compared to the cost of the contract, exceeds the cost to the business that the charge is intended to offset, or is imposed repeatedly, the fee should be declared unreasonable and unfair even though a court might not find it “extreme.”
Moreover, non-mutual enforcement clauses—clauses that deny the consumer the right to a remedy that the business is allowed to invoke—were not added to the list of contract terms that are prima facie unconscionable in the text of Section 5. It is common for businesses to place non-mutual clauses in consumer contracts that allow the business to sue the consumer in court, but relegate the consumer to mandatory binding arbitration. Although court decisions are split on whether “one-sided” or “non-mutual” enforcement clauses are unconscionable in the arbitration context, the better rule is that they are prima facie substantively unconscionable. The role of a Restatement is to “propose the better rule and provide the rationale for choosing it.” The Draft’s failure to apply the presumption of substantive unconscionability to such clauses, whether or not they involve mandatory arbitration, also undermines the critical role that the unconscionability doctrine is supposed to contribute to the success of the Restatement’s approach.
II. The Draft Cripples the Enforcement of Unconscionability and Deception
Our second concern about the Draft’s approach to the unconscionability doctrine is the failure to provide for robust consumer enforcement. The unconscionability doctrine will provide little or no counterweight to the permissive assent rules if consumers can raise it only as defense to a lawsuit to enforce the contract. Traditionally, common law unconscionability could be raised only as a defense to an action brought against a consumer. A court could permit a suit seeking a declaration that a term or the contract is unconscionable if the suit does not seek damages or other affirmative relief. The black letter of this Draft does not address the limited enforcement options available to consumers. Neither the Comments nor Reporters’ Notes discuss any judicial rulings on this point. Enforcement of the doctrine of deception suffers the same fate.
In the context of state and federal statutory protections, optimal policing of marketplace behavior occurs when state, federal, and private attorneys are acting as cops on the beat. In the context of the common law, however, there is little or no governmental enforcement, leaving consumers and their attorneys to bear this burden. Consumers should not be put in the position of having to default on the contract and subject themselves to negative credit reporting in order to raise unconscionability or deception. Moreover, the threat of enforcement is insignificant and will not significantly affect market behavior if only a small percentage of consumers (those who default and are sued) can raise the issue. Businesses will be well aware that they have little to fear from consumers.
In light of these practical and legal restrictions to private enforcement found in this Draft, the pivotal roles that unconscionability and deception are called upon to play in policing the marketplace are severely undermined. To remedy this, the black letter of Sections 5 and 6 must include a provision stating that a consumer can raise unconscionability affirmatively and defensively by seeking a declaration that the contract is void in part or in its entirety, providing for restitution for the costs incurred by virtue of the void provisions, and allowing class action relief.
The current Draft addresses this critical question just in Comment 12 to Section 5 and Comment 7 to Section 6, not in the black letter. And the two Comments are entirely inadequate. They reject the use of these doctrines affirmatively except in the limited circumstance where the consumer paid an unconscionable fee and seeks to recover it.
III. The Draft Severely Limits Remedies Related to Unconscionability and Deception
The only remedies available in this Draft in the event of a finding of unconscionability or deception are found in Section 9. This Section instructs the courts to refuse to enforce the offending term or the contract or replace the offending provisions with other terms. These provisions, without more, do not realistically deter business overreaching at contract inception or police the marketplace after the fact. These remedies are especially feeble when considered in conjunction with the lack of affirmative enforcement, the burdens of proof imposed on consumers, and silence regarding standards of proof.
IV. The Drafts Fails to Address Burdens of Proof and Standards of Proof
The allocation of burdens of proof and the level of evidence the consumer must present to prove unconscionability and deception also reduce the effectiveness of the roles that these doctrines are supposed to play. According to the Draft, the consumer bears the initial burden of proving the elements of unconscionability. Businesses, however, have access to nearly all of the relevant evidence. For example, only businesses are “recording this call to for quality assurance,” and therefore control the recordings which would show that telemarketers pressure and deceive consumers into agreeing to bad deals. Only businesses draft the contracts and only they know “the commercial setting, purpose, and effect” of the terms they impose on consumers.
Regarding procedural unconscionability related to a contract term, the Draft takes the position that a consumer must show that the term did not affect the contracting decisions of a substantial group of consumers, i.e., the term is not salient. To meet this burden a consumer would have to commission a study of consumers—an unrealistic task for a consumer to perform given the cost involved. Such a study lacks validity in any event because, if conducted by consumers once unconscionability has become an issue, the study would take place well after consummation of the contract, rather than at the time of contracting. A prior draft added a Comment to Section 5 that placed the burden on the business to prove that the standard contract terms were presented in a way that affected consumers’ contracting decisions to rebut a finding of procedural unconscionability. It also addressed burdens related to substantive unconscionability. Council Draft No. 4 removed that Comment, taking a big step backwards.
Neither Section 5 nor Section 6 address the standard of proof a court should apply in cases raising these claims. In both contexts, the black letter should state that the standard of proof is preponderance of the evidence. The application of a stricter standard reduces the deterrence and policing role of these doctrines. This is especially so where the remedy is limited to unenforceability and replacement with a substitute term and deterrence damages are not available for business deception, as would be the case with common law fraud.
IV. Conclusion
Unfortunately, this Draft unnecessarily restricts the scope of procedural and substantive unconscionability, fails to provide that unconscionability and deception can be raised affirmatively, circumscribes the remedies available for violations of these doctrines well beyond what the general common law otherwise provides, and fails to address burdens and standards of proof. As a result, the Restatement collapses under the weight of “freedom to contract” due to the lack of any meaningful consumer protections.
For these reasons, we urge the Council to not approve this Draft. Thank you for your consideration.
Editor's note: The ALI proposal, if followed by the courts, would undermine protections of local law, including the law of the District of Columbia. We will explore articulating that concern in greater detail. DR
From an advocacy letter to the ALI signed by a number of consumer groups, including DCCRC:
We are writing to express our deep concerns regarding the current Council Draft of this proposed Restatement. If followed by courts, it would tilt the marketplace dramatically toward businesses at the expense of consumers. Instead of respecting precedent, it undermines the well-accepted factors that courts and legislatures have developed to determine whether contract terms are procedurally unconscionable, and replaces them with a theory spun out in a law review article that cites not a single judicial decision in its support.
We write as organizations that work to protect consumers from unfairness in the marketplace every day. We have a keen on-the-ground feel for how some businesses treat consumers fairly and reasonably and how other businesses do not. We are also painfully aware of the dearth of legal resources available to consumers to defend themselves from mistreatment by businesses. The combined legal resources available to assist consumers are very limited and are able to help very few people.
We have a number of concerns about the assent, addition of new terms, and modification of terms provisions (Sections 2-4). These sections take an extremely loose view of the terms to which the consumer has agreed. Moreover, the Draft would allow a business to insert new terms after the fact as long as the consumer was told beforehand that it might do so, and the consumer has an opportunity to review the new terms and either continue under the existing terms or terminate the contract. Notably, the consumer is not given the same right to impose new terms upon the business.
The Draft justifies these lenient standards for courts to construct consumer assent on the ground that the doctrines of unconscionability and deception will act as a counterbalance to predatory terms, abuse, and overreaching by businesses. The entire premise of this proposed Restatement is that the unconscionability and deception doctrines are essential to “police” the market in light of the permissive assent rules found throughout. However, Sections 5 and 6 of the Draft undermine rather than strengthen these doctrines.
There are four primary problems with the Draft’s approach: (1) the definitions of procedural and substantive unconscionability are too restrictive; (2) the Draft fails to state that unconscionability and deception can be raised affirmatively to challenge the specific terms or the contract as a whole; (3) the Draft severely limits the remedies available once a court finds a term or contract to be unconscionable or that the business engaged in deception; and 4) the Draft places the burden of proof on consumers even though only businesses have access to most of that proof. In sum, the proposed Restatement embodies an expressly preferential treatment of businesses over consumers.
I. The Draft Undermines the Critically Important Doctrine of Unconscionability
Restatements consist of three parts: the “black letter,” which is intended to be the essential law on the subject; the Comments, which are regarded as an integral part of the section to which they belong and are consulted in order to understand the background and rationale of the black letter and the details of its application; and the Reporters’ Notes, which are regarded as the product of the Reporters (not the Institute) and discuss the legal and other sources they relied upon in formulating the black letter and the comments.
The black letter of the current Draft states that a term is procedurally unconscionable—i.e. that consumer’s agreement to the term was obtained in an unconscionable way—when it causes unfair surprise or results from the lack of meaningful choice of the part of the consumer.
Section 5(b)(2).
We do not object to this general statement. However, the Restatement also proposes to abandon—or drastically recast—the well-accepted set of factors that courts use to determine procedural unconscionability: (1) the consumer’s lack of financial sophistication (including cognitive biases); (2) the business’s exploitation of consumer disadvantages; (3) unequal bargaining power; (4) the use of incomprehensible language; (5) high pressure tactics and misrepresentations; and (5) whether economic, social, or practical duress compelled a party to execute the contract.
Comment 6 and the Reporters’ Notes seek to replace this set of factors with a new concept, “salience.”
The Reporters’ Notes define a contract term as salient “if it can affect the contracting decisions of a substantial number of consumers,” and then take the remarkable position that, if a term can affect the contracting decisions of a substantial number of consumers, then the market will police the term and the courts need not evaluate whether it was imposed on the consumer in an unconscionable way. The Reporters, however, do not cite any judicial decisions that define or apply the concept of “salience” in the unconscionability context, and there is not one reported or unreported decision on Westlaw that takes this approach. Instead, the Reporters’ Comments appear to rely entirely on a law review article that spins out this theory, again without citing any judicial decisions that support it.
This attempt to inject an entirely new approach contravenes the methodology that ALI claims to follow of ascertaining the majority and minority rules, determining which rule is the better one, and providing the rationale for choosing it. But of greater concern is its unfounded reliance on the marketplace to prevent overreaching and unfairness toward consumers. Recent history, including the vast wave of irresponsible lending that caused the mortgage meltdown ten years ago, demonstrates that overreaching and unfairness flourish in the marketplace.
The Draft also expresses an overly restrictive standard for whether a contract term is substantively unconscionable. While Section 5(b)(1) states that a term is substantively unconscionable if it is “fundamentally unfair” or “unreasonably one-sided,” the Comments state that: “the doctrine is to be used only when the one-sidedness of a term in the contract is extreme.” This test sets an overly high standard. Many fine print terms in consumer contracts today are unreasonable and unfair, but might not be viewed as “unconscionable” under this definition. For example, a fine print $35 charge might not seem “fundamentally” unfair in isolation. But when a $35 charge is repeatedly imposed, is high when compared to the cost of the contract, exceeds the cost to the business that the charge is intended to offset, or is imposed repeatedly, the fee should be declared unreasonable and unfair even though a court might not find it “extreme.”
Moreover, non-mutual enforcement clauses—clauses that deny the consumer the right to a remedy that the business is allowed to invoke—were not added to the list of contract terms that are prima facie unconscionable in the text of Section 5. It is common for businesses to place non-mutual clauses in consumer contracts that allow the business to sue the consumer in court, but relegate the consumer to mandatory binding arbitration. Although court decisions are split on whether “one-sided” or “non-mutual” enforcement clauses are unconscionable in the arbitration context, the better rule is that they are prima facie substantively unconscionable. The role of a Restatement is to “propose the better rule and provide the rationale for choosing it.” The Draft’s failure to apply the presumption of substantive unconscionability to such clauses, whether or not they involve mandatory arbitration, also undermines the critical role that the unconscionability doctrine is supposed to contribute to the success of the Restatement’s approach.
II. The Draft Cripples the Enforcement of Unconscionability and Deception
Our second concern about the Draft’s approach to the unconscionability doctrine is the failure to provide for robust consumer enforcement. The unconscionability doctrine will provide little or no counterweight to the permissive assent rules if consumers can raise it only as defense to a lawsuit to enforce the contract. Traditionally, common law unconscionability could be raised only as a defense to an action brought against a consumer. A court could permit a suit seeking a declaration that a term or the contract is unconscionable if the suit does not seek damages or other affirmative relief. The black letter of this Draft does not address the limited enforcement options available to consumers. Neither the Comments nor Reporters’ Notes discuss any judicial rulings on this point. Enforcement of the doctrine of deception suffers the same fate.
In the context of state and federal statutory protections, optimal policing of marketplace behavior occurs when state, federal, and private attorneys are acting as cops on the beat. In the context of the common law, however, there is little or no governmental enforcement, leaving consumers and their attorneys to bear this burden. Consumers should not be put in the position of having to default on the contract and subject themselves to negative credit reporting in order to raise unconscionability or deception. Moreover, the threat of enforcement is insignificant and will not significantly affect market behavior if only a small percentage of consumers (those who default and are sued) can raise the issue. Businesses will be well aware that they have little to fear from consumers.
In light of these practical and legal restrictions to private enforcement found in this Draft, the pivotal roles that unconscionability and deception are called upon to play in policing the marketplace are severely undermined. To remedy this, the black letter of Sections 5 and 6 must include a provision stating that a consumer can raise unconscionability affirmatively and defensively by seeking a declaration that the contract is void in part or in its entirety, providing for restitution for the costs incurred by virtue of the void provisions, and allowing class action relief.
The current Draft addresses this critical question just in Comment 12 to Section 5 and Comment 7 to Section 6, not in the black letter. And the two Comments are entirely inadequate. They reject the use of these doctrines affirmatively except in the limited circumstance where the consumer paid an unconscionable fee and seeks to recover it.
III. The Draft Severely Limits Remedies Related to Unconscionability and Deception
The only remedies available in this Draft in the event of a finding of unconscionability or deception are found in Section 9. This Section instructs the courts to refuse to enforce the offending term or the contract or replace the offending provisions with other terms. These provisions, without more, do not realistically deter business overreaching at contract inception or police the marketplace after the fact. These remedies are especially feeble when considered in conjunction with the lack of affirmative enforcement, the burdens of proof imposed on consumers, and silence regarding standards of proof.
IV. The Drafts Fails to Address Burdens of Proof and Standards of Proof
The allocation of burdens of proof and the level of evidence the consumer must present to prove unconscionability and deception also reduce the effectiveness of the roles that these doctrines are supposed to play. According to the Draft, the consumer bears the initial burden of proving the elements of unconscionability. Businesses, however, have access to nearly all of the relevant evidence. For example, only businesses are “recording this call to for quality assurance,” and therefore control the recordings which would show that telemarketers pressure and deceive consumers into agreeing to bad deals. Only businesses draft the contracts and only they know “the commercial setting, purpose, and effect” of the terms they impose on consumers.
Regarding procedural unconscionability related to a contract term, the Draft takes the position that a consumer must show that the term did not affect the contracting decisions of a substantial group of consumers, i.e., the term is not salient. To meet this burden a consumer would have to commission a study of consumers—an unrealistic task for a consumer to perform given the cost involved. Such a study lacks validity in any event because, if conducted by consumers once unconscionability has become an issue, the study would take place well after consummation of the contract, rather than at the time of contracting. A prior draft added a Comment to Section 5 that placed the burden on the business to prove that the standard contract terms were presented in a way that affected consumers’ contracting decisions to rebut a finding of procedural unconscionability. It also addressed burdens related to substantive unconscionability. Council Draft No. 4 removed that Comment, taking a big step backwards.
Neither Section 5 nor Section 6 address the standard of proof a court should apply in cases raising these claims. In both contexts, the black letter should state that the standard of proof is preponderance of the evidence. The application of a stricter standard reduces the deterrence and policing role of these doctrines. This is especially so where the remedy is limited to unenforceability and replacement with a substitute term and deterrence damages are not available for business deception, as would be the case with common law fraud.
IV. Conclusion
Unfortunately, this Draft unnecessarily restricts the scope of procedural and substantive unconscionability, fails to provide that unconscionability and deception can be raised affirmatively, circumscribes the remedies available for violations of these doctrines well beyond what the general common law otherwise provides, and fails to address burdens and standards of proof. As a result, the Restatement collapses under the weight of “freedom to contract” due to the lack of any meaningful consumer protections.
For these reasons, we urge the Council to not approve this Draft. Thank you for your consideration.
Editor's note: The ALI proposal, if followed by the courts, would undermine protections of local law, including the law of the District of Columbia. We will explore articulating that concern in greater detail. DR
The Geek explanation of design flaw (what the British media calls a "cockup") in Intel chips
From: https://www.theregister.co.uk/2018/01/02/intel_cpu_design_flaw/
DAR summary: Intel CPU chips have a serious design flaw not shared by rival AMD. Intel CPUs speculatively execute code potentially without performing security checks. AMD CPUs do not --they do not have the Intel design flaw.
The bug is present in modern Intel processors produced in the past decade. It allows normal user programs – from database applications to JavaScript in web browsers – to discern to some extent the layout or contents of protected kernel memory areas.
The fix is to separate the kernel's memory completely from user processes using what's called Kernel Page Table Isolation, or KPTI. At one point, Forcefully Unmap Complete Kernel With Interrupt Trampolines, aka FUCKWIT, was mulled by the Linux kernel team, giving you an idea of how annoying this has been for the developers.
Whenever a running program needs to do anything useful – such as write to a file or open a network connection – it has to temporarily hand control of the processor to the kernel to carry out the job. To make the transition from user mode to kernel mode and back to user mode as fast and efficient as possible, the kernel is present in all processes' virtual memory address spaces, although it is invisible to these programs. When the kernel is needed, the program makes a system call, the processor switches to kernel mode and enters the kernel. When it is done, the CPU is told to switch back to user mode, and reenter the process. While in user mode, the kernel's code and data remains out of sight but present in the process's page tables.
Think of the kernel as God sitting on a cloud, looking down on Earth. It's there, and no normal being can see it, yet they can pray to it.
* * *
In an email to the Linux kernel mailing list over Christmas, AMD said it is not affected. The wording of that message, though, rather gives the game away as to what the underlying cockup is:
AMD processors are not subject to the types of attacks that the kernel page table isolation feature protects against. The AMD microarchitecture does not allow memory references, including speculative references, that access higher privileged data when running in a lesser privileged mode when that access would result in a page fault.
A key word here is "speculative." Modern processors, like Intel's, perform speculative execution. In order to keep their internal pipelines primed with instructions to obey, the CPU cores try their best to guess what code is going to be run next, fetch it, and execute it.
It appears, from what AMD software engineer Tom Lendacky was suggesting above, that Intel's CPUs speculatively execute code potentially without performing security checks.
* * *
Here is the email from AMD:
FromTom Lendacky <>
Subject[PATCH] x86/cpu, x86/pti: Do not enable PTI on AMD processors
DateTue, 26 Dec 2017 23:43:54 -0600· share 0
· share 2k
AMD processors are not subject to the types of attacks that the kernel
page table isolation feature protects against. The AMD microarchitecture
does not allow memory references, including speculative references, that
access higher privileged data when running in a lesser privileged mode
when that access would result in a page fault.
Disable page table isolation by default on AMD processors by not setting
the X86_BUG_CPU_INSECURE feature, which controls whether X86_FEATURE_PTI
is set.
Signed-off-by: Tom Lendacky <[email protected]>
---
arch/x86/kernel/cpu/common.c | 4 ++--
1 file changed, 2 insertions(+), 2 deletions(-)
diff --git a/arch/x86/kernel/cpu/common.c b/arch/x86/kernel/cpu/common.c
index c47de4e..7d9e3b0 100644
--- a/arch/x86/kernel/cpu/common.c
+++ b/arch/x86/kernel/cpu/common.c
@@ -923,8 +923,8 @@ static void __init early_identify_cpu(struct cpuinfo_x86 *c)
setup_force_cpu_cap(X86_FEATURE_ALWAYS);
- /* Assume for now that ALL x86 CPUs are insecure */
- setup_force_cpu_bug(X86_BUG_CPU_INSECURE);
+ if (c->x86_vendor != X86_VENDOR_AMD)
+ setup_force_cpu_bug(X86_BUG_CPU_INSECURE);
fpu__init_system(c);
A Message from People for Fairness Coalition, sponsor of a campaign supporting public restrooms in DC:
Support Bill 22-0223 Public Restroom Facilities Installation & Promotion Act of 2017
Let members of the DC City Council know that you are in favor of:
CLEAN, SAFE, AVAILABLE PUBLIC RESTROOMS FOR EVERYONE in needed areas of DC
A DC Council hearing on Bill 22-0223 is scheduled for January 10 2018
Bill 22-0223 was introduced April of this year by Council Members Nadeau, Grosso, Silverman, and R White. It is inspired by lessons learned and best practices from cities in the US and elsewhere that have successfully installed clean, safe, available public restrooms for everyone.
The Bill:
Proposes the establishment of a working group consisting of DC Water, DDOT, DGS, DHS, DPR, and DPW. They will be responsible for:
It is very hard, when you have to go, to find a clean, safe restrooms in Washington DC:
See https://actionnetwork.org/letters/support-bill-22-0223-public-restroom-facilities-installation-promotion-act-of-2017?source=direct_link
Support Bill 22-0223 Public Restroom Facilities Installation & Promotion Act of 2017
Let members of the DC City Council know that you are in favor of:
CLEAN, SAFE, AVAILABLE PUBLIC RESTROOMS FOR EVERYONE in needed areas of DC
A DC Council hearing on Bill 22-0223 is scheduled for January 10 2018
Bill 22-0223 was introduced April of this year by Council Members Nadeau, Grosso, Silverman, and R White. It is inspired by lessons learned and best practices from cities in the US and elsewhere that have successfully installed clean, safe, available public restrooms for everyone.
The Bill:
Proposes the establishment of a working group consisting of DC Water, DDOT, DGS, DHS, DPR, and DPW. They will be responsible for:
- Identifying -- in close consultation with ANCs, BIDs, and community associations -- at least 10 sites in areas of the District with limited access to public restroom facilities where stand alone public restrooms available 24/7 can be installed;
- Authorizing the creation of a subsidy program for private entities to open their restrooms to the public
It is very hard, when you have to go, to find a clean, safe restrooms in Washington DC:
- Only 3 public restrooms open 24/7 and no signs
- Off the Mall, only 5 public restrooms open during the day for limited hours, and there are no signs
- Private facilities are increasingly closing their restrooms to the public.
See https://actionnetwork.org/letters/support-bill-22-0223-public-restroom-facilities-installation-promotion-act-of-2017?source=direct_link
FTC "has gone dark" on fighting hidden resort fees, D.C. attorney general says
An attempted crackdown on hidden hotel charges now faces a potential roadblock in Washington, as a growing number of travelers complain that resort, urban or facility fees can add up to $50 to your bill. Even lower-priced hotels are adding the fees to room charges. One watchdog says the number of hotels charging extra fees has grown 26 percent year-over-year. The size of the fees has risen 12 percent.
District of Columbia Attorney General Karl Racine is helping lead an investigation, along with the attorneys general in 47 states, into a dozen major hotel chains.
"What these lodging companies do is they hook the would-be buyer with a lower rate … then spring the additional charge on them," Racine said.
We found one Las Vegas hotel charging a room rate of $26 with a "resort fee" of $34. One San Francisco hotel adds a $20 "urban facility fee" and another hotel in Arizona listed its resort fee of $50 underneath taxes.
"What's illegal about it is that it misleads consumers as to what the actual price of a hotel room is," Racine said.
Even properties with a certain famous name make money off resort fees. We found three Trump hotels in Florida and Las Vegas charge resort fees of $35, $20 and $24 for a potential $66,000 in charges per day.
The American Hotel and Lodging Association told CBS News, "The hotel industry provides guests full disclosure for mandatory resort fees charged up front" and said the hotels wanted to "provide consumers with the best value by grouping amenity fees into one cost" following the FTC's guidance.
But in January this year, the FTC found charging resort fees separately without first disclosing the total hotel price likely harms consumers. Racine said the FTC was working with the states on their investigation – at least, he said, until the Trump administration came in.
"The FTC in a way has gone dark and I think that to be honest, that has given some confidence to the hospitality industry perhaps they're going to be able to wait out or otherwise evade the efforts of the 47 states because the FTC is no longer our partner," Racine said.
"You're saying the FTC backed off?" Werner asked.
"That is the case," Racine said.
Backed off, he claimed, during a crucial time in negotiations with the hotel chains.
"We were headed towards what I thought would be a pretty fair settlement... The election hit and then all of a sudden, the hospitality industry sort of dug in against our position," Racine said.
We asked the FTC about Racine's allegations. Officials responded with a statement saying the agency was "never a co-plaintiff" with the attorneys general but "has worked with the industry and state AGs to try improve disclosures about resort fees." We asked the Trump Organization and the White House if they had any comments but did not receive any response.
Excerpts are from https://www.cbsnews.com/news/resort-fee-investigation-ftc-allegedly-backing-off-trump-administration/
An attempted crackdown on hidden hotel charges now faces a potential roadblock in Washington, as a growing number of travelers complain that resort, urban or facility fees can add up to $50 to your bill. Even lower-priced hotels are adding the fees to room charges. One watchdog says the number of hotels charging extra fees has grown 26 percent year-over-year. The size of the fees has risen 12 percent.
District of Columbia Attorney General Karl Racine is helping lead an investigation, along with the attorneys general in 47 states, into a dozen major hotel chains.
"What these lodging companies do is they hook the would-be buyer with a lower rate … then spring the additional charge on them," Racine said.
We found one Las Vegas hotel charging a room rate of $26 with a "resort fee" of $34. One San Francisco hotel adds a $20 "urban facility fee" and another hotel in Arizona listed its resort fee of $50 underneath taxes.
"What's illegal about it is that it misleads consumers as to what the actual price of a hotel room is," Racine said.
Even properties with a certain famous name make money off resort fees. We found three Trump hotels in Florida and Las Vegas charge resort fees of $35, $20 and $24 for a potential $66,000 in charges per day.
The American Hotel and Lodging Association told CBS News, "The hotel industry provides guests full disclosure for mandatory resort fees charged up front" and said the hotels wanted to "provide consumers with the best value by grouping amenity fees into one cost" following the FTC's guidance.
But in January this year, the FTC found charging resort fees separately without first disclosing the total hotel price likely harms consumers. Racine said the FTC was working with the states on their investigation – at least, he said, until the Trump administration came in.
"The FTC in a way has gone dark and I think that to be honest, that has given some confidence to the hospitality industry perhaps they're going to be able to wait out or otherwise evade the efforts of the 47 states because the FTC is no longer our partner," Racine said.
"You're saying the FTC backed off?" Werner asked.
"That is the case," Racine said.
Backed off, he claimed, during a crucial time in negotiations with the hotel chains.
"We were headed towards what I thought would be a pretty fair settlement... The election hit and then all of a sudden, the hospitality industry sort of dug in against our position," Racine said.
We asked the FTC about Racine's allegations. Officials responded with a statement saying the agency was "never a co-plaintiff" with the attorneys general but "has worked with the industry and state AGs to try improve disclosures about resort fees." We asked the Trump Organization and the White House if they had any comments but did not receive any response.
Excerpts are from https://www.cbsnews.com/news/resort-fee-investigation-ftc-allegedly-backing-off-trump-administration/
A federal judge on Friday allowed the CMS to move forward with its planned $1.6 billion cut to a federal drug discount program.
U.S. District Judge Rudolph Contreras ruled that the American Hospital Association, Association of American Medical Colleges, America's Essential Hospitals and three hospitals prematurely sued the CMS, since the proposed 340B program cuts have not gone into effect yet.
Starting Jan. 1, providers participating in 340B are scheduled to begin receiving smaller reimbursements for purchased drugs. Under the old calculation, providers received 6% on top of the average sales price of the drug. Starting next week, the CMS will pay approximately $65,000 for a drug that costs $84,000.
The hospital associations sued the HHS in November, shortly after the CMS issued its final rule changing the 340B payment calculations.
The groups said Friday that they will continue to pursue their lawsuit, noting that Contreras did not rule on the merits of the case. They will have the opportunity to refile their complaint after the reimbursement cuts go into effect.
"Making cuts to the program, like those CMS has put forward, will dramatically threaten access to healthcare for many communities with vulnerable patients," AHA president and CEO Rick Pollack said in a statement. "We are disappointed in this decision from the court and will continue our efforts in the courts and the Congress to reverse these significant cuts to the 340B program."
HHS has said it is well within its authority to make the 340B changes, calling the final rule a redistribution of funds to all hospitals that received reimbursement under Medicare's outpatient fee schedule rather than a cut to 340B.
Although Judge Contreras said last week during a hearing that it would be difficult to "unscramble eggs" after the cuts go into effect, he determined that the associations' and hospitals' comments on the proposed rule weren't enough to give them standing to sue. They will have to have to cite specific reimbursement claims in order for a renewed suit to move forward.
"Plaintiffs' failure to present any concrete claim for reimbursement to the (HHS) secretary for a final decision is a fundamental jurisdictional impediment to judicial review," the judge wrote.
From http://www.modernhealthcare.com/article/20171229/NEWS/171229919?utm_source=modernhealthcare&utm_medium=email&utm_content=20171229-NEWS-171229919&utm_campaign=mh-alert
U.S. District Judge Rudolph Contreras ruled that the American Hospital Association, Association of American Medical Colleges, America's Essential Hospitals and three hospitals prematurely sued the CMS, since the proposed 340B program cuts have not gone into effect yet.
Starting Jan. 1, providers participating in 340B are scheduled to begin receiving smaller reimbursements for purchased drugs. Under the old calculation, providers received 6% on top of the average sales price of the drug. Starting next week, the CMS will pay approximately $65,000 for a drug that costs $84,000.
The hospital associations sued the HHS in November, shortly after the CMS issued its final rule changing the 340B payment calculations.
The groups said Friday that they will continue to pursue their lawsuit, noting that Contreras did not rule on the merits of the case. They will have the opportunity to refile their complaint after the reimbursement cuts go into effect.
"Making cuts to the program, like those CMS has put forward, will dramatically threaten access to healthcare for many communities with vulnerable patients," AHA president and CEO Rick Pollack said in a statement. "We are disappointed in this decision from the court and will continue our efforts in the courts and the Congress to reverse these significant cuts to the 340B program."
HHS has said it is well within its authority to make the 340B changes, calling the final rule a redistribution of funds to all hospitals that received reimbursement under Medicare's outpatient fee schedule rather than a cut to 340B.
Although Judge Contreras said last week during a hearing that it would be difficult to "unscramble eggs" after the cuts go into effect, he determined that the associations' and hospitals' comments on the proposed rule weren't enough to give them standing to sue. They will have to have to cite specific reimbursement claims in order for a renewed suit to move forward.
"Plaintiffs' failure to present any concrete claim for reimbursement to the (HHS) secretary for a final decision is a fundamental jurisdictional impediment to judicial review," the judge wrote.
From http://www.modernhealthcare.com/article/20171229/NEWS/171229919?utm_source=modernhealthcare&utm_medium=email&utm_content=20171229-NEWS-171229919&utm_campaign=mh-alert
From the Office of the Inspector General: The Food and Drug Administration's Food-Recall Process Did Not Always Ensure the Safety of the Nation's Food Supply
Prior Office of Inspector General (OIG) reviews focused on U.S. Food and Drug Administration (FDA) oversight of food recalls. Food recalls are the most effective means of protecting public health when a widely consumed food product is either defective or potentially harmful. At the time of those OIG reviews, FDA did not have statutory authority to require food manufacturers to initiate recalls of most foods.
After those reviews, enactment of the FDA Food Safety Modernization Act gave FDA new authority to order a mandatory recall and require firms to recall certain harmful foods. We conducted this review to determine whether FDA is fulfilling its responsibility in safeguarding the Nation's food supply now that it has mandatory recall authority.
Our objective was to determine whether FDA had an efficient and effective food-recall process that ensured the safety of the Nation's food supply. Specifically, we focused on FDA's (1) oversight of firms' initiation of food recalls, (2) monitoring of firm-initiated recalls, and (3) maintenance of food-recall data in the electronic recall data system.
We reviewed documentation for 30 voluntary food recalls judgmentally selected from the 1,557 food recalls reported to FDA between October 1, 2012, and May 4, 2015.
FDA did not always have an efficient and effective food-recall process that ensured the safety of the Nation's food supply. We identified deficiencies in FDA's oversight of recall initiation, monitoring of recalls, and the recall information captured and maintained in FDA's electronic recall data system, the Recall Enterprise System (RES). Specifically, we found that FDA could not always ensure that firms initiated recalls promptly and that FDA did not always (1) evaluate health hazards in a timely manner, (2) issue audit check assignments at the appropriate level, (3) complete audit checks in accordance with its procedures, (4) collect timely and complete status reports from firms that have issued recalls, (5) track key recall data in the RES, and (6) maintain accurate recall data in the RES.
Recalls were not always initiated promptly because FDA does not have adequate procedures to ensure that firms take prompt and effective action in initiating voluntary food recalls. FDA's monitoring of recalls was not always adequate because FDA staff had insufficient oversight to ensure that the assignment was at the appropriate level, and FDA obtained incomplete or inaccurate consignee information from firms initiating recalls. Additionally, FDA lacked adequate procedures to collect timely and complete status reports from these firms because the procedures did not require staff to request status reports at the time the recall was initiated. Lastly, the RES contained deficient recall information because it did not track all information necessary for FDA to effectively monitor recall activities and assess the timeliness of recalls; the RES also contained inaccurate data.
We recommended that FDA use its Strategic Coordinated Oversight of Recall Execution (SCORE) initiative to establish set timeframes, expedite decision-making and move recall cases forward, and improve electronic recall data. We also made other procedural recommendations, which are listed in the report.
FDA agreed with our conclusion that it needs to help ensure that recalls are initiated promptly in all circumstances and said that it will consider the results of our review as it "continues to operate the SCORE team." FDA also described other actions it has taken in response to our early alert, issued June 8, 2016, and draft report including initiating a new quality system audit process and a plan to provide early notice to the public and more guidance to staff.
Copies can also be obtained by contacting the Office of Public Affairs at [email protected].
Download the complete report or the Report in Brief.
Prior Office of Inspector General (OIG) reviews focused on U.S. Food and Drug Administration (FDA) oversight of food recalls. Food recalls are the most effective means of protecting public health when a widely consumed food product is either defective or potentially harmful. At the time of those OIG reviews, FDA did not have statutory authority to require food manufacturers to initiate recalls of most foods.
After those reviews, enactment of the FDA Food Safety Modernization Act gave FDA new authority to order a mandatory recall and require firms to recall certain harmful foods. We conducted this review to determine whether FDA is fulfilling its responsibility in safeguarding the Nation's food supply now that it has mandatory recall authority.
Our objective was to determine whether FDA had an efficient and effective food-recall process that ensured the safety of the Nation's food supply. Specifically, we focused on FDA's (1) oversight of firms' initiation of food recalls, (2) monitoring of firm-initiated recalls, and (3) maintenance of food-recall data in the electronic recall data system.
We reviewed documentation for 30 voluntary food recalls judgmentally selected from the 1,557 food recalls reported to FDA between October 1, 2012, and May 4, 2015.
FDA did not always have an efficient and effective food-recall process that ensured the safety of the Nation's food supply. We identified deficiencies in FDA's oversight of recall initiation, monitoring of recalls, and the recall information captured and maintained in FDA's electronic recall data system, the Recall Enterprise System (RES). Specifically, we found that FDA could not always ensure that firms initiated recalls promptly and that FDA did not always (1) evaluate health hazards in a timely manner, (2) issue audit check assignments at the appropriate level, (3) complete audit checks in accordance with its procedures, (4) collect timely and complete status reports from firms that have issued recalls, (5) track key recall data in the RES, and (6) maintain accurate recall data in the RES.
Recalls were not always initiated promptly because FDA does not have adequate procedures to ensure that firms take prompt and effective action in initiating voluntary food recalls. FDA's monitoring of recalls was not always adequate because FDA staff had insufficient oversight to ensure that the assignment was at the appropriate level, and FDA obtained incomplete or inaccurate consignee information from firms initiating recalls. Additionally, FDA lacked adequate procedures to collect timely and complete status reports from these firms because the procedures did not require staff to request status reports at the time the recall was initiated. Lastly, the RES contained deficient recall information because it did not track all information necessary for FDA to effectively monitor recall activities and assess the timeliness of recalls; the RES also contained inaccurate data.
We recommended that FDA use its Strategic Coordinated Oversight of Recall Execution (SCORE) initiative to establish set timeframes, expedite decision-making and move recall cases forward, and improve electronic recall data. We also made other procedural recommendations, which are listed in the report.
FDA agreed with our conclusion that it needs to help ensure that recalls are initiated promptly in all circumstances and said that it will consider the results of our review as it "continues to operate the SCORE team." FDA also described other actions it has taken in response to our early alert, issued June 8, 2016, and draft report including initiating a new quality system audit process and a plan to provide early notice to the public and more guidance to staff.
Copies can also be obtained by contacting the Office of Public Affairs at [email protected].
Download the complete report or the Report in Brief.
USDOJ retracts guidance letter limiting imprisonment for failure to pay fines
The withdrawn guidance letter was issued in March 2016. It was addressed to chief judges and court administrators in states, and urged them to abandon policies that could trap poor people in cycles of fines, debt and prison.
Suggesting that such policies were unconstitutional and illegal, it said arrest warrants should not be used as a way to collect fees, that courts were obligated to consider whether defendants were able to pay their fines and that judges should not use driver’s license suspensions as a punishment for missed payments.
The letter echoed the conclusions of the department’s investigation into the police and courts in Ferguson, Mo., which portrayed the legal system there as a moneymaking venture preying on poor and minority residents.
Vanita Gupta, the president of the Leadership Conference on Civil and Human Rights, who served as the head of the Justice Department’s Civil Rights Division in the Obama administration and issued the fines and fees letter, said it came about because states and cities around the country wanted guidance after the department’s Ferguson report about what federal civil rights and constitutional law required.
She maintained it did not articulate any new principles, but simply explained and clarified existing law, citing a landmark 1983 Supreme Court ruling that held that local governments cannot imprison people for failing to pay fines they could not afford.
“The retraction of this guidance doesn’t change the existing legal framework,” Ms. Gupta said. “He can retract the guidance, but he can’t change what the law says.”
From NYT article at https://www.nytimes.com/2017/12/21/us/politics/justice-dept-guidance-documents.html
The withdrawn guidance letter was issued in March 2016. It was addressed to chief judges and court administrators in states, and urged them to abandon policies that could trap poor people in cycles of fines, debt and prison.
Suggesting that such policies were unconstitutional and illegal, it said arrest warrants should not be used as a way to collect fees, that courts were obligated to consider whether defendants were able to pay their fines and that judges should not use driver’s license suspensions as a punishment for missed payments.
The letter echoed the conclusions of the department’s investigation into the police and courts in Ferguson, Mo., which portrayed the legal system there as a moneymaking venture preying on poor and minority residents.
Vanita Gupta, the president of the Leadership Conference on Civil and Human Rights, who served as the head of the Justice Department’s Civil Rights Division in the Obama administration and issued the fines and fees letter, said it came about because states and cities around the country wanted guidance after the department’s Ferguson report about what federal civil rights and constitutional law required.
She maintained it did not articulate any new principles, but simply explained and clarified existing law, citing a landmark 1983 Supreme Court ruling that held that local governments cannot imprison people for failing to pay fines they could not afford.
“The retraction of this guidance doesn’t change the existing legal framework,” Ms. Gupta said. “He can retract the guidance, but he can’t change what the law says.”
From NYT article at https://www.nytimes.com/2017/12/21/us/politics/justice-dept-guidance-documents.html
A federal appeals court is ordering the Environmental Protection Agency (EPA) to take action within 90 days to revise standards meant to protect children from lead-based paint.
The San Francisco-based Court of Appeals for the 9th Circuit ruledWednesday that the EPA has taken too long to act on a 2009 petition from health and environmental groups who want the agency to further restrict lead paint limitations.
The judges issued a “writ of mandamus,” a rare edict from a federal court that requires a litigant to take action.
The EPA told the court that it would take another six years to develop a lead paint rule, which the judges did not accept.
“EPA fails to identify a single case where a court has upheld an eight year delay as reasonable, let alone a fourteen year delay, if we take into account the six more years EPA asserts it needs to take action,” Judge Mary Schroeder, nominated by former President Carter, wrote on behalf of herself and Judge Randy Smith, a George W. Bush nominee.
The judges said the EPA also has an unambiguous duty to act. Scientific studies point toward a higher danger to children from lead paint than when Congress developed standards in the 1990s, studies that the EPA did not dispute.
“Under the [Toxic Substances Control Act] and the Paint Hazard Act, Congress set EPA a task, authorized EPA to engage in rulemaking to accomplish that task, and set up a framework for EPA to amend initial rules and standards in light of new information,” the judges said.
“The new information is clear in this record: the current standards for dust-lead hazard and lead-based paint hazard are insufficient to accomplish Congress’s goal.”
from http://thehill.com/policy/energy-environment/366598-court-orders-epa-to-take-quick-action-on-lead-paint
The San Francisco-based Court of Appeals for the 9th Circuit ruledWednesday that the EPA has taken too long to act on a 2009 petition from health and environmental groups who want the agency to further restrict lead paint limitations.
The judges issued a “writ of mandamus,” a rare edict from a federal court that requires a litigant to take action.
The EPA told the court that it would take another six years to develop a lead paint rule, which the judges did not accept.
“EPA fails to identify a single case where a court has upheld an eight year delay as reasonable, let alone a fourteen year delay, if we take into account the six more years EPA asserts it needs to take action,” Judge Mary Schroeder, nominated by former President Carter, wrote on behalf of herself and Judge Randy Smith, a George W. Bush nominee.
The judges said the EPA also has an unambiguous duty to act. Scientific studies point toward a higher danger to children from lead paint than when Congress developed standards in the 1990s, studies that the EPA did not dispute.
“Under the [Toxic Substances Control Act] and the Paint Hazard Act, Congress set EPA a task, authorized EPA to engage in rulemaking to accomplish that task, and set up a framework for EPA to amend initial rules and standards in light of new information,” the judges said.
“The new information is clear in this record: the current standards for dust-lead hazard and lead-based paint hazard are insufficient to accomplish Congress’s goal.”
from http://thehill.com/policy/energy-environment/366598-court-orders-epa-to-take-quick-action-on-lead-paint
Case to watch in 2018: FTC v D-Link
From The Recorder:
Earlier this year, the Federal Trade Commission brought a potentially groundbreaking case alleging that selling connected devices like routers and video cameras with known security weaknesses was an unfair and deceptive business practice.
In filing the suit against Taiwanese device manufacturer D-Link Systems Inc., the regulator was grabbing hold of an emerging theory in litigation that makes tech companies tremble: that manufacturers can be held liable if their products don’t provide a minimum level of security.
That theory took a bit of a beating in Court.
In an order this past year partially granting D-Link’s motion to dismiss, U.S. District Judge James Donato of the Northern District of California wrote that the mere existence of a known security flaw is not enough to prove injury under the Federal Trade Commission Act:
The FTC does not identify a single incident where a consumer’s financial, medical or other sensitive personal information has been accessed, exposed or misused in any way [...] The absence of any concrete facts makes it just as possible that DLS’s devices are not likely to substantially harm consumers, and the FTC cannot rely on wholly conclusory allegations about potential injury to tilt the balance in its favor.
That part of Donato’s ruling wiped out the agency’s unfair practices claim—although he allowed the FTC to amend its complaint. At the same time, he allowed claims to move forward alleging that D-Link deceived consumers by marketing its devices as having “the latest wireless security features to help prevent unauthorized access,” among other safeguards.
See https://www.law.com/therecorder/sites/therecorder/2017/09/22/d-link-ruling-may-help-device-makers-but-isnt-a-total-win/?back=law
From The Recorder:
Earlier this year, the Federal Trade Commission brought a potentially groundbreaking case alleging that selling connected devices like routers and video cameras with known security weaknesses was an unfair and deceptive business practice.
In filing the suit against Taiwanese device manufacturer D-Link Systems Inc., the regulator was grabbing hold of an emerging theory in litigation that makes tech companies tremble: that manufacturers can be held liable if their products don’t provide a minimum level of security.
That theory took a bit of a beating in Court.
In an order this past year partially granting D-Link’s motion to dismiss, U.S. District Judge James Donato of the Northern District of California wrote that the mere existence of a known security flaw is not enough to prove injury under the Federal Trade Commission Act:
The FTC does not identify a single incident where a consumer’s financial, medical or other sensitive personal information has been accessed, exposed or misused in any way [...] The absence of any concrete facts makes it just as possible that DLS’s devices are not likely to substantially harm consumers, and the FTC cannot rely on wholly conclusory allegations about potential injury to tilt the balance in its favor.
That part of Donato’s ruling wiped out the agency’s unfair practices claim—although he allowed the FTC to amend its complaint. At the same time, he allowed claims to move forward alleging that D-Link deceived consumers by marketing its devices as having “the latest wireless security features to help prevent unauthorized access,” among other safeguards.
See https://www.law.com/therecorder/sites/therecorder/2017/09/22/d-link-ruling-may-help-device-makers-but-isnt-a-total-win/?back=law
A message from Diana Moss of AAI
I have been asked how growing concerns about the health of competition in the U.S. economy and the fading fortunes of the consumer and worker affect AAI's research, education, and advocacy mission. My response is that recent developments reaffirm the importance of AAI's work and provide an opportunity for AAI to have an even greater impact than it has over the last 20 years.
The importance of antitrust is now at the center of a vibrant debate. The policy spectrum has recently expanded to include additional perspectives. As our work reveals, AAI promotes the fundamental durability of the antitrust laws and their relevance to both traditional and modern markets. AAI also believes the consumer welfare standard to be capable of addressing the price and non-price dimensions of competition such as choice, quality, and innovation. The existing framework can effectively protect all markets, consumers, and workers.
In contrast to conservatives that promote lax enforcement and populists that seek to use the laws for purposes for which they were not designed, AAI will continue to push for more vigorous enforcement under current standards. As we have testified in Congress, the necessary tools are in the antitrust toolkit, but we need enforcers, courts, and legislators that promote a more aggressive approach. This applies to not only specific issues and cases, but also to judicial appointments, legislation, and complementary sector regulation.
Guided by the priorities outlined in our National Competition Policy statement, and through our amicus briefs, white papers, letters, filings, and other research, education, and advocacy, AAI will point the way toward effective and coherent competition enforcement and policy.
Our mission is more important than ever. Please help us continue to promote competition that protects consumers, businesses, and society. We cannot do this without your support.
Sincerely,
Diana Moss
President
The American Antitrust Institute is a 501(c)(3) not-for-profit organization.
Tax ID #52-2093834
Source: AAI
I have been asked how growing concerns about the health of competition in the U.S. economy and the fading fortunes of the consumer and worker affect AAI's research, education, and advocacy mission. My response is that recent developments reaffirm the importance of AAI's work and provide an opportunity for AAI to have an even greater impact than it has over the last 20 years.
The importance of antitrust is now at the center of a vibrant debate. The policy spectrum has recently expanded to include additional perspectives. As our work reveals, AAI promotes the fundamental durability of the antitrust laws and their relevance to both traditional and modern markets. AAI also believes the consumer welfare standard to be capable of addressing the price and non-price dimensions of competition such as choice, quality, and innovation. The existing framework can effectively protect all markets, consumers, and workers.
In contrast to conservatives that promote lax enforcement and populists that seek to use the laws for purposes for which they were not designed, AAI will continue to push for more vigorous enforcement under current standards. As we have testified in Congress, the necessary tools are in the antitrust toolkit, but we need enforcers, courts, and legislators that promote a more aggressive approach. This applies to not only specific issues and cases, but also to judicial appointments, legislation, and complementary sector regulation.
Guided by the priorities outlined in our National Competition Policy statement, and through our amicus briefs, white papers, letters, filings, and other research, education, and advocacy, AAI will point the way toward effective and coherent competition enforcement and policy.
Our mission is more important than ever. Please help us continue to promote competition that protects consumers, businesses, and society. We cannot do this without your support.
Sincerely,
Diana Moss
President
The American Antitrust Institute is a 501(c)(3) not-for-profit organization.
Tax ID #52-2093834
Source: AAI
Three major cities have filed a lawsuit against the Defense Department for its failure to report many criminal convictions in the military justice system to the Federal Bureau of Investigation and its national gun background-check database
The Pentagon has for years run afoul of federal laws intended to keep guns out of the hands of felons and domestic abusers by not transmitting to the F.B.I. the names of service members convicted of crimes that disqualify gun ownership.
This is what allowed Devin P. Kelley, who was convicted of domestic assault in the Air Force, to buy at a store the rifle he used to kill 25 people, including a pregnant woman whose fetus also died, at a Texas church in November.
Now, after two decades of serious lapses — and one of the worst mass shootings in American history — officials from New York, Philadelphia and San Francisco are trying to force a change. Their suit would require the Pentagon to submit to federal court monitoring of its compliance with the reporting laws it has broken time and again.
“This failure on behalf of the Department of Defense has led to the loss of innocent lives by putting guns in the hands of criminals and those who wish to cause immeasurable harm,” Mayor Bill de Blasio of New York said.
The cities say they are suing because their police departments regularly access the federal background-check database and rely on it to provide accurate information about who should be prevented from buying guns.
The Pentagon has repeatedly been chided since the 1990s by its own inspector general for woefully failing to comply with the law. In a 2015 report — and another one issued just a few weeks ago — investigators said that nearly one in three court-martial convictions that should have barred defendants from gun purchases had gone unreported by the military.
Having a federal court oversee compliance, the cities in the lawsuit say, would reduce the chance that a tragedy like the massacre in Sutherland Springs, Tex., happens again.
If the lawsuit is successful and the military fails to adhere to a court order to demonstrate compliance with the law, a federal judge could hold the defendants in contempt, lawyers for the plaintiffs say. The lawsuit names as defendants the Defense Department and its secretary, James N. Mattis; the Departments of the Air Force, Army and Navy and their respective secretaries; the directors of the military’s criminal investigative organizations; and the commander of the Navy’s personnel command.
From: https://www.nytimes.com/2017/12/26/us/gun-background-checks-military.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
The Pentagon has for years run afoul of federal laws intended to keep guns out of the hands of felons and domestic abusers by not transmitting to the F.B.I. the names of service members convicted of crimes that disqualify gun ownership.
This is what allowed Devin P. Kelley, who was convicted of domestic assault in the Air Force, to buy at a store the rifle he used to kill 25 people, including a pregnant woman whose fetus also died, at a Texas church in November.
Now, after two decades of serious lapses — and one of the worst mass shootings in American history — officials from New York, Philadelphia and San Francisco are trying to force a change. Their suit would require the Pentagon to submit to federal court monitoring of its compliance with the reporting laws it has broken time and again.
“This failure on behalf of the Department of Defense has led to the loss of innocent lives by putting guns in the hands of criminals and those who wish to cause immeasurable harm,” Mayor Bill de Blasio of New York said.
The cities say they are suing because their police departments regularly access the federal background-check database and rely on it to provide accurate information about who should be prevented from buying guns.
The Pentagon has repeatedly been chided since the 1990s by its own inspector general for woefully failing to comply with the law. In a 2015 report — and another one issued just a few weeks ago — investigators said that nearly one in three court-martial convictions that should have barred defendants from gun purchases had gone unreported by the military.
Having a federal court oversee compliance, the cities in the lawsuit say, would reduce the chance that a tragedy like the massacre in Sutherland Springs, Tex., happens again.
If the lawsuit is successful and the military fails to adhere to a court order to demonstrate compliance with the law, a federal judge could hold the defendants in contempt, lawyers for the plaintiffs say. The lawsuit names as defendants the Defense Department and its secretary, James N. Mattis; the Departments of the Air Force, Army and Navy and their respective secretaries; the directors of the military’s criminal investigative organizations; and the commander of the Navy’s personnel command.
From: https://www.nytimes.com/2017/12/26/us/gun-background-checks-military.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0
Florida Attorney General Pam Bondi News Release:
Court Orders Tobacco Company to Honor Florida’s Historic Tobacco Settlement
TALLAHASSEE, Fla.—Attorney General Pam Bondi today announced a major ruling in a case involving Florida’s historic tobacco settlement agreement. The litigation centers around R.J. Reynolds Tobacco Company’s sale of three iconic cigarette brands, Winston, Kool and Salem, along with a legacy Lorillard Tobacco Company brand, Maverick, to Imperial Tobacco Group in June 2015 for $7 billion.
From the time of the tobacco settlement in 1997 through 2015, RJR paid the state tens of millions of dollars annually for these cigarette brands in compliance with the historic settlement. After the June 2015 sale, RJR stopped making payments on these brands, costing the state an estimated $30 million a year in perpetuity.
“Today’s ruling will ensure Florida’s landmark tobacco settlement is honored and our state receives the money it is owed,” said Attorney General Bondi. “My office is committed to pursuing all appropriate remedies when companies try to evade their monetary obligations to the State of Florida.”
RJR’s refusal to pay the agreed to settlement money led to Attorney General Bondi filing an enforcement motion on Jan. 18, 2017. The enforcement motion was the subject of a three-day bench trial before the Honorable Jeffrey Dana Gillen on Dec. 18-20. Judge Gillen today ruled that “Reynolds is still obligated to make the payments pursuant to the Florida Agreement.”
After the entry of the order requiring RJR to make all of the payments to Florida for the past and future sales of these cigarettes, the next step in the lawsuit will involve RJR and ITG providing the necessary information to accurately calculate the amounts owed pursuant to reporting requirements under the settlement agreement.
To view a copy of the trial court’s order granting the enforcement motion, click here.
The historic 1997 settlement resolved Florida’s landmark 1995 lawsuit against RJR and the other major tobacco companies seeking relief from decades of past unlawful actions relating to the marketing and sale of cigarettes. The annual, perpetual payments compensate Florida for the past and future public health care expenses from its citizens’ consumption of the settling defendants’ cigarettes.
Court Orders Tobacco Company to Honor Florida’s Historic Tobacco Settlement
TALLAHASSEE, Fla.—Attorney General Pam Bondi today announced a major ruling in a case involving Florida’s historic tobacco settlement agreement. The litigation centers around R.J. Reynolds Tobacco Company’s sale of three iconic cigarette brands, Winston, Kool and Salem, along with a legacy Lorillard Tobacco Company brand, Maverick, to Imperial Tobacco Group in June 2015 for $7 billion.
From the time of the tobacco settlement in 1997 through 2015, RJR paid the state tens of millions of dollars annually for these cigarette brands in compliance with the historic settlement. After the June 2015 sale, RJR stopped making payments on these brands, costing the state an estimated $30 million a year in perpetuity.
“Today’s ruling will ensure Florida’s landmark tobacco settlement is honored and our state receives the money it is owed,” said Attorney General Bondi. “My office is committed to pursuing all appropriate remedies when companies try to evade their monetary obligations to the State of Florida.”
RJR’s refusal to pay the agreed to settlement money led to Attorney General Bondi filing an enforcement motion on Jan. 18, 2017. The enforcement motion was the subject of a three-day bench trial before the Honorable Jeffrey Dana Gillen on Dec. 18-20. Judge Gillen today ruled that “Reynolds is still obligated to make the payments pursuant to the Florida Agreement.”
After the entry of the order requiring RJR to make all of the payments to Florida for the past and future sales of these cigarettes, the next step in the lawsuit will involve RJR and ITG providing the necessary information to accurately calculate the amounts owed pursuant to reporting requirements under the settlement agreement.
To view a copy of the trial court’s order granting the enforcement motion, click here.
The historic 1997 settlement resolved Florida’s landmark 1995 lawsuit against RJR and the other major tobacco companies seeking relief from decades of past unlawful actions relating to the marketing and sale of cigarettes. The annual, perpetual payments compensate Florida for the past and future public health care expenses from its citizens’ consumption of the settling defendants’ cigarettes.
Happy New Year and no net neutrality for Comcast and Cox and other ISPs: At least three major ISPs have already announced significant price hikes for 2018. News of the increases comes just days after the FCC voted to roll back net neutrality protections.
From: https://www.digitalmusicnews.com/2017/12/19/comcast-cox-frontier-net-neutrality/ Additional credit: Karl Bode of DSLReports
The timing of this couldn’t be worse. But maybe that’s not a concern for major ISPs. Accordingly, at least three major ISPs have now announced rate hikes for 2018.
That is, January, 2018. So customers have very little time to react, modify their plans, or even cancel their accounts.
Recently, Karl Bode of DSLReports caught wind of numerous increases at mega-ISP Comcast. But that is simply the latest in a string of planned increases by the likes of Cox, Frontier, and even DirecTV and Dish Network.
In all cases, these are increases for essentially the same services, with Bode noting that American will be stuck paying ‘significantly more money for the same service in the new year’. In many cases, the changes are padded into existing bills, with most consumers failing to see the changes.
In the case of Comcast, increases are happening across the board.
That includes rates for conventional cable TV, but also a range of internet and internet-based services. “Even Comcast’s streaming TV service Instant TV, barely a year old, is seeing price hikes,” Bode noted.
“Users that subscribe to this service can expect to pay $3 to $3.50 more per month in the new year.”
Additionally, Comcast is jacking up its modem rental fees by 10%. “Modem rental fees will be bumped $1 to $11 per month, while missed payment fees are also being increased fifty cents to $10,” the report continues.
That’s likely the beginning of far broader increases.
Another major ISP, Cox, is increasing the rates for all of its internet service packages.Here’s a quick rundown of those increases, based on a notice sent to Cox subscribers.
Starter will change from $34.99 to $36.99.
Essential will change from $52.99 to $55.99.
Preferred will change from $67.99 to $71.99.
Preferred 100 will change from $72.99 to $76.99.
Premier will change from $79.99 to $82.99.
That’s on top of a range of other increases affecting Cox’s cable TV packages, and are effective as of January, 2018. The rates were officially announced on December 9th, just days before net neutrality provisions were officially scrapped.
Similarly, Frontier Communications is tacking on a sneaky surcharge for internet customers.
Specifically, Frontier is wedging a $2 ‘Internet Infrastructure Surcharge’ onto most accounts. That includes promotional deals, which are advertised as being cheaper, but leave out a lot of hidden fees. “Beginning with this bill, customers not on an Internet Service term agreement, price protection plan or subject to other exclusions will be assessed a $1.99 per month Internet Infrastructure surcharge,” a Frontier notice states.
Other shoes dropping soon.
Both DirecTV and Dish are enacting heavy increases for most packages in 2018. At this stage, we’re not sure if packaged internet deals are getting affected (at least for 2018). Eventually, we’re betting they will.
We haven’t seen any (recent) changes from Charter, Verizon, and AT&T’s U-verse. But maybe they’re waiting until after Christmas.
Author credit: Paul Resnikoff
From: https://www.digitalmusicnews.com/2017/12/19/comcast-cox-frontier-net-neutrality/ Additional credit: Karl Bode of DSLReports
The timing of this couldn’t be worse. But maybe that’s not a concern for major ISPs. Accordingly, at least three major ISPs have now announced rate hikes for 2018.
That is, January, 2018. So customers have very little time to react, modify their plans, or even cancel their accounts.
Recently, Karl Bode of DSLReports caught wind of numerous increases at mega-ISP Comcast. But that is simply the latest in a string of planned increases by the likes of Cox, Frontier, and even DirecTV and Dish Network.
In all cases, these are increases for essentially the same services, with Bode noting that American will be stuck paying ‘significantly more money for the same service in the new year’. In many cases, the changes are padded into existing bills, with most consumers failing to see the changes.
In the case of Comcast, increases are happening across the board.
That includes rates for conventional cable TV, but also a range of internet and internet-based services. “Even Comcast’s streaming TV service Instant TV, barely a year old, is seeing price hikes,” Bode noted.
“Users that subscribe to this service can expect to pay $3 to $3.50 more per month in the new year.”
Additionally, Comcast is jacking up its modem rental fees by 10%. “Modem rental fees will be bumped $1 to $11 per month, while missed payment fees are also being increased fifty cents to $10,” the report continues.
That’s likely the beginning of far broader increases.
Another major ISP, Cox, is increasing the rates for all of its internet service packages.Here’s a quick rundown of those increases, based on a notice sent to Cox subscribers.
Starter will change from $34.99 to $36.99.
Essential will change from $52.99 to $55.99.
Preferred will change from $67.99 to $71.99.
Preferred 100 will change from $72.99 to $76.99.
Premier will change from $79.99 to $82.99.
That’s on top of a range of other increases affecting Cox’s cable TV packages, and are effective as of January, 2018. The rates were officially announced on December 9th, just days before net neutrality provisions were officially scrapped.
Similarly, Frontier Communications is tacking on a sneaky surcharge for internet customers.
Specifically, Frontier is wedging a $2 ‘Internet Infrastructure Surcharge’ onto most accounts. That includes promotional deals, which are advertised as being cheaper, but leave out a lot of hidden fees. “Beginning with this bill, customers not on an Internet Service term agreement, price protection plan or subject to other exclusions will be assessed a $1.99 per month Internet Infrastructure surcharge,” a Frontier notice states.
Other shoes dropping soon.
Both DirecTV and Dish are enacting heavy increases for most packages in 2018. At this stage, we’re not sure if packaged internet deals are getting affected (at least for 2018). Eventually, we’re betting they will.
We haven’t seen any (recent) changes from Charter, Verizon, and AT&T’s U-verse. But maybe they’re waiting until after Christmas.
Author credit: Paul Resnikoff
SEAFOOD IMPORT bEZOS wALTON
See Court opinion: La. Not Bound By Flonase Antitrust Settlement: 3rd Circ.
The Third Circuit finds that a class action antitrust settlement GlaxoSmithKline involving efforts to stymie generic competition for Flonase nasal spray did not bar the state of Louisiana from pursuing its own claims over the drug.
While GSK argued that the federal courts had authority to require Louisiana’s attorney general to abide by the $150 million settlement, which included a release of future claims over its activity, a three-judge panel found that such a holding would violate the state’s sovereign immunity under the 11th Amendment.
“In approving the settlement agreement, the district court lacked jurisdiction over the state because the Eleventh Amendment applies to the primary case and because Louisiana did not waive its sovereign immunity in that case,” the opinion said.
Credit: Law360
The opinion is here:
http://www2.ca3.uscourts.gov/opinarch/161124p.pdf
The Third Circuit finds that a class action antitrust settlement GlaxoSmithKline involving efforts to stymie generic competition for Flonase nasal spray did not bar the state of Louisiana from pursuing its own claims over the drug.
While GSK argued that the federal courts had authority to require Louisiana’s attorney general to abide by the $150 million settlement, which included a release of future claims over its activity, a three-judge panel found that such a holding would violate the state’s sovereign immunity under the 11th Amendment.
“In approving the settlement agreement, the district court lacked jurisdiction over the state because the Eleventh Amendment applies to the primary case and because Louisiana did not waive its sovereign immunity in that case,” the opinion said.
Credit: Law360
The opinion is here:
http://www2.ca3.uscourts.gov/opinarch/161124p.pdf
From the Watertown newspaper in upstate New York: Locals seek to save failing local mall with local retail businesses and local crafts
The North Country Showcase Inc., store has opened at the Massena mall.
The store is the first attempt by local investors pooling money to create an entity to help sell the products of vendors throughout the north country region.
Karen M. St. Hilaire, president of the venture, said the long-term goal is to enhance and create other small business opportunities using the same model of community ownership, in an effort to build a stronger and more diversified economy.
“I have to say it is incredible to me how we have been able to put together this business that has products from 32 vendors from across a huge geographic region, and we have been able to do it in one year and on less than $10,000,” Ms. St. Hilaire said.
Opening a brick-and-mortar store is just the first step in expanding the effort across the north country, according to Ms. St. Hilaire. She said Northern New York has always been rich in human and natural resources, and that organizing a way to showcase what the region has to offer has always been needed.
“This business, the one we are opening today, we see it as a vehicle to help other small businesses, and in particular to help those people who produce things here in a seven county region of New York state,” Ms. St. Hilaire said. “So our goal is to help be the marketer, if you will, of 32-plus businesses and to help them to sell their products, to produce more sales and hopefully spur new businesses to join in.”
Ms. St. Hilaire said she and others are now working to create a well-structured online presence to push sales outside the region.
“Within six months we hope to have a very robust e-commerce branch, aimed at doing whatever it is we can do to push sales,” she said. “And quite frankly, I think it is going to be much bigger than sales we will have here in the bricks and mortar storefront. But we need both.”
In addition to promoting entrepreneurship, the efforts of the RIOT group in creating North Country Showcase Inc. have sparked fresh hope for a revitalized St. Lawrence Centre mall. The struggling retail facility, built in 1990, was recently purchased by the Shapiro Group of Montreal and is being operated by its subsidiary, St. Lawrence Centre Group.
Erika A. Leonard, manager of the mall, said the new owners are making plans to turn the mall’s hockey arena into a year-round indoor turf field and athletic facility, and are working to find new anchor stores and other retailers.
She said the North Country Showcase store’s opening represents the fresh start the new mall owners envision.
“It’s very exciting because this is the first store that we’ve had a grand opening for, so this is going to show the community that we’re here, we’re open for business and we are working on getting the retailers in here as well as the entertainment to get more traffic through the mall,” Ms. Leonard said.
Ms. Leonard said other plans call for opening a 12-theater cinema complex at the mall.
“Like most mall restructurings nowadays, the vision is to make this an entertainment-slash-retail mall,” she said.
Massena Town Supervisor Joseph D. Gray and Village Mayor Timothy Currier both said that the opening of the North Country Showcase store is more proof that the community continues to reinvent itself and remains a vibrant and resilient part of the region.
“This is another good sign we have been seeing,” Mr. Currier said. “We are seeing monthly increases in traffic at the [Canadian] border crossing, the housing market has improved, and we are seeing some new businesses in the community.”
Mr. Gray agreed, pointing out that in his opinion, improvements at the mall and the early success of those involved in the North Country Showcase project, stand in sharp contrast to those naysayers in the region who talk of Massena’s decline.
“We can’t rely on the big three any more, because they ain’t here,” Mr. Gray said in reference to the community’s mostly shuttered industries. “We need to figure out what we are going to do and this is a good step in the direction we need. We need to determine our own best interests, rather than relying on someone from the outside to come in and save us, we need to save ourselves and we’re doing that.”
Credit: http://www.watertowndailytimes.com/news05/north-country-showcase-prompts-talk-of-regions-resurgence-20170709
Editor's note: Merry Christmas, and a Happy New Year to the residents of New York's north country, and my their business ventures prosper.
The North Country Showcase Inc., store has opened at the Massena mall.
The store is the first attempt by local investors pooling money to create an entity to help sell the products of vendors throughout the north country region.
Karen M. St. Hilaire, president of the venture, said the long-term goal is to enhance and create other small business opportunities using the same model of community ownership, in an effort to build a stronger and more diversified economy.
“I have to say it is incredible to me how we have been able to put together this business that has products from 32 vendors from across a huge geographic region, and we have been able to do it in one year and on less than $10,000,” Ms. St. Hilaire said.
Opening a brick-and-mortar store is just the first step in expanding the effort across the north country, according to Ms. St. Hilaire. She said Northern New York has always been rich in human and natural resources, and that organizing a way to showcase what the region has to offer has always been needed.
“This business, the one we are opening today, we see it as a vehicle to help other small businesses, and in particular to help those people who produce things here in a seven county region of New York state,” Ms. St. Hilaire said. “So our goal is to help be the marketer, if you will, of 32-plus businesses and to help them to sell their products, to produce more sales and hopefully spur new businesses to join in.”
Ms. St. Hilaire said she and others are now working to create a well-structured online presence to push sales outside the region.
“Within six months we hope to have a very robust e-commerce branch, aimed at doing whatever it is we can do to push sales,” she said. “And quite frankly, I think it is going to be much bigger than sales we will have here in the bricks and mortar storefront. But we need both.”
In addition to promoting entrepreneurship, the efforts of the RIOT group in creating North Country Showcase Inc. have sparked fresh hope for a revitalized St. Lawrence Centre mall. The struggling retail facility, built in 1990, was recently purchased by the Shapiro Group of Montreal and is being operated by its subsidiary, St. Lawrence Centre Group.
Erika A. Leonard, manager of the mall, said the new owners are making plans to turn the mall’s hockey arena into a year-round indoor turf field and athletic facility, and are working to find new anchor stores and other retailers.
She said the North Country Showcase store’s opening represents the fresh start the new mall owners envision.
“It’s very exciting because this is the first store that we’ve had a grand opening for, so this is going to show the community that we’re here, we’re open for business and we are working on getting the retailers in here as well as the entertainment to get more traffic through the mall,” Ms. Leonard said.
Ms. Leonard said other plans call for opening a 12-theater cinema complex at the mall.
“Like most mall restructurings nowadays, the vision is to make this an entertainment-slash-retail mall,” she said.
Massena Town Supervisor Joseph D. Gray and Village Mayor Timothy Currier both said that the opening of the North Country Showcase store is more proof that the community continues to reinvent itself and remains a vibrant and resilient part of the region.
“This is another good sign we have been seeing,” Mr. Currier said. “We are seeing monthly increases in traffic at the [Canadian] border crossing, the housing market has improved, and we are seeing some new businesses in the community.”
Mr. Gray agreed, pointing out that in his opinion, improvements at the mall and the early success of those involved in the North Country Showcase project, stand in sharp contrast to those naysayers in the region who talk of Massena’s decline.
“We can’t rely on the big three any more, because they ain’t here,” Mr. Gray said in reference to the community’s mostly shuttered industries. “We need to figure out what we are going to do and this is a good step in the direction we need. We need to determine our own best interests, rather than relying on someone from the outside to come in and save us, we need to save ourselves and we’re doing that.”
Credit: http://www.watertowndailytimes.com/news05/north-country-showcase-prompts-talk-of-regions-resurgence-20170709
Editor's note: Merry Christmas, and a Happy New Year to the residents of New York's north country, and my their business ventures prosper.
A.G. Schneiderman: I Will Sue To Stop Illegal Rollback Of Net Neutrality
A.G. Schneiderman Will Lead Multistate Lawsuit:
AG’s Investigation into 2 Million Comments that Stole Real Americans’ Identities Also Continues
Click Here for Video of AG Schneiderman Discussing the Vote and His Intent to Sue
Today, New York Attorney General Eric T. Schneiderman released the following statement upon the Federal Communications Commission’s vote, announcing that he will lead a multistate lawsuit to stop the rollback of net neutrality:
“The FCC’s vote to rip apart net neutrality is a blow to New York consumers, and to everyone who cares about a free and open internet. The FCC just gave Big Telecom an early Christmas present, by giving internet service providers yet another way to put corporate profits over consumers. Today’s rollback will give ISPs new ways to control what we see, what we do, and what we say online. That’s a threat to the free exchange of ideas that’s made the Internet a valuable asset in our democratic process.
Today’s new rule would enable ISPs to charge consumers more to access sites like Facebook and Twitter and give them the leverage to degrade high quality of video streaming until and unless somebody pays them more money. Even worse, today’s vote would enable ISPs to favor certain viewpoints over others.
New Yorkers deserve the right to a free and open Internet. That’s why we will sue to stop the FCC’s illegal rollback of net neutrality.
Today’s vote also follows a public comment process that was deeply corrupted, including two million comments that stole the identities of real people. This is a crime under New York law – and the FCC’s decision to go ahead with the vote makes a mockery of government integrity and rewards the very perpetrators who scammed the system to advance their own agenda.
This is not just an attack on the future of our internet. It’s an attack on all New Yorkers, and on the integrity of every American's voice in government – and we will fight back.”
For seven months, Attorney General Schneiderman has been investigating the flood of fake comments submitted during the net neutrality comment process. The Attorney General’s latest analysis shows that two million comments stole the identities of real Americans – including over 100,000 comments per state from New York, Florida, Texas, and California. Yet the FCC has repeatedly refused to cooperate with the Attorney General’s investigation, despite widespread evidence that the public comment process was corrupted.
SEE ag.ny.gov/press-release/ag-schneiderman-i-will-sue-stop-illegal-rollback-net-neutrality
A.G. Schneiderman Will Lead Multistate Lawsuit:
AG’s Investigation into 2 Million Comments that Stole Real Americans’ Identities Also Continues
Click Here for Video of AG Schneiderman Discussing the Vote and His Intent to Sue
Today, New York Attorney General Eric T. Schneiderman released the following statement upon the Federal Communications Commission’s vote, announcing that he will lead a multistate lawsuit to stop the rollback of net neutrality:
“The FCC’s vote to rip apart net neutrality is a blow to New York consumers, and to everyone who cares about a free and open internet. The FCC just gave Big Telecom an early Christmas present, by giving internet service providers yet another way to put corporate profits over consumers. Today’s rollback will give ISPs new ways to control what we see, what we do, and what we say online. That’s a threat to the free exchange of ideas that’s made the Internet a valuable asset in our democratic process.
Today’s new rule would enable ISPs to charge consumers more to access sites like Facebook and Twitter and give them the leverage to degrade high quality of video streaming until and unless somebody pays them more money. Even worse, today’s vote would enable ISPs to favor certain viewpoints over others.
New Yorkers deserve the right to a free and open Internet. That’s why we will sue to stop the FCC’s illegal rollback of net neutrality.
Today’s vote also follows a public comment process that was deeply corrupted, including two million comments that stole the identities of real people. This is a crime under New York law – and the FCC’s decision to go ahead with the vote makes a mockery of government integrity and rewards the very perpetrators who scammed the system to advance their own agenda.
This is not just an attack on the future of our internet. It’s an attack on all New Yorkers, and on the integrity of every American's voice in government – and we will fight back.”
For seven months, Attorney General Schneiderman has been investigating the flood of fake comments submitted during the net neutrality comment process. The Attorney General’s latest analysis shows that two million comments stole the identities of real Americans – including over 100,000 comments per state from New York, Florida, Texas, and California. Yet the FCC has repeatedly refused to cooperate with the Attorney General’s investigation, despite widespread evidence that the public comment process was corrupted.
SEE ag.ny.gov/press-release/ag-schneiderman-i-will-sue-stop-illegal-rollback-net-neutrality
Bloomberg's quick take on net neutrality debate:
from https://www.bloomberg.com/quicktake/net-neutrality
By Gerry Smith
Updated on December 14, 2017, 7:24 AM EST
The internet is a set of pipes. It’s also a set of values. Whose? The people who consider it a great social equalizer, a playing field that has to be level? Or the ones who own the network and consider themselves best qualified to manage it? It’s a philosophical contest fought under the banner of “net neutrality,” a slogan that inspires rhetorical devotion but eludes precise definition. Broadly, it means everything on the internet should be equally accessible — that the internet should be a place where great ideas compete on equal terms with big money. Even in the contentious arena of net neutrality, that’s a principle everybody claims to honor. But the U.S. is preparing to do a big U-turn on how to interpret it.
The Situation
At the start of his presidency, Donald Trump picked Ajit Pai, a Republican member of the U.S. Federal Communications Commission and longtime foe of net neutrality regulation, to head the agency. In November, Pai proposed to vacate net neutrality rules that had been enacted under Democratic President Barack Obama. The FCC is voting on the change Dec. 14. The 2015 rules had imposed increased government oversight of broadband traffic. Internet service providers became treated as public utilities and were forbidden from blocking or slowing rivals’ content. The rules also applied open-internet protections to wireless services for tablets and smartphones. After Pai first proposed the idea of gutting net neutrality rules back in May, websites and internet organizations promoted a “day of action” to save net neutrality. Reddit, the social news and discussion site, made its point with a pop-up message that slowly typed out letter by letter: “The internet’s less fun when your favorite sites load slowly, isn’t it?” Both the Obama administration and internet service providers, which had fought the rules, said they wanted an open internet and “net neutrality,” an idea also embraced by other countries with widely varying definitions of the principle.
The Background
The term “network neutrality” was coined in 2002 by Tim Wu, a law professor and author. He argued that no authority should be able to decide what kind of information was and wasn’t allowed on the internet. But Wu also recognized the expense of maintaining network hardware, so he proposed that providers should be allowed to charge based on usage. People would pay for more bandwidth, not for access to certain sites. In 2005, the FCC released a statement turning Wu’s principles into policies. When Comcast interfered with access to web networks that used a lot of bandwidth and enabled trading of pirated content, the FCC balked in 2008. Comcast sued, and won. The FCC set new rules and Verizon then challenged them, winning in a U.S. court in early 2014. This started the process for what became the 2015 rules.
The Argument
Supporters say that with internet use and related costs rising fast, the FCC needed net neutrality power to force a shrinking handful of powerful internet service providers to treat all web traffic equally. Small startup companies argue that without strong net neutrality rules, internet providers could slow their content or charge them for unimpeded access to their audience. Supporters also note that the regulation survived a federal appeals court challenge from broadband providers in 2016. Many Republicans have sided with internet providers who said that more regulation deters investment in a better internet. In announcing the proposed rules change in November, FCC Chairman Pai said he was looking forward to returning to a “light-touch, market-based framework.” Opponents of the rules had also challenged the FCC’s legal right to upend the old regulatory framework that was in place as companies spent billions of dollars to build high-speed internet networks. Beneath the legal and policy questions lies a philosophical one: Who owns the internet? Providers who pay to maintain it? Consumers who pay to connect to it? Content companies whose services depend on it? Who balances their competing interests?
The Reference Shelf
from https://www.bloomberg.com/quicktake/net-neutrality
By Gerry Smith
Updated on December 14, 2017, 7:24 AM EST
The internet is a set of pipes. It’s also a set of values. Whose? The people who consider it a great social equalizer, a playing field that has to be level? Or the ones who own the network and consider themselves best qualified to manage it? It’s a philosophical contest fought under the banner of “net neutrality,” a slogan that inspires rhetorical devotion but eludes precise definition. Broadly, it means everything on the internet should be equally accessible — that the internet should be a place where great ideas compete on equal terms with big money. Even in the contentious arena of net neutrality, that’s a principle everybody claims to honor. But the U.S. is preparing to do a big U-turn on how to interpret it.
The Situation
At the start of his presidency, Donald Trump picked Ajit Pai, a Republican member of the U.S. Federal Communications Commission and longtime foe of net neutrality regulation, to head the agency. In November, Pai proposed to vacate net neutrality rules that had been enacted under Democratic President Barack Obama. The FCC is voting on the change Dec. 14. The 2015 rules had imposed increased government oversight of broadband traffic. Internet service providers became treated as public utilities and were forbidden from blocking or slowing rivals’ content. The rules also applied open-internet protections to wireless services for tablets and smartphones. After Pai first proposed the idea of gutting net neutrality rules back in May, websites and internet organizations promoted a “day of action” to save net neutrality. Reddit, the social news and discussion site, made its point with a pop-up message that slowly typed out letter by letter: “The internet’s less fun when your favorite sites load slowly, isn’t it?” Both the Obama administration and internet service providers, which had fought the rules, said they wanted an open internet and “net neutrality,” an idea also embraced by other countries with widely varying definitions of the principle.
The Background
The term “network neutrality” was coined in 2002 by Tim Wu, a law professor and author. He argued that no authority should be able to decide what kind of information was and wasn’t allowed on the internet. But Wu also recognized the expense of maintaining network hardware, so he proposed that providers should be allowed to charge based on usage. People would pay for more bandwidth, not for access to certain sites. In 2005, the FCC released a statement turning Wu’s principles into policies. When Comcast interfered with access to web networks that used a lot of bandwidth and enabled trading of pirated content, the FCC balked in 2008. Comcast sued, and won. The FCC set new rules and Verizon then challenged them, winning in a U.S. court in early 2014. This started the process for what became the 2015 rules.
The Argument
Supporters say that with internet use and related costs rising fast, the FCC needed net neutrality power to force a shrinking handful of powerful internet service providers to treat all web traffic equally. Small startup companies argue that without strong net neutrality rules, internet providers could slow their content or charge them for unimpeded access to their audience. Supporters also note that the regulation survived a federal appeals court challenge from broadband providers in 2016. Many Republicans have sided with internet providers who said that more regulation deters investment in a better internet. In announcing the proposed rules change in November, FCC Chairman Pai said he was looking forward to returning to a “light-touch, market-based framework.” Opponents of the rules had also challenged the FCC’s legal right to upend the old regulatory framework that was in place as companies spent billions of dollars to build high-speed internet networks. Beneath the legal and policy questions lies a philosophical one: Who owns the internet? Providers who pay to maintain it? Consumers who pay to connect to it? Content companies whose services depend on it? Who balances their competing interests?
The Reference Shelf
- Professor Tim Wu coined the phrase “network neutrality” in a 2002 paper.
- A Wired magazine article untangles some confusion over “fast lanes.”
- Title II of the Communications Act of 1934 sets forth regulations “common carriers” must follow “in the public interest,” and the 2015 open internet order.
- The comedian John Oliver had strong feelings about net neutrality (boring and “hugely important”) in 2014 and in May called for people to contact the FCC about the issue.
-
From PBS news hour: EPA v States on drinking water pollutants
See:
https://www.pbs.org/newshour/show/long-island-residents-worry-their-tap-water-is-unsafe
Local consumer advocates worry that the EPA is too slow to provide protection against newly identified pollutants. In the absence of EPA action it falls to local authorities to consider possible precautions. The precautions can be expensive, and are controversial.
See:
https://www.pbs.org/newshour/show/long-island-residents-worry-their-tap-water-is-unsafe
Local consumer advocates worry that the EPA is too slow to provide protection against newly identified pollutants. In the absence of EPA action it falls to local authorities to consider possible precautions. The precautions can be expensive, and are controversial.
Cape Fear Public Utility Authority (“CFPUA”), sues Chemours and DuPont for chemical dumping affecting water supplies.
The Complaint alleges that for over three decades DuPont and later Chemours have been manufacturing and/or using perfluoroalkyl and polyfluoroalkyl substances (“PFASs”), and quietly releasing or discharging PFASs and associated wastes contaminated by those chemicals (collectively “Fluoropollutants”) at their Fayetteville Works Facility. During that time, Defendants withheld from state regulators and the public information regarding both the identity of the Fluoropollutants being discharged and information related to the safety of those Fluoropollutants. . Moreover, Defendants have deliberately evaded accountability for, and scrutiny of, their releases of toxic Fluoropollutants.
Facing multiple lawsuits and EPA pressure over its use and releases of one PFAS, perfluorooctanoic acid (“PFOA”), DuPont publicly discontinued its manufacture and use of that PFAS, but privately replaced it with “GenX”—a set of 2 structurally and functionally similar PFASs, with similar harmful effects—that Defendants could then release into the environment without public notice. Defendants’ strategy amounts to a toxic chemical shell game, played at the expense of the lower Cape Fear River and those who use it for potable water.
The Complaint is here: http:/wwwcache.wral.com/asset/news/state/2017/10/17/17022284/CFPUA_v._Chemours__DuPont-DMID1-5cgv0c9v6.pdf
The Complaint alleges that for over three decades DuPont and later Chemours have been manufacturing and/or using perfluoroalkyl and polyfluoroalkyl substances (“PFASs”), and quietly releasing or discharging PFASs and associated wastes contaminated by those chemicals (collectively “Fluoropollutants”) at their Fayetteville Works Facility. During that time, Defendants withheld from state regulators and the public information regarding both the identity of the Fluoropollutants being discharged and information related to the safety of those Fluoropollutants. . Moreover, Defendants have deliberately evaded accountability for, and scrutiny of, their releases of toxic Fluoropollutants.
Facing multiple lawsuits and EPA pressure over its use and releases of one PFAS, perfluorooctanoic acid (“PFOA”), DuPont publicly discontinued its manufacture and use of that PFAS, but privately replaced it with “GenX”—a set of 2 structurally and functionally similar PFASs, with similar harmful effects—that Defendants could then release into the environment without public notice. Defendants’ strategy amounts to a toxic chemical shell game, played at the expense of the lower Cape Fear River and those who use it for potable water.
The Complaint is here: http:/wwwcache.wral.com/asset/news/state/2017/10/17/17022284/CFPUA_v._Chemours__DuPont-DMID1-5cgv0c9v6.pdf
The Consumer Reports article on the CVS-Aetna proposed merger
The article says this:
[S]ome consumer advocates and antitrust experts are skeptical that consumers will reap any cost savings from this merger and say that continued consolidation in the healthcare marketplace only hurts consumers.
“The health insurance and retail pharmacy markets are already highly concentrated, with just a few big insurers and pharmacies dominating,” says George Slover, senior policy counsel for Consumers Union, the policy and mobilization division of Consumer Reports. He says the combination could lead to fewer choices for consumers. . . .
Big mergers have a poor track record of delivering lower prices to customers, says Diana Moss, president of the American Antitrust Institute, a nonprofit that does research and advocacy on antitrust issues. “There are no guarantees that any cost savings realized will be passed onto consumers.”
The comments from George Slover and Diana Moss suggest where to look for consumer harm from a merger. (Of course, the discussion can be complex, and any suggestions incorrectly drawn from their comments is this writer's responsibility, not theirs.) An Aetna customer for self-administered prescription medicines, for example, may lose choices of which pharmacies to use, and be pushed to use CVS retail pharmacy services. That will enhance CVS's already strong position in retail sales of self-administered prescription medicines. The customer may be faced with higher prices because of that enhanced position of CVS as a retailer, and her loss of the ability to select a rival pharmacy. Also, CVS, which is one of a few very powerful players in the market for pharmacy benefit manager (PBM) services, with many insurance company customers, may use merger-enhanced power to favor Aetna with regard to PBM services in negotiating lower prices from manufacturers for prescription drugs, thereby raising costs for Aetna's rivals in the relevant health insurance markets.
To the extent CVS can use its PBM services to obtain lower manufacturer prices for prescription drugs, there is little reason to think savings will be passed on to consumers. PBMs already have a history of complaints that savings the obtain are not passed on. As Diana Moss says, big mergers have a poor record of delivering lower prices to consumers.
The Consumer Reports article is here: https://www.consumerreports.org/health-insurance/how-big-healthcare-mergers-like-cvs-and-aetna-could-affect-you/
From AAI:
Diana Moss to Testify on Antitrust and the Consumer Welfare Standard
AAI President Diana Moss will testify before the U.S. Senate Committee on the Judiciary, Subcommittee on Antitrust, Competition and Consumer Rights on December 13, 2017. The subject of the hearing is "Consumer Welfare Standard in Antitrust: Outdated or a Harbor In a Sea of Doubt?" The hearing can be streamed live.
Moss's testimony, available here, addresses three major issues: One is "climate change" around antitrust and important context for the debate over competition enforcement. A second is the adequacy of the existing approach to antitrust enforcement, the consumer welfare standard, and the vital importance of vigorous enforcement. Moss concludes by identifying priorities for addressing the challenges facing antitrust enforcement and competition policy moving forward.
AAI Applauds Move to Block AT&T-Time Warner Merger, Sets Record Straight on Vertical Merger Enforcement
AAI issued a commentary on the U.S. Department of Justice's (DOJ's) recent move to block the proposed merger of AT&T and Time Warner. AAI applauds the government's decision. It reflects sound enforcement of Section 7 of the Clayton Act in an area of merger control that has been of concern to many policymakers for years. The government has laid out a strong case for how the merger could potentially harm the competitive process and consumers. And contrary to some claims, the DOJ's move to block the merger is supported by a long-standing record of enforcement on vertical mergers.
Read More
AAI Warns USTR Against Import Restrictions on Washing Machines That Would Stand Competition Policy on Its Head
AAI has filed has filed comments with the Office of the U.S. Trade Representative opposing the imposition of "safeguard restrictions" on the import of Large Residential Washers (LRWs) under Section 201 of the Trade Act.
Read More
Diana Moss to Testify on Antitrust and the Consumer Welfare Standard
AAI President Diana Moss will testify before the U.S. Senate Committee on the Judiciary, Subcommittee on Antitrust, Competition and Consumer Rights on December 13, 2017. The subject of the hearing is "Consumer Welfare Standard in Antitrust: Outdated or a Harbor In a Sea of Doubt?" The hearing can be streamed live.
Moss's testimony, available here, addresses three major issues: One is "climate change" around antitrust and important context for the debate over competition enforcement. A second is the adequacy of the existing approach to antitrust enforcement, the consumer welfare standard, and the vital importance of vigorous enforcement. Moss concludes by identifying priorities for addressing the challenges facing antitrust enforcement and competition policy moving forward.
AAI Applauds Move to Block AT&T-Time Warner Merger, Sets Record Straight on Vertical Merger Enforcement
AAI issued a commentary on the U.S. Department of Justice's (DOJ's) recent move to block the proposed merger of AT&T and Time Warner. AAI applauds the government's decision. It reflects sound enforcement of Section 7 of the Clayton Act in an area of merger control that has been of concern to many policymakers for years. The government has laid out a strong case for how the merger could potentially harm the competitive process and consumers. And contrary to some claims, the DOJ's move to block the merger is supported by a long-standing record of enforcement on vertical mergers.
Read More
AAI Warns USTR Against Import Restrictions on Washing Machines That Would Stand Competition Policy on Its Head
AAI has filed has filed comments with the Office of the U.S. Trade Representative opposing the imposition of "safeguard restrictions" on the import of Large Residential Washers (LRWs) under Section 201 of the Trade Act.
Read More
AAI's Bert Foer's words of wisdom on antitrust advocacy, from a 2015 article:
As the attacks by big businesses and their advocates mount against class actions and as the courts clamp down on antitrust processes in favor of defendants, it becomes increasingly difficult for victims of anticompetitive conduct to gain fair compensation. This undermines the deterrent force of the antitrust laws, as well as the potential for broad civil society support of the antitrust enterprise. For example, recent judicial decisions have forced plaintiffs to defend their economic case much earlier in the process, often before substantial discovery, which raises the risks and costs of bringing a case. In a field that depends on contingent fee funding, as the costs go up and other trends contribute to a reduced likelihood of success,47 the result appears to be that many valid claims for recovery will necessarily go unrepresented. Thus, protection of the antitrust class action, even while supporting legitimate efforts to make it work more efficiently, will be critical to AAI’s mission.
The largest risk going forward is political. Unless legislators see more value in antitrust, erosion of private remedies will continue, and public enforcement will suffer from inadequate funding as well as the narrowing rulings of courts that generally do not like antitrust or simply do not like to handle complex antitrust cases. The education of judges and legislators is therefore going to be more important and probably more difficult than ever.
The primary gatekeepers to the public and, therefore, to the politicians are the media. Reporters must present antitrust developments clearly and in a way that highlights their importance, if the citizenry is to support antitrust in a political process where large contributors, bearing the benefits of corporate personhood under prevailing interpretations of the First Amendment, will have the advantage.48 Meanwhile, antitrust-knowledgeable journalists are disappearing behind electronic paywalls, such that only those willing to pay large subscription fees (i.e., investors, arbitrageurs, and law firms and their clients with much at stake, as compared to average citizens) will know what is going on with sufficient detail and precision to effectively influence the outcome. The enforcement agencies and the AAI need to work more creatively to help public-facing journalists understand and communicate the antitrust story.
Antitrust is faced with a particular political challenge because it represents a middle ground between heavy state intervention and laissez faire. Will the libertarian ideologies that disdain government prevail? Will the politics of economically unsophisticated populism prevail? Or can the antitrust intermediary continue to serve, while moving up or down the playing field between the forty yard lines, as a balancing and integrative force? Whether the center can hold goes beyond antitrust, but is crucial to antitrust’s future.
Antitrust must be viewed as part of a political system. It rests on the conception not only that competition is usually a good thing, but that change (we like to call it progress) is a good thing. It is fundamental to recognize that as better mousetraps are invented, there will be winners and losers. The prospect of becoming a loser—which must be faced even by the most successful businesses and their top management—creates deep social anxiety. Here is the paradox of modern capitalism: unless the political system can deal with that anxiety, the fear of losing out in a competitive regime, it is hard to believe that either a competition-based economy or its necessary control element, antitrust, will long survive.
The middle way demands a social welfare net that is widely perceived to be working, requiring liberals and conservatives to compromise in creative reforms that the current political standoff may not be able to produce. A tragedy of our times has been that the country has turned against government at the same time it has turned toward ever-freer markets—the libertarian equation. Markets are not a natural phenomenon, however. Their creation, maintenance, and efflorescence depend on government in numerous ways.49 Yes, government can act in anticompetitive ways, and this reality must always be a high concern for antitrust. In addition to direct regulation that unduly hampers market activity, there are many other ways in which government can be unnecessarily interventionist, ranging from tax policy to trade, intellectual property rights, and consumer protection. Getting the balance right is crucial. It is a task of politics in a democracy. At the center of this task is the role of antitrust.
The full article is at http://journals.sagepub.com/stoken/rbtfl/Kkz6kqJrOWK0c/full
As the attacks by big businesses and their advocates mount against class actions and as the courts clamp down on antitrust processes in favor of defendants, it becomes increasingly difficult for victims of anticompetitive conduct to gain fair compensation. This undermines the deterrent force of the antitrust laws, as well as the potential for broad civil society support of the antitrust enterprise. For example, recent judicial decisions have forced plaintiffs to defend their economic case much earlier in the process, often before substantial discovery, which raises the risks and costs of bringing a case. In a field that depends on contingent fee funding, as the costs go up and other trends contribute to a reduced likelihood of success,47 the result appears to be that many valid claims for recovery will necessarily go unrepresented. Thus, protection of the antitrust class action, even while supporting legitimate efforts to make it work more efficiently, will be critical to AAI’s mission.
The largest risk going forward is political. Unless legislators see more value in antitrust, erosion of private remedies will continue, and public enforcement will suffer from inadequate funding as well as the narrowing rulings of courts that generally do not like antitrust or simply do not like to handle complex antitrust cases. The education of judges and legislators is therefore going to be more important and probably more difficult than ever.
The primary gatekeepers to the public and, therefore, to the politicians are the media. Reporters must present antitrust developments clearly and in a way that highlights their importance, if the citizenry is to support antitrust in a political process where large contributors, bearing the benefits of corporate personhood under prevailing interpretations of the First Amendment, will have the advantage.48 Meanwhile, antitrust-knowledgeable journalists are disappearing behind electronic paywalls, such that only those willing to pay large subscription fees (i.e., investors, arbitrageurs, and law firms and their clients with much at stake, as compared to average citizens) will know what is going on with sufficient detail and precision to effectively influence the outcome. The enforcement agencies and the AAI need to work more creatively to help public-facing journalists understand and communicate the antitrust story.
Antitrust is faced with a particular political challenge because it represents a middle ground between heavy state intervention and laissez faire. Will the libertarian ideologies that disdain government prevail? Will the politics of economically unsophisticated populism prevail? Or can the antitrust intermediary continue to serve, while moving up or down the playing field between the forty yard lines, as a balancing and integrative force? Whether the center can hold goes beyond antitrust, but is crucial to antitrust’s future.
Antitrust must be viewed as part of a political system. It rests on the conception not only that competition is usually a good thing, but that change (we like to call it progress) is a good thing. It is fundamental to recognize that as better mousetraps are invented, there will be winners and losers. The prospect of becoming a loser—which must be faced even by the most successful businesses and their top management—creates deep social anxiety. Here is the paradox of modern capitalism: unless the political system can deal with that anxiety, the fear of losing out in a competitive regime, it is hard to believe that either a competition-based economy or its necessary control element, antitrust, will long survive.
The middle way demands a social welfare net that is widely perceived to be working, requiring liberals and conservatives to compromise in creative reforms that the current political standoff may not be able to produce. A tragedy of our times has been that the country has turned against government at the same time it has turned toward ever-freer markets—the libertarian equation. Markets are not a natural phenomenon, however. Their creation, maintenance, and efflorescence depend on government in numerous ways.49 Yes, government can act in anticompetitive ways, and this reality must always be a high concern for antitrust. In addition to direct regulation that unduly hampers market activity, there are many other ways in which government can be unnecessarily interventionist, ranging from tax policy to trade, intellectual property rights, and consumer protection. Getting the balance right is crucial. It is a task of politics in a democracy. At the center of this task is the role of antitrust.
The full article is at http://journals.sagepub.com/stoken/rbtfl/Kkz6kqJrOWK0c/full
The grass-roots campaign for public restroom facilities in DC
From a Washington Post article by Marcia Bernbaum:
Nearly three years ago, the People for Fairness Coalition launched the Downtown DC Public Restroom Initiative. We carried out a feasibility study to identify lessons learned and best practices from U.S. cities that in recent years have been successful in installing clean, safe, available public restrooms. We did an inventory of restrooms in private facilities in five D.C. neighborhoods: Gallery Place, Dupont Circle, Georgetown, the K Street corridor and Columbia Heights. And we carried out a comprehensive search to identify public restrooms open during the day as well as those open 24/7.
To our amazement, we found that there are only three public restrooms in all of the District that are open 24/7: those at Union Station, the Lincoln Memorial and the Jefferson Memorial — and there are no signs telling you how to get to them. Imagine it is late at night. You are walking down the street and urgently have to go to the bathroom. If you can’t make it and experience the misfortune of having no choice but to “go” outside and are caught by a police officer, you risk receiving a fine of up to $500, up to 90 days in jail or both. During the day, off the Mall there are only six public restrooms in downtown Washington, their hours are limited, and there are no signs to tell you where they are.
The situation isn’t much better when it comes to finding private facilities with restroom access. Forty-two of the 85 private facilities we visited in early 2015 permitted people who weren’t patrons to use their restrooms. When we visited the same facilities in early 2016, the number had dwindled to 28. And when we returned to the same facilities in mid-2017, only 11 (or 13 percent) permitted entry to non-patrons.
In April, D.C. Council members Brianne K. Nadeau (D-Ward 1), David Grosso (I-At Large), Elissa Silverman (I-At Large) and Robert C. White Jr. (D-At Large) introduced Bill 22-0223, the Public Restroom Facilities Installation and Promotion Act of 2017.
The bill would work toward creating public restrooms and establish an incentive for private businesses to make their restrooms available to the public. A public hearing on the bill is scheduled for Jan. 10.
The article is at https://www.washingtonpost.com/opinions/why-does-dc-have-so-few-public-restrooms/2017/12/15/951e3fde-cfcf-11e7-9d3a-bcbe2af58c3a_story.html?utm_term=.0c4ee853f14e
Kojo NNambi explores the new push for more clean and safe public restroom accommodations for all on his radio show. Listen at https://thekojonnamdishow.org/shows/2017-03-16/the-push-for-public-restrooms-in-d-c.
Guests
From a Washington Post article by Marcia Bernbaum:
Nearly three years ago, the People for Fairness Coalition launched the Downtown DC Public Restroom Initiative. We carried out a feasibility study to identify lessons learned and best practices from U.S. cities that in recent years have been successful in installing clean, safe, available public restrooms. We did an inventory of restrooms in private facilities in five D.C. neighborhoods: Gallery Place, Dupont Circle, Georgetown, the K Street corridor and Columbia Heights. And we carried out a comprehensive search to identify public restrooms open during the day as well as those open 24/7.
To our amazement, we found that there are only three public restrooms in all of the District that are open 24/7: those at Union Station, the Lincoln Memorial and the Jefferson Memorial — and there are no signs telling you how to get to them. Imagine it is late at night. You are walking down the street and urgently have to go to the bathroom. If you can’t make it and experience the misfortune of having no choice but to “go” outside and are caught by a police officer, you risk receiving a fine of up to $500, up to 90 days in jail or both. During the day, off the Mall there are only six public restrooms in downtown Washington, their hours are limited, and there are no signs to tell you where they are.
The situation isn’t much better when it comes to finding private facilities with restroom access. Forty-two of the 85 private facilities we visited in early 2015 permitted people who weren’t patrons to use their restrooms. When we visited the same facilities in early 2016, the number had dwindled to 28. And when we returned to the same facilities in mid-2017, only 11 (or 13 percent) permitted entry to non-patrons.
In April, D.C. Council members Brianne K. Nadeau (D-Ward 1), David Grosso (I-At Large), Elissa Silverman (I-At Large) and Robert C. White Jr. (D-At Large) introduced Bill 22-0223, the Public Restroom Facilities Installation and Promotion Act of 2017.
The bill would work toward creating public restrooms and establish an incentive for private businesses to make their restrooms available to the public. A public hearing on the bill is scheduled for Jan. 10.
The article is at https://www.washingtonpost.com/opinions/why-does-dc-have-so-few-public-restrooms/2017/12/15/951e3fde-cfcf-11e7-9d3a-bcbe2af58c3a_story.html?utm_term=.0c4ee853f14e
Kojo NNambi explores the new push for more clean and safe public restroom accommodations for all on his radio show. Listen at https://thekojonnamdishow.org/shows/2017-03-16/the-push-for-public-restrooms-in-d-c.
Guests
- Sheila White Member, People For Fairness Coalition
- Marcia Bernbaum Member, People For Fairness Coalition
- Brianne Nadeau Member, D.C. Council (D-Ward 1); @BrianneKNadeau
17 AGs To President Trump: Mulvaney's Attacks On CFPB Should Disqualify Him From Leading Agency
Coalition of 17 AGs Make Clear They’ll Redouble Efforts to Enforce Consumer Protection Laws, Even if CFPB Leadership Won’t
A coalition of 17 state Attorneys General have written President Trump to express unwavering support for the mission of the Consumer Financial Protection Bureau (CFPB), and made clear that state Attorneys General would continue to vigorously enforce consumer protection laws regardless of changes to the Bureau’s leadership or agenda.
“The CFPB has been a critical partner in protecting American consumers and holding fraudsters accountable. It deserves a leader who actually believes in its mission,” the letter said. “However, Attorneys General won’t hesitate to protect those we serve – with or without a partner in Washington.”
Joining New York Attorney General Schneiderman on the letter are the Attorney Generals of California, Connecticut, District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Mexico, North Carolina, Oregon, Vermont, Virginia, and Washington State.
Click here to read the full letter.
Coalition of 17 AGs Make Clear They’ll Redouble Efforts to Enforce Consumer Protection Laws, Even if CFPB Leadership Won’t
A coalition of 17 state Attorneys General have written President Trump to express unwavering support for the mission of the Consumer Financial Protection Bureau (CFPB), and made clear that state Attorneys General would continue to vigorously enforce consumer protection laws regardless of changes to the Bureau’s leadership or agenda.
“The CFPB has been a critical partner in protecting American consumers and holding fraudsters accountable. It deserves a leader who actually believes in its mission,” the letter said. “However, Attorneys General won’t hesitate to protect those we serve – with or without a partner in Washington.”
Joining New York Attorney General Schneiderman on the letter are the Attorney Generals of California, Connecticut, District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Mexico, North Carolina, Oregon, Vermont, Virginia, and Washington State.
Click here to read the full letter.
US: FCC and FTC agree to collaborate on monitoring Open Internet
The Federal Communications Commission (FCC) and Federal Trade Commission (FTC) have drafted a memorandum of understanding (MOU) on how they will divvy up enforcement of internet service providers’ (ISPs) promises and disclosures about their business practices and network management practices after the FCC eliminates most network neutrality rules.
After the rule rollback becomes official—it is scheduled to be voted on–and FCC Chairman Ajit Pai has said will be approved—December 14, the FCC will investigate and take actions against any violations of the order’s transparency requirements, under which ISPs have to disclose any blocking, throttling, paid prioritization or congestion management. That means if they don’t disclose what they are doing, the FCC’s Enforcement Bureau will handle it.
Under the agreement, the FTC will investigate ISPs for any divergence from what they say they are, or are not, doing, as well as any other practices the FTC deems unfair or deceptive. That unfairness could include anticompetitive blocking or throttling or paid prioritization.
“The Memorandum of Understanding will be a critical benefit for online consumers because it outlines the robust process by which the FCC and FTC will safeguard the public interest,” said FCC Chairman Ajit Pai in a statement. “Instead of saddling the Internet with heavy-handed regulations, we will work together to take targeted action against bad actors. This approach protected a free and open Internet for many years prior to the FCC’s 2015 Title II Order and it will once again following the adoption of the Restoring Internet Freedom Order.”
Rollback of the Net Neutrality rules is a controversial topic that is opposed by advocacy groups and Silicon Valley incumbent firms.
Full Content: Federal Trade Commission & Public Knowledge
The Federal Communications Commission (FCC) and Federal Trade Commission (FTC) have drafted a memorandum of understanding (MOU) on how they will divvy up enforcement of internet service providers’ (ISPs) promises and disclosures about their business practices and network management practices after the FCC eliminates most network neutrality rules.
After the rule rollback becomes official—it is scheduled to be voted on–and FCC Chairman Ajit Pai has said will be approved—December 14, the FCC will investigate and take actions against any violations of the order’s transparency requirements, under which ISPs have to disclose any blocking, throttling, paid prioritization or congestion management. That means if they don’t disclose what they are doing, the FCC’s Enforcement Bureau will handle it.
Under the agreement, the FTC will investigate ISPs for any divergence from what they say they are, or are not, doing, as well as any other practices the FTC deems unfair or deceptive. That unfairness could include anticompetitive blocking or throttling or paid prioritization.
“The Memorandum of Understanding will be a critical benefit for online consumers because it outlines the robust process by which the FCC and FTC will safeguard the public interest,” said FCC Chairman Ajit Pai in a statement. “Instead of saddling the Internet with heavy-handed regulations, we will work together to take targeted action against bad actors. This approach protected a free and open Internet for many years prior to the FCC’s 2015 Title II Order and it will once again following the adoption of the Restoring Internet Freedom Order.”
Rollback of the Net Neutrality rules is a controversial topic that is opposed by advocacy groups and Silicon Valley incumbent firms.
Full Content: Federal Trade Commission & Public Knowledge
From Public Citizen Consumer Law & Policy Blog:
Ninth Circuit rejects First Amendment petition clause challenge to arbitration agreement, saying that private party's conduct is not attributable to the state (for purposes of the "state action" doctrine)
Posted: 11 Dec 2017 07:30 PM PST
Take a look at the Ninth Circuit's decision in Roberts v. AT&T Mobility. Here's the court's description of the dispute:
Plaintiffs—AT&T customers and putative class representatives—contracted with AT&T for wireless data service plans. Their contracts included arbitration agreements. Plaintiffs allege AT&T falsely advertised that its mobile service customers could use “unlimited data,” but actually “throttled”—intentionally slowed down—customers’ data speeds once reaching “secret data usage caps” between two and five gigabytes. Plaintiffs claim a phone’s key functions, such as streaming video or browsing webpages, are useless at “throttled” speeds.
Plaintiffs filed a putative class action, alleging statutory and common law consumer protection and false advertising claims under California and Alabama law. AT&T moved to compel arbitration in light of the Supreme Court’s ruling in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011),“that the FAA preempts state law deeming AT&T’s arbitration provision to be unconscionable.” Plaintiffs opposed the motion on First Amendment grounds. They argued that an order forcing arbitration would violate the Petition Clause, as they “did not knowingly and voluntarily give up their right to have a court adjudicate their claims... .”
The Ninth Circuit nixed the argument without getting to the merits, holding that
There is no state action here. First, AT&T’s conduct must be fairly attributable to the state, and Denver Area [Educational Telecommunications Consortium, Inc. v. FCC, 518 U.S. 727 (1996)] did not hold otherwise. Second, AT&T is not a state actor under the “encouragement” test. The FAA merely gives AT&T the private choice to arbitrate, and does not “encourage” arbitration such that AT&T’s conduct is attributable to the state.
(Click title for link to Public Citizen)
Ninth Circuit rejects First Amendment petition clause challenge to arbitration agreement, saying that private party's conduct is not attributable to the state (for purposes of the "state action" doctrine)
Posted: 11 Dec 2017 07:30 PM PST
Take a look at the Ninth Circuit's decision in Roberts v. AT&T Mobility. Here's the court's description of the dispute:
Plaintiffs—AT&T customers and putative class representatives—contracted with AT&T for wireless data service plans. Their contracts included arbitration agreements. Plaintiffs allege AT&T falsely advertised that its mobile service customers could use “unlimited data,” but actually “throttled”—intentionally slowed down—customers’ data speeds once reaching “secret data usage caps” between two and five gigabytes. Plaintiffs claim a phone’s key functions, such as streaming video or browsing webpages, are useless at “throttled” speeds.
Plaintiffs filed a putative class action, alleging statutory and common law consumer protection and false advertising claims under California and Alabama law. AT&T moved to compel arbitration in light of the Supreme Court’s ruling in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011),“that the FAA preempts state law deeming AT&T’s arbitration provision to be unconscionable.” Plaintiffs opposed the motion on First Amendment grounds. They argued that an order forcing arbitration would violate the Petition Clause, as they “did not knowingly and voluntarily give up their right to have a court adjudicate their claims... .”
The Ninth Circuit nixed the argument without getting to the merits, holding that
There is no state action here. First, AT&T’s conduct must be fairly attributable to the state, and Denver Area [Educational Telecommunications Consortium, Inc. v. FCC, 518 U.S. 727 (1996)] did not hold otherwise. Second, AT&T is not a state actor under the “encouragement” test. The FAA merely gives AT&T the private choice to arbitrate, and does not “encourage” arbitration such that AT&T’s conduct is attributable to the state.
(Click title for link to Public Citizen)
A holiday season plug for the DC Bar's advice and referral clinic
The D.C. Bar web site explains:
The Bar's Pro Bono Center Advice & Referral Clinic offers pro se individuals the opportunity to discuss with volunteer attorneys certain kinds of matters governed by D.C. or federal law, including bankruptcy/debt collection, consumer law, employment law, family law, health law, housing law, personal injury, probate, public benefits, and tax law. All services are provided free of charge.
The clinic is limited to providing general information, advice, and brief services, and does not provide representation.
Providing "brief services" may not always be achievable by the end of the clinic session. For example, calling a third party or government agency to ascertain information about a client's matter, writing a demand letter to a landlord or a judgment–proof letter to a creditor, or reviewing a contract or settlement agreement may require some of the volunteer attorney’s time after the clinic. However, clinic volunteers do not appear in court or otherwise establish an extended attorney–client relationship unless they wish to do so.
If brief service is not enough to resolve the problem or if a different type of service is required, clinic volunteers attempt to refer individuals to, or provide information about, a legal or social service provider appropriately suited to handle the case.
Local legal service providers also benefit from the Advice & Referral Clinic, since it lessens the number of individuals walking into their organizations, allowing those practitioners to spend more of their resources representing clients instead of providing general information, advice, and brief services.
For more information, please contact Managing Attorney Nakia Matthews at [email protected].
Volunteering
Advice & Referral Clinic volunteers must be associated with a participating organization. Please refer to the list of clinic participants. If you are associated with a clinic participant, please contact that organization’s pro bono or volunteer coordinator to arrange to volunteer for the clinic. If you are not an employee or member of a participating organization, ask your employer, Bar section, voluntary bar association, or other organization to become a clinic participant.
What Volunteers Need to Know
On the second Saturday of every month from 10 a.m. until 12 p.m., the Advice & Referral Clinic operates out of two locations: Bread for the City’s Northwest Center at 1525 7th Street NW, and Bread for the City’s Southeast Center at 1640 Good Hope Road, SE. Parking is available at both locations.
Volunteers should arrive at the clinic by 9:30 a.m. for a brief orientation of clinic operations. Bagels and juice will be served. Dress is casual. Volunteers should be prepared to stay until the last client is served (usually around 1:00 p.m.).
Although it is impossible to predict, most individuals have basic questions. Volunteers are not expected to be familiar with every area of the law. Mentors are available onsite and reference materials are provided.
The D.C. Bar web site explains:
The Bar's Pro Bono Center Advice & Referral Clinic offers pro se individuals the opportunity to discuss with volunteer attorneys certain kinds of matters governed by D.C. or federal law, including bankruptcy/debt collection, consumer law, employment law, family law, health law, housing law, personal injury, probate, public benefits, and tax law. All services are provided free of charge.
The clinic is limited to providing general information, advice, and brief services, and does not provide representation.
Providing "brief services" may not always be achievable by the end of the clinic session. For example, calling a third party or government agency to ascertain information about a client's matter, writing a demand letter to a landlord or a judgment–proof letter to a creditor, or reviewing a contract or settlement agreement may require some of the volunteer attorney’s time after the clinic. However, clinic volunteers do not appear in court or otherwise establish an extended attorney–client relationship unless they wish to do so.
If brief service is not enough to resolve the problem or if a different type of service is required, clinic volunteers attempt to refer individuals to, or provide information about, a legal or social service provider appropriately suited to handle the case.
Local legal service providers also benefit from the Advice & Referral Clinic, since it lessens the number of individuals walking into their organizations, allowing those practitioners to spend more of their resources representing clients instead of providing general information, advice, and brief services.
For more information, please contact Managing Attorney Nakia Matthews at [email protected].
Volunteering
Advice & Referral Clinic volunteers must be associated with a participating organization. Please refer to the list of clinic participants. If you are associated with a clinic participant, please contact that organization’s pro bono or volunteer coordinator to arrange to volunteer for the clinic. If you are not an employee or member of a participating organization, ask your employer, Bar section, voluntary bar association, or other organization to become a clinic participant.
What Volunteers Need to Know
On the second Saturday of every month from 10 a.m. until 12 p.m., the Advice & Referral Clinic operates out of two locations: Bread for the City’s Northwest Center at 1525 7th Street NW, and Bread for the City’s Southeast Center at 1640 Good Hope Road, SE. Parking is available at both locations.
Volunteers should arrive at the clinic by 9:30 a.m. for a brief orientation of clinic operations. Bagels and juice will be served. Dress is casual. Volunteers should be prepared to stay until the last client is served (usually around 1:00 p.m.).
Although it is impossible to predict, most individuals have basic questions. Volunteers are not expected to be familiar with every area of the law. Mentors are available onsite and reference materials are provided.
News reports suggest that an aspect of the CVS/Aetna proposed merger that can raise antitrust questions concerns horizontal overlap involving Medicare Part D
The WSJ explains:
One area where CVS and Aetna do compete directly is in Medicare drug plans. CVS is the biggest provider of these so-called Part D plans, with about 5.5 million members, according to figures compiled by analysts at Wells Fargo. Aetna ranks fifth, with around 2.1 million enrollees. Antitrust enforcers “will look at anything and everything where there’s overlap,” said Martin Gaynor, a professor at Carnegie Mellon University.
But analysts said that even if the Justice Department requires divestitures related to the Part D business, that isn’t likely to be a major impediment to the deal, since stand-alone Medicare drug plans aren’t generally a major source of profits.
See (paywall) https://www.wsj.com/articles/will-cvs-health-deal-to-buy-aetna-hold-up-to-antitrust-scrutiny-1512343663#
So, what is Medicare part D? Here is an answer from Medicare.gov:
Medicare offers prescription drug coverage to everyone with Medicare. . . . To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.
2 ways to get drug coverage:
Here is further insight from the Galen Institute concerning aspects of part D competition:
Many MA plans also cover prescription drugs as part of the benefit, while other seniors opt for free-standing Medicare Part D prescription drug plans. Either way, private plans negotiate fiercely to get the best prices from physicians, hospitals, and drug companies
so they can offer the lowest prices on plans and attract the greatest number of members. This model has been highly successful, saving both seniors and taxpayers money. The Part D program has been particularly successful.
See the article by Grace-Marie Turner at http://galen.org/2016/competition-in-medicare-advantage-part-d-and-extra-help-working-together-for-seniors-and-taxpayers/
The WSJ explains:
One area where CVS and Aetna do compete directly is in Medicare drug plans. CVS is the biggest provider of these so-called Part D plans, with about 5.5 million members, according to figures compiled by analysts at Wells Fargo. Aetna ranks fifth, with around 2.1 million enrollees. Antitrust enforcers “will look at anything and everything where there’s overlap,” said Martin Gaynor, a professor at Carnegie Mellon University.
But analysts said that even if the Justice Department requires divestitures related to the Part D business, that isn’t likely to be a major impediment to the deal, since stand-alone Medicare drug plans aren’t generally a major source of profits.
See (paywall) https://www.wsj.com/articles/will-cvs-health-deal-to-buy-aetna-hold-up-to-antitrust-scrutiny-1512343663#
So, what is Medicare part D? Here is an answer from Medicare.gov:
Medicare offers prescription drug coverage to everyone with Medicare. . . . To get Medicare drug coverage, you must join a plan run by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered.
2 ways to get drug coverage:
- Medicare Prescription Drug Plan (Part D). These plans (sometimes called "PDPs") add drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
- Medicare Advantage Plan (Part C) (like an HMO or PPO) or other Medicare health plan that offers Medicare prescription drug coverage. You get all of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage, and prescription drug coverage (Part D), through these plans. Medicare Advantage Plans with prescription drug coverage are sometimes called “MA-PDs.” You must have Part A and Part B to join a Medicare Advantage Plan.
Here is further insight from the Galen Institute concerning aspects of part D competition:
Many MA plans also cover prescription drugs as part of the benefit, while other seniors opt for free-standing Medicare Part D prescription drug plans. Either way, private plans negotiate fiercely to get the best prices from physicians, hospitals, and drug companies
so they can offer the lowest prices on plans and attract the greatest number of members. This model has been highly successful, saving both seniors and taxpayers money. The Part D program has been particularly successful.
See the article by Grace-Marie Turner at http://galen.org/2016/competition-in-medicare-advantage-part-d-and-extra-help-working-together-for-seniors-and-taxpayers/
Comment: WORLD WITHOUT MIND, The Existential Threat of Big Tech, By Franklin Foer, Penguin Press. 257 pp. $27
The headline for Jon Gertner's Washington Post book review is "Are tech giants robbing us of our decision-making and our individuality?" Based on my reading of the Foer book I think that is a fair headline.
Gertner explains that Foer’s book aims to expose the dangers that four technology giants — Google, Apple, Facebook and Amazon, and companies like them — pose to our culture and careers. In their methods of consumer observation and data gathering, and in their intention to replace human decision-making with merciless algorithms, these companies, Foer says, “are shredding the principles that protect individuality.”
Gertner agrees with Foer that the four corporations have lulled us into a sense of dependency as they influence our thinking and activities. Gertner summarizes: Far more powerful than the elite “gatekeeping” institutions of the past — the major television networks, for example, or the leading newspapers — this fearsome four, as Foer characterizes them, are the new arbiters of media, economy, politics and the arts. By making their services cheap and indispensable, and by tailoring their complex algorithms to our data profiles, they can gently push us toward products they want us to buy or, say, YouTube videos they want us to watch. Yet the methods by which we get such recommendations — for news, consumer goods, movies, music, friends and the like — remain opaque. Facebook’s acceptance of thousands of Russian ads during the recent election may be a case in point. As Foer reminds us, through an algorithmic dispersal of misinformation, the social-media giant possibly helped elect to the presidency of the United States a frequently bankrupt real estate developer without any political experience whatsoever.
Gertner focuses on Foer's point that the companies that dominate the world’s technology ecosystem have assumed the roles of monopolists.
Gertner is accurate, in my opinion, in seeing Foer as focused on the broad political challenges posed by the new powerful companies, invoking broad antitrust and political thinking of people like Justice Brandeis. Foer is not focused so much on particular immediate technical antitrust reforms. Foer wishes government to face the new realities of monopoly behavior by the likes of Google, Apple, Facebook, and Amazon in the spirit of argumentation and experimentation that carried Brandeis and later Thurman Arnold during the Roosevelt New Deal period.
Foer does not suggest a series of fixes to current antitrust enforcement, but others do.
For example, Lina Khan, writing in the Yale Law Jounal, suggests replacing the consumer welfare framework of current antitrust enforcement with an approach oriented around preserving a competitive process and market structure: "Applying this idea involves, for example, assessing whether a company’s structure creates anticompetitive conflicts of interest; whether it can cross-leverage market advantages across distinct lines of business; and whether the economics of online platform markets incentivizes predatory conduct and capital markets permit it. More specifically, restoring traditional antitrust principles to create a presumption of predation and to ban vertical integration by dominant platforms could help maintain competition in these markets. If, instead, we accept dominant online platforms as natural monopolies or oligopolies, then applying elements of a public utility regime or essential facilities obligations would maintain the benefits of scale while limiting the ability of dominant platforms to abuse the power that comes with it. See Ms. Khan's article at https://www.yalelawjournal.org/note/amazons-antitrust-paradox Ms. Khan can be seen in an Open Markets program speaking on related points at http://openmarketsinstitute.org/events/are-tech-giants-too-big-for-democracy-with-senator-al-franken/ at approximately hour 2:05.
Commenters Ezrachi and Stucke advise that "Ultimately, the super-platforms–in harming both the content providers upstream and consumers downstream–can undermine our economic well-being and democracy. Competition law has at its origins the protection of society from the misuse of economic and political power. Thus, our competition authorities must step up. Failing to challenge the super-platforms’ anticompetitive practices will only embolden these (and aspiring) gatekeepers. When the enforcer only looks down, upstream competition, innovation, and the livelihood of many market participants, who deserve a competitive marketplace, will be hindered. See their writing https://www.authorsguild.org/industry-advocacy/law-profs-antitrust-enforcers-rein-super-platforms-look-upstream/
Posted by Don Allen Resnikoff, who is responsible for the content
The headline for Jon Gertner's Washington Post book review is "Are tech giants robbing us of our decision-making and our individuality?" Based on my reading of the Foer book I think that is a fair headline.
Gertner explains that Foer’s book aims to expose the dangers that four technology giants — Google, Apple, Facebook and Amazon, and companies like them — pose to our culture and careers. In their methods of consumer observation and data gathering, and in their intention to replace human decision-making with merciless algorithms, these companies, Foer says, “are shredding the principles that protect individuality.”
Gertner agrees with Foer that the four corporations have lulled us into a sense of dependency as they influence our thinking and activities. Gertner summarizes: Far more powerful than the elite “gatekeeping” institutions of the past — the major television networks, for example, or the leading newspapers — this fearsome four, as Foer characterizes them, are the new arbiters of media, economy, politics and the arts. By making their services cheap and indispensable, and by tailoring their complex algorithms to our data profiles, they can gently push us toward products they want us to buy or, say, YouTube videos they want us to watch. Yet the methods by which we get such recommendations — for news, consumer goods, movies, music, friends and the like — remain opaque. Facebook’s acceptance of thousands of Russian ads during the recent election may be a case in point. As Foer reminds us, through an algorithmic dispersal of misinformation, the social-media giant possibly helped elect to the presidency of the United States a frequently bankrupt real estate developer without any political experience whatsoever.
Gertner focuses on Foer's point that the companies that dominate the world’s technology ecosystem have assumed the roles of monopolists.
Gertner is accurate, in my opinion, in seeing Foer as focused on the broad political challenges posed by the new powerful companies, invoking broad antitrust and political thinking of people like Justice Brandeis. Foer is not focused so much on particular immediate technical antitrust reforms. Foer wishes government to face the new realities of monopoly behavior by the likes of Google, Apple, Facebook, and Amazon in the spirit of argumentation and experimentation that carried Brandeis and later Thurman Arnold during the Roosevelt New Deal period.
Foer does not suggest a series of fixes to current antitrust enforcement, but others do.
For example, Lina Khan, writing in the Yale Law Jounal, suggests replacing the consumer welfare framework of current antitrust enforcement with an approach oriented around preserving a competitive process and market structure: "Applying this idea involves, for example, assessing whether a company’s structure creates anticompetitive conflicts of interest; whether it can cross-leverage market advantages across distinct lines of business; and whether the economics of online platform markets incentivizes predatory conduct and capital markets permit it. More specifically, restoring traditional antitrust principles to create a presumption of predation and to ban vertical integration by dominant platforms could help maintain competition in these markets. If, instead, we accept dominant online platforms as natural monopolies or oligopolies, then applying elements of a public utility regime or essential facilities obligations would maintain the benefits of scale while limiting the ability of dominant platforms to abuse the power that comes with it. See Ms. Khan's article at https://www.yalelawjournal.org/note/amazons-antitrust-paradox Ms. Khan can be seen in an Open Markets program speaking on related points at http://openmarketsinstitute.org/events/are-tech-giants-too-big-for-democracy-with-senator-al-franken/ at approximately hour 2:05.
Commenters Ezrachi and Stucke advise that "Ultimately, the super-platforms–in harming both the content providers upstream and consumers downstream–can undermine our economic well-being and democracy. Competition law has at its origins the protection of society from the misuse of economic and political power. Thus, our competition authorities must step up. Failing to challenge the super-platforms’ anticompetitive practices will only embolden these (and aspiring) gatekeepers. When the enforcer only looks down, upstream competition, innovation, and the livelihood of many market participants, who deserve a competitive marketplace, will be hindered. See their writing https://www.authorsguild.org/industry-advocacy/law-profs-antitrust-enforcers-rein-super-platforms-look-upstream/
Posted by Don Allen Resnikoff, who is responsible for the content
Opinion from The Hill: A lawsuit in San Juan by the Aurelius hedge fund has the potential to be one of the most significant in sovereign debt history. This lawsuit could not only derail Puerto Rico’s current debt restructuring attempts, but it could also call into question the constitutionality of its status as an “unincorporated” U.S. territory.
Editor note: As Puerto Rican citizens struggle to recover from devastating storm damage, an important legal challenge to the legal and financial stability of Puerto Rico looms in the background. The following article from The Hill tells the story. DR
Rarely does a case that is nominally about debt so squarely involve the question of what it means to be sovereign.
In 2016, Congress passed the Puerto Rico Oversight, Management and Economic Stability Act, or Promesa, which among other things established a control board with broad powers to run Puerto Rico’s finances until it can be returned to fiscal stability. To quote the title of one of the academic articles that inspired the control board idea, it is a “dictatorship for democracy” in the form of a temporary, undemocratic institution designed to restore order.
Unsurprisingly, the board has faced strong opposition. Critics allege that it fails to address the island’s underlying economic problems, and also that it fails even the most basic tests of democratic accountability. Some union leaders, environmental groups, and left-wing political parties see the board as a tool of vulture capitalists working in cahoots with the federal government to reimpose colonial rule.
This makes it all the more striking that their most powerful ally against the board might well be an infamous New York hedge fund, whose lawsuit could bring the control board crashing down, and perhaps even alter Puerto Rico’s territorial status. The hedge fund, Aurelius, has a straightforward claim: The members of the Promesa board were unconstitutionally appointed, and therefore the steps toward a debt restructuring that the control board has taken and plans to take (which would likely force Aurelius to take a haircut on the nearly half a billion dollars of Puerto Rican debt it holds) are invalid.
The basis for this claim lies in the appointments clause of the Constitution, which specifies that principal federal officers must be appointed by the president, with the advice and consent of the Senate. Although the case law is not crystal clear, principal federal officers tend to be those who exercise significant authority pursuant to federal law and who have the president as their only boss. If the appointment of a seven-member control board with carte blanche to run the finances of the country’s biggest territory is not the appointment of primary federal officers, what is?
But the board members have an answer. Puerto Rico is, according to century-old Supreme Court precedents, an “unincorporated territory.” That means that the board members are territorial officers under the territorial clause of the Constitution, not federal officers subject to the appointments clause. The former clause gives Congress the power to “make all needful rules and regulations respecting the territory or other property belonging to the United States.” A plenary authority is not subject to the usual constraints of the separation of powers.
That those Supreme Court precedents, the much-reviled Insular Cases, are still part of American law is an embarrassment. They were written by the same basic lineup of justices who penned Plessy v. Ferguson, and are tainted by a stunningly racist and colonial mindset. Plessy v. Ferguson is the infamous case that held that “separate but equal” was constitutional, and it was explicitly overturned by Brown v. Board of Education. The Insular Cases, by contrast, remain good law and are still the basis of Puerto Rico’s form of sovereign limbo.
The federal district court in San Juan is therefore presented not simply with an aggrieved creditor, but with a claim that goes right to the heart of Puerto Rico’s legal status. The core question, in a way, is whether Puerto Rico, more than a century after it was acquired through conquest, remains still a distant colony, as the Insular Cases held, or has truly become part of the United States. For the millions of American citizens in Puerto Rico, the island’s legal status has been of paramount importance long before the debt crisis or the impact of Hurricane Maria.
For decades now, Puerto Ricans have debated whether and how to become the 51st state, become an independent nation, or remain a territory with no voting representation in Congress. Many have concluded that their preferences will be ignored on the mainland, which might help explain why only a quarter of eligible voters showed up for a June referendum on the island’s status. In the words of one U.S. congressman of Puerto Rican descent, “Congress won’t do anything.” Maybe. But Aurelius is not going away, and it has a war chest, a brilliant legal team, and a tenacity that will force the federal government to take note.
This is, after all, one of the same hedge funds that, in the infamous “pari passu” litigation, brought the Argentine government to its knees just a few years ago. The Aurelius managers did not set out to lead a constitutional crusade from their Fifth Avenue penthouses. They simply want to avoid having to take pennies on the dollar for their bonds (which is what the board will probably do in order to get Puerto Rico back to sustainability). But in fighting against the board, Aurelius has already proven willing to smash away at the foundations of Puerto Rico’s legal status.
A century ago, economic disputes over things like sugar tariffs led to the Insular Cases, which established Puerto Rico’s status as an “unincorporated territory.” The financial dispute currently playing out in that quiet federal district court in San Juan might just unwind it.
http://thehill.com/opinion/finance/361775-puerto-ricos-colonial-status-hinges-on-a-new-york-hedge-funds-greed#bottom-story-socials
Editor note: As Puerto Rican citizens struggle to recover from devastating storm damage, an important legal challenge to the legal and financial stability of Puerto Rico looms in the background. The following article from The Hill tells the story. DR
Rarely does a case that is nominally about debt so squarely involve the question of what it means to be sovereign.
In 2016, Congress passed the Puerto Rico Oversight, Management and Economic Stability Act, or Promesa, which among other things established a control board with broad powers to run Puerto Rico’s finances until it can be returned to fiscal stability. To quote the title of one of the academic articles that inspired the control board idea, it is a “dictatorship for democracy” in the form of a temporary, undemocratic institution designed to restore order.
Unsurprisingly, the board has faced strong opposition. Critics allege that it fails to address the island’s underlying economic problems, and also that it fails even the most basic tests of democratic accountability. Some union leaders, environmental groups, and left-wing political parties see the board as a tool of vulture capitalists working in cahoots with the federal government to reimpose colonial rule.
This makes it all the more striking that their most powerful ally against the board might well be an infamous New York hedge fund, whose lawsuit could bring the control board crashing down, and perhaps even alter Puerto Rico’s territorial status. The hedge fund, Aurelius, has a straightforward claim: The members of the Promesa board were unconstitutionally appointed, and therefore the steps toward a debt restructuring that the control board has taken and plans to take (which would likely force Aurelius to take a haircut on the nearly half a billion dollars of Puerto Rican debt it holds) are invalid.
The basis for this claim lies in the appointments clause of the Constitution, which specifies that principal federal officers must be appointed by the president, with the advice and consent of the Senate. Although the case law is not crystal clear, principal federal officers tend to be those who exercise significant authority pursuant to federal law and who have the president as their only boss. If the appointment of a seven-member control board with carte blanche to run the finances of the country’s biggest territory is not the appointment of primary federal officers, what is?
But the board members have an answer. Puerto Rico is, according to century-old Supreme Court precedents, an “unincorporated territory.” That means that the board members are territorial officers under the territorial clause of the Constitution, not federal officers subject to the appointments clause. The former clause gives Congress the power to “make all needful rules and regulations respecting the territory or other property belonging to the United States.” A plenary authority is not subject to the usual constraints of the separation of powers.
That those Supreme Court precedents, the much-reviled Insular Cases, are still part of American law is an embarrassment. They were written by the same basic lineup of justices who penned Plessy v. Ferguson, and are tainted by a stunningly racist and colonial mindset. Plessy v. Ferguson is the infamous case that held that “separate but equal” was constitutional, and it was explicitly overturned by Brown v. Board of Education. The Insular Cases, by contrast, remain good law and are still the basis of Puerto Rico’s form of sovereign limbo.
The federal district court in San Juan is therefore presented not simply with an aggrieved creditor, but with a claim that goes right to the heart of Puerto Rico’s legal status. The core question, in a way, is whether Puerto Rico, more than a century after it was acquired through conquest, remains still a distant colony, as the Insular Cases held, or has truly become part of the United States. For the millions of American citizens in Puerto Rico, the island’s legal status has been of paramount importance long before the debt crisis or the impact of Hurricane Maria.
For decades now, Puerto Ricans have debated whether and how to become the 51st state, become an independent nation, or remain a territory with no voting representation in Congress. Many have concluded that their preferences will be ignored on the mainland, which might help explain why only a quarter of eligible voters showed up for a June referendum on the island’s status. In the words of one U.S. congressman of Puerto Rican descent, “Congress won’t do anything.” Maybe. But Aurelius is not going away, and it has a war chest, a brilliant legal team, and a tenacity that will force the federal government to take note.
This is, after all, one of the same hedge funds that, in the infamous “pari passu” litigation, brought the Argentine government to its knees just a few years ago. The Aurelius managers did not set out to lead a constitutional crusade from their Fifth Avenue penthouses. They simply want to avoid having to take pennies on the dollar for their bonds (which is what the board will probably do in order to get Puerto Rico back to sustainability). But in fighting against the board, Aurelius has already proven willing to smash away at the foundations of Puerto Rico’s legal status.
A century ago, economic disputes over things like sugar tariffs led to the Insular Cases, which established Puerto Rico’s status as an “unincorporated territory.” The financial dispute currently playing out in that quiet federal district court in San Juan might just unwind it.
http://thehill.com/opinion/finance/361775-puerto-ricos-colonial-status-hinges-on-a-new-york-hedge-funds-greed#bottom-story-socials
Rat Control in the District of Columbia
Are there any government programs that libertarian conservatives and liberal progressives can agree are useful, and should be supported by tax revenues? The answer is probably yes, and rat control in public areas may be an example. DC Government has tried many approaches, including exhortations to citizens to dispose of garbage in a rodent-resistant way, and organizing stray cats to chase rats (really). Here is an earlier description of the DC government's efforts:
https://www.nbcwashington.com/news/local/Rats-DC-Announces-Steps-to-Control-Rat-Problem-as-Resident-Complaints-Rise-430231833.html
Posted by Don Resnikoff
Are there any government programs that libertarian conservatives and liberal progressives can agree are useful, and should be supported by tax revenues? The answer is probably yes, and rat control in public areas may be an example. DC Government has tried many approaches, including exhortations to citizens to dispose of garbage in a rodent-resistant way, and organizing stray cats to chase rats (really). Here is an earlier description of the DC government's efforts:
https://www.nbcwashington.com/news/local/Rats-DC-Announces-Steps-to-Control-Rat-Problem-as-Resident-Complaints-Rise-430231833.html
Posted by Don Resnikoff
Mulvaney curtails CFPB collection of consumer data
The Wall Street Journal (paywall) reports that Mick Mulvaney has exercised his authority at the CFPB to freeze collection of consumer data from credit cards and mortgages. The WSJ explains:
Critics of the CFPB have long complained about the bureau’s efforts to collect consumer data on credit cards and mortgages through its disclosure rules, consumer complaint database and enforcement actions. They say such actions threaten privacy and information security. CFPB officials have in the past said such data help the agency identify discrimination and other industry misconduct, and can serve as a basis for writing rules.
https://www.wsj.com/articles/new-cfpb-chief-curbs-data-collection-citing-cybersecurity-worries-1512429736?te=1&nl=dealbook&emc=edit_dk_20171205&mg=prod/accounts-wsj#
The Wall Street Journal (paywall) reports that Mick Mulvaney has exercised his authority at the CFPB to freeze collection of consumer data from credit cards and mortgages. The WSJ explains:
Critics of the CFPB have long complained about the bureau’s efforts to collect consumer data on credit cards and mortgages through its disclosure rules, consumer complaint database and enforcement actions. They say such actions threaten privacy and information security. CFPB officials have in the past said such data help the agency identify discrimination and other industry misconduct, and can serve as a basis for writing rules.
https://www.wsj.com/articles/new-cfpb-chief-curbs-data-collection-citing-cybersecurity-worries-1512429736?te=1&nl=dealbook&emc=edit_dk_20171205&mg=prod/accounts-wsj#
Editorial comment: consumer law advocacy in the time of tax law changes in aid of large corporations
We do consumer law and policy here. But as a blogger on Public Citizen's consumer law and policy blog suggested recently, that doesn't mean we should be oblivious to larger political issues. That includes the ways in which the new federal tax law recently passed by the Senate and sent to Congressional conference may affect the ordinary citizens we seek to protect as consumers, and the character of the political forces that caused the law to pass.
It may be that the benefits promised to ordinary citizens by supporters of the tax bill may materialize. Or, as I think is more likely, the New York Times editorial board has it right when it suggests that "the Senate passed a tax bill confirming that the Republican leaders’ primary goal is to enrich the country’s elite at the expense of everybody else, including future generations who will end up bearing the cost. . . . The bill is expected to add more than $1.4 trillion to the federal deficit over the next decade [the CBO analysis is at https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/53362-summarysenatereconciliation.pdf], a debt that will be paid by the poor and middle class in future tax increases and spending cuts to Medicare, Social Security and other government programs. Its modest tax cuts for the middle class disappear after eight years. And up to 13 million people stand to lose their health insurance because the bill makes a big change to the Affordable Care Act. Yet Republicans somehow found a way to give a giant and permanent tax cut to corporations like Apple, General Electric and Goldman Sachs, saving those businesses tens of billions of dollars."
The New York Times editorial board view on the tax bill winners and losers and the role of big business political donors as supporters of the tax bill suggests a need for political engagement by citizens of a broad sort, but it does not at all suggest that our focusing on consumer law and policy issues is unimportant.
The contrary is the case. Consumer advocates do something important when we fight for institutional fairness and access to the courts, as by fighting against compelled arbitration that deprives consumers of fair court access for their grievances. Consumer advocates work in other important ways to provide procedural and substantive fairness for consumers. Supporting the currently challenged work of the CFPB is just one example.
Particular consumer-oriented campaigns for procedural and substantive fairness are of a piece with broader political campaigns, such as the broader campaign to reduce the role of big business political donations on electoral politics and democracy in the United States. We should not be discouraged in our pursuit of consumer law initiatives.
Posting by Don Allen Resnikoff, who is responsible for the views expressed
We do consumer law and policy here. But as a blogger on Public Citizen's consumer law and policy blog suggested recently, that doesn't mean we should be oblivious to larger political issues. That includes the ways in which the new federal tax law recently passed by the Senate and sent to Congressional conference may affect the ordinary citizens we seek to protect as consumers, and the character of the political forces that caused the law to pass.
It may be that the benefits promised to ordinary citizens by supporters of the tax bill may materialize. Or, as I think is more likely, the New York Times editorial board has it right when it suggests that "the Senate passed a tax bill confirming that the Republican leaders’ primary goal is to enrich the country’s elite at the expense of everybody else, including future generations who will end up bearing the cost. . . . The bill is expected to add more than $1.4 trillion to the federal deficit over the next decade [the CBO analysis is at https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/53362-summarysenatereconciliation.pdf], a debt that will be paid by the poor and middle class in future tax increases and spending cuts to Medicare, Social Security and other government programs. Its modest tax cuts for the middle class disappear after eight years. And up to 13 million people stand to lose their health insurance because the bill makes a big change to the Affordable Care Act. Yet Republicans somehow found a way to give a giant and permanent tax cut to corporations like Apple, General Electric and Goldman Sachs, saving those businesses tens of billions of dollars."
The New York Times editorial board view on the tax bill winners and losers and the role of big business political donors as supporters of the tax bill suggests a need for political engagement by citizens of a broad sort, but it does not at all suggest that our focusing on consumer law and policy issues is unimportant.
The contrary is the case. Consumer advocates do something important when we fight for institutional fairness and access to the courts, as by fighting against compelled arbitration that deprives consumers of fair court access for their grievances. Consumer advocates work in other important ways to provide procedural and substantive fairness for consumers. Supporting the currently challenged work of the CFPB is just one example.
Particular consumer-oriented campaigns for procedural and substantive fairness are of a piece with broader political campaigns, such as the broader campaign to reduce the role of big business political donations on electoral politics and democracy in the United States. We should not be discouraged in our pursuit of consumer law initiatives.
Posting by Don Allen Resnikoff, who is responsible for the views expressed
Will antitrust agencies block CVS from buying Aetna?
Commenters generally agree that the agencies are faced with the same sort of questions raised by the ATT/Times-Warner merger: Can a powerful vertically integrated market player effectively limit market access for an input provider? In the case of ATT/Times Warner the concern is about restricted opportunities for program providers.
In the Economist article excerpted below, the author discusses the vertical foreclosure concern in the context of the CVS/Aetna deal in simple terms, and suggests that the extent of vertical foreclosure will be mild. Other commenters can be expected to see a more complex market power story and suggest greater negative consequences:
Excerpts from Economist article:
The CVS-Aetna deal is an example of “vertical integration”, in which separate bits of a supply chain are brought together under one roof. This tie-up would reach across three distinct layers of the health-care industry: the retail pharmacies for which CVS is famous; the pharmacy-benefit managers (PBM), intermediaries which negotiate drug prices on behalf of medical plans and whose number again includes CVS; and the insurers, like Aetna.
Supporters of the deal argue that aligning the interests of insurers and pharmacies would reduce costs and improve life for consumers. An insurer that could send patients to walk-in clinics of the sort CVS owns would be better placed to monitor and improve results.
In the case of CVS-Aetna, the incentive for the pharmacy-benefit manager to fatten its profits would disappear. The question then is would that benefit accrue to the consumer? That depends on whether firms are dominant in their respective markets. The benefits to consumers of a vertical merger disappear if one of the parties has a monopoly. The proposed deal between AT&T and Time Warner, for instance, fails this test. The monopoly that AT&T wields as a broadband provider in many parts of America means that rivals to Time Warner have no simple options for getting their content distributed there. Uncontested markets would have a similar impact on the CVS-Aetna deal: a combined entity would be free to restrict insured customers to CVS medications and clinics, for example, if it had no rivals to fear.
That seems unlikely. CVS has about 23% of the pharmacy market, and 24% of the PBM market; Aetna has about 6% of the insurance market. And more competition may be on the way in the pharmacy business: the prospective entry of Amazon lies behind CVS’s hunt for Aetna. But the deal would require close scrutiny and may need conditions attached. A proposed agreement with Anthem, another insurer, which would give CVS an even bigger slice of the PBM pie would need to be ditched. And the local picture matters. In the median American state, for example, the two largest health insurers have 66% of the market. Trustbusters might need to insist on the sale of some local assets to smaller rivals before approving a tie-up.
The Economist article is at https://www.economist.com/news/leaders/21730882-proposed-health-care-merger-raises-difficult-antitrust-questions-should-regulators-block-cvs
Commenters generally agree that the agencies are faced with the same sort of questions raised by the ATT/Times-Warner merger: Can a powerful vertically integrated market player effectively limit market access for an input provider? In the case of ATT/Times Warner the concern is about restricted opportunities for program providers.
In the Economist article excerpted below, the author discusses the vertical foreclosure concern in the context of the CVS/Aetna deal in simple terms, and suggests that the extent of vertical foreclosure will be mild. Other commenters can be expected to see a more complex market power story and suggest greater negative consequences:
Excerpts from Economist article:
The CVS-Aetna deal is an example of “vertical integration”, in which separate bits of a supply chain are brought together under one roof. This tie-up would reach across three distinct layers of the health-care industry: the retail pharmacies for which CVS is famous; the pharmacy-benefit managers (PBM), intermediaries which negotiate drug prices on behalf of medical plans and whose number again includes CVS; and the insurers, like Aetna.
Supporters of the deal argue that aligning the interests of insurers and pharmacies would reduce costs and improve life for consumers. An insurer that could send patients to walk-in clinics of the sort CVS owns would be better placed to monitor and improve results.
In the case of CVS-Aetna, the incentive for the pharmacy-benefit manager to fatten its profits would disappear. The question then is would that benefit accrue to the consumer? That depends on whether firms are dominant in their respective markets. The benefits to consumers of a vertical merger disappear if one of the parties has a monopoly. The proposed deal between AT&T and Time Warner, for instance, fails this test. The monopoly that AT&T wields as a broadband provider in many parts of America means that rivals to Time Warner have no simple options for getting their content distributed there. Uncontested markets would have a similar impact on the CVS-Aetna deal: a combined entity would be free to restrict insured customers to CVS medications and clinics, for example, if it had no rivals to fear.
That seems unlikely. CVS has about 23% of the pharmacy market, and 24% of the PBM market; Aetna has about 6% of the insurance market. And more competition may be on the way in the pharmacy business: the prospective entry of Amazon lies behind CVS’s hunt for Aetna. But the deal would require close scrutiny and may need conditions attached. A proposed agreement with Anthem, another insurer, which would give CVS an even bigger slice of the PBM pie would need to be ditched. And the local picture matters. In the median American state, for example, the two largest health insurers have 66% of the market. Trustbusters might need to insist on the sale of some local assets to smaller rivals before approving a tie-up.
The Economist article is at https://www.economist.com/news/leaders/21730882-proposed-health-care-merger-raises-difficult-antitrust-questions-should-regulators-block-cvs
From Public Citizen Blog: Professor Chris Peterson's study on why the republican version of the CFPB -- contained in the Financial Choice Act of 2017 -- would be bad for consumers
If you want to learn what the CFPB would look like if republican plans to defang it were enacted, law prof Chris Peterson has done a study for you: Choosing Corporations Over Consumers: The Financial Choice Act of 2017 and the CFPB. Here is the abstract:
The Consumer Financial Protection Bureau (CFPB) is the U.S. Government’s primary regulator and civil law enforcement agency governing consumer lending, payment systems, debt collection, and other consumer financial services. Created in the wake of the financial crisis, Congress tasked the agency with stopping deceptive, unfair, and abusive consumer finance. However, Congress is currently considering legislation which would significantly change the CFPB’s law enforcement authorities. This Article analyzes the proposed Financial Choice Act of 2017 which would rename the CFPB, and eliminate many of the CFPB’s law enforcement powers. If the Financial Choice Act were the law of the United States from 2012 to 2016, how would the CFPB’s enforcement track record have changed? Drawing upon pleadings, consent orders, settlement agreements, press releases, and other public documents, this Article presents an empirical study of every publicly announced CFPB enforcement case to determine what law enforcement cases and awards would have been eliminated had the bill been law. Among the study’s findings, had the Financial Choice Act had been adopted in 2012 it would have eliminated:
• Over 91 percent of consumer restitution for illegal home mortgage lending practices, amounting to $2.7 billion dollars;
• Over 94 percent of consumer restitution for illegal credit card practices amounting to $6.8 billion dollars; and
• Every single case addressing illegal practices in the “payday” and car title lending industry.
The study concludes that the Financial Choice Act of 2017 will, if enacted, seriously weaken the CFPB’s law enforcement program.
If you want to learn what the CFPB would look like if republican plans to defang it were enacted, law prof Chris Peterson has done a study for you: Choosing Corporations Over Consumers: The Financial Choice Act of 2017 and the CFPB. Here is the abstract:
The Consumer Financial Protection Bureau (CFPB) is the U.S. Government’s primary regulator and civil law enforcement agency governing consumer lending, payment systems, debt collection, and other consumer financial services. Created in the wake of the financial crisis, Congress tasked the agency with stopping deceptive, unfair, and abusive consumer finance. However, Congress is currently considering legislation which would significantly change the CFPB’s law enforcement authorities. This Article analyzes the proposed Financial Choice Act of 2017 which would rename the CFPB, and eliminate many of the CFPB’s law enforcement powers. If the Financial Choice Act were the law of the United States from 2012 to 2016, how would the CFPB’s enforcement track record have changed? Drawing upon pleadings, consent orders, settlement agreements, press releases, and other public documents, this Article presents an empirical study of every publicly announced CFPB enforcement case to determine what law enforcement cases and awards would have been eliminated had the bill been law. Among the study’s findings, had the Financial Choice Act had been adopted in 2012 it would have eliminated:
• Over 91 percent of consumer restitution for illegal home mortgage lending practices, amounting to $2.7 billion dollars;
• Over 94 percent of consumer restitution for illegal credit card practices amounting to $6.8 billion dollars; and
• Every single case addressing illegal practices in the “payday” and car title lending industry.
The study concludes that the Financial Choice Act of 2017 will, if enacted, seriously weaken the CFPB’s law enforcement program.
On Thursday, November 30, a High Court judge in London handed a win to Visa, ruling in a long-running case brought by Sainsbury’s Supermarkets Ltd. that the credit card company did not set its interchange fees at an unlawful level that restricted competition
In 2013 a group of high street retailers launched legal proceedings in the UK, claiming that Visa’s UK and cross-border European interchange fees were contrary to competition law.
The card giant is now claiming victory after a high court ruling that its UK fees are lawful and is looking to put the matter to bed, urging merchants to work with it to “create the future of digital commerce.”
In an open letter, Visa said, “We hope the Court’s decision will accelerate the collaboration between retailers and Visa and will allow us to address the greatest disruption – and potentially the greatest opportunity – facing the merchant community in Europe today: the digitisation of commerce.”
A Sainsbury’s spokeswoman said, “This claim concerned the damage Sainsbury’s maintains was caused by Visa’s breach of UK and EU competition laws in its setting of interchange fees.
“Sainsbury’s is disappointed by the decision of the High Court in finding that Visa had not infringed competition law.
“Sainsbury’s is now considering its position.” It is expected to launch an appeal.
Sainsbury’s won a separate court case last summer, with a £68 million (US$91.9 million) award from Mastercard.
Full Content: AOL & Law 360
In 2013 a group of high street retailers launched legal proceedings in the UK, claiming that Visa’s UK and cross-border European interchange fees were contrary to competition law.
The card giant is now claiming victory after a high court ruling that its UK fees are lawful and is looking to put the matter to bed, urging merchants to work with it to “create the future of digital commerce.”
In an open letter, Visa said, “We hope the Court’s decision will accelerate the collaboration between retailers and Visa and will allow us to address the greatest disruption – and potentially the greatest opportunity – facing the merchant community in Europe today: the digitisation of commerce.”
A Sainsbury’s spokeswoman said, “This claim concerned the damage Sainsbury’s maintains was caused by Visa’s breach of UK and EU competition laws in its setting of interchange fees.
“Sainsbury’s is disappointed by the decision of the High Court in finding that Visa had not infringed competition law.
“Sainsbury’s is now considering its position.” It is expected to launch an appeal.
Sainsbury’s won a separate court case last summer, with a £68 million (US$91.9 million) award from Mastercard.
Full Content: AOL & Law 360
The ACLU brief in US v Carpenter, the recently argued US Supreme Court case on warrantless use of cellphone location data
From the brief:
Simply by using cell phones, the government maintains, the populace gives law enforcement constitutionally unchecked authority to collect a detailed record of every person’s historical whereabouts — without probable cause, a warrant, or any Fourth Amendment protection whatsoever.
This cannot be right.
The brief is at https://www.aclu.org/legal-document/united-states-v-carpenter-reply-brief-petitioner
From the brief:
Simply by using cell phones, the government maintains, the populace gives law enforcement constitutionally unchecked authority to collect a detailed record of every person’s historical whereabouts — without probable cause, a warrant, or any Fourth Amendment protection whatsoever.
This cannot be right.
The brief is at https://www.aclu.org/legal-document/united-states-v-carpenter-reply-brief-petitioner
The Supreme Court seemed ready at oral argument to interpret a federal law protecting whistle-blowers narrowly, barring many retaliation suits from people who say they were fired for reporting wrongdoing.
The plain words of the law, part of the Dodd-Frank Act, required that conclusion, justices across the ideological spectrum said.
“How much clearer could Congress have been?” Justice Neil M. Gorsuch asked.
The question for the justices was who qualified as a whistle-blower entitled to protection from retaliation. Most of the justices seemed ready to rely on the definition in the law itself, which defines “whistle-blower” to mean “an individual who provides information relating to a violation of the securities laws” to the Securities and Exchange Commission.
The definition seemed to exclude people who merely reported wrongdoing to their employers, and some justices said that could have been a drafting oversight.
The transcript of the oral argument before the US Supreme Court is here: https://www.supremecourt.gov/oral_arguments/argument_transcripts/2017/16-1276_i426.pdf
See NYT article: https://www.nytimes.com/2017/11/28/business/29dc-bizcourt.html
The plain words of the law, part of the Dodd-Frank Act, required that conclusion, justices across the ideological spectrum said.
“How much clearer could Congress have been?” Justice Neil M. Gorsuch asked.
The question for the justices was who qualified as a whistle-blower entitled to protection from retaliation. Most of the justices seemed ready to rely on the definition in the law itself, which defines “whistle-blower” to mean “an individual who provides information relating to a violation of the securities laws” to the Securities and Exchange Commission.
The definition seemed to exclude people who merely reported wrongdoing to their employers, and some justices said that could have been a drafting oversight.
The transcript of the oral argument before the US Supreme Court is here: https://www.supremecourt.gov/oral_arguments/argument_transcripts/2017/16-1276_i426.pdf
See NYT article: https://www.nytimes.com/2017/11/28/business/29dc-bizcourt.html
CVS Health could announce an acquisition of insurer Aetna for more than US$66 billion as early as Monday, December 4
The talks are advanced and would likely see Aetna valued at between US$200 and US$205 a share offered mainly in cash.
Aetna shares rose about 1% on the news. CVS shares rose more than 2% on the report.
Full Content: Wall Street Journal
The talks are advanced and would likely see Aetna valued at between US$200 and US$205 a share offered mainly in cash.
Aetna shares rose about 1% on the news. CVS shares rose more than 2% on the report.
Full Content: Wall Street Journal
Leandra English's lawsuit defending her right to head the CFPB is here:
https://assets.documentcloud.org/documents/4310647/English-Complaint-CFPB.pdf …
From the Complaint:
Effective at midnight on November 24, 2017, the Bureau’s first Director, Richard Cordray, resigned his post. At that point, plaintiff Leandra English, the Bureau’s Deputy Director, became the agency’s Acting Director by operation of law. The Dodd-Frank Act is clear on this point: It mandates that the Deputy Director “shall . . . serve as the acting Director in the absence or unavailability of the Director.” 12 U.S.C. § 5491(b)(5)(B). By statute, she serves in that capacity until such time as the President appoints and the Senate confirms a new Director. See 12 U.S.C. § 5491(b)(2). Case 1:17-cv-02534 Document 1 Filed 11/26/17 Page 1 of 9 2
Disregarding this statutory language, President Trump issued a press release on the evening of November 24 indicating his desire to install defendant Mulvaney, the Director of the White House Office of Management and Budget, as the Bureau’s Acting Director. Under this scenario, Mr. Mulvaney would seek to serve indefinitely as the interim head of a statutorily “independent” agency while simultaneously occupying his current White House post.
The President apparently believes that he has authority to appoint Mr. Mulvaney under the Federal Vacancies Reform Act of 1988, 5 U.S.C. § 3345(a)(2). But the Vacancies Act, by its own terms, does not apply where another statute “expressly . . . designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity,” 5 U.S.C. § 3347(a)(1)(B)—which is exactly what the Dodd-Frank Act does.
https://assets.documentcloud.org/documents/4310647/English-Complaint-CFPB.pdf …
From the Complaint:
Effective at midnight on November 24, 2017, the Bureau’s first Director, Richard Cordray, resigned his post. At that point, plaintiff Leandra English, the Bureau’s Deputy Director, became the agency’s Acting Director by operation of law. The Dodd-Frank Act is clear on this point: It mandates that the Deputy Director “shall . . . serve as the acting Director in the absence or unavailability of the Director.” 12 U.S.C. § 5491(b)(5)(B). By statute, she serves in that capacity until such time as the President appoints and the Senate confirms a new Director. See 12 U.S.C. § 5491(b)(2). Case 1:17-cv-02534 Document 1 Filed 11/26/17 Page 1 of 9 2
Disregarding this statutory language, President Trump issued a press release on the evening of November 24 indicating his desire to install defendant Mulvaney, the Director of the White House Office of Management and Budget, as the Bureau’s Acting Director. Under this scenario, Mr. Mulvaney would seek to serve indefinitely as the interim head of a statutorily “independent” agency while simultaneously occupying his current White House post.
The President apparently believes that he has authority to appoint Mr. Mulvaney under the Federal Vacancies Reform Act of 1988, 5 U.S.C. § 3345(a)(2). But the Vacancies Act, by its own terms, does not apply where another statute “expressly . . . designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity,” 5 U.S.C. § 3347(a)(1)(B)—which is exactly what the Dodd-Frank Act does.
The Trump administration late Friday set up a clash over the leadership of the Consumer Financial Protection Bureau, installing an acting director hours after Richard Cordray told the agency his chief of staff would assume the role at the moment of his departure
Cordray named Leandra English as deputy director, setting her up to become acting director after Cordray’s departure. Cordray sent out his resignation letter to staff on Friday, moving up his planned departure a week. His resignation is effective midnight on Friday.
Cordray said in a separate letter to the CFPB on Friday: “In considering how to ensure an orderly succession for this independent agency, I determined that it would be best to avoid leaving this key position filled only in an acting capacity. In consultation over the past few days, I have also come to recognize that appointing the current chief of staff to the deputy director position would minimize operational disruption and provide for a smooth transition given her operational expertise.”
Hours after Cordray’s announcement, President Donald Trump said Mick Mulvaney, director of the Office of Management and Budget, would
serve as acting director of the CFPB.
The White House said in a statement: “The president looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities. Director Mulvaney will serve as Acting Director until a permanent director is nominated and confirmed.”
The move set up a clash over the leadership of the agency.
Sen. Elizabeth Warren, D-Massachusetts, an architect of the CFPB, tweeted on Friday:
View image on Twitter
Elizabeth Warren
✔@SenWarren
The Dodd-Frank Act is clear: if there is a @CFPB Director vacancy, the Deputy Director becomes Acting Director. @realDonaldTrump can’t override that.
“If there ends up being a dispute about who’s the rightful head of the CFPB, the final say will rest with the courts. And if the courts follow the text, structure, and history of Dodd-Frank, it’s clear what they should say: Leandra English is currently the acting Director of the CFPB,” Brianne Gorod, chief counsel to the Constitutional Accountability Center, wrote late Friday at the blog Take Care.
Full article at https://www.law.com/nationallawjournal/sites/nationallawjournal/2017/11/24/read-consumer-bureau-director-richard-cordrays-resignation-letter/?slreturn=20171025081145
Cordray named Leandra English as deputy director, setting her up to become acting director after Cordray’s departure. Cordray sent out his resignation letter to staff on Friday, moving up his planned departure a week. His resignation is effective midnight on Friday.
Cordray said in a separate letter to the CFPB on Friday: “In considering how to ensure an orderly succession for this independent agency, I determined that it would be best to avoid leaving this key position filled only in an acting capacity. In consultation over the past few days, I have also come to recognize that appointing the current chief of staff to the deputy director position would minimize operational disruption and provide for a smooth transition given her operational expertise.”
Hours after Cordray’s announcement, President Donald Trump said Mick Mulvaney, director of the Office of Management and Budget, would
serve as acting director of the CFPB.
The White House said in a statement: “The president looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities. Director Mulvaney will serve as Acting Director until a permanent director is nominated and confirmed.”
The move set up a clash over the leadership of the agency.
Sen. Elizabeth Warren, D-Massachusetts, an architect of the CFPB, tweeted on Friday:
View image on Twitter
Elizabeth Warren
✔@SenWarren
The Dodd-Frank Act is clear: if there is a @CFPB Director vacancy, the Deputy Director becomes Acting Director. @realDonaldTrump can’t override that.
“If there ends up being a dispute about who’s the rightful head of the CFPB, the final say will rest with the courts. And if the courts follow the text, structure, and history of Dodd-Frank, it’s clear what they should say: Leandra English is currently the acting Director of the CFPB,” Brianne Gorod, chief counsel to the Constitutional Accountability Center, wrote late Friday at the blog Take Care.
Full article at https://www.law.com/nationallawjournal/sites/nationallawjournal/2017/11/24/read-consumer-bureau-director-richard-cordrays-resignation-letter/?slreturn=20171025081145
Cerner deal as another sign Amazon has big plans for healthcare
by Mark Brohan | Nov 24, 2017 (click title for link to full article)
Reportedly, the two companies will announce a business development and technology integration deal whereby Amazon Web Services would provide cloud computing services for HealtheIntent, Cerner’s population health management product series.New reports have Amazon.com Inc. via its Amazon Web Services unit, moving further into digital healthcare with a new partnership with electronic health records vendor Cerner Corp.
If that is indeed the case the move makes lots of sense and opens new potential for both companies, says R.W. Baird senior research analyst Matthew Gilmore who follows healthcare stocks.
CNBC has reported that next week Amazon Web Services, the online retailer’s cloud computing arm, will announce a major new alliance with Cerner at its annual user group meeting. Reportedly, the two companies will announce a business development and technology integration deal whereby Amazon Web Services would provide cloud computing services for HealtheIntent, Cerner’s population health management product series. Amazon and Cerner have yet to talk publicly about the proposed deal.
The expanded relationship will also leverage AWS's analytics capabilities and global data.
Population Health Management is the aggregation of patient data from many sources into a single electronic patient record. HealtheIntent is a cloud-based, population health management system that Cerner says can receive data from any electronic health record, existing healthcare information technology system and other data sources, such as pharmacy benefits managers or insurance claims.
Big health systems such as Carolinas HealthCare in Charlotte, NC, are using HealtheIntent to better manage more than 12 million patient records says.
Cerner already utilizes Amazon Web Services for storage services, but it is reportedly set to use AWS for a broader range of cloud computing services to support HealtheIntent. If that is case, Cerner be able to offer better cloud computing services to major hospital clients at time when many are looking to replace outdated legacy systems with cloud-based software.
In return Amazon, via Amazon Web Services, gets broader access to the mainstream health systems and hospital information technology market, says Gilmore. “We believe Cerner’s population health platform, HealtheIntent, already uses Amazon AWS for storage and other services, but the expanded relationship will also leverage AWS’s analytics capabilities and global data,” Gilmore writes in a new research note.
With Amazon reportedly weighing a broader move into healthcare, the deal with Cerner gives the e-commerce giant new ways to sell to hospitals, Gilmore says.
* * * *
Editor's note: A writing by Don Resnikoff and Katherine Jones described the dominance of Epic, the leading company in the health care records space. The Amazon/Cerner alliance is potentially a threat to Epic's dominance. See http://www.scribd.com/doc/211776613/DC-ConsumerRightsCoalition-Comments-for-FTC-Public-Workshop-3-10-14 Following is an excerpt from the Resnikoff-Jones writing describing the Health Information Technology (HIT) industry:
Avoiding another “Microsoft” Situation
Experienced antitrust observers have counseled about the danger that HIT companies may follow
in the footsteps of other technology companies, such as Microsoft, that attracted antitrust law
enforcement. Microsoft’s behavior raised competitive concerns when the company achieved a
strong market presence early in the development of particular software markets, and then sought
to protect its dominant position in those markets by withholding access to its proprietary
technologies from competitors and potential competitors.7 Microsoft achieved its dominant
position in the marketplace in large part by offering a product that consumers valued. But its
behavior raised competition concerns when it began to appear to make strategic decisions with
an eye towards thwarting competition, instead of competing by simply continuing to improve its
technology in ways that would benefit consumers.
HIT has network characteristics that could all too easily tip markets toward settling on the use of
one particular proprietary technology and abandoning other technologies. In the absence of
interoperability, such a development might have the effect of foreclosing competitors to a
dominant firm from being able to enter a market and offer competition. It might also create
difficulties for health care providers in seeking access to information needed to effectively offer
their services to consumers. And finally, it might open the door to strategic use of proprietary
technology in ways that cause competitive harm. Such use of proprietary technology can be
especially anticompetitive when the cost of switching to another software vender is high. In the
case of Microsoft, the problematic strategic behavior was Microsoft’s effort to hold on to market
ascendency by protecting its proprietary platform technology in a manner perceived by
government enforcers as improperly foreclosing competition. Blocking competition in HIT
markets through strategic use of proprietary standards is, of course, the opposite of facilitating
interoperability.
The State of Current HIT Markets
Currently, companies providing HIT products already exist that have a strong market position
that may have resulted, at least in part, through reliance on proprietary standards and network
effects. One company that has drawn attention because of its strong market position is Epic
Systems. Some have suggested that about 40% of the U.S. population has its medical
information stored in an Epic EHR system. Other data suggests that Epic market shares in
various segments of the EHR market vary from about 15% to 30%, substantially less than the
market shares of Microsoft when it aroused strong government antitrust concerns. Some federal
data suggests that Epic has the most customers receiving federal electronic health record system
incentive payments in a key category, complete EHRs. Of 2,950 hospitals receiving federal
payments for using complete EHRs in the inpatient environment, Epic has 578, a 19.6% market
share, in this segment. It appears that for large physician practices and hospitals, Epic is
currently the company with the greatest market presence. Evidence of this presence can be
found in, among other sources, the result of annual year-end rankings published by the research
firm KLAS. Epic has long been a very large player in EHR for “jumbo” group practices. One
industry expert suggests that Epic dominates inpatient EHR among large hospitals and health
systems, and increasingly, physician practices: "Even if physicians prefer another vendor, they're
forced to go on the hospital's system."
Epic Systems is not without competitors in various segments of the EHR market. They include
Meditech, Computer Programs and Systems, Cerner, HCA Information & Technology Services,
and Athenahealth. Some competitors arguably have superior technology which could increase
their market position in the future.
by Mark Brohan | Nov 24, 2017 (click title for link to full article)
Reportedly, the two companies will announce a business development and technology integration deal whereby Amazon Web Services would provide cloud computing services for HealtheIntent, Cerner’s population health management product series.New reports have Amazon.com Inc. via its Amazon Web Services unit, moving further into digital healthcare with a new partnership with electronic health records vendor Cerner Corp.
If that is indeed the case the move makes lots of sense and opens new potential for both companies, says R.W. Baird senior research analyst Matthew Gilmore who follows healthcare stocks.
CNBC has reported that next week Amazon Web Services, the online retailer’s cloud computing arm, will announce a major new alliance with Cerner at its annual user group meeting. Reportedly, the two companies will announce a business development and technology integration deal whereby Amazon Web Services would provide cloud computing services for HealtheIntent, Cerner’s population health management product series. Amazon and Cerner have yet to talk publicly about the proposed deal.
The expanded relationship will also leverage AWS's analytics capabilities and global data.
Population Health Management is the aggregation of patient data from many sources into a single electronic patient record. HealtheIntent is a cloud-based, population health management system that Cerner says can receive data from any electronic health record, existing healthcare information technology system and other data sources, such as pharmacy benefits managers or insurance claims.
Big health systems such as Carolinas HealthCare in Charlotte, NC, are using HealtheIntent to better manage more than 12 million patient records says.
Cerner already utilizes Amazon Web Services for storage services, but it is reportedly set to use AWS for a broader range of cloud computing services to support HealtheIntent. If that is case, Cerner be able to offer better cloud computing services to major hospital clients at time when many are looking to replace outdated legacy systems with cloud-based software.
In return Amazon, via Amazon Web Services, gets broader access to the mainstream health systems and hospital information technology market, says Gilmore. “We believe Cerner’s population health platform, HealtheIntent, already uses Amazon AWS for storage and other services, but the expanded relationship will also leverage AWS’s analytics capabilities and global data,” Gilmore writes in a new research note.
With Amazon reportedly weighing a broader move into healthcare, the deal with Cerner gives the e-commerce giant new ways to sell to hospitals, Gilmore says.
* * * *
Editor's note: A writing by Don Resnikoff and Katherine Jones described the dominance of Epic, the leading company in the health care records space. The Amazon/Cerner alliance is potentially a threat to Epic's dominance. See http://www.scribd.com/doc/211776613/DC-ConsumerRightsCoalition-Comments-for-FTC-Public-Workshop-3-10-14 Following is an excerpt from the Resnikoff-Jones writing describing the Health Information Technology (HIT) industry:
Avoiding another “Microsoft” Situation
Experienced antitrust observers have counseled about the danger that HIT companies may follow
in the footsteps of other technology companies, such as Microsoft, that attracted antitrust law
enforcement. Microsoft’s behavior raised competitive concerns when the company achieved a
strong market presence early in the development of particular software markets, and then sought
to protect its dominant position in those markets by withholding access to its proprietary
technologies from competitors and potential competitors.7 Microsoft achieved its dominant
position in the marketplace in large part by offering a product that consumers valued. But its
behavior raised competition concerns when it began to appear to make strategic decisions with
an eye towards thwarting competition, instead of competing by simply continuing to improve its
technology in ways that would benefit consumers.
HIT has network characteristics that could all too easily tip markets toward settling on the use of
one particular proprietary technology and abandoning other technologies. In the absence of
interoperability, such a development might have the effect of foreclosing competitors to a
dominant firm from being able to enter a market and offer competition. It might also create
difficulties for health care providers in seeking access to information needed to effectively offer
their services to consumers. And finally, it might open the door to strategic use of proprietary
technology in ways that cause competitive harm. Such use of proprietary technology can be
especially anticompetitive when the cost of switching to another software vender is high. In the
case of Microsoft, the problematic strategic behavior was Microsoft’s effort to hold on to market
ascendency by protecting its proprietary platform technology in a manner perceived by
government enforcers as improperly foreclosing competition. Blocking competition in HIT
markets through strategic use of proprietary standards is, of course, the opposite of facilitating
interoperability.
The State of Current HIT Markets
Currently, companies providing HIT products already exist that have a strong market position
that may have resulted, at least in part, through reliance on proprietary standards and network
effects. One company that has drawn attention because of its strong market position is Epic
Systems. Some have suggested that about 40% of the U.S. population has its medical
information stored in an Epic EHR system. Other data suggests that Epic market shares in
various segments of the EHR market vary from about 15% to 30%, substantially less than the
market shares of Microsoft when it aroused strong government antitrust concerns. Some federal
data suggests that Epic has the most customers receiving federal electronic health record system
incentive payments in a key category, complete EHRs. Of 2,950 hospitals receiving federal
payments for using complete EHRs in the inpatient environment, Epic has 578, a 19.6% market
share, in this segment. It appears that for large physician practices and hospitals, Epic is
currently the company with the greatest market presence. Evidence of this presence can be
found in, among other sources, the result of annual year-end rankings published by the research
firm KLAS. Epic has long been a very large player in EHR for “jumbo” group practices. One
industry expert suggests that Epic dominates inpatient EHR among large hospitals and health
systems, and increasingly, physician practices: "Even if physicians prefer another vendor, they're
forced to go on the hospital's system."
Epic Systems is not without competitors in various segments of the EHR market. They include
Meditech, Computer Programs and Systems, Cerner, HCA Information & Technology Services,
and Athenahealth. Some competitors arguably have superior technology which could increase
their market position in the future.
Is your new electric bicycle subject to regulation as a motorcycle? The National Council of State Legislators explains
State legislatures have begun to grapple with how to differentiate and define e-bikes and regulate their operation and equipment standards on roadways and trails in their respective states. One challenge is the distinction between other motorized vehicles such as scooters and mopeds, and the burgeoning market and interest in e-bikes as a cost-effective and environmentally friendly transportation option.
Electronic Bicycle: An e-bike that meets the federal definition of an electric bicycle and is subject to product safety standards for bicycles.
See http://www.ncsl.org/research/transportation/state-electric-bicycle-laws-a-legislative-primer.aspx
State legislatures have begun to grapple with how to differentiate and define e-bikes and regulate their operation and equipment standards on roadways and trails in their respective states. One challenge is the distinction between other motorized vehicles such as scooters and mopeds, and the burgeoning market and interest in e-bikes as a cost-effective and environmentally friendly transportation option.
Electronic Bicycle: An e-bike that meets the federal definition of an electric bicycle and is subject to product safety standards for bicycles.
See http://www.ncsl.org/research/transportation/state-electric-bicycle-laws-a-legislative-primer.aspx
The text of the recent FCC statement moving away from net neutrality:
http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1121/DOC-347868A1.pdf
http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db1121/DOC-347868A1.pdf
Paul Alan Levy on "bogus" Homeland Security summons seeking to identify the owners of a Twitter account hostile to the government agency
Posted: 21 Nov 2017
By Paul Alan Levy
Last spring, Twitter received a fair amount of attention for fighting a patently bogus attempt by the Department of Homeland Security to abuse its statutory authority to investigate the importation of goods as the basis for to issuing an administrative summons seeking to identify the owners of a Twitter account hostile to the new leadership of the U.S. Citizenship and Immigration Service. Twitter sued to block the summons, and the government withdrew it, mooting the litigation.
In response to a senatorial inquiry, the responsible agency (Customs and Border Protection) apparently tried to hide behind the DHS Inspector General, implying that the summons related to an OIG investigation of whether CPB staff were undermining their new president. The DHS Inspector General publicly repudiated that move, noting archly that OIG carefully considers First Amendment ramifications ("we strive . . . to ensure that our work does not have a chilling effect on individuals’ free speech rights"), but saying that the office was reviewing the question whether CBP had misbehaved in issuing the summons.
Late last week, the DHS OIG released a report condemning the summons as being impermissible under the statute. The report indicates that, in retrospect, Customs and Border Protection admitted that its staff have been taking an overbroad view of how they can use the summons procedure, and agreed to issue a new manual, to institute a new review process, and to provide training to ensure that such abuses are not repeated.
From: http://pubcit.typepad.com/clpblog/2017/11/homeland-security-inspector-general-pegs-back-misuse-of-importation-summons-authority.html?
Posted: 21 Nov 2017
By Paul Alan Levy
Last spring, Twitter received a fair amount of attention for fighting a patently bogus attempt by the Department of Homeland Security to abuse its statutory authority to investigate the importation of goods as the basis for to issuing an administrative summons seeking to identify the owners of a Twitter account hostile to the new leadership of the U.S. Citizenship and Immigration Service. Twitter sued to block the summons, and the government withdrew it, mooting the litigation.
In response to a senatorial inquiry, the responsible agency (Customs and Border Protection) apparently tried to hide behind the DHS Inspector General, implying that the summons related to an OIG investigation of whether CPB staff were undermining their new president. The DHS Inspector General publicly repudiated that move, noting archly that OIG carefully considers First Amendment ramifications ("we strive . . . to ensure that our work does not have a chilling effect on individuals’ free speech rights"), but saying that the office was reviewing the question whether CBP had misbehaved in issuing the summons.
Late last week, the DHS OIG released a report condemning the summons as being impermissible under the statute. The report indicates that, in retrospect, Customs and Border Protection admitted that its staff have been taking an overbroad view of how they can use the summons procedure, and agreed to issue a new manual, to institute a new review process, and to provide training to ensure that such abuses are not repeated.
From: http://pubcit.typepad.com/clpblog/2017/11/homeland-security-inspector-general-pegs-back-misuse-of-importation-summons-authority.html?
Walmart pulls back on aggressive online pricing, reducing competitive pressure on Amazon
Press reports suggest that Walmart has retreated from aggressive online pricing against major rival Amazon.
Walmart has worked hard to gain a position in on-line sales that rivals Amazon. In October, industry observer Nat Levy wrote that "Walmart has dropped some serious cash on deals to help grow the company’s online presence. It started with Jet.com, which Walmart bought for $3.3 billion. . . .Walmart has invested heavily in logistics and delivery as one of the primary fronts in its battle against Amazon. At the end of January, Walmart introduced free two-day shipping on millions of items for orders over $35." https://www.geekwire.com/2017/walmart-acquires-new-york-based-parcel-take-amazon-rapid-package-delivery/
2016 online sales were was reportedly strong for Walmart. "In its fourth quarter and year-end earnings report, Walmart said online sales increased 29 percent in the U.S. and 15.5 percent globally. Walmart does not release dollar figures for e-commerce sales." https://www.geekwire.com/2017/look-out-amazon-walmarts-3-3b-jet-com-deal-starts-to-pay-off-with-big-growth-in-online-sales/
According to the Geekwire article, Jet.com’s Founder and CEO Marc Lore, who is leading Walmart’s U.S. e-commerce effort, commented earlier this year that “We’re moving with speed to become more of a digital enterprise and better serve customers.”
Doug McMillon, president and CEO of Walmart, said in an earlier statement that Walmart has become the second largest online retailer by revenue and among the top three by traffic.
But recently the Wall Street Journal reported that Walmart is experimenting with a new system, which has at times resulted in higher web prices for goods that would otherwise be unprofitable to ship.
In some cases, product listings on walmart.com show an “online” and “in the store” price. Often the online price is now higher than the in store price and matches Amazon. Formerly, online and in store prices were generally the same.
“We always work to offer the best price online relative to other sites,” a Wal-Mart spokeswoman said to the Wall Street Journal. https://www.wsj.com/articles/now-featured-on-wal-marts-website-higher-prices-1510517219
Different comparison shoppers may disagree on whether Walmart was previously competing aggressively with Amazon on online prices, but some commenters found aggressive competition: "In this price comparison, Walmart.com offered the lowest price eight times, and Amazon was the best bargain in two cases. The retailers surprisingly had the same price on one-third of the products I compared. When I added up the total for all 15 items in my shopping cart, Walmart was the big winner: 17% cheaper than Amazon!" http://clark.com/shopping-retail/amazon-walmart-price-compare/
So what explains the Walmart decision to raise prices and be a less aggressive competitor to Amazon in the realm of on-line pricing? The frequently stated Walmart explanation is that it wants to drive customers to its brick and mortar stores.
Another idea may be suggested by Tim Wu's brief New Yorker article published a few years ago, which talks about the need for renewed antitrust attention for industries with a relatively few large players that coordinate in ways that have anticompetitive effects, but escape usual enforcement approaches.
Tim Wu authored a companion scholarly article written with Scott Hemphill. The New Yorker article is at http://www.newyorker.com/online/blogs/elements/2013/04/tmobile-verizon-monopoly-oligopoly-business-practices.html The scholarly paper, called “Parallel Exclusion,” can be found at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1986407 It discusses in greater detail some cases where a few large companies act in ways that are cooperative and anticompetitive, but without the explicit contractual offer and acceptance to pursue a conspiracy that facilitates a court finding of antitrust wrongdoing.
Of course, the Walmart/Amazon story can be looked at as simply about price. We might ask whether we are seeing tacit collusion on price, and whether, as Tim Wu and others have suggested, an antitrust problem should be found despite lack of explicit contractual offer and acceptance to pursue a conspiracy that facilitates a court finding of antitrust wrongdoing. Judge Posner threw cold water on litigation raising antitrust concerns about tacit collusion on price when he wrote in a 2015 opinion that "We can . . . expect competing firms to keep close track of each other’s pricing and other market behavior and often to find it in their self-interest to imitate that behavior rather than try to undermine it—the latter being a risky strategy, prone to invite retaliation. [That behavior is] consistent with independent parallel behavior. . . . [and] does not violate section 1 of the Sherman Act. Collusion is illegal only when based on agreement." IN RE: TEXT MESSAGING ANTITRUST LITIGATION. Aircraft Check Services Co., et al., individually and on behalf of all others similarly situated, Plaintiffs–Appellants, v. Verizon Wireless, et al., Defendants–Appellees. 782 F.3d 867 (7 Cir, 2015) Find on-line at https://h2o.law.harvard.edu/cases/5429
This comment is posted by Don Allen Resnikoff, who is solely responsible for its content
Press reports suggest that Walmart has retreated from aggressive online pricing against major rival Amazon.
Walmart has worked hard to gain a position in on-line sales that rivals Amazon. In October, industry observer Nat Levy wrote that "Walmart has dropped some serious cash on deals to help grow the company’s online presence. It started with Jet.com, which Walmart bought for $3.3 billion. . . .Walmart has invested heavily in logistics and delivery as one of the primary fronts in its battle against Amazon. At the end of January, Walmart introduced free two-day shipping on millions of items for orders over $35." https://www.geekwire.com/2017/walmart-acquires-new-york-based-parcel-take-amazon-rapid-package-delivery/
2016 online sales were was reportedly strong for Walmart. "In its fourth quarter and year-end earnings report, Walmart said online sales increased 29 percent in the U.S. and 15.5 percent globally. Walmart does not release dollar figures for e-commerce sales." https://www.geekwire.com/2017/look-out-amazon-walmarts-3-3b-jet-com-deal-starts-to-pay-off-with-big-growth-in-online-sales/
According to the Geekwire article, Jet.com’s Founder and CEO Marc Lore, who is leading Walmart’s U.S. e-commerce effort, commented earlier this year that “We’re moving with speed to become more of a digital enterprise and better serve customers.”
Doug McMillon, president and CEO of Walmart, said in an earlier statement that Walmart has become the second largest online retailer by revenue and among the top three by traffic.
But recently the Wall Street Journal reported that Walmart is experimenting with a new system, which has at times resulted in higher web prices for goods that would otherwise be unprofitable to ship.
In some cases, product listings on walmart.com show an “online” and “in the store” price. Often the online price is now higher than the in store price and matches Amazon. Formerly, online and in store prices were generally the same.
“We always work to offer the best price online relative to other sites,” a Wal-Mart spokeswoman said to the Wall Street Journal. https://www.wsj.com/articles/now-featured-on-wal-marts-website-higher-prices-1510517219
Different comparison shoppers may disagree on whether Walmart was previously competing aggressively with Amazon on online prices, but some commenters found aggressive competition: "In this price comparison, Walmart.com offered the lowest price eight times, and Amazon was the best bargain in two cases. The retailers surprisingly had the same price on one-third of the products I compared. When I added up the total for all 15 items in my shopping cart, Walmart was the big winner: 17% cheaper than Amazon!" http://clark.com/shopping-retail/amazon-walmart-price-compare/
So what explains the Walmart decision to raise prices and be a less aggressive competitor to Amazon in the realm of on-line pricing? The frequently stated Walmart explanation is that it wants to drive customers to its brick and mortar stores.
Another idea may be suggested by Tim Wu's brief New Yorker article published a few years ago, which talks about the need for renewed antitrust attention for industries with a relatively few large players that coordinate in ways that have anticompetitive effects, but escape usual enforcement approaches.
Tim Wu authored a companion scholarly article written with Scott Hemphill. The New Yorker article is at http://www.newyorker.com/online/blogs/elements/2013/04/tmobile-verizon-monopoly-oligopoly-business-practices.html The scholarly paper, called “Parallel Exclusion,” can be found at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1986407 It discusses in greater detail some cases where a few large companies act in ways that are cooperative and anticompetitive, but without the explicit contractual offer and acceptance to pursue a conspiracy that facilitates a court finding of antitrust wrongdoing.
Of course, the Walmart/Amazon story can be looked at as simply about price. We might ask whether we are seeing tacit collusion on price, and whether, as Tim Wu and others have suggested, an antitrust problem should be found despite lack of explicit contractual offer and acceptance to pursue a conspiracy that facilitates a court finding of antitrust wrongdoing. Judge Posner threw cold water on litigation raising antitrust concerns about tacit collusion on price when he wrote in a 2015 opinion that "We can . . . expect competing firms to keep close track of each other’s pricing and other market behavior and often to find it in their self-interest to imitate that behavior rather than try to undermine it—the latter being a risky strategy, prone to invite retaliation. [That behavior is] consistent with independent parallel behavior. . . . [and] does not violate section 1 of the Sherman Act. Collusion is illegal only when based on agreement." IN RE: TEXT MESSAGING ANTITRUST LITIGATION. Aircraft Check Services Co., et al., individually and on behalf of all others similarly situated, Plaintiffs–Appellants, v. Verizon Wireless, et al., Defendants–Appellees. 782 F.3d 867 (7 Cir, 2015) Find on-line at https://h2o.law.harvard.edu/cases/5429
This comment is posted by Don Allen Resnikoff, who is solely responsible for its content
FROM COVINGTON & BURLING LLP
FTC Seeks Comment on Petition to Modify 2009 Sears Order Concerning Online Browsing Tracking
By Calvin Cohen on November 14, 2017
The Federal Trade Commission (“FTC”) is soliciting public comments on a petition filed by Sears Holdings Management (“Sears”) to reopen and modify a 2009 FTC order regarding the tracking of personal information on their software apps. The petition is notable for a number of reasons. First, the Sears consent order was a seminal order in the development of the FTC’s privacy jurisdiction, standing for the proposition that a company cannot “bury” disclosures that consumers would not expect in long privacy notices. Second, the concept of modifying 20-year consent orders is an important one in light of changes over time. Third, the petition seeks to correct the unintended consequences that a consent order can have on future technologies when such an order regulates present ones.
In the 2009 FTC order, Sears settled charges that it failed to disclose adequately the scope of consumers’ personal information it collected via a downloadable software app. As part of that 20-year consent order, Sears agreed to make certain disclosures and obtain consent in connection with its downloadable software app and future ones that “monitor, record, or transmit information.” The petition argues that the 2009 FTC order should be modified to update its existing definition of “tracking application,” presently defined as:
any software program or application . . . that is capable of being installed on consumers’ computers and used . . . to monitor, record, or transmit information about activities occurring on computers on which it is installed, or about data that is stored on, created on, transmitted from or transmitted to the computers on which it is installed.
The petition seeks to modify this definition to exempt information about “(a) the configuration of the software program or application itself; (b) information regarding whether the program or application is functioning as represented; or (c) information regarding consumers’ use of the program or application itself.”
The petition argues that this modification is necessary for three reasons. First, changed circumstances in the mobile app arena have rendered the 2009 FTC order’s broad definition of “tracking application” impracticable. The FTC’s original administrative complaint targeted Sears’ desktop software application, which could track users’ activities outside of its boundaries. Since then, software distribution has overwhelmingly shifted from desktop to mobile apps, which are distributed through two main online marketplaces (Apple’s App Store and Google Play). These marketplaces control “the manner and form” of disclosures to consumers relating to apps and impose restrictions on the collection of information from consumers, in concert with the FTC’s goals. According to Sears, the desktop software that led to the 2009 FTC order “would be impermissible under the rules of the two dominant mobile app stores,” but the additional disclosure requirements imposed on Sears by the order are onerous given that the app stores have a “standardized workflow” to allow consumers to review the app provider’s data collection, use, and sharing policies before downloading the apps.
Second, Sears argues that modifying the 2009 FTC order is in the public interest. Sears argues that while the order was “intended to protect consumers from undisclosed and invasive tracking of consumers outside of” its software, the obligations it imposes upon Sears “are poorly adapted to today’s mobile app ecosystem.” Under the 2009 FTC order, a user of multiple Sears apps must read and consent to nearly identical disclosures in each of those apps, and “no other competitor uses a similarly disruptive approach to mobile app disclosures.” Similarly, modification of the order’s definition would reflect the commonplace practices of data collection and intra-app activity sharing in today’s marketplace. Sears’ mobile apps share data with remote servers to fulfill consumer requests and collect data to support app security. Such practices, the petition asserts, are consistent with the FTC’s 2012 privacy report.
Third, the petition argues that the requested modification is consistent with more recent FTC precedent and priorities. The petition cites two FTC orders from 2012 and 2013 that exempted the specific types of information collection enumerated above. Modifying the 2009 FTC order to exempt tracking that is “necessary for the basic operation of mobile apps” would be consistent with consumer expectations and recent FTC guidance and regulations. Indeed, the petition claims that modifying the definition of “tracking application” would leave intact the order’s “core continuing mandate—to provide notice to consumers when software applications engage in potentially invasive tracking.”
The petition will be subject to public comment through December 8, 2017. After that time, the Commission will decide whether to approve Sears’ petition to modify the definition of “tracking application” in the 2009 FTC order.
See https://www.ftc.gov/news-events/press-releases/2017/11/ftc-seeks-public-comment-sears-holdings-management-corporation?utm_source=govdelivery
C&B notes at https://www.insideprivacy.com/united-states/federal-trade-commission/ftc-seeks-comment-on-petition-to-modify-2009-sears-order-concerning-online-browsing-tracking/
FTC Seeks Comment on Petition to Modify 2009 Sears Order Concerning Online Browsing Tracking
By Calvin Cohen on November 14, 2017
The Federal Trade Commission (“FTC”) is soliciting public comments on a petition filed by Sears Holdings Management (“Sears”) to reopen and modify a 2009 FTC order regarding the tracking of personal information on their software apps. The petition is notable for a number of reasons. First, the Sears consent order was a seminal order in the development of the FTC’s privacy jurisdiction, standing for the proposition that a company cannot “bury” disclosures that consumers would not expect in long privacy notices. Second, the concept of modifying 20-year consent orders is an important one in light of changes over time. Third, the petition seeks to correct the unintended consequences that a consent order can have on future technologies when such an order regulates present ones.
In the 2009 FTC order, Sears settled charges that it failed to disclose adequately the scope of consumers’ personal information it collected via a downloadable software app. As part of that 20-year consent order, Sears agreed to make certain disclosures and obtain consent in connection with its downloadable software app and future ones that “monitor, record, or transmit information.” The petition argues that the 2009 FTC order should be modified to update its existing definition of “tracking application,” presently defined as:
any software program or application . . . that is capable of being installed on consumers’ computers and used . . . to monitor, record, or transmit information about activities occurring on computers on which it is installed, or about data that is stored on, created on, transmitted from or transmitted to the computers on which it is installed.
The petition seeks to modify this definition to exempt information about “(a) the configuration of the software program or application itself; (b) information regarding whether the program or application is functioning as represented; or (c) information regarding consumers’ use of the program or application itself.”
The petition argues that this modification is necessary for three reasons. First, changed circumstances in the mobile app arena have rendered the 2009 FTC order’s broad definition of “tracking application” impracticable. The FTC’s original administrative complaint targeted Sears’ desktop software application, which could track users’ activities outside of its boundaries. Since then, software distribution has overwhelmingly shifted from desktop to mobile apps, which are distributed through two main online marketplaces (Apple’s App Store and Google Play). These marketplaces control “the manner and form” of disclosures to consumers relating to apps and impose restrictions on the collection of information from consumers, in concert with the FTC’s goals. According to Sears, the desktop software that led to the 2009 FTC order “would be impermissible under the rules of the two dominant mobile app stores,” but the additional disclosure requirements imposed on Sears by the order are onerous given that the app stores have a “standardized workflow” to allow consumers to review the app provider’s data collection, use, and sharing policies before downloading the apps.
Second, Sears argues that modifying the 2009 FTC order is in the public interest. Sears argues that while the order was “intended to protect consumers from undisclosed and invasive tracking of consumers outside of” its software, the obligations it imposes upon Sears “are poorly adapted to today’s mobile app ecosystem.” Under the 2009 FTC order, a user of multiple Sears apps must read and consent to nearly identical disclosures in each of those apps, and “no other competitor uses a similarly disruptive approach to mobile app disclosures.” Similarly, modification of the order’s definition would reflect the commonplace practices of data collection and intra-app activity sharing in today’s marketplace. Sears’ mobile apps share data with remote servers to fulfill consumer requests and collect data to support app security. Such practices, the petition asserts, are consistent with the FTC’s 2012 privacy report.
Third, the petition argues that the requested modification is consistent with more recent FTC precedent and priorities. The petition cites two FTC orders from 2012 and 2013 that exempted the specific types of information collection enumerated above. Modifying the 2009 FTC order to exempt tracking that is “necessary for the basic operation of mobile apps” would be consistent with consumer expectations and recent FTC guidance and regulations. Indeed, the petition claims that modifying the definition of “tracking application” would leave intact the order’s “core continuing mandate—to provide notice to consumers when software applications engage in potentially invasive tracking.”
The petition will be subject to public comment through December 8, 2017. After that time, the Commission will decide whether to approve Sears’ petition to modify the definition of “tracking application” in the 2009 FTC order.
See https://www.ftc.gov/news-events/press-releases/2017/11/ftc-seeks-public-comment-sears-holdings-management-corporation?utm_source=govdelivery
C&B notes at https://www.insideprivacy.com/united-states/federal-trade-commission/ftc-seeks-comment-on-petition-to-modify-2009-sears-order-concerning-online-browsing-tracking/
CBS News reports that Ford is now offering free repairs to deal with reports of carbon monoxide seeping into Ford Explorers
Excerpts from CBS news:
Affecting models from 2011 to 2017, 1.3 million owners of the popular SUV will begin receiving notices beginning November 23, 2017.
But the automaker is stopping short of recalling the Explorer. The watchdog group, Center for Auto Safety, says anything short of a recall is not enough.
- The repairs include reprogramming the air conditioner, replacing drain valves and checking the seals around the back of the vehicle.
Nearly 1,300 people have filed complaints with the regulator. Ford acknowledged getting more than 2,000 reports as of August last year. In the letter to customers, Ford insists Explorers "are safe" and its "investigation has not found carbon monoxide levels that exceed what people are exposed to every day."
NTHSA said it's found no actual evidence of carbon monoxide poisoning. That's despite documented cases.
NHTSA isn't commenting on the timeline for its investigation, but said it is very concerned about this potential safety problem, adding, "this action by Ford does not bring closure to the issue." The agency recommends call your dealer if you get the letter.
See https://www.cbsnews.com/news/ford-explorer-carbon-monoxide-free-repairs/
From the Center for Auto Safety: "The Center for Auto Safety, the nation’s leading independent non-profit organization providing consumers a voice for auto safety, quality, and fuel economy, today [October 13] called on Ford and NHTSA to recall all Ford Explorers from 2011-2017 because of a risk of Carbon Monoxide poisoning to the drivers and occupants of more than 1.3 million vehicles.
https://www.autosafety.org/center-auto-safety-calls-ford-recall-explorers-carbon-monoxide-exposure-inside-1-3-million-vehicles/
We have not yet found the text of the Ford letter. DR
The Missouri AG goes where the USDOJ and FTC have not: The Missouri AG has subpoenaed Google.
The AG's press release explains the focus: "Google’s collection, use, and disclosure of information about Google users . . . misappropriation of online content from the websites of its competitors; and Google’s alleged manipulation of search results. . .
See https://www.ago.mo.gov/home/breaking-news/ag-hawley-issues-investigative-demands-to-google-inc-www.ago.mo.gov/home/breaking-news/ag-hawley-issues-investigative-demands-to-google-inc-
The AG's press release explains the focus: "Google’s collection, use, and disclosure of information about Google users . . . misappropriation of online content from the websites of its competitors; and Google’s alleged manipulation of search results. . .
See https://www.ago.mo.gov/home/breaking-news/ag-hawley-issues-investigative-demands-to-google-inc-www.ago.mo.gov/home/breaking-news/ag-hawley-issues-investigative-demands-to-google-inc-
Public Citizen's Paul Alan Levy: DC Superior Court Ruling on the Facebook Search Warrant: The Good, the Bad, and the Ugly
Excerpt from Levy posting:
D.C. Superior Court Chief Judge Robert Morin has issued his ruling on the pending objections to search warrants served on Facebook by Federal prosecutors seeking the entire contents of the Facebook accounts for the DisruptJ20 Facebook page as well as the personal accounts of two individuals, Lacey MacAuley and Legba Carrefour, who served as press contacts for the DisruptJ20 organizing effort. His decision represents something of a mixture of good and bad. The judge insisted on strong protections are provided for the identities of the anonymous third-parties who communicated with the page and the accounts, the client group whom I have been representing as a Public Citizen litigator, and good protections for the owner of the DisruptJ20 page. But he accorded fewer protections to the individual account holders – ironically, the very people who are likely to be the most in need of privacy protections. And the judge closes with an odd ruling on intervention.
The full Levy posting is at http://pubcit.typepad.com/clpblog/2017/11/dc-superior-court-ruling-on-the-facebook-search-warrant-the-good-the-bad-and-the-ugly.html?pubcit.typepad.com/clpblog/2017/11/dc-superior-court-ruling-on-the-facebook-search-warrant-the-good-the-bad-and-the-ugly.html?
Excerpt from Levy posting:
D.C. Superior Court Chief Judge Robert Morin has issued his ruling on the pending objections to search warrants served on Facebook by Federal prosecutors seeking the entire contents of the Facebook accounts for the DisruptJ20 Facebook page as well as the personal accounts of two individuals, Lacey MacAuley and Legba Carrefour, who served as press contacts for the DisruptJ20 organizing effort. His decision represents something of a mixture of good and bad. The judge insisted on strong protections are provided for the identities of the anonymous third-parties who communicated with the page and the accounts, the client group whom I have been representing as a Public Citizen litigator, and good protections for the owner of the DisruptJ20 page. But he accorded fewer protections to the individual account holders – ironically, the very people who are likely to be the most in need of privacy protections. And the judge closes with an odd ruling on intervention.
The full Levy posting is at http://pubcit.typepad.com/clpblog/2017/11/dc-superior-court-ruling-on-the-facebook-search-warrant-the-good-the-bad-and-the-ugly.html?pubcit.typepad.com/clpblog/2017/11/dc-superior-court-ruling-on-the-facebook-search-warrant-the-good-the-bad-and-the-ugly.html?
Watch the video of the recent Open Markets Institute program featuring Senator Al Franken: Are tech giants too big for American Democracy?
The video is at http://openmarketsinstitute.org/
The video is at http://openmarketsinstitute.org/
Wired reviews Franken speech to Open Markets Institute on dangers of big tech - - Google, Facebook, Amazon, etc.
SENATOR AL FRANKEN (D-Minnesota) delivered some of the sharpest criticism yet about the dangers of tech giants like Facebook, Google, and Amazon during a speech on Wednesday, encouraging regulators, as well as lawmakers in both parties, to better police the market power of dominant online platforms.
“Everyone is rightfully focused on Russian manipulation of social media, but as lawmakers it is incumbent on us to ask the broader questions: How did big tech come to control so many aspects of our lives?” Franken asked in a speech to a Washington think tank. A handful of companies decide what Americans “see, read, and buy,” dominating access to information and facilitating the spread of disinformation, he added.
“Last week’s hearings demonstrate that these companies might not be up to the challenge they created for themselves,” Franken said.
* * *
Franken has not shied away from voicing concerns about tech’s encroachments on privacy and competition in the past, but Wednesday’s criticism was unusually sweeping, tying together a revised narrative about Silicon Valley that only emerged in glimpses during the Russia hearings. Franken argued that the same control over consumers that facilitated the spread of Russian propaganda on social media also helps Facebook and Google siphon advertising revenue from other publishers and helps Amazon dictate terms to content creators and smaller sellers. Tech giants are incentivized to disregard consumer privacy, Franken noted. “Accumulating massive troves of information isn’t just a side project for them. It’s their whole business model,” he said. “We are not their customers, we are their product.”
Franken’s speech kicked off an event hosted by Open Markets Institute, a think tank devoted to fighting monopoly power. The group is led by former journalist Barry Lynn, who gained fame when his group was asked to leave New America, a left-leaning think tank that counts Google among its financial backers, after Lynn praised a harsh European antitrust ruling against Google. Senator Elizabeth Warren (D-Massachusetts) offered a similar critique of tech at an Open Markets conference last year.
See https://www.wired.com/story/al-franken-just-gave-the-speech-big-tech-has-been-dreading/
SENATOR AL FRANKEN (D-Minnesota) delivered some of the sharpest criticism yet about the dangers of tech giants like Facebook, Google, and Amazon during a speech on Wednesday, encouraging regulators, as well as lawmakers in both parties, to better police the market power of dominant online platforms.
“Everyone is rightfully focused on Russian manipulation of social media, but as lawmakers it is incumbent on us to ask the broader questions: How did big tech come to control so many aspects of our lives?” Franken asked in a speech to a Washington think tank. A handful of companies decide what Americans “see, read, and buy,” dominating access to information and facilitating the spread of disinformation, he added.
“Last week’s hearings demonstrate that these companies might not be up to the challenge they created for themselves,” Franken said.
* * *
Franken has not shied away from voicing concerns about tech’s encroachments on privacy and competition in the past, but Wednesday’s criticism was unusually sweeping, tying together a revised narrative about Silicon Valley that only emerged in glimpses during the Russia hearings. Franken argued that the same control over consumers that facilitated the spread of Russian propaganda on social media also helps Facebook and Google siphon advertising revenue from other publishers and helps Amazon dictate terms to content creators and smaller sellers. Tech giants are incentivized to disregard consumer privacy, Franken noted. “Accumulating massive troves of information isn’t just a side project for them. It’s their whole business model,” he said. “We are not their customers, we are their product.”
Franken’s speech kicked off an event hosted by Open Markets Institute, a think tank devoted to fighting monopoly power. The group is led by former journalist Barry Lynn, who gained fame when his group was asked to leave New America, a left-leaning think tank that counts Google among its financial backers, after Lynn praised a harsh European antitrust ruling against Google. Senator Elizabeth Warren (D-Massachusetts) offered a similar critique of tech at an Open Markets conference last year.
See https://www.wired.com/story/al-franken-just-gave-the-speech-big-tech-has-been-dreading/
About the Democratic "Better Deal"
The brief four page document brief outlining a Democratic view of competition policy is at https://www.democraticleader.gov/wp-content/uploads/2017/07/A-Better-Deal-on-Competition-and-Costs.pdf
The Democratic statement has been criticized as too aggressive in recommending a "big-is-bad" approach to competition policy. It may also be criticized as too brief and general to provide useful guidance on remedies to competition issues. Be that as it may, an interesting aspect of the Democratic statement is its brief recital of current industry-specific problem areas: An excerpt follows:
Airlines:
Despite a rapid decline in the cost of fuel, ticket prices continue to rise while the quality of service declines. This is the result of a lack of competition in air travel; over the last two decades, regulators allowed mergers that reduced ten major U.S. airlines to four megacarriers.
Currently, those four carriers serve 80 percent of the market. As a result, consolidated airlines have mirrored each other in their attempts to reduce benefits and services, imposing egregious traveling fees, eliminating certain service lines, and downgrading amenities and consumer choice. Recently, we have seen those effects firsthand, with a United Airlines overbooking policy that led to the brutal assault of an airline passenger, shrinking airline seats, fees for using the overhead bin, and other similar policy changes that have hurt consumers.
Cable/Telecom:
Access to cable and internet services are critical for American consumers, workers, and small businesses to communicate and compete in today’s economy. Yet today, the market for those services is so concentrated that consumers rarely have any meaningful choice of provider, and prices are high enough to be prohibitive for many. In over 50 million households, Americans have no choice at all for internet provider; they are forced to pay the exorbitant price their single carrier requires, if they get service at all. In fact, some reports have determined that Americans pay far more for high-speed internet access, cable television, and home phone lines than people in many other advanced countries – even though the services they receive are not any better. And the largest companies rank the lowest on customer satisfaction rankings – they don’t need to improve their service because there is no competition. Consolidation in the telecommunications is not just between cable or phone providers;
increasingly, large firms are trying to buy up content providers. Currently, AT&T is trying to buy Time Warner. If AT&T succeeds in this deal, it will have more power to restrict the content access of its 135 million wireless and 25.5 million pay-TV subscribers. This will only enable the resulting behemoths to promote their own programming, unfairly discriminate against other 4 distributers and their ability to offer highly desired content, and further restrict small businesses from successfully competing in the market.
Beer Industry:
As of 2016, five breweries controlled over 50 percent of global beer production compared to ten companies in 2004. Although there is a burgeoning craft brewery industry, these small businesses are under threat from large legacy brewers that are acquiring their craft competitors or trying to block craft brewers’ access to the marketplace.
In the last year, InBev which owns Anheuser-Busch and is the world’s largest beer company, struck a deal to purchase SABMiller, the second largest. The companies have already announced that jobs will be cut as a result of the merger, and the resulting conglomerate will make it even harder for small, local breweries to compete.
Food Prices:
The consolidation of six agricultural giants is set to threaten the safety of food and agriculture in America. The merger of Dow with DuPont, Monsanto with Bayer AG, and Syngenta with ChemChina, will result in the control of more than 61 percent of commercial seed sales and 80 percent of the U.S. corn seed market. These mergers take place as countless farmers in rural America struggle to adapt to a declining farm economy. This corporate takeover of the farm industry will not only hurt small-town, family operated farms, who will have to pay more for seeds, but it will also raise food prices – vastly limiting consumer choice.
Eyeglasses:
With more than 200 million Americans affected by vision loss, eyeglass affordability has become a critical consumer issue that affects the entire nation [CDC]. Eyeglasses are a necessity for many Americans, but due to consolidation and concentration in the supply chain, they are increasingly difficult to afford. In fact, the current average price of eyeglasses is now at $400, a cost in line with an iPad, and is steadily rising [Consumer Reports]. The current eyeglass industry, both in the U.S. and abroad, is largely dominated by one company – Luxottica – which owns and manufactures most of the top eyewear and sunglass brands, such as Oakley, Ray-Ban, and Persol, in addition to luxury designer brands. It also owns most of major distribution chains like LensCrafters, Pearle Vision, Sears and Target Optical, and vision insurance company EyeMed Vision Care. If Essilor, which controls 45 percent of the global market share for lenses, successfully acquires Luxottica, the nearly $50 billion merger is set to control the entire supply chain of eyeglasses [Financial Times]. I
Posting by Don Allen Resnikoff, whi is responsible for its content
The brief four page document brief outlining a Democratic view of competition policy is at https://www.democraticleader.gov/wp-content/uploads/2017/07/A-Better-Deal-on-Competition-and-Costs.pdf
The Democratic statement has been criticized as too aggressive in recommending a "big-is-bad" approach to competition policy. It may also be criticized as too brief and general to provide useful guidance on remedies to competition issues. Be that as it may, an interesting aspect of the Democratic statement is its brief recital of current industry-specific problem areas: An excerpt follows:
Airlines:
Despite a rapid decline in the cost of fuel, ticket prices continue to rise while the quality of service declines. This is the result of a lack of competition in air travel; over the last two decades, regulators allowed mergers that reduced ten major U.S. airlines to four megacarriers.
Currently, those four carriers serve 80 percent of the market. As a result, consolidated airlines have mirrored each other in their attempts to reduce benefits and services, imposing egregious traveling fees, eliminating certain service lines, and downgrading amenities and consumer choice. Recently, we have seen those effects firsthand, with a United Airlines overbooking policy that led to the brutal assault of an airline passenger, shrinking airline seats, fees for using the overhead bin, and other similar policy changes that have hurt consumers.
Cable/Telecom:
Access to cable and internet services are critical for American consumers, workers, and small businesses to communicate and compete in today’s economy. Yet today, the market for those services is so concentrated that consumers rarely have any meaningful choice of provider, and prices are high enough to be prohibitive for many. In over 50 million households, Americans have no choice at all for internet provider; they are forced to pay the exorbitant price their single carrier requires, if they get service at all. In fact, some reports have determined that Americans pay far more for high-speed internet access, cable television, and home phone lines than people in many other advanced countries – even though the services they receive are not any better. And the largest companies rank the lowest on customer satisfaction rankings – they don’t need to improve their service because there is no competition. Consolidation in the telecommunications is not just between cable or phone providers;
increasingly, large firms are trying to buy up content providers. Currently, AT&T is trying to buy Time Warner. If AT&T succeeds in this deal, it will have more power to restrict the content access of its 135 million wireless and 25.5 million pay-TV subscribers. This will only enable the resulting behemoths to promote their own programming, unfairly discriminate against other 4 distributers and their ability to offer highly desired content, and further restrict small businesses from successfully competing in the market.
Beer Industry:
As of 2016, five breweries controlled over 50 percent of global beer production compared to ten companies in 2004. Although there is a burgeoning craft brewery industry, these small businesses are under threat from large legacy brewers that are acquiring their craft competitors or trying to block craft brewers’ access to the marketplace.
In the last year, InBev which owns Anheuser-Busch and is the world’s largest beer company, struck a deal to purchase SABMiller, the second largest. The companies have already announced that jobs will be cut as a result of the merger, and the resulting conglomerate will make it even harder for small, local breweries to compete.
Food Prices:
The consolidation of six agricultural giants is set to threaten the safety of food and agriculture in America. The merger of Dow with DuPont, Monsanto with Bayer AG, and Syngenta with ChemChina, will result in the control of more than 61 percent of commercial seed sales and 80 percent of the U.S. corn seed market. These mergers take place as countless farmers in rural America struggle to adapt to a declining farm economy. This corporate takeover of the farm industry will not only hurt small-town, family operated farms, who will have to pay more for seeds, but it will also raise food prices – vastly limiting consumer choice.
Eyeglasses:
With more than 200 million Americans affected by vision loss, eyeglass affordability has become a critical consumer issue that affects the entire nation [CDC]. Eyeglasses are a necessity for many Americans, but due to consolidation and concentration in the supply chain, they are increasingly difficult to afford. In fact, the current average price of eyeglasses is now at $400, a cost in line with an iPad, and is steadily rising [Consumer Reports]. The current eyeglass industry, both in the U.S. and abroad, is largely dominated by one company – Luxottica – which owns and manufactures most of the top eyewear and sunglass brands, such as Oakley, Ray-Ban, and Persol, in addition to luxury designer brands. It also owns most of major distribution chains like LensCrafters, Pearle Vision, Sears and Target Optical, and vision insurance company EyeMed Vision Care. If Essilor, which controls 45 percent of the global market share for lenses, successfully acquires Luxottica, the nearly $50 billion merger is set to control the entire supply chain of eyeglasses [Financial Times]. I
Posting by Don Allen Resnikoff, whi is responsible for its content
Comment: Does the law, and the legal process, conspire to facilitate sexual harassment in the corporate workplace?
Here are a few reasons why the answer might be yes, the law and legal process can conspire to facilitate or even encourage sexual harassment in the corporate workplace.
-- employment contracts may contain arbitration provisions. Arbitration proceedings can move the dispute about whether sexual harassment occurred out of a public courtroom and into a non-judicial and possibly secret proceeding. The courts, and the Congress, have tended to supportive of arbitration as an alternative to courtroom litigation. (Of course, potential plaintiffs should determine whether in a particular situation there are ways to avoid arbitration.)
-- Out of court settlements of sexual harassment claims are commonplace, and facilitate keeping secret the occurrence of sexual harassment. Settlement agreements may resolve sexual harassment claims in return for substantial amounts of money. But the agreements are often secret and contain provisions that would impose a severe money penalty on complainants who break secrecy and speak publicly about the sexual harassment.
-- The confidentiality provisions of sexual harassment out of court settlements deserve special mention. It does not appear that sexual harassment settlements with confidentiality provisions are currently considered to be against public policy, or unethical for lawyers to facilitate. But perhaps that permissiveness is wrong, since current news about Harvey Weinstein and others suggest that secret settlements facilitate continuation of offensive behavior without punishment.
Comment posted by Don Allen Resnikoff, who is individually responsible for its content.
Here are a few reasons why the answer might be yes, the law and legal process can conspire to facilitate or even encourage sexual harassment in the corporate workplace.
-- employment contracts may contain arbitration provisions. Arbitration proceedings can move the dispute about whether sexual harassment occurred out of a public courtroom and into a non-judicial and possibly secret proceeding. The courts, and the Congress, have tended to supportive of arbitration as an alternative to courtroom litigation. (Of course, potential plaintiffs should determine whether in a particular situation there are ways to avoid arbitration.)
-- Out of court settlements of sexual harassment claims are commonplace, and facilitate keeping secret the occurrence of sexual harassment. Settlement agreements may resolve sexual harassment claims in return for substantial amounts of money. But the agreements are often secret and contain provisions that would impose a severe money penalty on complainants who break secrecy and speak publicly about the sexual harassment.
-- The confidentiality provisions of sexual harassment out of court settlements deserve special mention. It does not appear that sexual harassment settlements with confidentiality provisions are currently considered to be against public policy, or unethical for lawyers to facilitate. But perhaps that permissiveness is wrong, since current news about Harvey Weinstein and others suggest that secret settlements facilitate continuation of offensive behavior without punishment.
Comment posted by Don Allen Resnikoff, who is individually responsible for its content.
NYT: Local governments lobby legislators on plastic for water infrastructure
The American Chemistry Council, a deep-pocketed trade association that lobbies for the plastics industry, has backed bills in at least five states — Michigan, Ohio, South Carolina, Indiana and Arkansas — that would require local governments to open up bids for municipal water projects to all suitable materials, including plastic. A council spokesman, Scott Openshaw, criticized the current bidding process in many localities as “virtual monopolies which waste taxpayer money, drive up costs and ultimately make it harder for states and municipalities to complete critical water infrastructure upgrades.”
Opponents of the industry-backed bills, including many municipal engineers, say they are a thinly veiled effort by the plastics industry to muscle aside traditional pipe suppliers.
“It’s simply catering to an industry that is trying to use legislation to gain market share,” Stephen Pangori of the American Council of Engineering Companies testified this year before a Michigan Senate committee.
To more directly reach towns and counties across the country, the plastics industry is also leaning on the American City County Exchange, a new group that gives corporations extraordinary capacity to influence public policy at the city and county levels. The group operates under the auspices of the American Legislative Exchange Council, a wider effort funded by the petrochemicals billionaires Charles G. and David H. Koch that has drawn scrutiny for helping corporations and local politicians write legislation behind closed doors.
Full article: https://www.nytimes.com/2017/11/10/climate/water-pipes-plastic-lead.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=17&pgtype=sectionfront&_r=0
The Century Foundation analyzes government data on loan fraud by colleges
- Out of the total of 98,868 complaints reviewed by TCF, for-profit colleges generated more than 98.6 percent of them (97,506 complaints). Of these complaints nonprofit colleges generated 0.79 percent (789 complaints) and public colleges generated 0.57 percent (559 complaints).
- Approximately three-fourths of all claims (76.2 percent) were against schools owned by one for-profit entity, the now-closed Corinthian Colleges (75,343 claims). Removing Corinthian from the analysis, the vast majority of claims, over 94 percent, were still against for-profit colleges (22,160 of the 23,525 non-Corinthian claims).
- Claims are concentrated around fifty-two entities—forty-seven for-profit companies and five nonprofit institutions—that have each generated twenty or more borrower defense claims. Of these five nonprofits, three converted from for-profit ownership.
- The backlog of fraud complaints—currently numbering 87,000 not yet reviewed—is increasing, with the number of new claims submitted per month averaging approximately 8,000 since mid-August.
From PCJF: It has been established that the GSA project manager communicated with the Trump Organization in discussions over the Trump Hotel development, using a private non-governmental email account to maintain those government records.
While the manager also possessed a GSA account, substantial communication, including directly with the Trump Organization, appears to have taken place solely using the private email and without cc’ing to the GSA email network.
“Transparency, and the law, demand the release of these records to the public,” stated Mara Verheyden-Hilliard, Executive Director of the PCJF.
Details of the PCJF litigation, other details, and a request for financial backing, are at http://www.justiceonline.org/news
While the manager also possessed a GSA account, substantial communication, including directly with the Trump Organization, appears to have taken place solely using the private email and without cc’ing to the GSA email network.
“Transparency, and the law, demand the release of these records to the public,” stated Mara Verheyden-Hilliard, Executive Director of the PCJF.
Details of the PCJF litigation, other details, and a request for financial backing, are at http://www.justiceonline.org/news
About being a lawyer, from the New Yorker: The contract between a private security firm and one of Harvey Weinstein’s lawyers, David Boies
On July 11, 2017, Harvey Weinstein’s attorney David Boies, of the law firm Boies Schiller Flexner, LLP, signed a contract with Black Cube, an Israeli private-intelligence agency operated by former members of Israel’s Mossad intelligence service. The contract describes Black Cube’s tactics and goals in its work for the client, identified in other documents as Weinstein. The firm’s first objective, as stated in the contract, was to uncover information that would help stop the publication of a new, negative newspaper story, which sources said was a New York Times story focussed on sexual-misconduct allegations against Weinstein. Its second objective was to obtain a manuscript of a book that sources identified as the memoir of the actress Rose McGowan, who had accused Weinstein of rape.
The contract with Black Cube is here: https://www.newyorker.com/sections/news/read-the-contract-between-a-private-security-firm-and-one-of-harvey-weinsteins-lawyers
On July 11, 2017, Harvey Weinstein’s attorney David Boies, of the law firm Boies Schiller Flexner, LLP, signed a contract with Black Cube, an Israeli private-intelligence agency operated by former members of Israel’s Mossad intelligence service. The contract describes Black Cube’s tactics and goals in its work for the client, identified in other documents as Weinstein. The firm’s first objective, as stated in the contract, was to uncover information that would help stop the publication of a new, negative newspaper story, which sources said was a New York Times story focussed on sexual-misconduct allegations against Weinstein. Its second objective was to obtain a manuscript of a book that sources identified as the memoir of the actress Rose McGowan, who had accused Weinstein of rape.
The contract with Black Cube is here: https://www.newyorker.com/sections/news/read-the-contract-between-a-private-security-firm-and-one-of-harvey-weinsteins-lawyers
AAI Weighs In On State Occupational Licensing Reform Debate
The American Antitrust Institute (AAI) has issued a new white paper discussing the role of federal antitrust law in an ongoing reform movement aimed at reducing burdens created by state occupational licensing laws. The white paper is titled State Occupational Licensing Reform and the Federal Antitrust Laws: Making Sense of the Post-Dental Examiners Landscape. [ http://www.antitrustinstitute.org/sites/default/files/Occupational%20Licensing%20White%20Paper.11.6.17.pdf ]
The American Antitrust Institute (AAI) has issued a new white paper discussing the role of federal antitrust law in an ongoing reform movement aimed at reducing burdens created by state occupational licensing laws. The white paper is titled State Occupational Licensing Reform and the Federal Antitrust Laws: Making Sense of the Post-Dental Examiners Landscape. [ http://www.antitrustinstitute.org/sites/default/files/Occupational%20Licensing%20White%20Paper.11.6.17.pdf ]
Appellate Court upholds standing of DC AG to sue ExxonMobil for violating statute prohibiting exclusive dealing that facilitates ExxonMobil price control
Opinion at: https://www.scribd.com/document/363361380/DC-AG-ExxonMobil-Appellate-Decision-14-CV-633-1
DAR comment:
The Washington Post reported some time ago that in 2013, then District Attorney General Irvin B. Nathan sued ExxonMobil, Capitol Petroleum and others for allegedly manipulating prices at the pumps in the District. Exxon’s oil-refining subsidiaries had struck exclusive supply deals with about 60 percent of the city’s gas stations, including almost all of the Exxon, Shell and Valero stations, effectively shutting out competition and allowing them to set retail prices as high as they’d like, the suit argued. The D.C. Superior Court granted ExxonMobil’s motion to dismiss the case in 2014. (That is the dismissal that the recent Court of Appeals decision reverses.) ExxonMobil argued that under the District’s Retail Service Station Act, the attorney general had “neither expressed nor implied statutory authority” to investigate gas prices.
The Washington Post reporting oversimplified the litigation story to some extent, but catches an important point about the litigation: the DC AG's Complaint alleges that ExxonMobil conduct causes serious harm to DC consumers.
As Tracy Rezvani and I wrote in an earlier article, The D.C. Attorney General alleged that high local D.C. gasoline prices are caused by anticompetitive exclusive dealing restrictions imposed on retailers by dominant distributors. In recent years, the District of Columbia has had a reputation for high retail gasoline prices. Experts like John Townsend of the AAA and antitrust expert David Balto have publicly pointed out that a duopoly of local gasoline distributors has used exclusive dealing contracts with gasoline retailers that keep prices artificially high. Townsend has said of the larger distributor in the duopoly, Eyob Mamo, that “He is overcharging gas station owners.”
The reason that dominant distributors can successfully use exclusive dealing requirements to keep prices high is that the exclusivity requirement locks in the retailer and prevents the retailer from shopping for a lower wholesale price. Retailers forced to pay high wholesale prices have little choice but to pass on the high price to consumers. If consumers in particular neighborhoods have limited ability to avoid the locked-in retailers, then those consumers are likely to share the experience of high prices being passed on to them.
The legal complaint filed by the District of Columbia’s Attorney General Irving Nathan in the DC Superior Court against ExxonMobil and local gasoline distributors (often called “jobbers”) is intended to blocked the anticompetitive exclusive dealing contracts by distributors, and to reduce gasoline prices in the District of Columbia.
The Attorney General’s Complaint charges violation of a local statute with limited proof requirements, the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”), which prohibits distributors from enforcing exclusive dealing contracts with gasoline retailers. The action was dismissed by Superior Court Judge Craig Iscoe on May 6, 2014. You can see the opinion at http://www.scribd.com/doc/222728637./DC-Exxon-5-6-2014-Order-Granting-MTDs-1. Judge Iscoe did not dismiss the AG's action on the merits. Instead, Judge Iscoe ruled that the Attorney General lacked standing under the relevant Subchapter of the RSSA. Judge Iscoe wrote: “Until such time as the [DC] Council changes its position, the Court finds that the Attorney General has no standing to bring actions under that Subchapter of III of the RSSA, more specifically, D.C. Code § 36-303.01(a)(6) and (a)(11)." The judge concluded that the RSSA statute permits only actions by particular affected dealers.
Judge Iscoe’s opinion includes a footnote telling ExxonMobil that it could indeed be held liable under the RSSA for the alleged conduct, but for the standing issue. Consequently, there is good reason to believe that if Judge Iscoe had reached the antitrust merits, the District would have prevailed, and a trial on the merits would have been allowed.
The appellate court has now overruled Judge Iscoe and decided that the District may go forward and litigate its Complaint. We believe that trial on the merits will serve the interests of the consuming public as well as gasoline retailers. Various publicly available court filings and other documents report in some detail the facts that support an enforcement action. Former D.C. Attorney General Irv Nathan explained the local gasoline market’s dysfunction in a letter published by the Washington Post on September 6, 2013. His letter (which is available at http://www.washingtonpost.com/opinions/exclusive-supply-agreements-for-fuel-drive-prices-in-the-district/2013/09/06/7f164ce2-1591-11e3-961c-f22d3aaf19ab_story.html) rebutted a Washington Post editorial criticizing the Attorney General's suit against ExxonMobil and local distributors. (The Post reiterated its criticism at http://www.washingtonpost.com/opinions/the-districts-crusade-against-gas-station-magnate-joe-mamo-is-running-on-fumes/2014/05/23/962f6b6a-e297-11e3-810f-764fe508b82d_story.html.)
The facts outlined in the the Nathan letter are straightforward. Vertical exclusive dealing restraints against gasoline retailers are imposed by dominant wholesalers in the District of Columbia and are harmful because they raise wholesale and retail gasoline prices: "Vertically imposed supply restrictions, while perhaps 'benign' in a truly competitive market, have great potential to harm competition and raise consumer prices in one dominated by a single large supplier. The unusually high prices at many D.C. pumps should surprise no one. The District’s lawsuit challenging exclusive supply agreements is brought against a single, large gasoline wholesaler that supplies about 60 percent of the city’s stations, including almost all of the Exxon, Shell and Valero brand stations."
Mr. Nathan’s points sound in traditional antitrust: exclusive dealing conduct by dominant distributors, supported by major oil companies, raises prices to station owners and consumers.
The recent Court of Appeals decision allowing the District's case to go forward does not rely on factual allegations of harm to DC citizens in the AG's Complaint. The appellate decision explains:
"The District‘s complaint alleges on its face that appellees have in place marketing agreements that violate District of Columbia law, specifically, prohibitions set out in the RSSA. Those allegations by the District were sufficient to satisfy the injury-in-fact element of Article III-type standing on the District."
The Court of Appeals found it unnecessary to reach factual issues of harm associated with the District's "quasi-sovereign-interest" theory of standing -- the idea that standing turns on harm to DC citizens. However, as the Court of Appeals pointed out in a footnote, "Whether appellees‘ marketing agreements actually cause the type of concrete injury the trial court believed must be alleged to establish standing will be
a relevant consideration if the District succeeds on its claim that the agreements violate § 36-303.01 (a) [of the RSSA statute] and the court goes on to consider whether to issue a permanent injunction enjoining implementation of the offending terms of the agreements."
I congratulate the DC AG's office on winning the ability to go forward with litigation of its Complaint.
Note: The opinions expressed are the personal responsibility of Don Allen Resnikoff
Illinois AG press release:
ATTORNEY GENERAL MADIGAN OPPOSES TRIBUNE-SINCLAIR MEDIA MERGER
Madigan Leads Attorneys General in Urging FCC to Reject Massive Merger that Will Decrease Consumer Choices and Diverse Media Voices
Chicago — Attorney General Lisa Madigan today led a multistate group of attorneys general in filing comments with the Federal Communications Commission (FCC) opposing the proposed merger between the Tribune Media Company (Tribune) and Sinclair Broadcast Group Inc. (Sinclair). Madigan and the other attorneys general argue the potential merger fails to further the public interest by allowing for increased consolidation that will decrease consumer choices and a diversity of voices in the media marketplace.
The Tribune/Sinclair merger would create the largest television broadcast company in the country. The merged company would own or operate over 200 stations nationwide with the ability to reach 72 percent of U.S. television households, far above the statutory 39 percent limit.
"To ensure people have access to a diverse landscape of perspectives, services and stations, the FCC should reject the proposed Tribune-Sinclair media merger," Madigan said. "People throughout Illinois depend on their local broadcast stations for diverse viewpoints and this merger threatens that long-held practice."
In addition, Madigan and the other attorneys general point out that the proposed merger inappropriately relies on an outdated method known as the UHF Discount Rule for calculating national audience reach that does not reflect the reality of today's technology, understating the audience reach of a UHF station by 50 percent.
The attorneys general argue that, at a minimum, the FCC should delay consideration of the merger until the D.C. Circuit Court completes its rule of the UHF Discount, which is underway.
Joining Madigan in filing today's comments are the attorneys general of Maryland, Massachusetts and Rhode Island.
A copy of the comments can be found here. http://www.illinoisattorneygeneral.gov/pressroom/2017_11/FCC_MB_DocketNo17-179CommentofStateAttorneysGeneral.pdf
ATTORNEY GENERAL MADIGAN OPPOSES TRIBUNE-SINCLAIR MEDIA MERGER
Madigan Leads Attorneys General in Urging FCC to Reject Massive Merger that Will Decrease Consumer Choices and Diverse Media Voices
Chicago — Attorney General Lisa Madigan today led a multistate group of attorneys general in filing comments with the Federal Communications Commission (FCC) opposing the proposed merger between the Tribune Media Company (Tribune) and Sinclair Broadcast Group Inc. (Sinclair). Madigan and the other attorneys general argue the potential merger fails to further the public interest by allowing for increased consolidation that will decrease consumer choices and a diversity of voices in the media marketplace.
The Tribune/Sinclair merger would create the largest television broadcast company in the country. The merged company would own or operate over 200 stations nationwide with the ability to reach 72 percent of U.S. television households, far above the statutory 39 percent limit.
"To ensure people have access to a diverse landscape of perspectives, services and stations, the FCC should reject the proposed Tribune-Sinclair media merger," Madigan said. "People throughout Illinois depend on their local broadcast stations for diverse viewpoints and this merger threatens that long-held practice."
In addition, Madigan and the other attorneys general point out that the proposed merger inappropriately relies on an outdated method known as the UHF Discount Rule for calculating national audience reach that does not reflect the reality of today's technology, understating the audience reach of a UHF station by 50 percent.
The attorneys general argue that, at a minimum, the FCC should delay consideration of the merger until the D.C. Circuit Court completes its rule of the UHF Discount, which is underway.
Joining Madigan in filing today's comments are the attorneys general of Maryland, Massachusetts and Rhode Island.
A copy of the comments can be found here. http://www.illinoisattorneygeneral.gov/pressroom/2017_11/FCC_MB_DocketNo17-179CommentofStateAttorneysGeneral.pdf
State AGs multistate settlement of the LIBOR investigation of Deutschebank
The California AG's press release is at https://oag.ca.gov/news/press-releases/attorney-general-becerra-announces-220-million-multistate-settlement-deutsche
From the press release:
California Attorney General Xavier Becerra today announced a $220 million multistate settlement with Deutsche Bank for fraudulent conduct involving the manipulation of the London Interbank Offered Rate (LIBOR). LIBOR is the rate at which banks lend money to one another. It is a key financial tool that determines interest rates for many financing mechanisms, including government and corporate bonds. Deutsche Bank colluded with other banks to skew borrowing rates in its favor, illegally profiting on contracts with municipalities linked to LIBOR. This unlawful strategy resulted in a sharp increase in profits for Deutsche Bank at the expense of government entities and non-profit organizations in California and throughout the country. Through the settlement announced today, California governmental and non-profit entities that invested with Deutsche Bank will receive approximately $29 million.
“During the financial crisis, Deutsche Bank was consumed with increasing its profits at the expense of Californians,” said Attorney General Becerra. “They manipulated interest rates hoping to turn a quick profit. In the process, they left government entities and non-profits in California hanging out to dry. This conduct is unacceptable and it is illegal. Banks and financial institutions do not get to play fast and loose with the law.”
The investigation was led by the attorneys general of California and New York and conducted by a working group of 43 other attorneys general: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
The settlement agreement is at https://oag.ca.gov/system/files/attachments/press_releases/Settlement.pdf The key factual allegations of the plaintiff states are at are at paragraphs 14 to 69.
The California AG's press release is at https://oag.ca.gov/news/press-releases/attorney-general-becerra-announces-220-million-multistate-settlement-deutsche
From the press release:
California Attorney General Xavier Becerra today announced a $220 million multistate settlement with Deutsche Bank for fraudulent conduct involving the manipulation of the London Interbank Offered Rate (LIBOR). LIBOR is the rate at which banks lend money to one another. It is a key financial tool that determines interest rates for many financing mechanisms, including government and corporate bonds. Deutsche Bank colluded with other banks to skew borrowing rates in its favor, illegally profiting on contracts with municipalities linked to LIBOR. This unlawful strategy resulted in a sharp increase in profits for Deutsche Bank at the expense of government entities and non-profit organizations in California and throughout the country. Through the settlement announced today, California governmental and non-profit entities that invested with Deutsche Bank will receive approximately $29 million.
“During the financial crisis, Deutsche Bank was consumed with increasing its profits at the expense of Californians,” said Attorney General Becerra. “They manipulated interest rates hoping to turn a quick profit. In the process, they left government entities and non-profits in California hanging out to dry. This conduct is unacceptable and it is illegal. Banks and financial institutions do not get to play fast and loose with the law.”
The investigation was led by the attorneys general of California and New York and conducted by a working group of 43 other attorneys general: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
The settlement agreement is at https://oag.ca.gov/system/files/attachments/press_releases/Settlement.pdf The key factual allegations of the plaintiff states are at are at paragraphs 14 to 69.
The FEMA statement on the no-bid Whitefish contract for Puerto Rico
Facing withering criticism from members of Congress and the Federal Emergency Management Agency, the governor of Puerto Rico moved on Sunday to cancel a $300 million contract awarded to a small Montana company to rebuild part of the island’s battered power grid.
The 10-27 FEMA statement on the contract is here: https://www.fema.gov/news-release/2017/10/27/updated-fema-statement-puerto-rico-electric-power-authoritys-contract
Here is an excerpt from the FEMA statement:
FEMA has not provided any reimbursement to Puerto Rico to date for the PREPA contract with Whitefish Energy. Regardless, FEMA will verify that the applicant (in this case PREPA) has, in fact, followed applicable regulations to ensure that federal money is properly spent.
Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable. FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable.
See also https://www.nytimes.com/2017/10/29/us/whitefish-cancel-puerto-rico.html?_r=0
Facing withering criticism from members of Congress and the Federal Emergency Management Agency, the governor of Puerto Rico moved on Sunday to cancel a $300 million contract awarded to a small Montana company to rebuild part of the island’s battered power grid.
The 10-27 FEMA statement on the contract is here: https://www.fema.gov/news-release/2017/10/27/updated-fema-statement-puerto-rico-electric-power-authoritys-contract
Here is an excerpt from the FEMA statement:
FEMA has not provided any reimbursement to Puerto Rico to date for the PREPA contract with Whitefish Energy. Regardless, FEMA will verify that the applicant (in this case PREPA) has, in fact, followed applicable regulations to ensure that federal money is properly spent.
Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable. FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable.
See also https://www.nytimes.com/2017/10/29/us/whitefish-cancel-puerto-rico.html?_r=0
The NYT reports the Senate shoe dropping on the CFPB
Senate Republicans voted on Tuesday to strike down a sweeping new rule that would have allowed millions of Americans to band together in class-action lawsuits against financial institutions.
The overturning of the rule, with Vice President Mike Pence breaking a 50-to-50 tie, will further loosen regulation of Wall Street as the Trump administration and Republicans move to roll back Obama-era policies enacted in the wake of the 2008 economic crisis. By defeating the rule, Republicans are dismantling a major effort of the Consumer Financial Protection Bureau, the watchdog created by Congress in the aftermath of the mortgage mess.
The rule, five years in the making, would have dealt a serious blow to financial firms, potentially exposing them to a flood of costly lawsuits over questionable business practices.
For decades, credit card companies and banks have inserted arbitration clauses into the fine print of financial contracts to circumvent the courts and bar people from pooling their resources in class-action lawsuits. By forcing people into private arbitration, the clauses effectively take away one of the few tools that individuals have to fight predatory and deceptive business practices. Arbitration clauses have derailed claims of financial gouging, discrimination in car sales and unfair fees.
The new rule written by the consumer bureau, which was set to take effect in 2019, would have restored the right of individuals to sue in court. It was part of a spate of actions by the bureau, which has cracked down on debt collectors, the student loan industry and payday lenders.
The arbitration rule has sparked a political battle that has taken on broader significance in the new administration. Republicans latched on to the rule as a way to cast the agency as a player in the regulatory regime that was impeding business and the economy. Shortly after the rule was adopted in July, the U.S. Chamber of Commerce pointed to it as a “prime example of an agency gone rogue.”
In recent months, financial firms and their Republican allies in Congress mobilized to defeat the rule. Some credit unions and community banks also weighed in, lodging calls to lawmakers in their home states.
Under the Congressional Review Act, Republicans had roughly 60 legislative days to overturn the rule. The House passed its own resolution in July.
Wrangling the votes in the Senate was trickier. In the weeks leading up to the vote, Senator Lindsey Graham, Republican of South Carolina, who sponsored legislation to protect military members from being forced into arbitration, said he would not support a repeal of the rule.
Looking to head off a repeal, Democrats and consumer advocates branded the effort as a gift to financial institutions like Wells Fargo and Equifax. Both companies, in the face of corporate scandals, used arbitration clauses to try to quash legal challenges from customers.
The rule, Democrats argued, was precisely what was needed to protect the rights of vulnerable borrowers. Regulators and judges, including some appointed by Republican presidents, have also backed the position.
Class actions, they argue, are not just about the size of the payouts, which are typically spread out among a large group of people. They are also about pushing companies to change their practices. Large banks, for example, had to pay more than $1 billion to settle class actions beginning in 2009 that accused them of tweaking checking account policies to increase the amount of overdraft fees that they could charge customers.
“Tonight’s vote is a giant setback for every consumer in this country,” Richard Cordray, the director of the consumer bureau, said in a statement. “As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.”
https://www.nytimes.com/2017/10/24/business/senate-vote-wall-street-regulation.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=7&pgtype=sectionfront#story-continues-2
Senate Republicans voted on Tuesday to strike down a sweeping new rule that would have allowed millions of Americans to band together in class-action lawsuits against financial institutions.
The overturning of the rule, with Vice President Mike Pence breaking a 50-to-50 tie, will further loosen regulation of Wall Street as the Trump administration and Republicans move to roll back Obama-era policies enacted in the wake of the 2008 economic crisis. By defeating the rule, Republicans are dismantling a major effort of the Consumer Financial Protection Bureau, the watchdog created by Congress in the aftermath of the mortgage mess.
The rule, five years in the making, would have dealt a serious blow to financial firms, potentially exposing them to a flood of costly lawsuits over questionable business practices.
For decades, credit card companies and banks have inserted arbitration clauses into the fine print of financial contracts to circumvent the courts and bar people from pooling their resources in class-action lawsuits. By forcing people into private arbitration, the clauses effectively take away one of the few tools that individuals have to fight predatory and deceptive business practices. Arbitration clauses have derailed claims of financial gouging, discrimination in car sales and unfair fees.
The new rule written by the consumer bureau, which was set to take effect in 2019, would have restored the right of individuals to sue in court. It was part of a spate of actions by the bureau, which has cracked down on debt collectors, the student loan industry and payday lenders.
The arbitration rule has sparked a political battle that has taken on broader significance in the new administration. Republicans latched on to the rule as a way to cast the agency as a player in the regulatory regime that was impeding business and the economy. Shortly after the rule was adopted in July, the U.S. Chamber of Commerce pointed to it as a “prime example of an agency gone rogue.”
In recent months, financial firms and their Republican allies in Congress mobilized to defeat the rule. Some credit unions and community banks also weighed in, lodging calls to lawmakers in their home states.
Under the Congressional Review Act, Republicans had roughly 60 legislative days to overturn the rule. The House passed its own resolution in July.
Wrangling the votes in the Senate was trickier. In the weeks leading up to the vote, Senator Lindsey Graham, Republican of South Carolina, who sponsored legislation to protect military members from being forced into arbitration, said he would not support a repeal of the rule.
Looking to head off a repeal, Democrats and consumer advocates branded the effort as a gift to financial institutions like Wells Fargo and Equifax. Both companies, in the face of corporate scandals, used arbitration clauses to try to quash legal challenges from customers.
The rule, Democrats argued, was precisely what was needed to protect the rights of vulnerable borrowers. Regulators and judges, including some appointed by Republican presidents, have also backed the position.
Class actions, they argue, are not just about the size of the payouts, which are typically spread out among a large group of people. They are also about pushing companies to change their practices. Large banks, for example, had to pay more than $1 billion to settle class actions beginning in 2009 that accused them of tweaking checking account policies to increase the amount of overdraft fees that they could charge customers.
“Tonight’s vote is a giant setback for every consumer in this country,” Richard Cordray, the director of the consumer bureau, said in a statement. “As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.”
https://www.nytimes.com/2017/10/24/business/senate-vote-wall-street-regulation.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=7&pgtype=sectionfront#story-continues-2
The Consumerist on House anti-CFPB vote:
House Votes To Strip Bank & Credit Card Customers Of Constitutional Right To A Day In CourtIMAGE COURTESY OF (J.G. PARK)7.25.175:09 PM EDTBy Chris Morran@themorrancave
GET OUT OF JAIL FREE FORCED ARBITRATION CFPB MANDATORY BINDING ARBITRATIONLAWSUITS CONSUMER FINANCIAL PRODUCTION BUREAUCONGRESSIONAL REVIEW ACT
Because the Sixth and Seventh Amendments of the U.S. Constitution are apparently less important than making sure that banks, credit card companies, student loan companies, and other financial services be allowed to behave badly with impunity, the House of Representatives has voted to overturn a new federal regulation that would have helped American consumers hold these companies accountable through the legal system.
In a largely party-line 231-190 vote this afternoon, the House passed a Congressional Review Act resolution that, if also adopted by the Senate and signed by the President, would overturn recently finalized rules from the Consumer Financial Protection Bureau.
Those rules seek to curb the use of “forced arbitration” in many consumers’ financial contracts. These arbitration clauses dictate that any legal dispute between the customer and the bank must be resolved outside of the legal system. Instead, these matters — no matter the scope of the allegation — must go through a closed-door arbitration process, where the results are often confidential, so there is no public record of the alleged wrongdoing.
Additionally, most arbitration clauses include a ban on class actions — even through arbitration. So a bank could, for example, open millions of fake, unauthorized accounts in customers’ names, but then try to block all of those customers from moving forward as a plaintiff class. Rather, each of the millions of wronged customers is required to go through arbitration on their own. As a result, very, very few people ever enter into the arbitration process.
READ MORE: CFPB’s Finalized Arbitration Rule Takes Away Banks’ ‘Get Out Of Jail Free Card’
The Consumer Financial Protection Bureau’s new rule doesn’t bar affected companies from using arbitration clauses, but it severely limits their ability to use class action bans.
Last week, a group of heavily bank-backed lawmakers in both the House and Senate introduced Review Act resolutions to roll back the rule.
READ MORE: Lawmakers Who Want To Hand ‘Get Out Of Jail Free’ Card To Banks Made Millions From Financial Sector Last Year
During debate in advance of today’s vote, GOP representatives repeatedly attempted to claim that arbitration is superior to class actions because the typical payout of an arbitration dispute is significantly higher (around $5,000) than in a class action (around $32).
Rep. Dave Trott of Michigan belittled class actions, pointing to a $3.99 settlement he recently received. What the congressman didn’t mention is that he was likely one of thousands — potentially millions — of people who received that $3.99 settlement. To him, it was the price of a latte, but to the company that had to pay that settlement, it was a large financial spanking.
Democratic representatives responded to this repeated criticism by noting that arbitration cases tend to involve small numbers of customers with high-dollar disputes, whereas class actions often involve large numbers of wronged customers with small-dollar issues.
Rep. David Cicilline of Rhode Island mocked the GOP contention that forced arbitration is pro-consumer.
“If these provisions were so beneficial, why do you have to sneak them into the contracts?,” asked Cicilline.
Maryland Rep. John Sarbanes questioned the GOP’s reason for trying to undo these protections.
“Who back home is asking for this?” asked Sarbanes. “Who is coming to the town hall and asking for you to repeal this?”
In the end, only one Republican — Walter Jones of North Carolina — voted against repealing the CFPB rule. No Democrats strayed across the aisle to vote in favor of repeal.
What Choice?
In his closing remarks before the vote, Rep. Jeb Hensarling (TX) — whose campaign received nearly $2 million from financial services companies last year — made the dubious claim that arbitration clauses provide consumers with a “choice” between arbitration and the court system.
The problem is, that this is not at all true in practice. Arbitration clauses generally say that either party in the contract can elect to enter into arbitration, and that the other party must abide by that decision. So yes, if a customer chooses arbitration, they get arbitration, but if a company wants arbitration, the customer has no “choice” to speak of. While this might seem harsh, the Supreme Court has repeatedly upheld that aspect of arbitration clauses.
What Now?
Even though these resolutions to overturn the CFPB rules face huge opposition from consumer advocates, there was little hope that the Republican-dominated House would vote against passing the bill. The Senate resolution may face a tougher fight, as the GOP can only afford to lose two votes to the opposition.
“House Republicans have turned their backs on their constituents for Wall Street’s benefit,” said Christine Hines, legislative director at the National Association of Consumer Advocates. “Instead of supporting a reasonable rule that helps consumers get back their day in court, the U.S. House sided with big banks, which for too long have used their fine-print contracts to take Americans’ rights away.”
“By voting to overturn the CFPB’s arbitration rule, Republicans in Congress are siding with predatory banks, payday lenders, credit card companies and the financial industry against Main Street Americans, and are choosing to be on the wrong side of history,” adds Lisa Gilbert, Vice President of Legislative Affairs, Public Citizen. “Big banks, the financial industry and their allies in Congress are trying to overturn the CFPB’s rule because it will deprive them of a means to rip off consumers.”
“Consumers shouldn’t be forced to give up their legal rights when they sign up for a loan or open a bank account,” says our colleague George Slover, senior policy counsel for Consumers Union. “The CFPB’s rule ensures they can join with others and have their day in court if they’ve been harmed by their bank or credit card company. Repealing the forced arbitration rule will make it harder for consumers to hold financial firms accountable for breaking the law or treating their customers unfairly.”
Article is at https://consumerist.com/2017/07/25/house-votes-to-strip-bank-credit-card-customers-of-constitutional-right-to-a-day-in-court/
House Votes To Strip Bank & Credit Card Customers Of Constitutional Right To A Day In CourtIMAGE COURTESY OF (J.G. PARK)7.25.175:09 PM EDTBy Chris Morran@themorrancave
GET OUT OF JAIL FREE FORCED ARBITRATION CFPB MANDATORY BINDING ARBITRATIONLAWSUITS CONSUMER FINANCIAL PRODUCTION BUREAUCONGRESSIONAL REVIEW ACT
Because the Sixth and Seventh Amendments of the U.S. Constitution are apparently less important than making sure that banks, credit card companies, student loan companies, and other financial services be allowed to behave badly with impunity, the House of Representatives has voted to overturn a new federal regulation that would have helped American consumers hold these companies accountable through the legal system.
In a largely party-line 231-190 vote this afternoon, the House passed a Congressional Review Act resolution that, if also adopted by the Senate and signed by the President, would overturn recently finalized rules from the Consumer Financial Protection Bureau.
Those rules seek to curb the use of “forced arbitration” in many consumers’ financial contracts. These arbitration clauses dictate that any legal dispute between the customer and the bank must be resolved outside of the legal system. Instead, these matters — no matter the scope of the allegation — must go through a closed-door arbitration process, where the results are often confidential, so there is no public record of the alleged wrongdoing.
Additionally, most arbitration clauses include a ban on class actions — even through arbitration. So a bank could, for example, open millions of fake, unauthorized accounts in customers’ names, but then try to block all of those customers from moving forward as a plaintiff class. Rather, each of the millions of wronged customers is required to go through arbitration on their own. As a result, very, very few people ever enter into the arbitration process.
READ MORE: CFPB’s Finalized Arbitration Rule Takes Away Banks’ ‘Get Out Of Jail Free Card’
The Consumer Financial Protection Bureau’s new rule doesn’t bar affected companies from using arbitration clauses, but it severely limits their ability to use class action bans.
Last week, a group of heavily bank-backed lawmakers in both the House and Senate introduced Review Act resolutions to roll back the rule.
READ MORE: Lawmakers Who Want To Hand ‘Get Out Of Jail Free’ Card To Banks Made Millions From Financial Sector Last Year
During debate in advance of today’s vote, GOP representatives repeatedly attempted to claim that arbitration is superior to class actions because the typical payout of an arbitration dispute is significantly higher (around $5,000) than in a class action (around $32).
Rep. Dave Trott of Michigan belittled class actions, pointing to a $3.99 settlement he recently received. What the congressman didn’t mention is that he was likely one of thousands — potentially millions — of people who received that $3.99 settlement. To him, it was the price of a latte, but to the company that had to pay that settlement, it was a large financial spanking.
Democratic representatives responded to this repeated criticism by noting that arbitration cases tend to involve small numbers of customers with high-dollar disputes, whereas class actions often involve large numbers of wronged customers with small-dollar issues.
Rep. David Cicilline of Rhode Island mocked the GOP contention that forced arbitration is pro-consumer.
“If these provisions were so beneficial, why do you have to sneak them into the contracts?,” asked Cicilline.
Maryland Rep. John Sarbanes questioned the GOP’s reason for trying to undo these protections.
“Who back home is asking for this?” asked Sarbanes. “Who is coming to the town hall and asking for you to repeal this?”
In the end, only one Republican — Walter Jones of North Carolina — voted against repealing the CFPB rule. No Democrats strayed across the aisle to vote in favor of repeal.
What Choice?
In his closing remarks before the vote, Rep. Jeb Hensarling (TX) — whose campaign received nearly $2 million from financial services companies last year — made the dubious claim that arbitration clauses provide consumers with a “choice” between arbitration and the court system.
The problem is, that this is not at all true in practice. Arbitration clauses generally say that either party in the contract can elect to enter into arbitration, and that the other party must abide by that decision. So yes, if a customer chooses arbitration, they get arbitration, but if a company wants arbitration, the customer has no “choice” to speak of. While this might seem harsh, the Supreme Court has repeatedly upheld that aspect of arbitration clauses.
What Now?
Even though these resolutions to overturn the CFPB rules face huge opposition from consumer advocates, there was little hope that the Republican-dominated House would vote against passing the bill. The Senate resolution may face a tougher fight, as the GOP can only afford to lose two votes to the opposition.
“House Republicans have turned their backs on their constituents for Wall Street’s benefit,” said Christine Hines, legislative director at the National Association of Consumer Advocates. “Instead of supporting a reasonable rule that helps consumers get back their day in court, the U.S. House sided with big banks, which for too long have used their fine-print contracts to take Americans’ rights away.”
“By voting to overturn the CFPB’s arbitration rule, Republicans in Congress are siding with predatory banks, payday lenders, credit card companies and the financial industry against Main Street Americans, and are choosing to be on the wrong side of history,” adds Lisa Gilbert, Vice President of Legislative Affairs, Public Citizen. “Big banks, the financial industry and their allies in Congress are trying to overturn the CFPB’s rule because it will deprive them of a means to rip off consumers.”
“Consumers shouldn’t be forced to give up their legal rights when they sign up for a loan or open a bank account,” says our colleague George Slover, senior policy counsel for Consumers Union. “The CFPB’s rule ensures they can join with others and have their day in court if they’ve been harmed by their bank or credit card company. Repealing the forced arbitration rule will make it harder for consumers to hold financial firms accountable for breaking the law or treating their customers unfairly.”
Article is at https://consumerist.com/2017/07/25/house-votes-to-strip-bank-credit-card-customers-of-constitutional-right-to-a-day-in-court/
Courts have been allowing States to provide special support to nuclear power suppliers like Exelon
Several months ago a federal judge ruled that New York's plan to subsidize nuclear power plants “is constitutional” and “of legitimate state concern.”
The decision helped nuclear power provider Exelon, which has been struggling financially. Nuclear plants are notoriously expensive to run.
The ruling was one of several federal court rulings supporting States’ authority to favor muclear power providers.
Plaintiffs in New York were energy supply competitors who argued that subsidies for the state’s nuclear power plants violate federal market rules and put out-of-state generators at a disadvantage.
District Judge Valerie Caproni e ruled that New York’s zero-emissions credit (ZEC) program which aided nuclear providers does not intrude on the Federal Energy Regulatory Commission's jurisdiction over wholesale electricity markets.
“The ZEC program is plainly related to a matter of legitimate state concern: the production of clean energy and the reduction of carbon emissions from the production of other energy,” Caproni wrote in her decision.
Caproni’s ruling came shortly after a federal judge in Illinois threw out a nearly identical challenge to the State’s ZEC program. A couple of weeks prior, the Second Circuit Court of Appeals upheld a Connecticut district court decision to dismiss arguments against the state’s renewable energy procurement program.
Credit: https://www.greentechmedia.com/articles/read/nuclear-subsidies-court-new-york-illinois-renewable-energy -- which takes the view that victories today for Exelon and provision of nuclear energy will benefit other renewable suppliers in the future. Other commenters argue that state support for nuclear should be withheld in favor of immediate support for other and greener renewables.
Several months ago a federal judge ruled that New York's plan to subsidize nuclear power plants “is constitutional” and “of legitimate state concern.”
The decision helped nuclear power provider Exelon, which has been struggling financially. Nuclear plants are notoriously expensive to run.
The ruling was one of several federal court rulings supporting States’ authority to favor muclear power providers.
Plaintiffs in New York were energy supply competitors who argued that subsidies for the state’s nuclear power plants violate federal market rules and put out-of-state generators at a disadvantage.
District Judge Valerie Caproni e ruled that New York’s zero-emissions credit (ZEC) program which aided nuclear providers does not intrude on the Federal Energy Regulatory Commission's jurisdiction over wholesale electricity markets.
“The ZEC program is plainly related to a matter of legitimate state concern: the production of clean energy and the reduction of carbon emissions from the production of other energy,” Caproni wrote in her decision.
Caproni’s ruling came shortly after a federal judge in Illinois threw out a nearly identical challenge to the State’s ZEC program. A couple of weeks prior, the Second Circuit Court of Appeals upheld a Connecticut district court decision to dismiss arguments against the state’s renewable energy procurement program.
Credit: https://www.greentechmedia.com/articles/read/nuclear-subsidies-court-new-york-illinois-renewable-energy -- which takes the view that victories today for Exelon and provision of nuclear energy will benefit other renewable suppliers in the future. Other commenters argue that state support for nuclear should be withheld in favor of immediate support for other and greener renewables.
Ralph Nader on Trump's anti-consumer agenda
As a candidate, Donald Trump promised regular people, “I will be your voice,” and attacked the drug industry for “getting away with murder” in setting high prices for lifesaving medications. But as president, he has declared war on regulatory programs protecting the health, safety and economic rights of consumers. He has done so in disregard of evidence that such protections help the economy and financial well-being of the working-class voters he claims to champion.
Already his aggressive actions exceed those of the Reagan administration in returning the country to the “Let the buyer beware” days of the 1950s.
Though Mr. Trump is brazen in his opposition to consumer protections, many of his most damaging attacks are occurring in corners of the bureaucracy that receive minimal news coverage. His administration, for instance, wants to strip the elderly of their right to challenge nursing home abuses in court by allowing arbitration clauses in nursing home contracts. The Federal Motor Carrier Safety Administration has announced that it is canceling a proposed rule intended to reduce the risk of sleep apnea-related accidents among truck drivers and railway workers.
And the Environmental Protection Agency is busy weakening, repealing and under-enforcing protections, including for children, from toxic exposure. Scott Pruitt, the director, went against his agency’s scientists to jettison an imminent ban on the use of chlorpyrifos, an insecticide widely used on vegetables and fruits. Long-accumulated evidence shows that the chemical is poisoning the drinking water of farm workers and their families.
This assault began with Mr. Trump choosing agency chiefs who are tested corporate loyalists driven to undermine the lifesaving, income-protecting institutions whose laws they have sworn to uphold.
At the Food and Drug Administration, Mr. Trump has installed Dr. Scott Gottlieb, a former pharmaceutical industry consultant, who supports weakening drug and medical device safety standards and has shown no real commitment to reducing sky-high drug prices. At the Department of Education, Betsy DeVos, a billionaire investor in for-profit colleges, has weakened enforcement policy on that predatory industry, hiring industry insiders and abandoning protections for students and taxpayers.
Mr. Pruitt, as the attorney general of Oklahoma, filed suits against the E.P.A. He has hired former lobbyists for the fossil fuel and chemical industries. Mr. Trump’s aides and Republicans in Congress are pushing to restrict access to state courts by plaintiffs who seek to hold polluters accountable.
The administration is even threatening to dismantle the Consumer Financial Protection Bureau and fire its director, Richard Cordray, who was installed after Wall Street’s 2008 crash. Their sins: They returned over $12 billion to defrauded consumers and plan to issue regulations dealing with payday debt traps and compulsory arbitration clauses that deny aggrieved consumers their day in court. (The Senate is now considering legislation to gut the arbitration rule.)
Draconian budget cuts, new restrictions on health insurance, diminished privacy protections and denying climate change while putting off fuel-efficiency deadlines and auto safety standards will hurt all Americans, including Mr. Trump’s most die-hard supporters.
Mr. Trump’s deregulation crowd argues that they are freeing markets to grow. But preventing casualties and protecting consumers are, in fact, good for the economy. Nicholas Ashford, a professor of technology at M.I.T., has shown how safety regulation has fostered innovation. Markets grow in humane and efficient ways when workers make airbags, products to detect contaminants in food and water, and recycling equipment. Fraud prosecutions leave consumers with more money, generating sales, jobs and a higher standard of living.
When courts grant compensation for wrongful injuries, they not only help victims pay their bills but also lessen the burden on public insurance programs like Medicare. Fuel-efficiency standards save consumers money, improve air quality and reduce dependence on foreign oil. The Department of Energy itself says that over five years, a 30-m.p.g. vehicle will save $3,125 if driven 15,000 miles annually.
Mr. Trump’s regulatory abolitionists should know they will face litigation. In the 1980s, the Reagan administration’s repeal of the rule requiring airbags in cars was challenged by the insurance industry and consumer groups. The Supreme Court unanimously required the rule to be reinstated. Labor, consumer and environmental groups are mobilizing to fight efforts to sap health and safety protections. Citizens are rediscovering the benefits of focusing on members of Congress at town halls and other gatherings.
Smashing safety and consumer safeguards will lead to deaths, injuries and diseases that provoke intense news coverage. Demands to hold the profit-obsessed Trump team accountable for conflicts of interest will intensify. And civil servants, blocked from enforcing laws, will respect established procedures or become whistle-blowers, with legal protections.
The administration’s corrosive polices should be a clarion call to Democrats not to mimic Republicans in pursuing special interest campaign dollars and instead devise a powerful consumer protection message for voters left, right and center — voters who can be injured or defrauded regardless of their political views.
Championing a consumer agenda should be a good way to win elections.
Article from NYT: https://www.nytimes.com/2017/10/23/opinion/ralph-nader-trump-consumers.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0
As a candidate, Donald Trump promised regular people, “I will be your voice,” and attacked the drug industry for “getting away with murder” in setting high prices for lifesaving medications. But as president, he has declared war on regulatory programs protecting the health, safety and economic rights of consumers. He has done so in disregard of evidence that such protections help the economy and financial well-being of the working-class voters he claims to champion.
Already his aggressive actions exceed those of the Reagan administration in returning the country to the “Let the buyer beware” days of the 1950s.
Though Mr. Trump is brazen in his opposition to consumer protections, many of his most damaging attacks are occurring in corners of the bureaucracy that receive minimal news coverage. His administration, for instance, wants to strip the elderly of their right to challenge nursing home abuses in court by allowing arbitration clauses in nursing home contracts. The Federal Motor Carrier Safety Administration has announced that it is canceling a proposed rule intended to reduce the risk of sleep apnea-related accidents among truck drivers and railway workers.
And the Environmental Protection Agency is busy weakening, repealing and under-enforcing protections, including for children, from toxic exposure. Scott Pruitt, the director, went against his agency’s scientists to jettison an imminent ban on the use of chlorpyrifos, an insecticide widely used on vegetables and fruits. Long-accumulated evidence shows that the chemical is poisoning the drinking water of farm workers and their families.
This assault began with Mr. Trump choosing agency chiefs who are tested corporate loyalists driven to undermine the lifesaving, income-protecting institutions whose laws they have sworn to uphold.
At the Food and Drug Administration, Mr. Trump has installed Dr. Scott Gottlieb, a former pharmaceutical industry consultant, who supports weakening drug and medical device safety standards and has shown no real commitment to reducing sky-high drug prices. At the Department of Education, Betsy DeVos, a billionaire investor in for-profit colleges, has weakened enforcement policy on that predatory industry, hiring industry insiders and abandoning protections for students and taxpayers.
Mr. Pruitt, as the attorney general of Oklahoma, filed suits against the E.P.A. He has hired former lobbyists for the fossil fuel and chemical industries. Mr. Trump’s aides and Republicans in Congress are pushing to restrict access to state courts by plaintiffs who seek to hold polluters accountable.
The administration is even threatening to dismantle the Consumer Financial Protection Bureau and fire its director, Richard Cordray, who was installed after Wall Street’s 2008 crash. Their sins: They returned over $12 billion to defrauded consumers and plan to issue regulations dealing with payday debt traps and compulsory arbitration clauses that deny aggrieved consumers their day in court. (The Senate is now considering legislation to gut the arbitration rule.)
Draconian budget cuts, new restrictions on health insurance, diminished privacy protections and denying climate change while putting off fuel-efficiency deadlines and auto safety standards will hurt all Americans, including Mr. Trump’s most die-hard supporters.
Mr. Trump’s deregulation crowd argues that they are freeing markets to grow. But preventing casualties and protecting consumers are, in fact, good for the economy. Nicholas Ashford, a professor of technology at M.I.T., has shown how safety regulation has fostered innovation. Markets grow in humane and efficient ways when workers make airbags, products to detect contaminants in food and water, and recycling equipment. Fraud prosecutions leave consumers with more money, generating sales, jobs and a higher standard of living.
When courts grant compensation for wrongful injuries, they not only help victims pay their bills but also lessen the burden on public insurance programs like Medicare. Fuel-efficiency standards save consumers money, improve air quality and reduce dependence on foreign oil. The Department of Energy itself says that over five years, a 30-m.p.g. vehicle will save $3,125 if driven 15,000 miles annually.
Mr. Trump’s regulatory abolitionists should know they will face litigation. In the 1980s, the Reagan administration’s repeal of the rule requiring airbags in cars was challenged by the insurance industry and consumer groups. The Supreme Court unanimously required the rule to be reinstated. Labor, consumer and environmental groups are mobilizing to fight efforts to sap health and safety protections. Citizens are rediscovering the benefits of focusing on members of Congress at town halls and other gatherings.
Smashing safety and consumer safeguards will lead to deaths, injuries and diseases that provoke intense news coverage. Demands to hold the profit-obsessed Trump team accountable for conflicts of interest will intensify. And civil servants, blocked from enforcing laws, will respect established procedures or become whistle-blowers, with legal protections.
The administration’s corrosive polices should be a clarion call to Democrats not to mimic Republicans in pursuing special interest campaign dollars and instead devise a powerful consumer protection message for voters left, right and center — voters who can be injured or defrauded regardless of their political views.
Championing a consumer agenda should be a good way to win elections.
Article from NYT: https://www.nytimes.com/2017/10/23/opinion/ralph-nader-trump-consumers.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0
Trump Treasury Department report attacks CFPB s arbitration rule
From the report:
“An agency implementing such a drastic shift in policy should typically subject its rulemaking to the rigors of cost-benefit analysis and require incremental efficiency justification for more stringent regulations. The bureau’s analysis fell short of these standards for agency rulemaking, as well as its own statutory command to determine that the rule serves the public and consumer interests.”
The Treasury Department report is here: https://www.treasury.gov/press-center/press-releases/Documents/10-23-17%20Analysis%20of%20CFPB%20arbitration%20rule.pdf
Editor's note: We support the CFPB rule as protecting consumer's litigation rights.
From the report:
“An agency implementing such a drastic shift in policy should typically subject its rulemaking to the rigors of cost-benefit analysis and require incremental efficiency justification for more stringent regulations. The bureau’s analysis fell short of these standards for agency rulemaking, as well as its own statutory command to determine that the rule serves the public and consumer interests.”
The Treasury Department report is here: https://www.treasury.gov/press-center/press-releases/Documents/10-23-17%20Analysis%20of%20CFPB%20arbitration%20rule.pdf
Editor's note: We support the CFPB rule as protecting consumer's litigation rights.
A Congressional vote to repeal of the CFPB arbitration rule is reported to be imminent as of October 24
We join others is opposing S.J. Res. 47. We believe that the CFPB rule provides important protections to consumers who wish to assert State and Federal rights in court. Here is a video featuring "Mr. Monopoly:"
video ( https://www.facebook.com/indivisibleguide/videos/331938930603316/ )
We join others is opposing S.J. Res. 47. We believe that the CFPB rule provides important protections to consumers who wish to assert State and Federal rights in court. Here is a video featuring "Mr. Monopoly:"
video ( https://www.facebook.com/indivisibleguide/videos/331938930603316/ )
U.S. Supreme Court has accepted cert in the Amex antitrust case in which the lower court requires assessment of two-sided market elements. From SCOTUSblog, here are some amicus briefs:
.
Jul 06 2017Brief amici curiae of Former Federal Antitrust Officials filed.
Jul 06 2017Brief amicus curiae of United States Public Interest Research Group Education Fund, Inc. filed.
Jul 06 2017Brief amici curiae of 25 Professors of Antitrust law filed.
Aug 07 2017Brief of respondent United States in opposition filed.
Aug 21 2017Brief of respondent American Express Company in opposition filed.
Sep 05 2017Reply of petitioner Ohio, et al. filed. (Distributed)
From the Former Federal Officials brief:
INTRODUCTION AND
SUMMARY OF ARGUMENT
This petition involves an antitrust issue of exceptional importance to the modern economy: the application of
the rule of reason to industries that function as two-sided platforms. “In a two-sided platform,” a firm “sells different
products or services to two separate yet interrelated groups of customers”—like merchants and consumers in
the credit-card industry. Pet. App. 77a.
The district court and court of appeals disagreed on what burden of proof antitrust plaintiffs must bear in such circumstances.
Clarity about this key element of the antitrust enforcement regime is necessary for the law to “evolve to
meet the dynamics of present economic conditions.” Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551
U.S. 877, 899 (2007).
And this Court’s central role in shaping the common law of antitrust makes its review of this discrete legal issue both timely and appropriate in this case, especially because this Court has had few opportunities to weigh in on cases brought by government antitrust authorities over the last forty years.
The Acting Solicitor General’s failure to join this petition—at a time when both the Antitrust Division and the Solicitor General’s office lack Senate-confirmed leadership—does not diminish the importance of clarifying the proper burden of proof in two-sided platform antitrust cases. The government plaintiffs are ably represented by eleven sovereign states. And, of course, the federal government’s voice need not go unheard. The Court may call for the views of the Solicitor General, both as to this petition and on the merits.
Here is a website that helps students avoid scam schools and scam student loans:
https://www.knowb4youenroll.com/
From the website:
Predatory for-profit schools make it their business to trick students into attending high-cost programs that don't lead to well-paying jobs. That's why we've created tip sheets to help you detect if a school you're considering is not working in your best interest.
https://www.knowb4youenroll.com/
From the website:
Predatory for-profit schools make it their business to trick students into attending high-cost programs that don't lead to well-paying jobs. That's why we've created tip sheets to help you detect if a school you're considering is not working in your best interest.
The Sierra Club has sued the US EPA
The suit alleges that the EPA failed to update Congress on the environmental impacts of the Renewable Fuel Standard program, and failed to study whether increased ethanol use has adversely impacted air quality.
The Complaint is here: https://dlbjbjzgnk95t.cloudfront.net/0976000/976399/https-ecf-dcd-uscourts-gov-doc1-04516269427.pdf
The suit alleges that the EPA failed to update Congress on the environmental impacts of the Renewable Fuel Standard program, and failed to study whether increased ethanol use has adversely impacted air quality.
The Complaint is here: https://dlbjbjzgnk95t.cloudfront.net/0976000/976399/https-ecf-dcd-uscourts-gov-doc1-04516269427.pdf
Morgenstern of NYT reports: Freddie Mac has decided to allow Equifax to ban dozens of rival credit-reporting companies from one part of its automated system.
From the NYT article:
Here’s the background. Both Freddie Mac and the other government-sponsored mortgage finance company, Fannie Mae, have automated underwriting systems that are meant to make their loan guarantee or purchasing processes work smoothly and quickly. Mortgage lenders rely on them heavily.
A borrower’s credit standing is a crucial piece of the information that flows into these systems. While Equifax and the other big credit-reporting agencies dominate, a group of about 40 other firms also provide lenders with credit information. In addition to supplying merged credit reports as Equifax does, these firms often provide more detailed information, including verification of a borrower’s employment, and past payments to utilities, phone companies and landlords.
That these independent companies can still operate in a world that Equifax dominates may be an indication that they provide superior customer service such as quickly correcting errors or outdated information in a report. Equifax can supply the same information, but its customer service is not so stellar. The internet abounds with consumer complaints about the company, and since the data breach, many consumers have said they have been unable to reach the company.
That is what comes of having little or no competition. Which is why it is troubling that Freddie Mac has decided to allow Equifax to ban dozens of rival credit-reporting companies from one part of its automated system.
Freddie Mac recently developed Loan Quality Advisor, a new part of that system. It was, according to the company’s website, a “risk and eligibility assessment tool that evaluates loan data to help lenders determine if a loan is eligible for sale to Freddie Mac.”
Naturally, a borrower’s credit history goes into this system. But Freddie Mac assigned gatekeeper status to Equifax, essentially allowing it to bar an array of competing firms from providing credit information during the process.
This change hurts competitors by ensuring that what could be their business goes to Equifax instead. But it may also harm certain borrowers. Because of the more efficient services the other firms often provide, preventing them from participating could make it more difficult for borrowers with errors on their credit histories to correct them in time to secure a mortgage.
(Fannie Mae has taken a different approach with its automated loan-underwriting system. Its structure is more open, allowing independent credit-information providers to participate at multiple levels)
Interestingly, an internal Freddie Mac email indicates that Equifax drove the decision to keep independent companies, known as technical affiliates, out of the system.
Article: https://www.nytimes.com/2017/10/13/business/equifax-freddie-mac.html?_r=0
From the NYT article:
Here’s the background. Both Freddie Mac and the other government-sponsored mortgage finance company, Fannie Mae, have automated underwriting systems that are meant to make their loan guarantee or purchasing processes work smoothly and quickly. Mortgage lenders rely on them heavily.
A borrower’s credit standing is a crucial piece of the information that flows into these systems. While Equifax and the other big credit-reporting agencies dominate, a group of about 40 other firms also provide lenders with credit information. In addition to supplying merged credit reports as Equifax does, these firms often provide more detailed information, including verification of a borrower’s employment, and past payments to utilities, phone companies and landlords.
That these independent companies can still operate in a world that Equifax dominates may be an indication that they provide superior customer service such as quickly correcting errors or outdated information in a report. Equifax can supply the same information, but its customer service is not so stellar. The internet abounds with consumer complaints about the company, and since the data breach, many consumers have said they have been unable to reach the company.
That is what comes of having little or no competition. Which is why it is troubling that Freddie Mac has decided to allow Equifax to ban dozens of rival credit-reporting companies from one part of its automated system.
Freddie Mac recently developed Loan Quality Advisor, a new part of that system. It was, according to the company’s website, a “risk and eligibility assessment tool that evaluates loan data to help lenders determine if a loan is eligible for sale to Freddie Mac.”
Naturally, a borrower’s credit history goes into this system. But Freddie Mac assigned gatekeeper status to Equifax, essentially allowing it to bar an array of competing firms from providing credit information during the process.
This change hurts competitors by ensuring that what could be their business goes to Equifax instead. But it may also harm certain borrowers. Because of the more efficient services the other firms often provide, preventing them from participating could make it more difficult for borrowers with errors on their credit histories to correct them in time to secure a mortgage.
(Fannie Mae has taken a different approach with its automated loan-underwriting system. Its structure is more open, allowing independent credit-information providers to participate at multiple levels)
Interestingly, an internal Freddie Mac email indicates that Equifax drove the decision to keep independent companies, known as technical affiliates, out of the system.
Article: https://www.nytimes.com/2017/10/13/business/equifax-freddie-mac.html?_r=0
California, New York and 16 other states on Friday 10/13 sued the Trump administration to force federal regulators to continue paying billions of dollars in cost-sharing insurance subsidies under the Affordable Care Act.
President Donald Trump announced Thursday he would end federal payments that help qualifying residents purchase insurance plans. More than one million Californians buy coverage through the Affordable Care Act's health care exchanges.
The U.S. Department of Justice on Friday told the U.S. Court of Appeals for the D.C. Circuit, where the health care law's cost-sharing subsidies are being challenged, that the federal government does not intend to make the next scheduled payment on Oct. 18.
California Attorney General Xavier Becerra on Friday called the president’s decision “sabotage, plain and simple.” A coalition of attorneys general—18 states and the District of Columbia--filed the suit- see it at https://assets.documentcloud.org/documents/4108324/California-v-Trump-20171013.pdf ] --Friday in the U.S. District Court for the Northern District of California.
Becerra was joined on a media call by Massachusetts Attorney General Maura Healey, Connecticut Attorney General George Jepsen and Kentucky Attorney General Andy Beshear. New York Attorney General Eric Schneiderman joined the lawsuit filed in California.
Credit: http://www.therecorder.com/id=1202800402342/Calling-Trumps-Health-Care-Move-Sabotage-Becerra-Teams-Up-for-New-Suit?kw=Calling%20Trump%27s%20Health%20Care%20Move%20%27Sabotage%2C%27%20Becerra%20Teams%20Up%20for%20New%20Suit&et=editorial&bu=The%20Recorder&cn=20171013&src=EMC-Email&pt=Afternoon%20Update#!
President Donald Trump announced Thursday he would end federal payments that help qualifying residents purchase insurance plans. More than one million Californians buy coverage through the Affordable Care Act's health care exchanges.
The U.S. Department of Justice on Friday told the U.S. Court of Appeals for the D.C. Circuit, where the health care law's cost-sharing subsidies are being challenged, that the federal government does not intend to make the next scheduled payment on Oct. 18.
California Attorney General Xavier Becerra on Friday called the president’s decision “sabotage, plain and simple.” A coalition of attorneys general—18 states and the District of Columbia--filed the suit- see it at https://assets.documentcloud.org/documents/4108324/California-v-Trump-20171013.pdf ] --Friday in the U.S. District Court for the Northern District of California.
Becerra was joined on a media call by Massachusetts Attorney General Maura Healey, Connecticut Attorney General George Jepsen and Kentucky Attorney General Andy Beshear. New York Attorney General Eric Schneiderman joined the lawsuit filed in California.
Credit: http://www.therecorder.com/id=1202800402342/Calling-Trumps-Health-Care-Move-Sabotage-Becerra-Teams-Up-for-New-Suit?kw=Calling%20Trump%27s%20Health%20Care%20Move%20%27Sabotage%2C%27%20Becerra%20Teams%20Up%20for%20New%20Suit&et=editorial&bu=The%20Recorder&cn=20171013&src=EMC-Email&pt=Afternoon%20Update#!
CBS and WashPost report that Drug Enforcement Agency's efforts to crack down on the opioid epidemic were derailed by lobbying efforts of pharma distributors like McKesson and Cardinal, and Congress
Illegal diversion of prescription opiods was not properly prosecuted by DEA, according to the reports. Pharma distributors and Congress are blamed for holding back DEA efforts.
Washington Post's investigative reporters Scott Higham and Lenny Bernstein will appear Sunday, Oct. 15 in The Washington Post and on 60 Minutes at 7:30 p.m. ET and 7 p.m. PT. The 60 Minutes segment includes an interview with the highest-ranking DEA agent ever to turn whistleblower, former Deputy Assistant Administrator Joe Rannazzisi.
See: https://www.cbsnews.com/news/how-the-dea-efforts-to-crack-down-on-the-opioid-epidemic-were-derailed/
P.S. This is a problem that a group of State AGs are investigating. See http://www.cnn.com/2017/09/19/health/state-ag-investigation-opioids-subpoenas/index.html
Illegal diversion of prescription opiods was not properly prosecuted by DEA, according to the reports. Pharma distributors and Congress are blamed for holding back DEA efforts.
Washington Post's investigative reporters Scott Higham and Lenny Bernstein will appear Sunday, Oct. 15 in The Washington Post and on 60 Minutes at 7:30 p.m. ET and 7 p.m. PT. The 60 Minutes segment includes an interview with the highest-ranking DEA agent ever to turn whistleblower, former Deputy Assistant Administrator Joe Rannazzisi.
See: https://www.cbsnews.com/news/how-the-dea-efforts-to-crack-down-on-the-opioid-epidemic-were-derailed/
P.S. This is a problem that a group of State AGs are investigating. See http://www.cnn.com/2017/09/19/health/state-ag-investigation-opioids-subpoenas/index.html
The next big thing in cashless payments, possibly with no Visa or MasterCard or other credit card required -- the QR code on your cellphone
Excerpts condensed from Bloomberg article:
Around the developing world, QR codes are beating out Apple Pay and other brand-name payment services for consumers and businesses keen to go cashless. China offers a useful model for that transformation -- and a standard that others may soon be emulating.
The QR code may seem like an unlikely candidate to foster a financial revolution. It was developed in the 1990s by Japan's Denso Corp.
By the time Tencent Holdings Ltd. released the social media app WeChat, in 2011, it was clear that QR codes had a lot more potential. WeChat offered users personalized codes that could be used to exchange contact information. When combined with the app's built-in wallet, they could also be used for payments. Sending money through the app has since become a way of life: During this year's Chinese New Year holiday, WeChat users sent 46 billion cash gifts via virtual "red envelopes."
That success shows why QR code payments are likely to take off in emerging markets. For one thing, they don't require credit cards [emphasis added], which few people in poorer countries have. Apple Pay and other such services, which use Near Field Communication technology, are uneconomical for many of these consumers. (Apple Pay's market share in China is in the single digits, despite a recent marketing push.) And the small-scale merchants that predominate in the developing world -- restaurants, corner markets, buskers -- have little reason to invest in expensive payment terminals for the equivalent of $0.50 transactions.
WeChat Pay, by contrast, allows just about anyone with a bank account and a smartphone to make electronic payments. All a Shanghai noodle shop or a Shenzhen busker needs to accept payments is a free WeChat account and a printout of a QR code. Much of China has become a QR first economy, where codes are now found next to nearly every cash register. WeChat's share of China's mobile payments market has grown from 3.3 percent in 2013 to 40 percent today.
Other developing countries are starting to see the potential. Last year, MasterCard Inc. rolled out a QR code system in Africa that has already attracted 100,000 Nigerian traders. In February, the Indian government launched IndiaQR, its latest effort to spur a cashless society. Thailand is similarly enthusiastic.
But perhaps the most ambitious step is a new industry standard published last week by EMVCo, a global payments consortium that includes MasterCard, Visa Inc. and the state-backed China UnionPay Co. The effort, spearheaded by UnionPay, would effectively extend China's payment standard globally, helping to ensure that QR-mediated transactions can flow seamlessly between banks and card companies, while also making them more secure.
That should make the technology more attractive to consumers, merchants and governments around the world. It could help fill the digital tip jars of subway buskers from Shenzhen to Lagos. And it just might make the cashless society a reality far sooner than anyone had predicted.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
The author of this story:
Adam Minter at [email protected]
The article is at:
https://www.bloomberg.com/view/articles/2017-07-19/china-s-cashless-revolution
Excerpts condensed from Bloomberg article:
Around the developing world, QR codes are beating out Apple Pay and other brand-name payment services for consumers and businesses keen to go cashless. China offers a useful model for that transformation -- and a standard that others may soon be emulating.
The QR code may seem like an unlikely candidate to foster a financial revolution. It was developed in the 1990s by Japan's Denso Corp.
By the time Tencent Holdings Ltd. released the social media app WeChat, in 2011, it was clear that QR codes had a lot more potential. WeChat offered users personalized codes that could be used to exchange contact information. When combined with the app's built-in wallet, they could also be used for payments. Sending money through the app has since become a way of life: During this year's Chinese New Year holiday, WeChat users sent 46 billion cash gifts via virtual "red envelopes."
That success shows why QR code payments are likely to take off in emerging markets. For one thing, they don't require credit cards [emphasis added], which few people in poorer countries have. Apple Pay and other such services, which use Near Field Communication technology, are uneconomical for many of these consumers. (Apple Pay's market share in China is in the single digits, despite a recent marketing push.) And the small-scale merchants that predominate in the developing world -- restaurants, corner markets, buskers -- have little reason to invest in expensive payment terminals for the equivalent of $0.50 transactions.
WeChat Pay, by contrast, allows just about anyone with a bank account and a smartphone to make electronic payments. All a Shanghai noodle shop or a Shenzhen busker needs to accept payments is a free WeChat account and a printout of a QR code. Much of China has become a QR first economy, where codes are now found next to nearly every cash register. WeChat's share of China's mobile payments market has grown from 3.3 percent in 2013 to 40 percent today.
Other developing countries are starting to see the potential. Last year, MasterCard Inc. rolled out a QR code system in Africa that has already attracted 100,000 Nigerian traders. In February, the Indian government launched IndiaQR, its latest effort to spur a cashless society. Thailand is similarly enthusiastic.
But perhaps the most ambitious step is a new industry standard published last week by EMVCo, a global payments consortium that includes MasterCard, Visa Inc. and the state-backed China UnionPay Co. The effort, spearheaded by UnionPay, would effectively extend China's payment standard globally, helping to ensure that QR-mediated transactions can flow seamlessly between banks and card companies, while also making them more secure.
That should make the technology more attractive to consumers, merchants and governments around the world. It could help fill the digital tip jars of subway buskers from Shenzhen to Lagos. And it just might make the cashless society a reality far sooner than anyone had predicted.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
The author of this story:
Adam Minter at [email protected]
The article is at:
https://www.bloomberg.com/view/articles/2017-07-19/china-s-cashless-revolution
Will Visa and MasterCard manage globalization of the new QR cashless mobile phone app? From
South China Morning Post:
QR code takes a baby step in world conquest as group adopts global cashless payment format
PUBLISHED : Sunday, 16 July, 2017,
Daniel Ren in Shanghai
A version of the QR code, the ubiquitous data-storage format that dominates daily life in the internet age in mainland China, is taking a significant step abroad, after a global organisation that supports unified payment systems adopted and published the specifications for transactions using the code.
EMVCo, a consortium for smart payments that’s collectively owned by American Express, Visa, Mastercard and UnionPay, on Saturday published the first version of QR code specifications, or the industry standard for the payment format, a year after UnionPay proposed a safe and open global system.
“UnionPay played an active and leading role in the preparations for the issuance of the standard,” said Zhou Jinjia, a UnionPay executive in charge of the QR code promotion. “It was UnionPay, the leader in the EMVCo working group, that helped provide the final technical solution.”
The move is a giant leap in the evolution of the black and white squiggles first created in 1994 by Denso for the Japanese automotive industry. Known as the Quick Response codes, the format comprised random patterns of black squares on white background, capable of holding 300 times more data than traditional bar codes.
Embraced in China, nine of 10 of the world’s QR code users are in the country, according to an estimate by the People’s Daily newspaper. QR codes are now an integral part of the social media-enabled, mobile internet age by more than 700 million smartphone owners, where the data is used in everything from identification to cashless payments to online shopping. Even roadside peddlers and beggars have been seen providing their QR codes to accept cashless payments.
China’s consumers made 38 trillion yuan (US$5.6 trillion) of payments through mobile devices in 2016, more than half of the country’s total economic output, according to iResearch.
“Given the fast growth of the country’s internet-related businesses, it’s safe to say that some of the new technological applications in China have the potential to become world leaders,” said Zhang Ming, a managing director with Flag Leader information, which focuses on online-to-offline businesses. “But China has yet to be a true locomotive in driving global innovations, since the technology was developed and widely used here, but not invented” in China, he said.
Tencent Holdings and Alibaba Group Holdings have been the biggest drivers of the QR code, where their Wechat Pay and Alipay cashless payment platforms use the data format for storing and deciphering data. Alibaba owns the South China Morning Post.
Last year, the Payment & Clearing Association of China, an industry consortium overseen by the central bank, drew up rules governing QR code payment, marking a milestone in China’s drive to promote the new payment method at home and abroad.
UnionPay International, a subsidiary of UnionPay that handles the group’s businesses outside the mainland, has been actively expanding QR code services abroad, launching the services in Hong Kong and Singapore recently.
Analysts expected the rising penetration of QR code to eventually lure more new players including the big-name foreign payment service providers into the market.
Article at http://www.scmp.com/print/business/banking-finance/article/2102855/qr-code-takes-baby-step-world-conquest-group-adopts-global
South China Morning Post:
QR code takes a baby step in world conquest as group adopts global cashless payment format
PUBLISHED : Sunday, 16 July, 2017,
Daniel Ren in Shanghai
A version of the QR code, the ubiquitous data-storage format that dominates daily life in the internet age in mainland China, is taking a significant step abroad, after a global organisation that supports unified payment systems adopted and published the specifications for transactions using the code.
EMVCo, a consortium for smart payments that’s collectively owned by American Express, Visa, Mastercard and UnionPay, on Saturday published the first version of QR code specifications, or the industry standard for the payment format, a year after UnionPay proposed a safe and open global system.
“UnionPay played an active and leading role in the preparations for the issuance of the standard,” said Zhou Jinjia, a UnionPay executive in charge of the QR code promotion. “It was UnionPay, the leader in the EMVCo working group, that helped provide the final technical solution.”
The move is a giant leap in the evolution of the black and white squiggles first created in 1994 by Denso for the Japanese automotive industry. Known as the Quick Response codes, the format comprised random patterns of black squares on white background, capable of holding 300 times more data than traditional bar codes.
Embraced in China, nine of 10 of the world’s QR code users are in the country, according to an estimate by the People’s Daily newspaper. QR codes are now an integral part of the social media-enabled, mobile internet age by more than 700 million smartphone owners, where the data is used in everything from identification to cashless payments to online shopping. Even roadside peddlers and beggars have been seen providing their QR codes to accept cashless payments.
China’s consumers made 38 trillion yuan (US$5.6 trillion) of payments through mobile devices in 2016, more than half of the country’s total economic output, according to iResearch.
“Given the fast growth of the country’s internet-related businesses, it’s safe to say that some of the new technological applications in China have the potential to become world leaders,” said Zhang Ming, a managing director with Flag Leader information, which focuses on online-to-offline businesses. “But China has yet to be a true locomotive in driving global innovations, since the technology was developed and widely used here, but not invented” in China, he said.
Tencent Holdings and Alibaba Group Holdings have been the biggest drivers of the QR code, where their Wechat Pay and Alipay cashless payment platforms use the data format for storing and deciphering data. Alibaba owns the South China Morning Post.
Last year, the Payment & Clearing Association of China, an industry consortium overseen by the central bank, drew up rules governing QR code payment, marking a milestone in China’s drive to promote the new payment method at home and abroad.
UnionPay International, a subsidiary of UnionPay that handles the group’s businesses outside the mainland, has been actively expanding QR code services abroad, launching the services in Hong Kong and Singapore recently.
Analysts expected the rising penetration of QR code to eventually lure more new players including the big-name foreign payment service providers into the market.
Article at http://www.scmp.com/print/business/banking-finance/article/2102855/qr-code-takes-baby-step-world-conquest-group-adopts-global
Don't bother to call George Forman and InventHelp to say that you've invented an ATM machine that uses QR codes to access bank accounts and bypasses Visa and MasterCard and their expensive fees. You are years too late:
SMART ATM USES QR CODES INSTEAD OF CARDS TO DISPENSE CASH By Mike Flacy -- Posted on June 16, 2012 11:40 am
Developed by the NCR Corporation, the payments group within the company has created a way to withdraw cash from an ATM without having to pull an ATM card out of a purse or wallet. Assuming that a bank customer has an Android or iOS smartphone with a built-in camera, the customer approaches an ATM and launches the NCR application. After the app loads, the customer enters the four digit PIN number tied to their bank account on the smartphone touchscreen. When the pin is accepted, the app brings up all bank accounts related to the customer’s account.
At this point, the customer can choose if they want to withdraw money from their checking or savings account. After picking an account, the customer chooses a dollar figure on the smartphone touchscreen. In the NCR example, there are preset dollar figures in addition to a custom option to withdraw a specific amount of cash.
Once the dollar figure is picked, the customer taps the scan button to launch the camera on the smartphone. The customer simply scans the QR code on the ATM screen with the camera application. At this point, the transaction is confirmed and cash is dispensed. The customer gets an electronic receipt on the smartphone screen as well.
According NCR management, the entire process takes about ten seconds to complete. In addition, someone waiting in line at an ATM could hypothetically run through all the first steps on the smartphone and would be ready to scan the QR code immediately when they reached the front of the line. From the bank’s perspective, there’s no new hardware to purchase since the ATM software would only have to display the QR code on the ATM screen. The company argues that this technology also improves safety as thieves can’t utilize ATM skimming devices to collect debit card numbers since the customer has no need for an ATM card anymore.
Article: https://www.digitaltrends.com/cool-tech/smart-atm-uses-qr-codes-instead-of-cards-to-dispense-cash/
Here are the EMVCo specifications for the QR codes
EMVCo QR Code Specification for Payment Systems: Merchant-Presented Mode
https://www.emvco.com/wp-content/plugins/pmpro-customizations/oy-getfile.php?u=/wp-content/uploads/documents/EMVCo-Merchant-Presented-QR-Specification-v1_0.pdf
EMVCo QR Code Specification for Payment Systems: Consumer Presented Mode
https://www.emvco.com/wp-content/plugins/pmpro-customizations/oy-getfile.php?u=/wp-content/uploads/documents/EMVCo-Consumer-Presented-QR-Specification-v1.pdf
Following is the "Overview" from the "Merchant-Presented Mode"
Overview to EMV® QR Code Payment
An EMV Merchant-Presented QR Code payment transaction enables consumers to make purchases using a merchant generated and displayed QR Code based on the merchant’s details. For example, it can be used for a transfer of funds to a Merchant account designated by the Merchant Account Information over a payment network in exchange for goods and services provided by the Merchant.
Consumers are issued a mobile application that has the capability to scan an EMV Merchant-Presented QR Code and initiate a payment transaction. This mobile application may be an existing mobile banking app offered by the Issuer or a third party. In both cases, the request to process the payment transaction is ultimately directed to the Issuer managing the account from which the funds will be withdrawn.
The Issuer receives the initial payment transaction, and secures or withdraws the transaction amount from the consumer's account.
Upon receiving the payment transaction, the Acquirer checks the validity of the Merchant Account Information and other merchant credentials and, when valid, credits the payment transaction amount to the account associated with the Merchant Account Information.
The Merchant awaits notification of a successful transaction response before delivering the goods and services to the Consumer.
The Issuer also provides a notification to the Consumer (typically to their mobile application).
Figure 2.1 illustrates the EMV Merchant-Presented QR Code transaction flow. Different message flows are possible between the entities involved, depending on type of wallet (Issuer wallet or third-party wallet) and the infrastructure supported by the payment network. In Figure 2.1, the combination of entities involved and the various message flows is jointly referred to as the 'Network'. Note that the specifics of this message flow from the mobile to the Network is out of EMVCo's scope.
Figure 2.1: Merchant-Presented Mode Transaction Flow [schematic omitted here]
[1] Merchant generates and displays QR Code based on merchant details.
[2] Consumer scans QR Code using a mobile application to initiate the transaction, with CDCVM if required.
[3] Mobile application sends the transaction initiation request to the Network.
[4] The Network processes the transaction and informs the Merchant and the Consumer of the transaction outcome.
DAR Comment: My impression (subject to correction) is that the "Network" referred to in steps [3] and [4] need not be the networks of Visa, MasterCard, or other credit card network participants in EMVCo, the proponent of the specification for the industry. It could, perhaps, be a Google network, for example, although Visa, MasterCard, or other credit card network participants in EMVCo may be the ones most ready with networks when QR technology is introduced in countries like the USA.
EMVCo QR Code Specification for Payment Systems: Merchant-Presented Mode
https://www.emvco.com/wp-content/plugins/pmpro-customizations/oy-getfile.php?u=/wp-content/uploads/documents/EMVCo-Merchant-Presented-QR-Specification-v1_0.pdf
EMVCo QR Code Specification for Payment Systems: Consumer Presented Mode
https://www.emvco.com/wp-content/plugins/pmpro-customizations/oy-getfile.php?u=/wp-content/uploads/documents/EMVCo-Consumer-Presented-QR-Specification-v1.pdf
Following is the "Overview" from the "Merchant-Presented Mode"
Overview to EMV® QR Code Payment
An EMV Merchant-Presented QR Code payment transaction enables consumers to make purchases using a merchant generated and displayed QR Code based on the merchant’s details. For example, it can be used for a transfer of funds to a Merchant account designated by the Merchant Account Information over a payment network in exchange for goods and services provided by the Merchant.
Consumers are issued a mobile application that has the capability to scan an EMV Merchant-Presented QR Code and initiate a payment transaction. This mobile application may be an existing mobile banking app offered by the Issuer or a third party. In both cases, the request to process the payment transaction is ultimately directed to the Issuer managing the account from which the funds will be withdrawn.
The Issuer receives the initial payment transaction, and secures or withdraws the transaction amount from the consumer's account.
Upon receiving the payment transaction, the Acquirer checks the validity of the Merchant Account Information and other merchant credentials and, when valid, credits the payment transaction amount to the account associated with the Merchant Account Information.
The Merchant awaits notification of a successful transaction response before delivering the goods and services to the Consumer.
The Issuer also provides a notification to the Consumer (typically to their mobile application).
Figure 2.1 illustrates the EMV Merchant-Presented QR Code transaction flow. Different message flows are possible between the entities involved, depending on type of wallet (Issuer wallet or third-party wallet) and the infrastructure supported by the payment network. In Figure 2.1, the combination of entities involved and the various message flows is jointly referred to as the 'Network'. Note that the specifics of this message flow from the mobile to the Network is out of EMVCo's scope.
Figure 2.1: Merchant-Presented Mode Transaction Flow [schematic omitted here]
[1] Merchant generates and displays QR Code based on merchant details.
[2] Consumer scans QR Code using a mobile application to initiate the transaction, with CDCVM if required.
[3] Mobile application sends the transaction initiation request to the Network.
[4] The Network processes the transaction and informs the Merchant and the Consumer of the transaction outcome.
DAR Comment: My impression (subject to correction) is that the "Network" referred to in steps [3] and [4] need not be the networks of Visa, MasterCard, or other credit card network participants in EMVCo, the proponent of the specification for the industry. It could, perhaps, be a Google network, for example, although Visa, MasterCard, or other credit card network participants in EMVCo may be the ones most ready with networks when QR technology is introduced in countries like the USA.
The US Treasury Report that advocates undermining Dodd-Frank regulation of banking:
US Treasury Second Report On The Administration’s Core Principles Of Financial Regulation
The 10/6/2017 press release:
WASHINGTON – Today the U.S. Department of the Treasury released a report detailing how to streamline and reform the U.S. regulatory system for the capital markets. Treasury’s evaluation of current capital market regulations found that there are significant reforms that can be undertaken to promote growth and vibrant financial markets while maintaining strong investor protections. The report issued today was in response to Executive Order 13772 issued by President Trump on February 3rd, which calls on Treasury to identify laws and regulations that are inconsistent with a set of Core Principles of financial regulation.
“The U.S. has experienced slow economic growth for far too long. In this report, we examined the capital markets system to identify regulations that are standing in the way of economic growth and capital formation,” said Treasury Secretary Steven T. Mnuchin. “By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow.”
Over the last 20 years, the United States has seen a nearly 50 percent decline in the number of publicly traded companies. The capital markets are a source of liquidity for small businesses as they grow, invest, and hire. In the report, Treasury identifies numerous ways to reduce the burden on companies that are looking to go public or stay public, while maintaining strong investor protections, including:
Additional recommendations in the report include:
To view the fact sheet click here
US Treasury Second Report On The Administration’s Core Principles Of Financial Regulation
The 10/6/2017 press release:
WASHINGTON – Today the U.S. Department of the Treasury released a report detailing how to streamline and reform the U.S. regulatory system for the capital markets. Treasury’s evaluation of current capital market regulations found that there are significant reforms that can be undertaken to promote growth and vibrant financial markets while maintaining strong investor protections. The report issued today was in response to Executive Order 13772 issued by President Trump on February 3rd, which calls on Treasury to identify laws and regulations that are inconsistent with a set of Core Principles of financial regulation.
“The U.S. has experienced slow economic growth for far too long. In this report, we examined the capital markets system to identify regulations that are standing in the way of economic growth and capital formation,” said Treasury Secretary Steven T. Mnuchin. “By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow.”
Over the last 20 years, the United States has seen a nearly 50 percent decline in the number of publicly traded companies. The capital markets are a source of liquidity for small businesses as they grow, invest, and hire. In the report, Treasury identifies numerous ways to reduce the burden on companies that are looking to go public or stay public, while maintaining strong investor protections, including:
- Streamlining disclosure requirements to reduce costs for companies while providing investors the information they need to make investment decisions;
- Tailoring the disclosure and other requirements for companies going public based on their size; and
- Re-examining the JOBS Act to identify how its tools can be improved.
- Evaluating the regulatory overlaps and opportunities for harmonization of SEC and CFTC regulation;
- Incorporating more robust economic analysis and public input into the rulemaking process in order to make the rulemaking process more transparent; and
- Opening up private markets to more investors through proposals to facilitate pooled investments in private or less liquid offerings, and revisit the “accredited investor” definition;
- Limiting imposing new regulations through informal guidance, no-action letters or interpretation, instead of through notice and comment rulemaking; and
- Reviewing the roles, responsibilities and capabilities of self-regulatory organizations (SROs) and making recommendations for improvements.
Additional recommendations in the report include:
- Improving the oversight of financial market utilities (FMUs), such as by FSOC continuing to study the role FMUs play in the financial system, and regulators considering appropriate risk management for FMUs in order to avoid taxpayer-funded bailouts;
- Repealing Section 1502, 1503, 1504 and 953(b) of the Dodd-Frank Act;
- Investigating how to reduce costs of securities litigation for issuers with the goal of protecting all investors’ rights and interests;
- Increasing the amount that can be raised in a crowdfunding offering from $1 million to $5 million;
- Examining the impact of Basel III capital standards on secondary market activity in securitized products; and
- Advancing U.S. interests and promoting a level playing field in the international financial regulatory structure.
To view the fact sheet click here
Chatting corporate greed with Mr. Monopoly, hero of the Equifax Senate hearing ...
Click title for link: https://techcrunch.com/.../the-monopoly-man-interview-equifax-forced-arbitration/
From the article:
TechCrunch spoke to the mysterious Monopoly man, now identified as Amanda Werner of advocacy group Public Citizen, about the cause behind the Senate appearance. (As the author I must disclose that Werner is in fact a friend and honestly this is the best thing I’ve ever seen.)
Click title for link: https://techcrunch.com/.../the-monopoly-man-interview-equifax-forced-arbitration/
From the article:
TechCrunch spoke to the mysterious Monopoly man, now identified as Amanda Werner of advocacy group Public Citizen, about the cause behind the Senate appearance. (As the author I must disclose that Werner is in fact a friend and honestly this is the best thing I’ve ever seen.)
The argument that regulation won't fix credit reporting agencies, but antitrust enforcement will
Sep. 18, 2017 6:26 PM ET
By Karen Webster
Author's Summary
We don't need more regulation.
What we need is competition.
We have the pieces and players in place to create a competitive playing field, we just need policymakers to let them play.
Excerpts:
Nowhere is outrage more deafening than the halls of Congress, where member after member now demands that executive heads at Equifax be placed on chopping blocks and massive regulatory changes across the credit reporting industry be made. Senator Elizabeth Warren (D - Mass.) has strongly hinted that the agency she birthed in 2008 and opened for business in 2011 - the Consumer Financial Protection Bureau (CFPB) - should be given the authority to do even more. The credit bureaus were included in the CFPB's scope of oversight in 2012, and she's asked the agency to let her know what additional power it might need to better regulate the credit reporting agenciesgoing forward.
But why now, just this week, is everyone so outraged and so willing to talk tough about the credit reporting agencies in the name of consumer harm?
Here's a theory.
Consumers have been complaining bitterly about credit reporting agency practices for decades. More recently, their complaints have been made more transparent, thanks to the CFPB's consumer complaint database. But as consumer complaints about those agencies have escalated over the years, policymakers have seemed happy to let the Big Three run fast and loose. Government agencies, like the FHA, Fannie Mae and Freddie Mac require a minimum FICO score to qualify for a loan, and 90 percent of mortgage lendersuse FICO scores to do the same. FICO scores are based on a credit scoring model using data from one of The Big Three agencies - Equifax, TransUnionand Experian.
As a consequence, we have three credit reporting agencies operating today which are largely free to do whatever they want with the data they have - consumer complaint database be damned.
The Big Three sell that data to anyone who'll pay for it, adding to their multibillion-dollar annual revenue streams.
They keep how they collect all the data they have on consumers a secret, locked inside an opaque black box that consumers have to pay to open if they want to see inside more than once a year.
And, in the case of Equifax, they make that consumer data vulnerable to compromise - an egregious lapse in security for a company that is, above all, an information and data repository.
All of this happened because the Big Three operate in an environment with political barriers to entry so steep - given the many agency requirements to use a FICO score and how reliant most lenders are on using it - that it's largely impossible for viable competition to emerge, challenge them and get scale.
There aren't many markets where consumers actually have little to no other choice, but this is one of them.
***
[A]mendments to the FCRA gave consumers the right to get their credit report for free once a year, to remove inaccurate and certain derogatory information and to limit who can access their data.
The credit score itself, the FICO score, was an innovation brought to market in 1989 by the Fair Isaac Corporation. Their software models created each score based on the data that the credit reporting agencies reported to them. Credit reporting agencies got their data from lenders. FICO's innovation was to use software and algorithms to create a standard and consistently calculated measure of creditworthiness so that lenders could more reliably make decisions about the creditworthiness of each potential borrower.
So, What's the Problem?
Given the changes in regulatory oversight, in theory, one might think that consumers should all be living happily ever after today.
They are not.
Since 2012, the CFPB's consumer complaint database has collected 1.1 million complaints across a wide variety of financial services issues. Its February 2017 report, posted on its website, highlighted credit reporting complaints.
That report noted that of the 1.1 million complaints it's received, 185,717 of them were about credit reporting agency practices - about 18 percent of all consumer complaints. Another 12 percent of complaints had to do with debt collection agency practices.
Maybe you think that doesn't sound so bad. Not even 20 percent of consumers have a beef with the Big Three. Peeling back that onion tells a different story, however.
The CFPB reported that the average number of monthly complaints received about credit reporting issues was 3,523. In February 2017, that number was up 24 percent to 4,620. Only complaints about mortgages (4,193) and debt collectors (6,904) topped it that month. They also reported that complaints about credit reporting agencies and debt collectors were consistently ranked in the top three, month after month.
The CFPB's complaint database also tracked the companies with the highest number of complaints. The February report showed Wells Fargo (NYSE:WFC) in the lead, followed by Equifax, TransUnion and Experian in that order. Equifax and the other credit reporting agencies were consistently among the top five.
Roughly 143,000 of the consumer complaints about the credit reporting agencies - or 77 percent - were about inaccurate data showing up on their credit reports. That inaccurate data ran the gamut from data that was wrong, wasn't expunged, corrected or updated as requested, data about other consumers that wasn't supposed to be on their reports and requests to access their credit reports from companies they didn't recognize.
The rest of the complaints were related to customer service issues, including excessive wait times to speak with a customer service representative, not having updated information corrected in a timely fashion and difficulty understanding what was needed to correct an error on their report that the agencies had made.
Listening with Only Half an Ear
In January of 2017, the CFPB fined TransUnion and Equifax $23 million over marketing schemes that lured consumers into paying monthly subscription fees for access to their credit reports. In Equifax's case, that included giving consumers "free" access to their data only after they watched an ad (for which Equifax was being paid money by an advertiser). The fine was mostly consumer restitution, with a small piece paid in penalties to the CFPB.
In March of 2013, Experian was fined $3 million for a variation on that same theme.
All fines levied and all of the complaints logged were over practices that the FCRA prohibited The Big Three from doing: making it hard for consumers to access their credit reports and making it difficult for consumers to correct information that the credit reporting agencies had wrong.
Not getting that information right has consequences that are far greater to consumers than the fines the credit reporting agencies have to pay. Bad data can make getting credit impossible or extremely costly for consumers. An FTC study reports that one in five consumers has an error on a report, and those errors will cost one in 20 of those consumers in the form of higher interest and carrying costs on their loans.
Meanwhile, the Big Three credit reporting agencies have little incentive to care.
Why should they work hard to satisfy the consumer when they have a virtual lock on the data that stands between a consumer and her loan, as long as a FICO score is required to get it? Why make their process transparent to consumers or bust a gut to get things corrected when there's no competitor operating at or near scale nipping at their heels to force them to step up their game?
And, it's a drop in the bucket for these multibillion-dollar monopolists to get a superficial slap on the wrist and microscopic fines when there's no existential reason for them to change their business practices.
The great irony here is that consumers have been complaining about credit reporting agencies for decades.
It was their complaints 50-plus years ago that led to the creation of the FCRA in 1970 - after 10 years of consumer advocates raising alarm bells.
And it's been transparent to policymakers since 2012, when there became a source of truth called the CFPB consumer complaint database, that credit reporting agencies are one of the top three places that consumers say they consistently feel the most pain.
Instead, policymakers have doubled down on advocating wholesale changes in how prepaid cards, payday lending and arbitration rules work today - topics that are consistently lower on the list of consumer pain points.
***
But here we are - the most horrific breach of highly sensitive consumer data ever recorded in the U.S., the OPM hack notwithstanding - with policymakers focused on how to regulate these three monopolists within an inch of their lives instead of focusing on the much bigger problem.
We don't need more regulation. After all, the Big Three were regulated by the CFPB and the FTC, and look where that got us.
What we need is competition.
Figuring out how to make credit reporting competitive - where consumers actually have a voice to discipline credit reporting agencies that provide bad service, no innovation and risky behavior - and giving lenders options that would foster a more dynamic marketplace won't be easy, but that's what policymakers, and others, should be working to solve.
We have the pieces and players in place to create a competitive playing field, we just need policymakers to let them play.
The full article is at https://seekingalpha.com/article/4107777-regulation-fix-credit-reporting-agencies?page=2 (free registration required)
Don Allen Resnikoff Editor's comment: In a reseller's suit against Equifax alleging overcharging, an appellate court pointed out that federal regulation can provide a defense:
[T]o the extent that CBC alleges an impact on the Mortgage Lender Market, the federal regulations are the more likely basis for any putative injury, and not any specifically anticompetitive conduct on the part of Equifax. No cognizable antitrust injury exists where the alleged injury is a “byproduct of the regulatory scheme” or federal law rather than of the defendant's business practices. RSA Media, Inc. v. AK Media Group, Inc., 260 F.3d 10, 13, 15 (1st Cir.2001); see Standfacts Credit Servs. v. Experian Info. Solutions, Inc., 294 Fed.Appx. 271, 272 (9th Cir.2008) (holding that even where the NCRA defendants held “monopoly power in the wholesale market,” plaintiff resellers could not succeed on their antitrust claims where the monopoly power derived from federal requirements and not anticompetitive conduct).
United States Court of Appeals,Sixth Circuit. CBC COMPANIES, INC.; CBC Innovis, Inc., Plaintiffs-Appellants, v. EQUIFAX, INC.; Equifax Information Services LLC, Defendants-Appellees. No. 08-3261. Decided: April 02, 2009. Available on line at http://caselaw.findlaw.com/us-6th-circuit/1073757.html
Sep. 18, 2017 6:26 PM ET
By Karen Webster
Author's Summary
We don't need more regulation.
What we need is competition.
We have the pieces and players in place to create a competitive playing field, we just need policymakers to let them play.
Excerpts:
Nowhere is outrage more deafening than the halls of Congress, where member after member now demands that executive heads at Equifax be placed on chopping blocks and massive regulatory changes across the credit reporting industry be made. Senator Elizabeth Warren (D - Mass.) has strongly hinted that the agency she birthed in 2008 and opened for business in 2011 - the Consumer Financial Protection Bureau (CFPB) - should be given the authority to do even more. The credit bureaus were included in the CFPB's scope of oversight in 2012, and she's asked the agency to let her know what additional power it might need to better regulate the credit reporting agenciesgoing forward.
But why now, just this week, is everyone so outraged and so willing to talk tough about the credit reporting agencies in the name of consumer harm?
Here's a theory.
Consumers have been complaining bitterly about credit reporting agency practices for decades. More recently, their complaints have been made more transparent, thanks to the CFPB's consumer complaint database. But as consumer complaints about those agencies have escalated over the years, policymakers have seemed happy to let the Big Three run fast and loose. Government agencies, like the FHA, Fannie Mae and Freddie Mac require a minimum FICO score to qualify for a loan, and 90 percent of mortgage lendersuse FICO scores to do the same. FICO scores are based on a credit scoring model using data from one of The Big Three agencies - Equifax, TransUnionand Experian.
As a consequence, we have three credit reporting agencies operating today which are largely free to do whatever they want with the data they have - consumer complaint database be damned.
The Big Three sell that data to anyone who'll pay for it, adding to their multibillion-dollar annual revenue streams.
They keep how they collect all the data they have on consumers a secret, locked inside an opaque black box that consumers have to pay to open if they want to see inside more than once a year.
And, in the case of Equifax, they make that consumer data vulnerable to compromise - an egregious lapse in security for a company that is, above all, an information and data repository.
All of this happened because the Big Three operate in an environment with political barriers to entry so steep - given the many agency requirements to use a FICO score and how reliant most lenders are on using it - that it's largely impossible for viable competition to emerge, challenge them and get scale.
There aren't many markets where consumers actually have little to no other choice, but this is one of them.
***
[A]mendments to the FCRA gave consumers the right to get their credit report for free once a year, to remove inaccurate and certain derogatory information and to limit who can access their data.
The credit score itself, the FICO score, was an innovation brought to market in 1989 by the Fair Isaac Corporation. Their software models created each score based on the data that the credit reporting agencies reported to them. Credit reporting agencies got their data from lenders. FICO's innovation was to use software and algorithms to create a standard and consistently calculated measure of creditworthiness so that lenders could more reliably make decisions about the creditworthiness of each potential borrower.
So, What's the Problem?
Given the changes in regulatory oversight, in theory, one might think that consumers should all be living happily ever after today.
They are not.
Since 2012, the CFPB's consumer complaint database has collected 1.1 million complaints across a wide variety of financial services issues. Its February 2017 report, posted on its website, highlighted credit reporting complaints.
That report noted that of the 1.1 million complaints it's received, 185,717 of them were about credit reporting agency practices - about 18 percent of all consumer complaints. Another 12 percent of complaints had to do with debt collection agency practices.
Maybe you think that doesn't sound so bad. Not even 20 percent of consumers have a beef with the Big Three. Peeling back that onion tells a different story, however.
The CFPB reported that the average number of monthly complaints received about credit reporting issues was 3,523. In February 2017, that number was up 24 percent to 4,620. Only complaints about mortgages (4,193) and debt collectors (6,904) topped it that month. They also reported that complaints about credit reporting agencies and debt collectors were consistently ranked in the top three, month after month.
The CFPB's complaint database also tracked the companies with the highest number of complaints. The February report showed Wells Fargo (NYSE:WFC) in the lead, followed by Equifax, TransUnion and Experian in that order. Equifax and the other credit reporting agencies were consistently among the top five.
Roughly 143,000 of the consumer complaints about the credit reporting agencies - or 77 percent - were about inaccurate data showing up on their credit reports. That inaccurate data ran the gamut from data that was wrong, wasn't expunged, corrected or updated as requested, data about other consumers that wasn't supposed to be on their reports and requests to access their credit reports from companies they didn't recognize.
The rest of the complaints were related to customer service issues, including excessive wait times to speak with a customer service representative, not having updated information corrected in a timely fashion and difficulty understanding what was needed to correct an error on their report that the agencies had made.
Listening with Only Half an Ear
In January of 2017, the CFPB fined TransUnion and Equifax $23 million over marketing schemes that lured consumers into paying monthly subscription fees for access to their credit reports. In Equifax's case, that included giving consumers "free" access to their data only after they watched an ad (for which Equifax was being paid money by an advertiser). The fine was mostly consumer restitution, with a small piece paid in penalties to the CFPB.
In March of 2013, Experian was fined $3 million for a variation on that same theme.
All fines levied and all of the complaints logged were over practices that the FCRA prohibited The Big Three from doing: making it hard for consumers to access their credit reports and making it difficult for consumers to correct information that the credit reporting agencies had wrong.
Not getting that information right has consequences that are far greater to consumers than the fines the credit reporting agencies have to pay. Bad data can make getting credit impossible or extremely costly for consumers. An FTC study reports that one in five consumers has an error on a report, and those errors will cost one in 20 of those consumers in the form of higher interest and carrying costs on their loans.
Meanwhile, the Big Three credit reporting agencies have little incentive to care.
Why should they work hard to satisfy the consumer when they have a virtual lock on the data that stands between a consumer and her loan, as long as a FICO score is required to get it? Why make their process transparent to consumers or bust a gut to get things corrected when there's no competitor operating at or near scale nipping at their heels to force them to step up their game?
And, it's a drop in the bucket for these multibillion-dollar monopolists to get a superficial slap on the wrist and microscopic fines when there's no existential reason for them to change their business practices.
The great irony here is that consumers have been complaining about credit reporting agencies for decades.
It was their complaints 50-plus years ago that led to the creation of the FCRA in 1970 - after 10 years of consumer advocates raising alarm bells.
And it's been transparent to policymakers since 2012, when there became a source of truth called the CFPB consumer complaint database, that credit reporting agencies are one of the top three places that consumers say they consistently feel the most pain.
Instead, policymakers have doubled down on advocating wholesale changes in how prepaid cards, payday lending and arbitration rules work today - topics that are consistently lower on the list of consumer pain points.
***
But here we are - the most horrific breach of highly sensitive consumer data ever recorded in the U.S., the OPM hack notwithstanding - with policymakers focused on how to regulate these three monopolists within an inch of their lives instead of focusing on the much bigger problem.
We don't need more regulation. After all, the Big Three were regulated by the CFPB and the FTC, and look where that got us.
What we need is competition.
Figuring out how to make credit reporting competitive - where consumers actually have a voice to discipline credit reporting agencies that provide bad service, no innovation and risky behavior - and giving lenders options that would foster a more dynamic marketplace won't be easy, but that's what policymakers, and others, should be working to solve.
We have the pieces and players in place to create a competitive playing field, we just need policymakers to let them play.
The full article is at https://seekingalpha.com/article/4107777-regulation-fix-credit-reporting-agencies?page=2 (free registration required)
Don Allen Resnikoff Editor's comment: In a reseller's suit against Equifax alleging overcharging, an appellate court pointed out that federal regulation can provide a defense:
[T]o the extent that CBC alleges an impact on the Mortgage Lender Market, the federal regulations are the more likely basis for any putative injury, and not any specifically anticompetitive conduct on the part of Equifax. No cognizable antitrust injury exists where the alleged injury is a “byproduct of the regulatory scheme” or federal law rather than of the defendant's business practices. RSA Media, Inc. v. AK Media Group, Inc., 260 F.3d 10, 13, 15 (1st Cir.2001); see Standfacts Credit Servs. v. Experian Info. Solutions, Inc., 294 Fed.Appx. 271, 272 (9th Cir.2008) (holding that even where the NCRA defendants held “monopoly power in the wholesale market,” plaintiff resellers could not succeed on their antitrust claims where the monopoly power derived from federal requirements and not anticompetitive conduct).
United States Court of Appeals,Sixth Circuit. CBC COMPANIES, INC.; CBC Innovis, Inc., Plaintiffs-Appellants, v. EQUIFAX, INC.; Equifax Information Services LLC, Defendants-Appellees. No. 08-3261. Decided: April 02, 2009. Available on line at http://caselaw.findlaw.com/us-6th-circuit/1073757.html
As of October 4, what is the lead story on the website of NRA-ILA (National Rifle Association Institute for Legislative Action)? This is it, a screed for knocking out Maryland's law banning detachable magazine fed semi-automatic rifles, and large capacity magazines -- you know, the kind used on October 1 in Las Vegas:
NRA, Others Urge Supreme Court to Review “Assault Weapon,” Magazine Ban - FRIDAY, SEPTEMBER 29, 2017
This month, the United States Supreme Court commenced its October sitting. Among the cases that the Court may decide to review is Kolbe v. Hogan, No. 17-127. The case arises out of a challenge to Maryland’s Firearm Safety Act of 2013, a law banning so-called “assault weapons” like AR-15s and other detachable magazine-fed semi-automatic rifles, and the sale and transfer of magazines capable of holding more than ten rounds.
A three-judge panel of the U.S. Court of Appeals for the Fourth Circuit had initially struck down the law, finding it was “beyond dispute” that the banned firearms and magazines were commonly owned and in common use by law-abiding citizens and thus, based on District of Columbia v. Heller, clearly within the scope of Second Amendment protection. The case was subsequently reargued before a larger panel (an “en banc” appeal).
In a ruling early this year, that panel reversed and upheld Maryland’s law, using an “out-of-context parsing of the Supreme Court’s statement in Heller” that had been rejected as inappropriate by the earlier decision. Citing language in Heller on “dangerous and unusual weapons” (“weapons that are most useful in military service—M-16 rifles and the like”), the en banc court crafted a new constitutional test that is unsupported both legally and factually: that the banned semi-automatic rifles and large-capacity magazines are “like” M-16 rifles and other military weapons, and as such, are not constitutionally protected at all.
Maryland Attorney General Brian E. Frosh, who wrote and ensured the passage of the challenged law as part of his continuing campaign for ever more stringent gun control in the state, applauded this new ruling, commenting that it “is unthinkable that these weapons of war …would be protected by the 2nd Amendment.”
The NRA has filed an amicus brief in support of the plaintiffs’ petition seeking the Supreme Court’s review of the case. The brief contends that the decision not only contradicts Heller – that arms in common use for lawful purposes are protected by the Second Amendment and cannot be subject to an outright ban – but that the factual underpinnings of the ruling are fundamentally incorrect.
Heller’s standard for identifying the “arms” protected by the Second Amendment excludes those “not typically possessed by law-abiding citizens for lawful purposes” and “highly unusual in society at large.” In this analysis, it is the choices of citizens that are determinative, and not those of legislatures or government officials. “Millions of Americans own millions of” these banned firearms and magazines.
A standard manufacturer-supplied magazine generally holds more than ten rounds, and Americans own approximately 75 million “large capacity” magazines, representing about half of all magazines owned in the United States.
The AR-15 banned under the law is the “most popular centerfire semiautomatic rifle in the United States.” Under Heller, that is all that is needed for citizens to keep such firearms under the Second Amendment.
Further, equating these typical arms to military weapons, those “that are unquestionably most useful in military service,” is demonstrably wrong. Earlier Supreme Court precedent recognized the AR-15 rifle, “the paradigmatic type of firearm that Maryland seeks to ban,” is a “civilian” rifle distinct from an M-16. More generally, as another brief notes, the “semiautomatic rifles banned by Maryland are not the main military rifle of any country on earth.” Such guns are neither functionally equivalent to M-16s, nor more lethal or dangerous.
The inherent folly of the Fourth Circuit’s decision is that it not only subverts the Second Amendment, the test it imposes (“like” M-16s or “useful in military service”) is staggeringly overbroad: any firearm that fires a projectile from a barrel by the action of an explosive stands to be banned because it is “like” a military rifle or “useful” in warfare.
The brief mentions a greater concern, the urgent need to address the cumulative effect of decisions like this one. In the almost ten years since Heller was decided, lower courts continue to distort or disregard Supreme Court precedents on the Second Amendment to the detriment of law-abiding gun owners. “The result is a steady erosion of the fundamental right to keep and bear arms. … In no other context would such a widespread, overt, and severe entrenchment upon constitutional rights be tolerated.”
Besides the NRA, a diverse range of other interested parties have filed briefs asking the Court to take up this appeal and invalidate the Maryland decision, among them 21 state Attorneys General, over 30 national and international law enforcement groups and local firearm rights groups, and many others.
In order for the U.S. Supreme Court to hear a case, four out of nine justices must agree that the case merits an appeal. The Court has not yet decided on whether to hear the appeal in this important case, but your NRA-ILA will post updates on this case as they occur.
Posted by Don Allen Resnikoff with this editorial comment: The NRA-ILA should be ashamed, but they are not. The 21 State AGs that filed on the side of the NRA include Nevada. Maybe they should reconsider.
From "Rules at Risk" --
Forced Arbitration Is a ‘Get-Out-of-Jail-Free’ Card for Banks That Cheat Customers
Public Citizen, Americans for Financial Reform and Allies Deliver Monopoly-Inspired ‘Community Cheat’ Card to All 100 Senate Offices -- Oct. 3, 2017
Public Citizen, Americans for Financial Reform and their allies are defending limits on forced arbitration from congressional attack with a special delivery to all 100 U.S. Senate offices: a mock “Get-Out-of-Jail-Free” card for the banks inspired by the board game Monopoly. An activist dressed as the billionaire Monopoly Man led the delivery.
The Senate leadership is pushing to roll back the U.S. Consumer Financial Protection Bureau’s arbitration rule using the Congressional Review Act’s (CRA) expedited process and has until early November to act. The rule allows consumers to join together in class actions to challenge wrongdoing in court. Widespread wrongdoing and negligence at Wells Fargo and Equifax and their attempts to evade legal accountability using forced arbitration “rip-off” clauses have transformed the issue from an obscure regulatory debate into a leading national story.
Forced arbitration clauses buried in the fine print of take-it-or-leave-it contracts may be the single most important tool that predatory banks, payday lenders, credit card companies and other financial institutions have used to escape accountability for cheating and defrauding consumers. These clauses push disputes into secretive arbitration proceedings rigged to favor financial companies and conceal wrongdoing from regulatory authorities. The average consumer forced into arbitration ends up paying more than $7,700 to the bank or lender, according to the Economic Policy Institute.
“Forced arbitration gives companies like Wells Fargo and Equifax a monopoly over our system of justice by blocking consumers’ access to the courts,” said Robert Weissman, president of Public Citizen. “The CRA resolution striking down the arbitration rule is a virtual get-out-of-jail-free card for companies engaged in financial scams. It should not pass go.”
“The CFPB has restored people’s right to take Wall Street banks, payday lenders and other bad financial actors to court if they rip people off and break the law,” said Lisa Donner, executive director of Americans for Financial Reform. “Overturning it would be handing companies like Wells Fargo and Equifax a tall stack of get-out-of-jail-free cards – for use whenever they want.”
“Make no mistake: Arbitration is a rigged game, one that the bank nearly always wins,” said Amanda Werner, arbitration campaign manager for Public Citizen and Americans for Financial Reform. “Shockingly, the average consumer forced to arbitrate with Wells Fargo was ordered to pay the bank nearly $11,000. Bank lobbyists and their allies in Congress are trying to overturn the CFPB’s rule so they can continue to rip off consumers with impunity.”
Forced Arbitration Is a ‘Get-Out-of-Jail-Free’ Card for Banks That Cheat Customers
Public Citizen, Americans for Financial Reform and Allies Deliver Monopoly-Inspired ‘Community Cheat’ Card to All 100 Senate Offices -- Oct. 3, 2017
Public Citizen, Americans for Financial Reform and their allies are defending limits on forced arbitration from congressional attack with a special delivery to all 100 U.S. Senate offices: a mock “Get-Out-of-Jail-Free” card for the banks inspired by the board game Monopoly. An activist dressed as the billionaire Monopoly Man led the delivery.
The Senate leadership is pushing to roll back the U.S. Consumer Financial Protection Bureau’s arbitration rule using the Congressional Review Act’s (CRA) expedited process and has until early November to act. The rule allows consumers to join together in class actions to challenge wrongdoing in court. Widespread wrongdoing and negligence at Wells Fargo and Equifax and their attempts to evade legal accountability using forced arbitration “rip-off” clauses have transformed the issue from an obscure regulatory debate into a leading national story.
Forced arbitration clauses buried in the fine print of take-it-or-leave-it contracts may be the single most important tool that predatory banks, payday lenders, credit card companies and other financial institutions have used to escape accountability for cheating and defrauding consumers. These clauses push disputes into secretive arbitration proceedings rigged to favor financial companies and conceal wrongdoing from regulatory authorities. The average consumer forced into arbitration ends up paying more than $7,700 to the bank or lender, according to the Economic Policy Institute.
“Forced arbitration gives companies like Wells Fargo and Equifax a monopoly over our system of justice by blocking consumers’ access to the courts,” said Robert Weissman, president of Public Citizen. “The CRA resolution striking down the arbitration rule is a virtual get-out-of-jail-free card for companies engaged in financial scams. It should not pass go.”
“The CFPB has restored people’s right to take Wall Street banks, payday lenders and other bad financial actors to court if they rip people off and break the law,” said Lisa Donner, executive director of Americans for Financial Reform. “Overturning it would be handing companies like Wells Fargo and Equifax a tall stack of get-out-of-jail-free cards – for use whenever they want.”
“Make no mistake: Arbitration is a rigged game, one that the bank nearly always wins,” said Amanda Werner, arbitration campaign manager for Public Citizen and Americans for Financial Reform. “Shockingly, the average consumer forced to arbitrate with Wells Fargo was ordered to pay the bank nearly $11,000. Bank lobbyists and their allies in Congress are trying to overturn the CFPB’s rule so they can continue to rip off consumers with impunity.”
AAI, FWW, and NFU Say Monsanto-Bayer Merger Raises Competitive Concerns Over Traits-Seeds-Chemicals Platforms, Digital Farming, and Strategic Competitive Use of Farm Data
AAI, FWW, and NFU sent a joint letter to the U.S. Department of Justice regarding the proposed merger of Monsanto and Bayer. The joint letter is an addendum to a letter submitted by the three organizations on July 26th. It discusses the merger's potential to enhance the ability and incentive for Monsanto and Bayer to integrate traits, seeds, and chemicals into proprietary systems or platforms that are closed to competition. The companies' combined digital farming capabilities will likely facilitate such integration. Together with strengthened incentives for the appropriation and strategic competitive use of vast stores of farm data, these merger- related concerns have potentially adverse implications for competition, farmers, and consumers.
Media Contact:
Diana L. Moss
President, American Antitrust Institute
[email protected]
AAI, FWW, and NFU sent a joint letter to the U.S. Department of Justice regarding the proposed merger of Monsanto and Bayer. The joint letter is an addendum to a letter submitted by the three organizations on July 26th. It discusses the merger's potential to enhance the ability and incentive for Monsanto and Bayer to integrate traits, seeds, and chemicals into proprietary systems or platforms that are closed to competition. The companies' combined digital farming capabilities will likely facilitate such integration. Together with strengthened incentives for the appropriation and strategic competitive use of vast stores of farm data, these merger- related concerns have potentially adverse implications for competition, farmers, and consumers.
Media Contact:
Diana L. Moss
President, American Antitrust Institute
[email protected]
The California debate about Bar exam pass/fail standards: who is in charge?
Actually, the California Supreme Court has made it clear that it is in charge, and that the State Bar's role is advisory.
The ABA Journal reports that traditionally, the cut score on the Bar's admission exam is set by the state’s bar exam committee, but in July the California Supreme Court amended the rule, asserting its own authority to determine the score, and directed the state bar, which is the administrative arm of the court, to study the issue. Rather than take a position on the issue, the bar’s board of trustees on Sept. 6 voted 6-5 to send the court three options—keep the score at 1440, where it’s been since 1986, lower the score to 1414 or lower it to 1390.The California Supreme Court's decision on pass/fail Bar exam standards is thought to be imminent.
The California Supreme Court's assertion of its authority over Bar exam test scores sets a precedent for its taking authority over other issues where the State Bar is perceived as pursuing goals that do not serve the general public's interests.
Posting by Don Allen Resnikoff
Actually, the California Supreme Court has made it clear that it is in charge, and that the State Bar's role is advisory.
The ABA Journal reports that traditionally, the cut score on the Bar's admission exam is set by the state’s bar exam committee, but in July the California Supreme Court amended the rule, asserting its own authority to determine the score, and directed the state bar, which is the administrative arm of the court, to study the issue. Rather than take a position on the issue, the bar’s board of trustees on Sept. 6 voted 6-5 to send the court three options—keep the score at 1440, where it’s been since 1986, lower the score to 1414 or lower it to 1390.The California Supreme Court's decision on pass/fail Bar exam standards is thought to be imminent.
The California Supreme Court's assertion of its authority over Bar exam test scores sets a precedent for its taking authority over other issues where the State Bar is perceived as pursuing goals that do not serve the general public's interests.
Posting by Don Allen Resnikoff
Text of financial industry lawsuit Complaint in Texas federal court challenging the Consumer Financial Protection Bureau’s final arbitration rule
The U.S. Chamber of Commerce, American Bankers Association, the Consumer Bankers Association, Financial Services Roundtable, American Financial Services Association, Texas Association of Business, Texas Bankers Association, and nine chambers of commerce located throughout Texas today filed a lawsuit in Texas federal court challenging the Consumer Financial Protection Bureau’s final arbitration rule.
The lawsuit seeks to stay implementation of the arbitration rule, a declaration that it is unlawful and other relief. The case has been assigned to Judge Sidney A. Fitzwater, U.S. District Court for the Northern District of Texas (Dallas).
The Complaint can be seen at https://www.consumerfinancemonitor.com/wp-content/uploads/sites/14/2017/09/Complaint-for-Declaratory-and-Injunctive-Relief-Chamber-of-Commerce-v-CF....pdf
Credit: Ballard Spahr news
The U.S. Chamber of Commerce, American Bankers Association, the Consumer Bankers Association, Financial Services Roundtable, American Financial Services Association, Texas Association of Business, Texas Bankers Association, and nine chambers of commerce located throughout Texas today filed a lawsuit in Texas federal court challenging the Consumer Financial Protection Bureau’s final arbitration rule.
The lawsuit seeks to stay implementation of the arbitration rule, a declaration that it is unlawful and other relief. The case has been assigned to Judge Sidney A. Fitzwater, U.S. District Court for the Northern District of Texas (Dallas).
The Complaint can be seen at https://www.consumerfinancemonitor.com/wp-content/uploads/sites/14/2017/09/Complaint-for-Declaratory-and-Injunctive-Relief-Chamber-of-Commerce-v-CF....pdf
Credit: Ballard Spahr news
Klobuchar Legislation to Modernize Antitrust Enforcement
On September 14, Ranking Member of the Senate Judiciary Antitrust Subcommittee, Klobuchar introduced the Merger Enforcement Improvement Act to update and strengthen important merger enforcement tools
From the press release: Antitrust enforcement agencies need adequate tools and resources to address the threat of economic concentration, promote competition, and protect consumers. The Merger Enforcement Improvement Act would update those existing laws to reflect the current economy and provide agencies with better information post-merger to ensure that merger enforcement is meeting its goals.
To see the press release click the title or go to: https://www.klobuchar.senate.gov/public/index.cfm/news-releases?ID=7F1EC9A3-5D28-4757-9F60-8CEAD9111971
On September 14, Ranking Member of the Senate Judiciary Antitrust Subcommittee, Klobuchar introduced the Merger Enforcement Improvement Act to update and strengthen important merger enforcement tools
From the press release: Antitrust enforcement agencies need adequate tools and resources to address the threat of economic concentration, promote competition, and protect consumers. The Merger Enforcement Improvement Act would update those existing laws to reflect the current economy and provide agencies with better information post-merger to ensure that merger enforcement is meeting its goals.
To see the press release click the title or go to: https://www.klobuchar.senate.gov/public/index.cfm/news-releases?ID=7F1EC9A3-5D28-4757-9F60-8CEAD9111971
Death by Stun Gun: A Reuters series finds a high number of deaths are caused by police use of supposedly non-lethal Tazer stun guns
In the most detailed study ever of fatalities and litigation involving police use of stun guns, Reuters finds more than 150 autopsy reports citing Tasers as a cause or contributor to deaths across America. Behind the fatalities is a sobering reality: Many who die are among society’s vulnerable – unarmed, in psychological distress and seeking help.
See https://www.reuters.com/investigates/special-report/usa-taser-911/
A PBS Weekend Newshour interview of an author of the Reuters series is here: http://www.pbs.org/newshour/bb/police-killed-1000-people-tasers-since-2000/
In the most detailed study ever of fatalities and litigation involving police use of stun guns, Reuters finds more than 150 autopsy reports citing Tasers as a cause or contributor to deaths across America. Behind the fatalities is a sobering reality: Many who die are among society’s vulnerable – unarmed, in psychological distress and seeking help.
See https://www.reuters.com/investigates/special-report/usa-taser-911/
A PBS Weekend Newshour interview of an author of the Reuters series is here: http://www.pbs.org/newshour/bb/police-killed-1000-people-tasers-since-2000/
More from Public Citizen's Paul Alan Levy on litigation over the search warrant to DreamHost concerning anonymous internet protesters:
Response to Trump Prosecutors’ Effort to Attack Peaceful Protests
Posted: 22 Sep 2017 04:26 PM PDT
by Paul Alan Levy
In my blog post yesterday about developments in the litigation over the search warrant to DreamHost, I recounted the encouraging signs from DC Superior Court Chief Judge Morin’s written order and colloquys with counsel during oral argument at a hearing this week about his determination to protect the privacy rights of anonymous Internet users who communicated with the Trump inauguration protest web site, or who provided their names to activists so that they could receive updates from that web site. At the hearing, as readers can see from the hearing transcript that I linked from the blog post, the lawyer who appeared for the Government at that hearing assured the judge that he understood what the judge was demanding and that the Government would comply with the judge’s conditions in a new proposed order.
Just as I was ready to press “publish” on that blog post, the Government submitted its promised proposed order enforcing the warrant. I confess that I was horrified: that proposal was so far from what Judge Morin said he wanted, and so far from what Government counsel said he would deliver, that I was left wondering whether the problem is that the Trump Administration is represented in this case by a disingenuous lawyer, or whether the problem is that the new proposed order was prepared by other lawyers who were not at the hearing and also did not review the transcript of the hearing (which was not ready until very late yesterday afternoon). The proposed order is unsigned.
Today, meeting the judge's timetable that responses be filed within twenty-four hours, we submitted our response on behalf of the intervenors, including both a brief explaining what parts of the government’s proposal we dispute, and how we would revise that proposal, as well as a markup of the proposed order that attempts to be true to Judge Morin’s rulings, even ones with which we disagreed (although at the same time we ask the judge to revisit one very significant issue). DreamHost has also filed a response to the Government’s proposal.
Given the lateness of the hour, I leave it to readers to review the papers submitted by both sides and see whether they share our concern at the continued efforts of the Trump Administration to invade the political discussions of the vast majority of Trump opponents whose response to his election remained entirely peaceful, basically taking advantage of the foolishness of a small number of individuals who carried out a riot during the inauguration and, according to an undercover police officer, deliberately planned to riot.
This is a president who has no tolerance for dissent, and we shall all have to be on our guard against the misuse of the judicial process to oppress his opponents. We must hope that Judge Morin will persist in holding the prosecutors to the First Amendment protections that he has enunciated to date.
Response to Trump Prosecutors’ Effort to Attack Peaceful Protests
Posted: 22 Sep 2017 04:26 PM PDT
by Paul Alan Levy
In my blog post yesterday about developments in the litigation over the search warrant to DreamHost, I recounted the encouraging signs from DC Superior Court Chief Judge Morin’s written order and colloquys with counsel during oral argument at a hearing this week about his determination to protect the privacy rights of anonymous Internet users who communicated with the Trump inauguration protest web site, or who provided their names to activists so that they could receive updates from that web site. At the hearing, as readers can see from the hearing transcript that I linked from the blog post, the lawyer who appeared for the Government at that hearing assured the judge that he understood what the judge was demanding and that the Government would comply with the judge’s conditions in a new proposed order.
Just as I was ready to press “publish” on that blog post, the Government submitted its promised proposed order enforcing the warrant. I confess that I was horrified: that proposal was so far from what Judge Morin said he wanted, and so far from what Government counsel said he would deliver, that I was left wondering whether the problem is that the Trump Administration is represented in this case by a disingenuous lawyer, or whether the problem is that the new proposed order was prepared by other lawyers who were not at the hearing and also did not review the transcript of the hearing (which was not ready until very late yesterday afternoon). The proposed order is unsigned.
Today, meeting the judge's timetable that responses be filed within twenty-four hours, we submitted our response on behalf of the intervenors, including both a brief explaining what parts of the government’s proposal we dispute, and how we would revise that proposal, as well as a markup of the proposed order that attempts to be true to Judge Morin’s rulings, even ones with which we disagreed (although at the same time we ask the judge to revisit one very significant issue). DreamHost has also filed a response to the Government’s proposal.
Given the lateness of the hour, I leave it to readers to review the papers submitted by both sides and see whether they share our concern at the continued efforts of the Trump Administration to invade the political discussions of the vast majority of Trump opponents whose response to his election remained entirely peaceful, basically taking advantage of the foolishness of a small number of individuals who carried out a riot during the inauguration and, according to an undercover police officer, deliberately planned to riot.
This is a president who has no tolerance for dissent, and we shall all have to be on our guard against the misuse of the judicial process to oppress his opponents. We must hope that Judge Morin will persist in holding the prosecutors to the First Amendment protections that he has enunciated to date.
The Globe and Mail Reviews Franklin Foer's book "World Without Mind"
Excerpt: [Foer] makes the trenchant point that, while our antitrust laws are thought of as saving the public from monopolies that would worsen the consumer experience, "some of the biggest corporations in America now give their products away for free … " and so we begin to think that monopolies don't need to be broken apart any more. (Foer points out that the Obama administration brought forward only two cases against existing monopolies.) We need a new approach to antitrust law, one with a different end in mind: a mission of preserving a competitive thought economy where new ideas, strategies and approaches are allowed to have their day. The alternative, argues Foer, is an Orwellian morass controlled by a handful of thought authorities.
See: https://beta.theglobeandmail.com/arts/books-and-media/book-reviews/review-franklin-foers-world-without-mind-explores-the-dangers-of-tech-monopolies/article36363670/?ref=http://www.theglobeandmail.com&
Don Allen Resnikoff comment: Foer is the latest in a series of authors who reach out to a broad popular audience with an appeal for antitrust reform. Earlier champions include, for example, Johnson and Kwak "13 Bankers," Wenonahi Hauter "Foodopoly," Barry Lynn "Cornered," among others. These authors deserve credit for keeping alive a public debate of antitrust issues. But heavy lifting remains to accomplish antitrust reform, hopefully including participation from people with antitrust enforcement experience and expertise. DAR
Excerpt: [Foer] makes the trenchant point that, while our antitrust laws are thought of as saving the public from monopolies that would worsen the consumer experience, "some of the biggest corporations in America now give their products away for free … " and so we begin to think that monopolies don't need to be broken apart any more. (Foer points out that the Obama administration brought forward only two cases against existing monopolies.) We need a new approach to antitrust law, one with a different end in mind: a mission of preserving a competitive thought economy where new ideas, strategies and approaches are allowed to have their day. The alternative, argues Foer, is an Orwellian morass controlled by a handful of thought authorities.
See: https://beta.theglobeandmail.com/arts/books-and-media/book-reviews/review-franklin-foers-world-without-mind-explores-the-dangers-of-tech-monopolies/article36363670/?ref=http://www.theglobeandmail.com&
Don Allen Resnikoff comment: Foer is the latest in a series of authors who reach out to a broad popular audience with an appeal for antitrust reform. Earlier champions include, for example, Johnson and Kwak "13 Bankers," Wenonahi Hauter "Foodopoly," Barry Lynn "Cornered," among others. These authors deserve credit for keeping alive a public debate of antitrust issues. But heavy lifting remains to accomplish antitrust reform, hopefully including participation from people with antitrust enforcement experience and expertise. DAR
Gab sues Google for antitrust violations
Gab, has filed a lawsuit in a federal court accusing Google of abusing its power after the search giant removed the upstart from its app store.
See http://competitionpolicyinternational.us2.list-manage.com/track/click?u=66710f1b2f6afb55512135556&id=d25d98efc2&e=c9725fdc15
Gab, has filed a lawsuit in a federal court accusing Google of abusing its power after the search giant removed the upstart from its app store.
See http://competitionpolicyinternational.us2.list-manage.com/track/click?u=66710f1b2f6afb55512135556&id=d25d98efc2&e=c9725fdc15
From Maryland Consumer Rights Coalition: The result of using non-driving related factors to price auto insurance? Economic discrimination.
MCRC’s research, as well as that of national partners including the Consumer Federation of America and Consumer Reports, has found that the use of non-driving related factors results in perverse outcomes including:
MCRC’s research, as well as that of national partners including the Consumer Federation of America and Consumer Reports, has found that the use of non-driving related factors results in perverse outcomes including:
- Maryland insurance companies that use sex as a factor charge women between $450-$500 more simply for being a woman;
- Single women pay 24% more for car insurance because they are single women; single men often get a discount and thus pay an average of 0.8% more for being single.
- A driver living in Roland Park with two at-fault accidents would pay $215 less than a driver with a perfect record living in Park Heights.
- A driver with a high school degree would pay $300 more than the same driver with a college degree
- 2017 statistical analysis has found the more African-Americans that live in a zip code, the higher the cost of insurance (at a statistically significant level). The analysis also found that the the wealthier the neighborhood, the less the residents of the neighborhood would pay in insurance (also statistically significant).
CFPB can pursue Maryland lawsuit over sale of settlement payments - ruling
by Dena Aubin
The Consumer Financial Protection Bureau can proceed with a lawsuit against Access Funding, a Maryland company accused of misleading consumers into signing away legal settlement payments in exchange for marked-down lump sums, a federal judge ruled.
In a decision on Wednesday, U.S. District Judge Frederick Motz rejected a motion to dismiss claims that Access Funding violated the Consumer Financial Protection Act (CFPA), saying the CFPB adequately alleged that the company engaged in abusive practices to cash in on consumers’ income streams.
To read the full story on Westlaw Practitioner Insights, click here: bit.ly/2juTPX
by Dena Aubin
The Consumer Financial Protection Bureau can proceed with a lawsuit against Access Funding, a Maryland company accused of misleading consumers into signing away legal settlement payments in exchange for marked-down lump sums, a federal judge ruled.
In a decision on Wednesday, U.S. District Judge Frederick Motz rejected a motion to dismiss claims that Access Funding violated the Consumer Financial Protection Act (CFPA), saying the CFPB adequately alleged that the company engaged in abusive practices to cash in on consumers’ income streams.
To read the full story on Westlaw Practitioner Insights, click here: bit.ly/2juTPX
On big oil refiner control of retail prices
A case decided by the United States District Court for the District of New Jersey in 2016 refused dismissal of a dealer action against ExxonMobil based on alleged ExxonMobil control over retail pricing. Relevant law includes the the New Jersey Franchise Practices Act and the federal Robinson-Patman Act. South Gas, Inc. v. Exxonmobil Oil Corp., 2016 WL 816748 (D.N.J. February 29, 2016). The case decision can be found online at http://cases.justia.com/federal/district-courts/new-jersey/njdce/2:2009cv06236/235720/134/0.pdf?ts=1456860389
An article by New Jersey attorney Jeffrey Goldstone explains that the plaintiff franchisees’ claims in the case focused primarily on Exxon’s pricing practices. The pricing pivoted off of a discriminatory pricing program known as zone pricing. Exxon’s zone pricing scheme divided New Jersey into approximately 100 zones and charged franchisee's retail gas stations different wholesale prices for gas depending on the station’s zone placement. Because Exxon’s zone pricing scheme favored certain stations and disfavored other stations, including the plaintiffs, the franchisees claimed they were forced to charge higher retail prices to cover their operating expenses.
The New Jersey Court's opinion reviews the contracts between ExxonMobil and its franchisees, and catalogues some of the additional ways plaintiffs allege that Exxon exercised price control: "For one, Exxon manipulated delivery load times to benefit from price fluctuations. . . .Prior to drops in price Exxon delivered gas to franchisees, increasing their inventory whether they needed it or not. . . .The complaint also alleges that Exxon exerted control by requiring plaintiffs to purchase and sell volumes of gas that were above the historical averages of gas sold at those stations. . . .The complaint points to a number of provisions of the Agreements that demonstrate Exxon’s control over their businesses. . . ."
The New Jersey decision against ExxonMobil varies from the usual legal analysis which tends to afford any individual company like ExxonMobil great leeway in practices affecting dealers that may affect retail prices. That is true even though it is well understood that zone pricing indicates an ability by the refiner to set higher wholesale prices in some geographic zones even though costs to ExxonMobil or other large refiners are the same as in a lower priced contiguous zone. The FTC explained the point in 1999 while analyzing the then proposed Exxon-Mobil merger:
Exxon, Mobil and their principal competitors (Motiva, BP Amoco, and Sunoco) use delivered pricing and price zones to set DTW prices based on the level of competition in the immediately surrounding area. These DTW prices generally are unrelated to the cost of hauling fuel from the terminal to the retail store. . . . [B]randed companies can and do adjust their DTW prices in order to take advantage of higher prices in some neighborhoods, without having to raise prices throughout a metropolitan area as a whole.
The use of price zones in the manner described above indicates that these competitors set their prices on the basis of their competitors' prices, rather than on the basis of their own costs. This is an earmark of oligopolistic market behavior. . . . The effects of oligopolistic market structures (where firms base their pricing decisions on their rivals' prices, and recognize that their prices affect their sales volume) have been recognized in this industry. . . .We recognize that such interdependent pricing may often produce economic consequences that are comparable to those of classic cartels.
See https://www.federalregister.gov/documents/2000/01/18/00-570/exxon-corp-et-al-analysis-to-aid-public-comment-and-commissioner-statements
Critics of standard antitrust enforcement like Tim Wu think it is high time that oligopoly pricing behavior be prosecuted. Tim Wu has written that it is important to reëxamine how antitrust enforcers and regulators think about concentrated industries. Tim Wu's proposal: "when members of a concentrated industry act in parallel, their conduct should be treated like that of a hypothetical monopoly. . . . [A]busive or anticompetitive conduct shouldn’t get a free pass just because there are three companies involved instead of one." See https://www.newyorker.com/tech/elements/the-oligopoly-problem; also https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1986407
But antitrust prosecution of oil refiner pricing practices like zone pricing is mainly absent, based on the conventional wisdom that in the absence of multi-company collusion it is difficult to challenge as anti-competitive the pricing practices of any particular company.
California has an interesting history of multiple government antitrust investigations of large oil refiners, prompted in part by the fact that unique state-imposed fuel requirements make the California gasoline market one that is in many ways distinct. But frequent California state investigations have never led to a prosecution based on refiner zone-pricing or other similar pricing practices that arguably constrain franchisees from charging low prices. Consumer Watchdog and other consumer groups have complained a lot about the lack of prosecution, but to no avail, as discussed in the article at http://www.sandiegouniontribune.com/business/sdut-california-investigates-oil-industry-price-fixing-2016jul06-story.html
Posting by Don Allen Resnikoff, who takes full responsibility for any expressed opinions
A case decided by the United States District Court for the District of New Jersey in 2016 refused dismissal of a dealer action against ExxonMobil based on alleged ExxonMobil control over retail pricing. Relevant law includes the the New Jersey Franchise Practices Act and the federal Robinson-Patman Act. South Gas, Inc. v. Exxonmobil Oil Corp., 2016 WL 816748 (D.N.J. February 29, 2016). The case decision can be found online at http://cases.justia.com/federal/district-courts/new-jersey/njdce/2:2009cv06236/235720/134/0.pdf?ts=1456860389
An article by New Jersey attorney Jeffrey Goldstone explains that the plaintiff franchisees’ claims in the case focused primarily on Exxon’s pricing practices. The pricing pivoted off of a discriminatory pricing program known as zone pricing. Exxon’s zone pricing scheme divided New Jersey into approximately 100 zones and charged franchisee's retail gas stations different wholesale prices for gas depending on the station’s zone placement. Because Exxon’s zone pricing scheme favored certain stations and disfavored other stations, including the plaintiffs, the franchisees claimed they were forced to charge higher retail prices to cover their operating expenses.
The New Jersey Court's opinion reviews the contracts between ExxonMobil and its franchisees, and catalogues some of the additional ways plaintiffs allege that Exxon exercised price control: "For one, Exxon manipulated delivery load times to benefit from price fluctuations. . . .Prior to drops in price Exxon delivered gas to franchisees, increasing their inventory whether they needed it or not. . . .The complaint also alleges that Exxon exerted control by requiring plaintiffs to purchase and sell volumes of gas that were above the historical averages of gas sold at those stations. . . .The complaint points to a number of provisions of the Agreements that demonstrate Exxon’s control over their businesses. . . ."
The New Jersey decision against ExxonMobil varies from the usual legal analysis which tends to afford any individual company like ExxonMobil great leeway in practices affecting dealers that may affect retail prices. That is true even though it is well understood that zone pricing indicates an ability by the refiner to set higher wholesale prices in some geographic zones even though costs to ExxonMobil or other large refiners are the same as in a lower priced contiguous zone. The FTC explained the point in 1999 while analyzing the then proposed Exxon-Mobil merger:
Exxon, Mobil and their principal competitors (Motiva, BP Amoco, and Sunoco) use delivered pricing and price zones to set DTW prices based on the level of competition in the immediately surrounding area. These DTW prices generally are unrelated to the cost of hauling fuel from the terminal to the retail store. . . . [B]randed companies can and do adjust their DTW prices in order to take advantage of higher prices in some neighborhoods, without having to raise prices throughout a metropolitan area as a whole.
The use of price zones in the manner described above indicates that these competitors set their prices on the basis of their competitors' prices, rather than on the basis of their own costs. This is an earmark of oligopolistic market behavior. . . . The effects of oligopolistic market structures (where firms base their pricing decisions on their rivals' prices, and recognize that their prices affect their sales volume) have been recognized in this industry. . . .We recognize that such interdependent pricing may often produce economic consequences that are comparable to those of classic cartels.
See https://www.federalregister.gov/documents/2000/01/18/00-570/exxon-corp-et-al-analysis-to-aid-public-comment-and-commissioner-statements
Critics of standard antitrust enforcement like Tim Wu think it is high time that oligopoly pricing behavior be prosecuted. Tim Wu has written that it is important to reëxamine how antitrust enforcers and regulators think about concentrated industries. Tim Wu's proposal: "when members of a concentrated industry act in parallel, their conduct should be treated like that of a hypothetical monopoly. . . . [A]busive or anticompetitive conduct shouldn’t get a free pass just because there are three companies involved instead of one." See https://www.newyorker.com/tech/elements/the-oligopoly-problem; also https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1986407
But antitrust prosecution of oil refiner pricing practices like zone pricing is mainly absent, based on the conventional wisdom that in the absence of multi-company collusion it is difficult to challenge as anti-competitive the pricing practices of any particular company.
California has an interesting history of multiple government antitrust investigations of large oil refiners, prompted in part by the fact that unique state-imposed fuel requirements make the California gasoline market one that is in many ways distinct. But frequent California state investigations have never led to a prosecution based on refiner zone-pricing or other similar pricing practices that arguably constrain franchisees from charging low prices. Consumer Watchdog and other consumer groups have complained a lot about the lack of prosecution, but to no avail, as discussed in the article at http://www.sandiegouniontribune.com/business/sdut-california-investigates-oil-industry-price-fixing-2016jul06-story.html
Posting by Don Allen Resnikoff, who takes full responsibility for any expressed opinions
Were you affected by the Equifax data breach? One click could cost you your rights in court
- The credit reporting firm said Thursday it detected a data breach in July that affects 143 million consumers.
- On Friday, Equifax added an opt-out clause to its terms of use, but it still requires arbitration instead of litigation to settle disputes for those who do not opt out.
- Consumer advocates are lashing out at Equifax for requiring arbitration.
NYT editorial on Treasury efforts to gut bank regulation
Excerpt:
The Treasury Department is about to release the second in a series of reports on Dodd-Frank. The first one called for weakening constraints on banks, including loosening restrictions on their traders and backing off how much loss-absorbing capital banks are required to hold.
The next report is expected to propose lighter regulation for financial firms other than banks, by restricting the government’s ability to designate insurance companies, corporate lending subsidiaries and other firms as too big to fail, a label that subjects a company to additional rules and higher capital requirements.
The rollback would be blind to history. Non-banks proved as unstable as banks in the crisis.
To read the editorial in full: https://www.nytimes.com/2017/09/08/opinion/why-the-return-of-bigger-banks-means-bigger-risks-for-everyone-else.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0#story-continues-2
In surprise twist, CFPB arbitration rule racks up allies from the right
By Lorraine Woellert
A group of conservatives is breaking ranks with right-leaning groups to endorse a CFPB rule that prohibits financial companies from forcing customers into arbitration to settle disputes.
The rally from the right could be enough to tip the scales in the Senate, which is weighing S.J. Res. 47 (115) to overturn the bureau rule using the Congressional Review Act. While the House acted swiftly to nullify the CFPB rule, a Senate vote remains too close to call.
A poll released today by the American Future Fund, a super PAC established to support Mitt Romney's bid for president, shows broad support for the arbitration ban in states where moderate Republicans could decide the future of the rule.
In Ohio and Alaska, more than two-thirds of people polled supported the bureau's rule, including a majority of Republicans and people who described themselves as "very conservative," the survey found.
In Louisiana, support for the rule neared 70 percent. In Maine, where Republican Susan Collins boasts strong favorability from liberals and moderates, 65 percent of those polled backed the arbitration rule.
Collins, along with Republicans Lisa Murkowski of Alaska, John Kennedy of Louisiana and Rob Portman of Ohio, hasn't staked out a position on the resolution to overturn the rule.
"The message for Republican senators is be very careful," said Nick Ryan, founder of American Future Fund. "The people are against what the Republican majority did in the House, and they're against it by pretty clear majorities."
The poll was conducted in mid-August by American Viewpoint.
The U.S. Chamber of Commerce is leading a campaign to overturn the rule, which businesses say would line the pockets of trial lawyers while doing little to help consumers. The Chamber's allies include a coalition of small-government conservatives such as Americans for Tax Reform and Heritage Action.
With the poll, American Future Fund joins a number of conservative voices speaking out against the Chamber, including Tea Party Nation founder Judd Phillips; Dean Clancy, former vice president for public policy at FreedomWorks; Colin Hanna of Let Freedom Ring USA; and the American Legion.
In editorials and statements, they've singled out big business as a threat to liberty and the Constitution's Seventh Amendment, which guarantees the right to a jury trial.
"This issue is one that tilts the scales in favor of big banks. It has a big-business-versus-the-common-man feel to it," Ryan said. "It's really a populist issue for us. We shouldn't be doing the bidding of big banks."
To view online:
https://www.politicopro.com/financial-services/story/2017/09/in-surprise-twist-cfpb-arbitration-rule-racks-up-allies-from-the-right-161564
By Lorraine Woellert
A group of conservatives is breaking ranks with right-leaning groups to endorse a CFPB rule that prohibits financial companies from forcing customers into arbitration to settle disputes.
The rally from the right could be enough to tip the scales in the Senate, which is weighing S.J. Res. 47 (115) to overturn the bureau rule using the Congressional Review Act. While the House acted swiftly to nullify the CFPB rule, a Senate vote remains too close to call.
A poll released today by the American Future Fund, a super PAC established to support Mitt Romney's bid for president, shows broad support for the arbitration ban in states where moderate Republicans could decide the future of the rule.
In Ohio and Alaska, more than two-thirds of people polled supported the bureau's rule, including a majority of Republicans and people who described themselves as "very conservative," the survey found.
In Louisiana, support for the rule neared 70 percent. In Maine, where Republican Susan Collins boasts strong favorability from liberals and moderates, 65 percent of those polled backed the arbitration rule.
Collins, along with Republicans Lisa Murkowski of Alaska, John Kennedy of Louisiana and Rob Portman of Ohio, hasn't staked out a position on the resolution to overturn the rule.
"The message for Republican senators is be very careful," said Nick Ryan, founder of American Future Fund. "The people are against what the Republican majority did in the House, and they're against it by pretty clear majorities."
The poll was conducted in mid-August by American Viewpoint.
The U.S. Chamber of Commerce is leading a campaign to overturn the rule, which businesses say would line the pockets of trial lawyers while doing little to help consumers. The Chamber's allies include a coalition of small-government conservatives such as Americans for Tax Reform and Heritage Action.
With the poll, American Future Fund joins a number of conservative voices speaking out against the Chamber, including Tea Party Nation founder Judd Phillips; Dean Clancy, former vice president for public policy at FreedomWorks; Colin Hanna of Let Freedom Ring USA; and the American Legion.
In editorials and statements, they've singled out big business as a threat to liberty and the Constitution's Seventh Amendment, which guarantees the right to a jury trial.
"This issue is one that tilts the scales in favor of big banks. It has a big-business-versus-the-common-man feel to it," Ryan said. "It's really a populist issue for us. We shouldn't be doing the bidding of big banks."
To view online:
https://www.politicopro.com/financial-services/story/2017/09/in-surprise-twist-cfpb-arbitration-rule-racks-up-allies-from-the-right-161564
Trump FTC pick Delrahim promises to avoid political interference from Trump administration
Senator Elizabeth Warren, a Democrat from Massachusetts, met on Wednesday with President Donald Trump's pick to run the Justice Department's Antitrust Division, where she pressed him on political interference in antitrust and lobbying, according to a source familiar with the discussions.
The source did not say if the meeting was sufficient to convince Warren to support Makan Delrahim. She has reportedly put a "hold" on his confirmation to be assistant attorney general.
Delrahim declined comment on the discussions.
At the meeting, Warren pressed Delrahim on how he would respond to any effort by the White House to influence an antitrust decision. As a candidate, Trump said he would oppose AT&T's proposed $85 billion acquisition of Time Warner, owner of CNN and one of the country's largest film and television companies.
Delrahim said in his confirmation hearing in May that on his watch the division's reviews would be free from any political influence
Credit: http://fortune.com/2017/09/06/elizabeth-warren-trump-antitrust-pick/
Senator Elizabeth Warren, a Democrat from Massachusetts, met on Wednesday with President Donald Trump's pick to run the Justice Department's Antitrust Division, where she pressed him on political interference in antitrust and lobbying, according to a source familiar with the discussions.
The source did not say if the meeting was sufficient to convince Warren to support Makan Delrahim. She has reportedly put a "hold" on his confirmation to be assistant attorney general.
Delrahim declined comment on the discussions.
At the meeting, Warren pressed Delrahim on how he would respond to any effort by the White House to influence an antitrust decision. As a candidate, Trump said he would oppose AT&T's proposed $85 billion acquisition of Time Warner, owner of CNN and one of the country's largest film and television companies.
Delrahim said in his confirmation hearing in May that on his watch the division's reviews would be free from any political influence
Credit: http://fortune.com/2017/09/06/elizabeth-warren-trump-antitrust-pick/
Blue States Begin Suing Trump Administration Over Repeal of DACA
POSTED 7:25 AM, SEPTEMBER 6, 2017, BY CNN WIRE
New York Attorney General Eric Schneiderman and Washington state Attorney General Bob Ferguson will announce multi-state legal action on Wednesday, according to separate releases from their offices. On Tuesday, California Attorney General Xavier Becerra also announced he was prepared to sue the Trump administration over DACA.
The backlash was expected. In July, all three officials were part of a 20-state coalition of Democratic or non-affiliated attorneys general that wrote to Trump urging him to preserve DACA, outlining why they believed the program was constitutional and saying they stood ready to defend the program.
The states were responding to an opposite letter from 10 states led by Texas Attorney General Ken Paxton sent in late June, threatening Trump that they’d sue in an unfriendly court if the President didn’t sunset the program by September 5. Tennessee announced last week that it would no longer pursue the lawsuit, but the other nine states remained committed.
POSTED 7:25 AM, SEPTEMBER 6, 2017, BY CNN WIRE
New York Attorney General Eric Schneiderman and Washington state Attorney General Bob Ferguson will announce multi-state legal action on Wednesday, according to separate releases from their offices. On Tuesday, California Attorney General Xavier Becerra also announced he was prepared to sue the Trump administration over DACA.
The backlash was expected. In July, all three officials were part of a 20-state coalition of Democratic or non-affiliated attorneys general that wrote to Trump urging him to preserve DACA, outlining why they believed the program was constitutional and saying they stood ready to defend the program.
The states were responding to an opposite letter from 10 states led by Texas Attorney General Ken Paxton sent in late June, threatening Trump that they’d sue in an unfriendly court if the President didn’t sunset the program by September 5. Tennessee announced last week that it would no longer pursue the lawsuit, but the other nine states remained committed.
Do mandatory arbitration clauses lower the price of consumer financial services and products?
From an article at http://harvardlpr.com/wp-content/uploads/2015/07/9.2_2_Barnes.pdf:
Encouraging the CFPB to study whether mandatory arbitration clauses lower the price of consumer financial services and products, the U.S. Chamber of Commerce wrote “businesses can avoid the higher litigation costs associated with defending claims in court. That enables them to eliminate costs that otherwise would inflate the prices of their products or services” and argued that companies with these clauses “produce savings that they may pass on to consumers through lower prices.” . . . Class action settlements [in 2015] over consumer credit cards provided a unique case study for the agency to look at precisely this issue. In Ross v. Bank of America, consumers sued multiple credit card companies alleging the issuers colluded to include mandatory arbitration clauses and class action bans in their contracts. Four defendants agreed to stop using the arbitration clauses for at least three-and-a-half years as part of a settlement of the case while three non-settling defendants continued using the clauses. The CFPB found no statistically significant evidence that the consumer credit card services prices increased after the Ross settlers jettisoned the arbitration clauses or that companies pass to consumers any supposed savings from the use of mandatory arbitration clauses.
Bank of America has not been using mandatory arbitration clauses (i'm not sure whether that is a direct effect of the Ross case), and has been defendant in a number of class actions. One is the subject of an article by Paul Bland at: http://bit.ly/2wBlw42 Paul Bland reports that there has just been a large settlement against Bank of America which cheated members of the armed forces, in violation of the Serviceman’s Civil Relief Act. The settlement gets direct payments (checks mailed out, no claims process) of about $30 million (AFTER all fees and expenses) to over 100,000 members of the armed services.
The case supports arguments that it is better for cheated members of the military to have been permitted to enforce their rights through class actions, rather than being deprived of those rights.
Posted by Don Allen Resnikoff
From an article at http://harvardlpr.com/wp-content/uploads/2015/07/9.2_2_Barnes.pdf:
Encouraging the CFPB to study whether mandatory arbitration clauses lower the price of consumer financial services and products, the U.S. Chamber of Commerce wrote “businesses can avoid the higher litigation costs associated with defending claims in court. That enables them to eliminate costs that otherwise would inflate the prices of their products or services” and argued that companies with these clauses “produce savings that they may pass on to consumers through lower prices.” . . . Class action settlements [in 2015] over consumer credit cards provided a unique case study for the agency to look at precisely this issue. In Ross v. Bank of America, consumers sued multiple credit card companies alleging the issuers colluded to include mandatory arbitration clauses and class action bans in their contracts. Four defendants agreed to stop using the arbitration clauses for at least three-and-a-half years as part of a settlement of the case while three non-settling defendants continued using the clauses. The CFPB found no statistically significant evidence that the consumer credit card services prices increased after the Ross settlers jettisoned the arbitration clauses or that companies pass to consumers any supposed savings from the use of mandatory arbitration clauses.
Bank of America has not been using mandatory arbitration clauses (i'm not sure whether that is a direct effect of the Ross case), and has been defendant in a number of class actions. One is the subject of an article by Paul Bland at: http://bit.ly/2wBlw42 Paul Bland reports that there has just been a large settlement against Bank of America which cheated members of the armed forces, in violation of the Serviceman’s Civil Relief Act. The settlement gets direct payments (checks mailed out, no claims process) of about $30 million (AFTER all fees and expenses) to over 100,000 members of the armed services.
The case supports arguments that it is better for cheated members of the military to have been permitted to enforce their rights through class actions, rather than being deprived of those rights.
Posted by Don Allen Resnikoff
Advocacy from DC Sun: TELL THE PSC TO MOVE FORWARD ON IMPROVING OUR ELECTRIC SYSTEM
The D.C. Public Service Commission is engaged in a process, known as MEDSIS, to develop rules to improve electric service in the District. If done correctly, this will create a lower cost, reliable, and renewable electric grid for all District residents. Unfortunately, the Public Service Commission is dragging its feet. We need to show them the public is watching.
The PSC has failed to make any meaningful progress. The commission has not developed clear objectives, work groups, and or plans to move the proceeding forward. The Commission has done nothing to create meaningful community or ratepayer engagement about an issue that impacts everyone in D.C.
Also, the Commission is sitting on $32 million dollars it obtained as part of the wrongly approved Exelon takeover of Pepco. This money was meant to support Commission-approved pilot projects that would improve electricity service in the District and support energy efficiency and energy conservation initiatives that would primarily benefit low-income residential ratepayers.
Tell the PSC to move this proceeding forward and allow D.C. ratepayers to benefit from a low-cost, reliable, and renewable energy system
For more: See http://www.dcsun.org/tell-the-psc-to-move-forward-on-improving-our-electric-system/
The D.C. Public Service Commission is engaged in a process, known as MEDSIS, to develop rules to improve electric service in the District. If done correctly, this will create a lower cost, reliable, and renewable electric grid for all District residents. Unfortunately, the Public Service Commission is dragging its feet. We need to show them the public is watching.
The PSC has failed to make any meaningful progress. The commission has not developed clear objectives, work groups, and or plans to move the proceeding forward. The Commission has done nothing to create meaningful community or ratepayer engagement about an issue that impacts everyone in D.C.
Also, the Commission is sitting on $32 million dollars it obtained as part of the wrongly approved Exelon takeover of Pepco. This money was meant to support Commission-approved pilot projects that would improve electricity service in the District and support energy efficiency and energy conservation initiatives that would primarily benefit low-income residential ratepayers.
Tell the PSC to move this proceeding forward and allow D.C. ratepayers to benefit from a low-cost, reliable, and renewable energy system
For more: See http://www.dcsun.org/tell-the-psc-to-move-forward-on-improving-our-electric-system/
Washington State AGFerguson sues CHI Franciscan over price-fixing and anticompetitive Kitsap deals
OLYMPIA — Attorney General Bob Ferguson filed a federal lawsuit today against CHI Franciscan, The Doctors Clinic and WestSound Orthopaedics seeking to undo two unlawful agreements that have raised prices and decreased competition for healthcare on the Kitsap Peninsula.
Read more...
OLYMPIA — Attorney General Bob Ferguson filed a federal lawsuit today against CHI Franciscan, The Doctors Clinic and WestSound Orthopaedics seeking to undo two unlawful agreements that have raised prices and decreased competition for healthcare on the Kitsap Peninsula.
Read more...
States Take On Battle Over Regulating the Gig Economy
Credit: Erin Mulvaney, The National Law Journal. Full article at http://www.nationallawjournal.com/id=1202784752208/States-Take-On-Battle-Over-Regulating-the-Gig-EconomyApril 27, 2017
Florida lawmakers will likely pass a measure that classifies drivers for companies such as Uber and Lyft as independent contractors rather than employees, marking the latest state to attempt to regulate the rapidly growing and litigious ride-hailing workforce.
The bill, now on the governor’s desk after the Legislature passed it this month, has the potential to limit the number of lawsuits against companies in which the drivers sue over workers' compensation insurance and unemployment benefits, as employees have more rights in wage-and-hour disputes. It also creates statewide protections for both the drivers and consumers.
While it’s unclear how much teeth the Florida law would have in the courts, this is the latest example of a state responding to pressure from lawsuits, the companies’ lobbying efforts and the consequences of the growing gig economy. Critics fear any carve-outs for companies will limit the ability of drivers to sue for their rights and supporters say a framework is needed to create uniform regulations to help boost the new businesses.
“The patchwork of regulations—city by city, state by state, even judge by judge—is difficult,” said Richard Meneghello of Fisher Phillips, a Portland-based attorney who helps lead the firm’s new gig economy practice. “The courts are having a hard time because we are trying to address a 21st century problem with 20th century laws.”
In response to prolific court battles, states in recent years have passed measures that regulate ride-hailing companies that include a framework for insurance requirements, recordkeeping, inspections and background checks, among other standards.
Florida would be one of the first states to delve into the distinction between contractor and employee. Several other states have made the distinction, including Arkansas, West Virginia and Colorado, said Doug Shinkle, transportation program director at the National Conference of State Legislatures.
“In general, states have steered clear of getting into that,” Shinkle said. “Going forward that is likely to change, as there continues to be pressure and awareness about further strains on the social safety net and how these cases play out in the courts.”
[Shannon_Liss-Riordan-Vert-201704271732.jpg]
Yet, this is not necessarily a new battle. Companies that hire workers such as cleaners, truckers and call center employees have fought for decades over contractor versus employee status, said Shannon Liss-Riordan, who has represented employees in several high-profile cases against Uber. The so-called sharing economy is just the latest iteration.
“By classifying drivers as contractors, the companies avoid all the responsibility of being an employer and shift the cost of doing business in hopes of avoiding liability for unemployment or workers’ compensation,” she said.
Such laws could have broader implication for the emerging sharing economy and create a larger precedent for other companies. At least 45 states, including California, Georgia and Texas, as well as D.C., have established some sort of regulatory framework for such companies, according to the National Conference of State Legislatures.
State legislatures are increasingly tackling these issues to either refine existing laws or create new ones. A California bill introduced last year would have enabled contractors to collectively organize and bargain. Illinois is debating a bill that would give these drivers a tax credit to purchase or repair their vehicle.
Credit: Erin Mulvaney, The National Law Journal. Full article at http://www.nationallawjournal.com/id=1202784752208/States-Take-On-Battle-Over-Regulating-the-Gig-EconomyApril 27, 2017
Florida lawmakers will likely pass a measure that classifies drivers for companies such as Uber and Lyft as independent contractors rather than employees, marking the latest state to attempt to regulate the rapidly growing and litigious ride-hailing workforce.
The bill, now on the governor’s desk after the Legislature passed it this month, has the potential to limit the number of lawsuits against companies in which the drivers sue over workers' compensation insurance and unemployment benefits, as employees have more rights in wage-and-hour disputes. It also creates statewide protections for both the drivers and consumers.
While it’s unclear how much teeth the Florida law would have in the courts, this is the latest example of a state responding to pressure from lawsuits, the companies’ lobbying efforts and the consequences of the growing gig economy. Critics fear any carve-outs for companies will limit the ability of drivers to sue for their rights and supporters say a framework is needed to create uniform regulations to help boost the new businesses.
“The patchwork of regulations—city by city, state by state, even judge by judge—is difficult,” said Richard Meneghello of Fisher Phillips, a Portland-based attorney who helps lead the firm’s new gig economy practice. “The courts are having a hard time because we are trying to address a 21st century problem with 20th century laws.”
In response to prolific court battles, states in recent years have passed measures that regulate ride-hailing companies that include a framework for insurance requirements, recordkeeping, inspections and background checks, among other standards.
Florida would be one of the first states to delve into the distinction between contractor and employee. Several other states have made the distinction, including Arkansas, West Virginia and Colorado, said Doug Shinkle, transportation program director at the National Conference of State Legislatures.
“In general, states have steered clear of getting into that,” Shinkle said. “Going forward that is likely to change, as there continues to be pressure and awareness about further strains on the social safety net and how these cases play out in the courts.”
[Shannon_Liss-Riordan-Vert-201704271732.jpg]
Yet, this is not necessarily a new battle. Companies that hire workers such as cleaners, truckers and call center employees have fought for decades over contractor versus employee status, said Shannon Liss-Riordan, who has represented employees in several high-profile cases against Uber. The so-called sharing economy is just the latest iteration.
“By classifying drivers as contractors, the companies avoid all the responsibility of being an employer and shift the cost of doing business in hopes of avoiding liability for unemployment or workers’ compensation,” she said.
Such laws could have broader implication for the emerging sharing economy and create a larger precedent for other companies. At least 45 states, including California, Georgia and Texas, as well as D.C., have established some sort of regulatory framework for such companies, according to the National Conference of State Legislatures.
State legislatures are increasingly tackling these issues to either refine existing laws or create new ones. A California bill introduced last year would have enabled contractors to collectively organize and bargain. Illinois is debating a bill that would give these drivers a tax credit to purchase or repair their vehicle.
Spirit and Frontier moderate airline ticket costs
Excerpted from NYT:
Even as a wave of mergers has cut the number of major carriers to four and significantly reduced competition, lower-cost airlines continue to play a role in moderating ticket costs.
The low-cost carriers such as Spirit and Frontier force the big airlines to figure out a way to draw the most price-sensitive fliers in any given market — those who scour the internet for the cheapest tickets possible. Those customers make up a significant portion of travelers, meaning the major carrier cannot just ignore them.
“Those passengers certainly are important,” said David Weingart, an economist at the aviation consultant GRA. “The larger airlines have proven that in how they’ve reacted, in how they’ve tried to capture or recapture those passengers.”
Delta, American and United Airlines have all rolled out “basic economy” fares. Such tickets are priced competitively against Spirit and Frontier, but do not offer the amenities that most consumers have come to expect on a flight, like receiving a seat assignment ahead of a flight or obtaining a refund for a ticket.
Full article: https://www.nytimes.com/2017/09/01/business/budget-airlines-ticket-prices.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront&_r=0
Excerpted from NYT:
Even as a wave of mergers has cut the number of major carriers to four and significantly reduced competition, lower-cost airlines continue to play a role in moderating ticket costs.
The low-cost carriers such as Spirit and Frontier force the big airlines to figure out a way to draw the most price-sensitive fliers in any given market — those who scour the internet for the cheapest tickets possible. Those customers make up a significant portion of travelers, meaning the major carrier cannot just ignore them.
“Those passengers certainly are important,” said David Weingart, an economist at the aviation consultant GRA. “The larger airlines have proven that in how they’ve reacted, in how they’ve tried to capture or recapture those passengers.”
Delta, American and United Airlines have all rolled out “basic economy” fares. Such tickets are priced competitively against Spirit and Frontier, but do not offer the amenities that most consumers have come to expect on a flight, like receiving a seat assignment ahead of a flight or obtaining a refund for a ticket.
Full article: https://www.nytimes.com/2017/09/01/business/budget-airlines-ticket-prices.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront&_r=0
The now famous New America think-tank statement supporting EU fines for Google
This is the statement that Barry Lynn reports is the reason he was fired.
See it here: https://www.newamerica.org/open-markets/press-releases/open-markets-applauds-european-commissions-finding-against-google-abuse-dominance/
This is the statement that Barry Lynn reports is the reason he was fired.
See it here: https://www.newamerica.org/open-markets/press-releases/open-markets-applauds-european-commissions-finding-against-google-abuse-dominance/
The Maker of the Infamous $400 Juicer Is Shutting Down
Credit: Fortune, Beth Kowitt
Sep 01, 2017
Juicero has run out of juice.The San Francisco-based maker of counter-top cold-press juicers said today that it is shutting down operations and suspending the sale of its presses and produce packs immediately.
The announcement on the company’s website comes after the startup said in July that it was undergoing a “strategic shift” to more quickly lower the cost of its $399 juicers and $5-7 juice packs filled with raw fruits and vegetables. As part of the shift, the company said then that it would lay off about a quarter of its staff.
At the time, Juicero CEO Jeff Dunn wrote in a letter to employees obtained by Fortune that the current prices were “not a realistic way for us to fulfill our mission at the scale to which we aspire.”
But Juicero realized it couldn't bring down the cost of its products as a standalone company. It was too small to achieve the required economies of scale on its own. The company will now focus on finding a buyer, it wrote in Friday's blog post.
A source familiar with the situation said employees are being given 60 days notice and that the company is notifying all customers via email that they can request a refund for the machine for up 90 days.
Before today’s news, Juicero had said it would focus on building a second generation machine that would cost in the $200 range—versus its initial launch price 16 months ago of $699.
Juicero fell under heightened scrutiny after a Bloomberg article in April reported on how consumers could use their hands to squeeze the juice packs without the aid of the Juicero machine.
As Fortune reported earlier this month, Dunn addressed the Bloomberg hand-squeezing issue in a Medium post and again in the letter to employees obtained by Fortune, in which he wrote that “it was frustrating to read that something we always knew about, and that our customers simply aren’t interested in doing, was somehow new and relevant.”
The hand-squeezing dustup inflamed some of the criticism Juicero has gotten since bringing its juicer to market. "Some held up the countertop appliance as a symbol of all that was wrong with Silicon Valley: a $699 connected device that solved a problem most people didn’t even have the luxury of affording—how to get fresh juice on demand at home," Fortune wrote in January.
The Bloomberg article described Juicero as "one of the most lavishly funded gadget startups in Silicon Valley" and founder Doug Evans once said he planned to do for juicing what Steve Jobs did for computers.
It's not easy to run a hospital-Anthem says it will no longer pay for MRIs and CT scans delivered on an outpatient basis at hospitals
MRI and CT scans can often cost several times more than the same services at a freestanding imaging center.MRIs and CT scans can vary from $350 to $2,000, depending on the region and type of facility, Anthem said.
In a note to health providers, Anthem said it will require hospitals to submit precertification requests for MRIs and CT scans for patients.
“If it is NOT medically necessary for the member to receive the service in a hospital setting, the request for authorization will be denied as not medically necessary for that site of care,” according to a Q&A on Anthem’s website.
Anthem is the largest health insurer in Indiana, and its policy is sure to take a hit on hospitals' bottom line. The new policy went into effect July 1 in Indiana, Kentucky, Missouri and Wisconsin. It will go into effect Sept. 1 in Ohio.
The policy does not apply to members enrolled in Medicare Advantage, BlueCard, Medicaid or Medicare Supplement.
The Indiana Hospital Association said requiring busy physicians to get a precertification approval while trying to diagnose a patient creates an unfair burden.
Excerpt from https://www.ibj.com/blogs/17-the-dose/post/65184-anthem-to-hospitals-no-more-mris-ct-scans-for-outpatients-without-preapproval
Court Grants Motion to Compel DreamHost to Obey Warrant, but Restricts Search Process and Use of Data
by Paul Alan Levy
In a decision issued late Thursday morning, DC Superior Court Chief Judge Robert Morin said that he was ready to order DreamHost to comply with the federal prosecutors’ scaled-down search warrant, but enunciated strict procedural restrictions that he said were intended to reflect a balance between allowing the Government to pursue a facially legitimate criminal investigation and protecting the free speech rights of innocent users of the web site who were engaged in protected political speech. It appears that the precise terms of the order are still under discussion. Still, I have grave qualms about the precedent for searching anti-Trump web sites set here at the outset of the Trump Administration.
Full article:http://pubcit.typepad.com/clpblog/2017/08/court-grants-motion-to-compel-dreamhost-to-obey-warrant-but-restricts-search-process-and-use-of-data.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
by Paul Alan Levy
In a decision issued late Thursday morning, DC Superior Court Chief Judge Robert Morin said that he was ready to order DreamHost to comply with the federal prosecutors’ scaled-down search warrant, but enunciated strict procedural restrictions that he said were intended to reflect a balance between allowing the Government to pursue a facially legitimate criminal investigation and protecting the free speech rights of innocent users of the web site who were engaged in protected political speech. It appears that the precise terms of the order are still under discussion. Still, I have grave qualms about the precedent for searching anti-Trump web sites set here at the outset of the Trump Administration.
Full article:http://pubcit.typepad.com/clpblog/2017/08/court-grants-motion-to-compel-dreamhost-to-obey-warrant-but-restricts-search-process-and-use-of-data.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
UPCOMING NACA PROGRAM:Debt Collection Issues and other updates from the FTC
September 19, 2017 2:00 p.m. ET–3:00 p.m. ET
Registration Information
Members: $0
Nonmembers: $0 (If you have not already been vetted to attend webinars, please email Rebecca at [email protected] (link sends e-mail)to register.)
Join us to hear about some of the recent issues the Federal Trade Commission has been seeing in debt collection matters. These issues include phantom debt, unlawful third-party communications, collectors not disclosing their identity, and other misrepresentations regarding the nature of the debt.
Staff from the FTC will talk about recent cases involving violations of the FTC Act and the Fair Debt Collection Practices Act (FDCPA). Staff will also discuss how to spot violations of the FDCPA, and what consumers can do to protect themselves from debt collection scams. The webinar will also cover the Credit Practices Rule and provide other updates of initiatives coming out of the Federal Trade Commission.
This session will be a great introduction for those new to these issues and are looking to get a good update and for those who may be more knowledgeable, but interested in the Federal Trade Commission’s work.
What You Will Learn
• Current problematic practices seen by the FTC
• The Credit Practices Rule
• Other updates from the FTC
Speakers
Rebecca Unruh, Attorney, Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission
Quinn Martin, Attorney, Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission
Patti Poss, Attorney, Division of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission
CLE Credit Interested in receiving CLE credit for this webinar? NACA webinars have been CLE approved in a number of states. While NACA does not seek CLE approval for each webinar in each individual state, individual attorneys can generally apply for and receive CLE credit in their own respective states. For more information and a comprehensive guide to the process of applying for CLE approval as an individual attorney, email Rebecca Smolar at [email protected](link sends e-mail).
Why You Should Register Even If You Can’t Attend the Live Webinar: For each webinar you register for, regardless of whether you attend live, you will automatically receive an email inviting you to view a recording of the webinar and also containing attachments of the Power Point presentation and any other supplemental materials within two business days of the live webinar. This way, if you have a time conflict, you will be able to listen to the webinar and study the course materials at your convenience. If you have any questions, please contact Rebecca Smolar, Manager of Education, at [email protected](link sends e-mail).
September 19, 2017 2:00 p.m. ET–3:00 p.m. ET
Registration Information
Members: $0
Nonmembers: $0 (If you have not already been vetted to attend webinars, please email Rebecca at [email protected] (link sends e-mail)to register.)
Join us to hear about some of the recent issues the Federal Trade Commission has been seeing in debt collection matters. These issues include phantom debt, unlawful third-party communications, collectors not disclosing their identity, and other misrepresentations regarding the nature of the debt.
Staff from the FTC will talk about recent cases involving violations of the FTC Act and the Fair Debt Collection Practices Act (FDCPA). Staff will also discuss how to spot violations of the FDCPA, and what consumers can do to protect themselves from debt collection scams. The webinar will also cover the Credit Practices Rule and provide other updates of initiatives coming out of the Federal Trade Commission.
This session will be a great introduction for those new to these issues and are looking to get a good update and for those who may be more knowledgeable, but interested in the Federal Trade Commission’s work.
What You Will Learn
• Current problematic practices seen by the FTC
• The Credit Practices Rule
• Other updates from the FTC
Speakers
Rebecca Unruh, Attorney, Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission
Quinn Martin, Attorney, Division of Financial Practices, Bureau of Consumer Protection, Federal Trade Commission
Patti Poss, Attorney, Division of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission
CLE Credit Interested in receiving CLE credit for this webinar? NACA webinars have been CLE approved in a number of states. While NACA does not seek CLE approval for each webinar in each individual state, individual attorneys can generally apply for and receive CLE credit in their own respective states. For more information and a comprehensive guide to the process of applying for CLE approval as an individual attorney, email Rebecca Smolar at [email protected](link sends e-mail).
Why You Should Register Even If You Can’t Attend the Live Webinar: For each webinar you register for, regardless of whether you attend live, you will automatically receive an email inviting you to view a recording of the webinar and also containing attachments of the Power Point presentation and any other supplemental materials within two business days of the live webinar. This way, if you have a time conflict, you will be able to listen to the webinar and study the course materials at your convenience. If you have any questions, please contact Rebecca Smolar, Manager of Education, at [email protected](link sends e-mail).
Seventh Circuit holds that unaccepted pre-litigation offer does not deprive plaintiff of standing in later-filed suit
From Public Citizen, Posted: 22 Aug 2017 12:03 PM PDT
The unanimous decision, by Chief Judge Wood, is Laurens v. Volvo Cars of N. America. Here's the beginning of the opinion, which sums things up quite nicely:
The idea of a theme and variations is a common one in music. It should be in law, too. Here we return to the familiar theme of a defense effort to pretermit a proposed class action by picking off the named plaintiff’s claim. Several variations on that theme have been tried and have failed. See Campbell‐Ewald Co. v. Gomez, 136 S. Ct. 663 (2016). (Rule 68 offers of judgment); Fulton Dental, LLC v. Bisco, Inc.,860 F.3d 541 (7th Cir. 2017) (Rule 67 payments to court registry). Undeterred, the defendant in the case now before us asserts that an unaccepted offer of relief before a putative plaintiff files a lawsuit deprives that plaintiff of standing. We see no reason why the timing of the offer has such a powerful effect. Black‐letter contract law states that offers do not bind recipients until they are accepted. See, e.g., ALI Restatement (Second) of Contracts § 17 (1981). Hence while the legal effect of every variation on the strategic‐mooting theme has not yet been explored, we are satisfied that an unaccepted pre‐litigation offer does not deprive a plaintiff of her day in court.
It's worth reading the whole thing.
"Under Trump Rule, Nursing Home Residents May Not Be Able To Sue After Abuse"
From Public Citizen, Posted: 22 Aug 2017 05:54 AM PDT
NPR reports on the Trump Administration proposed rule to allow nursing homes to require new residents to agree to arbitration as a condition of admission.
A rule issue under the Obama Administration barred nursing homes forced arbitration agreements for nursing homes, leaving it to the two sides to decide whether they preferred court or arbitration after a dispute arose. The Trump administration rule, NPR reports, "could make it almost impossible for nursing home residents to get their day in court."
The NPR story is here. The proposed regulation is here.
CFPB director Cordray's op-ed in the NY Times
From Public Citizen, Posted: 22 Aug 2017 05:42 AM PDT
Consumer Financial Protection Bureau Director Richard Cordray has an op-ed in the New York Times, explaining the importance of the CFPB rule barring class-action bans in forced arbitration provisions.His conclusion: "A cherished tenet of our justice system is that nobody should escape accountability for breaking the law. Our rule restores consumers’ legal right to stand up for themselves and have their day in court without having to wait on the government to act."
The piece is here.
From Public Citizen, Posted: 22 Aug 2017 12:03 PM PDT
The unanimous decision, by Chief Judge Wood, is Laurens v. Volvo Cars of N. America. Here's the beginning of the opinion, which sums things up quite nicely:
The idea of a theme and variations is a common one in music. It should be in law, too. Here we return to the familiar theme of a defense effort to pretermit a proposed class action by picking off the named plaintiff’s claim. Several variations on that theme have been tried and have failed. See Campbell‐Ewald Co. v. Gomez, 136 S. Ct. 663 (2016). (Rule 68 offers of judgment); Fulton Dental, LLC v. Bisco, Inc.,860 F.3d 541 (7th Cir. 2017) (Rule 67 payments to court registry). Undeterred, the defendant in the case now before us asserts that an unaccepted offer of relief before a putative plaintiff files a lawsuit deprives that plaintiff of standing. We see no reason why the timing of the offer has such a powerful effect. Black‐letter contract law states that offers do not bind recipients until they are accepted. See, e.g., ALI Restatement (Second) of Contracts § 17 (1981). Hence while the legal effect of every variation on the strategic‐mooting theme has not yet been explored, we are satisfied that an unaccepted pre‐litigation offer does not deprive a plaintiff of her day in court.
It's worth reading the whole thing.
"Under Trump Rule, Nursing Home Residents May Not Be Able To Sue After Abuse"
From Public Citizen, Posted: 22 Aug 2017 05:54 AM PDT
NPR reports on the Trump Administration proposed rule to allow nursing homes to require new residents to agree to arbitration as a condition of admission.
A rule issue under the Obama Administration barred nursing homes forced arbitration agreements for nursing homes, leaving it to the two sides to decide whether they preferred court or arbitration after a dispute arose. The Trump administration rule, NPR reports, "could make it almost impossible for nursing home residents to get their day in court."
The NPR story is here. The proposed regulation is here.
CFPB director Cordray's op-ed in the NY Times
From Public Citizen, Posted: 22 Aug 2017 05:42 AM PDT
Consumer Financial Protection Bureau Director Richard Cordray has an op-ed in the New York Times, explaining the importance of the CFPB rule barring class-action bans in forced arbitration provisions.His conclusion: "A cherished tenet of our justice system is that nobody should escape accountability for breaking the law. Our rule restores consumers’ legal right to stand up for themselves and have their day in court without having to wait on the government to act."
The piece is here.
Maryland’s Purple Line will receive a $900 million federal full funding agreement from the Trump administration
This is a critical step forward for the oft-delayed project.
The breakthrough came after “very productive, high-level conversations” on Friday and Monday between Gov. Larry Hogan (R) and Transportation Secretary Elaine Chao, Hogan spokesman Doug Mayer said.
A Department of Transportation spokesman confirmed the deal, and said it is expected to be signed next week.
Construction of the 16-mile light-rail line linking Montgomery and Prince George’s counties will begin within weeks after the deal is formalized.
From: https://www.washingtonpost.com/local/trafficandcommuting/maryland-to-get-full-federal-funding-agreement-for-purple-line/2017/08/21/dc7f7dda-86b8-11e7-a50f-e0d4e6ec070a_story.html?utm_campaign=08-22-17%20Email&utm_medium=email&utm_source=August%2022%20Update&utm_term=.653658ebf773
The "Save the Trail" group responded with a promise to pursue its litigation, described at http://savethetrail.org/wp-content/uploads/2015/03/Fact-sheet-about-citizen-lawsuit-Nov-2015.pdf
This is a critical step forward for the oft-delayed project.
The breakthrough came after “very productive, high-level conversations” on Friday and Monday between Gov. Larry Hogan (R) and Transportation Secretary Elaine Chao, Hogan spokesman Doug Mayer said.
A Department of Transportation spokesman confirmed the deal, and said it is expected to be signed next week.
Construction of the 16-mile light-rail line linking Montgomery and Prince George’s counties will begin within weeks after the deal is formalized.
From: https://www.washingtonpost.com/local/trafficandcommuting/maryland-to-get-full-federal-funding-agreement-for-purple-line/2017/08/21/dc7f7dda-86b8-11e7-a50f-e0d4e6ec070a_story.html?utm_campaign=08-22-17%20Email&utm_medium=email&utm_source=August%2022%20Update&utm_term=.653658ebf773
The "Save the Trail" group responded with a promise to pursue its litigation, described at http://savethetrail.org/wp-content/uploads/2015/03/Fact-sheet-about-citizen-lawsuit-Nov-2015.pdf
The ACLU litigated to protect "Unite the Right" protest in Charlottesville; but after the protest ACLU says it will no longer litigate for protesters who carry firearms
Virginia Gov. Terry McAuliffe who told NPR that Charlottesville officials “asked for [the rally] to be moved out of downtown Charlottesville to a park about a mile and a half away — a lot of open fields. That was the place that it should’ve been. We were, unfortunately, sued by the ACLU. And the judge ruled against us. The McAuliffe NPR interview is at http://www.npr.org/2017/08/14/543358169/incident-in-charlottesville-will-make-us-stronger-gov-mcauliffe-says
Charlottesville officials originally denied organizer Jason Kessler a permit for a march protesting the removal of a Robert E. Lee Confederate statue from a local park. In response, the ACLU filed a lawsuit against the city, citing the national organization’s long-held belief to uphold the rights of free speech for all. The lawsuit complaint can be found at https://acluva.org/wp-content/uploads/2017/08/KesslerComplaint20170810.pdf
But after the “Unite the Right” rally in Charlottesville, Virginia, ACLU executive director Anthony Romero told The Wall Street Journal that the group will review legal requests from white supremacist groups on a case-by-case basis, assessing more closely whether their protests would have the potential to be violent.
“The events of Charlottesville require any judge, any police chief and any legal group to look at the facts of any white-supremacy protests with a much finer comb,” Romero told the Journal. “If a protest group insists, ‘No, we want to be able to carry loaded firearms,’ well, we don’t have to represent them. They can find someone else,” he added.
ACLU’s Virginia branch previously responded to the criticism over its decision, saying in a statement: “… Let’s be clear: our lawsuit challenging the city to act constitutionally did not cause violence nor did it in any way address the question whether demonstrators could carry sticks or other weapons at the events.” The Virginia branch ACLU statement is here: https://acluva.org/20108/aclu-of-virginia-response-to-governors-allegations-that-aclu-is-responsible-for-violence-in-charlottesville/
Posting by Don Allen Resnikoff
Virginia Gov. Terry McAuliffe who told NPR that Charlottesville officials “asked for [the rally] to be moved out of downtown Charlottesville to a park about a mile and a half away — a lot of open fields. That was the place that it should’ve been. We were, unfortunately, sued by the ACLU. And the judge ruled against us. The McAuliffe NPR interview is at http://www.npr.org/2017/08/14/543358169/incident-in-charlottesville-will-make-us-stronger-gov-mcauliffe-says
Charlottesville officials originally denied organizer Jason Kessler a permit for a march protesting the removal of a Robert E. Lee Confederate statue from a local park. In response, the ACLU filed a lawsuit against the city, citing the national organization’s long-held belief to uphold the rights of free speech for all. The lawsuit complaint can be found at https://acluva.org/wp-content/uploads/2017/08/KesslerComplaint20170810.pdf
But after the “Unite the Right” rally in Charlottesville, Virginia, ACLU executive director Anthony Romero told The Wall Street Journal that the group will review legal requests from white supremacist groups on a case-by-case basis, assessing more closely whether their protests would have the potential to be violent.
“The events of Charlottesville require any judge, any police chief and any legal group to look at the facts of any white-supremacy protests with a much finer comb,” Romero told the Journal. “If a protest group insists, ‘No, we want to be able to carry loaded firearms,’ well, we don’t have to represent them. They can find someone else,” he added.
ACLU’s Virginia branch previously responded to the criticism over its decision, saying in a statement: “… Let’s be clear: our lawsuit challenging the city to act constitutionally did not cause violence nor did it in any way address the question whether demonstrators could carry sticks or other weapons at the events.” The Virginia branch ACLU statement is here: https://acluva.org/20108/aclu-of-virginia-response-to-governors-allegations-that-aclu-is-responsible-for-violence-in-charlottesville/
Posting by Don Allen Resnikoff
Treasury Secretary Steven Mnuchin released a defense of President Trump on Saturday; will continue his focus on the Trump Administration's financial agenda
In a written statement, Mnuchin responded to a letter co-signed by nearly 300 of his former Yale classmates calling on him to leave the administration. For the Yale letter: http://lettertostevemnuchin.com/
The letter from his Yale classmates was posted to the site Lettertostevemnuchin.com, and said Mnuchin has a "moral obligation" to resign in protest over Trump's widely criticized response to a white supremacist and neo-Nazi rally in Virginia last weekend.
"We call upon you, as our friend, our classmate, and as a fellow American, to resign in protest of President Trump's support of Nazism and white supremacy. We know you are better than this, and we are counting on you to do the right thing," the letter reads.
"I believe that your letter and these comments raise several important issues and misconceptions that I am prepared to address," Mnuchin wrote on Saturday.
Mnuchin's full statement is here:
In a written statement, Mnuchin responded to a letter co-signed by nearly 300 of his former Yale classmates calling on him to leave the administration. For the Yale letter: http://lettertostevemnuchin.com/
The letter from his Yale classmates was posted to the site Lettertostevemnuchin.com, and said Mnuchin has a "moral obligation" to resign in protest over Trump's widely criticized response to a white supremacist and neo-Nazi rally in Virginia last weekend.
"We call upon you, as our friend, our classmate, and as a fellow American, to resign in protest of President Trump's support of Nazism and white supremacy. We know you are better than this, and we are counting on you to do the right thing," the letter reads.
"I believe that your letter and these comments raise several important issues and misconceptions that I am prepared to address," Mnuchin wrote on Saturday.
Mnuchin's full statement is here:
2nd Circuit reverses District Court decision that Uber could not force a customer to arbitrate price-fixing accusations -- says rider Spencer Meyer was given adequate notice
Read decision here: dlbjbjzgnk95t.cloudfront.net/0955000/955188/16-2752_documents.pdf
Read decision here: dlbjbjzgnk95t.cloudfront.net/0955000/955188/16-2752_documents.pdf
Public Citizen letter says the SEC should ban mandatory arbitration clauses that companies want to put in their covenants with shareholders as a way to limit lawsuits
The letter is here: letter http://go.politicoemail.com/?qs=4c8b0277b42fe76f915fff3f3ddd75096c0ef08206e7a5c70b14cbd86ea1058eb9b60b33d895b0f661e166873e6f5b9d668045aef7e5cc0b
Excerpt from the letter:
On behalf of Public Citizen, a non-profit membership organization with more than 400,000 members and supporters nationwide, we are greatly distressed by recent comments of Commissioner Michael Piwowar, in which he offered his support for including forced arbitration clauses in initial public offering (IPO) documents. 1 We strongly urge that you immediately begin the process of prohibiting forced arbitration clauses by entities governed by the SEC. The SEC should protect investors by banning forced arbitration clauses and bans on class actions (“forced arbitration clauses”) because it is difficult for investors to vindicate their rights under federal securities law absent the ability to bring a class action. The SEC’s powers to enforce prohibitions on manipulative practices and to enforce the anti-waiver provisions in federal securities law confer ample authority on the SEC to ban these insidious provisions.
The letter is here: letter http://go.politicoemail.com/?qs=4c8b0277b42fe76f915fff3f3ddd75096c0ef08206e7a5c70b14cbd86ea1058eb9b60b33d895b0f661e166873e6f5b9d668045aef7e5cc0b
Excerpt from the letter:
On behalf of Public Citizen, a non-profit membership organization with more than 400,000 members and supporters nationwide, we are greatly distressed by recent comments of Commissioner Michael Piwowar, in which he offered his support for including forced arbitration clauses in initial public offering (IPO) documents. 1 We strongly urge that you immediately begin the process of prohibiting forced arbitration clauses by entities governed by the SEC. The SEC should protect investors by banning forced arbitration clauses and bans on class actions (“forced arbitration clauses”) because it is difficult for investors to vindicate their rights under federal securities law absent the ability to bring a class action. The SEC’s powers to enforce prohibitions on manipulative practices and to enforce the anti-waiver provisions in federal securities law confer ample authority on the SEC to ban these insidious provisions.
Three pension plans sue Goldman Sachs and five other investment banks for conspiring to control the more than $1 trillion market for lending stocks
The complaint claims the banks are blocking a shift to all-electronic system for matching lenders and borrowers of shares, so they can continue to profit from each transaction. In a short sale, traders sell borrowed stock, anticipating the price will drop so they can profit by buying back the shares at a lower price.
“Major investment banks are conspiring to preserve their profits at the expense of everyday investors,” plaintiffs’ attorney Michael Eisenkraft of Washington-based Cohen Milstein Sellers & Toll said in a statement Thursday. The investors are seeking unspecified damages in the class-action antitrust case, which could be tripled under federal law.
The URL for the Complaint is here:
www.almcms.com/contrib/content/uploads/sites/292/2017/08/Complaint.pdf
Can the U.S. Government Seize an Anti-Trump Website's Visitor Logs?
The Department of Justice is seeking the 1.3 million IP addresses that accessed a website advertising Inauguration Day protests.fighters arrive as police stand guard in front of a limousine which was set ablaze during a protest against President Donald Trump on January 20, 2017, in Washington, D.C
- by ROBINSON MEYER
It will take you to the website of Disrupt J20, which organized some of the “direct action” protests on the day of President Donald Trump’s
inauguration in Washington, D.C. The site contains general information about civil disobedience and political protests, and it advertises several Washington-specific events.
Some of the protests on Inauguration Day turned violent, and the U.S. government has since charged more than 200 people with felony rioting r destruction of property in connection to events on January 20. It alleges that some of the suspects were connected to the Disrupt J20 effort.
Yet if you clicked that link above—even if you were nowhere near Washington on Inauguration Day—the government is now allegedly interested
in you.
The U.S. Department of Justice is attempting to seize the visitor logs and IP addresses of anyone who has visited DisruptJ20.org, as well as any email addresses, user logs, and photos collected by the website, according to DreamHost, a Los Angeles–based web host and domain-name registrar.
This data encompasses more than 1.3 million IP addresses, as well as the email addresses and photos of thousands of people, the company said. DreamHost is not politically connected to DisruptJ20, but it provided paid web-hosting services for the group.
DreamHost has so far refused to comply with the government’s search warrant, arguing that it constitutes “investigatory overreach and a clear abuse of government authority.”
“That information could be used to identify any individuals who used this site to exercise and express political speech protected under the Constitution’s First Amendment. That should be enough to set alarm bells off in anyone’s mind,” said a blog post published to the company’s website on Monday.
* * *
“No plausible explanation exists for a search warrant of this breadth, other than to cast a digital dragnet as broadly as possible,” said Mark Rumold, a senior staff attorney at the Electronic Frontier Foundation, in a blog post. The EFF is assisting DreamHost in its opposition to the warrant.
Excerpts from https://www.theatlantic.com/technology/archive/2017/08/department-of-justice-dreamhost-trump-visitor-logs-million-ip/536886/
See the USDOJ search warrant to DreamHost here: https://www.dreamhost.com/blog/wp-content/uploads/2017/08/DH-Search-Warrant.pdf
D.C. regulators recently ordered United Medical Center, the only full-service hospital in Southeast Washington to stop delivering babies
[Read the regulator's letter obtained by The Washington Post here]
Statement from United Medical Center Regarding Department of Health Notice of Restricted License:
On August 7, 2017 the District of Columbia Department of Health (DOH) issued a notice to United Medical Center (UMC) restricting the hospital’s license for obstetric and related newborn services.
The restricted license, which applies only to obstetrical patients and their newborns, will be in place for a period of 90 days, during which UMC will be able to address the cited deficiencies. These include three separate cases involving deficiencies in screening, clinical assessment and delivery protocols. HIPAA regulations preclude sharing specific details of these cases, however, UMC is taking immediate action to address these deficiencies.
UMC had already initiated the process of transitioning from a Level III neonatal intensive care center and we will be working to ensure that all physicians and nursing staff have appropriate training in policy and procedures. Until that process is complete, UMC will coordinate alternative services through Emergency Medical Services (EMS) and local hospital partners to care for our current obstetric patients.
Members of the public requiring emergency obstetric treatment are urged to use other D.C. facilities, with Providence Hospital recommended as the most accessible for Ward 7 and Ward 8 patients. Additional regional facilities with obstetrical capabilities include: MedStar Washington Hospital Center, George Washington University Hospital, MedStar Georgetown University Hospital, Howard University Hospital, Sibley Memorial Hospital, Prince Georges Hospital Center, and Southern Maryland Hospital. Based on DOH’s Health Systems Plan, the District currently is well below capacity with regard to hospital beds and should be more than capable of accommodating UMC patients in the interim at these other facilities.
As a long-standing and integral part of the community, United Medical Center looks forward to continuing to provide vital healthcare services to residents of Wards 7 and 8 as well as surrounding Prince George’s County, Maryland.
For further information, contact:
Jennifer Devlin
703-876-1714
[Read the regulator's letter obtained by The Washington Post here]
Statement from United Medical Center Regarding Department of Health Notice of Restricted License:
On August 7, 2017 the District of Columbia Department of Health (DOH) issued a notice to United Medical Center (UMC) restricting the hospital’s license for obstetric and related newborn services.
The restricted license, which applies only to obstetrical patients and their newborns, will be in place for a period of 90 days, during which UMC will be able to address the cited deficiencies. These include three separate cases involving deficiencies in screening, clinical assessment and delivery protocols. HIPAA regulations preclude sharing specific details of these cases, however, UMC is taking immediate action to address these deficiencies.
UMC had already initiated the process of transitioning from a Level III neonatal intensive care center and we will be working to ensure that all physicians and nursing staff have appropriate training in policy and procedures. Until that process is complete, UMC will coordinate alternative services through Emergency Medical Services (EMS) and local hospital partners to care for our current obstetric patients.
Members of the public requiring emergency obstetric treatment are urged to use other D.C. facilities, with Providence Hospital recommended as the most accessible for Ward 7 and Ward 8 patients. Additional regional facilities with obstetrical capabilities include: MedStar Washington Hospital Center, George Washington University Hospital, MedStar Georgetown University Hospital, Howard University Hospital, Sibley Memorial Hospital, Prince Georges Hospital Center, and Southern Maryland Hospital. Based on DOH’s Health Systems Plan, the District currently is well below capacity with regard to hospital beds and should be more than capable of accommodating UMC patients in the interim at these other facilities.
As a long-standing and integral part of the community, United Medical Center looks forward to continuing to provide vital healthcare services to residents of Wards 7 and 8 as well as surrounding Prince George’s County, Maryland.
For further information, contact:
Jennifer Devlin
703-876-1714
From CA AG suit against Pruitt/EPA for withholding documents
Plaintiff [California] sent a written request to EPA on April 7, 2017, seeking, pursuant to FOIA, specified records concerning (a) the process EPA has undertaken to ensure that Administrator E. Scott Pruitt is in compliance with federal ethics regulations and obligations; and (b) EPA’s policies and procedures for determining who (if anyone) can assume the powers of the Administrator if he is recused or disqualified from participating in a matter.
EPA has failed to comply with FOIA. EPA did not provide Plaintiff with a determination on the scope of the documents it would produce and the exemptions it would claim within 20 working days of receiving the request. 5 U.S.C. § 552(a)(6)(A)(i).
URL for the Complaint: https://dlbjbjzgnk95t.cloudfront.net/0953000/953666/california%20v%20epa%20filed%20foia%20complaint%2017-1626.pdf
Plaintiff [California] sent a written request to EPA on April 7, 2017, seeking, pursuant to FOIA, specified records concerning (a) the process EPA has undertaken to ensure that Administrator E. Scott Pruitt is in compliance with federal ethics regulations and obligations; and (b) EPA’s policies and procedures for determining who (if anyone) can assume the powers of the Administrator if he is recused or disqualified from participating in a matter.
EPA has failed to comply with FOIA. EPA did not provide Plaintiff with a determination on the scope of the documents it would produce and the exemptions it would claim within 20 working days of receiving the request. 5 U.S.C. § 552(a)(6)(A)(i).
URL for the Complaint: https://dlbjbjzgnk95t.cloudfront.net/0953000/953666/california%20v%20epa%20filed%20foia%20complaint%2017-1626.pdf
The ACLU sues the Metro system in Washington, D.C. for rejection of public service advertisements
The ACLU claims violation of the First Amendment.
The ads rejected by the Washington Metropolitan Area Transit Authority, which runs mass transit services in and around the nation’s capital, included one for an abortion pill, another promoting a new book by the right-wing provocateur Milo Yiannopoulos, and yet another urging consumers to reject animal cruelty. A fourth, submitted by the A.C.L.U. itself, consisted of little more than transcripts of the First Amendment of the United States Constitution in English, Spanish and Arabic.
Since 2015, the Metro agency has prohibited advertisements that aim to “influence public policy,” or to “influence members of the public regarding an issue on which there are varying opinions,” according to its guidelines.
The lawsuit, [URL https://www.aclu.org/legal-document/aclu-v-wmata-complaint, click United States District Court for the District of Columbia] -, seeks to to overturn the Metro agency’s policy. Ms. Rowland said it became clear how subjective that policy was when Mr. Yiannopoulos’s ads, which were accepted by the Metro earlier this year, were taken down after about 10 days, following commuter complaints. The A.C.L.U. also filed a motion for preliminary injunction, URL https://www.aclu.org/legal-document/aclu-v-wmata-motion-preliminary-injunction [click highlighted words] calling for those ads to be reinstated.
Excerpts are from NYT
The ACLU claims violation of the First Amendment.
The ads rejected by the Washington Metropolitan Area Transit Authority, which runs mass transit services in and around the nation’s capital, included one for an abortion pill, another promoting a new book by the right-wing provocateur Milo Yiannopoulos, and yet another urging consumers to reject animal cruelty. A fourth, submitted by the A.C.L.U. itself, consisted of little more than transcripts of the First Amendment of the United States Constitution in English, Spanish and Arabic.
Since 2015, the Metro agency has prohibited advertisements that aim to “influence public policy,” or to “influence members of the public regarding an issue on which there are varying opinions,” according to its guidelines.
The lawsuit, [URL https://www.aclu.org/legal-document/aclu-v-wmata-complaint, click United States District Court for the District of Columbia] -, seeks to to overturn the Metro agency’s policy. Ms. Rowland said it became clear how subjective that policy was when Mr. Yiannopoulos’s ads, which were accepted by the Metro earlier this year, were taken down after about 10 days, following commuter complaints. The A.C.L.U. also filed a motion for preliminary injunction, URL https://www.aclu.org/legal-document/aclu-v-wmata-motion-preliminary-injunction [click highlighted words] calling for those ads to be reinstated.
Excerpts are from NYT
NYT EDITORIAL
Closing the Courthouse Doors By THE EDITORIAL BOARD
AUGUST 10, 2017
The Trump administration is moving to deny Americans their day in court when they have been wronged.
The Centers for Medicare and Medicaid Services want to reverse an Obama-era regulation that bars most nursing homes from forcing residents to agree to resolve disputes in private arbitration, instead of in court. The Department of Education recently announced that it was working to reverse an Obama-era rule that prevents most for-profit colleges and other schools from enforcing arbitration agreements when resolving loan disputes by students.
Now, congressional Republicans are getting into the act by attacking a new rule, issued by the Consumer Financial Protection Bureau, that will let Americans bring class-action lawsuits against banks instead of being forced into arbitration. Without the rule, which is scheduled to apply to transactions next year, banks could continue to profit from abusive products and practices without ever facing a court challenge, and aggrieved customers would continue to be shunted into arbitration. Class-action lawsuits are often the only way to hold corporations to account for wrongdoing in which thousands or millions of customers lose amounts that may be meaningful for each customer, though not enough to warrant an individual fighting a corporation. Arbitration, in contrast, is so clearly stacked against customers that most people don’t even bother. And yet, arbitration has been the only recourse even in cases where customers were defrauded, like those caught up in the still-unfolding scandals at Wells Fargo who could not sue because of the bank’s mandatory arbitration requirement.
The first attempt to derail the rule failedrecently, but it underscored the administration’s support for industry arguments. Keith Noreika, a bank lawyer appointed by President Trump to oversee national banks until a Senate-confirmed regulator is in place, asked the financial protection bureau to delay the rule on the ground that more time was needed to determine if it would destabilize the banking system. The bureau refused, for good reason. The rule — which will cost banks about $1 billion a year out of more than $171 billion in profits, according to analysis by the bureau — does not threaten the banks’ survival; it only threatens their impunity. Moreover, neither the agency that Mr. Noreika temporarily heads, the Office of the Comptroller of the Currency, nor other financial regulators raised safety-and-soundness concerns during the long rule-making process.
Congressional Republicans continue to threaten the rule. Before their summer break began, House Republicans passed legislation to scrap it, using the fast-track procedures of the Congressional Review Act. Companion legislation has been introduced in the Senate. Before this year, the review act’s procedures had been used only once, by the Republican-controlled Congress of 2001, to invalidate a workplace safety rule from the Clinton administration. This year, Republicans have used it to roll back 14 rules finalized near the end of the Obama years, including labor and environmental protections. The difference this time is that they want to repeal a rule from Mr. Trump’s watch, albeit by an Obama-appointed regulator of the financial protection bureau, an agency Republicans love to loathe.
If Senate Republicans, once again blinded by their antipathy to President Barack Obama, vote to repeal this rule, they will join their House colleagues and the Trump administration in closing the courthouse door to vulnerable, victimized and defrauded Americans.
http://nyti.ms/2us4RlH
Last month, the federal government signaled its intention to roll back protections critical to the health, safety and welfare of vulnerable nursing home residents. The rule they want to eliminate bans the use of pre-dispute arbitration agreements.
These agreements require older adults, people with disabilities and their families to waive their rights to the judicial system before a dispute even arises. Then, any dispute, even abuse or neglect, and regardless of how egregiously they’ve been harmed, is forced into secretive arbitration proceedings.
Typical nursing home claims involve injuries such as pressure sores that lead to infection; amputated limbs; suffocation on bedrails and other restraints; choking;; sexual assault; renal failure and other conditions caused by dehydration; malnutrition; severe burns; gangrene; and painful, immobilizing muscle and joint problems resulting from long-term inactivity. All of these are avoidable conditions that are the result of negligence or even willful misconduct by long-term care facilities.
These forced arbitration agreements are presented to prospective residents and their families during the admission process, an extremely difficult and stressful time. Individuals typically feel compelled to sign because they are under extreme pressure to be admitted and the implied message is they must agree or be refused care. To make matters worse, under the recent government proposal, this message would no longer be implied. Nursing homes could refuse admission to a resident whose family, acting on their behalf, is unwilling to sign away their rights. This holds residents hostage – they must agree to give up their rights in order to have essential care and a place to live.
Author Robyn Grant is Director of Public Policy and Advocacy at The National Consumer Voice for Quality Long-Term Care and author Remington A. Gregg is Counsel for Civil Justice and Consumer Rights at Public Citizen.
Excerpt if from http://www.huffingtonpost.com/entry/protecting-our-vulnerable-from-abuse-and-neglect-the_us_5980c269e4b0d187a59690a0?section=us_contributor
These agreements require older adults, people with disabilities and their families to waive their rights to the judicial system before a dispute even arises. Then, any dispute, even abuse or neglect, and regardless of how egregiously they’ve been harmed, is forced into secretive arbitration proceedings.
Typical nursing home claims involve injuries such as pressure sores that lead to infection; amputated limbs; suffocation on bedrails and other restraints; choking;; sexual assault; renal failure and other conditions caused by dehydration; malnutrition; severe burns; gangrene; and painful, immobilizing muscle and joint problems resulting from long-term inactivity. All of these are avoidable conditions that are the result of negligence or even willful misconduct by long-term care facilities.
These forced arbitration agreements are presented to prospective residents and their families during the admission process, an extremely difficult and stressful time. Individuals typically feel compelled to sign because they are under extreme pressure to be admitted and the implied message is they must agree or be refused care. To make matters worse, under the recent government proposal, this message would no longer be implied. Nursing homes could refuse admission to a resident whose family, acting on their behalf, is unwilling to sign away their rights. This holds residents hostage – they must agree to give up their rights in order to have essential care and a place to live.
Author Robyn Grant is Director of Public Policy and Advocacy at The National Consumer Voice for Quality Long-Term Care and author Remington A. Gregg is Counsel for Civil Justice and Consumer Rights at Public Citizen.
Excerpt if from http://www.huffingtonpost.com/entry/protecting-our-vulnerable-from-abuse-and-neglect-the_us_5980c269e4b0d187a59690a0?section=us_contributor
DCCRC supports Public Citizen's recent week of action against the effort to jeopardize the health and safety of those living in assisted living and nursing homes by requiring pre-admission waivers of litigation rights
The waivers make it harder for seniors to expose neglect and abuse by nursing homes.
Almost a year ago, the Centers for Medicare and Medicaid Services (CMS) forced nursing homes to stop requiring residents to sign admission’s contracts that waived their legal right to go to court if harmed. This was an important step forward in the fight against forced arbitration as it gave power back to the residents if they were mistreated or harassed in their nursing home.
The Trump administration is trying to strip this common-sense reform. The administration approach would subject residents to forced arbitration clauses, an unfair and secretive process which can be used by nursing homes to cover up abuse.
The right to litigate and not be subject to forced pre-dispute arbitration is important to protect our seniors from being taken advantage of by the abuse and mistreatment by long-term care facilities.
Drafting credit: Peter Sheriff
Anthem restrictions on coverage for emergency room visits
Providers worry that the policy could cause patients with potentially life-threatening conditions to avoid care—and that the hard-line approach could violate federal law.
Anthem has deployed a reduced ER coverage policy in several of its state subsidiaries in regions that include Indiana and Missouri. The insurer said it will deny claims for minor injuries or conditions, like cuts and bruises, swimmer’s ear or athlete’s foot, that bring people to the emergency department, reports the Indianapolis Business Journal.
But physicians in those states worry that patients with potential dangerous symptoms, such as chest pain, may avoid care because they fear higher bills. Missouri provider groups, including the Missouri Hospital Association, the Missouri College of Emergency Physicians and the Missouri State Medical Association filed a letter (PDF) urging the state’s insurance commissioner to take a look at the policy.
“We see the Anthem policy as a cost-shifting tactic that will have a dangerous chilling effect on patients,” they wrote. “When policyholders learn that they might be held financially responsible for emergency department care, we worry some will delay or altogether forgo seeking vitally important and life-saving care at a time when they are most critically ill and vulnerable.”
http://www.fiercehealthcare.com/healthcare/providers-warn-anthem-s-new-er-policy-may-violate-federal-law
Providers worry that the policy could cause patients with potentially life-threatening conditions to avoid care—and that the hard-line approach could violate federal law.
Anthem has deployed a reduced ER coverage policy in several of its state subsidiaries in regions that include Indiana and Missouri. The insurer said it will deny claims for minor injuries or conditions, like cuts and bruises, swimmer’s ear or athlete’s foot, that bring people to the emergency department, reports the Indianapolis Business Journal.
But physicians in those states worry that patients with potential dangerous symptoms, such as chest pain, may avoid care because they fear higher bills. Missouri provider groups, including the Missouri Hospital Association, the Missouri College of Emergency Physicians and the Missouri State Medical Association filed a letter (PDF) urging the state’s insurance commissioner to take a look at the policy.
“We see the Anthem policy as a cost-shifting tactic that will have a dangerous chilling effect on patients,” they wrote. “When policyholders learn that they might be held financially responsible for emergency department care, we worry some will delay or altogether forgo seeking vitally important and life-saving care at a time when they are most critically ill and vulnerable.”
http://www.fiercehealthcare.com/healthcare/providers-warn-anthem-s-new-er-policy-may-violate-federal-law
The Center for Food Safety and other groups ongoing suit against the F.D.A. over a self-affirmation process for food ingredients
“The exemption [from FDA ingredient approval] was meant to cover ingredients that had long been used in the food supply, so that companies didn’t have to come in every time they made a new product,” said Tom Neltner, chemicals policy director at the Environmental Defense Fund, an advocacy group that is one of the plaintiffs in the lawsuit. “It wasn’t meant to allow companies to simply bypass the F.D.A."
A study by the Pew Charitable Trusts found in 2013 that the F.D.A. was unaware of roughly 1,000 of some 10,000 ingredients used in food because companies had used the self-affirmation process.
Credit: NYT For the CFS litigation details see: http://www.centerforfoodsafety.org/press-releases/4956/groups-sue-fda-to-protect-food-safety
“The exemption [from FDA ingredient approval] was meant to cover ingredients that had long been used in the food supply, so that companies didn’t have to come in every time they made a new product,” said Tom Neltner, chemicals policy director at the Environmental Defense Fund, an advocacy group that is one of the plaintiffs in the lawsuit. “It wasn’t meant to allow companies to simply bypass the F.D.A."
A study by the Pew Charitable Trusts found in 2013 that the F.D.A. was unaware of roughly 1,000 of some 10,000 ingredients used in food because companies had used the self-affirmation process.
Credit: NYT For the CFS litigation details see: http://www.centerforfoodsafety.org/press-releases/4956/groups-sue-fda-to-protect-food-safety
NYT: When big pharma does drug trials not for scientific discovery, but to validate proprietary copy-cat drugs
And these drugs often are not so different from one another.
Immunotherapy drugs that attack a protein known as PD-1 are approved for treatment of lung cancer, renal cell cancer, bladder cancer and Hodgkin’s disease, noted Dr. Richard Pazdur, director of the F.D.A.’s Oncology Center of Excellence.
Yet many pharmaceutical companies want their own anti-PD-1. Companies are hoping to combine immunotherapy drugs with other cancer drugs for added effect, and many do not want to have to rely on a competitor’s anti-PD-1 drug along with their own secondary drugs.
So in new trials, additional anti-PD-1 drugs are being tested all over again against the same cancers — a me-too business strategy taken to multibillion-dollar extremes.
“How many PD-1 antibodies does Planet Earth need?” wondered Dr. Roy Baynes, a senior vice president at Merck, which received approval for its first such drug in 2014.
Immunotherapy trials have proliferated so quickly that major medical centers are declining to furnish patients to them. The Yale Cancer Center participates in fewer than 10 percent of the immunotherapy trials it is asked to join.
The problem is that many of the trials are uninteresting from a scientific view, said Dr. Roy Herbst, the center’s chief of medical oncology. The companies sponsoring these trials are not addressing new research questions, he said; they are trying to get proprietary drugs approved.
https://www.nytimes.com/2017/08/12/health/cancer-drug-trials-encounter-a-problem-too-few-patients.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0www.nytimes.com/2017/08/12/health/cancer-drug-trials-encounter-a-problem-too-few-patients.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0
And these drugs often are not so different from one another.
Immunotherapy drugs that attack a protein known as PD-1 are approved for treatment of lung cancer, renal cell cancer, bladder cancer and Hodgkin’s disease, noted Dr. Richard Pazdur, director of the F.D.A.’s Oncology Center of Excellence.
Yet many pharmaceutical companies want their own anti-PD-1. Companies are hoping to combine immunotherapy drugs with other cancer drugs for added effect, and many do not want to have to rely on a competitor’s anti-PD-1 drug along with their own secondary drugs.
So in new trials, additional anti-PD-1 drugs are being tested all over again against the same cancers — a me-too business strategy taken to multibillion-dollar extremes.
“How many PD-1 antibodies does Planet Earth need?” wondered Dr. Roy Baynes, a senior vice president at Merck, which received approval for its first such drug in 2014.
Immunotherapy trials have proliferated so quickly that major medical centers are declining to furnish patients to them. The Yale Cancer Center participates in fewer than 10 percent of the immunotherapy trials it is asked to join.
The problem is that many of the trials are uninteresting from a scientific view, said Dr. Roy Herbst, the center’s chief of medical oncology. The companies sponsoring these trials are not addressing new research questions, he said; they are trying to get proprietary drugs approved.
https://www.nytimes.com/2017/08/12/health/cancer-drug-trials-encounter-a-problem-too-few-patients.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0www.nytimes.com/2017/08/12/health/cancer-drug-trials-encounter-a-problem-too-few-patients.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0
AARP Foundation-backs age discrimination in employment litigation:DONETTA RAYMOND, et al., Plaintiffs, v. SPIRIT AEROSYSTEMS HOLDINGS, INC., and SPIRIT AEROSYSTEMS, INC., Defendants.
United States District Court, D. Kansas.
Applicable Law: 28 U.S.C. § 451
Cause: 28 U.S.C. § 451 Employment Discrimination
Nature of Suit: 442 Civil Rights: Jobs
From June, 2017 court opinion:
Plaintiffs filed this collective action in July 2016, claiming Defendants wrongfully terminated their employment and/or later failed to consider them for new job openings because of their age and, in some cases, the older employees' (or family members') medical conditions and related medical expenses. In addition to the collective action claims under the Age Discrimination in Employment Act4 ("ADEA"), some Plaintiffs also assert individual ADEA claims, while other Plaintiffs claim their termination violated the Americans with Disabilities Act5 ("ADA") and/or the Family and Medical Leave Act6 ("FMLA").
http://www.leagle.com/decision/InFDCO20170703A86/Raymond%20v.%20Spirit%20AeroSystems%20Holdings,%20Inc.
United States District Court, D. Kansas.
Applicable Law: 28 U.S.C. § 451
Cause: 28 U.S.C. § 451 Employment Discrimination
Nature of Suit: 442 Civil Rights: Jobs
From June, 2017 court opinion:
Plaintiffs filed this collective action in July 2016, claiming Defendants wrongfully terminated their employment and/or later failed to consider them for new job openings because of their age and, in some cases, the older employees' (or family members') medical conditions and related medical expenses. In addition to the collective action claims under the Age Discrimination in Employment Act4 ("ADEA"), some Plaintiffs also assert individual ADEA claims, while other Plaintiffs claim their termination violated the Americans with Disabilities Act5 ("ADA") and/or the Family and Medical Leave Act6 ("FMLA").
http://www.leagle.com/decision/InFDCO20170703A86/Raymond%20v.%20Spirit%20AeroSystems%20Holdings,%20Inc.
Investment expert Jeremy Grantham says current great corporate power makes corporation profits high and stable
Excerpt from article at URL https://www.gmo.com/docs/default-source/public-commentary/gmo-quarterly-letter.pdf:
Corporate profitability is the key difference in higher pricing [of corporate stock] . . . . With higher margins, of course the market is going to sell at higher prices. So how permanent are these higher margins? . . . Here are some of the influences on margins (in thinking about them, consider not only the possibilities for change back to the old conditions, but also the likely speed of such change):
■ Increased globalization has no doubt increased the value of brands, and the US has much more than its fair share of both the old established brands of the Coca-Cola and J&J variety and the new ones like Apple, Amazon, and Facebook. Even much more modest domestic brands – wakeboard distributors would be a suitable example – have allowed for returns on required capital to handsomely improve by moving the capital intensive production to China and retaining only the brand management in the US. Impeding global trade today would decrease the advantages that have accrued to US corporations, but we can readily agree that any setback would be slow and reluctant, capitalism being what it is, compared to the steady gains of the last 20 years (particularly noticeable after China joined the WTO).
■ Steadily increasing corporate power over the last 40 years has been, I think it’s fair to say, the defining feature of the US government and politics in general. This has probably been a slight but growing negative for GDP growth and job creation, but has been good for corporate profit margins. And not evenly so, but skewed toward the larger and more politically savvy corporations. So that as new regulations proliferated, they tended to protect the large, established companies and hinder new entrants.
The durability of corporate power and resulting profitability is a good thing for investors over the next period of years, according to Grantham, but it is bad for productivity, bad for workers, and in the long run bad for the US economy. Charlie Rose recently quizzed Grantham on these points in an interview that can be found here:
https://charlierose.com/videos/30816
Posted by Don Allen Resnikoff
Excerpt from article at URL https://www.gmo.com/docs/default-source/public-commentary/gmo-quarterly-letter.pdf:
Corporate profitability is the key difference in higher pricing [of corporate stock] . . . . With higher margins, of course the market is going to sell at higher prices. So how permanent are these higher margins? . . . Here are some of the influences on margins (in thinking about them, consider not only the possibilities for change back to the old conditions, but also the likely speed of such change):
■ Increased globalization has no doubt increased the value of brands, and the US has much more than its fair share of both the old established brands of the Coca-Cola and J&J variety and the new ones like Apple, Amazon, and Facebook. Even much more modest domestic brands – wakeboard distributors would be a suitable example – have allowed for returns on required capital to handsomely improve by moving the capital intensive production to China and retaining only the brand management in the US. Impeding global trade today would decrease the advantages that have accrued to US corporations, but we can readily agree that any setback would be slow and reluctant, capitalism being what it is, compared to the steady gains of the last 20 years (particularly noticeable after China joined the WTO).
■ Steadily increasing corporate power over the last 40 years has been, I think it’s fair to say, the defining feature of the US government and politics in general. This has probably been a slight but growing negative for GDP growth and job creation, but has been good for corporate profit margins. And not evenly so, but skewed toward the larger and more politically savvy corporations. So that as new regulations proliferated, they tended to protect the large, established companies and hinder new entrants.
The durability of corporate power and resulting profitability is a good thing for investors over the next period of years, according to Grantham, but it is bad for productivity, bad for workers, and in the long run bad for the US economy. Charlie Rose recently quizzed Grantham on these points in an interview that can be found here:
https://charlierose.com/videos/30816
Posted by Don Allen Resnikoff
States Can Join ACA Subsidies Case: DC Circ.
The D.C. Circuit ruled late Tuesday that 17 states and the District of Columbia to join litigation over Affordable Care Act subsidies. The litigation goal is to derail efforts by the Trump administration to halt the payments and weaken regional insurance markets.
Excerpts from the States' Motion:
In this litigation, the House of Representatives attacks a critical feature of the Patient Protection and Affordable Care Act—landmark federal legislation that has made affordable health insurance coverage available to nearly 20 million Americans, many for the first time. If successful, the suit could—to use the President’s expression—“explode” the entire Act.
Until recently, States and their residents could rely on the Executive Branch to respond to this attack. Now, events and statements, including from the President himself, have made clear that any such reliance is misplaced. The States of California, New York, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, Pennsylvania, Vermont, and Washington, and the District of Columbia move to intervene to ensure an effective defense against the claims made in this case and to protect the interests of millions of state residents affected by this appeal.
* * *
The district court’s ruling would destroy this design by eliminating the permanent appropriation Congress intended for cost-sharing reduction payments. Payments would cease immediately in the absence of a specific appropriation; and any future payments would be subject to the unpredictability of the appropriations process. That would directly subvert the ACA, injuring States, consumers, and the entire healthcare system. The States thus have a vital interest in seeking reversal or vacatur of the district court’s decision.
See the Court's Order: https://dlbjbjzgnk95t.cloudfront.net/0897000/897941/document.pdf
See the States' Motion: https://dlbjbjzgnk95t.cloudfront.net/0897000/897941/document%20(1).pdf
The D.C. Circuit ruled late Tuesday that 17 states and the District of Columbia to join litigation over Affordable Care Act subsidies. The litigation goal is to derail efforts by the Trump administration to halt the payments and weaken regional insurance markets.
Excerpts from the States' Motion:
In this litigation, the House of Representatives attacks a critical feature of the Patient Protection and Affordable Care Act—landmark federal legislation that has made affordable health insurance coverage available to nearly 20 million Americans, many for the first time. If successful, the suit could—to use the President’s expression—“explode” the entire Act.
Until recently, States and their residents could rely on the Executive Branch to respond to this attack. Now, events and statements, including from the President himself, have made clear that any such reliance is misplaced. The States of California, New York, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Mexico, Pennsylvania, Vermont, and Washington, and the District of Columbia move to intervene to ensure an effective defense against the claims made in this case and to protect the interests of millions of state residents affected by this appeal.
* * *
The district court’s ruling would destroy this design by eliminating the permanent appropriation Congress intended for cost-sharing reduction payments. Payments would cease immediately in the absence of a specific appropriation; and any future payments would be subject to the unpredictability of the appropriations process. That would directly subvert the ACA, injuring States, consumers, and the entire healthcare system. The States thus have a vital interest in seeking reversal or vacatur of the district court’s decision.
See the Court's Order: https://dlbjbjzgnk95t.cloudfront.net/0897000/897941/document.pdf
See the States' Motion: https://dlbjbjzgnk95t.cloudfront.net/0897000/897941/document%20(1).pdf
NYT: How Trump can undermine ACA
What Trump can do:
o Weaken enforcement of the individual mandate.
o Impose work requirements for Medicaid recipients.
o Fail to do advertising or outreach.
o Make tax credits for premiums less generous.
o Defund subsidies that help people pay out-of-pocket costs.
o Redefine essential health benefits.
See https://www.nytimes.com/interactive/2017/07/19/us/what-trump-can-do-to-let-obamacare-fail.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0NOT IN PROGRES
What Trump can do:
o Weaken enforcement of the individual mandate.
o Impose work requirements for Medicaid recipients.
o Fail to do advertising or outreach.
o Make tax credits for premiums less generous.
o Defund subsidies that help people pay out-of-pocket costs.
o Redefine essential health benefits.
See https://www.nytimes.com/interactive/2017/07/19/us/what-trump-can-do-to-let-obamacare-fail.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news&_r=0NOT IN PROGRES
Public Citizen Group Letter in Opposition to Proposed Revisions to CMS Arbitration Rule
August 7, 2017
Honorable Seema Verma
U.S. Centers for Medicare & Medicaid Services
Administrator
7500 Security Boulevard
Baltimore, MD 21244
Re: CMS—3342-P, Comments Opposing Changes to Strip Legal Rights from Vulnerable Residents in Long-Term Care Facilities
The undersigned organizations dedicated to protecting the health, safety, and welfare of individuals, including seniors, condemn in the strongest possible terms proposed changes to strip legal rights from vulnerable residents in long-term care (LTC) facilities. This cruel proposed rule would repeal current Centers for Medicare & Medicaid Services (CMS) regulations, finalized less than a year ago, prohibiting nursing homes and other LTC facilities from forcing patients into signing pre-dispute arbitration clauses. Moreover, the new proposal would allow these facilities to require a signed forced arbitration agreement as a condition of residing there, which is expressly prohibited by the current rule. Placing a parent or loved one in a nursing home is already one of the most difficult things anyone will ever have to do in life. But forcing the patient or family member to then sign something that violates the resident’s legal rights should they suffer future abuse or serious neglect is a horrific thing to do to families. This proposed rule is a disturbing new direction for CMS, which should be protecting patients, not making it easier for facilities to harm them and cover it up.
In October 2016, CMS finalized a rule banning forced arbitration agreements in nursing home and long-term care contracts, ensuring residents who were harmed would have access to the courts, and that facilities would be properly held accountable for abuse, serious neglect, sexual assault, or other harms. When CMS wisely finalized its 2016 rule, it did so after examining years of evidence and studies showing increasing abuse and neglect at nursing homes and the need for more accountability. During the comment period for the 2016 rule, CMS said that forced arbitration was supported by industry alone, and that “members of the public, advocates, and members of the legal community, predominantly wanted a prohibition on ‘pre-dispute’ arbitration agreements.” In addition, 34 senators and 16 state attorneys general urged CMS to prohibit forced arbitration agreements because of the coercive nature of the process during admissions, the lack of a neutral arbitrator, and the secretive nature of the proceedings.
Indeed, no amount of “transparency” can make these contracts fair or voluntary. Forced arbitration is a private, secretive rigged system controlled by the at-fault facility. Residents have limited access to important documents that may help their claim. Nursing home arbitration companies have a financial incentive to side with repeat players who generate most of the cases they handle. There is no public record to inform industry practice or to notify the public or regulators. If cases are heard in arbitration, dangerous facilities can prolong misconduct and suppress information about harmful conditions and practices for years.
Forced arbitration agreements are never “voluntary” for the resident. Families cannot refuse what a nursing home is presenting to them, no matter how “visible” or understandable the provision is. During any admission process, families are experiencing enormous stress and pressure to get their loved one into a LTC. Indeed, even the court that granted last year’s injunction against the 2016 rule conceded that “the practice of executing arbitration contracts during the nursing home admissions process raises valid concerns, on a public policy level, since many residents and their relatives are ‘at wit’s end’ and prepared to sign anything to gain admission.” This coercion would be made even worse under the new proposed rule, which appallingly would allow nursing homes to make signing such a form a condition of admission. Providing a senior or other LTC resident with a “plainly written” document means little when one is coerced into signing it or be denied admission or kicked out of their nursing home.
In 2016, CMS finalized a sensible and fully-supported rule banning forced arbitration clauses in LTC contracts. There is absolutely no reason to undo the agency’s careful work to develop this final rule. We urge you to protect the health and safety of seniors, other LTC residents, and the public, reverse your decision to eliminate these important protections, and reject this extraordinarily-misguided new proposed rule.
Sincerely,
Public Citizen
August 7, 2017
Honorable Seema Verma
U.S. Centers for Medicare & Medicaid Services
Administrator
7500 Security Boulevard
Baltimore, MD 21244
Re: CMS—3342-P, Comments Opposing Changes to Strip Legal Rights from Vulnerable Residents in Long-Term Care Facilities
The undersigned organizations dedicated to protecting the health, safety, and welfare of individuals, including seniors, condemn in the strongest possible terms proposed changes to strip legal rights from vulnerable residents in long-term care (LTC) facilities. This cruel proposed rule would repeal current Centers for Medicare & Medicaid Services (CMS) regulations, finalized less than a year ago, prohibiting nursing homes and other LTC facilities from forcing patients into signing pre-dispute arbitration clauses. Moreover, the new proposal would allow these facilities to require a signed forced arbitration agreement as a condition of residing there, which is expressly prohibited by the current rule. Placing a parent or loved one in a nursing home is already one of the most difficult things anyone will ever have to do in life. But forcing the patient or family member to then sign something that violates the resident’s legal rights should they suffer future abuse or serious neglect is a horrific thing to do to families. This proposed rule is a disturbing new direction for CMS, which should be protecting patients, not making it easier for facilities to harm them and cover it up.
In October 2016, CMS finalized a rule banning forced arbitration agreements in nursing home and long-term care contracts, ensuring residents who were harmed would have access to the courts, and that facilities would be properly held accountable for abuse, serious neglect, sexual assault, or other harms. When CMS wisely finalized its 2016 rule, it did so after examining years of evidence and studies showing increasing abuse and neglect at nursing homes and the need for more accountability. During the comment period for the 2016 rule, CMS said that forced arbitration was supported by industry alone, and that “members of the public, advocates, and members of the legal community, predominantly wanted a prohibition on ‘pre-dispute’ arbitration agreements.” In addition, 34 senators and 16 state attorneys general urged CMS to prohibit forced arbitration agreements because of the coercive nature of the process during admissions, the lack of a neutral arbitrator, and the secretive nature of the proceedings.
Indeed, no amount of “transparency” can make these contracts fair or voluntary. Forced arbitration is a private, secretive rigged system controlled by the at-fault facility. Residents have limited access to important documents that may help their claim. Nursing home arbitration companies have a financial incentive to side with repeat players who generate most of the cases they handle. There is no public record to inform industry practice or to notify the public or regulators. If cases are heard in arbitration, dangerous facilities can prolong misconduct and suppress information about harmful conditions and practices for years.
Forced arbitration agreements are never “voluntary” for the resident. Families cannot refuse what a nursing home is presenting to them, no matter how “visible” or understandable the provision is. During any admission process, families are experiencing enormous stress and pressure to get their loved one into a LTC. Indeed, even the court that granted last year’s injunction against the 2016 rule conceded that “the practice of executing arbitration contracts during the nursing home admissions process raises valid concerns, on a public policy level, since many residents and their relatives are ‘at wit’s end’ and prepared to sign anything to gain admission.” This coercion would be made even worse under the new proposed rule, which appallingly would allow nursing homes to make signing such a form a condition of admission. Providing a senior or other LTC resident with a “plainly written” document means little when one is coerced into signing it or be denied admission or kicked out of their nursing home.
In 2016, CMS finalized a sensible and fully-supported rule banning forced arbitration clauses in LTC contracts. There is absolutely no reason to undo the agency’s careful work to develop this final rule. We urge you to protect the health and safety of seniors, other LTC residents, and the public, reverse your decision to eliminate these important protections, and reject this extraordinarily-misguided new proposed rule.
Sincerely,
Public Citizen
Letter from Consumers Union On CFPB Rule Concerning Forced Arbitration
July 21, 2017
Dear Representative:
Consumers Union, the policy and mobilization arm of Consumer Reports, urges you to support the new Consumer Financial Protection Bureau’s rule to restore the rights of consumers to hold payday lenders, credit card companies, and other financial companies accountable under the law when they commit widespread wrongdoing, such as the fraud perpetrated by Wells Fargo on millions of its unsuspecting customers. This important, long-awaited rule stops lenders from forcing consumers to take their claims individually to private arbitration when they would prefer to join together in a class action in court under established legal procedures.
Contrary to what many opponents of this rule are claiming, this rule is a measured and thoroughly considered response to the growing problem of forced arbitration, in which consumers sign away their legal rights just by signing up for a loan or financial service – often unknowingly agreeing to a paragraph hidden in the fine print, and always without having any choice in the matter.
The CFPB’s rule targets one particularly harmful aspect of forced arbitration, when it shields financial companies from accountability for widespread wrongdoing. This is an area where the CFPB found the evidence most clear and compelling.
As is explained in the CFPB’s description and analysis accompanying the rule, the cumulative harm from widespread fraud or other unlawful misconduct – and the unjust enrichment to the wrongdoer – can be enormous, but the amount of money at stake for an individual victim is quite often too small to pay for the cost of arbitration. The only practical way for consumers to hold a lender accountable under the law is by joining together in a class action. In fact, that is one of the key purposes for which the class action procedure was created in our legal system.
Another reason the class action procedure was created is to help companies facing legal action by numerous consumers for the same alleged wrongful conduct. Dealing with those claims all at once is far more efficient, and less costly to the company, than dealing with them individually. Unless, that is, the claims cannot be economically pursued individually. In that case, blocking the class action amounts to shielding the company from legal accountability. That is unfortunately what has resulted from the use of forced arbitration.
In issuing this rule, the CFPB is acting at the express statutory direction of Congress in the Dodd-Frank Act, the law creating the CFPB. The rule is based on a thorough three-year examination of the use of forced arbitration agreements in consumer financial services, in which the CFPB asked for and considered input from the full range of stakeholders who could potentially be affected. Based on that examination, the CFPB issued an extensive report, then asked for further input from all concerned. The proposed rule was published more than a year ago, after which there was yet another extended opportunity to give input.
Importantly, and also contrary to what many opponents of the rule are claiming, the rule in no way restricts the freedom of a lender and a consumer to agree to use arbitration as an alternative means for resolving a dispute – as long as they make that agreement after the dispute arises, when the consumer knows what is at stake and can decide whether the alternative being offered is fair and workable. Giving the consumer a genuine choice also means the lender has the incentive to make sure the alternative is fair and workable, so informed consumers will have a reason to choose it.
In contrast, allowing lenders to unilaterally impose arbitration on all consumers, at the time they sign up for the loan or credit card or other service, in the fine print of the paperwork or electronic terms of service, is no choice. Forced arbitration means that the lender and its lawyers are free to construct an arbitration process that is unfairly slanted in favor of the lender. The consumer is utterly at the mercy of the lender.
Arbitration proceedings and their outcomes are generally required to be kept secret. Whoever designs the process also dictates what the rules are. Established law can be disregarded entirely. There is no right of appeal. It’s one thing if the two sides both agree on using arbitration, after taking a close look and satisfying themselves that the process they are agreeing to is fair and workable. It’s another thing entirely if the side with all the power forces it on the other side.
The 2015 CFPB report sets forth the basis for this rulemaking clearly and compellingly. And the description and analysis accompanying the final rule explain in great detail the CFPB’s careful assessment of the input and concerns and alternatives presented during the multi-year rulemaking process, and how and why the CFPB arrived at the final rule.
We urge you to support this important rule, and to allow it to take effect so that consumers have the right and ability to protect themselves and hold lenders accountable for widespread unlawful conduct.
Respectfully,
/s/
George P. Slover
Senior Policy Counsel
Consumers Union
July 21, 2017
Dear Representative:
Consumers Union, the policy and mobilization arm of Consumer Reports, urges you to support the new Consumer Financial Protection Bureau’s rule to restore the rights of consumers to hold payday lenders, credit card companies, and other financial companies accountable under the law when they commit widespread wrongdoing, such as the fraud perpetrated by Wells Fargo on millions of its unsuspecting customers. This important, long-awaited rule stops lenders from forcing consumers to take their claims individually to private arbitration when they would prefer to join together in a class action in court under established legal procedures.
Contrary to what many opponents of this rule are claiming, this rule is a measured and thoroughly considered response to the growing problem of forced arbitration, in which consumers sign away their legal rights just by signing up for a loan or financial service – often unknowingly agreeing to a paragraph hidden in the fine print, and always without having any choice in the matter.
The CFPB’s rule targets one particularly harmful aspect of forced arbitration, when it shields financial companies from accountability for widespread wrongdoing. This is an area where the CFPB found the evidence most clear and compelling.
As is explained in the CFPB’s description and analysis accompanying the rule, the cumulative harm from widespread fraud or other unlawful misconduct – and the unjust enrichment to the wrongdoer – can be enormous, but the amount of money at stake for an individual victim is quite often too small to pay for the cost of arbitration. The only practical way for consumers to hold a lender accountable under the law is by joining together in a class action. In fact, that is one of the key purposes for which the class action procedure was created in our legal system.
Another reason the class action procedure was created is to help companies facing legal action by numerous consumers for the same alleged wrongful conduct. Dealing with those claims all at once is far more efficient, and less costly to the company, than dealing with them individually. Unless, that is, the claims cannot be economically pursued individually. In that case, blocking the class action amounts to shielding the company from legal accountability. That is unfortunately what has resulted from the use of forced arbitration.
In issuing this rule, the CFPB is acting at the express statutory direction of Congress in the Dodd-Frank Act, the law creating the CFPB. The rule is based on a thorough three-year examination of the use of forced arbitration agreements in consumer financial services, in which the CFPB asked for and considered input from the full range of stakeholders who could potentially be affected. Based on that examination, the CFPB issued an extensive report, then asked for further input from all concerned. The proposed rule was published more than a year ago, after which there was yet another extended opportunity to give input.
Importantly, and also contrary to what many opponents of the rule are claiming, the rule in no way restricts the freedom of a lender and a consumer to agree to use arbitration as an alternative means for resolving a dispute – as long as they make that agreement after the dispute arises, when the consumer knows what is at stake and can decide whether the alternative being offered is fair and workable. Giving the consumer a genuine choice also means the lender has the incentive to make sure the alternative is fair and workable, so informed consumers will have a reason to choose it.
In contrast, allowing lenders to unilaterally impose arbitration on all consumers, at the time they sign up for the loan or credit card or other service, in the fine print of the paperwork or electronic terms of service, is no choice. Forced arbitration means that the lender and its lawyers are free to construct an arbitration process that is unfairly slanted in favor of the lender. The consumer is utterly at the mercy of the lender.
Arbitration proceedings and their outcomes are generally required to be kept secret. Whoever designs the process also dictates what the rules are. Established law can be disregarded entirely. There is no right of appeal. It’s one thing if the two sides both agree on using arbitration, after taking a close look and satisfying themselves that the process they are agreeing to is fair and workable. It’s another thing entirely if the side with all the power forces it on the other side.
The 2015 CFPB report sets forth the basis for this rulemaking clearly and compellingly. And the description and analysis accompanying the final rule explain in great detail the CFPB’s careful assessment of the input and concerns and alternatives presented during the multi-year rulemaking process, and how and why the CFPB arrived at the final rule.
We urge you to support this important rule, and to allow it to take effect so that consumers have the right and ability to protect themselves and hold lenders accountable for widespread unlawful conduct.
Respectfully,
/s/
George P. Slover
Senior Policy Counsel
Consumers Union
Democrats open debate: Cracking Down on Corporate Monopolies and the Abuse of Economic and Political Power
Excerpt:
Over the past thirty years, growing corporate influence and consolidation has led to reductions in competition, choice for consumers, and bargaining power for workers. The extensive concentration of power in the hands of a few corporations hurts wages, undermines job growth, and threatens to squeeze out small businesses, suppliers, and new, innovative competitors. It means higher prices and less choice for the things the American people buy every day.
Vigorous, free, and fair competition is a pro-business, pro-consumer, pro-worker approach. The American people deserve a Better Deal that lowers the costs of everyday expenses, putting economic and political power back in their hands and giving them more choices. Over the last thirty years, courts and permissive regulators have allowed large companies to get larger, resulting in higher prices and limited consumer choice in daily expenses such as travel, cable, and food and beverages. And because concentrated market power leads to concentrated political power, these companies deploy armies of lobbyists to increase their stranglehold on Washington.
A Better Deal on competition means that we will revisit our antitrust laws to ensure that the economic freedom of all Americans—consumers, workers, and small businesses—come before big corporations that are getting even bigger. Specifically, the Better Deal plan will:
Prevent big mergers that would harm consumers, workers, and competition.
Require regulators to review mergers after completion to ensure they continue to promote competition.
Create a 21st century ‘Trust Buster’ to stop abusive corporate conduct and the exploitation of market power where it already exists.
Full Democratic statement: http://www.democraticleader.gov/wp-content/uploads/2017/07/A-Better-Deal-on-Competition-and-Costs.pdf
Excerpt:
Over the past thirty years, growing corporate influence and consolidation has led to reductions in competition, choice for consumers, and bargaining power for workers. The extensive concentration of power in the hands of a few corporations hurts wages, undermines job growth, and threatens to squeeze out small businesses, suppliers, and new, innovative competitors. It means higher prices and less choice for the things the American people buy every day.
Vigorous, free, and fair competition is a pro-business, pro-consumer, pro-worker approach. The American people deserve a Better Deal that lowers the costs of everyday expenses, putting economic and political power back in their hands and giving them more choices. Over the last thirty years, courts and permissive regulators have allowed large companies to get larger, resulting in higher prices and limited consumer choice in daily expenses such as travel, cable, and food and beverages. And because concentrated market power leads to concentrated political power, these companies deploy armies of lobbyists to increase their stranglehold on Washington.
A Better Deal on competition means that we will revisit our antitrust laws to ensure that the economic freedom of all Americans—consumers, workers, and small businesses—come before big corporations that are getting even bigger. Specifically, the Better Deal plan will:
Prevent big mergers that would harm consumers, workers, and competition.
Require regulators to review mergers after completion to ensure they continue to promote competition.
Create a 21st century ‘Trust Buster’ to stop abusive corporate conduct and the exploitation of market power where it already exists.
Full Democratic statement: http://www.democraticleader.gov/wp-content/uploads/2017/07/A-Better-Deal-on-Competition-and-Costs.pdf
The Trump Treasury Report and "too big" banks
In its recent 149-page report on regulation of financial institutions the Trump Treasury mainly recommends reducing oversight of large financial institutions, providing an array of measures offering regulatory relief. The key Trump Treasury Report thought on the problem of “too big” banks seems to be this:
Excessive regulation imposes costs on institutions that can create incentives for institutions to grow larger than conditions would otherwise require. To the extent regulatory costs can be spread over a large number of customers, regulation can create a barrier to entry for smaller firms and confer competitive advantages on the largest institutions. Tailoring regulation therefore is essential to ensure that regulation does not play a role in fostering too-big-to-fail institutions.
Nellie Liang of Brookings is sympathetic to proposals that reduce regulation of small banks, but worries about Report “proposals that would effectively relax capital requirements for the largest, most complex financial institutions [that] would make the system more prone to another financial crisis with significant risks to the economy.” See https://www.brookings.edu/blog/up-front/2017/06/13/what-treasurys-financial-regulation-report-gets-right-and-where-it-goes-too-far/
The Treasury Report seems consistent with Treasury chief Steven Mnuchin’s testimony to Congress in May, when he distanced the Trump Administration from a populist push to break up the nation's biggest banks. During a Senate hearing where Sen. Elizabeth Warren (D-Mass.) pressed Mnuchin on Administration policy, Mnuchin said splitting up the banks "would be a huge mistake."
Posted by Don Allen Resnikoff
In its recent 149-page report on regulation of financial institutions the Trump Treasury mainly recommends reducing oversight of large financial institutions, providing an array of measures offering regulatory relief. The key Trump Treasury Report thought on the problem of “too big” banks seems to be this:
Excessive regulation imposes costs on institutions that can create incentives for institutions to grow larger than conditions would otherwise require. To the extent regulatory costs can be spread over a large number of customers, regulation can create a barrier to entry for smaller firms and confer competitive advantages on the largest institutions. Tailoring regulation therefore is essential to ensure that regulation does not play a role in fostering too-big-to-fail institutions.
Nellie Liang of Brookings is sympathetic to proposals that reduce regulation of small banks, but worries about Report “proposals that would effectively relax capital requirements for the largest, most complex financial institutions [that] would make the system more prone to another financial crisis with significant risks to the economy.” See https://www.brookings.edu/blog/up-front/2017/06/13/what-treasurys-financial-regulation-report-gets-right-and-where-it-goes-too-far/
The Treasury Report seems consistent with Treasury chief Steven Mnuchin’s testimony to Congress in May, when he distanced the Trump Administration from a populist push to break up the nation's biggest banks. During a Senate hearing where Sen. Elizabeth Warren (D-Mass.) pressed Mnuchin on Administration policy, Mnuchin said splitting up the banks "would be a huge mistake."
Posted by Don Allen Resnikoff
Missing paperwork could wipe out billions in private student loan debt
POSTED JUL 18, 2017 09:58 AM CDT
BY DEBRA CASSENS WEISS
One of the largest owners of private student loans is struggling to show it has the necessary paperwork to prove ownership of loans that have gone into collection.
Tens of thousands of people whose loans are held by National Collegiate Student Loan Trusts could have their debts wiped out because of the missing paperwork, the New York Times DealBook blog reports.
The troubled loans that have gone into default total at least $5 billion. Most borrowers who are sued either default or reach settlements. But some cases that are being fought by lawyers have revealed the problems.
Judges throughout the country have already tossed dozens of collection lawsuits filed against borrowers because of missing documents. According to DealBook’s review of court records, “many other collection cases are deeply flawed, with incomplete ownership records and mass-produced documentation.”
The paperwork documenting the chain of loan ownership disappeared as the bank loans were bundled together and sold to investors through the securitization process. The debt collector who typically sues, Transworld Systems, usually swears to the accuracy of loan records in its court papers.
Credit: http://www.abajournal.com/news/article/missing_paperwork_could_wipe_out_private_student_loan_debt_for_tens_of_thou/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
POSTED JUL 18, 2017 09:58 AM CDT
BY DEBRA CASSENS WEISS
One of the largest owners of private student loans is struggling to show it has the necessary paperwork to prove ownership of loans that have gone into collection.
Tens of thousands of people whose loans are held by National Collegiate Student Loan Trusts could have their debts wiped out because of the missing paperwork, the New York Times DealBook blog reports.
The troubled loans that have gone into default total at least $5 billion. Most borrowers who are sued either default or reach settlements. But some cases that are being fought by lawyers have revealed the problems.
Judges throughout the country have already tossed dozens of collection lawsuits filed against borrowers because of missing documents. According to DealBook’s review of court records, “many other collection cases are deeply flawed, with incomplete ownership records and mass-produced documentation.”
The paperwork documenting the chain of loan ownership disappeared as the bank loans were bundled together and sold to investors through the securitization process. The debt collector who typically sues, Transworld Systems, usually swears to the accuracy of loan records in its court papers.
Credit: http://www.abajournal.com/news/article/missing_paperwork_could_wipe_out_private_student_loan_debt_for_tens_of_thou/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email
2nd Circuit explanation of why it voided LIBOR convictions
In the United States Court of Appeals for the Second Circuit DECIDED: JULY 19, 2017
This case—the first criminal appeal related to the London Interbank Offered Rate (“LIBOR”) to reach this (or an:y) Court of Appeals—presents the question, among others, whether testimony given by an individual involuntarily under the legal compulsion of a foreign power may be used against that individual in a criminal case in an American court. As employees in the London office of Coöperatieve Centrale Raiffeisen‐Boerenleenbank B.A. in the 2000s, defendants‐appellants Anthony Allen and Anthony Conti (“Defendants”) played roles in that bank’s LIBOR submission process during the now‐well‐documented heyday of the rate’s manipulation.
Defendants, each a resident and citizen of the United Kingdom, and both of whom had earlier given compelled testimony in that country, were tried and convicted in the United States before the United States District Court for the Southern District of New York (Jed S. Rakoff, Judge) for wire fraud and conspiracy to commit wire fraud and bank fraud. While this appeal raises a number of substantial issues, we address only the Fifth Amendment issue, and conclude as follows.
First, the Fifth Amendment’s prohibition on the use of compelled testimony in American criminal proceedings applies even when a foreign sovereign has compelled the testimony.
Second, when the government makes use of a witness who had substantial exposure to a defendant’s compelled testimony, it is required under Kastigar v. United States, 406 U.S. 441 (1972), to prove, 3 at a minimum, that the witness’s review of the compelled testimony did not shape, alter, or affect the evidence used by the government.
Third, a bare, generalized denial of taint from a witness who has materially altered his or her testimony after being substantially exposed to a defendant’s compelled testimony is insufficient as a matter of law to sustain the prosecution’s burden of proof.
Fourth, in this prosecution, Defendants’ compelled testimony was “used” against them, and this impermissible use before the petit and grand juries was not harmless beyond a reasonable doubt. Accordingly, we REVERSE the judgments of conviction and hereby DISMISS the indictment.
Full opinion: http://www.ca2.uscourts.gov/decisions/isysquery/14823406-b96d-48c1-97dc-f19ed4cd84a0/1/doc/16-898_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/14823406-b96d-48c1-97dc-f19ed4cd84a0/1/hilite/
In the United States Court of Appeals for the Second Circuit DECIDED: JULY 19, 2017
This case—the first criminal appeal related to the London Interbank Offered Rate (“LIBOR”) to reach this (or an:y) Court of Appeals—presents the question, among others, whether testimony given by an individual involuntarily under the legal compulsion of a foreign power may be used against that individual in a criminal case in an American court. As employees in the London office of Coöperatieve Centrale Raiffeisen‐Boerenleenbank B.A. in the 2000s, defendants‐appellants Anthony Allen and Anthony Conti (“Defendants”) played roles in that bank’s LIBOR submission process during the now‐well‐documented heyday of the rate’s manipulation.
Defendants, each a resident and citizen of the United Kingdom, and both of whom had earlier given compelled testimony in that country, were tried and convicted in the United States before the United States District Court for the Southern District of New York (Jed S. Rakoff, Judge) for wire fraud and conspiracy to commit wire fraud and bank fraud. While this appeal raises a number of substantial issues, we address only the Fifth Amendment issue, and conclude as follows.
First, the Fifth Amendment’s prohibition on the use of compelled testimony in American criminal proceedings applies even when a foreign sovereign has compelled the testimony.
Second, when the government makes use of a witness who had substantial exposure to a defendant’s compelled testimony, it is required under Kastigar v. United States, 406 U.S. 441 (1972), to prove, 3 at a minimum, that the witness’s review of the compelled testimony did not shape, alter, or affect the evidence used by the government.
Third, a bare, generalized denial of taint from a witness who has materially altered his or her testimony after being substantially exposed to a defendant’s compelled testimony is insufficient as a matter of law to sustain the prosecution’s burden of proof.
Fourth, in this prosecution, Defendants’ compelled testimony was “used” against them, and this impermissible use before the petit and grand juries was not harmless beyond a reasonable doubt. Accordingly, we REVERSE the judgments of conviction and hereby DISMISS the indictment.
Full opinion: http://www.ca2.uscourts.gov/decisions/isysquery/14823406-b96d-48c1-97dc-f19ed4cd84a0/1/doc/16-898_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/14823406-b96d-48c1-97dc-f19ed4cd84a0/1/hilite/
Newspapers to bid for antitrust exemption to tackle Google and Facebook
From CPI
The news industry is banding together to seek a limited antitrust exemption from Congress in an effort to fend off growing competition from Facebook and Google.
Traditional competitors including The Washington Post, The Wall Street Journal and The New York Times, as well as a host of smaller print and online publications, will temporarily set aside their differences this week and appeal to federal lawmakers to let them negotiate collectively with the technology giants to safeguard the industry.
Antitrust laws traditionally prevent companies from forming such an alliance which could see them becoming over-dominant in a particular sector. However, the media companies are hoping that Congress will look favorably on a temporary exemption, particularly given the recent clampdown on the technology industry which saw Google slapped with a US$2.7 billion antitrust fine.
The campaign is led by newspaper industry trade group News Media Alliance and it is intended to help the industry collaborate in order to regain market share from Facebook and Google, which have been swooping in on newspapers’ distribution and advertising revenues.
The two companies currently command 70% of the US$73 billion digital advertising industry in the US, according to new research from the Pew Research Centre. Meanwhile, US newspaper ad revenue in 2016 was US$18 billion from US$50 billion a decade ago.
The News Media Alliance argue that, despite their growing dominance in news distribution, Facebook and Google lack the resources and ability to guarantee the accuracy of reporting upheld by reputable news associations. Facebook in particular came under fire during the 2016 US presidential election when it failed to suitably monitor the news content on its platform and was seen to host unverified articles.
“(Facebook and Google) don’t employ reporters: They don’t dig through public records to uncover corruption, send correspondents into war zones, or attend last night’s game to get the highlights. They expect an economically squeezed news industry to do that costly work for them,” David Chavern, president and chief executive of the News Media Alliance, wrote in an opinion piece published Sunday in the Wall Street Journal.
Full Content: Wall Street Journal (pay wall)
From CPI
The news industry is banding together to seek a limited antitrust exemption from Congress in an effort to fend off growing competition from Facebook and Google.
Traditional competitors including The Washington Post, The Wall Street Journal and The New York Times, as well as a host of smaller print and online publications, will temporarily set aside their differences this week and appeal to federal lawmakers to let them negotiate collectively with the technology giants to safeguard the industry.
Antitrust laws traditionally prevent companies from forming such an alliance which could see them becoming over-dominant in a particular sector. However, the media companies are hoping that Congress will look favorably on a temporary exemption, particularly given the recent clampdown on the technology industry which saw Google slapped with a US$2.7 billion antitrust fine.
The campaign is led by newspaper industry trade group News Media Alliance and it is intended to help the industry collaborate in order to regain market share from Facebook and Google, which have been swooping in on newspapers’ distribution and advertising revenues.
The two companies currently command 70% of the US$73 billion digital advertising industry in the US, according to new research from the Pew Research Centre. Meanwhile, US newspaper ad revenue in 2016 was US$18 billion from US$50 billion a decade ago.
The News Media Alliance argue that, despite their growing dominance in news distribution, Facebook and Google lack the resources and ability to guarantee the accuracy of reporting upheld by reputable news associations. Facebook in particular came under fire during the 2016 US presidential election when it failed to suitably monitor the news content on its platform and was seen to host unverified articles.
“(Facebook and Google) don’t employ reporters: They don’t dig through public records to uncover corruption, send correspondents into war zones, or attend last night’s game to get the highlights. They expect an economically squeezed news industry to do that costly work for them,” David Chavern, president and chief executive of the News Media Alliance, wrote in an opinion piece published Sunday in the Wall Street Journal.
Full Content: Wall Street Journal (pay wall)
From Friends of the Capital Crescent Trail (and not friends of a Purple MTA line)
Excerpt of email:
On June 26, Judge Leon denied MTA's request to move forward with construction of the Purple Line even though MTA has not undertaken the required Supplemental Environmental Impact Statement (SEIS).
Our [Friends] filing, amply supported with detailed expert declarations, demonstrated to the Court why moving ahead with Purple Line construction would not be in the public interest and is not supported by the law.
We have also filed a 59e motion asking Federal Judge Leon for clarification or reconsideration on two very important issues he did not address in detail- air and noise pollution and their effects on pedestrians, cyclists, schools, residents, and parks and historic sites, which are especially protected by Federal Transportation law.
Meanwhile, MTA continues to seek to litigate its way out of its obligations and to move the case to the US Court of Appeals!
In our vigorous response filing with the US Court of Appeals, on July 3, 2017, we opposed Maryland's motion to "stay", or reverse the District Court's suspension of the Purple Line. We demonstrated that such a request has no merit, would not be in the public interest, and should be denied.
The battle of the motions and briefs continues as Maryland's expensive law firm Perkins Coie and its attorneys send barrage after barrage of motions into both courts. But in this fight for fiscal accountability, common sense solutions, green space, and the rule of law, we are the ones who stand on strong ground.
Excerpt of email:
On June 26, Judge Leon denied MTA's request to move forward with construction of the Purple Line even though MTA has not undertaken the required Supplemental Environmental Impact Statement (SEIS).
Our [Friends] filing, amply supported with detailed expert declarations, demonstrated to the Court why moving ahead with Purple Line construction would not be in the public interest and is not supported by the law.
We have also filed a 59e motion asking Federal Judge Leon for clarification or reconsideration on two very important issues he did not address in detail- air and noise pollution and their effects on pedestrians, cyclists, schools, residents, and parks and historic sites, which are especially protected by Federal Transportation law.
Meanwhile, MTA continues to seek to litigate its way out of its obligations and to move the case to the US Court of Appeals!
In our vigorous response filing with the US Court of Appeals, on July 3, 2017, we opposed Maryland's motion to "stay", or reverse the District Court's suspension of the Purple Line. We demonstrated that such a request has no merit, would not be in the public interest, and should be denied.
The battle of the motions and briefs continues as Maryland's expensive law firm Perkins Coie and its attorneys send barrage after barrage of motions into both courts. But in this fight for fiscal accountability, common sense solutions, green space, and the rule of law, we are the ones who stand on strong ground.
Customers of Jessica Alba’s Honest Co. alleging it falsely marketed its products as “all natural” asked a New York federal judge on Friday for preliminary approval of a $7.35 million settlement that would end four proposed class actions.
The application to the Court for settlement approval is here:
https://dlbjbjzgnk95t.cloudfront.net/0940000/940560/https-ecf-nysd-uscourts-gov-doc1-127120560288.pdf
The application to the Court for settlement approval is here:
https://dlbjbjzgnk95t.cloudfront.net/0940000/940560/https-ecf-nysd-uscourts-gov-doc1-127120560288.pdf
From: Consumer Law & Policy Blog
Fortune Commentary on the CFPB's Arbitration Rule: How This New Rule Prevents Your Bank From Ripping You Off
Posted: 13 Jul 2017 01:14 PM PDT
by Jeff Sovern
My [Jeff's] latest, here. Excerpt:
The Wells Fargo case shows the difference between arbitration and class actions: the difference between getting nothing and getting something. * * *
Critics of the rule claim that class actions are just giveaways to lawyers. It’s true that not all class actions work as well as the Wells Fargo one, but the remedy for bad class actions is no more to eliminate them than the remedy for bank misconduct is to eliminate banks. Rather, the remedy is to make sure courts live up to their obligation to approve class action settlements only if they are “fair, reasonable, and adequate.”
Fortune Commentary on the CFPB's Arbitration Rule: How This New Rule Prevents Your Bank From Ripping You Off
Posted: 13 Jul 2017 01:14 PM PDT
by Jeff Sovern
My [Jeff's] latest, here. Excerpt:
The Wells Fargo case shows the difference between arbitration and class actions: the difference between getting nothing and getting something. * * *
Critics of the rule claim that class actions are just giveaways to lawyers. It’s true that not all class actions work as well as the Wells Fargo one, but the remedy for bad class actions is no more to eliminate them than the remedy for bank misconduct is to eliminate banks. Rather, the remedy is to make sure courts live up to their obligation to approve class action settlements only if they are “fair, reasonable, and adequate.”
When is an old judge too old, and forced to retire?
Richard Posner: I believe there should be mandatory retirement for all judges at a fixed age, probably 80.
Jed Rakoff: Life tenure is what guarantees federal judges their independence, enabling them to speak their minds freely, administer justice without fear or favor, and provide necessary checks on the other branches of government. Any tampering with this is likely to devolve into politics, with whichever party is in power trying to reduce the retirement age ever lower, so as to replace judges appointed by the now out-of-power party with those of the now in-power party. The recent defeat of the New York referendum that Joel references above is a good example: Even though there was widespread “good government” support for increasing the retirement age to 80, the referendum was successfully opposed by Gov. Andrew Cuomo, who wanted to replace Republican-appointed judges with judges he could personally select (as he subsequently did). The result was that several of the most experienced, most knowledgeable, and most respected judges on the highest New York court—such as Robert S. Smith, a Republican appointee who commanded bipartisan respect for his brilliance and fairness—were forced to retire at the height of their powers.
The list of federal judges who have served with great distinction into their 80s includes, among many others, some of the greatest Supreme Court justices ever, such as Louis Brandeis (82), William J. Brennan Jr. (84), Hugo Black (85), and Oliver Wendell Holmes Jr. (90). The greatest Supreme Court justice of all, John Marshall, who single-handedly provided the foundation for most of the basic principles that still govern the relationship between the federal judiciary and the other branches of government, served until he was 79, which, by modern standards, would be the equivalent of something like 95 or more. And, contrary to Joel’s hypothesis that elderly judges “become too dug in to their beliefs,” the number of Supreme Court justices (as well as lower court federal judges) whose views have evolved as they got older and served longer is very large and includes, just in the past few decades, such influential justices as Harry Blackmun, John Paul Stevens, and David Souter.
As for those (relatively few) federal judges who develop significant mental infirmities with increasing age, they typically receive a visit from the chief judges of their courts, who politely suggest that they retire—which they almost always do.
Entire dialogue: http://www.slate.com/articles/news_and_politics/jurisprudence/2017/07/should_there_be_age_limits_for_federal_judges.html
Richard Posner: I believe there should be mandatory retirement for all judges at a fixed age, probably 80.
Jed Rakoff: Life tenure is what guarantees federal judges their independence, enabling them to speak their minds freely, administer justice without fear or favor, and provide necessary checks on the other branches of government. Any tampering with this is likely to devolve into politics, with whichever party is in power trying to reduce the retirement age ever lower, so as to replace judges appointed by the now out-of-power party with those of the now in-power party. The recent defeat of the New York referendum that Joel references above is a good example: Even though there was widespread “good government” support for increasing the retirement age to 80, the referendum was successfully opposed by Gov. Andrew Cuomo, who wanted to replace Republican-appointed judges with judges he could personally select (as he subsequently did). The result was that several of the most experienced, most knowledgeable, and most respected judges on the highest New York court—such as Robert S. Smith, a Republican appointee who commanded bipartisan respect for his brilliance and fairness—were forced to retire at the height of their powers.
The list of federal judges who have served with great distinction into their 80s includes, among many others, some of the greatest Supreme Court justices ever, such as Louis Brandeis (82), William J. Brennan Jr. (84), Hugo Black (85), and Oliver Wendell Holmes Jr. (90). The greatest Supreme Court justice of all, John Marshall, who single-handedly provided the foundation for most of the basic principles that still govern the relationship between the federal judiciary and the other branches of government, served until he was 79, which, by modern standards, would be the equivalent of something like 95 or more. And, contrary to Joel’s hypothesis that elderly judges “become too dug in to their beliefs,” the number of Supreme Court justices (as well as lower court federal judges) whose views have evolved as they got older and served longer is very large and includes, just in the past few decades, such influential justices as Harry Blackmun, John Paul Stevens, and David Souter.
As for those (relatively few) federal judges who develop significant mental infirmities with increasing age, they typically receive a visit from the chief judges of their courts, who politely suggest that they retire—which they almost always do.
Entire dialogue: http://www.slate.com/articles/news_and_politics/jurisprudence/2017/07/should_there_be_age_limits_for_federal_judges.html
Microsoft proposes a $10 billion program to bring broadband internet to the rural U.S.
The plan, which calls for corporate and government cash, relies on nascent television “white-space” technology, which sends internet data over unused broadcast frequencies set aside for television channels.
This is technology the company helped develop as a cornerstone of an effort to connect the 23.4 million Americans in rural areas who lack high-speed internet access.
“One thing we’ve concluded is just how important broadband is for all kinds of things,” Microsoft President Brad Smith said in an interview.
Article: http://www.seattletimes.com/business/microsoft/microsoft-proposing-10b-program-to-bring-broadband-internet-to-rural-america/
The plan, which calls for corporate and government cash, relies on nascent television “white-space” technology, which sends internet data over unused broadcast frequencies set aside for television channels.
This is technology the company helped develop as a cornerstone of an effort to connect the 23.4 million Americans in rural areas who lack high-speed internet access.
“One thing we’ve concluded is just how important broadband is for all kinds of things,” Microsoft President Brad Smith said in an interview.
Article: http://www.seattletimes.com/business/microsoft/microsoft-proposing-10b-program-to-bring-broadband-internet-to-rural-america/
President Trump has named regulation skeptic Randal K. Quarles to serve as the Federal Reserve’s top watchdog overseeing Wall Street
He is an opponent of bank regulation, and expected to play a leading role in the administration’s plans to reduce financial regulation.
Article: https://www.nytimes.com/2017/07/10/us/politics/trump-nominates-randal-quarles-to-oversee-wall-street-banks.html?rref=collection%2Ftimestopic%2FFinancial%20Legal%2FRegulatory&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
He is an opponent of bank regulation, and expected to play a leading role in the administration’s plans to reduce financial regulation.
Article: https://www.nytimes.com/2017/07/10/us/politics/trump-nominates-randal-quarles-to-oversee-wall-street-banks.html?rref=collection%2Ftimestopic%2FFinancial%20Legal%2FRegulatory&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
FROM THE CFPB:
CFPB Issues Rule to Ban Companies From Using Arbitration Clauses to Deny Groups of People Their Day in CourtFinancial Companies Can No Longer Block Consumers From Joining Together to Sue Over Wrongdoing
JUL 10, 2017
WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today announced a new rule to ban companies from using mandatory arbitration clauses to deny groups of people their day in court. Many consumer financial products like credit cards and bank accounts have arbitration clauses in their contracts that prevent consumers from joining together to sue their bank or financial company for wrongdoing. By forcing consumers to give up or go it alone – usually over small amounts – companies can sidestep the court system, avoid big refunds, and continue harmful practices. The CFPB’s new rule will deter wrongdoing by restoring consumers’ right to join together to pursue justice and relief through group lawsuits.
"Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong," said CFPB Director Richard Cordray. "These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up. Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together."
Hundreds of millions of contracts for consumer financial products and services have included mandatory arbitration clauses. These clauses typically state that either the company or the consumer can require that disputes between them be resolved by privately appointed individuals (arbitrators) except for individual cases brought in small claims court. While these clauses can block any lawsuit, companies almost exclusively use them to block group lawsuits, which are also known as “class action” lawsuits. With group lawsuits, a few consumers can pursue relief on behalf of everyone who has been harmed by a company’s practices. Almost all mandatory arbitration clauses force each harmed consumer to pursue individual claims against the company, no matter how many consumers are injured by the same conduct. However, consumers almost never spend the time or money to pursue formal claims when the amounts at stake are small.
The Dodd-Frank Wall Street Reform and Consumer Protection Act required the CFPB to study the use of mandatory arbitration clauses in consumer financial markets. Congress also authorized the Bureau to issue regulations that are in the public interest, that are for the protection of consumers, and which are based on findings that are consistent with the Bureau’s study of arbitration. Released in March 2015, the study showed that credit card issuers representing more than half of all credit card debt and banks representing 44 percent of insured deposits used mandatory arbitration clauses. Yet three out of four consumers the Bureau surveyed did not know whether their credit card agreement had an arbitration clause. These clauses are not only common and unknown; they are also bad for consumers. By blocking group lawsuits, companies are able to:
- Deny consumers their day in court: The study showed that few consumers ever bring – or consider bringing – individual actions against their financial service providers either in court or in arbitration. Only about 2 percent of consumers with credit cards surveyed said they would consult an attorney or consider formal legal action to resolve a small-dollar dispute. As a result, the real effect of mandatory arbitration clauses is to insulate companies from most legal proceedings altogether.
- Avoid paying out big refunds: Individual actions get less overall relief for consumers than group lawsuits because companies do not have to provide relief to everyone harmed. According to the study, group lawsuits succeed in bringing hundreds of millions of dollars in relief to millions of consumers each year. The study showed that over 34 million consumers received payments, and that $1 billion was paid out to harmed consumers over the five-year period studied. Conversely, in the roughly one thousand cases in the two years that were studied, arbitrators awarded a combined total of about $360,000 in relief to 78 consumers.
- Continue harmful practices: Individual actions might recoup previous individual losses, but they do nothing to stop the harm from happening again or to others. Resolving group lawsuits often requires companies to not only pay everyone back, but also change their conduct moving forward. This saves countless consumers the pain and expense of experiencing the same harm. The Bureau’s study found that in 53 group settlements covering over 106 million consumers, companies agreed to change their business practices or implement new compliance programs. Without group lawsuits, private citizens have almost no way, on their own, to stop companies from pursuing profitable practices that may violate the law.
CFPB Arbitration RuleThe CFPB rule restores consumers’ right to file or join group lawsuits. By so doing, the rule also deters companies from violating the law. When companies know they are more likely to be held accountable by consumers for any misconduct, they are less likely to engage in unlawful practices that can cause harm. Further, public attention on the practices of one company can more broadly influence their business practices and those of other companies. Under the rule, companies can still include arbitration clauses in their contracts. But companies subject to the rule may not use arbitration clauses to stop consumers from being part of a group action. The rule includes specific language that companies will need to use if they include an arbitration clause in a new contract.
The rule also makes the individual arbitration process more transparent by requiring companies to submit to the CFPB certain records, including initial claims and counterclaims, answers to these claims and counterclaims, and awards issued in arbitration. The Bureau will collect correspondence companies receive from arbitration administrators regarding a company’s non-payment of arbitration fees and its failure to follow the arbitrator’s fairness standards. Gathering these materials will enable the CFPB to better understand and monitor arbitration, including whether the process itself is fair. The materials must be submitted with appropriate redactions of personal information. The Bureau intends to publish these redacted materials on its website beginning in July 2019.
The new CFPB rule applies to the major markets for consumer financial products and services overseen by the Bureau, including those that lend money, store money, and move or exchange money. Congress already prohibits arbitration agreements in the largest market that the Bureau oversees – the residential mortgage market. In the Military Lending Act, Congress also has prohibited such agreements in many forms of credit extended to servicemembers and their families. The rule’s exemptions include employers when offering consumer financial products or services for employees as an employee benefit; entities regulated by the Securities and Exchange Commission or the Commodity Futures Trading Commission, which have their own arbitration rules; broker dealers and investment advisers overseen by state regulators; and state and tribal governments that have sovereign immunity from private lawsuits.
In October 2015, the Bureau published an outline of the proposals under consideration and convened a Small Business Review Panel to gather feedback from small companies. Besides consulting with small business representatives, the Bureau sought comments from the public, consumer groups, industry, and other interested parties before continuing with the rulemaking. In May 2016, the Bureau issued a proposed rule that included a request for public comment. The Bureau received more than 110,000 comments.
The rule’s effective date is 60 days following publication in the Federal Register and applies to contracts entered into more than 180 days after that.
More information about the CFPB’s arbitration rule is available at: https://www.consumerfinance.gov/arbitration-rule/
The text of the arbitration rule is available at: http://files.consumerfinance.gov/f/documents/201707_cfpb_Arbitration-Agreements-Rule.pdf
A CFPB video explaining the arbitration rule is available at: https://youtu.be/boQ2tRW_AwE
NYT: Utilities lobby against rooftop solar
Utilities argue that rules allowing private solar customers to sell excess power back to the grid at the retail price — a practice known as net metering — can be unfair to homeowners who do not want or cannot afford their own solar installations.
Their effort has met with considerable success, dimming the prospects for renewable energy across the United States.
Click here for full article: Continue reading the story
Utilities argue that rules allowing private solar customers to sell excess power back to the grid at the retail price — a practice known as net metering — can be unfair to homeowners who do not want or cannot afford their own solar installations.
Their effort has met with considerable success, dimming the prospects for renewable energy across the United States.
Click here for full article: Continue reading the story
More about Google and the EU: New regulatory thinking needed
Antitrust, the underpinnings of which are based on industrial-age economic theories, needs new thinking in the digital age to ensure that antitrust policies continue to remain effective guardians of consumer welfare without inadvertently impeding economic progress.
But as important as today’s antitrust questions are, regulators shouldn’t lose sight of the bigger picture. The coming battle in antitrust will not be about controlling markets in the traditional sense. It will be about the battle for control over consumers’ information. The tech titans are currently in a race to see which of them can build a better digital replica of their consumers, which means finding a way to not just collect user data but also make it harder for competitors to do so. Tomorrow’s monopolies won’t be able to be measured just by how much they sell us. They’ll be based on how much they know about us and how much better they can predict our behavior than competitors.
From: https://hbr.org/2017/07/the-next-battle-in-antitrust-will-be-about-whether-one-company-knows-everything-about-you
Antitrust, the underpinnings of which are based on industrial-age economic theories, needs new thinking in the digital age to ensure that antitrust policies continue to remain effective guardians of consumer welfare without inadvertently impeding economic progress.
But as important as today’s antitrust questions are, regulators shouldn’t lose sight of the bigger picture. The coming battle in antitrust will not be about controlling markets in the traditional sense. It will be about the battle for control over consumers’ information. The tech titans are currently in a race to see which of them can build a better digital replica of their consumers, which means finding a way to not just collect user data but also make it harder for competitors to do so. Tomorrow’s monopolies won’t be able to be measured just by how much they sell us. They’ll be based on how much they know about us and how much better they can predict our behavior than competitors.
From: https://hbr.org/2017/07/the-next-battle-in-antitrust-will-be-about-whether-one-company-knows-everything-about-you
The States' petition asking the U.S. Supreme Court to review the Second Circuit's decision for American Express Co. in an antitrust suit over the company’s merchant rules
The U.S. Department of Justice declined to join the States.
In their petition the 11 state petitioners s contend that the Second Circuit’s ruling that the district court neglected to account for how the rules affected the entirety of the two-sided credit card market conflicts with Supreme Court precedent. The credit card industry’s services to merchants and cardholders are not interchangeable and therefore should not be collapsed into a single market, the states said. "Simply because the same company, by virtue of its business model, provides different services to different customers does not mean that those services are somehow in the same relevant market.”
From the States' petition:
QUESTION PRESENTED
This case asks how Section 1 of the Sherman Act, which bans unreasonable restraints of trade, applies to “two-sided” platforms that unite distinct customer groups. Such platforms are ubiquitous, ranging from eBay (serving buyers and sellers), to newspapers (serving readers and advertisers). Here, credit-card networks bring cardholder customers together with merchant customers for ordinary transactions. When doing so, Respondents American Express Company and American Express Travel Related Services Company (“Amex”) contractually bar merchant customers from steering cardholder customers to credit cards that charge merchants lower prices.
Applying the “rule of reason,” the district court held that: (1) the Government proved that Amex’s anti-steering provisions were anticompetitive because they stifled competition among credit-card companies for the prices charged to merchants, and (2) Amex failed to establish any procompetitive benefits.
The Second Circuit reversed. It held that, to prove that the anti-steering provisions were anticompetitive (and so to transfer the burden of establishing procompetitive benefits to Amex), the Government bore the burden to show not just that the provisions had anticompetitive pricing effects on the merchant side, but also that those anticompetitive effects outweighed any benefits on the cardholder side.
The question presented is: Under the “rule of reason,” did the Government’s showing that Amex’s anti-steering provisions stifled price competition on the merchant side of the creditcard platform suffice to prove anticompetitive effects and thereby shift to Amex the burden of establishing any procompetitive benefits from the provisions?
The States' Petition to US Supreme Court can be found at https://dlbjbjzgnk95t.cloudfront.net/0909000/909780/amex%20cert%20petition.pdf
The U.S. Department of Justice declined to join the States.
In their petition the 11 state petitioners s contend that the Second Circuit’s ruling that the district court neglected to account for how the rules affected the entirety of the two-sided credit card market conflicts with Supreme Court precedent. The credit card industry’s services to merchants and cardholders are not interchangeable and therefore should not be collapsed into a single market, the states said. "Simply because the same company, by virtue of its business model, provides different services to different customers does not mean that those services are somehow in the same relevant market.”
From the States' petition:
QUESTION PRESENTED
This case asks how Section 1 of the Sherman Act, which bans unreasonable restraints of trade, applies to “two-sided” platforms that unite distinct customer groups. Such platforms are ubiquitous, ranging from eBay (serving buyers and sellers), to newspapers (serving readers and advertisers). Here, credit-card networks bring cardholder customers together with merchant customers for ordinary transactions. When doing so, Respondents American Express Company and American Express Travel Related Services Company (“Amex”) contractually bar merchant customers from steering cardholder customers to credit cards that charge merchants lower prices.
Applying the “rule of reason,” the district court held that: (1) the Government proved that Amex’s anti-steering provisions were anticompetitive because they stifled competition among credit-card companies for the prices charged to merchants, and (2) Amex failed to establish any procompetitive benefits.
The Second Circuit reversed. It held that, to prove that the anti-steering provisions were anticompetitive (and so to transfer the burden of establishing procompetitive benefits to Amex), the Government bore the burden to show not just that the provisions had anticompetitive pricing effects on the merchant side, but also that those anticompetitive effects outweighed any benefits on the cardholder side.
The question presented is: Under the “rule of reason,” did the Government’s showing that Amex’s anti-steering provisions stifled price competition on the merchant side of the creditcard platform suffice to prove anticompetitive effects and thereby shift to Amex the burden of establishing any procompetitive benefits from the provisions?
The States' Petition to US Supreme Court can be found at https://dlbjbjzgnk95t.cloudfront.net/0909000/909780/amex%20cert%20petition.pdf
Over-the-Counter Hearing Aid Act of 2017, would deregulate an industry that currently restricts hearing aid sales to audiology practices
Instead, hearing aids could be sold over the counter, and audiologist services obtained separately. (Audiologists test for characteristics of hearing loss, and are skilled at adjusting hearing aids to work well with variations in hearing loss.)
Text of bill, sponsored by Elizabeth Warren:
https://www.congress.gov/bill/115th-congress/senate-bill/670/text?q=%7B%22search%22%3A%5B%22Over+the+Counter+Hearing+Aid+Act+of+2017%22%5D%7D&r=2
From the NYT: The Medicaid that our representatives in Washington are aiming to cut right now ought to matter plenty to everyone who hopes to grow old and is not certain that their savings could last for decades.
While many people don’t realize it until well into old age, it is Medicaid, not Medicare, that pays for most nursing home and community or home-based care for older adults who run out of money.
A dozen or so years into retirement, Rita Sherman had plenty going for her financially.
Recently widowed, she had a net worth of roughly $600,000 as of 1998. Her health was excellent, and she dutifully purchased a long-term care insurance policy that would cover three years of nursing home costs should she ever need help. Watching over it all was her daughter, a medical social worker, and her son-in-law, a financial planner.
By the time she died at the age of 94 last year, however, all of the money was gone after a diagnosis of dementia and five and a half years in a nursing home [probably at more than $500 a day.] Like so many people who never see it coming, she’d gone from being financially comfortable to qualifying for Medicaid.
NYT article is at https://www.nytimes.com/2017/07/07/your-money/one-womans-slide-from-the-upper-middle-class-to-medicaid.html?ribbon-ad-idx=3&src=trending&module=Ribbon&version=context®ion=Header&action=click&contentCollection=Trending&pgtype=article
S.C. hospital to pay $1.3 million for not properly treating emergency psych patients
By Harris Meyer | July 5, 2017
AnMed Health in South Carolina has agreed to pay the largest-ever settlement in a case brought under the federal law requiring hospitals to stabilize and treat patients in emergency situations.
The not-for-profit, three-hospital AnMed system will pay nearly $1.3 million to settle federal allegations that in 2012 and 2013 it held patients with unstable psychiatric conditions in its emergency department without providing appropriate psychiatric treatment in 36 incidents. AnMed, based in Anderson, S.C., serves upstate South Carolina and northeast Georgia.
"Instead of being examined and treated by on-call psychiatrists, patients were involuntarily committed, treated by ED physicians and kept in AnMed's ED for days or weeks instead of being admitted to AnMed's psychiatric unit for stabilizing treatment," according to the settlement finalized on June 2 with the HHS Office of Inspector General.
The patients — most of whom were suicidal and/or homicidal and suffered from serious mental illness — were held in the ED from six to 38 days. In each of these incidents, AnMed had on-call psychiatrists and beds available in its psychiatric unit to evaluate and stabilize the patients. But it but did not provide examination or treatment by a psychiatrist, according to the settlement agreement.
The HHS OIG's office said that violated the section of the Emergency Medical Treatment and Labor Act requiring Medicare-participating hospitals with an ED to provide appropriate medical screening and treatment to stabilize the patient's condition.
Full article: http://www.modernhealthcare.com/article/20170705/NEWS/170709977?utm_source=modernhealthcare&utm_medium=email&utm_content=20170705-NEWS-170709977&utm_campaign=am
By Harris Meyer | July 5, 2017
AnMed Health in South Carolina has agreed to pay the largest-ever settlement in a case brought under the federal law requiring hospitals to stabilize and treat patients in emergency situations.
The not-for-profit, three-hospital AnMed system will pay nearly $1.3 million to settle federal allegations that in 2012 and 2013 it held patients with unstable psychiatric conditions in its emergency department without providing appropriate psychiatric treatment in 36 incidents. AnMed, based in Anderson, S.C., serves upstate South Carolina and northeast Georgia.
"Instead of being examined and treated by on-call psychiatrists, patients were involuntarily committed, treated by ED physicians and kept in AnMed's ED for days or weeks instead of being admitted to AnMed's psychiatric unit for stabilizing treatment," according to the settlement finalized on June 2 with the HHS Office of Inspector General.
The patients — most of whom were suicidal and/or homicidal and suffered from serious mental illness — were held in the ED from six to 38 days. In each of these incidents, AnMed had on-call psychiatrists and beds available in its psychiatric unit to evaluate and stabilize the patients. But it but did not provide examination or treatment by a psychiatrist, according to the settlement agreement.
The HHS OIG's office said that violated the section of the Emergency Medical Treatment and Labor Act requiring Medicare-participating hospitals with an ED to provide appropriate medical screening and treatment to stabilize the patient's condition.
Full article: http://www.modernhealthcare.com/article/20170705/NEWS/170709977?utm_source=modernhealthcare&utm_medium=email&utm_content=20170705-NEWS-170709977&utm_campaign=am
How Uber’s Tax Calculation May Have Cost Drivers Hundreds of Millions
By NOAM SCHEIBER (NYTimes)
Drivers’ trip receipts contain signs that the ride-hailing service deducted hundreds of millions of dollars from drivers’ earnings in New York to pay state taxes
Click title for article
By NOAM SCHEIBER (NYTimes)
Drivers’ trip receipts contain signs that the ride-hailing service deducted hundreds of millions of dollars from drivers’ earnings in New York to pay state taxes
Click title for article
Brookings Program: Manufacturing under the Trump administrationThursday, July 13, 2017, 9:00 a.m. to 12:00 p.m. EDT
n the wake of the 2016 presidential election, much attention has been paid to the fate of America’s once-prosperous manufacturing communities, where residents are now facing the effects of rapidly evolving technology, increased automation, and a growing Chinese manufacturing sector.
On July 13, Brookings will host a half-day conference to discuss the future of manufacturing policy under the Trump administration, whether the president's campaign promises can be fulfilled, the effect of changes in international markets, and what it all means for American workers and the economy.
Register to attend | Register to watch the live webcast
n the wake of the 2016 presidential election, much attention has been paid to the fate of America’s once-prosperous manufacturing communities, where residents are now facing the effects of rapidly evolving technology, increased automation, and a growing Chinese manufacturing sector.
On July 13, Brookings will host a half-day conference to discuss the future of manufacturing policy under the Trump administration, whether the president's campaign promises can be fulfilled, the effect of changes in international markets, and what it all means for American workers and the economy.
Register to attend | Register to watch the live webcast
Worldpay Group, a British payments processing company, has received preliminary takeover approaches from Vantiv, an American rival, and JPMorgan Chase.
Worldpay accounts for about 42 percent of all transactions in Britain and provides processing services in 146 countries. But it faces growing competition from services like PayPal, Square and Stripe.
Payments currently run through links between banks, card networks and payments acquirers like Worldpay. But new payments services will be able to bypass this network and to charge less for each transaction.
JPMorgan has been trying to build its payments infrastructure so that it can be involved from start to finish, fighting over smartphone payments and online purchases with peer-to-peer services like PayPal’s Venmo. Buying Worldpay would help its defenses as the payments field becomes more competitive.
http://www.nytimes.com/newsletters/2017/07/05/dealbook?nlid=67075843
Worldpay accounts for about 42 percent of all transactions in Britain and provides processing services in 146 countries. But it faces growing competition from services like PayPal, Square and Stripe.
Payments currently run through links between banks, card networks and payments acquirers like Worldpay. But new payments services will be able to bypass this network and to charge less for each transaction.
JPMorgan has been trying to build its payments infrastructure so that it can be involved from start to finish, fighting over smartphone payments and online purchases with peer-to-peer services like PayPal’s Venmo. Buying Worldpay would help its defenses as the payments field becomes more competitive.
http://www.nytimes.com/newsletters/2017/07/05/dealbook?nlid=67075843
Novel forms of corporate control can raise novel antitrust issues
Here are three relevant articles, from CPI [click titles to access]
Active and Passive Institutional Investors and New Antitrust Challenges: Is EU Competition Law Ready?
By Marco Claudio Corradi & Anna Tzanaki
This essay aims to disentangle the complex issues surrounding common ownership by institutional investors, and suggest a holistic approach that brings together the corporate with the competition law aspects of the problem.
The New Mandate Owners: Passive Asset Managers and The Decoupling of Corporate Ownership
By Carmel Shenkar, Eelke M. Heemskerk & Jan Fichtner
A major shift toward passively managed index funds in recent years has led to the re-concentration of corporate ownership in the hands of just three large asset management firms, the Big Three: BlackRock, Vanguard and State Street.
Why Common Ownership Causes Antitrust Risks
By José Azar, Martin Schmalz & Isabel Tecu
This article illustrates the extent of present-day common ownership and discusses the economic logic of why common ownership leads to reduced incentives to compete and may cause anticompetitive outcomes.
Here are three relevant articles, from CPI [click titles to access]
Active and Passive Institutional Investors and New Antitrust Challenges: Is EU Competition Law Ready?
By Marco Claudio Corradi & Anna Tzanaki
This essay aims to disentangle the complex issues surrounding common ownership by institutional investors, and suggest a holistic approach that brings together the corporate with the competition law aspects of the problem.
The New Mandate Owners: Passive Asset Managers and The Decoupling of Corporate Ownership
By Carmel Shenkar, Eelke M. Heemskerk & Jan Fichtner
A major shift toward passively managed index funds in recent years has led to the re-concentration of corporate ownership in the hands of just three large asset management firms, the Big Three: BlackRock, Vanguard and State Street.
Why Common Ownership Causes Antitrust Risks
By José Azar, Martin Schmalz & Isabel Tecu
This article illustrates the extent of present-day common ownership and discusses the economic logic of why common ownership leads to reduced incentives to compete and may cause anticompetitive outcomes.
Social media companies operating in Germany face big fines if they do not delete illegal, racist or slanderous comments and posts within 24 hours under a new law
The law reinforces Germany’s position as one of the most aggressive countries in the Western world at forcing companies like Facebook, Google and Twitter to crack down on hate speech and other extremist messaging on their digital platforms.
But the new rules have also raised questions about freedom of expression. Digital and human rights groups, as well as the companies themselves, opposed the law on the grounds that it placed limits on individuals’ right to free expression. Critics also said the legislation shifted the burden of responsibility to the providers from the courts, leading to last-minute changes in its wording.
See: https://www.nytimes.com/2017/06/30/business/germany-facebook-google-twitter.html?ref=business
The law reinforces Germany’s position as one of the most aggressive countries in the Western world at forcing companies like Facebook, Google and Twitter to crack down on hate speech and other extremist messaging on their digital platforms.
But the new rules have also raised questions about freedom of expression. Digital and human rights groups, as well as the companies themselves, opposed the law on the grounds that it placed limits on individuals’ right to free expression. Critics also said the legislation shifted the burden of responsibility to the providers from the courts, leading to last-minute changes in its wording.
See: https://www.nytimes.com/2017/06/30/business/germany-facebook-google-twitter.html?ref=business
Uber Technologies Inc. used software to evade hostile law enforcement and public officials
he practice was used in cities where the company faced opposition from regulators, The New York Times reported. Legal ethics professionals raised concerns.
While the program may not be illegal, ethics professionals said, it does appear to skirt ethical standards. And if in-house counsel approved the program knowing that Uber would use it to break the law, then disbarment could be in store for the lawyers who signed off on it, they said. The New York Times report said Uber’s legal department, led by general counsel Salle Yoo, approved use of the program.
he practice was used in cities where the company faced opposition from regulators, The New York Times reported. Legal ethics professionals raised concerns.
While the program may not be illegal, ethics professionals said, it does appear to skirt ethical standards. And if in-house counsel approved the program knowing that Uber would use it to break the law, then disbarment could be in store for the lawyers who signed off on it, they said. The New York Times report said Uber’s legal department, led by general counsel Salle Yoo, approved use of the program.
Manhattan District Attorney Cyrus R. Vance, Jr., announces new justice reform initiatives that will end the criminal prosecution of approximately 20,000 low-level offenses annually
Beginning in September 2017, the Manhattan District Attorney’s Office will no longer prosecute the overwhelming majority of individuals charged with Theft of Services for subway-related offenses, unless there is a demonstrated public safety reason to do so.
Building on the success of the Manhattan Summons Initiative launched by District Attorney Vance and the NYPD in March 2016 – which was subsequently replicated citywide – the policies being announced today will:
“Since 2010, my Office has worked with the NYPD and the Mayor’s Office of Criminal Justice to end the criminal prosecution of tens of thousands of low-level cases that needlessly bog down our Criminal Court and swell our City’s jail population. In Manhattan, we are embracing the role that District Attorneys must play to achieve the closure of Rikers Island, and proving that New York can safely reduce crime and incarceration at the same time.”
See http://manhattanda.org/press-release/district-attorney-vance-end-criminal-prosecution-approximately-20000-low-level-non-vio
Beginning in September 2017, the Manhattan District Attorney’s Office will no longer prosecute the overwhelming majority of individuals charged with Theft of Services for subway-related offenses, unless there is a demonstrated public safety reason to do so.
Building on the success of the Manhattan Summons Initiative launched by District Attorney Vance and the NYPD in March 2016 – which was subsequently replicated citywide – the policies being announced today will:
- Prevent New Yorkers accused of committing these offenses from accumulating a criminal record or ever setting foot in a courtroom
- Reduce the immigration, housing, employment and other collateral consequences associated with criminal prosecution
- Enable the Manhattan District Attorney’s Office to focus its resources on investigating more serious crimes, such as domestic violence, drunk driving, stalking, and assault cases
- Reduce the backlog of cases in Manhattan Criminal Court
- Strengthen bonds between law enforcement and the community members we serve, and
- Reduce the jail population of Rikers Island, in order to achieve the goal of its ultimate closure.
“Since 2010, my Office has worked with the NYPD and the Mayor’s Office of Criminal Justice to end the criminal prosecution of tens of thousands of low-level cases that needlessly bog down our Criminal Court and swell our City’s jail population. In Manhattan, we are embracing the role that District Attorneys must play to achieve the closure of Rikers Island, and proving that New York can safely reduce crime and incarceration at the same time.”
See http://manhattanda.org/press-release/district-attorney-vance-end-criminal-prosecution-approximately-20000-low-level-non-vio
From USDOJ: FOR IMMEDIATE RELEASE
Wednesday, June 28, 2017
Former Packaged Seafood Executive Pleads Guilty to Price Fixing
A former senior vice president of sales for a packaged seafood company pleaded guilty for his role in a conspiracy to fix the price of packaged seafood, such as canned tuna, sold in the United States, the Department of Justice announced today.
According to documents filed in this case, Stephen Hodge and his co-conspirators agreed to fix the prices of packaged seafood from as early as 2011 through 2013. He pleaded guilty to a one-count criminal information filed on May 30, 2017, in U.S. District Court for the Northern District of California in San Francisco. Hodge has agreed to pay a criminal fine and cooperate with the Antitrust Division’s ongoing investigation. He will be sentenced by the court at a later date.
Excerpt from https://www.justice.gov/opa/pr/former-packaged-seafood-executive-pleads-guilty-price-fixing
Wednesday, June 28, 2017
Former Packaged Seafood Executive Pleads Guilty to Price Fixing
A former senior vice president of sales for a packaged seafood company pleaded guilty for his role in a conspiracy to fix the price of packaged seafood, such as canned tuna, sold in the United States, the Department of Justice announced today.
According to documents filed in this case, Stephen Hodge and his co-conspirators agreed to fix the prices of packaged seafood from as early as 2011 through 2013. He pleaded guilty to a one-count criminal information filed on May 30, 2017, in U.S. District Court for the Northern District of California in San Francisco. Hodge has agreed to pay a criminal fine and cooperate with the Antitrust Division’s ongoing investigation. He will be sentenced by the court at a later date.
Excerpt from https://www.justice.gov/opa/pr/former-packaged-seafood-executive-pleads-guilty-price-fixing
From Friends of the Capital Crescent Trail:
On Thursday Judge Richard Leon heard oral arguments on the State's motion requesting that he "stay" (suspend) his ruling so that MTA could move forward with the project as they appealed his ruling to the Circuit Court.
A stay would have allowed them to clear cut the Trail before they appealed to the Circuit Court for approval of the federal funding. But the Judge wasn't having any of it.
His reaction was that of a parent scolding an obstinate teenager - in this case, scolding the Maryland government for its appalling mismanagement of public funds in signing an irresponsible Purple Line P3 contract.
The headlines in the Washington Post and Bethesda Magazine understate the Judge's tongue lashing he gave Maryland's hired gun from the law firm Perkins Coie.
The criteria are very high for a stay.
In response to State's claim of being financially harmed, the Judge commented:
"So why should the Court in this situation here bail you out of the gamble that you took?...No one forced the State of Maryland to enter into the [P3 Purple Line] contract..."
Our attorney, Eric Glitzenstein, reinforced the ridiculousness of their financial harm claim: "Even after...the August 2016 ruling, the [Secretary of Transportation] Rahn declaration says, point blank, we continue to spend state money on this project with the expectation and assumption that we would get reimbursed by the federal government. That is self-inflicted injury..."
At the end of the hearing the Judge summed it up: "It is pretty obvious...what they're doing, they want a ruling out of this Court as fast as possible so they can get the Court of Appeals to grant the stay. That's what is going on here."
On Thursday Judge Richard Leon heard oral arguments on the State's motion requesting that he "stay" (suspend) his ruling so that MTA could move forward with the project as they appealed his ruling to the Circuit Court.
A stay would have allowed them to clear cut the Trail before they appealed to the Circuit Court for approval of the federal funding. But the Judge wasn't having any of it.
His reaction was that of a parent scolding an obstinate teenager - in this case, scolding the Maryland government for its appalling mismanagement of public funds in signing an irresponsible Purple Line P3 contract.
The headlines in the Washington Post and Bethesda Magazine understate the Judge's tongue lashing he gave Maryland's hired gun from the law firm Perkins Coie.
The criteria are very high for a stay.
In response to State's claim of being financially harmed, the Judge commented:
"So why should the Court in this situation here bail you out of the gamble that you took?...No one forced the State of Maryland to enter into the [P3 Purple Line] contract..."
Our attorney, Eric Glitzenstein, reinforced the ridiculousness of their financial harm claim: "Even after...the August 2016 ruling, the [Secretary of Transportation] Rahn declaration says, point blank, we continue to spend state money on this project with the expectation and assumption that we would get reimbursed by the federal government. That is self-inflicted injury..."
At the end of the hearing the Judge summed it up: "It is pretty obvious...what they're doing, they want a ruling out of this Court as fast as possible so they can get the Court of Appeals to grant the stay. That's what is going on here."
Whole Foods v. Wall Street: an interesting article provides background on the Amazon acquisition of Whole Foods
Excerpt:
Mackey [the Whole Foods founder], to a large degree, is a victim of his own success. He has, from the beginning, been willing to compromise his ideals to grow his company, but he has his limits. And now they’re being tested. Turning Whole Foods into more of a mainstream grocer would be a form of defeat in his eyes, and that’s what he sees as the outcome if the company were to be sold. But paradoxically, staying independent and not growing the company aggressively enough could lead to his ouster—another form of defeat. His options are narrow and not obvious.
Full article: http://features.texasmonthly.com/editorial/shelf-life-john-mackey/
Excerpt:
Mackey [the Whole Foods founder], to a large degree, is a victim of his own success. He has, from the beginning, been willing to compromise his ideals to grow his company, but he has his limits. And now they’re being tested. Turning Whole Foods into more of a mainstream grocer would be a form of defeat in his eyes, and that’s what he sees as the outcome if the company were to be sold. But paradoxically, staying independent and not growing the company aggressively enough could lead to his ouster—another form of defeat. His options are narrow and not obvious.
Full article: http://features.texasmonthly.com/editorial/shelf-life-john-mackey/
Excerpt from Recorder article:
Glassdoor Inc., the operator of the anonymous online job review site, has asked the U.S. Court of Appeals for the Ninth Circuit to block an attempt by federal prosecutors to unmask reviewers as part of a grand jury investigation.
In a case unsealed on Tuesday, Glassdoor was ordered by U.S. District Judge Diane Humetewa for the District of Arizona to divulge the identities of eight people who posted anonymous reviewers about a federal contractor under investigation for fraud.
Glassdoor has refused to comply with the order, arguing on the reviewers' behalf that they have a First Amendment right to speak anonymously and to associate freely on the online platform. The company filed its sealed notice of appeal from a contempt order on June 7.
In a blog post on Friday, Glassdoor general counsel Brad Serwin wrote the district court "applied the wrong standard in placing the interests of government ahead of Americans' protected free speech rights under the First Amendment." He added: "We hope to persuade the U.S. Ninth Circuit Court of Appeals to require a higher standard for these requests."
Glassdoor is being represented in the litigation by Todd Hinnen, a Perkins Coie litigator in Seattle who previously served as acting assistant attorney general for national security at the U.S. Department of Justice. Hinnen has also represented companies such as Google Inc. in fighting warrants for user data in areas where the law is murky.
Full article: http://www.therecorder.com/id=1202790288127/Glassdoor-Resists-Feds-Bid-to-Unmask-Reviewers?kw=Glassdoor%20Resists%20Feds%27%20Bid%20to%20Unmask%20Reviewers&et=editorial&bu=The%20Recorder&cn=20170616&src=EMC-Email&pt=Afternoon%20Update
Solar panel provider Solar City's challenge to utility rate setting stays alive, despite state-action defense
From the 9th Circuit opinion:
FRIEDLAND, Circuit Judge: Solar-panel supplier SolarCity Corporation filed a federal antitrust lawsuit against the Salt River Project Agricultural Improvement and Power District (the Power District), alleging that the Power District had attempted to entrench its monopoly by setting prices that disfavored solarpower providers. The Power District moved to dismiss the complaint based on the state-action immunity doctrine. That doctrine insulates states, and in some instances their subdivisions, from federal antitrust liability when they regulate prices in a local industry or otherwise limit competition, as long as they are acting as states in doing so. See, e.g., N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101, 1109 (2015); FTC v. Phoebe Putney Health Sys., Inc., 133 S. Ct. 1003, 1007 (2013); Parker v. Brown, 317 U.S. 341, 352 (1943). 4 SOLARCITY V. SALT RIVER PROJECT The district court denied the motion, and the Power District appealed. We must decide whether we can consider the appeal immediately under the collateral-order doctrine, or whether any appeal based on state-action immunity must await final judgment.1 We join the Fourth and Sixth Circuits in holding that the collateral-order doctrine does not allow an immediate appeal of an order denying a dismissal motion based on state-action immunity.
See opinion: http://cdn.ca9.uscourts.gov/datastore/opinions/2017/06/12/15-17302.pdf
From the 9th Circuit opinion:
FRIEDLAND, Circuit Judge: Solar-panel supplier SolarCity Corporation filed a federal antitrust lawsuit against the Salt River Project Agricultural Improvement and Power District (the Power District), alleging that the Power District had attempted to entrench its monopoly by setting prices that disfavored solarpower providers. The Power District moved to dismiss the complaint based on the state-action immunity doctrine. That doctrine insulates states, and in some instances their subdivisions, from federal antitrust liability when they regulate prices in a local industry or otherwise limit competition, as long as they are acting as states in doing so. See, e.g., N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101, 1109 (2015); FTC v. Phoebe Putney Health Sys., Inc., 133 S. Ct. 1003, 1007 (2013); Parker v. Brown, 317 U.S. 341, 352 (1943). 4 SOLARCITY V. SALT RIVER PROJECT The district court denied the motion, and the Power District appealed. We must decide whether we can consider the appeal immediately under the collateral-order doctrine, or whether any appeal based on state-action immunity must await final judgment.1 We join the Fourth and Sixth Circuits in holding that the collateral-order doctrine does not allow an immediate appeal of an order denying a dismissal motion based on state-action immunity.
See opinion: http://cdn.ca9.uscourts.gov/datastore/opinions/2017/06/12/15-17302.pdf
Can a class action be certified without an allegation that all class members have been injured?
By Danyll Foix
Excerpt:
Ten years into litigation, a hospital has moved to decertify a class of plaintiffs who claim the hospital’s merger caused them to overpay for medical services. Arguing there is insufficient proof that class members were harmed, the hospital’s motion invites the court to jump into the fray about whether classes may be certified when they include members who were not actually injured.
Defendant NorthShore University HealthSystem and Highland Park Hospital, both located near Chicago, merged in 2000. After the Federal Trade Commission pursued a post-merger challenge in 2004 for alleged violations of Section 7 of the Clayton Act, a putative class of hospital patients filed suit in 2008 claiming the merger caused them to pay inflated prices for inpatient and outpatient hospital services. The District Court initially denied a motion to certify a class of patients who had paid for NorthShore’s services, but the Seventh Circuit vacated that denial in 2012 – see Messner v. NorthShore Univ. HealthSystem, 669 F.3d 802 (7th Cir. 2012) – and on remand the District Court then certified the class in 2013.
In its current challenge to certification, NorthShore primarily argues that the class should be decertified because the plaintiffs’ expert analysis relies on average prices and they cannot show that Rule 23’s “predominance” factor is satisfied. Like most class actions, this case was brought pursuant to Rule 23(b)(3), which requires that courts find “questions of law or fact common to class members predominate over any questions affecting only individual members.” This predominance inquiry is designed to ensure that class members’ claims are sufficiently similar in order to justify class treatment. When a proposed class includes persons who have not been injured by the challenged conduct, as NorthShore argues here, individual issues may preclude establishing that common issues predominate as required by Rule 23(b)(3).
In arguing there is insufficient proof that all class members were harmed, NorthShore invites the District Court to weigh in on a developing rift over whether classes may be certified when they include members who have not been injured. Some circuit courts have explained that classes cannot be certified when they include uninjured members. See, e.g., In re Rail Freight Fuel Surcharge Antitrust Litig., 725 F.3d 244, 252 (D.C. Cir. 2013) (“plaintiffs must also show that they can prove, through common evidence, that all class members were in fact injured by the alleged conspiracy”); Denney v. Deutsche Bank AG, 443 F.3d 253, 263-64 (2d Cir. 2006) (“no class may be certified that contains members lacking Article III standing”); and New Motor Vehicles Canadian Export Litig., 522 F.3d 6, 28 (1st Cir. 2008) (holding certification required proof that “each member of the class was in fact injured”).
In contrast, other circuit courts have held that a class may be certified even though some members are not injured. See, e.g., Torres v. Mercer Canyons Inc., 835 F. 3d 1125, 1136 (9th Cir. 2016) (“a well-defined class may inevitably contain some individuals who have suffered no harm as a result of a defendant’s unlawful conduct”); In re Nexium Antitrust Litig., 777 F.3d 9, 14 (1st Cir. 2015) (“We conclude that class certification is permissible even if the class includes a de minimis number of uninjured parties”); and Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 757 (7th Cir. 2014) (“If the court thought that no class can be certified until proof exists that every member has been harmed, it was wrong”).
Full article: https://www.antitrustadvocate.com/2017/06/13/hospital-seeks-second-opinion-on-certifying-class-with-uninjured-members/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_campaign=6420db9d35-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_a95f379648-6420db9d35-70980973
By Danyll Foix
Excerpt:
Ten years into litigation, a hospital has moved to decertify a class of plaintiffs who claim the hospital’s merger caused them to overpay for medical services. Arguing there is insufficient proof that class members were harmed, the hospital’s motion invites the court to jump into the fray about whether classes may be certified when they include members who were not actually injured.
Defendant NorthShore University HealthSystem and Highland Park Hospital, both located near Chicago, merged in 2000. After the Federal Trade Commission pursued a post-merger challenge in 2004 for alleged violations of Section 7 of the Clayton Act, a putative class of hospital patients filed suit in 2008 claiming the merger caused them to pay inflated prices for inpatient and outpatient hospital services. The District Court initially denied a motion to certify a class of patients who had paid for NorthShore’s services, but the Seventh Circuit vacated that denial in 2012 – see Messner v. NorthShore Univ. HealthSystem, 669 F.3d 802 (7th Cir. 2012) – and on remand the District Court then certified the class in 2013.
In its current challenge to certification, NorthShore primarily argues that the class should be decertified because the plaintiffs’ expert analysis relies on average prices and they cannot show that Rule 23’s “predominance” factor is satisfied. Like most class actions, this case was brought pursuant to Rule 23(b)(3), which requires that courts find “questions of law or fact common to class members predominate over any questions affecting only individual members.” This predominance inquiry is designed to ensure that class members’ claims are sufficiently similar in order to justify class treatment. When a proposed class includes persons who have not been injured by the challenged conduct, as NorthShore argues here, individual issues may preclude establishing that common issues predominate as required by Rule 23(b)(3).
In arguing there is insufficient proof that all class members were harmed, NorthShore invites the District Court to weigh in on a developing rift over whether classes may be certified when they include members who have not been injured. Some circuit courts have explained that classes cannot be certified when they include uninjured members. See, e.g., In re Rail Freight Fuel Surcharge Antitrust Litig., 725 F.3d 244, 252 (D.C. Cir. 2013) (“plaintiffs must also show that they can prove, through common evidence, that all class members were in fact injured by the alleged conspiracy”); Denney v. Deutsche Bank AG, 443 F.3d 253, 263-64 (2d Cir. 2006) (“no class may be certified that contains members lacking Article III standing”); and New Motor Vehicles Canadian Export Litig., 522 F.3d 6, 28 (1st Cir. 2008) (holding certification required proof that “each member of the class was in fact injured”).
In contrast, other circuit courts have held that a class may be certified even though some members are not injured. See, e.g., Torres v. Mercer Canyons Inc., 835 F. 3d 1125, 1136 (9th Cir. 2016) (“a well-defined class may inevitably contain some individuals who have suffered no harm as a result of a defendant’s unlawful conduct”); In re Nexium Antitrust Litig., 777 F.3d 9, 14 (1st Cir. 2015) (“We conclude that class certification is permissible even if the class includes a de minimis number of uninjured parties”); and Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 757 (7th Cir. 2014) (“If the court thought that no class can be certified until proof exists that every member has been harmed, it was wrong”).
Full article: https://www.antitrustadvocate.com/2017/06/13/hospital-seeks-second-opinion-on-certifying-class-with-uninjured-members/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_campaign=6420db9d35-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_a95f379648-6420db9d35-70980973
Maryland and DC AGs to put imprimatur on non-government Constitutional emoluments clause litigation against Trump
The Maryland and DC AGs have filed litigation against Donald Trump based on the Constitution's emoluments clause. A copy of the complaint is here:
https://www.nytimes.com/interactive/2017/06/12/us/politics/document-dc-maryland-trump-complaint.html
The litigation follows in the footsteps of non-government emoluments clause litigation. A copy of the earlier Complaint filed by the Citizens for Responsibility and Ethics in Government group and others is here: https://s3.amazonaws.com/storage.citizensforethics.org/wp-content/uploads/2017/04/18115942/File-Stamped-First-Amended-Complaint.pdf
The Amended Citizens Complaint says as part of its opening segment that:
Defendant has committed and will commit violations of both the Foreign Emoluments Clause and the Domestic Emoluments Clause, involving at least:
(a) leases held by foreign-governmentowned entities in New York’s Trump Tower;
(b) room reservations, restaurant purchases, the use of facilities, and the purchase of other services and goods by foreign governments and diplomats, state governments, and federal agencies, at Defendant’s Washington, D.C. hotel and restaurant;
(c) hotel stays, property leases, restaurant purchases, and other business transactions tied to foreign governments, state governments, and federal agencies at other domestic and international establishments owned, operated, or licensed by Defendant;
(d) property interests or other business dealings tied to foreign governments in numerous other countries;
(e) payments from foreign-government-owned broadcasters related to rebroadcasts and foreign versions of the television program “The Apprentice” and its spinoffs; and
(f) continuation of the General Services Administration lease for Defendant’s Washington, D.C. hotel despite Defendant’s breach, and potential provision of federal tax credits in connection with the same property.
The litigations offer interesting examplea of litigation strategies available to government and non-government organizations.
Similar litigation by Democratic federal legislators has been announced.
An issue that has been raised about all of the Emolument Clause litigations concerns standing to sue. Commenters suggest that the Maryland and DC AGs are in a relatively better position on standing issues as co-equal sovereigns.
A relevant article on the broader issue of standing to sue on public policy issues discusses standing to sue on environmental issues. See https://www.americanbar.org/content/dam/aba/images/public_education/06_apr08_standingsueenvironment_martin.pdf
Posted by Don Allen Resnikoff
The Maryland and DC AGs have filed litigation against Donald Trump based on the Constitution's emoluments clause. A copy of the complaint is here:
https://www.nytimes.com/interactive/2017/06/12/us/politics/document-dc-maryland-trump-complaint.html
The litigation follows in the footsteps of non-government emoluments clause litigation. A copy of the earlier Complaint filed by the Citizens for Responsibility and Ethics in Government group and others is here: https://s3.amazonaws.com/storage.citizensforethics.org/wp-content/uploads/2017/04/18115942/File-Stamped-First-Amended-Complaint.pdf
The Amended Citizens Complaint says as part of its opening segment that:
Defendant has committed and will commit violations of both the Foreign Emoluments Clause and the Domestic Emoluments Clause, involving at least:
(a) leases held by foreign-governmentowned entities in New York’s Trump Tower;
(b) room reservations, restaurant purchases, the use of facilities, and the purchase of other services and goods by foreign governments and diplomats, state governments, and federal agencies, at Defendant’s Washington, D.C. hotel and restaurant;
(c) hotel stays, property leases, restaurant purchases, and other business transactions tied to foreign governments, state governments, and federal agencies at other domestic and international establishments owned, operated, or licensed by Defendant;
(d) property interests or other business dealings tied to foreign governments in numerous other countries;
(e) payments from foreign-government-owned broadcasters related to rebroadcasts and foreign versions of the television program “The Apprentice” and its spinoffs; and
(f) continuation of the General Services Administration lease for Defendant’s Washington, D.C. hotel despite Defendant’s breach, and potential provision of federal tax credits in connection with the same property.
The litigations offer interesting examplea of litigation strategies available to government and non-government organizations.
Similar litigation by Democratic federal legislators has been announced.
An issue that has been raised about all of the Emolument Clause litigations concerns standing to sue. Commenters suggest that the Maryland and DC AGs are in a relatively better position on standing issues as co-equal sovereigns.
A relevant article on the broader issue of standing to sue on public policy issues discusses standing to sue on environmental issues. See https://www.americanbar.org/content/dam/aba/images/public_education/06_apr08_standingsueenvironment_martin.pdf
Posted by Don Allen Resnikoff
Without DOJ Backing, States Pursue AmEx Antitrust Appeal
Article excerpts:
Eleven states are doing what the Justice Department declined to do — asking the U.S. Supreme Court to review an appeals court win for American Express Co. that allows it to continue telling merchants not to steer customers to cheaper credit cards.
But the DOJ’s decision not to appeal its antitrust loss, its first in more than a decade, could narrow the chances of the high court taking up the case because the federal government is no longer involved, antitrust practitioners told Bloomberg BNA.
* * *
On June 2, the DOJ declined to ask the Supreme Court to review its suit challenging AmEx’s rules preventing merchants from asking customers to use lower priced credit cards. But 11 states that initially joined the DOJ’s suit pressed on and filed their own petition for a writ of certiorari.
* * *
The case was brought in 2010 by antitrust officials in the Obama administration, and it involves legal questions that haven’t been widely explored by the courts. Siding with the government, a district court in 2015 found that American Express’s rules constituted an unreasonable restraint on trade and resulted in higher prices for consumers.
But in September, the Second Circuit said the district court got it wrong by only considering the interests of merchants, which are just one side of a two-sided market that also includes card holders. The DOJ had argued that it was sufficient to examine the market generally. The lower court judge in the case, Nicholas Garaufis, has had only 11.1 percent of his decisions reversed, according to a Bloomberg Law’s Litigation Analytics.
* * *
“My hat is off to the states for carrying on even after the DOJ walked away,” [Professor Stephen] Calkins said. “It will be fascinating to see whether the court invites the views of the [Justice Department’s] solicitor general, and, if so, how the solicitor general will phrase opposition to certiorari. But it seems very unlikely that certiorari will be granted.”
The states’ decision to pursue the case is reminiscent of a divergence of antitrust thought in the Reagan era, when states had to take the lead in antitrust enforcement because of “the weakness of federal enforcement,” Peter Carstensen, a professor at University of Wisconsin Law School, told Bloomberg BNA.
“Getting the court to take a case is always a challenge,” Carstensen said. “Without the U.S. as a party, this will increase the difficulty of getting the court to review the decision.”
Some of the nation’s largest merchants, such as United Airlines Inc., Marriott International Inc., and Target Corp, supported the government’s case. They said in court filings that AmEx’s rules prevent price competition for credit card network services.
“We are delighted that the states appealed and will wholeheartedly support them in this undertaking,” Retail Litigation Center President Deborah White said in a statement provided to Bloomberg BNA. The legal advocacy group for the retail industry filed a brief with the Second Circuit in support of the DOJ’s case.
States’ Arguments
The states argued in their appeal that the Supreme Court should review the AmEx case because of an increasing need for guidance on the “rule of reason” antitrust legal standard and because the Second Circuit’s decision conflicts with past cases.
The Second Circuit panel analyzed the case under the “rule of reason” doctrine, which often requires extensive analysis of a certain conduct’s impacts on a relevant market, as opposed to the “quick look” or “per se” theory of liability to anticompetitive conduct.
None of the Supreme Court’s recent cases explain how the rule of reason should operate in practice once it is determined the case isn’t a “per se” violation. The court has “offered only generalities,” the brief said.
Before the AmEx decision, the Second Circuit had ruled that the credit card industry contains more than one market for antitrust purposes, the states said. That view guided a discovery period that lasted several years and a lengthy trial.
“Only after this costly litigation did the government learn from the Second Circuit that it had allegedly focused on the wrong market,” the appeal says. “Years of litigation that were financed through taxpayer dollars were wasted by the rule of reason’s uncertainties.”
The Second Circuit’s insistence that enforcers must view each side of a two-sided market separately is a departure from the test the appeals court has “long used” to identify antitrust markets, the states said.
“Rather than apply the established market-definition test, the Second Circuit adopted a new one,” the appeal stated.
https://bol.bna.com/without-doj-backing-states-pursue-amex-antitrust-appeal/
Antitrust Watchdogs Eye Big Tech's Monopoly On Your Data
Article excerpt:
“When more and more services are ‘free,’ you can see how that really renders antitrust feeble,” says Khan. After the rapid expansion in social networking and online search, it’s clear that financial power lies in data, not just price. “The Europeans hit on this,” says [Maurice] Stucke. “Data is the new lingua franca. That is the currency, and [tech platforms] can translate that data into dollars.”
This is evident in the European Union's intensified scrutiny of how Silicon Valley tech platforms operate. Germany’s antitrust agency is investigating Facebook. The EU conducted an antitrust probe into Amazon’s e-books business deals (the company agreed to change its contract with publishers in May). Days before the Oxford conference, the EU fined Facebook $122 million for making misleading privacy statements to the EU when it acquired WhatsApp for $19 billion in 2014 about the ability to match Facebook and WhatsApp accounts. (The merger of the popular texting apps raised concerns that Facebook’s online advertising business could gain an unfair advantage.) Days before that, watchdogs in the Netherlands and France slapped Facebook on the wrist for privacy violations.
- https://www.wired.com/2017/06/ntitrust-watchdogs-eye-big-techs-monopoly-data/?mbid=synd_digg" via Digg
Article excerpt:
“When more and more services are ‘free,’ you can see how that really renders antitrust feeble,” says Khan. After the rapid expansion in social networking and online search, it’s clear that financial power lies in data, not just price. “The Europeans hit on this,” says [Maurice] Stucke. “Data is the new lingua franca. That is the currency, and [tech platforms] can translate that data into dollars.”
This is evident in the European Union's intensified scrutiny of how Silicon Valley tech platforms operate. Germany’s antitrust agency is investigating Facebook. The EU conducted an antitrust probe into Amazon’s e-books business deals (the company agreed to change its contract with publishers in May). Days before the Oxford conference, the EU fined Facebook $122 million for making misleading privacy statements to the EU when it acquired WhatsApp for $19 billion in 2014 about the ability to match Facebook and WhatsApp accounts. (The merger of the popular texting apps raised concerns that Facebook’s online advertising business could gain an unfair advantage.) Days before that, watchdogs in the Netherlands and France slapped Facebook on the wrist for privacy violations.
- https://www.wired.com/2017/06/ntitrust-watchdogs-eye-big-techs-monopoly-data/?mbid=synd_digg" via Digg
Dueling filings in NY State AG battle with EXXON over climate change accounting
ExxonMobil defended itself in court documents Friday following claims by New York Attorney General Eric Schneiderman that the company used two sets of books in evaluating climate risk, one set of numbers for describing the risks to investors and the other for business decisions. Schneiderman had described the practice as a "sham" perpetrated by the oil giant while Rex Tillerson was its chief executive.
Exxon's lawyers wrote that the company had "truthfully and consistently" told the public that it "addresses potential impacts of future climate-related policies." They also accused Schneiderman of playing to the media and of disclosing confidential and proprietary records that were attached as exhibits to his brief filed last week in New York Supreme Court.
See https://www.documentcloud.org/documents/3861753-Exxon-Responds-to-Double-Numbers-6-9-17.html
The AG's filing is here: https://www.documentcloud.org/documents/3860667-Document-168-NYAG-Opposition-to-Exxon-Motion-to.html
Credit: InsideClimateNews. See https://insideclimatenews.org/news/09062017/exxon-climate-accounting-court-document
ExxonMobil defended itself in court documents Friday following claims by New York Attorney General Eric Schneiderman that the company used two sets of books in evaluating climate risk, one set of numbers for describing the risks to investors and the other for business decisions. Schneiderman had described the practice as a "sham" perpetrated by the oil giant while Rex Tillerson was its chief executive.
Exxon's lawyers wrote that the company had "truthfully and consistently" told the public that it "addresses potential impacts of future climate-related policies." They also accused Schneiderman of playing to the media and of disclosing confidential and proprietary records that were attached as exhibits to his brief filed last week in New York Supreme Court.
See https://www.documentcloud.org/documents/3861753-Exxon-Responds-to-Double-Numbers-6-9-17.html
The AG's filing is here: https://www.documentcloud.org/documents/3860667-Document-168-NYAG-Opposition-to-Exxon-Motion-to.html
Credit: InsideClimateNews. See https://insideclimatenews.org/news/09062017/exxon-climate-accounting-court-document
Is California's Bar pass score too high?
In February the deans of 20 California law schools sent a letter to the state Supreme Court asking study of whether the bar exam’s minimum passing score is unjustifiably high. See Dean's letter on Bar pass rate.
Discussion of the request continues.
The Deans' request came after the pass rate for the summer 2016 test plummeted to 43 percent, the lowest figure for a July sitting in 32 years. First-time test-takers among American Bar Association-accredited schools in California did better—62 percent passed—but still lagged significantly behind their counterparts in other states, including New York, Texas and Ohio.
The deans blame California’s “atypically high” passing score, or cut score, of 144 for the multistate bar exam portion of the test. Only Delaware requires a higher score on its exam. And yet those who took the California exam scored almost three points higher on the multistate bar exam than the national average.
“California graduates of ABA-accredited schools are performing better than average, and yet many of them—graduates of our law schools who would have passed the bar with similar performance in virtually any other state—are failing it in our great state, simply because of where California has decided to draw the line between passing and failing,” the deans wrote in their letter.
In February the deans of 20 California law schools sent a letter to the state Supreme Court asking study of whether the bar exam’s minimum passing score is unjustifiably high. See Dean's letter on Bar pass rate.
Discussion of the request continues.
The Deans' request came after the pass rate for the summer 2016 test plummeted to 43 percent, the lowest figure for a July sitting in 32 years. First-time test-takers among American Bar Association-accredited schools in California did better—62 percent passed—but still lagged significantly behind their counterparts in other states, including New York, Texas and Ohio.
The deans blame California’s “atypically high” passing score, or cut score, of 144 for the multistate bar exam portion of the test. Only Delaware requires a higher score on its exam. And yet those who took the California exam scored almost three points higher on the multistate bar exam than the national average.
“California graduates of ABA-accredited schools are performing better than average, and yet many of them—graduates of our law schools who would have passed the bar with similar performance in virtually any other state—are failing it in our great state, simply because of where California has decided to draw the line between passing and failing,” the deans wrote in their letter.
David Samson sentenced to just one year home confinement after his plea to bribery charges for shaking down United Airlines to get a more direct flight out of N.J. to his vacation home in South Carolina.
BY TED SHERMAN
[email protected],
NJ Advance Media for NJ.com
NEWARK -- Facing two years in prison for the shakedown of United Airlines in a bizarre scheme to get a more convenient direct flight to his South Carolina getaway home, former Port Authority chairman David Samson found a soft landing when he was sentenced a few months ago.
U.S. District Judge Jose Linares stunned federal prosecutors by sentencing Samson to a year of home confinement, four years of probation and 3,600 hours of community service in his admitted strong-arming of the airline.
The 77-year-old former New Jersey attorney general will also be required to pay a $100,000 fine and wear a location-monitoring device.
"I did something wrong. I violated the law. I deeply regret it. I am trying to live my life to the highest moral standards," Samson said in court, apologizing to his family his friends and the public. "I violated the law. I deeply regret it."
Full article: http://www.nj.com/news/index.ssf/2017/03/david_samson_sentenced_to_probation_in_united_airl.html
BY TED SHERMAN
[email protected],
NJ Advance Media for NJ.com
NEWARK -- Facing two years in prison for the shakedown of United Airlines in a bizarre scheme to get a more convenient direct flight to his South Carolina getaway home, former Port Authority chairman David Samson found a soft landing when he was sentenced a few months ago.
U.S. District Judge Jose Linares stunned federal prosecutors by sentencing Samson to a year of home confinement, four years of probation and 3,600 hours of community service in his admitted strong-arming of the airline.
The 77-year-old former New Jersey attorney general will also be required to pay a $100,000 fine and wear a location-monitoring device.
"I did something wrong. I violated the law. I deeply regret it. I am trying to live my life to the highest moral standards," Samson said in court, apologizing to his family his friends and the public. "I violated the law. I deeply regret it."
Full article: http://www.nj.com/news/index.ssf/2017/03/david_samson_sentenced_to_probation_in_united_airl.html
Report from abetterbalance.org: “Pointing Out: How Walmart Unlawfully Punishes Workers for Medical Absences”
Executive Summary:
Walmart is proud of its heritage as a family-founded company. Ironically, while the Walton family touts its family values, Walmart’s absence control program punishes workers who need to be there for their own families. Walmart disciplines workers for occasional absences due to caring for sick or disabled family members and for needing to take time off for their own illnesses or disabilities. Although this system is supposed to be “neutral,” and punish all absences equally, along the lines of a “three strikes and you’re out” policy, in reality such a system is brutally unfair. It punishes workers for things they cannot control and disproportionately harms the most vulnerable workers.
Punishing workers for absences related to illness or disability is not only unfair, it’s often against the law. Based on our conversations with Walmart employees as well as survey results of over 1,000 current and former Walmart workers who have struggled due to Walmart’s absence control program, Walmart may regularly be violating the federal Family and Medical Leave Act (FMLA) by failing to give adequate notice to its employees about when absences might be protected by the FMLA and by giving its employees disciplinary points for taking time to care for themselves, their children, their spouses or their parents even though that time is covered by the FMLA.
Similarly, we allege that Walmart’s policies and practices of refusing to consider doctors’ notes and giving disciplinary points for disability-related absences is a violation of the Americans with Disabilities Act (ADA). The ADA protects workers with disabilities from being disciplined or fired because of their disabilities. It also requires employers to engage in a good faith interactive process to determine an appropriate accommodation for workers with disabilities. Unfortunately, as detailed in this report, this is too often not Walmart’s practice. Other federal, state and local laws such as pregnancy accommodation protections, and sick time laws, could also be at play. Walmart’s policies and practices are not in compliance with many of these laws.
Simply put: Giving a worker a disciplinary “point” for being absent due to a disability or for taking care of themselves or a loved one with a serious medical condition is not only unfair, in many instances, it runs afoul of federal, state and local law.
We call on Walmart not only to follow the law, but to work with its employees who have occasional absences related to health and disability. Walmart can do better, and Walmart must do better. Workers and the advocates standing with them will not stop pushing until Walmart treats its workers fairly.
Read our press release here.
- June 1, 2017
- Absence control, Featured, State Laws
Executive Summary:
Walmart is proud of its heritage as a family-founded company. Ironically, while the Walton family touts its family values, Walmart’s absence control program punishes workers who need to be there for their own families. Walmart disciplines workers for occasional absences due to caring for sick or disabled family members and for needing to take time off for their own illnesses or disabilities. Although this system is supposed to be “neutral,” and punish all absences equally, along the lines of a “three strikes and you’re out” policy, in reality such a system is brutally unfair. It punishes workers for things they cannot control and disproportionately harms the most vulnerable workers.
Punishing workers for absences related to illness or disability is not only unfair, it’s often against the law. Based on our conversations with Walmart employees as well as survey results of over 1,000 current and former Walmart workers who have struggled due to Walmart’s absence control program, Walmart may regularly be violating the federal Family and Medical Leave Act (FMLA) by failing to give adequate notice to its employees about when absences might be protected by the FMLA and by giving its employees disciplinary points for taking time to care for themselves, their children, their spouses or their parents even though that time is covered by the FMLA.
Similarly, we allege that Walmart’s policies and practices of refusing to consider doctors’ notes and giving disciplinary points for disability-related absences is a violation of the Americans with Disabilities Act (ADA). The ADA protects workers with disabilities from being disciplined or fired because of their disabilities. It also requires employers to engage in a good faith interactive process to determine an appropriate accommodation for workers with disabilities. Unfortunately, as detailed in this report, this is too often not Walmart’s practice. Other federal, state and local laws such as pregnancy accommodation protections, and sick time laws, could also be at play. Walmart’s policies and practices are not in compliance with many of these laws.
Simply put: Giving a worker a disciplinary “point” for being absent due to a disability or for taking care of themselves or a loved one with a serious medical condition is not only unfair, in many instances, it runs afoul of federal, state and local law.
We call on Walmart not only to follow the law, but to work with its employees who have occasional absences related to health and disability. Walmart can do better, and Walmart must do better. Workers and the advocates standing with them will not stop pushing until Walmart treats its workers fairly.
Read our press release here.
Trump wants to partner with States on infrastructure financing; will open infrastructure initiative with air traffic control plans
Donald Trump next week will send Congress a proposal to hand over control of the U.S. air-traffic control system to a non-profit corporation, part of a week-long push for his infrastructure plan, said Gary Cohn, the president’s chief economic adviser.
The proposal, which Trump will release on Monday in an Oval Office ceremony and Rose Garden event, will kick off what Cohn, director of the National Economic Council, called the formal launch of the president’s infrastructure initiative. Later in the week, Trump plans to travel to Ohio to garner support for his plan -- a key campaign promise -- to channel $1 trillion into the nation’s roads, bridges, inland waterways and other public facilities.
“We know that in many of these areas we’re falling behind, and the falling behind is affecting economic growth in the United States,’’ Cohn said on a call with reporters. “The president wants to fix the problems, and he doesn’t want to push these liabilities into the future.’’
ump’s actions come after an initial outline of his infrastructure plan and his proposed budget sparked criticism from state and city leaders of both parties, who said they’d be left with too much of the financial burden.
For the $1 trillion plan, Trump has proposed $200 billion in federal spending on “targeted federal investments’’ in rural areas and for projects with regional or national priority, as well as for “self-help” incentives to spur states, localities and private entities to generate more of their own revenues for projects.
Congressional Democrats, who Trump is counting on to help get his plan through Congress, have also blasted the plan – as well as proposed 2018 budget cuts to transportation programs – and have said that significantly more direct federal funding is needed.
https://www.bloomberg.com/politics/articles/2017-06-03/trump-to-kick-off-infrastructure-drive-with-air-traffic-proposal
Donald Trump next week will send Congress a proposal to hand over control of the U.S. air-traffic control system to a non-profit corporation, part of a week-long push for his infrastructure plan, said Gary Cohn, the president’s chief economic adviser.
The proposal, which Trump will release on Monday in an Oval Office ceremony and Rose Garden event, will kick off what Cohn, director of the National Economic Council, called the formal launch of the president’s infrastructure initiative. Later in the week, Trump plans to travel to Ohio to garner support for his plan -- a key campaign promise -- to channel $1 trillion into the nation’s roads, bridges, inland waterways and other public facilities.
“We know that in many of these areas we’re falling behind, and the falling behind is affecting economic growth in the United States,’’ Cohn said on a call with reporters. “The president wants to fix the problems, and he doesn’t want to push these liabilities into the future.’’
ump’s actions come after an initial outline of his infrastructure plan and his proposed budget sparked criticism from state and city leaders of both parties, who said they’d be left with too much of the financial burden.
For the $1 trillion plan, Trump has proposed $200 billion in federal spending on “targeted federal investments’’ in rural areas and for projects with regional or national priority, as well as for “self-help” incentives to spur states, localities and private entities to generate more of their own revenues for projects.
Congressional Democrats, who Trump is counting on to help get his plan through Congress, have also blasted the plan – as well as proposed 2018 budget cuts to transportation programs – and have said that significantly more direct federal funding is needed.
https://www.bloomberg.com/politics/articles/2017-06-03/trump-to-kick-off-infrastructure-drive-with-air-traffic-proposal
Hersh Shefrin on financial instability and China
The late economist Hyman Minsky laid out the general warning signs in a framework he called the financial instability hypothesis (FIH). However, most ignored Minsky’s messages until it was too late. It was only after the global financial crisis erupted that the phrase “Minsky moment” became fashionable.
Coverage of Moody’s downgrade by The Wall Street Journal and The New York Times has nicely conveyed the key facts of what led Moody’s to downgrade China’s debt. But the coverage could do more by linking those facts to the FIH, in order to help readers connect the dots of how the worrisome pieces of the China puzzle fit together.
The key features of the FIH can be boiled down to six types of crisis warning signs, two signs that a crisis is erupting, and four types of policies for mitigating the magnitude of a crisis. The specific warning signs are not arbitrary, but instead characterize the evolution of systemic risk as the financial system moves towards the red zone during the latter phase of an economic expansion. In this regard, China's economy expanded at an official rate of 10.6 percent in 2010, but its more recent growth rate has been lower, 6.7 percent in 2016. Moody’s forecasts that over the next five years, the rate will continue to decline, falling to 5 percent.
What follows is a short FIH-based rundown on China, organized around the six warning signs. This rundown takes the key points in the media coverage of Moody’s China downgrade, and matches these points to Minsky’s perspective. In making the match, I hope to encourage journalists to organize their ideas so as to present the discussion in the context of the bigger picture, and thereby present their readers with a coherent view of what the facts mean for overall financial stability.
From: https://www.forbes.com/sites/hershshefrin/2017/05/28/the-lesson-from-moodys-overdue-downgrade-of-chinas-debt/#3febbcba65ef
The late economist Hyman Minsky laid out the general warning signs in a framework he called the financial instability hypothesis (FIH). However, most ignored Minsky’s messages until it was too late. It was only after the global financial crisis erupted that the phrase “Minsky moment” became fashionable.
Coverage of Moody’s downgrade by The Wall Street Journal and The New York Times has nicely conveyed the key facts of what led Moody’s to downgrade China’s debt. But the coverage could do more by linking those facts to the FIH, in order to help readers connect the dots of how the worrisome pieces of the China puzzle fit together.
The key features of the FIH can be boiled down to six types of crisis warning signs, two signs that a crisis is erupting, and four types of policies for mitigating the magnitude of a crisis. The specific warning signs are not arbitrary, but instead characterize the evolution of systemic risk as the financial system moves towards the red zone during the latter phase of an economic expansion. In this regard, China's economy expanded at an official rate of 10.6 percent in 2010, but its more recent growth rate has been lower, 6.7 percent in 2016. Moody’s forecasts that over the next five years, the rate will continue to decline, falling to 5 percent.
What follows is a short FIH-based rundown on China, organized around the six warning signs. This rundown takes the key points in the media coverage of Moody’s China downgrade, and matches these points to Minsky’s perspective. In making the match, I hope to encourage journalists to organize their ideas so as to present the discussion in the context of the bigger picture, and thereby present their readers with a coherent view of what the facts mean for overall financial stability.
- Excessive leverage: As a percentage of GDP, China’s debt at 164 percent is high for a developing country. In the first half of the century, before the financial crisis struck in 2008, China’s debt was stable. Since then, it has grown by 15 percent of GDP, per year. The lion’s share of that debt relates to businesses, and to a lesser extent local governments, rather than to households and the central government.
- Surge in shadow banking: In the past, four large state-controlled banks dominated China’s banking sector. However, in recent years a shadow banking system has evolved, involving local and provincial banks that today account for roughly half of the assets in the country’s banking sector. While the state is the lender of last resort for the four large banks, the latter serve as the lender of last resort to the shadow banks. Therefore, imprudent risk taking by shadow banks holds the potential to shock China’s entire financial system.
- Increased speculative and Ponzi finance: According to the FIH, a major source of financial instability is when borrowers count on price appreciation, in addition to cash flows, to make principal and interest payments. This feature is compounded by mismatching the maturities of assets (long-term) and liabilities (short-term), with borrowers needing to continue borrowing short term in order to avoid defaulting on their obligations. In recent years, banks in China have continued to make loans to state-owned firms that are experiencing financial distress, in order that these firms do not default. Minsky warned that such practices render the country’s financial system to become increasingly fragile.
- Emergence of asset pricing bubbles: Although pricing bubbles were not highlighted in the media coverage of Moody's downgrade, in recent years China has experienced both a stock market bubble and a real estate bubbles. What does get highlighted is the use of financial innovation. In particular, shadow banks are partly funded by state-owned banks, and partly funded by selling wealth management products to customers. These products are often non-transparent in terms of risk, and indeed are used to finance highly speculative construction projects.
- New era thinking: China’s reaction to the Moody’s downgrade has been to suggest that Moody's does not fully understand China’s system, which is different from corresponding systems in the West. To be sure, there are differences. Chinese central government debt is relatively low, as is residential mortgage debt. Chinese borrowing from the rest of the world is also low. On the surface, China scores favorably on three of the four FIH crisis mitigating factors: a large public sector able to increase spending to offset declines in aggregate demand, the power to create jobs when the labor market weakens, and the ability to rescue enterprises that are too big to fail. Notably, The Wall Street Journal reports that China has recently initiated efforts to reduce risky investment and financing practices by raising key short-term interest rates.
- Regulatory failure: China scores less well on the FIH’s fourth crisis mitigating factor. Over time, its regulatory system has deteriorated significantly, especially as regards the country’s shadow banks, where the increase in speculative and Ponzi finance have been concentrated. Perhaps there is hope, as The Wall Street Journal reports that regulators have increased their oversight of investment products that feature highly leveraged bets in financial markets.
From: https://www.forbes.com/sites/hershshefrin/2017/05/28/the-lesson-from-moodys-overdue-downgrade-of-chinas-debt/#3febbcba65ef
Pricing algorithms and antitrust
Excerpt from article by Sophie Lawrance (Bristows LLP) in Kluwer Competition Law Blog.
However, to the extent that actions by companies using pricing algorithms fall outside the current competition law framework (i.e. if a company implementing discriminatory pricing isn’t dominant, or companies using pricing algorithms have not entered into any agreements or concerted practices to do so), arguably the competition authorities should not try and stretch the existing law to cover these kinds of situations.
Instead, this could be more of a challenge for legislatures. It’s a question of policy: does the competition law framework need re-working to cover these sorts of issues?
To some extent this is already happening. Germany has already introduced significant changes to its antitrust laws to make it easier for the Bundeskartellamt to define markets and assess market power in the digital sector (see here and here), particularly where services are offered for ‘free’ and where multi-sided markets are involved. Commissioner Vestager has recently proposed a new directive designed to make national competition authorities more effective enforcers, ensuring for example that all national competition authorities have the power to search mobile phones, laptops, and tablets for evidence.
Differential (if not personal) pricing is also under the spotlight in relation to geo-blocking – where companies and online retailers apply barriers or impose restrictions on consumers on the basis of their nationality or place of residence. At present, such conduct can be examined under the competition rules only if it results from an agreement between separate undertakings or if the company holds a dominant position. The Commission has proposed a regulation designed end the enforcement gap in this area.
However, there is little concrete evidence of any action against the main issue identified in this article – namely, the potential anti-competitive effects arising from the independent use of pricing algorithms. Any change to the competition law framework designed to cover this would involve a significant (quite possibly unpalatable to many) change to the way competition law currently works around the world.
Perhaps competition law isn’t, or shouldn’t be, the solution. In their book Virtual Competition, Professors Ezrachi and Stucke offer some other suggestions. For example, the government could promote market entry by companies with different economic incentives, for example consumer-owned co-operatives that redistribute profits via rebates. It could provide subsidies to companies using algorithms that actually promote customers’ interests, or sponsor ‘maverick’ firms that offer disruptive technologies or that are more likely to take the lead in cutting prices.
Perhaps no changes will be needed at all. As Professor Salil Mehra points out (here, p.52-53) the effective use of algorithms and big data have the potential to make businesses vastly more efficient and reduce their costs. This could ultimately result in lower prices for consumers, even if tacit collusion is occurring.
Either way, the pace of technological development is always likely to outstrip the pace of legislative change. It will be very interesting to see how these issues play out in the future.
This post originally appeared in the Kluwer Competition Law Blog.
Excerpt from article by Sophie Lawrance (Bristows LLP) in Kluwer Competition Law Blog.
However, to the extent that actions by companies using pricing algorithms fall outside the current competition law framework (i.e. if a company implementing discriminatory pricing isn’t dominant, or companies using pricing algorithms have not entered into any agreements or concerted practices to do so), arguably the competition authorities should not try and stretch the existing law to cover these kinds of situations.
Instead, this could be more of a challenge for legislatures. It’s a question of policy: does the competition law framework need re-working to cover these sorts of issues?
To some extent this is already happening. Germany has already introduced significant changes to its antitrust laws to make it easier for the Bundeskartellamt to define markets and assess market power in the digital sector (see here and here), particularly where services are offered for ‘free’ and where multi-sided markets are involved. Commissioner Vestager has recently proposed a new directive designed to make national competition authorities more effective enforcers, ensuring for example that all national competition authorities have the power to search mobile phones, laptops, and tablets for evidence.
Differential (if not personal) pricing is also under the spotlight in relation to geo-blocking – where companies and online retailers apply barriers or impose restrictions on consumers on the basis of their nationality or place of residence. At present, such conduct can be examined under the competition rules only if it results from an agreement between separate undertakings or if the company holds a dominant position. The Commission has proposed a regulation designed end the enforcement gap in this area.
However, there is little concrete evidence of any action against the main issue identified in this article – namely, the potential anti-competitive effects arising from the independent use of pricing algorithms. Any change to the competition law framework designed to cover this would involve a significant (quite possibly unpalatable to many) change to the way competition law currently works around the world.
Perhaps competition law isn’t, or shouldn’t be, the solution. In their book Virtual Competition, Professors Ezrachi and Stucke offer some other suggestions. For example, the government could promote market entry by companies with different economic incentives, for example consumer-owned co-operatives that redistribute profits via rebates. It could provide subsidies to companies using algorithms that actually promote customers’ interests, or sponsor ‘maverick’ firms that offer disruptive technologies or that are more likely to take the lead in cutting prices.
Perhaps no changes will be needed at all. As Professor Salil Mehra points out (here, p.52-53) the effective use of algorithms and big data have the potential to make businesses vastly more efficient and reduce their costs. This could ultimately result in lower prices for consumers, even if tacit collusion is occurring.
Either way, the pace of technological development is always likely to outstrip the pace of legislative change. It will be very interesting to see how these issues play out in the future.
This post originally appeared in the Kluwer Competition Law Blog.
Maryland Screwed Its Craft Brewing Industry in Favor of Guinness
By Jim Vorel | April 14, 2017
Excerpt:
It’s only natural that the state’s legislators would probably want to cater to the likes of Diageo, makers of Guinness Stout, as a potential new employer and tourist attraction.
The only problem? In order to do so, they just decided to unilaterally hamstring every small production brewery trying to get its doors open in Maryland. In the blind pursuit of corporate business, Maryland is screwing its local beer industry, forcing new breweries to live by an entirely different set of laws than established ones. It’s a shockingly, patently unfair new hurdle for small businesses to clear, and one that came about by rather dubious means when it was railroaded through the Maryland legislature last week [first week of April].
Although the amount of beer a production brewery can sell from its taproom was increased to 2,000 barrels per year, if they want to sell any more, they’ll have to buy that beer back from their own distributor first. That means those kegs or bottles will physically have to leave the brewery, travel to the distributorship, “come to rest” and then be brought back and sold to the brewery that made it. Is it stupid? Of course it is.
Then there’s the matter of hours of operation. Under the amended bill, existing breweries will be grandfathered in and given the same rights as the planned Guinness brewery, with hours determined by their local licensing districts. Some of those are as late as midnight, and others can legally remain open as late as 2 a.m. New breweries in Maryland, on the other hand, will be required to close their taprooms as early as 9 p.m., Sunday through Thursday and 10 p.m. at latest, Friday and Saturdays. In effect, it strips the taprooms of all future production breweries from being able to operate as all-night hangouts for their customers, encouraging people to take their business elsewhere. It creates an unequal playing field, and the injustice should be obvious to anyone watching.
Matt Humbard is one of those brewery owners who stands to be directly affected by the new legislation. The owner of Handsome Beer Co. in the Washington DC metro area, Humbard’s beer is contract brewed off-site and served in his taproom. Following his dream to open up a brewery of his own, he had been planning a physical brewing operation to be based in Maryland. But after the passage of House Bill 1283, even after the amendments, he’s no longer sure this idea makes any sense.
Humbard’s company, Handsome Beer Co.
“Maryland is just completely on the wrong side of this,” says Humbard. “It’s counter to the culture of the whole craft beer industry, which is very collaborative in nature, to allow this kind of grandfathering to happen. Although I’m sure specific companies are happy they get to keep their hours, it’s completely unfair that new breweries will be on a different playing field than existing ones. How can you justify limiting one business differently than another business?”
What Maryland has done is a classic example of putting interest in big business over the very homegrown companies that the state legislators are supposed to be representing. Surely, the likes of AB InBev and MillerCoors are watching this situation and looking into ways they can take advantage of similar scenarios.
Full article: https://www.pastemagazine.com/articles/2017/04/maryland-just-screwed-its-craft-brewing-industry-i.html
By Jim Vorel | April 14, 2017
Excerpt:
It’s only natural that the state’s legislators would probably want to cater to the likes of Diageo, makers of Guinness Stout, as a potential new employer and tourist attraction.
The only problem? In order to do so, they just decided to unilaterally hamstring every small production brewery trying to get its doors open in Maryland. In the blind pursuit of corporate business, Maryland is screwing its local beer industry, forcing new breweries to live by an entirely different set of laws than established ones. It’s a shockingly, patently unfair new hurdle for small businesses to clear, and one that came about by rather dubious means when it was railroaded through the Maryland legislature last week [first week of April].
Although the amount of beer a production brewery can sell from its taproom was increased to 2,000 barrels per year, if they want to sell any more, they’ll have to buy that beer back from their own distributor first. That means those kegs or bottles will physically have to leave the brewery, travel to the distributorship, “come to rest” and then be brought back and sold to the brewery that made it. Is it stupid? Of course it is.
Then there’s the matter of hours of operation. Under the amended bill, existing breweries will be grandfathered in and given the same rights as the planned Guinness brewery, with hours determined by their local licensing districts. Some of those are as late as midnight, and others can legally remain open as late as 2 a.m. New breweries in Maryland, on the other hand, will be required to close their taprooms as early as 9 p.m., Sunday through Thursday and 10 p.m. at latest, Friday and Saturdays. In effect, it strips the taprooms of all future production breweries from being able to operate as all-night hangouts for their customers, encouraging people to take their business elsewhere. It creates an unequal playing field, and the injustice should be obvious to anyone watching.
Matt Humbard is one of those brewery owners who stands to be directly affected by the new legislation. The owner of Handsome Beer Co. in the Washington DC metro area, Humbard’s beer is contract brewed off-site and served in his taproom. Following his dream to open up a brewery of his own, he had been planning a physical brewing operation to be based in Maryland. But after the passage of House Bill 1283, even after the amendments, he’s no longer sure this idea makes any sense.
Humbard’s company, Handsome Beer Co.
“Maryland is just completely on the wrong side of this,” says Humbard. “It’s counter to the culture of the whole craft beer industry, which is very collaborative in nature, to allow this kind of grandfathering to happen. Although I’m sure specific companies are happy they get to keep their hours, it’s completely unfair that new breweries will be on a different playing field than existing ones. How can you justify limiting one business differently than another business?”
What Maryland has done is a classic example of putting interest in big business over the very homegrown companies that the state legislators are supposed to be representing. Surely, the likes of AB InBev and MillerCoors are watching this situation and looking into ways they can take advantage of similar scenarios.
Full article: https://www.pastemagazine.com/articles/2017/04/maryland-just-screwed-its-craft-brewing-industry-i.html
Warren Grimes: Why Small Firms Thrive in the Beer & Wine Industries
and how government enforcers can help them
A relatively open distribution system can be critical for new entry and entrepreneurial choice. The beer and wine industries provide a compelling example. Both of these industries involve a creative component (and winemakers, like farmers, are often growers). Small craft brewers and winemakers have enjoyed a strong resurgence. Antitrust enforcement, however, may have had little to do with protecting the opportunities of new entrants in these industries. The 21st amendment to the Constitution repealed prohibition and gave each state control over the production and sale of alcoholic beverages. At that time, many states adopted a mandatory three tier system, prohibiting vertical integration of producers, distributors, and retailers. Maintaining independently owned distributors makes it more difficult for powerful producers to lock up distribution.
There may be other advantages to localized wine or beer production that explain the growth and survival of small producers, but the open availability of distribution channels is an important part of this story. While distribution was not open in all states, the three tier system was sufficiently rooted to enable the craft beer resurgence over the past two decades. Oligopolistic firms dominate beer production in the United States. . . . .Despite this concentration, the last few decades have seen a healthy resurgence in small and regional breweries (microbreweries),which now have roughly 14% of the U.S. market by volume.
Unlike farmers or ranchers, microbrewers typically do not grow or raise their own ingredients, but exercise their craft as processors. To have a chance to distribute efficiently, such brewers require access to an effective distribution mechanism, particularly when a brewer hopes to reach a market beyond its home state. Even in states in which dominant brewers cannot own distributors, a dominant brewer may pressure independent distributors to exclude or disfavor smaller rival brewers. In permitting Anheuser Busch InBev’s acquisition of Miller Brewing, the Antitrust Division imposed a divestiture remedy to address horizontal concentration and a conduct remedy designed to protect microbrewers’ access to independent beer distributors. The decree prohibits InBev from engaging in certain loyalty or discount programs that discourage independent beer distributors from doing business with other brewers and requires InBev not to acquire other brewers or distributors without allowing for advance review by the Antitrust Division. The sensitivity the Division showed to distribution issues affecting microbrewers was constructive but insufficient. Whether the conduct remedy will be effective in preventing the large firm’s future exclusionary treatment toward smaller rivals is an open question.
he real lesson from the InBev/Miller acquisition may be a failure in past merger enforcement. Consider an industry in which, instead of a 70% dominance by two firms, there are eight firms that share roughly 80% of the U.S. market. In such an industry, issues of vertical integration are far less troublesome. If one or more of these eight firms decided to acquire its own distributors, there is much less risk that the firm would use its control of a distributor strategically to injure a micro brewer. To the contrary, with a share of 20% or less of the market, the firm is more likely to reach out to other brewers to offer them distribution, in this manner profiting from a greater share in the distribution market. Under these more competitive conditions, the market is more likely to self-regulate, and do so in a more effective manner than through merger conditions imposed on a powerful oligopolist.
The wine industry in the United States also benefits from the independent distribution system that grew out of the 21st Amendment. The largest three wine firms control roughly 46% of the US market, but the industry is relatively unconcentrated, with at least one winery in each of the fifty states and a steady growth in the number of firms (an average increase of 7% per year in the ten years ending in 2012). While large firms dominate the low price market, small and boutique firms have a large presence in the mid and high priced categories. . . . .
Given the problems in maintaining open distribution, the Department would have been justified in prohibiting any further acquisition of a craft brewer for a substantial period of years. Kwoka found conduct remedies were largely ineffective in preventing price increases by the merged firm. While some smaller wine makers sell their wine directly to retailers or end consumers, 90 percent of all wine flows through distributors. The largest 20 distributors have 75% of the market, with several hundred smaller distributors sharing the remainder. Although price competition seems to discipline the low-end market, for mid and high price segments, conditions of monopolistic competition prevail: each distinctive brand enjoys substantial pricing freedom. These conditions complement the availability of independent distributors and make it possible for new entrants to succeed and consumers to choose among an increasing number of local brands. These benefits will continue as long as merger policy (and antitrust enforcement more generally) preserves the availability of independent distribution for small wineries.
The beer and wine industries are examples of creative mid-level processing that can be efficiently performed by individual entrepreneurs or small firms. What is needed is lower thresholds for horizontal concentration among processors. To the extent that these thresholds have already been exceeded, strict rules on vertical integration are required to maintain open entry for small processors.
Full article: http://competitionpolicyinternational.us2.list-manage1.com/track/click?u=66710f1b2f6afb55512135556&id=df80077e3b&e=b23ef9e519
and how government enforcers can help them
A relatively open distribution system can be critical for new entry and entrepreneurial choice. The beer and wine industries provide a compelling example. Both of these industries involve a creative component (and winemakers, like farmers, are often growers). Small craft brewers and winemakers have enjoyed a strong resurgence. Antitrust enforcement, however, may have had little to do with protecting the opportunities of new entrants in these industries. The 21st amendment to the Constitution repealed prohibition and gave each state control over the production and sale of alcoholic beverages. At that time, many states adopted a mandatory three tier system, prohibiting vertical integration of producers, distributors, and retailers. Maintaining independently owned distributors makes it more difficult for powerful producers to lock up distribution.
There may be other advantages to localized wine or beer production that explain the growth and survival of small producers, but the open availability of distribution channels is an important part of this story. While distribution was not open in all states, the three tier system was sufficiently rooted to enable the craft beer resurgence over the past two decades. Oligopolistic firms dominate beer production in the United States. . . . .Despite this concentration, the last few decades have seen a healthy resurgence in small and regional breweries (microbreweries),which now have roughly 14% of the U.S. market by volume.
Unlike farmers or ranchers, microbrewers typically do not grow or raise their own ingredients, but exercise their craft as processors. To have a chance to distribute efficiently, such brewers require access to an effective distribution mechanism, particularly when a brewer hopes to reach a market beyond its home state. Even in states in which dominant brewers cannot own distributors, a dominant brewer may pressure independent distributors to exclude or disfavor smaller rival brewers. In permitting Anheuser Busch InBev’s acquisition of Miller Brewing, the Antitrust Division imposed a divestiture remedy to address horizontal concentration and a conduct remedy designed to protect microbrewers’ access to independent beer distributors. The decree prohibits InBev from engaging in certain loyalty or discount programs that discourage independent beer distributors from doing business with other brewers and requires InBev not to acquire other brewers or distributors without allowing for advance review by the Antitrust Division. The sensitivity the Division showed to distribution issues affecting microbrewers was constructive but insufficient. Whether the conduct remedy will be effective in preventing the large firm’s future exclusionary treatment toward smaller rivals is an open question.
he real lesson from the InBev/Miller acquisition may be a failure in past merger enforcement. Consider an industry in which, instead of a 70% dominance by two firms, there are eight firms that share roughly 80% of the U.S. market. In such an industry, issues of vertical integration are far less troublesome. If one or more of these eight firms decided to acquire its own distributors, there is much less risk that the firm would use its control of a distributor strategically to injure a micro brewer. To the contrary, with a share of 20% or less of the market, the firm is more likely to reach out to other brewers to offer them distribution, in this manner profiting from a greater share in the distribution market. Under these more competitive conditions, the market is more likely to self-regulate, and do so in a more effective manner than through merger conditions imposed on a powerful oligopolist.
The wine industry in the United States also benefits from the independent distribution system that grew out of the 21st Amendment. The largest three wine firms control roughly 46% of the US market, but the industry is relatively unconcentrated, with at least one winery in each of the fifty states and a steady growth in the number of firms (an average increase of 7% per year in the ten years ending in 2012). While large firms dominate the low price market, small and boutique firms have a large presence in the mid and high priced categories. . . . .
Given the problems in maintaining open distribution, the Department would have been justified in prohibiting any further acquisition of a craft brewer for a substantial period of years. Kwoka found conduct remedies were largely ineffective in preventing price increases by the merged firm. While some smaller wine makers sell their wine directly to retailers or end consumers, 90 percent of all wine flows through distributors. The largest 20 distributors have 75% of the market, with several hundred smaller distributors sharing the remainder. Although price competition seems to discipline the low-end market, for mid and high price segments, conditions of monopolistic competition prevail: each distinctive brand enjoys substantial pricing freedom. These conditions complement the availability of independent distributors and make it possible for new entrants to succeed and consumers to choose among an increasing number of local brands. These benefits will continue as long as merger policy (and antitrust enforcement more generally) preserves the availability of independent distribution for small wineries.
The beer and wine industries are examples of creative mid-level processing that can be efficiently performed by individual entrepreneurs or small firms. What is needed is lower thresholds for horizontal concentration among processors. To the extent that these thresholds have already been exceeded, strict rules on vertical integration are required to maintain open entry for small processors.
Full article: http://competitionpolicyinternational.us2.list-manage1.com/track/click?u=66710f1b2f6afb55512135556&id=df80077e3b&e=b23ef9e519
ALGORITHMS, ARTIFICIAL INTELLIGENCE, JOINT CONDUCT, AND PRICE STABILITY
The ability of algorithms and artificial intelligence to monitor and set prices is increasing in sophistication, effectiveness and independence from human involvement at an exponential rate. The growth in this area, which is seen simultaneously across a range of AI applications, is such that no one — even its creators — is likely to fully appreciate AI’s capabilities until sometime after they have been realized.
ricing “bots” are already capable of engaging in behavior that we would not hesitate to call “parallel conduct” if it were performed by humans, and they will only get better at it. Indeed, the day may not be so far off when the pricing bot of one firm is fully capable of colluding — in every meaningful sense — with the pricing bot of a competing firm. At that point, we may have “conspiracy” cases under Section 1 of the Sherman Act that look very much like the cases we have today, except that the parts now played by humans are played by robots.
The few existing antitrust cases involving pricing algorithms have not crossed this Rubicon, or really even approached it. They do not involve joint conduct by bots, in any sense. Instead, these cases involve human beings reaching familiar price-fixing agreements and then implementing them algorithmically. While these cases may create special problems of detection and proof, at least for the moment they do not seem to require any shift in the conceptual apparatus we use to solve antitrust problems. There is reason to think such a shift may be coming, however.
Joint conduct by robots is likely to be different — harder to detect, more effective, more stable and persistent — than traditional joint conduct by humans. For example, one of the basic precepts of the Sherman Act is that “unilateral” conduct by firms in the same market is not unlawful under Section 1, even if the conduct is closely interdependent and predictably yields supracompetitive prices that would be per se unlawful if achieved by agreement. An unspoken premise of this time-honored rule is that such interdependent conduct is likely to be relatively unstable in the absence of an agreement, and therefore, with any luck, the supracompetitive effects generally will be shorter lived and less pernicious than if they were achieved through true joint conduct.
But this premise may have less force in a world of bots, who can interpret and respond to the actions of their competitors with far more precision, agility and consistency than their human counterparts. By simply allowing these bots to go to work, it is easy to imagine an effectively permanent pricing stasis settling over many markets, and not always with procompetitive effects. How will enforcers approach such conduct, much less disrupt or prevent it? What duties should we impose on human beings to ensure their bots behave, and what culpability should they have when their bots go astray? The next ten years will begin to provide the answers, but the technology is already well ahead of the law, and the growing pains are likely to be immense.
Full article: https://www.competitionpolicyinternational.com/wp-content/uploads/2017/05/CPI-Ballard-Naik.pdf
The ability of algorithms and artificial intelligence to monitor and set prices is increasing in sophistication, effectiveness and independence from human involvement at an exponential rate. The growth in this area, which is seen simultaneously across a range of AI applications, is such that no one — even its creators — is likely to fully appreciate AI’s capabilities until sometime after they have been realized.
ricing “bots” are already capable of engaging in behavior that we would not hesitate to call “parallel conduct” if it were performed by humans, and they will only get better at it. Indeed, the day may not be so far off when the pricing bot of one firm is fully capable of colluding — in every meaningful sense — with the pricing bot of a competing firm. At that point, we may have “conspiracy” cases under Section 1 of the Sherman Act that look very much like the cases we have today, except that the parts now played by humans are played by robots.
The few existing antitrust cases involving pricing algorithms have not crossed this Rubicon, or really even approached it. They do not involve joint conduct by bots, in any sense. Instead, these cases involve human beings reaching familiar price-fixing agreements and then implementing them algorithmically. While these cases may create special problems of detection and proof, at least for the moment they do not seem to require any shift in the conceptual apparatus we use to solve antitrust problems. There is reason to think such a shift may be coming, however.
Joint conduct by robots is likely to be different — harder to detect, more effective, more stable and persistent — than traditional joint conduct by humans. For example, one of the basic precepts of the Sherman Act is that “unilateral” conduct by firms in the same market is not unlawful under Section 1, even if the conduct is closely interdependent and predictably yields supracompetitive prices that would be per se unlawful if achieved by agreement. An unspoken premise of this time-honored rule is that such interdependent conduct is likely to be relatively unstable in the absence of an agreement, and therefore, with any luck, the supracompetitive effects generally will be shorter lived and less pernicious than if they were achieved through true joint conduct.
But this premise may have less force in a world of bots, who can interpret and respond to the actions of their competitors with far more precision, agility and consistency than their human counterparts. By simply allowing these bots to go to work, it is easy to imagine an effectively permanent pricing stasis settling over many markets, and not always with procompetitive effects. How will enforcers approach such conduct, much less disrupt or prevent it? What duties should we impose on human beings to ensure their bots behave, and what culpability should they have when their bots go astray? The next ten years will begin to provide the answers, but the technology is already well ahead of the law, and the growing pains are likely to be immense.
Full article: https://www.competitionpolicyinternational.com/wp-content/uploads/2017/05/CPI-Ballard-Naik.pdf
Bloomberg lists 10 best paid executives. NY Times says such executives often meet with President Trump and typically press issues like rollback of financial regulation
Here are the top 3:
1
Marc Lore CEO, U.S. e-commerce, Wal-Mart Stores Inc.
$236,896,191
2
Tim Cook CEO Apple Inc.
$150,036,907
3
John S. Weinberg Executive Chairman, Evercore Partners Inc.
$123,991,055
For the rest of the 10 see https://www.bloomberg.com/graphics/2017-highest-paid-ceos/
The New York Times points out that President Trump has made a
pageantry of meetings with C.E.O.s at the White House or at his Mar-a-Lago resort in Florida, which he has dubbed the southern White House, a priority during his first few months in office. The visits have become an opportunity for the president to trumpet the progress he says his administration is making in creating jobs and reducing regulations.
But Mr. Trump may be getting a one-sided perspective on policy recommendations by spending so much time with a large swath of highly paid executives — at least 307 since Inauguration Day — whose views on taxes and economic inequality tend to differ from those of average Americans.
“If you hang around with executives, you adopt a certain view of the world, and it’s a view of the world that seems to be informing his policies,” said Lawrence Mishel, president of the Economic Policy Institute, a liberal-leaning advocacy group in Washington. “It takes a lot to think cutting corporate taxes is central to tax policy when corporate profits are near historic highs.”
The Times article points out that reducing financial industry regulations are often the subject of conversations between wealthy executives and the President
Full Times article at https://www.nytimes.com/2017/05/26/business/ceo-compensation-pay-president-donald-trump.html?src=me
NYT: Schools generally agree not to sweeten financial incentives to student who have committed to other schools -- although that may be an antitrust law violation
This year, however, scores of teenagers had something unexpected happen: During the first week in May, they received text messages or emails from schools that had accepted them but had not heard back. The messages all hinted at a particular question: Might a larger discount prompt you to come here after all?
Hampshire College, Elizabethtown College, Washington & Jefferson College and Ursinus College, all private liberal arts schools, did this sort of outreach in recent weeks, as did Lawrence University, and perhaps others. For some students, such notes can be a dream come true if they make their first-choice college more affordable.
These invitations raise ethical questions in higher education: Schools are not supposed to dangle discounts in front of people who have committed to other institutions. Liberal arts colleges with flexible discounting policies may be tempted to skirt that line, given that families might worry about the value of their programs in the workplace. But late communications to applicants about financial aid, even without mentioning dollar amounts, can seem like flat-out poaching to the schools that have already admitted those students.
DAR comment: Many antitrust scholars suggest that colleges' agreement not to compete on pricing to students is an antitrust law violation.
Continue reading the Times story
tps://www.nytimes.com/2017/05/24/your-money/when-colleges-dangle-money-to-lure-students-who-ignored-them.html?ref=todayspaper&_r=0
This year, however, scores of teenagers had something unexpected happen: During the first week in May, they received text messages or emails from schools that had accepted them but had not heard back. The messages all hinted at a particular question: Might a larger discount prompt you to come here after all?
Hampshire College, Elizabethtown College, Washington & Jefferson College and Ursinus College, all private liberal arts schools, did this sort of outreach in recent weeks, as did Lawrence University, and perhaps others. For some students, such notes can be a dream come true if they make their first-choice college more affordable.
These invitations raise ethical questions in higher education: Schools are not supposed to dangle discounts in front of people who have committed to other institutions. Liberal arts colleges with flexible discounting policies may be tempted to skirt that line, given that families might worry about the value of their programs in the workplace. But late communications to applicants about financial aid, even without mentioning dollar amounts, can seem like flat-out poaching to the schools that have already admitted those students.
DAR comment: Many antitrust scholars suggest that colleges' agreement not to compete on pricing to students is an antitrust law violation.
Continue reading the Times story
tps://www.nytimes.com/2017/05/24/your-money/when-colleges-dangle-money-to-lure-students-who-ignored-them.html?ref=todayspaper&_r=0
Illinois home sellers sue Zillow for allegedly too-low home value "Zestimates"
The NY Times reports: Barbara Andersen bought a home in Glenview, Ill., in 2009 with a view of a golf course, paying about $630,000. She wants to sell the home for about that amount, but the Zestimate on it is now about $536,000, which she believes is too low and has deterred buyers.
Ms. Andersen, a real estate lawyer, filed a lawsuit [click to see it] against Zillow this year, accusing the company of conducting stealth home appraisals without a state license. In recent days, she has represented several plaintiffs in a similar lawsuit [click to see it] filed in Cook County Circuit Court. (Full article at https://www.nytimes.com/2017/05/24/upshot/angry-over-zillows-home-prices-a-prize-is-offered-for-improving-them.html?ref=business)
Language from the lawsuit: "Upon information and belief, Zillow is not a licensed Illinois appraiser. Further, upon information and belief, Zillow had never appraised Andersen's home. Moreover, Andersen has never requested or authorized Zillow to conduct an appraisal of Andersen's home. . . . Illinois law prohibits the preparation of appraisals without a license: . . ."
“If it’s not reliable, you shouldn’t put it out there,” she said in a phone interview, referring to Zestimates.
The NY Times reports: Barbara Andersen bought a home in Glenview, Ill., in 2009 with a view of a golf course, paying about $630,000. She wants to sell the home for about that amount, but the Zestimate on it is now about $536,000, which she believes is too low and has deterred buyers.
Ms. Andersen, a real estate lawyer, filed a lawsuit [click to see it] against Zillow this year, accusing the company of conducting stealth home appraisals without a state license. In recent days, she has represented several plaintiffs in a similar lawsuit [click to see it] filed in Cook County Circuit Court. (Full article at https://www.nytimes.com/2017/05/24/upshot/angry-over-zillows-home-prices-a-prize-is-offered-for-improving-them.html?ref=business)
Language from the lawsuit: "Upon information and belief, Zillow is not a licensed Illinois appraiser. Further, upon information and belief, Zillow had never appraised Andersen's home. Moreover, Andersen has never requested or authorized Zillow to conduct an appraisal of Andersen's home. . . . Illinois law prohibits the preparation of appraisals without a license: . . ."
“If it’s not reliable, you shouldn’t put it out there,” she said in a phone interview, referring to Zestimates.
From the April Newsletter of SaveMiWater, a local Michigan advocacy group
For a cost of $200 a year Nestle was asking for 210 million gallons of public water, at the same time as Detroit and Flint residents were being shut off for minor bills or charged high rates for poisoned water.
* * *
Since October 31 we have been mounting the campaign to deny this latest permit request. The request was to go from 150 gallons per minute to 400 at one well. In other words, we were right back where we started in the year 2000 when Nestle was drawing down a stream and several lakes in Mecosta County.
We have spent the winter examining the permit and finding its flaws, documenting the damage already done to two cold-water trout streams and the Muskegon River, meeting with residents and the press, and generating a large number of comments. We are also building alliances with other organizations concerned about the privatization of water and the lack of public input in the permitting process.
MCWC has been providing the grassroots, on the ground leadership in this campaign to stop the taking of any more water for private profit and stop the damage to the ecosystem involved.
The legal precedent established during the original battle with Nestle still stands. A withdrawal of 400 gallons per minute is damaging to the ecosystem and cannot be sustained. Nestle may have gone 20 miles down the road from Mecosta to increase their production, but the same rules apply, and the same strong grassroots group is opposing them once more.
None of this resistance would be possible without the active support of our members. Your letters, membership renewals, on the ground presence, donations, have made the work of the organization possible. We have been able to launch the new and up to date website (saveMIwater.org), develop a Rapid Response email list, put out brochures and informational displays, increase our speaking opportunities, engage legal support, fund the work of our committees, hold public events, contribute our share to coalition efforts, and extend our work to save water far beyond the Nestle battle.
http://www.savemiwater.org/wp-content/uploads/2017/04/NewsletterApril-Final-for-web.pdf
For a cost of $200 a year Nestle was asking for 210 million gallons of public water, at the same time as Detroit and Flint residents were being shut off for minor bills or charged high rates for poisoned water.
* * *
Since October 31 we have been mounting the campaign to deny this latest permit request. The request was to go from 150 gallons per minute to 400 at one well. In other words, we were right back where we started in the year 2000 when Nestle was drawing down a stream and several lakes in Mecosta County.
We have spent the winter examining the permit and finding its flaws, documenting the damage already done to two cold-water trout streams and the Muskegon River, meeting with residents and the press, and generating a large number of comments. We are also building alliances with other organizations concerned about the privatization of water and the lack of public input in the permitting process.
MCWC has been providing the grassroots, on the ground leadership in this campaign to stop the taking of any more water for private profit and stop the damage to the ecosystem involved.
The legal precedent established during the original battle with Nestle still stands. A withdrawal of 400 gallons per minute is damaging to the ecosystem and cannot be sustained. Nestle may have gone 20 miles down the road from Mecosta to increase their production, but the same rules apply, and the same strong grassroots group is opposing them once more.
None of this resistance would be possible without the active support of our members. Your letters, membership renewals, on the ground presence, donations, have made the work of the organization possible. We have been able to launch the new and up to date website (saveMIwater.org), develop a Rapid Response email list, put out brochures and informational displays, increase our speaking opportunities, engage legal support, fund the work of our committees, hold public events, contribute our share to coalition efforts, and extend our work to save water far beyond the Nestle battle.
http://www.savemiwater.org/wp-content/uploads/2017/04/NewsletterApril-Final-for-web.pdf
The federal government has filed a lawsuit against Fiat Chrysler Automobiles accusing it of using illegal engine-control software to enable its diesel-powered vehicles to pass emissions tests.
The filing occurred days after Fiat Chrysler proposed a modification to the software to ensure correct test results in hopes of resolving the issue.
In a statement, the automaker said it was disappointed by the action and would defend itself against any claims that its software represents a “deliberate scheme to install defeat devices to cheat U.S. emissions tests.”
The Environmental Protection Agency accused Fiat Chrysler in January of installing the software on about 104,000 Ram pickup trucks and Jeep Grand Cherokee sport utility vehicles sold from 2014 through 2016.
https://www.nytimes.com/2017/05/23/business/fiat-chrysler-diesel-emissions-lawsuit.html
DAR comment: can consumer class actions be far behind, similar to class actions against VW?
The filing occurred days after Fiat Chrysler proposed a modification to the software to ensure correct test results in hopes of resolving the issue.
In a statement, the automaker said it was disappointed by the action and would defend itself against any claims that its software represents a “deliberate scheme to install defeat devices to cheat U.S. emissions tests.”
The Environmental Protection Agency accused Fiat Chrysler in January of installing the software on about 104,000 Ram pickup trucks and Jeep Grand Cherokee sport utility vehicles sold from 2014 through 2016.
https://www.nytimes.com/2017/05/23/business/fiat-chrysler-diesel-emissions-lawsuit.html
DAR comment: can consumer class actions be far behind, similar to class actions against VW?
Is Dodd-Frank’s failure resolution regime failing?
Program scheduled for Tuesday, Jun 06, 2017 9:30 AM-11:00 AM EDT
Brookings Institution
Falk Auditorium
1775 Massachusetts Avenue N.W.
Washington, DC
20036
REGISTER TO ATTEND REGISTER FOR WEBCAST
The recent financial crisis exposed a major gap in the regulatory system: the inability for the government to safely wind down a failing financial firm that was not a commercial bank, such as Lehman Brothers or AIG. The Dodd-Frank law attempted to fix this by empowering regulators with new tools including a new Orderly Liquidation Authority (OLA) under which the Federal Deposit Insurance Corp would liquidate and wind-up a failing institution. Although never used, OLA is controversial. Some Congressional Republicans would do away with it, and the Trump Administration has undertaken its review.
On June 6, Brookings’s Center on Regulation and Markets and Hutchins Center on Fiscal and Monetary Policy will bring together four experts—including former Federal Reserve Chairman Ben Bernanke—with differing views on preserving or modifying OLA.
After the session, panelists will take audience questions.
Join the conversation on Twitter using #DoddFrankOLA
AGENDA
Introduction
Aaron Klein
Fellow - Economic Studies,Center on Regulation and Markets
Policy Director, Center on Regulation and Markets
AaronDKlein
Panel Discussion
MODERATOR
David Wessel
Director - The Hutchins Center on Fiscal and Monetary Policy
Senior Fellow - Economic Studies
davidmwessel
Ben S. Bernanke
Distinguished Fellow in Residence - Economic Studies
BenBernanke
David Skeel
S. Samuel Arsht Professor Corporate Law - University of Pennsylvania Law School
Hester Peirce
Director, Financial Markets Working Group and Senior Research Fellow - Mercatus Center at George Mason University
H. Rodgin Cohen
Senior Chairman - Sullivan & Cromwell LLP
States seek to advocate for low-cost insurance in lawsuit
New York and California attorneys general are leading a 16-state charge to intervene in a lawsuit that would threaten compensation to insurers who provide for poorer people.
New York Attorney General Eric Schneiderman and California Attorney General Xavier Becerra Thursday moved to intervene in the appeal of a lawsuit that challenges cost-sharing reduction payments allowed under the Affordable Care Act.
The payments are made to insurers to offset costs of lower price insurance plans. House Republicans sued the Obama administration in 2014 arguing the payments are illegal because they’re not authorized by Congress. The Obama administration appealed, but the Trump administration has threatened to drop the appeal.
The motion to intervene argues that the states have a concrete interest in continuing the payments to protect low-income residents.
From article at http://www.dailynews.com/health/20170519/states-seek-to-advocate-for-low-cost-insurance-in-lawsuit
New York and California attorneys general are leading a 16-state charge to intervene in a lawsuit that would threaten compensation to insurers who provide for poorer people.
New York Attorney General Eric Schneiderman and California Attorney General Xavier Becerra Thursday moved to intervene in the appeal of a lawsuit that challenges cost-sharing reduction payments allowed under the Affordable Care Act.
The payments are made to insurers to offset costs of lower price insurance plans. House Republicans sued the Obama administration in 2014 arguing the payments are illegal because they’re not authorized by Congress. The Obama administration appealed, but the Trump administration has threatened to drop the appeal.
The motion to intervene argues that the states have a concrete interest in continuing the payments to protect low-income residents.
From article at http://www.dailynews.com/health/20170519/states-seek-to-advocate-for-low-cost-insurance-in-lawsuit
24 hour electricity from rooftop solar panels? New batteries may permit it
Mercedes-Benz is taking a direct shot at Tesla's solar push and battery business.
The luxury carmaker announced on Thursday it would partner with Vivint Solar to sell a smart solar ecosystem to California residents, aiming to challenge Tesla's new solar-roof rollout on its turf.
As part of the partnership, Mercedes will introduce its at-home battery to the US market for the first time, while Vivint will provide solar-panel installation.
From article at http://www.businessinsider.com/mercedes-vivint-partner-on-solar-storage-solution-to-take-on-tesla-2017-5
Mercedes-Benz is taking a direct shot at Tesla's solar push and battery business.
The luxury carmaker announced on Thursday it would partner with Vivint Solar to sell a smart solar ecosystem to California residents, aiming to challenge Tesla's new solar-roof rollout on its turf.
As part of the partnership, Mercedes will introduce its at-home battery to the US market for the first time, while Vivint will provide solar-panel installation.
From article at http://www.businessinsider.com/mercedes-vivint-partner-on-solar-storage-solution-to-take-on-tesla-2017-5
Business gentrification: Upscaling Bethesda downtown loses funky or simply traditional old businesses
As Bethesda evolved into a high-end district of condos, restaurants and boutiques, cherished neighborhood places were swept away — by development, changing tastes or owners deciding it was time.
The 1980s saw the demise of the Psyche Delly, the sandwich-shop-turned-progressive-rock-club, and its countercultural soul mate, WHFS-FM. The Hot Shoppes, home of the double-decked Mighty Mo burger and the Orange Freeze milkshake, and Lowen’s, the toy emporium, closed in the 1990s. The Bethesda location for O’Donnells Seafood Restaurant made it to 2001.
Harry Eaton, who's been coming to the market since the 1950s, shows a picture of himself and his mother at her stand inside of Bethesda Farm Women's Market. (Jason Andrew/For The Washington Post)Now the clock may be running out on three other local institutions: the Tastee Diner, the Bethesda Farm Women’s Marketand Barnes & Noble on Bethesda Row. The issues facing each business are different. One is a landlord-tenant relationship gone sour. The others involve aging owners and the skyrocketing value of their land.
From article: https://www.washingtonpost.com/local/md-politics/the-future-ghosts-of-downtown-bethesda/2017/05/13/aa73db5e-310b-11e7-9dec-764dc781686f_story.html?utm_term=.1567fa5eefc7
As Bethesda evolved into a high-end district of condos, restaurants and boutiques, cherished neighborhood places were swept away — by development, changing tastes or owners deciding it was time.
The 1980s saw the demise of the Psyche Delly, the sandwich-shop-turned-progressive-rock-club, and its countercultural soul mate, WHFS-FM. The Hot Shoppes, home of the double-decked Mighty Mo burger and the Orange Freeze milkshake, and Lowen’s, the toy emporium, closed in the 1990s. The Bethesda location for O’Donnells Seafood Restaurant made it to 2001.
Harry Eaton, who's been coming to the market since the 1950s, shows a picture of himself and his mother at her stand inside of Bethesda Farm Women's Market. (Jason Andrew/For The Washington Post)Now the clock may be running out on three other local institutions: the Tastee Diner, the Bethesda Farm Women’s Marketand Barnes & Noble on Bethesda Row. The issues facing each business are different. One is a landlord-tenant relationship gone sour. The others involve aging owners and the skyrocketing value of their land.
From article: https://www.washingtonpost.com/local/md-politics/the-future-ghosts-of-downtown-bethesda/2017/05/13/aa73db5e-310b-11e7-9dec-764dc781686f_story.html?utm_term=.1567fa5eefc7
MORGAN LEWIS WEBINAR ON AUTOMOTIVE CYBERSECURITY
The multitude of devices and systems in cars creates an array of ever-evolving privacy and cybersecurity issues. Our panel discussion will provide an overview of recent developments and evolving questions pertaining to “connected” and, in some cases, autonomous vehicles.
TOPICS WILL INCLUDE:
Privacy disclosures provided to car owners
and drivers
The current reasonable expectation of privacy
(or lack thereof)
What the various US government bodies’
expectations are regarding access to information stored on a vehicle
What measures the US government and state governments expect companies to take regarding automotive cybersecurity and protection from hacking
WHEN
Tuesday, May 23, 2017
11:00 am–12:00 pm PT
2:00–3:00 pm ET
PRESENTERS
Ronald Del Sesto, Partner
Mark Krotoski, Partner
Daniel Savrin, Partner
Robert Brundage, Of Counsel
Register at https://morganlewis.webex.com/mw3100/mywebex/default.do?nomenu=true&siteurl=morganlewis&service=6&rnd=0.6766680149048838&main_url=https%3A%2F%2Fmorganlewis.webex.com%2Fec3100%2Feventcenter%2Fevent%2FeventAction.do%3FtheAction%3Ddetail%26%26%26EMK%3D4832534b0000000473136c1462e882655caf280646ed9e36d41ee174515852cecd20d0fc3e12a40e%26siteurl%3Dmorganlewis%26confViewID%3D1759874369%26encryptTicket%3DSDJTSwAAAASnozNuAAYpZFP6OnN4cpHdsMVAogj5YUGlD0u2girP-g2%26
EU: Spotify, others complain about data “gatekeepers”
In a letter sent to the European Union’s antitrust body, the chief executives of Spotify, streaming music firm Deezer, startup investor Rocket Internet and other Europe-based companies claim dominant internet platforms” can and do abuse their privileged position,” reports the Financial Times.
The European companies complain some mobile operating systems, app stores and search engines abuse their commanding marketshare to act as “gatekeepers” to consumer choice, thus impeding segment rivals attempting to market products that compete with first-party services, the letter says.
While not named in the letter, Apple and Google are clearly targets of the complaint. Together, Apple’s iOS and Google’s Android control more than 90 percent of the mobile operating system market and maintain a set of terms and conditions that third-party apps must follow in order to market their wares on the respective app stores.
In particular, internet companies argue they are not able to access analytics data when customers sign up for service through app store portals. Further, app store owners allegedly promote their own products ahead of third-party offerings. For example, Apple often publishes App Store banners advertising Apple Music, a competitor to Spotify and Deezer.
Full Content: Apple Insider
In a letter sent to the European Union’s antitrust body, the chief executives of Spotify, streaming music firm Deezer, startup investor Rocket Internet and other Europe-based companies claim dominant internet platforms” can and do abuse their privileged position,” reports the Financial Times.
The European companies complain some mobile operating systems, app stores and search engines abuse their commanding marketshare to act as “gatekeepers” to consumer choice, thus impeding segment rivals attempting to market products that compete with first-party services, the letter says.
While not named in the letter, Apple and Google are clearly targets of the complaint. Together, Apple’s iOS and Google’s Android control more than 90 percent of the mobile operating system market and maintain a set of terms and conditions that third-party apps must follow in order to market their wares on the respective app stores.
In particular, internet companies argue they are not able to access analytics data when customers sign up for service through app store portals. Further, app store owners allegedly promote their own products ahead of third-party offerings. For example, Apple often publishes App Store banners advertising Apple Music, a competitor to Spotify and Deezer.
Full Content: Apple Insider
From Congressman Cummings letter to Vision on "rent to own" financing practices
Dear Mr. Szkaradek:
I write today to seek details about the properties offered through rent-to-own and other seller-financed transactions by Vision Property Management and its subsidiaries.
According to Vision's website, your company targets "individualsand families that may not currently qualify for conventional property purchases due to various employment, health, divorce or other financial reasons" for "Lease-to-Own prope11y opp011unities." 1
Recent media reports have detailed financial and physical harms that your business model - which reportedly is structured to churn unsuspecting tenants through ever-deepening money pits- has inflicted on families with limited means.
According to a New York Times article, Vision' s rent-to-own contracts place substantial risks on tenants that traditional property rental or sales contracts do not. Vision offers each home on an "as is" basis. Under these contracts, Vision may not disclose the extensive repairs a prope11yneeds but will " require a tenant to pay for any repairs, no matter how big." If tenants fail to make the required repairs within a few months, they may be evicted-forfeiting all expenditures they have already made on the home.
https://democrats-oversight.house.gov/sites/democrats.oversight.house.gov/files/documents/2017-01-18.EEC%20to%20Vision%20Property%20Management.pdf
Dear Mr. Szkaradek:
I write today to seek details about the properties offered through rent-to-own and other seller-financed transactions by Vision Property Management and its subsidiaries.
According to Vision's website, your company targets "individualsand families that may not currently qualify for conventional property purchases due to various employment, health, divorce or other financial reasons" for "Lease-to-Own prope11y opp011unities." 1
Recent media reports have detailed financial and physical harms that your business model - which reportedly is structured to churn unsuspecting tenants through ever-deepening money pits- has inflicted on families with limited means.
According to a New York Times article, Vision' s rent-to-own contracts place substantial risks on tenants that traditional property rental or sales contracts do not. Vision offers each home on an "as is" basis. Under these contracts, Vision may not disclose the extensive repairs a prope11yneeds but will " require a tenant to pay for any repairs, no matter how big." If tenants fail to make the required repairs within a few months, they may be evicted-forfeiting all expenditures they have already made on the home.
https://democrats-oversight.house.gov/sites/democrats.oversight.house.gov/files/documents/2017-01-18.EEC%20to%20Vision%20Property%20Management.pdf
"Money in Politics: Prospects for Reform in the District of Columbia"
presented by The Ward 3 Democratic Committee
& UDC David A. Clarke School of Law
A panel discussion on current campaign reform efforts before the DC Council featuring
D.C. Attorney General Karl Racine
At-Large Councilmember Elissa Silverman
Darrin Sobin, Director, Board of Ethics & Government Accountability (BEGA)
Thursday, May 18 at 7pm
UDC David A. Clarke School of Law Moot Courtroom
4340 Connecticut Ave NW (5th Floor)
Free & open to the public. Registration requested HERE
presented by The Ward 3 Democratic Committee
& UDC David A. Clarke School of Law
A panel discussion on current campaign reform efforts before the DC Council featuring
D.C. Attorney General Karl Racine
At-Large Councilmember Elissa Silverman
Darrin Sobin, Director, Board of Ethics & Government Accountability (BEGA)
Thursday, May 18 at 7pm
UDC David A. Clarke School of Law Moot Courtroom
4340 Connecticut Ave NW (5th Floor)
Free & open to the public. Registration requested HERE
You know about Trump and Comey, but do you know about the 2009 case of Lau v. U.S. Postal Service?
From a posting by the law firm of Eric L. Pines, LLC, whose practice specializes in defending against pretextual firings of federal employees:
In Lau v. U.S. Postal Service, two disabled Flat Sorter Machine Clerks had their hours reduced from eight hours a week to six, but their non-disabled coworkers did not. The Postal Service claimed their hours were reduced because of low mail volume.
Here’s how they succeeded in showing the Postal Service’s explanation was just a pretext and won their case:
First, the employees were not given the “low mail volume” reason for their reduced work hours until five months after their hours were reduced. Even worse, the agency only gave the low mail volume explanation in the context of a formal mediation, showing a lack of credibility. Waiting five months to give an explanation is suspicious, and waiting until the employees are far enough into the complaint process that they and the agency are in a formal mediation is even more suspicious.
See http://www.pinesfederal.com/blog/2017/february/pretext-part-2-shifting-explanations-and-unbelie/
Posted by Don Allen Resnikoff
From a posting by the law firm of Eric L. Pines, LLC, whose practice specializes in defending against pretextual firings of federal employees:
In Lau v. U.S. Postal Service, two disabled Flat Sorter Machine Clerks had their hours reduced from eight hours a week to six, but their non-disabled coworkers did not. The Postal Service claimed their hours were reduced because of low mail volume.
Here’s how they succeeded in showing the Postal Service’s explanation was just a pretext and won their case:
First, the employees were not given the “low mail volume” reason for their reduced work hours until five months after their hours were reduced. Even worse, the agency only gave the low mail volume explanation in the context of a formal mediation, showing a lack of credibility. Waiting five months to give an explanation is suspicious, and waiting until the employees are far enough into the complaint process that they and the agency are in a formal mediation is even more suspicious.
See http://www.pinesfederal.com/blog/2017/february/pretext-part-2-shifting-explanations-and-unbelie/
Posted by Don Allen Resnikoff
Digital Music News on the effects of music industry deregulation:
Under Trump, the chances of a deregulation of decades-old publishing rules and consent decrees has never had a better chance of happening.
Which also means that every publisher, big and small, is going to start behaving like major (and indie) labels once all the regulations are lifted. Suddenly, the publishers will have to ability to withhold their IP (songs and lyrics) and effectively shut down platforms like Spotify until they get their outrageous (and unrealistic) terms.
But even if they don’t pull massive amounts of catalog, they will effectively impose unworkable licensing costs on services like Spotify. And that means that Spotify will have an even harder time convincing Wall Street and investors that these businesses can scale.
And that goes for Pandora and SoundCloud as well, both extremely over-leveraged long-terms plays that rely on licensing (and investors to cover the losses). Because right now, these companies can’t properly scale, thanks to variable and extremely high recording licensing demands. Layer in variable and extremely high publishing demands, and the goose is cooked.
Sure, it’s not fair to publishers. History screwed you guys, sorry. The labels always had the free market on their side. The music industry doesn’t need an expensive, complicated Washington babysitter anymore.
But doing what’s right means destroying the music industry’s ‘comeback’ of the past few years. And destroying a pie that’s just starting to grow again.
http://www.digitalmusicnews.com/2017/05/09/deregulation-destroy-spotify-music-industry/
Under Trump, the chances of a deregulation of decades-old publishing rules and consent decrees has never had a better chance of happening.
Which also means that every publisher, big and small, is going to start behaving like major (and indie) labels once all the regulations are lifted. Suddenly, the publishers will have to ability to withhold their IP (songs and lyrics) and effectively shut down platforms like Spotify until they get their outrageous (and unrealistic) terms.
But even if they don’t pull massive amounts of catalog, they will effectively impose unworkable licensing costs on services like Spotify. And that means that Spotify will have an even harder time convincing Wall Street and investors that these businesses can scale.
And that goes for Pandora and SoundCloud as well, both extremely over-leveraged long-terms plays that rely on licensing (and investors to cover the losses). Because right now, these companies can’t properly scale, thanks to variable and extremely high recording licensing demands. Layer in variable and extremely high publishing demands, and the goose is cooked.
Sure, it’s not fair to publishers. History screwed you guys, sorry. The labels always had the free market on their side. The music industry doesn’t need an expensive, complicated Washington babysitter anymore.
But doing what’s right means destroying the music industry’s ‘comeback’ of the past few years. And destroying a pie that’s just starting to grow again.
http://www.digitalmusicnews.com/2017/05/09/deregulation-destroy-spotify-music-industry/
Customer dissatisfaction with Spirit Air scheduling problems leads to airport terminal riots
Article and Video: http://www.cbsnews.com/news/passengers-rowdy-florida-airport-9-spirit-airlines-flights-canceled/
Article and Video: http://www.cbsnews.com/news/passengers-rowdy-florida-airport-9-spirit-airlines-flights-canceled/
Washington Post: Sinclair Broadcast Group, the family-controlled TV station company headquartered outside Baltimore, wants to go from big to gigantic. The DC experience shows what that can mean
With its $3.9 billion bid for Tribune Media on Monday, Sinclair aims to add dozens of big-city stations — in Chicago, Los Angeles and Dallas, among other cities — to an already bulging portfolio that includes 173 mostly small-city stations.
What to expect when, or if, Sinclair finally swallows Tribune?
Sinclair showed what might happen the last time it took over a station in a large metropolitan area — WJLA, the ABC affiliate in Washington. In 2014, Sinclair completed its $985 million purchase of eight stations owned by Allbritton Communications, including WJLA-TV, which is now the largest Sinclair owns.
Sinclair has effectively remade WJLA in its own image, which is to say it continues to cover local and national news but with a distinctively conservative flavor.
Sinclair has been criticized for using its many stations to push Republican presidential candidates since at least 2004 when it announced it would air a documentary critical of Democratic candidate John F. Kerry but backed down amid pressure. It drew criticism from Democrats on the eve of the 2012 election when its stations in several battleground states aired a half-hour news “special” that faulted President Obama for his handling of the economy, his signature health-care law and the terrorist attack on a U.S. installation in Benghazi, Libya.
www.washingtonpost.com/lifestyle/style/heres-what-happened-the-last-time-sinclair-bought-a-big-city-station/2017/05/08/92433126-33f7-11e7-b4ee-434b6d506b37_story.html?utm_term=.2db864624325
With its $3.9 billion bid for Tribune Media on Monday, Sinclair aims to add dozens of big-city stations — in Chicago, Los Angeles and Dallas, among other cities — to an already bulging portfolio that includes 173 mostly small-city stations.
What to expect when, or if, Sinclair finally swallows Tribune?
Sinclair showed what might happen the last time it took over a station in a large metropolitan area — WJLA, the ABC affiliate in Washington. In 2014, Sinclair completed its $985 million purchase of eight stations owned by Allbritton Communications, including WJLA-TV, which is now the largest Sinclair owns.
Sinclair has effectively remade WJLA in its own image, which is to say it continues to cover local and national news but with a distinctively conservative flavor.
Sinclair has been criticized for using its many stations to push Republican presidential candidates since at least 2004 when it announced it would air a documentary critical of Democratic candidate John F. Kerry but backed down amid pressure. It drew criticism from Democrats on the eve of the 2012 election when its stations in several battleground states aired a half-hour news “special” that faulted President Obama for his handling of the economy, his signature health-care law and the terrorist attack on a U.S. installation in Benghazi, Libya.
www.washingtonpost.com/lifestyle/style/heres-what-happened-the-last-time-sinclair-bought-a-big-city-station/2017/05/08/92433126-33f7-11e7-b4ee-434b6d506b37_story.html?utm_term=.2db864624325
The International Refugee Assistance Project (IRAP)
IRAP advertises that it "organizes law students and lawyers to develop and enforce a set of legal and human rights for refugees and displaced persons. Mobilizing direct legal aid and systemic policy advocacy, IRAP serves the world’s most persecuted individuals and empowers the next generation of human rights leaders.The International Refugee Assistance Project (IRAP) organizes law students and lawyers to develop and enforce a set of legal and human rights for refugees and displaced persons. Mobilizing direct legal aid and systemic policy advocacy, IRAP serves the world’s most persecuted individuals and empowers the next generation of human rights leaders."
A profile of the group and its leader is at https://www.nytimes.com/2017/05/07/us/travel-ban-lawyer.html?ref=business
IRAP advertises that it "organizes law students and lawyers to develop and enforce a set of legal and human rights for refugees and displaced persons. Mobilizing direct legal aid and systemic policy advocacy, IRAP serves the world’s most persecuted individuals and empowers the next generation of human rights leaders.The International Refugee Assistance Project (IRAP) organizes law students and lawyers to develop and enforce a set of legal and human rights for refugees and displaced persons. Mobilizing direct legal aid and systemic policy advocacy, IRAP serves the world’s most persecuted individuals and empowers the next generation of human rights leaders."
A profile of the group and its leader is at https://www.nytimes.com/2017/05/07/us/travel-ban-lawyer.html?ref=business
The Campbell v Chadbourne law firm gender discrimination case
The complaint alleges, in part:
Plaintiff Kerrie Campbell, by her attorneys Sanford Heisler, LLP, brings this action in her individual capacity and on behalf of a class of current and former female Partners (“the Class”) of Chadbourne & Parke LLP (“Chadbourne,” “the Firm” or “Defendant”) to redress the Firm’s systematic gender discrimination.
The case is the subject of continuing media attention. The Complaint is here: http hr.cch.com/ELD/CampbellComplaint.pdf
The complaint alleges, in part:
Plaintiff Kerrie Campbell, by her attorneys Sanford Heisler, LLP, brings this action in her individual capacity and on behalf of a class of current and former female Partners (“the Class”) of Chadbourne & Parke LLP (“Chadbourne,” “the Firm” or “Defendant”) to redress the Firm’s systematic gender discrimination.
The case is the subject of continuing media attention. The Complaint is here: http hr.cch.com/ELD/CampbellComplaint.pdf
Fate of Purple Line light rail in Maryland suburbs of DC remains iffy
Construction has been delayed on the light rail since August when U.S. District Judge Richard Leon ruled in favor of Purple Line opponents and ordered the project be put on hold so the state could recalculate ridership projections in light of Metro's falling numbers. In December, the Federal Transit Administration told Leon the line would have sufficient ridership despite Metro's woes, which Maryland officials argued should be enough for him to allow the project to proceed. The federal budget deal reached this week included the necessary $125M annual Purple Line payment, contingent on the full $900M funding agreement being signed by September, which would need Leon's go-ahead to occur.
Maryland Attorney General Brian Frosh had asked Leon to rule by April 28, saying the delay was costing taxpayers money, but Leon has yet to make a ruling. Montgomery County Executive Ike Leggett and Prince George's County Executive Rushern Baker held a rally Tuesday calling on Leon to issue a ruling. The rail had been expected to open in 2022, but as of now its fate remains uncertain
Read more at: https://www.bisnow.com/washington-dc/news/neighborhood/carr-jbg-developments-at-future-bethesda-purple-line-terminus-moving-forward-despite-rail-delay-74116?rt=41064?utm_source=CopyShare&utm_medium=Browser
Construction has been delayed on the light rail since August when U.S. District Judge Richard Leon ruled in favor of Purple Line opponents and ordered the project be put on hold so the state could recalculate ridership projections in light of Metro's falling numbers. In December, the Federal Transit Administration told Leon the line would have sufficient ridership despite Metro's woes, which Maryland officials argued should be enough for him to allow the project to proceed. The federal budget deal reached this week included the necessary $125M annual Purple Line payment, contingent on the full $900M funding agreement being signed by September, which would need Leon's go-ahead to occur.
Maryland Attorney General Brian Frosh had asked Leon to rule by April 28, saying the delay was costing taxpayers money, but Leon has yet to make a ruling. Montgomery County Executive Ike Leggett and Prince George's County Executive Rushern Baker held a rally Tuesday calling on Leon to issue a ruling. The rail had been expected to open in 2022, but as of now its fate remains uncertain
Read more at: https://www.bisnow.com/washington-dc/news/neighborhood/carr-jbg-developments-at-future-bethesda-purple-line-terminus-moving-forward-despite-rail-delay-74116?rt=41064?utm_source=CopyShare&utm_medium=Browser
Direct-from-China retail purchases and the threat to Walmart and other US retailers
https://www.nytimes.com/2017/05/03/magazine/the-online-marketplace-thats-a-portal-to-the-future-of-capitalism.html?ref=business
https://www.nytimes.com/2017/05/03/magazine/the-online-marketplace-thats-a-portal-to-the-future-of-capitalism.html?ref=business
Brookings podcast on the House passage of the AHCA and the future of health care:
https://www.brookings.edu/podcast-episode/on-the-ahca-vote-and-the-future-of-american-health-care/?utm_campaign=Brookings%20Brief&utm_source=hs_email&utm_medium=email&utm_content=51558722
https://www.brookings.edu/podcast-episode/on-the-ahca-vote-and-the-future-of-american-health-care/?utm_campaign=Brookings%20Brief&utm_source=hs_email&utm_medium=email&utm_content=51558722
NACA on legislation affected the CFPB:
The Financial CHOICE Act-aims to undermine CFPB's authority in significant ways, including by eliminating the bureau's ability to stop forced arbitration.
NACA wrote a letter in strong opposition to this bill: www.consumeradvocates.org/resources/legislative-issue/...
An advocacy piece in opposition is at www.consumeradvocates.org/advocacy/take-action/...
A shorter write-up featuring 11 issues with the bill is at medium.com/@NACAdvocate/...
The Financial CHOICE Act-aims to undermine CFPB's authority in significant ways, including by eliminating the bureau's ability to stop forced arbitration.
NACA wrote a letter in strong opposition to this bill: www.consumeradvocates.org/resources/legislative-issue/...
An advocacy piece in opposition is at www.consumeradvocates.org/advocacy/take-action/...
A shorter write-up featuring 11 issues with the bill is at medium.com/@NACAdvocate/...
The Economist on algorithmic tacit collusion
Free exchange Price-bots can collude against consumers:
Trustbusters might have to fight algorithms with algorithms
MARTHA’S VINEYARD, an island off the coast of Massachusetts, is a favourite summer retreat for well-to-do Americans. A few years ago, visitors noticed that petrol prices were considerably higher than in nearby Cape Cod. Even those with deep pockets hate to be ripped off. A price-fixing suit was brought against four of the island’s petrol stations. The judges found no evidence of a conspiracy to raise prices, but they did note that the market was conducive to “tacit collusion” between retailers. In such circumstances, rival firms tend to come to an implicit understanding that boosts profits at the expense of consumers.
No one went to jail. Whereas explicit collusion over prices is illegal, tacit collusion is not—though trustbusters attempt to forestall it by, for instance, blocking mergers that leave markets at the mercy of a handful of suppliers. But what if the conditions that foster such tacit collusion were to become widespread? A recent book* by Ariel Ezrachi and Maurice Stucke, two experts on competition policy, argues this is all too likely. As more and more purchases are made online, sellers rely increasingly on sophisticated algorithms to set prices. And algorithmic pricing, they argue, is a recipe for tacit collusion of the kind found on Martha’s Vineyard.
Consider the conditions that allow for tacit collusion. First, the market is concentrated and hard for others to enter. The petrol stations on the Vineyard were cut off from the mainland. Second, prices are transparent in a way that renders any attempt to steal business by lowering prices self-defeating. A price cut posted outside one petrol station will soon be matched by the others. And if one station raises prices, it can always cut them again if the others do not follow. Third, the product is a small-ticket and frequent purchase, such as petrol. Markets for such items are especially prone to tacit collusion, because the potential profits from “cheating” on an unspoken deal, before others can respond, are small.
Now imagine what happens when prices are set by computer software. In principle, the launch of, say, a smartphone app that compares prices at petrol stations ought to be a boon to consumers. It saves them the bother of driving around for the best price. But such an app also makes it easy for retailers to monitor and match each others’ prices. Any one retailer would have little incentive to cut prices, since robo-sellers would respond at once to ensure that any advantage is fleeting. The rapid reaction afforded by algorithmic pricing means sellers can co-ordinate price rises more quickly. Price-bots can test the market, going over many rounds of price changes, without any one supplier being at risk of losing customers. Companies might need only seconds, and not days, to settle on a higher price, note Messrs Ezrachi and Stucke.
Their concerns have empirical backing. In a new paper**, the authors outline three case studies where well-intentioned efforts to help consumers compare prices backfired. In one such instance, the profit margins of petrol stations in Chile rose by 10% following the introduction of a regulation that required pump prices to be displayed promptly on a government website. This case underlines how mindful trustbusters must be about unintended consequences. The legal headache for them in such cases is establishing sinister intent. An algorithm set up to mimic the prices of rival price-bots is carrying out a strategy that any firm might reasonably follow if it wants to survive in a fast-moving market. Online sellers’ growing use of self-teaching algorithms powered by artificial intelligence makes it even harder for trustbusters to point the finger. A cabal of AI-enhanced price-bots might plausibly hatch a method of colluding that even their handlers could not understand, let alone be held fully responsible for.
Since legal challenges are tricky, argue Messrs Ezrachi and Stucke, it might be better to direct efforts at finding ways to subvert collusion. Trustbusters could start by testing price-bots in a “collusion incubator” to see how market conditions might be tweaked to make a price-fixing deal less likely or less stable. A “maverick” firm, with different incentives to the incumbents, might have a lasting impact; an algorithm programmed to build market share, for instance, might help break an informal cartel.
Regulators might also explore whether bots that are forced to deal directly with consumers—say, through an app that sends an automatic request to retailers when a petrol tank needs filling—could be enticed to undercut rivals. Or they might test to see if imposing speed limits on responses to changes in rivals’ prices hampers collusion. It may be that batching purchases into bulky orders might thwart a collusive pay-off by making it more profitable for robo-sellers to undercut rivals.
Never knowingly undersold
The way online markets work calls for new tools and unfamiliar tactics. But remedies have to be carefully tested and calibrated—a fix for one blem might give rise to new ones. For instance, the more consumers are pushed to deal directly with price-bots (to thwart the transparency that allows rival sellers to collude), the more the algorithms will learn about the characteristics of individual customers. That opens the door to prices tailored to each customer’s willingness to pay, a profitable strategy for sellers.
Still, there is one old-school policy to lean on: merger control. There is growing evidence in old-economy America that trustbusters have been lax in blocking tie-ups between firms. A market with many and diverse competitors, human or algorithmic, is less likely to reach an effortless, cosy consensus about what is the “right” price for sellers, and the wrong price for consumers.
* “Virtual Competition: the Promise and Perils of the Algorithm-driven Economy”, Harvard University Press (2016)
** “Two Artificial Neural Networks Meet in an Online Hub and Change the Future (of Competition, Market Dynamics and Society)” (April 2017)
This article appeared in the Finance and economics section of the print edition under the headline "Algorithms and antitrust" — http://www.economist.com/news/finance-and-economics/21721648-trustbusters-might-have-fight-algorithms-algorithms-price-bots-can-collude
Free exchange Price-bots can collude against consumers:
Trustbusters might have to fight algorithms with algorithms
MARTHA’S VINEYARD, an island off the coast of Massachusetts, is a favourite summer retreat for well-to-do Americans. A few years ago, visitors noticed that petrol prices were considerably higher than in nearby Cape Cod. Even those with deep pockets hate to be ripped off. A price-fixing suit was brought against four of the island’s petrol stations. The judges found no evidence of a conspiracy to raise prices, but they did note that the market was conducive to “tacit collusion” between retailers. In such circumstances, rival firms tend to come to an implicit understanding that boosts profits at the expense of consumers.
No one went to jail. Whereas explicit collusion over prices is illegal, tacit collusion is not—though trustbusters attempt to forestall it by, for instance, blocking mergers that leave markets at the mercy of a handful of suppliers. But what if the conditions that foster such tacit collusion were to become widespread? A recent book* by Ariel Ezrachi and Maurice Stucke, two experts on competition policy, argues this is all too likely. As more and more purchases are made online, sellers rely increasingly on sophisticated algorithms to set prices. And algorithmic pricing, they argue, is a recipe for tacit collusion of the kind found on Martha’s Vineyard.
Consider the conditions that allow for tacit collusion. First, the market is concentrated and hard for others to enter. The petrol stations on the Vineyard were cut off from the mainland. Second, prices are transparent in a way that renders any attempt to steal business by lowering prices self-defeating. A price cut posted outside one petrol station will soon be matched by the others. And if one station raises prices, it can always cut them again if the others do not follow. Third, the product is a small-ticket and frequent purchase, such as petrol. Markets for such items are especially prone to tacit collusion, because the potential profits from “cheating” on an unspoken deal, before others can respond, are small.
Now imagine what happens when prices are set by computer software. In principle, the launch of, say, a smartphone app that compares prices at petrol stations ought to be a boon to consumers. It saves them the bother of driving around for the best price. But such an app also makes it easy for retailers to monitor and match each others’ prices. Any one retailer would have little incentive to cut prices, since robo-sellers would respond at once to ensure that any advantage is fleeting. The rapid reaction afforded by algorithmic pricing means sellers can co-ordinate price rises more quickly. Price-bots can test the market, going over many rounds of price changes, without any one supplier being at risk of losing customers. Companies might need only seconds, and not days, to settle on a higher price, note Messrs Ezrachi and Stucke.
Their concerns have empirical backing. In a new paper**, the authors outline three case studies where well-intentioned efforts to help consumers compare prices backfired. In one such instance, the profit margins of petrol stations in Chile rose by 10% following the introduction of a regulation that required pump prices to be displayed promptly on a government website. This case underlines how mindful trustbusters must be about unintended consequences. The legal headache for them in such cases is establishing sinister intent. An algorithm set up to mimic the prices of rival price-bots is carrying out a strategy that any firm might reasonably follow if it wants to survive in a fast-moving market. Online sellers’ growing use of self-teaching algorithms powered by artificial intelligence makes it even harder for trustbusters to point the finger. A cabal of AI-enhanced price-bots might plausibly hatch a method of colluding that even their handlers could not understand, let alone be held fully responsible for.
Since legal challenges are tricky, argue Messrs Ezrachi and Stucke, it might be better to direct efforts at finding ways to subvert collusion. Trustbusters could start by testing price-bots in a “collusion incubator” to see how market conditions might be tweaked to make a price-fixing deal less likely or less stable. A “maverick” firm, with different incentives to the incumbents, might have a lasting impact; an algorithm programmed to build market share, for instance, might help break an informal cartel.
Regulators might also explore whether bots that are forced to deal directly with consumers—say, through an app that sends an automatic request to retailers when a petrol tank needs filling—could be enticed to undercut rivals. Or they might test to see if imposing speed limits on responses to changes in rivals’ prices hampers collusion. It may be that batching purchases into bulky orders might thwart a collusive pay-off by making it more profitable for robo-sellers to undercut rivals.
Never knowingly undersold
The way online markets work calls for new tools and unfamiliar tactics. But remedies have to be carefully tested and calibrated—a fix for one blem might give rise to new ones. For instance, the more consumers are pushed to deal directly with price-bots (to thwart the transparency that allows rival sellers to collude), the more the algorithms will learn about the characteristics of individual customers. That opens the door to prices tailored to each customer’s willingness to pay, a profitable strategy for sellers.
Still, there is one old-school policy to lean on: merger control. There is growing evidence in old-economy America that trustbusters have been lax in blocking tie-ups between firms. A market with many and diverse competitors, human or algorithmic, is less likely to reach an effortless, cosy consensus about what is the “right” price for sellers, and the wrong price for consumers.
* “Virtual Competition: the Promise and Perils of the Algorithm-driven Economy”, Harvard University Press (2016)
** “Two Artificial Neural Networks Meet in an Online Hub and Change the Future (of Competition, Market Dynamics and Society)” (April 2017)
This article appeared in the Finance and economics section of the print edition under the headline "Algorithms and antitrust" — http://www.economist.com/news/finance-and-economics/21721648-trustbusters-might-have-fight-algorithms-algorithms-price-bots-can-collude
Top 10 highlights in new AHCA bill
By Modern Healthcare
May 4, 2017
The bill eliminates provisions of the Affordable Care Act. The nonpartisan Congressional Budget Office estimates that the legislation will result in 24 million people losing their health insurance by 2026.
Here are key elements of the bill:
http://www.modernhealthcare.com/article/20170504/NEWS/170509949?utm_source=modernhealthcare&utm_medium=email&utm_content=20170504-NEWS-170509949&utm_campaign=am
By Modern Healthcare
May 4, 2017
The bill eliminates provisions of the Affordable Care Act. The nonpartisan Congressional Budget Office estimates that the legislation will result in 24 million people losing their health insurance by 2026.
Here are key elements of the bill:
- Ends the tax penalty against people without coverage.
- Ends the Medicaid expansion funding.
- Changes Medicaid from an open-ended program to one that gives states fixed amounts of money per person.
- Replaces the ACA's cost sharing subsidies based mostly on consumers' incomes and premium costs with tax credits that grow with age.
- Repeals taxes on the wealthy, insurers, drug and medical device makers.
- Consumers who let their coverage lapse for more than 63 days in a year would be charged 30% surcharges to regain insurance. This would include people with pre-existing medical conditions.
- State waivers would allow insurers to charge older customers higher premiums by as much as they'd like.
- States get $8 billion over five years to finance high-risk pools that cover those with pre-existing conditions.
- States get $130 billion over a decade to help people afford coverage.
- Keeps ACA provision that children can remain on their parents' insurance plans until age 26.
http://www.modernhealthcare.com/article/20170504/NEWS/170509949?utm_source=modernhealthcare&utm_medium=email&utm_content=20170504-NEWS-170509949&utm_campaign=am
FROM PUBLIC CITIZEN: Should the Financial Choice Act (Concerning the CFPB) be Called the Accountability to Lobbyists Act?
by Jeff Sovern
During hearings on the CFPB and the Choice Act, I kept hearing critics of the CFPB saying they want to increase its accountability (I haven't started listening to the markups yet, but it's probably a recurring theme there too).
In fact, the CFPB is accountable. But assume it isn't for the moment. CFPB critics argue that one way it should be made more accountable is by subjecting it to the congressional appropriations process. While that sounds good in theory, the problem is that the voices of lobbyists are much louder at appropriations committee proceedings than the voices of consumers. Corporate lobbyists have the resources to pay attention to the inside baseball of appropriations while ordinary consumers busy making a living and providing for their families don't.
The result of such "accountability" in the past has been that lobbyists urge members of Congress to starve regulators of funds if the regulators don't play ball with the lobbyists--and that in turn leads to regulatory capture. That is exactly what happened with Fannie and Freddie's former regulator, which was a disaster. Critics of the Choice Act have been calling it the Wrong Choice Act, but they could also call it the Accountability to Lobbyists Act, because that's what it would create.
Posted by Jeff Sovern on Wednesday, May 03, 2017 at 02:07 PM in Consumer Financial Protection Bureau, Consumer Legislative Policy
by Jeff Sovern
During hearings on the CFPB and the Choice Act, I kept hearing critics of the CFPB saying they want to increase its accountability (I haven't started listening to the markups yet, but it's probably a recurring theme there too).
In fact, the CFPB is accountable. But assume it isn't for the moment. CFPB critics argue that one way it should be made more accountable is by subjecting it to the congressional appropriations process. While that sounds good in theory, the problem is that the voices of lobbyists are much louder at appropriations committee proceedings than the voices of consumers. Corporate lobbyists have the resources to pay attention to the inside baseball of appropriations while ordinary consumers busy making a living and providing for their families don't.
The result of such "accountability" in the past has been that lobbyists urge members of Congress to starve regulators of funds if the regulators don't play ball with the lobbyists--and that in turn leads to regulatory capture. That is exactly what happened with Fannie and Freddie's former regulator, which was a disaster. Critics of the Choice Act have been calling it the Wrong Choice Act, but they could also call it the Accountability to Lobbyists Act, because that's what it would create.
Posted by Jeff Sovern on Wednesday, May 03, 2017 at 02:07 PM in Consumer Financial Protection Bureau, Consumer Legislative Policy
EXPLOITATION AND ABUSE AT AN OHIO CHICKEN PLANT--Case Farms built its business by recruiting immigrant workers from Guatemala, who endure conditions few Americans would put up with.
By Michael Grabell (New Yorker Magazine)
Excerpt:
Case Farms plants are among the most dangerous workplaces in America. In 2015 alone, federal workplace-safety inspectors fined the company nearly two million dollars, and in the past seven years it has been cited for two hundred and forty violations. That’s more than any other company in the poultry industry except Tyson Foods, which has more than thirty times as many employees. David Michaels, the former head of the Occupational Safety and Health Administration (osha), called Case Farms “an outrageously dangerous place to work.” Four years before Osiel lost his leg, Michaels’s inspectors had seen Case Farms employees standing on top of machines to sanitize them and warned the company that someone would get hurt. Just a week before Osiel’s accident, an inspector noted in a report that Case Farms had repeatedly taken advantage of loopholes in the law and given the agency false information. “The company has a twenty-five-year track record of failing to comply with federal workplace-safety standards,” Michaels said.
Case Farms has built its business by recruiting some of the world’s most vulnerable immigrants, who endure harsh and at times illegal conditions that few Americans would put up with. When these workers have fought for higher pay and better conditions, the company has used their immigration status to get rid of vocal workers, avoid paying for injuries, and quash dissent. Thirty years ago, Congress passed an immigration law mandating fines and even jail time for employers who hire unauthorized workers, but trivial penalties and weak enforcement have allowed employers to evade responsibility. Under President Obama, Immigration and Customs Enforcement agreed not to investigate workers during labor disputes. Advocates worry that President Trump, whose Administration has targeted unauthorized immigrants, will scrap those agreements, emboldening employers to simply call ice anytime workers complain.
full article: www.newyorker.com/magazine/2017/05/08/exploitation-and-abuse-at-the-chicken-plant?mbid=nl_TNY%20Template%20-%20With%20Photo%20(164)&CNDID=41308812&spMailingID=10944405&spUserID=MTMzMTg0ODkyNDczS0&spJobID=1160270606&spReportId=MTE2MDI3MDYwNgS2
By Michael Grabell (New Yorker Magazine)
Excerpt:
Case Farms plants are among the most dangerous workplaces in America. In 2015 alone, federal workplace-safety inspectors fined the company nearly two million dollars, and in the past seven years it has been cited for two hundred and forty violations. That’s more than any other company in the poultry industry except Tyson Foods, which has more than thirty times as many employees. David Michaels, the former head of the Occupational Safety and Health Administration (osha), called Case Farms “an outrageously dangerous place to work.” Four years before Osiel lost his leg, Michaels’s inspectors had seen Case Farms employees standing on top of machines to sanitize them and warned the company that someone would get hurt. Just a week before Osiel’s accident, an inspector noted in a report that Case Farms had repeatedly taken advantage of loopholes in the law and given the agency false information. “The company has a twenty-five-year track record of failing to comply with federal workplace-safety standards,” Michaels said.
Case Farms has built its business by recruiting some of the world’s most vulnerable immigrants, who endure harsh and at times illegal conditions that few Americans would put up with. When these workers have fought for higher pay and better conditions, the company has used their immigration status to get rid of vocal workers, avoid paying for injuries, and quash dissent. Thirty years ago, Congress passed an immigration law mandating fines and even jail time for employers who hire unauthorized workers, but trivial penalties and weak enforcement have allowed employers to evade responsibility. Under President Obama, Immigration and Customs Enforcement agreed not to investigate workers during labor disputes. Advocates worry that President Trump, whose Administration has targeted unauthorized immigrants, will scrap those agreements, emboldening employers to simply call ice anytime workers complain.
full article: www.newyorker.com/magazine/2017/05/08/exploitation-and-abuse-at-the-chicken-plant?mbid=nl_TNY%20Template%20-%20With%20Photo%20(164)&CNDID=41308812&spMailingID=10944405&spUserID=MTMzMTg0ODkyNDczS0&spJobID=1160270606&spReportId=MTE2MDI3MDYwNgS2
The United States Department of Justice announces major settlements in two lawsuits with healthcare systems
In one case, Partners Healthcare and Brigham and Women’s Hospital (BWH) will pay $10 million to resolve a suit that involves allegedly fraudulent grant funding. The other case involves an $18 million civil settlement by Indiana University Health Inc. and HealthNet Inc. to resolve alleged violations of the False Claims Act. [Click highlighted words for USDOJ material.]
The BWH case involved a stem cell research lab run by Piero Anversa, M.D., that allegedly obtained grants from the National Institutes of Health via the submission of falsified data. “Individuals and institutions that receive research funding from NIH have an obligation to conduct their research honestly and not to alter results to conform with unproven hypotheses,” said Acting U.S. Attorney William D. Weinreb in the announcement. He commended BWH for self-reporting the fraud, which he termed a waste of scarce government resources.
A BWH spokesperson told the Boston Business Journal the institution “has made significant enhancements to research integrity compliance protocols as a result of this event.” The settlement announcement came out on the same day BWH released news of buyout packages offered to
1,600 employees.
In the Indiana University case, a whistleblower filed a federal lawsuit claiming IU Health and HealthNet had violated federal anti-kickback laws by fraudulently billing Medicaid for services they said were provided by doctors when those services were allegedly provided by nurse midwives instead. Neither HealthNet nor IU Health admitted wrongdoing in the settlement, according to an article in the Indianapolis Business Journal.
Both HealthNet and IU Health claimed they agreed to the settlement in order to avoid protracted litigation. “There is no merit in [the] allegations of inappropriate patient care, referrals or billing practices,” added IU Health in a statement.
Both organizations will pay approximately $5.1 million to the United States and $3.9 million to the State of Indiana, according to the Department of Justice.
From: http://www.fiercehealthcare.com/healthcare/department-justice-announces-settlements-two-major-healthcare-suits?utm_medium=nl&utm_source=internal&mrkid=730008&mkt_tok=eyJpIjoiT0RjelkySTJNR0ZpTldZMiIsInQiOiJwY1VoSXZINlRrb0JCdUJ5ZmxKWGxlbEpGV1U4ZXdGc1NsV1hpWHRuQVJET1YxNVd1MEgrZGRQYWtxejJlM05tZ3M4SGlORk5Bekx1YXpxK2FYeVdBMmFQdzYyOXQ5UHBCWDJ5V3Urc1NlV1NCUkJhTU1HOUxVdm1xV0RQV3NYWCJ9
In one case, Partners Healthcare and Brigham and Women’s Hospital (BWH) will pay $10 million to resolve a suit that involves allegedly fraudulent grant funding. The other case involves an $18 million civil settlement by Indiana University Health Inc. and HealthNet Inc. to resolve alleged violations of the False Claims Act. [Click highlighted words for USDOJ material.]
The BWH case involved a stem cell research lab run by Piero Anversa, M.D., that allegedly obtained grants from the National Institutes of Health via the submission of falsified data. “Individuals and institutions that receive research funding from NIH have an obligation to conduct their research honestly and not to alter results to conform with unproven hypotheses,” said Acting U.S. Attorney William D. Weinreb in the announcement. He commended BWH for self-reporting the fraud, which he termed a waste of scarce government resources.
A BWH spokesperson told the Boston Business Journal the institution “has made significant enhancements to research integrity compliance protocols as a result of this event.” The settlement announcement came out on the same day BWH released news of buyout packages offered to
1,600 employees.
In the Indiana University case, a whistleblower filed a federal lawsuit claiming IU Health and HealthNet had violated federal anti-kickback laws by fraudulently billing Medicaid for services they said were provided by doctors when those services were allegedly provided by nurse midwives instead. Neither HealthNet nor IU Health admitted wrongdoing in the settlement, according to an article in the Indianapolis Business Journal.
Both HealthNet and IU Health claimed they agreed to the settlement in order to avoid protracted litigation. “There is no merit in [the] allegations of inappropriate patient care, referrals or billing practices,” added IU Health in a statement.
Both organizations will pay approximately $5.1 million to the United States and $3.9 million to the State of Indiana, according to the Department of Justice.
From: http://www.fiercehealthcare.com/healthcare/department-justice-announces-settlements-two-major-healthcare-suits?utm_medium=nl&utm_source=internal&mrkid=730008&mkt_tok=eyJpIjoiT0RjelkySTJNR0ZpTldZMiIsInQiOiJwY1VoSXZINlRrb0JCdUJ5ZmxKWGxlbEpGV1U4ZXdGc1NsV1hpWHRuQVJET1YxNVd1MEgrZGRQYWtxejJlM05tZ3M4SGlORk5Bekx1YXpxK2FYeVdBMmFQdzYyOXQ5UHBCWDJ5V3Urc1NlV1NCUkJhTU1HOUxVdm1xV0RQV3NYWCJ9
From Bloomberg: Mylan Tried to ‘Squelch’ EpiPen Rival, Sanofi Says in Lawsuit
-- Sanofi accuses Mylan of seeking to protect EpiPen monopoly
Mylan NV engaged in a campaign to squash a rival to its EpiPen allergy treatment and artificially inflate the price of the drug to maintain a market monopoly, French drugmaker Sanofi said in a lawsuit filed Monday.
Mylan, which once controlled more than 90 percent of the market for epinephrine allergy injectors, is already under scrutiny over the skyrocketing prices of its EpiPen product. The company is facing a U.S. antitrust probe of whether it improperly thwarted competition to the blockbuster product. Sanofi claims in its lawsuit that Mylan’s conduct is harming consumers.
“To preserve the monopoly position of their $1 billion crown jewel branded drug product, Mylan engaged in illegal conduct to squelch this nascent competition, harming both Sanofi and U.S. consumers,” Sanofi’s lawyers said in the complaint filed in federal court in New Jersey.
Mylan executives offered ‘unprecedented’ price rebates to persuade government officials, insurance companies and pharmaceutical benefit managers not to reimburse patients for Sanofi’s competing Auvi-Q allergy treatment. Mylan also allegedly ran misleading ads to convince doctors to avoid prescribing Auvi-Q and required schools to certify they would use EpiPen exclusively in order to access discounts, Sanofi said.
Full article: https://www.bloomberg.com/news/articles/2017-04-24/mylan-tried-to-squelch-epipen-rival-sanofi-says-in-lawsuit
-- Sanofi accuses Mylan of seeking to protect EpiPen monopoly
Mylan NV engaged in a campaign to squash a rival to its EpiPen allergy treatment and artificially inflate the price of the drug to maintain a market monopoly, French drugmaker Sanofi said in a lawsuit filed Monday.
Mylan, which once controlled more than 90 percent of the market for epinephrine allergy injectors, is already under scrutiny over the skyrocketing prices of its EpiPen product. The company is facing a U.S. antitrust probe of whether it improperly thwarted competition to the blockbuster product. Sanofi claims in its lawsuit that Mylan’s conduct is harming consumers.
“To preserve the monopoly position of their $1 billion crown jewel branded drug product, Mylan engaged in illegal conduct to squelch this nascent competition, harming both Sanofi and U.S. consumers,” Sanofi’s lawyers said in the complaint filed in federal court in New Jersey.
Mylan executives offered ‘unprecedented’ price rebates to persuade government officials, insurance companies and pharmaceutical benefit managers not to reimburse patients for Sanofi’s competing Auvi-Q allergy treatment. Mylan also allegedly ran misleading ads to convince doctors to avoid prescribing Auvi-Q and required schools to certify they would use EpiPen exclusively in order to access discounts, Sanofi said.
Full article: https://www.bloomberg.com/news/articles/2017-04-24/mylan-tried-to-squelch-epipen-rival-sanofi-says-in-lawsuit
From the DC Circuit decision upholding district court’s decision and order permanently enjoining the merger of Anthem and Cigna:
"Anthem and Cigna (hereinafter, Anthem) challenge the district court’s decision and order permanently enjoining the merger on the principal ground that the court improperly declined to consider the claimed billions of dollars in medical savings. See Appellant Br. 10. Specifically, Anthem maintains 1 the district court improperly rejected a consumer welfare standard — what it calls “the benchmark of modern antitrust law,” id. — and generally abdicated its responsibility to balance likely benefits against any potential harm. According to Anthem, the merger’s efficiencies would benefit customers directly by reducing the costs of customer medical claims through lower provider rates, without harm to the providers.
* * *
Anthem’s appeal focuses principally on factual disputes concerning the claimed medical cost savings, which the government maintains were not verified, not specific to the merger, and not even real efficiencies. For the following reasons, we hold that the district court did not abuse its discretion in enjoining the merger based on Anthem’s failure to show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect of the merger in the fourteen Anthem states: the loss of Cigna, an innovative competitor in a highly concentrated market.
Additionally, we hold that the district court did not abuse its discretion in enjoining the merger based on its separate and independent determination that the merger would have a substantial anticompetitive effect in the Richmond, Virginia large group employer market. Accordingly, we affirm the issuance of the permanent injunction on alternative and independent grounds. [footnotes omitted]
The full opinion is here: https://dlbjbjzgnk95t.cloudfront.net/0909000/909103/document%20(47).pdf
Note The AAI, by David Balto, and others submitted amicus briefs that appear to have been influential.
"Anthem and Cigna (hereinafter, Anthem) challenge the district court’s decision and order permanently enjoining the merger on the principal ground that the court improperly declined to consider the claimed billions of dollars in medical savings. See Appellant Br. 10. Specifically, Anthem maintains 1 the district court improperly rejected a consumer welfare standard — what it calls “the benchmark of modern antitrust law,” id. — and generally abdicated its responsibility to balance likely benefits against any potential harm. According to Anthem, the merger’s efficiencies would benefit customers directly by reducing the costs of customer medical claims through lower provider rates, without harm to the providers.
* * *
Anthem’s appeal focuses principally on factual disputes concerning the claimed medical cost savings, which the government maintains were not verified, not specific to the merger, and not even real efficiencies. For the following reasons, we hold that the district court did not abuse its discretion in enjoining the merger based on Anthem’s failure to show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect of the merger in the fourteen Anthem states: the loss of Cigna, an innovative competitor in a highly concentrated market.
Additionally, we hold that the district court did not abuse its discretion in enjoining the merger based on its separate and independent determination that the merger would have a substantial anticompetitive effect in the Richmond, Virginia large group employer market. Accordingly, we affirm the issuance of the permanent injunction on alternative and independent grounds. [footnotes omitted]
The full opinion is here: https://dlbjbjzgnk95t.cloudfront.net/0909000/909103/document%20(47).pdf
Note The AAI, by David Balto, and others submitted amicus briefs that appear to have been influential.
Elizabeth Rosenthal's new book on the health care industry, An American Sickness
Health care is a trillion-dollar industry in America, but are we getting what we pay for? Dr. Elisabeth Rosenthal, a medical journalist who formerly worked as a medical doctor, warns that the existing system too often focuses on financial incentives over health or science.
"We've trusted a lot of our health care to for-profit businesses and it's their job, frankly, to make profit," Rosenthal says. "You can't expect them to act like Mother Teresas."
Rosenthal's new book, An American Sickness, examines the deeply rooted problems of the existing health-care system and also offers suggestions for a way forward. She notes that under the current system, it's far more lucrative to provide a lifetime of treatments than a cure.
"One expert in the book joked to me ... that if we relied on the current medical market to deal with polio, we would never have a polio vaccine," Rosenthal says. "Instead we would have iron lungs in seven colors with iPhone apps."
For Elisabeth Rosenthal's interview with Terry Gross on NPR: www.npr.org/programs/fresh-air/2017/04/10/523279708/fresh-air-for-april-10-2017
Health care is a trillion-dollar industry in America, but are we getting what we pay for? Dr. Elisabeth Rosenthal, a medical journalist who formerly worked as a medical doctor, warns that the existing system too often focuses on financial incentives over health or science.
"We've trusted a lot of our health care to for-profit businesses and it's their job, frankly, to make profit," Rosenthal says. "You can't expect them to act like Mother Teresas."
Rosenthal's new book, An American Sickness, examines the deeply rooted problems of the existing health-care system and also offers suggestions for a way forward. She notes that under the current system, it's far more lucrative to provide a lifetime of treatments than a cure.
"One expert in the book joked to me ... that if we relied on the current medical market to deal with polio, we would never have a polio vaccine," Rosenthal says. "Instead we would have iron lungs in seven colors with iPhone apps."
For Elisabeth Rosenthal's interview with Terry Gross on NPR: www.npr.org/programs/fresh-air/2017/04/10/523279708/fresh-air-for-april-10-2017
NYT editorial: F.C.C. Invokes Internet Freedom While Trying to Kill It
Excerpt:
Here we go again. The Federal Communications Commission, now led by an anti-regulation ideologue appointed by President Trump, wants to gut the net neutrality rules that keep powerful broadband companies from calling the shots on the internet, at the expense of consumers.
Under the cynical guise of “restoring internet freedom,” the new F.C.C. chairman, Ajit Pai, wants to give big telecom companies carte blanche to treat the content of their subsidiaries and partners more favorably than information from other companies — a practice that AT&T, Comcast and Verizon are already starting to employ. They would also be able to demand fees from companies like Netflix and YouTube to deliver videos and other content to customers.
If the commission, which has a 2-to-1 Republican majority, approves Mr. Pai’s proposal, there will be little stopping the broadband industry from squelching competition, limiting consumer choice and raising prices.
Click here to read the entire editorial
Excerpt:
Here we go again. The Federal Communications Commission, now led by an anti-regulation ideologue appointed by President Trump, wants to gut the net neutrality rules that keep powerful broadband companies from calling the shots on the internet, at the expense of consumers.
Under the cynical guise of “restoring internet freedom,” the new F.C.C. chairman, Ajit Pai, wants to give big telecom companies carte blanche to treat the content of their subsidiaries and partners more favorably than information from other companies — a practice that AT&T, Comcast and Verizon are already starting to employ. They would also be able to demand fees from companies like Netflix and YouTube to deliver videos and other content to customers.
If the commission, which has a 2-to-1 Republican majority, approves Mr. Pai’s proposal, there will be little stopping the broadband industry from squelching competition, limiting consumer choice and raising prices.
Click here to read the entire editorial
What Jonathan Rubin said in 2015 about net neutrality and the logic of classifying internet providers as Title II common carriers
Blog excerpt: The Vail Compromise, reached in 1910 and named after long-time AT&T President Theodore Vail, allowed the Bell System to retain the many independent telephone companies it had aggressively acquired in exchange for federal price regulation. Then, in a 1912 version of net neutrality known as the Kingsbury Commitment, an AT&T Vice President wrote a letter settling a Department of Justice antitrust case against AT&T. Kingsbury committed the network to connecting all incoming calls, even those initiated by independent telephone companies.
Now, a century later, the medium is broadband and the same kind of compromise is taking shape. Title II regulation of broadband is only one side of a grand bargain, whereby a new, near-national broadband network created by the merger of Comcast and Time Warner Cable is allowed to emerge in exchange for a federal regulatory regime legally authorized to impose common carrier principles of access and fairness.
This basic arrangement has served the nation well in telephony and other monopolistic, regulated industries. There is no reason why it should not work just as well for broadband services.
See: https://rubinpllc.wordpress.com/2015/01/31/net-neutrality-old-wine-in-new-bottles/
Blog excerpt: The Vail Compromise, reached in 1910 and named after long-time AT&T President Theodore Vail, allowed the Bell System to retain the many independent telephone companies it had aggressively acquired in exchange for federal price regulation. Then, in a 1912 version of net neutrality known as the Kingsbury Commitment, an AT&T Vice President wrote a letter settling a Department of Justice antitrust case against AT&T. Kingsbury committed the network to connecting all incoming calls, even those initiated by independent telephone companies.
Now, a century later, the medium is broadband and the same kind of compromise is taking shape. Title II regulation of broadband is only one side of a grand bargain, whereby a new, near-national broadband network created by the merger of Comcast and Time Warner Cable is allowed to emerge in exchange for a federal regulatory regime legally authorized to impose common carrier principles of access and fairness.
This basic arrangement has served the nation well in telephony and other monopolistic, regulated industries. There is no reason why it should not work just as well for broadband services.
See: https://rubinpllc.wordpress.com/2015/01/31/net-neutrality-old-wine-in-new-bottles/
Wired magazine explains FCC net neutrality developments:
THE GOP-LED FEDERAL Communications Commission this week released the first details of its long-anticipated plan to roll-back Obama-era net neutrality protections. . . . At issue is the Open Internet Order, a sweeping set of policies passed back in 2015 aimed at ensuring net neutrality, the idea that internet service providers should treat all traffic equally. The rules ban your home broadband provider from degrading your Netflix streams to encourage you to buy cable television instead, and prohibit your mobile carrier fromblocking Skype. It also reclassified internet providers as “Title II” common carriers, much like telephone companies, a designation that gave the FCC legal authority over their business practices.
Full article: https://www.wired.com/2017/04/heres-comes-next-fight-save-net-neutrality/
THE GOP-LED FEDERAL Communications Commission this week released the first details of its long-anticipated plan to roll-back Obama-era net neutrality protections. . . . At issue is the Open Internet Order, a sweeping set of policies passed back in 2015 aimed at ensuring net neutrality, the idea that internet service providers should treat all traffic equally. The rules ban your home broadband provider from degrading your Netflix streams to encourage you to buy cable television instead, and prohibit your mobile carrier fromblocking Skype. It also reclassified internet providers as “Title II” common carriers, much like telephone companies, a designation that gave the FCC legal authority over their business practices.
Full article: https://www.wired.com/2017/04/heres-comes-next-fight-save-net-neutrality/
FCC Chair Pai on reviving "light touch" internet regulation:
Earlier today, I shared with my fellow Commissioners a proposal to reverse the mistake of Title II and return to the light-touch regulatory framework that served our nation so well during the Clinton Administration, the Bush Administration, and the first six years of the Obama Administration.
The document that we will be voting on at the Commission’s May meeting is called a Notice of Proposed Rulemaking. If it is adopted, the FCC will seek public input on this proposal. In other words, this will be the beginning of the discussion, not the end.
Now, some have called on the FCC to reverse Title II immediately, through what is known as a Declaratory Ruling. But I don’t believe that is the right path forward. This decision should be made through an open and transparent process in which every American can share his or her views.
So what are the basic elements of this Notice of Proposed Rulemaking?
First, we are proposing to return the classification of broadband service from a Title II telecommunications service to a Title I information service—that is, light-touch regulation drawn from the Clinton Administration. As I mentioned earlier, this Title I classification was expressly upheld by the Supreme Court in 2005, and it’s more consistent with the facts and the law.
Second, we are proposing to eliminate the so-called Internet conduct standard. This 2015 rule gives the FCC a roving mandate to micromanage the Internet. Immediately following the FCC’s vote adopting the Title II Order, my predecessor was asked what the Internet conduct standard meant. His answer was that “we don’t really know” what it means and that “we don’t know where things go next.” I’ve never heard a better definition of regulatory uncertainty.
Later, of course, we saw where things were headed, and it wasn’t good for consumers. The FCC used the Internet conduct standard to launch a wide-ranging investigation of free-data programs. Under these programs, wireless companies offer their customers the ability to stream music, video, and the like free from any data limits. They are very popular among consumers, particularly lower-income Americans. But no—the prior FCC had met the enemy, and it was consumers getting something for free from their wireless providers. Following the presidential election, we terminated this investigation before the FCC was able to take any formal action. But we shouldn’t leave the Internet conduct standard on the books for a future Commission to make mischief.
And third, we are seeking comment on how we should approach the so-called bright-line rules adopted in 2015.
Excerpt from talk at https://www.fcc.gov/document/chairman-pai-speech-future-internet-regulation
Earlier today, I shared with my fellow Commissioners a proposal to reverse the mistake of Title II and return to the light-touch regulatory framework that served our nation so well during the Clinton Administration, the Bush Administration, and the first six years of the Obama Administration.
The document that we will be voting on at the Commission’s May meeting is called a Notice of Proposed Rulemaking. If it is adopted, the FCC will seek public input on this proposal. In other words, this will be the beginning of the discussion, not the end.
Now, some have called on the FCC to reverse Title II immediately, through what is known as a Declaratory Ruling. But I don’t believe that is the right path forward. This decision should be made through an open and transparent process in which every American can share his or her views.
So what are the basic elements of this Notice of Proposed Rulemaking?
First, we are proposing to return the classification of broadband service from a Title II telecommunications service to a Title I information service—that is, light-touch regulation drawn from the Clinton Administration. As I mentioned earlier, this Title I classification was expressly upheld by the Supreme Court in 2005, and it’s more consistent with the facts and the law.
Second, we are proposing to eliminate the so-called Internet conduct standard. This 2015 rule gives the FCC a roving mandate to micromanage the Internet. Immediately following the FCC’s vote adopting the Title II Order, my predecessor was asked what the Internet conduct standard meant. His answer was that “we don’t really know” what it means and that “we don’t know where things go next.” I’ve never heard a better definition of regulatory uncertainty.
Later, of course, we saw where things were headed, and it wasn’t good for consumers. The FCC used the Internet conduct standard to launch a wide-ranging investigation of free-data programs. Under these programs, wireless companies offer their customers the ability to stream music, video, and the like free from any data limits. They are very popular among consumers, particularly lower-income Americans. But no—the prior FCC had met the enemy, and it was consumers getting something for free from their wireless providers. Following the presidential election, we terminated this investigation before the FCC was able to take any formal action. But we shouldn’t leave the Internet conduct standard on the books for a future Commission to make mischief.
And third, we are seeking comment on how we should approach the so-called bright-line rules adopted in 2015.
Excerpt from talk at https://www.fcc.gov/document/chairman-pai-speech-future-internet-regulation
Regulating the Financial System During the Trump Administration
Upcoming event from Bipartisan Policy Center: Regulating the Financial System During the Trump Administration
Thursday, May 25, 2017
10:00 a.m. - 11:30 a.m. ET
Add to Calendar
Bipartisan Policy Center
1225 Eye Street NW, Suite 1000
Washington, D.C. 20005
Get Directions
Can't join us in person? The event will be webcast.
Kenneth E. Bentsen, Jr. | President and CEO, SIFMA
Michael S. Barr | Roy F. and Jean Humphrey Proffitt Professor of Law, University of Michigan Law School; former Assistant Secretary for Financial Institutions, Treasury Department
*Rescheduled due to the March 14 snow storm
More than six years after the passage of the Dodd-Frank Act, the future of the post-crisis financial regulatory structure may be in line for substantial changes. In February, President Trump signed a new executive order laying out seven “core principles” for regulating the financial system and directing the Treasury Department to issue a report on whether current financial regulation meets those principles.
Join us on May 25 for a discussion of such questions as: are we moving in the right direction with financial regulation? Is current policy serving the economy and consumers while ensuring financial stability? What other changes to financial regulatory policy are needed to better achieve these goals? What approach should the United States take with other countries with respect to financial regulation and global agreements?
Upcoming event from Bipartisan Policy Center: Regulating the Financial System During the Trump Administration
Thursday, May 25, 2017
10:00 a.m. - 11:30 a.m. ET
Add to Calendar
Bipartisan Policy Center
1225 Eye Street NW, Suite 1000
Washington, D.C. 20005
Get Directions
Can't join us in person? The event will be webcast.
Kenneth E. Bentsen, Jr. | President and CEO, SIFMA
Michael S. Barr | Roy F. and Jean Humphrey Proffitt Professor of Law, University of Michigan Law School; former Assistant Secretary for Financial Institutions, Treasury Department
*Rescheduled due to the March 14 snow storm
More than six years after the passage of the Dodd-Frank Act, the future of the post-crisis financial regulatory structure may be in line for substantial changes. In February, President Trump signed a new executive order laying out seven “core principles” for regulating the financial system and directing the Treasury Department to issue a report on whether current financial regulation meets those principles.
Join us on May 25 for a discussion of such questions as: are we moving in the right direction with financial regulation? Is current policy serving the economy and consumers while ensuring financial stability? What other changes to financial regulatory policy are needed to better achieve these goals? What approach should the United States take with other countries with respect to financial regulation and global agreements?
Jonathan Taplin's Op-Ed: Is It Time to Break Up Google?
In his April 22, 2017 New York Times Op-Ed titled “Is It Time to Break Up Google?” Jonathan Taplin complains that the American economy is dominated by giant corporations. He writes:
In just 10 years, the world’s five largest companies by market capitalization have all changed, save for one: Microsoft. Exxon Mobil, General Electric, Citigroup and Shell Oil are out and Apple, Alphabet (the parent company of Google), Amazon and Facebook have taken their place.
They’re all tech companies, and each dominates its corner of the industry: Google has an 88 percent market share in search advertising, Facebook (and its subsidiaries Instagram, WhatsApp and Messenger) owns 77 percent of mobile social traffic and Amazon has a 74 percent share in the e-book market. In classic economic terms, all three are monopolies.
We have been transported back to the early 20th century, when arguments about “the curse of bigness” were advanced by President Woodrow Wilson’s counselor, Louis Brandeis, before Wilson appointed him to the Supreme Court. Brandeis wanted to eliminate monopolies, because (in the words of his biographer Melvin Urofsky) “in a democratic society the existence of large centers of private power is dangerous to the continuing vitality of a free people.” We need look no further than the conduct of the largest banks in the 2008 financial crisis or the role that Facebook and Google play in the “fake news” business to know that Brandeis was right.
See https://www.nytimes.com/2017/04/22/opinion/sunday/is-it-time-to-break-up-google.html?ref=opinion
An obvious question is how government might address the problem Taplin describes. The answer is: not easily within existing legal frameworks. The most conventional remedy Taplin suggests is merger enforcement. He says:
There are a few obvious regulations to start with. Monopoly is made by acquisition — Google buying AdMob and DoubleClick, Facebook buying Instagram and WhatsApp, Amazon buying, to name just a few, Audible, Twitch, Zappos and Alexa. At a minimum, these companies should not be allowed to acquire other major firms, like Spotify or Snapchat.
The other remedies Taplin mentions are less conventional:
The second alternative is to regulate a company like Google as a public utility, requiring it to license out patents, for a nominal fee, for its search algorithms, advertising exchanges and other key innovations.
The third alternative is to remove the “safe harbor” clause in the 1998 Digital Millennium Copyright Act, which allows companies like Facebook and Google’s YouTube to free ride on the content produced by others.
An alternative Taplin does not mention is regulatory action by the Federal Trade Commission using Section 5 of the FTC Act. Possible limitations of FTC action were discussed by authors Rubin and Lande in a 2012 article called “How the FTC Could Beat Google,” available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2163053 In their opening paragraph Rubin and Lande explain:
The U.S. Federal Trade Commission (“FTC”) is rumored to be deciding whether to bring a “pure Section 5” case against Google as a result of complaints that the company unfairly favors its own offerings over those of its rivals in its search results. If successful, the case could do more than improve competition in the crucial multi-billion dollar online marketplace. It also could revitalize Section 5 of the FTC Act and solidify the agency’s authority to prevent the “unfair methods of competition” or “unfair or deceptive acts or practices” that do not violate the other Antitrust or Consumer Protection statutes. But the case will fail miserably at the hands of a reviewing court and the agency will be confined to relatively non-controversial enforcement violations if the FTC fails to impose upon itself a tightly bounded and constrained legal framework that contains clear limiting principles.
There is a difference between Taplin’s op-ed approach and Lande and Rubin’s scholarly approach that is not trivial. Lande and Rubin focus in an expert manner on how courts are likely to respond to a broad assertion of regulatory authority over Google and, by extension, other large and powerful companies. Taplin does discuss regulatory alternatives in a lawyer-like way, but his comments are tailored for a broad audience of newspaper readers, and he suggests a political action context similar to the one that faced Teddy Roosevelt in the early days of “trust-busting.”
Taplin is an advocate for reform and improvement of competition and trade regulation law, coming at a time when competition and trade regulation enforcement in the United States faces existential threats.
Posted by Don Resnikoff
Video of Jonathan Taplin speaking on April 20 on Have Internet Giants Taken Over Creative Culture?
The New America Foundation web-site introduction explains:
The beginning of the 21st century brought with it the emergence of three fledgling businesses that would soon redefine America’s notion of a decentralized internet. Over the last fifteen years, Facebook, Google, and Amazon have created powerful monopolies that now control the economic success of the journalism, music, video, and book industries. These monopolies have allowed Facebook, Google, and Amazon to experience an unprecedented amount of revenue growth, while their content creators have seen an equally dramatic decrease in earnings. In Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy, Jonathan Taplin uses his own extensive experience as a music and film producer to explore the real consequences average consumers stand to face if this monopolistic activity goes unchecked and to recommend potential solutions.
Jonathan Taplin is Director Emeritus of the Annenberg Innovation Lab at the University of Southern California. He began his entertainment career in 1969 as Tour Manager for Bob Dylan and The Band. In 1973 he produced Martin Scorsese’s first feature film, Mean Streets, which was selected for the Cannes Film Festival. An expert in digital media entertainment, Taplin is a member of the Academy Of Motion Picture Arts and Sciences and sits on the California Broadband Task Force and Los Angeles Mayor Eric Garcetti’s Council on Technology and Innovation.
*****
The video is available on YouTube -- click the title above -- or
https://www.newamerica.org/open-markets/events/who-controls-creative-culture/
Note: because of a technological glitch the talk does not begin until about minute 14 of the video.
The New America Foundation web-site introduction explains:
The beginning of the 21st century brought with it the emergence of three fledgling businesses that would soon redefine America’s notion of a decentralized internet. Over the last fifteen years, Facebook, Google, and Amazon have created powerful monopolies that now control the economic success of the journalism, music, video, and book industries. These monopolies have allowed Facebook, Google, and Amazon to experience an unprecedented amount of revenue growth, while their content creators have seen an equally dramatic decrease in earnings. In Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy, Jonathan Taplin uses his own extensive experience as a music and film producer to explore the real consequences average consumers stand to face if this monopolistic activity goes unchecked and to recommend potential solutions.
Jonathan Taplin is Director Emeritus of the Annenberg Innovation Lab at the University of Southern California. He began his entertainment career in 1969 as Tour Manager for Bob Dylan and The Band. In 1973 he produced Martin Scorsese’s first feature film, Mean Streets, which was selected for the Cannes Film Festival. An expert in digital media entertainment, Taplin is a member of the Academy Of Motion Picture Arts and Sciences and sits on the California Broadband Task Force and Los Angeles Mayor Eric Garcetti’s Council on Technology and Innovation.
*****
The video is available on YouTube -- click the title above -- or
https://www.newamerica.org/open-markets/events/who-controls-creative-culture/
Note: because of a technological glitch the talk does not begin until about minute 14 of the video.
Editorial Comment: Competition policy in the age of Trump
We have previously commented on the tendency of the Trump administration to ad hoc participation in competition policy.
We expressed concern when in January the potential merger partners Werner Baumann, Bayer CEO, and Hugh Grant, Monsanto CEO, had what Monsanto said was “a productive meeting with President-Elect Trump and his team to share their views on the future of the agriculture industry and its need for innovation."
Later, after Mr. Trump became President, we expressed concern about New York Times reports of meetings with the White House economics team by Sprint’s parent company Softbank. The meetings coincided with Sprint and Softbank consideration of a “mega-merger,” possibly with T-Mobile, Comcast, or others. The New York Times reported that Tokyo-based SoftBank met with members of the White House economics team, talking up the need for consolidation. The Times, citing sources briefed on the matter, reported that the presentations claimed that a lack of advanced digital investments has put the US economy at risk. The companies argued that risk could be mitigated if telecommunications and wireless companies merged.
Recent comment by Adam Gopnik in the New Yorker Magazine discusses the bigger political concerns raised by the prospect of continued ad hoc policy making. He wrote:
A healthy polity lifts public life into a world of reasonable administration and procedural reliability . . . . In the April 1st issue of The Economist . . . one finds [that], “In 2016, Mr. Trump said Mr. Bezos was using the Post to attack him because Amazon has a ‘huge antitrust problem.’ If Mr. Trump believes that—or even if he doesn’t—his administration might favour action.” Stop and think about those sentences for a moment . . .: there is a presumption that it is perfectly possible that Donald Trump will act against a private company in order to take revenge against it for opposing him in print. . . . It is the kind of thing that is perfectly normal in an autocratic state, as in Russia, where one cannot mock the boss without fear of the police. Suddenly, that abuse is taken for granted here.
No law is broken when a President or close advisors are personally engaged in vetting the terms and conditions of a merger or other competition policy issue, but it is a dramatic departure from past practice, and a worrying one.
When Republican Ronald Reagan became President in 1982 he wanted change in a conservative direction for competition policy, but his cautious approach was a sharp contrast to what may be a more ad hoc approach of the Trump Administration. Reagan appointed a widely respected Stanford University scholar, William Baxter, to head the USDOJ’s Antitrust Division. Baxter was a “Chicago School” enforcement conservative, but his idea of change was reflected in his efforts to update the written Merger Guidelines followed by federal enforcement agencies -- hardly an ad hoc approach.
When Baxter and the Reagan administration famously withdrew the nearly completed USDOJ monopolization litigation against IBM, it had been clear for some time that Baxter opposed the Government prosecution of IBM (he traveled to Europe to lobby the EU authorities against pursuing a case), but he diligently presided over a form of moot court for the U.S. Department of Justice trial staff, with staffers presenting their best evidence and arguments for pursuing the case. At the end of the review process Baxter issued a quasi-judicial written opinion explaining why he thought the case was not worth pursuing. For example, he found predatory pricing allegations to be strong, but so dated as not to be worth pursuing.
It could be argued that there is little consequential difference between the formalistic respect for precedent and institutional procedures of the Reagan/Baxter approach to competition policy change and the Trump administrations' recent tendencies toward a more personal and ad hoc approach. I think the difference is big, and worrying.
Law as we know it today in the United States began with the idea of regularized and predictable rules and procedures. That was the idea of the English “law merchant,” a system where merchant disputes on issues like liability for deliveries of spoiled fruit could be addressed using regularized rules and procedures rather than ad hoc resolutions. The idea of regularized rules and procedures is a crucial part of modern U.S. law, including competition policy.
One problem among many that derives from ad hoc Presidential participation in competition policy is crony capitalism, where competition policy appears to be what powerful business oligarchs can work out in informal conversations on particular cases with political leaders whose interests are aligned with business oligarchs. The William Baxter idea of carefully crafted and transparent Merger Guidelines and reasoned bases for Government decisions on particular cases is a better approach, even if the Guidelines follow narrow “Chicago School” precepts, and cases are dismissed that many pro-plaintiff advocates believe should not be.
Of course, we can hope that President Trump will encourage the USDOJ Antitrust Division and the FTC to staff follow Agency Merger Guidelines and otherwise respect controlling legal precedent, and that the President and close advisors will not weigh in on particular mergers or other competition issues on an ad hoc basis. It is also reasonable to hope that that Antitrust Division and FTC decisions on cases will be made on a reasoned and articulated basis that respects legal precedent. That would be far better than ad hoc and personal Presidential involvement in the daily work of the agencies of the kind suggested by meetings by President Trump and advisors with executives with competition policy axes to grind.
By Don Allen Resnikoff
We have previously commented on the tendency of the Trump administration to ad hoc participation in competition policy.
We expressed concern when in January the potential merger partners Werner Baumann, Bayer CEO, and Hugh Grant, Monsanto CEO, had what Monsanto said was “a productive meeting with President-Elect Trump and his team to share their views on the future of the agriculture industry and its need for innovation."
Later, after Mr. Trump became President, we expressed concern about New York Times reports of meetings with the White House economics team by Sprint’s parent company Softbank. The meetings coincided with Sprint and Softbank consideration of a “mega-merger,” possibly with T-Mobile, Comcast, or others. The New York Times reported that Tokyo-based SoftBank met with members of the White House economics team, talking up the need for consolidation. The Times, citing sources briefed on the matter, reported that the presentations claimed that a lack of advanced digital investments has put the US economy at risk. The companies argued that risk could be mitigated if telecommunications and wireless companies merged.
Recent comment by Adam Gopnik in the New Yorker Magazine discusses the bigger political concerns raised by the prospect of continued ad hoc policy making. He wrote:
A healthy polity lifts public life into a world of reasonable administration and procedural reliability . . . . In the April 1st issue of The Economist . . . one finds [that], “In 2016, Mr. Trump said Mr. Bezos was using the Post to attack him because Amazon has a ‘huge antitrust problem.’ If Mr. Trump believes that—or even if he doesn’t—his administration might favour action.” Stop and think about those sentences for a moment . . .: there is a presumption that it is perfectly possible that Donald Trump will act against a private company in order to take revenge against it for opposing him in print. . . . It is the kind of thing that is perfectly normal in an autocratic state, as in Russia, where one cannot mock the boss without fear of the police. Suddenly, that abuse is taken for granted here.
No law is broken when a President or close advisors are personally engaged in vetting the terms and conditions of a merger or other competition policy issue, but it is a dramatic departure from past practice, and a worrying one.
When Republican Ronald Reagan became President in 1982 he wanted change in a conservative direction for competition policy, but his cautious approach was a sharp contrast to what may be a more ad hoc approach of the Trump Administration. Reagan appointed a widely respected Stanford University scholar, William Baxter, to head the USDOJ’s Antitrust Division. Baxter was a “Chicago School” enforcement conservative, but his idea of change was reflected in his efforts to update the written Merger Guidelines followed by federal enforcement agencies -- hardly an ad hoc approach.
When Baxter and the Reagan administration famously withdrew the nearly completed USDOJ monopolization litigation against IBM, it had been clear for some time that Baxter opposed the Government prosecution of IBM (he traveled to Europe to lobby the EU authorities against pursuing a case), but he diligently presided over a form of moot court for the U.S. Department of Justice trial staff, with staffers presenting their best evidence and arguments for pursuing the case. At the end of the review process Baxter issued a quasi-judicial written opinion explaining why he thought the case was not worth pursuing. For example, he found predatory pricing allegations to be strong, but so dated as not to be worth pursuing.
It could be argued that there is little consequential difference between the formalistic respect for precedent and institutional procedures of the Reagan/Baxter approach to competition policy change and the Trump administrations' recent tendencies toward a more personal and ad hoc approach. I think the difference is big, and worrying.
Law as we know it today in the United States began with the idea of regularized and predictable rules and procedures. That was the idea of the English “law merchant,” a system where merchant disputes on issues like liability for deliveries of spoiled fruit could be addressed using regularized rules and procedures rather than ad hoc resolutions. The idea of regularized rules and procedures is a crucial part of modern U.S. law, including competition policy.
One problem among many that derives from ad hoc Presidential participation in competition policy is crony capitalism, where competition policy appears to be what powerful business oligarchs can work out in informal conversations on particular cases with political leaders whose interests are aligned with business oligarchs. The William Baxter idea of carefully crafted and transparent Merger Guidelines and reasoned bases for Government decisions on particular cases is a better approach, even if the Guidelines follow narrow “Chicago School” precepts, and cases are dismissed that many pro-plaintiff advocates believe should not be.
Of course, we can hope that President Trump will encourage the USDOJ Antitrust Division and the FTC to staff follow Agency Merger Guidelines and otherwise respect controlling legal precedent, and that the President and close advisors will not weigh in on particular mergers or other competition issues on an ad hoc basis. It is also reasonable to hope that that Antitrust Division and FTC decisions on cases will be made on a reasoned and articulated basis that respects legal precedent. That would be far better than ad hoc and personal Presidential involvement in the daily work of the agencies of the kind suggested by meetings by President Trump and advisors with executives with competition policy axes to grind.
By Don Allen Resnikoff
New Mexico Becomes 48th State with Data Breach Notification Law; Tennessee Restores Exemption for Encrypted Data
By Caleb Skeath on April 14, 2017 POSTED IN DATA BREACHES
Last week, New Mexico and Tennessee both passed legislation updating each state’s requirements for notifying residents following a data breach. New Mexico’s new law, H.B. 15, makes it the 48th U.S. state to enact a state data breach notification law, leaving Alabama and South Dakota as the only states that have not enacted similar laws. Tennessee’s bill, S.B. 547, amended its Identity Theft Deterrence Act of 1999 to exempt certain encrypted data from triggering notification requirements.
New Mexico’s breach notification law is similar to that of other states, with a few notable differences.
Entire article: https://www.insideprivacy.com/data-security/data-breaches/new-mexico-becomes-48th-state-with-data-breach-notification-law-tennessee-restores-exemption-for-encrypted-data/
By Caleb Skeath on April 14, 2017 POSTED IN DATA BREACHES
Last week, New Mexico and Tennessee both passed legislation updating each state’s requirements for notifying residents following a data breach. New Mexico’s new law, H.B. 15, makes it the 48th U.S. state to enact a state data breach notification law, leaving Alabama and South Dakota as the only states that have not enacted similar laws. Tennessee’s bill, S.B. 547, amended its Identity Theft Deterrence Act of 1999 to exempt certain encrypted data from triggering notification requirements.
New Mexico’s breach notification law is similar to that of other states, with a few notable differences.
Entire article: https://www.insideprivacy.com/data-security/data-breaches/new-mexico-becomes-48th-state-with-data-breach-notification-law-tennessee-restores-exemption-for-encrypted-data/
Anals of local bid-rigging: Well-known Oakland CA contractors conspired to cheat government
By MALAIKA FRALEY | [email protected] |
PUBLISHED: April 7, 2017 at 3:13 pm | UPDATED: April 10, 2017 at 5:44 amSAN FRANCISCO — The founders of a well-known Oakland construction company, the son of an Oakland councilman, a former state Veterans Affairs official and other Bay Area contractors have been indicted by the federal government in construction bid-rigging schemes.
Federal prosecutors said Friday that two founders of Turner Group Construction — CFO Len Turner and COO Lance Turner — and Oakland City Councilman Larry Reid’s son Taj Reid conspired to defraud the Department of Energy on a Lawrence Berkeley Lab renovation project in 2013. The Turner Group has worked on a number of high-profile construction projects in Oakland, including restoration of the historic Fox Theater, the Alameda County Family Justice Center, and a number of public school and BART projects.
Lance Turner, 57, of Oakland, and Len Turner, 56, of San Leandro, and Reid, 46, of Oakland, did not return calls for comment on Friday.
Prosecutors said the indictments arose out of the 2012-2014 public corruption investigation of then-state Sen. Leland Yee, San Francisco political consultant Keith Jackson, and San Francisco mob boss Raymond “Shrimp Boy” Chow, and involved the same “FBI source” who went undercover as a developer to obtain the most recent indictments. Jackson introduced the “developer” to three of the men indicted Thursday, according to prosecutors.
The U.S. attorney’s office also obtained an indictment against Pleasant Hill resident Eric Worthen, a former official with the California Department of Veterans Affairs, who is accused of working with Reid to take $12,000 worth of bribes from the undercover “developer.” It’s unclear if Reid was working under anyone’s employ during the alleged schemes.
Prosecutors say Worthen, 45, was working for the CalVet homes for the veterans division when he and Reid offered the undercover FBI employee the “inside advantage” on the construction of two CalVet projects, a veterans’ home in Ventura and a home remodel in West Los Angeles, by circumventing the normal bidding process.
“For both construction projects, the ‘developer’ to whom Worthen and Reid were providing an inside track on the CalVet contracts was, in actuality, a source working for the FBI. The source was posing as a developer willing to pay bribes in order to obtain contracts with public agencies,” the U.S. attorney’s office said in a news release.
Reid and the Turners are accused of offering to submit a high bid to a Lawrence Berkeley Lab modernization project in 2013 so that the “developer” could win the project.
Reid is charged with two counts of bribery and two counts of conspiracy; Worthen is charged with three bribery counts; and the Turners are each charged with one conspiracy count.
The Turner Group has longtime political ties in Oakland. Council members Desley Brooks and Larry Reid were accused by the city auditor in 2013 of illegally directing city staffers to award a $2 million demolition project at the Oakland Army Base to the company. Another developer won the project after the city administrator ordered a competitive bidding process.
Also indicted on Thursday were four other Bay Area contractors accused of conspiring to rig the bidding process for the Lawrence Berkeley Lab renovation in 2013. Derf Butler, 53, of Vallejo, president of Butler Enterprise Group, LLC in San Francisco, is charged with conspiracy and making a false statement. Anton Kalafati, 33, of San Francisco, president of San Francisco-based B Side, Inc., is charged with conspiracy and two counts of making false statements. Clifton Burch, 49, of San Lorenzo, president of Empire Engineering and Construction Inc, in Oakland and San Francisco, and Peter McKean, 48, of San Mateo, vice president of Townsend Management Inc. in San Francisco, are each charged with one conspiracy count.
All of the men are scheduled to be arraigned in federal court on April 17 and are not in custody. A conviction for conspiracy to defraud the federal government is punishable by up to five years in prison and a $250,000 fine. Receiving a bribe by an agent of an organization receiving federal funds is punishable by up to 10 years in prison and a $250,000 fine.
Staff writer David DeBolt contributed to this report.
http://www.eastbaytimes.com/2017/04/07/feds-bay-area-developers-including-well-known-oakland-contractors-conspired-to-cheat-government/
By MALAIKA FRALEY | [email protected] |
PUBLISHED: April 7, 2017 at 3:13 pm | UPDATED: April 10, 2017 at 5:44 amSAN FRANCISCO — The founders of a well-known Oakland construction company, the son of an Oakland councilman, a former state Veterans Affairs official and other Bay Area contractors have been indicted by the federal government in construction bid-rigging schemes.
Federal prosecutors said Friday that two founders of Turner Group Construction — CFO Len Turner and COO Lance Turner — and Oakland City Councilman Larry Reid’s son Taj Reid conspired to defraud the Department of Energy on a Lawrence Berkeley Lab renovation project in 2013. The Turner Group has worked on a number of high-profile construction projects in Oakland, including restoration of the historic Fox Theater, the Alameda County Family Justice Center, and a number of public school and BART projects.
Lance Turner, 57, of Oakland, and Len Turner, 56, of San Leandro, and Reid, 46, of Oakland, did not return calls for comment on Friday.
Prosecutors said the indictments arose out of the 2012-2014 public corruption investigation of then-state Sen. Leland Yee, San Francisco political consultant Keith Jackson, and San Francisco mob boss Raymond “Shrimp Boy” Chow, and involved the same “FBI source” who went undercover as a developer to obtain the most recent indictments. Jackson introduced the “developer” to three of the men indicted Thursday, according to prosecutors.
The U.S. attorney’s office also obtained an indictment against Pleasant Hill resident Eric Worthen, a former official with the California Department of Veterans Affairs, who is accused of working with Reid to take $12,000 worth of bribes from the undercover “developer.” It’s unclear if Reid was working under anyone’s employ during the alleged schemes.
Prosecutors say Worthen, 45, was working for the CalVet homes for the veterans division when he and Reid offered the undercover FBI employee the “inside advantage” on the construction of two CalVet projects, a veterans’ home in Ventura and a home remodel in West Los Angeles, by circumventing the normal bidding process.
“For both construction projects, the ‘developer’ to whom Worthen and Reid were providing an inside track on the CalVet contracts was, in actuality, a source working for the FBI. The source was posing as a developer willing to pay bribes in order to obtain contracts with public agencies,” the U.S. attorney’s office said in a news release.
Reid and the Turners are accused of offering to submit a high bid to a Lawrence Berkeley Lab modernization project in 2013 so that the “developer” could win the project.
Reid is charged with two counts of bribery and two counts of conspiracy; Worthen is charged with three bribery counts; and the Turners are each charged with one conspiracy count.
The Turner Group has longtime political ties in Oakland. Council members Desley Brooks and Larry Reid were accused by the city auditor in 2013 of illegally directing city staffers to award a $2 million demolition project at the Oakland Army Base to the company. Another developer won the project after the city administrator ordered a competitive bidding process.
Also indicted on Thursday were four other Bay Area contractors accused of conspiring to rig the bidding process for the Lawrence Berkeley Lab renovation in 2013. Derf Butler, 53, of Vallejo, president of Butler Enterprise Group, LLC in San Francisco, is charged with conspiracy and making a false statement. Anton Kalafati, 33, of San Francisco, president of San Francisco-based B Side, Inc., is charged with conspiracy and two counts of making false statements. Clifton Burch, 49, of San Lorenzo, president of Empire Engineering and Construction Inc, in Oakland and San Francisco, and Peter McKean, 48, of San Mateo, vice president of Townsend Management Inc. in San Francisco, are each charged with one conspiracy count.
All of the men are scheduled to be arraigned in federal court on April 17 and are not in custody. A conviction for conspiracy to defraud the federal government is punishable by up to five years in prison and a $250,000 fine. Receiving a bribe by an agent of an organization receiving federal funds is punishable by up to 10 years in prison and a $250,000 fine.
Staff writer David DeBolt contributed to this report.
http://www.eastbaytimes.com/2017/04/07/feds-bay-area-developers-including-well-known-oakland-contractors-conspired-to-cheat-government/
- Tags:
- Courts
Thirty-three states, the District of Columbia and Puerto Rico addressed financial exploitation of the elderly and vulnerable adults in their 2016 legislative session.
Alabama enacted the Protection of Vulnerable Adults from Financial Exploitation Act, requiring qualified individuals who reasonably believe that financial exploitation of a vulnerable adult may have occurred, been attempted, or is being attempted, to notify promptly the Department of Human Resources and the Alabama Securities Commission. Arizona now provides an exception to the confidentiality of the mediation process when disclosure is made by a court-appointed mediator who reasonably believes that a minor or vulnerable adult is or has been a victim of abuse, child abuse, neglect, exploitation, physical injury or a reportable offense. California enacted legislation requiring the state Department of Justice to develop and distribute an informational notice that warns the public about elder and dependent adult fraud, provides information regarding how and where to file complaints and requires the notice to be made available on the website of the attorney general. Connecticut broadens the circumstances when the Department of Social Services commissioner must disclose the results of an investigation into suspected elderly abuse, neglect, exploitation, or abandonment, but limits the type of information that may be disclosed.
Delaware adopted a reolution recognizing June 15, 2016, as Delaware Elder Abuse Awareness Day, encouraging all of Delaware’s citizens to learn about how to protect and nurture elderly citizens. Idaho amended existing law to revise the definition of neglect to include exploitation. Illinois enacted legislation providing that a prosecution for financial exploitation of an elderly person or a person with a disability may be commenced within seven years of the last act committed in furtherance of the crime.
New Hampshire changed the term "incapacitated" adult to "vulnerable" adult in the laws governing protective services to such adults. New Jersey established the New Jersey Task Force on Abuse of Persons who are Elderly or Disabled. Tennessee adopted a resolution directing the Tennessee Commission on Aging and Disability to conduct a study on the financial exploitation of vulnerable adults. Vermont enacted legislation directing financial institutions in Vermont to make a vulnerable adult’s financial information available to an adult protective services investigator upon receipt of a court order or the investigator’s written request.
The NCSL website allows you to conduct a full text search or use the dropdown menu option to select a state and search relevant laws: http://www.ncsl.org/research/financial-services-and-commerce/financial-crimes-against-the-elderly-2016-legislation.aspx
Alabama enacted the Protection of Vulnerable Adults from Financial Exploitation Act, requiring qualified individuals who reasonably believe that financial exploitation of a vulnerable adult may have occurred, been attempted, or is being attempted, to notify promptly the Department of Human Resources and the Alabama Securities Commission. Arizona now provides an exception to the confidentiality of the mediation process when disclosure is made by a court-appointed mediator who reasonably believes that a minor or vulnerable adult is or has been a victim of abuse, child abuse, neglect, exploitation, physical injury or a reportable offense. California enacted legislation requiring the state Department of Justice to develop and distribute an informational notice that warns the public about elder and dependent adult fraud, provides information regarding how and where to file complaints and requires the notice to be made available on the website of the attorney general. Connecticut broadens the circumstances when the Department of Social Services commissioner must disclose the results of an investigation into suspected elderly abuse, neglect, exploitation, or abandonment, but limits the type of information that may be disclosed.
Delaware adopted a reolution recognizing June 15, 2016, as Delaware Elder Abuse Awareness Day, encouraging all of Delaware’s citizens to learn about how to protect and nurture elderly citizens. Idaho amended existing law to revise the definition of neglect to include exploitation. Illinois enacted legislation providing that a prosecution for financial exploitation of an elderly person or a person with a disability may be commenced within seven years of the last act committed in furtherance of the crime.
New Hampshire changed the term "incapacitated" adult to "vulnerable" adult in the laws governing protective services to such adults. New Jersey established the New Jersey Task Force on Abuse of Persons who are Elderly or Disabled. Tennessee adopted a resolution directing the Tennessee Commission on Aging and Disability to conduct a study on the financial exploitation of vulnerable adults. Vermont enacted legislation directing financial institutions in Vermont to make a vulnerable adult’s financial information available to an adult protective services investigator upon receipt of a court order or the investigator’s written request.
The NCSL website allows you to conduct a full text search or use the dropdown menu option to select a state and search relevant laws: http://www.ncsl.org/research/financial-services-and-commerce/financial-crimes-against-the-elderly-2016-legislation.aspx
Neel Kashkari responds to Jamie Dimon on "too big to fail"
4/6/17 at 7:07 pm
quote:
On April 4, JPMorgan Chase Chairman and CEO Jamie Dimon published his annual shareholder letter, much of which focused on public policy and financial regulation. At 46 pages, Mr. Dimon’s letter includes a lot of interesting commentary. In this essay, I am going to respond to two of his main points because I strongly disagree with them. First, Mr. Dimon asserts that “essentially, Too Big to Fail has been solved?—?taxpayers will not pay if a bank fails.” Second, Mr. Dimon asserts that “it is clear that the banks have too much capital.” Both of these assertions are demonstrably false.
To see the entire essay, go to http://www.tigerdroppings.com/rant/money/neel-kashkari-responds-to-jamie-dimons-shareholder-letter/69533054/
4/6/17 at 7:07 pm
quote:
On April 4, JPMorgan Chase Chairman and CEO Jamie Dimon published his annual shareholder letter, much of which focused on public policy and financial regulation. At 46 pages, Mr. Dimon’s letter includes a lot of interesting commentary. In this essay, I am going to respond to two of his main points because I strongly disagree with them. First, Mr. Dimon asserts that “essentially, Too Big to Fail has been solved?—?taxpayers will not pay if a bank fails.” Second, Mr. Dimon asserts that “it is clear that the banks have too much capital.” Both of these assertions are demonstrably false.
To see the entire essay, go to http://www.tigerdroppings.com/rant/money/neel-kashkari-responds-to-jamie-dimons-shareholder-letter/69533054/
Trump support for separating banks' consumer-lending businesses from their investment banks?
In a private meeting with lawmakers, White House economic adviser Gary Cohn said he supports a policy that could radically reshape Wall Street’s biggest firms by separating their consumer-lending businesses from their investment banks, said people with direct knowledge of the matter.
Cohn, the ex-Goldman Sachs Group Inc. executive who is now advising President Donald Trump, said he generally favors banking going back to how it was when firms like Goldman focused on trading and underwriting securities, and companies such as Citigroup Inc. primarily issued loans, according to the people, who heard his comments.
The remarks surprised some senators and congressional aides who attended the Wednesday meeting, as they didn’t expect a former top Wall Street executive to speak favorably of proposals that would force banks to dramatically rethink how they do business.
Yet Cohn’s comments echo what Trump and Republican lawmakers have previously said about wanting to bring back some version of the Glass-Steagall Act, the Depression-era law that kept bricks-and-mortar lending separate from investment banking for more than six decades.
https://www.bloomberg.com/news/articles/2017-04-06/cohn-said-to-back-wall-street-split-of-lending-investment-banks
In a private meeting with lawmakers, White House economic adviser Gary Cohn said he supports a policy that could radically reshape Wall Street’s biggest firms by separating their consumer-lending businesses from their investment banks, said people with direct knowledge of the matter.
Cohn, the ex-Goldman Sachs Group Inc. executive who is now advising President Donald Trump, said he generally favors banking going back to how it was when firms like Goldman focused on trading and underwriting securities, and companies such as Citigroup Inc. primarily issued loans, according to the people, who heard his comments.
The remarks surprised some senators and congressional aides who attended the Wednesday meeting, as they didn’t expect a former top Wall Street executive to speak favorably of proposals that would force banks to dramatically rethink how they do business.
Yet Cohn’s comments echo what Trump and Republican lawmakers have previously said about wanting to bring back some version of the Glass-Steagall Act, the Depression-era law that kept bricks-and-mortar lending separate from investment banking for more than six decades.
https://www.bloomberg.com/news/articles/2017-04-06/cohn-said-to-back-wall-street-split-of-lending-investment-banks
Many brokers exit HealthCare.gov as high-end plan commissions go unpaid
More insurance companies around the country are refusing to pay brokers commissions on higher-tier exchange plans or special enrollment sales as the companies face financial losses on the federal marketplace, according to Ronnell Nolan, CEO of Health Agents for America, which represents independent insurance brokers.
“It's the Wild West out here, and companies are doing what they can to survive,” Nolan said. “They're not paying commissions on platinum plans, and they are not paying them for special enrollment plans which cover some of the sickest patients.”
That policy has led to an exodus of brokers from the federal marketplace, which could undermine enrollment efforts since brokers historically sign up at least 50% of exchange enrollees, according to Kevin Counihan, the former CEO of HealthCare.gov under President Barack Obama.
Brokers help consumers navigate coverage options.
http://www.modernhealthcare.com/article/20170405/NEWS/170409972?utm_source=modernhealthcare&utm_medium=email&utm_content=20170405-NEWS-170409972&utm_campaign=am
More insurance companies around the country are refusing to pay brokers commissions on higher-tier exchange plans or special enrollment sales as the companies face financial losses on the federal marketplace, according to Ronnell Nolan, CEO of Health Agents for America, which represents independent insurance brokers.
“It's the Wild West out here, and companies are doing what they can to survive,” Nolan said. “They're not paying commissions on platinum plans, and they are not paying them for special enrollment plans which cover some of the sickest patients.”
That policy has led to an exodus of brokers from the federal marketplace, which could undermine enrollment efforts since brokers historically sign up at least 50% of exchange enrollees, according to Kevin Counihan, the former CEO of HealthCare.gov under President Barack Obama.
Brokers help consumers navigate coverage options.
http://www.modernhealthcare.com/article/20170405/NEWS/170409972?utm_source=modernhealthcare&utm_medium=email&utm_content=20170405-NEWS-170409972&utm_campaign=am
Suppliers raise market abuse complaints with the European Commission over bundling of Defender security software with Windows
Security technology suppliers have complained to European Union officials over Microsoft’s alleged abuse of its dominant market position in Europe, according to official EU sources.
A high-level EU official from the European Commission competition directorate said at least three security software companies had “met several times” with the EC to raise alleged market abuses by Microsoft.
The complaints centre on Microsoft’s free security software add-on, Defender, included by default in the Windows 10 operating system. Security companies claim the tactic is shrinking the market for competing security software.
Full Content: EU Observer
Security technology suppliers have complained to European Union officials over Microsoft’s alleged abuse of its dominant market position in Europe, according to official EU sources.
A high-level EU official from the European Commission competition directorate said at least three security software companies had “met several times” with the EC to raise alleged market abuses by Microsoft.
The complaints centre on Microsoft’s free security software add-on, Defender, included by default in the Windows 10 operating system. Security companies claim the tactic is shrinking the market for competing security software.
Full Content: EU Observer
New days for the EPA: Pruitt supports use of pesticide chlorpyrifos despite advice from agency experts
Advocacy organizations seeking to ban a pesticide linked to developmental disorders in children asked the courts Wednesday to intervene and order the Environmental Protection Agency to ban the pesticide from food within 30 days and from all uses within 60 days if it cannot prove it is safe.
The head of the E.P.A., Scott Pruitt, last week denied the petition to outlaw chlorpyrifos, a pesticide often used on apples, oranges and other crops, even though the agency’s own safety experts concluded that the chemical should be outlawed. Mr. Pruitt did not present any new evidence that it is safe, and said the agency could not be forced to complete a review of chlorpyrifos until 2022, when there is a deadline for re-evaluating it.
The E.P.A. had been under a court order to respond by the end of March to a 10-year-old petition to ban the chemical, originally filed in 2007 by the Natural Resources Defense Council and Pesticide Action Network.
From: https://www.nytimes.com/2017/04/05/well/advocacy-groups-ask-for-ban-on-common-pesticide.html?ref=business&_r=0
Advocacy organizations seeking to ban a pesticide linked to developmental disorders in children asked the courts Wednesday to intervene and order the Environmental Protection Agency to ban the pesticide from food within 30 days and from all uses within 60 days if it cannot prove it is safe.
The head of the E.P.A., Scott Pruitt, last week denied the petition to outlaw chlorpyrifos, a pesticide often used on apples, oranges and other crops, even though the agency’s own safety experts concluded that the chemical should be outlawed. Mr. Pruitt did not present any new evidence that it is safe, and said the agency could not be forced to complete a review of chlorpyrifos until 2022, when there is a deadline for re-evaluating it.
The E.P.A. had been under a court order to respond by the end of March to a 10-year-old petition to ban the chemical, originally filed in 2007 by the Natural Resources Defense Council and Pesticide Action Network.
From: https://www.nytimes.com/2017/04/05/well/advocacy-groups-ask-for-ban-on-common-pesticide.html?ref=business&_r=0
Bloomberg: Here’s How They Play Monopoly in America, and Who Wins
Market concentration in the U.S. has reached a three-decade high,
while the government has opened fewer antitrust cases. Competition in the marketplace is a good thing. Lower prices. More innovation. Better goods and services.
Now we may have too little of that good thing, as big corporations gobble up the economic pie. Market concentration has reached a three-decade high and, since the late 1990s, has increased in more than 75 percent of U.S. industries, according to a working paper given last week at the University of Chicago's Booth School of Business. Market concentration is how much of a market, such as the wireless or automobile market, the leaders in that industry control, by revenue.
At the same time, the federal government has brought significantly fewer antitrust cases, according to the paper, titled “Is There a Concentration Problem in America?” In 2014, the Department of Justice didn't open any cases against monopolies at all, and opened just three in 2015. That compares to 22 cases in 1994.
Gustavo Grullon, a finance professor at Rice University's business school and one of the paper's three authors, acknowledged they can’t infer a causal relationship between the increased market concentration and the decline in the number of antitrust cases, but said he thinks the correlation is strong enough to require “serious attention from regulators.” The other two authors are also business school professors, from Cornell University, and York University, in Canada. Their research was cited by a recent Wall Street Journal investing column.
In the most recent draft of the working paper, the researchers, who had already found increasing market concentration, set out to determine what's driving the trend. The data they discovered led them to reject several of their hypotheses, including that the uptick was a result of consolidation of companies in unprofitable or distressed industries, such as publishing and textiles. The data did suggest, aside from antitrust enforcement, that patents are serving as “technological barriers to entry,” keeping out potential competitors.
“It is an important aspect of the economy, and it’s the responsibility of agencies to figure out if this is an issue or not,” Grullon said.
Full article: https://www.bloomberg.com/news/articles/2017-04-05/here-s-how-they-play-monopoly-in-america-and-who-wins
Market concentration in the U.S. has reached a three-decade high,
while the government has opened fewer antitrust cases. Competition in the marketplace is a good thing. Lower prices. More innovation. Better goods and services.
Now we may have too little of that good thing, as big corporations gobble up the economic pie. Market concentration has reached a three-decade high and, since the late 1990s, has increased in more than 75 percent of U.S. industries, according to a working paper given last week at the University of Chicago's Booth School of Business. Market concentration is how much of a market, such as the wireless or automobile market, the leaders in that industry control, by revenue.
At the same time, the federal government has brought significantly fewer antitrust cases, according to the paper, titled “Is There a Concentration Problem in America?” In 2014, the Department of Justice didn't open any cases against monopolies at all, and opened just three in 2015. That compares to 22 cases in 1994.
Gustavo Grullon, a finance professor at Rice University's business school and one of the paper's three authors, acknowledged they can’t infer a causal relationship between the increased market concentration and the decline in the number of antitrust cases, but said he thinks the correlation is strong enough to require “serious attention from regulators.” The other two authors are also business school professors, from Cornell University, and York University, in Canada. Their research was cited by a recent Wall Street Journal investing column.
In the most recent draft of the working paper, the researchers, who had already found increasing market concentration, set out to determine what's driving the trend. The data they discovered led them to reject several of their hypotheses, including that the uptick was a result of consolidation of companies in unprofitable or distressed industries, such as publishing and textiles. The data did suggest, aside from antitrust enforcement, that patents are serving as “technological barriers to entry,” keeping out potential competitors.
“It is an important aspect of the economy, and it’s the responsibility of agencies to figure out if this is an issue or not,” Grullon said.
Full article: https://www.bloomberg.com/news/articles/2017-04-05/here-s-how-they-play-monopoly-in-america-and-who-wins
Is the liquidation of insurer Penn Treaty the result of a failure of regulation?
The NY Times reports that a large long term care insurer, Penn Treaty of Allentown, Pa., has been ordered to liquidate and wind down its affairs. Its long-term-care insurance was purchased by families to avoid crushing nursing home costs.
“Liquidation is rare, but it does happen in bunches sometimes,” said Robert Hunter, director of insurance for the Consumer Federation of America. The organization has been warning about problems with long-term-care insurance since the early 1990s. See the NY Times story here: read the Times story
In 2012 the judge handling the case declined to allow liquidation, complaining that the Pennsyvania insurance commissioner caused the problem by denying a justifiable rate increase. The judge wrote, in part, that:
The Insurance Commissioner, wearing his hat as a regulator of the Pennsylvania insurance industry, refused to approve the Companies' actuarially justified rate increase filings in the amount requested, both before and after rehabilitation. The Commissioner has even discouraged other state regulators from approving rate increases. Now the Commissioner seeks to liquidate the Companies because their premium rates are inadequate.
The full 164 page 2012 page opinion is at http://www.penntreatyamerican.com/downloads/20120503-ruling.pdf the entire record in the case can be found at http://www.penntreatyamerican.com/investornews.asp
The NY Times reports that a large long term care insurer, Penn Treaty of Allentown, Pa., has been ordered to liquidate and wind down its affairs. Its long-term-care insurance was purchased by families to avoid crushing nursing home costs.
“Liquidation is rare, but it does happen in bunches sometimes,” said Robert Hunter, director of insurance for the Consumer Federation of America. The organization has been warning about problems with long-term-care insurance since the early 1990s. See the NY Times story here: read the Times story
In 2012 the judge handling the case declined to allow liquidation, complaining that the Pennsyvania insurance commissioner caused the problem by denying a justifiable rate increase. The judge wrote, in part, that:
The Insurance Commissioner, wearing his hat as a regulator of the Pennsylvania insurance industry, refused to approve the Companies' actuarially justified rate increase filings in the amount requested, both before and after rehabilitation. The Commissioner has even discouraged other state regulators from approving rate increases. Now the Commissioner seeks to liquidate the Companies because their premium rates are inadequate.
The full 164 page 2012 page opinion is at http://www.penntreatyamerican.com/downloads/20120503-ruling.pdf the entire record in the case can be found at http://www.penntreatyamerican.com/investornews.asp
US Supreme Court: Does a retailer have a Free Speech right to separately post a credit card surcharge?
The US Supreme Court has decided a case, Expressions Hair Design v. Schneiderman, that relates to the long-running dispute between Visa and MasterCard and merchants who want to avoid fees charged by credit card companies by stating surcharge fees separately and thereby steering customers toward cash. That undermines the credit card companies desire to make the fees invisible to consumers.
The decision was a victory for plaintiff businesses that wish to tell their customers that they impose a surcharge for using credit cards. But the Supreme Court decided only that the law regulated their speech rather than conduct, and it left it to an appeals court to determine whether the law violated the First Amendment.
See EXPRESSIONS HAIR DESIGN v. SCHNEIDERMAN Opinion of the Court at https://www.supremecourt.gov/opinions/16pdf/15-1391_g31i.pdf
From the opinion: "Section 518 is different. The law tells merchants nothing about the amount they are allowed to collect from a cash or credit card payer. Sellers are free to charge $10 for cash and $9.70, $10, $10.30, or any other amount for credit. What the law does regulate is how sellers may communicate their prices. A merchant who wants to charge $10 for cash and $10.30 for credit may not convey that price any way he pleases. He is not free to say “$10, with a 3% credit card surcharge” or “$10, plus $0.30 for credit” because both of those displays identify a single sticker price—$10—that is less than the amount credit card users will be charged. Instead, if the merchant wishes to post a single sticker price, he must display $10.30 as his sticker price. Accordingly, while we agree with the Court of Appeals that §518 regulates a relationship between a sticker price and the price charged to credit card users, we cannot accept its conclusion that §518 is nothing more than a mine-run price regulation. In regulating the communication of prices rather than prices themselves, §518 regulates speech."
The majority opinion is unusual in its focus on Free Speech. However, it relates to a broader policy issue of whether and to what extent suppliers should be allowed to dictate pricing policies of retailers concerning the suppliers' products.
The US Supreme Court has decided a case, Expressions Hair Design v. Schneiderman, that relates to the long-running dispute between Visa and MasterCard and merchants who want to avoid fees charged by credit card companies by stating surcharge fees separately and thereby steering customers toward cash. That undermines the credit card companies desire to make the fees invisible to consumers.
The decision was a victory for plaintiff businesses that wish to tell their customers that they impose a surcharge for using credit cards. But the Supreme Court decided only that the law regulated their speech rather than conduct, and it left it to an appeals court to determine whether the law violated the First Amendment.
See EXPRESSIONS HAIR DESIGN v. SCHNEIDERMAN Opinion of the Court at https://www.supremecourt.gov/opinions/16pdf/15-1391_g31i.pdf
From the opinion: "Section 518 is different. The law tells merchants nothing about the amount they are allowed to collect from a cash or credit card payer. Sellers are free to charge $10 for cash and $9.70, $10, $10.30, or any other amount for credit. What the law does regulate is how sellers may communicate their prices. A merchant who wants to charge $10 for cash and $10.30 for credit may not convey that price any way he pleases. He is not free to say “$10, with a 3% credit card surcharge” or “$10, plus $0.30 for credit” because both of those displays identify a single sticker price—$10—that is less than the amount credit card users will be charged. Instead, if the merchant wishes to post a single sticker price, he must display $10.30 as his sticker price. Accordingly, while we agree with the Court of Appeals that §518 regulates a relationship between a sticker price and the price charged to credit card users, we cannot accept its conclusion that §518 is nothing more than a mine-run price regulation. In regulating the communication of prices rather than prices themselves, §518 regulates speech."
The majority opinion is unusual in its focus on Free Speech. However, it relates to a broader policy issue of whether and to what extent suppliers should be allowed to dictate pricing policies of retailers concerning the suppliers' products.
From Public Citizen:
The Hill Reports Bill to Weaken CFPB Could be Marked Up in April While Politico Makes it Seem As it Might Not Move
Here is The Hill's Report. Excerpt:
Republicans on the House Financial Services Committee are eyeing April markups for Dodd-Frank legislation, meaning Democrats have just about a month to settle on a strategy to defend the CFPB.
Some Democrats think working with Republicans on some changes to the CFPB could be sound policy.
Several House Financial Services Committee Democrats say backing a coalition, for example, could protect the agency from withering under a Trump appointee.
“I’ve been warning my party for a long time that at some point you’re going to have a Republican president,” said Rep. Brad Sherman (D-Calif.). “I prefer a bipartisan commission.”
And here is Politico's:
What did the health care meltdown mean for Republicans’ hopes of dismantling President Barack Obama’s other legislative legacy, Dodd-Frank?
It certainly didn't help. While tax reform appears to be moving to the frontburner, sources on the Hill and downtown saw no similar opening for “doing a big number” on Democrats’ landmark Wall Street legislation, as President Donald Trump once promised.
If anything, sources said Friday's episode underscored the risk that Republicans haven’t fully identified their internal political fault lines, including when it comes to undoing Dodd-Frank, and that Democrats will be emboldened to fight back.
So don't expect House Financial Services Chairman Jeb Hensarling's Dodd-Frank alternative, known as the Financial CHOICE Act, to hit the House floor in the near future, unless Trump or his team — which includes a small army of Goldman Sachs alums — take a strong interest.
Treasury Secretary Steven Mnuchin is conducting a wide-ranging review of financial regulations for a report that’s not due until June.
“If Dodd-Frank reform is a big priority for the White House and Steven Mnuchin, you could see it potentially move up the sequence of events. But, short of that, I don’t really know if it changes that much,” an aide to a senior House Republican said. “We’d have to get a lot of people up to speed [on the Financial CHOICE Act] who aren't really up to speed on it.”
The Hill Reports Bill to Weaken CFPB Could be Marked Up in April While Politico Makes it Seem As it Might Not Move
Here is The Hill's Report. Excerpt:
Republicans on the House Financial Services Committee are eyeing April markups for Dodd-Frank legislation, meaning Democrats have just about a month to settle on a strategy to defend the CFPB.
Some Democrats think working with Republicans on some changes to the CFPB could be sound policy.
Several House Financial Services Committee Democrats say backing a coalition, for example, could protect the agency from withering under a Trump appointee.
“I’ve been warning my party for a long time that at some point you’re going to have a Republican president,” said Rep. Brad Sherman (D-Calif.). “I prefer a bipartisan commission.”
And here is Politico's:
What did the health care meltdown mean for Republicans’ hopes of dismantling President Barack Obama’s other legislative legacy, Dodd-Frank?
It certainly didn't help. While tax reform appears to be moving to the frontburner, sources on the Hill and downtown saw no similar opening for “doing a big number” on Democrats’ landmark Wall Street legislation, as President Donald Trump once promised.
If anything, sources said Friday's episode underscored the risk that Republicans haven’t fully identified their internal political fault lines, including when it comes to undoing Dodd-Frank, and that Democrats will be emboldened to fight back.
So don't expect House Financial Services Chairman Jeb Hensarling's Dodd-Frank alternative, known as the Financial CHOICE Act, to hit the House floor in the near future, unless Trump or his team — which includes a small army of Goldman Sachs alums — take a strong interest.
Treasury Secretary Steven Mnuchin is conducting a wide-ranging review of financial regulations for a report that’s not due until June.
“If Dodd-Frank reform is a big priority for the White House and Steven Mnuchin, you could see it potentially move up the sequence of events. But, short of that, I don’t really know if it changes that much,” an aide to a senior House Republican said. “We’d have to get a lot of people up to speed [on the Financial CHOICE Act] who aren't really up to speed on it.”
Congress completes its overturning of the nation’s strongest internet privacy protections for individuals
The action is a victory for telecommunications companies, which can track and sell a customer’s online information with greater ease.
In a 215-to-205 vote largely along party lines, House Republicans moved to dismantle rules created by the Federal Communications Commission in October. Those rules, which had been slated to go into effect later this year, had required broadband providers to receive permission before collecting data on a user’s online activities.
The action, which follows a similar vote in the Senate last week, will next be brought to President Trump, who is expected to sign the bill into law. A swift repeal may be a prelude to further deregulation of the telecommunications industry.
See https://www.nytimes.com/2017/03/28/technology/congress-votes-to-overturn-obama-era-online-privacy-rules.html?ref=business
The action is a victory for telecommunications companies, which can track and sell a customer’s online information with greater ease.
In a 215-to-205 vote largely along party lines, House Republicans moved to dismantle rules created by the Federal Communications Commission in October. Those rules, which had been slated to go into effect later this year, had required broadband providers to receive permission before collecting data on a user’s online activities.
The action, which follows a similar vote in the Senate last week, will next be brought to President Trump, who is expected to sign the bill into law. A swift repeal may be a prelude to further deregulation of the telecommunications industry.
See https://www.nytimes.com/2017/03/28/technology/congress-votes-to-overturn-obama-era-online-privacy-rules.html?ref=business
From Public Citizen: Legal clash with FTC on marketing of used cars
Posted: 27 Mar 2017 06:10 AM PDT
FairWarning reports:
Can a used car be marketed as “safe” or “certified” even if it has defective air bags, a faulty ignition switch or other potentially lethal problems?
Yes, so long as the used car dealer discloses that the vehicle may be subject to a pending safety recall.
That stance, taken by the Federal Trade Commission, is at the heart of a recent legal settlement with General Motors and two used car dealers over deceptive advertising practices. But it is now being put to the test in a federal court in Washington, DC, by auto safety activists.
The safety groups contended in legal papers filed Friday that the settlement places unaware car buyers, their passengers and others at “the risk of injury or death caused by the defective vehicles.” In essence, the concern is that buyers will have a false sense of security if a car is described as safe and won’t take care of the defect that prompted the recall.
The full article is here.
Posted: 27 Mar 2017 06:10 AM PDT
FairWarning reports:
Can a used car be marketed as “safe” or “certified” even if it has defective air bags, a faulty ignition switch or other potentially lethal problems?
Yes, so long as the used car dealer discloses that the vehicle may be subject to a pending safety recall.
That stance, taken by the Federal Trade Commission, is at the heart of a recent legal settlement with General Motors and two used car dealers over deceptive advertising practices. But it is now being put to the test in a federal court in Washington, DC, by auto safety activists.
The safety groups contended in legal papers filed Friday that the settlement places unaware car buyers, their passengers and others at “the risk of injury or death caused by the defective vehicles.” In essence, the concern is that buyers will have a false sense of security if a car is described as safe and won’t take care of the defect that prompted the recall.
The full article is here.
One year after the Panama Papers: Progress on anonymous corporate ownership?
March 30, 2017, 2:00 — 4:00 p.m. EST
The Brookings Institution, Falk Auditorium, 1775 Massachusetts Avenue, N.W
Washington, DC 20036
One year after the Panama Papers exposed the offshore banking activities of the clients of the Panamanian firm Mossack Fonseca, it is still legal and permissible for corporations in America to be anonymously owned. This practice continues to draw criticism in the face of mounting requirements for financial institutions to ‘know their customers,’ and among foreign policy experts who fear a growing kleptocracy. What is the proper policy response to an area where financial regulation, national security, foreign policy, and global business converge?
On March 30, the Center on Regulation and Markets at Brookings will host Senator Sheldon Whitehouse (D-R.I.) as a sponsor of recently introduced legislation aimed at ending the use of anonymously owned corporations. A panel of experts and regulators will follow his keynote remarks. Participants will take questions from the audience.
This event will be webcast live. Join the conversation on Twitter at #PostPanama.
Opening remarks
Aaron Klein, Fellow and Policy Director, Center on Regulation and Markets, The Brookings Institution
Panel
Moderator: Kevin Hall, Chief Economics Correspondent and Senior Investigator, McClatchy Newspapers
Charles Davidson, Executive Director, Kleptocracy Initiative, The Hudson Institute
Norm Eisen, Fellow, Governance Studies, The Brookings Institution
Matthew L. Ekberg, Senior Policy Advisor, Institute of International Finance
Brian P. O'Shea, Senior Director, Center for Capital Markets Competitiveness
Keynote
The Hon. Sheldon Whitehouse (D-R.I.), Ranking Member, Judiciary Subcommittee on Crime and Terrorism and EPW Subcommittee on Oversight, U.S. Senate
Click here to Register to attend this event » Click here to Register for the live webcast »
March 30, 2017, 2:00 — 4:00 p.m. EST
The Brookings Institution, Falk Auditorium, 1775 Massachusetts Avenue, N.W
Washington, DC 20036
One year after the Panama Papers exposed the offshore banking activities of the clients of the Panamanian firm Mossack Fonseca, it is still legal and permissible for corporations in America to be anonymously owned. This practice continues to draw criticism in the face of mounting requirements for financial institutions to ‘know their customers,’ and among foreign policy experts who fear a growing kleptocracy. What is the proper policy response to an area where financial regulation, national security, foreign policy, and global business converge?
On March 30, the Center on Regulation and Markets at Brookings will host Senator Sheldon Whitehouse (D-R.I.) as a sponsor of recently introduced legislation aimed at ending the use of anonymously owned corporations. A panel of experts and regulators will follow his keynote remarks. Participants will take questions from the audience.
This event will be webcast live. Join the conversation on Twitter at #PostPanama.
Opening remarks
Aaron Klein, Fellow and Policy Director, Center on Regulation and Markets, The Brookings Institution
Panel
Moderator: Kevin Hall, Chief Economics Correspondent and Senior Investigator, McClatchy Newspapers
Charles Davidson, Executive Director, Kleptocracy Initiative, The Hudson Institute
Norm Eisen, Fellow, Governance Studies, The Brookings Institution
Matthew L. Ekberg, Senior Policy Advisor, Institute of International Finance
Brian P. O'Shea, Senior Director, Center for Capital Markets Competitiveness
Keynote
The Hon. Sheldon Whitehouse (D-R.I.), Ranking Member, Judiciary Subcommittee on Crime and Terrorism and EPW Subcommittee on Oversight, U.S. Senate
Click here to Register to attend this event » Click here to Register for the live webcast »
From Joe Libertelli at UDC
Join 158 US law deans to urge the protection of Legal Services!
The deans' LETTER was signed by our alums, the Hon. Penny Willrich, ‘82, dean of Arizona Summit Law School, UDC-DCSL Dean Shelley Broderick, MAT '82 and Andrea Lyons, ’76, dean of Valparaiso University School of Law, and 155 other US law school deans. The letter is addressed to two US House Committee Chairs and two US Senate Committee Chairs. It urges continued bi-partisan support of the Legal Services Corporation, which funds local, vitally important, legal services offices nationwide.
The UDC School of Law urges all friends, alumni and others who understand the importance of continued access to justice for low-income people to take action by contacting their own members of Congress!
Write a short letter: take Action HERE
Thank you!!
Join 158 US law deans to urge the protection of Legal Services!
The deans' LETTER was signed by our alums, the Hon. Penny Willrich, ‘82, dean of Arizona Summit Law School, UDC-DCSL Dean Shelley Broderick, MAT '82 and Andrea Lyons, ’76, dean of Valparaiso University School of Law, and 155 other US law school deans. The letter is addressed to two US House Committee Chairs and two US Senate Committee Chairs. It urges continued bi-partisan support of the Legal Services Corporation, which funds local, vitally important, legal services offices nationwide.
The UDC School of Law urges all friends, alumni and others who understand the importance of continued access to justice for low-income people to take action by contacting their own members of Congress!
Write a short letter: take Action HERE
Thank you!!
Breaking news:
EU Antitrust Regulators Clear $130 Billion Dow, DuPont Merger
By REUTERS MARCH 27, 2017, 6:48 A.M. E.D.T.
Chemical and DuPont gained conditional EU antitrust approval on Monday, March 27, 2017, for their $130 billion (103.24 billion pounds) merger by agreeing to significant asset sales, one of a trio of mega mergers that will redraw the agrochemicals industry.
The European Commission had been concerned that the merger of two of the biggest and oldest U.S. chemical producers would have few incentives to produce new herbicides and pesticides in the future.
See https://www.nytimes.com/reuters/2017/03/27/business/27reuters-du-pont-m-a-dow-eu.html?src=busln
EU Antitrust Regulators Clear $130 Billion Dow, DuPont Merger
By REUTERS MARCH 27, 2017, 6:48 A.M. E.D.T.
Chemical and DuPont gained conditional EU antitrust approval on Monday, March 27, 2017, for their $130 billion (103.24 billion pounds) merger by agreeing to significant asset sales, one of a trio of mega mergers that will redraw the agrochemicals industry.
The European Commission had been concerned that the merger of two of the biggest and oldest U.S. chemical producers would have few incentives to produce new herbicides and pesticides in the future.
See https://www.nytimes.com/reuters/2017/03/27/business/27reuters-du-pont-m-a-dow-eu.html?src=busln
LIVE STREAMED CONFERENCE: IS THERE A CONCENTRATION PROBLEM IN AMERICA?
MARCH 27-29, 2017
About the Conference:
The Stigler Center will host a three-day conference in Chicago in March 2017, bringing together academics, regulators, and public intellectuals to discuss one of the most interesting questions of our time: is there a concentration problem in the United States? The conference will cast a wide net, in an attempt to provide multidisciplinary perspective on the issues. It will particularly emphasize the following seven themes:
Watch Live: The conference will be live-streamed. For details see https://research.chicagobooth.edu/stigler/events/single-events/march-27-2017
MARCH 27-29, 2017
About the Conference:
The Stigler Center will host a three-day conference in Chicago in March 2017, bringing together academics, regulators, and public intellectuals to discuss one of the most interesting questions of our time: is there a concentration problem in the United States? The conference will cast a wide net, in an attempt to provide multidisciplinary perspective on the issues. It will particularly emphasize the following seven themes:
- What do the data tell us? Trends in concentration and competition.
- What does history tell us? The development of antitrust in America.
- Consolidation in the financial industry and its influence on antitrust.
- Winner-take-all digital platforms and big data.
- Information in the age of concentration.
- Concentration, market power, and inequality.
- Is there a role for political antitrust?
Watch Live: The conference will be live-streamed. For details see https://research.chicagobooth.edu/stigler/events/single-events/march-27-2017
House overwhelmingly passes repeal of the McCarran-Ferguson antitrust exemption for insurance companies: Competitive Health Insurance Reform Act
By Jennifer Garvin (for the American Dental Association)
Washington — The House of Representatives on March 22 voted 416-7 in favor of repealing the McCarran-Ferguson antitrust exemption for health insurance companies by passing H.R. 372, the Competitive Health Insurance Reform Act of 2017.
The ADA has advocated for repeal of the 1945 McCarran-Ferguson Act antitrust exemption for the insurance industry for more than 20 years. The Association strongly supported H.R. 372, which was introduced Jan. 10 by Rep. Paul Gosar, R-Ariz., and would authorize the Federal Trade Commission and the Justice Department to "enforce the federal antitrust laws against health insurance companies engaged in anticompetitive conduct."
"Today, a bipartisan majority in the House joined me in taking a historic step to begin rebuilding America's health care market," said Rep. Gosar, a dentist and ADA member. "As a dentist for over 25 years, I know first-hand that restoring the application of federal antitrust laws to the business of health insurance is the key to unlocking greater competition in the marketplace. Making health insurance companies compete in a free-market will result in huge benefits for hospitals, doctors and most importantly, patients."
"Free market competition leads to lower costs, greater innovation and variety in the insurance marketplace," said Dr. Gary Roberts, ADA president. "I have long appreciated Paul Gosar for his steadfast commitment to patient advocacy, and I thank him for his work on reforming the McCarran-Ferguson Act. Further, I want to thank every one of the 416 members of Congress who voted for H.R. 372 today."
This victory in the House caps a flurry of advocacy efforts by the ADA in 2017. On Feb. 16, the Association submitted written testimony to a House subcommittee hearing on Regulatory Reform, Commercial and Antitrust Law, asking for support of the bill. That was followed by the Organized Dentistry Coalition's Feb. 27 letter to the House Judiciary Committee, which unanimously voted in favor of H.R. 372.
"History has always shown us that when we put the patient first and demand that health insurance companies compete for their business, premiums go down while quality improves," Rep. Gosar said. "I'm proud to have led this effort in the House and call on Senate leaders to take up this bipartisan legislation in a timely matter."
To keep track on all the Association's insurance reform activities, visit ADA.org/McF.
By Jennifer Garvin (for the American Dental Association)
Washington — The House of Representatives on March 22 voted 416-7 in favor of repealing the McCarran-Ferguson antitrust exemption for health insurance companies by passing H.R. 372, the Competitive Health Insurance Reform Act of 2017.
The ADA has advocated for repeal of the 1945 McCarran-Ferguson Act antitrust exemption for the insurance industry for more than 20 years. The Association strongly supported H.R. 372, which was introduced Jan. 10 by Rep. Paul Gosar, R-Ariz., and would authorize the Federal Trade Commission and the Justice Department to "enforce the federal antitrust laws against health insurance companies engaged in anticompetitive conduct."
"Today, a bipartisan majority in the House joined me in taking a historic step to begin rebuilding America's health care market," said Rep. Gosar, a dentist and ADA member. "As a dentist for over 25 years, I know first-hand that restoring the application of federal antitrust laws to the business of health insurance is the key to unlocking greater competition in the marketplace. Making health insurance companies compete in a free-market will result in huge benefits for hospitals, doctors and most importantly, patients."
"Free market competition leads to lower costs, greater innovation and variety in the insurance marketplace," said Dr. Gary Roberts, ADA president. "I have long appreciated Paul Gosar for his steadfast commitment to patient advocacy, and I thank him for his work on reforming the McCarran-Ferguson Act. Further, I want to thank every one of the 416 members of Congress who voted for H.R. 372 today."
This victory in the House caps a flurry of advocacy efforts by the ADA in 2017. On Feb. 16, the Association submitted written testimony to a House subcommittee hearing on Regulatory Reform, Commercial and Antitrust Law, asking for support of the bill. That was followed by the Organized Dentistry Coalition's Feb. 27 letter to the House Judiciary Committee, which unanimously voted in favor of H.R. 372.
"History has always shown us that when we put the patient first and demand that health insurance companies compete for their business, premiums go down while quality improves," Rep. Gosar said. "I'm proud to have led this effort in the House and call on Senate leaders to take up this bipartisan legislation in a timely matter."
To keep track on all the Association's insurance reform activities, visit ADA.org/McF.
Big Bank Defendants Avoid Currency Buyers' Forex-Rigging Suit
Foreign currency buyers alleging they were charged falsely inflated prices as a result of a massive, ongoing price-fixing conspiracy by the world’s largest banks saw their latest complaint tossed out Friday by a New York federal judge, who said they failed to show how they suffered any antitrust injury.
From opinion at https://dlbjbjzgnk95t.cloudfront.net/0906000/906115/https-ecf-nysd-uscourts-gov-doc1-127119961339.pdf:
"Plaintiffs allege that they paid inflated foreign currency exchange rates caused by Defendants’ alleged conspiracy to fix prices in the foreign exchange (“FX”) or foreign currency market. Defendants move to dismiss the Second Amended Complaint (the “Complaint”) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons stated below, Defendants’ motion to dismiss is granted. "
Foreign currency buyers alleging they were charged falsely inflated prices as a result of a massive, ongoing price-fixing conspiracy by the world’s largest banks saw their latest complaint tossed out Friday by a New York federal judge, who said they failed to show how they suffered any antitrust injury.
From opinion at https://dlbjbjzgnk95t.cloudfront.net/0906000/906115/https-ecf-nysd-uscourts-gov-doc1-127119961339.pdf:
"Plaintiffs allege that they paid inflated foreign currency exchange rates caused by Defendants’ alleged conspiracy to fix prices in the foreign exchange (“FX”) or foreign currency market. Defendants move to dismiss the Second Amended Complaint (the “Complaint”) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons stated below, Defendants’ motion to dismiss is granted. "
Google and the EU: Vestager warns against using algorithms for price collusion
By CPI
Europe’s antitrust chief warned companies against using algorithms to block rivals or form cartels, saying she may slap heftier fines on them if they use such software to commit wrongdoing.
European Competition Commissioner Margrethe Vestager, who is poised to fine US technology giant Google in the coming months for using its algorithm to unfairly demote rival shopping services in internet search results, said she was vigilant to such illegal practices.
“I don’t think competition enforcers need to be suspicious of everyone who uses an automated system for pricing. But we do need to be alert,” Vestager said at a conference organised by the German cartel office Bundeskartellamt.
She pointed to the challenge of tackling sophisticated cartels which use software to fix prices and allocate markets among themselves to the detriment of customers and the economy, saying sanctions should reflect and deter this new tool used by companies.
Full Content: Wall Street Journal
By CPI
Europe’s antitrust chief warned companies against using algorithms to block rivals or form cartels, saying she may slap heftier fines on them if they use such software to commit wrongdoing.
European Competition Commissioner Margrethe Vestager, who is poised to fine US technology giant Google in the coming months for using its algorithm to unfairly demote rival shopping services in internet search results, said she was vigilant to such illegal practices.
“I don’t think competition enforcers need to be suspicious of everyone who uses an automated system for pricing. But we do need to be alert,” Vestager said at a conference organised by the German cartel office Bundeskartellamt.
She pointed to the challenge of tackling sophisticated cartels which use software to fix prices and allocate markets among themselves to the detriment of customers and the economy, saying sanctions should reflect and deter this new tool used by companies.
Full Content: Wall Street Journal
Maryland legislator proposes law to regulate "rent to own" homesellers; Congress investigates
In Maryland, a state legislator introduced a measure to better regulate rent-to-own landlords to make sure they are renting habitable homes and not trying to pass off major repairs onto their tenants. The measure did not get out of the committee but Delegate Samuel Rosenberg said he intends to re-introduce it in the next session. Mr. Rosenberg said he drafted the proposal after reading an article in The New York Times about problems with rent-to-own landlords, including a nationwide firm that owns homes in Baltimore. What follows is a copy of his proposed legislation and some letters in support, including one from the office of Maryland's attorney general.
The proposal is here: https://www.nytimes.com/interactive/2017/03/13/business/dealbook/document-Rent-to-Own-Bill.html
A investigative letter from Congress to a rent-to-own company is here:
https://democrats-oversight.house.gov/sites/democrats.oversight.house.gov/files/documents/2017-01-18.EEC%20to%20Vision%20Property%20Management.pdf
In Maryland, a state legislator introduced a measure to better regulate rent-to-own landlords to make sure they are renting habitable homes and not trying to pass off major repairs onto their tenants. The measure did not get out of the committee but Delegate Samuel Rosenberg said he intends to re-introduce it in the next session. Mr. Rosenberg said he drafted the proposal after reading an article in The New York Times about problems with rent-to-own landlords, including a nationwide firm that owns homes in Baltimore. What follows is a copy of his proposed legislation and some letters in support, including one from the office of Maryland's attorney general.
The proposal is here: https://www.nytimes.com/interactive/2017/03/13/business/dealbook/document-Rent-to-Own-Bill.html
A investigative letter from Congress to a rent-to-own company is here:
https://democrats-oversight.house.gov/sites/democrats.oversight.house.gov/files/documents/2017-01-18.EEC%20to%20Vision%20Property%20Management.pdf
Can Companies Behind Health Savings Accounts Bank On Big Profits Under GOP Plan?
http://khn.org/news/companies-behind-health-savings-accounts-could-bank-on-big-profits-under-gop-plan/?utm_campaign=KHN%3A%20Daily%20Health%20Policy%20Report&utm_source=hs_email&utm_medium=email&utm_content=45223467&_hsenc=p2ANqtz-_suW9EYanORyKPQzToQRh-zGPDwOsfaJ8t-mIQO_wADugkmzyEeoKe_Njfr0SETQBpWN46LwMYtMT8QMUvoh934izaxQ&_hsmi=45223467
http://khn.org/news/companies-behind-health-savings-accounts-could-bank-on-big-profits-under-gop-plan/?utm_campaign=KHN%3A%20Daily%20Health%20Policy%20Report&utm_source=hs_email&utm_medium=email&utm_content=45223467&_hsenc=p2ANqtz-_suW9EYanORyKPQzToQRh-zGPDwOsfaJ8t-mIQO_wADugkmzyEeoKe_Njfr0SETQBpWN46LwMYtMT8QMUvoh934izaxQ&_hsmi=45223467
Many states withdraw financial support for electric cars
From NYT article:
Today, the economic incentives that have helped electric vehicles gain a toehold in America are under attack, state by state. In some states, there is a move to repeal tax credits for battery-powered vehicles or to let them expire. And in at least nine states, including liberal-leaning ones like Illinois and conservative-leaning ones like Indiana, lawmakers have introduced bills that would levy new fees on those who own electric cars.
The state actions could put the business of electric vehicles, already rocky, on even more precarious footing. That is particularly true as gas prices stay low, and as the Trump administration appears set to give the nascent market much less of a hand.
Full article: https://www.nytimes.com/2017/03/11/business/energy-environment/electric-cars-hybrid-tax-credits.html?ref=business
From NYT article:
Today, the economic incentives that have helped electric vehicles gain a toehold in America are under attack, state by state. In some states, there is a move to repeal tax credits for battery-powered vehicles or to let them expire. And in at least nine states, including liberal-leaning ones like Illinois and conservative-leaning ones like Indiana, lawmakers have introduced bills that would levy new fees on those who own electric cars.
The state actions could put the business of electric vehicles, already rocky, on even more precarious footing. That is particularly true as gas prices stay low, and as the Trump administration appears set to give the nascent market much less of a hand.
Full article: https://www.nytimes.com/2017/03/11/business/energy-environment/electric-cars-hybrid-tax-credits.html?ref=business
On March 7, the State of Hawaii moved for leave to file an Amended Complaint that details their allegations against the new Executive Order on Immigration
Here, courtesy of the Hogan Lovells law firm, is the motion and proposed complaint. The latter document details the Plaintiffs’ grievances with respect to President Trump’s 3/6/17 Travel Ban.
Here, courtesy of the Hogan Lovells law firm, is the motion and proposed complaint. The latter document details the Plaintiffs’ grievances with respect to President Trump’s 3/6/17 Travel Ban.